Group 1 - The conference call is for Ecovyst's first quarter 2025 earnings, featuring CEO Kurt Bitting and CFO Mike Feehan [2] - The call includes forward-looking information regarding the company's financial and operational performance, strategy, and demand trends for 2025 [3] - Non-GAAP financial measures will be reconciled with GAAP measures in the earnings release and presentation materials available on the company's website [4]

Ecovyst (ECVT) Q1 2025 Earnings Call May 01, 2025 11:00 AM ET Company Participants Gene Shiels - Director of Investor RelationKurt Bitting - CEO & DirectorMike Feehan - CFOHamed Khorsand - Principal Conference Call Participants John McNulty - MD - Chemicals AnalystPatrick Cunningham - AnalystNone - AnalystDaniel Rizzo - Analyst Operator Good morning. My name is Madison, and I will be your conference operator today. Welcome to the ECOVIST First Quarter twenty twenty five Earnings Call and Webcast. Please not ...

Ecovyst (ECVT) Q1 2025 Earnings Call May 01, 2025 11:00 AM ET Company Participants Gene Shiels - Director of Investor RelationKurt Bitting - CEO & DirectorMike Feehan - CFOHamed Khorsand - Principal Conference Call Participants John McNulty - MD - Chemicals AnalystPatrick Cunningham - AnalystNone - AnalystDaniel Rizzo - Analyst Operator Good morning. My name is Madison, and I will be your conference operator today. Welcome to the ECOVIST First Quarter twenty twenty five Earnings Call and Webcast. Please not ...

Financial Data and Key Metrics Changes - The first quarter total sales were $200 million, up nearly 9% year-over-year, with Eco Services and Advanced Silicas each up 1%, and sales for the Zeolyst joint venture up 60% [22][24][30] - Adjusted EBITDA for the first quarter was $39 million, primarily driven by higher volume in the Zeolyst joint venture, but lower earnings in Eco Services due to higher planned turnaround costs [22][24] - Adjusted free cash flow for the first quarter was a use of $13 million, with expectations to generate adjusted free cash flow of $60 million to $80 million for the full year [27][30] Business Line Data and Key Metrics Changes - Eco Services sales were $143 million, up 1% compared to the prior year, with adjusted EBITDA of $29 million, down from $42 million due to higher manufacturing costs and lower sales volume related to turnaround activity [24][25] - Advanced Silicas sales were $19 million, with higher sales of niche custom catalysts offset by lower sales of advanced silicas used in polyethylene production [25][30] - The Zeolyst joint venture saw a significant increase in sales, contributing to the overall sales growth for the company [22][25] Market Data and Key Metrics Changes - The Ecoservices segment accounts for approximately 75% of total sales, with minimal exposure to tariffs due to its U.S.-centric and service-oriented nature [10][12] - The company anticipates higher sales of virgin sulfuric acid in the second half of the year driven by increased mining demand [15][30] - The outlook for polyethylene catalyst sales remains cautious due to potential tariff impacts and macroeconomic conditions [19][30] Company Strategy and Development Direction - The company is focused on opportunistic share repurchases, believing that its current valuation does not reflect the intrinsic value of the business [7][9] - The acquisition of Cornerstone sulfuric acid assets is expected to enhance the Ecoservices network and provide additional capacity [37][56] - The strategic review of the Advanced Materials and Catalysts segment is ongoing, with expectations to run through midyear [38] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding potential weaker demand in industrial end uses due to macroeconomic conditions and tariff impacts [29][35] - The company maintains its full-year guidance for adjusted EBITDA in the range of $238 million to $258 million, despite the challenges [30][36] - There is confidence in the long-term demand fundamentals for the majority of end uses served by the company [35][36] Other Important Information - The company expects to close the acquisition of Cornerstone in the second quarter, with incremental adjusted EBITDA contributions anticipated to be more material beginning in 2026 [31][37] - The company has a strong order book for hydrocracking catalyst sales, which may offset any softer sales in advanced silicas [20][36] Q&A Session Summary Question: Has there been a slowdown in polyethylene catalyst sales due to tariffs? - Management indicated that there has not been any observed slowdown related to tariffs, but they are monitoring the situation closely [43][44] Question: What are the expectations for sulfuric acid pricing? - Management noted that sulfur prices have increased due to U.S. refining turnaround work, and they expect to pass these costs through to customers [51][53] Question: What are the synergy potentials from the Cornerstone acquisition? - Management highlighted that the acquisition would enhance the sulfuric acid network, providing operational efficiencies and the ability to service customers more reliably [55][66] Question: How does the company view the demand outlook for 2025? - Management expects the demand to be back-end loaded for 2025, with strong fundamentals in their end markets despite macroeconomic uncertainties [60][62]

