Alto Ingredients Inc (ALTO) 2022 Q4 法說會逐字稿

Good afternoon, and welcome to the Alto Ingredients' Fourth Quarter 2022 Results Conference Call.

下午好，歡迎來到 Alto Ingredients 2022 年第四季度業績電話會議。

(Operator Instructions)

（操作員說明）

Please note, this event is being recorded. I would now like to turn the conference over to Kirsten Chapman with LHA Investor Relations. Please go ahead.

請注意，正在記錄此事件。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' Fourth Quarter and Year-end 2022 Results Conference Call.

謝謝 Gary，也感謝大家今天加入我們參加 Alto Ingredients 的第四季度和 2022 年底業績電話會議。

On the call today are Mike Kandris, CEO; and Bryon McGregor, CFO. Alto Ingredients issued a press release after the market closed today, providing details of the company's financial results. The company also prepared a presentation for today's call that is available on the company's website at altoingredients.com.

今天的電話會議是首席執行官 Mike Kandris；和首席財務官 Bryon McGregor。 Alto Ingredients 在今天收市後發布了一份新聞稿，提供了公司財務業績的詳細信息。該公司還為今天的電話會議準備了一份演示文稿，可在公司網站 altoingredients.com 上查閱。

A telephone replay of today's call will be available through March 16, the details of which are included in today's press release. A webcast replay will be available at Alto Ingredients' website. Please note that the information on this call speaks only as of today, March 9.

今天電話會議的電話重播將在 3 月 16 日之前提供，其詳細信息包含在今天的新聞稿中。 Alto Ingredients 網站將提供網絡廣播重播。請注意，本次電話會議的信息僅在 3 月 9 日今天有效。

You're advised that any 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 on this presentation constitute forward-looking statements and considerations that involve a number of risks and uncertainties.

請注意，任何時間敏感的信息在重播時可能不再準確。請參閱在線演示文稿幻燈片 2 上的公司安全港聲明，其中聲明對本演示文稿的一些評論構成前瞻性陳述和考慮，涉及許多風險和不確定性。

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 and risks and other factors previously and from time to time disclosed in Alto Ingredients' filings with the SEC. Except as required by law, the company assumes no obligation to update any forward-looking statements.

Alto Ingredients 未來的實際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 Alto Ingredients 向美國證券交易委員會提交的文件中先前和不時披露的事件和風險以及其他因素。除法律要求外，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 periods being reported.

在管理層準備好的評論中，將引用非 GAAP 措施。管理層使用這些非 GAAP 措施來監控運營的財務業績，並相信這些措施將有助於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 before interest expense, interest income, provision for 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 as a non-GAAP information, a reconciling table was included in today's press release.

公司將調整後的 EBITDA 定義為未經審計的利息支出前淨收入或虧損、利息收入、稅金準備金、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費用。為了支持公司作為非 GAAP 信息的審查，今天的新聞稿中包含了一個調節表。

On today's call, Mike will provide a review of our strategic plan and activities. Bryon will comment on our 2022 financial results, then Mike will wrap up and open the call for questions. It is now my pleasure to introduce Mike Kandris, CEO. Please go ahead, Mike.

在今天的電話會議上，Mike 將回顧我們的戰略計劃和活動。 Bryon 將對我們 2022 年的財務業績發表評論，然後 Mike 將結束並開始提問。現在我很高興介紹首席執行官 Mike Kandris。請繼續，邁克。

Thank you, Kirsten, and thank you, everyone, for joining us this afternoon. We are pleased to have the opportunity to speak with you and to reinforce Alto's transformation plan that will further diversify our products, expand our margins and increase EBITDA. That being said, the fourth quarter and December, in particular, were impacted by extreme commodity volatility in the form of regional natural gas price spikes, high corn basis as well as a dramatic decline in ethanol prices. These factors outweighed our performance in what was already a challenging year.

謝謝 Kirsten，也謝謝大家今天下午加入我們。我們很高興有機會與您交談並加強 Alto 的轉型計劃，該計劃將進一步豐富我們的產品，擴大我們的利潤率並增加 EBITDA。話雖如此，第四季度和 12 月尤其受到區域天然氣價格飆升、高玉米基差以及乙醇價格大幅下跌等形式的極端商品波動的影響。在已經充滿挑戰的一年裡，這些因素超過了我們的表現。

Our 2022 results clearly underscore our need to further mitigate the impact of renewable fuel and commodity price swings. Our near- and longer-term goals continue to focus on driving diversified margin expansion. We are increasing production of our highest quality products, including grain, neutral spirits, corn oil, high protein and primary yeast. We are in advanced stages to launch our carbon capture sequestration project. We are also executing strategies to increase plant efficiency and reliability by adding corn storage, installing a natural gas pipeline, converting our biogas to renewable natural gas, building energy cogeneration capabilities at Pekin and upgrading other equipment.

