Progress on sale process for Industrial Specialties business and CTO refinery reaching an advanced stage, with an update expected soon.
Ongoing internal review of the entire portfolio focusing on strategic fit and value creation, with a comprehensive investor update planned for late 2025 or early 2026.
Work involves assessing core competencies and financial profiles to determine optimal ownership and growth opportunities, including potential expansion into process purification within Performance Materials.
Significant Growth in AST Driven by Semiconductor and Optical Coatings
AST sales increased over 14%, led by growth in leading-edge precision cleaning solutions, optical coatings, and demand for semiconductor tools.
Segment adjusted EBITDA rose nearly 4%, with margins at 19.6%, impacted by $2.5 million of growth-related operating expenses and $2.8 million foreign exchange headwinds.
Investments in growth initiatives and technology differentiation are expected to support high single to low double-digit revenue growth and EBITDA exceeding 30% over time.
Foreign exchange headwinds are primarily due to weakening of the U.S. dollar, especially in Taiwan, affecting expenses in local currencies.
Management expects continued leverage of growth investments and a resilient supply chain to sustain AST performance in the second half.
Adjusted EBITDA increased 80% to $131.7 million, with a record adjusted EBITDA margin of 16.9%, up 280 basis points from last year.
Capital expenditures totaled $36.7 million for the quarter, with full-year guidance of $130 million to $140 million.
Debt to trailing 12 months EBITDA ratio was 3.17x, with a target to reduce leverage to approximately 2.5x by late fiscal 2026.
Net income was $44 million, with adjusted net income at $45.2 million or $0.81 per diluted share.
Operating cash flow was $83 million, more than doubling from $35 million a year ago, with a strong conversion rate of 80% to 85% of EBITDA to cash flow expected for FY 2025.
Q3 revenue was $779.3 million, up 51% year-over-year, driven 5% by organic growth and 46% by acquisitions.
EPS for Q4 was $2.80, up 5.9% year-over-year and beating guidance by nearly 5%.
Fiscal 2025 achieved record sales, EBITDA, and EPS with full year EPS growth of 4%, exceeding high-end guidance.
Fourth quarter sales increased 5.5% year-over-year, with organic daily sales up 0.2%, reversing prior declines.
Free cash flow reached a record $465 million, up 34% year-over-year, supporting $560 million in capital deployment including acquisitions and share buybacks.
Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in company history.
Net leverage ended at 0.3x EBITDA, slightly higher than prior year but stable.
Reported EBITDA margin declined 73 basis points year-over-year to 12.5%, impacted by higher AR provisioning and LIFO expense.
Service Center segment sales declined 0.4% organically, while Engineered Solutions segment sales grew 1.8% organically.
Dafinchi