Hi everyone. Good afternoon. I'm George Gianarikas, one of Canaccord's Annuity Sustainability Analysts, and we're very happy to have Aspen Aerogels with us here today. From the company are Don Young, CEO, Ricardo Rodriguez, CFO, and Neal Baranosky from Investor Relations. Gentlemen, thank you so much. Thank you. Thanks for having us. Maybe to start off, just as a softball, can you just sort of talk about what happened on your Q2 earnings report, which you, I think, reported last week? Q2. I'm trying to remember back. It was a quarter for us that was at the higher end of our expectations in terms of revenue and gross profit and adjusted EBITDA. It was also an important period for us because during the second quarter and really during the first half of the year, we modified our fixed cost structure quite markedly, such that we are in a position to be able to maintain profitability at lower revenue levels. As we see uncertainty around the EV space, we thought this was an important thing to be able to do, and we fully implemented it over the course of that period of time. It was reflected both in our Q2 performance and in our second half of the year outlook, where we basically outlined the idea of having similar revenue in the second half of the year as we did in the first half, but with twice as much EBITDA, again reflecting the cost structure changes that we made. I'd like to focus first on the energy industrial business. It was humming along incredibly well, and then over the last couple of quarters, it's an excellent business that maybe has had a little bit of a soft patch. Can you just sort of talk about maybe why that happened and the potential for that to rebound over the next several quarters? Yeah. For those who, this is a business where we provide thermal management and fire safety systems, and it's a range of end markets for us, from subsea pipelines to refineries and petrochemical plants, power stations, nuclear facilities, and more recently and importantly, LNG facilities as well. The business is broken really into two parts. One is the maintenance side of our work, day in and day out work. That tends to be very steady and grow gradually over time. 60% of our overall revenue in that segment, and then 40% is project work. For us, project work in particular is subsea pipelines and LNG facilities. We had just come off of two record-breaking years in 2023 and 2024, where we averaged about $30 million per year in the Subsea. That's up from years of being in that $5 million- $15 million range. No question, we hit a lull here in those projects and we're dropping down to the lower end of normal. We did not anticipate that as well as we probably could have or should have. What's heartening, though, is that our customers in that space, these are companies like Technip and Subsea 7, big engineering subsea engineering companies, are announcing wins in their backlog, very substantial record backlogs for them. While we don't win, not every project requires the level of thermal performance that we bring. Many projects do. We really dominate the space, I think, over the course of maybe the last 15 projects that have been awarded. We've won 14 of them. We're really strong. We have a great value proposition and a great reputation in this space. While we're in a bit of a lull right now, no question, we do believe that as we get through the year and into the new year, those wins that they're getting today will translate to wins for us again later this year and next year. The LNG side, again, we had very substantial 2024. We see excellent projects on the horizon. I think we've got just generally strong trends behind that part of the business as well. We're optimistic that that part of the business, our energy industrial business, will resume its growth in 2026. For those who aren't so familiar with the business, it's a business that we've increased the gross margin in that business from numbers like 15% and 20% to above our target of 35%. We've been in the low 40% for at least two or three recent quarters. It's a nice profitable business that we think we can grow long term, you know, 10%, 15%, 20%, 20% per year. It doesn't sound like you've lost any market share. You won 14% and 15%? I don't think so. We've gone through quite a lot, though. If you think about it, we were five quarters capacity constrained. We went through most of 2024 where we transitioned over to our external manufacturing facility, our supplemental supplier. I think there's just been a lot of transition over the course of that period of being capacity constrained and then bringing on a new supplier to help us out in that part of the market. To this point, I think one of the other things that has been accomplished in recent quarters is just significantly lowering our CapEx profile. You'll see CapEx numbers from us because we have ample supply and we have this supplemental capability, that our CapEx numbers will come down into the mid-teens, $15, $16, $17 million below depreciation and a really strong position for us from a balance sheet point of view. As that energy industrial business recovers next year, I would assume we could expect that target gross margin range of 35%. Yeah, we're very confident that we'll maintain that 35% target. Moving on to the PyroThin business, clearly have an anchor customer, so to speak, with General Motors, who appears to be going through a transition of their own right now, trying to, I guess, bob and weave with all the changes in legislation. You shared a chart in your deck where you talked about their volumes as forecasted by IHS. I think it was that they should come down next year. How should we think about the cadence of your General Motors-related volumes over the next several quarters? Yeah, definitely. Any vehicle that is going to be sold here over the next month or so has probably had to have been produced at least a month ago or two even. We see a lot of the demand from GM well in advance of when a vehicle is sold, right? Two to three months earlier. That is why we were actually pretty encouraged by the steady volumes that we're seeing from GM on the production side here in Q1 and Q2. There was a healthy increase of about 20% in volumes quarter- over- quarter from GM. We see that really holding up here in Q3, even though if you read the press, all it talks about is the $7,500 consumer tax credit that is going away. We believe that GM is going to sell into that potential boost of sales here in Q3 and then continue producing in Q4 at a steady volume. That