Alto Ingredients, Inc.
For the period ended Mar 31, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
ALTO$3.74+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001213900-24-095907
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001213900-25-041532
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 105 current paragraphs.
30 unchanged; 35 reworded; 39 added; 52 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (39)
Current report
We also own and operate a liquid CO 2 production facility adjacent to our plant in Oregon for the offtake of CO 2 gas from the plant for conversion to liquid CO 2 and subsequent sale. In addition, we break bulk distribute specialty alcohols, produced by us and third parties, through our Eagle Alcohol business.
Current report
All of our production facilities, other than our Magic Valley plant, were operating for all of 2024, subject to scheduled and unscheduled downtimes to address facility repair and maintenance.
Current report
Our first quarter results for 2025 improved compared to the same period in 2024, as reflected in part by better gross margin and Adjusted EBITDA. Adjusted EBITDA improved to negative $4.4 million for the first quarter from negative $7.1 million for the same period in 2024. Adjusted EBITDA is defined and reconciled against consolidated net loss below. These results include a savings of $4.8 million due to the cold-idling of our Magic Valley plant at the end of the fourth quarter. These results also reflect our operational uptime and our carbon optimization initiative, which was driven by our acquisition on January 1, 2025 of a beverage-grade liquid CO 2 processing plant adjacent to our Columbia facility. The combined ownership of our Columbia assets contributed $2.9 million of improvement to our Adjusted EBITDA for the first quarter and has enabled synergies, allowing for reduced management and staffing costs while enhancing operational coordination and overall productivity across the combined site. We continue to optimize these assets, which should facilitate additional benefits, such as longer-term feed sales commitments and expanded premium liquid CO 2 sales. As anticipated, this acquisition improved our Columbia facility’s economics and increased its asset valuation.
Current report
During the first quarter, we continued our efforts to rationalize our business and right size our staffing to better align with our current operational footprint. During the fourth quarter and into the first quarter, we reduced headcount by a total of 16%. As a result, we expect to save approximately $8 million annually, with the financial benefit starting in the second quarter. We have completed our planned reorganization but will continue to evaluate opportunities to reduce expenses. We are prioritizing quick-return projects, including water and energy optimization, that would reduce utility costs and lower our carbon footprint.
Current report
Our Pekin Campus’s results for the first quarter illustrate our ability to quickly shift production to capitalize on favorable market trends. For example, to diversify our revenue streams, we earned International Sustainability and Carbon Certification, or ISCC, in the third quarter and in the fourth quarter began exporting qualified renewable fuel to European markets. This certification has enabled us to access higher margin sales compared to domestic markets. During the first quarter, we experienced solid demand for ISCC certified renewable fuel priced at a premium to domestic fuel-grade ethanol. In the first quarter, we also grew ISCC sales as a percentage of our total renewable fuel volume sold from our Pekin Campus. As a result, ISCC sales partially offset some domestic market challenges.
Current report
Premiums on domestic high quality alcohol for the first quarter were generally lower than in the same period in 2024 due to increased competition in the marketplace. In addition, prices for essential ingredients declined as a result of higher industry supply from increased soy crush to support renewable diesel fuel demand.
Current report
In late March and early April, we completed our scheduled seasonal outages at our Pekin Campus facilities. The repairs and maintenance successfully achieved our goal of sustaining the improved plant utilization rates set last year following our biennial outage in the second quarter of 2024. Unfortunately, in early April, during a period of rapidly rising river levels, our Pekin Campus loadout dock was damaged, negatively impacting production, logistics and overall Pekin Campus economics. In response, we implemented temporary solutions and we are now back to full operation. We are assessing our long-term remediation options and we are also working with our insurance carrier to mitigate the financial impact of the damage and the interruption to our business.
Current report
Thus far in 2025, we have experienced typical seasonal market patterns with spreads between corn and ethanol prices comparable year over year. These crush margins improved sequentially each month during the first quarter and have further improved in April as a result of lower production rates associated with industry-wide scheduled springtime plant outages. Despite these improvements, margin expansion remains largely restrained due to high industry inventory levels with production outpacing demand. Absent a meaningful reduction in ethanol supply or a relative increase in demand, substantial crush spread improvements may be constrained. Although we remain optimistic that margins will continue to improve with higher demand during the summer driving season, we have concerns over tariffs and restrictions on Chinese vessels, introducing greater uncertainty around the export market. While these factors are largely beyond our control, we will continue our efforts to minimize their impact on our business. Nevertheless, as noted above, we have experienced solid exports in the first quarter from our ISCC sales into European markets.
Current report
The Environmental Protection Agency, or EPA, issued a recent E15 fuel waiver allowing higher blending rates for an extended period through May 20 th. Although this is a temporary waiver, we expect the EPA to issue new waivers to permit E15 blending through summer. We are also optimistic that pending national legislation will pass later this year resulting in long-sought after permanent year-round E15 adoption nationwide. In addition, there is growing support for E15 adoption in California. The California Assembly recently passed a bill aimed at accelerating the approval process for E15 fuel blends. Moreover, California’s Governor Newsom has directed the California Air Resources Board to expedite its review, citing potential benefits such as lower gas prices and reduced emissions. According to the latest Energy Information Administration reports, California’s 13.4 billion gallons of annual fuel consumption represents 11.6% of national volume. A five-percentage point increase in ethanol blending from 10% to 15% in California alone could result in an additional 670 million gallons sold annually. Further, national adoption of year-round E15 blending could boost ethanol demand by an estimated 5 to 7 billion gallons. Since the U.S. has approximately 18 billion gallons of ethanol production capacity and domestic demand is approximately 14.4 billion gallons, the national adoption of year-round E15 blending combined with strong exports would utilize, over time, much of the excess production capacity and produce greater margin stability. Beyond supply and demand considerations, we also believe that year-round E15 adoption would have positive economic and environmental impacts, such as reducing greenhouse gas emissions, supporting farmers and lowering fuel costs for consumers.
Current report
Senate Bill 1723 in Illinois is under consideration to prevent CO 2 sequestration activity that overlies, underlies or passes through a sole-source aquifer. This would include the Mahomet Aquifer, which underlies multiple counties across Illinois including an area currently contemplated for storage in our Class VI permit application for our CCS initiative. Together with our CCS partner, Vault 44.01, and other potentially affected parties, we are working with elected officials to address concerns to minimize or eliminate the potential legal impact of this legislation on our CCS initiative. We are also developing alternatives to ensure that we optimize the value of our CO 2 production despite the outcome of this legislation, including the potential relocation of our proposed CO 2 storage location. In addition, we are working with leaders in Illinois on Senate Bill 41, named the Clean Transportation Standard Act, to develop clean ground transportation standards to reduce the lifecycle carbon intensity of fuels that are similar to the standards adopted on the West Coast.
Current report
We continue to execute our long-term plan to diversify revenue and mitigate the volatility of commodities. We have leveraged our plant flexibility and our efforts are working. New initiatives in beverage-grade CO 2 and ISCC qualified renewable fuel have been economically beneficial. Additionally, our efficiency measures have reduced our expense run rate going forward. Although the regulatory environment remains dynamic, there are encouraging developments, including the increasing state and potential national adoption of year-round E15 blending. Also, as noted above, the Illinois Clean Transportation Standard Act presents exciting possibilities that could further support industry growth and innovation. Our team will continue to proactively evaluate alternatives for new revenue streams and value, leverage our flexible and unique plant assets, and work to drive long-term shareholder value on a sustainable, consistent basis.
