Annual report pursuant to Section 13 and 15(d)

Segments

v3.24.0.1
Segments
 12 Months Ended
Dec. 31, 2023
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 produced the Company’s two western production facilities on an aggregated basis, none of which are individually so significant to be considered a separately reportable segment.

 

Income before provision for income taxes includes management fees charged by Alto Ingredients to the segments. The Pekin Campus production segment incurred $5,280,000, $5,046,000 and $4,344,000 in management fees for the years ended December 31, 2023, 2022 and 2021, respectively. The marketing and distribution segment incurred $3,960,000, $3,840,000 and $3,480,000 in management fees for the years ended December 31, 2023, 2022 and 2021, respectively. The Western production segment incurred $2,640,000, $2,400,000 and $1,950,000 in management fees for the years ended December 31, 2023, 2022 and 2021, respectively. Corporate and other includes the results of Eagle Alcohol and 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, as discussed in Note 4. 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, 2023, 2022 and 2021, capital expenditures incurred by the Pekin Campus segment were approximately $17.7 million, $25.7 million and $14.3 million, and capital expenditures incurred by the Western production segment were approximately $11.8 million, $12.3 million $2.1 million, respectively.

 

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

 

    Years Ended December 31,  
Net Sales:   2023     2022     2021  
Pekin Campus production, recorded as gross:                  
Alcohol sales   $ 502,217     $ 521,273     $ 498,195  
Essential ingredient sales     217,702       225,871       189,535  
Intersegment sales     1,427       1,212       1,193  
Total Pekin Campus sales     721,346       748,356       688,923  
                         
Marketing and distribution:                        
Alcohol sales, gross   $ 262,587     $ 227,626     $ 379,422  
Alcohol sales, net     365       1,225       1,753  
Intersegment sales     11,654       12,459       10,061  
Total marketing and distribution sales     274,606       241,310       391,236  
                         
Western Production, recorded as gross:                        
Alcohol sales   $ 166,971     $ 253,605     $ 107,931  
Essential ingredient sales     57,264       90,209       31,056  
Intersegment sales     134       22       964  
Total Western production sales     224,369       343,836       139,951  
                         
Corporate and other     15,834       15,812       —  
                         
Intersegment eliminations     (13,215 )     (13,693 )     (12,218 )
Net sales as reported   $ 1,222,940     $ 1,335,621     $ 1,207,892  
                       
Cost of goods sold:                  
Pekin Campus production   $ 710,088     $ 772,755     $ 638,371  
Marketing and distribution     259,234       229,288       371,371  
Western production     230,445       353,775       136,401  
Corporate and other     12,122       12,167       —  
Intersegment eliminations     (4,602 )     (4,814 )     (6,035 )
Cost of goods sold as reported   $ 1,207,287     $ 1,363,171     $ 1,140,108  
                         
Income (loss) before provision for income taxes:                  
Pekin Campus production   $ (1,560 )   $ (27,376 )   $ 41,622  
Marketing and distribution     7,644       3,748       11,756  
Western production     (13,506 )     (7,209 )     (3,762 )
Corporate and other     (20,486 )     (8,835 )     (2,065 )
    $ (27,908 )   $ (39,672 )   $ 47,551  
Depreciation and amortization expense:                        
Pekin Campus production   $ 19,789     $ 19,136     $ 17,352  
Western production     2,381       5,085       5,890  
Corporate and other     910       874       50  
    $ 23,080     $ 25,095     $ 23,292  
                   
Interest expense, net of capitalized interest:                  
Pekin Campus production   $ (207 )   $ (381 )   $ 756  
Marketing and distribution     822       1,658       963  
Western production     1,164       (339 )     167  
Corporate and other     5,646       889       1,701  
    $ 7,425     $ 1,827     $ 3,587  

 

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

 

    December 31,
2023		     December 31,
2022		  
Total assets:            
Pekin Campus production   $ 251,048       257,089  
Marketing and distribution     101,196       114,755  
Western production     57,533       51,886  
Corporate and other     44,464       54,591  
    $ 454,241     $ 478,321