Q1 2024 The Chemours Co Earnings Call

Operator: Good morning. My name is Lovely, and I will be your conference operator today. I would like to welcome everyone to the Chemours Company first quarter 2024 results conference call. At this time, all participants are in listen-only mode.

Good morning, My name is lovely and that will be a conference operator today I would like to welcome everyone to get so much company fish like your twin Singapore results Conference call. At this time all participants are in listen only mode, a question and answer session.

I'll follow the conclusion of the prepared remarks, I would like to remind everyone that this call conference call is being recorded I would now like to hand, the conference call over to you Sanjay Sanchez Vice especially this as Investor Relations for Hamish you May now begin your conference.

Operator: A question and answer session will follow the conclusion of the prepared remarks. I would like to remind everyone that this conference call is being recorded. I would now like to hand the conference call over to Brandon Ontjes, Vice President of Investor Relations for Chemours. You may now begin your presentation.

Sanjay Sanchez: Good morning.

Brandon Ontjes: Good morning, everybody. Welcome to the Chemours Company's first quarter 2024 earnings conference call. I'm joined today by Denise Dignam, Chemours President and Chief Executive Officer, and our Interim Chief Financial Officer, Matt Abbott. Before we start, I would like to remind you that comments made on this call, as well as in the supplemental information provided in our presentation and on our website, contain forward-looking statements that involve risks and uncertainties as described in Chemours' SEC filing.

Sanjay Sanchez: Everybody welcome to the <unk> company's first quarter 2024 earnings conference call.

Sanjay Sanchez: Im joined today by Denise Dignan, Morris, President and Chief Executive Officer, and our interim Chief Financial Officer, Matt Abbott.

Sanjay Sanchez: Before we start I would like to remind you that comments made on this call as well as in the supplemental information provided in our presentation and on our website contain forward looking statements that involve risks and uncertainties as described in <unk> <unk> SEC filings.

Brandon Ontjes: These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ, and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, we will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday. Also, we posted our earnings presentation on our website last week. With that, I will turn the call over to Denise Dignam.

Sanjay Sanchez: These forward looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized.

Actual results may differ and <unk> undertakes no duty to update any forward looking statements as a result of future developments or new information.

Sanjay Sanchez: During the course of this call we will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance a reconciliation of non-GAAP terms and adjustments are included in our press release issued yesterday also we posted our earnings presentation to our website last evening with that I'll turn the call over to Denise.

Sanjay Sanchez: No.

Denise M. Dignam: Thank you, Brandon, and good morning everyone. I'm going to start this morning by talking about our overall performance and diving more deeply into TT. Then I'm going to turn the call over to Matt to cover our segment-level performance, as well as our balance sheet and liquidity position. I'll then provide our outlook for the second quarter and spend some time on TSS, because I received a lot of questions from many of you on this business during our recent meeting. We'll then close with your questions.

Denise M. Dignam: Thank you Brandon and good morning, everyone.

Denise M. Dignam: Going to start this morning by talking about our overall performance and dive more deeply into <unk>.

Denise M. Dignam: Ken I'm going to turn the call over to Matt to cover our segment level performance as well as our balance sheet and liquidity position.

Matthew S. Abbott: I will then provide our outlook for the second quarter and spend some time on TSS because I received a lot of questions from many of you on the bids on this business during our recent meetings.

Matthew S. Abbott: And then close with your questions.

Matthew S. Abbott: Let's start with our first quarter performance.

Denise M. Dignam: Let's start with our first quarter performance. Our TT segment met our top line expectations for the quarter. However, adjusted EBITDA for TT was better than expected for three primary reasons. First, our actions to allocate TIO2 volumes to higher yield regions.

Matthew S. Abbott: Our TT segment met our topline expectations for the quarter.

Matthew S. Abbott: Adjusted EBITDA for TT with better than expected for three primary reasons.

Matthew S. Abbott: First our actions to allocate <unk> volumes to higher yield regions.

Denise M. Dignam: Second, more favorable than expected timing of the lowest, lower cost for consumption, which we anticipate will shift mostly to the second quarter. And third, our transformation plan continuing to produce strong results. Our APM and TSS segments both performed in line with our expectations for net sales and adjusted EBITDA for the first quarter. The economically sensitive end markets served by APM began to show some signs of a modest recovery during the quarter. TSS, in addition to benefiting from traditional seasonality across the refrigerants product portfolio, continues to leverage its advantage in Opion stationary blends to support the transition to low GWP solutions in connection with the recent incremental regulatory step-down in the US and Europe. In these regions, TSS also experienced continued trends in opt-in demand for aftermarket automotive solutions in line with our expectations. Now back to TiTi.

Matthew S. Abbott: Second more favorable than expected timing of lowest lower cost or consumption, which we anticipate will shift mostly to the second quarter and third our transformation plan continuing to produce strong results.

Matthew S. Abbott: Our APM and TSS segments, both performed in line with our expectations for net sales and adjusted EBITDA for the first quarter.

Matthew S. Abbott: The economically sensitive end markets served by APM began to show some signs of a modest recovery during the quarter.

TSS in addition to benefiting from traditional seasonality across the refrigerants product portfolio continued to leverage its advantage in <unk> stationary blends to support the transition to low <unk> solutions in connection with the recent incremental regulatory step down in the U S and Europe.

Matthew S. Abbott: Hi.

Matthew S. Abbott: In these regions TSS also experienced the continued trends in opt in and demand for aftermarket automotive solutions in line with our expectations.

Matthew S. Abbott: Now back to <unk>.

Matthew S. Abbott: We have not seen our order book velocity at these levels since the third quarter of 2022, and we are seeing early signs of restocking. However, we have not seen a market catalysts such as a decrease in interest rates improvement in residential building for an increase in auto production.

Denise M. Dignam: We have not seen our order book velocity at these levels since the third quarter of 2022, and we are seeing early signs of restocking. However, we have not seen a market catalyst such as a decrease in interest rates, improvement in residential construction, or an increase in auto production. Digging into the first quarter, in the most basic terms, we made purposeful choices in terms of production and volume allocation. As we finished 2023, we did not see appreciable improvement in the market, and we remained appropriately conservative with our production plan. First, we made the decision to not chase volume in low-value markets.

Matthew S. Abbott: Digging into the first quarter in the most basic terms, we made purposeful choices in terms of production and volume allocation.

Denise M. Dignam: Instead, we allocated TiO2 volumes to higher-yield end markets. While our pricing through the end of the quarter is lower than the prior year, we've been able to retain stronger overall pricing relative to the market. As mentioned, this pricing position helped us drive improved earnings as we exited the first quarter. Additionally, we consumed a higher concentration of lower-cost ore, including from our own mines, which contributed to our profitability. And third, as previously disclosed, we pulled forward previously planned second quarter maintenance to ensure we are well positioned for an eventual market recovery.

Matthew S. Abbott: As we finished 2023, we did not see appreciable improvement in the market and we remained appropriately conservative with our production plan.

Matthew S. Abbott: First we made the decision to not chase volume in low value markets. Instead, we allocated <unk> volumes to higher yield end markets.

Matthew S. Abbott: While our pricing through the ended the quarter is lower than the prior year, we have been able to retain stronger overall pricing relative to the market.

Matthew S. Abbott: As referenced this pricing position helped us drive improved earnings as we exited the first quarter.

Matthew S. Abbott: Second we consumed a higher concentration of lower cost for including from our own mines, which contributed to our profitability.

Matthew S. Abbott: And third as previously disclosed we pulled forward previously planned second quarter maintenance to ensure we are well positioned for an inverse general eventual market recovery.

Denise M. Dignam: Once we completed this maintenance, we brought the plant back online, and its performance has never been better. Consistent with what I shared in our last earnings call, we have seen our order book velocity improve, and we have increased production across our manufacturing circuit. This supports our expected growth in TT in the second quarter. Now, let's take a step back and look at our transformation plan from a wider lens. The main objective of our plan is to secure our long-term leadership position by becoming one of the lowest cost TIO2 producers globally. Thus, our initial focus was twofold.

Matthew S. Abbott: Once we completed this maintenance we brought the plant back online and its performance has never been better.

Matthew S. Abbott: Consistent with what I shared in our last earnings call. We have seen our order book velocity improved and have increased production across our manufacturing circuit. This supports our expected growth NTT in the second quarter.

Now, let's take a step back and look at our transformation plan from a wider lens.

Matthew S. Abbott: The main objective of our plan is to secure our long term leadership position by becoming one of the lowest cost tier two producers globally.

Matthew S. Abbott: Our initial focus was twofold.

Denise M. Dignam: First, optimizing our manufacturing circuit to drive higher production efficiency. This started with the closure of Quan Yin and redistributing production across lower cost manufacturing sites in North America without sacrificing product quality or reliability. This has been a clear success.

First optimizing our manufacturing circuit to dry higher production efficiency.

Matthew S. Abbott: This started with the closing of <unk> and redistributing production across lower cost manufacturing sites in North America, without sacrificing product quality or reliability.

Matthew S. Abbott: This has been a clear success.

Matthew S. Abbott: Second driving improved productivity from our mining operations and better utilizing that feedstock in our ti to production to.

Denise M. Dignam: Second, driving improved productivity from our mining operations and better utilizing that feedstock in our TIA2 production. To date, our mining performance has shown significant improvement, with the consumption of our own ore feedstock improving to nearly 15% from less than 10% in late 2023. The meaningful progress that we are making on cost savings is clearly evident in the first quarter results. Our actions more than offset the decline in local prices year over year.

Matthew S. Abbott: To date, our mining performance has shown significant improvement with the consumption of our own ore feedstock improving to nearly 15% from less than 10% in late 2023.