Current report
Net Sales, Cost of Goods Sold and Gross Loss
Current report
Pekin Campus Production Segment
Current report
Net sales of alcohol from our Pekin Campus production segment declined by $1.2 million, or 1%, to $107.2 million for the three months ended March 31, 2025 as compared to $108.4 million for the same period in 2024. Our total volume of production gallons sold decreased by 0.7 million gallons, or 1%, to 56.5 million gallons for the three months ended March 31, 2025 as compared to 57.2 million gallons for the same period in 2024. The segment’s average sales price per gallon remained flat for the three months ended March 31, 2025 as compared to the same period in 2024. With the segment’s average sales price per gallon of $1.90 for the three months ended March 31, 2025, we generated $1.2 million less in net sales from the 0.7 million fewer gallons of alcohol sold in the three months ended March 31, 2025 as compared to the same period in 2024.
Current report
Net sales of essential ingredients from our Pekin Campus production segment declined by $2.1 million, or 4%, to $44.6 million for the three months ended March 31, 2025 as compared to $46.7 million for the same period in 2024. Our total volume of essential ingredients sold increased by 25,300 tons, or 12%, to 237,900 tons for the three months ended March 31, 2025 from 212,600 tons for the same period in 2024. The decrease of $32.15, or 15%, in the segment’s average sales price per ton for the three months ended March 31, 2025 as compared to the same period in 2024 reduced our net sales from the segment by $6.8 million. With the segment’s average sales price per ton of $187.55 for the three months ended March 31, 2025, we generated $4.7 million more in net sales from the 25,300 additional tons of essential ingredients sold in the three months ended March 31, 2025 as compared to the same period in 2024.
Current report
Western Production Segment
Current report
Net sales of alcohol from our Western production segment declined by $4.0 million, or 20%, to $16.2 million for the three months ended March 31, 2025 as compared to $20.2 million for the same period in 2024. Our total volume of alcohol sold decreased by 2.9 million gallons, or 26%, to 8.3 million gallons for the three months ended March 31, 2025 as compared to 11.2 million gallons for the same period in 2024. With the segment’s average sales price per gallon of $1.95 for the three months ended March 31, 2025, we generated $5.6 million less in net sales from the 2.9 million fewer gallons of alcohol sold in the three months ended March 31, 2025 as compared to the same period in 2024. However, the increase of $0.15, or 8%, in the segment’s average sales price per gallon for the three months ended March 31, 2025 as compared to the same period in 2024 increased our net sales from the segment by $1.6 million.
Current report
Net sales of essential ingredients from our Western production segment remained flat at $7.8 million for the three months ended March 31, 2025 and 2024. Our total volume of essential ingredients sold decreased by 27,900 tons, or 28%, to 72,900 tons for the three months ended March 31, 2025 from 100,800 tons for the same period in 2024. With the segment’s average sales price per ton of $107.11 for the three months ended March 31, 2025, we generated $2.9 million less in net sales from the 27,900 fewer tons of essential ingredients sold in the three months ended March 31, 2025 as compared to the same period in 2024. However, the increase of $29.47, or 38%, in our average sales price per ton for the three months ended March 31, 2025 as compared to the same period in 2024 improved our net sales of essential ingredients from the segment by $2.9 million.
Current report
Corporate and other
Current report
Cost of Goods Sold and Gross Loss
Current report
Our consolidated gross loss improved to a gross loss of $1.8 million for the three months ended March 31, 2025 from a gross loss of $2.4 million for the same period in 2024, representing a gross margin of negative 0.8% and 1.0% for the three months ended March 31, 2025 and 2024, respectively. Our gross loss and gross margin improved due to multiple factors, including the cold-idling of our Magic Valley facility, which reduced cost of goods sold by $10.0 million including cost savings of $4.8 million, over $1.0 million in lower repairs and maintenance expenses, premium liquid CO 2 sales from our newly acquired Alto Carbonic processing facility and other synergistic benefits totaling $2.9 million at our Columbia facility, and a $1.4 million benefit from ISCC certified renewable fuel exports priced at a premium to domestic fuel-grade ethanol, all of which were partially offset by $4.6 million in lower premiums for high quality alcohol, $3.8 million associated with lower returns on our essential ingredients, predominately from our Pekin Campus, and $1.6 million less in unrealized gains on derivatives compared to the prior year’s quarter. For the first quarter, we recorded $7.0 million in repairs and maintenance expense, in line with our full-year 2025 estimate of $32 million.
Current report
Pekin Campus Production Segment
Current report
Our Pekin Campus production segment’s gross profit, net of intercompany activity, declined by $7.3 million to a gross loss of $2.2 million for the three months ended March 31, 2025 as compared to a gross profit of $5.1 million for the same period in 2024. All of this decline is attributable to lower ethanol margins.
Current report
Western Production Segment
Current report
Corporate and other
Current report
Our SG&A expenses decreased $0.7 million for the three months ended March 31, 2025 as compared to the same period in 2024. The reduction in SG&A expenses primarily reflects the conclusion of our acquisition-related expenses for our acquisition of Eagle Alcohol.
Current report
Interest Expense, net
Current report
The following table presents our interest expense, net, in dollars and as a percentage of net sales (in thousands, except percentages):
Current report
Our interest expense, net, increased for the three months ended March 31, 2025 as compared to the same period in 2024, primarily due to higher average debt balances and higher average interest rates compared to the prior year period.
Current report
Net Loss Attributable to Common Stockholders
Current report
The slight decrease in net loss attributable to common stockholders is primarily due to lower SG&A expenses and lower net sales at negative margins as well as the other factors affecting gross profit discussed above, partially offset by lower premiums for high quality alcohol, lower unrealized gains on derivatives and higher interest expense, as also discussed above.
Current report
Quantitative Year-End Liquidity Status
Current report
Current assets increased primarily due to an increase in accounts receivable, inventories, other current assets and derivative instruments, partially offset by a decrease in cash and cash equivalents and restricted cash.
Current report
Our current liabilities decreased primarily due to lower accounts payable and accrued liabilities as a result of timing of payments, and a decrease in derivative liabilities from changes in commodity prices for open contracts.
Current report
Cash used in our Operating Activities
Current report
We used $7.8 million in cash during the quarter for the acquisition of Kodiak Carbonic and other capital expenditures.
Current report
Cash provided by our Financing Activities
Current report
Cash provided by our financing activities was $17.0 million for the three months ended March 31, 2025, which reflects net proceeds of $17.3 million from Kinergy’s operating line of credit, partially offset by $0.3 million in preferred stock dividends paid.
Current report
In connection with our acquisition of Eagle Alcohol, contingent payments of up to $2.7 million in cash and 948,932 shares of common stock are contractually scheduled for the first half of 2025, all of which were accrued for in 2024.
Removed paragraphs (52)
Previous report
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Previous report
We also specialize in break bulk distribution of specialty alcohols, through our Eagle Alcohol subsidiary, produced by us and third-parties. We then store, denature, package, and resell alcohol products in smaller sizes, including tank trucks, totes and drums that typically garner a premium price to bulk alcohols. We deliver products to customers in the beverage, food, industrial and related-process industries via our own dedicated trucking fleet and common carrier.
