Arq Inc (ARQ) 2022 Q4 法說會逐字稿

Hello, and welcome to the Advanced Emissions Solutions Q4 2022 Earnings Call. My name is Lauren, and I will be coordinating your call today. (Operator Instructions)

大家好，歡迎來到 Advanced Emissions Solutions 2022 年第四季度財報電話會議。我叫勞倫，今天我將負責協調您的來電。 （操作員說明）

I will now hand you over to your host, Ryan Coleman with Investor Relations to begin. Ryan, please go ahead.

我現在將把你交給你的主持人 Ryan Coleman 與投資者關係開始。瑞安，請繼續。

Thank you. Good morning, everyone. Thank you for joining us today for the fourth quarter and full year 2022 earnings results call. With me on the call this morning are Greg Marken, Chief Executive Officer, President and Treasurer; as well as Morgan Fields, Chief Accounting Officer. This call is being webcasted live within the Investors section of our website and the downloadable version of todays presentation is available there as well. A webcast replay will also be available on our site. You can contact Alpha IR Group for Investor Relations support at (312) 445-2870.

謝謝。大家，早安。感謝您今天加入我們，參加 2022 年第四季度和全年收益結果電話會議。今天早上和我一起打電話的是首席執行官、總裁兼財務主管 Greg Marken；以及首席會計官 Morgan Fields。此電話會議正在我們網站的投資者部分進行網絡直播，今天的演示文稿的可下載版本也在那裡提供。我們的網站上也將提供網絡廣播重播。您可以致電 (312) 445-2870 聯繫 Alpha IR Group 以獲得投資者關係支持。

Let me remind you that the presentation and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act. These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future results, performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements.

讓我提醒您，今天的陳述和評論包括《證券交易法》第 21E 條所定義的前瞻性陳述。這些陳述基於我們目前可獲得的信息，涉及可能導致實際未來結果、業績和業務前景及機會與這些陳述中明示或暗示的內容存在重大差異的風險和不確定性。

These risks and uncertainties include, but are not limited to, those factors identified on Slide 2 of today's slide presentation, in our Form 10-K for the year ended December 31, 2022, and other filings with the Securities and Exchange Commission. Except as expressly required by securities laws, the company undertakes no obligation to update those factors or any other forward-looking statements to reflect future events, developments or retain circumstances or for any other reason. In addition, it is especially important to review the presentation and today's remarks in conjunction with the GAAP references in the financial statements.

這些風險和不確定性包括但不限於今天幻燈片演示的幻燈片 2、我們截至 2022 年 12 月 31 日止年度的 10-K 表格以及向美國證券交易委員會提交的其他文件中確定的那些因素。除非證券法明確要求，否則公司不承擔更新這些因素或任何其他前瞻性陳述以反映未來事件、發展或保留情況或任何其他原因的義務。此外，結合財務報表中的 GAAP 參考來審查演示文稿和今天的評論尤為重要。

With that, I'll turn the call over to Greg.

有了這個，我會把電話轉給格雷格。

Thank you, Ryan, and thanks to everyone for joining us this morning. This is our first earnings call since the closing of the Arq acquisition, and as such, I'd like to extend a special welcome to our new team members from Arq as well as any new shareholders who are joining on today's call. We are truly excited as we begin executing our new plan to transform and capitalize on the complementary nature of our combined assets and teams to become a diversified, leading environmental technology company.

謝謝你，Ryan，感謝大家今天早上加入我們。這是自 Arq 收購結束以來我們的第一次財報電話會議，因此，我要特別歡迎來自 Arq 的新團隊成員以及參加今天電話會議的所有新股東。當我們開始執行我們的新計劃以轉變和利用我們合併後的資產和團隊的互補性，成為一家多元化、領先的環境技術公司時，我們感到非常興奮。

I'll cover more on this transformative plan, which will begin in 2023, but first, I'd like to review our fourth quarter and full year 2022 results. We delivered a solid fourth quarter of consumable sales and production at Red River, which culminated in a record full year revenue performance, exceeding our original expectations for 2022. Consumables revenue for the quarter was $23.4 million compared to $23.2 million in the prior year. Our fourth quarter production and sales revenue remained strong. However, the volumes were not as strong as what we had seen in prior quarters with the elevated average natural gas pricing experienced early in the year. The declining natural gas prices during much of the fourth quarter lowered demand from our power generation customers, which we have continued to see during the first quarter of 2023.

