Alto Ingredients Inc (ALTO) 2025 Q1 法說會逐字稿

Good day and welcome to the Alto Ingredients first-quarter 2025 financial results conference call. (Operator Instructions) Please note this event is being recorded.

大家好，歡迎參加 Alto Ingredients 2025 年第一季財務業績電話會議。（操作員指示）請注意，此事件正在被記錄。

I'd now like to turn the conference over to Kirsten Chapman, Alliance Advisors, Investor Relations. Please go ahead.

現在我想將會議交給 Alliance Advisors 投資者關係部門的 Kirsten Chapman。請繼續。

Thank you, Darcy, and thank you, all, for joining us today for the Alto Ingredients first-quarter 2025 results conference call. On the call today are President and CEO, Bryon McGregor; and CFO, Rob Olander.

謝謝達西，也謝謝大家今天參加 Alto Ingredients 2025 年第一季業績電話會議。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 issued a press release after market close today, providing details of the company's financial results for the first quarter of 2025. The company also prepared a presentation for today's call that is available on the company's website at altoingredients.com.

Alto Ingredients 在今天收盤後發布了一份新聞稿，詳細介紹了該公司 2025 年第一季的財務表現。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 May 14, the details of which are included in today's press release. A webcast replay will also be available on Alto Ingredient's website. Please note that the information on this call speaks only as of today, May 7. You are advised that any time sensitive information may no longer be accurate at the time of any replay.

今天的電話會議重播將持續到 5 月 14 日，詳細資訊已包含在今天的新聞稿中。Alto Ingredient 的網站上也將提供網路直播重播。請注意，本次通話中的資訊僅截至今天（5 月 7 日）有效。請注意，任何時間敏感資訊在重播時可能不再準確。

Please refer to the company's Safe Harbor statement on slide 2 of the presentation available online, which states that some of the comments in this presentation constitute forward-looking statements and considerations that involve risks and uncertainty.

請參閱線上簡報第 2 張投影片上的公司安全港聲明，其中指出本簡報中的某些評論構成涉及風險和不確定性的前瞻性陳述和考慮。

The actual future results of the 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 for the SEC. Except as required by applicable law, the company assumes no obligation to update any forward-looking statement.

Alto Ingredients 的未來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 之前和不時向美國證券交易委員會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，本公司不承擔更新任何前瞻性聲明的義務。

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 reported. The company defines adjusted EBITDA as consolidated net income or loss before interest expense, interest income, provision for income taxes, asset impairments, unrealized derivative gains and losses, acquisition related expense, and depreciation and amortization expense. To support the company's review of non-gap information, a reconciling table was included in today's press release.

在管理階層準備好的評論中，將會引用非公認會計準則 (non-GAAP) 指標。管理階層使用這些非公認會計準則指標來監控經營活動的財務表現，並相信這些指標將有助於投資者評估公司在報告期間的表現。該公司將調整後的 EBITDA 定義為扣除利息費用、利息收入、所得稅準備金、資產減損、未實現衍生性商品損益、收購相關費用以及折舊和攤銷費用前的合併淨收入或虧損。為了支持公司對非差距資訊的審查，今天的新聞稿中包含了一個對帳表。

On today's call, Bryon will provide a review of our strategic plan and activities. Rob will comment on our financial results, and Bryon will wrap up and open the call for Q&A.

在今天的電話會議上，布萊恩將回顧我們的策略計畫和活動。Rob 將對我們的財務結果進行評論，而 Bryon 將進行總結並開始問答環節。

It's now my pleasure to introduce Bryon McGregor. Please go ahead, sir.

現在我很高興介紹布萊恩麥格雷戈。先生，請繼續。

Thank you, Kirsten, and thank you all for joining us today. During Q1 2025, gross margin and adjusted EBITDA improved compared to Q1 2024. This reflects our operational uptime and our carbon optimization initiative driven by our acquisition on January 1st of a beverage-grade liquid carbon dioxide processing plant adjacent to our Columbia facility.

謝謝你，Kirsten，也謝謝大家今天加入我們。2025 年第一季度，毛利率和調整後 EBITDA 與 2024 年第一季相比有所提高。這反映了我們的營運正常運作時間和碳優化計劃，該計劃由我們於 1 月 1 日收購了毗鄰我們哥倫比亞工廠的飲料級液態二氧化碳加工廠所推動。

The combined ownership of both assets has reduced management and staffing costs while enhancing operational coordination and overall productivity. We continue our optimization efforts, which should facilitate longer-term feed sales commitments and expand premium liquid CO2 sales. As expected, this acquisition improved the Columbia facility's economics and increased its asset valuation.

