Alto Ingredients Inc (ALTO) 2014 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Pacific Ethanol Second Quarter 2014 Financial Results Conference Call.

女士們，先生們，美好的一天，歡迎參加太平洋乙醇公司 2014 年第二季度財務業績電話會議。

At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time.

此時，所有參與者都處於只聽模式。稍後，我們將進行問答環節，屆時會有說明。

If anyone should require assistance during today's conference, please press star then zero on your touch tone telephone.

如果有人在今天的會議期間需要幫助，請在您的按鍵式電話上按星號，然後按零。

As a reminder, this conference is being recorded.

提醒一下，本次會議正在錄製中。

I would now like to introduce the host of today's conference, Monica Chang of LHA.

我現在想介紹一下今天會議的主持人，LHA的Monica Chang。

Ma'am, you may begin.

女士，您可以開始了。

Thank you, Operator. And thank you all for joining us all today for the Pacific Ethanol Second Quarter 2014 Results Conference Call.

謝謝你，接線員。感謝大家今天參加太平洋乙醇公司 2014 年第二季度業績電話會議。

On the call today are Neil Koehler, President and CEO, and Bryon McGregor, CFO.

今天的電話會議是總裁兼首席執行官 Neil Koehler 和首席財務官 Bryon McGregor。

Neil will begin with a review of the business highlights. Brian will provide a summary of the financial and operating results. And then Neil will return to discuss the company's outlook and open the call for questions.

Neil 將首先回顧業務亮點。 Brian 將提供財務和運營結果的摘要。然後尼爾將返回討論公司的前景並打開提問電話。

Pacific Ethanol issued a press release yesterday providing details of the company's quarterly results. The company also prepared a presentation for today's call that is available on the company web site at pacificethanol.net.

Pacific Ethanol 昨天發布了一份新聞稿，提供了公司季度業績的詳細信息。該公司還為今天的電話會議準備了一份演示文稿，該演示文稿可在公司網站 pacificethanol.net 上找到。

If you have any questions, please call LHA at 415-433-3777.

如果您有任何問題，請致電 415-433-3777 聯繫 LHA。

A telephone replay of today's call will be available through August 7th, the details of which are included in yesterday's earnings press release. A webcast replay will also be available at Pacific Ethanol's web site.

今天電話會議的電話重播將持續到 8 月 7 日，詳細信息包含在昨天的收益新聞稿中。 Pacific Ethanol 的網站也將提供網絡重播。

Please note that information in this call speaks only as of today, July 31st. And, therefore, you are advised that time-sensitive information may no longer be accurate at the time of replay.

請注意，本次電話會議中的信息僅適用於今天，7 月 31 日。因此，建議您在重播時，時間敏感信息可能不再準確。

Please refer to the company's safe harbor statement on slide two of the presentation, available online, which says that some of the comments in this presentation constitute forward-looking statements and considerations that involve a number of risks and uncertainty.

請參閱該演示文稿第二張幻燈片上的公司安全港聲明，該聲明可在線獲取，該聲明稱，該演示文稿中的一些評論構成前瞻性陳述和考慮因素，涉及許多風險和不確定性。

The actual future results of Pacific Ethanol could differ materially from those statements.

Pacific Ethanol 的實際未來結果可能與這些陳述存在重大差異。

Factors that could cause or contribute to such differences include, but are not limited to, events, risks and other factors previously and from time to time disclosed in Pacific Ethanol's filings with the SEC.

可能導致或促成此類差異的因素包括但不限於以前和不時在 Pacific Ethanol 向 SEC 提交的文件中披露的事件、風險和其他因素。

Except as required by applicable law, the company assumes no obligation to update any forward-looking statement.

除適用法律要求外，公司不承擔更新任何前瞻性陳述的義務。

Also, please note that the company uses financial ledgers not in accordance with generally accepted accounting principles, commonly known as GAPs, to monitor the financial performance of operations.

此外，請注意，公司使用不符合公認會計原則（通常稱為 GAP）的財務分類賬來監控運營的財務業績。

Non-GAP financial measures should be viewed in addition to, and not as an alternative for, the reported financial results as determined in accordance with GAPs.

非 GAP 財務措施應被視為根據 GAP 確定的報告財務結果的補充，而不是其替代方法。

The company defines adjusted net income loss as a not (inaudible) earnings before fair value adjustments and warrant inducements and gain loss on extinguishment of debt.

該公司將調整後的淨收入損失定義為在公允價值調整和認股權證誘因以及債務清償損失之前的非（聽不清）收益。

Adjusted EBITDA is defined by the company as an audited earnings before interest, provision for income taxes, depreciation and amortization, fair value adjustments, and [warrant] inducements, and non-cash gain loss on extinguishments of debt.

公司將調整後的 EBITDA 定義為經審計的利息、所得稅準備金、折舊和攤銷、公允價值調整和 [權證] 誘因以及債務清償的非現金收益損失前的經審計收益。

To support the company's review of non-GAP information later in this call, reconciling tables are included in yesterday's press release.

為了支持公司稍後在本次電話會議中審查非 GAP 信息，昨天的新聞稿中包含了核對錶。

It is now my pleasure to introduce Neil Koehler, president and CEO.

現在，我很高興介紹總裁兼首席執行官 Neil Koehler。

Neil?

尼爾？

Thanks, Monica. And thank you all for joining us today.

謝謝，莫妮卡。感謝大家今天加入我們。

Pacific Ethanol continues to perform exceptionally well. The plants are operating at excellent margins. Our marketing business continues to grow in both gallons sold and overall margin contribution. And we are reinvesting capital in our core production business to further reinforce our market position.

Pacific Ethanol 繼續表現異常出色。這些工廠的利潤率很高。我們的營銷業務在售出的加侖數和整體利潤率貢獻方面繼續增長。我們正在將資金再投資於我們的核心生產業務，以進一步鞏固我們的市場地位。

Our second quarter performance was solid. Net sales increased 37 percent over last year's second quarter. Total gallons sold grew to a record 132 million gallons.

我們第二季度的表現穩健。淨銷售額比去年第二季度增長了 37%。總加侖銷量增長到創紀錄的 1.32 億加侖。

We restarted our Madera Plant. Net income was $15 million, or 68 cents per share. Adjusted net income was $17 million, or 77 cents per share.

