Ascent Industries — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the third quarter of 2026 were $27.1 million, a 37.8% increase from $19.7 million in the third quarter of 2025; excluding the Midwest acquisition, net sales were $24.9 million.
• Gross profit increased 21.9% to $7.1 million in Q3 2026 from $5.8 million in Q3 2025; gross profit margin was 26.2% compared to 29.7% in the prior year period.
• Net income from continuing operations was $1.4 million in Q3 2026, compared to a net loss of $0.1 million in Q3 2025.
• Diluted earnings per share were $0.15 in Q3 2026, compared to a diluted loss per share of $0.01 in Q3 2025.
• Adjusted EBITDA increased to $3.5 million in Q3 2026 from $1.4 million in Q3 2025, representing a 155.8% increase; Adjusted EBITDA margin was 13.0% compared to 7.0% in the prior year.
• For the trailing twelve months ended September 30, 2026, net sales reached a post-COVID record of $91.0 million and Adjusted EBITDA reached a post-COVID record of $2.9 million.
• Cash and cash equivalents were $28.7 million as of September 30, 2026, with no debt outstanding under revolving credit facilities and $21.1 million in availability.
• Year-to-date share repurchases totaled 505,563 shares at an average cost of $13.29 per share, totaling approximately $6.8 million; no shares were repurchased in the third quarter.

Guidance and Future Outlook:

• Management indicated that while the third quarter showed progress, additional work is required to make growth more consistent and durable, specifically regarding the built-in seasonality of the legacy business.
• The company 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.
• 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 a greater share of growth into earnings to deliver higher returns on invested capital.

Business Segments and Product Lines:

• The acquisition of Midwest Graphic Sales, Inc. and Sigma Coatings, Inc. (Midwest) closed on May 4, 2026, and contributed $2.3 million in net sales, a $0.7 million net loss, and a $0.2 million Adjusted EBITDA loss in the third quarter of 2026.
• Excluding Midwest, Adjusted EBITDA from continuing operations was $3.8 million with a margin of 15.1% in Q3 2026.
• Midwest contributed positively to financial results in its first full quarter as part of Ascent and remained accretive to earnings when excluding corporate allocations.
• The manufacturing transition for Midwest remains on schedule, and teams are identifying commercial opportunities beyond the original underwriting case.
• Net sales growth was driven by increases in volume and average selling prices.

Market and Competitive Landscape:

• The company reported growth amid muted market conditions.
• The performance of the Midwest acquisition reinforces confidence in the growth runway ahead.

Risks and Challenges:

• The company faces built-in seasonality associated with its legacy business that requires management to improve consistency and durability of growth.
• Cost pressures include increases in material costs, labor, overhead, and shipping costs, which partially offset gross profit growth.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical results or anticipated outcomes, as detailed in SEC filings.

Management Commentary and Tone:

• J. Bryan Kitchen, President and CEO, described the third quarter as a "meaningful step forward" and expressed encouragement regarding the progress reflected in the results.
• Management highlighted the receipt of the full $4.55 million escrow holdback from the sale of Bristol Metals assets, strengthening liquidity.
• Management noted that the business generated positive operating cash flow during the quarter, a meaningful improvement from the cash-use run rate earlier in the year.
• The tone was confident, citing evidence that the strategy is strengthening and positioning the company for higher returns on invested capital.

Other Key Points:

• The Company received the full $4.55 million escrow holdback associated with the sale of certain assets related to Bristol Metals.
• Goodwill on the balance sheet increased to $4.824 million as of September 30, 2026, from zero as of December 31, 2025, reflecting the Midwest acquisition.
• Intangible assets increased to $9.424 million as of September 30, 2026, from $2.833 million as of December 31, 2025.
• Accounts receivable increased to $21.09 million as of September 30, 2026, from $10.04 million as of December 31, 2025.
• Inventories increased to $10.927 million as of September 30, 2026, from $8.742 million as of December 31, 2025.
• Total shareholders' equity decreased to $81.319 million as of September 30, 2026, from $86.992 million as of December 31, 2025.
• The company held a conference call on November 4, 2026, to discuss results and answer analyst questions.