Group 1 - The article provides coverage on shares of Ecovyst (ECVT), previously known as PQ Group, which was discussed in the fall of 2020 when the company sold one of its assets [1] - The investment group "Value In Corporate Events" focuses on identifying actionable ideas from major corporate events such as earnings reports, mergers and acquisitions, and IPOs, offering coverage of 10 major events monthly [1] Group 2 - The article emphasizes the importance of tracking companies through catalytic events to uncover investment opportunities [1]

Company Overview - Ecovyst Inc. (ECVT) specializes in the production and recycling of sulfuric acid, along with providing specialized catalysts and materials essential for large industrial companies [1] - The products offered by Ecovyst are utilized in heavy industry, oil refining, and chemical production sectors [1] Investment Focus - The analysis primarily targets small- to mid-cap companies, which are often overlooked by many investors, while also occasionally reviewing large-cap companies to provide a comprehensive view of the broader equity markets [1]

Core Viewpoint - Technip Energies has completed the acquisition of Advanced Materials & Catalysts (AM&C) from Ecovyst Inc., enhancing its capabilities in advanced catalysts and materials, which aligns with its disciplined growth strategy in the Technology, Products, and Services (TPS) segment [1][2]. Group 1: Acquisition Details - The acquisition strengthens Technip Energies' portfolio by expanding its advanced catalyst capabilities, contributing to recurring revenues in established markets and accelerating development in key energy transition sectors such as sustainable fuels, circular chemistry, and carbon capture [2]. - AM&C will continue to operate under its current management team, supported by dedicated R&D, production, and commercial teams across three sites in the U.S. and Europe, with 330 employees joining Technip Energies [3]. - The AM&C portfolio includes Advanced Silicas, a major supplier of silica-based materials and catalysts, and Zeolyst International, a joint venture with Shell Catalysts & Technologies focused on zeolite-based materials and catalysts for hydrocracking, sustainable fuels, and advanced recycling [3]. Group 2: Financial Impact and Strategic Importance - With over 40 years of expertise, AM&C is expected to contribute immediately to Technip Energies' results and cash flow, enhancing the Group's financial profile and opening new value creation opportunities [4]. - The CEO of Technip Energies emphasized that this acquisition marks a significant step in the company's evolution, combining advanced catalyst platforms with process technologies and engineering expertise to offer integrated solutions that improve asset efficiency and emissions performance [5]. - The integration of AM&C is anticipated to accelerate innovation and create additional value for clients, contributing to a more sustainable future [5]. Group 3: Company Overview - Technip Energies is a leading technology and engineering company, specializing in LNG, hydrogen, ethylene, sustainable chemistry, and CO2 management, contributing to strategic market developments in energy, energy derivatives, decarbonization, and circularity [6]. - The company employs over 17,000 people across 34 countries, committed to combining prosperity and sustainability for a lasting world [7]. - Technip Energies generated revenue of €6.9 billion in 2024 and is listed on Euronext Paris [8].

Core Viewpoint - Ecovyst Inc. has completed the sale of its Advanced Materials & Catalysts segment to Technip Energies, which is expected to create significant value for stockholders and enhance financial flexibility [2]. Group 1: Sale Details - The sale is expected to generate net proceeds of approximately $530 million after taxes and transaction expenses [2]. - The company plans to use $465 million of the net proceeds to pay down its Term Loan, resulting in a Net Debt Leverage Ratio below 1.5x [2][10]. Group 2: Management Commentary - Ecovyst's CEO, Kurt J. Bitting, emphasized that the sale allows the company to realize the intrinsic value of the business and supports growth strategies and capital return to stockholders [2]. - Technip Energies' CEO, Arnaud Pieton, highlighted that the acquisition will enhance their offerings by combining catalysts and advanced materials with process technologies [2]. Group 3: Financial Advisors - Lazard Frères & Co. LLC served as financial advisor to Ecovyst, while Evercore acted as financial advisor to Technip Energies [3]. - Ropes & Gray LLP and Babst, Calland, Clements and Zomnir, P.C. provided legal counsel to Ecovyst, and Gibson, Dunn & Crutcher LLP served as legal counsel to Technip Energies [3]. Group 4: Company Background - Ecovyst Inc. is a leading provider of virgin sulfuric acid, sulfuric acid regeneration services, and ex-situ catalyst activation services, contributing to environmental sustainability [4]. - The Ecoservices business of Ecovyst provides sulfuric acid recycling and high-quality virgin sulfuric acid for various industrial applications [5]. Group 5: Technip Energies Overview - Technip Energies is a global technology and engineering company with a focus on LNG, hydrogen, and sustainable chemistry, generating revenues of €6.9 billion in 2024 [6]. - The company is committed to bridging prosperity with sustainability through its diverse business segments and a workforce of over 17,000 employees [6].

