ECVT 10-Q Quarterly Report Sept. 30, 2022 | Alphaminr
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ECVT 10-Q Quarter ended Sept. 30, 2022

Balance Sheet
Cash Flow
Income Statement
Debt
ECOVYST INC.
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ecvt-20220930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to
Commission File Number: 001-38221
Ecovyst Inc.
Delaware 81-3406833
(State or other jurisdiction of
incorporation or organization) 		(I.R.S. Employer
Identification No.)
300 Lindenwood Drive
Malvern , Pennsylvania
19355
(Address of principal executive offices) (Zip Code)
(484)
617-1200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading symbol Name of each exchange on which registered
Common stock, par value $0.01 per share ECVT New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No  ☒
The number of shares of common stock outstanding as of October 31, 2022 was 130,253,152 .
1

Ecovyst Inc.

INDEX—FORM 10-Q
September 30, 2022
Page

2

PART I — FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS (UNAUDITED)

ECOVYST INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(unaudited)
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Sales $ 232,533 $ 167,428 $ 637,419 $ 441,004
Cost of goods sold 164,864 113,784 462,156 318,768
Gross profit 67,669 53,644 175,263 122,236
Selling, general and administrative expenses 21,460 24,836 67,779 68,822
Other operating expense, net 7,673 6,314 25,101 16,786
Operating income 38,536 22,494 82,383 36,628
Equity in net (income) from affiliated companies ( 3,169 ) ( 8,758 ) ( 17,422 ) ( 20,723 )
Interest expense, net 9,542 9,005 26,880 28,202
Debt extinguishment costs — 15,185 — 26,902
Other expense (income), net 1,872 ( 218 ) 2,497 3,081
Income (loss) from continuing operations before income taxes and noncontrolling interest 30,291 7,280 70,428 ( 834 )
Provision for income taxes 8,966 2,591 21,983 5,095
Net income (loss) from continuing operations 21,325 4,689 48,445 ( 5,929 )
Net loss from discontinued operations, net of tax — ( 75,872 ) — ( 159,122 )
Net income (loss) 21,325 ( 71,183 ) 48,445 ( 165,051 )
Less: Net income attributable to the noncontrolling interest—discontinued operations — 76 — 333
Net income (loss) attributable to Ecovyst Inc. $ 21,325 $ ( 71,259 ) $ 48,445 $ ( 165,384 )
Income (loss) from continuing operations attributable to Ecovyst Inc. $ 21,325 $ 4,689 $ 48,445 $ ( 5,929 )
Loss from discontinued operations attributable to Ecovyst Inc. — ( 75,948 ) — ( 159,455 )
Net income (loss) attributable to Ecovyst Inc. $ 21,325 $ ( 71,259 ) $ 48,445 $ ( 165,384 )
Net income (loss) per share:
Basic income (loss) per share—continuing operations $ 0.16 $ 0.03 $ 0.36 $ ( 0.04 )
Diluted income (loss) per share—continuing operations $ 0.16 $ 0.03 $ 0.35 $ ( 0.04 )
Basic loss per share—discontinued operations $ — $ ( 0.56 ) $ — $ ( 1.17 )
Diluted loss per share—discontinued operations $ — $ ( 0.55 ) $ — $ ( 1.17 )
Basic income (loss) per share $ 0.16 $ ( 0.52 ) $ 0.36 $ ( 1.22 )
Diluted income (loss) per share $ 0.16 $ ( 0.52 ) $ 0.35 $ ( 1.22 )
Weighted average shares outstanding:
Basic 132,622,105 136,129,591 136,115,598 136,111,555
Diluted 134,096,839 137,354,427 137,666,215 136,111,555
See accompanying notes to condensed consolidated financial statements.

3

ECOVYST INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)

Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Net income (loss) $ 21,325 $ ( 71,183 ) $ 48,445 $ ( 165,051 )
Other comprehensive income (loss), net of tax:
Pension and postretirement benefits ( 962 ) 4,833 ( 1,040 ) 4,748
Net gain from hedging activities 9,141 460 27,620 1,638
Foreign currency translation ( 7,207 ) ( 7,884 ) ( 17,506 ) 418
Total other comprehensive income (loss) 972 ( 2,591 ) 9,074 6,804
Comprehensive income (loss) 22,297 ( 73,774 ) 57,519 ( 158,247 )
Less: Comprehensive income attributable to noncontrolling interests — 740 — 1,056
Comprehensive income (loss) attributable to Ecovyst Inc. $ 22,297 $ ( 74,514 ) $ 57,519 $ ( 159,303 )
See accompanying notes to condensed consolidated financial statements.

4

ECOVYST INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)

September 30,
2022 		December 31,
2021
ASSETS
Cash and cash equivalents $ 121,446 $ 140,889
Accounts receivable, net 106,969 80,802
Inventories, net 49,729 53,813
Prepaid and other current assets 46,070 16,165
Total current assets 324,214 291,669
Investments in affiliated companies 426,663 446,074
Property, plant and equipment, net 581,425 596,231
Goodwill 401,152 406,139
Other intangible assets, net 132,347 145,617
Right-of-use lease assets 29,712 30,115
Other long-term assets 36,282 15,374
Total assets $ 1,931,795 $ 1,931,219
LIABILITIES
Current maturities of long-term debt $ 9,000 $ 9,000
Accounts payable 52,026 51,860
Operating lease liabilities—current 8,576 8,306
Accrued liabilities 65,071 75,915
Total current liabilities 134,673 145,081
Long-term debt, excluding current portion 867,604 872,839
Deferred income taxes 148,022 126,749
Operating lease liabilities—noncurrent 21,024 21,719
Other long-term liabilities 20,947 24,094
Total liabilities 1,192,270 1,190,482
Commitments and contingencies (Note 17)
EQUITY
Common stock ($ 0.01 par); authorized shares 450,000,000 ; issued shares 139,485,868 and 137,820,971 on September 30, 2022 and December 31, 2021, respectively; outstanding shares 130,100,834 and 136,938,758 on September 30, 2022 and December 31, 2021, respectively
1,395 1,378
Preferred stock ($ 0.01 par); authorized shares 50,000,000 ; no shares issued or outstanding on September 30, 2022 and December 31, 2021
— —
Additional paid-in capital 1,088,704 1,073,409
Accumulated deficit ( 267,262 ) ( 315,707 )
Treasury stock, at cost; shares 9,385,034 and 882,213 on September 30, 2022 and December 31, 2021, respectively
( 86,594 ) ( 12,551 )
Accumulated other comprehensive income (loss) 3,282 ( 5,792 )
Total equity 739,525 740,737
Total liabilities and equity $ 1,931,795 $ 1,931,219
See accompanying notes to condensed consolidated financial statements.
5

ECOVYST INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)


Common
stock 		Additional
paid-in
capital 		(Accumulated deficit) Treasury
stock, at
cost 		Accumulated
other
comprehensive
income (loss) 		Non-
controlling
interest 		Total
Balance, December 31, 2021 $ 1,378 $ 1,073,409 $ ( 315,707 ) $ ( 12,551 ) $ ( 5,792 ) $ — $ 740,737
Net income — — 7,875 — — — 7,875
Other comprehensive income — — — — 11,378 — 11,378
Tax withholdings on equity award vesting — — — ( 332 ) — — ( 332 )
Stock compensation expense — 5,946 — — — — 5,946
Shares issued under equity incentive plan, net of forfeitures 18 9 — — — — 27
Balance, March 31, 2022 $ 1,396 $ 1,079,364 $ ( 307,832 ) $ ( 12,883 ) $ 5,586 $ — $ 765,631
Net income — — 19,245 — — — 19,245
Other comprehensive loss — — — — ( 3,276 ) — ( 3,276 )
Repurchases of common shares — — — ( 8,842 ) — — ( 8,842 )
Stock compensation expense — 5,409 — — — — 5,409
Shares issued under equity incentive plan, net of forfeitures — 17 — — — — 17
Balance, June 30, 2022 $ 1,396 $ 1,084,790 $ ( 288,587 ) $ ( 21,725 ) $ 2,310 $ — $ 778,184
Net income — — 21,325 — — — 21,325
Other comprehensive income — — — — 972 — 972
Repurchases of common shares — — — ( 64,869 ) — — ( 64,869 )
Stock compensation expense — 3,872 — — — — 3,872
Shares issued under equity incentive plan, net of forfeitures ( 1 ) 42 — — — — 41
Balance, September 30, 2022 $ 1,395 $ 1,088,704 $ ( 267,262 ) $ ( 86,594 ) $ 3,282 $ — $ 739,525
6

Common
stock 		Additional
paid-in
capital 		(Accumulated deficit) Treasury
stock, at
cost 		Accumulated
other
comprehensive
loss 		Non-
controlling
interest 		Total
Balance, December 31, 2020 $ 1,371 $ 1,477,859 $ ( 175,758 ) $ ( 11,081 ) $ ( 15,265 ) $ 53 $ 1,277,179
Net (loss) income — — ( 92,635 ) — — 117 ( 92,518 )
Other comprehensive loss — — — — ( 2,745 ) ( 394 ) ( 3,139 )
Tax withholdings on equity award vesting — — — ( 1,470 ) — — ( 1,470 )
Distributions to noncontrolling interests — — — — — ( 516 ) ( 516 )
Stock compensation expense — 6,877 — — — — 6,877
Shares issued under equity incentive plan, net of forfeitures 7 63 — — — — 70
Balance, March 31, 2021 $ 1,378 $ 1,484,799 $ ( 268,393 ) $ ( 12,551 ) $ ( 18,010 ) $ ( 740 ) $ 1,186,483
Net (loss) income — — ( 1,490 ) — — 140 ( 1,350 )
Other comprehensive income — — — — 12,081 453 12,534
Distributions to noncontrolling interests — — — — — ( 593 ) ( 593 )
Stock compensation expense — 7,499 — — — — 7,499
Shares issued under equity incentive plan, net of forfeitures — 36 — — — — 36
Balance, June 30, 2021 $ 1,378 $ 1,492,334 $ ( 269,883 ) $ ( 12,551 ) $ ( 5,929 ) $ ( 740 ) $ 1,204,609
Net (loss) income — — ( 71,259 ) — — 76 ( 71,183 )
Other comprehensive income (loss) — — — — ( 3,255 ) 664 ( 2,591 )
Dividends paid on common stock ($ 3.20 per share)
— ( 435,593 ) — — — — ( 435,593 )
Stock compensation expense — 11,961 — — — — 11,961
Shares issued under equity incentive plan, net of forfeitures — 113 — — — — 113
Balance, September 30, 2021 $ 1,378 $ 1,068,815 $ ( 341,142 ) $ ( 12,551 ) $ ( 9,184 ) $ — $ 707,316
See accompanying notes to condensed consolidated financial statements.
7

ECOVYST INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine months ended
September 30,
2022 2021
Cash flows from operating activities:
Net income (loss) $ 48,445 $ ( 165,051 )
Net loss from discontinued operations — 159,122
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation 48,256 49,902
Amortization 10,547 10,182
Amortization of deferred financing costs and original issue discount 1,515 1,409
Debt extinguishment costs — 12,818
Foreign currency exchange loss 2,179 4,803
Pension and postretirement healthcare benefit ( 814 ) ( 1,811 )
Deferred income tax provision 12,454 4,256
Net loss on asset disposals 1,174 4,535
Stock compensation 17,419 22,837
Equity in net income from affiliated companies ( 17,422 ) ( 20,723 )
Dividends received from affiliated companies 30,000 20,000
Other, net ( 1,789 ) 8,515
Working capital changes that provided (used) cash, excluding the effect of acquisitions and dispositions:
Receivables ( 28,443 ) ( 33,830 )
Inventories 3,206 6,120
Prepaids and other current assets ( 5,223 ) ( 8,405 )
Accounts payable 1,954 10,096
Accrued liabilities ( 14,133 ) 7,511
Net cash provided by operating activities, continuing operations 109,325 92,286
Net cash used by operating activities, discontinued operations — ( 7,420 )
Net cash provided by operating activities 109,325 84,866
Cash flows from investing activities:
Purchases of property, plant and equipment ( 39,474 ) ( 44,648 )
Proceeds from business divestiture, net of cash — 980,350
Payments for business divestiture, net of cash ( 3,744 ) —
Business combinations, net of cash acquired ( 488 ) ( 42,782 )
Other, net 81 ( 8 )
Net cash (used in) provided by investing activities, continuing operations ( 43,625 ) 892,912
Net cash used in investing activities, discontinued operations — ( 40,943 )
Net cash (used in) provided by investing activities ( 43,625 ) 851,969
Cash flows from financing activities:
Issuance of long-term debt, net of discount — 897,750
Debt issuance costs — ( 1,293 )
Repayments of long-term debt ( 6,750 ) ( 1,428,613 )
Debt prepayment fees — ( 8,481 )
Proceeds from failed sale-leaseback — 14,590
Dividends paid to stockholders — ( 435,593 )
Repurchases of common shares ( 73,711 ) —
Tax withholdings on equity award vesting ( 332 ) ( 1,470 )
Proceeds from stock options exercised 84 223
Repayment of financing obligations ( 1,849 ) ( 486 )
Other, net — ( 104 )
Net cash used in financing activities, continuing operations ( 82,558 ) ( 963,477 )
Net cash used in financing activities, discontinued operations — ( 1,144 )
Net cash used in financing activities ( 82,558 ) ( 964,621 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 2,585 ) ( 4,681 )
Net change in cash and cash equivalents ( 19,443 ) ( 32,467 )
Cash and cash equivalents at beginning of period 140,889 137,219
Cash and cash equivalents at end of period $ 121,446 $ 104,752
For supplemental cash flow disclosures, see Note 21.
See accompanying notes to condensed consolidated financial statements.
8

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)

1. Background and Basis of Presentation:
Description of Business
Ecovyst Inc. and subsidiaries (the “Company” or “Ecovyst”) is a leading integrated and innovative global provider of specialty catalysts and services. The Company supports customers globally through its strategically located network of manufacturing facilities. The Company believes that its products, which are predominantly inorganic, and services contribute to improving the sustainability of the environment.
On December 14, 2020, the Company completed the sale of its Performance Materials business, and on August 1, 2021, the Company completed the sale of its Performance Chemicals business. The financial results of these businesses are presented as discontinued operations in the condensed consolidated financial statements for the 2021 period presented. See Note 3 to these condensed consolidated financial statements for more information on these transactions.
The Company has two uniquely positioned specialty businesses: Ecoservices provides sulfuric acid recycling to the North American refining industry for the production of alkylate and provides on-purpose virgin sulfuric acid for water treatment, mining and industrial applications; and Catalyst Technologies provides finished silica catalysts and catalyst supports necessary to produce high strength and high stiffness plastics and, through the Zeolyst Joint Venture, supplies zeolites used for catalysts that help produce renewable fuels, remove nitrogen oxides from diesel engine emissions as well as sulfur from fuels during the refining process.
The Company’s regeneration services product group, which is a part of the Company’s Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations result in higher sales and working capital requirements in the second and third quarters.
The notes to the condensed consolidated financial statements, unless otherwise indicated, are on a continuing operations basis.
Basis of Presentation
The condensed consolidated financial statements included herein are unaudited. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations for interim reporting. In the opinion of management, all adjustments of a normal and recurring nature necessary to state fairly the financial position and results of operations have been included. The results of operations are not necessarily indicative of the expected results for the full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Reclassification and Correction of an Error
During the preparation of the condensed consolidated financial statements for the period ended September 30, 2022, the Company identified a presentation error in the condensed consolidated statements of comprehensive income for the 2021 comparable periods presented. The presentation of comprehensive income (loss) inadvertently omitted the release of accumulated other comprehensive income (loss) related to foreign currency translation and deferred pension and postretirement benefit plan losses in conjunction with the sale of the Company’s Performance Chemicals business. There was no impact on the condensed consolidated statements of income, condensed consolidated balance sheets and condensed consolidated statements of cash flows. The presentation of other comprehensive income (loss) for the three and nine months ended September 30, 2021, was corrected for the additional comprehensive loss of $ 7,093 , of which $ 943 of comprehensive income was attributed to noncontrolling interest. Additionally, Note 6 was corrected for this presentation error. The Company assessed the materiality of the error and concluded it was not material to the Company’s previously issued financial statements, including the consolidated financial statements for the year ended December 31, 2021.
The previously disclosed disposal of business presented in accumulated other comprehensive income (loss) has been reclassified to other comprehensive income (loss) in the condensed consolidated statement of stockholders’ equity.
9

