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AEMETIS, INC 10-K Analysis & Summary – 3/14/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

Aemetis, Inc

Filing date:

03/14/2025

TLDR:

ELI5:

Aemetis, a company that makes renewable fuels, sold a lot more fuel this year, bringing in more money. But they still lost money overall and have a lot of debt, making it hard to pay their bills.

Accession #:

0001437749-25-007768

Published on

Analyst Summary

  • Aemetis experienced a 43% increase in revenue, driven by growth in California Ethanol, California Dairy Renewable Natural Gas, and India Biodiesel segments.
  • Despite revenue growth, the company reported a net loss of $87.5 million and a negative gross profit margin of -0.22%, indicating ongoing profitability challenges.
  • The company’s liquidity position remains weak, with a current ratio of 0.31 and limited cash reserves of $0.9 million.
  • Total debt increased to $338.1 million, requiring waivers and amendments from its senior lender.
  • Cash flow from operations was negative at $(32.9) million, increasing reliance on external financing.
  • Management expresses optimism about future growth, contingent on successful execution of expansion plans and favorable market conditions.
  • The company identified material weaknesses in internal control over financial reporting, which could lead to material misstatements in financial statements.
  • Gross Profit Margin decreased by -120.37% from 1.08% in 2023 to -0.22% in 2024, indicating significant cost management issues.
  • Operating Profit Margin increased by 24.61% from -20.03% in 2023 to -15.10% in 2024, but remains negative.
  • Net Profit Margin decreased by -31.58% from -24.86% in 2023 to -32.71% in 2024, indicating significant challenges in achieving profitability.
  • Return on Assets (ROA) decreased by -77.03% from -19.07% in 2023 to -33.76% in 2024, indicating inefficient asset utilization in generating profits.
  • Current Ratio decreased by -27.91% from 0.43 in 2023 to 0.31 in 2024, indicating potential liquidity issues.
  • Quick Ratio decreased by -38.10% from 0.21 in 2023 to 0.13 in 2024, indicating a limited ability to meet short-term obligations without relying on inventory sales.
  • Cash Ratio decreased by -81.25% from 0.032 in 2023 to 0.006 in 2024, indicating a very limited ability to cover short-term liabilities with available cash.
  • Debt-to-Assets Ratio increased by 7.44% from 1.21 in 2023 to 1.30 in 2024, indicating that the company’s assets are heavily financed by debt, increasing financial risk.
  • Interest Coverage Ratio increased by 160.00% from 0.05 in 2023 to 0.13 in 2024, but remains very low, indicating difficulty in covering interest expenses with operating income.
  • Inventory Turnover decreased by -38.98% from 20.14 in 2023 to 12.29 in 2024.
  • Days Sales Outstanding (DSO) decreased by -69.91% from 8.44 in 2023 to 2.54 in 2024, indicating very quick collection of receivables.
  • Days Payable Outstanding (DPO) increased by 42.46% from 31.75 in 2023 to 45.23 in 2024, indicating a reasonable time to pay suppliers.
  • Asset Turnover increased by 33.77% from 0.77 in 2023 to 1.03 in 2024, indicating efficient use of assets to generate revenue.
  • Revenue Growth was 43.34%.
  • Net Income Growth was -88.58%, indicating a worsening financial situation.
  • EPS Growth was -56.56%, indicating a worsening financial situation.
  • California Ethanol Gallons Sold increased by 88.79%.
  • California Dairy Renewable Natural Gas (RNG) RINs Sold increased by 116.31%.
  • India Biodiesel Metric Tons Sold increased by 22.64%.

