Arq Inc (ARQ) 2024 Q2 法說會逐字稿

Greetings and welcome to the Arq second quarter 2024 earnings call. (Operator Instructions). As a reminder, this conference is being recorded.

您好，歡迎參加 Arq 2024 年第二季財報電話會議。（操作員說明）。提醒一下，本次會議正在錄製中。

I would now like to turn the conference over to your host Mr. Anthony Nathan, Head of Investor Relations for Arq. Thank you. You may begin.

現在我想將會議交給主持人 Arq 投資者關係主管 Anthony Nathan 先生。謝謝。你可以開始了。

Thank you, operator. Good morning everyone, and thank you for joining us today for our second quarter 2024 earnings results call. With me on the call today are Bob Rasmus, Arq's Chief Executive Officer and President; as well as Stacia Hansen, Arq's Treasurer and Chief Accounting Officer.

謝謝你，接線生。大家早安，感謝您今天參加我們的 2024 年第二季財報電話會議。今天與我一起參加電話會議的是 Arq 執行長兼總裁 Bob Rasmus；以及 Arq 的財務主管兼首席會計官 Stacia Hansen。

This conference call is being webcasted live within the Investors section of our website and a downloadable version of today's presentation is available there as well. A webcast replay will also be available on our site and you can contact Arq's Investor Relations team at investor@arq.com.

本次電話會議正在我們網站的投資者部分進行網路直播，並且還提供了今天簡報的可下載版本。我們的網站上也將提供網路廣播重播，您可以透過 Investor@arq.com 聯繫 Arq 的投資者關係團隊。

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，今天的演示和言論包含《證券交易法》第 21E 條中定義的前瞻性陳述。這些陳述基於我們目前掌握的信息，涉及風險和不確定性，可能導致未來實際結果、業績、業務前景和機會與這些陳述中明示或暗示的內容存在重大差異。

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-Q for the year ended June 30, 2024 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 forward-looking statements to reflect future events developments or changed circumstances or for any other reason.

這些風險和不確定性包括但不限於今天幻燈片演示的第二張幻燈片、我們截至 2024 年 6 月 30 日的年度 10-Q 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因素。除非證券法明確要求，否則本公司不承擔更新這些因素或任何前瞻性聲明以反映未來事件發展或情況變化或任何其他原因的義務。

In addition, it is especially important to review the presentation in today's remarks in conjunction with the GAAP references in the financial statements.

此外，結合財務報表中的 GAAP 參考資料來審查今天的發言中的簡報尤其重要。

With that, I would like to turn the call over to Bob.

有了這個，我想把電話轉給鮑伯。

Thank you, Anthony. And thanks to everyone for joining us this morning. To start today's call, I'd like to share a high-level review of our second quarter divided into four key sections, our financial results, progress on GAC contracting, progress on our strategic growth projects, and an update on our capital position.

謝謝你，安東尼。感謝大家今天早上加入我們。在今天的電話會議開始前，我想分享對我們第二季度的高層回顧，分為四個關鍵部分：我們的財務業績、GAC 承包進度、我們策略成長專案的進展以及我們資本狀況的最新情況。

First, driven by our ongoing strategic evolution and transformation, we reported another quarter of strong and sustainably enhanced financial performance. Once again, revenue improved over the prior year, reflecting an annual increase of 24% to $25.4 million. This was driven in part by our fifth consecutive quarter of double-digit year-over-year percentage growth in average selling price.

首先，在我們持續的策略演變和轉型的推動下，我們報告了另一個季度強勁且持續增強的財務表現。收入再次較上一年有所改善，年增長率為 24%，達到 2,540 萬美元。這在一定程度上是由於我們的平均售價連續第五個季度實現兩位數同比增長。

We realized attractive gross margins of 32%, reflecting an improvement of more than 700 basis points over the same period last year as we continue to sustainably drive costs down across our business and focus on optimizing our PAC portfolio.

隨著我們繼續持續降低整個業務的成本並專注於優化 PAC 產品組合，我們實現了 32% 的毛利率，較去年同期提高了 700 個基點以上。

We generated positive EBITDA during the quarter of approximately $450,000, marking the first consecutive quarter of year-over-year improvement and evidencing the benefits of our initiatives to drive greater profitability in our foundational PAC business. This positive adjusted EBITDA performance is very much in line with our expectations and demonstrates the positive directional trend of our legacy business.

我們在本季度產生了約 45 萬美元的正 EBITDA，這是連續第一個季度同比改善，並證明了我們為提高基礎 PAC 業務盈利能力而採取的舉措所帶來的好處。這種積極的調整後 EBITDA 表現非常符合我們的預期，並顯示了我們傳統業務的正面方向趨勢。

Importantly, these results were achieved despite a strategic acceleration of certain of our biennial maintenance activities in April, which accounted for approximately $1.4 million of cost during the quarter. Of note, if we were to exclude this cost out of our cost of goods sold, gross margin would have been even better.

重要的是，儘管我們在 4 月策略性地加速了某些兩年期維護活動（佔本季成本約 140 萬美元），但仍取得了這些成果。值得注意的是，如果我們將這筆成本從銷售成本中排除，毛利率會更好。

Our plant shutdown activities and expenses related to physically connecting the GAC facility to our legacy Red River plant will enable us to capture multiple operational synergies. The next scheduled full plant maintenance will now occur in 2026 versus 2025 as would have been the case without our strategic decision to accelerate this year.

我們的工廠關閉活動以及與 GAC 設施與我們的舊紅河工廠物理連接相關的費用將使我們能夠獲得多種營運協同效應。下一次計畫的全廠維護將於 2026 年進行，而不是 2025 年，如果我們今年沒有做出加速的戰略決策，情況就會如此。

As a reminder, the first two quarters of the year generally reflect seasonally weak periods, but we were encouraged at the strong and improving activity we saw during the second quarter, which provides strong momentum as we head into our seasonally stronger quarters during the second half.

提醒一下，今年前兩個季度通常反映季節性疲軟時期，但我們對第二季度看到的強勁且改善的活動感到鼓舞，這為我們進入下半年季節性強勁的季度提供了強勁動力。

We continue to expect our PAC business to be cash flow generative for the full year, creating a solid foundation on which to layer our accretive, higher margin GAC revenues and cash flows.

我們仍然預計我們的 PAC 業務將在全年產生現金流，為我們不斷增加、利潤率更高的 GAC 收入和現金流奠定堅實的基礎。

Second, we're following through on our commitment to secure additional contracts at our Red River GAC facility. We are now 52% contracted on our nameplate capacity with roughly six months left to initial production, evidencing the strong demand for our differentiated products and solutions.

其次，我們正在兌現我們的承諾，在紅河 GAC 工廠獲得更多合約。目前，我們的銘牌產能已簽約 52%，距離初始生產還剩約六個月，證明了對我們差異化產品和解決方案的強勁需求。

Our agreements continue to reflect attractive pricing for products that are materially accretive to our foundational PAC portfolio, further supporting the capital we're investing in this exciting growth portion of our business.

我們的協議繼續體現出具有吸引力的產品定價，這些產品對我們的基礎 PAC 產品組合有實質性的增值，進一步支持我們投資於這一令人興奮的業務增長部分的資本。

Third, our key growth projects are on track. At our Corbin facility, we commenced commissioning early during the second quarter and began producing initial purified bituminous coal waste feedstock for quality control and specification testing, which will ramp up ahead of our first production at Red River. And at our Red River GAC facility, we remain on track for Q4 commissioning as well as first deliveries in Q1 of 2025.

