MTX - Earnings call transcript Q2 2024 | Minerals Technologies Inc.

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Lydia Kopylova

Good morning, everyone, and welcome to our Second Quarter 2024 Earnings Conference Call. Today's call will be led by Chairman and Chief Executive Officer, Doug Dietrich; and Chief Financial Officer, Erik Aldag.

Following Doug and Erik's prepared remarks, we'll open it up to questions.

As a reminder, some of the statements made during this call may constitute forward-looking statements within the meaning of the federal securities laws. Please note the cautionary language about forward-looking statements contained in our earnings release and on this slide.

certain to uncertainties, forward-looking differ disclose our may statements. filings results actual materially SEC risks which and cause Our from these

to this be found Please comments our website. earnings reconciliation some that in in are GAAP non-GAAP appendix posted and refer our of to can also A which financial measures of financial release measures. presentation, note today our on

up open it to I'll Doug. Now Doug?

Douglas Dietrich

and thanks for today. Thanks, Good morning, everyone, Lydia. joining

Okay.

for today's Let's call. go over quick a outline

a highlights some minutes from for highlights. take second then I'll conditions finish in outlook seeing the transformation on begin Erik open and third the quarter. to reviewing today's provide few levels performance. to earlier markets and that, few end presentation mention XXth this we I started. our our and a that's you the week, MTI of published then update want what leading I'll to our through with we're advertisement year. of also this let's at by I'll and an quarter, the remainder questions. financials is and then Sustainability With currently Report, how higher an been give take happening highlight to for small get a will And meeting which We'll for our the detailed up you

show continues We our delivered and another its strength. to quarter, of businesses portfolio record

we're and also This the how team was an of quarter leveraging our our operational example strong organization. by power of new execution

in High-Temperature in year lower we & in seeing Solutions weakness are Environmental by Technologies sales basis, Infrastructure year Specialty the Engineered lower growth in Additives market. commercial of businesses. Specialties underlying driven grew in were and million. & $XXX slightly than through an segment strong Consumer to due continued Let quarter more our than growth me last The over take offset the the Specialty specific by was some Sales this last highlights. Sales were both you as X% construction Consumer on

Margins expand, level up $XX XX.X% for to our the continued in the income was target last company record of million, and a reaching interim Operating year. this ahead for year. XX% over quarter,

a on improvements. continue strategies saw input business favorable pricing reorganization, of and higher-margin execute cost cost teams operationally, productivity to and variable the is products, captured our our savings. focusing We capture synergies well mix control performing on safety, our and Each from

share increase over per last Operating a Earnings last increasing strong, over $X.XX, XX% also flow cash XX% year. were remained year.

also an with our give want BMI you on update status the to I bankruptcy.

order $XX release, as we this credit As you facility million our process. mediation a for with a establish agreed bankruptcy BMI continued in likely progress see press to We saw the in to and support into to step update possible all the his details go forward process resolution a moving in constructive keep more a Erik as to in will as fair and for parties. minutes. this on few final expeditiously

I'm performance market quarter, facing the solid with and the company this quarter despite track So the challenges. on, overall, a delivering We're so pleased far results quarter few year. after is our

levels higher and We organization forward. and demonstrate have across our even see performance of momentum the businesses across to we going

businesses review a as a business half first strength and of backdrop want the to to use the and few built. our take to we've the the objectives, our making of I strategic we're our results of portfolio minutes highlight against progress model

industrial more consumer today. in are market we industrial across strategy We've invest portfolio built both and like our position instances to profitable growth to new stable in transforming Let volatility businesses begin me by and a of technologies and balance MTI. is truly seeing markets that to ourselves provide growth sectors resilient higher saying platforms that of

and by long-term in markets our reserves. these positions supported and core leading unique potential geographies, We've by is outlined our technologies that mineral our by our

is in good for performance business, significant sustain, going transformation you financial we've type a we of can, some the why can made to want of forward. the half highlight changes performance results strengthen only each example but created, not the our drive. first confident are of new I this Our we've we and positions

of Let's We've global consumer-based assembled start with invested vertically with designed includes the of deliver consumer the long-term and products pet portfolio litter growth. business It side a a footprint. company. in to leading stable integrated a

demand North leverage to trends. pet ownership expand this and in Asia value to continue We and America to of satisfy footprint in from Europe the growing

This is the into the of acquired global and platform, and broader it positioned be for the this tremendous brand a reference over provide launching market for a this integrating business We've optimizing customers. global steadily business integration couple to unified business private we'll outpace our a to parts and new progress reflect months, label and rate. grow made next

that Consumer trends. expanded into personal natural specialty health, are invested macro with like animal oil We've care and our growth & markets -- technologies business in new consumer consumer Specialties aligned businesses higher-margin purification, ingredient and

generator recycling and like new for our packaging the who Additives, standard value become Specialty industry and paper customers industry and sustainable technologies require traction significant for gaining leading are In the NewYield have solutions.