The meaningful progress that we're making on cost savings is clearly evident in the first quarter results our actions more than offset the decline in local price year over year.

Matthew S. Abbott: Overall, since we announced the TT transformation plan in 2023, we have eliminated approximately $90 million of operating expenses $50 million of this was in the latter half of 2023 and another $40 million in year over year cost outs were realized in the first quarter of 2024.

Denise M. Dignam: Overall, since we announced the TT transformation plan in 2023, we have eliminated approximately $90 million of operating expenses. $50 million of this was in the latter half of 2023, and another $40 million in year-over-year cost savings were realized in the first quarter of 2024. For the full year 2024, we are well on our way towards our cost out targets of $125 million. Now, I'll turn things over to Matt to dive more deeply into the results.

Matthew S. Abbott: For the full year 2024, we are well on our way towards our cost out targets of $125 million.

Matthew S. Abbott: Now I'll turn things over to Matt to dive more deeply into the results.

Matthew S. Abbott: Thank you, Denise. Good morning, everyone.

Thank you Denise good morning, everyone.

Matthew S. Abbott: Our consolidated net sales for the first quarter were approximately $1.4 billion, compared with net sales of $1.5 billion for the same period in 2023. Primarily reflecting a 6% decrease in volumes in APM and TSS and a 5% decline in price across all three businesses, consolidated adjusted EBITDA decreased 37% year-over-year from $304 million to $193 million.

Matthew S. Abbott: Our consolidated net sales for the first quarter were approximately $1 4 billion compared with net sales of $1 5 billion for the same period in 2023.

Matthew S. Abbott: Primarily reflecting a 6% decrease in volumes and APM in TSS and a 5% decline in price across all three businesses.

Matthew S. Abbott: Consolidated adjusted EBITDA decreased 37% year over year from $304 million to $193 million.

Matthew S. Abbott: This decrease was primarily driven by demand weakness, combined with lower cost absorption in APM and a slower start to 2024 in TSS, partially offset by the cost-out actions in TT that Denise just mentioned. This decline in Consolidated Adocidibita also includes a $5 million unallocated item related to third-party costs associated with the TT Transformation Plan. We expect this amount to recur quarterly for the remainder of the year. Consolidated net income was $52 million compared with $145 million in the prior year quarter.

Matthew S. Abbott: This decrease was primarily driven by demand weakness combined with lower cost absorption in APM and <unk>.

Matthew S. Abbott: Our start to 2024, and PSS, partially offset by the cost out actions in TT that Denise just mentioned.

Matthew S. Abbott: Yeah.

Matthew S. Abbott: This decline in consolidated adjusted EBITDA also includes a $5 million unallocated items related to third party costs associated with the TT transformation plan. We expect this amount to recur quarterly for the remainder of the year.

Okay.

Matthew S. Abbott: <unk> net income was $52 million compared with $145 million in the prior year quarter.

Matthew S. Abbott: Net income per diluted share was $0.34 compared with $0.96 in the prior year quarter. Our corporate expenses were $55 million in the first quarter of 2024, a $10 million increase versus the prior year quarter, and approximately $25 million lower than expected. Some of the costs related to the outcome of the Audit Committee's internal review and the company's remediation of material weaknesses will be lower than we forecast. The costs related to these efforts approximated $14 million during the first quarter, while other anticipated expenses moved into the second quarter.

Matthew S. Abbott: Net income per diluted share was 34 compared with 96 in the prior year quarter.

Matthew S. Abbott: Corporate expenses were $55 million in the first quarter of 2020 for a $10 million increase versus the prior year quarter and approximately $25 million lower than expected.

Some of the costs related to the outcome of the audit committee's internal review and the company's remediation of material weaknesses will lower than we forecasted.

Matthew S. Abbott: The costs related to these efforts approximated $14 million during the first quarter, while other anticipated expenses moved into the second quarter.

Matthew S. Abbott: Adding to this the first quarter further benefited from lower stock based compensation expenses, driven by lower overall achieve performance and the negative discretion exercised by the board of directors on former executives compensation.

Matthew S. Abbott: Added to this, the first quarter further benefited from lower stock-based compensation expenses driven by lower overall achieved performance and the negative discretion exercised by the Board of Directors on former executives' compensation. Finally, the company recognized lower-than-anticipated environmental remediation expenses in the first quarter due to the timing of planned work. We expect corporate expenses to be higher in the second quarter by approximately $15 to $20 million sequentially.

Matthew S. Abbott: Finally, the company recognized lower than anticipated environmental remediation expenses in the first quarter due to timing of planned work.

Matthew S. Abbott: Yes.

Speaker Change: Excuse me, we expect corporate expenses to be higher in the second quarter by approximately $15 million to $20 million sequentially.

Speaker Change: This range, primarily reflects the normalization of expenses associated with the company's long term incentive plan and environmental remediation costs.

Matthew S. Abbott: This range primarily reflects the normalization of expenses associated with the company's long-term incentive plan and environmental remediation. Additionally, the company anticipates expenses related to the remediation of our material weaknesses and other recommendations arising from the Audit Committee's internal review will be relatively flat quarter over quarter. We anticipate there may be additional costs related to the remediation of material weaknesses over the balance of the year.

Speaker Change: Additionally, excuse me the company anticipates expenses related to the remediation of our material weaknesses and other recommendations arising from the audit committee's internal review will be relatively flat quarter over quarter.

Speaker Change: We anticipate there may be additional costs related to the remediation of material weaknesses over the balance of the year.

Turning to our business segment performance starting with TT.

Matthew S. Abbott: Turning to our business segment, Performance, starting with TT, in the first quarter, TT net sales decreased 7% year-over-year to $588 million. This decrease was primarily driven by a 7% decline in pricing, with volume and currency remaining relatively flat. Pricing decreased versus the prior year period, as index-based pricing contractual stability was more than offset by decreases in the market-exposed customer portfolio. Volumes were flat when compared to the prior year quarter, with strength in the Asia-Pacific and EMEA regions offsetting weakness in North America and Latin America. TT's first quarter adjusted dividend was flat at $70 million versus the prior year quarter.

Speaker Change: In the first quarter <unk> net sales decreased 7% year over year to $588 million.

Speaker Change: This decrease was primarily driven by a 7% decline in pricing with volume and currency remaining relatively flat.

Speaker Change: Price decreased versus the prior year period as index based pricing contractual stability was more than offset by decreases in the market exposed customer portfolio.

Speaker Change: Volumes were flat when compared to the prior year quarter with strength in the Asia Pacific and EMEA regions offsetting weakness in North America, and Latin America.

Speaker Change: <unk> first quarter, adjusted EBITDA was flat at $70 million versus the prior year quarter.

Speaker Change: Adjusted EBITDA margin improved 100 basis points to 12%, reflecting the impact of a decrease in price more than offset by the cost savings realized from the TT transformation plan.

Matthew S. Abbott: Adjusted EBITDA margin improved 100 basis points to 12%, reflecting the impact of a decrease in price more than offset by the cost savings realized from the TT transformation plan. On a sequential basis, net sales decreased by 10%, completely driven by a decline in volume. Adjusted EBITDA increased by 9% versus the prior quarter, primarily driven by the referenced actions to allocate volumes to higher yielding regions and the timing of lower cost or consumption. Moving now to our TSS segment.

Speaker Change: On a sequential basis net sales decreased by 10% completely driven by a decline in volume adjusted.

Speaker Change: Adjusted EBITDA increased by 9% versus the prior quarter, primarily driven by the referenced actions to allocate volumes to higher yielding regions and the timing of lower cost of oil consumption.

Speaker Change: Moving now to our TSS segment.

Speaker Change: For the first quarter GSS net sales were approximately $449 million.

Matthew S. Abbott: For the first quarter, TSS net sales were approximately $449 million, down 8% from the first quarter of 2023. This decrease was the result of a 6% decrease in volume and a 2% decrease in price with currency impact flat. The volume decrease was primarily due to lower demand for the foam propellants.

Speaker Change: Down 8% from the first quarter 2023.

This decrease was the result of a 6% decrease in volume and a 2% decrease in price with currency impact flat.

Speaker Change: The volume decrease was primarily due to lower demand in the phone propellant for the other.

Speaker Change: Yes.

Matthew S. Abbott: While volumes in the overall refrigerants product portfolio remained relatively flat, we did observe weaker demand in the automotive OEM market, in line with market expectations. However, this was partially offset by increased demand for Opteon products in stationary end markets, driven by the regulatory transition to low-GWP solutions. The year-over-year price decrease was primarily driven by weaker legacy refrigerant pricing influenced by higher market inventory levels. We anticipate these legacy refrigerant inventory levels to remain elevated throughout the remainder of the year.

Speaker Change: While volumes in the overall refrigerants product portfolio remained relatively flat, we did observe weaker demand in the automotive OEM market in line with market expectations.

Speaker Change: This was partially offset by increased demand for <unk> products and stationary end markets driven by the regulatory transition to low GW P solutions.

The year over year price decrease was primarily driven by weaker legacy refrigerant pricing influenced by higher market inventory levels.

Speaker Change: We anticipate these legacy refrigerant inventory levels to remain elevated throughout the remainder of the year.

Speaker Change: Contractual pricing declines in the auction.

Matthew S. Abbott: Contractual pricing declines in the option Auto OEM market contributed to this decline. This weaker refrigerants product portfolio pricing was partially offset by stronger Opteon blends pricing, consistent with stronger stationary demand. First quarter adjusted EBITDA for TSS decreased 18% year-over-year to $151 million, with adjusted EBITDA margin down 4 percentage points to 34%. These declines were driven by decreases in sales, volume, and price, as well as ongoing investments in emergent cooling and next-generation refrigerants.

Speaker Change: Auto OEM market contributed to this decline.

