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What changed in ASCENT INDUSTRIES CO.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ASCENT INDUSTRIES CO.'s 2022 and 2023 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 2023 report.

+147 added−152 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in ASCENT INDUSTRIES CO.'s 2023 10-K

147 paragraphs added · 152 removed · 107 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

21 edited+9 added−10 removed13 unchanged
Biggest changeSales Tubular Products – The Tubular Products segment utilizes a sales force comprised of inside sales employees, outside sales employees and independent manufacturers' representatives. The segment's products are sold to various distributors, OEM and end use customers. There were no customers representing more than 10% of the Tubular Products segment's revenues for 2022 or 2021, respectively.
Biggest changeThere were no customers representing more than 10% of the Tubular Products segment's revenues for 2022. Specialty Chemicals – Specialty chemicals are sold directly to various industries nationwide by sales representatives comprised of outside sales employees and independent manufacturers' representatives.
The Tubular Products segment serves markets through pipe and tube and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries.
The Tubular Products segment serves markets through pipe and tube production and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries.
The Company does not anticipate that the loss of this supplier would have a materially adverse effect on the Company as raw materials are readily available from a number of different sources, and the Company anticipates no difficulties in fulfilling its requirements.
The Company does not anticipate that the loss of a supplier would have a materially adverse effect on the Company as raw materials are readily available from a number of different sources, and the Company anticipates no difficulties in fulfilling its requirements.
The segment has long-term relationships with a number of leading chemical companies that outsource their manufacturing production to our production facilities allowing those customers to reach their target markets quicker. The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 31% of total purchases are from its top 5 suppliers.
The segment has long-term relationships with a number of leading chemical companies that outsource their manufacturing production to our production facilities allowing those customers to reach their target markets quicker. 3 Table of Contents The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 32% of total raw material purchases are from its top 5 suppliers.
Changes to laws and environmental issues, including climate change, are made or proposed with some frequency and some of the proposals, if adopted, might directly or 4 Table of Contents indirectly result in a material reduction in the operating results of one or more of our operating units. We are presently unable to quantify this risk.
Changes to laws and environmental issues, including climate change, are made or proposed with some frequency and some of the proposals, if adopted, might directly or indirectly result in a material reduction in the operating results of one or more of our operating units.
Total Rewards We invest in our workforce by offering a competitive total rewards package that includes a combination of salaries and wages, health and wellness benefits, retirement benefits and educational benefits. We strive to offer competitive total rewards packages and benefits for eligible employees.
The average employee tenure is approximately 10 years. Total Rewards We invest in our workforce by offering a competitive total rewards package that includes a combination of salaries and wages, health and wellness benefits, retirement benefits and educational benefits. We strive to offer competitive total rewards packages and benefits for eligible employees.
Item 1. Business Ascent Industries Co. is an industrials company focused on the production and distribution of industrial tubular products including stainless steel and galvanized pipe and tube, seamless carbon pipe and tube, and specialty chemicals. Ascent Industries Co. was incorporated in 1958 as the successor to a chemical manufacturing business founded in 1945 known as Blackman Uhler Industries Inc.
Item 1. Business Ascent Industries Co. is a diverse industrials company focused on the production of stainless steel pipe and tube and specialty chemicals. Ascent Industries Co. was incorporated in 1958 as the successor to a chemical manufacturing business founded in 1945 known as Blackman Uhler Industries Inc.
The Specialty Chemicals segment produces specialty products for the pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries.
The Specialty Chemicals segment produces specialty products for the pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries. General Tubular Products – Tubular Products is comprised of BRISMET, located in Bristol, Tennessee and ASTI, located in Troutman and Statesville, North Carolina.
They are represented by three locals affiliated with the United Steelworkers (the "USW") and one local affiliated with the United Food and Commercial Workers (the "UFCW"). Collective bargaining contracts for the USW locals expire at various dates between 2023 and 2024. Collective bargaining contracts for the UFCW local expires in 2024. Our voluntary turnover rate in 2022 was approximately 25%.
They are represented by locals affiliated with the United Steelworkers (the "USW") and the United Food and Commercial Workers (the "UFCW"). Collective bargaining contracts for the USW and UFCW locals expire at various dates in 2024. Our voluntary turnover rate in 2023 was approximately 22%. We monitor employee turnover rates by plant and the Company as a whole.
Human Capital Safety and Wellness The health and safety of our workforce is fundamental to the success of our business. We have a long-standing commitment to the safety and health of every employee that works in our facilities.
Our backlog may not be indicative of actual sales and, therefore, should not be used as a direct measure of future revenue. Human Capital Safety and Wellness The health and safety of our workforce is fundamental to the success of our business. We have a long-standing commitment to the safety and health of every employee that works in our facilities.
We strive to provide an equitable and inclusive environment for all our employees with representation across all levels of our workforce that reflects the diversity of the communities in which we live and work. 5 Table of Contents Available information The Company electronically files with the Securities and Exchange Commission ("SEC") its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its periodic reports on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the "1934 Act"), and proxy materials pursuant to Section 14 of the 1934 Act.
Available information The Company electronically files with the Securities and Exchange Commission ("SEC") its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its periodic reports on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the "1934 Act"), and proxy materials pursuant to Section 14 of the 1934 Act.
The SEC maintains a site on the internet at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Company also makes its filings available, free of charge, through its website at www.ascentco.com as soon as reasonably practical after the electronic filing of such material with the SEC.
The SEC maintains a site on the internet at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
As of December 31, 2022, the Company had 698 employees, all of which were full-time employees. The Company considers relations with employees to be strong. The number of employees of the Company represented by unions, located at the Munhall, Pennsylvania, Mineral Ridge, Ohio, Bristol, Tennessee and Danville, Virginia facilities, is 334, or 48% of the Company's employees.
As of December 31, 2023, the Company had 517 employees, 514 of which were full-time employees. The Company considers relations with employees to be strong. The number of employees of the Company represented by unions is 214, or 41% of the Company's employees.
Pipe larger than 18 inches in outside diameter is formed on presses or rolls and welded using a batch welding technique. Pipe is normally produced in standard 20-foot lengths, although BRISMET also has capabilities in the production of pipe without circumferential welds in lengths up to 60 feet.
Pipe is normally produced in standard 20-foot lengths, although BRISMET also has capabilities in the production of pipe without circumferential welds in lengths up to 60 feet. BRISMET is one of the few domestic producers capable of making pipe in 48-foot lengths up to 36 inches in diameter.
Specialty Chemicals – Specialty chemicals are sold directly to various industries nationwide by sales representatives comprised of outside sales employees and independent manufacturers' representatives. The Specialty Chemicals segment has one customer that accounted for approximately 21% of the segment's revenues for 2022 and 15% of the segment's revenues for 2021.
Sales Tubular Products – The Tubular Products segment utilizes a sales force comprised of inside sales employees, outside sales employees and independent manufacturers' representatives. The segment's products are sold to various distributors, OEM and end use customers. The Tubular Products segment has one customer that accounted for approximately 17% of the segment's revenues for 2023.
Environmental Environmental expenditures that relate to an existing condition caused by past operations and do not contribute to future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or cleanups are probable and the costs of these assessments and/or cleanups can be reasonably estimated.
Liabilities are recorded when environmental assessments and/or cleanups are probable and the costs of these assessments and/or cleanups can be reasonably estimated.
The information on the Company's website is not incorporated into this Annual Report on Form 10-K or any other filing the Company makes with the SEC.
The Company also makes its filings available, free of charge, through its website at www.ascentco.com as soon as reasonably practical after the electronic filing 5 Table of Contents of such material with the SEC. The information on the Company's website is not incorporated into this Annual Report on Form 10-K or any other filing the Company makes with the SEC.
Seasonality The Company's businesses and products are generally not subject to seasonal impacts that result in significant variations in revenues from one quarter to another. Backlogs The backlog of open orders for the Tubular Products segment were $49.8 million and $91.5 million at the end of 2022 and 2021, respectively.
We are presently unable to quantify this risk. 4 Table of Contents Seasonality The Company's businesses and products are generally not subject to seasonal impacts that result in significant variations in revenues from one quarter to another.
Pipe is produced in sizes from 3/8 inch outside diameter to 144 inches outside diameter and wall thickness from 1/4 inch up to 1 and 3/8 inches. Pipe smaller than 18 inches in outside diameter is made on equipment that forms and welds the pipe in a continuous process.
BRISMET manufactures welded pipe and tube, primarily from stainless steel, duplex, and nickel alloys. Pipe is produced in sizes from 3/8 inch outside diameter to 144 inches outside diameter and wall thickness from 1/4 inch up to 1 and 3/8 inches.
Specialty plays a critical role in the domestic supply chain, by maintaining a diverse inventory of hard to find sizes of pipe and tube that support critical infrastructure applications across the United States. The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 65% of total purchases are from its top 5 suppliers.
