Financial Data and Key Metrics Changes - The company reported revenue of $27.2 million for Q1 2025, a 25% increase compared to the prior year period, driven by a 13% growth in average selling price (ASP) and higher volumes [6][31] - Adjusted EBITDA for the quarter was approximately $4.1 million, a significant improvement from an adjusted EBITDA loss of $0.4 million in the prior year [32] - Net income was $200,000, compared to a net loss of $3.4 million in Q1 2024, indicating a turnaround in financial performance [32] Business Line Data and Key Metrics Changes - The PAC business has shown a sustained turnaround with four consecutive quarters of positive adjusted EBITDA, and the company aims for double-digit millions in annual EBITDA from this segment [5][10] - The GAC business is facing delays in commissioning, with minimal production expected in Q2 2025, but the company remains confident in its long-term potential [21][30] Market Data and Key Metrics Changes - Demand for GAC products remains robust, particularly in PFAS mitigation, air filtration, and renewable natural gas applications, with strong customer momentum noted [24][26] - The company anticipates a supply-demand imbalance to persist through at least 2027 or 2028, which is favorable for its market position [27] Company Strategy and Development Direction - The company is focused on cost optimization and strategic price management to enhance profitability while pursuing growth initiatives in GAC, asphalt, and rare earth minerals [5][29] - The introduction of new technologies and partnerships is being explored to capitalize on government initiatives related to domestic rare earth minerals and graphite [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced during the commissioning of the GAC production line but expressed confidence in overcoming these hurdles and achieving commercial production by late Q2 or early Q3 2025 [21][30] - The company remains optimistic about the long-term demand for GAC products and the overall economic fundamentals supporting its business [106] Other Important Information - The company has appointed a new Chief Financial Officer, Jay Von Cannon, who brings extensive experience in financial leadership and is expected to enhance the company's financial strategy [38][40] - The company ended Q1 2025 with cash of $14.8 million, with approximately $6.3 million being unrestricted [36] Q&A Session Summary Question: What are the root causes of the commissioning inconsistencies? - Management confirmed that the primary issues relate to optimizing the production process, particularly in Zone 3, where adjustments are being made to improve consistency and throughput [46][49] Question: How confident is the company in meeting the new timelines for GAC production? - Management expressed confidence based on the successful production of small-scale volumes and ongoing fine-tuning of the process to achieve uninterrupted commercial production [52][60] Question: Was there any impact from take-or-pay contracts in Q1? - Management confirmed that there were no take-or-pay impacts in the Q1 results [62] Question: What percentage of Phase One production is currently contracted? - Approximately 60% of Phase One production is contracted, with the company holding back some production for the higher-margin RNG market [101]

Financial Data and Key Metrics Changes - In 2024, the company reported a 10% year-over-year increase in revenue to approximately $109 million, driven by strong improvements in average selling price (ASP) [9][34] - The average selling price increased by approximately 14% in the fourth quarter [6][35] - Gross margin for the full year was reported at 36.2%, with a slight decrease in the fourth quarter to 36.3% compared to 49.8% in the prior year [34][36] - The company achieved positive adjusted EBITDA of approximately $3.3 million in Q4 2024, down from $7.2 million in Q4 2023 [36] Business Line Data and Key Metrics Changes - The foundational PAC business has transformed from a loss-making segment to one where every contract is profitable as of 2025 [8] - Selling, general, and administrative expenses (SG&A) decreased from approximately $34 million in 2023 to approximately $29 million in 2024, a reduction of about 15% year-over-year [12] - Research and development costs for Q4 decreased by 39% compared to the prior year period [37] Market Data and Key Metrics Changes - The company is experiencing strong demand in the granular activated carbon (GAC) market, with expectations for significant growth driven by regulatory changes related to PFAS [27][30] - The company is currently contracted for approximately 16 million pounds of GAC, with a strategic approach to delay full contracting to align with production ramp-up [24][66] Company Strategy and Development Direction - The company aims to maximize profitability and future opportunities by diversifying its PAC business and expanding into new markets such as water, cement, and industrial sectors [8][30] - The GAC segment is viewed as a future growth engine, with plans to ramp up production to a nameplate capacity of 25 million pounds by the second half of 2025 [22][30] - The company is focused on innovation, operational excellence, and customer engagement to drive long-term value [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing sustainable improvements in profitability for the foundational PAC business, despite recognizing that growth may moderate over time [11][10] - The company is optimistic about the future, with a strong balance sheet and improved investor confidence following successful debt refinancing [16][44] - Management acknowledged challenges in 2024, particularly related to CapEx for GAC expansion, but remains focused on driving the project to completion [17][20] Other Important Information - The company successfully raised approximately $42 million in new net equity investment during 2024, and its overall market capitalization more than doubled [14] - The company has a fully integrated domestic supply chain, which positions it favorably against competitors who rely on imported materials subject to tariffs [83] Q&A Session Summary Question: Can you review the ramp-up process for Red River and key milestones? - Management detailed the commissioning process broken down into six functional zones, emphasizing that they have successfully produced granular activated carbon and are fine-tuning the process for efficiency [49][53] Question: How are rising natural gas prices affecting pack sales? - Management noted that higher natural gas prices could lead to a shift from natural gas to coal-fired generation, impacting volumes, but they are expanding into higher-margin adjacent markets [55][56] Question: What are the CapEx expectations for 2025? - Management expects CapEx for 2025 to be between $8 million to $12 million, excluding potential Phase II costs, with plans to use cash flow from the PAC business to fund future expansions [58][59] Question: What is the pricing differential between granular and pack markets? - Management indicated that pricing for granular activated carbon is significantly higher than pack pricing, with a differential of 20% to 40% in adjacent markets [66][70] Question: Are there any tariff implications for the U.S. activated carbon market? - Management stated that tariffs could benefit the company due to its fully domestic supply chain, while competitors relying on imports may face increased costs [83] Question: What is the expected timeline for moving forward with Line Two? - Management anticipates gaining visibility on contracting and demand in the second half of the year, which will inform decisions regarding Line Two [95]