Financial Data and Key Metrics Changes - Ore Royalty earned 19,700 GEOs in Q2 2025, a modest increase from Q1, on track to meet the full year guidance of 80,000 to 88,000 GEOs [3] - Quarterly revenues reached $60.4 million, an increase compared to the same period last year, driven by higher commodity prices [6] - Net earnings improved to $0.17 per basic common share, a significant year-over-year improvement from a loss in the previous year [6] - Cash flow per share increased to $0.27 from $0.21 in Q2 of last year, and adjusted earnings rose to $0.18 from $0.13 [6] - The company ended Q2 with $49.6 million in cash and achieved a net cash position for the first time in several years [4] Business Line Data and Key Metrics Changes - Over 93% of GEOs earned came from precious metals, with a modest increase in copper contribution primarily from the CSA mine [6][7] - Canadian Malartic had a strong quarter, with expectations for continued performance in the second half of the year [8] - Mantos Blancos production was flat year-over-year, with expectations for silver grades to improve in the second half [8][9] Market Data and Key Metrics Changes - The gold-silver ratio tightened to approximately 89:1 from highs of 105:1 earlier in the year, indicating potential leverage for investors in silver [11] - Ore Royalty's revenues were predominantly generated from Tier one mining jurisdictions, including Canada, the U.S., and Australia [12] Company Strategy and Development Direction - The company is focused on disciplined capital allocation to pursue high-quality accretive streams and royalties [30] - Ore Royalty aims to enhance its portfolio with producing assets while remaining selective about development stage royalties [37] - The company is optimistic about the potential of the second shaft at Odyssey, which could significantly increase gold production [25] Management's Comments on Operating Environment and Future Outlook - Management expects a stronger second half of 2025, with Canadian Malartic and Nandimi contributing to increased GEO sales [33][34] - The corporate development team is stretched to capacity, focusing on high-quality assets that will contribute to GEOs within the next five years [38] - The company is optimistic about the Cariboo project and its potential contributions to future revenue [51] Other Important Information - Ore Royalty declared and paid a quarterly dividend of $0.55 per share, marking its 43rd consecutive dividend [5] - The company has a total debt of just under $36 million and a net cash position of $14 million, with potential liquidity exceeding $900 million [16][30] Q&A Session Summary Question: Can you provide more color on the second half of this year and where the incremental GEO sales are coming from? - Management expects most of the increase to come from Canadian Malartic and Mantos Blancos, with additional contributions from Nandimi [33][34] Question: Is there a preference for producing versus development stage royalties? - The first preference is for accretive deals on producing assets, but the company is also looking at high-quality development assets that will contribute within five years [36][38] Question: What criteria are considered for the new five-year guidance? - Key criteria include confidence in asset contributions to GEOs, financing visibility, and social license [42][45] Question: How does the company view larger transactions in the $1 billion range? - The company is open to significant transactions if they meet economic returns for shareholders, with $900 million in available liquidity [47] Question: What is the current status of Elliott's holdings? - The last public disclosure indicates Elliott owns 2.2 million shares, with no further updates available [63][65]

Financial Data and Key Metrics Changes - The company generated adjusted operating earnings per share of $2.46 in the second quarter, a 13% increase over the prior year [11] - Net income was impacted by investment losses and severance expenses, with $18 million incurred in severance expenses during the quarter [12] - The company added approximately $200 million of excess capital in the quarter, generating approximately $400 million year to date [12][21] Business Line Data and Key Metrics Changes - In the Retirement segment, adjusted operating earnings were $235 million for the quarter, representing a 1019% increase over the prior year [13][14] - Investment Management generated approximately $51 million in adjusted operating earnings for the quarter, a 2% increase year over year [15] - Employee Benefits adjusted operating earnings were $69 million in the quarter, up 15% over the prior year [18] Market Data and Key Metrics Changes - The Retirement and Investment Management businesses surpassed $1 trillion in total assets, with nearly 10 million participant accounts in retirement [6] - The company achieved approximately $12 billion in total defined contribution net flows in the second quarter, bringing year-to-date net flows to over $40 billion [14] - Investment Management generated approximately $2 billion in net flows in the second quarter, contributing to year-to-date net flows of nearly $10 billion [16] Company Strategy and Development Direction - The company is focused on driving strong organic growth in retirement