Q4 2024 Ecovyst Inc Earnings Call
Your patience please continue to standby.
Please silence your cell phones and laptops during the presentation.
[music].
If you should need audio assistance during todays program. Please press star two.
[music].
Racer: Good morning, My name is racer and I'll be your conference operator today welcome.
Racer: To the <unk> fourth quarter 2024 earnings call and webcast. Please note today's call is being recorded and should run approximately one hour.
Racer: Currently all participants have been placed in a listen only mode to prevent any background noise.
Speaker Change: After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question at that time. Please press star one on your telephone keypad. If you watch your mute yourself from the queue. Please press star two when posing your questions. We ask that you. Please pick up your handset to allow for optimal sound quality.
Racer: Lastly, if you should need operator assistance, Please press star zero.
Racer: I would now like to hand, the conference over to gene Shiels director of Investor Relations. Please go ahead.
Gene Shiels: Thank you operator, good morning, and welcome to the <unk> fourth quarter 2024 earnings call.
Kurt Bidding: With me on the call. This morning are Kurt bidding <unk>, Chief Executive Officer, and Mike <unk>, Chief Financial Officer.
Gene Shiels: Following our prepared remarks, we'll take your questions.
Gene Shiels: Please note that some of the information shared today is forward looking information, including information about the company's financial and operating performance strategies are anticipated end use demand trends and our 2025 financial outlook.
Gene Shiels: Information is subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially.
Gene Shiels: Any forward looking information shared today speaks only as of this date. These risks are discussed in the company's filings with the SEC.
Gene Shiels: Reconciliations of non-GAAP financial measures mentioned in today's call with their corresponding GAAP measures can be found in our earnings release and presentation materials posted on the investors section of our website at <unk> Dot com.
Curt Bidding: I'll now turn the call over to Curt bidding.
Curt Bidding: Thank you gene and good morning.
We are pleased with our results for the fourth quarter of 2024, while global macroeconomic fundamentals continued to present challenges in the fourth quarter, we delivered financial results in line with our expectations further demonstrating the resilience of our core and industrial businesses.
Curt Bidding: I'm also extremely proud of my <unk> colleagues for producing more than 3 million tonnes of product without a single Osha recordable injury in 2024.
Curt Bidding: This was the best performance in <unk> history, and is a testament to equal this dedication to producing and delivering products in a safe and responsible manner.
Curt Bidding: Our eco services segment continued to deliver solid results with adjusted EBITDA up nearly 12% compared to the year ago quarter, driven by increased sales volume and favorable contract pricing in.
Curt Bidding: In addition sales for advanced silicone increased 5% driven by higher sales of advanced silicon used in the production of polyethylene.
Curt Bidding: However, and as anticipated sales for the Zelus joint venture were lower principally due to the timing of hydrocracking catalyst sales.
Curt Bidding: Overall for the fourth quarter of 2024, we delivered adjusted EBITDA of $76 million up eight 7% compared to the fourth quarter of 2023.
Curt Bidding: For the year as a whole strong cash generation provided for a net debt leverage ratio of three times at the year end down from three two times on a trailing 12 month basis at September 30th 2024.
Curt Bidding: 2024 was also a year of continued progress in executing on our strategic and operational objectives. During the year, our investments in reliability initiatives and our eco services segment provided for improved operational efficiency supporting volume growth.
Curt Bidding: And we anticipate realizing further benefits from these reliability initiatives in 2025.
Curt Bidding: In addition, we continued to position <unk> for the future with capacity increases underway to support our core and industrial businesses as well as for emerging technologies.
Curt Bidding: The capacity expansion for our <unk> 32 business is underway and we expect to complete the polyethylene catalyst capacity expansion at our Kansas City site late this year.
Curt Bidding: This capacity increase backed by customer commitments will support expanded customer demand in 2026 and 2027.
Curt Bidding: Lastly, we continue to collaborate with industry leaders to further refine technologies to enable advanced plastics recycling and to serve anticipated growth associated with bio catalysis and carbon capture processes.
Curt Bidding: As we turn to slide six I'll provide an update on our near term demand outlook.
Curt Bidding: We maintain a cautious posture of near term demand in certain end users due to ongoing uncertainty in the global macroeconomic environment.
Curt Bidding: However, we believe that most of the segments that we serve are underpinned by strong demand trends. So our long term outlook remains positive.
Curt Bidding: And Eco services, we project continued positive momentum for regeneration services in 2025 with stable gasoline demand and high alkylation unit utilization are.
Curt Bidding: Our refining customers are planning more maintenance activities in early 2025 as compared to 2024.
Curt Bidding: As a quick comparison six of our refining customers will execute turnarounds in the first half as compared to just two in the first half of 2024.
Curt Bidding: Eco services in turn will execute four of its five turnarounds in the first half of 2025 to coincide with the customer turnaround activity.
Curt Bidding: For Virgin sulfuric acid the mining sector continues to show robust growth driven by the increased use of copper and data centers and energy infrastructure.
Curt Bidding: In terms of Virgin sulfuric acid used in the production of nylon precursors, we foresee near term uncertainty due to global industrial demand fluctuations and the ongoing surplus capacity in Asia, which may affect sales in the first half of the year How's.
Curt Bidding: However, we believe demand will strengthen in the second half.
Curt Bidding: Overall, we project that demand fundamentals for Virgin asset sales will be firm and will improve in the second half supported by incremental customer demand for new mining projects expansions and lead acid battery plants and higher anticipated demand for nylon precursors.
Curt Bidding: Demand for our <unk> catalysts activation performed at <unk> 32 also is projected to increase due to is it its effectiveness of sulfides, the catalyst and the HSE risk mitigation. It offers the customers versus other technologies.