Previous report
In early November, we took a significant step forward in our commitment to sustainability by finalizing a definitive CO 2 Transportation and Sequestration Agreement with Vault 44.01 for our carbon capture and storage project, or CCS. Under the terms of the agreement, Vault will handle the transportation, injection and sequestration of CO 2 from our Pekin Campus to the Mt. Simon sandstone formation in Illinois. This partnership marks a critical milestone on our journey toward a more sustainable and prosperous future. While we await EPA submission and approval, address financing and source equipment, this agreement brings us closer to achieving our goals of lowering our carbon footprint and monetizing the value of the biogenic CO 2 we produce at our Pekin Campus.
Previous report
In the third quarter of 2024, we improved our consolidated gross profit to $6.0 million and improved our Adjusted EBITDA to $12.2 million, including $3.6 million in realized gains on derivatives for the quarter. These results were primarily driven by an increase in our production capabilities and uptime at our Pekin Campus, increasing its profitability despite fluctuating market conditions, compared to the third quarter of 2023. These results compare to $13.6 million of Adjusted EBITDA for the same period in 2023, including $6.2 million in realized gains on derivatives and a cash grant of $2.8 million from the USDA’s Biofuel Producer Program.
Previous report
The third quarter began with solid ethanol crush margins supported by strong exports. Domestic demand began to weaken as weather-related events reduced miles driven. Ethanol production remained relatively high, outpacing demand and resulting in higher ethanol inventory levels and lower market prices. In addition, in the third quarter, carbon prices were approximately 80% lower in Oregon and Washington and 20% lower in California compared to the third quarter of 2023. Although carbon prices remained low in October, we have begun to see some price recovery.
Previous report
We increased productivity at our Pekin Campus wet mill to its highest level since 2020, reflecting in part the results of our successful biennial repairs and maintenance outage in April 2024. This translated into higher specialty alcohol production in the third quarter of 2024, reaching 42% of total sales volume at our Pekin Campus, seven percentage points higher than for the same period last year. We remain on track to sell 90 million gallons of specialty alcohols in 2024 and expect to match this volume in 2025.
Previous report
For the fourth quarter, we expect corn prices to remain low, reflecting a good 2024 harvest, which we anticipate will result in a strong supply carryout and attractive prices into 2025. However, with domestic corn prices lower than international prices, demand for United States corn exports will likely increase, straining logistics and driving up transportation costs. Moreover, when domestic corn prices are low, suppliers typically require that prices cover at least their costs, driving up corn basis. This dynamic is one reason we expanded our corn storage capacity at our Pekin Campus and are considering a further increase in storage capacity at the site.
Previous report
While higher corn transportation costs impact all ethanol producers, they have a more substantial impact on our Western operations, for which we source corn supplies from the Midwest, compared to Midwest ethanol producers that have access to local corn supplies and cheaper corn basis.
Previous report
To address these challenges, we continue to pursue opportunities to maximize the Western plants’ strengths and advantages. We have engaged Guggenheim Securities to actively explore our alternatives to monetize or optimize these assets, including through potential partnerships.
Previous report
Notably, while our Columbia facility is also experiencing margin compression, the combination of lower transportation costs, premiums earned on low-carbon ethanol and revenues generated from the sale of CO 2 make the plant more economically resilient than our Magic Valley facility.
Previous report
We continue to modernize our equipment and facilities to improve reliability, lower our operating costs and reduce our carbon footprint. For example, we are currently building a second alcohol loading dock at our Pekin Campus. Our goal for the project is to improve our river logistics by expediting the shipping process, adding redundancy and expanding our capabilities to accommodate a wider array of barges. We expect this project will yield a synergistic effect with our existing facilities and increase overall loading efficiencies. Our anticipated project cost is $3.0 million. The project is scheduled for completion in 2025.
Previous report
Sustainability
Previous report
We recently completed our sustainability report for 2023 and increased our disclosures on topics such as environmental, health, safety, quality and social metrics. Our core values of responsibility, integrity and quality drive our mission to produce the highest quality, sustainable ingredients that make everyday products better. We proudly offer 100% bio-based renewable products from our specialty alcohols and essential ingredients to renewable fuels and plant-based proteins. At our highly efficient dry grind facilities, we are striving for carbon intensity scores below 50 by optimizing efficiency, upgrading energy infrastructure and selecting sustainable feedstocks. Our dedication to sustainability and social responsibility extends to our customers, employees, investors, partners, suppliers and consumers, as well as our focus on product quality and safety.
Previous report
We conducted materiality assessments with internal and external stakeholders and identified multiple long-term market opportunities to viably expand our bio-based renewable offerings. The third-party certifications we earned include such areas as oversight on risk management; chemical storage, handling, transportation and disposal; multiple food safety initiatives; quality management; good manufacturing practices and requirements for all active pharmaceutical ingredients and excipient products; and supply chains for waste streams.
Previous report
Derivatives
Previous report
We employ a variety of risk management strategies to mitigate the price volatility of different commodities throughout the year as a normal course of business. These strategies may include managing the spread between corn and ethanol prices, otherwise known as the crush margin. We may also take positions on corn and natural gas. Currently, our core strategy is to hedge the premium over fuel grade ethanol of our specialty alcohol contracts that have fixed sales prices of up to one year or longer. Using derivatives, we lock-in certain premiums for the duration of the specialty alcohol contract over production that otherwise would be sold as ethanol. For positions that settle, we record the cumulative unrealized gains or losses on those positions since inception to realized. On the remaining unsettled positions, the change in market values measured at the end of the reporting period is reflected as unrealized. Unrealized amounts are not determinate of amounts that will be realized in future periods. However, we believe that the most accurate method to assess the value or obligation to be realized in the future, measured as of a specific date, is to note the amounts on our balance sheet. The net derivative asset or liability amount on the balance sheet denotes the amount that we would realize if we liquidated all of our positions as of that specific period-end date.
