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What changed in Ecovyst Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ecovyst Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+382 added−356 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-29)

Top changes in Ecovyst Inc.'s 2024 10-K

382 paragraphs added · 356 removed · 308 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

79 edited+8 added−6 removed102 unchanged
Biggest changeKey End Uses Significant Growth Drivers Key Products Clean Fuels, Emission Control & Other • Global regulatory requirements to: • Refining hydrocracking catalysts • Reduce sulfur from diesel and gasoline • Emission control catalyst supports • Remove nitrogen oxides from tailpipe emissions • Catalyst supports used in the production of sustainable fuels such as renewable diesel • Growing demand for sustainable fuels • Catalyst used in the production of sustainable aviation fuels • Growing demand for ex-situ catalyst activation to support traditional and sustainability fuels production • Catalyst activation • Improve lubricant characteristics to improve fuel efficiencies • Aluminum sulfate solution • Municipal and industrial water treatment • Ammonium bisulfite solution Polyethylene, Polymers & Engineered Plastics • Demand for high-density polyethylene used for strengthening and light weighting components • Catalysts for high-density polyethylene and chemicals syntheses • Demand for durable packaging • Antiblock for film packaging • Growing demand for recycling of materials • Catalyst for advanced recycling Regeneration and Treatment Services • Increase gasoline octane in order to improve fuel efficiency while lowering vapor pressure and sulfur to regulated levels • Sulfuric acid regeneration services • High industry utilization • Treatment services • Growing demand for applications in hazardous and non-hazardous waste Industrial, Mining & Automotive • Demand for metals and minerals for low carbon technologies and infrastructure • Sulfuric acid for mining • Demand for a wide range of products including construction materials, auto, consumer goods, and chemicals • Sulfur derivatives for industrial production • Recovery in global oil drilling/U.S. copper production • Sulfur derivatives for nylon production 4 December 31, 2023 December 31, 2022 December 31, 2021 Key End Uses Sales % of Sales Zeolyst JV Sales (1) % of Zeolyst JV sales (2) Sales % of Sales Zeolyst JV Sales (1) % of Zeolyst JV sales (2) Sales % of Sales Zeolyst JV Sales (1) % of Zeolyst JV sales (2) Clean Fuels, Emission Control & Other Ecovyst $ 29.9 4.0 % $ — — % $ 29.0 4.0 % $ — — % $ 25.7 4.0 % $ — — % Zeolyst Catalyst — — % 127.0 81.0 % — — % 103.4 78.0 % — — % 113.8 87.0 % Polyethylene, Polymers & Engineered Plastics Ecovyst $ 106.2 15.0 % $ — — % $ 117.7 14.0 % $ — — % $ 110.7 18.0 % $ — — % Zeolyst Catalyst — — % 29.5 19.0 % — — % 29.2 22.0 % — — % 17.5 13.0 % Regeneration and Treatment Services Ecovyst $ 354.6 52.0 % $ — — % $ 342.6 42.0 % $ — — % $ 262.0 43.0 % $ — — % Zeolyst Catalyst — — % — — % — — % — — % — — % — — % Industrial, Mining & Automotive Ecovyst $ 200.4 29.0 % $ — — % $ 330.9 40.0 % $ — — % $ 212.8 35.0 % $ — — % Zeolyst Catalyst — — % — — % — — % — — % — — % — — % Total $ 691.1 $ 156.5 $ 820.2 $ 132.6 $ 611.2 $ 131.3 (1) Represents 50% of the Zeolyst Joint Venture (the “Zeolyst Joint Venture” or “Zeolyst JV”) sales for each of the years ended December 31, 2023, 2022, and 2021, respectively.
Biggest changeKey End Uses Significant Growth Drivers Key Products Clean Fuels, Emission Control & Other • Global regulatory requirements to: • Refining hydrocracking catalysts • Reduce sulfur from diesel and gasoline • Emission control catalysts • Remove nitrogen oxides from tailpipe emissions • Catalyst supports used in the production of sustainable fuels such as renewable diesel • Growing demand for sustainable fuels • Catalysts used in production of sustainable aviation fuels • Growing demand for ex-situ catalyst activation to support traditional and sustainable fuels production • Catalyst activation • Improve lubricant characteristics to improve fuel efficiencies • Aluminum sulfate solution • Municipal and industrial water treatment • Ammonium bisulfite solution Polyethylene, Polymers & Engineered Plastics • Demand for high-density polyethylene used for strengthening and light weighting components • Catalysts and catalyst supports for high-density polyethylene and chemicals syntheses • Demand for durable packaging • Antiblock for film packaging • Growing demand for recycling of materials • Catalyst for advanced recycling Regeneration and Treatment Services • Increase gasoline octane in order to improve fuel efficiency while lowering vapor pressure and sulfur to regulated levels • Sulfuric acid regeneration services • High industry utilization • Hazardous waste treatment services • Growing demand for applications in hazardous and non-hazardous waste Industrial, Mining & Automotive • Demand for metals and minerals for low carbon technologies and infrastructure • Virgin sulfuric acid for mining • Demand for a wide range of products including construction materials, auto, consumer goods, petrochemicals and chemicals • Virgin sulfuric derivatives for industrial production • Recovery in global oil drilling/U.S. copper production • Virgin sulfuric derivatives for nylon production 4 Table of Con ten ts The table below summarizes sales for the years ended December 31, 2024, 2023 and 2022, respectively: December 31, 2024 December 31, 2023 December 31, 2022 Key End Uses Sales % of Sales Zeolyst JV Sales (1) % of Zeolyst JV sales (2) Sales % of Sales Zeolyst JV Sales (1) % of Zeolyst JV sales (2) Sales % of Sales Zeolyst JV Sales (1) % of Zeolyst JV sales (2) (in millions, except percentages) Clean Fuels, Emission Control & Other Ecovyst $ 34.0 5.0 % $ — — % $ 29.9 4.0 % $ — — % $ 29.0 4.0 % $ — — % Zeolyst Catalyst — — % 90.2 77.0 % — — % 127.0 81.0 % — — % 103.4 78.0 % Polyethylene, Polymers & Engineered Plastics Ecovyst $ 106.2 15.0 % $ — — % $ 106.2 15.0 % $ — — % $ 117.7 14.0 % $ — — % Zeolyst Catalyst — — % 26.3 23.0 % — — % 29.5 19.0 % — — % 29.2 22.0 % Regeneration and Treatment Services Ecovyst $ 357.4 51.0 % $ — — % $ 354.6 52.0 % $ — — % $ 342.6 42.0 % $ — — % Zeolyst Catalyst — — % — — % — — % — — % — — % — — % Industrial, Mining & Automotive Ecovyst $ 206.9 29.0 % $ — — % $ 200.4 29.0 % $ — — % $ 330.9 40.0 % $ — — % Zeolyst Catalyst — — % — — % — — % — — % — — % — — % Total $ 704.5 $ 116.5 $ 691.1 $ 156.5 $ 820.2 $ 132.6 (1) Represents 50% of the Zeolyst Joint Venture (the “Zeolyst Joint Venture” or “Zeolyst JV”) sales for each of the years ended December 31, 2024, 2023 and 2022, respectively.
We believe, with our long history of customer partnerships and our reputation for providing reliable, quality of products and solutions, our products deliver significant value to our customers, as demonstrated by our profit margins. We have a long track record of innovation that is reflected in our technical and production expertise in silica, zeolites and catalyst technologies.
We believe, with our long history of customer partnerships and our reputation for providing reliable, quality products and solutions, our products deliver significant value to our customers, as demonstrated by our profit margins. We have a long track record of innovation that is reflected in our technical and production expertise in silica, zeolites and catalyst technologies.
Ecoservices has also applied its expert knowledge in thermal decomposition to provide treatment services for hazardous/non-hazardous wastes, and most recently activate catalysts with our patented Chem 32, LLC (“Chem32”) technology acquired in March 2021. Our Advanced Materials & Catalysts product development and manufacturing technology is customized based on deep silica and zeolite-based advanced material science know-how.
Ecoservices has also applied its expert knowledge in thermal decomposition to provide treatment services for hazardous/non-hazardous wastes, and most recently to activate to catalysts with our patented Chem 32, LLC (“Chem32”) technology acquired in March 2021. Our Advanced Materials & Catalysts product development and manufacturing technology is customized based on deep silica and zeolite-based advanced material science know-how.
Virgin Sulfuric Acid is created either through the incinerating sulfur in furnaces, or as a by-product of other industrial processes, primarily the smelting of copper and other base metals. Our sulfur-derived, high quality virgin sulfuric acid products supply a diverse set of end uses.
Virgin sulfuric acid is created either through incinerating sulfur in furnaces, or as a by-product of other industrial processes, primarily the smelting of copper and other base metals. Our sulfur-derived, high quality virgin sulfuric acid products supply a diverse set of end uses.
We also produce a catalyst that is used globally for the production of MMA, the monomer for acrylic engineering resins, a clear scratch-resistant plastic used in sheet or molded form to replace glass and as a durable surface coating and produce a catalyst used for the manufacture of bio-butadiene.
We also produce a catalyst that is used globally for the production of MMA, the monomer for acrylic engineering resins, a clear scratch-resistant plastic used in sheet or molded form to replace glass and as a durable surface coating. We also produce a catalyst used for the manufacture of bio-butadiene.
Under some of these regulations, as the current or former owner or operator of a property, we could be held liable for the costs of removal or remediation of hazardous substances on or under the property, without regard to whether we knew of or caused the contamination, and regardless of whether the practices that resulted in the contamination were permitted at the time they occurred.
Under some of these regulations, as the current or former owner or operator of a property, we could be held liable for the costs of removal or remediation of hazardous substances on or under property, without regard to whether we knew of or caused the contamination, and regardless of whether the practices that resulted in the contamination were permitted at the time they occurred.
We have a Global Director of Health, Safety and Process Safety Management as well as Regional HSE Specialists and Managers who are embedded in the field and provide HSE expertise and support to operating sites.
We have a Global Director of Health, Safety and Process Safety Management as well as Regional HSE Specialists and Managers who are embedded in the field and provide health and safety expertise and support to operating sites.
These price adjustments generally reflect our Ecoservices actual cost structure in producing sulfuric acid, and tend to provide us with some protection against volatility in labor, fixed costs and raw material pricing. Freight expenses are generally passed through directly to customers. Our products are produced from readily available raw materials.
These price adjustments generally reflect our Ecoservices segment’s actual cost structure in producing sulfuric acid, and tend to provide us with some protection against volatility in labor, fixed costs and raw material pricing. Freight expenses are generally passed through directly to customers. Our products are produced from readily available raw materials.
Key raw materials for our segments include: Key Raw Materials Segments Sodium hydroxide (“caustic soda”) Ecoservices Sulfur Ecoservices Sodium silicate Advanced Materials & Catalysts 13 While natural gas is not a direct feedstock for any individual product, we use natural gas powered furnaces to heat raw materials and create the chemical reactions necessary to manufacture our products.
Key raw materials for our segments include: Key Raw Materials Segments Sodium hydroxide (“caustic soda”) Ecoservices Sulfur Ecoservices Sodium silicate Advanced Materials & Catalysts While natural gas is not a direct feedstock for any individual product, we use natural gas powered furnaces to heat raw materials and create the chemical reactions necessary to manufacture our products.
Dewaxing is a process where longer chain hydrocarbons are broken down into chain lengths that remain liquid at colder temperatures allowing fuel flow in trucks during colder temperatures. Legislative drivers and financial incentives are leading to rapid capacity builds at our customers, driving demand for our products.
Dewaxing is a process where longer chain hydrocarbons are broken down into chain lengths that remain liquid at colder temperatures, allowing fuel flow in trucks during colder temperatures. Legislative drivers and financial incentives are leading to capacity builds at our customers, driving demand for our products.
On August 1, 2021, we changed our name from “PQ Group Holdings Inc.” to “Ecovyst Inc.,” changed the ticker symbol of our common stock listed on the New York Stock Exchange from “PQG” to “ECVT”. On November 28, 2023, the Company renamed the “Catalyst Technologies” segment to "Advanced Materials & Catalysts”.
On August 1, 2021, we changed our name from “PQ Group Holdings Inc.” to “Ecovyst Inc.,” and changed the ticker symbol of our common stock listed on the New York Stock Exchange from “PQG” to “ECVT”. On November 28, 2023, the Company renamed the “Catalyst Technologies” segment to "Advanced Materials & Catalysts”.
Seasonality Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer and lower demand in the winter months. These demand fluctuations results in higher sales and working capital requirements in the second and third quarters.
Seasonality Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer and lower demand in the winter months. These demand fluctuations result in higher sales and working capital requirements in the second and third quarters.
The protection afforded, which may also vary from country to country, depends upon the type of subject matter covered by the patent and the scope of the claims of the patent. 14 In most industrial countries, patent protection may be available for new substances and formulations, as well as for unique applications and production processes.
The protection afforded, which may also vary from country to country, depends upon the type of subject matter covered by the patent and the scope of the claims of the patent. In most industrial countries, patent protection may be available for new substances and formulations, as well as for unique applications and production processes.
Each Ecovyst facility has developed and implemented specific critical occupational health, safety, environmental, security and loss control programs. We also have a strong Health and Safety (“H&S”) and Environmental and Sustainability (“E&S”) organizations staffed by professionals who are responsible for health, safety, process safety, sustainability, product stewardship and product safety regulatory compliance.
Each Ecovyst facility has developed and implemented specific critical occupational health, safety, environmental, security and loss control programs. We also have strong Health and Safety (“H&S”) and Environmental and Sustainability (“E&S”) organizations staffed by professionals who are responsible for health, safety, process safety, sustainability, product stewardship and product safety regulatory compliance.
Products that we sell to our customers are often high value-add, even when they represent a small portion of the overall end product costs, and we believe success can be achieved by helping customers improve their product performance, value and quality.
The products and services that we sell to our customers are often high value-add, even when they represent a small portion of the overall end product costs, and we believe success can be achieved by helping customers improve their product performance, value and quality.
We believe that our products contribute to lower emissions and cleaner air, higher fuel efficiency and cleaner fuels, and key enablers to advance the global transition to clean energy. Specifically, our products and solutions help companies in the production of sustainable fuels and help to produce vehicles with improved fuel efficiency and cleaner emissions.
We believe that our products contribute to lower emissions and cleaner air, higher fuel efficiency and cleaner fuels, and are key enablers to advance the global transition to clean energy. Specifically, our products and solutions help companies in the production of sustainable fuels and help to produce vehicles with improved fuel efficiency and cleaner emissions.
We believe we have good relationships with our employees and their respective works councils, unions or other bargaining representatives. This international strength, supported by our core values of SHINE, fosters a rich culture founded on diversity of thought.
We believe we have good relationships with our employees and their respective works councils, unions and other bargaining representatives. This international strength, supported by our core values of SHINE, fosters a rich culture founded on diversity of thought.
We are a global supplier of silicas-based advanced materials and supports for polyethylene manufacturers and custom catalyst applications, including catalyst used to produce methyl methacrylate (“MMA”), bio-butadiene and bio-catalysis used to immobilize enzymes onto silica supports.
We are a global supplier of silica-based advanced materials and supports for polyethylene manufacturers and custom catalyst applications, including catalyst used to produce methyl methacrylate (“MMA”), bio-butadiene and bio-catalysis used to immobilize enzymes onto silica supports.
We are highly diversified by business, geography and end use. In 2023, the majority of our sales were for applications that have historically had relatively predictable, consistent demand patterns driven by consumption or frequent replacement cycles. As a result of our competitive strengths, we have generally maintained stable margins through changing macro economic cycles.
We are highly diversified by business, geography and end use. In 2024, the majority of our sales were for applications that have historically had relatively predictable, consistent demand patterns driven by consumption or frequent replacement cycles. As a result of our competitive strengths, we have generally maintained stable margins through changing macro economic cycles.
In addition, some manufacturing processes involve converting alcohol into jet fuel where our zeolites catalyze the building or oligomerization of molecules into longer chains that more efficiently combust to generate power. • Light- and heavy-duty diesel engines are subject to a broad set of regulatory requirements and increasingly strict emission standards.
In addition, some manufacturing processes involve converting alcohol into jet fuel where our zeolites catalyze the building or oligomerization of molecules into longer chains that more efficiently combust to generate power. • Light- and heavy-duty diesel engines are subject to a broad set of regulatory requirements and emission standards.
The SEC maintains an Internet website, http://www.sec.gov, which contains reports, proxy and information statements, and other information regarding our Company and other issuers that file electronically with the SEC. The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings we make with the SEC.
The SEC maintains an Internet website, https://www.sec.gov, which contains reports, proxy and information statements, and other information regarding our Company and other issuers that file electronically with the SEC. The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings we make with the SEC.
Our Industry Our industry is characterized by a strong commitment to innovate and to develop enhanced performance and solutions that improve environmental, health and sustainability. In turn, this drives Ecovyst to constantly develop new products and the need to support our customers with new product innovation and technical services. Our innovation is strongly focused on customer partnerships.
Our Industry Our industry is characterized by a strong commitment to innovate and to develop enhanced performance and solutions that improve the environment, health and sustainability. In turn, this drives Ecovyst to constantly develop new products and the need to support our customers with new product innovation and technical services. Our innovation is strongly focused on customer partnerships.
As part of our sustainability commitment regarding our own operations, we apply the principles of the Environmental Management standard of the International Organization for Standardization (ISO 14001) at our facilities throughout the world. For chemical facilities in the United States, we also adhere to the Responsible Care® RC14001 Technical Specifications of the American Chemistry Council (“ACC”).
As part of our sustainability commitment regarding our own operations, we apply the principles of the Environmental Management standard of the International Organization for Standardization (ISO 14001) at our facilities throughout the world. For all of our facilities in the United States, we also adhere to the Responsible Care® RC14001 Technical Specifications of the American Chemistry Council (“ACC”).
We are partnering with technology licensors to help enable the advanced recycling of plastics. • The decarbonization of heavy-duty trucking and aviation industries by using sustainability fuels. Our Zeolyst Joint Venture leverages our knowledge of lubricant dewaxing to develop products that efficiently dewax renewable diesel.
We are partnering with technology licensors to help enable the advanced recycling of plastics. • The decarbonization of heavy-duty trucking and aviation industries by using sustainable fuels. Our Zeolyst Joint Venture leverages our knowledge of lubricant dewaxing to develop products that efficiently dewax renewable diesel.
Secured Contractual Pass-through of Raw Material Costs Support Stable Margins We have been able to mitigate the impact of raw material or energy price volatility using a variety of mechanisms, including raw material cost pass-through mechanisms in our sale contracts and other adjustment provisions.
Secured Contractual Pass-through of Raw Material Costs Support Stable Margins We have been able to mitigate the impact of raw material or energy price volatility using a variety of mechanisms, including raw material cost pass-through mechanisms in our sales contracts and other adjustment provisions.
We also have 20 pending trademark applications, which include applications in the United States and worldwide. In addition to our registered and applied-for intellectual property portfolio, we also claim ownership of certain trade secrets and proprietary know-how developed by and used in our business.
We also have 131 pending trademark applications, which include applications in the United States and worldwide. In addition to our registered and applied-for intellectual property portfolio, we also claim ownership of certain trade secrets and proprietary know-how developed by and used in our business.
Leading Supply Positions We believe that we maintain a leading supply position for certain products sold within each of our segments, holding what we estimate to be the number one or two supply share position in 2023 for products that generated more than 90% of our sales.
Leading Supply Positions We believe that we maintain a leading supply position for certain products sold within each of our segments, holding what we estimate to be the number one or two supply share position in 2024 for products that generated more than 90% of our sales.
The Adjusted EBITDA of our Advanced Materials & Catalysts segment includes our 50% portion of the Adjusted EBITDA of our Zeolyst JV. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Basis of Presentation” for a description of the treatment of the Zeolyst Joint Venture in our consolidated financial information.
The Adjusted EBITDA of our Advanced Materials & Catalysts segment includes our 50% portion of the earnings from the Zeolyst JV. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Basis of Presentation” for a description of the treatment of the Zeolyst Joint Venture in our consolidated financial information.
Again, we apply the principles of the Environmental Management standard of the International Organization for Standardization (ISO 14001) at our facilities throughout the world. For chemical facilities in the United States, we also adhere to the Responsible Care RC14001 Technical Specifications of the American Chemistry Council.
Again, we apply the principles of the Environmental Management standard of the International Organization for Standardization (ISO 14001) at our facilities throughout the world. For all of our facilities in the United States, we also adhere to the Responsible Care® RC14001 Technical Specifications of the American Chemistry Council.
We believe we are a leader in each of our business segments, holding what we estimate to be a number one or number two supply share position for products that generated more than 90% of our 2023 sales.
We believe we are a leader in each of our business segments, holding what we estimate to be a number one or number two supply share position for products that generated more than 90% of our 2024 sales.
Our Ecoservices segment is mostly regional due to shipping costs and our customer integration requirements. Our network of facilities is concentrated in the Gulf Coast and the state of California, where approximately 65% of the United States refining capacity is located.
Our Ecoservices segment is mostly regional due to shipping costs and our customer integration requirements. Our network of facilities is concentrated in the Gulf Coast and the state of California, where approximately 63% of the United States refining capacity is located.
Stable Margins and Cash Flow Generation Across Changing Macroeconomic Cycles The secular trends supporting many of our business segments has allowed us to maintain stable margins while continuing to grow in different macroeconomic environments. We believe that the stability of our margins and cash flows is also aided by long-term sale contracts and material cost pass-through.
Stable Margins and Cash Flow Generation Across Changing Macroeconomic Cycles The secular trends supporting many of our business segments has allowed us to maintain stable margins while continuing to grow in different macroeconomic environments. We believe that the stability of our margins and cash flows is also aided by long-term sales contracts and material cost pass-through provisions.
Our end-to-end regeneration service offering takes the spent acid from the refinery, through our network of plants and transportation systems, and recycles the sulfuric acid into high strength fresh sulfuric acid for reuse in the alkylation process.
Our end-to-end regeneration services offering takes the spent acid from the refinery, through our network of plants and transportation systems, and recycles the sulfuric acid into high strength fresh sulfuric acid for reuse in the alkylation process.
We believe the combination of attractive operating margins, growing end uses and generally predictable maintenance capital expenditure requirements improves our ability to generate attractive cash flows. 3 Our Product End Uses The table below summarizes our key end use applications and products, as well as the significant growth drivers in those applications.
We believe the combination of attractive operating margins, growing end uses and generally predictable maintenance capital expenditure requirements improves our ability to generate attractive cash flows. 3 Table of Con ten ts Our Product End Uses The table below summarizes our key end use applications and products, as well as the significant growth drivers in those applications.
While offering products and services that help our customers to advance their own sustainability goals, we also work to advance our commitment to maintain sound environmental, social and governance (“ESG”) practices, policies and procedures. For example, we: • Were awarded a 2024 Platinum Sustainability Score from EcoVadis, a third-party sustainability evaluation company.
While offering products and services that help our customers to advance their own sustainability goals, we also work to advance our commitment to maintain sound environmental, social and governance practices, policies and procedures. For example, we: • Were awarded a 2024 Platinum Sustainability Rating from EcoVadis, a third-party sustainability evaluation company.
Competition Given our strategic presence on the Gulf Coast and in California, and our relationships with leading refineries, we estimate that our regenerated sulfuric acid supply share is substantially larger than our closest competitor. We compete in the North American refining services industry with competitors such as Chemtrade and Veolia.
Competition Given our strategic presence on the Gulf Coast and in California, and our relationships with leading refineries, we estimate that our regenerated sulfuric acid supply share is substantially larger than our closest competitor. We compete in the North American refining services industry with competitors such as Chemtrade and Nexpera, formerly the sulfuric acid business of Veolia.
The Zeolyst Joint Venture leverages each partner’s technology and production expertise, including Shell’s expertise in hydrocracking to maximize liquid product yields, especially distillate, while at the same time removing sulfur, and Ecovyst’s expertise in zeolite research and development, production technology, and market understanding for applications including sustainable fuels, emission control technology, advanced recycling and many customized zeolite catalyst solutions. 11 Hydrocracking catalyst is the most economic method to meet sulfur emission control standards for refiners while maintaining yields for diesel, which is considered one of the most profitable product streams.
The Zeolyst Joint Venture leverages each partner’s technology and production expertise, including Shell’s expertise in hydrocracking to maximize liquid product yields, especially distillate, while at the same time removing sulfur, and Ecovyst’s expertise in zeolite research and development, production technology, and industry understanding for applications including sustainable fuels, emission control technology, advanced recycling and many customized zeolite catalyst solutions. 11 Table of Con ten ts Hydrocracking catalyst is the most economic method to meet sulfur emission control standards for refiners while maintaining yields for diesel, which is considered one of the most profitable product streams.
We also supply catalysts to leading chemical and petrochemical producers such Dow Chemical, Mitsubishi Chemical, LyondellBasell, CP Chemicals, Valero, Motiva, Saudi Aramco and Shell. We have long-term relationships with our top ten customers, based on 2023 sales, that average more than 50 years.
We also supply catalysts to leading chemical and petrochemical producers such as Dow Chemical, Mitsubishi Chemical, LyondellBasell, CP Chemicals, Valero, Saudi Aramco and Shell. We have long-term relationships with our top ten customers, based on 2024 sales, that average more than 50 years.
In accordance with SEC rules, we intend to disclose any amendment (other than any technical, administrative or other non-substantive) to the Code of Business Conduct, or any waiver of any provision thereof with respect to any of our executive officers, on our website within four business days following such amendment or waiver. 20
In accordance with SEC rules, we intend to disclose any amendment (other than any technical, administrative or other non-substantive) to the Code of Business Conduct, or any waiver of any provision thereof with respect to any of our executive officers, on our website within four business days following such amendment or waiver. 20 Table of Con ten ts
This commitment applies to all terms and conditions of employment, including recruiting, hiring, placement, advancement, training, transfer, demotion, lay off and recall, termination, compensation and benefits. It is our policy to comply with all applicable laws and regulations in each jurisdiction in which we operate in order to provide appropriate working conditions for our colleagues.
This commitment applies to all terms and conditions of employment, including recruiting, hiring, placement, advancement, training, transfer, demotion, lay off and recall, termination, compensation and benefits. 16 Table of Con ten ts It is our policy to comply with all applicable laws and regulations in each jurisdiction in which we operate in order to provide appropriate working conditions for our colleagues.
We believe that our global footprint and efficient network of strategically located manufacturing facilities provides us with a strong competitive advantage in serving our customers both globally and regionally, and that it would be costly for our competitors to replicate our network. 6 In our Advanced Materials & Catalysts segment, we primarily compete on a global basis.
We believe that our global footprint and efficient network of strategically located owned manufacturing facilities provides us with a strong competitive advantage in serving our customers both globally and regionally, and that it would be costly for our competitors to replicate our network. 6 Table of Con ten ts In our Advanced Materials & Catalysts segment, we primarily compete on a global basis.
In our Ecoservices segment, approximately 50% of our production capacity serve customers with staggered multi-year commitment contracts with potential for value pricing resets and cost pass-through for our regeneration services product line that enhances sales and margin predictability and stability.
In our Ecoservices segment, approximately 50% of our production capacity serves customers with staggered multi-year commitment contracts with potential for value pricing resets and cost pass-through for our regeneration services product line that enhance sales and margin predictability and stability.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Indicators” for discussion of our use of non-GAAP financial measures and reconciliations. (2) Percentage calculations exclude $22.0 million in corporate expenses.
Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Indicators” for discussion of our use of non-GAAP financial measures and reconciliations. (2) Percentage calculations exclude $26.8 million in corporate expenses.
We maintain appropriate information security policies and procedures reasonably designed to ensure the safeguarding of confidential information including, where appropriate, data encryption, access controls and employee awareness training. We own or have rights to a number of patents relating to our products and processes.
We maintain appropriate information security policies and procedures reasonably designed to ensure the safeguarding of confidential information including, where appropriate, data encryption, access controls and employee awareness training. 14 Table of Con ten ts We own or have rights to a number of patents relating to our products and processes.
In 2023, we served global customers across many end uses and as of December 31, 2023, operated out of ten strategically located manufacturing facilities.
In 2024, we served global customers across many end uses and as of December 31, 2024, operated out of ten strategically located owned manufacturing facilities.
In addition, we have long-term contracts and relationships with many of our key raw material suppliers across all of our business segments. 7 Long-Term Customer Contracts Enhance Sales Predictability and Stability We partner with many of our customers under long-term contract agreements, 100% requirement arrangements and/or specified products for certain license production processes.
In addition, we have long-term contracts and relationships with many of our key raw material suppliers across all of our business segments. 7 Table of Con ten ts Long-Term Customer Contracts Enhance Sales Predictability and Stability We partner with many of our customers under long-term contract agreements, 100% requirement arrangements and/or specified products for certain licensed production processes.
(2) Percentage calculations are based on $156.5 million, $132.6 million and $131.3 million of sales attributable to the Zeolyst Joint Venture, which represents 50% of its total sales for each of the years ended December 31, 2023, 2022 and 2021, respectively. 5 Competitive Business Strengths Favorable Secular Growth Trends Across the Portfolio We focus on serving end use applications where we believe our competencies can create value adding solutions and where significant growth potential exists.
(2) Percentage calculations are based on $116.5 million, $156.5 million and $132.6 million of sales attributable to the Zeolyst Joint Venture, which represents 50% of its total sales for each of the years ended December 31, 2024, 2023 and 2022, respectively. 5 Table of Con ten ts Competitive Business Strengths Favorable Secular Growth Trends Across the Portfolio We focus on serving end use applications where we believe our competencies can create value adding solutions and where significant growth potential exists.
Excluding contracts with automatic evergreen provisions, approximately 20% of our sulfuric acid volume for the year ended December 31, 2023 was under contracts expiring at the end of 2024 or beyond.
Excluding contracts with automatic evergreen provisions, approximately 40% of our sulfuric acid volume for the year ended December 31, 2024 was under contracts expiring at the end of 2025 or beyond.
The chart below summarizes the manufacturing platform for our Advanced Materials & Catalysts segment. Advanced Silicas Manufacturing Platform 12 Zeolyst Joint Venture Manufacturing Platform Raw Materials Our products are produced from readily available raw materials such as sodium silicate and sodium hydroxide (“caustic soda”).
The chart below summarizes the manufacturing platform for our Advanced Materials & Catalysts segment. Advanced Silicas Manufacturing Platform 12 Table of Con ten ts Zeolyst Joint Venture Manufacturing Platform Raw Materials Our products are produced from readily available raw materials such as sodium silicate and sodium hydroxide (“caustic soda”).
We benefit from our talented, dedicated and diverse employee population and we actively promote diversity in an effort to maintain a workforce that reflects the diversity of the societies in which we operate. As of December 31, 2023, we had 911 employees worldwide, of which 784 were employed in the United States.
We benefit from our talented, dedicated and diverse employee population and we actively promote diversity in an effort to maintain a workforce that reflects the diversity of the societies in which we operate. As of December 31, 2024, we had 920 employees worldwide, of which 798 were employed in the United States.
Most of our Ecoservices contracts feature minimum volume protection and/or quarterly price adjustments for items such as commodity inputs, labor, the Chemical Engineering Plant Cost Index and natural gas. In 2023, approximately 80% of our Ecoservices segment sales were sold under contracts that included some form of raw material pass-through clause.
Most of our Ecoservices contracts feature minimum volume protection and/or quarterly price adjustments for items such as commodity inputs, labor, the Chemical Engineering Plant Cost Index and natural gas. In 2024, approximately 90% of our Ecoservices segment sales occurred under contracts that included some form of raw material pass-through clause.
As a result, we believe that our integrated and strategically located network of facilities and end-to-end logistics assets in the United States provide us with a significant competitive advantage and would be costly for our competitors to replicate. 10 Manufacturing We produce regenerated sulfuric acid and virgin sulfuric acid through our furnace operations.
As a result, we believe that our integrated and strategically located network of facilities and end-to-end logistics assets in the United States provide us with a significant competitive advantage and would be costly for our competitors to replicate. 10 Table of Con ten ts Manufacturing We provide regeneration services and produce virgin sulfuric acid through our furnace operations.
Further, as of December 31, 2023, approximately 24% of our U.S.-based executives, managers and professionals were females and 21% were non-white males. As of December 31, 2023, approximately 44% of our employees were represented by a union, works council or other employee representative body.
Further, as of December 31, 2024, approximately 25% of our U.S.-based executives, managers and professionals were females and 21% were non-white males. As of December 31, 2024, approximately 45% of our employees were represented by a union, works council or other employee representative body.
As of December 31, 2023, we had $206.9 million of tax deductible intangibles and goodwill with respect to Eco Services Operations LLC, which provides us with cash tax savings as we generate taxable income. Our Business Segments We are a leading integrated and innovative global provider of advanced materials, specialty catalysts and services.
As of December 31, 2024, we had $174.8 million of tax deductible intangibles and goodwill with respect to Eco Services Operations Corp, which provides us with cash tax savings as we generate taxable income. Our Business Segments We are a leading integrated and innovative global provider of advanced materials, specialty catalysts and services.
We included the assured data on our website and in our 2022 Sustainability Report, which we published in July 2023. We also have established a Product Safety and Product Stewardship management system that is compliant with the RC14001 technical specification and is supported by a highly skilled Director of Product Stewardship.
We included the assured data on our website and in our 2023 Sustainability Report, which we published in June 2024. We also maintain a Product Safety and Product Stewardship management system that is compliant with the RC14001 technical specification and is supported by a highly skilled Director of Product Stewardship.
The Platinum Medal rating from EcoVadis places us among the top 1% (99th percentile) of all companies assessed by EcoVadis over the past twelve months; • Maintained an executive level position of Vice President – Environment and Sustainability that reports directly to our CEO; • Under the leadership of our Global Director of Health, Safety and Process Safety Management, instituted additional health, safety and process safety programs, as well as launched a company-wide employee health and wellness program that covers both physical and mental health; • Provided enhanced sustainability information on our website and published our 2022 Sustainability Report, our second as Ecovyst, in July 2023; • Continued work towards our recently announced series of 2025 and 2030 sustainability goals with respect to fuel usage, power usage, healthy, safety and environment performance, and community engagement; • Introduced our employees to our core values Stewardship, High Standards, Integrity and Engagement (“SHINE”) and in 2023, provided training on these values and provisions of our Code of Conduct, completing training for approximately 99.8% of active employees in 2023; 15 • Continued steps to implement additional improvements in a number of areas, including health, safety and environmental (“HSE”) performance; commitment to diversity, inclusion and human rights both within our company and in our supply chain; and ethical and lawful business practices; • Further integrated a corporate-wide sustainability software platform, which we are utilizing as an internal, real-time sustainability performance dashboard to enable improved analytics and greater visibility into our sustainability impacts; and • Achieved a greater than 90% performance in our flagship HSE Perfect Days program, which targets at-risk behaviors and celebrates positive HSE performance across the organization on a daily basis.
