Q2 2024 Minerals Technologies Inc Earnings Call

Good day everyone, and welcome to the second quarter 2024 Mineral Technologies Earnings Call. Today's call is being recorded. At this time, I'd like to turn the call over to Lydia Kopylova, Head of the Special Relations for Mineral Technologies. Please go ahead, Ms. Kopylova.

Operator: Mineral Technologies Earnings Call. Today's call is being recorded. At this time, I'd like to turn the call over to Lydia Kopylova, Head of Investor Relations for Minerals Technologies. Please go ahead, Ms. Kopylova.

Tiffany Collins: General technology learning call, Tiffany Collins being recorded.

Unknown Attendee: At this time, I'd like to call on the ability to have a little bit ahead of the best relation for Minerals Technologies.

Lydia Kopylova: So, ahead of Ms. Kopylova. Thank you for joining us today.

Lydia Kopylova: Thank you, Mary. Good morning, everyone. This call will be led by Chairman and Chief Executive Officer, Debbie Bishop, and Chief Financial Officer, Erik Aldag. Following Douglas and Erik's prepared remarks, we'll open it up to questions. As a reminder, some of the statements made during this call may constitute forward-looking statements within the meaning of the Federal Security Laws.

Speaker Change: Thank you, Maddy. Good morning, everyone, and welcome to Office Sessions for the 2024 Earnings Confirmation Call. This call is being led by Chairman and Chief Executive Officer Dada W. Bishop and Chief Financial Officer Eric Alda. Following Dada and Eric's prepared remarks, we will open it up to questions.

Lydia Kopylova: Please note that the cultural language of forward-looking statements contains enough earnings to be released in a non-negotiable way. Our NCCC filings disclose certain risks and uncertainties, which may cause our actual results to differ materially from those of forward-looking statements. Please also note that some of our filings today refer to non-YATS financial measures. Their consolidation of YATS financial measures can be found in our earnings release and in the Federal Reserve's presentation, which is available on our website. Thanks, Lydia.

Speaker Change: As a reminder, some of the statements made during this call may constitute provable distinctions within the meaning of the federal security laws.

Speaker Change: Listen to the cultural language of all of the states and statesmen that aren't really in our lives.

Erik C. Aldag: Our NCCP file includes both search risks and unsearched views, which may cause our actual results to differ materially from those of the forward-looking state.

Douglas T. Dietrich: Douglas Dietrich, CFO Aldag, Lydia Kopylova, Douglas Dietrich, Lydia Kopylova, Douglas Dietrich,

Douglas T. Dietrich: Good morning, everyone, and thanks for joining us today. Okay, let's go over a quick outline for today's call. I'll begin today's presentation by reviewing some highlights from our second quarter. Now, I want to take a few minutes to highlight the transformation that's been happening at MTI and how this is leading to our higher levels of performance. I'd like to give you an update on what we're currently seeing in our end markets and conditions for the remainder of the year.

Doug Dietrich: Okay, let's go for a quick round of applause for today, Dave Hall. I'll begin today's presentation by reviewing some of my highlights from our Marriottek quarter. Now, I'm going to take a few minutes to highlight the transformation of the now having an MDI, and how this is leading to our higher levels of performance. I'll like to give you an update on what we're currently seeing in our Marriottek's and interditions for the remainder of the year. Aaron Lenny kicked you three details in an actual and then provided multiple positions in the quarter.

Speaker Change: Okay, let's go over a quick outline for today's call. I'll begin today's presentation by reviewing some of the highlights from our second quarter. I also want to take a few minutes to highlight the transformation that's been happening at MPI and how this is leading to our higher levels of performance.

Speaker Change: I'd like to give you an update on what we're currently seeing in our end markets and conditions for the remainder of the year.

Erik: Erik will then take you through detailed financials and provide an outlook for the third quarter. And I'll finish up with a small advertisement for our 16th Sustainability Report, which we published earlier this week, and mention a few highlights.

Unknown Attendee: And I'll finish that up with a small live dive moment for our Arctic 16 needs to sustain the ability report, which we published earlier this week and mentioned you highlight. Well, then I know the median question.

Douglas T. Dietrich: AeroLend takes your detailed financials and provides an outlook for the third quarter. And I'll finish it up with a small advertisement for our 2016 Sustainability Report, which we published earlier this week and mentioned a few highlights. We'll then open the meeting to questions. With that, let's get started.

Doug Dietrich: Is that? Let's get started. We delivered another direct report order, and our portfolio of the business continues to show it was strength. This is quarter was also available as a strong operational electrification by our team. And however, by bringing the power of our new organization. Let me take you to some of the specific highlights. Fail to quarter or five hundred and forty-one one million dollars. The consumer and that's that you see back then. We were three percent out of our last year on an online basis. Driven by strong growth in our consumer and that's actually and that's actually added to the business.

Eric: We'll then open the meeting to questions. With that, let's get started.

Douglas T. Dietrich: We delivered another record quarter, and our portfolio of businesses continues to show strength. This quarter was also an example of strong operational execution by our team and how we're leveraging the power of our new organization. Let me take you through some of the specific highlights.

Erik: We deliver another record quarter, and our portfolio of businesses continues to show strength.

Erik: This quarter was also an example of strong operational execution by our team and how we're leveraging the power of our new organization.

Douglas T. Dietrich: Sales this quarter were $541 million. The consumer and specialty segment grew 3% over the last year on an underlying basis, driven by strong growth in both our consumer specialty and specialty-added customers. Sales in engineering solutions were slightly lower in the last year as growth in high-temperature technologies was more than offset by lower sales in environmental and infrastructure due to continued weakness we are seeing in the commercial construction market.

Erik: Let me take you through some of the specific highlights.

Erik: Sales this quarter were $541 million.

Erik: The consumer specialty segment grew 3% over the last year on an underlying basis, driven by strong growth in both our consumer specialty and specialty-added business.

Doug Dietrich: So in the new solutions were quite low in last year. And growth in high temperature technology was more than off that by lower level in environment and infrastructure. Due to continued weakness, we are seeing in the commercial infrastructure market. Opportunity to come with $85 million. A record level for company and a twenty percent total last year. Martin continued to expand. Reaching 15.7% of the quarter. A head of our hardware market this year. We saw a favorable mix of our high-wide large products, catapetrage synergies, on the real-world organization. And our teams continue to check XQC on our pricing strategy.

Erik: Sales in engineered solutions were slightly lower than last year, as growth in high-temperature technologies was more than offset by lower sales in environmental and infrastructure due to continued weakness we are seeing in the commercial construction market.

Douglas T. Dietrich: Operating income was $85 million, a record level for the company and up 20% over the last year. Margins continue to expand, reaching 15.7% in the quarter, ahead of our interim target for this year. We saw a favorable mix of our higher-margin products, captured synergies from the reorganization, and our team continues to execute on our pricing strategies and capture input costings. This business is performing well operationally, focusing on safety, barrier box control, and productivity improvement. For sure, $1.65. That's a 26% increase over the last year. Operating capital also remains strong, increasing 10% over the last year.

Erik: Operating income was $85 million, a record level for the company and up 20% over the last year.

Erik: Margin continues to expand, reaching 15.7% in the quarter, ahead of our interim target for this year.

Erik: We saw a favorable mix of our higher margin products, capture synergies from the reorganization, and our team continued to execute on our pricing strategies and capture input cost savings.

Unknown Attendee: And catapetrage can put positive. Digital business is performing well originally focusing on $8.80, very hot out in general, and productivity and improvement.

Speaker Change: PG&E Business is performing well operationally, focusing on safety, area of cost control, and productivity improvements.

Speaker Change: Parties for share were $1.65, a 26% increase over the last year. Operating capital also remained strong, increasing 10% over the last year.

Erik Aldag: Thank you so much for joining us today, and we're going to give you an update on our status with the MI Bank Proposy. As we likely saw on our press release, we agreed with that, which is a $30 million credit disability for PM and I in order to support and continue to progress with the Bank Proposy in the DBAH process. We see the end of the contract to step to keep the product that moving forward is act digitally possible to affair and find our release in rural parks. Eric will go into more detail on this in an update in the next few minutes.

Douglas T. Dietrich: I also want to give you an update on our status with the VMI Bank Group. As you likely saw in our press release, we agreed to establish a $30 million credit facility for BMI in order to support continued progress with the bankruptcy and mediation process. We see this as a constructive step to keep the process moving forward as expeditiously as possible to a fair and final resolution for all parties. Erik will go into more detail on this in his update in a few minutes.

Speaker Change: I also want to give you an update on our status with the BMI Bankruptcy.

Speaker Change: As you likely saw in our press release, we agreed to establish a $30 million credit facility for BMI in order to support continued progress with the bankruptcy and mediation process.

Speaker Change: We see this as a constructive step to keep the process moving forward as expeditiously as possible to a fair and final resolution for all parties.

Speaker Change: Erik will go into more detail on this in his update in a few minutes.

Douglas T. Dietrich: So, overall, I'm pleased with the quarter, the track the company is on, and our performance so far this year. We're delivering solid results quarter after quarter, despite facing a few market challenges. We have momentum across our businesses and across the organization, and we see even higher levels of performance to demonstrate going forward. We'll take a few minutes to review the progress we're making against our strategic objectives and use our first half results as a backdrop to highlight the strength of our business model and the portfolio of the businesses we've built.

Doug Dietrich: So overall, I'm pleased with the quarter, the track company is on, and on our performance also is here. We're delivering solid results quarter after quarter, to decide by stating if you want to be more challenged. We have a member of our business and our product organization, and we need even higher levels of performance to demonstrate going forward. I want to take a few minutes to review the product from the media against our strategic objectives. And you, our first half is all, as a backdrop, to highlight the strength of our business model and of the portfolio of the business we build.

Erik: So, overall, I'm pleased with the quarter. The track the company is on and our performance so far this year.

Erik: We're delivering solid results quarter after quarter, despite facing a few marked challenges.

Erik: We have momentum across our businesses and across the organization, and we see even higher levels of performance to demonstrate going forward.

Erik: I want to take a few minutes to review the progress we're making against our strategic objectives and use our first half results as a backdrop to highlight the strength of our business model and of the portfolio of the businesses we've built.

Doug Dietrich: Let me begin by saying that our strategy to decision on our goals and to hire a road and more profitable market and to include that as in new technologies is truly transform on the MBI. We feel really important all over the businesses, a product open consumer and industrial sectors that provide state and rural platforms to balance in instances of industrial market volatility. Like we were seeing today, we've outlined that our long term potential is supported by our leading position in the market and geographies, by our forward technologies, and by our leading model over the Earth.

Douglas T. Dietrich: Let me begin by saying that our strategy to position ourselves in higher growth and more profitable markets and to invest in new technologies is truly transforming MPI. Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies Inc. We've outlined that our long-term potential is supported by our leading position in the markets and geographies, by our core technologies, and by our yielding mineral reserves.

Erik: Let me begin by saying that our strategy to position ourselves in higher growth and more profitable markets and to invest in new technologies is truly transforming MCI.

Erik: We've built a resilient portfolio of businesses across both consumer and industrial sectors that provide stable growth platforms to balance indices of industrial market volatility like we are seeing today.

Erik: We've outlined that our long-term potential is supported by our leading positions in the markets and geographies, by our core technologies, and by our unique mineral reserves.

Doug Dietrich: Our first half and natural performance is a good example of that, but as a result, this is transformation drive. I want to highlight the analytics, the significant engines we've made in each of this, the new division should be created, and why we're here, and how then we can not only sustain and put strength in our performance going forward. Let's start with consumerized items of company.

Douglas T. Dietrich: Our first half financial performance is a good example of the type of results this transformation can drive. I want to highlight to you some of the significant changes we've made in each business, the new positions we've created, and why we are confident we can not only sustain but strengthen our performance going forward. Let's start with the consumer side of things. We've invested in and assembled a portfolio of consumer-based products designed to deliver stable long-term growth. It includes the leading pet litter business with a vertically integrated global footprint.

Erik: Our first-half financial performance is a good example of the type of results this transformation can drive.

Erik: I want to highlight to you some of the significant changes we've made in each business, the new positions we've created, and why we are confident that we can not only sustain, but strengthen our performance going forward.

Doug Dietrich: We've been to that as in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in and in And especially additives are recycling technologies like new yield, so the paper and packaging industry are gaining significant traction and have come on the standard and leaving the value generator for industry customers who require sustainable solutions.

Erik: Let's start with the consumer side of the company.

Erik: We've invested in and assembled a portfolio of consumer-based products designed to deliver stable long-term growth.

Erik: It includes the leading pet litter business with a vertically integrated global footprint.

Douglas T. Dietrich: We continue to leverage the value of this approach to expand in North America, in Europe, and in Asia to satisfy demand from growing pet ownership trends. This privately-labeled business is in a position to grow steadily and help pace the broader market trade. We've made tremendous progress integrating the acquired parts and optimizing it into a global business platform. And over the next couple of months, we'll be launching a new global brand for this business to reflect this integration and provide a unified reference for our customers.

Erik: We continue to leverage the value of this footprint to expand in North America, in Europe , and in Asia, to satisfy demand from growing petrochemical trends.

Erik: This privately-labeled business is in a position to grow steadily and outpace the broader market rate.

Erik: We've made tremendous progress integrating the acquired parts and optimizing it into a global business platform. And over the next couple of months, we'll be launching a new global brand for this business to reflect this integration and provide a unified reference for our customers.

Douglas T. Dietrich: We've expanded our consumer specialty businesses into higher-margin, growth markets like animal health, personal care, and oil purification and invested in new natural ingredient technologies that are aligned with macro-consumer trends. And especially additives, our new recycling technologies like New Yield for the paper and packaging industry are gaining significant traction and have become the standard and leading value generator for industry customers who require a sustainable solution.

Erik: We've expanded our consumer specialty businesses into higher-margin, growth-market-like animal health, personal care, and oil purification, and invested in new natural ingredient technologies that are aligned with macro-consumer trends.

Erik: And especially additive, our new recycling technologies like New Yield for the paper and packaging industry are gaining significant traction and have become the standard and leading value generator for industry customers who require sustainable solutions.

Douglas T. Dietrich: On the industrial side of the company, we position our high-temperature technology business as the leader in growing foundry markets around the world, and we are transitioning our refractories business with new, advanced formulations and, through automated equipment and data collection systems like our MinScan LSE, are expanding our environmental and infrastructure portfolio to help solve global challenges with technologies like floor absorbs, T-POP remediation, and drilling products for geothermal heating and cooling These leading positions and innovative solutions generate higher value for our customers and are generating higher margins for us.

Erik: On the industrial side of the company, we position our high-temperature technology business as the leader in growing foundry markets around the world.

Doug Dietrich: And through automated equipment and data collection systems like German, Dan, LLFC. And EDDS, $3.15, which is up 28%. This is a probability driven by the new enrollment of the product and all of those by our helpers.org.org online platforms, which can continue to drive the efficiency of these, remove the weight and processes, and help us to leverage our growth over this one over her head send-end. Also, if you could support and note that throughout this transformation, we may name our historic or strong on cash generation over a while, and our downed approach to capital allocation. If you agree, we enter a rate of $166 million from cash and cash in our operations, a 34% increase over the last year, and our generating free cash low at our target level, of a product, at least at the end of the day.

Erik: And we are transitioning our refractories business with new, advanced formulations and through automated equipment and data collection systems like our MinScan LSC.

Erik: We are expanding our environmental and infrastructure portfolio to help solve global challenges with technologies like floor absorbs, T-spots remediation, and drilling products for geothermal heating and cooling systems.

Erik: These leading positions and innovative solutions generate higher value for our customers and are generating higher margins for us.

Douglas T. Dietrich: Our first half operating margin is just over 15%, and we've generated $162 million in operating income, up 21% over lunch, and ETS of $3.15, which is up 28%. This profitability is driven by this new and new mix of products and also by our culture of operational excellence, which can continue to drive efficiencies, remove waste in processes, and help us leverage our growth over a disciplined overhead spending. I also think it's important to note that throughout this transformation, we've maintained our historically strong cash generation profile and our balanced approach to capital allocation.