and investment management, successfully integrating OneAmerica, and improving margins in employee benefits [23] - A partnership with Blue Owl Capital aims to expand private market access and enhance retirement offerings [8][42] - The company plans to resume share repurchases targeting $200 million in 2025, while also investing in wealth management and automation [21][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities ahead, despite challenges in the healthcare industry impacting the Stop Loss business [11][30] - The company is prioritizing margin improvement over growth in the Stop Loss segment, with a cautious approach to pricing and risk selection [30][60] - Management highlighted a healthy pipeline and strong retention rates in the retirement business, indicating a solid outlook for the remainder of the year [90] Other Important Information - The company returned over $40 million of capital to shareholders via common stock dividends [21] - The integration of OneAmerica is on track, with a target of $75 million in operating earnings for the year [9] - The company is embedding industry data and medical trends into pricing for employee benefits to enhance competitive positioning [19] Q&A Session Summary Question: Insights on Stop Loss business and future expectations - Management noted a reduction in the reserve levels for the January 2024 business based on claims experience, with a cautious approach for the January 2025 cohort due to early development [27][28] Question: Capital return and impact of OneAmerica - Management reaffirmed plans for $200 million in share repurchases in the second half of the year, while addressing the capital needs related to OneAmerica [33][34] Question: Blue Owl partnership and product development - The partnership is expected to expand access to private investments and enhance product offerings, particularly within target date funds [42][44] Question: Voluntary benefits business and loss ratio expectations - The loss ratio improved to 47% in the quarter, with expectations around 50% for the back half of the year [63] Question: Medical stop loss and pricing strategy - Management emphasized a disciplined approach to pricing and risk selection, with expectations of higher medical inflation in 2026 [56][60]

Financial Data and Key Metrics Changes - The company reported a year-over-year multifamily NOI growth of 4.5%, primarily driven by higher rental revenue and strong growth in fee income from operational initiatives [13][15] - The estimated initial special distribution to shareholders from the Cortland transaction is projected to be between $14.5 and $14.82 per share, with additional distributions expected to be between $2.9 and $3.5 per share from the sale of remaining assets [10][11] Business Line Data and Key Metrics Changes - The company has entered into a definitive agreement to sell a portfolio of 19 assets to Cortland for $1,600,000,000 in cash, with plans to sell remaining multifamily assets and Watergate 600 [5][6] - The marketing process for the remaining assets is expected to begin in the third quarter, with a goal to complete sales over the next twelve months [9][48] Market Data and Key Metrics Changes - The Washington Metro Area continues to experience monthly effective rent growth that outpaces the national average, ranking sixth in the nation for transaction volume during the second quarter [15][61] - Defense spending in the region is projected to exceed prior estimates, which may offset broader federal workforce reductions [15][61] Company Strategy and Development Direction - The company has undergone a strategic transformation over the past decade, focusing on multifamily operations and reducing its cost of capital to maximize shareholder value [6][7] - The Board of Trustees has unanimously determined that the sale of assets to Cortland and the plan for liquidation are in the best interest of shareholders [8][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the portfolio and the ability to achieve favorable outcomes as remaining assets are sold [15][61] - The company anticipates a seamless transition of ownership to Cortland, ensuring continuity of operations for residents and team members [8][9] Other Important Information - The company plans to file a preliminary proxy to describe the proposed Cortland sale transaction and the plan of sale and liquidation [8][12] - The tax treatment of distributions following asset sales may vary based on individual shareholder situations, with distributions generally treated as a return of capital [11][12] Q&A Session Summary Question: Can you provide more details on the expected distributions from the sale of the remaining portfolio? - The company will provide more detailed estimates and assumptions in the upcoming proxy statement [20] Question: What is the status of specific assets like Watergate and Riverside in the sale process? - The company has not formally initiated a sales process for Watergate and is focused on operations and leasing, while Riverside is expected to attract interest due to its development potential [21][23] Question: How does policy risk in Maryland affect asset sales? - Rent control in Montgomery County has been factored into investor underwriting, but transaction volume remains strong [25][26] Question: What was the liquidity situation during the sales process? - The Board conducted a thorough evaluation of strategic alternatives, and the process did not yield a viable offer that exceeded the proposed asset sale to Cortland [30][33] Question: Will distributions be made incrementally as assets are sold? - Future liquidating distributions will be at the Board's discretion following asset sales, with the quarterly distribution suspended after the upcoming payment [41] Question: Are the estimated distributions net of all expected costs? - Yes, the estimates provided include anticipated expenses and payments of liabilities [44][45] Question: What is the expected timeline for selling the remaining multifamily assets? - The company aims to complete all asset sales within the next twelve months, taking into account various regulatory processes [48][50]

Financial Data and Key Metrics Changes - The company experienced a significant decline in attendance during the first half of the year, primarily due to lower renewal rates and season pass sales, as well as macroeconomic factors and extreme weather conditions [11][22][24] - Adjusted EBITDA for the quarter fell well below expectations, leading to a revised full-year guidance of $860 million to $910 million, down from a previous range of $1.08 billion to $1.12 billion [33][36] - The company ended the quarter with approximately $107 million in cash and cash equivalents, with total liquidity of $540 million [19] Business Line Data and Key Metrics Changes - At Legacy Cedar Fair parks, admissions per capita spending increased by 4%, while per capita spending on in-park products rose by 3% [24][26] - The company introduced a reimagined 2026 season pass program aimed at enhancing customer appeal and increasing renewal rates [14] Market Data and Key Metrics Changes - Attendance was down 12% during a six-week period affected by severe weather, while attendance was flat during the first seven weeks when weather was not an issue [22] - In July, attendance improved, with a 1% increase for the full month and a 4% increase over the last four weeks compared to the previous year [28][29] Company Strategy and Development Direction - The company is focused on optimizing its assets and integrating operations following the merger with Cedar Fair, with a commitment to reducing net leverage and increasing adjusted EBITDA [9][15] - Strategic actions include evaluating non-core asset divestitures to accelerate deleveraging and enhance focus on core operations [21][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of macroeconomic pressures and extreme weather on early season performance but expressed confidence in a strong second half due to improved weather and demand trends [10][36] - The company is committed to executing its strategic plan and believes that the challenges faced are transient and not indicative of a fundamental change in consumer behavior [48] Other Important Information - The company has made significant progress in restructuring its organization to reduce full-time labor costs by over $20 million annually [15] - A new ticketing platform and mobile app are scheduled to launch in November, aimed at enhancing customer experience [37] Q&A Session Summary Question: Clarification on macro pressures - Management clarified that macro pressures include significant weather impacts and some pressure on lower-income consumers, but overall spending behavior at parks remains strong [43][45] Question: Understanding the impact of weather on financial targets - Management stated that the challenges faced in the first half are largely transient and do not reflect a fundamental change in consumer potential, with a focus on finishing 2025 strong [48][49] Question: Details on divestitures and timing - Management is actively pursuing two non-core asset sales and evaluating other potential divestitures to optimize the portfolio and reduce risk [56] Question: Cost savings and synergies - Management confirmed that the goal remains to achieve $120 million in cost synergies for 2025, with a focus on permanent cost savings and additional efficiencies [61] Question: Guidance on attendance and pricing - Management indicated that attendance is expected to be flat for the second half, with potential for price increases where demand is strong, particularly during peak events [90][92]

Financial Data and Key Metrics Changes - Orion reported Q1 2026 revenue of $19.6 million, a slight decrease from $19.9 million in Q1 2025, with two of the three segments showing year-over-year growth [19] - The gross profit percentage rose to over 30% for the first time in six years, with a net loss reduced to $1.2 million from $3.6 million in Q1 2025 [11][17] - Adjusted EBITDA improved to positive $200,000 in Q1 2026 compared to a negative $1.8 million in Q1 2025 [22] Business Line Data and Key Metrics Changes - LED lighting segment revenue increased by 1% to $12.9 million, while the electrical maintenance segment revenue rose by 21% to $4 million [19][20] - EV charging solutions revenue decreased to $2.7 million from $3.8 million, primarily due to the timing of larger projects [20] - The gross margin for the LED lighting segment improved to 31.8% from 22.6%, and the maintenance segment gross margin increased