The Platinum Medal rating from EcoVadis placed us among the top 1% (99th percentile) of all companies assessed by EcoVadis over the prior twelve-month period; • Maintained an executive level position of Vice President – Environment and Sustainability that reports directly to our CEO; • Under the leadership of our Global Director of Health, Safety and Process Safety Management, instituted additional health, safety and process safety programs, as well as continued our company-wide employee health and wellness program that covers both physical and mental health; • Achieved zero OSHA recordable injuries among our employees and embedded contractors in 2024; • Provided enhanced sustainability information on our website and published our 2023 Sustainability Report in June 2024, our third as Ecovyst; • Continued work towards our 2025 and 2030 sustainability goals regarding fuel usage, power usage, health, safety and environment performance, and community engagement; • Introduced our employees to our core values - Stewardship, High Standards, Integrity and Engagement (“SHINE”) and provided training on these values and provisions of our Code of Conduct, completing training for approximately 99.8% of active employees in 2024; • Continued steps to implement additional improvements in a number of areas, including health, safety and environmental (“HSE”) performance; commitment to diversity, inclusion and human rights both within our company and in our supply chain; and ethical and lawful business practices; • Further integrated a corporate-wide sustainability software platform, which we are utilizing as an internal, real-time sustainability performance dashboard to enable improved analytics and greater visibility into our sustainability impacts; and • Achieved a greater than 93% performance in our flagship HSE Perfect Days program in 2024, which targets at-risk behaviors and celebrates positive HSE performance across the organization on a daily basis. 15 Table of Con ten ts The sections that follow provide some highlights of our environmental, social and governance programs and procedures.
We maintain policies and procedures to monitor and control HSE risks, and to monitor compliance with applicable state, national, and international HSE requirements. We have a strong HSE organization. We maintain a staff of professionals who are responsible for environmental, safety, health and product regulatory compliance. We have implemented a corporate audit program for all of our facilities.
We maintain policies and procedures to monitor and control HSE risks, and to monitor compliance with applicable local, state, national and international HSE requirements. We have a strong HSE organization. We maintain a staff of professionals who are responsible for environmental, safety, health, process safety and product regulatory compliance.
Certain, larger sites may have dedicated environmental or safety personnel. 19 Product Safety and Product Stewardship We have established a Product Safety and Product Stewardship management system that is compliant with the RC14001 technical specification and is supported by a highly skilled Director of Product Stewardship, who is a “Registration, Evaluation, Authorisation and Restriction of Chemicals” (“REACH”) Specialist.
Product Safety and Product Stewardship We have established a Product Safety and Product Stewardship management system that is compliant with the RC14001 technical specification and is supported by a highly skilled Director of Product Stewardship, who is a “Registration, Evaluation, Authorisation and Restriction of Chemicals” (“REACH”) Specialist.
As of December 31, 2023, we owned 21 patented inventions in the United States, with 175 patents issued in countries around the world and 61 patent applications pending worldwide. As of December 31, 2023, we also had 61 trademark registrations worldwide, including 5 U.S. trademark registrations.
As of December 31, 2024, we owned 22 patented inventions in the United States, with 169 patents issued in countries around the world and 63 patent applications pending worldwide. As of December 31, 2024, we also had 86 trademark registrations worldwide, including 5 U.S. trademark registrations.
The further information contained on our website is not incorporated herein by reference and is not a part of this Annual Report on Form 10-K. 18 Environmental Regulations We are subject to extensive, evolving and increasingly stringent national, state and/or local environmental laws and regulations, which address, among other things, the following: • emissions to the air; • discharges to soils and surface and subsurface waters; • other releases into the environment; • prevention and remediation of releases into the indoor or outdoor environment; • generation, handling, storage, transportation, treatment and disposal of waste materials; • maintenance of safe conditions in the workplace; • registration and evaluation of chemicals; • production, handling, labeling or use of chemicals used or produced by us; and • stewardship of products after manufacture.
Environmental Regulations We are subject to extensive, evolving and increasingly stringent national, state and/or local environmental laws and regulations, which address, among other things, the following: • emissions to the air; • discharges to soils and surface and subsurface waters; • other releases into the environment; • prevention and remediation of releases into the indoor or outdoor environment; • generation, handling, storage, transportation, treatment and disposal of waste materials; • maintenance of safe conditions in the workplace; • registration and evaluation of chemicals; • production, handling, labeling or use of chemicals used or produced by us; and • stewardship of products after manufacture.
Several active and former facilities currently are undergoing investigation and remediation, including sites in Dominguez, CA and Martinez, CA. Environmental Programs We have comprehensive HSE compliance, auditing and management programs in place to assist in our compliance with applicable regulatory requirements and with internal policies and procedures, as appropriate.
Several active and former facilities currently are undergoing investigation, remediation and/or surveillance, including sites in Dominguez, California, Martinez, California and Hammond, Indiana. 19 Table of Con ten ts Environmental Programs We have comprehensive HSE compliance, auditing and management programs in place to assist in our compliance with applicable regulatory requirements and with internal policies and procedures, as appropriate.
Today, there are women on the leadership teams of each of our businesses as well as in our R&D, Finance, E&S and Human Resources functions. 17 In 2023, our sites continued to work to have a positive impact in the communities in which we operate.
Today, there are women on the leadership teams of each of our businesses as well as in our R&D, Finance, E&S and Human Resources functions. 17 Table of Con ten ts In 2024, our sites continued to have a positive impact in the communities in which we operate. The following table outlines some of those impacts.
Our business has a history of innovation, enabling environmental improvements in areas such as fuel efficiency, sustainable fuels and the abatement of emissions from heavy-duty diesel engines, while improving the sustainability of our planet.
Our business has a history of innovation, enabling environmental improvements in areas such as fuel efficiency, sustainable fuels and the abatement of emissions from heavy-duty diesel engines, while improving the sustainability of our planet. Our common stock is listed on the New York Stock Exchange under the stock ticker “ECVT”.
We conduct Product Stewardship reviews as part of new product development and routinely evaluate product safety risk for raw materials, intermediates, and finished products. 16 Social Responsibility, including human capital discussions We seek to act in a socially responsible manner through our various HSE programs as described above, our commitment to building a diverse and inclusive workforce, engagement with and support for the communities where we live and work, and advancement of socially responsible business practices through partnerships and other industry frameworks.
Social Responsibility, including human capital discussions We seek to act in a socially responsible manner through our various HSE programs as described above, our commitment to building a diverse and inclusive workforce, engagement with and support for the communities where we live and work, and advancement of socially responsible business practices through partnerships and other industry frameworks.
We believe that our products and services contribute to improving the sustainability of the environment. We conduct operations through two reporting segments: (1) Ecoservices and (2) Advanced Materials & Catalysts (including our 50% interest in the Zeolyst Joint Venture). 8 The table below summarizes certain information regarding our two reporting segments for the year ended December 31, 2023.
We conduct operations through two reporting segments: (1) Ecoservices and (2) Advanced Materials & Catalysts (including our 50% interest in the Zeolyst Joint Venture). 8 Table of Con ten ts The table below summarizes certain information regarding our two reporting segments for the year ended December 31, 2024.
In addition, our Vice President Environmental and Sustainability oversees a team of environmental personnel that serve our operating sites. As an ACC Responsible Care® member company, we continue to monitor and report our HSE metrics annually. Our sustainability metrics, including waste generation and water consumption for 2018 through 2022, were third party assured through verification of the data.
In addition, our Vice President Environmental and Sustainability oversees a team of environmental personnel that serve our operating sites. As an ACC Responsible Care® member company, we continue to monitor and report our HSE metrics annually.
The principles set forth in the Executive Statement are codified in our Code of Conduct, which sets forth the legal and ethical standards to which our employees must adhere, including (a) acting with integrity, (b) avoiding actual or apparent conflicts of interest, (c) complying with the rules and regulations of federal, state, provincial, local governments, and other appropriate regulatory agencies, (d) complying with all rules and regulations prohibiting fraud, bribery, corrupt practices, anti-competitive activities and trading with embargoed persons and countries, (e) complying with all company policies and procedures, and (f) actively promoting ethical behavior in the workplace.
The principles set forth in the Executive Statement are codified in our Code of Conduct, which sets forth the legal and ethical standards to which our employees must adhere, including (a) acting with integrity, (b) avoiding actual or apparent conflicts of interest, (c) complying with the laws and regulations of federal, state, provincial, local governments, and other appropriate regulatory agencies, (d) complying with all laws and regulations prohibiting fraud, bribery, corrupt practices, anti-competitive activities and trading with embargoed persons and countries, (e) complying with all company policies and procedures, and (f) actively promoting ethical behavior in the workplace. 18 Table of Con ten ts Our governance programs and policies can be found on the Company’s sustainability webpages, which are routinely updated and includes a description of our enterprise risk management program and our policies on child labor, human trafficking, anti-harassment, antibribery, and cybersecurity all of which are evaluated by third-parties, including EcoVadis.
Our global succession planning process is designed to provide sufficient talented personnel to fill key leadership, innovation and manufacturing roles well into the future and to better prepare employees for their future at the Company.
Our global performance management and succession planning processes are designed to provide sufficient talented personnel to fill key leadership, innovation and manufacturing roles well into the future and to better prepare employees for their future at the Company. We review our compensation and benefits programs periodically to ensure continued competitiveness.
Year ended December 31, 2023 Segments and Product Groups Sales Zeolyst Joint Venture Sales (1) Net Income Adjusted EBITDA (1) % of Total Adjusted EBITDA (1)(2) (in millions, except percentages) Ecoservices $ 584.8 $ — $ 200.0 70.9 % Advanced Materials & Catalysts 106.3 — 81.9 29.1 % Zeolite Catalyst — 156.5 Subtotal $ 691.1 $ 156.5 Corporate (22.0) Total $ 691.1 $ 156.5 $ 71.2 $ 259.9 100.0 % (1) Represents 50% of the Zeolyst Joint Venture (the “Zeolyst Joint Venture” or “Zeolyst JV”) sales for the year ended December 31, 2023.
Year ended December 31, 2024 Segments and Product Groups Sales Zeolyst Joint Venture Sales (1) Net Loss Adjusted EBITDA (1) % of Total Adjusted EBITDA (1)(2) (in millions, except percentages) Ecoservices $ 598.3 $ — $ 200.3 75.6 % Advanced Materials & Catalysts 106.2 — 64.7 24.4 % Zeolite Catalyst — 116.5 Subtotal $ 704.5 $ 116.5 Corporate (26.8) Total $ 704.5 $ 116.5 $ (6.7) $ 238.2 100.0 % (1) Represents 50% of the Zeolyst Joint Venture (the “Zeolyst Joint Venture” or “Zeolyst JV”) sales for the year ended December 31, 2024.
Additionally, product can be shipped to our customers by barge, rail and truck. 9 Primary Product Groups Regeneration Services serves a critical need for refining customers. Sulfuric acid serves as a catalyst in the alkylation process. The resulting spent sulfuric acid needs to be regenerated or recycled, which is no longer a core competency of most refiners.
Additionally, product can be shipped to our customers by barge, rail and truck. 9 Table of Con ten ts Primary Product Groups Regeneration services serves a critical need for refining customers. Sulfuric acid serves as a catalyst in the alkylation production process.
In our Ecoservices segment, we provide sulfuric acid regeneration services that avoid significant landfill or deep well disposal of spent, or used, sulfuric acid. In our Advanced Materials & Catalysts segment, our zeolite catalysts are used for cleaner air applications and our advanced silicas are key for light weighting and plastics recycling.
In our Advanced Materials & Catalysts segment, our zeolite catalysts are used for cleaner air applications and our advanced silicas are key for light weighting and plastics recycling.
On December 14, 2020, we completed the sale of our Performance Materials business to Potters Buyer, LLC, an affiliate of The Jordan Company, L.P. Effective on August 1, 2021, we completed the sale of our Performance Chemicals business to Sparta Aggregator L.P., a partnership with Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P.
Unless the context otherwise indicates, the terms “Ecovyst Inc.,” “we,” “us,” “our,” or the “Company” mean Ecovyst Inc. and our subsidiaries. Effective on August 1, 2021, we completed the sale of our Performance Chemicals business to Sparta Aggregator L.P., a partnership with Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P.
See “Risk Factors—Risks Related to Our Business — If we are unable to pass on increases in raw material prices, including natural gas, to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected”.
See “Risk Factors—Risks Related to Our Business — If we are unable to pass on increases in raw material prices, including natural gas, to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected”. 13 Table of Con ten ts Zeolyst Joint Venture The Zeolyst Joint Venture is a long-standing partnership with Shell, that dates back to 1988 and is focused on the development, manufacture and sale of zeolite-containing catalysts through manufacturing facilities located in Kansas, USA and the Netherlands.
Environmental Remediation Environmental laws and regulations require mitigation or remediation of the effects of the disposal or release of chemical substances.
Evolving chemical regulation programs throughout the world could impose testing requirements or restrictions on our chemical raw materials and products. Environmental Remediation Environmental laws and regulations require mitigation or remediation of the effects of the disposal or release of chemical substances.
Unless the context otherwise indicates, the terms “Ecovyst Inc.,” “we,” “us,” “our,” or the “Company” mean Ecovyst Inc. and our subsidiaries. 2 Our Company We are a leading integrated and innovative global provider of advanced materials, specialty catalysts and services. We believe that our products and services contribute to improving the sustainability of the environment.
Refer to Note 4 to our consolidated financial statements for additional information. 2 Table of Con ten ts Our Company We are a leading integrated and innovative global provider of advanced materials, specialty catalysts and services. We believe that our products and services contribute to improving the sustainability of the environment.
However, we cannot provide assurance that we will be in full compliance at all times with all applicable environmental laws and regulations. We expect that stringent environmental regulations will continue to be imposed on us and our industry in general. Evolving chemical regulation programs throughout the world could impose testing requirements or restrictions on our chemical raw materials and products.
We have implemented a corporate audit program for all of our facilities. However, we may not be in full compliance at all times with all applicable environmental laws and regulations. We expect that stringent environmental regulations will continue to be imposed on us and our industry in general.
In addition, our customer base is diversified, with our top ten customers in 2023 representing approximately 60% of our sales for the year ended December 31, 2023, and one customer representing 13% or $91.5 million of our sales in both our Ecoservices and Advanced Materials & Catalysts businesses during this period.
In addition, our customer base is diversified, with our top ten customers in 2024 representing approximately 60% of our sales for the year ended December 31, 2024, of which two customers had more than 10% of our total sales.
The sections that follow provide some highlights of our environmental, social, and governance programs and procedures. Environmental Stewardship Our products and technologies continue to address our customers’ sustainability challenges, tightening global regulatory standards and changing consumer preferences.
Environmental Stewardship Our products and technologies continue to address our customers’ sustainability challenges, tightening global regulatory standards and changing consumer preferences. In our Ecoservices segment, we provide regeneration services that avoid significant landfill or deep well disposal of spent, or used, sulfuric acid.
The results of operations, financial condition, and cash flows for the Performance Materials and Performance Chemicals businesses are presented herein as discontinued operations for the 2022 and 2021 periods presented. Refer to Note 4 to our consolidated financial statements for additional information. Our common stock is listed on the New York Stock Exchange under the stock ticker “ECVT”.
The results of operations, financial condition and cash flows for the Performance Chemicals business are presented herein as discontinued operations for the 2022 periods presented.
Removed
On May 4, 2016, we consummated a series of transactions (the “Business Combination”) to reorganize and combine the then-existing businesses with Eco Services Operations LLC under a new holdings company, then called PQ Group Holdings. On October 3, 2017, we completed our initial public offering (“IPO”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.
Biggest changeWe are exposed to the impact of any global or domestic economic disruption that may occur. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price.
Work under the Consent Decree has proceeded since 2007, and all of the significant capital improvements related to the Consent Decree have been completed. Three of our operating locations have been released from the scope of the Consent Decree and we are seeking release of the other locations covered by the Consent Decree.
Work under the Consent Decree has proceeded since 2007, and all of the significant capital improvements related to the Consent Decree have been completed. Three of our operating locations have been released from the scope of the Consent Decree and we are seeking release of three other locations covered by the Consent Decree.
Our substantial indebtedness, combined with our other financial obligations and contractual commitments, could have important consequences, including: • requiring us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, selling and marketing efforts, product development and other purposes; • increasing our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to our competitors that have relatively less indebtedness; • limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • increasing our exposure to rising interest rates because certain of our borrowings are at variable interest rates; 34 • restricting us from making investments, strategic acquisitions or causing us to make non-strategic divestitures; and • limiting our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, product development and other corporate purposes.
Our substantial indebtedness, combined with our other financial obligations and contractual commitments, could have important consequences, including: • requiring us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, selling and marketing efforts, product development and other purposes; • increasing our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to our competitors that have relatively less indebtedness; • limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • increasing our exposure to rising interest rates because certain of our borrowings are at variable interest rates; • restricting us from making investments, strategic acquisitions or causing us to make non-strategic divestitures; and • limiting our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, product development and other corporate purposes.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting in future periods, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected, and we could 38 become subject to investigations by the New York Stock Exchange, on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting in future periods, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected, and we could become subject to investigations by the New York Stock Exchange, on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
These potentially disruptive risks include, but are not limited to, the following: • pipeline and storage tank leaks and ruptures; • explosions and fires; • inclement weather and natural disasters; • terrorist attacks; • failure of mechanical, process safety and pollution control equipment; 28 • chemical spills and other discharges or releases of toxic or hazardous substances or gases; • epidemics and pandemics and effects therefrom; and • exposure to toxic chemicals.
These potentially disruptive risks include, but are not limited to, the following: • pipeline and storage tank leaks and ruptures; • explosions and fires; • inclement weather and natural disasters; • terrorist attacks; • failure of mechanical, process safety and pollution control equipment; • chemical spills and other discharges or releases of toxic or hazardous substances or gases; • epidemics and pandemics and effects therefrom; and • exposure to toxic chemicals.
If we lose the service of any of our key personnel, we may not be able to hire replacements with the same level of industry experience and knowledge necessary 37 to execute our business strategy, which in turn could have a material adverse effect on our business, financial condition, results of operations or cash flows.
If we lose the service of any of our key personnel, we may not be able to hire replacements with the same level of industry experience and knowledge necessary to execute our business strategy, which in turn could have a material adverse effect on our business, financial condition, results of operations or cash flows.
We believe the economics of these transactions have been clearly 33 reported, and the appropriate local transfer pricing documentation is contemporaneously available, although tax authorities may propose and potentially sustain adjustments that could result in changes to our mix of earnings in countries with differing statutory tax rates.
