Good morning, and welcome to the Green Plains Inc. and Green Plains Partners Second Quarter 2023 Earnings Conference Call. Following the company's prepared remarks, instructions will be provided for Q&A. At this time, all participants are in listen-only mode.

I will now turn the call over to your host, Phil Boggs, Executive Vice President, Investor Relations. Mr. Boggs, please go ahead..

Thank you, and good morning, everyone. Welcome to Green Plains Inc. and Green Plains Partners second quarter 2023 earnings call. Participants on today's call are Todd Becker, President and Chief Executive Officer; Jim Stark, Chief Financial Officer; and Leslie van der Meulen, EVP, Product Marketing and Innovation.

There is a slide presentation available, and you can find it on the Investor page under the Events and Presentations link on both corporate websites. During this call, we will be making forward-looking statements, which are predictions, projections or other statements about future events.

These statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Actual results could materially differ because of factors discussed in today's press releases and the comments made during this conference call and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

Now I'd like to turn the call over to Todd Becker..

Thanks Phil, and good morning, everyone and thanks for joining our call today. So during the quarter, we were challenged by several events that held us back a quarter from showing you the results of the transformation as we experienced several significant events that negatively impacted what would have been a good quarter.

The first was our Wood River incident, which took one of our largest locations down for most of the quarter. This impacted the company was over $18 million in total and we expect some recovery from insurance in the last half of the year so some of this will be coming back.

In addition, during Q2 our platform was in need of significant upgrades to prepare for 2024 and beyond. And while we had some planned downtime, we also experienced a high level of unplanned downtime in Gen 1, which also had an impact on Gen 2 production volumes and sales and hedges that we had in place already to lock the quarter in.

The challenges that our other plants came later in the quarter and really was a June event in the highest margin environment, which we were unable to take advantage of. With that said, we had put Q2 hedges onto locking over $0.20 a gallon in results and unfortunate timing of these events took most of that away.

On the last call, we indicated $0.12 to $0.17 a gallon opportunity on paper and we were tracking accordingly and better through the end of May, but did not get Wood River released back to us and up and running until weeks later than expected.

In addition to unplanned outages, with this downtime behind us, we are now operating at near full rate for both ethanol and ultra-high protein operations.

And even more important, Wood River is making new production records as a team has done a great job getting the plant back to service, but more importantly the state of the team there is good after the tragedy they experienced.

Because of these events, our operations team diligently completed extended spring shutdowns and many of our locations resulting in an 81.5% utilization rate for the quarter. Our operations leadership team implemented process control improvements to improve reliability and increase ultra-high production – ultra-high protein production.

All-in, this downtime positions our assets to operate reliably during the third and fourth quarter with solid margins on paper today and at least half of our locations now capable of foregoing their typical fall shutdowns enabling additional production during these higher margin periods we are seeing in corn oil, protein, and solid ethanol fundamentals.

Now onto the quarter, which Jim will cover more in depth later, our consolidated crush margin was $0.01 per gallon, but again, we are prepared for a solid last half between Wood River, negative absorption, repairs and lost opportunity for both protein and ethanol. There was a $0.15 to $0.20 impact on the overall consolidated crush minimum.

Our financial position remains very strong with significant liquidity and with the last half opportunity in margins, we don't see a significant change to this strength as we return to free cash flow generation during the last half, which will help pay for the large part of the capital needed for our build out for the rest of the year.

In addition, we entered into a sale contract to divest our 55 million gallon Atkinson, Nebraska facility as it does not meet our parameters to justify making investments for our technology improvements.

For where we are going with Green Plains, this asset did not fit our long-term vision and once it closes we believe this transaction will be accretive.

We expect to close in the next few weeks and bring the capital back on balance sheet and further increasing our financial strength as we optimize our asset base, we expect to replace these volumes with other expansion at one of our larger locations where our technologies are running, which is very accretive or look for an acquisition opportunity where we can immediately add technologies, therefore not expanding fuel supplies in the market.

I will take you through a detailed recap of our transformation progress later in the call and walk you through how we are thinking about the last half of the year. But for now I want to reiterate that the fundamentals across each area of our strategy are strong and improving.

Core ethanol demand remains to look – continues to look solid and is tracking higher than prior year with 94 million acres of corn versus 84 million acres of soybeans, the price spreads remain in favor for both protein and corn oil and timely rains this summer have improved the USDF estimates for crop conditions in the west.

Finally, giving an opportunity again to source our inputs a little bit easier than in the past several years. In fact, we have seen continued pressure on the Western corn basis just recently, especially new crop in 2024. Our ultra-high protein production is once again achieving rates of 800 to 1,000 tons per day.

After the extensive downtime taken in the second quarter, we are seeing production rates as designed and have hit over 1,000 tons per day on multiple days. We are planning to dedicate one of our sites to 60% protein production later this quarter and begin to build supply chain for delivering 60 Pro to the market during the fourth quarter.

I'll get more into this exciting development later as well.

One really interesting data point is our investments were made on a 3 to 3.5 pounds per bushel yield of protein and we have now achieved as high as five pounds with the MSC technology from Fluid Quip and in fact, since Wood River has returned to full rate, they have averaged well over four pounds, which over time increases our capability to produce higher volumes and have better capital efficiencies.

No other technology in the world can achieve these rates. The future of our platform is within site and with our clean sugar facility on track to start up in early 2024, we are fast approaching being able to demonstrate the true potential of our full vision at one of our refineries.

And now I'll hand the call over to Jim to provide an update on the overall financial results..

Thank you, Todd and good morning everyone. Green Plains consolidated revenues for the second quarter were $857.6 million, $154.8 million or approximately 15% lower than the same period a year ago.

The lower revenues correlate to the lower production gallons of approximately 16% year-over-year for the second quarter, our plant utilization rate was 81.5% during the quarter comparing to the 96.9% run rate reported in the same period last year.

As Todd mentioned earlier in the call, we anticipate our plants to perform much better in the second half of 2023. Targeting utilization rates in the low to mid 90 percentage range of our stated capacity with all plants now operating.

For the quarter, we reported net loss attributable to Green Plains of $52.6 million or an $0.89 loss per diluted share that compares to net income of $46.4 million or $0.73 per diluted share for the same period in 2022. Adjusted EBITDA for the quarter was a negative $14.9 million compared to the $56.7 million in the prior year as well as 2022.