Previous report
Three Months ended September 30, 2024 as compared to the Three Months ended September 30, 2023
Previous report
Net sales of alcohol from our Pekin Campus production segment declined by $22.1 million, or 17%, to $106.5 million for the three months ended September 30, 2024 as compared to $128.6 million for the same period in 2023. Our total volume of production gallons sold increased by 0.8 million gallons, or 2%, to 52.8 million gallons for the three months ended September 30, 2024 as compared to 52.0 million gallons for the same period in 2023. The decrease of $0.46, or 19%, in the segment’s average sales price per gallon for the three months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales from the segment by $23.7 million. With the segment’s average sales price per gallon of $2.02 for the three months ended September 30, 2024, we generated $1.6 million more in net sales from the 0.8 million additional gallons of alcohol sold in the three months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of essential ingredients from our Pekin Campus production segment declined by $10.4 million, or 20%, to $41.2 million for the three months ended September 30, 2024 as compared to $51.6 million for the same period in 2023. Our total volume of essential ingredients sold increased by 10,400 tons, or 5%, to 236,600 tons for the three months ended September 30, 2024 from 226,200 tons for the same period in 2023. The decrease of $54.06, or 24%, in the segment’s average sales price per ton for the three months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales from the segment by $12.2 million. With the segment’s average sales price per ton of $174.21 for the three months ended September 30, 2024, we generated $1.8 million in additional net sales from the 10,400 additional tons of essential ingredients sold in the three months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of alcohol from our Western production segment declined by $20.8 million, or 36%, to $36.4 million for the three months ended September 30, 2024 as compared to $57.2 million for the same period in 2023. Our total volume of alcohol sold decreased by 4.2 million gallons, or 19%, to 18.0 million gallons for the three months ended September 30, 2024 as compared to 22.2 million gallons for the same period in 2023. The decrease of $0.55, or 21%, in the segment’s average sales price per gallon for the three months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales from the segment by $12.3 million. With the segment’s average sales price per gallon of $2.02 for the three months ended September 30, 2024, we generated $8.5 million less in net sales from the 4.2 million fewer gallons of alcohol sold in the three months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of essential ingredients from our Western production segment declined by $7.4 million, or 42%, to $10.4 million for the three months ended September 30, 2024 as compared to $17.8 million for the same period in 2023. Our total volume of essential ingredients sold decreased 42,200 tons, or 21%, to 154,800 tons for the three months ended September 30, 2024 from 197,000 tons for the same period in 2023. The decrease of $23.33, or 26%, in our average sales price per ton for the three months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales of essential ingredients from the segment by $4.6 million. With the segment’s average sales price per ton of $67.24 for the three months ended September 30, 2024, we generated $2.8 million less in net sales from the 42,200 fewer tons of essential ingredients sold in the three months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Our consolidated gross profit improved to $6.0 million for the three months ended September 30, 2024 from $4.2 million for the same period in 2023, representing a gross margin of 2.4% and 1.3% for the three months ended September 30, 2024 and 2023, respectively. With total alcohol sales volumes essentially flat, our consolidated gross profit increased due to lower overall corn costs, primarily from lower corn basis costs, which declined $0.63 per bushel compared to the same period in 2023. Our lower corn costs were, however, partially offset by a $0.10 decline in market crush margins to $0.41 per gallon compared to the same period in 2023.
Previous report
Our Pekin Campus contributed $6.2 million to gross profit, improving tenfold year-over-year, in part due to productivity and other improvements resulting from our scheduled repairs and maintenance in April 2024 as well as a positive shift in sales mix to higher margin products. In particular, we sold 4.0 million gallons more of specialty alcohols for the three months ended September 30, 2024 compared to the same period in 2023. These improvements were partially offset by a 24% decline in our average sales price for essential ingredients compared to the same period in 2023.
Previous report
Our Western facilities generated a gross loss of $2.3 million for the three months ended September 30, 2024 compared to a gross profit of $1.5 million for the same period in 2023. This $3.8 million year-over-year decline in gross profit is largely attributable to production downtime at our Magic Valley facility and higher costs associated with upgrading equipment at the plant and restarting the facility at the beginning of the third quarter of 2024. Production at our Magic Valley plant did not reach average full capacity until October 2024. In addition, our Columbia facility generated $1.6 million less in high margin revenue due to an 80% drop in carbon prices in the region.
Previous report
We realized consolidated derivative gains of $3.6 million for the three months ended September 30, 2024 compared to $6.2 million for the same period in 2023.
Previous report
During the third quarter of 2024, on a consolidated basis, we recorded $8.1 million dollars in repairs and maintenance expense, in line with the prior-year quarter, and we are on track to meet our 2024 full-year estimate of $34.0 million dollars of repairs and maintenance expense.
Previous report
Our Pekin Campus production segment’s gross profit, net of intercompany activity, increased by $5.9 million to $7.0 million for the three months ended September 30, 2024 as compared to $1.1 million for the same period in 2023. Of this increase, $5.8 million is attributable to higher margins and $0.1 million is attributable to higher sales volumes.
Previous report
Our marketing and distribution segment’s gross profit, net of intercompany activity, increased by $0.4 million to $1.3 million for the three months ended September 30, 2024 as compared to a gross profit of $0.9 million for the same period in 2023. Of this improvement, $0.3 million is attributable to higher margins from sales of third-party fuel-grade ethanol and $0.1 million attributable to higher sales volumes.
Previous report
Our Western production segment’s gross profit, net of intercompany activity, declined by $3.8 million to a gross loss of $2.1 million for the three months ended September 30, 2024 as compared to a gross profit of $1.7 million for the same period in 2023. Of this decline, $4.2 million is attributable to lower renewable fuel margins, partially offset by $0.4 million attributable to lower sales volumes at negative margins.
Previous report
Nine Months ended September 30, 2024 as compared to the Nine Months ended September 30, 2023
Previous report
Net Sales
Previous report
The decrease in our consolidated net sales for the nine months ended September 30, 2024 as compared to the same period in 2023 is primarily attributable to lower average sales prices per gallon for both specialty alcohols and renewable fuel as well as lower average sales prices of essential ingredients due to lower corn prices. In addition, we had lower sales of renewable fuel and essential ingredients due to the hot-idling of our Magic Valley plant in January 2024, and the biennial wet mill outage at our Pekin Campus for repairs and maintenance in April 2024.
Previous report
Net sales of alcohol from our Pekin Campus production segment declined by $73.1 million, or 19%, to $315.5 million for the nine months ended September 30, 2024 as compared to $388.6 million for the same period in 2023. Our total volume of production gallons sold increased by 2.8 million gallons, or 2%, to 160.7 million gallons for the nine months ended September 30, 2024 as compared to 157.9 million gallons for the same period in 2023. The decrease of $0.50, or 20%, in the segment’s average sales price per gallon for the nine months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales from the segment by $78.6 million. With the segment’s average sales price per gallon of $1.96 for the nine months ended September 30, 2024, we generated $5.5 million more in net sales from the 2.8 million additional gallons of alcohol sold in the nine months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of essential ingredients from our Pekin Campus production segment declined by $41.9 million, or 25%, to $127.3 million for the nine months ended September 30, 2024 as compared to $169.2 million for the same period in 2023. Our total volume of essential ingredients sold decreased by 1,200 tons, or less than 1%, to 659,200 tons for the nine months ended September 30, 2024 from 660,400 tons for the same period in 2023. The decrease of $63.13, or 25%, in the segment’s average sales price per ton for the nine months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales from the segment by $41.7 million. With the segment’s average sales price per ton of $193.11 for the nine months ended September 30, 2024, we generated $0.2 million less in net sales from the 1,200 fewer tons of essential ingredients sold in the nine months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of alcohol from our marketing and distribution segment, excluding intersegment sales, declined by $36.7 million, or 17%, to $179.3 million for the nine months ended September 30, 2024 as compared to $216.0 million for the same period in 2023.
