CBT - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen. And welcome to the Second Quarter 2018 Cabot Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Mr. Steve Delahunt, Vice President, Treasurer and Investor Relations. sir. ahead, go Please

Steve Delahunt

and on Good of Corporation like today role which Tire earnings and night, of Vice Keohane, Christie. President McLaughlin, to General and for results we are welcome the upon the CEO Manager President Cordeiro, Investor fiscal Eddie Cabot teleconference. XXXX, President; and retirement afternoon. you, Erica of of to the quarter Vice copies I’d our you Sean year CFO; Thank With who posted of Business assume on section Eddie’s are released our CFO will our May Last Relations second XX. website. me

you those our For press release received mailing by email. list, on a

the not list the Relations. our the mailing Investor website replay of are accompanies interested The in and slide you call. be deck in portion with call Relations on and on please information available future, will is also available that contact are If our in of this Investor you receiving the this conjunction

During is those this and forward-looking differ actual from forward-looking to Each statements such financial in and performance. call, future statement make our results expected about to that could operational risks materially uncertainties cause we statements. projected subject conference will

presented be filed by performance, company’s to measures refer involve these results. to on appears the in that GAAP. alternative Any financial available key the referenced order regarding is issued night GAAP table greater In required our on last Investors Form Securities should reconciled the to considered our measures highlights measures in over are segment on the call and certain to adjustments issued and to provide following Statements our Sean? not to the heading this night financial and Commission Eddie Performance. the non-GAAP last Any company’s open Forward-looking and an with regarding measure the last measures information Additional we Sean, be factors that a financial XX-K transparency and to questions. review press end turn comments at this, operating business non-GAAP under Exchange in release details. we most website. annual our will Sean closing the will of website. to in floor directly earnings financial I GAAP the And corporate release discuss available comparable call the now financial will will section non-GAAP provide and of who the of the financial report

Sean Keohane

was positions reinforce XX% segment the gentlemen. Reinforcement afternoon, results benefits favorable per and as segment in Steve, driven the was million a and our to and EBIT on by adjusted strategy. you, EPS high a agreements share. a These EBIT, spot year-over-year to reflect delivered strong of with basis quarter good particularly our very and up Thank Core environment, and results Materials calendar Asia. $XXX $X.XX power The up the pleased the from in XX% XXXX operating I’m record XX% pricing in Advancing ladies leadership our customer a of increase year

once region. because, commitment drives enforcement of of the increased they noncompliant as a important enforce particularly the supply aggressively competitors, to it about clear, curtailments which high continue across again, market the in for agenda Let Pacific me against carbon quarter. for environmental black The an and a government, minute many the talk This winter is priority China demand companies. is Chinese Asia standards this months in for government’s factor The was is and in the the during our resulted achieved effort impacted pollution. heating household to

in have their environmental waver. plan, a goal, performance to commits on they China when they previously, commented have five-year I current As as don’t

of of quality and conditions the curtailing be overall of see intensity variation air moderate outside movements between jurisdictions. can create directives will The winter somewhat and as we throughout year However, the index. season, in changing uneven central opaque will likely implementation actions

to efforts to applications in as which we momentum. year-over-year leading which will position applications gain Volumes that as kind positive builds first our Tianjin them. Carbons in are took plant a receive compounds. recognized segment, continue long-term certification. in carbons mercury through within high-end to We were was some recognition continue in China. forward. as Specialty mix the the specialty success, And above-market sustainable is country this driving America plant the any to valued resulted our chemical about reliability face performance. recent Performance both execute environment, It the improved from voice In North to the price increasingly leadership specifically challenges, be support customers pleased recently new and China of as by our Results competitive segment removal I across Formulations Care and weak higher Solutions market commitment continues and significant and such growth and responsibility also in like for with am Oxides. Overall, this management to our very we in realization the in energy China drive ability and to hold the the Purification application, Chemicals Metal and has is and commercial going Responsible materials feel high-performance end, XXXXX products Cabot’s financial practices

considering impairment for ECS do environment potential Purification months, including not and Solutions few a over of have the quarter. business alternatives Advancing focus analysis fits last weakening As our within the formulated a on believe sale. the and strategy, we business the the after-tax Core in been such, solutions, Cabot’s million as strategic With recorded result this a conducted quarter, charge we impairment in $XXX the an

given that value While we at the quite for current not maximize this extensively, conditions, this we explored have believe shareholders. sale market time will do a

firm business this the forward, clear. free run business expectation. that we for to is Solutions generating with positive and Moving cash Purification are continue currently parameters operating flow, will the

share volumes tightly. in expenditures of applications, to and working reduce grow variable costs to options side now strategy, specialty business, mercury of evaluating the we in regaining terms removal North our capital In and capital focusing and continuing managing on America fixed are the

will We to to I’ll quarter Eddie? Eddie options explore our now detail. the value to of maximize to in turn also more shareholders. financial for the all discuss it results strategic over continue

