- Growth, Revenue Diversification and Efficiency Initiatives to Expand Annualized EBITDA by Over $65 Million by the End of 2025 and Over $125 Million by the End of 2026 -
PEKIN, Ill., March 09, 2023 (GLOBE NEWSWIRE) -- Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols and essential ingredients, reported its fourth quarter and full year 2022 financial results for the year ended December 31, 2022.
"Alto has been executing a series of growth initiatives to diversify our revenue streams, maximize our high-margin products, and optimize our operations to continue our business transformation," said Mike Kandris, CEO of Alto Ingredients. "Our efforts are coming to fruition. Our specialty alcohol infrastructure upgrades are complete, and we are excited to introduce our new high-quality 190 proof and low-moisture 200 proof grain neutral spirits products to our existing and target customers in the beverage, food, flavor, personal care and pharmaceutical industries. In October 2022, we finished the installation of our new corn oil technology at our Magic Valley facility, improving production levels and exceeding yield expectations. With this proof-of-concept, we plan to roll out the system at our three other dry mills. We are nearing completion of our high protein installation at our Magic Valley facility. In addition, we are advancing plans to launch our carbon capture sequestration project and to develop primary yeast production. Also, we are progressing with our strategies to improve plant efficiency, reliability, redundancy, and capacity with additional corn storage, a natural gas pipeline installation, biogas conversion to renewable natural gas, energy cogeneration capabilities and other equipment upgrades.
"Our 2022 financial results, which were negatively impacted by commodity price swings, underscore our need to reduce our reliance on fuel ethanol margins. To accelerate our revenue diversification and growth plan, in November 2022, we increased our access to capital with a term loan for up to $125 million. We expect these projects to contribute additional annualized EBITDA of over $65 million by the end of 2025, which we anticipate will nearly double to over $125 million by the end of 2026 when our carbon capture, cogeneration, and other initiatives are fully realized," concluded Kandris.
Financial Results for the Three Months Ended December 31, 2022 Compared to 2021
- Net sales were $328.4 million, compared to $385.5 million.
- Cost of goods sold was $349.8 million, compared to $343.4 million.
- Gross loss was $21.3 million, compared to gross profit of $42.1 million.
- Selling, general and administrative expenses were $7.6 million, compared to $9.4 million.
- Operating loss was $31.1 million, compared to an operating profit of $37.3 million.
- Net loss available to common stockholders was $33.4 million, or $0.46 per share, compared net income of $35.4 million, or $0.49 per diluted share.
- Adjusted EBITDA was negative $23.5 million, compared to positive Adjusted EBITDA of $43.4 million.
- Cash and cash equivalents were $36.5 million at December 31, 2022, compared to $50.6 million at December 31, 2021.
- The term loan facility has $40 million of remaining borrowing availability as well as an option to request up to an additional $25 million. In addition, the company has $57.9 million of borrowing availability under its asset-based line of credit.
Financial Results for the Twelve Months Ended December 31, 2022 Compared to 2021
- Net sales were $1.3 billion, compared to $1.2 billion.
- Cost of goods sold was $1.4 billion, compared to $1.1 billion.
- Gross loss was $27.6 million, compared to gross profit of $67.8 million.
- Selling, general and administrative expenses were $31.6 million, compared to $29.2 million.
- Operating loss was $61.4 million, compared to operating income of $40.1 million.
- Net loss available to common stockholders was $42.9 million, or $0.60 per share, compared to net income of $44.2 million, or $0.61 per diluted share.
- Adjusted EBITDA was negative $9.8 million, compared to positive Adjusted EBITDA of $76.8 million.
Fourth Quarter 2022 Results Conference Call
Management will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on Thursday, March 9, 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 Thursday, March 9, 2023, through 8:00 p.m. Eastern Time on Thursday, March 16, 2023. To access the replay, please dial 877-344-7529. International callers should dial 00-1 412-317-0088. The pass code will be 2287234.
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 (benefit) 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) attributed to Alto Ingredients, Inc. 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) attributed to Alto Ingredients, Inc. 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 business initiatives and strategies, and their timing and effects, including, but not limited to, EBITDA that Alto Ingredients' expects to generate as a result of its initiatives and strategies; 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 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, timing and effects of, including the financial results deriving from, Alto Ingredients' plant improvement 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 and marketing 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; the inability to timely and successfully implement business strategies and complete capital improvement projects and other initiatives; 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 9, 2022.
