Exhibit 99.1

 

 

Alto Ingredients, Inc. Reports First Quarter 2022 Results

 

Increased Net Sales 41% to $308 Million vs. Q1 2021

 

Integrated Acquisition of Specialty Alcohol Distributor, Eagle Alcohol

 

Launched Quality and ESG Initiatives

 

Sacramento, CA, May 9, 2022 – Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols and essential ingredients, reported its financial results for the quarter ended March 31, 2022.

 

“Our first quarter results validated our strategy to invest in specialty alcohols and essential ingredients,” said Mike Kandris CEO of Alto Ingredients. “Product diversification, with increased sales from higher margin products combined with operational improvements, partially offset the impact of the challenging commodities market. To further our strategy, we acquired a small-package distributor serving premium spirits markets in January and qualified for additional certifications valuable to pharmaceutical customers in February. These initiatives broadened our opportunities and enhanced our position in the marketplace. We are evaluating new capital expenditure programs to create additional long-term stakeholder value. We remain focused on executing on our strategic goals, investing for future growth and diversifying our product portfolio.

 

Financial Results for the Three Months Ended March 31, 2022 Compared to 2021

 

Net sales were $308.1 million, compared to $218.7 million.

 

Cost of goods sold was $303.3 million, compared to $204.9 million.

 

Gross profit was $4.8 million, compared to $13.8 million.

 

Selling, general and administrative expenses were $7.6 million, compared to $7.0 million.

 

Operating loss was $2.9 million, compared to operating income of $5.6 million.

 

Net loss available to common stockholders was $2.9 million, or $0.04 per share, compared to net income of $4.4 million, or $0.06 per diluted share.

 

Adjusted EBITDA was $4.4 million, compared to $13.4 million.

 

Cash and cash equivalents were $36.2 million at March 31, 2022, compared to $50.6 million at December 31, 2021.

 

First 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 Monday, May 9, 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: (866) 777-2509. International callers should dial (412) 317-5413. Please ask to join the Alto Ingredients 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 Monday, May 9, 2022, through 8:00 p.m. Eastern Time on Wednesday, May 16, 2022. To access the replay, please dial (877) 344-7529. International callers should dial (412) 317-0088. The pass code will be 7162739.

 

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, 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 the benefits of the acquisition of Eagle Alcohol and plant and product certifications; 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’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 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

 

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ALTO INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

 

   Three Months Ended
March 31,
 
   2022   2021 
Net sales  $308,118   $218,734 
Cost of goods sold   303,345    204,897 
Gross profit   4,773    13,837 
Selling, general and administrative expenses   7,629    7,014 
Asset impairment       1,200 
Income (loss) from operations   (2,856)   5,623 
Interest expense, net   (200)   (1,885)
Other income, net   454    940 
Income (loss) before provision for income taxes   (2,602)   4,678 
Provision for income taxes        
Net income (loss)  $(2,602)  $4,678 
Preferred stock dividends  $(312)  $(312)
Net income (loss) available to common stockholders  $(2,914)  $4,366 
Net income (loss) per share, basic and diluted  $(0.04)  $0.06 
Weighted-average shares outstanding, basic   71,390    70,351 
Weighted-average shares outstanding, diluted   71,390    72,464 

 

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ALTO INGREDIENTS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except par value)

 

ASSETS  March 31,
2022
   December 31,
2021
 
Current Assets:        
Cash and cash equivalents  $36,184   $50,612 
Restricted cash   23,799    11,513 
Accounts receivable, net   80,611    86,888 
Inventories   58,491    54,373 
Derivative instruments   19,498    15,839 
Notes receivable, current   12,385    3,125 
Other current assets   10,245    7,176 
Total current assets   241,213    229,526 
Property and equipment, net   220,996    222,550 
Other Assets:          
Right of use operating lease assets, net   15,099    13,413 
Notes receivable, noncurrent       11,641 
Intangible assets, net   9,460    2,678 
Goodwill   5,958     
Other assets   5,142    5,145 
Total other assets   35,659    32,877 
Total Assets  $497,868   $484,953 
           

 

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ALTO INGREDIENTS, INC.

