Alto Ingredients, Inc. (NASDAQ: ALTO), a leading
producer and distributor of specialty alcohols and essential
ingredients, reported its fourth quarter and full year 2021
financial results for the year ended December 31, 2021.
“In 2021, by focusing on higher margin,
consistent revenue markets, we succeeded in becoming a profitable
business with significant, unique opportunities for top- and
bottom-line growth,” said Mike Kandris, CEO of Alto Ingredients.
“During 2021, we invested in capacity, expanded our protein
strategy, optimized assets, and secured valuable certifications. As
a result, net sales reached $1.2 billion, up 35% over 2020,
reflecting the solid specialty alcohol and essential ingredients
business throughout the year and exceptional renewable fuel margins
in the fourth quarter of 2021. In January 2022, we completed a
downstream integration by acquiring a small-package distributor,
Eagle Alcohol. Eagle fits perfectly into our strategic roadmap as
we continue to raise the quality of our production to the highest
grades of grain neutral spirits by further enhancing our
distillation process, optimizing our production capabilities and
integrating Eagle’s strong distribution and sales services. Also,
Eagle further diversifies our business with less emphasis on
revenue related to commodities. Looking ahead, we plan to invest
further in key differentiating assets as well as evaluate capital
expenditure programs to create long-term stakeholder value.”
Financial Results for the Three Months
Ended December 31, 2021 Compared to 2020
- Net sales were $385.5 million, compared to $168.8 million.
- Cost of goods sold was $343.4 million, compared to $155.2
million.
- Gross profit was $42.1 million, compared to $13.6 million.
- Selling, general and administrative expenses were $9.4 million,
compared to $6.7 million.
- Operating income was $37.3 million, compared to an operating
loss of $14.2 million.
- Net income available to common stockholders was $35.4 million,
or $0.49 per diluted share, compared a net loss of $20.5 million,
or $0.30 per share.
- Adjusted EBITDA was $43.4 million, compared to $16.2
million.
- Cash and cash equivalents were $50.6 million at December 31,
2021, compared to $47.7 million at December 31, 2020.
- On November 8, 2021, the company announced the sale of its
renewable fuel production facility in Stockton, California for
$24.0 million in cash.
Financial Results for the Twelve Months
Ended December 31, 2021 Compared to 2020
- Net sales were $1.2 billion, compared to $897.0 million.
- Cost of goods sold was $1.1 billion, compared to $844.2
million.
- Gross profit was $67.8 million, compared to $52.9 million.
- Selling, general and administrative expenses were $29.2
million, compared to $32.0 million.
- Operating income was $40.1 million, compared to $9.9
million.
- Net income available to common stockholders was $44.2 million,
or $0.61 per diluted share, compared to a net loss of $16.4
million, or $0.28 per share.
- Adjusted EBITDA was $76.8 million, compared to $66.6
million.
Fourth Quarter 2021 Results Conference
CallManagement will host a conference call at 2:00 p.m.
Pacific Time / 5:00 p.m. Eastern Time on Thursday, March 10, 2022,
and will deliver prepared remarks via webcast followed by a
question-and-answer session.
The webcast for the call can be accessed from
Alto Ingredients’ website at www.altoingredients.com.
Alternatively, you may dial the following number up to ten minutes
prior to the scheduled conference call time: (877) 847-6066.
International callers should dial 00-1 (970) 315-0267. The pass
code will be 3612369. If you are unable to participate in the live
call, the webcast will be archived for replay on Alto Ingredients’
website for one year. In addition, a telephonic replay will be
available at 8:00 p.m. Eastern Time on Thursday, March 10, 2022,
through 8:00 p.m. Eastern Time on Thursday, March 17, 2022. To
access the replay, please dial (855) 859-2056. International
callers should dial 00-1 (404) 537-3406. The pass code will be
3612369.
Use of Non-GAAP
MeasuresManagement believes that certain financial
measures not in accordance with generally accepted accounting
principles ("GAAP") are useful measures of operations. The company
defines Adjusted EBITDA as unaudited net income (loss) attributed
to Alto Ingredients, Inc. before interest expense, interest income,
provision (benefit) for income taxes, asset impairments, loss on
extinguishment of debt, purchase accounting adjustments, fair value
adjustments, and depreciation expense. A table is provided at the
end of this release that provides a reconciliation of Adjusted
EBITDA to its most directly comparable GAAP measure, net income
(loss) attributed to Alto Ingredients, Inc. Management provides
this non-GAAP measure so that investors will have the same
financial information that management uses, which may assist
investors in properly assessing the company's performance on a
period-over-period basis. Adjusted EBITDA is not a measure of
financial performance under GAAP and should not be considered as an
alternative to net income (loss) attributed to Alto Ingredients,
Inc. or any other measure of performance under GAAP, or to cash
flows from operating, investing or financing activities as an
indicator of cash flows or as a measure of liquidity. Adjusted
EBITDA has limitations as an analytical tool and you should not
consider this measure in isolation or as a substitute for analysis
of the company's results as reported under GAAP.
