MGP Ingredients, Inc. (Nasdaq:MGPI), a
leading provider of distilled spirits, branded spirits, and food
ingredient solutions, today reported results for the first quarter
ended March 31, 2023.
2023 first quarter consolidated
results compared to 2022 first
quarter
- Sales increased 3% to $201.0
million.
- Gross profit decreased 3% to $69.8
million, representing 34.7% of sales.
- Operating income decreased 17% to
$41.6 million.
- Net income decreased 17% to $31.0 million.
- Adjusted EBITDA decreased 15% to
$47.1 million.
- Basic earnings per share (“EPS”) decreased to $1.40 per share
from $1.69 per share.
- Diluted EPS decreased to $1.39 per share from $1.69 per
share.
“Our year is off to another strong start, as this quarter’s
gross profit and adjusted EBITDA performance represents the second
best quarter in Company history, second only to the record first
quarter of 2022,” said David Colo, president and CEO of MGP
Ingredients. “Sales of brown goods grew 10% from the prior year
period to record levels, driven by strong new distillate customer
commitments, higher pricing across all brown goods, and stronger
than expected customer demand for spot purchases. Within our
Branded Spirits segment, revenue grew 2% and we recently realigned
our national distribution capabilities with Republic National
Distributing Company (“RNDC”) toward the end of the quarter. We
believe this realignment with RNDC, as well as continued investment
in our premium plus family of spirits brands, continues to position
us well for incremental growth and margin expansion opportunities
going forward. We are also pleased with the continued strength of
our Ingredient Solutions business, which continues to benefit from
broader consumer trends that include the shift toward plant-based
diets as reflected by the segment’s gross profit and margin
performance this quarter.”
Distilling SolutionsIn the
first quarter 2023, sales for the Distilling Solutions segment
increased 2% to $113.2 million, reflecting a 2% increase in sales
of premium beverage alcohol, due to higher brown goods sales. Gross
profit decreased to $33.0 million or 29.2% of segment sales,
compared to $38.9 million, or 34.9% of segment sales in the first
quarter 2022.
Branded SpiritsFor the first quarter 2023,
sales for the Branded Spirits segment increased 2% to $56.9
million. Gross profit decreased slightly to $24.6 million, or 43.2%
of segment sales compared to $24.8 million, or 44.5% of segment
sales in the first quarter 2022.
Ingredient SolutionsIn the first quarter 2023,
sales in the Ingredient Solutions segment increased 10% to $30.9
million. Gross profit increased to $12.2 million, or 39.5% of
segment sales, compared to $8.1 million, or 29.0% of segment sales
in the first quarter 2022.
OtherAdvertising and promotion expenses for the
first quarter 2023 increased $2.2 million, or 41%, to $7.7 million
as compared to the first quarter 2022.
Corporate selling, general and administrative ("SG&A")
expenses for the first quarter 2023 increased $4.3 million, or 26%,
to $20.5 million as compared to the first quarter 2022.
The corporate effective tax rate for the first quarter 2023 was
23.7%, compared with 23.0% from the first quarter 2022.
2023 Outlook MGP is confirming the following
consolidated guidance for fiscal 2023:
- Sales are projected to be in the range of $815 million to $835
million.
- Adjusted EBITDA is expected to be in the range of $178 million
to $183 million.
- Adjusted basic EPS is forecasted to be in the $5.05 to $5.20
range, with basic weighted average shares outstanding expected to
be approximately 22.2 million at year end.
Conference Call and Webcast
InformationMGP Ingredients will host a conference call for
analysts and institutional investors at 10 a.m. ET today to discuss
these results and current business trends. The conference call and
webcast will be available via:
|
Webcast: |
ir.mgpingredients.com on the Events & Presentations
page |
|
Conference Call: |
844-308-6398 (domestic) or 412-717-9605 (international) |
About MGP Ingredients, Inc.MGP Ingredients,
Inc. (Nasdaq: MGPI) is a leading producer of premium distilled
spirits, branded spirits, and food ingredient solutions. Since
1941, we have combined our expertise and energy aimed at
formulating excellence, bringing product ideas to life
collaboratively with our customers.
