Good morning. My name is Nikki, and I will be your conference operator today. Welcome to the Ecovyst Second Quarter 2025 Earnings Call and Webcast. Please note that today's call is being recorded and should last for about 1 hour. I would now like to hand the conference over to Gene Shiels, Director of Investor Relations. Please proceed.

Thank you, operator. Good morning, and welcome to Ecovyst's Second Quarter 2025 Earnings Call. With me on the call this morning are Kurt Bitting, Ecovyst's Chief Executive Officer; and Mike Feehan, Ecovyst's Chief Financial Officer. Following our prepared remarks, we'll take your questions. Please note that some of the information we will share today is forward-looking information, including information about the company's financial and operating performance, strategies, our anticipated end-use demand trends, and our 2025 financial outlook. This information is subject to risks and uncertainties that could cause the actual results and the implementation of the company's plans to vary materially. Any forward-looking information shared today speaks only as of this date. These risks are discussed in the company's filings with the SEC. Reconciliations of non-GAAP financial measures mentioned in today's call with their corresponding GAAP measures can be found in our earnings release and in presentation materials posted in the Investors section of our website at ecovyst.com. I'll now turn the call over to Kurt.

Thank you, Gene, and good morning. The second quarter of 2025 was another quarter of solid performance for Ecovyst. We achieved our financial objectives, and we delivered on key initiatives that position us for future growth and unlock value for our stockholders. During the quarter, demand fundamentals across the majority of the end uses we serve remained stable. Ecoservices sales were up 14% compared to the second quarter of 2024, with favorable pricing and the addition of the Waggaman site contributing to the increase. Results for our Advanced Materials and Catalysts segment came in favorable to our expectations and our guidance range, reflecting favorable sales timing and mix. In terms of strategic objectives, during the quarter, we closed the acquisition of the sulfuric acid production assets of Cornerstone Chemical Company. Integration of the Waggaman, Louisiana site is ongoing, and we expect to realize meaningful synergies and benefits upon full integration of the site into our existing network. The Waggaman site positions us well to meet the growth needs of our customers, and I want to publicly welcome the enthusiastic and engaged Waggaman team to Ecovyst. Additionally, with our focus on delivering value for our stockholders, during the second quarter, we also repurchased 2.9 million shares of our common stock, totaling approximately $22 million. As is our usual practice, on Slide 6, we provide our latest views on demand trends and our short and longer-term outlook. As I noted earlier, demand fundamentals over the course of the second quarter were stable, and we continue to expect relative stability over the balance of the year. For Ecoservices, high refinery utilization and positive alkylate economics continue to underpin demand for our regeneration services business. We believe the outlook for virgin sulfuric acid demand also remains positive. We continue to expect a stronger second half for sales into the nylon end use, and we expect second half sales into the mining sector to benefit as expansion projects come online. For our Advanced Silicas business, while there is some uncertainty regarding the effects of ongoing global macroeconomic challenges on the demand for polyethylene, we expect that our sales of polyethylene catalysts will increase this year compared to 2024. We also look forward to the completion of the Kansas City expansion project later this year. This expansion will support growth in customer demand as their expansion projects come online in 2026 and 2027. In addition, as we look to emerging technologies that provide meaningful growth opportunities such as Advanced Silicas for biocatalysis and carbon capture applications, customer engagement remains high with a number of trial programs underway, and we expect these to translate into further sales growth in 2026. Within the Zeolyst joint venture, current orders indicate that 2025 is projected to be a strong year for hydrocracking catalyst sales. We anticipate that sales of hydrocracking catalysts will surpass 2024 levels. Regarding our catalyst technologies utilized in the production of sustainable fuels, we anticipate that sales this year will remain in line with the prior year or show a slight increase. However, the longer-term outlook is encouraging. The recently proposed RVO targets are expected to increase renewable diesel consumption in the United States from 3.3 billion gallons in 2025 to 5.6 billion gallons in 2026. Achieving the proposed 67% increase in renewable diesel usage will require the industry to operate at high utilization rates. We project that future growth in our sustainable fuels catalyst materials will be driven by increased utilization of existing capacity, new capacity expansions, and the continual replacement cycle for catalyst materials. With our advanced catalyst technologies, we believe we are well positioned to support the rising demand for both renewable diesel and sustainable aviation fuel. I'll now turn the call over to Mike, who will review our second quarter results in more detail.

