Q4 2025 Minerals Technologies Inc Earnings Call

January 30, 2026

Speaker #1: Good

Operator: Good morning, and welcome to the Minerals Technologies Q4 2025 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. To withdraw your question, please press Star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Lydia Kopylova, Head of Investor Relations. Please go ahead.

Speaker #1: Good morning, and welcome to the Minerals Technologies fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad.

Speaker #1: To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Lydia Kopylova, Head of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Gary. Good morning, everyone, and welcome to our fourth quarter 2025 earnings conference call. Today's call will be led by Chairman and Chief Executive Officer Doug Dietrich, and Chief Financial Officer Erik Aldag. Following Doug and Erik's prepared remarks, we will open it up to questions.

Lydia Kopylova: Thank you, Gary. Good morning, everyone, and welcome to our Q4 2025 earnings conference call. Today's call will be led by Chairman and Chief Executive Officer, Doug Dietrich, and Chief Financial Officer, Erik Aldag. Following Doug and Erik's prepared remarks, we'll open it up to questions. As a reminder, some of the statements made during this call may constitute forward-looking statements within the meaning of the federal securities laws. Please note the cautionary language about forward-looking statements contained in our earnings release and on the slides. Our SEC filings disclose certain risks and uncertainties, which may cause our actual results to differ materially from these forward-looking statements. Please also know that some of our comments today refer to non-GAAP financial measures. A reconciliation to GAAP financial measures can be found in our earnings release in an appendix of this presentation, which are posted on our website.

Q4 2025 Minerals Technologies Inc Earnings Call

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Minerals Technologies

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Q4 2025 Minerals Technologies Inc Earnings Call

MTX

Friday, January 30th, 2026 at 4:00 PM

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Speaker #2: As a reminder, some of the statements made during this call may constitute forward-looking statements within the meaning of the Federal Securities Laws. Please note the cautionary language about forward-looking statements contained in our earnings release is on this slide.

Speaker #2: Our SEC filings disclose certain risks and uncertainties, which may cause our actual results to differ materially from these forward-looking statements. Please also note that some of our comments today refer to non-GAAP financial measures.

Speaker #2: A reconciliation to GAAP financial measures can be found in our earnings release and in an appendix of this presentation, which I posted on our website.

Speaker #2: Now I'll turn it over to

Lydia Kopylova: Now I'll turn it over to Doug. Doug?

Now I'll turn it over to Doug. Doug?

Speaker #2: Doug. Thanks, Lydia. Doug?

Douglas T. Dietrich: Thanks, Lydia. Good morning, everyone, and thanks for joining today. I'll start today's call by giving you a high-level overview of our performance for 2025, and then Erik will walk you through our Q4 and full year financial summary, and, as well as give you a Q1 outlook. I'll then take a couple of moments toward the end to give you an overview of how we see 2026 shaping up in terms of our end markets and the sales growth we expect to see over the year in each product line. After that, we'll open it up to questions. 2025 was a more challenging year for us, especially compared to the record year we had in 2024.

Douglas Dietrich: Thanks, Lydia. Good morning, everyone, and thanks for joining today. I'll start today's call by giving you a high-level overview of our performance for 2025, and then Erik will walk you through our Q4 and full year financial summary, and, as well as give you a Q1 outlook. I'll then take a couple of moments toward the end to give you an overview of how we see 2026 shaping up in terms of our end markets and the sales growth we expect to see over the year in each product line. After that, we'll open it up to questions. 2025 was a more challenging year for us, especially compared to the record year we had in 2024.

Speaker #3: Good morning, everyone, and thanks for joining today. I'll start today's call by giving you a high-level overview of our performance for 2025. Then Erik will walk you through our fourth quarter and full-year financial summary, as well as give you a first quarter outlook.

Speaker #3: I'll then take a couple of moments toward the end to give you an overview of how we see 2026 shaping up in terms of our end markets, and the sales growth we expect to see over the year in each product line.

Speaker #3: After that, we'll open it up to questions. 2025 was a more challenging year for us, especially compared to the record year we had in 2024.

Speaker #3: Like other companies, we experienced the impact of a dynamic, and at times volatile, operating environment, including geopolitical uncertainty, changing tariffs, and softer market demand.

Douglas T. Dietrich: Like other companies, we experienced the impact of a dynamic and at times volatile operating environment, including geopolitical uncertainty, changing tariffs, and softer market demand. The ability to make the ongoing adjustments to these changing conditions, while at the same time remaining focused on delivering the key drivers of our long-term strategy, is a testament to the strength of our team. I'd first like to highlight that in 2025, the employees at MTI achieved a world-class safety performance and one that was the best ever in MTI's history. The health and safety of our people, partners, and communities are our top priorities. And though we continue to reduce the number of injuries that occur at MTI, we still haven't reached our goal of eliminating them altogether. But the progress we made as a team this year is a positive step toward that achievement.

Like other companies, we experienced the impact of a dynamic and at times volatile operating environment, including geopolitical uncertainty, changing tariffs, and softer market demand. The ability to make the ongoing adjustments to these changing conditions, while at the same time remaining focused on delivering the key drivers of our long-term strategy, is a testament to the strength of our team. I'd first like to highlight that in 2025, the employees at MTI achieved a world-class safety performance and one that was the best ever in MTI's history. The health and safety of our people, partners, and communities are our top priorities. And though we continue to reduce the number of injuries that occur at MTI, we still haven't reached our goal of eliminating them altogether. But the progress we made as a team this year is a positive step toward that achievement.

Speaker #3: The ability to make ongoing adjustments to these changing conditions, while at the same time remaining focused on delivering the key drivers of our long-term strategy, is a testament to the strength of our team.

Speaker #3: At first, I'd like to highlight that in 2025, the employees at MTI achieved a world-class safety performance, and one that was the best ever in MTI's history.

Speaker #3: The health and safety of our people, partners, and communities are our top priorities. And though we continue to reduce the number of injuries that occur at MTI, we still haven't reached our goal of eliminating them altogether.

Speaker #3: But the progress we've made as a team this year is a positive step toward that achievement. Moving to our financial results, full-year sales came in at $2.1 billion, a similar level to last year.

Douglas T. Dietrich: Moving to our financial results, full year sales came in at $2.1 billion, a similar level to last year. Full year operating income was $287 million, and earnings per share was $5.52. Many of our key end markets either remained flat or weakened throughout the year. Our teams moved quickly to adjust to these conditions in our facilities by maintaining control of costs and managing inventories, while at the same time navigating changing tariffs and remaining focused on quality, customers, and safety. We also took proactive steps to improve our cost structure, including a company-wide cost savings program that we announced in the first half, which we will see the full year impact from this year.

Moving to our financial results, full year sales came in at $2.1 billion, a similar level to last year. Full year operating income was $287 million, and earnings per share was $5.52. Many of our key end markets either remained flat or weakened throughout the year. Our teams moved quickly to adjust to these conditions in our facilities by maintaining control of costs and managing inventories, while at the same time navigating changing tariffs and remaining focused on quality, customers, and safety. We also took proactive steps to improve our cost structure, including a company-wide cost savings program that we announced in the first half, which we will see the full year impact from this year.