About Alto Ingredients,
Inc.Alto Ingredients, Inc. (ALTO) is a leading producer
and distributor of specialty alcohols and essential ingredients.
The company is focused on products for four key markets: Health,
Home & Beauty; Food & Beverage; Essential Ingredients; and
Renewable Fuels. The company’s customers include major food and
beverage companies and consumer products companies. For more
information, please visit www.altoingredients.com.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995 Statements and
information contained in this communication that refer to or
include Alto Ingredients’ estimated or anticipated future results
or other non-historical expressions of fact are forward-looking
statements that reflect Alto Ingredients’ current perspective of
existing trends and information as of the date of the
communication. Forward looking statements generally will be
accompanied by words such as “anticipate,” “believe,” “plan,”
“could,” “should,” “estimate,” “expect,” “forecast,” “outlook,”
“guidance,” “intend,” “may,” “might,” “will,” “possible,”
“potential,” “predict,” “project,” or other similar words, phrases
or expressions. Such forward-looking statements include, but are
not limited to, statements concerning the benefits of the
acquisition of Eagle Alcohol; and Alto Ingredients’ other plans,
objectives, expectations and intentions. It is important to note
that Alto Ingredients’ plans, objectives, expectations and
intentions are not predictions of actual performance. Actual
results may differ materially from Alto Ingredients’ current
expectations depending upon a number of factors affecting Alto
Ingredients’ business. These factors include, among others, adverse
economic and market conditions, including for specialty alcohols
and essential ingredients; export conditions and international
demand for the company’s products; fluctuations in the price of and
demand for oil and gasoline; raw material costs, including
production input costs, such as corn and natural gas; and the
effects – both positive and negative – of the coronavirus pandemic
and its resurgence or abatement. These factors also include, among
others, the inherent uncertainty associated with financial and
other projections; the anticipated size of the markets and
continued demand for Alto Ingredients’ products; the impact of
competitive products and pricing; the risks and uncertainties
normally incident to the specialty alcohol production and marketing
industries; changes in generally accepted accounting principles;
successful compliance with governmental regulations applicable to
Alto Ingredients’ facilities, products and/or businesses; changes
in laws, regulations and governmental policies; the loss of key
senior management or staff; and other events, factors and risks
previously and from time to time disclosed in Alto Ingredients’
filings with the Securities and Exchange Commission including,
specifically, those factors set forth in the “Risk Factors” section
contained in Alto Ingredients’ Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on November 12,
2021.
Media Contact:Bryon McGregor,
Alto Ingredients, Inc., 916-403-2768,
mediarelations@altoingredients.com Company IR
Contact:Michael Kramer, Alto Ingredients, Inc.,
916-403-2755, Investorrelations@altoingredients.comIR
Agency Contact: Kirsten Chapman, LHA Investor Relations,
415-433-3777, Investorrelations@altoingredients.com
|
ALTO INGREDIENTS, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(unaudited, in thousands,
