Trinseo — Second Quarter 2026 Earnings Summary

Financial Performance

• Net sales reached $845 million, an 8% increase year-over-year from $784 million in Q2 2025, driven by higher prices and favorable currency impacts, partially offset by lower volumes.
• Net loss was $120 million ($3.27 per diluted share), compared to a net loss of $106 million ($2.95 per diluted share) in the prior year; the current quarter included $89 million of pre-tax charges.
• Adjusted EBITDA was $81 million, an increase of $39 million year-over-year from $42 million, attributed to margin improvements and asset restructuring savings.
• Adjusted Net Loss was $27 million ($0.74 per diluted share), improving from $76 million ($2.12 per diluted share) in the prior year.
• Cash used in operating activities was $115 million, compared to $7 million provided in the prior year.
• Free Cash Flow was negative $125 million, compared to negative $3 million in the prior year, impacted by $85 million in debt/restructuring fees and an $80 million working capital increase due to raw material volatility.
• Ending cash balance was $198 million (including $17 million restricted), with total liquidity of $187 million.
• Long-term debt decreased to $1.9 million from $2,332.5 million as of December 31, 2025, with $2,562.3 million classified as liabilities subject to compromise.

Guidance and Future Outlook

• The Company is advancing its debt restructuring process supported by court-approved debtor-in-possession (DIP) financing to strengthen the balance sheet and enhance long-term financial flexibility.
• Management aims to complete the restructuring and emerge with an improved foundation to drive innovation and execute its long-term strategy.
• The Company intends to continue operating in the ordinary course and meeting all obligations to employees, suppliers, and customers during the restructuring.

Business Segments and Product Lines

• Engineered Materials: Net sales of $292 million decreased 1% year-over-year due to lower MMA volumes from the closure of virgin MMA facilities in Italy; Adjusted EBITDA increased $12 million to $43 million due to strategic product mix improvements and lower fixed costs.
• Latex Binders: Net sales of $248 million increased 21% year-over-year driven by higher prices and volumes in paper, board, and textile applications in Asia and North America; Adjusted EBITDA was $16 million, $1 million below the prior year due to weakness in European paper & board/textile applications.
• Polymer Solutions: Net sales of $306 million increased 7% year-over-year from higher prices, partially offset by lower polystyrene volumes caused by a force majeure at the Tessenderlo site (March to May); Adjusted EBITDA increased $38 million to $43 million due to margin improvements.
• Americas Styrenics: Adjusted EBITDA was $1 million, $7 million below the prior year, due to higher raw material costs (benzene) and soft end market demand; the sale process for this joint venture was restarted during the quarter.

Market and Competitive Landscape

• Market conditions were characterized by volatile raw material costs and persistent consumer uncertainty amidst geopolitical tensions.
• Volume declines were specifically attributed to the closure of virgin MMA production facilities in Italy and a force majeure event at the polystyrene plant in Tessenderlo caused by storm damage.
• Latex Binders volume in CASE and battery applications increased 3% despite a muted market environment.

Risks and Challenges

• The Company is subject to risks associated with its Chapter 11 proceedings, including the ability to obtain approval of the reorganization plan, consummate the plan, and emerge from bankruptcy within expected timelines.
• Significant indebtedness and liquidity challenges remain, with potential impacts from professional costs, litigation outcomes, and the ability to service or refinance debt.
• Operational risks include disruptions at chemical manufacturing facilities, supply of raw materials, and energy costs.
• The sale of the Americas Styrenics interest faces risks regarding negotiation of definitive agreements and regulatory filings.

Management Commentary and Tone

• Frank Bozich, President and CEO, noted that the team remained focused on strategic product growth and customer service despite volatile market conditions.
• Management expressed encouragement regarding progress in the balance sheet restructuring process supported by DIP financing.
• The tone indicates a focus on executing the financial restructuring to emerge with a stronger balance sheet and enhanced financial flexibility.

Other Key Points

• The Company commenced and continued to advance its debt restructuring process, supported by court-approved DIP financing.
• The sale process for Americas Styrenics was restarted with its joint venture partner.
• The Company reported a net sales figure of approximately $3.0 billion for the full year 2025.
• The balance sheet reflects a significant shift in debt classification, with long-term debt dropping to $1.9 million and liabilities subject to compromise rising to $2,562.3 million by June 30, 2026.