Q1 2026 Ecovyst Inc Earnings Call

May 5, 2026

Speaker #2: Thank you for your continued patience. Your meeting will begin shortly. For optimal sound quality, we ask that you silence your electronic devices during today's presentation.

Speaker #2: If you need assistance at any time, please press star zero. And a member of our team will be happy to help.

Speaker #4: Good morning. My name is Stephanie, and I'll be your conference operator today. Welcome to the Ecovyst First Quarter 2026 earnings call and webcast. Please note today's call is being recorded and shall run approximately one hour.

Operator 3: Good morning. My name is Stephanie, and I'll be your conference operator today. Welcome to the Ecovyst Q1 2026 Earnings Call and Webcast. Please note today's call is being recorded and should run approximately 1 hour. Currently, all participants have been placed in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question at that time, please press star one on your telephone keypad. I'd like to now hand the call over to Gene Shiels, Director of Investor Relations. Please go ahead.

Operator: Good morning. My name is Stephanie, and I'll be your conference operator today. Welcome to the Ecovyst Q1 2026 Earnings Call and Webcast. Please note today's call is being recorded and should run approximately 1 hour. Currently, all participants have been placed in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question at that time, please press star one on your telephone keypad. I'd like to now hand the call over to Gene Shiels, Director of Investor Relations. Please go ahead.

Speaker #4: Currently, all participants have been placed in a listen-only mode to prevent any background noise. After the speakers remarks, there will be a question-and-answer session.

Speaker #4: If you'd like to ask a question at that time, please press star one on your telephone keypad. I'd like to now hand the call over to Jean Shields, Director of Investor Relations.

Speaker #4: Please go ahead.

Speaker #5: Thank you, operator. Good morning, and welcome to Ecovyst's first quarter 2026 earnings call. With me on the call this morning are Kurt Bitting, Ecovyst Chief Executive Officer, and Mike Feehan, Ecovyst Chief Financial Officer.

Gene Shiels: Thank you, operator. Good morning, and welcome to Ecovyst's Q1 2026 Earnings Call. With me on the call this morning are Kurt Bitting, Ecovyst Chief Executive Officer, and Mike Feehan, Ecovyst Chief Financial Officer. Following our prepared remarks, we will take your questions. Please note that some of the information shared today is forward-looking information, including information about the company's financial and operating performance, strategies, our anticipated end-use demand trends, and our 2026 financial outlook. This information is subject to risks and uncertainties that could cause the actual results in the implementation of the company's plans to vary materially. Any forward-looking information shared today speaks only as of this date. These risks are discussed in the company's filings with the SEC.

Speaker #5: Following our prepared remarks, we'll take your questions. Please note that some of the information shared today is forward-looking information, including information about the company's financial and operating performance, strategies, our anticipated end-use demand trends, and our 2026 financial outlook.

Speaker #5: This information is subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. Any forward-looking information shared today speaks only as of this date.

Speaker #5: These risks are discussed in the company's filings with the SEC. Reconciliations of non-GAAP financial measures mentioned in today's call with their corresponding GAAP measures can be found in our earnings release, and in the presentation materials posted in the Investor section of our website.

Gene Shiels: Reconciliations of non-GAAP financial measures mentioned in today's call with their corresponding GAAP measures can be found in our earnings release and in the presentation materials posted in the investor section of our website. I will now hand the call over to Kurt.

Speaker #5: I'll now hand the call over to Kurt.

Speaker #6: Thank you, Jean, and good morning. Consistent with the positive outlook for 2026 that we shared in our fourth quarter earnings call in late February, our first quarter results provide an excellent start to the year.

Kurt Bitting: Thank you, Gene, and good morning. Consistent with the positive outlook for 2026 that we shared in our Q4 earnings call in late February, our Q1 results provide an excellent start to the year, with strong growth in both our regeneration services business and for virgin sulfuric acid. Sales for regeneration services were up on a double-digit percentage basis compared to Q1 2025, reflecting high refinery utilization, favorable alkylate economics, and lower planned customer downtime compared to the year-ago quarter. Q1 sales for virgin sulfuric acid were also up significantly, benefiting from increased mining demand and the contribution from the Waggaman sulfuric acid assets that we acquired last May.

Speaker #6: With strong growth in both our regeneration services business and for virgin sulfuric acid, sales for regeneration services were up on a double-digit percentage basis compared to the first quarter of 2025. This reflects high refinery utilization, favorable alkaline economics, and lower planned customer downtime compared to the year-ago quarter.

Speaker #6: First quarter sales for virgin sulfuric acid were also up significantly. Benefiting from increased mining demand and the contribution from the Wagyu sulfuric acid assets that we acquired last May.

Speaker #6: As a result of the strong volume growth and positive pricing in the quarter, we reported adjusted EBITDA of $40 million which is up 87% compared to the first quarter of 2025.

Kurt Bitting: As a result of the strong volume growth and positive pricing in the quarter, we reported adjusted EBITDA of $40 million, which is up 87% compared to Q1 2025. During the quarter, we also maintained our focus on the implementation of our long-term strategic plan to accelerate growth and enhance value for our stockholders. During Q1, we repurchased approximately $36 million worth of our outstanding shares.

Speaker #6: During the quarter, we also maintained our focus on the implementation of our long-term strategic plan to accelerate growth and enhance value for our stockholders.

Speaker #6: During the first quarter, we repurchased approximately $36 million worth of our outstanding shares. And with regard to the pursuit of inorganic growth opportunities, our efforts over the course of the first quarter led us to last Friday's announcement that we had reached an agreement to acquire the Calabrian sulfur dioxide and sulfur derivatives business a transaction that will broaden our Ecovyst for attractive growth in end-uses we currently serve.

Kurt Bitting: With regard to the pursuit of inorganic growth opportunities, our efforts over the course of the Q1 led us to last Friday's announcement that we had reached an agreement to acquire the Calabrian sulfur dioxide and sulfur derivatives business from INEOS Enterprises in a transaction that will broaden our portfolio and further position Ecovyst for attractive growth in end uses we currently serve, such as mining and water treatment, and new end uses, including pharma and food processing. As we move to the next two slides, I want to provide a brief overview of the Calabrian business and highlight the details and strategic merits of this transaction. What makes the Calabrian acquisition so compelling is how closely the business aligns with Ecovyst, strategically, operationally, and commercially. The combination directly leverages our core competencies in sulfur chemistry and extends our platform into highly complementary adjacent chemistries.

Speaker #6: Such as mining and water treatment and new end-uses including pharma and food processing. As we move to the next two slides, I want to provide a brief overview of the Calabrian business and highlight the details and strategic merits of this transaction.

Speaker #6: What makes the Calabrian acquisition so compelling is how closely the business aligns with Ecovyst strategically, operationally, and commercially. The combination directly leverages our core competencies in sulfur into highly complementary adjacent chemistries.

Speaker #6: Just as Ecovyst is a leading provider of virgin sulfuric acid and sulfuric acid regeneration services, Calabrian is a leading provider of sulfur dioxide and sulfur-based derivatives.

Kurt Bitting: Just as Ecovyst is a leading provider of virgin sulfuric acid and sulfuric acid regeneration services, Calabrian is a leading provider of sulfur dioxide and sulfur-based derivatives. It is the sole on-purpose producer of sulfur dioxide in North America with a significant supply share, a leading producer of sodium bisulfite alongside Ecovyst, a leading producer of sodium thiosulfate, and the sole North American producer of sodium metabisulfite. These products are critical inputs into a range of attractive end uses that overlap meaningfully with the markets we serve today, reinforcing the natural fit between the two businesses. Looking at a rough breakdown of Calabrian's 2025 sales, nearly a third of sales were to the mining sector, where we have well-established and long-standing relationships.

Speaker #6: It is the sole on-purpose producer of sulfur dioxide in North America with a significant supply share. A leading producer of sodium bisulfite alongside Ecovyst.

Speaker #6: A leading producer of sodium thiosulfate. And the sole North American producer of sodium metabisulfate. These products are critical inputs into a range of attractive end-uses that overlap meaningfully with the markets we serve today.

Speaker #6: Reinforcing the natural fit between the two businesses. Looking at a rough breakdown of Calabrian's 2025 sales, nearly a third of sales were to the mining sector where we have well-established and longstanding relationships.

Speaker #6: Roughly a quarter of Calabrian's 2025 sales were in water treatment, a market that we currently participate in with our virgin sulfuric acid, sodium bisulfate, and aluminum sulfate sales.

Kurt Bitting: Roughly a quarter of Calabrian's 2025 sales were in water treatment, a market that we currently participate in with our virgin sulfuric acid, sodium bisulfite, and aluminum sulfate sales. Approximately 15% of sales were into specialty chemical applications, and the balance of 2025 sales included sales into food preservatives and other applications. Similar to Ecovyst, Calabrian has long-standing customer relationships with blue-chip customers, significant long-term contracts, and sales visibility. In terms of the strategic fit with Ecovyst, I'll first say that Calabrian has a seasoned and engaged management team, and we look forward to leveraging their expertise and enthusiasm as we move forward on a combined basis. Equally as important, Calabrian provides us with a very attractive opportunity to expand our reach and product offering in sulfur-related chemistries while leveraging our existing supply chain and manufacturing infrastructure.

Speaker #6: Approximately 15% of sales were into specialty chemical applications, and the balance of 2025 sales included sales into food preservatives and other applications. Similar to Ecovyst, Calabrian has longstanding customer relationships with blue-chip customers, significant long-term contracts, and sales visibility.

Speaker #6: In terms of the strategic fit with Ecovyst, I'll first say that Calabrian has a seasoned and engaged management team. And we look forward to leveraging their expertise and enthusiasm as we move forward on a combined basis.

Speaker #6: Equally as important, Calabrian provides us with a very attractive opportunity to expand our reach and product offering in sulfur-related chemistries while leveraging our existing supply chain and manufacturing infrastructure.

Speaker #6: In doing so, it provides an opportunity to diversify our sales mix and increase our penetration into high-growth industries such as mining, water treatment, pharma, and food processing.

Kurt Bitting: In doing so, it provides an opportunity to diversify our sales mix and increase our penetration into high-growth industries such as mining, water treatment, pharma, and food processing. Calabrian has two manufacturing locations, Port Neches in Texas, situated in the middle of our existing Gulf Coast infrastructure, and the Timmins site in Ontario, Canada, which we expect to broaden our exposure to Canada's growing mining sector. Given our existing footprint in the Gulf Coast region, the acquisition provides opportunities to leverage our existing supply chain and manufacturing infrastructure. Finally, the financial profile is equally compelling. Calabrian brings attractive growth prospects, strong margins, and a track record of high cash conversion.

Speaker #6: Calabrian has two manufacturing locations. Port Neches in Texas situated in the middle of our existing Gulf Coast infrastructure and the Timmins site in Ontario, Canada, which we expect to broaden our exposure to Canada's growing mining sector.

Speaker #6: Given our existing footprint in the Gulf Coast region, the acquisition provides opportunities to leverage our existing supply chain and manufacturing infrastructure. Finally, the financial profile is equally compelling.

Speaker #6: Calabrian brings attractive growth prospects, strong margins, and a track record of high cash conversion. On a trailing 12-month adjusted EBITDA of approximately $24 million, the $190 million purchase price represents a multiple of approximately eight times.

Kurt Bitting: On a trailing twelve-month adjusted EBITDA of approximately $24 million, the $190 million purchase price represents a multiple of approximately 8x, stepping down to roughly 7x as we capture synergies over the next 3 years. The transaction is expected to close by the end of Q2. We plan to fund the acquisition through cash on hand and a new debt offering, with specific allocation to be determined as we move towards closing. At this time, we expect that our pro forma net debt leverage ratio at close of the transaction will be approximately 2x. Before I hand the call over to Mike to review the details of our Q1, I want to comment on our expectations for near-term demand trends and our confidence in the longer-term outlook for Ecovyst.

Speaker #6: Stepping down to roughly seven times as we capture synergies over the next three years. The transaction is expected to close by the end of the second quarter.

Speaker #6: We plan to fund the acquisition through cash on hand and a new debt offering, with the specific allocation to be determined as we move towards closing.

Speaker #6: At this time, we expect that our pro forma net debt leverage ratio at close of the transaction will be approximately two times. Before I hand the call over to Mike to review the details of our first quarter, I want to comment on our expectations for near-term demand trends and our confidence in the longer-term outlook for Ecovyst.

Speaker #6: While the geopolitical and global macroeconomic environment remains dynamic, our outlook remains very positive. As a leading provider of products and services that are essential to our North American-based customers, we expect demand trends to remain favorable, underpinning our growth expectations for 2026.

Kurt Bitting: While the geopolitical and global macroeconomic environment remains dynamic, our outlook remains very positive. As a leading provider of products and services that are essential to our North American-based customers, we expect demand trends to remain favorable, underpinning our growth expectations for 2026. We see US refinery utilization remaining high in 2026, with far less planned and unplanned customer downtime than we experienced in 2025. As such, we continue to expect higher volume for our regeneration services in 2026 with favorable contract pricing. We also expect volumetric growth for virgin sulfuric acid in 2026, with increased sales into mining and a full year of contribution from the Waggaman sulfuric acid assets we acquired last year. Sales into the nylon end use are expected to be generally in line with 2025, and we anticipate relative stability across the broader range of industrial applications.

Speaker #6: We see U.S. refinery utilization remaining high in 2026, with far less planned and unplanned customer downtime than we experienced in 2025. As such, we continue to expect higher volume for our regeneration services in 2026, with favorable contract pricing.

Speaker #6: We also expect volumetric growth for virgin sulfuric acid in 2026 with increased sales into mining and a full year of contribution from the wagon and sulfuric acid assets we acquired last year.

Speaker #6: Sales into the nylon end-use are expected to be generally in line with 2025 and we anticipate relative stability across the broader range of industrial applications.

Speaker #6: Looking beyond 2026, we believe the long-term outlook remains extremely favorable. We expect that high refinery utilization will continue to support demand for our regeneration services business.

Kurt Bitting: Looking beyond 2026, we believe the long-term outlook remains extremely favorable. We expect that high refinery utilization will continue to support demand for our regeneration services business. For virgin sulfuric acid, we believe we are positioned for growth, with sales into mining applications benefiting from multiyear expansion projects, growth in industrial applications associated with onshoring, and the prospect for continued sales recovery in the nylon end use. I'll now turn the call over to Mike, who will review our financial results.

Speaker #6: And for virgin sulfuric acid, we believe we are positioned for growth with sales into mining applications, benefiting from multi-year expansion projects, growth in industrial applications associated with onshoring, and the prospect for continued sales recovery in the nylon end-use.

Speaker #6: I'll now turn the call over to Mike, who will review our financial results.

Speaker #5: Thank you, Kurt, and good morning. We are very pleased with our results for the first quarter and believe that we are off to a great start to the year as stable demand and favorable pricing help deliver solid results in the first quarter.

Mike Feehan: Thank you, Kurt, and good morning. We are very pleased with our results for Q1 and believe that we are off to a great start to the year. A stable demand and favorable pricing helped deliver solid results in Q1. Our sales were up 50% compared to Q1 of last year. Higher sales volume for both virgin sulfuric acid and regeneration services, as well as positive pricing translated into adjusted EBITDA of $40 million, up $19 million compared to the prior year Q1, and ahead of our previously provided guidance range. Our favorable earnings compared to our guidance range were driven by higher-than-expected volume and pricing. We realized stronger-than-expected volume in regeneration services and, to a lesser extent, treatment services compared to our original expectations.

Speaker #5: Our sales were up 50% compared to the first quarter of last year. Higher sales volume for both virgin sulfuric acid and regeneration services as well as positive pricing translated into adjusted EBITDA of $40 million.

Speaker #5: Up 19 million dollars compared to the prior year first quarter and ahead of our previously provided guidance range. Our favorable earnings compared to our guidance range were driven by higher than expected volume and pricing.

Speaker #5: We realize stronger than expected volume in regeneration services and to a lesser extent treatment services compared to our original expectations. With a significant spike in cost of sulfur we also realized a temporary benefit associated with the timing between when we incur the cost of our sulfur purchases and when we pass through those costs to our customers.

Mike Feehan: With a significant spike in cost of sulfur, we also realized a temporary benefit associated with the timing between when we incur the cost of our sulfur purchases and when we pass through those costs to our customers. Adjusted free cash flow for Q1 was $4 million. Our net debt leverage ratio at quarter end was 1.2 times, unchanged from year-end, and our available liquidity remains strong at $237 million as of 31 March. As we look at the Q1 financial results on the next slide, sales were $215 million, up $72 million. Excluding the $33 million impact of higher sulfur costs passed through in price, sales were up nearly 27%. Regeneration services volume was driven by less customer downtime compared to Q1 2025.

Speaker #5: Adjusted free cash flow for the first quarter was $4 million. Our net debt leverage ratio at quarter end was 1.2 times, unchanged from year end, and our available liquidity remained strong at $237 million as of March 31st.

Speaker #5: As we look at the first quarter financial results on the next slide, sales were $215 million up 72 million. Excluding the $33 million impact of higher sulfur costs, pass-through in price, sales were up nearly 27%.

Speaker #5: Regeneration services volume was driven by less customer downtime compared to the first quarter of 2025. Sales volume for virgin sulfuric acid was also higher year over year reflecting the contribution of the wagon and sulfuric acid assets acquired in May of 2025 and higher overall demand including into nylon and mining applications.

Mike Feehan: Sales volume for virgin sulfuric acid was also higher year over year, reflecting the contribution of the Waggaman sulfuric acid assets acquired in May of 2025 and higher overall demand, including into nylon and mining applications. Average selling prices were higher, driven by virgin sulfuric acid pricing and favorable contract pricing for regenerated sulfuric acid. Adjusted EBITDA of $40 million was up $19 million, or 87%, driven by higher sales volume and favorable pricing, partially offset by higher manufacturing costs driven by higher turnaround costs, the impact of general inflation, and increased transportation costs. Favorable price to cost ratio at the contribution margin level remains evident in our Q1 as illustrated in the adjusted EBITDA bridge shown on the following slide.

Speaker #5: Average selling prices were higher driven by virgin sulfuric acid pricing and favorable contract pricing for regenerated sulfuric acid. Adjusted EBITDA of $40 million was up 19 million dollars or 87% driven by higher sales volume and favorable pricing partially offset by higher manufacturing costs driven by higher turnaround costs, the impact of general inflation, and increased transportation costs.

