Thank you, operator, and good morning, everyone. Welcome to the Trecora Resources first quarter 2022 earnings conference call.

Presenting on our call today will be Pat Quarles, President and Chief Executive Officer; and Sami Ahmad, Chief Financial Officer. Before we get started, I would like to review the safe harbor statement.

Statements in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon management's beliefs and expectations only as of the date of this teleconference, May 5, 2022.

Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks as well as others are discussed in greater detail in Trecora's filings with the SEC including the company's most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q.

During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued after the close of the financial markets yesterday afternoon.

I'd like to inform you that Trecora Resources intends to file a proxy statement and related proxy materials with the SEC in connection with the 2022 annual meeting of stockholders and in connection there with its directors and certain of its executive officers are participants in this solicitation of proxies from our stockholders in connection with such annual meeting. Stockholders at Trecora Resources are strongly encouraged to read such proxy statement and all other related materials filed with the SEC carefully and in their entirety when they become available as they will contain important information about the 2022 Annual Meeting.

We will not comment on this call and the recent nominations made by Ortelius Advisors, L.P., together with its affiliate, Pangaea Ventures, L.P. The webcast is accompanied by a slide presentation that is available in the Investors section of the company's website, www.trecora.com.

At this time, I'd like to turn the call over to Trecora's President and CEO, Pat Quarles.

Thank you, Jeremy, and good morning, everyone. As always, we appreciate your interest in Trecora and are happy that you can join our call this morning.

We are pleased with our first quarter results. We achieved $5.8 million of adjusted EBITDA for Trecora in the quarter, which exceeded our guidance.

Specialty Waxes had a very strong quarter due to strong wax sales volumes and margins, along with solid custom processing revenues. Global supply chain disruptions continued to support our wax price increases as competitors are constrained in their imports to the U.S.

We expect that to continue. Our Specialty Petrochemicals business saw solid volume growth, which is something we've been speaking to for a couple of quarters, as three of our customers have scheduled start-ups of new plants this year.

We began shipping to two of those plants in the first quarter. You will recall that we have contractually won 95% of all new prime product demand in North America coming to the market from these new builds.

In addition to this organic volume growth, we continue to be able to implement price increases for solvents and have been able to get ahead of feedstock inflation. On our last call, we noted that South Hampton's turnaround was taking place in March, and that is now complete.

The maintenance costs were around $2.8 million, which was significantly higher than we expected. The costs were higher for two reasons: higher costs for labor and discovery of maintenance needs once we got into the units.

In the first instance, we ran into a loss of contractor labor as we were competing with a larger refinery also going into turnaround at the same time. So we had to raise our labor rates.

This also cost us a few days of total project execution. In the second instance, and I put that spending into the good category, we do this preventative maintenance to avoid future issues.

During our inspections, we found needed repairs in advance of any process upsets or events. Sami will walk you through the details of the spending.

Those of you who have followed us know that our wax business is normally in a sold-out position as we are able to sell all that we produce. We had strong wax feedstock deliveries in the first quarter and pulled down inventories a bit.

Coupled with wax price increases and strong custom processing revenue, the segment had an excellent quarter at almost $2 million of EBITDA. We think the performance in both of our reporting segments is reflective of our strong competitive positioning in the market as a high-quality domestic supplier.

Our products are used in the production of a variety of end products, the largest of which are polyethylene production and insulation systems. Both of these end users are seeing above GDP growth due to advantaged hydrocarbon costs in the U.S.

and a focus on improved energy efficiency. We are optimistic that these trends will continue for some time.

So in sum, we're really pleased with where our business is as we speak with you today. We also continue to work hard at maximizing the return on our assets within active growth programs.

At the end of the first quarter, we had 10 projects focused on delivering new products or entering new markets; 17 projects focused on driving asset utilization, which do not require any significant capital investment; and nine projects focused on increasing productivity and reducing costs. During the quarter, we advanced three projects from trial to execution, meaning we received revenue against those new projects.

We also added six new projects to the portfolio overall. Now let me turn it over to Sami to discuss our quarterly results in more detail.

Thanks Pat, and good morning to everyone. I'll start my comments with a discussion of our debt, liquidity and cash flow, and then I'll discuss our first quarter 2022 performance in more detail.