to 22.4% from 3.8% [20] Market Data and Key Metrics Changes - The company is experiencing tailwinds in all three business lines nationally and regionally, with a focus on converting quality leadership into market leadership [8] - The electrical infrastructure market is seeing significant investments, providing a unique opportunity for Orion to leverage its expertise [15] Company Strategy and Development Direction - The company aims to achieve $84 million in revenue for FY 2026, with a growth expectation of 5% [24] - Orion is focusing on enhancing margins, reducing costs, and expanding its footprint in existing maintenance service customers [12][13] - The decision was made to retain the existing operational structure rather than reorganizing into two business units, allowing for better integration of EV solutions [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving year-over-year growth in revenue, profitability, and shareholder value [6] - The company anticipates modest growth in LED lighting and electrical maintenance revenues, with flat to slightly lower EV charging revenues due to funding uncertainties [25] - Management believes that the company is well-positioned to manage tariff impacts due to its domestic manufacturing capabilities [25] Other Important Information - Orion has made significant reductions in overhead and has built a diversified pipeline of revenue to support growth [17] - The company has reduced total operating expenses by 10.6% to $6.9 million in Q1 2026 from $7.7 million in Q1 2025 [12][22] Q&A Session Summary Question: Interest in electrical infrastructure and potential investment needed - Management indicated that they are in the early stages of electrical infrastructure development and believe their current infrastructure can manage growth without significant initial investment [32] Question: Expectations for pipeline impact in fiscal 2027 and beyond - Management confirmed that the current pipeline will contribute to revenue growth in fiscal 2027 and beyond [35] Question: Details on the electrical infrastructure project - Management stated that the initial project involves expanding electrical infrastructure work based on customer requests, with more details to be shared in future releases [39][40] Question: Clarification on the Boston Public Schools contract - Management clarified that the recent $6.5 million contract is an expansion of previous work done for the Boston Public Schools, indicating a significant increase in project scope [43][46] Question: Status of fluorescent bulb ban and its impact - Management acknowledged the potential impact of the fluorescent bulb ban on business but indicated that it is too early to assess enforcement [50][52]

Financial Data and Key Metrics Changes - Adjusted EBITDA reached $165 million, a 2% year-over-year increase, while adjusted earnings per share rose 4% year-over-year to $1.92 [4][24] - Global rooms increased by 2% year-over-year, with a 3% net increase in more revenue-intensive rooms [4][24] - Domestic RevPAR declined approximately 1.6% year-over-year, while overall RevPAR decreased by 2.9% due to reduced government and international travel [27][32] Business Line Data and Key Metrics Changes - The domestic extended stay room system size grew by 10% year-over-year, with a 7% increase in domestic openings [24][25] - The Comfort brand saw a 50% increase in global openings and a 23% year-over-year rise in domestic franchise agreements awarded [25] - The upscale segment expanded by 15% year-over-year, with nearly 29,000 upscale global rooms in the pipeline, a 7% increase over the prior quarter [13][25] Market Data and Key Metrics Changes - International business achieved a 10% growth in adjusted EBITDA, with a 5% year-over-year expansion in the rooms portfolio [4][6] - The Canadian lodging market is projected to grow at an average annual rate of over 5% over the next five years, reaching over $50 billion in total revenues by 2030 [6] - The EMEA region saw a 7% increase in room count year-over-year, with approximately 4,000 rooms onboarded under direct franchise agreements [7] Company Strategy and Development Direction - The company is transitioning to a fully direct franchising model in Canada, expanding its product offering from eight hotel brands to a full portfolio of 22 [6] - Strategic acquisitions and partnerships are being pursued to enhance international market share, including a recent acquisition of the remaining 50% interest in Choice Hotels Canada [5][30] - The focus on revenue-intensive segments is expected to drive long-term growth, with 98% of the rooms in the pipeline belonging to these segments [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic consumer's resilience, citing increased disposable income and a favorable travel environment [17][56] - The company anticipates continued growth in the extended stay segment, which has shown resilience during uncertain economic times [10][18] - Adjusted domestic RevPAR expectations have been revised to a range of -3% to flat for the remainder of the year, reflecting a more cautious outlook [32] Other Important Information - The rewards program expanded to nearly 72 million members, an 8% year-over-year increase, and was recognized as the top hotel rewards program by U.S. News