Cabot Q3 Report 2023

Key Highlights

• Third quarter Diluted EPS of $1.43; Adjusted EPS of $1.42
• Record Reinforcement Materials segment EBIT in the third fiscal quarter of $132 million, up 17% year-over-year
• Strong Cash Flows from Operations of $243 million supported return of $38 million in the quarter to shareholders through dividends and share repurchases
• Liquidity remains strong at approximately $1.3 billion; Net Debt to EBITDA of 1.7 times as of June 30, 2023
• Year to date effective and operating tax rate increased from 25% to 28%; third quarter impact of $0.17 on adjusted EPS

Sean Keohane, Cabot President and Chief Executive Officer, commented on the quarter: “Despite a weak demand environment and an increase in our operating tax rate, adjusted EPS was up 7% sequentially in the third quarter. Reinforcement Materials delivered record EBIT of $132 million driven by year-over-year improvement in pricing and product mix from our calendar year 2023 customer agreements, despite volume declines across all regions. As we communicated in June, the market environment remained challenging for Performance Chemicals during the quarter as demand across all product lines, excluding battery materials, continued to be weak and the pace of recovery in China remained slow.”

Keohane continued, “During the third quarter, we delivered strong operating cash flow of $243 million and we returned cash to our shareholders with $23 million of dividends and $15 million of share repurchases. Our balance sheet remains solid with Net Debt to EBITDA at 1.7x and liquidity of $1.3 billion.”