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- **Revenue Growth**: Q3 2025 gross profit up $17.5 million YoY, driven by fuel ethanol exports and CO2 utilization
- **Tax Credit Opportunity**: $0.10-$0.20 per gallon 45Z credits expected in 2025-2026, with forward sales in development
- **Cost Efficiency**: SG&A reduced by $1 million YoY; $22.8 million cash flow from operations
- **Strategic Investments**: $2 million contribution from Alto Carbonic; $24 million in maintenance CapEx
- **Export Expansion**: European exports growing, but limited by certification requirements
- **CO2 Utilization**: West Coast demand for liquid CO2 creating pricing upside

**【CEO Summary Section】**
- **Q3 2025 Performance**: Gross profit increased by $18 million, net income improved by $17 million, and adjusted EBITDA grew by $9 million. Key drivers included increased renewable fuel exports, strong demand for liquid CO2, and cost reductions.
- **Strategic Initiatives**: 
  - **Section 45Z Tax Credits**: Expected to earn $0.10 per gallon at Columbia in 2025, with potential to increase to $0.20 per gallon in 2026. Forward sales of tax credits are being explored for 2026-2029.
  - **CO2 Utilization**: Expansion at Pekin and Columbia, with Alto Carbonic contributing $2 million in Q3.
  - **Export Growth**: Fuel ethanol exports captured higher pricing, with forward contracts secured for Q4 2025 and H1 2026.
  - **California AB30 Impact**: Potential to add 600 million gallons/year of demand for ethanol in California, positioning Alto to benefit from E15 adoption.
- **Challenges**: Delayed carbon capture project at Pekin due to regulatory constraints, but exploring alternative CO2 utilization options.

**【CFO Financial Commentary】**
- **Net Sales**: $241 million (down $11 million YoY) due to idling of Magic Valley and rationalized activities.
- **Gross Profit**: $23.5 million (up $17.5 million YoY), driven by: 
  - $5.6 million from fuel ethanol exports
  - $3.6 million from corn oil pricing and production mix shift
  - $2 million from Alto Carbonic
- **Cost Management**: 
  - SG&A expenses reduced by $1 million YoY
  - Interest expense up $900,000 due to higher debt levels
- **Liquidity**: 
  - Cash balance of $32.5 million
  - $22.8 million cash flow from operations
  - $18.5 million debt repayment
- **CapEx**: $24 million in repairs and maintenance (vs. $32 million annual target)

**【Q&A Highlights】**
1. **45Z Tax Credit Strategy**: 
   - Evaluating low-cost options like renewable energy credits and low-carbon corn sourcing
   - Magic Valley plant's intrinsic value increased due to 45Z eligibility, but restart depends on long-term demand
2. **Export Growth**: 
   - European exports focus on high-quality products and renewable fuels
   - Limited capacity to shift all production to Europe due to certification requirements
3. **Infrastructure Projects**: 
   - New dock construction costs partially covered by insurance; expects Q4 2025 update
   - Permanent repairs to damaged dock delayed until spring 2026
4. **Magic Valley Plant**: 
   - Idling continues while evaluating highest use (CO2 capture, 45Z credits, or sale)
   - West Coast CO2 demand growth may justify restart if local pricing supports margins

Alto Ingredients, Inc. (ALTO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

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Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

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Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

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Income Tax Expense

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Net Income from Continuing Operations

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Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ALTO

ALTO fundamentals

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