Kronos Worldwide, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income for the third quarter of 2026 was $34.8 million ($0.30 per share), compared to a net loss of $37.0 million ($0.32 per share) in the third quarter of 2025.
• Net income for the first nine months of 2026 was $45.2 million ($0.39 per share), compared to a net loss of $28.1 million ($0.24 per share) in the first nine months of 2025.
• Net sales for the third quarter of 2026 were $541.1 million, an 18% increase ($84.2 million) compared to $456.9 million in the third quarter of 2025.
• Net sales for the first nine months of 2026 were $1.6 billion, a 12% increase ($167.9 million) compared to $1.44 billion in the first nine months of 2025.
• Gross margin for the third quarter of 2026 was $127.4 million, compared to $47.0 million in the third quarter of 2025.
• Gross margin for the first nine months of 2026 was $313.5 million, compared to $216.6 million in the first nine months of 2025.
• Income from operations for the third quarter of 2026 was $57.9 million, compared to a loss of $19.2 million in the third quarter of 2025.
• Income from operations for the first nine months of 2026 was $108.1 million, compared to $26.6 million in the first nine months of 2025.
• TiO2 segment profit for the third quarter of 2026 was $61.0 million, compared to a loss of $15.3 million in the third quarter of 2025.
• TiO2 segment profit for the first nine months of 2026 was $117.1 million, compared to $37.2 million in the first nine months of 2025.
• EBITDA for the third quarter of 2026 was $72.7 million, compared to $0.6 million in the third quarter of 2025.
• EBITDA for the first nine months of 2026 was $153.3 million, compared to $74.0 million in the first nine months of 2025.
• Sales volumes increased 14% in the third quarter and 11% in the first nine months of 2026 compared to the prior year periods.
• Production volumes increased 11% in the third quarter (140k tons vs 126k tons) and 2% in the first nine months (403k tons vs 394k tons) compared to the prior year periods.
• Average TiO2 selling prices were 5% higher in the third quarter of 2026 compared to the prior year, but 1% lower for the first nine months of 2026 compared to the prior year.
• Currency exchange rates (primarily the euro) increased net sales by approximately $39 million in the first nine months of 2026 but decreased segment profit by approximately $5 million in the third quarter and $23 million in the first nine months of 2026.
• Net income included a non-cash deferred income tax benefit of $12.1 million ($0.11 per share) related to proposed currency regulations under §987 released in August 2026.
• Net income included a tax expense of $2.0 million ($0.02 per share) to recognize an uncertain tax position related to a German tax audit.
• Net loss in the prior year periods included a non-cash deferred income tax expense of $19.3 million ($0.17 per share) due to German legislation enacted in Q3 2025.
• Net income in the prior year periods included a non-cash pre-tax gain of $4.6 million ($3.6 million net of tax) from the remeasurement of an earn-out liability related to the 2024 acquisition of Louisiana Pigment Company.

Guidance and Future Outlook

• Management expects normal seasonal trends to result in softer fourth quarter demand.
• Production volumes are expected to be lower in the fourth quarter due to the timing of recurring maintenance at several facilities.
• Inventory levels are expected to remain below historical levels.
• Management remains focused on operational performance, cost discipline, and cash generation.

Business Segments and Product Lines

• The company operates as a major international producer of titanium dioxide (TiO2) products.
• Net sales growth was driven by market share gains in European and North American markets, attributed to anti-dumping duties and changing supply conditions.
• The company successfully implemented price increases and surcharges in response to rising operating costs, including energy and distribution costs.
• Cost reduction initiatives implemented in the fourth quarter of 2025 contributed to lower production costs.

Market and Competitive Landscape

• End use demand remains below historical levels.
• The company benefited from anti-dumping duties that remain in effect in certain markets.
• The company faces competition from Chinese suppliers with less stringent regulatory and environmental compliance requirements.

Risks and Challenges

• Risks include future supply and demand fluctuations, inability to realize expected cost savings, and integration of acquisitions.
• Business cyclicality, customer/producer inventory levels, and unexpected industry capacity expansion are cited as risks.
• Dependence on specific market sectors and raw material availability (ore) are potential challenges.
• Global economic and political conditions, including tariffs, natural disasters, and public health crises, could disrupt operations or reduce demand.
• Operating interruptions such as labor disputes, leaks, fires, and technology disruptions (including cyber-attacks) are risks.
• Competition from substitute products and pricing pressure are ongoing concerns.
• Fluctuations in currency exchange rates (USD, euro, Norwegian krone, Canadian dollar) could impact results.
• Risks related to refinancing credit facilities, interest rate changes, and maintaining liquidity are noted.
• Uncertainty regarding tax audits, tax reform, and the utilization of tax attributes poses risks.
• Environmental regulations and potential litigation are identified as potential challenges.

Management Commentary and Tone

• Brian W. Christian, President and CEO, stated that third quarter results reflect continued execution of strategic initiatives despite demand below historical levels.
• Management noted operating results improved compared to the second quarter, supported by progress in operational, commercial, and cost reduction initiatives.
• Management expressed confidence that progress provides a solid foundation moving forward.

Other Key Points

• The press release includes reconciliations of Income from Operations to Segment Profit and Net Income to EBITDA.
• Kronos Worldwide, Inc. is listed on the NYSE under the ticker KRO.
• The company disclosed non-GAAP measures (Segment Profit and EBITDA) to assist investors in assessing TiO2 operations performance.