Speaker #3: Full-year operating income was $287 million, and earnings per share was $5.52. Many of our key end markets either remained flat or weakened throughout the year.

Speaker #3: Our teams moved quickly to adjust to these conditions, and our facilities. By maintaining control of costs and managing inventories, while at the same time navigating changing tariffs and remaining focused on quality, customers, and safety.

Speaker #3: We also took proactive steps to improve our cost structure, including a company-wide cost savings program that we announced in the first half, which we will see the full-year impact from this year.

Speaker #3: Despite the market and operating distractions, we meaningfully advanced the three pillars of our organic growth strategy in both of our segments, including expanding into higher-growth consumer-oriented markets, positioning ourselves in faster-growing geographies, and introducing innovative, higher-margin products.

Douglas T. Dietrich: Despite the market and operating distractions, we meaningfully advanced the three pillars of our organic growth strategy in both of our segments, including expanding into higher growth, consumer-oriented markets, positioning ourselves in faster-growing geographies, and introducing innovative, higher-margin products. We outlined for you a few examples of the investments we've recently made to support this strategy, including upgrades to our pet litter facilities in the US, Canada, and China, expanding our natural oil purification operations in Turkey, building several paper and packaging satellite plants in Asia, and expanding our production of FLUOROSORB. Each of these investments has led to significant new sales growth in 2026, and I'll give you details on this later in the presentation. This was also a strong year on the technology and new product development front.

Despite the market and operating distractions, we meaningfully advanced the three pillars of our organic growth strategy in both of our segments, including expanding into higher growth, consumer-oriented markets, positioning ourselves in faster-growing geographies, and introducing innovative, higher-margin products. We outlined for you a few examples of the investments we've recently made to support this strategy, including upgrades to our pet litter facilities in the US, Canada, and China, expanding our natural oil purification operations in Turkey, building several paper and packaging satellite plants in Asia, and expanding our production of FLUOROSORB. Each of these investments has led to significant new sales growth in 2026, and I'll give you details on this later in the presentation. This was also a strong year on the technology and new product development front.

Speaker #3: We outlined for you a few examples of the investments we've recently made to support this strategy, including upgrades to our pet litter facilities in the US, Canada, and China, expanding our natural oil purification operations in Turkey, building several paper and packaging satellite plants in Asia, and expanding our production of floors.

Speaker #3: Each of these investments has led to significant new sales growth in 2026, and I'll give you details on this later in the presentation. This is also a strong year on the technology and new product development front.

Speaker #3: Sales of our newest products accounted for 19% of our total sales, which is the highest level we've achieved and points to both the strength of our innovation engine and our ability to continue to bring new value to our customers through the application of our core technologies.

Douglas T. Dietrich: Sales of our newest products accounted for 19% of our total sales, which is the highest level we've achieved, and points to both the strength of our innovation engine, and ability to continue to bring new value to our customers through the application of our core technologies. Further, we remain strong stewards of our capital, returning $73 million to our investors through dividends and share repurchases, while also maintaining a strong balance sheet that is well-positioned to support both our organic and inorganic growth initiatives. With that, let me have Erik take you through our financials in more detail.

Sales of our newest products accounted for 19% of our total sales, which is the highest level we've achieved, and points to both the strength of our innovation engine, and ability to continue to bring new value to our customers through the application of our core technologies. Further, we remain strong stewards of our capital, returning $73 million to our investors through dividends and share repurchases, while also maintaining a strong balance sheet that is well-positioned to support both our organic and inorganic growth initiatives. With that, let me have Erik take you through our financials in more detail.

Speaker #3: Further, we remain strong stewards of our capital, returning $73 million to our investors through dividends and share repurchases, while also maintaining a strong balance sheet that is well-positioned to support both our organic and inorganic growth initiatives.

Speaker #3: With that, let me have Erik take you through our financials in more detail.

Speaker #4: Thanks, Doug, and good morning, everyone. I'll start by providing a summary of our fourth quarter and full-year 2025 results, followed by a review of our segments, and I'll wrap up with our outlook for the first quarter.

Erik Aldag: Thanks, Doug, and good morning, everyone. I'll start by providing a summary of our Q4 and full year 2025 results, followed by a review of our segments, and I'll wrap up with our outlook for the Q1. Following my remarks, I'll turn the call back over to Doug for additional perspective on 2026. Now let's turn to review our results. The Q4 played out largely as we expected. Sales, operating income, and EPS were all roughly in the middle of the ranges we provided on our Q3 earnings call. Sales were $520 million, up slightly from prior year, as 2% growth in engineered solutions offset a 2% decline in consumer and specialties. Operating income was $67 million, and operating margin was 12.8% of sales.

Speaker #4: Following my remarks, I'll turn the call back over to Doug for additional perspective on 2026. Now, let's turn to review our results. The fourth quarter played out largely as we expected.

Speaker #4: Sales, operating income, and EPS were all roughly in the middle of the ranges we provided on our third quarter earnings call. Sales were $520 million, up slightly from the prior year, as 2% growth in Engineered Solutions offset a 2% decline in Consumer and Specialties.

Speaker #4: Operating income was $67 million, and operating margin was 12.8% of sales. Operating margin for the quarter was impacted by lower residential construction and foundry volumes in the U.S., as well as lower productivity and fixed cost absorption at our plants serving those markets.

Erik Aldag: Operating margin for the quarter was impacted by lower residential construction and foundry volumes in the US, as well as lower productivity and fixed cost absorption at our plants serving those markets. Turning to the full year, sales were $2.1 billion, and operating income was $287 million. You can see in the sales bridge on the upper right that sales were 2% lower than prior year, driven by $74 million of unfavorable volume and mix impacts, which was partly offset with $21 million of selling price increases and an $8 million benefit from foreign exchange. You can see in the bridge on the bottom right, that unfavorable volume and mix impacted operating income by approximately $27 million from the prior year. Our selling price increases completely offset inflationary impacts, including the impact from tariffs.

Operating margin for the quarter was impacted by lower residential construction and foundry volumes in the US, as well as lower productivity and fixed cost absorption at our plants serving those markets. Turning to the full year, sales were $2.1 billion, and operating income was $287 million. You can see in the sales bridge on the upper right that sales were 2% lower than prior year, driven by $74 million of unfavorable volume and mix impacts, which was partly offset with $21 million of selling price increases and an $8 million benefit from foreign exchange. You can see in the bridge on the bottom right, that unfavorable volume and mix impacted operating income by approximately $27 million from the prior year. Our selling price increases completely offset inflationary impacts, including the impact from tariffs.

Speaker #4: Turning to the full year, sales were $2.1 billion, and operating income was $287 million. You can see in the sales bridge on the upper right that sales were 2% lower than the prior year, driven by $74 million of unfavorable volume and mix impacts, which was partly offset with $21 million of selling price increases and an $8 million benefit from foreign exchange.

Speaker #4: You can see in the bridge on the bottom right that unfavorable volume and mix impacted operating income by approximately $27 million from the prior year.

Speaker #4: Our selling price increases completely offset inflationary impacts, including the impact from tariffs. However, we also experienced unfavorable productivity and fixed cost absorption, primarily due to volume challenges in the first and fourth quarters.

