Vertex Energy Inc (VTNR) 2023 Q4 法說會逐字稿

Good morning, my name is Jeannie, and I will be your conference operator today. I would like to welcome you to the Vertex Energy Inc. Fourth Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again, thank you. I would now like to turn the conference over to John Ragozzino. You may begin your conference.

早安，我叫珍妮，今天我將擔任你們的會議操作員。歡迎您參加 Vertex Energy Inc. 2020 年第四季財報電話會議。所有線路均已靜音，以防止任何背景噪音。演講者發言後，將進行問答環節。如果您想在此期間提出問題，只需按電話鍵盤上的星號，然後再按數字 1 即可。如果您想撤回問題，請再次按星號一，謝謝。我現在想把會議交給約翰·拉戈齊諾。您可以開始您的會議了。

Thank you. Good morning and welcome to Vertex Energy's Fourth Quarter and Full Year 2023 Results Conference Call. On the call today are Chairman and CEO, Ben Cowart, Chief Financial Officer, Chris Carlson, Chief Operating Officer, James Ray, Chief Strategy Officer, Alvaro Luiz, and Chief Commercial Officer, Doug Hock, I want to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs and actual results may differ materially for a discussion of some of the risk factors that could cause actual results to differ, please refer to the Risk Factors section of Vertex Energy's latest annual and quarterly filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call and on the press release issued today.

謝謝。早安，歡迎參加祥峰能源 2023 年第四季和全年業績電話會議。今天參加電話會議的有董事長兼首席執行官 Ben Cowart、首席財務官 Chris Carlson、首席營運官 James Ray、首席策略官 Alvaro Luiz 和首席商務官 Doug Hock。今天電話會議上問題的回答可能包括前瞻性陳述，這些陳述本質上是不確定的，並且不在公司的控制範圍內。儘管這些前瞻性陳述是基於管理層當前的預期和信念，並且由於對可能導致實際結果不同的一些風險因素的討論，實際結果可能存在重大差異，但請參閱祥峰能源最新年度和報告的風險因素部分.向 SEC 提交季度文件。此外，請注意，您可以在我們的電話會議和今天發布的新聞稿中找到歷史上非公認會計準則財務指標的調整表。

Today's call will begin with remarks from Ben Cowart, followed by an operational review from James ran a financial review from Chris Carlson In review of our commercial strategy by Dan Hawke. At the conclusion of these prepared remarks, we'll open the line for questions with that, I'll turn the call over to Ben.

今天的電話會議首先由 Ben Cowart 發表講話，隨後由 James 進行營運審查，由 Chris Carlson 進行財務審查，由 Dan Hawke 審查我們的商業策略。在準備好的發言結束後，我們將打開提問熱線，我會將電話轉給本。

Thank you, John, and good morning to those joining us on the call today. 2023 was a year marked by significant volatility in the refining and renewable sectors. This instability was driven by several factors, including geopolitical tensions that affected crude oil and product prices. Additionally, shifting supply and demand balances had a profound impact on renewable credit values and lagging feedstock costs in the midst of these fluctuations.

謝謝約翰，今天參加我們電話會議的人們早安。 2023 年是煉油和再生能源產業大幅波動的一年。這種不穩定是由多種因素造成的，包括影響原油和產品價格的地緣政治緊張局勢。此外，供需平衡的變化對再生能源信貸價值和在這些波動中滯後的原料成本產生了深遠的影響。

2023 also marked a significant shift in evolution and growth of Vertex Energy as a company. Throughout the year, our focus was on launching a renewable business and optimizing our feedstock strategy following the construction and startup of the renewable diesel unit at the mobile refinery In addition, we have expanded our logistics footprint in mobile through our marine fuels and logistics operations and establish our trading and supply division, creating significant opportunities to vertically integrate the broader business and capture more of value chain along the way since the mobile refinery purchase, we have invested roughly $260 million of new cash into the renewable diesel business today, including fixed assets, the cash portion of working capital for inventory and funded losses through the year end 2023, we have grown our corporate overhead to support this growth and bring in the talent needed to drive progress towards our overall goal as a leading energy transition company. Given our accomplishments in the start-up and the development of these initiatives, we believe we are well positioned to refine our strategy, concentrating now on cash management, cost reduction and enhanced profit margins from the call today. The team and I plan to update you on the financial and operating results for the fourth quarter and full year 2023. I want to start by thanking my team all the employees listening to the call today for the good work they have accomplished throughout the year. As James will note shortly, we not only got a lot done, but we did it safely, which is the most important measure of all, before I hand the call off to James, I know many of you are eager to get an update on the ongoing process underway with Bank of America. As we've communicated, we are evaluating various alternative strategies to free up some liquidity and strengthen our current balance sheet position. We are continuing to work the process. We're encouraged by the progress made and I hope to bring this to resolution sometime during Q2 of this year. We fully intend to update the market once we have tangible information to share.

2023 年也標誌著 Vertex Energy 作為一家公司的演變和發展發生了重大轉變。全年，我們的重點是在移動煉油廠建設和啟動可再生柴油裝置後啟動可再生業務並優化我們的原料策略。此外，我們透過船用燃料和物流業務擴大了我們在移動的物流足跡，建立我們的貿易和供應部門，為垂直整合更廣泛的業務並獲取更多價值鏈創造了重要機會，自購買移動煉油廠以來，我們今天已向可再生柴油業務投資了約2.6 億美元的新現金，包括固定資產，即到2023 年底用於庫存和融資損失的營運資金的現金部分，我們增加了公司管理費用以支持這一增長，並引進所需的人才來推動我們作為領先的能源轉型公司的總體目標取得進展。鑑於我們在這些措施的啟動和發展方面取得的成就，我們相信我們已經做好了完善策略的準備，從今天的電話會議中我們現在將重點放在現金管理、降低成本和提高利潤率上。我和我的團隊計劃向您通報 2023 年第四季和全年的財務和營運業績的最新情況。首先，我要感謝我的團隊所有今天收聽電話會議的員工一年來所做的出色工作。正如詹姆斯很快就會指出的那樣，我們不僅完成了很多工作，而且還安全地完成了任務，這是最重要的措施，在我將電話交給詹姆斯之前，我知道你們中的許多人都渴望了解最新情況與美國銀行正在進行的流程。正如我們所傳達的，我們正在評估各種替代策略，以釋放一些流動性並加強我們當前的資產負債表狀況。我們正在繼續推進這一進程。我們對所取得的進展感到鼓舞，我希望在今年第二季的某個時候解決這個問題。一旦我們有實際的資訊可以分享，我們完全打算更新市場。

With that, I'll now hand the call over to James.

現在，我將把電話轉給詹姆斯。

Thank you, Ben, and good morning, everyone. I will start, as always with our report on health, safety and environmental performance. Fourth quarter of 2023 was another clean quarter with zero recordable injuries. We did have four minor environmental noncompliance is at the mobile site associated with the planned power outage. Additionally, mobile saw zero process safety events continued its streak of outstanding EH&S performance at the site for the full year 2023. Our environmental health and safety performance reflects a great achievement by our team which I'm extremely proud of. After acquiring the mobile facility, the team was immediately put to test our conversion of the R&D facility was a monumental task as the site executed a project with multiple times as many boots on the ground as normal for the better part of a year throughout this period of unprecedented business with hundreds of unfamiliar faces on the site, the fact that the team was able to successfully maintain daily operations without serious injury or environmental damage and no disruption to our surrounding neighbors. Unity demonstrates the diligence skills and commitment to quality of each of our employees. I'm extremely proud of our legacy business. Also, as that group saw a reduction of 90% year over year and ocean recordables, I'm proud of our employees at every location. We're continually to prioritize the safety first mentality of our entire organization. And I must say thank you to all of our dedicated employees and contractors, the effort and care for each other seen across the entire business as a testament to the employees and contract partners that work within our facilities. Our team at the mobile site demonstrated strong operational performance of the conventional facility during the quarter, which act with average throughput volumes of 67,083 barrels per day for capacity utilization of 89%, consistent with the updated guidance of 67,000 barrels per day in January. Lower volumes reflect the combined impact of a strategic curtailment of throughput in light of deteriorating market conditions during the quarter as well as previously disclosed downtime to proactively replace an electrical transformer. Total OpEx per barrel for the fourth quarter was in line with our guidance at $3.83 per barrel and reflects increasing cost efficiencies gained from smoothed operation, which more than offset the inflationary impact of lower throughput volumes on a cost per barrel basis. Our conventional fuels gross margin per barrel during the quarter was $4.79, reflective of the challenging market conditions encountered in the conventional fuels markets during the quarter, at the onset of the fourth quarter. Market prices for finished motor fuels, including gasoline diesel, began a sharp correction and continued this downward trend throughout the first two months of the quarter before.