Eddie Cordeiro

I Thank segment discuss will with you, results beginning Sean. the Reinforcement Materials.

driven timely spot margins of pricing second the increases principally the negotiations relative favorable the second positive fixed approximately second was $X the the in agreements driving customer increased and XX and also related to Americas by quarter price compared from our The same up benefited were and in noted million Reinforcement During XXXX increase and compared Volumes to our our network. capacity by business the of agreements. I million just by quarter of higher XXXX, by The Asia in higher Sequentially, favorable higher outcome sequentially, in quarter customer spot EBIT to by Materials factors for to XXXX. increased EMEA both of Reinforcement utilization rising in million costs. feedstock offset EBIT as unit first driven due fiscal costs. Asia, XXXX partially Materials quarter pricing XXXX, the year-over-year our of throughout to EBIT by XX

continue its rising the feedstock we timing market benefit ahead maintenance-related and a quarter. third to ahead Materials the in robust We will of price performance favorable our expect $X in not environment. of increases Reinforcement strong quarter, from do costs that Looking execution the will supported the repeat, by higher anticipate third million costs

primarily Volumes due to increased carbons higher Performance increased Formulations from volumes. the Carbons XX% high Oxides, million from margins to Now price higher business. Metal volumes $X partially Chemicals was higher higher to to Sequentially, in by Specialty fiscal and quarter fixed in Blend first EBIT and costs. Specialty of Metal Sequentially, compared by and in margins Formulations acquisition second million volumes quarter from Carbons compared business. Chemicals. penetration unit Tech and offset in XXXX, market turning fiscal high-performance increased both increases The the X% Tech Carbons to the Carbons to the continued primarily to increases combination the due of in increased the Blend in is Formulations Formulations and EBIT in business by to specialty XXXX and and due acquisition Specialty compounds The this by the $XX for Performance X% product growth Oxides Specialty growth and increase of lines. strong our above-market contributing and compound due recent compounds. and volumes by

higher to quarter the third around performance to quarter, ahead we some with to anticipate the by investments. costs growth see higher Looking support second We fixed similar overall will the offset expect level be impacts. of volumes that in offsetting the

as impact offset expect increases feedstock we rising price maintain to costs. our of Additionally, margins the

competition decreased fiscal lower and the XXXX lower applications. the decreased Second in Solutions primarily volumes reoccur. compared by Sequentially, $XX $X margins quarter demand impacted volumes from to fiscal and Solutions $X of increased are XXXX quarter were $X EBIT which by mercury EBIT second in fiscal million not of related to Purification by due of removal we the million compared XXXX, final mercury lower quarter of to first quarter Purification XXXX. quarter, receipt royalty million of variable to first in million negatively payments driven fiscal the high of the costs, expected and removal In the

costs the Looking lower American applications to in from ahead second improvement versus to water, seasonal North the growth some third see continued volumes and due to quarter, in the expect QX. from quarter higher we variable specialty benefit

decreased activity. by of as of of a fiscal project compared $X the quarter quarter EBIT second quarter XXXX lower first Second XXXX Fluids compared to million decreased fiscal in Specialty the and due $X to million XXXX level to fiscal

million, year We ramp corporate begin expect the strong quarter about will $XXX oil at $XXX to our cash and up. million. of project a I and half We liquidity as activity to projects turn now the with ended balance the remains of increase items. second for position gas to

second in prices impact working included cash million, second This while activities million. $XX of quarter an quarter driven the XXXX, days by from higher the were Capital of million. revenue for During on of oil increase working and were expenditures overall $XX fiscal were the capital flows of operating $XX balances fiscal reduced. capital XXXX net

year, As we look approximately our including we business. to expenditures for million, capital be silica expect at growth the investments fumed $XXX full

includes million the quarter, current also recorded back and During we million the quarter business. paid to The Sean. of our the for benefit operating in call for rate second $X Solutions the the XX%, was $XX benefit second certain primarily quarter, million items the forecast year. discrete which of recorded and turn dividends. I’ll million We of net And our to tax represents a cash now Purification $X over related impairment $XX tax year-to-date tax for

