Form 8-K - Current report

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT 

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 6, 2024

 

ALTO INGREDIENTS, INC.

 

(Exact Name of Registrant as Specified in Charter)

 

Delaware		000-21467		41-2170618
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1300 South Second Street Pekin, Illinois		61554
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: [phone]

 

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value		ALTO		The Nasdaq Stock Market LLC (Nasdaq Capital Market)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 6, 2024, Alto Ingredients, Inc. issued a press release announcing certain results of operations for the three and nine months ended September 30, 2024. A copy of the press release is furnished (not filed) as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information furnished in this Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 2.02 of this Current Report on Form 8-K is not incorporated by reference into any filings of Alto Ingredients, Inc. made under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in the filing unless specifically stated so therein.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Number		Description
99.1		Press Release dated November 6, 2024
104		Cover Page Interactive Data File (formatted as Inline XBRL)

 

-1-

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:  November 6, 2024	ALTO INGREDIENTS, INC.
	By:	/S/ AUSTE M. GRAHAM
		Auste M. Graham,
		Chief Legal Officer and Secretary

 

-2-

 

Exhibit 99.1

 

 

 

Alto Ingredients, Inc. Reports Third Quarter 2024 Results

 

- Enters CO₂ Transportation and Sequestration Agreement with Vault 44.01 -

 

Pekin, IL, November 6, 2024 – Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols, renewable fuels and essential ingredients, reported its financial results for the quarter ended September 30, 2024. In a separate press release, the company announced it entered into a CO₂ Transportation and Sequestration Agreement (TSA) with Vault 44.01 to transport, inject and sequester carbon from the company’s Pekin campus into the Mt. Simon sandstone formation in Illinois.

 

Bryon McGregor, President and CEO of Alto Ingredients, said, “Our team is committed to delivering the highest quality products to our customers while improving profitability on a consistent basis. In Q3 2024, we increased the production capabilities and uptime at our Pekin campus, compared to the prior year quarter, reflecting the success of our scheduled repairs and maintenance outage in Q2. As a result, specialty alcohol sold increased by 4 million gallons compared to last year, positively shifting our sales mix. Consolidated gross profit for the quarter improved over 40% year-over-year to $6.0 million despite fluctuating market conditions.

 

“We are managing through the current market dynamics and positioning the company to leverage the opportunities presented by our unique facilities. In addition, consistent with our strategy to lower our carbon footprint, we entered into an agreement for the safe transportation and storage of our CO₂ emissions from our Pekin campus. While we await EPA submission and approval, address financing and source equipment, the TSA marks a significant milestone on our path toward a more sustainable and prosperous future.”

 

Financial Results for the Three Months Ended September 30, 2024 Compared to 2023

 

●

Net sales were $251.8 million, compared to $318.1 million.

 

●

Cost of goods sold was $245.9 million, compared to $314.0 million.

 

●

Gross profit was $6.0 million, including $3.6 million in realized gains on derivatives, compared to a gross profit of $4.2 million, including $6.2 million in realized gains on derivatives.

 

●

Selling, general and administrative expenses were $7.5 million, compared to $8.5 million.

 

●

Gain on sale of certain idled assets was $0.8 million, compared to none in the prior year period.

 

·

Income from cash grant was $2.8 million in 2023, while none in 2024 as the USDA closed out the Biofuel Producer Program associated with the pandemic.

 

●

Net loss available to common stockholders was $2.8 million, or $0.04 per share, compared to $3.8 million, or $0.05 per share.

 

●

Adjusted EBITDA was positive $12.2 million, including $3.6 million in realized gains on derivatives, compared to positive $13.6 million, including $6.2 million dollars in realized gains on derivatives and $2.8 million income from cash grant.

 

 

 

 

 

 

Cash and cash equivalents were $33.6 million at September 30, 2024, compared to $30.0 million at December 31, 2023. At September 30, 2024, the company’s borrowing availability was $92.2 million including $27.2 million under the company’s operating line of credit and $65.0 million under its term loan facility, subject to certain conditions.

 

Financial Results for the Nine Months Ended September 30, 2024 Compared to 2023

 

●

Net sales were $728.9 million, compared to $949.3 million.

 

●

Net loss available to common stockholders was $18.2 million, or $0.25 per share, compared to $10.0 million, or $0.14 per share.