Refractories LSC. side On formulations automated as through equipment systems collection company, Technologies with we've the our positioned the High-Temperature leader and the new markets And in MINSCAN advanced are our transitioning foundry business we data of the world. business around and like our growing industrial

global expanding with cooling to help We're and systems. like heating and for challenges Infrastructure products PFAS & geothermal solve Environmental portfolio FLUORO-SORB remediation our drilling technologies for

are solutions margins positions and generate leading value us. higher customers higher for These for our innovative and generating

half income, is which over first we've An $X.XX, Our year. million margin is of EPS XX%. just operating XX% up over and XX%, last operating generated $XXX up in

of us overhead mix also wastes spending. which remove products over is operational excellence, drive by to helps a growth of efficiencies, and newer continues by this disciplined processes, profitability our our in and This driven culture leverage

$XXX a generating over free year, I flow year, in also throughout our generation increase allocation. approximately we've million generated target balanced and important level it's sales. from capital that strong at are note we cash operations, our cash think profile transformation, to last maintained of historically this our to cash of and approach This X% XX%

to last our year. We returned approximately strength, aligned to $XX million And our million we've sheet of return $XX build expect time, strong foundation at leverage and balance the financial focused organization, This operating culture to this capability and same continue and to EBITDA. strengthened a the our year X.Xx to shareholders upon. is solid

far growth linear ourselves We understood achieving X-year we've a our to when on that results we not put a demonstrate established take solid the journey But that financial would and thus path. our trajectory it. objectives

Personal are strong consumer-oriented demand with trends markets positive The Now for outlook continue products, demand let's to in for pet We're the and for have low year. business. this Household of remainder for Care. and seasonally review seeing our summer & what's litter the end the point our the line. our I'll months happening a product start

the for However, these levels the similar our products, specialty other quarter. sales strong growth the in products on market into demand And their to begins late consumer we third enter season third its for remain path. strong to expect and quarter

X the half. Additives, and we expect generally levels in stable conditions pharma for second past us, remained over below is Specialty the in yet packaging U.S. stable through In market the also years. we saw relatively the food remain and construction in to Residential paper and

second up packaging packaging and strong to And pipeline products we're by in XXXX. year, X have paper we and addition, opportunities the of a the add demand other targeting -- volumes satellites in of which ramping for our continue for the In driven half to will NewYield market.

market second agricultural could regions, on High-Temperature levels. equipment a steel casting steel in for our volumes. half Technologies, our we see all on in metal market except which a production impact half prices conditions In which U.S., We're similar in impact keeping weaker U.S., eye the will also have the first the lower in small

strong But product benefiting past the profit in overall, several installations over we're second And MINSCAN have expecting from the we're performance the this from and half. year line. more completed scheduled we've another

Infrastructure where we product the softer year. is one and conditions line & sales to see continued lower Environmental last compared with market

But order expected began this from delivery second commercial the improvement quarter the second year. slip interest dates the some in rate to construction in later to the market of in see our market, to We sensitivity quarter. the given

late market likely next. is expectation any be early or that year current Our meaningful this inflection will

parts remediation solutions like and other wastewater this drilling solid. remain line this, products Despite product of

product and currently QX and note closely this in I'd line, in to traction. agencies in engaged Environmental product with are engagement projects similar over remain various pilot that recognition gain to gaining We've installation FLUORO-SORB XXX continues U.S. in with our Protection like have and municipal water a We Agency Europe. the stages. completed

ahead sum weakness. relatively few a industrial up, positive for pockets us, one we To market market of a see with additional landscape albeit

but half, bit navigate deliver a half demand it's looks than we picture year. it feel was some markets we record be second the industrial successfully of in first The our less certain one to another can for to

segment Now our and Erik for it our to highlights financial to details review quarter. outlook I'll the Erik? turn over second the -- financial

Erik Aldag

Doug, and segments, the Thanks, for results, overview I'll up I'll morning, third second details an our by providing good quarter wrap begin our of of followed and our the with by on outlook performance everyone. some quarter.

Report. I'll some call turn review, over the my our for latest from Following highlights Sustainability back Doug to

another margin a to $XXX Now XX% We Sales basis EPS, and in results. million, basis quarter EBITDA XXX records expanded on second quarter quarter, Operating million, special let's up points XX.X%. income underlying delivered X% operating second operating increased an excluding record were the versus year year. strong income, And our for the with last over company. last items. to review for $XX

operating margin set the was above For the XX% margin we target first half, XX.X%, well interim for XXXX. our

mix deconsolidation bridge is million, You that BMI the income volume year. last net can of increased in $X the from and impact see operating income the by of which

product newest contributed impact, Specialties & volume driven margin and basis of High-Temperature from of refractory by favorable the Consumer improvement. segment mostly Technologies. automated mix most the higher Together, contributed mix came sales our while of favorable Solutions equipment Engineered volume points within XX The

$X the of basis improvement drove growth XX prices an remaining income, contributing $X additional Higher XXX to improvement and income cost million points of came of operating selling in overall The our million from points margin margin. in basis an position.

and benefits productivity savings, and stable of program. of conversion impact run million variable environment, savings cost generally the rate cost full realizing our input are cost the a We $XX

taking relative benefited to our the We energy heading as did of chain quarter lower team favorable from supply costs job into expectations our rates. a nice advantage also

XXX the in EBITDA quarter XX.X%, million year. over $XXX was up margin points and was basis EBITDA last

was excluding flow share And of last operations year. per cash from prior special XX% than higher with million, remains from $XX $X.XX strong XX% items, year. cash up Earnings

related Before we credit recorded $XX move to credit items million, special $XX OldCo, of entity of me a the second on for committed charges a progress to ongoing our OldCo's special primarily the this of loss minute line process. the in and take company's to million outline segments, to the quarter. to in let We known provided BMI relating as credit proceeding to MTI formerly mediation BMI facilitate bankruptcy which BMI. line is provision

has $XX loaned $X this Thus far, commitment. million of MTI million

was a necessary creation likely in and/or for the the the However, of since trust. a funds full be credited XXX(g) provision consumed amount towards ultimate the process will

with the & Consumer Specialties. beginning let's Now segments, review

changeovers fabric the to personal health. care were Second product such lower of & this U.S. the $XXX underlying several quarter quarter care, year-over-year. basis. X% high-margin in sales in of a were Care the sales line due higher higher Sales higher saw sales animal few Personal on temporarily consumer million, Meanwhile, retailers Cat applications in we and Household litter product X% an timing were as

had Europe paper ramp-up market and We Additives, basis. Specialty in packaging satellites improved were of growth North in by higher volume America newest in on sales our Asia. In the and solid underlying and conditions X% driven an

residential market. seen the serving demand In addition, our for relatively construction products we've stable

quarter pricing. favorable higher Segment operating strong productivity was in driven the and product improved mix, And by our teams last year, costs delivered higher second performance. income higher XX% operations than volume, $XX million a input

well. short, operating XXX In And significantly, from prior up has points margin business XX.X% sales. a improved result, of performing is the basis year to as

remaining saw third expect sales in Looking we to the range. we to sales expect underlying quarter, Overall Household similar Additives, mid-single-digit expect low growth growth XX%. year-over-year in range and Care Personal the versus the margin ahead underlying mid-single-digit the segment, what to second to we year for Specialty around quarter. & remain in In operating the strong last we growth for

Solutions Now to the let's turn Engineered segment.

product High-Temperature Second grew line, below sales last $XXX In year. X% sales the Technologies were quarter X%. million,

bond of customers. systems In stable, In of ag for of and markets we volumes been sand have softening green the have first equipment North with steel foundry and some in the saw half. penetration America, foundry steel Meanwhile, markets continued through driven technical market sluggish demand our differentiated growth exception Asia, our in foundry by Europe, remained services.

we sales driven projects. Environmental forward construction & projects large weakness we last Infrastructure quarter, and lower in commercial to quarter. more X%, in the were you product talked second the When environmental In line, move by by to expected

projects However, we've continued the business. shift in a for seen timing of this

income Technologies, as basis XX% sales, year Operating last up from operating and million, higher High-Temperature XX.X% well mix disciplined XXX control. $XX points driven volumes margin Segment pricing year. was in a up cost favorable and over prior was by of product as

due of mix. a expect level in in to North our with market sales for we conditions the approximately to the we than segment, by second to lower year, in lower expect that's quarter well And similar, infrastructure, target and operating this third quarter, ahead segment than market. normalized as softer environmental although margin the more XX%, Looking with equipment product for conditions the line driven last American ag remain the market conditions slightly and as primarily

balance turn let's highlights. flow our sheet and cash to Now

performance of million, last Our X year. $XXX And up year Cash than operations totaled half double cash we more first flow strong. first from XX%. the cash million, flow been the has for of delivered $XX of the free months

year, we expect in flow million the $XXX For the cash range. full free

CapEx sites. We full refractory equipped $XXX satellites, the we will invest technology half, the rate deployed in installation million in several first our and of we for as recycling paper in between our increase and equipment million including spend as for half CapEx at several The and customer expect NewYield units new capital of of packaging we and delivery those towards $XX high-tech second the year. complete $XX million and with

In have year authorization. To repurchased quarter, $XX dividends. shares X in through returned $XX million million repaid shareholders under repurchases date, $XX the $XX million also second we to debt our and and of million we share

$XXX net Our strong over at million with X.Xx and leverage balance sheet liquidity remains of EBITDA. very

our the third outlook summarize quarter. for I'll Now

we of and We consumer-oriented to last driven slightly growth second saw year, to quarter. last other In litter expect Consumer a in versus sales similar sales Specialties, in than Engineered be products. to level the a year, third low quarter. solid by operating higher sales the & range and In similar sales performance in underlying cat expect of what the expect we we Solutions, lower mid-single-digit

well in sales more normalized as In MTI, for same $XXX $XXX X trends we we and the between remaining With million And $XX sales energy at costs, first summary, expect income between we $XX expect million, seasonally the growth between operating and operating quarters. as we're mix higher some and underlying and million, million expecting $X.XX a saw continuing product strong margin $X.XX. XX%. close to EPS

land delivering third in where for depends range this noted level few well performance markets record would our plays this out, for record a to us profit guidance especially on XXXX. would Regardless, in we've how industrial we Where represent quarter position a the and deliver some softness. demand