The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 54% of total raw material purchases are from its top 5 suppliers.
The backlog of open orders for the Specialty Chemicals segment were $10.4 million and $12.9 million at the end of 2022 and 2021, respectively. Our backlog may not be indicative of actual sales and, therefore, should not be used as a direct measure of future revenue.
Backlogs The backlog of open orders for the Tubular Products segment were $22.5 million and $34.4 million at the end of 2023 and 2022, respectively. The backlog of open orders for the Specialty Chemicals segment were $5.0 million and $10.4 million at the end of 2023 and 2022, respectively.
Removed
General Tubular Products – Tubular Products is comprised of BRISMET, located in Bristol, Tennessee and Munhall, Pennsylvania; ASTI, located in Troutman and Statesville, North Carolina; Palmer, located in Andrews, Texas; and Specialty, located in Mineral Ridge, Ohio and Houston, Texas. BRISMET manufactures welded pipe and tube, primarily from stainless steel, duplex, and nickel alloys.
Added
Pipe smaller than 18 inches in outside diameter is made on equipment that forms and welds the pipe in a continuous process. Pipe larger than 18 inches in outside diameter is formed on presses or rolls and welded using a batch welding technique.
Removed
BRISMET is one of the few domestic producers capable of making pipe in 48-foot lengths up to 36 inches in diameter. Additionally, BRISMET's Munhall facility manufactures ornamental stainless tube and galvanized carbon tube, as well as similar stainless pipe products as produced at the Bristol facility.
Added
The Specialty Chemicals segment has one customer that accounted for approximately 24% of the segment's revenues for 2023 and 21% of the segment's revenues for 2022.
Removed
As of December 31, 2022, the Company made the decision to pursue an exit of the galvanized steel pipe and tube business at its Munhall facility. The Company is in the process of winding down operations and expects to permanently cease the production of galvanized steel pipe and tube in the first half of 2023.
Added
The Company may, from time-to-time, divest or close businesses in an effort to better align capital investment within its core operations, increase operational efficiencies and improve profitability. During the second quarter of 2023, the Company's Board of Directors made the decision to cease operations at BRISMET's Munhall facility. The Company ceased operations at this facility effective August 31, 2023.
Removed
Palmer is a manufacturer of fiberglass and steel storage tanks for the oil and gas, waste water treatment and municipal water industries. As of December 31, 2021, the Company permanently ceased operations and is in the process of divesting all remaining assets at the facility.
Added
It is anticipated that the complete exit and disposal of all assets at the Munhall facility will be completed within one year from the date the decision was made to cease operations. The Munhall facility has been classified as a discontinued operation for all periods presented and was formerly a component within the Tubular Products segment.
Removed
The operating results of our Palmer business in Andrews, Texas, currently held for sale, are included within the Tubular Products segment for all periods presented in this annual report. Palmer will be removed from the segment beginning in the first quarter of 2023.
Added
On December 22, 2023, the Company and its wholly-owned subsidiary Specialty Pipe & Tube, Inc. (“SPT”) entered into an Asset Purchase Agreement pursuant to which Ascent and SPT sold substantially all of the assets primarily related to SPT to Specialty Pipe & Tube Operations, LLC, a Delaware limited liability company.
Removed
Specialty is a leading master distributor of hot finish, seamless, carbon steel pipe and tube, with an emphasis on large outside diameters and exceptionally heavy wall thickness. Specialty's products are primarily used for mechanical and high-pressure applications in the oil and gas, heavy industrial, construction equipment, and chemical and other industries.
Added
The consideration for the transaction was approximately $55 million of cash proceeds subject to certain closing adjustments. The transaction closed on December 22, 2023.
Removed
Operating from facilities located in Mineral Ridge, Ohio and Houston, Texas, Specialty is well-positioned to serve the major industrial and energy regions in the United States. Specialty performs value-added processing on a majority of products shipped and 3 Table of Contents typically processes and ships orders in 24 hours or less.
Added
Ascent and Purchaser also entered into a Transition Services Agreement (the “TSA”) and an Employee Leasing Agreement (the “ELA”) each dated December 22, 2023, pursuant to which Ascent has agreed to provide certain transition services and to lease certain employees to Purchaser immediately after the closing for certain agreed upon transition periods.
Removed
On October 22, 2021, the Company completed the acquisition of all of the issued and outstanding shares of common stock of DanChem Technologies, Inc. ("DanChem"). The purpose of the transaction was to accelerate product development capabilities and provide entrance into new end-markets and applications within the Specialty Chemicals segment.
Added
SPT has been classified as a discontinued operation for all periods presented and was formerly a reporting unit within the Tubular Products segment. Environmental Environmental expenditures that relate to an existing condition caused by past operations and do not contribute to future revenue generation are expensed.
Removed
The purchase price was $32.95 million before adjustments for working capital, transaction expenses, cash and debt. The tangible assets purchased and liabilities assumed from DanChem included accounts receivable, inventory, equipment, real property and accounts payable. See Note 2 for additional information on the DanChem acquisition.
Added
We strive to provide an equitable and inclusive environment for all our employees with representation across all levels of our workforce that reflects the diversity of the communities in which we live and work.
Removed
We monitor employee turnover rates by plant and the Company as a whole. The average employee tenure is approximately 7 years. We believe our competitive total rewards package offered to employees and development opportunities help attract talent and promotes longer employee tenure.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFederal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews of such activities could result in delays or eliminate new wells from being started, thus reducing the demand for our pressure vessels and heavy walled pipe and tube.
Biggest changeIn addition, any unanticipated liabilities or obligations arising, for example, out of discovery of previously unknown conditions or changes in laws or regulations, could have an adverse effect on our business, financial condition or results of operations. 8 Table of Contents Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews of such activities could result in delays or eliminate new wells from being started, thus reducing the demand for our pressure vessels and heavy walled pipe and tube.
From time-to-time, intense competition and excess manufacturing capacity in the commodity stainless and galvanized steel industry have resulted in reduced selling prices, excluding raw material surcharges, for many of our stainless steel products sold by the Tubular Products segment. In such situations, in order to maintain market share, we would have to lower our prices to match the competition.
From time-to-time, intense competition and excess manufacturing capacity in the commodity stainless steel industry have resulted in reduced selling prices, excluding raw material surcharges, for many of our stainless steel products sold by the Tubular Products segment. In such situations, in order to maintain market share, we would have to lower our prices to match the competition.
If we continue to identify material weaknesses in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we continue to be unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal controls over financial reporting, investors 11 Table of Contents may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities could be negatively affected, and we could become subject to investigations by the Financial Industry Regulatory Authority, the SEC, or other regulatory authorities, which could require additional financial and management resources.
If we continue to identify material weaknesses in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we continue to be unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities could be negatively affected, and we could become subject to investigations by the Financial Industry Regulatory Authority, the SEC, or other regulatory authorities, which could require additional financial and management resources.
In such event, we may also face difficulties in satisfying customers who could require that all of the components of our products are conflict mineral-free. Human Capital Risks Certain of our employees in the Tubular Products segment are covered by collective bargaining agreements, and the failure to renew these agreements could result in labor disruptions and increased labor costs.
In such event, we may also face difficulties in satisfying customers who could require that all of the components of our products are conflict mineral-free. Human Capital Risks Certain of our employees are covered by collective bargaining agreements, and the failure to renew these agreements could result in labor disruptions and increased labor costs.
Additionally, our ability to pay interest and repay the principal for our indebtedness is dependent upon our ability to manage our business operations, generate sufficient cash flows to service such debt and the other factors discussed in this section. There can be no assurance that we will be able to manage any of these risks successfully.
Additionally, our ability to pay interest and repay the principal for our indebtedness is dependent upon our ability to manage our business operations, generate 9 Table of Contents sufficient cash flows to service such debt and the other factors discussed in this section. There can be no assurance that we will be able to manage any of these risks successfully.
At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, at acceptable prices and other terms, or at all. If suppliers increase the price of critical raw materials, we may not have alternative sources of supply.
At any given time, we may be 6 Table of Contents unable to obtain an adequate supply of these critical raw materials on a timely basis, at acceptable prices and other terms, or at all. If suppliers increase the price of critical raw materials, we may not have alternative sources of supply.
The occurrence of incidents in the future may result in production delays, failure to timely fulfill customer orders or otherwise have a material adverse effect on our business, financial condition or results of operations. 7 Table of Contents Our operations present significant risk of injury and other liabilities.
The occurrence of incidents in the future may result in production delays, failure to timely fulfill customer orders or otherwise have a material adverse effect on our business, financial condition or results of operations. Our operations present significant risk of injury and other liabilities.
An adverse change in, or termination of, the relationship with one or more of our top customers could materially and adversely affect our results of operations. 6 Table of Contents Operations and Supply Chain Risks Any interruption in our ability to procure raw materials, or significant volatility in the price of raw materials, could adversely affect our business and results of operations.
