Orion reported first-quarter 2026 net sales of $460 million, down 4% year over year, as lower pricing tied to oil-driven pass-through effects and an adverse product mix outweighed gains from higher volumes and foreign currency tailwinds.

 

The decline reflected an 11% drop in pricing and a 1% unfavorable mix, partially offset by 2% volume growth and 6% favorable FX impact. 

 

Performance improved as the quarter progressed, after a slow start in January and February, which the company linked to winter weather disruptions affecting Rubber segment customers. Demand strengthened sharply in March across both segments, led by Specialty.

 

Orion posted a net loss of $10 million and Adjusted EBITDA of $46 million for the quarter. Operating cash use totaled $12 million, while free cash flow was negative $48 million, reflecting typical first-quarter working capital seasonality.

 

“We are pleased with our first quarter results, including Adjusted EBITDA of $46 million which was ahead of internal expectations. This was despite Rubber segment volumes which reflected continued sluggish Western Hemisphere tire build rates to start the year. 

 

"The dynamic backdrop resulting from the Middle East conflict is a test of Orion’s agility, and I am proud of our team’s responsiveness – executing price increases and surcharges, flexing our supply chain to meet higher demand, and judiciously managing inventories,” stated Corning Painter, Chief Executive Officer.

 

Painter highlighted the company’s resilience amid geopolitical and energy market volatility, adding: “Despite uncertainties associated with the conflict, including its impact on energy prices and the global economy, our business’s resilience and asset footprint have enabled us to support customers during these dynamic times,” continued Painter. 

 

“Orion’s products are essential, we are competitively positioned, and our customer relationships are enduring. Our healthy order book underscores the value of Orion’s local supply network.”

 

Chief Financial Officer Jon Puckett pointed to working capital pressures tied to rising oil prices, noting: “In addition to normal first quarter seasonality, we experienced incremental working capital headwinds during the month of March due to higher crude oil prices,” added Jon Puckett, Chief Financial Officer. 

 

“Contrary to the upward bias in EBITDA, working capital is pressured during periods of higher oil prices. Oil price volatility affects the timing of cash conversion but does not alter the long-term cash generation fundamentals of the business. Accordingly, we are amplifying efforts to mitigate the effects on working capital. Generating positive cash flow remains our number one financial priority,” continued Puckett.

 

Segment performance diverged sharply. Specialty sales rose 6% to $170 million, driven by higher volumes, favorable mix, and currency gains, while Adjusted EBITDA increased 7%. Demand accelerated late in the quarter as supply chain uncertainty pushed customers to secure local supply, with growth led by the Americas and EMEA.

 

Rubber Carbon Black faced softer conditions, particularly in North America, where tire build rates remained weak due to weather and lingering inventory overhang from prior import trends. Segment sales fell 9% year over year, driven by lower pricing and adverse mix, partially offset by modest volume growth and currency gains.

 

Despite pressure in Rubber, Orion emphasized improving demand trends and operational discipline across the business, including cost actions, working capital optimization, and targeted pricing initiatives.

 

Cash flow remained seasonally weak, with $54 million in working capital use and $36 million in capital expenditures, resulting in free cash outflow of $48 million. Net debt stood at $965 million, with leverage at 4.2x trailing twelve-month Adjusted EBITDA.

 

Looking ahead, Orion raised its full-year outlook. "The earnings resilience of our business is enhanced during periods of higher oil prices. This characteristic, coupled with our strong order trends, gives us confidence to increase our 2026 Adjusted EBITDA guidance range, which is now $170 to $210 million, up from $160 to $200 million. We do contemplate some moderation in both oil prices and demand in the second half of 2026,” Painter concluded.