Exhibit 99.1

 

Alto Ingredients, Inc. Reports Fourth Quarter and Full Year 2021 Results

 

  Increased Net Sales 128% to $385 Million and Gross Profit 209% to $42 Million in Q4 2021 vs. Q4 2020
    
  Improved Net Income Available to Common Stockholders to $35 Million from Net Loss of $21 Million and Adjusted EBITDA 168% to $43 Million in Q4 2021 vs. Q4 2020
    
  Grew Net Sales 35% to $1.2 Billion and Gross Profit 28% to $68 Million in 2021 vs. 2020
    
  Improved Net Income Available to Common Stockholders to $44 Million and Adjusted EBITDA 15% to $77 Million in 2021 vs. 2020
    
Acquired Specialty Alcohol Distributor, Eagle Alcohol, in January 2022

 

Sacramento, CA, March 10, 2022 – Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols and essential ingredients, reported its fourth quarter and full year 2021 financial results for the year ended December 31, 2021.

 

“In 2021, by focusing on higher margin, consistent revenue markets, we succeeded in becoming a profitable business with significant, unique opportunities for top- and bottom-line growth,” said Mike Kandris, CEO of Alto Ingredients. “During 2021, we invested in capacity, expanded our protein strategy, optimized assets, and secured valuable certifications. As a result, net sales reached $1.2 billion, up 35% over 2020, reflecting the solid specialty alcohol and essential ingredients business throughout the year and exceptional renewable fuel margins in the fourth quarter of 2021. In January 2022, we completed a downstream integration by acquiring a small-package distributor, Eagle Alcohol. Eagle fits perfectly into our strategic roadmap as we continue to raise the quality of our production to the highest grades of grain neutral spirits by further enhancing our distillation process, optimizing our production capabilities and integrating Eagle’s strong distribution and sales services. Also, Eagle further diversifies our business with less emphasis on revenue related to commodities. Looking ahead, we plan to invest further in key differentiating assets as well as evaluate capital expenditure programs to create long-term stakeholder value.”

 

Financial Results for the Three Months Ended December 31, 2021 Compared to 2020

 

Net sales were $385.5 million, compared to $168.8 million.

 

Cost of goods sold was $343.4 million, compared to $155.2 million.

 

Gross profit was $42.1 million, compared to $13.6 million.

 

Selling, general and administrative expenses were $9.4 million, compared to $6.7 million.

 

Operating income was $37.3 million, compared to an operating loss of $14.2 million.

 

Net income available to common stockholders was $35.4 million, or $0.49 per diluted share, compared a net loss of $20.5 million, or $0.30 per share.

 

Adjusted EBITDA was $43.4 million, compared to $16.2 million.

 

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Cash and cash equivalents were $50.6 million at December 31, 2021, compared to $47.7 million at December 31, 2020.

 

On November 8, 2021, the company announced the sale of its renewable fuel production facility in Stockton, California for $24.0 million in cash.

 

Financial Results for the Twelve Months Ended December 31, 2021 Compared to 2020

 

Net sales were $1.2 billion, compared to $897.0 million.

 

Cost of goods sold was $1.1 billion, compared to $844.2 million.

 

Gross profit was $67.8 million, compared to $52.9 million.

 

Selling, general and administrative expenses were $29.2 million, compared to $32.0 million.

 

Operating income was $40.1 million, compared to $9.9 million.

 

Net income available to common stockholders was $44.2 million, or $0.61 per diluted share, compared to a net loss of $16.4 million, or $0.28 per share.

 

Adjusted EBITDA was $76.8 million, compared to $66.6 million.

 

Fourth 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 Thursday, March 10, 2022, 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 3612369. 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 Thursday, March 10, 2022, through 8:00 p.m. Eastern Time on Thursday, March 17, 2022. To access the replay, please dial (855) 859-2056. International callers should dial 00-1 (404) 537-3406. The pass code will be 3612369.

 

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 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.

