Part I [Business Overview](index=5&type=section&id=Item%201.%20Business) Ecovyst Inc. is a global provider of specialty catalysts and services, strategically divesting non-core businesses to focus on environmental sustainability products and maintain market leadership. - On August 1, 2021, the company changed its name from "PQ Group Holdings Inc." to "Ecovyst Inc." and its NYSE ticker symbol from "PQG" to "ECVT"[15](index=15&type=chunk) - Completed the sale of the Performance Chemicals business for **$1.1 billion** on August 1, 2021, and the Performance Materials business for **$650 million** on December 14, 2020, with proceeds used for debt repayment and a special cash dividend[15](index=15&type=chunk) 2021 Sales Breakdown (Including 50% of Zeolyst JV Sales) | Category | Breakdown | | :--- | :--- | | **By End Use** | | | Fuels & Emissions Controls | 46% | | Packaging & Engineered Plastics | 31% | | Industrial & Process Chemicals | 12% | | Natural Resources | 11% | | **By Geography** | | | North America | 84% | | Europe | 8% | | Asia | 5% | | Rest of World | 3% | | **By Customer** | | | Top 20 Customers | 58% | | Other Customers | 42% | 2021 Segment Financial Summary (in millions) | Segment | Sales (Millions) | % of Total Sales | Adjusted EBITDA (Millions) | % of Total Adjusted EBITDA | | :--- | :--- | :--- | :--- | :--- | | Ecoservices | $500.5 | 67.4% | $177.7 | 66.9% | | Catalyst Technologies | $110.7 | 14.9% | $88.0 | 33.1% | | Zeolite Catalyst (JV) | $131.3 | 17.7% | N/A | N/A | | **Total** | **$742.5** | **100.0%** | **$265.7** | **100.0%** | - The company holds a **1 or 2 supply share position** for products that generated over **90%** of its 2021 sales[17](index=17&type=chunk)[33](index=33&type=chunk) - As of December 31, 2021, the company had **883 employees** worldwide, with **766** in the United States, and approximately **35%** of employees were represented by a union or similar body[78](index=78&type=chunk)[163](index=163&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, financial, and strategic risks, including substantial indebtedness, customer concentration, and shareholder influence. - Business Operations Risks: The company is exposed to global economic conditions, currency fluctuations (primarily Euro and British pound), and anti-corruption laws like the FCPA due to its international operations[91](index=91&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Customer Concentration Risk: For the year ended December 31, 2021, the top ten customers represented approximately **41% of sales**, with a single customer accounting for **11% ($78.5 million)** across both the Ecoservices and Catalyst Technologies segments[105](index=105&type=chunk) - Environmental and Regulatory Risks: The business is subject to extensive environmental, health, and safety regulations (e.g., Clean Air Act, CERCLA) and potential costs related to climate change regulations and GHG emissions[113](index=113&type=chunk)[117](index=117&type=chunk) - Indebtedness Risk: As of December 31, 2021, the company had substantial indebtedness totaling approximately **$895.5 million**, which could affect financial condition and flexibility[142](index=142&type=chunk) - Common Stock and Ownership Risk: As of December 31, 2021, affiliates of CCMP and INEOS beneficially owned approximately **34%** and **18%** of outstanding common stock, respectively, giving them significant influence over key corporate decisions[147](index=147&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC. - None[168](index=168&type=chunk) [Properties](index=43&type=section&id=Item%202.%20Properties) Ecovyst's corporate headquarters are in Malvern, Pennsylvania, operating 10 manufacturing facilities across 2 countries, primarily serving the Ecoservices segment. Principal Manufacturing Facilities (as of Dec 31, 2021) | Location | Segment | | :--- | :--- | | Baton Rouge, LA, USA | Ecoservices | | Baytown, TX, USA | Ecoservices | | Dominguez, CA, USA | Ecoservices | | Delfzijl, The Netherlands | Catalyst Technologies | | Hammond, IN, USA | Ecoservices | | Houston, TX, USA | Ecoservices | | Kansas City, KS, USA | Catalyst Technologies | | Martinez, CA, USA | Ecoservices | | Orange, TX, USA | Ecoservices | | Portland, OR, USA | Ecoservices | [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various legal claims incidental to its business but currently believes no pending litigation will have a material adverse effect. - The company states that it does not believe any currently pending litigation is likely to have a material adverse effect on its business[173](index=173&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company. - Not applicable[174](index=174&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Ecovyst's common stock trades on the NYSE under "ECVT", and a special cash dividend of $3.20 per share was paid in 2021, with no current plans for regular dividends. - The company's common stock trades on the NYSE under the symbol "**ECVT**"[176](index=176&type=chunk) - A special cash dividend of **$3.20 per share** was paid on August 23, 2021, to stockholders of record as of August 12, 2021[176](index=176&type=chunk) - The company does not currently plan to pay regular dividends in the foreseeable future[176](index=176&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Ecovyst's 2021 sales and Adjusted EBITDA increased significantly due to demand recovery and strategic divestitures, impacting its financial position and debt levels. [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Sales and Adjusted EBITDA increased significantly in 2021 across both segments, driven by demand recovery, despite a net loss from discontinued operations. Consolidated Statement of Income Summary (in millions) | Metric | 2021 (Millions) | 2020 (Millions) | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $611.2 | $495.9 | 23.3% | | Gross Profit | $176.7 | $150.9 | 17.1% | | Operating Income | $54.6 | $51.6 | 5.8% | | Net Income from Continuing Operations | $1.8 | $54.3 | (96.7)% | | Net Loss from Discontinued Operations | ($141.4) | ($336.0) | (57.9)% | | Net Loss Attributable to Ecovyst Inc. | ($139.9) | ($278.8) | (49.8)% | Sales by Segment (in millions) | Segment | 2021 (Millions) | 2020 (Millions) | Change (%) | | :--- | :--- | :--- | :--- | | Ecoservices | $500.5 | $401.9 | 24.5% | | Catalyst Technologies | $110.7 | $94.0 | 17.8% | | **Total Sales** | **$611.2** | **$495.9** | **23.3%** | Adjusted EBITDA by Segment (in millions) | Segment | 2021 (Millions) | 2020 (Millions) | Change (%) | | :--- | :--- | :--- | :--- | | Ecoservices | $177.7 | $157.2 | 13.0% | | Catalyst Technologies | $88.0 | $74.5 | 18.1% | | Unallocated corporate expenses | ($38.1) | ($39.1) | (2.6)% | | **Total Adjusted EBITDA** | **$227.6** | **$192.6** | **18.2%** | [Financial Condition, Liquidity and Capital Resources](index=63&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) As of year-end 2021, Ecovyst maintained $202.2 million in liquidity with $895.5 million in total debt, while increasing capital expenditures. - Total available liquidity as of December 31, 2021 was **$202.2 million**, consisting of **$140.9 million** in cash and cash equivalents and **$61.3 million** of availability under the asset-based lending revolving credit facility[259](index=259&type=chunk) Debt Summary (in millions) | Component | Dec 31, 2021 (Millions) | Dec 31, 2020 (Millions) | | :--- | :--- | :--- | | Total Debt | $895.5 | $1,426.4 | | Net Debt | $754.6 | $1,313.0 | Cash Flow from Continuing Operations (in millions) | Activity | 2021 (Millions) | 2020 (Millions) | 2019 (Millions) | | :--- | :--- | :--- | :--- | | Operating Activities | $137.3 | $140.1 | $133.2 | | Investing Activities | $875.7 | $571.8 | ($54.6) | | Financing Activities | ($963.1) | ($720.2) | ($214.7) | - Capital expenditures for continuing operations increased to **$62.4 million** in 2021 from **$46.2 million** in 2020, as both growth and maintenance projects resumed after being delayed due to the pandemic[276](index=276&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks including foreign currency exchange, interest rates, and credit, with specific hedging strategies for variable-rate debt. - The company's main market risk exposures are foreign currency exchange, interest rate, and credit risk[292](index=292&type=chunk) - A **100 basis point** increase in interest rates on variable-rate debt would have an annual impact of approximately **$9.0 million** on interest expense[296](index=296&type=chunk) - The company uses interest rate cap agreements to hedge interest rate fluctuations, with these agreements having a fair value net asset of **$3.7 million** as of December 31, 2021[296](index=296&type=chunk) [Financial Statements and Supplementary Data](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the consolidated financial statements of Ecovyst Inc. and its subsidiaries, along with the independent auditor's report and accompanying notes. - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2021[330](index=330&type=chunk) - A critical audit matter identified was the goodwill impairment assessment for the Catalyst Technologies reporting unit, due to the significant management judgment involved in determining its fair value[334](index=334&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=75&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure. - None[298](index=298&type=chunk) [Controls and Procedures](index=76&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes. - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective[300](index=300&type=chunk) - Management's assessment, based on the COSO framework, concluded that internal control over financial reporting was effective as of December 31, 2021[301](index=301&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=77&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information required by this item is incorporated by reference from the company's 2022 Proxy Statement. - The information required by this item is incorporated by reference from the Ecovyst Inc. Proxy Statement for the 2022 Annual Meeting of Stockholders[305](index=305&type=chunk) [Executive Compensation](index=77&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item is incorporated by reference from the company's 2022 Proxy Statement. - The information required by this item is incorporated by reference from the Ecovyst Inc. Proxy Statement for the 2022 Annual Meeting of Stockholders[306](index=306&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=77&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required by this item is incorporated by reference from the company's 2022 Proxy Statement. - The information required by this item is incorporated by reference from the Ecovyst Inc. Proxy Statement for the 2022 Annual Meeting of Stockholders[307](index=307&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=77&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's 2022 Proxy Statement. - The information required by this item is incorporated by reference from the Ecovyst Inc. Proxy Statement for the 2022 Annual Meeting of Stockholders[308](index=308&type=chunk) [Principal Accountant Fees and Services](index=77&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required by this item is incorporated by reference from the company's 2022 Proxy Statement. - The information required by this item is incorporated by reference from the Ecovyst Inc. Proxy Statement for the 2022 Annual Meeting of Stockholders[309](index=309&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=78&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report. - This item lists all documents filed as part of the report, including financial statements and schedules, and an index of exhibits[312](index=312&type=chunk) [Form 10-K Summary](index=81&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates there is no Form 10-K summary. - None[317](index=317&type=chunk)

Ecovyst Inc. (NYSE:ECVT) Q4 2021 Earnings Conference Call February 25, 2022 11:00 AM ET Company Participants Belgacem Chariag – President & Chief Executive Officer Michael Feehan – Vice President & Chief Financial Officer Christopher Evans – Director of Investor Relations & Financial Communications Conference Call Participants Angel Castillo – Morgan Stanley David Begleiter – Deutsche Bank Caleb Kostynuik – BMO Capital Markets Patrick Cunningham – Citi Aleksey Yefremov – KeyBanc Laurence Alexander – Jefferi ...

