Alto Ingredients Inc (ALTO) 2022 Q1 法說會逐字稿

Welcome to the Alto Ingredients First Quarter 2020 Results Conference Call. (Operator Instructions) Please note, this conference is being recorded.

歡迎參加 Alto Ingredients 2020 年第一季度業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。

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

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

Thank you, Vaishnavi, and thank you all for joining us today for the Alto Ingredients First Quarter 202 Results Conference Call. On the call today are Mike Kandris, CEO and Bryon McGregor, CFO. Alto Ingredients has issued a press release after the market closed today, providing details of the company's quarterly results. The company also prepared a presentation for today's call that is available on the company's website at altoingredients.com. A telephone replay of today's call will be available through May 16, the details of which are included in today's press release. A webcast replay will also be available at Alto Ingredients website.

謝謝你，Vaishnavi，也感謝大家今天加入我們參加 Alto Ingredients 202 年第一季度業績電話會議。今天的電話會議是首席執行官 Mike Kandris 和首席財務官 Bryon McGregor。 Alto Ingredients 在今天收市後發布了一份新聞稿，提供了公司季度業績的詳細信息。該公司還為今天的電話會議準備了一份演示文稿，該演示文稿可在公司網站 altoingredients.com 上找到。今天的電話重播將持續到 5 月 16 日，詳細信息包含在今天的新聞稿中。 Alto Ingredients 網站上還將提供網絡直播重播。

Please note that the information on this call speaks only as of today, May 9, and you are advised that any time-sensitive information may no longer be accurate at the time of the replay. Please refer to the company's safe harbor statement on Slide 2 of the presentation available online, which states that some of the comments in this presentation constitute forward-looking statements and considerations that involve a number of risks and uncertainties. Actual future results of auto 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' filing with the SEC. Except as required by law, the company assumes no obligation to update any forward-looking statements.

請注意，本次電話會議的信息僅在今天 5 月 9 日發布，並且建議您在重播時任何時間敏感信息可能不再準確。請參閱公司在網上提供的幻燈片 2 上的安全港聲明，該聲明指出，本演示文稿中的一些評論構成前瞻性陳述和考慮因素，涉及許多風險和不確定性。汽車成分的實際未來結果可能與這些陳述大不相同。可能導致或促成此類差異的因素包括但不限於先前和不時在 Alto Ingredients 向 SEC 提交的文件中披露的事件、風險和其他因素。除法律要求外，公司不承擔更新任何前瞻性陳述的義務。

In management's prepared remarks, non-GAAP measures will be referenced. Management uses these non-GAAP measures to monitor the financial performance of operations and believes these measures will assist investors in assessing the company's performance for the periods being reported. The company defines adjusted EBITDA as an unaudited net income or loss attributed to Alto Ingredients before interest expense and interest income, provisions for our benefits of income taxes, asset impairments, loss on extinguishment of debt, acquisition-related expense fair value adjustments and depreciation and amortization expense. To support the company's review of non-GAAP information a reconciling table is included in today's press release.

在管理層準備好的評論中，將引用非公認會計原則措施。管理層使用這些非公認會計原則措施來監控運營的財務業績，並相信這些措施將幫助投資者評估公司在報告期間的業績。公司將調整後的 EBITDA 定義為在利息費用和利息收入、所得稅福利、資產減值、債務清償損失、收購相關費用公允價值調整和折舊之前歸屬於 Alto Ingredients 的未經審計的淨收入或損失以及攤銷費用。為了支持公司對非公認會計原則信息的審查，今天的新聞稿中包含了一個核對錶。

On the call, Mike will begin with some highlights of the financials and a review of our vision and quarterly activities. Bryon will then provide additional detail on our Q1 2022 financial results. Then Mike will wrap up with a summary before opening for the Q&A.

在電話會議上，邁克將首先介紹一些財務亮點，並回顧我們的願景和季度活動。然後，Bryon 將提供有關我們 2022 年第一季度財務業績的更多詳細信息。然後，邁克將在開始問答之前做一個總結。

It's now my pleasure to introduce Mike Kandris, CEO. Please go ahead, Mike.