我將詳細介紹這項將於 2023 年開始的轉型計劃，但首先，我想回顧一下我們 2022 年第四季度和全年的業績。我們在紅河第四季度實現了穩健的消耗品銷售和生產，最終實現了創紀錄的全年收入表現，超出了我們對 2022 年的最初預期。本季度的消耗品收入為 2340 萬美元，而去年同期為 2320 萬美元。我們第四季度的生產和銷售收入依然強勁。然而，銷量不如我們在前幾個季度看到的那樣強勁，因為今年早些時候天然氣平均價格上漲。第四季度大部分時間天然氣價格下跌降低了我們發電客戶的需求，我們在 2023 年第一季度繼續看到這種情況。

Our full year total revenue of $103 million represents a year-over-year increase compared to the prior year, despite $14 million of royalties from our Tinuum investments in 2021 that did not occur in 2022 due to the conclusion of the Section 45 tax credit generation period at the end of 2021. Looking solely at our consumables revenues, they increased 20% year-over-year due to a combination of strong demand from power generation customers, pricing initiatives and product -- product mix improvements.

我們的全年總收入為 1.03 億美元，與上一年相比同比增長，儘管由於第 45 條稅收抵免生成的結束，我們在 2021 年從 Tinuum 投資中獲得了 1400 萬美元的特許權使用費，但在 2022 年沒有發生截至 2021 年底。僅從我們的消耗品收入來看，由於發電客戶的強勁需求、定價舉措和產品——產品組合的改進，它們同比增長了 20%。

For the quarter, we reported a net loss of $3.2 million compared to net income of $5.8 million in 2021. We recorded an adjusted EBITDA loss of $1.2 million compared to adjusted EBITDA of $9.1 million in 2021. The variance in year-over-year results is primarily the effect of the wind down of our Tinuum investments in 2021 and additional costs in the current year related to our strategic process.

本季度，我們報告的淨虧損為 320 萬美元，而 2021 年的淨收入為 580 萬美元。我們記錄的調整後 EBITDA 虧損為 120 萬美元，而 2021 年調整後的 EBITDA 為 910 萬美元。同比結果的差異主要是我們在 2021 年結束 Tinuum 投資以及今年與我們的戰略流程相關的額外成本的影響。

Our Red River production volume during the quarter was lower than anticipated due to incremental unplanned downtime for maintenance. However, our full year 2022 production volume, including the impact of blended carbons, exceeded our overall expectations. While our operations may continue to remain constrained at various points by tight manufacturing capacity, sourcing of product from third parties and the overall inflationary environment, we continue to improve our inventory position, both from an overall volume and product mix perspective. We ended the year with a strong cash position of $76.4 million, which will facilitate our capital expenditure plans for 2023. Those efforts will be focused on growth projects related to the Arq acquisition as well as ongoing organic investment in our manufacturing assets to continue to enable high production and operational rates from those assets. As a reminder, in September, we announced that we had reached an agreement to sell Marshall Mine to Caddo Creek Resource company, subject to certain closing conditions. This transaction will allow us to continue to derisk our balance sheet as we focus on our future initiatives related to the Arq assets and integration. Upon closing, the asset retirement obligation and other liabilities, which totaled approximately $4.9 million as of year-end, will be removed from our balance sheet. In addition, we expect a portion of our restricted cash to be released as that asset retirement obligation goes away. We continue to expect that the Marshall Mine transaction will close during the first half of this year.

由於維護的計劃外停機時間增加，本季度我們的紅河產量低於預期。然而，我們 2022 年的全年產量（包括混合碳的影響）超出了我們的總體預期。雖然我們的運營可能會繼續因製造能力緊張、從第三方採購產品和整體通脹環境而在各個方面受到限制，但我們繼續從整體數量和產品組合的角度改善我們的庫存狀況。我們以 7640 萬美元的強勁現金頭寸結束了這一年，這將促進我們 2023 年的資本支出計劃。這些努力將集中在與 Arq 收購相關的增長項目以及對我們製造資產的持續有機投資，以繼續實現這些資產的高生產率和運營率。提醒一下，我們在 9 月份宣布，我們已達成協議，將 Marshall 礦出售給 Caddo Creek Resource 公司，但須滿足特定的成交條件。這項交易將使我們能夠繼續降低資產負債表的風險，因為我們專注於與 Arq 資產和整合相關的未來計劃。交易結束後，截至年底總計約 490 萬美元的資產報廢義務和其他負債將從我們的資產負債表中刪除。此外，我們預計隨著資產退休義務的消失，我們的部分受限現金將被釋放。我們繼續預計 Marshall Mine 交易將在今年上半年完成。

Turning to our outlook for 2023. We expect a strong top line as we balance internal actions around pricing initiatives and a diverse sales and commercial pipeline, though we acknowledge that persistently lower natural gas prices could hinder demand and revenue performance from our power generation customers and therefore, could also impact other markets.