Ecovyst Inc. (NYSE:ECVT) Q3 2021 Earnings Conference Call November 9, 2021 11:00 AM ET Company Participants Nahla Azmy - Vice President of Investor Relations & Financial Communications Belgacem Chariag - President & Chief Executive Officer Michael Feehan - Vice President & Chief Financial Officer Conference Call Participants John McNulty - BMO Capital Markets Angel Castillo - Morgan Stanley David Silver - CL King & Associates Operator Good morning. My name is Britney and I will be your conference operator t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38221 | --- | --- | --- | |----------------------------------------------------------------------------|- ...

PART I FINANCIAL INFORMATION This section provides the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reported a net loss in Q2 2021, with total assets decreasing, reflecting divestitures and significant debt refinancing [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Sales increased, but a net loss was incurred due to debt extinguishment costs Condensed Consolidated Statements of Income (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $146,952 | $115,641 | $273,576 | $241,195 | | **Gross Profit** | $38,473 | $34,873 | $68,592 | $72,577 | | **Operating Income** | $11,652 | $9,846 | $14,134 | $21,820 | | **Debt Extinguishment Costs** | $11,717 | $0 | $11,717 | $2,513 | | **Net (Loss) Income from Continuing Operations** | $(7,870) | $34,317 | $(10,618) | $30,970 | | **Net (Loss) Income Attributable to Ecovyst Inc.** | $(1,490) | $15,926 | $(94,125) | $16,150 | | **Diluted (Loss) Income Per Share - Continuing Operations** | $(0.06) | $0.25 | $(0.08) | $0.23 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased, reflecting divestitures, with stable debt and reduced equity Balance Sheet Highlights (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $55,757 | $114,011 | | Total current assets | $387,328 | $428,667 | | Total assets | $3,087,598 | $3,198,347 | | Long-term debt, excluding current portion | $1,395,887 | $1,400,369 | | Total liabilities | $1,882,989 | $1,921,168 | | Total Ecovyst Inc. equity | $1,205,349 | $1,277,126 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased, while investing and financing activities primarily involved acquisitions and debt refinancing Cash Flow Summary - Continuing Operations (Six Months Ended June 30, in thousands) | Category | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $37,221 | $24,303 | | **Net cash used in investing activities** | $(70,033) | $(19,862) | | **Net cash used in financing activities** | $(5,007) | $(6,731) | - The acquisition of Chem32, net of cash acquired, resulted in a cash outflow of **$41,994 thousand**[21](index=21&type=chunk) - Debt refinancing activities included the issuance of **$897.8 million** in new long-term debt and repayments of **$900.0 million**[23](index=23&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail corporate transformation, including name change, divestitures, Chem32 acquisition, and debt refinancing - The company changed its name from PQ Group Holdings Inc. to **Ecovyst Inc.** and rebranded its segments to **Ecoservices** and **Catalyst Technologies** following the sale of its Performance Chemicals business[26](index=26&type=chunk) - The Performance Materials business was sold in December 2020, and the Performance Chemicals business was sold effective August 1, 2021, with both presented as **discontinued operations** in the financial statements[26](index=26&type=chunk)[31](index=31&type=chunk)[35](index=35&type=chunk) - On March 1, 2021, the company acquired Chem32, LLC for **$44 million** in cash, which was allocated to the Ecoservices segment and resulted in **$37.6 million** of goodwill[68](index=68&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - In June 2021, the company entered into a new **$900 million** senior secured term loan facility to refinance existing debt, resulting in **$11.7 million** of debt extinguishment costs[84](index=84&type=chunk)[159](index=159&type=chunk) - Subsequent to the quarter end, on August 1, 2021, the company completed the sale of its Performance Chemicals business, used proceeds to repay debt, and declared a special cash dividend of **$3.20 per share**[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transformation, improved Q2 2021 sales and Adjusted EBITDA, and strong liquidity [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q2 2021 sales and gross profit increased, driven by Ecoservices, while six-month gross profit declined due to higher costs Sales by Segment - Three Months Ended June 30 (in millions) | Segment | 2021 | 2020 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Ecoservices | $120.8 | $90.4 | $30.4 | 33.6% | | Silica Catalysts | $26.2 | $25.2 | $1.0 | 4.0% | | **Total Sales** | **$147.0** | **$115.6** | **$31.4** | **27.2%** | Segment Adjusted EBITDA - Three Months Ended June 30 (in millions) | Segment | 2021 | 2020 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Ecoservices | $40.5 | $35.0 | $5.5 | 15.7% | | Catalyst Technologies | $20.7 | $25.3 | $(4.6) | (18.2)% | | **Total Segment Adjusted EBITDA** | **$61.2** | **$60.3** | **$0.9** | **1.5%** | - The six-month gross profit was negatively impacted by one-time repair costs related to winter storms in the Gulf region and the timing of plant 'turnaround' maintenance[186](index=186&type=chunk) - For the six months ended June 30, 2021, Catalyst Technologies' Adjusted EBITDA decreased by **18.3%** to **$39.2 million**, primarily due to lower sales volumes from the Zeolyst Joint Venture and unfavorable fixed cost absorption[199](index=199&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=52&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $162.9 million available, supported by cash and ABL facility, and refinanced its debt - Total available liquidity as of June 30, 2021, was **$162.9 million**, comprising **$55.8 million** in cash and **$107.1 million** in ABL facility availability[210](index=210&type=chunk) - In June 2021, the company refinanced its debt, entering a new **$900 million** senior secured term loan facility due 2028, and the ABL facility was amended, decreasing