Next to present is Ascent Industries. Ascent is a pure-play specialty chemicals company now, after divesting their tubular asset business. They're headquartered just outside Chicago. And here to speak today is CEO Bryan Kitchen.
Hey, good afternoon, everyone. Thanks for joining. Hopefully, you guys have had a good day of speed dates, so I'm not going to do, we're not going to go too intense on the PowerPoint slides. We'll probably do about 15 minutes and then reserve the rest of the time for Q&A, so thematically for 2024, look, a lot of transformation has occurred in our company. I'll give you a little bit of context here about the history of Ascent in a couple of slides, but we've got a 75-year legacy. Over that past 75 years, we started off as a specialty chemical company. About 20 years into that journey, we bolted on some stainless steel tubular assets, and then we retained those assets, operating under two different segments for a number of decades, up until earlier this year.
But our standardization and stabilization activities really took hold last year, or late 2023, rolling into 2024, when Ryan and I joined the company. I joined the company with the mandate to grow and build our specialty chemical segment. A couple of months rolling into that process, got a call from the chairman of the board, who said, "Just kidding. Can you please take over the company?", appointed me President and CEO. And then quickly thereafter, I brought on Ryan Kavalauskas, who's our CFO. And the reason why I bring that context up is Ryan and I have worked together on a couple of different stops through our careers, starting off with ANGUS Chemical Company. And then just prior to joining Ascent, we ran a company called Clearon, a specialty chemical manufacturer in Charleston, West Virginia. When we joined that company, it was losing about $8 million of adjusted EBITDA.
Fast forward four, four and a half years later, we turned that around and at the time of sale, it was delivering roughly $36 million of adjusted EBITDA on a trailing 12 basis so significant turnaround, very short period of time. Learned a lot of lessons through that process and we always said, "Look, if we have the opportunity to do it all over again, we'd leverage in those learnings and apply them wherever we go". So, late 2023, got the opportunity to join Ascent. Looked at the specialty chemical assets, good bones, just needed the right people and the right strategy. We're successful in 2024 of recruiting the right talent. We effectively put the band back together, if you will.
We reached back out into our network, brought a lot of the people that were with us at the Clearon turnaround, as well as other folks that we have worked with previously, and really gave them the keys and told them to do what they do best, and they unleashed just enormous improvements inside of a one-year horizon back in 2024. We delivered a $19.9 million turnaround, significant cost reduction across labor, overhead, raw materials, you name it, and generated over $17 million of cash in the process, so really good transformational improvements inside of 2024, teeing us up to a transformational period also in 2025. As I mentioned earlier, Ascent is a 75-year-old company through a series of acquisitions. Again, today, we stand as a pure-play specialty chemical business after successfully divesting our two stainless steel holdings earlier this year for not only $65 million worth of proceeds.
Our operating model and our strategy is effectively chemicals as a service. So what we like to say is we meet our customers where they want to be met and how they want to be met and served. So we offer, we manufacture products that our customers use in their products and processes, but we also offer services that support their manufacturing processes. So things like custom manufacturing, where we'll take our customers' products or processes, we'll integrate them into our manufacturing facilities, and then produce products to support their requirements. We offer regulatory services. We offer distribution-like services. And then what we've been incredibly successful with over the past six months is offering technical services to help solve our customers' most difficult problems.
As a result of that, when you solve your customers' most difficult problems, generally that relationship becomes more sticky, and it generally becomes more margin accretive through that process. This is just a pretty good visual. When you take a look at the breadth of capabilities that we have, our solutions that we offer across the chemicals, our specialty chemicals value chain, as well as the business models that we offer.
So typical chemical manufacturers will participate heavily in R&D. They will manufacture products. They will sell those products. They will partner with distributors to then move those products to end-use customers. Toll manufacturers, it is all about taking somebody else's recipe, relying on the owner of that IP to ship in raw materials. And effectively, they just convert for a fee. We are really a combination of all of those, plus distribution, offering comprehensive solutions to meet our customers' requirements.
