Innospec Inc.

Good day and thank you for standing by. Welcome to the InnoSpecs second quarter 2023 earnings release and conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you need to press star 11 on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, David Jones. Please go ahead.

Thank you. Welcome to NSFAC's second quarter earnings call. This is David Jones, and I'm NSFAC's general counsel and chief compliance officer. The earnings released for the quarter in this presentation are posted on the company's website. During this call, we will make forward-looking statements, which are predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risk and uncertainties It can cause actual results to differ materially from anticipated results implied by such forward-looking statements. The risk and uncertainties are detailed in InnoSpec TID-K, TIN-Qs, and other filings with the SEC. Please see the SEC site and InnoSpec site for these and related documents. In our discussions today, we've also included non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure is contained in the earnings release. The non-GAAP financial measure should not be considered as a substitute for or superior to those prepared in accordance with GAAP. They are included as additional items to aid investor understanding of the company's performance in addition to the impact that these items and events had on financial results. With me today from Innispec are Patrick Williams, President and Chief Executive Officer, and Ian Clementson, Executive Vice President and Chief Financial Officer. And with that, I turn it over to you, Patrick.

Thank you, David, and welcome everyone to Innispec's second quarter 2023 conference call. Overall, this was another good quarter for Innespec. Excellent results in all field services continue to offset weaker activity in performance chemicals. In field specialties, we have taken a further charge to exit our trading relationship in Brazil, where inventory was misappropriated in the first quarter. Excluding this $8 million charge, which reduced our EPS by 21 cents, our sales and EBITDA grew and gross margins improved over the prior year. As expected, Performance Chemicals was again impacted by customer destocking and high-cost inventory, which drove volumes, margins, and mixed lower in the quarter. While these headwinds will likely carry into the second half of the year, we expect our new personal care contracts to drive sequential sales, operating income, and margin improvements. Our priorities remain focused on executing sequential sales and margin improvement in order to return to our operating income run rate to 2022 levels. In field specialties, continued price action and slowing inflation partially offset lower volumes in the quarter. As noted in our earnings release, adjusting for the $8 million Brazil charge, gross margins were unchanged versus the same quarter last year, and remain in our target range of 32% to 35%. We do not expect any further charges related to Brazil, and we expect gross margins to remain in this range for the balance of 2023. In terms of operating margins, our target continues to be 19% to 21%. We will remain focused on growing sales while maintaining margins as a key focus and opportunity for the global fuels specialties teams. Oilfield services had another very impressive quarter. Continued strong activity in production chemicals combined with further sequential improvement in our other oilfield segments drove significant organic growth. Operating income was over six times the prior year, and growth margins expanded by 9.9 percentage points. In the quarter, we anticipate that sequential operating income will moderate on lower production chemicals activity but we remain on track for significant full-year growth in 2023. We continue to pursue top-line and margin expansion opportunities across all our oil field segments. Now I will turn the call over to Ian Clemson, who will review our financial results in more detail. Then I will return with some concluding comments. After that, Ian and I will take your questions. Ian?