Alto Ingredients, Inc. (NASDAQ: ALTO), a producer and distributor of renewable fuel and essential ingredients and the largest producer of specialty alcohols in the U.S., reported its financial results for the quarter ended March 31, 2024. For the first quarter of 2024, gross loss improved by $0.8 million, net loss improved by $1.4 million and Adjusted EBITDA improved by $3.4 million over the first quarter of 2023.
Bryon McGregor, President and CEO of Alto Ingredients, said, “Our strategies to diversify revenue, improve capacity utilization rates, reduce costs and expand operating margins are coming to fruition. Our first quarter 2024 financial results benefited from improved crush margins and our efforts to increase essential ingredient returns and operating efficiencies. However, various weather factors materially impacted our first quarter’s performance. In January, a cold spike at our Pekin campus increased transportation related expenses, reduced production rates and caused a shift to lower margin feed products. For the remainder of the quarter, unseasonably moderate weather conditions and ensuing low natural gas prices resulted in an incremental loss of $4.9 million from our energy hedging activities.
“Our scheduled biennial outage at our Pekin wet mill was completed in April 2024 and will result in more consistent and higher production rates, improving reliability as we approach the summer driving season. The market outlook for the rest of 2024 remains favorable, supported by solid corn inventories, improved export demand for ethanol and the EPA’s summer waiver for 15% blends.
“We continue to progress our strategic carbon capture and storage (CCS) initiative that will substantially reduce our carbon footprint. CCS stands to create value for the communities surrounding the Pekin campus, our customers and Alto,” concluded McGregor.
In March, Alto announced that it had signed a letter of intent with Vault 44.01, a leading CCS developer focused on the development, capitalization and operation of carbon storage assets. The company continues to negotiate the terms of its proposed agreements with potential financial partners and with Vault. The plan is to partner for safe and permanent CO2 storage deep underground in a secure geological reservoir close to the Pekin campus. Vault completed the 2D seismic geological survey and has begun data analysis. They have advanced the work required to submit the EPA Class VI permit application.
Financial Results for the Three Months Ended March 31, 2024 Compared to 2023
- Net sales were $240.6 million, compared to $313.9 million.
- Cost of goods sold was $243.0 million, compared to $317.1 million.
- Gross loss, including a $4.9 million incremental loss related to natural gas hedging activities, was $2.4 million, compared to a gross loss of $3.2 million.
- Selling, general and administrative expenses were $7.9 million for both periods.
- Operating loss was $10.3 million, compared to an operating loss of $11.6 million, which included an asset impairment charge of $0.6 million.
- Net loss available to common stockholders was $12.0 million, or $0.17 per share, compared to $13.5 million, or $0.18 per share.
- Adjusted EBITDA was negative $7.1 million, compared to negative $10.4 million.
Cash and cash equivalents were $29.3 million at March 31, 2024, compared to $30.0 million at December 31, 2023. At March 31, 2024, the company’s borrowing availability was $90.9 million including $25.9 million under the company’s operating line of credit and $65.0 million under its term loan facility, subject to certain conditions.