We've got about 200 employees. We've got about 170 customers, three manufacturing sites, five manufacturing plants, and roughly 95% of our top line is supported with domestically supplied raw material. Our revenue as a pure-play specialty chemical company at year-end 2024 was about $81 million, and this year, we're on pace to do roughly the same. As a part of our turnaround efforts last year, you'll see that our top line did compress, and it compressed purposely as we deselected poor business, poor quality business, and we've seen a corresponding increase or improvement in our gross margin profile over that time, so where do we participate? We participate in an array of different market segments, but what I would say is we're laser-focused in on paints and coatings, water treatment, oil and gas, and HI & I are cleaning type of applications.
That doesn't mean that we don't participate in things like personal care or pulp and paper. That just means from a resource allocation, those are the four pillars that we're really focused in on. And those are really just guided by customer needs and needs of our customers to deliver tailored specialty chemical solutions to them. Last year, again, part of the turnaround or transformation effort was to deliver more volume, more sales that were generally more ratable and predictable and more margin accretive. And in part to do that, we shifted our product mix from 90% custom manufacturing in 2023 to 75% custom manufacturing in 2024, meaning that we moved more of our sales into product-specific sales. And you can see the impact that had on our pricing as well as the gross margin improvements as well. Our asset base, the good news, bad news, right?
So the bad news is we're grossly underutilized. The good news is we're grossly underutilized from an investor standpoint. So today, we're about 50% utilized across our three manufacturing facilities. Our capital requirements are relatively low, roughly $1 million-$3 million a year. That's not because we're running it on the cheap. That's because that's what it's required to maintain our safety, to maintain our compliance, and to maintain our reliability. The assets have been incredibly well cared for over the past decades, and they're positioned incredibly well for us as we unleash the company's fullest growth potential inside of the existing asset base. We are at an inflection point. So the results from the first half of the year. So we continue to drive important improvements in our cost structure across raw materials, across labor, across overhead. We delivered a significant improvement in adjusted EBITDA.
We continued to, or we generated roughly $56 million of cash proceeds from the sale of our tubular assets. And we continue to drive working capital improvements. And just for context, our cash conversion cycle year-on-year went from about 90 days down to about 60 days. So cash management is near and dear to our heart. We learned a really important lesson back in our days at Clearon, and we've carried that lesson forward with us. But our balance sheet has been transformed, and we're ready to unleash our fullest growth potential. From a catalyst standpoint, what's coming around the corner? So I mentioned earlier that we sold off our last two remaining operational stainless steel assets earlier this year in April and in July. We do have one remaining holding under a sale leaseback transaction.
We sold all the equipment related to that asset last year for about $2.8 million of proceeds. However, we still have the building inside of our portfolio, and that's about a $2.1 million a year drag from rent, utilities, insurance, and the like. However, we do have line of sight to getting rid of that liability by the end of this year, so stay tuned on that, but we're excited we're heading down the right path, and we think that that will be the final chapter in the stainless steel segment for us. So, from a growth perspective, what are we doing? So one of the things that we did last year is we recapitalized our SG&A, and that's not code for we went out and we invested enormous amounts of money in SG&A. We effectively renewed our workforce from an SG&A standpoint.
So we built up a marketing function that did not exist previously. We brought in new sales resources that are market-focused. And as a result of that, we're building up an incredible selling project pipeline. So in the first half, we delivered the equivalent of 11% growth over the last TTM, 150% adjusted EBITDA expansion over the prior TTM. That was through 50 or so different selling projects. The cycle time was roughly 2.7 months. And our conversion rate was actually pretty good at about 18%. Why is all of that important? It all gets back to momentum. Again, grossly underutilized asset base, core to our long-term success is our ability to fill up those assets with high-quality business. And we're beginning, just beginning to do that. And that growth is not just coming from our existing customer base. It's also coming from new customer acquisitions.
