FALSE000083501100008350112024-10-312024-10-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2024

MGP Ingredients, Inc.
(Exact name of registrant as specified in its charter)
Kansas0-1719645-4082531
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
Cray Business Plaza
100 Commercial Street
Box 130
Atchison, Kansas 66002
(Address of principal executive offices) (Zip Code)

(913) 367-1480
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, no par valueMGPINASDAQ Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.

On October 31, 2024, MGP Ingredients, Inc. (the "Company") issued a press release relating to financial results for the third quarter 2024, which ended September 30, 2024. A copy of the press release is being furnished as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent expressly set forth by specific reference in such filing.


Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit NumberDescription
99.1
104The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline Extensible Business Reporting Language)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


                        MGP INGREDIENTS, INC.
Date: October 31, 2024
By:/s/ Brandon M. Gall
Brandon M. Gall, Vice President, Finance and Chief Financial Officer








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MGP INGREDIENTS REPORTS THIRD QUARTER 2024 RESULTS
Financial results and full-year guidance in line with recently announced preliminary update

ATCHISON, Kan., October 31, 2024 - MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of branded and distilled spirits and food ingredient solutions, today reported results for the third quarter ended September 30, 2024.

“Our third quarter performance was in line with the preliminary results we provided on October 17. In response to the softening American whiskey category trends and elevated industry-wide barrel inventories, in 2025 we plan to further lower our net aging whiskey put away, scale down our whiskey production, and optimize our cost structure to mitigate lower production volumes. While current market dynamics will likely have an even greater impact on our Distilling Solutions segment sales and profitability in 2025, we believe that these actions will strengthen the long-term competitive positioning of our brown goods business. Over the longer term, we remain confident in our Distilling Solutions business as our whiskey inventories remain an important part of the still expanding American whiskey category,” said David Bratcher, CEO and president of MGP Ingredients.

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 the Atchison 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 the Atchison distillery, adjusted gross margin increased 30 basis points to 40.8% largely due to higher Branded 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.

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Consolidated Results
In the third quarter 2024, excluding the impact of the Atchison distillery, consolidated sales decreased by 14% year over year, reflecting lower sales in all three operating segments. Consolidated gross profit decreased 10% to $65.8 million, representing 40.8% of sales. Excluding the impact of the Atchison distillery, third quarter 2024 consolidated gross margin improved approximately 30 basis points from the prior year period primarily reflecting strong margin expansion in the Branded Spirits segment. Third quarter 2024 operating income and diluted EPS increased 64% and $0.49 to $32.6 million and $1.07 per share, respectively. On an adjusted basis, operating income decreased 9% to $39.0 million and diluted EPS decreased by 4% to $1.29.

Distilling Solutions
For the third quarter 2024, Distilling Solutions segment sales decreased 36% to $71.9 million. Excluding the impact of the Atchison distillery, segment sales decreased 18% to $71.9 million mainly due to the 22% decline in brown goods sales, including lower aged and new distillate sales. Segment gross profit, as reported, decreased to $28.6 million, or 39.8% of sales, compared to $33.3 million, or 29.8% of segment sales, in the third quarter 2023.

Branded Spirits
Branded Spirits segment third quarter 2024 sales decreased 6% to $62.6 million, driven primarily by the decline in mid and value priced portfolio sales. Premium plus sales grew 1% as we continue to execute focused initiatives across the American whiskey and tequila categories. Branded Spirits gross profit increased by 12% to $32.4 million, or 51.8% of segment sales, compared to $29.0 million, or 43.5% of segment sales, in the prior year period.

Ingredient Solutions
Ingredient Solutions segment sales decreased 18% to $26.9 million primarily due to the stronger U.S. dollar's continued impact on our specialty protein sales as well as decreased sales volume of commodity wheat starches due to increased domestic competition. Gross profit decreased to $4.7 million, or 17.6% of segment sales, compared to $11.1 million, or 33.8% of segment sales, in the third quarter 2023. Excluding the impact of the Atchison distillery and the associated intercompany credit for the waste starch slurry by-product, gross profit decreased to $4.7 million compared to $9.4 million in the third quarter 2023.

Additional Highlights
Advertising and promotion expenses increased 1% to $9.6 million as compared to the third quarter 2023.

