Kraton Corporation

Good morning and welcome to the Crayton Corporation 4th Quarter 2020 Earnings Conference Call. My name is Dale and I will be your conference facilitator. At this time, all participants are in a listen-only mode. Following the company's prepared remarks, there will be a question and answer period. If you'd like to ask a question, please press star 1 on your touchtone phone. Today's conference is being recorded. If you have any objection, you may disconnect at this time. I will now turn the meeting over to Mr. Gene Shields, Director of Investor Relations. Sir, you may now begin.

Thank you, Dale. Good morning and welcome to the Craton Corporation fourth quarter 2020 earnings call. With me on the call this morning are Kevin Fogarty, Craton's President and Chief Executive Officer, and Atanas Satanasov, Craton's Executive Vice President and Chief Financial Officer. A copy of the fourth quarter 2020 news release with the related presentation material we will review this morning is available in the investor relations section of our website. And before we review the results for the fourth quarter, I'd like to draw your attention to the disclaimers on forward-looking information and the use of non-GAAP measures included in our presentation and in yesterday's earnings press release. During the call, we may make certain comments that are not statements of historical fact and thus constitute forward-looking statements. Investors are cautioned there are risks, uncertainties, and other factors that may cause Craton's actual performance to be significantly different from the expectations stated or implied by any forward-looking statements we make today. Our forward-looking statements speak only as of the date they're made, and we have no obligation to update such statements in the future. Our business outlook is subject to a number of risk factors. As the format of this morning's presentation does not permit a full discussion of these risk factors, please refer to our forms 10-K, 10-Q, and other regulatory filings available in the investor relations section of our website. Regarding the use of non-GAAP financial measures, a reconciliation of each non-GAAP financial measure we use to its most comparable GAAP financial measure was provided in yesterday's earnings press release as well as the presentation material this morning. Following our prepared comments, we'll open the line for your questions. I'll now turn the call over to Kevin Fogarty. Kevin.

Thanks, Gene, and good morning, everyone. I hope you're all being safe and staying healthy. As you well know, 2020 was a year like no other, given the unprecedented challenges posed by the global COVID-19 pandemic, especially the adverse impact of demand in many end markets and geographies, We are extremely pleased, not only with our financial results for the fourth quarter and the year overall, but in terms of how our entire organization responded to an altered operating environment. With the safety of our employees, our customers, suppliers, and the communities in which we operate our top priority in 2020, we responded quickly early in the year with enhanced safety protocols in our operating locations, and we successfully transitioned to a remote work environment for a significant number of our employees around the globe. I'm proud of the way our organization has continued to work almost seamlessly to preserve business continuity and the efficiency of our supply chains so that we are able to continue to serve the needs of our customers. This past year was also a good year to prove the resiliency of our business model and the benefits of our broad end market and portfolio diversification. While COVID-19 had an adverse impact on global demand in the first half of 2020 in particular, As evidenced by weakness and then markets such as automotive oil field and consumer durables. We saw favorable demand trends that translated into growth in other areas such as adhesive businesses in medical and personal care applications and in paving and roofing markets. As a result, despite demand disruption associated with coven 19 in 2020 crate on delivered growth and sales volume for both our Palmer and our chemical segments. As a further measure of the resilient performance of our core business, excluding the results for the Careflex business, which we sold in the first quarter of 2020, adjusted EBITDA for 2020 would have been down approximately 5% compared to 2019, despite a challenging market environment associated with COVID-19, particularly in the second quarter of 2020. Of critical importance, while we were focused on navigating the near-term challenges of 2020, we continue to position Craton for the long-term. Over the past year, we successfully advanced our sustainability objectives, which are broad-based and include initiatives such as responsible procurement and supply chain improvements, enhanced operational efficiency, advancements in diversity and inclusion, as well as bio-based certification and commercialization of products that address the world's growing need for sustainable alternatives. Key examples of these products are our revolution family of low-color rosin esters, and our circular plus polymer technology that can facilitate expansion of the circular economy via processing more post-consumer plastic waste streams. And with our ongoing commitment to R&D, we have now achieved commercialization of our IMSS technology in automotive with the Buick GL6 launch in China. And we look forward to further translation of this technology into other automotive applications. I'll speak more about our forward vision and how we are framing our strategy on sustainability in just a few minutes. On a more tactical front, in a year like 2020, cost management and strengthening of our capital structure were paramount. During the year, we took action to deliver approximately $20 million of run rate cost savings, and we expect to deliver additional cost efficiencies this year. The sale of our Caraflex business in the first quarter of last year unlocked significant value accretion for our shareholders, and it contributed to a significant delevering of the Crate Don balance sheet, improving our overall leverage profile. We maintain a healthy liquidity position throughout the year and were able to refinance our ABL facility through December 2025 while reducing pricing. In addition, we successfully refinanced our 7% senior unsecured notes, reducing the coupon to 4.25%. Going forward, this will provide for meaningful cash interest savings. I'll now happily turn the call over to our Executive Vice President and Chief Financial Officer, Athanas Atanasoff, who will provide more specifics on our financial results for the fourth quarter and the full year in 2020.