-
Alto Ingredients, Inc. Reports Second Quarter 2023 Results
المصدر: Nasdaq GlobeNewswire / 07 أغسطس 2023 16:05:08 America/New_York
- Delivered net income, positive Adjusted EBITDA and positive operating cash flow, while making significant capital expenditures to support business transformation -
- Expects Positive Adjusted EBITDA in Q3 2023 -
PEKIN, Ill., Aug. 07, 2023 (GLOBE NEWSWIRE) -- Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols and essential ingredients, reported its financial results for the quarter ended June 30, 2023.
“We continue to pursue opportunities to maximize value through capital investments and onboarding strategic partners that share our vision. Our strategy is coming to fruition,” said Bryon McGregor, President and CEO of Alto Ingredients. “In the second quarter of 2023, improved ethanol crush margins complemented by favorable economics from our high-quality alcohol and essential ingredients delivered strong profitability and positive operating cash flow. Based on current trends, we expect to post positive Adjusted EBITDA in the third quarter of 2023 as well.
“We have accelerated our investments in longer-term capital projects to produce more high-quality products, including grain neutral spirits, corn oil and high protein, as well as to improve plant efficiency and reliability. Looking ahead, we plan to advance our business transformation with a natural gas pipeline, biogas conversion, enhanced cogeneration capabilities, primary yeast and carbon capture and sequestration. We have $137 million in cash and excess borrowing availability to support our business operations and near-term growth initiatives. For our longer-term projects, we continue to hold productive discussions with strategic partners, and we will judiciously finance capital needs for those projects, as appropriate. With these investments, we expect to increase annualized EBITDA incrementally by over $65 million by the end of 2025, with the completion of our near-term projects, and by approximately $125 million by the end of 2026, when our carbon capture and sequestration, cogeneration, and other long-term initiatives are fully realized.”
Financial Results for the Three Months Ended June 30, 2023 Compared to 2022
- Net sales were $317.3 million, compared to $362.2 million.
- Cost of goods sold was $300.1 million, compared to $353.3 million.
- Gross profit was $17.2 million, compared to $8.8 million.
- Selling, general and administrative expenses were $7.9 million, compared to $9.0 million.
- Operating income was $9.3 million, compared to an operating loss of $152,000.
- Net income available to common stockholders was $7.2 million, or $0.10 per diluted share, compared to $21.5 million, which included a $22.7 million USDA cash grant, or $0.29 per diluted share.
- Adjusted EBITDA was $15.5 million, compared to $29.9 million, which included a $22.7 million USDA cash grant.
Cash and cash equivalents were $22.7 million at June 30, 2023, compared to $36.5 million at December 31, 2022. At June 30, 2023, the company’s borrowing availability included $49 million under its operating line of credit and $40 million under its term loan facility with an option to request up to an additional $25 million under the facility.
Financial Results for the Six Months Ended June 30, 2023 Compared to 2022
- Net sales were $631.2 million, compared to $670.3 million.
- Cost of goods sold was $617.2 million, compared to $656.7 million.
- Gross profit was $14.0 million, compared to $13.6 million.
- Selling, general and administrative expenses were $15.8 million, compared to $16.6 million.
- Operating loss was $2.4 million, compared to $3.0 million.
- Net loss available to common stockholders was $6.2 million, or $0.08 per diluted share, compared to net income available to common stockholders of $18.6 million, including the $22.7 million USDA cash grant, or $0.26 per diluted share.
- Adjusted EBITDA was $11.0 million, compared to $34.3 million, including the aforementioned cash grant.
Second Quarter 2023 Results Conference Call
Management will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on Monday, August 7, 2023, 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 twenty minutes prior to the scheduled call time, 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 Monday, August 7, 2023 through 8:00 p.m. Eastern Time on Monday, August 14, 2023. To access the replay, please dial 877-344-7529. International callers should dial 00-1 412-317-0088. The pass code will be 6298351.
