Ecovyst (ECVT) Q4 2025 Earnings Call Transcript

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Date

Feb. 26, 2026, 11 a.m. ET

Call participants

• Chief Executive Officer — Kurt J. Bitting
• Chief Financial Officer — Michael P. Feehan
• Operator

Takeaways

• Divestiture and capital deployment -- Completed the sale of the Advanced Materials and Catalysts segment for $556 million and used $465 million of proceeds to lower the term loan, yielding a year-end net leverage ratio of 1.2x.
• Liquidity position -- Ended 2025 with $265 million of available liquidity, reinforcing capacity for growth and capital returns.
• Wagaman asset acquisition -- Acquired Wagaman sulfuric acid assets for approximately $40 million, increasing overall volume capacity by roughly 10%, and adding deepwater export capability.
• Share repurchases -- Repurchased just under $50 million of common stock in 2025, with a remaining $183 million under current authorization.
• Revenue -- Fourth quarter sales reached $199 million, up 34% or $51 million, with a 15% increase excluding a $28 million sulfur cost pass-through; full-year sales guidance for 2026 is projected at $860 million to $940 million.
• Adjusted EBITDA -- Delivered $51 million in fourth quarter adjusted EBITDA, an 8% increase, and full-year adjusted EBITDA of $172 million; 2026 guidance indicates a range of $175 million to $195 million.
• Free cash flow -- Generated $78 million of free cash flow in 2025, with 2026 guidance between $35 million and $55 million due to higher capital expenditures and working capital needs.
• Sulfur cost pass-through -- $28 million in higher sulfur costs in the fourth quarter were fully passed through, having no material impact on adjusted EBITDA; full-year sulfur cost pass-through in guidance is approximately $125 million compared to 2025.
• Profitability details -- Adjusted EBITDA margin fell by 630 basis points, primarily due to sulfur cost pass-through, which contributed about 500 basis points of that decrease.
• Turnaround and maintenance -- Anticipates approximately $8 million increase in turnaround costs in 2026, with the first quarter seeing three out of seven planned site turnarounds.
• Sales volume outlook -- Projects increased volume for both virgin and regenerated sulfuric acid, supported by higher mining demand and lower expected customer downtime.
• Growth capital and CapEx -- Plans to spend $80 million to $90 million in capital expenditures in 2026, up by about $20 million, targeting Gulf Coast storage expansion and rail logistics improvements.
• Chem32 expansion -- Completed expansion at the Orange, Texas site supports long-term growth for the ex situ catalyst activation business.
• Guidance detail -- 2026 first quarter adjusted EBITDA expected to be $8 million to $13 million higher than the prior year; second and third quarters anticipated to be seasonal peaks.
• Contractual pricing and customer mix -- Expects ongoing favorable contractual pricing in regeneration services, with stable pricing in virgin sulfuric acid; 15%-20% of contracts typically roll off annually, affecting the pace of repricing.
• Industrial and mining demand -- Mining constitutes 20%-25% of sulfuric acid sales, especially into copper production; demand for sales into nylon expected to remain flat.
• Network effects -- Integration of Wagaman enables internal supply coverage and provides the only company site with a deepwater vessel dock, facilitating export opportunities.
• M&A and strategy -- Remains focused on both organic and accretive inorganic growth, emphasizing further investments in mining and sulfur derivative capabilities.

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Risks

• Feehan cited, "higher planned fixed manufacturing costs, including incremental costs of the acquired Wagaman assets," and noted $11 million in increased costs, principally tied to inflation and Wagaman integration.
• Bitting explained the lower guidance end relies on potential "unplanned customer outages similar to what we had last year, or potentially a macroeconomic event that causes a deterioration in either pricing or volumes on virgin sulfuric acid."
• Feehan said, "we expect adjusted free cash flow to be in the range of $35 million to $55 million," materially lower than 2025, due to higher growth capital spending and a projected $10 million increase in working capital.