is what's implied in our guidance in order to then restock the dealers to have enough inventory to keep selling vehicles, right? Even though the picture from a regulatory standpoint here in the U.S. around the CAFE standards, penalties for having bad emissions coming from your fleet, et cetera, with that potentially going away here, we do see GM having spent a lot of money to build 16%-0 17% market share in this space. It's getting them customers along the coasts of the U.S. that otherwise would not be purchasing an EV. That is what leads us to think that the IHS volumes could hold up and production volumes could hold up going into the fourth quarter of this year and next year. IHS does have a step down in the production numbers for next year. I think that's just more linked to, we find whenever we talk to IHS that there isn't much specific vehicle-by-vehicle thinking in terms of how they model it. It's just probably meant to reflect a broader macro view that they have of the overall new car market in the U.S., which in an environment in which interest rates decrease, hopefully here in the fall, that could bring in some additional support for the new car market. I think some of these EVs that will have a higher level of incentives than what they have today next year. It may seem like the sky is falling. Sometimes we've called when the sky was truly falling and everybody was optimistic. We actually have more reasons to believe in the resiliency of these volumes and on GM wanting to maintain this foothold that they have on the EV market. If you look at a vehicle like the Chevy Equinox, it was the number one non-Tesla EV sold in the U.S. here in July. They're obviously not going to let go of that market share gain. You've been pretty early in calling the turns, good or bad, in the EV space. Maybe we'll just hold steady, and IHS is assuming the worst. Yeah, I think so. I mean, we're all running on limited information, right? I can assure you that General Motors' numbers for the rest of this year are higher than what's implied in our guidance. They're also higher than what IHS has. I guess as time plays out, we'll see who's right. What's interesting too is that Honda has an incredibly successful EV that. Yeah, the Prologue. I mean, the Honda Prologue is right there after the Chevy Equinox as the third best-selling EV. There are some pretty attractive incentives that I think really push sales of that model in July. It'll be interesting to see to what extent there's enough inventory to support increasing sales in August and September. GM's, I forget what his title is, Kurt Kelty. Yeah. He's in charge of their. Batteries are. Batteries are, that's right. He's been in the press a lot. He talks about all the changes they're making to their architecture and different processes as it relates to their EV manufacturing. Does any of that impact you? It sounds like it's mostly good. Yeah, I mean, I think a lot of what he has presented since he joined General Motors almost a year ago. If you recall, GM had a battery day presentation at around this time last year that sometimes I get questions about it and I ask questions back and you're like, okay, this person only read the headlines and not exactly what was in the presentation. The presentation from Kurt at GM actually confirmed a hypothesis that we've been having all along around battery chemistries and form factors. It's that over the next 10 to 15 years plus, these OEMs are limited to the pouch and prismatic form factor and maybe three potential chemistries, LFP, NMC, or some variant, right? That lays out the fairway very clearly for us in terms of where we can solve thermal runaway. When we see this most recent award that we got from GM, it does not replace the original Ultima Award. It's actually supplemental volume for a small mid-size pickup truck. The chemistry on that is being confirmed as either LFP or some variant. A lot of these recent announcements are in essence around evolving GM's batteries using only those two form factors and potentially three chemistries, right? No talk of solid state coming next year, which has been in the news for 30 years, and it's been three years away for 30 years. In essence, no real technical triple somersaults that would change the requirements for us. That lays out a pretty clear commercial glide path, not just within GM, but also for all of the other OEMs as to what we need to solve for over the next 10, 15 years plus. To add, if GM's budget for all this stuff was X, with the recent policy changes, the budget to make any drastic changes or to go chase technical triple somersaults is now maybe a 0.5x or 0.7x, which tends to extend the runway of some of the existing technologies. We believe that that has the potential of extending the runway of the programs that we're on right now. You also have several OEMs that you've announced deals with or their partners. Your official timeline to start ramping those is, I think, towards the end of next year. Can you just sort of talk about that momentum, what we should expect maybe financially as those start to pick up? I also noticed that Mercedes-Benz announced a huge lineup for EVs, sort of running counter to what everyone else is doing. How does that impact you exactly? Yeah, I mean, for us, we laid out during our Q1 call what the business could look like in 2027 on the EV thermal barrier side. If you called every customer that has awarded us business and asked them, what are your expected volumes for these vehicles times Aspen's price, right? What the price that you've agreed to purchase product from Aspen at, you end up with somewhere around $700 million. Now we've learned to discount that by at least 50%. That gets you a business that's around $350 million. We do believe that other customers within the original $700 million number can drive over $200 million worth of sales. That includes Mercedes, as you mentioned, Stellantis, which we're actually launching here in Q4 of this year. That'll ramp up next year. We have Audi, Porsche, Scania, Volvo Trucks, and some others that we haven't yet announced an award with that could contribute to diversifying the revenue mix in 2027 of the EV thermal barrier business. For additional context, that $700 million sort of theoretical potential revenue number was about $1.2 billion before the election. It already reflects the OEMs' different views of the market by 2027. What the team is working on now is really just that bridge between now and then with the ramp of these other customers