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 today. I'm pleased to report that our further diversification into specialty alcohols and essential ingredients has provided us with a buffer against the macroeconomic challenges and weak renewable fuel crush margins we experienced in the first quarter. And as a result, we were able to generate positive gross margin and adjusted EBITDA.

謝謝你，克爾斯滕，謝謝大家今天加入我們。我很高興地報告，我們在特種酒精和基本成分方面的進一步多元化為我們提供了緩衝，以應對第一季度所經歷的宏觀經濟挑戰和疲軟的可再生燃料壓榨利潤率。因此，我們能夠產生正的毛利率和調整後的 EBITDA。

We remain focused on managing the areas of our business within our control by executing on our strategic goals, investing for future growth and diversifying and high-grading our product offering. During the quarter, we continued to make good progress on our strategic plans. In January, we acquired Eagle alcohol, an established leader in premium alcohol distribution. This downstream entity specializes in small package products preferred by most of the premium grain neutral spirits companies. As such, Eagle expands our scope of offerings, broadens our target customer base, increases our commercial opportunities and accelerates our ability to capture additional high-margin markets.

我們通過執行我們的戰略目標、為未來的增長進行投資以及使我們的產品多樣化和高等級化，繼續專注於管理我們控制範圍內的業務領域。本季度，我們的戰略計劃繼續取得良好進展。 1 月，我們收購了優質酒類分銷領域的知名領導者 Eagle 酒類。這個下游實體專門生產大多數優質穀物中性烈酒公司偏愛的小包裝產品。因此，Eagle 擴大了我們的產品範圍，擴大了我們的目標客戶群，增加了我們的商業機會，並加快了我們佔領更多高利潤市場的能力。

Already, we have begun leveraging Eagle's capabilities, including enhancing our distillation process and optimizing our production capabilities. The integration is progressing on track, providing opportunities to focus on expansion opportunities and leveraging Eagle's strong distribution and sales services. In February, we expanded our certification portfolio by qualifying for 2 additional internationally recognized certifications at the Pekin campus, one for active pharmaceutical ingredients and the other for the use of excipients.

我們已經開始利用 Eagle 的能力，包括改進我們的蒸餾工藝和優化我們的生產能力。整合正在按計劃進行，提供了專注於擴張機會並利用 Eagle 強大的分銷和銷售服務的機會。 2 月，我們通過在北京校區獲得另外兩項國際認可的認證來擴展我們的認證組合，一項針對活性藥物成分，另一項針對輔料的使用。

Combined with the certifications we received in 2021, these new certifications now create redundancy across the entire Pekin campus. Further, it increases Alto's appeal to high-margin customers that use high-grade alcohols in pharmaceutical, health, home and beauty and distilled spirits that require documented high-grade product on a consistent basis. By achieving these standards, we are producing a highly sought-after product. As a result, we are expanding existing relationships and attracting new customers domestically and in the growing international markets.

結合我們在 2021 年獲得的認證，這些新認證現在在整個北京校區創造了冗餘。此外，它增加了 Alto 對高利潤客戶的吸引力，這些客戶在製藥、健康、家庭和美容以及蒸餾酒中使用高級酒精，這些客戶需要始終如一地記錄高級產品。通過達到這些標準，我們正在生產備受追捧的產品。因此，我們正在擴大現有關係並在國內和不斷增長的國際市場上吸引新客戶。

As previously reported, we restarted our Magic Valley facility in Q4. In Q1, we made progress installing our CoPromax high-protein solution. We expect to see initial benefits in the second half of this year from the corn oil extraction system to the tune of $4 million on an annualized basis in EBITDA. We expect the protein enhancements to be completed by early 2023, producing an additional $5 million annually in EBITDA based on current market prices. As we shared previously, we intend to reinvest further in diversification and other capital market strategies over the next few years.