三是重點發展項目已步入正軌。在我們的科爾賓工廠，我們在第二季度初期開始調試，並開始生產最初的純化煙煤廢料原料，用於品質控制和規格測試，這將在我們在紅河的首次生產之前加速生產。在我們的紅河 GAC 工廠，我們仍將按計劃進行第四季度的調試以及 2025 年第一季的首次交付。

Today, we are reiterating our full 2024 capital investment forecast of $60 million to $70 million. We expect our investment in these projects will generate payback in approximately three years.

今天，我們重申 2024 年全部資本投資預測為 6,000 萬至 7,000 萬美元。我們預計這些項目的投資將在大約三年內產生回報。

Fourth, we continue to bolster our capital position while strategically investing in our ongoing transformation. This includes an opportunistic capital raise completed in May with a $15 million pipe raise completed with an institutional investor. This unsolicited investment further bolstered our liquidity position as we continue to invest in transformational projects with highly attractive expected returns.

第四，我們繼續加強我們的資本狀況，同時對我們正在進行的轉型進行策略性投資。其中包括 5 月完成的機會主義融資，其中與機構投資者完成了 1500 萬美元的管道融資。隨著我們繼續投資具有極具吸引力的預期回報的轉型項目，這項主動投資進一步增強了我們的流動性狀況。

And related to our previously discussed refinancing, we announced today that we recently signed a nonbinding term sheet that would materially expand the size of the facility while further enhancing liquidity. More on that in just a bit.

與我們之前討論的再融資相關，我們今天宣布，我們最近簽署了一份不具約束力的條款清單，該條款清單將大幅擴大該融資規模，同時進一步增強流動性。稍後會詳細介紹這一點。

I'd now like to hit on a few other notable recent events. We were pleased to recently announce that Arq has been added to both the broad market Russell 3000 index and the Russell 2000 index. This inclusion is a significant achievement for us and reflects the hard work and dedication of our entire team.

現在我想談談最近發生的其他一些值得注意的事件。我們最近很高興地宣布 Arq 已被添加到大市場 Russell 3000 指數和 Russell 2000 指數中。此次入選對我們來說是一項重大成就，反映了我們整個團隊的辛勤工作和奉獻精神。

Being part of these widely recognized and respected benchmarks for US stock market performance is a testament to our company's growth and evolution. It underscores the success of our strategic initiatives and our ongoing transformation into a leading environmental technology company.

成為這些廣受認可和尊重的美國股市表現基準的一部分，證明了我們公司的成長和發展。它強調了我們策略舉措的成功以及我們不斷轉型為領先的環境技術公司。

As you are likely aware, Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. We anticipate that our inclusion in the Russell family of indices will bring several benefits including broadened exposure to the investment community and greater liquidity in our stock.

您可能知道，羅素指數被投資經理人和機構投資者廣泛用於指數基金，並作為主動投資策略的基準。我們預計，納入羅素指數系列將帶來多項好處，包括擴大投資界的曝險以及提高我們股票的流動性。

During our first quarter earnings call in May, we were proud to announce our inaugural GAC supply contract, marking a tremendous milestone in our strategic evolution. In the months since our last earnings call, we have continued to make progress in our commitment of entering into additional contracts for our GAC supply at our Red River facility.

在五月的第一季財報電話會議上，我們自豪地宣布了我們的首份廣汽供應合同，這標誌著我們戰略演變的一個巨大里程碑。自上次財報電話會議以來的幾個月裡，我們在紅河工廠簽訂額外 GAC 供應合約的承諾方面不斷取得進展。

As I noted earlier, we have recently secured significant additional contracted volumes for GAC supply, bringing up our total contracted demand of [13 million pounds] per annum when fully scaled up. This represents 52% of our expanded nameplate capacity of [25 million pounds] at Red River.

正如我之前指出的，我們最近獲得了 GAC 供應的大量額外合約量，在全面擴大規模後，我們的合約總需求達到了每年 [1300 萬磅]。這占我們紅河工廠擴大銘牌產能 [2,500 萬磅] 的 52%。

It's worth noting that we've achieved this milestone roughly six months ahead of our first deliveries, which remain on target for Q1 2025. These GAC contracts have attractive pricing, especially compared to our legacy PAC products and not only a firm strong market demand, but validate our GAC products and strategy. They also reflect the market's recognition of the potential of our superior offerings and environmental technology.

值得注意的是，我們比首次交付提前約六個月實現了這一里程碑，而首次交付仍按 2025 年第一季的目標進行。這些 GAC 合約具有有吸引力的定價，特別是與我們的傳統 PAC 產品相比，不僅有堅定的強勁市場需求，而且還驗證了我們的 GAC 產品和策略。它們也反映了市場對我們優質產品和環保技術潛力的認可。

These GAC sales are set to significantly grow our total revenue base and expand our margins. Given the limited supply of high quality, fully integrated, domestically produced, granular activated carbon in the market and our ongoing customer discussions, we're confident in our ability to fully contract our remaining nameplate capacity before production begins, demonstrating how our unique high quality environmentally friendly feedstock resonates with the market.

這些廣汽集團的銷售將顯著增加我們的總收入基礎並擴大我們的利潤率。鑑於市場上高品質、完全整合、國產顆粒活性碳的供應有限，以及我們正在進行的客戶討論，我們有信心在生產開始前完全承包剩餘的銘牌產能，這展示了我們獨特的高品質環保原料引起市場共鳴。

As we advance even closer to the financial opportunity represented by our growth into GAC products, it's perhaps worth discussing further how we view the sector. As we flagged in our first quarter results, we believe the regulatory changes put in place by the EPA in April are likely to have a material long-term effect on demand for GAC products, given the increasing focus on efforts to remove PFAS or forever chemicals from our nation's water supplies.

隨著我們越來越接近廣汽產品領域所代表的金融機會，也許值得進一步討論我們如何看待這個產業。正如我們在第一季業績中所指出的那樣，鑑於人們越來越關註消除 PFAS 或永久化學品的努力，我們相信 EPA 在 4 月實施的監管變化可能會對 GAC 產品的需求產生重大的長期影響來自我們國家的供水。

To reiterate, we believe that if you assume all existing water suppliers must reduce their PFAS contamination from 70 parts per trillion to just four parts per trillion, the limitations outlined in the new regulations, this will require each user to consume between 3 times to 5 times more granular activated carbon. Taking this further, we believe this leads to a supply gap of approximately [370 million] pounds by 2030, or put another way, a potential supply gap greater than the entire North American GAC market today.

重申一下，我們認為，如果假設所有現有的水供應商必須將其PFAS 污染從萬億分之七十減少到萬億分之四（新法規中概述的限制），這將要求每個用戶消耗3 到5 倍的水。更進一步來說，我們認為到 2030 年這將導致約 [3.7 億] 磅的供應缺口，或者換句話說，潛在的供應缺口比當今整個北美 GAC 市場還要大。

And it is not just our forecast that imply this level of supply shortfall and market tightness. A recent research report published by Goldman Sachs included several notable figures that I'll highlight today.

不僅是我們的預測顯示了這種程度的供應短缺和市場緊張。高盛最近發布的一份研究報告包含了我今天要強調的幾個值得注意的數字。

First, according to the report of the roughly 153,000 public water systems in the US as of 2023, approximately 35% will require PFAS treatment facilities over the next several five to six years, up from 10% today.

首先，根據截至 2023 年美國約 153,000 個公共供水系統的報告，在未來五到六年內，大約 35% 將需要 PFAS 處理設施，而目前這一比例為 10%。

Second, they estimate that the US drinking water PFAS treatment market is estimated to reach $2 billion per year by 2030, which is roughly 10 times larger than the market size in 2023.

其次，他們估計，到 2030 年，美國飲用水 PFAS 處理市場預計將達到每年 20 億美元，約為 2023 年市場規模的 10 倍。

Third, the report states that given granular activated carbon's advantages versus traditional products and solutions, GAC's market penetration rate for PFAS treatment could reach approximately 80% by 2030.

第三，報告指出，考慮到顆粒活性碳相對於傳統產品和解決方案的優勢，到2030年廣汽集團PFAS處理的市場滲透率可能達到80%左右。

And fourth, the replacement cycle for PFAS removal equipment is expected to increase by two-folds for groundwater and four-fold for surface water versus historical usage levels.

第四，與歷史使用水準相比，地下水 PFAS 去除設備的更換週期預計將增加兩倍，地表水則增加四倍。

Together, we believe this evidence is further independent support for a market whose fundamentals will continue to support our business and its growth strategy over the near and long term.

總之，我們相信這些證據是對市場的進一步獨立支持，其基本面將繼續支持我們的業務及其近期和長期的成長策略。

I remain a firm believer that where economic opportunities of this size arise, capital will flow, and we fully anticipate that incremental supply will fill some of this gap. But crucially, we have a critical and strategic first mover advantage. We believe it will take at least two to three years for new supply to come online given permitting, financing, and construction timelines.

我仍然堅信，只要出現這種規模的經濟機會，資本就會流動，我們完全預期增量供應將填補部分缺口。但至關重要的是，我們擁有關鍵的策略性先發優勢。我們認為，考慮到許可、融資和建設時間表，新供應至少需要兩到三年的時間才能上線。

Further, we believe that the cost to build greenfield sites today is between [$5 to $7 per pound] of production, dramatically impacting the economics others can realize through their investment dollars. Brownfield sites may be less expensive at between [$3 to $5 per pound] of production, but this is still indicative of major capital outlay in a market that has been typically slow to react in terms of capacity. Based on these round numbers, we believe it is reasonable to conclude that our plant assets are worth multiples of our market cap.

此外，我們認為，如今建造綠地的成本在[每磅 5 美元至 7 美元]之間，這極大地影響了其他人透過投資所能實現的經濟效益。棕地場地的生產成本可能較低[每磅 3 至 5 美元]，但這仍然表明市場上的主要資本支出通常在產能方面反應緩慢。根據這些整數，我們認為可以合理地得出結論，我們的工廠資產價值是我們市值的數倍。

Let's turn now to a brief discussion of the regulatory environment, particularly in light of the upcoming election cycle. Irrespective of the outcome in November, the level of demand that we had seen for PFAS-facing GAC solutions prior to the latest EPA regulatory changes makes us very confident that demand is fundamentally customer-led rather than regulatory-driven.

現在讓我們簡要討論一下監管環境，特別是考慮到即將到來的選舉週期。無論 11 月的結果如何，在 EPA 最新監管變化之前我們看到的面向 PFAS 的 GAC 解決方案的需求水平使我們非常有信心，需求從根本上是客戶主導的，而不是監管驅動的。

While it is clearly not my place to opine on political outcomes, I would note that there were two areas of environmental regulations that the previous Republican administration did support, and one of them was the PFAS Action Plan, a PFAS strategy.

雖然我顯然不該對政治結果發表意見，但我要指出的是，前共和黨政府確實支持兩個環境法規領域，其中之一是 PFAS 行動計劃，即 PFAS 策略。

That being said, the municipal water market/PFAS market is not the sole or primary driver of our expansion into granular activated carbon. Our sales team has made great strides to ensure our GAC contract pipeline represents a true portfolio of opportunities and not just PFAS-related customers.

話雖如此，市政水市場/PFAS 市場並不是我們向顆粒活性碳擴張的唯一或主要驅動力。我們的銷售團隊取得了長足進步，確保我們的 GAC 合約管道代表了真正的機會組合，而不僅僅是 PFAS 相關客戶。

As we previously announced, our second GAC contract was with a company specializing in the manufacturing of personal and industrial air purification devices. This is an entirely separate subsector reflecting compelling diversification as well as attractive pricing.

正如我們之前宣布的，我們的第二份 GAC 合約是與專門生產個人和工業空氣淨化設備的公司簽訂的。這是一個完全獨立的子行業，反映了引人注目的多元化以及有吸引力的定價。

Another sector that I want to briefly touch on is the GAC demand relating to renewable or biogas production. Renewable natural gas or RNG is essentially biogas derived from the thermogasification or biodecomposition and digestion of organic matter. The organic matter can come from livestock waste, landfills, water, sludge, food waste, and other organic waste operations.

我想簡單談一下的另一個領域是與再生能源或沼氣生產相關的 GAC 需求。再生天然氣或RNG本質上是透過有機物的熱氣化或生物分解和消化而產生的沼氣。有機物可以來自牲畜糞便、垃圾掩埋場、水、污泥、食物廢棄物和其他有機廢棄物處理場。

The RNG in turn has to be processed to purity standards before being introduced to the pipeline grid, and this processing includes the removal of sulfur-containing components such as hydrogen sulfide or H2S and silicone-containing impurities.

在引入管道網之前，RNG 必須經過處理以達到純度標準，該處理包括去除硫化氫或 H2S 等含硫成分以及含矽雜質。

Specific to sulfur and silicone impurities, granular activated carbon is the leading technology used by biogas producers globally for their removal. Lab-scale testing has continually confirmed the efficacy and tunability of our specialty Arq GACs, achieving up to 150% the removal performance of currently applied GACs and alternative metal oxide-based sorbents. Early testing and collaboration with a large market-leading biocast producer has been very positive.

針對硫和矽雜質，顆粒活性碳是全球沼氣生產商用於去除硫和矽雜質的領先技術。實驗室規模的測試不斷證實了我們的特殊 Arq GAC 的功效和可調節性，與目前應用的 GAC 和替代金屬氧化物吸附劑相比，去除性能高達 150%。早期測試以及與市場領先的大型生物質生產商的合作非常積極。

In a growing market like renewable biogas purification, being able to reliably grow with the market, provide a consistent supply, and ability to support products commercially, supply chain-wise and through technology collaborations can be a key differentiator, all things we are poised and capable of doing.

在可再生沼氣淨化等不斷增長的市場中，能夠可靠地與市場一起成長，提供穩定的供應，以及在供應鏈方面和透過技術合作支持產品商業化的能力可能是一個關鍵的差異化因素，我們已經做好了一切準備和準備有能力做。

I reference this market for two reasons. One, because it demonstrates that our growth business is not just tied to the fortunes of PFAS-related regulations, and two, because not only is the RNG market another rapidly growing industry, but it is also one which is dominated by producers who have massive engineering expertise and capital budgets to facilitate this expansion.

我參考這個市場有兩個原因。一是因為它表明我們的成長業務不僅與 PFAS 相關法規的命運息息相關，二是因為 RNG 市場不僅是另一個快速成長的行業，而且也是由擁有大量生產商的生產商主導的行業。資本預算來促進這一擴張。

To give you some idea of the scale, in the EU today, there are some 1,300 biogas sites already in production, and this figure is estimated to be growing at roughly 20% per year.