我們 2022 年的結果清楚地強調了我們需要進一步減輕可再生燃料和大宗商品價格波動的影響。我們的近期和長期目標繼續專注於推動多元化利潤擴張。我們正在增加我們最優質產品的產量，包括穀物、中性烈酒、玉米油、高蛋白和初級酵母。我們正處於啟動碳捕獲封存項目的後期階段。我們還通過增加玉米儲存、安裝天然氣管道、將我們的沼氣轉化為可再生天然氣、在北京建設能源熱電聯產能力以及升級其他設備來執行提高工廠效率和可靠性的戰略。

As 2022 unfolded, it became clear that we needed to accelerate these growth initiatives. So last November, we entered into a 6-year term loan for up to $125 million. We are staging our projects and drawing capital in tranches to minimize carrying costs and maximize return. Our efforts will position us to add substantial EBITDA streams to our business, all of which will be enhanced as the operating environment improves.

隨著 2022 年的到來，很明顯我們需要加快這些增長計劃。因此，去年 11 月，我們簽訂了高達 1.25 億美元的 6 年期定期貸款。我們正在分期進行項目和提取資金，以最大限度地降低持有成本並最大限度地提高回報。我們的努力將使我們能夠為我們的業務增加大量的 EBITDA 流，所有這些都將隨著經營環境的改善而得到加強。

With the completion of our current projects, we expect to increase annualized EBITDA by over $65 million by the end of 2025 and by over $125 million in 2026 when our carbon capture, cogeneration and other initiatives are fully realized.

隨著我們當前項目的完成，我們預計到 2025 年底，年化 EBITDA 將增加超過 6500 萬美元，到 2026 年，當我們的碳捕獲、熱電聯產和其他舉措完全實現時，年化 EBITDA 將增加超過 1.25 億美元。

Let me provide greater detail on our capital projects. First, I'll review our high-quality alcohol strategy and achievements. We began expanding our high-quality alcohol production in 2020. And in 2021, we refurbished our 30 million gallon per year grain neutral spirits, or GNS, distillation system at our wet mill in Pekin. We raised the quality of our specialty alcohol earning certifications to attract the most demanding customers in the pharmaceutical industry.

讓我更詳細地介紹我們的資本項目。首先，我將回顧我們的優質酒精戰略和成就。我們在 2020 年開始擴大我們的優質酒精生產。在 2021 年，我們翻新了我們位於北京的濕磨廠每年 3000 萬加侖的穀物中性烈酒或 GNS 蒸餾系統。我們提高了專業酒類收入認證的質量，以吸引製藥行業最苛刻的客戶。

In 2022, we made additional upgrades to our GNS system to produce the highest-quality, beverage-grade product available in the market. Having now completed these improvements, we are excited to introduce our new high-quality 190 proof and low moisture 200 proof GNS products to our existing and target customers in the beverage, food, flavor, personal care and pharmaceutical industries.

2022 年，我們對 GNS 系統進行了額外升級，以生產市場上質量最高的飲料級產品。現在完成這些改進後，我們很高興向飲料、食品、香精、個人護理和製藥行業的現有客戶和目標客戶介紹我們新的高質量 190 度和低水分 200 度 GNS 產品。

Currently, we are working with customers to qualify our product in preparation for the yearly contracting period, which happens in the fall. Beginning in 2024, we expect to generate an additional $5 million in EBITDA, annually, from these products. Also, in January 2022, we added break bulk and distribution capabilities by acquiring Eagle Alcohol. This collaboration has been fruitful with the Eagle team advising on high-quality alcohol production, enabling tote and drum packaging and distribution and building customer relationships for Alto's specialty alcohol. We are excited about future synergies with Eagle and our new GNS capabilities.

目前，我們正在與客戶合作以驗證我們的產品，為秋季的年度合同期做準備。從 2024 年開始，我們預計這些產品每年將額外產生 500 萬美元的 EBITDA。此外，在 2022 年 1 月，我們通過收購 Eagle Alcohol 增加了散貨和分銷能力。此次合作卓有成效，Eagle 團隊就高質量酒精生產提供建議，實現手提袋和圓桶包裝和分銷，並為 Alto 的特種酒精建立客戶關係。我們對未來與 Eagle 和我們新的 GNS 功能的協同作用感到興奮。

Next, we are expanding production of high-margin products, corn oil and high protein. In October, we commissioned the corn oil technology at our Magic Valley facility and saw increased production levels of approximately 40% in pounds per bushel. When combined with the high protein enhancement system, we expect to reach 50% or better increased yield, generating approximately $4.5 million annually of additional EBITDA based on current market pricing. In the fourth quarter, natural gas prices increased in the Western region and in December spiked to over 400% compared to Q3 prices.

