(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
(Registrant's telephone number, including area code) | ||||||||||||||
Inapplicable | ||||||||||||||
(Former name or former address if changed since last report) |
Title of each class | Trading Symbol | Name of exchange on which registered | ||||||
Exhibit Number | Description of Exhibit | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Ascent Industries Co | |||||
Dated: November 8, 2022 | By: /s/ Aaron M. Tam | ||||
Aaron M. Tam | |||||
Chief Financial Officer |
(in millions, except per share and margin) | Q3 20221 | Q3 2021 | Change | ||||||||
Net Sales | $100.2 | $86.2 | 16% | ||||||||
Gross Profit | $11.6 | $18.0 | -36% | ||||||||
Gross Profit Margin | 11.5% | 20.9% | -940bps | ||||||||
Net Income | $0.6 | $8.2 | -92% | ||||||||
Diluted Earnings per share | $0.06 | $0.87 | -93% | ||||||||
Adjusted EBITDA | $5.6 | $14.8 | -62% | ||||||||
Adjusted EBITDA Margin | 5.6% | 17.2% | -1160bps |
(Unaudited) | |||||||||||
September 30, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 532 | $ | 2,021 | |||||||
Accounts receivable, net of allowance for credit losses of $998 and $216, respectively | 55,592 | 50,126 | |||||||||
Inventories, net | 137,843 | 103,249 | |||||||||
Prepaid expenses and other current assets | 4,632 | 3,728 | |||||||||
Assets held for sale | 518 | 855 | |||||||||
Total current assets | 199,117 | 159,979 | |||||||||
Property, plant and equipment, net | 43,176 | 43,720 | |||||||||
Right-of-use assets, operating leases, net | 29,575 | 30,811 | |||||||||
Goodwill | 11,430 | 12,637 | |||||||||
Intangible assets, net | 11,794 | 14,382 | |||||||||
Deferred charges, net | 228 | 302 | |||||||||
Other non-current assets, net | 4,122 | 4,171 | |||||||||
Total assets | $ | 299,442 | $ | 266,002 | |||||||
Liabilities and Shareholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 44,815 | $ | 32,318 | |||||||
Accounts payable - related parties | — | 2 | |||||||||
Accrued expenses and other current liabilities | 11,430 | 12,407 | |||||||||
Current portion of note payable | 580 | — | |||||||||
Current portion of long-term debt | 2,464 | 2,464 | |||||||||
Current portion of earn-out liabilities | — | 1,961 | |||||||||
Current portion of operating lease liabilities | 1,041 | 1,104 | |||||||||
Current portion of finance lease liabilities | 290 | 233 | |||||||||
Total current liabilities | 60,620 | 50,489 | |||||||||
Long-term debt | 70,131 | 67,928 | |||||||||
Long-term portion of operating lease liabilities | 31,190 | 32,059 | |||||||||
Long-term portion of finance lease liabilities | 1,302 | 1,414 | |||||||||
Deferred income taxes | 1,593 | 2,433 | |||||||||
Other long-term liabilities | 67 | 89 | |||||||||
Total non-current liabilities | 104,283 | 103,923 | |||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity: | |||||||||||
Common stock, par value $1 per share; authorized 24,000,000 shares; issued 11,085,103 shares | 11,085 | 11,085 | |||||||||
Capital in excess of par value | 46,637 | 46,058 | |||||||||
Retained earnings | 85,021 | 63,080 | |||||||||
142,743 | 120,223 | ||||||||||
Less: cost of common stock in treasury - 850,671 and 918,471 shares, respectively | 8,204 | 8,633 | |||||||||
Total shareholders' equity | 134,539 | 111,590 | |||||||||
Total liabilities and shareholders' equity | $ | 299,442 | $ | 266,002 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||
Tubular Products | $ | 72,839 | $ | 70,127 | $ | 248,517 | $ | 193,438 | ||||||||||||||||||
Specialty Chemicals | 27,328 | 16,055 | 84,070 | 45,609 | ||||||||||||||||||||||
$ | 100,167 | $ | 86,182 | $ | 332,587 | $ | 239,047 | |||||||||||||||||||
Operating income | ||||||||||||||||||||||||||
Tubular Products | $ | 4,509 | $ | 11,711 | $ | 31,935 | $ | 21,793 | ||||||||||||||||||
Specialty Chemicals | 1,097 | 1,356 | 6,111 | 1,999 | ||||||||||||||||||||||
Corporate | ||||||||||||||||||||||||||
Unallocated corporate expenses | 3,890 | 2,009 | 10,241 | 5,138 | ||||||||||||||||||||||
Acquisition costs and other | 149 | 201 | 837 | 201 | ||||||||||||||||||||||
Proxy contest costs and recoveries | — | — | — | 168 | ||||||||||||||||||||||
Earn-out adjustments | — | 160 | (7) | 1,430 | ||||||||||||||||||||||