正如之前報導的那樣，我們在第四季度重新啟動了我們的魔術谷工廠。在第一季度，我們在安裝 CoPromax 高蛋白解決方案方面取得了進展。我們預計今年下半年玉米油提取系統的初步收益將達到 400 萬美元的年化 EBITDA。我們預計蛋白質增強將在 2023 年初完成，根據當前市場價格每年額外產生 500 萬美元的 EBITDA。正如我們之前分享的，我們打算在未來幾年內進一步投資於多元化和其他資本市場戰略。

Regarding Eagle, we expect the base business to contribute around $4 million in EBITDA for 2022. Additionally, we plan to invest $5 million this year to further optimize our specialty alcohol production, quality and distribution. Subject to supply chain constraint delays, we plan to complete our improvements before fourth quarter contract negotiations began, producing an additional $5 million in EBITDA annually beginning in 2023.

關於 Eagle，我們預計基礎業務將在 2022 年為 EBITDA 貢獻約 400 萬美元。此外，我們計劃今年投資 500 萬美元，以進一步優化我們的特種酒精生產、質量和分銷。由於供應鏈限制延遲，我們計劃在第四季度合同談判開始之前完成改進，從 2023 年開始每年額外產生 500 萬美元的 EBITDA。

We have begun expansion of corn storage at our Pekin campus. This will increase the company's corn buying flexibility, enabling Alto to reduce the need to purchase product at premium prices when farmers and elevators are not shipping corn during holidays or unfavorable weather conditions. This year, we will spend approximately $6 million to complete the storage installation and expect this project to provide over $2 million of EBITDA annually with the payback in less than 3 years beginning in Q1 2023.

我們已經開始在北京園區擴大玉米儲存。這將提高公司玉米採購的靈活性，使 Alto 能夠在節假日或不利天氣條件下農民和電梯不運送玉米時減少以高價採購產品的需求。今年，我們將花費大約 600 萬美元來完成存儲安裝，並預計該項目每年將提供超過 200 萬美元的 EBITDA，並從 2023 年第一季度開始在不到 3 年內收回投資。

We continue to reinvest in our facilities by upgrading equipment and operating systems to create efficiency and plant reliability. As an example, and for a nominal expense, we've now added the ability to load corn oil into railcars across our facilities, expanding access to higher-valued corn oil markets. Our capital expenditure projects like this will be more ongoing in nature, and we will provide color on these projects periodically as the year progresses.

我們通過升級設備和操作系統繼續對我們的設施進行再投資，以提高效率和工廠可靠性。作為一個例子，我們現在增加了將玉米油裝載到我們設施的軌道車中的能力，並且以名義上的費用，擴大了進入高價值玉米油市場的機會。我們這樣的資本支出項目在性質上將更加持續，隨著時間的推移，我們將定期為這些項目提供色彩。

As previously discussed, once we have successfully completed the installation of the CoPromax system at our Idaho facility, we then plan to roll out these upgrades to our other 3 dry mills with the goal to have them fully operational by 2025. The total investment plan is approximately $70 million for all 4 facilities. The benefit is expected to exceed $34 million in EBITDA annually based on current market values. We are exploring additional opportunities for development. And during the first quarter, we evaluated investing in a natural gas bypass at our Pekin campus, reducing the price we pay for natural gas by approximately 11% based on 2021 values and bypassing the local utility.

如前所述，一旦我們在愛達荷州工廠成功完成 CoPromax 系統的安裝，我們計劃將這些升級推廣到我們的其他 3 座乾磨機，目標是到 2025 年使它們全面投入運營。總投資計劃為所有 4 個設施的費用約為 7000 萬美元。根據當前的市場價值，預計每年的 EBITDA 收益將超過 3400 萬美元。我們正在探索更多的發展機會。在第一季度，我們評估了在北京園區對天然氣旁路的投資，根據 2021 年的價值並繞過當地公用事業公司，我們為天然氣支付的價格降低了約 11%。

This potential gas bypass system would also create the opportunity to sell renewable natural gas produced by the plant directly into the pipeline in the future. We would expect to invest approximately $9 million in 2023 for a return of approximately $5 million in EBITDA annually in 2024 and beyond. With regards to carbon capture and sequestration at our Pekin site, it bears repeating that we continue to evaluate multiple opportunities for this important project and are making progress in advancing our plans. Finally, like carbon capture, we will continue to pursue additional profitable opportunities with a focus on 2024 and beyond and look forward to sharing more details once they are sufficiently developed.

