Q2 2026 Minerals Technologies Inc Earnings Call

July 31, 2026

Speaker #1: Listen, only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions.

Speaker #1: Welcome to the Minerals Technologies Q2 2026 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 0.

Speaker #1: To ask a question, you may press star, then 1 on a touchtone phone. To withdraw your question, please press star and then 2. Please note this event is being recorded.

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

Speaker #2: 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: I would now like to turn the conference over to Lydia Kopylova, Head of Investor Relations. Please go ahead.

Speaker #1: To withdraw your question, please press star and then 2. Please note this event is being recorded. I would now like to turn the conference over to Lydia Coppulova, Head of Investor Relations.

Speaker #2: press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Alderzmayer, Vice President, Finance and Investor Relations.

Speaker #2: Thank you, Dave. Good morning, everyone, and welcome to our second quarter 2026 earnings conference call. Today's call will be led by Chairman and Chief Executive Officer Doug Dietrich, and Chief Financial Officer Erik Aldag.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Dave. Good morning, everyone, and welcome to our Q2 2026 earnings conference call. Today's call will be led by Chairman and Chief Executive Officer Doug Dietrich, and Chief Financial Officer Eric Halduck.

Speaker #2: Please go ahead. Thanks, Megan. Good morning, everyone, and welcome to the Mohawk Industries quarterly investor conference call. Joining me on today's call are Jeff Lorberbaum, Chairman and Chief Executive Officer; Paul DeCock, President and Chief Operating Officer; and Nick Manthi, Chief Financial Officer.

Speaker #2: 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 Security Laws.

Speaker #2: Following Doug and Eric's prepared remarks, we'll open it up to questions. As a reminder, some of the statements made during this call may constitute forward-looking statements within the meaning of the Federal Security Laws.

Speaker #2: Please note a cautionary language about forward-looking statements contained in our earnings release and on this slide. Our SEC filings disclose certain risks and uncertainties, which may cause our actual results to differ materially from this forward-looking statement.

Speaker #2: Today we'll update you on the company's second quarter performance and provide guidance for the third quarter of 2026. I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including but not limited to those set forth in our press release and our periodic filings with the Securities and Exchange Commission.

Speaker #2: Please also note 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 I posted on our website.

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

Speaker #3: Thanks, Lydia. Good morning, everyone, and thanks for joining today. I'm going to kick us off with a review of our second quarter financials. Erik will then take you through the numbers in more detail, and provide our outlook.

Speaker #2: This call may include discussion of non-GAAP numbers. For a reconciliation of any non-GAAP to GAAP amounts, please refer to our Form 8-K and press release in the Investor section of our website.

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

Speaker #3: Thanks, Lydia. Good morning, everyone, and thanks for joining today. I'm going to kick us off with a review of our Q2 financials. Eric will then take you through the numbers in more detail, and provide our outlook.

Speaker #3: And at the end of our presentation, I'll briefly share some of the highlights from our sustainability report, which we just published, and provide a preview of our upcoming investor day on September 22.

Speaker #2: I'll now turn the call over to Jeff for his opening remarks.

Speaker #3: Thank you, Joe. Our second quarter results significantly exceeded our expectations as we outperformed our markets. Our net sales were $3 billion, up 6.8% versus the prior year, as reported, or up 5% on a constant basis.

Speaker #3: After that, we'll open the call to questions. First, a quick overview of the quarter results. Sales were 548 million dollars, up 4% over last year, with operating income of 75 million dollars.

Speaker #3: Our performance benefited from volume growth, pricing, and product mix. Across our regions, our teams effectively executed our strategies and capitalized on the opportunities with new and existing customers.

Speaker #3: Earnings per share were $1.60, up 3% from last year. We continue to be a strong cash generator, with cash flow improving over last year, and our balance sheet is in great shape, with our net leverage reducing to 1.6 times EBITDA.

Speaker #3: We successfully introduced new collections, expanded product placements, and improved our mix. In the period volume benefited from initial stocking of new product placements, and limited increases in inventory by some customers ahead of announced price increases.

Speaker #3: Our top-line momentum is continued. With sales growing 7% for the first half of the year, I'll highlight that this has been quality revenue growth, driven by higher volumes from our new growth projects and from stronger end-market conditions.

Speaker #3: Our second quarter reported EPS of $3.22 and adjusted EPS was $3.67, including a benefit of approximately $63 from tariff refunds, which were not included in our second quarter guidance.

Speaker #3: Another highlight is that our engineered solutions segment delivered a particularly impressive performance this quarter, generating a record margin of 17.8% and a record quarterly income of $49 million.

Speaker #3: These refunds represent the reversal of costs that we have absorbed from higher tariffs. As part of our buyback program, we purchased over 600,000 shares during the quarter for approximately $60 million.

Speaker #3: Both segments continue to be positioned for solid growth this year, with our strategic projects in each segment remaining on track. As a result, we have a clear line of sight to hitting our mid-single-digit growth guidance for the company for the full year.

Speaker #3: Our second quarter forecast had reflected uncertainty related to the Middle East conflict, but market conditions proved more resilient than we anticipated. Residential channels remained soft during the quarter.

Speaker #3: In our consumer and specialty segment, our cat litter sales have grown 9% through the first half of the year, driven by the introduction of new products and this business remains on track for a mid to high single-digit growth year.

Speaker #3: In our consumer and specialty segment, our cattle sales have grown 9% through the first half of the year, driven by the introduction of new products, and this business remains on track for a mid to high single-digit growth year.

Speaker #3: And we believe we outpaced the market and gained share in most regions. The commercial sector continued outperforming residential, and our differentiated offering enhanced our mix and margins.

Speaker #3: We're also excited about our Raff and All Bleaching Earth expansion, which is now ramping up, and we can begin working through a very strong order book from sustainable aviation fuel customers.

Speaker #3: The new home construction market remains pressured, and existing home sales continue to be affected by affordability challenges. In the softer environment, we proactively manage the controllable aspects of our business, including enhancing our sales strategy, pricing, operational improvements, and managing our inventory levels and costs.

Speaker #3: We're also excited about our raffinol bleaching earth expansion, which is now ramping up, and we can begin working through a very strong order book from sustainable aviation fuel customers.

Speaker #3: Our new Fabric Air product production is also ramping up, and we expect sales to strengthen early in the fourth quarter. Paper and packaging sales were also strong, up 7% so far this year, and our three new satellite facility launches are all progressing.

Speaker #3: Our new fabric hair product production is also ramping up, and we expect sales to strengthen early in the fourth quarter. Paper and packaging sales were also strong, up 7% so far this year, and our three new satellite facility launches are all progressing.

Speaker #3: Across many of our products and geographies, we executed price increases in response to higher materials, energy, and transportation costs. In the second half of the year, these higher input costs will flow through inventory and impact our margins.

Speaker #3: In our engineered solutions segment, high-temperature technologies is having a strong sales year, driven by our refractories business, where sales are up 14%, driven by MinScan installations, and the corresponding contractual refractory volumes, as well as from higher foundry sales in Asia, which are up 11%.

Speaker #3: We continued uncertainty; additional price increases may be required this year. We are bringing innovative products to the market with differentiated features to strengthen our sales and mix.

Speaker #3: We also saw strong sales in environmental and infrastructure, where sales are up 19% this year, driven by higher volumes of environmental lining products, building materials, and drilling products, as well as from strong demand for our offshore energy services business.

Speaker #3: Across the business, our teams are delivering significant productivity gains. In our results, our benefiting from our prior restructuring projects. In addition, we've initiated new projects focused on operational simplification, organizational realignment, warehouse consolidation, and capacity optimization.

Speaker #3: Our main challenge this year has been dealing with the higher level and persistent inflation. As we mentioned would happen, this quarter we absorbed quite a bit of higher energy transportation and raw material costs, the majority of which hit our consumer and specialty segment.

Speaker #3: Our main challenge this year has been dealing with the higher-level and persistent inflation. As we've mentioned, what happened this quarter, we absorbed quite a bit of higher energy transportation and raw material costs, the majority of which hit our consumer and specialty segment.

Speaker #3: Which will reduce our costs approximately $60 million with most completed by the end of 2027. These savings will require cash restructuring costs of approximately $50 million.

Speaker #3: We've adjusted pricing across all product lines, but due to contractual price increase timing to many customers in the consumer and specialty segment, the majority of the positive pricing impact is only now beginning to take effect.

Speaker #3: We recently released our 17th annual impact report, which highlights the successful completion of our 2025 sustainability goals, which lowered our emission intensity by 31%, waste-to-landfill intensity by 55%, and water intensity by 50% from our base year.

Speaker #3: Margins in the quarter for the consumer and specialty segment were impacted as a result. Erik will outline all of the price-cost dynamics for you in detail, but we continue to make contractual price adjustments and expect to recover segment margins as we move through the second half of the year.

Speaker #3: Margins in the quarter for the consumer and specialty segment were impacted as a result. Eric will outline all of the price-cost dynamics for you in detail, but we continue to make contractual price adjustments and expect to recover segment margins as we move through the second half of the year.

Speaker #3: To read the report and see all of our accomplishments, visit the Sustainability section of our website. On a personal note, we announced that I would be retiring as CEO and would be turning over the reins to Paul.

Speaker #3: A few other items I'd like to touch on before handing the call over to Erik. First, I wanted to mention that we've made organizational changes that I believe will result in even closer collaboration and greater efficiency across our four product lines.

Speaker #3: A few other items I'd like to touch on before handing the call over to Eric. First, I wanted to mention that we've made organizational changes that I believe will result in even closer collaboration and greater efficiency across our four product lines.

Speaker #3: With 25 years as Mohawk CEO, I've taken great pride in watching our talented organization transform Mohawk into the world's largest flooring manufacturer. Together, we've established leading market positions on.

Speaker #3: We've elevated four experience leaders to oversee each product line, leveraging their deep knowledge of our markets, operations, and technologies. This change will more closely align the people, products, facilities, and core technologies markets, and strengthen execution across the organization.

Speaker #3: We've elevated four experience leaders to oversee each product line, leveraging their deep knowledge of our markets, operations, and technologies. This change will more closely align the people, products, facilities, and core technologies that serve similar markets, and strengthen execution across the organization.

Speaker #3: We believe these changes we expect these changes to drive efficiencies, further accelerate innovation, and speed to market for new products. And accelerate best practice sharing and adoption across our business.

Speaker #3: Second, as we previously announced, this past quarter we also filed a plan of reorganization in the chapter 11 cases of our subsidiaries, BMI Old Co, formerly known as Barrett's Minerals, and its affiliated editors to comply with the court deadline.

Speaker #3: Second, as we previously announced, this past quarter we also filed a plan of reorganization in the Chapter 11 cases of our subsidiaries, BMI Oldco, formerly known as Barrett's Minerals, and its affiliated debtors to comply with the court deadline.

Speaker #3: Concurrently with the filing of the plan, we recorded a charge of $290 million to increase our reserve for funding the proposed potential trusts and for estimated costs related to this matter.

Speaker #3: More recently, the judge has abated the bankruptcy court cases in order to await the outcome of a district court proceeding on the underlying tel causation issue.

Speaker #3: We continue to maintain that all telcs sold by BMI Old Co has always been safe and remain committed to a fair and final resolution for the company and all stakeholders.

Speaker #3: We continue to maintain that all telcs sold by BMI Oldco has always been safe and remain committed to a fair and final resolution for the company and all stakeholders.

Speaker #3: Lastly, I'm pleased to announce that we published our 18th annual sustainability report earlier this week. It's packed with information about the company and our journey over the past several years, and I'm going to take a moment at the end of our presentation to run you through some of the highlights.

Speaker #3: Now I'm going to hand the call over to Erik, who will take you through our second quarter financials in more detail. Erik?

Speaker #2: Thanks, Doug, and good morning, everyone. I'll start by providing a summary of our financial results, followed by a review of our segments, and I'll wrap up with our outlook for the third quarter.

Speaker #3: Now let me hand the call over to Eric, who will take you through our second quarter financials in more detail. Eric?

Speaker #4: Thanks, Doug. And good morning, everyone. I'll start by providing a summary of our financial results, followed by a review of our segments, and I'll wrap up with our outlook for the third quarter.

Speaker #2: Following my remarks, I'll turn the call back over to Doug. Now let's review our results. Second quarter sales were $548 million, up 4% versus last year, driven by strength in high-temperature technologies and environmental and infrastructure.

Speaker #4: Following my remarks, I'll turn the call back over to Doug. Now let's review our results. Second quarter sales were $548 million, up 4% versus last year, driven by strength in high-temperature technologies and environmental and infrastructure.

Speaker #2: After a strong first quarter, second quarter sales in consumer and specialties were down slightly from last year, primarily due to some volume that shifted into the second half in household and personal care.

Speaker #4: After a strong first quarter, second quarter sales in consumer and specialties were down slightly from last year, primarily due to some volume that shifted into the second half in household and personal care.

Speaker #2: Second quarter operating income was $75 million. You can see from the bridge on the lower left that volume contributed $4 million and pricing contributed $8 million to income.

Speaker #4: Second quarter operating income was $75 million. You can see from the bridge on the lower left that volume contributed $4 million and pricing contributed $8 million to income.

Speaker #2: However, overall cost increases totaled $16 million in the quarter, as we experienced higher freight, energy, and energy-linked costs, such as mining. The cost environment remains adjustments will be necessary until costs stabilize and we fully offset these increases.

Speaker #4: However, overall cost increases totaled $16 million in the quarter, as we experienced higher freight, energy, and energy-linked costs, such as mining. The cost environment remains dynamic, and further price adjustments will be necessary until costs stabilize and we fully offset these increases.

Speaker #1: Followed by a review of our segments, and I'll wrap up with our outlook for the third quarter. Following my remarks, I'll turn the call back over to Doug.