Sustainability Report. With our latest the that, some share Doug to back from I'll highlights over turn to call

Douglas Dietrich

Hopefully, But comments making I'll transcript me clear replay Thanks, up on the time. finish then you that very make Erik. this you. some and let our can here, and sure for hear is me

by just But finish we latest to we've published. Report. the go our want before to XXth highlighting I It's questions, Sustainability up that

values, key cornerstones and For strength, the we X.X relations of part facets employee decades, company reports our in engagement, environmental community we've of always run satisfaction, safety, strategy. past have customer been the engagement outlined our financial shareholder stewardship, how how and these of

the is report. a from area. has one reflects And This this done do few that highlights year's and a continues to in year's report broad all company each

And our environmental targets. we've significantly XX date, exceeded frame progress to emissions. first our of we'll in You'll science-based our a the use our We've significant long-term that fact we've to target initiative And of published X continue Scope achieving towards we see XX environmental that initiated goals. new already to XXXX make draft goals.

a our Please MTI our company. take each and in to impact through in our we the for which report operate. a the team's as testament actions help some to have make highlights time employees It's the of read world to positive it our part passion culture true

in attention thank was of audio hear was drill that clean XX-minute fire bit to a to there's transcript sure But It corrected. leisure. replay you your we'll clean making today. here, a or to you couldn't for echo a your sure that that terms you an of brought my read my We remarks. lot for my also I there attention some and probably of a at had you make for remarks very of was a for in want

questions. let's Operator, into move Anyway. now

Operator

a to questions. Instructions] moment for [Operator just opportunity pause signal allow to everyone an We'll for

Daniel from will our question first We with Securities. Moore take CJS

Dan Moore

hear me. clear. can you you Hopefully, and loud heard I

Douglas Dietrich

you Dan? hear you Did can said, well. I hear We anything

Dan Moore

heard all. it I

So start in QX. lot consumer. with hopefully, others businesses, tougher of did as a consumer, well. more A had time Maybe discretionary

business at up maybe businesses any one. a those sort pinch consumer Your tougher Feeling really held well. of all in environment? just That's from

the And to return, expect pet product maybe lead care could detail and bit when more little even changeover, just two, to opportunity? the ultimately, in regarding volumes you revenue a side, greater that

Douglas Dietrich

Yes. Dan. are -- -- things cat are products that litter, into across Care. more strong pharmaceutical consumer-oriented the these in consumer Household continued strong are beverages, & products buying they're They nondiscretionary. folks A driven. Actually, regardless. they're Thanks, They're saw lot not of we demand Personal

item. not typical So downturn your consumer spending type

some saw demand. strong we So

this The to pass in the of doing about what on abnormal. part regularly. that called it give some into of one some nothing pet care? in color this of to plays was just the kind D.J. out happens how changeover, business, D.J., I'll go but year-over-year, what of to comparisons to strengths give we're more it you and that some you care it business, pet time color, you more We've want

D. J. Monagle

question, Thanks for the Dan. Sure.

of seeing market growing us shifts of consumer cat to basically, be able got great the said, take higher that, the advantage what at litter, Just favorable a but market. is label, to private we're than echo of are positions to the that in rest customers. our We're part also branded in have with rate the or we continues the what Doug to especially

just As approaching. upgrade to are partners But general, on half, work we'll second far our strategies. that things this reset see as it's to and products this label good-looking with to of according new And we goes, private and part occasion, products, going in fast will, their changeover those time. our reintroduce strategy time our strategy, from in as

change dimension some during the it we'll of some upgrades, that in at packaging or to of give hygiene complex on more the And just and gets then as just change to be of the you also But change ergonomic as or look in things could to type fragrance. shift broader promote the packaging, home. maybe a do a these greater an it flow simple product

But a products. couple as margins our of this further improve with on it's it's overall, also changes So retailers. upgrade our we going helping different of good grow category some and the

Dan Moore

Perfect. Refractories gears High-Temperature the of Maybe switching part business. in to Tech the

a or upgrades systems say, XX installed Has or fruit years. is low-hanging us? of I in so the been I a about there for of think, Or think There is, picked? growth furnaces. automated ahead forward? we've going X over really slope still dozen your What let's are last so steady, electric arc expectations the

Douglas Dietrich

-- this -- take to arc an ahead road I'll furnace Brett. I'll and There's that there's long here. we're it then us is No, Yes, of just a application. pass over electric

past over them X years. of XX the installed we've think I

the this X, take us that want Brett, But have We kind give There's playing introducing it think we far you in it? can I install do in how this how out Europe. just is to to now I of we're more think, year. some States. another And United and than