Speaker Change: This weaker refrigerants product portfolio pricing was partially offset by stronger opt you on Brent blended pricing consistent with strongest stationary demand.

Speaker Change: First quarter adjusted EBITDA for TSS decreased 18% year over year to 151 million with adjusted EBITA margin down four percentage points to 34%.

Speaker Change: These declines were driven by the decreases in sales volume and price as well as ongoing investments in emerging cooling and next generation refrigerants.

Matthew S. Abbott: On a sequential basis, net sales increased 20%, with volume and price increasing 15% and 5%, respectively. This increase reflected seasonal strength across the refrigerants product portfolio, partially offset by the softer volumes in the foam propellants and other products portfolio due to its exposure to construction markets, which remain weak. Now turning to APM.

Speaker Change: On a sequential basis net sales increased 20% with volume and price, increasing 15% and 5% respectively.

Speaker Change: This increase reflected the seasonal strength across the refrigerant product portfolio.

Speaker Change: Honestly offset by the softer volumes in the phone propellant and other products portfolio due to its exposure to construction markets, which remain weak.

Speaker Change: Now turning to APM.

Matthew S. Abbott: APM's first quarter 2024 net sales were $299 million, a 23% decrease compared to the first quarter of 2023. This decrease was primarily driven by an 18% decline in volume, a 5% decrease in price, and a flat currency impact. The volume decrease was primarily due to weaker demand in more economically sensitive and non-strategic end markets and the tail impact of a previously disclosed extended maintenance outage during the fourth quarter of 2023, which remains resolved. Price decreased primarily due to mix and softer market dynamics compared with the prior year.

<unk> first quarter 2024, net sales were $299 million or 23% decrease compared to the first quarter of 2023.

Speaker Change: This decrease was primarily driven by an 18% decline in volume.

Speaker Change: A 5% decrease in price and flat currency impact.

Speaker Change: The volume decrease was primarily due to weaker demand and more economically sensitive and non strategic end markets and the tail impact of a previously disclosed extended maintenance outage during the fourth quarter of 2023, which remains result.

Price decrease primarily due to mix and softer market dynamics compared with the prior year.

Speaker Change: First quarter 2024, net sales for the performance solutions product portfolio were $113 million down 22% versus the prior year quarter.

Matthew S. Abbott: First quarter 2024 net sales for the Performance Solutions product portfolio were $113 million, down 22% versus the prior year quarter. First quarter 2024 net sales for the advanced materials product portfolio were 186 million, down 24% versus the prior year quarter. Adjusted EBITDA for APM was $30 million, a 64% decline year over year, with adjusted EBITDA margin down 12 percentage points to 10%. These declines were primarily the result of a decrease in sales price, lower volume that drove lower fixed cost absorption, and the impact of a now completed extended maintenance outage partially offset by lower input costs. On a sequential basis, APM net sales decreased 8% with a 1% decrease in price, an 8% decrease in volume, and a 1% favorable currency impact.

Speaker Change: First quarter 2024, net sales for the advanced materials product portfolio were $186 million down.

Down 24% versus the prior year quarter.

Speaker Change: Adjusted EBITDA for APM was $30 million or 64% decline year over year with adjusted EBITDA margin down 12 percentage points to 10%.

Speaker Change: These declines were primarily the result of the decrease in sales price lower volume that drove lower fixed cost absorption and the impact of a now completed extended maintenance outage, partially offset by lower input costs.

Speaker Change: On a sequential basis APM net sales decreased 8% with a 1% decrease in price and 8% decrease in volume and a 1% favorable currency impact.

Matthew S. Abbott: From a product portfolio perspective, net sales declined 3% in advanced materials and 16% in performance solutions, primarily driven by ongoing demand softness in the more economically sensitive end markets in the advanced materials product portfolio and specific product lines within the performance solutions product portfolio. The performance chemicals and intermediates business in the company's other segment had net sales and adjusted EBITDA for the first quarter of 2024 of $14 million and $2 million, respectively.

Speaker Change: From a product portfolio perspective, net sales declined 3% in the advanced materials and 16% in performance solutions.

Speaker Change: Primarily driven by ongoing demand softness in the more economically sensitive end markets and the advanced materials product portfolio and specific product lines within the performance solutions product portfolio.

Speaker Change: The performance chemicals, and intermediates business and the Companys other segment had net sales and adjusted EBITDA for the first quarter of 2024, a $14 million and $2 million respectively.

Speaker Change: Turning now to our balance sheet and liquidity position.

Matthew S. Abbott: Turning now to our balance sheet and liquidity position, as of March 31, 2024, our consolidated gross debt was $4.1 billion. Our liquidity position was $1.6 billion, which included $746 million in unrestricted cash and cash equivalents and $853 million in revolver capacity, net of outstanding letters of credit. We did not draw on our revolver during the quarter, and our net leverage ratio increased to 3.7 times.

Speaker Change: As of March 31, 2020 for our consolidated gross debt was $4 1 billion.

Speaker Change: Our liquidity position was $1 6 billion, which included $746 million in unrestricted cash and cash equivalents.

Speaker Change: $853 million in revolver capacity net of outstanding letters of credits.

Speaker Change: We did not draw on our revolver during the quarter.

Speaker Change: Our net leverage ratio increased to three seven times.

Speaker Change: We also maintained $607 million in restricted cash and restricted cash equivalents, primarily held in the water district settlement funds per the terms of the U S. Public water system settlement agreement that we have discussed before.

Matthew S. Abbott: We also maintain $607 million in restricted cash and restricted cash equivalents primarily held in the Water District Settlement Fund under the terms of the U.S. Public Water System Settlement Agreement that we have discussed before. We anticipate that we will no longer maintain our reversionary interest in this fund under the terms of the U.S. Public Water District Settlement Agreement in the second quarter of 2024. When we relinquish our interest in this fund, we will also remove our current outstanding liability under this settlement.

Speaker Change: We anticipate that we will no longer maintain our reversionary interest in this fund under the terms of the U S public water district settlement agreement in the second quarter of 2024.

Speaker Change: When we relinquish our interest in this fund we will also remove our current outstanding liability under the settlement.

Matthew S. Abbott: The total amount of this settlement was fully funded in Q3 of 2023 and requires no additional funding from unrestricted cash to meet this obligation. Our operating cash flow during the first quarter came in slightly better than expectations with a use of cash from operations of $290 million. Capital expenditures were $102 million, in line with our expectations, and we paid out $37 million in dividends to shareholders. As a reminder, outside of the networking capital timing actions disclosed in our Form 10-Q, we have a historical pattern of seasonality when it comes to operating cash flow due to the timing of sales and inventory. For the remainder of the first half of 2024, we expect unrestricted cash and cash equivalents to remain relatively flat.

Speaker Change: The total amount of the settlement was fully funded in Q3 of 2023 and requires no additional funding from unrestricted cash to meet this obligation.

Speaker Change: Our.

Matthew S. Abbott: And then we expect to work in a capital source of cash in the second half of the year as we sell product from inventory and collect receivables from our customers. In terms of our capital allocation, I wanted to take a moment to reiterate that we are focused on taking a balanced and disciplined approach to how we allocate capital. Our current strategy focuses on the following areas. One, selectively invest in organic and inorganic growth to enhance our portfolio, and to resolve contingent or accrued liabilities on terms and conditions deemed to be in the best interest of the company and our stakeholders. 3.

Speaker Change: Cash flow during the first quarter came in slightly better than expectations with a use of cash from operations of $290 million.

Speaker Change: Capital expenditures were $102 million in line with our expectations and we paid out $37 million in dividends to shareholders.

Speaker Change: As a reminder.

Speaker Change: Outside of the networking capital timing actions disclosed in our Form 10-Q, we have a historical pattern of seasonality when it comes to operating cash flow due to the timing of sales of inventory.

Speaker Change: For the remainder of the first half of 2024, we expect unrestricted cash and cash equivalents remained relatively flat.

Speaker Change: And then we expect a working capital source of cash in the second half of the year as we sell product from inventory and collect receivables from our customers.

Speaker Change: In terms of our capital allocation I wanted to take a moment to reiterate that we are focused on taking a balanced and disciplined approach to how we allocate capital.

Speaker Change: Our current strategy focuses on the following areas.

Speaker Change: One <unk>.

Speaker Change: Selectively invest in organic and inorganic growth to enhance our portfolio.

Speaker Change: To resolve contingent or accrued liabilities on terms on base you seem to be in the best interest of the company and our stakeholders.

Speaker Change: Three maintain appropriate leverage and for return cash to shareholders.

Matthew S. Abbott: Maintain appropriate leverage and 4. Return cash to shareholders. Lastly, I would like to note that we continue to work on our remediation of the four material weaknesses disclosed in our annual report on Form 10-K. We are devoting substantial resources toward the implementation of enhanced procedures and internal controls over financial reporting. We have established a project management office to monitor progress, and we have also engaged several professional services firms to assist in the execution of a comprehensive remediation plan. We have updated our disclosures around our remediation progress in item four of our recently filed Form 10-Q, and will continue to provide updates in our future SEC filings. With that, Denise, back to you.

Speaker Change: Lastly, I would like to note that we continue to work on our remediation of the four material weaknesses disclosed in our annual report on Form 10-K.

Speaker Change: We are devoting substantial resources towards the implementation of enhanced procedures and internal controls over financial reporting.

Speaker Change: We have established a project management office to monitor progress and we have also engaged several professional services firms to assist in the execution of a comprehensive remediation plan.

Speaker Change: We have updated our disclosures around our remediation progress in item four of our recently filed Form 10-Q, and we will continue to provide updates in our future SEC filings.

Speaker Change: With that Denise back to you.

