Q1 2025 Ascent Industries Co Earnings Call

Operator: Good afternoon, and welcome to Ascent Industries Q1 2025 earnings call.

Good afternoon, and welcome to affect industries Q1, 2025 earnings call today's speaker, our CEO, Brian Kitchen, CFO, Ryan Carver loss goes and the company's outside Investor Relations adviser Ralph expert will begin with prepared remarks, followed by Q&A before.

Operator: Today's speakers are CEO Brian Kitchen, CFO Ryan Kavalauskas, and the company's on-site investor relations advisor, Ralph Esper. We'll begin with prepared remarks, followed by Q&A.

Ralph Esper: Before we go further, I'd like to turn the call over to Ralph Esper as he reads the company's safe harbor statement within the meaning of Private Security Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements.

Speaker Change: We go further I would like to turn the call over to Ralph Asper as he reads the Companys Safe Harbor statement within the meaning of private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward looking statements Ralph.

Ralph Esper: Ralph? Thanks, Marvin.

Ralph Esper: Before we continue, I would like to remind all participants that the discussion today may contain certain forward-looking statements pursuant to the safe harbor provisions of the Federal Thank you. Thank you. These statements are based on information currently available to us and are subject to various risks and uncertainties that could cause actual results to differ materially. Ascent advises all of those listening to this call to review the latest 10-Q and 10-K. Post it on its website for a summary of these risks and information. Ascent does not undertake the responsibility to update any forward-looking statements.

Speaker Change: Thanks, Margaret I'll, we continue I would like to remind all participants that the discussion today may contain certain forward looking statements pursuant to the safe Harbor provisions of the Federal Securities laws. These statements are based on information currently available to us and are subject to various risks and uncertainties that could cause actual results to differ material.

Speaker Change: <unk> advises all of those listening to this call to review the latest 10-Q.

Speaker Change: Posted on its website for a summary of these risks and uncertainties.

Speaker Change: <unk> does not undertake the responsibility to update any forward looking statements.

Ralph Esper: Further, the discussion today may include non-GAAP measures. In accordance with Regulation G, the company has reconciled these amounts back to closest GAAP-based measures. The reconciliations can be found in the earnings release issued earlier today and posted on the investor section of the company's website at ascentco.com.

Speaker Change: Further discussion today may include non-GAAP measures in accordance with regulation G. The company has reconciled these amounts back.

Speaker Change: Two closest GAAP based measurement.

Speaker Change: The reconciliations can be found in the earnings release issued earlier today and posted on the investors section of the Companys website at <unk> Dot com.

Operator: Please note that this call is available for replay via webcast link that is also posted on the investor section of the company's website.

Speaker Change: Please note that this call is available for replay via webcast link and is also posted on the investors section of the Companys website.

Brian Kitchen: Now, I'll turn it over to our CEO, Brian Cato, to walk you through the results and what's driving continued momentum. Thanks, Ralph. Let's start with the headline. Despite ongoing soft market conditions, we delivered another sharp quarter of operating We controlled what we could, we stayed disciplined, and we drove measurable improvements through aggressive cell testing. Net sales from continuing operations total $24.7 million, down from $28 million in Q1 of 2024, reflecting broader market stock.

Brian: Now I'll turn it over to our CEO, Brian <unk>.

Brian: Can you sort of resolved and what's driving continued momentum Brian.

Brian: Thanks, Ralph let's start with the headline despite ongoing soft market conditions, we delivered another sharp quarter of operating improvement.

Brian: We control what we could we stayed disciplined.

Brian: We drove measurable improvements through aggressive self help net sales from continuing operations totaled $24 7 million down from $28 million in Q1 of 2024, reflecting broader market softness.

Brian Kitchen: That's where the similarities end. Adjusted EBITDA from continuing operations meaningfully improved, swinging from a loss of $2.7 million in the prior year to a positive $843,000 this $3.5 million turnaround. structural changes that we implemented across the organization over the last year are working as evidenced in the results that we are discussing today. It's a clear reflection of a more profitable book of business, enhanced operating discipline, and better service.