Total Corporate | 4,039 | 2,370 | 11,071 | 6,937 | ||||||||||||||||||||||
Operating income | 1,567 | 10,697 | 26,975 | 16,855 | ||||||||||||||||||||||
Interest expense | 827 | 329 | 1,637 | 1,068 | ||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 223 | ||||||||||||||||||||||
Change in fair value of interest rate swap | — | — | — | (2) | ||||||||||||||||||||||
Other, net | (118) | (10) | (176) | 152 | ||||||||||||||||||||||
Income before income taxes | 858 | 10,378 | 25,514 | 15,414 | ||||||||||||||||||||||
Income tax provision | 234 | 2,179 | 3,573 | 3,235 | ||||||||||||||||||||||
Net income | $ | 624 | $ | 8,199 | $ | 21,941 | $ | 12,179 | ||||||||||||||||||
Net income per common share | ||||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.88 | $ | 2.14 | $ | 1.32 | ||||||||||||||||||
Diluted | $ | 0.06 | $ | 0.87 | $ | 2.11 | $ | 1.30 | ||||||||||||||||||
Average shares outstanding | ||||||||||||||||||||||||||
Basic | 10,253 | 9,287 | 10,235 | 9,237 | ||||||||||||||||||||||
Diluted | 10,465 | 9,403 | 10,407 | 9,348 | ||||||||||||||||||||||
Other data: | ||||||||||||||||||||||||||
Adjusted EBITDA1 | $ | 5,572 | $ | 14,808 | $ | 37,987 | $ | 29,447 |
Nine Months Ended September 30, | |||||||||||
2022 | 2021 | ||||||||||
Operating activities | |||||||||||
Net income | $ | 21,941 | $ | 12,179 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation expense | 6,380 | 5,459 | |||||||||
Amortization expense | 2,588 | 2,041 | |||||||||
Amortization of debt issuance costs | 74 | 71 | |||||||||
Asset impairments | — | 233 | |||||||||
Loss on extinguishment of debt | — | 223 | |||||||||
Deferred income taxes | (1,227) | (615) | |||||||||
Earn-out adjustments | (7) | 1,430 | |||||||||
Payments of earn-out liabilities in excess of acquisition date fair value | (662) | (11) | |||||||||
Provision for (reduction of) losses on accounts receivable | 782 | (388) | |||||||||
Provision for losses on inventories | 1,871 | 2,286 | |||||||||
Loss (gain) on disposal of property, plant and equipment | 31 | (580) | |||||||||
Non-cash lease expense | 322 | 373 | |||||||||
Non-cash lease termination loss | — | 5 | |||||||||
Change in fair value of interest rate swap | — | (2) | |||||||||
Issuance of treasury stock for director fees | 364 | 58 | |||||||||
Stock-based compensation expense | 961 | 695 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (6,249) | (15,525) | |||||||||
Inventories | (36,127) | (15,539) | |||||||||
Other assets and liabilities | (782) | (1,443) | |||||||||
Accounts payable | 11,774 | 15,118 | |||||||||
Accounts payable - related parties | (2) | 2 | |||||||||
Accrued expenses | (1,594) | 3,272 | |||||||||
Accrued income taxes | 555 | 6,844 | |||||||||
Net cash provided by operating activities | 993 | 16,186 | |||||||||
Investing activities | |||||||||||
Purchases of property, plant and equipment | (3,467) | (761) | |||||||||
Proceeds from disposal of property, plant and equipment | 5 | 1,054 | |||||||||
Net cash (used in) provided by investing activities | (3,462) | 293 | |||||||||
Financing activities | |||||||||||
Borrowings from long-term debt | 352,513 | 41,648 | |||||||||
Proceeds from note payable | 967 | — | |||||||||
Proceeds from the exercise of stock options | 175 | — | |||||||||
Payments on long-term debt | (350,311) | (54,056) | |||||||||
Payments on note payable | (387) | — | |||||||||
Principal payments on finance lease obligations | (193) | (31) | |||||||||
Payments on earn-out liabilities | (1,292) | (2,891) | |||||||||
Payments for termination of interest rate swap | — | (46) | |||||||||
Repurchase of common stock | (492) | — | |||||||||
Payments for deferred financing costs | — | (165) | |||||||||
Net cash provided by (used in) financing activities | 980 | (15,541) | |||||||||
(Decrease) increase in cash and cash equivalents | (1,489) | 938 | |||||||||
Cash and cash equivalents, beginning of period | 2,021 | 236 | |||||||||
Cash and cash equivalents, end of period | $ | 532 | $ | 1,174 | |||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||
Cash paid for: | |||||||||||
Interest | $ | 1,176 | $ | 994 | |||||||
Income taxes | 4,248 | 649 | |||||||||
Noncash Investing Activities: | |||||||||||
Capital expenditures, not yet paid | $ | 785 | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||
