Alto Ingredients Inc (ALTO) 2018 Q4 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。

Fourth Quarter and Year-End Financial Results Conference Call.

第四季度和年終財務業績電話會議。

(Operator Instructions) As a reminder, this conference call is being recorded.

（操作員說明）作為提醒，此電話會議正在錄音中。

I would now like to introduce your host for today's conference, Ms. Moriah Shilton, LHA Investor Relations.

我現在想介紹一下今天會議的主持人，LHA 投資者關係部的 Moriah Shilton 女士。

Ma'am, you may begin.

女士，您可以開始了。

Thank you, Joyel, and thank you all for joining us today for the Pacific Ethanol Fourth Quarter and Full Year 2018 Results Conference Call.

謝謝你，喬伊爾，也感謝大家今天加入我們參加太平洋乙醇公司 2018 年第四季度和全年業績電話會議。

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；和首席財務官布賴恩·麥格雷戈。

Neil will begin with a review of business highlights.

尼爾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 details of the company's financial results.

Pacific Ethanol 昨天發布了一份新聞稿，提供了公司財務業績的詳細信息。

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

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.com 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 March 20, the details of which are included in yesterday's earnings press release.

今天電話的重播將持續到 3 月 20 日，詳細信息包含在昨天的收益新聞稿中。

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, March 13.

請注意，本次電話會議中的信息僅適用於今天，3 月 13 日。

And therefore, you're advised that time sensitive information may no longer be accurate at the time of any replay.

因此，建議您在任何重播時，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太平洋乙醇公司向 SEC 提交的文件中先前和不時披露的事件、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 any non-GAAP information later in this call, a reconciling table was included in yesterday's press release.

為了支持公司在本次電話會議稍後對任何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，我很高興介紹總裁兼首席執行官 Neil Koehler。

Neil?

尼爾？

Thanks, Moriah, and thank you, everyone, for joining us today.

謝謝，Moriah，謝謝大家今天加入我們。

At Pacific Ethanol, we are focused on delivering long-term sustainable growth and profitability for our shareholders by being a leading producer and marketer of low carbon renewable fuel and high-value feed and alcohol products.

在 Pacific Ethanol，我們專注於通過成為低碳可再生燃料和高價值飼料和酒精產品的領先生產商和營銷商，為我們的股東提供長期可持續增長和盈利能力。

Through both organic growth and acquisitions, we have established a footprint of 9 plants with an annual capacity of more than 600 million gallons, while diversifying product offerings and expanding nationally.

通過有機增長和收購，我們建立了 9 家工廠，年產能超過 6 億加侖，同時提供多樣化的產品並在全國范圍內擴張。

The ethanol production facilities we originally built in the West and the facilities we subsequently purchased in the Aventine and ICP acquisitions are valuable assets.

我們最初在西方建造的乙醇生產設施以及我們隨後在 Aventine 和 ICP 收購中購買的設施都是寶貴的資產。

We have invested significant resources into these facilities to improve performance, diversify revenue streams, build efficiencies and lower production costs.

我們在這些設施上投入了大量資源，以提高性能、使收入來源多樣化、提高效率並降低生產成本。

There remains additional cost-effective opportunities to continue to improve these facilities and make them some of the most competitive in the world.

還有更多具有成本效益的機會可以繼續改進這些設施，並使它們成為世界上最具競爭力的一些。

This is important, as the biofuels business is growing nationally and internationally, fueled by the need for high octane, low carbon and low-cost transportation fuel.

這一點很重要，因為在對高辛烷值、低碳和低成本運輸燃料的需求推動下，生物燃料業務在國內和國際上都在增長。

While the U.S. has been impacted by a combination of oversupply, regulatory uncertainty, demand destruction through the questionable overuse of small refinery exemptions and international trade disputes, we expect these negative forces to change for the better and return the industry and Pacific Ethanol to a much stronger position.

雖然美國受到供應過剩、監管不確定性、小型煉油廠豁免的可疑過度使用和國際貿易爭端導致需求破壞的綜合影響，但我們預計這些負面力量會變得更好，並使該行業和太平洋乙醇重回正軌。更強的地位。

All this being said, we believe our platform's value is not appropriately reflected in our current enterprise valuation of less than $0.30 per gallon against recently publicly announced asset sales of over $1 per gallon and replacement value in excess of $2 per gallon.

