Alto Ingredients(ALTO) - 2025 Q1 - Quarterly Results

First Quarter 2025 Results Overview The company reported improved gross margin and Adjusted EBITDA, driven by strategic acquisitions and cost-saving initiatives CEO Statement The CEO highlighted that the first quarter of 2025 saw year-over-year improvements in gross margin and Adjusted EBITDA, primarily driven by the acquisition of the Alto Carbonic CO2 processing plant and a corporate reorganization. The company is capitalizing on strong European demand for ISCC renewable fuel to offset domestic market softness and is actively exploring new revenue streams, including opportunities from E15 adoption and the Illinois Clean Transportation Standard Act - Gross margin and Adjusted EBITDA improved year-over-year, driven by the acquisition of the Alto Carbonic CO2 processing plant, which lowered costs and increased productivity[2] - A corporate rightsizing initiative is expected to generate approximately $8 million in annual savings starting in the second quarter of 2025[2] - The company increased sales of ISCC renewable fuel to European markets, where demand and premiums are strong, to offset softening domestic markets for high-quality alcohol[3] - Alto Ingredients is monitoring potential growth from the year-round adoption of E15 and opportunities under the Illinois Clean Transportation Standard Act (SB41)[3] Financial Results The company's first quarter financial performance showed a decrease in net sales but improved gross loss and Adjusted EBITDA year-over-year Financial Highlights (Q1 2025 vs. Q1 2024) For the first quarter of 2025, Alto Ingredients reported a decrease in net sales to $226.5 million compared to $240.6 million in the prior year. Despite lower sales, the company narrowed its gross loss to $1.8 million from $2.4 million and improved its Adjusted EBITDA to a loss of $4.4 million from a loss of $7.1 million year-over-year. The net loss attributable to common stockholders was flat at $12.0 million Q1 2025 vs. Q1 2024 Financial Comparison | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $226.5 million | $240.6 million | | Gross Loss | ($1.8 million) | ($2.4 million) | | SG&A Expenses | $7.2 million | $7.9 million | | Net Loss Attributable to Common Stockholders | ($12.0 million) | ($12.0 million) | | Net Loss per Share | ($0.16) | ($0.17) | | Adjusted EBITDA | ($4.4 million) | ($7.1 million) | - Cash and cash equivalents decreased to $26.8 million at March 31, 2025, from $35.5 million at December 31, 2024[6] - As of March 31, 2025, the company had total borrowing availability of $76.7 million, comprising $11.7 million under its operating line of credit and $65.0 million under its term loan facility[6] Consolidated Statements of Operations The consolidated statement of operations for the three months ended March 31, 2025, details a net loss of $11.7 million on net sales of $226.5 million. This is compared to a net loss of $11.7 million on net sales of $240.6 million in the same period of 2024. The loss from operations improved to $9.0 million from $10.3 million year-over-year Consolidated Statements of Operations (unaudited, in thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net sales | $ 226,540 | $ 240,629 | | Cost of goods sold | 228,347 | 243,029 | | Gross loss | (1,807) | (2,400) | | Selling, general and administrative expenses | (7,190) | (7,932) | | Loss from operations | (8,997) | (10,332) | | Interest expense, net | (2,729) | (1,634) | | Net loss | $ (11,679) | $ (11,725) | | Net loss per share, basic and diluted | $ (0.16) | $ (0.17) | Consolidated Balance Sheets As of March 31, 2025, Alto Ingredients' balance sheet showed total assets of $402.2 million, a slight increase from $401.4 million at year-end 2024. Total liabilities increased to $188.3 million from $176.4 million, primarily due to a rise in long-term debt. Consequently, total stockholders' equity decreased to $213.9 million from $225.1 million over the quarter Consolidated Balance Sheet Highlights (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $ 153,461 | $ 153,118 | | Cash and cash equivalents | $ 26,778 | $ 35,469 | | Total Assets | $ 402,209 | $ 401,438 | | Total Current Liabilities | $ 53,116 | $ 57,804 | | Long-term debt | $ 110,664 | $ 92,904 | | Total Liabilities | $ 188,289 | $ 176,375 | | Total Stockholders' Equity | $ 213,920 | $ 225,063 | Reconciliation of Adjusted EBITDA to Net Loss The company reconciled its GAAP net loss of $11.7 million for Q1 2025 to a non-GAAP Adjusted EBITDA of negative $4.4 million. Key adjustments included adding back interest expense ($2.7 million) and depreciation and amortization ($6.3 million), and subtracting