that I mentioned. Another company that was in the news, I think yesterday or the day before, is Ford. They seem to have built a new electric pickup that I don't have all the specs yet, but it seems interesting, price is right. Is that a potential customer over the next several quarters or years? We think so. I mean, our team has been working with Ford for over two years at this point. Our reps in Detroit are as close to Ford as they are to GM when it comes to quoting a lot of these different variations. What was announced here recently is actually very positive for us because it means that Ford is taking more control over the design of their battery pack. We believe that this program is an LFP chemistry on prismatic cells, which makes it perfectly compatible with what we do. We have a pretty low-cost solution that delivers thermal runaway protection for that type of vehicle. That is much better than, you know, the current EVs that Ford produces, like the Lightning and the Mach-E, where Ford's hands are kind of tied in terms of how much control they take over the design of that battery pack, because that's almost purchased as a turnkey battery pack from SK today. The details were not fully laid out over the last couple of days, but there's a very meaningful technical opportunity to be there in a $30,000 vehicle, which, I mean, if that doesn't make EVs popular, I don't know what would. Yeah. Yeah. I'd say the profile, the financial profile of the firm has changed over the last, you know, call it two to four quarters, where there was a big project you were planning on building, and now you've gone mostly into CapEx light mode, to your earlier point. Maybe first, how's the relationship with your partners, your international partners in production, and how should that translate into CapEx again? Is it a sustainable, you know, $15 million- $20 million, call it, over the next several years? Our relationship with our external manufacturing partner is strong. It's a relationship that very much benefits us, and it very much benefits them. That's why I believe it's a sustainable relationship and will continue to grow. They do have substantial capability to expand capacity, and we take virtually all of their products that they produce. We're focused today on our energy industrial business from that source. It has allowed us, because we have the capability to also produce those products in East Providence, we have the ability to manage our way around tariffs quite well. In essence, supplying the rest of the world from that facility and our U.S. customers from our East Providence facility. So far, it's allowed us to navigate that changing tariff landscape more or less unaffected. Is that CapEx level sustainable in the low teens? We believe so, yeah. Mid-teens, I want to say, you know, 15, 16, 17. We're spending that money on supporting the additional OEMs with our fabrication capabilities, our part-making capabilities. We think the only reason that number would be larger is because we've won more OEMs and they're growing faster. Yeah, maybe to put it in perspective, if you look at the CapEx of the plant in Rhode Island, right, which is outside of EMF, our main source for producing the aerogel, in that 2019 through 2021 timeframe, the CapEx for that facility was around $1.5 million- $2 million max. We've increased that here over the last two years to roughly $10 million- $15 million. We're at the point where there's only so much more that we could do to that facility, right? You're more likely going to see the CapEx on the plant in Rhode Island go down to the single digits level per year, which then, to Don's point, makes the bulk of the CapEx go to our plants in Mexico to tool up in order to make these prismatic cell programs. Now, the other benefit that these prismatic cell programs bring relative to what we're currently supplying GM is that we can actually share the tooling across different customers. If we were spending rough numbers, $80 million to ramp up what's shaping out to be $300 million of annual revenues with General Motors, with the tooling required to make the prismatic cells, we're probably spending $25 million of CapEx to deliver the same $300 million worth of revenues. It's a way more efficient product from a CapEx perspective and from a DNA perspective that enables, you know, better margins and more flexibility. Any questions from the audience? I have a last one. We were able to dream the dream a little bit here, going to 2026, 2027 beyond. Energy industrial has come back. General Motors has stabilized, figured out what's going on in the world. You start ramping more OEMs. You know, what sort of margin profile? We'll plug in our own revenue, you know, for those years, but what sort of margin profile does the firm have? What sort of free cash flow per share profile does the firm have? Yeah, that's an interesting question because, again, I keep thinking back to the 2027 slide and the framework that we still stand by, right? You'd have a business of, give or take, $500 million- $550 million, right? If you take $350+ what the energy industrial business could be. As Don mentioned earlier, our goal is to do everything at 35%+ gross margins, which would translate, especially on the lighter OpEx load that the company would have by that point in time, into about 25% EBITDA margins. If you look at our EBITDA, the beauty is that it'll almost have no I and no T, right? We're carrying over $300 million of net operating loss carryforwards. That's before you include the large write-down that we had in Q1 related to plant two. At that point, the net debt load on the company will be very low. At the rate that the company will be paying down the terminal, it'll have less than $50 million on it. The cash conversion will be pretty good along with the net income break-even point. Even right now, the net income break-even point is pretty close to $280 million, $290 million of revenue level. The way I like to think about it is last year we had $450 million of revenue, $90 million of EBITDA, and to produce that same $90 million of EBITDA, it's a number between $350 million and $360 million. We've meaningfully reduced our revenue requirements to maintain that level of profitability. For example, another way of thinking about it is at that same level of $450, we have EBITDA approaching the $150 million level. As long as we remain disciplined in keeping our cost structure right where it is, which we believe we can do, we have all the people and other assets in place.