兩項資產的合併所有權降低了管理和人員成本，同時增強了營運協調性和整體生產力。我們將繼續進行優化努力，這將有助於長期飼料銷售承諾並擴大優質液體二氧化碳的銷售。正如預期的那樣，此次收購改善了哥倫比亞工廠的經濟狀況並提高了其資產估值。

Also, we rightsize staffing to align with our current footprint. During Q4 and Q1, we reduced headcount by a total of 16%. As a result, we expect to save approximately $8 million annually, with the financial benefits starting in Q2.

此外，我們也調整了人員配置以適應我們目前的規模。在第四季和第一季度，我們總共裁減了 16% 的員工人數。因此，我們預計每年可節省約 800 萬美元，並從第二季開始獲得財務效益。

Although we have completed our planned reorganization, we will continue to evaluate opportunities to produce expenses. We are prioritizing quick return projects including water and energy optimization that would reduce utility costs and lower our carbon footprint.

儘管我們已經完成了計劃中的重組，但我們將繼續評估產生費用的機會。我們正在優先考慮快速回報項目，包括水和能源優化，以降低公用事業成本並減少我們的碳足跡。

Results of operations at our Pekin Campus helped to illustrate Pekin's flexibility to shift production quickly to capitalize on market trends. For example, to diversify our revenue streams, we earned our ISCC certification in late last summer and began exporting qualified renewable fuel to the European markets beginning in the fourth quarter.

我們北京園區的營運結果有助於說明北京能夠靈活地快速調整生產以利用市場趨勢。例如，為了實現收入來源多元化，我們在去年夏末獲得了 ISCC 認證，並從第四季開始向歐洲市場出口合格的再生燃料。

This certification has enabled us to access higher margin sales during the first quarter. We experience solid demand for ISCC-certified renewable fuel price at a premium to domestic fuel grade ethanol. We grew ISCC sales as a percentage of our total renewable fuel volume sold at our Pekin Campus in Q1.

此項認證使我們在第一季獲得了更高的利潤銷售。我們發現，ISCC 認證的再生燃料需求強勁，其價格高於國內燃料級乙醇。第一季度，ISCC 銷售額占我們北京園區再生燃料總銷售額的百分比增加。

As a result, ISCC sales partially offset some domestic market challenges. Premiums on domestic high-quality alcohol were generally lower in Q1 than in the same quarter last year, reflecting increased competition in the market. Also, prices for essential ingredients declined because of the rise in soybean oil supply to support renewable diesel demand.

因此，ISCC 的銷售部分抵消了國內市場的一些挑戰。第一季國內優質酒類溢價普遍低於去年同期，反映市場競爭加劇。此外，由於大豆油供應增加以支持再生柴油需求，基本成分的價格也下降。

In late March and early April, we completed our scheduled seasonal outages at the Pekin facilities. The repairs and maintenance successfully achieved our goal of sustaining the improved plant utilization rate set a year ago.

三月底和四月初，我們完成了北京工廠計畫的季節性停產。維修和保養成功實現了我們維持一年前設定的提高的工廠利用率的目標。

Also in early April, during a period of rapidly rising river levels, our peak and load out dock was damaged, negatively impacting production, logistics, and campus economics. We implemented temporary solutions and we are now back to full operation. We are currently assessing our long-term remediation options and working with our insurance carrier to mitigate the financial impact. We'll provide further updates on our next call.

同樣在 4 月初，在河水水位快速上漲期間，我們的高峰和裝卸碼頭遭到破壞，對生產、物流和校園經濟產生了負面影響。我們實施了臨時解決方案，現在已恢復全面運作。我們目前正在評估我們的長期補救方案，並與我們的保險公司合作以減輕財務影響。我們將在下次通話中提供進一步的更新。

Now I'll review market and regulatory trends. So far in 2025, we've experienced typical seasonal market patterns which spreads between corn and ethyl prices comparable year over year. These crush margins improved sequentially each month over the first quarter. We've seen spread improvements in April resulting from lower production rates associated with industry-wide scheduled spring plant outages. Nonetheless, margin expansion has been kept largely in check by high inventory levels, with production outpacing demand.