Depreciation and amortization expense was higher by $3.7 million versus a year ago. Due to the addition of the MC technology builds all on a line and operating at the end of last year. We realized a $0.01 per gallon consolidated crush for Q2 of 2023 that compares to $0.28 per gallon crush in the prior year.

On a sequential quarter-to-quarter basis, we saw the consolidated crush margin per gallon strength in $0.08 when compared to the first quarter of this year. Our Ag and Energy segment recorded a $2.9 million in EBITDA that's about $7.9 million lower than the prior year.

This decline was driven by lack of opportunities on our merchant businesses, which ebbs and flows with each year, quarter-to-quarter. For the second quarter, our SG&A costs for all segments was $33.3 million compared to $30.1 for Q2 of 2022.

This increase was driven by increased legal fees associated with GPP buy-in and increased personnel costs including severance costs. I'd like to remind our callers we do consolidate GPP and Green Plains in these SG&A costs. So that would be legal fees on both sides for both entities.

Interest expense of $9.7 million for the quarter includes the impact of debt amortization capitalized interest which was higher than the $7.8 million reported for the second quarter of last year due to reduced capital interest as certain projects had been completed.

I would like to note though our interest income was approximately 2 million higher in the second quarter 2023 when compared to the same period a year ago. The income tax benefit for the quarter was right at $1 million compared to a tax expense of 2.9 for the period in 2022.

At the end of the quarter, the net loss, the net loss carry forwards available to the company were $140 million which may be carried forward indefinitely. We continue to anticipate that our normalized tax rate for Green Plains Inc. excluding minority interest should be around 21%.

Our liquidity position remains solid and at the end of the quarter we had $359.8 million in cash, cash equivalent and restricted cash along with approximately $128 million available under working capital revolver. We are focused on executing the next steps of transformation and have the capital and liquidity to do so.

For the second quarter, we allocated $17 million of capital across the platform, which included $10 million to our clean sugar build in Shenandoah and MSC protein initiatives. About 4 million was also allocated to growth, other growth initiatives and approximately $3 million toward maintenance, safety and regulatory capital.

For the remainder of 2023, we anticipate CapEx will be in the range of $60 million to $90 million as we continue to work through the timing of permitting for MSC technology deployments at a couple of our larger plants.

Green Plains Partners reported net income of $9.3 million and an adjusted EBITDA of $12.7 million for Q2 of 2023, which was in line with the $12.9 million reported for the same period a year ago.

The minimum volume commitment supported the partnership steady financials during the quarter while plant utilization rates at Green Plains were lower than the prior year. The partnership declared a quarterly distribution of $0.450 per unit with a 0.99 times coverage ratio for the quarter.

The partnership also reported distributable cash flow of $10.7 million for the quarter, slightly lower than the 11.3 for the same quarter of 2022.

Over the last 12 months, the partnership produced adjusted EBITDA of $50.9 million, distributable cash flow of $43.5 million and declared distributions of $43.2 million, resulting in a 1.01x coverage ratio, excluding any adjustment for the principal payments made in the past year.

As a reminder, on May 3, 2023, the company submitted a non-binding preliminary proposal to the Board of Directors of Green Plains Holdings LLC, the general partner of Green Plains Partners LP to acquire all the publicly held common units of the partnership not already owned by Green Plains.

The complex committee and the Board of Directors of the general partner have been delegated the authority to evaluate and is currently evaluating the possible terms of a proposed transaction. Now I’d like to turn the call back over to Todd..

Thanks Jim. So there’s a lot to talk about and I know we have limited time. And while Q2 was challenging, the last half of 2023 and 2024 looks solid and our path forward is gaining traction and looking better.

For a couple years now we have been talking about the transformation to a 2.0 ag-tech sustainable producer of high value ingredients focused on the four pillars of protein, renewable corn oil, clean sugar and decarbonization. And the future is now. Quickly on decarbonisation which is a bit out of our normal order, but probably under appreciated.

This is one of the several reasons we are gaining traction in our clean sugar technology products and protein. Carbon scores do matter. We are now less than two years away from what we believe is a significant financial opportunity when we decarbonize a majority of our platform as the incentive structures are firmly in place.

Don’t underestimate or discount our carbon and pipeline strategy, as we believe all roads will lead to alcohol to jet sustainable aviation fuel production.

Importantly though, CI, carbon intensity of all of our ingredients will be reduced even further, which is a key selling point for our Ultra-High Protein today and our clean sugar technology dextrose in the future.

We literally received our latest protein lifecycle carbon intensity yesterday score, which shows a 46% lower score for our high protein products comparing to corn gluten meal globally, aligning this data with PEF, ISO and ISCC PLUS rules. This is very important to pet food and aquaculture producers globally.

In addition, our CST, carbon intensity cannot be matched by current products in the market today, which is why we are in significant negotiations with more demand than we can supply over the next several years, more later on this as well.

Our decarbonization opportunities now should at least add $120 million to $180 million annualized economic opportunities starting in the last half of 2025. We have also executed a few different new contracts around our carbon strategy that give us the confidence to use this number and we have more to go.

Our protein initiatives remain on track and our commercial successes continue to see strong results even with our reduced rates in Q2, which was a short-term impact.

Our turnkey JV with Tharaldson in North Dakota is anticipated to begin operations in the first quarter of 2024 with our Madison and Fairmont locations on deck next pending permitting from Illinois and Minnesota.

Completing those three facilities would increase our annual marketing capacity by 250,000 tons, bringing our total annual run rate to 580,000 tons of Ultra-High Protein production, including full turnkey rates, which is very close to what we had laid out for our 2025 volumes.

We believe this number grows as our yields at each site get much better and match Wood River. The 2025 economic uplift remains in the $150 million to $210 million range that we have pointed out for the last couple of years. Protein margins have gotten stronger for two main reasons.

First, our reorder rate remains high and even more important our prices continue to increase in relation to our input costs. Second, well, during the ramp up over the first few years, the corn soy relationship narrowed.

This is now normalized and we are seeing initial margins on new sales in the range of $0.15 to $0.17 per gallon uplift for that site, which is why our ability to run Gen 1 platform full out is important and that hurt us in the second quarter as we indicated.

We continue to see great success in the marketing of the ingredient and are in significant late stage discussions with commercial counterparties for our 60% protein products. We expect our first commercial shipments beginning in the fourth quarter and we continue to believe that 20% to 30% of our platform could be 60% protein sales during 2024.

