Operator: Thank you. We do have a question from the phone coming from the line of Gerry Sweeney with Roth Capital.
Gerry Sweeney: A lot to unpack, lots of details, so I really appreciate it. And also congratulations on obviously a great quarter. I was wondering if we could maybe take a step back, level set, and I’m not sure how much of this information you want to provide, but I’m just curious as to what your total PAC production today is? And I believe GAC will be 25 million pounds. But I just wanted to level set in terms of production and where we are today, if you’re up for that?
Bob Rasmus: Historically, we haven’t given volumes for competitive reasons. Every time I bring that subject up, Garrett Chandler, our Head of Sales, has a heart attack, and I think he’s only 32 years old, on that respect. And so it’s something that we’ll continue to discuss on the volumes on that. But I think the key thing for the PAC business is that while volumes declined slightly, the fruits of our efforts in terms of pricing enhancements and using and going to different markets than the PGI — specifically, the water market helped enhance pricing increased average sales price and margin. As it relates to what we expect for granular activated turbine going forward, we’ve said and we maintain 25 million pounds of capacity coming online when we complete the Red River expansion at the end of this year.
As I mentioned in my remarks, I believe that some of the things we’ve done will lead to greater efficiencies that will allow us to produce greater than 25 million pounds of granular activated carbon. However, when I talk about payback in three years or less and the returns associated with the granular business, we’re assuming only the 25 million pounds of granular activated carbon. We’ve given no credit for potential increases in GAC volumes. We assume pricing is in line with the current customer discussions and we assume that the foundational PAC business is a net cash contributor.
Gerry Sweeney: And I figured PAC was a little bit of a trade secret per se, but you did answer my next question on GAC with originally 25 million, but there’s potential upside to that. Sticking with PAC just for a moment, and I think you mentioned — again, I was writing a lot of the stuff down here. It sounded like there was 24% of volumes and these are my words not yours, so I apologize if it’s incorrect. 24% of volumes were negative contracts and 14% going to 2% in, I think, March or April. So does this imply that there’s potentially a little bit more upside to the PAC business in the first quarter then it sort of hits a steady state going forward? Am I reading that correctly?
Bob Rasmus: So at the end of the first quarter, we’ll have one remaining negative margin contract and that will be gone by the end of this year for that one. Two, there’s always work to be done. While we’re pleased with the progress we’ve made we’re far from satisfied or at least I’m far from satisfied, and I hope everybody else is far from satisfied and where we’re going. And so while, as I mentioned earlier, that there are some headwinds we’re facing as it relates to natural gas pricing and demand in the PGI, we’re making excellent progress in the water market that we think will offset that and potentially more than offset the headwinds we’re facing in the natural gas pricing.
Gerry Sweeney: Switching gears to GAC. Corbin commercialization in 2Q, Red River complete commercialization in 4Q. I think Corbin was actually complete, commercialization in 2Q. But really, Red River is — I mean, my focus here, if you’re completing commercialization in 4Q, that means maybe end of 3Q, the plant, you start running some production runs running through the processes. What is sort of the next major hurdle with Red River to get you to that…
Bob Rasmus: Really, the hurdle is I’m going to under-promise and hopefully over-deliver as it relates to Red River. But really start commissioning Red River in the fourth quarter and late in the fourth quarter actually start production with first deliveries very late in the fourth quarter or the beginning of the first quarter of next year.
Gerry Sweeney: And I’ve done a bunch of channel checks pricing in the water market is great. I know a huge amount of opportunity coming down the pipe as to with potential EPA regulations, let’s say potential, but there will be something. And I know different water groups are taking different approaches. Some are wait and see what those regulations are and some are actually buying — putting up contracts now. I’m just curious as to maybe the momentum you’re seeing on potential contracts inbounds and how does that sort of fill out with that 25 million of production?
Bob Rasmus: So I mean I’m going to — so what you’re basically saying is what’s my confidence level in contracting for GAC and the terms. And so I want to — really, my confidence is based on several factors, Gerry. The first is fundamentals, the market’s undersupplied, demand is growing. And this is, as you mentioned before, any PFAS regulations are enacted. The second is the results we’re seeing in regards to our prequalification testing done with prospective customers. The feedback has been extremely positive. And as I mentioned during the call, all the completed testing is either moved on to the next phase of testing or to actual contract discussions and third is the conversations with those customers. Users are interested in not only finding supply to meet their demands, but new supply.