Alto Ingredients Inc (ALTO) 2024 Q2 法說會逐字稿

Good afternoon and welcome to the Alto Ingredients Inc second quarter 2024 financial results conference call. (Operator Instructions) Please note that this event is being recorded. I would now like to turn the conference over to Kirsten Chapman with LHS Investor Relations, a division of Alliance Advisors. Please go ahead.

下午好，歡迎參加 Alto Ingredients Inc 2024 年第二季財務業績電話會議。 （操作員說明）請注意，該事件正在被記錄。我現在想將會議轉交給 Alliance Advisors 旗下 LHS 投資者關係部門的 Kirsten Chapman。請繼續。

Thank you, Kaylee. And thank you all for joining us today for the Alto Ingredients second quarter 2024 results conference call. On the call today are President and CEO, Bryon McGregor and CFO, Rob Olander. Alto Ingredients issued a press release after the market closed today providing details of the company's financial results.

謝謝你，凱莉。感謝大家今天參加我們的 Alto Ingredients 2024 年第二季業績電話會議。今天參加電話會議的有總裁兼執行長 Bryon McGregor 和財務長 Rob Olander。 Alto Ingredients 在今天收盤後發布了一份新聞稿，提供了公司財務表現的詳細資訊。

The company has 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 13, the details of which are included in today's press release. A webcast replay will also be available at Alto Ingredients website.

該公司還為今天的電話會議準備了演示文稿，可在公司網站 altoingredients.com 上查看。今天的電話會議的電話重播將持續到 8 月 13 日，詳細資訊包含在今天的新聞稿中。 Alto Ingredients 網站也將提供網路廣播重播。

Please note that the information on this call speaks only as of today August 6. 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 on slide two of the presentation available online which states that some of the comments in this presentation constitute forward-looking statements and considerations that involve risks and uncertainties.

請注意，本次電話會議中的資訊僅截至今天 8 月 6 日。請參閱線上簡報第二張投影片上的公司安全港，其中指出本簡報中的一些評論構成涉及風險和不確定性的前瞻性陳述和考慮因素。

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.

Alto Ingredients 未來的實際結果可能與這些聲明有重大差異。可能導致或促成此類差異的因素包括但不限於 Alto Ingredients 先前向 SEC 提交的文件中不時揭露的事件、風險和其他因素。

Except as required by applicable law, the company assumes no obligation to update any forward-looking statements. 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 reported.

除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。在管理階層準備好的評論中，將引用非公認會計原則措施。管理層使用這些非公認會計準則衡量標準來監控營運的財務業績，並相信這些衡量標準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 consolidated net income or loss before interest expense, interest income, provision for income taxes, asset impairments, loss and extinguishment of debt, unrealized derivative gains and losses, acquisition-related expense, and depreciation and amortization. To support the company's review of any non-GAAP information, a reconciling table was included in today's press release.

該公司將調整後的EBITDA 定義為扣除利息費用、利息收入、所得稅撥備、資產減損、債務損失和清償、未實現衍生性商品損益、收購相關費用以及折舊和攤銷前未經審計的綜合淨收入或損失。為了支持公司對任何非公認會計原則資訊的審查，今天的新聞稿中包含了一個調節表。

On today's call, Bryon will provide a review of our strategic plan and activities and Rob will comment on our financial results. Then Brian will wrap up and open the call for Q&A. It is now my pleasure to introduce Bryon McGregor. Please go ahead, sir.

在今天的電話會議上，布萊恩將回顧我們的策略計劃和活動，羅布將評論我們的財務表現。然後布萊恩將結束並開始問答環節。現在我很高興向大家介紹布萊恩·麥格雷戈。請繼續，先生。

Thank you, Kirsten. We welcome our investors, valued customers, and other stakeholders joining us today. The Pekin Campus has been producing alcohol for over 150 years through many market cycles. We will continue to produce well into the future. Over the last few years, we've been leaning on our strong balance sheet by utilizing cash flow from operations and excess liquidity to fund capital upgrades and repair and maintenance, to strengthen our facilities and to improve our long-term profitability.

謝謝你，克爾斯滕。我們歡迎投資者、尊貴的客戶和其他利害關係人今天加入我們。北京工廠生產酒精已有 150 多年的歷史，經歷了多個市場週期。未來我們將繼續生產。在過去的幾年裡，我們一直依靠強大的資產負債表，利用營運現金流和過剩流動性為資本升級和維修和維護提供資金，加強我們的設施並提高我們的長期獲利能力。

While these additional expenses can impact our short-term results, our recent efforts are beginning to yield operational improvements and we are confident we will reap long-term benefits. In Q2, our initiatives increased production in our Pekin Campus, positioning us to benefit from improving ethanol margins.