謝謝你，本，大家早安。我將一如既往地從我們的健康、安全和環境績效報告開始。2023 年第四季又是一個乾淨的季度，可記錄傷害為零。我們的行動站點確實存在四起與計劃停電相關的輕微環境違規行為。此外，2023 年全年，移動工廠的製程安全事件為零，持續保持其出色的 EH&S 績效。我們的環境健康和安全績效反映了我們團隊的巨大成就，我對此感到非常自豪。在獲得移動設施後，團隊立即開始測試我們對研發設施的改造，這是一項艱鉅的任務，因為在此期間，該工廠在一年的大部分時間裡執行了一個項目，地面上的靴子數量是正常情況下的數倍現場有數百名陌生面孔，業務規模前所未有，團隊能夠成功維持日常運營，沒有造成嚴重傷害或環境破壞，也沒有對周圍鄰居造成乾擾。Unity 展現了我們每位員工的勤奮技能和對品質的承諾。我對我們的傳統業務感到非常自豪。此外，由於團隊的海洋可記錄量比去年同期減少了 90%，我為我們每個地點的員工感到自豪。我們不斷將整個組織的安全第一心態放在第一位。我必須對我們所有敬業的員工和承包商表示感謝，整個企業的努力和對彼此的關心是對在我們設施內工作的員工和合約合作夥伴的證明。我們的行動站點團隊在本季度展示了傳統設施的強勁營運績效，該設施的平均吞吐量為每天 67,083 桶，產能利用率為 89%，與 1 月份每天 67,000 桶的最新指導一致。銷量下降反映了由於本季度市場狀況惡化而戰略性削減吞吐量以及先前披露的主動更換變壓器的停機時間的綜合影響。第四季每桶總營運支出符合我們每桶 3.83 美元的指導，反映出平穩營運帶來的成本效率不斷提高，足以抵銷每桶成本較低吞吐量帶來的通膨影響。本季我們的每桶傳統燃料毛利率為 4.79 美元，反映了第四季初期傳統燃料市場在本季遇到的充滿挑戰的市場狀況。包括汽油柴油在內的成品汽車燃料的市場價格開始大幅調整，並在上一季的前兩個月持續這種下降趨勢。

Finally, reversing course, in early December, weakness in fuel prices for much of the quarter have significant negative impact on our fuels gross margin per barrel in our conventional fuels business. However, just as quickly as prices began, the downward trend at the beginning of the quarter, base have steadily rebounded since early December and through most of the first quarter of 2024 our finished products such as gasoline, diesel and jet fuel, accounted for 66% of our total product yield during the fourth quarter 2023. This was in line with our guidance and reflecting continued focus on facility wide yield optimization, as we've previously described.

最後，在 12 月初，本季大部分時間燃料價格疲軟，對我們傳統燃料業務的每桶燃料毛利率產生了重大負面影響。然而，正如價格開始出現一樣，季度初的下降趨勢自 12 月初以來一直在穩步反彈，在 2024 年第一季的大部分時間裡，我們的汽油、柴油和航空燃油等成品佔 66佔2023 年第第四季產品總產量的百分比。正如我們之前所描述的，這符合我們的指導方針，並反映出對設施範圍產量優化的持續關注。

Now turning to our renewable fuels business. Vertex's renewable diesel plant operated smoothly, generating total renewable fuels gross margin per barrel of $12.11 for the quarter. Our fuel gross margin for fourth quarter 2023 included $6.1 million of benefit attributed to production volumes from the second third quarters. Adjusting for the third quarter LCFS credit, our fuel gross margin per barrel for the fourth quarter was approximately a negative $4.78. Our renewable throughput volumes averaged 3,926 barrels per day for capacity utilization of 49%, in line with our recently updated guidance as Chris will detail in a moment.

現在轉向我們的再生燃料業務。Vertex 的再生柴油工廠運作順利，本季每桶再生燃料總毛利率為 12.11 美元。我們 2023 年第四季的燃料毛利率包括歸因於第二第三季產量的 610 萬美元收益。調整第三季 LCFS 信貸後，我們第四季每桶燃料毛利率約為負 4.78 美元。我們的再生能源吞吐量平均每天 3,926 桶，產能利用率為 49%，符合我們最近更新的指導方針，克里斯稍後將詳細介紹。

Our crude oil throughput projections for first quarter are expected to be between 60,000 barrels and 63,000 barrels per day. We'll have a planned small turnaround of one of the reformers and a pit stop of one of the crude units during March as we prepare the plants are generally higher margin periods in the second and third quarter ahead of gasoline demand during the driving season, we have seen margins increase in the first quarter and have accelerated crude throughput volumes in conjunction with the improved margin environment.

我們對第一季原油吞吐量的預測預計為每天 60,000 桶至 63,000 桶。我們將計劃在三月對其中一台重整裝置進行小規模檢修，並在三月份對一台原油裝置進行一次進站，因為我們準備在駕駛季節期間的汽油需求之前，第二和第三季度的工廠通常是利潤率較高的時期，我們看到第一季的利潤率增加，隨著利潤率環境的改善，原油吞吐量也有所增加。

Looking out to the remainder of 2024, we continue to make good progress on the development of Phase two of our RD. conversion project as well as the work necessary to qualify additional feedstock. We continue to believe in our expansion of 14,000 barrels a day is on track for completion in the first quarter of 2025 as we've previously communicated, the RD. business continues to be challenging in 2024 as we use this time to develop capabilities and operating the unit as well as understand the differences with various feedstock slate, which Doug hard to expand on in a moment.

展望 2024 年剩餘時間，我們的研發第二階段的發展將持續取得良好進展。轉換項目以及鑑定額外原料所需的工作。我們仍然相信，正如我們之前所傳達的那樣，每天 14,000 桶的產能擴張預計將在 2025 年第一季完成。 2024 年，業務仍然面臨挑戰，因為我們利用這段時間來發展能力和運營該部門，並了解各種原料板的差異，Doug 暫時很難擴展這些內容。

Moving quickly over to our legacy business. Operational performance in 2023 from or was outstanding as they saw a 4.4% capacity improvement year over year. And we also saw a 23% increase in collection volumes in our collections business through our UMO collection operations. Both of those groups have had an excellent 2020.

快速轉向我們的傳統業務。2023 年的營運表現非常出色，產能年增了 4.4%。透過 UMO 催收業務，我們的催收業務催收量也成長了 23%。這兩個群體都度過了出色的 2020 年。

I will now turn the call over to Chief Financial Officer, Chris Carlson, for a review of the Company's financial results and additional detail regarding our financial and operating outlook for the first quarter 2020 footprint.

我現在將把電話轉給財務長 Chris Carlson，以審查公司的財務業績以及有關我們 2020 年第一季財務和營運前景的更多詳細資訊。

Thank you, James, and welcome to those joining us on the call today. Before reviewing our detailed financial results for the fourth quarter and full year 2023. I want to reiterate our continued focus on the improvement of our balance sheet. The elimination of our high-interest term loan and convertible notes has been a key component of our overall strategy following our transformational acquisition of the Mobius facility in 2022 over the course of 2023. We made notable progress towards this quarter with the announcement of our private exchange of approximately $80 million of our 6.25% convertible notes due 2027. We expect to continue our pursuit of this strategy, utilizing the most efficient tools accessible to us along those path.

謝謝你，詹姆斯，並歡迎今天加入我們電話會議的人們。在回顧我們第四季和 2023 年全年的詳細財務表現之前。我想重申，我們將繼續專注於改善資產負債表。繼我們於 2022 年轉型收購莫比烏斯融資後，我們在 2023 年期間取消高利率定期貸款和可轉換票據一直是我們整體策略的關鍵組成部分。我們在本季取得了顯著進展，宣布私下交換 2027 年到期的 6.25% 可轉換票據中約 8,000 萬美元。我們期望繼續追求這項策略，利用我們沿途可用的最有效的工具。

Turning now to our financial results, Vertex reported net loss attributable to the Company of $63.9 million for the fourth quarter and $71.5 million for the full year 2023. This compares to $44.4 million and $4.8 million reported in the fourth quarter and full year 2022, respectively. Total adjusted EBITDA loss of $35.1 million in the fourth quarter and $17.1 million for the full year 2023 as compared to $75.2 million and $161 million in the prior year period, respectively. During the quarter, we recorded operating cash flow before changes in working capital of negative $43.6 million. Total capital expenditures for the fourth quarter of 2023 were $11.7 million or 33% below our prior guidance issued on November seventh, reflecting a deliberate preservation of capital achieved via the deferral of certain discretionary capital expenditures. This primarily includes a realignment of planned capital expenses for Phase two of the renewable diesel project with the external time lines. The deferred timing of these Phase two expenditures has not directly impacted the project schedule.

現在轉向我們的財務業績，Vertex 報告第四季度歸屬於公司的淨虧損為 6,390 萬美元，2023 年全年歸屬於公司的淨虧損為 7,150 萬美元。相比之下，2022 年第四季和全年報告的收入分別為 4,440 萬美元和 480 萬美元。第四季調整後 EBITDA 虧損總額為 3,510 萬美元，2023 年全年調整後 EBITDA 虧損總額為 1,710 萬美元，而去年同期分別為 7,520 萬美元及 1.61 億美元。本季度，我們在營運資本變動前的營運現金流為負 4,360 萬美元。2023 年第四季的總資本支出為 1,170 萬美元，比我們 11 月 7 日發布的先前指引低 33%，反映出透過推遲某些可自由支配的資本支出而有意保留資本。這主要包括根據外部時間表重新調整再生柴油專案第二階段的計劃資本支出。第二階段支出的延遲並沒有直接影響專案進度。

Turning to the balance sheet. As of December 31, 2023, the company had total cash and equivalents, including restricted cash of $80.6 million versus $79.3 million at the end of the prior quarter. Vertex had total net debt outstanding of $205.5 million at the end of the fourth quarter, including lease obligations of $68.6 million, implying a net debt to trailing 12-month adjusted EBITDA ratio of 12 times as of December 31, 2023. As previously announced on January 2, 2024, we reached an agreement with our existing group of lenders to modify certain terms and conditions of the term loan agreement. The amended term loan provides for an incremental $50 million in borrowings, the full amount of which was borrowed upon closing on September 29, 2023, and therefore reflected in our year-end cash position of $8.6 million during a period of rapidly eroding fuels margins encountered in the fourth quarter, we took the opportunity to shore up the balance sheet with additional cash provided by the amendment in order to support adequate financial flexibility through the completion of our ongoing process with Bank of America aimed at evaluating strategic opportunities relative to the other tool available in the market to us. At the time, we maintained our view that the term loan amendment presented the most efficient means of achieving our goal in the short term. After considering several alternatives, we continuously monitor current market conditions and assess our expected cash generation and liquidity needs against our available cash position using the current forward crack spreads in the market.

