ECVT - Earnings call transcript Q2 2022

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Operator

Good morning. My name is Katie, and I will be your conference operator today. Welcome to the Ecovyst Second Quarter 2022 Earnings Call and Webcast. Please note, today's call is being recorded and should run approximately 1 hour. Currently all participants have been placed in a listen-only mode to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After turn now over Investor [Operator would to Relations. the of Instructions] I Director like conference Shiels, to Gene Please go ahead.

Gene Shiels

Quarter welcome Thank call the Officer. Mike are Chief the morning, Feehan, operator. Ecovyst's morning Call. and Bitting, Officer; you, Ecovyst me Good this Second Executive XXXX Kurt on Ecovyst's Earnings With Financial to and Chief

the materially. including today that of shared this company's posted about of mentioned in information, financial discussed company's Following earnings only plans today in take note and trends risks date. at the in we'll outlook. presentation could found to Reconciliations financial implementation subject section our forward-looking ecovyst.com. the on remarks company's anticipated the release operating information information this and financial measures This Please morning, website call to their strategies, information some the our is cause and our SEC. uncertainties information of materials and shared prepared and questions. your of speaks non-GAAP that These in the our our vary actual XXXX corresponding the of risks is as GAAP with forward-looking can demand are be the today's performance, end-use Investors measures, filings with Any results

Now I'd like to turn the call over to Kurt.

Kurt Bitting

Gene, you, good and Thank morning.

critical leading as the materials performance, implementing well results Ecovyst to services second in delivery technologies. a supplier of quarter strategies growth the as they operational continued the in strong are our and sustainable for enhance are deliver extremely of pleased financial standout of profitability. long-term that with We XXXX as execution is components our reflect and progress solid and

clean in of applications, We acid, lead expanding refining is and fuels, traditional used diesel of reducing used wide into a in provide Our the industry's advanced remain as Catalyst today the the efficient sulfuric leading for low the industrial a and technologies in polymers renewable And heavy-duty is air the materials specialty including provide cleaner, services production these acid fuels, The trends emissions relevance of regeneration believe trends. demand range will we demand from which and batteries. to air positive supplier technologies, desulfurization of looking favorable carbon production mining, virgin future, clean Ecovyst. these of significant of and expanding the more end enable translating opportunities Technologies are for need markets vehicles. fuels, of air we production

favorable quarter, quarter, positive demand second in momentum outstanding the the the financial established During we trends. to from these Building benefit we upon first continued we delivered results.

including Through XX% up account quarter year-over-year, many transportation, contractual and Inflation while indices. posed cost remains positioned labor venture, have adjustments from well price even customer strong including in our Second is significance, compared costs, of our of adjustment business XX% adverse The Ecovyst a inflation results to financial management our while joint up Of EBITDA contracts natural to on higher for the the primary mitigate benefit to business half currency challenge and to in to our mechanisms pass-through investors sulfur, ability as uncertainty and geopolitical first in been our to strong fluctuations and contributing for variable as provide impact of inflationary these a year-ago in challenges. and segments, well concern our of teams from inflation of alignment continues factor businesses. impact the critical mitigate a Ecovyst's $XX and to sales, XXXX. Ecoservices for adjusted gas plant alike, impacts has to were ZI million the share XX% quarter. was pressures

in increases in margins we in current despite the variable costs. have our continued to unit fact, expand Ecoservices environment significant In business

do While pricing to pass-through actions not margin contractual have to continue and stability. prudent Technologies contribute the unit forward-looking in our Catalyst we provisions business, same

the results, another strong financial was favorable our second quarter quarter Given of cash generation.

