ACNT - Earnings call transcript Q2 2024

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Ascent's financial results for the second quarter ended June 30, 2024.

Joining us today are Ascent's Executive Chairman of the Board, Ben Rosenzweig, CEO; Bryan Kitchen, CFO; Ryan Kavalauskas; and the company's outside Investor Relations adviser, Cody Cree.

Following their remarks, we'll open the call for your questions.

Before we go further, I would like to turn the call over to Cody Cree as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Cody Cree

Sherri. Thanks,

federal I'd contain all to . currently certain harbor cause of to continue, discussion that the results available to statements actual and provisions may These uncertainties are today forward-looking the various to like us we on materially. subject participants remind the safe are and Before based laws. to information risks securities differ statements could pursuant that

and XX-K advises and review XX-Q Ascent those the a for this listening uncertainties. risks on to call posted summary all to these website its latest of

that update Ascent may forward-looking be found does release available measurement. press not accordance company company's undertake the this at earnings the on posted measures. earlier back replay the the non-GAAP the and company's in for these section Further, responsibility via also call issued with the note today website. of Investors GAAP-based to to discussion link reconciled reconciliations G, Investors closest section the any ascentco.com. is has The that the is can posted In of Regulation statements. Please include amounts on the website today webcast

Rosenzweig. like of call Executive the to the I'd to over over Ascent's Board, to that, With turn Ben Ben, you. Chairman

Benjamin Rosenzweig

more bear through see we I'm due continue segments some Though and Cody, soft, second product to pickup good efforts the churning that towards you, remains the Thank improved volume as broader environment did afternoon, pleased fruit. slow-moving results stabilization we across reported beginning to lines. are for everyone. demand shifting financial we quarter some our inventory both profitable as

to more growth to In meantime, of in to efforts to will operational but optimize our and initial all the opportunities on done demand There's both in slowly segments. continued the drive product working. XXXX expect improve still see and cut year fronts, and we're focus we've to near-term our remainder see pleased substantial our mix be costs, more on We initiatives efficiencies beyond. diligently these the occur through

the these rather half demand the meaningful in We side. from uptick expect of self-help to initiatives improvements sales the come year financial on back than anticipating in any internal

I'm Ryan details on our will businesses. both track of we're segment, right the long-term but provide the executing that towards vision on pleased each specific for all these

We Ryan to our that building, fixes value in towards business the in for segment we segment and are confident while predictable run basic focus Specialty steps profitable We segment. continue by that this keeping revenue on more the main our our can take profitable streams, maximizing long-term of the execute deliver term. Bryan shareholders driving remain belief the resulting initiatives long Tubular over for Chemicals and growth team value as better

is current position Turning to our priorities. capital today. remain where comfortable with We liquidity our allocation

that credit company. We in the current deploy of be availability have in facility focused to within moment the high still ample should arise to revolving operations flexible allows us accretive capital our but an optimizing across we're areas, on this conviction opportunity

all avenues exploring We do our as stock below to the our to company's remain value. the trades repurchase continue of in as market shares and so intrinsic open to committed long expectation

believe I near investment audience. efforts to to small-cap overall, term, bring near-term goals, the with Relations as with resonates expect In And have that community, confident stated the credibility on market. been to direction. progress wider remain strategic we restore executing we're step It's making our against to our up the in I that a and we well mission it's us incumbent and a story message our Investor highly

and company sheet look to position opportunities. on forward continued quarters in adjusted strengthen the EBITDA, we've and to balance pleased I momentum returned to come. future the that positive I'm capitalize to better Ascent's our growth years

call you. to the later questions. our pass provide over on to answer across details to available segments. Bryan any to operations Bryan, I'll to Now, on I'd be both over like

J. Kitchen

all Thanks, you joining this Ben, and thank us for afternoon.

enterprise During us our and since both tapping XXXX, that a pleased and in our nicely QX to I'm that adjusted best so we XXXX without QX, we facility. building quarter despite build consolidated the and momentum report cleanup in of of the into for year. across positioning headwinds, actions revolving of that continued call, credit related I and market-driven were fourth earnings the did quarter recovery the shared back EBITDA was delivered half to our the Momentum

volume largely business. across Material slow-moving The markets than the to have which gains deselection were not inventory efforts done favors remained QX purposeful unprofitable our more monetize domain offset segments attributed as soft. of in our any us to

or improve labor and to to road our reduction accelerated nearly quarter aggressive enterprise. year. underpinned $X XX% a overhead self-help by To across of was specific, and XX% was or profitability recapitalization in the and million in material by more prior in team costs same reduction a nearly as $X the Our talent the QX compared delivered million be

headwinds, talent Our ongoing the the capabilities. impact unfavorable and aggressive market us overcome critical and reinvestments actions to made mix of positioned in both

lot work strategy do, aligned to We but highly of are is with our vision. our employees long-term our a working have and

that, creating our to tubular products. for We into value commentary, the durable our with dive segment-specific With are let's on right starting track shareholders.