現在我將回顧市場和監管趨勢。到 2025 年為止，我們經歷了典型的季節性市場模式，玉米和乙基價格之間的價差逐年可比。與第一季相比，壓榨利潤率每個月都逐月增加。由於全行業春季工廠計畫停工導致生產力下降，我們看到 4 月價差有所改善。儘管如此，由於產量超過需求，利潤率的擴張在很大程度上受到高庫存水準的抑制。

Without a meaningful reduction in ethanol supply, substantial crush spread improvements may be constrained. And although we are optimistic that margins will continue to improve with increases in demand from the summer driving season, concerns over tariffs and Chinese vessel restrictions have introduced greater export uncertainty. While these macro events are largely beyond our control, we will continue to minimize the impact as effectively as possible.

如果乙醇供應沒有顯著減少，壓榨價差的大幅改善可能會受到限制。儘管我們樂觀地認為，隨著夏季駕駛季節需求的增加，利潤率將繼續提高，但對關稅和中國船舶限制的擔憂帶來了更大的出口不確定性。雖然這些宏觀事件在很大程度上是我們無法控制的，但我們將繼續盡可能有效地將影響降至最低。

On a positive note, as I mentioned earlier, we've seen solid exports date. In addition, we applaud the EPA's recent E15 fuel waiver allowing blending through May 20. While this is temporary, it is expected that the agency will issue new waivers, effectively extending the allowance through the summer. Further, we're optimistic that pending national legislation will be passed later this year, resulting in long sought-after permanent adoption nationwide.

從積極的一面來看，正如我之前提到的，我們看到了穩健的出口數據。此外，我們讚賞美國環保署最近頒布的允許混合燃料至 5 月 20 日的 E15 燃料豁免令。雖然這是暫時的，但預計該機構將發布新的豁免，從而有效地將津貼延長至整個夏季。此外，我們樂觀地認為，即將出台的國家立法將在今年稍後通過，從而實現全國範圍內長期尋求的永久採用。

There's also growing support for E15 adoption in California. The California Assembly recently passed a bill aimed at accelerating the approval process for E-15 fuel blends. Governor Newsom has also directed the California Air Resources Board to expedite its review, citing potential benefits such as lower gas prices and reduced emissions.

加州對採用 E15 的支持也日益增多。加州議會最近通過了一項旨在加快 E-15 燃料混合物審批流程的法案。紐森州長也指示加州空氣資源委員會加快審查，理由是這樣做可能帶來諸如降低油價和減少排放等好處。

According to the latest EIA reports, California's 13.4 billion gallons of annual fuel consumption represents 11.6% of the national volume, a 5 percentage point increase from 10% to 15% in ethanol blend that in California alone would result in an additional 670 million gallons sold annually. Further, it is estimated that the national adoption of year-round E15 blending could boost ethanol demand by 5 billion to 7 billion gallons.

根據最新的 EIA 報告，加州每年的燃料消耗量為 134 億加侖，佔全國總量的 11.6%，如果使用乙醇混合物，則從 10% 增加到 15%，增加了 5 個百分點，僅加州一地，每年的銷量就將增加 6.7 億加侖。此外，據估計，全國全年採用 E15 混合燃料可能會使乙醇需求增加 50 億至 70 億加侖。

In short, since the US has approximately 18 billion gallons of ethanol production capacity and domestic demand of approximately 14.4 billion gallons currently, the national adoption of year-round E15 combined with strong exports would utilize over time much of the excess capacity and produce greater margin stability.

簡而言之，由於美國目前擁有約 180 億加侖的乙醇生產能力，而國內需求約為 144 億加侖，因此，全國全年採用 E15 加上強勁的出口將隨著時間的推移利用大部分過剩產能並產生更大的利潤穩定性。

Beyond the demand side, we believe E-15 adoption would also have positive economic and environmental impacts: reducing greenhouse gas emissions, supporting farmers, and lowering consumer fuel costs.

除了需求方面，我們相信 E-15 的採用也將產生積極的經濟和環境影響：減少溫室氣體排放、支持農民並降低消費者燃料成本。

Turning to our Pekin Campus, Illinois Bill SB 1723 is under consideration to prevent CO2 sequestration activity that overlies, underlies or passes through a sole source aquifer. This would include the Mahomet Aquifer, which underlies multiple counties throughout the state, including an area currently contemplated for storage in our Class 6 permit application.