Opportunities and Risks

  • Expansion into Renewable Natural Gas: The California Dairy Renewable Natural Gas segment is experiencing rapid growth and offers a promising source of revenue and cash flow.
  • Sustainable Aviation Fuel and Renewable Diesel: The SAF/RD production plant has the potential to generate significant revenue and benefit from government incentives.
  • Carbon Capture and Underground Sequestration: The CCUS facilities could generate valuable LCFS credits and federal tax credits.
  • Technological Advancements: The company’s investments in energy efficiency and alternative feedstocks could improve margins and lower carbon intensity.
  • Government Support: Favorable government policies and regulations, such as the RFS and LCFS, could drive demand for renewable fuels.
  • Liquidity and Going Concern: The company’s ability to continue as a going concern is dependent on securing additional financing and generating positive cash flow from operations.
  • Debt Obligations: The high level of indebtedness and the need for continued waivers from its senior lender pose a significant risk.
  • Commodity Price Volatility: Fluctuations in the prices of corn, ethanol, biodiesel, and other commodities could adversely affect profitability.
  • Regulatory Changes: Changes in government policies and regulations related to renewable fuels could impact the company’s revenue and profitability.
  • Project Execution: The success of the SAF/RD production plant and CCUS facilities is subject to numerous development and construction risks.
  • Material Weaknesses in Internal Control: The identified material weaknesses in internal control over financial reporting could lead to material misstatements in the financial statements.

Potential Implications

Company Performance

  • Continued losses and negative cash flow could hinder the company’s ability to invest in growth opportunities and maintain operations.
  • Failure to manage debt obligations could lead to default and potential bankruptcy.
  • Successful execution of expansion plans and technological advancements could improve profitability and financial stability.
  • Remediation of material weaknesses in internal control is crucial for maintaining investor confidence and ensuring accurate financial reporting.

Stock Price

  • Negative financial performance and high debt levels could negatively impact the company’s stock price.
  • Positive developments in expansion projects and improved profitability could lead to an increase in stock price.
  • Regulatory changes and government support for renewable fuels could also influence investor sentiment and stock price.

Aemetis, Inc. (AMTX) 2024 10-K SEC Filing Report

Executive Summary

This report analyzes Aemetis, Inc.’s 2024 10-K filing. The company is experiencing revenue growth, but profitability remains a significant concern. The company’s reliance on debt financing and the need for continued waivers from its senior lender present substantial risks. While the expansion into renewable natural gas and sustainable aviation fuel offers potential opportunities, the company’s ability to execute its business plan and manage its debt obligations is critical to its survival. Given the current financial situation and the risks involved, a HOLD rating is recommended. Close monitoring of the company’s ability to achieve profitability, manage its debt, and successfully execute its expansion plans is essential.

Company Overview

Aemetis, Inc. is an international renewable natural gas and renewable fuels company focused on the operation, acquisition, development, and commercialization of innovative technologies to produce low and negative carbon intensity renewable fuels. The company operates in three segments: California Ethanol, California Dairy Renewable Natural Gas, and India Biodiesel. Aemetis is also developing a sustainable aviation fuel (SAF) and renewable diesel (RD) production plant and carbon capture and underground sequestration (CCUS) facilities.

Financial Statement Analysis

Revenue Analysis

Aemetis reported a significant increase in revenue for 2024, driven by increased production in the California Ethanol and India Biodiesel segments, and the introduction of LCFS credit sales in the California Dairy Renewable Natural Gas segment.

Segment 2024 Revenue (USD thousands) 2023 Revenue (USD thousands) % Change
California Ethanol 161,756 104,068 55.4%
California Dairy Renewable Natural Gas 13,037 5,455 139.0%
India Biodiesel 92,847 77,194 20.3%
Total 267,640 186,717 43%

Profitability Analysis

Despite the revenue growth, Aemetis continues to struggle with profitability. The California Ethanol segment reported a gross loss, and the company as a whole reported a net loss of $87.5 million.

Segment 2024 Gross Profit (Loss) (USD thousands) 2023 Gross Profit (Loss) (USD thousands) % Change
California Ethanol (13,792) (6,602) -109%
California Dairy Renewable Natural Gas 5,395 (331) 1730%
India Biodiesel 7,817 8,950 -13%
Total (580) 2,017 -129%

Liquidity and Capital Resources

Aemetis’s liquidity position remains weak, with limited cash reserves and a reliance on external financing. The company’s current ratio is below 1, indicating potential difficulties in meeting short-term obligations.

