Alto Ingredients, Inc.

Good day and welcome to the Aalto Ingredients Second 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 would now like to turn the conference over to Kirsten Chapman with Alliance Advisors Investor Relations. Please go ahead.

Thank you, Ashya, and thank you all for joining us for the Alto Ingredients second 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 the market closed today providing details of the company's financials for the second quarter of 2025. The company also has 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 13th, the details of which are included in today's press release. A webcast replay will also be available on Alto Ingredients' website. Please note the information on this call speaks only as of today, August 6, 2025, and you are advised that time-sensitive information may be no longer available 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 can 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 and from time to time disclosed and 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 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. 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 strategic our strategic plan and activities, and 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 CEO Brian McGregor. Please go ahead, sir.

Thank you, Kirsten. Thank you all for joining us today. The main takeaway for Q2 is that our adjusted EBITDA improved by nearly $6 million compared to last year, reflecting the successful execution of our initiatives to increase productivity. For some time, we have been focusing on short-term projects with more immediate returns, and we see the roots taking hold in delivering success. This approach will support our path to incremental profitability and an improved future. Projects under evaluation will be prioritized by anticipated cost, timing, and ROI impact. Under consideration are projects to lower our carbon intensity and capture more of the benefits of the 45 regulations increase our CO2 utilization at our Pekin campus and at Columbia, building on our successful carbonic acquisition, and improve our prospects to monetize our Western assets. Further, we will continue to pursue opportunities to improve efficiency and productivity, like we did in Q1 and Q2. As a brief update to our carbon capture and storage project for our Pekin campus, on August 1st, the Governor of Illinois signed Senate Bill 1723, that prohibits CO2 sequestration directly through the Muhammad Aquifer, as contemplated in our EPA Class VI permit. As a result, we are developing alternatives with Walt, as well as evaluating other promising non-sequestration options to optimize the value of our CO2 production. The bottom line is, while we lay the groundwork for longer-term, capital-intensive projects, we are focusing on executable strategies within our control with short-term paybacks and potential long-term benefits. Our adjusted EBITDA for Q2 compared to last year's quarter reflects the benefits of multiple initiatives. We generated positive gross profit at our Western assets, resulting from the combination of our liquid CO2 facility acquisition, improvements at our Columbia ethanol plant, and our decision to cold idle Magic Valley due to adverse market factors. Our marketing and distribution segment also improved, reflecting the integration of our bulk volume customers from our Eagle alcohol business, fostering third-party ethanol marketing relationships that met profitability criteria, and transitioning away from businesses that had limited returns. We note that our peak in campus was negatively impacted by quarter-over-quarter changes in derivatives and the impact of the damage sustained to our loadout dock in April. We partially offset these effects by leveraging our operational flexibility at the beacon campus by increasing sales of higher margin ISCC products exported to Europe. I'll cover more on the dock in a moment. Company-wide, we improved our operational model by right-sizing our corporate overhead to a level that aligns with our current company footprint. Based on our Q2 results, we are on track to exceed our goal of saving approximately $8 million annually. We continue to evaluate options to improve operational efficiency and throughput, focus on growth in profitable market segments, and identify additional cost-saving opportunities that, while smaller in amount, should, in the aggregate, make a real difference to smaller rents. Turning back to the Deakin campus, in early April, our loadout dock sustained damage due to rapidly rising river levels, impacting production, logistics, and campus economics for most of Q2. Since our last call, we've made progress recovering from this setback in a few ways. First, we were able to respond quickly to take interim steps with third-party river transload vendors to minimize business interruption. Also, we worked with our insurance carrier to confirm coverage for both the property damage and business interruption. Finally, we're reviewing repair plans with our carrier to ensure the best path forward. We intend to commence the project ahead of mid-west winter and expect work to extend into next year. On markets and regulatory trends, the big beautiful bill enacted in July made several positive updates too, including the 45Z credit extensions through the end of 2029 and spending on farm programs that are beneficial for the industry. The bill also increased focus on domestic renewable fuel production and introduced new eligibility restrictions, particularly around foreign involvement. For example, only fuel derived from feedstocks grown or produced in North America is eligible for the credit. We are pursuing options to capitalize on 45Z. Based on our current carbon intensity scores, Columbia will qualify for $0.10 per gallon for 2025 and up to $0.20 for 2026, while our peak and dry mill will qualify for $0.10 per gallon starting in 2026. This equates to roughly $4 million in 2025 and $8 million in 2026 for Columbia and $6 million for the dry mill in 2026, based on production capacities. Further, we expect to make improvements to our plans to increase the anticipated credits moving forward across all eligible facilities. While low-carbon corn may contribute favorably towards further reduction and reducing our carbon footprint, we are evaluating whether it's economically beneficial to source that particular feedstock to reduce our carbon footprint. The other two operating plants at Beacon will continue to produce higher quality products, as well as take advantage of the export market premiums for fuel, as the new rule incentivizes domestic ethanol plants from 45Z eligible dry mills. The bill also positively impacts farm programs by boosting sector profitability, reducing financial volatility, enhancing asset values, and strengthening the overall safety net with the intent to improve operational stability and long-term farm enterprise value. Also contained within the bill is the increase in USDA commodity reference prices and base acres. Corn will increase by $3.70 per bushel to $4.10 per bushel, and soybeans from $8.40 per bushel to $10 per bushel, and the addition of up to 30 million base acres that can enroll in farm programs. As a result, farmers will need new and expanded markets to absorb the additional production. We believe this will bode well for the future of the higher ethanol blends and new uses of American-grown feedstocks, making the U.S. an even more attractive origin for source ethanol and other renewal fuel products internationally. Turning to crush margins, the annual uptick in demand from the summer driving season helped lift ethanol prices and improve crush spreads. While it's difficult to predict market fluctuations, we've seen additional spread improvement in Q3. We remain optimistic for positive margins for the remainder of the summer. Regarding E15 blending waivers, the EPA extended the waivers nationally through the summer, offering continued support for near-term domestic ethanol blending. In California, there was further progress, and regulatory momentum continues to build for E15 blending. Full-scale implementation is still pending further administrative review and regulatory updates. On the sustainability front, we finalized our Scope 1 and 2 greenhouse gas verifications during the quarter, and we have submitted our 2025 ECOWAS scorecard. On the corporate front, in June, we held our annual meeting of stockholders, electing two new board members, Jeremy Bezdik and Alan Tank. We look forward to their fresh perspectives and contributions. I'd also like to congratulate Gil Nathan on being named Chairman of the Board and Diane Nuri as Vice Chair. With that, I'll turn the time over to Rob for our financial review.