Erik: Our first half operating margin is just over 15%, and we generated $162 million in operating income, up 21% over the last year.

Erik: And EPS is $3.15, which is up 28%.

Erik: This profitability is driven by this newer mix of products, and also by our culture of operational excellence, which continues to drive efficiencies, remove waste in processes, and help us leverage our growth over a disciplined overhead spending.

Erik: I also think it's important to note that throughout this transformation, we've maintained our historically strong cash generation profile and our balanced approach to capital allocation.

Douglas T. Dietrich: This year we generated $160 million in cash from operations, a 34% increase over last year, and we are generating free cash flow at our target level of approximately 7% of sales. We returned $22 million to shareholders last year, and we expect to return approximately $75 million this year. And at the same time, we strengthened our balance sheet leverage to 1.79%. This is financial strength, the capability of our aligned and focused organization, and our strong operating culture. We understood when we established our five-year growth and financial objectives that the journey would not take a linear path.

Erik: This year we generated $160 million in cash from operations, a 34% increase over last year, and are generating free cash flow at our target level of approximately 7% of sales.

Doug Dietrich: We return $22 million from the last year, and it can affect our return of our product, at least $75 million this year. And at the same time, we should strengthen our balance sheet of leverage to $1.799. This is a potential strength, the capability of our online and focus toward organization, and our strong on operating culture. This is a solid foundation to continue to build on.

Erik: We returned $22 million to shareholders last year, and expect to return approximately $75 million this year. And at the same time, we strengthened our balance sheet leverage to 1.79%

Erik: This is financial strength, the capability of our aligned and focused organization, and our strong operating culture is a solid foundation to continue to build upon.

Doug Dietrich: We understand that we have established our 500-year-olds and the NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN NNNNNNNNNNNNNNNNNNNNNNNNN President Trump's introduction to the UNS is all over the world because we stayed for a while for a few years. In addition, we're writing up three finalizations that can have a year, which will have the volume in 2020-25. And we continue to have a strong pipeline of paper and packaging on opportunities, driven by demand, renewals, and other products are getting the package in market. And I have to protect technologies. We see similar large - in addition to first half in all regions.

Erik: We understood when we established our five-year growth and financial objectives that the journey would not take a linear path.

Douglas T. Dietrich: But our results thus far demonstrate that we've put ourselves on a solid trajectory to achieve it. Now, let's review what's happening in our end markets and the trends for the remainder of the year. We're seeing strong demand for our consumer-oriented products and continue to have a positive outlook for this product. However, summer months are at a seasonally low demand point for our petabit of business.

Erik: But our results so far demonstrate that we've put ourselves on a solid trajectory to achievement.

Erik: Now let's review what's happening in our end markets and the trends for the remainder of the year.

Erik: We're seeing strong demand for our chemical-oriented products, and continue to have a positive outlook for this product line.

Douglas T. Dietrich: However, the market begins to enter a strong season late in the third quarter. And for our other consumer-sushed products, we've got similar demand levels into the third quarter, and sales for these products are expected to remain on their strong growth path. In specialty additives, we expect generally stable market conditions in paper and packaging and in food and pharma to remain through the second half. Residential construction in the U.S. is also relatively stable for us, yet remains below the levels we saw over the past two years.

Erik: Some of our months are at a seasonally low demand point for our petavita business. However, the market begins entering a strong season late in the third quarter.

Erik: And for our other consumer-suspect products, we've got similar demand levels into the third quarter and sales for these products remain on their strong growth path.

Erik: In specialty additives, we expect generally stable market conditions in paper and packaging, and in food and pharma, to remain through the second half.

Erik: Residential construction in the U.S. is also relatively stable for us, yet remains below the levels we saw over the past two years.

Douglas T. Dietrich: In addition, we're wrapping up three satellite systems that could happen in a year, which will add to volumes in 2025. And we continue to have a strong pipeline of paper and packaging opportunities driven by demand for new deals and for our products targeting the packaging market. In high-temperature technologies, we see similar market conditions in all regions, except for a weaker agricultural equipment market in the U.S., which will have a small impact on our second-half metal casting volumes.

Erik: In addition, we're wrapping up three satellites in the second half of the year, which will add to volumes in 2025.

Erik: And we continue to have a strong pipeline of paper and packaging opportunities driven by demand for new yields and for our products targeting the packaging market.

Erik: In high-temperature technologies, we see similar market conditions in all regions, except for a weaker agricultural equipment market in the U.S., which will have a small impact on our second-half metal casting volumes.

Doug Dietrich: Except that we were able to put more than in the U.S. which will have a small impact on our tax income. We're all keeping an eye on it, but we're still right in the U.S. Which would treat an impact you'll put out on your levels. For better than anything from an end-to-end installation, we've come completely different over the past year. And have had several more jobs available in the next half. And overall, we're working on other strong, cost-reformal measures in the product. In terms of the whole infrastructure, we've been keeping in thought out of our marketing decisions.

Douglas T. Dietrich: We're also keeping our eye on lower steel prices in the U.S., which could impact steel production levels. We're benefiting from the mini-can installations we've completed over the past year and have several more scheduled in the second half. Overall, we're expecting another strong profit performance in this product. Environmental and infrastructure is where we see continued software market conditions and the one product line with lower sales compared to last year. We expect to see some improvement in the commercial construction market in the second quarter.

Erik: We're also keeping an eye on lower steel prices in the U.S., which could impact steel production levels.

Erik: We're benefiting from an in-scanning installation we've completed over the past year, and have several more scheduled in the second half. And overall, we're expecting another strong crop performance in this product line.

Erik: Environmental and infrastructure is where we see continued software market conditions, and the one product line with lower sales compared to last year.

Doug Dietrich: And the number one, not out of mind, is lower than the last year. We have effect like the GD, some of them are moving in the commercial infrastructure in market, in the next half quarter. But giving an interest rate, intensive areas in market, our order will really radiate again to live live in the next half quarter of the later year. Our current expectation is that any meaningful market in like last year will likely lead later this year or the next. Despite this, although there are part of this product line, like wastewater alleviation solutions, and river-really product remain the same.

Erik: We expect to see some improvement in the commercial construction market in the second quarter.

Douglas T. Dietrich: Given the interest rates and sensitivity of this market, our order delivery dates began to slip from the second quarter to later in the year. Our current expectation is that any meaningful market inflection will likely be late this year or early next. Despite this, other parts of this product line, like wastewater irradiation solutions and drilling products, remain solid. I'd like to note that in this product line, our floor absorber products continue to gain traction.

Erik: But given the interest rates and sensitivity of this market, our order delivery date began to slip from the second quarter to later in the year.

Erik: Our current expectation is that any meaningful market inflection will likely be late this year or early next.

Erik: Despite this, other parts of this product line, like wastewater irradiation solutions and drilling products, remain solid.

Doug Dietrich: But like the number that is in the product line, our source or product continues gaining traction. We've completed an individual water and delay in the Q2. And currently have over 100 highlight-large projects in the area at the stage. We remain globally the age of the UN environmental tech-inagency, and are maintaining similar recognition and NEA-agent military engineers in Europe. Some of them up, we see a row of weekly policies in our market line gave the head-run for us.

Erik: I'd like to note that the NIF product line, our floor-to-floor product, continues to gain traction.

Douglas T. Dietrich: We completed a municipal water installation in Q2, and currently have over 100 pilot projects in various states. We remain closely engaged with the U.N. Environmental Protection Agency and are gaining similar recognition and engagement with agencies in Europe. To sum up, we see a relatively positive market landscape ahead for us, albeit one with a few additional pockets of industrial market weakness. The second half of the manicure for some of our industrial markets looks a bit less certain than it was in the first half, but it's one we feel we can navigate successfully to deliver another record year. Now it's our turn with Erik to reveal our financial details and highlights and our financial outlook for the second quarter. Okay, Erik?

Erik: We've completed a unit of water installation in Q2, and currently have over 100 high-level projects in various stages.

Erik: We remain closely engaged with the U.S. Environmental Protection Agency and are gaining similar recognition and engagement with agencies in Europe .

Doug Dietrich: I'll be at one of the few additional talkative and industrial market weaknesses. The specs I can't have a magnetic picture; some of our digital markets would be a bit lesser than that one was in first half. But it is one, but it is one we feel we can navigate successfully to deliver another record year.

Erik: To sum up, we see a relatively positive market landscape ahead for us, albeit one with a few additional pockets of industrial market weakness.

Erik: The second half of the demand picture for some of our industrial markets looked to be a bit less certain than it was in the first half, but it's one we feel we can navigate successfully to deliver another record year.

Unknown Attendee: Thank you.

Erik: Our panelists are Erik, who will be our financial details, technical highlights, and our financial outlook for the second quarter. Erik? Thank you, Doug, and good morning everyone.

Erik C. Aldag: Thank you, Doug, and good morning everyone. I'll begin by providing an overview of our segment's quarterly results, followed by some details on the performance of our segment, and I'll wrap up with our outlook for the third quarter. Following my review, I'll turn the call back over to Doug for some highlights from our latest sustainability report.

Erik Aldag: Good morning, everyone. I'll begin my five final review of our tech-in-water results. Follow away by video on the four-moment part of our segment. And I'll wrap up with our outlook for the reporter.

Eric: I'll begin by providing an overview of our second quarter results, followed by the details on the performance of our segment.

Erik Aldag: Following my review, I'll turn them all back over to Doug. There's some highlight-large from our latest to seen in the weekly report. Now let's review our tech-in-water results. We deliver the numbers from the wrong reporter. With contractors for operating in them, keep it down, and yes, including vegetable items. Sales in them that's like an order order of $541 million. Up of 1% on an unlimited $8.6 for first-verse last year. Operating income increased 20% over last year to $85 million. A record through the present company. Operating margin in demand ends at 2119.8 for point 1.2. For the first half, our operating margin with 15.1%, well above the 14.0% in Rembrandt. Our margin target is set to 20.24.

Eric: And I'll wrap up with our outlook for the third quarter.

Eric: Following my review, I'll turn the call back over to Doug for some highlights from our latest sustainability report.

Erik C. Aldag: Now let's review our second quarter results. We delivered another strong quarter, with records for operating income, EBITDA, and ES, excluding specialized items. Sales in the second quarter were $541 million, up 1% on an underlying basis versus last year.

Eric: Now let's review our second quarter results.

Eric: We deliver another strong quarter, with records for operating income, EBITDA, and ES, excluding specialized items.

Eric: Sales in the second quarter were $541 million, up 1% on an underlying basis versus last year.

Erik C. Aldag: Operating income increased 20% over the last year to $85 million, a record for the company, and Operating Margin Expanded to 290 Basis Points to 15.77%. For the first half, our operating margin was 15.1%, well above the 14% interim margin target we set for 2024. You can see in the operating income bridge that volume may increase revenue by $3 million, which is net of the impact of the deconsolidation of PMI last year.

Eric: Operating income increased 20% over the last year to $85 million, a record for the company.

Eric: and operating margins expand to 290 basis points at 15.77%.

Eric: For the first half, our operating margin was 15.1%, well above the 14% interim margin target we set for 2024.

Erik Aldag: You can see in the operating room some bridge that the volume may make increasing on mine by $3 million, which isn't at the impact of the peculiarity of the MMI last year. The consumer and the specialty segment contributed both of the making sure the audio is OK.

Speaker Change: You can see in the operating income bridge that volume may make increasing income by $3 million, which is net of the impact of the deconsolidation of PMI last year.

Erik C. Aldag: The consumer and specialty segments contributed most of the favor for volume impact. Excuse me, folks, we're just going to take a quick pause and make sure the audio is okay on the call here. Give us a couple of seconds. One moment, please.

Speaker Change: The consumer and specialty segments contributed most of the paper volume in action.

Speaker Change: Excuse me folks, we're just going to take a quick pause and make sure the audio is okay on the call here.

Unknown Attendee: I'm on the audio. Thank you. I have the back of people like that good. Hello, Maddie. Can you hear it? Yes, I apologize. This is still speaking from the main feed line, which was having...

Speaker Change: [inaudible]

Speaker Change: [inaudible]

Operator: We're good. We're good. We're good. Thank you. I have the backup feeling connected. This is the operator. I have the feed line connected.

Speaker Change: Dial-Out

Speaker Change: We're good. We're good.

The operator: This is the operator. I have the C-line connected.

Operator: Hello, Maddie. Yes, I apologize. This is still speaking from the main feed line, which was having, Alright, Matty, can you call us back on the line that you just established, please, Matty? that you have us tied into now. Yes, of course. One moment.

Maddy: Hello, Maddy.

Speaker Change: Maddie, can you hear us? Yes. Yes, I apologize. This is still speaking from the main feed line, which was having issues.

Speaker Change: Can you call us back with the line that you just established, please, Matty?

Unknown Attendee: I'm going to ask you a question, Michael. I'm going to ask you a question.

Speaker Change: that you have us tied into now.

Maddy: Yes, of course. One moment.

Speaker Change: I'm going to dial us back with this backup line. They can't hear us.

Erik Aldag: Okay, this is Erik Aldag. Can you hear us on this line? The Maddie. Operator, can you hear me on this line? We're testing whether this backup line is working. This is the operator. I do hear that the backup feed line is connected. Okay, thank you. All right, sorry about that, folks. Hopefully, the audio is a little better on this line. I had to switch to a backup line.

Erik C. Aldag: [inaudible] This is Erik Aldag. Can you hear us on this line? Hello, Maddy. Hello, Maddy.

Speaker Change: This is Erik Aldag. Can you hear us on this line?

Speaker Change: [inaudible]

Speaker Change: [inaudible]

Operator: Operator, can you hear me on this line? We're testing whether this backup line is working. This is the operator. I do hear that the backup feed line is connected. Okay, thank you.

Speaker Change: Operator, can you hear me on this line? We're testing whether this backup line is working.

The operator: This is the operator. I do hear that the backup feed line is connected.

The operator: [inaudible]

Erik C. Aldag: Alright, sorry about that folks. Hopefully, the audio is a little better on this line. I had to switch to a backup line.

Speaker Change: Alright, sorry about that folks. Hopefully the audio is a little better on this line. I had to switch to a backup line.

Erik Aldag: I'm going to start out on the software. The remaining $8 million of income and 170 basis points of margin growth came from an improvement in our overall cost position. We are realizing the benefits of productivity and variable conversion cost savings, a generally stable input cost environment, and the full run rate impact of our $10 million cost savings program. We also benefited from favorable energy costs relative to our expectations heading into the quarter, as our supply chain keen did a nice job taking advantage of lower rates. EBITDA was $108 million in the quarter, and EBITDA margin was 19.9%, up 310 basis points of last year.

Erik C. Aldag: Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies, start from the top of the slide here on slide 8. We deliver another strong order, with records for operating income, EBITDA, and EPS, excluding special items. Sales in the second quarter were $541 million, up 1% from the underlying data as of last year. Operating income increased 20% over the last year to $85 million

Speaker Change: Start from the top of the slide here on slide 8.

Speaker Change: We deliver another strong order, with records for operating income, EBITDA, and EPS, excluding special items.

Speaker Change: Sales in the second quarter were $551 million, up 1% from the underlying eight days of last year.

Speaker Change: Operating income increased 20% over the last year to $85 million. A record for the company.

Erik C. Aldag: A record for the company, and Operating Margin, attended for 290 days, is going to 15.77%. For the first half, our operating margin was 15.11%. Well above the 14% consumer margin target we set for 2024, and you can see in the operating income bridge that that volume can be reduced by $3 million, which ended up being the impact from the decontamination of CMI last year. The Consumer Impact Specialty Segment contributed most of the paper volume impact.

Speaker Change: And operating margin, it can be 290 days to 15.7%.

Speaker Change: For the first half, our operating margin was 15.11%.

Speaker Change: Well above the 14% interim margin target we set for 2024.