An adverse change in, or termination of, the relationship with one or more of our top customers could materially and adversely affect our results of operations. Operations and Supply Chain Risks Any interruption in our ability to procure raw materials, or significant volatility in the price of raw materials, could adversely affect our business and results of operations.
Although we believe that our present labor relations are strong, our failure to renew these agreements on reasonable terms as the current agreements expire could result in labor disruptions and increased labor costs, which could adversely affect our financial performance. 9 Table of Contents Failure to attract and retain key personnel may adversely impact our strategy and execution and financial results.
Although we believe that our present labor relations are strong, our failure to renew these agreements on reasonable terms as the current agreements expire could result in labor disruptions and increased labor costs, which could adversely affect our financial performance. Failure to attract and retain key personnel may adversely impact our strategy and execution and financial results.
We have identified and may continue to discover material weaknesses in our internal controls over financial reporting, which may adversely affect investor confidence in the accuracy and completeness of our financial reports and consequently the market price of our securities .
We have identified and may continue to discover material weaknesses in our internal controls over financial reporting, which may adversely affect investor confidence in the accuracy and completeness of our financial reports and consequently the 10 Table of Contents market price of our securities .
The occurrence and ultimate costs and timing of environmental liabilities are difficult to predict. Liability under 8 Table of Contents environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis.
The occurrence and ultimate costs and timing of environmental liabilities are difficult to predict. Liability under environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis.
We cannot predict the level of market acceptance or the amount of market share these new or enhanced products may achieve, and we may experience delays or problems in the introduction of new or enhanced products.
We cannot predict the level of market acceptance or the amount of 7 Table of Contents market share these new or enhanced products may achieve, and we may experience delays or problems in the introduction of new or enhanced products.
In addition, COVID-19 has, and may again result in quarantines of our personnel or an inability to access facilities, which could adversely affect our operations. Financial and Strategic Risks There are risks associated with our outstanding and future indebtedness.
In addition, COVID-19 has, and may again result in quarantines of our personnel or an inability to access facilities, which could adversely affect our operations. Financial and Strategic Risks There are risks associated with our outstanding and future indebtedness. As of December 31, 2023, we had no outstanding indebtedness, however, we may incur additional indebtedness in the future.
The top 15 customers in the Specialty Chemicals segment accounted for approximately 67% and 60% of revenues for the years ended December 31, 2022 and 2021, respectively, with the top customer accounting for approximately 21% of revenues for 2022 and 15% of revenues for 2021.
The top 15 customers in the Specialty Chemicals segment accounted for approximately 72% of revenues for the year ended December 31, 2023 and 67% for the year ended December 31, 2022 with the top customer accounting for approximately 24% of revenues for 2023 and 21% of revenues for 2022.
Failure to comply with this covenant could result in an event of default that, if not cured or waived, could have a material adverse effect on our business, results of operations and financial condition.
We have customary restrictive covenants in our current debt agreements, which may limit our flexibility to operate our business. Failure to comply with this covenant could result in an event of default that, if not cured or waived, could have a material adverse effect on our business, results of operations and financial condition.
Our failure to manage these risks effectively could adversely affect our financial condition and results of operations. We may need new or additional financing in the future to expand our business or refinance existing indebtedness, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations and our financial results.
We may need new or additional financing in the future to expand our business, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations and our financial results.
We evaluate the useful lives of our fixed assets and intangible assets to determine if they are definite or indefinite-lived.
Impairment in the carrying value of our fixed assets or intangible assets could adversely affect our financial condition and consolidated results of operations. We evaluate the useful lives of our fixed assets and intangible assets to determine if they are definite or indefinite-lived.
As of December 31, 2022, we had 334 employees represented by unions at our Bristol, Tennessee, Mineral Ridge, Ohio, Munhall, Pennsylvania and Danville, Virginia facilities, which is approximately 48% of the aggregate number of Company employees. These employees are represented by three local unions affiliated with the USW and one local affiliated with the UFCW.
As of December 31, 2023, we had 214 employees represented by unions which is approximately 41% of the aggregate number of Company employees. These employees are represented by local unions affiliated with the USW and the UFCW. Collective bargaining contracts for the USW and UFCW locals expire at various dates in 2024.
Removed
In addition, any unanticipated liabilities or obligations arising, for example, out of discovery of previously unknown conditions or changes in laws or regulations, could have an adverse effect on our business, financial condition or results of operations.
Removed
Collective bargaining contracts for the USW locals expire at various dates between 2023 and 2024. Collective bargaining contracts for the UFCW local expires in 2024.
Removed
As of December 31, 2022, we had $71.5 million of total outstanding indebtedness, and we may incur additional indebtedness in the future. We have customary restrictive covenants in our current debt agreements, which may limit our flexibility to operate our business.
Removed
Our Credit Agreement with BMO Harris Bank N.A. (as amended, the "Credit Agreement") bears interest at variable interest rates, primarily based on the London Interbank Offered Rate ("LIBOR"). LIBOR is currently in the process of being phased out.
Removed
The Credit Agreement includes provisions intended to provide for the replacement of LIBOR with the Secured Overnight Financing Rate ("SOFR") upon the cessation of LIBOR or the occurrence of other triggering events, with corresponding adjustments to the applicable interest rate margins.
Removed
However, uncertainty as to the timing and nature of such modifications could cause the interest rate calculated for the Credit Agreement to be materially different than expected, and there is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have an adverse effect on our business, results of operations and financial condition.
Removed
Impairment in the carrying value of our fixed assets, intangible assets, or goodwill could adversely affect our financial condition and consolidated results of operations. Goodwill represents the excess of cost over the fair value of identified net assets of businesses acquired.
Removed
We review goodwill for impairment annually, or whenever circumstances change in a way which could indicate that impairment may have occurred. Goodwill is tested at the reporting unit level. We identify potential goodwill impairments by comparing the fair value of the reporting unit to its carrying amount, which includes goodwill and other intangible assets.
Removed
If the carrying amount of the reporting unit exceeds the fair value, an impairment exists. The amount of the impairment is the amount by which the carrying amount exceeds the fair value. A significant amount of judgment is involved in determining if an indication of impairment exists.
Removed
Factors may include, among others: a significant decline in our expected future cash flows; a sustained, significant decline in our stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and slower growth rates.
Removed
Any adverse change in these factors would have a significant impact on the recoverability of these assets 10 Table of Contents and negatively affect our financial condition and consolidated results of operations. We are required to record a non-cash impairment charge if the testing performed indicates that goodwill has been impaired.

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−0 removed2 unchanged
Biggest changeThe following table sets forth certain information concerning our principal properties including which segment's products are supported out of each location: Segment Location Principal Operations Square Feet Land Acres Leased or Owned Tubular Products Specialty Chemicals Munhall, PA Manufacturing stainless steel pipe 284,000 20.0 Leased ✔ Bristol, TN Manufacturing stainless steel pipe 275,000 73.1 Leased ✔ Cleveland, TN Chemical manufacturing and warehousing 143,000 18.8 Leased ✔ Fountain Inn, SC Chemical manufacturing and warehousing 136,834 16.9 Leased ✔ Danville, VA Chemical manufacturing and warehousing 135,811 55.3 Owned ✔ Andrews, TX 1 Liquid storage solutions and separation equipment 122,662 19.6 Leased ✔ Troutman, NC Manufacturing ornamental stainless steel tube 106,657 26.5 Leased ✔ Statesville, NC Manufacturing ornamental stainless steel tube 83,000 26.8 Leased ✔ Houston, TX Cutting facility and storage yard for heavy walled pipe 29,821 10.0 Leased ✔ Mineral Ridge, OH Cutting facility and storage yard for heavy walled pipe 12,000 12.0 Leased ✔ Mineral Ridge, OH Storage yard for heavy walled pipe — 4.3 Leased ✔ 1 Company currently subleases facility to a third party In addition to the facilities listed above, the Company leases from a third party the Company's executive office located in Oak Brook, Illinois.
Biggest changeThe following table sets forth certain information concerning our principal properties including which segment's products are supported out of each location: Segment Location Principal Operations Square Feet Land Acres Leased or Owned Tubular Products Specialty Chemicals Bristol, TN Manufacturing stainless steel pipe 275,000 73.1 Leased ✔ Cleveland, TN Chemical manufacturing and warehousing 143,000 18.8 Leased ✔ Fountain Inn, SC Chemical manufacturing and warehousing 136,834 16.9 Leased ✔ Danville, VA Chemical manufacturing and warehousing 135,811 55.3 Owned ✔ Troutman, NC Manufacturing ornamental stainless steel tube 106,657 26.5 Leased ✔ Statesville, NC Manufacturing ornamental stainless steel tube 83,000 26.8 Leased ✔ The following table sets forth certain information concerning other properties under the Master Lease in which the Company is the responsible party: Location Principal Operations Square Feet Land Acres Leased or Owned Munhall, PA 1 Manufacturing stainless steel pipe 284,000 20.0 Leased Andrews, TX 2 Liquid storage solutions and separation equipment 122,662 19.6 Leased Houston, TX 3 Cutting facility and storage yard for heavy walled pipe 29,821 10.0 Leased Mineral Ridge, OH 3 Cutting facility and storage yard for heavy walled pipe 12,000 12.0 Leased 1 Company ceased operations as of August 31, 2023 2 Company currently subleases facility to a third party 3 Company sold substantially all assets of SPT as of December 22, 2023.