Sean Keohane

Eddie. Thanks,

quarter are full pleased year. trajectory We results for our the our with and very operating second

strong expected its the of during across the year. to Looking second performance segments. Materials half continue Reinforcement is the

We while moderated the have levels China, as it impacts positive to moderate carbon the Moreover, improve These the slowdown. black expect Year to are we somewhat winter coming offset utilization albeit our other remain well our in business levels New there season, globally. evidence we curtailments is is will Therefore, relates at each increasing and volumes will of third very demand building following Specifically believe likely strong in at that pricing quarter. out going forward. high capacity is environmental seasonally China historically. positioned about while Chinese

the Chemicals, have we In in customers the increasing fact, through a fiscal of half year. look Performance be million maintain outlook million. the and realization are are and year the the they and for tight we initiated and discussions XXXX environment. second to for now pricing expect segment $XXX expect market with our solid margins volumes beyond range in full volumes us segment XXXX to to several EBIT with Thus, to of In pleased our secure $XXX as

through to traction, continue products Our mix investments track. gain remain long-term new our and efforts and favorable on drive to growth applications

Our remains EBIT to range $XXX fiscal million of million. the in XXXX $XXX segment expectation

in continues is and to momentum specialty offset applications, competitive it volume. While the more than the removal ongoing Solutions segment mercury by Purification some the pressure pricing in see

a XXXX. As $X expected our year for result, we million the to fiscal EBIT to X are lowering

return. will EPS range the and in in market the Segment Specialty conditions expected, on we to as benefit Europe, of we tightened recent for our of and half to the of million closing, with the X shareholder low our commercial EBIT of and the total year in outlook adjusted and Middle to commences second expectation both in $X.XX. in each In success segments, fiscal is we our our as the to $XX the Based it successes of attractive be begin current raised of are end range and XXXX. to confident remain for the project seeing activity expected have Finally, Africa will deliver for strategy of see $X.XX the updated remain view East XXXX Fluids, economic in Asia.

grow will leverage product and both utilizations market with volumes pursue continue continue and generating returning take XX seek and through capture strong flow new including businesses existing cash to to want to in also Cordeiro the free a operating in investments, minute to creating finally, process thank We Eddie our we I well levels, line as And in invest growth our on to as improving reinvesting value the M&A technology, to his and commitment shareholder to that from cash over focus on recognize and discretionary core for past Cabot years. shareholders. businesses.

joining the very I the us turn your for session. to your best miss pursuits. in call Christie to now you for leadership and back our today, question-and-answer very Thank will We and commitment much and next you over will wish Cabot the

Operator

first [Operator of Instructions] Sheehan Jim Our SunTrust. from question is

Jim Sheehan

us performance would some on create value? you why in at Solutions -- more divesting give shareholder believe to not this Purification color that Could time

Sean Keohane

Sure, Jim.

focus our what’s is I any think shareholders, commented, options. we and over here, I exploring here all alternatives period have including strategic to past as best the been for sale do

it particular intrinsic current to given market of value opportunity what business. be terms environment are removal, things this believe right best we with think, of now in to the where create in maximize the I mercury the didn’t

Jim Sheehan

weakness the carbon And that carbon of pricing have up you outlook and do price in how quarters? -- carbon in to current future spot seen quarter? expect during black terms in any China, in the the quarter price And show for into progress you black

Sean Keohane

Yes.