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
2. New Accounting Standards:
Recently Adopted Accounting Standards
In November 2021, the FASB issued guidance that requires entities to provide certain disclosures when they (1) have received government assistance and (2) use a grant or contribution accounting model by analogy to other accounting guidance. Previously, there was no guidance under GAAP on recognizing or measuring government grants to business entities. The new guidance does not provide any additional guidance on this topic; rather, it only provides guidance on required disclosures for business entities that receive government assistance and apply another grant or contribution accounting framework by analogy. The new guidance is effective for fiscal years beginning after December 15, 2021 with the new disclosures required on an annual basis, and can be applied either prospectively or retrospectively. The Company adopted the new guidance on January 1, 2022 and will include the disclosures as required in its annual reporting with respect to any government assistance or grants subject to the scope of the guidance to the extent material.
Accounting Standards Not Yet Adopted
In October 2021, the FASB issued guidance that requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with revenue recognition guidance. Under current GAAP, contract assets and contract liabilities acquired in a business combination are recorded by the acquirer at fair value. The new guidance creates an exception to the general recognition and measurement principles related to business combinations, and is expected to result in the acquirer recognizing contract assets and liabilities at the same amounts recorded by the acquiree. The new guidance is effective for business combinations occurring during fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of the new guidance, which would only be applied prospectively to business combinations upon the adoption of the guidance.
In March 2020 and January 2021, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. During the year ended December 31, 2021, the FASB extended the guidance adoption date to June 30, 2023. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
3. Divestitures:
Performance Materials Divestiture
Upon the close of the Performance Materials divestiture transaction on December 14, 2020, the Company entered into a Transition Services Agreement with the buyer pursuant to which the buyer received certain services to provide for the orderly transition of various functions and processes after the closing of the transaction. The services under the Transition Services Agreement included information technology, accounting, tax, financial services, human resources, facilities, and other administrative support services. These services were provided for a period of nine months, with three 30-day extensions available. The Company billed $ 253 and $ 3,314 under the Transition Services Agreement to the buyer during the three and nine months ended September 30, 2021, respectively. Those billings were included in selling, general and administrative expenses on the condensed consolidated financial statements for the nine months ended September 30, 2021.
During the three months ended September 30, 2021, the Company incurred transaction costs of $ 264 and stock-based compensation expense of $ 1,194 , and an associated tax benefit of $ 339 related to the Performance Materials divestiture, which was included in loss from discontinued operations, net of tax. During the nine months ended September 30, 2021, the Company incurred transaction costs of $ 1,794 and stock-based compensation expense of $ 2,477 , and an associated tax benefit of $ 1,045 related to the Performance Materials divestiture, which was included in loss from discontinued operations, net of tax.
10

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Performance Chemicals Divestiture
On February 28, 2021, the Company entered into a definitive agreement to sell its Performance Chemicals business to Sparta Aggregator L.P. (the “Buyer”), a partnership established by Koch Minerals & Trading, LLC and Cerberus Capital Management, L.P., for $ 1,100,000 , subject to certain adjustments including indebtedness, cash, working capital and transaction expenses. The Company completed the sale of the Performance Chemicals business on August 1, 2021.
Prior to the close of the transaction, the disposal group was tested for recoverability at each of the balance sheet dates subsequent to meeting the discontinued operations criteria, and the Company recognized an estimated disposal loss of $ 13,990 and $ 109,584 during the three and six months ended June 30, 2021, respectively, which was included in net loss from discontinued operations, net of tax on the condensed consolidated statement of income.
For the nine months ended September 30, 2021, the loss on the sale of the Performance Chemicals business was $ 157,539 , which was included in net (loss) income from discontinued operations, net of tax in the Company’s condensed consolidated statements. The following is a reconciliation of the loss recorded on the sale:
Net proceeds received from the sale of the Performance Chemicals business $ 980,350
Transaction costs ( 35,402 )
Net assets derecognized ( 1,102,487 )
Loss on sale of the Performance Chemicals business $ ( 157,539 )
During the year ended December 31, 2021, the net cash proceeds to the Company from the sale were $ 978,449 after certain customary adjustments for indebtedness, working capital and cash at the closing of the transaction. T he final pre-tax loss on the sale was $ 150,230 , which was included in net (loss) income from discontinued operations, net of tax in the Company’s consolidated statements of income for the year ended December 31, 2021. In March 2022, the Company made a payment to the buyer for $ 3,744 , representing the final adjustments to the sale price. The Company classified the payment within net cash used in investing activities – continuing operations in the condensed consolidated statements of cash flows.
In connection with the sale of the Performance Chemicals business and the related loss, as noted above, the Company has recognized a tax benefit of $ 33,052 within net loss from discontinued operations, net of tax on the condensed consolidated statement of income.
11

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The following table summarizes the results of discontinued operations related to the Performance Chemicals business for the three and nine months ended September 30, 2021:
Three months ended
September 30, 2021 		Nine months ended
September 30, 2021
Sales $ 54,973 $ 389,870
Cost of goods sold 39,582 284,220
Selling, general and administrative expenses 6,552 29,758
Goodwill impairment charge
— 75,080
Other operating (income) expense, net ( 18,993 ) 10,337
Loss on sale of the Performance Chemicals business 123,035 157,539
Operating loss ( 95,203 ) ( 167,064 )
Equity in net (income) from affiliated companies ( 25 ) ( 111 )
Interest expense, net (1)
1,916 10,730
Other expense (income), net 153 ( 6,210 )
Loss from discontinued operations before income tax ( 97,247 ) ( 171,473 )
Benefit for income taxes ( 22,494 ) ( 15,576 )
Loss from discontinued operations, net of tax $ ( 74,753 ) $ ( 155,897 )
(1) Upon the close of the transaction, the Company used a portion of the net proceeds to repay a portion of its outstanding debt amounting to $ 526,363 . Prior to the Company’s debt refinancing in June 2021, the Company’s outstanding term loan facilities had mandatory repayment provisions. As a result, interest expense has been allocated to discontinued operations on the basis of the Company’s total repayment of $ 526,363 .

Net income attributable to the noncontrolling interest related to the Performance Chemicals business, net of tax was $ 76 and $ 333 for the three and nine months ended September 30, 2021, respectively . Net loss attributable to Ecovyst Inc., related to the Performance Chemicals business, net of tax was $( 74,829 ) and $( 156,230 ) for the three and nine months ended September 30, 2021, respectively .
4. Revenue from Contracts with Customers:
Disaggregated Revenue
The Company’s primary means of disaggregating revenues is by reportable segments, which can be found in Note 18 to these condensed consolidated financial statements.
The Company’s portfolio of products is integrated into a variety of end uses, which are described in the table below.
Key End Uses Key Products
Industrial & process chemicals • Sulfur derivatives for industrial production
• Treatment services
Fuels & emission control • Refining hydrocracking catalysts
• Emission control catalysts
• Regeneration services for alkylate production
Packaging & engineered plastics • Catalysts for high-density polyethylene and chemicals syntheses
• Antiblocks for film packaging
• Sulfur derivatives for nylon production
Natural resources • Sulfur derivatives for mining
12

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The following tables disaggregate the Company’s sales, by segment and end use, for the three and nine months ended September 30, 2022 and 2021:
Three months ended September 30, 2022
Ecoservices
Catalyst Technologies (2)
Total
Industrial & process chemicals $ 41,252 $ — $ 41,252
Fuels & emission control (1)
88,532 — 88,532
Packaging & engineered plastics 29,707 36,859 66,566
Natural resources 36,183 — 36,183
Total segment sales $ 195,674 $ 36,859 $ 232,533
Three months ended September 30, 2021
Ecoservices
Catalyst Technologies (2)
Total
Industrial & process chemicals $ 23,297 $ 5 $ 23,302
Fuels & emission control (1)
67,644 — 67,644
Packaging & engineered plastics 23,315 29,873 53,188
Natural resources 23,294 — 23,294
Total segment sales $ 137,550 $ 29,878 $ 167,428
Nine months ended September 30, 2022
Ecoservices
Catalyst Technologies (2)
Total
Industrial & process chemicals $ 116,257 $ — $ 116,257
Fuels & emission control (1)
243,358 — 243,358
Packaging & engineered plastics 87,801 94,716 182,517
Natural resources 95,287 — 95,287
Total segment sales $ 542,703 $ 94,716 $ 637,419
Nine months ended September 30, 2021
Ecoservices
Catalyst Technologies (2)
Total
Industrial & process chemicals $ 58,581 $ 5 $ 58,586
Fuels & emission control (1)
191,630 — 191,630
Packaging & engineered plastics 48,916 82,490 131,406
Natural resources 59,382 — 59,382
Total segment sales $ 358,509 $ 82,495 $ 441,004
(1) As described in Note 1 to these condensed consolidated financial statements, the Company experiences seasonal s ales fluctuations to customers in the fuels & emission control end use.
(2) 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).
13

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
5. Fair Value Measurements:
Fair values are based on quoted market prices when available. When market prices are not available, fair values are generally estimated using discounted cash flow analyses, incorporating current market inputs for similar financial instruments with comparable terms and credit quality. In instances where there is little or no market activity for the same or similar instruments, the Company estimates fair values using methods, models and assumptions that management believes a hypothetical market participant would use to determine a current transaction price. These valuation techniques involve some level of management estimation and judgment that becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk inherent in a particular methodology, model or input used.
The Company’s financial assets and liabilities carried at fair value have been classified based upon a fair value hierarchy. The hierarchy gives the highest ranking to fair values determined using unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest ranking to fair values determined using methodologies and models with unobservable inputs (Level 3). The classification of an asset or a liability is based on the lowest level input that is significant to its measurement. For example, a Level 3 fair value measurement may include inputs that are both observable (Levels 1 and 2) and unobservable (Level 3). The levels of the fair value hierarchy are as follows:
• Level 1—Values are unadjusted quoted prices for identical assets and liabilities in active markets accessible at the measurement date. Active markets provide pricing data for trades occurring at least weekly and include exchanges and dealer markets.
• Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the instrument. Such inputs include market interest rates and volatilities, spreads and yield curves.
• Level 3—Certain inputs are unobservable (supported by little or no market activity) and significant to the fair value measurement. Unobservable inputs reflect the Company’s best estimate of what hypothetical market participants would use to determine a transaction price for the asset or liability at the reporting date.
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

September 30,
2022 		Quoted Prices in
Active Markets
(Level 1) 		Significant Other
Observable Inputs
(Level 2) 		Significant
Unobservable Inputs
(Level 3)
Derivative assets:
Interest rate caps (Note 14) $ 35,991 $ — $ 35,991 $ —
December 31,
2021 		Quoted Prices in
Active Markets
(Level 1) 		Significant Other
Observable Inputs
(Level 2) 		Significant
Unobservable Inputs
(Level 3)
Derivative assets:
Interest rate caps (Note 14) $ 1,080 $ — $ 1,080 $ —
Derivative liabilities:
Interest rate caps (Note 14) $ 1,288 $ — $ 1,288 $ —

14

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Derivative contracts
Derivative assets and liabilities can be exchange-traded or traded over-the-counter (“OTC”). The Company generally values exchange-traded derivatives using models that calibrate to market transactions and eliminate timing differences between the closing price of the exchange-traded derivatives and their underlying instruments. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, model calibration to market transactions, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. When models are used, the selection of a particular model to value an OTC derivative depends on the contractual terms of, and specific risks inherent in, the instrument as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices and rates, forward curves, measures of volatility, and correlations of such inputs. For OTC derivatives that trade in liquid markets, such as forward contracts, swaps and options, model inputs can generally be corroborated by observable market data by correlation or other means, and model selection does not involve significant management judgment.
As of September 30, 2022, th e Company had interest rate c aps th at were fair valued using Level 2 inputs. In addition, the Company applies a credit valuation adjustment to reflect credit risk which is calculated based on credit default swaps. To the extent that the Company’s net exposure under a specific master agreement is an asset, the Company utilizes the counterparty’s default swap rate. If the net exposure under a specific master agreement is a liability, the Company utilizes a default swap rate comparable to Ecovyst. The credit valuation adjustment is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume the Company’s liabilities or that a market participant would be willing to pay for the Company’s assets.
6. Stockholders' Equity:
Accumulated Other Comprehensive Income (Loss)
The stockholders’ equity footnote disclosures have been revised to include the impact of discontinued operations on pensions and postretirement benefits and foreign currency translation for the three and nine months ended September 30, 2021 in other comprehensive income (loss) and accumulated other comprehensive income (loss). See Note 1 to these condensed consolidated financial statements for further information on the reclassification and correction of errors in historical presentation.
15

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The following tables present the tax effects of each component of other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:
Three months ended September 30,
2022 2021
Pre-tax
amount 		Tax benefit/
(expense) 		After-tax amount Pre-tax
amount 		Tax benefit/
(expense) 		After-tax amount
Defined benefit and other postretirement plans:
Amortization of net loss $ 2 $ ( 1 ) $ 1 $ 5,041 $ ( 1,297 ) $ 3,744
Amortization of prior service credit ( 53 ) 13 ( 40 ) ( 58 ) 14 ( 44 )
Settlement (loss) gain ( 1,228 ) 305 ( 923 ) 1,507 ( 374 ) 1,133
Benefit plans, net ( 1,279 ) 317 ( 962 ) 6,490 ( 1,657 ) 4,833
Net gain from hedging activities 12,188 ( 3,047 ) 9,141 613 ( 153 ) 460
Foreign currency translation (1)
( 7,207 ) — ( 7,207 ) ( 12,391 ) 4,507 ( 7,884 )
Other comprehensive income $ 3,702 $ ( 2,730 ) $ 972 $ ( 5,288 ) $ 2,697 $ ( 2,591 )
Nine months ended September 30,
2022 2021
Pre-tax
amount 		Tax benefit/
(expense) 		After-tax amount Pre-tax
amount 		Tax benefit/
(expense) 		After-tax amount
Defined benefit and other postretirement plans:
Amortization of net loss $ 3 $ ( 1 ) $ 2 $ 5,044 $ ( 1,298 ) $ 3,746
Amortization of prior service credit ( 158 ) 39 ( 119 ) ( 174 ) 43 ( 131 )
Settlement (loss) gain ( 1,228 ) 305 ( 923 ) 1,507 ( 374 ) 1,133
Benefit plans, net ( 1,383 ) 343 ( 1,040 ) 6,377 ( 1,629 ) 4,748
Net gain from hedging activities 36,827 ( 9,207 ) 27,620 2,184 ( 546 ) 1,638
Foreign currency translation (1)
( 17,506 ) — ( 17,506 ) ( 6,536 ) 6,954 418
Other comprehensive income $ 17,938 $ ( 8,864 ) $ 9,074 $ 2,025 $ 4,779 $ 6,804
(1) The income tax benefit or expense included in other comprehensive income is attributed to the portion of foreign currency translation associated with the Company’s cross-currency interest rate swaps for the three and nine months ended September 30, 2021, for which the tax effect is based on the applicable U.S. deferred income tax rate. See Note 14 to these condensed consolidated financial statements for information regarding the Company’s cross-currency interest rate swaps, which were settled in March 2021.
16

