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    CLMT
    Earnings call· Jun 2026(Q2 FY26)

    Calumet, Inc. /DE Q2 FY26 earnings call CLMT

    Aug 7, 2026 Source

    Executive summary

    Calumet, Inc. Q2 FY26 — Strong Specialties Performance and Accelerated Deleveraging

    Calumet delivered a robust quarter, driven by exceptional performance in its Specialties segment amid favorable market dynamics and a strategic, capital-efficient expansion plan for Montana Renewables. The company significantly accelerated its deleveraging efforts, positioning it for future high-return organic growth projects while maintaining a disciplined approach to capital allocation.

    Highlights

    5

    • Adjusted EBITDA with tax attributes reached $175 million in Q2 FY26.

    • Restricted group leverage ratio fell below 4x, with expectations to surpass 3x next quarter.

    • Specialty Products & Solutions (SPS) adjusted EBITDA more than doubled year-over-year to $161.7 million.

    • Montana Renewables (MRL) achieved $17 million adjusted EBITDA despite significant downtime, with July indicating a strong ramp-up.

    • Record specialty production and seventh consecutive quarter of specialty sales volume above 20,000 barrels per day.

    Concerns

    2

    • Performance Brands adjusted EBITDA was down $6.2 million year-over-year, impacted by input cost spikes and LIFO accounting.

    • Working capital draw of $80 million due to higher crude inventory, increased accounts receivable, and MRL ramp-up.

    Guidance & targets

    8
    CategoryTargetConfidence
    Restricted Group Leverage Ratio
    Below 3x
    high materiality
    High
    Specialties Growth Projects Deployment
    Good chunk deployed
    medium materiality
    High
    Montana Renewables SAF Run Rate
    Over 120 million gallons
    high materiality
    High
    Montana Renewables SAF Production
    200 million gallons
    high materiality
    High
    Montana Renewables Total Throughput
    17,000 barrels a day
    high materiality
    High
    Montana Renewables Q3 Performance
    Meaningfully higher
    high materiality
    High
    Specialties Growth Capital Expenditure
    Majority of $50 million
    medium materiality
    High
    Specialties Growth Capital Expenditure Timing
    ~2/3+ in 2027, remainder in 2028
    low materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Specialty Products & Solutions
    Strong results from commercial and operational execution, despite heavy turnaround period. Benefited from 20+ price increases and attractive high-margin fuel environment.
    Specialty sales volume: >20,000 bpdSpecialty production: record quarterYTD 2026 specialties volume growth: >5%
    		—more than doubled—$161.7 million adjusted EBITDA
    Performance Brands
    Adjusted EBITDA down $6.2 million versus prior year. Impacted by timing issues, with input costs spiking before pricing actions caught up. Experienced a $7 million LIFO accounting headwind. Expected to recover as pricing catches up.
    Volumes: up 18%
    		———$6.3 million adjusted EBITDA
    Montana Renewables
    Performed well despite significant downtime in April and May for MaxSAF expansion and turnaround. Strategically completed the first step of MaxSAF 150 expansion. Expects Q3 to be meaningfully higher.
    Lost opportunity due to downtime: ~$40 millionIndex margins: ~$2.60 per gallon and rising
    		———$17 million adjusted EBITDA with tax attributes
    CMR (Refining)
    Margin environment improved, though asphalt margins lagged early in the quarter due to crude escalation. Pricing has caught up, and Q3 is peak asphalt season, setting up for a strong run until November downtime.
    		——up about $10.9 million sequentially$12.2 million adjusted EBITDA

    Operational metrics

    7
    Adjusted EBITDA with tax attributes
    $175 million
    Q2 FY26

    Strong performance from both Specialties and Montana Renewables.

    Working capital build
    $70 million
    Q2 FY26

    Considered tactical and expected to normalize.

    Fuel hedges
    10,000
    through early 2028

    Put in place to protect cash flow and support debt paydown commitments.

    Biomass-based diesel production increase
    70%
    This year

    Result of the SEP 2 rule reigniting the industry.

    Crush capacity addition
    5%
    This year

    Reflects record soybean and canola crush levels.

    CMR EBITDA upside
    over $50 million
    Between now and November downtime

    Unexpected upside from the conventional refinery before its reconfiguration.

    Specialties growth capital expenditure
    $50 million
    FY27-FY28

    For a pipeline of low-risk, high-return growth projects.

    Deals & partnerships

    1
    Minneapolis AirportSAF supply$30 million

    SAF supply agreement.

    Capital programs

    3
    Montana Renewables MaxSAF 150 Expansion (Phase 1)completed

    The first phase of the MaxSAF 150 expansion was completed, contributing to the company's strategic positioning.

