MTX 10-K & 10-Q changes, risk factors and insider trading

Our business faces significant risks. Set forth below are all risks that we believe are material at this time. Our business, financial condition condition, and results of operations could be materially adversely affected by any of these risks. These risks should be read in conjunction with the other information in this Annual Report on Form 10-K.

In the paper industry, which is served by the Specialty Additives product line of our Consumer & Specialties segment, production levels for uncoated freesheet within North America and Europe, our two largest markets, are projected to continue to decrease. The reduced demand for premium writing paper products has resulted in closures and conversions of mills in both North America and Europe. WeAdditionally, expectthe paperSpecialty consumptionAdditives toproduct remainline similaris toaffected priorby yearthe levelsdomestic inresidential bothbuilding regions.and construction markets, as well as the automotive market.

The Company’s sales of calcium carbonate to paper customers are typically pursuant to long-term evergreen agreements, initially ten to fifteen years in length, with paper mills where the Company operates satellite plants. Sales pursuant to these contracts represent a significant portion of our sales in the Specialty Additives product line of the Consumer & Specialties segment. The terms of many of these agreements have been extended or renewed in the past, often in connection with an expansion of the satellite plant. However, failure of a number of the Company’s customers to renew or extend existing agreements on terms as favorable to the Company as those currently in effect, or at all, could have a substantial adverse effect on the Company’s results of operations, and could also result in impairment of the assets associated with the satellite plant.

At December 31, 2024,2025, the the Company had $971.3$961.7 million aggregate principal amount of total indebtedness (consisting primarily of $575.0$569.3 million aggregate principal amount of loans under our term facility, $400.0 million aggregate principal amount of notes and $4.5no million loans outstanding under our revolving credit facility) and an additional $386.4$390.8 million of borrowing capacity under the revolving credit facility (after giving effect to $9.1$9.2 million of outstanding letters of credit). Our outstanding indebtedness will require a significant amount of cash to make interest payments. Further, the interest rate on a significant portion of our borrowings under our senior secured credit facility is based on SOFR interest rates, which has resulted in and could continue to result in higher interest expense in the event of continued increases in interest rates. Our ability to pay interest on our debt and to satisfy our other debt obligations will depend in part upon our future financial and operating performance and upon our ability to renew or refinance borrowings. Prevailing economic conditions and financial, business, competitive, regulatoryregulatory, and other factors, many of which are beyond our control, will affect our ability to make these payments. We cannot guarantee that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to fund our liquidity needs. If we are unable to generate sufficient cash flow to meet our debt service obligations, we will have to pursue one or more alternatives, such as reducing or delaying capital or other expenditures, refinancing debt, selling assets, or raising equity capital. Further, the requirement to make significant interest payments may reduce the Company’s flexibility to respond to changing business and economic conditions or fund capital expenditure or working capital needs and may increase the Company’s vulnerability to adverse economic conditions.

Sales and income growth of the Company depends upon a number of uncertain events. Growth will depend in part on sales growth from our existing businesses and customers. The Company has a strategic growth initiative to increase penetration into geographic markets such as Brazil, IndiaChina, and ChinaIndia as well as other Asian and Eastern European countries. The Company also has a strategic growth initiative to increase penetration into consumer-oriented markets such as petcat litter, personal care, animal and health care and natural oil purification. Our strategy also anticipates growth through future acquisitions. However, our ability to identify and consummate any future acquisitions on terms that are favorable to us may be limited by the number of attractive acquisition targets, internal demands on our resourcesresources, and our ability to obtain financing. Our success in integrating newly acquired businesses will depend upon our ability to retain key personnel, avoid diversion of management’s attention from operational matters, and integrate general and administrative services. In addition, future acquisitions could result in the incurrence of additional debt, debt, costscosts, and contingent liabilities. Integration of acquired operations may take longer, or be more costly or disruptive to our business, than originally anticipated, and it is also possible that expected synergies from future acquisitions may not materialize. We also may incur costs and divert management attention with regard to potential acquisitions that are never consummated. Difficulties, delaysdelays, or failure of any of these strategies could affect the future growth rate of the Company.

The Company’s future business success will depend in part upon its ability to maintain and enhance its technological capabilities, to respond to changing customer needs, and to successfully anticipate or respond to technological changes on a cost-effective and timely basis. The Company is engaged in a continuous effort to develop new products and processes in all of its product lines. Difficulties, delaysdelays, or failures in the development, testing, production, marketingmarketing, or sale of such new products could cause actual results of operations to differ materially from our expected results. results

The Company’s ability to compete is dependent upon its ability to defend its intellectual property against inappropriate disclosure, thefttheft, and infringement.

