Aemetis, Inc

Good afternoon and welcome to the AMETIS first quarter 2022 earnings review conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Mr. Todd Walsh, Executive Vice President and Chief Financial Officer of AMETIS Inc. Mr. Walsh, you may begin.

Thank you, Ali. Welcome to the AMETIS first quarter 2022 earnings review conference call. Joining us for the call today is Eric McAfee, founder, chairman, and CEO of AMETIS, and Andy Foster, president of AMETIS Advanced Fuels and AMETIS Biogas. We suggest visiting our website at ametis.com to review today's earnings press release, the AMETIS corporate and investor presentations, filing with the Securities and Exchange Commission, recent press releases, and previous earnings conference calls. The presentation for today's call is available for review or download on the investor section of the ametis.com website. Before we begin our discussion today, I'd like to read the following disclaimer statement. During today's call, we'll be making forward-looking statements, including, without limitation, statements with respect to our future stock performance, plans, opportunities, and expectations, with respect to financing activities and the execution of our business plan. These statements must be considered in conjunction with disclosures and cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements made on this call involve risks and uncertainties, and that future events may differ materially from the statements made. For additional information, please refer to the company's Security and Exchange Commission filings, which are posted on our website, and available from the company without charge. Our discussion on this call today will include a review of non-GAAP measures as a supplement to financial results based on GAAP. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is included in our earnings release for the quarter ended on March 31, I'm sorry, on December 31, 2021 is available on our website. Adjusted EBITDA is defined as net income loss plus to the extent deducted in calculating such an income, interest expense, income tax expense, intangible and other amortization expense, accretion, and other expense of Series A preferred units, depreciation expense, and share-based compensation expense. Now I'd like to review the financial results for the first quarter of 2022. Revenues during the first quarter of 2022 increased 22% to $52 million compared to $42.8 million for the first quarter of 2021. Our North America operations in the first quarter of 2022 as compared to the first quarter of 2021 experienced an increase in the selling price from $1.91 per gallon to $2.58 per gallon on sales of 14.7 million gallons for 2022 compared to 15.6 million gallons for 2021. The price of delivered corn rose from an average of $6.87 per bushel during the first quarter of 2021 to $8.75 per bushel during the first quarter of 2022. Railroad logistics were impactful on both the change in gallons produced and the price of delivered corn. Gross loss for the first quarter of 2022 improved to $3.1 million compared to $3.6 million loss during the first quarter of 2021. This gross loss improvement was attributable to ethanol pricing rising faster than the offsetting cost of delivered corn. Selling and general administrative expense increased to $7.3 million during the first quarter of 2022 from $5.4 million during the same period in 2021, driven principally from non-cash charges for stock compensation. Operating loss was $10.4 million for the first quarter of 2022, compared to operating loss of $9 million for the same period in 2021. Interest expense, including accretion of Series A preferred units in the Amedis Biogas LLC subsidiary, and loss on extinguishment accounting for debt decreased to $5.6 million during the first quarter of 2022 compared to $7.2 million during the first quarter of 2021. Additionally, our AMETIS biogas initiative recognized $1.6 million of accretion of preferred payments on its preferred stock during the first quarter of 2022 compared to $1.9 million during the first quarter of 2021. A charge of $681,000 was recognized on debt extinguishment accounting related to subordinated debt renewals and included in the interest expense. Net loss was $18.3 million for the first quarter of 2022 compared to net loss of $18.1 million for the first quarter of 2021. Cash at the end of the first quarter of 2022 was $5.5 million compared to $7.8 million at the close of the fourth quarter of 2021. Investments in capital projects of $11.4 million were made during the first quarter of 2021, highlighting our commitment to build ultra-low carbon projects. This completes our review of the first quarter of 2022. Now I'd like to introduce the founder, chairman, and chief executive officer of AMETIS, Eric McAfee, for a business update. Eric?

Thank you, Todd. AMETIS is focused on producing below zero carbon intensity products, including negative carbon intensity renewable natural gas and renewable fuels. Our projects maximize the value of carbon credits and tax credits while reducing operating costs by using waste materials as feedstock for the production of renewable fuels. In early 2022, we announced an updated five-year plan, which projected revenues to grow to about $1.5 billion in annual EBITDA to increase to more than $460 million by year 2026. This growth is being funded by lower interest rate senior secured lines of credit at the Amedis parent company and project funding by Amedis subsidiaries. In the past year and a half, we have repaid about $80 million to reduce higher interest rate bridge loans from Third Eye Capital, which has expanded our access to lower interest rate fundings. We recently closed two new credit facilities at 8% and 10% interest rates with Third Eye Capital, which have an aggregate availability of up to $100 million subject to certain criteria. These carbon reduction lines of credit are designed to both fund the completion of the carbon reduction projects at the Keys ethanol plant and to provide the funding prior to project financing for the jet diesel plant and the two CO2 sequestration wells. The working capital line of credit is intended to provide liquidity for ongoing operations. We're also on track with financing growth using long-term, 20-year low interest rate project financing from the United States Department of Agriculture. Our first $25 million of an expected eventual $100 million of USDA Renewable Energy for America project funding for our biogas subsidiary is scheduled to close in June. The positive regulatory trends for renewable fuels have continued to improve, including the recent approval of 15% ethanol known as E15 by the Environmental Protection Agency and the release this week of the California Air Resources Board 2022 scoping plan that significantly increases the number of credits required under the low carbon fuel standard program. These regulations are driven by initiatives to decarbonize transportation, the need to reduce the cost of fuels as petroleum prices increased, and a renewed interest in energy security. During the first quarter of 2022, AMET has achieved important milestones toward revenue growth and sustained profitability in each of our four lines of business. Now, Andy Foster, the president of Ametis Biogas and Ametis Advanced Fuel, will review highlights. Andy?