Denise M. Dignam: Thank you, Matt. Now, let's turn to our outlook. For now, we're going to continue to provide an outlook for the quarter ahead. On a consolidated basis, we expect net sales to increase approximately 15% sequentially in the second quarter, with consolidated adjusted EBITDA growing in line, also up approximately 15%. We expect TT to achieve sequential net sales growth in the range of 15%, reflecting the strength in our order book. Although we haven't observed a broad-level market catalyst, we have seen some slight seasonal demand strength in limited end markets and in some regions.

Denise M. Dignam: Thank you, Matt, let's turn to our outlook.

Denise M. Dignam: For now we're going to continue to provide an outlook for the quarter ahead.

Denise M. Dignam: On a consolidated basis, we expect net sales to increase approximately 15% sequentially in the second quarter with consolidated adjusted EBITDA growing in line also up approximately 15%.

Denise M. Dignam: We expect <unk> to achieve sequential net sales growth in the range of 15%, reflecting the strength in our order book.

Although we haven't observed a broad level market catalysts, we have seen some slight seasonal demand strength in limited end market and in some regions.

Denise M. Dignam: We anticipate adjusted EBITDA for TT growing in line with the sequential increase in net sales. The growth will be supported by higher volumes and improved fixed-cost absorption. However, this will be partially offset by the timing shift of higher costs for consumption from the first quarter to the second quarter.

Denise M. Dignam: We anticipate adjusted EBITDA for TT growing in line with the sequential increase in net sales.

Denise M. Dignam: Both will be supported by higher volumes and improved fixed cost absorption.

However, this will be partially offset by the timing shift of higher costs for consumption from the first quarter to the second quarter.

Denise M. Dignam: We expect TSS to grow sequentially in the mid teens for both net sales and adjusted EBITDA driven by both seasonality and elevated demand for <unk> products.

Denise M. Dignam: We expect TSS to grow sequentially in the mid-teens for both net sales and adjusted EBITDA driven by both seasonality and elevated demand for Optium products. The projected sequential growth for adjusted EBITDA incorporates a modest offset from higher input costs from non-Corpus Christi source materials to service demand growth, as well as lower fixed cost absorption on our legacy refrigerant production. It also includes continued investments in next-generation refrigerants and emerging corn. We anticipate these R&D investments over the year to be approximately $15 million.

Denise M. Dignam: The projected sequential growth for adjusted EBITDA incorporate incorporate a modest offset from higher input costs from non corpus Christi source materials to service demand growth as well as lower fixed cost absorption on our legacy refrigerated production.

Denise M. Dignam: It also includes continued investment in next generation refrigerants and emerging corn.

Denise M. Dignam: We anticipate these R&D investments over the year to be approximately $15 million.

Denise M. Dignam: Finally, we anticipate APN net ATM net sales to grow in low teens sequentially driven by the performance solutions product portfolio, we expect a slight improvement in performance across the advanced materials product portfolio, reflecting the modest recovery that I mentioned earlier in some of our economically.

Denise M. Dignam: <unk> end markets.

Denise M. Dignam: We also anticipate adjusted EBITDA, increasing close to 30% sequentially in APM as mix and fixed cost absorption improve as volume increases.

Denise M. Dignam: As <unk> as.

Denise M. Dignam: Finally, we anticipate APM net sales to grow in the low teens sequentially, driven by the performance solutions product portfolio. Additionally, we expect a slight improvement in performance across the advanced materials product portfolio reflecting the modest recovery that I mentioned earlier in some of our economically sensitive end markets. We also anticipate adjusted EBITDA increasing close to 30% sequentially in APM as mixed and fixed cost absorption improves as volume increases. As I mentioned in my opening, I received a number of questions on TSS during our recent investor meeting, so I wanted to spend some time diving deeper into this business. We've also incorporated several slides in our earnings supplement that provide some additional details. Let's start with a few of the basics.

Denise M. Dignam: As I mentioned in my opening I received a number of questions in Ts on TSS during our recent investor meetings, Taiwan I wanted to spend some time diving deeper into this business.

Denise M. Dignam: We've also incorporated several slides in our earnings supplement that provides some additional detail.

Denise M. Dignam: Now, let's start with a few of the basics.

Denise M. Dignam: TSS consists of two different product portfolios, first refrigerants, and the second is foam propellant and others, or FP&O. Our refrigerants product portfolio covers thermal management solutions for end markets such as mobile and stationary air conditioning for residential, commercial, and industrial applications. Our FPNL product portfolio covers end markets such as phone blowing agents and propellants, including pharmaceutical grades. Approximately 80% of our overall TSS business is concentrated in North America and EMEA.

Denise M. Dignam: TSS consistent two different product portfolios.

Denise M. Dignam: First refrigerants and the second is on propellant and others or <unk> P&L.

Denise M. Dignam: Ah refrigerants product portfolio covers thermal management solutions for end markets, such as mobile and stationary air conditioning for residential commercial and industrial applications.

Denise M. Dignam: Our P&L product portfolio covers and markets such as bone blowing agents in propellants, including pharmaceutical grade.

Denise M. Dignam: Approximately 80% of our overall TSS business is concentrated in North America and EMEA.

Denise M. Dignam: Many of our products across both of our refrigerant and F P&L product portfolio utilize low global warming potential or DWP technology.

Denise M. Dignam: Many of our products across both of our refrigerants and FP&O product portfolio utilize Low Global Warming Potential, or GWP, technologies, most notably our Option brand and our HP 152A propellant. This is important because our TSS business is closely tied to the regulatory transitions established under the Kigali Amendment to the Montreal Protocol and more directly impacted by the EUF Gas Regulation and the U.S. EMAC. These regulatory actions are the catalyst driving the transition to low GWP solutions that is currently underway.

Denise M. Dignam: Most notably our <unk> brand and our HPE $1 52, a propellant.

Denise M. Dignam: This is important because our TSS business is closely tied to the regulatory transitions established under the Golly Amendment to the Montreal protocol and more directly impacted by the EU F gas regulation in the U S impact.

Denise M. Dignam: These regulatory actions are the catalysts driving a transition to low <unk> solutions that is currently underway.

Denise M. Dignam: Ah refrigerants product portfolio is most directly impacted by the regulatory <unk> regulatory transitions and it makes up about 80% of our TSS sales.

Denise M. Dignam: Our refrigerants product portfolio is most directly impacted by the regulatory transitions, and it makes up about 80% of our TSS sales. In terms of markets, our low GWP Opteon products are growing in automotive applications, initially through OEMs, and then to the auto aftermarket using a pure Opteon YF solution. Our refrigerants product portfolio also provides an option blend solution for a stationary air conditioning and commercial refrigeration application. Opteon blends reflect the combination of our Opteon products and certain legacy refrigerants for new and retrofit applications.

Denise M. Dignam: In terms of markets are low <unk> products are growing in automotive applications initially through Oems and then to the auto aftermarket using a pure <unk> solution.

Denise M. Dignam: Ah refrigerants product portfolio also provides an <unk> blend solution for a stationary air conditioning and commercial refrigeration applications.

Denise M. Dignam: <unk> blends reflect a combination of our RPM products and certain legacy refrigerate refrigerants for new and retrofit applications.

Denise M. Dignam: This product portfolio also includes legacy refrigerants, although they are declining in our overall mix due to the regulatory-driven transition towards Option Low GWP solutions. On a trailing 12-month basis, through the first quarter of 2024, our low GWP products will make up approximately 80% of our overall refrigerants volume in EMEA and 30% of our refrigerants volume in the U.S. This compares to 70% and 25%, respectively, on the same basis a year ago.

Denise M. Dignam: This product portfolio also includes legacy refrigerants.

Denise M. Dignam: Although they are declining in our overall mix due to the regulatory driven transition towards <unk> low GWB solutions.

Denise M. Dignam: On a trailing 12 month basis to the first quarter of 2024 are low GW P products make up approximately 80% of our overall refrigerant volume in EMEA and.

And 30% of our refrigerant volumes in the U S.

Denise M. Dignam: This compares to 70% and 25% respectively on the same basis a year ago.

Denise M. Dignam: We anticipate this mix will continue to shift as additional step downs occur later in the decade. This is driven by regulatory transitions taking place in key end markets in the U.S. and in the EU and, of course, our strong suite of patents protecting our option solutions. We are supporting the continued regulatory transition in these regions through our investment in the expansion of our Corpus Christi site, which will provide a 40% increase in capacity for up and down. I'm happy to share that this expansion is on plan to be completed during the fourth quarter of this year, and we will start production in early 2025.

Denise M. Dignam: We anticipate this mix will continue to shift as additional step downs occur later in the decade.

Denise M. Dignam: This is driven by the regulatory transitions taking place in key end markets in the U S and in the EU and of course, our strong suite of patents protecting our <unk> solutions.

Denise M. Dignam: We are supporting the continued regulatory transition in these regions through our investment in the expansion of our Corpus Christi site, which will provide a 40% increase in capacity for <unk> I'm happy to share that this expansion is on plan to be completed during the fourth quarter of this year and we will see.

Denise M. Dignam: Startup production in early 2025.

Denise M. Dignam: We are taking other actions to realize growth opportunities in TSS outside of those being driven by regulation.

Denise M. Dignam: We are taking other actions to realize growth opportunities in TSS outside of those being driven by regulation. For example, we announced the expansion of our production of Option low GWP foam in late 2026, continuing to secure our position in the attractive end markets that we serve. Another example we shared last year is around the development of our new specialty fluid for two-phase emergent cooling. With anticipated commercialization in 2026, subject to regulatory approval, this is a game changer for how computing hardware will be used in the future.

Denise M. Dignam: For example, we announced the expansion of our production of <unk> low DWP boom in late 2026, continuing to secure our position the attractive end markets that we serve.

