Good day, everyone, and welcome to the Iaxis Alpha Virtual Best Ideas Fall Investment Conference 2025. The next presenting company is Ascent Industries Co. If you'd like to ask a question during the webcast, you can do so at any point during the presentation by clicking on the Ask Question button on the left side of your screen. Type your question into the box and hit Send to submit. I'd now like to turn the floor over to today's host, Bryan Kitchen, President and CEO of Ascent Industries Co. Sir, the floor is yours. Okay, great. Thanks, everyone. Thanks for joining in. The slides just disappeared. McKenzie. Operator, can you help me out here? Absolutely. I'm reaching out to McKenzie now. Thanks. Okay, sorry about that, everyone. Yeah, good morning, good afternoon, Bryan Kitchen, President and CEO of Ascent. I've got a lot of material to cover with you today, but I want to make sure that we reserve enough time for your questions. Let's just go ahead and jump right in. I joined the company back in the fourth quarter of 2023 with the mandate to build out and grow the specialty chemical segment within Ascent Industries Co. At the time, we had two different operating segments: specialty chemicals and stainless steel tubular assets. A few short months into that journey, I got a call from the Chairman of the Board who said, "Just kidding, could you please take over the whole company?" I was pleased to take on those additional responsibilities back, I believe, in February of 2024. Since that point in time, we've been putting the band back together, if you will. The reason why this is important is because it's been absolutely core to the transformational journey that we've been on, and it's enabled just an accelerated turnaround across the enterprise. Ryan Kavalauskas and I have worked together now for over 10 years at a couple of different stops along the way. Prior to joining Ascent, we worked for a small specialty chemical company in Charleston, West Virginia. At the time we joined that company, the company was losing about $8 million a year of adjusted EBITDA. Fast forward four, four and a half years later, at the time of sale, the company was doing roughly $36 million of adjusted EBITDA on a trailing 12 basis. That's really where we cut our teeth from a turnaround standpoint. Learned a lot along the way, and we always said if we had the opportunity to do it all over again, we would apply those learnings moving forward. That's effectively what we've been doing. Back early 2024, we did start putting the band back together. We have a number of people on the management team that we've worked with in the past that were core to the turnaround transformation at Clearon and other companies that we've worked at along the way. As you can see from the slide here, we did deliver transformational improvements inside of 2024, roughly a $20 million turnaround in adjusted EBITDA, significant improvements in gross margin, and we generated a lot of cash from continuing operations. Last year was all about stabilization. It was all about fixing the foundation. As we roll into 2025, this is really where we began to optimize the portfolio. Earlier this year, we set out on that journey, right? Actually, late last year, we set out on the journey to optimize the portfolio and really transform Ascent Industries Co. into a pure-play specialty chemical company. Back in April, early April, we transacted on a sale of one of our stainless steel holdings, followed up by another transaction in July where we sold the last remaining operational asset that we had in the portfolio. Now today, we are, in fact, a pure-play specialty chemical company. We started off 75 years ago as a pure-play specialty chemical company. We got a little bit lost along the way, but we're back, we're focused, and we're super excited about the path forward. Our strategy and business and business model are operating models all structured around chemicals as a service. This is where we meet our customers where they are, with the markets that they participate in, the products that they need, the services that they need. We come alongside them and support them in their growth journey, all across the moments that matter, areas like discovery or development, commercial and contracting, manufacturing, fulfillment, and lifecycle support. I'll get into some more of those examples here in a little bit. We're not just a specialty chemical manufacturer. We're truly a service provider. We come alongside our customers when they have technical challenges. We help them solve their technical challenges. As a result of that, we're rewarded with very sticky margin to create a business moving forward. We do the same thing for supply chain services, regulatory support, and the like. When you take a look at Ascent Industries Co. and how we differ from other classical chemical manufacturers or other classical tool manufacturers or other classical custom manufacturers, we really offer a broad suite of solutions across the entire spectrum. In many instances, classical distribution, well, they're not making product. They're typically warehousing it and they're handling logistics and maybe some aspects around regulatory support. We go much deeper than that. When and where small to mid-sized customers need formulation support, we can do that. When and where small, mid, larger sized customers need small quantities, 500 pounds up to millions of pounds, we have those install capabilities, and we're pleased to do that. Whereas other larger chemical manufacturers are really about continuous operations, maximizing the throughput, getting the absolute lowest cost, and it's all about the pounds. For us, it's all about the value. We deliver that in differentiated business models. In some instances, we sell products that solve our customers' problems. In other instances, we provide tool manufacturing services or custom manufacturing services. In some instances, we actually buy, build, and operate dedicated manufacturing facilities to support