Our Ultra-High Protein has a higher protein concentration than soybean meal and it does without the anti-nutritional factors. And importantly, our fermented yeast product for pet food application gives a further nutritional advantage versus soybean meal and other high protein offerings.

Now, depending on the customer, we can tailor biological recipes now to suit their needs for protein and yeast and our partnership with Novozymes allows this to happen as we are now beginning to see the fruits of those labors as well. We don’t believe anyone in the world can do what our companies are doing together.

We have been pointing to these opportunities for some time now and the future is now. Two other quick points. First, we are now producing for the first time ever non-GMO Ultra-High Protein. We will ship to customers for initial analysis and trials over the next several months. The cost will be high, but the returns will be higher.

Second, post this production run being completed next week, we expect to dedicate one of our MSC locations as a 60 Pro facility to produce commercial quantities to ship in Q4 and 2024 and hope to keep that location on this program for the majority of its production.

Renewable corn oil prices have seen a recent resurgence in strength as renewable diesel capacity continues to come online. We are seeing renewable corn oil pricing consistently achieve premiums to soybean oil due to the lower carbon intensity of our product. As a result, we are once again seeing corn oil pricing in the $0.65 to $0.75 a pound range.

And remember, under the 45Z clean fuel production credit, our low CI renewable oil is further advantage to soybean oil starting in 2025. And I think that is also underappreciated.

For our clean sugar initiative, our engineering teams and construction crews at Shenandoah continue to make great progress on construction and the project continues to be on track for mechanical completion in late 2023 and startup in early 2024.

We are doing something that has never been done at a dry grind facility, creating a truly revolutionary biorefinery and using that to create a lower carbon intensity dextrose than what is available today in the market.

Customer interest remains very high and we are confident we’ll have a majority of the first year’s capacity spoken for prior to startup and expect to have announceable commercial sales commitments before the end of the year.

The last half of 2023 obviously looks completely different from the first half for us, as we are operating and positioned to deliver stronger utilization numbers due to the shutdowns we took in the second quarter and we are well positioned to hit the targeted run rates for our protein and oil businesses that we have laid out.

At today’s pricing renewable corn oil alone could contribute $70 million to $80 million for the second half of 2023 on pace for the annualized run rate we have discussed in the past.

The uplift from our protein business is back on pace for the run rates we have discussed previously and believe there is upside to that number depending on the level of 60% protein sales we have in 2024.

But all in, adding in ag and energy and net of corporate overhead, we are setting up for a strong finish for nonethanol contributions during the back half of the year as we have previously guided to.

The current outlook for our Gen 1 platform is materially stronger than the recent past, favorable corn market drivers and an anticipated larger carryout coupled with improved year-over-year driving demand has led to an expansion in the ethanol margin setting the back half of 2023 to be stronger across all of our areas of our business.

Finally, I want to provide a brief technology update. As we indicated on our last call, we are working towards some exciting technology news for Fluid Quip technologies.

The first, which was fulfilled in our Shell Fiber Conversion Technology or SFCT announcement about our collaboration with Equilon a subsidiary of Shell, one of the largest world – world’s largest energy companies should not be discounted as well because we have been working with them since early 2021 to develop a process to combine fermentation, precision mechanical separation and processing and fiber conversion into one platform.

They are building a very large pilot SFCT facility adjacent to our York Innovation Center where we are adding the MSC process side by side. Recruiting for this venture is well underway and getting into the public sphere helps these efforts.

So what is that we are doing this collaboration? Combining MSC with SFCT represents an innovative technology for agricultural processing and allows us to break down a kernel of corn into its high value products leaving nothing behind.

In addition to the fermentation and precision separation technology that we have been using at Green Plains and Fluid Quip, this collaboration adds a chemical breakdown step of the fiber portion of what has already been separated through the biological mechanical means, which is significantly different than anything you’ve seen in the past.

Increasing the amount of protein that can be recovered, capturing all remaining renewable corn oil, and producing cellulosic sugars, which expands the ability to make low carbon ethanol, which we believe could be a key component feedstock for SAF and for other low carbon ethanol markets like Canada.

Said another way, this process will convert our lowest value co-product DDGS or dry distillers grains into three high value products, renewable corn oil, Ultra-High Protein and cellulosic ethanol. It’s really just the next step in decarbonizing our platform and maximizing the value added products from our biorefining process.

We anticipate to start up in 2024, which is not far away and we’ll look to commercialize this technology at one of our MSC facilities that we have already built, which is lower capital intensity for us upon achievement of key milestones. In addition, Fluid Quip has its first MSC technology sale into Europe.

The opportunity not only further validates flu Fluid Quip’s MSC as being the leading precision tech – best separation technology globally, but it also demonstrates feedstock flexibility and efficiency as the application will be for wheat as its primary feedstock.

MSC can work with corn, wheat and sorghum blends, which opens the door to additional markets around the world. In addition, Fluid Quip’s patent, we just got stronger as we were issued four new patents this quarter.

Two related to clean sugar, one related to protein – which includes oil recovery and one focused on enzyme recycling of converting pulp cellulose based material into sugars. We also expect more broad patent coverage globally for clean sugar technologies to be issued very shortly as we have been informed by several countries they’re coming.

The value of Fluid Quip’s IP portfolio is a key differentiator for Green Plains and while often underappreciated these latest announcements begin to demonstrate the value of the investment in Fluid Quip made we in 2021. We truly have a revolutionary technology company whose IP we are deploying to reinvent our platform into Green Plains 2.0.

We have been pointing to this future for some time now and although we have seen some setbacks, with the success we are seeing across all of our pillars, the opportunities we are executing on are just ahead of us and we believe the future is finally upon us and is now. And with that, I’ll leave it there.

Thanks for joining our call today and let’s start the question-and-answer session..

Thank you. [Operator Instructions] Your first question comes from Craig Irwin from ROTH Capital. Craig, please go ahead..

Good morning and thanks for taking my questions..

Good morning, Craig..

Todd, so – hey, good morning. So High Pro 900 tons a day, line of sight on 60 Pro. You did exactly what you said you would do, right? There’s been a lot of learning there and it’s kind of been nothing ever goes in a straight line, right? And most investors these days are now starting to look forward to clean sugar.

Can you maybe just describe for us some of the things that you learned from the rollout of High Pro that translate into clean sugar? Obviously you’re starting in a different place given the own Fluid Quip here.