Curt Bidding: Moving to our M. A C segment 2024 was a good year for hydrocracking catalyst sales, albeit not a peak year as was the case in 2023.
Curt Bidding: 2025 looks to be a stronger year for hydrocracking catalyst change outs. In addition, we continue to see heightened interest in our market technology, which allows enhanced flexibility and improve distillate yields for our refining customers.
As a result, we currently project sales of hydrocracking catalyst to be up this year compared to 2024.
Curt Bidding: As these sales typically have long lead times, our expectation for increased sales. This year is based upon orders in hand.
Curt Bidding: We believe the near term outlook for catalyst sales into emission control applications will remain subdued.
Curt Bidding: Four year deferral for implementation of Euro seven for heavy duty diesel vehicles uncertainty around EPA 2027, and challenging macroeconomic conditions have adversely impacted customer demand.
Curt Bidding: For advanced silica is the global outlook for polyethylene demand remained subdued and this is compounded by excess production capacity, particularly in Asia.
Curt Bidding: In the U S and middle East, where we have our highest polyethylene exposure producers are benefiting from cost advantaged feedstocks and energy costs, which translates into higher overall capacity utilization rates for these regions, we believe that our customer preference for our custom catalysts design capabilities will.
Curt Bidding: <unk> to allow our sales growth to outpace overall global polyethylene demand growth, we look forward to the completion of the Kansas City capacity expansion, which will support the planned ramp up of our customers' capacity expansions in 2026 and 2027.
Curt Bidding: Turning to our emerging businesses, we continue to believe the longer term outlook for catalyst sales supporting the production of sustainable fuels remains positive.
Curt Bidding: We expect demand recovery in sales supporting renewable diesel production in the next 12 months to 18 months <unk>.
Curt Bidding: Concerning the increase in the production of sustainable aviation fuel.
Curt Bidding: The European Union has now implemented the 2% blending mandate. Additionally, major airlines are maintaining their 2030 SaaS usage targets. We also continued to see favorable trends for emerging applications that utilize advanced silica as such as bio catalysis and carbon capture through.
Curt Bidding: 2030, the global enzyme market is forecasted to grow at a compounded annual growth rate of approximately 14% and the value of carbon capture utilization and storage is anticipated to increase six fold from approximately $6 billion in 2022 to roughly $35 billion by <unk>.
Curt Bidding: <unk> thousand 30.
Curt Bidding: We continue to see strong customer engagement in these areas as we work with leaders and innovators product qualification.
Curt Bidding: As you hopefully have seen earlier this month, we announced a strategic partnership with Cairo vision, a leading innovator of biocatalyst based technologies for collaboration on enzyme immobilization applications.
Curt Bidding: And in the Zelus joint venture, our Opal Infinity Infinity family of catalysts has been proven to significantly reduce the thermal intensity required in the production of pyrolysis oil and enable the production of higher quality and higher value pyrolysis oil for customers.
Curt Bidding: We believe that projects for advanced recycling remain broadly on track and accordingly, we anticipate that <unk> sales will follow and commence in late 2025 through early 2026.
Curt Bidding: I'll now turn the call over to Mike for a more detailed discussion of our financial results for the fourth quarter.
Speaker Change: Thank you Kurt good morning, as Kurt mentioned I will begin with a more detailed review of our fourth quarter and full year financial results higher volume and favorable contract pricing regeneration services, along with increased demand for advanced materials used for the production of polyethylene.
Speaker Change: Drove the 5% year over year increase in our ecommerce sales in the fourth quarter.
Speaker Change: Within our <unk> joint venture the expected timing of hydrocracking catalyst orders led to lower sales compared to the prior year.
Speaker Change: During the fourth quarter, we recognized a noncash $65 million impairment charge.
Speaker Change: On our investment and our <unk> joint venture driving the net loss in the quarter the.
Speaker Change: The investment in our zeal is joint venture with stepped up as part of the business combination when PQ and Eco services merged in 2016, this impairment charge reduced a portion of that step up.
Speaker Change: The reduction in the carrying value of our investment to its estimated fair value was primarily due to the demand outlook for catalyst materials used in emission control applications and the production of sustainable fuels.
Speaker Change: Adjusted EBITDA in the fourth quarter was $76 million up nearly 9% year over year, reflecting higher volume and favorable contract pricing and eco services and higher sales of advanced silica is used for the production of polyethylene par.
Speaker Change: Partially offset by the timing of hydrocracking catalyst sales within the <unk> joint venture.
Speaker Change: For the full year sales were up 2% year over year. This was primarily driven by higher volume and favorable contract pricing, partially offset by the impact of lower pricing from the pass through of lower cost and eco services adverse.
Speaker Change: Advanced Silicon sales were flat as higher sales for finished polyethylene catalyst and niche custom catalyst were offset by lower sales of polyethylene catalyst supports.
Speaker Change: And sales within our Zelus joint venture were down year over year, driven by the lower volume of hydrocracking catalyst related to the timing of customer change outs as well as the decreased demand for catalyst materials used in emission control applications in the production of sustainable fuels.
Speaker Change: <unk> adjusted EBITDA for 2024 was $238 million compared to $260 million for 2023.
Speaker Change: The lower adjusted EBITDA was primarily driven by the lower sales volume and the Zelus joint venture.
Speaker Change: Moving to the next slide I'll highlight the major components of the change in adjusted EBITDA for the fourth quarter.
Speaker Change: The price to variable cost ratio for the fourth quarter was positive driven largely by the strong contractual pricing and regeneration services.
Speaker Change: Our fourth quarter sales volume was up an ecosystem and advanced silica as this was more than offset by the lower sales volume and <unk> joint venture.
