Company Overview - Calumet, Inc. manufactures, formulates, and markets a diversified slate of specialty branded products and renewable fuels [1] - The company is headquartered in Indianapolis, Indiana and operates twelve facilities throughout North America [1] Upcoming Events - Calumet plans to attend the Goldman Sachs Energy, Clean Tech and Utilities Conference on January 6, 2026 [2] - The company will hold one-on-one investor meetings throughout the day of the conference [2]

Company Overview - Calumet generated revenue of $4.05 billion and reported a net income of -$37.20 million for the trailing twelve months [5] - The company's stock price as of Monday was $20.07, reflecting a one-year price change of -2% [5] Recent Developments - Alta Fundamental Advisers fully exited its position in Calumet by selling 459,937 shares, resulting in a net position change of $7.25 million [2][3][7] - This sale reduced Alta's stake in Calumet from approximately 3.71% of its reportable assets under management [3] Market Performance - As of the latest data, Calumet's shares were priced at $20.07, which is underperforming compared to the S&P 500, which has increased by 16% over the past year [4] Business Operations - Calumet specializes in manufacturing and marketing a range of specialty branded products, including solvents, lubricating oils, and renewable fuels [9][10] - The company serves various sectors, including industrial manufacturers, transportation, energy, and retail consumers [10] Financial Insights - Calumet recently reported a significant quarter with $313 million in net income and $92.5 million in adjusted EBITDA, driven by record margins in its Specialty Products segment [11] - Despite this positive performance, the company faces challenges such as heavy leverage, volatile cash flows, and reliance on tax credits [11][12] Strategic Positioning - Alta's exit indicates a reassessment of risk-reward dynamics, as the fund's remaining top holdings focus on sectors with clearer near-term cash visibility [12] - Calumet's stock requires sustained execution to improve its valuation, with expectations of continued volatility until renewable margins stabilize [13]

Group 1 - Calumet, Inc. plans to attend the Wells Fargo 24th Annual Energy & Power Symposium on December 10, 2025, and will hold one-on-one investor meetings throughout the day [1] - Calumet, Inc. manufactures, formulates, and markets a diversified slate of specialty branded products and renewable fuels [2] - The company is headquartered in Indianapolis, Indiana, and operates twelve facilities throughout North America [2]

Group 1 - Calumet, Inc. plans to attend the Bank of America Leveraged Finance Conference on December 2, 2025, and will hold one-on-one investor meetings throughout the day [1] - The company manufactures, formulates, and markets a diversified range of specialty branded products and renewable fuels for various consumer-facing and industrial markets [2] - Calumet is headquartered in Indianapolis, Indiana, and operates twelve facilities across North America [2] Group 2 - Calumet also announced its participation in the T.D. Cowen 2nd Annual Energy Conference in New York [3] - The company is set to attend the Bank of America Global Energy Conference in Houston [4]

Group 1 - Calumet, Inc. plans to attend the T.D. Cowen 2nd Annual Energy Conference in New York on November 18, 2025, and will hold one-on-one investor meetings throughout the day [1] - Calumet, Inc. manufactures, formulates, and markets a diversified range of specialty branded products and renewable fuels for various consumer-facing and industrial markets [2] - The company is headquartered in Indianapolis, Indiana, and operates twelve facilities across North America [2] Group 2 - Calumet, Inc. also announced plans to attend the Bank of America Global Energy Conference in Houston [3] - The company reported its results for the third quarter ended September 30, 2025 [4]

Core Insights - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] Group 1 - The analysis occasionally includes large-cap companies to provide a broader perspective on the equity markets [1]

Group 1 - Calumet, Inc. plans to attend the Bank of America Global Energy Conference in Houston on November 11, 2025, and will hold one-on-one investor meetings at the conference [1] - Calumet manufactures, formulates, and markets a diversified range of specialty branded products and renewable fuels for various consumer-facing and industrial markets [2] - The company is headquartered in Indianapolis, Indiana, and operates twelve facilities across North America [2] Group 2 - Montana Renewables, in collaboration with Calumet Montana Refining, has launched MaxSAF™ Blended, which advances sustainable aviation fuel by commissioning onsite blending and shipping facilities [4]