But I’m sure there’s some important things you can share with us to help us understand what clean sugar looks like from an execution standpoint with all the learnings you’ve had in the last couple years..

Yes. I think – thanks for the question. I think our ramp up for sugar will be significantly different from the learnings we had in our ramp up from protein. We underappreciated the difficulty at times to put a new technology in place.

But I think as we rolled out more and more of our sites, we learned every day and then we saw better results in terms of how we built them and how we run them. And we’re even seeing today it just as we optimize our protein technologies, when we built these assets, we thought we’d have a 3 to 3.5 pound per bushel yield.

And we now know, based on our partnership with Novozymes as well as things we can do mechanically, we will be able to achieve 5 pounds per bushel consistently, which allows us not only to hit our laid out numbers that we put out there in terms of volumes for 2025, but exceed them as well as we continue to get more and more out of these systems and debottleneck them.

It took a little bit longer than I think we appreciate it, but we’re going to take those learnings, apply them to sugar. Sugar is a 200 million to 300 million pound system that we’re building right now.

And the difference as well is that we went out and hired what we believe are experts in wet milling and making dextrose, going all quite frankly to crystallize dextrose as well. And so we have set up very, very differently so that it’s not Gen 1 dry grind management running these assets.

It’s actually a wet milling team that we hired from several of the largest in the world that wanted to come work for us on this revolutionary technology implementation because we believe this is really the future of our company. And so on top of that then we wanted to get ahead of marketing the product.

In terms of – this takes a product longer to market all the way through food, but industrial use of dextrose remains high. And so one key differentiator for us was to get on our carbon scores very early because this product is a significant reduction in carbon intensity, which is a big deal for both industrial and food products.

So when we start up, we’re focused on hopefully selling out to industrial markets and then ultimately it should take us about four to six months to get food grade certified. And we are already food grade certified in the process at our York facility.

We’ll get food grade certified at a better facility in Shenandoah and then start to hit the food market later in 2024 and start to look at where do we go next? Do we increase Shenandoah capacity, which is fully expandable, that’s how we designed it or do we move to other locations where we have interest in geographic demand that they want us to build closer to their sites or they want to co-locate on our properties.

And we just approached it very differently, but this product is so much more valuable in total to what our bottom line impact can be versus protein, which is why this technology we believe is just such a game changer for us.

But this one we’re going to roll out very carefully and make sure that, number one, we don’t overload the market, but number two, we come online and think about all the things long before we start these up that can take away some of the length that it takes to start up technologies..

Thank you for that. So the other big question out there right now is with the MLP, not too many weeks away from being consolidated, right? Let’s hope for a small number. This opens up the field for you to much more easily execute on M&A.

And in the past you’ve been very active and even had some interesting situations where one of the chunky portfolios you had an opportunity to offer a vastly superior proposal to one of the sellers, I think because of a tax advantage structure for them.

Can you maybe update us on how active you’ve been over the last couple years as far as evaluating assets? And whether or not your appetite is likely to be for single plants or possibly portfolios? And what are the complications these days as far as actually executing acquisitions in the broader sort of ethanol plant market?.

Well, that’s a lot to unpack there. But let me just focus on a couple things. We continue to negotiate with complex committee and really can’t talk much more than that. I’m bringing the MLP in and we talked about in the past some of the reasons why we want to do that, and we’ll just leave it at that just because of where we’re at in the process.

Secondly, from an acquisition standpoint, we’ve been on the sidelines a bit. They are – ethanol plants in general are harder to buy in the size, scope and scale that we want to apply our technologies to them.

And as you saw, we divested a small plant, for us, it just locationally geographically and also the way that the logistics worked out of there just won’t fit our long-term strategy around protein, oil, sugar and decarbonization. But it fits somebody else’s, which is good. But it was a smaller subscale plant to what we want to operate in the future.

Acquisitions are hard, they’re expensive. The value of our assets have gone up. If you want to build one today, replacement value for an ethanol plant in the Midwestern – in the Midwest is $2.25 to $2.50 a bushel minimum that’s – gallon, sorry, $2.25 to $2.50 a gallon minimum. And that’s before you add on any of our technologies as well.

So M&A is pretty difficult. We absolutely want to begin to re-expand our platform over the next several years and look for opportunities, but everything got more expensive, which replacement cost is meaningful in this industry.

And why is it meaningful? Because before you even take a look at ethanol margins have somewhat recovered, blends are going up. We believe our technologies can be applied.

But more importantly, if you’re sitting on one of the pipelines or a Summit, for example, which can get built as quick as probably quicker than most you are in an advantaged position and there’s going to be the haves and the have-nots in the next couple of years of who gets up and running first and that’s why we chose Summit as one of our partners is because we think that’ll be the haves and that’ll get built first.

And you’ll have – you could have a multi-year advantage over those that are not on a pipeline that is operating yet. So, that’s why people – when you look at acquisitions, you have to value very different this industry in the past.

And if we get to jet fuel, which you’ve already seen projects being announced, the value of an asset to produce low carbon alcohol and low carbon feed stocks is just going to continue to go up now withstanding some of the volatility we faced. So we absolutely would love to expand our platform. We don’t really want to build a bunch more fuel capacity.

I mean, we have some sites we can expand a little bit so we can take advantage of being on a pipeline. But also if you take a look at a place like Shenandoah where we’re going to take capacity out of the market as we build up our clean sugar, that’ll give us an opportunity as well.

So, they’re out there, but it’s getting much harder and much more expensive to do M&A in this industry. It’s not like it was a few years ago, no matter what the margin is in any given quarter, by the way..

Great. Well, thank you for that. I’ll hop back in the queue..

Thank you..

Next question comes from Adam Samuelson from Goldman Sachs. Please go ahead..

Yes. Thank you. Good morning, everyone..

Good morning, Adam..

Hi. So I guess the first question, just maybe making sure we’re clear on kind of the quarter and kind of how you’re framing the second half. I think in the prepared remarks, Todd, you talked to the Wood River issue and the other unplanned and planned downtime kind of potentially leaving up to $0.20 a gallon of margin on the table.

As we look forward with the network now operating at high rates, less downtime in the second half of the year and where the forward curves are and your mix of High Pro and corn oil is that kind of margin level or that margin level plus kind of the right way to think about second half EBITDA?.

Yes. I mean, it’s ebbing and flowing. We saw a nice expansion back yesterday, but yes, I think you’re not far from those ranges today, if not, potentially even better.

