Gerard Sweeney • ROTH Capital Partners

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CEO Ryan Ezell explained that the five new pilot customers all have footprints similar in size to or larger than their anchor customer, ProFrac. He detailed the diligence process, which begins with proving the Varex monitoring system's capabilities. Regarding capacity, he stated Flotek has a backlog of analyzers and can build larger units within a four to eight-week timeline, with over 200 units available for custody transfer deployment.

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CEO Ryan Ezell stated that the custody transfer sales cycle is accelerating now that its new XSPCT unit is in full production, with a major E&P operator's adoption serving as a key proof of concept. For PWRtek's growth, Ezell outlined a hybrid push-pull strategy involving direct sales to large E&Ps and channel partnerships with energy service providers. He confirmed the sales force is already expanding and that the technology provides the certainty of gas quality needed to enable sales to data centers and for grid support.

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CEO Ryan Ezell highlighted key milestones including double-digit increases in flare monitoring units, acceleration of custody transfer solutions in the second half of the year, and the addition of at least nine power gen units for diverse applications like AI data centers. Ezell stated that a strong natural gas market is a 'great hedge' for Flotek, as gas-heavy basins like the Haynesville require more complex, higher-margin chemistry systems, playing directly into the company's value proposition and long-term strategy.

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CEO Ryan Ezell detailed a bifurcated sales cycle, with the core business at 9-12 months and the newer, regulated flare monitoring business cycle shortening to just weeks. He confirmed the number of active flare units grew from 3 to 11 since the last call and that the chain of custody business is ahead of schedule. CFO Bond Clement provided specific figures, noting flare monitoring revenue grew from $100,000 in August to $600,000 in September, demonstrating rapid traction.

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SVP of Sales and Marketing Kate Houghton confirmed strong volume since mid-June and expects a solid Q3. President and CEO Brian Coleman stated that despite the AIM Act's bipartisan roots, the administration is reviewing regulations, but Hudson is reinforcing the Act's importance with the EPA and Congress. Houghton added that contractor adoption of reclamation is growing, especially after they experience the process and payment firsthand.

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Brian Coleman, an executive, responded that while upstream inventories are expected to have declined in 2024, they remain significant, warranting caution on 2025 pricing. He clarified that Hudson manages its inventory to be sold within the next season and that the dollar value is decreasing as they reload at lower costs. Coleman also confirmed that virgin HFCs still constitute the majority of the market and Hudson's supply, although Hudson's mix includes a higher percentage of reclaimed gas than others.

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CFO David Sasnett explained that Hawaii project revenue is recognized based on costs incurred, with a significant ramp-up expected to begin in Q1 2026. He and CEO Frederick McTaggart declined to disclose construction margins. McTaggart affirmed that recent retail growth is a permanent lift driven by population and business expansion, not just seasonality. Regarding the smaller projects valued at ~$20 million, the executives projected revenue recognition over a 12-month period, starting in the second half of 2025.

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Executive Frederick McTaggart and CFO David Sasnett responded. McTaggart stated the Hawaii project's construction phase is planned to start in Q4 2025. Sasnett clarified that while the development phase has a $27 million draw, revenue will be recognized based on costs incurred, and the final construction price includes inflation adjustments. Regarding the U.S. market, McTaggart described the bidding pipeline as 'quite busy' and the opportunity universe as 'getting stronger,' though competition is also increasing. For the Bahamas, he noted that smaller projects on the Family Islands, like Cat Island, can generate significant recurring revenue due to pricing scale, and that the high utilization of the Nassau plants presents a potential expansion opportunity.

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Executive Frederick McTaggart and CFO David Sasnett confirmed the project pipeline is active with many ongoing conversations, highlighting the Hawaii and Cat Island projects. McTaggart described the Cat Island project as a strategic catalyst for expansion into the Bahamas' family islands. Regarding capital allocation, McTaggart effectively ruled out share buybacks but noted the dividend would be reviewed by the board. Sasnett clarified that of the 75% increase in O&M revenue, $1.9 million was from the REC acquisition, with the remainder from new PERC contracts.

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Executive Richard Warzala explained the strategic decision to exit high-volume, commoditized automotive applications that require heavy upfront investment, focusing instead on specialty applications to improve margins. Executive James Michaud added that while they aim to improve on the 3.1x inventory turns, they are cautious due to potential short-term inventory investments needed to manage geopolitical and trade issues.

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CEO Dustin Olson confirmed that the design for the next-generation plant is solid and that the company has already purchased the majority of long-lead equipment, which will allow for rapid acceleration once financing is secured. Regarding trials, he explained that while customer qualification timelines vary, PureCycle's proven ability to make product for diverse applications creates significant sales optionality, and current progress points to a strong commercial ramp in the second half of 2025.