much see We that caused value soft. Demand in across by across We further demand financing believe working the higher of of compounded markets volume softness quarter-on-quarter of projects We was on growth XX%. hold. attribute capital of put our many across be a to management did strong to cost that this tight chain. remained underlying the markets credit end has capital

depressed primarily low-priced by However, nickel pricing. was driven fulfilling pricing order unfavorable by backlog offset this and

segment all this of since for XXXX. the the compared improve we've of year, hard at XXX% been the segment cost we structure, for were work prior optimizing prior the highest as on EBITDA and to aspects this, by our Despite our and to adjusted quarter gross quarter fourth profit able quarterly result delivered

not our inclusive As I segment, operations. last but focus has to continuing isolated entire the Munhall. mentioned in our of been call,

I'm monetize million with to certain to the on XX% end a that of a generating gain associated equates cash book definitive $X.X pleased to share agreement which to proceeds, we the value. quarter, assets have or into subsequent of million $X.X entered Munhall

We are unturned. matters. all stone It no leaving

to this goal maximize value our of that for overarching segment we base and Our all is the optimizing simplifying current standardizing, do. asset by

fullest While we our path. achieving are not the yet right we are segment, within on potential the

our to segment. shift let's Now Chemicals Specialty

remained sales customers. gain As product run in remain that volume new on accelerating while call, monetize QX impact. full we've We efforts in rate towards while of our our demand generally second slow-moving the the the around at centered attributed development of of and has largely inventory, problems. line, evaluating move focused year-over-year our quarter. solving thoughtfully year, to our XX% this team our product exploring gains been to opportunities hyper earnings and anticipated sharpening soft opportunities Material for last market traction our request business Since wins customers' busy our are existing tactics new product marketing development were

new for in remain in in customer approach, are We QX, qualification. strategic R&D being allocated. developed increased number our record our disciplined evaluating resulting Demands of formulations team fit a resources on significantly before

shoots for taking growth advantage While branded the critical actively in we and do are second sales. this product full the as of work to the year, capacity solutions-based strong our see towards time green optimize establish we to more foundation given that importance is half ratability, profitability of sales stabilize, hope predictability of more we to transition branded provide. This of improved product shifting a and

this problems, most of ability is to driven profitability sequential shift reception QX are by solve our customers. the month-over-month this Momentum difficult and space, self-improvement initiatives, Chemicals in cost, was and encouraged Like needs. their for we receiving of customers' segment, build are overhead. to from to in a our growing number path by innovating to improvements our material in blue-chip we labor the enhanced Tubular speed Core at the continues delivering

Our compared labor team a and or nearly overhead delivered the or and as quarter in prior cost to material $X same a million reduction in million XX% $X reduction year. XX%

mix. gains impact and us overcome the market of ongoing These unfavorable helped headwinds

gross in segment first quarterly culminated XXXX. in organic building we segment, the our of is and result, the Chemicals profitable by year Specialty inorganic improved for with efforts growth. the EBITDA a our into figure quarter the the compared and we As combined segment Momentum business prior adjusted profit quarter. these since All are for the XXX% highest positioning

team in accomplished great has a we're But way. Our right importantly, more deal a short the of doing time. period it

all optimizing solid standardizing, We and earnings do. growth are that simplifying laying for we a foundation durable by

is getting started, but incredibly our that of pleased are optimistic future the team making. I just I progress with the about We remain Ascent. am

the through Kavalauskas floor our turn it over to our like more walk detail. yours. in Ryan, I'd financial now, to quarter results us second CFO, And is Ryan to

Ryan Kavalauskas

Net was across operations both $X.X compared you, continuing quarter sales year-over-year This operations the million operations in share million churn segments. right leading profit increased attributable Net million Bryan, negative in pricing second The was diluted sourcing in segments. was in to offset for compared segments. Gross million as quarter of to the to year XX.X% priced, to The loss lower afternoon, were significantly second of a primarily year to primarily and $X.X the by slight the good million decrease period. our loss across slow-moving X.X% from prior results. $XX.X inventory of from a in compared $X.X operations share to through net volume or an XXXX, increased from in $X.XX loss Jumping we improvements to XXXX. from or $X.XX continuing continuing uptick million per both decline strategic loss improved period. to continuing a $XX.X second the Thank quarter across margin prior to everyone. cost negative attributable compared to quarter while initiatives, diluted second per both $X.X gross to increase continued financial

second much negative in outstanding a was last the adjusted and attributable to negative increase EBITDA Adjusted improvement a $X.X the due gross result profitability period to was the the X.X% to significantly compared decrease initiatives cost improved improvement The aforementioned same The to profit improvement primarily expense same last period million having aforementioned we've optimization primarily in EBITDA interest while implemented. margin quarter year, of year. lower debt. increased to $X.X and compared the in in in to million X.X% year-over-year

capital, inorganic no XXXX, $XX.X ending diligent quarter provides in the at third organic our be and Lastly, position us debt to our which consecutive of we credit million near revolving with drive facility, to XX, our under in access outstanding with looking availability growth our continue June liquidity to as future.