這種潛在的氣體旁路系統也將創造機會在未來將工廠生產的可再生天然氣直接銷售到管道中。我們預計 2023 年投資約 900 萬美元，2024 年及以後每年的 EBITDA 回報約為 500 萬美元。關於我們北京工廠的碳捕獲和封存，值得重申的是，我們將繼續評估這個重要項目的多個機會，並在推進我們的計劃方面取得進展。最後，與碳捕獲一樣，我們將繼續尋求更多的盈利機會，重點關注 2024 年及以後，並期待在充分發展後分享更多細節。

I'd now like to take a minute to provide a brief overview of our focus on environmental, social and governance, or ESG, initiatives. Please note that in addition to laying out the focus on our future actions, most -- much of the work will be increasing the transparency of the work we have already completed to date. An environmental focus is at the heart of Alto Ingredients business and social and governance are simply sound business practices that we have been implementing in the natural course of our business. As a producer and distributor of high-quality bio-based alcohols, we are committed to creating a greener environment. We've launched initiatives, set baselines and began tracking resources to improve employee, health and safety and further reduce environmental impacts.

我現在想花一點時間簡要概述一下我們對環境、社會和治理（ESG）計劃的關注。請注意，除了將重點放在我們未來的行動上之外，大部分工作將增加我們迄今為止已經完成的工作的透明度。以環境為中心是 Alto Ingredients 業務的核心，社會和治理只是我們在業務自然過程中一直在實施的合理業務實踐。作為優質生物基酒精的生產商和分銷商，我們致力於創造更綠色的環境。我們已啟動計劃、設定基準並開始跟踪資源，以改善員工、健康和安全，並進一步減少對環境的影響。

Earlier this year, we created an ESG committee consisting of senior executives, subject matter experts and members of our Board. Additionally, we completed an extensive company review with a third party and refined our strategy. As part of this process, we promoted Stacy Swanson, who led our rigorous certification efforts to head our day-to-day ESG programs in the newly created position of Vice President of Quality and Sustainability. We look forward to providing periodic updates on our ESG strategy and greater transparency of the many accomplishments to date and of our activities moving forward.

今年早些時候，我們成立了一個由高級管理人員、主題專家和董事會成員組成的 ESG 委員會。此外，我們與第三方完成了廣泛的公司審查並完善了我們的戰略。作為這一過程的一部分，我們提拔了 Stacy Swanson，她領導了我們嚴格的認證工作，在新設立的質量和可持續發展副總裁職位上領導我們的日常 ESG 計劃。我們期待定期更新我們的 ESG 戰略，並為迄今為止的許多成就和我們未來的活動提供更高的透明度。

I would like to now turn it over to Bryon to review the financials. Bryon?

我現在想把它交給布賴恩來審查財務狀況。布賴恩？

Thank you, Mike. I'll provide some additional color around our results and metrics for the first quarter of 2022. Net sales were $308 million, up from $219 million in the first quarter of 2021. Due to an increase in specialty alcohol gallons sold, higher average sales price per gallon and the addition of Magic Value production. The average sales price per gallon, the renewable fuel, largely reflects supply constraints translating into higher ethanol prices. We had alcohol sales of $230 million and $74 million in revenue from sales of our essential ingredients. In the first quarter of 2022, 72 million production gallons were sold, of which 23 million gallons consisted of specialty alcohols in line with our previously stated 90 million gallons of annual contracted volume anticipated for all of 2022.