in operated extraordinarily a we was remarks, the as during well dynamic quarter. commented I prepared So we, think, what very

and our close utilization During to this very period there were industry. impacts operate plan to the full of time, we whole were able across set while

way our same period. very I distinguished terms terms the been And And of we’ve during we’ve managing period, this the activity dynamic ourselves operations. was think in our we commercial really of run pretty volatile. in So feedstock also that during

throughout did You of that result, kind then of might quite operate a has it and were pricing. pretty in a and way in we it QX, as managing quarter. volatile well dynamic And terms quite remember our December late peaked able to in been this

during in we’ll likely historic pricing, seen I moderation and China curtailments world. past have has our peak is call prices moved highest bit, in black some that today, the pricing actually in levels to combination we carbon although, again, we margin but price have moved been Now say the mean, would quarter, that December, lead quite a to highs. have I will and at in moderation some saw off although volatile that that in continue late to And the the are I what think this they see of the off. levels

in plays So commented in there China I is are I’ve outperformance, directives implementation can out continued it of think the these as fundamentals And often the but environmental dynamic many for I depending I direction in think how situation. and times, and different central a But air overall over time be on the somewhat quality pretty clear. jurisdictions different looks. how opaque periods and of is performance think uneven

think And and I in fundamentals are think is, the I position the leading away, China. pretty our far strong. one

Jim Sheehan

Could on you business? impact the potential U.S. your in about China and tariffs talk of the

Sean Keohane

because any you’re about had it place not on actions and when put see tariffs duties in And specific U.S. consumer of to investments duties to all in there the the the chains carbon there put antidumping and was around had any of structurally the is I world’s have really in been place, China. similar either these plus don’t they specific way prices. We trade think or on and but Today, But China is tires think Jim. structural, in impact because percent a friction in tires, XX the much really world’s produces it between value dependent the I don’t end, impacts think somewhere resulted in been attempts put business in world point, to I black the this these times here. support assume it. impacts there to XX% see where referring been have at pretty are any in the place. is of China, way, end, higher And so

some trade expect So play probably if specifically tire duties would have in I the chain antidumping it would similar structural industry, there a future given value actions were against out, played out is. way that how that

Operator

from Begleiter David from is question next Our Bank. Deutsche

is Your open. line

David Begleiter

margins up expect Would turn Chemicals, Performance Sean. half catch the positive prices Sean, in For raw’s? as of the year to you to back

Sean Keohane

while know, David, this you as we’ve now. been chasing a for Well,

of realization really that if I But pleased to you just back a out seven price lens oil been see as maybe finally up. bit, we’re And eight I with around think the even here. have last pull was of we’ve the costs $XX I the material right raw So recently been think able as moving little today, yesterday, barrel. quarters a headline think sitting

go need continues continue to after to pricing move, recover it and we to So to this.

the to that ignored by probably they or keep is can’t because whether when moving overall signaling the So this leads more not input key driven again, business to they’re margin and think economy. here, I while seems be feedstocks But in it factor expansion, applications, strength are rising. performance up, in near-term unclear, the

But here price seeing, pleased So degree will success to that increases where this with I the depend say momentum will the we’re headwind, we’ll and I continue our overall results conditions to environment. finally quarter. expanded certain push show in to this for on that necessary but think offset competitive we’re

David Begleiter

back you where think back they Reinforcement of you they’ll in operating can trend discuss carbon Materials, And black, year? to the in the QX, were half Understood. where rates,

Sean Keohane

operating David, said, You rates?

David Begleiter

Yes, operating rates.

Sean Keohane

we’ll XXs XX% the our overall, quarter. it, in high, quite around in in the utilization was Yes. sort of utilization to, I second call mean, high

in demand of side, think of we durable, situation and trend continue China overall and capacity no So is find fairly globally. on from And continuing pretty will enforce speak as And indicative that supply those we pretty would customers. I that, structural. rubber pretty expect are is the environmental our pretty real at the industry additions to trends that ourselves a that industrial think tight what We look And overall. to tire solid standards. this we

expect now. change I wouldn’t we’re right the significant any levels So from at

Operator

Baird. David next of Our question from is Katter

David Katter

the for particular Any hoping little on strong Performance was color I products for? more seeing demand you’re on a beat in which information volumes Chemicals. in

Sean Keohane

Sure.

really the in of both feedstock with pleased here just pricing around as volume costs. the in We’re I -- overall progress to segment with as terms rising growth deal commented well realization

with I balance So really the here. think pleased we’re

I pretty side, of new materials. our of applications to tenet products good of that in is a couple the we’re think conductive momentum. is that very energy developing that to have One a of continue strategy excited carbons the there areas couple are business, about, important One central a this here. is on volume things note and are and in role

about the lead this in of as ion acid case, batteries. role the both advanced we’re well talking lithium as So batteries,

there fundamentals of in our plastics. in is, is space the other progress think I And excited the something speaking, we’re broadly the about.

