What changed in ASCENT INDUSTRIES CO.'s 10-K — 2024 vs 2025

Item 1. Business General Information Ascent Industries Co. (“Ascent” or the “Company”) is a specialty chemicals platform delivering differentiated, performance-driven chemical solutions to a diverse set of end markets. The Company develops, manufactures, and supplies tailored formulations and intermediates that enhance product performance and optimize industrial processes.

Ascent operates three production facilities located in Cleveland, Tennessee; Fountain Inn, South Carolina; and Danville, Virginia. These facilities support customers across energy, household, industrial and institutional (“HII”), personal care, coatings, adhesives, sealants and elastomers (“CASE”), agriculture, water treatment, pulp and paper, construction, automotive, and other industrial markets.

The Company’s core product portfolio includes surfactants, defoamers, lubricating agents, flame retardants, and specialty intermediates, offered in both petroleum-based and bio-based formulations. Ascent’s products are used as critical ingredients and process aids in applications such as cleaning formulations, coatings systems, oilfield production chemicals, agrochemical formulations, metalworking fluids, water treatment solutions, and industrial textiles.

The Company's common stock is listed on the NASDAQ Global Market - ticker symbol "ACNT". For additional information about the Company’s performance and financial condition, see Item 7 , “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of this Annual Report.

Our Strategy In 2025, the Company introduced its Chemicals-as-a-Service (“CaaS”) strategy, focused on building a differentiated specialty chemicals platform that solves customer problems across the value chain. Rather than competing solely on products or manufacturing capacity, the Company offers an integrated suite of services that includes formulation development, reaction capabilities, blending and packaging, logistics, regulatory support, and delivery.

The CaaS strategy is designed to create value at critical points in the customer relationship—where performance, reliability, and execution matter most. Management believes these “moments that matter” are where long-term customer relationships are established through consistent delivery and problem-solving rather than price or availability alone.

The Company’s strategy is organized around four core pillars: • Discovery & Development : Accelerating speed to solution through collaborative formulation, application, and process development • Commercial & Contracting: Simplifying how customers engage with the Company through responsive and flexible commercial structures • Manufacturing and Fulfillment: Delivering consistent, reliable, and efficient production and supply • Service & Lifecycle Support: Providing technical, regulatory, and operational support throughout the product lifecycle The Company operates an agile business model designed to serve customers in the manner they require, including when, where, and how products and services are developed, manufactured, and delivered.

Management believes this flexibility enhances customer satisfaction, supports long-term relationships, and enables sustainable growth. 3 Table of Contents Sales. Marketing and Supply Chain The Company markets and sells its products primarily through a combination of inside and outside sales representatives supported by technical, operational, and commercial resources.

Sales and marketing efforts are organized around markets and applications to align customer opportunities with the Company’s specialized asset base and drive synergistic, capital-efficient growth. Sales and business development teams work closely with marketing operations to develop and manage a pipeline of customer-specific selling projects.

These projects are typically solution-oriented and driven by customer performance requirements, application needs, and the customer’s ability to resource lab and field qualification activities. As a result, sales cycles are often extended and measured in months or quarters, reflecting the collaborative nature of customer engagement.

Sales, marketing, and research and development teams collaborate to integrate customer requirements with the Company’s technical capabilities and manufacturing footprint, supporting new product introductions, expansion of existing customer relationships, and improved utilization of existing assets. Management believes this approach enables incremental revenue growth with limited incremental fixed cost, contributing to margin expansion and operating leverage over time.

The top five customers accounted for approximately 51% of revenues for 2025 and 35% of revenues for 2024. The Company actively manages customer concentration risk by pursuing growth across a diversified set of customers, applications, and end markets. The Company sources the majority of its raw materials from numerous independent suppliers.

Approximately 34% of total raw material purchases were sourced from the Company's top five suppliers in 2025. While certain raw materials are obtained from a limited number of suppliers, management believes its sourcing strategies and supplier relationships mitigate supply risk. Approximately 95% of sales in 2025 were supported by domestically supplied raw materials.

Research and Development Research and development (“R&D”) is a core component of the Company’s strategy and plays a critical role in supporting both organic growth and long-term customer relationships.

The Company’s R&D efforts are focused not only on the development of new products, but also on the integration and optimization of customer products and processes across the Company’s diverse manufacturing asset base. Over the past year, the Company has strengthened its R&D capabilities through targeted talent acquisition, adding technical expertise in product and application development.