continue Our capital with generate to a allocation. maintain we ability financial cash substantial balanced to flexibility approach to as provides us

in we During the with we outstanding debt X.X of quarter, leverage ended made reducing the further and and times. progress a quarter leverage, ratio second

and In worth addition, support our of repurchasing in allocation common our conviction value balanced $X Ecovyst flexible strategy capital enabled Ecovyst million by shareholder stock. to and results nearly

closely driving five. our business more at trends key slide Looking on

we outlook for We the continue positive. have confidence also in to and trends longer-term believe our near-term the business, remain

a gasoline High in newer vehicles. alkylate. gasoline as For refining gasoline in customers demand by percentage alkylate And continued strength and our the continues Regeneration demand production engines higher refinery see in is critical is is of domestic robust octane premium Ecoservices, for exports. for for utilization number we production turbocharged supported US, the a pool. gasoline In of expanding demand in function grow which overall of requirements of Services, higher-compression to this the recovered

is a gasoline due octane XX% as specifications, regular as concentration gallon a alkylate, higher premium of approximately of the of gasoline. While in alkylate gallon high is to XX%

wide assets, applications Ecoservices of emission and batteries, produced alkylate long we competitive large the Catalyst acid, refining sulfuric acid and believe particularly Gulf Included region, positioned the business in we growing to industrial waste us is of which also alkylate in Waste to and specialty provider needs, the which provides as with many in site for where Specific mining as position hazardous customers, enabling options our minimizes lithium. incineration the an demand, are copper, the with the into customers. waste a also attractive a disposal is strong semiconductors. that EPA's Activation we with gain to water of In umbrella disposal enabling Coast costs continue we to therefore, disposal high-growth both emission the our XXXX to continuing operations of industry, for also by under focus growth. reduce segment. to deep Of outsourcing are which to waste contributing ChemXX an octane sites, reduction stringent a and Treatment, as our addition streams, that from that important we We risks Treatment disposal the is typically of reducing grade furnaces truck. and in landfill, energy nylon in virgin growing or alternative which material electrification in our at proximity associated to gasoline global borates waste X preferred requirements content rectified to the transport close waste lead in the note, supplier US, located North our treatment over our leaching content higher The more US such of American on long services energy believe addition, In sell liquid result we use disposal are valuable gain be generally distances inherent sulfur acquired Tier of requires exemptions. Regeneration the such customers production, standards in Waste beneficial Services Ecoservices plant we maximize customers our are in the will needs ultimately some a the our and benefiting the external the of XXXX, term, alkylate. well and maintains see business range consumer largest as acid mining. With sulfuric such to industry of for applications and

further Catalyst services. win Ecovyst’s creating to Catalyst scalable to collaborative unique activation to provider with the business industry, highly particularly of role demand time-consuming, Consistent of and Ecovyst and in This avoids positioned is reducing of demand. is Our our time. develop to as production to packaging. high the silica polyethylene catalysts growth, Polyethylene the refining rate capacity customized outsourcing ChemXX Technologies model films ex-situ long-term play additions. and in be the solutions rewarded business rate on production has general polyethylene of our outpace in customers polyethylene a renewable turnaround fuels adoption plastic with activation new an allowed an with catalyst growth In relationships important continue Activation our for continues continues the great of Ex-situ grow. trend expands. by business, ChemXX on-site

In the recycling leaders expand with away as and plastics. lightweight transitions partnering we and industry are for durable develop energy-efficient plastics, world of addition, from the production processes single-use to

that joint cleaner of heavy-duty for air, pressure reduce clean Zeolyst in and fuels. lower-carbon venture catalyst our In of emission oxide zeolite production are essential focused order used the on are air systems Our provides increasing regulations diesel technologies to products nitrous pollution. meet to vehicles the

and and products growing Technologies sustainable provide for solutions business. of years, zeolite services with we growth Ecovyst We not for the for catalysts. for including critical the also for Ecoservices' the will have provide proliferation be believe Additionally, significant renewable the fuels demand business, but adoption only Catalyst sustainable opportunities ChemXX Ecoservices over several aviation our will of that technologies. renewable fuels leaders fuels, next industry the for to partnered