As one of the largest distillers in the U.S., MGP’s offerings
include bourbon and rye whiskeys, gins, and vodkas, which are
created at the intersection of science and imagination, for
customers of all sizes, from crafts to multinational brands. With
distilleries in Kentucky, Indiana and Kansas, and bottling
operations in Missouri, Ohio, and Northern Ireland, MGP has the
infrastructure and expertise to create on any scale.
MGP’s branded spirits portfolio covers a wide spectrum of brands
in every segment, including iconic brands from Luxco, which was
founded in 1958 by the Lux Family. Luxco is a leading producer,
supplier, importer and bottler of beverage alcohol products. Our
branded spirits mission is to meet the needs and exceed the
expectations of consumers, associates and business partners.
Luxco’s award-winning spirits portfolio includes well-known brands
from four distilleries: Bardstown, Kentucky-based Lux Row
Distillers, home of Ezra Brooks, Rebel, Blood Oath, David Nicholson
and Daviess County; Lebanon, Kentucky-based Limestone Branch
Distillery, maker of Yellowstone Kentucky Straight Bourbon Whiskey,
Minor Case Straight Rye Whiskey and Bowling & Burch Gin;
Jalisco, Mexico-based Destiladora González Lux, producer of 100%
agave tequilas, El Mayor, Exotico and Dos Primos; and the historic
Ross & Squibb Distillery in Lawrenceburg, Indiana, where the
Remus Straight Bourbon Whiskey and Rossville Union Straight Rye
Whiskey are produced. The innovative and high-quality brand
portfolio also includes Everclear Grain Alcohol, Pearl Vodka, Green
Hat Gin, Saint Brendan’s Irish Cream, The Quiet Man Irish Whiskey
and other well-recognized brands.
In addition, our Ingredient Solutions segment offers specialty
proteins and starches that help customers harness the power of
plants and provide a host of functional, nutritional, and sensory
benefits for a wide range of food products.
The transformation of American grain into something more is in
the soul of our people, products, and history. We’re devoted to
unlocking the creative potential of this extraordinary resource.
For more information, visit mgpingredients.com.
Cautionary Note Regarding Forward-Looking
StatementsThe forward-looking statements contained herein
include, but are not limited to, statements about the expected
effects on MGP Ingredients, Inc. (the "Company," or "MGP") of
continuing consumer trends and our announced expansionary projects
and the Company's outlook for 2023. Forward looking statements are
usually identified by or are associated with such words as
“intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,”
"project," "forecast," “hopeful,” “should,” “may,” “will,” “could,”
“encouraged,” “opportunities,” “potential,” and/or the negatives or
variations of these terms or similar terminology.
These forward-looking statements reflect management’s current
beliefs and estimates of future economic circumstances, industry
conditions, Company performance, and Company financial results and
financial condition and are not guarantees of future performance.