except per share data) |
|
|
Three Months EndedDecember 31, |
|
Year EndedDecember 31, |
|
2021 |
|
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
Net sales |
$ |
385,492 |
|
|
$ |
168,818 |
|
|
$ |
1,207,892 |
|
|
$ |
897,023 |
|
Cost of goods sold |
|
343,379 |
|
|
|
155,181 |
|
|
|
1,140,108 |
|
|
|
844,164 |
|
Gross profit |
|
42,113 |
|
|
|
13,637 |
|
|
|
67,784 |
|
|
|
52,859 |
|
Selling, general and
administrative expenses |
|
(9,408 |
) |
|
|
(6,735 |
) |
|
|
(29,185 |
) |
|
|
(31,980 |
) |
Gain on sale of assets |
|
4,571 |
|
|
|
3,223 |
|
|
|
4,571 |
|
|
|
1,580 |
|
Gain on litigation
settlement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,750 |
|
Asset impairments |
|
— |
|
|
|
(24,356 |
) |
|
|
(3,100 |
) |
|
|
(24,356 |
) |
Income (loss) from
operations |
|
37,276 |
|
|
|
(14,231 |
) |
|
|
40,070 |
|
|
|
9,853 |
|
Income from loan
forgiveness |
|
— |
|
|
|
— |
|
|
|
9,860 |
|
|
|
— |
|
Interest expense, net |
|
(228 |
) |
|
|
(3,790 |
) |
|
|
(3,587 |
) |
|
|
(17,943 |
) |
Fair value adjustments |
|
— |
|
|
|
(2,462 |
) |
|
|
— |
|
|
|
(9,959 |
) |
Other income, net |
|
567 |
|
|
|
271 |
|
|
|
1,208 |
|
|
|
750 |
|
Income (loss) before income
taxes |
|
37,615 |
|
|
|
(20,212 |
) |
|
|
47,551 |
|
|
|
(17,299 |
) |
Provision (benefit) for income
taxes |
|
1,469 |
|
|
|
(17 |
) |
|
|
1,469 |
|
|
|
(17 |
) |
Consolidated net income
(loss) |
|
36,146 |
|
|
|
(20,195 |
) |
|
|
46,082 |
|
|
|
(17,282 |
) |
Net loss attributed to
noncontrolling interests |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,166 |
|
Net income (loss) attributed
to Alto Ingredients, Inc. |
$ |
36,146 |
|
|
$ |
(20,195 |
) |
|
$ |
46,082 |
|
|
$ |
(15,116 |
) |
Preferred stock dividends |
$ |
(319 |
) |
|
$ |
(319 |
) |
|
$ |
(1,265 |
) |
|
$ |
(1,268 |
) |
Income allocated to
participating securities |
$ |
(477 |
) |
|
$ |
— |
|
|
$ |
(600 |
) |
|
$ |
— |
|
Net income (loss) available to
common stockholders |
$ |
35,350 |
|
|
$ |
(20,514 |
) |
|
$ |
44,217 |
|
|
$ |
(16,384 |
) |
Net income (loss) per share,
basic |
$ |
0.50 |
|
|
$ |
(0.30 |
) |
|
$ |
0.62 |
|
|
$ |
(0.28 |
) |
Net income (loss) per share,
diluted |
$ |
0.49 |
|
|
$ |
(0.30 |
) |
|
$ |
0.61 |
|
|
$ |
(0.28 |
) |
Weighted-average shares
outstanding, basic |
|
71,387 |
|
|
|
67,512 |
|
|
|
71,098 |
|
|
|
58,609 |
|
Weighted-average shares
outstanding, diluted |
|
72,222 |
|
|
|
67,512 |
|
|
|
72,219 |
|
|
|
58,609 |
|
|
ALTO INGREDIENTS, INC.CONSOLIDATED BALANCE
SHEETS(unaudited, in thousands, except par
value) |
|
|
|
|
|
|
December 31, |
|
December 31, |
ASSETS |
2021 |
|
2020 |
Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ |
50,612 |
|
$ |
47,667 |
Restricted cash |
|
11,513 |
|
|
520 |
Accounts receivable, net |
|
86,888 |
|
|
43,491 |
Inventories |
|
54,373 |
|
|
37,925 |
Derivative assets |
|
15,839 |
|
|
17,149 |
Assets held-for-sale |
|
1,000 |
|
|
58,295 |
Other current assets |
|
9,301 |
|
|
8,999 |
Total current assets |
|
229,526 |
|
|
214,046 |
Property and equipment, net |
|
222,550 |
|
|
229,486 |
Other Assets: |
|
|
Right of use operating lease assets, net |
|
13,413 |
|
|
11,046 |
Notes receivable |
|
11,641 |
|
|
14,337 |
Other assets |
|
7,823 |
|
|
7,903 |
Total other assets |
|
32,877 |
|
|
33,286 |
Total Assets |
$ |
484,953 |
|
$ |
476,818 |
|
ALTO INGREDIENTS, INC.CONSOLIDATED BALANCE
SHEETS (CONTINUED)(unaudited, in thousands, except
par value) |
|
|
|
|
December 31, |
|
December 31, |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
