MGP Ingredients, Inc. (Nasdaq: MGPI), a
leading provider of distilled spirits, branded spirits, and food
ingredient solutions, today reported results for the third quarter
ended September 30, 2023.
2023 third quarter consolidated results compared to 2022
third quarter:
- Sales increased 5% to $211.6
million.
- Gross profit increased 24% to $73.4
million, representing 34.7% of sales.
- Operating income decreased 41% to
$19.8 million and net income decreased 45% to $13.1 million,
primarily due to the impairment of assets and other one-time
expenses of $18.3 million related to the planned Atchison
distillery closure as well as the increase in fair value of
contingent consideration of $4.2 million related to the Penelope
acquisition.
- Adjusted operating income increased
26% to $42.7 million and adjusted net income increased 28% to $30.2
million.
- Adjusted EBITDA increased 24% to $48.1 million.
- Basic earnings per common share (“EPS”) decreased to $0.59 per
share from $1.07 per share and diluted EPS decreased to $0.58 per
share from $1.06 per share, primarily due to the impairment of
assets and other one-time expenses related to the planned Atchison
distillery closure as well as the increase in fair value of
contingent consideration related to the Penelope acquisition.
- Adjusted basic EPS increased to $1.36 per share from $1.07 per
share and adjusted diluted EPS increased to $1.34 per share from
$1.06 per share.
“We are very pleased with our continued momentum this quarter,
which has again yielded strong results across each of our business
segments,” said David Colo, president and CEO of MGP Ingredients.
“Sales of brown goods grew 28% from the prior year period, driven
by strong demand for our new distillate and aged whiskey. The
closure of the Atchison white goods and industrial alcohol
distillery, which is consistent with our long-term strategic
objectives, remains on track. Within our Branded Spirits segment,
sales of our premium plus brands grew 33% from the prior year
period, which led to additional gross margin expansion for the
segment. Our Ingredient Solutions business once again generated
record results during the quarter and continued to benefit from
consumer preference toward high protein, low net carb diets. We
remain committed to executing against our strategy and believe our
continued strong performance underscores the strength of our
business model.”
Distilling SolutionsIn the
third quarter 2023, sales for the Distilling Solutions segment
increased 3% to $111.9 million year- over-year, driven by strong
quarterly sales of brown goods, up 28% versus the prior year
period. Gross profit increased to $33.3 million or 29.8% of segment
sales, compared to $25.9 million or 23.9% of segment sales in the
third quarter 2022.
Branded SpiritsFor the third quarter 2023,
sales for the Branded Spirits segment increased 6% to $66.8
million, led by sales of premium plus brands, which increased 33%
to $30.8 million. Gross profit increased to $29.0 million, or 43.5%
of segment sales, compared to $25.1 million, or 39.9% of segment
sales in the third quarter 2022.
Ingredient SolutionsIn the third quarter 2023,
sales in the Ingredient Solutions segment increased 11% to $33.0
million versus the prior-year period. Gross profit increased to
$11.1 million, or 33.8% of segment sales, compared to $8.1 million,
or 27.1% of segment sales in the third quarter 2022.
OtherAdvertising and promotion expenses for the
third quarter 2023 increased $2.2 million to $9.5 million as
compared to the third quarter 2022.
Corporate selling, general and administrative ("SG&A")
expenses for the third quarter 2023 increased $3.7 million to $21.6
million as compared to the third quarter 2022.
During the third quarter, the impairment of assets and other
one-time expenses totaled $18.3 million related to the planned
closure of the Atchison distillery, and the change in fair value of
the contingent consideration totaled $4.2 million related to the
Penelope acquisition.
The corporate effective tax rate for the third quarter 2023 was
25.0%, compared with 24.2% from the third quarter 2022.
2023 Outlook MGP is offering the following
revised 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 $192 million
to $197 million.
- Adjusted basic EPS is forecasted to be in the $5.50 to $5.65
range, with basic weighted average shares outstanding expected to
be approximately 22.1 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
Penelope Bourbon, 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
StatementsThis press release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including without limitation statements about
the strategy and strategic objectives of MGP Ingredients, Inc. (the
“Company” or “MGP”), its business model strength, and the Company’s
2023 outlook, including its expectations for sales, adjusted
EBITDA, adjusted basic EPS, and shares outstanding. Forward looking
statements are usually identified by or are associated with words
such as “intend,” “plan,” “believe,” “estimate,” “expect,”
“anticipate,” “project,” “forecast,” “hopeful,” “should,” “may,”
“will,” “could,” “encouraged,” “opportunities,” “potential,” and
similar terminology. These forward-looking statements reflect
management’s current beliefs and estimates of future economic
circumstances, industry conditions, Company performance, Company
financial results, and Company financial condition and are not
guarantees of future performance.
All forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially.
Factors that could cause actual results to differ materially from
our expectations include without limitation any effects of
disruptions in our operations or a catastrophic event at our
facilities; commodity price fluctuations; the effectiveness or
execution of our strategic plan; our reliance on a limited number
of suppliers; climate change and legal, regulatory or market
measures to address climate change; product recalls or other
product liability claims; 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; regulation and taxation
requirements; tariffs, trade relations, and trade policies;
labeling or warning requirements or limitations on the availability
of our products; anti-corruption laws, trade sanctions and
restrictions; changes in consumer preferences and purchases and our
ability to anticipate or react to those changes; changes in public
opinion about alcohol; our reliance on our distributors to
distribute our branded spirits within their territories; failure to
secure and maintain listings in control states; changes in excise
taxes, incentives and customs duties; class action or other
litigation; the availability and cost of raw materials, product
ingredients, energy resources, or labor; global supply chain
challenges; inflation; the ongoing military conflict between
Ukraine and Russia; our ability to protect our intellectual
property rights and defend against alleged intellectual property
rights infringement claims; our dual-class stock structure and
governing document provisions; our reliance on key information
technology systems, networks, processes, associated sites, or
service providers; acquisitions and potential future acquisitions;
our ability to compete and competitive market conditions; work
disruptions or stoppages; our reliance on key management personnel;
covenants and other provisions in our credit arrangements; interest
rate increases; pandemics or other health crises; and our planned
closure of our Atchison, Kansas distillery. For further information
on these risks and uncertainties and other factors that could
affect the Company’s business, see the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2022 and its Quarterly
Reports on Form 10-Q for the quarters ended March 31, June 30, and
September 30, 2023, as well as the Company’s other SEC filings. The
Company undertakes no obligation to update any forward-looking
statements or information in this press release, except as required
by law.