談到我們對 2023 年的展望。我們預計，隨著我們平衡圍繞定價舉措的內部行動以及多樣化的銷售和商業管道，我們預計會有強勁的收入，儘管我們承認持續較低的天然氣價格可能會阻礙我們發電客戶的需求和收入表現，以及因此，也可能影響其他市場。

Also of note, our regularly scheduled plant maintenance activity that occurs every 2 years is scheduled to take place in April. The associated downtime is expected to last approximately 2 weeks, which is normal for a maintenance exercise of this nature. As we have planned for this downtime, we will ensure that we have sufficient inventory on hand to continue to meet customer demand and minimize any disruption during this period. During 2023, we expect that our margins will continue to be pressured by the higher cost per unit of production as a result of the routine plant turnaround, external sourcing of supplemental carbon, albeit at reduced volumes, as well as inflationary aspects on a number of operational costs. We are attempting to alleviate these manufacturing cost pressures through increased average selling price and positive changes in our product mix, as well as targeting markets and end-use customers with improved economics. We continue to be encouraged by our ability to realign contracts with current market conditions when possible, and as a result, our ASP continues to trend higher.

另外值得注意的是，我們每 2 年進行一次的定期工廠維護活動計劃於 4 月進行。相關的停機時間預計將持續大約 2 週，這對於這種性質的維護活動來說是正常的。由於我們已為此次停機做好計劃，因此我們將確保手頭有足夠的庫存，以繼續滿足客戶需求，並儘量減少在此期間的任何中斷。在 2023 年期間，我們預計我們的利潤率將繼續受到更高的單位生產成本的壓力，原因是工廠的常規檢修、補充碳的外部採購（儘管數量減少）以及許多領域的通貨膨脹方面運營成本。我們正試圖通過提高平均銷售價格和積極改變我們的產品組合，以及以提高經濟效益瞄準市場和最終用戶來緩解這些製造成本壓力。在可能的情況下，我們有能力根據當前市場條件重新調整合同，這讓我們繼續感到鼓舞，因此，我們的平均售價繼續呈上升趨勢。

As mentioned, we are also commencing capital projects to modify the Red River and Corbin sites in order to enable commercial-scale GAC and Arq powder production. In addition, we are taking other technical and commercial steps to position the combined business for success, when production and sales of GAC products derived from Arq powder ultimately begin.

如前所述，我們還啟動了改造紅河和科爾賓場地的資本項目，以實現商業規模的 GAC 和 Arq 粉末生產。此外，我們正在採取其他技術和商業步驟來使合併後的業務取得成功，屆時將最終開始生產和銷售源自 Arq 粉末的 GAC 產品。

We believe these ongoing investments and efforts will lead to a more diversified commercial portfolio with a path towards improved and sustainable economic performance for our business on a long-term basis. I'll discuss these initiatives in more detail later on the call. And finally, for the full year, we are forecasting approximately $106 million in revenue and an EBITDA loss of roughly $6 million, excluding onetime acquisition costs.

我們相信，這些持續的投資和努力將帶來更加多元化的商業組合，並為我們的業務長期改善和可持續的經濟績效開闢道路。我將在稍後的電話會議上更詳細地討論這些舉措。最後，對於全年，我們預測收入約為 1.06 億美元，EBITDA 虧損約為 600 萬美元，不包括一次性收購成本。

With that, I will turn the call over to Morgan to review our financial performance in greater detail.

有了這個，我將把電話轉給摩根，以更詳細地審查我們的財務業績。

Thank you, Greg. Slide 4 provides a snapshot of our fourth quarter and full year financial performance. Fourth quarter revenue and cost of revenue were $23.4 million and $17.5 million, respectively, compared to $25.8 million and $16.9 million in 2021. Revenues and -- revenues and cost of revenues for the full year were $103 million and $80.5 million, respectively, compared to $100.3 million and $65.6 million in 2021. The increase in revenue was primarily driven by higher sales of consumable products as well as successful pricing initiatives, which were partially offset by the nonrecurrence of royalty earnings from Tinuum investments that we recognized in 2021.

謝謝你，格雷格。幻燈片 4 簡要介紹了我們第四季度和全年的財務業績。第四季度收入和收入成本分別為 2340 萬美元和 1750 萬美元，而 2021 年為 2580 萬美元和 1690 萬美元。全年收入和收入成本分別為 1.03 億美元和 8050 萬美元，相比之下2021 年分別為 1.003 億美元和 6560 萬美元。收入的增長主要是由消耗品銷售額的增加以及成功的定價舉措推動的，這部分被我們在 2021 年確認的 Tinuum 投資的非經常性特許權使用費收入所抵消。

Product volumes in 2022 were higher in power generation, primarily due to higher natural gas prices compared to the prior year, which contributed to increased demand for our products, although that benefit faded in the fourth quarter as natural gas prices began to decline. Fourth quarter, other operating expenses were $9.3 million compared to $8.1 million for the fourth quarter of 2021. Other operating expenses for the total year totaled $34.6 million compared to $29.9 million in the prior year. The increase is mainly the result of higher legal and professional fees associated with the company's strategic review process as well as the gain on the change in estimate for the asset retirement obligation that occurred in 2021. This was partially offset by the lower payroll and benefits expense.

