Alto Ingredients, Inc.

Good day and welcome to the Alto Ingredients first quarter 2025 financial 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'd now like to turn the conference over to Kirsten Chapman, Alliance Advisors, Investor Relations. Please go ahead.

Thank you, Darcy, and thank you all for joining us today for the Alto Ingredients First Quarter 2025 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 for the first quarter 2025. 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 May 14th, the details of which are included in today's press release. A webcast replay will also be available on Alto Ingredients' website. Please note that the information on this call speaks only as of today, May 7th. 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 two 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 uncertainty. 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 to 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 consolidated net income or loss before interest expense interest income, provision for income taxes, asset impairments, unrealized derivative gains and losses, acquisition-related expense, and depreciation and amortization expense. To support the company's review of non-GAAP 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 Q&A. It's now my pleasure to introduce Brian McGregor. Please go ahead, sir.

Thank you, Kirsten, and thank you all for joining us today. During Q1 2025, gross margin and adjusted EBITDA improved compared to Q1 2024. This reflects our operational uptime and our carbon optimization initiative driven by our acquisition on January 1st of a beverage-grade liquid carbon dioxide processing plant adjacent to our Columbia facility. The combined ownership of both assets has reduced management and staffing costs while enhancing operational coordination and overall productivity. We continue our optimization efforts, which should facilitate longer-term feed sales, commitments, and expand premium liquid CO2 sales. As expected, this acquisition improved the Columbia facility's economics and increased its asset valuation. Also, we right-sized staffing to align with our current footprint. During Q4 and Q1, we reduced headcount by a total of 16%. As a result, we expect to save approximately $8 million annually, with the financial benefits starting in Q2. Although we have completed our planned record, reorganization, we will continue to evaluate opportunities to reduce expenses. We are prioritizing quick return projects, including water and energy optimization, that would reduce utility costs and lower our carbon footprint. Results of operations at our Pekin campus help to illustrate Pekin's flexibility to shift production quickly to capitalize on market trends. For example, to diversify our revenue streams, we earned our ISCC certification in late last summer and began exporting qualified renewable fuel to the European markets beginning in the fourth quarter. This certification has enabled us to access higher margin sales. During the first quarter, we experienced solid demand for ISEC certified renewable fuel priced at a premium to domestic fuel grade ethanol. We grew ISEC sales as a percentage of our total renewable fuel volume sold at our Pekin campus in Q1. As a result, ISCC sales partially offset some domestic market challenges. Premiums on domestic high-quality alcohol were generally lower in Q1 than in the same quarter last year, reflecting increased competition in the market. Also, prices for essential ingredients declined because of the rise in soybean oil supply to support renewable diesel demand. In late March and early April, we completed our scheduled seasonal outages at the Aiken facilities. The repairs and maintenance successfully achieved our goal of sustaining the improved plant utilization rate set a year ago. Also in early April, during a period of rapidly rising river levels, our peak and loadout dock was damaged, negatively impacting production, logistics, and campus economics. We implemented temporary solutions, and we are now back to full operations. We are currently assessing our long-term remediation options and working with our insurance carrier to mitigate the financial impact. We'll provide further updates on our next call. Now I'll review market and regulatory trends. So far in 2025, we've experienced typical seasonal market patterns with spreads between corn and ethanol prices comparable year over year. These crush margins improve sequentially each month over the first quarter. We've seen spread improvements in April resulting from lower production rates associated with industry-wide scheduled spring plant outages. Nonetheless, margin expansion has been kept largely in check by high inventory levels with production outpacing demand. Without a meaningful reduction in ethanol supply, substantial crush spread improvements may be constrained. And although we are optimistic that margins will continue to improve with increases in demand from the summer driving season, concerns over tariffs and Chinese vessel restrictions have introduced greater export uncertainty. While these macro events are largely beyond our control, we will continue to minimize the impact as effectively as possible. On a positive note, as I mentioned earlier, we've seen solid exports today. In addition, we applaud the EPA's recent E15 fuel waiver allowing blending. through May 20th. While this is temporary, it is expected that the agency will issue new waivers, effectively extending the allowance through the summer. Further, we're optimistic that pending national legislation will be passed later this year, resulting in long sought after permanent adoption nationwide. There's also growing support for E15 adoption in California. The California Assembly recently passed a bill aimed at accelerating the approval process for E15 fuel blends. Governor Newsom has also directed the California Air Resources Board to expedite its review, citing potential benefits such as lower gas prices and reduced emissions. According to the latest EIA reports, California's 13.4 billion gallons of annual fuel consumption represents 11.6% of the national volume. A 5 percentage point increase from 10% to 15% in ethanol blend in California alone would result in an additional 670 million gallons sold annually. Further, it is estimated that the national adoption of year-round E15 blending could boost ethanol demand by 5 to 7 billion gallons. In short, since the U.S. has approximately 18 billion gallons of ethanol production capacity and domestic demand of approximately 14.4 billion gallons currently, the national adoption of year-round E15 combined with strong exports would utilize over time much of the excess capacity and produce greater margin stability. Beyond the demand side, we believe E15 adoption would also have positive economic and environmental impacts, reducing greenhouse gas emissions, supporting farmers, and lowering consumer fuel costs. Turning to our Pekin campus, Illinois Bill SB 1723 is under consideration to prevent CO2 sequestration activity that overlies, underlies, or passes through a sole source aquifer. This would include the Mohamed Aquifer, which underlies multiple counties throughout the state, including an area currently contemplated for storage in our Class 6 permit application. Together with VAULT and other potentially affected parties, we are working with elected officials to address concerns to minimize or eliminate the potential legal impact of this legislation on our CCS initiative. We are also developing options to ensure that we are optimizing the value of our CO2 production, no matter the outcome of this legislation, including relocating the proposed storage location of our CO2 Further, we're working with Illinois state leaders on SB41, the Clean Transportation Standard Act, to develop clean ground transportation standards to reduce the lifecycle carbon intensity of fuels, like the standards adopted on the West Coast. With that, I'll turn the call over to Rob for our financial review.