轉向資產負債表。截至 2023 年 12 月 31 日，該公司的現金及等價物總額（包括限制性現金）為 8,060 萬美元，而上一季末為 7,930 萬美元。截至第四季末，Vertex 的未償淨債務總額為2.055 億美元，其中包括6,860 萬美元的租賃義務，這意味著截至2023 年12 月31 日，淨債務與過去12 個月調整後EBITDA 的比率為12 倍。正如先前於 2024 年 1 月 2 日宣布的那樣，我們與現有貸款人集團達成協議，修改定期貸款協議的某些條款和條件。修訂後的定期貸款規定增加5000 萬美元的借款，該筆金額是在2023 年9 月29 日成交時全額借入的，因此在燃料利潤率迅速下降的時期，我們的年終現金狀況為860 萬美元。在第四季度，我們利用修正案提供的額外現金來支撐資產負債表，以便通過完成與美國銀行的持續流程來支持足夠的財務靈活性，該流程旨在評估相對於其他工具的戰略機會我們可以在市面上買到。當時，我們堅持認為，定期貸款修訂是實現我們短期目標的最有效手段。在考慮了幾種替代方案後，我們持續監控當前的市場狀況，並使用市場上當前的遠期裂解價差根據我們的可用現金頭寸評估我們的預期現金產生和流動性需求。

Looking to the first quarter of 2024, we anticipate total conventional throughput volumes at Mobion to be between 60,000 barrels and 63,000 barrels per day. Our expected yield of conventional products is expected to consist of between 64% to 68% high value finished products such as gasoline, diesel and jet fuel with the balance in intermediate and other products such as VGO.

展望 2024 年第一季度，我們預計 Mobion 的常規總吞吐量將在每天 60,000 桶至 63,000 桶之間。我們的傳統產品預期產量預計將包括 64% 至 68% 的高價值成品，如汽油、柴油和噴射燃料，其餘為中間產品和其他產品，如 VGO。

On the renewable side of business, we expect a total throughput of renewable feedstock to average between 3,000 barrels and 5,000 barrels per day for approximately 38% to 63%. Utilization on our total Phase one production capacity of 8,000 barrels per day. We anticipate an efficient total production yield by renewable diesel between 96% to 98% for the first quarter as well.

在再生業務方面，我們預計可再生原料的總吞吐量平均為每天 3,000 桶至 5,000 桶，佔比約為 38% 至 63%。第一階段的總產能利用率為每天 8,000 桶。我們預計第一季再生柴油的有效總產量也將在 96% 至 98% 之間。

Anticipated OpEx per barrel encompassing both conventional and renewables businesses on a fully consolidated basis is projected to range between $4.59 and $4.95 For the quarter, we anticipate total capital expenditures for the first quarter to be between $20 million to $25 million. As of the fourth quarter of 2023, Vertex has entered into fixed price swap contracts covering approximately 40% of expected diesel and distillate production for the first quarter of 2024 at a weighted average swap price of $28.39 per barrel.

在完全合併的基礎上，涵蓋傳統能源和再生能源業務的每桶預期營運支出預計在4.59 美元至4.95 美元之間。對於本季度，我們預計第一季的總資本支出將在2,000 萬美元至2500 萬美元之間。截至 2023 年第四季度，Vertex 已簽訂固定價格掉期合同，涵蓋 2024 年第一季度預期柴油和餾分油產量的約 40%，加權平均掉期價格為每桶 28.39 美元。

I'd now like to turn the call to Chief Commercial Officer, David Koch and Chris.

我現在想把電話轉給首席商務官大衛·科赫和克里斯。

First, I want to share that our feedstock optimization strategy has progressed according to plan. As expected, our temporary LCFS pathway approval last year resulted in us receiving LCFS credits for imports to California, producing a $9.6 million benefit. We were also able to complete our runs and the data collection required to support our provisional LCFS application for for Vertex specific pathways covering soy, canola, tallow and DCF. This application has been submitted to carbon. We expect that we will receive LCFS credits. Based on these improved CI. scores, we're imports into California during 2024, which will improve our per gallon credit values as compared to the temporary I. values received last year with our provisional pathway application filed for our first for feedstocks, we have shifted our focus to completing additional 90 day runs of lower CI feeds, specifically Yuko in poultry fat. These fields represent not only improves the eye values, but also outright lower cost, which started aggregating inventory needed to support these roads and expect to complete the run through these additional feeds during the second quarter across all families of feedstocks, the team has been able to double our supplier base over the last quarter, and the market continues to provide tremendous support for our facility. Logistically, we've continued to receive supply primarily via barge and rail for the addition of Hugo and poultry fat to our supply base is that of truck deliveries to our logistics mix. We've started to rationalize our feedstock inventories of each grade as we build confidence in each supply chain and any supplier. It's optimization allows us to create more flexible blending schedules and having multimodal delivery capacity across dedicated tanks for each class of feedstock plus to capture price changes quickly has volatility in feedstock pricing has continued to be very material for primary message around feedstocks as one of abundant and flexible supply from a portfolio of suppliers that have been reliable and support through, appreciate all them working with us as we've pursued each of these pathways, we continue to build our yield curves and carbon intensity, David, through all these changes and feedstocks run rates, hydrogen uptake rates across a wide range of blends. Our plant has operated reliably and maintain high conversion rates. This reflects both on the design engineering, construction quality. We have now seen evident and plant performance, but also just as importantly on the commitment, skill and cohesive team work with which our trading operations and engineering teams have executed this demanding plant in conjunction with building a new business and renewable diesel production, continuing to build out our supply, trading risk management and commercial marketing capabilities. These capabilities, along with our continued development of internal logistics, barge and commercial delivery capabilities, position us to continue to reduce cost and secure improved netbacks and margins for our conventional refineries and our renewables business with our initial offtake contracts starting to come up for negotiation we could begin now to use new supply, trading and commercial capabilities across all of our products, improve our netbacks for our production. We have already seen benefits by leveraging our internal capabilities to bring a portion of our Marrero production to where we are blending capacity and we'll be able to produce a higher-value finished products product also supported the launch of our marine fueling business that allows us to capture retail margin on those barrels versus being traded in the bulk wholesale markets. We're still in the early stages, but this is the type of work we are doing to bring continuous improvement on net backs and build a reliable customer base around the business that maximizes the value of all of our products.

首先，我想告訴大家的是，我們的原料優化策略已按計畫取得進展。正如預期的那樣，我們去年的臨時 LCFS 途徑批准使我們獲得了加州進口的 LCFS 信貸，產生了 960 萬美元的收益。我們還能夠完成支持我們針對 Vertex 特定途徑（涵蓋大豆、油菜、牛脂和 DCF）的臨時 LCFS 申請所需的運行和數據收集。該申請已提交給碳。我們預計將獲得 LCFS 學分。基於這些改進的CI。得分，我們在2024 年期間進口到加利福尼亞州，與去年收到的臨時I. 值相比，這將提高我們的每加侖信用值，我們為我們的第一個原料提交了臨時途徑申請，我們已將重點轉向完成額外的工作90 天運行較低 CI 飼料，特別是家禽脂肪中的 Yuko。這些領域不僅提高了視覺價值，而且徹底降低了成本，開始匯總支持這些道路所需的庫存，並預計在第二季度完成所有原料系列的這些額外飼料的運行，該團隊已經能夠上季度我們的供應商數量翻了一番，市場繼續為我們的工廠提供巨大的支持。在物流方面，我們繼續主要透過駁船和鐵路接收供應，將雨果和家禽脂肪添加到我們的供應基地，即卡車運送到我們的物流組合。隨著我們對每個供應鏈和任何供應商建立信心，我們已經開始合理化每個等級的原料庫存。它的優化使我們能夠創建更靈活的混合計劃，並為各類原料提供跨專用儲罐的多式聯運交付能力，並且能夠快速捕捉價格變化。原料價格的波動對於圍繞原料的主要信息仍然非常重要，因為原料是豐富和可靠的之一。來自可靠和支持的供應商組合的靈活供應，感謝他們在我們追求每一條途徑時與我們合作，我們通過所有這些變化和原料繼續建立我們的產量曲線和碳強度，大衛各種混合物的運轉率、氫吸收率。我們的工廠運作可靠並保持高轉換率。這既體現在設計工程、施工品質。現在，我們已經看到了明顯的工廠績效，但同樣重要的是我們的貿易運營和工程團隊的承諾、技能和凝聚力團隊合作，在建設新業務和可再生柴油生產的同時，執行了這座要求嚴格的工廠，並繼續建立我們的供應、貿易風險管理和商業行銷能力。這些能力，加上我們內部物流、駁船和商業交付能力的持續發展，使我們能夠繼續降低成本，並確保我們的傳統煉油廠和可再生能源業務的淨收益和利潤得到改善，並且我們的初始承購合約已開始進行談判我們現在可以開始在我們所有的產品中使用新的供應、貿易和商業能力，改善我們的生產淨回報。我們已經看到了透過利用我們的內部能力將部分Marrero 生產帶到我們混合能力的地方所帶來的好處，我們將能夠生產更高價值的成品產品也支持了我們的船用加油業務的啟動，該業務允許我們可以獲得這些桶的零售利潤，而不是在大宗批發市場上進行交易。我們仍處於早期階段，但這正是我們正在做的工作，旨在不斷改進淨收益並圍繞業務建立可靠的客戶群，從而最大限度地提高我們所有產品的價值。