2022 年發電產品量增加，這主要是由於天然氣價格與上一年相比較高，這導致對我們產品的需求增加，儘管隨著天然氣價格開始下降，這一優勢在第四季度逐漸消退。第四季度，其他運營費用為 930 萬美元，而 2021 年第四季度為 810 萬美元。全年其他運營費用總計 3460 萬美元，上年同期為 2990 萬美元。增加的主要原因是與公司戰略審查過程相關的法律和專業費用增加，以及 2021 年發生的資產報廢義務估計變更收益。這被較低的工資和福利費用部分抵消.

Fourth quarter earnings from equity method investments totaled $3 million compared to $6.8 million in the prior year. For the full year, earnings from equity method investments totaled $3.5 million compared to $68.7 million in 2021. The decline was the result of all remaining invested refined coal facilities reaching the end of their tax credit generation period as of December 31, 2021. The company does not expect any material distributions from Tinuum investments going forward.

第四季度權益法投資收益總計 300 萬美元，上年同期為 680 萬美元。全年，權益法投資收益總計 350 萬美元，而 2021 年為 6870 萬美元。下降的原因是截至 2021 年 12 月 31 日，所有剩餘投資的精煉煤設施都已達到稅收抵免產生期結束。公司預計未來 Tinuum 投資不會有任何重大分配。

The company recognized $0.2 million of income tax expense for the fourth quarter and full year 2022 compared to income tax expense of $1.7 million for the fourth quarter of 2021 and income tax expense of $15.7 million in the full year 2021.

公司確認了 2022 年第四季度和全年的所得稅費用 20 萬美元，而 2021 年第四季度的所得稅費用為 170 萬美元，2021 年全年的所得稅費用為 1570 萬美元。

Fourth quarter net loss was $3.2 million or $0.17 per diluted share compared to positive net income of $5.8 million or $0.31 per diluted share in the prior year. The company recorded a net loss of $8.9 million or $0.48 per diluted share during the full year compared to a positive net income of $60.4 million or $3.27 per diluted share in 2021. Fourth quarter adjusted EBITDA was a loss of $1.2 million compared to a positive $9.1 million in the prior year while full year adjusted EBITDA was $1.3 million compared to $84.9 million in the prior year.

第四季度淨虧損為 320 萬美元或攤薄後每股 0.17 美元，而去年同期為正淨收入 580 萬美元或攤薄後每股 0.31 美元。該公司全年錄得淨虧損 890 萬美元或攤薄後每股收益 0.48 美元，而 2021 年的淨收入為正淨收入 6040 萬美元或攤薄後每股收益 3.27 美元。第四季度調整後的 EBITDA 虧損 120 萬美元，而 2021 年為正淨收入 9.1 美元百萬美元，而全年調整後的 EBITDA 為 130 萬美元，而去年為 8490 萬美元。

The declines in net income and adjusted EBITDA were again due to lower earnings from equity method investments as a result of the wind down of the Tinuum investment.

淨收入和調整後 EBITDA 的下降再次是由於 Tinuum 投資的結束導致權益法投資收益下降。

Cash balances as of December 31, including restricted cash, totaled $76.4 million compared to $88.8 million as of December 31, 2021. As of December 31, 2022, the company's only debt outstanding were finance lease obligation, which totaled $4.6 million. Full year CapEx was $9.5 million compared to $7.5 million in 2021. We anticipate an elevated level of CapEx in 2023 between $40 million and $45 million, driven by enhanced capabilities to enable future GAC production and amounts for the planned plant turnaround as well as the completion of certain planned projects, that were started in 2022 and are scheduled to be completed during the turnaround.

截至 12 月 31 日，包括受限現金在內的現金餘額總計 7640 萬美元，而截至 2021 年 12 月 31 日為 8880 萬美元。截至 2022 年 12 月 31 日，公司唯一未償債務是融資租賃債務，總計 460 萬美元。全年資本支出為 950 萬美元，而 2021 年為 750 萬美元。我們預計 2023 年的資本支出水平將提高到 4000 萬美元至 4500 萬美元之間，這得益於增強的能力以實現未來的 GAC 生產以及計劃中的工廠周轉和完工的金額某些計劃中的項目於 2022 年開始，計劃在周轉期間完成。

As Greg mentioned, we expect the sale of Marshall Mine to close during the first half of the year. As previously discussed, we anticipate paying roughly $2.4 million to Caddo Creek, subject to certain adjustments, which will eliminate the asset retirement obligation from our balance sheet and remove all future cash outflows associated with the reclamation of the mine. We also expect a portion of our restricted cash to be released upon closing of the transaction. Lastly, upon the completion of the Arq acquisition, we expect to retain approximately $86 million of our existing federal tax credits, which may be -- utilized to offset future federal tax payments that we may owe as the business grows in the coming years.