為了讓您對規模有所了解，如今在歐盟，大約有 1,300 個沼氣站已經投入生產，並且這個數字預計每年以大約 20% 的速度增長。

In terms of energy production, and to give you an idea of scale, this equates to more than 120 million barrels of oil equivalent per annum. In the US, where the industry was slower to start, the figure is closer to 12 million barrels of oil equivalent per annum, but growing quickly and rapidly catching up. We are focused on multiple industries and end users across a wide swath of the market. This diversity of customers can help eliminate reliance on any one segment or sector.

就能源生產而言，為了讓您了解規模，這相當於每年超過 1.2 億桶石油當量。在該行業起步較慢的美國，這一數字接近每年 1,200 萬桶油當量，但成長迅速，正在迅速追趕。我們專注於多個行業和廣泛市場的最終用戶。這種客戶多樣性有助於消除對任何一個細分市場或部門的依賴。

In turn, our customers' focus is on being able to secure product from a fully integrated supplier of granular activated carbon, who also offers best-in-class performance. Our ability to provide incremental environmental benefits as well makes this a very compelling offering. We remain extremely excited about this space, continue to see strong demand across the board, and anticipate updating the market as we win more contracts over the coming months.

反過來，我們客戶的重點是能夠從完全整合的顆粒活性碳供應商那裡獲得產品，該供應商還提供一流的性能。我們提供增量環境效益的能力也使其成為非常引人注目的產品。我們對這個領域仍然感到非常興奮，繼續看到全面的強勁需求，並預計隨著我們在未來幾個月贏得更多合同，市場將更新。

As we mentioned previously, our CapEx guidance portfolio 2024 remains in line with our previously committed guidance of between $60 million and $70 million. We continue to aggressively seek and identify opportunities to reduce our expenditures and have been successful in capturing multiple savings as a result.

正如我們之前提到的，我們的 2024 年資本支出指導投資組合仍符合我們先前承諾的 6,000 萬至 7,000 萬美元的指導。我們繼續積極尋求和尋找減少支出的機會，並已成功實現多項節省。

I would emphasize that our 2024 capital spending forecast remains unchanged despite the negative impacts associated with the unprecedented rain in the region of our Red River facility. These conditions have contributed to a construction delay of roughly six to seven weeks. Our team is working actively to identify solutions to claw back some of these delays, and as of today, we remain confident in achieving first deliveries in Q1 2025 as previously forecasted.

我要強調的是，儘管我們的紅河設施地區前所未有的降雨帶來了負面影響，但我們 2024 年的資本支出預測保持不變。這些情況導致施工延遲了大約六到七週。我們的團隊正在積極尋找解決方案，以彌補部分延誤，截至今天，我們仍然有信心按照先前的預測在 2025 年第一季實現首次交付。

Related to capital spend, and as we previously mentioned, we took the decision in April to implement our maintenance program, which we typically execute every two years. The logic for this decision was that we wanted to do it ahead of our expansion into GAC production, so that we could minimize downtime once we are at nameplate capacity in 2025.

與資本支出相關，正如我們之前提到的，我們在四月決定實施我們的維護計劃，通常每兩年執行一次。做出這項決定的邏輯是，我們希望在擴展到 GAC 生產之前進行此操作，以便在 2025 年達到銘牌產能後，我們可以最大限度地減少停機時間。

I believe this will prove to be a prudent decision, and although it drove approximately $1.4 million of costs that we were not able to capitalize during the second quarter, we are highly confident the near and long-term benefits will far outweigh this.

我相信這將被證明是一個謹慎的決定，儘管它導致了我們在第二季度無法利用的約 140 萬美元的成本，但我們非常有信心近期和長期的收益將遠遠超過這一點。

As I noted earlier, we have signed a non-binding term sheet to refinance the company's existing term loan that would materially expand the size of the facility while further enhancing liquidity. We continue to be conservative in our assumptions, and the contemplated facility is sized to fully finance our capital investment and working capital requirements as relates to our ongoing granular activated carbon projects, which we expect to contribute quickly to our cash flow generation.

正如我之前指出的，我們已經簽署了一份不具約束力的條款清單，為公司現有的定期貸款進行再融資，這將大大擴大該貸款的規模，同時進一步增強流動性。我們的假設仍然保守，預期設施的規模足以為我們正在進行的顆粒活性碳項目的資本投資和營運資金需求提供充足的資金，我們預計該項目將迅速為我們的現金流產生做出貢獻。

With that, I will hand over to Stacia to discuss the latest financials in greater detail.

接下來，我將請 Stacia 更詳細地討論最新的財務狀況。

Thanks, Bob. And thanks, everybody, for joining us today.

謝謝，鮑伯。感謝大家今天加入我們。

We delivered strong financial results during the second quarter, with revenue growing 24% year-over-year, driven largely by enhanced contracts terms, which include 16% growth on average selling price, our fifth consecutive quarter of double digit year-over-year percentage growth in ASP, as well as positive changes in product mix and a 3% increase in volume.

我們在第二季度取得了強勁的財務業績，營收年增24%，這主要得益於合約條款的增強，其中包括平均售價增長16%，這是我們連續第五個季度實現兩位數同比成長平均售價百分比成長，產品結構發生正面變化，銷量增加 3%。

Our gross margin in the quarter was approximately 32%, up more than 700 basis points versus the 25% margins reported in prior-year period. As Bob mentioned, these results were achieved despite the inclusion of approximately $1.4 million of costs associated with our proactive acceleration of certain maintenance cost, without which our gross margin would have been even better.

我們本季的毛利率約為 32%，比去年同期的 25% 成長了 700 個基點以上。正如鮑伯所提到的，儘管包含了與我們主動加速某些維護成本相關的約 140 萬美元的成本，但還是取得了這些成果，如果沒有這些成本，我們的毛利率會更好。

We generated positive adjusted EBITDA of approximately $450,000 compared to an adjusted EBITDA loss of $3 million in the prior-year period.

我們的調整後 EBITDA 為正，約 45 萬美元，而去年同期調整後 EBITDA 虧損為 300 萬美元。

Net loss was $2 million, a significant improvement versus net loss of $5.9 million in Q2 of 2023.

淨虧損為 200 萬美元，與 2023 年第二季的淨虧損 590 萬美元相比有了顯著改善。

As I mentioned earlier, average selling price for the quarter improved 16% year-over-year. We continued to eliminate negative margin contracts as we focused on profitability over volume and, at the end of the second quarter, have reduced loss making contracts to roughly 2% of volumes versus roughly 24% in 2022 and approximately 13% in 2023. Subsequent to quarter end, we have amended the sole remaining loss making contract which we expect to be a net contributor in 2025.

正如我之前提到的，該季度的平均售價年增 16%。我們繼續消除負利潤合同，因為我們專注於盈利能力而不是銷量，並在第二季度末將虧損合同減少到銷量的約 2%，而 2022 年約為 24%，2023 年約為 13%。季度末後，我們修改了唯一剩餘的虧損合同，我們預計該合約將在 2025 年成為淨貢獻者。

Selling, general and administrative expenses totaled $7 million, reflecting a reduction of approximately $1 million versus the prior-year period, driven by a reduction in payroll and benefits expenses as well as legal and professional fees.

銷售、一般和管理費用總計 700 萬美元，比去年同期減少約 100 萬美元，原因是工資和福利費用以及法律和專業費用減少。

Our research and development costs for the second quarter totaled approximately $900,000. This is compared to approximately $800,000 in the prior-year period. Year-over-year growth in R&D was primarily driven by conducting further product qualification testing with potential lead GAC adopters.