Our debt on March 31 stood at $40.9 million, and balance sheet cash was $31.9 million, resulting in net debt of $9 million. Additionally, our revolver was undrawn and has availability of approximately $75 million.

Cash flow from operations for the first quarter was $7.7 million compared to $3.8 million in the first quarter of 2021. Operating cash flow in the current quarter was driven by strong operating results and inventory drawdown related to the plant turnaround outage in March.

Operating cash flow during the first quarter of 2021 suffered from the significant negative impact of the Texas freeze event, which resulted in a net loss for that quarter of $4.4 million. Turning to CapEx.

Total CapEx for this quarter was $4.9 million compared to $4.8 million in the first quarter of 2021. South Hampton's CapEx was approximately $4.1 million for the first quarter, of which we spent $1.5 million for the ongoing GSPL feedstock pipeline upgrade work.

TC CapEx was $0.7 million for the first quarter. Our CapEx guidance for full year 2022 remains at $12 million to $14 million.

We reported a net loss of $0.4 million or $0.02 per diluted share. This compares to net income in the fourth quarter of 2021 of $5.2 million or $0.22 per diluted share and a net loss of $4.4 million or $0.18 per diluted share in the first quarter of 2021.

Adjusted EBITDA was $5.8 million for the first quarter compared with $5.2 million in the first quarter of 2021 and negative $0.1 million in the first quarter of last year. Recall that the first quarter 2021 results were significantly impacted by the Texas freeze event.

We show the reconciliation to adjusted EBITDA in our earnings release as well as the slide deck. Note that adjusted EBITDA excludes nonrecurring costs, including costs for professional services related to strategic initiatives.

In the first quarter, we had a onetime cost of $0.5 million for donation to the local fire department in Silsbee. The donation consisted of a small parcel of land adjacent to our South Hampton facility, along with a newly constructed firehouse.

This donation is in line with Trecora's history of strong community engagement and support. The donation also provides for a high level of plant safety and ensures rapid emergency response.

General and administrative expenses for the first quarter were $7.8 million compared to $7.6 million in the first quarter of 2021. G&A includes plant-level general and administrative expenses as well as corporate expenses.

Income tax for the quarter was approximately $0.3 million compared to a tax benefit of $1 million for first quarter of 2021. We expect our book tax rate for 2022 to be approximately 21%.

We do not expect to pay cash income taxes in 2022 as a result of our net operating loss position. Now let me walk you through our business segments, starting with Specialty Petrochemicals.

Adjusted EBITDA for Specialty Petrochemicals in the first quarter was $5.9 million compared to $6.4 million in the fourth quarter of 2021 and $2.6 million in the first quarter of 2021. First quarter 2022 results for Specialty Petrochemicals included expenses associated with the large maintenance turnaround as noted by Pat.

The turnaround was completed safely and successfully. The cost for the turnaround were greater than previously expected by approximately $1 million and totaled approximately $2.4 million in the first quarter.

As Pat mentioned, the increase was mostly related to higher-than-expected contract labor costs as well as higher costs for certain repairs arising from inspections and discoveries. We've incurred a further $0.4 million of turnaround-related costs in April and the turnaround is fully complete.

Specialty Petrochemicals total sales volumes in the first quarter of 2022 was 20.2 million gallons compared to 17.2 million gallons in the first quarter of 2021. Prime product sales volume in the first quarter was 16.6 million gallons compared to 14.7 million gallons in the first quarter of 2021.

We're seeing strong demand across most of our end-use markets, including polyiso foam, polystyrene and polyethylene. Focusing further Specialty Petrochemicals feedstock, benchmark natural gasoline feedstock prices have followed a trend of continued increases since bottoming out in the summer of 2020.

Since that point, natural gasoline prices have continued a steady increase. The December 2021 price was $1.72 per gallon, rising to $2.57 per gallon in March.

The average benchmark natural gasoline price for the full first quarter was $2.21 per gallon. Recently, we've seen prices begin to moderate after initially spiking in response to the conflict in Ukraine.

The average April price was $2.26 per gallon. Now moving on to byproducts.

Byproduct sales volume was 3.7 million gallons in the first quarter. As a reminder, byproducts are produced as a result of prime product production, and their margins are significantly lower than margins for our prime products.

The byproduct spread was $0.46 per gallon in the first quarter compared with $0.23 per gallon in the fourth quarter of 2021. Now moving on to Specialty Waxes segment.

