UPDATE: MGP Ingredients Reports Record First Quarter 2022 Results

Источник: Nasdaq GlobeNewswire / 05 май 2022 08:16:24 America/New_York

Consolidated sales increased 80.2% from prior year period
Operating income increased 144.3%

ATCHISON, Kan., May 05, 2022 (GLOBE NEWSWIRE) -- MGP Ingredients, Inc. (Nasdaq:MGPI), a leading provider of distilled spirits, branded spirits, and food ingredient solutions, today reported results for the first quarter ended March 31, 2022.

2022 first quarter consolidated results compared to 2021 first quarter

Sales increased 80.2% to $195.2 million, as a result of sales growth in each of the reporting segments.
Gross profit increased 122.4% to $71.8 million, representing 36.8% of sales.
Operating income increased 144.3% to $50.1 million; adjusted operating income increased 123.7% to $50.1 million.
Net income increased 142.2% to $37.4 million; adjusted net income increased 117.3% to $37.4 million.
Adjusted EBITDA increased 115.2% to $55.4 million.
Basic and diluted earnings per share ("EPS") increased to $1.69 per share from $0.90 per share; adjusted basic and diluted EPS increased to $1.69 per share from $1.01 per share.

“We are very pleased with our continued momentum this quarter, which has again yielded record consolidated results,” said David Colo, president and CEO of MGP Ingredients. “Sales of premium beverage alcohol increased 37.7%, while brown goods sales grew 44.4% from last year, due to higher aged whiskey and new distillate sales in our Distilling Solutions segment. Continued strong consumer demand for the premium, super premium, and ultra-premium offerings within our Branded Spirits segment further improved our results as we believe our expansive family of brands and spirits will continue to position us well for incremental growth. Additionally, our diverse product offering within the Ingredient Solutions segment continues to be aligned with strong consumer trends, as evidenced by our record results this quarter.”

Distilling Solutions Segment
In the first quarter of 2022, sales for the Distilling Solutions segment increased 25.8% to $111.5 million, reflecting a 37.7% increase in sales of premium beverage alcohol, primarily due to higher aged whiskey and new distillate sales. Gross profit increased to $38.9 million or 34.9% of segment sales, compared to $28.2 million, or 31.9% of segment sales in the first quarter 2021.

Branded Spirits Segment
For the first quarter of 2022, sales for the Branded Spirits segment totaled $55.8 million, primarily due to the April 1, 2021 Luxco acquisition. Gross profit increased to $24.8 million, or 44.5% of segment sales.

Ingredient Solutions Segment
In the first quarter of 2022, sales in the Ingredient Solutions segment increased 46.2% to $28.0 million. Gross profit increased to $8.1 million, or 29.0% of segment sales, compared to $4.0 million, or 20.7% of segment sales in the first quarter 2021.

Other
Corporate selling, general and administrative ("SG&A") expenses for the first quarter 2022, inclusive of advertising and promotion expenses, increased $10.0 million to $21.8 million as compared to the first quarter 2021, primarily driven by the assumption of Luxco’s SG&A expenses.

The corporate effective tax rate for the quarter was 23.0% and remained unchanged from the year ago period.

“We are off to another strong start to the year, and remain committed to the execution of our long-term growth strategy,” said Colo. “We believe the underlying macro consumer trends that are supporting each of our business segments remain strong. The three recently announced expansionary projects remain on track, which we believe will enable us to meet the continued strong demand we’re experiencing. Our capital allocation strategy remains focused on organic and acquisitive growth, which aligns well with our long-term strategy.”

2022 Outlook
MGP is confirming the following consolidated guidance for fiscal 2022:

Sales are projected to be in the range of $690 million to $715 million.
Adjusted EBITDA is expected to be in the range of $150 million to $157 million.
Basic adjusted earnings per share are forecasted to be in the $4.15 to $4.35 range, with basic weighted average shares outstanding expected to be approximately 22.0 million at year end.

Full year 2022 guidance measures of adjusted EBITDA and basic adjusted earnings per share are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because MGP is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition related expenses, restructuring and related expenses, and other items not reflective of MGP’s ongoing operations.

Conference Call and Webcast Information
MGP 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, and 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 U.S. distilleries in Kentucky, Indiana, Kansas, and Washington D.C., 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 five 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; MGP’s historic distillery in Lawrenceburg, Indiana, where the George Remus Straight Bourbon Whiskey and Rossville Union Straight Rye Whiskey are produced; and the Washington, D.C.-based Green Hat Distillery, producer of the Green Hat family of gins. The innovative and high-quality brand portfolio also includes Everclear Grain Alcohol, Pearl Vodka, 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
The forward-looking statements contained herein include, but are not limited to, statements about the expected effects on MGP Ingredients, Inc. ("the Company") of continuing consumer trends and our announced expansionary projects. Forward looking statements are usually identified by or are associated with such words as “intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,” “hopeful,” “should,” “may,” “will,” “could,” “encouraged,” “opportunities,” “potential,” and/or the negatives or variations of these terms or similar terminology.

