PureCycle Technologies, Inc.

Good day and thank you for standing by. Welcome to the PureCycle Technologies second quarter 2026 corporate update 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 11 on your telephone. You will then hear an automated 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 your speaker today, Eric DeNatale, Director of Investor Relations. Please go ahead.

Thank you, Kelly. I'm Eric DeNatale, Director of Investor Relations for PureCycle. Joining me on the call today are Dustin Olson, our Chief Executive Officer, and Donald Carpenter, our Chief Financial Officer. This evening we will be highlighting our corporate developments for the second quarter of 2026. The presentation we'll be going through on this call can also be found in the investor tab on 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 second quarter 2026 corporate update press release filed this evening, as well as in other reports on file with the SEC that provides further detail 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 in 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. With that, I will now turn it over to Dustin Olson, PureCycle's Chief Executive Officer.

Thank you, Eric, and good evening, everyone. This is a quarter of real progress on all fronts and sets up the second half for further progress. Operationally, we completed the turnaround ahead of schedule and below budget, executed more than 170 site projects, and came out of it with a plant that set a new daily throughput record in June. We brought compounding in-house, and it is running today, producing what customers specify. Commercially, revenue grew for the sixth consecutive quarter, and our first Procter & Gamble application entered commercial production. On the regulatory front, New Jersey approved Pure 5 as recycled content The last approval our customers were waiting on, and it's already accelerating qualification at some of the largest food service companies in the country. We also spent the quarter preparing for future developments. In May, we ran Ironton under process conditions that closely matched the plant designs we will build in Thailand and Antwerp, and those tests were successful. Thailand received Board of Investment approval in the quarter, and we expect to break ground in the second half of this year. Every one of those threads points in the same direction, a second half ramp and Ironton breakeven, which remains our second half target. We are further along the path than we were 90 days ago. Let me walk you through the details. Here's the frame that we're using internally. All year, we have said the commercial ramp will be second half weighted, and it was for two specific reasons. The first was regulatory clock. Requirements that begin in January 27 set the pace for when brands must move. The second was supply chain readiness. It is one thing to technically qualify the product. It is another thing to make it consistently and reliably at specification every time. Brands buy at the SKU level one application at a time, and they do not start until they're confident the material in the 10th truck will be identical to the material in the first. Both factors are now proving out. Since the New Jersey approval, brands are accelerating their qualification process for the first time. You see it in QSR cold cups and in large snack and confectionery programs. That tells you that the regulations really matter for driving demand and that the demand is coming. And with our compounding assets integrated and running, we now have the reliable supply chain that those brands require. You can see it working. A customer with standards as exacting as Procter & Gamble is accelerating their own commercial ramp with us. The other thing to understand is fragmentation. Outside of a handful of categories, this market converts SKU by SKU. Thousands of separate qualifications rather than a few large contracts. That is not an issue unique to PureCycle. It is the structure of the market and is the same for everyone in it. Quick service restaurants follow the same pattern, but with higher volume SKUs. A large chain carries fewer packaging SKUs, and each one is enormous. A single qualification there can be worth what dozens are worth elsewhere, and they are working against a deadline that's not set by us. New Jersey's food contact exemption expires in January of 27. So the expected future pace from here is largely set by a date and statute. Customers are driving to have product on the shelves to meet requirements that start in January of 27. This all drives toward an Ironton breakeven, which remains our second half target. We have referred to breakeven as roughly 40 to 50% utilization and that number has not changed. It is built on branded sales at those utilization rates and branded sales are ramping. Branded pricing remains robust and applications carrying the highest confidence for the second half maintain strong pricing. The net of this is our confidence in the second half ramp and the path through Ironton breakeven has increased because the things that made the second half are being proved out. Irontemp produced approximately 4.5 million pounds of pure 5 in the second quarter, down from the prior quarter and consistent with the message we communicated in advance of the planned turnaround. We processed approximately 5 million pounds of feedstock. This was not a quarter for rate. It was a quarter for making improvements to the plant, testing equipment, and the test work. The turnaround was completed ahead of schedule and below budget, and we executed more than 170 projects during the outage targeting reliability, rate, and quality. Two reliability items are worth naming because together they were our two largest sources of unplanned downtime last year. The first was the CP2 system, which has been a persistent problem and is now substantially improved. The second was improving the reliability of numerous mechanical systems, and this outage substantially expanded the capacity of the plant bottleneck and improved the worst-performing seal in the plant. Both are structural fixes. When we open the equipment during the outage, the large equipment where we had prior problems is very clean, including the settler, where coproduct separates from the product stream. That bodes well for future reliability, so waste plastic is not fouling the system and is a good long-term indicator for the technology, not just for this facility. May was, by design, a low-volume month. We commissioned the newly installed equipment, and we changed process conditions at Ironton to mimic the designs we intend to build in Antwerp and Thailand. Those tests were successful. Being able to run those conditions on an operating commercial asset before we build is an advantage most companies