接下來，我們正在擴大高利潤產品、玉米油和高蛋白的生產。 10 月，我們在 Magic Valley 工廠啟用了玉米油技術，產量提高了約 40%（以磅/蒲式耳計）。當與高蛋白增強系統相結合時，我們預計產量可提高 50% 或更高，根據當前市場定價，每年可產生約 450 萬美元的額外 EBITDA。第四季度，西部地區天然氣價格上漲，12月與第三季度相比漲幅超過400%。

As such, we decided to moderate production at our Columbia plant and temporarily hot idled the Magic Valley facility. Taking advantage of the situation in Magic Valley, we focused our attention on installing the high-protein CoPromax system, which is in the final stages of construction. We expect our high-protein product to easily achieve or even exceed 52% protein and generate an additional $4.5 million in annual EBITDA.

因此，我們決定降低哥倫比亞工廠的產量，並暫時讓魔幻谷工廠處於熱閒置狀態。趁著魔谷的情況，我們把注意力集中在了高蛋白CoPromax系統的安裝上，該系統已經進入最後建設階段。我們預計我們的高蛋白產品很容易達到甚至超過 52% 的蛋白質，並產生額外的 450 萬美元年度 EBITDA。

We expect to reach full production in Q3 '23 and with both corn oil and high-quality protein installed, we anticipate on a combined basis, an additional annual EBITDA run rate of approximately $9 million based on current market pricing for the Magic Valley facility.

我們預計將在 23 年第三季度實現全面生產，並安裝玉米油和優質蛋白質，我們預計根據 Magic Valley 設施當前的市場定價，綜合計算，每年的 EBITDA 運行率將增加約 900 萬美元。

In light of the positive proof of concept at Magic Valley we plan to rollout the corn oil technology at our other 3 dry mill locations. Although each facility is a slightly different size, on average, we expect to produce similar financial results to Magic Valley. For these plants, we anticipate the additional corn oil installations, in aggregate, will generate approximately $13.5 million in annual EBITDA. After the high-protein system is fully and successfully operational at Magic Valley, we will evaluate and anticipate rolling out the high-protein technology at our other dry mills with similar economics.

鑑於 Magic Valley 的積極概念證明，我們計劃在我們的其他 3 個乾磨地點推出玉米油技術。儘管每個設施的規模略有不同，但平均而言，我們預計會產生與魔穀類似的財務結果。對於這些工廠，我們預計額外的玉米油裝置總計將產生約 1350 萬美元的年度 EBITDA。在高蛋白系統在 Magic Valley 全面成功運行後，我們將評估並預期在我們其他具有類似經濟效益的干磨機上推廣高蛋白技術。

We also plan to expand into primary yeast production. Having completed successful product trials, we are in advanced stages of selecting and engineering and design group to finalize our plans, schedule and budget. This project would extend the past upgrades made to our yeast operations. Our preliminary figures indicate our primary yeast product will contribute annual EBITDA of approximately $19 million in the first 12 months and approximately $25 million, annually thereafter.

我們還計劃擴展到初級酵母生產。在成功完成產品試驗後，我們正處於選擇和工程設計團隊的後期階段，以最終確定我們的計劃、時間表和預算。該項目將擴展過去對我們的酵母操作進行的升級。我們的初步數據表明，我們的主要酵母產品將在前 12 個月貢獻約 1900 萬美元的年度 EBITDA，此後每年貢獻約 2500 萬美元。

We believe construction could begin in early 2024, and end in mid-2025. As discussed before, we believe we have a significant and very large opportunity in carbon capture and sequestration. The arena has changed rapidly and our measured analysis shows significant potential benefits. For example, the Inflation Reduction Act increased the price of carbon to $85 per metric ton, significantly strengthening future economics. Also, competition for offtake agreements has dramatically lowered the operating costs.

我們認為建設可能會在 2024 年初開始，並在 2025 年年中結束。如前所述，我們相信我們在碳捕獲和封存方面擁有重要且非常大的機會。競技場瞬息萬變，我們的測量分析顯示出巨大的潛在好處。例如，《降低通貨膨脹法案》將碳價格提高到每公噸 85 美元，顯著增強了未來的經濟效益。此外，承購協議的競爭也大大降低了運營成本。

Currently, we are in advanced negotiations to provide turnkey transportation, sequestration and monitoring services for this important and game-changing project. We are also finalizing the selection of engineering services for the design and installation of the capture, compression and energy requirements at the Pekin campus. While it is premature to provide specific details, we believe beginning in 2026, the project will contribute over $30 million, annually, and additional EBITDA, and this is based solely on the benefits under the Inflation Reduction Act associated with the 45Q incentive.

目前，我們正在進行高級談判，為這個重要的、改變遊戲規則的項目提供交鑰匙運輸、封存和監測服務。我們還在完成北京校區捕獲、壓縮和能源需求的設計和安裝工程服務的選擇。雖然現在提供具體細節還為時過早，但我們相信從 2026 年開始，該項目每年將貢獻超過 3000 萬美元和額外的 EBITDA，而這完全基於與 45Q 激勵相關的通貨膨脹減少法案所帶來的好處。

Further, by sequestering our CO2 from our Pekin site, we expect to materially reduce Alto's carbon footprint and to monetize additional value from the alcohol and essential ingredients we produce and sell. Regarding our strategies to improve plant efficiency, reliability and capacity, we installed additional corn storage at our Pekin site. We are currently conditioning the silo and expect it to be fully operational in Q2 2023. This will reduce the cost of delivered corn to our facility, lower the cost of silo cleaning and increase the reliability of operations at the facility. We anticipate this installation to conservatively contribute over $2 million annually to EBITDA.

此外，通過從我們的北京工廠隔離我們的二氧化碳，我們希望能夠大幅減少奧拓的碳足跡，並從我們生產和銷售的酒精和基本成分中獲得額外價值。關於我們提高工廠效率、可靠性和產能的戰略，我們在我們的北京工廠安裝了額外的玉米倉庫。我們目前正在調整筒倉，預計它將在 2023 年第二季度全面投入運營。這將降低向我們設施運送玉米的成本，降低筒倉清潔成本並提高設施運營的可靠性。我們預計此安裝保守地每年為 EBITDA 貢獻超過 200 萬美元。

Consistent with our sustainability efforts, we have been reviewing options to improve energy, procurement and usage. For our Pekin campus, we have made significant progress and planning the installation of a new natural gas pipeline to bypass our current utility. When fully operational, which we expect in 2024, the pipeline would reduce our energy costs by $3 million annually.

與我們的可持續發展努力一致，我們一直在審查改善能源、採購和使用的方案。對於我們的北京校區，我們已經取得了重大進展，併計劃安裝一條新的天然氣管道以繞過我們目前的公用設施。預計在 2024 年全面投入運營後，該管道每年可為我們減少 300 萬美元的能源成本。

Further, the line would help fulfill our increased energy needs associated with our numerous growth initiatives including expanded yeast production and carbon sequestration. As a bonus, the new gas pipeline will lower our carbon score. Most of our biogas is currently flared. We believe once converted to renewable natural gas or RNG, we could use the natural gas pipeline to monetize the value of this current waste stream and produce RNG for an additional $3 million in EBITDA annually.

此外，該生產線將有助於滿足與我們眾多增長計劃相關的日益增長的能源需求，包括擴大酵母生產和碳封存。作為獎勵，新的天然氣管道將降低我們的碳排放分數。目前，我們的大部分沼氣都燃燒掉了。我們相信，一旦轉化為可再生天然氣或 RNG，我們就可以利用天然氣管道將當前廢物流的價值貨幣化，並生產 RNG，每年的 EBITDA 額外增加 300 萬美元。

With the combined energy requirements for carbon capture and goals of lowering our carbon score and increasing our planned efficiency we also are finishing a third-party study on cogeneration at Pekin. Based on preliminary results, we expect the cogen at Pekin to contribute approximately $15 million in annual EBITDA based on the current energy prices.

考慮到碳捕獲的綜合能源需求以及降低碳排放和提高計劃效率的目標，我們還在北京完成了一項關於熱電聯產的第三方研究。根據初步結果，我們預計北京的熱電聯產根據當前能源價格每年貢獻約 1500 萬美元的 EBITDA。

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

有了這個，Bryon，請你回顧一下財務狀況。

Thank you, Mike. I'll provide some additional color around our results for the fourth quarter and full year of 2022. As Mike noted, the fourth quarter was disappointing and illustrative of why we are so focused on further differentiation, leveraging our core strength, reducing our operating costs, improving operational reliability and invigorating our bottom line. Crush margins turned particularly negative in Q4, compounded by soaring and sustained natural gas prices in the Western region. As a result, our gross loss was $21 million for the quarter and $28 million for the year.