All such forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking
statements. Important factors that could cause actual results to
differ materially from our expectations include:
- Disruptions in the operations or a catastrophic event at any of
our facilities
- The effect of commodity price fluctuations
- The effectiveness or execution of our strategic plan
- Our reliance on a limited number of third-party suppliers
- The impact of climate change, or legal, regulatory or market
measures to address climate change
- Product recalls or other product liability claims
- Any damage to our reputation or that of any of our key
customers or their brands
- Adverse public opinion about any of our specialty
ingredients
- Warehouse expansion issues
- Our reliance on fewer, more profitable customer
relationships
- Commercial, political, and financial risks
- The impact of our compliance with extensive regulation and
taxation requirements
- The impact of tariffs or any changes in trade policies
- Significant additional labeling or warning requirements or
limitations on the availability of our products
- The impact of our compliance with anti-corruption laws, trade
sanctions and restrictions
- Changes in consumer preferences and purchases and our ability
to anticipate or react to those changes
- A change in public opinion about alcohol
- Our reliance on distributors to adequately distribute our
branded spirits within their territories
- Failure of our branded spirits to secure and maintain listings
in the control states
- Changes in excise taxes, incentives and customs duties related
to products containing alcohol
- The impact of class action or other litigation relating to
alcohol abuse or the misuse of alcohol
- The availability and cost of raw materials, product
ingredients, energy resources or labor, and fluctuations in energy
costs
- The impact of global supply chain challenges
- The effects of inflation and our ability to increase prices to
customers
- The impact of the ongoing military conflict between Russia and
Ukraine
- Our ability to adequately protect our intellectual property
rights
- Our ability to defend against claims of alleged intellectual
property rights infringement
- Risks related to our dual-class stock structure and the
provisions of our governing documents; our reliance on our key
information technology systems, networks, processes, associated
sites, or service providers
- Risks related to acquisitions, the competitive market in which
we sell our products, and related market conditions
- Work disruptions or stoppages by our unionized workforce
- Potential adverse effects related to the loss of key management
personnel
- Our ability to maintain compliance with all applicable loan
agreement covenants
- Increases in interest rates
- The impact of COVID-19 and other pandemics or health
crises
For further information on these and other risks and
uncertainties that may affect our business, including risks
specific to our Distilling Solutions, Branded Spirits and
Ingredient Solutions segments, see Item 1A. Risk Factors of our
Annual Report on Form 10-K for the year ended December 31,
2022.
Non-GAAP Financial Measures In addition to
reporting financial information in accordance with U.S. GAAP, the
Company provides certain non-GAAP financial measures that are not
in accordance with, or alternatives for, GAAP. In addition to the
comparable GAAP measures, the Company has disclosed adjusted
EBITDA, as well as guidance for adjusted EBITDA and adjusted basic
EPS. The presentation of these non-GAAP financial measures should
be reviewed in conjunction with net income computed in accordance
with U.S. GAAP and should not be considered a substitute for the
GAAP measure. We believe that the non-GAAP measures provide useful
information to investors regarding the Company's performance and
overall results of operations. In addition, management uses these
non-GAAP measures in conjunction with GAAP measures when evaluating
the Company’s operating results compared to prior periods on a
consistent basis, assessing financial trends and for forecasting
purposes. Non-GAAP financial measures may not provide information
that is directly comparable to other companies, even if similar
terms are used to identify such measures. The attached schedule
provides a full reconciliation of historical adjusted EBITDA to net
income, its most directly comparable U.S. GAAP financial measure.
Full year 2023 guidance measures of adjusted EBITDA and adjusted
basic EPS are provided on a non-GAAP basis without a reconciliation
to the most directly comparable GAAP measures because the Company
is unable to predict with a reasonable degree of certainty certain
items contained in the GAAP measures without unreasonable efforts.
Such items include, but are not limited to, acquisition related
expenses, restructuring and related expenses, and other items not
reflective of MGP’s ongoing operations.
For More InformationInvestors
& Analysts:Mike Houston646-475-2998 or
investor.relations@mgpingredients.com
Media:Greg Manis913-360-5440 or
greg.manis@mgpingredients.com
MGP INGREDIENTS, INC. |
OPERATING INCOME ROLLFORWARD |
(Dollars in thousands) |
|
Operating
income, quarter versus quarter |
|
Operating Income |
|
Change |
|
Operating income for the
quarter ended March 31, 2022 |
|
$ |
50,080 |
|
|
|
|
Decrease in
gross profit - Distilling Solutions segment |
|
|
(5,905 |
) |
|
(12 |
) |
pp(a) |
Decrease in gross profit - Branded Spirits segment |
|
|
(189 |
) |
|
— |
|
pp |
Increase in gross profit - Ingredient Solutions segment |
|
|
4,097 |
|
|
8 |
|
pp |
Increase in advertising and promotion expenses |
|
|
(2,229 |
) |
|
(4 |
) |
pp |
Increase in SG&A expenses |
|
|
(4,295 |
) |
|
(9 |
) |
pp |
Operating income for the quarter ended
March 31, 2023 |
|
$ |
41,559 |
|
|
(17 |
)% |
|
(a) Percentage points (“pp”).
