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Ecovyst (NYSE:ECVT) reported a strong start to fiscal 2026, driven by higher volumes and favorable pricing in both its regeneration services business and virgin sulfuric acid operations. Management also highlighted share repurchases during the quarter and discussed a pending acquisition intended to broaden the company’s sulfur-based product portfolio.
Chief Executive Officer Kurt Bitting said first-quarter results were “consistent with the positive outlook for 2026” the company shared in late February. Regeneration services sales rose by a double-digit percentage versus the first quarter of 2025, which Bitting attributed to “high refinery utilization, favorable alkylation economics, and lower planned customer downtime” compared with the prior-year period.
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Virgin sulfuric acid sales also increased significantly year over year, supported by increased mining demand and the contribution from the Waggaman sulfuric acid assets Ecovyst acquired last May, according to Bitting.
Chief Financial Officer Mike Feehan said first-quarter sales were $215 million, up $72 million from the year-ago quarter. He noted that excluding a $33 million impact from higher sulfur costs passed through to customers, sales were up nearly 27%.
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Adjusted EBITDA was $40 million, up 87% from the first quarter of 2025. Feehan said the increase was driven by higher volumes and favorable pricing, partially offset by higher manufacturing costs related to turnaround activity, inflation, and transportation costs.
Feehan said the company benefited temporarily from the timing between when it incurs sulfur purchase costs and when those costs are passed through to customers. He emphasized that the sulfur pass-through effect increased sales by about $33 million in the quarter but had “no material impact on adjusted EBITDA.”
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Discussing margins in the Q&A session, Bitting said the pass-through of sulfur costs is “relatively neutral to EBITDA,” though it can pressure reported margin percentages. He added that the company saw “positivity around overall pricing and volume that dropped straight through the bottom line,” and said Ecovyst expects a favorable price-to-cost relationship to continue through the rest of the year.
On longer-term sulfur pricing, Bitting said sulfur prices were at “really all-time highs” and that the run-up began before the Iran conflict, citing demand for sulfur used in sulfuric acid for metals production, including copper. He also said Ecovyst’s ability to pass through sulfur costs reduces the demand risk seen in more commodity-exposed end markets, because sulfuric acid is typically a small portion of customers’ total costs.
Adjusted free cash flow was $4 million in the first quarter, compared to a $13 million cash use in the prior-year quarter. Feehan said first-quarter free cash flow is typically lower due to working capital timing.
Ecovyst ended the quarter with $237 million of liquidity as of March 31, consisting of $163 million of cash and $74 million of availability under its ABL facility, Feehan said. Net debt was $234 million, and the net debt leverage ratio was 1.2x, unchanged from year-end.
During the quarter, the company repurchased about $36 million of common stock at an average price of approximately $11 per share, leaving $146 million remaining under its existing authorization, Feehan said.
Bitting also pointed to the disposition of the company’s Advanced Materials and Catalyst segment at year-end as a “transformational event” that strengthened the balance sheet and improved flexibility for capital allocation, including organic investment, acquisitions, and returning capital to shareholders.
Bitting said Ecovyst reached an agreement to acquire the Calabrian sulfur dioxide and sulfur derivatives business from INEOS Enterprises, describing it as strategically and operationally aligned with Ecovyst’s sulfur chemistry platform. The transaction, announced the prior Friday, is expected to close by the end of the second quarter.
According to Bitting, Calabrian is the “sole on-purpose producer of sulfur dioxide in North America,” a leading producer of sodium bisulfite (alongside Ecovyst), a leading producer of sodium thiosulfate, and the sole North American producer of sodium metabisulfite. He said the products are used in end markets that overlap with Ecovyst’s current exposure, including mining and water treatment, while also expanding reach into pharma and food processing.
Bitting provided an approximate breakdown of Calabrian’s 2025 sales mix, stating that nearly a third was tied to mining, roughly a quarter to water treatment, about 15% to specialty chemical applications, and the remainder to other areas. He also emphasized long-standing customer relationships, long-term contracts, and sales visibility, with contract structures that include a “high passthrough component” given the sulfur-based cost structure.
Calabrian has manufacturing sites in Port Neches, Texas, and Timmins, Ontario. Bitting said the Texas location is situated within Ecovyst’s Gulf Coast footprint, creating opportunities to leverage existing supply chain and manufacturing infrastructure, while the Canadian site is expected to broaden exposure to Canada’s mining sector. In response to an analyst question, Bitting clarified that Calabrian sells sulfur dioxide to Canadian mines and that those relationships would be new for Ecovyst, whose mining relationships are primarily in the southwestern U.S.
Financially, Bitting said Calabrian’s trailing twelve-month adjusted EBITDA is approximately $24 million. The $190 million purchase price implies a multiple of about 8x trailing EBITDA, “stepping down to roughly 7x” as synergies are captured over the next three years. He said Ecovyst plans to fund the transaction using cash on hand and a new debt offering, with a pro forma net debt leverage ratio expected to be about 2x at closing.
On synergies, Bitting said the company sees both cost and revenue opportunities, including procurement and infrastructure benefits given the shared sulfur-chemistry focus, as well as cross-selling potential through combined sales forces.
Feehan said the company’s updated 2026 guidance does not include contributions from the Calabrian acquisition. He added that disruption associated with the Iran conflict resulted in further increases in sulfur costs versus prior expectations, leading Ecovyst to raise its full-year 2026 sales outlook to $890 million to $970 million, up from the previously guided $860 million to $940 million. Feehan said the higher sulfur costs are expected to be passed through in price and account for $30 million more sales than previously guided.
With first-quarter results ahead of expectations, Ecovyst tightened its full-year adjusted EBITDA outlook to $180 million to $195 million and adjusted free cash flow to $40 million to $55 million. Feehan said stronger-than-expected volume in regeneration services and, to a lesser extent, Treatment Services contributed to the outperformance versus the company’s initial expectations.
In the Q&A session, Bitting said the company chose to remain “tempered” in its outlook given macroeconomic considerations, while noting it raised the bottom end of its guidance range. He also said some positive pricing dynamics in virgin acid were “more based on timing,” with an expectation that some timing benefit reverses in the fourth quarter.
Feehan also noted that while Calabrian is not included in guidance, financing the acquisition with some new debt would be expected to increase annual cash interest expense by roughly $4 million to $5 million.
For quarterly cadence, Feehan guided to second-quarter adjusted EBITDA of $50 million to $55 million, citing higher year-over-year regeneration services sales and higher virgin sulfuric acid volume tied to mining demand and the Waggaman contribution, along with lower turnaround costs versus the prior-year quarter. Third-quarter adjusted EBITDA was also guided to $50 million to $55 million, with higher regeneration services sales offset by slightly lower virgin sulfuric acid volume due to the timing of nylon sales and higher turnaround costs. For the fourth quarter, Ecovyst expects adjusted EBITDA of $40 million to $45 million, reflecting higher turnaround costs, lower expected virgin sulfuric acid volume versus the year-ago quarter, and an expectation that sulfur costs ease from current highs, affecting pricing dynamics excluding pass-through.
Looking to end markets, Bitting said Ecovyst expects U.S. refinery utilization to remain high in 2026 with less planned and unplanned downtime than in 2025, supporting higher regeneration services volume and favorable contract pricing. He also said the company expects virgin sulfuric acid volume growth in 2026 on increased mining sales and a full year of Waggaman contribution, with nylon demand expected to be generally in line with 2025.
Ecovyst Inc is a global specialty chemicals company that develops, manufactures and markets performance-enhancing products for industrial applications. The company’s core offerings include catalysts, phosphorus-based additives and barium carbonate materials, all designed to improve process efficiency, product quality and environmental performance. Ecovyst serves a diverse customer base in the energy, refining, chemical, polymer, food and consumer goods industries.
The company’s Catalysts segment supplies fluid catalytic cracking (FCC) and hydroprocessing catalysts that help petroleum refiners maximize fuel yield, reduce sulfur emissions and meet increasingly stringent environmental standards.
The article "Ecovyst Q1 Earnings Call Highlights" was originally published by MarketBeat.