ACNT

This discussion and analysis summarizes the significant factors affecting our consolidated operating results, liquidity, and capital resources during the three and six months ended June 30, 2026 and 2025, respectively. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from year to year, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. This discussion and analysis should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements that are included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the Annual Report), as well as the condensed consolidated financial statements (unaudited) and notes to the condensed consolidated financial statements (unaudited) contained in this report. Unless otherwise specified, all comparisons made are to the corresponding period of 2025. This discussion and analysis is presented in five sections: •Executive Overview •Results of Operations and Non-GAAP Financial Measures •Liquidity and Capital Resources •Material Cash Requirements from Contractual and Other Obligations •Critical Accounting Policies and Estimates Executive Overview Ascent Industries Co. is a specialty chemicals platform focused on the development, production, and distribution of tailored, performance-driven chemical solutions. Ascent Industries Co. was incorporated in 1958 as the successor to a chemical manufacturing business founded in 1945 known as Blackman Uhler Industries Inc. The Company has one reportable segment: Specialty Chemicals. The Specialty Chemicals segment produces critical ingredients and process aids for the oil & gas, household, industrial and institutional ("HII"), personal care, coatings, adhesives, sealants and elastomers (CASE), pulp and paper, textile, automotive, agricultural, water treatment, construction and other industries. The second quarter represented an important inflection point in Ascent's evolution. Despite continued challenges across the broader specialty chemicals market, our legacy business delivered organic growth well above both the market and many of our peers, reflecting disciplined commercial and operational execution. At the same time, the acquisition of Midwest Graphic Sales has exceeded our expectations, delivering earnings accretion from day one and integrating ahead of schedule. Together, these results reinforce our confidence that the strategic roadmap we have been executing is creating a stronger, higher-quality specialty chemicals platform. Macroeconomic Events We continue to monitor macroeconomic trends and uncertainties such as key material inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs, which may have adverse effects on net sales and profitability. Following the February 20, 2026, Supreme Court ruling regarding the imposition of tariffs under the International Emergency Economic Powers Act (IEEPA), U.S. Customs and Border Protection is issuing refunds for tariffs previously paid under IEEPA. Concurrently, the Administration imposed a temporary 10% general tariff under Section 122 of the Trade Act of 1974 subject to several exemptions, including the import into the United States of certain aerospace products. As a result of the tariffs announced by the U.S. presidential administration and continued tariff modifications or the imposition of tariffs or export controls by other countries, we have worked with our suppliers to mitigate supply chain challenges, cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies. Much of our raw material used in production is domestically sourced and we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and additional cost savings efforts. Economic pressures on customers and consumers, including the challenges of inflation and the effects of increased tariffs, may negatively affect our net sales and profitability in the future. Geopolitical conflicts, including the continuation or escalation of ongoing tensions and military conflicts in the Middle East may also disrupt business operations of suppliers and/or customers, causing supply chain constraints or delays, increased pricing or delayed spending by our customers. The full impact of such events are not known at this time, but they could have a material adverse impact on our business, financial condition, results of operations, and stock price. These developments did not have a material impact on our financial position, results of operations and cash flows during the three and six months ended June 30, 2026. 22 Table of Contents Results of Operations Consolidated Performance Summary Consolidated net sales for the second quarter of 2026 were $25.7 million, an increase of $7.0 million, or 37.6%, compared to net sales for the second quarter of 2025. The increase in net sales was primarily driven by a 15.2% increase in pounds shipped and a 23.0% increase in average selling prices. Consolidated net sales for the six months ended June 30, 2026 were $45.1 million, an increase of $8.6 million, or 23.6%, compared to net sales for the six months ended June 30, 2025. The increase in net sales was primarily driven by an 11.5% increase in pounds shipped and a 14.6% increase in average selling prices. For the second quarter of 2026, consolidated gross profit increased 14.0% to $5.5 million, or 21.6% of