And look, I mean, part of our Q2 was also the fact when you don’t run and the market expands and the prices go up, you can’t execute on high price contracts, which then becomes a bit of a double whammy having to buy those in or having to cancel them and to the advantage of the person on the other side.

So, for us it was – we were tracking really well and unfortunately all of our big sites hit at the same time. And while we had planned downtimes at several of them, they turned into unplanned downtimes as well.

And so, it wasn’t just really just missing the margin, it was actually having to buy in hedges and also buy in sales, high priced protein sales as well, that hurt us. So going forward, if we get clean and when as we’re clean right now that’s when we have the real opportunity to kind of achieve those type of margins and more.

And we saw them higher even since then, but they’ve come down a little bit as that corn rally went up very fast and now it’s come down. I think ethanol numbers are improving again. We saw a couple weeks of builds. So I think we’re setting up for a base – a pretty good fundamental outlook for just the base fuel in the last half.

And then protein as we indicated, when you have the corn soy spread doing what it’s doing and corn sitting around $5 and soy sitting around – or soy meal sitting over at $440, obviously inverted in the next year. It’s really in the favor of our strategy again.

And while we got a lot of questions from our shareholders about a year and a half ago when that spread narrowed, I think this ebbs and flows, but it’s really favorable for not just last half, but 2024 as well.

And we’re seeing a good pickup in demand as our product continues to get better and better inclusion rates in rations across all the animal sectors, including pet food and aquaculture..

Okay. No, that’s really helpful. And if I could just ask a follow-up on High Pro commercialization. You talked about a 60% – kind of 60% sales that you’re working on and getting those sales done in the fourth quarter.

Can you help us frame where the premium versus regular soy meal or regular UHP would be? Just as we think about the incremental contribution from getting meaningful proportions of your production to a 60% level? And what it will take to push a higher proportion of your High Pro production up into that 60% range..

Yes. Our first step is, is just to start competing really as a replacement for corn gluten meal and soy protein concentrates. And that’s really where our replacement is.

As we’ve seen soy meal increase and the corn spread – corn and soy spread go in our favor for 50 Pro when you’re competing against a corn gluten meal, the spread between corn gluten meal and soy meal have narrowed a bit.

So, while we’re – we’ll deal with that a little bit, I mean, what we can see today is at least on paper, a $0.14 to $0.17 uplift again, is kind of how we’re thinking about almost a double the margin again.

Now that’s a starting point and we want to get involved in these rations, but the demand that we’re seeing at least nearby is coming from outside of the United States in terms of aquaculture for 60 Pro.

And then we’re working on significant demand within the United States next year in 2024 for aquaculture and pet and other areas and really in the early stages of swine.

So we are just starting to – we have been working significantly hard on the program over the last six to 12 months and getting into different rations and getting through a lot of the evaluation stages. And we’re at the end of those with very, very good high marks.

But again, the spread narrow between some of the higher protein products and soybean meal just because of the front end soybean meal curve.

But overall, if we had to look at it on paper, we kind of look at the base margin in 50 Pro, some would be kind of $0.15 and $0.18 a gallon today, the base margin in 60 Pro is starting at kind of $0.30 to $0.40 a gallon uplift today.

And it really just some of it depends on market, some of it depends on what – where we’re going to go in the world, some of it depends on freight, but overall we see a significant uplift to that and overall great acceptance of the product.

What’s really unique and differentiates Green Plains from anybody else is with our new plant JV coming on in early 2024. Our redundancy is a key and critical component and our volume is a key and critical component that we can now sell you 50,000 tons, 100,000 tons, 150,000 tons.

It really – there’s no – there’s not a limit there relative to an inclusion rate. And that’s a game changer when you talk to a customer instead of having to sell them 4,000 or 5,000 tons. So redundancy really matters and it’ll matter even more in 60 Pro markets..

All right, great. That’s all helpful color. I’ll pass it on. Thanks..

Thank you very much..

Next question from Kristen Owen from Oppenheimer. Please go ahead..

Hi. Good morning. Thank you for taking the question. Just dovetailing on that last response. Todd, you mentioned in the prepared remarks that you’re planning to move a single facility or about 20% dedicated capacity to 60 Pro.

So can you just talk us through what you’re hearing in the market that’s giving you the confidence that you can allocate that capacity to that that higher level protein?.

What we’re hearing is really preparing for shipments, hopefully in September to satisfy Q4 demand that we’re working on today in late stage negotiations. So we can’t just turn it on overnight. It takes about a week or two just to start to get the plant fully switched over from 50 to 60 Pro.

We got to make sure that we work with our biology partners to make sure we have the adequate inputs that we need in fermentation. That just takes time.

So a little bit you have to anticipate what stages you are in discussions, and when we look at the size of the discussions we have to convert one of our plans fully to 60 Pro is going to be the best outcome so we can satisfy it. It’s a bit of chicken the egg, when they want it, you better have it.

And I think we learned that in our 50 Pro is that we built inventories on 50 Pro and it took a little time to work through those inventories, but because we had those inventories, we were able to really start to get traction in the 50 Pro market. We’re going to have to do the same thing in 60 Pro.

Start to build inventories later this quarter so that we can satisfy what we believe is demand. And we’re not just seeing demand from a standpoint of ship me a truck or ship me a tote or even a container. We’re actually starting to see enough volume that we’re potentially starting to ship pieces of vessels as well around the world.

So there’s enough – it gives us enough confidence that it’s time to make a switch to one of our plants and have the product available in the market..

And just a clarifying question on that. We’re talking multiple customers and multiple end markets or just a little bit more color that you can provide on the customer standpoint..

Multiple customers, multiple end markets, multiple geographies, some as big as vessel holds, not vessel quantity, not a full vessel. And even down to one truck at a time and we just want to be prepared to ship and be ready to go.

We’ve been in significant trials, evaluations, you can go on and on tests, labeling all the things that are really important to our customers. We’ve been working on that for well over a year as we had been indicating to everybody. It takes – it’s a long process to get here.

We thought it would take us three to five years and it’s as we said, it took us three to five months to make it. Now it takes about another year to kind of get through all of the evaluations.

Because once we made it, it’s been in the supply chain, it’s been in evaluation and so far we haven’t really seen any market that has come back to us to say, hey, that didn’t work for us. And so our opportunity and what we can propose to customers around everything from performance taste, as well as carbon intensity is extremely beneficial..

