Smart Sand Inc (SND) 2024 Q2 法說會逐字稿

Ladies and gentlemen, and welcome to the Smart Sand Q2 2024 earnings call. (Operator Instructions) This call is being recorded on Wednesday, August 14, 2024.

女士們、先生們，歡迎參加 Smart Sand 2024 年第二季財報電話會議。（操作員說明）此通話錄音時間為 2024 年 8 月 14 日星期三。

I would now like to turn the conference over to Chris Green. Please go ahead, sir.

我現在想把會議交給克里斯·格林。請繼續，先生。

Good morning and thank you for joining us for Smart Sand's second quarter 2024 earnings call. On the call today, we have Chuck Young, Founder and Chief Executive Officer; Lee Beckelman, Chief Financial Officer; and John Young, Chief Operating Officer.

早安，感謝您參加 Smart Sand 2024 年第二季財報電話會議。在今天的電話會議上，我們有創始人兼執行長 Chuck Young；李‧貝克曼，財務長；和營運長約翰·楊。

Before we begin, I would like to remind all participants that our comments made today will include forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results or events to materially differ from those anticipated. For a complete discussion of such risks and uncertainties, please refer to the company's press release and our documents on file with the SEC. Smart Sand disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 14, 2024. Additionally, we will refer to the non-GAAP financial measures of contribution margin, adjusted EBITDA and free cash flow during this call.

在開始之前，我想提醒所有參與者，我們今天發表的評論將包括前瞻性陳述，這些陳述受到某些風險和不確定性的影響，可能導致實際結果或事件與預期產生重大差異。有關此類風險和不確定性的完整討論，請參閱本公司的新聞稿和我們向 SEC 備案的文件。Smart Sand 不承擔任何更新或修改任何財務預測或前瞻性聲明的意圖或義務，無論是因為新資訊、未來事件或其他原因。本次電話會議包含時效性訊息，僅截至今天（2024 年 8 月 14 日）直播時準確。此外，我們將在本次電話會議中參考貢獻邊際、調整後 EBITDA 和自由現金流的非 GAAP 財務指標。

These measures, when used in combination with our GAAP results, provide us and our investors with useful information to better understand our business. Please refer to our most recent press release or our public filings for our reconciliations of gross profit to contribution margin net income to adjusted EBITDA and cash flow provided by operating activities to free cash flow.

這些指標與我們的公認會計準則結果結合使用時，可以為我們和我們的投資者提供有用的信息，以更好地了解我們的業務。請參閱我們最近的新聞稿或我們的公開文件，以了解我們的毛利與貢獻邊際淨利潤與調整後 EBITDA 以及經營活動提供的現金流量與自由現金流量的對帳。

I would now like to turn the call over to our CEO, Chuck Young.

我現在想將電話轉給我們的執行長 Chuck Young。

Thanks, Chris, and good morning. In the second quarter, we continued to build off of our first quarter momentum and once again delivered strong results. Sales volume were just under 1.3 million tons in the second quarter, which exceeded our projections. 2024 sales volume for June were 15% higher than sales volumes for the first six months of 2023. Contribution margin in the second quarter improved to $19.8 million adjusted EBITDA increased to $11.8 million.

謝謝克里斯，早安。第二季度，我們繼續延續第一季的勢頭，再次取得了強勁的業績。第二季銷量略低於130萬噸，超出了我們的預期。 2024 年 6 月的銷量比 2023 年前 6 個月的銷量高出 15%。第二季貢獻率提高至 1,980 萬美元，調整後 EBITDA 增至 1,180 萬美元。

Additionally, we generated $13.5 million in free cash flow for the quarter. Due to our strong results, we are now free cash flow positive for the year through June. Importantly, we expect to remain free cash flow positive for the full year and as a direct result of our focus on generating free cash flow, we expect to announce plans to return value to our shareholders later this year. We also remain focused on managing our cost structure. We have driven down our production costs and administrative costs in the quarter.

此外，本季我們還產生了 1,350 萬美元的自由現金流。由於我們強勁的業績，截至 6 月份的全年自由現金流均為正值。重要的是，我們預計全年自由現金流將保持正值，並且作為我們專注於產生自由現金流的直接結果，我們預計將在今年稍後宣布向股東回報價值的計劃。我們也繼續專注於管理我們的成本結構。本季我們降低了生產成本和管理成本。

These efforts have directly resulted in improvements to contribution margin and adjusted EBITDA. We will continue to benefit from these savings initiatives in the future and remain committed to finding new ways to drive efficiency in our business. In the second quarter, we continued to execute on our long-term goals. We continue to strengthen our market-leading Northern White franchise. We continue to build market share in the Bakken and Marcellus Basins through our Blair facility, we are establishing Smart Sand as a consistent and growing supplier of Northern White sand into the Canadian market.

這些努力直接導致邊際收益和調整後 EBITDA 的改善。未來我們將繼續受益於這些節約舉措，並繼續致力於尋找新的方法來提高我們的業務效率。第二季度，我們繼續執行我們的長期目標。我們繼續加強市場領先的 Northern White 特許經營權。我們透過布萊爾工廠繼續擴大巴肯和馬塞勒斯盆地的市場份額，我們正在將 Smart Sand 打造成加拿大市場上穩定且不斷增長的北方白砂供應商。

We are expanding the markets we serve. We invested in two new terminals in Minerva and Dennison, Ohio, which will open up the Utica shale formation as a market for us. The terminals are now operational in transloading sand. We're establishing markets for our Industrial Product Solutions business. We continue to make strides with new industrial sand customers making the change to Smart Sand to meet their industrial product needs.

我們正在擴大我們服務的市場。我們在俄亥俄州密涅瓦和丹尼森投資了兩個新碼頭，這將為我們打開尤蒂卡頁岩地層的市場。這些碼頭現已開始轉運沙子。我們正在為工業產品解決方案業務建立市場。我們繼續與新的工業砂客戶一起取得進步，轉向智慧砂以滿足他們的工業產品需求。

We are laying the groundwork this year to position Smart Sand to compete for new business as industrial sand contracts come up for renewal in 2025. We remain committed to high standards of product quality and service delivery for our last mile business. We continue to strive to be the best-in-class in last mile solutions and continue to look to improve capabilities of our products and services for sand delivery and storage at the wellsite. Our focus never wavers from having efficient and cost effective sand production and delivery costs. In the second quarter, we implemented several initiatives to manage our labor costs, improve our plant product yields and invest in more efficient mining methods.