Added
The Company remains obligated under the terms of the leases for the rent and other costs that may be associated with the lease of the facilities and is reimbursed for facility lease costs under the transition services agreement executed as part of transaction In addition to the facilities listed above, the Company leases from a third party the Company's executive office located in Oak Brook, Illinois.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table sets forth information with respect to purchase of the Company's common stock made during the fourth quarter of 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs 1 Number of Shares that May Yet Be Purchased under the Program 1 October 1, 2022 - October 31, 2022 — $ — — 760,183 November 1, 2022 - November 30, 2022 34,403 11.00 34,403 725,780 December 1, 2022 - December 31, 2022 45,801 10.30 45,801 679,979 As of December 31, 2022 80,204 $ 10.60 80,204 679,979 1 On December 20, 2022, the Company announced that is Board of Directors re-authorized the Company's share repurchase program that was set to expire on February 17, 2023.
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information with respect to purchase of the Company's common stock made during the fourth quarter of 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs 1 Number of Shares that May Yet Be Purchased under the Program 1 October 1, 2023 - October 31, 2023 10,436 $ 8.34 10,436 573,588 November 1, 2023 - November 30, 2023 11,425 8.29 11,425 562,163 December 1, 2023 - December 31, 2023 25,292 7.96 25,292 536,871 As of December 31, 2023 47,153 $ 8.12 47,153 536,871 1 Pursuant to the 790,383 share stock repurchase program re-authorized by the Board of Directors in December 2022.
The Company's credit agreement restricts the payment of dividends indirectly through a minimum fixed charge coverage covenant. No dividends were declared or paid in 2022 or 2021. Stock Performance Graph The Company is a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and is not required to provide this information.
The Company's credit agreement restricts the payment of dividends indirectly through a minimum fixed charge coverage covenant. No dividends were declared or paid in 2023 or 2022. Stock Performance Graph The Company is a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and is not required to provide this information.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company had 350 common shareholders of record at March 28, 2023. The Company's common stock trades on the NASDAQ Global Market under the trading symbol ACNT.
Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company had 338 common shareholders of record at March 28, 2024. The Company's common stock trades on the NASDAQ Global Market under the trading symbol ACNT.
Removed
As re-authorized, the share repurchase program now extends to February 17, 2025.
Added
The stock repurchase program expires in February 2025 and there is no guarantee to the exact number of shares that will be repurchased by the Company over that period. See Note 9 for additional information.

Item 7. Management's Discussion & Analysis

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

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Biggest changeWe present EBITDA and Adjusted EBITDA because we consider them to be important supplemental measures of our performance and investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. 17 Table of Contents Consolidated EBITDA and Adjusted EBITDA are as follows: Year Ended December 31, ($ in thousands) 2022 2021 Consolidated Net income $ 22,066 $ 20,245 Adjustments: Interest expense 2,742 1,486 Change in fair value of interest rate swap — (2) Income taxes (4,211) 5,253 Depreciation 8,722 7,547 Amortization 3,995 2,794 EBITDA 33,314 37,323 Acquisition costs and other 1,200 1,001 Shelf registration costs 12 — Proxy contest costs and recoveries — 168 Loss on extinguishment of debt — 223 Earn-out adjustments (7) 1,872 Loss on investments in equity securities and other investments — 363 Asset impairment — 233 Gain on lease modification (2) — Stock-based compensation 1,016 799 Non-cash lease expense 414 481 Retention expense — 500 Restructuring and severance costs 74 1,345 Adjusted EBITDA $ 36,021 $ 44,308 % sales 8.7 % 13.2 % 18 Table of Contents Tubular Products EBITDA and Adjusted EBITDA are as follows: Year Ended December 31, ($ in thousands) 2022 2021 Tubular Products Net income $ 27,644 $ 31,893 Adjustments: Interest expense 1 — Depreciation 4,814 5,485 Amortization 3,092 2,721 EBITDA 35,551 40,099 Acquisition costs and other 96 — Earn-out adjustments (7) 1,872 Stock-based compensation 100 129 Retention expense — 500 Restructuring and severance costs 20 363 Tubular Products Adjusted EBITDA $ 35,760 $ 42,963 % of segment sales 11.7 % 16.1 % Specialty Chemicals EBITDA and Adjusted EBITDA are as follows: Year Ended December 31, ($ in thousands) 2022 2021 Specialty Chemicals Net income $ 6,935 $ 3,589 Adjustments: Interest expense 36 11 Depreciation 3,846 1,932 Amortization 903 73 EBITDA 11,720 5,605 Acquisition costs and other — 61 Asset impairment — 233 Stock-based compensation 41 165 Non-cash lease expense 2 — Restructuring and severance costs 8 484 Specialty Chemicals Adjusted EBITDA $ 11,771 $ 6,548 % of segment sales 10.9 % 9.7 % 19 Table of Contents Liquidity and Capital Resources We closely manage our liquidity and capital resources.
Biggest changeConsolidated EBITDA and Adjusted EBITDA from continuing operations are as follows: Year Ended December 31, ($ in thousands) 2023 2022 Consolidated Net (loss) income from continuing operations $ (34,151) $ 17,578 Adjustments: Interest expense 4,238 2,742 Income taxes (6,924) (5,568) Depreciation 6,161 6,421 Amortization 1,505 1,853 EBITDA (29,171) 23,026 Acquisition costs and other 856 1,104 Shelf registration costs — 12 Goodwill impairment 11,389 — Gain on lease modification — (2) Stock-based compensation 594 962 Non-cash lease expense 242 414 Retention expense 26 — Restructuring and severance costs 130 74 Adjusted EBITDA $ (15,934) $ 25,590 % sales (8.2) % 9.8 % 18 Table of Contents Tubular Products EBITDA and Adjusted EBITDA from continuing operations are as follows: Year Ended December 31, ($ in thousands) 2023 2022 Tubular Products Net (loss) income from continuing operations $ (11,210) $ 22,182 Adjustments: Depreciation 2,274 2,500 Amortization 871 951 EBITDA (8,065) 25,633 Stock-based compensation 58 46 Non-cash lease expense 118 — Retention expense 8 — Restructuring and severance costs 84 20 Tubular Products Adjusted EBITDA $ (7,797) $ 25,699 % of segment sales (7.1) % 16.7 % Specialty Chemicals EBITDA and Adjusted EBITDA are as follows: Year Ended December 31, ($ in thousands) 2023 2022 Specialty Chemicals Net (loss) income $ (12,619) $ 6,935 Adjustments: Interest expense 74 36 Depreciation 3,798 3,846 Amortization 634 903 EBITDA (8,113) 11,720 Acquisition costs and other 12 — Goodwill impairment 11,389 — Stock-based compensation 8 41 Non-cash lease expense 88 2 Restructuring and severance costs 40 8 Specialty Chemicals Adjusted EBITDA $ 3,424 $ 11,771 % of segment sales 4.1 % 10.9 % 19 Table of Contents Liquidity and Capital Resources We closely manage our liquidity and capital resources.
Profitability Ratio: • Return on average equity ("ROAE") = net income divided by the trailing 12-month average of equity. The ROAE will be determined by the Company using generally accepted accounting principles, consistently applied.
Profitability Ratio: • Return on average equity ("ROAE") = net (loss) income divided by the trailing 12-month average of equity. The ROAE will be determined by the Company using generally accepted accounting principles, consistently applied.
In 2022 and 2021, no dividends were declared or paid by the Company. 21 Table of Contents Other Financial Measures Below are additional financial measures that we believe are important in understanding the Company's liquidity position from year to year. The metrics are defined as: Liquidity Measure: • Current ratio = current asset divided by current liabilities.
In 2023 and 2022, no dividends were declared or paid by the Company. 21 Table of Contents Other Financial Measures Below are additional financial measures that we believe are important in understanding the Company's liquidity position from year to year. The metrics are defined as: Liquidity Measure: • Current ratio = current asset divided by current liabilities.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion and analysis summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity, and capital resources during the fiscal years ended December 31, 2022 and 2021.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This discussion and analysis summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity, and capital resources during the fiscal years ended December 31, 2023 and 2022.