  • Cash and cash equivalents: $0.9 million
  • Current ratio: 0.31
  • Total debt: $338.1 million

Debt Analysis

Aemetis has a significant amount of debt, which poses a substantial risk to its financial stability. The company’s ability to service its debt obligations is dependent on generating sufficient cash flow from operations and securing additional financing.

  • Total debt increased from $294.7 million in 2023 to $338.1 million in 2024.
  • The company relies on waivers and amendments from its senior lender to manage its debt obligations.
  • The maturity dates for a significant portion of the debt are approaching, requiring refinancing or extension.

Cash Flow Analysis

The company’s cash flow from operations was negative in 2024, indicating that it is not generating enough cash from its core business activities to cover its expenses. This further increases its reliance on external financing.

  • Net cash used in operating activities: $(32.9) million
  • Net cash used in investing activities: $(14.1) million
  • Net cash provided by financing activities: $44.6 million

Management’s Discussion and Analysis (MD&A) Insights

Management highlights the revenue growth and operational improvements in its MD&A. However, the narrative also acknowledges the challenges related to profitability and debt management. The forward-looking statements emphasize the company’s plans for expansion and technological advancements, but these are subject to significant risks and uncertainties.

  • Management expresses optimism about future growth and profitability, but this is contingent on successful execution of its business plan and favorable market conditions.
  • The MD&A highlights the importance of government incentives and regulatory support for the renewable fuels industry.
  • The company acknowledges the risks associated with commodity price volatility and competition.

Risk Assessment

The 10-K filing identifies numerous risks that could materially affect Aemetis’s business, financial condition, and results of operations. Key risks include:

  • Liquidity and Going Concern: The company’s ability to continue as a going concern is dependent on securing additional financing and generating positive cash flow from operations.
  • Debt Obligations: The high level of indebtedness and the need for continued waivers from its senior lender pose a significant risk.
  • Commodity Price Volatility: Fluctuations in the prices of corn, ethanol, biodiesel, and other commodities could adversely affect profitability.
  • Regulatory Changes: Changes in government policies and regulations related to renewable fuels could impact the company’s revenue and profitability.
  • Project Execution: The success of the SAF/RD production plant and CCUS facilities is subject to numerous development and construction risks.
  • Material Weaknesses in Internal Control: The identified material weaknesses in internal control over financial reporting could lead to material misstatements in the financial statements.

Opportunity Assessment

Despite the risks, Aemetis has several potential opportunities for growth and improved profitability:

  • Expansion into Renewable Natural Gas: The California Dairy Renewable Natural Gas segment is experiencing rapid growth and offers a promising source of revenue and cash flow.
  • Sustainable Aviation Fuel and Renewable Diesel: The SAF/RD production plant has the potential to generate significant revenue and benefit from government incentives.
  • Carbon Capture and Underground Sequestration: The CCUS facilities could generate valuable LCFS credits and federal tax credits.
  • Technological Advancements: The company’s investments in energy efficiency and alternative feedstocks could improve margins and lower carbon intensity.
  • Government Support: Favorable government policies and regulations, such as the RFS and LCFS, could drive demand for renewable fuels.

Conclusion and Actionable Insights

Aemetis is a company with significant growth potential in the renewable fuels industry. However, its financial situation is precarious, and it faces numerous risks. The company’s ability to manage its debt, execute its expansion plans, and achieve profitability will be critical to its long-term success. Investors should closely monitor the following:

  • Progress in securing additional financing and managing debt obligations.
  • Development and construction of the SAF/RD production plant and CCUS facilities.
  • Performance of the California Dairy Renewable Natural Gas segment.
  • Changes in government policies and regulations related to renewable fuels.
  • Remediation of the identified material weaknesses in internal control.

Overall Assessment: HOLD

Disclaimer: This report is for informational purposes only and should not be considered financial advice. The analysis is based on publicly available information and is subject to change. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.