Speaker Change: You can see in the operating income bridge that volume may make increased income by $3 million.

Speaker Change: which didn't have any impact on the deconsolidation of CMI last year.

Speaker Change: The Consumer Inspection Segment contributed most of the paper volume in an act.

Erik C. Aldag: While the table for product naming came in mostly from engineering solutions to provide higher sales of our newest automated refractor equipment, together, all of you may contribute to EDP's Margin for Growth. Selling prices show an additional $3 million in income, contributing margin.

Speaker Change: While the favorable product make came mostly from engineer solutions, driven by higher sales of our newest automated refractory equipment within high-temperature technology.

Speaker Change: Together, all of you may make a contributory to EDTA's Joint Margin Regroupment.

Speaker Change: Higher selling prices show an additional $3 million in income contributing to the margin.

Erik C. Aldag: The remaining $8 million of income and 170 basis points of margin growth came from an improvement in our overall cost position. We are realizing the benefits of productivity and variable conversion cost savings. The Generally Stable Input Cost Environment and the Full Run Rate Impact of our $10 Million Cost Saving Program. We also benefited from favorable energy costs relative to our expectations heading into the quarter, as our supply chain team did a nice job taking advantage of lower rates. EBITDA was $108 million in the quarter, and EBITDA margin was 19.9%, up 310 basis points over last year. Earnings per share was $1.65, excluding special items, up 26% from last year.

Speaker Change: The remaining $8 million of income and 170 basis points of margin growth came from an improvement in our overall cost position.

Speaker Change: We are realizing the benefits of productivity and variable conversion cost savings.

Speaker Change: A generally stable input cost environment, and the full run rate impact of our $10 million cost savings program.

Speaker Change: We also benefited from favorable energy costs relative to our expectations heading into the quarter.

Speaker Change: As our supply chain team did a nice job taking advantage of lower rates.

Speaker Change: EBITDA was $108 million in the quarter, and EBITDA margin was 19.9%, up 310 basis points over the last year.

Erik Aldag: Turning for share was $1.65, excluding special items, up 26% from prior year. And cash flow remained strong, with cash from operations of $50 million, 10% higher than last year.

Speaker Change: Earnings per share was $1.65, excluding special items, up 26% from prior year.

Erik C. Aldag: And cash flow remains strong, with cash from operations of $50 million, 10% higher than last year. Before we move on to our segment, let me take a minute to outline the special items in the second quarter. We've recorded special charges of $34 million, primarily related to a $30 million provision for credit loss relating to the company's committed line of credit, the BMI Old Co., which is the entity formerly known as BMI. MTI provided this line of credit to facilitate progress in the BMI Old Code bankruptcy proceedings and ongoing mediation process. Thus far, MTI has loaned $5 million of this $30 million commitment.

Speaker Change: And cash flow remains strong, with cash from operations of $50 million, 10% higher than last year.

Erik Aldag: Before we move on to our segments, let me take a minute to outline the special items in the second quarter. We recorded special charges of $34 million, primarily related to a $30 million provision for credit loss, relating to the company's committed line of credit to BMI old code, which is the entity formerly known as BMI. MCI provided this line of credit to facilitate progress in BMI old code bankruptcy proceedings and ongoing mediation process. So far, MCI has loaned $5 million of this $30 million commitment. However, a provision for the full amount was necessary, since the funds will likely be consumed in the process, and/or credited toward the ultimate creation of a type 4G trend.

Speaker Change: Before we move on to our segment, let me take a minute to outline the special items in the second quarter.

Speaker Change: We recorded special charges of $34 million, primarily related to a $30 million provision for credit loss relating to the company's committed line of credit to BMI Oldco.

Speaker Change: which is the entity formerly known as BMI.

Speaker Change: MTI provided this line of credits to facilitate progress in BMI Old Code bankruptcy proceedings and ongoing mediation process.

Speaker Change: Thus far, MTI has loaned $5 million of this $30 million commitment.

Speaker Change: However, a provision for the full amount was necessary since the funds will likely be consumed in the process and or credited toward the ultimate creation of a 5-4G trust.

Erik Aldag: Now let's review the segments, beginning with Consumer and Specialties. Second quarter sales were $284 million, 3% on an underlying basis. Sales in the household and personal care product line were 1% higher year over year. Cat litter sales were temporarily lower this quarter due to the timing of product changeovers out of few retail in the US. Meanwhile, we saw higher sales in several high-margin consumer applications such as personal care, fabric care, and animal health. In specialty additives, sales were 4% higher on an underlying basis. We have solid volume growth in paper and packaging, driven by improved market conditions in North America and Europe, and the ramp up of our newest satellite in Asia.

Erik C. Aldag: However, a provision for the full amount was necessary since the funds will likely be consumed in the process and or credited toward the ultimate creation of a 524G trust. Now let's review the segment, beginning with consumer special. Second quarter sales were $284 million, 3% on an underlying basis. Sales in the household and personal care product line were 1% higher year over year. However, cat litter sales were temporarily lower this quarter due to the timing of product changeovers at a few retail locations in the U.S.

Speaker Change: Now let's review the segments beginning with consumer specialties.

Speaker Change: Second quarter sales were $284 million, 3% on an underlying basis.

Speaker Change: Sales in the household and personal care product line were 1% higher year over year.

Speaker Change: Cat litter sales were temporarily lowered this quarter due to the timing of product changeovers at a few retails in the U.S.

Erik C. Aldag: Meanwhile, we saw higher sales in several high-margin consumer applications such as personal care, fabric care, and animal health. Specialty Additives Sales were 4% higher on an underlying basis. We had solid volume growth in paper and packaging, driven by improved market conditions in North America and Europe and the ramp-up of our newest satellites in Asia. In addition, we've seen relatively stable demand for our products serving the presidential construction market. Segment operating income was $44 million in the second quarter, 29% higher than last year.

Speaker Change: Meanwhile, we saw higher sales in several high-margin consumer applications, such as personal care, fabric care, and animal health.

Speaker Change: and Specialty Additives, sales were 4% higher on an underlying basis.

Speaker Change: We had solid volume growth in paper and packaging, driven by improved market conditions in North America and Europe , and the ramp-up of our newest satellites in Asia.

Erik Aldag: In addition, we've been relatively stable demand for our products serving the presidential construction market. Segment operating income was $44 million in the second quarter, 29% higher than last year. Driven by higher volume, improved product mix, favorable input costs, and higher pricing. In our operations teams delivered a strong productivity performance. In short, the business is performing well, and as a result, operating margin has improved significantly, up 370 basis points from prior year to 15.4% of sales. Looking ahead to the third quarter, we expect year-over-year growth for household and personal care in the mid-single-digit range. In specialty edges, we expect underlying sales growth to remain similar to what we saw in the second quarter.

Speaker Change: In addition, we've seen relatively stable demand for our products serving the presidential construction market.

Speaker Change: Segment operating income was $44 million in the second quarter, 29% higher than last year, driven by higher volume, improved product mix, favorable input costs, and higher pricing.

Erik C. Aldag: Driven by higher volume, improved product mix, favorable input costs, and higher pricing, and our operations team delivered a strong productivity performance. In short, the business is performing well. And as a result, operating margin has improved significantly, up 370 basis points from the prior year to 15.4% of sales. Looking ahead to the third quarter, we expect year-over-year growth for household and personal care in the mid-single-digit range. Specialty Add

Speaker Change: And our operations teams delivered a strong productivity performance.

Speaker Change: In short, the business is performing well.

Speaker Change: And as a result, operating margin has improved significantly, up 370 basis points from prior year to 15.4% of sales.

Speaker Change: Looking ahead to the third quarter, we expect year-over-year growth for household and personal care in the mid-single-digit range.

Speaker Change: and Specialty Additives. We expect underlying sales growth to remain similar to what we saw in the second quarter.

Erik Aldag: Overall, for the segments, we expect underlying sales growth versus last year in the low-to-mid-single-digit range, and operating margin remaining strong around 15%.

Erik C. Aldag: We expect underlying sales growth to remain similar to what we saw in the second quarter. Overall, for the segment, we had underlying sales growth versus last year in the low to mid single-digit range and operating margin remaining strong around 15%. Now let's turn to the engineering solutions segment. Second quarter sales were $257 million, 2% below last year, in the high-temperature technologies product line, sales group one. In North America, foundry and steel markets have been stable, with the exception of softening aggregate demand for some of our foundry customers. In Europe, steel markets have remained sluggish through the first half.

Speaker Change: Overall for the segment, we expect underlying sales growth versus last year in the low to mid single-digit range and operating margin remaining strong around 15%.

Erik Aldag: Now, let's turn to the engineered solution segments. Second quarter sales were $257 million, 2% below last year. In the high-temperature technologies product line, sales grew 1% in North America. Foundry and Steel Markets have been stable, with the exception of softening asset and demand for some of our Foundry customers. In Europe, steel markets have remained sluggish through the first half. Meanwhile, we saw continued growth in Foundry volumes in Asia, driven by market penetration of our different heated green sand bond systems and technical services. In the environmental and infrastructure product lines, sales were lower by 8%, shared by weakness in commercial construction and large environmental projects.

Speaker Change: Now let's turn to the engineer solutions segment.

Speaker Change: Second quarter sales were $257 million, 2% below last year.

Speaker Change: in the high-temperature technologies product line, sales group one.

Speaker Change: In North America, foundry and steel markets have been stable, with the exception of softening aggregate demand for some of our foundry customers.

Speaker Change: In Europe , steel markets have remained sluggish through the first half.

Erik C. Aldag: Meanwhile, we saw continued growth in foundry volumes in Asia, driven by market penetration of our differentiated green sand bond systems and technical services. However, in the infrastructure product line, sales were lower by 8%. Caused by Weakness in Commercial Construction and Large Environmental Projects. When we talked to you last quarter, we expected more projects to move forward in the second quarter. However, we've seen a continued shift in the timing of projects for this business. Segment operating income was $45 million, up 16% over last year, driven by higher volumes and a favorable product mix in high-temperature technology, as well as disciplined pricing and cost. Operating margin was 17.4% of sales, up 270 basis points from the prior year.

Speaker Change: Meanwhile, we saw continued growth in foundry volumes in Asia, driven by market penetration of our differentiated green fan bond systems and technical services.

Speaker Change: In the environmental and infrastructure product line, sales were lower by 8 percent, described by weakness in commercial construction and large environmental projects.

Erik Aldag: When we talked to you last quarter, we expected more projects to move forward in the second quarter. However, we've seen a continued shift in the timing of projects for this business. Segment operating income was $45 million, up 16% over last year, driven by higher volumes and a favorable product mix in high-temperature technology, as well as disciplined pricing and cost control. Operating margin was 17.4% of sales, up 270 basis points from prior year. Looking ahead to the third quarter, we expect market conditions to remain similar. With sales for the segment slightly lower than last year, and that's driven primarily by the market conditions in environmental and infrastructure, as well as softer conditions in the North American ag equipment market.

Speaker Change: When we talked to you last quarter, we expected more projects to move forward in the second quarter.

Speaker Change: However, we've seen a continued shift in the timing of projects for this business.

Speaker Change: Segment operating income was $45 million, up 16% over last year, driven by higher volumes and a favorable product mix in high temperature technology.

Speaker Change: As well as discipline, pricing, and cost control.

Speaker Change: Operating margin was 17.4% of sales, up 270 basis points from prior year.

Erik C. Aldag: Looking ahead to the third quarter, we expect market conditions to remain similar. Sales for this segment are slightly lower than last year, and that's driven primarily by market conditions in environmental and infrastructure, as well as softer conditions in the North American ag equipment market. And we expect an operating margin of approximately 16%, in line with our target level for this segment, although lower than the second quarter due to a more normalized product mix. Now let's turn to our Balance Sheet and Cash Flow Highlights. Our cash flow performance has been strong. Cash from operations for the first six months of the year totaled $106 million, up 34%.

Speaker Change: Looking ahead to the third quarter, we expect market conditions to remain similar, with sales for the segment slightly lower than last year, and that's driven primarily by the market conditions in environmental and infrastructure, as well as softer conditions in the North American ag equipment market.

Erik Aldag: And we expect an operating margin of approximately 16%, in line with our target level for the segment, although lower than the second quarter due to a more normalized product mix.

Speaker Change: And we expect operating margin of approximately 16 percent, in line with our target level for this segment, although lower than the second quarter due to a more normalized product mix.

Erik Aldag: Now let's turn to our balance sheet and cash flow highlight. Our cash flow performance has been strong. Cash from operations for the first six months of the year totals $106 million, up 34%. And we delivered pre-cash flow with $69 million, more than doubled the first half of last year. For the full year, we expect pre-cash flow in the $150 million range. We deployed $37 million toward CapEx in the first half, and we expect between $90 and $100 million of CapEx for the full year. The rate of capital spend will increase in the second half, as we invest in several new paper and packaging satellites, including those equipped with our new yield recycling technology.

Erik C. Aldag: And we delivered free cash flow of $69 million, more than double the first half of last year. For the full year, we expect free cash flow in the $150 million range. We deployed $37 million towards CapEx in the first half, and we expect between 90 and 100 million dollars of CapEx for the full year. The rate of capital spend will increase in the second half as we invest in several new paper and packaging satellites.

Speaker Change: Now let's turn to our balance sheet and cash flow highlights.

Speaker Change: Our cash flow performance has been strong.

Speaker Change: Cash from operations for the first six months of the year, totaled $106 million, up 34%.

Speaker Change: And we delivered free cash flow of $69 million, more than double the first half of last year.

Speaker Change: For the full year, we expect free cash flow in the $150 million range.

Speaker Change: We deployed $37 million towards CapEx in the first half.

Speaker Change: And we expect between 90 and 100 million dollars of CapEx for the full year.

Speaker Change: The rate of capital spend will increase in the second half as we invest in several new paper and packaging satellites, including those equipped with our new yield recycling technology.

Erik C. Aldag: Including those equipped with our New Yield Recycling Technology, and as we complete several units of our high-tech refractory equipment for delivery and installation at customer sites. In the second quarter, we also repaid $10 million in debt and returned $23 million to shareholders through share repurchases and dividends. To date, we have repurchased $49 million of shares under our one-year, $75 million authorization.

Erik Aldag: and as we complete several units of our high-tech refractory equipment for delivery and installation at customer sites. In the second quarter, we also repaid $10 million in debt and returned $23 million to shareholders through share repurchases and dividends. To date, we have repurchased $49 million of shares under our $1 year, $75 million authorization. Our balance sheet remains very strong with over $500 million of liquidity and net leverage at 1.7 times EBITDA.

Speaker Change: and as we complete several units of our high-tech refractory equipment for delivery and installation at customer sites.

Speaker Change: In the second quarter, we also repaid $10 million in debt and returned $23 million to shareholders through share repurchases and dividends.

Speaker Change: To date, we have repurchased $49 million of shares under our one-year, $75 million authorization.

Erik C. Aldag: Our balance sheet remains very strong, with over $500 million of liquidity and net leverage at 1.7 times EBITDA. Now, I'll summarize our outlook for the third quarter. We expect a similar level of sales and a solid operating performance in the third quarter. For Consumer and Specialties, we expect underlying sales growth in the low to mid-single-digit range versus last year. This is driven by higher sales of cat litter and other consumer-oriented products. In engineering solutions, we expect sales to be slightly lower than last year, similar to what we saw in the second quarter.

Speaker Change: Our balance sheet remains very strong with over 500 million dollars of liquidity and net leverage at 1.7 times EBITDA.

Erik Aldag: Now we'll summarize our outlook to the third quarter. We expect a similar level of sales and a solid operating performance in the third quarter. In consumer and specialties, we expect relying sales growth in the low to mid-single digit range versus last year, driven by higher sales of cat litter and other consumer-oriented products. In engineered solutions, we expect sales to be slightly lower than last year, similar to what we saw in the second quarter.

Speaker Change: Now I'll summarize our outlook for the third quarter.