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
operating income, adjusted income before income taxes, adjusted net
income, adjusted MGP earnings, adjusted EBITDA and adjusted basic
and diluted EPS, 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 operating income,
income before income taxes, net income, net income used in earnings
per common share calculation, and basic and diluted EPS 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
schedules provide a full reconciliation of historical non-GAAP
financial measures to the 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 without
limitation, acquisition related expenses, restructuring and related
expenses, and other items not reflective of the Company's ongoing
operations.
For More Information
Investors & 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 September 30, 2022 |
|
$ |
33,864 |
|
|
|
|
Increase in gross profit - Distilling Solutions segment |
|
|
7,363 |
|
|
22 |
% |
|
Increase in gross profit -
Branded Spirits segment |
|
|
3,973 |
|
|
12 |
|
pp(a) |
Increase in gross profit -
Ingredient Solutions segment |
|
|
3,064 |
|
|
9 |
|
pp |
Increase in advertising and
promotion expenses |
|
|
(2,226 |
) |
|
(7 |
) |
pp |
Increase in SG&A
expenses |
|
|
(3,665 |
) |
|
(11 |
) |
pp |
Impairment of long-lived
assets and other |
|
|
(18,334 |
) |
|
(54 |
) |
pp |
Change in fair value of
contingent consideration |
|
|
(4,200 |
) |
|
(12 |
) |
pp |
Operating income for
the quarter ended September 30, 2023 |
|
$ |
19,839 |
|
|
(41 |
)% |
|
Operating income, year to date versus year to
date |
|
Operating Income |
|
Change |
|
Operating income for the year to date ended September 30, 2022 |
|
$ |
119,250 |
|
|
|
|
Increase in gross profit - Distilling Solutions segment |
|
|
10,356 |
|
|
9 |
% |
|
Increase in gross profit -
Ingredient Solutions segment |
|
|
10,291 |
|
|
9 |
|
pp(a) |
Increase in gross profit -
Branded Spirits segment |
|
|
8,827 |
|
|
7 |
|
pp |
Increase in advertising and
promotion expenses |
|
|
(7,029 |
) |
|
(6 |
) |
pp |
Increase in SG&A
expenses |
|
|
(13,620 |
) |
|
(11 |
) |
pp |
Impairment of long-lived
assets and other |
|
|
(18,334 |
) |
|
(15 |
) |
pp |
Change in fair value of
contingent consideration |
|
|
(4,200 |
) |
|
(4 |
) |
pp |
Operating income for
the year to date ended September 30,
2023 |
|
$ |
105,541 |
|
|
(11 |
)% |
|
(a) Percentage points (“pp”).
MGP INGREDIENTS, INC.EARNINGS PER
COMMON SHARE (“EPS”) ROLLFORWARD
Change in EPS, quarter versus quarter |
|
EPS |
|
Change |
|
Basic EPS for the quarter ended September 30, 2022 |
|
$ |
1.07 |
|
|
|
|
Change in operating income
(b) |
|
|
(0.48 |
) |
|
(45 |
)% |
|
Change in other income (expense), net(b) |
|
|
0.05 |
|
|
5 |
|
pp(a) |
Change in interest expense,
net (b) |
|
|
(0.03 |
) |
|
(3 |
) |
pp |
Change in effective tax
rate |
|
|
(0.02 |
) |
|
(2 |
) |
pp |
Basic EPS for the
quarter ended September 30, 2023 |
|
$ |
0.59 |
|
|
(45 |
)% |
|
Impact of dilutive shares
outstanding |
|
|
(0.01 |
) |
|
(1 |
) |
pp |
Diluted EPS for the
quarter ended September 30, 2023 |
|
$ |
0.58 |
|
|
(46 |
)% |
|
Change in EPS, year to date versus year to
date |
|
EPS |
|
Change |
|
Basic EPS for the year to date ended September 30, 2022 |
|
$ |
3.91 |
|
|
|
|
Change in operating income(b) |
|
|
(0.47 |
) |
|
(12 |
)% |
|
Change in other income
(expense), net(b) |
|
|
0.08 |
|
|
2 |
|
pp(a) |
Change in effective tax
rate |
|
|
(0.08 |
) |
|
(2 |
) |
pp |
Change in weighted average
shares outstanding |
|
|
(0.01 |
) |
|
— |
|
pp |
Basic EPS for the year
to date ended September 30, 2023 |
|
$ |
3.43 |
|
|
(12 |
)% |
|
Impact of dilutive shares
outstanding |
|
|
(0.02 |
) |
|
(1 |
) |
pp |
Diluted EPS for the
year to date ended September 30,
2023 |
|
$ |
3.41 |
|
|
(13 |
)% |
|
(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 Ended September 30, |
|
Quarter versus Quarter Sales Change
Increase/(Decrease) |
|
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Brown goods |
