Annual report [Section 13 and 15(d), not S-K Item 405]

Segments

v3.25.4
Segments
 12 Months Ended
Dec. 31, 2025
Segments [Abstract]  
SEGMENTS
5. SEGMENTS.

 

The Company reports its financial and operating performance in three segments: (1) Pekin Campus production, which includes the production and sale of alcohols and essential ingredients produced at the Company’s Pekin, Illinois campus, (2) marketing and distribution, which includes marketing and merchant trading for Company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties, and (3) Western production, which includes the production and sale of fuel-grade ethanol and essential ingredients, including liquid CO2, produced at the Company’s two Western production facilities and its liquid CO2 plant on an aggregated basis, none of which are individually so significant to be considered a separately reportable segment.

 

The Company manages and assesses the performance of its reportable segments by its gross profit (loss). As part of the Executive Committee’s review of segment-level performance, each member of the Executive Committee reviews the gross profit of the Company’s reportable segments and provides expertise and analysis from their respective areas which drive the evaluation of the performance of the Company’s reportable segments and allocation of resources to those segments. Even though the CEO has the authority to override the other members for strategic or other reasons, key decisions are made by the Executive Committee.

 

Included in income (loss) before provision (benefit) for income taxes are management fees charged by Alto Ingredients to each of the segments. The Pekin Campus production segment incurred $7,200,000, $7,200,000 and $5,280,000 in management fees for the years ended December 31, 2025, 2024 and 2023, respectively. The marketing and distribution segment incurred $5,400,000, $5,400,000 and $3,960,000 in management fees for the years ended December 31, 2025, 2024 and 2023, respectively. The Western production segment incurred $2,220,000, $3,600,000 and $2,640,000 in management fees for the years ended December 31, 2025, 2024 and 2023, respectively. Corporate and other includes the results of Eagle Alcohol and certain 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 and distribution segment markets alcohol produced by the production segments for a marketing fee. 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 upon consolidation.

 

For the years ended December 31, 2025, 2024 and 2023, capital expenditures incurred by the Pekin Campus segment were approximately $4.6 million, $6.8 million and $17.7 million, and capital expenditures incurred by the Western production segment were less than $0.1 million, and approximately $4.3 million and $11.8 million, respectively.

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

 

    Years Ended December 31,  
Net Sales   2025     2024     2023  
Pekin Campus Production, recorded as gross:                  
Alcohol sales   $ 415,801     $ 415,710     $ 502,217  
Essential ingredient sales     174,598       169,308       217,702  
Intersegment sales     1,088       1,243       1,427  
Total Pekin Campus sales     591,487       586,261       721,346  
                         
Marketing and distribution:                        
Alcohol sales, gross   $ 221,306     $ 216,524     $ 262,952  
Intersegment sales     9,827       10,833       11,654  
Total marketing and distribution sales     231,133       227,357       274,606  
                         
Western production, recorded as gross:                        
Alcohol sales   $ 67,301     $ 115,389     $ 166,971  
Essential ingredient sales     31,552       36,953       57,264  
Intersegment sales     1,697       (122 )     134  
Total Western production sales     100,550       152,220       224,369  
                         
Corporate and other     7,369       11,374       15,834  
Intersegment eliminations     (12,612 )     (11,954 )     (13,215 )
Net sales as reported   $ 917,927     $ 965,258     $ 1,222,940  
                         
Cost of goods sold:                  
Pekin Campus production   $ 572,134     $ 563,033     $ 710,088  
Marketing and distribution     214,095       213,023       259,234  
Western production     96,897       172,209       230,445  
Corporate and other     6,689       12,285       12,122  
Intersegment eliminations     (6,801 )     (5,014 )     (4,602 )
Cost of goods sold as reported   $ 883,014     $ 955,536     $ 1,207,287  
                         
Gross profit (loss):                  
Pekin Campus production   $ 19,353     $ 23,228     $ 11,258  
Marketing and distribution     17,038       14,334       15,372  
Western production     3,653       (19,989 )     (6,076 )
Corporate and other     680       (911 )     3,712  
Intersegment eliminations     (5,811 )     (6,940 )     (8,613 )
    $ 34,913     $ 9,722     $ 15,653  

Income (loss) before provision (benefit) for income taxes:

                  
Pekin Campus production   $ 15,059     $ 6,308     $ (1,560 )
Marketing and distribution     7,698       5,261       7,644  
Western production     (4,291 )     (51,086 )     (13,506 )
Corporate and other     (5,749 )     (19,294 )     (20,486 )
    $ 12,717     $ (58,811 )   $ (27,908 )
Asset impairments:                  
Pekin Campus production   $ 803     $
—
     $
—
  
Western production    
—
       21,389      
—
  
Corporate and other    
—
       3,401       6,544  
    $ 803     $ 24,790     $ 6,544  

Depreciation and amortization expense:

                  
Pekin Campus production   $ 21,620     $ 21,017     $ 19,789  
Western production     2,957       2,409       2,381  
Corporate and other     639       982       910  
    $ 25,216     $ 24,408     $ 23,080  
                         
Interest expense, net of capitalized interest:                  
Pekin Campus production   $ 2,421     $ 1,765     $ (207 )
Marketing and distribution     342       389       822  
Western production     5,391       2,829       1,164  
Corporate and other     2,611       2,661       5,646  
    $ 10,765     $ 7,644     $ 7,425  

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

 

    December 31,
2025		     December 31,
2024		  
Total assets:            
Pekin Campus production   $ 208,947       223,934  
Marketing and distribution     103,911       102,895  
Western production     43,131       44,992  
Corporate and other     32,797       29,617  
    $ 388,786     $ 401,438