Ecovyst, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Reportable Segments (Tables)

Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2020

Reconciliation of Revenue from Reportable Segments to Consolidated

Summarized financial information for the Company’s reportable segments is shown in the following table:


	Three months ended March 31,
	2020		2019
Sales:
Refining Services	$	100,690	$	105,844
Catalysts⁽¹⁾	24,864		15,866
Performance Materials	65,569		61,089
Performance Chemicals	174,279		180,462
Eliminations⁽²⁾	(3,804)		(4,040)
Total	$	361,598	$	359,221

Segment Adjusted EBITDA:⁽³⁾
Refining Services	$	37,183	$	39,731
Catalysts⁽⁴⁾	22,667		18,127
Performance Materials	13,507		10,515
Performance Chemicals	40,474		42,673
Total Segment Adjusted EBITDA⁽⁵⁾	$	113,831	$	111,046

⁽¹⁾Excludes the Company’s proportionate share of sales from the Zeolyst International and Zeolyst C.V. joint ventures (collectively, the “Zeolyst Joint Venture”) accounted for using the equity method (see Note 10 to these condensed consolidated financial statements for further information). The proportionate share of sales is $32,291 and $29,478 for the three months ended March 31, 2020 and 2019, respectively.

⁽²⁾ The Company eliminates intersegment sales when reconciling to the Company’s condensed consolidated statements of income.

⁽³⁾The Company defines Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Management evaluates the performance of its segments and allocates resources based on several factors, of which the primary measure is Adjusted EBITDA. Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the Company’s operating performance. Adjusted EBITDA as defined by the Company may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.

⁽⁴⁾ The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $13,725 for the three months ended March 31, 2020, which includes $8,317 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,750 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $8,357 for the three months ended March 31, 2019, which includes $2,036 of equity in net income plus $2,558 of amortization of investment in affiliate step-up and $3,763 of joint venture depreciation, amortization and interest.

⁽⁵⁾ Total Segment Adjusted EBITDA differs from the Company’s consolidated Adjusted EBITDA due to unallocated corporate expenses.

Reconciliation of Net Income to Segment Adjusted EBITDA

A reconciliation of net income attributable to PQ Group Holdings to Segment Adjusted EBITDA is as follows:


	Three months ended March 31,
	2020		2019
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA
Net income attributable to PQ Group Holdings Inc.	$	224	$	3,151
Provision for income taxes	1,427		2,447
Interest expense, net	24,455		28,618
Depreciation and amortization	45,670		45,894
Segment EBITDA	71,776		80,110
Joint venture depreciation, amortization and interest	3,750		3,763
Amortization of investment in affiliate step-up	1,658		2,558

Debt extinguishment costs	2,513		—
Net loss on asset disposals	9,420		820
Foreign currency exchange (gain) loss	3,337		(2,689)
LIFO expense	(329)		10,158

Transaction and other related costs	2,062		80
Equity-based compensation	5,920		3,400
Restructuring, integration and business optimization expenses	2,030		732
Defined benefit pension plan (benefit) cost	(249)		993
Other	1,256		1,116
Adjusted EBITDA	103,144		101,041
Unallocated corporate expenses	10,687		10,005
Segment Adjusted EBITDA	$	113,831	$	111,046