Company Performance - Ecovyst reported quarterly earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.03 per share, representing an earnings surprise of 133.33% [1] - The company posted revenues of $162.2 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 6.29% and showing a slight increase from $160.5 million year-over-year [2] - Over the last four quarters, Ecovyst has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [2] Stock Outlook - Ecovyst shares have declined approximately 21.7% since the beginning of the year, compared to a decline of 5.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $199.73 million, and for the current fiscal year, it is $0.61 on revenues of $772.82 million [7] - The estimate revisions trend for Ecovyst is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Chemical - Specialty industry, to which Ecovyst belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

First Quarter 2025 May 1, 2025 — 11 a.m. ET Legal Discussion 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 ...

Financial Performance - Sales for Q1 2025 were $162.2 million, a slight increase from $160.5 million in Q1 2024[4] - Net loss for Q1 2025 was $3.6 million, compared to a net income of $1.2 million in the same quarter last year, resulting in a net loss margin of 2.2%[4] - Adjusted EBITDA for Q1 2025 was $38.9 million, down from $45.5 million in Q1 2024, with an Adjusted EBITDA margin of 19.5%[4] - Operating loss for Q1 2025 was $0.9 million, a significant decline of 106.5% compared to an operating income of $13.9 million in Q1 2024[24] - Adjusted Net Income for the first quarter of 2025 was $1.6 million, compared to $7.0 million in the first quarter of 2024[31] Segment Performance - Ecoservices segment sales increased to $143.1 million in Q1 2025 from $141.6 million in Q1 2024, but Adjusted EBITDA decreased to $28.5 million from $41.5 million[5] - Advanced Materials & Catalysts segment saw sales rise to $19.1 million in Q1 2025 from $18.9 million in Q1 2024, with Adjusted EBITDA increasing to $17.5 million from $11.1 million[6] - Zeolyst Joint Venture sales surged by 60.4% to $37.7 million from $23.5 million year-over-year[33] - Ecoservices Adjusted EBITDA margin decreased to 19.9% from 29.3% year-over-year[33] - Advanced Materials & Catalysts Adjusted EBITDA increased by 57.7% to $17.5 million from $11.1 million in the previous year[33] Cash Flow and Debt - Cash flows from operating activities were $10.3 million in Q1 2025, significantly down from $36.5 million in Q1 2024[7] - Cash and cash equivalents decreased to $127.5 million from $146.0 million at the end of Q4 2024[26] - The net debt leverage ratio was 3.2x as of March 31, 2025, with total gross debt of $868.6 million[7] - The Net Debt Leverage ratio increased to 3.2x as of March 31, 2025, compared to 2.9x a year earlier[35] - Total debt as of March 31, 2025, was $868.6 million, a slight decrease from $875.3 million a year prior[35] Guidance and Outlook - The company reaffirmed its full-year 2025 Adjusted EBITDA guidance and increased sales outlook to $785 million to $845 million, up from $755 million to $815 million[10] - Adjusted Net Income for the full year 2025 is projected to be between $58 million and $85 million, with Adjusted Diluted Income per share expected to be between $0.50 and $0.70[15] Tax and Equity - The effective tax rate for Q1 2025 was 13.3%, compared to 49.1% in Q1 2024[24] - The company reported a significant increase in equity in net income from affiliated companies, which was a loss of $8.9 million in Q1 2025 compared to a loss of $2.1 million in Q1 2024, representing a 323.8% increase in losses[24] Other Financial Metrics - Cost of goods sold increased by 12.6% to $136.6 million, resulting in a gross profit of $25.6 million, down 34.7% from $39.2 million[24] - Total assets as of March 31, 2025, were $1,786.9 million, a slight decrease from $1,802.3 million at the end of 2024[26] - Total liabilities decreased to $1,088.2 million from $1,101.8 million at the end of 2024[26] - Adjusted Free Cash Flow for the first quarter of 2025 was $(13.0) million, a significant decline from $19.1 million in the same quarter of 2024[34]

