Annual report pursuant to Section 13 and 15(d)

Segments.

v3.21.1
Segments.
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
SEGMENTS.
4. SEGMENTS.

The Company reports its financial and operating performance in three segments: (1) marketing and distribution, which includes marketing and merchant trading for Company-produced alcohols and essential ingredients, on an aggregated basis, and third-party fuel-grade ethanol (2) Pekin Campus production, which includes the production and sale of alcohols and essential ingredients produced at the Company’s Pekin, Illinois campus, and (3) Other production, which includes the production and sale of fuel-grade ethanol and essential ingredients produced at all of the Company’s other production facilities on an aggregated basis, none of which are individually significant to be considered a reportable segment.


Income before provision for income taxes includes management fees charged by Alto Ingredients to the segments. The Pekin Campus production segment incurred $4,344,000 and $4,014,000 in management fees for the years ended December 31, 2020 and 2019, respectively. The marketing and distribution segment incurred $3,480,000 in management fees for each of the years ended December 31, 2020 and 2019, respectively. The Other production segment incurred $3,893,000 and $5,188,000 in management fees for the years ended December 31, 2020 and 2019, respectively. Corporate activities include selling, general and administrative expenses, consisting primarily of corporate employee compensation, professional fees and overhead costs not directly related to a specific operating segment.


During the normal course of business, the segments do business with each other. The preponderance of this activity occurs when the Company’s marketing segment markets alcohol produced by the production segments for a marketing fee, as discussed in Note 3. These intersegment activities are considered arms’-length transactions. Consequently, although these transactions impact segment performance, they do not impact the Company’s consolidated results since all revenues and corresponding costs are eliminated in consolidation.


Capital expenditures are substantially all incurred at the Company’s Pekin Campus production segment.


The following tables set forth certain financial data for the Company’s operating segments (in thousands):


    Years Ended December 31,  
  2020     2019  
Net Sales            
Marketing and distribution:            
Alcohol sales, gross   $ 256,209     $ 355,101  
Alcohol sales, net     1,529       1,831  
Intersegment sales     9,648       18,219  
Total marketing and distribution sales     267,386       375,151  
                 
Pekin Campus production, recorded as gross:                
Alcohol sales   $ 330,432     $ 343,610  
Essential ingredient sales     130,270       138,987  
Intersegment sales     645       1,110  
Total Pekin Campus sales     461,347       483,707  
                 
Other Production, recorded as gross:                
Alcohol sales   $ 137,703     $ 455,343  
Essential ingredient sales     40,880       130,009  
Intersegment sales     1,309       509  
Total Other production sales     179,892       585,861  
                 
Intersegment eliminations     (11,602 )     (19,838 )
Net sales as reported   $ 897,023     $ 1,424,881  

Cost of goods sold:                
Marketing and distribution   $ 253,465     $ 347,185  
Pekin Campus production     389,125       481,262  
Other production     206,412       612,040  
Intersegment eliminations     (4,838 )     (5,668 )
Cost of goods sold as reported   $ 844,164     $ 1,434,819  

Income (loss) before benefit for income taxes:                
Marketing and distribution   $ 4,889     $ 12,533  
Pekin Campus production     53,898       (21,441 )
Other production     (54,677 )     (77,019 )
Corporate activities     (21,409 )     (15,375 )
    $ (17,299 )   $ (101,302 )

Depreciation:                
Pekin Campus production   $ 17,450     $ 17,535  
Other production    

12,691

      

30,107

  
Corporate activities     127       267  
    $

30,268

     $

47,909

  

Interest expense:                
Marketing and distribution   $ 1,574     $ 3,053  
Pekin Campus production     6,038       7,556  
Other production     334       13  
Corporate activities     9,997       9,584  
    $ 17,943     $ 20,206  

The following table sets forth the Company’s total assets by operating segment (in thousands): 


    December 31,  
    2020     2019  
Total assets:            
Marketing and distribution   $ 89,337     $ 129,664  
Pekin Campus production     234,439       229,050  
Other production    

102,409

      

229,748

  
Corporate assets    

50,633

      

24,033

  
    $ 476,818     $ 612,495