We believe the economics of these transactions have been clearly reported, and the appropriate local transfer pricing documentation is contemporaneously available, although tax authorities may propose and potentially sustain adjustments that could result in changes to our mix of earnings in countries with differing statutory tax rates.
See “Business-Intellectual Property.” 31 Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products. Our industry is characterized by vigilant pursuit of intellectual property rights, particularly with respect to our advanced silicas and zeolite catalysts product groups.
See “Business-Intellectual Property.” Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products. Our industry is characterized by vigilant pursuit of intellectual property rights, particularly with respect to our advanced silicas and zeolite catalysts product groups.
Consequently, the occurrence of one or more of 21 the foregoing factors could have a material adverse effect on our international operations or upon our financial condition, results of operations and cash flows. Our operations and financial results have been and may continue to be adversely affected by general economic conditions.
Consequently, the occurrence of one or more of the foregoing factors could have a material adverse effect on our international operations or upon our financial condition, results of operations and cash flows. Our operations and financial results have been and may continue to be adversely affected by general economic conditions.
Failure to protect our existing intellectual property rights may allow our competitors to copy our products and may result in the loss of valuable proprietary technologies or other intellectual property. Failure to protect our innovations and trademarks by securing intellectual property rights could also result in our having to pay other 30 companies for infringing on their intellectual property rights.
Failure to protect our existing intellectual property rights may allow our competitors to copy our products and may result in the loss of valuable proprietary technologies or other intellectual property. Failure to protect our innovations and trademarks by securing intellectual property rights could also result in our having to pay other companies for infringing on their intellectual property rights.
The United States has in recent years renegotiated a number of trade agreements, such as the United States-Mexico-Canada Agreement (“USMCA”), imposed tariffs on goods imported from China and certain other countries, and increasingly levied sanctions and export controls on China and other countries.
The United States has in recent years renegotiated a number of trade agreements, such as the United States-Mexico-Canada Agreement (“USMCA”), imposed tariffs on goods imported from China and certain other countries, and increasingly levied sanctions and export controls on China, Russia and other countries.
Although we have introduced many security measures, including firewalls and information 32 technology security policies and training, these measures may not offer the appropriate level of security. We routinely experience attempts by external parties to penetrate and attack our networks and systems.
Although we have introduced many security measures, including firewalls and information technology security policies and training, these measures may not offer the appropriate level of security. We routinely experience attempts by external parties to penetrate and attack our networks and systems.
Such laws and regulations apply to companies, individual directors, officers, employees and agents. 22 In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act.
Such laws and regulations apply to companies, individual directors, officers, employees and agents. In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act.
A product liability claim or voluntary or government-ordered product recall could result in substantial and unexpected expenditures, affect customer confidence in our products and divert management’s attention from other 25 responsibilities.
A product liability claim or voluntary or government-ordered product recall could result in substantial and unexpected expenditures, affect customer confidence in our products and divert management’s attention from other responsibilities.
The indentures governing our outstanding indebtedness contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to incur additional indebtedness, make investments, acquisitions, loans and advances, sell, transfer or otherwise dispose of our assets or incur liens.
The agreements governing our outstanding indebtedness contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to incur additional indebtedness, make investments, acquisitions, loans and advances, sell, transfer or otherwise dispose of our assets or incur liens.
Sulfuric acid regeneration customer contracts are typically on five- to ten-year terms and virgin sulfuric acid customer contracts are typically on one- to five-year terms, with larger customers typically favoring longer terms.
Regeneration services customer contracts are typically on five- to ten-year terms and virgin sulfuric acid customer contracts are typically on one- to five-year terms, with larger customers typically favoring longer terms.
For example, during the past several years the global economy has experienced extreme volatility and disruptions, including significant volatility in commodity and market prices, including increasing energy prices, volatility in sulfur prices, declines in consumer confidence, declines in economic growth, supply chain interruptions, uncertainty about economic stability, record inflation globally, rising interest rates and the threat of recession.
For example, during the past several years the global economy has experienced extreme volatility and disruptions, including significant volatility in commodity and market prices, including large fluctuations in energy prices, volatility in sulfur prices, declines in consumer confidence, declines in economic growth, supply chain interruptions, uncertainty about economic stability, record inflation globally, rising interest rates and the threat of recession.
These provisions include a classified board of directors and the ability of our board of directors to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror.
These provisions include a classified board of directors and the ability of our board of directors to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquirer.
These and other economic factors could adversely impact our business and results of operations. Exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows. As a result of our international operations, for the year ended December 31, 2023, we generated 6% of our sales and associated expenses in currencies other than U.S. dollars.
These and other economic factors could adversely impact our business and results of operations. Exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows. As a result of our international operations, for the year ended December 31, 2024, we generated 5% of our sales and associated expenses in currencies other than U.S. dollars.
If our effective tax rates were to increase as a result of a tax examination, or if the ultimate determination of the taxes owed by us is for an amount in excess of amounts previously accrued, our operating results, cash flows and financial condition could be adversely affected. We have underfunded pension plan liabilities.
If our effective tax rates were to increase as a result of a tax examination, or if the ultimate determination of the taxes owed by us is for an amount in excess of amounts previously accrued, our operating results, cash flows and financial condition could be adversely affected. 34 Table of Con ten ts We have underfunded pension plan liabilities.
Corporate Sustainability Reporting Directive (“CSRD”), the California Climate Corporate Data Accountability Act (SB 253) and GHG Climate-related Financial Risk Act (SB 261), and proposed United States SEC rules addressing Scope 1, 2, and 3 emissions.
Corporate Sustainability Reporting Directive (“CSRD”), the California Climate Corporate Data Accountability Act (SB 253) and GHG Climate-related Financial Risk Act (SB 261), and the stayed United States SEC rules addressing Scope 1 and 2 emissions.
In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain. We could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications.
In the future, we may not be able to obtain coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain. 29 Table of Con ten ts We could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications.
As of December 31, 2023, 137 of our U.S. unionized employees were covered under collective bargaining agreements that will expire on or before December 30, 2024. Failure to reach agreement with any of our unionized work groups regarding the terms of their collective bargaining agreements or annual pay increases may result in a labor strike, work stoppage or slowdown.
As of December 31, 2024, none of our U.S. unionized employees were covered under collective bargaining agreements that will expire on or before December 31, 2025. Failure to reach agreement with any of our unionized work groups regarding the terms of their collective bargaining agreements or annual pay increases may result in a labor strike, work stoppage or slowdown.
If we fail to recover our investment, or these projects never become profitable, our ability to implement our business strategy may be materially and adversely affected. We may be liable for damages based on product liability claims brought against us or our customers for costs associated with recalls of our or our customers’ products.
If we fail to recover our investment, or these projects never become profitable, our ability to implement our business strategy may be materially and adversely affected. 25 Table of Con ten ts We may be liable for damages based on product liability claims brought against us or our customers for costs associated with recalls of our or our customers’ products.
Current employees are not eligible for any post-retirement health care or life insurance benefits. Costs of these other post-employment benefit plans are dependent upon numerous factors, assumptions and estimates. Risks Related to our Indebtedness Our substantial level of indebtedness could adversely affect our financial condition. We have substantial indebtedness, which as of December 31, 2023, totaled approximately $877.5 million.
Current employees are not eligible for any post-retirement health care or life insurance benefits. Costs of these other post-employment benefit plans are dependent upon numerous factors, assumptions and estimates. Risks Related to our Indebtedness Our substantial level of indebtedness could adversely affect our financial condition. We have substantial indebtedness, which as of December 31, 2024, totaled approximately $870.8 million.
Although we paid special cash dividends in December 2020 and August 2021, our board of directors may decide to retain future earnings, if any, for future operations, expansion and debt repayment and may not pay any special or regular dividends for the foreseeable future.
We have not paid special cash dividends since December 2020 and August 2021, and our board of directors may decide to retain future earnings, if any, for future operations, expansion and debt repayment and may not pay any special or regular dividends for the foreseeable future.
Excluding contracts with automatic evergreen provisions, approximately 20% of our sulfuric acid volume for the year ended December 31, 2023 was under contracts expiring at the end of 2024 or beyond. In addition, our sulfuric acid regeneration contracts with major refinery customers typically allow for termination with advance notice of one to two years.
Excluding contracts with automatic evergreen provisions, approximately 40% of our sulfuric acid volume for the year ended December 31, 2024 was under contracts expiring at the end of 2025 or beyond. In addition, our regeneration services contracts with major refinery customers typically allow for termination with advance notice of one to two years.
Moreover, even if valid and enforceable, competitors may be able to design around our patents or use pre-existing technologies to compete with us. We also rely upon unpatented proprietary know-how, continuing technological innovation and other trade secrets to develop and maintain our competitive position, which may not provide us with complete protection against competitors.
Moreover, even if valid and enforceable, competitors may be able to design around our patents or use pre-existing technologies to compete with us. 31 Table of Con ten ts We also rely upon unpatented proprietary know-how, continuing technological innovation and other trade secrets to develop and maintain our competitive position, which may not provide us with complete protection against competitors.
Should there be infringement claims against our licensees, we could be required to indemnify them for losses resulting from such claims or to refund amounts they have paid to us. Disruption, failure or cybersecurity breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations.
Should there be infringement claims against our licensees, we could be required to indemnify them for losses resulting from such claims or to refund amounts they have paid to us. 32 Table of Con ten ts Disruption, failure or cybersecurity breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations.
Moreover, new products may have lower margins than the products they replace or may not successfully attract end users. We also expect competition to increase as our competitors develop and introduce new and enhanced products. As such products are introduced, our products may become obsolete or our competitors’ products may be marketed more effectively.
Moreover, new products may have lower margins than the products they replace or may not successfully attract end users. 23 Table of Con ten ts We also expect competition to increase as our competitors develop and introduce new and enhanced products. As such products are introduced, our products may become obsolete or our competitors’ products may be marketed more effectively.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere herein and others such as: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us, our competitors or our industry; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions or departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments affecting us or our industry; • changes in legislation, regulation and government policy as a result of the U.S. presidential and congressional elections; • speculation in the press or investment community; • changes in accounting principles; 35 • sales of substantial amounts of our stock by current stockholders (including stock by insiders or 5% stockholders); • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters and other calamities; and • changes in general market and economic conditions.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere herein and others such as: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us, our competitors or our industry; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions or departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments affecting us or our industry; • changes in legislation, regulation and government policy as a result of the U.S. presidential and congressional elections; • speculation in the press or investment community; • changes in accounting principles; • sales of substantial amounts of our stock by current stockholders (including stock by insiders or 5% stockholders); • terrorist acts, acts of war or periods of widespread civil unrest; • natural disasters and other calamities; and • changes in general market and economic conditions. 36 Table of Con ten ts In addition, broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance, and factors beyond our control may cause our stock price to decline rapidly and unexpectedly.
Given the volatility of exchange rates, there can be no assurance that we will be able to effectively manage our currency transaction risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations.
Given the volatility of exchange rates, we may not be able to effectively manage our currency transaction risks or that any volatility in currency exchange rates will not have a material adverse effect on our financial condition or results of operations.
An impairment charge would be determined based on the estimated fair value of the assets and any such impairment charge could have a material adverse effect on our results of operations and financial position. We performed our annual impairment test on goodwill on October 1, 2023, and determined there was no goodwill impairment.
An impairment charge would be determined based on the estimated fair value of the assets and any such impairment charge could have a material adverse effect on our results of operations and financial position. We performed our annual impairment test on goodwill on October 1, 2024, and determined there was no goodwill impairment at the reporting unit level.
We depend on good relations with our workforce, and any significant disruptions could adversely affect our operations. As of December 31, 2023, we had 911 employees worldwide, approximately 44% of which were represented by a union, works council or other employee representative body.
We depend on good relations with our workforce, and any significant disruptions could adversely affect our operations. As of December 31, 2024, we had 920 employees worldwide, approximately 45% of which were represented by a union, works council or other employee representative body.
These and other financial problems our customers may experience, as well as potential financial weakness in the industries in which we operate or general economic conditions, may increase our risk in extending trade credit to customers.
Our customers may experience financial difficulties, including bankruptcies, restructurings and liquidations. These and other financial problems our customers may experience, as well as potential financial weakness in the industries in which we operate or general economic conditions, may increase our risk in extending trade credit to customers.
Our operations are affected directly and indirectly by global regulatory, economic, political and social conditions, including: • new and different legal and regulatory requirements in local jurisdictions; • export duties or import quotas; • domestic and foreign customs and tariffs or other trade barriers, including the threat of escalating trade disputes that may result in higher tariffs and the imposition of trade sanctions against certain countries, persons and entities; • potential difficulties in staffing and labor disputes; • potential difficulties in managing and obtaining support and distribution for local operations; • increased costs of, and availability of, raw materials, energy, transportation or shipping; • credit risk and financial condition of local customers and distributors; • potential difficulties in protecting intellectual property rights; • risk of nationalization of private enterprises by foreign governments; • potential imposition of restrictions on investments; • the imposition of withholding taxes or other taxes or royalties on our income, or the adoption of other restrictions on foreign trade or investment, including currency exchange controls; • capital controls; • potential difficulties in obtaining and enforcing legal judgments in jurisdictions outside the United States; • potential difficulties in obtaining and enforcing relief in the United States against parties located outside the United States; • potential difficulties in enforcing agreements and collecting receivables; • risks relating to environmental, health and safety matters; • regional conflicts, such as the invasion of Ukraine by Russia and the conflict involving Israel and Hamas and potentially other countries in the Middle East; • risks relating to information security and cyber security events; • risks relating to epidemics and pandemics and effects therefrom; and • local political, economic and social conditions, including the possibility of hyperinflationary conditions and political instability in certain countries.
Our operations are affected directly and indirectly by global regulatory, economic, political and social conditions, including: • new and different legal and regulatory requirements in local jurisdictions; • export duties or import quotas; • domestic and foreign customs and tariffs or other trade barriers, including the threat of escalating trade disputes that may result in higher tariffs and the imposition of trade sanctions against certain countries, persons and entities; • potential difficulties in staffing and labor disputes; • potential difficulties in managing and obtaining support and distribution for local operations; • increased costs of, and availability of, raw materials, energy, transportation or shipping; • credit risk and financial condition of local customers and distributors; • potential difficulties in protecting intellectual property rights; • risk of nationalization of private enterprises by foreign governments; • potential imposition of restrictions on investments; • the imposition of withholding taxes or other taxes or royalties on our income, or the adoption of other restrictions on foreign trade or investment, including currency exchange controls; • capital controls; • potential difficulties in obtaining and enforcing legal judgments in jurisdictions outside the United States; • potential difficulties in obtaining and enforcing relief in the United States against parties located outside the United States; • potential difficulties in enforcing agreements and collecting receivables; • risks relating to environmental, health and safety matters; • regional conflicts, such as the invasion of Ukraine by Russia and the conflict involving Israel and Hamas and potentially other countries in the Middle East; • risks relating to information security and cyber security events; • risks relating to epidemics and pandemics and effects therefrom; and • local political, economic and social conditions, including the possibility of hyperinflationary conditions and political instability in certain countries. 21 Table of Con ten ts We may not be successful in developing and implementing policies and strategies to address the foregoing factors in a timely and effective manner at each location where we do business.
The Company will continue to monitor the BEPS project and the applicability of new tax legislation to the Company. Our tax returns and other tax matters are subject to examination by local tax authorities and governmental bodies.
The Company will continue to monitor the BEPS project and the applicability of new tax legislation to the Company and will update accordingly when the Company becomes subject to the minimum tax. Our tax returns and other tax matters are subject to examination by local tax authorities and governmental bodies.
A significant adverse change in a customer’s financial position could cause us to limit or discontinue business with such customer, require us to assume more credit risk relating to such customer’s receivables or limit our ability to collect accounts receivable from such customer, any of which could have a material adverse effect on our business, results of operations, financial condition and liquidity. 24 We rely on a limited number of customers for a meaningful portion of our business.
A significant adverse change in a customer’s financial position could cause us to limit or discontinue business with such customer, require us to assume more credit risk relating to such customer’s receivables or limit our ability to collect accounts receivable from such customer, any of which could have a material adverse effect on our business, results of operations, financial condition and liquidity.
As of December 31, 2023, we owned 21 patented inventions in the United States, with 175 patents issued in countries around the world and 61 patent applications pending worldwide covering such inventions. Some of these patents are licensed to others. In addition, we have acquired certain rights under patents and inventions of others through licenses.
As of December 31, 2024, we owned 22 patented inventions in the United States, with 169 patents issued in countries around the world and 63 patent applications pending worldwide covering such inventions. Some of these patents are licensed to others. In addition, we have acquired certain rights under patents and inventions of others through licenses.
As of December 31, 2023, we operated ten manufacturing facilities. For the year ended December 31, 2023, our foreign subsidiaries accounted for 6% of our sales.
As of December 31, 2024, we operated ten manufacturing facilities. For the year ended December 31, 2024, our foreign subsidiaries accounted for 5% of our sales.
For the year ended December 31, 2023, our top ten customers represented approximately 60% of our sales and one single customer represented 13% or $91.5 million of our sales in both Ecoservices and Advanced Materials & Catalysts.
For the year ended December 31, 2024, our top ten customers represented approximately 60% of our sales and one single customer represented 14% or $96 million of our sales in both Ecoservices and Advanced Materials & Catalysts.
For example, the Zeolyst Joint Venture is structured as a general partnership in which we are equal partners with Shell Catalysts & Technologies, an affiliate of Royal Dutch Shell plc. or “Shell”. Accordingly, we do not control the Zeolyst Joint Venture and cannot unilaterally undertake strategies, plans, goals and operations or determine when cash distributions will be made to us.
For example, the Zeolyst Joint Venture is structured as a general partnership in which we are an equal partner with Shell. Accordingly, we do not control the Zeolyst Joint Venture and generally cannot unilaterally undertake strategies, plans, goals and operations or determine when cash distributions will be made to us.
