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    CLMT
    Earnings call· Mar 2026(Q1 FY26)

    Calumet, Inc. /DE Q1 FY26 earnings call CLMT

    May 8, 2026 Source

    Executive summary

    Calumet Q1 FY26 — Strong Market Tailwinds and MaxSAF 150 Expansion

    Calumet navigated a strategically pivotal quarter marked by a favorable renewable fuels market outlook following the EPA's Set 2 RVO and strong commodity spreads. Despite operational challenges at Shreveport and planned expansion work at Montana Renewables, the company is well-positioned to capture tailwinds, accelerate deleveraging, and pursue long-term growth. The MaxSAF 150 expansion is now operational, and the Specialties business demonstrated resilience in a volatile cost environment.

    Highlights

    5

    • Renewable fuels market outlook reset by EPA Set 2 RVO, supporting strong stable margins.

    • MaxSAF 150 expansion commenced operations in early May, expected to deliver a 4-5x increase in SAF volumes.

    • Specialties business demonstrated $54/barrel margins despite rapid crude cost inflation, with over 20 price increases implemented.

    • TRUFUEL business posted record sales volume in Q1 FY26 and April, benefiting from strong customer demand.

    • Company entered crack spread hedges for 2026 and 2027 fuels production at attractive levels to accelerate deleveraging.

    Concerns

    4

    • Adjusted EBITDA with tax attributes slightly down to $50.1 million in Q1 FY26 from $55 million in Q1 2025.

    • Operational event at Shreveport due to organic chlorides caused a loss of ~750,000 barrels of production and over $30 million in lost opportunity.

    • Specialty margins were temporarily compressed due to extreme crude oil price spike, with Performance Brands experiencing a 60-90 day lag in price increases.

    • Realized hedge losses of approximately $6 million during the period from early 2026 crack spread hedges.

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Specialty Products & Solutions
    Underlying business remains strong. Integrated business allows production of fuel and taking advantage of high-margin fuel environment. Specialty margins were temporarily compressed due to extreme crude oil price spike, but commercial team implemented over 20 price increases. Expect to see future benefit in Q2.
    Adjusted EBITDA Q1 FY26: $44.3 millionAdjusted EBITDA Q1 2025: $56 millionSales volume: exceeding 20,000 barrels per day (6th consecutive quarter)Specialty margins: $54/barrel
    		———$44.3 million Adjusted EBITDA
    Performance Brands
    Continues to benefit from commercial excellence strategy and premium brand TRUFUEL. Results partially impacted by margin compression and normal price lag (60-90 days). Successfully offset lost EBITDA from Royal Purple Industrial divestiture through disciplined cost controls and brand growth. TRUFUEL posted record sales volume in Q1 and April.
    Adjusted EBITDA Q1 FY26: $12.6 millionTRUFUEL sales volume: record
    		———$12.6 million Adjusted EBITDA
    Montana Renewables
    MaxSAF 150 expansion delivered on time and on budget. Stepping into market with significant tailwinds from transformational product mix shift. Expects meaningful cash flow generation. Business is at a positive inflection point with new RVO and diversified customer portfolio.
    Adjusted EBITDA with tax attributes Q1 FY26: $10.2 millionAdjusted EBITDA with tax attributes Q1 2025: $3.3 millionCalumet-owned 87% basis Adjusted EBITDA with tax attributes: $8.8 millionSAF volumes increase: four to fivefold (annual run rate basis)SAF premium over renewable diesel: $1 to $2 per gallon (contractual)
    		———$10.2 million Adjusted EBITDA with tax attributes
    Montana Asphalt
    Results in line with prior year, reflecting typical seasonality and price lag impacts in wholesale asphalt business. Moving into seasonally stronger Q2 and extremely supportive crack environment for fuels.
    Annual EBITDA (normal environment): $30 million to $50 million
    		————

    Operational metrics

    16
    Adjusted EBITDA with tax attributes
    $50.1 milliondown from $55 million in Q1 2025
    Q1 FY26

    Company-wide adjusted EBITDA.