Erik Aldag: However, we also experienced unfavorable productivity and fixed cost absorption, primarily due to volume challenges in Q1 and Q4. As we've mentioned, we had some temporarily higher logistics costs associated with our cat litter plant upgrades. Operating margin was 13.9% of sales versus 14.9% in the prior year. Lower volume was the biggest driver of the change and was worth about 80 basis points. We see this margin reverting back toward 15% as volume improves, and we won't have these one-time cost impacts I just mentioned. Earnings per share, excluding special items, was $1.27 in the fourth quarter and $5.52 for the full year. Now let's turn to a review of our segments, beginning with consumer and specialties.

However, we also experienced unfavorable productivity and fixed cost absorption, primarily due to volume challenges in Q1 and Q4. As we've mentioned, we had some temporarily higher logistics costs associated with our cat litter plant upgrades. Operating margin was 13.9% of sales versus 14.9% in the prior year. Lower volume was the biggest driver of the change and was worth about 80 basis points. We see this margin reverting back toward 15% as volume improves, and we won't have these one-time cost impacts I just mentioned. Earnings per share, excluding special items, was $1.27 in the Q4 and $5.52 for the full year. Now let's turn to a review of our segments, beginning with consumer and specialties.

Speaker #4: And as we've mentioned, we had some temporarily higher logistics costs associated with our cat litter plant upgrades. Operating margin was 13.9% of sales, versus 14.9% in the prior year.

Speaker #4: Lower volume was the biggest driver of the change, and was worth about 80 basis points. We see this margin reverting back toward 15% as volume improves, and we won't have these one-time cost impacts I just mentioned.

Speaker #4: Earnings per share, excluding special items, was $1.27 in the fourth quarter and $5.52 for the full year. Now let's turn to a review of our segments, beginning with Consumer and Specialties.

Speaker #4: Fourth quarter sales in the Consumer and Specialties segment were $274 million. Sales in our Household and Personal Care product line increased 2% sequentially to $133 million, and were 1% below the prior year.

Erik Aldag: Q4 sales in the consumer and specialties segment were $274 million. Sales in our household and personal care product line increased 2% sequentially to $133 million and were 1% below prior year. Momentum continued to build for our cat litter business, with sales up 8% sequentially and up slightly from prior year. We also saw continued growth in edible oil and renewable fuel purification, as well as animal feed additives. However, this growth was offset by lower fabric care sales as customers reduced their inventories in the fourth quarter. In our specialty additives product line, sales of $142 million were 2% below prior year, as higher sales to paper and packaging customers were offset by a pronounced slowdown in residential construction, which resulted in several customers taking unusually long downtime in December.

Q4 sales in the consumer and specialties segment were $274 million. Sales in our household and personal care product line increased 2% sequentially to $133 million and were 1% below prior year. Momentum continued to build for our cat litter business, with sales up 8% sequentially and up slightly from prior year. We also saw continued growth in edible oil and renewable fuel purification, as well as animal feed additives. However, this growth was offset by lower fabric care sales as customers reduced their inventories in the Q4. In our specialty additives product line, sales of $142 million were 2% below prior year, as higher sales to paper and packaging customers were offset by a pronounced slowdown in residential construction, which resulted in several customers taking unusually long downtime in December.

Speaker #4: Momentum continued to build for our cat litter business, with sales up 8% sequentially and up slightly from the prior year. We also saw continued growth in edible oil and renewable fuel purification, as well as animal feed additives.

Speaker #4: However, this growth was offset by lower fabric care sales, as customers reduced their inventories in the fourth quarter. In our specialty additives product line, sales of $142 million were 2% below the prior year, as higher sales to paper and packaging customers were offset by a pronounced slowdown in residential construction.

Speaker #4: Which resulted in several customers taking unusually long downtime in December. These customers resumed ordering in January, but we are not expecting this market to improve significantly from the fourth quarter to the first quarter.

Erik Aldag: These customers resumed ordering in January, but we are not expecting this market to improve significantly from Q4 to Q1. Operating income for the quarter was $29 million, $9 million lower than prior year, driven by unfavorable volume and the associated impact on fixed cost absorption at our plants, particularly those serving residential construction. Turning to the full year, consumer and specialty sales were $1.1 billion. Household and personal care sales of $513 million were down 3% from prior year overall, but improved by 5% in the second half of the year compared with the first half. The improvement in the second half was driven by a positive trend in cat litter sales, which were 7% higher in the second half, as we worked with our retail partners to drive higher volumes....

These customers resumed ordering in January, but we are not expecting this market to improve significantly from Q4 to Q1. Operating income for the quarter was $29 million, $9 million lower than prior year, driven by unfavorable volume and the associated impact on fixed cost absorption at our plants, particularly those serving residential construction. Turning to the full year, consumer and specialty sales were $1.1 billion. Household and personal care sales of $513 million were down 3% from prior year overall, but improved by 5% in the second half of the year compared with the first half. The improvement in the second half was driven by a positive trend in cat litter sales, which were 7% higher in the second half, as we worked with our retail partners to drive higher volumes....

Speaker #4: Operating income for the quarter was $29 million, $9 million lower than the prior year, driven by unfavorable volume and the associated impact on fixed cost absorption at our plants, particularly those serving residential construction.

Speaker #4: Turning to the full year, Consumer and Specialties sales were $1.1 billion. Household and Personal Care sales of $513 million were down 3% from the prior year overall, but improved by 5% in the second half of the year compared with the first half.

Speaker #4: The improvement in the second half was driven by a positive trend in cat litter sales, which were 7% higher in the second half, as we worked with our retail partners to drive higher volumes.

Speaker #4: We also continued to make solid progress on some of our key growth initiatives, with full-year sales into edible oil and renewable fuel purification up 17%, and sales of animal feed additives up 12%.

Erik Aldag: We also continued to make solid progress on some of our key growth initiatives, with full-year sales into edible oil and renewable fuel purification up 17%, and sales of animal feed additives up 12%. Sales in specialty additives were $585 million, 4% below prior year. As I mentioned, one of the bigger macro challenges we faced in 2025 was a slowdown in residential construction, which impacted sales for this product line in both Q3 and Q4. Overall volumes to paper and packaging customers were also lower than the prior year, as our new satellites in Asia were offset by declines in North America and Europe, including two paper machine shutdowns that occurred over the past year in the US.

We also continued to make solid progress on some of our key growth initiatives, with full-year sales into edible oil and renewable fuel purification up 17%, and sales of animal feed additives up 12%. Sales in specialty additives were $585 million, 4% below prior year. As I mentioned, one of the bigger macro challenges we faced in 2025 was a slowdown in residential construction, which impacted sales for this product line in both Q3 and Q4. Overall volumes to paper and packaging customers were also lower than the prior year, as our new satellites in Asia were offset by declines in North America and Europe, including two paper machine shutdowns that occurred over the past year in the US.

Speaker #4: Sales in specialty additives were $585 million, 4% below prior year. As I mentioned, one of the bigger macro challenges we faced in 2025 was a slowdown in residential construction.

