Alto Ingredients Inc (ALTO) 2022 Q2 法說會逐字稿

Good afternoon, and welcome to the Alto Ingredients Second Quarter 2022 Results Conference Call. (Operator Instructions) Please note, this event is being recorded.

下午好，歡迎參加 Alto Ingredients 2022 年第二季度業績電話會議。 （操作員說明）請注意，此事件正在記錄中。

I would now like to turn the conference over to Kirsten Chapman with LHA Investor Relations. Please go ahead.

我現在想將會議轉交給 LHA 投資者關係部的 Kirsten Chapman。請繼續。

Thank you, Gary, and thank you all for joining us today for the Alto Ingredients Second Quarter 2022 Results Conference Call. On the call today are Mike Kandris, CEO; and Bryon McGregor, CFO.

謝謝你，加里，感謝大家今天加入我們參加 Alto Ingredients 2022 年第二季度業績電話會議。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。

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 August 15, the details of which are included in today's press release. A webcast replay will also be available at the 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。今天的電話重播將持續到 8 月 15 日，詳細信息包含在今天的新聞稿中。 Alto Ingredients 網站上也將提供網絡直播重播。

Please note that the information on this call speaks only as of today, August 8. You are advised that the 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 the 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，本次電話會議的信息僅在今天 8 月 8 日發布。請注意，在任何重播時，時間敏感信息可能不再準確。請參閱該公司在演示文稿幻燈片 2 上在線提供的安全港聲明，該聲明指出，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, interest income, provision or benefit of income taxes, asset impairments, loss on extinguishment of debt, acquisition-related expense, fair value adjustments and depreciation and amortization expense. To support the company's review of non-GAAP information later in this call, a reconciling table was included in today's press release.

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。公司將調整後的 EBITDA 定義為在利息費用、利息收入、所得稅撥備或收益、資產減值、債務清償損失、收購相關費用、公允價值調整以及折舊和攤銷之前歸屬於 Alto Ingredients 的未經審計的淨收入或損失費用。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。

On today's call, Mike Kandris will begin with some highlights and review the vision and quarterly activities. Bryon McGregor will then provide detail on our Q2 financial results, then Mike will wrap with a summary and open the call for Q&A. It's now my pleasure to introduce Mike Kandris, CEO. Mike, please go ahead.

在今天的電話會議上，Mike Kandris 將從一些亮點開始並回顧願景和季度活動。然後，Bryon McGregor 將提供我們第二季度財務業績的詳細信息，然後 Mike 將總結並打開問答電話。現在我很高興介紹首席執行官 Mike Kandris。邁克，請繼續。

Thank you, Kirsten. And thank you, everyone, for joining us today. Our diversification into specialty alcohols and essential ingredients continues to serve us well. As we continue to build for the future, our plan includes upgrading equipment and operating systems to increase efficiency and plant reliability, expanding our corn storage capacity, enhancing our specialty alcohol production and broadening its distribution and reinvesting in essential ingredients. In short, these capital projects strengthen and improve our current asset base and will generate even greater profitability.

謝謝你，克爾斯滕。感謝大家今天加入我們。我們對特種酒精和基本成分的多元化繼續為我們服務。隨著我們繼續為未來建設，我們的計劃包括升級設備和操作系統以提高效率和工廠可靠性、擴大我們的玉米儲存能力、提高我們的特種酒精生產、擴大其分銷範圍以及對基本成分進行再投資。簡而言之，這些資本項目加強和改善了我們現有的資產基礎，並將產生更大的盈利能力。

Before I update you on our progress, I'll note we reported positive net income and adjusted EBITDA for the second quarter of 2022, which included $22.7 million in cash from the USDA's Biofuel Producer Program. Bryon will review this and other financial information in more detail in a moment.

在我向您介紹我們的進展之前，我會注意到我們報告了 2022 年第二季度的正淨收入和調整後的 EBITDA，其中包括來自美國農業部生物燃料生產商計劃的 2270 萬美元現金。稍後，Bryon 將更詳細地查看此財務信息和其他財務信息。

I'll now review our efforts related to our long-term strategic plan.

我現在將回顧我們與長期戰略計劃相關的努力。

During this time of macroeconomic challenges, we are managing projects within our control. In the second quarter, with our improved liquidity, we accelerated the litany of repair and maintenance projects as well as several equipment upgrades throughout the portfolio. First, we recently purchased 2 new boilers for the Pekin campus. They will enhance our steam capabilities at both Pekin and ICP and increase the interconnectivity between the 2 facilities. With the greater capacity of these state-of-the-art boilers, we will replace 3 of our old units. More reliable and efficient, our new system will have lower energy usage and costs, plus the additional redundancy will increase our control of energy access across the campus.

在這個宏觀經濟挑戰時期，我們正在管理我們控制範圍內的項目。在第二季度，隨著我們流動性的改善，我們加快了一系列維修和維護項目以及整個投資組合的多項設備升級。首先，我們最近為北京校區購買了兩台新鍋爐。它們將增強我們在北京和 ICP 的蒸汽能力，並增加兩個設施之間的互連性。隨著這些最先進鍋爐的更大容量，我們將更換 3 台舊設備。更可靠、更高效，我們的新系統將降低能源使用和成本，加上額外的冗餘將增加我們對整個校園能源訪問的控制。

Regarding our Eagle Alcohol acquisition. The break bulk, tote and drum sales are in line with our expectations, although currently, increased freight costs have resulted in some profit compression. The integration is complete, and we have made progress against our plan to leverage Eagle's distribution to add totes and drums to Alto's offering. And through Eagle's relationships, we have expanded our customer base. We believe this will produce significant benefits for years to come.

關於我們對 Eagle 酒精的收購。散裝貨、手提袋和桶裝的銷售符合我們的預期，儘管目前貨運成本的增加導致了一些利潤壓縮。集成已完成，我們在利用 Eagle 的分銷向 Alto 的產品添加手提包和鼓的計劃方面取得了進展。通過 Eagle 的關係，我們擴大了客戶群。我們相信這將在未來幾年產生顯著的效益。

We have prioritized upgrading our specialty alcohol equipment at our Pekin wet mill. Over the years, many beverage customers have raised their quality standards. And with these upgrades, our equipment will be best-in-class and we will be able to meet the highest quality requirements and enable us to service additional beverage customers, further increasing the synergy of the Eagle transaction.

我們已優先升級北京濕法廠的特種酒精設備。多年來，許多飲料客戶提高了他們的質量標準。通過這些升級，我們的設備將成為一流的，我們將能夠滿足最高的質量要求，使我們能夠為更多的飲料客戶提供服務，進一步增強 Eagle 交易的協同效應。

In Idaho, we are on track with our essential ingredients expansion. This project consists of 2 phases: the first, representing the further extraction of corn oil; and the second, the separation and production of enhanced protein. Construction of the corn oil extraction phase is now complete. Based on better-than-expected preliminary results, we intend to accelerate the installation of the corn oil extraction technology in our other dry mills.

在愛達荷州，我們的基本成分擴張正步入正軌。該項目包括兩個階段：第一階段，代表玉米油的進一步提取；二是增強蛋白的分離與生產。玉米油提取階段的建設現已完成。基於好於預期的初步結果，我們打算加快在我們的其他乾磨機中安裝玉米油提取技術。

We remain on track with the second phase to commence high-protein production at Magic Valley in early 2023. And once the installation at Magic Valley is complete and operational, it will inform us how we roll the technology out to our other facilities.

我們將在 2023 年初在魔術谷開始第二階段的高蛋白生產。一旦魔術谷的安裝完成並投入使用，它將告訴我們如何將該技術推廣到我們的其他設施。

Also, we are expanding our corn storage at our Pekin facilities and expect to complete the project by mid-November. This will approximately double the number of days of storage at the site and meet our goal to have additional capacity in place before the holidays and winter weather.

此外，我們正在擴大我們在北京工廠的玉米儲存，並預計在 11 月中旬完成該項目。這將使現場的存儲天數大約增加一倍，並滿足我們在假期和冬季天氣之前增加容量的目標。

We have also made numerous additional upgrades at our facility. To name a few: we have completed the upgrade and expansion of ICP's corn oil production; we have increased corn oil storage and railcar load-out capabilities across all locations; we have made logistics improvements at ICP, which included truck access to the plant at scale upgrades; and at the wet mill, we upgraded control systems at the front end of the process and rebuilt 1 of the 2 turbines. These projects are some examples of our commitment to upgrade our facilities to improve efficiency and reliability.

我們還對我們的設施進行了許多額外的升級。僅舉幾例：我們完成了ICP玉米油生產的升級和擴建；我們提高了所有地點的玉米油儲存和軌道車裝載能力；我們在 ICP 進行了物流改進，包括大規模升級卡車進入工廠；在濕磨機，我們升級了流程前端的控制系統並重建了 2 台渦輪機中的 1 台。這些項目是我們承諾升級設施以提高效率和可靠性的一些例子。

We are also engaged in longer-term projects. Regarding our renewable natural gas project at Pekin, we are currently in our engineering and design phase with the goal of making an impact by the end of 2023.

我們還從事長期項目。關於我們在北京的可再生天然氣項目，我們目前處於工程和設計階段，目標是到 2023 年底產生影響。

Regarding carbon capture and sequestration. The U.S. Senate's recent approval of the Inflation Reduction Act is very exciting and significantly improves our project economics, raising the carbon capture tax credit from $50 per metric ton to $85 per metric ton. As previously discussed, we produced approximately 700,000 metric tons of CO2 a year at our Pekin campus. These facilities sit atop the Mount Simon formation, identified as one of the best and largest aquifers in the country for sequestration.

關於碳捕獲和封存。美國參議院最近批准的《減少通貨膨脹法案》非常令人興奮，顯著改善了我們的項目經濟性，將碳捕獲稅收抵免從每公噸 50 美元提高到每公噸 85 美元。如前所述，我們在北京園區每年生產約 700,000 公噸二氧化碳。這些設施位於西蒙山地層之上，該地層被認為是該國最好和最大的蓄水層之一。

To maximize the inherent value of our CO2, we have been actively pursuing numerous options, ranging from the development of a stand-alone project to the sale of the CO2 to one of the various pipelines currently under development in our area. Approval of this legislation will greatly clarify our strategy and options and will accelerate our decision and implementation of this important project.

為了最大限度地發揮我們二氧化碳的內在價值，我們一直在積極尋求多種選擇，從開發獨立項目到出售二氧化碳，再到我們地區目前正在開發的各種管道之一。這項立法的批准將極大地闡明我們的戰略和選擇，並將加快我們對這一重要項目的決策和實施。

Before I turn the call over to Bryon, I'd like to welcome Gabby Gray as an Independent Director, who was recently elected to our Board at our Annual Shareholder Meeting. She is a chemical engineer with fast experience in refining and has been advising the Board for the past year regarding plant operations and optimization as well as process safety management. I'd also like to thank John Prince for his service and wish him the best in his retirement from the Board.