謝謝你，邁克。我將為我們 2022 年第一季度的結果和指標提供一些額外的顏色。淨銷售額為 3.08 億美元，高於 2021 年第一季度的 2.19 億美元。由於銷售的特種酒精加侖數增加，平均銷售價格更高每加侖和增加的魔法值產量。每加侖可再生燃料的平均銷售價格在很大程度上反映了供應限制導致乙醇價格上漲。我們的酒類銷售額為 2.3 億美元，銷售基本成分的收入為 7400 萬美元。 2022 年第一季度，售出 7200 萬加侖生產量，其中 2300 萬加侖由特種酒精組成，與我們之前預計的 2022 年全年 9000 萬加侖的年度合同量一致。

The specialty alcohol gallons sold increased 23% or 4 million gallons over first quarter 2021, reflecting expanded capacity as well as increased export and industrial demand. The increase in total production gallons sold were partially offset by a reduction in third-party sales as we rationalize certain areas of our third-party business. We experienced a decrease in gross profit of $9 million year-over-year, same quarter. This change is attributable to many factors, including extreme commodity price volatility, drawn out supply chains, rail and operational disruptions, rising transportation costs and weak renewable fuel crush margins. It is worth noting that our cost of goods sold includes $7 million in noncash mark-to-market inventory adjustments and unrealized losses recorded on our derivative position for forward positions.

與 2021 年第一季度相比，銷售的特種酒精加侖數增加了 23% 或 400 萬加侖，這反映了產能的擴大以及出口和工業需求的增加。隨著我們對第三方業務的某些領域進行合理化，第三方銷售的減少部分抵消了總產量加侖銷售的增加。同季度，我們的毛利潤同比下降了 900 萬美元。這種變化歸因於許多因素，包括商品價格極端波動、供應鏈延長、鐵路和運營中斷、運輸成本上升以及可再生燃料壓榨利潤疲軟。值得注意的是，我們的商品銷售成本包括 700 萬美元的非現金按市值計價的庫存調整以及遠期頭寸衍生品頭寸記錄的未實現損失。

Even with these challenges, we delivered a gross profit of $4.8 million for the quarter. SG&A expenses in the quarter were $7.6 million compared to $7 million in the first quarter of 2021, with a slight increase year-over-year being attributable to our acquisition-related accrual for future contingent payments for the Eagle acquisition of $800,000. Net loss available to common shareholders was $2.9 million or $0.04 per share. This compares to a net income of $4.4 million or $0.06 per diluted share in the first quarter of 2021.

即使面臨這些挑戰，我們本季度仍實現了 480 萬美元的毛利潤。本季度的 SG&A 費用為 760 萬美元，而 2021 年第一季度為 700 萬美元，同比略有增加，這是由於我們為收購 Eagle 的未來或有付款的收購相關應計費用為 800,000 美元。普通股股東可獲得的淨虧損為 290 萬美元或每股 0.04 美元。相比之下，2021 年第一季度的淨收入為 440 萬美元或每股攤薄收益 0.06 美元。

Adjusted EBITDA was $4.4 million compared to $13.4 million in the first quarter of 2021. Finally, our balance sheet remains clean and strong with cash and cash equivalents totaling $36 million as of March 31, 2022, down approximately $15 million from December 31, 2021, largely reflecting our acquisition of our specialty alcohol distribution facility.

調整後的 EBITDA 為 440 萬美元，而 2021 年第一季度為 1340 萬美元。最後，我們的資產負債表保持清潔和強勁，截至 2022 年 3 月 31 日，現金和現金等價物總計 3600 萬美元，比 2021 年 12 月 31 日減少約 1500 萬美元，很大程度上反映了我們收購了我們的特種酒精分銷設施。

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

有了這個，我會把時間轉回到邁克身上。

Thank you, Bryon. It is gratifying to experience the positive impact of our transformation so quickly. We have grown our specialty alcohol business and our diversification has delivered financial benefits. To recap, we began our transformation in the second quarter of 2020. Since then, we have redefined and implemented our strategy. And even with costs associated with the transformation, we still generated over $50 million in net income and $160 million in adjusted EBITDA over that same period.

