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]