Brett Argirakis

safety talked customers. as before, Look, refractory integrated Dan. nonintegrated has more efficient electric from a more Thanks, or steel We've BOF shifted this applications market we've the for for new towards installed furnaces. course, for steel equipment, our or the Sure. about arc of reasons

then what laser shop utilizes the product furnace off to technology, control so of furnace, they and the product spots cameras our they're our the applying very to. And that that it efficient. so the PLC the applies of can our robotic see system make move see to that we combination right it can that's floor the in inside And people the

that signed nice the working Japan. really now, As Doug nice a have we XXXX, we But refractory and market. pipeline also $XXX U.S. period through around probably have supply, hard including million over a we're footprint, in also XX penetrate mentioned, we're in and to agreements, Europe the further

So we have X more agreements signed XXXX. for

or X have install X we mentioned, this Doug to more As year.

units pipeline Japan. X it's actually, we're and that total XXXX. developing for And So Europe in

moving So moving good European because the the expanding same direction. the also They're feel in from is the about integrated market to we nonintegrated.

and needs. be want there them, meet to their so to And we're well to we aligned help

Douglas Dietrich

that changed sale the we've more of not for equipment to, And kind set gathering mentioned, referred refractory formulations, some Dan, bring provide as refractory lease, this some capital that electric as as equipment to a what it. the tech formulations you we're know, then higher and X-year I up, our these but a working to some are on either the the or process. And through only that Brett of intelligence arc market. That's contracts data

at. years it's that And still than kind globally. going X a model gunning, different I in just we're X have or of it a that to expand we some ago think ton per So different of now terms was business room

Dan Moore

go will in through more jump the Excellent. rest? $XX timing of does switching think million kind it Is to likely portion should Maybe to I'll the we of good how queue. fund that settlement? legal of commitment And when around But finally way eventual one might expense any a we just and or gears, to reflects that about this back expectations BMI? put

Douglas Dietrich

structured bankruptcy. and legal going. those a it's that step I a But supportive right Look, process constructive going the now. to we're it's continue keep expenses imagine, very the fund are through to process. can largely, mediation fund in to the to It's Yes, process, as process, think you

mediation like will -- being think will the say year. still to date I can't can a $XX the when feel right right? So it we out. give process you I it or runway toward is -- we're good play of million should process, to going. fund it in as a that that largely how end that's out a good But play this through keep And now we

either we wanted will step, took constructive it this it or And But solves the be we a be the to it it said, probably contributed will going. Erik way, consumed sooner. keep So charge, way. fund like that's to that either itself for account if into mediation why

Operator

our question We from Partners. will take next Mike Harrison with Seaport Research

Michael Harrison

Is another of some a clarification Is it at $XX that the recoup be might Just kind could point? on million. that think that the which you I credit -- at that repaid as that some you point. expectation? classified implies something it line

Douglas Dietrich

expectation million, it into it be the be next $XX now, to is fund will the that a for contribution took charge mediation months, which is over will forward. some full the the trust. ends right reason, process we Or why the either several that Our if for consumed going

if accounted So way, it's be one for the -- process way helps. the fully as consumed into going Mike, either bankruptcy, the I other into to that think or

Michael Harrison

Okay. Understood.

Engineered providing which is the Solutions operating than just QX. the margin QX the lot lower that what just reported a business, On you're here in level, for XX% guidance you and

dramatic bit normalizing. margin more on give the mix such referenced the impact would that is You going as that a you a what about was mix sequentially be have Can unusual little color in to to performance? the QX

Erik Aldag

Erik. Thanks. This Mike. Yes, is

are that the main of the That that the Doug of Part equipment these we're fact some the contributor was these favorable is it and leases. I the sales mix alluded of driven that quarter we sales relative several to mentioned. -- second was of by the some third. mean, more to what in in are expecting outright So

quarter a in the second quarter. second So sales to ones the the in that be margins boost the outright gave happened to and

think, of go equipment structured to those the or planned but as X the sales I year, have, We are rest X most leases. of through

all will an including I say, a on refractory products. different our bit margin. So little they're Though impact of

they nice for stream provide So way. a do that revenue us recurring long-term in

the But we're equipment bit mostly, second QX, I it in well would high-margin little energy to seeing are of terms little the main of then margin and a in a say, as was costs. the energy Those differences. sales QX bit higher quarter,

Michael Harrison

I to Or on then is changeover push had questions on the whole product mechanism care volume I I different Did out am And confused going pull QX? P&L? Or of the forward couple about of hitting QX? thinking timing, did pet right. into this All shouldn't timing it into as a volume your it and that business. volume be

Douglas Dietrich

Yes.