Summary

The divestiture of the Advanced Materials and Catalysts segment repositions Ecovyst (NYSE:ECVT) as a focused supplier of sulfuric acid solutions and services, with operations streamlined for growth and capital flexibility. Integration of the Wagaman assets has immediately expanded network capacity, introduced export capabilities, and provided operational synergies supporting future mining demand. Projected increases in mining-related sulfuric acid use, particularly for copper production, underpin sales growth forecasts, while investments in Gulf Coast storage and logistics aim to further boost service reach. The company has initiated organic growth projects, completed key expansion at its Orange, Texas Chem32 facility, and remains committed to disciplined M&A within sulfur-centric businesses.

• Bitting stated, "As we move forward, driving growth for the eco services platform, we will do so with a more stable and predictable business profile, a significantly strengthened balance sheet, and with a cash generation capability and liquidity position that we anticipate will provide for significant capital allocation flexibility."
• 2026 interest expense is projected at $18 million to $22 million following major debt reduction and capital deployment initiatives.
• Bitting described the merchant sulfuric acid market as "leaning towards a balanced market," with stability in pricing but fluctuations across end-use segments.
• Bitting confirmed flexibility, noting most virgin sulfuric acid volumes are not completely fixed by contract, allowing the company to shift product among mining and industrial customers as market conditions require.
• Management plans continued share repurchases in 2026, totaling $25 million to $40 million, and emphasized that future inorganic growth would prioritize accretive, adjacent acquisitions within the sulfur value chain.

Industry glossary

• Regeneration services: Services involving the recycling and reuse of spent sulfuric acid, typically for use by oil refineries in alkylate production.
• Pass-through cost: A pricing mechanism allowing raw material costs, such as sulfur, to be transferred directly to customers, minimizing EBITDA impact.
• Turnaround: A scheduled full or partial shutdown of a production facility for maintenance, inspection, or upgrades.
• Debottlenecking: Projects or upgrades intended to remove process constraints, allowing a manufacturing site to increase throughput without major new capital investment.
• Ex situ catalyst activation: The preparation and activation of catalyst material outside of the customer’s facility prior to shipment and use, increasing operational flexibility.
• Oleum: A solution of sulfur trioxide in sulfuric acid, commonly used as an industrial intermediate and for the production of nylon precursors.

Full Conference Call Transcript

Kurt J. Bitting: Thank you, Gene, and good morning. Overall, we are very pleased with our fourth quarter results and the execution of our strategic objectives. Regeneration services contributed to a solid quarter. In terms of financial results, the fourth quarter was also a significant quarter in the context of our ongoing portfolio transformation. We completed the divestiture of the Advanced Materials and Catalysts segment earlier than expected for a sales price of $556 million, utilizing $465 million of the net proceeds to pay down our term loan, leading to a net debt leverage ratio of 1.2x at year end.

This transaction has transformed the company, initiating a new focus to drive progress by delivering reliable sulfur solutions for clean fuels and critical materials. In 2025, we began executing on our capital allocation strategy with the acquisition of the Wagaman sulfuric acid assets for approximately $40 million and repurchased just under $50 million of common stock. We enter 2026 with a strong balance sheet and significant liquidity that we believe positions us well to continue our capital allocation priorities directed at growth, both organic and inorganic, and the continued return of capital to our stockholders. Turning to the demand trends on slide five, our demand outlook for 2026 remains positive, underpinning the volumetric growth we anticipate.

We expect favorable contractual pricing for regenerated sulfuric acid and stable pricing for virgin sulfuric acid. In 2025, U.S. refineries underwent extensive maintenance, including our customers. This year, we expect our refining customers to run at high utilization, benefiting from favorable alkylate economics. With less planned customer downtime than in 2025, we anticipate higher sales for our regeneration services in 2026. We are also anticipating higher sales of virgin sulfuric acid in 2026, with demand growing in mining, which accounts for 20% to 25% of our sulfuric acid sales, especially for copper, to support energy infrastructure in some areas. For 2026, we currently expect sales into the nylon end-use to be relatively flat compared to 2025.