謝謝你，邁克。我將圍繞我們 2022 年第四季度和全年的業績提供一些額外的色彩。正如 Mike 指出的那樣，第四季度令人失望，並說明了為什麼我們如此專注於進一步差異化，利用我們的核心優勢，降低我們的運營成本，提高運營可靠性並增強我們的底線。由於西部地區天然氣價格持續飆升，第四季度的壓榨利潤率尤其為負。因此，我們本季度的毛虧損為 2100 萬美元，全年為 2800 萬美元。

Net loss available to common stockholders was $33 million for Q4 2022 and $43 million for the year. Adjusted EBITDA was negative $23.5 million for Q4 '22, and a negative $10 million for the year. Despite the results, our liquidity remains strong with approximately $36 million in cash and $58 million in excess line of credit availability as well as $40 million in committed term loan funds to address our capital improvement plans. Our cash balance reflects a portion of the $60 million draw from our term loan facility during the quarter, offset in part, by operating expenses and capital expenditures.

2022 年第四季度可供普通股股東使用的淨虧損為 3300 萬美元，全年為 4300 萬美元。 22 年第四季度調整後的 EBITDA 為負 2350 萬美元，全年為負 1000 萬美元。儘管取得了成果，但我們的流動性仍然強勁，有大約 3600 萬美元的現金和 5800 萬美元的超額可用信貸額度以及 4000 萬美元的承諾定期貸款資金來解決我們的資本改善計劃。我們的現金餘額反映了本季度從我們的定期貸款安排中提取的 6000 萬美元的一部分，部分被運營費用和資本支出抵消。

In our drive to invest in a better future, we spent $12.5 million in the fourth quarter and $37.7 million for the year on the initiatives Mike discussed earlier as well as on various improvements to reduce our high operating costs and increase reliability. This includes a purchase of a new, high-efficient boiler to replace 2 rental boilers currently in operation at our Pekin campus. We expect to complete the installation in early 2024. And once operational, we expect to significantly reduce our energy footprint, producing over $1.5 million per year in incremental EBITDA.

為了投資於更美好的未來，我們在第四季度花費了 1250 萬美元，全年花費了 3770 萬美元用於 Mike 之前討論的舉措以及各種改進措施，以降低我們的高運營成本並提高可靠性。這包括購買一台新的高效鍋爐，以取代我們北京校區目前正在運行的 2 台出租鍋爐。我們預計將在 2024 年初完成安裝。一旦投入運營，我們預計將顯著減少我們的能源足跡，每年產生超過 150 萬美元的增量 EBITDA。

Regarding our contracts for specialty alcohol for 2023, we expect to maintain or grow share with our existing customer base, while adding new accounts in the beverage category, particularly in 2024 and beyond with our improved Pekin GNS production system now online. While it's difficult to speak to our -- pardon me, while it's difficult to speak to or forecast ethanol margins in 2023, we expect to benefit from approximately $10 million in additional EBITDA generated from the capital projects we have already completed or will complete this year.

關於我們 2023 年的特種酒精合同，我們希望在現有客戶群中保持或增加份額，同時在飲料類別中增加新客戶，特別是在 2024 年及以後，我們改進的 Pekin GNS 生產系統現已上線。雖然很難與我們交談 - 對不起，雖然很難與 2023 年的乙醇利潤率交談或預測，但我們預計將從我們已經完成或將在今年完成的資本項目產生的約 1000 萬美元的額外 EBITDA 中受益.

In addition, with funding from the new term loan and associated accelerated investment in the further diversification of our specialty alcohol and essential ingredient products, we expect to almost double our EBITDA by year-end 2025 compared to our 3-year historical average and nearly double it again when our other projects are fully operational by year-end 2026. We look forward over the coming quarters to discuss the progress we've made.

此外，借助新定期貸款的資金以及對我們的特種酒精和必需成分產品進一步多元化的相關加速投資，我們預計到 2025 年底我們的 EBITDA 將比我們的 3 年曆史平均水平增加近一倍，並且幾乎翻一番當我們的其他項目到 2026 年底全面投入運營時，我們會再次這樣做。我們期待在未來幾個季度討論我們取得的進展。

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

有了這個，我會把電話轉回給邁克。

Thank you, Bryon. Appreciate that. In summary, we have accomplished a lot, and we continue to focus on the future. Commodity fluctuations are cyclical and will pass. In the meantime, to reduce their impact we are continuing to transform our business. As stated earlier, the projects that we are contemplating, we expect to generate EBITDA of roughly $65 million by the end of 2025 and to increase to $125 million in 2026 when our carbon capture, cogeneration and other initiatives are complete. We're very excited about our revenue diversification plans, margin expansion of plant optimization initiatives and look forward to sharing our progress on future calls.

謝謝你，布萊恩。感謝。總而言之，我們已經取得了很多成就，我們將繼續關注未來。商品波動是周期性的，會過去的。與此同時，為了減少它們的影響，我們正在繼續轉變我們的業務。如前所述，我們正在考慮的項目預計到 2025 年底將產生約 6500 萬美元的 EBITDA，並在 2026 年碳捕獲、熱電聯產和其他舉措完成後增加到 1.25 億美元。我們對我們的收入多元化計劃、工廠優化計劃的利潤擴張感到非常興奮，並期待在未來的電話會議上分享我們的進展。

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)

（操作員說明）

Our first question is from Eric Stine with Craig-Hallum.

我們的第一個問題來自 Eric Stine 和 Craig-Hallum。

You gave a lot here, a lot to digest. I guess maybe I will start on the carbon capture and sequestration. The numbers that you gave and maybe parsing just some of your comments, does that imply that potentially this would be with a partner? Or is that the wrong way to think about it?

你在這裡付出了很多，需要消化很多。我想也許我會開始碳捕獲和封存。你給出的數字，也許只是解析了你的一些評論，這是否意味著這可能與合作夥伴有關？或者這是錯誤的思考方式？

No. I think on the transportation side and well, the pipeline, that would be with one of the partners. We are talking with various folks about -- it's a pretty extensive cost on the compression and so forth and exactly how we approach that. We're considering all of our options. So it's fluid. We're deep into it. We're talking to a lot of folks and we have advanced this project pretty substantially since the last time we talked. So more to come on that.

不，我認為在運輸方面以及管道方面，將與合作夥伴之一合作。我們正在與不同的人討論——這是一個相當大的壓縮成本等等，以及我們如何處理這個問題。我們正在考慮我們所有的選擇。所以它是流動的。我們深入其中。我們正在與很多人交談，自上次交談以來，我們已經大大推進了這個項目。所以還有更多的事情要做。

Okay. And just to clarify, so when you say transportation, I mean, you're talking about on potentially one of the -- a number of pipelines that are in planning stages trying to get right away and permitting and all that?

好的。只是為了澄清一下，所以當你說運輸時，我的意思是，你談論的可能是其中一個 - 許多處於規劃階段的管道試圖立即獲得許可等等？

Yes. That's correct.

是的。這是正確的。

Got it. Okay. And does this -- I mean, should we still think of direct -- I mean, given your location there in Pekin, direct sequestration that, that still is a possibility. I mean, even though I guess you're focused right now on utilizing the transportation side, but could, I guess, direct sequestration, would that -- could that be part of it? And would that be incremental to even the targets you've given right now?

知道了。好的。這樣做——我的意思是，我們是否仍應考慮直接——我的意思是，考慮到你在北京的位置，直接隔離仍然是可能的。我的意思是，儘管我猜你現在正專注於利用運輸方面，但我想，直接封存，那會是它的一部分嗎？這是否會增加您現在設定的目標？

Yes. So let me clarify, it's Bryon, real quick. Clearly, there needs to be a pipeline. We're in a suburban location and adjacent to the Illinois River. So it's not a good location for injection, although we sit atop the Mount Simon formation. So there is opportunities in consideration with regards to how far you need to take it. You can certainly link into one of the more public pipelines, but you could also go at your own, effectively, with a partner to handle the pipeline and sequestration part of the business.

是的。所以讓我澄清一下，這是 Bryon，非常快。顯然，需要有一個管道。我們位於郊區，毗鄰伊利諾伊河。所以這不是一個很好的注射位置，雖然我們坐在西蒙山地層的頂部。因此，有機會考慮您需要走多遠。您當然可以連接到更公共的管道之一，但您也可以自己有效地與合作夥伴一起處理業務的管道和封存部分。

Yes. The real -- we have, Eric, is we are -- we don't have to go far to poke into some really good geology.

是的。真正的 - 我們有，埃里克，我們是 - 我們不必走得太遠就能深入研究一些非常好的地質學。

Right. Got it. Okay. That's helpful. Maybe just on the GNS on that side of it. Is that -- you expect spot sales to be meaningful or I guess, in 2023 with the ultimate goal being that you want to hit that contracting window for 2024?

正確的。知道了。好的。這很有幫助。也許就在它那一邊的 GNS 上。那是——你希望現貨銷售有意義，或者我猜，在 2023 年，最終目標是你想在 2024 年達到那個合同窗口？

That's correct. 2023, we'll certainly work real hard to qualify our products. We're very happy with the results we've got from the refurbishing of the system and the upgrading of the system done recently here. So this year, we'll be more qualification targeting customers, existing customers and new customers and to really be ready to go full out when we get to the fall contracting cycle. We expect that the $5 million that we talked about would be for 2024 and beyond. But we do expect to get some spot market activity this year.

這是正確的。到 2023 年，我們一定會非常努力地使我們的產品合格。我們對最近在這裡完成的系統翻新和系統升級所取得的成果感到非常滿意。所以今年，我們將更多地針對客戶、現有客戶和新客戶進行資格認證，並在我們進入秋季合同周期時真正準備好全力以赴。我們預計我們討論的 500 萬美元將用於 2024 年及以後。但我們確實預計今年會有一些現貨市場活動。

Okay. All right. That's good. And then maybe last one for me. You might have mentioned it, and I probably missed it, but can you just remind on what the CapEx is and maybe it's even in the release and I missed it, I apologize if I did, but just the CapEx associated with these and have they changed versus what you provided last quarter?

