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Alto Ingredients, Inc. Reports Fourth Quarter and Year-end 2024 Results

1. ALTO expects $8 million annual savings from recent cost-cutting measures. 2. Acquisition of liquid CO2 processor aims for quick asset payback and synergies. 3. Company faced significant asset impairments over $30 million in Q4 2024. 4. Net sales dropped substantially compared to 2023 while loss increased. 5. ALTO exploring strategic transactions for alignment of long-term value potential.

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$1.5703/06 10:11 PM EDTLatest Updated
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FAQ

Why Bullish?

Cost savings could stabilize financials; acquisition provides growth avenues, despite past losses.

How important is it?

Current restructuring and acquisition initiatives may attract investor confidence, impacting ALTO's long-term position.

Why Long Term?

Implemented strategies will take time to reflect in performance metrics and valuations.

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- Implemented Cost Savings Expected to Yield Approximately $8 Million Annually - - Integrated Accretive Acquisition of a Beverage-grade Liquid CO2 Processor -- Considering Asset Sales, a Merger or Other Strategic Transactions - PEKIN, Ill., March 05, 2025 (GLOBE NEWSWIRE) -- 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 and year ended December 31, 2024. Bryon McGregor, President and Chief Executive Officer of Alto Ingredients said, “During the fourth quarter of 2024 and the first quarter of 2025, we implemented cost saving initiatives, including cold idling our Magic Valley plant, and lowering total company headcount by 16%. We expect these staffing reductions to save approximately $8 million annually beginning in the second quarter of 2025. While ensuring high customer service, we rightsized the company to our smaller organizational footprint to position for long-term sustainable growth. “On January 1st, we acquired a beverage-grade liquid carbon dioxide processor adjacent to our Columbia site. Bolstering economics and increasing asset valuation, this immediately accretive transaction has a compelling payback of less than two years as well as opportunities for cost synergies and expanded production. At our Pekin Campus, we continue to diligently pursue opportunities to optimize carbon, which has been historically underutilized and undervalued. Lastly, with the assistance of our financial and legal advisors, we are considering a broad range of options, including asset sales, a merger or other strategic transactions to better align the long-term value potential of the company.” Chief Financial Officer Rob Olander added, “Our restructuring has improved Alto’s financial position going forward. In doing so, during the fourth quarter of 2024, we recognized over $30 million in asset impairments and prior acquisition-related expenses, which reset our base. Combining our reduced expense run rate with our improved performance at the Pekin wet mill, our synergistic acquisition of premium liquid CO2 processing and our entry into the European market, we are optimistic about 2025.” Financial Results for the Three Months Ended December 31, 2024 Compared to 2023 Net sales were $236.3 million, compared to $273.6 million.Cost of goods sold was $237.7 million, compared to $276.2 million.Gross loss was $1.4 million, including $3.5 million in realized losses on derivatives, compared to a gross loss of $2.5 million, including $2.3 million in realized losses on derivatives.Selling, general and administrative expenses were $7.4 million, compared to $7.8 million.Expenses related to the Eagle Alcohol acquisition were $5.7 million, compared to $0.7 million.Asset impairments were $24.8 million comprised of $21.4 million related to Magic Valley and $3.4 million related to Eagle Alcohol, compared to $6.0 million related to Eagle Alcohol.Net loss attributable to common stockholders was $42.0 million, or $0.57 per share, compared to $19.3 million, or $0.26 per share.Adjusted EBITDA was negative $7.7 million, including $3.5 million in realized losses on derivatives, compared to positive $3.5 million, including $2.3 million in realized losses on derivatives. Cash and cash equivalents were $35.5 million at December 31, 2024, compared to $30.0 million at December 31, 2023. At December 31, 2024, the company’s borrowing availability was $88.1 million including $23.1 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 Twelve Months Ended December 31, 2024 Compared to 2023 Net sales were $965.3 million, compared to $1,222.9 million.Net loss attributable to common stockholders was $60.3 million, including $32.5 million in expenses related to asset impairments and the company’s Eagle Alcohol acquisition, or $0.82 per share. This compares to $29.3 million, including $6.5 million in net expenses related to asset impairments, the company’s Eagle Alcohol acquisition and a USDA cash