Brian: That's where the similarities end.

Brian: Adjusted EBITDA from continued continuing operations meaningfully improve swinging from a loss of $2 7 million in the prior year to a positive 843000 this quarter at three and a half million dollars turnaround the structural changes that we implemented across the organization over the last year are working as evidenced in our results that we are discussing today.

Brian: It's a clear reflection of a more profitable book of business enhanced operating discipline and better sourcing.

Brian Kitchen: Let's dive into the details with an update on the Tubular Sever. On April 4th, we closed on the sale of substantially all of the assets of Bristol Metals to Taichung International for $45 million, subject to certain closing adjustments. With the Bristol divestiture, ASCI remains our final tubular asset in continuing operations and have performed well in keeping us afloat.

Brian: Let's dive into the details with an update on the tubular service segment.

Brian: On October are on April 4th we closed on the sale of substantially all of the assets of Bristol metals to Digest international for $45 million subject to certain closing adjustments with the Bristol divestiture LCI remains our final tubular assets in continuing operations and have performed well in Q1 and.

Brian Kitchen: In Q1, ASCI delivered $6.9 million in revenue, down slightly year-over-year, however, gross margins jumped from 12.3% to 24.8%, and adjusted evens arose nearly five times to $1.3 million. The story here is discipline.

Brian: In Q1, ACI delivered $6 9 million in revenue down slightly year over year. However, gross margin chunk from 12, 3% to 24, 8% and adjusted EBITDA Rose nearly five times to one 3 million.

Brian: The story here is disciplined execution tight cost control sharper pricing and operational efficiency, even in a tough demand environment.

Brian Kitchen: High Cost Control, Sharper Pricing, and Operational. Even in a tough demand environment, we're proving that value can be created through focus and fundamentals.

Brian: We're proving that value can be created through focus and fundamentals.

Brian Kitchen: Let's talk about specialty chemicals. First, the macro. We continue to monitor the tariff environment. Over the last year, our strategic sourcing team has done an exceptional job improving our cost structure and building resilience in our supply chain. Because of these efforts, approximately 95 percent of our revenue is supported by domestically sourced raw materials. That's by design, and it's a major competitor. Tara Sloan, customers are looking for a reliable domestic partner. stepping in to fill that need. In fact, we are currently working with customers to onshore essential ingredients supply chains from Asia, Europe, and Canada.

Let's talk about specialty chemicals.

Brian: First the macro we continue to monitor the tariff environment.

Brian: Over the last year, our strategic sourcing team has done an exceptional job improving our cost structure and building resilience and our supply chain because of these efforts approximately 95% of our revenue is supported by domestically sourced raw materials. That's by design and it is a major competitive advantage as tariffs loan customers are looking for a rely.

Brian: <unk> domestic partners and we're stepping in to fill that need in fact, we are currently working with customers to onshore essential ingredient supply chains from Asia.

Brian: Europe and Canada.

Brian Kitchen: Ascent is proud to play an active role in the domestic manufacturing renaissance in specialty chemicals, and we believe that tailwind is just Pivoting to our financial performance in Q1, our specialty chemical segment continues to deliver in a difficult demand environment. While revenue declined year over year to $17.8 million, gross profit increased by $2.1 million, rising from $1.6 million in Q1 of 2024 to $3.7 million in Q1 of 2025, a 131% improvement, with gross margin expanding from 7.6% to 21%. David Siegfried, Cody Cree, David Siegfried, Ryan Kavalauskas, Ascent Industries This strong improvement reflects the underlying muscle of our sourcing, manufacturing, and commercial efforts beginning to strike this one.

Brian: As soon as proud to play an active role in the domestic manufacturing Renaissance in specialty chemicals, and we believe that tailwind is just beginning.

Brian: Pivoting to our financial performance in Q1, our specialty chemical segment continues to deliver in a difficult demand environment, while revenue declined year over year to $17 8 million gross profit increased by $2 1 million rising from one six in Q1 of 2024 to $3 7 million in Q1 of 2025.