在我將電話轉給布賴恩之前，我想歡迎 Gabby Gray 成為獨立董事，他最近在我們的年度股東大會上當選為我們的董事會成員。她是一名化學工程師，在煉油方面擁有豐富的經驗，過去一年一直為董事會提供有關工廠運營和優化以及過程安全管理的建議。我還要感謝約翰·普林斯的服務，並祝愿他從董事會退休後一切順利。

With that, Bryon, over to you for a review of the financials.

有了這個，布賴恩，請您對財務狀況進行審查。

Thank you, Mike. I'll provide some additional color around our results and metrics for the second quarter of 2022. Net sales were $362 million, up from the $298 million in the second quarter of 2021. This increase is primarily due to the addition of our Idaho plant production and higher average sales price per gallon of renewable fuel, which largely reflects fuel and corn supply constraints that translated into higher ethanol prices.

謝謝你，邁克。我將圍繞我們 2022 年第二季度的業績和指標提供一些額外的色彩。淨銷售額為 3.62 億美元，高於 2021 年第二季度的 2.98 億美元。這一增長主要是由於我們愛達荷州工廠產量的增加每加侖可再生燃料的平均銷售價格較高，這在很大程度上反映了燃料和玉米供應限制導致乙醇價格上漲。

For the quarter, while crush margins were positive, they did not reflect the full cost of delivered corn to our sites. In short, the improvement in board crush was largely offset by the rising corn basis. As such, our specialty alcohol and higher-value essential ingredient production contributed the majority of the quarter's gross profit.

本季度，雖然壓榨利潤率為正，但並未反映將玉米運送到我們工廠的全部成本。簡而言之，壓榨量的改善在很大程度上被玉米基差的上漲所抵消。因此，我們的特種酒精和更高價值的基本成分生產貢獻了本季度毛利潤的大部分。

Alcohol sales were $275 million, and essential ingredient sales were $83 million. We sold 77 million total production gallons. And the 17% increase from the second quarter of 2021 was partially offset by a reduction in third-party sales, reflecting our strategy to focus our marketing and trading efforts around core assets.

酒類銷售額為 2.75 億美元，基本成分銷售額為 8300 萬美元。我們銷售了 7700 萬加侖的總產量。與 2021 年第二季度相比 17% 的增長被第三方銷售額的減少部分抵消，這反映了我們將營銷和交易工作集中在核心資產上的戰略。

Specialty alcohols contributed 26 million gallons, in line with our 2022 contracted volume of 90 million gallons. The 6% increase over second quarter 2021 reflects the expanded capacity as well as increased exports and industrial demand.

特種酒精貢獻了 2600 萬加侖，與我們 2022 年 9000 萬加侖的合同量一致。比 2021 年第二季度增長 6% 反映了產能的擴大以及出口和工業需求的增加。

Cost of goods sold were $353 million versus $283 million in the second quarter of 2021. This reflects high corn basis, greater delivery costs and logistical and service disruptions. Notably, our freight cost significantly increased year-over-year and doubled sequentially.

商品銷售成本為 3.53 億美元，而 2021 年第二季度為 2.83 億美元。這反映了高玉米基差、更高的交付成本以及物流和服務中斷。值得注意的是，我們的貨運成本同比顯著增加，環比翻番。

Also, we recorded $10 million of noncash unrealized gains on our forward derivative positions. This was largely offset by a $10 million noncash lower of cost or market adjustment on ending inventories largely related to an unplanned power outage at our Pekin campus, resulting from a lightning strike to the local utility.

此外，我們在遠期衍生品頭寸上記錄了 1000 萬美元的非現金未實現收益。這在很大程度上被 1000 萬美元的非現金成本降低或期末庫存的市場調整所抵消，這主要與我們北京校區的意外停電有關，這是當地公用事業公司遭受雷擊造成的。

SG&A expenses were $9 million compared to $7 million in the second quarter of 2021. This increase, which we expected, reflects expenses related to our Eagle Alcohol acquisition and the associated accrual for future contingent payments.

SG&A 費用為 900 萬美元，而 2021 年第二季度為 700 萬美元。我們預期的這一增長反映了與收購 Eagle Alcohol 相關的費用以及未來或有付款的相關應計費用。

As Mike mentioned, during the quarter, we recorded income related to a $22.7 million cash grant from the USDA, which was part of the CARES Act to support companies that experienced renewable fuel losses related to the COVID-19 pandemic. We are deploying the funds to support ongoing operations, including facility maintenance. And we have already accelerated some of our important infrastructure projects, as Mike previously mentioned.

正如邁克所提到的，在本季度，我們記錄了與美國農業部 2270 萬美元現金贈款相關的收入，這是 CARES 法案的一部分，旨在支持因 COVID-19 大流行而遭受可再生燃料損失的公司。我們正在部署這些資金來支持正在進行的運營，包括設施維護。正如邁克之前提到的，我們已經加快了一些重要的基礎設施項目。

Net income available to common shareholders was $21.5 million or $0.29 per diluted share compared to $8 million or $0.11 per diluted share in the second quarter of 2021. Adjusted EBITDA was $29.9 million compared to $17 million in the second quarter of 2021. Our balance sheet is clean and strong with cash and cash equivalents totaling $57 million as of June 30, 2022 compared to $50.6 million at December 31, 2021.