今年，隨著工業砂合約將於 2025 年續約，我們正在奠定基礎，使 Smart Sand 能夠競爭新業務。我們仍然致力於為最後一哩業務提供高標準的產品品質和服務。我們繼續努力成為最後一哩解決方案的一流產品，並繼續尋求提高我們的產品和服務在井場輸送和儲存砂子的能力。我們的重點始終是高效且具有成本效益的製砂和運輸成本。在第二季度，我們實施了多項措施來管理勞動成本、提高工廠產品產量並投資於更有效率的採礦方法。

We will maintain our focus to be a low-cost producer of Northern White sand. We will not deviate from our commitment to a strong capital structure with low debt and appropriate liquidity. Lee will provide more details later in the call, but in June, we refinanced our Oakdale Equipment financing into a new four-year equipment financing. We remain committed to being the premier provider of Northern White sand in North America, and we are confident that the foundation for Northern White Sand demand is strong and will be durable over time.

我們將繼續致力於成為北方白沙的低成本生產商。我們不會偏離對低債務和適當流動性的強大資本結構的承諾。Lee 將在稍後的電話會議中提供更多詳細信息，但在 6 月份，我們將 Oakdale 設備融資再融資為新的四年期設備融資。我們仍然致力於成為北美北白沙的主要供應商，我們相信北白沙需求的基礎是強大的，並且隨著時間的推移將是持久的。

The primary frac sand markets we currently serve are the Marcellus, the Bakken, including the Canadian Bakken, the Montney and the Duvernay in Canada and now the Utica shale basin in Ohio. The basins are all primarily Northern White sand supplied markets. We believe these markets will continue to have a strong and growing demand for Northern White sand for the foreseeable future. The basins we serve are evenly divided between oil and gas with the Marcellus and the Canada primary being natural gas markets and the Bakken and Utica being oil-focused markets. The combination of our three operating mines in Oakdale, Wisconsin; Claire, Wisconsin and Utica, Illinois coupled with our direct access on four Class 1 rail lines, the Canadian Pacific, the Union Pacific, the Canadian National and the Burlington Northern, uniquely positioned Smart Sand to continue to be a leading provider of Northern White Sand.

我們目前服務的主要壓裂砂市場是馬塞勒斯、巴肯，包括加拿大巴肯、加拿大的蒙特尼和杜韋爾奈，以及現在俄亥俄州的尤蒂卡頁岩盆地。這些盆地主要是北部白沙供應市場。我們相信，在可預見的未來，這些市場對北方白沙的需求將持續強勁且持續成長。我們服務的盆地在石油和天然氣領域各佔一半，馬塞勒斯盆地和加拿大盆地主要是天然氣市場，巴肯盆地和尤蒂卡盆地主要是石油市場。我們位於威斯康辛州奧克代爾的三個營運礦山的合併；威斯康辛州克萊爾和伊利諾伊州尤蒂卡，再加上我們直接通往4 條1 級鐵路線（加拿大太平洋鐵路、聯合太平洋鐵路、加拿大國家鐵路和伯靈頓北部鐵路），Smart Sand 擁有獨特的地位，將繼續成為北方白砂的領先供應商。

Collectively, our three facilities have a combined capacity of 10 million tons annually. And as the markets grow, we have the capacity ready available to meet its growth and needs. However, we recognize that oil and gas demand for frac sand Canada will continue to fluctuate based on current and expected prices for oil and natural gas. That is why we remain focused on being a low-cost producer. We continue to move forward on our plans to convert our Oakdale facility to hydro mining, which should reduce our operating costs in the future, and we've worked to better align our labor force for their current operational needs.

我們三個工廠的總產能為每年 1000 萬噸。隨著市場的成長，我們有足夠的能力來滿足其成長和需求。然而，我們認識到，加拿大壓裂砂的石油和天然氣需求將根據當前和預期的石油和天然氣價格繼續波動。這就是為什麼我們仍然專注於成為低成本生產商。我們繼續推進將奧克代爾工廠轉變為水力採礦的計劃，這應該會降低我們未來的營運成本，並且我們一直致力於更好地調整我們的勞動力以滿足他們當前的營運需求。

We are also in the process of implementing a new ERP to provide us with access to more timely operational and financial information. We had strong demand in the Marcellus in the first quarter, demand in the second quarter in Marcellus did moderate slightly. We currently expect third quarter sales volume in the basin to be relatively consistent with second quarter but we could see a slowdown in the fourth quarter based upon current natural gas prices and expected activity. With the start-up of our new terminals, we are seeing the Utica demand increase, which should mitigate any short-term slowdown in the Marcellus. While activity in the Marcellus may slow down in the second half of the year due to current low natural gas prices, we believe the long-term demand fundamentals for natural gas supply in the United States and Canada is strong.

我們也正在實施新的 ERP，以便我們能夠獲得更及時的營運和財務資訊。第一季馬塞勒斯的需求強勁，第二季馬塞勒斯的需求略有放緩。我們目前預計該盆地第三季的銷售將與第二季相對一致，但根據目前的天然氣價格和預期活動，我們可能會看到第四季的銷售放緩。隨著我們新航站樓的啟動，我們看到尤蒂卡的需求增加，這應該會緩解馬塞勒斯的短期放緩。儘管由於當前天然氣價格較低，馬塞勒斯地區的活動可能在下半年放緩，但我們認為美國和加拿大天然氣供應的長期需求基本面強勁。

Increasing demand from LNG export facilities and power generation for new AI data centers support the need for increased natural gas demand in the US. We expect this market to be a growing part of our business as we look out to 2025 and beyond. In contrast to natural gas prices, oil prices have remained at healthy levels. Activity in the Bakken Basin in North Dakota typically picks up in the second and third quarters, and this year has been no exception. We had strong activity in the second quarter in this basin, and we expect that to continue into the third quarter.

液化天然氣出口設施和新人工智慧資料中心發電的需求不斷增長，支持了美國天然氣需求的成長。展望 2025 年及以後，我們預計該市場將成為我們業務中不斷成長的一部分。與天然氣價格相比，石油價格一直保持在健康水準。北達科他州巴肯盆地的活動通常在第二季和第三季增加，今年也不例外。我們第二季在該盆地的活動非常活躍，我們預計這種情況將持續到第三季。

Bakken activity usually slows down in the fourth quarter due to the onset of winter. We continue to work on increasing our market presence in the Canadian market. The first half of 2024, Canada sales have represented approximately 10% of our sales volume. We expect Canadian activity to be consistent in the second half of 2024. As we look to grow our Canadian market presence, we were looking at terminal options to establish our logistics footprint in this market.

由於冬季的到來，巴肯的活動通常會在第四季度放緩。我們繼續努力增加我們在加拿大市場的市場份額。2024 年上半年，加拿大銷售額約占我們銷售額的 10%。我們預計 2024 年下半年加拿大的活動將保持一致。當我們希望擴大加拿大市場份額時，我們正在尋找終端選項，以在該市場建立我們的物流足跡。

Efficient and sustainable logistics capabilities are essential to our long-term success. Our investment in our Van Hook terminal in North Dakota and our Waynesburg terminal in Pennsylvania have been key drivers in our ability to increase our market share in the Bakken and Marcellus markets. Having controlled terminals in the basins allows us to deliver sand more efficiently, sustainably and cost effectively. Our primary objective is to deliver positive free cash flow consistently, in the second quarter, we had strong cash conversion of receivables that were built up in the first quarter, which coupled with the effective cost management and disciplined capital spending led to substantial improvement in free cash flow in the second quarter and positive free cash flow for the six months of the year. We expect to be free cash flow positive for the year.

高效且可持續的物流能力對於我們的長期成功至關重要。我們對北達科他州范胡克碼頭和賓夕法尼亞州韋恩斯堡碼頭的投資是我們增加巴肯和馬塞勒斯市場份額的關鍵驅動力。控制流域內的終端使我們能夠更有效率、更永續且更具成本效益地輸送沙子。我們的主要目標是持續提供正的自由現金流，在第二季度，我們對第一季建立的應收帳款進行了強勁的現金轉換，再加上有效的成本管理和嚴格的資本支出，導致自由現金流大幅改善。我們預計今年自由現金流為正。

We are committed to start returning value back to our shareholders. Given our generation of free cash flow over the first six months and our expectation that we will remain free cash flow positive for the year, we expect to communicate our plans to start returning value to our shareholders later this year. We believe Northern White sand will continue to be a key product for both the energy and industrial sand markets. In the second quarter, we continued to build up our solid first quarter performance. While there may be short-term blips in natural gas basins due to current low natural gas prices, the long-term fundamentals for Northern White sand in general and Smart Sand in particular, continue to be strong.

我們致力於開始向股東返還價值。鑑於我們在前六個月產生的自由現金流以及我們對今年將保持正自由現金流的預期，我們預計將在今年稍後傳達我們開始向股東回報價值的計劃。我們相信北方白砂將繼續成為能源和工業砂市場的關鍵產品。第二季度，我們持續鞏固第一季的穩健業績。儘管由於目前天然氣價格較低，天然氣盆地可能會出現短期波動，但北方白砂（尤其是智慧砂）的長期基本面仍然強勁。

We believe no other company is better positioned to take advantage of the market for Northern White sand than Smart Sand. We couldn't have delivered these results without the hard work and dedication of our employees. I want to thank all of our employees for their continued support and dedication to Smart Sand. As always, we'll keep our employees and shareholders interest in mind in everything we do. And with that, I'll turn the call over to our CFO, Lee Beckelman.

我們相信，沒有任何一家公司比 Smart Sand 更能充分利用北方白砂市場。如果沒有員工的辛勤工作和奉獻精神，我們不可能取得這些成果。我要感謝我們所有員工對 Smart Sand 的持續支持和奉獻。一如既往，我們所做的一切都會牢記員工和股東的利益。接下來，我會將電話轉給我們的財務長 Lee Beckelman。

Thanks, Chuck. Now I'll go through some of the highlights of the second quarter 2024 compared to our first quarter 2024 results. We sold 1.27 million tons in the second quarter, a 5% decrease from the first quarter sales volumes of 1.34 million tons. Total revenues for the second quarter were $73.8 million, compared to $83.1 million in the first quarter. Total revenues were lower in the second quarter due primarily to lower sand sales volumes, lower average frac sand sales prices and lower SmartSystems' revenues from reduced utilization of our fleet.

謝謝，查克。現在，我將回顧 2024 年第二季與 2024 年第一季業績相比的一些亮點。第二季銷量127萬噸，較一季的134萬噸下降5%。第二季總收入為 7,380 萬美元，而第一季總收入為 8,310 萬美元。第二季總收入下降，主要是由於砂銷售下降、平均壓裂砂銷售價格下降以及 SmartSystems 車隊利用率下降導致的收入下降。

Our cost of sales for the quarter were $60.7 million compared to first quarter of $71.2 million, a 15% decrease. The decrease was due primarily to lower sales volumes in the quarter, coupled with ongoing cost and efficiency initiatives to reduce production costs. Total operating expense were $9.5 million in the second quarter compared to $11 million in the first quarter. The decrease sequentially was primarily due to higher incentive compensation and higher royalties from increased sales volumes in the first quarter. During the second quarter, we had a $1.3 million loss on the extinguishment of debt.

本季的銷售成本為 6,070 萬美元，比第一季的 7,120 萬美元下降了 15%。下降的主要原因是本季銷售下降，以及持續採取的成本和效率舉措，以降低生產成本。第二季的總營運費用為 950 萬美元，而第一季的營運費用為 1,100 萬美元。環比下降主要是由於第一季銷售增加帶來的激勵薪酬和特許權使用費增加。第二季度，我們因債務清償而損失了 130 萬美元。

This expense was related to the payoff of some equipment leases that were part of the refinancing that was completed in June. Contribution margin was $19.8 million or $15.53 per ton in the second quarter. First quarter contribution margin was $18.5 million or $13.85 per ton. Adjusted EBITDA in the second quarter was $11.9 million compared to $9.3 million in the first quarter. While sales volumes were down in the quarter, contribution margin and adjusted EBITDA both improved sequentially and due to our continued focus on managing our cost structure.

這筆費用與支付一些設備租賃費用有關，這些設備租賃費用是 6 月完成的再融資的一部分。第二季貢獻毛利為 1,980 萬美元，每噸 15.53 美元。第一季邊際貢獻為 1,850 萬美元，每噸 13.85 美元。第二季調整後 EBITDA 為 1,190 萬美元，而第一季調整後 EBITDA 為 930 萬美元。儘管本季銷售量有所下降，但由於我們繼續專注於管理成本結構，貢獻利潤率和調整後 EBITDA 均較上季改善。

Second quarter 2024, we had $14.9 million in cash provided by operating activities, which led to $13.5 million of free cash flow after we spent $1.4 million on capital expenditures. This compares to $3.9 million cash used by operating activities and a negative $5.5 million in free cash flow in the first quarter.