話雖如此，我們認為我們平台的價值並沒有恰當地反映在我們當前低於每加侖 0.30 美元的企業估值中，而最近公開宣布的資產銷售額超過每加侖 1 美元，重置價值超過每加侖 2 美元。

To remedy this, we have initiated a plan to complete over the next 6 months a strategic realignment of our business.

為了解決這個問題，我們啟動了一項計劃，在未來 6 個月內完成我們業務的戰略調整。

Our current focus is on the potential sale of production assets, reduction of our debt levels, strengthening of our cash and liquidity and opportunities for strategic partnerships and capital raising, all positioning the company to optimize our business performance.

我們目前的重點是潛在的生產資產出售、降低我們的債務水平、加強我們的現金和流動性以及戰略合作夥伴關係和融資的機會，所有這些都使公司能夠優化我們的業務績效。

We have great confidence in the strong relationships we have built with our financial and commercial partners, and we believe we are taking the appropriate steps to increase our shareholder value to benefit all our stakeholders long-term and to provide greater financial flexibility to execute future strategic initiatives.

我們對我們與金融和商業合作夥伴建立的牢固關係充滿信心，我們相信我們正在採取適當的措施來增加我們的股東價值，以使我們的所有利益相關者長期受益，並為執行未來的戰略提供更大的財務靈活性倡議。

We have engaged Piper Jaffray to aid us in the potential sale of production assets.

我們已聘請 Piper Jaffray 協助我們進行生產資產的潛在銷售。

Now on to a discussion of the fourth quarter and full year 2018 results.

現在開始討論 2018 年第四季度和全年業績。

We firmly believe the compelling cost, octane and carbon benefits of ethanol will continue to drive both new, domestic and export demands to levels in 2019 beyond the record total output and export volume set in 2018.

我們堅信，乙醇引人注目的成本、辛烷值和碳效益將繼續推動新的、國內和出口需求在 2019 年達到超過 2018 年創紀錄的總產量和出口量的水平。

However, production margins in the fourth quarter sunk to historic lows and current margins, while improving, remain at nonprofitable levels.

然而，第四季度的生產利潤率跌至歷史低點，目前的利潤率雖然有所改善，但仍處於非盈利水平。

This sustained poor margin environment impacted both our fourth quarter and full year 2018 results.

這種持續低迷的利潤率環境影響了我們 2018 年第四季度和全年的業績。

For the fourth quarter, net sales were $334 million from a total of 209 million gallons sold.

第四季度的淨銷售額為 3.34 億美元，總銷量為 2.09 億加侖。

Net loss available to common stockholders was $32.3 million, and adjusted EBITDA was a negative $18 million.

普通股股東可獲得的淨虧損為 3230 萬美元，調整後的 EBITDA 為負 1800 萬美元。

Our results were impacted by a few factors.

我們的結果受到幾個因素的影響。

The loss was primarily driven by a sharper lower average ethanol sales price per gallon during the quarter, compressing production margins.

虧損的主要原因是本季度每加侖乙醇平均銷售價格大幅下降，壓縮了生產利潤率。

For the full year, ethanol prices fell to a 13-year low.

全年，乙醇價格跌至 13 年低點。

The industry's historically high inventory levels also negatively impacted ethanol margins in the fourth quarter.

該行業的歷史高庫存水平也對第四季度的乙醇利潤率產生了負面影響。

In response to high inventory levels and lower margins, in the third quarter, we moderated production in locations most impacted in where we weren't otherwise contractually committed, and we continue this practice into the fourth quarter.

為了應對高庫存水平和較低的利潤率，在第三季度，我們在我們沒有合同承諾的受影響最嚴重的地區減少了生產，並且我們將這種做法持續到第四季度。

As a company, we reduced our production levels and are running at around 85% of operating capacity across the portfolio.

作為一家公司，我們降低了生產水平，並且在整個產品組合中以大約 85% 的運營能力運行。

Turning to the overall ethanol market and gallons sold, 2018 set new records for total output and export volumes.

談到整個乙醇市場和銷售的加侖數，2018 年的總產量和出口量創下了新紀錄。

Ethanol production reached an estimated 16.1 billion gallons in the year, marking the sixth straight year of incremental growth.

