PureCycle Technologies, Inc.

Good day, and thank you for standing by. Welcome to the PureCycle Technologies third quarter 2025 corporate update conference call. At this time, all participants are in the 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw a 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 your speaker today, Eric DiNatale, Director of Investor Relations. Please go ahead, sir.

Thank you, Kyle. Welcome to PureCycle Technologies' third quarter 2025 corporate update conference call. I am Eric DiNatale, Director of Investor Relations for PureCycle. And joining me on the call today are Dustin Olson, our Chief Executive Officer, and Jamie Vasquez, our Chief Financial Officer. This evening, we will be highlighting our corporate developments for the third quarter of 2025. The presentation we'll be going through on this call can also be found on the Investor tab at our website at purecycle.com. Many of the statements made today will be forward-looking and are based on management's beliefs and assumptions and information currently available to management at this time. The statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those set forth in our safe harbor provisions and forward-looking statements that can be found at the end of our third quarter 2025 corporate update press release filed this afternoon, as well as in other reports on file with the SEC that provides further details about the risks related to our business. Additionally, please note that the company's actual results may differ materially from those anticipated, And except as required by law, we undertake no obligation to update any forward-looking statement. Our remarks today may also include preliminary non-GAAP estimates and are subject to risks and uncertainties, including, among other things, changes in connection with quarter-end and year-end adjustments. Any variation between PureCycle's actual results and the preliminary financial data set forth herein may be material. You're welcome to follow along with our slide deck, or joining us by phone, you can access it at any time at purecycle.com. We are excited to share updates from the previous quarter with you. With that, I will now turn it over to Dustin Olson, PureCycle's Chief Executive Officer.

Yeah, thanks, Eric. Thank you all for joining today's call. It's been another quarter of meaningful progress for PureCycle across all parts of the business. We're ramping operations. We're starting to ship to key customers in Q4, and we're excited about the growth ahead. I'd like to begin with the recent board changes that we announced. I'm very pleased to welcome our newest board member, Dr. Siri Jirapongpan. Dr. Siri has an impressive resume, and I believe he is going to be instrumental in PureCycle's future success. He is the former chairman of the board for IRPC, this is our partner in Thailand, and is currently serving as an independent director of Bangkok Bank, the largest bank in Thailand by assets. Dr series and incredibly bright individual he's got degrees from both caltech and MIT and chemical engineering and he has already made an impact when interacting with the board and the pure cycle team over the last few weeks. His polymer expertise is deep network in Southeast Asia and passion for pure cycle is bringing good energy and perspective to our decision making process. He will serve a key role in our debt financing activities, as well as support our technical and project teams. I'm very excited to have him join the team. I'd also like to personally thank Jeff Feeler for his service on the board over the last four years. He has been an instrumental part of getting PureCycle to where we are today. And from a personal perspective, he has taught me so much about how to think about our business, our activities, and how to lead this organization effectively. His departure coincides with Dan Gibson of Celebra Capital joining the board three months ago. Operational performance has shown steady improvement. Ramp-up activities underway at both Denver and Ironton further reinforcing our confidence in the business trajectory. Q3 was one of the highest quarter of production in the company's history. September was the highest month at 3.3 million pounds and was limited by fee. At the end of Q3, we successfully added a second shift to Denver during the quarter and plan to add a third in Q4. This will bring Denver's capacity to approximately 100 million pounds annually. The compounding expansion at Ironton continues to be on track, and we expect this to significantly reduce complexity of supply chain, improve our product offering, lower our cost, and meaningfully widen the market for available sales. On the commercial front, we continue to make a lot of progress. We scheduled to ship material in Q4 to P&G's converter for application production that are scheduled to the shelves in early 26. Additionally, we are working to finalize and ship for other P&G applications in Q1. We continue to add to the P&G funnel. We have made major strides on the operational front, and we believe we have alignment to meaningfully grow their volume in 2026. We've also made standout technical progress on numerous applications and are beginning to narrow the focus to high value applications. One of the biggest successes had been with white thermoform coffee lids. This led