The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Lee Jagoda - CJS Securities - Analyst
: It's actually Lee Jagoda for Jon this morning. If we could just start with the CTO sales in Q3, can you speak to the volume of CTO sales you had in
Q3? How much inventory you have remaining? And I think prior expectations were that you should be done with all the high-cost inventory
sometime during Q1 of 2025. Is there any update to that?
Question: Lee Jagoda - CJS Securities - Analyst
: Okay. Great. And then just another question on CTO. Where is the underlying price of CTO today in the spot market? And how does that compare
to your expectations from prior quarters in terms of when you need to go back to the market, the spread versus the high-cost stuff that you're
burning through today?
Question: Lee Jagoda - CJS Securities - Analyst
: Got it. And one more from me, and I'll hop back in. Just in terms of the CEO search process, can you give us the criteria for some of the things that
a new CEO might have -- you might want in a new CEO? And any update on when the process might be completed?
Question: Daniel Rizzo - Jefferies - Analyst
: You mentioned during your prepared remarks that you're reviewing portfolio businesses. Does this suggest that you might be selling or divesting
the PC or APT segment? Is that a possibility?
Question: Daniel Rizzo - Jefferies - Analyst
: And then with Industrial Specialties, is there a percent that's all your base at this point, or is the transition still in its beginning stages?
Question: John McNulty - BMO Capital Markets - Analyst
: So I guess the first one is in performance chemicals. So when I look at the improvement from 2Q to 3Q and the margin doubled and yet sales in
some of your higher-margin business on the paving side was actually down a little bit. So I guess can you help us to understand what drove that
improvement from quarter to quarter?
Question: John McNulty - BMO Capital Markets - Analyst
: No, that's helpful. And it definitely was -- obviously, was a big one. So I guess the other question that I had also on PC, I know it's a little bit early in
terms of a guide for '25, but I guess, look, there's a lot of big buckets of improvement to come with CTO lower, Crossett gone. I guess, can you help
to quantify the buckets as we go from '24 to '25?
Let's just say the macro is -- everything is flat, like let's make a no-comp case what's going on in the rest of the world. But on the savings on the
Question: Michael Sison - Wells Fargo Securities, LLC - Analyst
: Nice quarter and outlook. Luis, I guess, when I think about 2025, the last two quarters are running above that run rate. I understand the seasonality
for the first and fourth quarter being a little bit lower.
But when you think about building that bridge to next year that you're walking your team through, just off the cuff, how much of that bridge from
this year could be just what you do on your own? And how much help do you think you need from auto build or the economy?
Question: Michael Sison - Wells Fargo Securities, LLC - Analyst
: Understood. And then you gave a little bit of color on what each of the segments you'd like to see, but can you maybe give us -- I mean, just on
general, when you think about what type of businesses that you or Ingevity should own or want to own, any metrics behind that versus, yes, what
type of growth, what type of return of capital, what type of free cash flow, any color of what is a good business you think that should be kept in
the portfolio?
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