Core Viewpoint - Technip Energies has completed the acquisition of the Advanced Materials & Catalysts (AM&C) business from Ecovyst Inc., enhancing its capabilities in advanced catalysts and supporting its growth strategy in sustainable energy sectors [1][2]. Group 1: Acquisition Details - The acquisition expands Technip Energies' portfolio, increasing recurring revenues and accelerating opportunities in sustainable fuels, circular chemistry, and carbon capture [2]. - The AM&C business will operate under its existing leadership and will be supported by dedicated R&D, manufacturing, and commercial teams across three facilities in the US and Europe, with 330 employees joining Technip Energies [3][4]. Group 2: Financial Impact - AM&C is expected to deliver immediate earnings and cash flow accretion, reinforcing Technip Energies' financial profile and unlocking new value-creation opportunities [4]. - The strong recurring revenue base and attractive margins of AM&C align with Technip Energies' disciplined capital allocation strategy for long-term value creation [5]. Group 3: Leadership Comments - The CEO of Technip Energies emphasized the importance of this transaction in evolving the company and creating an integrated offering that enhances efficiency and emissions performance for customers [5]. - The CEO of Ecovyst expressed confidence that Technip Energies will enhance product development and market reach for the AM&C business [5]. Group 4: Company Background - Technip Energies is a global technology and engineering powerhouse with leadership in LNG, hydrogen, ethylene, sustainable chemistry, and CO2 management, generating revenues of €6.9 billion in 2024 [6][7].

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Core Insights - Cullen Capital Management's SCCM Small Cap Value Equity Strategy reported a strong performance in Q3 2025, with a return of 14.4% gross and 14.2% net, outperforming the Russell 2000 and Russell 2000 Value indices which returned 12.4% and 12.6% respectively [1] - The positive performance was attributed to Fed rate cuts, economic resilience, and increased investor risk appetite [1] Company Highlights - Ecovyst Inc. (NYSE:ECVT) was highlighted in the investor letter, showing a one-month return of 10.00% and a 52-week gain of 14.84%, with a market capitalization of $1.045 billion as of November 26, 2025 [2] - However, Ecovyst Inc. was sold during the quarter due to softening end-market demand, reduced pricing power, and lower utilization rates, which tempered confidence in earnings growth [3] - Despite its potential, Ecovyst Inc. is not among the 30 most popular stocks among hedge funds, with 36 hedge fund portfolios holding the stock at the end of Q2 2025, up from 23 in the previous quarter [3]

