Alto Ingredients Inc (ALTO)

[swallabyinvestor]

Based on Peix own 8-k's here are the numbers for the last 4 quarters:

~~~~~~~~~~~~~~~~~~~~~~~4q13~~~1q14~~~2q14~~~3q14
Gallons~~~~~~~~~~~~~~~~40.500 39.800 46.500 46.800
average sales price~~~~~2.360 2.700 2.780 2.320
Avg CBOT price~~~~~~~~~~1.860 2.200 2.250 2.020
corn basis~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1.270
corn~~~~~~~~~~~~~~~~~~~~5.700 5.760 5.970 5.150
co-products~~~~~~~~~~~~~0.352 0.346 0.395 0.308
Production ratio~~~~~~~~0.541 0.855 0.990 0.547
Operating gross~~~~~~~~21.905 34.014 46.037 25.610
Gross Profits~~~~~~~~~~21.600 38.550 33.580 17.990
GP to OG ratio~~~~~~~~~ 0.986 1.133 0.729 0.702
Xtra Cost per gallon?~~~0.008 -0.114 0.268 0.163
Kinergy profit ?~~~~~~~-0.305 4.536 -12.457 -7.620

So, here is the mystery. I am assuming 2.8 gas/bushel and 50 c operating costs per gal. Why do the gross profits differ so much from the calculated operating gross profits generated by produced ethanol? Either their costs per gallon produced vary significantly (water and NG costs might vary some), or Kinergy is very hot and cold depending on the quarter. I think Rule_62 suggested that it might be related to the delay in purchase versus selling and this does seem to corroborate that suggestion. Q413 was fairly flat margins, 1Q14 had a positive slope, 2Q14 had a very negative slope and 3Q14 also had a negative slope. It is just disppointing that they could be losing this much through Kinergy.