2021 |
|
2020 |
Current Liabilities: |
|
|
|
|
|
Accounts payable – trade |
$ |
23,251 |
|
|
$ |
13,047 |
|
Accrued liabilities |
|
21,307 |
|
|
|
11,101 |
|
Current portion – operating leases |
|
3,909 |
|
|
|
2,180 |
|
Current portion – long-term debt |
|
— |
|
|
|
25,533 |
|
Derivative liabilities |
|
13,582 |
|
|
|
— |
|
Liabilities held-for-sale |
|
— |
|
|
|
19,542 |
|
Other current liabilities |
|
7,553 |
|
|
|
15,524 |
|
Total current liabilities |
|
69,602 |
|
|
|
86,927 |
|
|
|
|
Long-term debt, net of current portion |
|
50,361 |
|
|
|
71,807 |
|
Operating leases, net of current portion |
|
9,382 |
|
|
|
8,715 |
|
Other liabilities |
|
10,394 |
|
|
|
13,134 |
|
Total Liabilities |
|
139,739 |
|
|
|
180,583 |
|
|
|
|
Stockholders’ Equity: |
|
|
Alto Ingredients, Inc. Stockholders’ Equity: |
|
|
Preferred stock, $0.001 par value; 10,000 shares authorized;
Series A: 0 shares issued and outstanding as of
December 31, 2021 and 2020 Series B: 927
shares issued and outstanding as of December 31, 2021
and 2020 |
|
1 |
|
|
|
1 |
|
Common stock, $0.001 par value; 300,000 shares authorized;
72,778 and 72,487 shares issued and outstanding as of
December 31, 2021 and 2020, respectively |
|
73 |
|
|
|
72 |
|
Non-voting common stock, $0.001 par value; 3,553 shares
authorized; 1 share issued and outstanding as of
December 31, 2021 and 2020 |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,037,205 |
|
|
|
1,036,638 |
|
Accumulated other comprehensive loss |
|
(284 |
) |
|
|
(3,878 |
) |
Accumulated deficit |
|
(691,781 |
) |
|
|
(736,598 |
) |
Total Stockholders’ Equity |
|
345,214 |
|
|
|
296,235 |
|
Total Liabilities and Stockholders’ Equity |
$ |
484,953 |
|
|
$ |
476,818 |
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net
Income (Loss)
|
Three Months EndedDecember 31, |
|
Years EndedDecember 31, |
(unaudited) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Net income (loss) attributed to Alto Ingredients, Inc. |
$ |
36,146 |
|
|
$ |
(20,195 |
) |
|
$ |
46,082 |
|
|
$ |
(15,116 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
228 |
|
|
|
3,790 |
|
|
|
3,587 |
|
|
|
17,943 |
|
Interest income |
|
(177 |
) |
|
|
(190 |
) |
|
|
(730 |
) |
|
|
(768 |
) |
Asset impairments |
|
— |
|
|
|
24,356 |
|
|
|
3,100 |
|
|
|
24,356 |
|
Fair value adjustments |
|
— |
|
|
|
2,462 |
|
|
|
— |
|
|
|
9,959 |
|
Provision (benefit) for income taxes |
|
1,469 |
|
|
|
(17 |
) |
|
|
1,469 |
|
|
|
(17 |
) |
Depreciation expense |
|
5,772 |
|
|
|
6,015 |
|
|
|
23,292 |
|
|
|
30,269 |
|
Total adjustments |
|
7,292 |
|
|
|
36,416 |
|
|
|
30,718 |
|
|
|
81,742 |
|
Adjusted EBITDA |
$ |
43,438 |
|
|
$ |
16,221 |
|
|
$ |
76,800 |
|
|
$ |
66,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commodity Price Performance
|
Three Months EndedDecember 31, |
|
Years EndedDecember 31, |
(unaudited) |
2021 |
|
2020 |
|
2021 |
|
2020 |
Renewable fuel production gallons sold (in millions) |
|
42.6 |
|
|
33.0 |
|
|
161.1 |
|
|
181.0 |
Specialty alcohol production
gallons sold (in millions) |
|
26.3 |
|
|
16.0 |
|
|
89.5 |
|
|
90.9 |
Third party renewable fuel
gallons sold (in millions) |
|
48.5 |
|
|
51.6 |
|
|
229.0 |
|
|
264.4 |
Total gallons sold (in
millions) |
|
117.4 |
|
|
100.6 |
|
|
479.6 |
|
|
536.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Total gallons produced (in
millions) |
|
69.6 |
|
|
53.0 |
|
|
251.7 |
|
|
262.1 |
Production capacity
utilization |
|
74% |
|
|
47% |
|
|
60% |
|
|
53% |
|
|
|
|
|
|
|
|
|
|
|
|
Average sales price per
gallon |
