EX-99.1 2 ea022015801ex99-1_altoin.htm PRESS RELEASE DATED NOVEMBER 6, 2024

Exhibit 99.1

 

 

 

Alto Ingredients, Inc. Reports Third Quarter 2024 Results

 

- Enters CO2 Transportation and Sequestration Agreement with Vault 44.01 -

 

Pekin, IL, November 6, 2024 – Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols, renewable fuels and essential ingredients, reported its financial results for the quarter ended September 30, 2024. In a separate press release, the company announced it entered into a CO2 Transportation and Sequestration Agreement (TSA) with Vault 44.01 to transport, inject and sequester carbon from the company’s Pekin campus into the Mt. Simon sandstone formation in Illinois.

 

Bryon McGregor, President and CEO of Alto Ingredients, said, “Our team is committed to delivering the highest quality products to our customers while improving profitability on a consistent basis. In Q3 2024, we increased the production capabilities and uptime at our Pekin campus, compared to the prior year quarter, reflecting the success of our scheduled repairs and maintenance outage in Q2. As a result, specialty alcohol sold increased by 4 million gallons compared to last year, positively shifting our sales mix. Consolidated gross profit for the quarter improved over 40% year-over-year to $6.0 million despite fluctuating market conditions.

 

“We are managing through the current market dynamics and positioning the company to leverage the opportunities presented by our unique facilities. In addition, consistent with our strategy to lower our carbon footprint, we entered into an agreement for the safe transportation and storage of our CO2 emissions from our Pekin campus. While we await EPA submission and approval, address financing and source equipment, the TSA marks a significant milestone on our path toward a more sustainable and prosperous future.”

 

Financial Results for the Three Months Ended September 30, 2024 Compared to 2023

 

●Net sales were $251.8 million, compared to $318.1 million.

 

●Cost of goods sold was $245.9 million, compared to $314.0 million.

 

●Gross profit was $6.0 million, including $3.6 million in realized gains on derivatives, compared to a gross profit of $4.2 million, including $6.2 million in realized gains on derivatives.

 

●Selling, general and administrative expenses were $7.5 million, compared to $8.5 million.

 

●Gain on sale of certain idled assets was $0.8 million, compared to none in the prior year period.

 

·Income from cash grant was $2.8 million in 2023, while none in 2024 as the USDA closed out the Biofuel Producer Program associated with the pandemic.

 

●Net loss available to common stockholders was $2.8 million, or $0.04 per share, compared to $3.8 million, or $0.05 per share.

 

●Adjusted EBITDA was positive $12.2 million, including $3.6 million in realized gains on derivatives, compared to positive $13.6 million, including $6.2 million dollars in realized gains on derivatives and $2.8 million income from cash grant.

 

 

 

 

 

 

Cash and cash equivalents were $33.6 million at September 30, 2024, compared to $30.0 million at December 31, 2023. At September 30, 2024, the company’s borrowing availability was $92.2 million including $27.2 million under the company’s operating line of credit and $65.0 million under its term loan facility, subject to certain conditions.

 

Financial Results for the Nine Months Ended September 30, 2024 Compared to 2023

 

●Net sales were $728.9 million, compared to $949.3 million.

 

●Net loss available to common stockholders was $18.2 million, or $0.25 per share, compared to $10.0 million, or $0.14 per share.

 

●Adjusted EBITDA was negative $0.8 million, including $0.9 million in realized gains on derivatives and $5.4 million in costs related to the biennial outage in the second quarter, compared to positive $17.2 million, including $4.0 million in realized gains on derivatives and the aforementioned $2.8 million USDA cash grant.

 

Third Quarter 2024 Results Conference Call

 

Management will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on Wednesday, November 6, 2024, and will deliver prepared remarks via webcast followed by a question-and-answer session.

 

The webcast for the conference call can be accessed from Alto Ingredients’ website at www.altoingredients.com. Alternatively, to receive a number and unique PIN by email, register here. To dial directly up to twenty minutes prior to the scheduled call time, please dial (833) 630-0017 domestically and (412) 317-1806 internationally. The webcast will be archived for replay on the Alto Ingredients website for one year. In addition, a telephonic replay will be available at 8:00 p.m. Eastern Time on Wednesday, November 6, 2024, through 8:00 p.m. Eastern Time on Wednesday, November 13, 2024. To access the replay, please dial (877) 344-7529. International callers should dial 00-1 412-317-0088. The pass code will be 8828903.