to progress with three of the top five quick service restaurant companies, or QSRs, and we expect to be shipping into stores for a top five QSR group in the fourth quarter and ramping in 2026. We've made tremendous strides on the commercial and general trajectory is very positive. We also have a much better sense of what our customer volume expectations and needs are for the next year. While the timing of any ramp is always hard to pinpoint with certainty, we do see initial volume indications between Emerald, Procter & Gamble, QSR Coffee Lids, and other converters in the range of about 40 to 50 million pounds annually. To put a blunt point on it, We see significant volume converting from just four to five projects, and we have another 75 to 100 projects churning through the hopper. Given our technical successes and the product line that we've developed, we feel confident about the long-term demand for Ironton. The sales funnel continues to be very strong and successful conversion of only some of these would be large enough to sell out Ironton many times over. The focus has shifted more towards converting these large applications into sales and less towards growing the funnel. Even in a challenging consumer spending and petrochemical environment, we continue to see robust demand and pricing in line with the unit economics we have previously laid out. Our growth plan continued to progress during the third quarter. The personnel in Thailand continues to grow and I'm excited about the team that is being put in place. The Antwerp permitting process continues on schedule and it is extremely good news that our proposal to the EU Innovation Fund or EIF was accepted. We expect to receive final grant approval of up to 40 million euros by the end of Q1. We continue to progress our Gen 2 purification design work through Augusta and beyond and expect this to be completed in the first half of 2026. Overall, this has been another quarter of extreme progress. Brand and shipments are moving. We're in the final stage of the commercial negotiation with a number of very large potential applications, and we are accelerating. We are doing something that has never been done before. The operations at Ironton and Denver continue to show progress during the quarter. Ironton produced 7.2 million pounds in this quarter and 3.3 million pounds in September, both new records. Denver continues to ramp as well, processing 9.4 million pounds of feedstock in Q3 and 4.4 million pounds in October. This was possible due to strong reliability performance and successfully adding a second shift in Denver. We have plans to add a third shift in the near future, and this will allow Ironton to continue to ramp to higher rates of production in coming quarters. We have developed a really strong relationship with our feedstock providers and are taking product from numerous locations. some of which are among the largest waste companies in the country. These companies value steady and rateable off-takes, and thus it makes sense to deliberately and systemically ramp Denver volumes in conjunction with Ironton production and sales, and speaks to our confidence in the commercial ramp in front of us. The amount of feed coming out of Denver was a constraint on Ironton production in the quarter, and with the additional shifts, this should be relieved going forward. The 100 million pound compounding expansion in Ironton that we announced last quarter is on track for mechanical completion in December. And in addition to that, we've already installed the coproduct two extruder onsite and started the operational commissioning. This compounding capacity that we're installing will allow for reduced complexity of supply chain, improved product offering, lowers our costs, and should widen the market for available sales. The coproduct two compounding expansion is already showing positive results. As you can see in the pictures on slide four, we can now take raw coproduct two coming out of Ironton and compound it into a sellable pellet that we have already sold into the market for 20 to 30 cents per pound. As we have ramped Denver, we have developed market outlets to sell the non-polypropylene coproducts. as we have found markets for approximately 20% to 30% of the bale that is non-PP, which results in approximately a net 20% reduction in feedstock costs. This is inclusive of the waste disposal costs for 18% of the bale that we are currently not selling. This is a really big deal, and I believe it's only the early innings of this coproduct optimization, and that it will be a big driver in our long-term low-cost story. Operations continues to make progress, and I feel increasingly confident about our ability to ramp production in coming quarters. To pace the commercial ramps, we expect to run the facility at 60% to 70% rates for the next three to six months, and then ramp to near nameplate in the second half of the year. Now turning to the commercial update. Some of the largest brands and companies in the world are becoming interested in our product. This is a tremendous endorsement for the quality of our product and the future of our company. It's important for our teams to stay focused on developing these high-quality demand applications like this. While there have been some delays with respect to the overall rollout, it's important to note