Regeneration the customers in sales fuels Our metals copper enable support minerals and that efficient by while to virgin Services our produce production essential high higher charging our are electrification, refining today's of the electric more networks. of engines, automobile required associated acid in octane including vehicles content and

fuels technologies, and green of reduction vehicles. production technology in diesel systems enable renewable on heavy-duty and catalyst support catalyst the including used Our many emissions

production Our lightweight silica efficiencies. durable energy of the catalysts greater facilitate enabling plastics, more and also

focused are tie R&D associated our and three-fourth development research sales our of products technologies. approximately projects result, are spend to today intently allocated need XX% sustainable to and Moreover, more technologies greener on is directly meeting to for society's as a As programs two-thirds of our with services. sustainable over that

years. results. I'll a turn second to increase quarter three over of We that Feehan percentage approximately expect that, Mike XX% the financial the With review over next call to for to

Mike Feehan

you, Thank Kurt.

quarter, Kurt business higher growth million, financial setting the venture compared XX% product custom into demand catalyst were Services and $XX prior and polyethylene, and demand the business. quarter XX% Total driven hydrocracking second primarily quarter from Volume noted, sales, year. results. Zeolyst in niche higher by carried continued, Ecoservices including over service acid in for virgin joint the first $XXX stage our Regeneration favorable our the trends sulfuric As the our and share Technologies our to strong million and Catalyst or in up second

higher We than benefit from continue pricing, gas and sulfur, to natural freight. costs, including has more higher offset which variable

$XX adjusted Second year-over-year, up associated with was million, XX% XX%. margin of an EBITDA quarter

compared expansion The nine. as trends XXXX. EBITDA of the was to higher in sales demand I'll the in our the of Turning to businesses. both slide adjusted adjusted increase of of continue a the function quarter EBITDA second components volume highlight

costs while increased, able have to addition, largely In have increased these customers. been through to our costs we pass

the but sulfur selling cost average adjusted prices pass-through reminder, EBITDA, As not impacts does increase in with adversely impact EBITDA a associated adjusted the margins.

million $XX reflects margin this with the of the pass-through basis second While XXX point improvement higher adjusted sulfur sales points, costs, XXX impact pass-through of associated a point the XXXX. decreased basis or margin impact a Thus, the sulfur to XX.X% adjusted quarter been compared of costs. would the to XXX related EBITDA EBITDA basis higher excluding have

Turning to driving $XXX XX% utilization that compared million, and adjusted a basis million XX. last than volume XX% for margin benefit Services, year. XX.X%, Against the virgin applications backdrop that EBITDA sales $XX costs. operating robust to second broad therefore, $XX strong compared high and pricing the an Ecoservices driven million for XXX were year-over-year slide of in refinery our Adjusted it demand EBITDA into quarter Ecoservices prior down of to light industrial more of range or increased year. and of acid the points for was The of exceptionally quarter the favorable Regeneration higher to offset the Ecoservices. higher sulfuric of for by for alkylate was up is demand Sales

decrease. margin the period-over-period basis the for the of points However, higher accounted of pass-through, higher for the Ecoservices have XXX impact for been Adjusting adjusted quarter. pass-through EBITDA sulfur would of sulfur the costs XX.X% for

Technologies to Moving on results XX. Catalyst for the slide

sales custom the quarter, second sales, sales. growth venture and catalyst positive trends increased continued in hydrocracking During silica our associated we catalyst saw niche driven demand, with demand and with by polyethylene in catalyst the higher joint Zeolyst

of prior year, quarter and Catalyst up adjusted the unfavorable the million, contribution compared EBITDA the offset costs. product was partially with by for higher X.X% production sales volume, $XX Second Technologies higher to mix

half over slide Moving and and reduction past on for of provided A few cash strong one business XX. full to first liquidity. comments leverage XXXX turn the leverage generation in the three Positive our of quarters. fundamentals have

of leverage are a times. at ratio We now X.X

M&A be We mid-two repurchase end the any times year, or the potential by activity. the expect in to of share significant excluding

In $XXX at of $XX addition, revolving quarter comprised end, of $XXX in with availability facility. on million cash total liquidity ABL million hand under of our million and

and initiatives ample fund to to have inorganic and to organic We continued have support liquidity share growth repurchase activity.