Speaker #5: Favorable price-to-cost ratio at the contribution margin level remains evident in our first quarter as illustrated in the adjusted EBITDA bridge shown on the following slide.

Speaker #5: As previously mentioned, the pass-through effect of higher sulfur costs on sales was approximately $33 million. With the pass-through having no material impact on adjusted EBITDA.

Mike Feehan: As previously mentioned, the passthrough effect of higher sulfur costs on sales was approximately $33 million, with the passthrough having no material impact on adjusted EBITDA. Excluding the sulfur passthrough, the price to cost uplift in Q1 was approximately $11 million, largely driven by the net price impact, including favorable variable costs. Higher sales volume, including the contribution from the Waggaman assets, accounted for nearly $15 million of the period-over-period increase in adjusted EBITDA. This was partially offset by higher manufacturing costs, including the incremental cost of the acquired Waggaman assets, as well as higher SG&A and other costs. Turning to cash and debt on the next slide, adjusted free cash flow for Q1 was $4 million, up compared to a use of cash of $13 million in Q1 2025.

Speaker #5: Excluding the sulfur pass-through, the price-to-cost uplift in the first quarter was approximately $11 million. Largely driven by the net price impact including favorable variable costs.

Speaker #5: Higher sales volume including the contribution from the wagon and assets accounted for nearly 15 million dollars of the period over period increase in adjusted EBITDA.

Speaker #5: And this was partially offset by higher manufacturing costs including the incremental cost of the acquired wagon and assets as well as higher SGNA and other costs.

Speaker #5: Turning to cash and debt on the next slide, adjusted free cash flow for the first quarter was $4 million, up compared to a use of cash of $13 million in the first quarter of 2025.

Speaker #5: The lower than average free cash flow for the first quarter reflects the normal cadence of cash generation with the first quarter typically low primarily due to the timing of working capital.

Mike Feehan: The lower than average free cash flow for Q1 reflects the normal cadence of cash generation, with Q1 typically low primarily due to the timing of working capital. During the quarter, we repurchased $36 million of our common stock at an average price of approximately $11 per share, and we have $146 million remaining under our existing authorization. We ended Q1 with a strong liquidity position of $237 million, comprised of cash of $163 million and availability under our ABL facility of $74 million. With net debt of $234 million at quarter-end, our net debt leverage ratio was 1.2x, unchanged from 31 December.

Speaker #5: During the quarter, we repurchased $36 million of our common stock at an average price of approximately $11 per share, and we have $146 million remaining under our existing authorization.

Speaker #5: We ended the first quarter with a strong liquidity position of $237 million comprised of cash of $163 million and availability under our ABL facility of $74 million.

Speaker #5: With net debt of $234 million at quarter end, our net debt leverage ratio was 1.2 times unchanged from December 31st. Turning to our 2026 outlook.

Mike Feehan: Turning to our 2026 outlook, note that the guidance included in our materials and discussed on this call do not include any contributions from the recently announced Calabrian acquisition. Our previous guidance, provided in late February, anticipated higher sulfur costs in 2026. However, disruption associated with the Iran conflict has resulted in further increases in sulfur costs. We now expect the impact of higher sulfur costs passed through in price to be $30 million higher than previously guided, resulting in full year 2026 sales to be in the range of $890 to 970 million, up from our previously guided range of $860 to 940 million.

Speaker #5: Note that the guidance included in our materials and discussed on this call do not include any contributions from the recently announced Calabrian acquisition. Our previous guidance provided in late February anticipated higher sulfur costs in 2026.

Speaker #5: However, disruption associated with the Iran conflict has resulted in further increases in sulfur costs. We now expect the impact of higher sulfur costs pass-through in price to be $30 million higher than previously guided resulting in full year 2026 sales to be in the range of $890 to $970 million.

Speaker #5: Up from our previously guided range of $860 to $940 million. With a strong start to the year and having one quarter under our belt, we are revising our adjusted EBITDA guidance by tightening the range.

Mike Feehan: With a strong start to the year and having 1 quarter under our belt, we are revising our adjusted EBITDA guidance by tightening the range, now expecting full year 2026 adjusted EBITDA to fall in the range of $180 to 195 million. Similarly, we are tightening the range for adjusted free cash flow to be $40 to 55 million. While we are not changing our guidance due to the announced Calabrian acquisition, we do intend to finance a portion of the acquisition through a debt offering along with cash on hand. As a result, we would expect cash interest to increase an additional $4 to 5 million on a full year annual basis. As we move to the next slide, I'll provide directional guidance by quarter for the balance of the year.

Speaker #5: Now expecting full-year 2026 adjusted EBITDA to fall in the range of $180 to $195 million. Similarly, we are tightening the range for adjusted free cash flow to be $40 to $55 million.

Speaker #5: While we are not changing our guidance due to the announced Calabrian acquisition, we do intend to finance a portion of the acquisition through a debt offering, along with cash on hand.

Speaker #5: As a result, we would expect cash interest to increase an additional four to five million dollars on a full-year annual basis. As we move to the next slide, I'll provide directional guidance by quarter for the balance of the year.

Speaker #5: For the second quarter, we continue to expect higher year-over-year sales of regeneration services with favorable contractual pricing. We also continue to expect higher volume of virgin sulfuric acid driven by mining demand and the contribution of the acquired wagon and assets along with stable pricing for virgin sulfuric acid.

Mike Feehan: For Q2, we continue to expect higher year-over-year sales of regeneration services with favorable contractual pricing. We also continue to expect higher volume of virgin sulfuric acid driven by mining demand and the contribution of the acquired Waggaman assets, along with stable pricing for virgin sulfuric acid. Turnaround costs are expected to be lower than in the year ago quarter. As a result, we project Q2 2026 adjusted EBITDA to be in the range of $50 to $55 million. For Q3, we continue to expect higher sales of regeneration services compared to Q3 2025, and we currently project that virgin sulfuric acid volume will be slightly lower than the year ago quarter, driven by the timing of our sales into nylon applications.

Speaker #5: Turnaround costs are expected to be lower than in the year-ago quarter. As a result, we project second quarter 2026 adjusted EBITDA to be in the range of $50 to $55 million.