So what you see right now is in the first half, roughly 77% of that growth came from existing customers. So we're expanding our share of wallets. And 23% of that's coming through new customer acquisition. You can see the relative EBITDA margin profile from both existing customer expansion as well as new customers. Very, very healthy pieces of business that we've been successful in winning. What's equally as encouraging, if not more encouraging, is the quality and the scale of our selling project pipeline. So while I mentioned a minute ago, our sales cycle time in the first half of the year was 2.7 months. That's not really typical. What's really typical in this space is anywhere from three months to a year. So the size and scale and quality of that pipeline becomes incredibly important for us moving forward.
In the first quarter of this year, our selling project portfolio was roughly $45 million. At the end of Q2, we added on an additional $25 million, so right now, we have a selling project pipeline that the team is actively efforting, and these projects are resultant of customer express needs, not somebody's twinkle in the eye or great idea. These are express customer needs when and where we have actually produced these products in the past and/or have the capabilities to manufacture products to support their requirements. So we're actively working on that $70 million pipeline. We look forward to seeing that growth roll through, begin to roll through in the early part of 2026. Simple and clear EBITDA drivers, so 2023, 4% adjusted EBITDA last year, an additional 4% due to management turnaround.
Moving forward, right, it's all about organic growth, organic growth, organic growth for the near term today. Again, $75 million-$80 million of top line. We have the full capabilities to bridge that to $120 million-$130 million inside of our existing asset base. But then we're not going to stop there. So we have $60 million worth of cash. We have $30 million worth of borrowing capacity. We are now at a point where we've stabilized. We've improved, and we've earned the right to begin looking at accretive M&A opportunities. So we're beginning to work on that. What does success look like down the road for us? So think gross margin profiles of roughly 30%-35%, SG&A of roughly 15%, and adjusted EBITDA margins in that 15% range. And that's pretty normal and customary across the specialty chemical landscape. We're not looking for a unicorn-type setup here.
As I mentioned a minute ago, we do have $60 million worth of cash on the balance sheet at the close of Q2. And that was after repurchasing roughly 6% of our outstanding shares inside of the second quarter of last year. So we've got plenty of dry powder. We are getting interest on that dry powder. We are actively engaged and looking for good quality M&A opportunities for us. For us, it's not just about gaining mass. It's about the quality of the properties that we're looking at, things that improve or expand our existing capabilities or expand our toolbox that we can take to customers, things that expand our geographical presence. Today, we have three assets that are structured around the southeast corridor. We love to have something in the Gulf Coast to support our expansion into the oil field.
So kind of how to think about this from a multiple standpoint. Our targets for non-distressed assets, we could pay up to 8%. That's not code for we're going to target an 8X multiple, but up to an 8X multiple pre-synergies, post-synergies that would translate to something like up to a 6X type multiple. So we've been working over the past four or five months on building up that pipeline, defining our strategic filters, starting to have initial conversations. But we're excited about kind of how that pipeline is shaping up and what that might mean for us in the not-so-distant future.
So why invest in Ascent? It was interesting. So I had never heard of Ascent when I joined the company. And that just shows you how fragmented, how large and fragmented the specialty chemicals market is. But again, when investors used to look at Ascent, what they saw was a chemicals business and a stainless steel tubular asset business. They just couldn't get their heads wrapped around what are the synergies? How does this make sense? We've taken action on that. We've optimized. We've fixed the storyline. We're stabilized and we're growth-ready. We've got growth capabilities in place that don't require a lot of ongoing maintenance CapEx. And we do have still some near-term upside.
So we've done a lot. We've done ourselves a lot of favors by the focus that we've put forth in 2024 and into early 2025 to really stabilize and fix the foundation. Now, as we pivot to growth, we really believe that we're at an inflection point, and we're going to be seeing some of that growth roll through here in the not-so-distant future. And with that, I'm happy to take any questions that you guys might have. Yeah.
So you mentioned earlier focusing on, say, less specialized product offerings because they offer a higher margin. I'd be curious to hear a bit more about your customer profile. And it looks like you guys have great growth within your customer base already as well. Is there a benefit to having a specialized service offering or product with them and being able to design another product as a result of that relationship that may be impacted? Or how are you thinking about the customer relationship overall relative to what you're offering?