Frankly, Doug once again, our team has done a great job of managing our operations, reducing risk and executing the expansion of our business capabilities as we navigate the first quarter of 2024, we anticipate facing similar challenges and market fluctuations experienced in 2023. Our priorities will continue to be safety and reliability for the continued focus on cash management, cost reduction and tax from enhanced margin opportunities. I wish to reiterate to everyone on this call that our strategic decision to acquire the mobile refinery. It was driven by the significant long-term potential we saw and continue to see in the renewable sector. Our substantial cash investments in renewables are testament to our confidence in this decision. The renewable diesel project was launched with remarkable speed and cost effectiveness, yet it represents a multi-year endeavor within a still evolving market, reflecting on the journey 2022 was about establishing our foundation 2023 about building the structure and 2024 is focused on advancing the spring more towards our 2025 goal, by which time we expect our transformation into a leading energy transition company to yield results that better reflect the value of this business. Until then, we have work to do and we look forward to keeping you updated on the exciting milestones we have planned it here.

坦白說，Doug 再次表示，在 2024 年第一季度，我們的團隊在管理營運、降低風險和擴展業務能力方面做得非常出色，預計我們將在 2023 年面臨類似的挑戰和市場波動。我們的首要任務將繼續是安全性和可靠性，以繼續專注於現金管理、降低成本和透過提高利潤機會減少稅收。我想在這次電話會議上向大家重申我們收購行動煉油廠的策略決定。這是由我們在再生能源領域看到並將繼續看到的巨大長期潛力所推動的。我們對再生能源的大量現金投資證明了我們對此決定的信心。再生柴進一步實現我們的 2025 年目標，屆時我們預計轉型為領先的能源轉型公司，所取得的成果能夠更好地體現該業務的價值。在那之前，我們還有工作要做，我們期待向您通報我們在這裡計劃的令人興奮的里程碑的最新情況。

Thank you. I will turn the call now over to the operator for questions.

謝謝。我現在將電話轉給接線員詢問問題。

If you would like to ask a question, press star followed by the number one on your telephone keypad.

如果您想提問，請按星號，然後按電話鍵盤上的數字 1。

Your first question comes from the line of Eric Stine with Craig-Hallum. Your line is open.

你的第一個問題來自艾瑞克·史坦與克雷格·哈勒姆的對話。您的線路已開通。

Hey, good morning there.

嘿，早安。

It appears Eric's line has dropped your first question comes from the line of Donovan Shafer with Northland Capital Markets.

看來埃里克的線路已經放棄了您的第一個問題，來自北國資本市場的多諾萬謝弗的線路。

Craig, good morning, guys, and thanks for taking the questions. So I wanted to follow up on Doug's comments. Are saying during the prepared remarks that the CIU. and I think in the release it said you have successfully sort of completed the runs on the four feedstocks, Astra renewable diesels and then all the Cross, the T's dot the i's and sort of submitting everything and that that should come back. You expect sometime in 2024 getting the Yes, the benefit showing up sort of in the financials or recognition on that from the improved CI. scores. Is there do you have a sense at all of whether that's kind of like first half of '24, second half kind of earlier or later because there's some kind of risk or potential it gets pushed into 2025. I know you don't veer chronically things. Can they have a wide range of variation between agencies and whatnot and how quickly things get turned around. So I think higher would be helpful on your question.

克雷格，早上好，夥計們，感謝您提出問題。所以我想跟進道格的評論。CIU 在準備好的演講中說道。我認為在新聞稿中它說你已經成功地完成了四種原料、阿斯特拉可再生柴油的運行，然後是所有的十字架、T 點和 i 並提交了所有內容，這應該會回來。您預計在 2024 年的某個時候會得到「是」的答复，這種好處會在財務數據中顯現出來，或者會從改進的 CI 中得到認可。分數。你有沒有感覺到這是否有點像 24 年上半年，下半年則更早或更晚，因為存在某種風險或潛力，它會被推遲到 2025 年。我知道你不會長期改變事情。機構之間的差異是否很大，以及事情扭轉的速度有多快。所以我認為更高的水平會對你的問題有幫助。

I mean, yes, our expectation is that we should have the new scores in place for second quarter production possibly first quarter, although that's a you know, again, we'd have to have kind of outperformance on the part of the regulator, which to their credit. We've had good responses and relationship and they they've been supportive throughout the process so far now they're engaged and supportive and moving things faster, can we've also taken some steps to get the audit phase of the submission kicked off early. So we think that could that could reduce the cycle time. So but in short now we expect some benefit from that in the first half, not perhaps all of first half, but we're hopeful there far we'd certainly expect to be fully covered under those pathways for the second half.

我的意思是，是的，我們的期望是，我們應該為第二季的生產（可能是第一季）制定新的分數，儘管這是你知道的，但我們必須在監管機構方面表現出色，這以他們的信用。我們得到了良好的回應和關係，到目前為止，他們在整個過程中一直提供支持，現在他們參與並支持並更快地推動事情，我們是否也可以採取一些措施來啟動提交的審核階段早期的。所以我們認為這可以減少週期時間。因此，但簡而言之，我們預計上半年會從中受益，也許不是上半年的全部，但我們希望到目前為止，我們肯定希望下半年能完全覆蓋這些途徑。

Okay. And then I'm kind of talking about the cost side of the equation, getting into some nuance things and whether or not these can be material or move the needle. I believe in the fourth quarter there was some impact from the Panama Canal as you can kind of quantify or talk about maybe the transportation cost dynamic in general, you know, the ability to switch to rail or whatever. Because with the renewable diesel that that's got to get to California, you don't really have too much option in terms of where you send the product. And so just how transportation costs play into that. And the other one would be natural gas prices are so low. And I don't know if the hydrogen you get to some help in the hydrocracker for the renewable diesel and yes, and a lot of it's coming from natural gas, and that is impacted by natural gas price. Those of course, are super low right now. So I don't know if that gives kind of a tailwind or helps there at all or if that's just de minimus of a difference to matter. So those kind of two things, transportation and natural gas.

好的。然後我會談論等式的成本方面，討論一些細微差別，以及這些是否可以是實質性的或能起到推動作用。我相信第四季度巴拿馬運河產生了一些影響，因為您可以量化或談論一般的運輸成本動態，您知道，轉向鐵路或其他方式的能力。因為再生柴油必須運往加州，因此在將產品發送到哪裡方面實際上沒有太多選擇。那麼運輸成本是如何影響其中的呢？另一個原因是天然氣價格太低。我不知道氫氣是否對再生柴油的加氫裂解裝置有幫助，是的，其中許多來自天然氣，這受到天然氣價格的影響。當然，現在這些都非常低。所以我不知道這是否會帶來某種順風或有任何幫助，或者這只是微不足道的差異。所以這兩件事，交通和天然氣。

Yes. I'll take transportation and I'll hand to James for the natural gas question? Yes, the fourth quarter transportation cost was up. Eric, I had in terms of the Panama Canal impact, I think it was on your $6 million above our normal rates, which we know you can look at the Q3 numbers and sort of interpret those. But we really it was a kind of a crazy situation where you send the ship, you participate in a live auction once you're there are on your way there and you don't really know what the cost is going to be until you get through and so kind of a chaotic mess, if you would. We've since fixed that for the first six months of this year, but they have a good trade on the transportation capacity for the partner at and firm slots or guaranteed positions through the canal that was able to take those costs out from the canal has improved operationally. So both of those are helping us. And we don't expect to see those costs in the first or second quarter, Tom, as a result of the repositioning we've done on that transportation. So that's been that's been favorable, but it was a tough lesson learned in Q4. We are far from the only wants to experience it and talking to other industry players. Everybody was up against the same same expense to get through the canal, I think basically at 40 or 50% throughput rates on terms of shifts per day as compared to normal. So there's a pretty big problem. But again, we we believe we've rectified that for the first half of this year and hopefully all year as things normalize. But we've got good line of sight for the first two quarters of this transportation costs hitting back to our normal business case rates that Canada.

