Ecovyst Inc. (NYSE:ECVT) Q1 2024 Results Conference Call May 2, 2024 11:00 AM ET

Company Participants

Gene Shiels - Director of IR
Kurt Bitting - CEO
Michael Feehan - CFO

Conference Call Participants

John McNulty - BMO Capital Markets
Alex Yefremov - KeyBanc Capital Markets
Patrick Cunningham - Citi
Laurence Alexander - Jefferies
Hamed Khorsand - BWS Financial

Operator

Good morning. My name is Madison, and I will be your conference operator today. Welcome to Ecovyst's First Quarter 2024 Earnings Call and Webcast. Please note today's call is being recorded and should run approximately 1 hour [Operator Instructions]. I would now like to hand the conference over to Gene Shiels, Director of Investor Relations. Please go ahead.

Gene Shiels

Thank you, operator. Good morning, and welcome to the Ecovyst First Quarter 2024 Earnings Call. With me on the call this morning are Kurt Bitting, Ecovyst's Chief Executive Officer; and Michael Feehan, Ecovyst's Chief Financial Officer. Following our prepared remarks, we'll take your questions. Please note that some of the information shared today is forward-looking information, including information about the company's financial and operating performance, strategies, our anticipated end-use, demand trends, and our 2024 financial outlook. This information is subject to risks and uncertainties that could cause the actual results and implementation of the company's plans to vary materially. Any forward-looking information shared today speaks only as of this date. These risks are discussed in the company's filings with the SEC. Reconciliations of non-GAAP financial measures mentioned in today's call with their corresponding GAAP measures can be found in our earnings release and in presentation materials posted on the Investors section of our website at ecovyst.com. I'll now turn the call over to Kurt Bitting. Kurt?

Kurt Bitting

Thank you, Gene, and good morning. Ecovyst delivered solid results for the first quarter of 2024. Continued strong demand for regeneration services and higher sales of virgin sulfuric acid drove the favorable results in Ecoservices. Sales within the Zeolyst joint venture were up on higher sales of catalysts used in sustainable fuel production and sales growth in customized catalyst applications. However, sales in advanced silicas were lower due to lower sales of polyethylene catalyst supports, which more than offset stronger sales in finished polyethylene catalysts. As a result, we delivered first-quarter adjusted EBITDA of $45.5 million, up 6% compared to the first quarter of 2023. Cash generation in the first quarter was particularly strong, reflecting the timing of dividends received from the Zeolyst joint venture that were deferred in the fourth quarter due to the timing of working capital needs within the joint venture. This favorable cash generation, along with higher adjusted EBITDA provided for further reduction in our net debt leverage ratio to 2.9 times at the end of the first quarter, down from 3 times at the end of last year. Overall, I'm pleased with our achievements in the first quarter. Our first quarter financial performance provides a good start to the year. We successfully completed two turnarounds in our Ecoservices segment during the quarter while maintaining a very favorable safety performance. In addition, we continue to execute on our long term strategic plan, positioning Ecovyst for continued growth in the future.