Denise M. Dignam: Another example, we shared last year is around the development of our new specialty fluids for tuesday's emerging form.

With anticipated commercialization in 2026 subject to regulatory approval. This is a game changer for how computing hardware will be called in the future.

Denise M. Dignam: This is especially true given the trend shifting from CPU to high-powered GPU computing. The growth of data centers isn't going away, and it is unsustainable without better and more efficient polling solutions. Two-phase immersion cooling technology outperforms single-phase immersion cooling and direct-to-chip technologies with superior thermal efficiency to meet the higher-powered computing needs of today and the future. Let's talk first about how this solution works. It is two-phase and immersion because the solution efficiently cools the computer hardware in the fluid, and not just the chips, but all immersed components. It then transfers the energy by vaporizing the liquid to produce a gas that hits a cold condensing plate and returns to a fluid form.

Denise M. Dignam: This is especially true given the trend shifting from CPU to high powered GPU computing.

Denise M. Dignam: The growth of data centers isn't going away and it is unsustainable without better and more efficient cooling solutions.

Denise M. Dignam: Our two phase emerging cooling technology outperform single phase immersion coin and directed chip technology with.

Denise M. Dignam: Imperial's thermal efficiency to meet the higher powered computing needs of today and the future.

Speaker Change: Let's let's talk first about how this solution works.

Speaker Change: It is two phase and immersion.

Speaker Change: The solution of efficiently tools, the computer hardware in the fluid and not just the chips, but all <unk> components.

Speaker Change: Then transfers the energy by Vaporizing illiquid to produce the gas that hit the coal condensing late and returns to our fluid form.

Denise M. Dignam: The evaporative cooling of our two-phase emergent cooling liquid provides superior heat removal compared to single-phase chemistries, chemistries where energy removal is limited by liquid-phase heat transfer. The solution is low maintenance and requires a simpler infrastructure as chillers or evaporative coolers are not required. Importantly, if the submerged hardware needs to be serviced or replaced, it requires little to no cleaning because the cooling fluid sheets off the equipment as it's lifted out. Lastly, our immersion cooling solution does not corrode hardware, which is a key concern of customers with alternative liquid cooling products. You haven't seen the technology in action yet.

Speaker Change: The evaporative cooling of our Tuesdays emerging pointing liquid provide superior heat removal compared to single phase chemistry, Chemistries, where energy renewable is limited by illiquid feed key transfer.

Speaker Change: The solution is well maintenance and requires a simpler infrastructure as chillers or evaporate evaporative coolers are not required.

Speaker Change: Importantly.

Speaker Change: At the submerged hardware needs to be serviced or replaced it requires little to no cleaning because the pooling sheets, all the equipment as it lifted out.

Lastly, our emerging corn solutions does not corrode hardware, which is a key concern of customers with alternative liquid point products.

Denise M. Dignam: Have a look at the brief video on our investor website. Now, let's look at some of the significant benefits of the solution. It allows the reduction of the required footprint for data center facilities by an estimated 60%. It delivers cooling energy savings of up to 90%, and it is projected to nearly eliminate water use. These benefits are groundbreaking for the data center industry when compared against current air-cooled systems. Some of you have asked about whether the designation of these products as PFAS is an issue, and the answer is, it shouldn't be. I say this because of the following.

Speaker Change: You haven't seen the technology in action have a look at the brief video on our Investor website.

Speaker Change: Now, let's look at some of the significant benefits of this solution.

Speaker Change: It allows the reduction of required footprint for datacenter facilities by an estimated 60%.

Speaker Change: It delivers cooling energy savings of up to 90% and it is projected to immediately eliminate water usage.

Speaker Change: These benefits are groundbreaking for the datacenter industry when compared against current air cooled systems.

Speaker Change: Some of you have asked about whether the designation of these products as fast as an issue and the answer is it shouldn't be.

Speaker Change: I say this because of the following.

Denise M. Dignam: One, the environmental concerns some have raised over two-phase immersion cooling can be mitigated. And let's not forget, the solution itself brings significant environmental benefits in terms of energy and water usage. These systems are designed to be closed-loop, sealed systems, and the materials used must be manufactured under the highest standards. Not only do we support rigorous environmental testing based on science-based regulation, but we also support manufacturing standards through our responsible manufacturing commitment.

Speaker Change: One the.

Speaker Change: <unk> of concern some have raised over two phase emerging point can be mitigated and let's not forget the solution itself brings significant environmental benefits in terms of energy and water usage.

Speaker Change: To these systems are designed to be closed loop sealed system and the materials used must be manufactured under the highest standards.

Speaker Change: Not only do we support rigorous environmental testing based on science based regulation, but we also support manufacturing standards through a responsible manufacturing commitments.

Speaker Change: Three let's be clear the <unk>.

Denise M. Dignam: Three, let's be clear. The cooling alternatives used today, including air-cooled data centers or newer liquid cooling technologies, such as direct-to-chip or single-phase immersion cooling, use fluorinated chemistry. However, regulatory classifications of these chemistries will differ by country and region.

Speaker Change: Julian alternatives used today, including air cooled datacenters or newer liquid cooling technologies, such as direct to chip a single phase emergent cooling use fluorinated chemistries.

Speaker Change: Regulatory classifications of these campus chemistries will differ by country and region.

Denise M. Dignam: The bottom line is this; we believe our two-phase emergent cooling will be unmatched as a sustainable solution that addresses some of the major technological barriers to next-generation computing and the data centers needed to enable it. We're currently sampling this technology with key partners across the value chain, including hyperscalers, server, and chip manufacturers, and we are seeing strong interest in our solution and its benefits. It's innovations like immersion cooling that provide us with the opportunity to build upon our leadership position in the industry and support our mid to high single-digit growth potential through the end of the decade with adjusted EBITDA margins averaging 30% or greater.

The bottom line is that we believe our two phased emerging corn will be unmatched as a sustainable solution that addresses some of the major technological barriers to the next generation computing in the datacenters needed to enable it.

Speaker Change: We are currently sampling this technology with key partners across the value chain, including Hyperscale server and chip manufacturers and we are seeing strong interest in our solution and its benefits.

Speaker Change: Its innovations like emerging coin that provide us with the opportunity to build upon our leadership position in the industry and support our mid to high single digit growth potential through the end of the decade with adjusted EBITDA margins, averaging 30% or greater.

Speaker Change: In closing our focus continues to be on the two clear priorities that I shared on our last call.

Denise M. Dignam: In closing, our focus continues to be on the two clear priorities that I shared on our last call. One, take costs out in APM, building on what we have done in TT, as well as our functional and corporate overhead, to invest in our businesses, where we have significant opportunities to grow. Both of these priorities are supported by ensuring that we are living our values each and every day. We are now ready for questions.

Speaker Change: One take cost out and APM building on what we have done in TT as well as our functional and corporate overheads.

Speaker Change: To invest in our businesses, where we have significant opportunities to grow.

Speaker Change: Both of these priorities are supported by ensuring we are living our values each and every day.

Speaker Change: Luckily we are now ready for questions.

Speaker Change: Okay.

Speaker Change: We are now opening the floor for question and answer session. If you'd like to ask a question. Please press star and number one on your telephone keypad. Please note that and others can.

Operator: We are now opening the floor for questions and answers. If you'd like to ask a question, please press star and number 1 on your telephone keypad. Please note that each analyst can ask one question with one follow-up. Our first question comes from W. Fischer from Goldman Sachs. Your line is now open. Yes, good morning.

Speaker Change: Ask one question with one follow up.

Speaker Change: Our first question comes from Duffy Fischer from Goldman Sachs. Your line is now open.

Patrick Duffy Fischer: Yes, good morning.

Patrick Duffy Fischer: Yes, good morning. First question: we're getting a lot of incomings just around the guide. So, first, the guide you gave last quarter, you know, basically two working days left in the quarter, and you walked us to 160, came out at 193. So, just how can the gap be that big?

Patrick Duffy Fischer: First question, we're getting a lot of incoming is just around the guide. So first the guide you gave last quarter basically two working days left in the quarter and you walked us to 160 came out of 193. So just how can that gap be that big are you confident in like your reporting systems that you are getting the right numbers and timely.

Patrick Duffy Fischer: Are you confident in, like, your reporting systems that you're getting the right numbers in a timely manner? And then second on that, the guide for this quarter, what would you call kind of a one time only as we use this quarter's guide as a bridge to move forward? You know, I think about things like the internal review cost. Does that naturally go away as the year progresses? Are there any other things that get meaningfully better that we can identify today?

And then second on that the guide for this quarter, what would you call kind of onetime in there as we use this quarter's guide as a bridge to move forward I think about things like the internal review costs does that naturally go away as the year progresses are there anything else.

Patrick Duffy Fischer: That gets meaningfully better that we can identify today.

Okay.

Speaker Change: Thanks, Stephanie for that for the question, so I'm going to I'm going to start it off and relative to the difference in the EBITDA versus our what we discussed at the last earnings call. There is really two primary reasons one of them is related to.

Denise M. Dignam: Thanks, Stephanie, for the question. So I'm going to start it off.

Denise M. Dignam: And, you know, relative to the difference in EBITDA versus what we discussed on the last earnings call, there are really two primary reasons. One of them is related to the shift in our OR costs. And the second one is related to changes in corporate costs, which I'll have Matt talk about.

Speaker Change: Our this shift in our ore costs.

So and then the second one is related to changes in the in the in corporate costs, which I'll have I'll have Matt talk about but just first talking about the shift in or one of the things to highlight about our.

Denise M. Dignam: But just first talking about the shift in ORs. You know, one of the things to highlight about our competitive advantage and how we run our circuit is that we have an ability to run a very, very wide variety of ORs. You know, and we can change that, whatever we're running really day to day. And you can look at a given plant site, and you could say, you know, you could be running seven different ORs in a day, different blends.