and World Report [19][20] - The company returned $137 million to shareholders year-to-date, including $27 million in cash dividends and $110 million in share repurchases [30] Q&A Session Summary Question: How does the company decide on direct versus master franchise in different markets? - The decision is based on market fundamentals, including the ability of small business owners to aggregate capital and the regulatory environment [35][36] Question: What is the growth outlook for Canada? - The company expects healthy growth in Canada, with a strong existing base of franchisees and a focus on both new construction and conversions [41][44] Question: What are the long-term expectations for international EBITDA? - International EBITDA is currently about 6% of total EBITDA, with significant growth opportunities anticipated in the coming years [47][50] Question: What are the current trends affecting RevPAR guidance? - The company noted softness in international inbound and government travel as key headwinds impacting RevPAR expectations [55][56] Question: Can you clarify the operating profit guarantee and its impact on EBITDA? - The operating profit guarantee is evaluated annually, with a total potential payment of $20 million over the life of the agreement [70][71] Question: How is the company managing occupancy and rate in the current environment? - The company is focused on maintaining occupancy while managing costs, particularly in the extended stay segment, which has lower costs per occupied room [76][78]

Financial Data and Key Metrics Changes - Sales in Q2 2025 were down 1.2% on an organic basis compared to the prior year, aligning with expectations [6][11] - Adjusted earnings per share increased by 8.3% to $2.48 [11] - Adjusted EBITDA margin was 22%, down 20 basis points year-over-year [11] - Free cash flow generated in Q2 was $493 million, with $368.5 million related to an accounts receivable securitization program [11][25] Business Line Data and Key Metrics Changes - **Automation and Motion Control (AMC)**: Sales decreased by 3.4% year-over-year, primarily due to weakness in the medical end market and project timing [16][18] - **Industrial Powertrain Solutions (IPS)**: Sales were down 4.4% year-over-year, attributed to project timing impacts in Metals and Mining [20][21] - **Power Efficiency Solutions (PES)**: Sales increased by 6.5% year-over-year, driven by strong growth in residential and commercial HVAC [23] Market Data and Key Metrics Changes - Orders in AMC declined by 7.5% year-over-year, impacted by a large data center order that slipped into July [19] - IPS orders increased by 3% on a daily basis, with a book-to-bill ratio of 1.01 [22] - PES orders were down 5.4% on a daily basis, consistent with expectations due to anticipated headwinds in residential HVAC [24] Company Strategy and Development Direction - The company is on track to deliver at least $250 million in cross-sell synergies from recent acquisitions, with a growing funnel of opportunities [12][14] - Focus on longer cycle projects and engineered solutions is expected to drive growth in IPS and AMC segments [20][22] - The company aims to neutralize tariff impacts on adjusted EBITDA and maintain margin neutrality by mid-2026 [27][30] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about low single-digit sales growth in 2025, supported by a growing backlog and positive order trends [8][33] - The company anticipates a recovery in the medical market and improved conditions in the data center sector [36][71] - Management acknowledges ongoing macroeconomic uncertainties but believes underlying business momentum is positive [33][36] Other Important Information - The accounts receivable securitization program completed in Q2 is expected to provide $4 million in annualized interest savings [25][26] - The gross annual unmitigated cost impact from tariffs is estimated to have decreased from $130 million to approximately $125 million [29][30] Q&A Session Summary Question: Expectations for end market recovery in the second half of the year - Management expects orders to be up mid-single digits in the second half, driven by strong performance in data centers and other solid markets [36][37] Question: Exposure to rare earth magnets and data center wins - Rare earth magnets represent about 1% of sales, but challenges in procurement impacted Q2 performance; however, recovery is expected in Q3 and Q4 [39][40] Question: AMC division margin ramp and backlog visibility - AMC's margin guidance has been widened due to rare earth exposure, with expectations for improved conditions in the medical market and higher shippable backlog [92][93] Question: Competitive position in the data center market - The company is well-positioned in the data center market, focusing on customized solutions, and has a strong order funnel [85][86]