These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, and Company financial results and financial condition and are not guarantees of future performance. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, (i) disruptions in operations at our Atchison facility, our Lawrenceburg facility, or any Luxco facility, (ii) the availability and cost of grain, flour, and agave, and fluctuations in energy costs, (iii) the effectiveness of our grain purchasing program to mitigate our exposure to commodity price fluctuations, (iv) the effectiveness or execution of our strategic plan, (v) potential adverse effects to operations and our system of internal controls related to the loss of key management personnel, (vi) the competitive environment and related market conditions, (vii) the impact of the COVID-19 pandemic, (viii) the effects of inflation and the ability to effectively pass raw material and other price increases on to customers, (ix) our ability to maintain compliance with all applicable loan agreement covenants, (x) increases in interest rate, (xi) our ability to realize operating efficiencies, (xii) actions of governments, and (xiii) consumer tastes and preferences. For further information on these and other risks and uncertainties that may affect our business, including risks specific to our Distilling Solutions, Branded Spirits and Ingredient Solutions segments, see Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021.

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, MGP has disclosed adjusted gross profit, adjusted operating income, adjusted income before taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA and basic and diluted adjusted earnings per share. The presentation of non-GAAP financial measures should be reviewed in conjunction with gross profit, operating income, income before taxes, net income, net income attributable to common shareholders and basic and diluted earnings per share computed in accordance with U.S. GAAP and should not be considered a substitute for these GAAP measures. The non-GAAP adjustments referenced in the section entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures," take into account the impacts of items that are not necessarily ongoing in nature and/or predictive of the Company's operating trends. We believe that these 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 these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure.

For More Information
Investors & Analysts:
Mike Houston
646-475-2998 or investor.relations@mgpingredients.com

Media:
Greg Manis
913-360-5440 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 quarter ended March 31, 2021	$	20,500
Increase in gross profit - Branded Spirits segment		24,696		120.5		pp^(a)
Increase in gross profit - Distilling Solutions segment		10,688		52.1		pp
Increase in gross profit - Ingredient Solutions segment		4,138		20.2		pp
Increase in Advertising and promotion expenses		(4,651	)	(22.7	)	pp
Increase in SG&A expenses		(5,320	)	(26.0	)	pp
Increase in Other operating income, net		29		0.1		pp
Operating income for quarter ended March 31, 2022	$	50,080		144.3	%

^(a) Percentage points (“pp”).

MGP INGREDIENTS, INC.
EARNINGS PER SHARE (“EPS”) ROLLFORWARD

Change in basic and diluted EPS, quarter versus quarter	Basic and Diluted EPS			Change
Basic and diluted EPS for quarter ended March 31, 2021	$	0.90
Increase in Operating income^(b)		1.34		148.9		pp^(a)
Change in income allocated to participating securities		0.01		1.1		pp
Change in interest expense, net ^(b)		(0.05	)	(5.6	)	pp
Change in weighted average shares outstanding		(0.51	)	(56.7	)	pp
Basic and diluted EPS for quarter ended March 31, 2022	$	1.69		87.7	%

(a) Percentage points (“pp”).
(b) Items are net of tax based on the effective tax rate for the base year (2021).

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

	DISTILLING SOLUTIONS SALES
	Quarter Ended March 31,				Quarter versus Quarter Sales Change Increase/(Decrease)
		2022		2021	$ Change			% Change
Brown goods	$	62,145	$	43,041	$	19,104		44.4	%
White goods		20,086		16,657		3,429		20.6
Premium beverage alcohol		82,231		59,698		22,533		37.7
Industrial alcohol		11,495		17,336		(5,841	)	(33.7	)
Food grade alcohol		93,726		77,034		16,692		21.7
Fuel grade alcohol		3,282		2,517		765		30.4
Distillers feed and related co-products		8,917		4,972		3,945		79.3
Warehouse services		5,584		4,101		1,483		36.2
Total Distilling Solutions	$	111,509	$	88,624	$	22,885		25.8	%

	BRANDED SPIRITS SALES
	Quarter Ended March 31,				Quarter versus Quarter Sales Change Increase/(Decrease)
		2022		2021	$ Change		% Change
Ultra premium	$	12,597	$	126	$	12,471	9,897.6	%
Super premium		2,946		411		2,535	616.8
Premium		6,140		26		6,114	23,515.4
Mid		19,273		—		19,273	N/A
Value		11,299		—		11,299	N/A
Other		3,496		7		3,489	49,842.9
Total Branded Spirits	$	55,751	$	570	$	55,181	9,680.9	%