2024 年第二季度，我們的營運活動提供了 1,490 萬美元的現金，在我們支出 140 萬美元的資本支出後，這導致了 1,350 萬美元的自由現金流。相較之下，第一季經營活動使用的現金為 390 萬美元，自由現金流為負 550 萬美元。

The improvement in cash provided by operating activities was primarily due to reduced working capital requirements as sales volumes leveled out, and we had higher cash conversion of our receivables in the quarter. We ended the second quarter with $2 million in borrowings on our credit facility. Today, there are no outstanding borrowings on our credit facility. We had approximately $6.3 million in cash and cash equivalents at the end of the second quarter. Between cash and availability from our credit facility, we currently have available liquidity in excess of $28 million.

經營活動提供的現金的改善主要是由於銷售穩定而減少了營運資金需求，而且本季我們的應收帳款現金轉換率較高。第二季結束時，我們的信貸額度借款額為 200 萬美元。今天，我們的信貸額度沒有未償還的借款。截至第二季末，我們擁有約 630 萬美元的現金和現金等價物。在現金和信貸額度的可用性之間，我們目前擁有超過 2800 萬美元的可用流動資金。

In June, we completed the refinancing of our Oakdale Equipment financing, along with a couple of smaller equipment financings. We refinanced this that with a new $10 million facility. This new facility amortizes over a four-year term and has an implied interest rate of approximately 8.6%. Our current $20 million ABL credit facility comes due in December. We are in the process of refinancing this facility and expect to close this new facility in the third quarter.

六月，我們完成了 Oakdale Equipment 融資的再融資，以及一些較小的設備融資。我們透過一項新的 1000 萬美元融資進行了再融資。這項新貸款的攤提期限為四年，隱含利率約為 8.6%。我們目前 2000 萬美元的 ABL 信貸額度將於 12 月到期。我們正在為該設施進行再融資，並預計在第三季關閉該新設施。

While sales volumes did moderate in the second quarter, we still delivered solid sales results and improved contribution margin, adjusted EBITDA and free cash flow. As Chuck highlighted, we do expect some pullback in the Marcellus due to lower current natural gas prices, but that should be mitigated some by expected increased volumes in the Bakken in the third quarter as well as new sales volumes into the Utica Basin. Currently, we expect third quarter sand sales volumes to be in the $1 million to $1.2 million range. Contribution margin per ton improved to $15.53 per ton in the second quarter, we expect third quarter contribution margin to be in the $14 to $16 per ton range. We evaluate and manage our capital expenditures on a quarterly basis.

儘管第二季銷量有所放緩，但我們仍然實現了穩健的銷售業績，並提高了貢獻率、調整後的 EBITDA 和自由現金流。正如查克所強調的那樣，我們確實預計由於當前天然氣價格較低，馬塞勒斯天然氣價格會出現一些回調，但預計第三季度巴肯天然氣產量的增加以及尤蒂卡盆地的新銷量應該會在一定程度上緩解這種情況。目前，我們預計第三季沙子銷售量將在 100 萬美元至 120 萬美元之間。第二季每噸貢獻邊際改善至每噸15.53美元，我們預期第三季每噸貢獻邊際將在每噸14至16美元範圍內。我們每季評估和管理我們的資本支出。

With our projects planned to date, we currently expect capital expenditures for the year to be in the $10 million to $13 million range. The increase in capital expenditures in the second half of the year from the $3 million spent through June is primarily due to the completion of projects that were started in the first half of the year. We delivered strong free cash flow in the second quarter. And while we expect quarterly free cash flow to moderate in the second half of the year, we still expect to be free cash flow positive for the year. This concludes our prepared comments, and we will now open the call for questions.

根據我們迄今為止計劃的項目，我們目前預計今年的資本支出將在 1000 萬美元至 1300 萬美元之間。下半年資本支出從截至 6 月的 300 萬美元增加，主要是由於上半年啟動的項目已完成。我們在第二季度實現了強勁的自由現金流。儘管我們預計下半年季度自由現金流將放緩，但我們仍然預計今年自由現金流將為正值。我們準備好的評論到此結束，現在我們將開始提問。

(Operator Instructions) Stephen Gengaro, Stifel.

（操作員說明）Stephen Gengaro，Stifel。

So two questions for me, and I know the first one might be hard to dissect, but I'm going to ask -- you talked about some of the things you're doing on the cost side and your contribution margin per ton in the quarter and the guidance for the next quarter given the volumes is very strong. Is there any way to quantify or give us a sense maybe on a year-over-year basis or of some level the level of cost savings that are sticky that we should think about as we try to model going forward.

所以對我來說有兩個問題，我知道第一個問題可能很難剖析，但我要問——你談到了你在成本方面所做的一些事情以及你在鑑於銷量非常強勁，本季度和下一季的指導。有沒有什麼方法可以量化或讓我們了解逐年或某種程度上的成本節約水平，這是我們在嘗試未來建模時應該考慮的黏性成本節約水平。

Great, Stephen, that's a hard question to quantify. But in general, I think with some of the things we're doing in terms of managing our labor to be more in line and more flexible with our operations and sales volumes as well as the hydro mining, in particular, we're doing at Oakdale and other things of that nature, but it could pitch -- on average, reduce our production cost by potentially $1 or $2 per ton on average if we're operating at a fairly high utilization.

太好了，史蒂芬，這是一個很難量化的問題。但總的來說，我認為我們在管理勞動力方面所做的一些事情與我們的運營和銷售量以及水力採礦更加一致和更加靈活，特別是我們正在做的事情奧克代爾和其他類似性質的項目，但如果我們以相當高的利用率運營，它可能會平均每噸降低1 或2 美元的生產成本。

Yes. And Stephen, what I would add to that is, I think with a lot of the removal of the yellow iron, the haul trucks and things like that and moving that to electrically driven pumps and hydro mining, as we discussed, allows us to avoid some of the spikes we've seen in the past when diesel gets to $5 and $6, that provides a real headwind to us that we should have mitigated going forward. So it provides a little bit more of an ability to see out and not have to worry so much about that stuff.