Previous report
Our volume of third-party alcohol sold reported gross by the segment increased by 6.9 million gallons, or 8%, to 89.3 million gallons for the nine months ended September 30, 2024 as compared to 82.4 million gallons for the same period in 2023. The $0.61 per gallon, or 23%, decrease in the segment’s average sales price per gallon for the nine months ended September 30, 2024 as compared to the same period in 2023 resulted in a $50.6 million decline in our net sales from third-party fuel-grade ethanol sold by the segment. With the segment’s average sales price per gallon of $2.01 for the nine months ended September 30, 2024, we realized $13.9 million in additional net sales from the 6.9 million additional gallons of third-party alcohol sold gross in the nine months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of alcohol from our Western production segment declined by $48.4 million, or 40%, to $74.1 million for the nine months ended September 30, 2024 as compared to $122.5 million for the same period in 2023. Our total volume of alcohol sold decreased by 8.4 million gallons, or 18%, to 38.2 million gallons for the nine months ended September 30, 2024 as compared to 46.6 million gallons for the same period in 2023. The decrease of $0.69, or 26%, in the segment’s average sales price per gallon for the nine months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales from the segment by $32.1 million. With the segment’s average sales price per gallon of $1.94 for the nine months ended September 30, 2024, we generated $16.3 million less in net sales from the 8.4 million fewer gallons of alcohol sold in the nine months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of essential ingredients from our Western production segment declined by $16.4 million, or 40%, to $24.2 million for the nine months ended September 30, 2024 as compared to $40.6 million for the same period in 2023. Our total volume of essential ingredients sold decreased 90,800 tons, or 21%, to 335,400 tons for the nine months ended September 30, 2024 from 426,200 tons for the same period in 2023. The decrease of $23.19, or 24%, in our average sales price per ton for the nine months ended September 30, 2024 as compared to the same period in 2023 reduced our net sales of essential ingredients from the segment by $9.9 million. With the segment’s average sales price per ton of $72.10 for the nine months ended September 30, 2024, we generated $6.5 million less in net sales from the 90,800 fewer tons of essential ingredients sold in the nine months ended September 30, 2024 as compared to the same period in 2023.
Previous report
Net sales of alcohol from corporate and other declined by $3.7 million, or 30%, to $8.6 million for the nine months ended September 30, 2024 as compared to $12.3 million for the same period in 2023. These sales are from Eagle Alcohol’s business.
Previous report
Our consolidated gross profit declined to $11.1 million for the nine months ended September 30, 2024 from $18.2 million for the same period in 2023, representing a gross margin of 1.5% and 1.9% for the nine months ended September 30, 2024 and 2023, respectively. Our consolidated gross profit declined primarily due to higher repairs and maintenance expense and lower average sales prices for our essential ingredients due, in particular, to a compression on protein prices from an increase in soybean meal supply, a consequence of production growth in soy crush driven by the demand for renewable diesel. Another contributing factor to the year-over-year decline in gross profit is production downtime at our Magic Valley facility and higher operating costs associated with upgrading equipment at the plant. We restarted our Magic Valley facility in July 2024, but production did not reach average full capacity until October 2024.
Showing the first 40 of 52 passages. Open the source sections for the rest.
Reworded paragraphs (35)
Previous wording
We produce and distribute renewable fuel and essential ingredients. We are also the largest producer of specialty alcohols in the United States.
Current wording
We are a leading producer and distributor of specialty alcohols, renewable fuels and essential ingredients in the United States.
Previous wording
We operate five alcohol production facilities. Three of our production facilities are located in Illinois, one is located in Oregon and another is located in Idaho. We have an annual alcohol production capacity of up to 350 million gallons, including both renewable fuel and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols. Of this amount, we are able to produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among the highest quality beverage-grade alcohol and alcohols of other quality specifications. We market and distribute all of the alcohols produced at our facilities as well as alcohols produced by third parties. In 2023, we marketed and distributed approximately 383 million gallons combined of our own alcohols as well as fuel-grade ethanol produced by third parties, and over 1.5 million tons of essential ingredients on a dry matter basis.
Current wording
We operate five alcohol production facilities. Three of our production facilities are located in Illinois, one is located in Oregon and another is located in Idaho. We have an annual alcohol production capacity of 350 million gallons, including both renewable fuels and specialty alcohols ranging from industrial-, pharmaceutical-, and high-quality food- and beverage-grade alcohols. Of this amount, we can produce up to 110 million gallons annually of specialty alcohols, depending on our product mix among high-quality beverage-grade alcohol and other quality specification alcohols. We market and distribute all of the alcohols produced at our facilities as well as alcohols produced by third parties. In 2024, we marketed and distributed approximately 386 million gallons combined of our own produced alcohols as well as fuel-grade ethanol produced by third parties, and over 1.4 million tons of essential ingredients on a dry matter basis.
Previous wording
We report our financial and operating performance in three segments: (1) Pekin campus production, which includes the production and sale of alcohols and essential ingredients produced at our three production facilities located in Pekin, Illinois, which we refer to as our Pekin Campus, (2) marketing and distribution, which includes marketing and merchant trading for company-produced alcohols and essential ingredients on an aggregated basis, and sales of fuel-grade ethanol sourced from third parties, and (3) Western production, which includes the production and sale of renewable fuel and essential ingredients produced at our two western production facilities on an aggregated basis, none of which are individually so significant as to be considered a separately reportable segment.
Current wording
We report our financial and operating performance in three distinct segments:
Previous wording
Our mission is to produce the highest quality, sustainable ingredients from renewable resources that make everyday products better. We intend to accomplish this goal in part by investing in our specialized and higher value specialty alcohol production and distribution infrastructure, expanding production in high-demand essential ingredients, expanding and extending the sale of our products into new regional and international markets, building efficiencies and economies of scale and by capturing a greater portion of the value stream.
Current wording
Our mission is to produce the highest quality, sustainable ingredients that make everyday products better. We intend to accomplish this goal in part by investing in our specialized and higher value specialty alcohol production and distribution infrastructure, expanding production in high-demand essential ingredients, expanding and extending the sale of our products into new regional and international markets, building efficiencies and economies of scale and by capturing a greater portion of the value stream.
Previous wording
We produce specialty alcohols, renewable fuel and essential ingredients, focusing on five key markets:Health, Home & Beauty;Food & Beverage;Industry & Agriculture; Essential Ingredients; andRenewable Fuels. Products for theHealth, Home & Beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners. Products for theFood & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar as well as corn germ used for corn oils. Products forIndustry & Agriculture markets include alcohols and other products for paint applications and fertilizers.Products forEssential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, and distillers grains and liquid feed used in commercial animal feed and pet foods. We also sell yeast for human consumption. Our products for theRenewable Fuels markets include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels.
Current wording
We produce specialty alcohols, renewable fuels and essential ingredients, focusing on five key markets:Health, Home & Beauty;Food & Beverage;Industry & Agriculture;Essential Ingredients; andRenewable Fuels. Products forHealth, Home & Beauty markets include specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants and cleaners. Products forFood & Beverage markets include grain neutral spirits used in alcoholic beverages and vinegar and corn germ used for corn oils. Products forIndustry & Agriculture markets include alcohols and other products for paint applications and fertilizers. Products forEssential Ingredients markets include dried yeast, corn protein meal, corn protein feed, corn germ, distillers grains, liquid CO 2 and liquid feed used in commercial animal feed and pet foods. We also sell yeast and liquid CO 2 for human consumption. Our products for theRenewable Fuels markets include fuel-grade ethanol and distillers corn oil used as a feedstock for renewable diesel and biodiesel fuels.
Previous wording
We produce our alcohols and essential ingredients at our production facilities. Our production facilities located in Illinois are in the heart of the Corn Belt, benefit from relatively low-cost and abundant feedstock and enjoy logistical advantages that enable us to provide our products to both domestic and international markets via truck, rail or barge. Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers, offering significant timing, transportation cost and logistical advantages.
