0001213900-26-027687
SEC filingAlto Ingredients reported FY 2025 net sales of $917.9M, a 4.9% decrease from $965.3M in FY 2024. Despite lower sales volume due to the cold-idling of the Magic Valley facility, the company achieved a significant turnaround in profitability. Gross profit increased 259.1% to $34.9M (3.8% margin) from $9.7M (1.0% margin), driven by stronger commodity crush margins, cost savings, and the acquisition of Kodiak Carbonic. Consolidated net income was $13.3M, a $72.3M improvement from a net loss of $59.0M in the prior year. Key drivers included $7.5M in Section 45Z transferable tax credits, $6.7M in excess insurance proceeds, and improved operational performance. The company generated $13.2M in operating cash flow, ending the year with $25.7M in cash and cash equivalents and restricted cash.
Alto Ingredients reported FY 2025 net sales of $917.9 million, a decrease of $47.3 million (4.9%) from $965.3 million in FY 2024. The decline was primarily due to a 9% decrease in total gallons of alcohol sold (350.1M vs 386.0M) and a 14% decrease in tons of essential ingredients sold (1.2M vs 1.4M), largely resulting from the cold-idling of the Magic Valley facility for all of 2025. Despite lower volumes, the company achieved a remarkable turnaround in profitability. Gross profit increased 259.1% to $34.9 million (3.8% margin) from $9.7 million (1.0% margin). Consolidated net income was $13.3 million, a $72.3 million improvement from a net loss of $59.0 million in FY 2024. Income attributable to common stockholders was $12.1 million compared to a loss of $60.3 million in the prior year.
Revenue declined across most segments except Marketing and Distribution. Pekin Campus Production segment revenue was essentially flat at $590.4 million, with alcohol sales of $415.8 million and essential ingredients sales of $174.6 million. Marketing and Distribution segment revenue increased 2.2% to $221.3 million from third-party renewable fuel sales. Western Production segment revenue declined 42.3% to $98.9 million, with alcohol sales of $67.3 million and essential ingredients sales of $31.6 million, primarily due to the Magic Valley facility idling. Corporate and Other segment (Eagle Alcohol) revenue declined 35.1% to $7.4 million. The company's average alcohol sales price increased 4% to $2.02 per gallon from $1.95 per gallon, driven by higher renewable fuel prices.
The significant improvement in gross margin to 3.8% from 1.0% was driven by stronger commodity crush margins from higher ethanol sales prices and lower corn costs, along with the acquisition of Kodiak Carbonic and the cold-idling of the unprofitable Magic Valley facility. Operating income was $7.4 million compared to an operating loss of $51.7 million in FY 2024. Key non-operating items contributing to the net income improvement included $7.5 million in transferable tax credits (Section 45Z), $6.7 million in excess insurance proceeds, and $1.9 million in other income. Selling, general and administrative expenses decreased $2.5 million to $27.2 million due to lower operating costs and reduced staff levels.
The company generated $13.2 million in operating cash flow, a $16.7 million improvement from negative $3.5 million in FY 2024. Investing activities used $7.4 million, including $4.6 million for property and equipment additions, $7.3 million for the Kodiak Carbonic acquisition, and $2.2 million for the final Eagle Alcohol payment, partially offset by $6.7 million in excess insurance proceeds. Financing activities used $16.4 million, including $10.1 million to pay down Kinergy's line of credit, $5.0 million for term debt principal payment, and $1.3 million for preferred stock dividends. Total cash, cash equivalents and restricted cash decreased $10.5 million to $25.7 million. Total assets were $388.8 million with $245.2 million in stockholders' equity. Total liabilities were $143.5 million, including $63.0 million in long-term debt.
Management highlighted strategic realignment and cost discipline as key factors in the improved performance. For 2026, the company plans capital expenditures of approximately $25 million, with 45% for maintenance and 55% for optimization projects including increasing production capacity at the Pekin dry mill. The company expects to qualify approximately 90 million gallons annually for Section 45Z tax credits at its Columbia and Pekin dry mill facilities, with anticipated 2026 net proceeds of approximately $15 million. Management continues to evaluate options for the Magic Valley facility, including potential restart to capture Section 45Z credits. The company entered 2026 with a leaner cost structure and plans to focus on factors within its control to drive improved profitability. Key risks include commodity price volatility, regulatory changes, and the ability to qualify for and receive Section 45Z tax credits.