Aemetis, Inc. Financial Analysis – 2024

1. Commentary

Aemetis, Inc. experienced a significant increase in revenue in 2024, driven by higher sales volumes across its ethanol, RNG, and biodiesel segments. However, the company reported a gross loss and a net loss, indicating challenges in managing costs and expenses. The increase in debt to fund operations and capital expenditures remains a concern, as it limits financial flexibility. Internal control weaknesses identified by the auditors also pose a risk to the reliability of financial reporting.

2. Financial Ratio and Metric Analysis

Profitability

  • Gross Profit Margin

    • Metric: (Gross Profit / Revenue)
      • 2024: (-$580 / $267,640) = -0.22%
      • 2023: ($2,017 / $186,717) = 1.08%
    • Trend: (($-0.0022 – 0.0108) / 0.0108) = -120.37%
    • Industry: The average gross profit margin for the renewable energy industry varies, but generally ranges from 20% to 40%. Aemetis’ negative gross profit margin indicates significant cost management issues compared to industry peers.
  • Operating Profit Margin

    • Metric: (Operating Loss / Revenue)
      • 2024: (-$40,416 / $267,640) = -15.10%
      • 2023: (-$37,401 / $186,717) = -20.03%
    • Trend: ((-0.1510 – (-0.2003)) / -0.2003) = 24.61%
    • Industry: The operating profit margin for the renewable energy industry typically ranges from 10% to 20%. Aemetis’ negative operating profit margin suggests operational inefficiencies and high operating expenses compared to industry averages.
  • Net Profit Margin

    • Metric: (Net Loss / Revenue)
      • 2024: (-$87,537 / $267,640) = -32.71%
      • 2023: (-$46,420 / $186,717) = -24.86%
    • Trend: ((-0.3271 – (-0.2486)) / -0.2486) = -31.58%
    • Industry: The net profit margin for the renewable energy industry generally ranges from 5% to 15%. Aemetis’ negative net profit margin indicates significant challenges in achieving profitability.
  • Return on Assets (ROA)

    • Metric: (Net Loss / Total Assets)
      • 2024: (-$87,537 / $259,302) = -33.76%
      • 2023: (-$46,420 / $243,406) = -19.07%
    • Trend: ((-0.3376 – (-0.1907)) / -0.1907) = -77.03%
    • Industry: The ROA for the renewable energy industry typically ranges from 2% to 5%. Aemetis’ negative ROA indicates inefficient asset utilization in generating profits.
  • Return on Equity (ROE)

    • Metric: (Net Loss / Total Stockholders’ Deficit)
      • 2024: (-$87,537 / -$263,928) = 33.17%
      • 2023: (-$46,420 / -$216,977) = 21.49%
    • Trend: ((0.3317 – 0.2149) / 0.2149) = 54.35%
    • Industry: The ROE for the renewable energy industry generally ranges from 5% to 15%. Aemetis’ ROE is positive due to the negative equity, but this is not a sustainable indicator of performance.
  • Earnings Per Share (EPS)

    • Metric: (Net Loss / Weighted Average Shares Outstanding)
      • Basic 2024: (-$87,537 / 45,902) = -$1.91
      • Basic 2023: (-$46,420 / 38,061) = -$1.22
      • Diluted 2024: (-$87,537 / 45,902) = -$1.91
      • Diluted 2023: (-$46,420 / 38,061) = -$1.22
    • Trend: ((-1.91 – (-1.22)) / -1.22) = -56.56%
    • Industry: Given the losses, EPS is negative, which is unfavorable compared to profitable industry peers.

Liquidity

  • Current Ratio

    • Metric: (Current Assets / Current Liabilities)
      • 2024: ($44,696 / $143,968) = 0.31
      • 2023: ($36,400 / $84,389) = 0.43
    • Trend: ((0.31 – 0.43) / 0.43) = -27.91%
    • Industry: A typical current ratio for companies is between 1.5 and 2.0. Aemetis’ current ratio is significantly below this range, indicating potential liquidity issues.
  • Quick Ratio (Acid-Test Ratio)