Speaker #5: For the third quarter, we continue to expect higher sales of regeneration services compared to the third quarter of 2025 and we currently project that virgin sulfuric acid volume will be slightly lower than the year-ago quarter driven by the timing of our sales into nylon applications.

Speaker #5: With higher projected turnaround costs than in the third quarter of 2025, we expect third quarter 2026 adjusted EBITDA to be in the range of $50 to $55 million.

Mike Feehan: With higher projected turnaround costs than in Q3 2025, we expect Q3 2026 adjusted EBITDA to be in the range of $50 to $55 million. Finally, for Q4, we continue to expect higher sales of regeneration services compared to Q4 2025 with favorable contractual pricing. We are currently expecting lower virgin sulfuric acid volume than in Q4 2025. We also are anticipating that sulfur costs will ease from the current historic highs. As a result, we expect that sulfuric acid pricing, excluding the passthrough effect, will be lower due to the overall customer mix and timing between when we incur the cost of our sulfur purchases and when we pass through these costs to our customers. Lastly, we expect higher turnaround costs compared to Q4 2025.

Speaker #5: Finally, for the fourth quarter, we continue to expect higher sales of regeneration services compared to the fourth quarter of 2025 with favorable contractual pricing.

Speaker #5: We are currently expecting lower virgin sulfuric acid volume than in the fourth quarter of 2025. We also are anticipating that sulfur costs will ease from the current historic highs as a result, we expect that sulfuric acid pricing excluding the pass-through effect will be lower due to the overall customer mix and timing between when we incur the cost of our sulfur purchases and when we pass through these costs to our customers.

Speaker #5: Lastly, we expect higher turnaround costs compared to the fourth quarter of 2025. As such, we currently anticipate that the fourth quarter adjusted EBITDA will fall in the range of $40 to $45 million.

Mike Feehan: As such, we currently anticipate that the Q4 adjusted EBITDA will fall in the range of $40 to 45 million. I will now turn the call back to Kurt for some closing remarks.

Speaker #5: I will now turn the call back to Kurt for some closing remarks. Thank you, Mike. We have had a great start to the year, and we are energized by the positive momentum we see as we move into the second quarter.

Kurt Bitting: Thank you, Mike. We have had a great start to the year, and we are energized by the positive momentum we see as we move into the Q2. While the global macroeconomic landscape continues to evolve, we believe Ecovyst remains well positioned to deliver on our objectives. Moreover, we are extremely pleased with our project progress on strategic implementation as we maintain our focus on growth and on value creation for our stockholders. The disposition of our Advanced Materials & Catalysts segment at year-end was a transformational event that resulted in a strengthened balance sheet and a robust liquidity position that provides us with the resources and flexibility to execute on multiple capital allocation alternatives, including the funding of organic growth projects, the pursuit of attractive inorganic growth opportunities, and the return of capital to our stockholders.

Speaker #5: While the global macroeconomic landscape continues to evolve, we believe Ecovyst remains well positioned to deliver on our objectives. Moreover, we are extremely pleased with our project progress on strategic implementation, as we maintain our focus on growth and on value creation for our stockholders.

Speaker #5: The disposition of our advanced materials and catalyst segment at year-end was a transformational event that resulted in a strengthened balance sheet and a robust liquidity position that provides us with the resources and flexibility to execute on multiple capital allocation alternatives including the funding of organic growth projects, the pursuit of attractive inorganic growth opportunities, and the return of capital to our stockholders.

Speaker #5: During the first quarter, we returned $36 million in capital to our stockholders through share repurchases. And as previously indicated to support organic growth this year, we are investing in the expansion of our Gulf Coast storage and logistics capabilities that will further enhance our ability to serve our customers' growing needs.

Kurt Bitting: During Q1, we returned $36 million in capital to our stockholders through share repurchases. As previously indicated, to support organic growth this year, we are investing in the expansion of our Gulf Coast storage and logistics capabilities that will further enhance our ability to serve our customers' growing needs. Building upon last year's successes, we also expect further contributions and network optimization benefits from the acquisition of our Waggaman site as we continue to leverage the site's capacity to meet the growing needs of our customers. With regard to our stated objective to pursue attractive inorganic growth opportunities, we are excited about the agreement that we have reached to acquire Calabrian, which will broaden our portfolio of sulfur products that we can offer to growing end users.

Speaker #5: And building upon last year's successes, we also expect further contributions and network optimization benefits from the acquisition of our wagon and site as we continue to leverage the site's capacity to meet the growing needs of our customers.

Speaker #5: With regard to our stated objective to pursue attractive inorganic growth opportunities, we are excited about the agreement that we have reached to acquire Calabrian, which will broaden our portfolio of sulfur products that we can offer to growing end uses.

Speaker #5: We look forward to the completion of the Calabrian acquisition and to providing you with updates on our ongoing progress as we move throughout the year.

Kurt Bitting: We look forward to the completion of the Calabrian acquisition and to providing you with updates on our ongoing progress as we move throughout the year. At this time, I will ask the operator to open the line for questions.

Speaker #5: At this time, I will ask the operator to open the line for questions.

Speaker #1: Thank you. At this time, we will open the floor for questions. If you'd like to ask a question, you may press star one on your telephone now.

Operator 3: Thank you. At this time, we will open the floor for questions. If you'd like to ask a question, you may press star one on your telephone now. To remove yourself from the queue, you may press star two. Again, that is star one to ask a question. We'll take our first question from John McNulty with BMO Capital Markets. Please go ahead. Your line is open.

Operator: Thank you. At this time, we will open the floor for questions. If you'd like to ask a question, you may press star one on your telephone now. To remove yourself from the queue, you may press star two. Again, that is star one to ask a question. We'll take our first question from John McNulty with BMO Capital Markets. Please go ahead. Your line is open.

Speaker #1: To remove yourself from the queue, you may press star two. Again, that is star one to ask a question. And we'll take our first question from John McNulty with BMO Capital Markets.

Speaker #1: Please go ahead. Your line is open.

Speaker #6: Yeah. Good morning. Thanks for taking my question. Congrats on a really solid start to the year. So I wanted to dig into lots changed since you gave your last guide.