that none of that was driven by technical capabilities of our product or the market's underlying demand for it. The delays relate to developing regulatory dynamics in states, which are largely behind us, as well as the natural delays that came from two mergers among the four largest global converters. Both mergers impacted the timing for a few contracts that we had initially expected to close, start moving in Q3. None of this has impacted the long-term progress or where things are going. Frankly, confidence in the end state of where Ironton is headed has only improved. I continue to see potential demand in the funnel, well exceeding our ability to supply it by multiple times over and a growing list of qualified products to take us there. If you combine the customers that we're beginning to ship to with the ones we already have high visibility to ship to in the near term, this represents approximately 40 to 50 million pounds annually at full ramp. I've spoken a lot over the past few quarters about how our resin continues to get qualified in numerous applications, especially those like film and fiber, that traditional mechanical recyclers cannot serve. I've also talked about the value of compounding business and how it is a core component of how we can take our purified product and transform it into exactly what the customers require. So with that in mind, I think it's valuable to present to the market our current product portfolio with which we're going to market. There's a lot of technical data in there, but I think it's important to note a few things. All of our products serving food grade end markets have FDA LNOs. Second, all of the material that we process has both green circle and APR certifications for post-consumer recycle content. Third, our general purpose material does not require compounding. However, we use compounding to augment the mechanical properties and to deliver a single pellet solution to customers. This product portfolio is a function of a lot of incredible work by our technical and R&D teams, as well as demand and pricing discovery by our sales team over the last year, and is a big part of why I'm so excited about the future of PureCycle. No other recycled PP producer can offer to the market what we can. Last quarter, we told the market that we had 17 applications that had successfully passed industrial trials and that were in later stages before commercialization. I want to give as detailed an update as possible on these. The key takeaways here is that we are progressing and converting the funnel. We completed negotiations with an unnamed consumer goods company during the quarter and expect to ship product for a thermal form application in Q4. Two large applications for yogurt cups had to undergo lengthy odor and taste tests, but that's now complete. We successfully made industrial adhesive tape for a top five manufacturer during the quarter. This is very similar packaging tape consumers use every day when preparing for a move or when shifting a gift to the postal service during the holiday time. They informed us that they do not, that they do not, that they, They informed us that they want to do additional testing on a Bruckner machine, which was planned for November. This would be our first commercialization of BOPP and believe this can be a double-digit annual volume opportunity for PureCycle. The only real disappointment in the funnel was the long brand adoption cycle we're seeing with fiber. We're fully technically qualified with numerous fiber producers, but this is a very fragmented market with literally thousands of small textile producers making decisions for apparel. It is taking longer to build out the new projects within customers during the challenged market conditions. The only application of the 17 that PCT dropped out of the funnel was a small consumer goods application. This is one of the smallest applications in our pipeline and PCT chose not to pursue due to the required internal resources to develop the project. What's really exciting to me is the number of new opportunities that have entered the later stages of the funnel. Many of them are with Fortune 100 brand owners, specifically across Thermoformed and BOPP. As I've mentioned these last few quarters, part of the reason that we have qualified so many applications is to prove out the market depth across different segments and in markets. Not surprisingly, FDA Flexible Film, or BOPP, is toward the top of the list. Thermoforming for QSRs, namely for coffee lids and cups, as well as for other food container opportunities, are also emerging as one of the best places for us to focus. The demand from just three of these large QSRs for coffee lids alone could be enough to sell out Ironton. We have a PO in hand to begin shipping for the first of these top five global QSRs in the fourth quarter, and are closely working with The top, with two top QSRs, they have both told us that they want to move forward but are waiting for a couple internal approvals before doing so. BOPP film continues to progress on schedule and trialing success with Bruckner has unlocked, has now unlocked trials with brand owners of multiple top five snack brands. These are huge volume opportunities and currently cannot be served by mechanically recycled products due to the technical challenges of producing BOPP. We've