ALTO - Alto Ingredients Inc. Reports First Quarter 2022 Results
- Increased Net Sales 41% to $308 Million vs. Q1 2021
- Integrated Acquisition of Specialty Alcohol Distributor, Eagle Alcohol
- Launched Quality and ESG Initiatives
SACRAMENTO, Calif., May 09, 2022 (GLOBE NEWSWIRE) -- 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.com
IR 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 Ended March 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 Ended March 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 Ended March 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 Ended March 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 |