Operator 1: Welcome to Chorus Call. Please hold. An operator will be with you shortly. Welcome to Chorus Call. Please hold. An operator will be with you shortly. Welcome to Chorus Call. Please hold.

Speaker #2: Moving to the top right side of the slide, sales have grown 7% in the first half over last year. With 5% growth in consumer and specialties, and 10% growth in engineered solutions.

Speaker #1: Now, let's review our results. Second-quarter sales were $548 million, up 4% versus last year, driven by strength in high-temperature technologies and Environmental and Infrastructure.

Speaker #4: Moving to the top right side of the slide, sales have grown 7% in the first half over last year. With 5% growth in consumer and specialties, and 10% growth in engineered solutions.

Speaker #2: We'll show year-to-date figures in a few places today to highlight the growth so far this year and to highlight the magnitude of the cost impact that we expect to fully recover once these higher costs plane over.

Speaker #4: We'll show year-to-date figures in a few places today to highlight the growth so far this year and to highlight the magnitude of the cost impact that we expect to fully recover once these higher costs plane over.

Speaker #1: After a strong first quarter, second quarter sales in Consumer and Specialties were down slightly from last year, primarily due to some volume that shifted into the second half in Household and Personal Care.

Speaker #2: The first half operating bridge on the bottom right shows that volume delivered $13 million of additional income, and higher pricing contributed $14 million. The biggest challenge this year has been the higher costs I've just mentioned, which ramped up significantly in the second quarter.

Speaker #1: Second quarter operating income was $75 million. You can see from the bridge on the lower left that volume contributed $4 million and pricing contributed $8 million to income.

Speaker #4: The first half operating bridge on the bottom right shows that volume delivered $13 million of additional income, and higher pricing contributed $14 million. The biggest challenge this year has been the higher costs I just mentioned, which ramped up significantly in the second quarter.

Speaker #1: However, overall cost increases totaled $16 million in the quarter, as we experienced higher freight, energy, and energy-linked costs such as mining. The cost environment remains dynamic, and further price adjustments will be necessary until costs stabilize and we fully offset these increases.

Speaker #2: Earnings per share, excluding special items, grew 3% in the second quarter and are up 11% year-to-date. I'd also like to note that EBITDA is up 5% year-to-date.

Speaker #4: Earnings per share, excluding special items, grew 3% in the second quarter and are up 11% year-to-date. I'd also like to note that EBITDA is up 5% year-to-date.

Operator 2: Chorus Call, your name, please. Hi. David Brown. Company you're with? Aya. You're on hold till the call begins. Thank you.

Speaker #2: Now let's turn to a review of our segments, beginning with consumer and specialties. Second quarter sales in the consumer and specialties segment were $275 million.

Speaker #4: Now let's turn to a review of our segments, beginning with consumer and specialties. Second quarter sales in the consumer and specialties segment were $275 million.

Speaker #1: Moving to the top right side of the slide, sales have grown 7% in the first half over last year, with 5% growth in Consumer and Specialties, and 10% growth in Engineered Solutions.

Speaker #2: Sales in our household and personal care product line were $123 million. Following a very strong first quarter, cat litter sales moderated in the second quarter.

Speaker #4: Sales in our household and personal care product line were $123 million. Following a very strong first quarter, cat litter sales moderated in the second quarter.

Speaker #1: We'll show year-to-date figures in a few places today to highlight the growth so far this year, and to highlight the magnitude of the cost impacts that we expect to fully recover once these higher costs plane over.

Speaker #2: Q2 is typically a slower seasonal period for cat litter, and customer orders also eased off following the new item fill in Q1. It's worth noting that cat litter sales have increased 9% in the first half versus prior year, and our outlook for this business remains solid.

Speaker #4: Q2 is typically a slower seasonal period for cat litter, and customer orders also eased off following the new item fill in Q1. It's worth noting that cat litter sales have increased 9% in the first half versus prior year, and our outlook for this business remains solid.

Speaker #1: The first half operating bridge on the bottom right shows that volume delivered $13 million of additional income, and higher pricing contributed $14 million. The biggest challenge this year has been the higher costs I just mentioned, which ramped up significantly in the second quarter.

Speaker #2: Our edible oil and renewable fuel expansion hit target production levels at the end of the second quarter. Our order book is solid, and we expect sales to ramp up steadily through the third quarter.

Speaker #4: Our edible oil and renewable fuel expansion hit target production levels at the end of the second quarter. Our order book is solid, and we expect sales to ramp up steadily through the third quarter.

Speaker #1: Earnings per share, excluding special items, grew 3% in the second quarter and are up 11% year-to-date. I'd also like to note that EBITDA is up 5% year-to-date.

Speaker #2: Lastly, in personal care, we had a large customer campaign in the second quarter of last year, and this year a similar campaign has moved to the second half.

Speaker #4: Lastly, in personal care, we had a large customer campaign in the second quarter of last year, and this year a similar campaign has moved to the second half.

Speaker #1: Now let's turn to a review of our segments, beginning with Consumer and Specialties. Second quarter sales in the Consumer and Specialties segment were $275 million.

Speaker #2: Second quarter sales in specialty additives were up 1% from prior year, and are 3% higher year-to-date. Global sales to paper and packaging customers are up 7% year-to-date, driven by higher volumes from our newest satellites in Asia, and this growth is helping to offset slower demand for residential construction products.

Speaker #4: Second quarter sales in specialty additives were up 1% from prior year, and are 3% higher year-to-date. Global sales to paper and packaging customers are up 7% year-to-date, driven by higher volumes from our newest satellites in Asia, and this growth is helping to offset slower demands for residential construction products.

Speaker #1: Sales in our Household and Personal Care product line were $123 million. Following a very strong first quarter, cat litter sales moderated in the second quarter.

Speaker #2: Segment operating income was $29 million in the quarter, and $62 million year-to-date. I'm showing you a first half operating income bridge on the bottom left, to highlight the price versus cost lag in this segment.

Speaker #1: Q2 is typically a slower seasonal period for cat litter, and customer orders also eased off following the new item fill in Q1. It's worth noting that cat litter sales have increased 9% in the first half versus prior year, and our outlook for this business remains solid.

Speaker #4: Segment operating income was $29 million in the quarter and $62 million year-to-date. I'm showing you a first half operating income bridge on the bottom left, to highlight the price versus cost lag in this segment.

Speaker #2: In the second quarter, we saw a significant increase in freight and energy costs. As we mentioned on the last call, this segment, and the household and personal care product line in particular, is bearing the majority of the cost increases.

Speaker #1: Our edible oil and renewable fuel expansion hit target production levels at the end of the second quarter. Our order book is solid, and we expect sales to ramp up steadily through the third quarter.

Speaker #4: In the second quarter, we saw a significant increase in freight and energy costs. As we mentioned on the last call, this segment, and the household and personal care product line in particular, is bearing the majority of the cost increases.

Speaker #2: And it's also the segment with the majority of the contractual lag on pricing. Due to the nature of our contracts in this business, we typically have a lag between cost decreases and price increases.

Speaker #1: Lastly, in Personal Care, we had a large customer campaign in the second quarter of last year, and this year a similar campaign has moved to the second half.

Speaker #4: And it's also the segments with the majority of the contractual lag on pricing. Due to the nature of our contracts in this business, we typically have a lag between cost decreases and price increases.

Speaker #2: You may recall that several years ago, it used to take us three quarters on average to catch up from a price versus cost perspective.

Speaker #1: Second quarter sales in Specialty Additives were up 1% from the prior year and are 3% higher year-to-date. Global sales to paper and packaging customers are up 7% year-to-date, driven by higher volumes from our newest satellites in Asia. This growth is helping to offset slower demand for residential construction products.

Speaker #4: You may recall that several years ago, it used to take us three quarters on average to catch up from a price versus cost perspective.

Speaker #2: Since then, we've shortened that time to around three to four months on average, by making changes to our contracts to better line up our cost-price timing.

Speaker #4: Since then, we've shortened that time to around three to four months on average by making changes to our contracts to better line up our cost-price timing.

Speaker #2: And we continue to drive improvement in this area. However, until cost pressures plane over, we're still about 90 days away from fully catching up in this segment.

Speaker #4: And we continue to drive improvement in this area. However, until cost pressures plane over, we're still about 90 days away from fully catching up in this segment.

Speaker #1: Segment operating income was $29 million in the quarter, and $62 million year-to-date. I'm showing you a first half operating income bridge on the bottom left, to highlight the price versus cost lag in this segment.

Speaker #2: Looking ahead to the third quarter, we expect segment sales to increase in the three to five percent range versus prior year, driven primarily by growth in the household and personal care product line.

Speaker #4: Looking ahead to the third quarter, we expect segment sales to increase in the three to five percent range versus prior year, driven primarily by growth in the household and personal care product line.

Speaker #1: In the second quarter, we saw a significant increase in freight and energy costs. As we mentioned on the last call, this segment—and the Household and Personal Care product line in particular—is bearing the majority of the cost increases.

Speaker #2: Now let's turn to the engineered solutions segment. Second quarter sales in the engineered solutions segment increased 9% from prior year, to $274 million. Extending the growth momentum we saw to start the year.

Speaker #4: Now let's turn to the engineered solutions segment. Second quarter sales in the engineered solutions segment increased 9% from prior year, to $274 million. Extending the growth momentum we saw to start the year.

Speaker #1: And it's also the segment with the majority of the contractual lag on pricing. Due to the nature of our contracts in this business, we typically have a lag between cost decreases and price increases.

Speaker #2: In total, segment sales are up 10% through the first half of the year. In high-temperature technologies, sales of $190 million were up 7% for the quarter, and sales are also up 7% year-to-date for this product line.

Speaker #4: In total, segment sales are up 10% through the first half of the year. In high-temperature technologies, sales of $190 million were up 7% for the quarter, and sales are also up 7% year-to-date for this product line.

Speaker #1: You may recall that several years ago, it used to take us three quarters on average to catch up from a price versus cost perspective.

Speaker #2: Sales to steel customers in North America remained strong. And we've started to see signs of improved demand in Europe as well. Sales growth to foundry customers in Asia was very strong.

Speaker #1: Since then, we've shortened that time to around three to four months on average, by making changes to our contracts to better line up our cost-price timing.

Speaker #4: Sales to steel customers in North America remained strong. And we've started to see signs of improved demand in Europe as well. Sales growth to foundry customers in Asia was very strong.

Speaker #1: And we continue to drive improvement in this area. However, until cost pressures plane over, we're still about 90 days away from fully catching up in this segment.

Speaker #2: With second quarter sales up 14% versus prior year. Environmental and infrastructure sales were $84 million in the second quarter, representing a 15% increase from prior year, and year-to-date sales are up 19%.

Speaker #4: With second quarter sales up 14% versus prior year. Environmental and infrastructure sales were $84 million in the second quarter, representing a 15% increase from prior year, and year-to-date sales are up 19%.

Speaker #1: Looking ahead to the third quarter, we expect segment sales to increase in the 3 to 5 percent range versus prior year, driven primarily by growth in the household and personal care product line.

Speaker #2: Demand for our building materials products was strong this quarter, with sales up 41% versus prior year, driven by some large projects in the quarter.

Speaker #1: Now let's turn to the engineered solutions segment. Second quarter sales in the engineered solutions segment increased 9% from prior year, to $274 million. Extending the growth momentum we saw to start the year.

Speaker #4: Demand for our building materials products was strong this quarter, with sales up 41% versus prior year, driven by some large projects in the quarter.

Speaker #2: Growth in drilling products also remained strong, with sales up 20% versus prior year. And sales for environmental lining solutions were up 18% in the second quarter, driven by higher project activity levels, particularly in the mining sector.

Speaker #4: Growth in drilling products also remained strong, with sales up 20% versus prior year. And sales for environmental lining solutions were up 18% in the second quarter, driven by higher project activity levels, particularly in the mining sector.

Speaker #1: In total, segment sales are up 10% through the first half of the year. In High-Temperature Technologies, sales of $190 million were up 7% for the quarter, and sales are also up 7% year-to-date for this product line.

Speaker #2: Operating income for the quarter was $49 million, and totaled $88 million year-to-date. You can see in the year-to-date operating income bridge that sales growth is translating well to operating income.

Speaker #4: Operating income for the quarter was $49 million, and totaled $88 million year-to-date. You can see in the year-to-date operating income bridge that sales growth is translating well to operating income.

Speaker #1: Sales to steel customers in North America remained strong, and we've started to see signs of improved demand in Europe as well. Sales growth to foundry customers in Asia was very strong, with second quarter sales up 14% versus prior year.

Speaker #2: Which is up 13% versus last year. And price adjustments are keeping pace with the cost increases we're seeing. Operating income represented 17.8% of sales in the second quarter, a record for the segment.

Speaker #4: Which is up 13% versus last year. And price adjustments are keeping pace with the cost increases we're seeing. Operating income represented 17.8% of sales in the second quarter, a record for the segment.

Speaker #1: Environmental and Infrastructure sales were $84 million in the second quarter, representing a 15% increase from the prior year, and year-to-date sales are up 19%. Demand for our Building Materials products was strong this quarter, with sales up 41% versus prior year, driven by some large projects in the quarter.

Speaker #2: Looking ahead to the third quarter, we're expecting sales growth of three to five percent versus prior year for the segment. Now let me turn to a summary of our balance sheet and cash flow highlights.

Speaker #4: Looking ahead to the third quarter, we're expecting sales growth of three to five percent versus prior year for the segment. Now let me turn to a summary of our balance sheet and cash flow highlights.

Speaker #2: We had another strong cash flow performance in the second quarter, bringing year-to-date cash from operations to $95 million, up 37 million from last year.