The Company does business in many areas internationally. Approximately 49%48% of our sales in 20242025 were derived from outside the United States and we have significant production facilities which are located outside of the United States. We have in recent years expanded our operations in emerging markets, and we plan to continue to do so in the future, particularly in Brazil, China, India, Brazil, the Middle East, and Eastern Europe. Some of our operations are located in areas that have experienced political or economic instability, including Brazil, China, Egypt, Indonesia, Malaysia, Nigeria, Egypt, Saudi Arabia, Turkey,South Brazil,Africa, Thailand, China and South Africa.Turkey. As the Company expands its operations overseas, it faces increased risks of doing business abroad, including inflation, fluctuation in interest rates, changes in applicable laws and regulatory requirements, nationalization, expropriation, limits on repatriation of funds, civil unrest, unstable governments and legal systems, and other factors. The U.S. and foreign countries may also adopt or increase restrictions on foreign trade or investment, including currency exchange controls, tariffs or other taxes, or limitations on imports or exports (including recent and proposed changes in U.S. trade policy and resulting retaliatory actions by other countries). Further, geopolitical and terrorism threats, including armed conflict among countries, could in the future affect our business overseas, including leading to, among other things, impairment of our or our customers’ ability to conduct operations, adverse impact to our employees, and a loss of our investment. While recent geopolitical conflicts, such as between Russia and Ukraine and between Israel and Hamas, have not significantly affected our business, the broader consequences of geopolitical and terrorism threats, which may include sanctions that prohibit our ability to do business in specific countries, embargoes, supply chain disruptions, potential contractual breaches and litigation, regional instability and geopolitical shifts, cannot be predicted. We are also subject to increased risks of natural disasters, public health crises, including the occurrence of a contagious disease or illness, such as COVID-19, and other catastrophic events in such countries. Many of these risks are beyond our control and can lead to sudden, and potentially prolonged, changes in demand for our products, difficulty in enforcing agreements, and losses in the realizability of our assets. Adverse developments in any of the areas in which we do business could cause actual results to differ materially from historical and expected results. In addition, a significant portion of our raw material purchases and sales outside the United States are denominated in foreign currencies, and liabilities for non-U.S. operating expenses and income taxes are denominated in local currencies. Accordingly, reported sales, net earnings, cash flows and fair values have been and, in the future, will be affected by changes in foreign currency exchange rates. Our overall success as a global business depends, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions. We cannot assure you that we will implement policies and strategies that will be effective in each location where we do business.exports.

The Company depends in part on having an adequate supply of raw materials for its manufacturing operations, particularly lime and carbon carbon dioxide for the production of PCC, and magnesia and alumina for its refractory operations. Purchase prices and availability of these critical raw materials are subject to volatility. At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, on price and other terms, or at all. While most such raw materials are readily available, the Company has purchased approximately 55%57% of its magnesia requirements from sources in China over the past five years. The price and availability of magnesia have fluctuated in the past and they may fluctuate in the future. Price increases for certain other of our raw materials, including petrochemical products, as well as increases in energy prices, have also affected our business. Our production processes consume a significant amount of energy, primarily electricity, diesel fuel, natural gasgas, and coal. We use diesel fuel to operate our mining and processing equipmentequipment, and our freight costs are heavily heavily dependent upon fuel prices and surcharges. Energy costs also affect the cost of raw materials. On a combined basis, these factors represent a large exposure to petrochemical and energy products which may be subject to significant price fluctuations. The contracts pursuant to which we construct and operate our PCC satellite plants generally adjust pricing to reflect the pass-through of increases in costs resulting from inflation, including energy. However, there is a time lag before such price adjustments can be implemented. The Company and its customers will typically negotiate reasonable price adjustments in order to recover these escalating costs, but there can be no assurance that we will be able to recover increasing costs through such negotiations.

The Company also depends on having adequate access to ore reserves of appropriate quality at its mining operations. There are numerous uncertainties inherent in estimating ore reserves including subjective judgments and determinations that are based on available geological, technical, contractcontract, and economic information. In addition, mining permits, leases leases, and other rights are, or may be, required for certain of the Company’s mining operations. Such permits, leasesleases, and other rights are subject to modification, renewalrenewal, and revocation. Our ability to maintain such mining permits, leasesleases, and other rights has been, and may continue to be, affected by changes in laws, regulationsregulations, and governmental actions, particularly in emerging markets such as TurkeyChina and China.Turkey. We cannot assure you that we will be able to maintain such mining permits, leasesleases, and other rights to the extent we currently maintain them or at all.