Brian: A 131% improvement with gross margin expanding from seven 6%.

Brian: The 21%.

Brian: Adjusted EBITDA improved by $2 3 million swinging from a loss of <unk> three.

Brian: $3 million in the prior year to a positive $2 million this quarter.

Brian: Strong improvement reflects the underlying muscle of our sourcing manufacturing and commercial efforts beginning to strike as one.

Brian Kitchen: The story here is about quality over quantity. We're deliberately shifting our mix to higher margin opportunities, tightening our commercial focus, and aligning our resources around opportunities where we have the right to win. And it's working. Throughout 2024, we invested in our ability to be a more capable, more responsive, and more integrated partner to our customers. We've aligned technical sales, applications development, operations, and supply chain to deliver a more holistic customer experience. That includes braided offerings in oil and gas and H&I, stronger coating agility, and measured improvements in customer response time and solution delivery. It's early, but the model is showing traction, and we're building from here.

Brian: The story here is about quality over quantity, we're deliberately shifting our mix to higher margin opportunities.

Brian: Heightening, our commercial focus and aligning our resources around opportunities, where we have a right to win.

Brian: And it's working.

Brian: Throughout 2024, we invested in our ability to be a more capable more responsive and more integrated partner to our customers. We've aligned technical sales applications development operations and supply chain to deliver a more holistic customer experience that includes branded offerings in oil and gas in Asia Ini.

Brian: Quoting agility and measured improvements in customer response time and solution delivery. It's early but the model is showing traction and we're building from here in Q1, our commercial and technical sales team secured an annualized seven and a half million dollars of net new business with EBITDA margins in excess of 20%.

Brian Kitchen: In Q1, our commercial and technical sales team secured an annualized $7.5 million of net new business with EBITDA margins in excess of 20%. Importantly, this growth was well dispersed across key end markets, including oil and gas, case, lubricants, textiles, and other industrial applications. What's even more encouraging is the balance of that growth. 25% came from that new customer. We are winning new 75% was an expansion within our existing customer base, a clear sign that our value proposition is resonating and our service execution is driving an increased share of wall. We're not just selling a product, we're solving problems, creating formulations, and delivering it with speed, reliability, and complexity.

Brian: Importantly, this growth was well dispersed across key end markets, including oil and gas case, lubricants textiles, and other industrial applications.

Brian: What's even more encouraging is the balance of that grows 25% came from net new customer relationships. We are winning new customers, 75% was an expansion within our existing customer base, a clear sign that our value proposition is resonating and our service execution is driving an increased share of wallet.

Brian: We're not just selling a product we're solving problems, creating formulations and delivering it with speed reliability and compliance, we're customizing product products and quantities, both large and small in ways that traditional manufacturers simply won't and delivering that customization with a level of flexibility and tech.

Brian Kitchen: We're customizing products in quantities both large and small in ways that traditional manufacturers simply won't, and delivering that customization with the level of flexibility and technical depth that classical distribution models can't. It's a hybrid of custom manufacturing and high service distribution. and its work. This is what sets us apart. It's not just what we make, it's how we make it work for each customer.

Brian: Clinical depth of classical distribution models can't match, it's a hybrid of custom manufacturing and high service distribution.

Brian: And it's working.

Brian: This is what sets us apart it's not just what we make is how we make it work for each customer.

Brian Kitchen: Momentum is building not only in our operational performance, but also in market engagement. Average daily trading volume jumped to roughly 63,000 shares in Q1 of 2025. 160% lift versus Q1 of 2024. That surge is proof that the market is beginning to tune into momentum.

Brian: Momentum is building not only in our operational performance, but also in market engagement average daily trading volume jumped to roughly 63000 shares in Q1 of 2025.

Third 60% lift versus Q1 of 2024 that surge as proof that the market is beginning to tune into our story.