Speaker #4: This impacted sales for this product line in both the third and fourth quarters. Overall volumes to paper and packaging customers were also lower than the prior year, as our new satellites in Asia were offset by declines in North America and Europe, including two paper machine shutdowns that occurred over the past year in the U.S.

Speaker #4: Despite these market challenges, our sales to paper and packaging customers picked up by 3% compared with the first half of the year, increasing in the second half, as some of our newest satellites continue to ramp up and volumes in Europe and Latin America also ticked higher.

Erik Aldag: Despite these market challenges, our sales to paper and packaging customers picked up in the second half of this year, increasing by 3% compared with the first half of the year, as some of our newest satellites continued to ramp up, and volumes in Europe and Latin America also ticked higher. As I mentioned, overall sales to paper and packaging customers returned to year-over-year growth in Q4. And with the capacity that has come out of the market in North America, operating rates at our customers are very healthy, in the 90% range, which is positive for our volumes. Full-year operating income for the segment was $134 million, compared to $166 million last year, driven by unfavorable volume and mix, and the associated unfavorable cost productivity, as well as temporary cost increases related to our facility upgrades.

Despite these market challenges, our sales to paper and packaging customers picked up in the second half of this year, increasing by 3% compared with the first half of the year, as some of our newest satellites continued to ramp up, and volumes in Europe and Latin America also ticked higher. As I mentioned, overall sales to paper and packaging customers returned to year-over-year growth in Q4. And with the capacity that has come out of the market in North America, operating rates at our customers are very healthy, in the 90% range, which is positive for our volumes. Full-year operating income for the segment was $134 million, compared to $166 million last year, driven by unfavorable volume and mix, and the associated unfavorable cost productivity, as well as temporary cost increases related to our facility upgrades.

Speaker #4: As I mentioned, overall sales to paper and packaging customers returned to year-over-year growth in the fourth quarter. And with the capacity that has come out of the market in North America, operating rates at our customers are very healthy.

Speaker #4: In the 90% range, which is positive for our volumes. Full-year operating income for the segment was $134 million, compared to $166 million last year.

Speaker #4: Driven by unfavorable volume and mix and the associated unfavorable cost productivity, as well as temporary cost increases related to our facility upgrades. Now, let's turn to a review of our Engineered Solutions segment.

Erik Aldag: Now let's turn to a review of our Engineered Solutions segment. Q4 sales in the Engineered Solutions segment grew 2% from prior year to $245 million. Sales in high-temperature technologies of $178 million were up 1% from the prior year, as higher sales to steel customers offset lower foundry sales in North America. As we expected, foundry customers in North America took extended seasonal outages toward the end of the Q4. In the environmental and infrastructure product line, sales of $67 million were 7% higher than prior year. Sales growth was driven by infrastructure drilling, offshore services, and environmental lining systems. This growth was partially offset by lower sales of waterproofing materials for the commercial construction market. Q4 operating income was $40 million, representing another strong performance by the segment, despite mixed market conditions.

Now let's turn to a review of our Engineered Solutions segment. Q4 sales in the Engineered Solutions segment grew 2% from prior year to $245 million. Sales in high-temperature technologies of $178 million were up 1% from the prior year, as higher sales to steel customers offset lower foundry sales in North America. As we expected, foundry customers in North America took extended seasonal outages toward the end of the Q4. In the environmental and infrastructure product line, sales of $67 million were 7% higher than prior year. Sales growth was driven by infrastructure drilling, offshore services, and environmental lining systems. This growth was partially offset by lower sales of waterproofing materials for the commercial construction market. Q4 operating income was $40 million, representing another strong performance by the segment, despite mixed market conditions.

Speaker #4: Fourth quarter sales in the Engineered Solutions segment grew 2% from the prior year to $245 million. Sales in High-Temperature Technologies were $178 million, up 1% from the prior year, as higher sales to foundry customers in North America offset lower sales elsewhere.

Speaker #4: As we expected, foundry customers in North America took extended seasonal outages toward the end of the fourth quarter. In the Environmental and Infrastructure product line, sales of $67 million were 7% higher than prior year.

Speaker #4: Sales growth was driven by infrastructure drilling, offshore services, and environmental lining systems. This growth was partially offset by lower sales of waterproofing materials for the commercial construction market.

Speaker #4: Operating income was $40 million, representing another strong performance by the fourth quarter operating income segment, despite mixed market conditions. Turning to the full year, segment sales were $975 million.

Erik Aldag: Turning to the full year, segment sales were $975 million. Sales in high-temperature technologies were $705 million, representing a 1% decrease from prior year. We continued to see growth in our Asia foundry business, which helped to offset slower demand from foundries serving the agricultural equipment and heavy truck markets in North America. Sales to steel customers were relatively flat overall, as growth in North America was offset by softness in Europe. Full-year sales in the environmental and infrastructure product line were $270 million, up 2% from prior year, primarily driven by higher demand for infrastructure drilling products, environmental lining systems, and offshore water treatment. The segment navigated mixed market conditions and tariff impacts to deliver record operating income of $163 million and record operating margin of 16.7% of sales.

Turning to the full year, segment sales were $975 million. Sales in high-temperature technologies were $705 million, representing a 1% decrease from prior year. We continued to see growth in our Asia foundry business, which helped to offset slower demand from foundries serving the agricultural equipment and heavy truck markets in North America. Sales to steel customers were relatively flat overall, as growth in North America was offset by softness in Europe. Full-year sales in the environmental and infrastructure product line were $270 million, up 2% from prior year, primarily driven by higher demand for infrastructure drilling products, environmental lining systems, and offshore water treatment. The segment navigated mixed market conditions and tariff impacts to deliver record operating income of $163 million and record operating margin of 16.7% of sales.

Speaker #4: Sales in high-temperature technologies were $705 million, representing a 1% decrease from the prior year. We continue to see growth in our Asia foundry business, which helped to offset slower demand from foundries serving the agricultural equipment and heavy truck markets in North America.

Speaker #4: were relatively flat overall, as sales to steel customers' growth in North America was offset by softness in Europe. Full-year sales in the environmental and infrastructure product line were $270 million, up 2% from the prior year, primarily driven by higher demand for infrastructure drilling products, environmental lining systems, and offshore water treatment.

Speaker #4: The segment navigated mixed market conditions and tariff impacts to deliver record operating income of $163 million, and a record operating margin of 16.7% of sales.

Speaker #4: Now let me turn to a summary of our balance sheet and cash flow highlights. Fourth quarter cash from operations was $64 million, bringing the full-year total to $194 million.

Erik Aldag: Now let me turn to a summary of our balance sheet and cash flow highlights. Fourth quarter cash from operations was $64 million, bringing the full-year total to $194 million. We deployed $107 million of capital expenditure, which was a bit higher than the prior year, driven by the higher number of growth investments we've made. Overall, free cash flow was $87 million for the year. After a slow start to the year, our free cash flow averaged 7% of sales from Q2 to Q4. For 2026, we're expecting full-year free cash flow in this more typical range of 6 to 7% of sales. We returned a total of $73 million to shareholders last year, in keeping with our balanced approach to capital deployment.