Current wording
We produce our alcohols and essential ingredients at our facilities described below. Our production facilities located in Illinois are in the heart of the Corn Belt, benefit from relatively low-cost and abundant feedstock and enjoy logistical advantages that enable us to provide our products to both domestic and international markets via truck, rail or barge. Our production facilities located in Oregon and Idaho are near their respective fuel and feed customers, offering significant timing, product transportation cost and logistical advantages.
Previous wording
At our Magic Valley plant, we completed upgrades to Harvesting Technology’s system to capture high protein and corn oil products and restarted the plant in July to prove out the system and benefit from the positive crush margins at the time. In October, the Magic Valley facility consistently achieved average ethanol production rates at full capacity, the protein content yield from the plant reached 50% or greater, and we were able to expand our corn oil yields. This successful restart and operation has informed us of the technology system’s capabilities as we consider system deployment at our other dry mills. Unfortunately, recent increases in regional corn basis and declining market prices for protein and corn oil have resulted in overall margin compression, outweighing the economic benefits of our plant improvements. We will continue to explore operational opportunities and assess market trends, but unless there are meaningful improvements in overall economics at the facility, we plan to idle the plant before the end of 2024, which we believe will have a positive impact on our financial results.
Current wording
In January 2024, we temporarily hot-idled our Magic Valley facility to minimize losses from negative regional crush margins and to expedite the installation of additional equipment to achieve the intended production rate, quality and consistency from our corn oil and high protein system at the facility. We restarted our Magic Valley facility in July 2024 and by October 2024, the facility consistently achieved average ethanol production rates at full capacity, the protein content yield from the plant reached 50% or greater, and we were able to expand our corn oil yields. Increases in regional corn basis and declining market prices for protein and corn oil resulted in overall margin compression, outweighing the economic benefits of our plant improvements. As a consequence, we cold-idled our Magic Valley facility on December 31, 2024 to minimize financial losses. We continue to provide terminal services at the plant and intend to resume operations at the facility when the economic environment in the region sustainably improves. We believe that the cold-idling of our Magic Valley facility will have a positive impact on our overall financial results in 2025 compared to 2024.
Previous wording
All of our production facilities are currently operating. However, unless there are meaningful improvements in overall economics at our Magic Valley facility, we plan to idle the plant before the end of 2024, which we believe will have a positive impact on our financial results. In January 2024, we temporarily hot-idled our Magic Valley facility to minimize losses from negative regional crush margins and to expedite the installation of additional equipment needed to achieve the intended production rate, quality and consistency from the corn oil and high protein system at the facility. We restarted our Magic Valley facility in July 2024. As market conditions change, we may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility.
Current wording
As market conditions change, we may increase, decrease or idle production at one or more operating facilities or resume operations at any idled facility.
Previous wording
We market and distribute all of the alcohols and essential ingredients we produce at our facilities. We also market and distribute alcohols produced by third parties.
Current wording
We market and distribute all the alcohols and essential ingredients we produce at our facilities. We also market and distribute alcohols produced by third parties.
Previous wording
We have extensive and long-standing customer relationships, both domestic and international, for our specialty alcohols and essential ingredients. These customers include producers and distributors of ingredients for cosmetics, sanitizers and related products, distilled spirits producers, food products manufacturers, producers of personal health/consumer health and personal care hygiene products, and global trading firms.
Current wording
We have extensive and long-standing customer relationships, both domestic and international, for our specialty alcohols, renewable fuels and essential ingredients. These customers include producers and distributors of ingredients for cosmetics, sanitizers and related products, distilled spirits producers, food products manufacturers, producers of personal health/consumer health and personal care hygiene products, and global trading firms.
Previous wording
Our renewable fuel customers are located throughout the Western and Midwestern United States and consist of integrated oil companies and gasoline marketers who blend fuel-grade ethanol into gasoline. Our customers depend on us to provide a reliable supply of fuel-grade ethanol and manage the logistics and timing of delivery. Our customers collectively require fuel-grade ethanol volumes in excess of the supplies we produce at our facilities. We secure additional fuel-grade ethanol supplies from third-party ethanol producers. We arrange for transportation, storage and delivery of fuel-grade ethanol purchased by our customers through our agreements with third-party service providers in the Western United States as well as in the Midwest from a variety of sources.
Current wording
Our renewable fuels customers are located throughout the Western and Midwestern United States and consist of integrated oil companies and gasoline marketers who blend fuel-grade ethanol into gasoline. Our customers depend on us to provide a reliable supply of fuel-grade ethanol and manage the logistics and timing of delivery. Our customers collectively require fuel-grade ethanol volumes in excess of the supplies we produce at our facilities. We secure additional fuel-grade ethanol supplies from third-party ethanol producers. We arrange for transportation, storage and delivery of fuel-grade ethanol purchased by our customers through our agreements with third-party service providers in the Western United States as well as in the Midwest from a variety of sources.
Previous wording
We market food-grade essential ingredients to human and pet food markets, our feed products such as distillers grains primarily to export markets from our Pekin Campus, and other feed products to dairies and feedlots, in many cases located near our production facilities. These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers. We do not market essential ingredients from other producers.
Current wording
We market food-grade essential ingredients to human and pet food markets, our feed products (such as distillers grains) primarily to export markets from our Pekin Campus, and other feed products to dairies and feedlots, in many cases located near our production facilities. These customers use our feed products for livestock as a substitute for corn and other sources of starch and protein. We sell our corn oil to poultry, renewable diesel and biodiesel customers.
Previous wording
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses for each period. We believe that of our significant accounting policies, the following critical accounting policies and estimates are those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain: accounting for business combinations; revenue recognition; impairment of long-lived assets and held-for-sale classification; valuation allowance for deferred taxes and derivative instruments. Except as noted below, these significant accounting principles are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses for each period. We believe that of our significant accounting policies, the following critical accounting policies and estimates are those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain: accounting for business combinations; revenue recognition; impairment of long-lived assets; valuation allowance for deferred taxes and derivative instruments. Except as noted below, these significant accounting principles are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
Certain performance metrics that we believe are important indicators of our results of operations include the following:
Current wording
Certain performance metrics that we believe are important indicators of our results of operations:
Previous wording
The following table presents our net sales, cost of goods sold and gross profit in dollars and gross profit as a percentage of net sales (in thousands, except percentages):
Current wording
The following table presents our net sales, cost of goods sold and gross profit (loss) in dollars and gross profit (loss) as a percentage of net sales (in thousands, except percentages):
Previous wording
The decline in our consolidated net sales for the three months ended September 30, 2024 as compared to the same period in 2023 is primarily attributable to lower average sales prices per gallon for both specialty alcohol and renewable fuel as well as lower average sales prices of essential ingredients due to a lower commodity price environment. In addition, we had lower sales of renewable fuel and essential ingredients due to the hot-idling of our Magic Valley plant in January 2024, which we restarted in July 2024, but which did not reach average full capacity until October 2024.
Current wording
The decrease in our consolidated net sales for the three months ended March 31, 2025 as compared to the same period in 2024 is attributable to fewer total gallons sold as well as lower volumes and lower average sales prices of essential ingredients due to a lower commodity price environment, partially offset by an increase in our average sales prices per gallon for both specialty alcohols and renewable fuel.