Speaker Change: We expect a similar level of sales and a solid operating performance in the third quarter. In consumer and specialties, we expect underlying sales growth in the low to mid-single-digit range versus last year.

Speaker Change: Driven by higher sales of cat litter and other consumer-oriented products.

Speaker Change: In engineering solutions, we expect sales to be slightly lower than last year, similar to what we saw in the second quarter.

Erik Aldag: In summary for MTI, we expect sales between $535 and $545 million, continuing the same underlying sales growth trend we saw in the first two quarters. With a more normalized product mix, as well as some seasonally higher energy costs, we're expecting operating income between $77 and $80 million and operating margin remaining strong at close to 15%. And we expect EPS between $1.50 and $1.55. Where we land in this range depends on how demand plays out, especially in the few industrial markets where we've noticed some softness. Regardless, delivering this guidance would represent a record profit level for a third quarter and would position us well to deliver a record performance for 2024.

Erik C. Aldag: In summary, for MTI, we expect sales between $535 and $545 million, continuing the same underlying sales growth trends we saw in the first two quarters, with a more normalized product mix, as well as some seasonally higher energy costs. We're expecting operating income between $77 and $80 million, and operating margin remaining strong at close to 15%. And we expect EPS between $1.50 and $1.55. Where we land in this range depends on how demand plays out, especially in the few industrial markets where we've noticed some soft...

Speaker Change: In summary for MTI, we expect sales between $535 and $545 million, continuing the same underlying sales growth trend we saw in the first two quarters.

Speaker Change: With a more normalized product mix, as well as some seasonally higher energy costs, we're expecting operating income between $77 and $80 million, and operating margin remaining strong at close to 15%.

Speaker Change: And we expect EPS between $1.50 and $1.55.

Speaker Change: Where we land in this range depends on how demand plays out, especially in the few industrial markets where we've noticed some softness.

Erik C. Aldag: Regardless, delivering this guidance would represent a record profit level for a third quarter and would position us well to deliver a record performance for 2024. With that, I'll turn the call back over to Doug to share some highlights from our latest sustainability report. Thanks, Erik. Hopefully, you can hear me this time.

Speaker Change: Regardless, delivering this guidance would represent a record profit level for a third quarter and would position us well to deliver a record performance for 2024.

Doug Dietrich: With that, I'll turn the call back over to Doug to share some highlights from our latest Sustainability report.

Speaker Change: With that, I'll turn the call back over to Doug to share some highlights from our latest sustainability report.

Doug Dietrich: Thanks, Eric. Hopefully, you can hear me this time. Well, let me finish up here, and then I'll make some comments on making sure that our replay and the transcripts is very clear for you. But before we go to questions, I just want to finish up by highlighting our latest Sustainability report. It's the 16th that we've published. For the past decade and a half, we've outlined in these reports how safety, environmental stewardship, financial strength, employee engagement, customer satisfaction, community relations, and shareholder engagement have always been part of our values. The cornerstones of how we run the company and key facets of our strategy.

Douglas T. Dietrich: Let me finish up here, and then I'll make some comments on making sure that our replay and the transcript are very clear. But before we go to questions, I just want to finish by highlighting our latest sustainability report. It's the 16th that we've published. For the past decade and a half, we've outlined in these reports health safety.

Doug: Thanks, Erik. Hopefully you can hear me this time. Let me finish up here and then I'll make some comments on making sure that our replay and the transcript is very clear for you.

Doug: But before we go to questions, I just want to finish up by highlighting our latest sustainability report. It's the 16th that we've published.

Douglas T. Dietrich: Environmental Stewardship, Financial Strength, Employee engagement, customer satisfaction, community relations, and shareholder engagement have always been part of our values, cornerstones of how we run the company. These are the key facets of our strategy. This year's report is a broad one that reflects all the company has done and continues to do in each area.

Doug: For the past decade and a half, we've outlined in these reports health safety, environmental stewardship, financial strength,

Doug: Employee engagement, customer satisfaction, community relations, and shareholder engagement have always been part of our values.

Doug: cornerstones of how we run the company and key facets of our strategy.

Doug Dietrich: This year's report is a broad one that reflects all the company has done and continues to do in each area. And a few highlights from this year's report. You'll see that we continue to make significant progress toward achieving our 2025 environmental goals. And in fact, to date, we've already significantly exceeded 10 of our 12 targets. We've initiated a science-based target initiative that we'll use to frame our new long-term environmental goals. And we've published the first draft of our scope three initiatives. Please take some time to read through the report as it highlights our culture and the passion our employees have for our company.

Doug: This year's report is a broad one that reflects all the company has done and continues to do in each area. And a few highlights from this year's report. You'll see that we continue to make significant progress toward achieving our 2025 environmental goals. And in fact, to date, we've already significantly exceeded 10 of our 12 targets.

Douglas T. Dietrich: And a few highlights from this year's report. You'll see that we continue to make significant progress toward achieving our 2025 environmental goals. And, in fact, to date, we've already significantly exceeded 10 of our 12 targets. We have initiated a science-based target initiative that we'll use to frame our new long-term environmental goals.

Doug: We've initiated a science-based target initiative that we'll use to frame our new long-term environmental goals. And we've published the first draft of our Scope 3 missions.

Douglas T. Dietrich: And we've published the first draft of our Scope 3 mission. Please take some time to read through the report as it highlights our culture and the passion our employees have for our company. Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies Inc.

Speaker Change: Please take some time to read through the report as it highlights our culture and the passion our employees have for our company.

Doug Dietrich: Truth Testaments, Teams, Actions, to help MTI make a positive impact in each part of the world in which we operate. I want to thank you for your attention today. It was brought to my attention that a lot of you probably couldn't hear, or there was an echo in terms of some of my remarks. We had a bit of a fire drill in here, making sure that that was corrected, but we'll make sure that there's a clean audio for you to move from your remarks. And also a very clean transcript for you to read at your leisure.

Douglas T. Dietrich: Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies, Each part of the world in which we operate. I want to thank you for your attention today. It was brought to my attention that a lot of you probably couldn't hear or there was an echo in terms of some of my remarks. We had a bit of a fire drill in here, making sure that that was corrected, but we'll make sure that there's clean audio. Unknown Attendee for you.

Speaker Change: True Testament aims actions to help MTI make a positive impact in each part of the world in which we operate.

Speaker Change: I want to thank you for your attention today. It was brought to my attention that a lot of you probably couldn't hear or there was an echo in terms of some of my remarks.

Speaker Change: We had a bit of a fire drill in here, making sure that that was corrected, but we'll make sure that there's a clean audio.

Operator: Operator, let's now move on to questions. Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Speaker Change: Operator, let's now move into questions.

Unknown Attendee: Anyway, operator, listen, I'll move into questions. Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions.

Speaker Change: Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions.

Operator: Again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Daniel Moore with CJS Security. Thank you. Good morning, Doug. Good morning, Erik.

Daniel Moore: We will take our first question from Daniel Moore with CJS Securities.

Speaker Change: We will take our first question from Daniel Moore with CJS Securities.

Doug Dietrich: Thank you. Good morning. Doug, morning, Erik. Hopefully, you can hear me. I heard you loud in there. We can hear you. Will, did you hear anything I said, Dan? I heard it all. So hopefully others did as well.

Daniel Joseph Moore: Hopefully, you can hear me. I heard you loud and clear. We can hear you. Well, did you hear anything I said, Dan? I heard it all, so hopefully others did as well.

Daniel Joseph Moore: Thank you. Good morning, Doug. Good morning, Erik. Hopefully, you can hear me. I heard you loud and clear.

Speaker Change: We can hear you. Well, did you hear anything I said, Dan?

Doug Dietrich: Maybe start with consumer. You know, a lot of consumer, you know, more discretionary businesses had a tougher time in Q2. You're consumer businesses held up really well, feeling any sort of pinch at all. You know, in those businesses, just from maybe a tougher environment. That's one and two in the pet care side.

Daniel Joseph Moore: Maybe start with consumer, you know, a lot of consumer, you know, more discretionary businesses had a tougher time in Q2. Your consumer businesses held up really well. Feeling any sort of pinch at all, you know, in those businesses, just from maybe a tougher environment, that's one.

Doug: I heard it all, so hopefully others did as well.

Speaker Change: Maybe start with consumer, you know, a lot of consumer, you know, more discretionary businesses had a tougher time in Q2. Your consumer businesses?

Speaker Change: held up really well. Feeling any sort of pinch at all, you know, in those businesses, just from maybe a tougher environment, that's one. And two, in the pet care side,

Douglas T. Dietrich: And two, on the pet care side, maybe just a little bit more detail regarding the product changeover, when you expect volumes to return, and ultimately, could that lead to even greater revenue opportunities? Yeah, thanks, Ben. Actually, we saw, you know, strong, continued strong demand across consumer-oriented products, you know, in household and personal care. But a lot of these products are not, they're more consumer non-discretionary, they're cat litter, they're, you know, pharmaceutical-driven, they are into beverages, things that folks are buying regardless, so not your typical consumer spending downturn type item. So, we saw some strong demand for the changeover, you know, and I'll pass it to D.J. To give you some more color, it's part of the business in the pet care business. It happens regularly.

DJ: Maybe just a little bit more detail regarding the product changeover when you expect volumes to return and ultimately could that lead to even greater revenue opportunity. Yeah, thanks, Dan. Actually, we saw strong, continued strong demand across the consumer-oriented products, but in household and personal care. You know, a lot of these products are not; they're more consumer non-discretionary, they're tab litter, they're pharmaceutical driven, they are into beverages, things that folks are buying regardless. So, not your typical consumer spending downturn type item. So we saw some strong demand. The change over, you know, it all passes to DJ; give you some more color.

Speaker Change: Maybe just a little bit more detail regarding the product changeover When you expect volumes to return and ultimately could that lead to even greater revenue opportunity?

Jen: Yeah, thanks, Jen.

Speaker Change: Actually, we saw, you know, strong, continued strong demand across the consumer-oriented product system, you know, in household and personal care.

Speaker Change: You know, a lot of these products are not, they're more consumer non-discretionary, they're cat litter, they're pharmaceutical driven, they are into beverages, things that folks are buying regardless, so not your typical consumer spending downturn type item.

Speaker Change: So we saw some strong demand. The changeover, you know, I'll pass it to DJ to give you some more color.

DJ: Part of that business and the pet care business, it happens regularly. We just called this one out this time just to give you some comparisons year over year, but nothing abnormal.

DJ: Part of that business, in the pet care business, it happens regularly.

Douglas T. Dietrich: We just called this one out this time just to give you some comparisons year over year, but nothing abnormal. D.J., do you want to go into more detail on what that was about and kind of how it plays to some of the strengths of what we're doing in pet care? Sure.

DJ: DJ, you want to go into more color and what that was about and kind of how it plays to some of the strengths of what we're doing in pet care. Sure, thanks for the question, Dan. Just to echo part of what Doug said, basically, what shifts that we're seeing in the consumer market are favorable to us. There's continues to be privately, but especially in the cat litter is growing at a higher rate than the rest of the market. We're able to take advantage of that, but we also got great positions with our branded customers. As far as this change over goes, it's part of our strategy to work with our partners in their private label strategies.

D.J.: We just called this one out this time just to give you some comparisons year over year, but nothing abnormal. D.J. you want to go into more color on what that was about and kind of how it plays to some of the strengths of what we're doing in pet care? Sure. Thanks for the question, Dan. Just to echo part of what Doug said.

Daniel Joseph Moore: Thanks for the question, Dan. Just to echo part of what Doug said. Basically, whether the shifts that we're seeing in the consumer market are favorable to us or continue to be, private label, especially in cat litter, is growing at a higher rate than the rest of the market.

D.J.: Basically what shifts that we're seeing in the consumer market are favorable to us or continues to be

Speaker Change: Douglas Aldag, Lydia Kopylova, Douglas Dietrich

DJ: We're able to take advantage of that, but we also have great positions with our branded customers. As far as this changeover goes, it's part of our strategy to work with our partners in their private label strategies, and that will, on occasion, just as we reset and reintroduce new products and upgrade those products, we'll see this from time to time. But in general, things are going according to our strategy, and a good-looking second half is fast approaching.

Speaker Change: It's part of our strategy to work with our partners in their private label strategies and that will on occasion just as we reset.

DJ: And that will, on occasion, just as we reset and reintroduce new products and upgrade those products, we'll see this from time to time. But in general, things are going according to our strategy. Good looking second half, fast approaching. And just to give you some broader dimension as some of the things that will do during these upgrades, it could be as simple as an ergonomic shift on packaging or just a change in packaging type or maybe a change in fragrance. But then it also gets more complex to change the look and flow of the product to promote greater hygiene at the home.

Speaker Change: and reintroduce new products and upgrade those products. We'll see this from time to time. But in general, things are going according to our strategy.

DJ: And just to give you some broader dimensions of some of the things that we'll do during these upgrades, it could be as simple as an ergonomic shift in packaging or just a change in packaging type or maybe a change in fragrance, but then it also gets more complex to change the look and flow of the product to promote greater hygiene in the home. So there are a couple of different changes going on with some of our good retailers, but overall, it's helping further grow this category and also improve our margins as we upgrade. Perfect.

Speaker Change: Good looking second half, fast approaching.

Speaker Change: And just to give you some broader dimension of some of the things that we'll do during these upgrades, it could be as simple as a...

Speaker Change: Has an ergonomic shift on packaging or just a change in packaging type?

Speaker Change: to change the look and flow of the product.

DJ: So it's a couple of different changes going on with some of our good retailers, but overall it's helping further grow this category and also improve our margins as we upgrade. of the products. Perfect.

Speaker Change: to promote greater hygiene at the home.

Speaker Change: So, it's a couple of different changes going on with some of our good retailers, but overall, it's helping further grow this category and also improve our margins as we upgrade the products.

Daniel Joseph Moore: Maybe switching gears to refractories in the high-temperature tech part of the business. You know, I think we've installed about a dozen or so automated systems over the last two years. There are, I think, 60 or so in electric arc furnaces.

Doug Dietrich: Maybe switching gears to refractories in the high temperature tech part of the business. I think we've installed about a dozen or so automated systems over the last two years. There's, I think, 60 or so in electric car furnaces. What are your expectations for growth going forward? Has the, you know, the local hanging group and pictures there? Now really steady, you know, let's say slope of upgrades still ahead of us.

Speaker Change: Perfect. Maybe switching gears to refractories in the high-temperature tech.

Speaker Change: Part of the business, you know, I think we've installed about a dozen or so automated systems over the last two years

Speaker Change: There's, I think, 60 or so electric arc furnaces. What are your expectations for growth going forward? Has the low-hanging fruit been picked, or is there a really steady, let's say, slope of upgrades still ahead of us?

Daniel Joseph Moore: What are your expectations for growth going forward? Has the low-hanging fruit been picked, or is there really steady growth, you know? Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies Inc. Yeah, I'll take that, and then I'll pass it over to Brett. No, we have a long road ahead of us here. There's, you know, we're just, this is an electric arc furnace application. I think we've installed 15 of them.

Brett Argirakis: Yeah, I'll take that, and then I'll pass it over to Brett. No, there's a long road ahead of us here. There's, you know, we're just, this is an electric car furnace application. I think we've installed 15 of them. Over the past two years, we have another five, I think, to install this year. There's more than that in the United States. And I think we're now just introducing it in Europe.

Speaker Change: Yeah, I'll take that and then I'll pass it over to Brett.

Brett: No, there's a long road ahead of us here. There's, you know, we're just, this is an electric arc furnace application. I think we've installed 15 of them.

Brett: Over the past two years, we have another five, I think, to install this year. There's more than that in the United States, and I think we're now just introducing it in Europe . But, Brett, you want to give us some, kind of, how this is playing out?

Brett Argirakis: But Brett, you want to give us some kind of how this is playing out? And how are we going to take it? Sure. Thanks, Anne. Look, as we've talked about before, the market has shifted from a B.O.F. to integrated steel more towards the non-integrated steel or electric car furnaces. We've installed this new equipment, of course, for safety reasons, for more efficient refractory applications for our customers. And it utilizes the combination of our laser technology, our cameras, so that we can move people off of the shop floor so that they can see inside the furnace and see what they're applying our product to.