also had virgin resin producers reach out to us for BOPP supply. The success we've seen with the first adhesive tape trial has led to interest and scheduled trials for other brands. To be clear, both white thermoform and BOPP film technical developments are very complex, and this is a very undersupplied market. We've proven that we can make the grades, we've tested it, and it's working. And while they took additional time to complete the development and trials, the interest in the segment is strong and moving quickly, moving more quickly than other applications. We believe that the single-use nature of many of these applications is driving interest and quicker adoption by QSRs and snack brands. Additionally, due to the lack of true recycled demand for these applications, we believe many of these companies are currently using, currently buying ISCC Plus credits for roughly 70% to 80% per pound over Virgin to cover their regulatory requirements. We continue to make progress with Procter & Gamble during the quarter. They are one of the most technically demanding companies due to their intense focus on quality and brand image. And I'm very excited that we expect to be shipping product in the fourth quarter with these caps making it to the shelves in early 2026. The relationship with Procter & Gamble is transitioning to an operational relationship. We meet weekly, we are well aligned, and are both excited about this first application and the pipeline that's following. The partnership with Churchill continues to ramp with incremental end customers, and I'm very excited that we will be producing cups for the release of a very popular upcoming franchise film release. Additionally, there's a major sporting event taking place in the United States in 2026, and they have confirmed that they will be using our run-it-back cups during the entirety of that event. These are both nice volume additions, but even more importantly, I believe they will be great opportunities to showcase the PureCycle brand to a broader audience. It's also worth noting that one of the big four sports leagues has invited us to a private stadium operations conference where we'll have an opportunity to present our cups to all the franchise procurement teams at the same time. There's also a lot of positive news emerging from the regulatory front. Seven states covering about 20% of the US population have passed extended producer responsibility regulations, or EPR, for packaging over the past four years. On top of that, states like New Jersey have passed and are implementing laws that mandate recycled content. Further bills are also being introduced in numerous states across the political spectrum including places like Tennessee and North Carolina. These bills were passed for the last three to four years and are just now being implemented. I believe this will force many large brands who operate in interstate commerce to ship to almost every state to adopt our material and we expect will only accelerate as more states implement these policies in 26, 27 and beyond. We're ramping up our efforts to educate the steps on the positive role that the PureCycle can play in compliance to the new rules. Many new independent publications, like the PRE White Paper for Dissolution and the NOVA Institute's Definitive Chart for Recycle Technologies, are helping to place the right designations on plastic-to-plastic solutions that the regulations demand. PureCycle is very well positioned to be the premier solution for many brand applications. The regulation in Europe regarding PPWR, as well as mandated recycle content for automotive, continue to be planned for implementation toward the end of the decade. And our recent successful application for the EIF grants speaks to the momentum for PureCycle in Europe. We will continue to educate all agencies and regulatory bodies on how PureCycle can support the legislative efforts around the globe. The growth plan we outlined to the market last quarter continues to progress. Since announcing the Thailand project earlier this year, key feedstock LOIs have been signed and the amount of material available appears to be more than required to run the facility at full capacity. In Europe, permitting for the ANSWER facility is progressing as planned, with construction expected to commence thereafter. A proposal to the EU Innovation Fund has been accepted. and we anticipate up to a maximum grant of 40 million euros by the end of Q1. Between the capital efficiency of the Thailand project, the EIF grant for Antwerp, and the capital already spent on long-lead equipment, the remaining capital requirements are limited relative to the scope of these projects. We're in a good position to progress these two projects over the next three years, according to our original plan. We're on schedule to complete the final engineering for our Gen 2 purification line design work in early 2026. While not finalized yet, we still believe the capacity will likely fall between 300 and 500 million pounds annually. On the financing front, we have initiated debt financing efforts in Thailand in collaboration with local banks, are making good progress to secure the financing, and believe that we remain on track for financial close in line with prior communications. With that, I'll turn it over to Jamie for the financial presentation.