    Production loss due to organic chlorides
    750,000 barrels
    Q1 FY26

    Caused by organic chlorides in crude stream, resulting in over $30 million of lost opportunity.

    Production volume
    50,000 barrels per day
    April

    Plant is now fully operational after resolving organic chloride issue.

    Specialty margins
    $54 per barrel
    Q1 FY26

    Achieved despite rapid crude cost inflation, testament to commercial team's nimbleness.

    Sales volume
    exceeding 20,000 barrels per day6th consecutive quarter
    Q1 FY26

    Accomplished despite Shreveport outage primarily impacting fuels.

    2:1:1 crack spread
    over $42 per barrelnearly double what we saw on average over 2025
    FY26

    Reflects attractive high-margin fuel environment.

    Crack spread hedges
    10,000 barrels per day
    2026

    Entered at attractive historical levels to accelerate deleveraging and derisk fuels production.

    Crack spread hedges
    10,000 barrels per day
    2027

    Next tranche added recently at higher levels.

    Realized hedge losses
    $6 million
    Q1 FY26

    From 2026 crack spread hedges.

    SAF volumes increase
    four to fivefold
    annual run rate basis

    Expected post MaxSAF 150 expansion.

    SAF premium over renewable diesel
    $1 to $2 per gallon
    null

    Underpins strong position with diversified customer portfolio.

    Capital expenditure
    $15 million
    Q1 FY26

    Related to MaxSAF 150 expansion.

    Annual EBITDA
    $30 million to $50 million
    annual

    Expected in a normal environment.

    Working capital draw
    —
    Q1 FY26

    A big draw on working capital during the period from the run-up in crude price, exacerbated by Shreveport downtime. Expected to unwind in April/May.

    Tack-on debt
    $150 million
    earlier in the year

    Used to pay off some of 2028 debt when call protection steps down in July.

    Lost EBITDA offset
    —
    within a year

    Successfully offset the lost EBITDA associated with Royal Purple industrial business through disciplined cost controls, growth of trusted brands, and strong customer relationships.

    Deals & partnerships

    1
    nullSale of Royal Purple Industrial business.

    The results of Royal Purple Industrial business are reflected in Q1 2025 financials but not in the current period following the divestiture in March.

    Capital programs

    1
    MaxSAF 150 Expansioncompleted
    Period spend: $15 million
    Funding: cash within MRL on the balance sheet

    Benefit: four to fivefold increase in SAF volumes on an annual run rate basis

    Delivered on time and on budget. Focus now on producing increased SAF volumes and ramping production.

    Risks & headwinds

    4
    Operational disruption and production loss due to organic chlorides in crude stream.Q1 FY26

    loss of about 750,000 barrels of production, over $30 million of lost opportunity

    Mitigation: Identified cause and acted swiftly to manage risk, placing directly impacted naphtha processing equipment out of service and examining entire facility. Plant is now running about 50,000 barrels per day. Installed redundancy in sampling and quality monitoring.

    Extreme spike in crude oil prices leading to temporary margin compression.Q1 FY26

    crude oil prices increased over 50% in the 2-week period

    Mitigation: Commercial team rapidly executed over 20 price increases across product lines. Expect to see future benefit in Q2. Performance Brands has a 60-90 day lag for price increases.

    Realized losses from crack spread hedges.Q1 FY26

    $6 million

    Mitigation: Hedges were put in place at attractive historical levels to derisk a portion of fuels production and accelerate deleveraging, while leaving plenty of room for upside on remaining production.

    Potential for massive volatility due to ongoing global conflicts.near-term

    very volatile out there, meaningful conflict going on

    Mitigation: Confidence in commercial team to react accordingly, as demonstrated by rapid price increases.

    What to watch in Q2 FY26

    5

    MaxSAF 150 production ramp-up and performance validation

    next couple of months
    Currentcommenced operations in early May, finishing the ramp-up, performance test design that's probably, maybe 4 weeks out
    TargetConsistent product quality, steady production ramp, successful performance test.