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The following table presents the changes in accumulated other comprehensive income (loss), net of tax, by component for the nine months ended September 30, 2022 and 2021:
Defined benefit
and other
postretirement
plans 		Net gain (loss)
from hedging
activities 		Foreign
currency
translation 		Total
December 31, 2021 $ 11,072 $ 2,254 $ ( 19,118 ) $ ( 5,792 )
Other comprehensive (loss) income before reclassifications ( 1,157 ) 27,148 ( 17,506 ) 8,485
Amounts reclassified from accumulated other comprehensive income (1)
117 472 — 589
September 30, 2022 $ 10,032 $ 29,874 $ ( 36,624 ) $ 3,282
December 31, 2020 $ 5,278 $ ( 660 ) $ ( 19,883 ) $ ( 15,265 )
Other comprehensive income (loss) before reclassifications 877 1,425 11,474 13,776
Amounts reclassified from accumulated other comprehensive income (1)
3,871 213 ( 11,779 ) ( 7,695 )
September 30, 2021 $ 10,026 $ 978 $ ( 20,188 ) $ ( 9,184 )
(1) See the following table for details about these reclassifications. Amounts in parentheses indicate debits.
The following table presents the reclassifications out of accumulated other comprehensive income for the three and nine months ended September 30, 2022 and 2021:
Details about Accumulated Other Comprehensive
Income Components
Amounts Reclassified from Accumulated Other
Comprehensive Income (1)
Affected Line Item where
Income is Presented
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Amortization of defined benefit and other postretirement items:
Prior service credit $ ( 53 ) $ ( 58 ) $ ( 158 ) $ ( 174 )
Other income (expense) (2)
Actuarial gains 1 2 3 4
Other income (expense) (2)
Release of actuarial losses — ( 3,717 ) — ( 3,717 ) Net loss from discontinued operations, net of tax
( 52 ) ( 3,773 ) ( 155 ) ( 3,887 ) Total before tax
12 ( 11 ) 38 16 Tax benefit (expense)
$ ( 40 ) $ ( 3,784 ) $ ( 117 ) $ ( 3,871 ) Net of tax
Gains and losses on cash flow hedges:
Interest rate caps $ ( 29 ) $ ( 104 ) $ ( 627 ) $ ( 283 ) Interest expense
7 26 155 70 Tax benefit
$ ( 22 ) $ ( 78 ) $ ( 472 ) $ ( 213 ) Net of tax
Release of foreign currency translation $ — $ 11,779 $ — $ 11,779 Net loss from discontinued operations, net of tax
Total reclassifications for the period $ ( 62 ) $ 7,917 $ ( 589 ) $ 7,695 Net of tax
(1) Amounts in parentheses indicate debits to profit/loss.
(2) These accumulated other comprehensive income (loss) components are components of net periodic pension and other postretirement cost (see Note 16 to these condensed consolidated financial statements for additional details).

17

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Treasury Stock Repurchases
The Company records repurchases of its common stock for treasury at cost. Upon the reissuance of the Company’s common stock from treasury, differences between the proceeds from reissuance and the average cost of the treasury stock are credited or charged to capital in excess of par value to the extent of prior credits related to the reissuance of treasury stock. If no such credits exist, the differences are charged to retained earnings.
2020 Stock Repurchase Program
On March 12, 2020, the Company’s Board of Directors (the “Board”) approved a plan to purchase up to $ 50,000 of the Company’s common stock under a stock repurchase program approved by the Board. Under the plan, the Company could repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions in accordance with applicable federal securities laws. The Company determined the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors. The stock repurchase program expired in March 2022, with no repurchases made in 2022 through the expiration of the program, no r during the three or nine months ended September 30, 2021.
2022 Stock Repurchase Program
On April 27, 2022, the Board approved a stock repurchase program that permits the Company to purchase up to $ 450,000 of the Company’s common stock over the next four years . Under the plan, the Company can repurchase shares from time to time for cash in open market transactions or in privately negotiated transactions in accordance with applicable federal securities laws. The Company will determine the timing and the amount of any repurchases based on its evaluation of market conditions, share price and other factors.
During the nine months ended September 30, 2022, the Company repurchased 1,970,763 shares of its common stock on the open market at an average price of $ 9.82 per share, for a total of $ 19,356 . Additionally, in connection with a secondary offering of the Company’s common stock in August 2022 , the Company repurchased 6,500,000 shares of its common stock sold in the offering from underwriters at a price of $ 8.36 per share simultaneous with the closing of the offering, for a total of $ 54,316 .
As of September 30, 2022, $ 376,328 was available for additional share repurchases under the program. There were no repurchases during September 2022.
Tax Withholdings on Equity Award Vesting
In connection with the vesting of restricted stock awards, restricted stock units and performance stock units, shares of common stock may be delivered to the Company by employees to satisfy withholding tax obligations at the instruction of the employee award holders. These transactions, when they occur, are accounted for as stock repurchases by the Company, with the shares returned to treasury stock at a cost representing the payment by the Company of the tax obligations on behalf of the employees in lieu of shares for the vesting unit. There were no shares delivered to the Company to cover tax payments for the three months ended September 30, 2022 and 2021, and the fair value of the shares withheld to cover tax payments were $ 332 and $ 1,470 for the nine months ended September 30, 2022 and 2021, respectively.
Dividends Paid
On August 4, 2021, the Board declared a special cash dividend of $ 3.20 per share, using after tax cash proceeds from the sale of the Performance Chemicals business. The dividend was paid on August 23, 2021 to the Company’s stockholders of record at the close of business on August 12, 2021. Refer to Note 3 of these condensed consolidated financial statements for additional details on the sale of the Performance Chemicals business.

18

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
7. Acquisition:
On March 1, 2021 (the “Closing Date”), the Company completed the acquisition of Chem32, LLC (“Chem32”) as part of a stock transaction (the “Acquisition”) for $ 44,000 in cash. Based in Orange, Texas, Chem32 is a leader in ex situ pre-sulfiding and pre-activation for hydro-processing catalysts. The net cash paid by the Company was $ 42,639 , after certain customary adjustments for indebtedness, working capital, cash and a holdback amount pursuant to the agreement. A portion of the holdback was settled in September 2022 for a payment of $ 488 , with $ 512 of the holdback remaining as of September 30, 2022.
Chem32 is reported as part of the Ecoservices segment. The Company believes that the Acquisition will offer a more robust portfolio of services within the refining industry by leveraging the Company’s existing relationships, therefore contributing to a total purchase price that resulted in the recognition of $ 14,778 of goodwill, which was deductible for tax purposes. During the nine months ended September 30, 2022 , the Company recorded an immaterial adjustment between goodwill and deferred tax liabilities related to the final tax purchase price allocation. See Note 8 to these condensed consolidated financial statements for further information.
The following table sets forth the calculation of the purchase price to the identifiable net assets acquired with respect to the Acquisition, which was complete as of December 31, 2021 :
Purchase
Price Allocation
Cash paid, net of cash acquired $ 42,639
Holdback 1,000
Total consideration, net of cash acquired $ 43,639
Recognized amounts of identifiable assets acquired and liabilities assumed:
Receivables $ 1,368
Inventories 204
Prepaid and other current assets 351
Property, plant and equipment 5,046
Other intangible assets 22,100
Other long-term assets 187
Fair value of assets acquired 29,256
Accounts payable 207
Accrued liabilities 188
Fair value of net identifiable assets acquired 28,861
Goodwill 14,778
$ 43,639
In accordance with the requirements of the purchase method of accounting for acquisitions, accounts receivable and inventories were recorded at fair market value. As of the Closing Date, the fair value of accounts receivable approximated historical cost. The gross contractual amount of accounts receivable at the Closing Date was $ 1,368 , of which there was no amount deemed uncollectible. Fair value of inventory is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity, which the Company determined acquired cost equaled fair value of the inventory acquired.
The Company’s cost of goods sold for the nine months ended September 30, 2021 includes a pre-tax charge of $ 148 of additional amortization expense related to identified intangible assets, which would have been recorded during the reporting period if the adjustments to the provisional amounts had been recognized as of the Closing Date. The Company’s other operating expense, net for the nine months ended September 30, 2021 includes a pre-tax charge of $ 1,108 of additional amortization expense related to identified intangible assets, which would have been recorded during the reporting period if the adjustments to the provisional amounts had been recognized as of the Closing Date.
19

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The valuation of intangibles assets acquired and the related weighted-average amortization periods were as follows:
Amount Weighted-Average
Expected Useful Life
(in years)
Intangible assets subject to amortization:
Customer relationships $ 16,000 10
Technical know-how 3,800 10
Contracts 700 5
Trade names 1,600 10
Total intangible assets subject to amortization $ 22,100

Net sales and net income attributable to Chem32 during the period from the Closing Date through September 30, 2021 were immaterial. Pro forma financial information has not been presented as it is immaterial for the three and nine months ended September 30, 2021. Acquisition and integration costs were $ 680 for the nine months ended September 30, 2021 and are included in other operating expense, net in the Company’s consolidated statement of income.
8. Goodwill:
The change in the carrying amount of goodwill for the nine months ended September 30, 2022 is summarized as follows:
Ecoservices Catalyst Technologies Total
Balance as of December 31, 2021 $ 326,670 $ 79,469 $ 406,139
Goodwill adjustments (1)
( 81 ) — ( 81 )
Foreign exchange impact — ( 4,906 ) ( 4,906 )
Balance as of September 30, 2022 $ 326,589 $ 74,563 $ 401,152
(1) During the nine months ended September 30, 2022 , the Company recorded an adjustment of $ 81 between goodwill and deferred tax liabilities related to the final tax purchase price allocation for the Chem32 acquisition.
9. Other Operating Expense, Net:
A summary of other operating expense, net is as follows:
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Amortization expense $ 2,632 $ 3,294 $ 7,931 $ 7,669
Transaction and other related costs 1,789 538 6,860 1,620
Restructuring, integration and business optimization costs (1)
1,322 78 6,421 2,408
Net loss on asset disposals 468 2,156 1,174 4,535
Other, net 1,462 248 2,715 554
$ 7,673 $ 6,314 $ 25,101 $ 16,786
(1) During the three months ended September 30, 2022 and the nine months ended September 30, 2022 and 2021 , respectively, the Company’s results were impacted by costs associated with severance charges for certain executives and employees.
20

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
10. Inventories, Net:
Inventories, net are classified and valued as follows:
September 30,
2022 		December 31,
2021
Finished products and work in process $ 43,337 $ 46,894
Raw materials 6,392 6,919
$ 49,729 $ 53,813
Valued at lower of cost or market:
LIFO basis $ 24,304 $ 33,330
Valued at lower of cost and net realizable value:
FIFO or average cost basis 25,425 20,483
$ 49,729 $ 53,813
11. Investments in Affiliated Companies:
The Company accounts for investments in affiliated companies under the equity method. Affiliated companies accounted for on the equity basis as of September 30, 2022 are as follows:
Company Country Percent
Ownership
Zeolyst International USA 50 %
Zeolyst C.V. Netherlands 50 %
Following is summarized information of the combined investments (1) :
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Sales $ 67,043 $ 76,195 $ 218,389 $ 218,459
Gross profit 17,794 28,981 70,546 77,048
Operating income 10,228 20,414 44,340 51,576
Net income 9,540 20,717 44,448 51,204
(1) Summarized information of the combined investments is presented at 100%; the Company’s share of the net assets and net income of affiliates is calculated based on the percent ownership specified in the table above.
The Company’s investments in affiliated companies balance as of September 30, 2022 and December 31, 2021 includes net purchase accounting fair value adjustments of $ 232,617 and $ 237,419 , respectively, related to a prior business combination, consisting primarily of goodwill and intangible assets such as customer relationships, technical know-how and trade names. Consolidated equity in net income from affiliates is net of $ 1,601 and $ 4,802 of amortization expense related to purchase accounting fair value adjustments for the three and nine months ended September 30, 2022, respectively. Consolidated equity in net income from affiliates is net of $ 1,601 and $ 4,879 of amortization expense related to purchase accounting fair value adjustments for the three and nine months ended September 30, 2021, respectively.
21

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
12. Property, Plant and Equipment:
A summary of property, plant and equipment, at cost, and related accumulated depreciation is as follows:
September 30,
2022 		December 31,
2021
Land $ 96,391 $ 97,047
Buildings and improvements 80,932 77,851
Machinery and equipment 730,495 714,435
Construction in progress 58,476 45,952
966,294 935,285
Less: accumulated depreciation ( 384,869 ) ( 339,054 )
$ 581,425 $ 596,231
Depreciation expense was $ 16,103 and $ 48,256 for the three and nine months ended September 30, 2022, respectively. Depreciation expense was $ 16,369 and $ 49,902 for the three and nine months ended September 30, 2021, respectively.
13. Long-term Debt:
The summary of long-term debt is as follows:
September 30,
2022 		December 31,
2021
Senior Secured Term Loan Facility due June 2028 $ 888,750 $ 895,500
ABL Facility — —
Total debt 888,750 895,500
Original issue discount ( 7,798 ) ( 8,762 )
Deferred financing costs ( 4,348 ) ( 4,899 )
Total debt, net of original issue discount and deferred financing costs 876,604 881,839
Less: current portion ( 9,000 ) ( 9,000 )
Total long-term debt, excluding current portion $ 867,604 $ 872,839
The fair value of a financial instrument is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. As of September 30, 2022 and December 31, 2021, the fair value of the senior secured term loan facility was $ 844,312 and $ 894,381 , respectively. The fair value is classified as Level 2 based upon the fair value hierarchy (see Note 5 to these condensed consolidated financial statements for further information on fair value measurements).
14. Financial Instruments:
The Company uses interest rate related derivative instruments to manage its exposure to changes in interest rates on its variable-rate debt instruments. The Company does not speculate using derivative instruments.
By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and therefore, the Company is not exposed to the counterparty’s credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high quality counterparties. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features.
Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with the Company’s derivative instruments is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.
22

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Use of Derivative Financial Instruments to Manage Interest Rate Risk. The Company is exposed to fluctuations in interest rates on its senior secured credit facilities. Changes in interest rates will not affect the market value of such debt but will affect the Company’s interest payments over the term of the loans. Likewise, an increase in interest rates could have a material impact on the Company’s condensed consolidated statements of cash flows. The Company hedges the interest rate fluctuations on debt obligations through interest rate cap agreements. The Company records these agreements at fair value as assets or liabilities in its condensed consolidated balance sheets. As the derivatives are designated and qualify as cash flow hedges, the gains or losses on the interest rate cap agreements are recorded in stockholders’ equity as a component of OCI, net of tax. Reclassifications of the gains and losses on the interest rate cap agreements into earnings are recorded as part of interest expense in the condensed consolidated statements of income as the Company makes its interest payments on the hedged portion of its senior secured credit facilities. Fair value is determined based on estimated amounts that would be received or paid to terminate the contracts at the reporting date based on quoted market prices.
In November 2018, the Company entered into interest rate cap agreements to mitigate interest volatility from July 2020 through July 2022, with a cap rate of 3.50 % on $ 500,000 of notional variable-rate debt and a $ 3,380 premium annuitized during the effective period. In February 2020, the Company restructured these agreements to lower the interest cap rate to 2.50 % with an incremental $ 130 premium annuitized during the effective period. In March 2020, the Company again amended such interest rate cap agreements to lower the cap rate to 0.84 % and paid an additional $ 900 premium annuitized during the effective period. The term and notional amount remained unchanged, and the total cumulative annuitized premium on the $ 500,000 of notional variable-rate debt was $ 4,410 .
In July 2020, the Company entered into additional interest rate cap agreements to mitigate interest rate volatility from August 2020 to August 2023, with a cap rate of 1.00 % on $ 400,000 of notional variable-rate debt. The cap rate in effect at September 30, 2022 was 1.00 % associated with the $ 400,000 of notional variable-rate debt. The total annuitized premium on the $ 400,000 of notional variable-rate debt was $ 137 .
In August 2021, PQ Corporation novated $ 900,000 of its interest rate caps to Ecovyst Catalyst Technologies LLC. Other than the novation, there were no other changes to the interest rate caps in connection with the novation.
In January 2022, the Company entered into two new forward starting interest rate cap agreements, with notional amounts of $ 250,000 each and with a cap rate of 1.00 %. The term for one of these interest rate caps is July 2022 through October 2024 and the term for the other is September 2023 through October 2025. The total cumulative annuitized premium is $ 4,450 . The cap rate in effect at September 30, 2022 was 1.00 %.
Use of Derivative Financial Instruments to Manage Foreign Currency Risk. The Company is exposed to risks related to its net investments in foreign operations due to fluctuations in foreign currency exchange rates, particularly between the United States dollar and the Euro. In February 2018, the Company entered into multiple cross-currency interest rate swap arrangements with an aggregate notional amount of € 280,000 to hedge this exposure on the net investments of certain of its Euro-denominated subsidiaries in its Performance Materials and Performance Chemicals businesses. The Company recorded these swap agreements at fair value as assets or liabilities in its condensed consolidated balance sheet. As the derivatives are designated and qualify as net investment hedges, changes in the fair value of the swaps attributable to changes in the spot exchange rates are recognized in cumulative translation adjustment (“CTA”) within OCI and are held there until the hedged net investments are sold or substantially liquidated. Upon such sale or liquidation, the amount recognized in CTA is reclassified to earnings and reported in the same line item as the gain or loss on the liquidation of the net investments. Changes in the fair value of the swaps attributable to the cross-currency basis spread are excluded from the assessment of hedge effectiveness and are recorded in current period earnings.
In March 2021, as a result of the divestitures of the Performance Materials and Performance Chemicals businesses, the Company settled its cross-currency swaps. At the date of settlement, the total notional value of the cross-currency swaps was $ 311,380 . The Company paid $ 13,170 in cash to settle the swaps, which is included in net cash used in investing activities, discontinued operations in the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2021, as the underlying subsidiary subject to the net investment hedging relationship is part of the Performance Chemicals business.
23