MGP
INGREDIENTS, INC. |
EARNINGS
PER COMMON SHARE (“EPS”) ROLLFORWARD |
|
Change in basic and diluted EPS, quarter versus
quarter |
|
Basic and Diluted EPS |
|
Change |
|
Basic and diluted EPS for the quarter ended March 31, 2022 |
|
$ |
1.69 |
|
|
|
|
Change in operating income (b) |
|
|
(0.30 |
) |
|
(18 |
) |
pp(a) |
Change in interest expense,
net (b) |
|
|
0.02 |
|
|
1 |
|
pp |
Change in weighted average
shares outstanding |
|
|
(0.01 |
) |
|
(1 |
) |
pp |
Basic EPS for the
quarter ended March 31, 2023 |
|
$ |
1.40 |
|
|
(18 |
)% |
|
Impact of dilutive shares
outstanding |
|
|
(0.01 |
) |
|
(1 |
) |
pp |
Diluted EPS for the
quarter ended March 31, 2023 |
|
$ |
1.39 |
|
|
(19 |
)% |
|
(a) Percentage points (“pp”).(b)
Items are net of tax based on the effective tax rate for the base
year (2022).
MGP
INGREDIENTS, INC. |
SALES BY
OPERATING SEGMENT |
(Dollars
in thousands) |
|
DISTILLING SOLUTIONS SALES |
|
|
|
|
Quarter versus Quarter Sales |
|
|
Quarter Ended March 31, |
|
Change Increase/(Decrease) |
|
|
|
2023 |
|
|
2022 |
|
$ Change |
|
% Change |
|
Brown goods |
$ |
68,324 |
|
$ |
62,145 |
|
$ |
6,179 |
|
|
10 |
% |
|
White goods |
|
15,954 |
|
|
20,086 |
|
|
(4,132 |
) |
|
(21 |
) |
|
Premium beverage alcohol |
|
84,278 |
|
|
82,231 |
|
|
2,047 |
|
|
2 |
|
|
Industrial alcohol |
|
10,439 |
|
|
11,495 |
|
|
(1,056 |
) |
|
(9 |
) |
|
Food grade alcohol |
|
94,717 |
|
|
93,726 |
|
|
991 |
|
|
1 |
|
|
Fuel grade alcohol |
|
2,556 |
|
|
3,282 |
|
|
(726 |
) |
|
(22 |
) |
|
Distillers feed and related
co-products |
|
9,092 |
|
|
8,917 |
|
|
175 |
|
|
2 |
|
|
Warehouse services |
|
6,858 |
|
|
5,584 |
|
|
1,274 |
|
|
23 |
|
|
Total Distilling Solutions |
$ |
113,223 |
|
$ |
111,509 |
|
$ |
1,714 |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
BRANDED SPIRITS SALES |
|
|
|
|
Quarter versus Quarter Sales |
|
|
Quarter Ended March 31, |
|
Change Increase/(Decrease) |
|
|
|
2023 |
|
|
2022 |
|
$ Change |
|
% Change |
|
Ultra premium |
$ |
9,115 |
|
$ |
12,597 |
|
$ |
(3,482 |
) |
|
(28 |
)% |
|
Super premium |
|
2,847 |
|
|
2,946 |
|
|
(99 |
) |
|
(3 |
) |
|
Premium |
|
6,784 |
|
|
6,140 |
|
|
644 |
|
|
10 |
|
|
Premium plus |
|
18,746 |
|
|
21,683 |
|
|
(2,937 |
) |
|
(14 |
) |
|
Mid |
|
20,835 |
|
|
19,273 |
|
|
1,562 |
|
|
8 |
|
|
Value |
|
13,421 |
|
|
11,299 |
|
|
2,122 |
|
|
19 |
|
|
Other |
|
3,881 |
|
|
3,496 |
|
|
385 |
|
|
11 |
|
|
Total Branded Spirits |
$ |
56,883 |
|
$ |
55,751 |
|
$ |
1,132 |
|
|
2 |
% |
|
|
INGREDIENT SOLUTIONS SALES |
|
|
|
|
Quarter versus Quarter Sales |
|
|
Quarter Ended March 31, |
|
Change Increase / (Decrease) |
|
|
|
2023 |
|
|
2022 |
|
$ Change |
|
% Change |
|
Specialty wheat starches |
$ |
14,686 |
|
$ |
15,203 |
|
$ |
(517 |
) |
|
(3 |
)% |
|
Specialty wheat proteins |
|
11,890 |
|
|
9,419 |
|
|
2,471 |
|
|
26 |
|
|
Commodity wheat starches |
|
3,807 |
|
|
3,353 |
|
|