是的。史蒂芬，我要補充的是，我認為透過大量拆除黃鐵、拖運卡車和類似的東西，並將其轉移到電動泵和水力採礦，正如我們所討論的那樣，可以讓我們避免過去當柴油價格達到5 美元和6 美元時，我們看到了一些飆升，這給我們帶來了真正的阻力，我們應該在未來減輕這種阻力。所以它提供了更多的觀察能力，而不必太擔心這些事情。

Okay, that helps. It's obviously a very positive trend. The other question I add just quickly is when you look at the various markets you're serving, I mean, we've heard about sand pricing mostly around the Permian and some other markets. But what are you seeing on the spot market? Maybe just relative to what your contracted volumes currently look like?

好的，這有幫助。這顯然是一個非常積極的趨勢。我很快補充的另一個問題是，當您查看您所服務的各個市場時，我的意思是，我們聽說過的沙子定價主要圍繞著二疊紀和其他一些市場。但您在現貨市場上看到了什麼？也許只是相對於您目前的合約量而言？

In terms of pricing?

在定價方面？

Yes, in terms of pricing.

是的，在定價方面。

I think John can add -- John and Chuck can add to this, but pricing has been relatively flat. So over the last couple of quarters, we saw a good pickup in pricing through the second -- first half of last year, it moderated down, and it's been relatively flat for the last couple of quarters.

我認為約翰可以補充——約翰和查克可以補充這一點，但定價相對平穩。因此，在過去的幾個季度中，我們看到價格在去年下半年出現了良好的回升，之後有所放緩，並且在過去的幾個季度中相對持平。

Yes. I would just add to that. It's a little bit market dependent. Canada seems to allow for a little bit higher pricing in some of the markets in the US a little bit lower pricing.

是的。我想補充一點。這有點取決於市場。加拿大似乎允許美國某些市場的定價稍微高一些，而美國一些市場的定價略低一些。

But we have been in a relatively stable pricing environment now for quite a while, right? And we're not seeing what we're seeing back when the market was weak, in the teen -- pricing in the teens, not sustainable. We're seeing pricing in the mid-20s, and we're seeing interest in contracting at those levels.

但我們現在已經處於相對穩定的定價環境相當長一段時間了，對嗎？我們並沒有看到市場疲軟時所看到的情況——十幾歲的定價，不可持續。我們看到價格在 20 多歲左右，並且我們看到了在這些水平上簽訂合約的興趣。

And so knock on wood, the pricing seems to be -- we don't see anything that's going to take it out of that stability. Market demand and Northern White supply seemed to be still in relative balance. You've heard us say that before. And I think that going forward, we don't anticipate much of that's going to change.

所以，天哪，定價似乎是——我們看不到任何東西會破壞它的穩定性。市場需求和北方白白供應似乎仍保持相對平衡。你以前聽過我們這麼說過。我認為，展望未來，我們預計這種情況不會有太大變化。

And one other thing I would add is our sand and Northern White sand is heavily dependent on rail logistics. Our rail logistics setup is premier in the industry. We have the best assets.

我要補充的另一件事是我們的沙子和北部白沙嚴重依賴鐵路物流。我們的鐵路物流設施在業界處於領先地位。我們擁有最好的資產。

Great. Thank you. And maybe just one quick one on that. And I don't know if this affects you at all, but we were hearing about the Canadian rail strike and I forget, honestly, the drop-dead date. Does that have any impact on you guys?

偉大的。謝謝。也許只是簡單介紹一下這一點。我不知道這是否會影響你，但我們聽說了加拿大鐵路罷工，老實說，我忘記了罷工日期。這對你們有什麼影響嗎？

Yes. So yes, it sounds like -- I think August 22 is the big date for that as to when they're able to go on strike. Now that we've been told by our rail partners that that is going to affect primarily Canada, but that doesn't impact the Lower 48, where the bulk of our volume goes today.

是的。所以，是的，聽起來 - 我認為 8 月 22 日是他們能夠罷工的重要日期。現在，我們的鐵路合作夥伴告訴我們，這將主要影響加拿大，但這不會影響 48 個州以下地區，而我們今天的大部分運輸量都流向這些地區。

But yes, we're hopeful that that gets resolved in a way that doesn't impact our operations. Similar to the rail situation in the US a few years ago, where it went right to 11th hour and then got resolved and ended up impacting us. But Canadian market is still a growing market for us. It's certainly going to be a very important market for us. But I think that this strike, assuming it's resolved relatively quickly, shouldn't have too much of an impact on us.

但是，是的，我們希望這個問題能以不影響我們營運的方式解決。類似於幾年前美國的鐵路狀況，一直到11點才解決，最後影響了我們。但加拿大市場對我們來說仍然是一個不斷成長的市場。這對我們來說肯定是一個非常重要的市場。但我認為，假設這次罷工解決得相對較快，應該不會對我們造成太大影響。

Excellent. Thank you for all the details.

出色的。感謝您提供所有詳細資訊。

Josh Jayne, Daniel Energy Partners.

喬許‧傑恩，丹尼爾能源合夥人。

First question I wanted to ask is on the Canadian market. Could you talk about how much sand you're selling into that market today and where it could ultimately go in 2025? And then maybe just a broad overview. When I look at the rig count, it's been holding up much better in Canada than the US. So could you talk about how much sand demand annually is coming from the Canadian market for Northern White?

我想問的第一個問題是關於加拿大市場的。您能否談談您目前向該市場銷售了多少沙​​子以及 2025 年這些沙子最終會流向何處？然後也許只是一個廣泛的概述。當我查看鑽孔機數量時，加拿大的鑽孔機數量比美國好得多。那麼您能談談加拿大北白市場每年的沙子需求量是多少嗎？

Yes, Josh, right now, Obviously, it fluctuates by month and quarter, but approximately 10% of our sales are going into the Canadian market. And we do believe that, that market has good strong growth potential. It's hard to get great estimates on actual demand, but we put demand currently in that market probably in the 8 million to 10 million ton range.

是的，喬什，現在，顯然，它按月和季度波動，但我們大約 10% 的銷售額進入了加拿大市場。我們確實相信，該市場具有良好的強勁成長潛力。很難對實際需求進行準確的估計，但我們預計該市場目前的需求量可能在 800 萬噸到 1,000 萬噸之間。

And we think that market could grow substantially over the next couple of years. Most of the activity is going up into Northwest Alberta, Northeast British Columbia and the Duvernay and Montney Shale and that gas is really being driven by the LNG export capacity on the West Coast, and we're really seeing a good pickup in activity, and we expect that to be a growing and strong market for us.

