Minerals Technologies Inc.

Good morning and welcome to the Minerals Technologies second quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Lidia Kopilova, Head of Investor Relations. Please go ahead.

Thank you, Gary. Good morning, everyone, and welcome to our second quarter 2025 earnings conference call. Today's call will be led by Chairman and Chief Executive Officer Doug Dietrich and Chief Financial Officer Eric Alduck. Following Doug and Eric's prepared remarks, we'll open it up to questions. As a reminder, some of the statements made during this call may constitute forward-looking statements within the meaning of the federal securities laws. Please note the cautionary language about forward-looking statements contained in our earnings release and on this slide. Our SEC filings disclose certain risks and uncertainties which may cause our actual results to differ materially from these forward-looking statements. Please also note that some of our comments today refer to non-GAAP financial measures. Reconciliation to GAAP financial measures can be found in our earnings release and an appendix of this presentation, which are posted on our website. I will turn it over to call to Doug. Doug?

Thanks, Lydia. Good morning, everyone, and thanks for joining today. I'll start the call by giving you an overview of our second quarter, followed by a review of our current market conditions across our product lines, as well as an update on our near-term growth initiatives. Eric will then take you through the detailed financials and provide an outlook for the third quarter. I'm going to close our prepared remarks with a quick review of our 17th Annual Sustainability Report, which we just released earlier this week before opening the call to questions. Let me start with our Q2 numbers. This is a strong quarter for us, both on a standalone and historical basis, with EPS coming in at $1.55, up 36% from Q1, and at a level only behind the second quarter of last year when market conditions were relatively stronger. Our ability to generate these results amid the recent global economic backdrop is an example of the strong operating culture of this company. As we shared on our last call, we started to see a significant uptick in sales at the end of the first quarter, and our sales rate expanded through the second quarter and resulted in $529 million, up 8% sequentially. Operating income came in at $79 million, up 25% sequentially. An operating margin was 14.9%, up 200 basis points from the first quarter and reverting to our natural level of 15%. It's important to put this performance into context given the challenges presented by changing tariffs and the ongoing uncertainty they continue to put on our end markets. Our results are a testament to MTI's strong fundamentals, including our operational agility, prudent cost and expense control, and our team's ability to take quick action and make necessary adjustments. I'd like to highlight that we delivered strong cash conversion this quarter, in line with our historical average of around 7% of sales, a level that we expect to continue. We also returned $22 million to shareholders this quarter, reflecting our ongoing commitment to steer capital back to investors. Our balance sheet remains in excellent condition, giving us a strong foundation with the flexibility to pursue multiple avenues to drive growth in sales, earnings, and cash flow. Now let me talk a bit about what we're seeing with market conditions and give you some insight into projects that we have coming online to drive both growth and margin expansion. Let's start with the consumer and specialties business segment, which comprises our household and personal care and specialty additives product lines. In household and personal care, We're seeing mixed conditions across these consumer end markets. The North America cat litter market has been slower this year compared to recent years, and these conditions have created more competitive dynamics. We are navigating this with increased promotional activity with our customers and are seeing momentum building in our order books as a result. We continue to see positive long term growth dynamics across global pet litter markets. To support this growing demand, We've been retooling our facilities in North America and Europe with new process and packaging equipment. These upgrades are designed not only to produce higher quality products, but also to improve efficiency and reduce production costs. In addition, we are opening a new pet litter packaging facility in Asia late in the third quarter to support the demand growth we are seeing there. In our other consumer-oriented products, we are seeing significant increased demand for renewable fuel purification, animal health solutions, and fabric care. This is being driven by regulation changes for more sustainable aviation fuel, the continued trend toward natural livestock feed additives, and the growing demand for more sustainable laundry detergents. We have several capacity expansion projects underway for these product lines as well. In the specialty additives product line, market conditions remain mixed. The paper market in North America is relatively flat and Europe remains weak. However, we continue to penetrate the paper and packaging market in Asia with strong customer pool for our packaging solutions and sustainable products like NuYield. Three new satellite facilities, two of which are for packaging applications, and one packaging and one capacity expansion are set to come online within the next seven to eight months. And we continue to see a strong pipeline of additional opportunities across the paper and packaging market further down the road. In other areas, the automotive market has been relatively flat this year, while residential construction markets vary for us by region, with stronger demand on the U.S. West Coast and continued softness on the East Coast. Meanwhile, our food and pharmaceutical markets remain robust. Now let me turn to our engineered solution segment, which includes our high-temperature technologies and environmental and infrastructure product lines. In high-temperature technologies, we continue to see strong demand in North America for our automated MINSCAN systems and for our newest steel refractory formulations. The North America steel market remains relatively stable and at a production level that provides good volumes for us. In Europe, the steel market remains weak, and we expect these conditions to continue for the remainder of the year. A bright spot in Europe is that we've secured our first MINSCAN LSC sale there, opening a new market for our technology. We're pursuing the same strategy as we have in North America, helping our customers reduce costs and improve safety through high-tech automated refractory application and measuring systems. We expect to generate additional MINSCAN sales moving forward as other customers become comfortable with and adopt our new technology. The U.S. foundry market has generated solid demand for our green sand bonds through the first half from stable auto demand and despite the softer heavy truck and ag equipment markets. the China foundry market has remained resilient despite the introduction of increased tariffs. Our volumes of green sand bonds in China remain strong as foundry customers quickly adapt to the changing market conditions and seek the cost savings and productivity value that our products provide. On the environmental infrastructure side, the commercial construction and environmental lining markets have stabilized, but we have not yet seen the initiation of several planned large projects where we are specified. We expect commercial construction markets to remain relatively soft as long as interest rates remain higher. However, we are seeing strong pull for our infrastructure drilling products, water remediation solutions, offshore energy services, and PFAS remediation through Florazor. As an overall market summary, we see similar market conditions to the second quarter continuing into the back half of the year. However, I would not characterize these conditions as robust by historical standards. But as I just mentioned, we are executing on several initiatives to support the strong near-term demand we are seeing in multiple product lines. These initiatives include new capacity and plant expansions to support demand for sustainable aviation fuel, animal health, fabric care, and pet care. These specific projects will support $100 million in revenue growth for products that will drive the margin profile of the company higher. This is just a subset of our growth initiatives. Other projects, such as geographic expansion initiatives and new product introductions, can be supported by our existing capacity. Now let me let Eric take you through some additional details of our financial results, as well as the third quarter outlook. Eric?