Slides
Page 1
1 Elevating Essential Products Q1 2025 INVESTOR PRESENTATION reported on May 7, 2025 Leading producer of specialty alcohols and high quality ingredients
Page 2
2 Safe Harbor Statement Statements and information contained in this communication that refer to or include Alto Ingredients’ estimated or anticipated future results or other non- historical expressions of fact are forward-looking statements that reflect Alto Ingredients’ current perspective of existing trends and information as of the date of the communication. Forward looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “should,” “estimate,” “expect,” “forecast,” “outlook,” “guidance,” “intend,” “may,” “might,” “will,” “possible,” “potential,” “predict,” “project,” or other similar words, phrases or expressions. Such forward-looking statements include, but are not limited to, statements concerning: Alto Ingredients’ projected outlook and future performance, including the timing and effects of its business rationalization, reorganization and other cost savings initiatives; the timing, costs and effects of Alto Ingredients’ capital projects, including its carbon capture and storage (CCS) project and other opportunities to optimize carbon, and other business initiatives and strategies, and their financing, costs, timing and effects, including, but not limited to, financial and other results that Alto Ingredients expects to generate therefrom, including as to its newly-acquired liquid CO2 processing facility; regulatory developments, including expectations around E15 blending and its results on the fuel-grade ethanol industry; and Alto Ingredients’ other plans, objectives, expectations and intentions. It is important to note that Alto Ingredients’ plans, objectives, expectations and intentions are not predictions of actual performance. Actual results may differ materially from Alto Ingredients’ current expectations depending upon many factors affecting Alto Ingredients’ business and plans. These factors include, among others, adverse economic and market conditions, including for renewable fuels, specialty alcohols and essential ingredients; export conditions and international demand for the company’s products; unexpected repair and maintenance expenses; fluctuations in the price of and demand for oil and gasoline; raw material costs, including production input costs, such as corn and natural gas, as well as corn basis; adverse impacts of inflation (including tariffs) and supply chain constraints; and the cost, ability to fund, timing and effects of, including the financial and other results deriving from, Alto Ingredients’ repair and maintenance programs, plant improvement and other capital projects, including CCS, and other business initiatives and strategies. These factors also include, among others, the inherent uncertainty associated with financial and other projections and large-scale capital projects, including CCS; the anticipated size of the markets and continued demand for Alto Ingredients’ products; the impact of competitive products and pricing; the risks and uncertainties normally incident to the alcohol production and marketing industries; derivative gains and losses; changes in generally accepted accounting principles; successful compliance with governmental regulations applicable to Alto Ingredients’ facilities, products and/or businesses; changes in laws, regulations and governmental policies, including with respect to the Inflation Reduction Act’s tax and other benefits Alto Ingredients expects to derive from CCS, and proposed legislation that may materially and adversely affect its CCS project; the loss of key senior management or staff; and other events, factors and risks previously and from time to time disclosed in Alto Ingredients’ filings with the Securities and Exchange Commission including, specifically, those factors set forth in the “Risk Factors” section contained in Alto Ingredients’ Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2025.