Corporate selling, general, and administrative (“SG&A”) expenses for the third quarter 2024 decreased $4.4 million, or 20%, to $17.2 million as compared to the third quarter 2023.

During the third quarter 2024, the fair value of the contingent consideration liability related to the Penelope acquisition increased by $2.2 million compared third quarter of 2023.

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 the Atchison distillery in December 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%.


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•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
MGP Ingredients will host a conference call today, October 31, 2024, at 10 a.m. ET to discuss these results and current business trends. Investors can dial 844-308-6398 or 412-717-9605 (international) to listen to the live call. A live webcast will be available at “News and Events” section of the company’s Investor Relations website at ir.mgpingredients.com/news-events. A replay of the conference call will be available on the company’s website.

About MGP Ingredients, Inc.
MGP Ingredients, Inc. (Nasdaq: MGPI) is a leading producer of premium branded and distilled spirits, as well as 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 and Indiana, 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 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 MGP Ingredients, Inc. (the “Company” or “MGP”) to lower put away, scale down production, and optimize its cost structure; the Company’s sales, profitability, competitive positioning, and confidence in its business; whiskey category expansion; the Company’s ability to transition to becoming a branded spirits company, to grow, and to have a stronger 2025; and the Company’s 2024 outlook, including its expectations for sales, adjusted EBITDA, adjusted EPS, shares outstanding, tax rate, and capital expenditures. Forward looking statements are


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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 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; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; our closure of our Atchison, Kansas distillery; regulation and taxation and compliance with existing or future laws and regulations; tariffs, trade relations, and trade policies; excise taxes, incentives and customs duties; our ability to protect our intellectual property rights and defend against alleged intellectual property rights infringement claims; failure to secure and maintain listings in control states; labeling or warning requirements or limitations on the availability of our products; product recalls or other product liability claims; anti-corruption laws, trade sanctions and restrictions; class action or other litigation; higher costs or the unavailability and cost of raw materials, product ingredients, energy resources, or labor; failure of our information technology systems, networks, processes, associated sites, or service providers; acquisitions and potential future acquisitions; interest rate increases; reliance on key personnel; commercial, political, and financial risks; covenants and other provisions in our credit arrangements; pandemics or other health crises; ability to pay any dividends; limited rights of common stockholders and anti-takeover provisions in our governing documents; the impact of issuing shares of our common stock; and the effectiveness or execution of our strategic plan. 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, 2023 and its Quarterly Reports on Form 10-Q for the quarter ended March 31, June 30, and September 30, 2024, 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 measures excluding the impact of the Atchison distillery, adjusted operating income, adjusted income before income taxes, adjusted net income, adjusted net income margin, adjusted MGP earnings, adjusted EBITDA, adjusted EBITDA margin, net debt, net debt leverage ratio, 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, debt, 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


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comparable U.S. GAAP financial measure. Full year 2024 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:
Amit Sharma
amit.sharma@mgpingredients.com

Media:
Greg Manis
greg.manis@mgpingredients.com
913-360-5440


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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,
 2024202320242023
Sales$161,461 $211,624 $522,829 $621,635 
Cost of sales95,646 138,176 310,987 402,068 
Gross profit65,815 73,448 211,842 219,567 
Advertising and promotion expenses9,647 9,505 29,995 25,877 
Selling, general, and administrative expenses17,204 21,570 60,942 65,615 
Impairment of long-lived assets and other— 18,334 137 18,334 
Change in fair value of contingent consideration6,400 4,200 15,900 4,200 
Operating income32,564 19,839 104,868 105,541 
Interest expense, net(2,174)(2,353)(6,398)(4,630)
Other income (expense), net1,026 (25)1,917 5 
Income before income taxes31,416 17,461 100,387 100,916 
Income tax expense7,554 4,373 23,924 24,832 
Net income23,862 13,088 76,463 76,084 
Net loss attributable to noncontrolling interest43 123 162 324 
Net income attributable to MGP Ingredients, Inc.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
Basic22,069,885 22,066,159 22,110,315 22,056,270 
Diluted22,069,885 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 



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MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)