我們重新啟動了馬德拉工廠。淨收入為 1500 萬美元，即每股 68 美分。調整後的淨收入為 1700 萬美元，即每股 77 美分。

Our adjusted EBITDA was $28 million.

我們調整後的 EBITDA 為 2800 萬美元。

Our cash position as of June 30th, 2014 was $26 million, and as of July 29th, was $48 million after approximately $20 million of a [warrant] exercises in July.

截至 2014 年 6 月 30 日，我們的現金頭寸為 2600 萬美元，而截至 7 月 29 日，在 7 月份行使約 2000 萬美元的 [認股權證] 後，我們的現金頭寸為 4800 萬美元。

We eliminated all debt at the parent level, and our consolidated third-party plant debt was reduced to $17 million.

我們消除了母公司層面的所有債務，我們合併的第三方工廠債務減少到 1700 萬美元。

Industry dynamics in the first six months of 2014 were positive, as sound market fundamentals drove strong demand for our products and favorable production margins.

2014 年前六個月的行業動態是積極的，因為良好的市場基本面推動了對我們產品的強勁需求和有利的生產利潤率。

Overall ethanol demand remains at expected levels in the U.S., while exports provide overall balancing support to the industry.

美國的整體乙醇需求保持在預期水平，而出口為該行業提供了整體平衡支持。

This year's corn [trough] is on track to be a record harvest. And we expect global supply and demand for ethanol to provide continued underlying support for strong ethanol margins.

今年的玉米[低谷]有望創紀錄。我們預計全球乙醇供需將為強勁的乙醇利潤率提供持續的潛在支持。

Ethanol continues to trade at a significant discount to gasoline, currently close to $1 per gallon on the forward curve. And corn prices are traded at nearly half the price they were two years ago.

乙醇繼續以遠低於汽油的價格交易，目前在遠期曲線上接近每加侖 1 美元。玉米價格幾乎是兩年前價格的一半。

The USDA projects the carryout from the 2014-2015 crop to be one of the largest levels in many years.

美國農業部預計 2014-2015 年作物的結轉量將是多年來最大的水平之一。

During the period of rebuilding from the industry loads of 2012 and through drought-induced high corn prices of 2013, we have remained focused on reducing debt, improving our production operating efficiencies, developing incremental revenue streams, reducing overhead expenses, and strengthening our position as the leading low-cost, low-carbon renewable fuel producer in the Western United States.

在 2012 年行業負荷的重建期間以及 2013 年干旱導致的高玉米價格期間，我們一直專注於減少債務、提高生產運營效率、開發增量收入來源、減少管理費用並加強我們作為美國西部領先的低成本、低碳可再生燃料生產商。

With the market's sustained recovery, we have the opportunity and resources to reinvest in our plant assets and pursue strategic growth initiatives.

隨著市場的持續復甦，我們有機會和資源對我們的工廠資產進行再投資並尋求戰略增長計劃。

Our current focus is to fortify our existing assets to drive the long-term growth and profitability of the company. The demand for low-carbon solutions is growing, bolstered by regulatory mandates such as the California low-carbon fuel standard, which require refineries to make further reductions in the carbon intensity of fuels over time.

我們目前的重點是加強我們現有的資產，以推動公司的長期增長和盈利能力。在加利福尼亞低碳燃料標準等監管要求的推動下，對低碳解決方案的需求正在增長，該標準要求煉油廠隨著時間的推移進一步降低燃料的碳強度。

This represents a great opportunity for Pacific Ethanol to provide the additional product and services demanded in our markets. We are working on a number of capital projects at our plants to add differentiated revenue streams, introduce new technologies that offer incremental benefit to the bottom line, and that combined, represent a meaningful contribution to the company's profitability.

這對 Pacific Ethanol 來說是一個很好的機會，可以提供我們市場所需的額外產品和服務。我們正在我們的工廠開展一些資本項目，以增加差異化的收入流，引入新技術，為底線提供增量收益，並且這些技術相結合，對公司的盈利能力做出了有意義的貢獻。

We continue to invest in corn oil separation technology. The investments at our Stockton and Magic Valley facilities provide a meaningful contribution to operating income today.

我們繼續投資於玉米油分離技術。我們對斯托克頓和魔術谷設施的投資為今天的營業收入做出了有意義的貢獻。

We are working on final plans to install corn oil separation technology at our Madera and Columbia plants with the goal to begin producing corn oil at these plants in early 2015.

我們正在製定在馬德拉和哥倫比亞工廠安裝玉米油分離技術的最終計劃，目標是在 2015 年初在這些工廠開始生產玉米油。

We now have advanced grinding technologies installed at our Magic Valley and Stockton plants. We will continue to invest in these and other technologies at all of our plants that provide near-term investment returns, low-carbon technologies, and value-added processes.

我們現在在魔術谷和斯托克頓工廠安裝了先進的研磨技術。我們將繼續在我們所有的工廠投資這些技術和其他技術，以提供近期投資回報、低碳技術和增值工藝。

Our investment in our plants is driven by the underlying economics of our business. Each 1 percent improvement in production yield results in about a $3 million increase in gross margin annually when operating at our full production capacity of 200 million gallons.

我們對工廠的投資是由我們業務的基本經濟驅動的。當我們以 2 億加侖的全部生產能力運營時，產量每提高 1% 就會導致毛利率每年增加約 300 萬美元。

In fact, we have approved an additional capital expenditure budget to reinvest up to $16 million in our plants over the next six months to improve efficiencies, diversify feed stock, and develop our advanced biofuels initiatives.

事實上，我們已經批准了一項額外的資本支出預算，以在未來六個月內對我們的工廠再投資高達 1600 萬美元，以提高效率、使原料多樣化並開發我們的先進生物燃料計劃。

Our target is to invest in our plants to achieve approximately a 5 cent to 6 cent per gallon in annual EBITDA improvement, representing a contribution of between $10 million and $12 million to the company's annual profitability.

我們的目標是投資我們的工廠，以實現每加侖約 5 美分至 6 美分的年度 EBITDA 改善，這對公司的年度盈利能力貢獻在 1000 萬美元至 1200 萬美元之間。

We continue to supply our plants with a diverse variety of low-cost feed stock. In the second quarter, we blended surplus sugar at our Magic Valley and Columbia facilities at rates consistent with the previous quarter. This resulted in savings of approximately $1.7 million during the second quarter.