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, loss on extinguishment of debt, acquisition-related expense, fair value adjustments, 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. (ALTO) is a leading producer and distributor of specialty alcohols and essential ingredients. The company is focused on products for four key markets: Health, Home & Beauty; Food & Beverage; Essential Ingredients; and Renewable Fuels. The company’s customers include major food and beverage companies and consumer products companies. 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’ plant improvement and other capital projects and other business initiatives and strategies, and their financing, costs, timing and effects, including, but not limited to, EBITDA and/or Adjusted EBITDA that Alto Ingredients’ expects to generate as a result of its projects, initiatives and strategies; estimates of EBITDA or Adjusted EBITDA 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 fuel-grade ethanol, 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; and the cost, ability to fund, timing and effects of, including the financial and other results deriving from, Alto Ingredients’ plant improvement and other capital projects and other business initiatives and strategies. These factors also include, among others, the inherent uncertainty associated with financial and other projections; 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 specialty 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; 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 May 9, 2023.Company IR and Media Contact:
Michael Kramer, Alto Ingredients, Inc., 916-403-2755, Investorrelations@altoingredients.comIR Agency Contact:
Kirsten Chapman, LHA Investor Relations, 415-433-3777, Investorrelations@altoingredients.comALTO INGREDIENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Net sales $ 317,297 $ 362,189 $ 631,188 $ 670,307 Cost of goods sold 300,116 353,345 617,171 656,690 Gross profit 17,181 8,844 14,017 13,617 Selling, general and administrative expenses 7,911 8,996 15,793 16,625 Asset impairments — — 574 — Income (loss) from operations 9,270 (152 ) (2,350 ) (3,008 ) Interest expense, net (1,734 ) (319 ) (3,299 ) (519 ) Income from cash grant — 22,652 — 22,652 Other income (expense), net 59 (66 ) 78 388 Income (loss) before provision for income taxes 7,595 22,115 (5,571 ) 19,513 Provision for income taxes — — — — Net income (loss) $ 7,595 $ 22,115 $ (5,571 ) $ 19,513 Preferred stock dividends $ (315 ) $ (315 ) $ (627 ) $ (627 ) Net income allocated to participating securities (96 ) (284 ) — (251 ) Net income (loss) available to common stockholders $ 7,184 $ 21,516 $ (6,198 ) $ 18,635 Net income (loss) per share, basic $ 0.10 $ 0.29 $ (0.08 ) $ 0.26 Net income (loss) per share, diluted $ 0.10 $ 0.29 $ (0.08 ) $ 0.26 Weighted-average shares outstanding, basic 73,394 72,936 73,603 71,690 Weighted-average shares outstanding, diluted 74,103 73,123 73,603 71,958 ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value)ASSETS June 30,
2023December 31,
2022Current Assets: Cash and cash equivalents $ 22,739 $ 36,456 Restricted cash 2,351 13,069 Accounts receivable, net 63,367 68,655 Inventories 71,115 66,628 Derivative instruments 14,038 4,973 Other current assets 5,919 9,340 Total current assets 179,529 199,121 Property and equipment, net 246,693 239,069 Other Assets: Right of use operating lease assets, net 24,433 18,937 Intangible assets, net 8,792 9,087 Goodwill 5,970 5,970 Other assets 5,993 6,137 Total other assets 45,188 40,131 Total Assets $ 471,410 $ 478,321 ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited, in thousands, except par value)LIABILITIES AND STOCKHOLDERS’ EQUITY June 30,
2023December 31,
2022Current Liabilities: Accounts payable $ 25,933 $ 28,115 Accrued liabilities 15,328 26,556 Current portion – operating leases 3,914 3,849 Derivative instruments 8,396 6,732 Other current liabilities 5,115 12,765 Total current liabilities 58,686 78,017 Long-term debt, net 82,082 68,356 Operating leases, net of current portion 21,058 15,062 Other liabilities 8,791 8,797 Total Liabilities 170,617 170,232 Stockholders’ Equity: Preferred stock, $0.001 par value; 10,000 shares authorized;