The Company relies on shipping bulk cargos of bentonite from the United States, TurkeyTurkey, and China to customers, as well as our own own subsidiaries, and we are sensitive to our ability to recover these shipping costs. If we cannot secure our container requirements or offset additional shipping costs with price increases to customers, our profitability could be impacted. We are also subject to other shipping risks. In particular, rail service interruptions have affected our ability to ship, and the availability of rail service, and our ability to recover increased rail costs, may be beyond our control. In addition, governmental restrictions can, and during the COVID-19 pandemic did, affect our ability to ship our products.

The Company’s subsidiaries, BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) (“Oldco”) and Barretts Ventures Texas LLC (together with Oldco, the “Chapter 11 Debtors”), have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code to address and comprehensively resolve Oldco’s liabilities associated with talc. Risks and uncertainties related to this filing could have a material adverse effect on the Company’s business, financial condition, results of operationsoperations, and cash flows.

Although the Chapter 11 Cases are progressing, it is not possible at this time to predict how the BankruptcyDistrict Court will rule on the pending motions, whether an appellate court will affirm or reverse the Bankruptcy Court order denying the Committee’s motion to dismiss the Chapter 11 Cases,dismiss, the form of any ultimate resolutionresolution, or when an ultimate resolution might occur. Accordingly, Accordingly,the Company is unable to estimate the possible loss or range of loss related to the amount that will be necessary to fully and finally resolve all of Oldco’s current and future talc-related claims in connection with a confirmed Chapter 11 plan of reorganization cannotbeyond bethe estimatedamount at this time.accrued. Several risks and uncertainties related to the Chapter 11 Cases could have a material adverse effect on the Company’s business, financial condition, results of operations operations, and cash flows, including the ultimate amount necessary to be contributed to any trust established pursuant to Section 524(g) of the U.S. Bankruptcy Code, the potential for the Company’s talc-related exposure to extend beyond the Chapter 11 Debtors arising from claims by talc plaintiffs relating to the Company’s liability for talc claims, corporate veil piercing efforts or otherwise, any final resolution of the scope of the Pfizer indemnity, the ongoing costs of the Chapter 11 Cases, which may require additional funding from time to time, the cost and the length of time necessary to ultimately resolve the cases, either through settlement or as a result of litigation arising in connection with the Chapter 11 Cases, and the possibility that the Chapter 11 Debtors will be unsuccessful in attaining relief under Chapter 11. Further, while the Company anticipates that the Chapter 11 Debtors will benefit from the operation of the automatic stay during the Chapter 11 proceedings, depending on the ultimate outcome of any of these litigation matters, the Company could in the future be required to pay significant amounts as a result of settlements or judgments, potentially in excess of liabilities accrued to date in respect of such matters. The resolution of, or recognition of additional additional liabilities in connection with, pending or future litigation could have a material adverse effect on the Company’s results of operations, cash flows flows, and financial condition.

The Company is subject to stringent regulation in the areas of environmental, health and safety, and tax, and may incur unanticipated costs or liabilities arising out of claims for various legal, environmentalenvironmental, and tax matters or product stewardship issues that could materially harm the Company’s results of operations, cash flowsflows, and financial condition.

The Company’s operations are subject to international, federal, statestate, and local governmental environmental, health and safety, taxtax, and other laws and regulations. We have expended, and may be required to expend in the future, substantial funds for compliance with such laws and regulations. In addition, future events, such as changes to or modifications of interpretations of existing laws and regulations, or enforcement polices, or further investigation or evaluation of the potential environmental impacts of operations or health hazards of certain products, may affect our mining rights or give rise to additional compliance and other costs that could have a material adverse effect on the Company. Further, certain of our customers are subject to various federal and international laws and regulations relating to environmental and health and safety matters, especially customers of our Environmental & Infrastructure product line of our Engineered Solutions segment, who are subject to drilling permits, wastewaste-water water disposaldisposal, and other regulations. To the extent that these laws and regulations affecting our customers change, demand for our products and services could also change and thereby affect our financial results. State,Greenhouse gas emissions have become the subject of an increasing amount of concern from state, national, and international governments and agenciesagencies. These concerns have beenresulted evaluatingin, and may continue to result in, the enactment or adoption of climate-related legislation and regulation that would restrict emissions of greenhouse gases in areas in which we conduct business, andresult in someadditional suchcompliance legislation and regulation have already been enactedcosts, or adopted. Enactment of climate-related legislation or adoption of regulation that restrict emissions of greenhouse gases in areas in which we conduct business could have an adverse effect on our operations or demand for our products. Our manufacturing processes for our products use a significant amount of energy and, should energy prices increase as a result of such legislation or regulation, we may not be able to pass these increased costs on to purchasers of our products. We cannot predict if or when currently proposed or additional laws and regulations regarding climate change or other environmental or health and safety concerns will be enacted or adopted.