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The fair values of derivative instruments held as of September 30, 2022 and December 31, 2021 are shown below:
Balance sheet location September 30,
2022 		December 31,
2021
Derivative assets:
Derivatives designated as cash flow hedges:
Interest rate caps Prepaid and other current assets $ 17,347 $ —
Interest rate caps Other long-term assets 18,644 1,080
Total derivative assets $ 35,991 $ 1,080
Derivative liabilities:
Derivatives designated as cash flow hedges:
Interest rate caps Accrued liabilities $ — $ 1,288
Total derivative liabilities $ — $ 1,288
The following tables show the effect of the Company’s derivative instruments designated as cash flow hedges on AOCI for the three and nine months ended September 30, 2022 and 2021:
Three months ended September 30,
2022 2021
Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income
Interest rate caps Interest (expense) income $ 12,159 $ ( 29 ) $ 510 $ ( 104 )
Nine months ended September 30,
2022 2021
Location of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income Amount of gain (loss) recognized in OCI on derivatives Amount of gain (loss) reclassified from AOCI into income
Interest rate caps Interest (expense) income $ 36,200 $ ( 627 ) $ 1,901 $ ( 283 )
24

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
The following tables show the effect of the Company’s cash flow hedge accounting on the condensed consolidated statements of income for the three and nine months ended September 30, 2022 and 2021:
Three months ended September 30,
2022 2021
Cost of goods sold Interest (expense)
income 		Cost of goods sold Interest (expense)
income
Total amounts of income and expense line items presented in the statement of income in which the effects of cash flow hedges are recorded $ ( 164,864 ) $ ( 9,542 ) $ ( 113,784 ) $ ( 9,005 )
Interest contracts:
Amount of loss reclassified from AOCI into income — ( 29 ) — ( 104 )
Nine months ended September 30,
2022 2021
Cost of goods sold Interest (expense)
income 		Cost of goods sold Interest (expense)
income
Total amounts of income and expense line items presented in the statement of income in which the effects of cash flow hedges are recorded $ ( 462,156 ) $ ( 26,880 ) $ ( 318,768 ) $ ( 28,202 )
Interest contracts:
Amount of loss reclassified from AOCI into income — ( 627 ) — ( 283 )
The amount of unrealized losses in AOCI related to the Company’s cash flow hedges that is expected to be reclassified to the condensed consolidated statement of income over the next twelve months is $ 275 as of September 30, 2022.
The following table shows the effect of the Company’s net investment hedges on AOCI and the condensed consolidated statements of income for the three and nine months ended September 30, 2021:
Amount of pre-tax gain recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain recognized in income on derivative (amount excluded from effectiveness testing)
Three months ended
September 30, 2021 		Three months ended
September 30, 2021 		Three months ended
September 30, 2021
Cross-currency interest rate swaps $ — Net (loss) income from discontinued operations, net of tax $ 9,754 Interest (expense) income $ —
Amount of pre-tax gain recognized in OCI on derivative Location of gain (loss) reclassified from AOCI into income Amount of gain reclassified from AOCI into income Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain recognized in income on derivative (amount excluded from effectiveness testing)
Nine months ended
September 30, 2021 		Nine months ended
September 30, 2021 		Nine months ended
September 30, 2021
Cross-currency interest rate swaps $ 9,787 Net (loss) income from discontinued operations, net of tax $ 9,754 Interest (expense) income $ 545
25

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
15. Income Taxes:
The effective income tax rate for the three months ended September 30, 2022 was 29.6 % compared to 35.6 % for the three months ended September 30, 2021. The effective income tax rate for the nine months ended September 30, 2022 was 31.2 % compared to ( 610.9 )% for the nine months ended September 30, 2021. The Company’s effective income tax rate has fluctuated primarily due to changes in income mix, discrete impacts related to intraperiod allocation revaluation of deferred tax assets and liabilities as a result of the divestiture of the Performance Chemicals business, tax rate changes and changes in foreign exchange gains and losses, which create permanent differences in certain jurisdictions.
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2022 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation, and a discrete tax expense associated with the Employee Retention Credit.
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2021 was mainly due to state and local taxes, discrete tax impacts related to intra-period allocation revaluation of deferred tax assets and liabilities as a result of the divestiture of the Performance Chemicals business, tax rate changes, and the tax effect of permanent differences related to foreign currency exchange gain or loss.
On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA imposes a 15% corporate alternative minimum tax for certain large corporations with average annual adjusted financial statement income in excess of $1 billion, for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. Historically, during the year we have made discretionary share repurchases. Beginning in 2023, these purchases would be subject to the excise tax. Based on the historical net repurchase activity the excise tax and the other provisions of the IRA are not expected to have a material impact on our results of operations or financial position. However, we are still in the process of analyzing the provisions of the IRA.
16. Benefit Plans:
The following tables present the components of net periodic expense (benefit) for the Company-sponsored defined benefit pension and postretirement plans, which cover certain employees and retirees located in the U.S.
Defined Benefit Pension Plans
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Interest cost $ 681 $ 551 $ 1,888 $ 1,652
Expected return on plan assets ( 380 ) ( 1,093 ) ( 2,599 ) ( 3,280 )
Settlement loss (gain) recognized 38 ( 26 ) 38 ( 26 )
Net periodic expense (benefit) $ 339 $ ( 568 ) $ ( 673 ) $ ( 1,654 )
Other Postretirement Benefit Plan
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Interest cost $ 5 $ 4 $ 13 $ 13
Amortization of prior service credit ( 53 ) ( 58 ) ( 158 ) ( 174 )
Amortization of net loss 1 2 3 4
Net periodic benefit $ ( 47 ) $ ( 52 ) $ ( 142 ) $ ( 157 )
26

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
17. Commitments and Contingent Liabilities:
There is a risk of environmental impact in the Company’s manufacturing operations. The Company’s environmental policies and practices are designed to comply with existing laws and regulations and to minimize the possibility of significant environmental impact. The Company is also subject to various other lawsuits and claims with respect to matters such as governmental regulations, labor and other actions arising out of the normal course of business. All claims that are probable and reasonably estimable have been accrued for in the Company’s condensed consolidated financial statements. When these matters are ultimately concluded and determined, the Company believes that there will be no material adverse effect on its consolidated financial position, results of operations or liquidity.
18. Reportable Segments:
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,
2022 2021 2022 2021
Sales:
Ecoservices $ 195,674 $ 137,550 $ 542,703 $ 358,509
Catalyst Technologies (1)
36,859 29,878 94,716 82,495
Total $ 232,533 $ 167,428 $ 637,419 $ 441,004
Adjusted EBITDA: (2)
Ecoservices $ 64,110 $ 51,920 $ 173,435 $ 125,372
Catalyst Technologies (3)
19,272 25,441 57,676 64,623
Unallocated corporate expenses ( 7,945 ) ( 7,986 ) ( 23,543 ) ( 25,641 )
Total $ 75,437 $ 69,375 $ 207,568 $ 164,354
(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 excluded is $ 27,773 and $ 92,656 for the three and nine months ended September 30, 2022, respectively. The proportionate share of sales excluded is $ 32,820 and $ 94,984 for the three and nine months ended September 30, 2021, respectively.
(2) 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.
(3) The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment is $ 8,704 for the three months ended September 30, 2022, which includes $ 3,187 of equity in net income plus $ 1,601 of amortization of investment in affiliate step-up and $ 3,917 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment is $ 34,306 for the nine months ended September 30, 2022, which includes $ 17,500 of equity in net income plus $ 4,802 of amortization of investment in affiliate step-up and $ 12,004 of joint venture depreciation, amortization and interest.
The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment is $ 14,493 for the three months ended September 30, 2021, which includes $ 8,780 of equity in net income plus $ 1,601 of amortization of investment in affiliate step-up and $ 4,112 of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment is $ 37,085 for the nine months ended September 30, 2021, which includes $ 20,794 of equity in net income plus $ 4,879 of amortization of investment in affiliate step-up and $ 11,412 of joint venture depreciation, amortization and interest.
27

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
A reconciliation of net income (loss) to Ecovyst to Adjusted EBITDA is as follows:
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Reconciliation of net income (loss) from continuing operations to Adjusted EBITDA
Net income (loss) from continuing operations $ 21,325 $ 4,689 $ 48,445 $ ( 5,929 )
Provision for income taxes 8,966 2,591 21,983 5,095
Interest expense, net 9,542 9,005 26,880 28,202
Depreciation and amortization 19,599 20,599 58,803 60,084
EBITDA 59,432 36,884 156,111 87,452
Joint venture depreciation, amortization and interest 3,917 4,112 12,004 11,412
Amortization of investment in affiliate step-up 1,601 1,601 4,802 4,879
Debt extinguishment costs — 15,185 — 26,902
Net loss on asset disposals 468 2,156 1,174 4,535
Foreign exchange losses 1,030 922 2,179 4,803
LIFO benefit ( 436 ) ( 1,295 ) ( 4 ) ( 1,998 )
Transaction and other related costs 1,789 538 6,860 1,620
Equity-based compensation 4,740 10,193 17,419 22,837
Restructuring, integration and business optimization expenses 1,322 78 6,421 2,408
Defined benefit pension plan expense (benefit) 292 ( 1,029 ) ( 814 ) ( 2,219 )
Other 1,282 30 1,416 1,723
Adjusted EBITDA $ 75,437 $ 69,375 $ 207,568 $ 164,354
19. Stock-Based Compensation:
The Company has an equity incentive plan under which it grants common stock awards to employees, directors and affiliates of the Company. At September 30, 2022, 9,501,030 shares of common stock were available for issuance under the plan. The Company settles these awards through the issuance of new shares.
Restricted Stock Units and Performance Stock Units
Restricted Stock Units
During the nine months ended September 30, 2022, the Company granted 2,779,690 restricted stock units under its equity incentive plan. Each restricted stock unit provides the recipient with the right to receive a share of common stock subject to graded vesting terms based on service, which for the awards granted during the nine months ended September 30, 2022, generally requires approximately one year of service for members of the Company’s board of directors and approximately three years of service for employees. The awards granted during the nine months ended September 30, 2022 also included a special grant for certain employees based on service which cliff vests on July 1, 2023. The value of the restricted stock units granted during the nine months ended September 30, 2022 was based on the average of the high and low trading prices of the Company’s common stock on the NYSE on the preceding trading day, in accordance with the Company’s policy for valuing such awards. Compensation expense related to the restricted stock units is recognized on a straight-line basis over the respective vesting period.
28

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Performance Stock Units
2022 Grants
During the nine months ended September 30, 2022, the Company granted 295,132 performance stock units (at target) under its equity incentive plan. The performance stock units granted during the nine months ended September 30, 2022 provide the recipients with the right to receive shares of common stock dependent on the achievement of a total shareholder return (“TSR”) goal, and are generally subject to the provision of service through the vesting date of the award. The performance period for the TSR goal is measured based on a three-year performance period from January 1, 2022 through December 31, 2024. The TSR goal is based on the Company’s actual TSR percentage increase over the performance period. Depending on the Company’s performance relative to the TSR goal, each performance stock unit award recipient is eligible to receive a percentage of the target number of shares granted to the recipient, ranging from zero to 200 %. The performance stock units, to the extent earned, will vest on the date the Company’s compensation and governance committee certifies the achievement of the performance metric for the three-year period ending December 31, 2024, which will occur subsequent to the end of the performance period and after the Company files its annual consolidated financial statements for the year ending December 31, 2024.
The TSR goal is considered a market condition as opposed to a vesting condition. Because a market condition is not considered a vesting condition, it is reflected in the grant date fair value of the award and the associated compensation cost based on the fair value of the award is recognized over the performance period, regardless of whether the Company actually achieves the market condition or the level of achievement, as long as service is provided by the recipient. The Company used a Monte Carlo simulation to estimate the $ 8.82 weighted average fair value of the awards granted during the nine months ended September 30, 2022, with the following weighted average assumptions:
Expected dividend yield — %
Risk-free interest rate 1.51 %
Expected volatility 44.51 %
Expected term (in years) 2.91
2019 Grants
During the nine months ended September 30, 2022, the Compensation Committee of the Company’s Board certified the achievement of the performance metrics for the three-year period ended December 31, 2021, related to the performance stock units granted during the year ended December 31, 2019. These awards provided the recipients with the right to receive shares of common stock dependent on the achievement of two Company-specific financial performance targets and the provision of service through the vesting date, with each award holder eligible to earn a percentage of the target number of shares granted to the holder, ranging from zero to 200 %. The awards vested during the nine months ended September 30, 2022 at 100 % of target.
Award Activity
The following table summarizes the activity for the Company’s restricted stock units and performance stock units for the nine months ended September 30, 2022:
Restricted Stock Units Performance Stock Units
Number of
Units 		Weighted Average Grant Date Fair Value (per share) Number of
Units 		Weighted Average Grant Date Fair Value (per share)
Nonvested as of December 31, 2021 2,507,421 $ 15.68 1,117,555 $ 16.91
Granted 2,779,690 $ 10.28 295,132 $ 8.82
Vested ( 1,325,654 ) $ 15.67 ( 496,442 ) $ 15.41
Forfeited ( 973,308 ) $ 12.59 ( 165,807 ) $ 12.46
Nonvested as of September 30, 2022 2,988,149 $ 11.67 750,438 $ 15.70
29