Speaker Change: Our competitive advantage in how we run our circuit as we have.

Matthew S. Abbott: Our ability to run a very very wide variety of ores and.

Matthew S. Abbott: And we can change that.

Matthew S. Abbott: Whatever we're running really day to day and you can look at it at a given plant site and you can say it could be running several different <unk> in a day different blend and we changed that based on what our production needs are what plants are running so it's actually pretty pretty complicated, but I'm going to turn it.

Denise M. Dignam: And we change that, you know, based on what our production needs are, what plants are running. So it's actually pretty, pretty complicated. But I'm going to turn it over to Matt to talk about the process for understanding these costs and why that was a change versus what we shared with you on the last call. And then he can also talk about the corporate charges and the guide to the one time.

Matthew S. Abbott: To add to Matt to talk about what is the process for understanding these costs and why that was a that was a change versus what we shared with you in the last call and then he can also talk about the corporate charges and a guide to the one time.

Matthew S. Abbott: Yeah, so I think, you know, on the ore cost, right? So, as Denise said, right, the business is making supply chain optimization decisions all the time, right, and so as we think about the books, we close our books monthly, and so we typically get actual cost of manufacturing data in the early part of the subsequent month for the month that we're reporting on. So for March, obviously, early April is when we started to get that actual data; you know, we close our plants in SAP and run the material ledgers on that monthly cycle.

Matthew S. Abbott: Yes, so I think on the.

Matthew S. Abbott: On the oil cost right, so as Denny said right.

The business is making supply chain optimization decisions all the time right and so as we think about the books, we close our books monthly.

Matthew S. Abbott: And so we typically get actual cost of manufacturing data in the early part of the subsequent month for the month footwear reporting on so for March obviously early April is when we started to get that actual data, we closed a plant and SAP and run the material ledges on that monthly cycle, we don't close more frequently than that and so our ERP.

Matthew S. Abbott: We don't close more frequently than that, and so our ERP, unfortunately, doesn't give us that sort of near real-time visibility to some of the costs that are coming through in some of those supply chain decisions. So for favorability coming through in the latter part of the quarter and in March, right, it was really April that we saw the full extent of that. Otherwise, we're operating with some estimates, and given some of the variables there, those are quite complex estimates to work through.

Matthew S. Abbott: It doesn't give us that sort of near real time visibility to some of the costs that are coming through in some of those supply chain decisions. So for favorability coming through in the latter part of the quarter and in March. It was really April that we saw the full extent of that otherwise we're operating with some estimates and given some of the variables that is a quite complex estimations to walk through.

Matthew S. Abbott: On the corporate side, it was really a couple of things, right? The internal review, as I mentioned, those costs are around $14 in the quarter. We expect those to continue like that in the second quarter. And then we had some favorability in environmental and incentive compensation in Q1 that we don't expect to be the same in the second quarter. Great, thanks. And then maybe as a follow-up...

Matthew S. Abbott: On the on the corporate side. It was really it was really a couple of things right. The internal review as I mentioned.

Matthew S. Abbott: Those costs to around 14 in the quarter, we expect those to continue like that in the in the second quarter.

Matthew S. Abbott: We had some favorability in environmental in the incentive compensation in Q1 that we don't expect to be the same in the second quarter.

Patrick Duffy Fischer: And then maybe as a follow-up, in TT, I think last year, the last comment I remember is that you were running about 70% on contractual business. And you would think with PPI, that number, you know, those contractual contracts would be up in price this year. But prices for you guys were down seven. So is there a meaningful shift in the amount of your sales that are on contract this year versus last year, and is the implication that the non-contractual stuff is down? You know, if you just do the math, like almost 20% to make up for what on the contractual side should be flattish to upward?

Speaker Change: Great. Thanks, and then maybe as a follow up in TT.

I think last year, the last comment I remember you were running about 70% on contractual business.

TT: And you would think with PPI that number those contractual contracts would be up in price. This year price for you guys was down seven so is there a meaningful shift in the amount of your sales that are on contract. This year versus last year, and then is the implication that the non contractual stuff is down.

Speaker Change: If you just do the math like almost 20%.

Speaker Change: To make up for what on the contractual side should be flattish to up.

Speaker Change: Okay.

Denise M. Dignam: Hey, thanks for the question. Relative to TT and pricing, you're correct that approximately 70% of our business is contracted. The majority is through PPI, and there is a lag in our contracts when that change is made in pricing. We also have a portion of that contracted business, which is negotiated. And those prices can change quarterly, every six months. So there is a blend there, as well as our more market-exposed channels in distribution and in our flex channel.

Speaker Change: Hey, Thanks, Thanks for the question relative to TTM pricing.

Speaker Change: You are correct that approximately 70% of our.

Speaker Change: Our businesses is contract and the majority is through PPI and there is a lag in our contracts when that that change is made in pricing. We also have a portion of that of that contracted business, which is negotiated.

Speaker Change: And those prices can change quarterly ever six every six months. So there is a blend there as well as we have are more market exposed channels and distribution and in.

Speaker Change: And our flex channel.

Denise M. Dignam: But the one thing I want to kind of draw your attention to is that, you know, we just can't look at deltas in pricing. I think I just encourage you to look at the absolute level of pricing. And I think what you'll see is that, you know, we really are market leaders when it comes to pricing. And I feel really good about, you know, how we have managed prices through this, through this down cycle.

But the one thing I want to draw your attention to is that we just can't look at delta in pricing.

Speaker Change: I'd just encourage you to look at absolute level of pricing and I think what youll see is that we really are market leaders when it comes to pricing and I feel really good about.

Speaker Change: Now we have managed price through this through this down cycle.

Speaker Change: Terrific. Thank you guys.

Patrick Duffy Fischer: Terrific. Thank you, guys.

Our next question comes from John Mcnulty from BMO capital markets. Your line is now open.

John Patrick McNulty: Our next question comes from John McNulty from BMO Capital Markets. Your line is now open.

John Patrick McNulty: Yes, thanks for taking my questions.

John Patrick McNulty: Yeah, thanks for taking my question. So a lot of moving parts in TSS this year, with some of the HFC kind of destocking and refrigerants, and you've got this big expansion project in the back half of the year, as well. Can you help us to think about the trajectory of TSS and its earnings as we progress through the year? And is it going to be the usual seasonality in terms of how it kind of ebbs and flows up in the middle Is it a little bit different this time? I guess, can you help us to think about what would be kind of what to expect from it this year versus kind of normal?

John Patrick McNulty: So a lot of moving parts in TSS. This year with some of the HFC kind of Destocking in refrigerants and you've got this.

This big expansion project in the back half of the year as well I guess can you help us to think about.

John Patrick McNulty: The trajectory of TSS and its earnings as we progress through the year and is it going to be.

John Patrick McNulty: Usual seasonality in terms of how it kind of ebbs and flows up in the middle and then back down in the back half is it is it a little bit different. This time I guess can you help us to think about what would be kind of.

John Patrick McNulty: What do you expect on it this year versus kind of normal.

John Patrick McNulty: Yes.

Thanks for the question John just a couple of things that I can I can talk about we're not going to give a guide for that for the full year.

Denise M. Dignam: Thanks for the question, John. There's a couple things that, you know, I can, I can talk about.

Denise M. Dignam: We're not going to give a guide for the, for the full year. But I, but I will say, you know, what we see for the year is we do see high levels of HFC inventory, but we do see also the, you know, the growth, as we talked about before, you know, mid to high single digits through the end of the decade, you know, with the, with the regulatory, the technology and transition, we see probably for the stationary side of the business more towards the mid single digits on that growth.

Speaker Change: But I will say and what we see for the year is we do see a high levels of HFC.

Speaker Change: Inventory.

Speaker Change: We do see also that the growth as we've talked about before.

Speaker Change: Mid to high single digits up through the end of the decade with the with the regulatory the technology transition, we see probably for the the stationary side of the business more towards the mid single digits on that growth.

Denise M. Dignam: So, what I would say is just kind of stick to our long-term trajectory. This is a super critical and valuable portfolio for us, and we're investing for the future. We see continued growth over the long term, you know, continued growth through this, the rest of the decade, and over the 30% margins to be, to persist.

Speaker Change: So what I would say is just kind of stick to our long term trajectory. This is a super cruise.

Speaker Change: Critical.

Speaker Change: And valuable portfolio for us and we're investing for the future we see over the long term continued growth a decade of growth through the through the branded the rest of the decade and over 30% margins to be to persist.

Speaker Change: Okay. So just just so I'm clear expect it you should be able to hit the middle or the lower end that mid single digit target for even this year in terms of in terms of growth is that right did I understand that right.

John Patrick McNulty: Okay, so just, just so I'm clear, expect that you should be able to hit the middle or the lower end of that mid single-digit target for even this year in terms of growth. Is that right? Do I understand that right?

Denise M. Dignam: Yes, you understood that right. Okay, perfect. And then just a follow-up.

Speaker Change: Yes, you understood that right.

John Patrick McNulty: Okay, perfect. And then just the follow-up would be on the TT business. So, you know, obviously, the low-cost ores and then I guess the high cost in 2Q make things a little bit lumpier than I guess we've seen in the past. And it seems to have kind of eaten up, at least in 2Q, a little bit of the operating leverage in this business. I guess how should we think about that going forward?

Speaker Change: Perfect and then just the follow up would be on on the TT business. So obviously, the low cost doors, and then I guess high cost <unk> make things a little bit lumpier than I guess, we've seen in the past and it seems to have kind of eaten up at least in <unk>, a little bit of the operating leverage in this business.