正如 Greg 提到的，我們預計 Marshall Mine 的出售將在今年上半年完成。如前所述，我們預計向 Caddo Creek 支付大約 240 萬美元，但會進行某些調整，這將從我們的資產負債表中消除資產報廢義務，並消除與礦山復墾相關的所有未來現金流出。我們還預計我們的部分受限現金將在交易結束後釋放。最後，在完成對 Arq 的收購後，我們預計將保留大約 8600 萬美元的現有聯邦稅收抵免額，這些抵免額可能會用於抵消未來幾年隨著業務增長我們可能欠的聯邦稅款。

I'll now turn the call back to Greg.

我現在將電話轉回給格雷格。

Thanks, Morgan. Slide 5 again highlights the synergistic nature of the combined ADES and Arq businesses. Pre-acquisition, ADES was a top 3 producer of activated carbon products in North America with the ability to potentially serve an estimated 35% of the activated carbon market with our lignite-based portfolio of products.

謝謝，摩根。幻燈片 5 再次強調了合併後的 ADES 和 Arq 業務的協同性質。收購前，ADES 是北美前 3 大活性炭產品生產商，有能力通過我們基於褐煤的產品組合為大約 35% 的活性炭市場提供服務。

Post-acquisition, utilizing both ADES's existing lignite-based feedstock and Arq powder as a bituminous-based feedstock, the combined company will be well positioned to provide activated carbon products that serve more than 80% of the North American activated carbon markets, and we'll do so through an expanded focus in Granular Activated Carbon, or GAC products, which will generally provide higher value and higher-margin opportunities. We will benefit from our strong existing customer base, and we will be able to pursue new, diverse and high-growth end markets served by both powder and GAC products. This diversification of our product offering will mitigate longer-term headwinds that our existing lignite-focused business would otherwise encounter, specifically within the declining coal-fired power generation market.

收購後，利用 ADES 現有的褐煤基原料和 Arq 粉末作為瀝青基原料，合併後的公司將能夠提供活性炭產品，服務於超過 80% 的北美活性炭市場，我們將通過擴大對顆粒活性炭或 GAC 產品的關注來實現這一目標，這些產品通常會提供更高價值和更高利潤的機會。我們將受益於我們強大的現有客戶群，我們將能夠追求由粉末和 GAC 產品服務的新的、多樣化的和高增長的終端市場。我們產品的這種多樣化將減輕我們現有的以褐煤為重點的業務可能會遇到的長期不利因素，特別是在不斷下滑的燃煤發電市場中。

As such, this acquisition provides us with a longer-term, sustainable and diversified product mix and facilitates participation in higher-margin activated carbon products and end markets.

因此，此次收購為我們提供了更長期、可持續和多樣化的產品組合，並促進了對利潤率更高的活性炭產品和終端市場的參與。

In addition, we expect the acquisition to yield a competitive advantage via product performance, longer-term sustainable product cost and environmental benefits compared to other activated carbon producers. The competitive value of securing a high-quality domestically sourced feedstock that is cost competitive and vertically integrated into the combined operations -- and that has been shown to create high-performance products is significant.

此外，與其他活性炭生產商相比，我們預計此次收購將通過產品性能、長期可持續產品成本和環境效益產生競爭優勢。獲得具有成本競爭力並垂直整合到聯合運營中的高質量國內原料的競爭價值——並且已被證明可以創造高性能產品。

We will be the only North American activated carbon manufacturer that controls 100% of of its primary feedstock needs, both through our existing resource operations as well as through the access to Arq powder. Further providing a platform for long-term success is the fact that Arq's composition and processes for converting coal waste into Arq powder are patent protected. We believe that the combination of our existing technical, operating and sales capabilities presents reduced execution risk as we enhance the production capabilities of the business and transition to producing a broader range of products.

我們將成為北美唯一一家 100% 控制其主要原料需求的活性炭製造商，無論是通過我們現有的資源運營還是通過獲取 Arq 粉末。 Arq 的成分和將煤廢料轉化為 Arq 粉末的工藝受專利保護，這進一步為長期成功提供了平台。我們相信，隨著我們提高業務的生產能力並過渡到生產更廣泛的產品，我們現有的技術、運營和銷售能力的結合會降低執行風險。

Our proven manufacturing assets, product technology, applications expertise, sales channels and customers within the activated carbon markets, when combined with Arq's patented feedstock, Corbin facility and access to nonactivated carbon markets, provide a platform to transform our existing business as we know it today.

我們在活性炭市場內經過驗證的製造資產、產品技術、應用專業知識、銷售渠道和客戶，與 Arq 的專利原料、Corbin 設施和進入非活性炭市場的渠道相結合，提供了一個平台來改造我們今天所知道的現有業務.

