Alto Ingredients Inc (ALTO) 2018 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Pacific Ethanol, Inc.

女士們，先生們，美好的一天，歡迎來到太平洋乙醇公司。

Third Quarter 2018 Financial Results Conference Call.

2018 年第三季度財務業績電話會議。

(Operator Instructions) As a reminder, today's conference is being recorded.

（操作員說明）提醒一下，今天的會議正在錄製中。

I would now like to turn the call over to Kirsten Chapman, LHA Investor Relations.

我現在想將電話轉給 LHA 投資者關係部的 Kirsten Chapman。

Ma'am, you may begin.

女士，您可以開始了。

Thank you, Mark, and thank you, all for joining us today for the Pacific Ethanol Third Quarter 2018 Results Conference Call.

謝謝你，馬克，謝謝大家今天加入我們參加太平洋乙醇公司 2018 年第三季度業績電話會議。

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

今天的電話是；我們的總裁兼首席執行官 Neil Koehler；和首席財務官布賴恩·麥格雷戈。

Neil will begin with a review of the business highlights.

Neil 將首先回顧業務亮點。

Bryon will provide a summary of the financial and operating results.

布賴恩將提供財務和運營結果的摘要。

And then, Neil will return to discuss Pacific Ethanol's outlook and open the call for questions.

然後，Neil 將返回討論 Pacific Ethanol 的前景並開始提問。

Pacific Ethanol issued a press release yesterday providing the details of the company's quarterly results.

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。

The company also prepared a presentation for today's call that is available on the company's website at pacificethanol.net.

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 上查閱。

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 November 8, the details of which are included in yesterday's press release.

今天的電話重播將在 11 月 8 日之前提供，詳細信息包含在昨天的新聞稿中。

A webcast replay will also be available at Pacific Ethanol's website.

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, November 1, and therefore, you are advised that time-sensitive information may no longer be accurate at the time of any replay.

請注意，本次電話會議中的信息僅適用於今天，即 11 月 1 日，因此，請注意，在任何重播時，時間敏感信息可能不再準確。

Please refer to the company's safe harbor statement on Slide 2 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 uncertainties.

請參閱公司在網上提供的幻燈片 2 上的安全港聲明，該聲明表示，本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 statements.

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。

In management's prepared remarks, non-GAAP measures will be referenced.

在管理層準備好的評論中，將引用非公認會計原則措施。

Management uses these non-GAAP measures to monitor the financial performance of operations and believes these measures will assist investors in assessing the company's performance for the periods being reported.

管理層使用這些非公認會計原則措施來監控運營的財務業績，並相信這些措施將幫助投資者評估公司在報告期間的業績。

The company defines adjusted EBITDA as unaudited net income or loss attributed to Pacific Ethanol before interest expense, provision or benefit for income taxes, asset impairments, purchase accounting adjustments, fair value adjustments and depreciation and amortization expense.

該公司將調整後的 EBITDA 定義為在利息費用、所得稅準備金或福利、資產減值、採購會計調整、公允價值調整以及折舊和攤銷費用之前歸屬於太平洋乙醇的未經審計的淨收入或損失。

To support the company's review of non-GAAP information later in this call, a reconciling table was included in yesterday's press release.

為了支持公司稍後在本次電話會議中對非公認會計原則信息的審查，昨天的新聞稿中包含了一個核對錶。

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

現在我很高興向大家介紹總裁兼首席執行官 Neil Koehler。

Neil, please go ahead.

尼爾，請繼續。

Thank you, Kirsten, and thanks to everyone for joining us today.

謝謝你，克爾斯滕，也感謝大家今天加入我們。

Before I do my high-level review of our third quarter 2018 financial results, I wanted to discuss some recent regulatory and industry developments that are of positive significance to Pacific Ethanol.

在對我們 2018 年第三季度的財務業績進行高級別審查之前，我想討論一些對 Pacific Ethanol 具有積極意義的近期監管和行業發展。

First on the regulatory side, the Environmental Protection Agency, EPA, is beginning a formal rule-making process to allow year-round sales of E15 nationwide.

首先在監管方面，美國環境保護署 (EPA) 正在開始正式的規則制定程序，以允許在全國范圍內全年銷售 E15。

This generates a significant growth opportunity for the U.S. market that over time could result in approximately 7 billion gallons of new ethanol demand, given the current gasoline market.

鑑於目前的汽油市場，這為美國市場帶來了巨大的增長機會，隨著時間的推移，可能會產生大約 70 億加侖的新乙醇需求。

While commercial E15 implementation will take time, this move provides an important growth path for the domestic ethanol industry, and we expect E15 sales to accelerate materially in 2019, given the cost and environmental advantages of higher ethanol blends.

雖然商業 E15 的實施需要時間，但這一舉措為國內乙醇行業提供了一條重要的增長路徑，鑑於高級乙醇混合物的成本和環境優勢，我們預計 E15 的銷售將在 2019 年大幅加速。

Subsequent to the President's announcement directing the EPA on the rule-making, 2 large retail chains announced large expansion plans for E15 distribution and we expect to hear other announcements soon.

在總統宣布指導 EPA 制定規則之後，兩家大型零售連鎖店宣布了 E15 分銷的大規模擴張計劃，我們預計很快會聽到其他公告。

The EPA has committed to complete rule-making by the summer of 2019, and the ethanol industry is working to make sure they keep to that commitment.

EPA 已承諾在 2019 年夏天之前完成規則制定，乙醇行業正在努力確保他們遵守這一承諾。

The recent E15 announcement reflects President Trump's repeated support for the ethanol industry and for agriculture.

最近的 E15 公告反映了特朗普總統對乙醇工業和農業的一再支持。

With RIN prices now trading near 5-year lows, we see no rationale for the EPA to grant additional small refinery economic exemptions and if fewer or none are granted, this will result in stronger domestic ethanol demand in 2019.