in our position do not have. In June, we set a new daily throughput record, and we demonstrated production at 12,000 pounds per hour. on feedstock supply is very steady. Purchases are routine. Denver is running well, and inventory is balanced. Delivered costs are declining, and we now source from more than 15 different domestic suppliers. On-site compounding is running. We announced mechanical completion on our May call. The asset today is running 24 hours a day for five days a week, and we intend to move to 24-7 in the fourth quarter. That is consistent with the cadence we described in February and again in May and is a large part of why our ramp has been second-half weighted all year. We previously relied on third-party compounders, and third-party operations carry their own reliability risks. Bringing it in-house saves us money and lets us shift by rail car. Most importantly, it de-risks our supply chain, strengthens our quality control, and gives us the flexibility to deliver on what each customer specifies. Now that it's running, here is what it changes. We control the formulation. We can hit a customer specification, the precise recycled content percentage, the precise properties, and hold it consistently. And the mandates do not currently require 100% recycled material. They require a percentage. Compounding is how we deliver that percentage in a form that the application needs. It also opens thermoform cups at scale, in clear and in white, Both sit directly in the scope of regulations, and with compounding, we can make both. Also importantly, we can now deliver compounded product in rail cars directly from Ironton. This was a capability that we don't have with a third-party compound part. We have generated and shipped numerous samples since startup. The product looks excellent, and you see the examples of it in the deck. And because compounding is running at Ironton, we can now control the product samples going into the hands of prospective customers in Thailand and Europe. And we are doing exactly that. One comment on how to read the numbers, compounded volumes includes additives and virgin polypropylene alongside our purified content. So compounded products will run ahead of the purified resin pounds. This is the product that the market is asking for. Finally, in May, we achieved ISO 9001 certification, independent validation of the quality systems that sit behind all of this. It's one of those quiet milestones, but it's kind of a thing that branded customers ask about before they commit. Revenue was approximately $4.5 million, up substantially from a year ago, with seven new customer conversions, including our first building and construction application. On top of the $40 to $50 million of non-New Jersey and $25 to $50 million of New Jersey ramp, the most significant new commercial development is in quick serve restaurants, and it happened after quarter closed. In the third quarter today, we shipped all three major converters that serve the QSR cold cup market for clear cups. That is the channel, not the single customer. Cold cup programs are underway at two major QSRs through those converters. New Jersey is what accelerated this. Following the approval, we were fast-tracked into two very large qualification programs for cold cup lids. For QSR applications in New Jersey alone, we estimate the annual demand to meet the recycled content requirement to be roughly 20 million pounds. One piece of context on timing. The approval landed in mid-May, which means the entire market is qualifying on a compressed calendar ahead of January 2027. Compression creates urgency, and urgency favors the supplier that is ready. The brands are moving as fast as we are. This is the acceleration. This is what the acceleration actually looks like. In February, we laid out five application categories that we chose to concentrate on. Let me come back to that list because I think it provides the clearest way to show you what our progress really looks like. The largest of the five was QSR cold beverages, which we seized, which we sized at roughly 330 million pounds in North America, growing at 7% to 10% per year. This is where we have moved furthest, as I just described. value household goods at roughly 150 million pounds across multiple brand owners. This is where P&G sits, and I'll come back to them in a moment. We also added two closure partnerships during the quarter with Reliable Caps and Stack Tech. Premium pet food and jerky and meat sticks are both BOPP film categories. In June, working with Inovia Films, we successfully produced white cavitated BOPP film using Pure 5 Choice. So the capability is now demonstrated with a named converter. We also continue to progress with two of the top five global food manufacturers on snack and confectionary packaging. One of those food manufacturers has accelerated its work with us and is pushing to move as quickly as it can. One of the first instances we've seen of a large company pulling a timeline forward rather than pushing one out. It is a 2027 program. and the direction of the travel is the point. The current regulatory deadline is a hard catalyst and our supply chain and commercial infrastructure are materially better than they were a year ago. Dermacosmetics is the earliest of the five, but it moved to this quarter, achieving the highest Cospitox purity grade. The first recycler to do so is what made the category accessible to us. and we are nearing commercial shipments to a large global cosmetics and personal care company. They are all at different stages. Four of the five move this quarter and the largest QSR is moving the fastest. One thing about this business builds, accounts are sticky. Once you are qualified into an application, you tend to stay there for a long time. For calibration, partnership we announced in July with Mitsui and RM Tochello in Japan took roughly three years from first engagement to announcement. This is a measure of the business we are in, and it is the same reason these relationships are durable once they are established. Following the New Jersey approval and the Cleveland Kitchen launch, inbound interest increased meaningfully. Today, the pipeline spans at 42 brands, 15 converters, 28 applications, and 37 programs. advance at least one stage during the second quarter to the third quarter to date. Our relationship with Procter & Gamble continues to broaden. Downy detergent caps are now commercial production, Tide caps are scheduled for retail production in the third quarter, and the Zix ZQL Pure Z child-resistant lids are targeted for the fourth quarter. Procter & Gamble continues to execute the pipeline by adding brands. This is important because Procter & Gamble has among the most demanding qualification standards in consumer products. Having cleared