commitments to **$100 million** and extending maturity to 2026[217](index=217&type=chunk) Capital Expenditures - Six Months Ended June 30 (in millions) | Category | 2021 | 2020 | | :--- | :--- | :--- | | Maintenance | $19.7 | $12.1 | | Growth | $4.1 | $4.0 | | **Total** | **$23.8** | **$16.1** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks remain consistent with prior reports, with cross-currency swaps settled due to divestitures - In March 2021, the company settled its cross-currency swaps with a total notional value of **$311.4 million** as a result of the divestitures of the Performance Materials and Performance Chemicals businesses[228](index=228&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2021, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[229](index=229&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2021, that materially affected, or are reasonably likely to materially affect, internal controls[230](index=230&type=chunk) PART II OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and a list of filed exhibits [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company believes no pending legal proceedings will have a material adverse effect on its business - The company states that it does not believe any currently pending litigation will have **no material adverse effect** on its business[231](index=231&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since its last Annual Report on Form 10-K - No material changes have occurred in the company's risk factors since its Annual Report on Form 10-K[232](index=232&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Holders of restricted stock units and stock options will receive dividend equivalent payments or strike price reductions related to a special cash dividend - In connection with a special cash dividend, holders of outstanding restricted stock units and stock options will receive either a dividend equivalent payment upon vesting or a reduction in strike price[234](index=234&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists various exhibits filed with the Quarterly Report, including key agreements and officer certifications - The report includes various exhibits, such as amendments to the Stock Purchase Agreement, the new Term Loan Credit Agreement, and certifications by the CEO and CFO[236](index=236&type=chunk)

Ecovyst Inc. (NYSE:ECVT) Q2 2021 Results Conference Call August 5, 2021 11:00 AM ET Company Participants Nahla Azmy - Vice President of Investor Relations and Financial Communications Belgacem Chariag - Chairman, President and Chief Executive Officer Mike Feehan - Vice President and Chief Financial Officer Conference Call Participants David Begleiter - Deutsche Bank Angel Castillo - Morgan Stanley Aleksey Yefremov - KeyBanc Capital Markets Operator Good morning. My name is Britney, and I will be your conf ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited Q1 2021 financial statements show a net loss of **$92.6 million** due to discontinued operations, with total assets at **$3.06 billion** and operating cash flow of **$17.4 million** [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2021 sales slightly increased to **$126.6 million**, but operating income sharply declined to **$2.5 million**, resulting in a **$92.6 million** net loss due to significant discontinued operations losses Q1 2021 vs Q1 2020 Income Statement Highlights (in thousands) | Metric | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--- | :--- | :--- | | Sales | $126,624 | $125,554 | | Gross Profit | $30,119 | $37,704 | | Operating Income | $2,482 | $11,974 | | Net loss from continuing operations | ($2,748) | ($3,347) | | Net (loss) income from discontinued operations | ($89,770) | $3,856 | | Net (loss) income attributable to PQ Group Holdings Inc. | ($92,635) | $224 | | Basic loss per share | ($0.68) | $0.00 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets decreased to **$3.06 billion** from **$3.20 billion** at year-end 2020, primarily due to assets held for sale, while total equity declined to **$1.19 billion** Balance Sheet Summary (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total current assets | $369,239 | $428,667 | | Long-term assets held for sale | $1,035,418 | $1,149,443 | | Total assets | $3,063,977 | $3,198,347 | | Total current liabilities | $192,622 | $201,865 | | Long-term debt, excluding current portion | $1,401,573 | $1,400,369 | | Total liabilities | $1,877,494 | $1,921,168 | | Total equity | $1,186,483 | $1,277,179 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$17.4 million** in Q1 2021, while investing activities used **$76.6 million**, largely due to a business combination Q1 2021 vs Q1 2020 Cash Flow Summary (in thousands) | Cash Flow Category | Three months ended March 31, 2021 | Three months ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $17,423 | $4,531 | | Net cash used in investing activities | ($76,569) | ($22,198) | | Net cash (used in) provided by financing activities | ($1,978) | $58,301 | | Net change in cash, cash equivalents and restricted cash | ($63,832) | $36,371 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the pending sale of the Performance Chemicals business for **$1.1 billion** and the acquisition of Chem32, LLC for **$44.0 million**, with long-term debt remaining substantial at approximately **$1.4 billion** - On February 28, 2021, the Company entered into a definitive agreement to sell its Performance Chemicals business for **$1.1 billion**; this business is now reported as a discontinued operation, with an expected disposal loss of approximately **$95.6 million** recognized in Q1 2021[26](index=26&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - On March 1, 2021, the Company completed the acquisition of Chem32, LLC for **$44.0 million** in cash, resulting in **$37.6 million** in goodwill assigned to the Refining Services segment[63](index=63&type=chunk)[66](index=66&type=chunk)[69](index=69&type=chunk) Sales by Segment and End Use (Q1 2021 vs Q1 2020, in thousands) | Segment / End Use | Q1 2021 Sales | Q1 2020 Sales | | :--- | :--- | :--- | | **Refining Services** | **$100,222** | **$100,690** | | Fuels & emission control | $55,192 | $55,710 | | **Catalysts** | **$26,402** | **$24,864** | | Packaging & engineered plastics | $26,402 | $24,817 | | **Total Sales** | **$126,624** | **$125,554** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift from divestitures, reporting flat Q1 2021 sales at **$126.6 million**, a **20.2%** decrease in gross profit, and a **13.0%** decline in Adjusted EBITDA to **$42.3 million**, while maintaining **$160.8 million** in liquidity [Recent Developments](index=34&type=section&id=Recent%20Developments) The company completed the sale of its Performance Materials business for **$650.0 million** and entered an agreement to sell its Performance Chemicals business for **$1.1 billion**, reclassifying both as discontinued operations - Completed the sale of the Performance Materials business on December 14, 2020[119](index=119&type=chunk) - Entered into a definitive agreement on February 28, 2021, to sell the Performance Chemicals business for **$1.1 billion**[119](index=119&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q1 2021 sales increased by **0.8%** to **$126.6 million**, but gross profit fell **20.2%** to **$30.1 million**, and operating income dropped **79.0%** to **$2.5 million**, primarily due to lower volumes and higher manufacturing costs Q1 2021 vs Q1 2020 Financial Performance (in millions) | Metric | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $126.6 | $125.6 | 0.8% | | Gross Profit | $30.1 | $37.7 | (20.2)% | | Operating Income | $2.5 | $11.9 | (79.0)% | | Interest Expense, net | $10.5 | $15.3 | (31.4)% | | Net loss from continuing operations | ($2.7) | ($3.4) | (20.6)% | - Refining Services sales decreased **0.5%** due to lower volumes, with an estimated **$6.0 million** impact from freezing weather in the Gulf of Mexico, partially offset by higher pricing[135](index=135&type=chunk) - Catalysts sales increased **6.0%** primarily due to a favorable product mix of polyethylene catalysts[135](index=135&type=chunk) [Adjusted EBITDA](index=39&type=section&id=Adjusted%20EBITDA) Total Adjusted EBITDA for Q1 2021 decreased **13.0%** to **$42.3 million**, with Refining Services' Adjusted EBITDA falling **11.3%** to **$33.0 million** and Catalysts' Adjusted EBITDA decreasing **18.5%** to **$18.5 million** Segment Adjusted EBITDA (in millions) | Segment | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Refining Services | $33.0 | $37.2 | (11.3)% | | Catalysts | $18.5 | $22.7 | (18.5)% | | Total Segment Adjusted EBITDA | $51.5 | $59.9 | (14.0)% | | Unallocated corporate expenses | ($9.2) | ($11.3) | 18.6% | | **Total Adjusted EBITDA** | **$42.3** | **$48.6** | **(13.0)%** | [Financial Condition, Liquidity and Capital Resources](index=42&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company reported **$160.8 million** in total available liquidity, including **$55.2 million** in cash, with total debt at **$1.43 billion** and cash flow from continuing operations at **$16.5 million** - Total available liquidity as of March 31, 2021, was **$160.8 million**, with no borrowings under the revolving credit facility[162](index=162&type=chunk) Cash Flow Summary - Continuing Operations (in millions) | Activity | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16.5 | $11.1 | | Net cash used in investing activities | ($54.5) | ($7.6) | | Net cash (used in) provided by financing activities | ($1.5) | $52.6 | - Total debt as of March 31, 2021, was **$1,426.4 million**, with net debt of **$1,371.2 million**[174](index=174&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material changes in market risk exposures from its 2020 Annual Report, except for the settlement of cross-currency swaps in March 2021 due to ongoing divestitures - In March 2021, the company settled its cross-currency swaps with a total notional value of **$311.4 million**, paying **$13.2 million** in cash, as a result of the Performance Materials and Performance Chemicals divestitures[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2021, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[185](index=185&type=chunk) - No changes occurred during the quarter ended March 31, 2021, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[186](index=186&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal claims in the ordinary course of business but does not anticipate any pending litigation will have a material adverse effect - The company is subject to various legal claims in the ordinary course of business but currently believes no pending litigation will likely have a material adverse effect[188](index=188&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes from the risk factors described in the company's Annual Report on Form 10-K[189](index=189&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2021, the company received 98,627 shares of common stock from employees at an average price of **$14.90** per share to satisfy tax withholding obligations related to restricted stock unit vesting Shares Purchased for Tax Withholdings (Q1 2021) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 1-31, 2021 | 98,627 | $14.90 | | February 1-28, 2021 | — | — | | March 1-31, 2021 | — | — | [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including the Stock Purchase Agreement for the Performance Chemicals business divestiture and required CEO and CFO certifications - Key exhibits filed include: - Stock Purchase Agreement for the Performance Chemicals business divestiture - Certifications of the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act - Financial statements formatted in Inline XBRL[193](index=193&type=chunk)[194](index=194&type=chunk)

PQ Group Holdings Inc. (PQG) Q1 2021 Earnings Conference Call May 6, 2021 11:00 AM ET Company Participants Nahla Azmy - Vice President of Investor Relations and Financial Communications Belgacem Chariag - President & Chief Executive Officer Michael Crews - Chief Financial Officer Conference Call Participants David Begleiter - Deutsche Bank Angel Castillo - Morgan Stanley Alex Yefremov - KeyBanc Capital Markets David Silver - C.L. King Operator Good morning. My name is Catherine and I'll be your conference o ...

