Alto Ingredients, Inc.

Good day, and thank you for standing by, and welcome to Alto Ingredients, Inc., third quarter 2021 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would not like to hand the conference over to your host today, Mariah Chilton. Please go ahead.

Thank you, Justin, and thank you all for joining us today for the Alto Ingredients Third 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 November 16th, the details of which are included in today's earnings press release. A webcast replay will also be available at Alto Ingredients' website. Please note that the information in this call speaks only as of today, November 9th. 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 two 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 Alto 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 Alto 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, 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 today. In the third quarter, we made progress advancing our strategic initiatives by expanding our essential ingredients business, investing in improvements to our infrastructure, and subsequent to the quarter end, completing the realignment of our operations. In September, we launched our first dry mill enhanced protein project with the installation of harvesting technologies patented CoProMax system at our Magic Valley, Idaho facility. We decided to install the technology at this plant because of its advantaged and proximate location to serve the growing demand for high protein feed in nearby cattle, poultry, pork, and aquaculture markets. Adding high protein production will enhance the profitability and sustainability of this operation. We plan to restart production by year end and to commission the new protein system in the first half of 2022. Upon completion, the system will produce over 33,000 tons of feed annually with a protein content greater than 50%. It will also provide the added benefit of increasing corn oil yields by 50% or almost 9 million pounds annually. We expect the combination of additional corn oil sales and the sale of high-value proteins at premium prices to generate over $9 million annually in EVA-DA based on current market prices. After the successful completion of the installation at Magic Valley, we expect to roll out the system at our other three dry mills. Conservatively, assuming similar economics of the technology across all four mills, we expect $40 million in additional EBITDA on an annual basis. This is one example of how we are enhancing protein production at our dry mills to grow and diversify our revenue sources and bolster the quality and quantity of our earnings. We completed our yeast expansion project in the third quarter, and the additional yeast production is now fully contracted through 2022. Further, we will complete our feed dryer upgrades and achieve full operation before year-end. Starting in 2022, we expect both projects will contribute approximately $5 million annually in EBITDA. We also finished the expansion of our annual corn oil production capacity at our pecan site by approximately 4,000 tons, contributing an additional estimated $4.5 million in EBITDA annually starting in 2022. As discussed in our second quarter earnings call and anticipating challenging market conditions in the third quarter, we scheduled a major repair and maintenance shutdown and infrastructure upgrade at our Pekin wet mill. While the facility was idled, we upgraded electrical infrastructure, improved redundancy and plant cooling supply, and replaced condensers and various pumps. In doing so, we significantly improved the efficiency and reliability of our production capabilities to further support customer demand long-term and extend our planned outage schedule to now be at 24-month intervals. While the decision to schedule the shutdown in Q3 proved correct, the shutdown combined with volatile market conditions negatively impacted revenues and increased operating expenses, resulting in a net loss for the quarter. Still, we generated approximately $3 million in positive EPA DA for the quarter. And I'm pleased to further report that the wet mill returned to profitable operations in September. This places us in an improved position to operate more reliably and efficiently, which is integral to meeting the needs of our specialty alcohol and essential ingredient customers. We continue to work with existing and new customers to be their certified producer of a growing variety of specialty alcohols that are used in common everyday consumer goods. including vinegars, spirits, mouthwash, cosmetics, and cleaning supplies, to name a few. To proactively address our growing customer needs, we've been extending the certifications we obtained at the end of 2020 from our ICP distillery to our Pekin wet mill. We expect to complete this effort by the end of the year, and by doing so, provide unique redundancy across the entire Pekin campus and further surety of quality supply to our customers. With regards to specialty alcohol sales in 2022, due to volatile commodity price activity, customers have taken a more measured approach to contracting annual volumes in comparison to prior years, which are normally completed by now. As a result, we expect negotiations to extend through the remainder of Q4. So while we cannot provide details at this time, we fully expect to contract for more gallons in 2022 than in 2021. Turning to our balance sheet, as announced on November 8th, we completed the sale of our fuel-grade ethanol production facility in Stockton, California to Pelican Acquisition LLC for $24 million in cash, while retaining the economic benefits of servicing regional customer needs using the plant's terminal capabilities and longer-term as the exclusive marketer of gallons produced when the facility resumes operations. This sale removes $600,000 per quarter in negative EVA-DA carrying costs, adding to the $400,000 per quarter from our Madeira facility sold in the second quarter. As previously noted, this sale completes the re-enlinement of our fuel-grade ethanol production we began over 21 months ago. The proceeds from our asset sales were integral to our strategy and contributed to the retirement of approximately $150 million in term debt over the same period, thus achieving our stated goal to prepay this expensive, and restrictive term debt by year-end 2021. In doing so, we not only eliminated over $16 million in annual interest expense, but also, as importantly, we removed structural and financial impediments that contributed to our past financial challenges. Today, we will be reinvesting in sustainable and profitable business segments, strengthening core operations, and further diversifying our product offerings in specialty alcohols and essential ingredients. We remain actively engaged with discussions with various parties to develop a carbon capture and sequestration program at our Pekin campus. We look forward to sharing our plans in the coming months as we review, and this is really important, all of our options. This is even more important considering the recent enhancements made to the 45Q tax credits for carbon capture and sequestration in the federal infrastructure bill. In addition to improvements we made to our yeast production, we are pursuing opportunities that expand our yeast product offerings to include higher quality, more versatile products marketable to the food industry. Finally, we are actively pursuing opportunities to extend our specialty alcohol business through a pre-deep vertical integration. We look forward to providing additional information as appropriate. I'd now like to turn the call over to Brian for a discussion of our financials. Brian?