Douglas T. Dietrich: Over the past two years, we have another five, I think, to install this year. There's more to that in the United States, and I think we're now just introducing it in Europe. But Brett, you want to give us some kind of how this is playing out? Thanks Dan. Look, as we've talked about before, the market has shifted from BOF, or integrated steel, more towards the non-integrated steel or electric arc furnaces. We've installed this new equipment, of course, for safety reasons, for more efficient refractory applications for our customers, and it utilizes a combination of our laser technology, our cameras, so that we can move people off of the shop floor so that they can see inside the furnace and see what they're applying our product to, and then the robotic system, As Doug mentioned, we have signed 15 agreements, including the refractory supply, probably around $150 million over that period through 2025, and we're working really hard to further penetrate the U.S. market.

Brett: As we've talked about before, the market has shifted from BOF or integrated steel more towards the non-integrated steel or electric arc furnaces.

Brett: We've installed this new equipment, of course, for safety reasons, for more efficient refractory.

Brett: And it utilizes a combination of our laser technology.

Speaker Change: our cameras so that we can move people off of the shop floor so that they can see inside the furnace and see what they're applying our product to. And then the robotic system that's PLC-controlled that applies the product to the furnace to make very accurate measurements.

Brett Argirakis: And then the robotic system, the PLC control, that applies the product to the front of the furnace and makes very good. As Doug mentioned, we have signed 15 agreements, including the refractory supply, probably around $150 million over that period through 2025. And we're working really hard to further penetrate the U.S. market. But we're also now, we have a nice footprint, a nice pipeline in Europe, and also in Japan. So we have three more agreements signed for 2025. As Doug mentioned, we have five or six boards installed this year, so actually it's nine total units in 2024.

Speaker Change: As Doug mentioned, we have signed 15 agreements.

Doug: Including the refractory supply.

Doug: probably around $150 million over that period through 2025.

Speaker Change: and we're working really hard to further penetrate the U.S. market.

Douglas T. Dietrich: But we also now have a nice footprint, a nice pipeline in Europe and also in Japan. So we have three more agreements signed for 2025. As Doug mentioned, we have five or six more to install this year, so actually, it's nine total units in 2024, and we're developing that pipeline for Europe and Japan.

Speaker Change: But we're also now, we have a nice footprint.

Speaker Change: A nice pipeline in Europe and also in Japan.

Speaker Change: We have three more agreements signed for 2025. As Doug mentioned, we have five or six more to install this year, so actually it's nine total units in 2024.

Brett Argirakis: And we're developing that pipeline for Europe and Japan. So we feel good about expanding because the European market is also moving in the same direction. They're moving from the integrated to the non-integrated. And so we want to be there to help them, and we're well aligned to meet their needs. And Dan, you know, these are set up as I mentioned, kind of five-year contracts that provide not only the equipment either as a capital sale or a lease, but then the refractory through it. And we've changed our refractory formulations for the electric, the electric arc market.

Brett Argirakis: So we feel good about expanding because the European market is also moving in the same direction. They're moving from integrated to non-integrated, and so we want to be there. And Dan, as you know, these are set up as mentioned, kind of five-year contracts that provide not only the equipment, either as a capital sale or lease, but then the refractory through it.

Doug: and we're developing that pipeline for Europe and Japan. So we feel good about expanding because the European market is also moving in the same direction. They're moving from the integrated to the non-integrated.

Doug: And so we want to be there to help them, and we're well aligned to meet their needs. And Dan, as you know, these are set up, as Brett mentioned, kind of five-year contracts that provide not only the equipment, either as a capital sale or a lease,

Douglas T. Dietrich: We've changed our refractory formulations for the electric arc market. That's what I referred to, some higher tech formulations. It's a different model that we're going at, and I think we still have some room to expand that globally. Maybe switching gears one more, and I'll jump back in line, but just how should we think about the $30 million commitment to BMI? Is that for legal expenses, or? Will a good portion of that likely go to fund the eventual settlement?

Dan: But then the refractory through it, and we've changed our refractory formulations for the electric arc market.

Brett Argirakis: That's what I referred to: some higher-tech formulations, this equipment, and some of the data gathering that we're working on to bring some more intelligence to that process. So it's kind of a different business than it was four or five years ago in terms of just pertun gunning now. It's a different model that we're going to. And I think we still have some room to expand that globally.

Dan: That's what I referred to, some higher-tech formulations, this equipment, and some of the data gathering that we're working on to bring some more intelligence to that process. So it's kind of a different business than it was four or five years ago in terms of just per-ton gunning. Now it's a...

Dan: It's a different model that we're going at, and I think we still have some room to expand that globally.

Unknown Attendee: Excellent.

Doug Dietrich: Maybe 15 years, one more, and I'll jump back into you, but just as we think about the $30 million commitment to the BMI, is that for legal expense, or will a good portion of that likely go to fund the eventual settlement? And, you know, there's this anyway, reflect kind of expectations around timing of both when we might finally put it to rest. Yeah, it's going to fund the process largely that those are legal expenses to continue to fund the process. That's, you know, we're in mediation right now. Look, I think, you know, it's a supportive and constructive step to keep the process going.

Speaker Change: Excellent. Maybe switching gears one more and I'll jump back in queue, but just how should we think about the 30 million dollar commitment to the BMI? Is that for legal expense or?

Speaker Change: Will a good portion of that likely go to fund the eventual settlement and you know does this anyway reflect kind of expectations around timing of when we might finally put it to rest?

Douglas T. Dietrich: And, you know, does this in any way reflect kind of expectations around the timing of when we might finally put it to rest? Yeah, it's going to fund the process largely because those are legal expenses to continue to fund the process that's, you know, we're in mediation right now. Look, I think, you know, it's a supportive and constructive step to keep the process going, a very structured process, as you can imagine, through bankruptcy. I can't give you right now a date as to how it will play out or when it will play out, but I can say that being in mediation is still a good process.

Speaker Change: Yeah, it's going to fund the process largely that those are legal expenses to continue to fund the process that's you know We're in mediation right now Look, I think

Speaker Change: You know, it's a supportive and constructive step to keep the process going. It's a very structured process, as you can imagine, through bankruptcy.

Doug Dietrich: It's a very structured process, as you can imagine, through bankruptcy. You know, I can't give you right now a date as to how it will play out or when it will play out, but I can say that being in mediation is still a good process, right? So we feel like this $30 million should fund it through, you know, largely toward the end of the year. And we think that's a good run way to keep that process going. So constructive step, we wanted to keep it going. And like Eric said, either it will be consumed, or it will probably be contributed into the fund if the mediation solves itself sooner.

Speaker Change: You know, I can't give you right now a date as to how it will play out or when it will play out, but I can say that being in mediation is still a good process, right?

Douglas T. Dietrich: We feel like this $30 million should fund it largely toward the end of the year, and we think that's a good runway to keep that process going. So a constructive step; we wanted to keep it going, and like Erik said, either it will be consumed, or it will probably be contributed to the fund if the mediation... Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies Inc., to account for it. Okay. Very helpful. I'll jump back to any follow-ups. Thanks again. We will take our next question from Mike Harrison with Seaport Research Partners. Hi, good morning.

Speaker Change: where we feel like this $30 million should fund it through.

Speaker Change: Douglas Aldag, Lydia Kopylova, Douglas Dietrich

Doug Dietrich: But either way, that's why we took the charge to account for it this way. Okay, very helpful.

Speaker Change: If the mediation solves itself sooner, but either way, that's why we took the charge to account for it this way.

Unknown Attendee: Dr. Beckley, follow up. Thanks again.

Speaker Change: Okay, very helpful. I'll jump back to any follow-ups. Thanks again.

Mike Harrison: We will take our next question from Mike Harrison with C-Port Research Partners. Hi, good morning. Just another clarification on the $30 million. Is that something that you could recoup? At some point, I think you kind of classified it as a credit line, which implies that it might be repaid at some point. Is that the expectation? You know, our expectation right now, which is why we took the full charge for the $30 million, is that it will either be consumed over the next several months, fund the process going forward, or if that mediation ends for some reason, it will be a contribution into the trust.

Speaker Change: [inaudible]

Speaker Change: We will take our next question from Mike Harrison with Seaport Research Partners.

Michael Joseph Harrison: Just another clarification on the $30 million. Is that something that you could recoup at some point? I think you kind of classified it as a credit line that implies that it might be repaid at some point. Is that the expectation? You know, our expectation right now, which is why we took the full charge for the $30 million, is that it will either be consumed over the next several months to fund the process going forward, or if that mediation ends for some reason, it will be a contribution into the trust, and it will be accounted for as fully consumed, one way or the other, into the process, into the bankruptcy. Mike, if that helps any,

Michael Joseph Harrison: Hi, good morning. Just another clarification on the $30 million. Is that something that you could recoup?

Michael Joseph Harrison: At some point, I think you kind of classified it as a credit line, which implies that it might be repaid at some point. Is that the expectation?

Speaker Change: You know, our expectation right now, which is why we took the full charge for the $30 million, is that it will either be consumed over the next several months, fund the process going forward,

Speaker Change: or if that mediation ends for some reason, it will be a contribution into the trust. So either way, I think it's going to be accounted for as fully consumed one way or the other into the process, into the bankruptcy. Mike, if that helps. Okay.

Erik Aldag: So either way, I think it's going to be accounted for as fully consumed one way or the other into the process, into the bankruptcy.

Erik Aldag: Mike, that helps. Okay, understood. On the engineered solutions business, just the guidance that you're providing for Q3 and the 16 percent operating margin level, which is a lot lower than what you just reported here in Q2. You referenced that the mix is going to be normalizing. Can you give a little bit more color as to what was unusual about the mix in Q2 that would have such a dramatic impact to the margin performance? Yeah, Mike, thanks. This is Eric. So it was the several equipment sales that we mentioned. That was the main contributor of the more favorable mix in the second quarter, relative to what we're expecting in the third.

Douglas T. Dietrich: Okay. It's understood. On the engineered solutions business, just the guidance that you're providing for Q3 and the 16% operating margin level, which is a lot lower than what you just reported here in Q2, you referenced that the mix is going to be normalizing. Can you give a little bit more color as to what was unusual about the mix in Q2 that would have such a dramatic impact sequentially on the margin performance? Yeah, Mike, thanks. This is Erik.

Michael Joseph Harrison: Understood. On the engineered solutions business, just the guidance that you're providing for Q3 and the 16% operating margin level, which is a lot lower than

Speaker Change: What you just reported here in Q2, you referenced that the mix is going to be normalizing. Can you give a little bit more color as to what was unusual about the mix in Q2 that would have such a dramatic impact sequentially on the margin performance?

Erik C. Aldag: So, it was the several equipment sales that we mentioned that was the main contributor of the more favorable mix in the second quarter relative to what we're expecting in the third. Part of that's driven by, I mean, Doug alluded to the fact that some of these are outright sales, and some of these are boosted. So, the ones in the second quarter happened to be outright sales, and that gave a boost to the margins in the second quarter. We have, I think, five to go, or five planned equipment sales through the rest of the year, but most of those are structured as leases.

Michael Joseph Harrison: Yeah, Mike, thanks. This is Erik. So it was the several equipment sales that we mentioned. That was the main contributor of the...

Erik Aldag: Part of that's driven by, I mean, Doug alluded to the fact that some of these are outright sales and some of these are losses. So the ones in the second quarter happened to be outright sales, and that gave a boost to the margins in the second quarter. We have, I think, five to go or five plans equipment sales through the rest of the year, but most of those are structured at least. So a little bit different of an impact on margins. Oh, I will say they're all including our refractory products. So they do provide a nice long-term recurring revenue stream for us in that way.

Michael Joseph Harrison: Part of that's driven by, I mean, Doug alluded to the fact that some of these are outright sales and some of these are hoaxes. So the ones in the second quarter happened to be outright sales and that gave a boost to the…

Erik C. Aldag: So, a little bit different of an impact on margins. Although, I will say, they're all including our refractory products. So, they do provide a nice long-term recurring revenue stream for us in that way. All right. And then I had a couple of questions about the pet care business. Did this product change during the time of testing? Did that pull volume forward into Q1? Or is it going to push volume out into Q3? Or am I confused about the whole mechanism, and I shouldn't be thinking about it as different timing of volumes hitting your P&L?

Michael Joseph Harrison: Douglas Aldag, Lydia Kopylova, Douglas Dietrich

Michael Joseph Harrison: So they do provide a nice long-term recurring revenue stream for us in that way.

Erik Aldag: But mostly, I would say, it was the high margin equipment sales in the second quarter, and then a little bit of energy as well in terms of Q2 to Q3. We're seeing a little bit higher energy cost, but those are the main margins.

Speaker Change: But mostly, I would say it was the high-margin equipment sales in the second quarter, and then a little bit of energy as well in terms of Q2 to Q3, we're seeing a little bit higher energy costs. But those are the main margin differences.

Mike Harrison: Alright, and then I had a couple of questions on the pet care business. Did this product change over timing? Did that pull volume forward into Q1, or is it going to push volume out into Q3, or am I confused on the whole mechanism, and I shouldn't be thinking about it as different timing of volume hitting your P&L? Yeah, so certainly don't want to make a bigger deal of it than it is. So we had probably a few customers change over this quarter. The dynamics are different with each one. You know, you're changing box types, artwork, pales, technology, et cetera.

Speaker Change: All right, and then I had a couple of questions on the pet care business. Did this product change over timing? Did that pull volume forward into Q1?

Speaker Change: Or is it going to push volume out into Q3, or am I confused on the whole mechanism and I shouldn't be thinking about it as different timing of volume hitting your P&L?

Unknown Attendee: Unknown AttendeeYeah, so, we certainly don't want to make a bigger deal of it than it is. So we had probably a few customers change over this quarter, you know, the dynamics are different with each one, you know, you're changing box types, artwork, pails, technology, et cetera. And in this case, it was with a larger customer that, as DJ I think mentioned, was moving to a different technology. So we forecast that that would happen. Sometimes the timing of them and the duration of them are different, so it really wasn't anything out of the ordinary. We didn't pull anything in to fill up the stocks.

Speaker Change: Yeah, so

Speaker Change: We certainly don't want to make a bigger deal of it than it is. So we had probably a few customers change over this quarter.

Speaker Change: You know, the dynamics are different with each one. You know, you're changing...

Doug Dietrich: And in this case, it was with a larger customer that, as DJ I think mentioned, we're moving to a different technology. So we'd forecast that that would happen. Sometimes the timing of them and the duration of them are different. So it really wasn't anything out of the normal. We didn't pull anything in to fill up the stocks. And, you know, I will say though that after the changeover occurs, and that's why I think Eric is mentioning, you know, pet care volumes growing. Two things are going to be happening in the back after the year one.

DJ: box types, artwork, pails, technology, etc. And in this case it was with a larger customer that, as DJ I think mentioned, we're moving to a different technology. So we had forecast that that would happen. Sometimes the timing of them and the duration of them are different.

Speaker Change: So it really wasn't anything out of the normal. We didn't pull anything in to fill up the stocks. And, you know, I will say, though, that after the changeover occurs, and that's why I think...

Douglas T. Dietrich: And, you know, I will say though, that after the changeover occurs, and that's why I think Erik is mentioning, you know, pet care volumes growing, two things are gonna be happening in the back half of the year. One, that changeover, one or two of those changeovers should be complete. Plus we start to hit the high season for pet litter. The colder months are usually higher pulls.

Speaker Change: Erik is mentioning, you know, pet care volume is growing. Two things are going to be happening in the back half of the year. One, that changeover, one or two of those changeovers should be complete. Plus, we start to hit the high season for pet litter. The colder months are usually higher pools. There's usually promotions that are going on late in the fall.

