Ecovyst Inc. Q1 FY2025 earnings call

• Core and industrial businesses showed resilience. Ecoservices sales were modestly up, advanced silicas in line with prior year, and Zeolyst joint venture exceeded expectations.
• Adjusted EBITDA for the first quarter was $39 million, above the guidance range, driven by strong Zeolyst joint venture results.
• Expect higher volume in Ecoservices in Q2 due to lower turnaround activity and seasonally stronger demand for regeneration services.
• Strong cash generation expected for the year, with $230 million remaining in share repurchase authorization, planning to repurchase up to $30 million in Q2.
• Ecoservices has no significant direct tariff impact; advanced materials and catalyst has minimal exposure with an estimated $2M-$3M full-year adjusted EBITDA impact.
• Near-term demand outlook: Ecoservices supported by high refinery utilization and stable gasoline demand; advanced silicas cautious on tariff and macroeconomic impacts, but Zeolyst JV hydrocracking sales strong.

Ecoservices: Sales were $143 million, up 1% compared to the first quarter of 2024. Adjusted EBITDA was $29 million, down from $42 million in the year-ago quarter. Advanced materials and catalyst: Sales for advanced silicas were $19 million, with higher sales of niche custom catalysts offset by lower sales of polyethylene-related advanced silicas. The Zeolyst joint venture's sales were up $14 million, with higher hydrocracking and specialty catalysts sales. Adjusted EBITDA for this segment was $17 million, up $6 million. Ecoservices accounts for approximately 75% of total sales.

• Full-year sales expected $785-$845 million, up $30 million due to higher sulfur cost pass-through. Adjusted EBITDA guidance remains $238-$258 million.
• Q2 adjusted EBITDA: Ecoservices $47-$53 million, advanced materials and catalyst $6-$10 million.
• Third quarter expected to be the peak for both segments, with strong year-over-year volume growth in Ecoservices and hydrocracking/specialty catalysts in advanced materials and catalyst.
• Fourth quarter: Ecoservices with regeneration services and virgin sulfuric acid volume in line but stronger pricing; advanced materials and catalyst with stronger sales in niche custom catalysts including biocatalysis.

• Tariff uncertainties impacting advanced materials and catalyst segment.
• Macro economic conditions potentially leading to weaker industrial demand.
• Potential softer demand in polyethylene catalyst due to prolonged tariff uncertainty.

Q: On the polyethylene catalyst front, have you seen a slowdown tied to tariffs or macro confusion, and any delays from customers ramping up facilities?

A: Haven't seen slowdown tied to tariffs/macro yet. No delays heard from customers ramping up facilities.

Q: On polyethylene catalyst, any exposure to tariffs and outlook for 2026 facility?

A: No direct exposure seen, and no delays from customers.

Q: On tariffs, opportunities for increased volume from U.S. customer base?

A: Ecoservices benefits from U.S. manufacturing positivity; AMAC also benefits from U.S. production and global servicing to avoid large tariff impacts.

Q: Structural price environment for sulfuric in Q1 and expectations for virgin pricing going forward?

A: Sulfur prices increased in Q1, passed through to customers. Ecoservices business largely contracted, pricing mechanical based on indices and pass-throughs.

Q: Synergy potential of Cornerstone acquisition in Gulf Coast?

A: Networking and horizontal industrial synergies expected quickly, including better servicing of customers and bringing manufacturing expertise.

Q: Hydrocracking trends and Ecoservices contractual pricing?

A: Hydrocracking due to refinery turnaround timing and new product uptake. Ecoservices regeneration contracts 90%+ under contract, rotating with indices and pass-throughs.