我們繼續為我們的工廠提供各種低成本的原料。在第二季度，我們在魔術谷和哥倫比亞工廠以與上一季度一致的比率混合剩餘糖。這導致第二季度節省了大約 170 萬美元。

Pacific Ethanol was recently awarded a $3 million matching grant from the California Energy Commission to fund the in-state sorghum program to demonstrate demand and encourage production for grain sorghum.

Pacific Ethanol 最近從加利福尼亞能源委員會獲得了 300 萬美元的配套贈款，用於資助州內高粱項目，以展示需求並鼓勵穀物高粱的生產。

Pacific Ethanol and partner ethanol producers in California, in collaboration with [Crometin] and California State University Fresno, seek to expand the production of low-carbon ethanol from locally grown sorghum.

Pacific Ethanol 和加利福尼亞的合作夥伴乙醇生產商與 [Crometin] 和加利福尼亞州立大學弗雷斯諾分校合作，尋求擴大使用當地種植的高粱生產低碳乙醇。

This program will support an increase in processing sorghum to ethanol at our Madera and Stockton facilities, provide marketing and education for the development of sorghum as a reliable and robust feed stock for the industry, and help develop a path for Pacific Ethanol to advance biofuels.

該計劃將支持在我們的馬德拉和斯托克頓工廠增加高粱加工成乙醇，為高粱作為該行業可靠和強大的原料的發展提供營銷和教育，並幫助太平洋乙醇公司開闢一條發展生物燃料的道路。

We continue to believe that integrating production of advanced biofuels to our existing facilities is the greatest value lowest risk means of producing even higher-value products to meet the demand for low-carbon transportation fuel. To this end, our joint effort -- development effort with Sweetwater Energy is in the product development phase. As previously announced, we expect to purchase cellulosic industrial sugars from Sweetwater at a production facility adjacent to our facilities.

我們仍然相信，將先進生物燃料的生產整合到我們現有的設施中，是生產更高價值產品以滿足低碳運輸燃料需求的最大價值、最低風險的方法。為此，我們與 Sweetwater Energy 的共同努力——開發工作正處於產品開發階段。正如之前宣布的那樣，我們希望在與我們設施相鄰的生產設施中從 Sweetwater 購買纖維素工業糖。

Our Madera site is now the likely location for the initial project, which will take a couple of years to commercialize.

我們的馬德拉工廠現在是最初項目的可能地點，該項目將需要幾年時間才能實現商業化。

Recently, the U.S. Environmental Protection Agency qualified corn kernel fiber as a cellulosic feed stock under the renewable fuel standard. This complements our work with Edeniq, whose cellunator technology enables the release of cellulosic sugars from corn kernel fiber.

最近，美國環境保護署根據可再生燃料標準將玉米粒纖維認定為纖維素原料。這補充了我們與 Edeniq 的合作，Edeniq 的細胞分解技術能夠從玉米粒纖維中釋放纖維素糖。

We are working to complete supply arrangements on an appropriate enzyme for commercial production. This will allow us to produce cellulosic ethanol for up to 2 percent of our overall production at a plant.

我們正在努力完成用於商業生產的合適酶的供應安排。這將使我們能夠生產纖維素乙醇，占我們工廠總產量的 2%。

We are running a pilot program for anaerobic digestion from our Stockton facility's product streams to substitute bio gas for natural gas for the integrative production of advanced biofuels.

我們正在從斯托克頓工廠的產品流中運行一項厭氧消化試點計劃，以用生物氣替代天然氣，以綜合生產先進的生物燃料。

The Magic Valley plant lends itself to green field development of additional production capacity from wheat straw. We are evaluating the feasibility of a [bolt] on cellulosic project at this facility.

魔術谷工廠有助於綠地開發小麥秸稈的額外生產能力。我們正在評估該設施的纖維素項目 [bolt] 的可行性。

And finally, we are analyzing various configurations of co-generation, particularly at our California plants, where electricity prices are high, and we receive a low-carbon premium.

最後，我們正在分析熱電聯產的各種配置，特別是在我們的加利福尼亞工廠，那裡的電價很高，我們獲得了低碳溢價。

These are all examples of our investment opportunities to actively improve the current and future performance of our strategic assets.

這些都是我們積極改善戰略資產當前和未來績效的投資機會的例子。

The first six months of 2014 demonstrated how our Western United States proximity and access to local markets provides us with advantages in the marketplace. With constrained rail logistics and moving competing ethanol to Western markets, our local production and timely truck-delivered service to our customers is highly valued, affording us a clear competitive advantage versus Midwest suppliers, which has resulted in both a strong margin performance and an increase in our overall market share.

2014 年的前六個月展示了我們在美國西部的接近和進入當地市場如何為我們提供了市場優勢。由於鐵路物流受限和將競爭性乙醇轉移到西方市場，我們的本地生產和及時為客戶提供的卡車運輸服務受到高度重視，為我們提供了與中西部供應商相比的明顯競爭優勢，這導致了強勁的利潤率表現和增長在我們的整體市場份額中。

In addition, as our ethanol is among the lowest carbon-rated ethanol commercially produced in the U.S., we received a low-carbon premium for the ethanol we sell into the California market, which we expect to improve over time with both higher-carbon credit pricing and lower-carbon production from our new plant investment initiatives.

此外，由於我們的乙醇是美國商業生產的碳評級最低的乙醇之一，因此我們向加利福尼亞市場銷售的乙醇獲得了低碳溢價，我們預計隨著時間的推移，隨著高碳信用的增加，這種溢價會有所改善我們的新工廠投資計劃帶來的定價和低碳生產。

Overall, we believe 2014 will continue to be a very positive year for the industry and or company, supported by the long-term demand for renewable fuels and our efforts to enhance profitability.

總體而言，我們相信 2014 年對於行業和/或公司來說將繼續是非常積極的一年，這得益於對可再生燃料的長期需求以及我們為提高盈利能力所做的努力。

In addition to the capital improvement projects I just profiled, we continue to evaluate other potential growth opportunities to further integrate our production and marketing supply chains, leverage our core competencies and differentiated advantages, grow our market share, and return value to our shareholders.

除了我剛才介紹的資本改善項目，我們還在繼續評估其他潛在的增長機會，以進一步整合我們的產銷供應鏈，發揮我們的核心競爭力和差異化優勢，擴大我們的市場份額，為我們的股東回報價值。

I'd now like to turn the call over to Bryon to review the financials.

我現在想把電話轉給布賴恩來審查財務狀況。

Bryon?

布賴恩？

Thank you, Neil.

謝謝你，尼爾。

Our strong operating performance for the second quarter of 2014 demonstrates our focus on building plant efficiencies and profitably strengthening our market share.

我們在 2014 年第二季度的強勁運營表現表明我們專注於提高工廠效率並以盈利方式加強我們的市場份額。

During the second quarter of 2014, we reported net sales of $321 million, up 37 percent, compared to $234 million in the second quarter of 2013. This increase was primarily driven by increases in total gallons sold, which were a record 132 million gallons in the quarter. This represents a 31 percent increase from the same quarter last year, and a 17 percent increase over last quarter.

2014 年第二季度，我們報告的淨銷售額為 3.21 億美元，比 2013 年第二季度的 2.34 億美元增長了 37%。這一增長主要是由於總加侖銷售量的增長，在 2014 年達到創紀錄的 1.32 億加侖。季度。這比去年同期增長了 31%，比上一季度增長了 17%。

We continue to benefit from both improved ethanol margins and ongoing plant efficiency initiatives. This is reflected in our gross profit of $34 million this quarter, which compares to $7 million in the second quarter of last year.

我們繼續受益於乙醇利潤率的提高和正在進行的工廠效率計劃。這反映在我們本季度 3400 萬美元的毛利潤中，而去年第二季度為 700 萬美元。

SG&A expenses were $4 million, compared to $3 million in the second quarter of 2013. The increase in SG&A is primarily due to an increase in compensation cost tied to our continued profitable results and an increase in professional freeze from increased corporate activity.

SG&A 費用為 400 萬美元，而 2013 年第二季度為 300 萬美元。SG&A 的增加主要是由於與我們持續的盈利結果相關的薪酬成本增加以及企業活動增加導致的專業凍結增加。

At current levels of operation, we would expect our SG&A run rate through year end to approximate $4 million quarterly.

在目前的運營水平下，我們預計到年底的 SG&A 運行率約為每季度 400 萬美元。

This quarter's operating income was $29 million. We increased operating income by $25 million on a year-over-year basis.

本季度的營業收入為 2900 萬美元。我們的營業收入同比增加了 2500 萬美元。

Interest expense debt was $3 million, and included a $1 million one-time expense related to the accelerated amortization of deferred financing fees and discounts on early retired debt. This compares to $4 million in interest expense net in the second quarter of 2013.

利息支出債務為 300 萬美元，其中包括與加速攤銷遞延融資費用和提前退休債務折扣有關的 100 萬美元一次性費用。相比之下，2013 年第二季度的淨利息支出為 400 萬美元。

The year-over-year decrease resulted from our reduced debt balances. We would expect, with current balances remaining constant, a quarterly interest expense going forward of less than $1.5 million.

同比下降是由於我們的債務餘額減少。我們預計，在當前餘額保持不變的情況下，未來的季度利息支出將低於 150 萬美元。

Loss on extinguishment of debt was $2 million and reflects the premium we paid to redeem debt from a third-party lender. We retired a total of almost $15 million in debt during the second quarter.

債務清償損失為 200 萬美元，反映了我們為從第三方貸方贖回債務而支付的溢價。我們在第二季度共償還了近 1500 萬美元的債務。

Net income available to common stock holders was $15 million, or 68 cents per diluted share. This includes an income tax provision of $7 million. This compares to net income of $700,000, or 7 cents per share, in the year ago period.

普通股持有人可獲得的淨收入為 1500 萬美元，即每股攤薄收益 68 美分。這包括 700 萬美元的所得稅準備金。相比之下，去年同期的淨收入為 700,000 美元，即每股 7 美分。

We are finalizing our analysis of various deferred tax assets and liabilities, including NOLs. And unless our current estimates are significantly different, we'd expect an effective tax rate to be between 30 percent and 40 percent going forward.

我們正在完成對包括 NOL 在內的各種遞延所得稅資產和負債的分析。除非我們目前的估計有很大不同，否則我們預計有效稅率將在 30% 到 40% 之間。

Adjusted net income, which excludes the impact of fair value adjustments and [warrant] inducements and gain or loss on extinguishment of debts was $17 million, or 77 -- 77 cents per diluted share, compared to an adjusted net loss of $700,000, or 5 cents per diluted share in last year's second quarter.

調整後的淨收入，不包括公允價值調整和[認股權證]誘因的影響以及債務清償的收益或損失為 1700 萬美元，或每股攤薄收益 77 - 77 美分，而調整後的淨虧損為 700,000 美元，即 5去年第二季度每股攤薄收益。

Adjusted EBITDA was $28 million, an increase of $21 million, compared to adjusted EBITDA of $7 million in the second quarter of 2013.

調整後的 EBITDA 為 2800 萬美元，比 2013 年第二季度的 700 萬美元的調整後 EBITDA 增加了 2100 萬美元。

Among our highlights for the six months ended June 30th, 2014, net sales were $576 million, up 25 percent compared to $459 million last year.

在我們截至 2014 年 6 月 30 日的六個月的亮點中，淨銷售額為 5.76 億美元，與去年的 4.59 億美元相比增長了 25%。

Net income available to common stock holders was $4 million, or 20 cents per diluted share, compared to a net loss of $5 million, or 48 cents per share in the first half of 2013.

普通股持有人可獲得的淨收入為 400 萬美元，或稀釋後每股 20 美分，而 2013 年上半年淨虧損為 500 萬美元，或每股 48 美分。

Adjusted net income was $42 million, or $2.04 per diluted share, compared to a loss of $7 million, or 63 cents per diluted share in the same period of last year.

調整後的淨收入為 4200 萬美元，或稀釋後每股收益 2.04 美元，而去年同期虧損 700 萬美元，或稀釋後每股收益 63 美分。

An adjusted EBITDA grew by $56 million to $63 million for the first six months of 2014, which compares to adjusted EBITDA of $7 million in the first half of 2013.

2014 年前六個月調整後 EBITDA 增長 5600 萬美元至 6300 萬美元，而 2013 年上半年調整後 EBITDA 為 700 萬美元。

Turning to our balance sheet, cash and cash equivalent were $26 million at June 30th, 2014, compared to $5 million at December 31st, 2013. In addition, our working capital increased to approximately $79 million from $51 million at December 31st, 2013.

轉向我們的資產負債表，截至 2014 年 6 月 30 日，現金和現金等價物為 2600 萬美元，而 2013 年 12 月 31 日為 500 萬美元。此外，我們的營運資金從 2013 年 12 月 31 日的 5100 萬美元增加到約 7900 萬美元。

We raised net proceeds of approximately $26 million through an underwritten public offering, eliminating all indebtedness at the parent company level. And we reduced our net consolidated third-party plant term debt to $17 million.

我們通過承銷公開發售籌集了約 2600 萬美元的淨收益，消除了母公司層面的所有債務。我們將合併後的第三方工廠定期債務淨額減少到 1700 萬美元。

We continue to process cash warrant exercises. Since June 30th, warrants were exercised for approximately 2.5 million shares of common stock for $20 million in cash. As a result, we now have outstanding warrants to purchase a total of 1.6 million shares of common stock, down from 4 million shares at the end of June, and down 7 million shares from the beginning of the year.

我們繼續處理現金認股權證的行使。自 6 月 30 日以來，以 2,000 萬美元現金對約 250 萬股普通股行使認股權證。因此，我們現在擁有購買總計 160 萬股普通股的未償認股權證，低於 6 月底的 400 萬股，比年初減少了 700 萬股。

In addition to providing the parent increased liquidity, these exercises will also reduce GAP earnings volatility in future quarters as the amount of warrants being marked to fair value continues to -- continues to decline.

除了為母公司提供更多的流動性外，這些做法還將減少未來幾個季度的 GAP 收益波動，因為被標記為公允價值的認股權證數量繼續 - 繼續下降。

As of today, we have approximately $48 million in cash and 24 million common shares outstanding. It is important to note that the cash balances at the plant level now equals a debt owed to third parties, thus making us effectively debt-free.

截至今天，我們有大約 4800 萬美元的現金和 2400 萬股流通在外的普通股。值得注意的是，工廠層面的現金餘額現在等於欠第三方的債務，因此我們實際上沒有債務。

As a remaining third-party, plant debt is subject to costly interest make-whole requirement if prepaid. We continue to work with our lenders and others to evaluate options to further reduce the cost of our remaining debt.

作為剩餘的第三方，如果預付，工廠債務需要支付高昂的利息補償。我們將繼續與我們的貸方和其他人合作，評估進一步降低我們剩餘債務成本的選項。

I'd like to now return the call to Neil.

我現在想給尼爾回電話。

Thanks, Bryon.

謝謝，布賴恩。

Our efforts over the past couple of years have been set firmly on establishing a stronger company. We strengthened our balance sheet, reestablished a 91 percent ownership interest in our plants, and maintained those assets to position us for growth when the markets improve.

我們在過去幾年的努力已堅定地建立一個更強大的公司。我們加強了資產負債表，重建了我們工廠 91% 的所有權權益，並保留了這些資產，以便在市場好轉時為我們的增長做好準備。

Our differentiated business model has returned exceptionally good results for our shareholders in the first half of 2014. And the outlook for the industry and the company remain strong.

2014 年上半年，我們差異化的商業模式為我們的股東帶來了非常好的業績。行業和公司的前景依然強勁。

As we look ahead, we are committed to reinvest in capital and our plant assets through projects aimed at improving efficiencies, diversifying feed stock, creating new products, and furthering our advanced biofuels production initiatives.

展望未來，我們致力於通過旨在提高效率、使原料多樣化、創造新產品和推進我們先進的生物燃料生產計劃的項目，對資本和我們的工廠資產進行再投資。

We remain focused on maintaining our strong cash position and disciplined investment strategy.

我們仍然專注於保持強勁的現金頭寸和嚴格的投資策略。

We believe we are well situated to improve our long-term profitability and expand our share of the renewable fuels market.

我們相信我們有能力提高我們的長期盈利能力並擴大我們在可再生燃料市場的份額。

[Teria], we are now ready to take any questions.

[Teria]，我們現在準備回答任何問題。

Certainly. Ladies and gentlemen, at this time, if you have a question, please press star, then 1. If your question has been answered, or you wish to remove yourself from the queue, please press the pound key.

當然。女士們，先生們，此時，如果您有問題，請按星號，然後按 1。如果您的問題已得到解答，或者您希望將自己從隊列中移除，請按井號鍵。

And, once again, to ask a question, please press star, then 1.

再一次，要問一個問題，請按星號，然後按 1。

We'll give them one moment for questions.

我們會給他們一點時間來提問。

And our first question comes from the line of Nathan Weiss of Unit Economics. Your line is now open.

我們的第一個問題來自 Unit Economics 的 Nathan Weiss。您的線路現已開通。

Good morning.

早上好。

Hi, Nathan.

嗨，內森。

Congratulations on the net debt-free, too. That's a huge milestone for the company.

也恭喜淨無債。這對公司來說是一個巨大的里程碑。

Thank you. We agree.

謝謝你。我們同意。

A couple quick questions.

幾個快速的問題。

So, you've given your disclosure of your cash balances, you know, as we approach the end of July. You know, as well as warrants still outstanding and, you know, still a pretty favorable margin environment.

因此，當我們接近 7 月底時，您已經披露了您的現金餘額。你知道，還有權證仍然在流通，而且，你知道，仍然是一個相當有利的保證金環境。

How do you think about balance sheet yet again? And, in particular, you know, when I look at working capital, you know, defined as receivables, inventories will be paid inventories, you know, minus payables.

你又如何看待資產負債表？而且，特別是，當我查看營運資金時，您知道，定義為應收賬款，庫存將支付庫存，您知道，減去應付賬款。

There's about $60 million that could potentially be unlocked through some -- some sort of line of credit. You know, at arguably very favorable interest rates. How do you think about that structure, going forward?

大約有 6000 萬美元可以通過一些——某種信用額度來釋放。你知道，可以說是非常優惠的利率。您如何看待這種結構，繼續前進？

Well, certainly, that's a great question. And we are always evaluating ways to maximize our balance sheet, and obviously, made a lot of progress in that regard. Looking at potential opportunities to bring in some -- you know, really refinance the remaining debt with a much lower interest rate in a way that could free up some additional cash.

嗯，當然，這是一個很好的問題。我們一直在評估最大化我們的資產負債表的方法，並且顯然在這方面取得了很大進展。尋找潛在的機會來引入一些——你知道，真正以低得多的利率為剩餘的債務再融資，這樣可以釋放一些額外的現金。

We certainly just outlined a pretty aggressive investment strategy that becomes a source of -- a use of many of those funds. And we also believe to -- to stay well positioned for opportunistic growth, and to have a solid foundation that maintaining a pretty large cash balance is not a bad thing in today's environment.

我們當然剛剛概述了一個非常激進的投資策略，它成為了其中許多資金的來源。而且我們還相信 - 為機會主義增長做好準備，並有一個堅實的基礎，在當今的環境中保持相當大的現金餘額並不是一件壞事。

But we continue to evaluate all opportunities to -- you know, to optimize the -- the use of cash to the benefit of the company and its shareholders.

但我們會繼續評估所有機會，以優化現金使用以造福公司及其股東。

And I know you've been, you know, largely capital constrained the last few years. So, I imagine you have some pretty attractive potential projects. But can you give any insight, you know, either in kind of aggregate dollar amounts or a couple examples of projects you'd like to do and what they'd cost? And, in particular, what kind of paybacks -- you know, how many years you think you're going to see paybacks in some of these investments?

我知道你在過去的幾年裡一直在很大程度上受到資本限制。所以，我想你有一些非常有吸引力的潛在項目。但是，您能否提供任何見解，您知道的，無論是美元總額還是您想做的幾個項目示例以及它們的成本？而且，特別是，什麼樣的回報——你知道，你認為你會在這些投資中看到多少年的回報？

Sure. If you look at what we -- we talked about -- and, you know, certainly, the $16 million -- you know, a good part of that is the two corn oil projects. Looking at other, you know, fine grind opportunities in the two other plants. Making some piping and configuration changes on some of the process equipment that improve efficiencies, as well. And if you -- you know, you look at those projects that we generally outlined in aggregate of $16 million and, you know, six to nine months to complete all those projects, and improving our EBITDA five cents to six cents per gallon -- you know, running that math shows a very quick return of less than two years.

當然。如果你看看我們 - 我們談論過的 - 你當然知道 1600 萬美元 - 你知道，其中很大一部分是兩個玉米油項目。看看其他兩個工廠的精磨機會。對一些提高效率的工藝設備進行一些管道和配置更改。如果你——你知道，你看看那些我們通常概述的總計 1600 萬美元的項目，你知道，完成所有這些項目需要 6 到 9 個月，並將我們的 EBITDA 提高 5 美分到 6 美分/加侖——你知道，運行該數學顯示不到兩年的快速回報。

Excellent. Well, congratulations on being that debt-free, and look forward to next quarter.

出色的。好吧，恭喜你沒有債務，期待下個季度。

Thank you, Nathan.

謝謝你，內森。

Thank you. And once again, ladies and gentlemen, if you have a question at this time, please press star, then one. If your question has been answered or you wish to remove yourself from the queue, please press the pound key.

謝謝你。再一次，女士們，先生們，如果您此時有任何問題，請按星號，然後按一個。如果您的問題已得到解答或您希望將自己從隊列中刪除，請按井號鍵。

And one moment.

還有一瞬間。

Our next question comes from the line of Craig Irwin of Wedbush Securities. Your line is now open.

我們的下一個問題來自 Wedbush Securities 的 Craig Irwin。您的線路現已開通。

Craig, please check your mute button.

克雷格，請檢查你的靜音按鈕。

Thank you.

謝謝你。

Good morning, and congratulations on the nice quarter there.

早上好，祝賀那裡的美好時光。

Thank you.

謝謝你。

So, Neil, over the course of '14, we've seen some fairly significant changes to the futures curve. And spot profitability has done some very nice things. Can you comment -- you know, today, where we sit in the third quarter, have you seen some of the strengthening benefit -- your [P&L] to date? And do you -- do you subscribe to the view that was shared by one of your competitors recently that, you know, the fourth quarter could continue to see strengthening from we're at now, given the corn dynamic and this continued strong export demand?

所以，尼爾，在 14 年的過程中，我們已經看到期貨曲線發生了一些相當顯著的變化。現貨盈利已經做了一些非常好的事情。您能否發表評論-您知道，今天，我們在第三季度所處的位置，您是否看到了一些增強的收益-您迄今為止的 [P&L]？您是否同意您的一位競爭對手最近分享的觀點，即鑑於玉米動態和持續強勁的出口需求，第四季度可能會繼續從我們目前的情況看走強?

Yes, we're very optimistic about the future. We are seeing a much stronger forward margin curve. It's always an inverse. There's less of a margin out forward, given the -- you know, frankly, still the lack of liquidity in that -- that futures market. But this is some of the fast-forward margin on paper that we've really ever seen in the business. And the -- the spot margins continue to be stronger than that.

是的，我們對未來非常樂觀。我們看到了更強勁的遠期保證金曲線。它總是相反的。鑑於 - 你知道，坦率地說，仍然缺乏流動性 - 期貨市場的遠期利潤較少。但這是我們在業務中真正見過的一些紙面上的快進利潤。而且 - 現貨利潤率繼續高於此。

So, it is a -- a very good margin environment today, and we do anticipate that really, not just through the fourth quarter, but into 2015, we expect continued strength.

所以，今天是一個非常好的利潤率環境，我們確實預計，不僅僅是到第四季度，而是到 2015 年，我們預計會持續走強。

You have a fundamental value proposition between the cost of corn and the cost of crude oil, where ethanol can generate nice profitability for producers and still be sold into the market at a very significant discount to gasoline for a product that also provides needed octane here in the United States, and increasingly around the world.

你在玉米成本和原油成本之間有一個基本的價值主張，乙醇可以為生產商帶來良好的盈利能力，並且仍然以比汽油非常顯著的折扣出售到市場上，這種產品也提供了所需的辛烷值美國，以及越來越多的世界各地。

So, we are seeing the export market support that. We actually just very recently haven't seen a lot of activity on booking to exports for the fourth quarter and into the first. And that bodes very well for this continued strength in the margin environment.