for into So if applications, specialty half more little at half, plastic we’re market, than goes a the roughly market the here. carbons maybe you look leader and specialty the carbons of

couple carbons specialty things. we think for our in ability compounds that’s this plastics also One in because position and masterbatches to of have a in for where carbons, one and plastics, the of black is our application unique We grades develop of I the market. global new number produce downstream position

in And think, reported. position numbers we here. us really show applications, downstream and upstream I our that understanding these both of and seeing this so volume the allowed you’re that growth up has win to And

David Katter

And same do the Along look? M&A you the how developing of where appetite the do products, bolt-on And for of acquisition new does think what bolt-on sense? sort have M&A? might you make lines environment most

Sean Keohane

Yes.

one absolutely around have M&A, think a boundary bolt-on. an set we defined but pretty and I important be that clear so by is a our it So of part conditions strategy of will put

middle core the we And to a one our of so businesses in down the here is portfolio. that is right acquisition what mean

see in confidence our think, that and playbook we to so Reinforcement to better So opportunity something we continue that strengthen we’ve anybody I a and have think know might in lot than run scope in would in. for of our Materials certain us how proven And geographies, these be else. that I that with businesses, position we will

believe M&A. And in bolt-on And opportunities product so scope. across there range we that be definitely in the also will Chemicals, of Performance families are here, for

So off the adding this out Tech the we position us America a North masterbatch for compounds already. one example. playing good portfolio And Blend in is and in one most a recent to did, black paying is well

the So acquisitions. metal we’ll oxides opportunities to look and for specialty for across continue specialty bolt-on compounds carbon, portfolio fumed

Operator

is question next Kevin Our Hocevar of from Research. Northcoast

now is line open. Your

Kevin Hocevar

customers interesting Sean, you reaching XXXX, start that, frame. thought the were you which some contracts on that already I for because for was August time to mentioned around I negotiations out earlier August, thought those usually,

about wondering that we was about that you from I as fears the also is supplies XXXX and a on Is So mentioned think And XXXX? I customers think priority if you comment beyond. main that. could maybe sign

contracts? And to is multiyear norm year So contracts? guess, I reaching to think one do are willingness, multiyear do customers what’s Cabot’s you to I the when out

Sean Keohane

one And some over certainly may exception been little mostly Kevin. you’re stretch types longer has Thanks, right the agreements. bit norm that agreements, year a X-year be duration Yes. but and where of

by And of couple think reliability. valuing One with signals that driven so clearly they’re the engaging customers a I is getting us, are from factors. we supply

becoming, been that of market so given think, hasn’t and a the more couple there and Utilizations side, I overall and investment. much and And understandably so. important and are supply certainty growth -- on robust, supply is more tightening remains the that given reliability factors here,

leading this so dialogue. that’s some to And of

I I most they, need objectives now suppliers, but their clearly operating way customers, and sustainable big And out to sustainability reliable and rising. overall pronounced most to role the as clear suppliers factor to right we’re think well. order that China, of than a of that in in overall mean, have sustainability agenda playing in the terms I overall able the that distinguishes being are is be that’s is in other back it’s seeing in to that’s those be about consistently something a they that reliability. supplier clearly operate make factor standards, care sure they’ve look Cabot this chain too, to to think that value because itself and got they is

So based leading overall I these tight to on be conversations and the think factors driving to are this environment reliability both fairly and sustainability theme.

Kevin Hocevar

And you mentioned, really online. too, supply a lack of coming

you So expansion? you it been Cabot’s to do here maybe, know could the plant just regulations. Greenfield it long or there’s comment -- Is of what -- view? a take environmental increased I build does how and And from point an think hesitation

guys this, with there’s are $XX-million, what, those $XX-million on. operating once that, costs You too, I scrubbers. associated installed turned know

we not still that of at profitability to a So warrants yet are curious level viewpoint reinvestment? there. Or your

Sean Keohane

capacity long to term think support continue customers to our over their the we here our the to are. I appropriate be Cabot, would And for plan support certainly investments with Well, growth.