unrealized derivative gains ($1.6 million). This represents an improvement from an Adjusted EBITDA of negative $7.1 million in Q1 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Three Months Ended March 31, | | :--- | :--- | :--- | | | 2025 | 2024 | | Net loss | $ (11,679) | $ (11,725) | | Adjustments: | | | | Interest expense | 2,729 | 1,634 | | Unrealized derivatives gains | (1,634) | (3,190) | | Depreciation and amortization expense | 6,266 | 5,728 | | Acquisition-related expense | — | 675 | | Adjusted EBITDA | $ (4,402) | $ (7,053) | Segment Financials In Q1 2025, the Pekin Campus segment's gross profit swung to a loss of $3.1 million from a $4.3 million profit in Q1 2024. In contrast, the Western production segment significantly narrowed its gross loss to $1.3 million from $8.5 million. The Marketing and distribution segment saw its gross profit increase to $3.9 million from $3.5 million year-over-year Segment Gross Profit (Loss) (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Pekin Campus production | $ (3,073) | $ 4,268 | | Marketing and distribution | $ 3,914 | $ 3,532 | | Western production | $ (1,258) | $ (8,460) | | Total Gross Loss | $ (1,807) | $ (2,400) | Sales and Operating Metrics Total alcohol gallons sold in Q1 2025 decreased to 89.6 million from 99.0 million in Q1 2024, driven by lower renewable fuel sales. However, the average sales price per gallon rose to $1.93 from $1.86. Total essential ingredients sold were nearly flat at 310.8 thousand tons. The essential ingredients return as a percentage of corn cost for the Pekin Campus decreased to 48.0%, while the Western production return improved significantly to 49.0% Alcohol Gallons Sold (in millions) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total renewable fuel gallons sold | 65.3 | 72.7 | | Specialty alcohol gallons sold | 24.3 | 26.3 | | Total gallons sold | 89.6 | 99.0 | Key Operating Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Average sales price per gallon | $1.93 | $1.86 | | Total corn cost per bushel | $4.81 | $4.92 | | Total Essential Ingredients Sold (thousand tons) | 310.8 | 313.4 | | Consolidated essential ingredients return % | 48.2% | 49.8% | Additional Information This section provides details on the upcoming conference call, the company's use of non-GAAP financial measures, and important safe harbor statements regarding forward-looking information Conference Call Information Alto Ingredients will host a conference call on Wednesday, May 7, 2025, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its first-quarter 2025 financial results. The announcement provides details for accessing the live webcast and a telephonic replay, which will be available until May 14, 2025 - A conference call to discuss Q1 2025 results is scheduled for May 7, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time[7] - Access to the webcast is available on the company's website, and a telephonic replay will be available from May 7 to May 14, 2025, with pass code 8723820[8] Use of Non-GAAP Measures The company explains its use of Adjusted EBITDA, a non-GAAP financial measure. It is defined as net income (loss) before interest, taxes, depreciation, amortization, asset impairments, unrealized derivative gains and losses, and acquisition-related expenses. Management believes this measure helps investors assess the company's performance on a period-over-period basis, but cautions it should not be considered in isolation - The company uses Adjusted EBITDA, a non-GAAP measure, to provide investors with the same financial information that management uses for performance assessment[9] - Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, depreciation & amortization, asset impairments, unrealized derivative gains/losses, and acquisition-related expenses[9] Safe Harbor Statement This section serves as a legal disclaimer, noting that the report contains forward-looking statements about the company's future performance, cost-saving initiatives, and market opportunities. It warns that actual results could differ materially from these projections due to a variety of risk factors, including economic conditions, raw material costs, regulatory changes, and other risks disclosed in the company's SEC filings - The report contains forward-looking statements concerning projected outlook, performance, cost savings initiatives, and opportunities like E15 adoption and the Illinois Clean Transportation Standard Act[11] - Actual results may differ materially due to various risk factors, including adverse economic and market conditions, raw material costs, inflation, and regulatory developments, as detailed in the company's Form 10-K[11]