capital cash a us liquidity to maturities as growth currently flexibility, made businesses, position no this amount existing maintain approach and operational acquisitions to with and organic generation latitude until financial our very as and have serve, With that investment provide end of to strong ChemXX flow balanced our a we to XXXX, to acquisition specifically allows Our broaden clear the free debt capability significant that improvements a initiatives, have scheduled and expand allocation. similar our technology portfolio consider well we or bolt-on last fit strategic the markets access accretive year. to opportunities the maintain

program In for our late opportunistic including in announced sponsors. addition, provides the share negotiated repurchase transactions April $XXX million share repurchases, with

will shares to are to capital look that believe continue undervalued. We Ecovyst communicated, continue opportunities previously to return shareholders. significantly we to for as And

cash believe shares a of a Even is and repurchase the quarter in position. sheet activity, of a this We ended XXX,XXX we repurchased increased we the of quarter million. best our second shareholders. the during the balance result, with with $X.X stronger an use at is cost and prudent a interest second As liquidity

full to XXXX Turning our outlook slide XX. on year

of the balance industrial to activity In continue we to as the year. sulfuric demand we over second the overall for demand of quarter, saw virgin drivers, acid expect in drive terms

alkylate In Technologies, In remain balance and for high addition, associated the Catalyst growth positive. overall trends given of Regeneration demand refinery year. the in solid utilization we requirements expect Services

to high sales, positive driver hydrocracking expect in drive remains refinery catalyst sales. silica We continued utilization polyethylene for growth catalyst a demand and

to for expect be catalyst to positive. our profitability remains given outlook for these now However, some and US Despite XXXX. change-outs high impacts, we pushed Catalyst Technologies timing-related refiners, utilization the

million Given realized raised million of sulfur have a of higher pass-through the to trend, million. $XXX full-year guidance higher pricing $XX range $XXX the to sales including costs, we our of for

to In timing addition, expect XXXX. venture we're of realized in we sales certain on based lowering sales that our Zeolyst joint be

year results demand to to half and of EBITDA a flow stable the year. with $XXX with no free to range guidance to million, remaining the in fall million adjusted first change million third the trends XXXX for of previous quarter, for view are strong million full our Given $XXX we the cash into raising $XXX of generation adjusted $XXX our

Ecoservices the with line from expect with line be back saw will earnings quarter, third the we the be quarter. both quarter, earnings that For to what we anticipate in businesses Then second for in the fourth will lower while call quarter now relatively Kurt and some be third hand first Technologies I'll quarter. of closing in for to the XXXX, more the Catalyst up over remarks. we

Kurt Bitting

results Summing Thank financial you, it quarter. in second Mike. very up, the delivered Ecovyst strong

demand the half year. into to in expect We second the favorable have we of seen continue trends the of the year the half first

for us protection sales levels. inflationary include visibility Our contracts blue-chip order customers with long-standing good with as that provisions as well and relationships and backlog provides take-or-pay near-term an activity

results I in the over As half on underscore we our and we of full-year conviction a in Day believe XXXX a and remains result, and growth despite deliver solid our year-over-year pressures, year our sales that remain geopolitical profitability. expectations positive, the shared our for and Investor inflationary a little track ago. uncertainties full-year outlook first to

value to Specifically, and that growth deliver positioned Ecovyst to shareholders. our is uniquely compelling

more We have efficient economy air, expand and critical end demand to facilitate is leading sustainable need recycling a electrification circular by provide driven are technologies with market markets fuels, cleaner the the supplier we for positions, or to plastics. increasingly renewable for where process

balance balance the our to our even We to as operator pricing and mitigating capitalize contractual flow on we with forward an incremental inflationary for opportunities. are generating open line cost reduction the strong and and are With you providing year we leverage, for debt through providing questions. ask successfully sheet, pressures pass-through positioning cash stronger that, We the of growth will the progresses. updates future us to look mechanisms

Operator

Our from question Aleksey will with Instructions] first come Yefremov [Operator KeyBanc.

