Trecora Resources

Good day, and thank you for standing by. Welcome to the Tricora Resources fourth quarter 2021 results 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 the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If we require any further assistance, please press star 0. I would now like to hand the conference over to Jeremy Hellman with the Equity Group. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the Trocora Resources Fourth Quarter and Full Year 2021 Earnings Conference Call. 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 upon management's beliefs and expectations only as of the date of this teleconference, March 9, 2022. 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 Tricordo'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 online in the investor section of the company's website, www.tricorah.com. At this time, I'd like to turn the call over to Tricorah's President and CEO, Pat Quarles.

Hey, thank you, Jeremy. Good morning, everyone, and thank you for joining. We're pleased with our fourth quarter and four-year results, which set the stage for continued growth in 2022 and beyond. Overall, demand continues to be strong for both our specialty petrochemicals and our specialty waxes, and we expect it to remain so through 2022. Our custom processing services are also benefiting from the favorable demand picture, allowing us to utilize more of our productive capacity. This strong demand environment is allowing us to command favorable pricing from our customers. By the end of December, we realized $1.05 per gallon of prime product price increases versus 94 cents per gallon of natural gasoline cost increases for the year. For waxes, we achieved 23 cents per per pound of increases by the end of December. The war in Ukraine is tragic, and we're feeling the impacts on our cost inputs. In the first quarter, our greatest exposure is on natural gasoline pricing, where we have seen prop prices rise from $2.15 a gallon at the end of February to $2.69 per gallon as of this past Tuesday, a $0.54 per gallon increase. We've implemented a $0.22 per pound increase at the beginning of March and have announced a further 55 cent per gallon increase effective mid-March. We expect to stay ahead of this price spike given the strong demand we see in the market. We've been successful in our organic growth initiatives and expect further revenue and profit growth in 2022. Our growth projects contributed $7 million of EBITDA in 2021. By the end of January of this year, we converted an additional four projects to commercial business which will contribute to EBITDA in 2022. With more projects advancing through the development process, our current total project count is up to 38. As you will see in our guidance, our growth program is expected to contribute profit improvement in 2022. Lastly, we're winning in the market. We've captured 95 percent of all new demand for our prime products required by the polyethylene plants starting up in 21 and 22, and 95% of the prime product demand to new poly iso plants starting up in 2022 in North America. We're already shipping two of these new facilities, have orders on the books for a third, and expect orders to the remaining two by mid-year. Our commercial successes paired with our strong balance sheet enabled our commitment to return capital to shareholders. We purchased over $11 million of shares during 2021 six and a half million dollars of which was in the fourth quarter. As of today, we have just under nine million dollars remaining on our repurchase program, which expires in June of 2023. We think our shares offer a very attractive return at current levels and intend to continue repurchasing shares under the program, subject to market conditions. I'll pass the call over to Sammy now.