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CI

Calumet, Inc. /DE (CLMT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue outperformed while earnings quality was mixed: sales of $0.994B beat S&P Global consensus ($0.891B) by ~$102M; S&P “Primary EPS” of -$0.67 was a slight miss vs -$0.66, and S&P EBITDA was materially below consensus given large RINs and refinancing items (see Estimates Context). GAAP results: net loss -$162.0M and basic EPS -$1.87, with Adjusted EBITDA $38.1M and Adjusted EBITDA with Tax Attributes $55.0M . Values retrieved from S&P Global.*
  • Strategic catalysts advanced: first $782M DOE draw funded in February, $110M Royal Purple industrial sale closed in April, and a $150M partial call of 2026 notes was launched (May 24 redemption date). Quarter‑end liquidity was $542.7M .
  • Renewables: management unveiled a cheaper/faster SAF expansion—120–150M gallons by Q2 2026 for $20–$30M of capital, leveraging debottlenecking vs. major new equipment—while maintaining the long‑term goal of 300M gallons by 2028 .
  • Cost discipline: company‑wide operating costs fell >$22M YoY; SPS and PB both delivered YoY Adjusted EBITDA growth despite a seasonally weak quarter and tight WCS-WTI spreads .
  • Near-term stock reaction catalysts: RVO/PTC/BTC regulatory clarity, acceleration to selling 50M gpy of SAF “this summer,” execution on $150M note redemption, and potential additional deleveraging actions .

What Went Well and What Went Wrong

  • What Went Well

    • SPS strength and PB growth: SPS Adjusted EBITDA rose to $56.3M (from $47.2M YoY) on strong specialty volumes and fixed cost reductions; PB Adjusted EBITDA increased to $15.8M (from $13.4M) driven by 7% volume growth and TruFuel momentum .
    • Breakthrough SAF expansion plan: “For $20–$30 million of capital, we expect to increase our SAF capacity to 120–150 million gallons by the second quarter of 2026,” materially lowering near‑term capex and pulling forward timing (quote: CEO) .
    • Balance sheet actions: $782M DOE tranche funded, $110M Royal Purple industrial sale closed, and $150M partial call of 2026 notes initiated at par; quarter‑end liquidity was $542.7M .

  • What Went Wrong

    • GAAP loss widened: net loss -$162.0M included sizable RINs mark‑to‑market loss (+$86.8M expense), debt extinguishment costs ($47.6M), and a $62.2M gain on business sale; EBITDA per S&P was negative in the quarter (see Estimates Context) . Values retrieved from S&P Global.*
    • Renewables margins still soft ex‑tax attributes: MR Adjusted gross profit remained negative (-$8.2M) amid seasonally weak fuels/asphalt and tight WCS-WTI, though MR Adjusted EBITDA with Tax Attributes improved to $3.3M vs. -$13.4M YoY .
    • Logistics headwind: management cited rail congestion out of Q4 turnaround, limiting renewable throughput (10.3 kbpd; below target), though they expect SAF sales to increase late Q2 2025 as logistics normalize .

Financial Results

Consolidated metrics (chronological: oldest → newest):

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$1.006 $1.100 $0.950 $0.994
Net Income (Loss) ($USD Millions)-$41.6 -$100.6 -$40.7 -$162.0
Basic EPS ($)-$0.51 -$1.18 -$0.47 -$1.87
Adjusted EBITDA ($USD Millions)$28.1 $49.8 $56.6 $38.1

Non-GAAP tax-attribute metric (y/y view where applicable):

MetricQ1 2024Q1 2025
Adjusted EBITDA with Tax Attributes ($USD Millions)$28.1 $55.0

Q1 2025 vs S&P Global consensus (all values S&P Global; asterisk denotes S&P data):

MetricConsensus Estimate*Actual*Surprise*
Revenue ($USD Millions)891.4*993.9*+102.5*
Primary EPS (S&P) ($)-0.66*-0.67*-0.01*
EBITDA ($USD Millions)43.5*-71.4*-114.9*

Values retrieved from S&P Global.*

Segment performance – Q1 2025 vs Q1 2024:

SegmentAdjusted Gross Profit ($M) Q1’24 → Q1’25Adjusted EBITDA ($M) Q1’24 → Q1’25Adjusted EBITDA with Tax Attributes ($M) Q1’24 → Q1’25
Specialty Products & Solutions (SPS)$56.8 → $64.9 $47.2 → $56.3 $47.2 → $56.3
Performance Brands (PB)$23.2 → $24.2 $13.4 → $15.8 $13.4 → $15.8
Montana/Renewables (MR)-$4.9 → -$8.2 -$13.4 → -$13.6 -$13.4 → $3.3

Operating KPIs (Q1 2025 vs Q1 2024):

KPI (bpd unless noted)Q1 2024Q1 2025
Total sales volume (bpd)83,602 85,547
Total facility production (bpd)70,801 76,943
SPS – total production (bpd)50,223 55,026
MR – renewable fuels (bpd)8,243 9,932
MR – jet fuel (bpd)355 417
PB – production (bpd)1,583 1,618

Drivers and notable non‑GAAP items (Q1 2025):

  • RINs mark‑to‑market (gain) loss: +$86.8M expense (reducing GAAP EBITDA); RINs incurrence expense add‑back: $30.4M .
  • Debt extinguishment costs: $47.6M; Gain on sale of business: $62.2M .
  • MR PTC “tax attributes” added to Adjusted EBITDA: $16.9M .

Guidance Changes

Metric/TopicPeriodPrevious GuidanceCurrent GuidanceChange
MaxSAF step: SAF capacity and capexBy 2026~150M gpy by 2026 for $150–$250M (second reactor and modules) 120–150M gpy by Q2 2026 for $20–$30M via debottlenecking existing assets; 300M gpy by 2028 unchanged Raised timing and lowered near‑term capex; long‑term unchanged
SAF sales run‑rate (near term)Late Q2 2025Not previously specifiedExpect to sell 50M gpy ratably this summer as rail constraints abate New near‑term sales color
11% 2026 Senior NotesMay 2025No prior redemption date$150M partial redemption at par on May 24, 2025 Announced redemption
DOE loan Tranche 2 (construction draw)2025–2028Delayed draw to fund MaxSAF; DOE at 55% of spend Access expected as conditions precedent are met; spending back‑half weighted 2025; no re‑qualification required Timing clarified; process confirmed

Earnings Call Themes & Trends

TopicQ3 2024 (Then)Q4 2024 (Prior Q)Q1 2025 (Current)Trend
SAF expansion (MaxSAF)Plan for 150M gpy by 2026; 300M long‑term; second reactor logistics key DOE funding confirmed; 2025 MaxSAF capex $40–$60M (pre‑update) New “MaxSAF 150” via debottlenecking: 120–150M gpy by Q2’26 for $20–$30M; maintain 300M by 2028 Accelerating; lower capex
Regulatory (PTC/BTC, RVO)Industry bracing for BTC→PTC; flexibility emphasized PTC accounting approach outlined; add‑back to reflect cash economics “Adjusted EBITDA + tax attributes” adopted; expects RVO/PTC clarity to normalize margins Clarity pending; framing improved
Deleveraging/liquidityExchange/extension; C‑Corp conversion DOE Tranche 1 to cut ~$80M annual cash service; terminate ATM post asset sale $782M DOE funded; $110M asset sale closed; $150M 2026 partial call; quarter‑end liquidity $542.7M Executing
Specialties resilienceRecord production; margins lifted to $60–$70/bbl mid‑cycle Specialty mid‑cycle >$60/bbl despite soft fuels SPS/PB EBITDA growth; cost down >$22M YoY Stable/positive
Supply chain/logisticsPlanned MRL catalyst change; winter seasonality December SAF shipments deferred for BTC/PTC cutoff Rail congestion constrained Q1 renewables volumes; expect better in late Q2 Improving by summer

Management Commentary

  • Strategic positioning: “We closed – and received funding – of our DOE loan… setting the stage for transformational growth in our Renewables business… and we’re announcing a plan to accelerate the MaxSAF expansion… increase our SAF capacity to 120 to 150 million gallons by the second quarter of 2026 for $20 million to $30 million of capital.” — CEO .
  • Cost and demand: “Operating costs were reduced by over $22 million… We sold roughly 23,000 barrels per day of specialty products… among the best sales volume quarters on record, and Performance Brands volume grew 7% year over year.” — CEO .
  • Renewables profitability lens: “The new non-GAAP metric of adjusted EBITDA plus tax attributes adds back [PTC]… we’ll report an EBITDA with tax attributes that includes the PTCs generated… to reflect the steady value generation of the business.” — CFO .