Series A: no shares issued and outstanding as of
June 30, 2023 and December 31, 2022
Series B: 927 shares issued and outstanding as of
June 30, 2023 and December 31, 20221 1 Common stock, $0.001 par value; 300,000 shares authorized;
75,923 and 75,154 shares issued and outstanding as of
June 30, 2023 and December 31, 2022, respectively76 75 Non-voting common stock, $0.001 par value; 3,553 shares authorized;
1 share issued and outstanding as of June 30, 2023 and December 31, 2022— — Additional paid-in capital 1,039,735 1,040,834 Accumulated other comprehensive income 1,822 1,822 Accumulated deficit (740,841 ) (734,643 ) Total Stockholders’ Equity 300,793 308,089 Total Liabilities and Stockholders’ Equity $ 471,410 $ 478,321 Reconciliation of Adjusted EBITDA to Net Income
Three Months Ended
June 30,Six Months Ended
June 30,(in thousands) (unaudited) 2023 2022 2023 2022 Net income (loss) $ 7,595 $ 22,115 $ (5,571 ) $ 19,513 Adjustments: Interest expense 1,734 319 3,299 519 Interest income (190 ) (145 ) (411 ) (303 ) Asset impairments — — 574 — Acquisition-related expense 700 875 1,400 1,750 Depreciation and amortization expense 5,681 6,728 11,735 12,861 Total adjustments 7,925 7,777 16,597 14,827 Adjusted EBITDA $ 15,520 $ 29,892 $ 11,026 $ 34,340 Commodity Price Performance
Three Months Ended
June 30,Six Months Ended
June 30,(unaudited) 2023 2022 2023 2022 Renewable fuel production gallons sold (in millions) 51.2 51.3 94.5 100.4 Specialty alcohol production gallons sold (in millions) 16.6 25.8 38.0 49.1 Third party renewable fuel gallons sold (in millions) 26.6 30.0 60.4 60.8 Total gallons sold (in millions) 94.4 107.1 192.9 210.3 Total gallons produced (in millions) 70.5 77.0 131.1 151.3 Production capacity utilization 81 % 88 % 76 % 85 % Average sales price per gallon $ 2.63 $ 2.84 $ 2.53 $ 2.65 Average CBOT ethanol price per gallon $ 2.46 $ 2.73 $ 2.33 $ 2.50 Corn cost per bushel – CBOT equivalent $ 6.52 $ 7.46 $ 6.56 $ 6.84 Average basis 0.80 0.69 0.63 0.66 Delivered corn cost $ 7.32 $ 8.15 $ 7.19 $ 7.50 Total essential ingredients tons sold (in thousands) 364.1 414.1 663.4 812.9 Essential ingredients return % (1) 37.6 % 32.7 % 38.6 % 34.6 % ________________
(1) Essential ingredients revenue as a percentage of delivered cost of corn.Segment Financials
Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Net Sales Pekin Campus, recorded as gross: Alcohol sales $ 127,694 $ 143,768 $ 260,075 $ 259,818 Essential ingredient sales 53,954 59,853 117,585 115,133 Intersegment sales 444 269 757 525 Total Pekin Campus sales 182,092 203,890 378,417 375,476 Marketing and distribution: Alcohol sales, gross $ 72,589 $ 63,558 $ 156,936 $ 117,484 Alcohol sales, net 104 317 218 668 Intersegment sales 2,499 3,242 5,342 6,239 Total marketing and distribution sales 75,192 67,117 162,496 124,391 Other production, recorded as gross: Alcohol sales $ 44,384 $ 67,184 $ 65,316 $ 126,991 Essential ingredient sales 14,421 23,372 22,773 42,309 Intersegment sales 62 — 62 12 Total Other production sales 58,867 90,556 88,151 169,312 Corporate and other 4,151 4,137 8,285 7,904 Intersegment eliminations (3,005 ) (3,511 ) (6,161 ) (6,776 ) Net sales as reported $ 317,297 $ 362,189 $ 631,188 $ 670,307 Cost of goods sold: Pekin Campus $ 168,419 $ 195,691 $ 366,596 $ 364,573 Marketing and distribution 71,746 63,796 154,871 118,510 Other production 57,834 91,606 91,815 169,851 Corporate and other 3,414 3,197 5,786 6,070 Intersegment eliminations (1,297 ) (945 ) (1,897 ) (2,314 ) Cost of goods sold as reported $ 300,116 $ 353,345 $ 617,171 $ 656,690 Gross profit: Pekin Campus $ 13,673 $ 8,199 $ 11,821 $ 10,903 Marketing and distribution 3,446 3,321 7,625 5,881 Other production 1,033 (1,050 ) (3,664 ) (539 ) Corporate and other 737 940 2,499 1,834 Intersegment eliminations (1,708 ) (2,566 ) (4,264 ) (4,462 ) Gross profit as reported $ 17,181 $ 8,844 $ 14,017 $ 13,617 