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Stock-Based Compensation Expense
For the three months ended September 30, 2022 and 2021, stock-based compensation expense for the Company was $ 4,740 and $ 10,193 , respectively. The associated income tax benefit recognized in the statements of income for the three months ended September 30, 2022 and 2021 was $ 1,162 and $ 2,494 , respectively.
For the nine months ended September 30, 2022 and 2021, stock-based compensation expense for the Company was $ 17,419 and $ 22,837 , respectively. The associated income tax benefit recognized in the statements of income for the nine months ended September 30, 2022 and 2021 was $ 4,271 and $ 5,589 , respectively.
As of September 30, 2022, unrecognized compensation cost was $ 21,755 for restricted stock units and $ 3,083 for performance stock units considered probable of vesting. The weighted-average period over which these costs are expected to be recognized at September 30, 2022 was 1.46 years for the restricted stock units and 1.46 years for the performance stock units. Activity related to the Company’s stock options and restricted stock awards was not material for the nine months ended September 30, 2022.
20. Earnings per Share:
Basic earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding during the period for the computation of basic earnings per share excludes restricted stock awards that have legally been issued but are nonvested during the period, as the sale of these shares is prohibited pending satisfaction of certain vesting conditions by the award recipients in order to earn the rights to the shares.
Diluted earnings per share is calculated as income (loss) available to common stockholders, divided by the weighted average number of common and potential common shares outstanding during the period, if dilutive. Potential common shares reflect (1) unvested restricted stock awards and restricted stock units with service vesting conditions, (2) performance stock units with vesting conditions considered probable of achievement and (3) options to purchase common stock, all of which have been included in the diluted earnings per share calculation using the treasury stock method.
The reconciliation from basic to diluted weighted average shares outstanding is as follows:
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Weighted average shares outstanding – Basic 132,622,105 136,129,591 136,115,598 136,111,555
Dilutive effect of unvested common shares and restricted stock units with service conditions, performance stock units considered probable of vesting and assumed stock option exercises and conversions 1,474,734 1,224,836 1,550,617 —
Weighted average shares outstanding – Diluted 134,096,839 137,354,427 137,666,215 136,111,555
30

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
Basic and diluted income (loss) per share are calculated as follows:
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Numerator:
Income (loss) from continuing operations attributable to Ecovyst Inc. $ 21,325 $ 4,689 $ 48,445 $ ( 5,929 )
Loss from discontinued operations attributable to Ecovyst Inc. — ( 75,948 ) — ( 159,455 )
Net income (loss) attributable to Ecovyst Inc. $ 21,325 $ ( 71,259 ) $ 48,445 $ ( 165,384 )
Denominator:
Weighted average shares outstanding – Basic 132,622,105 136,129,591 136,115,598 136,111,555
Weighted average shares outstanding – Diluted 134,096,839 137,354,427 137,666,215 136,111,555
Net income (loss) per share:
Basic income (loss) per share - continuing operations $ 0.16 $ 0.03 $ 0.36 $ ( 0.04 )
Diluted income (loss) per share - continuing operations $ 0.16 $ 0.03 $ 0.35 $ ( 0.04 )
Basic loss per share - discontinued operations $ — $ ( 0.56 ) $ — $ ( 1.17 )
Diluted loss per share - discontinued operations $ — $ ( 0.55 ) $ — $ ( 1.17 )
Basic income (loss) per share $ 0.16 $ ( 0.52 ) $ 0.36 $ ( 1.22 )
Diluted income (loss) per share $ 0.16 $ ( 0.52 ) $ 0.35 $ ( 1.22 )
The table below presents the details of the Company’s weighted average equity-based awards outstanding during each respective period that were excluded from the calculation of diluted earnings per share:
Three months ended
September 30, 		Nine months ended
September 30,
2022 2021 2022 2021
Restricted stock awards with performance only targets not yet achieved 505,439 828,967 574,048 852,822
Stock options with performance only targets not yet achieved 300,788 375,733 316,187 376,448
Anti-dilutive restricted stock awards, restricted stock units and performance stock units 487,322 — 19,306 —
Anti-dilutive stock options 751,539 — 788,509 4,221
Restricted stock awards and stock options with performance only vesting conditions were not included in the dilution calculation, as the performance targets have not been achieved nor were probable of achievement as of the end of the respective periods. Certain stock options to purchase shares of common stock were excluded from the computation of diluted earnings per share for the respective periods, because the combination of the options’ exercise price and remaining unamortized stock-based compensation expense was greater than the average market price of the common shares. Anti-dilutive awards are not included in the dilution calculation, as their inclusion would have the effect of increasing diluted income per share.
31

ECOVYST INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
(unaudited)
21. Supplemental Cash Flow Information:
With the exception of operating leases, the following table presents supplemental cash flow information for the consolidated Company:
Nine months ended
September 30,
2022 2021
Cash paid during the period for:
Income taxes, net of refunds $ 24,367 $ 13,520
Interest (1)
24,390 43,115
Non-cash investing activity:
Capital expenditures acquired on account but unpaid as of the period end 4,993 3,052
Right-of-use assets obtained in exchange for new lease liabilities (non-cash):
Operating leases 6,187 7,946
(1) Cash paid for interest is shown net of capitalized interest for the periods presented and excludes $ 2,307 of net interest proceeds on swaps designated as net investment hedges for the nine months ended September 30, 2021, which are included within cash flows from investing activities, discontinued operations in the Company’s condensed consolidated statements of cash flows.
22. Subsequent Events:
The Company has evaluated subsequent events since the balance sheet date and determined that there are no additional items to disclose.

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ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Unless the context requires otherwise, references in this report to “Ecovyst,” “the company,” “we,” “us” or “our” refer to Ecovyst Inc. and its consolidated subsidiaries.
Forward-looking Statements
This periodic report on Form 10-Q (“Form 10-Q”) includes “forward-looking statements” that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should” and similar expressions are intended to identify these forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short- and long-term business operations and objectives, and financial needs. Examples of forward-looking statements include, but are not limited to, statements we make regarding demand trends, the impact of the novel coronavirus (“COVID-19”) pandemic and/or Russia’s invasion of Ukraine and related economic effects on our operations and financial results and our liquidity, and our belief that our current level of operations, cash and cash equivalents, cash flow from operations and borrowings under our credit facilities and other lines of credit will provide us adequate cash to fund the working capital, capital expenditure, debt service and other requirements for our business for at least the next twelve months.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Some of the key factors that could cause actual results to differ from our expectations include the following risks related to our business:
• as a global business, we are exposed to local business risks in different countries;
• we are affected by general economic conditions and economic downturns;
• exchange rate fluctuations could adversely affect our financial condition, results of operations and cash flows;
• our international operations require us to comply with anti-corruption laws, trade and export controls and regulations of the U.S. government and various international jurisdictions in which we do business;
• alternative technology or other changes in our customers’ products may reduce or eliminate the need for certain of our products;
• our new product development and research and development efforts may not succeed and our competitors may develop more effective or successful products;
• our substantial level of indebtedness could adversely affect our financial condition;
• if we are unable to manage the current and future inflationary environment and to pass on increases in raw material prices, including natural gas, or labor costs to our customers or to retain or replace our key suppliers, our results of operations and cash flows may be negatively affected;
• we face substantial competition in the industries in which we operate;
• we are subject to the risk of loss resulting from non-payment or non-performance by our customers;
• we rely on a limited number of customers for a meaningful portion of our business;
• multi-year customer contracts in our Ecoservices segment are subject to potential early termination and such contracts may not be renewed at the end of their respective terms;
• our quarterly results of operations are subject to fluctuations because demand for some of our products is seasonal;
• our growth projects may result in significant expenditures before generating revenues, if any, which may materially and adversely affect our ability to implement our business strategy;
• we may be liable to damages based on product liability claims brought against us or our customers for costs associated with recalls of our or our customers’ products;
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• we are subject to extensive environmental, health and safety regulations and face various risks associated with potential non-compliance or releases of hazardous materials;
• existing and proposed regulations to address climate change by limiting greenhouse gas emissions may cause us to incur significant additional operating and capital expenses and may impact our business and results of operations;
• production and distribution of our products could be disrupted for a variety of reasons, including as a result of supply chain constraints, and such disruptions could expose us to significant losses or liabilities;
• the insurance that we maintain may not fully cover all potential exposures;
• we could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications;
• our failure to protect our intellectual property and infringement on the intellectual property rights of third parties;
• disruption, failure or cyber security breaches affecting or targeting computers and infrastructure used by us or our business partners may adversely impact our business and operations
• the impact of the COVID-19 pandemic on the global economy and financial markets, as well as on our business and our suppliers, and the response of governments and of our company to the outbreak, including variants of the virus and associated containment, remediation and vaccination efforts; and
• other factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, as supplemented by “Item 1A, Risk Factors” in our quarterly reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022.
The forward-looking statements included herein are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q to conform these statements to actual results or to changes in our expectations.
Overview
We are a leading, integrated and innovative global provider of specialty catalysts and services. We believe that our products, which are predominantly inorganic, and services contribute to improving the sustainability of the environment.
We conduct operations through two reporting segments: (1) Ecoservices and (2) Catalyst Technologies (including our 50% interest in the Zeolyst Joint Venture).
Ecoservices: We are a leading provider of sulfuric acid recycling services to North American refineries for the production of alkylate, an essential gasoline component for lowering vapor pressure and increasing octane to meet stringent gasoline specifications and fuel efficiency standards. We are also a leading North American producer of on-purpose virgin sulfuric acid for water treatment, mining, and industrial applications.
Catalyst Technologies: We are a global supplier of finished silica catalysts and catalyst supports necessary to produce high strength and high stiffness plastics used in packaging films, bottles, containers, and other molded applications. This segment includes our 50% interest in the Zeolyst Joint Venture, where we are a leading global supplier of zeolites used for catalysts that help produce renewable fuels, remove nitrogen oxides from diesel engine emissions as well as sulfur from fuels during the refining process.
Impact of Russia’s invasion of Ukraine on our Business and Results
We are continuing to monitor the developments in Russia and Ukraine, as well as the related economic sanctions and export controls imposed on certain industry sectors. Although the current conflict has created global economic and political uncertainties and affected certain supply chain disruptions, we do not believe we have significant exposure in those countries. We have no operations in Russia or Ukraine. We had no sales to customers in Ukraine and our sales to a customer in Russia were immaterial for the nine months ended September 30, 2022 and 2021, respectively. We also did not make any purchases from suppliers in Russia or Ukraine. As Russia’s invasion of Ukraine continues to unfold, we will continue to monitor compliance with sanctions imposed by the U.S. government and other countries.
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Stock Repurchase Program
In April 2022, our Board of Directors approved and announced a new stock repurchase program authorizing the repurchase of up to $450 million of the Company’s outstanding common stock over the next four years. This program is expected to be funded using cash on hand and cash generated from operations. We primarily expect to conduct the repurchase program through negotiated transactions with the Company’s equity sponsors, as well as through open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases. The actual timing, number and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The repurchase program does not obligate us to acquire any number of shares in any specific period or at all and may be amended, suspended or discontinued at any time at our discretion.
On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA imposes a 15% corporate alternative minimum tax for certain large corporations with average annual adjusted financial statement income in excess of $1 billion for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. Historically, during the year we have made discretionary share repurchases. Beginning in 2023, these purchases would be subject to the excise tax. Based on the historical net repurchase activity the excise tax and the other provisions of the IRA are not expected to have a material impact on our results of operations or financial position. However, we are still in the process of analyzing the provisions of the IRA.
From the announcement date of the program through September 30, 2022, the Company repurchased 1,970,763 shares of its common stock on the open market at an average price of $9.82 per share, for a total of $19.4 million. Additionally, in connection with a secondary offering of the Company’s common stock in August 2022, the Company repurchased 6,500,000 shares of its common stock sold in the offering from the underwriters at a price of $8.36 per share simultaneous with the closing of the offering, for a total of $54.3 million. As of September 30, 2022, $376.3 million was available for additional share repurchases under the program. There were no repurchases during September 2022.
Key Performance Indicators
Adjusted EBITDA and Adjusted Net Income
Adjusted EBITDA and adjusted net income are financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and that we use to evaluate our operating performance, for business planning purposes and to measure our performance relative to that of our competitors. Adjusted EBITDA and adjusted net income are presented as key performance indicators as we believe these financial measures will enhance a prospective investor’s understanding of our results of operations and financial condition. EBITDA consists of net income (loss) attributable to continuing operations before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of EBITDA adjusted for (i) non-operating income or expense, (ii) the impact of certain non-cash, nonrecurring or other items included in net income (loss) and EBITDA that we do not consider indicative of our ongoing operating performance, and (iii) depreciation, amortization and interest of our 50% share of the Zeolyst Joint Venture. Adjusted net income consists of net income (loss) attributable to Ecovyst Inc. adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net income (loss) that we do not consider indicative of our ongoing operating performance. We believe that these non-GAAP financial measures provide investors with useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business.
You should not consider adjusted EBITDA or adjusted net income in isolation or as alternatives to the presentation of our financial results in accordance with GAAP. The presentation of adjusted EBITDA and adjusted net income financial measures may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. In evaluating adjusted EBITDA and adjusted net income, you should be aware that we are likely to incur expenses similar to those eliminated in this presentation in the future and that certain of these items could be considered recurring in nature. Our presentation of adjusted EBITDA and adjusted net income should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Reconciliations of adjusted EBITDA and adjusted net income to GAAP net income (loss) are included in the results of operations discussion that follows for each of the respective periods.
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Key Factors and Trends Affecting Operating Results and Financial Condition
Sales
Overall, our Ecoservices and Catalyst Technologies segments' sales have grown as high demand for our products continue from the lows experienced due to the impact of the COVID-19 global pandemic and extreme weather experienced in the Gulf region in 2021. Polyethylene demand has remained strong, driven by the growing consumer demand for stronger and lighter weighted plastics. Higher refinery utilization rates increased catalyst demand for both traditional and renewable fuels on the continued recovery in vehicle miles driven. Tightening gasoline standards and growing demand for premium grade gasoline to power fuel efficient engines has supported high alkylation utilization rates. Virgin sulfuric acid has benefited from strong mining for metals and minerals which provide conductivity in low carbon technologies, as well as strong demand from numerous industrial segments producing construction, auto, and packaging materials.
Sales in our Ecoservices and Catalyst Technologies segments are made on both a purchase order basis and pursuant to long-term contracts.
Our Catalyst Technologies segment may experience demand fluctuations based upon the timing of some of our customer’s fixed bed catalyst replacements.
Cost of Goods Sold
Cost of goods sold consists of variable product costs, fixed manufacturing expenses, depreciation expense and freight expenses. Variable product costs include all raw materials, energy and packaging costs that are directly related to the manufacturing process. Fixed manufacturing expenses include all plant employment costs, manufacturing overhead and periodic maintenance costs.
The primary raw materials for our Ecoservices segment include spent sulfuric acid, sulfur, acids, bases (including sodium hydroxide, or “caustic soda”), and certain metals. Spent sulfuric acid for our Ecoservices segment is supplied by customers. The primary raw materials used in the manufacture of products in our Catalyst Technologies segments include sodium silicate and cesium hydroxide.
Most of our Ecoservices contracts feature take-or-pay volume protection and/or quarterly price adjustments for commodity inputs, labor, the Chemical Engineering Index (U.S. chemical plant construction cost index) and natural gas. Over 80% of our Ecoservices segment sales for the year ended December 31, 2021 were under contracts featuring quarterly price adjustments. The price adjustments generally reflect actual costs for producing acid and tend to protect us from volatility in labor, fixed costs and raw material pricing. The take-or-pay volume protection allows us to cover fixed costs through intermittent, temporary production issues at customer refineries.
While natural gas is not a direct feedstock for any product, natural gas powered machinery and equipment are used to heat raw materials and create the chemical reactions necessary to produce end-products. We maintain multiple suppliers wherever possible and structure our customer contracts when possible to allow for the pass-through of raw material, labor and natural gas costs.
Joint Venture
We account for our investments in our equity joint ventures under the equity method. Our joint venture, the Zeolyst Joint Venture, manufactures high performance, specialty, zeolite-based catalysts for use in the packaging and engineered plastics, emission control, refining and petrochemical industries and other areas of the broader chemicals industry. Demand for the Zeolyst Joint Venture products fluctuates based upon the timing of our customer’s fixed bed catalyst replacements. We share proportionally in the management of our joint venture with the other parties to such joint venture.
Seasonality
Our regeneration services product group, which is a part of our Ecoservices segment, typically experiences seasonal fluctuations as a result of higher demand for gasoline products in the summer months and lower demand in the winter months. These demand fluctuations result in higher sales and working capital requirements in the second and third quarter.
Foreign Currency
As a global business, we are subject to the impact of gains and losses on currency translations, which occur when the financial statements of foreign operations are translated into U.S. dollars. We operate in various geographies with approximately 6% of our sales for the nine months ended September 30, 2022 and for the year ended December 31, 2021 in currencies other than the U.S. dollar. Because our consolidated financial results are reported in U.S. dollars, sales or earnings generated in currencies other than the U.S. dollar can result in a significant increase or decrease in the amount of those sales and earnings when translated to U.S. dollars. The foreign currency to which we have the most significant exchange rate exposure is the British pound.
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Results of Operations
Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021
Highlights
The following is a summary of our financial performance for the three months ended September 30, 2022 compared with the three months ended September 30, 2021.
Sales
• Sales increased $65.1 million to $232.5 million. The increase in sales was primarily due to higher sales volumes and higher average selling prices, including the favorable pass-through of sulfur pricing.
Gross Profit
• Gro ss profit increased $14.1 million to $67.7 million. The increase in gross profit was primarily due t o higher sales volumes and favorable pricing, partially offset by increased manufacturing costs.
Operating Income
• Operating income increased by $16.0 million to $38.5 million. The increase in operating income was due to an increase in gross profit and lower selling, general and administrative expenses, partially offset by higher other operating expenses.
Equity in Net Income of Affiliated Companies
• Equity in net income of affiliated companies for the three months ended September 30, 2022 was $3.2 million, compared to $8.8 million for the three months ended September 30, 2021. The decrease of $5.6 million was due to lower earnings generated by the Zeolyst Joint Venture for the three months ended September 30, 2022, driven by lower sales volumes within the joint venture.
37
The following is our unaudited condensed consolidated statements of income and a summary of financial results for the three months ended September 30, 2022 and 2021:
Three months ended
September 30, 		Change
2022 2021 $ %
(in millions, except percentages)
Sales $ 232.5 $ 167.4 $ 65.1 38.9 %
Cost of goods sold 164.8 113.8 51.0 44.8 %
Gross profit 67.7 53.6 14.1 26.3 %
Gross profit margin 29.1 % 32.0 %
Selling, general and administrative expenses 21.5 24.8 (3.3) (13.3) %
Other operating expense, net 7.7 6.3 1.4 22.2 %
Operating income 38.5 22.5 16.0 71.1 %
Operating income margin 16.6 % 13.4 %
Equity in net (income) from affiliated companies (3.2) (8.8) 5.6 (63.6) %
Interest expense, net 9.5 9.0 0.5 5.6 %
Debt extinguishment costs — 15.2 (15.2) (100.0) %
Other expense (income), net 1.9 (0.2) 2.1 NM
Income before income taxes and noncontrolling interest 30.3 7.3 23.0 315.1 %
Provision for income taxes 9.0 2.6 6.4 246.2 %
Effective tax rate 29.6 % 35.6 %
Net income from continuing operations 21.3 4.7 16.6 353.2 %
Net loss from discontinued operations, net of tax — (75.9) 75.9 (100.0) %
Net income (loss) 21.3 (71.2) 92.5 (129.9) %
Less: Net income attributable to the noncontrolling interest—discontinued operations — 0.1 (0.1) (100.0) %
Net income (loss) attributable to Ecovyst Inc. $ 21.3 $ (71.3) $ 92.6 (129.9) %
Sales
Three months ended
September 30, 		Change
2022 2021 $ %
(in millions, except percentages)
Sales:
Ecoservices $ 195.7 $ 137.5 $ 58.2 42.3 %
Catalyst Technologies 36.8 29.9 6.9 23.1 %
Total sales $ 232.5 $ 167.4 $ 65.1 38.9 %
Ecoservices: Sales in Ecoservices for the three months ended September 30, 2022 were $195.7 million, an increase of $58.2 million, or 42.3%, compared to sales of $137.5 million for the three months ended September 30, 2021. The increase in sales was due to higher average selling prices of $53.3 million and a $4.9 million contribution from higher sales volumes.
Higher average selling prices were primarily a result of the pass-through of higher sulfur costs of $28.3 million within our virgin sulfuric acid product group and the pass-through of other raw material costs within our regenerations services product group. The increase in volumes was primarily driven by strong demand for regeneration services during the quarter.
Catalyst Technologies: Sales in Catalyst Technologies for the three months ended September 30, 2022 were $36.8 million, an increase of $6.9 million, or 23.1%, compared to sales of $29.9 million for the three months ended September 30, 2021. Of the increase in sales, $9.9 million was associated with higher sales volumes, driven by demand for our polyethylene catalysts, partially offset by price of $0.3 million and unfavorable foreign exchange of $2.7 million.
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Gross Profit
Gross profit for the three months ended September 30, 2022 was $67.7 million, an increase of $14.1 million, or 26.3%, compared with $53.6 million for the thre e months ended September 30, 2021. The increase in gross profit was due to higher sales volumes, which accounted for $13.6 million of the increase, and higher average selling prices of $53.0 million, which were partially offset by unfavorable manufacturing costs of $47.8 million and a $4.7 million impact associated with a less-favorable sales mix.
The favorable change in volumes was a result of increased demand for our polyethylene catalysts, niche custom catalysts, and regeneration services. Favorable customer pricing was primarily driven by increased prices to cover rising variable costs, including the pass-through of sulfur, labor index and energy costs within our Ecoservices business. The increase in manufacturing costs was a result of higher variable costs, maintenance and transportation costs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended September 30, 2022 were $21.5 million, a decrease of $3.3 million compared with $24.8 million for the three months ended September 30, 2021. The decrease in selling, general and administrative expenses was primarily due to a decrease in stock-based compensation expense of $5.5 million, which consisted of $4.0 million of incremental cost recognized during the three months ended September 30, 2021 in connection with the modifications of our equity incentive awards and stock options associated with the special dividend and sale of the Performance Chemicals business in August 2021, with the remaining decrease driven by forfeitures of equity incentive awards in 2022 by former Company executives and employees of the Performance Chemicals business. This was partially offset by higher other compensation-related expenses of $1.2 million and net increases in other costs of $1.0 million.
Other Operating Expense, Net
Other operating expense, net for the three months ended September 30, 2022 was $7.7 million, an increase of $1.4 million, compared with $6.3 million for the three months ended September 30, 2021. The increase in other operating expense, net was mainly driven by severance charges incurred from contracts associated with former executives incurred in the current period $1.2 million.
Equity in Net Income of Affiliated Companies
Equity in net income of affiliated comp anies for the three months ended September 30, 2022 was $3.2 million, compared to $8.8 million for the three months ended September 30, 2021. The decrease was primarily due to $5.7 million of lower earnings from the Zeolyst Joint Venture during the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. The decrease in earnings from the Zeolyst Joint Venture was due to lower sales volumes for our hydrocracking and specialty catalysts.
Interest Expense, Net
Interest expense, net for the three month s ended September 30, 2022 was $9.5 million, an increase of $0.5 million, as compared with $9.0 million for the three months ended September 30, 2021. The increase in interest expense, net was primarily due to the year over year increase in variable rate debt, which was partially offset by lower outstanding debt during the three months ended September 30, 2022 as compared to the three months ended September 30, 2021.
Debt Extinguishment Costs
Debt extinguishment costs for the three months ended September 30, 2021 were $15.2 million.
Concurrent with, and using a portion of the net cash proceeds from, the divestiture of the Performance Chemicals business in August 2021, we repaid the remaining balance on our 2016 Term Loan Facility and redeemed the Senior Notes. In connection with the redemption of the Senior Notes, we paid a redemption premium of $8.5 million, which was recorded as debt extinguishment costs during the three months ended September 30, 2021. We wrote off $0.8 million of unamortized deferred financing costs and $2.4 million of original issue discount related to the 2016 Term Loan Facility and $2.3 million of unamortized deferred financing costs and $1.2 million of original issue discount related to the Senior Notes as debt extinguishment costs during the three months ended September 30, 2021.