我們認為該市場在未來幾年可能會大幅成長。大部分的活動都集中在艾伯塔省西北部、不列顛哥倫比亞省東北部以及杜韋爾奈和蒙特尼頁岩，這些天然氣實際上是由西海岸的液化天然氣出口能力推動的，我們確實看到了活動良好回升，我們預計這對我們來說將是一個不斷成長且強大的市場。

So we're at 10% today, and we hope to see that grow as we get into 2025 and be at a higher percentage of that. It's hard to give you an exact number, but we expect that growing as we get into 2025 and really extend our logistics network into Canada to really be more efficient in getting our sand into that market over time.

所以我們現在的比例是 10%，我們希望在進入 2025 年時看到這一比例增長，並達到更高的比例。很難給你一個確切的數字，但我們預計，隨著時間的推移，隨著我們進入2025 年，並​​將我們的物流網絡真正擴展到加拿大，這一數字將會增長，從而真正更有效地將我們的沙子進入該市場。

And is there much of a difference between what you're selling just from a grade standpoint into the Marcellus versus the Canadian market. Could you talk about that a bit?

從等級的角度來看，您在馬塞勒斯市場和加拿大市場銷售的產品之間是否存在很大差異？你能談談這個嗎？

Yes, that's actually a pretty good question, Josh. So that mine that we've got up there in Blair is slightly coarser than our other reserves. But the Canadian market tends to be a little bit closer than the Lower 48 market. And so when we produce, call it, the 30-70 product for Canada, we produce a decent amount of 100-mesh that we keep down here primarily. So that mine tends to be pretty balanced with Canadian demand and then being able to put the 100-mesh product into the Lower 48.

是的，這實際上是一個很好的問題，喬許。因此，我們在布萊爾開採的礦場比我們其他儲備的礦場略粗。但加拿大市場往往比 Lower 48 市場更接近一些。因此，當我們為加拿大生產（稱之為 30-70）產品時，我們生產了大量的 100 目產品，主要保留在這裡。因此，我的產品往往與加拿大的需求相當平衡，然後能夠將 100 目產品放入 Lower 48。

So it's not something we anticipated when we pick the property up, but it's something that's actually interesting from a standpoint of that mine has got good efficiency, and we're able to use most of the products that we're making.

因此，這並不是我們在購買該房產時所預期的事情，但從礦山效率良好的角度來看，這確實很有趣，而且我們能夠使用我們正在生產的大部分產品。

Okay. That's helpful. I wanted to ask a follow-up on supply/demand. You mentioned in your prepared remarks the market is balanced and there was a question on pricing. But when I think about capacity today at Oakdale, let's just call it, nameplate is 5.5 million tons.

好的。這很有幫助。我想問供應/需求的後續情況。您在準備好的發言中提到市場是平衡的，並且存在定價問題。但當我想到奧克代爾今天的產能時，我們就這麼稱呼吧，銘牌上的產能是 550 萬噸。

Based on today's staffing levels, what's the maximum amount of sand you believe you could sell today as product? And could you just give us a reminder of how much you would have to produce to arrive at that number of tons sold?

根據今天的人員配置水平，您認為今天可以作為產品銷售的沙子的最大數量是多少？您能否提醒我們，您需要生產多少才能達到銷售噸數？

Yes. So we talked a little bit about some of the changes made particularly in Oakdale with going to hydro mining and whatnot. And so where we are today versus getting the $5.5 million, it's not a substantial increase in staffing. There is some increasing increase in staffing, but we've got five dry plants in Oakdale, two wet plants, and we operate to varying degrees, all of those plants all the time.

是的。因此，我們討論了一些變化，特別是在奧克代爾進行的水力採礦等變化。因此，與我們今天獲得的 550 萬美元相比，這並不是人員配置的大幅增加。人員配備有所增加，但我們在奧克代爾有五個乾法工廠，兩個濕法工廠，並且我們一直在不同程度地運營所有這些工廠。

So to increase that doesn't require doubling the staff or any of that stuff at Oakdale. There'll be a little bit of increase in variable costs there to do that, but it's not a 2x thing. It's adding a handful of staff here and there just to move to full 24-hour operation, 7 days a week and not shutting plants down. So we think that that's a really good tailwind for us as market demand increases. At Blair, it's a similar story.

因此，要增加這一數量並不需要在奧克代爾增加一倍的員工或任何其他人員。為此，可變成本會略有增加，但這不是兩倍的事情。它到處增加了一些員工，只是為了實現每週 7 天、24 小時不間斷運營，並且不會關閉工廠。因此，我們認為隨著市場需求的增加，這對我們來說是一個非常好的動力。在布萊爾，情況也類似。

Blair is a single -- it's got two dry plants and one wet plant, all on-site with the rail there. And so both of those sites are well positioned to be able to add incremental volume without huge capital expenditure and without having to add a ton of variable cost with employees and whatnot.

布萊爾是一個單一的——它有兩個乾植物和一個濕植物，所有植物都在現場，有鐵軌在那裡。因此，這兩個網站都處於有利位置，無需巨額資本支出，也無需增加大量員工等變動成本，即可增加增量。

Additionally, Josh, the reserve at Oakdale really lines up well with what the market demand is. So that's probably our premier asset.

此外，喬希，奧克代爾的儲備確實符合市場需求。所以這可能是我們的首要資產。

For sure. And just to follow up, I guess, a little bit deeper. I think what I'm trying to get at is if nameplate is 5.5 million tons, and that was -- that's what you could produce, I guess I just want to better understand your yield is not going to be 100% on that, right? And so when we think about supply/demand in the market, I'm just trying to understand what the maximum, I guess, that could actually be produced product from the mine or based on where you're staffing today, if that helps frame the question a little better.

一定。我想，只是為了更深入地跟進。我想我想了解的是，如果銘牌上的產量是 550 萬噸，那就是——這就是你可以生產的，我想我只是想更好地了解你的產量不會是 100%，對吧？因此，當我們考慮市場的供應/需求時，我只是想了解，我猜，實際上可以從礦山生產的產品的最大值是多少，或者根據您今天的人員配備情況，如果這有助於框架這個問題好一點。

Well, Josh, we don't get into specific of the yields by plant. But generally, you can think about that we're probably in a 70%, 80% yield on average. And so getting up to 5.5 million tons in terms of the sand we'd be producing, you can do the math from that. But again, also -- we look at our assets on an integrated basis. So it's not just Oakdale and maximizing its capacity, it's maximizing the value of all three of our assets in total. And we have 10 million tons of total capacity.