Q&A Highlights

  • PTC/BTC framework and non‑GAAP: Management adopted “Adjusted EBITDA + tax attributes” to align comparability across BTC (2024) and PTC (2025) environments and avoid quarter-to-quarter volatility from PTC monetization timing .
  • Balance sheet actions and targets: DOE funding reduces annual cash service by ~$(80)M; $150M partial redemption of 2026s launched; ultimate goal remains ~$800M restricted debt, with Montana Renewables’ partial monetization targeted around 2026 subject to market/regulatory clarity .
  • MaxSAF capex/timing reset: Debottlenecking existing reactor enables 120–150M gpy by Q2 2026 for $20–$30M; Tranche 2 DOE construction draws expected as conditions are fulfilled; spend back‑half weighted in 2025 .
  • Intercompany mechanics: Intercompany payable from MRL to Calumet reduced to ~$375M by quarter‑end after DOE Tranche 1; MRL to pay ~$(27–30)M interest to Calumet annually; considering pari secured debt at MRL to accelerate paydown .
  • Operations/logistics: Rail congestion post‑turnaround constrained renewable volumes in Q1; plan to sell ~50M gpy of SAF ratably starting summer 2025 .

Estimates Context

  • Q1 2025 vs S&P Global consensus: Revenue beat ($993.9M vs $891.4M estimate); S&P Primary EPS slight miss (-$0.67 vs -$0.66); S&P EBITDA materially below consensus (actual -$71.4M vs $43.5M estimate), reflecting GAAP items including RINs mark‑to‑market and extinguishment costs that management backs out in non‑GAAP. Values retrieved from S&P Global.*
  • Implication: Street models likely need to (a) reflect the company’s new reporting convention (Adjusted EBITDA + tax attributes) for Renewables comparability in a PTC regime; (b) re‑baseline near‑term capex lower for MaxSAF “150” step; and (c) incorporate higher SAF sales cadence from late Q2 2025 alongside deleveraging actions (partial note redemption).

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Revenue resilience amid tough margin backdrops underscores Specialties’ stability; SPS/PB YoY EBITDA growth and >$22M cost cuts highlight execution .
  • Renewables inflection lever reset: the $20–$30M “MaxSAF 150” step (Q2 2026) accelerates SAF capacity for a fraction of prior capex, preserving the 300M gpy 2028 goal .
  • Deleveraging underway: $782M DOE funding cut annual cash service by ~$(80)M; $150M 2026 notes partial redemption launched; additional asset optimization optionality remains .
  • Near‑term catalysts: regulatory clarity (RVO/PTC/BTC), ramp to ~50M gpy SAF sales starting late Q2 2025, and potential pari debt at MRL to accelerate intercompany paydown .
  • Modeling nuance: S&P EBITDA miss reflects GAAP charges; management’s “Adjusted EBITDA + tax attributes” better maps Renewables’ cash economics under PTC—adjust models accordingly (see segment tables) .
  • Watch logistics normalization: rail issues weighed on Q1 renewables volumes; management expects improvement and higher SAF sell‑through into summer .
  • Longer‑term: Montana Renewables partial monetization targeted when market/regulatory boxes are checked (potential 2026), against a lower‑cost, earlier SAF capacity pathway .

Citations:

  • Q1 2025 press release and exhibits (financials, segments, liquidity, redemption):
  • Q1 2025 earnings call transcript (strategy, PTC accounting, SAF plan, liquidity, intercompany, logistics):
  • Prior quarters for trend: Q4 2024 PR/call ; Q3 2024 PR/call
  • DOE/asset sale press releases:

Values retrieved from S&P Global.*