 

●

Adjusted EBITDA was negative $0.8 million, including $0.9 million in realized gains on derivatives and $5.4 million in costs related to the biennial outage in the second quarter, compared to positive $17.2 million, including $4.0 million in realized gains on derivatives and the aforementioned $2.8 million USDA cash grant.

 

Third Quarter 2024 Results Conference Call

 

Management will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on Wednesday, November 6, 2024, and will deliver prepared remarks via webcast followed by a question-and-answer session.

 

The webcast for the conference call can be accessed from Alto Ingredients’ website at www.altoingredients.com. Alternatively, to receive a number and unique PIN by email, register here. To dial directly up to twenty minutes prior to the scheduled call time, please dial [phone] domestically and [phone] internationally. The webcast will be archived for replay on the Alto Ingredients website for one year. In addition, a telephonic replay will be available at 8:00 p.m. Eastern Time on Wednesday, November 6, 2024, through 8:00 p.m. Eastern Time on Wednesday, November 13, 2024. To access the replay, please dial [phone]. International callers should dial 00-1 412-317-0088. The pass code will be 8828903.

 

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 consolidated net income (loss) before interest expense, interest income, provision for income taxes, asset impairments, unrealized derivative gains and losses, acquisition-related expense 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). 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) 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.

 

2

 

 

 

 

About Alto Ingredients, Inc.

 

Alto Ingredients, Inc. (NASDAQ: ALTO) produces and distributes specialty alcohols, essential ingredients and renewable fuels. Leveraging the unique qualities of its facilities, the company serves customers in a wide range of consumer and commercial products in the Health, Home & Beauty; Food & Beverage; Industry & Agriculture; Essential Ingredients; and Renewable Fuels markets. 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 Alto Ingredients’ projected outlook and future performance; Alto Ingredients’ repair and maintenance programs, plant improvements and other capital projects, including its carbon capture and storage (CCS) project, and their financing, costs, timing and effects; 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 and plans. These factors include, among others adverse economic and market conditions, including for specialty alcohols, renewable fuels 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; adverse impacts of inflation and supply chain constraints; and the cost, ability to fund, timing and effects of, including the financial and other results deriving from, Alto Ingredients’ repair and maintenance programs, plant improvements and other capital projects, including CCS, and other business initiatives and strategies. These factors also include, among others, the inherent uncertainty associated with financial and other projections and large-scale capital projects, including CCS; 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 alcohol production, marketing and distribution 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, including with respect to the Inflation Reduction Act’s tax and other benefits Alto Ingredients expects to derive from CCS; 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 August 8, 2024.

 

Company IR and Media Contact:

 

Michael Kramer, Alto Ingredients, Inc., 916-403-2755, [e-mail]

 

IR Agency Contact:

 

Kirsten Chapman, LHA Investor Relations, 415-433-3777, [e-mail]

 

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ALTO INGREDIENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net sales		$	251,814			$	318,127			$	728,911			$	949,315
Cost of goods sold			245,854				313,966				717,798				931,137
Gross profit			5,960				4,161				11,113				18,178
Selling, general and administrative expenses			(7,510	)			(8,488	)			(24,403	)			(24,281	)
Gain on sale of assets			830				—				830				—
Asset impairments			—				—				—				(574	)
Loss from operations			(720	)			(4,327	)			(12,460	)			(6,677	)
Interest expense, net			(1,867	)			(2,000	)			(5,170	)			(5,299	)
Income from cash grant			—				2,812				—				2,812
Other income, net			146				26				358				104
Loss before provision for income taxes			(2,441	)			(3,489	)			(17,272	)			(9,060	)
Provision for income taxes			—				—				—				—
Net loss		$	(2,441	)		$	(3,489	)		$	(17,272	)		$	(9,060	)
Preferred stock dividends		$	(319	)		$	(319	)		$	(950	)		$	(946	)
Net loss available to common stockholders		$	(2,760	)		$	(3,808	)		$	(18,222	)		$	(10,006	)
Net loss per share, basic and diluted		$	(0.04	)		$	(0.05	)		$	(0.25	)		$	(0.14	)
Weighted-average shares outstanding, basic and diluted			73,835				73,191				73,364				73,464

 

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ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value)

