Close

Form 8-K Alto Ingredients, Inc. For: Aug 08

August 8, 2022 4:19 PM EDT

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.
0000778164 false 0000778164 2022-08-08 2022-08-08 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

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): August 8, 2022

 

ALTO INGREDIENTS, INC.

 

(Exact Name of Registrant as Specified in Charter)

 

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

 

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

 

Registrant’s Telephone Number, Including Area Code:  (916) 403-2123

 

 

 

(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 August 8, 2022, Alto Ingredients, Inc. issued a press release announcing certain results of operations for the three and six months ended June 30, 2022. 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 August 8, 2022
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:  August 8, 2022 ALTO INGREDIENTS, INC.
     
  By: /s/ AUSTE M. GRAHAM
    Auste M. Graham,
    General Counsel, Vice President and Secretary

 

 

-2-

 

 

Exhibit 99.1

 

 

Alto Ingredients, Inc. Reports Second Quarter 2022 Results

 

Grew Net Sales to $362.2 Million, Up 21% from Q2 2021

 

Generated Net Income of $21.5 Million, $0.29 per Diluted Share, Up from $8.0 Million, $0.11 per Diluted Share in Q2 2021

 

Increased Adjusted EBITDA to $29.9 Million, Up from $17.0 Million in Q2 2021

 

Sacramento, CA, August 8, 2022 – Alto Ingredients, Inc. (NASDAQ: ALTO), a leading producer and distributor of specialty alcohols and essential ingredients, reported its financial results for the quarter ended June 30, 2022.

 

“Our strategy to diversify into specialty alcohols and essential ingredients continues to serve us well. Sales of these products, combined with a cash grant from the USDA, delivered solid performance and offset higher than usual freight expenses and repair and maintenance costs, resulting in positive gross profit, net income and Adjusted EBITDA in the second quarter,” said Mike Kandris, CEO of Alto Ingredients. “Anticipating the cash grant, we accelerated the timing of some of our infrastructure improvements. We are upgrading equipment and operating systems to increase efficiency and plant reliability, expanding our corn storage capacity, enhancing our specialty alcohol production and broadening its distribution, and reinvesting in essential ingredients capabilities. Building for the future, we are improving our position to capture a variety of opportunities, and our near- and long-term outlook is promising.”

 

Financial Results for the Three Months Ended June 30, 2022 Compared to 2021

 

Net sales were $362.2 million, compared to $298.1 million.

 

Cost of goods sold was $353.3 million, compared to $282.9 million.

 

Gross profit was $8.8 million, compared to $15.2 million.

 

Selling, general and administrative expenses were $9.0 million, compared to $7.2 million, reflecting Eagle Alcohol acquisition-related expenses and higher stock-compensation expenses

 

Income from a cash grant from the USDA’s Biofuel Producer Program was $22.7 million.

 

Net income available to common stockholders was $21.5 million, or $0.29 per diluted share, compared to $8.0 million, or $0.11 per diluted share.

 

Adjusted EBITDA was $29.9 million, compared to $17.0 million.

 

Cash and cash equivalents were $57.4 million at June 30, 2022, compared to $50.6 million at December 31, 2021.

 

Working capital was $178.4 million at June 30, 2022, compared to $159.9 million at December 31, 2021.

 

1

 

 

 

Second 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, August 8, 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 register for the conference by navigating to https://dpregister.com/sreg/10169223/f3aa59fe00 to receive a number and unique PIN by email or you may dial the following number up to twenty minutes prior to the scheduled conference call time: (833) 630-0017. International callers should dial (412) 317-1806. 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, August 8, 2022, through 8:00 p.m. Eastern Time on Monday, August 15, 2022. To access the replay, please dial (877) 344-7529. International callers should dial (412) 317-0088. The pass code will be 2155410.

 

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.

 

2

 

 

 

 

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’ near- and long-term outlook; 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 of the coronavirus pandemic, and its resurgence or abatement, and governmental, business and consumer responses to the pandemic. 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 May 10, 2022.

