Trecora Resources

Thank you all for standing by, and welcome to the Tricora Resources First Quarter 2022 Earnings Conference Call. Please note that all lines will be in listen-only mode throughout the duration of today's conference call. For operator assistance during the call, you may press the star key followed by zero. Please also note that today's call is being recorded. I'll now turn the call over to your host, Jeremy Hellman. Sir, you may now begin.

Thank you, operator, and good morning, everyone. Welcome to the Tricora Resources First Quarter 2022 Earnings Conference Call. Presenting on our call today will be Pat Quarles, President and Chief Executive Officer, and Sami Ahmad, Chief Financial Officer. Before we get started, I would like to review the Safe Harbor Statement, statements in this presentation that are not historical facts or 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, May 5, 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 Takora'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. I would like to inform the Electric Core Resources intends to file a proxy statement and related proxy materials with the SEC in connection with the 2022 Annual Meeting of Stockholders and in connection there with its directors and certain of its executive officers or participants in the solicitation of proxies from our stockholders in connection with such annual meeting. Stockholders of TECORA resources are strongly encouraged to read such proxy statement and all other related materials filed with the SEC carefully and in their entirety when they become available as they will contain important information about the 2022 annual meeting. We will not comment on this call on the recent nominations made by Ortelius Advisors, LP, together with its affiliate, Pangea Ventures, LP. 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, Jeremy, and good morning, everyone. As always, we appreciate your interest in Tricora and are happy that you can join our call this morning. We are pleased with our first quarter results. We achieved $5.8 million of adjusted EBITDA for Chikora in the quarter, which exceeded our guidance. Specialty waxes had a very strong quarter due to strong wax sales volumes and margins, along with solid custom processing revenues. Global supply chain disruptions continue to support our wax price increases as competitors are constrained in their imports to the U.S. We expect that to continue. Our specialty petrochemicals business saw solid volume growth, which is something we've been speaking to for a couple quarters as three of our customers have scheduled startups of new plants this year. We began shipping to two of those plants in the first quarter. You will recall that we have contractually won 95 percent of all new prime product demand in North America coming to the market from these new builds. In addition to this organic volume growth, we continue to be able to implement price increases for solvents and have been able to get ahead of feedstock inflation. On our last call, we noted that Southampton turnaround was taking place in March, and that is now complete. The maintenance costs were around $2.8 million, which was significantly higher than we expected. The costs were higher for two reasons. Higher costs for labor and discovery of maintenance needs once we got into the units. In the first instance, We ran into a loss of contractor labor as we were competing with a larger refinery, also going into turnaround at the same time, so we had to raise our labor rates. This also cost us a few days of total project execution. In the second instance, and I put that spending into the good category, we do this preventative maintenance to avoid future issues. During our inspections, we found needed repairs in advance of any process upsets or events. Sammy will walk you through the details of the spending. Those of you who have followed us know that our wax business is normally in a sold-out position as we are able to sell all that we produce. We had strong wax feedstock deliveries in the first quarter and pulled down inventories a bit. Coupled with wax price increases and strong custom processing revenue, the segment had an excellent quarter at almost $2 million of EBITDA. We think the performance in both of our reporting segments is reflective of our strong competitive positioning in the market as a high-quality domestic supplier. Our products are used in the production of a variety of end products, the largest of which are polyethylene production and insulation systems. Both of these end uses are seeing above GDP growth due to advantage hydrocarbon costs in the U.S. and a focus on improved energy efficiency. We're optimistic that these trends will continue for some time. So, in sum, we're really pleased with where our business is as we speak with you today. We also continue to work hard at maximizing the return on our assets with an active growth program. At the end of the first quarter, we had 10 projects focused on delivering new products or entering new markets, 17 projects focused on driving asset utilization, which do not require any significant capital investment, and nine projects focused on increasing productivity and reducing costs. During the quarter, we advanced three projects from trial to execution. meaning we received revenue against those new projects. We also added six new projects to the portfolio overall. Now, let me turn it over to Sammy to discuss our quarterly results in more detail.