因此，我們看到出口市場對此提供支持。實際上，我們最近還沒有看到第四季度和第一季度的出口預訂活動很多。這對於利潤率環境中的這種持續強勢來說是個好兆頭。

Yeah. Thank you for that.

是的。謝謝你。

Second question I wanted to ask was, the proposed tankers regs out there look like they could slow down the -- the rail cars that carry ethanol around our country -- would create an artificial change to the, I guess, overall inventories is one way to think about it. But given that you transport all your ethanol by truck, do you see this as something that would -- would advantage Pacific Ethanol if it's as -- if it's implemented as written today?

我想問的第二個問題是，提議的油輪法規看起來可以放慢速度——在我們國家各地運送乙醇的鐵路車——會人為地改變，我猜，整體庫存是一種方式考慮一下。但是，鑑於您用卡車運輸所有乙醇，您是否認為如果按照今天的規定實施，這將有利於 Pacific Ethanol？

Quite definitely. We -- we do believe that, you know, given that the issues that have been out there on rail safety and the accidents that these regs will be implemented -- there could be changes to the proposed rule, but something will be implemented that will impact ethanol and will raise the cost of shipping ethanol by rail.

相當肯定。我們——我們確實相信，你知道，鑑於鐵路安全方面存在的問題以及這些法規將要實施的事故——擬議規則可能會發生變化，但將會實施一些措施影響乙醇，並將提高通過鐵路運輸乙醇的成本。

As you accurately pointed out, we don't ship any of our produced ethanol by rail. It all sold locally by trucks. So, you know, we've already seen a competitive advantage, given the -- the rail logistics constraints out there. It has raised the -- the ethanol basis from Chicago to our markets out West, as those costs are being pushed through the market. And so, that has, in 2014, been a significant advantage for us. And longer-term, as we see these new rail car regulations implemented, that will sustain a continued advantage for us not having to ship our product in rail cars.

正如您準確指出的那樣，我們不通過鐵路運輸我們生產的任何乙醇。這一切都是通過卡車在當地出售的。所以，你知道，鑑於鐵路物流的限制，我們已經看到了競爭優勢。它提高了從芝加哥到我們西部市場的乙醇基礎，因為這些成本正在通過市場推高。因此，在 2014 年，這對我們來說是一個顯著優勢。從長遠來看，當我們看到這些新的軌道車法規實施時，這將保持我們的持續優勢，因為我們不必用軌道車運送我們的產品。

Thank you.

謝謝你。

And my last question, if I may -- there's been a lot of discussion about the Brazilians increasing their blend rate from 25 to 27 and a half -- maybe 26, but that's still positive. And then the potential for the Brazilians to remove price controls on their gasolines -- something that would be stimulative also for economic switching, given that the higher cost of a -- of a gasoline molecule than an ethanol molecule.

我的最後一個問題，如果可以的話 - 有很多關於巴西人將他們的混合率從 25 提高到 27 個半的討論 - 也許是 26，但這仍然是積極的。然後巴西人有可能取消對其汽油的價格控制——這也將刺激經濟轉型，因為汽油分子的成本高於乙醇分子。

Can -- can you comment whether or not these would be incremental to the -- the outlook in '15? Or if you think we face a robust '15 market, even in the absence of potential changes in Brazil that would be more supportive of increasing exports?

您能否評論這些是否會增加 15 年的前景？或者，如果您認為我們面臨一個強勁的 15 年市場，即使巴西沒有可能更支持增加出口的潛在變化？

You know, our current view -- again, if you do not see any major changes in the relationship between corn and oil, our outlet for -- outlook for 2015 is very positive. I would agree that incrementally, what you outlined as occurring in Brazil could add further strength to what already is a strong forward outlook.

你知道，我們目前的觀點——同樣，如果你沒有看到玉米和石油之間的關係有任何重大變化，我們對 2015 年的前景非常樂觀。我同意逐漸地，你所概述的在巴西發生的事情可以進一步加強已經是強勁的前瞻性前景。

I would also add to your comments that they continue to fight weather situations. It's very dry down there. They are not having great cane crops. And they're having to -- even before they increase the blend rates, they're having a difficult time keeping up with their own domestic demand, which is why Brazil is the second largest export market for the U.S. producers.

我還要補充您的評論，即他們繼續與天氣狀況作鬥爭。那裡非常乾燥。他們沒有很好的甘蔗作物。他們不得不——甚至在他們提高混合率之前，他們就很難跟上自己的國內需求，這就是為什麼巴西是美國生產商的第二大出口市場。

Great. Thank you for taking my questions. And congratulations on the strong quarter.

偉大的。謝謝你接受我的問題。並祝賀強勁的季度。

Thank you.

謝謝你。

Thank you. Our next question comes from the line of Paul Resnik of Uncommon Equities. Your line is now open.

謝謝你。我們的下一個問題來自 Uncommon Equities 的 Paul Resnik。您的線路現已開通。

Thank you.

謝謝你。

Well, I'll -- I'll add my congratulations, as well.

好吧，我會 - 我也會祝賀你。

Thank you, Paul.

謝謝你，保羅。

On DD -- on dry distiller grain prices have struggled lately, perhaps reflecting China's new restrictions. Now, you don't sell DDGs, you sell wet distiller grains. How is that market holding up?

關於 DD——乾酒糟的價格最近一直在掙扎，這可能反映了中國的新限制。現在，你不賣 DDG，你賣的是濕酒糟。那個市場如何支撐？

It is holding up or not holding up, just as the dry distillers grains markets. We -- we generally peg our WDG pricing on a moisture-adjusted basis to dried distillered grain pricing. And, as you pointed out, we've seen tremendous weakness in that market. And it is primarily due to the Chinese currently making it very difficult to import -- export DGs to -- to that country. We think that over time, they will again open that market up. This is a repeated cycle with the Chinese to -- to buy a tremendous amount of our distillers grains, which is very stimulative to the overall price, then to back off, see prices drop, and to step back in.