Speaker Change: The balance of the change in adjusted EBITDA relates to lower turnaround costs, and eco services and the benefit of cost reductions and the Zelus joint venture.
Speaker Change: I'll now turn to the fourth quarter segment highlights starting with eco services.
Speaker Change: Sales of $150 million were up 5% over the prior year quarter, driven by higher volume and favorable contract pricing and regeneration services.
Speaker Change: Adjusted EBITDA was $54 million up nearly 12%.
Speaker Change: Selecting the higher sales volume and pricing.
Speaker Change: <unk> fixed cost absorption associated with the timing of inventory build.
Speaker Change: And lower turnaround costs compared to the fourth quarter of 2023.
Speaker Change: The adjusted EBITDA margin for the fourth quarter was 36% up 210 basis points compared to the year ago quarter.
Speaker Change: For our advanced materials and catalyst segment sales for advanced silicone <unk> was $33 million in the fourth quarter up 5% year over year on higher sales of advanced silica is used for the production of polyethylene as well as higher sales of niche custom catalyst.
Speaker Change: Sales from the Zelus joint venture were down principally due to the timing of hydrocracking catalyst sales.
Speaker Change: Adjusted EBITDA for the advanced materials and catalyst segment was $28 million.
Speaker Change: Modestly compared to the fourth quarter of 2023 as higher sales of advanced silica is favorable absorption of fixed cost and the benefit of cost reduction actions taken in 2024, largely offset the lower overall sales volume within the Atlas joint venture.
Speaker Change: As we move to our discussion on cash and leverage cash generation remained positive in the fourth quarter, leading to a full year adjusted free cash flow of over $85 million up $13 million compared to 2023.
Speaker Change: The higher cash generation was driven by higher dividends from the Zelus joint venture and favorable changes in working capital.
Speaker Change: Partially offset by higher capital expenditures, specifically for the ongoing growth capital projects for expansion of polyethylene catalyst capacity in our Kansas City facility and the <unk> 32 catalyst activation expansion.
Speaker Change: We ended the year with approximately $146 million of cash and our available liquidity was $221 million, including availability under our ABL facility.
Speaker Change: In light of our positive cash generation, our net debt leverage ratio was three times at year end.
Speaker Change: With continued positive cash generation expected in 2025, and assuming no discretionary uses of cash we anticipate making significant progress towards our target net debt leverage ratio of two to two five times.
Speaker Change: I will conclude with a discussion on our outlook for 2025.
Speaker Change: As Curt noted, although we foresee relative stability in many of our core businesses as we move into 2025, we remain cautious about the near term outlook for global macroeconomic activity.
Speaker Change: This cautious outlook is factored into our guidance for the year.
For 2025, we expect our GAAP sales to be in the range of $755 to $815 million.
Speaker Change: Relative to 2024. This outlook includes an estimated $35 million of higher anticipated pricing related to the pass through effect of higher sulfur costs in 2025.
Speaker Change: Sales for our proportionate, 50% share in the Zelus joint venture.
Speaker Change: Projected to be in the $115 million to $130 million range.
Speaker Change: As a result, we expect total sales, including our proportionate share of the Zelus joint venture sales to be $870 million to $945 million.
Speaker Change: We anticipate growth for eco services in 2025% driven by favorable contract pricing and higher volume.
Speaker Change: Excluding the expected $35 million sulfur cost pass through impact.
Speaker Change: Our anticipated base growth would be in the mid single digits.
Speaker Change: However, taking into consideration the pass through effect of the higher sulfur costs. We project sales for eco services to be up on a low double digit percentage basis.
Speaker Change: For advanced materials and catalyst, we expect our sales of polyethylene catalysts to continue to outpace global demand growth and we believe that there'll be continued traction and higher sales of advanced silicon for bio catalysis applications. This year.
Speaker Change: As a result, we project advanced silicon sales to be up in the low double digit percentage basis compared to 2024.
Speaker Change: Within the Zelus joint venture, we expect a stronger year for hydrocracking catalyst sales.
Speaker Change: Not at the peak level, we saw in 2023.
Speaker Change: For catalyst sales into sustainable fuel applications, we remain cautious and projected sales growth to be flat to slightly up in 2025.
Speaker Change: Overall, we anticipate the <unk> joint venture sales to be up on a mid single digit percentage basis.
Speaker Change: We.
Speaker Change: Dissipate adjusted EBITDA to be in the range of $238 million to $258 million, which is up 4% at the midpoint of the range compared to 2024.
Speaker Change: In terms of segment results, we anticipate ecocide. This is adjusted EBITDA to be up on a mid single digit percentage basis within a range of $204 million to $220 million.
Speaker Change: For advanced materials and catalyst, we project adjusted EBITDA to be up on a mid single digit percentage basis in the range of 65% to $71 million.
Speaker Change: Noting as we have previously discussed.
Speaker Change: Sales of certain products within the advanced materials and catalyst segment can be lumpy as they are often large event driven sales.
Speaker Change: We also expect our earnings to be more heavily weighted towards the second half of the year similar to last year, driven by the timing of hydrocracking and custom specialty catalyst sales.
Speaker Change: We expect corporate cost to be approximately $32 million in 2025.
Speaker Change: Capital expenditures are anticipated to be in the range of $80 million to $90 million for the year, reflecting incremental investment. This year as we expect to complete the polyethylene catalyst capacity expansion at our Kansas City site by year end.
Speaker Change: And our ongoing activity to expand our catalyst activation capacity at <unk> 32.
Speaker Change: As a result, we project.
Speaker Change: Adjusted free cash flow for 2025 to be in the range of $60 million to $80 million.
Speaker Change: For interest expense considering the interest rate caps, we have in place covering approximately 75% of our exposure as well as the recent repricing of our term loan.