In this process, certain relevant criteria are evaluated including: the amount of income or loss in prior years, the existence of deferred tax liabilities that can be used to absorb deferred tax assets, the taxable income in prior carryback years that can be used to absorb net operating losses and credit carry backs, future expected taxable income and prudent and feasible tax planning strategies.
In this process, certain relevant criteria are evaluated including: the amount of income or loss in prior years, the existence of deferred tax 24 Table of Contents liabilities that can be used to absorb deferred tax assets, the taxable income in prior carryback years that can be used to absorb net operating losses and credit carry backs, future expected taxable income and prudent and feasible tax planning strategies.
Examples of such events or changes in circumstances, many of which are subjective in nature, include the following: • Significant negative industry or economic trends; • A significant change in the use of the acquired assets or our strategy; • A significant divestiture or other disposition activity; • A significant decrease in the market value of the asset; • A significant change in legal factors or the business climate that could affect the value of the asset; and • A change in segment by one or more reporting unit Additionally, we make estimates and assumptions regarding the inputs used to perform a quantitative assessment of our goodwill, if necessary.
Examples of such events or changes in circumstances, many of which are subjective in nature, include the following: • Significant negative industry or economic trends; • A significant change in the use of the acquired assets or our strategy; • A significant divestiture or other disposition activity; • A significant decrease in the market value of the asset; • A significant change in legal factors or the business climate that could affect the value of the asset; and • A change in segment by one or more reporting unit Additionally, we make estimates and assumptions regarding the inputs used to perform a quantitative assessment of our goodwill, if necessary, and the Company will perform a discounted cash flow analysis and a market multiple analysis.
Unless otherwise noted, all references herein for the years 2022 and 2021 represent the fiscal years ended December 31, 2022 and 2021, respectively.
Unless otherwise noted, all references herein for the years 2023 and 2022 represent the fiscal years ended December 31, 2023 and 2022, respectively.
However, it is possible that actual results could differ from recorded reserves. For instance, a 10% change in the amount of products considered obsolete would have decreased net earnings by $2.7 million for 2022. A 10% change in the estimated shrinkage rate would not have had a material impact on net earnings for 2022.
However, it is possible that actual results could differ from recorded reserves. For instance, a 10% change in the amount of products considered obsolete would have decreased net earnings by $0.6 million for 2023. A 10% change in the estimated shrinkage rate would not have had a material impact on net earnings for 2023.
Shares repurchased for the year ended December 31, 2022 and 2021 were as follows: Year ended December 31, 2022 2021 Number of shares repurchased 110,404 — Average price per share $ 12.16 $ — Total cost of shares repurchased $ 1,345,540 $ — At the end of each fiscal year, the Board reviews the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which is appropriate.
Shares repurchased for the year ended December 31, 2023 and 2022 were as follows: Year ended December 31, 2023 2022 Number of shares repurchased 143,108 110,404 Average price per share $ 8.97 $ 12.16 Total cost of shares repurchased $ 1,287,416 $ 1,345,540 At the end of each fiscal year, the Board reviews the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which is appropriate.
There is no guarantee as to the exact number of shares that will be repurchased by the Company, and the Company may discontinue purchases at any time that management determines additional purchases are not warranted. As of December 31, 2022, the Company has 679,979 shares of its share repurchase authorization remaining.
There is no guarantee as to the exact number of shares that will be repurchased by the Company, and the Company may discontinue purchases at any time that management determines additional purchases are not warranted. As of December 31, 2023, the Company has 536,871 shares of its share repurchase authorization remaining.
We have provided valuation allowances as of December 31, 2022, aggregating to $1.7 million against certain state and local net operating loss carryforwards and other deferred tax assets. As of December 31, 2022, the Company has no liability for unrecognized income tax benefits.
We have provided valuation allowances as of December 31, 2023, aggregating to $1.6 million, net of federal benefit, against certain state and local net operating loss carryforwards and other deferred tax assets. As of December 31, 2023, the Company has no liability for unrecognized income tax benefits.
Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. EBITDA and Adjusted EBITDA We define "EBITDA" as earnings before interest (including change in fair value of interest rate swap), income taxes, depreciation and amortization.
Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. 17 Table of Contents EBITDA and Adjusted EBITDA We define "EBITDA" as earnings before interest, income taxes, depreciation and amortization.
Sources of Liquidity Funds generated by operating activities supplemented by our available cash and cash equivalents and our credit facilities are our most significant sources of liquidity. As of December 31, 2022, we held $1.4 million of cash and cash equivalents, as well as $37.6 million of remaining available capacity on our revolving line of credit.
Sources of Liquidity Funds generated by operating activities supplemented by our available cash and cash equivalents and our credit facilities are our most significant sources of liquidity. As of December 31, 2023, we held $1.9 million of cash and cash equivalents, as well as $61.8 million of remaining available capacity on our revolving line of credit.
These items include: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, shelf registration costs, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring and severance costs from net income.
These items include: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, shelf registration costs, loss on extinguishment of debt, earn-out adjustments, retention costs and restructuring and severance costs from net (loss) income.
We recognize net tax benefits under the recognition and measurement criteria of FASB ASC Topic 740, Income Taxes, which prescribes requirements and other guidance for financial statement recognition and measurement of positions taken or expected to be taken on tax returns.
We recognize net tax benefits under the recognition and measurement criteria of FASB ASC Topic 740, Income Taxes, which prescribes requirements and other guidance for financial statement recognition and measurement of positions taken or expected to be taken on tax returns. We record interest and penalties, if any, related to uncertain tax positions as a component of income tax expense.
Judgments and uncertainties involved in the estimate We do not believe that our inventories are subject to significant risk of obsolescence in the near term and we have the ability to adjust purchasing practices based on anticipated sales trends and general economic conditions.
Our inventory reserve for estimated shrinkage was $0.5 million as of December 31, 2023. Judgments and uncertainties involved in the estimate We do not believe that our inventories are subject to significant risk of obsolescence in the near term and we have the ability to adjust purchasing practices based on anticipated sales trends and general economic conditions.
Interest expense was $2.7 million and $1.5 million for the full-years of 2022 and 2021, respectively. The increase was primarily driven by higher average debt outstanding and increasing interest rates in 2022 compared to 2021.
Interest expense was $4.2 million and $2.7 million for the full-years of 2023 and 2022, respectively. The increase was primarily driven by higher interest rates in 2023 compared to 2022.
Our existing cash, cash equivalents, and credit facilities balances may fluctuate during 2023. Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, continued effects of the pandemic and other risks detailed in Item 1A - Risk Factors of this report.
Our existing cash, cash equivalents, and credit facilities balances may fluctuate during 2024. Cash from operations could also be affected by various risks and uncertainties detailed in Item 1A - Risk Factors of this report.
Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in Note 1 to the consolidated financial statements included herein.
Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are described in Note 1 to the consolidated financial statements included herein. We believe the following accounting policies affect the most significant estimates and management judgments used in the preparation of the Company's consolidated financial statements.
The Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $7.5 million and (ii) 10% of the revolving credit facility (currently $10.5 million). As of December 31, 2022, the Company was in compliance with all financial debt covenants.
As of December 31, 2023, the Company had $61.8 million of remaining availability under its credit facility. The Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $7.5 million and (ii) 10% of the revolving credit facility (currently $8.0 million).
There are also different valuation models and inputs for each component, the selection of which requires considerable judgment. Our estimates and assumptions may be based, in part, on the availability of listed market prices or other transparent market data.
Fair value determinations involve significant assumptions about highly subjective variables, including future cash flows, discount rates, and expected business performance. There are also different valuation models and inputs for each component, the selection of which requires considerable judgment. Our estimates and assumptions may be based, in part, on the availability of listed market prices or other transparent market data.
The shares will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions. Under the program, the purchases will be funded from available working capital, and the repurchased shares will be returned to the status of authorized, but unissued shares of common stock or held in treasury.
Under the program, the purchases will be funded from available working capital, and the repurchased shares will be returned to the status of authorized, but unissued shares of common stock or held in treasury.
Under this method, the total consideration transferred to consummate the business combination is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the transaction.
Under this method, the total consideration transferred to consummate the business combination is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the transaction. 22 Table of Contents Judgments and uncertainties involved in the estimate The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired, if any, and liabilities assumed.
The market multiple analysis included historical and projected performance, market capitalization, volatility and multiples for industry peers. 23 Table of Contents Effect if actual results differ from assumptions We have not made any material changes in our methodology used to determine whether potential impairment events have occurred or any material changes in the estimates and assumptions used in our quantitative goodwill impairment testing.
Effect if actual results differ from assumptions We have not made any material changes in our methodology used to determine whether potential impairment events have occurred or any material changes in the estimates and assumptions used in our quantitative goodwill impairment testing.
This conflict and the associated sanctions have disrupted the global economy, causing heightened cybersecurity risks, supply chain challenges, higher energy costs, and an exacerbation of existing inflationary pressures.