雖然這些額外費用可能會影響我們的短期業績，但我們最近的努力已開始帶來營運改善，我們相信我們將獲得長期效益。第二季度，我們的措施增加了北京園區的產量，使我們能夠從乙醇利潤的提高中受益。

These efforts further demonstrate the advantages of our production facilities located there, including the ability to operate profitably on a consistent basis. More specifically, in Q2, even with over $5 million related to spring outages, our Pekin Campus generated over $10 million of gross profit, up from over $4 million in Q1, reflecting these programs and higher crush margins in June.

這些努力進一步證明了我們位於那裡的生產設施的優勢，包括持續盈利的能力。更具體地說，在第二季度，即使與春季停電相關的費用超過500 萬美元，我們的北京園區仍產生了超過1000 萬美元的毛利，高於第一季的超過400 萬美元，這反映了這些計劃和6 月更高的壓榨利潤。

In Q2 2024, the average Chicago crush margin increased to $0.21 per gallon, compared to just about break-even in Q1 2024. In July, the average Chicago crush margin rose further to $0.48 per gallon. These improvements align with the optimism we expressed on our Q1 call, regarding strengthening crush margins, solid corn supplies and growing export demand.

2024 年第二季度，芝加哥平均壓榨利潤增加至每加侖 0.21 美元，而 2024 年第一季幾乎達到收支平衡。這些改善與我們在第一季電話會議中表達的樂觀情緒一致，即壓榨利潤增加、玉米供應穩定和出口需求不斷增長。

Assuming margins remain strong, we expect to deliver solid financial results in Q3. That said, our consolidated Q2 2024 net loss and adjusted EBITDA were negatively impacted by the cost of our biennial wet mill outage, preventative repairs, and maintenance at all our facilities, lower feed, and carbon prices, particularly with respect to our Columbia facility, and realized losses on hedging activities. Rob will discuss our financial results in greater detail in a moment.

假設利潤率保持強勁，我們預計第三季將實現穩健的財務表現。也就是說，我們的2024 年第二季綜合淨虧損和調整後EBITDA 受到我們所有設施兩年一次的濕磨機停駛、預防性維修和維護成本、較低的飼料和碳價格的負面影響，特別是我們的哥倫比亞設施，並實現了對沖活動的損失。羅布稍後將更詳細地討論我們的財務表現。

To generate more sustainable profitability in the long term, we've been actively expanding our revenue streams. I'll review our operations and strategic initiatives, beginning with carbon capture and storage, or CCS. We'll expect that the regulatory developments and carbon market fluctuations will affect this initiative on an ongoing basis.

為了長期產生更永續的獲利能力，我們一直在積極擴大我們的收入來源。我將回顧我們的營運和策略舉措，從碳捕獲和儲存（CCS）開始。我們預計監管發展和碳市場波動將持續影響這項舉措。

Most recently, Illinois signed into law the Safe CCS Act on July 18, establishing stringent safety, financial and insurance requirements on carbon dioxide pipelines. This act also imposes a moratorium on construction of new carbon pipelines until the Federal Pipeline and Hazardous Materials Safety Administration finalizes its new safety rules, or July 1, 2026, whichever occurs sooner.

最近，伊利諾伊州於 7 月 18 日簽署了《安全 CCS 法案》，對二氧化碳管道製定了嚴格的安全、財務和保險要求。該法案也暫停建造新的碳管道，直到聯邦管道和危險物質安全管理局最終確定新的安全規則，或 2026 年 7 月 1 日（以較早者為準）。

This timing aligns with our current proposed CCS project permitting and construction schedules. We believe the act will add clarity for the industry on CCS projects, although we do anticipate increased compliance and other requirements. The CCS market also remains dynamic. For instance, on the economic front, current prices in the low carbon fuel standard markets are at historic lows, and voluntary carbon markets are nascent.

這一時間安排與我們目前提議的 CCS 專案許可和施工時間表一致。我們相信，該法案將使業界對 CCS 項目更加清晰，儘管我們確實預計合規性和其他要求會增加。 CCS 市場也依然充滿活力。例如，在經濟方面，目前低碳燃料標準市場的價格處於歷史低點，自願性碳市場才剛起步。

As such, it is difficult to project with certainty beyond the value of the 45Q tax credits that begin at $85 a metric ton, what the dollar values of the associated environmental attributes will be over the life of our proposed CCS project. Given our plans to take a capital light approach to this project, we need to align Alto and its various partners' resources to best bear the various risks while retaining the appropriate financial benefits. Given these evolving dynamics, it's important that we bring the right partners to the table. We believe we're doing so effectively as we continue to work collaboratively with Vault and other parties.

因此，除了每噸 85 美元起的 45Q 稅收抵免價值之外，很難確定地預測在我們擬議的 CCS 項目生命週期內相關環境屬性的美元價值是多少。鑑於我們計劃對該專案採取輕資本方式，我們需要調整 Alto 及其各個合作夥伴的資源，以最好地承擔各種風險，同時保留適當的財務利益。鑑於這些不斷變化的動態，我們引入合適的合作夥伴非常重要。我們相信，隨著我們繼續與 Vault 和其他各方合作，我們正在有效地做到這一點。

Moving to operations, as previously discussed, we conducted our biennial wet mill repairs and maintenance outage at the Pekin Campus in April. This scheduled outage was completed on time, within budget, and is now demonstrating improvements over prior operational performance.