 

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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 the benefits of the acquisition of Eagle Alcohol; 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. 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’ 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 November 12, 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:

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
December 31,
   Year Ended
December 31,
 
   2021   2020   2021   2020 
                 
Net sales  $385,492   $168,818   $1,207,892   $897,023 
Cost of goods sold   343,379    155,181    1,140,108    844,164 
Gross profit   42,113    13,637    67,784    52,859 
Selling, general and administrative expenses   (9,408)   (6,735)   (29,185)   (31,980)
Gain on sale of assets   4,571    3,223    4,571    1,580 
Gain on litigation settlement               11,750 
Asset impairments       (24,356)   (3,100)   (24,356)
Income (loss) from operations   37,276    (14,231)   40,070    9,853 
Income from loan forgiveness           9,860     
Interest expense, net   (228)   (3,790)   (3,587)   (17,943)
Fair value adjustments       (2,462)       (9,959)
Other income, net   567    271    1,208    750 
Income (loss) before income taxes   37,615    (20,212)   47,551    (17,299)
Provision (benefit) for income taxes   1,469    (17)   1,469    (17)
Consolidated net income (loss)   36,146    (20,195)   46,082    (17,282)
Net loss attributed to noncontrolling interests               2,166 
Net income (loss) attributed to Alto Ingredients, Inc.  $36,146   $(20,195)  $46,082   $(15,116)
Preferred stock dividends  $(319)  $(319)  $(1,265)  $(1,268)
Income allocated to participating securities  $(477)  $   $(600)  $ 
Net income (loss) available to common stockholders  $35,350   $(20,514)  $44,217   $(16,384)
Net income (loss) per share, basic  $0.50   $(0.30)  $0.62   $(0.28)
Net income (loss) per share, diluted  $0.49   $(0.30)  $0.61   $(0.28)
Weighted-average shares outstanding, basic   71,387    67,512    71,098    58,609 
Weighted-average shares outstanding, diluted   72,222    67,512    72,219    58,609 

 

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

 

   December 31,   December 31, 
ASSETS  2021   2020 
Current Assets:        
Cash and cash equivalents  $50,612   $47,667 
Restricted cash   11,513    520 
Accounts receivable, net   86,888    43,491 
Inventories   54,373    37,925 
Derivative assets   15,839    17,149 
Assets held-for-sale   1,000    58,295 
Other current assets   9,301    8,999 
Total current assets   229,526    214,046 
Property and equipment, net   222,550    229,486 
Other Assets:          
Right of use operating lease assets, net   13,413    11,046 
Notes receivable   11,641    14,337 
Other assets   7,823    7,903 
Total other assets   32,877    33,286 
Total Assets  $484,953   $476,818 

 

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

 

   December 31,   December 31, 
LIABILITIES AND STOCKHOLDERS’ EQUITY  2021   2020 
Current Liabilities:        
Accounts payable – trade  $23,251   $13,047 
Accrued liabilities   21,307    11,101 
Current portion – operating leases   3,909    2,180 
Current portion – long-term debt       25,533 
Derivative liabilities   13,582     
Liabilities held-for-sale       19,542 
Other current liabilities   7,553    15,524 
Total current liabilities   69,602    86,927 
           
Long-term debt, net of current portion   50,361    71,807 
Operating leases, net of current portion   9,382    8,715 
Other liabilities   10,394    13,134 
Total Liabilities   139,739    180,583 
           
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, 2021 and 2020 Series B: 927 shares issued and outstanding as of December 31, 2021 and 2020   1    1 
Common stock, $0.001 par value; 300,000 shares authorized; 72,778 and 72,487 shares issued and outstanding as of December 31, 2021 and 2020, respectively   73    72 
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of December 31, 2021 and 2020        
Additional paid-in capital   1,037,205    1,036,638 
Accumulated other comprehensive loss   (284)   (3,878)
Accumulated deficit   (691,781)   (736,598)
Total Stockholders’ Equity   345,214    296,235 
Total Liabilities and Stockholders’ Equity  $484,953   $476,818 

 

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Reconciliation of Adjusted EBITDA to Net Income (Loss)

 

