Thanks for joining us today. I'm Daniel Rizzo with the Jefferies Equity Chemicals Research Team. Up next is Ecovyst. With us today is Kurt Bitting and Mike Feehan. Kurt's the CEO and Mike's the CFO. We're just gonna have a general conversation up here. It's gonna be like a fireside chat, but if there are questions from the audience, please feel free to just raise your hand, and I will definitely weave them into the conversation. So let's just start at a high level. Can you characterize the strategic transformation of Ecovyst over the past few years, and what are the two to three main strategic challenges facing the portfolio currently? Well, thanks. So Ecovyst, Mike and I have been with the company for about 17 years. There's been a couple changes in terms of name and structure. So if you wanna wind back really to 2021, we were formerly a part of the PQ Group, right? At which time, PQ divested its Potters Glass Beads business and the chemicals business, which is now operates under the name, PQ Corp. Out of that, we formed and rebranded as Ecovyst, which is the legacy Ecoservices business, as well as our Catalyst Technologies business. So we've been moving forward as Ecovyst and the new stock ticker since 2021. So in terms of the strategic challenges, I think, you know, we're, we're very unique and, you know, a great company in terms of, you know, our margin profile, high cash generation. The moats around our business are all very interesting. The challenges that we currently face is, one, is the perception of, of, you know, being completely weighted towards internal combustion engines. So while our-- some of our business segments do service that sector, particularly for regeneration and hydrocracking, we tend to participate on really the clean fuel section, where we continue to see growth well beyond the decade and certainly great markets for us to be in. We have great leadership positions. So really focusing our investors and the community on, hey, what do we do outside of just those businesses and our technologies and renewable fuels, our polyethylene technologies, our recently acquired catalyst activation, and trying to educate investors on that. The second challenge is as we mentioned, we're pretty newly formed, right, as Ecovyst. PQ was a company that had essentially been in existence since 1830, so Ecovyst is obviously only two years old. So again, educating investors on what Ecovyst does, what is Ecovyst in terms of its Ecoservices business, as well as the markets we serve and getting the word out has been a challenge for us. But again, we've got a great story to talk about. Our underlying business trend's very solid and growing. Cash generation margins are all really a standout in our space. Okay, and then what a lot of people ask, and it's. I know it's somewhat short-sighted, but they, they wanna talk about your end markets. Can you just go over where your exposure is, you know, construction, auto, industrial, at all, consumer durable, where your exposure is, and how do you see it setting up for the next, say, two to three years? Yeah. So our, if you look at the business, the Ecoservices segment, about, you know, roughly about 45% of that makes up the, regeneration, which is a service business. You know, the, the best way we like to describe it, something attuned to, more of, you know, industrial gas model, where it's servicing specific customers, service-oriented, long-term agreements, that sort of nature. Our virgin acid business, sulfuric acid is the most widely used commodity chemical in the world, so it touches a lot of different areas. And in, in those, we'd call those general industrial areas, and areas such as, like, nylon and other plastics applications. Mining is a big application, which continues to be strong. And then our Catalyst Technologies business, in terms of silica catalysts, our catalysts are used in high-density polyethylene production, which tends to obviously go into things, you know, for packaging or wire coating and so forth. So where we see those businesses shaking out over the next 2-3 years, there's some might say short-term softness in some of the plastics markets, which has been talked about a lot in the news, and particularly, I would say, as relates to China's recovery being a little slower than people have anticipated. However, the business generally is very, very diverse across the regeneration, hydrocracking, renewable fuels, as I've talked about, that those only make up a very small segment. We do see the plastics market eventually recovering, 'cause our customers generally are mostly in the Gulf Coast of the United States or in other competitive regions around the world, where they have a very good cost advantage. So we feel that they'll be, you know, competitive and do well into the future. With that business, with the polyethylene catalyst business, and I assume polypropylene too? Just polyethylene. Just polyethylene. But did you, I mean, there's been talk about, and there's been fits and starts. Do you see a lot of new polyethylene catalyst capacity coming online in the next, say, I don't know, 12-18 months? There has been a lot of polyethylene capacity put in in the last 1-2 years. The short-term outlook in 18 months, as you mentioned, there's some incremental, I guess, capacity additions in China. The next wave we see of really major capacity additions that have been announced that'll be, you know, North American or Middle Eastern-based are more in the 2026-2027 time period. So what we see in that space is we've had a very high win rate with new polyethylene units over the past few years, and we expect that to continue, where we make a very customized solution for polyethylene producers. When they're selecting where they're gonna place their unit, what products... They intend to make with their unit, we dial in basically a specific