Core Insights - Ecovyst Inc. reported resilient business performance in Q1 2025, with stronger-than-expected results in the Advanced Materials & Catalysts segment, while the Ecoservices segment met expectations despite challenges [3][4] - The company anticipates increased activity in its regeneration services business due to high refinery utilization and seasonal gasoline demand starting in Q2 2025 [3][4] - Ecovyst announced an agreement to acquire Cornerstone Chemical's sulfuric acid assets for $35 million, expected to close in Q2 2025, which will enhance its Gulf Coast network and capacity [3][9] Financial Performance - Q1 2025 sales were $162.2 million, a 1.1% increase from $160.5 million in Q1 2024 [9][23] - Adjusted EBITDA for Q1 2025 was $38.9 million, down from $45.5 million in Q1 2024, reflecting a decrease in the Ecoservices segment [9][32] - The Ecoservices segment reported sales of $143.1 million, up from $141.6 million in the previous year, while Adjusted EBITDA decreased to $28.5 million from $41.5 million [4][32] Segment Analysis - Advanced Materials & Catalysts segment saw sales of $19.1 million, slightly up from $18.9 million in Q1 2024, with a significant increase in Zeolyst Joint Venture sales to $37.7 million from $23.5 million [5][32] - Adjusted EBITDA for Advanced Materials & Catalysts increased to $17.5 million from $11.1 million, driven by higher sales volume in the Zeolyst Joint Venture [5][32] Cash Flow and Balance Sheet - Cash flows from operating activities were $10.3 million in Q1 2025, down from $36.5 million in Q1 2024, primarily due to timing of dividends from the Zeolyst Joint Venture [6][9] - As of March 31, 2025, the company had cash and cash equivalents of $127.5 million and total gross debt of $868.6 million, resulting in total available liquidity of $201.1 million [6][24] 2025 Financial Outlook - The company reaffirmed its full-year Adjusted EBITDA guidance and increased sales guidance due to anticipated higher sulfur costs [7][10] - Ecoservices is expected to benefit from higher sales volumes for regeneration services and virgin sulfuric acid in the second quarter and throughout 2025 [7][10] - The company anticipates significant year-over-year sales growth in the Zeolyst Joint Venture, driven by positive momentum in hydrocracking catalyst sales [7][10]

Wall Street expects a year-over-year decline in earnings on higher revenues when Ecovyst (ECVT) reports results for the quarter ended March 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on May 1, 2025, might help the stock move higher if these key numbers are better than expectations. ...

Financial Flexibility and Credit Agreement - Ecovyst Inc. announced the amendment of its existing ABL credit agreement, maintaining the facility at $100 million and extending it to April 2030 [1] - The amended facility will have an interest rate based on Term SOFR or a base rate with a margin of 1.25% - 1.75% or 0.25% - 0.75% per annum [1] - The CFO stated that this amendment is expected to enhance financial flexibility, reduce credit risk, lower borrowing costs, and improve liquidity [2] Recent Financial Adjustments - In January 2025, Ecovyst amended its Term Loan Facility, reducing the interest rate spread by 25 basis points to Term SOFR plus 2.00% per annum [2] Company Overview - Ecovyst Inc. is a global provider of advanced materials, specialty catalysts, and sulfuric acid regeneration services, focusing on sustainability [3] - The company operates two specialty businesses: Ecoservices, which provides sulfuric acid recycling and chemical waste handling, and Advanced Materials & Catalysts, which supplies finished silica catalysts and specialty zeolites [4]