Q: In your prepared remarks, you said terminal volumes are expected to see strong performance in the second half. Does that mean further growth or remaining at the 2Q levels? A: (Katherine Gates, CEO) We see the second half as being strong, but I would refer to it as strong as opposed to extraordinary. The second quarter saw several things converge across all of our terminals to give us those very high volumes. I would expect those to normalize to what we consider our normal kind of strong results in the second half. This is reflected in the full-year guidance we are giving for industrial services.

Q: You raised the industrial services segment guidance by about $18 million at the midpoint, but it implies an average of about $26 million a quarter in the back half. Is there some conservatism built in? Are you still seeing terminal volumes of 24 million tons and Phoenix at 22 million tons? A: (Shantanu Agarwal, CFO) A couple of things. In Q2, we saw a significant amount of volumes come through the terminals. Q1 was also pretty strong at 5.6 million tons, and we did 6.6 million tons in Q2. I would say the run rate for the second half is somewhere in the middle, closer to Q1. Also, we had some extraordinary slag sales on the Phoenix side in Q2, which are more seasonal and depend on timing. That helped drive the Q2 number, but it should normalize out in Q3 and Q4, which is why the full-year guidance of $110 to $115 million makes sense.

Q: With Phoenix, are you still thinking that $60 million adjusted EBITDA is a good way to think about it for the year, or have you been able to institute cost savings initiatives that might see some upside? A: (Katherine Gates, CEO) With respect to the synergies we expected to realize, the $5 to $10 million, we have already achieved that this year, and we would expect to see full synergies in 2027. Operationally, we are right where we expected to be. We are seeing strong operational performance from Phoenix, coupled with strong results from our mill customers. Thinking about our original $60-$61 million as a baseline when we announced the acquisition, that is the baseline, but you are certainly seeing stronger performance this year due to our operational excellence and the mills' strong performance.

Q: Did you receive the price kicker on the Granite City contract for the quarter based on the FOB New Orleans index? Are you seeing any benefit in the second half with prices elevated due to the war in the Middle East? A: (Shantanu Agarwal, CFO) Yes, we changed the price index last year to FOB New Orleans. We did see a favorable impact, but not to a great extent. I think it impacted 2 out of the 3 months this quarter. We do see some benefit in Q3, but it can change pretty quickly.

Q: You mentioned that insurance proceeds from Middletown are partly driving the higher expected adjusted EBITDA per ton in the back half. How much are those proceeds, and how should we think about how that flows through? A: (Shantanu Agarwal, CFO) We are not laying out the exact amount because it depends on one plant and how much energy we produce. But if you think about it, we said the impact of the turbine and the weather on Indiana Harbor and other coke plants in Q1 was around $10 million. We did not have power for about 5 months of the year. If you extrapolate that, that is the kind of insurance proceeds built into the second half of the year.

Q: Could you provide more color on the strong operating cash flow guidance increase to $240 to $260 million, given the $65 million of cash receipts that were delayed at the end of Q2? A: (Shantanu Agarwal, CFO) The $65 million of cash receipts at the quarter end were subsequently received in July. We expect operating cash flow to normalize over the remainder of the year, which is why we are increasing our full-year operating cash flow guidance to $240 to $260 million.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .