0001104659-26-056246
SEC filingRevenue grew 4% on higher volumes and FX tailwinds, but profitability collapsed as lower TiO2 prices and production cuts drove a net loss.
Revenue increased 4.1% to $509.8 million in the first quarter of 2026, compared to $489.8 million in the same period last year. The growth was primarily driven by higher sales volumes and favorable foreign currency exchange rate movements, which more than offset lower average TiO2 selling prices. Despite the top-line improvement, profitability declined sharply as pricing pressures and production adjustments weighed on margins.
Gross profit decreased 22.0% to $83.3 million, and gross margin fell to 16.3% from 21.8% in the prior year quarter. The decline was driven by lower TiO2 selling prices and reduced production volumes, which led to higher per-unit fixed costs. While the company benefited from cost savings initiatives and lower raw material costs, these were insufficient to offset the impact of lower prices and reduced absorption of fixed costs. Management continues to focus on improving operating margins through pricing actions and disciplined cost management.
Net cash used in operating activities improved to $51.3 million from $102.4 million in the prior year quarter, a decrease of $51.1 million. This improvement was primarily driven by favorable changes in working capital, particularly accounts receivable and inventory. Management states that liquidity and capital resources remain sufficient to support operations and planned capital investments, though the company may delay capital projects based on market conditions.
Management remains focused on improving operating margins through pricing actions, cost management, and structural realignment initiatives. The company's operating model balances cost efficiency with flexibility to respond to changes in demand. However, cost pressures are expected to persist due to ongoing global uncertainties, including the conflict in the Middle East. While customers remain reluctant to build inventory, order lead times have increased, providing greater production planning flexibility.