John McNulty: Yeah, good morning. Thanks for taking my question, and congrats on a really solid start to the year. I wanted to dig into, you know, what's changed since you gave your last guide, both in the virgin acid markets and kind of scarcity around sulfuric acid, at least on a global basis, maybe a little less so in the US. Also the strength of US refining, which I know you were looking for things to be better. Seems like now that may be even greater in terms of how that industry is reacting to kind of what's gone on in the Middle East. I guess, can you help us to think about how your expectations have changed and how that's woven into the guide?

Speaker #6: Both in the virgin acid markets and kind of scarcity around sulfuric acid, at least on a global basis, maybe a little less so in the US.

Speaker #6: And then also the strength of US refining, which I know you were looking for things to be better seems like now that may be even greater in terms of how that industry is reacting to kind of what's gone on in the Middle East.

Speaker #6: So I guess, can you help us to think about how your expectations have changed and how that's woven into the guide? Because I guess I'm a little surprised with a couple of things being reasonably better that you weren't quite ready to necessarily raise at least the upper end of the guide.

John McNulty: I guess I'm a little surprised with a couple things being reasonably better, that you weren't quite ready to necessarily raise the, at least the upper end of the guide. Can you help us to think about that a little bit?

Speaker #6: So can you help us to think about that a little bit?

Speaker #7: Yeah, John, thanks for the question. I think the first way we would look at that is there were some things that did change positively for us during the quarter, certainly compared to the guidance that we had provided.

Kurt Bitting: John, thanks for the question. I think the first way we would look at that is there were some things that did change positively for us during the quarter. You know, certainly compared to the guidance that we had provided. We saw some strength in regen, some positivity on the virgin pricing, that is a little bit more based on timing. As we talked about, that we expect to get some of that timing back in the Q4. That regen, you know, strength is clearly a tailwind for us. We also are tempered with some of the other, you know, potential macroeconomic items that are going on. We still wanna continue to keep our guide relatively to where we were.

Speaker #7: We saw some strength in region, some positivity on the virgin pricing, but that is a little bit more based on timing. As we talked about that, we expect to get some of that timing back in the fourth quarter.

Speaker #7: That region strength is clearly a tailwind for us, but we also are tempered with some of the other potential macroeconomic items that are going on.

Speaker #7: So we still want to continue to keep our guide relatively to where we were. We did raise the bottom end of it, so our midpoint is up to $187.5, but we believe that there is strength in the numbers of what we've seen but want to be tempered with what we're expecting for the rest of the year.

Kurt Bitting: We did raise the bottom end of it, so our midpoint is up to 187.5. We believe that there is strength in the numbers of what we've seen, but, you know, wanna be tempered with what we're expecting for the rest of the year.

Speaker #6: Okay. Fair enough. And understand it's a little bit of a fluid situation. Maybe just speaking to Calabrian, I guess, can you give us some color as to how that business has grown over the past few years and kind of what the longer-term growth outlook is for that business?

John McNulty: Okay. Fair enough, and understand it's a little bit of a fluid situation. Speaking to Calabrian, I guess, can you give us some color as to how that business has grown over the past few years and kind of what the longer term growth outlook is for that business?

Speaker #7: Yeah, sure. Thanks for the question, John. I mean, going back, Calabrian's been in its current form really since the 1980s, and it's had the site at Port Natchez.

Kurt Bitting: Yeah, sure. Thanks for the question, John. I mean, it's going back, you know, Calabrian's been in, you know, its current form really since, you know, the 1980s. It's had the site at Port Neches. They built a site in 2017 up in Timmins, Ontario, which is primarily used to service the mining sector up in Canada. A lot of the growth in the Calabrian segment has been, you know, one from the mining, you know, that backstops gold, which obviously gold mining is at current gold prices, has been very healthy. Their business has grown from that. There's also been some growth in terms of some of their pharma, food and other industrial applications.

Speaker #7: They built a site in 2017 up in Timmins, Ontario, which is primarily used to service the mining sector up in Canada. So a lot of the growth in the Calabrian segment has been one from the mining and that backstops gold, which obviously gold mining is at current gold prices has been very healthy.

Speaker #7: So their business has grown from that. There's also been some growth in terms of some of their pharma, food, and, I would say, other industrial applications.

Speaker #7: So when we look at that business, it's probably a GDP to GDP plus type growth rate with some of the things moving faster than others.

Kurt Bitting: When we look at that business, you know, it's probably a GDP to GDP plus type, you know, growth rate with some of the things moving faster than others, like we think in mining and industrials. Again, they're the only on-purpose North American producer of sulfur dioxide. They're the only producer of metabisulfite in North America. They have a really nice position. They have a great technology that's, you know, proprietary, that's, you know, completely different than how it's produced by the competitors. We're real happy with the acquisition and, you know, we confident in its future potential.

Speaker #7: We think in mining and industrials, again, they're the only on-purpose North American producer of sulfur dioxide. They're the only producer of metabisulfite in North America.

Speaker #7: So they have a really nice position. They have a great technology that's proprietary that's completely different than how it's produced by the competitors. So we're real happy with the acquisition and we're confident in its future potential.

Speaker #6: Great. Thanks very much for the caller.

John McNulty: Great. Thanks very much for the color.

Speaker #1: Thank you. We'll take the next question from Patrick Cunningham with Citigroup. Please go ahead. Your line is open.

Operator 3: Thank you. We will take the next question from Patrick Cunningham with Citigroup. Please go ahead. Your line is open.

Operator: Thank you. We will take the next question from Patrick Cunningham with Citigroup. Please go ahead. Your line is open.

Speaker #8: Hi, everyone. This is Rachel Leo for Patrick. So adjusted EBITDA margins are meaningfully stronger than we expected this quarter driven by higher volumes and incremental pricing above the sulfur past through.

Rachel Leon: Hi, everyone. This is Rachel Leon for Patrick. Adjusted EBITDA margins were meaningfully stronger than we expected Q1, driven by higher volumes and incremental pricing above the sulfur pass-through. Despite some other headwinds from transportation and manufacturing costs. As we look to the balance of the year, how should we think about the net price cost dynamics?

Rachel De Leon: Hi, everyone. This is Rachel Leon for Patrick. Adjusted EBITDA margins were meaningfully stronger than we expected Q1, driven by higher volumes and incremental pricing above the sulfur pass-through. Despite some other headwinds from transportation and manufacturing costs. As we look to the balance of the year, how should we think about the net price cost dynamics?

Speaker #8: Despite some other headwinds from transportation and manufacturing costs. So as we look to the balance of the year, how should we think about the net price cost dynamics?

Speaker #7: Yeah. So thank you for the question. Yeah, the margins were favorable. Obviously, as we've talked in the past, the pass-through of the sulfur cost is relatively neutral to EBITDA, so it does lower the margins.

Kurt Bitting: Yeah. Thank you for the question. Yeah, the margins were favorable. Obviously, as we've talked in the past, the pass-through of the sulfur cost is relatively neutral to EBITDA, so it does lower the margins. We did see some positivity around overall pricing and volume that dropped straight through the bottom line. That did, you know, provide us with that higher margin. The price-to-cost ratio, the positive number that we discussed during the quarter, we expect that to continue throughout the year. We do see positive, you know, cost, price and cost ratio. That's been a consistent view for us over the last several quarters, where we are making more money from an EBITDA on a per ton basis, you know, comparatively.

Speaker #7: But we did see some positivity around overall pricing and volume. That dropped straight through the bottom line. So that did provide us with that higher margin.

Speaker #7: The price-to-cost ratio of the positive number that we discussed during the quarter, we expect that to continue throughout the year. We do see positive price and cost ratio.

Speaker #7: That's been a consistent view for us over the last several quarters where we are making more money from an EBITDA on a per-ton basis, comparatively.

Speaker #7: So, while the margin percent will look lower because of the sulfur price throughput, the earnings are actually positive. So we expect that to continue throughout the rest of the year.

Kurt Bitting: While the margin percent will look lower because of the sulfur price through, the earnings is actually positive. We expect that to continue throughout the rest of the year.

Speaker #8: Great. Thank you so much for that. And on the Calabrian acquisition, maybe could you provide more detail on the contract structure and the level of visibility you have into board sales and earnings?

Rachel Leon: Great. Thank you so much for that. On the Calabrian acquisition, maybe could you provide more detail on the contract structure and the level of visibility you have into forward sales and earnings?

Rachel De Leon: Great. Thank you so much for that. On the Calabrian acquisition, maybe could you provide more detail on the contract structure and the level of visibility you have into forward sales and earnings?

Speaker #7: Yeah. So the business is similar, I would say, to the general construct of the eco-services asset business where there are long-term agreements or certainly long-term customers with food ship users whether it's in mining, industrials, pharma, food, and so forth.

Kurt Bitting: Yeah. The business is similar, I would say, to the general construct of the Ecoservices acid business, where there are long-term agreements. There are certainly long-term, you know, customers with, you know, with blue chip users, you know, whether it's in mining, industrials, pharma, food, and so forth. The contracts are also, have a high pass-through component, similar, you know, 'cause it is a sulfur-based chemistry, so, you know, passing sulfur is obviously, passing through sulfur is very important. They have a similar dynamic to the Ecoservices business. In terms of visibility, you know, the, you know, again, the customers tend to be very steady offtake.

Speaker #7: The contracts are also have a high pass-through component similar because it is a sulfur-based chemistry. So passing sulfur is obviously passing through sulfur is a very important and they have a similar dynamic to the eco-services business.

Speaker #7: And in terms of visibility, again, the customers tend to be very steady offtake. It's the products that they purchase from Calabrian are very important to their process.

Kurt Bitting: It's, you know, it's, the products that they purchase from Calabrian are very important to their process, so there's generally a very good visibility in terms of, you know, the forecasting and, you know, the ratability of the volume and so forth.

Speaker #7: There's generally a very good visibility in terms of the forecasting and the rate ability of the volume and so forth.

Speaker #8: Thanks so much.

Rachel Leon: Thanks so much.

Rachel De Leon: Thanks so much.

Speaker #1: Thank you. We'll take our next question from Lawrence Alexander with Jefferies. Please go ahead. Your line is open.

Operator 3: Thank you. We'll take our next question from Laurence Alexander with Jefferies. Please go ahead. Your line is open.

Operator: Thank you. We'll take our next question from Laurence Alexander with Jefferies. Please go ahead. Your line is open.

Speaker #9: Good morning. This is Dan Rizwan for Lawrence. Thanks for taking my questions. So just looking at prices and kind of the structural change, oil analysts now expect a 5% or so structural risk premium for oil due to what's going on in the Middle East.

Daniel Rizzo: Good morning. This is Daniel Rizzo for Laurence. Thanks for taking my questions. Just looking at prices and then kind of the structural change, oil analysts now expect a 5% or so structural risk premium for oil due to the, you know, what's going on in the Middle East. Do you expect a similar structural reset in sulfur prices over the long term that would flow through to your business, or should we view the sulfur spike as a net negative because it hurts industrial volumes?

Speaker #9: Do you expect a similar structural reset in sulfur prices over the long term that would flow through to your business or should we view the sulfur spike as a net negative because it hurts industrial volumes?

Speaker #7: Yeah. For our business, I mean, sulfur is really at all-time highs right now. And the run-up in sulfur had actually started well before the conflict in Iran.

Kurt Bitting: Yeah. For our business, I mean, I, you know, sulfur is at really all-time highs right now. It was the run-up in sulfur had actually started well before the conflict in Iran. A lot of that is due to, you know, simply, you know, the need for the sulfur molecule for sulfuric acid for things, you know, to produce copper and other metals and so forth. There, you know, we do feel that, you know, there's a definite demand for sulfur out there, which will lead to higher prices. I do think right now we're in a extremely high situation just given the geopolitical conflict that's going on right now. Long term, you know, we continue to have the ability to pass through sulfur to our customers.

Speaker #7: And a lot of that is due to simply the need for the sulfur molecule for sulfuric acid, for things to produce copper and other metals, and so forth.

Speaker #7: So they're we do feel that there's a definite demand for sulfur out there, which will lead to higher prices. I do think right now we're in an extremely high situation just given the geopolitical conflict that's going on right now.

Speaker #7: But long term, we continue to have the ability to pass through sulfur to our customers. Our customers, as opposed to a fertilizer industry, which is very heavily dependent on a commoditized market and sulfur impacts demand there a lot, ours not so much.

Kurt Bitting: Our customers, as opposed to like a fertilizer industry, which is very heavily dependent on a commoditized market and sulfur impacts demand there a lot. Ours not so much. Our customers tend to, sulfuric acid tends to be only a very small component of their overall cost and their process. While it's not great that sulfur prices go up on them, however, it ends up being a very small component, so we're able to pass it through.