 

ASSETS		September 30, 2024				December 31, 2023
Current Assets:
Cash and cash equivalents		$	33,591			$	30,014
Restricted cash			4,903				15,466
Accounts receivable, net			52,038				58,729
Inventories			48,014				52,611
Derivative instruments			36				2,412
Other current assets			6,568				9,538
Total current assets			145,150				168,770
Property and equipment, net			238,892				248,748
Other Assets:
Right of use operating lease assets, net			19,283				22,597
Intangible assets, net			8,057				8,498
Other assets			6,029				5,628
Total other assets			33,369				36,723
Total Assets		$	417,411			$	454,241

 

5

 

 

 

 

ALTO INGREDIENTS, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited, in thousands, except par value)

 

		September 30, 2024				December 31, 2023
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	17,205			$	20,752
Accrued liabilities			14,255				20,205
Current portion – operating leases			4,440				4,333
Derivative instruments			3,394				13,849
Other current liabilities			5,808				6,149
Total current liabilities			45,102				65,288
Long-term debt, net			83,342				82,097
Operating leases, net of current portion			15,740				19,029
Other liabilities			9,302				8,270
Total Liabilities			153,486				174,684
Stockholders’ Equity:
Preferred stock, $0.001 par value; 10,000 shares authorized; Series A: no shares issued and outstanding as of September 30, 2024 and December 31, 2023 Series B: 927 shares issued and outstanding as of September 30, 2024 and December 31, 2023			1				1
Common stock, $0.001 par value; 300,000 shares authorized; 76,625 and 75,703 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively			77				76
Non-voting common stock, $0.001 par value; 3,553 shares authorized; 1 share issued and outstanding as of September 30, 2024 and December 31, 2023			—				—
Additional paid-in capital			1,043,501				1,040,912
Accumulated other comprehensive income			2,481				2,481
Accumulated deficit			(782,135	)			(763,913	)
Total Stockholders’ Equity			263,925				279,557
Total Liabilities and Stockholders’ Equity		$	417,411			$	454,241

 

6

 

 

 

 

Reconciliation of Adjusted EBITDA to Net Loss

 

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands) (unaudited)		2024				2023				2024				2023
Net loss		$	(2,441	)		$	(3,489	)		$	(17,272	)		$	(9,060	)
Adjustments:
Interest expense, net			1,867				2,000				5,170				5,299
Interest income			(194	)			(179	)			(519	)			(590	)
Unrealized derivative (gains) losses			6,199				8,917				(8,079	)			1,517
Acquisition-related expense			675				700				2,025				2,100
Asset impairments			—				—				—				574
Depreciation and amortization expense			6,058				5,647				17,860				17,382
Total adjustments			14,605				17,085				16,457				26,282
Adjusted EBITDA		$	12,164			$	13,596			$	(815	)		$	17,222

 

Sales and Operating Metrics (unaudited)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Alcohol Sales (gallons in millions)
Pekin Campus renewable fuel gallons sold			31.1				34.4				93.6				104.4
Western production renewable fuel gallons sold			18.0				22.2				38.2				46.6
Third party renewable fuel gallons sold			25.2				21.9				89.3				82.4
Total renewable fuel gallons sold			74.3				78.5				221.1				233.4
Specialty alcohol gallons sold			22.5				18.6				69.8				56.6
Total gallons sold			96.8				97.1				290.9				290.0
Sales Price per Gallon
Pekin Campus		$	2.02			$	2.48			$	1.96			$	2.46
Western production		$	2.02			$	2.57			$	1.94			$	2.63
Marketing and distribution		$	2.17			$	2.69			$	2.01			$	2.62
Total		$	2.06			$	2.56			$	1.97			$	2.53
Alcohol Production (gallons in millions)
Pekin Campus			53.4				51.8				157.0				158.1
Western production			19.2				22.5				37.5				47.3
Total			72.6				74.3				194.5				205.4
Corn Cost per Bushel
Pekin Campus		$	4.40			$	6.29			$	4.55			$	6.72
Western production		$	5.52			$	7.37			$	5.69			$	7.91
Total		$	4.68			$	6.60			$	4.76			$	6.98

 

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Sales and Operating Metrics (unaudited)       