Your line now open. is

Unidentified Participant

on Ryan my taking is morning. This Thanks everyone. Aleksey. question for Hello, for this

guess into see how my we just XXXX. the timing to So about share be and potential balance then when those? I able the kind is the repurchases question might I guess of first just around we year for should think of

Mike Feehan

Mike. this Yeah. Ryan, Hi, is

going share we entered We purposes. back announced worth million to around do timing what we're don't articulate drive program again, that and returns. is took then investor saw a exactly second different want it I or think help buy where that have use to but going we've shares use was of for forward. opportunity, certainly to trading couple with this We an that, an this in into share opportunity and price additional shares going on the we're some of to when we'll use $X we the quarter is before explained what it, repurchase to really

don't have out sense, it eye an So we think when plans, we we'll given makes keep for our allocation capital but strategy. direct any most the

Kurt Bitting

Yes. I'll Ryan, question. just the add. for Thanks,

strong I So the our think really second undervalued, is that why management conviction is we this purchase right? stock have in saw you quarter. shares

So -- which boost a deploy believe what but the have strong capital exactly also balance our sheet, which value, us to is flexibility did. we shareholder we to gives we

Unidentified Participant

there? for Great. of attractive Obviously, just I guess still it's capital bit the spoken bolt-on And about then are Great. some faring seeing valuations allocation. you you've Thanks crazy. guess, time? questions this my are, sticking kind how I out just at answer And with are Thank targets M&A before. you. know there. I

Kurt Bitting

then technology-driven, in is which group the the look sulfur of diverse us more in side. Catalyst business and product industrial ability list Technology. pipeline good gives spanning Ecoservices Yes. the There pipeline before of has watch. really bolt-on opportunities I mean, that opportunities talked we've remains large to we opportunity of a really because side -- a to as obviously, it's And continue a much more the Catalyst

And above at of as us in that gives capital stock our look we So ability before, that fund, organic we rich opportunities really of terms do to our growth really allocation area. M&A. to the kind of strategies and all repurchase talked continue our to explore continue in

Operator

you. Thank

with Our Capital next question [BLO] McNulty Markets. will come from (ph) John

now line Your open. is

John McNulty

'XX, BMO. already not the taking I pushed kind guess the of push is a uptick. stuff question of 'XX, on you we okay, strong I to. from BLO, for was Catalyst of Tech XXXX -- kind poised bigger? the out XXXX I wondering I or speaking how a a were but that? maybe I'm Thanks thinking and pretty delays had strong cycle? and to of that enjoy it business actually Well, my a question. kind be pretty know then make gets lengthens up this out it of, just some in Or function 'XX, even pushes everything about guess, does and it out be to the should if

Kurt Bitting

Yes. Thanks the question. for

way we there's which very being spreads. the look by, refinery it think strong currently I demand high at refinery crack is, driven obviously, utilization high is and

changeouts, look to them. this as chosen So conduct refineries to kind temporarily their of they've delay

don't I faster. So we've moving the XXXX. catalyst from that don't this you'll see to in And seen real some slippage But -- harder, all flexibility. as will refineries cycle that see theory, the that deplete because they much of itself have potential will year change really they run to kind data

to and So honestly, and seeing is crack we're wanting believe utilization refining short want the for and just driven, really to -- changeouts -- high the really being opportunistically periods refinery run we customers time. of harder is delay on just spreads what

John McNulty

Got it.

Okay.

really I'm it understanding just kind 'XX, right that? of you So on compounds if

Kurt Bitting

having 'XX sure. mean, I for more fair. yes, that's see that, as Yes, we changeouts,

John McNulty

it. Got

slowing. and any then as that it early may are you there's potentially bit of there environment we for things guess, you certain your up guys help get and questions pop dicey? pretty do that pull? year? about And how the playbook I I half you things a can levers recessionary enact of next understand a thinking but there things macro as I would the you're in potential Okay. around latter this you kind us to year guess if certain would Are know, into resilient, are get general, of little lot

Kurt Bitting

have the businesses experienced Eco I with the actually advantage had and downturn. and being the we've Mike so of for Well, prior years, XX-plus Sure.

recessionary So as resilient fairly the believe scenario. that, you would said, in we a really businesses remain

sustainable end remain you and refinery business, impact because utilization if look virgin significantly to we are at that would Similarly, be side, strong gasoline would the a higher due the think don't Regeneration on group technologies. it diverse the that feel we services users, particularly to supporting impacted of such So low-carbon demand. those that minimal asset and

don't see we slowing those So down.