好的。好的。那挺好的。然後也許是我的最後一個。你可能已經提到了，我可能錯過了，但你能不能提醒一下資本支出是什麼，也許它甚至在發布中，我錯過了，如果我提到了，我很抱歉，但只是與這些相關的資本支出，並讓他們與您上個季度提供的內容相比發生了變化？

Yes. So some of the stuff that are pretty consistent with the last quarter that we gave, I think that we provided for the various upgrades to the specialty alcohol. I think the number we gave was something like $6 million to $8 million. We have not provided details on a certain number of the other larger projects like the pipeline, the biogas to RNG, the carbon sequestration or the yeast project, largely because those are still in finalization.

是的。因此，一些與我們提供的上個季度非常一致的東西，我認為我們提供了對特種酒精的各種升級。我認為我們給出的數字大約是 600 萬到 800 萬美元。我們沒有提供某些其他較大項目的詳細信息，例如管道、沼氣到 RNG、碳封存或酵母項目，主要是因為這些項目仍處於定稿階段。

We've got feed study work going on, and we want to make sure that we give you good numbers. So I mean, we think we have a pretty good idea, but we'll provide more details as we continue along over the next couple of quarters and qualify those and get those under Board approval and moving forward.

我們正在進行飼料研究工作，我們希望確保為您提供良好的數據。所以我的意思是，我們認為我們有一個很好的主意，但我們將在接下來的幾個季度繼續提供更多細節，並確定這些細節並獲得董事會批准並向前推進。

(Operator Instructions)

（操作員說明）

The next question is from David Bastian with Kingdom Capital Advisors.

下一個問題來自 Kingdom Capital Advisors 的 David Bastian。

Tough environment for fuel alcohol -- fuel ethanol. I was curious if you can give guidance on what's locked in for the specialty side for 2023?

燃料酒精的惡劣環境——燃料乙醇。我很好奇您能否就 2023 年專業方面的鎖定內容提供指導？

Yes. So as I mentioned -- hi, David, by the way. As I mentioned, I think it's in my prepared remarks, we expect to, at least have, just roughly the equivalent, if not more, of alcohol sold, especially alcohol sold this year as well. There was a significant amount of additional capacity that came on in 2023.

是的。所以正如我提到的 - 嗨，大衛，順便說一下。正如我所提到的，我認為在我準備好的發言中，我們預計至少會大致相當於（如果不是更多的話）售出的酒類，尤其是今年售出的酒類。 2023 年出現了大量額外產能。

So it was a very competitive market. So we were, one, glad to have not only retain and manage our existing balance, but again, as Mike mentioned, we expect to continue to be able to make progress with regards to placing more of our higher quality and highest quality products in the marketplace. So I think what we showed in our earnings release is showing something around 93 million gallons of specialty alcohol sold. So you should use that as a proxy.

所以這是一個競爭非常激烈的市場。因此，我們很高興不僅保留和管理我們現有的餘額，而且正如 Mike 提到的那樣，我們希望能夠繼續取得進展，將更多更高質量和最優質的產品放入市場。所以我認為我們在收益發布中顯示的是銷售了大約 9300 萬加侖的特種酒精。所以你應該用它作為代理。

Okay. And no commentary on margins at this point?

好的。在這一點上沒有關於利潤率的評論？

Well, I guess what I'd say is, it's better than last year, although it started rough, carried over from really pretty crappy margins in December, into January, but we're seeing significant improvement. You've seen a positive crush margin right now. Our hope is that, that will continue to sustain itself. And it bodes well for, hopefully, a better year.

好吧，我想我要說的是，它比去年好，雖然它開始粗糙，從 12 月非常糟糕的利潤率延續到 1 月，但我們看到了顯著的改善。您現在已經看到了正壓榨利潤率。我們的希望是，它將繼續維持下去。這預示著一個更好的一年。

Got it. Thanks for breaking out all of the different capital projects in your presentation here. This is really helpful, I think, for telling the story of what you're trying to get to. I was curious if you can just give some commentary on what's already funded? What still remains to be funded kind of what the capital requirements are going to be versus continuing to operate the business. It seems like you have a lot of stuff here. I know you provided some of that in the past. Just want to understand kind of cash, sources and uses, for the next 24 months?

