Alto Ingredients, Inc.

Good afternoon and welcome to the Aalto Ingredients second quarter 2022 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Kirsten Chapman with LHA Investor Relations. Please go ahead.

Thank you, Gary, and thank you all for joining us today for the Alto Ingredients second quarter 2022 results conference call. On the call today are Mike Kandris, CEO, and Brian McGregor, CFO. 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 15th, the details of which are included in today's press release. A webcast replay will also be available at the Alto Ingredients website. Please note that the information on this call speaks only as of today, August 8th. You are advised that the 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 the presentation constitute forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of the 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 alto ingredients before interest expense, interest income provision or benefit of income taxes, asset impairments, loss on extinguishment of debt, acquisition-related expense, fair value adjustments, and depreciation 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. On today's call, Mike Kandris will begin with some highlights and review the vision and quarterly activities. Brian McGregor will then provide detail on our Q2 financial results. Then Mike will wrap with a summary and open the call for Q&A. It is now my pleasure to introduce Mike Kandris, CEO. Mike, please go ahead.

Thank you, Kirsten, and thank you, everyone, for joining us today. Our diversification into specialty alcohols and essential ingredients continues to serve us well. As we continue to build for the future, our plan includes upgrading equipment and operating systems to increase efficiency and plant reliability, expanding our corn storage capacity, enhancing our specialty alcohol production and broadening its distribution, and reinvesting in essential ingredients. In short, these capital projects strengthen and improve our current asset base and will generate even greater profitability. Before I update you on our progress, I'll note we've reported positive net income and adjusted EBITDA for the second quarter of 2022, which included $22.7 million in cash from the USDA's Biofuel Producer Program. Brian will review this and other financial information in more detail in a moment. I'll now review our efforts related to our long-term strategic plan. During this time of macroeconomic challenges, we are managing projects within our control. In the second quarter, with our improved liquidity, we accelerated a litany of repair and maintenance projects, as well as several equipment upgrades throughout the portfolio. First, We recently purchased two new boilers for the Pekin campus. They will enhance our steam capabilities at both Pekin and ICP and increase the interconnectivity between the two facilities. With the greater capacity of these state-of-the-art boilers, we will replace three of our old units. More reliable and efficient, our new system will have lower energy usage and costs. plus the additional redundancy will increase our control of energy access across the campus. Regarding our Eagle alcohol acquisition, the brake bolt, tote, and drum sales are in line with our expectations, although currently increased freight costs have resulted in some profit compression. The integration is complete, and we have made progress against our plan to leverage Eagle's distribution to add totes and drums to Alto's offering. And through Eagle's relationships, we have expanded our customer base. We believe this will produce significant benefits for years to come. We have prioritized upgrading our specialty alcohol equipment at our peak and wet mill. Over the years, many beverage customers have raised their quality standards. And with these upgrades, our equipment will be best in class, and we will be able to meet the highest quality requirements and enable us to service additional beverage customers, further increasing the synergy of the Eagle transaction. In Idaho, we are on track with our essential ingredients expansion. This project consists of two phases, the first representing the further extraction of corn oil, and the second the separation and production of enhanced protein. Construction of the corn oil extraction phase is now complete. Based on better than expected preliminary results, we intend to accelerate the installation of the corn oil extraction technology in our other dry mills. We remain on track with the second phase to commence high protein production at Magic Valley in early 2023. And once the installation at Magic Valley is complete and operational, it will inform us how we roll the technology out to our other facilities. Also, we are expanding our corn storage at our Pekin facilities and expect to complete the project by mid-November. This will approximately double the number of days of storage at the site and meet our goal to have additional capacity in place before the holidays and winter weather. We have also made numerous additional upgrades at our facility. To name a few, we have completed the upgrade and expansion of ICP's corn oil production. We have increased corn oil storage and railcar loadout capabilities across all locations. We have made logistics improvements at ICP, which included truck access to the plant at scale upgrades. And at the wet mill, we upgraded control systems at the front end of the process and rebuilt one of the two turbines. These projects are some examples of our commitment to upgrade our facilities to improve efficiency and reliability. We are also engaged in longer-term projects. Regarding our renewable natural gas project at Pekin, we are currently in our engineering and design phase with the goal of making an impact by the end of 2023. Regarding carbon capture and sequestration, the US Senate's recent approval of the Inflation Reduction Act is very exciting and significantly improves our project economics, raising the carbon capture tax credit from $50 per metric ton to $85 per metric ton. As previously discussed, we produce approximately 700,000 metric tons of CO2 a year at our Pekin campus. These facilities sit atop the Mount Simon Formation, identified as one of the best and largest aquifers in the country for sequestration. To maximize the inherent value of our CO2, we have been actively pursuing numerous options, ranging from the development of a standalone project to the sale of the CO2 to one of the various pipelines currently under development in our area. Approval of this legislation will greatly clarify our strategy and options and will accelerate our decision and implementation of this important project. Before I turn the call over to Brian, I'd like to welcome Gabby Gray as an independent director who was recently elected to our board at our annual shareholder meeting. She is a chemical engineer with vast experience in refining and has been advising the board for the past year regarding plant operations and optimization as well as process safety management. I'd also like to thank John Prince for his service and wish him the best in his retirement from the board. With that, Brian, over to you for a review of the financials.