In the European Union, our emissions are regulated under the E.U. Emissions Trading System (the “E.U. ETS”), an E.U.-wide trading scheme for industrial GHG emissions. The E.U. ETS is anticipated to become progressively more stringent over time, including by reducing the number of allowances to emit GHGs that E.U. member states will allocate without charge to industrial facilities.
ETS”), an E.U.-wide trading scheme for industrial GHG emissions. The E.U. ETS is anticipated to become progressively more stringent over time, including by reducing the number of allowances to emit GHG that E.U. member states will allocate without charge to industrial facilities.
In addition, our certificate of incorporation provides that if any action the subject matter of which is a Covered Proceeding is filed in a court other than the specified Delaware courts without the approval of our board of directors (each, a “Foreign Action”), the claiming party will be deemed to have consented to (i) the personal jurisdiction of the 36 specified Delaware courts in connection with any action brought in any such courts to enforce the exclusive forum provision described above and (ii) having service of process made upon such claiming party in any such enforcement action by service upon such claiming party’s counsel in the Foreign Action as agent for such claiming party.
In addition, our certificate of incorporation provides that if any action the subject matter of which is a Covered Proceeding is filed in a court other than the specified Delaware courts without the approval of our board of directors (each, a “Foreign Action”), the claiming party will be deemed to have consented to (i) the personal jurisdiction of the specified Delaware courts in connection with any action brought in any such courts to enforce the exclusive forum provision described above and (ii) having service of process made upon such claiming party in any such enforcement action by service upon such claiming party’s counsel in the Foreign Action as agent for such claiming party. 37 Table of Con ten ts Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to these provisions.
For example, the Model Rules under BEPS’s Pillar Two include a common approach for a global minimum tax. The Company has assessed the minimum tax and does not expect it to be within the scope of the Model Rules beginning January 1, 2024.
For example, the Model Rules under BEPS’s Pillar Two include a common approach for a global minimum tax. The Company has assessed that the minimum tax was not within the scope of the Model Rules beginning January 1, 2024.
Our Advanced Materials & Catalysts segment primarily competes with other global producers in the petrochemicals and refining industries such as Grace, BASF, UOP, and Albemarle, as well as other niche competitors such as Tosoh, Axens, and Haldor Topsoe. In our Ecoservices segment, we compete in the North American refining services industry with competitors such as Chemtrade and Veolia.
Our Advanced Materials & Catalysts segment primarily competes with other global producers in the petrochemicals and refining industries such as Grace, BASF, UOP, and Albemarle, as well as other niche competitors such as Tosoh, Axens, and Haldor Topsoe.
Although the terms of the agreements governing our outstanding indebtedness contain restrictions on the incurrence of additional indebtedness, such restrictions are subject to a number of important exceptions and indebtedness incurred in compliance with such restrictions could be substantial. If we and our restricted subsidiaries incur significant additional indebtedness, the related risks that we face could increase.
Although the terms of the agreements governing our outstanding indebtedness contain restrictions on the incurrence of additional indebtedness, such restrictions are subject to a number of important exceptions and indebtedness incurred in compliance with such restrictions could be substantial.
As there may be only a limited number of suppliers offering “conflict free” conflict minerals, we cannot be sure that we will be able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive prices. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
As there may be only a limited number of suppliers offering “conflict free” conflict minerals, we may not be able to obtain necessary conflict minerals from such suppliers in sufficient quantities or at competitive prices.
Any alternative arrangement to replace the loss of a customer could result in increased variable costs relating to product shipment. In addition, any new customer agreement we enter into may not have terms as favorable as those contained in our current customer agreements, which could have a material adverse effect on our business, financial condition and results of operations.
In addition, any new customer agreement we enter into may not have terms as favorable as those contained in our current customer agreements, which could have a material adverse effect on our business, financial condition and results of operations.
Assets available to fund the pension obligations of our plans as of December 31, 2023 were approximately $61.6 million, or approximately $4.9 million less than the measured pension benefit obligation on a GAAP basis.
Assets available to fund the pension obligations of our plans as of December 31, 2024 were approximately $59.7 million, or approximately $2.0 million less than the measured pension benefit obligation on a GAAP basis.
Some of our competitors’ financial, technological and other resources may be greater than ours or they may have less debt than we do and, as a result, may be better able to withstand changes to industry conditions. The occurrence of any of these events could materially adversely affect our financial condition and results of operations.
Some of our competitors’ financial, technological and other resources may be greater than ours or they may have less debt than we do and, as a result, may be better able to withstand changes to industry conditions.
If we fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures, we may not be able to accurately report our financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in our company.
If we fail to properly remediate this or any future material weakness or deficiencies and fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures in the future, our ability to produce accurate and timely financial statements may be impaired and we may not be able to accurately report our financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in our company.
We are required to test goodwill and any other intangible asset with an indefinite life for possible impairment on the same date each year and on an interim basis if there are indicators of a possible impairment. We are also required to evaluate indefinite-lived intangible assets and fixed assets for impairment if there are indicators of a possible impairment.
We may need to recognize impairment charges related to goodwill, identified intangible assets, fixed assets and investments in affiliated companies. We are required to test goodwill and any other intangible asset with an indefinite life for possible impairment on the same date each year and on an interim basis if there are indicators of a possible impairment.
For example, many of our employees in Europe are represented by works councils that must approve any changes in conditions of employment, including salaries, benefits and staff changes, and may impede efforts to restructure our workforce.
Such employment rights require us to work collaboratively with the legal representatives of the employees to effect any changes to labor arrangements. For example, many of our employees in Europe are represented by works councils that must approve any changes in conditions of employment, including salaries, benefits and staff changes, and may impede efforts to restructure our workforce.
Since launching our IPO in September 2017, the price of our common stock, as reported on the New York Stock Exchange, has ranged from a low of $8.20 on November 15, 2022 to a high of $18.90 on March 9, 2021. In addition, the stock market in general has been highly volatile.
Since launching our initial public offering (“IPO”) in September 2017, the price of our common stock, as reported on the New York Stock Exchange, has ranged from a low of $6.02 on August 5, 2024 to a high of $18.90 on March 9, 2021. In addition, the stock market in general has been highly volatile.
A successful claim or series of claims against us could cause reputational harm and have a material adverse effect on our financial condition and results of operations and could result in a loss of one or more customers. 29 We may engage in strategic acquisitions or dispositions of certain assets or businesses that could affect our business, results of operations, financial condition and liquidity.
A successful claim or series of claims against us could cause reputational harm and have a material adverse effect on our financial condition and results of operations and could result in a loss of one or more customers.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk.” Additionally, because our consolidated financial results are reported in U.S dollars, the translation of sales or earnings generated in other currencies into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings in our financial statements, which also affects the comparability of our results of operations and cash flows between financial periods.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk.” Additionally, because our consolidated financial results are reported in U.S dollars, the translation of sales or earnings generated in other currencies into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings in our financial statements, which also affects the comparability of our results of operations and cash flows between financial periods. 22 Table of Con ten ts Our international operations require us to comply with anti-corruption laws, economic sanctions, export controls and similar laws and regulations of the U.S. government and various international jurisdictions in which we do business.
In the future, these developments are anticipated to increase the cost associated with complying with existing, pending, and future sustainability-related legislation, regulations and directives and such increased costs and/or our failure to comply with any such legislation, regulations and directives could adversely affect our financial condition, results of operations and cash flows.
In the future, these developments are anticipated to increase the cost associated with complying with existing, pending, and future sustainability-related legislation, regulations and directives and such increased costs and/or our failure to comply with any such legislation, regulations and directives could adversely affect our financial condition, results of operations and cash flows. 28 Table of Con ten ts Production and distribution of our products could be disrupted for a variety of reasons, and such disruptions could expose us to significant losses or liabilities.
These changes, as well as any other changes in social, political, regulatory and economic conditions, or further changes to foreign or domestic laws and policies governing foreign trade (including export, import and sanctions), manufacturing and development and foreign direct investment in the territories and countries where we or our customers operate could adversely affect our operating results and our business.
These changes, as well as any other changes in social, political, regulatory and economic conditions, or further changes to foreign or domestic laws and policies governing foreign trade (including export, import and sanctions), manufacturing and development and foreign direct investment in the territories and countries where we or our customers operate could adversely affect our operating results and our business. 38 Table of Con ten ts If we lose certain key personnel or are unable to hire additional qualified personnel, we may not be able to execute our business strategy and our business could be adversely affected.
General Risk Factors Significant trade developments stemming from the U.S. administration, U.S. courts’ or the United Kingdom’s exit from the European Union could have an adverse effect on us.
General Risk Factors Significant trade developments stemming from the U.S. administration and other countries could have an adverse effect on us.
Certain of our operations result in emissions of greenhouse gases (“GHGs”), such as carbon dioxide. Growing concern about the sources and impacts of global climate change has led to a number of domestic and foreign legislative and administrative measures, both proposed and enacted, to monitor, regulate and limit carbon dioxide and other GHG emissions.
Growing concern about the sources and impacts of global climate change has led to a number of domestic and foreign legislative and administrative measures, both proposed and enacted, to monitor, regulate and limit carbon dioxide and other GHG emissions. In the European Union, our emissions are regulated under the E.U. Emissions Trading System (the “E.U.
A loss of one or more of these customers could adversely impact our profitability. A loss of any significant customer, including a pipeline customer in our Ecoservices segment, or a decrease in the provision of products to any significant customer could have an adverse effect on our business until alternative arrangements are secured.
A loss of any significant customer, including a pipeline customer in our Ecoservices segment, or a decrease in the provision of products to any significant customer, could have an adverse effect on our business until alternative arrangements are secured. Any alternative arrangement to replace the loss of a customer could result in increased variable costs relating to product shipment.
Such risks are heightened in our Ecoservices segment, which has operations and customers primarily located in the Gulf Coast, which is susceptible to a heightened risk of hurricanes, and in California, which is susceptible to a heightened risk of earthquakes. For example, in December 2022, the operations of our Ecoservices’ Houston and Hammond facilities were disrupted by Winter Storm Elliot.
Such risks are heightened in our Ecoservices segment, which has operations and customers primarily located in the Gulf Coast, which is susceptible to a heightened risk of hurricanes, and in California, which is susceptible to a heightened risk of earthquakes and wildfires.
If we fail to develop new products, maintain or improve our margins with our new products or keep pace with technological developments, our business, financial condition, results of operations and cash flows will suffer. 23 If we are unable to pass on increases in raw material prices, including natural gas, to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected.
If we are unable to pass on increases in raw material prices, including natural gas, to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected.
To the extent that we determine in the future to pay dividends on our common stock, the agreements governing our outstanding indebtedness significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. We may need to recognize impairment charges related to goodwill, identified intangible assets and fixed assets.
To the extent that we determine in the future to pay dividends on our common stock, the 33 Table of Con ten ts agreements governing our outstanding indebtedness significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us.
Additionally, current or future U.S. administrations may seek to tighten current environmental standards and regulations, including, but not limited to, the Corporate Average Fuel Economy standards, which could have a material adverse effect on our sales into the clean fuels, emission control and other industries.
Additionally, current or future U.S. administrations may seek to alter current environmental standards and regulations, including, but not limited to, the Corporate Average Fuel Economy standards, which could have a material adverse effect on our sales into the clean fuels, emission control and other industries. 26 Table of Con ten ts We are subject to extensive environmental, health and safety regulations and face various risks associated with potential non-compliance or releases of hazardous materials.
Our joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations or differences in views among our partners results in delayed decisions or failures to agree on major issues, which may adversely affect our results of operations and force us to dedicate additional resources to these joint ventures.
If we are unable to mitigate these or other potential risks related to the uncertainty caused by the strategic review process, it may adversely affect our business or adversely impact our business, financial condition, results of operations and cash flows. 30 Table of Con ten ts Our joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations or differences in views among our partners results in delayed decisions or failures to agree on major issues, which may adversely affect our results of operations and force us to dedicate additional resources to these joint ventures.
Furthermore, our international operations expose us to potential administrative and regulatory proceedings in foreign jurisdictions. Adverse outcomes in any of the foregoing could have a material adverse effect on our business.
Furthermore, our international operations expose us to potential administrative and regulatory proceedings in foreign jurisdictions. Adverse outcomes in any of the foregoing could have a material adverse effect on our business. 39 Table of Con ten ts We determined that a material weakness in our internal control over financial reporting existed as of December 31, 2024.
Discovery of additional or unknown conditions at our facilities could have an adverse impact on our business by substantially increasing our capital expenditures, including compliance, investigation and remediation costs.
Discovery of additional or unknown conditions at our facilities could have an adverse impact on our business by substantially increasing our capital expenditures, including compliance, investigation and remediation costs. Such environmental liabilities attached to our properties, or for properties that we are otherwise responsible for, could have a material adverse effect on our results of operations or financial condition.
In the United States, the EPA has promulgated federal GHG regulations under the Clean Air Act that affect certain sources. For example, the EPA has issued mandatory GHG reporting requirements, under which our Dominguez, California and Baton Rouge, Louisiana facilities currently report.
In the United States, the EPA has promulgated federal GHG regulations under the Clean Air Act that affect certain sources. For example, the EPA has issued mandatory GHG reporting requirements, under which some of our Ecoservices’ facilities report depending upon each facility’s natural gas usage during each prior reporting year.
We are subject to the risk of loss resulting from non-payment or non-performance by our customers. Our credit procedures and policies may not be adequate to minimize or mitigate customer credit risk. Our customers may experience financial difficulties, including bankruptcies, restructurings and liquidations.
The occurrence of any of these events could materially adversely affect our financial condition and results of operations. 24 Table of Con ten ts We are subject to the risk of loss resulting from non-payment or non-performance by our customers. Our credit procedures and policies may not be adequate to minimize or mitigate customer credit risk.
We are also subject to other federal, state, local and foreign laws and regulations regarding chemical and product safety as well as employee health and safety matters, including process safety requirements.
We are also subject to other federal, state, local and foreign laws and regulations regarding chemical and product safety as well as employee health and safety matters, including process safety requirements. These laws and regulations may become more stringent over time and the failure to comply with such laws and regulations can result in significant fines or penalties.
Some of these matters were resolved through the payment of significant monetary penalties and a requirement to implement corrective actions at our facilities.
We have in the past been and currently are the subject of investigations and enforcement actions pursuant to environmental laws, including the Clean Air Act. Some of these matters were resolved through the payment of significant monetary penalties and a requirement to implement corrective actions at our facilities.
There is significant judgment required in the analysis of a potential impairment of goodwill, identified intangible assets and fixed assets.
We are also required to evaluate indefinite-lived intangible assets, fixed assets and investments in affiliated companies for impairment if there are indicators of a possible impairment. There is significant judgment required in the analysis of a potential impairment of goodwill, identified intangible assets, fixed assets, and investments in affiliated companies.
We are subject to extensive environmental, health and safety regulations and face various risks associated with potential non-compliance or releases of hazardous materials. Like other chemical companies, our operations and properties are subject to extensive and stringent federal, state, local and foreign environmental laws and regulations.
Like other chemical companies, our operations and properties are subject to extensive and stringent federal, state, local and foreign environmental laws and regulations.
As of December 31, 2023, we had established reserves of approximately $0.4 million to cover anticipated expenses at these sites, all of which have reached relatively mature stages of the investigation, remediation or monitoring process. Actual costs to complete these projects may exceed our current estimates.
As of December 31, 2024, we had current remediation, monitoring and/or maintenance obligations at several of our current or former sites, including Dominguez, California, Martinez, California and Hammond, Indiana. As of December 31, 2024, we had established reserves to cover anticipated expenses at these sites, all of which have reached relatively mature stages of the investigation, remediation or monitoring process.
We believe that we typically compete on the basis of performance, product consistency, quality, reliability, and ability to innovate in response to customer demands.
In our Ecoservices segment, we compete in the North American refining services industry with competitors such as Chemtrade and Nexpera, formerly the sulfuric acid business of Veolia. We believe that we typically compete on the basis of performance, product consistency, quality, reliability, and ability to innovate in response to customer demands.
If we identify a material weakness in our internal control over financial reporting, we may not be able to remediate the material weakness identified in a timely manner or maintain all of the controls necessary to remain in compliance with our reporting obligations.
We may not be able to remediate this material weakness in a timely manner and even if we remediate this material weakness, we may have other material weaknesses or deficiencies in our internal control over financial reporting in the future.
Your percentage ownership in us may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.
This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation. Your percentage ownership in us may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.
The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to change or to take certain actions.
If we and our restricted subsidiaries incur significant additional indebtedness, the related risks that we face could increase. 35 Table of Con ten ts The terms of our indebtedness restrict our current and future operations, particularly our ability to respond to change or to take certain actions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese trainings are administered through a collaboration with third-party services and systems and address various topics, including how to handle sensitive and personal information, physical security of intellectual property, how to identify phishing attempts, reducing our risk to being phished and how to improve cybersecurity intelligence while working from home. 39 As of December 31, 2023, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company's business strategy, results of operations, or financial condition, although we may be materially affected in the future by such risks or future material incidents.
Biggest changeThese trainings are administered through a collaboration with third-party services and systems and address various topics, including how to handle sensitive and personal information, physical security of intellectual property, how to identify phishing attempts, reducing our risk to being phished and how to improve cybersecurity intelligence while working from home.
While our Board and Audit Committee oversee cybersecurity risk, management, through the CIRT, is responsible for the implementation and management of cybersecurity risk management systems and processes and for the communication of incidents to senior management and the Audit Committee.
While our Board and Audit Committee oversee cybersecurity risk, management, through the CIRT, is responsible for the implementation and management of cybersecurity risk 41 Table of Con ten ts management systems and processes and for the communication of incidents to senior management and the Audit Committee.
Added
As of December 31, 2024, we are not aware of any cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company's business strategy, results of operations, or financial condition, although we may be materially affected in the future by such risks or future material incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES. Our operating headquarters are located in Malvern, Pennsylvania and our primary research and development facility is in Conshohocken, Pennsylvania. As of December 31, 2023, we had ten manufacturing facilities in two countries. We also had five administrative facilities and two research and development facilities located in three countries.