sales, compared to $4.9 million, or 26.1% of sales in the second quarter of 2025. For the six months ended June 30, 2026, consolidated gross profit increased 5.4% to $8.4 million, or 18.5% of sales, compared to $7.9 million, or 21.7% of sales in the six months ended June 30, 2025. The increase in dollars for the second quarter and first six months was primarily driven by increases in cost recovery in the period due to increased production, reductions in utilities and repairs and maintenance partially offset by increases in labor and overhead. Consolidated selling, general, and administrative expense (SG&A) for the second quarter of 2026 decreased $0.9 million to $5.5 million, or 21.5% of sales, compared to $6.4 million, or 34.5% of sales in the second quarter of 2025. Consolidated selling, general, and administrative expense (SG&A) for the six months ended June 30, 2026 decreased $0.7 million to $10.7 million, or 23.6% of sales, compared to $11.3 million, or 31.0% of sales in the six months ended June 30, 2025. The decrease in SG&A expense for the second quarter of 2026 and six months ended June 30, 2026 was primarily driven by decreases in incentive bonus, professional fees and repairs and maintenance partially offset by increase in salaries, wages and benefits. Consolidated operating loss in the second quarter of 2026 totaled $0.3 million compared to an operating loss of $2.7 million in the second quarter of 2025. Consolidated operating loss in the six months ended June 30, 2026 totaled $2.6 million compared to an operating loss of $4.7 million in the six months ended June 30, 2025. The operating loss decrease in the six months ended June 30, 2026 was primarily driven by aforementioned increase in gross profit and decrease in SG&A expense as well as decreases in asset impairments and gain on lease modification in the prior year not in the current year. Specialty Chemicals SG&A expense for the second quarter of 2026 was $4.8 million, or 18.7% of sales, compared to $2.7 million, or 14.3% of sales in the second quarter of 2025. SG&A expense for the six months ended June 30, 2026 was $9.7 million, or 21.5% of sales, compared to $5.6 million, or 15.3% of sales in the six months ended June 30, 2025. The increase in dollars for the three and six months ended June 30, 2026 was primarily driven by increases in corporate expense allocation, salaries, wages and benefits and amortization expense partially offset by decreases in incentive bonus. Operating income decreased to $0.6 million for the second quarter of 2026 compared to operating income of $1.5 million for the second quarter of 2025. The current year decrease in operating income was primarily driven by the aforementioned increase in SG&A expense. Operating loss increased to $1.5 million for the six months ended June 30, 2026 compared to operating income of $2.3 million for the six months ended June 30, 2025. The current year increase in operating loss was primarily driven by the aforementioned increase in SG&A expense. Corporate & Other Items Unallocated corporate and other expenses for the second quarter of 2026 decreased $2.4 million, or 76.5%, to $0.7 million, or 2.8% of sales, compared to $3.1 million, or 16.6% of sales, in the prior year. The second quarter of 2026 decrease in dollars was primarily driven by increases corporate allocation as well as decreases in incentive bonus, professional fees, taxes and licenses partially offset by increases in salaries, wages and benefits. Unallocated corporate and other expenses for the six months ended June 30, 2026 decreased $5.9 million, or 83.7%, to $1.1 million, or 2.5% of sales, compared to $7.0 million, or 19.2% of sales, in the prior year. The six months ended June 30, 2026 decrease in dollars was primarily driven by increases in corporate allocation to Chemicals locations as well as decreases in professional fees, taxes and licenses, incentive bonus and IT software costs partially offset by increases in salaries, wages and benefits and dues and subscriptions. Interest income was $0.2 million for the second quarter of 2026 compared to diminimus interest income for the second quarter of 2025. Interest income was $0.5 million for the six months ended June 30, 2026 compared to interest expense of $0.1 million 23 Table of Contents for the six months ended June 30, 2025. The change was driven by a higher interest-bearing cash balance in the current year compared to the prior year. The Company had no debt outstanding under its credit facilities in either period. The effective tax rate for continuing operations was (869.2)% and 27.1% for the three and six months ended June 30, 2026, respectively. The three months ended June 30, 2026 effective tax rate was lower than the U.S. statutory rate of 21.0%, primarily due to changes in forecasted income (loss) and the resulting changes in the valuation allowance on federal and state deferred tax assets. The six months ended June 30, 2026 effective tax rate was higher than the U.S. statutory rate of 21.0% primarily due to changes in the valuation allowance over federal and U.S. state deferred tax assets. Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), we use the following non-GAAP financial measures: EBITDA and Adjusted EBITDA. Management believes that these non-GAAP measures are useful because they are key measures used by our management team to evaluate our operating performance, generate future operating plans and make strategic decisions as well as allow readers to compare the financial results between periods. Non-GAAP measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company's performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Company's results or financial condition as reported under GAAP. EBITDA and Adjusted EBITDA We define "EBITDA" as earnings before interest, income taxes, depreciation and amortization. We define "Adjusted EBITDA" as EBITDA further adjusted for the impact of non-cash and other items we do not consider in our evaluation of ongoing performance. These items include: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, shelf registration costs, loss on extinguishment of debt, retention costs and restructuring and severance costs from net income. We caution investors that amounts presented in accordance with our definitions of EBITDA and Adjusted EBITDA may not be comparable to similar measures disclosed by other companies because not all companies calculate EBITDA and Adjusted EBITDA in the same manner. We present EBITDA and Adjusted EBITDA because we consider them to be important supplemental measures of our performance and investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Consolidated EBITDA and Adjusted EBITDA from continuing operations are as follows: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2026 2025 2026 2025 Net income (loss) from continuing operations $ 670 $ (2,447) $ (1,310) $ (4,453) Adjustments: Interest expense (income), net (155) (15) (448) 99 Income taxes (601) (89) (487) (89) Depreciation 877 893 1,737 1,870 Amortization 373 153 490 306 EBITDA 1,164 (1,505) (18) (2,267) Acquisition costs and other 176 31 177 268 Shelf registration costs — — 14 — Asset impairments — 1,622 — 1,622 Gain on lease modification — (544) — (544) Stock-based compensation 137 86 270 120 Non-cash lease expense (26) (25) (51) (1) Restructuring and severance cost — — 97 — Adjusted EBITDA $ 1,451 $ (335) $ 489 $ (802) % of sales 5.7 % (1.8) % 1.1 % 2.2 % 24 Table of Contents Specialty Chemicals EBITDA and Adjusted EBITDA are as follows: Three Months Ended June 30, Six Months Ended June 30, ($ in thousands) 2026 2025 2026 2025 Net income (loss) $ 656 $ 1,499 $ (1,486) $ 2,237 Adjustments: Interest expense, net 13 15 25 32 Depreciation 835 878 1,652 1,840 Amortization 373 153 490 306 EBITDA 1,877 2,545 681 4,415 Acquisition costs and other — — — 92 Stock-based compensation 24 — 54 — Non-cash lease expense (15) (5) (30) 3 Restructuring and severance costs — — 38 — Specialty Chemicals Adjusted EBITDA $ 1,886 $ 2,540 $ 743 $ 4,510 % of segment sales 7.3 % 13.6 % 1.6 % 12.4 % Liquidity and Capital Resources We closely manage our liquidity and capital resources. Our liquidity requirements depend on key variables, including level of investment required to support our business strategies, the performance of our business, capital expenditures, credit facilities and working capital management. Capital expenditures and share repurchases are a component of our cash flow and capital management strategy which we can adjust in response to economic and other changes in our business environment. We have a disciplined approach to capital allocation focusing on priorities that support our business and growth. Sources of Liquidity Funds generated by operating activities supplemented by our available cash and cash equivalents and our credit facilities are our most significant sources of liquidity. As of June 30, 2026, we held $28.1 million of cash and cash equivalents, as well as $17.9 million of remaining available capacity on our revolving line of credit. We believe our sources of liquidity will be sufficient to fund operations and anticipated capital expenditures as well as repay our debt obligations as they become due over the next 12 months and beyond. Cash Flows Cash flows from continuing operations were as follows: Six Months Ended June 30, (in thousands) 2026 2025 Total cash used in: Operating activities $ (7,724) $ (8,941) Investing activities (14,712) (466) Financing activities (6,051) (7,473) Net decrease in cash, cash equivalents and restricted cash $ (28,487) $ (16,880) Operating Activities The decrease in cash used in operating activities for the six months ended June 30, 2026, compared to cash used in operating activities in the six months ended June 30, 2025, was primarily driven by decreases in net loss from $4.5 million in the six months ended June 30, 2025 to $1.3 million in the six months ended June 30, 2026 and changes in working capital. Changes in working capital can vary significantly depending on factors such as the timing of inventory production and purchases, customer payments of accounts receivable and payments to vendors in the regular course of business. Accounts payable increased operating cash flows by $2.6 million for the first six months of 2026, compared to a decrease of $1.7 million in the first six months of 2025. The change in accounts payable is primarily due to increased inventory purchases to match increases 