謝謝你，布賴恩。如此迅速地體驗到我們轉型帶來的積極影響是令人欣慰的。我們已經發展了我們的特種酒精業務，我們的多元化帶來了經濟利益。回顧一下，我們在 2020 年第二季度開始轉型。從那時起，我們重新定義並實施了我們的戰略。即使與轉型相關的成本，我們仍然在同一時期產生了超過 5000 萬美元的淨收入和 1.6 億美元的調整後 EBITDA。

Whether looking retrospectively over the past 2 years or the latest challenging quarter, it is clear to see that Alto Ingredients is on the right track and well positioned to execute on key initiatives in 2022 and beyond. I'd once again like to thank our employees for their commitment to long-term sustainable growth. And finally, I'd like to invite investors to our virtual conferences with H.C. Wainwright in May and Craig-Hallum in June.

無論是回顧過去 2 年還是最近一個充滿挑戰的季度，我們都清楚地看到，Alto Ingredients 正走在正確的軌道上，並且有能力在 2022 年及以後執行關鍵計劃。我要再次感謝我們的員工對長期可持續發展的承諾。最後，我想邀請投資者參加我們與 H.C. 的虛擬會議。五月的溫賴特和六月的克雷格-哈勒姆。

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) The first question comes from Shar Pourreza with Guggenheim Partners.

（操作員說明）第一個問題來自與 Guggenheim Partners 的 Shar Pourreza。

It's Constantine here for Shar. Starting off maybe a bit high level. Can we get your view on the elasticity of the product pricing that you anticipate with the product lines between ethanol and consumer products? Just maybe what have you seen in terms of implementing end-use pricing adjustments from our customers to account for the corn and crush economics?

康斯坦丁來這裡是為了莎爾。開始可能有點高水平。我們能否了解您對乙醇和消費品之間產品線的預期產品定價彈性的看法？也許您在實施我們的客戶的最終用途定價調整以考慮玉米和壓榨經濟方面看到了什麼？

Sure. Depending on which product line we're talking about, there's greater relationships and then there are some that make it more difficult to pass some of those costs on. If you actually look at the fuel part of the business, that product is usually sold on an index price and we effectively incur the cost as we grind the corn. So, there's a tight relationship between the 2 and the costs usually passed on through the system. And really, the only thing that becomes a bit challenging is if -- what really happens is that crush margins reflects demand supply balance or imbalances depending on which way it's reflecting. If there's a lack of excess supply of fuel, then you'll see a widening of that spread significantly. And if you see too much of a supply of ethanol, then it starts to tighten against the input cost of corn and the freight associated with that.

當然。取決於我們談論的產品線，有更大的關係，然後有些關係使得轉嫁這些成本變得更加困難。如果您實際查看業務的燃料部分，該產品通常以指數價格出售，而我們在研磨玉米時實際上會產生成本。因此，2 與通常通過系統傳遞的成本之間存在緊密的關係。真的，唯一變得有點挑戰的是——真正發生的是壓榨利潤率反映了需求供應平衡或不平衡，這取決於它反映的方式。如果燃料供應不足，那麼您會看到這種價差顯著擴大。如果你看到過多的乙醇供應，那麼它就會開始收緊玉米的投入成本和與之相關的運費。

On the specialty alcohols, those contracts are fixed in price and volume. And so, it makes it more difficult to pass on some of those costs. Some of the contracts do have allowances for that. But the way that we account for or the way that we handle that in making sure that we lock in that spread is often we'll use tools and other derivatives that allow for the capture of that that any additional delivery costs to the customer. So, while it's not perfect and probably a little less flexibility, we do what we can to continue to preserve that spread.

對於特種酒精，這些合同的價格和數量都是固定的。因此，轉移其中一些成本變得更加困難。一些合同確實有這方面的津貼。但是，我們在確保鎖定該價差時考慮或處理該價差的方式通常是使用工具和其他衍生產品，以獲取客戶的任何額外交付成本。因此，雖然它並不完美，而且靈活性可能有所降低，但我們會盡我們所能繼續保持這種傳播。

That's helpful. And maybe as we kind of look at the Eagle alcohol distribution integration, providing some level of hedging against the commodity in 2022. Do you have any refreshed thoughts on the contracted portion of the product? Are there any updates to securing input cost and margins for -- in the near term or is that more longer term?

