Alto Ingredients, Inc. (NASDAQ: ALTO), a leading
producer and distributor of specialty alcohols and essential
ingredients, reported its financial results for the quarter ended
March 31, 2022.
“Our first quarter results validated our
strategy to invest in specialty alcohols and essential
ingredients,” said Mike Kandris CEO of Alto Ingredients. “Product
diversification, with increased sales from higher margin products
combined with operational improvements, partially offset the impact
of the challenging commodities market. To further our strategy, we
acquired a small-package distributor serving premium spirits
markets in January and qualified for additional certifications
valuable to pharmaceutical customers in February. These initiatives
broadened our opportunities and enhanced our position in the
marketplace. We are evaluating new capital expenditure programs to
create additional long-term stakeholder value. We remain focused on
executing on our strategic goals, investing for future growth and
diversifying our product portfolio.”
Financial Results for the Three Months
Ended March 31, 2022 Compared to 2021
• Net sales
were $308.1 million, compared to $218.7 million.• Cost of
goods sold was $303.3 million, compared to $204.9 million.•
Gross profit was $4.8 million, compared to $13.8 million.•
Selling, general and administrative expenses were $7.6 million,
compared to $7.0 million.• Operating loss was $2.9 million,
compared to operating income of $5.6 million.• Net loss
available to common stockholders was $2.9 million, or $0.04 per
share, compared to net income of $4.4 million, or $0.06 per diluted
share.• Adjusted EBITDA was $4.4 million, compared to $13.4
million.• Cash and cash equivalents were $36.2 million at
March 31, 2022, compared to $50.6 million at December 31, 2021.
First Quarter 2022 Results Conference
Call Management will host a conference call at 2:00 p.m.
Pacific Time / 5:00 p.m. Eastern Time on Monday, May 9, 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: (866) 777-2509. International
callers should dial (412) 317-5413. Please ask to join the Alto
Ingredients 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 Monday, May 9, 2022,
through 8:00 p.m. Eastern Time on Wednesday, May 16, 2022. To
access the replay, please dial (877) 344-7529. International
callers should dial (412) 317-0088. The pass code will be
7162739.
Use of Non-GAAP Measures
Management 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, acquisition-related expense, fair value
adjustments, and depreciation and amortization 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 plant and product certifications;
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’ Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
March 15, 2022.
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 EndedMarch 31, |
|
|
2022 |
|
|
|
2021 |
|
Net sales |
$ |
308,118 |
|
|
$ |
218,734 |
|
Cost of goods sold |
|
303,345 |
|
|
|
204,897 |
|
Gross profit |
|
4,773 |
|
|
|
13,837 |
|
Selling, general and
administrative expenses |
|
7,629 |
|
|
|
7,014 |
|
Asset impairment |
|
— |
|
|
|
1,200 |
|
Income (loss) from
operations |
|
(2,856 |
) |
|
|
5,623 |
|
Interest expense, net |
|
(200 |
) |
|
|
(1,885 |
) |
Other income, net |
|
454 |
|
|
|
940 |
|
Income (loss) before provision
for income taxes |
|
(2,602 |
) |
|
|
4,678 |
|
Provision for income
taxes |
|
— |
|
|
|
— |
|
Net income (loss) |
$ |
(2,602 |
) |
|
$ |
4,678 |
|