談到我們的北京校區，伊利諾伊州 SB 1723 號法案正在考慮中，以防止在單一源含水層上方、下方或穿過單一源含水層的二氧化碳封存活動。這將包括馬霍默特含水層，該含水層位於全州多個縣的地下，其中包括我們目前在第 6 級許可證申請中考慮用於儲存的區域。

Together with Vault and other potentially affected parties, we are working with elected officials to address concerns, to minimize or eliminate the potential legal impact of this legislation on our CCS initiative. We are also developing options to ensure that we are optimizing the value of our CO2 production, no matter the outcome of this legislation, including relocating the proposed storage location of our CO2.

我們正與 Vault 和其他可能受影響的各方一起，與民選官員合作解決問題，盡量減少或消除該立法對我們的 CCS 計劃的潛在法律影響。我們也正在製定各種方案，以確保無論該立法的結果如何，我們都能優化二氧化碳生產的價值，包括重新安置我們二氧化碳的擬議儲存地點。

Further, we're working with Illinois state leaders on SB41, the Clean Transportation Standard Act, to develop clean ground transportation standards to reduce the life cycle carbon intensity of fuels, like the standards adopted on the West Coast.

此外，我們正在與伊利諾伊州領導人就 SB41《清潔交通標準法案》進行合作，制定清潔地面交通標準，以降低燃料的生命週期碳強度，就像西海岸採用的標準一樣。

With that, I'll turn the call over to Rob for our financial review.

說完這些，我將把電話轉給 Rob 進行財務審查。

Thank you, Bryon. I'll review the financial results for the first quarter of 2025 compared to the first quarter of 2024.

謝謝你，布萊恩。我將回顧 2025 年第一季與 2024 年第一季的財務表現。

We sold 89.6 million gallons compared to 99 million gallons reflecting our decisions to idle Magic Valley and to rationalize our warehouse break bulk business. Net sales were $227 million, $14 million lower than the same quarter year over year due to the combined impact of both positive and negative factors.

我們的銷售量為 8,960 萬加侖，而去年同期為 9,900 萬加侖，這反映了我們決定暫停 Magic Valley 業務並合理化我們的倉庫散裝業務。淨銷售額為 2.27 億美元，受利弊因素共同影響，比去年同期下降 1,400 萬美元。

While the market crash margin only increased by a penny or so year over year, improved domestic market prices for ethanol increased our overall average sales price per gallon to $1.93 in Q1 2025 compared to $1.86 Q1 2024. Also, greater sales of ISCC exports delivered a $1.4 million benefit from premium prices versus domestic renewable fuel sales this quarter.

雖然市場崩盤幅度同比僅增加一美分左右，但國內乙醇市場價格上漲導致 2025 年第一季每加侖整體平均銷售價格從 2024 年第一季的 1.86 美元上漲至 1.93 美元。此外，本季 ISCC 出口銷售額的增加帶來了 140 萬美元的溢價收益，而國內再生燃料的銷售額則低於這一水平。

However, a decline in high-quality alcohol premiums equated to $4.6 million in lower sales and the drop in return for essential ingredients 48% and 50% had a negative impact of $3.8 million which most affected our Pekin Campus results. COGS were $15 million lower than the same quarter year over year due to the following reasons.

然而，優質酒類溢價的下降相當於銷售額下降 460 萬美元，而基本成分的回報率分別下降 48% 和 50%，產生了 380 萬美元的負面影響，這對我們北京校區的業績影響最大。由於以下原因，銷貨成本比去年同期低 1500 萬美元。

We idled Magic Valley, accounting for $10 million of the decrease. We also marketed less volume in proximity to the Magic Valley plant, resulting in a 5 million gallon decrease in third-party renewable fuel volume sold. We lowered repairs and maintenance expenses by $1.2 million.

我們暫停了 Magic Valley 業務，這佔了減少金額的 1000 萬美元。我們在魔法谷工廠附近的銷售量也減少了，導致第三方再生燃料的銷售量減少了 500 萬加侖。我們將維修和維護費用降低了 120 萬美元。

While net realized derivative gains were negligible from both quarters, our unrealized derivative gains, which are part of COGS but excluded from adjusted EBITDA were $1.6 million in Q1 2025 compared to $3.2 million in Q1 2024, resulting in a $1.6 million negative swing year over year.

雖然兩季的淨實現衍生性商品收益微不足道，但我們的未實現衍生性商品收益（屬於 COGS 的一部分但不包含在調整後的 EBITDA 中）在 2025 年第一季為 160 萬美元，而 2024 年第一季為 320 萬美元，導致同比下降 160 萬美元。

Gross loss improved $1.8 million from $2.4 million. We lowered SG&A by $700,000 to $7.2 million reflecting the conclusion of our Eagle Alcohol acquisition-related expenses in 2024. Interest expense increased $1.1 million, reflecting higher average outstanding loan balances and interest rates.

