Orion Engineered Carbons achieves second highest adjusted EBITDA since IPO

Adjusted EBITDA1 of $78.8 million, up $63.6 million.

Global supplier of specialty and high-performance carbon black Orion Engineered Carbons reports net sales of $401.0 million, up $198.4 million, YoY for the second quarter of 2021. The company posts net income of $89.1 million, up $106.9 million, year over year. The company achieved second highest Adjusted EBITDA since IPO. Adjusted EBITDA1 of $78.8 million, up $63.6 million, year over year, the company reports.

During the quarter Orion Engineered Carbons received cash payment of $79.5 million, resolving longstanding dispute with Evonik, substantially bolstering financial position.

"This quarter we delivered Adjusted EBITDA representing the second highest level since our IPO in 2014, four times higher than year ago levels and ten percent higher than the second quarter of 2019. Our outstanding financial performance demonstrates the strong resilience and operating leverage inherent to our business and the agility of our team to capitalize on robust economic conditions during the period. We also substantially bolstered our financial standing during the quarter by successfully settling the longstanding Evonik dispute. Overall, the Orion team remains focused on maximizing long term shareholder value by advancing select growth investments, driving sustainability, executing the remaining EPA installations safely and positioning the company to generate considerable free cash flow in 2023,” said Corning Painter, chief executive officer.

Volumes increased by 93.4 kmt or 59.5%, year over year, with higher demand in both segments, across all applications and geographies, primarily driven by a sharp global recovery from the COVID-19 induced economic downturn.

Net sales increased by $198.4 million, or 97.9%, year over year, driven primarily by higher sales volume, favorable product mix and the impact of passing through higher feedstock costs.

Income from operations increased to $132.5 million, compared to a $12.9 million loss from operations in the prior year, an increase of $145.4 million. The increase was primarily driven by favorable operating leverage associated with substantially higher sales volume, favorable product mix and the Evonik legal settlement related gain, partially offset by higher selling, general and administrative costs.

Net income increased to $89.1 million, compared to a net loss of $17.8 million in the second quarter of the prior year, up $106.9 million. The increase was driven primarily by higher sales volume, and the Evonik legal settlement related gain. Contribution margin increased by $79.3 million to $153.6 million, year over year, primarily due to favorable operating leverage associated with substantially higher sales volume.

Adjusted EBITDA increased by $63.6 million, from $15.2 million to $78.8 million, year over year, primarily due to favorable operating leverage associated with substantially higher sales volume and favorable product mix.