Hello, everyone, and welcome to the Advanced Emissions Solutions Second Quarter 2022 Earnings Call. Thank you for your patience. My name is Daisy, and I'll be coordinating today's call. I would now like to hand the call over to your host, Ryan Coleman, with Investor Relations to begin. Sir Ryan, please go ahead.

Thank you, Daisy, and good morning, everyone, and thank you for joining us today for our second quarter 2022 earnings results call. With me on the call today are Greg Marken, Chief Executive Officer, President and Treasurer; as well as Morgan Fields, Chief Accounting Officer. This call is being webcasted live within the Investors section of our website, and a downloadable version of today's presentation is available there as well. A webcast replay will also be available on the site, and you can contact Alpha IR for Investor Relations support at (312) 445-2870. Let me remind you that the presentation and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act. These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future results, performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include, but are not limited to, those factors identified on Slide 2 of today's slide presentation, in our Form 10-Q for the quarter ended June 30, 2022, and other filings with the Securities and Exchange Commission. Except as expressly required by securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments or changed circumstances or for any other reason. In addition, it is especially important to review the presentation and today's remarks in conjunction with the GAAP references in the financial statements. So with that, I'd like to turn the call over to Greg.

Thank you, Ryan, and thanks to everyone for joining us this morning. We delivered yet another strong quarter of consumables revenue growth as our Red River plant continues to operate at high utilization rates. Favorable macroeconomic dynamics continue to support strong demand for our activated carbon products. Our production volume once again exceeded plan, resulting in a stronger and more agile inventory position, thus allowing us to continue to proactively address tight supply conditions and global supply chain challenges. While we continue to face margin headwinds, we are becoming more comfortable with our production volume growth and our ability to service record-high customer demand. Turning to our second quarter highlights on Slide 3. Elevated energy commodity prices for alternative fuels such as natural gas continue to drive demand for our consumables products. Our consumables revenue for the quarter was $24.7 million, which reflects year-over-year growth in excess of 41% for the second consecutive quarter. Our gross margin also improved to 19.5% compared to 15.4% in the prior year. Our second quarter production volume exceeded expectations, which is important to note since our second quarter is traditionally seasonally slower and thus is an important inventory-building period. This has allowed us to increase our inventory position in advance of moving into the warmer summer months of our seasonally strong third quarter. Our bottom line performance was slightly below breakeven as we reported a net loss of $0.3 million compared to net income of $16.6 million in 2021. Our consolidated adjusted EBITDA totaled $2.2 million compared to $21.2 million in the prior year. Keep in mind that the year-over-year variance is primarily a function of equity earnings from our investments in Tinuum Group and Tinuum Services in the prior year. However, both metrics saw solid sequential improvement when compared to the first quarter…

Thank you, Greg. Slide 4 provides a snapshot of our second quarter and 6-month financial performance. Second quarter revenues and cost of revenues were $24.7 million and $19.9 million, respectively, compared to $21.1 million and $14.7 million for the second quarter of 2021. For the 6 months ending June 30, revenues and cost of revenues were $51.1 million and $41.4 million, respectively, compared to $43.7 million and $28.7 million for the first half of 2021. The revenue improvement is primarily the result of higher sales of consumable products, which more than offset the loss of royalty earnings from the former Refined Coal segment in the prior year. Second quarter other operating expenses were $7.6 million compared to $5.9 million for the second quarter of 2021. First half other operating expenses were $15.8 million compared to $14.2 million in the prior year. The 2021 other operating expenses included a gain recognized on the change of estimate of the company's asset retirement obligations of $1.9 million. Second quarter earnings from equity method investments were $2.4 million compared to $21.4 million in the second quarter of 2021. First half earnings from equity method investments totaled $3.2 million compared to $39.7 million in 2021. The declines were the result of all remaining invested Refined Coal facilities reaching the end of their tax credit generation period as of December 31, 2021. Second quarter interest expense was $0.1 million compared to $0.5 million in the second quarter of 2021. First half interest expense was $0.2 million compared to $1.3 million in the prior year. The decrease in interest expense was primarily driven by the full repayment of the company's senior term loan during the second quarter of 2021. The company did not recognize any income tax expense or benefit for the second quarter of 2022 compared…