last going think here bit over China. of pull the an little of in we’re and at and some you game factors has back changing. changed investments made and think has really China. factor But the I it business. probably, been And a come And for do there the of if are just important there, I capacity now, of emergence lens of the the And I happened virtually through more have in think a don’t on capacity terms the come long-term years, rules that all challenging. important have health what I that see kind on that look that’s XX period shakeout, of basically has has

important are Now in that of going trends suppose, investment. rest running there of some out be business excess still can would enforcement results forward. we might so that of for really part cost that the the are there, in what Cabot, have customers, terms and investments strong in to of play mean around environmental our our out support strategy go are But with I the justify as we how with of uncertainties an world, to our capital we results, and

Kevin Hocevar

and in $XXX million I benefit there’s Materials a EBIT a in sequentially. down step quarter, million, to which it expected like pick-up a that question, the expense, onetime maintenance to guidance, -- sounded offsets last one And like that China, I but implies maybe sounds $XXX the volume Reinforcement sounded with a little wanted million -- and understand, $X in pretty did lower it in there’s but it of it understand pricing some another. increase big you

curious in the I I’m I big step I make want kind down a there. is Is coming back I that’s So guess there sequentially maintenance? lot a understood of the guess, this maintenance half? just just of to sure

Sean Keohane

Sure. Yes, yes.

outlook the help give start bit segment So of to I let forward. good here a Again, the me color that in the Kevin, try to about here, and out. results going little would by saying we really feel

maintenance a do this very quarter think we that saw runoff I versus a One feedstock down the we QX pricing that reasons. repeat that’s On bit be basis, is for numbers expect versus sequential positive. a and you benefit in and terms couple digits season So mid-single around will of the maintenance a see of we typically of and impact. that this typically little won’t of higher be then in range of have is better, in millions. higher so see cost we million weather And unusual higher the $X sort have to that’s it plant as maintenance, wouldn’t

was a of record think and QX. progression what So QX of about think to terrific certainly factors factors I terms versus in two are I in think important performance those

Operator

next Our is of Kapsch Chris from question Loop Capital Markets.

Your open. line is

Chris Kapsch

about out customers. around reinforcement materials reaching I’m business these the and have about customers up concern just that to their the I just global on talk of that wanted the you you source global Can to supply. behalf? the discussion on follow you are notion assuming concerned

maybe acute out. well back of concerned I But is playing but mean, notwithstanding industry from North recent China there’s America soft outlook is other the can it a passenger trends providing that supply obviously, for dynamic some really the new geography, regions that demand that’s as regions narrative. and of you impetus roll tight, event which scuttle sort by Just through there’s this in still some in they’re about? just kind are There’s tire

Sean Keohane

to chain sustainable in their are in serious of customers sustainability. their actions. of And make now. in all over last that these think And it fact But that think wanting come clearly, own is being I And it region around does story, are in that. align degree the global customers is with to Chris. Well, focused way about the have again, that operating XX-plus lots globally performance can we look, that China sort and balance, to certainly there’ve right been supply I to support on changing global support I right this of supply and examples Sure. way. of to think, you years, intensely global clearly, think, I I And the And the suppliers not reliability think a different fundamentals the your them story. here a see in now back of are, suppliers all I slightly mean, region. going that’s it’s from sure case be terms and also that

therefore, is and and and, story, is for think the in tire grow So X% it going still a tires I global balance carbon I the the industry black do see for to outlook as range. around on

that and just to and, best if start so turn supply. and utilization things to you suppliers wanting tight align And that the it at of sure the are levels, make therefore, are into carbon growth look rate see reliability customers the are to ensure they black look current fairly you with tons at

that’s don’t really I -- here. the think So think it’s I story

Chris Kapsch

is on ‘XX. up global you to more little we’ve market follow incrementally sustainability a that each a you -- global given your that better described just which order I’m sounds out the like And Europe, you this early about then tightening these sort for to pricing, And and of given creative going contract customers? the than different questions. been but for contracts with and contracts an coupled traditionally, it’s going as sustainability, obviously, and linked region. One, in a for than -- desire something sure But return been tightness different for the setup too pricing secondly, in sustainable magnitude, in the the to of throw North reliability sure thoughts have certain could of indexes. into can allow more there’s any I dynamic, is your there a but Two on base terms you’re pricing? pass-through terms sustainability and doesn’t supplier the reason America. global providing focus of for free. if stewardship this, where certainly of think get terms because, in just Is appreciate the you come changing guys, to I any seen there’s And there have of China’s And the and what structure on pricing that’s feedstock the that