the a the to demand On side, believe higher are catalysts, we new really of for planned created vehicles was projected diesel with rate units grow, continue continue supply polyethylene a chain years. past heavy-duty us that to the come enable Catalyst solutions issues our And to couple have on. will the to there's and unique heavy over by that backlog is catalyst win of to

So products. demand going firmness we maintain feel that pressure our to that's real for zeolite

we're the feel where we -- we we to capital experience levers temporarily obviously So or your are couple costs adjust of things these question downturns. side. answer do. And that coming be to we can pretty on certain pull, other mean, can we our And demand again, a going can that strategy. reduce on that resilient through have I we there

John McNulty

Great. much color. the very for Thanks

Operator

Thank you.

will Our Angel Morgan next with come question Stanley. from Castillo

line Your open. is

Stefan Diaz

This Diaz Angel. is guys. for my taking question. Thanks in for Hello, sitting Stefan

due any cash function to First higher-priced is just there off, driving inventory? capital the that of higher Is other working guide? free trend? a Or what's flow specific

Mike Feehan

Yes.

flow I guidance. cash the free it think we from change guidance, our previous for didn't

that about joint being feel we some coming going this on out talked businesses that strong any will guidance. the So in of fall a we still growth. to that of and the lowering we're changeouts ZI venture But delays some ZI with cash little for cautious dividends drive those flow are in that the strength generation see the certainly year EBITDA our very We range.

our of of September several we and full year growth. function talked quarters. demonstrated in times. a cash last flow. we've our over generation how cash mean, X.X last I we're times about X.X That's from such earlier a leverage EBITDA for free of strong delevered generation lot excited flow turn end We to the flow very strong So cash the at

So confident there. have our range out that with we very we're

Stefan Diaz

you thus the across do guess, in what And helpful. in Very see I terms of your order far quarter, Perfect. book both segments?

Kurt Bitting

Yes.

thanks -- for the think I question.

very as alluded think being high Regeneration for Mike his driven is of see in the strength for coming resilient to I we mean, lots remains we utilization see, and online polyethylene just in had obviously, bit continue business rates. there about additional from areas And there momentum units the for -- in finally, by for, Zeolyst comments, to US at catalyst a on very prior sustainable the the instance, four is demand little XX% I as the Ecoservices refinery the talked XX%, materials units virgin really the continues -- coming year. crack year with versus was demand. high and here we utilization the then which side. being EIA obviously, low-carbon refinery And QX The reported, on Polyethylene technologies. driven, business very strong spreads. acid just this with refinery

impacting Ecoservices try on well. And delay as been of strong just emission because a catch from But the renewables diesel heavy-duty utilization, bit which the materials obviously, of the pressure we strong as positively hydrocracking a refinery segments remain Zeolyst controls backlog on remains the our there's business. orders, little with for to strong is, products that demands For vehicles. other the

Stefan Diaz

Thank you.

Operator

you. Thank

Our Laurence next Alexander question will come Jefferies. with from

open. now is line Your

Daniel Rizzo

if things to you was how were costs to want how if to pricing and for in they some about soften in I environment? Laurence. It's -- If know wondering kind there Catalyst are? think are should works we just Daniel ease, of a rapid how I price and concessions on were deflationary Rizzo

Kurt Bitting

forward had the we adjustments, I the instituted in -- which very energy comments, that then the No. on increases the mean surcharges. were of place put Catalyst really and as forward-looking opposed is, at our Ecoservices the price we stated pricing Catalyst XXXX in business, Generally, further then mechanical business kind to and pricing as of -- we so looking in has end

that we've really we of don't don't deflationary anything pricing as we've how kind the in quick any or -- been environment, see drop very So judicious price like -- implemented a in we the really a increases. in

Daniel Rizzo

off? But I quickly? happen, energy relatively would roll that the surcharges would And mean,

Kurt Bitting

momentum really gas. I the remains, would depend rates. obviously, don't other see it the remain the would surcharges to We And have of energy this currently, there point on energy. inputs -- rolling at we natural off the at because elevated mean