Core Viewpoint - Calumet's Q3 2025 earnings report caused significant stock volatility, with a brief rise of 13% followed by a decline of 6%, ultimately settling down 2.5% [1][3] Financial Performance - Calumet reported a 2% decline in sales, totaling $1.1 billion, but achieved a profit of $3.61 per share in Q3 2025, a turnaround from a loss of $1.18 per share in Q3 2024, attributed to cost reduction initiatives expected to save $80 million annually [3][4] - The company announced a restatement of Q2 financials due to misclassification in cash flow statements, which will not affect reported revenue or profits but will increase operating cash flow by approximately $80 million, enhancing free cash flow [4] Investment Considerations - The positive Q3 earnings could potentially eliminate Calumet's current $75 million free cash flow deficit, making the company free cash flow positive [5] - Despite the earnings surprise, Calumet remains unprofitable over the last 12 months, leading to caution among investors regarding stock purchases until profitability is established [6][8]

Core Viewpoint - Calumet, Inc. is positioned positively in the market with a diversified product range and strategic initiatives aimed at enhancing financial performance and growth potential [1][5]. Financial Performance - In Q2 2025, Calumet reported a net loss of $147.9 million but achieved an adjusted EBITDA of $76.5 million, indicating operational resilience [4]. - The company has successfully implemented cost reduction measures, achieving $42 million in operating cost savings year-over-year, which may enhance future profitability [4]. Market Sentiment - The stock consensus target price for Calumet has shown fluctuations, with the average price target increasing from $16.63 three months ago to $20 last month, reflecting improved analyst sentiment [2]. - A year ago, the target price was slightly higher at $20.42, suggesting some stability in the long-term outlook for the company [2]. Strategic Initiatives - Calumet's Montana Renewables subsidiary has achieved industry-leading breakeven costs and positive EBITDA, showcasing strong performance in the renewable energy sector [3]. - The company is pursuing strategic projects like the MaxSAF-150 and has secured a $782 million DOE loan, which are expected to drive significant cash flow and margin expansion by 2026 [5]. - Recent developments have contributed to a stock price increase of 12.5%, indicating positive market reception of the company's initiatives [5].

Financial Data and Key Metrics Changes - The company reported $92.5 million of adjusted EBITDA for Q3 2025, marking the strongest quarter in several years [21] - Operating costs were reduced by $24 million compared to the same quarter last year, with a year-to-date reduction of $60 million [5][21] - The company reduced its restricted group debt by over $40 million during the quarter [21] Business Line Data and Key Metrics Changes - The specialty products and solutions segment generated $80.2 million of adjusted EBITDA, with production volume gains of 8% compared to the prior year [23] - The Montana Renewables segment generated adjusted EBITDA with tax attributes of $17.1 million, an increase from $14.6 million in the prior year [26] - The performance brand segment remained flat year-over-year despite the divestment of the Royal Purple Industrial Business [25] Market Data and Key Metrics Changes - The industry saw weakness in renewable diesel margins, with realized margins lower than the normal index margin formula [9] - Biomass-based diesel production remains cut back at roughly 60% utilization, with industry production volumes stabilizing just above 350 million gallons a month [10] - European SAF prices increased approximately 60% over the past six months, indicating a tightening market [19] Company Strategy and Development Direction - The company is on track for its max SAF expansion in the first half of 2026, with approximately 75% of the expanded volume either contracted or in the final review process [12][14] - The focus remains on driving operational improvements and reducing costs per barrel, with a strategic priority on deleveraging [21][24] - The company aims to leverage its integrated model to optimize crude slate and product deals, capturing market opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the renewable diesel market, anticipating improved margins once the RVO is finalized [38] - The company is confident in its ability to navigate feedstock volatility and expects to benefit from a strong operational environment in 2026 [41] - Management highlighted the importance of regulatory clarity and the potential for increased demand in the SAF market [28][19] Other Important Information - The company successfully monetized $25 million of PTCs during the quarter, with expectations for further monetization at improving price levels [22][27] - An error in the reported Q1 and Q2 2025 cash flow statements will result in an approximate $80 million increase to cash flows from operations for the first quarter [20] Q&A Session Summary Question: What are the gating items for the max SAF expansion? - Management indicated that there are very few gating items, with some tactical constraint removals planned during the scheduled turnaround [31] Question: Can you discuss the off-take agreements for SAF? - Management stated that they are well above halfway through signing customers for the increased SAF production, with a mix of executed and in-service contracts [32][33] Question: What is the primary feedstock being used for Montana Renewables? - Management explained that they utilize a dynamic approach to feedstock, broadly using one-third vegetable oil, one-third corn oil, and one-third tallow and cooking oils [36] Question: How does the small refinery exemption impact financials? - Management noted that they have reduced their outstanding RIN obligation by over $320 million due to favorable rulings on small refinery exemptions [40] Question: What are the expectations for monetizing PTCs? - Management expects to monetize PTCs closer to 95% over time, with initial monetizations around 90% [46]