我們第二季的研發成本總計約為 90 萬美元。相比之下，去年同期約為 80 萬美元。研發的同比增長主要是透過與潛在的主要 GAC 採用者進行進一步的產品資格測試來推動的。

Overall, and on an annualized basis, our performance demonstrates our ability to operate our PAC business in a way that contributes positively to our economic position by further enabling us to pursue and execute on growth and high margin opportunities within our expanded GAC business.

總體而言，按年計算，我們的業績表明我們有能力運營 PAC 業務，從而進一步使我們能夠在擴大的 GAC 業務中追求和執行增長和高利潤機會，從而對我們的經濟地位做出積極貢獻。

As Bob mentioned, we fully anticipate that our PAC business will be cash generative in 2024. And with it, we will have much more secure foundational business on which we can add more rewarding GAC opportunities.

正如 Bob 所提到的，我們完全預期 PAC 業務將在 2024 年產生現金。有了它，我們將擁有更安全的基礎業務，在此基礎上我們可以增加更多有價值的 GAC 機會。

Turning to the balance sheet, we ended the second quarter with cash of $28.5 million. The change versus last year and quarter driven by our ongoing strategic investment and expansion at Corbin and Red River. This is partially offset by the $15 million pipe investment we made by an institutional investor in May.

轉向資產負債表，第二季末我們的現金為 2850 萬美元。與去年和季度相比的變化是由我們在 Corbin 和 Red River 持續進行的策略性投資和擴張所推動的。這被機構投資者 5 月進行的 1500 萬美元管道投資部分抵消。

Today, we are reiterating our 2024 CapEx forecast of $60 million to $70 million, of which we continue to expect Red River phase one will account for $55 million to $60 million. We continue to expect to fund our CapEx needs via our existing cash, cash generation, ongoing cost reduction initiatives, potential prepayments on GAC contracts and, importantly, in anticipated credit refinancing.

今天，我們重申 2024 年資本支出預測為 6,000 萬至 7,000 萬美元，其中我們仍然預計紅河一期將佔 5,500 萬至 6,000 萬美元。我們繼續期望透過現有現金、現金產生、持續的成本削減計劃、GAC 合約的潛在預付款，以及重要的是預期的信貸再融資來滿足我們的資本支出需求。

As Bob noted, we continue to have positive discussions with potential lenders on refinancing of the company's existing term loans that when finalized would provide an increased facility that we believe would be sufficient to cover the expected capital requirements through this year and beyond. We expect to complete this refinancing later in the third quarter.

正如鮑勃所指出的那樣，我們繼續與潛在貸款人就公司現有定期貸款的再融資進行積極討論，最終確定後將提供更多的融資，我們相信這足以滿足今年及以後的預期資本要求。我們預計將在第三季稍後完成此次再融資。

With that, I will turn things back to Bob.

有了這個，我會把事情轉回給鮑伯。

Thanks, Stacia. Overall, this has been another steady quarter of progress. I would like to leave you all with what I believe are the four key takeaways today.

謝謝，斯塔西亞。總體而言，這是另一個穩定進展的季度。我想向大家傳達我認為今天的四個關鍵要點。

First, I am confident that we have secured the long term stability of our foundational PAC business, such that it will now be self-sustaining and continue to grow. We continue to believe that this business will be cash flow positive for the full year 2024 and beyond. We continue to build momentum throughout the second quarter, providing strong tailwinds as we head into the second half of the year, which represents our seasonally strong period.

首先，我相信我們已經確保了基礎 PAC 業務的長期穩定性，使其能夠自我維持並繼續成長。我們仍然相信，該業務在 2024 年全年及以後將實現正現金流。我們在整個第二季度繼續保持勢頭，為進入下半年（代表我們季節性強勁的時期）提供強勁的推動力。

Second, we continue to make outstanding progress on contracting granular activated carbon volumes at attractive pricing, well ahead of our first production. This provides third party validation of our shift towards granular activated carbon, while also demonstrating the quality of our offering. We continue to believe our GAC capacity will be fully contracted prior to initial production and are confident that there is more encouraging news to come in the weeks and months ahead.

其次，我們在以具有吸引力的價格承包顆粒活性碳數量方面繼續取得顯著進展，遠早於我們的首次生產。這為我們向顆粒活性碳的轉變提供了第三方驗證，同時也展示了我們產品的品質。我們仍然相信，我們的廣汽產能將在首次投產之前完全收縮，並相信未來幾週和幾個月會出現更多令人鼓舞的消息。

Third, Corbin commissioning has been successful and we are now in a position to stockpile feedstock for use at Red River as required. I am very pleased with the way our new team has been able to focus on cost saving initiatives to keep this project on track for first deliveries in Q1 2025.

第三，Corbin 調試已取得成功，我們現在能夠根據需要儲存原料以供紅河使用。我對我們的新團隊能夠專注於成本節約舉措以使該專案步入正軌並在 2025 年第一季度首次交付感到非常滿意。

And fourth, our capital position remains strong and, upon completion of our refinancing, we will have further enhanced our capital structure. Over the coming months, we will continue to update the market as appropriate and as a team we remain very excited by the busy, but transformational period that lies ahead.

第四，我們的資本狀況依然強勁，再融資完成後，我們將進一步改善我們的資本結構。在接下來的幾個月中，我們將繼續酌情更新市場狀況，作為一個團隊，我們對即將到來的繁忙但轉型的時期仍然感到非常興奮。

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

這樣，我會將電話轉回給我們的接線生，讓我們進入問答環節。

(Operator Instructions) Gerry Sweeney, ROTH MKM.

（操作員說明）Gerry Sweeney，ROTH MKM。

I've got a few different questions all over the place, but just going to start with Red River, the delay. You're targeting $60 million to $70 million, I think, in CapEx. Have you looked at maybe spending a little bit more to get the project back on track? There's obviously puts and takes to that. Just curious to your view. Or is it short enough a delay that upping CapEx just doesn't make sense?

我到處都有一些不同的問題，但首先要從紅河的延誤開始。我認為，您的資本支出目標是 6,000 萬至 7,000 萬美元。您是否考慮過可能要多花一點錢才能讓專案重回正軌？顯然，這其中存在著放與取。只是好奇你的看法。或者延遲是否足夠短以至於提高資本支出沒有意義？

A couple comments on your question, Gerry. One, the CapEx project actually is on target. We had hoped, I'm a conservative guy and always prefer to under promise and over deliver. We had hoped and had built in some delays, such that we would be able to actually begin first deliveries in the fourth quarter.

格里，對你的問題有幾點評論。第一，資本支出項目其實已達到目標。我們曾經希望，我是一個保守的人，總是喜歡少承諾多兌現。我們曾希望並已經進行了一些延遲，以便我們能夠在第四季度真正開始首次交付。

Given the seven weeks delay due to the biblical rains, that is unfortunately not going to happen. However, we still are on target for commissioning the facility, beginning that in the fourth quarter, and still on target for first deliveries in the first quarter of 2025.

鑑於聖經中的降雨導致了七週的延遲，不幸的是這不會發生。然而，我們仍計劃在第四季度開始調試該設施，並仍計劃在 2025 年第一季進行首次交付。

And based on our model and our numbers and based on how we originally made the financial investment decision, we don't think it's a prudent use of capital to increase that expenditure and to bring it back to our hoped for timeline as opposed to our planned timeline.