由於 RIN 價格目前接近 5 年低點，我們認為 EPA 沒有理由授予額外的小型煉油廠經濟豁免，如果授予更少或沒有授予，這將導致 2019 年國內乙醇需求增加。

Further, the West Coast carbon markets continue to create strong premiums for our low-carbon ethanol.

此外，西海岸碳市場繼續為我們的低碳乙醇創造強勁的溢價。

This week, California carbon pricing per metric ton reached record highs of greater than $190, following the upward trend over the last 2 years.

本週，加州每公噸碳定價達到了超過 190 美元的歷史新高，延續了過去 2 年的上漲趨勢。

Also leading oil and gas companies are increasing their diversification and investment in ethanol.

領先的石油和天然氣公司也在增加對乙醇的多樣化和投資。

Recently, Valero announced the purchase of several plants, demonstrating the positive long-term view of ethanol and also providing an updated indication evaluation of ethanol production-related assets.

最近，Valero 宣布收購幾家工廠，展示了對乙醇的積極長期看法，並提供了對乙醇生產相關資產的最新指示評估。

Now turning to a review of our third quarter.

現在轉向對我們第三季度的回顧。

Net sales were $370 million compared to $445 million in last year's third quarter.

淨銷售額為 3.7 億美元，而去年第三季度為 4.45 億美元。

Total gallons sold were up 212 million.

總銷量增加了 2.12 億加侖。

Production gallons sold were 140 million.

售出的生產加侖為 1.4 億。

We had a $3.8 million gross profit for the third quarter compared to a gross profit of $12.1 million in the comparable quarter last year.

我們第三季度的毛利潤為 380 萬美元，而去年同期的毛利潤為 1210 萬美元。

Loss available to common shareholders was $7.8 million, and adjusted EBITDA was a positive $6.3 million compared to a loss available to common shareholders of $0.5 million and adjusted EBITDA of a positive $13.2 million last year.

普通股股東可獲得的損失為 780 萬美元，調整後的 EBITDA 為正 630 萬美元，而去年普通股股東的損失為 50 萬美元，調整後的 EBITDA 為正的 1320 萬美元。

Industry ethanol margins continue to be compressed in the third quarter with industry inventories near record highs, pointing to the need for some combination of lower production levels and new incremental demand from higher blends and exports.

第三季度工業乙醇利潤率繼續被壓縮，工業庫存接近歷史高位，這表明需要結合較低的產量水平和來自更高混合物和出口的新增量需求。

As a company, we have reduced our production levels and are running at around 90% of operating capacity across the portfolio.

作為一家公司，我們已經降低了生產水平，並且在整個產品組合中的運營能力約為 90%。

We remain focused on implementing initiatives and investing our assets to reduce our costs, improve our yields and carbon scores and build long-term value for our shareholders.

我們仍然專注於實施計劃和投資我們的資產，以降低我們的成本、提高我們的產量和碳分數，並為我們的股東創造長期價值。

We are at or near completion of several plant-level capital projects with near-term paybacks.

我們正在或接近完成幾個具有近期回報的工廠級資本項目。

We have achieved commercial operations with successful performance testing of our solar project at Madera.

我們在馬德拉的太陽能項目成功進行了性能測試，從而實現了商業運營。

We currently are producing at 3.5-megawatt level and following upgrades by PG&E at the local substation.

我們目前的發電量為 3.5 兆瓦，並由 PG&E 在當地變電站進行升級。

We'll move to the full 5-megawatt level by the year-end.

我們將在年底前達到完整的 5 兆瓦水平。

This project lowers our electricity cost and improves our carbon score at our Madera facility, yielding over $1 million of annual operating benefit.

該項目降低了我們的電力成本並提高了我們在馬德拉工廠的碳分數，每年產生超過 100 萬美元的運營收益。

We have made good progress on our 3.5-megawatt cogeneration project at our Stockton, California facility.

我們在加利福尼亞州斯托克頓的 3.5 兆瓦熱電聯產項目取得了良好進展。

Required modifications to the 2 generating units were completed in the third quarter and the units are now installed.

對 2 台發電機組的必要改造已於第三季度完成，現在這些機組已安裝完畢。

We're currently going through startup operations and anticipate the system will be at target performance by the end of the year.

我們目前正在進行啟動操作，預計該系統將在年底前達到目標性能。

Commercial operations at the Airgas CO2 plant at our Stockton facility have been pushed out slightly to the beginning of 2019.

我們斯托克頓工廠的 Airgas CO2 工廠的商業運營已略微推遲到 2019 年初。

Although these operations are not under our control, but rather follow Airgas' construction schedule.

雖然這些操作不在我們的控制之下，而是按照 Airgas 的施工進度進行。

We expect the plant to be producing revenue for Pacific Ethanol in the first quarter of next year.

我們預計該工廠將在明年第一季度為 Pacific Ethanol 創造收入。

During the third quarter, we received a new pathway from the California Resources Board (sic) [California Air Resources Board] for our Stockton cellulosic ethanol that adds to the premium pricing for this production and which is expected to contribute approximately $0.5 million of incremental EBITDA per year based on the current carbon market.

在第三季度，我們從加利福尼亞資源委員會 (原文如此) [加利福尼亞空氣資源委員會] 收到了一條新途徑，用於我們的斯托克頓纖維素乙醇，這增加了這種生產的溢價，預計將貢獻約 50 萬美元的增量 EBITDA每年根據當前的碳市場。

We continue to generate D3 RINS and are still awaiting a final EPA approval of our cellulosic ethanol pathways for our Madera and Magic Valley plants.

我們繼續生產 D3 RINS，並且仍在等待 EPA 對我們的 Madera 和 Magic Valley 工廠的纖維素乙醇途徑的最終批准。

Turning to the ethanol export market.

轉向乙醇出口市場。

U.S.-produced ethanol continues to see growth as a blend component in gasoline around the world due to its low-cost, high-octane content and contribution to reducing carbon emissions.

由於其低成本、高辛烷值和對減少碳排放的貢獻，美國生產的乙醇作為一種混合成分在全球範圍內繼續增長。

An important recent development was the Trump administration's actions to preserve tariff-free treatment of ethanol exported to Canada and Mexico.

最近的一個重要發展是特朗普政府採取的行動，以保持對出口到加拿大和墨西哥的乙醇的免關稅待遇。

Canada is the second largest export market, and Mexico, although nascent, is poised for increased ethanol use as a cost-effective, environmentally favorable substitute for MTBE.

加拿大是第二大出口市場，而墨西哥雖然處於起步階段，但已準備好增加乙醇的使用，作為 MTBE 的成本效益高、對環境有利的替代品。

Both countries are showing year-over-year growth in U.S. ethanol purchases.

這兩個國家的美國乙醇採購量均出現同比增長。

The trade tariffs imposed by the U.S. and reciprocated by China, however have caused China to cease purchasing any ethanol from the U.S. This has been a significant negative factor in the overall supply and demand picture for the industry this year.

然而，美國征收的貿易關稅並得到中國的回報，導致中國停止從美國購買任何乙醇，這一直是今年該行業整體供需狀況的一個重要負面因素。

At the beginning of the year, China was on pace to purchase record volumes of ethanol from the U.S. However, since the tariffs began, exports to China have declined to 0. As a company, and as an industry, we encourage the Trump administration to relieve the market barrier caused by these tariffs.

今年年初，中國正準備從美國購買創紀錄數量的乙醇。然而，自關稅開始以來，對中國的出口量已降至零。作為一家公司和一個行業，我們鼓勵特朗普政府緩解這些關稅造成的市場壁壘。

If China sticks to its 10% ethanol by 2020 goal, which we believe they will, China will need to import significant quantities of ethanol, supporting continued growth in the overall international demand for ethanol.

如果中國堅持到 2020 年實現 10% 乙醇的目標（我們相信他們會這樣做），中國將需要進口大量乙醇，從而支持國際乙醇整體需求的持續增長。

We expect total exports this year to reach another record high of between 1.6 billion and 1.7 billion gallons, which represents about a 20% increase from 2017 levels and we expect additional growth in the export market in 2019.

我們預計今年的總出口量將再創歷史新高，達到 16 億至 17 億加侖，比 2017 年的水平增加約 20%，我們預計 2019 年出口市場將進一步增長。

With that, I'd like to turn the call over to our CFO, Bryon McGregor.

有了這個，我想把這個電話轉給我們的首席財務官，Bryon McGregor。

Thank you, Neil.

謝謝你，尼爾。

For the third quarter 2018 compared to the third quarter of 2017, net sales were $370 million compared to $445 million.

與 2017 年第三季度相比，2018 年第三季度的淨銷售額為 3.7 億美元，而 4.45 億美元。

The 17% decline in sales is attributable to lower ethanol prices, fewer gallons produced and fewer third-party gallons sold.

銷售額下降 17% 是由於乙醇價格下降、生產的加侖數減少以及第三方銷售的加侖數減少。

Cost of goods sold was $367 million compared to $433 million in the prior year's quarter, predominantly a reflection of not only lower sales, but also affected by lower corn prices and reduced production costs.

商品銷售成本為 3.67 億美元，而去年同期為 4.33 億美元，這主要反映了不僅銷售額下降，還受到玉米價格下跌和生產成本下降的影響。

Gross profit for the quarter totaled $3.8 million compared to $12.1 million in the prior year's quarter.

本季度毛利潤總額為 380 萬美元，而去年同期為 1210 萬美元。

This decline is a result of lower ethanol margins.

這種下降是由於乙醇利潤率下降。

SG&A expenses were $9 million, up slightly from $8.7 million.

SG&A 費用為 900 萬美元，略高於 870 萬美元。

We expect SG&A for Q4 to total $9 million in line with our prior guidance.

我們預計第四季度的 SG&A 總額將達到 900 萬美元，與我們之前的指導一致。

Loss available to common shareholders was $7.8 million or $0.18 per share compared to $0.5 million or $0.01 per share.

普通股股東的損失為 780 萬美元或每股 0.18 美元，而每股損失為 50 萬美元或 0.01 美元。

Adjusted EBITDA was $6.3 million compared to $13.2 million in the year-ago period.

調整後的 EBITDA 為 630 萬美元，而去年同期為 1320 萬美元。

For the 9 months ended September 30, 2018 compared to 2017, net sales were $1.18 billion compared to $1.24 billion.

截至 2018 年 9 月 30 日的 9 個月與 2017 年相比，淨銷售額為 11.8 億美元，而 12.4 億美元。

Cost of goods sold was $1.18 billion compared to $1.23 billion.

商品銷售成本為 11.8 億美元，而銷售成本為 12.3 億美元。

Gross profit was $5.9 million compared to $7.9 million.

毛利潤為 590 萬美元，而毛利潤為 790 萬美元。

SG&A expenses were $27.2 million compared to $22.9 million, the latter of which included $3.6 million in onetime gains associated with legal matters in the prior year.

SG&A 費用為 2720 萬美元，而去年為 2290 萬美元，後者包括上一年與法律事務相關的 360 萬美元的一次性收益。

Loss available to common shareholders was $29.2 million or $0.68 per share compared to $22.6 million or $0.53 per share.

普通股股東可獲得的損失為 2,920 萬美元或每股 0.68 美元，而普通股東為 2,260 萬美元或每股 0.53 美元。

Adjusted EBITDA was $12.9 million compared to $13.9 million.

調整後的 EBITDA 為 1290 萬美元，而調整後的 EBITDA 為 1390 萬美元。

Turning to our balance sheet.

轉向我們的資產負債表。

During the first 9 months of 2018, cash flow from operations was $26.1 million compared with $21.2 million coming from the third quarter alone, contributing to a stronger balance sheet.

在 2018 年前 9 個月，運營現金流為 2610 萬美元，而僅第三季度就為 2120 萬美元，有助於增強資產負債表。

At September 30, 2018, cash and cash equivalents were $56.1 million compared to $49.5 million at December 31, 2017.

截至 2018 年 9 月 30 日，現金和現金等價物為 5610 萬美元，而 2017 年 12 月 31 日為 4950 萬美元。

For the third quarter of 2018, our capital expenditures totaled $3.5 million, primarily related to plant improvement initiatives, bringing our total capital expenditures year-to-date to just over $10.9 million.

2018 年第三季度，我們的資本支出總額為 350 萬美元，主要與工廠改進計劃有關，使我們今年迄今為止的總資本支出略高於 1090 萬美元。

In light of the weak market conditions year-to-date, we have adjusted the number of capital projects and expect to limit Q4 expenditures to around $3 million, well below our full year CapEx guidance.

鑑於年初至今的疲軟市場狀況，我們調整了資本項目的數量，並預計將第四季度的支出限制在 300 萬美元左右，遠低於我們全年資本支出的指導。

For the third quarter of 2018, we focused on reducing our total debt with $23.7 million paid in the quarter through a combination of term loan repayments and reduced usage of both term revolver and line of credit facilities.

對於 2018 年第三季度，我們專注於通過定期償還貸款和減少定期循環貸款和信貸額度的使用來減少本季度支付的 2370 萬美元的總債務。

Looking at our overall capital structure, over the past few years, we've quickly grown from a company with 4 plants and annual ethanol production capacity of 200 million gallons to 9 plants with capacity of more than 600 million gallons, while diversifying product offerings and expanding nationally.

從我們的整體資本結構來看，在過去的幾年裡，我們從一家擁有 4 家工廠、2 億加侖年乙醇生產能力的公司迅速成長為 9 家工廠、產能超過 6 億加侖的公司，同時提供多樣化的產品和在全國范圍內擴展。

We have built a scalable business model to take advantage of the expected growth we see in the ethanol industry.

我們已經建立了一個可擴展的商業模式，以利用我們在乙醇行業看到的預期增長。

This growth has been conservatively funded through a sensible combination of equity, long-term debt and cash flow.

通過股權、長期債務和現金流的合理組合，保守地為這種增長提供了資金。

Our balance sheet remains strong despite the current market challenges, and we feel it is appropriate to maintain as part of our capital structure a conservative level of long-term debt, lowering our overall cost of capital and enhancing shareholder return on investment.

儘管當前面臨市場挑戰，我們的資產負債表仍然強勁，我們認為作為我們資本結構的一部分，維持長期債務的保守水平是合適的，這可以降低我們的總體資本成本並提高股東的投資回報率。

In this regard, we are actively evaluating opportunities to refinance our senior notes well in advance of their December 2019 maturity.

在這方面，我們正在積極評估在 2019 年 12 月到期之前為我們的優先票據再融資的機會。

We exited the third quarter with solid liquidity of approximately $70 million, consisting of cash and excess availability under our revolving lines of credit.

我們以大約 7000 萬美元的穩定流動性結束了第三季度，其中包括現金和循環信貸額度下的超額可用性。

With that, I will turn the call back to Neil.

有了這個，我會把電話轉回給尼爾。

Thanks, Bryon.

謝謝，布賴恩。

To sum up, we believe that fair and open access for E15 year round and a properly and legally implemented RFS will support significant growth in domestic ethanol demand.

綜上所述，我們認為 E15 全年公平開放的准入以及適當合法實施的 RFS 將支持國內乙醇需求的顯著增長。

And we are confident that the compelling cost, octane carbon benefits of ethanol will drive both new domestic and export demand in 2019, resulting in improved margins for our company.

我們相信，乙醇引人注目的成本和辛烷碳優勢將在 2019 年推動新的國內和出口需求，從而提高我們公司的利潤率。

Our focus today is on delivering additional value with our existing assets to capitalize on positive macro trends by cutting costs at both the operating and corporate level, further diversifying our sales through additional high-protein feed and alcohol products, and new initiatives to continue to lower the carbon score of our plants that can service valuable low-carbon fuel markets.

我們今天的重點是利用現有資產提供額外價值，通過削減運營和企業層面的成本來利用積極的宏觀趨勢，通過額外的高蛋白飼料和酒精產品進一步多樣化我們的銷售，以及繼續降低成本的新舉措我們可以為有價值的低碳燃料市場提供服務的工廠的碳得分。

With that Mark, I would like to open the call for Q&A.

有了那個標記，我想打開問答電話。

(Operator Instructions) And our first question comes from the line of Eric Stine of Craig-Hallum.

（操作員說明）我們的第一個問題來自 Craig-Hallum 的 Eric Stine。

So just on the production side, clearly, you've pulled back some on production.

因此，就生產方面而言，很明顯，您已經撤回了一些生產。

Just wondering, if you're seeing any evidence of that in the industry?

只是想知道，如果您在行業中看到任何證據？

And just curious, I mean, whether you're seeing that or when you look forward, is it E15 and potentially China coming back that gets this market back in balance, or just how do you see that playing out?

只是好奇，我的意思是，無論你是看到這一點還是展望未來，是 E15 和潛在的中國回歸讓這個市場恢復平衡，還是你如何看待這種情況？

Yes, a fair question.

是的，一個公平的問題。

We've seen some reduction in production, not enough given the current inventory and the current supply-and-demand balance as we move into -- moving out of the driving season.

我們已經看到產量有所減少，考慮到當前的庫存和當前的供需平衡，當我們進入 - 離開駕駛季節時，這還不夠。

So long term, really midterm, we're very bullish on incremental demand, but we're here, where we are, which is inventory is, well, not significantly out of balance, probably 100-million-plus gallons that like to reduce.

從長期來看，實際上是中期，我們非常看好增量需求，但我們就在這裡，我們所處的位置，即庫存，嗯，並沒有明顯失衡，可能會減少 1 億多加侖.

What's encouraging, this week even with production up a bit from the week before, albeit down over the last 4 week average, the EIA inventories were down almost 5%.