 

Use of Non-GAAP Measures

 

Management believes that certain financial measures not in accordance with generally accepted accounting principles (“GAAP”) are useful measures of operations. The company defines Adjusted EBITDA as unaudited consolidated net income (loss) before interest expense, interest income, provision for income taxes, asset impairments, unrealized derivative gains and losses, acquisition-related expense and depreciation and amortization expense. A table is provided at the end of this release that provides a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (loss). Management provides this non-GAAP measure so that investors will have the same financial information that management uses, which may assist investors in properly assessing the company’s performance on a period-over-period basis. Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of the company’s results as reported under GAAP.

 

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About Alto Ingredients, Inc.

 

Alto Ingredients, Inc. (NASDAQ: ALTO) produces and distributes specialty alcohols, essential ingredients and renewable fuels. Leveraging the unique qualities of its facilities, the company serves customers in a wide range of consumer and commercial products in the Health, Home & Beauty; Food & Beverage; Industry & Agriculture; Essential Ingredients; and Renewable Fuels markets. For more information, please visit www.altoingredients.com.

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

Statements and information contained in this communication that refer to or include Alto Ingredients’ estimated or anticipated future results or other non-historical expressions of fact are forward-looking statements that reflect Alto Ingredients’ current perspective of existing trends and information as of the date of the communication. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “should,” “estimate,” “expect,” “forecast,” “outlook,” “guidance,” “intend,” “may,” “might,” “will,” “possible,” “potential,” “predict,” “project,” or other similar words, phrases or expressions. Such forward-looking statements include, but are not limited to, statements concerning Alto Ingredients’ projected outlook and future performance; Alto Ingredients’ repair and maintenance programs, plant improvements and other capital projects, including its carbon capture and storage (CCS) project, and their financing, costs, timing and effects; and Alto Ingredients’ other plans, objectives, expectations and intentions. It is important to note that Alto Ingredients’ plans, objectives, expectations and intentions are not predictions of actual performance. Actual results may differ materially from Alto Ingredients’ current expectations depending upon a number of factors affecting Alto Ingredients’ business and plans. These factors include, among others adverse economic and market conditions, including for specialty alcohols, renewable fuels and essential ingredients; export conditions and international demand for the company’s products; fluctuations in the price of and demand for oil and gasoline; raw material costs, including production input costs, such as corn and natural gas; adverse impacts of inflation and supply chain constraints; and the cost, ability to fund, timing and effects of, including the financial and other results deriving from, Alto Ingredients’ repair and maintenance programs, plant improvements and other capital projects, including CCS, and other business initiatives and strategies. These factors also include, among others, the inherent uncertainty associated with financial and other projections and large-scale capital projects, including CCS; the anticipated size of the markets and continued demand for Alto Ingredients’ products; the impact of competitive products and pricing; the risks and uncertainties normally incident to the alcohol production, marketing and distribution industries; changes in generally accepted accounting principles; successful compliance with governmental regulations applicable to Alto Ingredients’ facilities, products and/or businesses; changes in laws, regulations and governmental policies, including with respect to the Inflation Reduction Act’s tax and other benefits Alto Ingredients expects to derive from CCS; the loss of key senior management or staff; and other events, factors and risks previously and from time to time disclosed in Alto Ingredients’ filings with the Securities and Exchange Commission including, specifically, those factors set forth in the “Risk Factors” section contained in Alto Ingredients’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2024.

 

Company IR and Media Contact:

 

Michael Kramer, Alto Ingredients, Inc., 916-403-2755, Investorrelations@altoingredients.com

 

IR Agency Contact:

 

Kirsten Chapman, LHA Investor Relations, 415-433-3777, Investorrelations@altoingredients.com

 

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ALTO INGREDIENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
                 
Net sales  $251,814   $318,127   $728,911   $949,315 
Cost of goods sold   245,854    313,966    717,798    931,137 
Gross profit   5,960    4,161    11,113    18,178 
Selling, general and administrative expenses   (7,510)   (8,488)   (24,403)   (24,281)
Gain on sale of assets   830    —    830    — 
Asset impairments   —    —    —    (574)
Loss from operations   (720)   (4,327)   (12,460)   (6,677)
Interest expense, net   (1,867)   (2,000)   (5,170)   (5,299)
Income from cash grant   —    2,812    —    2,812 
Other income, net   146    26    358    104 
Loss before provision for income taxes   (2,441)   (3,489)   (17,272)   (9,060)
Provision for income taxes   —    —    —    — 
Net loss  $(2,441)  $(3,489)  $(17,272)  $(9,060)
Preferred stock dividends  $(319)  $(319)  $(950)  $(946)
Net loss available to common stockholders  $(2,760)  $(3,808)  $(18,222)  $(10,006)
Net loss per share, basic and diluted  $(0.04)  $(0.05)  $(0.25)  $(0.14)
Weighted-average shares outstanding, basic and diluted   73,835    73,191    73,364    73,464 