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(unaudited, in thousands, except par value)

 

LIABILITIES AND STOCKHOLDERS’ EQUITY  March 31, 2022   December 31, 2021 
Current Liabilities:        
Accounts payable – trade  $21,750   $23,251 
Accrued liabilities   19,479    21,307 
Current portion – operating leases   4,297    3,909 
Derivative instruments   27,487    13,582 
Other current liabilities   7,168    7,553 
Total current liabilities   80,181    69,602 
           
Long-term debt   53,681    50,361 
Operating leases, net of current portion   10,705    9,382 
Other liabilities   10,336    10,394 
Total Liabilities   154,903    139,739 
           
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 March 31, 2022 and December 31, 2021 Series B: 927 shares issued and outstanding as of March 31, 2022 and December 31, 2021   1    1 
Common stock, $0.001 par value; 300,000 shares authorized; 74,411 and 72,778 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively   74    73 
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of March 31, 2022 and December 31, 2021        
Additional paid-in capital   1,037,869    1,037,205 
Accumulated other comprehensive loss   (284)   (284)
Accumulated deficit   (694,695)   (691,781)
Total Stockholders’ Equity   342,965    345,214 
Total Liabilities and Stockholders’ Equity  $497,868   $484,953 

 

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Reconciliation of Adjusted EBITDA to Net Income (Loss)

   Three Months Ended
March 31,
 
(in thousands) (unaudited)  2022   2021 
Net income (loss)  $(2,602)  $4,678 
Adjustments:          
Interest expense   200    1,885 
Interest income   (158)   (184)
Acquisition-related expense   875     
Asset impairments       1,200 
Depreciation and amortization expense   6,134    5,860 
Total adjustments   7,051    8,761 
Adjusted EBITDA  $4,449   $13,439 

 

Commodity Price Performance

   Three Months Ended
March 31,
 
(unaudited)  2022   2021 
Renewable fuel production gallons sold (in millions)   49.2    39.0 
Specialty alcohol production gallons sold (in millions)   23.3    19.0 
Third party renewable fuel gallons sold (in millions)   30.7    54.0 
Total gallons sold (in millions)   103.2    112.0 
           
Total gallons produced (in millions)   74.3    58.0 
Production capacity utilization   86%   52%
           
Average sales price per gallon  $2.46   $1.94 
Average CBOT ethanol price per gallon  $2.16   $1.60 
           
Corn cost per bushel – CBOT equivalent  $6.22   $4.98 
Average basis  $0.64   $0.29 
Delivered corn cost  $6.86   $5.27 
           
Total essential ingredients tons sold (in thousands)   398.8    276.9 
Essential ingredient return % (1)   36.4%   40.0%

 

 

 

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

 

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Segment Financials

 

(in thousands) (unaudited)  Three Months Ended
March 31,
 
   2022   2021 
Net sales        
Pekin Campus production, recorded as gross:        
Alcohol sales  $116,050   $95,083 
Essential ingredient sales   55,280    45,077 
Intersegment sales   256    1,473 
Total Pekin Campus sales   171,586    141,633 
           
Marketing and distribution:          
Alcohol sales, gross  $53,926   $57,010 
Alcohol sales, net   351    452 
Intersegment sales   2,996    2,244 
Total marketing and distribution sales   57,273    59,706 
           
Other production, recorded as gross:          
Alcohol sales  $59,805   $15,969 
Essential ingredient sales   18,938    5,143 
Intersegment sales   12    305 
Total Other production sales   78,755    21,417 
           
Corporate and other   3,768     
Intersegment eliminations   (3,264)   (4,022)
Net sales as reported  $308,118   $218,734 
           
Cost of goods sold:          
Pekin Campus production  $168,881   $128,864 
Marketing and distribution   54,716    53,958 
Other production   78,244    24,117 
Corporate and other   2,872     
Intersegment eliminations   (1,368)   (2,042)
Cost of goods sold as reported  $303,345   $204,897 
           
Gross profit (loss):          
Pekin Campus production  $2,705   $12,769 
Marketing and distribution   2,557    5,748 
Other production   511    (2,700)
Corporate and other   896     
Intersegment eliminations   (1,896)   (1,980)
Gross profit (loss) as reported  $4,773   $13,837 

 

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