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Average Market Metrics
PLATTS Ethanol price per gallon		$	1.81			$	2.29			$	1.72			$	2.32
CME Corn cost per bushel		$	3.92			$	4.98			$	4.23			$	5.94
Board corn crush per gallons (1)		$	0.41			$	0.51			$	0.21			$	0.20
Essential Ingredients Sold (thousand tons)
Pekin Campus:
Distillers grains			83.7				85.3				251.1				252.5
CO2			53.5				48.9				135.9				139.0
Corn wet feed			30.0				28.3				80.4				70.0
Corn dry feed			26.5				22.1				65.2				67.3
Corn oil and germ			18.8				17.8				54.1				55.6
Syrup and other			8.0				9.2				28.6				28.5
Corn meal			9.8				8.2				26.1				27.8
Yeast			6.3				6.4				17.8				19.7
Total Pekin Campus essential ingredients sold			236.6				226.2				659.2				660.4
Western production:
Distillers grains			116.6				144.6				250.2				307.7
CO2			14.7				14.9				43.1				41.7
Syrup and other			21.4				35.2				37.6				71.6
Corn oil			2.1				2.3				4.5				5.2
Total Western production essential ingredients sold			154.8				197.0				335.4				426.2
Total Essential Ingredients Sold			391.4				423.2				994.6				1,086.6
Essential ingredients return % (2)
Pekin Campus return			49.0	%			44.8	%			49.7	%			44.1	%
Western production return			28.6	%			31.3	%			33.0	%			32.3	%
Consolidated total return			42.8	%			40.4	%			46.0	%			41.2	%

 

 

(1)	Assumes corn conversion of 2.80 gallons of alcohol per bushel of corn.

(2)	Essential ingredients revenues as a percentage of total corn costs consumed.

 

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Segment Financials (unaudited, in thousands)

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Net Sales
Pekin Campus, recorded as gross:
Alcohol sales		$	106,459			$	128,554			$	315,494			$	388,629
Essential ingredient sales			41,217				51,634				127,297				169,220
Intersegment sales			321				363				927				1,120
Total Pekin Campus sales			147,997				180,551				443,718				558,969
Marketing and distribution:
Alcohol sales, gross		$	54,531			$	58,805			$	179,118			$	215,741
Alcohol sales, net			71				74				169				292
Intersegment sales			2,862				3,392				8,002				8,734
Total marketing and distribution sales			57,464				62,271				187,289				224,767
Western production, recorded as gross:
Alcohol sales		$	36,395			$	57,159			$	74,084			$	122,477
Essential ingredient sales			10,408				17,841				24,184				40,614
Intersegment sales			8				37				(122	)			99
Total Western production sales			46,811				75,037				98,146				163,190
Corporate and other			2,733				4,060				8,565				12,342
Intersegment eliminations			(3,191	)			(3,792	)			(8,807	)			(9,953	)
Net sales as reported		$	251,814			$	318,127			$	728,911			$	949,315
Cost of goods sold:
Pekin Campus		$	141,823			$	179,995			$	423,135			$	546,591
Marketing and distribution			53,553				58,051				176,676				212,923
Western production			49,079				73,584				112,762				165,401
Corporate and other			2,952				3,538				8,690				9,322
Intersegment eliminations			(1,553	)			(1,202	)			(3,465	)			(3,100	)
Cost of goods sold as reported		$	245,854			$	313,966			$	717,798			$	931,137
Gross profit (loss):
Pekin Campus		$	6,174			$	556			$	20,583			$	12,378
Marketing and distribution			3,911				4,220				10,613				11,844
Western production			(2,268	)			1,453				(14,616	)			(2,211	)
Corporate and other			(219	)			522				(125	)			3,020
Intersegment eliminations			(1,638	)			(2,590	)			(5,342	)			(6,853	)
Gross profit (loss) as reported		$	5,960			$	4,161			$	11,113			$	18,178

 

####

 

9

 

Cover	Nov. 06, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 06, 2024
Entity File Number	000-21467
Entity Registrant Name	ALTO INGREDIENTS, INC.
Entity Central Index Key	0000778164
Entity Tax Identification Number	41-2170618
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1300 South Second Street
Entity Address, City or Town	Pekin
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61554
City Area Code	916
Local Phone Number	403-2123
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ALTO
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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