The Company is also subject to income tax laws and regulations in the United States and various foreign jurisdictions. Significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our income tax liabilities are dependent upon the location of earnings among these different jurisdictions. Our income tax provision and income tax liabilities could be adversely affected by the jurisdictional mix of earnings, changes in valuation of deferred tax assets and liabilitiesliabilities, and changes in tax treaties, lawslaws, and regulations.

The Company is currently a party in various litigation matters and tax and environmental proceedings and faces risks arising from various unasserted litigation matters, including product liability, patent infringement, antitrust claims, and claims for third-party property damage or personal injury stemming from alleged torts, including, as discussed elsewhere in this Report, a number of cases seeking damages for alleged exposure to asbestos-contaminated talc products sold by BMI Oldco. Any failure to appropriately manage safety, human health, product liabilityliability, and environmental risks associated with the Company’s products and production processes could adversely impact the Company’s employees and other stakeholders, the Company’s reputation, and its results of operations, cash flows flows, and financial condition. Public perception of the risks associated with the Company’s products and production processes could impact product acceptance and influence the regulatory environment in which the Company operates. Any unanticipated liability arising out of a current matter or proceeding, or from the other risks described above, could have a material adverse effect on the Company’s results of operations, cash flowsflows, and financial condition.

The Company is dependent on the continued operation of its production facilities. ProductionOur production facilities and the transportation of our products and/or the raw materials used to manufacture our products are subject to hazards associated with the manufacturing, handling, storage, and transportation of chemical materials and products, including pipelinemechanical failure, leaks andleaks, ruptures, explosions, fires, inclement weather and natural disasters, mechanical failure, unscheduled downtime, labor difficulties, transportation interruptions, and environmental risks. ProductionSuch operating facilitiesproblems aremay alsocause subjectpersonal injury and/or loss of life, damage to governmentalor destruction requirementsof that may,property and duringequipment, theenvironmental Covid-19damage, pandemicunscheduled downtime, did,and affectcustomer our ability to operate.attrition. We maintain property, business interruption interruption, and casualty insurance but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered. We may incur losses beyond the limits, or outside the coverage, of our insurance policies. Production at our facilities may also be affected by labor disputes, labor shortages, and increased turnover, which could disrupt our operations, cause a decline in our production, increase employee-related costs, and divert the attention of our management. Production facilities are also subject to governmental requirements that may affect our ability to operate. Further, from time to time, we may experience capacity limitations in our manufacturing operations. In addition, if we are unable to effectively forecast our customers’ demand, it could affect our ability to successfully manage operating capacity limitations. These hazards, limitations, labor, and employee issues, disruptions in supplysupply, and capacity constraints could adversely affect financial results.

Our operations have been and will continue to be subject to cyber-attackscyberattacks and other disruptions to our information systems that could have a material adverse impact on our business, consolidated results of operations, and consolidated financial condition.

Our operations are dependent on digital technologies and services.services, including systems operated by third parties that include embedded artificial intelligence (“AI”). We use these technologies for activities important to our business, including managing and operating our manufacturing facilities, communications within our company and with customers and suppliers, processing transactions, maintaining accurate financial records,records and other enterprise resource planning requirements, protecting confidential information, complying with regulatory, financial reporting, and legal requirements, and otherwise storing, processing processing, and transmitting our data. Increased use of remote working arrangements has only increased our reliance on these technologies and services. Our business has in the past and could in the future be negatively affected by security incidents and systems disruptions. These disruptions or incidents may be caused by cyberattacks and other cyber incidents, network or power outages, software, equipmentequipment, or telecommunications failures, the unintentional or malicious actions of employees or contractors, an inability to appropriately update our systems, natural disasters, firesfires, or other catastrophic events.

Cyberattacks and other cyber incidents are occurring more frequently,frequently and the techniques used to gain access to information technology systems and data, disable or degrade service or sabotage systems are constantly evolving andevolving, becoming more sophisticated in nature nature, and are being carried out by groups and individuals with a wide range of expertise and motives. Cyberattacks and cyber incidents may be difficult to detect for periods of time and take many forms including cyber extortion, denial of service, social engineering, introduction of viruses or malware (such as ransomware), exploiting vulnerabilities in hardware, software software, or other infrastructure, hacking, website defacement ordefacement, theft of passwords and other credentials, unauthorized use of computing resourcesresources, and business email compromise. Continued geopolitical instability has heightened the risk of cyberattacks.