That all sounds very positive. One follow-up question unrelated. Just given some of the discussion around re-rating of the asset footprint and replacement cost. Any indication that you can give us on the transaction value for Atkinson? What we should anticipate in terms of cash on the balance sheet from that? Thank you..

Yes. We’re in confidentiality with both sides of this transaction. And it was a smaller site and from that – and it didn’t have rail. I mean, there’s a lot of things on this site that didn’t match what we wanted.

So relatively speaking, it’s not really a material transaction, but it’s definitely enough cash for our balance sheet that makes a difference as well. But we’re in really great financial strength without this as well. I mean, that’s just one more step.

And as I indicated, our free cash flow generation, at least based on current markets, should pretty much cover a lot of our CapEx in terms of our growth initiatives, which really this leaves us in a very similar financial position at the end of the year, going to 2024 with potentially Madison or Fairmont getting their permit later this year, especially Madison, Fairmont will take a little bit longer than that.

So we just want to make sure we were positioned from the standpoint of being able to execute on where we can really make the money and be accretive. And that’s why we executed on this transaction. But we would not have put any of our technology at this site. So it really didn’t match our long-term needs..

Next question from Manav Gupta, UBS. Please. Manav, go ahead..

Hi. I wanted to understand a little bit better. We are seeing a rebound in corn oil prices, but we are also seeing rebound in animal tallow, soybean oil. So it appears all – pretty much all RD feed stocks are on up trend. Help us understand what’s driving it.

Is it a function of the plants running a lot more reliably now ramp, or does it have to do something with the supply side also Argentina, just not being able to supply enough soybean oil, so the whole market is tight? If you could just talk about the dynamics of the RD feedstock market..

Yes, it was interesting. When the market was in the 40s and 50s we were selling – we were still selling our oil at kind of $0.05 to $0.12 over that market. So that was just the market for corn oil distillers – renewable corn – as we call it, renewable corn oil.

Now that the soybean market has rallied on the front end a little bit, those sales obviously from the standpoint of doing basis sales are beneficial to us. But beyond that, we are still selling at a premium to that. I mean, I think there’s just multiple factors. I think there’s not – I don’t know that the supply is the issue.

I think demand is just becoming so robust that we’re starting to see really good uptakes of oils into renewable diesel.

More importantly though, when you kind of look at some recovery in LCFS, when you look at the value of CI points for what we produce, and even tallows, when you look at the low CI feed stocks we have not really seen anywhere where those will trade anywhere that discounts the soybean oil anymore.

And in fact, as we move towards 2025, which is just not that far away, we have a benefit to the end users because of the IRA to use more corn oil. So we’re really in a really good position. What we didn’t mention Manav as well is that Fluid Quip continues to see in their technology expanded yields before we even get to SFCT technology.

So, we are implementing one of their technologies, new technologies in Wood River over the next several months, which we believe has the capability to increase our yields at an MSC facility to kind of 1.3, 1.4.

And they've already seen those results at an earlier application at a non-Green Plains plant that they had a different system running already. They upgraded it. So now we're going to take those findings and apply it. So we're very confident in our ability to produce oil, but I think it's really just demand is finally showing up.

And I think supply has not really grown, quite frankly. I mean, we're not making any more oil as an industry. We're not making it soybean oil. There's not a bunch of new plants that started up in soy crushing that's coming, but so the supply hasn't really expanded while demand is finally kind of exceeding it again..

Okay. And a quick follow up here is the Wood River outage kind of hit you multiple ways. It hit your ethanol production, corn oil, also your ultra-high pro. Help us a little understand a little bit better during the OSHA investigation or otherwise.

What are some of the lessons learned here and what can be done to make sure something like this does not happen again? Thank you..

Well, we don't want ever want it to happen. I think it was an unfortunate event. It was during the shutdown, we can't really get into a lot of the details. OSHA has released the plant back to us, and we were already preparing during the end of that to bring that plant up as fast as we could.

Took a little while to get protein and oil running, we just want to make sure the team was good and stable. But look, these are incidents that we never want to happen. So, I mean, we learned from every incident like this. It's unfortunate. It is hard on the team. It's hard on the company overall. It's not just the Wood River facility.

We are certainly cognizant of what it can do to our employees, and I think it just had multiple effects across the company. But there is as we move on, we'll just take our learnings. But I think overall we are running that plant full out again and the team is in good shape and OSHA has released the plant back to us.

So we just – we'll move on and learn from that..

Next question comes from Salvator Tiano, Bank of America. Salvator, please go ahead..

Yes, thank you very much. I actually want to get a little bit more color on the rest of the outages. So firstly, if I understood correctly, given the $0.15 to $0.20 impact that you said on consolidated margins, it seems to us that it's probably another $10 million to $20 million impact that you saw in other facilities besides Wood River.

And does this make sense? And also, what type of outages were they, did you uncover essentially things during plant turnaround that needed to be repaired or what they or simply things broke down throughout the quarter?.

Yes, I think it was a little bit of everything you're talking about. And on top of that, you have the domino effect of having good hedges on in an expanding market, having good sales on of high protein in a decreasing market, which then you lose those and you have exit some of those opportunities.

And so it was, yes, it was a combination of the fact that we were in shutdowns that took a significantly longer to bring back up as we found more areas that we needed to repair. And then overall, we had some significant unplanned downtimes of things that just happened during the quarter. It was a bit of a perfect storm. We weren't expecting it.

But what we were able to do then is during those, our operations team again we brought in a new head of operations. He's built a team around him, they got their head around it. We are highly skilled and highly competent across that team.

We brought in people across industries from refining all the way into wet milling all the way into dry milling, and built a really new team as we had turned that team over.

And they had kind of hit it hard and set us up so that during that time at least we were able to quickly mobilize, take advantage and get through some of the things we would have done in the last half at our normal shutdowns fall shutdowns. And we're not going to have to do some of those now, which is going to be helpful.

So it was just a bit of a perfect storm that hit us. Unfortunately, we had ourselves set up for a pretty good quarter.

And then between Wood River, the spiral effect of locking things in and then having unplanned downtimes just hit us hard and we'll move on from that and just run full out as best we can during the last half and show everybody what this is capable of, because we could have shown it in the second quarter and it just was not able to execute because of those couple of reasons..