So certainly it so -- probably change want is make is. with deal each few are it a This than this one. bigger had dynamics a of don't different The to customers we over quarter.

larger You're And changing that, box it types, a with different customer artwork, this I we're pails, as technology, case, technology. cetera. et in was D.J., think mentioned, moving a to

would that forecasted, happen. had we So

different. and of Sometimes them duration the are them of the timing

didn't really to fill wasn't the We of anything stocks. the up out anything pull normal. it So in

of that to X fall. the the Erik hit litter. back we happening usually X higher colder will care of that year. start though, things I occurs, are volumes changeovers pet One, for the complete, after that why season months the be changeover in should high say, are or I the half that's There's growing, is mentioning pools. those are late think be changeover pet plus to And X going and going in -- usually The on promotions

the But pull so comparison highlight seasonal I once the volumes with fall. couple X that just will way, And last the have was higher of have we'll likely out to changeovers Mike. year. through, -- a think moved of in It to -- It's nothing and through, another either that those ordinary. the

Michael Harrison

remarks, your launching Can also comment, share in Doug, Got guys there? a it. more there details a you And brand. some new then were was global that you

Douglas Dietrich

how brands? We've right X have this now. brands let's many -- Yes. in We see, company

a then business has million put the acquisition. $XX under as business me, even And name, Pet. really part XXXX not operating started Europe a in in the if XXXX how together, my bought serves Colloid of know XXXX been ACC purchased Normerica. memory you if in in AMCOL So called company brand, We called in called third bought We -- under American it Sivomatic. brand Slovakia a another Concept the we company or 'XX, company

have And we we've And now X them expanding use. we're global now integrated companies. Asia. different So company into into that X we

make we've we've plants, and these reserves starting -- in So support customers automation. that in infrastructure, that globally are We're lowest-cost operate sure all vertically to We've use to they're invested customers, the invested those large to integrated. globally. invested

to to and is targets identity, that can its years, are America, whether done, have next they're integration Europe, over that to, one and grow anywhere. so And in the time our in we have $XXX customers think X North Asia, business, X, million own it million, refer $XXX is our it's now to that which

we're that. it. so kind about on of excited We're working And

tuned. so It next the out another just stay couple on advertisement months. brief out. be that in coming wanted to of brand name give And I should coming

Operator

with We will question now Sidoti. May Kyle take our next from

Steve Ferazani

like Ferazani more little the ask Steve Wanted But a piece. on for smaller pointed when sales the mix the the out product the -- Kyle. wanted detail to to in more this side. I on morning. quarter. your on I a ask is the in little refractory This at a appreciate look margin bridge, the strength bit looks I on on Obviously, bit you was call

that market on to is margin a the cost side? relatively lot a improvement cost the little a go on more came to So bit flat of more those is you impressive, get of highlight there in Can efforts? kind it And side.

Douglas Dietrich

we're going this year. strong, target kind ahead to margins I year And highlighted next of our was and yes, around of for target. year, for the we think that year. were our a that at are we'd on the We be be for probably right year early XX% So XX% and targets

couple you what's a in partially a think things. is from of stabilizing a I But I we've base is of that stabilize base. the the of is great past terms what reflection cost a cost. we've year, job true cost done think terms it inflation behind it's of in that over yes, now But company It's, And saw that seen profitability. really as

for We've markets. in value bit invested more solutions, that different. comments with in higher providing this kind is which are invested those technologies higher-margin margins generate My we addressing little were provide. challenging us We've the issues, of a

that And and mix story so that volume.

over It's positions cost That's So mix mentioned -- we're from but The volume leveraging years. bleaching from it's specialties. animal these from coming high-tech invested -- we from are coming that quarter, this as market. equipment, also we're from coming personal past we've consumer price or a few the ourselves over from, care volume coming in in that coming the and and base. these growing higher-margin it's putting we've products. of some a It's is products the adding is disciplined health, that got coming some

business The well, cat business integrated litter is is which and now cost we've invested higher-margin as reduction, as growing. a in becoming, steadily

gathering generating So products. I yes, and the a base, And from volume ourselves is we year. was it putting And you, cost, what some think in and where cost what to being me are last more higher-margin tell you're from to -- go. seeing there is mix cost yes, you're leads is that base we now seeing this it's leveraged really this are but more benefits stable

we're these leverage sales products as to margins, that a faster these products base. that will overhead growing those fixed about know accrue spending, and and higher-margin they're So continue be over our going -- disciplined grow, as cost you all to to us, pace, they new at

go. to more there's So

Steve Ferazani

Excellent.

of On $XXX flow it sounds the the free more half. like in you cash have target CapEx second to million, go

risk million And that any CapEx half? target? question. X-piece a the is $XXX Where So in second to going

Erik Aldag

I think this Erik. is we -- thanks, Steve,

feel cash in shape. think is The target. levels generating good in are good shape, good the strong company flow I of the and efficiencies pretty is cash flow cash from that working capital we target, about ops

the of quarter, the got ramp-up of in ramping refractory In got a of next CapEx the the units fourth But in up Those couple we've got and areas. first half of referenced spend, terms We've we've and those of of year. the paper I year. the and constructed packaging are MINSCAN. satellites being basically quarter into X the it's second completion And equipment. several in

a kind the up that into of we're do -- it's ramp ramp handful half. would I But debottlenecking first the automation from half CapEx then on. of the expect to it second And and also say, smaller to we projects working

Operator

take will King. next Silver We question from with CL our David

David Silver

like I'd the year. after that the free But kind indicated the to rest which the $XXX year? recent is little start, it this to question it that cash is the likely other going credit get since on million for target, million, right $XXX just looking element $XX at Yes. be inclusive a of year. of the -- Is even of new flow to I be of clarification Maybe to was about that? In a of by the the allocating now, think as million most you're by line you million consumed exclusive end that's $XX BMI? of for the words, Or beginning

Erik Aldag

Thanks, Dave.

of matter a cash flow that's as investment, the $XX on million, the loan. going go into geography to the cash statement, a as Just from

David Silver

Very good.