Sean Keohane

you’re And of this you’re think onto last actions a absolutely Well, we’ve dramatically couple what’s as the because important I in been very point. fact, right. business our in driving years here performance the that’s improved over

have those clear to sustainability, be appropriate we form those in very and have realized And making think an come don’t of progress investments. reliability been support price to demonstrating for free, the that. those in I I think and

business. Just the look results the at of

So part I sort proposition think that I why customers of think, value of value the you’re and why a they they -- value to central what is on to, us.

here try is to on of we too a it’s think question would the things XXXX I focus fundamentals to I terms the focus mean, early where because and on I -- that. think what in do I But here little beyond, of tell. go on bit from more

feedstock we you fundamental place, making we’re markets, environmental that dynamic that are operating all things. we’re and that in all our being we’re at controls have strategic I being purchasing, that And sure separate plants, durable dynamic that reliably in of customers, these in and supplying sort these these of performance so to of our aren’t the if look These factors, are spot real. the think, -- us, our

Chris Kapsch

one impairment just on charge. the as then And Solutions, follow-up Purification the

just cost, fixed could order us cost Just impairment would with down you lower assuming the be share -- takes associated what the that with of that charge? structure the

Sean Keohane

$XX lower basis around million full be year would of a that Yes, on D&A.

Operator

is from question next Sison Our Mike KeyBanc. of

is now line open. Your

Connor Cloetingh

This is Mike. on Cloetingh Connor for

growth In in pretty America generally just that and weak first I what companies share Or companies reported the it that? might you to are driving from you gains? who solidly. guys tire was the attributing be well? So are North Is wondering, doing Europe, What up volumes quarter. tire aren’t

Sean Keohane

Yes.

in North is So this business, America our of agreements. most European and annual under

results agreements are we those in our the results flow so of And seeing through from last year here.

I think product lines we’re are performing also seeing well. that certain particularly

real OTR markets, in markets. the a the seeing rebound We’re off-the-road

lot an and for customers a where of products important And a number so application go. our is of this

rolling So a from as last customer from year applications agreements of outcomes that certain I key pretty a well where part as there’s think our through performing we’re this year well are and of. combination

Connor Cloetingh

but you’re then have need capacity And -- capacity? the the business it there. know making you’ve meet demand’s do in been announced carbons the fumed Is demand near in are investments plants, I to the on for that side, of Performance a specialty and Great. pretty there like silica strong seems you most sufficient Or increase future? Chemicals,

Sean Keohane

Yes. Yes.

looking to going are all options right options Chemicals capacity Performance of capacity lines across now. the we’re looking be of at So at product --

see a over time unit sense So you’ve here recent in And side, in in modify specialty higher-value Tech certain it Blend we that Reinforcement where and most to compounds. things the upgrade existing cases, is produce well what saw in of fumed you’ll have makes to specialty acquisition in an mix silica, our carbons. the Materials carbon specialty the new you as announcements of then line seen as

or there and support play with to demand units also some So products. our either certain coming you’ll be what of debottlenecks to robust for and a is will environment continue see high-value value new us, lines along we be in out continuing product of terms will for that where pretty then

Connor Cloetingh

Did in one just the Tech give quick contributed how Blend then to And segment much the Great. follow-up. you or... quarter

Sean Keohane

No, we didn’t.

Connor Cloetingh

Is the that acquisition that out? not breaking something us you’ll or let you’re know, contribution

Sean Keohane

No.

what when acquisition, I gave Although the sense disclosed a was we deal. we I think multiple the on that for think

paid paid million. X about $XX times we for and that, so And we

the full-year basis, in a EBITDA on So, range of X.

Operator

Thank to Keohane for I’d today. any over you. call further And turn Mr. the that does conclude back Sean for to our remarks. session like Q&A

Sean Keohane

you, York City. I Investor you you next for our Thank in Thank later and to much. us, look speaking Day month with you New very joining thank forward at Christie, and this all

Operator

program, thank Ladies today’s have a in disconnect. for This conclude great today’s and you you anticipating day. and gentlemen, Everyone, may conference. all does

Cabot (CBT) 11 May 182018 Q2 Earnings call transcript