These investments have expanded the Company’s ability to collaborate more deeply with customers and accelerate the development and commercialization of differentiated solutions. The R&D function works closely with Sales and Business Development to engage directly with customers to understand their specific performance targets, processing conditions, and application needs.

This collaborative approach enables the Company to develop customized formulations, deliver manufacturing process improvements, and align customer requirements with the Company’s available assets and capabilities. As a result, the Company is able to support customers throughout the product lifecycle, from initial development and scale-up through ongoing optimization and supply.

The Company has found that successfully solving a customer’s initial technical or performance challenge often leads to broader engagement, as customers increasingly view the Company as a trusted partner of choice for additional products, applications, and services. This approach supports deeper customer relationships, higher switching costs, and increased opportunities for cross-selling and long-term growth.

Management believes the strategic impact of the Company's R&D efforts are significant, as they enable differentiation, strengthen customer relationships, and support the Company’s Chemicals-as-a-Service operating model.

("BRISMET"), entered into an Asset Purchase Agreement (the “Purchase Agreement”) pursuant to which they sold substantially all of the assets related to BRISMET to Bristol Pipe and Tube, Inc., a Delaware corporation and wholly-owned subsidiary of Ta Chen International, Inc. (the “Purchaser”).

Ascent and Purchaser also entered into a Transition Services Agreement (the “TSA”) dated March 12, 2025, pursuant to which Ascent has agreed to provide certain transition services to Purchaser immediately after the closing for certain agreed upon transition periods. On April 4, 2025, the Company and Purchaser completed the transaction contemplated by the Purchase Agreement.

The consideration for the transaction was approximately $45 million of cash proceeds, of which $4.5 million was placed in an escrow account to be received in 18 months from the closing date. On June 23, 2025, the Company and its wholly-owned subsidiary American Stainless Tubing, Inc.

Seasonality The Company does participate in agricultural end markets, which may experience increased demand during the second and third quarters; however, outside of these markets, management does not believe seasonality materially affects overall demand patterns.

Variations in quarterly results are more often driven by customer ordering behavior, project timing, and the progression of customer-specific development and qualification activities rather than underlying end-market seasonality. Backlogs The Company's backlog of open orders were $8.4 million and $4.6 million at the end of 2025 and 2024, respectively.

Management monitors turnover trends by location and across the Company and believes this metric reflects a combination of normal workforce movement and purposeful organizational changes to support the Company’s strategic objectives. The Company's average employee tenure is approximately 9 years, which management believes reflects workforce stability and institutional experience.

The Company focuses on attracting, developing, and retaining employees with the skills and experience necessary to support safe operations, customer requirements, and execution of its strategy. 5 Table of Contents People and Culture The Company’s culture emphasizes accountability, execution, and continuous improvement.

Across the organization, employees are expected to take ownership of their work, collaborate across functions, and focus on delivering measurable outcomes that improve results for customers and the business. Performance is evaluated based on results achieved rather than activity or effort alone. Management believes this operating mindset supports disciplined decision-making, operational excellence, and long-term value creation.

The Company’s results depend on its ability to attract, develop, and retain employees with the technical skills, experience, and judgment required to execute its strategy. The Company focuses on building teams capable of operating effectively in a complex manufacturing and customer-driven environment, while providing professional development opportunities aligned with performance, accountability, and contribution.

Factors that may affect the Company’s ability to attract and retain employees include competition for qualified talent and the availability of individuals with specialized technical expertise. Management believes the Company’s emphasis on clear expectations, outcome-based performance management, and ongoing development supports employee engagement and retention while enabling the Company to execute its strategy effectively.

Total Rewards The Company invests in its workforce through a total rewards program designed to attract, retain, and motivate employees while supporting consistent performance and operational execution. The program includes competitive compensation and a range of health, wellness, retirement, and educational benefits aligned with market practices and employee needs.

The Company also offers an Employee Assistance Program (“EAP”) that provides employees and their families with access to confidential support resources, including counseling, legal, and financial services. Management believes these resources support employee well-being, reduce disruptions, and help employees remain focused and effective in their roles.

In 2024, the Company implemented an annual performance-based bonus program for employees within its Chemicals segment and Corporate functions. The program is designed to align employee incentives with Company performance and operational objectives. In 2025, the Company has also introduced targeted long-term incentive programs for select roles to support retention and alignment with long-term value creation.