    Why it matters

    Verifies the successful execution of a major capital project and its ability to deliver the expected 4-5x increase in SAF volumes, crucial for MRL's earnings power.

    Through the initial operating period, we'll continue to condition the catalyst, complete a performance validation and deliberately and steadily ramp production to ensure consistent product quality for our existing customers and for our new customers to integrate into their supply chains over the next few months.

    Q&A highlights

    8

    What are the primary risks (cost, new supply, unexpected surprises) given the solid demand and pricing?

    Todd Borgmann stated that there are no singular risks keeping them up at night, and the market is in good shape. He acknowledged volatility due to ongoing conflict but expressed confidence in the commercial team's ability to react. Specialty price increases are in place, though Performance Brands might see some lag.

    “I'd say if there's anything, it's just acknowledgment that it's very volatile out there. And there's still a meaningful conflict going on, and we could see pretty massive volatility. We've seen how quickly these markets can move.”

    asked by Amit Dayal · answered by Louis Borgmann

    2 min read7 chapters

    Detailed Narrative

    01

    Strategic Positioning and Market Tailwinds

    Calumet is strategically positioned to capitalize on strong market tailwinds in both traditional and renewable energy. The EPA's Set 2 RVO announcement has reset the outlook for renewable fuels, and the company is entering a robust margin environment. The successful commencement of operations for the MaxSAF 150 expansion in early May further enhances its ability to capture these opportunities, despite Q1 results being impacted by operational downtime.

    02

    Specialties Business Resilience

    The Specialties business demonstrated robustness amid extreme volatility. Despite a 50% increase in crude oil prices in March, the commercial team rapidly executed over 20 price increases across product lines, achieving $54/barrel margins in Q1. The company's integrated model and domestic crude supply provide stability, allowing it to capture intermediate value and run at max volumes post successful turnarounds at Cotton Valley and Princeton.

    03

    Renewable Fuels Market Dynamics

    The EPA's Set 2 RVO has re-established a stable dynamic for biofuels, incentivizing utilization growth. Historically, the industry has seen consistent $2/gallon index margins for biodiesel. The new RVO requires higher utilization levels, which the industry can meet through carryforward RINs, imports, and efficiency improvements, aligning with the administration's goals for domestic energy and agriculture.

    04

    MaxSAF 150 Expansion and SAF Growth

    The MaxSAF 150 expansion has commenced operations, shifting focus to increased SAF volumes. The plant will steadily ramp production to ensure consistent product quality for existing and new customers. The company expects a 4-5x increase in SAF volumes on an annual run rate basis, leveraging a contractual SAF premium of $1-$2/gallon over renewable diesel and an industry-leading low-cost structure.

    05

    Shreveport Operational Event and Recovery

    Q1 financial results were impacted by a previously disclosed operational event at Shreveport, where organic chlorides in the crude stream caused a loss of approximately 750,000 barrels of production and over $30 million in lost opportunity. The team swiftly managed the risk, made necessary repairs, and installed redundancy in quality monitoring. The plant is now fully operational, running at about 50,000 barrels per day since April.

    06

    Hedging Strategy and Deleveraging

    To fortify deleveraging targets, Calumet entered crack spread hedges for portions of 2026 and 2027 fuels production, covering approximately 10,000 barrels per day. These hedges were placed at attractive historical levels, derisking a portion of fuels production while leaving upside for the remainder. The company aims to use strong cash flows to accelerate its deleveraging plan.

    07

    Performance Brands Momentum

    The Performance Brands segment, particularly TRUFUEL, continues to benefit from commercial excellence. Despite margin compression and price lag due to its retail-oriented customer base, TRUFUEL posted record sales volumes in Q1 and April. The segment successfully offset the lost EBITDA from the Royal Purple Industrial divestiture through cost controls and brand growth.

    AI-generated summary of the company’s earnings call. Not investment advice.