customer-specific requirements. We've been around for a long time, since 1945. We've got about 200 employees, three domestic manufacturing assets structured around the Southeast Corridor, one in Virginia, one in Tennessee, one in South Carolina, and five manufacturing plants across those three assets. Our top line is right around $80 million. We have ample runway for growth, and I'll unpack that here for you in a few minutes. We participate in an array of high-value markets, areas like HI&I or personal care and agriculture, but also other performance materials related segments, things like oil and gas and water treatment and coatings, adhesives, sealants, elastomers, and other applications. We're really laser-focused in on four primary markets: oil and gas, coatings, water treatment, and HI&I. That doesn't mean that we run away from other markets and opportunities. That just informs where we preferentially allocate our resources moving forward. When you take a look back at one of the things we did from a market sell standpoint early last year, one of the encouraging things when we came to Ascent Industries Co., we saw a company that had really good bones. We also saw a company that had a pretty interesting product portfolio, products that were effectively up on a shelf that were not being monetized and marketed. That was one of the first things we did from a commercial standpoint last year. We really breathed a little bit of life back into that portfolio, started taking that out to market while we were lifting and improving the quality of our custom manufacturing business. You can see that's had a very real material impact to the quality of our business. We drove a pretty significant increase in our product sales last year. You can see the results increase from a pricing standpoint and then followed by gross margin. We love product sales. Generally, it's more ratable, generally, it's more predictable, and generally comes at a margin premium. Also, custom manufacturing is a very important role to play in our portfolio, and it will continue to do so moving forward. Again, for us, it's all about the quality of that business, and that's what we've been working feverishly on improving over the past 18 months or so. When you take a look at our asset base, it's good news, bad news, right? Bad news is we're grossly underutilized from an absorption standpoint. Good news is we're grossly underutilized. We have tons of runway for additional growth. Today, a rough swag is we're about 50% utilized across our three manufacturing assets. That presents an opportunity for upside. The other good news is our ongoing CapEx requirements are minimal. You can see here over on the right-hand side, $1 million to $2 million a year is generally what we average to keep our plants safe, to keep our plants compliant, and to maintain operational reliability for our customers. Today we're roughly $80 million of sales. We have runway to punch that north of $120 million in the near term, and we can do that with very minimal capital requirements. We are at an inflection point, right? All of the strong work done last year and the turnaround or the transformation last year didn't stop in 2024. As we rolled into 2025, while we were working on optimizing the portfolio and becoming a pure-play specialty chemical company, we continued to drive very impactful improvements in our costs, not just our materials, but also labor and overhead. You can see we drove roughly a 24% reduction in cost in the first half of this year versus the first half of last year. You can see we also drove a pretty significant improvement in overall adjusted EBITDA. We generated roughly $56 million of proceeds from the sale of Bristol and ASCI pre-networking capital true up, and we're beginning to put those reserves into play here. I'll touch on that here in a couple of minutes. We continue to be really good stewards of working capital as well. Cash management has become very near and dear to our heart, specifically the company that we were at previously, and we've carried that mindset moving forward to Ascent. From a growth and catalyst perspective, we've got a lot going on. I mentioned earlier that we successfully divested our last two operational facilities in the stainless steel segment earlier this year. We do have one last remaining holding on the balance sheet, and that's a facility that's basically empty in Munn Hall, Pennsylvania. We've had this facility shut down back in August of 2023. Last year, we announced the sale of all of the equipment that was in that facility for roughly $2.8 million of proceeds. However, we still have the rent, the utilities, the insurance, etc., that we have been paying for. We've been working to, again, take care of this and move this off of our books. We're optimistic that that will be complete by the end of the year. As you can see on the slide, that translates to about a $2.1 million annualized EBITDA uplift along with cash, which we're super excited about. Stay tuned on that. More to come, but again, cautiously optimistic that we will have that transacted by the close of this year. Organic growth, near and dear to our heart, right? Last year, again, it was all about fixing the foundation, stabilizing as we rolled into 2025. It was all about optimizing our portfolio and beginning to unleash the organic growth engine. I'm pleased with the pipeline of activity that we have been able to build up in a relatively short period of time. Just for context, at the end of the first quarter of 2025, we had roughly $45 million of active selling projects. What I mean by selling projects, these are opportunities that are brought to us by existing or prospective customers where there's a need that they have. In order to make its way into the pipeline, we validate that either A, we have made this product in the past, or B, we have the capabilities to manufacture this product. They're very real opportunities. End of Q1, $45 million pipeline, end of Q2, we added on top of that another $25 million of