Preferred stock dividends |
$ |
(312 |
) |
|
$ |
(312 |
) |
Net income (loss) available to
common stockholders |
$ |
(2,914 |
) |
|
$ |
4,366 |
|
Net income (loss) per share,
basic and diluted |
$ |
(0.04 |
) |
|
$ |
0.06 |
|
Weighted-average shares
outstanding, basic |
|
71,390 |
|
|
|
70,351 |
|
Weighted-average shares
outstanding, diluted |
|
71,390 |
|
|
|
72,464 |
|
ALTO INGREDIENTS,
INC.CONSOLIDATED BALANCE
SHEETS(unaudited, in thousands, except par
value)
ASSETS |
|
March 31, 2022 |
|
|
|
December 31, 2021 |
Current Assets: |
|
|
Cash and cash equivalents |
$ |
36,184 |
|
|
$ |
50,612 |
Restricted cash |
|
23,799 |
|
|
|
11,513 |
Accounts receivable, net |
|
80,611 |
|
|
|
86,888 |
Inventories |
|
58,491 |
|
|
|
54,373 |
Derivative instruments |
|
19,498 |
|
|
|
15,839 |
Notes receivable, current |
|
12,385 |
|
|
|
3,125 |
Other current assets |
|
10,245 |
|
|
|
7,176 |
Total current assets |
|
241,213 |
|
|
|
229,526 |
Property and equipment, net |
|
220,996 |
|
|
|
222,550 |
Other Assets: |
|
|
|
|
|
Right of use operating lease assets, net |
|
15,099 |
|
|
|
13,413 |
Notes receivable, noncurrent |
|
— |
|
|
|
11,641 |
Intangible assets, net |
|
9,460 |
|
|
|
2,678 |
Goodwill |
|
5,958 |
|
|
|
— |
Other assets |
|
5,142 |
|
|
|
5,145 |
Total other assets |
|
35,659 |
|
|
|
32,877 |
Total Assets |
$ |
497,868 |
|
|
$ |
484,953 |
ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS
(CONTINUED)(unaudited, in thousands, except par
value)
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2022 |
|
|
|
December 31, 2021 |
|
Current
Liabilities: |
|
|
|
|
|
|
|
Accounts payable – trade |
$ |
21,750 |
|
|
$ |
23,251 |
|
Accrued liabilities |
|
19,479 |
|
|
|
21,307 |
|
Current portion – operating leases |
|
4,297 |
|
|
|
3,909 |
|
Derivative instruments |
|
27,487 |
|
|
|
13,582 |
|
Other current liabilities |
|
7,168 |
|
|
|
7,553 |
|
Total current liabilities |
|
80,181 |
|
|
|
69,602 |
|
|
|
|
|
|
|
|
|
Long-term
debt |
|
53,681 |
|
|
|
50,361 |
|
Operating leases,
net of current portion |
|
10,705 |
|
|
|
9,382 |
|
Other
liabilities |
|
10,336 |
|
|
|
10,394 |
|
Total
Liabilities |
|
154,903 |
|
|
|
139,739 |
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
Alto Ingredients,
Inc. Stockholders’ Equity: |
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 10,000 shares authorized; Series
A: no shares issued and outstanding as of |
|
|
|
|
|
|
|
March 31, 2022 and December 31, 2021 |
|
|
|
|
|
|
|
Series B: 927 shares issued and outstanding as of |
|
|
|
|
|
|
|
March 31, 2022 and December 31, 2021 |
|
1 |
|
|
|
1 |
|
Common stock, $0.001 par value; 300,000 shares
authorized; |
|
|
|
|
|
|
|
74,411 and 72,778 shares issued and outstanding as of |
|
|
|
|
|
|
|
March 31, 2022 and December 31, 2021, respectively |
|
74 |
|
|
|
73 |
|
Non-voting common stock, $0.001 par value; 3,553 shares |
|
|
|
|
|
|
|
authorized; 1 share issued and outstanding as of March 31, |
|
|
|
|
|
|
|
2022 and December 31, 2021 |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,037,869 |
|
|
|
1,037,205 |
|
Accumulated other comprehensive loss |
|
(284 |
) |
|
|
(284 |
) |
Accumulated deficit |
|
(694,695 |
) |
|
|
(691,781 |
) |
Total Stockholders’ Equity |
|
342,965 |
|
|
|
345,214 |
|
Total Liabilities and Stockholders’ Equity |
$ |
497,868 |
|
|
$ |
484,953 |
|
Reconciliation of Adjusted EBITDA to Net
Income (Loss)
|
Three Months EndedMarch 31, |
(in thousands) (unaudited) |
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
