Alto Ingredients Inc (ALTO) 2021 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Alto Ingredients, Inc. First Quarter 2021 Financial Results. (Operator Instructions) I would now like to hand the conference over to your speaker today, Moriah Shilton. Please go ahead.

女士們，先生們，感謝您的支持，歡迎來到 Alto Ingredients, Inc. 2021 年第一季度財務業績。 （操作員說明）我現在想將會議交給您今天的演講者，Moriah Shilton。請繼續。

Thank you, Elaine, and thank you all for joining us today for the Alto Ingredients first quarter 2021 results conference call.

謝謝你，伊萊恩，感謝大家今天加入我們參加 Alto Ingredients 2021 年第一季度業績電話會議。

On the call today are Mike Kandris, CEO; and Bryon McGregor, CFO. Mike will begin with a review of business highlights. Bryon will provide a summary of the financial and operational results, and then Mike will return to discuss Alto Ingredients outlook and open the call for questions.

今天的電話會議是首席執行官 Mike Kandris；和首席財務官布賴恩·麥格雷戈。 Mike 將從回顧業務亮點開始。 Bryon 將提供財務和運營結果的摘要，然後 Mike 將返回討論 Alto Ingredients 的前景並開始提問。

Alto Ingredients issued a press release after the market closed today, providing details of the company's quarterly results. The company also prepared a presentation for today's call that is available on the company's website at altoingredients.com. A telephone replay of today's call will be available through May 19. The details of which are included in today's earnings press release. A webcast replay will also be available at Alto Ingredients' website.

Alto Ingredients 在今天收盤後發布了一份新聞稿，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 altoingredients.com 上找到。今天電話會議的電話重播將持續到 5 月 19 日。詳細信息包含在今天的收益新聞稿中。 Alto Ingredients 的網站也將提供網絡直播重播。

Please note that the information in this call speaks only as of today, May 12. You are advised that time-sensitive information may no longer be accurate at the time of any replay. Please refer to the company's safe harbor statement on Slide 2 of the presentation available online, which states that some of the comments in this presentation constitute forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of Alto Ingredients could differ materially from those statements. 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 Alto Ingredients' filings with the SEC. Except as required by applicable law, the company assumes no obligation to update any forward-looking statements.

請注意，本次電話會議中的信息僅在今天 5 月 12 日發布。請注意，在任何重播時，時間敏感信息可能不再準確。請參閱公司在網上提供的幻燈片 2 上的安全港聲明，該聲明指出，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。 Alto Ingredients 的實際未來結果可能與這些陳述存在重大差異。可能導致或促成此類差異的因素包括但不限於先前和不時在 Alto Ingredients 向 SEC 提交的文件中披露的事件、風險和其他因素。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. 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. The company defines adjusted EBITDA as unaudited net income or loss attributed to Alto Ingredients before interest expense, or provision or benefit for income taxes, asset impairments, loss on extinguishment of debt, purchase accounting adjustments, fair value adjustments and depreciation and amortization expense.

在管理層準備好的評論中，將引用非公認會計原則措施。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。該公司將調整後的 EBITDA 定義為在利息費用或所得稅、資產減值、債務清償損失、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 Alto Ingredients 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 today'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，今天的新聞稿中包含了一個核對錶。

It is now my pleasure to introduce Mike Kandris, CEO. Mike?

現在我很高興介紹首席執行官 Mike Kandris。麥克風？

Thank you, Moriah. And thank you, everyone, for joining us today. We had a solid first quarter to start the year as we sold 19 million gallons of specialty alcohol through a combination of contracted volumes, spot sales and exports. It also was our fourth consecutive quarter of gross profit and positive adjusted EBITDA, reflecting the benefits of focusing on our strengths, selling specialty alcohols and essential ingredients. This is a more sustainable and profitable business model than fuel grade ethanol alone.

謝謝你，莫里亞。感謝大家今天加入我們。我們在今年第一季度表現穩健，通過合同量、現貨銷售和出口相結合，我們售出了 1900 萬加侖特種酒精。這也是我們連續第四個季度的毛利潤和調整後的 EBITDA 為正，反映了專注於我們的優勢、銷售特種酒精和基本成分的好處。這是一種比單獨的燃料級乙醇更可持續和更有利可圖的商業模式。

We generated net income of $4.4 million and adjusted EBITDA of $13.6 million. These results represent an approximate $30 million improvement in net income year-over-year, a further testament to the benefit of our transformation efforts. We remain on track for our specialty alcohol contracted sales to contribute a minimum $60 million in gross profit for 2021, and we remain optimistic for adding additional contracted specialty alcohol volumes in 2022 and beyond, thereby improving utilization over time from our expanded production capacity and enhanced certifications.

我們產生了 440 萬美元的淨收入和 1360 萬美元的調整後 EBITDA。這些結果表明淨收入同比增加了大約 3000 萬美元，進一步證明了我們轉型努力的好處。我們的特種酒精合同銷售仍有望在 2021 年貢獻至少 6,000 萬美元的毛利潤，我們仍對在 2022 年及以後增加額外的特種酒精合同量持樂觀態度，從而隨著時間的推移通過擴大產能和增強認證。

As we announced on April 28, we have signed a definitive agreement with Seaboard Energy, California to sell our fuel grade ethanol production facility in Madera for a total consideration of $28.3 million. We expect the sale of this 40 million gallon per year facility to close in the second quarter of 2021, and most of the cash proceeds will be used to retire company debt. This will save approximately $700,000 per quarter in interest expense and an additional $400,000 per quarter in negative EBITDA carrying cost for this idle facility.

正如我們在 4 月 28 日宣布的那樣，我們已與加利福尼亞州 Seaboard Energy 簽署最終協議，以總對價 2830 萬美元出售我們在馬德拉的燃料級乙醇生產設施。我們預計這個每年 4000 萬加侖的設施的出售將在 2021 年第二季度完成，大部分現金收益將用於償還公司債務。這將為該閒置設施每季度節省約 700,000 美元的利息費用和 400,000 美元的負 EBITDA 持有成本。

We are on track on our $18 million in announced capital improvement projects in 2021 that are expected to expand revenue, and increase efficiencies and plant reliability. One example is a project underway that will increase the annual production capacity of our yeast facility by approximately 15%. And another example is a project to upgrade the feed dryers at our Pekin facility to produce even higher value feed in addition to improving overall plant efficiency and reliability.

我們在 2021 年宣布的 1800 萬美元的資本改進項目有望擴大收入，並提高效率和工廠可靠性。一個例子是正在進行的一個項目，該項目將使我們酵母設施的年生產能力提高約 15%。另一個例子是我們在北京工廠升級飼料乾燥機的項目，以生產更高價值的飼料，同時提高整體工廠效率和可靠性。

These 2 projects alone are scheduled to be completed and fully operational on or before the end of Q3 and are expected to contribute approximately $5 million annually in EBITDA, a payback in less than 2 years.

僅這兩個項目就計劃在第三季度末或之前完成並全面投入運營，預計每年將貢獻約 500 萬美元的 EBITDA，不到 2 年即可收回投資。

Turning to a topic that is top of mind for many of our investors. The role carbon capture and sequestration can have on the decarbonization of our environment. As we discussed on our last call, Alto will be an active player in the carbon capture space as our Pekin campus sits on top, the Mount Simon Sandstone formation, considered to be one of the most significant potential carbon storage resources in the United States. We are actively engaged in discussions to develop a carbon capture and sequestration program at the Pekin site, which generates over 600,000 tons of CO2 annually. We look forward to sharing more information over the next few quarters regarding this uniquely profitable opportunity for the company.

轉向我們許多投資者最關心的話題。碳捕獲和封存對環境脫碳的作用。正如我們在上次電話會議中所討論的那樣，Alto 將成為碳捕獲領域的積極參與者，因為我們的北京校區位於西蒙山砂岩地層之上，被認為是美國最重要的潛在碳儲存資源之一。我們正在積極討論在北京場地開發碳捕獲和封存計劃，該計劃每年產生超過 600,000 噸二氧化碳。我們期待在接下來的幾個季度分享更多關於公司這一獨特盈利機會的信息。

Finally, worth noting, among many other projects under development, it is our plan to expand protein production at our dry mill facilities. Representing 250 million gallons of annual alcohol production. While it is too early to provide specific details, we believe the economics are compelling. We will provide greater details on these projects over the coming months once contractual arrangements are finalized.

最後，值得注意的是，在許多其他正在開發的項目中，我們計劃擴大干磨設施的蛋白質生產。代表每年 2.5 億加侖的酒精產量。雖然現在提供具體細節還為時過早，但我們相信經濟學是令人信服的。一旦合同安排最終確定，我們將在未來幾個月內提供有關這些項目的更多詳細信息。

With that, I'd now like to turn the call over to Bryon for a discussion of our financials. Bryon?

有了這個，我現在想把電話轉給布賴恩討論我們的財務狀況。布賴恩？

Thank you, Mike. I'll discuss a few financial highlights and metrics for the first quarter 2021 and provide an update on our expectations on certain metrics for the year.

謝謝你，邁克。我將討論 2021 年第一季度的一些財務亮點和指標，並更新我們對今年某些指標的預期。

For the first quarter of 2021, net sales were $219 million compared to $169 million in the fourth quarter due to increased gallons sold and increased sales price per gallon. This is also attributable to having a full quarter of production at our Pekin dry mill, with the price per gallon sold, up 13% compared to last quarter, in line with rising commodity prices.

2021 年第一季度的淨銷售額為 2.19 億美元，而第四季度的淨銷售額為 1.69 億美元，原因是銷量增加和每加侖銷售價格上漲。這也歸功於我們的北京乾磨廠整整一個季度的生產，每加侖售價比上一季度上漲 13%，與商品價格上漲一致。

We sold 58 million production gallons in the first quarter, of which 19 million gallons were specialty alcohols, up 3 million gallons sequentially over last quarter's results.

我們在第一季度銷售了 5800 萬加侖生產量，其中 1900 萬加侖是特種酒精，比上一季度的結果增加了 300 萬加侖。

Gross profit was $13.8 million, relatively flat compared to the $13.6 million last quarter. The improvement in sales of specialty alcohols was in part negatively impacted by the seasonally poor fuel grade ethanol crush margin early in the first quarter and the extreme weather conditions adversely impacting natural gas prices.

毛利潤為 1380 萬美元，與上一季度的 1360 萬美元相比持平。特種酒精銷售的改善部分受到第一季度初季節性較差的燃料級乙醇壓榨利潤率的負面影響，以及對天然氣價格產生不利影響的極端天氣條件。

As noted on our prior earnings call, we have seen improvement in fuel ethanol margins as industry inventories have declined and fuel demand has increased, and our dry mills are operating at positive margins. As a reminder, the $60 million in gross profit contribution from the sale of specialty alcohols, Mike referred to earlier, is based in part on the 70 million gallons that were contracted in the fall of 2020. These gallons were contracted for the entire calendar year of 2021 at fixed volumes and prices.

正如我們之前的財報電話會議所指出的，隨著行業庫存下降和燃料需求增加，我們看到燃料乙醇利潤率有所改善，而且我們的干磨廠正以正利潤率運營。提醒一下，邁克前面提到的特種酒精銷售帶來的 6000 萬美元毛利潤貢獻部分基於 2020 年秋季簽訂的 7000 萬加侖的合同。這些加侖是在整個日曆年簽訂的2021 年的固定數量和價格。

Concurrently, we hedged the major input costs like corn at the then prevailing market prices to preserve the associated margins and minimize the impact of future commodity price volatility. Similarly, as we negotiate new fixed-price contracts, the terms will reflect concurrent market conditions and commodity prices that we will hedge at the time of signing.

同時，我們以當時的市場價格對沖玉米等主要投入成本，以保持相關利潤率，並將未來商品價格波動的影響降至最低。同樣，當我們協商新的固定價格合同時，條款將反映我們將在簽署時對沖的同時市場條件和商品價格。

SG&A expenses in the quarter was $7 million, generally in line with last quarter but slightly inflated due to normal seasonally high expenses. We remain on track with our guidance of $20 million to $25 million for the full year of 2021.

本季度的 SG&A 費用為 700 萬美元，與上一季度基本持平，但由於正常的季節性高費用而略有膨脹。我們將繼續按照 2021 年全年 2000 萬至 2500 萬美元的指導進行。

Our initial -- excuse me, our interest expense in the first quarter was $1.9 million, 50% lower than the $3.8 million we paid in the fourth quarter of 2020 and a 64% reduction from the same quarter last year as we continue to pay down high interest rate debt. In the first quarter, we repaid $5.5 million in principal on our senior notes and $3 million on our CoBank credit facilities. In the past 12 months, we have paid off $120 million of high interest debt, successfully removing 72% of the total debt we had entered -- we had, entering that time period. We are on track to be net debt-free in 2021.

我們最初的 - 對不起，我們第一季度的利息支出為 190 萬美元，比我們在 2020 年第四季度支付的 380 萬美元低 50%，比去年同期減少 64%，因為我們繼續償還高利率債務。在第一季度，我們償還了 550 萬美元的優先票據本金和 300 萬美元的 CoBank 信貸額度。在過去的 12 個月中，我們已經償還了 1.2 億美元的高息債務，成功消除了我們進入那個時期的總債務的 72%。我們有望在 2021 年實現淨負債。

Income available to common shareholders was $4.4 million or $0.06 per diluted share compared to a loss of $20.5 million or $0.30 per share in the fourth quarter. The fourth and first quarters included impairment charges of $24.4 million and $1.2 million, respectively, associated with our western assets and their transition to assets held for sale on the balance sheet.

普通股股東可獲得的收入為 440 萬美元或攤薄後每股 0.06 美元，而第四季度虧損 2050 萬美元或每股 0.30 美元。第四季度和第一季度分別包括 2440 萬美元和 120 萬美元的減值費用，這與我們的西部資產及其向資產負債表上持有待售資產的過渡有關。

Turning to our balance sheet. On March 31, 2021, our cash and cash equivalents were $44.1 million compared to $47.7 million December 31, 2020. After quarter end, we announced the pending sale of our Madera plant for a total consideration of $28.3 million, comprised of $19.5 million in cash and $8.8 million in assumption of liabilities. Upon closing the sale, we anticipate reducing our debt outstanding by approximately $18.5 million, bringing our remaining term and plan debt loan balances to under $30 million. Proceeds from future asset sales will be used to further retire debt, bolster liquidity and fund needed capital projects.

轉向我們的資產負債表。 2021 年 3 月 31 日，我們的現金和現金等價物為 4410 萬美元，而 2020 年 12 月 31 日為 4770 萬美元。季度末後，我們宣布以 2830 萬美元的總對價出售我們的馬德拉工廠，其中包括 1950 萬美元的現金880 萬美元的負債承擔。完成出售後，我們預計將減少約 1850 萬美元的未償債務，使我們的剩餘期限和計劃債務貸款餘額低於 3000 萬美元。未來資產出售的收益將用於進一步償還債務、增強流動性和為所需的資本項目提供資金。

In summary, we are building a balance sheet to support not only current liquidity needs through various commodity cycles, but also to address future capital improvement and growth opportunity funding needs.

總之，我們正在建立一個資產負債表，不僅支持當前各種商品週期的流動性需求，而且還解決未來資本改善和增長機會的資金需求。

Mike, back to you.

邁克，回到你身邊。

Thank you, Bryon. Over the past 12 months, we have improved operations, optimized our production footprint and reduced controllable expenses and our overall cost of capital, thus building a strong platform for the future. This platform provides us the ability to aggressively pursue opportunities; organically, to reinvest in quality, proven, high-value projects; as well as, pursue accretive, strategic M&A opportunities.

謝謝你，布賴恩。在過去的 12 個月裡，我們改善了運營，優化了生產足跡，降低了可控費用和整體資本成本，從而為未來構建了強大的平台。這個平台為我們提供了積極尋求機會的能力；有機地，再投資於優質、成熟、高價值的項目；以及追求增值的戰略併購機會。

We are grateful to all our employees for the efforts they have undertaken to put us in a position of strength as we look to the future.

我們感謝所有員工為使我們在展望未來時處於優勢地位所做的努力。

With this, operator, I'd like to open the lines for questions.

有了這個，接線員，我想打開問題的線路。

(Operator Instructions) And your first question comes from Eric Stine from Craig-Hallum.

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

It's Aaron Spychalla on for Eric. Maybe first, I know you said you're on track contracting the remaining 50% of the specialty alcohol. But can you just give a little more detail on kind of the progress there, and if you're seeing any pricing pressures? And then maybe also talk a little bit about the 2 recent certifications and whether that's kind of spot or contract and just the outlook for international sales as well?

是埃里克的亞倫·斯皮查拉。也許首先，我知道你說過你正在承包剩下的 50% 的特種酒。但是，您能否詳細介紹一下那裡的進展情況，以及您是否看到任何定價壓力？然後也許還談一談最近的兩項認證，以及那是現貨還是合同，以及國際銷售前景？

Sure, Aaron. It's Bryon. I'll take the first part and let Mike handle the second part. We remain on track in selling those gallons, but it's important to note as well that we view this as a long play, right? While we would love to, and we certainly are working diligently to be able to sell all 140 million gallons; particularly, in the 2020 contract for that billed gallons in 2022 and beyond; it would be, I think, an aggressive assumption on most people's part to assume that we could place all of that product immediately, but that we expect with the certifications that Mike will speak more about, to be able to do so effectively, over the coming years. Particularly, as you look at just the onboarding and the diligent processes that our customers go through in order to be able to buy the product.

當然，亞倫。是布賴恩。我將承擔第一部分，讓邁克處理第二部分。我們仍然在銷售這些加侖，但同樣重要的是要注意，我們認為這是一場漫長的比賽，對吧？雖然我們很樂意，而且我們當然正在努力工作，以便能夠銷售所有 1.4 億加侖；特別是在 2022 年及以後的 2020 年合同中，該計費加侖；我認為，對於大多數人來說，假設我們可以立即放置所有這些產品，這將是一個激進的假設，但我們期望邁克將更多地談論認證，以便能夠有效地做到這一點，超過未來幾年。特別是，當您看到我們的客戶為了能夠購買產品而經歷的入職和勤奮的過程時。

With regard to certifications, Mike, do you want to…

關於認證，邁克，你想……

Yes. So as you mentioned, Aaron, we have announced that we have gained additional certifications. I think the key here is that during the process of (inaudible) and it kind of goes back to what the first part of your question was, how do you get yourself in a position to be in -- be set up going into 2022 and beyond.

是的。正如你提到的，Aaron，我們已經宣布我們已經獲得了額外的認證。我認為這裡的關鍵是，在（聽不清）的過程中，它有點回到你問題的第一部分，你如何讓自己處於一個位置——進入 2022 年和超過。

And one of the things that we saw early on was getting the certifications, getting qualified with customers and starting the conversations with customers early, is incredibly important. And we're working very hard at that as we go through the year, even though the contracting cycle typically is in Q4, there's a lot of work that gets done ahead of time. We've been very fortunate and a lot of our very good customers have worked with us and have guided us through what is important for them and what we need to do to increase our business with them.

我們早期看到的一件事是獲得認證、獲得客戶資格並儘早開始與客戶對話，這非常重要。在這一年中，我們正在為此努力工作，即使合同周期通常在第四季度，但仍有很多工作需要提前完成。我們非常幸運，我們的許多非常好的客戶都與我們合作，並指導我們了解對他們來說重要的事情以及我們需要做些什麼來增加與他們的業務。

So again, it's a process, as Bryon said, certifications are extremely important and not only domestically but internationally. And that's where our focus is right now.

因此，正如布賴恩所說，這是一個過程，認證非常重要，不僅在國內，而且在國際上。這就是我們現在的重點所在。

Second, on corn and kind of just basis there, given recent developments. I know you talked a little bit about the hedging on the alcohol portion, but just on the fuel grade. Can you just talk a little bit about that, kind of what you're seeing, maybe kind of 2Q, near-term thoughts on just corn and any hedges and just basis as well?

其次，鑑於最近的事態發展，在玉米和某種公正的基礎上。我知道你談到了一些關於酒精部分的對沖，但只是關於燃料等級。你能談談這個，你所看到的，也許是第二季度，對玉米和任何對沖以及基差的近期想法？

Sure. So I think it's important to remember that while there are opportunities at times to be able to lock in spreads even on the fuel business. And we will take advantage of those opportunities as they present themselves. But generally speaking, what we have found historically is, is that where you're pricing your product on an index basis, that it is highly speculative and usually, not at your most profitable place to be locking in your spreads on that product because of the inverted nature of ethanol prices and the carry that's in corn. This year, it's kind of backwards, right? Where, Aaron, you've got an inversion in both corn and ethanol. So there are at times windows of opportunity to be able to lock in 1 or 10 months out, and that's all positive. But I would generally say that it is our intent for the product that we sell on index to be in the nearby. And so you're not pricing corn until you effectively are grinding it and selling it.

當然。因此，我認為重要的是要記住，儘管有時甚至有機會鎖定燃料業務的價差。我們將在這些機會出現時利用它們。但一般來說，我們在歷史上發現的是，在您根據指數為產品定價的情況下，這是高度投機的，而且通常不是在您最有利可圖的地方鎖定該產品的價差，因為乙醇價格的倒掛和玉米的利差。今年，有點倒退，對吧？亞倫，你在哪裡得到了玉米和乙醇的反轉。因此，有時會有機會鎖定 1 或 10 個月，這都是積極的。但我通常會說，我們在索引上銷售的產品在附近是我們的意圖。因此，在您有效地研磨並出售玉米之前，您不會對玉米定價。

And then maybe last on carbon capture. We'll stay tuned for details on Pekin. But just curious, your thoughts on kind of Stockton and the developments in that market as well. Is there -- any color you can provide there on potential carbon capture would be helpful.

然後可能會持續到碳捕獲。我們將繼續關注北京的詳細信息。但只是好奇，你對斯托克頓的看法以及該市場的發展。有沒有 - 你可以在那裡提供關於潛在碳捕獲的任何顏色都會有所幫助。

Yes. Well, we have publicly announced that we're pursuing a potential sale of the Stockton facility. And again, you have to pick your spots. And that is our goal right now is to sell that facility and take the resources to further pay down debt and use those proceeds to pursue other opportunities.

是的。好吧，我們已經公開宣布我們正在尋求出售斯托克頓工廠的可能性。再一次，你必須選擇你的位置。這就是我們現在的目標是出售該設施並利用資源進一步償還債務並將這些收益用於尋求其他機會。

Pekin is such a fantastic carbon capture story, and we're getting a lot of interest there, and we're just trying to sort through what is the best opportunity for us going forward. And again, like we mentioned, we'll definitely keep everybody up to speed as we go through that process. But right now our focus primarily on carbon capture is at Pekin. And again, we are pursuing a sale of the Stockton facility.

北京是一個非常棒的碳捕獲故事，我們對那裡產生了很大的興趣，我們只是想弄清楚什麼是我們前進的最佳機會。再說一次，就像我們提到的那樣，我們一定會讓每個人都跟上我們完成這個過程的速度。但現在我們主要關注碳捕獲是在北京。再一次，我們正在尋求出售斯托克頓工廠。

And you have a question from Amit Dayal from H.C. Wainwright.

你有一個來自 H.C. 的 Amit Dayal 的問題。溫賴特。

For the carbon capture opportunity, is there any specific technology that we need to sort of develop? Just trying to get a sense of like what will go into executing against building out this business segment?

對於碳捕獲機會，我們是否需要開發任何特定的技術？只是想了解建立這個業務部門將採取什麼措施？

I don't know, I mean, that there's any specific new fangled technology that needs to be used. I mean this is a technology that's used for years and years in enhanced oil recovery and the like. I think that -- but what it does require is clearly a significant capital -- requirement to be able to not only begin with test wells and develop your -- the resource, make sure that you've got a secure resource. But then it's largely pumps and compression and then -- and maybe pipelines to the extent that it makes sense as a gathering system to be able to gather that product before you inject. So while it has a significant capital requirement associated with it, and it requires -- it's not a 6-month project. It's a multiyear project. That being said, the economics are equally compelling.

我不知道，我的意思是，需要使用任何特定的新奇技術。我的意思是，這是一項多年來在提高石油採收率等方面使用的技術。我認為——但它確實需要一筆可觀的資本——不僅要能夠從測試井開始並開發你的資源，還要確保你有一個安全的資源。但它主要是泵和壓縮，然後 - 可能是管道，它作為一個收集系統是有意義的，能夠在你注入之前收集該產品。因此，雖然它有與之相關的重大資本要求，而且它需要——它不是一個為期 6 個月的項目。這是一個多年的項目。話雖如此，經濟學同樣引人注目。

And I'll take my other questions on this off-line. And then just going to the gross margin or gross profit comments, Mike made. The $60 million number, is that specifically attributed to the specialty alcohol line business in gross profit?

我將在這個離線上回答我的其他問題。然後就毛利率或毛利潤評論，邁克提出。這個 6000 萬美元的數字，是否特別歸功於特種酒精業務的毛利潤？

Yes, it is. Yes, it is. Yes. That is specifically addressing contractual $70 million that we talked about initially.

是的。是的。是的。這專門針對我們最初談到的 7000 萬美元的合同。

And with respect to sort of utilization levels, Bryon, could you maybe share what utilization levels were in 1Q? And what you expect potential utilization that was to be over the remainder of the year?

關於利用率水平，Bryon，您能否分享第一季度的利用率水平？您預計今年剩餘時間的潛在利用率是多少？

So I mean, just a clarifying question, are you looking for overall utilization across the entire portfolio? Or are you looking specifically towards specialty alcohols?

所以我的意思是，只是一個明確的問題，您是否正在尋找整個投資組合的整體利用率？或者您是否特別關注特種酒精？

If you could break it out, Bryon, that would actually be very helpful. If you have that, if not, the overall number would help as well.

如果你能打破它，布賴恩，那實際上會很有幫助。如果你有，如果沒有，總數也會有所幫助。

I think that it's -- the numbers that we've shown in our reported numbers are pretty consistent or probably a good target for you, as you model out the remainder of the year. With regards to specialty alcohols, not to be trite, but if you do the math, you're looking at -- based on our contracted volumes, you're looking at 50%. And so we want -- we definitely expect to be above 50%. I think as I mentioned earlier, to be at 100% of utilization of our specialty alcohols would be certainly a goal, but -- but as well an aggressive assumption. So I think that you -- as you think about it and as we think about it, probably a more appropriate assumption to be to think about that as growing over time. More this year, but then again, adding more of that -- or utilizing more of that capacity as you contract out more volumes over the coming years, next 1 to 2, 3 years.

我認為這是 - 我們在報告的數字中顯示的數字非常一致，或者可能對你來說是一個很好的目標，因為你模擬了今年剩餘的時間。關於特種酒精，不是陳詞濫調，但如果你算一算，你會看到——根據我們的合同量，你看到的是 50%。所以我們想要——我們肯定希望超過 50%。我認為正如我之前提到的，100% 的利用我們的特種酒精肯定是一個目標，但是 - 但也是一個激進的假設。所以我認為你——當你思考它和我們思考它時，可能更合適的假設是認為它會隨著時間的推移而增長。今年更多，但話又說回來，增加更多——或者利用更多的能力，因為你在未來幾年，接下來的 1 到 2 年，3 年外包更多的捲。

And did you already have some international sales for the specialty alcohol products in 1Q?

第一季度的特種酒精產品是否已經有一些國際銷售？

Yes.

是的。

(Operator Instructions) And you have a question from Shahriar Pourreza from Guggenheim Partners.

（操作員說明）您有一個來自 Guggenheim Partners 的 Shahriar Pourreza 的問題。

It's actually Constantine Lednev here for Shahriar. Just a couple of questions to follow-up for kind of an abundance of information.

實際上是康斯坦丁·萊德涅夫 (Constantine Lednev) 為 Shahriar 服務的。只需幾個問題即可獲得大量信息。

On kind of the realized margins and product sales, can you talk about the structure of the contract denominated sales? And how -- specifically, how price elastic are the specialty alcohols and ingredients and in light of corn prices escalating? And what kind of cost protections that you may have kind of both near-term and longer-term as kind of prices have been stepping up.

關於已實現的利潤和產品銷售，您能談談合同計價銷售的結構嗎？以及鑑於玉米價格不斷上漲，特種酒精和配料的價格彈性如何？以及隨著價格的上漲，您可能會在短期和長期內獲得什麼樣的成本保護。

Constantine, so it's Bryon. I -- maybe the best way to answer that is both in the short and so thinking about 2021 and then thinking about 2022 and beyond. Clearly, in the short run there within the next -- within this calendar year, they're really quite inelastic, right? They're -- we've got fixed volumes, fixed prices. You may expect to see some, depending on customers and their demand adjustments sometime around the fourth quarter, maybe renegotiating into the new year and adding additional capacity or making adjustments there, too.

康斯坦丁，所以是布賴恩。我——也許最好的回答方式是簡短地考慮 2021 年，然後考慮 2022 年及以後。顯然，在接下來的短期內——在這個日曆年內，它們真的非常缺乏彈性，對吧？他們是——我們有固定的數量，固定的價格。您可能會看到一些，這取決於客戶及其在第四季度左右某個時候的需求調整，可能會在新的一年重新談判並增加額外的產能或在那裡進行調整。

But generally speaking, I think we hedged our input costs associated with that. So we're feeling -- and I'm feeling good about those margins. And that's why we provided the framework that we did around the 70 million gallons and the $60 million in gross margin. As you think about 2022, I think it would be naive to assume that the additional capacity that -- not only that we brought on, right, where we went from 110 million to 140 million gallons by -- entering this year. But in addition, other producers in this marketplace who have also announced production capacity expansion to not have some kind of an impact potentially on prices. That being said, we believe and are optimistic that there will always be a positive or a premium in that -- in the product at the specialty alcohol markets in comparison to your next best alternative, which would be fuel. If not, why would you not then just reduce your operating costs and sell fuel ethanol instead.

但總的來說，我認為我們對沖了與此相關的投入成本。所以我們感覺 - 我對這些利潤感覺很好。這就是為什麼我們提供了大約 7000 萬加侖和 6000 萬美元毛利率的框架。當你考慮到 2022 年時，我認為如果認為額外的產能——不僅是我們帶來的，對，我們從 1.1 億加侖增加到 1.4 億加侖——進入今年是天真的。但此外，該市場上的其他生產商也宣布擴大產能，以免對價格產生某種潛在影響。話雖如此，我們相信並樂觀地認為，與您的下一個最佳替代品（燃料）相比，特種酒精市場的產品中總會有積極或溢價。如果不是，那你為什麼不直接降低運營成本，轉而銷售燃料乙醇。

And I think that probably the more important part of the business is to really focus on that Mike mentioned and has emphasized, is around, again, the onboarding, the quality control, the, if you will, kind of what would be barriers to entry, both that work both ways for us, right? They both protect us, but they also require us to work significantly to make sure that we can place our product and do so effectively and be able to then hopefully retain those customers for a very long period of time. And that's generally been the behavior that we've seen. Mike, anything you want to add to that?

而且我認為業務中更重要的部分可能是真正專注於邁克提到並強調的內容，再次是關於入職培訓、質量控制，如果你願意的話，什麼是進入障礙，這對我們來說都是雙向的，對吧？它們都保護我們，但它們也要求我們大力工作，以確保我們可以有效地放置我們的產品，並希望能夠在很長一段時間內留住這些客戶。這通常是我們所看到的行為。邁克，你想補充什麼嗎？

No. I think you got it there, Bryon.