Financial Data and Key Metrics Changes - Total sales for Q2 2025 decreased by 19.1% year-over-year to $132.3 million, primarily due to soft customer demand and channel inventory destocking [20] - Adjusted EBITDA for Q2 was $13.7 million, down from $19.6 million in the prior year, with an adjusted EBITDA margin of 10.3%, a decrease of 170 basis points [22] - Free cash flow during Q2 was $12.5 million, compared to $19.2 million in the prior year, reflecting less cash generated from operating activities [23] Business Line Data and Key Metrics Changes - Manufacturing margin decreased to $13.6 million in Q2 from $22.3 million in the same prior year period, with a manufacturing margin rate of 10.3% compared to 13.6% [20][21] - The company secured its first cross-selling win after the acquisition of AccuFab, which is expected to generate revenues in the third quarter [10] Market Data and Key Metrics Changes - The commercial vehicle market is projected to see a 24% decline in production in 2025, with an expected production of approximately 252,000 units [9] - Customer orders in key end markets have remained soft, particularly in commercial vehicles, power sports, and agriculture [7] Company Strategy and Development Direction - The company completed the acquisition of AccuFab, which is expected to increase its serviceable addressable market by approximately 60% to $8 billion [6] - The focus remains on increasing share of wallet with existing customers and expanding into high-growth adjacent markets [5] - The company aims to achieve a billion dollars in revenue and adjusted EBITDA margins exceeding 15% in the long term [15] Management's Comments on Operating Environment and Future Outlook - Management has withdrawn the 2026 financial targets due to the current macro environment but believes the financial profile implied by those targets is achievable once demand normalizes [15] - The company does not expect a recovery in market demand in the second half of 2025, particularly in the commercial vehicle market [9][72] Other Important Information - The company has initiated cost reduction initiatives and is consolidating facilities to optimize its manufacturing footprint [10][28] - The updated 2025 financial guidance reflects expected net sales between $528 million and $562 million, with adjusted EBITDA between $49 million and $55 million [24] Q&A Session Summary Question: Insights on AccuFab integration and synergies - Management expressed excitement about the integration of AccuFab and the potential for significant commercial synergies, projecting AccuFab revenues to reach approximately $100 million by 2028 [34] Question: Clarification on market outlook and customer feedback - Management noted that the primary change in outlook is in the commercial vehicle market, with significant reductions in production capacity observed among key customers [38][40] Question: Discussion on military and other segments - Management indicated that the military segment remains stable, with ongoing programs expected to progress due to global conflicts and restocking of US inventories [92] Question: Future contracts and reshoring opportunities - Management highlighted an increase in requests for quotations driven by tariffs, indicating a potential for reshoring aluminum fabrications to the US [84] Question: Sustainability of military backlog and revenue sources - Most military programs are recurring, with a small portion from aftermarket services, ensuring a stable revenue stream [90]

Financial Data and Key Metrics Changes - Consolidated revenues for Q2 2025 declined to $5.6 million from $7.0 million in the prior year due to lower APC segment revenue [22] - APC segment revenue decreased to $2.5 million from $3.9 million, primarily due to the timing of project execution [22] - Consolidated gross margin increased to 46% from 42% in the prior year, driven by segment contribution mix [22] - FUEL CHEM gross margin rose to 47% compared to 46% in the previous year despite flat segment revenues [22] - The net loss for the quarter was $689,000 or $0.02 per share, compared to a net loss of $421,000 or $0.01 per share in the prior year [26] Business Line Data and Key Metrics Changes - FUEL CHEM segment revenue remained flat at $3.1 million for the quarter, with expectations to meet an annual objective of $15 million to $16 million [22][8] - APC segment margin rose to 44% in Q2 compared to 39% in the prior year, attributed to project and product mix [23] - The backlog for the APC segment increased to $7.8 million as of June 30, 2025, up from $6.2 million at the end of 2024 [23] Market Data and Key Metrics Changes - The company anticipates receiving an incremental $2.5 million to $3 million in new APC awards before the end of August 2025 [6][10] - The company is pursuing additional awards driven by industrial expansion globally and state-specific regulatory requirements in the U.S. [11] - The backlog includes $2.8 million of domestically delivered project backlog and $5 million of foreign delivered project backlog [23] Company Strategy and Development Direction - The company is optimistic about the application of its APC emissions control solutions in the construction of AI-related data centers in the U.S. [16] - The company aims to build a material contract backlog as it moves towards 2025 and into 2026 [21] - The company is focusing on expanding its DGI technology into various end markets, including wastewater treatment and aquaculture [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain a strong financial position and fund growth initiatives [26] - The company is cautious in its revenue guidance for 2025, reducing it to a range of $28 million to $29 million due to uncertainties