Alto Ingredients, Inc.

Good day, and welcome to the Alto Ingredients, Inc. First Quarter 2024 Financial Results Conference Call. All participants are 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. You may press the star key, 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 send the conference over to Kirsten Chapman of LHS Investors. Please go ahead.

Thank you, Kaylee, and thank you all for joining us today for the Alto Ingredients First Quarter 2024 Results Conference Call. On the call today are President and CEO Brian McGregor and CFO Rob Olander. Alto Ingredients issued a press release after market closed today, providing details of the company's financial results. The company has 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 made available through May 13th, the details of which are included in today's press release. A webcast replay will also be available at Alto Ingredients' website. Please note that the information on this call speaks... only as of today, May 6. You are advised that any 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 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 from time to time disclosed in alto ingredients filings for 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 reported. The company defines adjusted EBITDA as unaudited consolidated net income or loss before interest expense, interest income, provision for income taxes, asset impairments, loss and extinguishment of debt, unrealized derivatives, gains and losses, acquisitions-related expense and depreciation and amortization expense. To support the company's review of non-GAAP financial information, a reconciling table was included in today's press release. On today's call, Brian will provide a review of our strategic plan and activities. Rob will comment on our financial results. Then Brian will wrap up and open the call for questions. It's now my pleasure to introduce Brian McGregor. Please go ahead, sir.

Thank you, Kirsten. Thank you, everyone, for joining us today. We began 2024 with a refined vision to produce a variety of essential ingredients and the highest grade beverage alcohol in the industry and prioritize our carbon capture and storage, or CCS, initiative. We are leveraging the unique capabilities of our peak in campus and our other assets to moderate the impact of crush margin fluctuations. I'm encouraged by the strategic and operational progress we've made so far this year. However, relatively low but improving crush margins and various weather factors impacted our financial results in the first quarter. That said, high-quality alcohol sales from our Pekin campus increased year over year, contributing toward an overall improved gross profit and adjusted EBITDA on a comparative basis. Rob will discuss our financial results in greater detail. I'll begin by reviewing CCS and our ongoing strategic projects. With CCS, our goal is to create value for Alto, our customers, our surrounding communities, and our shareholders by substantially reducing our carbon footprint. Our peak and campus facilities, their CO2 production, and their location provide Alto a unique CCS opportunity. We continue to negotiate the terms of our proposed agreements with potential financial partners and with Vault, a leading CCS developer focused on the development, capitalization, and operation of carbon storage assets. Our plan is to work with Vol to safely transport the CO2 to a geological reservoir nearby and permanently stored securely deep underground. As noted in March, together with Vol, we are driving ahead with our respective activities for system design, community outreach, vendor negotiations, and schedule alignment requirements to procure equipment for compression and to support the installation of additional power. Vault completed the 2D seismic geologic survey and has begun data analysis. They have also advanced the work required to submit the EPA Class 6 permit application. Our CCS project provides compelling economics that we believe we can enhance with more efficient, lower-cost energy production. To this end, we are evaluating multiple capital options. We are in discussions with the highly regarded independent energy companies. This potential partner has been engaged to complete their feed study for an energy cogeneration facility that they would build, own, operate, and maintain on our site. This facility would lower Alto's capital expenditures, improve operating efficiencies, and reduce our forecasted long-term energy costs. We are also continuing conversations with our current utility provider to expand energy supply capabilities as an alternative to cogeneration. Our specialty alcohol products include highly differentiated 192 proof and low moisture 200 proof grain neutral spirits that create customer opportunities higher up the value chain. In Q1 2024, we sold 26 million gallons of specialty alcohol, up from 21 million gallons in Q1 2023. As mentioned in March, for 2024, we contracted approximately 93 million gallons at fixed price specialty alcohol at an average premium to renewal fuel of $0.31 per gallon. Our biennial peak and campus wet mill outage was completed in April. The plant was offline for 10 days while we executed the scope of work with over 450 discrete tasks focused on corrective and preventative maintenance, as well as upgrades to plant infrastructure. With the outage complete, the plant has safely returned to operation and is ramping up to target production rates. These efforts will result in more consistent and higher production rates, improving reliability as we approach the summer driving season. At Magic Valley, we have been diligently working on our corn oil and high protein technology to return the facility to a more sustainable profitability by reducing the impact of periodic low crush margins and higher destination corn bases. As outlined in March, we are working with our high-protein system vendor, Harvest Technology, to achieve the intended production rate, quality, and consistency of our corn oil and high-protein output at the facility. While the plant is hot idled, we are using the downtime to accelerate routine maintenance activities to optimize plant efficiency upon restart. Equipment for the new system modifications has been ordered. And based on current delivery and installation schedules, we expect to resume production in late June or early July. As a reminder, harvest technology is paying for the direct cost of equipment and design changes associated with the corn oil and high-protein systems. As noted previously, as always, we evaluate our path to increase margins, improve profitability, and deliver the highest return to our shareholders. We continue to assess our current portfolio of assets. We will provide updates if and when appropriate. Before I turn the call over to Rob, I have a few corporate updates to review. As part of our sustainability efforts, we finished our annual Scope 1 and 2 greenhouse gas verifications during the quarter. In April, as part of our succession planning, we announced our new COO, Todd Benton. I'd like to congratulate Todd on his promotion and Mike Kandris on his forthcoming retirement. Todd has over 25 years experience at the Pekin facility and 30 years in the industry. With his good relations with the workforce, deep connection with the community, and extensive record of achievement for operational excellence, the board and I look forward to his contributions to our ongoing safety, operational efficiency, reliability, and sustainability efforts. Now I'll turn the call over to our CFO, Rob Olander.