Mick Feehan

if pricing just wouldn't to to earnings energy profile. So the costs, those our start goes really going mean, I add, down And Yes. down, and it the impact those are cover higher right? surcharges

Daniel Rizzo

Okay. just you mentioned Or not the it M&A really density opportunities. I And then if different? market just something you share? just looking footprint within bit, -- wondering whole was Ecoservices a little like adjacencies to -- like bolt-on that's about into increasing mentioned or or was

Kurt Bitting

we I fit I more that -- use to also really has on saw the to it's that Ecoservices. you the But for based component ChemXX really, really service Ecoservice sulfur the above. overlap the all very mean, it of when with as year, strong the they catalyst a of that business apply the last acquired mean, catalyst business, adjacent was obviously chemistry with activation. of an it well refinery

obviously of your I there's either with sulfur in adjacencies where lots it So to could service things are answer for Ecoservices segment, be the refineries. mean or really. that question, component

Daniel Rizzo

much. Thank you very

Operator

you. Thank

question come Juvekar will Our from next Citi. P.J. with

Your line is now open.

Patrick Cunningham

on Cunningham Patrick for is This Good P.J. morning, everyone.

there tailwinds and supply seems lithium chain EV US. be the build-out in the So of supporting here to some battery major

more of copper how more will participate about lithium? of Are to you to of a you this long-term sulfuric in be looking this curious your medium think Thank to Or are So sort thinking you. for growth play? acid? strategy virgin I'm in

Kurt Bitting

as Gulf two obviously out Yes. form lithium a copper which heavily and Well, Coast participate mining the our as have obviously, -- triangle pretty doing kind the of then little in around heavy we well a sector, as is bit as locations the on but now, assets, mining the right not which which we well. of segment West is, borates you'd say only Coast really,

be So in are, minerals technologies. on, but lithium to and for extremely fuel for goes mining, a as those demand high going agree time there's to only strong I low-carbon that to obviously, copper not mean, other be going demand we

So always ship recently not opportunities -- opportunities, we're ability out, rolls which more of capacity, at gives looking rail as to -- demand doing an executed where the at logistic at which debottlenecking that sector. into on production but we've doubled opportunities, as our at looking that us debottlenecking debottlenecking just the Houston plant, we only

So expand going production to meet we're continue as for to to out, to look it. grows services opportunities and that our

Patrick Cunningham

you. Thank Great.

Operator

you. Thank

Our come Silver with question next David will CL King. from

is line Your now open.

David Silver

the increased And much. particular, somewhat had reduce you you you did for about $XX Zeolyst the on the guidance a end maybe in each question Thank slide I but you GAAP, on it revenue XX. million on JV. very Okay. guidance that provided

So the merely demand? guidance in revenue when down? just but venture. more all Or I'm GAAP attributed quarter that secondly, maybe just to that how couple reduced incremental sulfur. last pass-through? you you. guidance, your it questions, And breaks million time, increase Is that an $XX GAAP wondering of for on a the just side, on sales then raised joint a This is you comment representing Thank Zeolyst

Mick Feehan

David. for Yes. question. Sure, the Thanks

from some with we have seen the benefited strong So sulfur, pass-through pricing, of inflationary on of the overall some the other sales aspects. but side, we've not just

strength volume We well. also some see as

a do down, just up built-in. So depend. from results, And our before, that's sulfur about impacts easing or it the really but sulfur bit a it price might doesn't anticipate a be really talked whether it We we've little lot perhaps standpoint, that margin. impact goes of as will

to driving volumes So strong demand we're comfortable continuing in well we're as resulting as some strong see very factors higher pricing of that. very, that

about of just into has just that earlier those On and the going had timing the to and markets. see impacts XXXX. that nothing products demand delays we lowering what we overall with But earlier. deferrals aspects that again, Zeolyst articulated some our side, some do strength that talked in of in our really more with It's Kurt