Previous wording
Net sales of alcohol from our marketing and distribution segment, excluding intersegment sales, declined by $4.3 million, or 7%, to $54.6 million for the three months ended September 30, 2024 as compared to $58.9 million for the same period in 2023.
Current wording
Net sales of alcohol from our marketing and distribution segment, excluding intersegment sales, declined by $5.4 million, or 10%, to $49.1 million for the three months ended March 31, 2025 as compared to $54.5 million for the same period in 2024.
Previous wording
The $0.52 per gallon, or 19%, decrease in the segment’s average sales price per gallon for the three months ended September 30, 2024 as compared to the same period in 2023 resulted in a $11.4 million decline in our net sales from third-party fuel-grade ethanol sold by the segment. Our volume of third-party alcohol sold reported gross by the segment increased by 3.3 million gallons, or 15%, to 25.2 million gallons for the three months ended September 30, 2024 as compared to 21.9 million gallons for the same period in 2023. With the segment’s average sales price per gallon of $2.17 for the three months ended September 30, 2024, we realized $7.1 million in additional net sales from the 3.3 million additional gallons of third-party alcohol sold gross in the three months ended September 30, 2024 as compared to the same period in 2023.
Current wording
Our volume of third-party alcohol sold reported gross by the segment declined by 5.3 million gallons, or 18%, to 24.4 million gallons for the three months ended March 31, 2025 as compared to 29.7 million gallons for the same period in 2024. With the segment’s average sales price per gallon of $2.01 for the three months ended March 31, 2025, we generated $10.6 million less in net sales from the 5.3 million fewer gallons of third-party alcohol sold gross in the three months ended March 31, 2025 as compared to the same period in 2024.
Previous wording
Net sales of alcohol from corporate and other declined by $1.4 million, or 34%, to $2.7 million for the three months ended September 30, 2024 as compared to $4.1 million for the same period in 2023. These sales are from Eagle Alcohol’s business.
Current wording
Net sales of alcohol from corporate and other declined by $1.4 million, or 47%, to $1.6 million for the three months ended March 31, 2025 as compared to $3.0 million for the same period in 2024. These sales are from Eagle Alcohol’s business.
Previous wording
Our marketing and distribution segment’s gross profit, net of intercompany activity, declined by $0.3 million to a gross profit of $2.9 million for the nine months ended September 30, 2024 as compared to a gross profit of $3.2 million for the same period in 2023. Of this decline, $0.5 million is attributable to lower margins from sales of third-party fuel-grade ethanol, partially offset by $0.2 million attributable to higher sales volumes.
Current wording
Our marketing and distribution segment’s gross profit, net of intercompany activity, improved by $1.1 million to a gross profit of $1.7 million for the three months ended March 31, 2025 as compared to a gross profit of $0.6 million for the same period in 2024. Of this improvement, $1.5 million is attributable to higher margins from sales of third-party fuel-grade ethanol, partially offset by $0.4 million attributable to lower sales volumes for the three months ended March 31, 2025 as compared to the same period in 2024.
Previous wording
Our Western production segment’s gross profit, net of intercompany activity, declined by $12.3 million to a gross loss of $14.1 million for the nine months ended September 30, 2024 as compared to a gross loss of $1.8 million for the same period in 2023. Of this decline, $15.4 million is attributable to lower renewable fuel margins and hot-idling costs at our Magic Valley facility, partially offset by $3.1 million attributable to lower sales volumes at negative margins.
Current wording
Our Western production segment’s gross profit, net of intercompany activity, improved by $7.1 million to a gross loss of $1.3 million for the three months ended March 31, 2025 as compared to a gross loss of $8.4 million for the same period in 2024. Of this improvement, $6.7 million is attributable to improved renewable fuel margins and $0.4 million is attributable to lower sales volumes at negative margins of both renewable fuel and essential ingredients, both of which are primarily due to the cold-idling of our Magic Valley facility.
Previous wording
Gross profit from corporate and other declined by $0.7 million to a gross loss of $0.2 million for the three months ended September 30, 2024 as compared to a gross profit of $0.5 million for the same period in 2023, all of which were from Eagle Alcohol’s business.
Current wording
Gross profit from corporate and other declined by $0.4 million to a gross loss of less than $0.1 million for the three months ended March 31, 2025 as compared to a gross profit of $0.3 million for the same period in 2024, all of which were from Eagle Alcohol’s business.
Previous wording
The following table presents our net loss available to common stockholders in dollars and as a percentage of net sales (in thousands, except percentages):
Current wording
The following table presents our net loss attributable to common stockholders in dollars and as a percentage of net sales (in thousands, except percentages):
Previous wording
During the nine months ended September 30, 2024, we funded our operations primarily from cash on hand, cash provided by our operations and Kinergy’s operating line of credit. In addition to funding our operations, we used our capital resources to advance our capital improvement projects and make an annual payment relating to our acquisition of Eagle Alcohol. As of September 30, 2024, we had $38.5 million in cash, cash equivalents and restricted cash, $27.2 million available for borrowing under Kinergy’s operating line of credit and $65.0 million that may be available for capital improvement projects under our term loan with Orion Infrastructure Capital, subject to certain conditions. We believe we have sufficient liquidity to meet our anticipated working capital, debt service and other liquidity needs to fund our operations for at least the next twelve months from the date of this report. We must, however, raise significant additional capital to advance and complete some of our capital improvement projects, including our CCS project.
Current wording
During the three months ended March 31, 2025, we funded our operations primarily from cash on hand and proceeds from Kinergy’s operating line of credit. In addition to funding our operations, our capital resources were used to purchase Kodiak Carbonic and for capital expenditures. As of March 31, 2025, we had $27.2 million in cash, cash equivalents and restricted cash, $11.7 million available for borrowing under Kinergy’s operating line of credit and $65.0 million that may be available for capital improvement projects under our Orion term loan, subject to certain conditions. We believe we have sufficient liquidity to meet our anticipated working capital, debt service and other liquidity needs for at least the next twelve months from the date of this report.
Previous wording
At September 30, 2024, we had approximately $56.3 million of net assets at our subsidiaries that were not available to be transferred to Alto Ingredients, Inc. in the form of dividends, distributions, loans or advances due to restrictions contained in our subsidiaries’ credit facilities.
Current wording
At March 31, 2025, we had approximately $55.6 million of net assets at our subsidiaries that were not available to be transferred to Alto Ingredients, Inc. in the form of dividends, distributions, loans or advances due to restrictions contained in our subsidiaries’ credit facilities.
Previous wording
Working capital declined by $3.5 million to $100.0 million at September 30, 2024 compared to $103.5 million at December 31, 2023 due to a decrease of $23.7 million in current assets, partially offset by a decrease of $20.2 million in current liabilities.
Current wording
Working capital improved to $100.3 million at March 31, 2025 from $95.3 million at December 31, 2024 as a result of a decrease of $4.7 million in current liabilities and an increase of $0.3 million in current assets.
Previous wording
Our cash, cash equivalents and restricted cash declined by $7.0 million primarily due to $12.0 million in cash used in our investing activities and $1.0 million in cash used in our financing activities, partially offset by $6.0 million of cash provided by our operating activities.
Current wording
Our cash, cash equivalents and restricted cash declined by $9.0 million due to $18.2 million in cash used in our operating activities and $7.8 million used in our investing activities, partially offset by $17.0 million in cash provided by our financing activities.
