Alto Ingredients, Inc.

Ladies and gentlemen, and welcome to the Aalto Ingredients Incorporated Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press par, then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Mariah Shelton of LHA Investor Relations. Please go ahead.

Thank you, Jerome, and thank you all for joining us today for the Alto Ingredients Second Quarter 2021 Results Conference Call. On the call today are Mike Kandris, CEO, and Brian McGregor, CFO. Mike will begin with a review of business highlights. Brian will provide a summary of the financial and operating results, and then Mike will return to discuss Alto Ingredients Outlook and open the call for questions. Alto Ingredients issued a press release after the market closed today, providing details of the company's quarterly results. The company also prepared a presentation for today's call that is available on the company's website at altoingredients.com. A telephone replay of today's call will be available through August 10th. the details of which are included in today's earnings press release. A webcast replay will also be available at All 2 Ingredients' website. Please note that the information in this call speaks only as of today, August 3rd. We would advise that time-sensitive information may no longer be accurate at the time of any replay. Please refer to the company's Safe Harbor Statement on slide 2 of the presentation available online, which states that some of the comments in this presentation constitute forward-looking statements and considerations. that involve a number of risks and uncertainties. The actual future results of all two ingredients could differ materially from those statements. Factors that could cause or contribute to such differences include but are not limited to events, risks, and other factors previously and from time to time disclosed in all two ingredients filings with the SEC. Except as required by applicable law, the company assumes no obligation to update any forward-looking statements. In management's prepared remarks, non-GAAP measures will be referenced. Management uses these non-GAAP measures to monitor the financial performance of operations and believes these measures will assist investors in assessing the company's performance for the periods being reported. The company defines adjusted EBITDA as unaudited net income or loss attributed to auto ingredients before interest expense, interest income, provision or benefit for income taxes, asset impairments, loss and extinguishment of debt, purchase accounting adjustments, fair value adjustments, and depreciation and amortization expense. To support the company's review of non-GAAP information later in this call, a reconciling table was included in today's press release. It is now my pleasure to introduce Mike Kandris, CEO. Mike?

Thank you, Mariah, and thank you, everyone, for joining us this afternoon. In the second quarter, we generated our fifth consecutive quarter of gross profit, producing net income of $8.1 million and adjusted EBITDA of $17 million. For the first half of the year, revenue was $517 million, net income was over $12 million, and EVA DA was over $30 million. This represents a year-over-year improvement in EVA DA of $14 million, a further testament to the benefits of our transformation efforts to specialty alcohol and essential ingredients. As part of these efforts, we continue to improve our balance sheet. and align and invest in our infrastructure to meet today's demand, expand our product offering, and pursue new long-term accretive growth opportunities. Looking ahead, we are expanding, deepening, and strengthening our relationships with key customers as a certified leading producer of a growing variety of specialty alcohols that are used in common everyday consumer goods. including vinegars, spirits, mouthwash, cosmetics, and cleaning products. Through the integration of operations and production at our Pekin campus, along with our enhanced certifications, we can provide surety of quality, supply, and redundancy, all material differentiators among a growing supply base. These and other distinctions position us well as we contract specialty alcohol volumes for 2022 and beyond, thus improving over time the utilization of our expanded specialty alcohol production capacity. As we announced on May 17th, we sold our fuel-grade ethanol production facility in Madera, California, to Seaboard Energy, for a total consideration of $28.3 million, comprised of $19.5 million in cash and $8.8 million in assumption of liabilities. We use the cash proceeds to retire company debt, which will save approximately $700,000 per quarter in interest expense and an additional $400,000 per quarter in negative EVA-DA carrying costs for this facility. We have been working diligently on the sale of our fuel-grade ethanol facility in Stockton, California, and have interested parties that will either restart or repurpose the facility, and we will share more when appropriate. Our capital improvement projects this year are on track and expected to expand revenue and increase efficiencies and plant reliability. Our yeast expansion and pecan facility upgrade projects alone are scheduled for completion in Q3 and will be fully operational before year-end. We expect the projects to contribute approximately $5 million annually in EVA-DA, representing a full payback in less than two years. Additionally, we are expanding our annual corn oil production capacity at our peak and site by approximately 4,000 tons, which will contribute an estimated $4.5 million in EBITDA annually beginning in 2020. In preparation for these improvements and taking advantage of what we expect will be choppy market conditions in Q3, resulting from low pre-harvest corn inventories and tight fuel ethanol margins, We have scheduled in mid-August a repair and maintenance shutdown at our peak and wet mill. We expect the impact to be limited to the third quarter in terms of reduced revenues and increased repair and maintenance expenses. This, however, will not impact our ability to meet our contractual supply obligations for specialty alcohol or essential ingredients, but will instead improve our efficiency and reliability and better align our production with customer demand. Finally, looking to the future, there are opportunities for us to enhance our protein production at our dry mills that will grow and diversify our revenue sources and bolster our quality and quantity of earnings. We continue to make good progress and look forward to sharing sharing more information soon. We also remain actively engaged in discussions with various parties to develop a carbon capture program at our PECAN site. We look forward to sharing more information over the next few quarters regarding this profitable opportunity. With that, I'd now like to turn the call over to Brian for a discussion of the financials. Brian?