Speaker #1: Growth in drilling products also remained strong, with sales up 20% versus the prior year. Sales for environmental lining solutions were up 18% in the second quarter, driven by higher project activity levels, particularly in the mining sector.

Speaker #4: We had another strong cash flow performance in the second quarter, bringing year-to-date cash from operations to $95 million, up 37 million from last year.

Speaker #2: Capital expenditure was $27 million in the second quarter, and we continue to expect full-year capex in the $90 to $100 million range. Year-to-date free cash flow of $45 million is up significantly versus prior year.

Speaker #4: Capital expenditure was $27 million in the second quarter, and we continue to expect full-year capex in the $90 to $100 million range. Year-to-date free cash flow of $45 million is up significantly versus prior year.

Speaker #1: Operating income for the quarter was $49 million, and totaled $88 million year-to-date. You can see in the year-to-date operating income bridge that sales growth is translating well to operating income.

Speaker #2: Cash flow is expected to continue to build through the second half, and we expect full-year free cash flow to be in the range of 6 to 7 percent of sales.

Speaker #4: Cash flow is expected to continue to build through the second half, and we expect full-year free cash flow to be in the range of 6 to 7 percent of sales.

Speaker #1: Which is up 13% versus last year. And price adjustments are keeping pace with the cost increases we’re seeing. Operating income represented 17.8% of sales in the second quarter, a record for the segment.

Speaker #2: Our balance sheet remains solid, with our net leverage ratio at 1.6 times EBITDA. Now I'll summarize our outlook for the third quarter. Overall, we expect a similar performance sequentially, with third quarter sales of approximately $550 million representing an increase of around 4% from prior year.

Speaker #4: Our balance sheet remains solid, with our net leverage ratio at 1.6 times EBITDA. Now I'll summarize our outlook for the third quarter. Overall, we expect a similar performance sequentially, with third quarter sales of approximately $550 million representing an increase of around 4% from prior year.

Speaker #1: Looking ahead to the third quarter, we're expecting sales growth of 3 to 5 percent versus prior year for the segment. Now let me turn to a summary of our balance sheet and cash flow highlights.

Speaker #2: In the consumer and specialties segment, we expect sales to grow three to five percent versus prior year, driven primarily by the household and personal care product line.

Speaker #1: We had another strong cash flow performance in the second quarter, bringing year-to-date cash from operations to $95 million up 37 million from last year.

Speaker #4: In the consumer and specialties segment, we expect sales to grow three to five percent versus prior year, driven primarily by the household and personal care product line.

Speaker #2: We're seeing stronger sales for cat litter early in the quarter, and we expect this will continue. And with our natural oil purification expansion running at target rates, we're expecting a solid quarter growth for this business.

Speaker #1: Capital expenditure was $27 million in the second quarter, and we continue to expect full-year capex in the $90 to $100 million range. Year-to-date free cash flow of $45 million is up significantly versus the prior year.

Speaker #4: We're seeing stronger sales for cat litter early in the quarter, and we expect this will continue. And with our natural oil purification expansion running at target rates, we're expecting a solid quarter growth for this business.

Speaker #2: The only area where we're not seeing improvement for this segment is the residential construction market. Which remains soft relative to last year. In the engineered solutions segment, we also anticipate third quarter growth in the three to five percent range versus prior year.

Speaker #1: Cash flow is expected to continue to build through the second half, and we expect full-year free cash flow to be in the range of 6% to 7% of sales.

Speaker #4: The only area where we're not seeing improvement for this segment is the residential construction market. Which remains soft relative to last year. In the engineered solutions segment, we also anticipate third quarter growth in the three to five percent range versus prior year.

Speaker #1: Our balance sheet remains solid, with our net leverage ratio at 1.6 times EBITDA. Now, I'll summarize our outlook for the third quarter. Overall, we expect a similar performance sequentially, with third quarter sales of approximately $550 million, representing an increase of around 4% from the prior year.

Speaker #2: And overall, we expect similar market conditions sequentially for this segment. We're expecting growth in high-temperature technologies to be driven by another quarter of steady demands from steel customers.

Speaker #4: And overall, we expect similar market conditions sequentially for this segment. We're expecting growth in high-temperature technologies to be driven by another quarter of steady demands from steel customers.

Speaker #2: And in environmental and infrastructure, we expect year-over-year demand improvement to continue into the third quarter. Overall, for MTI, we expect similar operating income sequentially, of around $75 million and earnings per share of between $1.55 and $1.60.

Speaker #4: And in environmental and infrastructure, we expect year-over-year demand improvement to continue into the third quarter. Overall, for MTI, we expect similar operating income sequentially, of around $75 million and earnings per share of between $1.55 and $1.60.

Speaker #1: In the Consumer and Specialties segment, we expect sales to grow 3% to 5% versus the prior year, driven primarily by the Household and Personal Care product line.

Speaker #1: We're seeing stronger sales for cat litter early in the quarter, and we expect this will continue. And with our natural oil purification expansion running at target rates, we're expecting a solid quarter growth for this business.

Speaker #2: We expect to fully leverage these higher levels of sales into income, as soon as our price-cost dynamics take hold in consumer and specialties. We expect overall operating margin to recover in the fourth quarter to slightly above prior year levels, with the normal seasonality moving from Q3 to Q4.

Speaker #4: We expect to fully leverage these higher levels of sales into income, as soon as our price-cost dynamics take hold in consumer and specialties. We expect overall operating margin to recover in the fourth quarter to slightly above prior year levels, with the normal seasonality moving from Q3 to Q4.

Speaker #1: The only area where we're not seeing improvement for this segment is the residential construction market, which remains soft relative to last year. In the Engineered Solutions segment, we also anticipate third quarter growth in the 3% to 5% range versus prior year.

Speaker #2: We remain confident in our growth trajectory, and we continue to expect full-year sales growth in the mid-single-digit range. And with several growth initiatives ramping up in the second half of this year, we expect this growth rate to continue into next year.

Speaker #4: We remain confident in our growth trajectory, and we continue to expect full-year sales growth in the mid-single-digit range. And with several growth initiatives ramping up in the second half of this year, we expect this growth rate to continue into next year.

Speaker #1: And overall, we expect similar market conditions sequentially for this segment. We're expecting growth in high-temperature technologies to be driven by another quarter of steady demands from steel customers.

Speaker #2: With that, I'll turn the call back over to Doug.

Speaker #1: Thanks, Eric. A couple of other items I'd like to touch on before we finish. This month, we're proud to publish our 18th annual sustainability report.

Speaker #4: With that, I'll turn the call back over to Doug.

Speaker #1: And in Environmental and Infrastructure, we expect year-over-year demand improvement to continue into the third quarter. Overall, for MTI, we expect similar operating income sequentially, of around $75 million, and earnings per share of between $1.55 and $1.60.

Speaker #1: Thanks, Eric. A couple of other items I'd like to touch on before we finish. This month, we're proud to publish our 18th annual sustainability report.

Speaker #1: Sustainability has always been a part of the DNA of our company, not only because it's one of our core values, but also because we believe it supports our continued growth, as well as our customers' growth.

Speaker #1: You can download the full report on the Sustainability page of our website, at mineralstech.com. But let me take you through some of the highlights.

Speaker #1: We expect to fully leverage these higher levels of sales into income as soon as our price-cost dynamics take hold in Consumer and Specialties. We expect overall operating margin to recover in the fourth quarter to slightly above prior year levels, with the normal seasonality moving from Q3 to Q4.

Speaker #1: You can download the full report on the Sustainability page of our website at mineralstech.com. But let me take you through some of the highlights.

Speaker #1: In 2025, we achieved a company best and world-class safety performance, reflecting our continuous improvement culture, tied to our deep commitment to keeping all employees safe.

Speaker #1: In 2025, we achieved a company-best and world-class safety performance, reflecting our continuous improvement culture, tied to our deep commitment to keeping all employees safe.

Speaker #1: 2025 was also the target year for achieving the 12 of the environmental goals we set for ourselves back in 2018, and are pleased to report that most of our results exceeded our expectations.

Speaker #1: We remain confident in our growth trajectory, and we continue to expect full-year sales growth in the mid-single-digit range. And with several growth initiatives ramping up in the second half of this year, we expect this growth rate to continue into next year.

Speaker #1: Let me give you some highlights of what we accomplished. First, we reduced our CO2 emissions by approximately 40%. We also eliminated the use of coal at all but one of our facilities, reducing consumption by 70% and converted 34% of our fuel oil usage to renewable alternatives.

Speaker #1: With that, I'll turn the call back over to Doug.

Speaker #2: Thanks, Erik. A couple of other items I'd like to touch on before we finish. This month, we're proud to publish our 18th annual Sustainability Report.

Speaker #1: We reduced landfill waste by 44%, and now divert approximately 56,000 tons of waste annually through beneficial reuse. We reduced water consumption by over 30% and water discharge by almost 60%.

Speaker #2: Sustainability has always been a part of the DNA of our company, not only because it's one of our core values, but also because we believe it supports our continued growth as well as our customers' growth.

Speaker #2: You can download the full report on the Sustainability page of our website, at mineralstech.com. But let me take you through some of the highlights.

Speaker #1: Which equates to over 660 million gallons of water saved each year. That's enough water to supply a mid-sized American town annually. In this year's report, we also announced our new 10-year targets through 2035, which build on the successful achievement of the previous targets we established in 2018.

Speaker #2: In 2025, we achieved a company-best and world-class safety performance, reflecting our continuous improvement culture and our deep commitment to keeping all employees safe.

Speaker #1: Which equates to over 660 million gallons of water saved each year. That's enough water to supply a mid-sized American town annually. In this year's report, we also announced our new tenure targets through 2035, which build on the successful achievement of the previous targets we established in 2018.

Speaker #2: 2025 was also the target year for achieving the 12 of the environmental goals we set for ourselves back in 2018, and are pleased to report that most of our results exceeded our expectations.

Speaker #1: We are aiming to reduce our environmental impact by another 20% on an absolute basis, and 30% on a per-ton basis. Sustainability continues to be a meaningful driver of MTI's long-term growth strategy.

Speaker #1: We are aiming to reduce our environmental impact by another 20% on an absolute basis and 30% on a per-ton basis. Sustainability continues to be a meaningful driver of MTI's long-term growth strategy.

Speaker #2: Let me give you some highlights of what we accomplished. First, we reduced our CO2 emissions by 40%. We also eliminated the use of coal at all but one of our facilities, reducing consumption by 70%, and converted 34% of our fuel oil usage to renewable alternatives.

Speaker #1: Over the last five years, 67% of the products commercialized by MTI have had a sustainable profile. Many of these products, like raffinol for sustainable aviation fuel, fluorosorb for PFAS remediation, and our new yield line of products, are examples of how we have tied together our minerals and our technologies to create sustainable solutions.

Speaker #1: Over the last five years, 67% of the product's commercialized by MTI have had a sustainable profile. Many of these products, like raffinol for sustainable aviation fuel, fluorosorb for P-phos remediation, and our new yield line of products, are examples of how we have tied together our minerals and our technologies to create sustainable solutions.

Speaker #2: We reduced landfill waste by 44%, and now divert approximately 56,000 tons of waste annually through beneficial reuse. We reduced water consumption by over 30% and water discharge by almost 60%.

Speaker #1: These efforts are impressive by any measure, and were achieved by the employees at MTI who are dedicated to continuous improvement in all that we do.

Speaker #1: I'd like to thank all of our employees for their support. Lastly, a plug for our upcoming investor day, which will be held on September 22nd at our R&D facility in Bethlehem, Pennsylvania.

Speaker #2: Which equates to over 660 million gallons of water saved each year. That's enough water to supply a mid-sized American town annually. In this year's report, we also announced our new 10-year targets through 2035, which build on the successful achievement of the previous targets we established in 2018.

Speaker #1: At our last investor day, we showcased the innovation and technical capabilities that support our bentonite-based businesses, at our R&D facility in Hoffman Estates near Chicago.

Speaker #1: This time, in Bethlehem, we'll focus on innovations related to our crystal engineering technology in the calcium carbonate side of our business, as well as the engineered blends technologies used in our high-temperature products for steel and other metal industries.

Speaker #2: We are aiming to reduce our environmental impact by another 20% on an absolute basis and 30% on a per-ton basis. Sustainability continues to be a meaningful driver of MTI's long-term growth strategy.

Speaker #2: Over the last five years, 67% of the product's commercialized by MTI have had a sustainable profile. Many of these products, like raffinol for sustainable aviation fuel, fluorosorb for P-phos remediation, and our new yield line of products, are examples of how we have tied together our minerals and our technologies to create sustainable solutions.

Speaker #1: We're excited to take you through these innovation pipelines, and introduce some exciting new strategic projects that we see driving growth over the next five years.

Speaker #1: If you'd like to attend in person, please reach out to Lydia Kopylova, our head of investor relations, and I hope to see many of you there.

Speaker #1: If you'd like to attend in person, please reach out to Lydia Kopalova, our head of investor relations, and I hope to see many of you there.

Speaker #1: With that, let me open the call for questions.

Speaker #3: We will now begin the question and answer session. Do ask a question. You may press star, then one on your touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #2: These efforts are impressive by any measure, and were achieved by the employees at MTI who are dedicated to continuous improvement in all that we do.

Speaker #1: With that, let me open the call for questions.

Speaker #2: We will now begin the question and answer session. Do ask a question. You may press star, then one on your touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #2: I'd like to thank all of our employees for their support. Lastly, a plug for our upcoming investor day, which will be held on September 22nd at our R&D facility in Bethlehem, Pennsylvania.

Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Nathaniel Moore with CJS Securities.

Speaker #2: If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Nathaniel Moore with CJS Securities.

Speaker #2: At our last Investor Day, we showcased the innovation and technical capabilities that support our bentonite-based businesses at our R&D facility in Hoffman Estates near Chicago.