Now let me turn to a summary of our balance sheet and cash flow highlights. Q4 cash from operations was $64 million, bringing the full-year total to $194 million. We deployed $107 million of capital expenditure, which was a bit higher than the prior year, driven by the higher number of growth investments we've made. Overall, free cash flow was $87 million for the year. After a slow start to the year, our free cash flow averaged 7% of sales from Q2 to Q4. For 2026, we're expecting full-year free cash flow in this more typical range of 6 to 7% of sales. We returned a total of $73 million to shareholders last year, in keeping with our balanced approach to capital deployment.

Speaker #4: We deployed $107 million of capital expenditure, which was a bit higher than the prior year, driven by the higher number of growth investments we've made.

Speaker #4: Overall, free cash flow was $87 million for the year. After a slow start to the year, our free cash flow averaged 7% of sales from Q2 to Q4.

Speaker #4: And for 2026, we're expecting full-year free cash flow in this more typical range of 6% to 7% of sales. We returned a total of $73 million to shareholders last year, in keeping with our balanced approach to capital deployment.

Speaker #4: Our balance sheet remains solid, finishing the year with more than $700 million in liquidity and a net leverage ratio of 1.7 times EBITDA. Now, I'll summarize our outlook for the first quarter.

Erik Aldag: Our balance sheet remains solid, finishing the year with more than $700 million in liquidity and a net leverage ratio of 1.7 times EBITDA. Now I'll summarize our outlook for Q1. Overall, we expect Q1 sales and operating income to be similar to Q4, which would represent approximately 5% growth over the prior year. In the Consumer and Specialty segment, we expect sales to be up mid-single digits versus prior year. In Household and Personal Care, we're building on the momentum we've generated in cat litter and other consumer-oriented products, and we expect this product line to be up mid to high single digits year-over-year in Q1. We've also seen an uptick in fabric care orders after a slow Q4.

Our balance sheet remains solid, finishing the year with more than $700 million in liquidity and a net leverage ratio of 1.7 times EBITDA. Now I'll summarize our outlook for Q1. Overall, we expect Q1 sales and operating income to be similar to Q4, which would represent approximately 5% growth over the prior year. In the Consumer and Specialty segment, we expect sales to be up mid-single digits versus prior year. In Household and Personal Care, we're building on the momentum we've generated in cat litter and other consumer-oriented products, and we expect this product line to be up mid to high single digits year-over-year in Q1. We've also seen an uptick in fabric care orders after a slow Q4.

Speaker #4: Overall, we expect first quarter sales and operating income to be similar to the fourth quarter, which would represent approximately 5% growth over the prior year.

Speaker #4: In the Consumer and Specialties segment, we expect sales to be up mid-single digits versus the prior year. In Household and Personal Care, we're building on the momentum we've generated in cat litter and other consumer-oriented products, and we expect this product line to be up mid- to high-single digits year over year in the first quarter.

Speaker #4: We've also seen an uptick in fabric care orders after a slow fourth quarter. In specialty additives, we're expecting growth in paper and packaging to offset continued softness in residential construction.

Erik Aldag: In Specialty Additives, we're expecting growth in paper and packaging to offset continued softness in residential construction. In Engineered Solutions, we're also expecting mid-single-digit growth in Q1. In high-temperature technologies, we see continued growth in Asia Foundry and continued strong sales to steel customers in North America, which we expect to offset the softness we are seeing in North America Foundry. Our North America Foundry customers continue to be impacted by sluggish agricultural equipment and heavy truck volumes, and a few permanent foundry closures have been announced for Q1. We expect most of the volume from these foundries to be absorbed by other foundries in the US. However, it will take some time for that volume to transition. In environmental and infrastructure, we're expecting continued growth in infrastructure drilling products, as well as offshore water treatment.

In Specialty Additives, we're expecting growth in paper and packaging to offset continued softness in residential construction. In Engineered Solutions, we're also expecting mid-single-digit growth in Q1. In high-temperature technologies, we see continued growth in Asia Foundry and continued strong sales to steel customers in North America, which we expect to offset the softness we are seeing in North America Foundry. Our North America Foundry customers continue to be impacted by sluggish agricultural equipment and heavy truck volumes, and a few permanent foundry closures have been announced for Q1. We expect most of the volume from these foundries to be absorbed by other foundries in the US. However, it will take some time for that volume to transition. In environmental and infrastructure, we're expecting continued growth in infrastructure drilling products, as well as offshore water treatment.

Speaker #4: In engineered solutions, we're also expecting mid-single-digit growth in the first quarter. In high-temperature technologies, we see continued growth in Asia foundry and continued strong sales to steel customers in North America, which we expect to offset the softness we are seeing in North America foundry.

Speaker #4: Our North America foundry customers continue to be impacted by sluggish agricultural equipment and heavy truck volumes, and a few permanent foundry closures have been announced for the first quarter.

Speaker #4: We expect most of the volume from these foundries to be absorbed by other foundries in the US; however, it will take some time for that volume to transition.

Speaker #4: In Environmental and Infrastructure, we're expecting continued growth in infrastructure drilling products, as well as offshore water treatment. For the total company, we're seeing energy and mining costs in the first quarter versus the fourth quarter, which will have a temporary impact on our facing $2 to $3 million higher margins.

Erik Aldag: For the total company, we're facing $2 to 3 million higher energy and mining costs in Q1 versus Q4, which will have a temporary impact on our margins. We expect to offset these higher costs through pricing and improved productivity as we move through the quarter, and the margin impact should be limited to Q1. We expect overall sales and margins to improve as we move through the year, particularly as some exciting new growth opportunities begin to ramp up in Q2. With that, let me turn the call back over to Doug for some additional detail on these opportunities and some perspective on the year ahead. Doug?

For the total company, we're facing $2 to 3 million higher energy and mining costs in Q1 versus Q4, which will have a temporary impact on our margins. We expect to offset these higher costs through pricing and improved productivity as we move through the quarter, and the margin impact should be limited to Q1. We expect overall sales and margins to improve as we move through the year, particularly as some exciting new growth opportunities begin to ramp up in Q2. With that, let me turn the call back over to Doug for some additional detail on these opportunities and some perspective on the year ahead. Doug?

Speaker #4: We expect to offset these higher costs through pricing and improved productivity as we move through the quarter, and the margin impact should be limited to the quarter.

Speaker #4: First, overall sales and margins are expected to improve as we move through the year, particularly as some exciting new growth opportunities begin to ramp up in the second quarter.

Speaker #4: With that, let me turn the call back over to Doug for some additional detail on these opportunities and some perspectives on the year ahead.

Speaker #4: Doug?

Speaker #2: Thanks,

Douglas T. Dietrich: Thanks, Erik. Every first quarter, I like to give you a general perspective on our end market conditions for the year. As Erik just mentioned, we're not currently seeing any significant changes in our end markets and expect them to largely remain stable at current levels through the first half. Several factors could change this outlook, such as lower interest rates, increased consumer confidence in home buying and remodeling, and improvements in on-and-off highway vehicle builds. These factors could take hold this year, but the timing of the resulting inflections is hard to determine at this point. Independent of exactly how our markets play out, the growth investments we made last year were well-timed, and we have captured significant sales growth for 2026 as a result. Let me take you through each product line and give you some examples.