Thank you, Kurt. Good morning. As a follow-up to our stronger-than-anticipated results in the first quarter, we exceeded our financial targets for the second quarter, providing for strong momentum as we move into the second half of the year. Our second quarter adjusted EBITDA was just under $56 million, coming in above the high end of our guidance range. Although unplanned and extended customer outages in the second quarter adversely affected sales volume for regeneration services, Ecoservices landed within the midpoint of our segment guidance range. For our Advanced Materials and Catalysts segment, favorable sales timing and mix helped drive more favorable results in the quarter compared to our expectations. As we look to Slide 9, I'll highlight the major components of the period-over-period change in adjusted EBITDA. Pricing, excluding the pass-through of higher sulfur costs, increased quarter-over-quarter, reflecting favorable contractual pricing for regeneration services and strong pricing for virgin sulfuric acid. The pass-through effect of higher average sulfur costs on sales was approximately $20 million, with the pass-through resulting in no material impact to adjusted EBITDA. Variable costs were favorable on product mix. Volume and customer mix were unfavorable during the quarter, driven by lower event-driven niche custom catalyst sales in advanced silicas, along with unplanned and extended customer downtime within Ecoservices, partially offset by the sales volume contribution from the Waggaman sulfuric acid assets. The remaining other component primarily represents higher manufacturing costs in Ecoservices, driven by general inflation and additional costs associated with the Waggaman acquisition, partially offset by lower turnaround costs. As we turn to our segment results on Slide 10, I'll begin with a summary of the second quarter results for Ecoservices. Ecoservices sales were $176 million, up $22 million compared to the prior year. The higher sales reflect the $20 million pass-through effect of higher sulfur costs, along with favorable contractual pricing for regeneration services, strong pricing for virgin sulfuric acid, and the incremental sales contribution from the Waggaman sulfuric acid assets acquired during the second quarter. These factors were partially offset by lower regeneration services volume associated with unplanned and extended customer downtime during the quarter. Adjusted EBITDA for Ecoservices was $49.8 million, essentially unchanged compared to the second quarter of 2024 with favorable pricing and lower relative turnaround costs largely offset by lower regeneration services volume and higher anticipated manufacturing costs, driven by general inflation. Turning to Advanced Materials and Catalysts on Slide 11. Second quarter sales for advanced silicas were $24 million compared to $29 million in the year-ago quarter, with the change largely driven by lower event-driven custom catalyst sales. Sales of advanced silicas used in the production of polyethylene were essentially flat quarter-over-quarter. Our proportionate 50% share of second quarter sales for the Zeolyst joint venture was $28 million compared to $29 million in the prior year, with lower sales of hydrocracking and custom catalysts associated with order timing partially offset by higher sales of catalyst materials used in the production of sustainable fuels and other specialty catalysts. Second quarter adjusted EBITDA for the Advanced Materials and Catalysts segment was $13.7 million, above our guidance range and down slightly compared to the $14.7 million in the year-ago quarter, with the decrease largely due to lower sales volume of event-driven niche custom catalysts within advanced silicas. Turning to cash and leverage on Slide 12. Through the first 6 months, due to the timing of dividends from our Zeolyst joint venture and higher planned capital expenditures, our adjusted free cash flow was a use of $2 million compared to $14 million in 2024. In light of our expectations for the second half of the year, we have raised our guidance range for adjusted free cash flow to a range of $70 million to $80 million. The second quarter of 2025 was a quarter of unusually high cash deployment. As noted, we closed the acquisition of the Waggaman sulfuric acid assets with a total cash outlay of $41 million, including the $35 million purchase price, plus the customary working capital adjustments. And we repurchased $22 million of common stock during the quarter. As a result, we closed the second quarter with cash on hand of $69 million, down from $128 million as of March 31, 2025. Considering the lower cash balance at the end of the second quarter, our net debt leverage ratio rose to 3.5x compared to the 3.2x at the end of the prior quarter. Excluding the cash impact of the acquisition and the share repurchases, our ratio would have been 3.2x. Total liquidity at quarter-end, including availability under our ABL facility of approximately $83 million, was a healthy $152 million. As we discussed on our last call, considering our current share price and associated valuation, we continue to believe that opportunistic share repurchases are a prudent and value-enhancing use of capital. While taking a more opportunistic approach to share repurchases