根據我們的模型和數據，以及我們最初做出財務投資決策的方式，我們認為增加支出並將其恢復到我們希望的時間表而不是我們計劃的時間表是不明智的做法時間線。

Now, just for the sake of clarity, I sort of anticipated sales, we'll say early Q1. There was a delay. I was thinking later in Q1, but it sounds as though you were being conservative. So it's fair to say that maybe some product sales at least in the first half of Q1, not late in Q1.

現在，為了清楚起見，我對銷售進行了某種預期，我們會說第一季初。有延遲。我在第一季晚些時候就想到了，但聽起來你似乎很保守。因此可以公平地說，某些產品至少會在第一季上半年銷售，而不是在第一季末。

I think, again, it's what's first half. Is that February 14, or below or is the later? But I think rather than splitting hairs as it relates to days, as I say, we're entirely confident that we will have completed the commissioning in the first quarter and begun first deliveries in the first quarter. Certainly, by the end of the first quarter, we'll be able to realize the full impact of the expanded capacity and production.

我想，這就是上半場的內容。是 2 月 14 日還是更晚呢？但我認為，正如我所說，我們完全有信心在第一季完成調試並開始首次交付，而不是像我說的那樣，因為這與幾天有關。當然，到第一季末，我們將能夠實現產能和產量擴大的全面影響。

An then Corbin, I think you touched on it a little bit at the end. It sounds like it's fully commissioned. You're stockpiling. But just want to get a little bit more depth and clarity on that. Is that facility you're comfortable with the commercialization process and any items that we should be paying attention to there?

然後是科爾賓，我想你最後談到了一點。聽起來好像已經完全投入使用了。你正在囤貨。但只是想更深入、更清楚地了解這一點。您對該設施的商業化流程以及我們應該注意的事項感到滿意嗎？

No, we're very pleased with the way Corbin has worked out. One, just to reiterate something we always mentioned that the unique quality of our feedstock using bituminous coal waste and using that waste as the ability to remediate other waste gives us two bites at the environmental apple.

不，我們對柯賓的表現非常滿意。一，重申我們一直提到的事情，即我們使用煙煤廢料作為原料的獨特品質，並利用該廢料作為修復其他廢物的能力，讓我們在環境問題上咬了兩口。

So then you add that to the operational capability. It's fully commissioned. We are very pleased with that. We're ahead of time. We're under budget in terms of Corbin. So we're very pleased with that aspect of it.

然後你將其添加到操作能力中。已全面投入使用。我們對此感到非常高興。我們提前了。就科爾賓而言，我們的預算低於預算。所以我們對這方面非常滿意。

We have done, if you will, the full commissioning process. We are just waiting to turn that back on to begin stockpiling feedstock in anticipation of being able to supply commercial quantities to Red River once we begin production of our GAC there.

如果您願意的話，我們已經完成了完整的調試過程。我們正在等待重新啟動該系統，開始儲存原料，預計一旦我們開始在那裡生產 GAC，就能夠向紅河供應商業數量。

And thgen, you did mention the uniqueness of the bituminous product out of Corbin. And you're seeing, I think, some very good interest, not just in municipal water, but air filtration and biogas. We've spoken in the past, Arq's GAC is, for lack of a better term, different in size and conformity of size and shape. Is that difference driving an advantage in the air filtration and biogas markets or even the municipal water market by chance?

而且，您確實提到了 Corbin 瀝青產品的獨特性。我認為，您看到了一些非常好的興趣，不僅對市政供水，而且對空氣過濾和沼氣。我們過去說過，Arq 的 GAC 由於缺乏更好的術語而在大小以及大小和形狀的一致性方面有所不同。這種差異是否會偶然在空氣過濾和沼氣市場甚至市政水市場帶來優勢？

I think a couple things there. One, just the overall market fundamentals are very compelling in all aspects of the market, whether it's renewable natural gas, whether it's water filtration, whether it's PFAS remediation, whether it is air purification, soil or water remediation. It's very compelling market dynamics.

我認為有幾件事。一，只是整體市場基本面在市場的各個方面都非常引人注目，無論是可再生天然氣，無論是水過濾，無論是PFAS修復，無論是空氣淨化、土壤還是水修復。這是非常引人注目的市場動態。

But then you layer on top of that our very unique product offering. And as you have heard me say previously, that activated carbon is a technical sale. It's not something where our salesman just shows up and says to a customer or a potential customer, we can have a truckload of granular activated carbon here next week, next month, when do you want it? You have to undergo and meet and pass very stringent product qualification and testing.

但是，您可以在我們非常獨特的產品之上進行分層。正如您之前聽我說過的那樣，活性碳是一種技術銷售。這不是我們的銷售人員出現並對客戶或潛在客戶說，下週、下個月我們可以在這裡提供一卡車顆粒活性炭，您什麼時候想要？您必須接受並滿足並通過非常嚴格的產品資格和測試。

As a result, we began this in the second half of last year, as we talked about previously. We identified over 100 potential lead adopters across a wide variety of industries, biogas, municipal water, remediating runway foam, remediating deicing liquids, air filtration, et cetera.

結果，我們從去年下半年就開始了這個工作，正如我們之前談到的。我們確定了 100 多個潛在的領先採用者，涉及沼氣、市政供水、跑道泡沫修復、除冰液修復、空氣過濾等多個行業。

And in every instance, where we engage with those 100 lead adopters, 100 plus actually, we either moved from product testing to actually committed contract, product testing to contract negotiations which we're engaged in now or product testing to the next level of testing.

在每一個例子中，當我們與這100 個主要採用者（實際上超過100 個）進行接觸時，我們要么從產品測試轉向實際承諾的合同，要么從產品測試轉向我們現在正在進行的合同談判，要么從產品測試轉向下一個測試等級。

And I think that's a testament to a couple factors besides the efficacy and hard work of our R&D team and our sales force, but it also relates to the quality of our product because of the unique quality of our feedstock. Being very high quality bituminous metallurgical coal, we believe, and the testing is showing, that we have a performance advantage relative to the competition and what other people have been using in the past.

我認為，除了我們研發團隊和銷售人員的效率和辛勤工作之外，這證明了幾個因素，但由於我們原料的獨特質量，它也與我們產品的品質有關。作為非常高品質的煙煤冶金煤，我們相信，並且測試表明，相對於競爭對手和其他人過去使用的產品，我們具有性能優勢。

You combine that with the lower CO2 footprint from our process versus mining virgin coal as much as a 40% reduction in reduced CO2 exposure as well as adding into that that being the only domestic fully vertically integrated supply chain we qualify for the Build America Buy America, which is important at many federal, state and local contract levels. All of those factors combined to make our product a very attractive offering.

與開採原煤相比，我們的流程所產生的二氧化碳足跡更低，二氧化碳暴露量減少了 40%，而且我們是唯一有資格參加「Build America Buy America」的國內完全垂直一體化供應鏈，這對於許多聯邦、州和地方合約級別都很重要。所有這些因素結合在一起，使我們的產品成為非常有吸引力的產品。

One or two short questions. I know you're not going to tell me pricing per pound, but I was wondering. If you could maybe, we have municipal water, we have air, we have RNG, what's the more the higher ASP in those markets? The sort of rank of pricing.

一兩個簡短的問題。我知道你不會告訴我每磅的定價，但我想知道。如果可以的話，我們有市政供水，我們有空氣，我們有RNG，這些市場的平均售價更高又怎麼樣？定價的排序。

Pricing varies across the various market segments. I'll reiterate what I've said in the past. The market pricing for granular activated carbon as a whole is a multiple of our PAC pricing.