Speaker Change: How should we think about that going forward is it going to be a more continual kind of lumpy period or is this just kind of one piece that we work through and then back half of the year, you are kind of back to lower cost or lower cost inventory that youre working through.

John Patrick McNulty: Is it going to be a more continual kind of lumpy period, or is this just kind of one piece that we work through, and then the second half of the year you're kind of back to lower cost ores, lower cost of inventory that you're working through, and improved profitability? I guess, how should we be thinking about that?

Speaker Change: Improved profitability I guess, how should we be thinking about that.

Speaker Change: I think I'd go back to what I had said earlier John is that a way to think about it is we.

Denise M. Dignam: I think I'd go back to what I had said earlier, John, a way to think about it is, you know, we make changes, you know, every, every, every day, really, on our ore blends and you know, what production we're running. I think it really evolves as the market evolves for the year. And again, how we run our plan. So it's a key. I really can't give you any more clarity around that for the rest of the year, other than we're going to make the best decisions. You know, as we run our plans and what ores we use, you know, as we run our facility.

Speaker Change: We made changes.

Speaker Change: Every every every day really on our ore blends and.

Speaker Change: Production, we're running I think it really evolved as the market evolves for the year and again, how we run our plants. So it's a key I really can't give you any more.

Speaker Change: Clarity around that for the rest of the year other than we're going to make the best decisions and as we run our plants and what orders we use in our <unk>.

Speaker Change: As we run our facilities.

Speaker Change: Yes.

John Patrick McNulty: Got it. Thanks very much for the call.

Speaker Change: Got it thanks very much for the color.

Speaker Change: Okay.

Speaker Change: Our next question comes from Josh Spector with UBS financial your line is now open.

Joshua David Spector: Our next question comes from Josh Spector from UPS Financial. Your line is now open. Hi, good morning.

Yes, hi, good morning.

Joshua David Spector: Hi, good morning.

Joshua David Spector: I wonder if you could just talk about TIO2. I know you don't have a full year guide here, but as you ramp up your capacity, can you bring on more volumes into 3Q? Hi, Josh. Thanks for the question. Yeah, I mean, we have the capability to bring on more volume.

Joshua David Spector: I Wonder if you could just talk about Tio too no you don't have a full year guide here, but as you ramp your capacity can you bring on more volumes into <unk>.

Joshua David Spector: Thanks.

Joshua David Spector: Hi, Josh Thanks for the thanks for the question, Yes, I mean, we have the capability to bring on more volume for sure.

Denise M. Dignam: Hi, Josh. Thanks for the thanks for the question. Yeah, I mean, we have the capability to bring in more volume for sure. I'm not sure, Josh. Is there a follow-up question to that?

Speaker Change: I am not sure Josh just a follow up question to that.

Speaker Change: Sorry, thanks for waiting there for a minute.

Joshua David Spector: Sorry, yeah, thanks for waiting there for a minute. I guess the other piece I'd ask to follow up on is just as you think about TSS margins long term here, you're talking about growth and two phase and other markets. What about another corpus expansion? Since it seems like that margin delta versus your JV is quite large. Should we expect an investment there? And what would be the timeline? I would say, you know, we

I guess the other piece I'd ask the follow up is just as you think about TSS margins longer term here you are talking about growth in two phase in other markets what about another corpus expansion since it seems like that margin Delta versus your JV is quite large should we expect that investment there and what would be the timeline.

Speaker Change: Yes, I would say when we look at expansions, we're always trying to evaluate what's the right decision, whether we build ourselves or we build with our partner we have not yet made any decision on on future future additional.

Denise M. Dignam: I would say, you know, when we look at expansions, we're always trying to evaluate what's the right decision, whether we build, you know, ourselves or we build with a partner. We haven't yet made any decisions on future, future additional capacity. We're really focused on this 40% expansion. And then we'll, you know, as things progress, and we make decisions, we certainly will, we'll share those.

Speaker Change: <unk>, we're really focused on this 40% expansion and then we will.

Speaker Change: As things progress and we make decisions, we certainly will share those.

Speaker Change: Okay. Thank you.

Speaker Change: Our next question comes from this.

Joshua David Spector: Our next question comes from Arun Viswanathan from RBC. Your line is now open.

This will Nelson from RBC. Your line is now open.

Speaker Change: Hi, This is Adam on for Rune. Thanks for taking my question.

Arun Shankar Viswanathan: Hi, this is Adam speaking on behalf of Arun. Thanks for taking my question. If we were to look out the curve a little bit in TSS, assuming a reasonable market recovery by the time some of those two phase products are commercialized, what do you think the earnings contribution could be? Or to say, what do you think potentially mid-cycle EBITDA could be for TSS a couple

If we were to look out the curve a little bit in TSS.

Adam: Assuming a reasonable market recovery by the time some of those Tuesdays products are commercialized.

Adam: Or do you think the earnings contribution could be.

Adam: Or that is to say what do you think potentially mid cycle EBITDA could be for TSS a couple of years out.

Denise M. Dignam: I would say we're committed to the long-term trajectory, the mid-to-high single-digit growth through the end of the decade and the greater-than-30% margin. This is a disruptive technology, and we're going to have new capacity that comes on in 2026. So, it's difficult to say.

Adam: We're.

Speaker Change: I would say we're committed to the long term trajectory.

Speaker Change: The.

Speaker Change: Mid to high single digit growth through the end of the decade, and the greater than 30% margin.

Speaker Change: This is a this is a disruptive technology.

Speaker Change: And we're going to have new capacity that comes on in 2026, So EBIT difficult to say this is a large market and we're talking about a $3 billion Tam.

Arun Shankar Viswanathan: This is a large market. We're talking about a $3 billion TAM. It's a pretty diverse ecosystem. There are going to be lots of technologies. Our technology, we believe, has the best value proposition, so we believe we're going to be a very sizable participant. But it really depends on how quickly it evolves. Again, we're going to have commercial capacity in 2026. It's a little bit hard to project that going out much farther, Adam.

Speaker Change: It's a pretty it's a pretty diverse ecosystem theres going to be lots of technologies, our technology, we believe that.

Speaker Change: As the best value proposition. So we believe we're going to be a very sizable participant, but it really depends on how quickly it evolves again.

Speaker Change: We're going to have commercial capacity in 2026, a little bit hard to project that going out much farther Adam.

Matthew S. Abbott: Great, thanks. And maybe more short term, I know you guys have a big outflow of some of the restricted cash coming this quarter. I think it was something to the tune of $600 million. Is that most of the remaining outflows for this year? And how much of that restricted cash could we expect to be at a baseline level going forward?

Adam: Great. Thanks, and maybe more short term I know you guys have a big outflows from the restricted cash coming this quarter.

Speaker Change: I think it was something on the tune of $600 million.

Adam: Is that most of the remaining outflows for this year and how much of that restricted cash could we expect seeing what your baseline level going forward. Thanks.

Speaker Change: Yeah, Adam Thanks, Thanks for the question. So yes, we do expect that restricted.

Matthew S. Abbott: Yeah Adam, thanks.

Matthew S. Abbott: Yeah, Adam, thanks for the question. So yeah, we do expect that restricted cash, so the restricted cash, the fund was funded in 2023, right? So from an accounting perspective, it's sitting there as restricted cash. Following the final judgments, you'll see that flow through the cash flow statement here in the second quarter. As we look out, right, we'll continue to contribute to the MOU fund under the terms of the MOU with the other parties.

Speaker Change: The restricted cash obviously the fund was funded in 2023 right. So from an accounting perspective. It is sitting there was restricted cash.

Following the final judgments youll see that flow through the through the cash flow statement here in the second quarter.

Speaker Change: Yes.

As we look out right.

Speaker Change: We'll continue to do our fundings to the Mou fund under the terms of the Mou with the other parties.

Speaker Change: And then from an overall cash perspective as I indicated we think it will be sort of flattish to the mid points of the year and then we expect.

Matthew S. Abbott: And then from an overall cash perspective, you know, as I indicated, we think we'll be sort of flattish to the midpoint of the year, and then we expect, you know, a source of cash rather as we go through the second half of the year. Thank you.

Speaker Change: A source of cash rather as we go through the second half of the year.

Yes.

Thank you.

Speaker Change: Our next question comes from Mike <unk>.

Michael James Leithead: Our next question comes from Mike Leithead from Barclays. Your line is now open. Our next question is from Mike Leithead from Barclays. Your line is now open. Hi Mike, do you have a question? We will be skipping. Our next question comes from Hassan Ahmed from Alembic Global Advisors. Your line is now open. Morning, Denise.

Mike: From Barclays. Your line is now open.

Mike: Our next question is from Mike.

Mike: From Barclays. Your line is now open.

Mike: Hi, Mike do you have a question.

Mike: Hello Hello.

Mike: Churn comes from Hassan Ahmed Alembic.

Speaker Change: How many big Global Advisors. Your line is now open.

Hassan Ijaz Ahmed: You know, I know there are a bunch of moving parts and uncertainty and the like with regard to the European Commission's investigation into anti-dumping, but could you just broadly talk about what the opportunity could be if those anti-dumping measures indeed go through in Europe?

Hassan Ijaz Ahmed: Morning, Denise. You know, a question on TT.

Nathan: Good morning Nathan.

Hassan Ijaz Ahmed: Question on <unk>.

Nathan: I know there are a bunch of moving parts and uncertainty and the like.

Nathan: With regards to the European Commission's investigation on anti dumping, but could you just broadly talk about <unk>.

Nathan: Potentially what the opportunity could be if.

Nathan: If those antidumping measures are indeed go through.

Nathan: And in Europe.

Thanks Hassan.

