Impact of Mexico Operational Challenges on EBITDA and Recovery Plan
The Monterrey, Mexico facility faced tooling and equipment issues, impacting backlog and increasing costs, notably affecting EBITDA by nearly $5 million in Q3 2025.
Management identified underinvestment in tooling and equipment as the root cause of operational inefficiencies and quality problems.
The company has initiated leadership changes and allocated capital to upgrade the facility's capabilities, aiming for resolution early in fiscal 2026.
Despite short-term operational issues, leadership emphasized confidence in the recovery plan and long-term business prospects.
The operational challenges are specific to the Mexico plant and are not expected to affect the overall long-term growth outlook.
Cash used by operations improved by $32 million year-over-year to $13 million used in Q2, with $14 million cash provided in the first half of 2025 compared to $97 million used in the prior year.
Consolidated EBITDA was $74 million with an 11.9% margin, slightly down from $89 million and 13.8% margin in Q2 2024, but adjusted EBITDA improved by $1 million year-over-year to $74 million.
Expedited Freight segment EBITDA increased from $18 million in Q4 2024 to $30 million in Q2 2025, with margin improving 500 basis points to 11.6%.
Forward Air reported consolidated revenue of $619 million in Q2 2025, down 3.9% year-over-year primarily due to a decline in the Expedited Freight segment revenue.
Intermodal segment EBITDA remained stable at $9 million, consistent with prior quarters.
Omni Logistics segment revenue grew $16 million year-over-year to $328 million, with EBITDA increasing 47% to $30 million and margin improving to 9%.
Celanese reported a second quarter 2025 EPS run rate target of $2 per share, with Q3 guidance midpoint at $1.25.
Free cash flow guidance remains strong at $700 million to $800 million for 2025, driven primarily by operations despite $650 million to $700 million in interest expense.
Inventory reduction efforts in Engineered Materials caused a sequential $25 million negative earnings impact in Q3, offset by a prior Q2 benefit.
The company experienced volume weakness in China automotive orders, European demand in Engineered Materials, and the Western Hemisphere Acetyl Chain.
Volumes in the Western Hemisphere acetyl demand are at the lowest levels in 20 years, with Engineered Materials volumes down 5-6% year-over-year.
Dafinchi