In February 2022, the United States announced targeted economic sanctions on Russia in response to the military conflict in Ukraine. This conflict and the associated sanctions have disrupted the global economy, causing heightened cybersecurity risks, supply chain challenges, higher energy costs, and an exacerbation of existing inflationary pressures.
See Note 6 in the notes to the consolidated financial statements for additional information on the Company's line of credit. Stock Repurchases and Dividends We may repurchase common stock and pay dividends from time to time pursuant to programs approved by our Board of Directors. The payment of cash dividends is also subject to customary legal and contractual restrictions.
As of December 31, 2023, the Company was in compliance with all financial debt covenants. See Note 6 in the notes to the consolidated financial statements for additional information on the Company's line of credit. Stock Repurchases and Dividends We may repurchase common stock and pay dividends from time to time pursuant to programs approved by our Board of Directors.
Inventory decreased operating cash flows for the year ended December 31, 2022 by approximately $13.8 million compared to a decrease of approximately $18.9 million for 2021, while accounts payable decreased operating cash flows by approximately $10.3 million for the year ended December 31, 2022 compared to an increase of approximately $10.8 million for the year ended December 31, 2021.
Inventory increased operating cash flows for the year ended December 31, 2023 by approximately $12.2 million compared to a decrease of approximately $13.7 million for 2022, while accounts payable increased operating cash flows by approximately $1.6 million for the year ended December 31, 2023 compared to an decrease of approximately $6.3 million for the year ended December 31, 2022.
The increase in net cash used in financing activities for the full-year 2022 compared to net cash provided by financing activities in the full-year 2021 was primarily due to increased borrowings against the Company's asset backed line of credit driven by the acquisition of DanChem in the prior year not in the current year and proceeds received from the Company's Rights Offering in the fourth quarter of 2021 that were not received in 2022. 20 Table of Contents Short-term Debt The Company has a note payable in the amount of $1.0 million with an annual interest rate of 2.77% maturing April 1, 2023, associated with the financing of the Company's insurance premium in the current year.
The increase in net cash used in financing activities for the full-year 2023 compared to the full-year 2022 was primarily due to the repayment of the Company's asset backed line of credit and delayed draw term loan in the fourth quarter of 2023 driven by the sale of substantially all of the assets of SPT. 20 Table of Contents Short-term Debt The Company has a note payable in the amount of $0.9 million with an annual interest rate of 3.70% maturing April 1, 2024, associated with the financing of the Company's insurance premium in the current year.
Reference should be made to Note 13 to the consolidated financial statements included in Item 8 of this Form 10-K. 2022 2021 (in thousands) Amount % Amount % Net sales $ 107,542 100.0 % $ 67,477 100.0 % Cost of goods sold 93,680 87.1 % 57,627 85.4 % Gross profit 13,862 12.9 % 9,850 14.6 % Selling, general and administrative expense 6,891 6.4 % 5,961 8.8 % Asset impairment — — % 233 0.3 % Operating income $ 6,971 6.5 % $ 3,656 5.4 % Comparison of 2022 to 2021 - Corporate Corporate expenses increased $6.2 million to $13.0 million, or 3.1% of sales, in 2022 up from $6.8 million, or 2.0% of sales, in 2021.
Reference should be made to Note 13 to the consolidated financial statements included in Item 8 of this Form 10-K. 2023 2022 (in thousands) Amount % Amount % Net sales $ 83,616 100.0 % $ 107,542 100.0 % Cost of goods sold 77,807 93.1 % 93,680 87.1 % Gross profit 5,809 6.9 % 13,862 12.9 % Selling, general and administrative expense 6,966 8.3 % 6,891 6.4 % Acquisition costs and other 12 — % — — % Goodwill impairment 11,389 13.6 % — — % Operating (loss) income $ (12,558) (15.0) % $ 6,971 6.5 % Comparison of 2023 to 2022 - Corporate Corporate expenses decreased $1.1 million to $12.9 million in 2023 down from $13.9 million in 2022.
The Company performed a discounted cash flow analysis and a market multiple analysis. The discounted cash flow analysis included management assumptions for expected sales growth, capital expenditures and overall operational forecasts.
The discounted cash flow analysis included management assumptions for expected sales growth, capital expenditures and overall operational forecasts while the market multiple analysis included historical and projected performance, market capitalization, volatility and multiples for industry peers.
Our capital allocation strategy is to first fund operations and investments in growth and then return excess cash over time to shareholders through share repurchases and dividends. On December 20, 2022, the Board of Directors re-authorized the Company's share repurchase program.
The payment of cash dividends is also subject to customary legal and contractual restrictions. Our capital allocation strategy is to first fund operations and investments in growth and then return excess cash over time to shareholders through share repurchases and dividends.
Inventory Description Inventory is stated at the lower of cost or net realizable value. Cost is determined by either specific identification or weighted average methods. At the end of each quarter, all facilities review recent sales reports to identify sales price trends that would indicate products or product lines that are being sold below our cost.
At the end of each quarter, all facilities review recent sales reports to identify sales price trends that would indicate products or product lines that are being sold below our cost. This would indicate that an adjustment would be required.
The full-year increase resulted primarily from decreases in allocated costs in the current year over the prior year, increases in professional fees related to accounting, tax and other advisory related costs, share-based payment expense partially offset by decreases in salaries, wages and benefits and incentive bonus due to lower attainment of performance goals.
The full-year decrease resulted primarily from decreases in salaries, wages and benefit, stock-based compensation, incentive bonuses due to lower attainment of performance goals, as well as decreases in other corporate overhead. The decreases were partially offset by increases in professional fees related to accounting, tax and other advisory related costs, taxes and licenses and insurance expenses.
We record interest and penalties, if any, related to uncertain tax positions as a component of income tax expense. 24 Table of Contents Judgments and uncertainties involved in the estimate We assess on a tax jurisdictional basis the likelihood that our deferred tax assets can be recovered.
Judgments and uncertainties involved in the estimate We assess on a tax jurisdictional basis the likelihood that our deferred tax assets can be recovered.
See Note 7 for further detail of our lease obligations and the timing of expected future payments. The Company has no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on the Company's financial position, revenues, results of operations, liquidity, or capital expenditures.
The Company has no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on the Company's financial position, revenues, results of operations, liquidity, or capital expenditures. We expect capital spending in fiscal 2024 to be as much as $6.5 million.
Results of Operations Comparison of 2022 to 2021 – Consolidated Consolidated net sales for the full-year 2022 increased $79.4 million, or 23.7%, over the full-year 2021 to $414.1 million. The increase in net sales was primarily driven by a 42.2% increase in average price partially offset by a 14.0% decrease in pounds shipped.
Results of Operations Comparison of 2023 to 2022 – Consolidated Consolidated net sales for the full-year 2023 decreased $68.8 million, or 26.3%, over the full-year 2022 to $193.2 million. The decrease in net sales was primarily driven by a 8.5% decrease in average price coupled with a 18.7% decrease in pounds shipped.
See Note 6 for further detail of our debt and the timing of expected future payments. • Operating and Finance Leases - The Company enters into various lease agreements for real estate and manufacturing equipment used in the normal course of business. Operating and finance lease obligations were $33.5 million, with $1.3 million payable within 12 months.
Operating and finance lease obligations were $32.5 million, with $1.4 million payable within 12 months. See Note 7 for further detail of our lease obligations and the timing of expected future payments.
The increase in inventory is primarily due to product cost and freight inflation over the prior year, partially offset by slightly higher inventory turns year-over-year while the decrease in accounts payable is primarily driven by a decrease in days payables outstanding.
The increase in operating cash flows from inventory is primarily due to lower inventory turns year over year while the increase in accounts payable is primarily driven by a slight increase in days payables outstanding.
Accounts receivable increased operating cash flow by approximately $4.0 million compared to a decrease of $16.2 million driven by higher sales in the current year partially offset by slightly lower days sales outstanding. Investing Activities Net cash used in investing activities primarily consists of transactions related to capital expenditures, proceeds from the disposal of property, plant and equipment and acquisitions.
Accounts receivable increased operating cash flow by approximately $6.8 million compared to a decrease of $0.3 million driven by lower sales in the current year partially offset by slightly higher days sales outstanding.
The decrease in cash used in investing activities for the full-year 2022 compared to cash used in investing activities for the full-year 2021 was primarily driven by an increase in cash outflows related to the DanChem acquisition in the prior year not in the current year partially offset by an increase in capital expenditures in the current year over the prior year.
The decrease in cash used in investing activities for the full-year 2023 compared to cash used in investing activities for the full-year 2022 was primarily driven by a decrease in capital expenditures in the current year over the prior year. Financing Activities Net cash used in financing activities primarily consist of transactions related to our long-term debt.
During 2022, our reserve increased approximately $2.4 million to $3.5 million as of December 31, 2022. We also record an inventory reserve for the estimated shrinkage (quantity losses) between physical inventories. This reserve is based upon the most recent physical inventory results.