Perfect. And as a follow up, you mentioned you were in the final stage of negotiations for the 60 Pro volumes in Q4. I personally at least was under the impression things were more firm in terms of sales there.

So is there any risk that negotiations may not yield the outcome that you would like and you may actually not sell 60 Pro volumes here, and it's been a while since we announced obviously the fish mill partnership with Riverence.

So how are things progressing there as well?.

Yes, so I don't think we gave anybody a certainty of sale, but what we did say is we're negotiating in the fourth quarter. We feel like now we're in such late stages that we're even negotiating destinations, price, all those type of things. So we know we'll make it into some rations into the fourth quarter. And that's why we're now starting to ramp up.

It'll take us a good 30 days to get into full production rate, even though we can start to hit it within a few days. But just to get consistent and make sure that the plants lined out running well. But that's why our confidence has gone up.

Relative to starting up one of our 60 Pro plants, even earlier than probably we thought we were going to do, our Riverence partnership remains strong. We are already in one of their rations through one of their third-party suppliers. We know that for a fact, we're working on getting into another ration of theirs.

We know that our product is very valuable. Our partnership is remains strong. We're looking at kind of their volume going forward and what we can do together and where we should really place our asset.

It's a long game when you think about the feeding cycles for what they do and what the other salmon producers do around the world, this is a two year cycle almost from the time you start till the time you harvest an end product. And so we have plenty of time, but the partnership remains strong.

The asset base is starting to be thought of, there is an asset in the middle of that already. And we hopefully will start to see the benefit, the full benefit of that partnership over the next kind of year or two.

But it's a long game when you think about the feeding cycle of these companies and the growth cycle of these companies, and not many better than Riverence in the world. And I can only assure you that our partnership is strong in place and looking for where we're going to continue to expand it..

Thank you very much..

Next question comes from Laurence Alexander, Jefferies. Please go ahead..

Hi, this is Dan Rizzo on for Laurence.

Just a quick question, are there any lingering costs associated with the combination with GPP that's going to occur later in the next couple months?.

Yes, I would say there's – depending on where we get to in the transaction, there's still absolute merger costs that could happen. We need shareholder votes, we need, there's lawyers, there's several things in terms of filing. So I mean, I would say, there's deal fees, all those type of things have to happen.

And but overall, we could break those out and if they're all one-timers, but I think the overall benefit of bringing them in would greatly exceed that if we can get this deal done..

And I'm sorry if I forgot this, but have you quantified what the synergies are with doing this? The cost of the cost savings are?.

Yes, I mean, what we said is, number one by bringing the partnership back in, obviously we don't send some of our money out the door in terms of fees. We get that back in, but we're paying for that, some savings in SG&A and so overall interest savings as well, potentially as we will look to do, see what we do with that piece of that.

But we're still negotiating with the conflict committee and we should have more on that during the quarter..

All right. Thank you very much..

Next question comes from Jordan Levy, Truist Securities. Please go ahead..

Hey all, I appreciate all the commentary and the improved outlook you talked to in the back half of the year.

Maybe if we could just unpack that a little bit more and help frame up how we should be thinking about what run rate EBITDA might look like given the levels you're running at on protein right now and what you're seeing in crush and DCO?.

Yes, I mean, I think when you kind of look at it, it's on paper similar or better to the margins we locked in during Q2 overall. And depending on where we see ethanol perform, we've got to watch the corn market closely. I mean, bombing a Black Sea Port from the Ukraine to Russia, doesn't help our crush.

But overall, the crush expanded, the numbers came back in line, run rates were over overly stated in our opinion last week at 10, 90. It's probably not possible, just doesn't stay there very long. And I think we'll get some better EIA data going forward. I think we're below last year's stocks levels, blending continues to increase.

RIN values have not broken since the updated RVOs at all. So, if you look at kind of retailers, they're making plenty of money blending ethanol, we're seeing more and more E15 type 88 octane sales happen to the consumer. We've even seen uptick in E85 sales, which we didn't know how much traction that will continue to maintain over the years.

But when you look at corn oil alone, relative to the first half just take prices where they're at today, I mean, that alone is in that $75 million to $80 million range, just contribution where the first half was more of a – because of prices and the volatility is more on that $50 million to $60 million range in the first half.

So that alone gets us back. We got the question once. How did you come up with $0.70, $0.60 or $0.70 a pound in your long-term view of oil? And I think it's taking shape nicely. And so protein on as well, we've got to deliver on some of these 60 Pro sales, but overall we should start to really see a nice protein uplift.

I mean, we are looking forward to today, which is going to come soon where we're able to really break out last half protein numbers for you. But I can tell you that it's on pace with what we had previously indicated. On top of that, Fluid Quip will start to gain some traction on some of the sales that they start to make.

Remember when we make a sale in Fluid Quip, it actually increases EBITDA at Green Plains. There is a margin on technology and they're working on incredible technology opportunities well outside of protein and what they do. And so they have a much bigger engineering and construction and technology business as well.

So we're looking forward to their contributions and we'll just have to wait and see where ethanol comes in. And even the last half on Ag and Energy is usually stronger than the first half than we – because third and fourth quarters is really we start to kick in on in that as well.

So overall when you kind of look at it, on paper it's greater than what we were logging in the second quarter and we'll have to see where it goes from there. And fundamentals are good in everything we're doing..

That's promising. Thanks Todd. Maybe just shifting gears over to the regulatory front. Looks like the administration's working through how to think about ethanol as a feedstock for SAF.

Just curious what your thoughts are there and how they might look to approach that and what implications that might have?.

So I have Devin here with us, who you guys met on our IRA Teach-in except to say, and I'll just lead it and I'll let Devin give you a little more color. And we're very focused on making sure that the regulations are in place that give ethanol as good of a shot as anything else.

And alcohol, the first step is to decarbonize, which is why we're very happy with the choices we've made around our decarbonization strategy and being upper, what we believe will be earlier than a large part of the industry because of the choices we made.

But overall it looks like we're getting good bipartisan support for making sure that the modeling is thought of correctly. And I'll let Devin comment on that a little bit..

So, like we said on the IRA Teach-in, we want to see the Department of Energy's Argonne GREET model used that allows for decarbonized ethanol to serve as primary feedstock for alcohol-to-jet SAF. We saw some encouraging comments from the president just last week in Maine where he said that farmers have a vital role to play in producing SAF.

So that was encouraging. We expect to see regulations put out by treasury as early as next month, September on the current 40B SAF tax credit, and then shortly thereafter for 45Z. And there's a lot of discussion.