Like other global companies, our systems are subject to recurring attempts by third parties to access information, manipulate datadata, or disrupt our operations, and we have experienced cyber incidents. If we do not allocate and effectively manage the resources necessary to continue building and maintaining our information technology infrastructure, or if we fail to timely identify or appropriately respond to cyberattacks or other cyber incidents, our business has been and can continue to be adversely affected by, among other things: interruption of our business operations; loss of or damage to intellectual property, proprietary or confidential information, or customer, supplier, or employee data; and increased costs required to prevent, respond to, or mitigate cybersecurity cybersecurity attacks. Similar risks exist with respect to our business partners and third-party providers that we rely upon. We Wealso are subject to the risk that the activities associated with our business partners and third-party providers can adversely affect our business even if the attack or breach does not directly impact our systems or information. Our use of AI software may create additional risks related to the unintentional disclosure of proprietary, confidential, or otherwise sensitive information.

Although the cyber incidents that we have experienced to date have not had a material effect on our business, such incidents or disruptions could have a material adverse effect on us in the future. While we believe we devote significant resources to network security, disaster recovery, employee trainingtraining, and other measures to secure our information technology systems and prevent unauthorized access to or loss of data, there can be no guarantee that they will be adequate to safeguard against all cyber incidents, systems disruptions, or misuses of data. In addition, while we currently maintain insurance coverage that is intended to address costs associated with certain aspects of cyber incidents and information systems failures, this insurance coverage may not cover all losses or all types of claims that arise from an incident, or the damage to our reputation or brands that may result from an incident.

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of the Company. This report contains statements that the Company believes may be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, particularly statements relating to the Company’s objectives, plans or goals, future actions, future performance or results of current and anticipated products, sales efforts, expenditures, and financial results. From time to time, the Company also provides forward-looking statements in other publicly-releasedpublicly released materials, both written and oral. Forward-looking statements provide current expectations and forecasts of future events such as new products, revenuesrevenues, and financial performance, and are not limited to describing historical or current facts. They can be identified by the use of words such as “outlook,” “forecast,” “believes,” “expects,” “plans,” “intends,” “anticipates,” and other words and phrases of similar meaning.

Forward-looking statements are necessarily based on assumptions, estimatesestimates, and limited information available at the time they are made. A broad variety of risks and uncertainties, both known and unknown, as well as the inaccuracy of assumptions and estimates, can affect the realization of the expectations or forecasts in these statements. Many of these risks and uncertainties are difficult to predict or are beyond the Company’s control. Consequently, no forward-looking statements can be guaranteed. Actual future results may vary materially. Significant factors affecting the expectations and forecasts are set forth under “Item 1A — Risk Factors” in this Annual Report on Form 10-K.

Worldwide net sales decreasedwere 2% in 2024 to $2.119 billion as compared with $2.170$2.1 billion in 2023. 2025, a 2% decrease from 2024. Consolidated income from operations was $286.5$47.4 million,million in 2025, as compared with $171.8$286.5 million in the prior year. Included in income from operations for 2024 was $11.3 million of litigation expenses incurred in connection with the bankruptcy of the Company’s subsidiaries, BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) ("Oldco") and Barretts Ventures Texas LLC ("BVT" and together with Oldco, the "Chapter 11 Debtors"). In addition, in 2024, the Company entered into a Debtor-in-Possession Credit Agreement with Oldco (the "DIP Credit Agreement") which resulted in a $30.0 million provision for credit loss charge. The Company also recorded a $12.3 million net gain on the sale of assets relating to a facility in the Engineered Solutions segment in 2024. Included in income from operations infor 20232025 was a $71.7$215 million non-cashprovision to impairmentestablish chargean accrual for Oldco'sestimated fixedcosts assetsto fund a trust to resolve all current and $29.2future talc-related claims for alleged exposure to asbestos-contaminated talc products sold by the Company’s subsidiary BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) (“Oldco”) as well as fund the bankruptcy of the Company’s subsidiaries, Oldco and Barretts Ventures Texas LLC (“BVT” and together with Oldco, the “Chapter 11 Debtors”), and related litigation costs. Included in this provision was an additional financing of $30 million ofrelating to the Debtor-in-Possession Credit Agreement with Oldco (the “DIP Credit Agreement”). The Company also recorded litigation expenses of $19.6 million in connection with Oldco's bankruptcy filing and bylawsuits Oldcorelated to defend against and restore its reserve for claims associated with certain talc products.products sold by Oldco. In addition, the Company recorded $6.9a $15.0 million charge for restructuring and other items relating to a cost savings program and write-down of restructuringassets, chargeswhich was offset by a net gain of $9.9 million on the final installment for the sale of refractories manufacturing assets in 2023.China Netand incomethe wassale $167.1 millionof our chromite mine in 2024,South as compared to $84.1 million in the prior year. The Company reported diluted earnings of $5.17 per share in 2024 as compared with $2.58 per share in the prior year.Africa.