    • Metric: ((Current Assets – Inventories) / Current Liabilities)
      • 2024: (($44,696 – $25,442) / $143,968) = 0.13
      • 2023: (($36,400 – $18,291) / $84,389) = 0.21
    • Trend: ((0.13 – 0.21) / 0.21) = -38.10%
    • Industry: A typical quick ratio is around 1.0. Aemetis’ quick ratio is very low, indicating a limited ability to meet short-term obligations without relying on inventory sales.
  • Cash Ratio

    • Metric: (Cash and Cash Equivalents / Current Liabilities)
      • 2024: ($898 / $143,968) = 0.006
      • 2023: ($2,667 / $84,389) = 0.032
    • Trend: ((0.006 – 0.032) / 0.032) = -81.25%
    • Industry: A typical cash ratio is around 0.2. Aemetis’ cash ratio is extremely low, indicating a very limited ability to cover short-term liabilities with available cash.

Solvency/Leverage

  • Debt-to-Equity Ratio

    • Metric: (Total Debt / Total Stockholders’ Deficit)
      • 2024: ($338,061 / -$263,928) = -1.28
      • 2023: ($294,721 / -$216,977) = -1.36
    • Trend: ((-1.28 – (-1.36)) / -1.36) = 5.88%
    • Industry: The debt-to-equity ratio for the renewable energy industry typically ranges from 0.5 to 1.5. Aemetis’ negative debt-to-equity ratio is due to the negative equity, making it difficult to compare.
  • Debt-to-Assets Ratio

    • Metric: (Total Debt / Total Assets)
      • 2024: ($338,061 / $259,302) = 1.30
      • 2023: ($294,721 / $243,406) = 1.21
    • Trend: ((1.30 – 1.21) / 1.21) = 7.44%
    • Industry: A typical debt-to-assets ratio is below 1.0. Aemetis’ ratio above 1.0 indicates that the company’s assets are heavily financed by debt, increasing financial risk.
  • Interest Coverage Ratio (Times Interest Earned)

    • Metric: (EBIT / Interest Expense)
      • 2024: ((-$40,416 + $46,621) / $46,621) = 0.13
      • 2023: ((-$37,401 + $39,519) / $39,519) = 0.05
    • Trend: ((0.13 – 0.05) / 0.05) = 160.00%
    • Industry: A healthy interest coverage ratio is typically above 1.5. Aemetis’ ratio is very low, indicating difficulty in covering interest expenses with operating income.

Activity/Efficiency

  • Inventory Turnover

    • Metric: (Cost of Goods Sold / Average Inventory)
      • 2024: $268,220 / (($25,442 + $18,291) / 2) = 12.29
      • 2023: $184,700 / (($18,291 + $0) / 2) = 20.14
    • Trend: ((12.29 – 20.14) / 20.14) = -38.98%
    • Industry: Inventory turnover varies widely by sub-sector within renewable energy. Aemetis’ turnover suggests relatively efficient inventory management, but the decrease from the previous year is concerning.
  • Days Sales Outstanding (DSO)

    • Metric: (Average Accounts Receivable / Revenue) * 365
      • 2024: (($1,805 + $8,633) / 2) / $267,640 * 365 = 2.54
      • 2023: (($8,633 + $0) / 2) / $186,717 * 365 = 8.44
    • Trend: ((2.54 – 8.44) / 8.44) = -69.91%
    • Industry: DSO varies, but Aemetis’ DSO indicates very quick collection of receivables.
  • Days Payable Outstanding (DPO)

    • Metric: (Average Accounts Payable / Cost of Goods Sold) * 365
      • 2024: (($33,139 + $32,132) / 2) / $268,220 * 365 = 45.23
      • 2023: (($32,132 + $0) / 2) / $184,700 * 365 = 31.75
    • Trend: ((45.23 – 31.75) / 31.75) = 42.46%
    • Industry: DPO varies, but Aemetis’ DPO indicates a reasonable time to pay suppliers.
  • Asset Turnover

    • Metric: (Revenue / Total Assets)
      • 2024: ($267,640 / $259,302) = 1.03
      • 2023: ($186,717 / $243,406) = 0.77
    • Trend: ((1.03 – 0.77) / 0.77) = 33.77%
    • Industry: Asset turnover in the renewable energy industry typically ranges from 0.5 to 1.0. Aemetis’ asset turnover indicates efficient use of assets to generate revenue.