And while the balance of our industrial exposures are diversified, further weakening of macro factors could translate into softer demand in some areas. The integration of the Wagaman sulfuric acid production assets acquired in May has enhanced our supply network, allowing us to meet anticipated growth in demand for this year. Looking ahead, we anticipate that mining demand for sulfuric acid will increase as many traditional high-grade ores are depleted. Solvent extraction electrowinning processing of copper, which utilizes sulfuric acid for mineral extraction, is expected to become more prevalent. Ecovyst Inc. is well positioned to support expanding mining applications.

Accordingly, we are investing approximately $20 million in growth capital in the Gulf Coast region for projects aimed at increasing storage capacity and improving rail logistics, thereby strengthening our ability to serve the evolving needs of the mining industry. Lastly, the long-term outlook for our Chem32 ex situ catalyst activation business remains positive. With future growth supported by the recently completed expansion at our Orange, Texas site. I will now turn the call over to Michael P. Feehan, who will review our financial results.

Michael P. Feehan: Thank you, Kurt, and good morning. We closed out the year with a solid financial performance in the fourth quarter. Delivering full-year adjusted EBITDA of $172 million, ahead of our previously provided guidance. As a reminder, with the divestiture of the Advanced Materials and Catalysts segment, the results for the business are reported in discontinued operations for all periods. My comments this morning pertain to the reported results from continuing operations. Our strong fourth quarter results were driven by continued sales growth in both volume and pricing, resulting in adjusted EBITDA of $51 million, 8% ahead of the prior year.

We generated $78 million of free cash flow, of which we used $20 million in the fourth quarter for share repurchases. And with the proceeds from the sale of the Advanced Materials and Catalysts business, we paid down $465 million of our term loan, resulting in a 1.2x net leverage ratio, leaving $265 million of available liquidity. Diving a bit deeper into the numbers, fourth quarter sales were $199 million, up $51 million, or 34%. Excluding the $28 million impact of higher sulfur cost pass-through in price, sales were up 15%.

However, this was more than offset by higher sales of virgin sulfuric acid, including the contribution from the acquired Wagaman assets, and favorable contractual pricing for regeneration services, partially offset by higher planned fixed manufacturing costs, including incremental costs of the acquired Wagaman assets, and by unplanned and extended customer downtime. The 8% increase in adjusted EBITDA for the fourth quarter reflects the favorable volume and price impact at the sales level and favorable contractual pricing for regeneration services. While the adjusted EBITDA margin decreased 630 basis points compared to 2024, this reduction primarily reflects a significant increase in sulfur costs, which we passed through with no material impact on adjusted EBITDA.

The pass-through effect accounts for approximately 500 basis points of the period-over-period decrease in margin. Turning to the adjusted EBITDA bridge, I will highlight the major components of the change in adjusted EBITDA for the quarter. As previously noted, sulfur costs in the fourth quarter were approximately $28 million compared to the year-ago quarter, with the pass-through having no material impact on adjusted EBITDA. Our price/cost impact was a positive $8 million for the fourth quarter, primarily driven by favorable contractual price in our regeneration services business.

And while we had lower regeneration services volume in the quarter due to unplanned and extended customer downtime, higher volume from our virgin sulfuric acid sales, including the contribution from our Wagaman acquisition, drove the nearly $6 million volume benefit in adjusted EBITDA. Other costs increased approximately $11 million, the majority of which reflect incremental fixed cost associated with the acquired Wagaman assets, along with higher planned manufacturing costs associated with general inflation. As we move to cash and debt, for the year, we generated adjusted free cash flow of $78 million, which included both continuing and discontinued operations.

We utilized our cash generation to execute on our capital allocation strategy, including the $41 million acquisition of our Wagaman sulfuric acid assets and share repurchases aggregating $47 million for the full year. We currently have approximately $183 million remaining under our share repurchase authorization. With our significantly reduced leverage, our ample liquidity, and in light of our historic cash generation capability, we believe that we have significant flexibility as we look to fund our growth initiatives, both organic and inorganic, and continue to return capital to shareholders through an active share repurchase program.

