Operator: Our next question comes from the line of Jerry Revich with Goldman Sachs.
Jerry Revich: Mike, going forward you starting a new streak here starting today. It’s been quite a run.
Mike Battles: I was wondering who was going to bring it.
Jerry Revich: Can I ask on Kimball, nice to hear that the plant is coming online nicely. Can you update us on how quickly you expect to ramp up the earnings power of that plant over what time horizon? Can you hit the type of numbers we were talking about at the Analyst Day now that we’re coming closer to that date?
Eric Gerstenberg: Yes. Jerry, Eric here. As we go into the tail end of 2024, we’ll begin to bring online and process through many of the backlog of drums. As we go into 2025, we’d expect that we’d be in that 20,000 to 40,000 tons range, beating through that unit as we go forward and ramp up from there. Our expected overall operational utilization should be in that 50,000 to 55,000 tons over the course of 2 to 3 years.
Jerry Revich: That’s a quick start. Okay. Great. And then in terms of just to expand on the Group III economics. Can you just say more, if you don’t mind, what’s the CapEx per gallon, just to expand on that opportunity set? And I don’t know if you’re willing to venture an estimate on looking across your footprint. Where do you think the facilities have an out space and capability set to roll out if you do decide to roll it out across the portfolio in SKSS?
Mike Battles: Yes, Jerry. So I’ll start on this, this is Mike. So I’d say that the CapEx required is not a ton of CapEx to kind of drive Group III. It’s really getting a high-quality base oil, high-quality used motor oil to derive that Group III quality. So that’s the challenge, right? So you want to try to make sure you’re capturing high-quality Group III oil and getting it into our plant and allowing it to run and uninterrupted. So you can’t mix Group II with Group III, it gets contaminated, so you’ve got to be very careful on that. So it’s really a lot of process change and a lot — maybe some other things like that. I’m not sure it’s going to be a huge CapEx item. I don’t know, Eric, you want to add anything to that?
Eric Gerstenberg: No, I think that’s fair, Mike. I think we have some minor changes to do. We have capacity that we’ve set aside a few of our smaller plants to be able to properly aggregate and run those units dedicated to making it Group III. And we’ll be rolling that out as we go through 2024 and into 2025.
Mike Battles: So Jerry, I don’t think it’s going to be a huge cost item to get to that answer, but I do think it’s going to be a great bridge as we try to bridge back to the $300 million. I think that’s going to be a great bridge to kind of get us there.
Jerry Revich: And can I ask the blue-sky scenario, how many gallons can we produce, what’s our best sense?
Mike Battles: Yes. We said on that. We got asked that earlier, 25 million gallons we thought would be a good goal to try to get to that answer. That’s going to take some work, but that’s a very reasonable goal.
Jerry Revich: Across the footprint. Okay.
Operator: Our next question comes from the line of Noah Kaye with Oppenheimer.
Noah Kaye: [indiscernible].
Operator: Mr. Kaye, you need to disconnect the other line, you were getting an echo.
Noah Kaye: All right. I’ll [indiscernible].
Operator: Our next question comes from the line of James Ricchiuti with Needham.
James Ricchiuti: Apologies, I joined the call a little bit late. You may have covered this. Did you say what Thompson added and whether you’re on track with your expectations for full year adjusted EBITDA in ’23 for this business?
Eric Dugas: Yes. We were — this is Eric Dugas speaking. We were on track for — to add an incremental about $12 million was the budget we had, a target for Thompson in total, and that’s kind of what we’re trending towards in the year.
James Ricchiuti: Got it. And a follow-up question for me is just I wonder if you can give us an update on some of the initiatives you have with respect to PFAS.
Eric Gerstenberg: Yes, James, this is Eric. I’ll take that. We continue to really focus on our total solutions portfolio for PFAS. We’ve implemented successfully with our field crews being able to perform sampling. We perform analysis within our lab network. We’re bringing that online to help our customers get a baseline understanding of their PFAS contamination levels. We’ve seen our pipeline continue to grow around not only drinking water, industrial waters as well as remediation events. And through our network, we continue to believe along with our incineration testing that we’ve accomplished that we’ve shown that incineration destruction, high-temperature, rectal thermal and incineration through our units is really the preferred method, and we’ve communicated that throughout our customer network.
And so our total solutions of sampling, analysis, drinking water, industrial water, remediation, transportation, disposal, leveraging our incineration network, our landfills and our water treatment plants, continues to be a real successful outlook for us as our pipeline grows.
James Ricchiuti: Any change in your expectations with respect to this as you look out over the next year? And again, I know you’re not giving guidance for ’24, but just a small part of your business. I’m just wondering if this is moving perhaps more slowly or if you’re seeing the traction with your customers with respect to [indiscernible].
Eric Gerstenberg: Yes. I would say, James, there’s still much to come with the regulatory parameters to be laid out, but I would tell you that our pipeline has grown. And that — we continue to be optimistic as we go into 2024 about how leveraging our total solutions for all of our customer base, which is quite diverse, as you know, will really yield rewards for us across the network.
