MGP Ingredients Reports Third Quarter 2024 Results
Financial results and full-year guidance in line with recently announced preliminary update
“Our third quarter performance was in line with the preliminary results we provided on
He added, “We are pleased with our progress towards becoming a premier branded spirits company. Though further inventory tightening is a headwind in the near term, we expect our continued investments behind our brands portfolio to deliver attractive organic growth. In addition, we expect our Ingredient Solutions segment to have a stronger 2025 despite current transitory headwinds.”
2024 third quarter financial highlights compared to 2023 third quarter:
-
Consolidated sales decreased 24% to
$161.5 million . Excluding the impact of theAtchison distillery, consolidated sales decreased by 14%. -
Net income increased 82% to
$23.9 million . Adjusted net income decreased 5% to$28.8 million . Net income margin increased 860 basis points to 14.8%. Adjusted net income margin increased by 350 basis points to 17.8%. -
Basic earnings per common share (“EPS”) increased to
$1.07 per share from$0.59 per share. Adjusted basic EPS decreased 5% to$1.29 per share from$1.36 per share. -
Consolidated gross profit decreased 10% to
$65.8 million . Gross margin increased by 610 basis points to 40.8%. Excluding the impact of theAtchison distillery, adjusted gross margin increased 30 basis points to 40.8% largely due to higherBranded Spirits margins. -
Adjusted EBITDA decreased 9% to
$45.7 million . Adjusted EBITDA margin increased by 460 basis points to 28.3%. -
Capital expenditures were
$44 million year-to-date. -
Net debt leverage ratio stands at approximately 1.3x as of
September 30, 2024 .
Consolidated Results
In the third quarter 2024, excluding the impact of the
Distilling Solutions
For the third quarter 2024, Distilling Solutions segment sales decreased 36% to
Ingredient Solutions
Ingredient Solutions segment sales decreased 18% to
Additional Highlights
Advertising and promotion expenses increased 1% to
Corporate selling, general, and administrative (“SG&A”) expenses for the third quarter 2024 decreased
During the third quarter 2024, the fair value of the contingent consideration liability related to the Penelope acquisition increased by
The corporate effective tax rate for the third quarter 2024 was 24.0%, compared with 25.0% from the year ago period.
2024 Financial Outlook
MGP reaffirmed its recently revised consolidated guidance for fiscal 2024:
-
Sales in the range of
$695 million to$705 million , following the closure of theAtchison distillery inDecember 2023 . -
Adjusted EBITDA in the range of
$196 million to$200 million , inclusive of the add back of share-based compensation expense. -
Adjusted basic EPS in the
$5.55 to$5.65 range, with approximately 22.1 million basic weighted average shares outstanding at the year end and effective tax rate of approximately 24%. -
Full year capital expenditures of
$78 million .
As is customary, we will share our 2025 financial outlook with our fourth quarter 2024 earnings release; however, we will provide additional commentary on our 2025 outlook in our conference call discussing our third quarter results.
Conference Call and Webcast Information
About
As one of the largest distillers in the
MGP’s branded spirits portfolio covers a wide spectrum of brands in every segment, including iconic brands from
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 Statements
This 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 plans of
