Alto Ingredients, Inc. Q4 FY2025 earnings call

Brian mentioned 2025 was a year of strong execution in strategic realignment, including adjusting staffing, capturing cost savings, investing in plant throughput and efficiency, culling underperforming business activities, and maintaining operational disciplines. Carbonic acquisition improved profitability of Columbia ethanol plant and western segment. 2026 expects to qualify for 20 cents per gallon in 45Z credits at Columbia and Pekin dry mill facilities, generating approx $15 million net proceeds. Continues to pursue lowering carbon scores. For Western asset optimization, Columbia is no longer actively marketing assets, evaluating options for Magic Valley facility. 2026 capital expenditure plan is roughly $25 million, with ~45% for maintenance projects and ~55% for optimization projects including capacity increase at Pekin and dry mill. CO2 utilization remains an opportunity, intends to increase throughput, volume, and storage capacity in Pacific Northwest. Contracted to sell significant volume of renewable fuel exports for first half of 2026, sees opportunities to expand volumes and premiums. 2026 expects normal Q2 outages at ICP and Columbia, Beacon Dry Mill to take longer outage in second half to increase production capacity by ~8%.

Fourth quarter net sales were $232 million, $4 million lower than the prior year, reflecting a 10.6 million gallon reduction in volume sold mainly due to idling the Magic Valley facility. The average sales price per gallon increased to $2.10 from $1.88. Gross profit for Q4 2025 was $15.2 million, a significant increase from Q4 2024's gross loss of $1.4 million. Drivers included stronger market crush margin, increase in renewable fuel export sales, staffing reduction related cost savings, gain on pension valuation adjustment, sale of Oregon carbon credits, and contribution from carbonic acquisition. For the full year 2025, net income attributable to common stockholders was $12.1 million compared to a loss of $60.3 million in 2024. Adjusted EBITDA for Q4 2025 was $27.9 million, an increase of $35.6 million from Q4 2024's -$7.7 million, and for the full year 2025, adjusted EBITDA was $44.7 million, an improvement of $53.2 million from 2024's -$8.5 million.

2026 expects to qualify for 20 cents per gallon in 45Z credits at Columbia and Pekin dry mill facilities, generating approx $15 million net proceeds. 2026 capital expenditure plan of roughly $25 million, prioritizing highest ROI projects. Contracted to sell significant volume of renewable fuel exports for first half of 2026. Intends to increase production utilization rate in Western segment and expand CO2 throughput.

Q: Amit Dayal asked about steps to get more 45Z tax credits and 2026 implications, Brian and Rob responded about pursuing lowering carbon intensity scores, increasing production capacity at Pekin and dry mill, and traceability of feedstock.

Q: Eric Stein asked about quantifying ethanol exports and steps to increase volumes and margins, Brian and Rob discussed optimizing product value, finding balance between domestic and export markets, and past evolution of the company to lower vulnerabilities in tight crush margins.