Ascent Industries Co (ACNT) Q3 2024 Earnings Call Highlights: Financial Turnaround and ...

GuruFocus News
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In This Article:

  • Net Sales: $42.9 million, down from $46.7 million in the prior year period.

  • Gross Profit: Increased 117% to $6.5 million from $3 million in Q3 2023.

  • Gross Margin: Improved to 15.1% from 6.4% in the prior year period.

  • Net Loss: Improved to $7 million or $0.69 diluted loss per share, compared to $14.7 million or $1.45 diluted loss per share in Q3 2023.

  • Adjusted EBITDA: Increased to $2.5 million from negative $1.5 million in the same period last year.

  • Adjusted EBITDA Margin: Improved to 5.7% from negative 3.2% in the same period last year.

  • Cash Position: $8.5 million on the balance sheet.

  • Borrowing Availability: $57.5 million under the revolving credit facility extended through 2027.

  • Share Repurchase: 42,623 shares repurchased for approximately $0.4 million.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Ascent Industries Co (NASDAQ:ACNT) reported its third consecutive quarter of financial improvement, indicating successful stabilization efforts.

  • The company achieved a significant increase in gross profit, up 117% to $6.5 million, and improved gross margin to 15.1% from 6.4% in the prior year.

  • Ascent Industries Co (NASDAQ:ACNT) remains debt-free with $8.5 million in cash and access to $57.5 million in borrowing availability, providing a strong liquidity position.

  • The Specialty Chemicals segment delivered a 67% year-over-year improvement in gross margin, showcasing effective cost management and pricing strategies.

  • The company has been actively repurchasing shares, indicating confidence in its intrinsic value and commitment to shareholder returns.

Negative Points

  • Net sales from continuing operations decreased to $42.9 million from $46.7 million in the prior year, primarily due to lower volumes and pricing in the Tubular Products segment.

  • The company experienced a net loss from continuing operations of $7 million, although this was an improvement from the previous year's loss.

  • Ascent Industries Co (NASDAQ:ACNT) faced soft demand throughout the quarter, resulting in a decline in volumes across both segments.

  • The company took a $6.2 million tax charge related to a valuation allowance against deferred tax assets, impacting financial results.

  • Despite operational improvements, the company is still in the early stages of its continuous improvement journey and faces ongoing market headwinds.

Q & A Highlights

Q: Do you see the Tubular segment reaching a bottom soon, given the industrial companies' outlook? A: J. Bryan Kitchen, CEO: We are cautiously optimistic. We're seeing an increase in inbound quotation opportunities across several markets, indicating potential improvement.

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