Denise M. Dignam: Thanks, Hassan. So, first of all, I guess what I want to say is that we are really focused in TT on controlling what we can control and working towards, you know, taking a long-term view of being one of the lowest cost producers. We, you know, really can see in our results the benefit of our TT transformation plan. And, you know, that work continues. I think that, you know, that depending on what happens, there could be some ShareShift, again, it might be transitory, depending on what happens with the inside dumping case.

Hassan Ijaz Ahmed: So first of all I guess, what I want to say is we are really focused in TT on controlling what we can control and working towards you know taking a long term view of being one of the lowest cost producers.

Really you can see in our results the benefit of our <unk> transformation plan and.

Hassan Ijaz Ahmed: That work continues.

Hassan Ijaz Ahmed: I think that.

Hassan Ijaz Ahmed: That.

Hassan Ijaz Ahmed: Depending on what happens there could be.

Hassan Ijaz Ahmed: Some share.

Hassan Ijaz Ahmed: Share shift again, it might be it might be transitory, depending on what happens with the with the anti dumping case, but again, we're just focused on what we can control and making sure that we can compete in any environment and being low cost as well as been phenomenal partners with our.

Denise M. Dignam: But again, we're just focused on what we can control, making sure that we can compete in any environment and be low-cost, as well as being phenomenal partners with our customers. We need to be reliable suppliers and have true partnerships. Fair enough.

Hassan Ijaz Ahmed: Our customers, we need to be reliable suppliers and then have to partnership.

Hassan Ijaz Ahmed: Fair enough, and a question around the guidance. You know, I'm obviously cognizant of the fact that you're not giving full guidance. But you guys did $193 million in Q1 EBITDA, and you're guiding to around $222 million in Q2. Obviously, there are a bunch of moving parts, seasonality in terms of a headwind, but tailwinds-wise, maybe an economic recovery, cost-cutting, and But if I were to just assume for a second that there really is no recovery, and you guys really don't benefit that much from cost cuts, and I just straight-line the $222 million for Q3 and Q4, I get to roughly an EBITDA of $860 million for the full year. Clearly, there is going to be some sort of recovery, and clearly, you guys are going to

Speaker Change: Fair enough.

Speaker Change: A question around the guidance, obviously cognizant of the fact that youre not giving full year guidance.

Speaker Change: But you guys did $193 million in Q1, EBITDA and you're guiding to around $222 million in Q2.

Speaker Change: Obviously, there are a bunch of moving parts seasonality.

Speaker Change: Yes.

Speaker Change: In terms of a headwind the tailwind slides may be an economic recovery.

Speaker Change: Cost cutting and the like but if I were to just assume for a second that there really is no recovery in.

Speaker Change: You guys really don't benefit that much from cost cuts and I just straight line the $222 million for Q3 and Q4.

Speaker Change: I get to like roughly an EBITDA of $860 million for the full year.

Speaker Change: Clearly there is going to be some sort of recovery clearly you guys are going to benefit from cost cuts and the like so is it just fair to assume that at the very least youll do $900 million in EBITDA and 24.

Denise M. Dignam: As I said, I'm not going to give guidance for the full year, but I think, going back to your point, certainly, we're going to see benefits from our cost cuts. We've already seen that dramatically in CT, and we're going to continue that focus.

Speaker Change: As I said I'm not going to give a give guidance for the full year, but.

Speaker Change: I think going back to your to your yes.

Speaker Change: Your points I mean, certainly we're going to see benefits to our cost cuts you have already seen that.

Speaker Change: Dramatically in NTT.

Speaker Change: And we're going to continue that focus and again, we're going to control. We can control the market is going to do what the market's going to do we are in every one of our business. We're a leading players in those markets whatever happens in the market. We'll participate in we will do the right make the right business decisions and <unk>.

Hassan Ijaz Ahmed: And again, we're going to control what we can control. The market is going to do what the market is going to do. We are, in every one of our businesses, we're leading players in those markets. Whatever happens in the market, we'll participate in, we'll do the right thing, make the right business decisions, and, you know, continue to drive our productivity. Very helpful.

Speaker Change: Continue to drive our productivity.

Michael James Leithead: Very helpful. Thank you so much.

Speaker Change: Very helpful. Thank you so much Denise.

Speaker Change: Our next question comes from Mike <unk> from Barclays. Your line is now open.

Michael James Leithead: Our next question comes from Mike Leithead from Barclays. Your line is now open. Hi, team. Can you hear me OK? Sorry about that earlier. Yes, we can hear you. Sorry about that technology issue.

Mike: Hey, Jim can you hear me okay.

Michael James Leithead: earlier. Yes, we can. We can hear you. Sorry about the technology issue. I wanted to maybe re-ask a question.

Mike: Yes, so again, we can hear you.

Mike: Sorry about the technology issue.

Mike: Wanted to maybe.

Mike: Good question a bit differently.

Mike: Q2 will be the peak of net leverage or how should we think about your leverage profile as we work through the second half.

Speaker Change: Yes, no I think similar to <unk> question earlier I think we're at three seven now at the end of the first quarter, we think cash will be flattish as we approach the midpoint in the year.

Michael James Leithead: Yeah, no, I think, similar to the question earlier, I think, you know, we're at 3.7 now at the end of the first quarter. We think cash will be flattish as we approach the midpoint in the year, and then seasonality, normal seasonality will kick in at that point, and we expect, you know, to see a source of cash through the second half. So we think it will trend back more favorably in the second half.

Mike: And then seasonality normal seasonality will kick in at that point, and we expect to see a source of cash through the second half. So we think it will trend back more favorably in the second half and then over the longer term, we aim to be around three times that's uncle.

Mike: Okay.

Michael James Leithead: And then, over the longer term, you know, we aim to be around three times. That's our goal. Okay, is that fair to assume we'll probably finish the year above three times, just given where earnings and cash flow are looking today? We're not giving that full guidance for the year, but it'll be somewhere between three and where we are now.

Mike: Jim will probably finish the year above three times, just given where earnings and cash flow.

Speaker Change: We're looking today.

Jim: Yeah, we don't given that full guide for the year, but it'll be somewhere between three and where we are now.

Speaker Change: Okay. Thank you.

Speaker Change: We have our next question from Goldman Analyst from Morgan Stanley. Your line is now open.

Michael James Leithead: We have our next question from an analyst from Morgan Stanley. Your line is now open. Hey, this is Turner Henricks on Proof.

Turner Henricks: Hey, this is Turner Henricks on behalf of Vincent Andrews. I'm wondering if you could provide a little bit more color on Chinese TIO2 exports and what you're seeing in the region in terms of local production and demand.

Speaker Change: Hey, This is Turner henricks on for Vincent Andrews, I'm wondering if you could provide a little bit more color on Chinese <unk> exports and what youre seeing in the region in terms of local production and demand.

Speaker Change: Yes, I think the.

Denise M. Dignam: I think the, you know, the export data is pretty visible to the market, year over year, there's a 10% increase quarter over quarter, you know, it's lumpy. And certainly, you can think about the EU dumping case as some of the driver for that increase here in March.

Speaker Change: The export data is pretty visible to the market year over year, there's a.

Speaker Change: About 10% increase quarter over quarter.

Speaker Change: It's lumpy.

Speaker Change: And certainly if you think about the.

Speaker Change: EU dumping case as some of the driver for for that.

Speaker Change: Increased.

Speaker Change: Here in March, but again, just gone back to Big picture. We're leaders in this market, we're focusing on what we control driving too.

Denise M. Dignam: But again, you know, just going back to the big picture, we're, you know, leaders in this market, we're focusing on what we control, driving to a low cost position and making sure we can participate in the long run. And again, just leaning into, you know, we have very, very strong customer relationships. So we, yeah, we were driving to low cost; we can participate in markets, but there's more to serving customers and around relationships and supply reliability and quality, where, you know, we really are second to none.

Speaker Change: Our low cost position and making sure we can and participate in the long run again, just leaning into we have very very strong customer relationships. So yes.

Speaker Change: We're driving to low cost we can participate in market, but there is more to to serving customers in and around the relationships and supply reliability and quality, where we really are second to none.

Speaker Change: Great that makes a lot of sense would you mind, providing a little bit additional color on our U S export versus domestic demand and the potential for tailwind from restocking.

Turner Henricks: Great, that makes a lot of sense. Would you mind providing a little bit of additional color on US export versus domestic demand and the potential for tailwinds from restocking?

Turner Henricks: Hey, Turner, can you ask that question again? Yeah, no problem. Sorry if there's some static on my line or anything. Uh, would you mind?

Speaker Change: Turner can you ask that question again.

Turner Henricks: Yeah, no problem. Sorry if there's static on my line or anything. Would you mind providing a little additional color on U.S. export versus domestic demand and the potential for any tailwinds from restocking?

Turner Henricks: Yes, no problem sorry, if there is a static on my line or anything would you mind, providing a little additional color on U S export versus domestic demand and the potential for any tailwind from restocking.

Denise M. Dignam: Yeah, I mean, I guess what I would just say is we're seeing, you know, we're seeing restocking. That's really what we're seeing going into the second quarter. Again, we haven't seen any market catalyst, whether you're talking about interest rates or residential home building, things like that. So we think that the volume that we're seeing is relative to restocking.

Turner Henricks: Yes, I mean, I guess, what I would just say as you're seeing we're seeing the restocking that's really what we're seeing going into into the second quarter.

Turner Henricks: Again, we haven't seen any market catalyst.

Turner Henricks: Talking about interest rates, our residential homebuilding things like that so we think that the volume that we're seeing is relative to restocking.

Speaker Change: Thank you.

Speaker Change: We have reached the end of our question and answer session. Thank you for joining <unk> first quarter 2024 results conference call.

Operator: We have reached the end of our question and answer session. Thank you for joining the Chemours First Quarter 2024 results conference call. You may now disconnect.

Speaker Change: You may now disconnect.