總虧損從 240 萬美元改善至 180 萬美元。我們將銷售、一般及行政費用 (SG&A) 降低了 70 萬美元，至 720 萬美元，這反映了我們 2024 年 Eagle Alcohol 收購相關費用的結束。利息支出增加了 110 萬美元，反映出平均未償還貸款餘額和利率上升。

Our consolidated net loss was $11.7 million for both periods. Adjusted EBITDA improved to negative $4.4 million from negative $7.1 million in Q1 2024. This improvement includes $4.8 million saved by idling Magic Valley and a $2.9 million improvement at our Columbia site, primarily reflecting our ownership of Alto Carbonic.

兩個期間我們的合併淨虧損均為 1,170 萬美元。調整後的 EBITDA 從 2024 年第一季的負 710 萬美元改善至負 440 萬美元。此項改進包括因 Magic Valley 停產而節省的 480 萬美元，以及哥倫比亞工廠的 290 萬美元改進，主要反映了我們對 Alto Carbonic 的所有權。

Our net derivative asset or liability reflects what Alto would realize if we liquidated all of our positions as of that specific period and date and is the best way to determine the derivative value or obligation to be realized in the future, measured as of a specific date. For March 31, 2025, our derivative net asset position was $3.8 million.

我們的淨衍生資產或負債反映瞭如果我們在特定期間和日期清算所有頭寸，Alto 將實現的收益，也是確定以特定日期衡量的未來將實現的衍生價值或義務的最佳方式。截至 2025 年 3 月 31 日，我們的衍生性商品淨資產狀況為 380 萬美元。

As of March 31, our cash balance was $27 million and our total loan borrowing availability was $77 million, including $12 million under our operating line of credit and $65 million subject to certain conditions under our term loan facility. During the first quarter of 2025, we used $18 million in cash flow from operations. We invested $7.3 million in our acquisition of Alto Carbonic. We spent $500,000 in CapEx and we recorded $7 million in repairs and maintenance expense in line with our 2025 estimate of $32 million.

截至 3 月 31 日，我們的現金餘額為 2,700 萬美元，我們的貸款借款總額為 7,700 萬美元，其中包括我們的經營信貸額度下的 1,200 萬美元和我們的定期貸款額度下受某些條件限制的 6,500 萬美元。2025 年第一季度，我們使用了 1,800 萬美元的經營現金流。我們投資 730 萬美元收購了 Alto Carbonic。我們的資本支出為 50 萬美元，維修和維護費用為 700 萬美元，與我們預計的 2025 年 3200 萬美元一致。

In summary, our entry into the European ISCC markets, our cost restructuring efforts, and integration of Alto Carbonic has improved our financial position, enabling us to better weather the typical low to negative operating margin environment in Q1 and to navigate unexpected challenges.

總而言之，我們進入歐洲 ISCC 市場、進行成本重組以及整合 Alto Carbonic 改善了我們的財務狀況，使我們能夠更好地度過第一季典型的低至負的營業利潤率環境並應對意外挑戰。

Now I'll turn the call back to Bryon.

現在我將把電話轉回給布萊恩。

Thank you, Rob. We continue to execute our long-term plan to diversify revenue and mitigate the volatility of commodities. We have leveraged our plan flexibility and our efforts are working. New initiatives and beverage grade CO2, NISCC renewable fuel have been economically beneficial. Additionally, our measures to become more efficient have reduced our expense run rate going forward.

謝謝你，羅布。我們繼續執行我們的長期計劃，以實現收入多元化並降低商品的波動性。我們已經充分利用了計劃的靈活性，並且我們的努力正在發揮作用。新措施和飲料級二氧化碳、NISCC再生燃料都帶來了經濟效益。此外，我們為提高效率而採取的措施也降低了我們未來的費用運行率。

The regulatory environment remains dynamic, yet there are encouraging developments, including the increasing state and potential national adoption of year-round E15. Additionally, the Illinois Clean Transportation Standard Act presents exciting possibilities that could further support industry growth and innovation.

監管環境仍然動態，但也出現了令人鼓舞的發展，包括各州和潛在的全國範圍內越來越多地採用全年 E15。此外，伊利諾伊州清潔交通標準法案提出了令人興奮的可能性，可以進一步支持產業成長和創新。

Our team will continue to proactively evaluate alternatives for revenue streams and value, leverage our flexible and unique plans, and commit to drive -- the driving long-term shareholder value on a sustainable, consistent basis.

