Aspen Aerogels, Inc.

Hello, everyone. The ASPN conference call will begin shortly. Good morning. Thank you for attending the Aspen Aerogel First Quarter 2025 Financial Results Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Neil Baranowski, Aspen Senior Director, Head of Investor Relations and Corporate Strategy. Thank you. You may proceed, Mr. Baranowski.

Thank you, Bruno. Good morning, and thank you for joining us for the Aspen Aragel's first quarter 2025 financial results conference call. With us today are Don Young, President and CEO, and Ricardo Rodriguez, Chief Financial Officer and Treasurer. The press release announcing Aspen's financial results and business developments and the slide deck that will accompany our conversation today are available on the investor section of Aspen's website, www.aragel.com. During this call, we will refer to non-GAAP financial measures, including adjusted EBITDA and adjusted net income. The reconciliations between GAAP and non-GAAP measures are included in the back of the slide presentation and earnings release. On today's call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include the factors identified in our funds with the SEC. Please review the disclaimer statements on page one of the slide deck as the content of our call will be governed by this language. I'd also like to note that from time to time, in connection with the vesting of restricted stock units and or stock options issued under our long-term equity incentive program, we expect that Section 16 officers will file Forms 4 to report the sale and or withholding of shares in order to cover the payment of taxes and or the exercise price of options. I also wanted to highlight a near-term IR engagement. On Wednesday, May 21st, management will be hosting one-on-one investor meetings at the B. Reilly Securities 25th Annual Investor Conference. I'll now turn the call over to Don. Don?

Thanks, Neil. Good morning, everyone. Thank you for joining us for our Q1 2025 earnings call. My comments will focus on our performance, the status and expected impact of several key elements of our strategy, and our view of the current environment. Riccardo will dig deeper into our Q1 financial performance, our strategy, and will provide comments on our Q2 outlook. We look forward to your questions. Our goal is to build a strong and profitable company. The focus during Q1 was to strengthen our resilience by broadening our commercial activities in both the EV thermal barrier and energy industrial businesses. by building a robust and flexible supply chain, and by optimizing our cost structure. This important work continues in Q2 and will continue throughout the year. Starting with our thermal barrier business, we secured during Q1 a major PyroThin award with GM for a next-generation prismatic EV platform. This PyroThin award, following recent awards from Mercedes-Benz and Volvo Truck, demonstrates our value in additional EV battery form factors and chemistries, and we believe is a clear endorsement of our innovation and trusted performance. This momentum validates our role in the electrification ecosystem and sets the stage for continued platform expansion across new and existing OEMs. We are also encouraged by the record level quoting activity in our power thin thermal barrier business, which we believe signals that the leading OEMs continue to invest in the battery electric platforms of the future, positions Aspen as a key technology partner, and reinforces our strategic leadership in EV battery performance and safety. While the first quarter performance for the energy industrial business was on par with the first three quarters of 2024, it could not keep the torrid pace of Q4 2024 when we had record revenue of over $53 million. It has not been uncommon in this segment for the first quarter revenue to tail off compared to the fourth quarter of the previous year. A frequent pattern for the energy industrial business has been for revenue to step back in Q1 and then to build throughout the year. It is also likely that we are experiencing some destocking in our distribution channel. While our supply capacity, when our supply capacity is constrained, as it has been since 2023, distributors and contractors tend to store additional safety stock. Our lead times during the period of supply constraint were as long as six months versus more typical and current lead times of approximately one month. Now that we have our external manufacturing facility, or EMF, fully transitioned and an adequate supply from two aerogel manufacturing sources, there is less need for distributors and contractors to hold as much safety stock as they prepare for maintenance work and projects at our end users' facilities. We believe we are now reaching an equilibrium with respect to inventory held by our distributors and contractors and that EI revenue will build throughout the year and reach a full year revenue level approximating last year's revenue of $145.9 million. While there is some uncertainty in the energy markets, We note that most of the major oil and gas companies, including important end users of our products, such as Exxon, Chevron, Shell, and Total, maintain their 2025 capital expenditure guidance during recent earnings calls. We believe that we have ample opportunities for profitable long-term growth in our core segments and new adjacent markets. Overall, we believe our energy industrial business is well positioned for a policy approach in the United States that promotes an intensified focus on energy and power generation. We've been working since 2023 to diversify our raw material supply chain and to create a second source for aerogel. We have been successful in building a resilient and flexible supply chain for raw materials and aerogel which is an important tool in an environment with fluctuating tariff regimes. We have broad optionality from Asia, Europe, and of course strongly from the United States to optimize raw materials for our aerogel manufacturing plant in East Providence. For aerogel supply, we can optimize sourcing for energy industrial with the flexibility to shift production for US customers to the East Providence facility and to serve the rest of the world from EMF. In addition to sourcing optimization for energy industrial, we are proactively seeking to address potential tariff risks through pricing strategies and by working closely with EMF to lower product costs. With respect to finish thermal barrier parts that we fabricate in Mexico, These products are USMCA compliant and currently exempt from tariffs. In terms of financial stewardship, we have taken and are continuing to take decisive actions to simplify and streamline the company. As Ricardo will describe in more detail, the goal is to reduce fixed cash costs to 2022 levels, to lower dramatically the revenue level required for positive adjusted EBITDA performance and to minimize capex investments. Our target for the new cost structure is to reduce the revenue level required for adjusted EBITDA breakeven to approximately $245 million. We believe the optimized cost structure will enable us to achieve the same $90 million adjusted EBITDA that we recorded in 2024 with approximately $360 million of revenue, significantly lower than last year's revenue of $453 million. In terms of CapEx, our EMF relationship and flexible sourcing strategy allow us to create capacity in a modular fashion that can more closely anticipate the demand curve and to do so with minimal capital. We believe we have the resources to grow both of our businesses and to navigate an evolving environment. These actions reflect our commitment to building a resilient, growth-oriented, and profitable business. Ricardo, over to you.