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 changes in consumer preferences and purchases and our ability to anticipate or react to those changes; our ability to compete effectively; damage to our reputation or that of any of our key customers or their brands; failure to introduce successful new brands and products or have effective marketing or advertising; changes in public opinion about alcohol or our products; our reliance on our distributors to distribute our branded spirits; our reliance on fewer, more profitable customer relationships; interruptions in our operations or a catastrophic event at our facilities; decisions concerning the quantity of maturing stock of our aged distillate; warehouse expansion issues; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; our closure of our
Non-GAAP Financial Measures
In addition to reporting financial information in accordance with
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
||||||||||||||||
(Dollars in thousands, except share and per share amounts) |
||||||||||||||||
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Sales |
|
$ |
161,461 |
|
|
$ |
211,624 |
|
|
$ |
522,829 |
|
|
$ |
621,635 |
|
Cost of sales |
|
|
95,646 |
|
|
|
138,176 |
|
|
|
310,987 |
|
|
|
402,068 |
|
Gross profit |
|
|
65,815 |
|
|
|
73,448 |
|
|
|
211,842 |
|
|
|
219,567 |
|
|
|
|
|
|
|
|
|
|
||||||||
Advertising and promotion expenses |
|
|
9,647 |
|
|
|
9,505 |
|
|
|
29,995 |
|
|
|
25,877 |
|
Selling, general, and administrative expenses |
|
|
17,204 |
|
|
|
21,570 |
|
|
|
60,942 |
|
|
|
65,615 |
|
Impairment of long-lived assets and other |
|
|
— |
|
|
|
18,334 |
|
|
|
137 |
|
|
|
18,334 |
|
Change in fair value of contingent consideration |
|
|
6,400 |
|
|
|
4,200 |
|
|
|
15,900 |
|
|
|
4,200 |
|
Operating income |
|
|
32,564 |
|
|
|
19,839 |
|
|
|
104,868 |
|
|
|
105,541 |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
(2,174 |
) |
|
|
(2,353 |
) |
|
|
(6,398 |
) |
|
|
(4,630 |
) |
Other income (expense), net |
|
|
1,026 |
|
|
|
(25 |
) |
|
|
1,917 |
|
|
|
5 |
|
Income before income taxes |
|
|
31,416 |
|
|
|
17,461 |
|
|
|
100,387 |
|
|
|
100,916 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income tax expense |
|
|
7,554 |
|
|
|
4,373 |
|
|
|
23,924 |
|
|
|
24,832 |
|
Net income |
|
|
23,862 |
|
|
|
13,088 |
|
|
|
76,463 |
|
|
|
76,084 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to noncontrolling interest |
|
|
43 |
|
|
|
123 |
|
|
|
162 |
|
|
|
324 |
|
Net income attributable to |
|
|
23,905 |
|
|
|
13,211 |
|
|
|
76,625 |
|
|
|
76,408 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income attributable to participating securities |
|
|
(257 |
) |
|
|
(129 |
) |
|
|
(828 |
) |
|
|
(760 |
) |
Net income used in earnings per common share calculation |
|
$ |
23,648 |
|
|
$ |
13,082 |
|
|
$ |
75,797 |
|
|
$ |
75,648 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
22,069,885 |
|
|
|
22,066,159 |
|
|
|
22,110,315 |
|
|
|
22,056,270 |
|
Diluted |
|
|
22,069,885 |
|
|
|
22,381,516 |
|
|
|
22,110,315 |
|
|
|
22,207,031 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
1.07 |
|
|
$ |
0.59 |
|
|
$ |
3.43 |
|
|
$ |
3.43 |
|
Diluted |
|
$ |
1.07 |
|
|
$ |
0.58 |
|
|
$ |
3.43 |
|
|
$ |
3.41 |
|
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
(Dollars in thousands) |
||||||||
|
|
|
|
|||||
ASSETS |
|
|
|
|||||
Current Assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
20,772 |
|
|
$ |
18,388 |
|
|
Receivables, net |
|
130,436 |
|
|
|
144,286 |
|
|
Inventory |
|
372,153 |
|
|
|
346,853 |
|
|
Prepaid expenses |
|
4,692 |
|
|
|
3,580 |
|
|
Refundable income taxes |
|
3,955 |
|
|
|
1,190 |
|
|
Total current assets |
|
532,008 |
|
|
|
514,297 |
|
|
|
|
|
|
|||||
Property, plant, and equipment |
|
533,386 |
|
|
|
489,646 |
|
|
Less accumulated depreciation and amortization |
|
(241,243 |
) |
|
|
(227,343 |
) |
|
Property, plant, and equipment, net |
|
292,143 |
|
|
|
262,303 |
|
|
Operating lease right-of-use assets, net |
|
14,910 |
|
|
|
13,975 |
|
|
Investment in joint ventures |
|
6,643 |
|
|
|
5,197 |
|
|
Intangible assets, net |
|
269,265 |
|
|
|
271,706 |
|
|
|
|
321,544 |
|
|
|
321,544 |
|
|
Other assets |
|
4,106 |
|
|
|
3,326 |
|
|
TOTAL ASSETS |
$ |
1,440,619 |
|
|
$ |
1,392,348 |
|
|
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||||
Current Liabilities: |
|
|
|
|||||
Current maturities of long-term debt |
$ |
6,400 |
|
|
$ |
6,400 |
|
|
Accounts payable |
|
53,717 |
|
|
|
73,594 |
|
|
Federal and state excise taxes payable |
|
2,482 |
|
|
|
2,251 |
|
|
Accrued expenses and other |
|
19,739 |
|
|
|
31,861 |
|
|
Total current liabilities |
|
82,338 |
|
|
|
114,106 |
|
|
|
|
|
|
|||||
Long-term debt, less current maturities |
|
87,784 |
|
|
|
85,305 |
|
|
Convertible senior notes |
|
195,784 |
|
|
|
195,544 |
|
|
Long-term operating lease liabilities |
|
11,688 |
|
|
|
11,292 |
|
|
Contingent consideration |
|
85,100 |
|
|
|
69,200 |
|
|
Other noncurrent liabilities |
|
3,053 |
|
|
|
4,763 |
|
|
Deferred income taxes |
|
61,987 |
|
|
|
63,071 |
|
|
Total liabilities |
|
527,734 |
|
|
|
543,281 |
|
|
Total equity |
|
912,885 |
|
|
|
849,067 |
|
|
TOTAL LIABILITIES AND TOTAL EQUITY |
$ |
1,440,619 |
|
|
$ |
1,392,348 |
|
|
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
(Dollars in thousands) |
||||||||
|
|
Year to Date Ended |
||||||
|
|
2024 |
|
2023 |
||||
Cash Flows from Operating Activities |
|
|
|
|
||||
Net income |
|
$ |
76,463 |
|
|
$ |
76,084 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
16,298 |
|
|
|
16,272 |
|
Impairment of long-lived assets and other |
|
|
137 |
|
|
|
18,334 |
|
Share-based compensation |
|
|
2,748 |
|
|
|
5,651 |
|
Equity method investment loss (gain) |
|
|
(1,446 |
) |
|
|
191 |
|
Deferred income taxes, including change in valuation allowance |
|
|
(1,084 |
) |
|
|
(2,112 |
) |
Change in fair value of contingent consideration |
|
|
15,900 |
|
|
|
4,200 |
|
Other, net |
|
|
292 |
|
|
|
376 |
|
Changes in operating assets and liabilities, net of effects of acquisition: |
|
|
|
|
||||
Receivables, net |
|
|
13,979 |
|
|
|
(14,980 |
) |
Inventory |
|
|
(24,979 |
) |
|
|
(42,015 |
) |
Prepaid expenses |
|
|
(1,091 |
) |
|
|
(1,517 |
) |
Income taxes payable (refundable) |
|
|
(2,765 |
) |
|
|
2,134 |
|
Accounts payable |
|
|
(10,627 |
) |
|
|
(10,069 |
) |
Accrued expenses and other |
|
|
(9,935 |
) |
|
|
(2,471 |
) |
Federal and state excise taxes payable |
|
|
231 |
|
|
|
(1,908 |
) |
Other, net |
|
|
(609 |
) |
|
|
435 |
|
Net cash provided by operating activities |
|
|
73,512 |
|
|
|
48,605 |
|
|
|
|
|
|
||||
Cash Flows from Investing Activities |
|
|
|
|
||||
Additions to property, plant, and equipment |
|
|
(52,850 |
) |
|
|
(42,062 |
) |
Purchase of business, net of cash acquired |
|
|
— |
|
|
|
(103,712 |
) |
Other, net |
|
|
(276 |
) |
|
|
(916 |
) |
Net cash used in investing activities |
|
|
(53,126 |
) |
|
|
(146,690 |
) |
|
|
|
|
|
||||
Cash Flows from Financing Activities |
|
|
|
|
||||
Payment of dividends and dividend equivalents |
|
|
(8,013 |
) |
|
|
(8,006 |
) |
Repurchase of Common Stock |
|
|
(12,235 |
) |
|
|
(801 |
) |
Proceeds from long-term debt |
|
|
70,000 |
|
|
|
105,000 |
|
Principal payments on long-term debt |
|
|
(67,800 |
) |
|
|
(18,000 |
) |
Net cash provided by (used in) financing activities |
|
|
(18,048 |
) |
|
|
78,193 |
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
46 |
|
|
|
33 |
|
Increase (decrease) in cash and cash equivalents |
|
|
2,384 |
|
|
|
(19,859 |
) |
Cash and cash equivalents, beginning of period |
|
|
18,388 |
|
|
|
47,889 |
|
Cash and cash equivalents, end of period |
|
$ |
20,772 |
|
|
$ |
28,030 |
|
|
|||||||||||||||
SALES BY OPERATING SEGMENT |
|||||||||||||||
(Dollars in thousands) |
|||||||||||||||
|
DISTILLING SOLUTIONS SALES |
||||||||||||||
|
Quarter Ended |
Quarter versus Quarter Sales
|
|||||||||||||
|
2024 |
2023 |
$ Change |
% Change |
|||||||||||
Brown goods |
$ |
57,110 |
|
$ |
73,409 |
|
$ |
(16,299 |
) |
(22 |
)% |
||||
Warehouse services |
|
8,264 |
|
|
7,353 |
|
|
911 |
|
12 |
|
||||
White goods and other co-products |
|
6,545 |
|
|
31,091 |
|
|
(24,546 |
) |
(79 |
) |
||||
Total Distilling Solutions |
$ |
71,919 |
|
$ |
111,853 |
|
$ |
(39,934 |
) |
(36 |
)% |
|
BRANDED SPIRITS SALES |
||||||||||||||
|
Quarter Ended |
|
Quarter versus Quarter Sales
|
||||||||||||
|
2024 |
|
2023 |
|
$ Change |
|
% Change |
||||||||
Premium plus |
$ |
31,086 |
|
$ |
30,843 |
|
|
243 |
|
1 |
% |
||||
Mid |
|
14,788 |
|
|
17,650 |
|
|
(2,862 |
) |
(16 |
) |
||||
Value |
|
10,034 |
|
|
11,049 |
|
|
(1,015 |
) |
(9 |
) |
||||
Other |
|
6,716 |
|
|
7,277 |
|
|
(561 |
) |
(8 |
) |
||||
|
$ |
62,624 |
|
$ |
66,819 |
|
$ |
(4,195 |
) |
(6 |
)% |
|
INGREDIENT SOLUTIONS SALES |
||||||||||||||
|
Quarter Ended |
Quarter versus Quarter Sales
|
|||||||||||||
|
2024 |
2023 |
$ Change |
% Change |
|||||||||||
Specialty wheat starches |
$ |
16,172 |
|
$ |
17,196 |
|
$ |
(1,024 |
) |
(6 |
)% |
||||
Specialty wheat proteins |
|
7,752 |
|
|
11,440 |
|
|
(3,688 |
) |
(32 |
) |
||||
Commodity wheat starches |
|
2,611 |
|
|
4,226 |
|
|
(1,615 |
) |
(38 |
) |
||||
Commodity wheat proteins |
|
383 |
|
|
90 |
|
|
293 |
|
326 |
|
||||
Total Ingredient Solutions |
$ |
26,918 |
|
$ |
32,952 |
|
$ |
(6,034 |
) |
(18 |
)% |
||||
|
|
|
|
|
|
|||||||||||||||
SALES BY OPERATING SEGMENT |
|||||||||||||||
(Dollars in thousands) |
|||||||||||||||
|
DISTILLING SOLUTIONS SALES |
||||||||||||||
|
Year to Date Ended |
Year to Date versus Year to Date Sales
|
|||||||||||||
|
2024 |
2023 |
$ Change |
% Change |
|||||||||||
Brown goods |
$ |
198,884 |
|
$ |
214,857 |
|
$ |
(15,973 |
) |
(7 |
)% |
||||
Warehouse services |
|
24,612 |
|
|
20,958 |
|
|
3,654 |
|
17 |
|
||||
White goods and other co-products |
|
26,663 |
|
|
106,126 |
|
|
(79,463 |
) |
(75 |
) |
||||
Total Distilling Solutions |
$ |
250,159 |
|
$ |
341,941 |
|
$ |
(91,782 |
) |
(27 |
)% |
|
BRANDED SPIRITS SALES |
||||||||||||||
|
Year to Date Ended |
Year to Date versus Year to Date Sales
|
|||||||||||||
|
2024 |
2023 |
$ Change |
% Change |
|||||||||||
Premium plus |
$ |
82,699 |
|
$ |
73,352 |
|
$ |
9,347 |
|
13 |
% |
||||
Mid |
|
46,610 |
|
|
55,575 |
|
|
(8,965 |
) |
(16 |
) |
||||
Value |
|
31,698 |
|
|
36,048 |
|
|
(4,350 |
) |
(12 |
) |
||||
Other |
|
15,804 |
|
|
16,343 |
|
|
(539 |
) |
(3 |
) |
||||
|
$ |
176,811 |
|
$ |
181,318 |
|
$ |
(4,507 |
) |
(2 |
)% |
|
INGREDIENT SOLUTIONS SALES |
||||||||||||||
|
Year to Date Ended |
Year to Date versus Year to Date Sales
|
|||||||||||||
|
2024 |
2023 |
$ Change |
% Change |
|||||||||||
Specialty wheat starches |
$ |
57,646 |
|
$ |
48,977 |
|
$ |
8,669 |
|
18 |
% |
||||
Specialty wheat proteins |
|
28,947 |
|
|
35,918 |
|
|
(6,971 |
) |
(19 |
) |
||||
Commodity wheat starches |
|
8,846 |
|
|
12,870 |
|
|
(4,024 |
) |
(31 |
) |
||||
Commodity wheat proteins |
|
420 |
|
|
611 |
|
|
(191 |
) |
(31 |
) |
||||
Total Ingredient Solutions |
$ |
95,859 |
|
$ |
98,376 |
|
$ |
(2,517 |
) |
(3 |
)% |
||||
|
|
|
|
|
|
||||||||
OPERATING INCOME ROLLFORWARD |
||||||||
(Dollars in thousands) |
||||||||
Operating income, quarter versus quarter |
Operating
|
Change |
|
|||||
Operating income for the quarter ended |
$ |
19,839 |
|
|
|
|||
Increase in gross profit - |
|
3,406 |
|
17 |
% |
|
||
Decrease in gross profit - Ingredient Solutions segment |
|
(6,403 |
) |
(32 |
) |
pp(a) |
||
Decrease in gross profit - Distilling Solutions segment |
|
(4,636 |
) |
(23 |
) |
pp |
||
Increase in advertising and promotion expenses |
|
(142 |
) |
(1 |
) |
pp |
||
Decrease in SG&A expenses |
|
4,366 |
|
22 |
|
pp |
||
Impairment of long-lived assets and other |
|
18,334 |
|
92 |
|
pp |
||
Change in fair value of contingent consideration |
|
(2,200 |
) |
(11 |
) |
pp |
||
Operating income for the quarter ended |
$ |
32,564 |
|
64 |
% |
|
Operating income, year to date versus year to date |
Operating
|
Change |
|
|||||
Operating income for the year to date ended |
$ |
105,541 |
|
|
|
|||
Decrease in gross profit - Ingredient Solutions segment |
|
(16,914 |
) |
(16 |
)% |
|
||
Increase in gross profit - |
|
8,975 |
|
9 |
|
pp(a) |
||
Increase in gross profit - Distilling Solutions segment |
|
214 |
|
— |
|
pp |
||
Increase in advertising and promotion expenses |
|
(4,118 |
) |
(4 |
) |
pp |
||
Decrease in SG&A expenses |
|
4,673 |
|
4 |
|
pp |
||
Impairment of long-lived assets and other |
|
18,197 |
|
17 |
|
pp |
||
Change in fair value of contingent consideration |
|
(11,700 |
) |
(11 |
) |
pp |
||
Operating income for the year to date ended |
$ |
104,868 |
|
(1 |
)% |
|
||
(a) Percentage points (“pp”). |
|
||||||||
EARNINGS PER COMMON SHARE (“EPS”) ROLLFORWARD |
||||||||
|
|
|
|
|||||
Change in EPS, quarter versus quarter |
|
EPS |
|
Change |
|
|||
Basic EPS for the quarter ended |
|
$ |
0.59 |
|
|
|
|
|
Change in operating income(b) |
|
|
0.43 |
|
|
73 |
% |
|
Change in interest expense, net(b) |
|
|
0.01 |
|
|
2 |
|
pp(a) |
Change in other income (expense), net(b) |
|
|
0.04 |
|
|
7 |
|
pp |
Change in effective tax rate |
|
|
0.01 |
|
|
2 |
|
pp |
Change in weighted average shares outstanding |
|
|
(0.01 |
) |
|
(2 |
) |
pp |
Basic and Diluted EPS for the quarter ended |
|
$ |
1.07 |
|
|
82 |
% |
|
Change in EPS, year to date versus year to date |
|
EPS |
|
Change |
|
|||
Basic EPS for the year to date ended |
|
$ |
3.43 |
|
|
|
|
|
Change in operating income(b) |
|
|
(0.02 |
) |
|
(1 |
)% |
|
Change in interest expense, net(b) |
|
|
(0.06 |
) |
|
(2 |
) |
pp(a) |
Change in other income (expense), net(b) |
|
|
0.07 |
|
|
3 |
|
pp |
Change in effective tax rate |
|
|
0.03 |
|
|
1 |
|
pp |
Change in weighted average shares outstanding |
|
|
(0.02 |
) |
|
(1 |
) |
pp |
Basic and Diluted EPS for the year to date ended |
|
$ |
3.43 |
|
|
— |
% |
|
(a) Percentage points (“pp”). |
||||||||
(b) Items are net of tax based on the effective tax rate for the base year (2023). |
||||||||
|
|||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES (UNAUDITED) |
|||||||||||||||
(in thousands, except per share amounts) |
|||||||||||||||
|
Quarter Ended |
||||||||||||||
|
Operating Income |
|
Income before Income Taxes |
|
Net Income(b) |
|
MGP Earnings(a) |
|
Basic and Diluted EPS |
||||||
Reported GAAP Results |
$ |
32,564 |
|
$ |
31,416 |
|
$ |
23,862 |
|
$ |
23,648 |
|
$ |
1.07 |
|
Adjusted to remove: |
|
|
|
|
|
|
|
|
|
||||||
Fair value of contingent consideration(c) |
|
6,400 |
|
|
6,400 |
|
|
4,864 |
|
|
4,864 |
|
|
0.22 |
|
Business acquisition costs(d) |
|
15 |
|
|
15 |
|
|
11 |
|
|
11 |
|
|
— |
|
Unusual items costs(e) |
|
34 |
|
|
34 |
|
|
26 |
|
|
26 |
|
|
— |
|
Adjusted Non-GAAP results |
$ |
39,013 |
|
$ |
37,865 |
|
$ |
28,763 |
|
$ |
28,549 |
|
$ |
1.29 |
|
Quarter Ended |
|||||||||||||||||
|
Operating Income |
|
Income before Income Taxes |
|
Net Income |
|
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(f) |
|
18,334 |
|
|
18,334 |
|
|
13,750 |
|
|
13,750 |
|
|
0.62 |
|
|
0.61 |
|
Fair value of contingent consideration(c) |
|
4,200 |
|
|
4,200 |
|
|
3,150 |
|
|
3,150 |
|
|
0.14 |
|
|
0.14 |
|
Business acquisition costs(d) |
|
314 |
|
|
314 |
|
|
235 |
|
|
235 |
|
|
0.01 |
|
|
0.01 |
|
Adjusted Non-GAAP results |
$ |
42,687 |
|
$ |
40,309 |
|
$ |
30,223 |
|
$ |
30,217 |
|
$ |
1.36 |
|
$ |
1.34 |
|
Year to Date Ended |
||||||||||||||
|
Operating Income |
Income before Income Taxes |
Net Income(b) |
MGP Earnings(a) |
Basic and Diluted EPS |
||||||||||
Reported GAAP Results |
$ |
104,868 |
$ |
100,387 |
$ |
76,463 |
$ |
75,797 |
$ |
3.43 |
|||||
Adjusted to remove: |
|
|
|
|
|
||||||||||
Impairment of long-lived assets and other(f) |
|
137 |
|
137 |
|
104 |
|
104 |
|
— |
|||||
Fair value of contingent consideration(c) |
|
15,900 |
|
15,900 |
|
12,116 |
|
12,116 |
|
0.55 |
|||||
Business acquisition costs(d) |
|
101 |
|
101 |
|
77 |
|
77 |
|
— |
|||||
Executive transition costs(g) |
|
1,218 |
|
1,218 |
|
928 |
|
928 |
|
0.04 |
|||||
Unusual items costs(e) |
|
1,673 |
|
1,673 |
|
1,275 |
|
1,275 |
|
0.06 |
|||||
Adjusted Non-GAAP results |
$ |
123,897 |
$ |
119,416 |
$ |
90,963 |
$ |
90,297 |
$ |
4.08 |
|
Year to Date Ended |
|||||||||||||||||
|
Operating Income |
|
Income before Income Taxes |
|
Net Income |
|
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(f) |
|
18,334 |
|
|
18,334 |
|
|
13,824 |
|
|
13,824 |
|
|
0.63 |
|
|
0.62 |
|
Fair value of contingent consideration(c) |
|
4,200 |
|
|
4,200 |
|
|
3,167 |
|
|
3,167 |
|
|
0.14 |
|
|
0.14 |
|
Business acquisition costs(d) |
|
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 |
|
Description of Non-GAAP items
(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 |
|
|
|
|
(c) |
Fair value of contingent consideration relates to the quarterly adjustment of the contingent consideration liability related to the acquisition of |
|
|
|
|
(d) |
Business acquisition costs are included in the Condensed Consolidated Statement of Income within the selling, general, and administrative line item and include transaction and integration costs associated with the acquisition of |
|
|
|
|
(e) |
The unusual items costs are included in the Condensed Consolidated Statement of Income within the selling, general and administrative line item. The adjustment includes professional and legal costs associated with special projects. |
|
|
|
|
(f) |
The impairment of long-lived assets and other relates to impairments of assets as well as miscellaneous expenses in connection with the closure of the |
|
|
|
|
(g) |
The executive transition costs are included in the Condensed Consolidated Statement of Income within the selling, general, and administrative line item. The adjustment includes costs related to the transition of certain executive positions. |
|
|
|
|
(h) |
Adjusted net income margin is defined as adjusted net income divided by net sales. |
|
|
|
|
(i) |
Adjusted EBITDA margin is defined as adjusted EBITDA divided by net sales. |
|
|
||||||||||||||||
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (UNAUDITED) |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
Quarter Ended
|
|
Year to Date Ended
|
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
Net Income |
$ |
23,862 |
|
|
$ |
13,088 |
|
|
$ |
76,463 |
|
|
$ |
76,084 |
|
|
Interest expense |
|
2,174 |
|
|
|
2,353 |
|
|
|
6,398 |
|
|
|
4,630 |
|
|
Income tax expense |
|
7,554 |
|
|
|
4,373 |
|
|
|
23,924 |
|
|
|
24,832 |
|
|
Depreciation and amortization |
|
5,680 |
|
|
|
5,782 |
|
|
|
16,298 |
|
|
|
16,272 |
|
|
Share based compensation |
|
767 |
|
|
|
2,014 |
|
|
|
2,748 |
|
|
|
5,651 |
|
|
Equity method investment loss (gain) |
|
(832 |
) |
|
|
(388 |
) |
|
|
(1,446 |
) |
|
|
191 |
|
|
Impairment of long-lived assets and other |
|
— |
|
|
|
18,334 |
|
|
|
137 |
|
|
|
18,334 |
|
|
Fair value of contingent consideration |
|
6,400 |
|
|
|
4,200 |
|
|
|
15,900 |
|
|
|
4,200 |
|
|
Business acquisition costs |
|
15 |
|
|
|
314 |
|
|
|
101 |
|
|
|
1,814 |
|
|
Executive transition costs |
|
— |
|
|
|
— |
|
|
|
1,218 |
|
|
|
— |
|
|
Unusual items costs |
|
34 |
|
|
|
— |
|
|
|
1,673 |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
45,654 |
|
|
$ |
50,070 |
|
|
$ |
143,414 |
|
|
$ |
152,008 |
|
The non-GAAP adjusted EBITDA measure is defined as earnings before interest expense, income tax expense, depreciation and amortization, share based compensation, equity method investment loss (gain), impairment of long-lived assets and other, fair value of contingent consideration, business acquisition costs, executive transition costs, and unusual items costs.
See "Reconciliation of selected GAAP measure to adjusted non-GAAP measures" and "Description of Non-GAAP items" for further details.