Net income | $ | 624 | $ | 8,199 | $ | 21,941 | $ | 12,179 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Interest expense | 827 | 329 | 1,637 | 1,068 | ||||||||||||||||||||||
Change in fair value of interest rate swap | — | — | — | (2) | ||||||||||||||||||||||
Income taxes | 234 | 2,179 | 3,573 | 3,235 | ||||||||||||||||||||||
Depreciation | 2,171 | 1,868 | 6,380 | 5,459 | ||||||||||||||||||||||
Amortization | 1,146 | 680 | 2,588 | 2,041 | ||||||||||||||||||||||
EBITDA | 5,002 | 13,255 | 36,119 | 23,980 | ||||||||||||||||||||||
Acquisition costs and other | 149 | 201 | 837 | 201 | ||||||||||||||||||||||
Proxy contest costs and recoveries1 | — | — | — | 168 | ||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 223 | ||||||||||||||||||||||
Earn-out adjustments | — | 160 | (7) | 1,430 | ||||||||||||||||||||||
Loss on investment in equity securities and other investments | — | — | — | 363 | ||||||||||||||||||||||
Asset impairments | — | — | — | 233 | ||||||||||||||||||||||
Gain on lease modification | — | — | (2) | — | ||||||||||||||||||||||
Stock-based compensation | 313 | 239 | 708 | 695 | ||||||||||||||||||||||
Non-cash lease expense | 108 | 124 | 322 | 373 | ||||||||||||||||||||||
Retention expense | — | 18 | — | 494 | ||||||||||||||||||||||
Restructuring and severance costs | — | 811 | 10 | 1,287 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 5,572 | $ | 14,808 | $ | 37,987 | $ | 29,447 | ||||||||||||||||||
% sales | 5.6 | % | 17.2 | % | 11.4 | % | 12.3 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
($ in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Tubular Products | ||||||||||||||||||||||||||
Net income | $ | 4,539 | $ | 11,556 | $ | 32,037 | $ | 20,558 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Interest expense | — | — | 1 | — | ||||||||||||||||||||||
Depreciation expense | 1,063 | 1,449 | 3,438 | 4,192 | ||||||||||||||||||||||
Amortization expense | 625 | 680 | 1,876 | 2,041 | ||||||||||||||||||||||
EBITDA | 6,227 | 13,685 | 37,352 | 26,791 | ||||||||||||||||||||||
Earn-out adjustments | — | 160 | (7) | 1,430 | ||||||||||||||||||||||
Stock-based compensation | 40 | (7) | 64 | 75 | ||||||||||||||||||||||
Non-cash lease expense | — | — | (1) | — | ||||||||||||||||||||||
Retention expense | — | 18 | — | 494 | ||||||||||||||||||||||
Restructuring and severance costs | — | 313 | — | 363 | ||||||||||||||||||||||
Tubular Products Adjusted EBITDA | $ | 6,267 | $ | 14,169 | $ | 37,408 | $ | 29,153 | ||||||||||||||||||
% segment sales | 8.6 | % | 20.2 | % | 15.1 | % | 15.1 | % | ||||||||||||||||||
Specialty Chemicals | ||||||||||||||||||||||||||
Net income | $ | 1,088 | $ | 1,360 | $ | 6,083 | $ | 2,001 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Interest expense | 9 | — | 28 | 1 | ||||||||||||||||||||||
Depreciation expense | 1,097 | 389 | 2,897 | 1,165 | ||||||||||||||||||||||
Amortization expense | 520 | — | 712 | — | ||||||||||||||||||||||
EBITDA | 2,714 | 1,749 | 9,720 | 3,167 | ||||||||||||||||||||||
Asset impairments | — | — | — | 233 | ||||||||||||||||||||||
Stock-based compensation | 12 | 5 | 29 | 172 | ||||||||||||||||||||||
Non-cash lease expense | — | — | 1 | — | ||||||||||||||||||||||
Restructuring and severance costs | — | — | — | 427 | ||||||||||||||||||||||
Specialty Chemicals Adjusted EBITDA | $ | 2,726 | $ | 1,754 | $ | 9,750 | $ | 3,999 | ||||||||||||||||||
% segment sales | 10.0 | % | 10.9 | % | 11.6 | % | 8.8 | % |
Cover Page |
Nov. 08, 2022 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Nov. 08, 2022 |
Entity Registrant Name | Ascent Industries Co. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 0-19687 |
Entity Tax Identification Number | 57-0426694 |
Entity Address, Address Line One | 1400 16th Street, |
Entity Address, Address Line Two | Suite 270, |
Entity Address, City or Town | Oak Brook, |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60523 |
City Area Code | (630) |
Local Phone Number | 884-9181 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, par value $1.00 per share |
Trading Symbol | ACNT |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000095953 |
Amendment Flag | false |
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