In 2024,2025, the Company continued to deliver on its strategic growth initiatives driven by multi-year advancements in new product development, positioning in growth markets and geographies, geographic penetrationpenetration, and growth from acquisitions.

Our balance sheet continues to be strong. Cash, cash equivalentsequivalents, and short-term investments were $337.1$332.6 million as of December 31, 2024.2025. Cash flow from operations for 20242025 was $236.4$193.7 million. The Company repurchased $58.5 million in shares in 2025 under our $200 million buyback program. The Company currently has more than $700 million of available liquidity, including cash on hand, as well as availability under its revolving credit facility. We believe these factors will allow us to meet our anticipated funding requirements. Our intention is to maintain a balanced approach to capital deployment,deployment by using cash flow for investments in growth, returns to shareholders, and continued debt reduction.

Consolidated Income (Loss) Statement Review

Worldwide net sales in 2023 increased2025 2.1%decreased 2% from the previous year to $2,169.9 million.$2.1 billion. Net sales in the United States increaseddecreased 0.7%1% to $1,144.0$1.1 millionbillion in 20232025 and represented 53.0%52% of consolidated net sales. International net sales increaseddecreased 3.6% 3% to $1,025.9$1.0 millionbillion in 20232025 and represented 47.0%48% of consolidated net sales.

Consolidated cost of sales was $1,570.8 million,$1.6 $1,662.8billion, million$1.6 billion, and $1,660.5 million$1.7 billion in 2025, 2024, 2023 and 2022,2023, respectively. Production margin as a percentage of net sales was 25.0% in 2025, 25.9% in 2024, and 23.4% in 2023 and 21.9% in 2022. Production margin increased in 2024 primarily due to improved pricing, lower input costs and higher productivity.2023.

Marketing and administrative costs were $208.0 million, $209.2 million, and $206.0 million andin $192.1 million in2025, 2024, 2023 and 2022,2023, respectively. Marketing and administrative costs as a percentage of net sales were 10.0% in 2025, 9.9% in 2024, and 9.5% in 2023 and 9.0% in 2022.2023.

Research and development expenses were $22.9 million, $23.0 million, and $21.2 million andin $20.4 million in2025, 2024, 2023 and 2022,2023, respectively. Research and development expenses as a percentage of net sales were 1.1% in 2024,2025, 1.0%1.1% in 20232024, and 1.0% in 2022.2023.

In 2024, the Company recorded a $30.0 million provision for credit losses in connection with the DIP Credit Agreement. In addition, the Company recorded litigation expenses of $11.3 million in connection with Oldco's bankruptcy filing. The Company also recorded a $12.3 million net gain on the installment sale of refractories manufacturing assets in China.

In 2023, the Company recorded a $71.7 million non-cash impairment charge relating to Oldco's fixed assets within the Consumer & Specialties segment, $6.9 million in restructuring costs to further streamline our cost structure as a result of organization efficiencies gained through our resegmentation, and $0.3 million of acquisition-related expenses. In addition, the Company recorded $29.2 million of net litigation expenses in connection with Oldco’s bankruptcy and by Oldco to defend against and restore its reserveaccrual for claims associated with certain talc products.

During 2023,2025, the Company recorded income from operations of $171.8$47.4 million, as compared with $214.8$286.5 million in the prior year. Income from operations represented 7.9%2.3% of sales compared with 10.1%13.5% of sales in the prior year. Income from operations in 20232025 reflectedincludes $78.6a provision for litigation accrual and credit losses of $215.0 million inand impairmenta $15.0 million restructuring and restructuringother chargesitems charge for the write-down of assets and $29.2severance and other costs, offset by a $9.9 million net gain on the final installment for the sale of netrefractories litigationmanufacturing expenses.assets in China and the sale of our chromite mine in South Africa.

Non-Operating IncomeDeductions, (Deductions)net

Provision for taxes was $4.9 million, $59.4 million, and $23.7 million andin $32.1 million in2025, 2024, 2023 and 2022,2023, respectively. The effective tax rates were (35.0)%, 26.6%, 22.0% and 20.5%22.0% during 2025, 2024, 2023 and 2022,2023, respectively.