But as Todd mentioned, tremendous amount of bipartisan support from both the House and the Senate to continue to encourage the administration to allow for decarbonized ethanol to serve as a feedstock and help to meet the SAF Grand Challenge goal of 3 billion gallons by 2030, which we don't believe is possible unless you use these agriculture row based feedstocks..

Very helpful. Thank you..

Thank you..

Next question comes from Eric Stine, Craig-Hallum. Please go ahead..

Good morning everyone..

Good morning..

Good morning..

Hey, just going back to 60 Pro, I mean, is this a matter more of the market or your place in the market developing? I mean, is there any reason as we think long-term that your entire platform isn't 60 Pro? And just to confirm, I believe you said fit in the near-term, you are hoping 20% to 30% would be 60 Pro..

It's why we built them, Eric. I mean, we didn't build our systems to run 50 Pro.

We built them because we knew with our partnership with Fluid Quip and our investment there that we've made and the amazing technology they have and the consistency of their product and the way it flows and the way it looks and the color of it, it's very different than any anything else available on the market.

The way we dry it, the way we process it, it's just consistent. We have no problem consistently making 50, 52 anything we want to make on demand and gaining large our yield increases, which is why we did it as well.

But we bought Fluid Quip and we invested in Fluid Quip with our partners to make 60% protein and more and greater and so our whole platform and our whole marketing efforts getting into 2024 and 2025 have been to maximize our market penetration in 60% protein.

And that's where we believe we're heading when we look at a new plant and where we want to build the next one.

We basically have to say if we push yield and we push protein, we also know that what is our fiber product going to look like as well, because we are creating new products, we are creating yeast products, we're creating fiber products when we make 60 Pro, it's a very different outcome.

But yes, our intent and our plan is to go as far as fast and as quickly as we can in the highest amount of volumes to move to a 60 Pro market. And we are focused on doing that. It will take a while because it has to be a global outcome.

And so now we're working with partners globally as well for distribution and talking with potential partners on distribution as well, because you're going to have to this is a global product and we think that's where the best places to really get max penetration against products.

Everything from corn, gluten meal to soy protein concentrates, all the way to what we're doing on our biological opportunities in terms of taste and texture and profiles to even start to think about things like fish meal replacement as well. And that's really where – that's the ultimate Pandora's box that we continue to try to solve for every day..

Got you. And then I mean, I guess not to totally try to pin you down, but I mean, in terms of timing, you said it'll take a while.

I mean, is that two, three years out or is that it's going to take five plus years?.

No, it's not five years. I can assure you – I mean, I can almost assure you of that, every time I say I can assure you it's probably not the best thing to say, but it's not five years out.

I mean, our program has fully been designed and the people we brought in to help market this product and sell it all have experience at the higher protein levels and customer base. So it's just time. It's not going to be matter.

And our view, it's not a matter of if, can we do the whole thing? We should be able to, I mean, there's 10 million tons of demand globally, if not greater than just for things like corn, gluten meal and more for corn, or soy protein isolates and soy protein concentrates and those type of things.

And we brought a new leader to the team that came out of Cargill that spent his time globally in different protein and aquaculture businesses. And he's now running our protein marketing as well.

And so we're tracking that type of talent to this company so that, when they show up at the door, they have great customer relationships, but also a lot of credibility from where they came from to where to where we're going. And we've built teams around all of our products, clean sugar and protein. Cornell's a little easier.

They just call and they buy it. But in those products we wanted to make sure that we staff those with deep technical and marketing experience and that this really didn't exist in the Gen 1 industry. So we're tapping that from all of our larger counterparts in agriculture and energy..

Okay. Thank you..

Thank you..

Our last question comes from Andrew Strelzik from BMO Capital Markets. Please go ahead, Andrew..

Hey guys, this is Ben on for Andrew. Just one quick one on the ultra-high protein EBITDA build. Todd, I think you alluded to this earlier, but you guys seem to still be on track for $150 million run rate by the end of 2024. If you could just briefly kind of walk us through the path as to how that looks.

Obviously, we've heard a bunch on 60 Pro at the beginning of the year, but just trying to bridge that gap into 2025. Thanks..

Yes, so when we look at it, basically when we think about it, today we have 560 million gallons converted, and we're going to have half the Tharaldson JV, half of our turnkey. So that's about 85 million gallons converted. And then when you add at least one of the two Fairmont or Madison, that's 760 million gallons converted.

When you look at how much corn we grind there at eight in terms of a yield, and then you take that times what we believe will be, by the time we get there, four and a half to five pounds a bushel, and then you're hitting higher targets volumetrically than what we had outlined.

And then when we look at 2024 and as we leave 2024 with 20% to 30% of our capacity in 60 Pro and going to 2025, when you put all that into the calculator, and we'll be very happy to do that. I don't – I can't do that right now on this call.

It meets or exceeds those targets relative to $0.15 to $0.18 a gallon uplift on 50 Pro, $0.30 to $0.40 a gallon uplift on 60 Pro, not including all the other opportunities that our innovation team works on to increase value of our products even further in terms of that product suite and things like dry yeasts and 60 dry yeast, 60 Pro yeast, those type of things.

And when we've kind of put that all in, we are even more confident today with the things that we're seeing driven by yield, driven by protein, driven by price spreads, driven by innovation that we can hit that $150 million to $200 million mark that we laid out and then build from there..

Awesome. Thanks Todd. Have a great weekend..

Thank you very much..

I will now turn the call back over to Mr. Becker, CEO for closing remarks..

Yes, hey, thanks everybody for being on the call. A lot of questions, a lot of great questions. We really appreciate it. As you can see, we're making great progress across our product suite, challenging second quarter. We appreciate that. We've come out of it better than where we were in it.

Plants are running better, protein is running great, sugar's on track. Oil markets have recovered significantly from the quarter lows where we're down into the 40s, now we're up into the 70s again, high 60s.

So overall we think we're in a good place to show what the opportunity is in the last half and deliver a few quarters and make sure you're confident that we can deliver on 2024 and 2025. And our takeaways from 2023 going to 2024 and our exit run rate in 2024 goes into 2025.

And that's why we're extremely confident between decarbonization, which those numbers have only gotten better to hit those 2025 numbers that we laid out and begin to hit those in 2024 as well. So we appreciate your support and we'll talk to you next quarter..

Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect..