Ascent Industries Co.

Hello and welcome to the Ascent Industries Co.' 's first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Kenny Herring, Vice President of Finance. Please go ahead.

Thank you, Haley, and good afternoon, everyone. 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 the closest GAAP-based measurement. The reconciliations can be found in the earnings press release issued earlier today and posted on the investor section of the company's website at ascentco.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. With that, I'll turn the call over to Brian.

Great. Thanks, Kenny, and good afternoon, everyone. We've got a lot to cover today, so let's jump in. In the first quarter, we saw a meaningful number of projects, one in 2025, convert into real measurable revenue. And that conversion is now showing up in the numbers. We delivered net sales of $19.4 million nearly double-digit growth versus the prior year, and 3.5% increase sequentially. In a market that remains flat to uneven, this is not a market-driven outcome. It reflects the conversion of prior wins into revenue and continued execution across the business. That momentum throughout the quarter and culminated into March, where we delivered our strongest monthly sales performance since March of 2023, a clear signal that what we are building is working and accelerating. During the quarter, we converted 31 projects across 27 customers with conversion rates improving to 22% and an average sales cycle of approximately three and a half months. These are not early stage opportunities. These are committed programs backed by purchasers received, shipped, and invoice in Q1. Already in production and generating revenue, representing approximately $7.6 million of annualized revenue. This is not pipeline becoming potential. This is pipeline becoming revenue. This is exactly how the model is designed to work. We build pipeline, we convert it with speed, and we scale it across the platform. And we've done this before. What's different now is the scale. And we're seeing that scale translate directly into revenue. From a mixed standpoint, 58% of our pipeline wins came from product sales and 42% from custom manufacturing, reflecting how the team is intentionally shaping new business towards our core technologies and highly customized performance-driven solutions. The broader pipeline continues to build. Our pipeline in Q1 increased 34% as compared to the end of 2025. So we're delivering growth today through committed programs already in execution, while simultaneously building a larger pipeline that positions us for continued acceleration. We're not lowering our standards to grow. We are scaling the right work. This is high-quality, margin-accretive growth that we expect to convert into earnings as it is optimized across our platform. As we translate that growth into earnings, it's important to understand how we are choosing to win and how that shows up in the margin profile in the quarter. In the first quarter, gross margin was down approximately 270 basis points versus the prior year. Let me be clear on what that is and what that is not. This is not structural change in the business, and it's not a breakdown in operating discipline. It does not reflect the underlying earnings power of the platform. Material margins improved by approximately 200 basis points versus our 2025 average, and 300 basis points sequentially. And we have not seen a structural change in our labor and overhead cost base. What you're seeing is a result of how we've chosen to use the flexibility of our multi-asset platform to move quickly, winning and onboarding new business across our platform, and then optimizing how that work is sourced, routed, and produced. And that sequencing matters. In many cases, we're not initially running that work in its optimal state. We're prioritizing speed to secure the business, leveraging available capacity and subscale production where necessary, knowing we will optimize from there. The result is exactly what you see in the numbers, under-optimized sourcing, subscale production runs, and variability in cost absorption, which shows up in gross margin in the near term. But importantly, the path forward is clear and already in motion. We've executed this playbook before, and we've proven a track record of improving sourcing, simplifying operations, and expanding margins over time. What you're seeing in this quarter, it's not a change in the model. It's the early stage of that same model being applied to a much larger and faster-growing base of business. We have visibility into where the inefficiencies exist and the flexibility to fix them across our asset base, and we're actively realigning the sourcing and scaling of production and matching the right work to the right assets across our network. That work's already underway, and we expect margin improvements to begin flowing through as we move throughout the year. As we look forward, we're focused on both winning volume and maximizing value, driving growth while improving how that growth translates to earnings. This is not a standalone initiative. It's embedded into how we operate. We are systematically optimizing how workflows through our network, aligning volumes and sourcing and production to drive better outcomes. At the same time, we're maintaining a relentless focus on cost control, driving accountability across sourcing and production and overhead, to ensure that as we scale, more of that growth converts to earnings. Because we've identified where these efficiencies exist and how to fix them, we have a very clear and actionable path to more than $3 to $5 million of incremental run rate gross profit improvement, with the majority of that expected to be realized by the fourth quarter of 2026. This isn't a target. It is the output of specific actions already underway. And importantly, this is where our confidence comes from. We're not relying on external conditions or assumptions. We're executing a set of actions that we have implemented successfully across the business over the past two years. We know how this plays out. This will require targeted time-bound investment in the near term. We expect returns in excess of 100% of invested capital, reflecting the fact that these investments are focused on optimizing existing volume and infrastructure, not building from scratch. When you improve how you run the business you already have, the incremental returns are significant. The outcome is straightforward. Stronger margins, more consistent performance, and more durable earnings profile. Alongside of that growth, we've maintained discipline on pricing. We've demonstrated the ability to pass through raw material inflation, particularly important given that approximately 65% of our inputs are petroleum-based. We acted early and with intent While not always the first to move, we were a disciplined, fast follower, acting quickly with the benefit of real market visibility. Our objective is clear, fully recover cost input pressure while ensuring continuity of supply. This is about reliability and trust and delivering in the moments that matter for our customers. And finally, subsequent to quarter end, we announced the acquisition of Midwest Graphic Sales and Sigma Coatings, This is not just another transaction. It's a clear signal of how we intend to build this business moving forward. We said we would be disciplined. We said we would focus on high-value, formulation-driven product lines. And we said that we would allocate capital where we have a clear right to win. And this transaction delivers on all three. Midwest is a specialty formulator built on highly customized, application-specific coding serving packaging, food service, and other consumer applications. Markets where performance, durability, and high switching costs. What makes this compelling is not just what the business is today, but what it becomes inside of a sense. On day one, we're acquiring a durable, embedded earnings stream supported by long-standing customer relationships and a strong margin profile. But importantly, we're unlocking a platform for acceleration. We expand our formulation capabilities, we deepen our position in key markets, and we gain access to new customer base. creating a clean cross-selling opportunity across more than 60 active customers. We are not buying capacity. We're buying demand that can be integrated into our capacity. Demand that's customized, embedded, and scalable across our asset base. As we integrate the business, we expect to transition production into our network over time. Importantly, the product mix aligns squarely within our existing capabilities, enabling us to insource this work with little to no incremental capital investment. This is a critical advantage of our platform. It allows us to capture the benefits of scale of sourcing and asset utilization without the need for meaningful new infrastructure, enhancing returns, and accelerating the realization of synergies. We will apply our proven playbook, one that's already delivered measurable improvements across our platform, giving us the confidence in our ability to enhance margins and accelerate growth in this business. We know how to do this. And importantly, this transaction is supported by the existing earnings quality with upside driven by execution, not required to justify the investment. We didn't buy potential. We bought a business that's already performing. So before I turn it over to Ryan, let me leave you with this. We are not waiting for the market to improve. We're executing. We're winning the right business. We're onboarding it with speed. and optimizing it with discipline. We're unlocking margin with clear line of sight to improvement that is well within our control. And at the same time, we're taking share. We're converting pipeline into real revenue and allocating capital to increase the quality and durability of our earnings. And we're doing that while maintaining a relentless focus on cost control, ensuring that as we scale, more of that growth translates into earnings. This is not a new model. we're scaling a system that we've already built, tested, and proven. And as we continue to scale and optimize and deploy capital with discipline, that will translate to stronger margins, more consistent performance, and a more durable earnings profile. And that's exactly what we're building. So with that, I'll turn it over to Ryan to walk through the financials and capital allocation in more detail. Ryan, over to you.