知道了。感謝您在此處的演示文稿中列出所有不同的資本項目。我認為，這對於講述您想要達到的目標非常有幫助。我很好奇你能否就已經資助的項目發表一些評論？與繼續經營業務相比，仍然需要資金的資本要求將是什麼。看來你這裡有很多東西。我知道你過去提供了一些。只想了解未來 24 個月的現金種類、來源和用途？

Sure. So we have funded -- the projects that are clearly well in bad stages, so the improvements to the specialty alcohol, the Iris technology installation at Magic Valley. Corn silo, we think those are built into that. Those that are pending would be the pipeline, the RNG, the yeast and carbon sequestration and cogeneration.

當然。因此，我們資助了 - 顯然處於糟糕階段的項目，因此改進了特種酒精，即魔術谷的 Iris 技術安裝。玉米筒倉，我們認為那些是內置的。那些懸而未決的將是管道、RNG、酵母和碳封存和熱電聯產。

So those ones that are largely going to be occurring. And then also, what I'd add to that is the corn oil and the additional protein projects for the remaining dry mills. So there's a number of -- while we've got a lot under our belt and a lot that we're working on right now, I would say that the lion's share is still sitting ahead of us, so we tried to give you some reasonable times and what we expect to be able to produce over the next couple of years.

所以那些基本上會發生的事情。然後，我要添加的是玉米油和剩餘乾磨的額外蛋白質項目。所以有很多 - 雖然我們已經掌握了很多東西並且我們現在正在努力，但我想說大部分仍然擺在我們面前，所以我們試圖給你一些合理的時間以及我們期望在未來幾年內能夠產生什麼。

Got it. Okay. And then maybe on the fuel side, what are you guys seeing in terms of capacity coming out of the market, given how terrible margins have been? And are you seeing any opportunities to lock in some lower input costs like with natural gas down where it's traded to?

知道了。好的。然後也許在燃料方面，鑑於利潤率有多低，你們在市場產能方面看到了什麼？你是否看到任何機會鎖定一些較低的投入成本，比如天然氣在交易的地方？

Yes, I have to say we're pretty excited about natural gas compared to what we just went through in the western markets. That being said, and I think that it looks like it's a pretty favorable market in natural gas for the next at least 24 months. We'll see what happens a little further out, but I think we have a pretty good beat on that. That being said, I think some of the challenges we're still facing, David, are a fairly low carryout of corn into 2023 and particularly in the western corn belt. So you're actually seeing quite a bit of draw from the eastern corn belt into that western corn belt to support it.

是的，我不得不說，與我們剛剛在西方市場經歷的相比，我們對天然氣感到非常興奮。話雖這麼說，但我認為在接下來的至少 24 個月裡，天然氣市場看起來是一個相當有利的市場。我們會看到更遠的地方會發生什麼，但我認為我們在這方面做得很好。話雖這麼說，大衛，我認為我們仍然面臨的一些挑戰是到 2023 年的玉米結轉率相當低，尤其是在西部玉米帶。所以你實際上看到從東部玉米帶到西部玉米帶的相當多的吸引力來支持它。

I think it begs the question as to what's going to happen in production as corn and corn basis start to rise as we move into the summer and move closer to the harvest exactly what's going to happen with regards to ethanol supplies and ethanol inventories. And ethanol inventories currently are quite high. But interestingly, even in that high inventory state, we're seeing relatively solid margins on a comparative basis.

我認為這迴避了這樣一個問題，即隨著我們進入夏季並接近收成，隨著玉米和玉米基差開始上升，生產中會發生什麼，乙醇供應和乙醇庫存究竟會發生什麼。乙醇庫存目前相當高。但有趣的是，即使在高庫存狀態下，我們也看到相對穩定的利潤率。

So it's probably part of the reason why -- or it's a large reason why we're actually not comfortable providing or not confident being able to provide good guidance for the next 6 to 9 months. That being said, there's a lot of moving parts and the good news is that there seems to be a lot of support for the product and a lot of transitioning like ourselves out of being as dependent and reliable on that commodity space as we have historically. So fingers crossed.

因此，這可能是部分原因 - 或者這是我們實際上不願意提供或不確定能夠在接下來的 6 到 9 個月內提供良好指導的一個重要原因。話雖這麼說，但有很多活動部件，好消息是，似乎對產品有很多支持，並且像我們一樣有很多轉變，不再像我們歷史上那樣依賴和可靠地依賴商品空間。所以手指交叉。

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

我們的問答環節到此結束。我想將會議轉回 Mike Kandris，聽取任何閉幕詞。

Thank you all, again, for joining us today and for your continued support. We look forward to providing a lot more information on all the details we gave today as we go forward. Thank you again, and have a good rest of your day.

再次感謝大家今天加入我們，感謝您一直以來的支持。我們期待著在我們前進的過程中提供更多關於我們今天提供的所有細節的信息。再次感謝您，祝您度過愉快的一天。

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。