David Silver

Okay. Thanks And between here. been jumping multiple apologize, for clarifying calls that. I’ve I two

below little it's times. the be, on -- But for a debt clarification Sorry first about that. off, or Last question about X bit. wording question, trailing definitional to Mike, I'd would guess, a I kind net congratulations XX-month EBITDA say, and so of maybe getting aspects

company, I kind that balanced at hone on just going so bit. to deployment. milestone about your of you mean, phrase capital I'd probably And that's forward, in that, little think just view. a I for my first a like talked But a looking in

the along the going you the are net debt just debt repurchase kind look And deployment this terms debt maybe to viewing you're there's however the And Or to in EBITDA words, tracking? with where it. or the purposes, is ratio for debt capital was your I activity? XX is net of just priority months or reduce ratio. then there's a gross you. trailing you're you debt? formula, In of of idea looking balanced So the case overall EBITDA other the at net the is your how ratio debt share net Thank that which wondering, be

Mick Feehan

you. excited thank and that David, for are Yes, X Sure, Yes. very below we we've gotten times. the fact

getting We're chemicals over I last the to think what that's And than definitely different a few as is again, days. sold in shown since Ecovyst PQ, milestone the we for evident becoming year. one-year we've business us. a it's very the in milestone

as about to about cash as Ecovyst available right? it pay And cash, the leverage $XXX using we the the talked profile hand. So the keep we transactions the have things of sponsors, some and of million process, question, as debt, standpoint, some answer To the well instead private the and we net from as want really strategies, such about about generation down We allocation leverage. right? buyback of so deploy we we to for in aspects reduced using So our is participating potential start talked a our we of with started includes on capital past. buyback, cash it And other up including we've for right? is it may one your of in acquisition in the but end which the calculation M&A to talked program, bolt-on strong,

to use maintain the cash So we that months, hand on coming effectively and over want quarters. it

down paying So some net the opposed to that losing as leverage and metric availability of debt we then do capital look right allocation strategies. our as to do at

David Silver

Thank you. helpful. Very

Mike Feehan

Thank you.

Operator

Thank you.

Khorsand Hamed from with come will Financial. question next Our BWS

Your open. is now line

Hamed Khorsand

Hi.

I you the So one-time Or mix ask a do manage just is about business catalyst how event? what commentary that means? that of and off, being And unfavorable, just to first that? your product wanted on

Mick Feehan

one-time. a of margin sure. mean I a we at quarter. -- did Yes, product Yes, we mix expected We unfavorable as for the see look little that driven. lower than some more the do customer margin is

challenges However, of one-time we're which which very chain, turn the to the costs the were our We year of again, see built do excited of costs. rest a lot about how were demand some easing supply for expect we those out. see some around in of We of strength quarter into the the more products.

confident for for the the second I business the second margins, as than into stronger. that Catalyst grow. half be we're of business to remainder continues to And continue earlier, talk to lot about to year, So expect And a the half business the a grow first as will it stronger being we guided half. very that, the we

a it's your quarter. of a to answer little So the for one-time question, yes, more

Hamed Khorsand

far the still now sales right being customers? customers? that those Is standpoint? up far new competitive come do capture you And renewals able have as how a in as the add could as opportunity you just as about talk And that to able marketplace capability being to from

Kurt Bitting

over and to and execute customers the grow mean an and and traveling partners, -- XX with around first various even my I basically we customers long add term. conviction CEO and the greater meeting the strategy as we the really days Ecovyst Sure. colleagues tell new could And our innovate really spent company's to I have sites. in you I our ability the

continues mentioned, we've logistics as Catalyst side as business we production on I continue the not Ecoservices ability well. as well So debottleneck, as The got just to in to mentioned. to on grow

segment the allows us market with really the line as strength customers segments to really terms. on that our Our higher we And polyethylene contracts customized the as in a up ability us really have negotiate solutions, the more favorable existing for to come growth unique to area those beat gives renewal, continue in really, trend particularly adoption rate. in

Hamed Khorsand

Okay. you. Thank

Operator

Thank you.

questions further in no conclude have your Call Earnings Webcast. We participation. Quarter the XXXX does you the queue Second This and for at Ecovyst this Thank time.

You may disconnect. now

Ecovyst (ECVT) 30 Jul 222022 Q2 Earnings call transcript