Media Contact:
Bryon McGregor, Alto Ingredients, Inc., 916-403-2768, mediarelations@altoingredients.com
Company IR 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
| ALTO INGREDIENTS, INC. | |||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
| (unaudited, in thousands, except per share data) | |||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Net sales | $ | 328,437 | $ | 385,492 | $ | 1,335,621 | $ | 1,207,892 | |||||||||||
| Cost of goods sold | 349,765 | 343,379 | 1,363,171 | 1,140,108 | |||||||||||||||
| Gross profit (loss) | (21,328 | ) | 42,113 | (27,550 | ) | 67,784 | |||||||||||||
| Selling, general and administrative expenses | (7,551 | ) | (9,408 | ) | (31,579 | ) | (29,185 | ) | |||||||||||
| Gain (loss) on sale (disposal) of assets | (2,230 | ) | 4,571 | (2,230 | ) | 4,571 | |||||||||||||
| Asset impairments | - | - | - | (3,100 | ) | ||||||||||||||
| Income (loss) from operations | (31,109 | ) | 37,276 | (61,359 | ) | 40,070 | |||||||||||||
| Income from cash grant | - | - | 22,652 | - | |||||||||||||||
| Interest expense, net | (968 | ) | (228 | ) | (1,827 | ) | (3,587 | ) | |||||||||||
| Income from loan forgiveness | - | - | - | 9,860 | |||||||||||||||
| Other income, net | 930 | 567 | 862 | 1,208 | |||||||||||||||
| Income (loss) before provision for income taxes | (31,147 | ) | 37,615 | (39,672 | ) | 47,551 | |||||||||||||
| Provision for income taxes | 1,925 | 1,469 | 1,925 | 1,469 | |||||||||||||||
| Consolidated net income (loss) | $ | (33,072 | ) | $ | 36,146 | $ | (41,597 | ) | $ | 46,082 | |||||||||
| Preferred stock dividends | $ | (319 | ) | $ | (319 | ) | $ | (1,265 | ) | $ | (1,265 | ) | |||||||
| Income allocated to participating securities | $ | - | $ | (477 | ) | $ | - | $ | (600 | ) | |||||||||
| Net income (loss) available to common stockholders | $ | (33,391 | ) | $ | 35,350 | $ | (42,862 | ) | $ | 44,217 | |||||||||
| Net income (loss) per share, basic | $ | (0.46 | ) | $ | 0.50 | $ | (0.60 | ) | $ | 0.62 | |||||||||
| Net income (loss) per share, diluted | $ | (0.46 | ) | $ | 0.49 | $ | (0.60 | ) | $ | 0.61 | |||||||||
| Weighted-average shares outstanding, basic | 73,276 | 71,387 | 71,944 | 71,098 | |||||||||||||||
| Weighted-average shares outstanding, diluted | 73,276 | 72,222 | 71,944 | 72,219 | |||||||||||||||
| ALTO INGREDIENTS, INC. | |||||
| CONSOLIDATED BALANCE SHEETS | |||||
| (unaudited, in thousands, except par value) | |||||
| December 31, | December 31, | ||||
| ASSETS | 2022 | 2021 | |||
| Current Assets: | |||||
| Cash and cash equivalents | $ | 36,456 | $ | 50,612 | |
| Restricted cash | 13,069 | 11,513 | |||
| Accounts receivable, net | 68,655 | 86,888 | |||
| Inventories | 66,628 | 54,373 | |||
| Derivative assets | 4,973 | 15,839 | |||
| Other current assets | 9,340 | 10,301 | |||
| Total current assets | 199,121 | 229,526 | |||
| Property and equipment, net | 239,069 | 222,550 | |||
| Other Assets: | |||||
| Right of use operating lease assets, net | 18,937 | 13,413 | |||
| Notes receivable, noncurrent | - | 11,641 | |||
| Intangible assets, net | 9,087 | 2,678 | |||
| Goodwill | 5,970 | - | |||
| Other assets | 6,137 | 5,145 | |||
| Total other assets | 40,131 | 32,877 | |||
| Total Assets | $ | 478,321 | $ | 484,953 | |
| ALTO INGREDIENTS, INC. | |||||||
| CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||||||
| (unaudited, in thousands, except par value) | |||||||
| December 31, | December 31, | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | 2022 | 2021 | |||||
| Current Liabilities: | |||||||
| Accounts payable - trade | $ | 28,115 | $ | 23,251 | |||
| Accrued liabilities | 26,556 | 21,307 | |||||
| Current portion - operating leases | 3,849 | 3,909 | |||||
| Derivative liabilities | 6,732 | 13,582 | |||||
| Other current liabilities | 12,765 | 7,553 | |||||
| Total current liabilities | 78,017 | 69,602 | |||||
| Long-term debt | 68,356 | 50,361 | |||||
| Operating leases, net of current portion | 15,062 | 9,382 | |||||
| Other liabilities | 8,797 | 10,394 | |||||
| Total Liabilities | 170,232 | 139,739 | |||||
| Stockholders' Equity: | |||||||
| Alto Ingredients, Inc. Stockholders' Equity: | |||||||
| Preferred stock, $0.001 par value; 10,000 shares authorized; | |||||||
| Series A: 0 shares issued and outstanding as of December 31, 2022 and 2021 Series B: 927 shares issued and outstanding as of December 31, 2022 and 2021 | 1 | 1 | |||||
| Common stock, $0.001 par value; 300,000 shares authorized; | |||||||
| 75,154 and 72,778 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 75 | 73 | |||||
| Non-voting common stock, $0.001 par value; 3,553 shares | |||||||
| authorized; 1 share issued and outstanding as of December 31, 2022 and 2021 | - | - | |||||
| Additional paid-in capital | 1,040,834 | 1,037,205 | |||||
| Accumulated other comprehensive income (loss) | 1,822 | (284 | ) | ||||
| Accumulated deficit | (734,643 | ) | (691,781 | ) | |||
| Total Stockholders' Equity | 308,089 | 345,214 | |||||
| Total Liabilities and Stockholders' Equity | $ | 478,321 | $ | 484,953 | |||
Reconciliation of Adjusted EBITDA to Net Income (Loss)
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||
| (unaudited) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Consolidated net income (loss) | $ | (33,072 | ) | $ | 36,146 | $ | (41,597 | ) | $ | 46,082 | |||||||||
| Adjustments: | |||||||||||||||||||
| Interest expense, net | 968 | 228 | 1,827 | 3,587 | |||||||||||||||
| Interest income | (169 | ) | (177 | ) | (510 | ) | (730 | ) | |||||||||||
| Acquisition-related | 875 | - | 3,500 | - | |||||||||||||||
| Asset impairments | - | - | - | 3,100 | |||||||||||||||
| Provision for income taxes | 1,925 | 1,469 | 1,925 | 1,469 | |||||||||||||||
| Depreciation and amortization expense | 5,973 | 5,772 | 25,095 | 23,292 | |||||||||||||||
| Total adjustments | 9,572 | 7,292 | 31,837 | 30,718 | |||||||||||||||
| Adjusted EBITDA | $ | (23,500 | ) | $ | 43,438 | $ | (9,760 | ) | $ | 76,800 | |||||||||
Commodity Price Performance
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||||||
| (unaudited) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
| Renewable fuel production gallons sold (in millions) | 55.3 | 42.6 | 208.5 | 161.1 | |||||||||||||||
| Specialty alcohol production gallons sold (in millions) | 20.2 | 26.3 | 92.5 | 89.5 | |||||||||||||||
| Third party renewable fuel gallons sold (in millions) | 29.5 | 48.5 | 117.9 | 229.0 | |||||||||||||||
| Total gallons sold (in millions) | 105.0 | 117.4 | 418.9 | 479.6 | |||||||||||||||
| Total gallons produced (in millions) | 74.0 | 69.6 | 300.0 | 251.7 | |||||||||||||||
| Production capacity utilization | 84 | % | 74 | % | 86 | % | 60 | % | |||||||||||
| Average sales price per gallon | $ | 2.56 | $ | 3.04 | $ | 2.64 | $ | 2.46 | |||||||||||
| Average CBOT ethanol price per gallon | $ | 2.16 | $ | 2.19 | $ | 2.16 | $ | 2.11 | |||||||||||
| Corn cost per bushel - CBOT equivalent | $ | 6.72 | $ | 5.69 | $ | 6.92 | $ | 5.70 | |||||||||||
| Average basis | $ | 1.01 | $ | 0.49 | $ | 0.85 | $ | 0.52 | |||||||||||