39
Other Expense (Income), Net
Other expense (income), net for the three months ended September 30, 2022 was expense of $1.9 million, a change of $2.1 million, as compared with income of $0.2 million for the three months ended September 30, 2021. The change in other expense, net primarily consisted of a lower net periodic benefit for the defined benefit pension and postretirement plans of $0.9 million and increases in other net costs of $1.2 million.
Provision for Income Taxes
The provision for income taxes for the three months ended September 30, 2022 was $9.0 million compared to a $2.6 million provision for the three months ended September 30, 2021. The effective income tax rate for the three months ended September 30, 2022 was 29.6% compared to 35.6% for the three months ended September 30, 2021.
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the three months ended September 30, 2022 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation, and a discrete tax expense associated with the Employee Retention Credit.
Net Income (Loss) Attributable to Ecovyst
After the effect of the non-controlling interest in earnings of subsidiaries for each period presented, net income attributable to Ecovyst was $21.3 million for the three months ended September 30, 2022 compared with net loss of $71.3 million for the three months ended September 30, 2021.
Adjusted EBITDA
Summarized Segment Adjusted EBITDA information is shown below in the following table:
Three months ended
September 30, 		Change
2022 2021 $ %
(in millions, except percentages)
Segment Adjusted EBITDA: (1)
Ecoservices $ 64.1 $ 51.9 $ 12.2 23.5 %
Catalyst Technologies (2)
19.3 25.5 (6.2) (24.3) %
Unallocated corporate expenses
(8.0) (8.0) — — %
Total Adjusted EBITDA $ 75.4 $ 69.4 $ 6.0 8.6 %
(1) We define Segment Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Segment Adjusted EBITDA. Segment Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Segment Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.
(2) The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment was $8.7 million for the three months ended September 30, 2022, which includes $3.2 million of equity in net income, excluding $1.6 million of amortization of investment in affiliate step-up plus $3.9 million of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment was $14.5 million for the three months ended September 30, 2021, which includes $8.8 million of equity in net income, excluding $1.6 million of amortization of investment in affiliate step-up plus $4.1 million of joint venture depreciation, amortization and interest.
Ecoservices: Adjusted EBITDA for the three months ended September 30, 2022 was $64.1 million, an increase of $12.2 million, or 23.5%, compared with $51.9 million for the three months ended September 30, 2021. The increase in Adjusted EBITDA was a result of favorable regeneration services and virgin sulfuric acid pricing that more than covered higher variable costs, along with increased demand for regeneration services during the quarter.
Catalyst Technologies: Adjusted EBITDA for the three months ended September 30, 2022 was $19.3 million, a decrease of $6.2 million, or 24.3%, compared with $25.5 million for the three months ended September 30, 2021. The decrease in Adjusted EBITDA was primarily a result of unfavorable product mix and higher production costs, partially offset by higher sales volumes.
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A reconciliation of net income from continuing operations to Adjusted EBITDA is as follows:

Three months ended
September 30,
2022 2021
(in millions)
Reconciliation of net income from continuing operations to Adjusted EBITDA
Net income from continuing operations $ 21.3 $ 4.7
Provision for income taxes 9.0 2.6
Interest expense, net 9.5 9.0
Depreciation and amortization 19.6 20.6
EBITDA 59.4 36.9
Joint venture depreciation, amortization and interest (a)
3.9 4.1
Amortization of investment in affiliate step-up (b)
1.6 1.6
Debt extinguishment costs — 15.2
Net loss on asset disposals (c)
0.5 2.2
Foreign currency exchange loss (d)
1.0 0.9
LIFO benefit (e)
(0.4) (1.3)
Transaction and other related costs (f)
1.8 0.5
Equity-based compensation 4.7 10.2
Restructuring, integration and business optimization expenses (g)
1.3 0.1
Defined benefit pension expense (benefit) (h)
0.3 (1.0)
Other (i)
1.3 —
Adjusted EBITDA $ 75.4 $ 69.4
(a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalyst Technologies segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.
(b) Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with fixed assets and intangible assets, including customer relationships and technical know-how.
(c) When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.
(d) Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income, which primarily relates to the non-permanent intercompany debt denominated in local currency translated to U.S. dollars.
(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.
(f) Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations.
(g) Includes the impact of restructuring, integration and business optimization expenses which are incremental costs that are not representative of our ongoing business operations.
(h) Represents adjustments for defined benefit pension plan (benefit) costs in our statements of income. All of our defined benefit pension plan obligations are under defined benefit pension plans that are frozen. As such, we do not view such income or expenses as core to our ongoing business operations.
(i) Other costs consist of certain expenses that are not core to our ongoing business operations, including environmental remediation-related costs, capital and franchise taxes. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions).
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Adjusted Net Income
Summarized adjusted net income information is shown below in the following table:
Three months ended September 30,
2022 2021
Pre-tax Tax expense (benefit) After-tax Pre-tax Tax expense (benefit) After-tax
(in millions)
Reconciliation of net income from continuing operations to Adjusted Net Income (1)(2)
Net income attributable to Ecovyst Inc. $ 30.3 $ 9.0 $ 21.3 $ 7.3 $ 2.6 $ 4.7
Amortization of investment in affiliate step-up (b)
1.6 0.5 1.1 1.6 0.5 1.1
Debt extinguishment costs — — — 15.2 4.4 10.8
Net loss on asset disposals (c)
0.5 0.2 0.3 2.2 0.5 1.7
Foreign currency exchange loss (d)
1.0 0.2 0.8 0.9 0.2 0.7
LIFO benefit (e)
(0.4) (0.1) (0.3) (1.3) (0.4) (0.9)
Transaction and other related costs (f)
1.8 0.5 1.3 0.5 0.2 0.3
Equity-based compensation 4.7 0.1 4.6 10.2 2.9 7.3
Restructuring, integration and business optimization expenses (g)
1.3 0.4 0.9 0.1 0.1 —
Defined benefit pension plan expense (benefit) (h)
0.3 0.1 0.2 (1.0) (0.3) (0.7)
Other (i)
1.3 0.4 0.9 — — —
Adjusted Net Income, including Intraperiod allocation $ 42.4 $ 11.3 $ 31.1 $ 35.7 $ 10.7 $ 25.0
Intraperiod allocation for restating discontinued operations (3)
— — — — (0.5) 0.5
Adjusted Net Income $ 42.4 $ 11.3 $ 31.1 $ 35.7 $ 10.2 $ 25.5
(1) We define adjusted net income as net income attributable to Ecovyst adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted net income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted net income may not be comparable with net income or adjusted net income as defined by other companies.
(2) Refer to the Adjusted EBITDA notes above for more information with respect to each adjustment.
(3) Due to the sale of the Performance Chemicals business, the tax rates used to value deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) needs to be adjusted. Given it is a direct result of the sale of discontinued operations and the need to adjust the tax rates arose because of discontinued operations, the impact of revaluing the reporting entity’s DTAs and DTLs are reflected in continuing operations.
The adjustments to net income attributable to Ecovyst Inc. are shown net of applicable tax rates as determined by the calculation of our quarterly tax provision under interim financial reporting for the three months ended September 30, 2022 and September 30, 2021, except for the foreign currency exchange loss, impacts of tax rate changes and the effects of the sale of assets for which the taxes are calculated as discrete items using the applicable statutory income tax rates.
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Results of Operations
Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021
Highlights
The following is a summary of our financial performance for the nine months ended September 30, 2022 compared with the nine months ended September 30, 2021.
Sales
• Sales increased $196.4 million to $637.4 million. The increase in sales was primarily due to higher sales volumes and higher average selling prices, including the favorable pass-through of sulfur pricing.
Gross Profit
• Gross profit increased $53.1 million to $175.3 million. The increase in gross profit was primarily due to the higher sales volume and favorable pricing, partially offset by increased manufacturing costs.
Operating Income
• Operating income increased by $45.8 million to $82.4 million. The increase in operating income was due to an increase in gross profit and lower selling, general and administrative expenses, partially offset by higher other operating expenses.
Equity in Net Income of Affiliated Companies
• Equity in net income of affiliated companies for the nine months ended September 30, 2022 was $17.4 million, compared with $20.7 million for the nine months ended September 30, 2021. The decrease of $3.3 million was due to lower earnings generated by the Zeolyst Joint Ventur e during the nine months ended September 30, 2022, driven by lower sales volumes within the joint venture.