grant, or $0.40 per share.Adjusted EBITDA was negative $8.5 million, including $2.5 million in realized losses on derivatives and $5.4 million in costs related to the biennial outage in the second quarter, compared to positive $20.8 million, including $1.6 million in realized gains on derivatives. Fourth Quarter 2024 Results Conference CallManagement will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on Wednesday, March 5, 2025, 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, March 5, 2025, through 8:00 p.m. Eastern Time on Wednesday, March 12, 2025. To access the replay, please dial (877) 344-7529. International callers should dial 00-1 412-317-0088. The pass code will be 5306551. Use of Non-GAAP MeasuresManagement 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. About Alto Ingredients, Inc.Alto Ingredients, Inc. (NASDAQ: ALTO) is a leading producer and distributor of specialty alcohols, renewable fuels and essential ingredients. 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, including the timing and effects of its cost savings initiatives and its acquisition of a liquid carbon dioxide processor adjacent to its Columbia plant; Alto Ingredients’ capital projects, including its carbon capture and storage (CCS) project and opportunities to optimize carbon; 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 renewable fuels, specialty alcohols 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 November 8, 2024. Company IR and Media Contact:Michael Kramer, Alto Ingredients, Inc., 916-403-2755Investorrelations@altoingredients.com IR Agency Contact: Kirsten Chapman, Alliance Advisors Investor Relations, 415-433-3777altoinvestor@allianceadvisors.com ALTO INGREDIENTS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited, in thousands, except per share data)    Three Months EndedDecember 31, Years EndedDecember 31,  2024   2023   2024   2023      Net sales$236,347  $273,625  $965,258  $1,222,940 Cost of goods sold 237,738   276,150   955,536   1,207,287 Gross profit (loss) (1,391)  (2,525)  9,722   15,653 Selling, general and administrative expenses (7,358)  (7,823)  (29,736)  (29,864)Acquisition-related expenses (5,676)  (700)  (7,701)  (2,800)Gain (loss) on sale of assets —   (153)  830   (293)Asset impairments (24,790)  (5,970)  (24,790)  (6,544)Loss from operations (39,215)  (17,171)  (51,675)  (23,848)Interest expense, net (2,474)  (2,126)  (7,644)  (7,425)Income from cash grant —   —   —   2,812 Other income, net 150   449   508   553 Loss before provision for income taxes (41,539)  (18,848)  (58,811)  (27,908)Provision for income taxes 173   97   173   97 Net loss$(41,712) $(18,945) $(58,984) $(28,005)Preferred stock dividends$(319) $(319) $(1,269) $(1,265)Net loss attributable to common stockholders$(42,031) $(19,264) $(60,253) $(29,270)Net loss per share, basic and diluted$(0.57) $(0.26) $(0.82) $(0.40)Weighted-average shares outstanding, basic and diluted 73,835   72,969   73,482   73,339                  ALTO INGREDIENTS, INC.CONSOLIDATED BALANCE SHEETS(unaudited, in thousands, except par value) ASSETSDecember 31,2024 December 31,2023Current Assets:  Cash and cash equivalents$35,469 $30,014Restricted cash 742  15,466Accounts receivable, net 58,217  58,729Inventories 49,914  52,611Derivative instruments 3,313  2,412Other current assets 5,463  9,538Total current assets 153,118  168,770Property and equipment, net 214,742  248,748Other Assets:   Right of use operating lease assets, net 20,553  22,597Intangible assets, net 4,509  8,498Other assets 8,516  5,628Total other assets 33,578  36,723Total Assets$401,438 $454,241 ALTO INGREDIENTS, INC. CONSOLIDATED BALANCE SHEETS (CONTINUED)(unaudited, in thousands, except par value) LIABILITIES AND STOCKHOLDERS’ EQUITYDecember 31,2024 December 31,2023Current Liabilities:  Accounts payable$20,369  $20,752 Accrued liabilities 24,214   20,205 Current portion – operating leases 4,851   4,333 Derivative instruments 1,177   13,849 Other current liabilities 7,193   6,149 Total current liabilities 57,804   65,288         Long-term debt, net 92,904   82,097 Operating leases, net of current portion 16,913   19,029 Other liabilities 8,754   8,270 Total Liabilities 176,375   174,684         Stockholders’ Equity:  Preferred stock, $0.001 par value; 10,000 shares authorized;     Series A: no shares issued and outstanding as of     December 31, 2024 and 2023     Series B: 927 shares issued and outstanding as of     December 31, 2024 and 2023 1   1 Common stock, $0.001 par value; 300,000 shares authorized;    76,565 and 75,703 shares issued and outstanding as of    December 31, 2024 and 2023, respectively 77   76 Non-voting common stock, $0.001 par value; 3,553 shares authorized;    1 share issued and outstanding as of December 31, 2024 and 2023 —   — Additional paid-in capital 1,044,176   1,040,912 Accumulated other comprehensive income 4,975   2,481 Accumulated deficit (824,166)  (763,913)Total Stockholders’ Equity 225,063   279,557 Total Liabilities and Stockholders’ Equity$401,438  $454,241  Reconciliation of Adjusted EBITDA to Net Loss  Three Months EndedDecember 31, Years EndedDecember 31,(in thousands) (unaudited)2024 2023 2024 2023Net loss$(41,712) $(18,945) $(58,984) $(28,005)Adjustments:    Interest expense 2,474   2,126   7,644   7,425 Interest income (112)  (265)  (689)  (854)Unrealized derivative (gains) losses (5,495)  8,162   (13,574)  9,679 Acquisition-related expense 5,676   700   7,701   2,800 Provision for income taxes 173   97   173   97 Asset impairments 24,790   5,970   24,790   6,544 Depreciation and amortization expense 6,548   5,698   24,408   23,080 Total adjustments 34,054   22,488   50,453   48,771 Adjusted EBITDA$(7,658) $3,543  $(8,531) $20,766  Segment Financials (unaudited, in thousands)  Three Months EndedDecember 31, Years EndedDecember 31,  2024   2023   2024   2023 Net Sales               Pekin Campus, recorded as gross:               Alcohol sales$100,216  $113,588  $415,710  $502,217 Essential ingredient sales 42,011   48,483   169,308   217,702 Intersegment sales 316   307   1,243   1,427 Total Pekin Campus sales 142,543   162,378   586,261   721,346 Marketing and distribution:               Alcohol sales, gross$37,230  $46,844  $216,295  $262,587 Alcohol sales, net 60   73   229   365 Intersegment sales 2,831   2,920   10,833   11,654 Total marketing and distribution sales 40,121   49,837   227,357   274,606                 Western production, recorded as gross:               Alcohol sales$41,306  $44,496  $115,389  $166,971 Essential ingredient sales 12,769   16,650   36,953   57,264 Intersegment sales —   35   (122)  134 Total Western production sales 54,075   61,181   152,220   224,369      Corporate and other 2,755   3,491   11,374   15,834 Intersegment eliminations (3,147)  (3,262)  (11,954)  (13,215)Net sales as reported$236,347  $273,625  $965,258  $1,222,940 Cost of goods sold:               Pekin Campus (1) (2)$139,899  $163,497  $ 563,033   $710,089 Marketing and distribution 36,348   46,311   213,023   259,234 Western production (1) 59,449   65,042   172,209   230,444 Corporate and other 3,592   2,802   12,285   12,122 Intersegment eliminations (1,550)  (1,502)  (5,014)  (4,602)Cost of goods sold as reported$237,738  $276,150  $955,536  $ 1,207,287 Gross profit (loss):               Pekin Campus$2,644  $(1,119) $ 23,228  $11,257 Marketing and distribution 3,773   3,526   14,334    15,372 Western production (5,374)  (3,861)  (19,989 )  (6,075)Corporate and other (837)  689   (911 )   3,712 Intersegment eliminations (1,597)  (1,760)  (6,940 )   (8,613)Gross profit (loss) as reported$(1,391) $(2,525) $ 9,722   $15,653  (1) – includes depreciation and amortization expense(2) - includes unrealized gain (loss) on derivatives Sales and Operating Metrics (unaudited)  Three Months EndedDecember 31, Years EndedDecember 31,  2024   2023   2024   2023Alcohol Sales (gallons in millions)     Pekin Campus renewable fuel gallons sold 32.1  31.8  125.7  136.2Western production renewable fuel gallons sold 22.3  20.4  60.5  67.0Third party renewable fuel gallons sold 19.0  20.2  108.3  102.6Total renewable fuel gallons sold 73.4  72.4  294.5  305.8Specialty alcohol gallons sold 21.7  20.1  91.5  76.7Total gallons sold 95.1  92.5  386.0  382.5      Sales Price per Gallon     Pekin Campus$1.89 $2.23 $1.95 $2.40Western production$1.86 $2.18 $1.91 $2.49Marketing and distribution$1.96 $2.32 $2.00 $2.56Total$1.88 $2.24 $1.95 $2.47      Alcohol Production (gallons in millions)     Pekin Campus 55.4  51.6  212.4  209.7Western production 21.2  20.8  58.7  68.1Total 76.6  72.4  271.1  277.8      Corn Cost per Bushel     Pekin Campus$4.17 $5.10 $4.45 $6.32Western production$5.79 $6.44 $5.73 $7.45Total$4.63 $5.46 $4.72 $6.58      Average Market Metrics     PLATTS Ethanol price per gallon$1.60 $1.96 $1.69 $2.22CME Corn cost per bushel$4.26 $4.76 $4.24 $5.64Board corn crush per gallons (1)$0.08 $0.26 $0.18 $0.21      Essential Ingredients Sold (thousand tons)     Pekin Campus:     Distillers grains 85.3  80.2  336.4  332.7CO2 52.7  43.4  188.6  182.4Corn wet feed 41.4  25.0  121.8  95.0Corn dry feed 22.0  23.3  87.2  90.6Corn oil and germ 21.0  18.2  75.1  73.8Syrup and other 10.0  12.7  38.6  41.2Corn meal 9.3  9.0  35.4  36.8Yeast 5.4  6.2  23.2  25.9Total Pekin Campus essential ingredients sold 247.1  218.0  906.3  878.4           Western production:     Distillers grains 144.3  152.0  394.5  459.7CO2 14.6  13.8  57.7  55.5Syrup and other 17.2  47.5  54.8  119.1Corn oil 3.1  2.8  7.6  8.0Total Western production essential ingredients sold 179.2  216.1  514.6  642.3      Total Essential Ingredients Sold 426.3  434.1  1,420.9  1,520.7            Essential ingredients return % (2)     Pekin Campus return 49.5%  51.9%  49.7%  45.7%Western production return 30.3%  36.3%  32.0%  33.4%Consolidated total return 43.1%  46.8%  45.2%  42.4%       ________________(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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