Alto Ingredients(ALTO) - 2024 Q1 - Quarterly Results

Alto Ingredients, Inc. First Quarter 2024 Results Executive Summary & Business Outlook The company showed improved year-over-year profitability in Q1 2024 despite weather and hedging challenges, with a positive outlook driven by market fundamentals and strategic projects Q1 2024 vs Q1 2023 Performance Highlights | Metric | Improvement (YoY) | | :--- | :--- | | Gross Profit | $0.8 Million | | Net Loss | $1.4 Million | | Adjusted EBITDA | $3.4 Million | - The company's strategies to diversify revenue, enhance capacity utilization, cut costs, and broaden operating margins are showing positive results, benefiting from improved crush margins and operational efficiencies[2] - Q1 performance was materially impacted by a January cold spike that increased costs and a $4.9 million loss from energy hedging due to unseasonably moderate weather[2] - The market outlook for the rest of 2024 is considered favorable due to solid corn inventories, better export demand for ethanol, and the EPA's summer waiver for 15% ethanol blends[3] - The company is advancing its Carbon Capture and Storage (CCS) initiative by signing a letter of intent with Vault 44.01 to store CO2 near its Pekin campus[3][4] Financial Performance Net sales declined in Q1 2024, but a larger drop in costs led to an improved gross loss, a narrower net loss per share, and better Adjusted EBITDA Consolidated Financial Results The company improved its Q1 2024 net loss to $12.0 million while total assets decreased to $434.6 million Q1 2024 vs Q1 2023 Consolidated Statement of Operations (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Sales | $240,629 | $313,891 | | Cost of Goods Sold | $243,029 | $317,055 | | Gross Loss | $(2,400) | $(3,164) | | Loss from Operations | $(10,332) | $(11,620) | | Net Loss | $(11,725) | $(13,166) | | Net Loss Available to Common Stockholders | $(12,040) | $(13,478) | | Net Loss Per Share | $(0.17) | $(0.18) | Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $29,310 | $30,014 | | Total Current Assets | $150,843 | $168,770 | | Total Assets | $434,635 | $454,241 | | Total Liabilities | $165,976 | $174,684 | | Total Stockholders' Equity | $268,659 | $279,557 | Segment Performance The Pekin Campus segment returned to profitability, contrasting with a larger loss in the Western segment and a decline in Marketing and distribution Gross Profit (Loss) by Segment (in thousands) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Pekin Campus production | $4,268 | $(1,853) | | Marketing and distribution | $3,532 | $4,212 | | Western production | $(8,460) | $(4,696) | | Total Gross Loss | $(2,400) | $(3,164) | Non-GAAP Measures (Adjusted EBITDA) Adjusted EBITDA improved to negative $7.1 million in Q1 2024 from negative $10.4 million in the prior year after non-cash and specific item adjustments Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Loss | $(11,725) | $(13,166) | | Total Adjustments | $4,672 | $2,747 | | Adjusted EBITDA | $(7,053) | $(10,419) | Operational Metrics Q1 2024 saw steady alcohol sales volumes with a mix shift to specialty, higher production, and significantly improved crush margins due to lower corn costs Sales and Production Metrics Total alcohol sales volume grew slightly to 99.0 million gallons, driven by specialty alcohol, while the average sales price per gallon declined Alcohol Sales (gallons in millions) | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total renewable fuel gallons sold | 72.7 | 77.1 | | Specialty alcohol gallons sold | 26.3 | 21.4 | | Total gallons sold | 99.0 | 98.5 | Alcohol Production (gallons in millions) | Location | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Pekin Campus | 53.6 | 53.3 | | Western production | 9.7 | 7.3 | | Total | 63.3 | 60.6 | Key Cost and Market Metrics A significant drop in the average corn cost per bushel to $4.92 drove a substantial improvement in the board corn crush per gallon Corn Cost and Market Metrics | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Corn Cost per Bushel | $4.92 | $7.07 | | PLATTS Ethanol price per gallon | $1.56 | $2.19 | | Board corn crush per gallon | $0.01 | $(0.16) | Essential Ingredients Metrics Increased sales of essential ingredients to 313.4 thousand tons improved the return as a percentage of total corn costs to 49.8% Total Essential Ingredients Sold (thousand tons) | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Pekin Campus | 212.6 | 226.9 | | Total Western production | 100.8 | 72.4 | | Total | 313.4 | 299.3 | - The consolidated essential ingredients return as a percentage of total corn costs increased to 49.8% in Q1 2024 from 45.4% in Q1 2023[27] Liquidity and Capital Resources The company maintained a stable liquidity position with $29.3 million in cash and $90.9 million in total borrowing availability - Cash and cash equivalents were $29.3 million at March 31, 2024, a slight decrease from $30.0 million at December 31, 2023[6] - Total borrowing availability was $90.9 million, consisting of $25.9 million under the operating line of credit and $65.0 million under the term loan facility[6]