| Delivered cost of corn | $ | 7.73 | $ | 6.18 | $ | 7.77 | $ | 6.22 | |||||||||||
| Total essential ingredient tons sold (in thousands) | 402.5 | 349.7 | 1,637.4 | 1,236.2 | |||||||||||||||
| Essential ingredient return % (1) | 35.6 | % | 33.5 | % | 33.8 | % | 33.7 | % | |||||||||||
| __________________________________________ (1) Essential ingredient revenue as a percentage of delivered cost of corn. | |||||||||||||||||||
Segment Financials
| (unaudited) | Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Net sales | |||||||||||||||||||||||||||||||||
Pekin Campus production, recorded as gross: | |||||||||||||||||||||||||||||||||
| Alcohol sales | $ | 127,775 | $ | 156,227 | $ | 521,273 | $ | 498,195 | |||||||||||||||||||||||||
| Essential ingredient sales | 56,201 | 48,865 | 225,871 | 189,535 | |||||||||||||||||||||||||||||
| Intersegment sales | 353 | 273 | 1,212 | 1,193 | |||||||||||||||||||||||||||||
| Total Pekin Campus sales | 184,329 | 205,365 | 748,356 | 688,923 | |||||||||||||||||||||||||||||
Marketing and distribution: | |||||||||||||||||||||||||||||||||
| Alcohol sales, gross | $ | 54,879 | $ | 123,720 | $ | 227,626 | $ | 379,422 | |||||||||||||||||||||||||
| Alcohol sales, net | 250 | 264 | 1,225 | 1,753 | |||||||||||||||||||||||||||||
| Intersegment sales | 3,099 | 2,784 | 12,459 | 10,061 | |||||||||||||||||||||||||||||
| Total marketing and distribution sales | 58,228 | 126,768 | 241,310 | 391,236 | |||||||||||||||||||||||||||||
| Other production, recorded as gross: | |||||||||||||||||||||||||||||||||
| Alcohol sales | $ | 62,124 | $ | 44,622 | $ | 253,605 | $ | 107,931 | |||||||||||||||||||||||||
| Essential ingredient sales | 23,461 | 11,794 | 90,209 | 31,056 | |||||||||||||||||||||||||||||
| Intersegment sales | 7 | 68 | 22 | 964 | |||||||||||||||||||||||||||||
| Total Other production sales | 85,592 | 56,484 | 343,836 | 139,951 | |||||||||||||||||||||||||||||
| Corporate and other | 3,747 | - | 15,812 | - | |||||||||||||||||||||||||||||
Intersegment eliminations | (3,459 | ) | (3,125 | ) | (13,693 | ) | (12,218 | ) | |||||||||||||||||||||||||
| Net sales as reported | $ | 328,437 | $ | 385,492 | $ | 1,335,621 | $ | 1,207,892 | |||||||||||||||||||||||||
| Cost of goods sold: | |||||||||||||||||||||||||||||||||
| Pekin Campus production | $ | 200,240 | $ | 169,595 | $ | 772,755 | $ | 638,371 | |||||||||||||||||||||||||
| Marketing and distribution | 55,620 | 125,567 | 229,288 | 371,371 | |||||||||||||||||||||||||||||
| Other production | 92,260 | 49,348 | 353,775 | 136,401 | |||||||||||||||||||||||||||||
| Corporate and other | 3,173 | - | 12,167 | - | |||||||||||||||||||||||||||||
| Intersegment eliminations | (1,528 | ) | (1,131 | ) | (4,814 | ) | (6,035 | ) | |||||||||||||||||||||||||
| Cost of goods sold as reported | $ | 349,765 | $ | 343,379 | $ | 1,363,171 | $ | 1,140,108 | |||||||||||||||||||||||||
| Gross profit (loss): | |||||||||||||||||||||||||||||||||
| Pekin Campus production | $ | (15,911 | ) | $ | 35,770 | $ | (24,399 | ) | $ | 50,552 | |||||||||||||||||||||||
| Marketing and distribution | 2,608 | 1,201 | 12,022 | 19,865 | |||||||||||||||||||||||||||||
| Other production | (6,668 | ) | 7,136 | (9,939 | ) | 3,550 | |||||||||||||||||||||||||||
| Corporate and other | 574 | - | 3,645 | - | |||||||||||||||||||||||||||||
| Intersegment eliminations | (1,931 | ) | (1,994 | ) | (8,879 | ) | (6,183 | ) | |||||||||||||||||||||||||
| Gross profit (loss) as reported | $ | (21,328 | ) | $ | 42,113 | $ | (27,550 | ) | $ | 67,784 | |||||||||||||||||||||||