We also record an inventory reserve for the estimated shrinkage (quantity losses) between physical inventories. This reserve is based upon the most recent physical inventory results. During 2023, the inventory shrink reserve had a $0.4 million increase in response to estimated shrinkage rates based on results from previous physical inventories.
Cash Flows Cash flows were as follows: Year ended December 31, (in thousands) 2022 2021 Total cash provided by (used in): Operating activities 5,577 19,055 Investing activities (4,975) (32,661) Financing activities (1,182) 15,391 Net (decrease) increase in cash and cash equivalents $ (580) $ 1,785 Operating Activities The decrease in cash provided by operating activities for the year ended December 31, 2022 compared to cash provided by operating activities in the year ended December 31, 2021 was primarily driven by changes in working capital.
Cash Flows Cash flows from continuing operations were as follows: Year ended December 31, (in thousands) 2023 2022 Total cash provided by (used in): Operating activities 6,644 (5,262) Investing activities (2,885) (3,295) Financing activities (73,169) (374) Net decrease in cash and cash equivalents $ (69,410) $ (8,931) Operating Activities The increase in cash provided by operating activities for the year ended December 31, 2023 compared to cash used in operating activities in the year ended December 31, 2022 was primarily driven by changes in working capital.
The ongoing factors driving volatility in global markets that could impact our business' earnings and cash flows include, but are not limited to, the factors discussed above, the purchasing of commodities and relative commodity prices.
The ongoing factors driving volatility in global markets that could impact our business' earnings and cash flows include, but are not limited to, the misalignment of supply and demand for labor, energy, raw materials and other inputs, the inflation of (or unavailability of) raw material inputs and transportation and logistics services, currency fluctuations, rising interest rates and extreme weather, the purchasing of commodities and relative commodity prices.
Reference should be made to Note 13 to the consolidated financial statements included in Item 8 of this Form 10-K. 2022 2021 (in thousands) Amount % Amount % Net sales $ 306,605 100.0 % $ 267,238 100.0 % Cost of goods sold 263,521 85.9 % 215,841 80.8 % Gross profit 43,084 14.1 % 51,397 19.2 % Selling, general and administrative expense 15,477 5.0 % 17,836 6.6 % Operating income $ 27,607 9.0 % $ 33,561 12.6 % Comparison of 2022 to 2021 – Specialty Chemicals Net sales for the Specialty Chemicals segment increased 59.4%, or $40.1 million, to $107.5 million for 2022 compared to $67.5 million in 2021.
Reference should be made to Note 13 to the consolidated financial statements included in Item 8 of this Form 10-K. 2023 2022 (in thousands) Amount % Amount % Net sales $ 109,513 100.0 % $ 154,040 100.0 % Cost of goods sold 113,187 103.4 % 123,726 80.3 % Gross profit (3,674) (3.4) % 30,314 19.7 % Selling, general and administrative expense 7,536 6.9 % 8,132 5.3 % Operating (loss) income $ (11,210) (10.2) % $ 22,182 14.4 % Comparison of 2023 to 2022 – Specialty Chemicals Net sales for the Specialty Chemicals segment decreased 22.2%, or $23.9 million, to $83.6 million for 2023 compared to $107.5 million in 2022.
The full-year increases were partially offset by: • Decreases in incentive bonus expense primarily driven by lower attainment of performance goals in the current year over the prior year; and, • Decreases in taxes and licenses in the current year compared to the prior year.
The changes in SG&A expense were primarily driven by: • decrease in incentive bonus driven by lower attainment of performance goals in the current year over the prior year; • decrease in repair and maintenance expenses; and, 15 Table of Contents • decreases in other expenses primarily driven by decreases in salaries, wages and benefits, share-based compensation, amortization expense, bad debt expense and utilities The full-year decreases were partially offset by: • Increases in professional fees; and, • Increases and taxes and licenses.
SG&A expense increased $0.9 million or 15.6%, to $6.9 million in 2022 when compared to 2021. Excluding DanChem, SG&A expense decreased $3.2 million, or 62.1% compared to 2021. SG&A as a percentage of sales decreased to 6.5% in 2022 from 8.8% in 2021.
SG&A expense decreased $0.6 million, or 7.3%, for the full-year 2023 when compared to 2022. SG&A as a percentage of sales was 6.9% of sales for 2023 and 5.3% of sales for 2022.
The Company continues efforts to offset these inflationary pressures and continues to take action to improve working capital and evaluate other opportunities to maintain and improve financial performance in the short and long term. In February 2022, the United States announced targeted economic sanctions on Russia in response to the military conflict in Ukraine.
The Company continues efforts to offset these inflationary pressures and continues to take action to improve working capital and evaluate other opportunities to maintain and improve financial performance in the short and long term, however, if these inflationary and demand pressures continue, our revenue, gross and operating margins and net income will be impacted in 2024.
Excluding DanChem, net sales increased $52.8 million, or 16.1%, to $381.9 million driven by a 44.0% increase in average selling price partially offset by a 18.9% decrease in pounds shipped. Full-year 2022 consolidated gross profit decreased 7.0% to $56.5 million, or 13.7% of sales, compared to $60.8 million, or 18.2% of sales, in the full-year 2021.
Full-year 2023 consolidated gross profit decreased 96.5% to $1.5 million, or 0.8% of sales, compared to $43.3 million, or 16.5% of sales, in the full-year 2022. The decrease in dollars and percentage of sales for the full-year 2023 were attributable to the decrease in pounds shipped and average selling price.
We believe the following accounting policies affect the most significant estimates and management judgments used in the preparation of the Company's consolidated financial statements. 22 Table of Contents Business Combinations Description Business combinations are accounted for using the acquisition method of accounting in accordance with GAAP.
Business Combinations Description Business combinations are accounted for using the acquisition method of accounting in accordance with GAAP.
Operating income increased to $7.0 million for the full-year 2022 compared to operating income of $3.6 million for the full-year 2021. The increase in operating income was primarily driven by the aforementioned increases in average selling prices partially offset increases in SG&A expense. 16 Table of Contents The following tables summarize operating results for the two years indicated.
The increase in operating loss was primarily driven by aforementioned decreases in pounds shipped and lower selling price 16 Table of Contents The following tables summarize operating results for the two years indicated.
The changes in SG&A expense were primarily driven by increases in amortization expense related to DanChem acquisition related intangibles and incentive bonuses due to higher attainment of performance goals. The increases were partially offset by lower allocated costs in the current year compared to the prior year and decreases in salaries, wages and benefits.
The changes in SG&A expense were primarily driven by increases in salaries, wages and benefits and professional fees partially offset by lower incentive bonus and amortization expense. Operating loss for the full-year 2023 totaled $12.6 million compared to operating income of $7.0 million for the full-year 2022.
The increase in net sales was primarily driven by a 52.2% increase in average selling prices partially offset by a 3.1% decrease in pounds shipped. Excluding DanChem, net sales increased $13.5 million, or 21.8%, to $75.2 million driven by a 45.2% increase in average selling prices partially offset by a 16.3% decrease in pounds shipped.
The decrease in net sales was primarily driven by a 17.3% decrease in pounds shipped and a 4.3% decrease in average selling prices. SG&A expense increased by $0.1 million, or 1.1%, to $7.0 million in 2023 compared to $6.9 million in 2022. SG&A as a percentage of sales increased to 8.3% in 2023 from 6.4% in 2022.
The decrease in dollars and percentage of sales for the full-year 2022 were attributable to increasing raw material and freight costs. Consolidated selling, general and administrative expense (SG&A) for the full-year 2022 increased by $4.8 million to $35.0 million compared to $30.1 million for the full-year 2021.
Consolidated selling, general and administrative expense (SG&A) for the full-year 2023 decreased $0.9 million to $26.7 million compared to $27.6 million for the full-year 2022. SG&A as a percentage of sales was 13.8% of sales for 2023 and 10.6% of sales for 2022.
Results of these additional financial measures are as follows: Year ended December 31, 2022 2021 Current ratio 5.1 3.3 Debt to capital 34% 39% Return on average equity 18.0% 21.1% Material Cash Requirements from Contractual and Other Obligations As of December 31, 2022, our material cash requirements for our known contractual and other obligations were as follows: • Debt Obligations and Interest Payments - Outstanding obligations on our revolving credit facility and term loan were $67.4 million and $4.1 million, respectively, with $2.5 million payable within 12 months.
Results of these additional financial measures are as follows: Year ended December 31, 2023 2022 Current ratio 3.7 4.6 Debt to capital —% 49% Return on average equity (38.6)% 29.7% Material Cash Requirements from Contractual and Other Obligations As of December 31, 2023, our material cash requirements for our known contractual and other obligations were as follows: • Operating and Finance Leases - The Company enters into various lease agreements for real estate and manufacturing equipment used in the normal course of business.