will likely defer near-term achievement of our target leverage ratio of 2x to 2.5x, we anticipate ending 2025 with a leverage ratio consistent with the end of the prior year of around 3x. I will now turn to our outlook for the remainder of 2025. We've had a solid start to the year with adjusted EBITDA for the first and second quarters coming in at the high end of our expectations, primarily due to favorable shifts in sales timing and mix within the Advanced Materials and Catalysts business. As we look at the balance of the year, we expect demand fundamentals across the majority of the end uses that we serve to remain stable. However, we remain mindful that demand conditions in certain industrial end uses could change, with potential areas of soft demand being our sales of advanced materials used in the production of polyethylene or sales of virgin sulfuric acid into nylon or other industrial end uses. In terms of overall guidance, with the exception of revisions in quarterly guidance associated with shifts in order timing, our expectations for the balance of the year remain largely unchanged. That said, we now expect that consolidated sales will be $795 million to $835 million, up from our previous guidance range, with the increase reflecting the incremental sales associated with the acquisition of the Waggaman sulfuric acid assets, partially offset by lower expected sales of polyethylene catalysts within advanced silicas. While our updated expectations are for lower than originally planned sales of polyethylene catalysts, we continue to expect that our advanced materials used in the production of polyethylene will continue to outpace growth in global demand, with the expected sales in 2025 reflecting year-over-year growth compared to 2024. For the Zeolyst joint venture, sales in the first half of 2025 were higher than originally anticipated due to positive shifts in sales timing, and we expect further positivity in the sales of hydrocracking catalysts. We are raising our guidance range for our 50% share of sales in the Zeolyst joint venture to a range of $125 million to $140 million, providing for additional upside to our current forecast and offsetting the softer sales of polyethylene catalysts in Advanced Silicas. For consolidated adjusted EBITDA, we are maintaining the midpoint of our previous guidance range with some minor shifts among the segments and corporate, and we are now narrowing the range to $242 million to $254 million to reflect our first half results and our expectations for the second half of 2025. This guidance does not reflect any material contribution from the Waggaman sulfuric acid assets, as we still anticipate that the sales contribution from Waggaman will largely be offset by incremental costs, including costs for integration and upgrading the facility in 2025. As mentioned earlier, we have also revised our expectations for adjusted free cash flow, narrowing the range to $70 million to $80 million and raising the midpoint by $5 million to $75 million. You will also note minor revisions in guidance for other modeling items. We have tightened and lowered the midpoint of our guidance for interest expense, which is now expected to be in the range of $46 million to $50 million. We have also increased our projection of depreciation and amortization expense, primarily related to Ecoservices, considering the addition of the Waggaman assets. Lastly, we have revised our expectations for adjusted net income and adjusted diluted income per share, while maintaining the per share midpoint of our previous guidance range. I'll now turn to specific guidance for the third quarter. We expect third quarter adjusted EBITDA for Ecoservices to fall in the range of $63 million to $69 million. For Advanced Materials and Catalysts, taking into account changes in order timing, we expect third quarter adjusted EBITDA to be in the range of $7 million to $11 million. With the assumption that unallocated corporate expenses will be approximately $8 million in the third quarter, we expect consolidated adjusted EBITDA for the third quarter to be in the range of $62 million to $72 million. On Slide 14, we provide directional guidance for the fourth quarter. For Ecoservices, stable demand fundamentals and favorable pricing are expected to continue in the fourth quarter. With the higher anticipated sales and lower expected turnaround costs, we expect segment adjusted EBITDA to be up on the order of $8 million to $12 million compared to the year-ago quarter. For Advanced Materials and Catalysts, due to shifts in sales timing between quarters, we now expect adjusted EBITDA to be in line with the fourth quarter of 2024. Comparing to the prior year, we expect strong sales of polyethylene catalysts in Advanced Silicas, along with higher sales of hydrocracking, specialty, and custom catalysts, partially offset by lower sales of sustainable fuel catalysts within the Zeolyst joint venture. Lastly, with regard to planned turnaround activity for Ecoservices, you will note that a turnaround previously planned for the third quarter of this year is now scheduled for the first quarter of 2026, along with an expected turnaround in the fourth quarter related to the Waggaman facility. I will now turn the call back to Kurt for some closing remarks.

