Chemours Company (The)

Good morning. My name is Carmen, and I'll be your conference operator today. I would like to welcome everyone to the Chemours Company fourth quarter 2025 results conference call. Currently, all participants are in a listen-only mode. A question-and-answer session will follow the conclusion of the prepared remarks. I would like to remind everyone that this conference call is being recorded. I would now like to hand the conference over to Brandon Ontjes, Vice President, Head of Strategy, and investor relations for Chemours, you may begin your conference.

Good morning, everybody. Welcome to the Chemours Company's fourth quarter 2025 earnings conference call. I'm joined today by Denise Dignam, Chemours' President and Chief Executive Officer, and our Senior Vice President and Chief Financial Officer, Shane Hostetter. Before we start, I would like to remind you that comments made on this call, as well as in the supplemental information provided on our website, contain forward-looking statements that involve risks and uncertainties as described in Comoros' SEC filings. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ, and Comoros undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, we'll refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments is included in our press release issued yesterday evening. Additionally, we posted our earnings presentation on our website yesterday evening as well. With that, I will turn the call over to Denise Dignam.

Thank you, Brandon, and thank you, everyone, for joining us. During today's call, I will begin by discussing a few recent developments across Chemours in addition to highlights from our recent performance. I will then turn it over to Shane, who will provide details around our outlook for the first quarter of 2026 and key drivers for the full year ahead. Finally, I will provide updates on our meaningful progress against our Pathway to Thrive strategy before taking your questions. First, as we shared in January, we have reached an agreement to sell our Kuan Yin site. Since the shutdown of our titanium dioxide operations at this facility in 2023, We've been actively decommissioning the site and preparing to sell the remaining property. I'm happy to report that the estimated net proceeds of $300 million we expect to receive from the landfill will make a significant impact in reducing our outstanding debt and support our continued progress towards lowering our targeted net leverage below three times. I'm proud of our team's effort to get us to this point. Additionally, I want to welcome Mike Foley as the new business president of TT. In joining Chemours, Mike brings extensive leadership experience in the chemicals industry, running multiple business units with experience centered on operational excellence. As an established leader, I'm confident that Mike will continue to drive improvements in our titanium dioxide business, staying true to our value-based commercial strategy, strengthening reliability across our asset base, and advancing our long-term cost position initiatives. Turning to our fourth quarter results, we are pleased with the robust cash flow generated and the ability to drive sales performance within our expectations. Net sales met expectations largely due to TSS achieving record sales driven by continued strong opt-in adoption and consistent commercial performance across all divisions. We posted solid earnings overall, However, for the APM business, due to near-term and market weakness, we shifted our focus to promote cash flow as the quarter progressed, resulting in certain non-cash charges and the sale of certain products to reduce inventory levels. These decisions enabled us to make meaningful steps towards driving cash flow while setting a foundation for improved earnings as we get deeper into 2026. While these incremental costs resulted in us just missing the low end of our earnings range, we are pleased with our ability to generate strong quarterly free cash flow of $92 million, which we believe is more reflective of Camorra's longer-term cash generation potential to drive value for our shareholders. With this background, I'd like to provide some additional context on our business-level performance. Our TSS business reported a fourth quarter record for Option sales with double-digit growth of 37% compared to the prior year quarter, in line with our expectations. Overall, TSS's top-line increase was primarily due to higher pricing and moderate volume increases supported by a favorable mix for Option refrigerant blends driven by the U.S. AIM-X residential HVAC equipment transition and opportunistic sales for certain Freon refrigerants. This could not have been achieved without the TSS team's excellent commercial execution, which resulted in new sales opportunities and efficient use of our quota allowances. TSS had record annual sales in 2025, despite a year with subdued shipped HVAC units in the residential stationary OEM market. Additionally, these efforts led to overall annual Option refrigerant growth of 56%, making up 75% of total refrigerant sales in 2025, up from 56% the year before. TSS's top-line success helped to drive annual adjusted EBITDA margins of 32%, up from 31% in the prior year. despite additional costs of approximately $22 million in liquid cooling and next-generation refrigerants R&D investment over the same period. Moving to TT. In the fourth quarter, the TT team had strong execution with our top-line performance results coming in line with our expectations and our adjusted EBITDA remaining ahead due to stabilized pricing and cost performance. While we continued to operate in a more tepid global market, experiencing volume seasonality in certain key markets, we have maintained a strong resolve in implementing our pricing efforts across all key end markets. To these efforts and our pricing announcement in December, we experienced pricing stability between the third and fourth quarter, laying the groundwork for continued pricing strength in 2026. We are confident in our conviction of our value-based commercial strategy and remain resolute in this approach. Our overall objective to drive improved operational and longer-term cost performance remains unchanged. Consistent with that, we shared in the third quarter we have calibrated our production expectations to be more closely aligned with anticipated market conditions, and we continue to challenge what we can control, including improvements on all our costs while continuing to prioritize cash flow generation in the business. As part of our recent strategic portfolio management initiatives for TT, we commenced a restructuring of our mining operations in early January, including the temporary idling of one of our mines in North Florida and transitioning to a third-party earth-moving contractor. This revised approach will support our overall cost efforts and promote improved cash generation. Shifting over to APN. While our cash flow-driven changes weighed on our earnings results this quarter, the decisions we made strengthened our cash generation even as we navigated headwinds in certain cyclically sensitive end markets, notably in auto and industrial construction, which we believe will stabilize as we get into early next year. Entering the first quarter of 2026, the APM business and performance solutions observed a strengthening order book, particularly within the semiconductor sector, which shows preliminary signs of recovery. Additionally, growth was noted in data center materials and other key end markets. In January, Washington Works, a key manufacturing facility, experienced a disruption that necessitated a temporary shutdown, limiting our capacity. This event was traced to equipment affected by a local utility service outage in August, which is integral to our fluoropolymer supply chain and involves complex chemical processing technology. Although operations have now resumed, the unplanned outage coincided with challenging winter weather, resulting in delays to the restart. Our strategy has always included additional work on these assets planned for Q1 of 2027. Despite less than ideal earlier timing, these efforts are critical to ensuring long-term reliability and establishing operational stability to meet improving demand for APM's Performance Solutions products. Lastly, I would like to briefly address corporate-level performance, which demonstrated a significant decrease in expenses compared to the same quarter last year. This cost reduction reflects ongoing efforts in expense management and underscores the progress achieved through our operational excellence pillar as part of the Pathway to Thrive strategy. With that, I'll turn it over to Shane to walk through our first quarter outlook and key drivers for the full year of 2026.