PART I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) PQ Group Holdings Inc. is a global provider of specialty catalysts, chemicals, and services, strategically divesting businesses and holding leading market positions - In December 2020, the company completed the sale of its Performance Materials business for **$650 million**. The results of this business are presented as discontinued operations[15](index=15&type=chunk) - In March 2021, the company entered into a definitive agreement to sell its Performance Chemicals business for **$1.1 billion**, with the transaction expected to close in 2021[15](index=15&type=chunk) - The company estimates it holds a **number one or two supply share position** for products that generated **more than 90% of its 2020 sales**[17](index=17&type=chunk)[27](index=27&type=chunk) 2020 Sales by End Use (including 50% of Zeolyst JV sales) | Key End Use | % of 2020 Sales | | :--- | :--- | | Industrial & Process Chemicals | 28% | | Fuels & Emission Controls | 26% | | Consumer Products | 19% | | Packaging & Engineered Plastics | 17% | | Natural Resources | 10% | [Our Business Segments](index=10&type=section&id=Our%20Business%20Segments) The company operates three segments: Refining Services, Catalysts, and Performance Chemicals, with Performance Chemicals leading in sales and Refining Services in Adjusted EBITDA for FY2020 2020 Financial Overview by Segment (in millions) | Segment | Sales (in millions) | % of Total Sales (incl. JV) | Adjusted EBITDA (in millions) | % of Total Adjusted EBITDA | | :--- | :--- | :--- | :--- | :--- | | Refining Services | $401.9 | 32.5% | $157.2 | 42.0% | | Catalysts (incl. 50% of JV) | $94.0 + $128.6 (JV) | 18.0% | $74.5 | 19.9% | | Performance Chemicals | $614.7 | 49.7% | $142.4 | 38.1% | | **Total** | **$1,107.4** | **100.0%** | **$338.0** | **100.0%** | - The Catalysts segment's results include a **50% interest** in the Zeolyst Joint Venture with Shell Catalysts & Technologies, which is accounted for as an equity method investment[37](index=37&type=chunk)[48](index=48&type=chunk) [Competitive Strengths and Strategy](index=7&type=section&id=Competitive%20Strengths%20and%20Strategy) The company's strategy leverages leading supply positions, innovation, and long-term customer relationships, mitigating raw material price volatility through contractual pass-through clauses and long-term 'take or pay' contracts - The company's **top ten customers** in 2020, with whom relationships average **over 50 years**, accounted for approximately **30% of sales**, with **no single customer representing more than 5%**[31](index=31&type=chunk) - In 2020, approximately **80% of Refining Services sales** and **30% of Performance Chemicals sales** were under contracts with raw material cost pass-through clauses, mitigating price volatility[32](index=32&type=chunk) - In the Refining Services segment, approximately **50% of production capacity** serves customers with staggered **five to ten-year 'take or pay' contracts**, enhancing sales and margin stability[34](index=34&type=chunk) [Human Capital, Governance, and Regulations](index=19&type=section&id=Human%20Capital%2C%20Governance%2C%20and%20Regulations) As of December 31, 2020, the company employed 2,274 people globally, with nearly half unionized, and operates under extensive environmental, health, and safety regulations worldwide - As of December 31, 2020, the company had **2,274 employees worldwide**, with 1,019 in the U.S. and more than half located internationally[81](index=81&type=chunk) - Approximately **49% of the global workforce** was represented by a union, works council, or other employee representative body as of year-end 2020[81](index=81&type=chunk)[159](index=159&type=chunk) - The company is subject to **extensive environmental laws** such as RCRA, the Clean Air Act, and CERCLA, and has ongoing remediation obligations at several current and former sites[83](index=83&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks including global economic conditions, COVID-19 impacts, foreign currency fluctuations, raw material volatility, substantial indebtedness of **$1.43 billion**, and significant shareholder influence - Business operations are exposed to global economic conditions, foreign exchange rate fluctuations (**40% of 2020 sales** were in non-USD currencies), and the ongoing impact of the COVID-19 pandemic[90](index=90&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - The company's substantial indebtedness, totaling approximately **$1.426 billion** as of December 31, 2020, could adversely affect its financial condition and flexibility[140](index=140&type=chunk) - As of December 31, 2020, major shareholders CCMP and INEOS beneficially owned approximately **45%** and **24%** of outstanding common stock, respectively, giving them significant influence over key corporate decisions[145](index=145&type=chunk) - The company faces risks from its reliance on a limited number of customers, with the **top 10 customers** representing approximately **30% of 2020 sales**[105](index=105&type=chunk) [Item 1B. Unresolved Staff Comments](index=45&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[165](index=165&type=chunk) [Item 2. Properties](index=46&type=section&id=Item%202.%20Properties) As of December 31, 2020, the company operated 40 manufacturing facilities across 13 countries on five continents, with its operating headquarters in Malvern, Pennsylvania - As of December 31, 2020, the company operated **40 manufacturing facilities** in **13 countries**, **9 administrative facilities**, and **4 research and development facilities**[167](index=167&type=chunk) [Item 3. Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings) The company is subject to various legal claims incidental to normal business operations, but management believes no pending litigation will have a material adverse effect - The company states that it does not believe any pending litigation is likely to have a material adverse effect on its business[171](index=171&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[172](index=172&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=47&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE, paid a **$1.80 per share** special dividend in December 2020, and plans another special dividend of **$2.50 to $3.25 per share** after a business sale, while not intending regular dividends - A special cash dividend of **$1.80 per share** was paid in December 2020[175](index=175&type=chunk) - The company intends to pay a special cash dividend of **$2.50 to $3.25 per share**, subject to board approval, following the close of the Performance Chemicals business sale in 2021[175](index=175&type=chunk) - During Q4 2020, the company acquired **52,733 shares** from employees to satisfy tax withholding obligations related to vested stock awards[180](index=180&type=chunk)[181](index=181&type=chunk) [Item 6. [Removed and Reserved]](index=48&type=section&id=Item%206.%20%5BRemoved%20and%20Reserved%5D) This section has been removed and reserved - Item 6, Selected Financial Data, has been removed and reserved[182](index=182&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, sales decreased **7.7%** to **$1.11 billion**, resulting in a net loss of **$278.8 million** due to a **$260.0 million** goodwill impairment, with Adjusted EBITDA decreasing **14.2%** to **$338.0 million**, while liquidity remained strong at **$238.0 million** Consolidated Financial Highlights (2020 vs. 2019) | Metric | 2020 | 2019 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales | $1,107.4M | $1,199.9M | ($92.5M) | (7.7)% | | Gross Profit | $273.4M | $298.4M | ($25.0M) | (8.4)% | | Operating (Loss) Income | ($162.9M) | $147.5M | ($310.4M) | (210.4)% | | Net (Loss) Income Attributable to PQ | ($278.8M) | $79.5M | ($358.3M) | (450.7)% | | Adjusted EBITDA | $338.0M | $393.9M | ($55.9M) | (14.2)% | - A non-cash goodwill impairment charge of **$260.0 million** was recorded for the Performance Chemicals reporting unit during the annual test on October 1, 2020[212](index=212&type=chunk) - The COVID-19 pandemic led to lower sales volume demand, particularly impacting the Refining Services segment due to reduced gasoline demand. However, demand began to recover in the second half of 2020[187](index=187&type=chunk) - As of December 31, 2020, total available liquidity was **$238.0 million**, consisting of **$135.5 million** in cash and **$102.5 million** available under the ABL revolving credit facility[270](index=270&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For 2020, sales decreased **7.7%** to **$1.11 billion**, gross profit fell, and a significant operating loss of **$162.9 million** was recorded due to a **$260.0 million** goodwill impairment, with Adjusted EBITDA declining **14.2%** to **$338.0 million** across all segments Sales by Segment (2020 vs. 2019, in millions) | Segment | 2020 Sales (in millions) | 2019 Sales (in millions) | Change (in millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Refining Services | $401.9 | $447.1 | ($45.2) | (10.1)% | | Catalysts | $94.0 | $85.7 | $8.3 | 9.7% | | Performance Chemicals | $614.7 | $670.5 | ($55.8) | (8.3)% | | **Total Sales** | **$1,107.4** | **$1,199.9** | **($92.5)** | **(7.7)%** | Adjusted EBITDA by Segment (2020 vs. 2019, in millions) | Segment | 2020 Adj. EBITDA (in millions) | 2019 Adj. EBITDA (in millions) | Change (in millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Refining Services | $157.2 | $175.6 | ($18.4) | (10.5)% | | Catalysts | $74.5 | $107.8 | ($33.3) | (30.9)% | | Performance Chemicals | $142.4 | $151.5 | ($9.1) | (6.0)% | | **Total Segment Adj. EBITDA** | **$374.1** | **$434.9** | **($60.8)** | **(14.0)%** | - Equity in net income from affiliated companies, primarily the Zeolyst Joint Venture, decreased from **$46.0 million** in 2019 to **$21.2 million** in 2020 due to timing of hydrocracking catalyst change-outs and lower demand driven by COVID-19[204](index=204&type=chunk)[214](index=214&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=70&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by cash from operations, cash on hand, and its ABL facility, with total debt at **$1.43 billion** and available liquidity at **$238.0 million** as of December 31, 2020, while capital expenditures were reduced to **$87.1 million** Cash Flow Summary - Continuing Operations (in millions) | Cash Flow Activity | 2020 (in millions) | 2019 (in millions) | 2018 (in millions) | | :--- | :--- | :--- | :--- | | Operating Activities | $205.3 | $227.7 | $213.2 | | Investing Activities | $562.3 | ($18.8) | ($98.7) | | Financing Activities | ($721.1) | ($214.9) | ($135.3) | - Total debt as of December 31, 2020 was **$1,426.4 million**, a decrease from **$1,867.5 million** at year-end 2019, largely due to repayments following the Performance Materials sale[282](index=282&type=chunk) - Capital expenditures for continuing operations were reduced to **$87.1 million** in 2020 from **$107.9 million** in 2019, with growth capital spending delayed to align with market conditions[287](index=287&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency, interest rates, and commodity prices, with **40%** of 2020 sales in non-U.S. dollar currencies and a **100 basis point** interest rate increase impacting annual interest expense by approximately **$11.3 million** - A **100 basis point** increase in interest rates on variable-rate debt would have an approximate annual impact of **$11.3 million** on interest expense[307](index=307&type=chunk) - Approximately **40%** of sales in 2020 were in currencies other than the U.S. dollar, creating foreign exchange risk. The company uses cross-currency swaps to hedge its net investment in certain