 

Media Contact:

 

Bryon McGregor, Alto Ingredients, Inc., 916-403-2768, [email protected]

 

Company IR Contact:

 

Michael Kramer, Alto Ingredients, Inc., 916-403-2755, [email protected]

 

IR Agency Contact:

 

Kirsten Chapman, LHA Investor Relations, 415-433-3777, [email protected]

 

3

 

 

 

 

ALTO INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2022   2021   2022   2021 
                 
Net sales  $362,189   $298,110   $670,307   $516,844 
Cost of goods sold   353,345    282,877    656,690    487,774 
Gross profit   8,844    15,233    13,617    29,070 
Selling, general and administrative expenses   8,996    7,230    16,625    14,244 
Asset impairments       1,900        3,100 
Income (loss) from operations   (152)   6,103    (3,008)   11,726 
Interest expense, net   (319)   (1,045)   (519)   (2,930)
Income from cash grant   22,652        22,652     
Income from loan forgiveness       3,887        3,887 
Other income (expense), net   (66)   (555)   388    385 
Income before provision for income taxes   22,115    8,390    19,513    13,068 
Provision for income taxes                
Net income  $22,115   $8,390   $19,513   $13,068 
Preferred stock dividends  $(315)  $(315)  $(627)  $(627)
Net income allocated to participating securities   (284)   (108)   (251)   (167)
Net income available to common stockholders  $21,516   $7,967   $18,635   $12,274 
Net income per share, basic  $0.29   $0.11   $0.26   $0.17 
Net income per share, diluted  $0.29   $0.11   $0.26   $0.17 
Weighted-average shares outstanding, basic   72,936    71,260    71,690    70,808 
Weighted-average shares outstanding, diluted   73,123    71,929    71,958    71,961 

 

4

 

 

 

ALTO INGREDIENTS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except par value)

 

  June 30,
2022
   December 31,
2021
 
ASSETS        
Current Assets:        
Cash and cash equivalents  $57,376   $50,612 
Restricted cash   17,361    11,513 
Accounts receivable, net   92,744    86,888 
Inventories   67,438    54,373 
Derivative instruments   27,488    15,839 
Other current assets   11,081    10,301 
Total current assets   273,488    229,526 
Property and equipment, net   222,946    222,550 
Other Assets:          
Right of use operating lease assets, net   14,004    13,413 
Notes receivable, noncurrent       11,641 
Intangible assets, net   9,381    2,678 
Goodwill   5,908     
Other assets   5,592    5,145 
Total other assets   34,885    32,877 
Total Assets  $531,319   $484,953 

 

5

 

 

 

ALTO INGREDIENTS, INC.

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(unaudited, in thousands, except par value)

 

  June 30,
2022
   December 31,
2021
 
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current Liabilities:        
Accounts payable – trade  $21,478   $23,251 
Accrued liabilities   21,404    21,307 
Current portion – operating leases   4,132    3,909 
Derivative instruments   32,770    13,582 
Other current liabilities   15,340    7,553 
Total current liabilities   95,124    69,602 
           
Long-term debt, net of current portion   52,518    50,361 
Operating leases, net of current portion   9,801    9,382 
Other liabilities   10,288    10,394 
Total Liabilities   167,731    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 June 30, 2022 and December 31, 2021 Series B: 927 shares issued and outstanding as of June 30, 2022 and December 31, 2021   1    1 
Common stock, $0.001 par value; 300,000 shares authorized; 74,188 and 72,778 shares issued and outstanding as of June 30, 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 June 30, 2022 and December 31, 2021        
Additional paid-in capital   1,036,692    1,037,205 
Accumulated other comprehensive expense   (284)   (284)
Accumulated deficit   (672,895)   (691,781)
Total Stockholders’ Equity   363,588    345,214 
Total Liabilities and Stockholders’ Equity  $531,319   $484,953 

 

6

 

 

 

 