令人鼓舞的是，本週儘管產量比前一周略有上升，儘管比過去 4 週的平均水平有所下降，但 EIA 庫存下降了近 5%。

So that was actually a very good trend.

所以這實際上是一個非常好的趨勢。

At the current pricing of ethanol, near historic low since they have been listed on the Chicago Board.

以目前乙醇的價格，接近其在芝加哥交易所上市以來的歷史低點。

And higher gasoline prices, we are seeing a pickup in exports now even without China.

汽油價格上漲，即使沒有中國，我們現在也看到出口回升。

But to your point, with China in the mix, it would be a very different market and margin environment today.

但就你的觀點而言，如果有中國參與，今天的市場和利潤環境將大不相同。

So we're also optimistic that China will come back in as well, and that a combination of some discipline on production and incremental demand will right the ship.

因此，我們也樂觀地認為，中國也將捲土重來，並且將一些生產紀律和增量需求相結合，將順理成章。

Okay.

好的。

A good segue to exports.

一個很好的出口。

I know your earlier read, looking for growth in 2019.

我知道你早先的讀物，正在尋找 2019 年的增長。

I mean, I would -- well, curious are you assuming anything from China in that view?

我的意思是，我會- 很好奇，你有沒有在這種觀點中假設來自中國的任何東西？

And then, when you're thinking about growth year-over-year, maybe just talk about some of the important or incremental markets that help that.

然後，當您考慮逐年增長時，也許只需談論一些有助於實現增長的重要或增量市場。

Sure.

當然。

The -- in a incremental, albeit small increase in 2019, I would say that does not include China.

- 在 2019 年的增量中，儘管增幅很小，但我想說這不包括中國。

So China is a wildcard.

所以中國是通配符。

I personally believe it will come into play in 2019 and that would result in larger increases.

我個人認為它將在 2019 年發揮作用，這將導致更大的增長。

So I think, we see small increases without China and large increases with China.

所以我認為，我們看到沒有中國的小幅增長和有中國的大幅增長。

We are seeing now with the deregulation in Mexico, some incremental increases there expected in 2019.

我們現在看到墨西哥放鬆管制，預計 2019 年會有一些增量增長。

As you recall, Japan has now authorized some increment of their use of ethanol to be corn-based ethanol.

正如你所記得的那樣，日本現在已授權將其乙醇的使用量增加為以玉米為基礎的乙醇。

It had been limited to only Brazilian to produce the ETBE that they blend into their gasoline.

僅限於巴西人生產他們混合到汽油中的 ETBE。

So we see that as about 100 million gallon incrementally new market starting in 2019.

因此，我們認為從 2019 年開始，新市場將增加約 1 億加侖。

Brazil, the largest import of our ethanol will continue to be a strong user given the demand and the price point of ethanol in Brazil, so at/or potential increases.

考慮到巴西乙醇的需求和價格點，我們最大的乙醇進口國巴西將繼續成為強勁的用戶，因此可能會上漲。

Canada, they have new programs to increase the blend rates up there.

加拿大，他們有新的計劃來提高那裡的混合率。

We're seeing incremental growth this year.

今年我們看到了增量增長。

We expect to see incremental growth next year.

我們預計明年會出現增量增長。

India, has a large market as well, also with their moving their blend rates up and then continue to encourage ethanol use.

印度也有很大的市場，他們也提高了混合率，然後繼續鼓勵使用乙醇。

We see incremental growth there.

我們在那裡看到了增量增長。

Given the exceptionally good price point on an octane basis, so areas in the Middle East, and where ethanol gets used just for pure octane blending economics, we anticipate that given the current relationship between ethanol and world gasoline prices that we will continue to see growth there as well.

鑑於辛烷值非常好，中東地區以及乙醇僅用於純辛烷混合經濟的地區，我們預計，鑑於目前乙醇與世界汽油價格之間的關係，我們將繼續看到增長也有。

Okay.

好的。

Maybe last one from me, and I apologize, if I missed this earlier.

也許是我的最後一個，如果我早些時候錯過了這個，我深表歉意。

But I just wanted to confirm, you did say you generated cash in the quarter?

但我只是想確認一下，您確實說過您在本季度產生了現金？

I missed that.

我錯過了。

Yes.

是的。

I mean, clearly, our EBITDA numbers of over $6 million.

我的意思是，很明顯，我們的 EBITDA 數字超過 600 萬美元。

And we're able to really focus on some debt reduction opportunities and reduce usage of our revolvers.

而且我們能夠真正專注於一些減少債務的機會並減少左輪手槍的使用。

Okay.

好的。

If my math's right, was that like $15 million, $20 million from operations for the quarter?

如果我的數學是正確的，那是 1500 萬美元，2000 萬美元來自本季度的運營嗎？

$26.1 million, I have it, if my recollection serves.

如果我沒記錯的話，我有 2610 萬美元。

And our next question comes from the line of Carter Driscoll of B. Riley FBR.

我們的下一個問題來自 B. Riley FBR 的 Carter Driscoll。

This is Carson Sippel on for Carter Driscoll.

這是卡特德里斯科爾的卡森西佩爾。

I just had a couple of quick questions.

我只是有幾個簡單的問題。

First, so the roughly 1,500 E15 gas stations across the country, what incentives are there in place, if this number could increase in the coming years?

首先，全國大約有 1,500 個 E15 加油站，如果這個數字在未來幾年會增加，有什麼激勵措施？

Well, the biggest incentive is the price of ethanol.

嗯，最大的誘因是乙醇的價格。

If you blend ethanol with a 10% blend to bring it to 15% blend, you're lowering your cost by anywhere from a nickel to a dime.

如果您將乙醇與 10% 的混合物混合以使其達到 15% 的混合物，那麼您的成本將降低一分錢到一角錢。

And the retail business is highly competitive, and so having that cost advantage is a large incentive.

零售業務競爭激烈，因此擁有這種成本優勢是一個很大的激勵因素。

We, as an industry, have a program called priming the pump that helps with the modest investments that some stations are required to put in blender pumps, et cetera.

作為一個行業，我們有一個名為啟動泵的計劃，它有助於一些加油站需要投入攪拌泵等的適度投資。

So there is aid there.

所以那裡有援助。

There have been time-to-time USDA grants available as well to aid with infrastructure.

美國農業部不時提供贈款以幫助基礎設施建設。

But the real driver is the superior economics that ethanol lowers the cost and makes you more competitive on the street.

但真正的驅動力是卓越的經濟性，乙醇降低了成本，讓您在街頭更具競爭力。

And then increasingly with carbon, certainly out West becoming a factor, the ability to blend more ethanol, more low-carbon ethanol is going to be very significant in meeting compliance under various low-carbon fuel requirements.

然後隨著碳越來越多，當然西方成為一個因素，混合更多乙醇，更多低碳乙醇的能力對於滿足各種低碳燃料要求的合規性將非常重要。

Got it.

知道了。

And then, this is more specific to the company itself.

然後，這更具體到公司本身。

So it seems like third-party gallons have gone down materially for the past 2 quarters.

因此，在過去的兩個季度中，第三方加侖似乎大幅下降。

Do you expect this decline to continue, or do you think you'll begin increasing this number moving forward?

您預計這種下降趨勢會繼續下去，還是您認為您會開始增加這一數字？

I think we're at a pretty good run rate right now.

我認為我們現在的運行速度非常好。

As we said publicly before, is that, we -- really reevaluated some of the third-party business and where we were not able to make money and it wasn't strategic and tributary to our production assets, we pulled back.

正如我們之前公開所說的那樣，我們真的重新評估了一些第三方業務，在我們無法賺錢並且它不是我們生產資產的戰略和附屬品的地方，我們撤回了。

So that was a very intentional strategy and it has resulted in significantly improved profitability in our marketing business.

所以這是一個非常有意的策略，它顯著提高了我們營銷業務的盈利能力。

So -- but right now we feel that we're in a pretty good place, but we're always evaluating that both in terms of where we might decrease and where we might increase.

所以——但現在我們覺得我們處於一個相當不錯的位置，但我們總是根據我們可能減少的地方和可能增加的地方來評估這一點。

Got it.

知道了。

And then last for me, can you provide a quick update on the legal claim for the boiler?

最後對我來說，您能否提供有關鍋爐法律索賠的快速更新？

It is still in litigation and we are still optimistic that we will be successful in that outcome.

它仍在訴訟中，我們仍然樂觀地認為我們將在這一結果中取得成功。

But as it is true with legal actions, hard to handicap timing, but we're pushing hard to have resolution in 2019 on that subject.

但就像法律行動一樣，很難阻礙時機，但我們正在努力在 2019 年就該主題做出解決方案。

(Operator Instructions) And our next question comes from the line of Craig Irwin of Roth Capital Partners.

（操作員說明）我們的下一個問題來自 Roth Capital Partners 的 Craig Irwin。

Can you please walk us through the sequential impact on the sunset of the boiler repairs and the integration expenses for Aventine?

您能否向我們介紹一下對鍋爐維修日落和 Aventine 整合費用的順序影響？

The integration of Aventine is complete.

Aventine 的整合已經完成。

We and ICP and there are $1 million of synergies that are being recognized.

我們和 ICP 有 100 萬美元的協同效應正在得到認可。

You point out the boilers, that has been a significant drag over the last 3 years to the tune, when you add up all of the lost time, the repairs, the repairs and maintenance, the rental boilers, the litigation, it's been a $27 million drain to the company over the last 3 years.

你指出鍋爐，這在過去 3 年裡一直是一個很大的拖累，當你把所有損失的時間、修理、修理和維護、出租鍋爐、訴訟加起來時，它是 27 美元在過去的 3 年裡，公司流失了 100 萬美元。

Other than the ongoing litigation, which we expect to recover a significant amount of money from, those expenses are behind us.

除了正在進行的訴訟（我們希望從中收回大量資金）之外，這些費用已經過去了。

So that is -- when you run the numbers on $9 million a year, you can see the large impact that has.

也就是說——當你計算每年 900 萬美元的數字時，你可以看到它產生的巨大影響。

In a positive light to with the ICP integration, the access to the water, we've cut our expenses on logistics by over $2 million on ethanol by moving the barges to our own dock.

從積極的角度來看，與 ICP 整合、獲取水源有關，我們通過將駁船移至我們自己的碼頭，在乙醇方面的物流費用減少了超過 200 萬美元。

We're improving our netbacks as the water barrels today are more valuable than moving product out by rail.

我們正在提高我們的淨收益，因為今天的水桶比通過鐵路運出產品更有價值。

We're finishing the movement of our distillers grain, which all goes out by water as well to our own dock, which is another $1 million of savings.

我們正在完成酒糟的運輸，這些酒都通過水運到我們自己的碼頭，這又節省了 100 萬美元。

We're reducing our rail fleet.

我們正在減少我們的鐵路車隊。

We now have realized almost $5 million, $6 million of annualized savings going forward on reducing our rail fleet with another 100 cars coming off in April.

我們現在已經實現了近 500 萬美元，未來每年節省 600 萬美元，用於減少我們的鐵路車隊，並在 4 月份再減少 100 輛汽車。

So these are -- those are some high-level items of how we really have reduced our costs and are in a much better position going forward.

所以這些是 - 這些是我們如何真正降低成本並在未來處於更好位置的一些高級項目。

Great.

偉大的。

So then for those of us that believe that the logical outcome of the trade dispute with China is that China is a very large customer of U.S. ag going forward and that we find a way to be friends, not enemies.

因此，對於我們這些認為與中國的貿易爭端的邏輯結果是中國是美國公司未來的一個非常大的客戶並且我們找到成為朋友而不是敵人的方式的人來說。

That kind of points to fairly high value for forward access for loading ethanol going West, particularly, that's on rail, right?

這表明向西裝載乙醇的前向通道具有相當高的價值，尤其是在鐵路上，對吧？

Can you maybe talk a little bit about whether or not your existing facilities have the capability to add a loading terminal on the water?

您能否談談您現有的設施是否有能力在水上添加一個裝載終端？

What you feel about the rail supply into your existing facilities?

您對現有設施的鐵路供應有何看法？

How you would go about permitting and potentially constructing that?

您將如何允許並可能構建它？

And if this is something that you've looked at as a potential investment over the next couple of years?

如果這是您認為未來幾年的潛在投資？

It is something we've looked at.

這是我們看過的東西。

The only facility that we have that currently would be appropriate would be Stockton.

我們目前唯一合適的設施是斯托克頓。

Double served by 2 railroads on the largest inland port on the West Coast.

由 2 條鐵路在西海岸最大的內陸港口提供雙重服務。

It can't take large vessels.

不能帶大船。

It doesn't currently have the infrastructure, the dock for loading ethanol, so there would be a fair amount of construction in piping and docking.

它目前沒有基礎設施，即裝載乙醇的碼頭，因此在管道和對接方面會有相當多的建設。

But as China and Asia, generally picks up, we do anticipate quite a bit of demand for moving products, ethanol, in particular, off the West Coast.

但隨著中國和亞洲的普遍回暖，我們確實預計對運輸產品（尤其是西海岸的乙醇）的需求會很大。

And it is something we're evaluating for ethanol that would be outside of our own production, because our focus there particularly on the West Coast is to add value on carbon and you don't get that on [passports].

我們正在評估的乙醇將不在我們自己的生產範圍內，因為我們特別關注西海岸的重點是增加碳的價值，而你在 [護照] 上看不到這一點。

So our best netbacks for our own ethanol are close to home, but as we do have a diversified portfolio and marketing company, we are looking at that option as well.

因此，我們自己的乙醇的最佳淨回扣離家很近，但由於我們確實擁有多元化的投資組合和營銷公司，我們也在考慮這種選擇。

All right.

好的。

Great.

偉大的。

My next question is really about asset value.

我的下一個問題實際上是關於資產價值的。

You consolidated your Western plants at what, $0.30 a gallon, and then, you bought Aventine for, I guess about $0.50 a gallon.

您以每加侖 0.30 美元的價格整合了您的西方工廠，然後您以每加侖 0.50 美元的價格購買了 Aventine。

This is a big discount to some of the private transactions in the market.

這對市場上的一些私人交易來說是一個很大的折扣。

What would you consider liquidation value of your plants if you were to just sell them?

如果你只是出售它們，你會考慮你的工廠的清算價值是多少？

Would you expect to get $1 a gallon, if you were to sell them the way Green Plains has moved some of their plants?

如果您以 Green Plains 搬遷一些植物的方式出售它們，您會期望得到每加侖 1 美元嗎？

And what would you consider potential cut it up and sell at real estate value?

您認為有什麼潛力可以將其切割並以房地產價值出售？

I mean, it seems where the stock is now that we could be even below those levels if we factor in the debt and look at where the stock's trading.

我的意思是，如果我們考慮債務並查看股票的交易位置，那麼現在股票的位置似乎甚至可能低於這些水平。

I can't disagree with you.

我不能不同意你的看法。

That's obviously not our focus.

這顯然不是我們的重點。

Our focus is to recognize the real value, which is operating these assets at peak performance.

我們的重點是認識到真正的價值，即以最佳性能運營這些資產。

And to your point, they are undervalued given the current equity evaluations, they are great assets, diversified assets.

就您而言，鑑於當前的股權評估，它們被低估了，它們是偉大的資產，多元化的資產。

All I can say, in terms of market value, is that you will have to look at recent transactions and that is in that $1-plus range that most recent transactions of the Green Plains facilities to Valero.

我只能說，就市場價值而言，您將不得不查看最近的交易，即最近 Green Plains 設施與 Valero 的交易在 1 美元以上的範圍內。

So if you run that math, you can quickly see that there is a huge disconnect between the inherent valuation of the plants based on recent transactions and our current [enterprise] valuation.

因此，如果您進行數學運算，您很快就會發現，基於最近交易的工廠固有估值與我們當前的 [企業] 估值之間存在巨大的脫節。

There is negativity in the ethanol world, and we brought it on ourselves to some degree as an industry.

乙醇世界存在消極情緒，我們在某種程度上把它作為一個行業帶到了自己身上。

We've got too much production.

我們的產量太多了。

We need the incremental markets and demand and with both the E15 and China, you're looking at the opportunity and the direction in a much more positive market environment, and valuations will take care of themselves.

我們需要增量市場和需求，對於 E15 和中國，您正在尋找更加積極的市場環境中的機會和方向，估值將自行解決。

So my last question is about the litigation that started or should start relatively soon, let's hope.

所以我的最後一個問題是關於已經開始或應該相對較快開始的訴訟，希望如此。

Looking to force EPA to reallocate the gallons from Scott Pruitt's foray into inappropriate small refinery waivers.

希望迫使 EPA 將 Scott Pruitt 涉足的加侖重新分配給不適當的小型煉油廠豁免。

Do you have any strong views on the potential of the case?

你對這個案子的潛力有什麼強烈的看法嗎？

And would you potentially have interest in participating in litigation with some of your peers in the ethanol industry?

您是否有興趣與乙醇行業的一些同行一起參與訴訟？

Well, we are participating through our trade association, the Renewable Fuels Association of which, I'm the current Chairman.

嗯，我們通過我們的貿易協會參與，可再生燃料協會，我是現任主席。

So we're very active in that.

所以我們在這方面非常活躍。

We do feel very strongly that what happened under Pruitt's watch on the small refinery exemptions was absolutely not legal and that we have a very strong case, really waiting until the final RVOs come out, because to be able to bring lawsuits on these topics and to be able to prosecute them, we need for that final rule to be out, because there is a possibility, I'm not expecting it, but they could be reallocating gallons in the final rule.