Biggest changeITEM 2. PROPERTIES. Our operating headquarters is currently located in Malvern, Pennsylvania and our primary research and development facility is in Conshohocken, Pennsylvania. As of December 31, 2024, we had ten manufacturing facilities in two countries. We also had five administrative facilities and two research and development facilities located in two countries.
Location Segment Baton Rouge, Louisiana, United States Ecoservices Baytown, Texas, United States Ecoservices Dominguez, California, United States Ecoservices Delfzijl, The Netherlands (1) Advanced Materials & Catalysts Hammond, Indiana, United States Ecoservices Houston, Texas, United States Ecoservices Kansas City, Kansas, United States (1) Advanced Materials & Catalysts Martinez, California, United States Ecoservices West Orange, Texas, United States Ecoservices Portland, Oregon, United States Ecoservices (1) We lease a portion of the site to the Zeolyst Joint Venture. 40
Location Segment Baton Rouge, Louisiana, United States Ecoservices Baytown, Texas, United States Ecoservices Dominguez, California, United States Ecoservices Delfzijl, The Netherlands (1) Advanced Materials & Catalysts Hammond, Indiana, United States Ecoservices Houston, Texas, United States Ecoservices Kansas City, Kansas, United States (1) Advanced Materials & Catalysts Martinez, California, United States Ecoservices West Orange, Texas, United States Ecoservices Portland, Oregon, United States Ecoservices (1) We lease a portion of the site to the Zeolyst Joint Venture.
Our joint ventures operated out of two facilities located in two countries. The table below presents summary information regarding our principal manufacturing facilities that we own as of December 31, 2023.
Our joint ventures operated out of two facilities located in two countries. The table below presents summary information regarding our principal manufacturing facilities that we own as of December 31, 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe currently believe that there is no litigation pending that is likely to have a material adverse effect on our business. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. PART II
Biggest changeWe currently believe that there is no litigation pending that is likely to have a material adverse effect on our business. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES.
Added
Not applicable. 42 Table of Con ten ts PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal Number of Shares of Common Stock Purchased as Part of Publicly Announced Plan or Programs Maximum Number (or Dollar Value) of Shares of Common Stock that May Yet Be Purchased Under the Plans or Programs (3) Total Number of Shares of Common Stock Purchased (1) Average Price Paid per Share of Common Stock (2) October 1, 2023 — October 31, 2023 — $ — — $ 234,592 November 1, 2023 — November 30, 2023 — $ — — $ 234,592 December 1, 2023 — December 31, 2023 — $ — — $ 234,592 Total — 2022 Stock Repurchase Program (1) During the three months ended December 31, 2023, the Company did not repurchase shares on the open market or accrue excise tax related to these repurchases, net of shares issued under the Company’s equity incentive program.
Biggest changeHistorically the Company has made discretionary share repurchases under its share repurchase programs. During the three months ended December 31, 2024, the Company did not repurchase shares of its common stock on the open market pursuant to the stock repurchase program and therefore did not need to accrue excise tax related to repurchases.
Stock Performance Graph The graph below shows the cumulative total shareholder return of our common stock for the period from December 31, 2018 to December 31, 2023 as compared to the cumulative total return of the Russell 2000 Total Return Index and the S&P 1500 Specialty Chemicals Index, assuming an investment of $100 made at the respective closing prices on December 31, 2018.
Stock Performance Graph The graph below shows the cumulative total shareholder return of our common stock for the period from December 31, 2019 to December 31, 2024 as compared to the cumulative total return of the Russell 2000 Total Return Index and the S&P 1500 Specialty Chemicals Index, assuming an investment of $100 made at the respective closing prices on December 31, 2019.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information, Holders and Dividends Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “ECVT”. As of February 23, 2024, there were 11 shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information, Holders and Dividends Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “ECVT”. As of February 21, 2025, there were 10 shareholders of record of our common stock.
These transactions when they occur, are accounted for as stock repurchases by the Company, with the shares returned to treasury stock at a cost representing the payment by the Company of the tax obligations on behalf of the employees in lieu of shares for the vesting unit.
These transactions when they occur, are accounted for as stock repurchases by the Company, with the shares returned to treasury stock at a cost representing the payment by the Company of the tax obligations on behalf of the employees in lieu of shares for the vesting unit. There were no such transactions during the three months ended December 31, 2024.
We primarily expect to conduct the repurchase program through negotiated transactions with the Company’s equity sponsors, as well as through open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases.
This program is expected to be funded using cash on hand and cash generated from operations. We primarily expect to conduct the repurchase program through negotiated transactions with the Company’s equity sponsors, as well as through open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases.
Historically the Company has made discretionary share repurchases under its share repurchase programs. Tax Withholdings (1) In connection with the vesting of restricted stock awards, restricted stock units and performance stock units, shares of common stock may be delivered to the Company by employees to satisfy withholding tax obligations at the instruction of the employee award holders.
As of December 31, 2024, $229.6 million was available for additional share repurchases under the program. Tax Withholdings In connection with the vesting of restricted stock awards, restricted stock units and performance stock units, shares of common stock may be delivered to the Company by employees to satisfy withholding tax obligations at the instruction of the employee award holders.
The information contained in the graph below is furnished and therefore not to be considered “filed” with the SEC, and is not incorporated by reference into any document that incorporates this Form 10-K by reference. 41 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 ECVT (formerly PQG) $ 100 $ 116 $ 110 $ 98 $ 85 $ 93 Russell 2000 100 126 151 173 138 161 SP 1500 Spec Chem 100 118 138 176 132 152 Issuer Purchases of Equity Securities The following table contains information about purchases of our common stock during the fourth quarter of 2023.
The information contained in the graph below is furnished and therefore not to be considered “filed” with the SEC, and is not incorporated by reference into any document that incorporates this Form 10-K by reference. 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 ECVT (formerly PQG) $ 100 $ 94 $ 84 $ 73 $ 80 $ 63 Russell 2000 100 120 138 110 128 143 SP 1500 Spec Chem 100 116 149 112 128 126 43 Table of Con ten ts Issuer Purchases of Equity Securities 2022 Stock Repurchase Program In April 2022, our Board of Directors approved a stock repurchase program that authorized the Company to purchase up to $450 million of the Company’s common stock over the four-year period from the date of approval.
Removed
As of December 31, 2023, $234.6 million was available for additional share repurchases under the program. (2) Excludes brokerage commissions and other costs of execution.
Removed
(3) In April 2022, our Board of Directors approved a stock repurchase program that authorized the Company to purchase up to $450 million of the Company’s common stock over the four-year period from the date of approval. This program is expected to be funded using cash on hand and cash generated from operations.
Removed
There were no such transactions during the three months ended December 31, 2023. 42 ITEM 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

122 edited+42 added−26 removed78 unchanged
Biggest changeFinance obligation due withing the next twelve months is $3.2 million. 53 Cash Flow Years ended December 31, 2023 2022 2021 (in millions) Continuing Operations Net cash provided by (used in) Operating activities $ 137.6 $ 180.4 $ 137.3 Investing activities (65.3) (63.0) 875.7 Financing activities (93.5) (148.1) (963.1) Discontinued Operations Net cash provided by (used in) Operating activities — 6.3 (7.4) Investing activities — — (40.0) Financing activities — — (1.1) Effect of exchange rate changes on cash and cash equivalents (1.3) (5.5) 2.3 Net change in cash and cash equivalents (22.5) (29.9) 3.7 Cash and cash equivalents at beginning of period 110.9 140.9 137.2 Cash and cash equivalents at end of period $ 88.4 $ 111.0 $ 140.9 Years ended December 31, 2023 2022 2021 (in millions) Continuing Operations Net income $ 71.2 $ 69.8 $ 1.8 Non-cash and non-working capital related activities (1) 86.6 114.3 156.6 Changes in working capital (20.8) (2.2) (18.1) Other operating activities 0.6 (1.5) (3.0) Net cash provided by operating activities, continuing operations $ 137.6 $ 180.4 $ 137.3 (1) Includes depreciation, amortization, amortization of deferred financing costs and original issue discount, debt extinguishment costs, foreign currency exchange (gain) loss, pension and postretirement healthcare (benefit) expense, deferred income tax provision (benefit), net (gain) loss on asset disposals, stock compensation expense, equity in net income and dividends received from affiliated companies. 54 Years ended December 31, 2023 2022 2021 (in millions) Continuing Operations Working capital changes that provided (used) cash: Receivables $ (6.1) $ 5.4 $ (33.5) Inventories (1.4) 9.9 0.6 Prepaids and other current assets (1.1) — (7.8) Accounts payable 2.4 (10.1) 10.0 Accrued liabilities (14.6) (7.4) 12.6 $ (20.8) $ (2.2) $ (18.1) Years ended December 31, 2023 2022 2021 (in millions) Continuing Operations Purchases of property, plant and equipment $ (65.3) $ (58.9) $ (60.0) Proceeds from business divestitures, net of cash — — 978.4 Payments for business divestiture, net of cash — (3.7) — Business combinations, net of cash acquired — (0.5) (42.6) Other, net — 0.1 (0.1) Net cash (used in) provided by investing activities, continuing operations $ (65.3) $ (63.0) $ 875.7 Years ended December 31, 2023 2022 2021 (in millions) Continuing Operations Cash repayments on debt obligations $ (9.0) $ (9.0) $ (542.9) Dividends paid to stockholders — — (435.6) Repurchases of common shares (78.7) (136.7) — Tax withholdings on equity award vesting (3.4) (0.3) — Repayment of financing obligation (2.8) (2.7) — Other financing activities 0.4 0.6 15.4 Net cash used in financing activities, continuing operations $ (93.5) $ (148.1) $ (963.1) The following discussions related to our cash flows are presented on a continuing operations basis, which excludes the cash flows from our former Performance Chemicals and Performance Materials businesses, which are accounted for as discontinued operations. 55 Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Net cash provided by operating activities was $137.6 million for the year ended December 31, 2023, compared with $180.4 million provided for the year ended December 31, 2022.
Biggest changeCash Flow Years ended December 31, 2024 2023 2022 (in millions) Continuing Operations Net cash provided by (used in) Operating activities $ 149.9 $ 137.6 $ 180.4 Investing activities (73.5) (65.3) (63.0) Financing activities (17.9) (93.5) (148.1) Discontinued Operations Net cash provided by Operating activities — — 6.3 Effect of exchange rate changes on cash and cash equivalents (0.9) (1.3) (5.5) Net change in cash and cash equivalents 57.6 (22.5) (29.9) Cash and cash equivalents at beginning of period 88.4 110.9 140.9 Cash and cash equivalents at end of period $ 146.0 $ 88.4 $ 111.0 55 Table of Con ten ts The following discussions related to our cash flows are presented on a continuing operations basis, which excludes the cash flows from our former Performance Chemicals business, which was accounted for as discontinued operations.
Adjusted EBITDA and adjusted net income are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income (loss) attributable t o continuing operations b efore interest, taxes, depreciation and amortization.
Adjusted EBITDA and Adjusted Net Income are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net (loss) income attributable t o continuing operations b efore interest, taxes, depreciation and amortization.
Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net income (loss) and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture.
Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture.
Adjusted net income consists of net income (loss) adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income (loss) that we do not consider indicative of our ongoing operating performance.
Adjusted Net Income consists of net (loss) income adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance.
The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the year ended December 31, 2023 was mainly due to the impact of a valuation allowance release connected to our state investment tax credit carryovers, foreign tax credit benefit, the Section 162(m) deduction limitation for “covered” employees with compensation in excess of $1 million, along with the tax deductibility of stock compensation.
The difference between the U.S. federal statutory income tax rate and our effective income tax rate for the year ended December 31, 2023 was mainly due the impact of a valuation allowance release connected to our state investment tax credit carryovers, foreign tax credit benefit, the Section 162(m) deduction limitation for “covered” employees with compensation in excess of $1 million, along with the tax deductibility of stock compensation.
We believe that our existing cash, cash equivalents and cash flows from operations, combined with availability under our ABL Facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, which may impact our future cash requirements.
We believe that our existing cash and cash equivalents and cash flows from operations, combined with availability under our ABL Facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, which may impact our future cash requirements.
MSAs in the our Ecoservices segment may contain provisions whereby raw materials costs are passed-through to the customer per the terms of their contract. Our exposure to fluctuations in raw materials prices is limited, as the majority of pass-through contract provisions reset based on fluctuations in the underlying raw material price.
MSAs in our Ecoservices segment may contain provisions whereby raw materials costs are passed-through to the customer per the terms of their contract. Our exposure to fluctuations in raw materials prices is limited, as the majority of pass-through contract provisions reset based on fluctuations in the underlying raw material price.
Although achievement of the performance condition is subject to continued service with us, the terms of awards issued with performance conditions stipulate that the performance vesting 61 condition can be attained for a period of six months following separation from service under certain circumstances, depending on the means of separation from the Company and subject to other factors such as individual separation agreements.
Although achievement of the performance condition is subject to continued service with us, the terms of awards issued with performance conditions stipulate that the performance vesting condition can be attained for a period of six months following separation from service under certain circumstances, depending on the means of separation from the Company and subject to other factors such as individual separation agreements.
Subsequent reversal of an impairment loss is not permitted. 59 For the purposes of the quantitative goodwill impairment test, we determine the fair value of our reporting units using a combination of a market approach and an income, or discounted cash flow, approach.
Subsequent reversal of an impairment loss is not permitted. For the purposes of the quantitative goodwill impairment test, we determine the fair value of our reporting units using a combination of a market approach and an income, or discounted cash flow, approach.
The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec. 162(m), and adding the tax effect of equity-based stock compensation shortfall recorded as a discrete item.
The tax effect on equity-based compensation is derived by removing the tax effect of any equity-based compensation expense disallowed as a result of its inclusion within IRC Sec. 162(m) and adding the tax effect of equity-based compensation shortfall recorded as a discrete item.
(2) The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $50.5 million for the year ended December 31, 2023, which includes $30.7 million of equity in net income, excluding $6.4 million of amortization of investment in affiliate step-up plus $13.4 million of joint venture depreciation, amortization and interest.
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Advanced Materials & Catalysts segment was $50.5 million for the year ended December 31, 2023, which includes $30.6 million of equity in net income, excluding $6.4 million of amortization of investment in affiliate step-up plus $13.4 million of joint venture depreciation, amortization and interest.
Following this amendment, U.S. dollar-denominated borrowings under the ABL Facility bear interest at a rate equal to an adjusted SOFR rate or the base rate plus a margin of between 1.25% and 1.75% or 0.25% to 0.75%, respectively. As of December 31, 2023, there were no revolving credit borrowings under the ABL Facility.
Following this amendment, U.S. dollar-denominated borrowings under the ABL Facility bear interest at a rate equal to an adjusted SOFR rate or the base rate plus a margin of between 1.25% and 1.75% or 0.25% to 0.75%, respectively. As of December 31, 2024, there were no revolving credit borrowings under the ABL Facility.
(f) Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations. (g) Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations.
(g) Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations. (h) Includes the impact of restructuring, integration and business optimization expenses, which are incremental costs that are not representative of our ongoing business operations.
(h) Other consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen.
(i) Other consists of adjustments for items that are not core to our ongoing business operations. These adjustments include environmental remediation and other legal costs, expenses for capital and franchise taxes, and defined benefit pension and postretirement plan (benefits) costs, for which our obligations are under plans that are frozen.
Adjusted net income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial 51 condition. Adjusted net income may not be comparable with net income or adjusted net income as defined by other companies.
Adjusted Net Income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted Net Income may not be comparable with net (loss) income or Adjusted Net Income as defined by other companies.
For the annual assessments in 2023 and 2022, we bypassed the option to perform the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test for each of our reporting units. The quantitative test identifies both the potential existence of impairment and the amount of impairment loss.
For the annual assessments in 2024 and 2023, we bypassed the option to perform the qualitative assessment and proceeded directly to performing the quantitative goodwill impairment test for each of our reporting units. The quantitative test identifies both the potential existence of impairment and the amount of impairment loss.
(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, effectively reflecting the results as if these inventories were valued using the FIFO 50 method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.
(f) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, effectively reflecting the results as if these inventories were valued using the FIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.
(c) When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.
(d) When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.
Following the amendment, the borrowings under the amended ABL Facility bore interest at a rate equal to the LIBOR rate or the base rate plus a margin of between 1.25% to 1.75% or 0.25% to 0.75%, respectively.
Following the amendment, the borrowings under the amended ABL Facility bear interest at a rate equal to the LIBOR rate or the base rate plus a margin of between 1.25% to 1.75% or 0.25% to 0.75%, respectively.
The second ratio compares the ABL Facility availability of the U.S. revolving credit facility against a $15.0 million threshold. As of December 31, 2023, we were in compliance with the financial covenant under the ABL Facility. The 2021 Term Loan Facility and the ABL Facility contain various restrictive covenants.
The second ratio compares the ABL Facility availability of the U.S. revolving credit facility against a $15.0 million threshold. As of December 31, 2024, we were in compliance with the financial covenant under the ABL Facility. The 2024 Term Loan Facility and the ABL Facility contain various restrictive covenants.
On February 9, 2023, we amended the 2021 Term Loan Facility to replace LIBOR with SOFR as the benchmark interest rate. Following this amendment, the 2021 Term Loan Facility bears interest at an adjusted SOFR rate (with a 0.50% minimum floor) plus 2.75% per annum (or, depending on the first lien net leverage ratio, 2.50%).
On February 9, 2023, we amended the 2021 Term Loan Facility to replace LIBOR with a Secured Overnight Financing Rate (“SOFR”) as the benchmark interest rate. Following this amendment, the 2021 Term Loan Facility bears interest at an adjusted SOFR rate (with a 0.50% minimum floor) plus 2.75% per annum (or, depending on the first lien net leverage ratio, 2.50%).