我們的團隊將繼續積極評估收入來源和價值的替代方案，利用我們靈活而獨特的計劃，並致力於以可持續、一致的方式推動長期股東價值。

With that operator we are ready to begin Q&A with sell-side analysts.

有了這個操作員，我們就可以開始與賣方分析師進行問答了。

Thank you. We will now begin the question-and-answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。（操作員指示）

Sameer Joshi, HC Wainwright.

薩米爾喬希、HC溫賴特。

Hey, good afternoon, thanks for taking my question. Just a quick one on the acquisition completed in January, the liquid CO2. It was expected to be immediately accretive. Was it accretive during the first quarter?

嘿，下午好，感謝您回答我的問題。我簡單介紹一月份完成的收購，也就是液態二氧化碳。預計它會立即增值。第一季它有增值嗎？

Yes, it's a good question. The Columbia facility and carbonic integration, it moved ahead as we expected. We have already benefited from increased communication and operation synergies. We immediately eliminated redundant accounting and management expenses.

是的，這是個好問題。哥倫比亞工廠和碳整合專案如我們預期的那樣順利推進。我們已經從加強溝通和營運協同中受益。我們立即取消了多餘的會計和管理費用。

While we typically don't speak specifically about plant results, the Columbia assets improved $2.9 million compared to Q1 2024. So we are seeing significant positive benefits from that acquisition.

雖然我們通常不會具體談論工廠的業績，但與 2024 年第一季相比，哥倫比亞資產增加了 290 萬美元。因此，我們從此次收購中看到了顯著的正面效益。

Understood. And then the $8 million in annual savings that I think will be fully realized in 2Q according to the commentary, would it mostly come from the operations, operating expenses, or is there any portion of cost of goods sold overhead that will also be reduced?

明白了。然後，根據評論，我認為每年 800 萬美元的節省將在第二季度完全實現，它主要來自營運、營運費用，還是銷售成本的間接費用部分也會減少？

Yeah, thank you for the question. So the anticipated benefit of about $8 million due to our workforce reduction to better align with our current company footprint, you'll see about a 13% reduction in both the cost of goods sold and SG&A expense. And we expect the benefit to start to be realized in Q2 of 2025.

是的，謝謝你的提問。因此，由於我們裁員以更好地適應我們目前的公司規模，預計收益約為 800 萬美元，您將看到銷售成本和銷售、一般及行政費用均減少約 13%。我們預計這項效益將於 2025 年第二季開始顯現。

Okay, got it. And would you just elaborate or just give us a little bit more insight into the CPS impact that the Illinois Bill might have on your -- I mean, you briefly described it, but just wanted to understand how it could impact your plan.

好的，明白了。您能否詳細說明一下，或者讓我們更深入地了解伊利諾伊州法案可能對您的 CPS 產生的影響——我的意思是，您對此進行了簡要描述，但只是想了解它會如何影響您的計劃。

Sure, so it's difficult to assess at this time, Sameer. It's so dynamic. That said, if it goes through as I generally expressed it in the prepared remarks, it's a fairly short and limited bill as currently drafted and it would prohibit drilling through -- in summary, drilling through, above or through the Aquifer directly. So you have to go around it. And our current sighting under our Class VI is -- contemplates -- relocating through or going through the Aquifer, so we would have to at a minimum relocate that well.

當然，所以現在很難評估，薩米爾。它是如此充滿活力。話雖如此，如果它像我在準備好的發言中通常表達的那樣獲得通過，那麼按照目前的起草方式，這是一個相當簡短和有限的法案，它將禁止鑽探——總之，禁止直接在含水層上方或通過含水層進行鑽探。所以你必須繞過它。我們目前在 VI 級觀測下觀察到的情況是 — — 正在考慮 — — 重新定位或穿過含水層，因此我們必須至少重新定位該井。

Okay, thanks for that.

好的，謝謝。

Which would then would potentially extend -- you'd have to then resubmit or re-amend your -- at a minimum, you have to amend your Class VI permit to adapt to those changes. And again, there's other work that we will be doing, as I mentioned in our prepared remarks is -- the focus is really around again optimization and working with our partners as best we can to address this issue.

這可能會延長 - 您必須重新提交或重新修改 - 至少，您必須修改您的 VI 級許可證以適應這些變化。正如我在準備好的演講中提到的那樣，我們還將開展其他工作——重點是再次進行優化，並盡最大努力與我們的合作夥伴合作解決這個問題。

Got it, understood. And then the last one, you mentioned the Pekin load dock damage and the temporary solution. What was the estimated cost of that temporary solution? And do you have any estimate on what it will cost to more permanently repair that?