catalyst that enables them to make the plastics with those properties to service those, those end markets. So while the polyethylene market kind of chugs along at a 3% growth rate, we've been roughly able to double that just due to our high win rate with the new units and our ability to dial in specific customized catalysts for those customers. So with that in mind, with no significant new capacity really coming online in the Gulf Coast, say, in the next couple of years, and with the assumption that you know, things do eventually turn around, that would suggest that your pricing should be fairly strong as your products kinda help enhance productivity and yield. So can we just talk about how we think we should think about that, maybe over the next two to three years? Sure. I mean, well, I think the growth in the polyethylene, again, it grows at a 3%-ish type year. I—we expect that utilization rates for the recent capacity expansions will kind of... Utilization will tick up over the time period and eventually hitting with the new capacity expansions in 2026 and beyond. Our catalyst generally is a very small cost component of the overall polyethylene, you know, cost structure. So while it's—it has a very high value to that. So, our catalyst, again, is enabling the producers to make specific types of plastics for their end segments. So that business generally tends to be very sticky, where there's not a lot of turnover, because it's the catalysts take multiple years to qualify new ones in, as well as we generally have good pricing power there, where we're able to pass through cost, increases for things, you know, that we see: labor cost increases, transportation, raw materials, and so forth. So we, we feel good about our, our pricing power there just due to the really customized, solution that we offer our customers. Okay. And now, you mentioned before how people have kind of misinformed or about the threat from EV penetration. Can we just talk about regeneration services, what the demand drivers are, and really how EV could have a negative or positive effect on the segment? Sure. So, you know, we view EV penetration as, you know, still being of single digits, as a overall part of the motor fuel, or motor pool of the United States by the end of the decade. Alkylation is... alkylate, which is supported by regeneration, is the cleanest, high octane, cleanest gasoline blending component that there is. So we feel that that will be not impacted by EV, the adoptions of EVs in this, at least in this decade. The three main drivers of regeneration are really, the demand for premium gasoline and octane, trends towards clean fuels, and cleaner fuel specifications, and finally, gasoline exports. So if I go into that for real quick, if you look at what has happened to the U.S. gasoline pool over the last 10 years, there's been a transition from moving from regular gasoline to more cars that command or demand premium fuel, right? So car manufacturers, as they try to improve the efficiency of vehicles, are shrinking the size of those engines, and they're putting high compression turbocharged engines in them in order to deliver the same engine power that the consumers want. However, those vehicles require premium gasoline. Premium gasoline is made up of about 40%-50% alkylate content. A gallon of regular gasoline is made up of about 12%. So as the amount of premium fuel has increased as a share of the overall fuel here in North America, the margins for both alkylate and then premium gasoline have expanded over time. So that's evidence to those of you who go to the gasoline pump, you can see that that spread used to be $0.30-$0.50, you know, 10 years ago. It now sits at $0.80-$1.00. So that's expanded a lot. So that just is evidence of how much margin there is in additional octane that the alkylate brings to the fuel pool. So that being said, refineries, generally, inside refinery insiders refer to alkylate as called liquid gold. So they're always trying to do as much as they can to increase production of alkylate, which obviously benefits our regeneration business, which is why we feel it's, you know, it's very solid going forward. Briefly on the other two drivers, gasoline specifications. The U.S. just put in Tier 3 gasoline in 2021, lowered the low-allowable sulfur content of gasoline from 30 ppm down to 10. And what that does is it forces refineries to basically extract more sulfur and process the fuels to get that sulfur out harder. And what that does, it destroys the octane of that fuel. So in turn, the refineries have to go back and add a low sulfur, high octane component back into that gasoline, which alkylate is one of the one or two things that they can use to do that. So that's also driving higher demand. So the U.S. has put Tier 3 in, and there's similar, similar, you know, concepts going across the world to lower sulfur content to obviously lower sulfur emissions out of the tailpipes. And finally, I'll point to exports. So if you look at the EIA's projections for refinery utilization, it continues to grow through the end of the decade and beyond. And why is that? 