Page 3
3 Transforming corn into the highest-quality, sustainable ingredients that make everyday products better 3
Page 4
4 Producer and distributor of specialty alcohols, renewable fuels and essential ingredients 4
Page 5
5 • Implemented Cost Saving Initiatives, Improving Profitability • Optimizing Carbon with Acquisition and Other Initiatives Unlocking Value 5 Targeting premium markets with high quality products Supporting the reduction in carbon emissions by pursuing CCS Optimizing asset base & executing efficiency initiatives Advancing traceability & sustainability certifications & programs Broadening customer base
Page 6
6 6 MAKING EVERYDAY PRODUCTS BETTER: Health, Home & Beauty Food & Beverage, including CO2 Industry & Agriculture Essential Ingredients Renewable Fuels Targeting Premium Markets Alto Columbia, LLC Alto Carbonic, LLC Dry Mill Beverage-grade liquid CO2 processor Boardman, Oregon Alto Magic Valley, LLC Dry Mill Burley, Idaho Eagle Alcohol, LLC Break Bulk Packaging & Distribution St. Louis, Missouri Alto Ingredients, Inc. Alto Pekin, LLC Headquarters Dry Mill Wet Mill & Distillery Yeast Plant Pekin, Illinois Alto ICP, LLC Dry Mill & Distillery Pekin, Illinois Kinergy Marketing LLC Pekin, Illinois Corporate Headquarters Production Distribution Marketing
Page 7
7 Making Everyday Products Better ALTO’S 100% BIO-BASED RENEWABLE INGREDIENTS SAMPLE END-USE PRODUCTS HEALTH, HOME & BEAUTY API Grade Ethyl Alcohol USP Grade Ethyl Alcohol > Laundry detergents > Over-the-counter medications > Mouthwash > Sanitizers > Disinfectant sprays FOOD & BEVERAGE Grain Neutral Spirits Corn Germ CO2 Gas & Liquid > Vinegar > Grain neutral spirits > Flavorings > Sauces > Ready-to-drink, such as hard seltzers > Beverage carbonation > Dry ice INDUSTRY & AGRICULTURE Industrial Grade Ethyl Alcohol > Automotive fluids > Fertilizers > Industrial feedstock (ethyl acetate, etc.) > Inks ESSENTIAL INGREDIENTS Alto Yeast Corn Meal, Oil, Germ & Protein Feed High Protein DDGS Distillers Grains > Pet foods and flavorings > Breadings > Plant-based proteins > Animal feeds > Food-grade and feed-grade corn oils > Aquaculture feeds RENEWABLE FUELS Transportation Fuel: Ethanol Corn Oil: Renewable Diesel Feedstock > E85 > Biodiesel > Racing fuel > 88 Octane 7
Page 8
8 Acquired beverage-grade liquid CO2 processor > $7.25M + working capital; accretive, compelling payback > Amended long-term sales offtake agreement Evaluating carbon capture and storage (CCS) > EPA Class VI permit application deemed complete in February 2025; approval process expected to take at least 2 years > Assessing Illinois bill SB1723, actively working to amend and mitigate potential impact of proposed prohibition of CCS directly through the Mahomet Aquifer, which includes an area contemplated for Pekin carbon storage > Developing options to optimize CO2 production regardless of legislative outcome. Considerations include relocating proposed well and amending Class VI application Exploring other market opportunities: sustainable aviation fuel (SAF), blue ethanol, ethanol-to-jet fuel, renewable natural gas, green methanol, etc. BENEFITS OF CCS AT PEKIN FACILITIES Optimizing Carbon 8 IRC Section 45Q tax incentives would improve economics Mount Simon Sandstone formation, near the Illinois Basin and the Pekin Campus Designed as dedicated short-distance intrastate pipeline, which greatly limits disruption and risk concerns
Page 9
9 Growth Catalyst for Ethanol Producers 9 E15 EXPANDING MARKET OPPORTUNITY > 50%, or 5-7BG, potential increase in U.S. ethanol demand if national year-round E15 adoption 1 > ~670MGY in CA when going from E10 to E15 (pending approval) 2 ECONOMIC BENEFITS > $/G consumer savings > Stronger rural economies, more jobs SUSTAINABILITY & ENERGY ADVANTAGES > Lower carbon emissions > Greater U.S. energy independence POLICY MOMENTUM > Bipartisan support for permanent, nationwide E15 sales > 95% of vehicles already compatible CLEAN TRANSPORTATION STANDARD ACT (ILLINOIS SB41) > Set to reduce the lifecycle carbon intensity of fuels > Similar to the standards adopted on the West Coast Unlocking Growth, Savings and Sustainability for America’s Fuel Future 1: National Corn Growers Association and Ethanol Producer Magazine; 2: US Energy Information Administration/Oklahoma Farm Rep ort
Page 10