   Three Months Ended
December 31,
   Years Ended
December 31,
 
(unaudited)  2021   2020   2021   2020 
Net income (loss) attributed to Alto Ingredients, Inc.  $36,146   $(20,195)  $46,082   $(15,116)
Adjustments:                    
Interest expense   228    3,790    3,587    17,943 
Interest income   (177)   (190)   (730)   (768)
Asset impairments       24,356    3,100    24,356 
Fair value adjustments       2,462        9,959 
Provision (benefit) for income taxes   1,469    (17)   1,469    (17)
Depreciation expense   5,772    6,015    23,292    30,269 
Total adjustments   7,292    36,416    30,718    81,742 
Adjusted EBITDA  $43,438   $16,221   $76,800   $66,626 

 

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Commodity Price Performance

 

   Three Months Ended
December 31,
   Years Ended
December 31,
 
(unaudited)  2021   2020   2021   2020 
Renewable fuel production gallons sold (in millions)   42.6    33.0    161.1    181.0 
Specialty alcohol production gallons sold (in millions)   26.3    16.0    89.5    90.9 
Third party renewable fuel gallons sold (in millions)   48.5    51.6    229.0    264.4 
Total gallons sold (in millions)   117.4    100.6    479.6    536.3 
                    
Total gallons produced (in millions)   69.6    53.0    251.7    262.1 
Production capacity utilization   74%   47%   60%   53%
                     
Average sales price per gallon  $3.04   $1.72   $2.46   $1.63 
Average CBOT ethanol price per gallon  $2.19   $1.41   $2.11   $1.25 
                     
Corn cost – CBOT equivalent  $5.69   $3.79   $5.70   $3.56 
Average basis  $0.49   $0.27   $0.52   $0.28 
Delivered cost of corn  $6.18   $4.06   $6.22   $3.84 
                     
Total essential ingredient tons sold (in thousands)   349.7    270.0    1,236.2    1,447.5 
Essential ingredient return % (1)   33.5%   42.6%   33.7%   44.1%

 

 

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

 

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Segment Financials

 

  Three Months Ended
December 31,
   Years Ended
December 31,
 
(unaudited)  2021   2020   2021   2020 
Net sales                
Pekin Campus production, recorded as gross:                
Alcohol sales  $156,227   $71,854   $498,195   $330,432 
Essential ingredient sales   48,865    32,103    189,535    130,270 
Intersegment sales   273    218    1,193    645 
Total Pekin Campus sales   205,365    104,175    688,923    461,347 
                     
Marketing and distribution:                    
Alcohol sales, gross  $123,720   $43,585   $379,422   $256,209 
Alcohol sales, net   264    405    1,753    1,529 
Intersegment sales   2,784    1,898    10,061    9,648 
Total marketing and distribution sales   126,768    45,888    391,236    267,386 
                     
Other production, recorded as gross:                    
Alcohol sales  $44,622   $15,800   $107,931   $137,703 
Essential ingredient sales   11,794    5,071    31,056    40,880 
Intersegment sales   68    187    964    1,309 
Total Other production sales   56,484    21,058    139,951    179,892 
                     
Intersegment eliminations   (3,125)   (2,303)   (12,218)   (11,602)
Net sales as reported  $385,492   $168,818   $1,207,892   $897,023 
                     
Cost of goods sold:                    
Pekin Campus production  $169,595   $89,316   $638,371   $389,125 
Marketing and distribution   125,567    42,637    371,371    253,465 
Other production   49,348    25,069    136,401    206,412 
Intersegment eliminations   (1,131)   (1,841)   (6,035)   (4,838)
Cost of goods sold as reported  $343,379   $155,181   $1,140,108   $844,164 
                     
Gross profit (loss):                    
Pekin Campus production  $35,770   $14,859   $50,552   $72,222 
Marketing and distribution   1,201    3,251    19,865    13,921 
Other production   7,136    (4,011)   3,550    (26,520)
Intersegment eliminations   (1,994)   (462)   (6,183)   (6,764)
Gross profit as reported  $42,113   $13,637   $67,784   $52,859 

 

 

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