454 |
|
|
14 |
|
|
Commodity wheat proteins |
|
521 |
|
|
— |
|
|
521 |
|
|
N/A |
|
|
Total Ingredient Solutions |
$ |
30,904 |
|
$ |
27,975 |
|
$ |
2,929 |
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
MGP
INGREDIENTS, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
(Dollars
in thousands, except share and per share amounts) |
|
|
|
Quarter Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Sales |
|
$ |
201,010 |
|
|
$ |
195,235 |
|
Cost of sales |
|
|
131,186 |
|
|
|
123,414 |
|
Gross profit |
|
|
69,824 |
|
|
|
71,821 |
|
|
|
|
|
|
Advertising and promotion
expenses |
|
|
7,733 |
|
|
|
5,504 |
|
Selling, general, and
administrative expenses |
|
|
20,532 |
|
|
|
16,237 |
|
Operating income |
|
|
41,559 |
|
|
|
50,080 |
|
|
|
|
|
|
Interest expense, net |
|
|
(995 |
) |
|
|
(1,598 |
) |
Other income (expense),
net |
|
|
123 |
|
|
|
54 |
|
Income before income taxes |
|
|
40,687 |
|
|
|
48,536 |
|
|
|
|
|
|
Income tax expense |
|
|
9,655 |
|
|
|
11,165 |
|
Net income |
|
|
31,032 |
|
|
|
37,371 |
|
|
|
|
|
|
Net loss attributable to
noncontrolling interest |
|
|
39 |
|
|
|
66 |
|
Net income attributable to MGP Ingredients,
Inc. |
|
|
31,071 |
|
|
|
37,437 |
|
|
|
|
|
|
Income attributable to
participating securities |
|
|
(311 |
) |
|
|
(318 |
) |
Net income used in earnings per common share
calculation |
|
$ |
30,760 |
|
|
$ |
37,119 |
|
|
|
|
|
|
Weighted average
common shares |
|
|
|
|
Basic |
|
|
22,040,224 |
|
|
|
21,989,100 |
|
Diluted |
|
|
22,072,271 |
|
|
|
21,989,100 |
|
|
|
|
|
|
Earnings per common
share |
|
|
|
|
Basic |
|
$ |
1.40 |
|
|
$ |
1.69 |
|
Diluted |
|
$ |
1.39 |
|
|
$ |
1.69 |
|
MGP
INGREDIENTS, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
(Dollars
in thousands) |
|
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
31,728 |
|
|
$ |
47,889 |
|
Receivables, net |
|
128,611 |
|
|
|
109,267 |
|
Inventory |
|
308,558 |
|
|
|
289,722 |
|
Prepaid expenses |
|
6,542 |
|
|
|
2,957 |
|
Refundable income taxes |
|
— |
|
|
|
4,327 |
|
Total Current Assets |
|
475,439 |
|
|
|
454,162 |
|
|
|
|
|
Property, plant, and
equipment |
|
461,069 |
|
|
|
450,800 |
|
Less accumulated depreciation
and amortization |
|
(220,100 |
) |
|
|
(215,168 |
) |
Property, Plant, and Equipment, net |
|
240,969 |
|
|
|
235,632 |
|
Operating lease right-of-use
assets, net |
|
14,698 |
|
|
|
15,042 |
|
Investment in joint
ventures |
|
5,274 |
|
|
|
5,534 |
|
Intangible assets, net |
|
216,250 |
|
|
|
216,768 |
|
Goodwill |
|
226,294 |
|
|
|
226,294 |
|
Other assets |
|
5,262 |
|
|
|
4,779 |
|
TOTAL ASSETS |
$ |
1,184,186 |
|
|
$ |
1,158,211 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Current maturities of long-term debt |
$ |
6,400 |
|
|
$ |
5,600 |
|
Accounts payable |
|
66,755 |
|
|
|
66,432 |
|
Federal and state excise taxes payable |
|
7,388 |
|
|
|
4,627 |
|
Income taxes payable |
|
4,716 |