Turning to our 2026 outlook, we currently anticipate full-year sales to be in the range of $860 million to $940 million, with the favorable volume and price impact at the sales level, and the pass-through of higher sulfur costs of approximately $125 million compared to 2025. As we have previously discussed, we expect higher turnaround activity at our manufacturing plants in 2026, in part due to the addition of the Wagaman assets. Given the scope and number of turnarounds planned for the year, we expect turnaround costs to be higher by approximately $8 million in 2026.

With the higher expected volume, we expect higher sales volume for both virgin sulfuric acid, driven by higher projected mining demand and sales of oleum grades used in the production of nylon precursors, and higher volume for regeneration sulfuric acid, as we expect less customer downtime compared to 2025. We also anticipate continued favorable contractual pricing in regeneration services. With the favorable volume and price impact at the sales level, partially offset by higher manufacturing and transportation costs and additional turnaround costs, we expect full-year adjusted EBITDA to fall in the range of $175 million to $195 million.

We are opportunistically investing growth capital in 2026, including the funding of a number of projects to debottleneck assets and accelerate organic growth. These include the ongoing expansion of tank storage and adding additional rail capacity in the Gulf Coast. As a result of these growth projects, we expect higher capital expenditures this year, approximately $20 million higher, resulting in a range of $80 million to $90 million.

As a result of the higher growth capital spending, as well as an expected $10 million increase in working capital, driven by the impact of higher sulfur costs on inventory and accounts payable and the associated pass-through impact on sales and accounts receivable, we expect adjusted free cash flow to be in the range of $35 million to $55 million. In addition, with the significant reduction in our term loan, we expect interest expense to be approximately $18 million to $22 million in 2026. With our current cash balance and expected free cash flow generation, we plan to continue to execute on our capital allocation strategy, driving value for shareholders through growth opportunities and further share repurchases in 2026.

As we move to the next slide, I will provide some directional guidance by quarter for next year. As you will recall, our results for 2025 reflected significant planned customer downtime, as well as a higher level of planned turnaround activity at our sites. While we have an active turnaround schedule in the first quarter, with three of our seven planned turnarounds, increasing our expected turnaround cost, we do not expect the same negative impact on sales volume from the customer downtime. For the first quarter, we expect continued favorable contractual pricing, and we expect increased volume for virgin sulfuric acid, driven by high alkylate demand and regeneration activity during the summer driving season.

As has been our usual practice, our presentation slides include some commentary around turnaround cadence by quarter for the year. The cost for individual turnarounds can vary by site and scope, and the timing is subject to change. We expect first quarter adjusted EBITDA to be up $8 million to $13 million compared to 2025. We expect the second and third quarters to be peak quarters for adjusted EBITDA consistent with historical experience. I will now turn the call back to Kurt for some closing remarks.

Kurt J. Bitting: Thank you, Mike. We are extremely pleased with our progress in 2025, and I want to thank my Ecovyst Inc. colleagues for their efforts in supporting our customers, delivering on our commercial objectives, and for their contributions as we continue to implement our strategic plan. In a challenging demand environment, our business demonstrated resilience in 2025. Sales of virgin sulfuric acid increased, in part driven by the acquisition of our Wagaman sulfuric acid assets. As the integration of the Wagaman site continues, we are benefiting from the positive network effect Wagaman’s assets have on the reach and capability of our supply chain.

In terms of demand driven by high refinery utilization, the favorable business fundamentals of our regeneration services business remain unchanged. Although our regeneration services business was adversely affected by a significant number of unplanned and extended customer outages in 2025, in 2026, we are expecting growth for both our virgin sulfuric acid sales and the value represented by alkylate economics for our regeneration services business. With stable pricing expected for virgin sulfuric acid and continued positive contractual pricing for regeneration services, we look beyond 2026 and believe the demand outlook remains positive for all of our businesses. The divestiture of the Advanced Materials and Catalysts business at year end represents a transformative event in our ongoing portfolio optimization.