普通股股東可獲得的淨收入為 2150 萬美元或每股攤薄收益 0.29 美元，而 2021 年第二季度為 800 萬美元或每股攤薄收益 0.11 美元。調整後 EBITDA 為 2990 萬美元，而 2021 年第二季度為 1700 萬美元。我們的資產負債表是截至 2022 年 6 月 30 日，現金和現金等價物總額為 5700 萬美元，而 2021 年 12 月 31 日為 5060 萬美元。

At June 30, 2022, our working capital was more than $178 million and over $125 million, net of our outstanding $52 million revolving line of credit balance. This represents an improvement of over $16 million from December 31, 2021. Increases include the USDA grant, higher accounts receivable and inventory balances, which were offset by $15 million invested in Eagle Alcohol and over $15 million in capital improvements and repair and maintenance expenses already incurred for the 6 months -- first 6 months of 2022. We have no additional debt, and we expect to further strengthen our liquidity as we complete the renewal of our revolving line of credit in Q3.

截至 2022 年 6 月 30 日，我們的營運資金超過 1.78 億美元和超過 1.25 億美元，扣除我們未償還的 5200 萬美元循環信貸額度餘額。這比 2021 年 12 月 31 日增加了超過 1600 萬美元。增加包括美國農業部的贈款、更高的應收賬款和庫存餘額，這被投資於鷹酒的 1500 萬美元以及已經超過 1500 萬美元的資本改進和維修和維護費用所抵消6 個月——2022 年的前 6 個月發生。我們沒有額外的債務，隨著我們在第三季度完成循環信貸額度的更新，我們預計將進一步加強我們的流動性。

Looking ahead to third quarter, although forward crush margins remain positive, we are coming into a late harvest with high corn basis and low corn inventories. In anticipation, we have scheduled much of our fall maintenance and repairs in Q3 to reduce our related -- our relative use of corn and minimize the impact of short-term higher commodity prices.

展望第三季度，儘管遠期壓榨利潤率仍然為正，但我們正進入晚收，玉米基差高，玉米庫存低。出於預期，我們已將大部分秋季維護和維修安排在第三季度，以減少我們對玉米的相對使用量，並將短期商品價格上漲的影響降至最低。

With that, I'll turn the call back to Mike.

有了這個，我會把電話轉回給邁克。

Thanks, Bryon. In summary, only 2 years ago, in the second quarter of 2020, we began the Alto Ingredients' transformation to emphasize higher-margin products, specialty alcohols and essential ingredients. In this short time since April of 2020, we have generated significant financial benefits, yielding over $70 million in net income and $190 million in adjusted EBITDA, and more is on the horizon.

謝謝，布賴恩。總而言之，就在 2 年前，也就是 2020 年第二季度，我們開始了 Alto Ingredients 的轉型，以強調利潤率更高的產品、特種酒精和基本成分。自 2020 年 4 月以來，在這短短的時間內，我們產生了巨大的財務收益，產生了超過 7000 萬美元的淨收入和 1.9 億美元的調整後 EBITDA，而且更多即將到來。

With a strong balance sheet, we have accelerated critical infrastructure projects. These projects continue our ongoing work to increase plant efficiency, reliability, redundancy and capacity. Blended with our efforts to extend our distribution and expand our relationships, we are improving our position to capture a variety of opportunities and drive profitable growth.

憑藉強勁的資產負債表，我們加快了關鍵基礎設施項目的步伐。這些項目繼續我們正在進行的工作，以提高工廠效率、可靠性、冗餘和產能。與我們擴大分銷和擴大關係的努力相結合，我們正在改善我們的地位，以抓住各種機會並推動盈利增長。

Finally, I'd like to invite investors to meet with us at the H.C. Wainwright Conference in New York City in September.

最後，我想邀請投資者在 H.C. 與我們會面。 9 月在紐約市舉行的溫賴特會議。

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

有了這個，我想打開問題的電話。操作員？

(Operator Instructions) Our first question is from Shar Pourreza with Guggenheim.

（操作員說明）我們的第一個問題來自古根海姆的 Shar Pourreza。

It's actually Constantine here for Shar. I just wanted to start off with the kind of work that you're doing around the carbon capture and storage. And obviously, the IRA that is kind of being contemplated is a big benefit. Just thinking about the threshold for an investment decision and potentially some of the timing around the engineering working partnerships that you have done if there's anything there.

實際上是君士坦丁在這里為夏爾。我只是想從你們圍繞碳捕獲和儲存所做的工作開始。顯然，正在考慮的 IRA 是一個很大的好處。只需考慮投資決策的門檻，以及您已經完成的工程合作夥伴關係的一些時間安排（如果有的話）。

Yes. So as we said in our -- it's Bryon, as we mentioned in our prepared remarks and Mike mentioned, there is -- we're pursuing a number of different options concurrently and really just need to make a decision with regards to which way is the most beneficial for shareholders and for the company. There are certain advantages to going at it alone and building the plant and especially with regards to distance and pipeline. And at the same time, there's also risks that you absorb with as compared to building with the pipeline and being able to allocate those risks on to a third party.

是的。所以正如我們在我們的 - 是布賴恩，正如我們在準備好的評論中提到的和邁克提到的那樣 - 我們正在同時尋求許多不同的選擇，實際上只需要就哪種方式做出決定對股東和公司最有利。單獨建造工廠有一定的優勢，特別是在距離和管道方面。同時，與使用管道建設並能夠將這些風險分配給第三方相比，您還需要承擔風險。

So clearly, with this approved legislation, it certainly changes the economic dynamics, but also then makes it much more clear for us as to how we want and where we would potentially want to go with this. But be assured that we are very much cognizant of the importance of the timing and have been very active in this -- in our process, not only for the last -- particularly for the last 6 months, but I'd say over the last year. And we hope to move quickly in making a decision and moving forward and providing more clarity around that. Understanding that if we were to go it on our own, it would also be important not to get out in front of some of the other work that needs to be done in laying the groundwork if you're going to be out trying to lay some pipeline, right, to not change the economics around that. So I just ask everybody to be patient, and we look forward to being able to provide a lot more information in that regard.