Reconciliation of Adjusted EBITDA to Net Income

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
(in thousands) (unaudited)  2022   2021   2022   2021 
Net income  $22,115   $8,390   $19,513   $13,068 
Adjustments:                    
Interest expense   319    1,045    519    2,930 
Interest income   (145)   (186)   (303)   (370)
Asset impairments       1,900        3,100 
Acquisition-related expense   875        1,750     
Depreciation and amortization expense   6,728    5,811    12,861    11,669 
Total adjustments   7,777    8,570    14,827    17,329 
Adjusted EBITDA  $29,892   $16,960   $34,340   $30,397 

 

Commodity Price Performance

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
(unaudited)  2022   2021   2022   2021 
Renewable fuel production gallons sold (in millions)   51.3    41.4    100.4    80.4 
Specialty alcohol production gallons sold (in millions)   25.8    24.3    49.1    43.3 
Third party renewable fuel gallons sold (in millions)   30.0    59.3    60.8    113.3 
Total gallons sold (in millions)   107.1    125.0    210.3    237.0 
                     
Total gallons produced (in millions)   77.0    63.6    151.3    121.5 
Production capacity utilization   88%   59%   85%   56%
                     
Average sales price per gallon  $2.84   $2.41   $2.65   $2.17 
                     
Average CBOT ethanol price per gallon  $2.16   $2.30   $2.16   $2.00 
                     
Corn cost per bushel – CBOT equivalent  $7.46   $6.05   $6.84   $5.51 
Average basis   0.69    0.41    0.66    0.36 
Delivered corn cost  $8.15   $6.46   $7.50   $5.87 
                     
Total essential ingredients tons sold (in thousands)   414.1    304.0    812.9    580.9 
Essential ingredients return % (1)   32.7%   32.2%   34.6%   35.9%

 

 

(1)Essential ingredients revenue as a percentage of delivered cost of corn.

 

7

 

 

 

 

Segment Financials

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2022   2021   2022   2021 
Net Sales                
Pekin Campus, recorded as gross:                
Alcohol sales  $143,768   $132,296   $259,818   $227,380 
Essential ingredient sales   59,853    49,578    115,133    94,655 
Intersegment sales   269    316    525    628 
Total Pekin Campus sales   203,890    182,190    375,476    322,663 
                     
Marketing and distribution:                    
Alcohol sales, gross  $63,558   $86,299   $117,484   $143,309 
Alcohol sales, net   317    532    668    984 
Intersegment sales   3,242    2,618    6,239    4,862 
Total marketing and distribution sales   67,117    89,449    124,391    149,155 
                     
Other production, recorded as gross:                    
Alcohol sales  $67,184   $22,153   $126,991   $38,121 
Essential ingredient sales   23,372    7,252    42,309    12,395 
Intersegment sales   -      332    12    637 
Total Other production sales   90,556    29,737    169,312    51,153 
                     
Corporate and other   4,137    -      7,904    -   
Intersegment eliminations   (3,511)   (3,266)   (6,776)   (6,127)
Net sales as reported  $362,189   $298,110   $670,307   $516,844 
                     
Cost of goods sold:                    
Pekin Campus  $195,691   $171,547   $364,573   $299,250 
Marketing and distribution   63,796    85,746    118,510    139,705 
Other production   91,606    27,325    169,851    51,442 
Corporate and other   3,197    -      6,070    -   
Intersegment eliminations   (945)   (1,741)   (2,314)   (2,623)
Cost of goods sold as reported  $353,345   $282,877   $656,690   $487,774 
                     
Gross profit:                    
Pekin Campus  $8,199   $10,643   $10,903   $23,413 
Marketing and distribution   3,321    3,703    5,881    9,450 
Other production   (1,050)   2,412    (539)   (289)
Corporate and other   940    -      1,834    -   
Intersegment eliminations   (2,566)   (1,525)   (4,462)   (3,504)
Gross profit as reported  $8,844   $15,233   $13,617   $29,070 

 

 

####

 

 

8

 

 



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings