Trecora Resources

Good day and thank you for standing by. Welcome to the Tricora Resources second quarter 2021 resource conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during this session you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance please press star 0. I would now like to hand your conference over for your speaker today, Mr. Fred Bonacore of the Equity Group. Please go ahead.

Thank you, Nita, and good morning, everyone. Welcome to the Tracora Resources Second Quarter 2021 Earnings Conference Call. We at the Equity Group are very excited to be working with Tracora as their investor relations firm. Our contact information was listed at the bottom of the earnings release distributed over the wire services after the close of the financial markets yesterday afternoon. Presenting on our call today will be Pat Quarles, President and Chief Executive Officer, and Sami Ahmad, Chief Financial Officer. Christopher Groves, our Corporate Controller, will also be available for the question and answer session, which follows management's prepared remarks. Before we get started, I would like to review the Safe Harbor Statement. Statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's beliefs and expectations only as of the date of this teleconference, August 5, 2021. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks, as well as others, are discussed in greater detail in TRICOR's filings with the SEC, including the company's most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, Please see the earnings release issued after the close of the financial markets yesterday afternoon. This webcast is accompanied by a slide presentation that is available in the investor section of the company's website, www.Tricora.com. At this time, I'd like to turn the call over to Tricora's president and CEO, Pat Quarles.

Thank you, Fred, and good morning, everyone. As always, we appreciate your interest in Trocora and are happy that you can join our call this morning. We're pleased with our second quarter results. After continued economic challenges over the last five quarters, including both the COVID-19 pandemic and the extreme weather event of the Texas freeze, the second quarter illustrates the earnings potential of our businesses. With these external headwinds easing, the benefits of the transformative actions we've taken and investments we've made with respect to safety, reliability, operational processes, coupled with our productivity measures, have yielded positive results as evidenced by our performance during the quarter. Our second quarter EBITDA of $8.1 million was over an $8 million improvement from the first quarter and nearly double the second quarter of last year. Demand improved for all products. For solvents, the increase was led by the polyethylene, synthetic rubber, and blowing agent end uses. Domestic polyethylene wax demand grew in the quarter, allowing us to shift our sales back toward our higher margin U.S. customers. The strong demand environment also supported our pricing initiatives. Solvent margins for our market-based customers expanded despite the rise in natural gasoline costs, while our formula-based prices rose with feedstocks. Our average polyethylene wax selling price increased 9 cents per pound versus the first quarter. We also benefited from very strong byproduct values during the quarter. We had record byproduct margins in both May and June, driven by very high benzene pricing. Like many, we were challenged in the quarter by supply chain disruptions. These impacts ranged from third-party truck availability and freight costs, customers running at reduced rates due to the lack of availability of other non-Tracora feedstocks, and reduced demand in automotive end uses due to chip shortages. We estimate this resulted in about a negative $1 million impact to our second quarter. We advanced our organic growth program in a quarter. At the end of the second quarter, we had 11 projects focused on delivering new products or entering new markets. eleven projects focused on driving asset utilization, which do not require any significant capital investment, and six projects focused on improving productivity and reducing costs. Of the asset utilization projects, we converted two of our successful commercial trials to new custom processing business beginning in Q2. These projects have allowed us to significantly load the distillation column at TC. On productivity, as we mentioned last quarter, In April, we executed a significant cost reduction project at TC. Our focus on TC's asset utilization and improving the business's cost structure significantly benefited the site's financial performance. At Southampton, we executed a cost-saving project to outsource our product's handling activities, which will begin to contribute to earnings in the third quarter. Since we started our growth program, we have a total of nine projects that are commercial, with A further four, they're in the commercial trial phase. We also advanced our commitment to drive stockholder value by executing on our share repurchase program. Through mid-year, we repurchased a total of $5 million of shares, totaling $633,000, under our $20 million share repurchase authorization. Now, let me turn it over to Sammy to discuss our quarterly results in more detail.