Analyst Summary:
Alto Ingredients, Inc. (NASDAQ: ALTO) has reported its fourth-quarter and full-year 2022 financial results. The company's CEO, Mike Kandris, highlighted a series of growth, revenue diversification, and efficiency initiatives to expand annualized EBITDA by over $65 million by the end of 2025, with a projection of over $125 million by the end of 2026. The company’s new high-quality 190 proof and low-moisture 200 proof grain neutral spirits products will be introduced to the beverage, food, flavor, personal care, and pharmaceutical industries. Additionally, their carbon capture sequestration project, primary yeast production, corn oil technology, and high-protein installation at the Magic Valley facility will lead to improved efficiency, reliability, and capacity with additional corn storage, a natural gas pipeline installation, biogas conversion to renewable natural gas, energy cogeneration capabilities, and other equipment upgrades. To accelerate revenue diversification and growth plans, the company increased its access to capital with a term loan for up to $125 million in November 2022. The company expects these projects to contribute additional annualized EBITDA of over $65 million by the end of 2025, nearly doubling to over $125 million by the end of 2026 when carbon capture, cogeneration, and other initiatives are fully realized. Although the 2022 financial results were negatively impacted by commodity price swings, the company seeks to reduce its reliance on fuel ethanol margins through these initiatives.