不，我想你明白了，布賴恩。

And just a bit of a follow-up on kind of the economics and the market. Do the -- do kind of the recent kind of price moves and changes in the margin change any of the economics on kind of the planned investments, the $18 million that you talked about. But any kind of color on the payback kind of the time frames? And just thoughts on kind of capital allocation at this juncture?

只是對經濟和市場的一點跟進。做 - 做一下最近的價格變動和利潤率的變化會改變計劃投資的任何經濟學，你談到的 1800 萬美元。但是時間框架的回報有什麼顏色？只是想在這個時刻進行什麼樣的資本配置？

Yes. With the $18 million, we're being very specific in terms of where we are investing our capital dollars. We have a lot of infrastructure that we are continuing to upgrade to improve reliability. There are kind of 2 buckets you put it in, further growth opportunities and reliability and improvement in your efficiencies and reliability within your existing plant structure. So we carefully look at those and analyze them. There were certain things that within that $18 million that we had to focus on, for instance, at our ICP plant, it was important to upgrade the cooling tower, which was part of that $18 million capital expenditure and that we have planned for 2021. So there's a variety of things that go into that, no one single answer.

是的。有了這 1800 萬美元，我們在投資資金方面非常具體。我們有很多基礎設施，我們正在繼續升級以提高可靠性。您可以將其放入 2 個桶中，進一步的增長機會和可靠性以及在現有工廠結構內提高效率和可靠性。因此，我們仔細研究並分析它們。在這 1800 萬美元中，我們必須重點關注某些事情，例如，在我們的 ICP 工廠，升級冷卻塔非常重要，這是 1800 萬美元資本支出的一部分，我們計劃在 2021 年進行。所以有各種各樣的事情，沒有一個單一的答案。

I think above and beyond that, as I mentioned in the remarks, we now we have a solid platform. And we've worked really hard over the last 12 months to kind of put ourselves in a position, working on the debt, working on a variety of issues to put ourselves in a position to where we can aggressively pursue some other activities above and beyond the $18 million, and we're looking at those also.

我認為除此之外，正如我在評論中提到的，我們現在擁有一個堅實的平台。在過去的 12 個月裡，我們非常努力地工作，以使自己處於一個位置，處理債務，解決各種問題，使自己處於一個可以積極開展其他活動的位置1800 萬美元，我們也在關注這些。

And just kind of in regard to the opportunities, you obviously talked about the kind of carbon capture opportunities at Pekin. How are you thinking about the capacity for these future investments, and kind of maybe a range of capital requirements? And are you thinking about this from a stand-alone perspective or kind of a joint venture agreement of some sort?

就機會而言，您顯然談到了北京的碳捕獲機會。您如何看待這些未來投資的能力，以及可能的一系列資本要求？您是從獨立的角度還是從某種合資協議的角度考慮這個問題？

It's a really great question. I think probably the best way to answer that is we're considering all of those options. And the real goal is to be able to, as being the client, the producer of the carbon and the CO2 that we intend to try and capture as much value as we can and retain it for the benefit of the company and the shareholders, right? And so we'll certainly -- certainly intend to and will continue to -- the process where we keep these competitive and try and optimize value with regards to this resource.

這是一個非常好的問題。我認為回答這個問題的最佳方式可能是我們正在考慮所有這些選項。真正的目標是能夠作為客戶、碳和二氧化碳的生產者，我們打算嘗試盡可能多地獲取價值，並為公司和股東的利益而保留它，對?因此，我們肯定會 - 當然打算並將繼續 - 我們保持這些競爭力並嘗試優化該資源價值的過程。

So I don't mean to answer the question. It's just, we consider both. But yes, I mean, we're considering all options, and we'll make sure that we bring to bear that, which makes most sense for us and for -- while mitigating risk appropriately. Effectively assigning risks to where - -the the people who can best handle that risk.

所以我不想回答這個問題。只是，我們兩者都考慮。但是，是的，我的意思是，我們正在考慮所有選項，我們將確保我們能夠承擔這一點，這對我們和對——同時適當地降低風險來說最有意義。有效地將風險分配給最能處理該風險的人。

And there are no further questions at this time. I'll turn the call back over to Mike Kandris for any closing remarks.

目前沒有進一步的問題。我會將電話轉回給 Mike Kandris 以獲取任何結束語。

Thank you for joining us today and for your ongoing support. As you can tell, we are excited about the progress we have made and the bright future we have ahead. We look forward to continuing our dialogue with you as we make further progress. Thank you, and I hope everyone has a good afternoon. Thank you.

感謝您今天加入我們以及您一直以來的支持。如您所知，我們對我們取得的進展和我們未來的光明前景感到興奮。隨著我們取得進一步進展，我們期待繼續與您對話。謝謝，希望大家下午愉快。謝謝你。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your line.

女士們，先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開您的線路。