 

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ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value)

 

ASSETS  September 30,
2024		  

December 31,
2023

 
Current Assets:        
Cash and cash equivalents  $33,591   $30,014 
Restricted cash   4,903    15,466 
Accounts receivable, net   52,038    58,729 
Inventories   48,014    52,611 
Derivative instruments   36    2,412 
Other current assets   6,568    9,538 
Total current assets   145,150    168,770 
Property and equipment, net   238,892    248,748 
Other Assets:          
Right of use operating lease assets, net   19,283    22,597 
Intangible assets, net   8,057    8,498 
Other assets   6,029    5,628 
Total other assets   33,369    36,723 
Total Assets  $417,411   $454,241 

 

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ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited, in thousands, except par value)

 

 

September 30,

2024

   December 31,
2023		 
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current Liabilities:        
Accounts payable  $17,205   $20,752 
Accrued liabilities   14,255    20,205 
Current portion – operating leases   4,440    4,333 
Derivative instruments   3,394    13,849 
Other current liabilities   5,808    6,149 
Total current liabilities   45,102    65,288 
           
Long-term debt, net   83,342    82,097 
Operating leases, net of current portion   15,740    19,029 
Other liabilities   9,302    8,270 
Total Liabilities   153,486    174,684 
           
Stockholders’ Equity:          
Preferred stock, $0.001 par value; 10,000 shares authorized; Series A: no shares issued and outstanding as of September 30, 2024 and December 31, 2023 Series B: 927 shares issued and outstanding as of September 30, 2024 and December 31, 2023   1    1 
Common stock, $0.001 par value; 300,000 shares authorized; 76,625 and 75,703 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively   77    76 
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of September 30, 2024 and December 31, 2023   —    — 
Additional paid-in capital   1,043,501    1,040,912 
Accumulated other comprehensive income   2,481    2,481 
Accumulated deficit   (782,135)   (763,913)
Total Stockholders’ Equity   263,925    279,557 
Total Liabilities and Stockholders’ Equity  $417,411   $454,241 

 

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Reconciliation of Adjusted EBITDA to Net Loss

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
(in thousands) (unaudited)  2024   2023   2024   2023 
Net loss  $(2,441)  $(3,489)  $(17,272)  $(9,060)
Adjustments:                    
Interest expense, net   1,867    2,000    5,170    5,299 
Interest income   (194)   (179)   (519)   (590)
Unrealized derivative (gains) losses   6,199    8,917    (8,079)   1,517 
Acquisition-related expense   675    700    2,025    2,100 
Asset impairments   —    —    —    574 
Depreciation and amortization expense   6,058    5,647    17,860    17,382 
Total adjustments   14,605    17,085    16,457    26,282 
Adjusted EBITDA  $12,164   $13,596   $(815)  $17,222 

 

Sales and Operating Metrics (unaudited)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
Alcohol Sales (gallons in millions)                
Pekin Campus renewable fuel gallons sold   31.1    34.4    93.6    104.4 
Western production renewable fuel gallons sold   18.0    22.2    38.2    46.6 
Third party renewable fuel gallons sold   25.2    21.9    89.3    82.4 
Total renewable fuel gallons sold   74.3    78.5    221.1    233.4 
Specialty alcohol gallons sold   22.5    18.6    69.8    56.6 
Total gallons sold   96.8    97.1    290.9    290.0 
                     
Sales Price per Gallon                    
Pekin Campus  $2.02   $2.48   $1.96   $2.46 
Western production  $2.02   $2.57   $1.94   $2.63 
Marketing and distribution  $2.17   $2.69   $2.01   $2.62 
Total  $2.06   $2.56   $1.97   $2.53 
                     
Alcohol Production (gallons in millions)                    
Pekin Campus   53.4    51.8    157.0    158.1 
Western production   19.2    22.5    37.5    47.3 
Total   72.6    74.3    194.5    205.4 
                     