25 Table of Contents in sales. Accounts receivable and advances decreased operating cash flows by $6.5 million in the first six months of 2026 compared to a $4.9 million decrease in the first six months of 2025. The decrease in cash generated by accounts receivable and advances is primarily driven by an increase in net sales in the current period and increased days sales outstanding in the current period. Inventory decreased operating cash flows for the first six months of 2026 by $1.1 million compared to a decrease of $0.9 million for the first six months of 2025. The change in inventory is primarily driven by higher inventory purchases in the first six months of 2026 compared to the first six months of 2025 coupled with and increase in days inventory outstanding year over year. Investing Activities Net cash used in investing activities primarily consists of transactions related to capital expenditures and acquisitions. The increase in cash used in investing activities for the six months ended June 30, 2026 compared to the cash used in investing activities for the six months ended June 30, 2025 was primarily due to the purchase of Midwest Graphic Sales in the second quarter of 2026 as well as increases in capital expenditures in the current year compared to the prior year. Financing Activities Net cash used in financing activities primarily consists of transactions related to our credit facilities and share repurchases. The decrease in cash used in financing activities for the six months ended June 30, 2026 compared to cash used in financing activities for the six months ended June 30, 2025 was primarily due to decreased repurchases of common stock in the current year. The Company had no debt outstanding under its credit facilities as of June 30, 2026 and December 31, 2025. Short-term Debt The Company has a note payable in the amount of $1.0 million with an annual interest rate of 2.57% maturing April 1, 2027, associated with the financing of the Company's insurance premium in 2026. As of June 30, 2026, the outstanding balance was $1.0 million. Credit Facilities On December 10, 2025, the Company entered into a Limited Waiver, Consent and Sixth Amendment to Credit Agreement and Omnibus Amendment to Loan Documents with BMO Bank N.A. and the other lenders under the Company’s credit facility (the “Sixth Credit Facility Amendment”). The maximum revolving loan commitment under the credit facility remains $30 million with an interest rate between 1.85% and 2.35%, depending on average availability under the credit facility and the Company's consolidated fixed charge coverage ratio. The term of the credit facility remains through December 31, 2027. The Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $4.5 million and (ii) 15% of the revolving credit facility. As of June 30, 2026, the Company was in compliance with all financial debt covenants. As of June 30, 2026, the Company had no principal payments outstanding under its credit facilities. See Note 9 in the unaudited notes to the consolidated financial statements for additional information on the Company's credit facilities. Share Repurchases and Dividends We have a share repurchase program, authorized by the Company's Board of Directors, that is executed through purchases made from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions. Shares repurchased are returned to status of authorized, but unissued shares of common stock or held in treasury. As of June 30, 2026, the Company has 1,492,941 shares of its share repurchase authorization remaining. Shares repurchased for the three and six months ended June 30, 2026 and 2025 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Number of shares repurchased 209,868 644,171 505,563 660,993 Average price per share $ 13.80 $ 12.15 $ 13.29 $ 12.17 Total cost of shares repurchased $ 2,924,245 $ 7,848,761 $ 6,849,961 $ 8,063,383 At the end of each fiscal year the Board of Directors reviews the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which is appropriate. In 2025, no dividends were declared or paid by the Company. 26 Table of Contents Other Financial Measures Below are additional financial measures that we believe are important in understanding the Company's liquidity position from year to year. The metrics are defined as: Liquidity Measure: •Current ratio = current assets divided by current liabilities. The current ratio will be determined by the Company using generally accepted accounting principles, consistently applied. Profitability Ratio: •Return on average equity ("ROAE") = net income divided by the trailing 12-month average of equity. The ROAE will be determined by the Company using generally accepted accounting principles, consistently applied. Results of these additional measures are as follows: June 30, 2026 December 31, 2025 Current ratio 4.3 6.7 Return on average equity (2.4)% (8.7)% Material Cash Requirements from Contractual and Other Obligations As of June 30, 2026, our material cash requirements for our known contractual and other obligations were as follows: •Operating and Finance Leases - The Company enters into various lease agreements for the real estate and manufacturing equipment used in the normal course of business. Operating