是的。我會搭乘交通工具，然後將天然氣問題交給詹姆斯？是的，第四季的運輸成本上漲了。艾瑞克（Eric），就巴拿馬運河的影響而言，我認為您的影響超出了我們的正常費率 600 萬美元，我們知道您可以查看第三季的數據並對其進行某種解釋。但我們確實這是一種瘋狂的情況，你發送船隻，一旦你到達那裡，你就參加現場拍賣，在你到達那里之前，你並不真正知道成本是多少，直到你得到如果你願意的話，可以經歷一些混亂的事情。我們已經在今年前六個月解決了這個問題，但他們在合作夥伴的運輸能力方面有良好的交易，並且通過運河的固定槽位或保證位置能夠從運河中消除這些成本操作上得到改善。所以這兩者都在幫助我們。湯姆，由於我們對運輸進行了重新定位，我們預計第一季或第二季不會出現這些成本。所以這是有利的，但這是第四季學到的慘痛教訓。我們遠非唯一想要體驗它並與其他行業參與者交談的人。每個人都面臨著同樣的費用來通過運河，我認為與正常情況相比，每天班次的吞吐率基本上是 40% 或 50%。所以有一個很大的問題。但我們再次相信，我們已經在今年上半年糾正了這個問題，並希望隨著情況正常化，全年都能糾正這個問題。但我們對前兩個季度的運輸成本有良好的預期，將恢復到加拿大的正常商業案例費率。

Okay. Yes, nat gas, that is indeed the source of hydrogen from our Madison unit that we have on site today in the future. That will be about 50% of the sea going into the hydrogen plant on the large one that we're currently in construction, but we are seeing indeed cheap natural gas, which in turn translates the price of hydrogen.

好的。是的，天然氣，這確實是我們今天在現場的麥迪遜裝置未來的氫氣來源。大約50%的海水將進入我們目前正在建造的大型氫氣生產工廠，但我們確實看到了廉價的天然氣，這反過來又影響了氫氣的價格。

On the energy side, I don't have the exact number for you, but we are seeing that and really looking at what do we think it's going to happen this year into the future and what's going to happen with natural gas. So that indeed is the case, we haven't hedged and we have not hedged any of it?

在能源方面，我沒有確切的數字，但我們正在看到這一點，並真正研究我們認為今年和未來會發生什麼，以及天然氣會發生什麼。那麼事實確實如此，我們沒有對沖，我們也沒有對沖任何一個？

Yes, yes, good.

是的，是的，很好。

Okay, good. Good demand we might see us is pretty is pretty attractive.

好的。我們可能會看到我們的良好需求非常有吸引力。

Yes, as current for us very attractive. And actually, if I could just squeeze one more on kind of cash options or flexibility stuff there. And in the release for the upsizing of the term loan there is there is a sort of brief mention of another $25 million that is sort of maybe contemplated in the extension or at least like a framework or something put in there. So you can kind of give an update on like what's the how is that like a commitment by the lender in some way? Or is it some kind of fluids or discretionary, but you at least have the pieces in place. And there was also if you'd consider like of Marrero refinery or other assets as something you can monetize or we lean on in some way to raise cash?

是的，目前對我們來說非常有吸引力。事實上，如果我能再擠出一點現金選擇或彈性的話。在擴大定期貸款規模的新聞稿中，有一個簡短的提及，可能會在延期中考慮另外 2500 萬美元，或者至少是一個框架或放入其中的東西。因此，您可以提供有關貸款人以某種方式做出的承諾的最新資訊嗎？或是某種液體或任意的，但你至少已經把各個部分都準備好了。還有，您是否會考慮將馬雷羅煉油廠或其他資產視為可以貨幣化的東西，或者我們依靠某種方式籌集現金？

Yes, Jonathan, there's been the change in our loan terms with the lending group included an additional $25 million. It is subject to their approval from the club of lenders have been very supportive of the business, obviously from the purchase of the refinery and all the work and investments that we've made. So and we do have that as a as a opportunity to go back to our lenders for additional liquidity focus, obviously is on the we have a process that and fairly addresses liquidity on a much bigger picture. So so that's the best at the state of the relationship with the lender. So I think that's good and we stay in close. We don't have contact with them, and they're up to speed on the business as we go forward.

是的，喬納森，我們的貸款條款發生了變化，貸款集團增加了 2500 萬美元。這需要得到貸款人俱樂部的批准，貸款人俱樂部一直非常支持這項業務，這顯然來自於購買煉油廠以及我們所做的所有工作和投資。因此，我們確實有一個機會回到我們的貸方以獲得額外的流動性關注，顯然我們有一個流程，可以在更大的範圍內公平地解決流動性問題。所以這是與貸方關係最好的狀態。所以我認為這很好，我們保持密切聯繫。我們與他們沒有聯繫，隨著我們的進展，他們會及時了解業務的進展。

Okay, great. And maybe as well connects us to my questions off-line.

好的，太好了。也許還可以讓我們離線了解我的問題。

Thank you.

謝謝。

The next question comes from the line of Eric Stine with Craig-Hallum. Your line is open for you.

下一個問題來自艾瑞克·史坦與克雷格·哈勒姆的對話。您的線路已為您開放。

No idea what happened before, but I'll just jump into it. So maybe thinking about the first quarter when thinking about first quarter and just the operational outlook, I see you're guiding to lower throughput, and I know that the market has improved somewhat and it sounds like you have hedged favorably to an extent. So just curious, I mean, it's not a non-answer, but the market is still very tough and you mentioned a small turnaround. Any other color on what's happened in first quarter, Bill?

不知道之前發生了什麼，但我會跳進去。因此，也許在考慮第一季和營運前景時考慮第一季度，我看到您正在指導降低吞吐量，而且我知道市場有所改善，聽起來您在一定程度上進行了有利的對沖。所以只是好奇，我的意思是，這不是一個沒有答案的問題，但市場仍然非常艱難，而且你提到了一個小轉變。比爾，對第一季發生的事情還有其他看法嗎？

Yes, this is higher because James, really what we're doing in the first quarter, we started the year. We are we we're held crude back a little bit because margins have not returned on us yet, but they have. And so we entered in turn raised rates through the month of February. It didn't have a little bit of maintenance in January that we did. And then in March, it's really about a reformer turnaround and a change in catalysts and doing work there as also our planned number one crude unit where we're going in and doing maintenance on it and cleaning it up. And this is our typical twice a year and our point of view in setting this up was we would do this prior to the driving season coming in April, May, June, July, and we'll be able to run full rates during that time. And I hope the plant back so that that's what was behind our thought. And that's our plan to do that and run full in the future based upon the market conditions, we believe that are coming.

是的，這個數字更高，因為詹姆斯，我們在第一季所做的事情，我們開始了這一年。我們確實受到了一些阻礙，因為利潤還沒有回到我們身上，但他們回來了。因此，我們在整個二月依次提高了利率。一月我們沒有進行任何維護。然後在三月份，這實際上是關於重整器的周轉和催化劑的更換，以及我們計劃的第一號原油裝置的工作，我們將在那裡對其進行維護和清理。這是我們通常每年兩次，我們設定此計劃的觀點是，我們會在四月、五月、六月、七月駕駛季節到來之前進行此操作，並且我們將能夠在這段時間內以全價運行。我希望工廠能回來，這就是我們的想法。這就是我們的計劃，並根據市場狀況在未來全面運行，我們相信這一點即將到來。

Got it. Okay. But my sense from Intel, Paul, maybe just last one for me and then I'll take the rest offline.I know when you are acquiring those utility and then embarked on the RD. plan that you viewed that, that you'd be in an advantageous spot from a feedstock perspective, both availability and price. I'm curious as you look back is that how it has played out?And just curious what kind of mix are you thinking about in terms of finished feedstock versus tolling and maybe the economics? It doesn't mean it doesn't really matter, but just curious on the others.

知道了。好的。但我從英特爾的感覺，保羅，也許只是我的最後一個，然後我會將其餘的離線。我知道你什麼時候獲得這些實用程序，然後開始研發。您認為從原料角度來看，您將處於有利位置，無論是可用性還是價格。我很好奇當你回顧過去的時候事情是如何發生的？只是好奇您在成品原料與來料加工以及經濟效益方面正在考慮什麼樣的組合？這並不意味著它並不重要，只是對其他人感到好奇。

Yes, Doug here it's a great question. We've certainly seen the advantages we believed were there in the site materialize from a logistics and availability and security of supply standpoint, our deep roster of suppliers, a lot of liquidity across most every grade they want. And obviously, as we get into the the more disparate feeds that aren't produced from large integrated suppliers like the Yukos coming from small gatherers and collectors and poultry fat, which is prevalent in the Southeast with a lot of but the chicken industry around us from those take a little bit more work, like I like I mentioned, we are bringing in trucks now, which is we've avoided as long as we could just because a lot of handling costs and testing costs on each truck versus a larger reopener come. But we're seeing the prices of those be more than attractive enough to justify that work. So I think when it comes to prices we've seen on our basis versus the futures price, everybody can see some to be coming back in line where we expected. We're sort of starting to draw too many conclusions on the late summer spike is and I think finally, the flat prices went up substantially, but the basis really blew out we don't have any indication that we were disadvantaged in that regard derive any evidence that we were particularly advantaged either.