second shares approximately quarter XXXX, $XXX,XXX repurchase of or through repurchased we a of our program. the share XX,XXX total During

the turn back I'll that, for operator Q&A. to With now over it

Operator

Siegfried, our David line private And first investor. of question a Instructions] [Operator from will the come

David Siegfried

you Congratulations that's achieved the remarkable. businesses, on momentum in both

J. Kitchen

you. Thank

David Siegfried

question. a Just

both businesses, sequentially assume of the it with material be will out safe there that costs margin is to going have improvement So labor and forward? taken been that

J. Kitchen

it's David, Yes. Bryan.

absolutely. So carry yes, yet, margin evaluate We're not our further product and our going We're mix, cost. to optimize through. that We're to see for portfolio, we look continue product continuing improvement ways to to right? done

David Siegfried

has branded How Got lately? cadence it. sales How that the of chemicals? been product going is in the

Ryan Kavalauskas

Yes. heading we David. that volumes on those we we Good. call perspective, think right an say, we We're had. our direction, based earnings that meaningful we're on pretty would opportunities to towards the some traction. last the in second initial And in I quarter had sponsoring started again, from X activity in mean, I R&D the rate getting reported closer build that I run

Tennessee, be right in the portfolio have to but the terms work we're got we more hyper-focused. and In of of there's rest done, people, the we've that

David Siegfried

is you So new just a the wins the more just quarter, quarter. those that had in in increased activity Is in the some second $XX and that million that effective Or first have sales you team? demand? wins

Ryan Kavalauskas

that net those No, we have -- pipeline we new the the selling selling have to didn't prior in not on were QX. opportunities that did

build net that new, were getting rate to EBITDA to those continue run and full So volume, month-on-month QX. and revenue inside of they

the just by progress, and So an we're we're with team do. pleased driven a hyperfocus And the building. incredible with largely a there's to traction, that pleased it's lot more

David Siegfried

hear. Good. Good to

$X.X a million subsequent the sale for end, Munhall. quarter asset So was to there

million, add build you of to in $X what it's as to if June I balance something cash cash that XX, $X.X be, how but know determined So let's just of let the that's say cash the would just going that until use it? it's the million to is don't north

Ryan Kavalauskas

capital strategically near I'll Inorganic investments have let we're point, a but our business more away. probably future mean, decisions Yes, looking margin at those. reinvestment in than we thought. little for accretive building we'll of can look I capital Ben make, at again, at come about, at we right the is, growth attention this the to broadly some None But had talk if the allocation. there's level,

that. So looking at like things

for point, specific So the allocation no there's at this capital.

see to cost, building the let cash going is. are it it's We're on focused to We and it the good build. way

Benjamin Rosenzweig

Yes. our Exactly what cash because think change there's that it good everything have a making creating I going But liquidity on to we at feel now. value. is bit sure to right mentality the David. some very be balance position said, good terms little thresholds. our mean to enterprise the mean the Ryan sheet I doesn't excess of of that just in this moment And we're knowing we're ability about building cash meets

David Siegfried

I've had the think owned we've cash years sheet. on X don't stock, ever I that balance Absolutely. think the don't I

more So $X than million.

good. that's So

say for months the the perhaps you what management with you So or months here than potential then, perceived more ago? is Bryan X Would been and maybe that Ryan, team so. you've X even

J. Kitchen

mean, well. that existing of. I'll Ryan, capable let of we company, inside our just you incredibly as I'm and a about foundational unlock capabilities I beginning to really There's some what more I in they're lot the right? can our we've this do we're I got incredible base. prospects to is do mean bullish jump Bryan. asset Yes. think of

Ryan Kavalauskas

Yes. I more. couldn't agree

there's can through can business. continue this we of pull of efficiency I think out to We margin self-help. drive a ton

we amount how there's more to We've things anticipated. how fixed But So yes, extract of more lot we get even the margin within focus there's I business, a there had can a operate, efficiently, there. think than commercially. of we tremendous got

where it So it pull the to at more so are and about still some we're yes, determine what levers. But when takes out kind still we all time extremely started. of than bigger remain we optimistic

Operator

Thank back like session. our concludes call you. for At to turn closing now I the to this would Mr. Kitchen time, question-and-answer remarks. over this

J. Kitchen

Sherri. again forward to a speaking like have to report you, We listening you and call, today's thank results. for would Great. XXXX Thank with afternoon. to everyone Thanks, we our quarter third we look and great when

Operator

all you Thank program. today's for concludes This participating.

disconnect. now may You

Ascent Industries (ACNT) 6 Aug 242024 Q2 Earnings call transcript