Previous wording
We generated $6.3 million in cash from our operating activities during the nine months ended September 30, 2024 as compared to $10.2 million for the same period in 2023. Specific factors that contributed to the change in cash from our operating activities include:
Current wording
We used $18.2 million of cash in our operations for the three months ended March 31, 2025 as compared to $1.4 million of cash provided by our operations for the same period in 2024. Significant factors that contributed to the change in cash provided by our operating activities include:
Previous wording
Kinergy maintains an operating line of credit with Wells Fargo Bank for an aggregate amount of up to $100.0 million. The credit facility matures on November 7, 2027. Interest accrues under the credit facility at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin ranging from 1.25% to 1.75%. The credit facility’s monthly unused line fee is 0.25% to 0.375% of the amount by which the maximum credit under the facility exceeds the average daily principal balance during the immediately preceding month. Payments that may be made by Kinergy to Alto Ingredients, Inc. as reimbursement for management and other services provided by Alto Ingredients, Inc. to Kinergy are limited under the terms of the credit facility to $1.5 million per fiscal quarter. The credit facility also includes the accounts receivable of our indirect wholly-owned subsidiary, Alto Nutrients, LLC, or Alto Nutrients, as additional collateral. Payments that may be made by Alto Nutrients to Alto Ingredients, Inc. as reimbursement for management and other services provided by Alto Ingredients, Inc. to Alto Nutrients are limited under the terms of the credit facility to $0.5 million per fiscal quarter. Alto Nutrients markets our essential ingredients and also provides raw material procurement services to our subsidiaries. In addition, the amount of cash distributions that Kinergy or Alto Nutrients may make to us is also limited to up to 75% of excess cash flow.
Current wording
Kinergy maintains an operating line of credit for an aggregate amount of up to $100.0 million. The credit facility matures on November 7, 2027. Interest accrues under the credit facility at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin ranging from 1.25% to 1.75%. The credit facility’s monthly unused line fee is 0.25% to 0.375% of the amount by which the maximum credit under the facility exceeds the average daily principal balance during the immediately preceding month. Payments that may be made by Kinergy to Alto Ingredients, Inc. as reimbursement for management and other services provided by Alto Ingredients, Inc. to Kinergy are limited under the terms of the credit facility to $1.5 million per fiscal quarter. The credit facility also includes the accounts receivable of our indirect wholly-owned subsidiary, Alto Nutrients, LLC, or Alto Nutrients, as additional collateral. Payments that may be made by Alto Nutrients to Alto Ingredients, Inc. as reimbursement for management and other services provided by Alto Ingredients, Inc. to Alto Nutrients are limited under the terms of the credit facility to $0.5 million per fiscal quarter. Alto Nutrients markets our essential ingredients and also provides raw material procurement services to our subsidiaries. In addition, the amount of cash distributions that Kinergy or Alto Nutrients may make to us is also limited to up to 75% of excess cash flow.
Previous wording
We believe Kinergy and Alto Nutrients are in compliance with the fixed-charge coverage ratio covenant as of the filing of this report. The following table sets forth the fixed-charge coverage ratio financial covenant and the actual results for the periods presented:
Current wording
We believe Kinergy and Alto Nutrients are in compliance with the fixed-charge coverage ratio financial covenant as of the filing of this report. The following table sets forth the fixed-charge coverage ratio financial covenant and the actual results for the periods presented:
Previous wording
Alto Ingredients, Inc. has guaranteed all of Kinergy’s obligations under the credit facility. As of September 30, 2024, Kinergy had an outstanding balance of $30.6 million and $27.2 million of unused borrowing availability under the credit facility.
Current wording
Alto Ingredients, Inc. has guaranteed all of Kinergy’s obligations under the credit facility. As of March 31, 2025, Kinergy had an outstanding balance of $57.0 million and $11.7 million of unused borrowing availability under the credit facility.
Previous wording
On November 7, 2022, we entered into a credit agreement with certain funds managed by Orion Infrastructure Capital, or Lenders, under which the Lenders extended a senior secured credit facility in the amount of up to $125.0 million, or Term Loan. The Term Loan is secured by a first priority lien on certain of our assets and a second priority lien on certain assets of Kinergy and Alto Nutrients. The Lenders agreed to advance to us up to $125.0 million upon the satisfaction of certain conditions. Interest accrues on the unpaid principal amount of the Term Loan at a fixed rate of 10% per annum. The Term Loan matures on November 7, 2028, or earlier upon acceleration.
Current wording
On November 7, 2022, we entered into a credit agreement with certain funds managed by Orion Infrastructure Capital, or Lenders, under which the Lenders extended a senior secured credit facility in the amount of up to $125.0 million, or Term Loan. The Term Loan is secured by a first priority lien on certain of our assets and a second priority lien on certain assets of Kinergy and Alto Nutrients. Interest accrues on the unpaid principal amount of the Term Loan at a fixed rate of 10% per annum. The Term Loan matures on November 7, 2028, or earlier upon acceleration.
Previous wording
We must prepay amounts outstanding under the Term Loan on a semi-annual basis in an amount equal to a percentage of our excess cash flow based on a specified leverage ratio, as follows: (i) if our leverage ratio is greater than or equal to 3.0x, then the mandatory prepayment amount will equal 100% of our excess cash flow, (ii) if our leverage ratio is less than 3.0x and greater than or equal to 1.5x, then the mandatory prepayment amount will equal 50% of our excess cash flow, and (iii) if our leverage ratio is less than 1.5x, then the mandatory prepayment amount will equal 25% of our excess cash flow.
Current wording
We must prepay amounts outstanding under the Term Loan on a semi-annual basis on each June 30 th and December 31 st in an amount equal to a percentage of our excess cash flow based on a specified leverage ratio, as follows: (i) if our leverage ratio is greater than or equal to 3.0x, then the mandatory prepayment amount will equal 100% of our excess cash flow, (ii) if our leverage ratio is less than 3.0x and greater than or equal to 1.5x, then the mandatory prepayment amount will equal 50% of our excess cash flow, and (iii) if our leverage ratio is less than 1.5x, then the mandatory prepayment amount will equal 25% of our excess cash flow. No prepayment was made or required to be made for the three months ended March 31, 2025 and 2024.
Previous wording
As of September 30, 2024, the principal amount outstanding under the Term Loan was $60,000,000.
Current wording
As of March 31, 2025 and December 31, 2024, the principal amount outstanding under the Term Loan was $60.0 million.
Previous wording
As of September 30, 2024, we had future commitments for certain capital projects totaling $8.6 million. These commitments are scheduled to be satisfied through 2024 and 2025.
Current wording
As of March 31, 2025, we had future commitments for certain capital projects totaling $10.8 million. These commitments are scheduled to be satisfied in 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The $0.18 per gallon, or 10%, increase in the segment’s average sales price per gallon for the three months ended March 31, 2025 as compared to the same period in 2024 resulted in a $5.2 million increase in our net sales from third-party fuel-grade ethanol sold by the segment.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Net Sales, Cost of Goods Sold and Gross Profit
Previous report — wording carried elsewhere
Cost of Goods Sold and Gross Profit
Previous report — wording carried elsewhere
Cost of Goods Sold and Gross Profit
Previous report — wording carried elsewhere
Cash provided by our Operating Activities