$ |
3.04 |
|
$ |
1.72 |
|
$ |
2.46 |
|
$ |
1.63 |
Average CBOT ethanol price per
gallon |
$ |
2.19 |
|
$ |
1.41 |
|
$ |
2.11 |
|
$ |
1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
Corn cost – CBOT equivalent |
$ |
5.69 |
|
$ |
3.79 |
|
$ |
5.70 |
|
$ |
3.56 |
Average basis |
$ |
0.49 |
|
$ |
0.27 |
|
$ |
0.52 |
|
$ |
0.28 |
Delivered cost of corn |
$ |
6.18 |
|
$ |
4.06 |
|
$ |
6.22 |
|
$ |
3.84 |
|
|
|
|
|
|
|
|
|
|
|
|
Total essential ingredient tons sold (in thousands) |
|
349.7 |
|
|
270.0 |
|
|
1,236.2 |
|
|
1,447.5 |
Essential ingredient return %
(1) |
|
33.5% |
|
|
42.6% |
|
|
33.7% |
|
|
44.1% |
________________ |
|
|
|
|
|
|
|
|
|
|
|
(1) Essential ingredient revenue as a percentage of delivered cost
of corn. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Financials
(unaudited) |
Three Months EndedDecember 31, |
|
Years EndedDecember 31, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pekin Campus production, recorded
as gross: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcohol sales |
$ |
156,227 |
|
|
$ |
71,854 |
|
|
$ |
498,195 |
|
|
$ |
330,432 |
|
Essential ingredient sales |
|
48,865 |
|
|
|
32,103 |
|
|
|
189,535 |
|
|
|
130,270 |
|
Intersegment sales |
|
273 |
|
|
|
218 |
|
|
|
1,193 |
|
|
|
645 |
|
Total Pekin Campus sales |
|
205,365 |
|
|
|
104,175 |
|
|
|
688,923 |
|
|
|
461,347 |
|
Marketing and distribution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcohol sales, gross |
$ |
123,720 |
|
|
$ |
43,585 |
|
|
$ |
379,422 |
|
|
$ |
256,209 |
|
Alcohol sales, net |
|
264 |
|
|
|
405 |
|
|
|
1,753 |
|
|
|
1,529 |
|
Intersegment sales |
|
2,784 |
|
|
|
1,898 |
|
|
|
10,061 |
|
|
|
9,648 |
|
Total marketing and distribution sales |
|
126,768 |
|
|
|
45,888 |
|
|
|
391,236 |
|
|
|
267,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other production, recorded as
gross: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcohol sales |
$ |
44,622 |
|
|
$ |
15,800 |
|
|
$ |
107,931 |
|
|
$ |
137,703 |
|
Essential ingredient sales |
|
11,794 |
|
|
|
5,071 |
|
|
|
31,056 |
|
|
|
40,880 |
|
Intersegment sales |
|
68 |
|
|
|
187 |
|
|
|
964 |
|
|
|
1,309 |
|
Total Other production sales |
|
56,484 |
|
|
|
21,058 |
|
|
|
139,951 |
|
|
|
179,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment eliminations |
|
(3,125 |
) |
|
|
(2,303 |
) |
|
|
(12,218 |
) |
|
|
(11,602 |
) |
Net sales as reported |
$ |
385,492 |
|
|
$ |
168,818 |
|
|
$ |
1,207,892 |
|
|
$ |
897,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pekin Campus production |
$ |
169,595 |
|
|
$ |
89,316 |
|
|
$ |
638,371 |
|
|
$ |
389,125 |
|
Marketing and distribution |
|
125,567 |
|
|
|
42,637 |
|
|
|
371,371 |
|
|
|
253,465 |
|
Other production |
|
49,348 |
|
|
|
25,069 |
|
|
|
136,401 |
|
|
|
206,412 |
|
Intersegment eliminations |
|
(1,131 |
) |
|
|
(1,841 |
) |
|
|
(6,035 |
) |
|
|
(4,838 |
) |
Cost of goods sold as
reported |
$ |
343,379 |
|
|
$ |
155,181 |
|
|
$ |
1,140,108 |
|
|
$ |
844,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pekin Campus production |
$ |
35,770 |
|
|
$ |
14,859 |
|
|
$ |
50,552 |
|
|
$ |
72,222 |
|
Marketing and distribution |
|
1,201 |
|
|
|
3,251 |
|
|
|
19,865 |
|
|
|
13,921 |
|
Other production |
|
7,136 |
|
|
|
(4,011 |
) |
|
|
3,550 |
|
|
|
(26,520 |
) |
Intersegment eliminations |
|
(1,994 |
) |
|
|
(462 |
) |
|
|
(6,183 |
) |
|
|
(6,764 |
) |
Gross profit as reported |
$ |
42,113 |
|
|
$ |
13,637 |
|
|
$ |
67,784 |
|
|
$ |
52,859 |
|
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