Speaker #3: Please go ahead.

Speaker #4: Thank you. Good morning, Doug. Good morning, Eric. Appreciate all the color. Thanks for taking the question.

Speaker #2: Please go ahead.

Speaker #1: Hi, Dan.

Speaker #1: Thank you. Good morning, Doug. Good morning, Eric. Appreciate all the color. Thanks for taking the question.

Speaker #2: This time, in Bethlehem, we'll focus on innovations related to our crystal engineering technology in the calcium carbonate side of our business, as well as the engineered blends technologies used in our high-temperature products for steel and other metal industries.

Speaker #4: Start with the yeah. Obviously, year-to-date, you still have really good strength in consumer and specialties, in cat litter, personal and household products. Just if you could dive a little bit deeper into the kind of timing of trends in Q2, particularly on the cat litter side, and then talk to your confidence about getting back to kind of mid-single-digit growth trajectory in Q3 and the back half.

Speaker #3: Hi, Dan.

Speaker #1: Start with the yeah. Obviously, year-to-date, you still have really good strength in consumer and specialties and cat litter, personal and household products. Just if you could dive a little bit deeper into the kind of timing of trends in Q2, particularly on the cat litter side, and then talk to your confidence about getting back to kind of mid-single-digit growth trajectory in Q3 and the back half.

Speaker #2: We're excited to take you through these innovation pipelines and introduce some exciting new strategic projects that we see driving growth over the next five years.

Speaker #2: If you'd like to attend in person, please reach out to Lydia Kopylova, our Head of Investor Relations, and I hope to see many of you there.

Speaker #2: With that, let me open the call for questions.

Speaker #1: Yeah, sure. So I think you're talking more about the sales. In HPC, I think it was really driven in the first yeah, driven in the first quarter by cat litter, as you remember.

Speaker #3: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker #3: Yeah, sure. So I think you're talking more about the sales. In HPC, I think it was really driven in the first yeah, driven in the first quarter by cat litter, as you remember.

Speaker #1: I think sales were up like 19% in cat litter in the first quarter. A lot of that, we think, was due. We saw it was due to the channel fill distribution centers of all of our new products really came in strong.

Speaker #3: I think sales were up like 19% in cat litter in the first quarter. A lot of that, we think, was due. We saw it was due to the channel fill distribution centers of all of our new products really came in strong.

Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2. Our first question comes from Nathaniel Moore with CJS Securities.

Speaker #1: As Eric mentioned, I think over the second quarter, with those distributions full, I think some of the order patterns slowed down a bit. But we're seeing that picking up again to our regular pace here in the third quarter, and we still have a really strong outlook for that business for this year.

Speaker #3: Please go ahead.

Speaker #3: As Eric mentioned, I think over the second quarter, with those distributions full, I think some of the order patterns slowed down a bit. But we're seeing that picking up again to our regular pace here in the third quarter, and we still have a really strong outlook for that business for this year.

Speaker #4: Thank you. Good morning, Doug. Good morning, Erik. I appreciate all the color, and thanks for taking the question.

Speaker #2: Hi, Dan.

Speaker #1: DJ, you want to add any color to some of the new products, things that are going on?

Speaker #4: Yeah, obviously year-to-date you still have really good strength in Consumer and Specialties, and cat litter, personal and household products. Just, if you could dive a little bit deeper into the timing and trends in Q2, particularly on the cat litter side, and then talk to your confidence about getting back to kind of a mid-single-digit growth trajectory in Q3 and the back half.

Speaker #4: Yeah, thanks, Doug. So Dan, just to bring into it a little bit, these new products that we're launching, we're pretty excited about them, and right now, as we're going into the third quarter, we're getting some good traction on that.

Speaker #3: DJ, you want to add any color to some of the new products, things that are going on?

Speaker #1: Yeah, thanks, Doug. So Dan, just to bring into it a little bit, these new products that we're launching were pretty excited about them, and right now, as we're going into the third quarter, we're getting some good traction on that.

Speaker #4: But as I look back, I'm pretty happy with the top-line growth with pet care. I mean, at that 9%, it's double what the ongoing markets are in North America, and Europe, the same thing.

Speaker #1: But as I look back, I'm pretty happy with the top-line growth with PetCare. I mean, at that 9%, it's double what the ongoing markets are in North America, and Europe, the same thing.

Speaker #4: We're well above what the market rates are, and that's been mostly driven by these new products and just lining up with some major retailers.

Speaker #2: Yeah, sure. So I think you're talking more about the sales. In HPC, I think it was really driven in the first yeah, driven in the first quarter by cat litter, as you remember.

Speaker #1: We're well above what the market rates are, and that's been mostly driven by these new products and just lining up with some major retailers.

Speaker #4: So we see that continuing strong for the second half of the year, and in the meantime, working as Eric was talking about, on getting pricing up to offset some of the persistent inflationary increases that we're seeing.

Speaker #2: I think sales were up like 19% in cat litter in the first quarter. A lot of that, we think, was due—we saw it was due to the channel fill. Distribution centers of all of our new products really came in strong.

Speaker #1: So we see that continuing strong for the second half of the year. And in the meantime, working, as Eric was talking about, on getting pricing up to offset some of the persistent inflationary increases that we're seeing.

Speaker #1: Dan, on the other yeah, sorry. Go ahead. On the other thing I'd add to that, you were talking about timing and some of that Eric mentioned in his comments was our bleaching earth or the oil purification business.

Speaker #2: As Erik mentioned, I think over the second quarter, with those distributions full, I think some of the order patterns slowed down a bit. But we're seeing that picking up again to our regular pace here in the third quarter, and we still have a really strong outlook for that business for this year.

Speaker #3: Dan, on the other yeah, sorry. Go ahead. On the other thing I'd add to that, you were talking about timing and some of that Eric mentioned in his comments was our bleaching earth or the oil purification business.

Speaker #1: Strong order book, as Eric mentioned, that facility our expansion is now fully ramped up. It came online fully online at the end of the second quarter.

Speaker #2: DJ, do you want to add any color to some of the new products or things that are going on?

Speaker #4: Yeah, thanks, Doug. So, Dan, just to bring you into it a little bit, these new products that we're launching—we're pretty excited about them. Right now, as we're going into the third quarter, we're getting some good traction on that.

Speaker #3: Strong order book, as Eric mentioned, that facility, our expansion is now fully ramped up. It came online fully online at the end of the second quarter.

Speaker #1: We thought some of those new sales would come into the second quarter, but it looks like with that ramp-up late in the second, those are going to be a ramping up through the third.

Speaker #3: We thought some of those new sales would come into the second quarter, but it looks like with that ramp-up late in the second, those are going to be a ramping up through the third.

Speaker #4: But as I look back, I'm pretty happy with the top-line growth with PetCare. I mean, at that 9%, it's double what the ongoing markets are in North America. And in Europe, it's the same thing.

Speaker #1: So the timing should be some growth in HPC, not only from pet litter, but the sustainable aviation fuel orders that we have on the books for the back half of the year.

Speaker #3: So the timing should be some growth in HPC, not only from pet litter but the sustainable aviation fuel orders that we have on the books for the back half of the year.

Speaker #4: Helpful. On the cost side, you've been clearly demonstrated the ability to take pricing to offset inflation over the last several years. This environment clearly unusual.

Speaker #4: We're well above what the market rates are, and that's been mostly driven by these new products and just lining up with some major retailers.

Speaker #1: Helpful. On the cost side, you've been clearly demonstrated the ability to take pricing to offset inflation over the last several years. This environment clearly unusual.

Speaker #4: So we see that continuing strong for the second half of the year and, in the meantime, working—as Erik was talking about—on getting pricing up to offset some of the persistent inflationary increases that we're seeing.

Speaker #4: If costs level off to some degree, should we be able to get back to that, say, 14%-plus operating margin next year? And again, that's assuming that not necessarily flat, but a more normal environment, just kind of talk to where you think the business should be as things normalize over time.

Speaker #1: If costs level off to some degree, should we be able to get back to that, say, 14%-plus operating margin next year? And again, that's assuming that not necessarily flat, but a more normal environment, just kind of talk to where you think the business should be as things normalize over time.

Speaker #2: Dan, on the other—yeah, sorry. Go ahead. On the other thing I'd add to that, you were talking about timing, and some of what Erik mentioned in his comments was our bleaching earth, or the oil purification business.

Speaker #2: Yeah, thanks, Dan. This is Eric. So yes, I mean, we do think that. So right now, year-to-date, we're at around 13% operating margin. We're guiding to about 13.5% for the third quarter.

Speaker #2: Strong order book, as Erik mentioned. That facility—our expansion—is now fully ramped up. It came fully online at the end of the second quarter.

Speaker #4: Yeah, thanks, Dan. This is Eric. So yes, I mean, we do think that. So right now, year-to-date, we're at around 13% operating margin. We're guiding to about 13.5% for the third quarter.

Speaker #2: We thought some of those new sales would come into the second quarter, but it looks like, with that ramp-up late in the second, those are going to be ramping up through the third.

Speaker #2: The fourth is going to be between 13 and 13.5%. So this year, we're looking at between 13 and 13.5% for the full-year operating margin.

Speaker #4: The fourth is going to be between 13 and 13.5%. So this year, we're looking at between 13 and 13.5% for the full year operating margin.

Speaker #2: So the timing should be some growth in HPC, not only from pet litter, but also from the sustainable aviation fuel orders that we have on the books for the back half of the year.

Speaker #2: That's going to depend a little bit on how costs play out for the rest of the year. The reason that we haven't caught up on the cost increases yet is because costs are still increasing for us.

Speaker #4: That's going to depend a little bit on how costs play out for the rest of the year. The reason that we haven't caught up on the cost increases yet is because costs are still increasing for us.

Speaker #4: Helpful. On the cost side, you've clearly demonstrated the ability to take pricing to offset inflation over the last several years. This environment is clearly unusual.

Speaker #2: We had increases from Q1 to Q2, and we're actually seeing increases from Q2 to Q3 as well. So the pricing that we have going into place in Q3, which is meant to cover the cost increases from Q2, it's catching us up.

Speaker #4: We had increases from Q1 to Q2, and we're actually seeing increases from Q2 to Q3 as well. So the pricing that we have going into place in Q3, which is meant to cover the cost increases from Q2, it's catching us up.

Speaker #2: But we're still going to be upside down from a price versus cost perspective in the third quarter by something like 5 to 6 million dollars.

Speaker #4: But we're still going to be upside down from a price versus cost perspective in the third quarter by something like 5 to 6 million dollars.

Speaker #2: That being said, when costs do play over, we do expect to make up that price versus cost gap. And I think we've shown historically that on the back end of that, we actually expand the margins.

Speaker #4: That being said, when costs do play over, we do expect to make up that price versus cost gap. And I think we've shown historically that on the back end of that, we actually expand the margins.

Speaker #1: Yeah, thanks, Dan. This is Erik. So yes, I mean, we do think that. So right now, year-to-date, we're at around 13% operating margin. We're guiding to about 13.5% for the third quarter.

Speaker #2: So I think we're going to be exiting this year assuming our current outlook on costs, exiting this year in a much better position to get back to our target margin level.

Speaker #4: So I think we're going to be exiting this year assuming our current outlook on costs, exiting this year in a much better position to get back to our target margin level.

Speaker #1: The fourth is going to be between 13% and 13.5%. So this year, we're looking at between 13% and 13.5% for the full-year operating margin.

Speaker #2: Assuming we're at 13.5% in the fourth quarter, that's not a bad place to be for a full-year run rate of 15%. You'd want to be closer to 14%, perhaps, but we do have that typical seasonality in Q4 and Q1 every year.

Speaker #4: Assuming we're at 13.5% in the fourth quarter, that's not a bad place to be for a full year run rate of 15%. You'd want to be closer to 14%, perhaps, but we do have that typical seasonality in Q4 and Q1 every year.

Speaker #1: That's going to depend a little bit on how costs play out for the rest of the year. The reason that we haven't caught up on the cost increases yet is because costs are still increasing for us.

Speaker #4: Yep, very helpful. One more I'll jump out. Maybe just a little bit more color on the sort of update on the BMI case. How did we come to the determination of the funding, the trust, and the $290 million charge?

Speaker #1: We had increases from Q1 to Q2, and we're actually seeing increases from Q2 to Q3 as well. So the pricing that we have going into place in Q3, which is meant to cover the cost increases from Q2, is catching us up.

Speaker #1: Yep, very helpful. One more I'll jump out. Maybe just a little bit more color on the sort of update on the BMI case. How did we come to the determination of the funding, the trust, and the $290 million charge?

Speaker #4: And I know it's not apples to apples, but obviously, Jay and Jay just came to an agreement. How does that sort of impact your confidence about the ability to get this settled and put it behind you?

Speaker #1: But we're still going to be upside down from a price versus cost perspective in the third quarter by something like 5 to 6 million dollars.

Speaker #1: And I know it's not apples to apples, but obviously, Jay and Jay just came to an agreement. How does that sort of impact your confidence about the ability to get this settled and put it behind you?

Speaker #1: That being said, when costs do play over, we do expect to make up that price versus cost gap. And I think we've shown historically that on the back end of that, we actually expand margins.

Speaker #4: Any color or commentary there would be helpful, if possible. Thanks again.

Speaker #1: Yeah, thanks. And maybe I'll answer the second part first. We saw the news on other J&Js and their settlement. That really doesn't it's a different tort.

Speaker #1: Any color or commentary there would be helpful, if possible. Thanks again.

Speaker #1: So I think we're going to be exiting this year assuming our current outlook on costs, exiting this year in a much better position to get back to our target margin level.

Speaker #3: Yeah, thanks. And maybe I'll answer the second part first. We saw the news on other J&Js and their settlement. That really doesn't it's a different tort.

