Segments

12 Months Ended

Dec. 31, 2023

Segments [Abstract]

SEGMENTS

5. SEGMENTS.

The Company reports its financial and operating performance in three segments: (1) Pekin Campus production, which includes the production and sale of alcohols and essential ingredients produced at the Company’s Pekin, Illinois campus, (2) marketing and distribution, which includes marketing and merchant trading for Company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties, and (3) Western production, which includes the production and sale of fuel-grade ethanol and essential ingredients produced the Company’s two western production facilities on an aggregated basis, none of which are individually so significant to be considered a separately reportable segment.

Income before provision for income taxes includes management fees charged by Alto Ingredients to the segments. The Pekin Campus production segment incurred $5,280,000, $5,046,000 and $4,344,000 in management fees for the years ended December 31, 2023, 2022 and 2021, respectively. The marketing and distribution segment incurred $3,960,000, $3,840,000 and $3,480,000 in management fees for the years ended December 31, 2023, 2022 and 2021, respectively. The Western production segment incurred $2,640,000, $2,400,000 and $1,950,000 in management fees for the years ended December 31, 2023, 2022 and 2021, respectively. Corporate and other includes the results of Eagle Alcohol and selling, general and administrative expenses, consisting primarily of corporate employee compensation, professional fees and overhead costs not directly related to a specific operating segment.

During the normal course of business, the segments do business with each other. The preponderance of this activity occurs when the Company’s marketing and distribution segment markets alcohol produced by the production segments for a marketing fee, as discussed in Note 4. These intersegment activities are considered arms’-length transactions. Consequently, although these transactions impact segment performance, they do not impact the Company’s consolidated results since all revenues and corresponding costs are eliminated upon consolidation.

For the years ended December 31, 2023, 2022 and 2021, capital expenditures incurred by the Pekin Campus segment were approximately $17.7 million, $25.7 million and $14.3 million, and capital expenditures incurred by the Western production segment were approximately $11.8 million, $12.3 million $2.1 million, respectively.

The following tables set forth certain financial data for the Company’s operating segments (in thousands):

	Years Ended December 31,
Net Sales:	2023			2022			2021
Pekin Campus production, recorded as gross:
Alcohol sales	$	502,217		$	521,273		$	498,195
Essential ingredient sales		217,702			225,871			189,535
Intersegment sales		1,427			1,212			1,193
Total Pekin Campus sales		721,346			748,356			688,923
Marketing and distribution:
Alcohol sales, gross	$	262,587		$	227,626		$	379,422
Alcohol sales, net		365			1,225			1,753
Intersegment sales		11,654			12,459			10,061
Total marketing and distribution sales		274,606			241,310			391,236
Western Production, recorded as gross:
Alcohol sales	$	166,971		$	253,605		$	107,931
Essential ingredient sales		57,264			90,209			31,056
Intersegment sales		134			22			964
Total Western production sales		224,369			343,836			139,951
Corporate and other		15,834			15,812			—
Intersegment eliminations		(13,215	)		(13,693	)		(12,218	)
Net sales as reported	$	1,222,940		$	1,335,621		$	1,207,892
Cost of goods sold:
Pekin Campus production	$	710,088		$	772,755		$	638,371
Marketing and distribution		259,234			229,288			371,371
Western production		230,445			353,775			136,401
Corporate and other		12,122			12,167			—
Intersegment eliminations		(4,602	)		(4,814	)		(6,035	)
Cost of goods sold as reported	$	1,207,287		$	1,363,171		$	1,140,108
Income (loss) before provision for income taxes:
Pekin Campus production	$	(1,560	)	$	(27,376	)	$	41,622
Marketing and distribution		7,644			3,748			11,756
Western production		(13,506	)		(7,209	)		(3,762	)
Corporate and other		(20,486	)		(8,835	)		(2,065	)
	$	(27,908	)	$	(39,672	)	$	47,551
Depreciation and amortization expense:
Pekin Campus production	$	19,789		$	19,136		$	17,352
Western production		2,381			5,085			5,890
Corporate and other		910			874			50
	$	23,080		$	25,095		$	23,292
Interest expense, net of capitalized interest:
Pekin Campus production	$	(207	)	$	(381	)	$	756
Marketing and distribution		822			1,658			963
Western production		1,164			(339	)		167
Corporate and other		5,646			889			1,701
	$	7,425		$	1,827		$	3,587

The following table sets forth the Company’s total assets by operating segment (in thousands): 

	December 31, 2023		December 31, 2022
Total assets:
Pekin Campus production	$	251,048		257,089
Marketing and distribution		101,196		114,755
Western production		57,533		51,886
Corporate and other		44,464		54,591
	$	454,241	$	478,321