我們確實非常強烈地認為，在 Pruitt 的監督下發生的關於小型煉油廠豁免的事情絕對不合法，我們有一個非常有力的案例，真的要等到最終的 RVO 出來，因為能夠就這些主題提起訴訟並能夠起訴他們，我們需要製定最終規則，因為有一種可能性，我沒想到，但他們可能會在最終規則中重新分配加侖。

Again, not expecting that and do anticipate that the lawsuit will be prosecuted with vigor after that point.

再一次，沒有預料到這一點，並且確實預計在那之後訴訟將被大力起訴。

So it is our view that those gallons should be reallocated.

因此，我們認為應該重新分配這些加侖。

It's our view that there is no basis upon which to be granting these small refinery exemptions.

我們認為，授予這些小型煉油廠豁免的依據是沒有依據的。

So at a minimum with the pending E15 that are listed on the EPA website, those should not be granted.

因此，至少對於 EPA 網站上列出的未決 E15，這些不應該被授予。

There is no rationale, and that alone will help improve demand relative to the demand of the past couple of years, where we saw over 2 billion gallons of small refinery exemptions taking away demand.

沒有理由，僅這一點就有助於改善相對於過去幾年的需求，我們看到超過 20 億加侖的小型煉油廠豁免帶走了需求。

And our next question comes from the line of Sameer Joshi of H.C. Wainwright.

我們的下一個問題來自 H.C. 的 Sameer Joshi。溫賴特。

I just want to confirm that within your prepared remarks, did you mention that you are currently operating at 90% capacity?

我只是想確認，在您準備好的評論中，您是否提到您目前正在以 90% 的產能運營？

That is correct.

那是對的。

And given the higher inventory and the fact that summer months are behind us, do you expect these 90% operations for the next -- for this quarter?

考慮到更高的庫存以及夏季已經過去的事實，您是否預計這些 90% 的運營將在下一個季度 - 本季度？

That is our expectation.

這是我們的期望。

We will continue to evaluate that; if anything, we could bring it down some as well.

我們將繼續評估；如果有的話，我們也可以降低一些。

Okay.

好的。

Just following up on one of the previous questions.

只是跟進前面的問題之一。

The third-party sales, are there any other factors apart from cost reductions that are playing into your decision to lower the volume there?

第三方銷售，除了降低成本之外，還有其他因素會影響您決定減少那裡的銷量嗎？

No, we really incumbent these markets.

不，我們確實負責這些市場。

We could have continued to maintain those sales and even grow them, but it was purely an analysis -- financial analysis of where we should best put our resources, whether it would be working capital and where we could maintain profitability in certain markets, certain areas that really we just didn't have much of a strategic value, Arizona, being a good example, trading dollars at best and very competitive market.

我們本可以繼續保持這些銷售額甚至增長它們，但這純粹是一種分析——財務分析我們應該把我們的資源放在哪裡，是否是營運資金，以及我們可以在某些市場、某些領域保持盈利能力的地方真的，我們只是沒有太多的戰略價值，亞利桑那州就是一個很好的例子，充其量只能交易美元，而且市場競爭非常激烈。

Why would we do that.

我們為什麼要這樣做。

So purely a financial analysis and decision to refocus that part of our business the way that we can have sustained profitability.

因此，純粹的財務分析和決定將我們業務的這一部分重新集中在我們能夠持續盈利的方式上。

Okay.

好的。

Most of my other questions have been answered, but just one clarification on the cogeneration at Stockton.

我的大多數其他問題都已得到解答，但僅對斯托克頓的熱電聯產進行了澄清。

Do you expect that to be operational by end of the year or first quarter next year?

你預計它會在今年年底或明年第一季度投入使用嗎？

And then a follow up on that is, when do you expect the full $4 million savings from that?

然後跟進的是，您預計什麼時候可以節省全部 400 萬美元？

We do anticipate it to be fully operational by the end of the year.

我們確實預計它將在今年年底前全面投入運營。

I -- we have had dates that have come and gone, so there is some caution there.

我——我們的約會來來去去，所以有一些謹慎。

But everything looks very good and the issues that were slowing that installation down appear to be behind us.

但是一切看起來都非常好，並且減慢安裝速度的問題似乎已經過去了。

And when the thing starts up, it could be in the first quarter a little bit of up and down as there is some fine tuning, but we would more or less anticipate the full opportunity in savings for the calendar year 2019.

當事情開始時，第一季度可能會有點上下波動，因為會有一些微調，但我們或多或少會預計到 2019 日曆年的全部儲蓄機會。

Just a quick follow up.

只是快速跟進。

So if everything else stays same in terms of costs, do you expect the $9 million quarterly run rate to come down based on these savings as well the Madera solar plant?

因此，如果其他一切在成本方面保持不變，您是否預計 900 萬美元的季度運行率會基於這些節省以及馬德拉太陽能發電廠而下降？

No.

不。

Those wouldn't show up in the SG&A line.

這些不會出現在 SG&A 行中。

That would be in under your operational lines.

那將在您的運營線之下。

Under the operational, okay.

運行下，還好。

Got it.

知道了。

And I'm showing no further questions at this time.

我現在沒有再提出任何問題。

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

我現在想把電話轉回給 Neil Koehler 做閉幕詞。

Thank you, Mark, and thank you all for joining us today, and your continued support of Pacific Ethanol.

謝謝你，馬克，感謝大家今天加入我們，感謝你們對太平洋乙醇公司的持續支持。

We look forward to speaking with you soon.

我們期待很快與您交談。

Have a great day.

祝你有美好的一天。

Ladies and gentlemen, thank you for participating in today's conference.

女士們，先生們，感謝你們參加今天的會議。

This does conclude the program, and you may all disconnect.

這確實結束了程序，你們都可以斷開連接。

Everyone, have a great day.

大家，有一個美好的一天。