Euro-denominated subsidiaries[305](index=305&type=chunk) - The company manages commodity price risk, particularly for natural gas, through contractual pass-through provisions and forward purchases[308](index=308&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=83&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section refers to the consolidated financial statements, supplementary information, and financial statement schedules of the company, which are set forth beginning on page F-1 - This item directs the reader to the detailed financial statements starting on page F-1[310](index=310&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=84&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[312](index=312&type=chunk) [Item 9A. Controls and Procedures](index=84&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2020, with an unqualified audit opinion from PricewaterhouseCoopers LLP - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[313](index=313&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2020, and this assessment was audited by PricewaterhouseCoopers LLP[314](index=314&type=chunk) [Item 9B. Other Information](index=85&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None reported[317](index=317&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=86&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[320](index=320&type=chunk) [Item 11. Executive Compensation](index=86&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[321](index=321&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=86&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the company's 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[322](index=322&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=86&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[323](index=323&type=chunk) [Item 14. Principal Accounting Fees and Services](index=86&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2021 Proxy Statement - Information is incorporated by reference from the 2021 Proxy Statement[324](index=324&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=87&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report, including key corporate and financial agreements - This item provides an index of all exhibits filed with the report, including major corporate and financial agreements[327](index=327&type=chunk) [Item 16. Form 10-K Summary](index=91&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no summary for this item - None reported[333](index=333&type=chunk)

Financial Data and Key Metrics Changes - The company achieved adjusted free cash flow of $153 million in 2020, with a high EBITDA margin of over 27% [9][15][21] - The leverage ratio improved to 3.8 times at year-end despite lower year-on-year adjusted EBITDA [21][26] Business Line Data and Key Metrics Changes - Refining Services segment reported sales of $103 million, with adjusted EBITDA of $41 million, showing a modest decline [17][18] - Silica Catalysts sales decreased by $3 million to $21 million, while Zeolyst joint venture sales fell 39% to $29 million due to deferred catalyst change outs [19] - Performance Chemicals saw a 2% increase in sales, reaching $36 million, with adjusted EBITDA up 7% [20] Market Data and Key Metrics Changes - Refining services experienced a rebound in the second half of 2020, recovering to approximately 90% of 2019 gasoline demand levels [10][11] - Virgin sulfuric acid demand from industrial and mining customers rebounded to 2019 levels by year-end [11] - Emissions control catalysts volumes began to recover near year-end, with expectations for continued improvement in 2021 [13] Company Strategy and Development Direction - The company is repositioning itself as a pure play catalyst and services growth company, focusing on higher top-line growth and expanding margins [8][28] - The strategic acquisition of Chem32 is aimed at enhancing service capabilities and diversifying offerings within the refining services sector [51][56] - The company anticipates high single-digit organic growth from 2020 to 2025, with a focus on operational efficiency and market demand [30][42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a strong recovery in the second half of 2021, driven by increased demand for transportation fuels and refinery utilization [25][45] - The anticipated sale of Performance Chemicals is expected to provide additional capital for debt reduction and shareholder returns [26][30] - The company expects adjusted EBITDA margins to improve to approximately 31% in 2021, reflecting operational efficiencies [22][23] Other Important Information - The company completed multiple debt refinancings during the year to optimize financial flexibility [15][21] - A special dividend is planned in the range of $2.50 to $3.25 per share following the sale of Performance Chemicals [26] Q&A Session Summary Question: What are the organic growth expectations by segment? - Management indicated that both business segments are expected to grow at about the same high-single-digit level [33] Question: Why is there no operating leverage in the model? - Management explained that operating leverage comes from synergies and efficiencies, particularly in refining services and catalysts [33] Question: What is the outlook for MMA sales growth? - Management noted that MMA sales are expected to accelerate due to increased frequency of change outs and new plant installations [36] Question: How will the tax rate change going forward? - Management indicated that the tax accrual rate is expected to increase toward the 30% range, reflecting complexities from discontinued operations [49] Question: Is the acquisition of Chem32 indicative of future M&A activity? - Management confirmed that Chem32 fits into the strategy of expanding service capabilities and diversifying offerings, with plans for further acquisitions [51][56]