轉向運營，如前所述，我們於 4 月在北京園區進行了兩年一次的濕磨機維修和維護停電。這次計畫的停駛在預算範圍內按時完成，目前與先前的營運績效相比有所改善。

For example, we increased production at the wet mill, improving capacity utilization while reducing our fixed costs per unit. The Pekin Campus is now fully operational and taking advantage of the summer driving season economics. We remain on track to achieve 90 million gallons or more of specialty alcohol sales in 2024.

例如，我們增加了濕磨機的產量，提高了產能利用率，同時降低了單位固定成本。北京校區現已全面投入運營，並充分利用夏季駕車季節的經濟優勢。我們仍有望在 2024 年實現 9,000 萬加侖或更多的特種酒精銷售。

We are encouraged by the demand from existing and new customers. We're capitalizing on our proximity to the river, which gives us access to the Gulf and the ability to export product. We're building a second loading dock at our Pekin Campus that will increase barge volume, reduce our overall transportation costs, and provide critical redundancy. We expect the cost of the second dock to be less than $3 million.

我們對現有和新客戶的需求感到鼓舞。我們正在利用靠近河流的優勢，這使我們能夠進入海灣並有能力出口產品。我們正在北京園區建造第二個裝卸碼頭，這將增加駁船數量，降低整體運輸成本，並提供重要的冗餘。我們預計第二個碼頭的成本將低於 300 萬美元。

Now let's pivot to review our western plants. We built these facilities at a time when destination plants delivered a solid and differentiated value proposition. As competition in corn bases increased and carbon values declined, we began investing in these plants to broaden our revenue streams and improve profitability.

現在讓我們回顧一下我們的西方工廠。我們在目的地工廠提供可靠且差異化的價值主張時建造了這些設施。隨著玉米基地的競爭加劇和碳值下降，我們開始投資這些工廠，以擴大我們的收入來源並提高獲利能力。

Ultimately, our goal is to optimize their value, which could include operating them long-term as part of our portfolio of production assets or evaluating the sale of one or both plants. At Magic Valley, we continue to work with our high-protein system vendor Harvesting Technology to produce increased levels of corn oil and higher protein feed products that garner higher prices.

最終，我們的目標是優化它們的價值，其中可能包括將它們作為我們生產資產組合的一部分進行長期運營，或評估一個或兩個工廠的出售。在 Magic Valley，我們繼續與高蛋白系統供應商 Harvesting Technology 合作，生產更高水準的玉米油和更高蛋白質的飼料產品，從而獲得更高的價格。

In January of this year, we hot-idled the plant due to negative regional crush margins and to address the excess water and mass balance challenges that inhibited our ability to operate the plant at capacity and to achieve the target results from our corn oil and high-protein system. We made significant modifications that included the installation of additional equipment and adjustments to the design process flows.

今年1 月，由於區域壓榨利潤為負，我們對工廠進行了熱怠速，以解決過量的水和物料平衡挑戰，這些挑戰抑制了我們工廠滿載運營的能力，也限制了我們通過玉米油和高產量實現目標結果的能力。我們進行了重大修改，包括安裝額外設備和調整設計流程。

Also in Q2, to optimize plant efficiency upon restart, we accelerated routine maintenance activities including tuning other major plant equipment and operating systems, performing routine cleanings, and flushing prior process residuals.

同樣在第二季度，為了優化重啟後的工廠效率，我們加快了日常維護活動，包括調整其他主要工廠設備和操作系統、執行例行清潔以及沖洗先前的製程殘留物。

We resumed operations in early July and are encouraged by the initial results. We expect to increase production rates in the coming weeks as we complete the system upgrades. We intend to do so carefully to ensure the process remains balanced and our products meet quality expectations. We anticipate having a clearer picture with respect to the effectiveness of this system modifications and the general performance of the plant later this summer.

我們於七月初恢復運營，並對初步結果感到鼓舞。當我們完成系統升級時，我們預計將在未來幾週內提高生產力。我們打算謹慎行事，以確保流程保持平衡，並且我們的產品符合品質期望。我們預計今年夏天晚些時候將對系統改造的有效性和工廠的整體性能有更清晰的了解。

In Q2, we significantly improved the production rates at our Columbia plant by addressing centrifuge limitations we experienced in Q1. As a result, we increased capacity utilization rates in Q2 and anticipate further improvements as the summer drying season continues. We're currently working on other ways to improve the facility's profitability and hope to share more information with you over the coming quarters.

在第二季度，我們透過解決第一季遇到的離心機限制，顯著提高了哥倫比亞工廠的生產力。因此，我們提高了第二季的產能利用率，並預計隨著夏季乾燥季節的持續，產能利用率將進一步提高。我們目前正在研究其他方法來提高該設施的盈利能力，並希望在未來幾季與您分享更多資訊。

Before I turn the call to Rob, I'd like to note that customers have indicated their support of our efforts to continue to improve our sustainability and lower our carbon footprint. In July, our ICP and Pekin Plants received the 2024 Bronze Medal Sustainability Rating from EcoVadis, which honors the top 35% of companies assessed.

在打電話給 Rob 之前，我想指出，客戶已表示支持我們繼續提高永續性和降低碳足跡的努力。 7 月，我們的 ICP 和北京工廠獲得了 EcoVadis 頒發的 2024 年永續發展銅牌，該評級表彰了評估中排名前 35% 的公司。

EcoVadis is a globally recognized business sustainability rating service that sets corporate sustainability standards. Now I'll turn the call to Rob.

EcoVadis 是全球公認的企業永續發展評級服務機構，旨在製定企業永續發展標準。現在我將把電話轉給羅布。

Thanks, Bryon. I'll review the financial results for the second quarter of 2024 compared to the second quarter of 2023. During Q2 2024, we sold 95.1 million gallons, relatively consistent with 94.4 million gallons sold during Q2 of 2023. However, due to lower market prices in 2024, Q2 2024 net sales were $236 million compared to $317 million in Q2 2023.

謝謝，布萊恩。我將回顧2024 年第二季度與2023 年第二季度的財務業績。較低，到 2024 年，2024 年第二季的淨銷售額為 2.36 億美元，而 2023 年第二季的淨銷售額為 3.17 億美元。

Although ethanol prices decreased, crush margins remain consistent. Therefore, lower ethanol prices did not materially impact gross profit. In fact, during Q2 2024, our Pekin Campus contributed over $10 million to gross profit, even after considering its average costs, loss production margins, and derivative losses. Total gross profit per quarter was $7.6 million, down $9.6 million from Q2 2023, yet up over $10 million from Q1 2024.

儘管乙醇價格下跌，但壓榨利潤保持穩定。因此，乙醇價格下跌並未對毛利產生重大影響。事實上，在 2024 年第二季度，即使考慮到平均成本、生產利潤損失和衍生性商品損失，我們的北京園區仍為毛利貢獻了超過 1,000 萬美元。每季總毛利為 760 萬美元，比 2023 年第二季減少 960 萬美元，但比 2024 年第一季增加超過 1,000 萬美元。

Various factors impacted our gross profit and bottom line results. While our essential ingredients return improved 46% in Q2 of 2024 compared to 38% a year ago, revenues decreased in Q2 2024 compared to Q2 2023. This is largely the result of a compression on protein prices due to an increase in soybean meal supply, a consequence of production growth and soy crush driven by the demand for renewable diesel.

各種因素影響了我們的毛利和淨利。雖然我們的基本原料回報率在2024 年第二季度比一年前提高了46%，但與2023 年第二季度相比，2024 年第二季度的收入有所下降。導致蛋白質價格壓縮的結果，這是再生柴油需求推動的產量成長和大豆壓榨的結果。

Next, renewable fuel revenue and bottom line results at our Columbia plant were negatively impacted by historic low carbon market pricing. Additionally, as Bryon outlined on our last call, in Q2 we completed repairs and maintenance initiatives, including our Pekin wet mill outage, to improve our operational performance heading into Q3.

其次，我們哥倫比亞工廠的再生燃料收入和利潤受到歷史低碳市場定價的負面影響。此外，正如布萊恩在我們上次電話會議中所概述的那樣，我們在第二季度完成了維修和維護計劃，包括北京濕磨機的停機，以提高我們進入第三季度的營運績效。

It's important to note that costs associated with wet mill outages are more substantial than those for dry grind facilities due to the nature and extent of the maintenance activities, the extended downtime required, and the opportunity costs.

值得注意的是，由於維護活動的性質和範圍、所需的較長停機時間以及機會成本，與濕磨設備停機相關的成本比乾磨設備的成本更高。

The biennial outage cost $3.6 million and the planned ICP outage cost $1.8 million in Q2 2024. This does not include lost revenue associated with approximately $3.5 million fewer production gallons. During Q2, on a consolidated basis, we recorded $11.3 million in repairs and maintenance expense, including a portion of the outage costs, and we remain on track for our 2024 estimate of $34 million in total repairs and maintenance expense for all plants.

每兩年一次的停電造成了 360 萬美元的損失，計劃中的 ICP 停電在 2024 年第二季度造成了 180 萬美元的損失。在第二季度，在合併基礎上，我們記錄了 1,130 萬美元的維修和維護費用，包括部分停電成本，我們仍有望實現 2024 年所有工廠總維修和維護費用為 3,400 萬美元的估計。

Finally, realized derivative losses for Q2 2024 were $2.9 million compared to $5.5 million in realized derivative gains for the same quarter in 2023. As covered previously, we employ a variety of risk management strategies to mitigate the price volatility of different commodities throughout the year as a normal course of business.

