Alto Ingredients(ALTO) - 2025 Q2 - Quarterly Results

Management Commentary and Business Update Management initiatives improved Q2 2025 financial position, with Western assets profitable and corporate reorganization exceeding savings goals, anticipating regulatory credit benefits - Western assets generated a gross profit, increasing by $5.6 million compared to Q2 2024, aided by a liquid CO2 facility acquisition and cold-idling the Magic Valley facility[1][3] - The marketing and distribution segment's performance improved through integrating bulk sales customers and focusing on profitable third-party ethanol marketing relationships[3] - A corporate reorganization was implemented, exceeding the annualized savings target of approximately $8 million in the second quarter[3] - Positive regulatory developments, specifically the 45Z credit extension, are expected to create opportunities for up to nearly $18 million in credits for at least two plants over the next two years[4] Financial Performance Net sales declined and gross profit shifted to loss in Q2 and H1 2025, with widening net losses, though cash and borrowing availability improved sequentially Q2 2025 Financial Results (vs. Q2 2024) Q2 2025 saw net sales decline, a shift to gross loss, and a widened net loss due to unfavorable derivatives and lower market crush Q2 2025 vs. Q2 2024 Financial Highlights | Financial Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $218.4 million | $236.5 million | | Gross Profit (Loss) | ($1.9 million) | $7.6 million | | SG&A Expenses | $6.2 million | $9.0 million | | Net Loss Attributable to Common Stockholders | ($11.3 million) | ($3.4 million) | | Net Loss Per Share | ($0.15) | ($0.05) | | Adjusted EBITDA | ($0.2 million) | ($5.9 million) | - The decline in gross profit was impacted by a net unfavorable change of $5.6 million in derivatives and an average market crush that was $0.10 lower than in Q2 2024[5] H1 2025 Financial Results (vs. H1 2024) H1 2025 net sales decreased, resulting in a gross loss and a widened net loss compared to the prior year H1 2025 vs. H1 2024 Financial Highlights | Financial Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Sales | $445.0 million | $477.1 million | | Gross Profit (Loss) | ($3.7 million) | $5.2 million | | SG&A Expenses | $13.4 million | $16.9 million | | Net Loss Attributable to Common Stockholders | ($23.3 million) | ($15.5 million) | | Net Loss Per Share | ($0.31) | ($0.21) | | Adjusted EBITDA | ($4.6 million) | ($13.0 million) | - The year-over-year gross profit decline was affected by a net unfavorable impact of $7.2 million from derivatives[7] Balance Sheet and Liquidity Cash and equivalents increased sequentially to $29.8 million, with total borrowing availability of $70 million as of June 30, 2025 Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $29,768 | $35,469 | | Total Current Assets | $149,725 | $153,118 | | Total Assets | $393,065 | $401,438 | | Long-term debt, net | $118,323 | $92,904 | | Total Liabilities | $185,220 | $176,375 | | Total Stockholders' Equity | $207,845 | $225,063 | - The company had $70 million in borrowing availability as of June 30, 2025[8] Segment Performance Q2 2025 segment performance varied, with Western production turning profitable, Pekin Campus shifting to a loss, and Marketing and distribution improving gross profit Gross Profit (Loss) by Segment (Q2, in thousands) | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Pekin Campus production | $(5,845) | $10,144 | | Marketing and distribution | $4,002 | $3,172 | | Western production | $1,858 | $(3,761) | Gross Profit (Loss) by Segment (H1, in thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Pekin Campus production | $(8,920) | $14,410 | | Marketing and distribution | $7,916 | $6,702 | | Western production | $601 | $(12,347) | Key Operating Metrics Q2 2025 saw decreased alcohol gallons sold, stable production, increased corn costs, and a significant drop in market board corn crush per gallon Alcohol Sales and Production (Gallons in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total renewable fuel gallons sold | 66.8 | 74.1 | | Specialty alcohol gallons sold | 19.9 | 21.0 | | Total gallons sold | 86.7 | 95.1 | | Total production gallons | 59.2 | 58.6 | Cost and Market Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Consolidated corn cost per bushel | $4.98 | $4.68 | | Board corn crush per gallon | $0.11 | $0.21 | Non-GAAP Financial Measures Adjusted EBITDA, a non-GAAP measure, improved significantly to negative $0.2 million in Q2 2025, driven by lower derivative losses and reduced acquisition expenses - Management defines Adjusted EBITDA as net income (loss) adjusted for interest, taxes, depreciation, amortization, asset impairments, unrealized derivative gains/losses, and acquisition-related expenses[11] Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss | $(10,997) | $(3,106) | | Total adjustments | $10,766 | $(2,821) | | Adjusted EBITDA | $(231) | $(5,927) | Conference Call Information Alto Ingredients will host a conference call and webcast on August 6, 2025, at 5:00 p.m. ET to discuss Q2 2025 financial results - Event: Q2 2025 Results Conference Call[9] - Date and Time: Wednesday, August 6, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time[9] - Access: The webcast will be available on the company's website. Dial-in and replay information is also provided[10]