Speaker Change: We expect interest expense to be in the range of $47 million to $53 million for 2025.
Speaker Change: In terms of specific guidance for the first quarter of 2025, we project first quarter adjusted EBITDA for eco services to be between 29 and $34 million.
While the first quarter is historically, the lowest adjusted EBITDA quarter.
Speaker Change: The lower than typical adjusted EBIT for the first quarter of 2025 is expected to be driven by the timing of turnaround spending.
Speaker Change: Planned customer turnarounds and the absorption of fixed costs.
Speaker Change: We plan to execute more than 50% of our annualized turnaround cost in the first quarter as we conduct maintenance to coincide with customer turnarounds.
Speaker Change: We also anticipate lower volumes within Virgin sulfuric acid and treatment services in the first quarter, which are expected to be stronger in the second part of the year as we complete our turnarounds taking advantage of the anticipated higher Incrementals superior asset demand that Kirk mentioned earlier and also through the timing.
Speaker Change: Of contractual pass through of certain costs, including energy and other index costs.
Speaker Change: For advanced materials and catalyst similar to the prior year, we expect a lighter first quarter based on customer order timing.
Speaker Change: More typical second and third quarters, and a strong fourth quarter driven by the time of certain product sales within this segment, particularly around hydrocracking and custom specialty catalysts.
Speaker Change: Therefore, we project adjusted EBITDA to be between three and $8 million for the first quarter.
Speaker Change: Assuming unallocated corporate expense of approximately $8 million.
Speaker Change: We expect consolidated adjusted EBITDA for the first quarter to be between $24 million and $34 million.
I'll now turn the call back to Kurt for some closing remarks, Thank you Mike.
Speaker Change: In retrospect, the global macroeconomic environment remained challenging in 2024, and we experienced a revision of our near term expectations for our sales into the production of sustainable fuels How's.
Speaker Change: However, many of our core and industrial businesses continued to exhibit resilience performing well in 2024 our.
Speaker Change: Our regeneration services business delivered on its growth objectives, and we saw stability in many of our industrial businesses, including Virgin sulfuric acid and our sales of advanced silicon into the production of polyethylene.
Speaker Change: Moreover, we continued to make significant progress in the advancement of key technologies that we believe will provide for a compelling future growth. These.
Speaker Change: These include technologies that support the production of sustainable aviation fuel catalysts that significantly improve the efficiency of advanced recycling and technologies that expand bio catalysis and carbon capture applications.
Speaker Change: I want to thank all of my <unk> colleagues for their significant contributions in 2024 and for their continued enthusiasm and engagement as we continue to deliver on our growth and strategic objectives in 2025 and beyond.
Speaker Change: Eco vis remains intently focused on executing our strategy that we laid out in November of 2023 at our Investor day.
Speaker Change: We are focused on capturing growth through enhanced reliability, debottlenecking and organic expansions across our core and industrial businesses and leaning into the favorable trends in the emerging segments.
Speaker Change: Earlier, I spoke about our investments and enthusiasm in our emerging applications, where we have created dedicated marketing teams to work with our innovative customers and resource pilot production capabilities for bio catalysis and advanced recycling in the last 12 months.
Speaker Change: We also continue to scan for inorganic opportunities that could enable volume growth in our core or adjacent end uses.
Speaker Change: Or add technologies that enhance our emerging product portfolio.
Speaker Change: In December we announced that the eco vis board of Directors has launched a strategic review of our advanced materials and catalyst business and we currently expect to complete this review in the middle of 2025.
Speaker Change: The company doesn't intend to make any further public comments regarding the strategic review until it has been completed or the company determines that disclosure is required or beneficial.
Speaker Change: As we move into 2025, the macroeconomic environment and potential impact of geopolitical factors remain uncertain.
Speaker Change: Broad implementation of tariffs could result in disruption throughout global supply chains.
Speaker Change: However, we remain confident in the resilient performance of our core and industrial businesses and we are planning for growth in 2025, and we will maintain our focus on capturing future growth opportunities as we remain committed to delivering compelling value for our shareholders.
Speaker Change: At this time I will ask the operator to open the line for questions.
Speaker Change: Okay.
Speaker Change: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad, you may remove yourself from the queue at any time by pressing star two.
Speaker Change: Once again to ask a question that is star one.
Operator: We'll take our first question from Patrick Cunningham with Citi. Your line is open.
Patrick Cunningham: Hey, good morning.
Patrick Cunningham: Just maybe first starting off on the <unk> Guide can you help us frame. What this means from a volume decline perspective across each business how much financial impact do you have just from the cost of your own turnarounds and is there anything to call out in terms of sort of the timing of price cost on the Virgin sulfuric.
Patrick Cunningham: Side, which is maybe a further drag here.
Patrick Cunningham: Yes.
Patrick Cunningham: Yes. Good morning, Thanks for the question.
Speaker Change: From a perspective of size the turnaround costs that were incurring or a few million dollars of an impact.
Speaker Change: The turnaround costs from our customers would be another few million dollars.
Speaker Change: And then in addition.
Curt Bidding: The the rest of the components are made up of the timing of some of our fixed cost absorption related to our inventory timing as well as the timing on Virgin sulfuric acid that Curt had mentioned earlier.
Speaker Change: Understood very helpful. And then just on some of the near term weakness you cited specifically on polyethylene demands.
Speaker Change: I think we're hearing somewhat stable demand increases for <unk> in North America I'm, just trying to understand is this things not improving as much as you see in the overall market from low levels is there anything to call out specifically in terms of your order patterns.
Yes, I think Patrick.
Speaker Change: Patrick I think the what we see is that there is still obviously some overcapacity in certain markets like Asia I think in our case, though we would agree with what you said about North America and middle Eastern customers.
Speaker Change: Customers benefiting from their energy position in terms of our order timing, it's really more just order timing right. So our customers did in fourth quarter.
Speaker Change: Built up stock in first quarter, it's just going to be a lighter ordering pattern and we expect that to pick up in the second half. So we do as Mike said on the call. We do expect our advanced silicones business to be up year over year.
Speaker Change: Yeah.
Very helpful. Thank you.
Speaker Change: We'll take our next question from Aleksey <unk> with Keybanc. Your line is open.
Aleksey: Thanks, Good morning, everyone.
Aleksey: I appreciate you providing a lot of details on Q1 guidance, but sort of <unk>.
Speaker Change: Stepping back.
Speaker Change: Looking at overall EBITDA as you would expect in Q1 I think this would be a record low for the call.
Speaker Change: Company as far as my model goes probably 2016 or so.
Speaker Change: The total company and for each of the segments.
Speaker Change: Yeah.
Speaker Change: Is there anything from a broader historical perspective that you think led to this result any of your businesses are just not as good as they used to be perhaps or just the severity of these temporary issues.
Speaker Change: Unusual.
Speaker Change: It will be helpful to maybe quantify them in that case.
Speaker Change: Yes, I'll take the first part and maybe just talk about the.
Speaker Change: The qualitative aspects of the business so I think.
Speaker Change: From a regeneration standpoint, there is we have turnarounds going on in our plants.
Speaker Change: Broader first half perspective, I mean, we're expecting to take four of our five turnarounds in the in the first half of the year to really coincide with the stepped up refinery turnaround activity, which is which is quite normal at just this year that there happens to be a greater amount, we do expect that regeneration.
Speaker Change: Is going to be good this year.
Speaker Change: The factors that surround that business remained positive in terms of gasoline and more importantly, Appalachian unit utilization.
Speaker Change: Virgin sulfuric acid, we expect a good year and Virgin sulfuric acid, although the ramp is going to be more in the second half and thats somewhat related as well too.
Speaker Change: Production on our side right. When we have our we have again four of our five turnarounds happening in the beginning of the year I will note, we do have new customer demand starting in the second half as well with the new mining project expansions as battery plants that are going to kick in as well as our nylon precursor segment is forecasting higher orders for.
Speaker Change: For their business in the second half of the year, which will spillover to higher demand for us. So in terms of the bones of the business.
Speaker Change: Remained solid and is more really timing a timing issue. So Mike you can comment on some of the financials.
Speaker Change: I'd just echo Curt's comment I mean this is not this is not an unexpected or anything that we feel concerned about its a lot of timing that we just went through on the eco services side and similarly for the advanced materials and catalyst side that business as we've talked about.
Speaker Change: Every year and every quarter is very lumpy right. There are a lot of event driven.
Speaker Change: Types of orders, whether its the hydrocracking catalyst or the specialty custom catalyst and its just the timing of those orders when they come through so it's not a concern for us. It is definitely a low quarter alexi from a historic standpoint, but again, if you go back and look historically you've seen.
Speaker Change: Seen some big movements quarter over quarter, including last year, when we did have.
Speaker Change: A heavier second half for AAM and see and then we deliver that right at the end of the year right. So we're we're confident that we're still going to be able to deliver our results that we provided this Q1 is purely a timing aspect for a variety of the different items that we talked about cost side on <unk>.
Speaker Change: So primarily along with some timing for the customers and then the order book.
Speaker Change: The AMC business.
Speaker Change: Thanks, a lot and as a follow up thank.
Speaker Change: I think you're guiding to about $35 million of sorry, 45 million of net sales increase including the pass through excluding the pass through EBITDA is projected to go up $10 million just strikes me as somewhat low incremental margins given how high your margins typically.
Speaker Change: Could you just give us a call.
Speaker Change: Maybe walk for for that sales versus EBITDA bridge in your guidance.
Speaker Change: Yeah, I think the first point about the sulfur impact right. So that is a <unk>.
Speaker Change: Margin.
Speaker Change: Impact from a negative standpoint, but again the sulfur pass through does not impact our EBIT just inflates. The topline. So that is certainly a component of it there's also a mix component.
Speaker Change: Marilee in the AMC business, where you do have.
Speaker Change: As some of our sales for hydrocracking in particular are not as.
Speaker Change: Highly profitable as a sustainable fuels that we've talked about in the past that there is a dynamic from a mixed standpoint as well we did talk about higher costs overall for FMC turnaround costs, just as they start to go up however, we are increasing our sales pricing as well.
Speaker Change: Commiserate FERC for that.
Speaker Change: <unk>.
Speaker Change: That difference so it's a little bit of the sulfur impact and then the mix effect as well.
Speaker Change: Yes.
Speaker Change: Thanks, a lot.
Speaker Change: Our next question comes from David Begleiter with Deutsche Bank. Your line is open.
David Begleiter: Thank you good morning.
David Begleiter: Kurt on the strategic review can you at least discuss why the board decided now to Susan.
David Begleiter: Through this review.
David Begleiter: This business.
David Begleiter: Yes, well I think.
David Begleiter: Obviously the we.
David Begleiter: We view the AMC business as it's a great business, it's got a lot of.
David Begleiter: Really good core businesses around it.
Hydrocracking polyethylene as well as.
David Begleiter: The emerging technologies that we walked through bio catalysis, and such and the board is really just looking to see how we can maximize shareholder value and are there alternate ways to do that other than it's than its current setup right. So that's really what we're looking at is we view that business as a high.
David Begleiter: Value business stay.
David Begleiter: Stable in terms of its core business as well so great emerging opportunities and is there a way to.