|
|
|
— |
|
Accrued expenses and other |
|
17,056 |
|
|
|
28,716 |
|
Total Current Liabilities |
|
102,315 |
|
|
|
105,375 |
|
|
|
|
|
Long-term debt, less current
maturities |
|
27,914 |
|
|
|
29,510 |
|
Convertible senior notes |
|
195,305 |
|
|
|
195,225 |
|
Long-term operating lease
liabilities |
|
11,252 |
|
|
|
11,622 |
|
Other noncurrent
liabilities |
|
3,768 |
|
|
|
3,723 |
|
Deferred income taxes |
|
67,685 |
|
|
|
67,112 |
|
Total Liabilities |
|
408,239 |
|
|
|
412,567 |
|
Total equity |
|
775,947 |
|
|
|
745,644 |
|
TOTAL LIABILITIES AND TOTAL EQUITY |
$ |
1,184,186 |
|
|
$ |
1,158,211 |
|
MGP
INGREDIENTS, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
(Dollars
in thousands) |
|
|
|
Quarter to Date Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Cash Flows from Operating
Activities |
|
|
|
|
Net income |
|
$ |
31,032 |
|
|
$ |
37,371 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
5,171 |
|
|
|
5,621 |
|
Share-based compensation |
|
|
1,215 |
|
|
|
1,373 |
|
Equity method investment loss (income) |
|
|
260 |
|
|
|
(394 |
) |
Deferred income taxes, including change in valuation allowance |
|
|
573 |
|
|
|
347 |
|
Other, net |
|
|
99 |
|
|
|
24 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Receivables, net |
|
|
(19,227 |
) |
|
|
(9,601 |
) |
Inventory |
|
|
(18,707 |
) |
|
|
(13,696 |
) |
Prepaid expenses |
|
|
(3,578 |
) |
|
|
657 |
|
Income taxes payable (refundable) |
|
|
9,043 |
|
|
|
5,437 |
|
Accounts payable |
|
|
6,498 |
|
|
|
4,638 |
|
Accrued expenses and other |
|
|
(10,208 |
) |
|
|
(8,896 |
) |
Federal and state excise taxes payable |
|
|
2,761 |
|
|
|
(515 |
) |
Other, net |
|
|
89 |
|
|
|
(136 |
) |
Net cash provided by operating activities |
|
|
5,021 |
|
|
|
22,230 |
|
|
|
|
|
|
Cash Flows from Investing
Activities |
|
|
|
|
Additions to property, plant, and equipment |
|
|
(16,237 |
) |
|
|
(10,642 |
) |
Contributions to equity method investment |
|
|
— |
|
|
|
(1,028 |
) |
Other, net |
|
|
(708 |
) |
|
|
(363 |
) |
Net cash used in investing activities |
|
|
(16,945 |
) |
|
|
(12,033 |
) |
|
|
|
|
|
Cash Flows from Financing
Activities |
|
|
|
|
Payment of dividends and dividend equivalents |
|
|
(2,669 |
) |
|
|
(2,661 |
) |
Purchase of treasury stock |
|
|
(801 |
) |
|
|
(714 |
) |
Principal payments on long-term debt |
|
|
(800 |
) |
|
|
(807 |
) |
Net cash used in financing activities |
|
|
(4,270 |
) |
|
|
(4,182 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
33 |
|
|
|
(288 |
) |
Increase (decrease) in cash
and cash equivalents |
|
|
(16,161 |
) |
|
|
5,727 |
|
Cash and cash equivalents,
beginning of period |
|
|
47,889 |
|
|
|
21,568 |
|
Cash and cash equivalents, end
of period |
|
$ |
31,728 |
|
|
$ |
27,295 |
|
MGP
INGREDIENTS, INC. |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(UNAUDITED) |
(in
thousands) |
|
|