Financial Performance - Sales increased by $51.0 million to $204.9 million, driven by higher average selling prices and increased volume of virgin sulfuric acid [150]. - Gross profit rose by $7.0 million to $52.1 million, primarily due to higher average selling prices and sales volume [151]. - Operating income increased by $0.8 million to $28.3 million, reflecting higher gross profit offset by increased other operating expenses [152]. - Sales for the three months ended September 30, 2025, were $204.9 million, an increase of $51.0 million, or 33.1%, compared to $153.9 million for the same period in 2024 [154]. - Gross profit for the three months ended September 30, 2025, was $52.1 million, an increase of $7.0 million, or 15.5%, compared to $45.1 million for the same period in 2024 [156]. - Adjusted EBITDA for the three months ended September 30, 2025, was $57.5 million, an increase of $8.8 million, or 18.1%, compared to $48.7 million for the same period in 2024 [166]. - Adjusted Net Income for the three months ended September 30, 2025, was $28.6 million, compared to $22.3 million for the same period in 2024, reflecting an increase of $6.3 million [169]. - Sales for the nine months ended September 30, 2025, increased by $74.7 million, or 16.6%, to $524.1 million, driven by higher average selling prices and sales volume from the acquired Waggaman location [171][174]. - Gross profit for the nine months ended September 30, 2025, decreased by $9.0 million, or 7.5%, to $111.4 million, primarily due to higher manufacturing costs and lower regeneration services volume [172][176]. - Operating income for the nine months ended September 30, 2025, decreased by $19.6 million, or 31.3%, to $43.1 million, attributed to decreased gross profit and increased other operating expenses [173]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $120.7 million, a decrease of $4.2 million or 3.4% compared to $124.9 million for the same period in 2024 [191]. - Ecoservices segment reported an Adjusted EBITDA of $141.9 million for the nine months ended September 30, 2025, down $4.4 million or 3.0% from $146.3 million in 2024, primarily due to lower volumes and higher manufacturing costs [191]. Tax and Income - The effective tax rate for the three months ended September 30, 2025, was 98.2%, compared to 23.7% for the same period in 2024 [162]. - Net income from continuing operations was $0.4 million for the three months ended September 30, 2025, compared to $14.8 million for the same period in 2024 [165]. - The provision for income taxes for the nine months ended September 30, 2025, was $20.0 million, with an effective tax rate of 113.4%, compared to $8.0 million and 26.4% in 2024 [185]. - Net loss from continuing operations for the nine months ended September 30, 2025, was $2.4 million, compared to net income of $22.4 million for the same period in 2024, reflecting a significant decline [189]. - The company recorded a discrete tax expense of $15.6 million related to the revaluation of deferred tax assets and liabilities during the nine months ended September 30, 2025 [187]. Expenses and Costs - Other operating expense, net for the three months ended September 30, 2025, was $8.1 million, an increase of $5.7 million compared to $2.4 million for the same period in 2024 [159]. - Interest expense, net for the three months ended September 30, 2025, was $8.4 million, an increase of $0.5 million compared to $7.9 million for the same period in 2024 [160]. - Other operating expense, net for the nine months ended September 30, 2025, was $18.5 million, an increase of $10.6 million compared to $7.9 million in 2024, driven by losses on asset disposals and transaction costs [179]. - Interest expense, net for the nine months ended September 30, 2025, was $24.8 million, a decrease of $2.3 million from $27.1 million in 2024, due to lower variable rates and reduced outstanding debt [180]. - Higher manufacturing costs were driven by additional fixed costs from the Waggaman location, general inflation, and transportation [157]. Sales and Demand - Demand for virgin sulfuric acid remained favorable across various industrial applications, supporting high refinery utilization rates [143]. - The increase in sales volume was primarily related to the contribution from the Waggaman location and higher virgin sulfuric acid sales [155]. - The increase in sales volume was partially offset by lower regeneration services due to unplanned customer downtime and maintenance activities [175]. Cash Flow and Liquidity - Net cash provided by operating activities for continuing operations was $77.5 million for the nine months ended September 30, 2025, compared to $66.0 million in 2024 [203]. - Cash and cash equivalents at the end of the period were $99.1 million, including $82.0 million from continuing operations and $17.1 million from discontinued operations [196]. - Total available liquidity as of September 30, 2025, was $184.7 million, consisting of cash and cash equivalents and availability under the ABL Facility [196]. - Cash interest paid for the nine months ended September 30, 2025, was approximately $34.6 million, down from $37.0 million in 2024 [200]. - The company had no borrowings under its revolving credit facility as of September 30, 2025, and was in compliance with all covenants under its debt agreements [196]. - The company expects ongoing requirements for debt service and capital expenditures to be funded from cash flows from operations and existing cash balances [195]. - Net cash provided by operating activities increased to $77.5 million for the nine months ended September 30, 2025, up from $66.0 million in the same period of 2024, primarily due to higher earnings exclusive of non-cash expenses [204]. - Net cash used in investing activities rose significantly to $92.9 million for the nine months ended September 30, 2025, compared to $43.0 million during the same period in 2024, with $51.6 million allocated for capital expenditures in 2025 [206]. - Net cash used in financing activities increased to $35.1 million for the nine months ended September 30, 2025, compared to $12.7 million in the same period of 2024, primarily due to higher stock repurchases [207]. Capital Expenditures and Debt - Total debt as of September 30, 2025, was $864.3 million, a decrease from $870.8 million as of December 31, 2024, with net debt at $782.3 million after accounting for cash and cash equivalents of $82.0 million [208]. - Maintenance capital expenditures increased to $44.6 million for the nine months ended September 30, 2025, compared to $37.7 million in the same period of 2024, due to turnaround activities [210]. - Total capital expenditures for the nine months ended September 30, 2025, were $49.7 million, up from $42.5 million in 2024 [210]. Strategic Initiatives - The company entered into a definitive agreement to sell its Advanced Materials & Catalysts business for $556.0 million, expected to close in Q1 2026 [136]. - The stock repurchase program allows for the purchase of up to $450.0 million of common stock, with $202.2 million available as of September 30, 2025 [138]. - The company repurchased 3,536,364 shares at an average price of $7.74 per share for a total of $27.4 million during the nine months ended September 30, 2025 [138]. - The company may pursue strategic acquisition or divestiture opportunities, which could impact future cash requirements [196]. Accounting and Risk Management - The company did not identify any events that would likely reduce the fair value of its reporting units or intangible assets below their carrying values during the nine months ended September 30, 2025 [213]. - The company continues to evaluate its critical accounting estimates and has not identified any material changes in accounting policies from the previous year [212]. - There have been no material changes in market risk exposures, including foreign currency exchange rate risk and interest rate risk, as discussed in the previous annual report [216].

