Alto Ingredients (ALTO) Q3 2024 earnings summary

Executive summary

• Pekin Campus increased production and specialty alcohol sales, improving profitability and sales mix despite volatile market conditions and lower net sales.

• Entered a definitive CO2 transportation and sequestration agreement with Vault, advancing sustainability and CCS initiatives at Pekin Campus.

• Magic Valley facility upgrades improved production, but margin compression and higher costs led to plans to idle the plant before year-end 2024.

• Published a second sustainability report, earned new certifications, and broadened the customer base in premium and sustainable markets.

• Focused on transforming corn into high-quality, sustainable ingredients for diverse markets, including health, food, industry, and renewable fuels.

Financial highlights

• Q3 2024 net sales were $251.8 million, down from $318.1 million in Q3 2023; gross profit improved to $6.0 million from $4.2 million year-over-year.

• Adjusted EBITDA was $12.2 million, compared to $13.6 million in Q3 2023.

• Net loss narrowed to $2.4 million from $3.5 million in Q3 2023; net loss available to common stockholders was $2.8 million ($0.04/share).

• Cash and cash equivalents at September 30, 2024, were $33.6 million, with $92 million in total borrowing availability.

• Year-to-date net sales were $728.9 million, with a net loss of $18.2 million for the nine months ended September 30, 2024.

Outlook and guidance

• Expectation to sell 90 million gallons of specialty alcohols in 2024 and similar volumes in 2025.

• Corn prices anticipated to remain low into 2025, but higher transportation costs expected to impact Western operations.

• Unless economics improve, Magic Valley plant will be idled before end of Q4, expected to positively impact financials.

• Plans to expand higher-margin production, pursue CCS, optimize efficiency, and advance sustainability certifications.

• Exploring new market opportunities such as sustainable aviation fuel, blue ethanol, and ethanol-to-jet fuel.