Brian Kitchen: In March, Ryan and I joined the Planet Micro Cap podcast to unpack our story and our transformation roadmap. The reaction was immediate, new conversations, fresh inbound interest, and a broader audience tracking sense.

Brian: Ryan I joined the planet Microcap Comcast to unpack, our story and our transformation roadmap. The reaction was immediate new conversations fresh inbound interest and a broader audience tracking essentially progress before I pass it off right I want to thank our entire team who has continued to demonstrate incredible grip.

Brian Kitchen: Before I pass it off to Ryan, I want to thank our entire team at Ascent who has continued to demonstrate incredible grit, hustle, and the drive to win.

Brian Kitchen: I would also like to thank our investors for the confidence that they have placed in both Ryan and I and the team that we have built.

So and the drive to win I would also like to thank our investors for the confidence that they have placed in both Ryan and I and the team that we've assembled.

Ryan Kavalauskas: With that, I'll turn it over to Ryan to provide a bit more context behind our financial performance.

Brian: With that I'll turn it over to Ryan to provide a bit more context behind our financial performance Brian.

Ryan Kavalauskas: Thanks, Brian. And good afternoon, everyone. Let me take a few minutes to walk through our first quarter. highlighting many of the points Brian touched on related to operational discipline and the structural changes we've been driving. In the first quarter, revenue from continuing operations was $24.7 million, a year-over-year decline of $3.2 million, or 11.5 percent, from Q1 2020. It's important to note that this top line contraction was not only anticipated, it was largely anticipated. As Brian alluded to, as part of our strategic repositioning, we actively chose to exit certain low-margin, low-value volume streams in favor of higher-value, more technically demanding That decision contributed to a 22.8% reduction in pound shifts but was offset in part by a 13.5% increase in average selling.

Ryan: Thanks, Brian and good afternoon, everyone.

Ryan: Let me take a few minutes to walk through our first quarter financials.

Ryan: Lighting, many of the points, Brian touched on related to operational discipline and the structural changes we've been driving across the business.

Ryan: In the first quarter revenue from continuing operations was $24 7 million.

Ryan: Year over year decline of $3 2 million or 11, 5% from Q1 2024.

Ryan: It's important to note that this top line contraction was not only anticipated it was largely untouched.

As Brian alluded to as part of our strategic repositioning we actively chose to exit certain low margin low value volume streams in favor of higher value more technically demanding business.

Ryan: That decision contributed to a 22, 8% reduction in pounds shipped.

Ryan: That was offset in part by a 13, 5% increase in average selling prices.

Ryan Kavalauskas: The result is a leaner, more profitable commercial base that better aligns with our long-term margin in return. Further evidence of our progress can be seen in gross profit, which nearly doubled to $4.8 million, or 19.3% of our total revenue. compared to 2.3 million or 8.3% last year, an expansion of over 1,100 bases. This improvement reflects not just better pricing discipline and product mix. but also structural tailwinds from lower raw material costs.

Ryan: The result is a leaner more profitable commercial base that better aligns with our long term margin and return profile.

Ryan: Further evidence of our progress can be seen in gross profit, which nearly doubled to $4 8 million or 19, 3% of sales compared to $2 3 million or eight 3% last year, an expansion of over 1100 basis points.

Ryan: This improvement reflects not just better pricing discipline and product mix.

Ryan: But also structural tailwind from lower raw material costs.

Ryan Kavalauskas: a continued focus on strategic sourcing, and improving throughput at our These margin gains are not at the They represent real progress in repositioning the business for sustainable profit. Turning to our cost structure, we've made disciplined progress in enhancing operating an outcome that reflects not only our internal focus on talent and process, but also tangible reductions in external. As a result, SG&A declined to $5.6 million, a reduction of $1.1 million year-over-year. Efficiency increased as we saw SG&A representing 22.5 percent of sales down from 23.9 percent in Q1 2020. Importantly, this improvement did not stem simply from a broad cost cutting.

Ryan: A continued focus on strategic sourcing.

