Alto Ingredients, Inc. Q1 FY2026 earnings call

• First quarter is typically a seasonally weak period, but Aalto delivered strong results with profitability on adjusted EBITDA and net income basis due to stronger export sales, higher crush margins, and incremental earnings from 45Z tax credits. • Operational activities in first quarter: Extended cold weather disrupted river logistics and led to curtailment at Pekin campus, with acceleration of wet mill biennial outage work; plant outage at Columbia addressed deferred process related activities; normal outage at ICP planned for second quarter. • Capital projects: Repairs on original dock and construction of second alcohol loadout at Pekin campus on track to complete by end of 2026; project to increase throughput and storage capacity in Columbia liquid CO2 processing facility by adding third storage tank; moving planned outage at peak and dry mill to June to implement deep bottlenecking project to increase annual production capacity by about 8%; assessing large-scale CO2 utilization and sequestration opportunities at Pekin campus. • Monitoring macro conditions, including unrest in Middle East, and progress on E15, with AB30 in California providing pathway for year-round E15 sales and momentum for year-round E15 legislation building in Congress.

Consolidated net sales were $225 million, $2 million lower than in the prior year. This reflects a 4% reduction in volume sold for 3.7 million gallons, partially offset by a 4% increase in the average sales price per gallon from $1.93 to $2 on a consolidated basis. An improved product mix of higher renewable fuel export sales contributed $6.7 million. High quality alcohol volume sold decreased by 1.3 million gallons. Co-product protein feed and fuel prices improved, adding an additional net 2.2 million in revenues. Gross profit was $9.2 million compared to a gross loss of $1.8 million reported for Q1 2025. SG&A expenses decreased by $500,000 to $6.7 million. Adjusted EBITDA increased $9.1 million to $4.7 million compared to a negative adjusted EBITDA of $4.4 million for last year's first quarter. Cash balance was $20 million as of March 31, 2026. Cash flow from operating activities was $4 million during the first quarter. Capital expenditures for the first quarter were $1 million. Interest expense decreased by $531,000. Total borrowing availability was $94 million.

• Expect to qualify approximately 90 million gallons of combined production at Columbia and Pekin dry mill facilities in 2026 for 45Z tax credits, resulting in approximately $15 million in net proceeds after all monetization costs. • Priorities are to improve utilization and reliability, execute 2026 optimization and capital projects on time and on budget, and advance commercial strategy including expanding value from 45Z credits and optimally monetizing biogenic CO2 production to lower carbon footprint.

• Macro conditions including unrest in the Middle East can indirectly affect through energy and commodity volatility and freight and export logistics.

Q: Eric Stein asked about large-scale CO2 utilization and sequestration at Pekin, with discussion on changes in thinking due to moratoriums and legislation and opportunities for utilization and sequestration.

A: Brian explained about challenges like moratorium on pipelines and legislation precluding injection, but rethinking and pursuing utilization and sequestration with opportunities to monetize and working on clear plan.

Q: Samir Joshi asked about debt servicing, focus on reducing debt or CI scores, and impact of E15.

A: Brian and Rob said it's not binary, repayment mechanism works with cash flow paying down debt, also managing liquidity and capital expenditures, and on E15, sees it as complementing production incentives and helping balance market