這很有幫助。也許當我們看一下 Eagle 酒精分銷整合，在 2022 年提供某種程度的對沖商品。您對產品的合同部分有什麼新的想法嗎？是否有任何更新以確保短期內或更長期的投入成本和利潤？

Yes, I would say that those probably more longer term. But as I think we mentioned in the prepared remarks, we are on track and actually we are seeing increase in demand for -- on a spot basis. And so, we're responding to that. And we would certainly expect if trends continue to be able to meet or exceed the contracted volume that we stated at the earlier -- at the beginning of this year.

是的，我會說那些可能更長期。但正如我認為我們在準備好的評論中提到的那樣，我們正在走上正軌，實際上我們看到對現貨的需求有所增加。因此，我們正在對此作出回應。如果趨勢繼續能夠達到或超過我們早些時候（今年年初）所說的合同量，我們當然會期待。

I might make -- noting or commenting just on Eagle. Eagle is also less sensitive to some of those price changes they're able to pass on freight costs often. And so that -- the ability to capture that spread and that business is beneficial as well and less pervious to some of the constraints that we'd otherwise face with volatile prices.

我可能會--只對Eagle 進行註釋或評論。 Eagle 對他們能夠經常轉嫁運費的一些價格變化也不那麼敏感。因此 - 捕捉這種價差和業務的能力也是有益的，並且不太容易受到我們在價格波動時面臨的一些限制的影響。

Excellent. And I think the last one that I have is on just the growth opportunities from the new co-product systems that are being installed in the efficiency improvements? Do the near-term economics impact the investment decisions at all, just given the backdrop? Or is it still on track as you do -- for the fourth quarter?

優秀的。而且我認為我所擁有的最後一個只是關於安裝在效率改進中的新副產品系統的增長機會？鑑於背景，近期經濟是否會影響投資決策？或者它是否仍然像你一樣在第四季度的軌道上？

Yes, we're still pretty much on track with the projects. We feel we're in a position to where we can continue to do these things. They're very important for the future. And I think we definitely want to keep them in front of us. And so far, we haven't pulled back on any of those projects.

是的，我們仍然在項目的軌道上。我們覺得我們可以繼續做這些事情。它們對未來非常重要。而且我認為我們絕對希望將它們放在我們面前。到目前為止，我們還沒有撤回任何這些項目。

(Operator Instructions) The next question comes from Eric Stine with Craig-Hallum.

（操作員說明）下一個問題來自 Eric Stine 和 Craig-Hallum。

So maybe just on the Hypro or CoPromax, and maybe it's a little bit early for this, but curious just what you're seeing on the commercial side, whether it's conversations with customers around products coming out of Magic Valley demand you anticipate? And if you're not necessarily in that stage yet, when would you anticipate locking in some of that demand under long-term agreements.

所以也許只是在 Hypro 或 CoPromax 上，也許現在有點早，但很好奇你在商業方面看到了什麼，是否圍繞你預期的 Magic Valley 需求的產品與客戶進行對話？如果你還不一定處於那個階段，你預計什麼時候會根據長期協議鎖定部分需求。

It's unique at Magic Valley. I think we've said before that we have a great relationship with the person we've done commodity marketing with in that area for a long time. And we have done a lot of work getting samples out in front of folks talking to a lot of the customers that they have relationships with. And again, it's a very unique market. It's a growing market. There's a huge demand for protein. Aquaculture is big in that area, and we're extremely optimistic with Magic Valley that we'll be able to market the product as soon as it's available.