43
The following is our unaudited condensed consolidated statements of income and a summary of financial results for the nine months ended September 30, 2022 and 2021:
Nine months ended
September 30, 		Change
2022 2021 $ %
(in millions, except percentages)
Sales $ 637.4 $ 441.0 $ 196.4 44.5 %
Cost of goods sold 462.2 318.8 143.4 45.0 %
Gross profit 175.3 122.2 53.1 43.5 %
Gross profit margin 27.5 % 27.7 %
Selling, general and administrative expenses 67.8 68.8 (1.0) (1.5) %
Other operating expense, net 25.1 16.8 8.3 49.4 %
Operating income 82.4 36.6 45.8 125.1 %
Operating income margin 12.9 % 8.3 %
Equity in net (income) from affiliated companies (17.4) (20.7) 3.3 (15.9) %
Interest expense, net 26.9 28.2 (1.3) (4.6) %
Debt extinguishment costs — 26.9 (26.9) (100.0) %
Other expense, net 2.5 3.1 (0.6) (19.4) %
Income (loss) before income taxes and noncontrolling interest 70.4 (0.9) 71.3 NM
Provision for income taxes 22.0 5.1 16.9 331.4 %
Effective tax rate 31.2 % (610.9) %
Net income (loss) from continuing operations 48.4 (6.0) 54.4 (906.7) %
Net loss from discontinued operations, net of tax — (159.1) 159.1 (100.0) %
Net income (loss) 48.4 (165.1) 213.5 (129.3) %
Less: Net income attributable to the noncontrolling interest—discontinued operations — 0.3 (0.3) (100.0) %
Net income (loss) attributable to Ecovyst Inc. $ 48.4 $ (165.4) $ 213.8 (129.3) %
Sales
Nine months ended
September 30, 		Change
2022 2021 $ %
Sales: (in millions, except percentages)
Ecoservices $ 542.7 $ 358.5 $ 184.2 51.4 %
Catalyst Technologies 94.7 82.5 12.2 14.8 %
Total sales $ 637.4 $ 441.0 $ 196.4 44.5 %

Ecoservices : Sales in Ecoservices for the nine months ended September 30, 2022 were $542.7 million, an increase of $184.2 million, or 51.4%, compared to sales of $358.5 million for the nine months ended September 30, 2021. The increase in sales reflects a $146.5 million increase associated with higher average selling prices and a $37.7 million contribution from higher sales volumes. Higher average selling prices benefited from favorable pricing, including the pass-through of higher freight, labor, and energy indexed costs, as well as the pass-through of higher sulfur costs of $87.2 million. Sales volumes increased in both regeneration services and virgin sulfuric acid driven in large part by demand recovery.
Catalyst Technologies: Sales in Catalyst Technologies for the nine months ended September 30, 2022 were $94.7 million, an increase of $12.2 million, or 14.8%, compared to sales of $82.5 million for the nine months ended September 30, 2021. The increase in sales was driven by demand for our polyethylene catalysts and higher average selling prices.

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Gross Profit
Gross profit for the nine months ended September 30, 2022 was $175.3 million, an increase of $53.1 million, or 43.5%, compared with $122.2 million for the nine mon ths ended September 30, 2021. The increase in gross profit reflects a $39.6 million contribution associated with higher sales volumes, and higher average selling prices of $151.9 million, which were partially offset by higher manufacturing costs of $127.9 million and a $10.5 million impact associated with less favorable product mix.
The increase in gross profit was driven by favorable pricing, including the pass through of higher variable and sulfur costs, along with higher volume demand in both the Ecoservices and Catalyst Technologies businesses. Rising inflation costs on raw materials, energy, and transportation primarily drove the higher manufacturing costs that were more than offset in price.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the nine months ended September 30, 2022 was $67.8 million, a decrease of $1.0 million as compared to $68.8 million for the nine months ended September 30, 2021. The decrease in selling, general and administrative expenses was due to a decrease in stock-based compensation expense of $5.4 million, which consisted of $4.0 million of incremental cost recognized during the nine months ended September 30, 2021 in connection with the modifications of our equity incentive awards and stock options associated with the special dividend and sale of the Performance Chemicals business in August 2021, with the remaining decrease driven by forfeitures of equity incentive awards in 2022 by former Company executives and employees of the Performance Chemicals business. This was mostly offset by $3.4 million of income generated during the nine months ended September 30, 2021 from the transition service agreements entered into as part of the sales of the Performance Materials and Performance Chemicals businesses, and net decreases in other costs of $1.0 million.
Other Operating Expense, Net
Other operating expense, net for the nine months e nded September 30, 2022 was $25.1 million, an increase of $8.3 million, compared with $16.8 million for the nine months ended September 30, 2021. The increase in other operating expense, net was mainly driven by increases of $3.4 million in severance charges associated with former executives and $5.9 million in residual costs from the Performance Chemicals divestiture and other transactions costs.
Equity in Net Income of Affiliated Companies
Equity in net income of affiliated companies for the nine months ended September 30, 2022 was $17.4 million, compared to $20.7 million for the nine months ended September 30, 2021. The decrease was primarily due to $3.3 million of lower earnings from the Zeolyst Joint Ventur e during the nine months ended September 30, 2022 .
Interest Expense, Net
Interest expense, net for the nine months ended September 30, 2022 was $26.9 million, a decrease of $1.3 million, as compared with $28.2 million for the nine months ended September 30, 2021. The decrease in interest expense, net was primarily due to lower debt balances, partially offset by rising variable interest rates.
Debt Extinguishment Cost s
Debt extinguishment costs were $26.9 million for the nine months ended September 30, 2021.
Concurrent with, and using a portion of the net cash proceeds from, the divestiture of the Performance Chemicals business in August 2021, we repaid the remaining balance on our 2016 Term Loan Facility and redeemed the Senior Notes. In connection with the redemption of the Senior Notes, we paid a redemption premium of $8.5 million, which was recorded as debt extinguishment costs during the nine months ended September 30, 2021. We wrote off $0.8 million of unamortized deferred financing costs and $2.4 million of original issue discount related to the 2016 Term Loan Facility and $2.3 million of unamortized deferred financing costs and $1.2 million of original issue discount related to the Senior Notes as debt extinguishment costs during the nine months ended September 30, 2021.
In June 2021, we entered into an agreement for a new senior secured term loan facility and used the proceeds to repay a portion of our existing term loan facilities. As a result of this transaction, we recorded $5.7 million of new creditor and third-party financing costs as debt extinguishment costs during the three months ended September 30, 2021. In addition, previous unamortized deferred financing costs of $1.7 million and original issue discount of $3.7 million associated with the previously outstanding debt were written off as debt extinguishment costs.
In June 2021, we amended our ABL Credit Agreement to decrease the aggregate amount of revolving loan commitments and extend the maturity date. As a result of the amendment, we wrote off $0.6 million of unamortized deferred financing costs as debt extinguishment costs.
45
Other Expense, Net
Other expense, net for the nine months ended September 30, 2022 was $2.5 million, a decrease of $0.6 million, as compared to $3.1 million for the nine months ended September 30, 2021. The decrease in other expense, net primarily consisted of foreign currency exchange of $2.6 million related to the non-permanent intercompany debt denominated in local currency and translated to the U.S. dollar, partially offset by a lower net periodic benefit of $1.1 million for the defined benefit pension and postretirement plans.
Provision for Income Taxes
The provision for income taxes for the nine months ended September 30, 2022 was $22.0 million compared to a $5.1 million for the nine months ended September 30, 2021. The effective income tax rate for the nine months ended September 30, 2022 was 31.2% compared to (610.9)% for the nine months ended September 30, 2021.
The Company’s effective income tax rate fluctuates primarily due to GILTI, discrete impacts of the divestiture of the Performance Chemicals business, and tax rate changes.
The difference between the U.S. federal statutory income tax rate and the Company’s effective income tax rate for the nine months ended September 30, 2022 was mainly due to state and local taxes, a discrete shortfall tax expense related to stock compensation, and a discrete tax expense associated with the Employee Retention Credit.
Net Income (Loss) Attributable to Ecovyst
After the effect of the non-controlling interest in earnings of subsidiaries for the period ending September 30, 2021, net income attributable to Ecovyst was $48.4 million for the nine months ended September 30, 2022 compared with net loss of $165.4 million for the nine months ended September 30, 2021.
Adjusted EBITDA
Summarized Adjusted EBITDA information is shown below in the following table:
Nine months ended
September 30, 		Change
2022 2021 $ %
(in millions, except percentages)
Adjusted EBITDA: (1)
Ecoservices $ 173.4 $ 125.4 $ 48.0 38.3 %
Catalyst Technologies (2)
57.7 64.6 (6.9) (10.7) %
Unallocated corporate expenses (23.5) (25.6) 2.1 (8.2) %
Total $ 207.6 $ 164.4 $ 43.2 26.3 %
(1) We define Adjusted EBITDA as EBITDA adjusted for certain items as noted in the reconciliation below. Our management evaluates the performance of our segments and allocates resources based primarily on Adjusted EBITDA. Adjusted EBITDA does not represent cash flow for periods presented and should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flows as a source of liquidity. Adjusted EBITDA may not be comparable with EBITDA or Adjusted EBITDA as defined by other companies.
(2) The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment is $34.3 million for the nine months ended September 30, 2022, which includes $17.5 million of equity in net income, excluding $4.8 million of amortization of investment in affiliate step-up plus $12.0 million of joint venture depreciation, amortization and interest. The Adjusted EBITDA from the Zeolyst Joint Venture included in the Catalyst Technologies segment is $37.1 million for the nine months ended September 30, 2021, which includes $20.8 million of equity in net income, excluding $4.9 million of amortization of investment in affiliate step-up plus $11.4 million of joint venture depreciation, amortization and interest.
Ecoservices: Adjusted EBITDA for the nine months ended September 30, 2022 was $173.4 million, an increase of $48.0 million, or 38.3%, compared with $125.4 million for the nine mo nths ended September 30, 2021. The increase in Adjusted EBITDA was a result of higher volumes, favorable pricing covering rising input costs, including the pass-through of higher sulfur costs, higher raw material and maintenance costs.

46
Catalyst Technologies: Adjusted EBITDA for the nine months ended September 30, 2022 was $57.7 million, a decrease of $6.9 million, or 10.7%, compared with $64.6 million for the nine months ended September 30, 2021. The decrease in Adjusted EBITDA was due to a less-favorable product mix, as well as higher input and energy production costs, partially offset by higher sales volumes and average selling prices.
A reconciliation of net income (loss) from continuing operations to Adjusted EBITDA is as follows:
Nine months ended
September 30,
2022 2021
(in millions)
Reconciliation of net income (loss) from continuing operations to Adjusted EBITDA
Net income (loss) from continuing operations $ 48.4 $ (6.0)
Provision for income taxes 22.0 5.1
Interest expense, net 26.9 28.2
Depreciation and amortization 58.8 60.1
EBITDA 156.1 87.4
Joint venture depreciation, amortization and interest (a)
12.0 11.4
Amortization of investment in affiliate step-up (b)
4.8 4.9
Debt extinguishment costs — 26.9
Net loss on asset disposals (c)
1.2 4.5
Foreign currency exchange loss (d)
2.2 4.8
LIFO benefit (e)
— (2.0)
Transaction and other related costs (f)
6.9 1.6
Equity-based compensation 17.4 22.8
Restructuring, integration and business optimization expenses (g)
6.4 2.4
Defined benefit pension plan benefit (h)
(0.8) (2.2)
Other (i)
1.4 1.9
Adjusted EBITDA $ 207.6 $ 164.4
(a) We use Adjusted EBITDA as a performance measure to evaluate our financial results. Because our Catalyst Technologies segment includes our 50% interest in the Zeolyst Joint Venture, we include an adjustment for our 50% proportionate share of depreciation, amortization and interest expense of the Zeolyst Joint Venture.
(b) Represents the amortization of the fair value adjustments associated with the equity affiliate investment in the Zeolyst Joint Venture as a result of the combination of the businesses of PQ Holdings Inc. and Eco Services Operations LLC in May 2016. We determined the fair value of the equity affiliate investment and the fair value step-up was then attributed to the underlying assets of the Zeolyst Joint Venture. Amortization is primarily related to the fair value adjustments associated with fixed assets and intangible assets, including customer relationships and technical know-how.
(c) When asset disposals occur, we remove the impact of net gain/loss of the disposed asset because such impact primarily reflects the non-cash write-off of long-lived assets no longer in use.
(d) Reflects the exclusion of the foreign currency transaction gains and losses in the statements of income, primarily related to the non-permanent intercompany debt denominated in local currency translated to U.S. dollars.
(e) Represents non-cash adjustments to the Company’s LIFO reserves for certain inventories in the U.S. that are valued using the LIFO method, which we believe provides a means of comparison to other companies that may not use the same basis of accounting for inventories.
(f) Relates to certain transaction costs, including debt financing, due diligence and other costs related to transactions that are completed, pending or abandoned, that we believe are not representative of our ongoing business operations.
(g) Includes the impact of restructuring, integration and business optimization expenses which are incremental costs that are not representative of our ongoing business operations.
(h) Represents adjustments for defined benefit pension plan (benefit) costs in our statements of income. All of our defined benefit pension plan obligations are under defined benefit pension plans that are frozen. As such, we do not view such income or expenses as core to our ongoing business operations.
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(i) Other costs consist of certain expenses that are not core to our ongoing business operations, including environmental remediation-related costs, capital and franchise taxes. Included in this line-item are rounding discrepancies that may arise from rounding from dollars (in thousands) to dollars (in millions).
Adjusted Net Income
Summarized adjusted net income information is shown below in the following table:
Nine months ended September 30,
2022 2021
Pre-tax Tax expense (benefit) After-tax Pre-tax Tax expense (benefit) After-tax
(in millions)
Reconciliation of net income (loss) from continuing operations to Adjusted Net Income (1)(2)
Net income (loss) attributable to Ecovyst Inc.
$ 70.4 $ 22.0 $ 48.4 $ (0.9) $ 5.1 $ (6.0)
Amortization of investment in affiliate step-up (b)
4.8 1.3 3.5 4.9 1.4 3.5
Debt extinguishment costs — — — 26.9 7.5 19.4
Net loss on asset disposals (c)
1.2 0.3 0.9 4.5 1.2 3.3
Foreign currency exchange loss (d)
2.2 0.4 1.8 4.8 1.3 3.5
LIFO benefit (e)
— — — (2.0) (0.6) (1.4)
Transaction and other related costs (f)
6.9 1.7 5.2 1.6 0.5 1.1
Equity-based compensation (3)
17.4 0.6 16.8 22.8 6.4 16.4
Restructuring, integration and business optimization expenses (g)
6.4 1.8 4.6 2.4 0.7 1.7
Defined benefit pension plan benefit (h)
(0.8) (0.2) (0.6) (2.2) (0.6) (1.6)
Other (i)
1.4 0.4 1.0 1.9 0.6 1.3
Adjusted Net Income, including Intraperiod allocation $ 109.9 $ 28.3 $ 81.6 $ 64.7 $ 23.5 $ 41.2
Intraperiod allocation for restating discontinued operations (4)
— — — — (5.3) 5.3
Adjusted Net Income $ 109.9 $ 28.3 $ 81.6 $ 64.7 $ 18.2 $ 46.5
(1) We define adjusted net income as net income attributable to Ecovyst adjusted for non-operating income or expense and the impact of certain non-cash or other items that are included in net income that we do not consider indicative of our ongoing operating performance. Adjusted net income is presented as a key performance indicator as we believe it will enhance a prospective investor’s understanding of our results of operations and financial condition. Adjusted net income may not be comparable with net income or adjusted net income as defined by other companies.
(2) Refer to the Adjusted EBITDA notes above for more information with respect to each adjustment.
(3) Includes tax adjustments for the shortfall in stock compensation.
(4) Due to the sale of the Performance Chemicals business, the tax rates used to value deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) needs to be adjusted. Given it is a direct result of the sale of discontinued operations and the need to adjust the tax rates arose because of discontinued operations, the impact of revaluing the reporting entity’s DTAs and DTLs are reflected in continuing operations.
The adjustments to net income attributable to Ecovyst Inc. are shown net of applicable tax rates of 27.7% and 28.0% for the nine months ended September 30, 2022 and 2021, respectively, except for the foreign currency exchange loss, equity-based compensation, transactions and other related costs, and discrete impacts of the divestiture of the Performance Chemicals business.