Corn Cost per Bushel                    
Pekin Campus  $4.40   $6.29   $4.55   $6.72 
Western production  $5.52   $7.37   $5.69   $7.91 
Total  $4.68   $6.60   $4.76   $6.98 

 

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Sales and Operating Metrics (unaudited)       

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
Average Market Metrics                
PLATTS Ethanol price per gallon  $1.81   $2.29   $1.72   $2.32 
CME Corn cost per bushel  $3.92   $4.98   $4.23   $5.94 
Board corn crush per gallons (1)  $0.41   $0.51   $0.21   $0.20 
                     
Essential Ingredients Sold (thousand tons)                    
Pekin Campus:                    
Distillers grains   83.7    85.3    251.1    252.5 
CO2   53.5    48.9    135.9    139.0 
Corn wet feed   30.0    28.3    80.4    70.0 
Corn dry feed   26.5    22.1    65.2    67.3 
Corn oil and germ   18.8    17.8    54.1    55.6 
Syrup and other   8.0    9.2    28.6    28.5 
Corn meal   9.8    8.2    26.1    27.8 
Yeast   6.3    6.4    17.8    19.7 
Total Pekin Campus essential ingredients sold   236.6    226.2    659.2    660.4 
                     
Western production:                    
Distillers grains   116.6    144.6    250.2    307.7 
CO2   14.7    14.9    43.1    41.7 
Syrup and other   21.4    35.2    37.6    71.6 
Corn oil   2.1    2.3    4.5    5.2 
Total Western production essential ingredients sold   154.8    197.0    335.4    426.2 
                     
Total Essential Ingredients Sold   391.4    423.2    994.6    1,086.6 
                     
Essential ingredients return % (2)                    
Pekin Campus return   49.0%   44.8%   49.7%   44.1%
Western production return   28.6%   31.3%   33.0%   32.3%
Consolidated total return   42.8%   40.4%   46.0%   41.2%

 

 

(1)Assumes corn conversion of 2.80 gallons of alcohol per bushel of corn.
(2)Essential ingredients revenues as a percentage of total corn costs consumed.

 

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Segment Financials (unaudited, in thousands)

 

   Three Months Ended
September 30,		   Nine Months Ended
September 30,		 
   2024   2023   2024   2023 
Net Sales                
Pekin Campus, recorded as gross:                
Alcohol sales  $106,459   $128,554   $315,494   $388,629 
Essential ingredient sales   41,217    51,634    127,297    169,220 
Intersegment sales   321    363    927    1,120 
Total Pekin Campus sales   147,997    180,551    443,718    558,969 
 Marketing and distribution:                    
Alcohol sales, gross  $54,531   $58,805   $179,118   $215,741 
Alcohol sales, net   71    74    169    292 
Intersegment sales   2,862    3,392    8,002    8,734 
Total marketing and distribution sales   57,464    62,271    187,289    224,767 
                     
Western production, recorded as gross:                    
Alcohol sales  $36,395   $57,159   $74,084   $122,477 
Essential ingredient sales   10,408    17,841    24,184    40,614 
Intersegment sales   8    37    (122)   99 
Total Western production sales   46,811    75,037    98,146    163,190 
                     
Corporate and other   2,733    4,060    8,565    12,342 
Intersegment eliminations   (3,191)   (3,792)   (8,807)   (9,953)
Net sales as reported  $251,814   $318,127   $728,911   $949,315 
                     
Cost of goods sold:                    
Pekin Campus  $141,823   $179,995   $423,135   $546,591 
Marketing and distribution   53,553    58,051    176,676    212,923 
Western production   49,079    73,584    112,762    165,401 
Corporate and other   2,952    3,538    8,690    9,322 
Intersegment eliminations   (1,553)   (1,202)   (3,465)   (3,100)
Cost of goods sold as reported  $245,854   $313,966   $717,798   $931,137 
                     
Gross profit (loss):                    
Pekin Campus  $6,174   $556   $20,583   $12,378 
Marketing and distribution   3,911    4,220    10,613    11,844 
Western production   (2,268)   1,453    (14,616)   (2,211)
Corporate and other   (219)   522    (125)   3,020 
Intersegment eliminations   (1,638)   (2,590)   (5,342)   (6,853)
Gross profit (loss) as reported  $5,960   $4,161   $11,113   $18,178 

 

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