$ |
73,409 |
|
$ |
57,423 |
|
$ |
15,986 |
|
|
28 |
% |
White goods |
|
14,429 |
|
|
20,469 |
|
|
(6,040 |
) |
|
(30 |
) |
Premium beverage alcohol |
|
87,838 |
|
|
77,892 |
|
|
9,946 |
|
|
13 |
|
Industrial alcohol |
|
9,407 |
|
|
10,761 |
|
|
(1,354 |
) |
|
(13 |
) |
Food grade alcohol |
|
97,245 |
|
|
88,653 |
|
|
8,592 |
|
|
10 |
|
Fuel grade alcohol |
|
1,509 |
|
|
3,713 |
|
|
(2,204 |
) |
|
(59 |
) |
Distillers feed and related
co-products |
|
5,746 |
|
|
9,943 |
|
|
(4,197 |
) |
|
(42 |
) |
Warehouse services |
|
7,353 |
|
|
6,335 |
|
|
1,018 |
|
|
16 |
|
Total Distilling Solutions |
$ |
111,853 |
|
$ |
108,644 |
|
$ |
3,209 |
|
|
3 |
% |
|
BRANDED SPIRITS SALES |
|
Quarter Ended September 30, |
|
Quarter versus Quarter Sales Change
Increase/(Decrease) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Ultra premium |
$ |
20,107 |
|
$ |
13,804 |
|
$ |
6,303 |
|
|
46 |
% |
Super premium |
|
3,637 |
|
|
3,350 |
|
|
287 |
|
|
9 |
|
Premium |
|
7,099 |
|
|
6,013 |
|
|
1,086 |
|
|
18 |
|
Premium plus |
|
30,843 |
|
|
23,167 |
|
|
7,676 |
|
|
33 |
|
Mid |
|
17,650 |
|
|
20,834 |
|
|
(3,184 |
) |
|
(15 |
) |
Value |
|
11,049 |
|
|
12,097 |
|
|
(1,048 |
) |
|
(9 |
) |
Other |
|
7,277 |
|
|
6,663 |
|
|
614 |
|
|
9 |
|
Total Branded Spirits |
$ |
66,819 |
|
$ |
62,761 |
|
$ |
4,058 |
|
|
6 |
% |
|
INGREDIENT SOLUTIONS SALES |
|
Quarter Ended September 30, |
|
Quarter versus Quarter Sales Change Increase /
(Decrease) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Specialty wheat starches |
$ |
17,196 |
|
$ |
16,241 |
|
$ |
955 |
|
6 |
% |
Specialty wheat proteins |
|
11,440 |
|
|
9,697 |
|
|
1,743 |
|
18 |
|
Commodity wheat starches |
|
4,226 |
|
|
3,803 |
|
|
423 |
|
11 |
|
Commodity wheat proteins |
|
90 |
|
|
— |
|
|
90 |
|
N/A |
Total Ingredient Solutions |
$ |
32,952 |
|
$ |
29,741 |
|
$ |
3,211 |
|
11 |
% |
|
|
|
|
|
|
|
|
MGP INGREDIENTS, INC.SALES BY OPERATING
SEGMENT
|
DISTILLING SOLUTIONS SALES |
|
Year to Date Ended September 30, |
|
Year to Date versus Year to Date Sales Change
Increase/(Decrease) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Brown goods |
$ |
214,857 |
|
$ |
175,899 |
|
$ |
38,958 |
|
|
22 |
% |
White goods |
|
47,199 |
|
|
57,996 |
|
|
(10,797 |
) |
|
(19 |
) |
Premium beverage alcohol |
|
262,056 |
|
|
233,895 |
|
|
28,161 |
|
|
12 |
|
Industrial alcohol |
|
29,911 |
|
|
35,141 |
|
|
(5,230 |
) |
|
(15 |
) |
Food grade alcohol |
|
291,967 |
|
|
269,036 |
|
|
22,931 |
|
|
9 |
|
Fuel grade alcohol |
|
5,963 |
|
|
10,307 |
|
|
(4,344 |
) |
|
(42 |
) |
Distillers feed and related
co-products |
|
23,053 |
|
|
30,127 |
|
|
(7,074 |
) |
|
(23 |
) |
Warehouse services |
|
20,958 |
|
|
17,821 |
|
|
3,137 |
|
|
18 |
|
Total Distilling Solutions |
$ |
341,941 |
|
$ |
327,291 |
|
$ |
14,650 |
|
|
4 |
% |
|
BRANDED SPIRITS SALES |
|
Year to Date Ended September 30, |
|
Year to Date versus Year to Date Sales Change
Increase/(Decrease) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Ultra premium |
$ |
43,594 |
|
$ |
35,836 |
|
$ |
7,758 |
|
|
22 |
% |
Super premium |
|
9,614 |
|
|
9,522 |
|
|
92 |
|
|
1 |
|
Premium |
|
20,144 |
|
|
17,928 |
|
|
2,216 |
|
|
12 |
|
Premium plus |
|
73,352 |
|
|
63,286 |
|
|
10,066 |
|
|
16 |
|
Mid |
|
55,575 |
|
|
63,408 |
|
|
(7,833 |
) |
|
(12 |
) |
Value |
|
36,048 |
|
|
36,304 |
|
|
(256 |
) |
|
(1 |
) |
Other |
|
16,343 |
|
|
14,080 |
|
|
2,263 |
|
|
16 |
|
Total Branded Spirits |
$ |
181,318 |
|
$ |
177,078 |
|
$ |
4,240 |
|
|
2 |
% |
|
INGREDIENT SOLUTIONS SALES |
|
Year to Date Ended September 30, |
|
Year to Date versus Year to Date Sales Change
Increase/(Decrease) |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
Specialty wheat starches |
$ |
48,977 |
|
$ |
47,445 |
|
$ |
1,532 |
|
3 |
% |
Specialty wheat proteins |
|
35,918 |
|
|
29,225 |
|
|
6,693 |
|
23 |
|
Commodity wheat starches |
|
12,870 |
|
|
10,286 |
|
|
2,584 |
|
25 |
|
Commodity wheat proteins |
|
611 |
|
|
38 |
|
|
573 |
|
1,508 |
|
Total Ingredient Solutions |
$ |
98,376 |
|
$ |
86,994 |
|
$ |
11,382 |
|
13 |
% |
|
|
|
|
|
|
|
|
MGP INGREDIENTS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)(Dollars in thousands, except share and
per share amounts)
|
|
Quarter Ended September 30, |
|
Year to Date Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Sales |
|
$ |
211,624 |
|
|
$ |
201,146 |
|
|
$ |
621,635 |
|
|
$ |
591,363 |
|
Cost of sales |
|
|
138,176 |
|
|
|
142,098 |
|
|
|
402,068 |
|
|
|
401,270 |
|
Gross profit |
|
|
73,448 |
|
|
|
59,048 |
|
|
|
219,567 |
|
|
|
190,093 |
|
|
|
|
|
|
|
|
|
|
Advertising and promotion
expenses |
|
|
9,505 |
|
|
|
7,279 |
|
|
|
25,877 |
|
|
|
18,848 |
|
Selling, general, and
administrative expenses |
|
|
21,570 |
|
|
|
17,905 |
|
|
|
65,615 |
|
|
|
51,995 |
|
Impairment of long-lived
assets and other |
|
|
18,334 |
|
|
|
— |
|
|
|
18,334 |
|
|
|
— |
|
Change in fair value of
contingent consideration |
|
|
4,200 |
|
|
|
— |
|
|
|
4,200 |
|
|
|
— |
|
Operating income |
|
|
19,839 |
|
|
|
33,864 |
|
|
|
105,541 |
|
|
|
119,250 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(2,353 |
) |
|
|
(1,350 |
) |
|
|
(4,630 |
) |
|
|
(4,491 |
) |
Other income (expense),
net |
|
|
(25 |
) |
|
|
(1,353 |
) |
|
|
5 |
|
|
|
(2,361 |
) |
Income before income taxes |
|
|
17,461 |
|
|
|
31,161 |
|
|
|
100,916 |
|
|
|
112,398 |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
4,373 |
|
|
|
7,533 |
|
|
|
24,832 |
|
|
|
26,037 |
|
Net income |
|
|
13,088 |
|
|
|
23,628 |
|
|
|
76,084 |
|
|
|
86,361 |
|
|
|
|
|
|
|
|
|
|
Net loss attributable to
noncontrolling interest |
|
|
123 |
|
|
|
180 |
|
|
|
324 |
|
|
|
444 |
|
Net income attributable to MGP Ingredients,
Inc. |
|
|
13,211 |
|
|
|
23,808 |
|
|
|
76,408 |
|
|
|
86,805 |
|
|
|
|
|
|
|
|
|
|
Income attributable to
participating securities |
|
|
(129 |
) |
|
|
(188 |
) |
|
|
(760 |
) |
|
|
(688 |
) |
Net income used in earnings per common share
calculation |
|
$ |
13,082 |
|
|
$ |
23,620 |
|
|
$ |
75,648 |
|
|
$ |
86,117 |
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares |
|
|
|
|
|
|
|
|
Basic |
|
|
22,066,159 |
|
|
|
22,008,381 |
|
|
|
22,056,270 |
|
|
|
22,000,026 |
|
Diluted |
|
|
22,381,516 |
|
|
|
22,228,814 |
|
|
|
22,207,031 |
|
|
|
22,000,026 |
|
|
|
|
|
|
|
|
|
|
Earnings per common
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.59 |
|
|
$ |
1.07 |
|
|
$ |
3.43 |
|
|
$ |
3.91 |
|
Diluted |
|
$ |
0.58 |
|
|
$ |
1.06 |
|
|
$ |
3.41 |
|
|
$ |
3.91 |
|
|
MGP INGREDIENTS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)(Dollars in
thousands)
|
September 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
28,030 |
|
|
$ |
47,889 |
|
Receivables, net |
|
126,692 |
|
|
|
109,267 |
|
Inventory |
|
342,401 |
|
|
|
289,722 |
|
Prepaid expenses |
|
4,600 |
|
|
|
2,957 |
|
Refundable income taxes |
|
2,193 |
|
|
|
4,327 |
|
Total Current Assets |
|
503,916 |
|
|
|
454,162 |
|
|
|
|
|
Property, plant, and
equipment |
|
465,746 |
|
|
|
450,800 |
|
Less accumulated depreciation
and amortization |
|
(222,497 |
) |
|
|
(215,168 |
) |
Property, Plant, and Equipment, net |
|
243,249 |
|
|
|
235,632 |
|
Operating lease right-of-use
assets, net |
|
15,551 |
|
|
|
15,042 |
|
Investment in joint
ventures |
|
5,343 |
|
|
|
5,534 |
|
Intangible assets, net |
|
272,520 |
|
|
|
216,768 |
|
Goodwill |
|
321,544 |
|
|
|
226,294 |
|
Other assets |
|
4,242 |
|
|
|
4,779 |
|
TOTAL ASSETS |
$ |
1,366,365 |
|
|
$ |
1,158,211 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Current maturities of long-term debt |
$ |
6,400 |
|
|
$ |
5,600 |
|
Accounts payable |
|
54,403 |
|
|
|
66,432 |
|
Federal and state excise taxes payable |
|
2,719 |
|
|
|
4,627 |
|
Accrued expenses and other |
|
26,586 |
|
|
|
28,716 |
|
Total Current Liabilities |
|
90,108 |
|
|
|
105,375 |
|
|
|
|
|
Long-term debt, less current
maturities |
|
114,812 |
|
|
|
29,510 |
|
Convertible senior notes |
|
195,465 |
|
|
|
195,225 |
|
Long-term operating lease
liabilities |
|
12,606 |
|
|
|
11,622 |
|
Contingent consideration |
|
66,300 |
|
|
|
— |
|
Other noncurrent
liabilities |
|
3,888 |
|
|
|
3,723 |
|
Deferred income taxes |
|
65,000 |
|
|
|
67,112 |
|
Total Liabilities |
|
548,179 |
|
|
|
412,567 |
|
Total equity |
|
818,186 |
|
|
|
745,644 |
|
TOTAL LIABILITIES AND TOTAL EQUITY |
$ |
1,366,365 |
|
|
$ |
1,158,211 |
|
|
MGP INGREDIENTS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(Dollars in
thousands)
|
|
Year to Date Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
Cash Flows from Operating
Activities |
|
|
|
|
Net income |
|
$ |
76,084 |
|
|
$ |
86,361 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
16,272 |
|
|
|
16,257 |
|
Impairment of long-lived assets and other |
|
|
18,334 |
|
|
|
— |
|
Share-based compensation |
|
|
5,651 |
|
|
|
3,086 |
|
Equity method investment loss |
|
|
191 |
|
|
|
1,036 |
|
Deferred income taxes, including change in valuation allowance |
|
|
(2,112 |
) |
|
|
(302 |
) |
Change in fair value of contingent consideration |
|
|
4,200 |
|
|
|
— |
|
Other, net |
|
|
376 |
|
|
|
426 |
|
Changes in operating assets and liabilities, net of effects of
acquisition: |
|
|
|
|
Receivables, net |
|
|
(14,980 |
) |
|
|
(15,582 |
) |
Inventory |
|
|
(42,015 |
) |
|
|
(30,599 |
) |
Prepaid expenses |
|
|
(1,517 |
) |
|
|
1,165 |
|
Income taxes payable (refundable) |
|
|
2,134 |
|
|
|
(1,006 |
) |
Accounts payable |
|
|
(10,069 |
) |
|
|
12,613 |
|
Accrued expenses and other |
|
|
(2,471 |
) |
|
|
1,220 |
|
Federal and state excise taxes payable |
|
|
(1,908 |
) |
|
|
(2,279 |
) |
Other, net |
|
|
435 |
|
|
|
(143 |
) |
Net cash provided by operating
activities |
|
|
48,605 |
|
|
|
72,253 |
|
|
|
|
|
|
Cash Flows from Investing
Activities |
|
|
|
|
Additions to property, plant, and equipment |
|
|
(42,062 |
) |
|
|
(29,217 |
) |
Purchase of business, net of cash acquired |
|
|
(103,712 |
) |
|
|
— |
|
Contributions to equity method investment |
|
|
— |
|
|
|
(2,232 |
) |
Other, net |
|
|
(916 |
) |
|
|
(315 |
) |
Net cash used in investing
activities |
|
|
(146,690 |
) |
|
|
(31,764 |
) |
|
|
|
|
|
Cash Flows from Financing
Activities |
|
|
|
|
Payment of dividends and dividend equivalents |
|
|
(8,006 |
) |
|
|
(7,984 |
) |
Purchase of treasury stock |
|
|
(801 |
) |
|
|
(714 |
) |
Proceeds from long-term debt |
|
|
105,000 |
|
|
|
— |
|
Principal payments on long-term debt |
|
|
(18,000 |
) |
|
|
(2,603 |
) |
Net cash provided by (used in) financing
activities |
|
|
78,193 |
|
|
|
(11,301 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
33 |
|
|
|
(82 |
) |
Increase (decrease) in cash
and cash equivalents |
|
|
(19,859 |
) |
|
|
29,106 |
|
Cash and cash equivalents,
beginning of period |
|
|
47,889 |
|
|
|
21,568 |
|
Cash and cash equivalents, end
of period |
|
$ |
28,030 |
|
|
$ |
50,674 |
|
|
MGP INGREDIENTS, INC.RECONCILIATION OF
SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES
(UNAUDITED)(in thousands)
|
Quarter Ended September 30, 2023 |
|
Operating Income |
|
Income before Income Taxes |
|
Net Income(b) |
|
MGP Earnings(a) |
|
Basic EPS |
|
Diluted EPS |
Reported GAAP Results |
$ |
19,839 |
|
$ |
17,461 |
|
$ |
13,088 |
|
$ |
13,082 |
|
$ |
0.59 |
|
$ |
0.58 |
Adjusted to remove: |
|
|
|
|
|
|
|
|
|
|
|
Impairment of long-lived assets and other (c) |
|
18,334 |
|
|
18,334 |
|
|
13,750 |
|
|
13,750 |
|
|
0.62 |
|
|
0.61 |
Fair value of contingent consideration(d) |
|
4,200 |
|
|
4,200 |
|
|
3,150 |
|
|
3,150 |
|
|
0.14 |
|
|
0.14 |
Business acquisition costs (e) |
|
314 |
|
|
314 |
|
|
235 |
|
|
235 |
|
|
0.01 |
|
|
0.01 |
Adjusted Non-GAAP
results |
$ |
42,687 |
|
$ |
40,309 |
|
$ |
30,223 |
|
$ |
30,217 |
|
$ |
1.36 |
|
$ |
1.34 |
|
Quarter Ended September 30, 2022 |
|
Operating Income |
|
Income before Income Taxes |
|
Net Income |
|
MGP Earnings(a) |
|
Basic EPS |
|
Diluted EPS |
Reported GAAP Results |
$ |
33,864 |
|
$ |
31,161 |
|
$ |
23,628 |
|
$ |
23,620 |
|
$ |
1.07 |
|
$ |
1.06 |
Adjusted to remove: |
|
|
|
|
|
|
|
|
|
|
|
No adjustments for the period |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Adjusted Non-GAAP
results |
$ |
33,864 |
|
$ |
31,161 |
|
$ |
23,628 |
|
$ |
23,620 |
|
$ |
1.07 |
|
$ |
1.06 |
|
Year to Date Ended September 30, 2023 |
|
Operating Income |
|
Income before Income Taxes |
|
Net Income(b) |
|
MGP Earnings(a) |
|
Basic EPS |
|
Diluted EPS |
Reported GAAP Results |
$ |
105,541 |
|
$ |
100,916 |
|
$ |
76,084 |
|
$ |
75,648 |
|
$ |
3.43 |
|
$ |
3.41 |
Adjusted to remove: |
|
|
|
|
|
|
|
|
|
|
|
Impairment of long-lived assets and other (c) |
|
18,334 |
|
|
18,334 |
|
|
13,824 |
|
|
13,824 |
|
|
0.63 |
|
|
0.62 |
Fair value of contingent consideration(d) |
|
4,200 |
|
|
4,200 |
|
|
3,167 |
|
|
3,167 |
|
|
0.14 |
|
|
0.14 |
Business acquisition costs (e) |
|
1,814 |
|
|
1,814 |
|
|
1,368 |
|
|
1,368 |
|
|
0.06 |
|
|
0.06 |
Adjusted Non-GAAP
results |
$ |
129,889 |
|
$ |
125,264 |
|
$ |
94,443 |
|
$ |
94,007 |
|
$ |
4.26 |
|
$ |
4.23 |
|
Year to Date Ended September 30, 2022 |
|
Operating Income |
|
Income before Income Taxes |
|
Net Income |
|
MGP Earnings(a) |
|
Basic and Diluted EPS |
Reported GAAP Results |
$ |
119,250 |
|
$ |
112,398 |
|
$ |
86,361 |
|
$ |
86,117 |
|
$ |
3.91 |
Adjusted to remove: |
|
|
|
|
|
|
|
|
|
No adjustments for the period |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Adjusted Non-GAAP
results |
$ |
119,250 |
|
$ |
112,398 |
|
$ |
86,361 |
|
$ |
86,117 |
|
$ |
3.91 |
(a) MGP Earnings is defined as "Net income used in Earnings Per
Common Share calculation." (b) The tax rate used for non-GAAP items
for the quarter and year to date ended September 30, 2023 was 25.0%
and 24.6%, respectively. (c) The impairment of long-lived assets
and other relates to the planned closure of the Atchison
Distillery, which included $17,112 of impairment of assets as well
as $1,222 of expenses related to severance costs, contract
termination fees, and consulting fees. Impairment of long-lived
assets and other are included in the Consolidated Statement of
Income as a component of operating income and relates to the
Distilling Solutions segment. (d) Fair value of contingent
consideration relates to the quarterly adjustment of the contingent
consideration related to the acquisition of Penelope Bourbon LLC.
It is included in the Consolidated Statement of Income as a
component of operating income and relates to the Branded Spirits
segment.(e) Business acquisition costs are included in the
Consolidated Statement of Income within the selling, general, and
administrative line item and include transaction and integration
costs associated with the acquisition of Penelope Bourbon LLC.
MGP INGREDIENTS, INC.RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA (UNAUDITED)(in
thousands)
|
Quarter Ended September 30, |
|
Year to Date Ended September 30, |
|
2023 |
|
|
2022 |
|
2023 |
|
2022 |
Net Income |
$ |
13,088 |
|
|
$ |
23,628 |
|
$ |
76,084 |
|
$ |
86,361 |
Interest expense |
|
2,353 |
|
|
|
1,350 |
|
|
4,630 |
|
|
4,491 |
Income tax expense |
|
4,373 |
|
|
|
7,533 |
|
|
24,832 |
|
|
26,037 |
Depreciation and amortization |
|
5,782 |
|
|
|
5,333 |
|
|
16,272 |
|
|
16,257 |
Equity method investment loss (income) |
|
(388 |
) |
|
|
856 |
|
|
191 |
|
|
1,036 |
Impairment of long-lived assets and other |
|
18,334 |
|
|
|
— |
|
|
18,334 |
|
|
— |
Fair value of contingent consideration |
|
4,200 |
|
|
|
— |
|
|
4,200 |
|
|
— |
Business acquisition costs |
|
314 |
|
|
|
— |
|
|
1,814 |
|
|
— |
Adjusted EBITDA |
$ |
48,056 |
|
|
$ |
38,700 |
|
$ |
146,357 |
|
$ |
134,182 |
|
The non-GAAP adjusted EBITDA measure is defined as earnings
before interest expense, income tax expense, depreciation and
amortization, equity method investment loss (income), impairment of
long-lived assets and other, fair value of contingent
consideration, and business acquisition costs. See "Reconciliation
of selected GAAP measure to adjusted non-GAAP measures" for further
details.
MGP INGREDIENTS, INC.DILUTIVE SHARES
OUTSTANDING CALCULATION (UNAUDITED)
|
Quarter Ended September 30, |
|
Year to Date Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Principal amount of the
bonds |
$ |
201,250,000 |
|
|
$ |
201,250,000 |
|
|
$ |
201,250,000 |
|
|
$ |
201,250,000 |
|
Par value |
$ |
1,000 |
|
|
$ |
1,000 |
|
|
$ |
1,000 |
|
|
$ |
1,000 |
|
Number of bonds outstanding
(a) |
|
201,250 |
|
|
|
201,250 |
|
|
|
201,250 |
|
|
|
201,250 |
|
|
|
|
|
|
|
|
|
Initial conversion rate |
|
10.3911 |
|
|
|
10.3911 |
|
|
|
10.3911 |
|
|
|
10.3911 |
|
Conversion price |
$ |
96.23620 |
|
|
$ |
96.23620 |
|
|
$ |
96.23620 |
|
|
$ |
96.23620 |
|
|
|
|
|
|
|
|
|
Average share price (b) |
$ |
113.32587 |
|
|
$ |
107.44873 |
|
|
$ |
103.71316 |
|
|
$ |
94.08909 |
|
Impact of conversion (c) |
$ |
236,988,065 |
|
|
$ |
224,697,738 |
|
|
$ |
216,885,881 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Cash paid for principal |
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
Conversion
premium |
$ |
35,738,065 |
|
|
$ |
23,447,738 |
|
|
$ |
15,635,881 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Average share price |
$ |
113.32587 |
|
|
$ |
107.44873 |
|
|
$ |
103.71316 |
|
|
$ |
94.08909 |
|
Conversion premium in
shares (d) (e) |
|
315,357 |
|
|
|
218,223 |
|
|
|
150,761 |
|
|
|
— |
|
(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. (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.
MGP INGREDIENTS, INC.Purchase
Accounting - Summary of Preliminary Fair Value Step
Up(UNAUDITED)(in thousands)
The acquisition of Penelope Bourbon LLC, which closed on June 1,
2023, was accounted for as a business combination in accordance
with Accounting Standard Codification 805, Business Combinations,
and as such, assets acquired, liabilities assumed, and
consideration transferred were recorded at their estimated fair
values on the acquisition date. The fair value of the assets and
liabilities are based upon a preliminary assessment of fair value
and may change as valuations for certain tangible assets,
intangible assets, and contingent liabilities are finalized and the
associated income tax impacts are determined. The Company expects
to finalize the purchase price allocation as soon as practicable,
but no longer than one year from the acquisition date. The table
below reflects the summary for distributor relationships
preliminary purchase price accounting step up to fair value, the
related amortization period, and the Income Statement caption
within which the adjustment is included.
|
|
|
|
|
|
|
Income Statement Impact |
|
Step Up Value |
|
Amortization Period |
|
Income Statement Caption |
|
Quarter Ended September 30, 2023 |
|
Year to Date Ended September 30, 2023 |
Definite-lived intangible asset - Distributor relationships |
$ |
23,700 |
|
20 years |
|
SG&A |
|
$ |
303 |
|
$ |
395 |
|
MGP INGREDIENTS, INC.Impact of the
Planned Closure of the Atchison Distillery Segment
Operating Results and Pro-Forma ResultsYear to
Date Ended September 30, 2023(UNAUDITED) (in
thousands)
|
Distilling Solutions |
|
|
Year to Date Ended September 30,
2023 |
|
Increase/(Decrease) |
|
|
As Reported (a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
Brown Goods |
$ |
214,857 |
|
|
$ |
214,857 |
|
|
$ |
— |
|
|
— |
% |
|
White Goods |
|
47,199 |
|
|
|
11,378 |
|
|
|
(35,821 |
) |
|
(76 |
) |
|
Premium beverage alcohol |
|
262,056 |
|
|
|
226,235 |
|
|
|
(35,821 |
) |
|
(14 |
) |
|
Industrial alcohol |
|
29,911 |
|
|
|
— |
|
|
|
(29,911 |
) |
|
(100 |
) |
|
Food grade alcohol |
|
291,967 |
|
|
|
226,235 |
|
|
|
(65,732 |
) |
|
(23 |
) |
|
Fuel grade alcohol |
|
5,963 |
|
|
|
16 |
|
|
|
(5,947 |
) |
|
(100 |
) |
|
Distillers feed and related
co-products |
|
23,053 |
|
|
|
7,749 |
|
|
|
(15,304 |
) |
|
(66 |
) |
|
Warehouse services |
|
20,958 |
|
|
|
20,958 |
|
|
|
— |
|
|
— |
|
|
Total Sales |
$ |
341,941 |
|
|
$ |
254,958 |
|
|
$ |
(86,983 |
) |
|
(25 |
)% |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
$ |
104,986 |
|
|
$ |
112,547 |
|
|
$ |
7,561 |
|
|
7 |
% |
|
Gross margin
% |
|
30.7 |
% |
|
|
44.1 |
% |
|
|
|
13.4 |
|
pp(c) |
|
Ingredient Solutions |
|
|
Year to Date Ended September 30,
2023 |
|
Increase/(Decrease) |
|
|
As Reported (a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
Specialty wheat starches |
$ |
48,977 |
|
|
$ |
48,977 |
|
|
$ |
— |
|
|
— |
% |
|
Specialty wheat proteins |
|
35,918 |
|
|
|
35,918 |
|
|
|
— |
|
|
— |
|
|
Commodity wheat starches |
|
12,870 |
|
|
|
12,870 |
|
|
|
— |
|
|
— |
|
|
Commodity wheat proteins |
|
611 |
|
|
|
611 |
|
|
|
— |
|
|
— |
|
|
Total Sales |
$ |
98,376 |
|
|
$ |
98,376 |
|
|
$ |
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
$ |
34,945 |
|
|
$ |
29,812 |
|
|
$ |
(5,133 |
) |
(d) |
(15 |
)% |
|
Gross margin
% |
|
35.5 |
% |
|
|
30.3 |
% |
|
|
|
(5.2 |
) |
pp(c) |
|
Consolidated |
|
|
Year to Date Ended September 30,
2023 |
|
Increase/(Decrease) |
|
|
As Reported (a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
Sales |
$ |
621,635 |
|
|
$ |
534,652 |
|
|
$ |
(86,983 |
) |
|
(14 |
)% |
|
Gross
profit |
$ |
219,567 |
|
|
$ |
221,995 |
|
|
$ |
2,428 |
|
|
1 |
% |
|
Gross margin
% |
|
35.3 |
% |
|
|
41.5 |
% |
|
|
|
6.2 |
|
pp(c) |
(a) Represents actual results of the Company for the year to
date ended September 30, 2023, as reported in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
2023.(b) Represents the Company's results for the year to date
ended September 30, 2023 excluding results associated with the
Company's Atchison, Kansas distillery. These are pro-forma
unaudited financial results and are preliminary. In some
circumstances, white goods, industrial alcohol, fuel grade alcohol,
and at times certain co-products are produced at the Company's
Lawrenceburg, Indiana distillery. The pro-forma financial results
assume the loss of the waste starch slurry credit and no gain or
loss on the disposal. The results of the Branded Spirits segment
for the year to date ended September 30, 2023 would not have been
impacted by a closure of the Atchison, Kansas distillery.(c)
Percentage points (“pp”).(d) The reduction in gross profit for the
Ingredient Solutions segment is the result of increased cost of
goods sold from no longer receiving an intercompany credit for the
waste starch slurry by-product purchased by the adjoined Atchison,
Kansas distillery. The value of the intercompany credit is derived
from the value of corn which has fluctuated over time.
MGP INGREDIENTS, INC.Impact of the
Planned Closure of the Atchison Distillery Segment
Operating Results and Pro-Forma ResultsYear Ended
December 31, 2022(UNAUDITED) (in thousands)
|
Distilling Solutions |
|
|
Year Ended December 31, 2022 |
|
Increase/(Decrease) |
|
|
As Reported (a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
Brown Goods |
$ |
229,523 |
|
|
$ |
229,523 |
|
|
$ |
— |
|
|
— |
% |
|
White Goods |
|
74,510 |
|
|
|
24,110 |
|
|
|
(50,400 |
) |
|
(68 |
) |
|
Premium beverage alcohol |
|
304,033 |
|
|
|
253,633 |
|
|
|
(50,400 |
) |
|
(17 |
) |
|
Industrial alcohol |
|
46,812 |
|
|
|
907 |
|
|
|
(45,905 |
) |
|
(98 |
) |
|
Food grade alcohol |
|
350,845 |
|
|
|
254,540 |
|
|
|
(96,305 |
) |
|
(27 |
) |
|
Fuel grade alcohol |
|
13,681 |
|
|
|
41 |
|
|
|
(13,640 |
) |
|
(100 |
) |
|
Distillers feed and related
co-products |
|
40,354 |
|
|
|
9,477 |
|
|
|
(30,877 |
) |
|
(77 |
) |
|
Warehouse services |
|
23,598 |
|
|
|
23,598 |
|
|
|
— |
|
|
— |
|
|
Total Sales |
$ |
428,478 |
|
|
$ |
287,656 |
|
|
$ |
(140,822 |
) |
|
(33 |
)% |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
$ |
126,282 |
|
|
$ |
132,388 |
|
|
$ |
6,106 |
|
|
5 |
% |
|
Gross margin
% |
|
29.5 |
% |
|
|
46.0 |
% |
|
|
|
16.5 |
|
pp(c) |
|
Ingredient Solutions |
|
|
Year Ended December 31, 2022 |
|
Increase/(Decrease) |
|
|
As Reported (a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
Specialty wheat starches |
$ |
62,567 |
|
|
$ |
62,567 |
|
|
$ |
— |
|
|
— |
% |
|
Specialty wheat proteins |
|
39,313 |
|
|
|
39,313 |
|
|
|
— |
|
|
— |
|
|
Commodity wheat starches |
|
14,023 |
|
|
|
14,023 |
|
|
|
— |
|
|
— |
|
|
Commodity wheat proteins |
|
38 |
|
|
|
38 |
|
|
|
— |
|
|
— |
|
|
Total Sales |
$ |
115,941 |
|
|
$ |
115,941 |
|
|
$ |
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
$ |
31,503 |
|
|
$ |
26,017 |
|
|
$ |
(5,486 |
) |
(d) |
(17 |
)% |
|
Gross margin
% |
|
27.2 |
% |
|
|
22.4 |
% |
|
|
|
(4.8 |
) |
pp(c) |
|
Consolidated |
|
|
Year Ended December 31, 2022 |
|
Increase/(Decrease) |
|
|
As Reported (a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
Sales |
$ |
782,358 |
|
|
$ |
641,536 |
|
|
$ |
(140,822 |
) |
|
(18 |
)% |
|
Gross profit |
$ |
253,306 |
|
|
$ |
253,926 |
|
|
$ |
620 |
|
|
— |
% |
|
Gross margin
% |
|
32.4 |
% |
|
|
39.6 |
% |
|
|
|
7.2 |
|
pp(c) |
(a) Represents actual results of the Company for the year ended
December 31, 2022, as reported in the Company's Annual Report on
Form 10-K for the year ended December 31, 2022.(b) Represents the
Company's results for the year ended December 31, 2022 excluding
results associated with the Company's Atchison, Kansas distillery.
These are pro-forma unaudited financial results and are
preliminary. In some circumstances, white goods, industrial
alcohol, fuel grade alcohol, and at times certain co-products are
produced at the Company's Lawrenceburg, Indiana distillery. The
pro-forma financial results assume the loss of the waste starch
slurry credit and no gain or loss on the disposal. The results of
the Branded Spirits segment for the year ended December 31, 2022
would not have been impacted by a closure of the Atchison, Kansas
distillery.(c) Percentage points (“pp”).(d) The reduction in gross
profit for the Ingredient Solutions segment is the result of
increased cost of goods sold from no longer receiving an
intercompany credit for the waste starch slurry by-product
purchased by the adjoined Atchison, Kansas distillery. The value of
the intercompany credit is derived from the value of corn which has
fluctuated over time.
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