Speaker #7: Our customers tend to—sulfuric acid tends to be only a very small component of their overall costs and their process. So, while it's not great that sulfur prices go up on them, however, it ends up being a very small component.

Speaker #7: So we're able to pass it through.

Speaker #9: Thanks. That's actually very helpful. And then just thinking about the most recent acquisition, and as we think about synergies, I mean, I guess it's mostly logistical not logistical, but supply synergies as opposed to a production and revenue.

Daniel Rizzo: Thanks. That's actually very helpful. Just thinking about the most recent acquisition, as we think about synergies, it's mostly logistical. Not logistical, but like supply synergies as opposed to production and revenue. Is that how we should think about it? You said you're gonna quantify it later too, I think you said, right?

Speaker #9: Is that how we should think about it? I don't think you said you're going to quantify it later too. I think you said it, right?

Speaker #7: Yeah. So I mean, when we look at when we look at the synergies, there's certainly some cost-based synergies when you look at we're obviously a bulk we're both involved in sulfur chemistry.

Kurt Bitting: Yeah. I mean, when we look at the synergies, there's certainly some cost-based synergies when you look at, we're both involved in sulfur chemistry, so there's gonna be, you know, procurement. There's obviously, we have a large supply and manufacturing infrastructure that there should be some synergies with, especially with the Port Neches site, which sits kind of right in the middle of our Gulf Coast footprint. We also see revenue synergy upside as well, just given the, you know, the ability to leverage our sales forces across, again, those sulfur products, right? One of which we already sell, sodium bisulfite.

Speaker #7: So, there's going to be procurement. Obviously, we have a large supply and manufacturing infrastructure that there should be some synergies with, especially with the Port Neches site, which sits kind of right in the middle of our Gulf Coast footprint.

Speaker #7: But we also see revenue synergy upside as well, just given the ability to leverage our sales forces across, again, those sulfur products, right?

Speaker #7: One of which we already sell, sodium bisulfate. So we really see a nice mixture of both cost and revenue synergies there. And it's really stemming out of the fact that we're both in sulfur chemistry and the products are very closely related.

Kurt Bitting: We really see a, you know, a nice mixture of both cost and revenue synergies there, and it's really stemming out of the fact that we're both in sulfur chemistry and the, you know, the products are very closely related.

Speaker #9: Okay. Thank you very much.

Daniel Rizzo: Thank you very much.

Speaker #1: Thank you. We'll take our next question from Hamed Khorsand with BSW.

Operator 3: Thank you. We'll take our next question from Hamed Khorsand with BWS Financial.

Operator: Thank you. We'll take our next question from Hamed Khorsand with BWS Financial.

Speaker #10: Hey, good morning. So first off, on the acquisition, you were talking about potentially selling sulfuric acid into the Canadian mining. Would these be relationships that Calabrian brings to the table?

Hamed Khorsand: Hey, good morning. First off, on the acquisition, you were talking about, you know, potentially selling sulfuric acid into Canadian mining. Right, would these be relationships that, you know, Calabrian brings to the table?

Speaker #7: Yeah. So, hi, Hamed. How are you? So, they would be selling sulfur dioxide to Canadian mines. And so, yes, these would be new mining relationships, where Ecovyst mining relationships are primarily focused in, I would say, the southwestern part of the U.S.

Kurt Bitting: Yeah. Hi, Hamed. How are you? They would be selling sulfur dioxide to Canadian mines. Yeah, these would be new mining relationships, you know, where, you know, Ecovyst mining relationships are primarily focused in, you know, I would say the southwestern part of the US.

Speaker #10: Okay. And then on the refinery side, is the increase in activity in utilization, is that more about the current environment or does that have to do with more of a normalization given where Q4 was?

Hamed Khorsand: Okay. On the refinery side, is the increase in activity and utilization, is that more about the current environment, or does that have to do with more of a normalization given where Q4 was?

Kurt Bitting: The answer is yes. There's a It's both. Coming into this year, you know, and we had guided on the previous call that we had expected a, you know, a healthy refinery utilization this year. A lot of that due to the fact that there's way less planned and, you know, hopefully unplanned maintenance outages in the US refining complex. Utilization was expected to be high. I would say the current conflict that's going on has certainly added a tailwind to that, right? Obviously margins are, you know, are high right now for, not only just oil, but for refined products, and there's certainly US refineries can take advantage of that. I do think there is some tailwind with that there.

Speaker #7: The answer is yes. So there's it's both. Coming into this year, and we had guided on our on the previous call that we had expected a healthy refinery utilization this year a lot of that due to the fact that there's way less planned and hopefully unplanned maintenance outages in the US refining complex.

Speaker #7: So utilization was expected to be high. I would say the current conflict that's going on has certainly added a tailwind to that, right? So obviously, margins are high right now for not only just oil, but for refined products and there's certainly US refineries can take advantage of that.

Speaker #7: So I do think there is some tailwind with that there. In terms of how that applies to us, the alkylation units that we service with the regeneration is those were always expected to run at very high rates coming into this year.

Kurt Bitting: In terms of how that applies to us, the alkylation units that we service with the regeneration is, you know, those were always expected to run at very high rates coming into this year and really all years, as long as there's not maintenance going on. You know, they don't really have the ability to flex up, you know, a tremendous amount given the margin climate. I would say the current environment certainly provides a tailwind for everything to run as hard as it can.

Speaker #7: And really, all years, as long as there's not maintenance going on. So, they don't really have the ability to flex up a tremendous amount, given the margin climate.

Speaker #7: But I would say the current environment certainly provides a tailwind for everything to run as hard as it can.

Speaker #10: Okay. Great. Thank you.

Hamed Khorsand: Okay. Great. Thank you.

Speaker #1: Thank you. And as a quick reminder, if you'd like to ask a question, you may press star one now. At this time, I'd like to thank everybody.

Operator 3: Thank you. As a quick reminder, if you'd like to ask a question, you may press star one now. At this time, I'd like to thank everybody for joining today's event. You may now disconnect.

Operator: Thank you. As a quick reminder, if you'd like to ask a question, you may press star one now. At this time, I'd like to thank everybody for joining today's event. You may now disconnect.