很明顯，通過這項批准的立法，它肯定會改變經濟動態，但也會讓我們更清楚地了解我們想要如何以及我們可能想要去哪裡。但請放心，我們非常清楚時機的重要性，並且在這方面非常積極——在我們的過程中，不僅在最後——尤其是在過去的 6 個月裡，但我想說的是在過去年。我們希望迅速做出決定並向前邁進，並為此提供更多的清晰度。了解如果我們要自己動手，如果您要出去嘗試打下一些工作，那麼不要在打基礎時需要完成的一些其他工作之前走出來也是很重要的管道，對，不改變周圍的經濟。所以我只是請大家耐心等待，我們期待能夠在這方面提供更多信息。

Excellent. That's a lot of great detail. And maybe if you just have any commentary on kind of the engineering work that's been done at this point. Is there realized any cost structure that you're contemplating in your planning? And how does that kind of relate with maybe some of the broader industry benchmarks that we've seen?

出色的。這是很多很棒的細節。如果您對此時已完成的工程工作有任何評論，也許可以。您在計劃中是否考慮到了任何成本結構？這與我們看到的一些更廣泛的行業基準有什麼關係？

Yes. I think they're very much similar. I would say that depending on which direction you're going, some of that work has been done. But I would say the long pull and intent at this point is largely your permitting and not necessarily your engineering and design. There's a lot of work that has been done in that regard, and there's actually been a lot of field work that's been done as well as identifying locations and the like. So it's not as if we're the only party in that neighborhood. And indeed, there's a reason that the pipelines are coming by our location or near our location relatively for injection purposes.

是的。我認為他們非常相似。我想說的是，根據您的前進方向，其中一些工作已經完成。但我想說，此時的長期拉動和意圖主要是您的許可，而不一定是您的工程和設計。在這方面已經做了很多工作，實際上已經完成了很多現場工作以及確定位置等。所以這並不是說我們是那個街區唯一的派對。事實上，管道從我們的位置或我們的位置附近相對注入是有原因的。

Okay. Excellent. And maybe a last one for me. In terms of just capital allocation more broadly, have your considerations changed given kind of the backdrop year-to-date between the IRA and of the commodity environment? Any changes maybe to the amount and timing of capital that you plan to deploy on cost efficiency versus kind of increasing protein and other product expansion?

好的。出色的。也許對我來說是最後一個。就更廣泛的資本配置而言，鑑於 IRA 和商品環境之間的年初至今背景，您的考慮是否發生了變化？您計劃在成本效率方面部署的資本數量和時間是否會發生任何變化，而不是增加蛋白質和其他產品的擴張？

Certainly, yes. And as Mike had indicated, there's a lot of projects that actually we haven't really numerated yet that we look forward to sharing more on, and those may actually have an impact as well as to what -- how we prioritize those projects. There are some that may actually have even a better return on investment than currently the ones that we've identified for you, and so we'll stage those appropriately to make sure that we're bringing the best and highest return to the fore and accelerating those projects. Does that help?

當然，是的。正如邁克所指出的那樣，實際上我們還沒有真正計算出很多項目，我們期待更多地分享這些項目，這些項目實際上可能會產生影響，以及我們如何確定這些項目的優先級。有些實際上可能比我們目前為您確定的投資回報率更高，因此我們將適當安排這些投資回報，以確保我們將最好和最高的回報放在首位，加速這些項目。這有幫助嗎？

Yes. I think so. Yes, (inaudible).

是的。我認同。是的，（聽不清）。

Yes, I just do -- not to be too obtuse, but the idea as well is that we don't really want to talk about projects that haven't yet been approved or that may have some confidentiality associated with it that we wouldn't want to disclose before their time.

是的，我只是這樣做 - 不要太遲鈍，但這個想法也是我們真的不想談論尚未批准或可能與它相關的一些機密性的項目，我們不會'不想在他們的時間之前透露。

The next question is from Eric Stine with Craig-Hallum.

下一個問題來自 Eric Stine 和 Craig-Hallum。

So just going back to the carbon capture a little bit and putting aside the fact that you don't want to get in front of some capital projects that you might already have underway or getting closer. Is this more a decision between speed to market and that potentially the pipeline or at least the activity there and those that are being built are a little bit further along or greater economics? It just seems -- I don't know what the CapEx would be if you went standalone, I'd love to hear that, but it would seem like $50 million plus in EBITDA a year is pretty attractive to go at it alone unless there is a reason to go the other route.

因此，只需稍微回顧一下碳捕獲，撇開您不想參與一些您可能已經在進行或接近的資本項目的事實。這是否更像是在上市速度與潛在的管道或至少那裡的活動以及正在建設的活動之間的決定更進一步或更經濟？看起來——我不知道如果你獨立運營，資本支出會是多少，我很想听聽這個，但每年 5000 萬美元以上的 EBITDA 似乎很有吸引力，除非有是走另一條路的理由。

Eric, I think the really good news is we have a lot of interest, a lot of options, a lot of folks we've been talking to. It is a critical decision for the company, both from a capital standpoint, future economics. And we really have been diligent in terms of trying to vet all the different options that we have out there.

