Orion S.A. reports lower third quarter sales

Houston, TX – Orion S.A. reported its financial results for the third quarter of 2024, highlighting net sales of $463.4 million, a slight decrease of $2.8 million year over year. The company faced a net loss of $20.2 million, significantly impacted by a $42.5 million loss due to misappropriation of assets. This resulted in a diluted loss per share of ($0.35), with the misappropriation contributing ($0.72) to this figure. However, Adjusted EBITDA increased by 4% to $80.1 million, while Adjusted Diluted EPS slightly decreased to $0.47.

For the first nine months of 2024, Orion’s net sales rose to $1,443.3 million, up $17.6 million year over year. Despite this, net income dropped to $27.0 million, again affected by the $42.5 million loss from asset misappropriation. Diluted EPS for this period was $0.46, down $1.19 year over year. Adjusted EBITDA for the nine months fell by 10% to $240.5 million, and Adjusted Diluted EPS decreased to $1.40.

CEO Corning Painter emphasized the company’s resilience, noting strong third-quarter Adjusted EBITDA despite a 11% drop in Rubber segment volumes. He attributed this to high tire imports into Western markets but expressed optimism for volume growth in 2025 due to strategic adjustments. Painter also highlighted expected operational improvements and productivity initiatives that should bolster future performance.

Painter also mentioned that as growth investments conclude, Orion anticipates stronger free cash flow in 2025 and 2026. The company resumed share repurchases in the third quarter, buying back approximately $11 million of stock. CFO Jeff Glajch added that the $20 million GAAP net loss included $43 million due to fraud, contrasting with a net income of $26 million in the same quarter of 2023.

Glajch noted that the 4% improvement in Adjusted EBITDA was achieved despite lower Rubber segment volumes, thanks to better Specialty segment regional mix and formula-based pricing. He acknowledged the durable nature of Orion’s business and mentioned adjustments to full-year guidance due to macroeconomic signals and customer forecasts.

In the third quarter, Orion’s volume decreased by 20.0 kmt year over year, primarily due to lower volumes in the Americas and APAC regions, partially offset by higher volumes in EMEA. Net sales decreased by $2.8 million, driven by lower volume but partially offset by favorable oil price pass-through effects. Gross profit also decreased by $2.7 million due to higher fixed costs.

The company was targeted by a criminal scheme in the third quarter, resulting in $60.7 million in losses and professional fees. This significantly impacted income from operations, which decreased by $61.0 million year over year. Despite this, Adjusted EBITDA increased by $2.8 million, driven by favorable pricing