$ |
(2,602 |
) |
|
$ |
4,678 |
|
Adjustments: |
|
|
Interest expense |
|
200 |
|
|
|
1,885 |
|
Interest income |
|
(158 |
) |
|
|
(184 |
) |
Acquisition-related expense |
|
875 |
|
|
|
— |
|
Asset impairments |
|
— |
|
|
|
1,200 |
|
Depreciation and amortization expense |
|
6,134 |
|
|
|
5,860 |
|
Total adjustments |
|
7,051 |
|
|
|
8,761 |
|
Adjusted EBITDA |
$ |
4,449 |
|
|
$ |
13,439 |
|
Commodity Price Performance
|
Three Months EndedMarch 31, |
(unaudited) |
|
2022 |
|
|
|
2021 |
|
Renewable fuel production
gallons sold (in millions) |
|
49.2 |
|
|
|
39.0 |
|
Specialty alcohol production
gallons sold (in millions) |
|
23.3 |
|
|
|
19.0 |
|
Third party renewable fuel
gallons sold (in millions) |
|
30.7 |
|
|
|
54.0 |
|
Total gallons sold (in
millions) |
|
103.2 |
|
|
|
112.0 |
|
|
|
|
Total gallons produced (in
millions) |
|
74.3 |
|
|
|
58.0 |
|
Production capacity
utilization |
|
86 |
% |
|
|
52 |
% |
|
|
|
Average sales price per
gallon |
$ |
2.46 |
|
|
$ |
1.94 |
|
Average CBOT ethanol price per
gallon |
$ |
2.16 |
|
|
$ |
1.60 |
|
|
|
|
Corn cost per bushel – CBOT
equivalent |
$ |
6.22 |
|
|
$ |
4.98 |
|
Average basis |
$ |
0.64 |
|
|
$ |
0.29 |
|
Delivered corn cost |
$ |
6.86 |
|
|
$ |
5.27 |
|
|
|
|
Total essential ingredients
tons sold (in thousands) |
|
398.8 |
|
|
|
276.9 |
|
Essential ingredient return %
(1) |
|
36.4 |
% |
|
|
40.0 |
% |
________________(1) Essential ingredients revenue
as a percentage of delivered cost of corn.
Segment Financials
|
|
|
(in
thousands) (unaudited) |
|
Three Months EndedMarch 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net
sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pekin Campus
production, recorded as gross: |
|
|
|
|
|
|
|
Alcohol sales |
$ |
116,050 |
|
|
$ |
95,083 |
|
Essential ingredient sales |
|
55,280 |
|
|
|
45,077 |
|
Intersegment sales |
|
256 |
|
|
|
1,473 |
|
Total Pekin Campus sales |
|
171,586 |
|
|
|
141,633 |
|
Marketing and
distribution: |
|
|
|
|
|
|
|
Alcohol sales, gross |
$ |
53,926 |
|
|
$ |
57,010 |
|
Alcohol sales, net |
|
351 |
|
|
|
452 |
|
Intersegment sales |
|
2,996 |
|
|
|
2,244 |
|
Total marketing and distribution sales |
|
57,273 |
|
|
|
59,706 |
|
|
|
|
Other production,
recorded as gross: |
|
|
Alcohol sales |
$ |
59,805 |
|
|
$ |
15,969 |
|
Essential ingredient sales |
|
18,938 |
|
|
|
5,143 |
|
Intersegment sales |
|
12 |
|
|
|
305 |
|
Total Other production sales |
|
78,755 |
|
|
|
21,417 |
|
Corporate and
other |
|
3,768 |
|
|
|
— |
|
Intersegment
eliminations |
|
(3,264 |
) |
|
|
(4,022 |
) |
Net sales as
reported |
$ |
308,118 |
|
|
$ |
218,734 |
|
|
|
|
|
|
|
|
|
Cost of
goods sold: |
|
|
|
|
|
|
|
Pekin Campus
production |
$ |
168,881 |
|
|
$ |
128,864 |
|
Marketing
and distribution |
|
54,716 |
|
|
|
53,958 |
|
Other
production |
|
78,244 |
|
|
|
24,117 |
|
Corporate
and other |
|
2,872 |
|
|
|
— |
|
Intersegment
eliminations |
|
(1,368 |
) |
|
|
(2,042 |
) |
Cost of
goods sold as reported |
$ |
303,345 |
|
|
$ |
204,897 |
|
|
|
|
|
|
|
|
|
Gross
profit (loss): |
|
|
|
|
|
|
|
Pekin Campus
production |
$ |
2,705 |
|
|
$ |
12,769 |
|
Marketing and
distribution |
|
2,557 |
|
|
|
5,748 |
|
Other
production |
|
511 |
|
|
|
(2,700 |
) |
Corporate and
other |
|
896 |
|
|
|
— |
|
Intersegment
eliminations |
|
(1,896 |
) |
|
|
(1,980 |
) |
Gross profit
(loss) as reported |
$ |
4,773 |
|
|
$ |
13,837 |
|
|
|
|
|
|
|
|
|
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