最後，2024 年第二季已實現的衍生性商品損失為290 萬美元，而2023 年同一季度已實現的衍生性商品收益為550 萬美元。不同商品的價格波動：正常的業務過程。

Our consolidated net loss for Q2 2024 was $3.1 million compared to net income of $7.6 million in Q2 of 2023. Adjusted EBITDA for Q2 2024 was negative $5.9 million, including $3.6 million in costs related to our wet mill outage and the $2.9 million in realized losses on derivatives. This compares to positive adjusted EBITDA of $14 million, including $5.5 million in realized derivative gains in Q2 2023.

我們2024 年第二季的合併淨虧損為310 萬美元，而2023 年第二季的淨利為760 萬美元。相關的360 萬美元成本和已實現虧損290 萬美元關於衍生性商品。相比之下，調整後的 EBITDA 為 1,400 萬美元，其中包括 2023 年第二季已實現的衍生性商品收益 550 萬美元。

As of June 30, our cash balance was $27 million and our total loan borrowing availability was $95 million, including $30 million dollars under our operating line of credit and $65 million subject to certain conditions under our term loan facility. In Q2 2024, we used $13.7 million in our operating activities, bringing the year-to-date total to a net use of $12.3 million.

截至6 月30 日，我們的現金餘額為2,700 萬美元，可用貸款總額為9,500 萬美元，其中包括我們經營信貸額度下的3,000 萬美元和定期貸款安排下的6,500 萬美元，但須符合某些條件。 2024 年第二季度，我們的營運活動使用了 1,370 萬美元，使年初至今的淨使用總額達到 1,230 萬美元。

We invested $4.7 million in CapEx, bringing the year-to-date total to $9.3 million, in line with our $25 million plan for 2024. As Bryon noted, we are pleased with the margins in July and if they remain strong and we continue to meet our production targets, we expect to deliver positive adjusted EBITDA for Q3.

我們在資本支出上投資了470 萬美元，使今年迄今為止的總額達到930 萬美元，符合我們2024 年2500 萬美元的計劃。保持強勁，我們將繼續達到我們的生產目標，我們預計第三季將實現正調整後的 EBITDA。

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

說完，我會把電話轉回給布萊恩。

Thank you, Rob. We've been executing our plan to improve our profitability and leverage our strengths and opportunities. The major planned outages we completed in the second quarter position us to benefit from positive crush margins in the second half of 2024. We're excited to see our initiatives come to fruition, bolstering our ability to continue to serve our customers for many years to come.

謝謝你，羅布。我們一直在執行我們的計劃，以提高我們的盈利能力並利用我們的優勢和機會。我們在第二季度完成的重大計劃停運使我們能夠在2024 年下半年從積極的壓榨利潤中受益。能力來。

Operator, we're ready to begin Q&A.

接線員，我們準備開始問答。

(Operator Instructions) Sameer Joshi, H.C. Wainwright.

（操作員說明） Sameer Joshi, H.C.溫賴特。

Hey, good afternoon, guys. Thanks for taking my questions. Let me start with the last point you discussed about the CapEx of $25 million on target or in line with the guidance. So far, you have spent $9.3 million. What is the rest of the CapEx slated for this second half?

嘿，下午好，夥計們。感謝您回答我的問題。讓我從您討論的最後一點開始，即目標或符合指導的 2500 萬美元資本支出。到目前為止，您已經花費了 930 萬美元。下半年預計剩餘的資本支出是多少？

Yeah, sure. We've got a variety of different CapEx projects that we've reviewed and approved that we have planned for later this year. I will note that we've spent less year-to-date, but there's also more spend slated in the second half of 2024.

好，當然。我們已經審查並批准了各種不同的資本支出項目，並計劃在今年稍後實施。我要指出的是，我們今年迄今的支出有所減少，但 2024 年下半年的支出也會增加。

Any particular areas you're focused on for that?

有什麼特別關注的領域嗎？

One of the areas involves, the things that we talked about before, increasing plant efficiencies, upgrading various systems, things like that.

其中一個領域涉及我們之前討論過的事情，提高工廠效率，升級各種系統，諸如此類的事情。

We'll also include the $3 million from the new pipeline, right, the new load-out or loading facility. Right, the new alcohol dock.

我們還將包括來自新管道（右）、新裝卸設施的 300 萬美元。對了，新的酒精碼頭。

Got it. And then these various upgrades that are being done, and you talked about increasing capacity utilization at each of, as a result of each of these maintenance and upgrades. Is there a quantifying -- like can you quantify it, like what levels were you achieving before and what are the expected levels for, say, 3Q and 4Q of utilization of these plants?

知道了。然後，這些正在進行的各種升級，您談到了由於每次維護和升級而提高的容量利用率。是否有量化——比如你能量化它嗎，比如你之前達到了什麼水平，以及這些工廠第三季度和第四季度的利用率的預期水平是多少？

So, Samir, it depends on what we're talking about, and that's why we didn't provide specific details in the prepared remarks, but what we're overall seeing is somewhere between 10% and 15% improvements from production prior to the event. And it just, again -- it depends. As an example, we've seen about a 10% improvement in ethanol production.