Douglas Dietrich: Thanks, Erik. Every Q1, I like to give you a general perspective on our end market conditions for the year. As Erik just mentioned, we're not currently seeing any significant changes in our end markets and expect them to largely remain stable at current levels through the first half. Several factors could change this outlook, such as lower interest rates, increased consumer confidence in home buying and remodeling, and improvements in on-and-off highway vehicle builds. These factors could take hold this year, but the timing of the resulting inflections is hard to determine at this point. Independent of exactly how our markets play out, the growth investments we made last year were well-timed, and we have captured significant sales growth for 2026 as a result. Let me take you through each product line and give you some examples.

Speaker #1: Eric, every I'd like to generally give you a perspective on our end market conditions for the year. And as Eric just mentioned, we're not currently seeing any significant changes mentioned.

Speaker #1: We're not currently seeing changes in any significant end markets and expect them to largely remain stable at current levels through the first half.

Speaker #1: Several factors change this could outlook , interest lower rates , increased consumer confidence in home such as buying and remodeling , and improvements in on and off highway vehicle builds .

Speaker #1: These factors could take hold this year, but the timing of the resulting inflections is hard to determine at this point. But independent of exactly how our markets play the growth investments we put out, year were timed, and we have significant sales growth for 2026.

Speaker #1: Well, as a result, let me take you through each product line and give you some examples. And household and personal care were set up for what we expect to be a strong year.

Douglas T. Dietrich: In household and personal care, we're set up for what we expect to be a strong year. The result of the investments we made into the US, our US, Canadian, and Chinese cat litter facilities, is that we've secured significant new business this year with major retailers, which will begin to ramp up at the beginning of Q2. We're also completing the expansion of our bleaching earth facility in Turkey to support the rapid growth of our edible oil and renewable fuel purification business. Regulatory changes driving an increased use of sustainable aviation fuels worldwide are creating significant demand for our best-in-class bleaching earth products. We've also recently qualified our products at a large refinery in Asia, which opens this large market to us.

In household and personal care, we're set up for what we expect to be a strong year. The result of the investments we made into the US, our US, Canadian, and Chinese cat litter facilities, is that we've secured significant new business this year with major retailers, which will begin to ramp up at the beginning of Q2. We're also completing the expansion of our bleaching earth facility in Turkey to support the rapid growth of our edible oil and renewable fuel purification business. Regulatory changes driving an increased use of sustainable aviation fuels worldwide are creating significant demand for our best-in-class bleaching earth products. We've also recently qualified our products at a large refinery in Asia, which opens this large market to us.

Speaker #1: The result of the investments we made into the US . Our US , Canadian and Chinese cat litter facilities . we've secured Is that significant new business this year with retailers , which will begin to ramp up at the beginning of the second quarter .

Speaker #1: We're also completing the expansion of our bleaching earth facility in Turkey to support the rapid growth of our edible oil and renewable fuel business.

Speaker #1: Regulatory changes driving increased use of sustainable aviation fuels worldwide are creating significant demand for our best in bleaching class earth products . We've also recently qualified our products at a refinery large in Asia , which opens this large market to us .

Douglas T. Dietrich: Over the past five years, this business has grown at an average of 15% per year, and this year, we expect that growth rate to accelerate further. Lastly, we're expanding capacity for our animal health and fabric care products with new partnerships and products in development, and we expect to share more on these initiatives over the next two quarters. In specialty additives, we have three new paper and packaging satellite plants coming online this year in Asia, which will drive solid volume growth. We've recently shared details in a press release about our multi-year expansion in the region, which continues to provide a solid pipeline of opportunities for us, and that will yield additional contracts and volume growth going forward.

Over the past five years, this business has grown at an average of 15% per year, and this year, we expect that growth rate to accelerate further. Lastly, we're expanding capacity for our animal health and fabric care products with new partnerships and products in development, and we expect to share more on these initiatives over the next two quarters. In specialty additives, we have three new paper and packaging satellite plants coming online this year in Asia, which will drive solid volume growth. We've recently shared details in a press release about our multi-year expansion in the region, which continues to provide a solid pipeline of opportunities for us, and that will yield additional contracts and volume growth going forward.

Speaker #1: Over the past five years, this business has grown at an average of 15% per year, and this year we expect that growth rate to further accelerate.

Speaker #1: Lastly , we're expanding capacity for our animal health and fabric care products new with partnerships development . And we expect to share more on these initiatives over the next and two quarters in specialty Additives , have three new paper and packaging , satellite we plants coming online this year in drive solid will volume Asia , which growth .

Speaker #1: We've shared details in a press release about our multiyear, recently expansion in the region, which continues to pipeline of opportunities for us, and that will yield contracts and additional volume growth forward going.

Douglas T. Dietrich: The main uncertainty this year in this product line is the residential construction market and the question of when it will begin to strengthen from its current condition. When it does, this will have a positive impact on our GCC and specialty PCC volumes. Moving to the engineered solutions segment, our high-temperature technologies product line is positioned for a solid year. Steel production in the US remains stable, and we've seen some recent improvement in Europe. We're commissioning six additional MINSCAN units this year and continue to see strong pull for our latest high-performance refractory formulations. Foundry output in the US, however, remains relatively slow due to flat auto builds and weaker heavy truck, and agricultural equipment demand. Asia presents a large addressable market for us, and we continue to see opportunities to expand our business there.

The main uncertainty this year in this product line is the residential construction market and the question of when it will begin to strengthen from its current condition. When it does, this will have a positive impact on our GCC and specialty PCC volumes. Moving to the engineered solutions segment, our high-temperature technologies product line is positioned for a solid year. Steel production in the US remains stable, and we've seen some recent improvement in Europe. We're commissioning six additional MINSCAN units this year and continue to see strong pull for our latest high-performance refractory formulations. Foundry output in the US, however, remains relatively slow due to flat auto builds and weaker heavy truck, and agricultural equipment demand. Asia presents a large addressable market for us, and we continue to see opportunities to expand our business there.

Speaker #1: The main uncertainty in this year is the product line residential construction market, and the question of when it will begin to strengthen from its current condition.

Speaker #1: When it does, this will have a positive impact on our GCC and specialty PCC volumes. Moving to the Engineered Solutions segment, our High Temperature Technologies product line is positioned for a solid year.

Speaker #1: Steel production in the US remains stable, and we've seen some recent improvement in Europe. We're commissioning six additional Minskad units this year and continue to see strong pull for our latest high-performance refractory formulations.

Speaker #1: Foundry output in the U.S., however, remains relatively slow due to flat auto builds and weaker heavy truck and agricultural equipment demand.

Speaker #1: presents a Asia addressable market for us , and we large continue to see opportunities to expand our business . There . The China Foundry market proved to be resilient year , and last we expect to see strong continued volume there .