Speaker #1: It doesn't have much bearing on it's probably some positive news for them to get through that, or at least come to some final. But that really doesn't have a bearing on ours.

Speaker #1: Assuming we're at 13.5% in the fourth quarter, that's not a bad place to be for a full-year run rate of 15%. You'd want to be closer to 14%, perhaps, but we do have that typical seasonality in Q4 and Q1 every year.

Speaker #3: It doesn't have much bearing on it's probably some positive news for them to get through that, or at least come to some final. But that really doesn't have a bearing on ours.

Speaker #1: Our cases. What I will say is, yes, we determined to increase our reserve for the potential for the funding of a potential plan that we filed.

Speaker #3: Our cases. What I will say is, yes, we determined to increase our reserve for the potential for the funding of a potential plan that we filed.

Speaker #4: Yep, very helpful. One more, then I'll jump out. Maybe just a little bit more color on the sort of update on the BMI case. How did we come to the determination of the funding, the trust, and the $290 million charge?

Speaker #1: To meet that court deadline. We were in mediation for many weeks before that. We wanted to put in a plan that we felt provided a fair settlement.

Speaker #3: To meet that court deadline. We were in mediation for many weeks before that. We wanted to put in a plan that we felt provided finality to the company and that we felt was a fair settlement.

Speaker #1: And through that mediation and those discussions, we determined that that was a very rich offer to be able to put that out and get finality for the company.

Speaker #3: And through that mediation and those discussions, we determined that that was a very rich offer to be able to put that out and get finality for the company.

Speaker #1: Since then, I think you might have seen that the bankruptcy has been abated, and the gating causation issue has been moved into district court.

Speaker #3: Since then, I think you might have seen that the bankruptcy has been abated, and the gating causation issue has been moved into district court.

Speaker #4: Any color or commentary there would be helpful, if possible. Thanks again.

Speaker #1: And that's where we sit now. Right now, we're just in the scheduling. So there's not much to talk about there, but we're in the scheduling aspects of that trial and that resolving that issue.

Speaker #2: Yeah, thanks. And maybe I'll answer the second part first. We saw the news on other J&Js and their settlement. That really doesn't—it's a different torque.

Speaker #3: And that's where we sit now. Right now, we're just in the scheduling. So there's not much to talk about there, but we're in the scheduling aspects of that trial and that resolving that issue.

Speaker #1: So that's where we are. But that's how we came to that determination. We wanted some finality for the company and get this behind us.

Speaker #2: It doesn't have much bearing on it. It's probably some positive news for them to get through that, or at least come to some finality. But that really doesn't have a bearing on ours.

Speaker #3: So that's where we are. But that's how we came to that determination. We wanted some finality for the company and get this behind us.

Speaker #1: And we'll see where we go from here.

Speaker #2: Our cases. What I will say is, yes, we determined to increase our reserve for the potential for the funding of a potential plan that we filed.

Speaker #4: All right. Thank you. Look forward to seeing you in September. Appreciate it.

Speaker #3: And we'll see where we go from here.

Speaker #1: Thanks, Dan.

Speaker #4: Here's the next question. Comes from Mike Harrison with Seaport Research Partners. Please go ahead.

Speaker #1: All right. Thank you. Look forward to seeing you in September. Appreciate it. Here's the next question. Comes from Mike Harrison with Seaport Research Partners.

Speaker #2: To meet that court deadline. We were in mediation for many weeks before that. We wanted to put in a plan that we felt provided finality to the company and that we felt was a fair settlement.

Speaker #3: Hi, good morning. With hoping that we could get just maybe a little bit more color on what's going on in the PC&H business, just really surprised that you guys were guiding to a high-signal-digit growth number.

Speaker #1: Please go ahead.

Speaker #5: Hi, good morning. Was hoping that we could get just maybe a little bit more color on what's going on in the PC&H business. Just really surprised that you guys were guiding to a high-signal-digit growth number.

Speaker #2: And through that mediation and those discussions, we determined that that was a very rich offer to be able to put that out and get finality for the company.

Speaker #3: And I believe it was a 3-ish percent decline. Understand there were some pieces that didn't play out relative to your expectations, but I guess, what were some of the key drivers of that meaningful shortfall?

Speaker #2: Since then, I think you might have seen that the bankruptcy has been abated, and the gating causation issue has been moved into district court.

Speaker #5: And I believe it was a 3-ish percent decline. Understand there were some pieces that didn't play out relative to your expectations, but I guess what were some of the key drivers of that meaningful shortfall?

Speaker #2: And that's where we sit now. Right now, we're just in the scheduling phase, so there's not much to talk about there, but we're in the scheduling aspects of that trial and resolving that issue.

Speaker #3: And I guess, what gives you confidence that you're going to see momentum pick back up in Q3?

Speaker #5: And I guess what gives you confidence that you're going to see momentum pick back up in Q3?

Speaker #2: So that's where we are. But that's how we came to that determination. We wanted some finality for the company and to get this behind us.

Speaker #2: Yeah, Mike, I guess let me start just with kind of bridging the shortfall to our expectations. I mean, it was really three things. The easing off of the cat litter orders from the strong Q1.

Speaker #2: And we'll see where we go from here.

Speaker #4: Yeah, Mike, I guess let me start just with kind of bridging the shortfall to our expectations. I mean, it was really three things. The easing off of the cat litter orders from the strong Q1.

Speaker #4: All right, thank you. Look forward to seeing you in September. Appreciate it. The next question comes from Mike Harrison with Seaport Research Partners.

Speaker #2: We probably overestimated where we were going to be just based on how strong the first quarter was. But like DJ said, I think we're pretty happy with the year-to-date 9% growth.

Speaker #4: We probably overestimated where we were going to be just based on how strong the first quarter was. But like DJ said, I think we're pretty happy with the year-to-date 9% growth.

Speaker #4: Please go ahead.

Speaker #2: And then seeing the orders pick back up into the third quarter, no real concerns there. But it was a difference from where our expectations were.

Speaker #5: Hi, good morning. I was hoping that we could get just maybe a little bit more color on what's going on in the PC&H business. I'm just really surprised that you guys are guiding to a high single-digit growth number.

Speaker #4: And then seeing the orders pick back up into the third quarter, no real concerns there. But it was a difference from where our expectations were.

Speaker #2: The other piece was the bleaching earth expansion. Doug already mentioned fully ramped up at the end of the second quarter, but we had assumed some sales in the second quarter for that expansion.

Speaker #4: The other piece was the bleaching earth expansion. Doug already mentioned fully ramped up at the end of the second quarter, but we had assumed some sales in the second quarter for that expansion.

Speaker #2: The only other piece I would mention is the personal care campaign that was in the second quarter last year. We were expecting it earlier in the year this year.

Speaker #5: And I believe it was a three-ish percent decline. I understand there were some pieces that didn't play out relative to your expectations, but I guess, what were some of the key drivers of that meaningful shortfall?

Speaker #4: The only other piece I would mention is the personal care campaign. That was in the second quarter last year. We were expecting it earlier in the year this year.

Speaker #2: That's moved to the second half as well. So we had a few things shift, I would say, from the second quarter out to the second half.

Speaker #4: That's moved to the second half as well. So we had a few things shift, I would say, from the second quarter out to the second half.

Speaker #2: But we're still feeling confident about the growth rates for those businesses going forward.

Speaker #5: And I guess, what gives you confidence that you're going to see momentum pick back up in Q3?

Speaker #4: But we're still feeling confident about the growth rates for those businesses going forward.

Speaker #1: Yeah, Mike, I would just add to that that so Eric, summarizes well the our interpretation of what we were thinking going into the second quarter.

Speaker #1: Yeah, Mike, I guess let me start just by kind of bridging the shortfall to our expectations. I mean, it was really three things: the easing off of the cat litter orders from the strong Q1.

Speaker #3: Yeah, Mike, I would just add to that that so Eric, summarizes well the our interpretation of what we were thinking going into the second quarter.

Speaker #1: What I'm telling you, what I'm seeing as we were going into the third, is pretty strong pull that supports some promotional activity with some key retailers that we've got.

Speaker #1: We probably overestimated where we were going to be, just based on how strong the first quarter was. But like DJ said, I think we're pretty happy with the year-to-date 9% growth.

Speaker #3: What I'm telling you, what I'm seeing as we were going into the third, is pretty strong pull that supports some promotional activity with some key retailers that we've got.

Speaker #1: That is a combination of new products with them and some new SKUs of old products, new repackaging of old products. And so right now, that pull looks very strong.

Speaker #1: And then seeing the orders pick back up into the third quarter—no real concerns there. But it was a difference from where our expectations were.

Speaker #3: That is a combination of new products with them and some new SKUs of old products, new repackaging of old products. And so right now, that pull looks very strong.

Speaker #1: The other piece was the bleaching earth expansion. Doug already mentioned it's fully ramped up at the end of the second quarter, but we had assumed some sales in the second quarter for that expansion.

Speaker #1: On the pet side, we've got some increased momentum really across the US on pet. On the bleaching earth, we're very bullish about that. We've some minor delays in getting the project up and running, but we're also impeded by some shipping challenges that were associated with some geopolitical issues.

Speaker #3: On the pet side, we've got some increased momentum really across the US on pet. On the bleaching earth, we're very bullish about that. We've some minor delays in getting the project up and running, but we're also impeded by some shipping challenges that were associated with some geopolitical issues.

Speaker #1: The only other piece I would mention is the personal care campaign that was in the second quarter last year. We were expecting it earlier in the year this year.

Speaker #1: That's moved to the second half as well. So, we had a few things shift, I would say, from the second quarter out to the second half.

Speaker #1: We've worked through that. We've got the strong supply chain going forward, supplying these sustainable aviation fuels, that are also got a good base of edible oils underneath it.

Speaker #3: We've worked through that. We've got the strong supply chain going forward, supplying these sustainable aviation fuels, that are also got a good base of edible oils.

Speaker #1: But we're still feeling confident about the growth rates for those businesses going forward.

Speaker #1: So we're feeling really good about bleaching earth, supporting that pet care growth. And again, the personal care item was just a shift from the second quarter into the third versus on that.

Speaker #2: Yeah, Mike, I would just add to that that so Erik summarizes well the our interpretation of what we were thinking going into the second quarter.

Speaker #3: Underneath it, so we're feeling really good about bleaching earth, supporting that pet care growth. And again, the personal care item was just a shift from the second quarter into the third versus on that.

Speaker #1: And so that still looks like it's going to take off. So we feel very good about this quarter coming up.

Speaker #2: What I'm telling you, what I'm seeing as we were going into the third, is a pretty strong pull that supports some promotional activity with some key retailers that we've got.

Speaker #3: And so that still looks like it's going to take off. So we feel very good about this quarter coming up.

Speaker #3: All right. And while we're on the topic, I believe last quarter you referenced a new laundry innovation or new product that a customer was going to be launching.

Speaker #2: That is a combination of new products with them and some new SKUs of old products, new repackaging of old products. And so, right now, that pull looks very strong.

Speaker #5: All right. And while we're on the topic, I believe last quarter you referenced a new laundry innovation or new product that a customer was going to be launching.

Speaker #3: Any update on the timing of any benefits coming from that laundry business?

Speaker #2: On the pet side, we've got some increased momentum really across the U.S. on pet. On the bleaching earth, we're very bullish about that. We've had some minor delays in getting the project up and running, but we're also impeded by some shipping challenges that were associated with some geopolitical issues.

Speaker #1: Yeah, thanks for the question, Mike. Glad to address that. We have done a the team's done a great job on our end on getting our portion of that lined up.

Speaker #5: Any update on the timing of any benefits coming from that laundry business?

Speaker #3: Yeah, thanks for the question, Mike. Glad to address that. We have done a the team's done a great job on our end on getting our portion of that lined up.

Speaker #1: It is in dry laundry. It is supporting some innovations out there in the market. So everything on our end is good. Everything's qualified, supply chain is set and ready to go.

Speaker #3: It is in dry laundry. It is supporting some innovations out there in the market. So everything on our end is good. Everything's qualified, supply chain is set and ready to go.

Speaker #2: We've worked through that. We've got the strong supply chain going forward, supplying these sustainable aviation fuels. That are also got a good base of edible oils.

Speaker #1: And now we just are successfully dependent on how that new product responds in the market. So we feel good about that. I don't know that it's so much in the third quarter as the fourth, but it's entirely dependent on the success of our partner and how the market is embracing that.

Speaker #3: And now we just are successfully dependent on how that new product responds in the market. So we feel good about that. I don't know that it's so much in the third quarter as the fourth, but it's entirely dependent on the success of our partner and how the market is embracing that.

Speaker #2: Underneath it. So we're feeling really good about bleaching earth, supporting that pet care growth. And again, the personal care item was just a shift from the second quarter into the third versus on that.

Speaker #3: All right. And then over on the refractory side, you noticed noted some improved pull from European steel customers. I assume that's Minskan that's driving that, but I guess any additional detail on what you're seeing and whether you think that momentum could continue?

Speaker #2: And so that still looks like it's going to take off. So we feel very good about this quarter coming up.

Speaker #5: All right. And then over on the refractory side, you noticed some improved pull from European steel customers. I assume that's Minskam that's driving that, but I guess any additional detail on what you're seeing and whether you think that momentum could continue?

Speaker #5: All right. And while we're on the topic, I believe last quarter you referenced a new laundry innovation or new product that a customer was going to be launching.

Speaker #5: Any update on the timing of any benefits coming from that laundry business?

Speaker #1: Go ahead, Brett?

Speaker #4: Yeah. Yeah, this is Brett. Hey, Mike. Look, the European market is it's still soft. But it has improved over the prior quarter. There's been some carbon regulation safeguards that have finally been put into place.