September 30, 2024December 31, 2023
ASSETS  
Current Assets:
Cash and cash equivalents$20,772 $18,388 
Receivables, net130,436 144,286 
Inventory372,153 346,853 
Prepaid expenses4,692 3,580 
Refundable income taxes3,955 1,190 
Total current assets532,008 514,297 
Property, plant, and equipment533,386 489,646 
Less accumulated depreciation and amortization(241,243)(227,343)
Property, plant, and equipment, net292,143 262,303 
Operating lease right-of-use assets, net14,910 13,975 
Investment in joint ventures6,643 5,197 
Intangible assets, net269,265 271,706 
Goodwill321,544 321,544 
Other assets4,106 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 payable53,717 73,594 
Federal and state excise taxes payable2,482 2,251 
Accrued expenses and other19,739 31,861 
Total current liabilities82,338 114,106 
Long-term debt, less current maturities87,784 85,305 
Convertible senior notes195,784 195,544 
Long-term operating lease liabilities11,688 11,292 
Contingent consideration85,100 69,200 
Other noncurrent liabilities3,053 4,763 
Deferred income taxes61,987 63,071 
Total liabilities527,734 543,281 
Total equity912,885 849,067 
TOTAL LIABILITIES AND TOTAL EQUITY$1,440,619 $1,392,348 
 


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MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
 Year to Date Ended September 30,
 20242023
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 amortization16,298 16,272 
Impairment of long-lived assets and other137 18,334 
Share-based compensation2,748 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 consideration15,900 4,200 
Other, net292 376 
Changes in operating assets and liabilities, net of effects of acquisition:  
Receivables, net13,979 (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 payable231 (1,908)
Other, net(609)435 
Net cash provided by operating activities73,512 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 debt70,000 105,000 
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 equivalents46 33 
Increase (decrease) in cash and cash equivalents2,384 (19,859)
Cash and cash equivalents, beginning of period18,388 47,889 
Cash and cash equivalents, end of period$20,772 $28,030 






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MGP INGREDIENTS, INC.
SALES BY OPERATING SEGMENT
(Dollars in thousands)
DISTILLING SOLUTIONS SALES
Quarter Ended September 30,Quarter versus Quarter Sales Change Increase/(Decrease)
20242023$ Change% Change
Brown goods$57,110 $73,409 $(16,299)(22)%
Warehouse services8,264 7,353 911 12 
White goods and other co-products6,545 31,091 (24,546)(79)
Total Distilling Solutions$71,919 $111,853 $(39,934)(36)%
BRANDED SPIRITS SALES
Quarter Ended September 30,Quarter versus Quarter Sales Change Increase/(Decrease)
20242023$ Change% Change
Premium plus$31,086 $30,843 243 1 %
Mid14,788 17,650 (2,862)(16)
Value10,034 11,049 (1,015)(9)
Other6,716 7,277 (561)(8)
Total Branded Spirits$62,624 $66,819 $(4,195)(6)%

INGREDIENT SOLUTIONS SALES
Quarter Ended September 30,Quarter versus Quarter Sales Change Increase / (Decrease)
20242023$ Change% Change
Specialty wheat starches$16,172 $17,196 $(1,024)(6)%
Specialty wheat proteins7,752 11,440 (3,688)(32)
Commodity wheat starches2,611 4,226 (1,615)(38)
Commodity wheat proteins383 90 293 326 
Total Ingredient Solutions$26,918 $32,952 $(6,034)(18)%


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MGP INGREDIENTS, INC.
SALES BY OPERATING SEGMENT
(Dollars in thousands)

DISTILLING SOLUTIONS SALES
Year to Date Ended September 30,Year to Date versus Year to Date Sales Change Increase/(Decrease)
20242023$ Change% Change
Brown goods$198,884 $214,857 $(15,973)(7)%
Warehouse services24,612 20,958 3,654 17 
White goods and other co-products26,663 106,126 (79,463)(75)
Total Distilling Solutions$250,159 $341,941 $(91,782)(27)%
BRANDED SPIRITS SALES
Year to Date Ended September 30,Year to Date versus Year to Date Sales Change Increase/(Decrease)
20242023$ Change% Change
Premium plus$82,699 $73,352 $9,347 13 %
Mid46,610 55,575 (8,965)(16)
Value31,698 36,048 (4,350)(12)
Other15,804 16,343 (539)(3)
Total Branded Spirits$176,811 $181,318 $(4,507)(2)%