Douglas T. Dietrich: The China foundry market proved to be resilient last year, and we expect to see continued strong volume growth there again this year. In the environmental and infrastructure product line, our commercial construction and large environmental lining markets are beginning to trend in a positive direction. FLUOROSORB continues its qualification track, with hundreds of trials taking place at water utilities across the US and in Europe. We have 10 new FLUOROSORB water utility installations scheduled for this year, which will more than double our current footprint. We're also seeing continued strong demand for our infrastructure drilling products and expect this strength to continue throughout the year. In summary, the specific actions we took last year in support of our long-term strategy have put us in a position to deliver a strong 2026. With relatively stable markets, we see growth returning to the mid-single-digit range.

The China foundry market proved to be resilient last year, and we expect to see continued strong volume growth there again this year. In the environmental and infrastructure product line, our commercial construction and large environmental lining markets are beginning to trend in a positive direction. FLUOROSORB continues its qualification track, with hundreds of trials taking place at water utilities across the US and in Europe. We have 10 new FLUOROSORB water utility installations scheduled for this year, which will more than double our current footprint. We're also seeing continued strong demand for our infrastructure drilling products and expect this strength to continue throughout the year. In summary, the specific actions we took last year in support of our long-term strategy have put us in a position to deliver a strong 2026. With relatively stable markets, we see growth returning to the mid-single-digit range.

Speaker #1: Again this year, in the environmental infrastructure product line, our commercial construction and large environmental lining markets are beginning to trend in a positive direction.

Speaker #1: Laura's orb continues its qualification track with trials hundreds of taking place at water utilities across the in US and Europe . We have ten new floors of water , water utility installations scheduled for this which will more than double our current footprint year , .

Speaker #1: We're also seeing continued strong demand for our infrastructure drilling products and expect this strength to continue throughout the year. In specific summary, the actions we took last year in support of our long-term strategy have put us in a position to deliver a strong 2026 with relatively stable markets.

Speaker #1: see We growth the mid-single returning to digit range . Should the US construction and foundry end markets improve this year , 2026 will turn out to be an even stronger year for MTI .

Douglas T. Dietrich: Should the US construction and foundry end markets improve this year, 2026 will turn out to be an even stronger year for MTI. Before we wrap up, I also wanna let you know that we're planning another investor event this year, where we will highlight many of our newest technologies and update you on our progress against our five-year targets. We also have some exciting new projects in our innovation pipeline that we hope to share with you. These projects are targeted at opportunities created by the regulatory and tariff-related policy changes around the world, that are driving the increased importance of, and demand for, local mineral supply. We feel we are uniquely positioned with some of our technologies to turn these opportunities into significant renew revenue streams for MTI. More to come on this, so stay tuned for details.

Should the US construction and foundry end markets improve this year, 2026 will turn out to be an even stronger year for MTI. Before we wrap up, I also wanna let you know that we're planning another investor event this year, where we will highlight many of our newest technologies and update you on our progress against our five-year targets. We also have some exciting new projects in our innovation pipeline that we hope to share with you. These projects are targeted at opportunities created by the regulatory and tariff-related policy changes around the world, that are driving the increased importance of, and demand for, local mineral supply. We feel we are uniquely positioned with some of our technologies to turn these opportunities into significant renew revenue streams for MTI. More to come on this, so stay tuned for details.

Speaker #1: Before we wrap up, I also want to let you know that we're planning another investor event this year, where we will highlight many of our newest technologies and update you on our progress against our five-year targets.

Speaker #1: We also have some exciting new projects in our innovation pipeline that we hope to share with you. These projects are targeted at opportunities created by the regulatory and tariff-related policy changes around the world that are driving the increased importance of, and demand for, local supply mineral.

Speaker #1: We feel we are uniquely, some of our positioned with technologies to turn these opportunities into significant new revenue streams for MTI. More to come on this, so stay tuned for details.

Douglas T. Dietrich: Again, thank you for joining today, and thank you to everyone at MTI for your ongoing focus on safety. With that, let's open the call to questions.

Again, thank you for joining today, and thank you to everyone at MTI for your ongoing focus on safety. With that, let's open the call to questions.

Speaker #1: Again, thank you for joining today, and thank you to everyone at MTI for your ongoing focus on safety. With that, let's open the call to questions.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question today is from Mike Harrison with Seaport Research Partners. Please go ahead.

Speaker #2: We will now begin the question and answer session. To ask a question, you may star, then one on your telephone keypad.

Speaker #2: If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.

Speaker #2: At this time, we will pause momentarily to assemble our roster. Our first question today is from Mike Harrison with Seaport Research Partners.

Speaker #2: Please go ahead .

Mike Harrison: Hi, good morning.

Douglas T. Dietrich: Hi, Mike.

Douglas Dietrich: Hi, Mike.

Erik Aldag: Hi, Mike.

Speaker #3: Hi . Good .

Mike Harrison: Wanted to start out with consumer and specialties segment. The operating margin performance there was the worst you've had in a few years, and I know you went through some of the fixed cost absorption issues there, as well as maybe some of the inefficiencies associated with some of the work you're doing in pet care. But I was just curious, was the performance there worse than you expected, or was it in line? And I guess, maybe as we start to think about what margin could look like in that segment for 2026, can you maybe give us some guidelines or puts and takes, in terms of how we should think about that margin performance next year, or this year, I guess?

Speaker #1: Hi, Mike. Hi, Mike.

Speaker #3: Wanted to start out with Consumer and Specialty segment. The operating margin performance there was the worst you've had in a few years.

Speaker #3: And I know you went through some of the fixed cost absorption issues there, as well as maybe some of the inefficiencies associated with some of the work you're doing in Pet Care.

Speaker #3: I was But curious , was the there performance worse than you expected , or was it in line ? And I guess maybe as we start to think about what margin could like in that look segment for 2026 , can you maybe give us some some guidelines or puts and takes in terms of how we should think about that margin performance next year ?

Erik Aldag: Yeah. Hi, Mike, this is Erik. Thanks for the question. So as far as, and I'm assuming you're talking about the fourth quarter margin, so I'll start there. As far as that, I would say it was in line with what we were expecting, apart from the softness, the softer than expected residential construction demand that we saw later in the quarter. And that had kind of a twofold impact on the margins in that segment. First, the residential construction products that we sell are relatively high contribution margin products, so there's an unfavorable mix impact that happens when that volume falls off.

Erik Aldag: Yeah. Hi, Mike, this is Erik. Thanks for the question. So as far as, and I'm assuming you're talking about the Q4 margin, so I'll start there. As far as that, I would say it was in line with what we were expecting, apart from the softness, the softer than expected residential construction demand that we saw later in the quarter. And that had kind of a twofold impact on the margins in that segment. First, the residential construction products that we sell are relatively high contribution margin products, so there's an unfavorable mix impact that happens when that volume falls off.

Speaker #3: This year , I guess

Speaker #4: This is Erik. Mike, thanks for this.

Speaker #4: question . , yeah . So as Hi , far as and I'm assuming you're talking about the fourth quarter margin . So I'll start there .

Speaker #4: As far as that , I would say it was in line with what we were expecting . Apart from the softness , the softer expected residential than construction demand that we saw later in the quarter and had kind of that impact on the a two fold margins in that segment .

Speaker #4: First, the residential products that we sell into construction are relatively high contribution margin products. So there's an unfavorable impact that mix happens when that volume falls off.