and finance lease obligations were $12.8 million, with $1.1 million payable within 12 months. See Note 10 for further detail of our lease obligations and the timing of expected future payments. The Company has no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on the Company's financial position, revenues, results of operations, liquidity, or capital expenditures. We expect capital spending to be as much as $3.0 million for the remainder of fiscal 2026. Critical Accounting Policies and Estimates We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies, in the notes to the consolidated financial statements presented in the Annual Report on Form 10-K for the year ended December 31, 2025. We discuss our critical accounting estimates in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in the Annual Report on Form 10-K for the year ended December 31, 2025. Other than those listed below, there have been no significant changes in our significant accounting policies or critical accounting estimates since the end of fiscal 2025. Business Combinations Description Business combinations are accounted for using the acquisition method of accounting in accordance with GAAP. Under this method, the total consideration transferred to consummate the business combination is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the transaction. Judgments and uncertainties involved in the estimate The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired, if any, and liabilities assumed. Fair value determinations involve significant assumptions about highly subjective variables, including future cash flows, discount rates, customer attrition and expected business performance. There are also different valuation models and inputs for each component, the selection of which requires considerable judgment. Our estimates and assumptions may be based, in part, on the availability of listed market prices or other transparent market data. These determinations will affect the amount of amortization expense recognized in future periods as well the residual amount recognized as goodwill, if any, attributable to the transaction. 27 Table of Contents Effect if actual results differ from assumptions We base our fair value estimates on assumptions we believe are reasonable, but recognize the assumptions are inherently uncertain. Depending on the size of the purchase price of a particular acquisition, the mix of intangible assets acquired and expected business performance, the purchase price allocation could be materially impacted by applying a different set of assumptions and estimates. Unanticipated events and circumstances may occur which may affect the accuracy or validity of such assumptions, estimates or actual results. Goodwill Description Goodwill is the excess of the purchase price over the fair value of identifiable assets acquired, less fair value of liabilities assumed, in a business combination. The Company reviews goodwill for impairment at the reporting unit level, which is the operating segment level or one level below the operating segment level. A reporting unit is an operating segment or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. Goodwill is not amortized but is evaluated for impairment at least annually on October 1 or whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable. The evaluation begins with a qualitative assessment to determine whether a quantitative impairment test is necessary. If, after assessing qualitative factors, we determine it is more likely than not that the fair value of the reporting unit is less than the carrying amount, then the quantitative goodwill impairment test is performed. Judgments and uncertainties involved in the estimate We make various estimates and assumptions about our goodwill, including whether any potential impairment events have occurred. Examples of such events or changes in circumstances, many of which are subjective in nature, include the following: •Significant negative industry or economic trends; •A significant change in the use of the acquired assets or our strategy; •A significant divestiture or other disposition activity; •A significant decrease in the market value of the asset; •A significant change in legal factors or the business climate that could affect the value of the asset; and •A change in segment by one or more reporting unit Additionally, we make estimates and assumptions regarding the inputs used to perform a quantitative assessment of our goodwill, if necessary, and the Company will perform a discounted cash flow analysis and a market multiple analysis. The discounted cash flow analysis includes management assumptions for expected sales growth, capital expenditures and overall operational forecasts. The market multiple analysis includes historical and projected performance, market capitalization, volatility and multiples for industry peers. Effect if actual results differ from assumptions We have not made any material changes in our methodology used to determine whether potential impairment events have occurred or any material changes in the estimates and assumptions used in our quantitative goodwill impairment testing. As of June 30, 2026, the Company's goodwill balance is $4.7 million.