Full-year 2022 results include $32.3 million in net sales and $0.1 million in operating income attributable to the operations acquired in the fourth quarter of 2021. During the year, we also repurchased 110,404 shares for $1.3 million through our share repurchase program as part of our continued efforts to create sustainable value for our shareholders.
During the year, we also repurchased 143,108 shares for $1.3 million through our share repurchase program as part of our continued efforts to create sustainable value for our shareholders. Munhall Closure During the second quarter of 2023, the Board of Directors of the Company made the decision to permanently cease operations at Munhall effective on or around August 31, 2023.
The previous share repurchase program had a term of 24 months and was set to expire on February 17, 2023. The share repurchase program allows for repurchase of up to 790,383 shares of the Company's outstanding common stock and extends to February 17, 2025.
The share repurchase program allows for repurchase of up to 790,383 shares of the Company's outstanding common stock and expires on February 17, 2025. The shares will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions.
The full-year decreases were partially offset by increases in travel and bad debt expenses. Operating income decreased to $27.6 million for the full-year 2022 compared to operating income of $33.6 million for the full-year 2021. The operating income decrease for the full-year 2022 was primarily driven by increased raw material and freight costs.
The changes in SG&A expense were primarily driven by decreases in salaries, wages and benefits and lower travel expense partially offset by increases in taxes and licenses expense. Operating loss for the full-year 2023 totaled $11.2 million compared to operating income of $22.2 million for the full-year 2022.
Excluding the DanChem acquisition, consolidated net income increased to $22.0 million and diluted earnings per share increased to $2.11 per share. For 2022, cash flows from operating activities were $5.6 million, with $5.8 million used for capital expenditures. Fiscal 2022 represented a year of solid financial performance for the Company with continued execution of our strategy and transformation efforts.
Diluted loss per share increased to $3.37 for the full-year 2023 compared to diluted earnings per share of $1.69 for the full-year 2022. For 2023, cash flows from operating activities were $6.6 million, with $2.9 million used for capital expenditures.
This discussion and analysis is presented in five sections: • Executive Overview • Results of Operations and Non-GAAP Financial Measures • Liquidity and Capital Resources • Material Cash Requirements from Contractual and Other Obligations • Critical Accounting Policies and Estimates Executive Overview Name Change On August 5, 2022, we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to our Certificate of Incorporation to change our corporate name from Synalloy Corporation to Ascent Industries Co., effective August 10, 2022 .
This discussion and analysis is presented in five sections: • Executive Overview • Results of Operations and Non-GAAP Financial Measures • Liquidity and Capital Resources • Material Cash Requirements from Contractual and Other Obligations • Critical Accounting Policies and Estimates Executive Overview There have been a number of strategic changes that have occurred throughout 2023, including the permanent cessation of operations and closure of the Munhall facility and the sale of substantially all of assets of Specialty Pipe & Tube, Inc.
The operating income decrease for the full-year 2022 was primarily driven by aforementioned increasing raw material and freight costs and increased SG&A expenses. 15 Table of Contents Comparison of 2022 to 2021 - Tubular Products Net sales for the Tubular Products segment totaled $306.6 million for the full year of 2022, an increase of 14.7% compared to the full-year 2021.
Comparison of 2023 to 2022 - Tubular Products Net sales for the Tubular Products segment totaled $109.5 million for the full year of 2023, a decrease of 28.9% compared to the full-year 2022. The decrease in net sales was primarily driven by a 21.4% decrease in pounds shipped and a 9.2% decrease in average selling price.
As part of these efforts, during the fourth quarter of 2022, the Company began a strategic reassessment of certain operations to drive an increased focus on its core operations and to continue to improve overall performance and operating profitability.
This strategic decision is part of the Company’s ongoing efforts to consolidate manufacturing to drive an increased focus on its core operations and to improve profitability while driving operational efficiencies.
Consolidated operating income for the full-year 2022 totaled $20.4 million compared to operating income of $27.3 million for the full-year 2021.
Consolidated operating loss for the full-year 2023 totaled $37.4 million compared to operating income of $14.5 million for the full-year 2022. The operating loss increase for the full-year 2023 was primarily driven by aforementioned decrease in pounds shipped and average selling price.
As of December 31, 2022, the outstanding balance was $0.4 million. Long-term Debt The Company and its subsidiaries have a Credit Agreement with BMO providing the Company with a four-year revolving credit facility, maturing on January 15, 2025, and providing the Company with up to $150.0 million of borrowing capacity.
As of December 31, 2023, the outstanding balance was $0.4 million. Long-term Debt During the fourth quarter of 2023, the Company entered into a Limited Consent, Second Amendment to Credit Agreement and Omnibus Amendment to Loan Documents with BMO Bank N.A. and the other lenders under the Company’s credit facility (the “Credit Facility Amendment”).
This would indicate that an adjustment would be required. We record an obsolete inventory reserve for identified finished goods with no sales activity and raw materials with no usage. This reserve is based on our current knowledge with respect to inventory levels, sales trends and historical experience.
We record an obsolete inventory reserve for identified aged inventory items with slow or no sales activity for finished goods or slow or no usage for raw materials for a certain period of time.
Removed
The rebrand to Ascent represents our commitment to unlocking the potential of our industrial manufacturing portfolio and embodies the considerable progress that we have made and our growth prospects into the future.
Added
("SPT"), which are discussed below. These strategic changes have been implemented to allow the Company to focus on core competencies that drive growth and long-term value creation for our shareholders. As a result of these decisions, Munhall and SPT results have been reclassified from the Tubular Products segment and are reflected as discontinued operations in all periods presented.
Removed
Macroeconomic Events Economic activity continues to be impacted by ongoing factors driving volatility in global markets including the misalignment of supply and demand for labor, transportation and logistic services, energy, raw materials and other inputs, the inflation of (or unavailability of) raw material inputs and transportation and logistics services, currency fluctuations, rising interest rates, extreme weather and the evolution of the novel coronavirus disease ("COVID-19").
Added
The discussion and analysis of our results of operations refers to continuing operations only unless noted. Consolidated net sales decreased 26.3%, or $68.8 million, compared to 2022 driven by decreases in average selling price and pounds shipped. Consolidated net loss increased to $34.2 million in 2023, compared to net income of $17.6 million in 2022.
Removed
The Inflation Reduction Act of 2022 was signed into law during the third quarter of 2022 and included provisions for an alternative minimum tax and a one percent excise tax on share repurchases.
Added
As a result of this decision, the Company incurred asset impairment charges of $8.8 million related to the write down of inventory to net realizable value and the impairment of long-lived assets as well as $2.8 million in increased reserves on accounts receivable and other current assets at the facility during the year ended December 31, 2023.
Removed
We anticipate being subject to the excise tax beginning in 2023 and continue to evaluate other provisions of the Inflation Reduction Act for their impact on our business.
Added
Divestiture of Specialty Pipe & Tube, Inc. On December 22, 2023, the Company and its wholly-owned subsidiary Specialty Pipe & Tube, Inc. (“SPT”) entered into an Asset Purchase Agreement pursuant to which Ascent and SPT sold substantially all of the assets primarily related to SPT to Specialty Pipe & Tube Operations, LLC, a Delaware limited liability company.
Removed
Fiscal 2022 Highlights Consolidated net sales increased 23.7%, or $79.4 million, compared to 2021 driven by increases in average selling price and the Company's acquisition of DanChem in the fourth quarter of 2021, partially offset by a decrease in pounds shipped. Excluding the DanChem acquisition, net sales increased 16.1%, or $52.8 million, over 2021.
Added
The consideration for the transaction was approximately $55 million of cash proceeds subject to certain closing adjustments. The transaction closed on December 22, 2023.
Removed
Consolidated net income increased to $22.1 million in 2022, compared to net income of $20.2 million in 2021. Earnings per share decreased to $2.12 diluted earnings per share for the full-year 2022 compared to $2.14 diluted earnings per share in 14 Table of Contents 2021.
Added
The sale of SPT is a tremendous value-creating outcome for Ascent shareholders while greatly reducing the complexity associated with our tubular operations and allowing our tubular leadership and operational teams to focus on core competencies that best position the Company for long-term growth.
Removed
Both of our segments contributed to the success of the Company in 2022, delivering solid financial results along with quality and reliability for our customers.
Added
The transaction also provided the Company the ability to significantly reduce its debt, while providing additional available capital to pursue growth opportunities within our focused businesses.
Removed
During the year we continued to make progress on our transformation efforts and strategic priorities by investing in upgrades and new equipment at our facilities to further enhance and improve manufacturing processes, continued to focus on operational efficiencies within our facilities and continued efforts to maximize our working capital use.
Added
The Company recognized a pre-tax gain on the sale of the SPT assets of $26.3 million. 14 Table of Contents Goodwill Impairment Review During the third quarter of 2023, as described in Note 1 - Summary of Significant Accounting Policies , we tested our goodwill for impairment.

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