Solstice Advanced Materials Inc.

Greetings, and welcome to the Solstice Advanced Materials Fourth Quarter 2025 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad, and we ask that you please limit yourselves to one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to your host, Mike Leadhead, Vice President, Investor Relations. Mike, please go ahead.

Thank you, and good morning, everyone. Welcome to Solstice's fourth quarter 2025 earnings call. We released our fourth quarter 2025 financial results earlier this morning. Today's presentation, including non-GAAP reconciliations, and our earnings press release are available on the investor relations portion of Solstice's website at investor.solstice.com. Our discussion today will include forward-looking statements that are based on our best view of the world and our businesses as we see them today, and are subject to risks and uncertainties, including the ones described in our SEC filings. Joining me today are David Sewell, our President and CEO, and Tina Pierce, our CFO. David will open today's call with highlights of our fourth quarter results. Tina will then review our segment performance and financial outlook before turning the call back to David for closing remarks. We will then be happy to take your questions. With that, I'll now turn the call over to David.

Thank you, Mike, and thank you, everyone, for joining us today. During the fourth quarter, Solstice Advanced Materials continued to deliver strong financial and operational results as we transitioned to an independent public company following the completion of our spinoff from Honeywell on October 30th. I would like to take a moment to thank our entire Solstice team who continued to deliver for our customers throughout this transition. Across the business, we are seeing increasing momentum driven by secular growth trends in areas such as nuclear energy, AI, and data centers that are well aligned with our differentiated technology platforms. This momentum was evidenced in our fourth quarter results, surpassing our expectations. Not only does this reflect continued strong demand for our solutions, but it also speaks to our strong operational execution as we transition to operating as a standalone company and execute our strategy to drive long-term growth. Solstice finished 2025 with return on invested capital of approximately 19% and net leverage of 1.5 times EBITDA, which we believe reflects the specialty nature of our portfolio and offers us significant financial flexibility. When combined with the key secular growth trends we are seeing in our core offerings, Solstice has the ability to invest in multiple high-return projects. Over the past few months, we have announced our investment to double sputtering target capacity in Spokane, Washington to meet accelerating AI demand, our investment to expand production for our Spectra defense fibers, And just last night, we announced our ongoing efforts to expand the capacity of our nuclear conversion business to facilitate the ongoing nuclear renaissance. Guiding our capital deployment is our disciplined capital allocation strategy as we look to balance opportunities that will unleash long-term growth and shareholder returns. With that in mind, we are pleased to announce today the initiation of a quarterly dividend of 7.5 cents per share, marking an important milestone as we begin to return capital to shareholders. As we close out 2025, we are confident that we are well positioned for the year ahead. Consistent with the framework we laid out at our Investor Day this past October, today we are providing guidance for the full year 2026, representing low single-digit revenue growth and mid-single-digit adjusted EBITDA growth, versus the prior year at the midpoint. In addition to the full year, we are also sharing today our outlook for the first quarter of 2026 in an effort to provide additional color on the momentum we are seeing and the shape of the business in our first full quarter as a standalone entity. Turning to slide four, before we dive into our results for the full year and the quarter, I would like to begin by taking a moment to discuss our nuclear business which we also call Alternative Energy Services. Solstice is a leading participant in the U.S. nuclear supply chain, with our Metropolis Works facility serving as the only UF6 conversion site in the United States and a 60-plus year history as a reliable and trusted partner to our customers, leveraging our proprietary expertise. Solstice is highly committed to the exciting future of the nuclear industry, and we anticipate that we will be increasing our production in 2026 by about 20% over our planned capacity in 2024 to support our customers' needs. We are expecting to achieve greater than 10 KT of production here in 2026 due to the disciplined capital investments we have taken as well as operational improvements to enhance site reliability with higher production backed in part by the U.S. Department of Energy. As the world, and particularly the United States, continues to invest in nuclear energy, all stages of the value chain will be needed to support fuel production. Even with our expansion to 10 KT annually, Our current facility is largely contracted through 2030 today, as evidenced by our $2 billion-plus backlog. With robust demand from our customers, Solstice is now actively evaluating further ways to expand our UF6 production to meet this demand, and we're having active discussions with customers about ways to remain their trusted supplier long-term. Additionally, we have retained a leading engineering, procurement, and construction provider to conduct initial engineering analysis, and we will provide an update when further progress is made. It is important for us to reemphasize here that Solstice will maintain its disciplined, high ROIC mindset that underpins any of our potential investments. Finally, we wanted to take a moment to touch on the near and medium-term earnings dynamics for this business. When the Metropolis facility was idled in late 2017 during a much different nuclear environment, this business took on a series of product loans to keep its customer commitments. The last of these loan returns has been scheduled to take place in the second half of 2026 and limits the amount of product we are able to sell into the open market. This is anticipated to impact 2026 revenues by approximately $30 million. As we move beyond that period, we have very high visibility to double-digit EBITDA growth CAGR through 2030 based on our current backlog and facility production. With that, I'll now turn it over to Tina Peirce, our CFO, to discuss our financial results for the full year and fourth quarter in more detail.