Operational Performance and Market Dynamics

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• Performance was driven by 7% sales growth, supported by chemical intermediates volume and plant nutrients pricing, though offset by significant sulfur and natural gas cost inflation.

• The company is leveraging a mix of formula-based pass-throughs and negotiated pricing to recover raw material costs, with a large portion of the Q1 shortfall expected to be recouped in Q2.

• Winter-storm-related impacts reached $11 million, slightly above the high end of expectations, though the team successfully mitigated costs by saving $3 million in planned turnaround expenses.

• Plant nutrients saw cautious buying behavior due to farmer profitability concerns and drought conditions, leading to a shift toward selling in-season tons to better manage sulfur input volatility.

• Chemical intermediates benefited from normalized operating rates in downstream MMA and opportunistic spot sales in a tightening acetone supply environment.

• Nylon Solutions is managing a soft demand environment for carpet applications by increasing export mix and aligning resin inventory levels with current market conditions.

Strategic Outlook and Guidance Assumptions

• Management anticipates significant sequential earnings and cash flow improvement in Q2 as the domestic planting season progresses and pricing actions take effect.

• Full-year CapEx is projected between $75 million and $95 million, with approximately 20% allocated to high-return growth investments targeting 20%+ IRR hurdle rates.

• The company expects to reach the low end of its 1.0 to 2.5 times debt leverage target range by the end of 2026.

• The second half of the year is expected to be a primary source of cash flow to meet full-year expectations, supported by seasonal working capital improvements.

• A new Diesel Exhaust Fluid (DEF) expansion project is targeted for a final investment decision in 2027, with operational startup expected in 2029.

Strategic Initiatives and Risk Factors

• Announced a process design agreement to expand the Hopewell ammonia platform for DEF production, targeting the growing Mid-Atlantic and Northeast diesel markets.

• Sulfur input costs surged roughly 140% year over year, with quarterly settlements reaching a record $655 per long ton, creating a significant margin headwind.

• The absence of $20 million in insurance proceeds received in the prior year created a meaningful year-over-year EBITDA comparison gap.

• Section 45Q carbon capture tax credits for 2018–2020 are currently under IRS audit, with $18 million in cash proceeds anticipated in the second half of 2026.