Erik Aldag: And then secondly, as I mentioned, the fixed cost absorption impact of a sharp drop-off in volumes at these facilities; it's just hard to pull out the fixed and semi-variable costs from those facilities, when you see a volume shift like that. So those were the main impacts in the fourth quarter. You mentioned the temporary impacts associated with the plant upgrades that we did. Most of that, I would say, was in the second and third quarter, although we did... You know, we were starting to ramp up this facility that we just upgraded in the fourth quarter, so we didn't really see the full benefit of that upgrade yet in the fourth quarter. I would say going forward, the biggest thing that's gonna drive margins up in that segment is volume.

And then secondly, as I mentioned, the fixed cost absorption impact of a sharp drop-off in volumes at these facilities; it's just hard to pull out the fixed and semi-variable costs from those facilities, when you see a volume shift like that. So those were the main impacts in the Q4. You mentioned the temporary impacts associated with the plant upgrades that we did. Most of that, I would say, was in the second and third quarter, although we did... You know, we were starting to ramp up this facility that we just upgraded in the Q4, so we didn't really see the full benefit of that upgrade yet in the Q4. I would say going forward, the biggest thing that's gonna drive margins up in that segment is volume.

Speaker #4: And then secondly , as I the fixed cost absorption mentioned , impact sharp of a drop off volumes at these in facilities . just hard to It's pull out fixed and semi the costs from those facilities .

Speaker #4: When volume shifts, like you see that. So those were mainly the impacts in the fourth quarter. You mentioned the temporary impacts associated with the plant we did.

Speaker #4: Most of that I would say was in the quarter , second and the third we did , although we were starting to ramp up facility that this we just upgraded in the fourth didn't quarter .

Speaker #4: see the full benefit really of that So we . Of that upgrade . Yet in the fourth quarter . I would say going forward , the biggest thing that's going to drive margins up in that segment is volume .

Erik Aldag: I showed you the MTI operating bridge, and, and volume and mix is the biggest driver of the change in margin that we saw from 2024 to 2025, and a lot of that was in the consumer and specialties segment. I can say we're feeling confident about the volume growth that we've got ahead for consumer and specialties, and that's gonna drive the majority of the margin improvement, in addition to not having those kind of one-time costs that we had last year.

I showed you the MTI operating bridge, and, and volume and mix is the biggest driver of the change in margin that we saw from 2024 to 2025, and a lot of that was in the consumer and specialties segment. I can say we're feeling confident about the volume growth that we've got ahead for consumer and specialties, and that's gonna drive the majority of the margin improvement, in addition to not having those kind of one-time costs that we had last year.

Speaker #4: I showed you the MTI operating bridge, and volume and mix is the biggest driver of the change we saw in margin from '24 to '25.

Speaker #4: And a lot of that was in the consumer and specialty segment . I can say we've got we're feeling confident about the volume growth that we've got ahead for consumer and specialties , and that's going to drive majority the of the margin improvement .

Speaker #4: In addition to not having those kind of one-time WE costs that we had last year.

Mike Harrison: All right. Very helpful. And then, I wanted to just dig in a little bit on the press release you put out recently, talking about your paper PCC business, some of the new satellites that have come on and are still to come on during 2026. Was hoping you could just give a little more color on how you're seeing the market. Presumably, you know, North America still is maybe a little bit soft, but you would expect to see some growth in Asia. Maybe also talk about the pipeline of opportunities for future satellites as you see it right now.

Speaker #3: All right . Very helpful . then I wanted to just dig And in little bit on the press release . You put out recently , talking about your paper , PCC business .

Speaker #3: Some of the new satellites that have come on, and are still to come on during 2026. I was hoping you could just give a little more color on how you're seeing the market.

Speaker #3: You know, North, presumably, America still is maybe a little bit soft, but you would expect to see some growth in Asia.

Speaker #3: Maybe also about the pipeline for future opportunities—satellites, as you see it right now.

Douglas T. Dietrich: Yeah, thanks, Mike. This is Doug. I'll start and then maybe I'll pass it to DJ to give you a little bit more color. We see that Asia presents and continues to present, you know, a good growth opportunity for us. It's a large market, paper production, relatively stable there. But what we're seeing is more, we've always talked about what we call penetration, you know. So PCC is the pigment being used in that market. We're probably about only 50% penetrated, where in Europe and North America, it's pretty much 100% penetrated with use of PCC in paper and packaging, or paper in particular.

Douglas Dietrich: Yeah, thanks, Mike. This is Doug. I'll start and then maybe I'll pass it to DJ to give you a little bit more color. We see that Asia presents and continues to present, you know, a good growth opportunity for us. It's a large market, paper production, relatively stable there. But what we're seeing is more, we've always talked about what we call penetration, you know. So PCC is the pigment being used in that market. We're probably about only 50% penetrated, where in Europe and North America, it's pretty much 100% penetrated with use of PCC in paper and packaging, or paper in particular.

Speaker #1: Thanks , Mike . Yeah . This is Doug . I'll start and then maybe I'll pass it to D.J. to give you a little bit more color .

Speaker #1: We see that Asia presents and continues present , to you know , a good growth opportunity for us . It's a large market paper production , relatively stable .

Speaker #1: There . what we're But we've always talked about what we seeing is more call penetration , you know , so PCC is the pigment being used in that market that that's we're probably about only 50% penetrated .

Speaker #1: Where in Europe and North America, it's pretty penetrated with use—much, almost 100%—of PCC and paper and packaging, or paper in particular. And so, we see a large opportunity to continue to base.

Douglas T. Dietrich: And so we see a large opportunity to continue to drive our base PCC business in Asia, and that's gonna, that's gonna occur through consolidation of smaller paper mills into larger mills and newer machines, and when you're doing that, you're gonna continue. That's been going on now for, you know, a decade, so we see that continuing. But more so, it presents a great pipeline for us in other opportunities, and those opportunities, like our new technologies, like NewYield, where we're, you know, repurposing some waste streams and movement into packaging, okay? So large, and the packaging market is growing. It's growing in Asia, and so as we adapt our technologies and our products from, you know, kind of base printing and writing paper into packaging and into these new technologies, it presents an even bigger opportunity for us.

And so we see a large opportunity to continue to drive our base PCC business in Asia, and that's gonna, that's gonna occur through consolidation of smaller paper mills into larger mills and newer machines, and when you're doing that, you're gonna continue. That's been going on now for, you know, a decade, so we see that continuing. But more so, it presents a great pipeline for us in other opportunities, and those opportunities, like our new technologies, like NewYield, where we're, you know, repurposing some waste streams and movement into packaging, okay? So large, and the packaging market is growing. It's growing in Asia, and so as we adapt our technologies and our products from, you know, kind of base printing and writing paper into packaging and into these new technologies, it presents an even bigger opportunity for us.

Speaker #1: PCC drive our business in Asia . And that's going to that's going to through paper mills into larger mills and newer machines . going to doing that , you're That's been consolidation of continue .

Speaker #1: And when you're smaller now going on know , for for a decade . So that we see that you continuing . But more so it presents a great pipeline for us in other opportunities .

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