|
||||||||||||||||||||
NET DEBT LEVERAGE |
||||||||||||||||||||
(in thousands) |
||||||||||||||||||||
|
Quarter Ended
|
|
Quarter Ended
2024 |
|
Quarter Ended
2024 |
|
Quarter Ended
2024 |
|
TTM(a)
|
|||||||||||
Net income |
$ |
31,046 |
|
|
$ |
20,584 |
|
|
$ |
32,017 |
|
|
$ |
23,862 |
|
|
$ |
107,509 |
|
|
Interest expense |
|
2,017 |
|
|
|
2,019 |
|
|
|
2,205 |
|
|
|
2,174 |
|
|
|
8,415 |
|
|
Income tax expense |
|
9,784 |
|
|
|
6,262 |
|
|
|
10,108 |
|
|
|
7,554 |
|
|
|
33,708 |
|
|
Depreciation and amortization |
|
5,841 |
|
|
|
5,289 |
|
|
|
5,329 |
|
|
|
5,680 |
|
|
|
22,139 |
|
|
Share based compensation |
|
1,850 |
|
|
|
1,116 |
|
|
|
865 |
|
|
|
767 |
|
|
|
4,598 |
|
|
Equity method investment loss (gain) |
|
146 |
|
|
|
296 |
|
|
|
(910 |
) |
|
|
(832 |
) |
|
|
(1,300 |
) |
|
Impairment of long-lived assets and other |
|
1,057 |
|
|
|
116 |
|
|
|
21 |
|
|
|
— |
|
|
|
1,194 |
|
|
Fair value of contingent consideration |
|
2,900 |
|
|
|
4,100 |
|
|
|
5,400 |
|
|
|
6,400 |
|
|
|
18,800 |
|
|
Business acquisition costs |
|
246 |
|
|
|
71 |
|
|
|
15 |
|
|
|
15 |
|
|
|
347 |
|
|
Executive transition costs |
|
3,134 |
|
|
|
375 |
|
|
|
843 |
|
|
|
— |
|
|
|
4,352 |
|
|
Unusual items costs |
|
— |
|
|
|
— |
|
|
|
1,639 |
|
|
|
34 |
|
|
|
1,673 |
|
|
Adjusted EBITDA |
$ |
58,021 |
|
|
$ |
40,228 |
|
|
$ |
57,532 |
|
|
$ |
45,654 |
|
|
$ |
201,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total debt |
|
|
|
|
|
|
|
|
$ |
289,968 |
|
|||||||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
20,772 |
|
|||||||||
Net debt |
|
|
|
|
|
|
|
|
$ |
269,196 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net debt leverage ratio(b) |
|
|
|
|
|
|
|
|
|
1.3 |
|
|||||||||
(a) TTM is defined as trailing twelve months |
||||||||||||||||||||
(b) Net debt leverage ratio is defined as net debt divided by adjusted EBITDA |
||||||||||||||||||||
See "Reconciliation of selected GAAP measure to adjusted non-GAAP measures" and "Description of Non-GAAP items" for further details on selected non-GAAP items. |
|
||||||||||||||||
DILUTIVE SHARES OUTSTANDING CALCULATION (UNAUDITED) |
||||||||||||||||
|
Quarter Ended
|
|
Year to Date Ended
|
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
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) |
$ |
82.66859 |
|
|
$ |
113.32587 |
|
|
$ |
82.41075 |
|
|
$ |
103.71316 |
|
|
Impact of conversion(c) |
$ |
172,877,289 |
|
|
$ |
236,988,065 |
|
|
$ |
172,338,092 |
|
|
$ |
216,885,881 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash paid for principal |
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
|
|
(201,250,000 |
) |
|
Conversion premium |
$ |
— |
|
|
$ |
35,738,065 |
|
|
$ |
— |
|
|
$ |
15,635,881 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Average share price |
$ |
82.66859 |
|
|
$ |
113.32587 |
|
|
$ |
82.41075 |
|
|
$ |
103.71316 |
|
|
Conversion premium in shares(d) (e) |
|
— |
|
|
|
315,357 |
|
|
|
— |
|
|
|
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 |
|
|
|
|
(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 periods exceed the conversion price of |
|
|
|
|
(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. |
|
|||||||||||||||
Impact of the Closure of the |
|||||||||||||||
Segment Operating Results and Pro-Forma Results |
|||||||||||||||
Quarter Ended |
|||||||||||||||
(UNAUDITED) (Dollars in thousands) |
|||||||||||||||
|
Distilling Solutions |
|
|||||||||||||
|
Quarter Ended
|
|
Increase/(Decrease) |
|
|||||||||||
|
As Reported(a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
|||||||
Brown goods |
$ |
57,110 |
|
$ |
57,110 |
|
$ |
— |
— |
% |
|
||||
Warehouse services |
|
8,264 |
|
|
8,264 |
|
|
— |
— |
|
|
||||
White goods and other co-products |
|
6,545 |
|
|
6,545 |
|
|
— |
— |
|
|
||||
Total Sales |
$ |
71,919 |
|
$ |
71,919 |
|
$ |
— |
— |
% |
|
||||
|
|
|
|
|
|
||||||||||
Gross profit |
$ |
28,644 |
|
$ |
28,644 |
|
$ |
— |
— |
% |
|
||||
Gross margin % |