埃里克，我認為真正的好消息是我們有很多興趣，很多選擇，很多我們一直在交談的人。從資本的角度和未來的經濟角度來看，這對公司來說都是一個關鍵的決定。我們確實一直在努力審查我們現有的所有不同選擇。

With this legislation and the potential change there, it greatly changes the economics of some of these options. And so if everything goes as planned and it passes, it's certainly going to kind of shake up the -- some of the work that we've done up to this point. I kind of feel like we're fortunate. We are where we are. We haven't launched into one of the options that maybe would change with this legislation. So I think we're going to be really, really thoughtful as we go through this. And you're right, it does take a lot of capital to do it on your own, but the economics are very compelling. So those are the kind of things we have to sort out, and we're working hard at it.

隨著這項立法和那裡的潛在變化，它極大地改變了其中一些選擇的經濟性。因此，如果一切都按計劃進行並且通過了，那肯定會動搖我們迄今為止所做的一些工作。我覺得我們很幸運。我們在哪裡。我們還沒有推出可能會隨著這項立法而改變的選項之一。所以我認為我們在經歷這件事時會非常非常周到。你是對的，自己做這件事確實需要很多資金，但經濟學非常引人注目。所以這些是我們必須解決的問題，我們正在努力解決。

Okay. Yes, I guess I'll stay tuned on that. In terms of some of the strategic projects, operational initiatives, comparing what you've got in your deck with what you had last quarter, so it doesn't look like you've necessarily taken on additional projects. It is more about acceleration. I guess confirming, is that the case? And then I mean, should we look at that as, I think you laid out $50 million in incremental EBITDA as part of these projects. Should we just look at that as you've pulled that forward 2 quarters or something along those lines?

好的。是的，我想我會繼續關注這一點。就一些戰略項目、運營計劃而言，將你的甲板上的內容與上個季度的內容進行比較，所以看起來你不一定要承擔額外的項目。它更多的是關於加速。我想確認一下，是這樣嗎？然後我的意思是，我們是否應該將其視為，我認為您在這些項目中增加了 5000 萬美元的 EBITDA。我們是否應該在您將其向前推進 2 個季度或類似的情況時看看這一點？

I think that's right. Definitely, the projects that we have, particularly corn oil, is what I mentioned in the script. It definitely is giving great returns, and it's one that we've kind of shifted the Phase 1, Phase 2 of the CoPromax. The economics are there. We're very much looking at the project of generating the returns that we've talked about. But the corn oil part, we can accelerate that.

我認為這是對的。毫無疑問，我們的項目，尤其是玉米油，是我在劇本中提到的。它肯定會帶來豐厚的回報，而且我們已經改變了 CoPromax 的第一階段和第二階段。經濟學就在那裡。我們非常關注我們討論過的產生回報的項目。但是玉米油部分，我們可以加速。

So we're constantly looking at these projects, and it's a very dynamic situation. So given where we are as a company, we're going to take advantage of the things that give us the greater returns. And that's one example of a shift that we've made as opposed to rolling out CoPromax full on at all our locations. We're going to accelerate the corn oil portion, and then we'll look to when we complete the protein piece in Magic Valley. And I would add that we're already talking to potential customers in Magic Valley about what that would look like, and we're very optimistic about the returns where we will get on the protein side also.

所以我們一直在關注這些項目，這是一個非常動態的情況。因此，鑑於我們作為一家公司所處的位置，我們將利用那些能給我們帶來更大回報的東西。這是我們所做的轉變的一個例子，而不是在我們所有的地點全面推出 CoPromax。我們將加速玉米油部分，然後我們將期待何時完成魔術谷中的蛋白質片段。我還要補充一點，我們已經在與 Magic Valley 的潛在客戶討論這會是什麼樣子，我們對蛋白質方面的回報也非常樂觀。

But we're constantly looking at what makes sense, where we need to go, how to deploy the capital. We want to be very prudent as we do that. And at the same time, other projects come up from time to time, and we need to evaluate them and where they stack up in the return profile. So it's an ongoing deal, and it's very dynamic.

但我們一直在研究什麼是有意義的，我們需要去哪裡，如何部署資本。我們希望在這樣做時非常謹慎。同時，其他項目不時出現，我們需要評估它們以及它們在回報概況中的堆積位置。所以這是一項持續的交易，而且非常有活力。

Okay. Understood on that. And maybe last one for me, just more model-related. But you mentioned the turnarounds that you plan to do in the third quarter. I mean any clarity on length or maybe it's an overall utilization rate you expect in the quarter would be helpful.

好的。對此有所了解。也許對我來說是最後一個，只是更多的模型相關。但是您提到了您計劃在第三季度進行的轉變。我的意思是任何關於長度的明確說明，或者可能是您期望在本季度的總體利用率，都會有所幫助。

Yes, I would expect that there would probably be -- well, it's difficult to say because we actually had a number of interruptions as you see. If you look on the total production rate that we had as compared to capacity for the quarter, we were down a little bit quarter-over-quarter, railroad interruptions and the like, particularly for our Western plants.

是的，我預計可能會有——嗯，這很難說，因為正如你所看到的，我們實際上有很多中斷。如果您查看我們的總生產率與本季度的產能相比，我們的季度環比略有下降，鐵路中斷等，尤其是我們的西部工廠。

So if you look at it in the aggregate, it may be about the same, but we're trying to manage as best we can to make sure that we're taking advantage of these windows where you see cost increasing to be able to efficiently do your repairs and maintenance and scheduled outage before you move into the winter period. So we're glad we have that optionality and we expect that you'll see a moderation in basis and corn prices once we get into harvest.

因此，如果您從總體上看，它可能大致相同，但我們正在盡最大努力進行管理，以確保我們正在利用您看到成本增加的這些窗口，以便能夠有效地在進入冬季之前進行維修和維護併計劃停電。因此，我們很高興我們擁有這種選擇權，我們預計一旦我們進入收穫期，您會看到基差和玉米價格有所放緩。

The next question is from Amit Dayal with H.C. Wainwright.