Doug Dietrich: That changeover, one or two of those changeovers should be complete. Plus, we start to hit the high season for pet litter. The colder months are usually higher pools. There's usually promotions that are going on late in the fall. And so I think those ones that change, a couple of changeovers have moved through, and we'll likely have another one in the fall. But either way, that with the higher season, seasonal volumes will pull through, Mike. It's nothing out of the ordinary. It was just to highlight the comparison last year. Got it.

Douglas T. Dietrich: There are usually promotions that are going on late in the fall. And so I think those, once that change, a couple of changeovers have moved through, and we'll likely have another one in the fall. But either way, that with the higher season, seasonal volumes will pull through, Mike. It's nothing out of the ordinary, just to highlight a comparison to last year.

Speaker Change: And so I think a couple of changeovers have moved through, and we'll likely have another one in the fall, but either way, that with the higher seasonal volumes will pull through, Mike. It's nothing out of the ordinary. It was just to highlight a comparison of last year.

Douglas T. Dietrich: And then there was also a comment, Doug, in your remark that you guys were launching a new global brand. Can you share some more details? Yeah, we've, see how many brands we have in this company right now. So, you know how the business has been put together. It started as a $70 million business operating under, you know, really not even a brand under the American Colloid ACC brand name, part of the Amcol acquisition.

Doug Dietrich: And then there was also a comment, Doug, in your remarks that you guys were launching a new global brand. Can you share some more details there? Yeah, we've, let's see, how many brands? We have four brands in this company right now. So, if you know how the business has been put together, it started as a $70 million business operating under, you know, really not even a brand under the American Colloid ACC brand name. Part of the we purchased in 2021, another company called North America. And then in 2022 or 2023, if my memory serves me, we bought a third company in Slovakia called Concept Pet.

Michael Joseph Harrison: Got it. And then there was also a comment, Doug, in your remarks that you guys were launching a new global brand. Can you share some more details there?

Doug: Yeah, we've, um...

Doug: Let's see, how many brands, we have four brands in this company right now, so if you know how the business has been put together.

Speaker Change: It started as a $70 million business operating under, you know, really not even a brand under the American Colloid ACC brand name, part of the Amcol acquisition.

Douglas T. Dietrich: We bought in 2018, a company in Europe called SIVOmatic. We purchased in 2021 another company called Normerica. And then in 2022 or three, if my memory serves me, we bought a third company. Contact us at www.conceptpet.com. So we have four different companies, and we've now integrated them into one.

Speaker Change: We bought in 2018 a company in Europe called SIVOmatic.

Speaker Change: We purchased in 2021 another company called Noramerica.

Speaker Change: And then in 2022 or three, if my memory serves me, we bought a third company in Slovakia called Concept Pet.

Doug Dietrich: So, we have four different companies, and we've now integrated them into one global company that we use, and we're expanding now into Asia. So, we've invested in the infrastructure. We've invested in automation. We've invested in to make sure that these are the lowest cost plants. They're all vertically integrated. We're starting to use those reserves globally to support customers, large customers that operate globally. and so now that that integration is done, we think it's time to have that business which is $400 million and our targets are to grow it to over $500 million in the next two to three years, have its own identity.

Speaker Change: So we have four different companies.

Speaker Change: And we've now integrated them into one.

Douglas T. Dietrich: And we're expanding now into Asia. So we've invested in the infrastructure, we've invested in automation, we've invested to make sure that these are the lowest cost plants. They're all vertically integrated.

Speaker Change: that we use.

Speaker Change: and we're expanding now into Asia.

Speaker Change: So, we've invested in the infrastructure, we've invested in automation, we've invested in to make sure that these are the lowest cost plants, they're all vertically integrated.

Douglas T. Dietrich: We're starting to use those reserves globally to support customers, large customers that operate globally. And so now that that integration is done, we think it's time to have that business, which is $400 million, and our targets are to grow it to over $500 million in the next, For more information, visit www.fema.gov, have its own identity.

Speaker Change: We're starting to use those reserves globally to support customers, large customers that operate globally.

Speaker Change: And so, now that that integration is done, we think it's time to have that business, which is $400 million, and our targets are to grow it to over $500 million in the next two or three years.

Douglas T. Dietrich: And one that our customers can refer to whether they're in Asia, Europe, North America, anywhere. And so we're kind of excited about that. We're working on it. And so stay tuned. I just wanted to give another brief advertisement for that name coming out. It should be coming out in the next couple of, All right, very good. Thanks very much. I'll get back in queue.

Speaker Change: have its own identity and one that our customers can refer to whether they're in Asia, Europe , North America, anywhere. And so we're kind of excited about that, we're working on it, and so stay tuned. I just wanted to give another brief advertisement on that name coming out. It should be coming out in the next couple of months.

Unknown Attendee: All right, very good. Thanks very much. I'll get that. Thank you.

Speaker Change: All right, very good. Thanks very much, I'll get back to you.

Kyle May: We will now take our next question from Kyle May with Sedoti.

Michael Joseph Harrison: Thanks, Mike. We will now take our next question from Kyle May with Sedota. Morning, this is Steve Ferazani on for Kyle.

Speaker Change: We will now take our next question from Kyle May with Sidoti.

Steve Farazani: I'm warning Steve Farazani on for Kyle. Appreciate the detail. I'm calling this morning. I want to ask a little bit more on the, I want to ask a little bit more on the strength and margin in the quarter and obviously you pointed out the product sales and the refractory side. But when I look at your bridge, it looks like mix was a smaller piece. A lot of it came on the cost side.

Stephen Michael Ferazani: Appreciate the detail on the call this morning. I want to talk a little bit more on the strength and margin in the quarter. And obviously, you pointed out product sales on the refractory side. But when I look at your bridge, it looks like mix was a smaller piece.

Speaker Change: Morning, this is Steve Ferazani on for Kyle. I appreciate the detail on the call this morning. I wanted to ask a little bit more on the

Speaker Change: [inaudible]

Stephen Michael Ferazani: A lot of it came on the cost side. Can you highlight a little bit more of those efforts? And, you know, to get that kind of margin improvement in a relatively flat market is impressive. Is there more to go on the cost side? Thanks, Steve.

Stephen Michael Ferazani: But when I look at your bridge, it looks like mix was a smaller piece. A lot of it came on the cost side. Can you highlight a little bit more of those efforts? And, you know, to get that kind of margin improvement in a relatively flat market is impressive. Is there more to go on the cost side?

Erik Aldag: Can you highlight a little bit more of those efforts, and you know, to get that kind of margin improvement in a relatively flat market is impressive? Is there more to go on the cost side? Thanks, Steve. Thanks for the question. So yeah, margins were strong, and we are ahead of our targets for the year. We had highlighted that we'd be at 14% kind of for the year this year, and our target was 15 for next year. And I think we're probably, probably going to be right around a year early on that target. But what's behind it is a couple of things.

Douglas T. Dietrich: Thanks for the question. So, yeah, margins were strong, and we are ahead of our targets for the year. It highlighted that we'd be at 14% kind of for the year this year, and our target was 15% for next year. We're probably going to be right around a year early on that.

Speaker Change: Thanks for the question. So, yeah, margins were strong and we are ahead of our targets for the year. We had highlighted that we'd be at 14% kind of for the year this year and our target was 15% for next year. And I think we're probably going to be right around a year early on that target.

Douglas T. Dietrich: But what's behind it is a couple things. It's, yes, you saw that it's partially cost, and I think, as we've, Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies Inc. Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies We've done a great job in terms of stabilizing that cost base, but I think now is a true reflection of what the company really is in terms of profitability.

Erik Aldag: It's yes. You saw that it's partially cost, and I think, as we've seen, that inflation stabilized over the past year. You know, we've done a great job in terms of stabilizing that cost base. But I think now is a true reflection of what the company from a cost base really is in terms of profitability. We've, you know, my comments were: this is a little bit different. We've invested in kind of higher margin markets. We've invested in technologies that are addressing more challenging issues, providing those solutions which generate, you know, higher margins for us with the value we provide.

Speaker Change: But what's behind it is a couple things. It's, yes, you saw that it's partially cost, and I think as we've seen that inflation stabilize over the past year.

Speaker Change: We've done a great job in terms of stabilizing that cost base, but I think now is a true reflection of what the company from a cost base really is in terms of profitability.

Douglas T. Dietrich: You know, my comments were, this is a little bit different; we've invested in kind of higher-margin markets, investing in technologies that are addressing more challenging, We have issues providing those solutions, which generate higher margins for us with the value we provide.

Speaker Change: You know I my comments were this is a little bit different. We've we've invested in kind of higher margin markets

Speaker Change: We've invested in technologies that are addressing more challenging issues, providing those solutions which generate higher margins for us with the value we provide.

Douglas T. Dietrich: And so that mixed story and that volume, so volume is coming from positions we're putting ourselves in a growing market that's adding, we're leveraging that volume and that price over a disciplined cost. You know, the mix is coming from, as we mentioned this quarter, we've got some high-tech, you know, equipment, but it's also coming from some of the consumer and the specialties. It's coming from animal health, it's coming from these personal care products, and it's coming from bleaching.

Erik Aldag: And so that mixed story and that volume. So volume is coming from positions we're putting ourselves in and growing markets. That's adding; we're leveraging that volume and that price over a disciplined cost base. You know, the mix is coming from, as we mentioned, this quarter. We've got some high tech, you know, equipment, but it's also coming from some of the consumer and the specialties is coming from Animal Health. It's coming from these personal care products. It's coming from bleaching, or these are higher margin products that we've invested in over the past few years. Headlet or business is becoming as we've integrated and invested in cost reduction, a high margin of business as well, which is now steadily growing.

Speaker Change: And so that mixed story and that volume, so volume is coming from positions we're putting ourselves in in growing markets. That's adding, we're leveraging that volume and that price over a disciplined cost base.

Speaker Change: You know, the mix is coming from, as we mentioned, this quarter we've got some high-tech, you know, equipment, but it's also coming from some of the consumer and the specialties. It's coming from animal health, it's coming from these personal care products, it's coming from bleaching. These are higher-margin products that we've invested in over the past few years.

Douglas T. Dietrich: These are higher-margin products that we've invested in over the past few years, a headliner business, becoming, as we've integrated and invested in cost reduction, a high-margin business as well, which is now steadily growing. So I think what you're seeing is, you know, the cost base. Yes, we are gathering, and generating some benefits from cost, but it's a more stable cost based on where it was last year. And what you're seeing now is this mix and this volume really being leveraged and putting ourselves in a higher margin product.

Speaker Change: The headliner business is becoming, as we've integrated and invested in cost reduction, a high-margin business as well, which is now steadily growing.

Erik Aldag: So I think what you're seeing is, you know, the cost base. Yes, we are gathering, we are generating some benefits from cost, but it's a more stable cost base from where it was last year. And what you're seeing now is this mix and this volume really being leveraged and putting ourselves in higher margin product. And that leads me to tell you, yes, there is more to go. So, as these products, these higher margin products continue to grow, they're growing at a faster pace. They will accrue to our margins, and we're going to be disciplined about that overhead spending, as you know us, and leverage all those new sales over that fixed cost base.

Speaker Change: So I think what you're seeing is, you know, the cost base, yes, we are gathering, we are generating some benefits from cost, but it's a more stable cost base from where it was last year, and what you're seeing now is this mix and this volume really being leveraged and putting ourselves in higher margin products, and that leads me to tell you, yes, there is more to go.

Douglas T. Dietrich: And that leads me to tell you, yes, there is more to go. As these higher-margin products continue to grow, they're growing at a faster pace, they will accrue to our margins, and we're going to be disciplined about that overhead spending, as you know us, and leverage all those new sales over that fixed cost base, so there's more to come. Excellent. Thanks for that.

Speaker Change: So as these products, as these products, these higher margin products continue to grow, they're growing at a faster pace, they will accrue to our margins, and we're going to be disciplined about that overhead spending, as you know us, and leverage all those new sales over that fixed cost base, so there's more to go.

Erik Aldag: So there's more to go.

Erik Aldag: Excellent, thanks to that.

Stephen Michael Ferazani: On the free cash flow target of $150 million, it sounds like you have more CapEx to go in the second half. So two-piece question: where's the CapEx going in the second half and any risk to that $150 million target? I think we feel pretty good about that cash flow target, the cash from off target the company's generating. Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies. In terms of the ramp-up in CapEx, and I referenced a couple of areas, but it's basically we've got four paper and packaging satellites being constructed and ramping up in the fourth quarter and into the first quarter of next year, and we've got MNSCAN, those are the refractory

Erik Aldag: On the free cash flow target of 150 million, sounds like you have more catbacks to go in the second half. So two piece question. Where's the catbacks going in second half and any risk to that $150 million target? I think we feel pretty good about that cash flow target, the cash from up target. The companies are generating strong levels of cash flow and working capital and good and good shape. The efficiencies are in good shape. In terms of the ramp up in catbacks, and I have referenced a couple of the areas, but it's basically we've got four paper and packaging satellites being constructed and wrapping up in the fourth quarter and into the first quarter of next year.

Speaker Change: Excellent. Thanks for that. On the free cash flow target of $150 million, it sounds like you have more CapEx to go in the second half. So two-piece question, where is the CapEx going in the second half and any risk to that $150 million target?

Speaker Change: I think we feel, thanks Steve, this is Erik, I think we feel pretty good about that cash flow target, the cash from up target the company's generating.

Speaker Change: of cash flow and working capital is in good shape, the efficiencies are in good shape. In terms of the ramp up in CapEx spend, I referenced a couple of the areas, but it's

Speaker Change: Four paper and packaging satellites being constructed and wrapping up in the fourth quarter.

Erik Aldag: And we've got min scan; those are the refractory equipment. We've got completion of several of those units in the second half of the year. And then I would say it's a handful of smaller kind of de bottlenecking and automation projects that they're also working on, but we do expect it to ramp up the catbacks to ramp up from the first half into the second half.

Speaker Change: and into the first quarter of next year.

Speaker Change: and we've got Minscan, those are the refractory equipment.

Speaker Change: We've got completion of several of those units in the second half of the year. And then I would say it's a handful of smaller kind of de-bottlenecking and automation projects that we're also working on. But we do expect the CAPEX to ramp up from the first half into the second half.

Stephen Michael Ferazani: We've got completion of several of those units in the second half of the year. And then I would say there are a handful of smaller de-bottlenecking and automation projects that are also working. We do expect the capex to ramp up from the first second. Thanks, Doug. Thanks, Sarah.

Doug: Thanks, Doug. Thanks, Erik.

David Silver: We will take our next question from David Silver with CL King. Yeah, thank you. Good morning. Maybe just to start it. Hey, thank you.

Stephen Michael Ferazani: We will take our next question from David Silver with CLT. Yeah, thank you. Good morning.

Doug: Thank you.

Doug: We will take our next question from David Silver with C.L. King.

David Cyrus Silver: Unknown Speaker Maybe just to start, I'd like to get a little clarification on the most recent question about free cash flow for the year. The $150 million target, as you're looking at it right now, is that inclusive of the $30 million line of credit for BMI, or, you know, or is that exclusive of that? In other words, that's kind of a new element, you know, since the beginning of the year is it going to be 150?

David Cyrus Silver: Yeah, thank you. Good morning.

David Silver: Maybe just to start, I'd like to get a little clarification on the most recent question about free cash flow for the year, but the 150 million target, as you're looking at it right now. Is that inclusive of the 30 million dollar line of credit for BMI, or, you know, or is that exclusive of that? In other words, that's kind of a new element, you know, since the beginning of the year. Is it going to be 150 even after allocating the 30 million, which I think you indicated was likely to be consumed by the rest by the end of this year?

David Cyrus Silver: Maybe just to start it. Hey, thank you. Maybe just to start, I'd like to get a little clarification on the most recent question about free cash flow for the year, but

Speaker Change: The $150 million target, as you're looking at it right now, is that inclusive of the $30 million line of credit for BMI or?

Speaker Change: you know, or is that exclusive of that? In other words, that's kind of a new element, you know, since the beginning of the year. Is it going to be 150?

David Cyrus Silver: Even after allocating $30 million, which I think you indicated was likely to be consumed by the rest by the end of this year. Thanks, Dave. Just as a matter of geography on the cash flow statement, that's going to go into cash. $30,000,000 as a loan.

Speaker Change: Even after allocating the $30 million, which I think you indicated was likely to be consumed by the end of this year.

Erik Aldag: As a matter of geography on the cash flow statement, that's going to go into the cash from investing the 30 million dollars as a loan. Very good. Okay. Thank you for that clarification.

Speaker Change: Thanks Dave. Just as a matter of geography on the cash flow statement, that's going to go into cash from investing, the $30 million as a loan.

Erik C. Aldag: Very good. Okay. [inaudible] Thank you for that clarification. You know, sticking with Erik, you know, I was parsing some of the language in the press release and some of the things here today. And I'd like you maybe to comment on price and cost, you know, from a company-wide perspective, but there is an element of price, you know, in your performance this quarter year over year, let's say, and there's also an element of cost reduction.

Speaker Change: Very good. But it's going to be cash out. Okay. But it'll be cash out for the company.

Speaker Change: Okay, thank you for that clarification. You know, sticking with Erik, you know, I was parsing some of the language in the press release and some of the things here today.

Erik Aldag: You know, sticking with Eric, you know, I was parsing some of the language in the press release and some of the things here today. And I'd like you maybe to comment on price cost, you know, from a company-wide perspective, but there is an element of price, you know, in your performance. This is quarter year over year, let's say, and there's also an element of cost reduction. You know, historically, we've been, you know, a little bit trying to catch up on price, you know, in an inflationary environment, and you've done a good job about that. But is there an element in the results this quarter where actually, you know, you were increasing prices at the same time you were reducing costs, like, let's say, for selected product lines or, or were the cost reductions, you know, elsewhere, maybe at the SG&A level.

Speaker Change: And I'd like you maybe to comment on price-cost, you know, from a company-wide perspective.

Speaker Change: There is an element of price, you know, in your performance this quarter, year over year, let's say, and there's also an element of cost reduction.

Erik C. Aldag: So, historically, we've been, you know, a little bit trying to catch up on price, you know, in an inflationary environment. And you've done a good job with that. But is there an element in the results this quarter where actually, you know, you were increasing prices at the same time you were reducing costs, like let's say for selected product lines or where the cost reductions you know elsewhere maybe at the SG&A level, but just to comment on price and cost and how that played into your results this quarter. Yeah, so I'll just break it down.

Speaker Change: You know, historically we've been, you know,

Speaker Change: a little bit trying to catch up on price, you know, in an inflationary environment. And you've done a good job about that. But is there an element in the results this quarter where actually, you know, you were increasing prices at the same time you were reducing costs, like, let's say, for selected

Speaker Change: Product Lines, or were the cost reductions, you know, elsewhere, maybe at the SG&A level, but just to comment on price cost and how that played into your results this quarter.

Erik Aldag: But just to comment on price costs and how that played into your results this quarter. Yeah, so I mean, I'll just break it down in terms of the cost, um, favorability that we saw. It was split roughly, which are $8 million of favorability over last year in the bridge. Split roughly evenly between energy, raw materials, and then productivity, kind of variable conversion cost, fixed cost saving. Pricing; we price on value. So the pricing opportunities that we have, we're pricing the products based on the value that we're providing to customers. But just to take a step back, I guess, when we laid out our margin improvement target, the 15% target, we assumed 150 basis points was coming from price cost, 100 basis points was coming from fixed cost leverage, and 50 basis points was coming from growth and high margin product, the improved mix of the portfolio.

Erik C. Aldag: In terms of the cost favorability that we saw, it was split roughly, so we showed $8 million of favorability over last year in the bridge, split roughly evenly between energy, raw materials, and then productivity, kind of variable conversion costs, and fixed cost savings. Pricing, we price on value. So the pricing opportunities that we have, we're pricing the products based on the value that we're providing. But just to take a step back, I guess, when we laid out our margin improvement target, the 15% target, we assumed that 150 basis points would come from price-cost.

Speaker Change: Yeah, so I mean, I'll just break it down in terms of the cost.

Speaker Change: It was split roughly, so we showed $8 million of favorability over last year in the bridge.

Speaker Change: Split roughly evenly between energy, raw materials, and then productivity, kind of variable conversion costs, fixed cost savings.

Speaker Change: We price on value. So the pricing opportunities that we have, we're pricing the products based on the value that we're providing to customers.

Speaker Change: But just to take a step back, I guess, when we laid out our margin improvement target, the 15% target, we assumed...

Erik C. Aldag: Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies, Growth in high-margin products and the improved mix of the portfolio. And so I think in terms of what you're seeing in our margins so far, a lot of the margin improvement you've seen has come from the price cost and come from the improved mix benefit. Um... That's just to say, there's still a lot of room to go on the fixed cost leverage piece as we move forward on this. It's about leveraging our efficient fixed cost base with incremental volume. And David, I think the answer to part of your question is, yes, it's both.

Speaker Change: 150 basis points was coming from price cost.

Speaker Change: A hundred basis points was coming from fixed cost leverage, and fifty basis points was coming from...

Erik Aldag: And so I think in terms of what you're seeing in our margins so far, a lot of the margin improvement you've seen has come from the price cost and come from the improved mix benefit. That's just to say, there's still a lot of room to go on the fixed cost leverage piece as we move forward. On the piece that's about leveraging our efficient fixed cost base with incremental volume as we grow. And did I think that to also answer part of your question is yes, it's both. While we're seeing costs normalize or even capturing some cost declines, we're able to continue to price with strength.

Speaker Change: Growth in High Margin Products, The Improved Mix of the Portfolio.

Speaker Change: And so I think in terms of what you're seeing in our margins so far, a lot of the margin improvement you've seen has come from the price cost and come from the improved mix benefit.

Speaker Change: That's just to say, there's still a lot of room to go on the fixed cost leverage piece as we move forward, on the piece that's about leveraging our efficient fixed cost base with incremental volume as we grow.

Speaker Change: And David, I think to also answer part of your question is, yes, it's both. While we're seeing costs normalize or even capturing some cost declines, we're able to continue to...

Erik C. Aldag: While we're seeing costs normalize or even capturing some cost declines, we're able to continue to price with strength. And so, as you saw, we had some favorable costs, and I think net price was up $3 million. So, there are pockets where, in our base products, we are increasing prices because we're producing more value. The mix is coming from products that are higher priced, but they're also higher value, higher margin, and then the cost pieces Erik just mentioned.

Erik Aldag: And so, as you saw, we had some favorable costs, and I think net prices up $3 million. So there are pockets where, in our base products, we are increasing price because we're producing more value. The mix is coming from products that are higher price but they're also higher value, higher margin, and then the cost pieces are just mentioned. So I think, you know, we're putting that chart up; Eric's first chart to show you that where the margins coming from is exactly where we told you it would come from a year and a half ago in our targets.

Speaker Change: to price with strength.

Speaker Change: And so, as you saw, we had some favorable costs, and I think net price was up $3 million.

Speaker Change: So, there are pockets where, in our base products, we are increasing price because we're producing more value.

Speaker Change: The mix is coming from products that are higher priced, but they're also higher value, higher margin, and then the cost pieces Erik just mentioned. So I think, you know, we're putting that chart up, Erik's first chart, to show you that where the margin's coming from is exactly where we told you it would come from a year and a half ago in our targets.

Erik C. Aldag: So, I think, you know, we're putting that chart up, Erik's first chart, to show that And it's coming in at that kind of ratio as well, and as we mentioned, we think there's more to go; higher margin products continue to grow. Okay, very good. Thanks for the color there.

Erik Aldag: And it's coming in that kind of ratio as well. And, as we mentioned, we think there's more to go as these higher margin products continue to grow. Okay, very good. Thanks for the color there.

Erik C. Aldag: And it's coming in that kind of ratio as well, and as we mentioned, we think there's more to go as these higher margin products continue to grow.

Speaker Change: Okay, very good. Thanks for the color there. I did want to ask you a little bit more, if I could, about fluorosorb. You know, earlier this year, the EPA did set

Brett Argirakis: I did want to ask you a little bit more if I could about Flora Sorb. You know, earlier this year, the EPA did set content limits and timelines, you know, which I considered very important, you know, milestone. and in your prepared remarks, you did touch on, you know, activity levels, but I am kind of curious about, you know, what has happened or is there an inflection point in interactions and activity, you know, since the EPA has finalized, you know, the limits and the set of timeline. In other words, you know, is a certain subset of your potential end market moving more quickly to, you know, try to take advantage of, you know, improved, I don't know, improved technologies or, you know, it has the level of engagement.

David Cyrus Silver: I did want to ask you a little bit more, if I could, about fluorosorb. You know, earlier this year, the EPA did set content limits and timelines, which I considered very important, you know, milestones. And in your prepared remarks, you touched on, you know, activity levels, but I am kind of curious about, you know, what has happened or is there an inflection point in interactions and activity since the EPA has finalized the limits and the set of timelines? In other words, is a certain subset of your potential end market moving more quickly to try to take advantage of this?

Speaker Change: content limits and timelines, you know, which I considered very important, you know, milestones.

Speaker Change: And in your prepared remarks, you did touch on, you know, activity levels, but I am kind of curious about, you know,

Speaker Change: What has happened or is there an inflection point?

Speaker Change: in interactions and activity, you know, since the EPA has finalized, you know, the limits and the set of timeline.

Speaker Change: In other words, you know, is a certain subset of your potential end market moving more quickly to, you know, try to take advantage?

David Cyrus Silver: of, you know, improved technologies or, you know, the level of engagement. In other words, is there an inflection point since the finalization of the EPA rules, or is it more just a steady increase, you know, just related to overall interactions? So any inflection points coming from the customer side, the customer engagement side, since the finalization of the EPA rules? I'm going to pass it over to Brett. I guess, David, we've certainly seen a higher level of interest in activity. Call it, you know, you're looking for the inflection point that says when does this thing become, you know... really huge.

Speaker Change: of, you know, improved, I don't know, improved technologies or, you know, has the level of engagement, in other words, is there an inflection point since the finalization of the

Brett Argirakis: In other words, is there an inflection point since the finalization of the EPA rules, or is it more just a steady increase, you know, just related to overall interactions. So any inflection point from the customer side, customer engagement side since the finalization of the EPA rules.

Speaker Change: EPA rules or or is it more just a steady increase you know just related to overall interactions so so any inflection pointing on from the customer side customer engagement side since the finalization of the EPA rules

Brett Argirakis: Sure, let me, I'm going to pass over to Brett. I guess, David, you know, we've seen, we've seen certainly a higher level of interest in activity. You want to call out, you know, you're looking for the inflection point that says, when does this thing become, you know, really huge. I think we're on that path, path is going to take some time, but yes, we have seen some increased interest, increased activity. Let me take you through some of that color. Sure. Hi, David. Thanks for the question. David, as you know, this regulation is a five-year process, so that takes us out to 2029.

Speaker Change: Sure, let me, I'm going to pass it over to Brett. I guess, David, you know, we've seen, we've seen, certainly seen a higher level of interest in activity. I want to call out, I know you're looking for the inflection point that says, when does this thing become, you know,

Douglas T. Dietrich: I think we're on that path. The path is going to take some time. But yes, we have seen increased interest and increased activity. Let me, Brett, take you through some of that color.

Speaker Change #100: Douglas Aldag, Lydia Kopylova, Douglas Dietrich

Brett Argirakis: Sure. Hi David. Thanks for the question. David, as you know, this regulation is a five-year process. So that takes us out to 2029.

Speaker Change #100: David, as you know, this regulation,

Brett Argirakis: But absolutely, we are generating an increased level of inquiries. We've had over, I think we mentioned the last quarter, we've had over 100 pilot programs running. We are seeing acceleration with local, state, and federal agencies. In fact, we've been invited by the US EPA, and we're currently negotiating with them on a collective research and development agreement, and hope to finalize that shortly. So we're actively working with them, EPA, on five utility pilots that are being supported under the Bipartisan Infrastructure Law and EPA Technical Support Group. And there's utilities that are participating in this program, which will evaluate PFAS removal from various media, of course, GACI on exchange and our floors work.

Brett Argirakis: But absolutely, we are generating an increased level of inquiries. We've had over I think we mentioned last quarter, we've had over 100 pilot programs running. We are seeing acceleration with local, state, and federal agencies. In fact, we've been invited by the U.S. EPA, and we're currently negotiating with them on a collective research and development agreement and hope to finalize that shortly.

Brett: is a five-year process, so that takes us out to 2029. But absolutely, we are generating an increased level of inquiries.

Brett: We've had over, I think we mentioned last quarter, we've had over a hundred.

Speaker Change #101: pilot programs running.

Speaker Change #101: We are seeing acceleration with local, state, and federal agencies.

Speaker Change #101: In fact, we've been invited by the U.S. EPA, and we're currently negotiating with them on a collective research and development agreement and hope to finalize that shortly.

Brett Argirakis: We're actively working with them, and the EPA, on five utility pilots that are being supported under the bipartisan infrastructure law and the EPA technical support group. And there are utilities that are participating in this program which will evaluate PFAS removal from various media, of course, GAC, Ion Exchange, and our floors. In addition, we have four active full-scale drinking water systems running and four additional full-scale drinking water systems that are pending this year. Internationally, we've also seen an uptick in active piloting of Fluorazorb in various European countries to remove PFOS from drinking water.

Speaker Change #101: We're actively working with them, EPA, on five utility pilots.

Speaker Change #101: that are being supported under the bipartisan infrastructure law and an EPA technical support group.

Speaker Change #101: And there's utilities that are participating in this program, which will evaluate PFOS removal from various medias, of course GAC, Ion Exchange, and our floor resort.

Brett Argirakis: In addition, we have four active full-scale drinking water systems running, and four additional full-scale drinking water systems that are pending this year. Internationally, we've also seen an uptick in active piloting of floors or in various European countries to remove PFAS from drinking water. And so, based on our actual performance and piloting feedback, we're really confident in the floor's orb, and we expect this to continue to move forward. At the same point, not sure when that will happen. We're seeing it in a slower process throughout the product, and then over time, we should see revenues start to qualify.

Speaker Change #101: In addition, we have four active full-scale drinking water systems running and four additional full-scale drinking water systems that are pending this year.

Speaker Change #101: We've also seen an uptick in active piloting of fluorosorb in various European countries.

Brett Argirakis: And so based on our actual performance and piloting feedback, we're really confident in Fluorazorb, and we expect this to continue to move forward. At this point, we're not sure when that will happen. We're seeing it in a slower process, proving out the product, and then over time, we should see revenue start to climb. And then just a brief follow-up on that, Brett, but you did touch on international interest in your prepared remarks or in Doug's prepared remarks.

Speaker Change #101: to remove PFOS from drinking water. And so based on our actual performance and piloting feedback, we're really confident in the Fluorazorb, and we expect this too.

Speaker Change #101: to continue to move forward. The point, not sure when that will happen. We're seeing it in a slower process, prove out the product, and then over time we should see revenues start to decline.

Brett Argirakis: And then just a brief follow-up on that, Brett. But you know, you did touch on international interest in your prepared remarks or in Doug's prepared remarks. Is it your expectation that the content limits, you know, will be as stringent as the US, more stringent, less stringent? What is your sense to how, you know, Europe might proceed relative to how, or Europe or other geographies, how they might proceed relative to what the US EPA has done? Yes, sure. David, I'm not sure where it will end up, but I suspect it will be fairly similar to the US.

Speaker Change #101: And then just a brief follow-up on that, Brett, but, you know, you did touch on international interest in your prepared remarks, or in Doug's prepared remarks.

Brett Argirakis: Is it your expectation that the content limits, you know, will be as stringent as the US, more stringent, less stringent? What is your sense of how, you know, Europe might proceed relative to how or Europe or other geographies might proceed relative to what the US EPA has done? Yes, sure, sure. David, I'm not, I'm not sure where it will end up. But I suspect it'll be fairly similar to the US.