INGREDIENT SOLUTIONS SALES
Year to Date Ended September 30,Year to Date versus Year to Date Sales Change Increase/(Decrease)
20242023$ Change% Change
Specialty wheat starches$57,646 $48,977 $8,669 18 %
Specialty wheat proteins28,947 35,918 (6,971)(19)
Commodity wheat starches8,846 12,870 (4,024)(31)
Commodity wheat proteins420 611 (191)(31)
Total Ingredient Solutions$95,859 $98,376 $(2,517)(3)%



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MGP INGREDIENTS, INC.
OPERATING INCOME ROLLFORWARD
(Dollars in thousands)
Operating income, quarter versus quarterOperating Income Change
Operating income for the quarter ended September 30, 2023
$19,839 
Increase in gross profit - Branded Spirits segment
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 other18,334 92 pp
Change in fair value of contingent consideration (2,200)(11)pp
Operating income for the quarter ended September 30, 2024
$32,564 64 %

Operating income, year to date versus year to dateOperating Income Change
Operating income for the year to date ended September 30, 2023
$105,541 
Decrease in gross profit - Ingredient Solutions segment
(16,914)(16)%
Increase in gross profit - Branded Spirits segment
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 other18,197 17 pp
Change in fair value of contingent consideration(11,700)(11)pp
Operating income for the year to date ended September 30, 2024
$104,868 (1)%

(a) Percentage points (“pp”).





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MGP INGREDIENTS, INC.
EARNINGS PER COMMON SHARE (“EPS”) ROLLFORWARD
Change in EPS, quarter versus quarterEPSChange
Basic EPS for the quarter ended September 30, 2023
$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 rate0.01 2 pp
Change in weighted average shares outstanding(0.01)(2)pp
Basic and Diluted EPS for the quarter ended September 30, 2024
$1.07 82 %



Change in EPS, year to date versus year to dateEPSChange
Basic EPS for the year to date ended September 30, 2023
$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 rate0.03 1 pp
Change in weighted average shares outstanding(0.02)(1)pp
Basic and Diluted EPS for the year to date ended September 30, 2024
$3.43 — %

(a) Percentage points (“pp”).
(b) Items are net of tax based on the effective tax rate for the base year (2023).



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MGP INGREDIENTS, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES (UNAUDITED)
(in thousands, except per share amounts)
Quarter Ended September 30, 2024
Operating IncomeIncome 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 September 30, 2023
Operating IncomeIncome before Income TaxesNet Income
MGP Earnings(a)
Basic EPSDiluted 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 September 30, 2024
Operating IncomeIncome 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 September 30, 2023
Operating IncomeIncome before Income TaxesNet Income
MGP Earnings(a)
Basic EPSDiluted 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 







13


MGP INGREDIENTS, INC.
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 September 30, 2024 was 24.0% and 23.8%, respectively.

(c)Fair value of contingent consideration relates to the quarterly adjustment of the contingent consideration liability related to the acquisition of Penelope Bourbon LLC. It is included in the Condensed Consolidated Statement of Income as a component of operating income and relates to the Branded Spirits segment.

(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 Penelope Bourbon LLC.

(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 Atchison distillery. Impairment of long-lived assets and other are included in the Condensed Consolidated Statement of Income as a component of operating income and relates to the Distilling Solutions segment.

(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.


14



MGP INGREDIENTS, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (UNAUDITED)
(in thousands)
Quarter Ended September 30,Year to Date Ended September 30,
2024202320242023
Net Income$23,862 $13,088 $76,463 $76,084 
Interest expense2,174 2,353 6,398 4,630 
Income tax expense7,554 4,373 23,924 24,832 
Depreciation and amortization5,680 5,782 16,298 16,272 
Share based compensation767 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 consideration6,400 4,200 15,900 4,200 
Business acquisition costs15 314 101 1,814 
Executive transition costs— — 1,218 — 
Unusual items costs34 — 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.



