Ascent Industries Co.

Good afternoon and welcome to Ascent Industries Q1 2025 earnings call. Today's speaker are CEO Brian Kitchen, CFO Ryan Kowalowskis, and the company's on-site investor relations advisor, Ralph Esper. We'll begin with prepared remarks followed by Q&A. Before we go further, I would like to turn the call over to Ralph Esper as he reads the company's safe harbor statement within the Meaning of Private Security Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Ralph?

Thanks, Marvin. Before we continue, I would like to remind all participants that the discussion today may contain certain forward-looking statements pursuant to the safe harbor provisions of the federal security laws. These statements are based on information currently available to us, and are subject to various risks and uncertainties that could cause actual results to differ materially. Ascent advises all of those listening to this call to review the latest 10Q and 10K posted on its website for a summary of these risks and uncertainties. Ascent does not undertake the responsibility to update any forward-looking statements. Further, the discussion today may include non-GAAP measures. In accordance with Regulation G, the company has reconciled these amounts back to closest gap-based measurement. The reconciliations can be found in the earnings release issued earlier today and posted on the investor section of the company's website at ascenco.com. Please note that this call is available for replay via webcast link that is also posted on the investor section of the company's website. Now, I'll turn it over to our CEO, Brian Caden, to walk you through the results and what's driving continued momentum.

Brian? Thanks, Ralph. Let's start with the headline. Despite ongoing soft market conditions, we delivered another sharp quarter of operating improvement. We controlled what we could, we stayed disciplined, and we drove measurable improvements through aggressive self-help. Net sales from continuing operations totaled $24.7 million, down from $28 million in Q1 of 2024, reflecting broader market softness. But that's where the similarities end. Adjusted EBITDA from continuing operations meaningfully improved, swinging from a loss of $2.7 million in the prior year to a positive $843,000 this quarter, a $3.5 million turnaround. The structural changes that we implemented across the organization over the last year are working as evidenced in the results that we are discussing today. It's a clear reflection of a more profitable book of business, enhanced operating discipline, and better sourcing. Let's dive into the details with an update on the tubular segment. On April 4th, we closed on the sale of substantially all of the assets of Bristol Metals to Taichen International for $45 million, subject to certain closing adjustments. With the Bristol divestiture, ASCI remains our final tubular asset in continuing operations, and it performed well in Q1. In Q1, ASCI delivered $6.9 million in revenue, Down slightly year-over-year, however, gross margins jumped from 12.3% to 24.8%. And adjusted events arose nearly five times to 1.3 million. The story here is disciplined execution. Tight cost control, sharper pricing, and operational efficiency. Even in a tough demand environment, we're proving that value can be created through focus and fundamentals. Let's talk about specialty chemicals. First, the macro. We continue to monitor the tariff environment. Over the last year, our strategic sourcing team has done an exceptional job improving our cost structure and building resilience in our supply chain. Because of these efforts, approximately 95% of our revenue is supported by domestically sourced raw materials. That's by design, and it's a major competitive advantage. As tariffs loom, customers are looking for reliable domestic partners, and we're stepping in to fill that need. In fact, we are currently working with customers to onshore essential ingredient supply chains from Asia, Europe, and Canada. Asim is proud to play an active role in domestic manufacturing renaissance in specialty chemicals, and we believe that tailwind is just beginning. Dividing to our financial performance in Q1, our specialty chemical segment continues to deliver in a difficult demand environment. While revenue declined year over year to $17.8 million, Gross profit increased by $2.1 million, rising from $1.6 in Q1 of 2024 to $3.7 million in Q1 of 2025, a 131% improvement, with gross margin expanding from 7.6% to 21%. Adjusted EBITDA improved by $2.3 million, swinging from a loss of $0.3 million in the prior year to a positive $2 million this quarter. This strong improvement reflects the underlying muscle of our sourcing, manufacturing, and commercial efforts beginning to strike as one. The story here is about quality over quantity. We're deliberately shifting our mix to higher margin opportunities, tightening our commercial focus, and aligning our resources around opportunities where we have the right to win. And it's working. Throughout 2024, we invested in our ability to be a more capable, more responsive, and more integrated partner to our customers we've aligned technical sales applications development operations and supply chain to deliver a more holistic customer experience that includes braided offerings and oil and gas in hini stronger quoting agility and measured improvements in customer response time and solution delivery it's early but the model is showing traction and we're building from here in q1 our commercial and technical sales team secured an annualized $7.5 million of net new business with EBITDA margins in excess of 20%. Importantly, this growth was well dispersed across key end markets, including oil and gas, case, lubricants, textiles, and other industrial applications. What's even more encouraging is the balance of that growth. 25% came from net new customer relationships. We are winning new customers. 75% was an expansion within our existing customer base a clear sign that our value proposition is resonating and our service execution is driving an increased share of wallet. We're not just selling a product. We're solving problems, creating formulations, and delivering it with speed, reliability, and compliance. We're customizing products in quantities both large and small in ways that traditional manufacturers simply won't, and delivering that customization with the level of flexibility and technical depth that classical distribution models can't match. It's a hybrid of custom manufacturing and high service distribution, and it's working. This is what sets us apart. It's not just what we make, it's how we make it work for each customer. Momentum is building not only in our operational performance, but also in market engagement. Average DLA trading volume jumped to roughly 63,000 shares in Q1 of 2025, 160% lift versus Q1 of 2024. That surge is proof that the market is beginning to tune into our story. In March, Ryan and I joined the Planet Microcap podcast to unpack our story and our transformation roadmap. The reaction was immediate, new conversations, fresh inbound interest, and a broader audience tracking Ascent's progress. Before I pass it off to Ryan, I want to thank our entire team at Ascent who has continued to demonstrate incredible grit, hustle, and the drive to win. I would also like to thank our investors for the confidence that they have placed in both Ryan and I and the team that we've assembled. With that, I'll turn it over to Ryan to provide a bit more context behind our financial performance. Ryan?