Valuation

  • Price-to-Earnings Ratio (P/E)

    • Metric: (Stock Price / EPS)
      • Stock Price: $1.68
      • EPS: -$1.91 (2024)
      • P/E: $1.68 / (-$1.91) = -0.88
    • Trend: A negative P/E ratio is not meaningful for comparison.
    • Industry: Given the negative earnings, the P/E ratio is not meaningful.
  • Price-to-Book Ratio (P/B)

    • Metric: (Market Cap / Total Stockholders’ Equity)
      • Market Cap = $1.68 * 51,139 = $85,913.52
      • Book Value = -$263,928
      • P/B = $85,913.52 / (-$263,928) = -0.33
    • Trend: A negative P/B ratio is not meaningful for comparison.
    • Industry: A negative book value makes the P/B ratio not meaningful.
  • Price-to-Sales Ratio (P/S)

    • Metric: (Market Cap / Revenue)
      • Market Cap = $1.68 * 51,139 = $85,913.52
      • Revenue = $267,640
      • P/S = $85,913.52 / $267,640 = 0.32
    • Trend: To determine the trend, we would need the P/S from the previous comparable period, which is not provided in the filing.
    • Industry: The P/S ratio for the renewable energy industry typically ranges from 1 to 3. Aemetis’ P/S ratio is low, suggesting the company may be undervalued relative to its revenue.
  • Enterprise Value to EBITDA (EV/EBITDA)

    • Metric: (Enterprise Value / EBITDA)
      • Market Cap = $1.68 * 51,139 = $85,913.52
      • Total Debt = $338,061
      • Cash = $898
      • Enterprise Value = $85,913.52 + $338,061 – $898 = $423,076.52
      • EBITDA = -$18,809
      • EV/EBITDA = $423,076.52 / (-$18,809) = -22.49
    • Trend: A negative EV/EBITDA ratio is not meaningful for comparison.
    • Industry: A negative EBITDA makes the EV/EBITDA ratio not meaningful.

Growth Rates

  • Revenue Growth

    • Metric: ((2024 Revenue – 2023 Revenue) / 2023 Revenue)
      • ($267,640 – $186,717) / $186,717 = 43.34%
    • Industry: Revenue growth in the renewable energy sector varies, but Aemetis’ growth rate is significant.
  • Net Income Growth

    • Metric: ((2024 Net Income – 2023 Net Income) / 2023 Net Income)
      • (-$87,537 – (-$46,420)) / (-$46,420) = -88.58%
    • Industry: The negative growth rate indicates a worsening financial situation.
  • EPS Growth

    • Metric: ((2024 EPS – 2023 EPS) / 2023 EPS)
      • (-$1.91 – (-$1.22)) / (-$1.22) = -56.56%
    • Industry: The negative growth rate indicates a worsening financial situation.

Other Relevant Metrics

  • California Ethanol Gallons Sold

    • Metric: Gallons Sold (in millions)
      • 2024: 60.6
      • 2023: 32.1
    • Trend: ((60.6 – 32.1) / 32.1) = 88.79%
    • Significance: A substantial increase in ethanol gallons sold, indicating higher production and sales volume.
  • California Dairy Renewable Natural Gas (RNG) RINs Sold

    • Metric: RINs sold (in thousands)
      • 2024: 3,029.9
      • 2023: 1,400.7
    • Trend: ((3,029.9 – 1,400.7) / 1,400.7) = 116.31%
    • Significance: A significant increase in RINs sold, reflecting growth in the RNG segment.
  • India Biodiesel Metric Tons Sold

    • Metric: Metric tons sold (in thousands)
      • 2024: 74.2
      • 2023: 60.5
    • Trend: ((74.2 – 60.5) / 60.5) = 22.64%
    • Significance: An increase in biodiesel metric tons sold, indicating growth in the India biodiesel segment.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️