Ryan: And improving throughput at our plants.

Ryan: These margin gains are not episodic they represent real progress in repositioning the business for sustainable profitability.

Ryan: Turning to our cost structure, we've made disciplined progress and enhancing operating efficiency and.

Ryan: An outcome that reflects not only our internal focus on talent and process, but also tangible reductions in external stopped.

Ryan: As a result.

G&A declined to $5 6 million, a reduction of $1 $1 million year over year.

Ryan: Efficiency increased as we saw SG&A, representing 22, 5% of sales down from 23, 9% in Q1 2024.

Ryan: Importantly, this improvement did not simply from abroad cost cutting.

Ryan Kavalauskas: Rather, it reflects the intentional allocation of resources into people and processes that are now a delivery level. Throughout 2024, we made precise, targeted investments in commercial, technical, and operational roles. designed not to simplistically grow the arc chart, but to extract value from underutilized assets. Improve Workflow Discipline and Accelerate Decision Delivery. This is a deliberate approach. We invest where we see measurable return, and we structure our organization to remain lean, agile, and performance-driven.

Ryan: Rather it reflects the intentional allocation of resources into people and processes that are now delivering leverage.

Ryan: Throughout 2024, we made precise targeted investments in commercial technical and operational roles designed not just simplistically grow the art chart, but to extract value from underutilized assets in.

Ryan: Improve workflow discipline and accelerate decision velocity.

Ryan: This is a deliberate approach, we invest where we see measurable return and we structure our organization to remain lean agile and performance driven.

Ryan Kavalauskas: The outcome underscores our commitment to building a scalable, performance-driven organization, one where cost efficiency is a function of execution, not us. That same discipline and focus is beginning to show up in our finances. most notably on a consolidated basis. adjusted even a turn positive at $843,000. An increase of $3.5 million from the $2.7 million loss in Q1 of last year. This milestone reflects a combination of gross margin recovery, cost discipline, and early leverage on a more productive revenue.

Ryan: The outcome underscores our commitment to building a scalable performance driven organization, one where cost cut one of our cost efficiency is a function of execution not austerity.

Ryan: That same discipline and focus is beginning to show up in our financial results.

Ryan: Most notably on a consolidated basis adjusted.

Ryan: Adjusted EBITDA turned positive at 843000, an increase of $3 5 million from the $2 $7 million loss in Q1 of last year.

Ryan: This milestone reflects a combination of gross margin recovery cost discipline and early leverage on a more productive revenue base. This.

Ryan Kavalauskas: This is the beginning of a more durable trend in operation.

This is the beginning of a more durable trend in operating performance and we believe the underlying earning powers of this business is only just starting to show through.

Ryan Kavalauskas: and we believe the underlying earning powers of this business is only just starting to Finally, our balance sheet remains a key strategic advantage. the end of the quarter with $14.3 million in cash and no debt before the divestiture of substantially all of the Bristol assets for $45 million. providing significant flexibility as we evaluate capital deployment. On a trailing basis, our cash current has improved significantly and we continue to target cell phone and growth where possible. During the quarter, we also repurchased approximately 17,000 shares at an average price of $12.72. reinforcing our conviction and intrinsic value in long-term funding.

Ryan: Finally, our balance sheet remains a key strategic advantage.

Ryan: We ended the quarter with $14 $3 million in cash and no debt before the divestiture of substantially all of the Bristol assets for $45 million, providing significant flexibility as we evaluate capital deployment options.

Ryan: On a trailing basis, our cash burn has improved significantly and we continue to target self funded growth where possible.

Ryan: During the quarter, we also repurchased approximately 17000 shares at an average price of $12 73.

Ryan: Reinforcing our conviction and intrinsic value and long term fundamentals.

Ryan Kavalauskas: From an inorganic growth standpoint, we remain highly selective and While market activity has remained muted, our strength and balance sheet gives us the optionality to act when the right opportunity presents itself without compromising on return thresholds or integration. We're focused on businesses that complement our platform capabilities and growth aspirations, those with enhanced margin profiles, or portfolios that bring differentiated customer relationships.