不同細分市場的定價各不相同。我將重申我過去說過的話。顆粒活性碳的整體市場定價是我們 PAC 定價的倍數。

Does it cost more to produce granular activated carbon versus powdered activated carbon? Yes. Does it cost a multiple to produce granular activated carbon versus powdered activated carbon? Absolutely not.

生產顆粒活性碳比生產粉末活性碳的成本更高嗎？是的。生產顆粒活性碳的成本是粉末活性碳的幾倍嗎？絕對不是。

The important thing in terms of the pricing and the actual contracts we've signed across three different industries as well as the pricing discussions we are having in our current contract negotiations, they provide further evidence and further validity that this is a very compelling economic investment with a three year or less investment payback for us.

重要的是，我們在三個不同行業簽署的定價和實際合約以及我們在當前合約談判中進行的定價討論，它們提供了進一步的證據和進一步的有效性，表明這是一項非常引人注目的經濟投資我們的投資回收期為三年或更短。

Last final question. Congrats knocking out the negative contracts. Just curious, as you look at the PAC market and just moving forward, curious if there's actually some opportunity to continue to drive some pricing and some better contracts, especially maybe contracts that you reworked a couple years ago. Any thoughts on that front?

最後一個問題。恭喜您消除了負面合約。只是好奇，當你觀察 PAC 市場並繼續前進時，好奇是否真的有機會繼續推動一些定價和一些更好的合同，尤其是你幾年前重新制定的合同。這方面有什麼想法嗎？

No, we're absolutely not done. As we mentioned, this is the fifth consecutive quarter of double digit average selling price increase. Some of that is the low hanging fruit that we've been able to harvest, but there's been no magical elixir in terms of doing what we've been doing and being able to continue to do that.

不，我們絕對沒有完成。正如我們所提到的，這是連續第五個季度平均售價上漲兩位數。其中一些是我們已經能夠收穫的唾手可得的成果，但就我們一直在做的事情以及能夠繼續這樣做而言，並沒有靈丹妙藥。

It's basic blocking and tackling. It's concentrating on profitability over volume. It's having customers and selling the value of our vertically integrated domestic supply chain and the certainty and availability of supply and the advantages that entails for our customers.

這是基本的攔截和攔截。它專注於獲利能力而非銷售。它正在吸引客戶並銷售我們垂直整合的國內供應鏈的價值以及供應的確定性和可用性以及為我們的客戶帶來的優勢。

It's also not just transforming our existing power generation business, but it's also transitioning into adjacent markets like waste to energy, like the municipal water, both of which carry a higher average selling price, as well as an average -- higher average margin as a result.

它不僅改變了我們現有的發電業務，而且還過渡到鄰近的市場，例如廢物轉化為能源，例如市政供水，這兩個市場的平均售價更高，並且平均利潤率更高。

As an aside, there also is a small component of our extremely high quality PAC product being able to use for PFAS remediation. Now, we've talked about that the EPA regulations reducing the amount of permissible PFAS and water going from 70 parts per trillion to four parts per trillion.

順便說一句，我們極高品質的 PAC 產品中還有一小部分能夠用於 PFAS 修復。現在，我們已經討論了 EPA 法規將 PFAS 和水的允許含量從萬億分之 70 減少到萬億分之四。

You need granular activated carbon to be able to do that. But in instances where municipal water authorities are currently at 10 parts per trillion or less, they can use a really high quality or highest quality PAC product to get them in compliance with the new EPA regulations.

您需要顆粒活性碳才能做到這一點。但如果市政水務部門目前的用水量為萬億分之十或更低，他們可以使用真正高品質或最高品質的 PAC 產品來使其符合新的 EPA 法規。

Now, that is capable only from 10 parts per trillion down to four. It doesn't get you from 30 to four, doesn't get you from 70 to four, doesn't get you from 100 parts per trillion to four. But that's another avenue where we think we can continue to expand margins and average selling price on our foundational PAC business.

現在，其能力只能從萬億分之十降至四。它不會讓你從 30 到 4，不會讓你從 70 到 4，也不會讓你從萬億分之一到 4。但這是我們認為可以繼續擴大基礎 PAC 業務的利潤和平均售價的另一個途徑。

Got it. I've asked a lot of questions. I'll jump back in line. I appreciate.

知道了。我問了很多問題。我會跳回隊列。我很欣賞。

Thank you, Gerry.

謝謝你，格里。

Graham Madison, Water Tower Research.

格雷厄姆·麥迪遜，水塔研究。

Just to follow up on Gerry's last question, obviously, huge improvements on the PAC side with the pricing. And it sounds like there's definitely more room to run on that side for improving margins there. How much opportunity is there still left with in terms of operational improvements to help the margin there?

只是為了跟進格里的最後一個問題，顯然，PAC 方面在定價方面有了巨大的改進。聽起來這方面一定還有更多的空間可以提高利潤。在營運改善方面還剩下多少機會來提高利潤？

No, there's definitely improvement there. As we mentioned, we had a 700 basis points improvement in our gross margin this quarter. If we had not had the extraneous $1.4 million to bring forward our biennial plant maintenance, that increase would have been more than double to give you an indication. And we think we still have more that we can wring out there.

不，那裡肯定有改進。正如我們所提到的，本季我們的毛利率提高了 700 個基點。如果我們沒有額外的 140 萬美元來提前進行兩年一次的工廠維護，那麼這一增幅將增加一倍以上。我們認為我們還有更多可以挖掘的東西。

And again, like I mentioned, there's no magical elixir. Every penny counts. I was just recently at a plant with the chief operating officer to speak about the need to make sure everyone is paying attention, that details matter.

再說一次，就像我提到的，沒有靈丹妙藥。每一分錢都很重要。我最近剛在一家工廠與首席營運官談論需要確保每個人都在關注，細節很重要。

And before the meeting, I threw some pennies on the ground beforehand to see who picked those up. And what I was trying to emphasize is that every penny counts. Every penny we save in terms of operating costs has almost a $1 million impact directly to our bottom line. So would people stop to pick up a penny? I hope so because it's the equivalent of picking up a million dollars. So we're continuing to emphasize and reinforce that everything matters, everything counts.

開會之前，我事先把一些硬幣丟在地上，看誰撿起來。我想強調的是每一分錢都很重要。我們在營運成本方面節省的每一分錢都會直接對我們的利潤產生近 100 萬美元的影響。那麼人們會停下來撿起一分錢嗎？我希望如此，因為這相當於撿到一百萬美元。因此，我們繼續強調並強調一切都很重要，一切都很重要。

And it's not just on the operating side, too. It's also on the SG&A side. We're pleased we were able to bring our SG&A down this quarter by over a million dollars. So it's looking at all aspects of the business. Every penny, nickel, and dime counts.

這不僅僅是在營運方面。它也在 SG&A 方面。我們很高興能夠將本季的銷售管理費用 (SG&A) 降低超過 100 萬美元。因此，它著眼於業務的各個方面。每一分錢、五分錢和一毛錢都很重要。

Question on the new GAC customers. Where are they coming from? Are they companies that are new to looking to secure supply or are they moving from another supplier to you?