As we move forward, driving growth for the eco services platform, we will do so with a more stable and predictable business profile, a significantly strengthened balance sheet, and with a cash generation capability and liquidity position that we anticipate will provide for significant capital allocation flexibility. This year, we are increasing our capital budget to support targeted organic growth projects that we expect to strengthen our service offering for mining clients. Key initiatives include expanding Gulf Coast storage and optimizing logistics, which will strengthen our service offering. These projects are scheduled for completion in 2027.

In 2025, we repurchased approximately $50 million in common stock, and during 2026, we plan to continue this strategy with additional repurchases totaling between $25 million and $40 million. We plan to take a disciplined approach towards inorganic growth, prioritizing accretive acquisitions that extend our reach to customers and end segments. Concurrently, we remain committed to returning capital to stockholders through an active share repurchase program. In summary, our focus this year will remain on driving profitable growth, positioning Ecovyst Inc. for future opportunities, and optimizing value for the benefit of our stockholders. At this time, I will ask the operator to open the line for questions.

Operator: Thank you, Mr. Bitting. Ladies and gentlemen, at this time, if you do have a question, please press. We will go first today to John Patrick McNulty of BMO Capital Markets.

John Patrick McNulty: Yes, good morning. Thanks for taking my question and congratulations on a solid year. Just wanted to dig into the Wagaman opportunities a little bit more. So you have had the asset for a bit of time, you have made some investments in it. I guess, can you help us to think about how much capacity that has freed up for you and as a result, how much growth you could necessarily get without having to put in much capacity or incremental capacity? Because it sounds like you are even further trying to unlock some flexibility with the storage increase and the rail increase. So I guess, can you help us to contextualize all this?

Kurt J. Bitting: Sure. Thanks, John. So the Wagaman sulfuric acid assets that we added last year, of course, added roughly around 10% of volume to the overall network. It came along with its own customer book and sales, which we are obviously servicing. We are really seeing the positive network effect. It is a force multiplier with our Gulf Coast network where all the sites now can back each other up in terms of turnarounds and so forth, and enable themselves to take advantage of additional opportunities that they may have had to pass on if they were on their own. It fills the cracks in terms of the supply network and allows us to take advantage of more opportunities.

It also is our only site that has a deepwater vessel dock. We actually did export a ship of sulfuric acid there. It adds a lot of capability to our overall site. As we move forward, the way we look at our Gulf Coast network and the investments that we are making, we clearly want to focus the Houston production more to the West.

We are making additional investments that we talked about on our logistics and storage capabilities, which are going to be Houston-based to service more of the Gulf Coast assets with that plant, and the Wagaman assets and the production that brings allows capacity into our Gulf Coast system, enables us to further service that and take advantage of the rising tide on the mining demand. Does that make sense?

John Patrick McNulty: Yes, completely. That definitely helps. And then, I guess, on the regen contract pricing, can you help us to quantify that a little bit? It sounds like you were getting some benefits in 2025. It sounds like that is a continual kind of repricing, but how should we think about the lift in 2026?

Michael P. Feehan: Yes, John, thanks for the question. Yes, it is going to be a similar lift. I think, as we have talked in the past, every year the contractual agreements that we have start to roll off. It is usually between 15% to 20% a year; it just depends on the size of the customers and how they shape up. With basic costs going up, with the inflation and how the contracts are structured, with indexing and other factors, it does provide a benefit. So it is a continued benefit similar to what we saw this year.

That is going to extend into next year, and again, it just depends on timing of when some of those customer contracts come up and when they are put in place.

John Patrick McNulty: Thanks very much for the color. Just regarding the weakness that you are citing in industrial applications—nylon, obviously, we have seen some pretty promising indicators with U.S. PMI inflecting, maybe nylon bottoming out—but are there any specific applications that you want to call out or factors that you would highlight, which is giving you some caution here?