Speaker #2: Yeah, thanks for the question, Mike. Glad to address that. We have done the team's done a great job on our end on getting our portion of that lined up.

Speaker #3: Go ahead, Brent.

Speaker #1: Yeah. Yeah, this is Brett. Hey, Mike. Look, the European market is it's still soft. But it has improved over the prior quarter. There's been some carbon regulation safeguards that have finally been put into place.

Speaker #2: It is in dry laundry. It is supporting some innovations out there in the market. So everything on our end is good. Everything's qualified. Supply chain is set and ready to go.

Speaker #4: And that's really helped the threat of imports. And it's improved production. We're seeing really a lot of that production in Germany that is improving.

Speaker #1: And that's really helped the threat of imports. And it's improved production. We're seeing really a lot of that production in Germany that is improving.

Speaker #2: And now we just are successfully dependent on how that new product responds in the market. So we feel good about that. I don't know that it's so much in the third quarter as the fourth, but it's entirely dependent on the success of our partner and how the market is embracing that.

Operator 3: Good day, and welcome to the Mohawk Industries Q2 2026 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 Joe Ahlersmeyer, Vice President, Finance and Investor Relations. Please go ahead.

Operator: Good day, and welcome to the Minerals Technologies Inc. Q2 2026 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 Joe Ahlersmeyer, Vice President, Finance and Investor Relations. Please go ahead.

Speaker #4: But overall, we're starting to see some improvements. The UK just nationalized one of their major steel mills. That's going to be positive. It's been a plant that we've had business with for many, many years.

Speaker #1: But overall, we're starting to see some improvements. The UK just nationalized one of their major steel mills. we've had business with for many, many years.

Speaker #4: So when they're going to actually expand and put a third blast furnace into that production, of course, we're seeing some our Middle East business, which is part of the European growth, we're doing pretty well despite the Iran conflict.

Speaker #5: All right. And then over on the refractory side, you noticed noted some improved pull from European steel customers. I assume that's MinScan that's driving that, but I guess any additional detail on what you're seeing and whether you think that momentum could continue?

Speaker #1: So when they're going to actually expand and put a third blast furnace into that production, of course, we're seeing some our Middle East business, which is part of the European growth, we're doing pretty well despite the Iran conflict.

Speaker #4: But of course, the lanes and the logistics have been caused a little bit of commotion. But overall, we haven't lost any business. We continue to sell.

Speaker #2: Go ahead, Brent.

Joe Ahlersmeyer: Thanks, Megan. Good morning, everyone, and welcome to the Mohawk Industries quarterly investor conference call. Joining me on today's call are Jeff Lorberbaum, Chairman and Chief Executive Officer, Paul De Cock, President and Chief Operating Officer, and Nick Manthei, Chief Financial Officer. Today, we'll update you on the company's Q2 performance and provide guidance for the Q3 2026. I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including but not limited to those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include discussion of non-GAAP numbers.

Speaker #1: But of course, the lanes and the logistics have been caused a little bit of commotion. But overall, we haven't lost any business. We continue to sell.

Speaker #4: And we are seeing a little bit bigger uptick in the steel production. So that's a good sign. As far as the Minskans, in Europe, we have four units now outside of the US.

Speaker #1: And we are seeing a little bit bigger uptick in the steel production. So that's a good sign. As far as the Minskans, in Europe, we have four units now outside of the US.

Speaker #4: And that's really helped the threat production. We're seeing really a lot of that production in Germany that is improving. But overall, we're starting to see some improvements.

Speaker #4: And we installed one in Europe. This year. So there's more to come. And we see a more opportunities in Europe as the electric furnace steel production expands.

Speaker #1: And we installed one in Europe. This year. So there's more to come. And we see a more opportunities in Europe as the electric furnace steel production expands.

Speaker #4: The UK just nationalized one of their major steel mills. That's going to be positive. It's been a plant that we've had business with for many, many years.

Speaker #3: Great. Thanks very much.

Speaker #1: Thanks, Mike.

Speaker #4: The next question. And the next question comes from Pete Osterland with Jewish Securities. Please go ahead.

Speaker #5: Great. Thanks very much.

Speaker #4: So when they're going to actually expand and put a third blast furnace into that some our Middle East business, which is part of the European growth, we're doing pretty well despite the Iran conflict.

Speaker #3: Thanks, Mike.

Joe Ahlersmeyer: For a reconciliation of any non-GAAP to GAAP amounts, please refer to our Form 8-K and press release in the investor section of our website. I'll now turn the call over to Jeff for his opening remarks.

Speaker #2: The next question. And the next question comes from Pete Osterland with Truist Securities. Please go ahead.

Speaker #5: Hey, good morning. Thanks for taking the questions. So I wanted to start just by digging in a little more specifically on the CNS margins.

Speaker #1: Hey, good morning. Thanks for taking the questions. So I wanted to start just by digging in a little more specifically on the CNS margins.

Speaker #5: You mentioned that higher costs haven't yet been fully recovered due to some contractual timing. What percentage of your sales within CNS are still awaiting contract resets?

Jeff Lorberbaum: Thank you, Joe. Our Q2 results significantly exceeded our expectations as we outperformed our markets. Our net sales were $3 billion, up 6.8% versus the prior year as reported or up 5% on a constant basis. Our performance benefited from volume growth, pricing, and product mix. Across our regions, our teams effectively executed our strategies and capitalized on opportunities with new and existing customers. We successfully introduced new collections, expanded product placements, and improved our mix. In the period, volume benefited from initial stocking of new product placements and limited increases in inventory by some customers ahead of announced price increases. Our Q2 reported EPS of $3.22, and adjusted EPS was $3.67, including a benefit of approximately $0.63 from tariff refunds, which were not included in our Q2 guidance. These refunds represent the reversal of costs that we have absorbed from higher tariffs.

Speaker #4: But of course, the lanes and the logistics have been caused a little bit of commotion. But overall, we haven't lost any business. We continue to sell.

Speaker #1: You mentioned that higher costs haven't yet been fully recovered due to some contractual timing. What percentage of your sales within CNS are still awaiting contract resets?

Speaker #5: I guess if that's the right way to think about it. And should we be thinking about maybe a 200 basis point or higher margin snapback specifically in the third quarter?

Speaker #4: And we are seeing a little bit bigger uptick in the steel production. So that's a good sign. As far as the MinScans, in Europe, we have four units now outside of the US.

Speaker #1: I guess if that's the right way to think about it. And should we be thinking about maybe a 200 basis point or higher margin snapback specifically in the third quarter?

Speaker #5: Or will this more likely be a multi-quarter recovery trajectory?

Speaker #1: Or will this more likely be a multi-quarter recovery trajectory?

Speaker #2: Yeah, hi Pete. This is Eric. Thanks for the question. So look, yeah, in terms of getting the consumer and specialties margins back to target, the biggest thing right now is the price-cost catch-up.

Speaker #4: And we installed one in Europe. This year. So there's more to come. And we see a more opportunities in Europe as the electric furnace steel production expands.

Speaker #4: Yeah, hi Pete. This is Eric. Thanks for the question. So look, yeah, in terms of getting the consumer and specialties margins back to target, the biggest thing right now is the price-cost catch-up.

Speaker #2: And the fact that costs are continuing to rise means that that's going to be pushed out to the fourth quarter. So we're not expecting a major improvement Q2 to Q3.

Speaker #4: And the fact that costs are continuing to rise means that that's going to be pushed out to the fourth quarter. So we're not expecting a major improvement Q2 to Q3.

Speaker #5: Great. Thanks very much.

Speaker #2: I would say the other things we have going for us longer term is just the growth of higher margin, these consumer specialties that we talk about.

Speaker #2: Thanks, Mike.

Speaker #3: To the next question. And the next question comes from Pete Osterland with Truist Securities. Please go ahead.

Speaker #4: I would say the other things we have going for us longer term is just the growth of higher margin these consumer specialties that we talk about.

Speaker #2: That's going to help the mix overall. And just higher volumes in general just will help with fixed cost leverage. But in terms of your specific questions around the percent of contracts with a delay, a lot of that sits in the household and personal care product line within consumer and specialties.

Speaker #4: Hey, good morning. Thanks for taking the questions. So I wanted to start just by digging in a little more specifically on the CNS margins.

Speaker #4: That's going to help the mix overall. And just higher volumes in general, just will help with fixed cost leverage. But in terms of your specific questions around the percent of contracts with a delay, a lot of that sits in the household and personal care product line within consumer and specialties.

Speaker #4: You mentioned that higher costs haven't yet been fully recovered due to some contractual timing. What percentage of your sales within CNS are still awaiting contract resets?

Jeff Lorberbaum: As part of our buyback program, we purchased over 600,000 shares during the quarter for approximately $60 million. Our Q2 forecast had reflected uncertainty related to the Middle East conflict. Market conditions proved more resilient than we anticipated. Residential channels remained soft during the quarter. We believe we outpaced the market and gained share in most regions. The commercial sector continued to outperform residential. Our differentiated offering enhanced our mix and margins. The new home construction market remains pressured. Existing home sales continue to be affected by affordability challenges. In the softer environment, we're proactively managing the controllable aspects of our business, including enhancing our sales strategy, pricing, operational improvements, and managing our inventory levels and costs. Across many of our products and geographies, we executed price increases in response to higher materials, energy, and transportation costs.

Speaker #2: Historically, we've had more of a pricing lag within specialty additives, for example, in the paper and packaging business. We've done a lot of work there in terms of tightening up those lags.

Speaker #4: I guess if that's the right way to think about it. And should we be thinking about maybe a 200 basis point or higher margin snapback specifically in the third quarter?

Speaker #4: Historically, we've had more of a pricing lag within specialty additives, for example, in the paper and packaging business. We've done a lot of work there in terms of tightening up those lags.

Speaker #4: Or will this more likely be a multi-quarter recovery trajectory?

Speaker #2: And less so of an impact these days in that product line.

Speaker #1: Yeah, hi Pete. This is Erik. Thanks for the question. So look, yeah, in terms of getting the consumer and specialties margins back to target, the biggest thing right now is the price-cost catch-up.

Speaker #4: And less so of an impact these days in that product line.

Speaker #5: Got it. Very helpful. And then also, just on the record margins, within engineered solutions, was there any degree of the second quarter margin performance that you view as over-earning as opposed to permanent operational efficiency improvements?

Speaker #1: Got it. Very helpful. And then also just on the record margins, within engineered solutions, was there any degree of the second quarter margin performance that you view as over-earning as opposed to permanent operational efficiency improvements?

Speaker #1: And the fact that costs are continuing to rise means that that's going to be pushed out to the fourth quarter. So we're not expecting a major improvement Q2 to Q3.

Speaker #5: I guess, is it fair for us to be thinking about 17% plus as the structural floor for the segment going forward?

Speaker #1: I would say the other things we have going for us longer term is just the growth of higher margin, these consumer specialties that we talk about.

Speaker #1: I guess, is it fair for us to be thinking about 17% plus as the structural floor for the segment going forward?

Speaker #2: Yeah, those margins are solid. The segment is performing very well. I wouldn't call anything out as special or unusual for the second quarter. I would say if you're looking sequentially Q2 to Q3, you do have some typical seasonality in terms of customer and maintenance shutdowns in Europe.

Speaker #1: That's going to help the mix overall. And just higher volumes in general, just will help with fixed cost leverage. But in terms of your specific questions around the percent of contracts with a delay, a lot of that sits in the household and personal care.

Speaker #4: Yeah, those margins are solid. The segment is performing very well. I wouldn't call anything out as special or unusual for the second quarter. I would say if you're looking sequentially Q2 to Q3, you do have some typical seasonality in terms of customer and maintenance shutdowns in Europe.

Jeff Lorberbaum: In the H2 of the year, these higher input costs will flow through inventory and impact our margins. With continued uncertainty, additional price increases may be required this year. We are bringing innovative products to the market with differentiated features to strengthen our sales and mix. Across the business, our teams are delivering significant productivity gains. Our results are benefiting from our prior restructuring projects. In addition, we've initiated new projects focused on operational simplification, organizational realignment, warehouse consolidation, and capacity optimization, which will reduce our cost approximately $60 million, with most completed by the end of 2027. These savings will require cash restructuring costs of approximately $50 million.

Speaker #1: Product line within consumer and specialties. Historically, we've had more of a pricing lag within specialty additives, for example, in the paper and packaging business.

Speaker #2: For some of the more industrial businesses, but I think we're setting a new baseline for this business from a margin perspective.

Speaker #4: For some of the more industrial businesses, but I think we're setting a new baseline for this business from a margin perspective.

Speaker #1: Yeah, Peter, I think the only thing I'd add to that is we kind of signaled that there was some pent-up profitability in this business, right?

Speaker #1: We've done a lot of work there in terms of tightening up those lags. And less so of an impact these days in that product line.

Speaker #3: Yeah, Peter, I think the only thing I'd add to that is we're kind of signaled that there was some pent-up profitability in this business, right?

Speaker #1: So the high-temperature technologies business, operating really well, new products, Minskans, contractual volumes coming through, steel markets are in Europe are improving. North America has been strong for the past year or so.

Speaker #3: So the high-temperature technologies business, operating really well, new products, Minskans, contractual volumes coming through, steel markets are in Europe are improving. North America has been strong for the past year or so.

Speaker #4: Got it. Very helpful. And then also just on the record margins, within engineered solutions, was there any degree of the second quarter margin performance that you view as over-earning as opposed to permanent operational efficiency improvements?

Speaker #1: But we've had almost two years of kind of a lull in our environmental products business. And that's starting to turn a little bit. We've had five quarters of growth in that business, in that product line.

Speaker #3: But we've had almost two years of kind of a lull in our environmental products business. And that's starting to turn a little bit. We've had five quarters of growth in that business.

