Exhibit 99.1

 

 

Alto Ingredients Reports Second Quarter 2021 Results

·Second Quarter Net Income of $8.1 million, or $0.11 per share
·Second Quarter Adjusted EBITDA of $17.0 million

 

Sacramento, CA, August 3, 2021 – Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer of specialty alcohols and essential ingredients, reported its financial results for the second quarter ended June 30, 2021.

 

“In the second quarter, we produced our fifth consecutive quarter of gross profit and had net income of $8.1 million and Adjusted EBITDA of $17.0 million,” said Mike Kandris, CEO of Alto Ingredients. “For the first half of 2021, we generated net income of over $12 million and EBITDA of over $30 million representing a year-over-year improvement in EBITDA of $14 million, a further testament to the benefit of our transformation efforts. Through these efforts we have focused our business on our most profitable and strategic operations, strengthened our balance sheet and expect to repay the remaining term debt in 2021. As such, we are now pursuing opportunities to expand profitably through enhanced service offerings and products, reinvestment in infrastructure, and accretive vertical integration. And while our transformation is ongoing, we have a solid, profitable platform for long-term growth, creating value for our shareholders, partners, and employees.”

 

Financial Results for the Three Months Ended June 30, 2021 Compared to 2020

 

·Net sales were $298.1 million, compared to $212.1 million.
·Cost of goods sold was $282.9 million, compared to $180.9 million.  
·Gross profit was $15.2 million, compared to $31.2 million.
·Selling, general and administrative expenses were $7.2 million, compared to $8.6 million.
·Operating income was $6.1 million, compared to $22.6 million.
·Income available to common stockholders was $8.1 million, or $0.11 per share, compared to $14.6 million, or $0.27 per share.
·Adjusted EBITDA was $17.0 million, compared to $28.8 million.
·Cash and cash equivalents were $50.8 million at June 30, 2021, compared to $47.7 million at December 31, 2020. In the second quarter, the company sold its fuel-grade ethanol production facility in Madera, California for total consideration of $28.3 million, comprised of $19.5 million in cash and $8.8 million in assumption of liabilities.

 

 

 

Financial Results for the Six Months Ended June 30, 2021 Compared to 2020

 

·Net sales were $516.8 million, compared to $523.5 million.
·Cost of goods sold was $487.8 million, compared to $505.2 million.  
·Gross profit was $29.1 million, compared to $18.3 million.
·Selling, general and administrative expenses were $14.2 million, compared to $18.8 million.
·Operating income was $11.7 million, compared to a loss of $0.5 million.
·Income available to common stockholders was $12.4 million, or $0.17 per diluted share, compared to a loss of $10.8 million, or $0.20 per share.
·Adjusted EBITDA was $30.4 million, compared to $16.5 million.

 

Second Quarter 2021 Results Conference Call

 

Management will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on Tuesday, August 3, 2021, and will deliver prepared remarks via webcast followed by a question-and-answer session.

 

The webcast for the call can be accessed from Alto Ingredients website at www.altoingredients.com.. Alternatively, you may dial the following number up to ten minutes prior to the scheduled conference call time: (877) 847-6066. International callers should dial 00-1 (970) 315-0267. The pass code will be 7292378. If you are unable to participate in the live call, the webcast will be archived for replay on Alto Ingredients’ website for one year. In addition, a telephonic replay will be available at 8:00 p.m. Eastern Time on Tuesday, August 3, 2021, through 8:00 p.m. Eastern Time on Tuesday, August 10, 2021. To access the replay, please dial (855) 859-2056. International callers should dial 00-1 (404) 537-3406. The pass code will be 7292378.

 

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 net income (loss) attributed to Alto Ingredients, Inc. before interest expense, interest income, provision (benefit) for income taxes, asset impairments, loss on extinguishment of debt, purchase accounting adjustments, 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), formerly known as Pacific Ethanol, Inc., is a leading producer 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’ 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. 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 effects – both positive and negative – of the coronavirus pandemic and its resurgence or abatement. 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’ distilleries, 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 17, 2021.

  

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:

Moriah Shilton, 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
June 30,		   Six Months Ended
June 30,		 
   2021   2020   2021   2020 
                 
Net sales  $298,110   $212,074   $516,844   $523,478 
Cost of goods sold   282,877    180,892    487,774    505,186 
Gross profit   15,233    31,182    29,070    18,292 
Selling, general and administrative expenses   7,230    8,629    14,244    18,841 
Asset impairments   1,900    -      3,100    -   
Income (loss) from operations   6,103    22,553    11,726    (549)
Interest expense, net   (1,045)   (4,647)   (2,930)   (9,954)
Income from loan forgiveness   3,887    -      3,887    -   
Fair value adjustments   -      (1,314)   -      (641)
Other income (expense), net   (555)   (1,738)   385    (1,158)
Income (loss) before benefit for income taxes   8,390    14,854    13,068    (12,302)
Benefit for income taxes   -      -      -      -   
Consolidated net income (loss)   8,390    14,854    13,068    (12,302)
Net loss attributed to noncontrolling interests   -      110    -      2,166 
Net income (loss) attributed to Alto Ingredients, Inc.  $8,390   $14,964   $13,068   $(10,136)
Preferred stock dividends  $(315)  $(315)  $(627)  $(630)
Income (loss) available to common stockholders  $8,075   $14,649   $12,441   $(10,766)
Net income (loss) per share, basic  $0.11   $0.27   $0.18   $(0.20)
Net income (loss) per share, diluted  $0.11   $0.27   $0.17   $(0.20)
Weighted-average shares outstanding, basic   71,260    54,498    70,808    54,163 
Weighted-average shares outstanding, diluted   71,929    54,498    71,961    54,163 

  

 

 

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

 

ASSETS  June 30, 2021   December 31, 2020 
Current Assets:        
Cash and cash equivalents  $50,796   $47,667 
Accounts receivable, net   67,043    43,491 
Inventories   58,251    37,925 
Prepaid inventory   531    891 
Derivative instruments   28,498    17,149 
Assets held-for-sale   30,199    58,295 
Other current assets   8,932    8,628 
Total current assets   244,250    214,046 
Property and equipment, net   221,327    229,486 
Other Assets:          
Right of use operating lease assets, net   13,509    11,046 
Notes receivable   12,775    14,337 
Intangible asset   2,678    2,678 
Other assets   4,665    5,225 
Total other assets   33,627    33,286 
Total Assets  $499,204   $476,818 

 

 

 

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

 

LIABILITIES AND STOCKHOLDERS’ EQUITY  June 30, 2021   December 31, 2020 
Current Liabilities:        
Accounts payable – trade  $30,029   $13,047 
Accrued liabilities   15,977    11,101 
Current portion – operating leases   3,171    2,180 
Current portion – long-term debt   23,660    25,533 
Derivative instruments   20,174    -   
Liabilities held-for-sale   10,478    19,542 
Other current liabilities   7,255    15,524 
      Total current liabilities   110,744    86,927 
           
Long-term debt, net of current portion   56,848    71,807 
Operating leases, net of current portion   10,188    8,715 
Other liabilities   13,405    13,134 
Total Liabilities   191,185    180,583 
           
Stockholders’ Equity:          
Alto Ingredients, Inc. Stockholders’ Equity:          
Preferred stock, $0.001 par value; 10,000 shares authorized; Series A: no shares issued and outstanding as of
June 30, 2021 and December 31, 2020
Series B: 927 shares issued and outstanding as of
June 30, 2021 and December 31, 2020		   1    1 
Common stock, $0.001 par value; 300,000 shares authorized; 72,811 and 72,487 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively   73    72 
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of June 30, 2021 and December 31, 2020   -      -   
Additional paid-in capital   1,035,980    1,036,638 
Accumulated other comprehensive expense   (3,878)   (3,878)
Accumulated deficit   (724,157)   (736,598)
Total Stockholders’ Equity   308,019    296,235 
Total Liabilities and Stockholders’ Equity  $499,204   $476,818 

  

 

 

Reconciliation of Adjusted EBITDA to Net Income (Loss)

   Three Months Ended
June 30,		   Six Months Ended
June 30,		 
(in thousands) (unaudited)  2021   2020   2021   2020 
Net income (loss) attributed to Alto Ingredients, Inc.  $8,390   $14,964   $13,068   $(10,136)
Adjustments:                    
 Interest expense   1,045    4,647    2,930    9,954 
 Interest income   (186)   (172)   (370)   (172)
 Asset impairments   1,900    -      3,100    -   
 Fair value adjustments   -      1,314    -      641 
 Depreciation and amortization expense*   5,811    8,089    11,669    16,205 
    Total adjustments   8,570    13,878    17,329    26,628 
Adjusted EBITDA  $16,960   $28,842   $30,397   $16,492 

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* Adjusted for noncontrolling interests.

 

 

  

Commodity Price Performance

  Three Months Ended
June 30,		   Six Months Ended
June 30,		 
(unaudited)  2021   2020   2021   2020 
 Fuel-grade ethanol production gallons sold (in millions)   41.4    27.0    80.4    127.2 
 Specialty alcohol production gallons sold (in millions)   24.3    29.9    43.3    52.2 
 Third party fuel-grade ethanol gallons sold (in millions)   59.3    73.9    113.3    136.3 
 Total gallons sold (in millions)   125.0    130.8    237.0    315.7 
                     
 Total gallons produced (in millions)   63.6    47.6    121.5    163.9 
 Production capacity utilization   59%   40%   56%   60%
                     
 Average sales price per gallon  $2.41   $1.59   $2.17   $1.55 
 Average CBOT ethanol price per gallon  $2.30   $1.08   $2.00   $1.16 
                     
 Corn cost per bushel – CBOT equivalent  $6.05   $3.39   $5.51   $3.59 
 Average basis   0.41    0.20    0.36    0.32 
 Delivered corn cost  $6.46   $3.59   $5.87   $3.91 
                     
 Total essential ingredients tons sold (in thousands)   304.0    250.1    580.9    922.0 
 Co-product return % (1)   32.2%   46.5%   35.9%   41.8%

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(1) Essential ingredients revenue as a percentage of delivered cost of corn.

 

 

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