所以，Samir，這取決於我們正在談論的內容，這就是為什麼我們沒有在準備好的評論中提供具體細節，但我們總體看到的是，與發布之前相比，生產有了10% 到15%的改進。再說一次——這要看情況。例如，我們發現乙醇產量提高了約 10%。

Overall, that would include both specialty and beverage -- I'm sorry, specialty and fuel, but it would also, and we've seen up to 15% improvements in essential ingredients. A lot of our quality essential products that come out, including yeast, that come out of the wet mill. So, overall, very pleased, and we hope to see continued improvement in that over the -- as we continue to further line out the operations.

總的來說，這將包括特色產品和飲料——對不起，是特色產品和燃料，但它也會，而且我們已經看到基本成分的改進高達 15%。我們生產的許多優質必需產品（包括酵母）均來自濕磨機。因此，總的來說，我們非常高興，隨著我們繼續進一步規劃運營，我們希望看到這方面的持續改進。

Great. Thanks for that, color. And then, just one clarification, maybe the OpEx was up slightly. I know that these other costs are not drawn through the OpEx line, but was there a reason for this slight bump in OpEx, SG&A?

偉大的。謝謝你，顏色。然後，只需澄清一點，也許營運支出略有上升。我知道這些其他成本不是透過營運支出線計算的，但是營運支出、SG&A 略有上升是否有原因？

Yes, we're here. Sorry. -- Yeah, I mean, there's a lot going in into the other OpEx category. One thing to note is until we've officially approved the path forward related to our carbon capture and storage project, some of the upfront costs run through that line item.

是的，我們在這裡。對不起。 ——是的，我的意思是，其他營運支出類別還有很多內容。需要注意的一件事是，在我們正式批准與碳捕獲和儲存專案相關的前進道路之前，一些前期成本將通過該專案進行。

Okay, thanks.

好的謝謝。

That activity is clearly picked up -- Samir, sorry, that activity is clearly picked up year-over-year, and so that would account for the material portion of it.

這項活動顯然有所增加——薩米爾，抱歉，這項活動顯然逐年增加，因此這將佔其中的實質部分。

Okay, thanks, I'll take my other questions offline.

好的，謝謝，我會離線回答其他問題。

Eric Stine, Craig-Hallum Capital Group.

艾瑞克‧史坦（Eric Stine），克雷格-哈勒姆資本集團。

Hey, so just on carbon capture, so I can appreciate, the timeline in July 1, '26 and how that matches up, but I also know, there are a number of steps that were targeted kind of in the interim, so just curious how you think about that, how your partners are thinking about that, the various steps, whether it's the class six permit, negotiating with those financing partners, and thinking about an investment in your region versus maybe some other region where they're not running into the same issues, so just some thoughts on that would be great.

嘿，所以只是關於碳捕獲，所以我可以欣賞 26 年 7 月 1 日的時間表以及它是如何匹配的，但我也知道，在此期間有一些目標步驟，所以只是好奇您如何看待這個問題，您的合作夥伴如何考慮這個問題，各個步驟，是否是六級許可證，與那些融資合作夥伴談判，並考慮在您所在的地區進行投資，而不是在他們沒有經營的其他地區進行投資面對同樣的問題，所以只要對此有一些想法就很好了。

Sure, so as I mentioned in our prepared remarks, we think we picked the right partners, we're working, diligently ahead, they've been very collaborative and cooperative, clearly having to address issues as they arise, as an example, the Safe CCS Act that recently was enacted in Illinois, and pivoting and addressing those issues, and not to fully reiterate what was in the prepared remarks, but maybe from additional color is that -- there are -- in the capital light approach, there are risks that and adjustments that you need to make that you would otherwise wouldn't need to make if you were just doing it all on balance sheet, right?

當然，正如我在準備好的發言中提到的，我們認為我們選擇了正確的合作夥伴，我們正在努力，努力前進，他們非常協作和合作，顯然必須在出現問題時解決問題，例如，最近在伊利諾伊州頒布的《安全CCS 法案》，並圍繞和解決這些問題，並沒有完全重申準備好的發言中的內容，但也許從額外的角度來看，在資本燈方法中，有如果您只是在資產負債表上進行所有操作，則不需要進行這些風險和調整，對吧？

I think that we have those parties that are there and best suited to be able to handle those risks, but it's also doing it in an organized way so that you're not assuming risks that you otherwise don't need to take beforehand, so as an example, if you think about the class six permit, that's a two-year program, right?

我認為我們有最適合處理這些風險的相關方，但它也是以有組織的方式進行的，這樣你就不會承擔本來不需要事先承擔的風險，所以舉個例子，如果你考慮六級許可證，那是一個為期兩年的項目，對吧？

At a minimum from EPA, and you have to make decisions as to when you want to start to do your purchasing for compression -- do you assume that, do you start right out of the box and start ordering that before you have your class six permits, or do you wait until you've got your class six permit approved and submitted, and awaiting final approval, and some of those other processes need to be in place, so those are all the things that are going into consideration.

