Ecovyst Inc.

Good morning. My name is Madison and I will be your conference operator today. Welcome to Ecovist's first quarter 2024 earnings call and webcast. Please note today's call is being recorded and should run approximately one hour. Currently, all participants have been placed in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to hand the conference over to Jean Shields, Director of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and welcome to the ECOVIST first quarter 2024 earnings call. With me on the call this morning are Kurt Bidding, ECOVIST's Chief Executive Officer, and Mike Vian, ECOVIST's Chief Financial Officer. Following our prepared remarks, we'll take your questions. Please note that some of the information shared today is forward-looking information, including information about the company's financial and operating performance, strategies, our anticipated end-use demand trends, and our 2024 financial outlook. This information is subject to risks and uncertainties that could cause the actual results and implementation of the company's plans to vary materially. Any forward-looking information shared today speaks only as of this date. These risks are discussed in the company's filings with the SEC. Reconciliations of non-GAAP financial measures mentioned in today's call with our corresponding GAAP measures can be found in our earnings release and in presentation materials posted on the investor section of our website at ecoviz.com. I'll now turn the call over to Kurt Bidding. Kurt?

Thank you, Gene. Good morning. Ecoviz delivered solid results for the first quarter of 2024. Continued strong demand for regeneration services and higher sales of virgin sulfuric acid drove the favorable results in eco-services. Sales within the zealous joint venture were up on higher sales of catalysts used in sustainable fuel production and sales growth in customized catalyst applications. However, sales in advanced silicas were lower due to lower sales of polyethylene catalyst supports, which more than offset stronger sales in finished polyethylene catalysts. As a result, we delivered first quarter adjusted EBITDA of $45.5 million, up 6% compared to the first quarter of 2023. Cash generation in the first quarter was particularly strong, reflecting the timing of dividends received from the ZList joint venture that were deferred in the fourth quarter due to the timing of working capital needs within the joint venture. This favorable cash generation, along with higher adjusted EBITDA, provided for further reduction in our net debt leverage ratio to 2.9 times at the end of the first quarter, down from three times at the end of the last year. Overall, I'm pleased with our achievements in the first quarter. Our first quarter financial performance provides a good start to the year. We successfully completed two turnarounds in our eco-services segment during the quarter while maintaining a very favorable safety performance. In addition, we continue to execute on our long-term strategic plan, positioning Ecovist for continued growth in the future. As we turn to slide six, I'll provide an update on our near-term demand outlook. Starting with eco-services, for our regeneration services business, the outlook remains positive. We believe that the North American refining climate remains favorable with rising vehicle miles traveled, refining utilization rates expected to remain in the 90% range, and increasing margins for affluent. And for our Gulf Coast refining customers, the lack of availability of Russian refined products in the global market is creating additional demand for U.S. refined product exports. For virgin sulfuric acid, we see balanced conditions and expect sales volume to be up in 2024. Mining demand remains strong, with continued demand strength expected to be driven by global copper demand and ongoing expansion of projects in North America. We continue to expect improvement this year for virgin sulfuric acid sales into the nylon end use. Industrial demand remains a mixed bag with relative stability in many end uses, including lead-acid batteries, chlorophyll-I, and water treatment. While we continue to see some price weakness for spot and short-dated contracts as compared to 2023, we did not see significant deterioration in overall demand conditions for industrial markets in the first quarter. For our Chem 32 business, we continue to see high utilization and strong customer interest, with continued growth in sustainable fuel production capacity being a contributing factor. Turning to advanced materials and catalysts, For advanced silicas, global demand growth for polyethylene is expected to be up 2% to 3% this year, led by North America, where producers continue to benefit from favorable feedstock costs. Sales for the advanced silica segment fell short of our expectations in the first quarter, where higher sales of finished polyethylene catalysts were offset by lower sales of polyethylene catalyst supports associated with customer order timing and limited destocking. Overall, we expect improved global demand conditions to benefit our sales of advanced silicas used to produce polyethylene, particularly in the second half of the year. We remain very optimistic about the long-term outlook for sales of catalysts used in the production of sustainable fuels. In 2024, North American capacity for renewable diesel and sustainable aviation fuel is expected to grow by over 70%. supported by attractive production incentives for US-based producers. And with the EU mandating blending targets, EU renewable diesel and SAF capacity is expected to grow by 26% in 2024. Customer and prospective customer engagement in sustainable fuels remains high. We already have trial sales of catalysts for alcohol-to-jet SAF production technologies and we expect activity to increase with a number of startups slated for next year. For hydrocracking catalysts, the growth in global diesel demand is a positive factor. Market conditions in the U.S. remain favorable, with diesel inventories below historic averages. The hydrocracking catalyst market remains competitive, but we believe we have a differentiated offering with our mock technology. Order timing for hydrocracking catalyst sales remains a function of change-out activity, which makes the timing of sales difficult to predict with absolute certainty. While we expect a positive year for hydrocracking sales in 2024, we will not repeat the peak level of sales in 2023. And based upon our current expectations for sales timing, we anticipate a stronger second half for 2024. Sales of emission control catalysts, we are seeing a softer demand outlook for 2024. Increased borrowing costs are impacting purchase activity for new vehicles. And while not commercial on a large scale yet, we continue to work with key players in the advanced recycling industry, where our catalyst technologies can provide a meaningful reduction in energy intensity for thermal paralysis. We expect growth in recycling activity to increase in the next two years, with 12 advanced recycling plans for plastic waste expected to be commissioned in 2024. I'll now turn the call over to Mike for a more detailed discussion of our financial results for the first quarter.