Alto Ingredients, Inc. (NASDAQ:ALTO) Q2 2022 Earnings Conference Call August 8, 2022 5:00 PM ET Company Participants Kirsten Chapman - LHA, Investor Relations Mike Kandris - Director and Chief Executive Officer Bryon McGregor - Chief Financial Officer Conference Call Participants Constantine Lednev - Guggenheim Partners Eric Stine - Craig Hallum Capital Group Amit Dayal - HC Wainwright David Bastian - Kingdom Capital Advisors Operator Good afternoon. And welcome to Alto Ingredients Second Quarter 2022 Resu ...

Production Capacity and Operations - The company has an annual alcohol production capacity of 350 million gallons and marketed approximately 480 million gallons of alcohols and fuel-grade ethanol in 2021[82]. - The company operates five production facilities, with significant logistical advantages for both domestic and international markets[88]. - Production capacity utilization improved to 88% for the three months ended June 30, 2022, compared to 59% in the same period of 2021[113]. - The installation of Harvesting Technology's CoPromax system at the Magic Valley facility is expected to produce over 33,000 tons of high-protein feed and contribute over $9.0 million in EBITDA annually[98]. - The expansion of corn storage capacity at the Pekin Campus is projected to yield over $2.0 million in EBITDA annually starting in Q4 2022[99]. Financial Performance - Net income for the three months ended June 30, 2022, was $22.1 million, compared to $8.4 million for the same period in 2021, representing a 163.5% increase[107]. - Adjusted EBITDA for the three months ended June 30, 2022, was $29.9 million, up from $17.0 million in the same period of 2021, reflecting a 75.5% increase[108]. - Net sales for the three months ended June 30, 2022, were $362.2 million, a 21.5% increase from $298.1 million in the same period of 2021[115]. - Consolidated gross profit declined to $8.8 million, representing a gross profit margin of 2.4%, for the three months ended June 30, 2022, compared to $15.2 million, representing a gross profit margin of 5.1%, for the same period in 2021[135]. - Net income available to common stockholders increased by $13.5 million (170.1%) for the three months ended June 30, 2022, and by $6.4 million (51.8%) for the six months ended June 30, 2022, primarily due to the cash grant from the CARES Act[149]. Costs and Expenses - Cost of goods sold for the three months ended June 30, 2022, was $353.3 million, up 24.9% from $282.9 million in the same period of 2021[115]. - Selling, general and administrative (SG&A) expenses increased by $1.8 million (24.4%) for the three months ended June 30, 2022, and by $2.4 million (16.7%) for the six months ended June 30, 2022, primarily due to increased stock compensation expenses and acquisition-related accruals[143]. - Interest expense declined by $726,000 (69.5%) for the three months ended June 30, 2022, and by $2.4 million (82.3%) for the six months ended June 30, 2022, due to lower debt balances[146]. Market and Risk Management - Ethanol sales are sensitive to global supply, crude oil prices, government regulations, and consumer demand for alternative fuels[169]. - The company is exposed to market risk regarding corn pricing, influenced by weather, planting decisions, and international trade policies[170]. - The company employs risk management strategies, including derivatives like futures and options, to mitigate market risks associated with ethanol and corn prices[171]. - For the six months ended June 30, 2022, the company recognized net gains of $21.9 million from changes in the fair values of derivative contracts[172]. - A sensitivity analysis estimated a potential adverse pre-tax income change of $32.3 million for a 10% decrease in ethanol prices based on a volume of 210.3 million gallons[173]. Cash Flow and Working Capital - Cash, cash equivalents, and restricted cash increased by $12.6 million (20.3%) to $74.7 million as of June 30, 2022, compared to $62.1 million at December 31, 2021[153]. - Working capital improved to $178.4 million at June 30, 2022, from $159.9 million at December 31, 2021, reflecting an increase in current assets[154]. - Cash provided by operating activities was $20.7 million for the six months ended June 30, 2022, compared to $4.0 million for the same period in 2021[156]. Strategic Investments and Acquisitions - The acquisition of Eagle Alcohol Company LLC for $14.0 million is expected to contribute $4.0 million in EBITDA for 2022 and between $8.0 million and $9.0 million annually starting in 2023[85][103]. - The company invested over $15.0 million in capital improvements and repair projects, including the purchase of two new boilers to enhance steam capabilities[96]. - The company is in the engineering phase of a project to bypass the local natural gas utility, expected to yield approximately $5.0 million in EBITDA annually beginning in 2024[101]. Sales and Production Trends - Total gallons sold for the three months ended June 30, 2022, decreased by 14.3% to 107.1 million gallons compared to 125.0 million gallons in the same period of 2021[113]. - Average sales price per gallon increased by 17.8% to $2.84 for the three months ended June 30, 2022, compared to $2.41 in the same period of 2021[117]. - Specialty alcohol production for the three months ended June 30, 2022, was 25.8 million gallons, consistent with the contracted volume of 90 million gallons for 2022[116]. - Net sales of essential ingredients increased by $10.3 million, or 21%, to $59.9 million for the three months ended June 30, 2022, compared to $49.6 million for the same period in 2021[119]. - Net sales of fuel-grade ethanol from the marketing and distribution segment decreased by $23.0 million, or 26%, to $63.8 million for the three months ended June 30, 2022, compared to $86.8 million for the same period in 2021[121].

Alto Ingredients, Inc. (NASDAQ:ALTO) Q1 2022 Earnings Conference Call May 9, 2022 5:00 PM ET Company Participants Kirsten Chapman - LHA Investor Relations Mike Kandris - Chief Executive Officer Bryon McGregor - Chief Financial Officer. Conference Call Participants Constantine Lednev - Guggenheim Partners Eric Stine - Craig-Hallum Operator Welcome to Alto Ingredients First Quarter 2022 Results Conference call. All participants will be in a listen-only mode [Operator Instructions] After today’s presentation, ...

Alto Ingredients, Inc. (NASDAQ:ALTO) Q4 2021 Results Conference Call March 10, 2022 5:00 PM ET Company Participants Dusty Buell - LHA IR Mike Kandris - CEO Bryon McGregor - CFO Conference Call Participants Eric Stine - Craig-Hallum Amit Dayal - H.C. Wainwright Operator Ladies and gentlemen, thank you for standing by, and welcome to Alto Ingredients Fourth Quarter 2021 and Year-end Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] ...