Ryan: From an integral from an inorganic growth standpoint, we remain highly selective and disciplined.

Ryan: Market activity has remained muted our strengthened balance sheet gives us the optionality to act when the right opportunity presents itself without compromising on return thresholds or integration set.

Ryan: We're focused on businesses that complement our platform capabilities and growth aspiration.

Ryan: With enhanced margin profiles or or portfolios that bring differentiated customer relationships.

Ryan Kavalauskas: Until then, capital preservation and disciplined execution remain our default posture.

Ryan: Till then.

Ryan: Capital preservation and disciplined execution remain our default posture.

Ryan Kavalauskas: To summarize, the revenue contraction this quarter reflects strategic pruning of lower margin business and repositioning for profitable growth. We delivered over a 1,000 basis point increase in gross margin expansion and achieved positive adjusted EBITDA driven by efficiencies in our structural cost basis and mixed We're operating with discipline, improving cash conversion, and at $14.3 million in cash and no debt before the Bristol. giving us real flexibility.

Ryan: To summarize the revenue contraction this quarter reflects strategic pruning of lower margin business and repositioning for Buffalo Grove.

Ryan: We've delivered over a 1000 basis point increase in gross margin expansion and achieve positive adjusted EBITDA driven by efficiencies in our structural cost basis and mix improvements.

Ryan: We're operating with discipline, improving cash conversion and at $14 $3 million in cash and no debt before the Bristol sale, given us real flexibility.

Ryan Kavalauskas: Foundation is stronger, our focus is sharper, and our optionality is more.

Ryan: Foundation is stronger our focus is sharper and our optionality is increasing with that I'll turn it back over to the operator for questions.

Operator: With that, I'll turn it back over to the operator. Thank you, sir.

Operator: At this time, we'll conduct a question and answer session. As a reminder to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A.

Speaker Change: Thank you Sir at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.

Speaker Change: Your question. Please press star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

David Siegfried: And our first question comes from a line of David Siegfried of of a private investor, your line is now open. Hey guys, congratulations on the momentum and on the gross margin, and on the Bristol sale. Thank you.

Speaker Change: And our first question comes from the line of David seek fried of <unk>.

Private Investor Your line is now open.

Speaker Change: Hey, guys congratulations on the momentum and on the gross margin and on the Bristol sale.

Speaker Change: Thank you.

David Siegfried: I think, I know I've appreciated the investor conferences and the transparency from that. I think that's been really good.

Speaker Change: I think.

Speaker Change: I know I have I appreciate it.

Speaker Change: Investor conferences, and the transparency from that I think that's been really good.

David Siegfried: A question though on the ASTI business. So that's doing well right now, 1.3 million adjusted EBITDA on Q1. So let's say you get four to six million in adjusted EBITDA in 2025. and get a four to six multiple on that.

Speaker Change: A question, though on the STI business. So that's doing well right now $1 3 million of adjusted EBITDA in Q1.

So, let's say you get $4 million to $6 million and adjusted EBITDA in 2025.

Speaker Change: And get a 4% to six multiple on that.

David Siegfried: Would, you know, would would you say that in this climate, ornamental stainless domestic manufacturer is a more attractive target than it was, we'll say, even six months ago?

Speaker Change: Wood.

Speaker Change: Would you say that in this climate ornamental stainless domestic manufacturer, it's a more attractive.

Speaker Change: Target then it was well say even six months ago.

Brian Kitchen: Yeah, David. Hey, it's Brian. Appreciate the comments. And regarding your question, I would say it's maturely changed. You know, the demand has remained incredibly soft. We're seeing things pick up obviously in Q1, but it's still relatively soft market conditions. You know, related to the tariffs, we're getting some additional looks. But the barn doors are not being blown off at this stage. Got it.

Speaker Change: Yeah, David Hey, it's Brian I appreciate the comments and regarding your question.

Speaker Change: Wouldn't say it's materially changed.

Speaker Change: The demand has remained incredibly soft we're seeing things pick up obviously in Q1, but it is still relatively soft market conditions related to the tariffs we are getting some additional lux.

But the barn doors or not being blown off at this stage.

Speaker Change: Got it.

Brian Kitchen: Is that still a possibility that it could be sold in 2025? Yeah, we're always evaluating options to monetize the value out of all.

Speaker Change: Is that still a possibility that it could be sold in 2025.

Speaker Change: Yes, we're always evaluating options to monetize the value out of all of our assets.

David Siegfried: Okay, I think it was mentioned that the goal for 2025 in chemicals is not top line, but profitability and obviously you're there now. Do you think that with the sticky revenue and the earnings profile that we can begin to get guidance? going forward.

Speaker Change: Okay.

Speaker Change: I think it was mentioned that the goal for 2025 and chemicals is not top of mind.

Speaker Change: Profitability and obviously you are there now.

Speaker Change: Do you think that with the sticky revenue and the earnings profile that we can begin to get guidance.

Speaker Change: Going forward.

Brian Kitchen: Yeah, I'll let Ryan comment on that further, but I would suggest that that's not going to happen inside of 2025. We're still, while we stabilized significantly in 2024, there's still some stabilization activities happening in 2025. I think it's just a little bit too premature to start flashing. Yeah, I like O'Brien's comments, I think, as we continue to reevaluate the portfolio and the customers and the mix of products. until we get a more stable base, I think we're.

Speaker Change: Yes, I'll, let Brian comment on that further but I would suggest that that's not going to happen inside of 2025, we're still while we stabilized significantly in 2024, there is still some stabilization activities happening in 2025.

Speaker Change: Just a little bit too premature to start flashing guidance.

Speaker Change: Yes, I'll Echo Brian's comments, I think as we continue to reevaluate the portfolio and the customers and the mix of products I think until we get a more stable base.

Speaker Change: We're going to continue to kind of withhold.

Ryan Kavalauskas: forward-looking guidance, just until we get a better handle Higher March.

Speaker Change: Forward looking at guidance, just until we get a better handle on the switching business to this more.

Speaker Change: Higher margin style business that we're looking for.

Brian Kitchen: Okay, now you did mention that in one of the conferences that the goal is, you know, essentially $80 million a year now on chemicals to $120 million by 2030 with your existing asset base. So that growth would start happening. 2026, is that the plan? Yeah, I think we'll start to see some, some element of growth certainly in the second half of the year. The team has developed a really strong and compelling selling project pipeline. As you know, from our prior conversations, the sell cycle is not instantaneous, it does take some time, even for branded product sales.

Speaker Change: Okay now you did mention that.

Speaker Change: And one of the conferences that nickel is essentially $80 million, a year now and chemicals to $120 million by 2030 with your existing asset base.

Speaker Change: That growth.

Speaker Change: To start happening.

Speaker Change: 2026.

Speaker Change: Plan.

Speaker Change: Yes, I think we'll start to see some some element of growth certainly in the second half of the year. The team has developed a really strong and compelling.

Speaker Change: Selling project pipeline.

Speaker Change: As you know from our prior conversations the cell cycle.

Speaker Change: Is not instantaneous it does take some time EBIT for branded product sales. So we'll start to see a ramp in the second half of the year and bridging into a much more compelling top line and the secondary in 2026.

Brian Kitchen: So we'll start to see a ramp in the second half of the year and bridging into a much more compelling in 2018. Okay, good to hear. And did I hear that correctly that In 2024, I think it was 75% commodity, 25% blended, and your chemicals in that 2025, it'd be like 65-35 mix. And eventually you want to get to a 50-50 split. Yeah. Yeah, that's right. So in 2020, 2024, we end the year with 75-25 split between custom manufacturing and branded product sales. I'll tell you that from a Q1 standpoint, we're in that same genre today, but we do have hopes that we'll be able to drive that towards a 65-35 split by the end of the year.

Speaker Change: Okay good to hear.

Speaker Change: And did I hear that correctly.

Speaker Change: In 2024, I think it was 75%.

Speaker Change: Commodity, 25% blended and your chemicals and that 2025, we would be about 65 35 mix.

Speaker Change: Yes, yes, yes, that's right. So 2020 'twenty 'twenty four we ended the year with seven it was 70 525 split between custom manufacturing and branded product sales I will tell you that from a Q1 standpoint were in that same genre today, but we do have hopes that we'll be able to drive that towards a 65 35 split by the end of this year.

Brian Kitchen: Got it. And this can all be done with the existing capacity and minimal capex? Absolutely. Yeah. So, I mean, our run rate capex is between one to three million dollars a year for the past four years. We believe that that's reasonable, a reasonable assumption moving forward. And our asset utilization today is is incredibly low. We have tons of runway for Oregon.

Speaker Change: Got it and this can all be done with the existing capacity and minimal capex.

Speaker Change: Absolutely, yes, so I mean, our run rate capex is between $1 million to $3 million year for the past four years.

Speaker Change: We believe the dash.

Speaker Change: Reasonable a reasonable assumption moving forward in our asset utilization today is is incredibly low we have tons of runway for organic growth.

Operator: Okay, good.

Speaker Change: Okay, Good and then <unk>.

David Siegfried: And then 17,000 shares essentially bought Q1.

Speaker Change: <unk> thousand shares essentially bought in Q1.

Brian Kitchen: Was the board limited or was the buyback limited because of the Bristol transaction, just wasn't able to be in the market the way you wanted to be? Yeah, I think from a Q1 standpoint, we executed against the buyback within the confines of the existing buyback program that we have, certainly our optionality has increased with the Bristol sale. And we'll be looking at that. Got it.

Speaker Change: What's the board limited.

Speaker Change: Back limited because of the Bristol transaction, just wasn't able to be in the market. The way you want it to be.

Speaker Change: Yes, I think from a Q1 standpoint, we executed against the buyback within the confines of the existing buyback program that we have certainly our option. Our optionality has increased with the personal sale.

Speaker Change: And we'll be looking at that moving forward.

Brian Kitchen: Do you still feel the stock's undervalued at these levels? personal opinion. And so with that expanded stock buyback that was announced on February 18th, so you have the ability to buy at higher prices and a greater amount. Is that what's being said? We do. Obviously, they're limited on a daily basis on the number of shares that we can acquire at certain price points. at it. Okay.

Speaker Change: Got it.

Speaker Change: Do you still feel the stock is undervalued at these levels.

Speaker Change: My personal opinion, yes.

Speaker Change: And so with that.

Speaker Change: Stock buyback.

Speaker Change: It was announced on February 18th.

Speaker Change: So you have the ability to buy higher prices and a greater amount of.

Speaker Change: Is that what's being said, we do obviously there are limits in on a daily basis on the number of shares that we can acquire at certain price points, but yes.

David Siegfried: Well, thank you. Very good. Good to see the progress. Appreciate the questions, David.

Speaker Change: Got it okay well. Thank you very good good to see the progress for <unk>.

Speaker Change: Hate the question David.

Operator: Thank you.

Operator: At this time, this concludes the question and answer session.

Speaker Change: Thank you at this time. This concludes our question and answer session I will now turn the call back over to Mr. Kitchen for closing remarks.

Brian Kitchen: I'll now turn the call back over to Mr. Kitchen for closing remarks. Okay, great. Thank you, Marvin.

Operator: We'd like to thank everyone for listening to today's call, and we look forward to speaking with you again when we report our second quarter, 2025. Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Kitchen: Okay, great. Thank you Marvin and wed like to thank everyone for listening to today's call and we look forward to speaking with you again, when we report our second quarter 2025 results.

Kitchen: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.

Kitchen: Okay.

Kitchen: [music].

Kitchen: Okay.

Kitchen: Okay.