明白了，了解了。最後一個問題，您提到了北京裝卸碼頭的損壞和臨時解決方案。該臨時解決方案的預計成本是多少？您是否估計過更永久的修復需要花費多少錢？

Yeah, just as a recap, our Pekin barge stock failed in early April due to quickly rising river levels. That essentially caused a pretty quick logistical challenge in moving both our liquid and our dry products. So we did take the dry milk offline for a week, significantly reducing our production volume during that time period.

是的，回顧一下，由於河水水位快速上漲，我們的北京駁船庫存在 4 月初出現短缺。這實際上為我們的液體和乾貨運輸帶來了相當大的物流挑戰。因此，我們確實將奶粉停產了一周，這大大減少了那段時間的產量。

A shoutout to the operations and commercial teams who quickly made the necessary short-term adjustments logistically to get the product flowing again. And that included a temporary loadout doc for liquids, and we're also working with the neighboring transload facility with respect to our DDGs.

向營運和商業團隊致以崇高的敬意，他們迅速在後勤方面做出了必要的短期調整，使產品再次正常運作。其中包括一份液體的臨時裝載文件，我們也正在與鄰近的轉運設施就我們的 DDG 進行合作。

We are currently assessing our long-term remediation options and we're working with our insurance carrier to mitigate the financial impact. We will provide more updates on the next call. And also I'll just add that we are assessing what the long-term option will be in regards to what equipment that we can salvage, if any, and if we would replace it with a new floating load out dock.

我們目前正在評估我們的長期補救方案，並正在與我們的保險公司合作以減輕財務影響。我們將在下次通話中提供更多更新資訊。另外我還要補充一點，我們正在評估我們可以回收哪些設備的長期選擇（如果有的話），以及我們是否會用新的浮動裝載碼頭來替換它。

Understood. Thanks for taking my question. I will turn it over.

明白了。感謝您回答我的問題。我會把它翻過來。

(Operator Instructions) Eric Stine, Craig-Hallum.

（操作員指示）Eric Stine，Craig-Hallum。

Hey, guys. This is Luke on for Eric. Thanks for taking the questions. So first, starting with Magic Valley, you mentioned in the past corn prices as being a driver of unprofitability and leading to the ultimate decision to cold idle. So we were wondering, are these conditions consistent with other production sites in the region around Magic Valley, or are they more specific to just Alto's logistical and cost structure?

嘿，大家好。這是盧克為埃里克表演的。感謝您回答這些問題。首先，從魔法谷開始，您提到過去玉米價格是導致無利可圖的一個因素，並最終導致冷閒置的決定。所以我們想知道，這些條件是否與魔法谷週邊地區的其他生產基地一致，或者它們是否僅適用於 Alto 的物流和成本結構？

I think it's pretty plant specific and location specific. So I guess maybe to answer your question differently is if you had a different size land corn facility in -- near or adjacent to our Magic Valley facility, they would be dealing with the same kind of issues and consequences. Corn is not grown in the area. There is some local corn, but it's not sufficient to address the need. And the cost of -- the logistical cost of bringing corn through that area with only one railroad, no competitors, makes it very difficult to be able to get competitive pricing for delivery corn.

我認為它與植物和地點密切相關。所以我想也許可以用不同的方式回答你的問題，如果你在我們的魔法谷工廠附近或相鄰的地方有一個不同規模的土地玉米工廠，他們就會處理同樣的問題和後果。該地區不種植玉米。當地有一些玉米，但不足以滿足需求。而且由於該地區只有一條鐵路，沒有競爭對手，因此運輸玉米的物流成本很高，很難獲得有競爭力的玉米運輸價格。

And so while you can support and justify the services that are provided by that facility to the local markets, there's more than sufficient demand if you're shipping within either Salt Lake City or all the way over to Boise. It covers a lot of area. There is -- there are other alternatives for cheaper sources of ethanol into that area. And so there really wasn't an opportunity to be able to -- really, the solution would be if you wanted to run ethanol out of that facility would be to find a different source of feed stock. So you can avoid that premium that you otherwise have to pay for corn.

因此，雖然您可以支持並證明該設施向當地市場提供的服務，但如果您在鹽湖城內或一路運送到博伊西，那麼需求就足夠了。它覆蓋了很大的面積。該地區還有其他更便宜的乙醇替代來源。因此，實際上沒有機會——實際上，解決方案是，如果您想從該設施生產乙醇，就必須找到不同的原料來源。這樣你就可以避免購買玉米時必須支付的溢價。

Right, thank you. And just to follow up quickly on that, I mean, given we've seen some slight market recovery in the past couple months here, it'd be helpful if you could just characterize what sort of sustained improvement you'd need to see in the market to potentially justify a restart at Magic Valley and if that's something that's potentially still on the table for 2025 or are we still a long ways off in just terms of cost there?

好的，謝謝。為了快速跟進這一點，我的意思是，鑑於我們在過去幾個月裡看到了一些市場復甦，如果您可以描述一下需要看到什麼樣的持續改善才能有可能證明重啟魔法谷是合理的，以及這是否是 2025 年仍有可能實現的事情，或者就成本而言我們還有很長的路要走？

I think that the fundamentals that we were evaluating a couple of years ago have changed dramatically, right? We made the decision to proceed with the high protein and higher corn oil system where you, on a logistical basis, could see a material difference and benefit of doing so. And I think the fundamentals, particularly around where corn prices are where they are today in low prices, makes it very difficult to be able to do that on the same basis.

我認為我們幾年前評估的基本面已經發生了巨大變化，對嗎？我們決定採用高蛋白和高玉米油系統，從物流角度來看，您可以看到這樣做帶來的實質差異和好處。我認為，基本面因素，尤其是玉米價格目前處於低價位，使得以同樣的方式做到這一點非常困難。

If you were looking at corn prices of $8 or $10 of bushel right at the high end, it actually makes it easier to justify operating that facility because you're also getting such a better return for your co-products, your proteins and your oils. Anything you want to add to that, Rob?

如果您看到玉米價格高達每蒲式耳 8 美元或 10 美元，那麼實際上更容易證明運營該設施的合理性，因為您還可以從副產品、蛋白質和油中獲得更好的回報。羅布，你還有什麼要補充的嗎？

Yeah, I'll say, if you recall that that site is also a particularly challenged with -- we expected to get a lot more revenues from the expanded high protein technology, but with the increased soy crush in the market, which we did not anticipate increasing supply levels, that kind of a negative compression on protein prices. So while the market conditions can change and we'll continue to monitor and evaluate those, things would have to change for a fair amount of time before we consider bringing that plan back online.

是的，我想說，如果你還記得的話，該網站也面臨著特別的挑戰——我們預計將從擴大的高蛋白技術中獲得更多的收入，但隨著市場上大豆壓榨量的增加，我們沒有預料到供應水平會增加，這對蛋白質價格產生了負面壓縮。因此，雖然市場條件可能會發生變化，並且我們將繼續監控和評估這些變化，但在我們考慮恢復該計劃之前，情況必須經過相當長一段時間的變化。

And I think you'd have to really address the question around sourcing your feedstock and if you want to continue to do that corn, or would you be looking to do other sources like either a mixture of wheat and corn or moving to the wheat or some other gluten or some other alternative altogether.

我認為你必須真正解決有關原料來源的問題，以及你是否想繼續使用玉米，或者你是否想尋找其他來源，例如小麥和玉米的混合，或者轉向小麥或其他麩質或其他替代品。

And if you could do so and you wanted to spend the money on that, I think you'd actually have a fairly viable competitive facility. You'd also be eligible for [five RINs] and be an advanced biofuels. So there's a lot of benefits to think about that, but it's a significant capitalist to make that change.

如果你能做到這一點，並且願意為此花錢，我認為你實際上會擁有一個相當可行的競爭設施。您還有資格獲得 [五個 RIN] 並成為先進的生物燃料。因此，考慮這一點有很多好處，但做出這項改變需要付出巨大的資本家努力。

Right, well, thank you. I appreciate the color. That's it for us.

好的，謝謝。我很欣賞這個顏色。對我們來說就是這樣。

Thank you. That does conclude our question-and-answer session. I'll now like to turn the conference back over to Bryon McGregor for any closing remarks.

謝謝。我們的問答環節到此結束。現在，我想將會議交還給布萊恩·麥格雷戈 (Bryon McGregor) 來做結束語。

Thank you, Darcy. Thanks again, everyone, for joining us today. We appreciate your ongoing feedback and support. Have a good day.

謝謝你，達西。再次感謝大家今天的參與。我們感謝您一直以來的回饋與支持。祝你有美好的一天。

The conference is 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。