Ascent Industries — Third Quarter 2026 Earnings Summary

Financial Performance

• Net sales increased 37.8% year-over-year to $27.1 million in Q3 2026, compared to $19.7 million in Q3 2025; excluding the Midwest acquisition, net sales were $24.9 million.
• Gross profit increased 21.9% year-over-year to $7.1 million ($7.119 million) in Q3 2026, compared to $5.8 million ($5.841 million) in Q3 2025.
• Gross profit margin decreased to 26.2% in Q3 2026 from 29.7% in Q3 2025.
• Net income from continuing operations improved to $1.4 million ($1.402 million) in Q3 2026, compared to a net loss of $0.1 million ($0.125 million) in Q3 2025.
• Diluted earnings per share from continuing operations were $0.15 in Q3 2026, compared to a diluted loss per share of $0.01 in Q3 2025.
• Adjusted EBITDA increased 155.8% year-over-year to $3.5 million ($3.520 million) in Q3 2026, compared to $1.4 million ($1.376 million) in Q3 2025.
• Adjusted EBITDA margin improved to 13.0% in Q3 2026 from 7.0% in Q3 2025.
• For the trailing twelve months ended September 30, 2026, the company reported post-COVID record net sales of $91.0 million and post-COVID record Adjusted EBITDA of $2.9 million.
• Cash and cash equivalents were $28.7 million as of September 30, 2026, down from $57.6 million as of December 31, 2025.
• The company had no debt outstanding under its revolving credit facilities and $21.1 million in availability as of September 30, 2026.
• Year-to-date share repurchases totaled 505,563 shares at an average cost of $13.29 per share, totaling approximately $6.8 million.

Guidance and Future Outlook

• Management expects a greater share of margin improvement to come from better execution, productivity, and a more efficient operating model over time, rather than just pricing.
• The company aims to grow its way out of built-in seasonality associated with its legacy business and make improvements more consistent and durable.
• Capital allocation priorities remain focused on protecting liquidity, improving working capital, and investing in the business, while preserving flexibility for disciplined M&A and opportunistic share repurchases.
• The strategy remains focused on improving portfolio quality, accelerating growth, and translating growth into earnings to deliver higher returns on invested capital.

Business Segments and Product Lines

• The Midwest Graphic Sales acquisition (closed May 4, 2026) contributed $2.3 million in net sales, a $0.7 million net loss, and a $0.2 million Adjusted EBITDA loss in Q3 2026.
• Excluding the Midwest acquisition, Adjusted EBITDA from continuing operations increased to $3.8 million with a margin of 15.1% in Q3 2026.
• Excluding the Midwest acquisition, net income from continuing operations increased to $2.1 million with diluted EPS of $0.23 in Q3 2026.
• The manufacturing transition for the Midwest acquisition remains on schedule.
• Teams are identifying and progressing commercial opportunities beyond the original underwriting case for the Midwest acquisition.

Market and Competitive Landscape

• The company reported growth amid muted market conditions.
• The increase in net sales was driven by increases in volume and average selling prices.
• Gross profit growth was driven by sales increases and cost recovery due to increased production, partially offset by increases in material costs, labor, overhead, and shipping costs.

Risks and Challenges

• Management acknowledges there is additional work ahead to make margin improvements more consistent and durable.
• The business faces built-in seasonality associated with its legacy business.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical results or anticipated outcomes.

Management Commentary and Tone

• CEO J. Bryan Kitchen described the quarter as a "meaningful step forward" and expressed encouragement regarding the progress reflected in the results.
• Management stated that the performance of the Midwest acquisition reinforces confidence in the acquisition and the growth runway ahead.
• The tone is optimistic regarding the strengthening evidence supporting the company's strategy and its ability to deliver long-term value.
• Management noted the receipt of the full $4.55 million escrow holdback from the sale of Bristol Metals assets, strengthening liquidity.

Other Key Points

• The company received the full $4.55 million escrow holdback associated with the sale of certain assets related to Bristol Metals.
• The business generated positive operating cash flow during the quarter, a significant improvement from the cash-use run rate earlier in the year.
• No shares were repurchased under the authorized program during the third quarter.
• Goodwill increased to $4.824 million as of September 30, 2026, compared to zero as of December 31, 2025, reflecting the acquisition.
• Intangible assets increased to $9.424 million as of September 30, 2026, compared to $2.833 million as of December 31, 2025.
• The company held a conference call on November 4, 2026, at 5:00 p.m. Eastern time to discuss results.