them once, additional applications move faster, and other brands notice. When one of the toughest qualifiers in the industry buys again, that is a third-party verdict on quality that we could not deliver ourselves. A few things worth remembering about Procter & Gamble. They hold an offtake arrangement for up to 15% of Ironton's capacity. Their portfolio is highly fragmented across SKUs and applications, which means each approval opens the door to the next rather than closing the opportunity. They have also been clear in their support of our growth plan, and they remain committed to increasing recycle content across their portfolio. One more point on Procter & Gamble because it applies to every large brand we serve. You start small, you prove it, and then you expand. You walk before you run. The applications we have commercialized so far are walking and we believe the larger volume opportunities are starting to filter into the pipeline behind them. This is a natural progression of a relationship like this one and it is what we expected to see. In June, Cleveland Kitchen Deli containers were made with 25% purified recycled polypropylene produced by our converter partner, IPL Schuller. reached store shelves at a major big box retailer. I want to be very precise about what this is. It is a commercial retail conversion, not a trial. It is on shelves. Consumers are buying it, and additional brands have since approached IPL Scholar about using our resin. Connect that to what other converter announcements we made during the quarter, Reliable Caps, Stack Tech, Inovia, Amcor, alongside our continuing work with Plastic Ingenuity, Converter Relationships and our marketing effort opened the long tail of demand, smaller brands and private label, which in aggregate is very real, just as affected by regulation, and they may be far less aware that a solution actually exists. That is how demand broadens beyond the largest CPGs. The Cleveland Kitchen B2B marketing campaign was our first fully integrated marketing campaign, and it worked. Eight industry outlets picked up the story and it generated seven new account engagements with large retailers, food CPG companies, and converters. That is pipeline, not impressions, and it came from deliberately small test budget. We will run this playbook behind more brand launches and incremental spend is modest against the pipeline it opens. The regulatory picture is one of the most reliable part of our demand outlook because it sets the date in which regulations will come, it's set by them and not set by us. ESG has been a headwind for several years, globally and in the United States. The regulations matter, however, the regulations that matter kept advancing anyway. New Jersey approved, California is in effect, Japan opened food contact, and Europe keeps moving forward. Rules that advance to the toughest part of the cycle are durable and our demand is built on those rules. Our posture toward regulation has changed as well. We used to react to legislative developments. Today, we are proactive. We have stepped up our lobbying and government relations work, we are in regular dialogue with policymakers, and we are increasingly the thought leader in the room when recycled content rules are written. We are well ahead of those same efforts in Europe and Asia. Two key points. Our largest customers are accelerating in circular solutions because of regulations. The QSR programs and the food manufacturer I mentioned earlier both move faster after the New Jersey approval. This is the clearest evidence that we at Brands are treating these deadlines as real rather than aspirational. Second, we believe New Jersey and California are the tip of the iceberg. This is going global, and the regulations are set to affect the entire foundation we continue to build. One element of the global regulatory process may be underappreciated. While Ironton is the focus on domestic demand, our REACH certification allows us to serve Europe and other geographies from it, and we're seeing increased interest in doing so. That has also helped us convert letters of intent in Thailand, which brings me to growth. In New Jersey, the recycle content requirements rise to 20% in 2027, The food contact exemption expires in January of 27. In California, SB 54 is in effect with 10% source reduction by 27, 20% by 2030, and 25% by 2032. Pure 5 qualifies as recycled content to our APR certification. One point on New Jersey I want to highlight because I believe it matters how you understand the demand. The approval we received in May is a one-year conditional approval with a defined path to permanent status. We do not regard this as a meaningful hurdle. The conditions are largely documentation, feedstock sources, the types of feedstocks processed, purified end-use applications, and compliance information as the New Jersey Department, the New Jersey DEP requested. We are already providing a number of these items. One related point. Most recycled content claims in our industry rely on mass balance, an accounting approach where a producer buys credits and allocates recycled content to output that may not physically contain any. New Jersey and California both exclude it. Our product physically contains the recycled material, so it qualifies where credit-based claims do not. That makes PureCycle one of the very few compliant suppliers at scale for food-grade recycled polypropylene. Outside the United States, the same shift is underway. In July, together with Mitsui, we announced a strategic partnership with RM Focello to bring recycled polypropylene into flexible packaging in Japan. Following Japan's approval of physically recycled polypropylene for food contact, Europe continues to advance to the packaging and packaging waste regulation. On Thailand, the detailed design is confirmed. We have ordered key long lead equipment, and we have a team on the ground progressing the project. We received the Board of Investment approval in the quarter, including admission to Thailand's FastPass Investment Acceleration Program. The facility is expected to be operational in 2028, and we expect to break ground in the second half of this year. Total investment remains approximately $250 million. On the commercial side of Thailand, we have signed seven letters of intent with Thai feedstock suppliers and 14 letters of intent on feedstock. Those letters more than cover the plant requires. On the sales side, they span similar categories and are targeting the US customers with heavy export business into the US, Europe, and Japan. In Belgium, permitting continues on schedule. We signed the 40 million euro European Innovation Grant Fund earlier this year. I'll now turn it over to Donald for the financial update and some commentary on our capital position. Thank you, Dustin.