今年乙醇產量估計達到 161 億加侖，連續第六年實現增量增長。

Total consumption rose to a record 16.2 billion gallons, 300 million gallons more than a year ago, driven largely by steady domestic sales and record exports of 1.7 billion gallons, as global octane demand continues to grow.

隨著全球辛烷需求的持續增長，總消費量增至創紀錄的 162 億加侖，比一年前增加了 3 億加侖，這主要得益於穩定的國內銷售和創紀錄的 17 億加侖出口。

Brazil and Canada remained top customers for the fourth straight year, accounting for half of all U.S. ethanol exports.

巴西和加拿大連續第四年保持最大客戶地位，占美國乙醇出口總量的一半。

We continue to see new growth opportunities for exports in Asia, the Middle East, Central America and Mexico.

我們繼續在亞洲、中東、中美洲和墨西哥看到新的出口增長機會。

Looking ahead, global demand is strong, with clear opportunities for additional growth.

展望未來，全球需求強勁，有明顯的額外增長機會。

First, the EPA yesterday released the proposed rule for facilitating year round use of E15, reconfirming its commitment to a final rule by June 1 of this year in advance of the summer driving season.

首先，EPA 昨天發布了促進 E15 全年使用的擬議規則，再次確認其在夏季駕駛季節之前在今年 6 月 1 日之前製定最終規則的承諾。

We are confident this will result in incremental demand this summer and will continue to accelerate the introduction of higher blends.

我們相信這將導致今年夏天的需求增加，並將繼續加速引入更高的混合物。

Second, export markets are expected to continue to grow with the resolution of trade disputes with China opening up a large new market for U.S. ethanol as China continues on its path to incorporate 10% ethanol blends into its gasoline supply.

其次，隨著中國繼續在其汽油供應中加入 10% 的乙醇混合物，隨著與中國的貿易爭端的解決為美國乙醇開闢了一個巨大的新市場，預計出口市場將繼續增長。

A 10% blend would require over 4 billion gallons of ethanol annually in China.

在中國，10% 的混合物每年需要超過 40 億加侖的乙醇。

Current domestic production capacity in China is about 1 billion gallons and even with the doubling of domestic production, China represents a very large market opportunity for U.S. ethanol.

中國目前的國內產能約為10億加侖，即使國內產量翻一番，中國對美國乙醇來說也是一個非常大的市場機會。

Before the trade dispute earlier last year, China was on track to be a 200 million to 300 million gallon market for U.S. ethanol in 2018, and instead, was only around 50 million gallons.

在去年早些時候的貿易爭端之前，中國有望在 2018 年成為 2 億至 3 億加侖的美國乙醇市場，而實際上只有 5000 萬加侖左右。

A reasonably quick resolution of the trade dispute with China could add 300 million gallons of new demand for U.S. ethanol in 2019 and an excess of 1 billion gallons in 2020.

與中國的貿易爭端若能迅速解決，2019 年對美國乙醇的新需求將增加 3 億加侖，到 2020 年將超過 10 億加侖。

Third, octane demand globally continues to increase as ethanol is the lowest cost and cleanest burning source of octane in the market.

第三，由於乙醇是市場上成本最低、燃燒最清潔的辛烷來源，全球對辛烷的需求持續增加。

And lastly, a renewed interest in low carbon fuels portends increased demand for renewable fuels here and abroad.

最後，對低碳燃料的重新興趣預示著國內外對可再生燃料的需求增加。

Ethanol has a carbon intensity that is on average 40% lower than gasoline and with new technologies, continues to move lower, which is why ethanol has been the single largest contributor to carbon reductions in low-carbon fuel standards.

乙醇的碳強度平均比汽油低 40%，並且隨著新技術的發展，乙醇的碳強度繼續降低，這就是為什麼乙醇一直是低碳燃料標準中碳減排的最大貢獻者。

The West Coast carbon markets continue to create strong premiums for our lower carbon ethanol.

西海岸碳市場繼續為我們的低碳乙醇創造強勁溢價。

In California, low-carbon fuel standard regulation updates became effective on January 4 of this year.

在加利福尼亞，低碳燃料標準法規更新於今年 1 月 4 日生效。

With this set of amendments, the target is to reduce the carbon intensity in fuels in California by 20% from a 2010 baseline by 2030.