Kurt J. Bitting: Patrick, thank you for the question. Our basket of what we call industrial uses spans a very wide spectrum. As you know, sulfuric acid is the most widely used chemical in the world, and there is anything from core alkali production to nylon to other petrochemicals. There are a lot of different things and a lot of different drivers there. We just see some caution in some of those areas. I do not think it is over-caution or a real worry. We service such a wide and diverse basket of folks there that could be impacted by any of the global things going on between tariffs or some of the downturns in some of the chemical end markets.

For us, our biggest one is, as you referred to, nylon. As we have clearly pointed out, we expect to be roughly on par with where we were in 2025, so we do not really project any degradation there.

Operator: Thank you. We will go next now to Patrick David Cunningham of Citi.

Patrick David Cunningham: Hi, good morning. On a go-forward basis, as you think about CapEx or acquisition multiples, how do the economics of greenfield versus debottlenecking compare to current existing virgin facilities? It seems like there is a lot you may want to do or need to do to meet long-term mining demand.

Kurt J. Bitting: Yes. That is a great question. I think with the way we have treated our sites over the past, I would say, 10 or 15 years, the demand from the mining sector has risen, and we are going to continue to do that—debottlenecking in our sites from both the production standpoint as well as the logistics standpoint. As that rising tide happens with mining, we are able to stay ahead of it by making the logistics and storage investments that we just talked about. We have got some additional debottlenecking that we can do.

We can leverage more of Wagaman’s production into our Gulf Coast system, and we are going to continue that pattern, enabling us to stay ahead of the demand and further service that.

Operator: Thank you. We will go next now to Aleksey V. Yefremov of KeyBanc Capital Markets.

Aleksey V. Yefremov: Thanks. Good morning, everyone. I just wanted to follow up on the same subject. The expansion that you are undertaking in 2026, is it tied to any specific ramp at your customers in mining or elsewhere that you anticipate? In other words, do you have contracts or some sort of indication from your customers that they will need additional volumes for sulfuric acid, specifically as it relates to copper?

Kurt J. Bitting: We have long-term relationships with those customers, and we are confident that the demand will be there. It is a mixed bag of what is driving that additional demand—there are actually some new projects that have come online, and there is also additional demand from existing mines. We have been servicing a lot of these mines. So we feel it is appropriate for us to add this additional capacity. We have the logistics capacity to meet that growing demand long term, coming from our plants in the Gulf Coast.

Aleksey V. Yefremov: And as a follow-up, how would you characterize the current state of the merchant acid market either right now or if you have a view on 2026—is the market sort of long, tight, or about balanced from a supply-demand perspective?

Kurt J. Bitting: Thanks for the question. I would say it is in a balanced position. In our call, we talked about pricing being stable. I would say it is leaning towards a balanced market, however, there are certain segments of the market that are all over the board in terms of the different end-use applications. Some of those are up, some of those may be down. On the whole, our view at this point is a push in general. Other sectors that use sulfuric, like mining, are obviously rising. The long-term trend, certainly as you look at things like mining, is growing demand there.

Operator: We will go next now to David L. Begleiter with Deutsche Bank.

David L. Begleiter: Thank you. Good morning. Kurt, on your full-year guidance, the low end looks maybe a little conservative. What would you need to see to get the low end of the range? And conversely, what type of drivers would you expect to see to get to the high end or above that range for the year?

Kurt J. Bitting: Thank you for the question. Starting at the high end of the range, if there is a lift in things like virgin acid pricing that comes about because of demand growing and it putting upward pressure on pricing in the virgin sulfuric acid market, that would help. Our outlook on regeneration, as we talked about, is expected to run at pretty high utilization. We expect a pretty healthy year in terms of regeneration. I do not think there is going to be tremendous movement on that because that is a stable, contracted business, and we do not expect spot volumes that become available.