Speaker #1: And we said, as that starts to turn, that's a lot of contribution that comes through. It's project-based, a little bit lumpy still, but at the same time, we're starting to see our offshore oil grew 22% in the first half of the year.

Speaker #4: I guess is it fair for us to be thinking about 17% plus as the structural floor for the segment going forward?

Speaker #3: In that product line. And we said as that starts to turn, that's a lot of contribution that comes through. It's project-based. A little bit lumpy still, but at the same time, we're starting to see our offshore oil grew 22% in the first half of the year.

Jeff Lorberbaum: We recently released our 17th Annual Impact Report, which highlights the successful completion of our 2025 sustainability goals. These efforts lowered our emission intensity by 31%, waste-to-landfill intensity by 55%, and water intensity by 50% from our base year. To read the report and see all of our accomplishments, visit the sustainability section of our website. On a personal note, we announced that I would be retiring as CEO and turning over the reins to Paul. With 25 years as Mohawk's CEO, I've taken great pride in watching our talented organization transform Mohawk into the world's largest flooring manufacturer. Together, we've established leading market positions on—

Jeff Lorberbaum: We recently released our 17th Annual Impact Report, which highlights the successful completion of our 2025 sustainability goals. These achievements include lowering our emission intensity by 31%, waste to landfill intensity by 55%, and water intensity by 50% from our base year. To read the report and see all of our accomplishments, visit the sustainability section of our website. On a personal note, we announced that I would be retiring as CEO and would be turning over the reins to Paul. With 25 years as Mohawk's CEO, I've taken great pride in watching our talented organization transform Mohawk into the world's largest flooring manufacturer. Together, we've established leading market positions on.

Speaker #1: Yeah, those margins are solid. The segment is performing very well. I wouldn't call anything out as special or unusual for the second quarter. I would say if you're looking sequentially Q2 to Q3, you do have some typical seasonality in terms of customer and maintenance shutdowns in Europe.

Speaker #1: Drilling products and infrastructure for infrastructure drilling has been really doing well. Building products is starting to turn. And our environmental products and water products and floor absorb is in there too.

Speaker #3: Drilling products and infrastructure for infrastructure drilling has been really doing well. Building products is starting to turn. And our environmental products and water products and floor absorb is in there too.

Speaker #1: So we still see there's more growth potential. So that business, as you start to see these volumes of one of these product lines start to move, really drops to the bottom line in good contribution.

Speaker #1: For some of the more industrial businesses, but I think we're setting a new baseline for this business from a margin perspective.

Speaker #3: So we still see there's more growth potential. So that business, as you start to see these volumes of one of these product lines start to move, really drops to the bottom line in good contribution.

Speaker #2: And Peter, I think the only thing I'd add to that is we kind of signaled that there was some pent-up profitability in this business, right?

Speaker #1: And that's what you're seeing. And we think that's stable. Now, the other side of the business, still good growth, right? We've got, as Eric mentioned, that lag that we're going to move ourselves through.

Speaker #3: And that's what you're seeing. And we think that's stable. Now, the other side of the business, still good growth, right? We've got, as Eric mentioned, that lag that we're going to move ourselves through.

Speaker #2: So the high-temperature technologies business, operating really well, new products, MinScans, contractual volumes coming through, steel markets are in Europe are improving. North America has been strong for the past year or so.

Speaker #1: And those costs parked there. There's a lot of transportation, energy. We'll get that pushed through. But that growth is there. And we start to leverage that growth to the bottom line.

Speaker #3: And those costs parked there. There's a lot of transportation, energy. We'll get that pushed through. But that growth is there. And we start to leverage that growth to the bottom line.

Speaker #1: I think that's a yeah, we got some work to do on the household and personal care business and costs. But once we get that work done, I think we got both sides of the business kind of moving along.

Speaker #2: But we've had almost two years of kind of a lull in our environmental products business. And that's starting to turn a little bit. We've had five quarters of growth in that business.

Speaker #3: I think that's a yeah, we got some work to do on the household and personal care business and costs. But once we get that work done, I think we got to both sides of the business kind of moving along.

Speaker #1: That's where we see that margin improvement. With the 17 on one side and moving the other side up to 14, you start to start to see that 15, 16 percent as we push through.

Speaker #2: And that product line. And we said as that starts to turn, that's a lot of contribution that comes through. It's project-based. A little bit lumpy still, but at the same time, we're starting to see our offshore oil grew 22% in the first half of the year.

Speaker #3: That's where we see that margin improvement. With the 17 on one side and moving the other side up to 14, you start to start to see that 15, 16 percent as we push through.

Speaker #1: Now, a lot of things have to line up. We've got some work to do. But I think we're setting up for that margin improvement.

Speaker #3: Now, a lot of things have to line up. We've got some work to do. But I think we're setting up for that margin improvement.

Speaker #1: It's unfortunate we have this delay still. But we'll move through it. And we'll deliver that profitability.

Speaker #3: It's unfortunate we have this delay still. But we'll move through it. And we'll deliver that profitability.

Speaker #2: Drilling products and infrastructure for infrastructure drilling has been really doing well. Building products is starting to turn. And our environmental products and water products and fluorosorb is in there too.

Speaker #5: All right. Excellent. Thanks a lot.

Speaker #4: And the next question comes from David SIlver with Freedom Capital Markets. Please go ahead.

Speaker #1: All right. Excellent. Thanks a lot.

Speaker #2: So we still see there's more growth potential. So that business, as you start to see these volumes of one of these product lines start to move, really drops to the bottom line in good contribution.

Speaker #2: And the next question comes from David Silver with Freedom Capital Markets. Please go ahead.

Speaker #1: Yeah, hi. Good morning. Thank

Speaker #6: you. I'll apologize in advance. I had a little trouble joining the call at the beginning. So apologies if I make you repeat yourself. I wanted to drill down, I guess, with D.J.

Speaker #3: Yeah, hi. Good morning. Thank you. I'll ll apologize in advance. I had a little trouble joining the call at the beginning. So apologies if I make you repeat yourself.

Speaker #2: And that's what you're seeing. We think that's stable. Now, the other side of the business, still good growth, right? We've got, as Erik mentioned, that lag that we're going to move ourselves through.

Speaker #2: And those costs parked there. There's a lot of transportation, energy. We'll get that pushed through. But that growth is there. And we start to leverage that growth to the bottom line.

Speaker #6: on a couple of the expansion projects that are underway. And in particular, I guess there was a series of three PCC satellites that were due to turn on this year.

Speaker #3: I wanted to drill down, I guess, with DJ on a couple of the expansion projects that are underway. And in particular, I guess there was a series of three PCC satellites that were due to turn on this year.

Speaker #2: I think that's a yeah, we got some work to do on the household and personal care business and costs. But once we get that work done, I think we got both sides of the business kind of moving along.

Speaker #2: That's where we see that margin improvement. With the 17 on one side and moving the other side up to 14, you start to start to see that 15, 16 percent as we push through.

Speaker #6: Just wondering where we are on that and what the contribution might have been in the second quarter. And then just on the edible oil, you did explain the timing.

Speaker #3: Just wondering where we are on that and what the contribution might have been in the second quarter. And then just on the edible oil, you did explain the timing.

Speaker #2: Now, a lot of things have to line up. We've got some work to do. But I think we're setting up for that margin improvement.

Speaker #2: It's unfortunate we have this delay still. But we'll move through it. And we'll deliver that profitability.

Speaker #6: It's complete. The order book is full. But revenues will probably start in the third quarter. With a full order book, and the project complete, I'm just wondering about next steps there.

Speaker #4: All right. Excellent. Thanks a lot.

Speaker #3: It's complete. The order book is full. But revenues will probably start in the third quarter. With a full order book, and the project complete, I'm just wondering about next steps there.

Speaker #3: And the next question comes from David Silver with Freedom Capital Markets. Please go ahead.

Speaker #2: Yeah, hi. Good morning. Thank you. I'll apologize in advance. I had a little trouble joining the call at the beginning. So apologies if I make you repeat yourself.

Speaker #6: What might be the cadence for the next incremental expansion, assuming the SAF market continues to progress, which I think is a pretty sure thing?

Speaker #3: What might be the cadence for the next incremental expansion, assuming the SAF market continues to progress, which I think is a pretty sure thing?

Speaker #2: I wanted to drill down, I guess, with DJ on a couple of the expansion projects that are underway. And in particular, I guess there was a series of three PCC satellites that were due to turn on this year.

Speaker #6: Myself, personally. And then is the expansion program one where the incremental additions are more of a modular nature? In other words, they can be added relatively quickly?

Speaker #3: Myself, personally. And then is the expansion program one where the incremental additions are more of a modular nature? In other words, they can be added relatively quickly?

Speaker #6: Or is this more of a discrete project with its own separate, I don't know, offsites or supporting utilities? Just what might be the cadence that we should think about for growth in your capacity on the edible oil side?

Speaker #2: Just wondering where we are on that and what the contribution might have been in the second quarter. And then just on the edible oil, you did explain the timing.

Speaker #3: Or is this more of a discrete project with its own separate, I don't know, offsites or supporting utilities? Just what might be the cadence that we should think about for growth in your capacity on the edible oil side?

Speaker #6: Edible oil purification side. Thank you. So David, I'm going to try and unpack that a little bit. Let me deal with the first part of the question.

Speaker #2: It's complete. The order book is full. But revenues will probably start in the third quarter. With a full order book, and the project complete, I'm just wondering about What might be the cadence for the next incremental expansion, assuming the SAF market continues to progress, which I think is a pretty sure thing?

Speaker #3: Edible oil purification side. Thank you.

Speaker #1: So David, I'm going to try and unpack that a little bit. Let me deal with the first part of the question. On the PCC, I would say, as Eric had indicated and Doug had indicated, all three of those are up, running, distributed in the second quarter.

Speaker #6: On the PCC, I would say, as Eric had indicated and Doug had indicated, all three of those are up, running, distributed in the second quarter.

Speaker #6: And they look like they're going to be good business for us moving forward. There's another one that we have mentioned in the past that comes online in '27.

Speaker #1: And they look like they're going to be good business for us moving forward. There's another one that we have mentioned in the past that comes online in '27.

Speaker #6: So we're building another satellite right now. It's a pretty substantial satellite that supports packaging growth in Asia. And so that's so we had the three that came up running in the second quarter.

Speaker #2: Myself personally. And then is the expansion program one where the incremental additions are more of a modular nature? In other words, they can be added relatively quickly?

Speaker #1: So we're building another satellite right now. It's a pretty substantial satellite that supports packaging growth in Asia. And so that's so we had the three that came up running in the second quarter.

Speaker #6: A contributing in the second quarter. Another one still to come. That'll be early in the '27. So paper is looking solid. And then I would say that the nature of that pipeline still remains healthy.

Speaker #1: A contributing in the second quarter. Another one still to come. That'll be early in the '27. So paper is looking solid. And then I would say that the nature of that pipeline still remains healthy.

Speaker #2: Or is this more of a discrete project with its own separate, I don't know, offsites or supporting utilities? Just what might be the cadence that we should think about for growth in your capacity on the edible oil side?

Speaker #6: 20-plus projects in the pipeline. A blend of packaging and new yield and PCC and the new products we've introduced. So we feel pretty good on that side of things.

Speaker #1: 20-plus projects in the pipeline. A blend of packaging and new yield and PCC and the new products we've introduced. So we feel pretty good on that side of things.

Speaker #2: Edible oil purification side. Thank you.

Speaker #6: Shifting gears now to the bleaching earth question. So we just put in that expansion. It's reasonable for you to think of that one as a modular expansion, pretty efficient.

Speaker #4: So David, I'm going to try and unpack that a little bit. Let me deal with the first part of the question. On the PCC, I would say, as Erik had indicated and Doug had indicated, all three of those are up, running, contributing in the second quarter.

Speaker #1: Shifting gears now to the bleaching earth question. So we just put in that expansion. It's reasonable for you to think of that one as a modular expansion, pretty efficient.

Speaker #6: And getting it up and running and designing the product specifically for these customers. Getting them qualified with the customer and so we're up and running.

Speaker #4: And they look like they're going to be good business for us moving forward. There's another one that we have mentioned in the past that comes online in '27.

Speaker #1: And getting it up and running and designing the product specifically for these customers. Getting them qualified with the customer. And so we're up and running.

Speaker #6: And that'll be you'll start seeing that pretty much running full out in this third quarter. We are looking further at expansions. The next one probably is a bigger magnitude one.

Speaker #4: So we're building another satellite right now. It's a pretty substantial satellite that supports packaging growth in Asia. And so that's so we had the three that came up running in the second quarter, contributing in the second quarter.

Speaker #1: And that'll be you'll start seeing that pretty much running full out in this third quarter. We are looking further at expansions. The next one probably is a bigger magnitude one.

Speaker #6: But we still got to line up some volumes on that. I would tell you, though, that from what we've been able to do with both the quality of the ore and the reserves that we've got, especially in Turkey, plus the scientists that we've got working at Hoffman Estates, we feel very good about that product line and what it's able to contribute differently in the market, especially in sustainable aviation fuel.

Speaker #4: Another one still to come. That'll be early in the '27. So paper is looking solid. And then I would say that the nature of that pipeline still remains healthy.

Speaker #1: But we still got to line up some volumes on that. I would tell you, though, that from what we've been able to do with both the quality of the ore and the reserves that we've got, especially in Turkey, plus the scientists that we've got working at Hoffman Estates, we feel very good about that product line and what it's able to contribute differently in the market, especially in sustainable aviation fuel.

Speaker #4: 20-plus projects in the pipeline. A blend of packaging and new yield and PCC and the new products we've introduced. So we feel pretty good on that side of things.

Speaker #6: So we're happy with this last expansion. We're happy with the qualifications that we've been able to do and that the pace in which we've been able to bring them in.