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Financial Condition, Liquidity and Capital Resources
Our primary sources of liquidity consist of cash flows from operations, existing cash balances as well as funds available under our asset based lending revolving credit facility. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources of funds. Our primary liquidity requirements include funding working capital requirements (primarily inventory and accounts receivable, net of accounts payable and other accrued liabilities), debt service requirements and capital expenditures. Our capital expenditures include both maintenance of business, which include spending on maintenance and health, safety and environmental initiatives as well as growth, which includes spending to drive organic sales growth and cost savings initiatives.
We believe that our existing cash, cash equivalents and cash flows from operations, combined with availability under our asset based lending revolving credit facility, will be sufficient to meet our presently anticipated future cash needs for at least the next twelve months. We may also pursue strategic acquisition or divestiture opportunities, wh ich may impact our future cash requirements. We may, from time to time, increase borrowings under our asset based lending revolving credit facility to meet our future cash needs. As of September 30, 2022, we had cash and cash equivalents of $121.4 million and availability of $77.6 million under our asset based lending revolving credit facility, after giving effect to $4.0 million of outstanding letters of credit, for a total available liquidity of $199.0 million. We did not have any revolving credit facility borrowings as of September 30, 2022. As of September 30, 2022, we were in compliance with all covenants under our debt agreements.
We held an immaterial balance of cash and cash equivalents in foreign jurisdictions as of September 30, 2022. We continue to repatriate cash held outside of the United States from certain foreign subsidiaries in order to meet domestic liquidity needs. Depending on domestic and foreign cash balances, we have certain flexibility to repatriate funds in order to meet those needs. Specifically, we have an intercompany loan structure in place with foreign subsidiaries that allows us to repatriate foreign cash in a tax efficient manner from those subsidiaries. Repatriation of foreign cash is generally not subject to U.S. federal income taxes at the time of cash distribution. However, foreign earnings may still be taxed for state income tax purposes, as well as subject to certain foreign withholding tax obligations, when cash amounts are distributed back to the U.S.
Our liquidity requirements include interest payments related to our debt structure. As reported, our cash interest paid for the nine months ended September 30, 2022 and 2021 wa s approximately $24.4 million and $43.1 million, respectively. Before any impact of hedges, a one percent change in assumed interest rates for our variable interest credit facilities would have an annual impact of approximately $8.9 million on interest expense. We hedge the interest rate fluctuations on debt obligations through interest rate cap agreements. As of September 30, 2022, we had a $400.0 million of notional variable-rate debt with a cap rate of 1.00% through August 2023, a $250.0 million of notional variable-rate debt with a cap rate of 1.00% through October 2024 and a $250.0 million of notional variable-rate debt with a cap rate of 1.00% through October 2025.
The Company’s off-balance sheet arrangements include $4.0 million of outstanding letters of credit on our ABL Facility as of September 30, 2022.

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Cash Flow
Nine months ended
September 30,
2022 2021
(in millions)
Continuing Operations
Net cash provided by (used in):
Operating activities $ 109.3 $ 92.3
Investing activities (43.6) 892.9
Financing activities (82.6) (963.5)
Discontinued Operations
Net cash used in:
Operating activities — (7.4)
Investing activities — (40.9)
Financing activities — (1.1)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (2.6) (4.7)
Net change in cash and cash equivalents (19.5) (32.4)
Cash and cash equivalents at beginning of period 140.9 137.2
Cash, cash equivalents and restricted cash at end of period of continuing operations $ 121.4 $ 104.8
Nine months ended
September 30,
2022 2021
(in millions)
Continuing Operations
Net income $ 48.4 $ (6.0)
Non-cash and non-working capital related activities (1)
106.2 110.0
Changes in working capital (42.5) (18.5)
Other operating activities (2.8) 6.8
Net cash provided by operating activities, continuing operations $ 109.3 $ 92.3
(1) Includes depreciation, amortization, amortization of deferred financing costs and original issue discount, foreign currency exchange gains and losses, deferred income tax provision (benefit), net (gains) losses on asset disposals, stock compensation expense and equity in net income and dividends received from affiliated companies.
Nine months ended
September 30,
2022 2021
(in millions)
Continuing Operations
Working capital changes that (used) provided cash:
Receivables $ (28.4) $ (33.8)
Inventories 3.2 6.1
Prepaids and other current assets (5.2) (8.4)
Accounts payable 2.0 10.1
Accrued liabilities (14.1) 7.5
$ (42.5) $ (18.5)
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Nine months ended
September 30,
2022 2021
(in millions)
Continuing Operations
Purchases of property, plant and equipment $ (39.5) $ (44.6)
Proceeds from business divestiture, net of cash — 980.4
Payments for business divestiture, net of cash (3.7) —
Business combinations, net of cash acquired (0.5) (42.8)
Other, net 0.1 (0.1)
Net cash (used in) provided by investing activities, continuing operations $ (43.6) $ 892.9
Nine months ended
September 30,
2022 2021
(in millions)
Continuing Operations
Net cash borrowings (repayments) on debt obligations $ (6.8) $ (532.1)
Proceeds from failed sale lease-back — 14.6
Dividends paid to stockholders — (435.6)
Repurchases of common shares (73.7) —
Tax withholdings on equity award vesting (0.3) (1.5)
Repayment of financing obligations (1.8) (0.5)
Other — (8.4)
Net cash used in financing activities, continuing operations $ (82.6) $ (963.5)

The following discussions related to our cash flows are presented on a continuing operations basis, which excludes the cash flows from our Performance Materials and Performance Chemicals businesses accounted for as discontinued operations during the nine months ended September 30, 2021.
Net cash provided by operating activities was $109.3 million for the nine months ended September 30, 2022, compared to $92.3 million provided for the nine months ended September 30, 2021. Cash generated by operating activities, other than changes in working capital, was higher during the nine months ended September 30, 2022 by $41.1 million compared to the same period in the prior year. The change in working capital during the nine months ended September 30, 2022 was unfavorable compared to the nine months ended September 30, 2021. Cash used to fund working capital was $42.5 million and $18.5 million for the nine months ended September 30, 2022 and 2021, respectively.
The increase in cash generated by operating activities, other than changes in working capital, was higher by $41.1 million as compared to the prior year period primarily due to an increase in operating profit and an increase in dividends received from affiliated companies. Prior year cash generated by operating activities includes debt extinguishment costs.
The decrease in cash from working capital of $24.0 million as compared to the prior year was primarily due to unfavorable changes in inventories, accounts payable, and accrued liabilities which were partially offset by favorable changes in accounts receivables and prepaids and other current assets.
The favorable change in accounts receivable was driven by the timing of sales as well as decreased sales volume. The unfavorable change in inventory was due to the inflation costs on raw materials and finished goods, where as cash provided in prior period was due to the timing of sales orders and inventory build. The unfavorable change in accounts payable is due to the timing of vendor payments as well as higher capital spending. The unfavorable change in accrued liabilities relates to changes in various expense accruals.
Net cash used in investing activities was $43.6 million for the nine months ended September 30, 2022, compared to cash provided of $892.9 million during the same period in 2021. Cash used in investing activities consisted of utilizing $39.5 million and $44.6 million to fund capital expenditures during the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2021, we divested our Performance Chemicals business and received $980.4 million in net proceeds and acquired Chem32, LLC for $42.8 million. During the nine months ended September 30, 2022, we made an additional payment related to our divestiture of our Performance Chemicals business representing the final adjustments to the sale price of $3.7 million.
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Net cash used in financing activities was $82.6 million for the nine months ended September 30, 2022, compared to net cash used of $963.5 million during the same period in 2021. Net cash used in financing activities was primarily driven by $6.8 million of debt repayment charges, repurchases of common stock of $73.7 million, and repayments of financing obligation principal of $1.8 million for the nine months ended September 30, 2022. During the nine months ended September 30, 2021, we used the proceeds from the divestiture of the Performance Chemicals business to repay approximately $526.4 million of outstanding debt, pay a special dividend of $435.6 million and pay a redemption premium on our debt of $8.5 million.
Debt
September 30,
2022 		December 31,
2021
(in millions)
Senior Secured Term Loan Facility due June 2028 $ 888.8 $ 895.5
ABL Facility — —
Total debt 888.8 895.5
Original issue discount (7.8) (8.8)
Deferred financing costs (4.3) (4.9)
Total debt, net of original issue discount and deferred financing costs 876.7 881.8
Less: current portion (9.0) (9.0)
Total long-term debt, excluding current portion $ 867.7 $ 872.8
As of September 30, 2022, our total debt was $888.8 million, excluding the original issue discount of $7.8 million and deferred financing fees of $4.3 million for our senior secured credit facilities. Our net debt as of September 30, 2022 was $767.4 million, including cash and cash equivalents of $121.4 million. We may seek, subject to market conditions and other factors, opportunities to repurchase, refinance or otherwise reprice our debt.
Capital Expenditures
Maintenance capital expenditures include spending on maintenance of business, health, safety and environmental initiatives. Growth capital expenditures include spending to drive organic sales growth and cost savings initiatives. These capital expenditures represent our “book” capital expenditures for which the company has recorded, but not necessarily paid for the capital expenditures.
Nine months ended
September 30,
2022 2021
(in millions)
Maintenance capital expenditures $ 31.5 $ 29.3
Growth capital expenditures 6.0 8.8
Total capital expenditures $ 37.5 $ 38.1
Capital expenditures remained at a level sufficient for required maintenance and certain expansion growth initiatives during these periods. Maintenance capital expenditures were slightly higher in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 due to higher turnaround expenditures. Growth capital expenditures were slightly lower in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, due to the completion of several expansion projects in 2021.


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Critical Accounting Policies and Estimates
We prepare our condensed consolidated financial statements in conformity with GAAP and our significant accounting policies are described in Note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. We base our estimates and judgments on historical experience and other relevant factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis.
There has been no material change in our critical accounting policies and use of estimates from those described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report on Form 10-K.
Accounting Standards Not Yet Adopted
See Note 2 to our unaudited condensed consolidated financial statements for a discussion of recently issued accounting standards and their effect on us.
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our major market risk exposure is potential losses arising from changing rates and prices regarding foreign currency exchange rate risk, interest rate risk, commodity price risk and credit risk. The audit committee of our board of directors regularly reviews foreign exchange, interest rate and commodity hedging activity and monitors compliance with our hedging policy. We do not use financial instruments for speculative purposes, and we limit our hedging activity to the underlying economic exposure.
There have been no material changes in the foreign exchange risk, interest rate risk, commodity risk or credit risk discussed in Item 7A., “Quantitative and Qualitative Disclosures about Market Risk,” included in our Annual Report on Form 10-K.
ITEM 4.    CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022, the end of the period covered by this Quarterly Report on Form 10-Q.
The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, a s of such date, our disclosure controls and procedures were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
No changes in our internal control over financial reporting occurred during the quarter ended September 30, 2022 that materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS.
From time to time we may be subject to various legal claims and proceedings incidental to the normal conduct of business, relating to such matters as personal injury, product liability and warranty claims, waste disposal practices, release of chemicals into the environment and other matters that may arise in the ordinary course of our business. We currently believe that there is no litigation pending that is likely to have a material adverse effect on our business. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
ITEM 1A.    RISK FACTORS.
“Item 1A, Risk Factors” in our Annual Report on Form 10-K, as supplemented by “Item 1A, Risk Factors” in our quarterly report on Form 10-Q for the quarter ended March 31, 2022, which we refer to as the First Quarter From 10-Q, and by “Item 1A, Risk Factors” in our quarterly report on Form 10-Q for the quarter ended June 30, 2022, which we refer to as the Second Quarter Form 10-Q, includes a discussion of our risk factors. The information should be read in conjunction with, the risk factors disclosed in our Annual Report on Form 10-K, as supplemented by our First and Second Quarter Form 10-Q. There have been no material changes from the risk factors described in our Annual Report on Form 10-K, as supplemented by our First and Second Quarter Form 10-Q.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
The following table contains information about purchases of our common stock during the third quarter of 2022:
Total Number of Shares of Common Stock Purchased (1)
Average Price Paid per Share of Common Stock (2)
Total Number of Shares of Common Stock Purchased as Part of Publicly Announced Plan or Programs Maximum Number (or Dollar Value) of Shares of Common Stock that May Yet Be Purchased Under the Plans or Programs (in thousands)
July 1, 2022—July 31, 2022 1,077,640 $ 9.77 1,077,640 $ 430,644
August 1, 2022—August 31, 2022 6,500,000 $ 8.36 6,500,000 $ 376,328
September 1, 2022—September 30, 2022 — $ — — $ 376,328
Total 7,577,640
(1) In April 2022, our Board of Directors approved and announced a new stock repurchase program authorizing the repurchase of up to $450 million of the Company’s outstanding common stock over the next four years. This program is expected to be funded using cash on hand and cash generated from operations. We primarily expect to conduct the repurchase program through negotiated transactions with the Company’s equity sponsors, as well as through open market repurchases or other means, including through Rule 10b-18 trading plans or through the use of other techniques such as accelerated share repurchases. The actual timing, number and nature of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The repurchase program does not obligate us to acquire any number of shares in any specific period or at all and may be amended, suspended or discontinued at any time at our discretion.
On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. Among other things, the IRA imposes a 15% corporate alternative minimum tax for certain large corporations with average annual adjusted financial statement income in excess of $1 billion for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy. Historically, during the year we have made discretionary share repurchases. Beginning in 2023, these purchases would be subject to the excise tax. Based on the historical net repurchase activity the excise tax and the other provisions of the IRA are not expected to have a material impact on our results of operations or financial position. However, we are still in the process of analyzing the provisions of the IRA.
During the three months ended September 30, 2022, the Company repurchased 1,077,640 shares of its common stock on the open market at an average price of $9.77 per share, for a total of $10.5 million. Additionally, in connection with a secondary offering of the Company’s common stock in August 2022, the Company repurchased 6,500,000 shares of its common stock sold in the offering from the underwriters at a price of $8.36 per share simultaneous with the closing of the offering, for a total of $54.3 million. As of September 30, 2022, $376.3 million was available for additional share repurchases under the program. There were no repurchases during September 2022.
(2) Excludes brokerage commissions and other costs of execution.
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ITEM 6.    EXHIBITS.
The following exhibits are being filed or furnished as part of this Quarterly Report on Form 10-Q:
Exhibit No. Description
31.1
31.2
32.1
32.2
101
The following materials from the Quarterly Report on Form 10-Q of Ecovyst Inc. for the quarter ended September 30, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Stockholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, (vi) Notes to Condensed Consolidated Financial Statements and (vii) document and entity information, tagged as blocks of text and including detailed tags
104
The cover page from the Quarterly Report on Form 10-Q of Ecovyst Inc. for the quarter ended September 30, 2022, formatted in Inline XBRL and included as Exhibit 101

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Ecovyst Inc.
Date: November 4, 2022 By: /s/ MICHAEL FEEHAN
Michael Feehan
Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial and Accounting Officer)


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TABLE OF CONTENTS