Thank you, Morgan. Slide 5 reflects the activated carbon growth channel and market opportunities we have been discussing where we are either currently active or have identified future growth opportunities. We possess a diversified commercial end-market mix, which is the result of considerable time and effort growing and expanding our commercial and technical relationships and conducting product tests with new potential customers in the industrial and water markets. Our team continues to build upon the progress in these adjacent markets, which are also the subject of regulatory compliance thresholds and purification standards. We continue to see strong customer interest in other growing market opportunities, utilizing both existing and developing product technologies and capabilities that may provide earnings opportunities in areas where we had not previously competed. Emerging areas that may provide these additional opportunities include our testing within the groundwater remediation market. We remain excited about this opportunity given our progress to date. Market conditions over the past 3 years have proven the best-in-class nature of our production assets. And when combined with the advantage of our vertically integrated feedstock, technology and customer -- commercial expertise have allowed us to manage industry headwinds better than most other producers. We are and expect to continue to be a leading provider of choice for these activated carbon technologies and believe that our strong financial and operating platform have us well positioned going forward. For the full year 2022, we expect our revenues to be comparable with 2021 even with the impact of no longer earning royalties with the potential for incremental growth as demand remains high for our customers and as we continue to improve our overall customer and product mix. And finally, Slide 6 outlines our priorities for 2022. Our first priority is to enhance the long-term profitability of our Red River plant and manufacturing operations. We will do this by continuing to optimize our highly efficient, low-cost manufacturing facilities. This includes driving high utilization rates and optimizing product mix to further enhance its long-term profitability. In addition, we will continue to optimize our customer mix and structurally upgrade our customer contracts with more favorable terms. This will involve ongoing improvement to pricing as well as expanding volume commitments and protections. Aside from our core focus within the activated carbon markets, we will also look to further diversify product and customer mix through ongoing investment in new product development. Lastly, we will continue to evaluate opportunities to improve our operations and earning profile. Our second priority is to utilize our cash flows and assets to drive shareholder value. We will invest organically to enhance the operating profile at Red River, and we will continue to push to conclude our strategic review in a manner that maximizes shareholder value. With that, I'll turn the call back over to Ryan to move us into Q&A.

Thanks, Greg. As we've done on past quarters, we included an invitation to submit questions ahead of time at the bottom of the conference call announcement press release as well as yesterday afternoon's earnings press release. submitted your questions, and we invite all listeners to submit their questions going forward. Our first question, roughly how much incremental revenue have you realized from transitioning utilities that had previously leveraged the production tax credits to your front-end technology?

This year, on an annualized basis, we would expect to generate incremental revenues of approximately $5 million related to those utilities that have previously utilized the front-end technology for production tax credits.

Our second question is, are you planning any additional price increases for activated carbon products? And how much volume is up for renewal before year-end that you feel confident you can renew and improve the contractual terms?

Ryan, as we've previously discussed, our contracts generally are longer term in nature with the turnover of our contractual portfolio occurring over the course of 3 to 4 years based on the general contract durations within our existing customer base. As such, we will continue to develop strong commercial and technical relationships with our customers and work to improve our overall commercial terms as contracts are renewed or new business is won.

And our final question, can you provide any additional update on the strategic review process? And how long are you willing to let this process play out?

As previously mentioned today, we are pleased with the progress of our strategic review process, and we'll hopefully be in a position to provide additional updates in the very near term. We are encouraged with both the current status of negotiations as well as the option available to us.

Thanks, Greg, and thanks again to everyone who submitted questions. I'll turn the call back to Greg for any closing remarks.

Thanks, Ryan, and thanks to everyone for joining the call this morning and for your continued support. We look forward to updating everyone next quarter.

Thank you, everyone, for joining today's call. You may now disconnect your lines, and have a lovely day.