Ecovyst Reports Mixed Q3 2024 Results with Increased Sales and Decreased Net Income

Ecovyst Inc. reported its financial results for the three and nine months ended September 30, 2024, showing a mixed performance compared to the same periods in 2023. For the third quarter of 2024, total sales reached $179.2 million, an increase of $5.9 million (3.4%) from $173.3 million in Q3 2023. The Ecoservices segment contributed significantly to this growth, with sales of $153.9 million, up 4.3% from $147.6 million in the prior year, driven by higher average selling prices and increased sales volume of virgin sulfuric acid. However, the Advanced Materials & Catalysts segment saw a slight decline, with sales of $25.3 million, down 1.6% from $25.7 million.

Gross profit for the third quarter increased to $54.7 million, a rise of $1.5 million (2.8%) compared to $53.2 million in Q3 2023. This increase was attributed to higher selling prices and sales volume, although it was partially offset by unfavorable manufacturing costs. Operating income for the quarter decreased slightly to $31.6 million, down $0.4 million from $32.0 million, primarily due to increased selling, general, and administrative expenses, which rose by 18.3% to $20.0 million.

Net income for the third quarter was $14.3 million, a decrease of $2.3 million (13.9%) from $16.6 million in the same period last year. The decline in net income was also reflected in the income before income taxes, which fell to $18.8 million from $24.5 million. The effective income tax rate for Q3 2024 was 24.0%, down from 32.3% in Q3 2023.

For the nine months ended September 30, 2024, total sales were $522.5 million, a modest increase of $4.2 million (0.8%) from $518.3 million in the same period in 2023. However, net income for the nine months dropped significantly to $23.8 million, down 42.2% from $41.2 million in 2023. This decline was largely due to a substantial decrease in equity in net income from affiliated companies, which fell to $2.5 million from $16.3 million, reflecting lower earnings from the Zeolyst Joint Venture.

Ecovyst's cash and cash equivalents as of September 30, 2024, stood at $123.5 million, a significant increase from $38.3 million a year earlier. The company also reported a net cash provided by operating activities of $106.4 million for the nine months, up from $73.4 million in 2023. Total debt as of September 30, 2024, was $873.0 million, with net debt of $749.5 million after accounting for cash and cash equivalents.

Strategically, Ecovyst continues to focus on its stock repurchase program, with $229.6 million remaining available for repurchases as of September 30, 2024. The company also made a minority equity investment of $4,500 in Pajarito Powder LLC, which specializes in materials for electrolyzers and fuel cells.