好吧，喬什，我們不討論植物的具體產量。但一般來說，你可以想像我們的平均報酬率可能是 70%、80%。因此，就我們生產的沙子而言，您可以計算出高達 550 萬噸。但同樣，我們會在綜合的基礎上審視我們的資產。因此，這不僅僅是奧克代爾並最大化其容量，它還最大化了我們所有三項資產的總價值。我們擁有1000萬噸的總產能。

And so actually, Oakdale and Blair can -- are very synergistic because they can serve some of the same markets. So depending on what the best rail accesses, et cetera, or what the mix of our sand is in terms of sales, we can toggle sales back and forth between the two of those. So it's not necessarily the max volume that Oakdale can do, it's a combination of our assets and what we can get to on a combined basis relative to the market demand for the particular product.

事實上，奧克代爾和布萊爾可以——非常協同，因為他們可以服務一些相同的市場。因此，根據最好的鐵路通道等，或者我們的沙子的混合在銷售方面的情況，我們可以在這兩者之間來回切換銷售。因此，這不一定是 Oakdale 能夠做到的最大產量，而是我們的資產以及我們相對於特定產品的市場需求在綜合基礎上可以獲得的產品的組合。

Yes. And Josh, what I would add to that is just at a point in time. But in February this year, wholesale produced beyond the 5.5 million tons in February, right?

是的。喬希，我要補充的只是在某個時間點。但今年2月批發產量超出了2月的550萬噸吧？

From a run rate perspective, Oakdale can do it. It's just -- it's market demand and things like that. But Oakdale does have a really good ability to flex even in months that aren't particularly favorable weather-wise like February. So it does have that ability.

從運行率的角度來看，Oakdale 可以做到。這只是——市場需求之類的。但奧克代爾確實具有非常好的彎曲能力，即使在像二月這樣天氣不太有利的月份也是如此。所以它確實有這個能力。

Yes, I think it's fair to say with our current staffing, we could be get our sales volumes up north of 7 million tons with maybe an incremental 5% to 10% increase in staffing. And we can get beyond that and get much closer to our nameplate capacity, but that would require an incremental investment probably in people and a bit of equipment.

是的，我認為可以公平地說，以我們目前的人員配置，我們的銷量可能會超過 700 萬噸，而人員配置可能會增加 5% 到 10%。我們可以超越這個目標，更接近我們的銘牌產能，但這可能需要對人員和一些設備進行增量投資。

Understood. Thank you, guys, for the answers. I'll turn it back.

明白了。謝謝你們的回答。我會把它轉回來。

As we go to those higher levels, things like adding additional terminals, which we have plans to in Canada right now, things like that additionally help because we need the throughput for the sand all the way through to the basin.

當我們達到更高的水平時，我們現在計劃在加拿大增加額外的碼頭，這樣的事情也會有所幫助，因為我們需要沙子一直到盆地的吞吐量。

Okay. Thanks.

好的。謝謝。

Bruce Geller, Geller Ventures.

布魯斯蓋勒，蓋勒創投公司。

You mentioned the sales or the beginning of sales into Utica in the second half. Any sense, you can provide of the tonnage levels to expect in the second half of this year into that basin. And also, in terms of the profitability, will it be similar to the rest of the business? Or are there start-up costs that we should anticipate with those sales in the second half?

您提到下半年尤蒂卡的銷售或開始銷售。無論如何，您都可以提供今年下半年預計進入該盆地的噸位水平。另外，就盈利能力而言，它會與其他業務相似嗎？或者我們應該在下半年的銷售中預期啟動成本嗎？

Yes, I'll answer the second question first. In terms of profitability, it's relatively consistent on a pricing basis, but it's actually our terminal, so one of the opportunities we're having is shifting from third-party terminals to our terminal and over time. Typically, we can operate a terminal at lower cost than a third party. So actually, our net margins through that business over time should be better. Pricing is relatively consistent because we are going to be running the terminal at a lower overall cost.

是的，我先回答第二個問題。在獲利能力方面，它在定價基礎上相對一致，但它實際上是我們的終端，所以我們擁有的機會之一是隨著時間的推移從第三方終端轉移到我們的終端。通常，我們可以比第三方以更低的成本運作終端。所以實際上，隨著時間的推移，我們通過該業務的淨利潤率應該會更好。定價相對一致，因為我們將以較低的總體成本運行終端。

In terms of volumes, we don't give specific volumes by basin. So we do expect to pick up and that activity, I think, in the second half of the year, what we gained in the Utica, we might see some reduction in the Marcellus. But over time, we think it's going to be additive. And I think one way to think about it over time, we would hope that the Utica could get up to levels in the next year or two that at least up to the Canadian levels or higher in terms of what we're selling in Canada in terms of percentage of our sales.

就體積而言，我們不提供按流域劃分的具體體積。因此，我們確實希望在今年下半年，我們在尤蒂卡獲得的活動有所回升，我們可能會看到馬塞勒斯的活動減少。但隨著時間的推移，我們認為它會起到累加作用。我認為隨著時間的推移，我們希望尤蒂卡能夠在未來一兩年內達到加拿大的水平或更高的水平，就我們在加拿大銷售的產品而言按我們銷售額的百分比計算。

That's great. Very exciting. You also mentioned in the press release the expectation of increased activity in 2025. Can you give some insight as to the visibility you're seeing on that? And what gives you the confidence there? And is that also saying that you would expect tonnage in 2025 to be an improvement over 2024?

那太棒了。非常令人興奮。您也在新聞稿中提到了 2025 年活動增加的預期。您能否就您所看到的可見性提供一些見解？是什麼給了你信心？這是否也意味著您預計 2025 年的噸位將比 2024 年有所改善？

We haven't given any guidance on 2025 yet, Bruce. So we're not going to get into that. But I would say that we -- as Chuck highlighted in his comments, and I think this is very consistent with what you're hearing with other players out in the market. There is a real belief that demand for natural gas is going to grow in particular related to the LNG export capacity that's coming online over the next three to five years as well as the incremental demand for power generation to support a lot of this data center activity. And we think natural gas is going to be a big part of those drivers for that.

Bruce，我們尚未就 2025 年給予任何指導。所以我們不打算討論這個。但我想說的是，正如查克在他的評論中所強調的那樣，我認為這與您從市場上其他玩家那裡聽到的情況非常一致。人們確實相信，天然氣需求將會成長，特別是與未來三到五年內上線的液化天然氣出口能力以及支援大量此類資料中心活動的發電需求增量相關。我們認為天然氣將成為這項推動因素的重要組成部分。

And I think that's going to lead to good incremental demand for natural gas, which could really help us in terms of the activities and some of the basins that we operate in. So we see good growth. It's a little too early to give any guidance of 2025, but we would expect that activity. Gas prices are relatively low right now. I think that's mitigating some of the activity in the second half of this year.