下一個問題來自 H.C. 的 Amit Dayal。溫賴特。

With respect to the alcohol distribution business, I know you commented a little bit that you are seeing some freight cost-related impacts on margins in that business. But there's talk about potential recession, et cetera. Can you give us any sense how you're positioned for that type of market environment for this segment?

關於酒類分銷業務，我知道您評論了一點，您看到該業務的利潤率受到一些與運費成本相關的影響。但是有人談論潛在的衰退等等。您能否告訴我們您在該細分市場的這種市場環境中的定位？

Yes. We've said before, the Eagle acquisition really had multiple layers to it. There's the base business in St. Louis, what they currently were doing. That business was a $30-plus million business with about $4 million of EBITDA. During the integration and with some of the freight logistics, that's -- there's been some pressure on that. But we're fully -- now that the integration is behind us, we're fully expecting to have that piece of the acquisition continue to generate good performance.

是的。我們之前已經說過，對 Eagle 的收購確實涉及多個層面。在聖路易斯有基礎業務，他們目前正在做的事情。該業務是一項價值 30 多萬美元的業務，EBITDA 約為 400 萬美元。在整合和一些貨運物流的過程中，這就是——有一些壓力。但是我們已經完全 - 現在整合已經過去了，我們完全期待收購的那部分繼續產生良好的表現。

But the other parts of the acquisition are equally or maybe even more important, and that is adding vertical integration with totes and drums for our Alto business and expanding that capability and not just be in a position where you provide bulk product. We now have the option to do totes and drums. We will also look to expand that distribution business. We think it's a good business and we -- the expansion could be within Alto, but it could also be taking the Eagle platform and expanding that geographically.

但收購的其他部分同樣重要，甚至可能更重要，那就是為我們的 Alto 業務增加與手提袋和鼓的垂直整合，並擴大這種能力，而不僅僅是提供大宗產品。我們現在可以選擇做手提包和鼓。我們還將尋求擴大分銷業務。我們認為這是一項很好的業務，我們 - 擴展可能在 Alto 內部，但它也可能採用 Eagle 平台並在地理上擴展。

And then the last piece of that acquisition really is around using the relationships that Eagle has built over the years to enhance our sales into the beverage space with specialty alcohol and just generally grow Alto business with the relationships the Eagle folks have. So it's kind of a multifaceted acquisition. It isn't just buying the St. Louis distribution.

然後，這次收購的最後一部分實際上是利用 Eagle 多年來建立的關係，以提高我們在特種酒精飲料領域的銷售，並通過 Eagle 人的關係總體上發展 Alto 業務。所以這是一種多方面的收購。這不僅僅是購買聖路易斯的分佈。

Maybe -- what I'd add to that a bit, Amit, as well is just that it is a freight impact. The compression that we've seen ultimately will adjust itself, right? I mean as you go into new contracted negotiations, you make sure you make the appropriate adjustments for that. While you may not have the flexibility in the given year under a 1-year contract, you certainly make sure [adjusting true-up] in the renewal periods.

也許 - 我要補充一點，阿米特，只是它是一種貨運影響。我們看到的壓縮最終會自行調整，對嗎？我的意思是，當你進行新的合同談判時，你要確保為此做出適當的調整。雖然您可能在 1 年合同下的給定年份沒有靈活性，但您肯定要確保在續約期間 [調整正確]。

Right. And does that brand also potentially play out for the ethanol sales as well? I mean your thoughts around those types of drivers come out faster than what you're seeing for the forward crush margins. Could we see some upside maybe towards the end of the year (inaudible)?

正確的。該品牌是否也可能在乙醇銷售中發揮作用？我的意思是你對這些類型的驅動程序的想法比你看到的前壓邊際更快。我們能否在年底前看到一些上行空間（聽不清）？

I don't know if you would see it -- yes, Amit, sorry, I don't know that you would see it at the end of the year, but you would certainly see as we go into contracted negotiations or contract negotiations in the fourth quarter because of the late harvest. For our specialty alcohols, you would be making the appropriate adjustments, where this -- when you've got fixed price contracts, it's unusual to have freight adjustments. So you have to work your way through that and you make your -- as you enter those new fall negotiations for 2023, you make the appropriate adjustments for your input costs.

我不知道你是否會看到——是的，阿米特，對不起，我不知道你會在今年年底看到它，但你肯定會看到，當我們進入合同談判或合同談判時第四季度因為晚收。對於我們的特種酒精，您將進行適當的調整，在這種情況下——當您有固定價格合同時，運費調整是不尋常的。因此，您必須努力解決這個問題，並做出自己的決定——當您進入 2023 年新的秋季談判時，您需要對投入成本進行適當的調整。

Okay. And then I think, Bryon, you mentioned some planned shutdown in the third quarter. How long will this be for? A week or 2?

好的。然後我想，布賴恩，你提到了第三季度的一些計劃關閉。這會持續多久？一周還是兩週？

Yes, I don't know that it would be a week, but some of the -- call it, 2, 3, 4 days in a couple of the plants. It does not actually include the wet mill this year. The wet mill will be done about -- we did the last -- I guess it was last August that we did the wet mill, so you probably got somewhere between another 9 months to a year before we bring down the wet mill. And that, by far, is that's the most significant impact because of the continuous fermentation and all of the associated services and production around that, that is -- that has a material shutdown of some or an impact of probably 1 to 2 weeks.