	INGREDIENT SOLUTIONS SALES
	Quarter Ended March 31,				Quarter versus Quarter Sales Change Increase / (Decrease)
		2022		2021	$ Change			% Change
Specialty wheat starches	$	15,203	$	10,222	$	4,981		48.7	%
Specialty wheat proteins		9,419		6,046		3,373		55.9
Commodity wheat starches		3,353		2,283		1,070		46.9
Commodity wheat proteins		—		578		(578	)	N/A
Total Ingredient Solutions	$	27,975	$	19,129	$	8,846		46.2	%

MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)

	Quarter Ended March 31,
		2022			2021
Sales	$	195,235		$	108,323
Cost of sales		123,414			76,024
Gross profit		71,821			32,299

Advertising and promotion expenses		5,504			853
Selling, general and administrative expenses		16,266			10,946
Other operating income, net		(29	)		—
Operating income		50,080			20,500

Interest expense, net		(1,598	)		(488	)
Other income, net		54			30
Income before income taxes		48,536			20,042

Income tax expense		11,165			4,615
Net income		37,371			15,427

Net loss attributable to noncontrolling interest		66			—
Net income attributable to MGP Ingredients, Inc.		37,437			15,427

Income attributable to participating securities		(318	)		(146	)
Net income used in earnings per share calculation	$	37,119		$	15,281

Basic and diluted weighted average common shares		21,989,100			16,928,003

Basic and diluted earnings per common share	$	1.69		$	0.90

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

March 31, 2022

December 31, 2021

March 31, 2022

December 31, 2021

ASSETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Assets:

Current Liabilities:

Cash and cash equivalents

27,295

21,568

Current maturities of long-term debt

3,228

3,227

Receivables, net

102,062

92,537

Accounts payable

52,763

53,712

Inventory

259,517

245,944

Federal and state excise taxes payable

6,476

6,992

Prepaid expenses

6,391

1,510

Income taxes payable

5,437

—

Refundable income taxes

—

5,539

Accrued expenses and other

16,559

24,869

Total Current Assets

395,265

367,098

Total Current Liabilities

84,463

88,800

Property, plant, and equipment

433,017

428,249

Other liabilities:

Less accumulated depreciation and amortization

(225,651

)

(220,963

)

Long-term debt, less current maturities

34,463

35,266

Property, Plant, and Equipment, net

207,366

207,286

Convertible senior notes

194,986

194,906

Operating lease right-of-use assets, net

15,981

9,671

Long-term operating lease liabilities

12,595

6,997

Investment in joint ventures

6,366

4,944

Other noncurrent liabilities

4,513

5,132

Intangible assets, net

218,320

218,838

Deferred income taxes

66,394

66,101

Goodwill

226,294

226,294

Total Liabilities

397,414

397,202

Other assets

7,227

7,336

Total equity

679,405

644,265

TOTAL ASSETS

1,076,819

1,041,467

TOTAL LIABILITIES AND TOTAL EQUITY

1,076,819

1,041,467

MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)

	Quarter Ended March 31,
		2022			2021
Cash Flows from Operating Activities
Net income	$	37,371		$	15,427
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,621			3,311
Share-based compensation		1,373			3,229
Gain on equity method investment		(394	)		—
Deferred income taxes, including change in valuation allowance		347			(648	)
Other, net		24			—
Changes in operating assets and liabilities:
Receivables, net		(9,601	)		(4,348	)
Inventory		(13,696	)		4,924
Prepaid expenses		657			(1,084	)
Income taxes payable		5,437			5,237
Accounts payable		4,638			509
Accrued expenses and other		(8,896	)		(8,278	)
Federal and state liquor excise payable		(515	)		(107	)
Other, net		(136	)		(1,182	)
Net cash provided by operating activities		22,230			16,990

Cash Flows from Investing Activities
Additions to property, plant, and equipment		(10,642	)		(12,059	)
Contributions to equity method investment		(1,028	)		—
Other, net		(363	)		(1,281	)
Net cash used in investing activities		(12,033	)		(13,340	)

Cash Flows from Financing Activities
Payment of dividends and dividend equivalents		(2,661	)		(2,052	)
Purchase of treasury stock		(714	)		(674	)
Principal payments on long-term debt		(807	)		—
Net cash used in financing activities		(4,182	)		(2,726	)

Effect of exchange rate changes on cash		(288	)		—
Increase in cash and cash equivalents		5,727			924
Cash and cash equivalents, beginning of period		21,568			21,662
Cash and cash equivalents, end of period	$	27,295		$	22,586

MGP INGREDIENTS, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES (UNAUDITED)
(in thousands)

Quarter Ended March 31, 2022

Gross Profit

Operating Income

Income before Income Taxes

Net Income

MGP Earnings^(a)

Basic and Diluted EPS

Reported GAAP Results

71,821

50,080

48,536

37,371

37,119

1.69

No adjustments for the period

—

Adjusted Non-GAAP results