'Cause the U.S. refining complex is the most competitive in the world, right? Low cost oil, low cost energy. About two-thirds of Ecoservices' regeneration business sits within the Gulf Coast, which is where about 90% of product exports go out of. So our customers are viewing, you know, that's those strong export markets, you know, this decade and beyond as, as continuing to support healthy refining economics, which will lead to, you know, the strength of the regeneration business. ... So you mentioned sulfur within the refineries, but can we just talk a little bit more about the structural dynamics for sulfuric acid and the outlook? We often are hearing about, at least investors are questioning us about the headwinds for refineries and the opportunities that, you know, that SAF and biodiesel production mean. So what does that mean, I guess the short question is: What does that mean for sulfuric acid as we look over the next decade? You seem to think things are intact, I think. Yeah, sure. So sulfuric acid is, you know, when we look at the Ecoservices business, the, the two main components of that business are regeneration, which I just talked about with the alkylate, and then we produce what they call virgin sulfuric acid, which we're the largest merchant sulfuric acid producer in North America. The drivers going forward of that business are generally, you know, chemical and petrochemical production that takes place in the Gulf Coast, mining production, obviously, copper, lithium, boron, all these minerals that are really going to be in super high demand going forward for electrification, not just electrification, but other green electricity. So we see the demand for sulfuric acid rising over time, which, you know, we're excited about, you know, to meet that demand with our production. In terms of refineries being impacted by renewables, renewables still make up a smaller segment of the overall refined products. You know, I think the diesel pool last year was around 2%-3% of renewable fuels. But we actually are excited about that market as well because we participate in renewable fuels through our Catalyst Technologies business, where we currently make products that go into the dewaxing side of renewable fuels, which allows, obviously, the fuels to remain liquid at colder temperatures and not freeze up. Looking beyond that, you have things to look forward to, like SAF, sustainable aviation fuel, which again, can be made with things like vegetable oils or even newer technologies, where folks are taking ethanol or methanol and converting it to jet, which we have technology to service that as well. Okay. So broadly speaking, can we just talk about what the rebound in China means for your business? I guess if it doesn't materialize for the next several quarters, how should we think about how that affects Ecovyst? Yeah. About 3% of our overall sales are to China, so it's certainly not a huge component of our overall sales. Where it can also impact is some of our customers, obviously, will export to China, especially on that plastic side, which we've called out, you know, either exporting to China or facing Chinese exports in other global markets. So not a tremendously big exposure, but we do watch it in some of the plastic segments. However, we feel that, you know, over time, those markets will grow. Our customers are largely producing their products in North America, where they have a large cost advantage. So we feel that they, you know, they'll continue to prosper long term. Then moving to sustainability initiatives, I guess what we're really thinking is: What are the opportunities created by, by sustainability? And specifically, can we just talk about catalytic pyrolysis? I think I said that right. Yes. What it means and what it is and what role Ecovyst plays. Yeah, we're. What Mike and I always love to talk about is our company is. And again, it gets back to one of the challenges I talked about earlier. People like to put us in the box of, you know, we're related to refining. We actually, interesting enough, we have a lot of technologies that are currently servicing sustainable areas that have sales right now, are generating EBITDA for us. We've got a great engine with Ecoservices to fund growth in those areas. So a couple of areas I'd like to highlight. You mentioned, first of all, we had an announcement a few months ago about plastics recycling and catalytic recycling. And what that means is currently, when you're recycling plastics, there's a few challenges, right? If you try to take this bottle and recycle it and you don't use a thermal process, you can't convert that into something that can be used for food packaging or medical or so forth. It's not going to be, not going to be clean enough. If you want to melt it down and do a thermal decomposition of that plastic, it's obviously very energy intensive. Our technology, and where catalytic pyrolysis comes in, is it helps lower the temperature that you need to melt those plastics. So one, it saves on the energy intensity and obviously any emissions that would be associated with the energy usage and so forth. But it also creates a pure pyrolysis oil, right? So that pyrolysis oil can either be used to make additional plastics of a wide, you know, wide spectrum or even actually be taken back into refineries to produce fuel. So that's where kind of the second generation of recycling is going to really come in. It's going to enable folks that are looking to recycle, to recycle wider bands of plastics at lower temperatures and make a better output product with that pyrolysis oil. A couple other areas I'd really like to highlight. Renewable fuels, we talked about. Think about, you know, renewable diesel right now, where we're taking our catalysts to allow refineries to take long carbon chains and break them down to make renewable fuels. The next generation of that is, again, looking at things like ethanol and methanol and putting shorter chains back together to make jet fuel. So there's a lot of opportunity we see in that sustainable aviation fuel. That's an area where airlines and governments have all set forth pretty aggressive targets to use that fuel, and, you know, we feel we're going to have to be right in the middle of enabling those efforts. Our silica catalysts also play into things like carbon capture. A gram of, you know, a gram of silica catalyst has the surface pore area of a football field. So you think about a structure that has a tremendous amount of pores on it that can be used to either plant metals on it or capture things. So carbon capture is