至少從 EPA 開始，您必須決定何時開始購買壓縮設備 - 您是否認為，您是否從開箱即用開始並在獲得六級之前開始訂購許可證，還是等到六級許可證獲得批准並提交，並等待最終批准，並且其他一些流程需要到位，所以這些都是要考慮的事情。

There are a number of parties out there that are willing to sell, as an example, their carbon credits or the environmental attributes well in advance to finance their terms, is that the appropriate approach, and are you giving up too much, or do you try and retain those values and wait for those to come in the future, so those are all things -- that are a few things that come into come into the calculus when you're working through this process, so I don't know if that's helpful, Eric, but it's (multiple speakers) again, trying to find balance and risk and return.

例如，有許多各方願意提前出售他們的碳信用或環境屬性來為其條款融資，這是適當的方法，你是否放棄太多，或者你是否嘗試保留這些值並等待它們在將來出現，所以這些就是所有的東西- 這是當你完成這個過程時進入微積分的一些東西，所以我不知道是否這很有幫助，埃里克，但（多個發言者）再次試圖找到平衡以及風險和回報。

Sure, I mean, but net effect, you do feel, whether it's with Vault or with some of the financial partners that you are in negotiations with, that those are the right parties that are willing to deal with that, with the needed flexibility, just given the situation.

當然，我的意思是，但最終的效果是，你確實覺得，無論是與 Vault 還是與你正在談判的一些金融合作夥伴，這些都是願意以所需的靈活性處理這個問題的合適各方，剛剛給出的情況。

Correct.

正確的。

Okay, all right, appreciate that, and then maybe, just turning to Magic Valley, so good to hear that you've got the restart, and it's been going for, one a month or so, -- just curious, like, what it sounds like you're taking the right approach to be measured in it, but what do you kind of need to see, to where you're convinced that you're on the right track, and, is it, does this push out a little bit the decision in terms of maybe rolling this technology out to other plants?

好吧，好吧，欣賞這一點，然後也許，只是轉向魔谷，很高興聽到你已經重新啟動，而且它已經持續了大約一個月一次，--只是好奇，就像，什麼聽起來你正在採取正確的方法來衡量它，但你需要看到什麼，到你確信你走在正確的軌道上，是嗎，這是否會推動是否決定將該技術推廣到其他工廠？

So, we are pleased with what we've seen so far, that the steps that we took to expand and add additional equipment, to be able to give additional leniency into the process, so that you don't have to have everything out aligned fully all the time, was important, and we're seeing the value of that today, probably running at around 70% capacity today.

因此，我們對迄今為止所看到的情況感到滿意，我們採取了擴大和添加額外設備的步驟，以便能夠對流程給予額外的寬容，這樣您就不必讓一切都保持一致始終充分利用這一點很重要，我們今天看到了它的價值，今天可能以70% 左右的容量運行。

So to achieve, six, what we would define as successes is being able to achieve maximum capacity that we saw before we implemented the project, and be able to achieve the goals and the targets that we had established with harvesting technology, to put in the tech -- into the, put that system into place.

因此，為了實現第六點，我們對成功的定義是能夠實現我們在實施專案之前看到的最大容量，並能夠實現我們利用收穫技術制定的目標和目標，將技術——進入，將該系統落實到位。

Given as to answer your question with regards to other applications within our -- within the portfolio of assets that we have, it's certainly an open option still, but I think that we are, we think it's prudent, and to be measured, and to see the success through -- not only because we've been waiting a long time, but so have investors to see the results of this investment, so we want to see that through before we make any comments or decisions with regards to what we're going to do going forward at our other sites.

鑑於回答您關於我們擁有的資產組合內的其他應用程式的問題，這當然仍然是一個開放的選擇，但我認為我們是，我們認為這是謹慎的，並且需要衡量，並且看到成功——不僅因為我們已經等待了很長時間，而且投資者也看到了這項投資的結果，所以我們希望在對我們的內容做出任何評論或決定之前先看到這一點。開展工作。

Okay, thanks a lot.

好的，非常感謝。

Thanks, Eric.

謝謝，埃里克。

(Operator Instructions) Justin Dopierala, DOMO Capital Management.

（操作員指示）Justin Dopierala，DOMO 資本管理公司。

Hey, guys, thanks for taking my questions. Just to tack on to that last thing, in the prepared remarks, you mentioned that you're expecting a Magic Valley update later this summer. Is that something that would be prior to your next earnings call, then?

嘿，夥計們，謝謝你回答我的問題。補充最後一件事，在準備好的評論中，您提到您預計今年夏天晚些時候會發布《魔谷》更新。那麼，這會是你下次財報電話會議之前的事嗎？

It's a good question. We'll, to the extent that there's material disclosure, yeah, we'll make sure that we do that. Otherwise, it may line out, appropriately with the third quarter call. If you think about it, you're not only talking about reaching, -- achieving capacity, but really what you're also talking about is being able to place your product and get the penetration that you were hoping for with regards to higher proteins and corn oil and placement of that product. So whether it's -- I guess what we'd like to say is let's play it by ear, but we'll make sure that we provide information as appropriate.