And finally, Slide 6 provides our outlook and key milestones for 2023. First and foremost, we will continue to operate our Red River plant as we have historically while simultaneously looking to continue to grow and improve our existing business. We are focused on maintaining high renewal rates with existing PAC customers being selective within our bidding process and aligning our new contracts with market conditions to maximize our topline opportunities.

最後，幻燈片 6 提供了我們對 2023 年的展望和關鍵里程碑。首先，也是最重要的，我們將繼續像以往一樣運營我們的紅河工廠，同時尋求繼續發展和改善我們現有的業務。我們專注於維持高續訂率，現有 PAC 客戶在我們的投標過程中有選擇性，並使我們的新合同與市場條件保持一致，以最大限度地提高我們的收入機會。

As it relates to our acquisition of Arq, our first priority will be the integration of the Arq team, assets and operations. We are pleased with the integration efforts to date and are encouraged by the enthusiasm of our teams to begin executing our combined transformative business plan.

由於涉及我們對 Arq 的收購，我們的首要任務將是整合 Arq 團隊、資產和運營。我們對迄今為止的整合工作感到滿意，並為我們團隊開始執行我們的合併轉型業務計劃的熱情所鼓舞。

Operationally, our key focus will be on commencing the capital work to optimize both the Corbin and Red River facilities for industrial scale production of Arq powder and GAC products and developing the customer and sales channels entry into the GAC market. The most significant of these modifications relates to the Red River plant and includes the installation of shaping and heat treatment processes, enabling the processing of bituminous-based feedstock to manufacture new and higher-value GAC products.

在運營方面，我們的重點將放在啟動資本工作以優化 Corbin 和 Red River 設施，以實現 Arq 粉末和 GAC 產品的工業規模生產，並開發進入 GAC 市場的客戶和銷售渠道。這些改造中最重要的涉及紅河工廠，包括安裝成型和熱處理工藝，使瀝青基原料的加工能夠製造出新的和更高價值的 GAC 產品。

We estimate that these 2023 growth-focused capital expenditures related to the initial phase of the business plan will be approximately $25 million to $30 million. It is important to note that PAC production at Red River and our deliveries to existing customers will not be interrupt -- interrupted by these capital improvements.

我們估計，與業務計劃初始階段相關的這些以 2023 年增長為重點的資本支出將約為 2500 萬至 3000 萬美元。需要注意的是，Red River 的 PAC 生產和我們向現有客戶的交付不會因這些資本改進而中斷。

Our focus will also be on securing lead customers and building our sales channels within the North American market for both GAC and other emerging products. We expect to undertake further product testing in all of these areas, which we believe will provide an opportunity to capitalize on the expanded capabilities in 2024 when the initial capital improvements are completed. Financially, for the full year 2023, we expect to generate roughly $106 million of revenue and an EBITDA loss of roughly $6 million, excluding onetime costs associated with the acquisition.

我們的重點還將放在確保主要客戶並在北美市場建立我們的 GAC 和其他新興產品的銷售渠道上。我們希望在所有這些領域進行進一步的產品測試，我們相信這將提供一個機會，在 2024 年初始資本改進完成後利用擴展的能力。在財務上，我們預計 2023 年全年將產生約 1.06 億美元的收入和約 600 萬美元的 EBITDA 虧損，不包括與收購相關的一次性成本。

To wrap up, we are very excited about the combined company and the opportunities ahead of us to meet the growing demands of the North American activated carbon market. The combined company will be able to pursue in market served by both powder and granular activated carbon products and will be only -- completely vertically integrated, activated carbon provider from feedstock to distribution. The diversification within our activated carbon markets and the ability to compete in other markets, where our -- environmentally beneficial products can be used in a variety of critical markets, will yield a diversified and materially stronger integrated business platform going forward. The result is a truly differentiated environmental technology company with new growth avenues and a path towards long-term sustainable profitability.

總而言之，我們對合併後的公司以及我們為滿足北美活性炭市場不斷增長的需求而面臨的機遇感到非常興奮。合併後的公司將能夠在粉末和顆粒活性炭產品所服務的市場上追求，並且將是唯一的 - 從原料到分銷的完全垂直整合的活性炭供應商。我們活性炭市場的多元化以及在其他市場競爭的能力，我們的環保產品可用於各種關鍵市場，這將產生一個多元化且實質上更強大的綜合業務平台。其結果是一家真正差異化的環境技術公司，擁有新的增長途徑和實現長期可持續盈利的途徑。

With that, I'll turn the call back over to our operator to move us to Q&A.

有了這個，我會把電話轉回給我們的接線員，讓我們進入問答環節。

(Operator Instructions)

（操作員說明）

Our first question comes from Gerry Sweeney from ROTH Capital.