Thank you, Mike. 2025 continues to provide a challenging operating environment for our industry, with companies in our sector facing issues that include global production overcapacity, pricing and margin pressures, and disruption related to the evolving tariff landscape. In this environment, Ecovyst has demonstrated consistent performance. Our strong results in the first half of 2025 underscore the resilience of our distinctive businesses, which we attribute to our leading supply positions, long-standing customer relationships, diverse geographic footprint, and a portfolio of technologies that are highly valued by our customers. As we continue to move into the second half of the year, we have good momentum that we believe positions us well to deliver on our full year financial objectives. We expect high refinery utilization will continue to benefit our regeneration services business, and that tailwinds and incremental demand in the mining sector will provide support for virgin sulfuric acid sales for the balance of the year. Within our Advanced Materials and Catalysts segment, we anticipate strong sales performance for hydrocracking catalysts in 2025, with projected sales exceeding those of 2024. This positive outlook is underpinned by a substantial order book and confirmed orders. We also continue to expect growth in our sales of polyethylene catalysts and supports, and we expect sales of catalysts used for sustainable fuel production to be flat to slightly up in 2025. Looking ahead, Ecovyst is well positioned to benefit from prevailing trends such as the onshoring of manufacturing, the increased need for clean fuels, and growing mining operations for metals and minerals. We believe that our differentiated customer relationships and technological capabilities will enable us to translate the positive long-term sector momentum into steady growth. Ecovyst's robust cash flow and resilient business model also enable us to further create value for our shareholders through growth investments such as the recent acquisition of the Waggaman plant, as well as by returning capital via share repurchases. Lastly, we acknowledge the significant interest in the strategic review of our Advanced Materials and Catalysts segment. As communicated previously, we anticipate the process may extend through midyear 2025. We are making steady progress and expect to remain on this timeline. We anticipate providing additional updates in the near future. At this time, I will ask the operator to open the line for questions.