in APC award timing [20] - Management noted that regulatory changes are not expected to provide significant headwinds or tailwinds for the business [40] Other Important Information - The company has no long-term debt and maintains a strong cash position of approximately $30.9 million [26][27] - Research and development expenses increased to $490,000, reflecting ongoing investment in DGI systems [24] Q&A Session Summary Question: Clarification on FUEL CHEM revenue expectations - Management confirmed that the expected FUEL CHEM revenue of $15 million to $16 million does not include contributions from new accounts [32] Question: Backlog recognition timing - Management indicated that the backlog of $7.8 million is expected to be recognized over the next twelve months, but it is project-specific [34] Question: DGI demonstration costs - The DGI demonstration is considered R&D expense, with no reimbursement expected from the customer [35] Question: Regulatory impacts on NOx control - Management stated that current opportunities for APC are driven by business expansion rather than regulatory changes [39] Question: Data center opportunities - Management highlighted a pipeline of approximately $100 million in bids related to AI data centers, indicating significant potential [46] Question: Global data center opportunities - Management expects to see data center build-out opportunities outside the U.S., although they are less developed [53] Question: Engagement with Mexican partners - Management confirmed ongoing engagement with partners in Mexico, noting increased pressure for emissions compliance [74]

Financial Data and Key Metrics Changes - Second quarter adjusted EBITDA was $138 million, and adjusted net income was $1.54 per share, reflecting strong operations and improving market conditions [4][20] - Total liquidity increased by 23% during the second quarter to $647 million, supported by strong operating cash flows [20] - Year-to-date share count reduced by nearly 8% due to stock repurchases totaling $28 million [8][19] Business Line Data and Key Metrics Changes - Refining segment reported adjusted EBITDA of $108 million in the second quarter, compared to a loss of $14 million in the first quarter [13] - Retail segment adjusted EBITDA increased to $23 million from $19 million in the first quarter, driven by higher fuel margins and same-store sales growth [17] - Logistics segment adjusted EBITDA remained consistent at $30 million, aligning with mid-cycle run rate guidance [16] Market Data and Key Metrics Changes - Hawaii throughput reached a record 88,000 barrels per day, with production costs at $4.18 per barrel [10] - Montana throughput was 44,000 barrels per day, reflecting lower throughput due to a successful turnaround [11] - Washington index averaged $15.37 per barrel, an improvement of approximately $11 from the prior quarter [15] Company Strategy and Development Direction - The company is focusing on low capital, high return projects to improve profitability following the Montana turnaround [6] - A joint venture with Mitsubishi and INEOS was announced, with a $100 million investment to strengthen renewable fuels capabilities [7] - The company aims to achieve annual cost reductions of $30 million to $40 million relative to the previous year [17] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook despite policy uncertainty, citing flexibility and structural cost advantages [8] - The Asian market outlook remains favorable, with expectations of strong cash generation driven by market conditions and reduced capital spending [9] - Management anticipates financial contributions from the joint venture starting in 2026, following the commissioning of the pretreatment unit [29] Other Important Information - Cash from operations during the second quarter totaled $83 million, excluding working capital inflows [18] - The company repurchased $28 million worth of shares during the second quarter, with a total of 5.2 million shares repurchased year-to-date [19] Q&A Session Summary Question: Drivers behind strong capture rates in Hawaii - Management noted that elevated clean product freight rates and improved throughput rates contributed to capture rates exceeding guidance [22][23] Question: Update on SAF joint venture and startup timing - The joint venture discussions have been ongoing, with startup targeted for the second half of the year and expected EBITDA contributions beginning in 2026 [26][29] Question: Performance in The Rockies and excess inventory sales - Management indicated that excess inventory sales contributed to capture rates, with guidance for Q3 remaining at 90% to 100% [32][33] Question: Small refinery exemptions and cash flow implications - Management expects the EPA to follow the law regarding small refinery exemptions, with potential cash flow upside from retroactive receipts [43][46] Question: Sustainability of Singapore market margins - Management highlighted that the Chinese refining fleet's focus on internal demand and integration with petrochemical complexes is key to market dynamics [47][49] Question: Use of excess cash and M&A appetite - The company remains in an excess capital position, with a focus on opportunistic buybacks and internal growth opportunities rather than large-scale M&A [57][59]