這在魔法谷是獨一無二的。我想我們之前已經說過，我們與我們在該領域長期從事商品營銷的人有著良好的關係。我們已經做了很多工作，在與他們有關係的許多客戶交談的人們面前提供樣品。再說一次，這是一個非常獨特的市場。這是一個不斷增長的市場。對蛋白質的需求量很大。水產養殖在那個領域很大，我們對魔術谷非常樂觀，我們將能夠在產品上市後儘快上市。

Got it. Okay. And then maybe just turning to Pekin. I guess in your prepared remarks you mentioned that you had a -- I think it was a $5 million project and it was targeted at efficiencies at that plant. So, I mean, we should take that as that's not additional volumes. Is that just -- I mean, is it certain systems that would contribute to that efficiency or what? Maybe more detail on that targeted investment.

知道了。好的。然後也許只是轉向北京。我猜你在準備好的評論中提到你有一個 - 我認為這是一個 500 萬美元的項目，它的目標是提高該工廠的效率。所以，我的意思是，我們應該接受它，因為這不是額外的數量。這只是——我的意思是，是某些系統會有助於提高效率還是什麼？也許更多關於目標投資的細節。

Yes. That particular project is actually enhancement of our GNS system to improve the quality of that product. One of the things with Eagle is they have very strong relationships in the beverage space. And in order to take advantage of that, well, we make a very good product out of our GNS system, upping the grade was something that we felt would be very beneficial. And with the help of Eagle, we feel we can penetrate that market further. So that's what that investment is all about. So, it's going to be a margin enhancer. And that's really where the added EBITDA comes through.

是的。該特定項目實際上是增強我們的 GNS 系統以提高該產品的質量。 Eagle 的一件事是他們在飲料領域有著非常牢固的關係。為了利用這一點，嗯，我們用我們的 GNS 系統製作了一個非常好的產品，提高等級是我們認為非常有益的事情。在 Eagle 的幫助下，我們認為我們可以進一步打入該市場。這就是投資的全部意義所在。所以，這將是一個利潤增強劑。這確實是增加的 EBITDA 的來源。

Got it. That's helpful. And maybe last one for me. Obviously, I'm not going to ask what you think 2023 volumes are contracted. But just what kind of impact do you think having the, as you said, redundancy of those certifications across Pekin, what type of opportunity that potentially opens up or maybe conversely, just maybe what you potentially missed out on in 2022 that you might have otherwise had if you had those certifications in hand?

知道了。這很有幫助。也許對我來說是最後一個。顯然，我不會問你認為 2023 年的合同量是多少。但是，正如您所說，您認為這些認證在北京的冗餘會產生什麼樣的影響，可能會打開什麼類型的機會，或者相反，也許您可能會在 2022 年錯過什麼，否則您可能會錯過什麼如果你手頭有這些證書？

Well, I think the certainty of supply to customers is incredibly important. And one of the things we're very fortunate with the campus that we have in Pekin, we have 2 facilities that can produce the high-quality products. And it was important that we had that redundancy across the system. If you had a hiccup on one side, you've got the other side to create that redundancy. And that's very important to the customer base. We've talked to several of our existing customers and they see a tremendous value and benefit in having that redundancy.

嗯，我認為向客戶供應的確定性非常重要。我們非常幸運的一件事是我們在北京的校園，我們有兩個可以生產高質量產品的設施。重要的是我們在整個系統中擁有這種冗餘。如果您在一側出現問題，那麼您將在另一側創建冗餘。這對客戶群非常重要。我們已經與幾個現有客戶進行了交談，他們看到了這種冗餘的巨大價值和好處。

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

問答環節到此結束。我想將會議轉回給首席執行官邁克·坎德里斯（Mike Kandris），以發表任何閉幕詞。

Thank you, operator, and thank you again for joining us today and for your continued support. We are excited about the progress we've made, and we continue -- as we continue to execute on our strategic plan, we feel extremely optimistic about the future of Alto and look forward to sharing more with you in future quarters. Thank you.

感謝您，運營商，再次感謝您今天加入我們並繼續支持。我們對我們取得的進展感到興奮，我們將繼續——隨著我們繼續執行我們的戰略計劃，我們對 Alto 的未來感到非常樂觀，並期待在未來幾個季度與您分享更多信息。謝謝你。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。