我們的第一個問題來自 ROTH Capital 的 Gerry Sweeney。

You touched upon this a little bit, but just -- I'm curious about pricing and contracts. Could you give a little bit more detail on -- maybe the contract, how often they roll? And do you have any contracts that were maybe longer dated, maybe 1 to 2 years that maybe -- that have under market pricing that you could see improvement across, and -- if possible?

你稍微談到了這一點，但只是——我對定價和合同很好奇。你能否提供更多細節 - 也許是合同，他們多久滾動一次？你有沒有任何合同可能會過時，可能是 1 到 2 年 - 低於市場定價，你可以看到改進，並且 - 如果可能的話？

Yes. So generally, Gerry, the contracts within our portfolio are about 3 to 4 years in duration. So -- on an average basis, I would say, we'd always have about 25% of the portfolio turning just based on kind of those numbers. When we think about the portfolio and -- look at what we think might be current market pricing for the various products and those sort of things, I'd estimate that we probably have about 15% of our overall portfolio that may be below today's existing market pricing -- that -- as those contracts come up, we'll definitely work to renew -- towards the market environment that we're operating in.

是的。所以一般來說，Gerry，我們投資組合中的合同期限約為 3 至 4 年。所以——我想說，平均而言，我們總是有大約 25% 的投資組合只是根據這些數字的種類進行轉變。當我們考慮投資組合時——看看我們認為可能是各種產品和那些東西的當前市場定價，我估計我們可能有大約 15% 的整體投資組合可能低於今天的現有價格市場定價——當這些合同出現時，我們肯定會努力續約——以適應我們所處的市場環境。

Got you. And do all 15% of those contracts renew this year or some of it this year, next year, et cetera?

明白了這些合同中有 15% 是今年續簽，還是今年、明年等部分續簽？

I would say, some of those are a little further out, but there's a good portion of those that will be this year, Gerry.

我想說的是，其中一些有點遠，但今年會有很大一部分，Gerry。

Got you. Okay. Switching gears, Marshall Mine, I think you had about $10 million of unrestricted cash -- or I'm sorry, restricted cash on the balance sheet associated with -- I'm not sure if all of that $10 million is Marshall Mine. But I'm curious as to how much could come unlocked this year? And if there's other sort of gauge or milestone that unlock more in the future?

明白了好的。換檔，Marshall Mine，我想你有大約 1000 萬美元的不受限制的現金——或者對不起，資產負債表上的限制現金——我不確定這 1000 萬美元是否全部都是 Marshall Mine。但我很好奇今年能解鎖多少？如果將來還有其他類型的指標或里程碑可以解鎖更多？

Yes, Gerry, we estimate that probably 50% to 70% of that restricted cash will come off as that restriction will be freed up when we close this transaction. To get to that point, we're still going through all the regulatory approvals for that transaction. So we still think that's going to close in the first half of 2023.

是的，Gerry，我們估計可能有 50% 到 70% 的受限制現金會消失，因為當我們完成此交易時，該限制將被釋放。為了達到這一點，我們仍在通過該交易的所有監管批准。所以我們仍然認為這將在 2023 年上半年結束。

Okay. Got you. And then maybe a final question. Arq, I think it's a great acquisition, vertically integrate you, opens up a larger addressable market, higher value market, et cetera. So one question, but maybe really 2 in actuality. Just curious as to when you can maybe start seeing some revenue from some of the Arq products? Now granted -- this isn't all activated carbon related as we've talked about in the past, but I just wanted to get an idea when some revenue may start to hit the income statement from Arq-related production of -- the Arq powder?

好的。明白了然後可能是最後一個問題。 Arq，我認為這是一次偉大的收購，垂直整合你，開闢更大的潛在市場，更高價值的市場，等等。所以一個問題，但實際上可能真的是 2 個。只是好奇什麼時候可以開始從某些 Arq 產品中看到一些收入？現在授予 - 這並不像我們過去所說的那樣與所有活性炭相關，但我只是想知道什麼時候一些收入可能會開始影響與 Arq 相關的生產的損益表 - Arq粉末？

Right. So I think the plan, Gerry, is to materially complete most of the CapEx to enable us to start producing some product very early in the year next year out of the Corbin facility, and the Red River CapEx is going to take longer. So the first thing that we're going to do this year is really work on the additional testing opportunities that we have to bring some Arq additive-based products to market. The desire would be to do that in the early portion of 2024, and then later in 2024, probably around the fourth quarter time period as long as all the capital expenditures at Red River go according to the timelines that we anticipate. And that's going to be impacted by permitting and those sort of things that are out there, but that's when we would expect to start generating some revenue from the GAC-related products.