Yeah, and that's a good question. So in the first half of this year, we've seen incredible success partnering with kind of small to mid-size customers. And the reason why is, in many instances, the small to mid-size customers, they need technical support.
But when they go knocking on the larger specialty chemical manufacturers, generally speaking, that door is not open wide. They're not embraced with open arms. They're told to go talk to distributors that don't necessarily have the technical competencies to solve their difficult problem. So when a company like Ascent comes to the table and says, "We'd love to help you solve your problems," and we're happy to do that at the small scale and at the large scale, we're getting a lot of looks for that. And that's really encouraging. And just an example, on Good Friday, we got a phone call from a prospective customer, not an existing customer, but a prospective customer that said, "We had a problem. Can you help us?" Over the weekend, we whipped up three different samples in the lab, shot the samples over.
They qualified it in the lab within a week, and then within a month, qualified it in the field, and because we were able to operate at their speed and solve their most difficult problem at that point in time, we rewarded $5 million of net new business with 20% plus EBITDA margin, so we like that. We want to go do more of that.
Makes sense. Thank you.
Yeah.
When looking at M&A, you mentioned that you want to get new assets and unlock some more synergies. Can you just speak to specifically what some of those are and what would be good bolt-ons to the current asset base?
Yeah. So from a market synergy standpoint, still aligned to those four kind of key market pillars that I mentioned earlier. Oil and gas, water, and the natural synergies between the two of them, things like HI&I, and then coatings. Sticking within those kind of market pillars, but complementary capability. Things like rail, right? We don't have rail access inside of our other three assets today. If we had that capability, that would open up a whole new portfolio of opportunities for us. Similarly, today, we have a lot of stainless steel reactors, and we've got a ton of great opportunities that are rolling through that are great fits inside of stainless steel reactors. Right, but if we only had glass-lined reactors, that would open up a whole other basket. It's all about adding additional tools in our toolbox to help service our customer needs in a broader context.
Thank you for that question on that. As you think about increasing your sales and marketing function and going into potentially new industries where you don't have exposure, how much does specialization play a factor in how you guys go to market?
Quite a bit, actually. So it all gets back to what are the technical requirements of the customer and then having the resources to work hand in hand with them on their bench to solve their problem. So we actually just recruited and brought on today, I think it's his first day, our new R&D leader to help us bolster that capability. We now have market-focused sales resources in oil and gas. We have market-focused sales resources in CASE. We're still working on that in HI&I, but we're putting the band together in a very focused and disciplined way.
I think just a clarification of that. We do participate in those markets. We just haven't been as focused and strategic as we will be going forward.
That's right. Yeah.
Curious about the pricing environment, just holistically. I know you said it's a fragmented market, but kind of what does your power look like now? How do you see that playing out over the next few quarter years?
Pricing in terms of?
Across the board for your materials. When you're going to market, yeah.
Y eah. So it's interesting. So when you look at our historical pricing, it was kind of all over the map, and there was really no rhyme or reason. So we've tried to get a lot more strategic and deliberate about how we price and how we go to market. And you've seen kind of the impact of that roll through our income statement.
So as we've deselected poor quality business, we had pricing that was below variable cost in some instances. So we deselected that business. We've bolstered our pricing on the remaining business. And I think we found good ways to be more competitive in areas that we haven't historically participated as well. So look for us to be good stewards of market pricing. Just because we have the ability to use price as a weapon doesn't mean that we have to give away value. And from a macro standpoint, right, look, the market didn't do it to us. The market's not going to fix it for us. We're not planning on any major recovery. Everything that we're planning to get from a growth standpoint is just through an enormous amount of self-help.
Yeah. You mentioned getting to $120 million-$130 million in organic revenue. How do you get there? Is that just dialing in the sales team? Or yeah, what's the plan of attack to get to that number?
It's getting the right resources on the bus and getting hyper-focused. So rather than chase everything that comes to the table, we get hyper-focused in on those core markets, and we just equip them with the right processes and tools to win.
There's no other questions. I...
This presentation has now finished. Please check back shortly for the...