Financial Data and Key Metrics Changes - In Q3 2025, sales from continuing operations were $205 million, an increase of $51 million or 33% year-over-year, with adjusted EBITDA rising 18% to $58 million [12][14][19] - Adjusted free cash flow for the first nine months of the year was $42 million, with expectations for full-year 2025 adjusted free cash flow increased to a range of $75-$85 million [15][19] - The anticipated net debt leverage ratio post-divestiture of the advanced materials and catalysts segment is expected to be less than 1.5 times [4][16] Business Line Data and Key Metrics Changes - The eco-services segment reported adjusted EBITDA of $64 million, up 15%, driven by sales growth from both price and volume, particularly in virgin sulfuric acid [14][19] - Regeneration services experienced lower volumes due to unplanned customer downtime, impacting overall performance [5][13] - Virgin sulfuric acid sales were strong, particularly in the mining sector, which accounted for 20%-25% of sales [7][14] Market Data and Key Metrics Changes - Demand for virgin sulfuric acid is expected to remain strong due to rising global copper demand and mining activities [7][8] - The company anticipates a favorable long-term outlook for sulfuric acid demand driven by the mining and processing of critical minerals in the U.S. [8][54] - The company is positioned to benefit from onshoring trends, which may increase demand for sulfuric acid in various industrial applications [9][54] Company Strategy and Development Direction - The company plans to focus on organic growth initiatives and pursue attractive inorganic opportunities following the divestiture of its advanced materials and catalysts segment [4][22] - An active stock repurchase program is in place, with plans to repurchase up to $20 million of stock in Q4 2025 [5][23] - The company aims to strengthen its balance sheet and liquidity position to support growth initiatives and return capital to shareholders [16][22] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the favorable demand fundamentals for the remainder of 2025 and into 2026, despite challenges from unplanned refinery outages [17][24] - The company expects to see increased regeneration volumes and contributions from positive contractual pricing in 2026 [17][24] - Management highlighted the resilience of the company in a challenging chemical industry environment, attributing it to strong customer relationships and critical product offerings [22][24] Other Important Information - The company has amended its stock repurchase plan to remove the April 2026 expiration date, allowing for continued repurchases [5] - The anticipated close of the divestiture is expected in Q1 2026, with net proceeds of approximately $530 million to be used primarily for debt reduction [4][16] Q&A Session Summary Question: Cash deployment and growth opportunities - Management indicated excitement around growth opportunities, particularly in mining, and mentioned ongoing storage and logistics expansion projects [27][28] Question: Pricing outlook for next year - Management expects continued upward pricing momentum, particularly in virgin sulfuric acid, supported by strong demand in the mining sector [29] Question: Waggaman integration and EBITDA lift - Management noted that both contract repricing and positive network effects from the Waggaman facility will contribute to EBITDA growth [32] Question: Long-term leverage targets - Management confirmed that the long-term target leverage remains at two to two and a half times, with flexibility to adjust based on capital allocation strategies [38][40] Question: Short-term demand outlook for nylon - Management expects stable demand for nylon in the near term, with confidence in long-term fundamentals [41] Question: Customer clarity on downtimes and inventory management - Management discussed the challenges of managing unexpected downtimes and emphasized the importance of ramping up virgin sulfuric acid volumes during such periods [45][46]

Forward-Looking Statements Some of the information contained in this presentation, the conference call during which this presentation is reviewed and any discussions that follow constitutes "forward- looking statements." Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "projects" and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding our b ...