15


MGP INGREDIENTS, INC.
NET DEBT LEVERAGE RATIO (UNAUDITED)
(in thousands)

Quarter Ended December 31, 2023Quarter Ended March 31,
2024		Quarter Ended
June 30,
2024		Quarter Ended
September 30,
2024
TTM(a)
September 30, 2024
Net income$31,046 $20,584 $32,017 $23,862 $107,509 
Interest expense2,017 2,019 2,205 2,174 8,415 
Income tax expense9,784 6,262 10,108 7,554 33,708 
Depreciation and amortization5,841 5,289 5,329 5,680 22,139 
Share based compensation1,850 1,116 865 767 4,598 
Equity method investment loss (gain)146 296 (910)(832)(1,300)
Impairment of long-lived assets and other1,057 116 21 — 1,194 
Fair value of contingent consideration2,900 4,100 5,400 6,400 18,800 
Business acquisition costs246 71 15 15 347 
Executive transition costs3,134 375 843 — 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 equivalents20,772 
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.


16


MGP INGREDIENTS, INC.
DILUTIVE SHARES OUTSTANDING CALCULATION (UNAUDITED)

Quarter Ended September 30,Year to Date Ended September 30,
2024202320242023
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 rate10.3911 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 $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 periods exceed 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.


17


MGP INGREDIENTS, INC.
Impact of the Closure of the Atchison Distillery
Segment Operating Results and Pro-Forma Results
Quarter Ended September 30, 2024
(UNAUDITED) (Dollars in thousands)
Distilling Solutions
Quarter Ended September 30, 2024Increase/(Decrease)
As Reported (a)
Pro-Forma(b)
$ Change% Change
Brown goods$57,110 $57,110 $— — %
Warehouse services8,264 8,264 — — 
White goods and other co-products6,545 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 September 30, 2024Increase/(Decrease)
As Reported (a)
Pro-Forma(b)
$ Change% Change
Specialty wheat starches$16,172 $16,172 $— — %
Specialty wheat proteins7,752 7,752 — — 
Commodity wheat starches2,611 2,611 — — 
Commodity wheat proteins383 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 September 30, 2024Increase/(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 September 30, 2024, as reported in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
(b)Represents the Company's results for the quarter ended September 30, 2024 excluding results associated with the Company's Atchison, Kansas distillery. These are pro-forma unaudited financial results. 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 results of the Branded Spirits segment for the quarter ended September 30, 2024 were not impacted by a closure of the Atchison, Kansas distillery.
(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 Atchison Kansas during December 2023.












18


MGP INGREDIENTS, INC.
Impact of the Closure of the Atchison Distillery
Segment Operating Results and Pro-Forma Results
Quarter Ended September 30, 2023
(UNAUDITED) (Dollars in thousands)
Distilling Solutions
Quarter Ended September 30, 2023Increase/(Decrease)
As Reported (a)
Pro-Forma(b)
$ Change% Change
Brown goods$73,409 $73,409 $— — %
Warehouse services7,353 7,353 — — 
White goods and other co-products31,091 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 September 30, 2023Increase/(Decrease)
As Reported (a)
Pro-Forma(b)
$ Change% Change
Specialty wheat starches$17,196 $17,196 $— — %
Specialty wheat proteins11,440 11,440 — — 
Commodity wheat starches4,226 4,226 — — 
Commodity wheat proteins90 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 September 30, 2023Increase/(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 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 quarter ended September 30, 2023 excluding results associated with the Company's Atchison, Kansas distillery. These are pro-forma unaudited financial results. 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 quarter ended September 30, 2023 were not 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.


19

v3.24.3
Cover
Oct. 31, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 31, 2024
Entity Registrant Name MGP Ingredients, Inc.
Entity Incorporation, State or Country Code KS
Entity File Number 0-17196
Entity Tax Identification Number 45-4082531
Entity Address, Address Line One Cray Business Plaza
Entity Address, Address Line Two 100 Commercial Street
Entity Address, Address Line Three Box 130
Entity Address, City or Town Atchison
Entity Address, State or Province KS
Entity Address, Postal Zip Code 66002
City Area Code 913
Local Phone Number 367-1480
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of each class Common Stock, no par value
Trading Symbol MGPI
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000835011
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