PCT Q2 2026 Earnings After some time to sift through, on track. Communication should be better. $PCT earnings led to lots of whiplash for yours truly. First, I will just rip the band aid off. I thought the communication was poor (particularly in the press release and presentation). DO filled in a lot of gaps on the call but with a speculative, young company like $PCT, there can be no ambiguity quarter to quarter. While the company provided a ton of new information, it was unclear how that linked to the last quarter’s ‘guidance’ and thus came off as evasive. I have made my opinion known on this topic (who know if that means anything). Production: Not a ton expected here given the plant was down for 6 weeks. Ran the plant up to 100% of nameplate and I believe a little higher from DO’s comments: “May was, by design, a low volume month. We commissioned the newly installed equipment, and we changed process conditions at Ironton to mimic the designs we intend to build in Antwerp and Thailand. Those tests were successful. Being able to run those conditions on an operating commercial asset before we build is an advantage most companies in our position do not have. In June, we set a new daily throughput record, and we demonstrated production at 12,000 pounds per hour.” Process conditions should be at 130m LB/yr so good to see the company testing the levels at Ironton and getting every piece of data out of the plant for Thailand. Thailand will be twice as good, twice as cheap – engineering all about scaling. Good to see compounding asset up and running. It must be incredibly frustrating building relationships with converters/brands and having to outsource the very last step before the product is shipped off (QC nightmare). All in all on production, not expecting much. They have stated they have control of the plant and are going to run the plant to meet orders, not to prove run rates to the market. Either you believe them or you don’t. Commercial: Lots of good info in the presentation. Product types, blend %, SKU breadth, trials behind applications etc. My main frustration on comms comes here, please restate the 40-50, 20 – 25 and 25-50 numbers from the prior Q – all the detail is great but that is the main thing ppl are focused on commercially, that holding. DO would go on to re affirm on the call: “On top of the $40 million-$50 million of non-New Jersey and $25 million-$50 million of New Jersey ramp, the most significant new commercial development is in quick serve restaurants, and it happened after quarter close. In the Q3 to date, we've shipped to all three major converters that serve the QSR cold cup market for clear cups. That is the channel, not the single customer. Cold cup programs are underway at two major QSRs through those converters. New Jersey is what accelerated this. Following the approval, we were fast-tracked into two very large qualification programs for cold cup lids. For QSR applications in New Jersey alone, we estimate the annual demand to meet the recycled content requirement to be roughly 20 million pounds. “ Now the question I had, and received the most. “Why are we now working on the cold cups for QSR? What happened to the coffee lids?”. Well, post our NJ DEP success it seems we had a change Lee Corso style “no no no, not so fast my friend” on the definition of a container. From recent DEP FAQ: “A rigid plastic container must be made of plastic except for minor incidentals including, but not limited to, caps, labels, or lids. However, a product does not need to include a lid, cap, or closure to be considered a rigid plastic container. Packaging that contains two or more material types (e.g., plastic and paper) is not considered a rigid plastic container when the plastic component is unable to hold or contain a product on its own. However, if the plastic component will be able to contain, hold, or surround a product at some point in the package’s lifecycle, the package is considered a rigid plastic container.” dep.nj.gov/wp-content/upload… WONDERFUL. So Ronald and his gang of merry QSR pals say to $PCT in May (when FAQ was released), “stop with the coffee lids we are good there now, we need the cold cups stat”. Now, this is very annoying and causes a bit of a delay but what are you gonna do? The good news is overall rPP usage in cold cups much greater than just coffee lids for that mandate. 20m LBs just for NJ, nationwide if you scale up by population that is 600m LBs (using NJ as 3% of US pop). Rest of pipeline looks good. The most under appreciated thing here imo is that the PP market is not like the PE market, its not 70% water bottles. It is hundreds of thousands of individual SKUs that all need to be trialed, qualified and papered. It is extremely painstaking but once it is up and running, $PCT will have a $TDG like customer/product base, incredibly broad and incredibly difficult to displace. They are making progress. (Some evidence of the strategy here is P&G, they qual’d two products last Q, it took a loooong time to get there, and now in just one Q they have a third. Once you are in with a customer you will sell into other products in the org, creating a layer cake of sales: Organic sales growth Cross sales into new applications of existing customers New applications of new customers As these three start to grow in parallel the speed of the ramp will become clear) This brings us to pricing, some very interesting napkin math to be done here. Dustin continued to reiterate Ironton breakeven at 40%-50% as well as branded pricing coming in stronger than anticipated. “We have referred to breakeven as roughly 40%-50% utilization, and that number has not changed. It is built on branded sales at those utilization rates, and branded sales are ramping. Branded pricing remains robust, and applications carrying the highest confidence for the second half maintain strong pricing.” Ironton ops spend is roughly 8.5m per month. Multiple that by 12 we get that’s basically 100m bucks. Ignore compounding for the moment (where PnL will actually be better), and you are looking at 50% of nameplate (50m LBs) breaking Ironton even. Solve for 50(x) = 100, x = 2. He’s basically guiding Pure5 is going for 2$/LB. *Mind Blowing* Inventories As ramp planned for 2H, inventories are moving in right direction. Finished goods sent out to customers while larger levels of finished goods purchased to fulfill increased demand in 2H. I imagine once railcars start moving out of Ironton the fast money will start to react. They do seem to have eyes everywhere. Thailand Good ole Thailand. Another confusing one at first. Changed key term from mechanically complete to operational, which then changed the date from 2H27 to 2028. There is NO change to the schedule but that is confusing. I understand operational is a much more concrete milestone than ‘mechanically complete’ but please spoon feed me the words “we have updated the milestone to something more concrete and thus the date changed, there is no change from our prior work plan”. Overall Generally supposed to be a no nothing quarter. With the weakness in speculative stocks and post convert the stock was trading fairly depressed. I think the content of progress was enough to have the stock trading high single digits but the communication convoluted the story so lots of confusion.