Speaker #1: So we're happy with this last expansion. We're happy with the qualifications that we've been able to do and that the pace in which we've been able to bring them in.

Speaker #4: Shifting gears now to the bleaching earth question. So we just put in that expansion. It's reasonable for you to think of that one as a modular expansion, pretty efficient.

Speaker #6: And as we'll get ready to expand further, but nothing to announce on that just yet. Okay. Great. And I hope you'll indulge me here.

Speaker #1: And as we'll get ready to expand further, but nothing to announce on that just yet.

Speaker #4: And getting it up and running and designing the product specifically for these customers. Getting them qualified with the customer. And so we're up and running.

Speaker #6: But I wanted to go back to the 290 million dollar charge that was taken. And I just want to make sure I have things lined up.

Speaker #3: Okay. Great. And I hope you'll indulge me here. But I wanted to go back to the 290 million dollar charge that was taken. And I just want to make sure I have things lined up.

Speaker #4: And that'll be you'll start seeing that pretty much running full out in this third quarter. We are looking further at expansions. The next one probably is a bigger magnitude one.

Speaker #6: But back in so there's a total funding of the 524G trust of 450. And I believe in first quarter of 2025, you allocated, I believe, 185 of your total charge then, for the trust.

Speaker #3: But back in so there's a total funding of the 524G trust of 450. And I believe in first quarter of 2025, you allocated, I believe, 185 of your total charge then, for the trust.

Speaker #4: But we still got to line up some volumes on that. I would tell you, though, that from what we've been able to do with both the quality of the ore and the reserves that we've got, especially in Turkey, plus the scientists that we've got working at Hoffman Estates, we feel very good about that product line and what it's able to contribute differently in the market, especially in sustainable aviation fuel.

Speaker #6: Is it correct to say that of the 290, I guess that 265 were the balance to get to 450? So 265 of the 290 goes to the trust.

Speaker #3: Is it correct to say that of the 290, I guess that 265 were the balance to get to 450? So 265 of the 290 goes to the trust.

Speaker #4: So we're happy with this last expansion. We're happy with the qualifications that we've been able to do and that the pace in which we've been able to bring them in.

Speaker #6: And the balance of 25 million or so is for estimated other costs. Is that correct? Or am I mistaken? So David, this is Eric.

Speaker #3: And the balance of 25 million or so is for estimated other costs. Is that correct? Or am I mistaken?

Speaker #4: And as we'll get ready to expand further, but nothing to announce on that just yet.

Speaker #6: So you're close. There's a portion in there that's to fund the ongoing process. And so right now, there's about 450 in terms of potential 529G funding.

Speaker #1: Yeah. Dave, this is Eric. So you're close. There's a portion in there that's to fund the ongoing process. And so right now, there's about 450 in terms of potential 529G funding.

Speaker #2: Okay. Great. And I hope you'll indulge me here. But I wanted to go back to the 290 million dollar charge that was taken. And I just want to make sure I have things lined up.

Speaker #6: And about 35 million in terms of ongoing process funding. And that's made up of the charge we just took and the one from 2025.

Speaker #1: And about 35 million in terms of ongoing process funding. And that's made up of the charge we just took and the one from 2025.

Speaker #2: But back in so there's a total funding of the 524G trust of 450. And I believe in first quarter of 2025, you allocated, I believe, 185 of your total charge then, for the trust.

Speaker #6: Okay. Great. And then I don't know if you can answer this or not, but so you have set up a trust that you believe is acceptable to settle all the ultimate claims.

Speaker #3: Okay. Great. And then I don't know if you can answer this or not, but so you have set up a trust that you believe is acceptable to settle all the ultimate claims.

Speaker #2: Is it correct to say that of the 290, I guess, that 265 were the balance to get to 450? So 265 of the 290 goes to the trust.

Speaker #6: However, the bankruptcy judges you pointed out as abated, his process in favor of letting the district court work on the issue of causation. Doug, I guess this is how determined or how do you feel about letting that district court process run its course versus maybe pursuing something sooner?

Speaker #3: However, the bankruptcy judge, as you pointed out, has abated his process in favor of letting the district court work on the issue of causation.

Speaker #2: And the balance of 25 million or so is for estimated other costs. Is that correct? Or am I mistaken?

Speaker #4: Yeah. Dave, this is Erik. So you're close. There's a portion in there that's to fund the ongoing process. And so right now, there's about 450 in terms of potential 529G funding.

Speaker #3: Doug, I guess this is how determined or how do you feel about letting that district court process run its course versus maybe pursuing something sooner?

Speaker #6: But that may ultimately prove more expensive for your company. How do you kind of weigh the pros and cons of settling sooner versus letting the district court process run its course?

Speaker #4: And about 35 million in terms of ongoing process funding. And that's made up of the charge we just took and the one from 2025.

Speaker #3: But that may ultimately prove to be a little more expensive for your company. How do you kind of weigh the pros and cons of settling sooner versus letting the district court process run its course?

Speaker #2: Okay. Great. And then I don't know if you can answer this or not, but so you have set up a trust that you believe is acceptable to settle all the ultimate claims.

Speaker #1: Yeah. David, I'm not going to answer that question. I don't we're right in the midst of the beginning of litigation. And so I don't want to speculate on outcomes in district courts or the ramifications of that right now.

Speaker #1: I think where we are is we've filed a plan that we feel is fair and provides finality to the company. For the company. We've always maintained that BMI's Barrett's minerals BMI oil coast talc has been safe.

Speaker #2: However, the bankruptcy judge, as you pointed out, has abated his process in favor of letting the district court work on the issue of causation.

Speaker #1: And so the district court taking on that positive because we've always maintained this to be the case. But we're right in the beginning of that.

Speaker #2: Doug, I guess this is how determined or how do you feel about letting that district court process run its course versus maybe pursuing something sooner?

Speaker #1: And so the district court taking on that issue we see that as a positive because we've always maintained this to be the case. But we're right in the beginning of that.

Speaker #1: And we're going to be going through the process of scheduling and seeing how that goes. And I just don't want to speculate on where we'll land at the moment right now, given where we are.

Speaker #2: But that may ultimately prove to be a little more expensive for your company. How do you kind of weigh the pros and cons of settling sooner versus letting the district court process run its course?

Speaker #6: Fair enough. I appreciate that. And then last thing for me. I did just want to get a PFAS update. I believe last quarter, the plan was to have 10 commercial projects start up through 2026.

Speaker #3: Fair enough. I appreciate that. And then last thing for me. I did just want to get a PFAS update. I believe last quarter, the plan was to have 10 commercial projects start up through 2026.

Speaker #4: Yeah. David, I'm not going to answer that question. I don't we're right in the midst of the beginning of litigation. And so I don't want to speculate on outcomes in district courts or the ramifications of that right now.

Speaker #6: And then I am curious, but I did watch the EPA panel discussion where your company was one of just a handful featured. And I'm just wondering if that presentation and that opportunity for interested parties has resulted in an acceleration of trial and beta testing.

Speaker #3: And then I am curious, but I did watch the EPA panel discussion where your company was one of just a handful featured. And I'm just wondering if that presentation and that opportunity for interested parties has resulted in an acceleration of trial and beta testing.

Speaker #4: I think where we are is we've filed a plan that we feel is fair and provides finality to the company. For the company. We've always maintained that BMI's Barrett's minerals BMI oil coast talc has been safe.

Speaker #4: And so the district court taking on that issue we see that as a positive because we've always maintained this to be the case. But we're right in the beginning of that.

Speaker #6: So just an update on progress with commercializing PFAS and then your take on what has happened since the your participation in the EPA panel.

Speaker #3: So just an update on progress with commercializing PFAS and then your take on what has happened since the your participation in the EPA panel.

Speaker #4: And we're going to be going through the process of scheduling and seeing how that goes. And I just don't want to speculate on where we'll land at the moment right now, given where we are.

Speaker #6: Thanks.

Speaker #5: Hi, David. It's Brett. Let me just give you a quick update on where we stand with floor absorb and hopefully I can answer your questions.

Speaker #3: Thanks.

Speaker #2: Fair enough. I appreciate that. And then last thing for me. I did just want to get a PFAS update. I believe last quarter, the plan was to have 10 commercial projects start up through 2026.

Speaker #2: Hi, David. It's Brett. Let me just give you a quick update on where we stand with floor absorb and hopefully, I can answer your questions.

Speaker #5: Floor absorb really, it continues to gain traction. And we do have the 10 full-scale municipal drinking water plants up and running. The good news is we've now have 18 municipal systems specified for upcoming installations.

Speaker #2: Floor absorb, really, it continues to gain traction. And we do have the 10 full-scale municipal drinking water plants up and running. The good news is we've now have 18 municipal systems specified for upcoming installations.

Speaker #2: And then I am curious, but I did watch the EPA panel discussion where your company was one of just a handful featured. And I'm just wondering if that presentation and that opportunity for interested parties has resulted in an acceleration of trial and beta testing.

Speaker #5: Most of those will start they're all most of them are under construction. Several of them will start in 2026. And others will start in 2027.

Speaker #2: Most of those will start they're all most of them are under construction. Several of them will start in 2026. And others will start in 2027.

Speaker #5: So that we're gaining traction. We also expect to see more of the pilot projects for the small groundwater treatment plants move into full scale.

Speaker #2: So that we're gaining traction. We also expect to see more of the pilot projects for the small groundwater treatment plants move into full scale.

Speaker #5: So a lot of that will start to move. Over the next several months. We do, as you know, we also use the floor absorb in in-situ remediation.

Speaker #2: So just an update on progress with commercializing PFAS and then your take on what has happened since the your participation in the EPA panel.

Speaker #2: So a lot of that will start to move. Over the next several months. We do, as you know, we also use the floor absorb in in-situ remediation.

Speaker #2: Thanks.

Speaker #3: Hi, David. It's Brett. Let me just give you a quick update on where we stand with floor absorb and hopefully, I can answer your questions.

Speaker #5: And we're working with the Department of War and other aviation-related fields based on the success we've seen with the Department of War. We're expanding that project.

Speaker #2: And we're working with the Department of War and other aviation-related fields based on the success we've seen with the Department of War. We're expanding that project.

Speaker #3: Floor absorb, really, it continues to gain traction. And we do have the 10 full-scale municipal drinking water plants up and running. The good news is we've now have 18 municipal systems specified for upcoming installations.

Speaker #5: And we have actually we have two big projects that will happen in the third quarter. And both are airports and one is a military site.

Speaker #2: And we have actually, we have two big projects that will happen in the third quarter. And both are airports and one is a military site.

Speaker #5: So that is working. And it's really based on the absorption technology of the floor absorb. So it's working very well. The other update I'll give you is we also continue our discussions with the US EPA Office of Water and Office of Land Emergency Management.

Speaker #3: Most of those will start they're all most of them are under construction. Several of them will start in '26. And others will start in '27.

Speaker #2: So that is working. And it's really based on the absorption technology of the floor absorb. So it's working very well. The other update I'll give you is we also continue our discussions with the US EPA Office of Water and Office of Land Emergency Management.

Speaker #3: So that we're gaining traction. We also expect to see more of the pilot projects for the small groundwater treatment plants move into full will start to move.

Speaker #5: Both are really committed to the PFAS remediation and disposal. Research. So we're working with them to wrap this up. And the CRADA agreement. And I think once that is finalized, then the research will expand much more rapidly.

Speaker #2: Both are really committed to the PFAS remediation and disposal. Research. So we're working with them to wrap this up. And the CRADA agreement. And I think once that is finalized, then the research will expand much more rapidly.

Speaker #3: Over the next several months. We do, as you know, we also use the floor absorb in in-situ remediation. And we're working with the Department of War and other aviation-related fields based on the success we've seen with the Department of War.

Speaker #5: But it's things are moving well. And we expect to see additional municipalities taking on the floor absorb.

Speaker #2: But it's things are moving well. And we expect to see additional municipalities taking on the floor absorb.

Speaker #3: We're expanding that project. And we have actually, we have two big projects that will happen in the third quarter. And both are airports and one is a military site.

Speaker #6: Okay. Great. I appreciate all the color. Thank you.

Speaker #1: Thanks, David.

Speaker #3: Okay. Great. I appreciate all the color. Thank you.

Speaker #4: This concludes our question and answer session. I would like to turn the conference back over to you, Doug Dietrich. For any closing remarks.

Speaker #1: Thanks, David.

Speaker #3: So that is working. And it's really based on the absorption technology of the floor absorb. So it's working very well. The other update I'll give you is we also continue our discussions with the US EPA Office of Water and Office of Land Emergency Management.

Speaker #4: This concludes our question and answer session. I would like to turn the conference back over to you, Doug Dietrich. For any closing remarks.

Speaker #1: Thank you, David. Appreciate it. I appreciate everyone joining the call today. If you have any follow-up questions, we'd be happy to answer them. After the call.

Speaker #1: But we'll talk to you in about three months. Thank you.

Speaker #3: Both are really committed to the PFAS remediation and disposal. Research. So we're working with them to wrap this up. And the CRADA agreement. And I think once that is finalized, then the research will expand much more rapidly.

Speaker #3: But it's things are moving well. And we expect to see additional municipalities taking on the floor absorb.

Speaker #2: Okay. Great. I appreciate all the color. Thank you.

Speaker #4: Thanks, David.

Speaker #1: This concludes our question and answer session. I would like to turn the conference back over to you, Doug Dietrich. For any closing remarks.

Speaker #4: Thank you, David. Appreciate it. I appreciate everyone joining the call today. If you have any follow-up questions, we'd be happy to answer them. After the call.

Speaker #4: But we'll talk to you in about three months. Thank you.

Q2 2026 Minerals Technologies Inc Earnings Call

Request DemoDemo

Minerals Technologies

Earnings