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Executive Dustin Olson explained the strategy is to pace production with commercial orders to prudently manage working capital, particularly feedstock costs, and to optimize plant output for specific customer needs as they are finalized. Regarding P&G, Olson declined to forecast which customer would be the largest but emphasized the recent 8-K filing as a strong vote of confidence and reiterated the goal of fulfilling P&G's full allocation by year-end.

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CEO Dustin Olson stated unequivocally 'yes,' confirming that the Ironton operation is now controllable and production can be dialed up or down as needed. Regarding compounding, he explained it creates value in two ways: by providing a higher-value, customized product for customers, and by allowing PureCycle to capture incremental margin on blended components, which enhances the overall profitability of its recycled polypropylene.

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Michael McCann (executive) confirmed the 40 hires represent about a third of the sales force and are primarily on-site account managers focused on OpEx, with a ramp-up period dependent on the account. For geographic expansion into the 20-30 targeted MSAs, he stated that while organic starts are possible, the primary strategy is through acquisition to achieve scale and leverage national customer relationships more quickly.

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Executive Michael McCann stated they have a 'long way to go' but are making progress, moving from reactive repairs to proactive capital planning with clients. He emphasized that the scarcity of specialized labor is an advantage, as clients need their expertise for complex systems, which helps build trust. McCann noted that the strategy inherently takes time to build relationships but that growth will accelerate as they penetrate local capital budgets and expand their national footprint through M&A to serve larger customers.

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Executive Michael McCann stated that growth is primarily coming from expanding relationships with existing customers through a coordinated local and national approach. He characterized the company's penetration with top clients as being in the 'first or second inning,' as they have intentionally targeted customers with significant scale for future growth. McCann confirmed they would absolutely acquire firms for specialty services to augment their portfolio. He also noted a long-term opportunity for margin expansion through a three-year plan that includes equipment upgrades, energy services, and professional consulting, building on the current OpEx-focused offerings.

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Todd Gleason (executive) acknowledged the broader concern about tariff-driven inflation but stated that customer activity remains strong. He confirmed that revenue from large power projects booked now would primarily be recognized in 2026 and 2027. He also reaffirmed that the power pipeline is substantial and consistent with prior commentary of pursuing roughly 4-5 times the historical number of jobs. Peter Johansson (executive) added that international projects are also contributing to the pipeline.

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CFO Peter Johansson clarified the $450 million energy pipeline represents the total opportunity size over eight quarters. CEO Todd Gleason noted that for Profire, recurring revenue is about 20-25%, and the primary synergy is leveraging CECO's international infrastructure to expand Profire's model, which is currently 97% North American, into new global markets.

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Chief Operating Officer Christopher Krygier explained that the CSA proposal is a FERC-inspired formula for annual rate adjustments based on updated financials, intended to run for 5-year cycles between full rate cases to reduce regulatory lag. President and CEO Ron Fleming clarified that a 'notice to proceed' from Procter & Gamble initiates the design and permit phase for new infrastructure, with a subsequent 'notice to construct' leading to a 2-to-3-year process before revenue generation.

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Ron Fleming, President and CEO, stated that recent political shifts would likely accelerate Arizona's existing economic development boom. He noted that growth is pushing to outlying areas due to housing affordability and better access to large-scale power infrastructure for new manufacturing facilities. Michael Liebman, CFO, specified that the Buckeye premium was just under $920,000 for Q3 2024, a 25% increase year-over-year, bringing the year-to-date total to $2.2 million.

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President & COO John Pawlowski and CFO Bryan Giles confirmed that consumer demand for avocados has become more resilient at higher price points, driven by adaptation to inflation and a growing base of younger consumers. Regarding the Blueberries segment, CEO Stephen Barnard and CFO Bryan Giles detailed plans to roughly double acreage with new, premium varieties over the next couple of years. Giles stated that the near-term priority for free cash flow is debt reduction, after which returning capital to shareholders will be considered.

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CFO Bryan Giles explained that Q3 margin improvement was primarily driven by strong performance and astute buy-sell management in the Marketing segment, rather than cost savings. He noted that cost-cutting in the International Farming segment successfully mitigated the impact of lower volumes, establishing a lower cost base for future growth. President and COO John Pawlowski added that new internal processes enabled agile execution and expressed excitement about future growth from sales, marketing, and the expanding mango business. CEO Stephen Barnard concluded that the farming outlook is positive and the mango category is leveraging existing assets effectively.

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