通過這一系列修訂，目標是到 2030 年將加利福尼亞州燃料中的碳強度從 2010 年的基線降低 20%。

The Washington legislature is considering a state Clean Fuels Program bill and if approved, would be the third state with the Clean Fuels Program, joining Oregon and California.

華盛頓立法機關正在考慮一項州清潔燃料計劃法案，如果獲得批准，將成為第三個擁有清潔燃料計劃的州，加入俄勒岡州和加利福尼亞州。

Other states and regions in the United States are now considering similar low-carbon fuel programs.

美國其他州和地區現在正在考慮類似的低碳燃料計劃。

Also, Canada is finalizing a nationwide Clean Fuels Program that will be implemented in 2022.

此外，加拿大正在敲定一項將於 2022 年實施的全國性清潔燃料計劃。

Looking internally, in addition to our strategic realignment plans, our focus today is delivering additional value with our existing assets to capitalize on the positive macro trends by cutting cost in both the operating and corporate level, further diversifying our sales through additional high-protein feed and high-quality alcohol products and implementing new initiatives to continue to lower the carbon scores of our plants that can service valuable low-carbon fuel markets.

從內部看，除了我們的戰略調整計劃外，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進一步多樣化我們的銷售和高質量的酒精產品，並實施新舉措以繼續降低我們工廠的碳分數，這些工廠可以為有價值的低碳燃料市場提供服務。

I'd now like to turn the call over to Bryon for a financial and operational review of our fourth quarter and full year 2018 results.

我現在想把電話轉給布賴恩，對我們的第四季度和 2018 年全年業績進行財務和運營審查。

Bryon?

布賴恩？

Thank you, Neil.

謝謝你，尼爾。

For the fourth quarter 2018 compared to the fourth quarter of 2017, net sales were $334 million compared to $395 million.

2018 年第四季度與 2017 年第四季度相比，淨銷售額為 3.34 億美元，而 3.95 億美元。

The 15% decline in sales is attributable to lower ethanol prices, fewer gallons produced and fewer third-party gallons sold.

銷售額下降 15% 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。

The lower production gallons resulted from our decision to moderate production in response to lower ethanol prices and negative ethanol margins.

較低的生產加侖數是由於我們決定緩和生產以應對較低的乙醇價格和負乙醇利潤。

As noted in previous quarters this year, the reduction in third-party gallons was due to our intentional and successful effort to improve the profitability of that area of our business.

正如今年前幾個季度所指出的，第三方加侖量的減少是由於我們有意並成功地努力提高我們業務領域的盈利能力。

Cost of goods sold was $355 million compared to $397 million in the prior year's quarter, a reflection of lower production and third-party ethanol sales.

商品銷售成本為 3.55 億美元，而去年同期為 3.97 億美元，這反映了產量和第三方乙醇銷售下降。

Gross loss for the quarter totaled $21 million compared to $2 million in the prior year's quarter due to historically low ethanol margins.

由於乙醇利潤率處於歷史低位，本季度總虧損為 2100 萬美元，而去年同期為 200 萬美元。

SG&A expenses were $9.2 million, up from $8.6 million due to higher legal cost and a full year of ICP results.

SG&A 費用為 920 萬美元，高於 860 萬美元，原因是較高的法律成本和全年 ICP 結果。

We expect SG&A for Q1 to total $9 million.

我們預計第一季度的 SG&A 總額為 900 萬美元。

Loss available to common shareholders was $32.3 million or $0.74 per share compared to $13.6 million or $0.32 per share.

普通股股東可獲得的損失為 3230 萬美元或每股 0.74 美元，而每股損失為 1360 萬美元或 0.32 美元。

Adjusted EBITDA was negative $18 million compared to $273,000 in the year ago period.

調整後的 EBITDA 為負 1800 萬美元，而去年同期為 273,000 美元。

For the full year 2018 compared to 2017, net sales were $1.52 billion compared to $1.63 billion.

與 2017 年相比，2018 年全年的淨銷售額分別為 15.2 億美元和 16.3 億美元。

Production gallons sold were 556 million of the total 883 million gallons sold.

售出的生產加侖為 8.83 億加侖中的 5.56 億。

Cost of goods sold was $1.53 billion compared to $1.63 billion.

銷售商品成本為 15.3 億美元，而銷售成本為 16.3 億美元。

Gross loss for 2018 was $15.2 million compared to gross profit of $5.9 million.