selling projects. The pipeline volume continues to expand. The quality of that pipeline continues to improve. Now it's incumbent on us to get those selling projects from a project stage to actually executed and rolling through the income statement. You can see in the first half of this year, the wins that we were able to bank, roughly 77% of them came from existing customers, 23% came from new customer acquisition. You can see the financial profile on those pieces of business that we were able to land in the first half of this year. Growth never happens as quickly as we would like. When you consider the long sales cycle that we do have, that's why it's critical for us to maintain a very strong selling project pipeline and to move those projects through the process at an accelerated velocity as quickly as possible. In the first half, that sales cycle time was roughly 2.7 months. I would say that's not typical. Usually, it's a little bit longer, anywhere from three months up to 12 months, depending on the complexity of the products that we're manufacturing. It's not just about our ability to manufacture products in specification. It's all about qualifying our products and our customers' products and processes, and then in some instances, in their downstream customers' products and processes as well. We're very aware of that extended timeline, and we do everything we can to pull on the levers to help accelerate these projects through the pipeline. I am pleased with our conversion rate. It's a little bit higher than industry standard. We're roughly about 18% in the first half of this year. Generally speaking, industry standard is more in that kind of 14% range. Our organic pipeline is building. We're moving these projects through, and I'm very optimistic that as we roll into 2025, these projects are going to translate to very real and material growth for us. Simple and clear EBITDA drivers. The very simple way to kind of look at our longer-term aspirations is to think about gross margins in the range of about 35%. I think SG&A in the 15% range, and then the EBITDA in the 15% range as well. When you look at pure competitors out in the market, those ranges are quote-unquote "in market." We're not planning on a unicorn situation here. It's absolutely doable. It's within our control. We simply need to execute. In 2023, 2024, we drove some pretty nice improvements from an EBITDA standpoint. We have tremendous, as I mentioned earlier, tremendous runway for organic growth inside of our existing asset base. Now with the additional firepower we have, we have the ability to pull on inorganic growth as well. For us, it's not just about organic growth. It's not an or, it's an and. It's organic growth and very purposeful inorganic growth. We're going to be disciplined buyers. We're not going to go out and acquire something just for the sake of increasing our top line. For context, late last year, we actually had an active LOI, and we got into diligence, and it was a small transaction, less than $5 million. As we got into that, we saw some things we didn't like, and we attempted to retrade a deal, and ultimately, we couldn't come to terms, and we walked. That's okay. We're not going to do deals just for the sake of doing deals. Again, 35% gross margin, 15% SG&A. Our SG&A today is higher than that. Obviously, we need to grow into that SG&A. We've got a relatively low book of business today. We need to expand that top line very meaningfully with good quality business, and we'll grow into that SG&A and get it into kind of that 15% range. As I mentioned earlier, with the sale of the Bristol and the Ascent Industries Co. stainless steel tubular assets, we do have a fair amount of cash on hand. We have zero debt. We have roughly, at the close of the quarter, $60 million of cash. We have $30 million of debt capacity. That's $90 million of capacity to invest. What are we looking for in M&A transactions? We're going to keep it small right out of the gate and kind of scale from there because, A, we want to demonstrate to ourselves that we can extract the contemplated growth synergies and cost synergies, and then also demonstrate that to our shareholders as well. We'll scale from there. We also repurchased and retired roughly 6% of our outstanding shares in the second quarter of 2025. Again, it's not about or, it's about and for us, and we continue to execute that strategy. With that, I'm happy to take any questions that you might have. I want to be mindful that our time is limited. I want to make sure that we allocate sufficient time for your questions. Okay, so I've got a question. Is it true that an employee of the company owns over 2 million shares of stock? No, that is not true. With your specialty chemical focus now fully in place, what are the key drivers that will take you from 80 to 120 to 130 within the existing asset base? It's a great question. Again, going back to our market focus, when you take a look at the U.S. specialty chemical market, it's an enormous market, $220 billion. When you look at it through the lens of just the products that we manufacture, not the capabilities that we have, but just the products that we manufacture, it's a roughly $9 billion market. You take a look at our top line of $80 million, and you quickly realize that we have plenty of room to grow around the fringes. That $9 billion, what's that makeup look like? It's roughly 30% of that's in the coating space, 30% of that's in the HI&I space, another 20 or so, 20 to 30% is in oil and gas, and the balance is spread out across a number of other miscellaneous segments. When you look at our participation strategy and those kind of four key pillars that I mentioned earlier, that ties in very well with where the market opportunity is for us to participate, again, just through the lens of our existing products that we have in the portfolio. What are we doing about it? We're resourcing appropriately for that. We have laser focus in on those segments, and that's where we're beginning to drive growth