關於廣汽新客戶的問題。他們從哪裡來？他們是剛開始尋求確保供應的公司還是正在從其他供應商轉向您？

It's really a combination of both. For some people, they're attracted to the quality of our product. They're attracted to us. They've been beating a dead horse on our vertically integrated supply chain. The certainty of supply, not having to rely on imports or others. So I think that's one aspect of it.

這確實是兩者的結合。對某些人來說，他們被我們產品的品質所吸引。他們被我們所吸引。他們在我們的垂直整​​合供應鏈上一直處於困境。供應的確定性，不必依賴進口或其他。所以我認為這是一方面。

The other is it's both existing users of granular activated carbon and new who are looking for granular activated carbon supply because the market is so woefully under supplied and demand is so great. So we're seeing demand in signing contracts and interest in negotiating contracts from both existing users who like the quality of our product, existing users who need access to additional product, and new potential users who need access to the product.

另一個原因是，顆粒活性碳的現有用戶和新用戶都在尋找顆粒活性碳的供應，因為市場供應嚴重不足，而需求卻如此之大。因此，我們看到了喜歡我們產品品質的現有用戶、需要訪問其他產品的現有用戶以及需要訪問該產品的新潛在用戶簽署合約的需求和談判合約的興趣。

In terms of as the market grows, what are your options for increasing capacity?

隨著市場的成長，您有哪些增加產能的選擇？

As we've talked about, this is the first [25 million pound] expansion. It's really a series of modular expansions. We've always assumed and run our numbers on 25 million pounds. We do have some expectation and belief that we will be able to generate additional production capability over and above that 25 million pounds. Could it be 10%, 20%, 30%? Time will tell. But for now, we want to be conservative in terms of what we've modeled and what we have discussed with the marketplace. So that's one area where we could increase capacity.

正如我們所討論的，這是第一次 [2500 萬英鎊] 擴建。這實際上是一系列的模組化擴展。我們一直假設併計算我們的數字為 2500 萬英鎊。我們確實有一些期望和信念，即我們將能夠產生超過 2500 萬磅的額外生產能力。可以是10%、20%、30%嗎？時間會證明一切。但就目前而言，我們希望在我們所建模的內容以及我們與市場討論的內容方面保持保守。因此，這是我們可以增加產能的一個領域。

Two, as it relates to phase two, we expect that the market fundamentals will remain extremely strong. And when you look at the advantages we have, not only the product advantages we have that we've mentioned in terms of Gerry's question, but also we have first mover advantages. As I mentioned, we could expand four more times beyond this to a total of [125 million pounds] of granular activated carbon capability.

第二，就第二階段而言，我們預期市場基本面將保持極為強勁。當你看看我們擁有的優勢時，不僅是我們在格里的問題中提到的產品優勢，而且我們還擁有先發優勢。正如我所提到的，我們可以在此基礎上再擴大四倍，達到總計 [1.25 億磅] 顆粒活性碳的產能。

We are fully permitted, not just on the initial 25 million pounds, but all 125 million pounds. That gives us a significant advantage relative to somebody else who would be greenfield or brownfield. We think that gives us a minimum one year advantage and potentially as much as a two year advantage.

我們獲得了完全許可，不僅是最初的 2500 萬英鎊，而是全部 1.25 億英鎊。相對於其他綠地或棕地的人來說，這給了我們顯著的優勢。我們認為這給我們帶來了至少一年的優勢，甚至可能長達兩年的優勢。

The other aspect for us there in terms of bringing on capacity is that we can do it for $3 a pound or less versus we think a minimum of $5 to $7 a pound for greenfield capacity as it relates to that. And the other advantage of phase two is that we've spent a lot of money still with a three year or less payback on this first line of 25 million pounds, but some of the funds that we've already spent will (inaudible) the benefit of phase two, so it will be an even more attractive return.

對我們來說，在增加產能方面的另一個方面是，我們可以以每磅 3 美元或更少的價格做到這一點，而我們認為與此相關的綠地產能至少每磅 5 至 7 美元。第二階段的另一個優勢是，我們在第一條2500 萬英鎊的生產線上投入了大量資金，但仍需要三年或更短的時間才能收回成本，但我們已經花費的部分資金將（聽不見清）第二階段的效益，因此將是更具吸引力的回報。

So we have plenty of options both in terms of being able to produce more than 25 million pounds on this initial capacity as well as being able to rapidly go and expand into phase two and phase three and phase four or phase five if need be.

因此，我們有很多選擇，既可以在初始產能上生產超過 2500 萬磅，也可以在需要時快速進入第二階段、第三階段、第四階段或第五階段。

Definitely, I think on the permitting side it's probably longer than two year head start on that front. One last question on the PAC pricing. What's been driving the improvement in margin as you go forward? Is it customers seeing the demand and market price going up, better negotiating or discussions with your customers or is it just a mix of the new customers that you're bringing in?

當然，我認為在允許的情況下，這方面的領先時間可能會超過兩年。最後一個問題是關於 PAC 定價的。在你們的發展過程中，是什麼推動了利潤率的提升？是客戶看到需求和市場價格上漲，與客戶進行更好的談判或討論，還是只是您引入的新客戶的混合？

Our head of sales would definitely say better negotiating on their part with our customers as it relates to that. But I think that is an element which they deserve kudos for.

我們的銷售主管肯定會說，他們與我們的客戶進行更好的談判，因為這與此相關。但我認為這是他們值得讚揚的一個因素。

But as I mentioned with Gerry, it's also expanding into adjacent markets as well. It's in the water market, it's in the waste to energy, it's in the remediation markets, all of which carry a higher average selling price and, as consequence, much higher margins. So all of those factors, prioritizing profitability over volume as well as adjacent market being able to tap those is what has enabled the price increases and the margin expansion.

但正如我與格里所提到的，它也在向鄰近市場擴張。它在水市場，它在廢物轉化為能源，它在修復市場，所有這些市場的平均售價都較高，因此利潤率也更高。因此，所有這些因素，優先考慮盈利能力而不是銷量以及相鄰市場能夠利用這些因素，都是導致價格上漲和利潤擴張的原因。

Great. Thanks so much. I'll jump back in queue.

偉大的。非常感謝。我會插回隊列。

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Rasmus for any final comments.

謝謝。女士們先生們，我們的問答環節到此結束。我將把發言權交還給拉斯穆斯先生，徵求最後的意見。

Thank you, Melissa. And thank you to everyone for joining us today. We continue to make exciting and undeniable progress on our ongoing transformation to an environmental technology company. We are improving the performance and value of our foundational PAC business and executing steadily on our GAC growth strategy.

謝謝你，梅麗莎。感謝大家今天加入我們。我們在向環境技術公司的轉型過程中繼續取得令人興奮且不可否認的進展。我們正在提高基礎 PAC 業務的績效和價值，並穩步執行我們的 GAC 成長策略。

Having the right relationships, the right team and tools is an essential component of success. I am entirely confident that at Arq, our tools, our team, our platform and our opportunity are unique and will continue to contribute to our ongoing future success.

擁有正確的關係、正確的團隊和工具是成功的重要組成部分。我完全相信，在 Arq，我們的工具、我們的團隊、我們的平台和我們的機會都是獨一無二的，並將繼續為我們未來的持續成功做出貢獻。

We are confident that the investments we are making in GAC and our ongoing execution will drive very attractive returns in shareholder value over both the near and long term. I look forward to our next quarterly call. Thank you everyone.

我們相信，我們對廣汽集團的投資以及我們持續的執行將在短期和長期內為股東價值帶來非常有吸引力的回報。我期待著我們的下一個季度電話會議。謝謝大家。