10 EARNED AT PEKIN CAMPUS > Safe Food/Safe Feed - a third-party product safety certification > 2 EcoVadis Bronze Medals, 35th percentile among peers COMPLETED MATERIALITY SURVEY & INITIAL ROADMAP > Strengthened environmental, health and safety policy and objectives > Improved Code of Ethics and Supplier Code of Conduct > Implemented a supplier transparency program > Partnered with SEDEX, improving sustainability and ensuring ethical sourcing COMPLETED SMETA PILLAR 4 AUDIT IN 2025 CONDUCTED ACD RESPONSIBLE DISTRIBUTION AUDIT AT EAGLE ALCOHOL COMPLETED ANNUAL THIRD-PARTY SCOPE 1 & 2 GREENHOUSE GAS VERIFICATIONS SMETA PILLAR 4 APPROVED Published Second Sustainability Report in October 2024 Sustainability Efforts
Page 11
11 Certifications Create Differentiation Deepen Relationships & Open Doors to New Customers 11 SPECIALTY ALCOHOLS & ESSENTIAL INGREDIENTS Are more challenging to produce Require audits, equipment and testing validation, and other prerequisite programs Create significant product performance impact for a small percentage of their cost
Page 12
12 Quality Customer Base HEALTH, HOME & BEAUTY FOOD & BEVERAGE INDUSTRY & AGRICULTURE ESSENTIAL INGREDIENTS RENEWABLE FUELS 12 CUSTOMERS PRIORITIZE ALTO’S CERTIFICATIONS, RELIABILITY, SERVICE & QUALITY
Page 13
13 Financial Highlights UNAUDITED, $ IN MILLIONS MAR. 31, 2025 DEC. 31, 2024 CASH & CASH EQUIVALENTS $26.8 $35.5 CURRENT ASSETS $153.5 $153.1 CURRENT LIABILITIES $53.1 $57.8 WORKING CAPITAL $100.4 $95.3 IMPROVING PERFORMANCE STRONG LIQUIDITY Q1 2025 vs Q1 2024: > $0.6M gross loss improvement to $(1.8)M from $(2.4)M > $2.7M Adj. EBITDA improvement to $(4.4)M from $(7.1)M > $12M available under operating line of credit > $65M available under term loan, subject to certain conditions 13
Page 14
14 Expanding Higher-Margin Production & Improving Profitability 14 Targeting premium markets with high-quality products Supporting the reduction in carbon emissions by pursuing CCS Optimizing asset base & executing efficiency initiatives Advancing traceability & sustainability certifications & programs Broadening customer base
Page 15
15 APPENDIX
Page 16
16 Building on a Rich Foundation 1861 Hamburg Distillery (now Alto ICP) Began producing alcohol; fire destroyed the facility in 1887, but it was soon rebuilt 1890 Distilling & Cattle Feeding Co. 1899 Illinois Sugar Refining Company (now Alto Pekin) Began producing sugar from beets 1904 Corn Products Company 1908 American Distilling Several facilities from New York to California with branded gins, whiskeys, liquors. and more 1980 Midwest Solvents 1991 Midwest Grain Products 1981 Pekin Energy Began producing fuel ethanol 1995 Williams Bio- Energy 1996 GNS system added at Pekin Wet Mill System was taken offline and later expanded and upgraded in 2021 2002 MGP Ingredients 1998 Yeast Plant Constructed and began producing yeast November 1998 2003 Aventine Renewable Energy 2003 Pacific Ethanol was founded Columbia & Magic Valley constructed and began producing fuel ethanol in 2007 & 2008 2005 MGP Ingredients Began producing fuel ethanol May 2005 2009 Illinois Corn Processing 2007 Pekin Dry Mill Constructed and began producing fuel ethanol 2015 Pekin Purchased by Pacific Ethanol 2017 ICP Purchased by Pacific Ethanol 2022 2025 Alto Carbonic LLC Acquired beverage-grade liquid carbon dioxide processor at Columbia facility Eagle Alcohol Co. Purchased by Alto Ingredients 2021 Name changed to Alto Ingredients, Inc. Kinergy Marketing LLC 2000
Page 17
17 PRIOR EXPERIENCE Brokerage Treasurer Project Finance Head Controller & Business Manager Senior Auditor Bryon McGregor President & CEO 17 years with Alto > Brigham Young University BS in Business Management Rob Olander, CPA Chief Financial Officer 18 years with Alto > Midland University BS in Business Administration Jim Sneed Chief Commercial Officer 33 years with Alto(1) > Olivet Nazarene University BS in Accounting > Kellogg School of Management, MBA Auste Graham Chief Legal Officer & Secretary 3 years with Alto > Vassar College B.A. in Latin American Studies > Vanderbilt University Law School, JD Vice President, Ethanol Marketing & Trading *(1) In aggregate, including years with Aventine, acquired by Alto in 2015. Experienced Leadership Team Todd Benton Chief Operating Officer 26 years with Alto(1) > Eastern Illinois University BS in Biology > Business Admin. at Bradley University Director Plant Manager & Senior Process Engineering Site Manager Vice President, Marketing & Logistics Vice President, Legal Americas Senior Legal Counsel