Speaker Change #103: Is it your expectation that the...

Speaker Change #102: content limits, you know, will be

Speaker Change #104: as stringent as the U.S., more stringent, less stringent. What is your sense of how, you know, Europe might proceed relative to how or Europe or other geographies, how they might proceed relative to what what the U.S. EPA has done?

Brett Argirakis: We're seeing it in, you know, some responses in various countries. But as far as where it ends up, I guess, at this point, Yeah, the U.S. EPA guidelines are, you know, kind of the lowest detectable limit, you know, in parts per trillion. So we'd expect that to be probably similar around the world, but, you know, nonetheless, our fluorosorbent on its own is capable of removing PFAS to those levels.

Speaker Change #105: Yes, sure, sure. David, I'm not sure where it will end up, but I suspect it will be fairly similar to the U.S.

Brett Argirakis: We're seeing it in, you know, some responses in various countries, but as far as the, you know, where it ends up, my guess at this point is similar. Yeah, the US EPA guidelines are, you know, kind of the lowest detectable limit, you know, parts per trillion. So I would expect that to be probably similar around the world, but, you know, nonetheless, our floors on its own is capable of removing PFAS to those levels. And so regardless of what the, you know, the guidelines are or the regulation is, we've got a great product to be able to take it down to non-detect or lowest detectable limit.

Speaker Change #105: We're seeing it in, you know, some responses in various countries, but as far as the, you know, where it ends up, my guess at this point is similar. Yeah, the U.S. EPA guidelines are, you know, kind of the lowest detectable limit, you know, in parts per trillion, so we'd expect that to be probably similar around the world.

Speaker Change #106: You know, nonetheless, our fluorosorb on its own is capable of removing PFAS to those levels. And so, regardless of what the, you know, the guidelines are or the, you know, the regulation is, we've got a great product to be able to take it down to non-detect or lowest detectable limits.

Douglas T. Dietrich: And so... regardless of what the guidelines are or the regulation is, we've got a great product to be able to take it down to non-detect or lowest detectability. Okay, fine. Thank you for that. And last question I have for DJ, and it would be, maybe, to just pick apart the specialty additives performance just a little bit. So, you know, I think this is the last quarter of comparing apples to oranges with the BMI revenues included in the prior year, etc.

Unknown Attendee: Okay, fine. Thank you for that.

DJ: And last question I have for DJ, and it would be maybe to just pick apart the specialty additives' performance just a little bit. So, you know, I think this is the last quarter of kind of apples to oranges with the BMI revenues included in the prior year, et cetera. But, you know, if I strip it out, there's still kind of, you know, two consecutive quarters of maybe mid-single-digit revenue growth. And I'm kind of scratching my head, and I'm wondering, you know, is that growth, is that volume related from either startups or ramp up of new satellites.

Speaker Change #108: Okay, fine. Thank you for that. And last question I have for DJ, and it would be maybe to just pick apart the specialty additives performance just a little bit.

Speaker Change #107: So, you know, I think this is the last quarter of kind of apples to oranges with the BMI revenues included in the prior year, etc.

Douglas T. Dietrich: But, you know, if I strip it out, there's still kind of, you know, two consecutive quarters of maybe mid single-digit revenue growth. And I'm kind of scratching my head, and I'm wondering, you know, is that growth, is that volume related to either startups or ramp-ups of new satellites? Is it passed through because of higher costs?

Speaker Change #107: But, you know, if I strip it out, there's still kind of, you know, two consecutive quarters of maybe mid-single-digit revenue growth. And I'm kind of scratching my head, and I'm wondering, you know, is that growth, is that volume-related from either startups or ramp-ups of new satellites?

David Cyrus Silver: Or is it actually passed through at a lower cost, and the volume growth is higher? But just, you know, how we think of the relationship between revenue growth on an underlying basis and profitability from PCC in the current environment or from satellites in the current environment. Thanks. Yeah, so thanks for the question, David. Just, Miner, of the baseline. BMI is another quarter where BMI was in our range. So the fourth quarter is when it was your turn. But to the real meat behind your question, I would say that there's two things driving that. The first is the paper and packaging satellites that have come online.

DJ: Is it pass through of higher costs or is it actually pass through a lower costs and the volume growth is higher? But just, you know, how would, you know, I'm thinking of the relationship between revenue growth on an underlying basis and profitability from PCC in the current environment or satellites in the current environment. Thanks. Yeah, so thanks for the question, David. Just a minor setting of the baseline BMI is another quarter where BMI was in our results. So, fourth quarter is when it was removed. But to the real meat behind your question, I would say that there's two things driving that.

Speaker Change #107: Is it passed through of higher costs or is it actually passed through a lower cost and the volume growth is higher? But just, you know, how we, you know, I'm thinking of the relationship between

Speaker Change #109: Revenue growth on an underlying basis and profitability from PCC in the current environment or satellites in the current environment. Thanks.

Speaker Change #110: Yeah, so thanks for the question, David. Just a minor...

Speaker Change #107: setting of the baseline. BMI is another quarter where BMI was in our results.

Speaker Change #107: So, fourth quarter is when it was removed.

Speaker Change #107: But to the real meat behind your question, I would say that there's two things driving that. The first is the paper and packaging satellites that have come online.

DJ: The first is the paper and packaging satellite that have come online. So, this year, we brought on one in China that was on top of a couple of others that came in last year. And then, as Doug had mentioned in his prepared remarks, we've got another three that are in construction. And so all of those are contributing to this. There's also one of the items that's also under construction that we announced earlier: a conversion to new yield. And while that would not show you any more volume or revenue, per se, would show an increase in margin as we convert to these more value added products.

DJ: So this year, we brought in one in China that was on top of a couple of others that came in last year, and then, as Doug had mentioned in his prepared remarks, we've got another three that are in construction, and so all of those are contributing. There's also one of the items that's also under construction that we announced earlier is a conversion to new yield, and while that would not show you,

Speaker Change #107: So this year, we brought on...

Speaker Change #107: One in China that was on top of a couple of others that came in last year, and then, as Doug had mentioned in his prepared remarks, we've got another three that are in construction, and so all of those are contributing to this.

Speaker Change #111: There's also One of the the items that's also under construction that we announced earlier is a conversion to new yield and while that would not show you

DJ: Any more volume or revenue per se would show an increase in margin as we convert to these more value-added products, so that's also helping in that regard, and I give that as an example. There are several other examples that would contribute. The other gem of performance that we've got, David, is our West Coast operation has had terrific volume. And so there's...

Speaker Change #111: Any more volume or revenue per se would show an increase in margin as we convert to these

DJ: So, that's also helping in those regards. And I give that as an example; there's several other examples that would contribute. to that. The other GM performance that we've got, David, is our West Coast operation has had terrific volume, and there's it's it's mostly through the construction industry, but it's also just in general, great performance by that plant and are on some product modifications that we've made that meet the market needs. So that's also contributing to the volume growth as well. So one more core order for the comparisons of BMI steady growth coming from the paper and packaging satellites, Lucerne Valley continues to perform quite well.

Speaker Change #111: more value-added products, so that's also helping in those regards. And I give that as an example. There's several other examples that would contribute to that.

Speaker Change #111: The other gem of performance that we've got, David, is our West Coast operation has had terrific volume.

DJ: It's mostly through the construction industry, but it's also just a great performance by that plant and some product modifications that we've made that meet the market needs. So that's also contributing to the volume growth as well. So one more quarter for the comparisons between BMI.

Speaker Change #112: and so there's it's

David Cyrus Silver: It's mostly through the construction industry, but it's also just in general great performance by that plant and some product modifications that we've made that meet the market needs.

David Cyrus Silver: So that's also contributing to the volume growth as well. So, one more quarter for the comparison to BMI.

DJ: Steady growth coming from the paper and packaging satellites, Lucerne Valley continues to perform quite well, and the pipeline for the paper business is extremely strong. So I'm hoping that I'll be saying these same sorts of things as we talk in the quarters to come.

David Cyrus Silver: Steady growth coming from the paper.

David Cyrus Silver: and Packaging Satellites, Lucerne Valley continues to perform quite well, and the pipeline for the paper business is extremely strong. So I'm hoping that I'll be saying these same sorts of things as we talk in the quarters to come.

DJ: And the pipeline for the paper business is extremely strong. So I'm hoping that I'll be saying the same sorts of things as we talk in the quarters to come. I would say it's the pipelines got a couple of dozen opportunities in it. Mix of packaging and paper, probably 30 plus percent of those opportunities are packaging. Quite a few of them are new yield opportunities. And so the long term looks pretty strong as well. That's great color. Thanks very much.

DJ: The pipeline's got a couple of dozen opportunities in it, a mix of packaging and paper, probably 30 plus percent of those opportunities are packaging. Quite a few of them are new yield opportunities, and so the long term looks pretty strong. That's great color.

David Cyrus Silver: The pipeline's got a couple of dozen opportunities in it, a mix of packaging and paper, probably 30 plus percent of those opportunities are packaging. Quite a few of them are new yield opportunities, and so the long term looks pretty strong as well.

Speaker Change #113: That's great, Culler. Thanks very much.

Speaker Change #113: certainly

Speaker Change #114: Thank you, David.

Mike Harrison: We will take our next question from Mike Harrison with C-Port Research Partners. Hey, just one more quick one for me, kind of following up on David's question on the paper PCC business. I'm just curious there. You have some contractual pricing mechanisms within that business. And there were several quarters if we go back to a couple of years ago where costs were going up a lot faster than pricing. Your margins were being negatively impacted by that. At this point, have you recaptured those higher costs and you've got margins back at a normal level. Or are you at a point right now where costs are actually moving lower while prices are stable or still moving higher such that you're getting some unusual strength in the margin performance of that paper PCC business.

Michael Joseph Harrison: Thanks very much. We will take our next question from Mike Harrison. Unknown Attendee, Kyle May, Brett Argirakis, Alex Hantman, Silke Kueck, Minerals Technologies, Hey, just one more quick one for me, kind of following up on David's question on the paper PCC business.

Speaker Change #115: We will take our next question from Mike Harrison with Seaport Research Partners.

Michael Joseph Harrison: Hey, just one more quick one for me, kind of following up on David's question on the paper PCC business. I'm just curious there, you have some contractual pricing mechanisms within that business.

Michael Joseph Harrison: I'm just curious, you have some contractual pricing mechanisms within that business, and there were several quarters, if we go back to a couple years ago, where costs were going up a lot faster than prices, and your margins were being negatively impacted by that. At this point, have you recaptured those higher costs, and you've got margins back at a normal level? Or are you at a point right now where costs are actually moving lower, while prices are stable or still moving higher, such that you're getting some unusual strength? in the margin performance of that paper PCC bill. Yeah, Mike, this is Erik.

Speaker Change #116: And there were several quarters, if we go back to a couple years ago, where costs were going up a lot faster than pricing, your margins were being negatively impacted by that.

Speaker Change #117: At this point, have you recaptured those higher costs and you've got margins back at a normal level?

Speaker Change #118: Or are you at a point right now where costs are actually moving lower while prices are stable or still moving higher such that you're getting some unusual strength in the margin performance of that paper PCC business?

Erik Aldag: Yeah, Mike, this is Eric. So no, I would say we're back to kind of normal pass through cadence. And in fact, you know, our pricing with European energy rates coming down, are our paper and packaging pricing came down a bit in the quarter. You know, in the million-dollar range. So absent that, our overall pricing would have been a little higher. But it's now more of a normal kind of cadence for the price pass-through mechanisms for that business. Yeah, a couple dynamics, Mike, that have happened, you know, historically we just reiterate here that these prices in some of our older contracts are sent on an annual basis or semi-annual basis.

Erik C. Aldag: So no, I would say we're back to a kind of normal, pass-through cadence. And in fact, you know, our pricing, with European energy rates coming down, our PCP, or our paper and packaging pricing... Came down a bit in the quarter, so absent that, our overall pricing would have been a little higher, but it's now more of a normal kind of cadence for the price path.

Speaker Change #118: Yeah, Mike, this is Erik. So, no, I would say we're back to kind of normal pass-through cadence. And, in fact,

Speaker Change #119: Our pricing, with European energy rates coming down, our PCP, or our paper and packaging pricing,

Speaker Change #120: came down a bit in the quarter, you know, in the million dollar range. So, absent that, our overall pricing would have been a little higher.

Erik C. Aldag: Yeah, a couple of dynamics, Mike, that have happened historically. I reiterate here that these prices in some of our older contracts are set on an annual basis or semi-annual basis. As they've renewed over the past several years, we've changed that to a tighter alignment with those costs, whether it's a quarter and sometimes a month. We saw some of that delay on the way up, and we had some of that lag on the way down, but as Erik mentioned, we're largely through that.

Speaker Change #120: for the price pass-through mechanisms for that business.

Speaker Change #120: We just reiterate here that these prices and some of our older contracts are set on an annual basis or semi-annual basis. As they've renewed over the past several years, we've changed that to a tighter alignment with those costs, whether it's a quarter and sometimes a month.

Erik Aldag: As they've renewed over the past several years, we've changed that to a tighter alignment with those costs, whether it's a quarter, and sometimes a month. We saw some of that delay on the way up, and we had some of that lag on the way down better there I've mentioned. We're largely through that. I think now there's maybe some regional ups and downs that are happening, but that's, it's a normal cadence right now, and I think you're seeing what's really reflecting the normal margins of this business.

Erik C. Aldag: We saw some of that delay on the way up, and we had some of that lag on the way down. But as Erik mentioned, we're largely through that. I think now there's maybe some regional ups and downs that are happening, but it's a normal cadence right now. And I think you're seeing what's really reflecting the normal margins of this business.

Erik C. Aldag: I think now there may be some regional ups and downs that are happening, but it's a normal cadence right now. And I think you're seeing what's really reflecting the normal margins of this business. That said, we have some new products coming out, like New Yield, and we have some packaging, and those can tend to generate higher margins, so we have some upside there.

Erik C. Aldag: All right, very helpful. Thanks very much. Thanks, Mike. At this time, we do not have any further questions. I would like to turn the call back. Thank you for any closing remarks. Everyone, thank you very much for joining the call today. We apologize for any technical issues it seems like you may have had. What we will do is make sure that there is a very clear replay for you posted on our website and make sure that that transcript reflects that clarity. Thank you very much for joining us today, and we'll talk to you again in three months. This concludes today's call. Thank you for your participation. You may now disconnect.

Unknown Attendee: That said, we have some new products coming out like New Year's. We've got some packaging, and those contend to generate higher margins, so we have some upside there in the future. All right, very helpful. Thanks very much. Thanks, Mike. At this time, we do not have any further questions.

Erik C. Aldag: That said, we have some new products coming out like new yield, we've got some packaging and those can tend to generate higher margins, so we have some upside there in the future.

Speaker Change #121: All right. Very helpful.

Michael Joseph Harrison: Thanks, Mike.

Doug Dietrich: I would like to turn the call back to Mr. Dietrich for any closing remarks. Everyone, thank you very much for joining the call today. We apologize for any technical issues that caused for some of you.

Speaker Change #122: At this time we do not have any further questions. I would like to turn the call back to Mr. Dietrich for any closing remarks.

Douglas T. Dietrich: Everyone, thank you very much for joining the call today. We apologize for any technical issues it caused for some of you, sounds like. What we will do is make sure that there's a very clear replay for you posted on our website and make sure that that transcript reflects that clarity. Thank you very much for joining today and we'll talk to you again in three months.

Doug Dietrich: Sounds like what we will do is make sure that there's a very clear replay for you posted on our website and make sure that that transcript reflects that clarity. Thank you very much for joining today, and we'll talk to you again in three months.

Unknown Attendee: This concludes today's call. Thank you for your participation.

Unknown Attendee: You may now disconnect.

Speaker Change #123: This concludes today's call. Thank you for your participation. You may now disconnect.