Calumet Specialty Products (CLMT) Q2 2026 Earnings Report

The call conveyed strong operational and commercial momentum: robust consolidated adjusted EBITDA ($175M), specialty segment outperformance (specialty EBITDA $161.7M, >100% YoY improvement), positive cash generation (> $90M OCF), accelerated deleveraging (restricted leverage <4x, $100M note call, $115M sale-leaseback repurchase), and an actionable, capital-efficient Montana Renewables expansion with favorable SAF economics and improving index margins (~$2.60/gal). Lowlights were primarily timing- and accounting-related (planned turnarounds with ~$40M foregone margin, working capital build of ~$70M, $20M hedge offset, and a temporary Performance Brands margin headwind tied to LIFO and pricing lags) and some external industry supply/logistics pressures. Overall, the positives—strong earnings, cash flow, accelerated debt reduction, and high-return growth projects—substantially outweigh the transitory and manageable negatives.

Management reiterated guidance toward accelerated deleveraging and strong near‑term ramps, highlighting Q2 adjusted EBITDA of $175M (Specialties $161.7M, Montana Renewables $17M, CMR $12.2M), >$90M cash from operations offset by roughly $70M of working capital build (David detailed ~$30M higher crude, ~$30M AR and ~$20M MRL build) and a ~$20M hedge headwind; restricted group leverage is now below 4x and management expects to surpass 3x next quarter after calling $100M of 2028 notes and repurchasing a $115M sale‑leaseback, with 10,000 bpd of fuel hedges through early 2028 (~$28/bbl CBOB in 2027). For Montana Renewables they cited index margins near $2.60/gal, ~ $40M of foregone Q2 margin from downtime, and an operational roadmap to run ~60M gallons SAF near term, ramp to 80–100M by year‑end, exceed 120M by spring 2027 and ultimately target ~200M gallons with 17,000 bpd throughput over the next two years (while capturing >$50M EBITDA at CMR before reconfiguration). They also signaled specialties momentum (7 consecutive quarters >20,000 bpd, volumes +5% YTD vs 2025, >20 price increases realized), a ~$50M high‑return growth CapEx pipeline primarily in 2027–28, and promised DOE/modification and full expansion/cost/funding details before the next call.