是的，道格，這是一個很好的問題。從物流、供應的可用性和安全性、我們豐富的供應商名冊、他們想要的幾乎每個級別的大量流動性來看，我們確實看到了我們相信該網站存在的優勢。顯然，當我們進入更不同的飼料時，這些飼料不是由像尤科斯這樣的大型綜合供應商生產的，而是來自小型採集者和收集者以及家禽脂肪，這種飼料在東南部很普遍，但我們周圍的養雞業這些需要更多的工作，就像我提到的那樣，我們現在正在引入卡車，這是我們盡可能避免的，因為每輛卡車的處理成本和測試成本與更大的重新開放相比來。但我們看到這些產品的價格極具吸引力，足以證明這項工作的合理性。因此，我認為，當談到我們根據我們的基礎價格與期貨價格看到的價格時，每個人都可以看到一些價格會回到我們的預期。我們開始對夏末的峰值得出太多結論，我認為最終，公寓價格大幅上漲，但基礎確實爆炸了，我們沒有任何跡象表明我們在這方面處於不利地位有任何證據表明我們特別有優勢。

Right. So I mean, I think the whole industry sort of got caught in a pretty strong run up some, but we have seen as those and the steel prices are down and basis, that's come back in line that given where we're at logistically, we're able to take advantage of that very, very rapidly, and we've gotten a lot better at just rationalizing the inventory, as I mentioned, and I think we've been very transparent with folks that knew there was a lot of banks in industry. And I know every almost every analyst we talk to every investor we talk to you about, hey, when you're spending all this money, you're starting this brand new unit. You better make darn sure that you got inventory and feedstocks to feed it because everybody is worried there wasn't big enough to go around, obviously, some so we we create a lot of inventory headed in to Florida. Some took us really more run rates of both quarters to run through all that feed on. But now as we look at our typical days supply on hand, we're trying to stay. So 30 days max were before we had a couple of months' worth of inventory on hand, which is if not, where do you want to be in terms of lining up your ability to take advantage of price declines quickly and turn that into product and capture that capture crack. So we're much better positioned for that.

正確的。所以我的意思是，我認為整個行業都陷入了相當強勁的上漲，但我們已經看到這些和鋼鐵價格下跌，基礎上，考慮到我們在物流方面的情況，這已經恢復了，我們能夠非常非常迅速地利用這一點，正如我所提到的，我們在合理化庫存方面做得更好，而且我認為我們對那些知道有很多庫存的人一直非常透明。工業銀行。我知道我們與每位投資者交談的幾乎每一位分析師，嘿，當你花掉所有這些錢時，你正在啟動這個全新的部門。你最好確保你有庫存和原料來餵養牠，因為每個人都擔心沒有足夠大的庫存和原料來供應它，顯然，一些所以我們創建了大量庫存前往佛羅裡達。有些確實需要我們兩個季度的更多運行率來運行所有的飼料。但現在，當我們審視現有的典型天數供應時，我們正在努力留下來。因此，最多 30 天，我們手頭上就有了幾個月的庫存，如果沒有的話，您希望在哪些方面發揮您的能力，迅速利用價格下跌的機會，並將其轉化為產品和產品捕捉那個捕捉裂縫。所以我們在這方面處於更好的位置。

Now on how quickly the feed pricing adjusts to account for the decline in the regulatory credits that remains to be seen, we're still chasing that, right? I mean, we've got a frenzy continued to collapse and LCFS isn't helping much. It's been stable, but at a very, very low level and so fees have come down quite quite a lot, certainly dramatically from third and fourth quarter, but they still got room to run in order to create the right margin structure one needs, given that rents have declined faster home. So we feel good about the progress we've made in that regard and certainly very comfortable that we're in a great position from a supply chain standpoint, have access to a broad array of feeds on sufficient logistics, good, good modes of transport and now a really good opportunity to optimize our storage and terminalling positions to turn quickly and trying to eliminate as much of that lag impact as we can as we're coming down the price curve on the.

現在，飼料價格調整的速度有多快，以適應監管信貸的下降，還有待觀察，我們仍在追尋這一點，對嗎？我的意思是，我們的狂熱持續瓦解，而 LCFS 並沒有多大幫助。它一直很穩定，但處於非常非常低的水平，因此費用下降了很多，尤其是從第三季度和第四季度開始大幅下降，但他們仍然有運行的空間，以創建人們需要的正確的利潤結構，因為那家的租金下降得更快。因此，我們對在這方面取得的進展感到滿意，並且從供應鏈的角度來看，我們處於有利地位，能夠獲得充足的物流、良好的運輸方式的廣泛供應，這當然也讓我們感到非常滿意。現在是一個非常好的機會，可以優化我們的儲存和終端頭寸，以便快速轉變，並在我們沿著價格曲線下降時盡可能消除滯後影響。

Okay. That's great. Thank you.

好的。那太棒了。謝謝。

Your next question comes from the line of Noah Kaye with Oppenheimer discipline.

你的下一個問題來自諾亞·凱與奧本海默紀律的路線。

Thanks. Up picking up on the marketing front. I think you know, in the prepared remarks, you mentioned some of the initial offtake contracts coming up for renewal or expiring. Can you just elaborate on that a little bit and talk about potential pricing and margin capture opportunities?

謝謝。在行銷方面取得進展。我想您知道，在準備好的發言中，您提到了一些即將續約或到期的初始承購合約。您能否詳細說明並討論潛在的定價和利潤獲取機會？

Yes. So the first the four contracts that we were able to retender to the market were predominantly kit on that came up this quarter. If it rolls over April first up to a new contract so we took that to market from Q4 last year and have been very, very pleased with the results. You know, it's a substantial netback improvement over our previous offtake agreement and with the equally creditworthy and reliable counterparty that we're excited to be doing business with on that we believe fully reflects the value of the product that we're producing is there was a quality spread that we weren't capturing previously that we do now. And the next opportunity for that is just marching through the products from diesel and gasoline. We have a notice period approaching. And then we know those are open for unbranded products April next year. So we've got some time to work on that in our offtake partner has been very supportive to good relationship. It's worked very, very well operationally, but we want to make sure that, you know, from a pricing standpoint for forward a fair position to it's full market value for our products, which we're now in position to do saw the results in jet. And we look forward to the results from diesel and gasoline as well.

是的。因此，我們能夠向市場重新招標的前四份合約主要是在本季出現的。如果它在四月首先滾動到新合同，那麼我們從去年第四季度開始將其推向市場，並對結果非常非常滿意。您知道，與我們先前的承購協議相比，這是一個實質性的淨收益改善，並且我們很高興與同樣信譽良好且可靠的交易對手開展業務，我們相信這充分反映了我們正在生產的產品的價值我們以前沒有捕捉到現在我們捕捉到的高品質傳播。下一個機會就是開發柴油和汽油產品。我們的通知期即將到來。然後我們知道這些將在明年四月對非品牌產品開放。因此，我們有一些時間來致力於我們的承購合作夥伴對良好關係的大力支持。它在營運上運作得非常非常好，但我們希望確保，從定價的角度來看，將公平的立場轉變成我們產品的全部市場價值，我們現在能夠做到這一點，並看到了結果噴射。我們也期待柴油和汽油的結果。

Okay, great. The hedges that you entered into. And there's a lot of detail in the release and slides. So appreciate that. I guess just for those of us listening at home on kind of the hedge positions through January and February of effectively in the money. It looks like they were struck on fairly attractive terms and margins to be sort of in line with the market but maybe you can comment on that.

好的，太好了。你進入的樹籬。新聞稿和幻燈片中有很多細節。所以很感激。我想這只是對於我們這些在家裡聆聽一月和二月有效貨幣對沖頭寸的人來說。看起來他們的條款和利潤相當有吸引力，與市場一致，但也許你可以對此發表評論。

Yes. So just a little bit about our strategy. As you know, we hedged about 36% of our gasoline pool. Yes, Chris, and that was Greg again, kind of getting our programs in place, getting back into a routine of taking advantage of attractive cracks when they presented themselves on the forward curves, we felt like that, that gasoline spread and or late summer that carried through the end of the year was unusual. Some further, we also hedged. So we took advantage of that. That was a very favorable outcome on those hedges. Obviously, we wish we would have had more. But on the other hand, you always wish you would lose money on the hedges because you're making more money on the product, right? So but that turned out to be a good position. We took the same mindset for first quarter on diesel, where we saw very strong strengthening in the crack spread for first quarter late in the fourth quarter, well above our margin targets. So we took advantage of that for about half of our production on and again, those have been we feel comfortable in those hedges. I think there the market held up the whole time surprisingly. So from in this case, turns out, they weren't really necessary but we still believe it's a prudent approach when you see so cracks present themselves on the certainly the front quarter that are well above what you're planning for in terms of budget. And so that's that's the approach, I would say that. So as we look at this quarter, four and we look at the second and third quarter, as James mentioned, we're positioning the plant to gear up for driving season, make sure we can run max rates and capture. We expect to be healthy margins for the summer. So we won't know at that point. My expectation is at this at this date that we would not hedge second and third quarter of gasoline or diesel on the forward curves are telling us to do that at this time. And but I would expect in third quarter some four really throughout the summer, if we see the gasoline cracks present themselves as very attractive in the fourth quarter, we will plan to take advantage of that at that time for a material portion of our Q4 production. So if you think about seasonally, that's kind of how we're how we're looking at it. I know that the gas is strong going into the winter and we want to take advantage of it. And it's diesels unusually strong going into summer where we normally see a bit of a drop-off, not nearly as seasonal as gasoline, but still there, we would look at that first for Q1.