    Montana Renewables MaxSAF Expansion (Novel Reconfiguration)underwayfraction of original capital expected
    Start: This winter

    Benefit: roughly 200 million gallons of SAF; 17,000 barrels a day total fresh feed rate

    Repurposing a second reactor from CMR, this novel expansion is cheaper, faster, lower-risk, and carries a much higher IRR, providing best-in-class SAF yields. Expected to reach 120-150 million gallons SAF run rate by Spring 2027.

    Specialties Growth Projectspipeline~$50 million
    Period spend: 2/3+ in 2027, remainder in 2028
    Start: FY27

    Benefit: low-risk, high-return growth

    A pipeline of projects accumulated over years, now progressing in a parallel and disciplined fashion, expected to be deployed in 2027 and 2028.

    Risks & headwinds

    2
    Input cost inflation and LIFO accounting impact on Performance BrandsQ2 FY26

    $7 million headwind for Performance Brands in Q2 FY26.

    Mitigation: Vigilant pricing actions, expected recovery as pricing catches up and inventory effect reverses.

    Lagging asphalt margins due to crude escalationEarly Q2 FY26

    Impacted CMR early in Q2 FY26.

    Mitigation: Pricing has caught up, Q3 is peak asphalt season, setting up for an "outsized run."

    What to watch in Q3 FY26

    5

    Restricted Group Leverage Ratio

    Q3 FY26
    CurrentBelow 4x
    TargetBelow 3x

    Why it matters

    Indicates accelerated deleveraging and financial flexibility for growth.

    our restricted group leverage ratio is now below 4x. And with the first phase of our MaxCalf 150 expansion behind us and strong cash flows in all businesses, we're expecting to surpass 3x next quarter.

    Q&A highlights

    6

    How long will high base oil cracks last, given global disruptions and capacity issues? Is it similar to fuel refinery dynamics, and how much is pass-through of feed costs?

    Scott Obermeier stated that the market is firing on all cylinders and the situation is not short-term due to structural impacts like 10% global capacity offline, diversion to distillates, and Russian refinery strikes. He expects the tight market to continue through 2026.

    “I think right now across the whole portfolio, and I'll get into base oils here in a second. But I think across our whole portfolio, I'd say we're certainly firing on all cylinders, as touched on in the script, production has been great, execution has been great, et cetera. And we think about the fuel crack market being historic specialties, again, across our whole portfolio are doing really well. So we feel good about that. We think in this current environment, it's not just a short-term situation. There's been a lot of structural impacts, if you will, that will take months and months to sort of stabilize.”

    asked by Conor Fitzpatrick · answered by Scott Obermeier

    2 min read6 chapters

    Detailed Narrative

    01

    Specialties Market Dynamics

    Global base oil capacity is structurally imbalanced, with over 10% offline due to the Iranian war impacting Middle Eastern Group III capacity and the Russia-Ukraine war affecting European Group I production. This, combined with high logistics costs and refiners prioritizing fuels, creates a tight market for Calumet's integrated specialty products, which benefit from domestic crude supply and integrated production.

    02

    Montana Renewables Strategic Expansion

    Calumet has identified a novel, capital-efficient expansion plan for Montana Renewables (MRL), repurposing a second reactor from the Great Falls refinery (CMR). This approach is significantly cheaper, faster, and lower-risk than previous plans, aiming for best-in-class SAF yields with minimal byproducts. The reconfigured reactor is expected to be running this winter, accelerating SAF production ramp-up.

    03

    Accelerated Deleveraging

    The company's restricted group leverage ratio has fallen below 4x and is projected to drop below 3x next quarter. This rapid deleveraging was supported by strong cash flows, enabling the call of $100 million in notes and the repurchase of a $115 million sale-leaseback. This financial strength allows Calumet to pursue growth projects in parallel with debt reduction.

    04

    Working Capital Management

    Q2 saw an $80 million working capital draw, primarily from a deliberate $30 million increase in crude inventory to de-risk operations and a $30 million rise in accounts receivable due to higher prices across SPS businesses. An additional $20 million build at MRL supported its ramp-up. These are considered timing-related📎 items expected to normalize📎.

    05

    Performance Brands Headwinds

    The Performance Brands segment experienced a $6.2 million year-over-year decline in adjusted EBITDA, despite an 18% increase in volumes. This was attributed to input costs spiking before pricing actions caught up and a $7 million LIFO accounting headwind, which is expected to reverse as pricing actions take effect.

    06

    CMR Contribution and Reconfiguration

    The conventional Montana refinery (CMR) generated $12.2 million in adjusted EBITDA, benefiting from improved margins. The planned reconfiguration of CMR assets for MRL's expansion will involve approximately two weeks of downtime this winter, but is expected to yield over $50 million in additional EBITDA from CMR before the shutdown, representing a significant upgrade to the original plan.

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