The other factors having the most significant impact on our effective tax rates in recent periods are percentage depletion, the Global Intangible Low-Tax Income provision ("GILTI"), Foreign-Derived Intangible Income (“FDII”), 162(m) disallowance, and the taxnon-deductible benefitsDIP onCredit restructuring and impairment charges.Agreement.

The Company has elected, as its accounting policy, to treat the taxes due from GILTI as a current period expense when incurred. The net charge to the Company for GILTI was $1.8 million, $1.5 million, and $1.1 million andfor $3.5 million for2025, 2024, 2023 and 2022,2023, respectively.

We operate in various countries around the world that have tax laws, tax incentivesincentives, and tax rates that are significantly different than those of the United States. These differences combine to move our overall effective tax rate higher or lower than the United States statutory rate depending on the mix of income relative to income earned in the United States. The effects of foreign earnings and the related foreign rate differentials resulted in increases of $7.1 million, $10.5 million, and $8.2 million andin $3.8 million in2025, 2024, 2023 and 2022,2023, respectively.

In December 2021, as part of the Organization for Economic Co-operation and Development’sDevelopment (“OECD”) Inclusivereleased Framework,the 140Pillar member countriesTwo agreedModel Rules which aim to reform international corporate taxation rules, including the implementation of a global minimum tax rate. The Company began implementation of the Pillar Two Global Minimum Tax (“Pillar 2”). The Company began implementation of the Pillar 2 Model Rules in the first quarter of 2024. The Company continues to assess the effect of the Pillar 2Two Model rulesRules in all jurisdictions and does not expect that Pillar 2Two will have a material impact on its consolidatedConsolidated financialFinancial statements.Statements.

Consolidated Net Income (Loss) Attributable to MTI Shareholders

Consolidated net incomeloss was $170.9 $14.0 million in 20242025 and included a $31.7$191.8 million charge, net of tax. This charge consisted of a provision for creditlitigation lossaccrual and credit losses, litigation expenses, and restructuring and other items, offset by a net gain on a sale of assets.

Our consolidated sales for the firstsecond quarter of 2026 were $546.9$548.4 million, an increase of 11%4% as compared with $491.8$528.9 million in the prior year. IncomeLoss from operations was $58.7$220.3 million, as compared with a lossincome of $160.1$74.6 million in the prior year. IncludedIn the second quarter of 2026, the Company recorded a charge of $290 million to increase the Company's reserve for estimated costs to fund a trust to resolve all current and future talc-related claims for alleged exposure to asbestos-contaminated talc products sold by the Company's subsidiary BMI Oldco Inc (f/k/a Barretts Minerals Inc.) ("Oldco") as well as fund the bankruptcy of the Company's subsidiaries Oldco and Barretts Ventures Texas LLC ("BVT" and together with Oldco, the Chapter 11 Debtors"), and related litigation costs. Also included in income (loss) from operations for the firstsecond quarter of 2026 and 2025 was $8.8$4.9 million and $2.8$4.2 million, respectively of litigation expenses incurred in connection with the bankruptcy of BMI Oldco Inc. (f/k/a Barretts Minerals Inc.) ("Oldco") and lawsuits related to talc products sold by Oldco.

Net incomeloss in the firstsecond quarter of 2026 was $36.2$183.6 million, as compared to anet lossincome of $144.0$45.4 million in the firstsecond quarter of 2025. Diluted earningsloss in the firstsecond quarter of 2026 was $1.17$5.90 per share, as compared with a lossearnings of $4.51$1.44 per share in the firstsecond quarter of 2025.

Our balance sheet continues to be strong. The Company repurchased $5.4 million in shares in the first quarter of 2026 under our $200 million buyback program. Cash, cash equivalents and short-term investments were $321.3$346.2 million as of AprilJuly 5, 2026 and the Company had more than $700 million of available liquidity, including cash on hand as well as availability under its revolving credit facility. We believe that these factors will allow us to meet our anticipated funding requirements.

Three-month period ended AprilJuly 5, 2026 as compared with three-month period ended MarchJune 30,29, 2025

Consolidated Income (Loss) Statement Review

Worldwide net sales increased 11%by 4% to $546.9$548.4 million in the firstsecond quarter from $491.8$528.9 million in the prior year. Foreign exchange had a favorable impact on sales of $17$7 million.million in the second quarter of 2026.

Net sales in the United States increaseddecreased to $280.6$275.4 million in the firstsecond quarter of 2026 from $262.4$281.9 million in the firstsecond quarter of 2025. International sales increased to $266.3$273.0 million from $229.4$247.0 million in the prior year.

Cost of goods sold was $415.8$414.6 million and represented 76.0%75.6% of sales for the three-month period ended AprilJuly 5, 2026, as compared with $372.2$392.0 million and 75.7%74.1% of sales in the prior year. Production margin decreased from 24.3%25.9% of sales in the prior year to 24.0%24.4% of sales in the firstsecond quarter of 2026.

Marketing and administrative costs were $57.5$53.3 million and 10.5%9.7% of sales for the three-month period ended AprilJuly 5, 2026, as compared to $50.6$52.2 million and 10.3%9.9% of sales in the prior year.

Research and development expenses were $6.1$5.9 million and represented 1.1% of sales for the three-month period ended AprilJuly 5, 2026, as compared with $5.8$5.7 million and 1.2%1.1% of sales in the prior year.

The Company recorded litigation and settlement expenses of $8.8$4.9 million and $2.8$4.2 million during the three-month periods ending AprilJuly 5, 2026 and MarchJune 30,29, 2025, respectively in connection with the bankruptcy of Oldco and lawsuits related to talc products sold by Oldco.

The Company recorded income from operations of $58.7 million anda loss from operations of $160.1$220.3 million duringas compared to income of $74.6 million in the prior year. Loss from operations includes a $290 million charge to increase the Company's accrual for estimated bankruptcy costs for the three-month periodsperiod endingended AprilJuly 5, 2026 and March 30, 2025, respectively.2026. Income (loss) from operations includes litigation expenses in connection with Oldco’s bankruptcy filing and lawsuits related to talc products sold by Oldco of $8.8$4.9 million and $2.8$4.2 million during the three-month periods ended AprilJuly 5, 2026 and MarchJune 30,29, 2025, respectively. Prior year loss from operations includes a provision for litigation accrual of $215 million and restructuring costs of $5.5 million for the three-month period ended March 30, 2025.

In the firstsecond quarter of 2026, non-operating deductions were $12.8$11.0 million, as compared with $16.2$15.5 million in the prior year. Included in other non-operating deductions in the firstsecond quarter of 2026 was net interest expense of $13.3$12.1 million, as compared to $14.2$13.6 million in the firstsecond quarter of the prior year.

Provision (benefit) for taxes on income was $9.9$(46.2) million, as compared with a benefit for taxes on loss of $32.1$13.9 million in the prior year. The effective tax rate was 21.5%,20.0%, as compared with 18.2%23.5% in the prior year. The ratetax benefit was primarily higher dueattributable to the provision for litigation accrual recorded in the first quarter of 2025.accrual.

Net incomeloss attributable to MTI shareholders was $36.2$183.6 million for the three-month period ended AprilJuly 5, 20262026, and included a $6.6$233.4 million charge, net of tax. This charge primarily consisted of litigationa expenses.$290 million charge to increase the Company's accrual for estimated bankruptcy costs.

Net lossincome attributable to MTI shareholders was $144.0$45.4 million for the three-month period ended MarchJune 30,29, 20252025, and included a $180.4$3.5 million charge, net of tax. This charge consisted of a provision for litigation accrual and credit losses, restructuring and other items,items and litigation expenses.expenses, offset by a net gain on sale of assets.

Net sales in the Consumer & Specialties segment waswere $296.6$274.5 million for the three-month period ended AprilJuly 5, 2026, as compared with $268.3$277.7 million in the prior year. Household & Personal Care sales increaseddecreased 16%3% to $142.4$123.4 million, as compared with $123.1$127.4 million in the prior year, primarily driven by catlower litter,sales animalin health,high-margin andconsumer edible oilspecialty and renewable fuel purification sales.products. Sales in Specialty Additives increased 6%1% to $154.2$151.1 million as compared with $150.3 million in the prior yearyear, primarily driven by higher sales to paper and packaging customers.

Net sales in the Engineered Solutions segment increased 12%9% to $250.3$273.9 million from $223.5$251.2 million in the prior year. High-Temperature Technologies sales increased 8%7% to $183.3$190.3 million, as compared with $169.4$178.4 million in the prior year, primarily relateddriven toby continued higher sales to steel customers in the U.S. and supportedfoundry by a stable performancebusinesses in our foundry business.Asia. Environmental & Infrastructure sales increased 24%15% to $67.0$83.6 million, as compared with $54.1$72.8 million in the prior year driven by strengthstronger insales environmentalrelated liningto systems,building materials, large-scale project activity, and infrastructure drilling, and offshore water treatment.drilling.

IncomeCost of goods sold increased 9% from operationsthe prior year and was $39.3 million and 15.7%75.8% of sales, as compared with $33.674.9% millionin andthe 15.0%prior year. Gross margin decreased to 24.2% of sales as compared with 25.1% of sales in the prior year.