Quarter Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Net Income |
$ |
31,032 |
|
|
$ |
37,371 |
|
Interest expense |
|
995 |
|
|
|
1,598 |
|
Income tax expense |
|
9,655 |
|
|
|
11,165 |
|
Depreciation and amortization |
|
5,171 |
|
|
|
5,621 |
|
Equity method investment loss (income) |
|
260 |
|
|
|
(394 |
) |
Adjusted EBITDA |
$ |
47,113 |
|
|
$ |
55,361 |
|
The non-GAAP adjusted EBITDA measure is defined as earnings
before interest expense, income tax expense, depreciation and
amortization, and equity method investment loss (income).
MGP
INGREDIENTS, INC. |
DILUTIVE
SHARES OUTSTANDING CALCULATION (UNAUDITED) |
|
|
Quarter Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Principal amount of the
bonds |
$ |
201,250,000 |
|
|
$ |
201,250,000 |
|
Par value |
$ |
1,000 |
|
|
$ |
1,000 |
|
Number of bonds outstanding
(a) |
|
201,250 |
|
|
|
201,250 |
|
|
|
|
|
Initial conversion rate |
|
10.3911 |
|
|
|
10.3911 |
|
Conversion price |
$ |
96.23620 |
|
|
$ |
96.23620 |
|
|
|
|
|
Average share price (b) |
$ |
97.73393 |
|
|
$ |
80.54661 |
|
Impact of conversion (c) |
$ |
204,382,062 |
|
|
$ |
— |
|
|
|
|
|
Cash paid for principal |
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
Conversion
premium |
$ |
3,132,062 |
|
|
$ |
— |
|
|
|
|
|
Average share price |
$ |
97.73393 |
|
|
$ |
80.54661 |
|
Conversion premium in
shares (d) (e) |
|
32,047 |
|
|
|
— |
|
(a) Number of bonds outstanding is calculated by taking the
principal amount of the bonds divided by the par value.
(b) Average share price is calculated by taking the average of
the daily closing share price for the period. If the average share
price is less than the conversion price of $96.23620 per share, the
impact to EPS is anti-dilutive and therefore the shares were
excluded from the diluted EPS calculation.
(c) Impact of conversion is calculated by taking the number of
bonds outstanding multiplied by the initial conversion rate
multiplied by the average share price. If the average share price
is less than the conversion price then the impact of conversion is
zero.
(d) The impacts of the Convertible Senior Notes were included in
the diluted weighted average common shares outstanding if the
impact was dilutive. The Convertible Senior Notes would only have a
dilutive impact if the average market price per share during the
quarter and year to date period exceeds the conversion price of
$96.23620 per share. For the quarter ended March 31, 2023, the
inclusion of the shares had a dilutive impact and were included in
the diluted EPS calculation. There was no dilutive impact for the
quarter ended March 31, 2022.
(e) Conversion premium in shares is calculated by taking the
conversion premium divided by the average share price. If the
average share price is less than the conversion price, then the
conversion premium in shares is zero.
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