David Begleiter: Further create shareholder value with a different setup.
David Begleiter: Understood and just on a full year guide at the low end.
David Begleiter: Forecasting no growth.
David Begleiter: So what would need to have been for <unk> is not to grow EBITDA in 2025.
David Begleiter: Yes, I think that's some of that is always our our order timing on the catalyst side, David as you know we have large hydrocracking orders and large other custom catalyst orders that can be some case north of $10 million per order type things. So some of it's based on the timing of that so not necessary.
David Begleiter: Our miss on the actual capturing of the sale, but the timing of where it lands and the other part of the guide is really is there any economic disruption that comes from the current environment that we live in today in terms of the uncertainty.
David Begleiter: Surrounding tariffs or other geopolitical issues that are that are floating out there, but we look at if you look at the base core of the business is again eco services regeneration, we expect to be strong, albeit the first half is lighter just because of the customer turnaround activity, which is just they have to take turnarounds at <unk>.
David Begleiter: The business Virgin acid, we expect to be firm. This year I will point out of the question came up earlier pricing is not a drag on Virgin acid right now the market is.
David Begleiter: As generally.
David Begleiter: <unk> has remained solid and then our core businesses again with the catalyst across polyethylene and hydrocracking lot of Thats really timing based.
David Begleiter: Thank you.
Speaker Change: Our next question comes from Amit <unk> with BW with financial your line is open.
Hi.
Speaker Change: Alright, I'm going to beat this dead horse here, but could.
Speaker Change: Could you just talk about this timing issue specific just to the zeal is really not hydrocracking why has this continued to be the case. The thing. This is now like the second or third quarter.
Speaker Change: Bringing this up.
Speaker Change: Yes, good morning, good morning.
Speaker Change: I would probably say that as we bring it up a lot.
Speaker Change: The timing around the <unk> joint venture and the customer orders there.
Speaker Change: It's been in existence since we've since I've been with the company a long time ago. So.
Speaker Change: The orders are often for hydrocracking in particular are usually.
Speaker Change: Three to four years from when they do a fixed bed change out in.
Speaker Change: And those timing of when those orders come through Ken can really vary in a couple of different months right. So you can have a large order that could be $15 million to $20 million that hits in December 30, <unk> go to a January one and a lot of it has to do with the timing of when they're shipped and delivered to the <unk>.
Speaker Change: Customer.
Speaker Change: Same thing for the specialty catalysts those are very lumpy event driven businesses. So they could have.
Speaker Change: Orders that happen every four five even six years with some of the different customers, sometimes it's a timing item within the customer order.
Speaker Change: Booking and other times, it's just when those orders are placed every few years.
Speaker Change: Okay and then.
Speaker Change: As far as your emerging technologies goes you've talked about different.
Speaker Change: Products <unk> solutions being available at this time.
Right around 25 is that still the case for this year.
Speaker Change: Are you still expecting sales from those emerging technologies this year.
Speaker Change: Yes, yes, we as we talked about in the call. Yes, we are.
Speaker Change: <unk> catalysis has.
Seemingly having some good uptake with customer interest in terms of that.
Speaker Change: Biocatalyst as an industry is growing very very rapidly.
Speaker Change: We're getting great feedback from customers testing our products in terms of the silicon supports for those so we have good confidence in that advanced recycling is the other one I'll point you to where we've had some really good feedback from customer trials. Those advance recycling plants are in process of being constructed and we expect.
Speaker Change: Those sales really kind of start hitting in late 2025, and enter 2026 and continuing thereafter as those as those plants get built so we're happy and largely on track, where we think those emerging technologies and we're very pleased with the feedback that we're getting from the customers who are pilot testing the products.
Speaker Change: Okay. Thank you.
Speaker Change: Our next question comes from Laurence Alexander with Jefferies. Your line is open.
Good morning.
Firstly on AMC can you give a sense for what percentage of sales or EBITDA is tied to the heavy duty and sustainable jet fuel categories.
Speaker Change: Because those are like what you call out as being a subpar longer term outlooks.
Speaker Change: Yes, and we haven't really given any specific.
Speaker Change: Ranges of the size of that business.
Again part of it has to do with the timing of the orders right. The hydrocracking is the largest component of the <unk> joint venture.
Speaker Change: The second one really is probably the custom in specialty catalysts, which can vary year on year, and then really sustainable fuels or.
Speaker Change: The renewable diesel as well as the emission control is really the next the next size one so.
Speaker Change: We've talked about the sustainable fuels before being around 10%.
Speaker Change: The overall agency sales so.
Speaker Change: Roughly it's probably in that range or a little below that just given the decline from last year.
Speaker Change: I think we expect just in terms of sustainable fuels.
Speaker Change: No.
Speaker Change: On the call. We had said we do expect it to be flattish to potentially slightly up this year. So as opposed to last year, where it obviously had a had a had a steeper decline in long term we have.
Speaker Change: We believe that that business will continue to grow maybe not at the same rate of change as it did when it started in 2019, because there's still a need to decarbonize heavy duty diesel vehicles, and then sustainable aviation fuel has you have airlines in the U S. That's still have 10.
Speaker Change: <unk>.
Speaker Change: Blending targets for 2030 as well as the EU that has in 2025 now has a blending mandate in place of up 2%. So there still is a need for those fuels, there and we expect them.
Speaker Change: To grow long term.
Speaker Change: Yeah.
Speaker Change: And can you guys give.
Speaker Change: To give an update on your thinking on how.
Speaker Change: What the tradeoffs are.
Speaker Change: About around keeping or exiting the JV.
Speaker Change: Yes, well, we've been a part of the <unk> JV.
Speaker Change: That has been in existence now for 37 years and was really formed around our expertise regarding zeolites in there.
Speaker Change: The key is being a key intermediate to the hydrocracking catalyst since the inception of the JV that <unk>.
Speaker Change: <unk> venture has expanded into multi different dimensions in terms of garden sustainable fuels custom catalysts emission control. So it's grown quite substantially and grown in different areas and now we are.
Speaker Change: Growing into the advanced recycling area. So it's not a it's not a one dimensional JV like a lot of them are either geographically or product centric. This one has grown in both parts. Both parties in the JV have been willing to invest in it over time. So we don't we considered that.
Speaker Change: We'll continue to operate that way into the future.
Speaker Change: Yes.
Speaker Change: And then lastly around the timing issues just to be clear is your outlook range.
Speaker Change: So like on a normal level of timing or Lumpiness or did you factor in some degree of <unk>.
Speaker Change: Assume that the timing continues to go against you at the same rate as it has the last several quarters.
Speaker Change: No I think the timing is just relative rights and typical for what we expect I mean those.
Speaker Change: Those orders can be positive and negative depending on.
Speaker Change: When certain things come into into.
Speaker Change: Into the fold from a customer standpoint, and shipping standpoint, so it's within a relative range.
Speaker Change: I think on the eco services side too we have very good visibility to our customer turnaround times.
Speaker Change: Sometimes two and three years out and Thats why we are able to plan our own maintenance outages around them. So we have pretty good visibility into where those are going to land. It just so happens this year.
Speaker Change: Heavier period in the first half of the year and it's kind of concentrated up between our maintenance and their maintenance into the first half.
Speaker Change: Okay. Thank you.
Speaker Change: Our next question comes from John Mcnulty with BMO capital markets. Please go ahead.
Speaker Change: Hi, This is <unk> on for John.
Speaker Change: I know, we've talked a lot about the impact of the turnarounds and the order timing in the first half.
Speaker Change: But is it fair to say that the first half EBITDA should kind of be within the normal range of seasonality, where it's like 40% to 45% of your full year EBITDA or is it going to be significantly less than that.
Speaker Change: Yes, good morning, Caleb it's a good question. So I'd give you the direction that for the Eco services side, it's roughly a 40 60 split right. So roughly 40% of the earnings would come around in the first half and 60% in the second half and a lot of that is related to the topics that we talked about from.
Speaker Change: Turnarounds and timing items for the MSC business, it's more like a 30 70 split. So again, if you go back and look at last year. It is not too dissimilar.
With against some of those timing.
Speaker Change: When the sales are coming through and with our expectation for those are so those would be the split for the two businesses.
Speaker Change: Got it okay, but with Q1 EBITDA.
Speaker Change: The midpoint to be like 11% for the full year guide that's implying that Q2 is almost is at least double Q1.
Speaker Change: So I'm just.
Speaker Change: Trying to win them back and reconcile.
Speaker Change: No that's right Gabe and I think again, it's not too dissimilar from what where our expectations are I mean, <unk> seen before for eco services. They typically have more of a bell curve, where Q1 and Q4 are usually lower in Q2, and Q3 are stronger quarters right. So with Q1 being.
Speaker Change: Artificially lower for the reasons, we talked about that would show a significant increase in the second quarter and then again for the AMC business.
Speaker Change: It can have significant swings quarter on quarter because of timing of the hydrocracking and specialty catalyst and other items custom catalysts that.
Speaker Change: That we have.
Okay. Thanks for the color.
Speaker Change: Our next question comes from David Silver with CL King Your line is open.
David Silver: Yes, hi, thank you.
Speaker Change:
Speaker Change: I did want to just ask you for a little bit more color on your Capex budget is $80 million to $90 million. This year, if I have it right I think maybe $506 million of that is.
Speaker Change: Money that might've been budgeted for 2024, but kind of is slipping, but just in general I mean, if you were to kind of if you could put the capex in but in buckets, maybe how much is sustaining and then.
Speaker Change: Is the balance of non sustaining spending all win.
Speaker Change: The Kansas City, and Chem 32.
Speaker Change: Spansion or are there some other discretionary items that you might call out.
Speaker Change: Yes.
David: Yes, David Thanks for the question.
Speaker Change: You are correct, there was probably about five or $6 million as you've mentioned and that rolled into this year.
David: The increase.
David: From last year to this year is all growth driven right. So it's all related to.
David: Either in the predominance is the expansions in Kansas City under the <unk> group as well as some spending in the <unk> 32 catalyst activation business, that's under Eco services Theres, probably a few other million dollars here and there for cost reduction projects.
And other smaller.
Projects that are growth based.
David: And again the way we look at our our capital allocation strategy really is that first dollar of that goes back into the business.
David: Will give us the best return since we know we can control and we believe that we have a good return on those projects. So.
David: So that's where the money is going to be spend for next year.
David: Okay very good and then.
Speaker Change: Apologies in advance this might sound, a little wonky, but I did want to go back to the impairment charge.
Speaker Change: And I you know I did read your description of it pretty carefully.
Speaker Change: I mean in general I think there's maybe three.
Speaker Change: General.
Speaker Change: No.
Speaker Change: The events or circumstances that might trigger the impairment.
Speaker Change: And in your explanation.
Speaker Change: It is clear what youre, saying, but.
Speaker Change: It seems like maybe you're citing.
Speaker Change: Ultimate or the proximate cause of it was the transaction back in 2016.
Speaker Change: But then you also cite some relatively modest portions of your current business mix.
Speaker Change: And I don't know, if I'm juggling things or it's apples to orange is there but.
Speaker Change: If the original I don't know if the original accounting was different or if your stock price was at a different level I mean.
Speaker Change: Would you still be taking that impairment charge, maybe just a tiny bit more color on the Genesis.
Speaker Change: And.
Speaker Change: The thinking behind that thank you.
Speaker Change: Yes, certainly David and it's a good it's a good summary, and a good question.
Speaker Change: Youre absolutely right that the original investment in our <unk> joint venture was increased or stepped up years ago related to business combinations right. So the purchase accounting increased it back then at their then fair value calculation to your point, what what was done back then.
Speaker Change: Was done with the information at that time, what we've done now given some of the currency.
Speaker Change: Focus, particularly around sustainable fuels and emission control and the demand that we saw there.
Speaker Change: The decrease in our earnings from last year.
Speaker Change: Led to a reduction of that original step up right. So it was only a portion of that original step up that was reduced alright. So the original investment that we had in the <unk> joint venture.
Speaker Change: It's not adjusted as just the step up from the business combination from years ago that was reduced related to this so hopefully that helps add some clarity.
Speaker Change: It's a noncash accounting journal entry.
Speaker Change: For the impairment of the investment that we have in that in the joint venture.
Speaker Change: Okay I appreciate that.
Speaker Change: I hope I can just squeeze in a quick one here, but you know sulfur prices are rising.
Speaker Change: And.
Speaker Change: You've talked about this from a couple of angles and I apologize, but if you could just clarify is this what is the lead or lag on passing through meaningful increases in sulfur costs. In other words is that part of maybe the sluggishness in the first quarter results that you'll re.
Speaker Change: The second quarter.
Speaker Change: Just.
Speaker Change: Or should we just ignore.
Speaker Change: Pretty significant sequential ryzen sulfur costs here. Thank you.
Speaker Change: Yes. Good question, David I think just the.
Speaker Change: The sulfur costs actually kind of.
Speaker Change: Demonstrate what we're talking about in terms of the refining turnaround. So the reason sulfur cost generally rises less sulfur coming out of refineries. So that's the one of the reasons, we talked about there being a lot of customer refining turnaround activity here in the first half of the year. So that's one reason that sulfur.
Speaker Change: <unk> have risen that and I think theres a improved outlook.
Speaker Change: For agricultural purposes, as well so the prices had did jump here in the first quarter as you pointed out in terms of the lag we do pass it through.
Speaker Change: Mostly.
Speaker Change: Mostly in the same quarter, although there are some there is some lag there, but that's not I wouldn't say, that's a really material drag on our first quarter numbers. Most of it again has to go back into.
Speaker Change: Lower volumes from us because of the turnaround activity lower yes.
Speaker Change: Lower activity from our customers due to their turnarounds, but nothing in terms of we don't see a significant deterioration in any of the facets of the business in terms of regeneration still looks good.
Speaker Change: Virgin sulfuric acid, we think we'll have a solid year, particularly in the second half as some of these new customers startup.
Speaker Change: Okay, Great I appreciate it thanks very much.
Speaker Change: Yes.
Speaker Change: It appears we have no further questions at this time I'll turn the program back to the speakers for any additional or closing remarks.
Speaker Change: Okay.
Speaker Change: With no further questions.
Speaker Change: We appreciate everybody's interest and thoughtful questions and we'll conclude the call.
Speaker Change: Okay.
Speaker Change: Thank you. This does concludes the <unk> fourth quarter 2024 earnings call and webcast. Thank you for your participation and you may disconnect at any time.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Mhm.
Speaker Change: Uh huh.
Speaker Change: Hum.
Uh-huh.
Speaker Change: Sure.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Got it.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Oh.
Speaker Change: Uh-huh.
Speaker Change: Sure.
Speaker Change: No no.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: Oh.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Okay.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Mhm.
Speaker Change: [music].
Speaker Change: Uh-huh.
Speaker Change: Yes.
Speaker Change: Hum.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: Alright.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Sure.
Speaker Change: Hum.
Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Yes.
Uh huh.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Uh huh.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Hello.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Hum.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Mhm.
Speaker Change:
Speaker Change: Hum.
Speaker Change: Hum.
Speaker Change: Oh.
Speaker Change: Hum.
Speaker Change: No no.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: No.
Speaker Change: Hello.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change:
Speaker Change: Hmm.
Speaker Change: Mhm.
Speaker Change: Uh-huh.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Uh-huh.
Speaker Change: Hello.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Got it.
Speaker Change: Okay.
Speaker Change: Uh-huh mhm.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Yes.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Uh huh.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Mhm.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Okay.
Okay.
Speaker Change: Uh-huh.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Mhm.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Oh.
Uh-huh.
Speaker Change: Okay.
Speaker Change: No no no.
Speaker Change: [music].
Speaker Change: Thanks, Tom.
Speaker Change: Sure.
Speaker Change:
Speaker Change: No.
Speaker Change: Hello.
[music].
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Mhm.
Speaker Change: [music].
Speaker Change: Uh-huh.
Speaker Change: Yes.
Speaker Change: Hello.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: Sure.
Speaker Change: Got it.
Speaker Change: Hello, everyone.
Speaker Change: Uh-huh.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Hum.
Speaker Change: Uh-huh.
Speaker Change: No.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Uh huh.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Uh huh.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Mhm.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: [music].
Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Speaker Change: Sure.
Uh-huh.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change:
Speaker Change: Uh-huh.
Speaker Change: Hum.
Speaker Change: Oh.
Speaker Change: Yeah.
Speaker Change: Uh-huh.
Speaker Change: No no.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: No.
Speaker Change: No.
Speaker Change: Hello.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Uh-huh.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: Mhm.
Speaker Change: [music].
Speaker Change: Uh-huh.
Speaker Change: Yeah.
Speaker Change: Hello.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Got it.
Speaker Change: Uh-huh.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Hum.