and get just some really strong quality selling projects built up in the pipeline. This is not contingent on if I only had a new set of equipment, we could then deliver X, Y, and Z. We have the capabilities inside of the existing asset base to get us to that $120 to $130 million. Next question is, in the current pricing environment for specialty chemicals, how much pricing power do you have? Are you seeing competitive pressure from larger peers? It's interesting. One of the levers that we pulled on, one of the many levers that we pulled on last year was just that, was price, and it was to extract the appropriate value for the goods and the services that we were providing. We were very successful in doing that. In fact, in some instances, the quality of business that we had in prior years was not awesome, and it was actually dilutive to overall EBITDA. When and where we couldn't raise price, we simply walked away. You've seen the favorable impact that has had on our gross margins and EBITDA over time. We've been successful in passing along price. Certainly, we're conscious of the competitive pressures. We know we have to be market competitive, and we're executing against that. What I would say, stacking us up versus our larger peers, it's interesting because, again, our larger peers, many of them are operating continuous manufacturing plants. It's all about the pounds. It's all about the lowest cost. What that doesn't allow them to do is come alongside their customers and help them solve problems. When our phones ring and we hear from a small customer, mid-sized customer, or even a large customer and they say, "I need help," that's really a cue for us to come alongside them and help solve their problems. When we do that, we find that generally, it's the more margin-accretive opportunity for us, and it's generally going to be a stickier relationship down the road because we solve an unmet need. Looking ahead at what milestones investors should track over the next 12 to 18 months to gauge progress towards our long-term 50% adjusted EBITDA margin target, certainly, a transaction around the Munn Hall property would be one. Number two would be growth, growth, and growth from an organic standpoint. As we roll into 2026, look for upward momentum in our sales. Number three, I would look for inorganic growth opportunities to emerge as well. How much of the gross margin improvement is due to a mix shift to proprietary branded products versus better capacity utilization? What was the low point of capacity utilization, and where are you at now? What I would say is where we're at now, and I'll take this in reverse. Where we're at now is really the low point. Our utilization was a little bit higher back in the COVID days, but I think everybody's utilization was a little bit higher during the COVID days. We're basically at a new floor at this stage, and that's okay because we've demonstrated our ability to deliver a much better result for our shareholders, even in the face of lower utilization. What's driven that gross margin improvement? Yes, it was a shift to proprietary branded products. That was one component. Number two, pricing was certainly another big lever. Number three, incredible cost management, both from a labor and from an overhead perspective and from a materials perspective. When you look at the improvements that we drove last year on labor and overhead combined, it was roughly a 20% improvement versus prior year. When you look at our materials improvement that we delivered last year versus prior year, it was also roughly a 20% improvement. The folks that we brought in, as I mentioned, we put the band back together. The folks that we brought in know the drill. We give them the keys. We let them do what they do best. They've really came off the bench last year swinging or starting to have some fun. Most of the new business comes from existing customers or new customers. How do you engage with new customers? How many salespeople do you have? The answer to the first question, is it coming from existing customers or new customers? The answer is yes. Yes, both. As I mentioned earlier, our first half project wins that we banked, roughly 75% of them were with existing customers, 25% of them were with new customers. We still have enormous runway to grow a share of wallet with our existing customer base. We're going to continue to effort that. We have enormous runway for growth with new customers. One of the investments, one of the very purposeful investments we made last year recapitalizing SG&A was building up just core functions that were missing, things like marketing, right? You've seen us go out to market with a branded product portfolio, proprietary products that are engineered towards oil and gas or engineered towards HI&I or coatings and adhesive sealants, elastomers. We're doing a much better job in our go-to-market strategy and how we engage with customers. We're seeing a lot of inquiries through general outreach to our inside sales organization. We're seeing a lot of new inquiries come through from the digital domain, which has been really cool to see. Also through trade shows. We're getting our name out there. We're getting looks that we have never gotten before, and it's a very exciting place for us to be. I think I've exhausted all of our questions. Are there any other questions? It looks like we've got about a minute left here. I appreciate everyone's time. Obviously, done a lot of great work over the past 18 months or so. Stabilization, fix the foundation. We've got the right people on the bus. We've given them the keys. They're delivering incredible results. We've executed our portfolio optimization strategy. We're at the final innings of that here with the Munn Hall property. It's all about growth, growth, growth, and growth, both organic and inorganic. I appreciate everybody's time and look forward to catching up in the one-on-ones. Thank you. That concludes Ascent Industries Co.'s presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.