another area that we're certainly excited about as well. ... So how does the IRA kind of fit in? Has it changed the timing at all? I don't know. I'm sure it's. I mean, you've kinda mentioned some of the opportunities created with SAF and things like that. But I was wondering if the IRA has had a direct impact, or do you expect one in the next few years? Yeah, the IRA directly for us, does not have an impact. We don't have any grants or anything that we, are eligible for. However, it supports our customers' downstream areas, right? We talk about... You mentioned SAF. It increases the subsidies for SAF. There's grants for, obviously, electrification, not only for vehicles but also green infrastructure, right? So look at electric vehicles, part of the, IRA basically encourages company or encourages the consumer to buy vehicles with more higher mineral contents that are developed in the U.S., right? So about 20% of our virgin sulfuric acid business is into the mining sector, which clearly benefits from all the electrification and EV efforts. So those sorts of downstream areas where our customers are benefiting is where it will ultimately impact Ecovyst. Just kind of moving towards, like, cash flow, cash use, and, you know, what you see as opportunities. Can we just kinda go over the, I guess, first, the cash use priorities, how we should think about them going forward? I guess, yeah, I'll just start with that. Sure, I'll give this one to Mike. Yeah, certainly. So, you know, both of our businesses, as Kurt mentioned, are, you know, very stable and high-margin businesses, right? So we generate a fair amount of cash. That cash generation gives us a good flexibility when it comes to capital allocation. While we do have a term debt that expires in 2028, and we have 75% of our interest capped through hedges, we do have a net devere-- net leverage reduction target to get down into the low 2s, right? But at the same time, we do realize that there are opportunities to continue to increase shareholder value through share repurchases, and other activities, as well, including, you know, potentially M&A, similar to the Chem32 acquisition, more on the bolt-on side, of the right size. It would be actually more bolt-on. You've done a huge transformation in the past few years. Obviously, that was slimming down and focusing on what you, I consider the core. Mm-hmm. Is there adjacencies that you could... I mean, I mean, to bulk back up, or is that something you're considering, or how should we think about it? Yeah, I mean, what we did in the last few years with divesting the chemicals business and then the glass beads business is more transformational, right? So our focus is more on the bolt-on side, right? When we did the Chem32 acquisition a couple of years ago, it was, you know, roughly $45-$50 million in size. And so we would look to do something similar that is either adjacent to our current strategies and businesses. It's gonna be accretive to the business, and we certainly have a target to continue to, you know, look at leverage reduction. It wouldn't increase leverage too much. Yeah, I'll just add, I mean, when you look about acquisitions, I mean, our Chem32 business would be a good proxy for that. There's a lot of businesses in our space that's on the—you know, when you look at Ecoservices especially, there's niche services that have been developed for around where refineries or industrial plants have outsourced a lot of activities. So there's a lot of businesses and service areas that have cropped up. So we see a lot of opportunity in that area, especially for Ecoservices, where you can bolt something like that on to Ecoservices, and we will benefit from its industrial infrastructure. On the catalyst side, it's more of a technology play. We have a really tremendous ability and, I would say, unique ability in the catalyst industry to take... Work with customers quickly, take small, you know, 1-gram samples, turn them into, you know, 1-kilogram samples, and quickly scale them up and commercialize them. So there, you know, we look for companies that have great ideas, patents, or, you know, really, you know, niche technologies that fit with our space, that could really benefit from our machine of being able to scale things up and, and commercialize it quickly. Well, before I ask my last question, I should make sure, is there anything from the audience? Okay, so we have about a minute left, and you mentioned about the, within catalyst, you know, kind of working with your customers and kind of coming up with almost bespoke answers. But how long does it take to develop that? I mean, is it something that's more of a, you know, a three-month process, a six-month process, a six-year process? So, you know, from idea generation to commercialization, how should we think about that? It's very diverse in how that happens. So, you know, some of the nascent areas, I would say, happen very quickly, right? We have our kinda niche knowledge in catalyst really revolves around zeolites applications and then silica applications. Those are our kind of core materials that we work with. In some spaces, there's folks that have an application that needs to be placed onto those structures, so the development can happen very quickly. In other cases, if somebody's building a multi-billion dollar plant, and they're trying to dial in a specific plastics property, that can take multiple years to develop that, multiple trial runs. So it's really not to give you a non-answer, it's a mixed bag. But what I would say in general, the more nascent areas are generally faster to develop, because they're going off existing structures or some, you know, deviation of an existing technology. All right. Thank you, guys. Thank you guys for sharing with us, and thank you, everyone, for listening in. Everybody, have a good afternoon. Thank you.