Financial Data and Key Metrics Changes - The company reported a challenging start to the year, with Q1 results not indicative of stronger underlying performance, suggesting an underlying EBITDA potential in the mid-seventy million dollars range [6][8] - Free cash flow guidance for the year has been reaffirmed despite lower EBITDA expectations, with a focus on improving cash flow conversion [7][29] - The company experienced a $10 million impact on earnings due to unplanned plant outages and adverse timing effects related to raw material costs [8][31] Business Line Data and Key Metrics Changes - Rubber segment volumes improved by 2.5% year-over-year and 13% sequentially, benefiting from contractual mandates and operational improvements in China [32] - Specialty segment volumes improved 3% sequentially but declined 2% year-over-year, indicating choppy demand particularly in the automotive coatings market [35][36] Market Data and Key Metrics Changes - U.S. tire production was down low double-digit percentages in the first two months of the quarter, remaining significantly below pre-COVID levels [9] - The company noted that elevated tire imports into key markets continue to be a headwind for local tire manufacturing [33] Company Strategy and Development Direction - The company is positioned to benefit from the changing global trade paradigm, with tariffs expected to positively impact demand for domestic manufacturing [12][17] - A focus on operational reliability and efficiency improvements is underway, with plans to enhance maintenance and reduce equipment failures [27][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the increased likelihood of an economic recession but noted no pronounced weakening in order books at this time [7][20] - The company expects demand to improve in the second half of 2025 as tire imports are anticipated to slow and channel inventories are drawn down [15][52] Other Important Information - The company has reduced its 2025 CapEx spending expectations by $10 million, down to $150 million, reflecting a significant decrease from 2024 levels [30][39] - The company has repurchased $16 million worth of stock in Q1 and a total of $105 million since the inception of its buyback program [40] Q&A Session Summary Question: Impact of outages in Q1 - Management indicated that the $13 million impact from outages was primarily contained in Q1, with some costs related to fixed cost absorption and timing [44][48] Question: Expectations for Q2 earnings - Management expects a step-up in earnings in Q2, with the impact of lower oil prices and inventory revaluation being factored into guidance [50][52] Question: Timing of tariff benefits - Management anticipates seeing benefits from tariffs in the second half of 2025, contingent on demand recovery and inventory adjustments [56][58] Question: Specialty Black business inventory trends - Management noted that while there has been some cautious behavior from distributors, demand remains choppy rather than clear [61][62]

Financial Data and Key Metrics Changes - The company reported a challenging start to the year, with Q1 results not indicative of stronger underlying performance, masking at least $10 million of greater earnings power [7][8] - Overall plant operations have improved sequentially, contributing favorably moving forward [9] - Free cash flow guidance for the year has been reaffirmed despite lower EBITDA guidance [30][41] Business Line Data and Key Metrics Changes - Rubber segment volumes improved by 2.5% year over year and 13% sequentially, benefiting from contractual mandates and operational improvements in China [33] - Specialty segment volumes improved 3% sequentially but declined 2% year over year, with demand characterized as choppy [36] Market Data and Key Metrics Changes - U.S. tire production was down low double-digit percentages in the first two months of the quarter, remaining dramatically below pre-COVID levels [10] - The company expects a demand inflection starting in the second half of 2025 as tire imports are anticipated to slow [16][20] Company Strategy and Development Direction - The company is taking protective measures to manage costs and bolster free cash flow in light of potential economic recession [7] - The ongoing shift in global trade policies is expected to benefit the carbon black industry and the company specifically [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the increased likelihood of an economic recession but does not see a pronounced weakening in order books at this time [7] - The company is optimistic about the structural benefits from the changing trade paradigm, which should positively affect demand for manufacturing in the U.S. and Europe [14][41] Other Important Information - The company has reduced its 2025 CapEx spending expectations by $10 million, down to $150 million [30] - The company has initiated programs to improve cash flow conversion, expecting working capital to be a source of cash in 2025 [30] Q&A Session Summary Question: Impact of outages in Q1 - Management indicated that the $13 million impact from outages was primarily contained in Q1, with some costs related to fixed cost absorption and timing [46][48] Question: Expectations for Q2 earnings - Management expects a step-up in earnings in Q2, despite a negative inventory adjustment due to lower oil prices [50][54] Question: Timing of tariff benefits - Management anticipates seeing benefits from tariffs in the second half of 2025, as tire companies are expected to shift capacity to the U.S. [61][66] Question: Specialty Black business inventory drawdown - Management noted that while there is some cautiousness from distributors, demand remains choppy, with no clear trends yet [66]

Group 1 - The Bank of Canada maintains its key interest rate at 2.75%, focusing on controlling inflation and supporting economic growth amid dramatic shifts in global trade policies [1] - Inflation is projected to approach the 2% target by Q4 2024, but is expected to rise due to escalating trade conflicts and tariffs, with CPI inflation increasing from 1.9% in November 2024 to 2.3% in March 2025 [2] - Economic activity is forecasted to slow, with GDP growth estimated at 2.6% in Q4 2024 and 1.8% in Q1 2025, influenced by reduced domestic demand and trade activities [2][5] Group 2 - The labor market recovery is hindered by trade conflicts, with unemployment rising to 6.7% in March 2025 due to job contractions [2][5] - The U.S. trade policy uncertainty is negatively impacting Canada's economic growth outlook, leading to difficulties in business and household planning [5] - Core inflation remains elevated, with CPI-median and CPI-trim at 2.9% and 2.8% respectively, indicating persistent price pressures despite fluctuations in consumer prices [2][5]