Okay.

Erik Aldag

the be will cash company. It outflow for

David Silver

and Erik, price/cost the to some Thank an Okay. of your an I cost you is in of things quarter, there's also this for say, in the of and press was clarification. And performance language maybe a that reduction. on of I'd parsing comment element there element from some let's you with release like But year-over-year, Sticking price company-wide the today. perspective. here

costs, to done results cost But played trying SG&A on we've you Or little this quarter. to into been element for were the the reducing were that. elsewhere, a your you good in this lines? maybe you've historically, catch like, So time same the environment actually about let's level? how inflationary prices there on up that price where quarter reductions increasing selected at say, product is and were price/cost at just comment a an results the bit job an But in and

Erik Aldag

Yes.

down. I'll I break So mean just it

that of cost, it terms -- favorability raw we productivity In cost we energy, then cost the and so split split fixed showed of million of between bridge, favorability materials, variable year kind $X was roughly evenly conversion roughly savings. the in saw, last over

Pricing, value. we on price

opportunities providing value we're based that the we that on have, products we're the pricing the So pricing to customers.

cost But in high-margin target, of XXX was when from laid we points portfolio. XX basis points XX% just targets, price/cost, was XXX coming to margin from was we improvement the products, take fixed leverage, a step growth the the assumed from basis basis our back, and improved coming guess, out mix coming points I

you're what mix lot And so of terms our the has margins come I far, seeing think in improvement come a so the seen in from benefit. margin improved you've of the price/cost and from

to that's the cost we about forward, lot as grow. volume efficient fixed leveraging on leverage still we the incremental just That's of with as base a say room to piece cost fixed piece our move go there's on

Douglas Dietrich

And David, also question part I answer think of is, both. to your yes, it's

seeing costs with to some to price or cost capturing able we're normalize strength. While even continue declines, we're

saw, And we up had is and I so you favorable net think $X costs, some price million. as

we where, products mix value, higher price pockets the So more we're there then that mentioned. Erik base coming higher The And priced, our are producing value. margin. products, because they're in increasing pieces are also higher just but are cost from is

we you X.X grow. think to go as that up, these would where coming years we of to it well. I So higher-margin the is products where that ago it's And there's we're from show think Erik's chart continue putting as that as in in mentioned, to first our And we kind exactly targets. come coming margin told ratio you is chart, from more

David Silver

set which very good. in and Very time more, I could, your remarks, if important Okay. did FLUORO-SORB. want I activity a about you this on levels. the bit limits you considered prepared Earlier little I year, ask did touch lines, content to And milestones. EPA did

quickly the of try finalized certain technologies? the end-market words, of potential kind point engagement finalization level improved just the inflection So the take of finalization has about the to EPA of an your customer time of in line? In increase am in point is of interactions inflection to or I has is side the there side what just I improved, happened, of EPA to don't set inflection the other advantage related other point any it engagement, EPA is interactions? Or there words, customer more rules? Or curious -- and from since rules? the since is steady know, has and a an activity overall limits But the since subset a moving more

Douglas Dietrich

Sure.

seen going Let me of I'm level -- certainly over to a it to Brett. -- seen higher guess, pass and activity. David, I interest we've

the have You're I activity. going inflection This really does on interest, take says, when become some looking this increased yes, that thing path. point to seen some huge? But we is think we're that for increased time.

of that Let me have Brett color. some take you through

Brett Argirakis

question. this process. a for you David, thanks as X-year the Sure. is David, know, regulation

last had over running. XXXX. think us are But to quarter, We've mentioned -- takes programs I of that we out XXX had generating increased So level an inquiries. absolutely, we we've over pilot

state and seeing local, federal with are We acceleration agencies.

agreement we've invited been hope on that to them U.S. finalize and and by a we're EPA, fact, negotiating collective In with the currently shortly. development research and

GAC, And utilities EPA, We're being program of actively under law in on utility evaluate participating support infrastructure working the from with are that pilots, are PFAS which medias, will various that course, and group. supported X EPA removal them, this there's technical ion the and bipartisan FLUOR-SORB. exchange

are PFAS water remove also seen to systems in active this X uptick drinking Internationally, in water drinking we've and an from that water. of In additional have we drinking full-scale systems running full-scale European FLUOR-SORB pending X countries various piloting addition, year. active

performance I'm in a actual to inflection our and We're point, it feedback, and expect over process should FLUOR-SORB on not when the to to out to see we slower product. confident the we're then this sure in based will start The And move continue revenues that so And time, seeing climb. really prove we piloting forward. happen.