是的，我不知道這將是一個星期，但有些——稱之為，在幾家工廠中需要 2、3、4 天。它實際上不包括今年的濕磨機。濕磨機將完成——我們做了最後一次——我猜是去年 8 月我們做了濕磨機，所以在我們關閉濕磨機之前，您可能需要再過 9 個月到一年的時間。到目前為止，這是最顯著的影響，因為持續發酵以及所有相關的服務和生產，也就是說 - 有一些實質性的關閉或可能 1 到 2 週的影響。

(Operator Instructions) The next question is from David Bastian with Kingdom Capital Advisors.

（操作員說明）下一個問題來自 Kingdom Capital Advisors 的 David Bastian。

On the specialty alcohol, you provided a guidance for the 90 million gallons have contracted this year. Are we going to get guidance on gross profit there like we did last year?.

關於特種酒精，您為今年收縮的 9000 萬加侖提供了指導。我們會像去年那樣獲得毛利潤的指導嗎？

I guess I'd say is we haven't been able to give it so far, and it's a good question. It's certainly something that we've tried to tackle. I don't know that it would give you much comfort if by the end of Q3, we can give you Q4, but we'll give you as much guidance as we can and visibility as we can as long as we can. But we're not able to give you that guidance for this quarter.

我想我會說到目前為止我們還不能給出它，這是一個很好的問題。這當然是我們試圖解決的問題。我不知道如果到第三季度末我們可以給你第四季度，這會給你帶來多大的安慰，但我們會盡可能多地為你提供指導和知名度。但我們無法為您提供本季度的指導。

Okay. Could you maybe give some commentary on how the specialty market is looking both for the remainder of this year and as you start looking towards contracting later this fall for 2023?

好的。您能否就今年餘下時間以及您在今年秋季晚些時候開始尋找 2023 年的合同時的專業市場情況發表一些評論？

I would say that nothing has really changed. We're on track. As we mentioned in our prepared remarks, we're certainly on track with the contracted volume. Indeed, we expect to sell in excess of what we had indicated to you and the Street. We indicated 90 million gallons, and we're on track to sell in excess of that. We're seeing a pickup in industrial and export sales as well.

我會說沒有什麼真正改變。我們走上了正軌。正如我們在準備好的評論中提到的那樣，我們肯定在合同量的軌道上。事實上，我們預計銷售量將超過我們向您和華爾街表明的數量。我們指出了 9000 萬加侖，而且我們的銷量有望超過這個數字。我們看到工業和出口銷售也有所回升。

The -- and we would expect, in 2023, to be able to place more product and hopefully be able to upgrade and upmarket those products, particularly as we -- as Mike mentioned in his prepared remarks around raising the quality of product at our wet mill to achieve the highest quality products available, and we hope to have that completed at the end of Q3 to be available. While we wouldn't expect to place all that product, we would certainly expect to be able to place more of that product year-over-year into a higher-value market.

- 我們預計，在 2023 年，能夠投放更多產品，並希望能夠升級和升級這些產品，特別是正如我們 - 正如邁克在他準備好的關於提高我們濕的產品質量的評論中提到的那樣工廠以實現最高質量的產品，我們希望在第三季度末完成該產品。雖然我們不希望投放所有產品，但我們當然希望能夠將更多的產品逐年投放到更高價值的市場中。

Got it. That's good to hear. Switching gears to the protein upgrades. You've mentioned the 9 million uplift for '23. If you're going to get an extra 9 million or so gallons of corn oil or -- in Magic Valley, at current prices, that would be, what, almost a 9 million contribution on its own. So are you seeing a lot of that 25 million you're hoping for them getting accelerated as a result of accelerating the corn oil to other sites?

知道了。聽起來還不錯。切換齒輪到蛋白質升級。你提到了 23 年的 900 萬增長。如果你要額外獲得 900 萬加侖左右的玉米油，或者——在魔術谷，以目前的價格，那將是，什麼，幾乎是 900 萬加侖的貢獻。那麼，您是否看到由於將玉米油加速到其他地點而使它們加速的 2500 萬中的很多？

I think that's a fair comment, David. And quite frankly, the preliminary results that we're seeing coming out of Magic Valley are very impressive, and I think that's led to our decision to take Phase 1 and accelerate it across the platform. The numbers, again, they're preliminary. The system was just completed, but we're very optimistic about where we can go with it.

我認為這是一個公平的評論，大衛。坦率地說，我們看到的來自魔法谷的初步結果非常令人印象深刻，我認為這導致我們決定進行第 1 階段並在整個平台上加速它。再次，這些數字是初步的。該系統剛剛完成，但我們對可以使用它的地方非常樂觀。

Indeed, we're actually even seeing with the corn oil part of the system that we're seeing significantly good results with regards to the protein, so we're excited about that even for having the protein plant facility in place.

事實上，我們甚至看到系統的玉米油部分在蛋白質方面取得了顯著的良好效果，因此即使擁有蛋白質工廠設施，我們也對此感到興奮。

Fully -- yes, fully installed.

完全 - 是的，完全安裝。

This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Mike Kandris, for any closing remarks.

我們的問答環節到此結束。我想把會議轉回給首席執行官 Mike Kandris 來做任何閉幕詞。

Thank you, Gary. Thank you, again, for joining us today and for your continued support. We feel very good about the future, the direction of the company. And again, we want to thank you for your continued support, and have a good afternoon. Thank you.

謝謝你，加里。再次感謝您今天加入我們並繼續支持我們。我們對未來，對公司的發展方向感覺很好。再次感謝您一直以來的支持，祝您下午愉快。謝謝你。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。