2018 年的總虧損為 1520 萬美元，而毛利潤為 590 萬美元。

SG&A expenses were $36.4 million compared to $31.5 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 3640 萬美元，而去年為 3150 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 $61.5 million or $1.42 per share compared to $36.2 million or $0.85 per share.

普通股股東可獲得的損失為 6150 萬美元或每股 1.42 美元，而每股損失為 3620 萬美元或 0.85 美元。

Adjusted EBITDA was negative $5.1 million compared to positive $13.6 million.

調整後的 EBITDA 為負 510 萬美元，而正數為 1360 萬美元。

Turning to our balance sheet.

轉向我們的資產負債表。

For the full year 2018, cash flow from operations was $1.6 million.

2018 年全年，運營現金流為 160 萬美元。

At December 31, 2018, cash and cash equivalents were $26.6 million compared to $49.5 million at December 31, 2017.

截至 2018 年 12 月 31 日，現金和現金等價物為 2660 萬美元，而 2017 年 12 月 31 日為 4950 萬美元。

Much of this decline is attributable to a combination of margin-related losses, mandatory capital expenditures and amortizing debt payments.

這種下降在很大程度上歸因於與利潤率相關的損失、強制性資本支出和攤銷債務支付。

For the fourth quarter of 2018, our capital expenditures totaled $4.3 million, primarily related to plant improvement initiatives, bringing our total capital expenditures for the year to just over $15.1 million.

2018 年第四季度，我們的資本支出總額為 430 萬美元，主要與工廠改進計劃有關，使我們今年的總資本支出略高於 1510 萬美元。

Planned capital expenditures for Q1 currently are expected to total $4 million, solely associated with necessary repair and maintenance of our facilities.

目前預計第一季度的計劃資本支出總額為 400 萬美元，僅與我們設施的必要維修和維護有關。

Looking at our overall capital structure, we have $67 million in debt obligations coming due mid-December.

從我們的整體資本結構來看，我們有 6700 萬美元的債務將於 12 月中旬到期。

As noted previously, we have been actively exploring options to refinance this debt.

如前所述，我們一直在積極探索為這筆債務再融資的選擇。

Given the strong headwinds created by sustained depressed ethanol margins, domestic demand destruction and trade conflicts, we were not able to complete a refinancing prior to year-end.

鑑於乙醇利潤率持續低迷、國內需求破壞和貿易衝突造成的強勁逆風，我們無法在年底前完成再融資。

Accordingly, we are required to record this debt as current.

因此，我們需要將此債務記錄為流動債務。

Undeterred, our refinancing efforts continue.

我們的再融資努力沒有被嚇倒。

In addition, we are required to show the $75 million in term debt secured by our Pekin facility as current as we were out of compliance with our financial covenants and have not yet obtained a waiver from our lenders.

此外，由於我們不遵守我們的財務契約並且尚未從我們的貸方獲得豁免，我們需要證明由我們的 Pekin 融資擔保的 7500 萬美元定期債務是最新的。

To this end, we are working collaboratively and productively with our lenders to address these issues.

為此，我們正在與貸方合作並富有成效地解決這些問題。

We believe successful implementation of our strategic realignment efforts, anticipated improvements in ethanol margins and near-term accommodation from our lenders will generate adequate cash to address short-term liquidity constraints and facilitate the ultimate material reduction in our debt balances and recapitalization of our production facilities.

我們相信，成功實施我們的戰略調整工作、乙醇利潤率的預期改善和我們的貸方的短期住宿將產生足夠的現金來解決短期流動性限制，並促進我們的債務餘額的最終實質性減少和我們生產設施的資本重組.

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。

As I opened the call, we are confident that the compelling cost, octane and carbon benefits of ethanol will drive both new domestic and export demand in 2019.

在我開始電話會議時，我們相信乙醇在成本、辛烷值和碳排放方面的巨大優勢將在 2019 年推動新的國內和出口需求。

We expect both domestic and export demand to achieve new highs in 2019 as a result of increased penetration of E15 and the easing of trade tensions.

由於 E15 的滲透率提高和貿易緊張局勢的緩解，我們預計 2019 年國內和出口需求將再創新高。

With more regulatory certainty, a proper implementation of the RFS and freer international trade, the ethanol industry is poised to tighten the supply and demand balance, returning the industry to its stronger financial position.

隨著監管更加明確、RFS 的正確實施和國際貿易更加自由，乙醇行業有望收緊供需平衡，使該行業恢復到更強勁的財務狀況。

And with our strategic realignment process we are currently undertaking, we are taking necessary steps to best position Pacific Ethanol to benefit.

隨著我們目前正在進行的戰略調整過程，我們正在採取必要的措施，以使太平洋乙醇公司以最佳方式受益。

With that, Joyel, I'd like to open the call for questions.

有了這個，喬伊爾，我想打開提問的電話。

(Operator Instructions) Our first question comes from Eric Stine with Craig-Hallum.

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

Maybe just first a two-part question on the strategic restructuring.

也許首先是關於戰略重組的兩部分問題。

Just maybe more details on what you would need to do with your assets to get them in a spot where they are potentially for sale?

可能只是更多關於您需要如何處理您的資產以將它們放在可能出售的地方的詳細信息？

And then secondly, you talked about further operational initiatives, are those above and beyond what you've got underway today?

其次，您談到了進一步的運營計劃，這些計劃是否超出了您今天正在進行的計劃？

And potentially, what type of CapEx would that require?

並且可能需要什麼類型的資本支出？

On the first part of the question, all of our plants are operating and operating very efficiently other than the one plant, Aurora East, in Nebraska that is currently idled.

關於問題的第一部分，除了目前處於閒置狀態的內布拉斯加州 Aurora East 工廠之外，我們所有的工廠都在非常高效地運營和運營。

So to that extent, they're all ready for whatever disposition.

所以在那個程度上，他們都準備好接受任何處置。

At this point, we're running them and running them well and benefiting from some improved market conditions.

在這一點上，我們正在運行它們並且運行良好，並從一些改善的市場條件中受益。

As I said on the prepared remarks, we have hired Piper Jaffray to look at the potential disposition of some assets.

正如我在準備好的評論中所說，我們已經聘請 Piper Jaffray 來研究一些資產的潛在處置方式。

And that's prospective, so we'll just have to see how that plays out.

這是前瞻性的，所以我們只需要看看結果如何。

But we think that, that could be an important part of our realignment.

但我們認為，這可能是我們調整的重要組成部分。

In terms of initiatives, we talked about the ones that are in play.

在倡議方面，我們談到了正在發揮作用的倡議。

We do have any number of other ones as markets improve and whether it's adding to our solar, whether it's putting in new technologies to significantly reduce natural gas at our facilities that serve the low-carbon markets and that will depend upon capital and market conditions.

隨著市場的改善，我們確實有很多其他的，無論它是否增加了我們的太陽能，是否採用新技術來顯著減少我們為低碳市場服務的設施中的天然氣，這將取決於資本和市場條件。

But you're aware of the ones that are underway and are being finished up.

但是你知道那些正在進行和正在完成的事情。

Yes.

是的。

Okay, good.

好的。

Maybe just more of an industry question.

也許只是一個行業問題。

I know you mentioned 85% of capacity and I'm definitely hearing from others in the industry, cutting back on that as well, but production has still remained stubbornly high.

我知道你提到了 85% 的產能，我肯定從業內其他人那裡聽到，也減少了這一點，但產量仍然居高不下。

And so just curious, what you're seeing now?

所以只是好奇，你現在看到了什麼？

And do you think as we get into summer driving season that people have the -- that are thoughtful about that and keeping production where it needs to be?

你認為當我們進入夏季駕駛季節時，人們是否會考慮到這一點並將生產保持在需要的地方？

Or do you expect that to come back?

還是您希望它會回來？

Well, I -- there has certainly been enough pain and suffering in the industry where it has forced people to take a more sober look at that and to reduce rates.

好吧，我——這個行業肯定有足夠的痛苦和苦難，它迫使人們更加清醒地看待這一點並降低利率。

And you're right, they -- inventories have remained high.

你是對的，他們——庫存一直很高。

Production rates have been higher than they should be, but I would also point out that quite a bit below capacity.

生產率一直高於應有的水平，但我還要指出，這遠遠低於產能。

I mean, this industry can produce at or even above 17 billion gallon rate per year and there rightfully should be a great market for that and more, but today it's not quite at those rates.

我的意思是，這個行業每年的產量可以達到甚至超過 170 億加侖，理所當然地應該有一個很好的市場，甚至更多，但今天還沒有達到這樣的速度。

Encouraging over the last couple weeks, we have seen production come on.

令人鼓舞的是，在過去的幾周里，我們看到生產開始了。

Numbers that came out this morning had us running at a production rate of 15.4 billion gallons annualized.

今天早上公佈的數據讓我們的年產量達到 154 億加侖。

So that's quite a bit less than full capacity.

所以這比滿容量要少很多。

Inventories were down over 2% and demand was up.

庫存下降超過 2%，需求上升。

So we -- if you look at that annualized, we're in balance to actually with the exports and domestic demand producing a bit less than the market is calling for, which is why the inventories came down.

所以我們——如果你看一下年化數據，我們實際上與出口和國內需求的產量比市場要求的要少一些，這就是庫存下降的原因。

So the trend is good, and we always see it this time of the year.

所以趨勢是好的，每年的這個時候我們總能看到它。

And I think there's a little more discipline, again, given the very difficult financial environment the industry has found itself in to try to keep some balance there that will continue to see margins improve.

而且我認為，鑑於該行業已經發現自己處於非常困難的金融環境，試圖保持一些平衡，這將繼續看到利潤率的提高，我認為還有更多的紀律。

Yes.

是的。

Okay.

好的。

And maybe last question from me.

也許是我的最後一個問題。

Just as we think about early 2019 in basis, weather in the Midwest has been pretty severe.

正如我們在基礎上考慮 2019 年初一樣，中西部的天氣非常惡劣。

Just curious if that has caused any issues with basis, I guess, particularly in the first quarter?

只是好奇這是否導致了基礎問題，我猜，尤其是在第一季度？

Yes.

是的。

On corn basis and ethanol basis, we've seen increases in both.

在玉米和乙醇的基礎上，我們都看到了兩者的增長。

Unfortunately, the increase in corn basis that we've seen on a short-term basis has been greater on a per gallon basis than the improvement in the Chicago to L.A. ethanol spread.

不幸的是，我們在短期內看到的每加侖玉米基差的增長大於芝加哥與洛杉磯乙醇價差的改善。

So that has pinched the -- in the first quarter the West Coast plants to some degree.

因此，第一季度西海岸工廠在一定程度上受到了影響。

We are seeing that basis come back down to normal.

我們看到這一基礎恢復正常。

So it was a temporary impact.

所以這是暫時的影響。

And with demand continuing to improve domestically and globally for ethanol, we're encouraged to see the strong West Coast basis and would hope that, that would continue and then on top of that, we have a very strong carbon premium because those markets continue to be very, very robust.

隨著國內和全球對乙醇的需求持續改善，我們很高興看到強勁的西海岸基礎，並希望這種情況會繼續下去，除此之外，我們有非常強勁的碳溢價，因為這些市場繼續非常非常健壯。

(Operator Instructions) Our next question comes from Sameer Joshi with H.C. Wainwright.

（操作員說明）我們的下一個問題來自與 H.C. 的 Sameer Joshi。溫賴特。

The question is related to the positive news on the E15 front and also on the trade front juxtapositioned with your decision to divest some of your assets.

這個問題與 E15 方面的積極消息有關，也與您決定剝離部分資產的貿易方面有關。

If there is a positive outlook, what is it that is prompting your sale now?

如果前景看好，是什麼促使您現在出售？

I kind of missed the last part of the question.

我有點錯過了問題的最後一部分。

Given that your outlook is good for -- based on E15 and based on trade dispute settlements, what justifies the shutting down or selling the plants?

鑑於您的前景良好——基於 E15 和貿易爭端解決，關閉或出售工廠的理由是什麼？

Right.

正確的。

Well, the Aurora East was shut down because its economics were marginal at the time, and it was part of our efforts to do our part to reduce overall production rates.

好吧，Aurora East 被關閉了，因為當時它的經濟狀況很差，這是我們努力降低整體生產率的一部分。

That plant can be turned on anytime, and we continue to evaluate that.

該工廠可以隨時打開，我們將繼續對其進行評估。

But for the last part, Eric's question, it's important that we take this one step at a time as an industry and don't dial up production rates to where, suddenly, we're right back in the soup.

但對於最後一部分，埃里克的問題，重要的是我們作為一個行業一次邁出這一步，不要將生產率提高到突然之間，我們又回到湯裡的地方。

As it relates to the potential sale of assets, I mean, that's really looking at our own balance sheet.

因為它與潛在的資產出售有關，我的意思是，這真的是在看我們自己的資產負債表。

This will continue to be a commodity business, very volatile one at that.

這將繼續是一項商品業務，非常不穩定。

And while we are encouraged by improving conditions, we think it is prudent to address debt issues with the company.

雖然我們對改善條件感到鼓舞，但我們認為與公司解決債務問題是謹慎的。

We do have gap that is maturing in December, working through our issues with our lenders in Illinois as well.

我們確實有差距在 12 月到期，我們也在與伊利諾伊州的貸方解決我們的問題。

And that is part of addressing our specific balance sheet issues in a very proactive, prudent way, so that we can be even in a stronger position to benefit from the improving market conditions.

這是以非常積極、謹慎的方式解決我們特定的資產負債表問題的一部分，這樣我們就可以更有力地從不斷改善的市場條件中受益。

Okay.

好的。

On the SG&A front, you mentioned one of the things you're doing is raising costs at both the corporate and the plant level -- operations level.

在 SG&A 方面，您提到您正在做的一件事是提高公司和工廠級別的成本——運營級別。

What -- have any of these changes been implemented and do they reflect in the 4Q numbers?

什麼——這些變化是否已經實施，它們是否反映在第四季度的數字中？

They do not.

他們不。

I mean, we've been continuing to run as efficiently as possible, but with some legal issues that we've been working through, they were elevated in Q4.

我的意思是，我們一直在繼續盡可能高效地運行，但由於我們一直在解決一些法律問題，它們在第四季度得到了提升。

That is declining, so that will be an improvement.

那是下降，所以這將是一個進步。

We've had vacancies, both at the corporate level and even at the overhead levels at the plants that we have not been filling.

我們在公司層面甚至在我們尚未填補的工廠的間接費用層面都有空缺。

So it is a -- it's a gradual trend, and we're continuing to work very hard on that.

所以這是一個 - 這是一個漸進的趨勢，我們正在繼續努力工作。

We feel that our SG&A rates are -- on a enterprise basis are pretty efficient to begin with, but we're working to bring them even lower.

我們認為我們的 SG&A 費率——在企業基礎上一開始就非常有效，但我們正在努力將它們降低到更低。

Okay.

好的。

One last one from me.

我的最後一個。

If you would invest in lower carbon technologies and cellulose like technologies and solar and other investments, would that help -- or does that help with your exports if China opens up?

如果您投資低碳技術和纖維素類技術以及太陽能和其他投資，這會有所幫助嗎？或者如果中國開放，這對您的出口有幫助嗎？

The China situation is just a overall supply and demand globally, given that this is a global market.

鑑於這是一個全球市場，中國的情況只是全球的整體供求關係。

And all boats will be benefited from that rising tide.

所有的船隻都將從這股漲潮中受益。

As it relates to our low-carbon technologies, that strategy always about selling our ethanols close to those markets and as close to those plants that are located in those markets as possible.

由於它與我們的低碳技術有關，因此該戰略始終是在靠近這些市場並儘可能靠近位於這些市場的工廠附近銷售我們的乙醇。

So it would always be a higher value to sell with that very significant premium on carbon into those markets than export.

因此，以非常顯著的碳溢價出售到這些市場總是比出口具有更高的價值。

That being said, we do have our production in Nebraska that spreads very well to the Gulf and will be and has been part of supply in international markets.

話雖如此，我們在內布拉斯加州的生產確實很好地傳播到了海灣地區，並將成為並且一直是國際市場供應的一部分。

This concludes our question-and-answer session.

我們的問答環節到此結束。

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

我現在想將電話轉回給 Neil Koehler 以發表任何結束語。

Thank you all for joining us today.

感謝大家今天加入我們。

Appreciate your support of the company.

感謝您對公司的支持。

We're encouraged by the trends in the market and the initiatives that we're taking as a company.

我們對市場趨勢和我們作為一家公司所採取的舉措感到鼓舞。

And we look forward to speaking to 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 today's program, and you may all disconnect.

今天的節目到此結束，你們可能都斷線了。

Everyone, have a wonderful day.

大家，有一個美好的一天。