David Silver

it what be the expectation that, content interest just And international is then U.S. touch they prepared you stringent? the in to that how might has on geographies, sense remarks, other remarks. less to might done? the Europe Europe or your or limits to stringent, in a or as as Is will -- What stringent how relative more how But did EPA Brett. your follow-up brief U.S., prepared relative your Doug's proceed proceed on

Brett Argirakis

my various end Yes, guess, up, the as sure I'm similar. I responses far seeing where where not I'm We're this the is But fairly it in ends to will at it sure. up, David, be will not some but in U.S. similar countries. point, as it suspect it

Douglas Dietrich

Yes. kind are The lowest detectable per the guidelines trillion. EPA parts limit, U.S. of

similar the to PFAS removing own capable probably expect our we'd world. around on FLUOR-SORB So that its But be levels. nonetheless, to is those of

the non-detect the lowest down are to a to what so got or detectable or take product And guidelines it able is, to regulation we've of regardless limit. great be

David Silver

Okay. for And would and a just question pick Fine. performance it Additives I D.J., apart Specialty have just bit. to last little the be maybe

last year, the growth. oranges kind of consecutive strip I there's maybe apples still revenues the X kind of mid-single-digit cetera. this quarter et prior So to in BMI But revenue is out, the of of included I think with quarters if it

related of through scratching my in costs and of I'm the is the growth, And pass-through is of new volume start-ups that ramp-ups of wondering, head and that I'm satellites? lower of or costs? actually it pass underlying from is current growth between the -- environment. thinking we profitability just I'm volume an growth either in current revenue is it basis kind Is the how higher satellites PCC But environment, on or Or from higher? relationship and

D. J. Monagle

Yes.

So thanks for the question, David.

BMI, was a minor in Just our where of results. setting there is baseline. BMI another quarter the

is it removed. was quarter So fourth when

things question, your there's X that. say But that would driving I to the real meat behind

first satellites The that online. the come and is have packaging paper

as this X that Doug on his then, And on in others we've brought that mentioned a got in had was China X another came top prepared remarks, construction. of are in year, we year. in couple So of that last

of contributing to this. And are so those all

that the products. margin would more to more while in an we conversion There's that's any we these se, also show of that would also value-added items construction revenue per to or And announced a under not one earlier, is increase you volume convert as show NewYield.

to So an example. examples There that's regards. that. as would also are several contribute And other that that in helping I give those

is got, The [ David, terrific operation volume. our Coast West had that other ] we've has gem performance

general just and some market construction in there's -- that that so it's mostly And modifications made that also by the plant through but needs. performance product it's meet -- great the it's industry, we've

also that's So well. contributing growth the volume as to

business the and X is the satellites, from quite extremely the packaging well. perform steady strong. continues coming Lucerne BMI, growth to of the Valley paper And for So paper pipeline more for comparisons quarter

a of in are has the So a things them as packaging. packaging, of I'm I opportunities hoping of talk NewYield XX-plus percent of that paper I'll would be say opportunities Quite saying pipeline the of sorts and few to dozen the of mix got opportunities. probably it, in those quarters come. we couple same

so long strong And well. pretty as the term looks

Operator

next will our question We Seaport Mike take Research with Harrison from Partners.

Michael Harrison

me pricing. on And than ago Just one pricing there business. more a go couple have quick mechanisms paper PCC question faster David's on several of business. up contractual some for we to following just the years a kind you that of where costs one within back quarters there, lot I'm were curious if up were going

were in margins higher costs paper now performance point moving that moving you and strength prices that you've lower back at negatively costs the Your a business? margin or Or PCC are right have you got are are still of while recaptured impacted being this some actually stable that. At unusual point, such a level? those where by you're higher getting margins at normal

Erik Aldag

Yes, is Mike, this Erik.

came a back rates with in I the down quarter, no, of our we're to paper fact, our And bit in our packaging million and $X down, pricing energy European cadence. or PCC normal say pricing, the So would pass-through kind coming range. in

kind that absent mechanisms that, of So for our have a of little been now pass-through But normal overall cadence more higher. for would pricing a it's the price business.

Douglas Dietrich

reiterate have annual on here that are of Mike, happened. basis. that our semiannual these some or contracts dynamics, older couple an of in basis prices A set just Historically,

over those sometimes whether years, quarter it's a a and they've As we've with tighter month. the costs, alignment to past a changed renewed several that

some delay up through So some we're mentioned, lag on we had as that down, of that. on the Erik that but largely way we the and of saw way

now. I of normal business. downs a that reflecting -- some And you're but think are regional really now margins it's ups happening, what's seeing there's right maybe that's this think the normal and cadence I

generate some we said, tend higher we've out coming to like got can NewYield, those have new margins. and packaging, some That products

in the there some we future. So have upside

Operator

to would any back turn we this further remarks. not At call to any the do closing questions. I time, like have Mr. for Dietrich

Douglas Dietrich

issues of technical we transcript like. there's that do make sounds sure website much joining make that clear you it you, some call any clarity. the very reflects will What posted We that for that a for you thank and very apologize for sure today. the replay our Everyone, for caused is on

And for much talk very you in months. you again joining Thank X we'll today. to

Operator

today's your you call. for concludes participation. This Thank

may You now disconnect.

Minerals (MTX) 26 Jul 242024 Q2 Earnings call transcript