|
39.8 |
% |
|
39.8 |
% |
|
— |
|
pp(c) |
|
Ingredient Solutions |
|
|||||||||||||
|
Quarter Ended
|
|
Increase/(Decrease) |
|
|||||||||||
|
As Reported(a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
|||||||
Specialty wheat starches |
$ |
16,172 |
|
|
$ |
16,172 |
|
|
$ |
— |
|
— |
% |
|
|
Specialty wheat proteins |
|
7,752 |
|
|
|
7,752 |
|
|
|
— |
|
— |
|
|
|
Commodity wheat starches |
|
2,611 |
|
|
|
2,611 |
|
|
|
— |
|
— |
|
|
|
Commodity wheat proteins |
|
383 |
|
|
|
383 |
|
|
|
— |
|
— |
|
|
|
Total Sales |
$ |
26,918 |
|
|
$ |
26,918 |
|
|
$ |
— |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Gross profit |
$ |
4,725 |
|
|
$ |
4,725 |
|
|
$ |
— |
(d) |
— |
% |
|
|
Gross margin % |
|
17.6 |
% |
|
|
17.6 |
% |
|
|
|
— |
|
pp(c) |
|
Consolidated |
|
|||||||||||||
|
Quarter Ended
|
|
Increase/(Decrease) |
|
|||||||||||
|
As Reported(a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
|||||||
Sales |
$ |
161,461 |
|
|
$ |
161,461 |
|
|
$ |
— |
|
— |
% |
|
|
Gross profit |
$ |
65,815 |
|
|
$ |
65,815 |
|
|
$ |
— |
|
— |
% |
|
|
Gross margin % |
|
40.8 |
% |
|
|
40.8 |
% |
|
|
|
— |
|
pp(c) |
(a) |
Represents actual results of the Company for the quarter ended |
|
(b) |
Represents the Company's results for the quarter ended |
|
(c) |
Percentage points (“pp”). |
|
(d) |
There was no reduction in gross profit for the Ingredient Solutions segment as the Company is no longer receiving an intercompany credit for the waste starch slurry by-product since the closure of the distillery in |
|
|
||||||||||||||||
Impact of the Closure of the |
||||||||||||||||
Segment Operating Results and Pro-Forma Results |
||||||||||||||||
Quarter Ended |
||||||||||||||||
(UNAUDITED) (Dollars in thousands) |
||||||||||||||||
|
Distilling Solutions |
|
||||||||||||||
|
Quarter Ended
|
|
Increase/(Decrease) |
|
||||||||||||
|
As Reported(a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
||||||||
Brown goods |
$ |
73,409 |
|
|
$ |
73,409 |
|
|
$ |
— |
|
|
— |
% |
|
|
Warehouse services |
|
7,353 |
|
|
|
7,353 |
|
|
|
— |
|
|
— |
|
|
|
White goods and other co-products |
|
31,091 |
|
|
|
6,430 |
|
|
|
(24,661 |
) |
|
(79 |
) |
|
|
Total Sales |
$ |
111,853 |
|
|
$ |
87,192 |
|
|
$ |
(24,661 |
) |
|
(22 |
)% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
$ |
33,280 |
|
|
$ |
37,310 |
|
|
$ |
4,030 |
|
|
12 |
% |
|
|
Gross margin % |
|
29.8 |
% |
|
|
42.8 |
% |
|
|
|
13.0 |
|
pp(c) |
|
Ingredient Solutions |
|
||||||||||||||
|
Quarter Ended
|
|
Increase/(Decrease) |
|
||||||||||||
|
As Reported(a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
||||||||
Specialty wheat starches |
$ |
17,196 |
|
|
$ |
17,196 |
|
|
$ |
— |
|
|
— |
% |
|
|
Specialty wheat proteins |
|
11,440 |
|
|
|
11,440 |
|
|
|
— |
|
|
— |
|
|
|
Commodity wheat starches |
|
4,226 |
|
|
|
4,226 |
|
|
|
— |
|
|
— |
|
|
|
Commodity wheat proteins |
|
90 |
|
|
|
90 |
|
|
|
— |
|
|
— |
|
|
|
Total Sales |
$ |
32,952 |
|
|
$ |
32,952 |
|
|
$ |
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
$ |
11,128 |
|
|
$ |
9,408 |
|
|
$ |
(1,720 |
) |
(d) |
(15 |
)% |
|
|
Gross margin % |
|
33.8 |
% |
|
|
28.6 |
% |
|
|
|
(5.2 |
) |
pp(c) |
|
Consolidated |
|
||||||||||||||
|
Quarter Ended
|
|
Increase/(Decrease) |
|
||||||||||||
|
As Reported(a) |
|
Pro-Forma(b) |
|
$ Change |
|
% Change |
|
||||||||
Sales |
$ |
211,624 |
|
|
$ |
186,963 |
|
|
$ |
(24,661 |
) |
|
(12 |
)% |
|
|
Gross profit |
$ |
73,448 |
|
|
$ |
75,758 |
|
|
$ |
2,310 |
|
|
3 |
% |
|
|
Gross margin % |
|
34.7 |
% |
|
|
40.5 |
% |
|
|
|
5.8 |
|
pp(c) |
(a) |
Represents actual results of the Company for the quarter ended |
|
(b) |
Represents the Company's results for the quarter ended |
|
(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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241031029666/en/
For More Information
Investors:
amit.sharma@mgpingredients.com
Media:
greg.manis@mgpingredients.com
913-360-5440
Source: