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)

9 Months Ended

Sep. 30, 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 September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Sales:
Refining Services	$	107,604	$	118,335	$	298,727	$	341,469
Catalysts(1)	23,071		25,612		73,143		62,335
Performance Materials	104,574		115,134		274,346		295,095
Performance Chemicals	148,513		167,949		465,433		526,239
Eliminations(2)	(3,443)		(3,229)		(10,207)		(10,441)
Total	$	380,319	$	423,801	$	1,101,442	$	1,214,697

Segment Adjusted EBITDA:(3)
Refining Services	$	44,272	$	51,166	$	116,451	$	133,721
Catalysts(4)	11,762		31,638		59,741		79,372
Performance Materials	25,334		25,769		66,148		65,505
Performance Chemicals	33,919		36,804		108,403		120,642
Total Segment Adjusted EBITDA(5)	$	115,287	$	145,377	$	350,743	$	399,240

(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 11 to these condensed consolidated financial statements for further information). The proportionate share of sales is $26,552 and $54,414 for the three months ended September 30, 2020 and 2019, respectively. The proportionate share of sales is $99,695 and $123,106 for the nine months ended September 30, 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 $5,331 for the three months ended September 30, 2020, which includes $76 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,597 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $22,628 for the three months ended September 30, 2019, which includes $17,248 of equity in net income plus $1,658 of amortization of investment in affiliate step-up and $3,722 of joint venture depreciation, amortization and interest.

The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $35,911 for the nine months ended September 30, 2020, which includes $19,882 of equity in net income plus $4,975 of amortization of investment in affiliate step-up and $11,054 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalysts segment is $48,621 for the nine months ended September 30, 2019, which includes $31,548 of equity in net income plus $5,875 of amortization of investment in affiliate step-up and $11,198 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 September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Reconciliation of net income attributable to PQ Group Holdings Inc. to Segment Adjusted EBITDA
Net income attributable to PQ Group Holdings Inc.	$	7,512	$	26,713	$	23,662	$	60,438
Provision for income taxes	11,764		16,718		29,453		39,472
Interest expense, net	18,642		27,697		65,372		84,855
Depreciation and amortization	45,820		44,246		136,313		135,230
Segment EBITDA	83,738		115,374		254,800		319,995
Joint venture depreciation, amortization and interest	3,597		3,722		11,054		11,198
Amortization of investment in affiliate step-up	1,659		1,658		4,975		5,875

Debt extinguishment costs	14,004		1,767		16,517		1,767
Net (gain) loss on asset disposals	(4,453)		1,136		3,948		(7,697)
Foreign currency exchange (gain) loss	(4,583)		4,457		(2,100)		5,380
LIFO expense	(751)		534		(2,549)		10,814

Transaction and other related costs	3,276		670		6,078		1,725
Equity-based compensation	6,137		4,806		18,423		13,576
Restructuring, integration and business optimization expenses	4,595		717		10,215		1,436
Defined benefit pension plan (benefit) cost	378		834		(122)		2,379
Other	962		2,009		3,500		4,730
Adjusted EBITDA	108,559		137,684		324,739		371,178
Unallocated corporate expenses	6,728		7,693		26,004		28,062
Segment Adjusted EBITDA	$	115,287	$	145,377	$	350,743	$	399,240