Page 18
18 Michael Kramer VP, Treasurer 18 years with Alto Patrick McKenzie VP, Business Development 13 years with Alto Ed Baker VP, Human Resources 18 years with Alto John Shriver VP, Operations 25 years with Alto(1) Stacy Swanson VP, EHS, Quality & Sustainability 11 years with Alto(1) Senior Management with Deep Bench Strength *(1) In aggregate, including years with Aventine, acquired by Alto in 2015. PRIOR EXPERIENCE
Page 19
19 Consolidated Statements of Operations Three Months Ended March 31, (in thousands) (unaudited) 2025 2024 Net sales $ 226,540 $ 240,629 Cost of goods sold 228,347 243,029 Gross loss (1,807) (2,400) Selling, general and administrative expenses (7,190) (7,932) Loss from operations (8,997) (10,332) Interest expense, net (2,729) (1,634) Other income, net 47 241 Loss before provision for income taxes (11,679) (11,725) Provision for income taxes — — Net loss $ (11,679) $ (11,725) Preferred stock dividends $ (312) $ (315) Net loss attributable to common stockholders $ (11,991) $ (12,040) Net loss per share, basic and diluted $ (0.16) $ (0.17) Weighted-average shares outstanding, basic and diluted 73,836 72,766
Page 20
20 GAAP TO NON-GAAP RECONCILIATION
Page 21
21 Use of Non-GAAP Measures Management believes that certain financial measures not in accordance with generally accepted accounting principles (“GAAP”) are useful measures of operations. The company defines Adjusted EBITDA as unaudited consolidated net income (loss) before interest expense, interest income, unrealized derivative gains and losses, acquisition-related expense, provision for income taxes, asset impairments, and depreciation and amortization expense. A table is provided at the end of this presentation that provides a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, net income (loss). Management provides this non-GAAP measure so that investors will have the same financial information that management uses, which may assist investors in properly assessing the company’s performance on a period-over-period basis. Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income (loss) or any other measure of performance under GAAP, or to cash flows from operating, investing or financing activities as an indicator of cash flows or as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of the company’s results as reported under GAAP.
Page 22
22 Adjusted EBITDA Reconciliation Three Months Ended March 31, (in thousands) (unaudited) 2025 2024 Net loss $ (11,679) $ (11,725) Adjustments: Interest expense 2,729 1,634 Interest income (84) (175) Unrealized derivatives gains (1,634) (3,190) Acquisition-related expense — 675 Depreciation and amortization expense 6,266 5,728 Total adjustments 7,277 4,672 Adjusted EBITDA $ (4,402) $ (7,053)
Page 23
23 Segment Results (1) includes depreciation and amortization expense (2) includes unrealized gain (loss) on derivatives (in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Net sales Pekin Campus production, recorded as gross: Alcohol sales $ 107,234 $ 108,350 Essential ingredient sales 44,618 46,709 Intersegment sales 297 321 Total Pekin Campus sales 152,149 155,380 Marketing and distribution: Alcohol sales, gross $ 48,997 $ 54,431 Alcohol sales, net 61 34 Intersegment sales 2,506 2,752 Total marketing and distribution sales 51,564 57,217 Western production, recorded as gross: Alcohol sales $ 16,194 $ 20,231 Essential ingredient sales 7,808 7,826 Intersegment sales 264 — Total Western production sales $ 24,266 $ 28,057 Corporate and other 1,628 3,048 Intersegment eliminations (3,067) (3,073) Net sales as reported $ 226,540 $ 240,629 Cost of goods sold: Pekin Campus production $ 155,222 $ 151,112 Marketing and distribution 47,650 53,685 Western production 25,524 36,517 Corporate and other 1,681 2,794 Intersegment eliminations (1,730) (1,079) Cost of goods sold as reported $ 228,347 $ 243,029 Gross profit (loss): Pekin Campus production $ (3,073) $ 4,268 Marketing and distribution 3,914 3,532 Western production (1,258) (8,460) Corporate and other (53) 254 Intersegment eliminations (1,337) (1,994) Gross loss as reported $ (1,807) $ (2,400)
Page 24
24 FOR MORE INFOMATION, CONTACT: info@altoingredients.com (833) 710-ALTO @altoingredients facebook.com/AltoIngredients linkedin.com/company/alto-ingredients ir.altoingredients.com