就像乾酒糟市場一樣，它正在支撐或不支撐。我們——我們通常將我們的 WDG 定價在水分調整的基礎上與乾酒糟定價掛鉤。而且，正如您所指出的，我們已經看到該市場的巨大疲軟。這主要是由於中國目前很難向該國進口 - 出口危險品。我們認為，隨著時間的推移，他們將再次打開該市場。這是一個與中國人重複的循環——購買大量我們的酒糟，這對整體價格非常刺激，然後退縮，看到價格下跌，然後退縮。

So, it -- it has -- it has had significant impact. We as an industry -- we're selling dried distillers grains at pretty good and historically high premiums to foreign. It now is tending to be sold at a discount to corn as it clears the market to get back into domestic rations in -- in the poultry and swine, and also to incentivize other countries to become buyers of our distillers grains.

所以，它 - 它已經 - 它產生了重大影響。我們作為一個行業——我們以相當不錯的價格和歷史最高的溢價向外國出售乾酒糟。它現在傾向於以低於玉米的價格出售，因為它清理了市場以恢復家禽和豬的國內口糧，並激勵其他國家成為我們酒糟的買家。

That being said, the margin has not -- you know, the margin profile has changed. Whereas corn prices have come down so rapidly, ethanol has not fallen with corn. And even with the large drops in distillers grain, margins continue to be strong because it's been made up on the ethanol side.

話雖如此，保證金並沒有 - 你知道，保證金概況已經改變。儘管玉米價格下跌如此之快，但乙醇並沒有隨著玉米價格下跌。即使酒糟大幅下降，利潤仍然很強勁，因為它是在乙醇方面彌補的。

Great.

偉大的。

Can you give me what the -- just an estimate of what the current premium that's been -- is currently being provided by your low-carbon footprint on a, you know, per-gallon basis?

你能告訴我——只是對當前溢價的估計——你的低碳足跡目前正在提供什麼，你知道，每加侖的基礎上？

It's currently about two cents a gallon.

目前約為每加侖兩美分。

Mm-hmm.

嗯嗯。

It's been as recently as six months ago was quite a bit higher than that. As the Air Resources Board, California -- Air Resources Board is reauthorizing that program. There's been a pause in the program. It doesn't increase in terms of the -- the percent reduction in carbon intensity now until 2016. So, that has created somewhat of a lull in that market.

就在六個月前，它比這要高得多。作為加利福尼亞州空氣資源委員會——空氣資源委員會正在重新授權該計劃。節目暫停了。從現在到 2016 年碳強度降低的百分比來看，它並沒有增加。因此，這在該市場中造成了一定程度的平靜。

We anticipate as -- as the state makes their plans for reauthorization quite clear over the next number of months that we will again see an increase in carbon credit pricing.

我們預計，隨著該州在接下來的幾個月中非常明確地制定重新授權計劃，我們將再次看到碳信用定價的增加。

Okay.

好的。

And a couple of questions about what's going on in Washington. The much-delayed EPA decision on RFS is now expected in August. Does that seem -- do you think we're finally getting there?

還有幾個關於華盛頓正在發生的事情的問題。 EPA 對 RFS 的延遲已久的決定現在預計將在 8 月作出。看起來 - 你認為我們終於到達那裡了嗎？

Well, certainly, the -- the EPA has redefined the word "soon." And so, I can't really tell you whether we're getting there or not. But, you know, we hear the same things you hear. And, frankly, I'd probably put that closer to September.

嗯，當然，美國環保署已經重新定義了“很快”這個詞。所以，我真的不能告訴你我們是否到達那裡。但是，你知道，我們聽到的和你聽到的一樣。而且，坦率地說，我可能會更接近九月。

The proposal has not yet gone to the OMB. And it's probably 30 days after that. So, I think we're now probably looking at September.

該提案尚未提交給 OMB。之後可能是 30 天。所以，我認為我們現在可能正在關注 9 月。

You know, clearly, given the dynamics in the market, it's immaterial to the current market environment. It becomes material for the longer-term future of advanced biofuels. And we are cautiously optimistic that the -- the final rule will be more supportive of all forms of renewable fuels than the -- the proposed rule.

你知道，很明顯，鑑於市場的動態，它對當前的市場環境並不重要。它成為先進生物燃料長期未來的材料。我們謹慎樂觀地認為，最終規則將比擬議規則更支持所有形式的可再生燃料。

And one last question. You certainly have found a very worthwhile use for $16 million, but that still leaves $32 million, and -- and rising, as far as your cash position. In addition to plant improvements, could you envision some areas where acquisition would make sense?

最後一個問題。您當然已經找到了 1600 萬美元的非常有價值的用途，但仍然剩下 3200 萬美元，而且 - 就您的現金頭寸而言，而且還在上升。除了工廠改進之外，您能否設想一些收購有意義的領域？

Sure. We -- we do believe that this industry will continue to rationalize and consolidate. And we view our position in the market as strong enough to be some -- a company that is in the M&A arena. So, we certainly would -- would advise you if anything material comes up in that regard. But we are open to opportunities.

當然。我們——我們確實相信這個行業將繼續合理化和整合。我們認為我們在市場上的地位足夠強大，足以成為一家併購領域的公司。因此，如果在這方面出現任何材料，我們當然會建議您。但我們對機會持開放態度。

Very good. Once again, congratulations.

很好。再次恭喜。

Thank you, Paul.

謝謝你，保羅。

Thank you.

謝謝你。

At this time, I'm showing no further participants in the queue.

目前，我沒有顯示隊列中的其他參與者。

I would like to turn the call back over to Neil Koehler for any closing remarks.

我想將電話轉回給 Neil Koehler 進行任何結束語。

Again, thank you all very much for joining us today. This was a great quarter. We have a very positive outlook on our results and performance going forward as a company and an industry. We really appreciate everyone's support of the company. And we will talk to you next quarter.

再次，非常感謝大家今天加入我們。這是一個很棒的季度。作為一家公司和一個行業，我們對我們的業績和業績持非常積極的態度。我們非常感謝大家對公司的支持。我們將在下個季度與您交談。

Thank you.

謝謝你。

Ladies and gentlemen, thank you for your participation on today's conference. This concludes the program. You may now disconnect.

女士們，先生們，感謝你們參加今天的會議。程序到此結束。您現在可以斷開連接。

Everyone have a great day.

每個人都有美好的一天。