Calumet, Inc

Good day and welcome to the Calumet Specialty Products Partners LP First Quarter 2022 Results Conference Call. All participants will be in a 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 Brad McMurray in Investor Relations. Please go ahead.

Good morning. Thank you for joining us today for our first quarter 2022 earnings call. With me on today's call are Todd Borgman, CEO, Vince DiNargo, CFO, Bruce Fleming, EVP of Montana Renewables and Corporate Development, Scott Obermeyer, EVP of Specialty Products and Solutions, Mark Lon, EVP of Performance Brands, and Steve Maher, Executive Chairman. Before we proceed, I'll remind everyone that during this call, we may provide various forward-looking statements. Please refer to the partnerships press release that was issued this morning, as well as our latest filings with the SEC for a list of factors that may affect our actual results and cause them to differ from our expectations. You may now download the slides that accompany the remarks made on today's conference call, which can be accessed in the investor relations section of our website at www.calumetspecialty.com. Also, a webcast replay of this call will be available on our site within a few hours. With that, I'll pass the call to Todd.

Thanks, Brad, and good morning. Let's start on slide three. The first quarter was a busy one here at Calumet, and we're progressing our business on all fronts. First, let me start on the people front. I'm pleased to introduce Vince, our new CFO, who you'll hear from shortly. Vince has been with us for a couple years now as our Chief Accounting Officer. And under his leadership, we were able to successfully resegment the business early last year and remediate a longstanding material weakness this past quarter. We've also seen broader internal people moves throughout our system. It's great to have the depth and breadth of talent we have in the organization. And thank you to Steve, Vince, and the entire team for providing for a smooth transition over the past couple months. It's also been wonderful to see our people plan play out at MRL. Talent's a critical area. and we've been able to recruit a first-class team as people recognize just what a unique business model we are developing. Last quarter, we mentioned how committed we are to our strategy, and I want to reinforce that nothing has changed. We're focused on creating two independent leading businesses. One is a specialty product business built on our Calumet legacy, and the other is a unique, competitively advantaged renewable diesel business. Both are built on lasting competitive advantage, will carry appropriate leverage, have simple capital structures, and ultimately have access to competitive growth capital. We believe our renewable diesel business is built on the permanent competitive advantages of location and cost leadership. Our specialty products business is one that's built on a world-class customer base, exceptional brands, and a nearly irreplicable asset base. While we think of these businesses as separate, they're strategically linked and that we expect to equitize a portion of Montana renewables to expedite the delevering of Calumet's specialty business. We started 2022 by refinancing our 23 notes, which cleared our short-term bond maturities and allowed us to focus on this remaining recapitalization. I'll provide an update on that shortly. Unfortunately, it's hard to talk about the first quarter without somberly mentioning the humanitarian disaster in Ukraine. The event clearly exacerbated the already stressed commodity markets which were short on the back of their recovery from COVID and the global supply chain crisis. Calumet has very little direct business in Ukraine or Russia, but the impact of the attacks on energy pricing were felt around the globe. Crude oil ran from a December average of $71 a barrel to a high of over $123 in the first quarter, which was the largest quarterly dollar increase in history. In the face of these challenges, Calumet posted a first quarter adjusted EBITDA of $23.3 million and ended the quarter with a multi-year high of $412 million of liquidity. The rising cost environment most impacted our performance brands and asphalt businesses, where price lag is most prominent. Other product lines, and especially products and solutions segment, were certainly impacted too, but we're proud to post specialty material margins north of $50 a barrel in such a challenging environment. I'd be remiss to not highlight once again the competitive advantage that our specialty business has to effectively manage rapidly changing market regimes. This is an incredibly flexible business, and we typically process crude oil to produce our own specialty feedstocks cost-effectively, thereby also ensuring secure supply and quality control. Of course, we also make fuels during this process, and we have significant optimization flexibility and control over the degree to which we process crude versus intermediate. When fuels margins were nothing during COVID, we tweaked our operation and feed mix to minimize fuels and focus on specialty yields, and that generated cash. In the current environment, we're in max fuel mode, and we limit the amount of third-party intermediates we process. Calumet's a specialty products business, and that will always be our core focus, but our flexibility to shift feedstocks and integrate internally to match market conditions is a core strength and differentiator. As we do this, our assets are operating at high utilization with good reliability, and in the first quarter, our facilities recorded the largest production volume we've seen in over three years. We'll wrap with an update on MRL in a bit, but first I'll turn the call over to Vince to take you through our first quarter results. Vince?