正確的。所以我認為 Gerry 的計劃是實質性地完成大部分資本支出，使我們能夠在明年年初從 Corbin 工廠開始生產一些產品，而紅河資本支出將需要更長的時間。因此，我們今年要做的第一件事就是利用額外的測試機會，我們必須將一些基於 Arq 添加劑的產品推向市場。我們希望在 2024 年初，然後在 2024 年晚些時候，大概在第四季度左右，只要紅河的所有資本支出都按照我們預期的時間表進行。這將受到許可和現有的那些事情的影響，但那是我們期望開始從 GAC 相關產品中產生一些收入的時候。

Greg and Gerry, We've also continued to include an invitation to submit questions ahead of time at the bottom of the conference call announcement press release and in yesterday afternoon's earnings press release. Thank you to those of you who sent in questions, and we continue to invite listeners to submit questions in future quarters. One question that we received was about power generation customers and natural gas. What are your expectations for power generation customers and the overall PAC business, if natural gas pricing remains low? And how much exposure do you have related to this market?

Greg 和 Gerry，我們還在電話會議公告新聞稿的底部和昨天下午的收益新聞稿中繼續包括提前提交問題的邀請。感謝你們中提出問題的人，我們將繼續邀請聽眾在未來的季度中提交問題。我們收到的一個問題是關於發電客戶和天然氣的。如果天然氣價格保持低位，您對發電客戶和整個 PAC 業務有何期望？您對這個市場有多少了解？

So Ryan, as we're aware, natural gas pricing has the potential to materially impact the demand and products that are needed by our power generation customers. Contrary to the expectations from various third parties as well as our own expectations during the third and fourth quarters of last year, natural gas pricing has not remained at the anticipated pricing levels. Additionally, we've seen further declines here in the first quarter. This kind of goes back to exactly why we did the Arq transaction. This provides a bituminous-based feedstock that allows us to diversify in the markets in general, but then also to transition to more of a GAC-focused business on a longer-term basis, which will help us have a broader earnings profile and more sustainability. As we think about the current year, if natural gas does remain low, it will impact demand just as it positively impacted demand really for the last 1.5 years in those power generation customers.

因此，Ryan，正如我們所知，天然氣定價有可能對發電客戶所需的需求和產品產生重大影響。與去年第三和第四季度各種第三方的預期以及我們自己的預期相反，天然氣定價並未保持在預期的定價水平。此外，我們在第一季度看到這裡進一步下降。這可以追溯到我們進行 Arq 交易的確切原因。這提供了一種基於瀝青的原料，使我們能夠在一般市場上實現多元化，但也可以在長期基礎上過渡到更多以 GAC 為重點的業務，這將幫助我們擁有更廣泛的盈利狀況和更具可持續性.當我們考慮今年時，如果天然氣確實保持低位，它將影響需求，就像它在過去 1.5 年對這些發電客戶的需求產生積極影響一樣。

And then a final question. Can you talk a bit about the combined R&D efforts for the company? Where do development efforts stand for the Colloidal Carbon Product for soil and groundwater remediation?

然後是最後一個問題。您能談談公司的聯合研發工作嗎？用於土壤和地下水修復的膠體碳產品的開發工作在哪裡？

Okay. I'll take both of those, Ryan. On a combined basis, we've begun the integration of our technology teams and have been very pleased with the power -- of combining the strengths of the respective company's technology efforts. The culture of tackling technology opportunities from idea to lab prototyping to customer engagement by both groups is very similar and focused. Specifically related to the development of our Colloidal Carbon, we have completed the development of our generation 1 product and have secured a manufacturing partner to produce commercial scale quantities. On a market front, we've also engaged various entities that are active within the marketplace, and we are prepared to provide them product that has been produced to meet their testing and treatment schedules.

好的。瑞安，我會接受這兩個。在合併的基礎上，我們已經開始整合我們的技術團隊，並對結合各自公司技術努力的力量感到非常滿意。從想法到實驗室原型再到客戶參與，這兩個群體在處理技術機會方面的文化非常相似且重點突出。特別是與我們的膠體碳的開發相關，我們已經完成了第一代產品的開發，並獲得了一個製造合作夥伴來生產商業規模的產品。在市場方面，我們還與市場上活躍的各種實體進行了接觸，我們準備向他們提供已生產的產品以滿足他們的測試和治療時間表。

Thanks, Greg, and thanks again to everybody who submitted questions. I'll turn the call back to Greg for any closing remarks here.

謝謝 Greg，再次感謝所有提交問題的人。我會把電話轉回給格雷格，讓他在這裡發表任何結束語。

Thank you, and thanks to everyone for joining the call this morning. We are eager to begin executing on our key actions for 2023 and plan to provide updates on these initiatives along the way. We look forward to speaking with everyone soon. Thanks.

謝謝，也感謝大家今天早上加入電話會議。我們渴望開始執行 2023 年的關鍵行動，併計劃在此過程中提供這些舉措的最新信息。我們期待盡快與大家交談。謝謝。

This concludes today's call. Thank you for joining. You may now disconnect.

今天的電話會議到此結束。感謝您的加入。您現在可以斷開連接。