As of December 31, 2023, we did not have any revolving credit facility borrowings and were in compliance with all covenants under our debt agreements. Our ABL Facility has one financial covenant with two ratios to maintain.
We did not have any revolving credit facility borrowings as of December 31, 2024. As of December 31, 2024, we were in compliance with all covenants under our debt agreements. Our ABL Facility has one financial covenant with two ratios to maintain.
These demand fluctuations results in higher sales and working capital requirements in the second and third quarters. 45 Foreign Currency As a global business, we are subject to the impact of gains and losses on currency translations, which occur when the financial stat ements of foreign operations are translated into U.S. dollars.
These demand fluctuations generally result in higher sales and working capital requirements in the second and third quarters. Foreign Currency As a global business, we are subject to the impact of gains and losses on currency translations, which occur when the financial stat ements of foreign operations are translated into U.S. dollars.
Advanced Materials & Catalysts : We are a global supplier of finished silica catalyst, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry.
Advanced Materials & Catalysts : We are a global supplier of finished silica catalyst, catalyst supports and functionalized silicas necessary to produce high performing plastics and to enable sustainable chemistry through our Advanced Silicas business .
Our liquidity requirements are significant, primarily due to debt service requirements. As reported, our cash interest expense for the years ended December 31, 2023, 2022 and 2021 was approximately $42.1 million, $35.4 million and $59.0 million, respectively.
Our liquidity requirements are significant, primarily due to debt service requirements. As reported, our cash interest expense for the years ended December 31, 2024, 2023 and 2022 was approximately $49.0 million, $42.1 million and $35.4 million, respectively.
Goodwill and intangible assets with indefinite lives are not amortized, but are tested for impairment annually or more frequently if events or circumstances exist that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Goodwill is tested for impairment at the reporting unit level.
Goodwill and intangible assets with indefinite lives are not amortized, but are tested for impairment annually or more frequently if events or circumstances exist that would more likely than not reduce the fair value of the reporting unit below its carrying amount. 59 Table of Con ten ts Goodwill is tested for impairment at the reporting unit level.
Revolving credit borrowings are payable at our option throughout the term of the ABL Facility with the balance due August 2, 2026. We have the availability to request letters of credit under the ABL Facility. We had $4.0 million of letters of credit outstanding as of December 31, 2023, which reduce available borrowings under the ABL Facility by such amounts.
Revolving credit borrowings are payable at our option throughout the term of the ABL Facility with the balance due August 2, 2026. We have the availability to request letters of credit under the ABL Facility. We had $3.3 million of letters of credit outstanding as of December 31, 2024, which reduce available borrowings under the ABL Facility by such amounts.
The grant date fair value of restricted stock awards, restricted stock units and performance stock units is based on the value of our common stock as traded on the New York Stock Exchange. The grant date fair value of stock option awards is estimated using a Black-Scholes option pricing model.
The grant date fair value of restricted stock awards, restricted stock units and performance stock units is based on the value of our common stock as traded on the NYSE. The grant date fair value of stock option awards is estimated using a Black-Scholes option pricing model.
Most of our Ecoservices contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. Over 80% of our Ecoservices segment sales for the year ended December 31, 2023 were under contracts featuring quarterly price adjustments.
Most of our Ecoservices contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. About 90% of our Ecoservices segment sales for the year ended December 31, 2024 were under contracts featuring quarterly price adjustments.
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 A discussion of our cash flows for the year ended December 31, 2022 compared to the year ended December 31, 2021 is set forth in Part II, Item 7 of our Form 10-K for the year ended December 31, 2022 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Debt December 31, 2023 2022 (in millions) Senior Secured Term Loan Facility due June 2028 $ 877.5 $ 886.5 ABL Facility — — Total debt 877.5 886.5 Original issue discount (6.2) (7.5) Deferred financing costs (3.4) (4.1) Total debt, net of original issue discount and deferred financing costs 867.9 874.9 Less: current portion (9.0) (9.0) Total long-term debt, excluding current portion $ 858.9 $ 865.9 As of December 31, 2023 our total debt was $877.5 million excluding the original issue discount of $6.2 million and deferred financing fees of $3.4 million for our senior secured credit facilities.
Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 A discussion of our cash flows for the year ended December 31, 2023 compared to the year ended December 31, 2022 is set forth in Part II, Item 7 of our Form 10-K for the year ended December 31, 2023 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Debt December 31, 2024 2023 (in millions) 2024 Term Loan Facility $ 870.8 $ 877.5 ABL Facility — — Total debt 870.8 877.5 Original issue discount (7.2) (6.2) Deferred financing costs (2.8) (3.4) Total debt, net of original issue discount and deferred financing costs 860.8 867.9 Less: current portion (8.7) (9.0) Total long-term debt, excluding current portion $ 852.1 $ 858.9 As of December 31, 2024 our total debt was $870.8 million excluding the original issue discount of $7.2 million and deferred financing fees of $2.8 million for our senior secured credit facilities.
Strategic decisions involving a particular group of assets may trigger an assessment of the recoverability of the related assets. Such an assessment could result in impairment losses. For further information, see Note 14 to these consolidated financial statements. 60 Income Taxes We operate within multiple taxing jurisdictions and are subject to tax filing requirements and potential audits within these jurisdictions.
Strategic decisions may trigger an assessment of the recoverability of the related assets. Such an assessment could result in impairment losses. For further information, see Note 10 to these consolidated financial statements. Income Taxes We operate within multiple taxing jurisdictions and are subject to tax filing requirements and potential audits within these jurisdictions.
Additionally, in connection with secondary offerings of the Company’s common stock in March and May 2023, the Company repurchased 7,000,000 shares of its common stock sold in the offerings from the underwriters at a weighted average price of $10.48 per share concurrently with the closing of the offerings, for a total of $73.4 million, excluding accrued excise tax.
Additionally, in connection with secondary offerings of the Company’s common stock by an equity sponsor in March and May 2023, the Company repurchased 7,000,000 shares of its common stock in the offerings from underwriters at a weighted average price of $10.48 per share concurrently with the close of the offerings, for a total of $73.4 million, excluding accrued excise tax.
Our capital expenditures include both maintenance of business, which include spending on maintenance and HSE initiatives as well as growth, which includes spending to drive organic sales growth and cost savings initiatives.
Our capital expenditures include both maintenance of business, which include spending on maintenance and health, safety and environmental initiatives as well as growth, which includes spending to drive organic sales growth and cost savings initiatives.
This change to the Company’s segment name does not change the Company’s consolidated balance sheets, statements of income or cash flows for the prior periods or the way the Company’s chief operating decision maker (“CODM”) evaluated the business.
This change to the Company’s segment name does not change the Company’s consolidated balance sheets, statements of income or cash flows for the prior periods or the way the Company’s chief operating decision maker (“CODM,” or the Company’s Chief Executive Officer) evaluated the business.
Over the course of the next twelve months and beyond, we anticipate making significant cash payments for known contractual and other obligations, including: Principal and interest on long-term debt As of December 31, 2023, our total indebtedness was $877.5 million, with up to $63.8 million of available borrowings under our ABL.
Over the course of the next twelve months and beyond, we anticipate making significant cash payments for known contractual and other obligations, including: Principal and interest on long-term debt As of December 31, 2024, our total indebtedness was $870.8 million, with up to $75.2 million of available borrowings under our ABL.
We operate in various geographies with approximately 6% of our sales for the years ended December 31, 2023 and 2022 in currencies other than the U.S. dollar.
We operate in various geographies with approximately 5% and 6% of our sales for the years ended December 31, 2024 and 2023, respectively are in currencies other than the U.S. dollar.
Maintenance capital expenditures were higher in the year ended December 31, 2023 as compared to December 31, 2022 due to extended turnaround activities and additional expenditures incurred related to Winter Storm Elliott impacting our manufacturing facilities earlier in the year.
Maintenance capital expenditures were slightly lower in the year ended December 31, 2024 as compared to December 31, 2023 due to extended turnaround activities and additional expenditures incurred related to Winter Storm Elliott impacting our manufacturing facilities in 2023.
The results of operations, financial condition, and cash flows for the Performance Materials and Performance Chemicals businesses are presented herein as discontinued operations for the 2022 and 2021 periods presented. Refer to Note 4 of our consolidated financial statements for additional information.
The results of operations, financial condition, and cash flows for the Performance Chemicals business are presented herein as discontinued operations for the 2022 period presented. Refer to Note 4 of our consolidated financial statements for additional information.
Because our Advanced Materials & Catalysts segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.
Because our Advanced Materials & Catalysts segment reflects our 50% portion of the earnings from the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.
On February 17, 2023, we amended the ABL Facility to replace LIBOR with a secured overnight financing rate (“SOFR”) as the benchmark interest rate with respect to U.S. dollar-denominated borrowings.
On February 17, 2023, we amended the ABL Facility to replace LIBOR with SOFR as the benchmark interest rate with respect to U.S. dollar-denominated borrowings.
When a customer procures goods under this method, we consider the combination of the pricing quote and the purchase order to create enforceable rights and obligations.
When a customer procures goods under this method, we consider the combination of the pricing quote and the purchase order to create enforceable rights and obligations. Absent either a MSA or pricing quote, we consider an individual purchase order to create enforceable rights and obligations.
Years ended December 31, 2023 2022 2021 (in millions) Maintenance capital expenditures $ 54.1 $ 46.9 $ 42.8 Growth capital expenditures 8.1 9.0 19.6 Total capital expenditures $ 62.2 $ 55.9 $ 62.4 57 Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods.
Years ended December 31, 2024 2023 2022 (in millions) Maintenance capital expenditures $ 53.3 $ 54.1 $ 46.9 Growth capital expenditures 16.1 8.1 9.0 Total capital expenditures $ 69.4 $ 62.2 $ 55.9 Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods.
The decrease in cash from working capital during the year ended December 31, 2023 of $18.6 million was unfavorable compared to the year ended December 31, 2022 primarily due to unfavorable changes in receivables, inventories, prepaids and other current assets and accrued liabilities, which were offset by favorable change in accounts payable.
The decrease in cash from working capital during the year ended December 31, 2024 of $0.1 million was unfavorable compared to the year ended December 31, 2023 primarily due to unfavorable changes in inventories and accrued liabilities, which were partially offset by favorable changes in receivables, prepaids and other current assets.
Depending on the award and recipient, the service condition may reflect a cliff vesting provision (e.g., 100% vested upon four years of service) or a graded vesting provision (e.g., 33.3% vested each year over a period of three years).
The vesting requirements associated with the awards include a mix of both service and/or performance conditions. Depending on the award and recipient, the service condition may reflect a cliff vesting provision (e.g., 100% vested upon four years of service) or a graded vesting provision (e.g., 33.3% vested each year over a period of three years).
We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs. As of December 31, 2023, we had cash and cash equivalents of $88.4 million and availability of $63.8 million under our ABL Facility, after giving effect to $4.0 million of outstanding letters of credit, for a total available liquidity of $152.2 million.
We may, from time to time, increase borrowings under our ABL Facility to meet our future cash needs. As of December 31, 2024, we had cash and cash equivalents of $146.0 million and availability of $75.2 million under our ABL Facility, after giving effect to $3.3 million of outstanding letters of credit, for a total available liquidity of $221.2 million.
Net Income For the foregoing reasons, net income was $71.2 million for the year ended December 31, 2023 as compared to $73.7 million for the year ended December 31, 2022.
Net Loss (Income) For the foregoing reasons, net loss was $6.7 million for the year ended December 31, 2024 as compared to net income of $71.2 million for the year ended December 31, 2023.
Our total available liquidity as of December 31, 2023 was $152.2 million, which represents our cash on hand of $88.4 million plus our excess availability under our ABL of $63.8 million, after giving effect to $4.0 million of outstanding letters of credit and no revolving credit facility borrowings.
Our total available liquidity as of December 31, 2024 was $221.2 million, which represents our cash on hand of $146.0 million plus our excess availability under our ABL of $75.2 million, after giving effect to $3.3 million of outstanding letters of credit and no revolving credit facility borrowings.
Restricted stock awards provide the recipient with shares of our stock subject to certain vesting requirements. Restricted stock units and performance stock units provide the recipient with the right to receive shares of our stock at a future date if certain vesting conditions are met.
Restricted stock units and performance stock units provide the recipient with the right to receive shares of our stock at a future date if certain vesting conditions are met. Stock option awards provide the recipient the ability to purchase shares of our stock at a given strike price upon the satisfaction of certain vesting requirements.
Interest Expense, Net Interest expense, net for the year ended December 31, 2023 was $44.7 million, an increase of $7.5 million, as compared with $37.2 million for the year ended December 31, 2022.
Interest Expense, Net Interest expense, net for the year ended December 31, 2024 was $49.4 million, an increase of $4.7 million, as compared with $44.7 million for the year ended December 31, 2023.
Cash generated by operating activities, other than changes in working capital was lower by $24.1 million during the year ended December 31, 2023, as compared to the prior year was primarily driven by lower earnings, lower dividends from affiliates, higher cash taxes and cash interest, and unfavorable change in working capital .
Cash generated by operating activities, other than changes in working capital was higher by $12.3 million during the year ended December 31, 2024, as compared to the prior year which was primarily driven by higher dividends received from affiliates, offset by lower earnings, higher cash taxes and cash interest paid .
Seasonality Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months.
We share proportionally in the management of our joint venture with the other parties to such joint venture. Seasonality Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months.
However, foreign earnings may still be taxed for state income tax purposes, as well as subject to certain foreign withholding tax obligations, when cash amounts are distributed back to the U.S.
Repatriation of foreign cash is generally not subject to U.S. federal income taxes at the time of cash distribution. However, foreign earnings may still be taxed for state income tax purposes, as well as subject to certain foreign withholding tax obligations, when cash amounts are distributed back to the U.S.
Adjusted EBITDA Summarized EBITDA and Adjusted EBITDA information is shown below in the following table: Years ended December 31, Change 2023 2022 $ % (in millions, except percentages) Adjusted EBITDA (1) : Ecoservices $ 200.0 $ 227.8 $ (27.8) (12.2) % Advanced Materials & Catalysts (2) 81.9 78.0 3.9 5.0 % Unallocated corporate expenses (22.0) (29.0) 7.0 (24.1) % Total $ 259.9 $ 276.8 $ (16.9) (6.1) % (1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below.
Adjusted EBITDA Summarized EBITDA and Adjusted EBITDA information is shown below in the following table: Years ended December 31, Change 2024 2023 $ % (in millions, except percentages) Adjusted EBITDA (1) : Ecoservices $ 200.3 $ 200.0 $ 0.3 0.2 % Advanced Materials & Catalysts (2) 64.7 81.9 (17.2) (21.0) % Unallocated corporate expenses (26.8) (22.0) (4.8) 21.8 % Total $ 238.2 $ 259.9 $ (21.7) (8.3) % (1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below.
Although the Company experienced shipment delays, the impact remained immaterial on our business. 43 2022 Stock Repurchase Program On April 27, 2022, the Board approved a stock repurchase program that authorized the Company to purchase up to $450 million of the Company’s common stock over the four-year period from the date of approval.
Stock Repurchase Program On April 27, 2022, the Board approved a stock repurchase program that authorized the Company to purchase up to $450.0 million of the Company’s common stock over the four-year period from the date of approval.
Adjusted Net Income Summarized adjusted net income information is shown below in the following table: Years ended December 31, 2023 2022 Pre-tax Tax expense (benefit) After-tax Pre-tax Tax expense (benefit) After-tax (in millions) Reconciliation of net income to Adjusted Net Income (1)(2) Net income from continuing operations $ 82.0 $ 10.8 $ 71.2 $ 94.7 $ 24.9 $ 69.8 Amortization of investment in affiliate step-up (b) 6.4 1.6 4.8 6.4 1.5 4.9 Net loss on asset disposals (c) 4.1 1.0 3.1 3.6 0.9 2.7 Foreign currency exchange (gain) loss (d) (1.3) (0.3) (1.0) 1.4 0.4 1.0 LIFO expense (benefit) (e) 3.5 0.9 2.6 (0.2) (0.1) (0.1) Transaction and other related costs (f) 3.0 0.8 2.2 7.0 1.1 5.9 Equity-based compensation 16.0 1.5 14.5 20.6 (0.1) 20.7 Restructuring, integration and business optimization expenses (g) 2.7 0.7 2.0 11.6 2.8 8.8 Other (h) 0.8 0.2 0.6 (0.7) (0.2) (0.5) Adjusted Net Income, including Impact valuation allowance release 117.2 17.2 100.0 144.4 31.2 113.2 Impact of valuation allowance release (3) — 10.2 (10.2) — — — Adjusted Net Income $ 117.2 $ 27.4 $ 89.8 $ 144.4 $ 31.2 $ 113.2 (1) We define adjusted net inco me as net income attributable to Ecovyst Inc. adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance.
Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions). 52 Table of Con ten ts Adjusted Net Income Summarized Adjusted Net Income information is shown below in the following table: Years ended December 31, 2024 2023 Pre-tax Tax expense (benefit) After-tax Pre-tax Tax expense (benefit) After-tax (in millions) Reconciliation of net (loss) income to Adjusted Net Income (1)(2) Net (loss) income $ (5.1) $ 1.6 $ (6.7) $ 82.0 $ 10.8 $ 71.2 Amortization of investment in affiliate step-up (b) 3.8 1.0 2.8 6.4 1.6 4.8 Impairment of investment in affiliated companies (c) 65.0 0.5 64.5 — — — Intangible asset impairment charge 3.9 1.0 2.9 — — — Debt extinguishment costs 4.6 1.2 3.4 — — — Net loss on asset disposals (d) 2.4 0.6 1.8 4.1 1.0 3.1 Foreign currency exchange gain (e) (0.2) (0.1) (0.1) (1.3) (0.3) (1.0) LIFO (benefit) expense (f) (2.2) (0.6) (1.6) 3.5 0.9 2.6 Transaction and other related costs (g) 0.4 0.1 0.3 3.0 0.8 2.2 Equity-based compensation 14.0 3.0 11.0 16.0 1.5 14.5 Restructuring, integration and business optimization expenses (h) 1.0 0.3 0.7 2.7 0.7 2.0 Other (i) (1.5) (0.5) (1.0) 0.8 0.2 0.6 Adjusted Net Income, including impact of valuation allowance release and changes in uncertain tax positions release 86.1 8.1 78.0 117.2 17.2 100.0 Impact of valuation allowance release (3) — — — — 10.2 (10.2) Changes in uncertain tax positions release (4) — 9.4 (9.4) — — — Adjusted Net Income $ 86.1 $ 17.5 $ 68.6 $ 117.2 $ 27.4 $ 89.8 (1) We define Adjusted Net Inco me as net (loss) income adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net (loss) income that we do not consider indicative of our ongoing operating performance.