Industry and Segment Risks Our industry is highly competitive, and demand for our products and our financial results may be negatively impacted by changes in industry capacity utilization, shifts in production geography, raw material dynamics, and competition from other specialty chemical providers. We operate in a highly competitive specialty chemicals marketplace.

Our financial performance is sensitive to fluctuations in industry capacity utilization; pricing often declines when overall capacity exceeds demand, leading to underutilization and pressure on margins. Overcapacity in regions such as Asia, particularly when production is exported to other markets, can disrupt supply-demand balances globally and reduce demand for our products in key regions.

Our ability to compete effectively depends on maintaining advanced technical capabilities and continuously developing and commercializing innovative, high-value specialty chemical solutions for current and prospective customers.

Growing competition from alternative products, especially those with enhanced environmental profiles or lower costs, or from substitutes that deliver similar performance could reduce demand for our offerings and adversely affect our market position, pricing power, and growth opportunities. Variations in our product, customer, and geographic sales mix make it difficult to predict future performance.

Our net sales and gross margins fluctuate based on the specific mix of products, customers, and regions in any period, which can differ significantly from prior or expected periods. Gross margins are heavily influenced by this mix, as well as by competitive dynamics, product commoditization, rising input or logistics costs, inflation, regulatory changes, and other market factors.

These variations have historically caused material period-to-period differences in results (particularly during economic downturns) and can complicate assessments of how external conditions or internal changes may impact our business. As a result, forecasting operating results remains challenging.

A substantial portion of our sales is dependent upon a limited number of customers with the top five customers accounting for approximately 51% of revenues for 2025 and 35% of revenues for 2024. An adverse change in, or termination of, the relationship with one or more of our top customers could materially and adversely affect our results of operations.

Industry dynamics, technological changes, and customer trends may lead to volatility in our results. The specialty chemicals sector experiences rapid innovation, product obsolescence, pricing pressures, raw material volatility, and shifting supply-demand patterns. End markets such as oil & gas, coatings, personal care, and others are influenced by technological advances, regulatory shifts, consumer preferences for sustainable alternatives, and economic factors.

Changes in customer formulations, processes, or specifications could render certain products less relevant or obsolete, while alternatives may emerge that reduce or eliminate the need for our solutions. These factors can cause significant fluctuations in sales, margins, and overall financial condition. We must continue to enhance existing products, develop new ones, and accurately predict customer needs to remain competitive.

Our business depends on the timely availability of raw materials, and any interruption in our ability to procure such materials, or significant volatility in their pricing, could adversely affect our business, financial condition and results of operations.

We actively manage our sourcing strategy to mitigate supply risk and cost volatility, including maintaining relationships with multiple approved suppliers where commercially practicable, monitoring supplier performance and financial condition, and managing inventory levels.

However, these efforts may not fully protect us from supply interruptions, capacity constraints, 7 Table of Contents transportation disruptions, geopolitical developments, force majeure events, or other unforeseen circumstances affecting our suppliers. While most of our raw materials are available from multiple sources, certain key inputs are obtained from a sole supplier or a limited number of qualified suppliers.

The loss of, or significant reduction in supply from, any such supplier could require us to identify and qualify alternative sources, potentially resulting in increased costs, capital expenditures, or production delays. Any such disruption could adversely affect our ability to meet customer demand.

Raw material prices are subject to volatility due to changes in supply and demand, energy costs, global trade conditions, regulatory developments and other macroeconomic factors. Significant or sustained increases in raw material costs may adversely impact our margins if we are unable to timely pass such increases through to customers.

Competitive market conditions, contractual arrangements, or customer purchasing behavior may limit our ability to fully recover cost increases or delay the timing of such recovery. In addition, volatility in raw material pricing may influence customer ordering patterns, which could affect our sales volumes and operating results.

Accordingly, any material disruption in our supply chain, inability to secure adequate raw material supply at acceptable prices and terms, or limitations in our ability to pass through cost increases could materially and adversely affect our business, financial condition and results of operations. The financial health of our customers or suppliers could impair demand, pricing, collections, or our supply chain.

Our customers operate in competitive end markets and face pressures from their own competitors, shifting preferences, and economic conditions. These factors have historically led some customers to experience financial distress, including bankruptcy or receivership.

Distressed customers may delay payments, seek concessions on pricing or terms, reduce volumes, or eliminate product lines, and prior payments may be subject to clawback in bankruptcy proceedings. Such developments could negatively affect our sales, margins, and cash flow.

Similarly, if key suppliers face insolvency or fail to meet obligations, we may need to secure replacement supplies at higher costs or on less favorable terms, with limited recovery options. Raw materials for our specialty chemicals are generally available from multiple sources, but some needs are met by sole or limited suppliers with terminable relationships.

These projects involve complexities such as construction timelines, equipment commissioning, customer quality certifications, and 8 Table of Contents demand forecasting. Delays, budget overruns, or failure to achieve expected returns are possible. Some projects rely on government incentives or funding, which could change or be unavailable.

If we lack sufficient capital or face higher-than-anticipated needs due to technology shifts or competition, we may struggle to maintain or expand capabilities in key markets. Ascent relies on information technology systems that are vulnerable to disruption and cybersecurity threats. Our operations depend heavily on IT systems for efficient functioning and, in some cases, core business processes.

We outsource significant portions of IT management, including infrastructure, networks, data centers, end-user support, backups, and security to third-party providers. Any prolonged failure or disruption of these systems, whether ours or a third party's, could cause substantial operational interruptions, damage our reputation, and harm our financial results.

Given the nature of our business and customer base, we are a potential target for evolving cybersecurity threats, including those from hackers, insiders, or advanced tools such as artificial intelligence. While we maintain controls, policies, and procedures to mitigate these threats, they may not always prevent breaches or detect issues promptly.

A significant breach could result in loss or theft of proprietary information, intellectual property, customer/supplier data, or employee information, triggering legal notifications, litigation, regulatory penalties, remediation costs, and harm to customer relationships, brand reputation, and financial performance. If we fail to maintain an efficient cost structure, our profitability may suffer.

Our competitiveness and profitability depend on controlling costs across manufacturing, operations, sales, and support functions. We pursue ongoing efficiency and cost-reduction initiatives, which may involve facility optimizations, workforce adjustments, or process changes. These efforts require significant management focus and carry risks, including employee relations issues or failure to achieve targeted savings.

If we cannot sustain efficiencies amid market price pressures, our margins and financial performance could decline. Natural disasters, pandemics, or other catastrophic events could disrupt operations and materially affect our results.

Events such as severe weather (hurricanes, floods, storms), earthquakes, pandemics, or other catastrophes at our facilities, those of suppliers, customers, or in key regions could interrupt production, supply chains, or demand. Past events, including hurricanes and global health crises such as COVID-19, have impacted volumes, costs, and operations.

Future occurrences could similarly harm results, financial position, and cash flows, depending on severity, duration, and broader economic effects. Government Regulation Risks Evolving ESG expectations and requirements could increase costs and create new risks. Heightened emphasis on environmental, social, and governance (ESG) factors require ongoing investment in tracking, reporting, and progress toward sustainability goals amid changing standards.

Third-party ESG ratings influence investor decisions, and failure to meet expectations could harm our reputation. Disclosure rules, which are rapidly growing in complexity and number, demand resources and may necessitate revisions to methodologies, goals, or reported data. Compliance with emerging climate or environmental regulations could drive additional capital spending, operating expenses, or product changes, with potentially material costs.

Our business, which involves manufacturing operations, custom chemical production, and sales to industries such as coatings, adhesives, pulp & paper, textiles, automotive, water treatment, construction, heavy industrial, petrochemical, food processing, pharmaceutical, oil & gas, and others, may be impacted by factors outside our control.

These include changes in tax laws or tax rates, as well as conditions in financial services and capital markets, including counterparty risk from suppliers or customers, rising interest rates that could increase borrowing costs for capital-intensive manufacturing, inflation affecting raw material and energy costs (e.g., petroleum-derived inputs), deflation impacting pricing, and fluctuations in currencies relevant to our international sales or sourcing.

Macroeconomic challenges, such as volatility in financial and capital markets, unemployment levels, and the U.S. and other governments' ability to manage rising debt, may persist and exert pressure on the broader economy. This could lead to shifts in tax policies or rates, reduced demand for our specialty chemicals, supply chain disruptions, higher input costs, or competitive pressures.

The Audit Committee is composed of Board members with diverse expertise, including technology, financial and risk management experience. 13 Table of Contents The Audit Committee and full Board receive periodic briefings from management on our cyber risk management programs.

Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and infrastructure. This program includes the implementation of a set of system, network and application level controls to protect our data and systems.

See Item 1A , Risk Factors, for discussion of the Company's information technology and cybersecurity risks, including those involving artificial intelligence.