這是一個好問題。在有重大揭露的情況下，我們會確保這樣做。否則，它可能會與第三季的電話會議一致。如果你仔細想想，你不僅在談論達到能力，而且實際上你也在談論能夠放置你的產品並獲得你所希望的更高蛋白質的滲透和玉米油以及該產品的放置。因此，我想我們想說的是，讓我們見機行事，但我們將確保提供適當的資訊。

Okay, and I imagine the success of that would probably go a long ways towards your ability to be able to monetize the Western assets as well. Would that be fair to say?

好吧，我想這件事的成功可能會對你將西方資產貨幣化的能力大有幫助。這樣說公平嗎？

Well, it certainly wouldn't hurt.

嗯，這當然不會有什麼壞處。

Absolutely.

絕對地。

It doesn't hurt us either to have that asset on, right? I mean, these are unique assets. So, we want to make sure that we maximize value for shareholders, whether it's, whichever way it is.

擁有該資產也不會傷害我們，對嗎？我的意思是，這些都是獨特的資產。因此，我們希望確保為股東實現價值最大化，無論是哪種方式。

Okay, and you highlighted the shutdown costs of Pekin. I was wondering if you could quantify the impact of Magic Valley being idled as well, as far as that Western gross margin.

好的，您強調了北京的關閉成本。我想知道您是否可以量化魔穀閒置對西方毛利率的影響。

Yeah, we don't typically provide those levels of specifics, but if you recall, we chose to bring the plant down earlier this year when the crush margin environment was less favorable. And so, in large, that kind of offset our operating losses, which kind of also underscores, the reason why we're incorporating this technology, which is to improve our profitability and our crush margins in more challenging market environments. So, it's kind of hard to, quantify, the lost opportunity cost in that case.

是的，我們通常不會提供這些等級的細節，但如果您還記得的話，我們選擇在今年稍早關閉工廠，當時壓榨利潤環境不太有利。因此，總的來說，這抵消了我們的營運損失，這也強調了我們採用這項技術的原因，這是為了在更具挑戰性的市場環境中提高我們的獲利能力和壓榨利潤。因此，在這種情況下很難量化損失的機會成本。

Got it. And I guess just my last question for you guys is -- as you noted, in July crush margins have doubled. So, I was a little bit surprised by your guidance of positive, adjusted EBITDA versus, coming out and, announcing or guiding towards, positive net income. Are there any major Q3 uncapitalized costs we should be aware of, or are you guys just being ultra conservative?

知道了。我想我要問你們的最後一個問題是──正如你們所指出的，7 月的壓榨利潤翻了一番。因此，我對你們對調整後的正 EBITDA 的指導與公佈或宣布或指導的正淨利潤的指導感到有點驚訝。我們是否應該注意第三季的主要未資本化成本，或者你們只是過於保守？

No, I'll take that one. Yeah, I mean, just -- we try to be conservative, but also transparent in what's going on. Our comments stem from July being behind us now and us being, pleased with the financial results. As we stated on the call, as long as our, the crush margins remain strong and we continue to produce at the levels we are, it should be a very favorable quarter.

不，我要那個。是的，我的意思是，我們盡量保持保守，但對正在發生的事情也保持透明。我們的評論源自於七月已經過去，我們對財務表現感到滿意。正如我們在電話會議上所說，只要我們的壓榨利潤保持強勁並且我們繼續保持現有水平的生產，這應該是一個非常有利的季度。

Okay, thank you.

好的謝謝。

But keep in mind, we operate in the commodity markets, and so, things happen flow.

但請記住，我們在商品市場中運作，因此，事情會發生流動。

And there's some things that just, we're beyond the impact net income that you may or may not be able to control. As an example, your realized gains and losses and unrealized gains and losses and derivatives and the like. So, probably falls in the conservative camp.

有些事情超出了您可能無法控制的淨收入影響。例如，您的已實現損益和未實現損益以及衍生性商品等。所以，很可能是屬於保守陣營。

Okay, thank you.

好的謝謝。

Under promise over deliver.

承諾勝於交付。

All right, hold you to it.

好吧，堅持住。

I know you will.

我知道你會的。

This concludes our question and answer session. I would like to turn the conference back over to Bryon McGregor for any closing remarks.

我們的問答環節到此結束。我想將會議轉回由布萊恩·麥格雷戈發表閉幕詞。

Thank you, Kaylee. Thanks, everyone, for joining us today. In September, we hope to see you at the H.C. Wainwright Annual Conference. We appreciate your ongoing feedback and support. Have a good day.

謝謝你，凱莉。謝謝大家今天加入我們。九月，我們希望在 H.C. 見到您。溫賴特年會。我們感謝您持續的回饋和支持。祝你有美好的一天。

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。您現在可以斷開連線。