A reconciliation of net income attributable to Ecovyst Inc. to Adjusted EBITDA is as follows: Years ended December 31, 2023 2022 (in millions) Reconciliation of net income to Adjusted EBITDA Net income from continuing operations $ 71.2 $ 69.8 Provision for income taxes 10.8 24.9 Interest expense, net 44.7 37.2 Depreciation and amortization 84.6 79.2 EBITDA 211.3 211.1 Joint venture depreciation, amortization and interest (a) 13.4 16.0 Amortization of investment in affiliate step-up (b) 6.4 6.4 Net loss on asset disposals (c) 4.1 3.6 Foreign currency exchange (gain) loss (d) (1.3) 1.4 LIFO expense (benefit) (e) 3.5 (0.2) Transaction and other related costs (f) 3.0 7.0 Equity-based compensation 16.0 20.6 Restructuring, integration and business optimization expenses (g) 2.7 11.6 Other (h) 0.8 (0.7) Adjusted EBITDA $ 259.9 $ 276.8 (a) We use Adjusted EBITDA as a performance measure to evaluate our financial results.
A reconciliation of net (loss) income to Adjusted EBITDA is as follows: Years ended December 31, 2024 2023 (in millions) Reconciliation of net (loss) income to Adjusted EBITDA Net (loss) income $ (6.7) $ 71.2 Provision for income taxes 1.6 10.8 Interest expense, net 49.4 44.7 Depreciation and amortization 89.4 84.6 EBITDA 133.7 211.3 Joint venture depreciation, amortization and interest (a) 13.3 13.4 Amortization of investment in affiliate step-up (b) 3.8 6.4 Impairment of investment in affiliated companies (c) 65.0 — Intangible asset impairment charge 3.9 — Debt extinguishment costs 4.6 — Net loss on asset disposals (d) 2.4 4.1 Foreign currency exchange gain (e) (0.2) (1.3) LIFO (benefit) expense (f) (2.2) 3.5 Transaction and other related costs (g) 0.4 3.0 Equity-based compensation 14.0 16.0 Restructuring, integration and business optimization expenses (h) 1.0 2.7 Other (i) (1.5) 0.8 Adjusted EBITDA $ 238.2 $ 259.9 51 Table of Con ten ts (a) We use Adjusted EBITDA as a performance measure to evaluate our financial results.
Results of Operations Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 A discussion of our performance for the year ended December 31, 2022 compared to the year ended December 31, 2021 is set forth in Part II, Item 7 of our Form 10-K for the year ended December 31, 2022 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Financial Condition, Liquidity and Capital Resources Our primary sources of liquidity consist of cash flows from operations, existing cash balances as well as funds available under our asset based lending revolving credit facility (“ABL Facility”).
The tax effect on the impairment of investment in affiliated companies is derived by removing the tax impact of the non-deductible component specific to goodwill. 53 Table of Con ten ts Results of Operations Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 A discussion of our performance for the year ended December 31, 2023 compared to the year ended December 31, 2022 is set forth in Part II, Item 7 of our Form 10-K for the year ended December 31, 2023 under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Financial Condition, Liquidity and Capital Resources Our primary sources of liquidity consist of cash flows from operations, existing cash balances as well as funds available under our asset based lending revolving credit facility (“ABL Facility”).
As of December 31, 2023, our total finance lease liabilities was $0.1 million as of December 31, 2023, with $0.1 million of principal and interest payments made during the year. Finance lease payments due withing the next twelve months is $0.1 million.
Principal and interest payments made during the year was $0.1 million. As of December 31, 2024, our total finance obligation was $4.9 million, with $3.1 million of principal and interest payments made during the year. Finance obligation due within the next twelve months is $3.1 million.
Before any impact of hedges, a one percent change in assumed interest rates for our variable interest credit facilities would have an annual impact of approximately $8.8 million on interest expense. The principal balance due in the next twelve months is $9.0 million.
Before any impact of hedges, a one percent change in assumed interest rates for our variable interest credit facilities would have an annual impact of approximately $8.7 million on interest expense.
We have no operations in Russia or Ukraine. We had no sales to customers in Ukraine and Russia in December 31, 2023 and our sales to a customer in Russia were immaterial for the year ended December 31, 2022 and 2% for the year ended December 31, 2021.
We have no operations in Russia or Ukraine. We had no sales to customers or purchases from suppliers in Ukraine and Russia for the years ended December 31, 2024 and 2023. Our sales to a customer in Russia were immaterial and we did not make any purchases from suppliers for the year ended December 31, 2022.
Interest payments due within the next twelve months are $70.7 million using the interest rate effective as of December 31, 2023 on our variable interest credit facilities. Interest on long-term debt excludes amortization of deferred financing fees and original issue discount.
The principal balance due in the next twelve months is $8.7 million. 54 Table of Con ten ts Interest payments due within the next twelve months are $50.1 million using the interest rate effective as of December 31, 2024 on our variable interest credit facilities. Interest on long-term debt excludes amortization of deferred financing fees and original issue discount.
Stock-Based Compensation We grant stock-based compensation awards in connection with our stock incentive plans. Under the terms of the incentive plans, we are authorized to issue equity awards to our employees, directors and affiliates. The grants have taken the form of restricted stock awards, restricted stock units, performance stock units and stock options.
Under the terms of the incentive plans, we are authorized to issue equity awards to our employees, directors and affiliates. The grants have taken the form of restricted stock awards, restricted stock units, performance stock units and stock options. Restricted stock awards provide the recipient with shares of our stock subject to certain vesting requirements.
Effective November 28, 2023, the Company renamed the Catalyst Technologies segment to Advanced Materials & Catalysts. Beginning with the year ended December 31, 2023, the segment results and disclosures included in the Company’s consolidated financial statements reflect the new segment name for all periods presented.
Beginning with the year ended December 31, 2023, the segment results and disclosures included in the Company’s consolidated financial statements reflect the new segment name for all periods presented.
We use the asset and liability method in accounting for income taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for the year in which the differences are expected to reverse.
Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, using statutory tax rates in effect for 61 Table of Con ten ts the year in which the differences are expected to reverse.
Results of Operations Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Highlights The following is a summary of our financial performance for the year ended December 31, 2023 compared with the year ended December 31, 2022. Sales Sales decreased $129.1 million to $691.1 million.
Results of Operations Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Highlights The following is a summary of our financial performance for the year ended December 31, 2024 compared with the year ended December 31, 2023. Sales Sales increased $13.4 million to $704.5 million.
As of December 31, 2023, our total operating lease liabilities was $24.2 million, with $10.8 million of principal and interest payments made during the year. Operating lease payments due within the next twelve months is $9.5 million.
As of December 31, 2024, our total operating lease liabilities was $33.5 million, with $11.0 million of principal and interest payments made during the year. Operating lease payments due within the next twelve months is $11.0 million. As of December 31, 2024, our total finance lease liabilities was $0.02 million and due within in the next twelve months.
We were in compliance with all debt covenants as of December 31, 2023 and 2022, respectively. 2021 Term Loan Facility On June 9, 2021, we entered into an agreement for a senior secured term loan facility (the “2021 Term Loan Facility”) in an aggregate principal amount of $900.0 million, with an original issue discount of 0.25% and interest at a floating rate of LIBOR (with a 0.50% minimum LIBOR floor) plus 2.75% per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50%), with a maturity date of June 9, 2028.
We 56 Table of Con ten ts may seek, subject to market conditions and other factors, opportunities to repurchase, refinance or otherwise reprice our debt. 2024 Term Loan Facility On June 9, 2021, we entered into an agreement for a senior secured term loan facility (the “2021 Term Loan Facility”) in an aggregate principal amount of $900.0 million, with an original issue discount of 0.25% and interest at a floating rate of LIBOR (with a 0.50% minimum LIBOR floor) plus 2.75% per annum (or, depending on the Borrower’s first lien net leverage ratio, 2.50%), with a maturity date of June 9, 2028.
We identify a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that we will collect the consideration to which we are entitled.
We identify a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that we will collect the consideration to which we are entitled. 58 Table of Con ten ts Evidence of a contract with a customer may take the form of a master service agreement (“MSA”), a MSA in combination with an underlying purchase order, a combination of a pricing quote with an underlying purchase order or an individual purchase order received from a customer.
This segment includes our 50% interest in the Zeolyst Joint Venture, where we are a leading global supplier of zeolites used for catalysts that support the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and are broadly applied in refining and petrochemical processes.
This segment also includes our 50% interest in the Zeolyst Joint Venture, where we are a leading global supplier of specialty zeolites used in catalysts that supports the production of sustainable fuels, remove nitrogen oxides from diesel engine emissions and that are broadly applied in refining and petrochemical processes. 44 Table of Con ten ts Effective November 28, 2023, the Company renamed the Catalyst Technologies segment to Advanced Materials & Catalysts.
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements in conformity with GAAP and our significant accounting policies are described in Note 2 to our consolidated financial statements. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures.
Ecoservices : Adjusted EBITDA for the year ended December 31, 2023 was $200.0 million, a decrease of $27.8 million, or 12.2%, compared to $227.8 million for the year ended December 31, 2022.
Ecoservices : Adjusted EBITDA for the year ended December 31, 2024 was $200.3 million, an increase of $0.3 million, or 0.2%, compared to $200.0 million for the year ended December 31, 2023.
Since we have limited experience with respect to historical exercise and forfeiture rates or patterns, we have estimated certain assumptions using acceptable simplified methods and through benchmarking to our peer group of companies. Recently Issued Accounting Standards See Note 3 to our consolidated financial statements for a discussion of recently issued accounting standards and their effect on us.
Since we have limited experience with respect to historical exercise and forfeiture rates or patterns, we have estimated certain assumptions using acceptable simplified methods and through benchmarking to our peer group of companies.
Our presentation of Adjusted EBITDA and adjusted net income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
Our presentation of Adjusted EBITDA and Adjusted Net Income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of Adjusted EBITDA and Adjusted Net Income to GAAP net (loss) income are included in the results of operations discussion that follows for each of the respective periods.
The increase was primarily due to higher sales for hydrocracking, sustainable fuels and emission control catalysts within the Zeolyst Joint Venture partially offset by the impact of unfavorable fixed cost absorption during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
The decrease was primarily due to lower sales for hydrocracking and emission control catalysts and lower sales of catalysts used in the production of sustainable fuels within the Zeolyst Joint Venture during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
(d) Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income related to the non-permanent intercompany debt denominated in local currency translated to U.S. dollars.
(e) Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income related to the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt, denominated in foreign currency.
The 2021 Term Loan Facility requires scheduled quarterly amortization payments, each equal to 0.25% of the original principal amount of the loans under the 2021 Term Loan Facility. The proceeds from the 2021 Term Loan Facility were used to repay the 2020 Term Loan Facility in full and partially repay the 2018 Term Loan Facility.
The 2021 Term Loan Facility required scheduled quarterly amortization payments, each equal to 0.25% of the original principal amount of the loans under the 2021 Term Loan Facility.
The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries.
The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing.
Effective on August 1, 2021, we completed the sale of our Performance Chemicals business to Sparta Aggregator L.P., a partnership with Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P.
In 2024, we served global customers across many end uses and, as of December 31, 2024, operated out of ten strategically located owned manufacturing facilities. Effective on August 1, 2021, we completed the sale of our Performance Chemicals business to Sparta Aggregator L.P., a partnership with Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P.
As of December 31, 2023, $234.6 million was available for additional share repurchases under the program. During the year-ended December 31, 2022, the Company repurchased 1,970,763 shares on the open market at an average price of $9.82 per share, for a total of $19.4 million, excluding brokerage commissions.
For the year ended December 31, 2024, the Company repurchased 552,081 shares on the open market at an average price of $9.05 per share, for a total of $5.0 million excluding brokerage commissions and accrued excise tax. As of December 31, 2024, $229.6 million was available for share repurchases under the program.
The decrease in sales reflects lower sales volume of $52.1 million and the negative impact associated with the pass-through of lower sulfur costs of approximately $86 million, offset by higher average selling pricing of $20.4 million , after adjusting for the impact of the pass-through of lower sulfur costs.
The increase in sales reflects higher sales volume of $42.4 million, partially offset by lower average selling pricing of 28.9 million, inclusive of the negative impact associated with the pass-through of lower sulfur costs of approximately $7 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor the year ended December 31, 2023, we wrote off a nominal amount of bad debt on total sales of $691.1 million.
Biggest changeCredit risk related to these types of receivables is managed through credit approval and monitoring procedures. For the year ended December 31, 2024, we did not write off any bad debt on our total sales of $704.5 million but wrote off a nominal amount of bad debt in December 31, 2023. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The impact of gains and losses on transactions denominated in currencies other than the 62 functional currency of the relevant operations are included in other expense (income), net in the consolidated statements of income. Income and expense items are translated at average exchange rates during the year.
The impact of gains and losses on transactions denominated in currencies other than the functional currency of the relevant operations are included in other expense (income), net in the consolidated statements of income. Income and expense items are translated at average exchange rates during the year.
The exchange rates between these currencies and the U.S. dollar in recent years have fluctuated significantly and may continue to do so in the future. The foreign currency to which we have the most significant exchange rate exposure is the British pound. Sales in this currency represented approximately 5% of our sales during the year ended December 31, 2023.
The exchange rates between these currencies and the U.S. dollar in recent years have fluctuated significantly and may continue to do so in the future. The foreign currency to which we have the most significant exchange rate exposure is the British pound. Sales in this currency represented approximately 5% of our sales during the year ended December 31, 2024.
A 10% change in the average British pound to U.S. dollar exchange rate during the year ended December 31, 2023 would have impacted sales by approximately $3.3 million over the same period, or 0.5% of our total sales, assuming product pricing remained constant. The effect of translating foreign subsidiaries’ balance sheets into U.S. dollars is included in other comprehensive income.
A 10% change in the average British pound to U.S. dollar exchange rate during the year ended December 31, 2024 would have impacted sales by approximately $3.2 million over the same period, or 0.5% of our total sales, assuming product pricing remained constant. The effect of translating foreign subsidiaries’ balance sheets into U.S. dollars is included in other comprehensive income.
As of December 31, 2023, a 100 basis point increase in assumed interest rates for our variable interest credit facilities, before impact of any hedges, would have an annual impact of approximately $8.8 million on interest expense. We hedge the interest rate fluctuations on debt obligations through interest rate cap agreements.
As of December 31, 2024, a 100 basis point increase in assumed interest rates for our variable interest credit facilities, before impact of any hedges, would have an annual impact of approximately $8.7 million on interest expense. We hedge the interest rate fluctuations on debt obligations through interest rate cap agreements.
We operate a geographically diverse business with approximately 6% of our sales during the years ended December 31, 2023 and 2022, respectively, coming from our international operations in currencies other than the U.S. dollar.
We operate a geographically diverse business with approximately 5% and 6% of our sales during the years ended December 31, 2024 and 2023, respectively, coming from our international operations in currencies other than the U.S. dollar.
We record the fair value of these hedges as assets or liabilities and the related unre alized gains or losses are deferred in stockholders’ equity as a component of other comprehensive income (loss), net of tax. The interest rate caps had a fair value net asset of $16.5 million and $32.3 million at December 31, 2023 and 2022, respectively.
We record the fair value of these hedges as assets or liabilities and the related unre alized gains or losses are deferred in stockholders’ equity as a component of other comprehensive income (loss), net of tax. The interest rate caps had a fair value net asset of $11.8 million and $16.5 million at December 31, 2024 and 2023, respectively.
Credit Risk We are exposed to credit risk on financial instruments to the extent our counterparty fails to perform certain duties as required under the provisions of an agreement. We only transact with counterparties having an appropriate credit rating for the risk involved. Credit exposure is managed through credit approval and monitoring procedures.
Credit Risk We are exposed to credit risk on financial instruments to the extent our counterparty fails to perform certain duties as required under the provisions of an agreement. We only transact with counterparties having an appropriate credit rating for the risk involved.
Concentration of credit risk can result primarily from trade receivables, for example, with certain customers operating in the same industry or customer groups located in the same geographic region. Credit risk related to these types of receivables is managed through credit approval and monitoring procedures.
Credit exposure is managed through credit approval and monitoring procedures. 64 Table of Con ten ts Concentration of credit risk can result primarily from trade receivables, for example, with certain customers operating in the same industry or customer groups located in the same geographic region.
Net foreign currency exchange gains and losses included in other expense (income), net was a $0.6 million income for the year ended December 31, 2023. The foreign currency loss realized in the year ended December 31, 2023 was primarily driven by the non-permanent intercompany debt denominated in local currency and translated to U.S. dollars, and was principally non-cash in nature.
The net foreign currency (gain) loss realized in the year ended December 31, 2024 was primarily driven by the remeasurement effects of monetary assets and liabilities, including non-permanent intercompany debt denominated in a foreign currency and translated to U.S. dollars, and was principally non-cash in nature.
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Net foreign currency exchange gains and losses included in other expense (income), net was a $0.3 million loss for the year ended December 31, 2024.
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The consolidated financial statements, supplementary information and financial statement schedules of the Company are set forth beginning on page F-1 of this report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.

Other ECVT 10-K year-over-year comparisons