Specialty Waxes segment generated revenues of approximately $12.6 million in the first quarter compared to $9.1 million in the fourth quarter and $8.7 million in the first quarter of 2021. Revenue in the first quarter included $10 million of wax product revenues and custom processing revenues of $2.7 million.

Specialty Waxes segment had adjusted EBITDA of $1.9 million in the first quarter compared to $0.2 million in the fourth quarter of 2021 and a negative $0.5 million in the first quarter of last year. First quarter was a solid quarter for TC as strong market demand allowed us to continue to increase wax pricing.

Wax sales volumes grew nearly 2 million pounds from the fourth quarter. Average wax pricing increased 16% from the fourth quarter and more than 20% from the first quarter of last year.

Custom processing fees were approximately $2.7 million in the first quarter of 2022, that's up from $1.8 million from the prior year's first quarter. This concludes the financial summary.

I'll now turn the call back over to Pat.

Thanks Sami. I want to spend a few minutes highlighting the drivers supporting our longer-term growth story and also cover our outlook for the rest of 2022.

Recall last quarter that we outlined the primary elements underpinning our guidance. Those three drivers remain very much intact: demand growth, margin expansion and our internal growth programs.

Looking at demand, an important piece of that is the start-up of three new polyethylene plants, which we expect to utilize more than 3 million gallons per year of our solvents when fully operational. One of those plants started up in the third quarter of last year.

In the first quarter, we shipped the first product to the second plant in preparation for their startup. And early in the second quarter, we have now shipped product to the third plant for their startup.

We expect commissioning of these large plants to commence over the summer and likely continue well into the third quarter. Our demand outlook includes a lot more than those new plants, of course.

Our solvents are also key ingredients in polyiso foam production used to insulate plant roofs and EPS and XPS polystyrene also used in construction insulation. As noted in our investor presentation, these end products are expected to see strong growth over the foreseeable future as the market prioritizes energy efficiency.

In fact, given the surge in commodity prices over the past few quarters, overall demand for energy-efficient solutions in construction markets has picked up even further. We began regular shipments to the new polyiso plant starting up this year in the first quarter.

The second primary driver we noted is margin expansion. We have been successful in keeping pace with or getting ahead of rising feedstock costs.

The strong demand environment, coupled with our market positioning as a high-quality domestic supplier, affords us the ability to be proactive in our pricing. And we intend to continue working to maximize our margins.

Lastly is our growth program, which I touched on in my opening remarks. Our ultimate goal is to maximize the return on our assets, and we continue to be very active in exploring ways to do so through improved asset utilization, new product development, new customer relationships and cost control programs.

Our efforts on this front aided our adjusted EBITDA last year by approximately $7 million. So we certainly think our growth program is generating a solid return, and we will continue to prioritize that work.

That brings me back to the first quarter's results and our outlook for the rest of the year. Our South Hampton plant turnaround is complete, and our operational focus is now squarely on maximizing the return on our assets with additional price increases under consideration in waxes.

Generally, continued strength in all of our key end uses, coupled with the start-ups I've discussed, is expected to drive prime product sales volumes 10% higher than in the first quarter. We've anticipated second quarter adjusted – we anticipate second quarter adjusted EBITDA to exceed $7 million.

We're also raising our full year guidance to a range of $28 million to $32 million of adjusted EBITDA. As you may know, the company's Annual Shareholders’ Meeting will be held in the next several months.

One of our stockholders is seeking to elect three directors in place of the Board's candidates. The company has not yet filed its definitive proxy statement.

Given the contested nature of this year's annual meeting and the fact that we do not have a proxy statement on file, we will not be taking questions today on this call. We will be reaching out to shareholders, and we have mailed out our annual meeting materials and look forward to engaging with our shareholders.

Unfortunately, today, we're not in a position to take your questions. I always end by sharing my appreciation for our people.

The turnaround we completed at South Hampton was the largest and most complex plant turnaround we've ever executed. While we are disappointed in the higher cost than expected, we completed all that work with no injuries.

We have no higher priority than conducting our work safely, and I want to thank everyone involved in both keeping themselves safe and ensuring our safety culture extended to the contractors who are on our site. This concludes our call today, and thank you again for your interest in Trecora.