On the low end, it would largely be driven by things like unplanned customer outages similar to what we had last year, or potentially a macroeconomic event that causes a deterioration in either pricing or volumes on virgin sulfuric acid. Conversely, if there is some positivity and pricing, or spot, we could trend toward the upper end.

David L. Begleiter: Very clear. And, Kurt, now with the balance sheet restored to strength, how do you see Ecovyst Inc. in three to five years? What do you want to be? Where do you want to go? From an inorganic standpoint, in terms of M&A, what could be additive to the portfolio that you are looking at today or maybe down the road?

Kurt J. Bitting: Thanks for the question. The Board and the management team are carefully looking at our capital priorities as we focus on maximizing the value for our shareholders over the long run. Number one, we see opportunities in front of us in mining and other spaces. That is going to entail us investing in organic growth as we see the demand for sulfuric acid and the sulfur molecule grow. We want to make investments there and continue to be a leading supplier in that space, so we can further service our existing customers or existing industries that we service in a better way.

Number two, growth through sensible and accretive acquisitions—accretive bolt-on acquisitions that make sense that are either adjacent to us from a chemistry standpoint or a service standpoint—to become bigger. And finally, as we have talked about with our flexible capital allocation strategy, we still see value in share repurchases as well as a tool. It is a flexible strategy that allows us to push in all three of those directions, which we think can help us drive better value for shareholders over the long run.

Operator: Thank you. We will go next now to Hamed Khorsand at BWS Financial.

Hamed Khorsand: Hi. Sorry if I missed this, but are you done with the investments you need to make at Wagaman? And in the near future, as you further integrate it, are you able to deliver the sulfuric acid to mining that might be a little bit higher in demand, or are your contracts pretty much fixed on volume?

Kurt J. Bitting: Thank you for the question. Good to talk to you, Hamed. The integration is going well. We talked about it—It has had a positive network effect on our ability to supply our customers in the Gulf Coast. We have owned the site now for about nine months. The site is going to have a maintenance outage this quarter. There are still some additional investments that we want to make in the near future as we further integrate it and try to raise the operating rate on the location.

From an operating and integration standpoint, there will be some investments made, and we expect that there will be further investments necessary if the nylon or industrial end markets are as weak as you are expecting. As we have talked about before, and I know people have followed the company, most of our virgin sulfuric acid business is not 100% supply contracts. We have very close relationships with our customers. They provide us great and accurate forecasts into what they are going to do, not only in mining but in some of the other sectors in terms of industrial. That helps us plan as we look at our year and say where we are going to place our volume.

If there is a downturn or something unexpected, we do have the ability to place some additional product into different end-use segments and move things around—probably not all of it, but some portion thereof—whether it is into mining or other industrial segments that may be in the Gulf Coast. We have some flexibility to move around net volumes.

Operator: We will go next now to Laurence Alexander of Jefferies.

Laurence Alexander: Good morning. Just can you give a higher-level view on your M&A opportunity set? When you look at the landscape in terms of other assets producing sulfuric acid, is there any titration in terms of the quality of the assets? Can you separate out the market in terms of the addressable versus the assets that you would just not like—is it 30% to 40% of the market that you would have no interest in? Or is it potentially all of interest?

Kurt J. Bitting: Thanks for the question. We would generally be interested in all those types of assets because we would have use for both since we are a leader in both spaces. We are pretty broad in terms of our sulfuric acid and the end uses we service. We service a wide swath of the market. We are not just a regeneration sulfuric acid producer or just a virgin sulfuric acid producer like some of the others out there.

I would also say that extends to other exposure in terms of making sulfur derivatives for water treatment or various things where the sulfur molecule is important, as well as services where, obviously, the regeneration services, our hazardous waste services business, our Chem32 businesses all serve very high-value service businesses. Expanding further into those spaces would also be of interest.

Laurence Alexander: Thank you.

Operator: Ladies and gentlemen, just a quick reminder: any further questions today, please press. And, gentlemen, it appears we have no further questions in queue at this time.

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