我認為這將導致對天然氣的良好增量需求，這對我們的活動和我們運營的一些盆地來說確實有幫助。所以我們看到了良好的成長。現在給出 2025 年的任何指導還為時過早，但我們預計會有這樣的活動。目前天然氣價格相對較低。我認為這會減輕今年下半年的一些活動。

But if this expected demand starts to pick up, we think over the next 25 and going on in '26 and '27, that should be leading to good strong demand growth and the Marcellus and other natural gas regions, which we have a very strong market position into that.

但如果這種預期需求開始回升，我們認為在接下來的25 年以及26 年和27 年，這應該會導致需求強勁增長以及馬塞勒斯和其他天然氣地區，我們在這些地區擁有非常強勁的天然氣資源市場地位。

I'd also add as we add terminals with unit train where they can receive unit trains, usually, our volumes follow that. And that's like what we're working on right now.

我還要補充一點，當我們添加帶有單元列車的航站樓時，他們可以在那裡接收單元列車，通常，我們的數量遵循這一點。這就是我們現在正在做的事情。

Great. That's very encouraging. I also had a clarification question on the free cash flow generation. You said that you expect to be free cash flow positive for the year. You are free cash flow positive through the first half of about $8 million. I was confused if you were whether or not you were saying you expect to generate additional free cash flow in the second half of the year on top of the $8 million generated in the first half?

偉大的。這非常令人鼓舞。我還有一個關於自由現金流產生的澄清問題。您說您預計今年的自由現金流為正。上半年您的自由現金流為正，約 800 萬美元。我很困惑，您是否說除了上半年產生的 800 萬美元之外，預計下半年還會產生額外的自由現金流？

Yes. Again, it's a little hard to define how much free cash flow we may generate in the second half of the year, depending on volumes and activity and how our working capital shifts happen on a quarterly basis. So we don't get into specifics about the actual generation in the number over the second half of the year, but we do expect to be free cash flow positive for the year.

是的。同樣，很難定義我們在下半年可能產生多少自由現金流，這取決於數量和活動以及我們的營運資本按季度發生的變化。因此，我們不會詳細了解下半年的實際發電量，但我們確實預計今年的自由現金流將為正值。

Okay. And along those lines, you mentioned some initiatives for capital return to shareholders being discussed sometime in the second half. Just curious what in particular you're considering? Is it a dividend, share repurchase or some combination thereof that you're currently contemplating?

好的。沿著這些思路，您提到了下半年某個時候正在討論的一些向股東返還資本的舉措。只是好奇您正在特別考慮什麼？您目前正在考慮的是股息、股票回購還是兩者的組合？

I think right now, we're open and we're considering what the various options would be, and looking at to your question in terms of what -- how we believe our cash flow generation is going to be and the consistency of that. Does it determine the best approach in terms of starting to deliver value back to the shareholder in a combination of a dividend and/or shareholder repurchase. So we haven't fully finalized our thoughts on that. We are still focused on moving towards bringing share -- value back to our shareholders. You got to remember, last year, we bought back 11% of our shares.

我認為現在，我們持開放態度，我們正在考慮各種選擇，並從我們如何相信我們的現金流生成以及其一致性的角度來考慮你的問題。它是否確定了透過股利和/或股東回購的組合開始向股東回饋價值的最佳方法？所以我們還沒有完全確定我們對此的想法。我們仍然致力於將份額——價值回饋給我們的股東。你要記住，去年我們回購了 11% 的股份。

So we didn't actually start that process in 2023. And right now, we're just evaluating the best opportunity on a go-forward basis in terms of how we think we're going to do it more consistently going forward. So that's something we'll probably have more detail on hopefully later this year, at our next earnings call, but I think we're open and we're evaluating all the various options.

所以我們其實並沒有在 2023 年開始這個過程。現在，我們只是在未來的基礎上評估最佳機會，以了解我們如何更一致地繼續前進。因此，我們可能會在今年稍後的下一次財報電話會議上提供更多細節，但我認為我們持開放態度，並且正在評估所有不同的選擇。

Great. Well, I really appreciate those initiatives on shareholders' behalf. I think that's terrific idea, and that is appreciated. I do have one final question. In the past, you've discussed targeting industrial end markets that are not necessarily oil and gas related, just other end market opportunities for your sales. I'm curious how the initiatives in that regard are going? And if you can provide any insight on that going forward?

偉大的。嗯，我真的很感謝代表股東採取的這些措施。我認為這是一個很棒的主意，值得讚賞。我還有最後一個問題。過去，您討論過瞄準不一定與石油和天然氣相關的工業終端市場，而只是為您的銷售提供其他終端市場機會。我很好奇這方面的措施進展如何？您能否就此提供任何見解？

Yes, sure. So yes, so our industrial initiatives continue. We've installed cooling and blending capabilities at our Utica mine, and we continue to grow that market. It's an interesting market and something that we're relatively excited about from a margin perspective. From a volume perspective, it will likely be -- it will never be what frac volumes are, but it is a business that we've invested time, effort and money into, and we expect it to continue growing.

是的，當然。所以是的，我們的工業舉措仍在繼續。我們在尤蒂卡礦場安裝了冷卻和混合功能，並且我們將繼續擴大該市場。這是一個有趣的市場，從利潤率的角度來看，我們對此感到相對興奮。從銷售的角度來看，它可能永遠不會像壓裂銷售那樣，但這是一項我們投入了時間、精力和金錢的業務，我們預計它會繼續成長。

All right. Thank you and best of luck.

好的。謝謝你，祝你好運。

Thank you.

謝謝。

Thank you. And we don't have any further questions. I would now like to hand the call over back to Chuck Young for closing remarks. Please go ahead, sir.

謝謝。我們沒有其他問題了。我現在想把電話轉回給查克楊（Chuck Young）做總結發言。請繼續，先生。

Thanks for joining our second quarter earnings call. We look forward to speaking with you again in November.

感謝您參加我們的第二季財報電話會議。我們期待十一月再次與您交談。

Thank you. This concludes our conference for today. Thank you all for participating. You may now disconnect.

謝謝。我們今天的會議到此結束。感謝大家的參與。您現在可以斷開連線。