We'll take our first question from Patrick Cunningham with Citi.

Just with the new EPA guidelines for increased renewable fuel volume, have you already seen initial indications from customers coming back with additional activity here? I guess, any early indications or visibility into what this might mean for volumes in 2026?

Thank you for the question, Patrick. It's still early, and what we have is a draft Renewable Volume Obligation, which needs full adoption. However, we are encouraged by the new requirements that have been established. As I mentioned earlier, there is a 67% increase projected year-over-year from 2025 to 2026, which we believe will significantly drive utilization. One challenge the industry has faced in the past year has been underutilization, primarily due to low Renewable Identification Numbers (RIN) credits and uncertainty surrounding the RVO. Increasing the RVO should promote higher utilization rates in 2026, leading to more effective use of catalysts, more change-outs, and ultimately, additional capacity being brought online. We remain optimistic about the direction this is taking.

Understood. And then, maybe just on potential outlook for polyethylene sales here, it seemed to have a mixed view with strong sales expectation, but there's some incremental caution on the trade uncertainty. How much of your year-on-year growth is tied to start-ups? And have you heard any noise on potential delays in production or pressure on operating rates as a result of the current trade environment?

No, polyethylene utilization rates have clearly been affected globally due to tariff uncertainties, a sluggish macroeconomic environment, and overcapacity in China, which continues to impact the polyethylene sector. We anticipate our sales will increase year-over-year, although they will likely not meet our earlier expectations for this year. In our Advanced Materials and Catalysts segment, sales of hydrocracking and specialty catalysts are offsetting some of the challenges. We are being cautious, as our sales this year are not necessarily driven by new units but rather our ongoing relationships with existing customers. We are also progressing with our Kansas City expansion and expect the customers benefitting from that plant expansion to come online in 2026.

Our next question comes from John McNulty with BMO Capital Markets.

So, now that you've finalized or settled on the Cornerstone business, I guess, any update in terms of how you're thinking about some of these synergies come through and the earnings opportunities, say, in 2026? I know this year, there's some integration and some costs of upgrading, et cetera. But I guess, how do you think about the contribution as we look out a year?

Yes, John, thanks for the question. As we mentioned, this year, we believe that we are going to see additional sales, of course, coming out of the acquisition, albeit kind of offset with some additional costs that we're incurring really to get that business up and running into our level of operations. For next year, we're not going to give directional or specific guidance yet, but we do believe that it is a very good acquisition for us, allowing for additional opportunities within the Gulf Coast, among the other plants that we serve, to help serve some of our customers, along with the new customers that we see. The integration of the plant is going very well. We see opportunities both at the plant locations to improve what we see there, along with looking at opportunities at our other plants as well. We also do see additional opportunities from a spot standpoint within the virgin sulfuric acid that will help us in next year as well.

Got it. Okay. Fair enough. And then, I guess, you had mentioned early on that you've got some new areas where you're doing some trials, and it looks like some of that may materialize as you look into 2026. I guess, can you give us a little bit of color as to what those trials or those pilot programs are really focused on at this point? I know you had a bunch kind of in the hopper.

Yes. In the Advanced Materials and Catalysts segment, we are seeing significant interest in biocatalysis, which is growing rapidly. The use of silicas as carriers for enzymes is also attracting attention. We have been collaborating with many customers and entering into joint development agreements to help get those products specified. Additionally, there is strong interest in advanced recycling, with customers taking pilot samples of our catalysts that are utilized in that process to reduce energy intensity and enhance product quality.

Our next question comes from David Begleiter with Deutsche Bank.

Kurt and Mike, just on the strategic review, can you remind us what you're looking at, and what are the various options on the table for this business and these assets?

Yes, as we mentioned, the review is examining a wide range of options to maximize value for our shareholders regarding the Advanced Materials and Catalysts business. This could encompass various possibilities. As we stated on the call, we are pleased with the progress so far, and we will provide more details in the near future.

Got it. And just on leverage, given the uptick in the quarter, when would you expect to get to your leverage target, assuming no M&A or other asset dispositions?

Yes. No, we definitely saw an uptick on the leverage up to 3.5x, but that was primarily due to the acquisition of the Waggaman location, along with some of the share repurchase activities, right? But if you look at our free cash flow target for the rest of the year, our expectations for the remainder of the year, the leverage ratio will come down clearly into the range that we expected for the year, likely around a 3x leverage. We're still targeting long term to be in the 2x to 2.5x range. However, we do want to ensure that we take every dollar that we're making and put it back into organic growth opportunities. And then, with the level of where our stock price is trading and the intrinsic value and long-term growth potential of the business, we still see share repurchase as an opportunistic way to create shareholder value in the future. And then, with the acquisition of the Waggaman location, we continue to see if there's options for additional bolt-on opportunities in the future.

Our next question comes from Aleksey Yefremov with KeyBanc Capital Markets.

I just wanted to follow up on the biofuels. Assuming the current proposal was approved in its current shape, right, so about 67%, as you said, RVO growth next year, how should we think about sensitivity of your business to that growth? I mean, over time, should your catalysts business also grow in that same range by, I don't know, 60%, 70%, or should it be some smaller or larger number?

Thank you for the question, Aleksey. I view the proposed RVO changes as a way to reintroduce momentum into renewable fuels, which have declined over the past year due to overcapacity and lower RIN prices. We believe that an increased RVO will enhance utilization, ultimately leading to more frequent catalyst changes and additional capacity becoming available. I don't expect the 67% increase to represent a significant year-over-year change for our business. Currently, we anticipate that we will be flat to slightly up this year, indicating some stabilization. However, we do think that the additional RVO will generate long-term momentum and contribute to growth in that segment for us, but I wouldn’t directly apply that year-over-year increase to our short-term growth rate.

Regarding sulfuric acid, I think you're anticipating some increase in nylon later this year. I understand there might be some excessive optimism there. So how much visibility do you have? Additionally, what is your outlook for mining, nylon, and other industrial applications next year, specifically for virgin sulfuric acid?

Sure. Regarding nylon, if I don’t answer your question fully, feel free to ask again. The first part of the nylon segment was a bit unclear, but our outlook for nylon this year is optimistic as we expect to see growth compared to last year, even though the overall industry remains somewhat weak. The global nylon market is currently oversupplied, but our position, as well as that of our customers in the Gulf Coast, gives us some cost advantages. Therefore, we think they will have some benefits from that. For our virgin sulfuric, we anticipate growth year-over-year, though it won't be a particularly outstanding year. In mining, there is significant momentum with several new copper projects starting up this year, which we plan to be part of. Numerous new mines are being approved, driven by the demand for copper related to data transmission, electrical conductivity, and the needs of emerging data centers, electrification, and green energy. Long-term, we see a very positive outlook in mining and are expecting a stronger second half as these new projects begin operations.

We will now proceed with Hamed Khorsand from BWS Financial.

About Waggaman, it sounds like you're still putting some investments in there. Do you have a timeline as to when it would actually contribute to free cash flow?

I mean, the free cash flow generation will follow the earnings, right? So we don't expect a significant amount of free cash flow to be generated this year. However, certainly, with the synergies and the acquisition and the size of it, we expect it to generate positively in 2026.

Okay. Do you have any pricing power in the sulfuric acid for mining that you're discussing?

I believe our mining agreements are generally not based on spot pricing. They are longer-term, though not extremely long-term, and include pricing mechanisms that allow for increases when demand rises. Overall, the increasing momentum in mining and the demand for sulfuric acid from that sector is positively impacting the pricing across the industry.

And our next question comes from Laurent Alexandre with Kaiser.

Could you provide more details on the timing of the orders and the potential implications for the rhythm of 2026? Additionally, can you discuss the polyethylene catalyst? As capacity decreases in Europe and new plants are being constructed in Asia, is there any impact on your revenue per ton of capacity? Is one situation more favorable for you than the other?

Yes. Thanks for the question. On the first one, from an order timing standpoint, the order timing that we saw earlier in the year is expected to just shift from part of the latter part of the year. So we don't expect that to be materially different for next year. We do see higher expected sales of hydrocracking catalysts this year, and that's just demand driven. So the timing that we've been discussing for the first half of the year is just between second half and first half. So no impact on 2026.

Yes. Thank you for the question, Laurent. Regarding polyethylene, there is clearly a capacity adjustment occurring in Europe. This represents a relatively minor part of our customer base. The growth we anticipate is primarily linked to the Kansas City expansion, which involves projects for North America and the Middle East. I don't believe there is a significant difference in revenue per ton; rather, the increased demand from these new sites will likely enhance our sales and volume of polyethylene catalysts and supports.

And we have no further questions in queue at this time. This does conclude the Ecovyst Second Quarter 2025 Earnings Call and Webcast. Thank you for your participation, and you may disconnect at any time.