是的。簡單介紹一下我們的策略。如您所知，我們對沖了大約 36% 的汽油池。是的，克里斯，又是格雷格，有點讓我們的計劃到位，回到了利用有吸引力的裂縫當它們出現在遠期曲線上時的例行公事，我們感覺就像那樣，汽油蔓延和/或夏末這種持續到年底的情況是不尋常的。此外，我們也進行了對沖。所以我們利用了這一點。對於這些對沖來說，這是一個非常有利的結果。顯然，我們希望能擁有更多。但另一方面，你總是希望在對沖上虧錢，因為你在產品上賺了更多的錢，對吧？但事實證明這是一個很好的立場。我們對第一季柴油採取了同樣的心態，我們看到第四季末第一季裂解價差非常強勁，遠高於我們的利潤目標。因此，我們一次又一次地利用了這一點，進行了大約一半的生產，我們在這些對沖中感到很舒服。我認為市場一直令人驚訝地保持穩定。因此，從這種情況來看，事實證明，它們並不是真正必要的，但我們仍然相信，當您看到前季度出現的裂縫遠遠超出您在預算方面的計劃時，這是一種謹慎的方法。我想說的是，這就是方法。因此，正如詹姆斯所提到的，當我們審視本季、第四季以及第二季和第三季時，我們正在將工廠定位為駕駛季節做好準備，確保我們能夠運行最大速率和捕獲。我們預計夏季利潤率將保持健康。所以到那時我們還不會知道。我的預期是，目前我們不會在遠期曲線上對沖第二和第三季的汽油或柴油，這告訴我們此時要這樣做。但我預計第三季整個夏天大約有四個，如果我們看到汽油裂解在第四季度表現得非常有吸引力，我們將計劃利用這一點來生產第四季度生產的重要部分。因此，如果你考慮季節性，這就是我們看待它的方式。我知道進入冬季氣體會很強烈，我們想利用它。柴油在進入夏季時異常強勁，我們通常會看到一些下降，不像汽油那麼季節性，但仍然存在，我們將首先在第一季度關注這一點。

Okay, helpful. Last one, really around cash and capital expenditures on. So you're guiding for an uptick to that sort of $20 million to $25 million range in 1Q. I think a good portion of that should really be for for maintenance, correct.

好的，有幫助。最後一項，真正圍繞現金和資本支出。因此，您預計第一季的價格將上漲至 2,000 萬至 2,500 萬美元的範圍。我認為其中很大一部分確實應該用於維護，正確的。

So just help us understand how much is kind of for growth versus maintenance? And then how much is left to spend on the Phase two expansion for the RD operations?

那麼請幫助我們了解成長與維持的關係是多少？那麼研發業務二期擴建還剩下多少錢呢？

Yes, this is Chris. No, thanks on the majority of that $20 million to $25 million is around maintenance. As James noted, we're heading into a few turnaround opportunities that have been planned. So the majority again is maintenance, and there's a small piece that is growth and then a little bit R&D at the at least two thirds of that is that the maintenance selected. So less catalyst change in doing the work inside reformer book.

是的，這是克里斯。不，感謝這 2000 萬至 2500 萬美元中的大部分用於維護。正如詹姆斯所指出的，我們正在面臨一些已經計劃好的扭轉機會。因此，大部分都是維護，還有一小部分是成長，然後是一點點研發，其中至少三分之二是維護選擇的。因此，在重整器書中進行工作時的催化劑變化較少。

Okay. And then how much is left to spend on the R&D expansion effort based

好的。然後還有多少資金可以用於研發擴張工作

to the balance is about 30 million for future quarters, have a great day and most of that's loaded to the back half of the year.

未來幾季的餘額約為 3000 萬，祝您度過愉快的一天，其中大部分將在下半年完成。

Okay. And then that's what I was going to ask maybe just the last question, and it looks like down we've got our math right and some progress on inventories here on in terms of the working capital down, how we think about 1Q, you mentioned that you're in a leaner position now on the RV inventory side. But what should we be thinking about in terms of and potential working capital impacts, at least here to start the year.

好的。這就是我要問的，也許只是最後一個問題，看起來我們的數學是正確的，並且在營運資本下降方面，庫存方面取得了一些進展，我們如何看待第一季度，你提到您現在在房車庫存方面處於更精簡的位置。但就營運資本影響和潛在的營運資本影響而言，我們應該考慮什麼，至少在今年年初是如此。

And from an inventory perspective, which as you guys know, is the biggest driver of our working capital. I'd say we're in a pretty good spot. You know, the inventory has come down during the fourth quarter. So going forward, we don't see a huge build or a large build in inventory. But I would say your working capital is going to remain fairly flat. Your bigger driver, strong cash is going to be CapEx.

從庫存的角度來看，正如你們所知，這是我們營運資金的最大驅動力。我想說我們處於一個非常好的位置。你知道，第四季庫存已經下降。因此，展望未來，我們不會看到大量庫存的增加或大量增加。但我想說你的營運資金將保持相當穩定。強大的現金將成為資本支出的更大推動力。

Right, great. Thanks. I'll turn it over.

對了，太好了。謝謝。我會把它翻過來。

So your next question comes from the line of Ahmed Dayal with H.C. Wainwright. Your line is open.

所以你的下一個問題來自 Ahmed Dayal 和 H.C.溫賴特。您的線路已開通。

Thank you. Good morning, everyone.And then with respect to the Bank of America process, what are your options right now that you are considering sort of the best options that they might be exploring for you and have you only one of those options that they might be presenting?

謝謝。早安，大家。然後關於美國銀行的流程，您現在有什麼選擇，您正在考慮他們可能為您探索的最佳選擇，而您只有他們可能的選擇之一介紹？

The reason I'm asking this question is, you know, you potentially have in our expansion efforts were already in play as well, but at the same time, you're still not max utilizing the available capacity. I'm just trying to get a sense of, you know, how 2024 will play out with this Bank of America process in play and how that impacts Illinois all of the other activities and what the timeline might be to get some sort of a decision on the next steps on that front?

我問這個問題的原因是，您知道，您可能已經在我們的擴展努力中發揮作用，但與此同時，您仍然沒有最大程度地利用可用容量。我只是想了解 2024 年美國銀行的流程將如何發揮作用，這將如何影響伊利諾伊州的所有其他活動，以及做出某種決定的時間表可能是什麼在這方面接下來的步驟是什麼？

Yes, good question. Fair question, Amit, but let me. Let me start by saying that this BMA process started probably 10 months ago because we knew that the R&D investment was sizable for the Company and more on the development front. So starting a new business from Johnson and bringing it to life like the team has done is nothing short of undertaking. The you know, as that as I said in my comments, we've spent $260 million at the end of the fourth quarter in new cash. So we don't have that much in long-term debt. So that really speaks to the health of the crude side of the business. And what it's brought to the table in contribution from the they have a process is designed to bring the liquidity back to the balance sheet for the investments that we've made on the R&D side and that that process was was focused on. Obviously, we knew as we went to the market it would open up other conversations, and that's certainly what's taken place. And we are tendering those those conversations as we speak. So that process could not have been executed better, but they have. I think they've done an amazing job. We've got really good people, really strong companies at the table that's interested and the work that we're doing both around the renewables long term because I think everyone sees some you know, that target being a 2025 renewables business. We're kind of at the end of a policy cycle, both at ARFS. and federal level and also at a California LCFS level. And so we've got some insight for '25 around our A., which is, you know, some some new frontline opportunity as well as LCFS. We got some insight. We just haven't yet seen the new RVOs that we hope to see from the from the ZAR side of the business so with all that in mind, you know, the the the interest and our day is very focused in that direction.

是的，好問題。公平的問題，阿米特，但讓我來。首先我要說的是，這個 BMA 流程大約在 10 個月前就開始了，因為我們知道公司的研發投資規模相當大，而且更多的是在開發方面。因此，從 Johnson 開始一項新業務，並像團隊所做的那樣將其付諸實踐，這絕對是一項艱鉅的任務。正如我在評論中所說，截至第四季末，我們已經花費了 2.6 億美元的新現金。所以我們沒有那麼多長期債務。所以這確實說明了該業務的健康狀況。他們有一個流程，旨在將流動性帶回資產負債表，以用於我們在研發方面所做的投資，而流程的重點是。顯然，我們知道當我們進入市場時，它會引發其他對話，而這確實發生了。當我們說話時，我們正在進行這些對話。所以這個過程執行得再好不過了，但他們做到了。我認為他們做得非常出色。我們有非常優秀的人才、非常強大的公司，他們對再生能源感興趣，而且我們正在圍繞再生能源長期開展工作，因為我想每個人都看到一些你知道的目標，目標是2025 年可再生能源業務。ARFS 的政策週期已接近尾聲。和聯邦級別以及加州 LCFS 級別。因此，我們對 A. 周圍的 25 年有了一些見解，您知道，這是一些新的前線機會以及 LCFS。我們得到了一些見解。我們只是還沒有看到我們希望從 ZAR 業務方面看到的新 RVO，因此考慮到所有這些，您知道，我們的興趣和我們的一天都非常關注這個方向。

And also in SAP, SAP seems to be the you know, the next leg of this industry. And so so we've got a great platform to continue evolving the renewable business in that direction.

同樣在 SAP 中，SAP 似乎是這個產業的下一個​​支柱。因此，我們擁有一個很好的平台，可以繼續朝這個方向發展再生能源業務。

Second is the new just the broader interest in the asset. So we we've got some really interesting infrastructure capacity opportunities, yes, property scale. And so we've entertained, you know, some nonconforming conversations that take a little bit more time to check out. And so we've had management presentations. We've had site visits. We've had initial no indication of values, and we're moving towards some some firm offers to partner with the company so that's the best update I can provide and kind of where we're at. As you said, liquidity is important in the current R&D market. So we're very measured in managing our cash. We've got a very good cash focus system that we're exercising wisely. And so we're going to continue with, you know, with a diligent term preservation of cash focus on margin and reducing our costs. And like Doug said, we've got a lot of things out of our way today and we've got the people in place and they're doing a really good job of fine tuning know all fronts of the business.

其次是對新資產更廣泛的興趣。因此，我們有一些非常有趣的基礎設施容量機會，是的，就是房地產規模。因此，您知道，我們進行了一些不合格的對話，需要更多的時間來檢查。我們進行了管理層演講。我們進行了實地考察。我們最初沒有任何價值的跡象，我們正在向一些與該公司合作的堅定提議邁進，所以這是我能提供的最好的更新，也是我們目前所處的位置。正如您所說，流動性在當前的研發市場中很重要。因此，我們在管理現金方面非常謹慎。我們有一個非常好的現金聚焦系統，我們正在明智地運用它。因此，我們將繼續努力保留現金，並專注於利潤和降低成本。正如道格所說，我們今天已經解決了很多問題，我們的人員已經就位，他們在微調方面做得非常好，了解業務的各個方面。

And given that I leave it there, I'll take my other questions offline. Some of my other questions have already been discussed so thank you so much.

鑑於我把它留在那裡，我會將我的其他問題離線。我的其他一些問題已經討論過了，非常感謝。

Thank you.

謝謝。

Your next question comes from the line of Brian Butler with Stifel. Your line is open call.

你的下一個問題來自 Brian Butler 和 Stifel 的對話。您的線路是公開通話。

Good morning, guys. Thanks for taking my questions. Were just on the first one on the conventional based on the hedges that you have in place and your expectation on the downturn as well as just kind of the production for 1Q, how should we think about the EBITDA of the conventional business for 1Q, assuming prices stay where they are?

早上好傢伙。感謝您回答我的問題。我們只是基於您所採取的對沖和您對經濟低迷的預期以及第一季的生產而得出的傳統業務的第一個數據，我們應該如何考慮第一季傳統業務的 EBITDA，假設價格保持原樣嗎？

I mean, are we positive a little positive, a lot positive or negative? Yes. I mean, as we look at the forward curves right now, Brian, and then based on the cracks that Doug laid out. And yes, I would say we are positive at the moment.

我的意思是，我們是積極一點、積極一點還是消極一點？是的。我的意思是，布萊恩，當我們現在觀察未來曲線時，然後根據道格提出的裂縫。是的，我想說我們目前是積極的。

Okay. And then on the CI. scores, when you look at the new scores, can you give any color around maybe the magnitude of the benefit I mean how much of an improvement are we looking at relative where the baseline is?

好的。然後是 CI。分數，當您查看新分數時，您能否給出有關收益大小的任何顏色？我的意思是，我們相對於基線的位置有多少改進？

And with that improvement, does that make our die of Britain, you pass breakeven on an EBITDA basis or is it still need feedstock? Our other feedstock improvements?

有了這種改進，這是否會讓我們的英國模具消失，你在 EBITDA 的基礎上實現盈虧平衡，還是仍然需要原料？我們的其他原料改良？

That's a great question. It's about on the improvement varies by I see, but it's you know, it's a it's a 20%-plus improvement over the defaults, in some cases better than that. So it's helpful, but I would say that it's a while it's not yet. It's probably that probably gets you pretty close to a breakeven margin with those on. But I would say that in general, some as fast as rents have continued to decline, I mean we've lost another $0.40 are reminiscent of just this quarter, so almost almost $0.70 a gallon since January now.

這是一個很好的問題。我所看到的改進程度各不相同，但你知道，它比預設值提高了 20% 以上，在某些情況下甚至更好。所以它很有幫助，但我想說還需要一段時間。有了這些，這可能會讓你非常接近盈虧平衡。但我想說的是，總的來說，一些租金持續下降的速度很快，我的意思是我們又損失了0.40 美元，這讓人想起本季度，所以自1 月份以來幾乎每加侖幾乎0.70 美元。

Right. So and we lost that James over $1 a gallon in the fourth quarter on rent. So yes, the LTFS has been depressed, and that's certainly a factor. And these CI. values will help us recover a little bit more value out of that even at these levels, for sure. But some the impact of that is muted because LCFS.

正確的。因此，我們在第四季度因租金而損失了每加侖超過 1 美元的詹姆斯。所以，是的，LTFS 一直在低迷，這肯定是一個因素。還有這些 CI。當然，即使在這些層面上，價值觀也將幫助我們從中恢復更多的價值。但由於 LCFS，其影響已減弱。

So the treasury anyway, right? So you get a little bit our higher value or more credit generation, but the credits are still worth a lot less than they were a year ago, as an example, on top of real, the real killer for RD margins right now it's just the rent performance on on D4 ends, we were down almost 50% off where they were between January and February for ARM. And some of that move is very violently feel weak. So when we're trying to we're trying to forecast run rates and and plan our volumes against the available margin, it's an extremely volatile fixture. So when you add Brent moves of that magnitude within a week. So that's what we're faced with. So I think I think the industry, I think we and the industry, frankly need on PPI to recalibrate. So the current margin picture on B&O P&O pretty good amount from where they are. They've come down a good bit from last fall, obviously, but there's more to give their US party margins are going to be very tough.

無論如何，國庫，對吧？因此，你會得到一點我們更高的價值或更多的信用生成，但信用的價值仍然比一年前低很多，例如，除了真實的之外，現在研發利潤的真正殺手只是從D4 端的租金表現來看，ARM 的租金比1 月至2 月期間下降了近50%。而且有些動作很猛烈，讓人覺得很無力。因此，當我們嘗試預測運行率並根據可用利潤來計劃我們的產量時，這是一個極不穩定的固定裝置。因此，當你加上布蘭特原油在一週內出現如此幅度的波動時。這就是我們面臨的情況。所以我認為我認為這個行業，我認為我們和這個行業，坦率地需要對 PPI 進行重新校準。因此，B&O P&O 目前的利潤率與目前的水平相比相當不錯。顯然，他們的支持率比去年秋天已經下降了很多，但他們在美國政黨中的優勢將變得非常艱難。

I'm sorry, right.

對不起，對吧。

I mean, I guess unless we see the feedstock come come in, I mean, I don't think rents are going to improve until we get a new RVO. And that's probably a couple of years out. It's sort of if rents aren't going to improve and feedstock remains persistently higher than expected Is there other options for the book, the RG no infrastructure? Or is it really you just got to hope these things improve and then R&D starts to work?

我的意思是，我想除非我們看到原料進來，我的意思是，我認為在我們獲得新的 RVO 之前租金不會改善。這可能是幾年後的事了。如果租金不會改善且原料仍持續高於預期，那麼這本書還有其他選擇嗎，RG 沒有基礎設施？還是你真的只是希望這些事情能改善然後研發開始發揮作用？

So Brian, I think that's a good question. And the answer is yes. I mean, the assets that we have and they're their own life prior to the investment. The investments that we've made are robust improvements and and can be recaptured in a different way long term. And so, you know, we we always have options and we had a we constantly review those options as we look at these current market conditions.

布萊恩，我認為這是一個很好的問題。答案是肯定的。我的意思是，我們擁有的資產在投資之前就是他們自己的生活。我們所做的投資是強有力的改進，並且可以以不同的方式長期收回。所以，你知道，我們總是有選擇，而且我們在考慮當前的市場狀況時不斷審查這些選擇。

Okay. That's helpful. And then just one last quick one. On the first quarter '24 with all the balance sheet changes, what's the expected interest expense.

好的。這很有幫助。然後是最後一個快速的。24 年第一季資產負債表發生所有變化後，預期利息支出是多少。

Now interest expense should run for the term the term loan, which is the biggest portion right at it, $8 million to $9 million.

現在，利息支出應按定期貸款期限計算，這是其中最大的一部分，為 800 萬至 900 萬美元。

Okay, thank you very much.

好的，非常感謝。

Brian.

布萊恩.

Next month.

下個月。

There are no further questions at this time. I will now turn the call back over to the speakers for closing remarks.

目前沒有其他問題。我現在將把電話轉回給發言者進行閉幕致詞。

Operator, and thank you, everyone, for joining the call today. We appreciate your interest in the business and we look forward to keeping you informed as we complete this quarter and come back with the new information on the progress we're making here with the business.

接線生，謝謝大家今天加入通話。我們感謝您對這項業務的興趣，我們期待在本季度結束時向您通報情況，並帶來有關我們在業務方面取得的進展的新資訊。

Thanks. This concludes today's call. You may now disconnect my mic.

謝謝。今天的電話會議到此結束。您現在可以斷開我的麥克風。