2016 fourth quarter results compared to 2015 fourth quarter results
2016 full year results compared to 2015 full year results
"Our fourth quarter and fiscal 2016 results mark further progress against our long term strategic plan," said
Distillery Products - Beverage Alcohol Drives Mix Shift and Gross Margin Gain
For the fourth quarter of 2016, net sales for the Distillery Products segment decreased 1.0% to
Griffin said, "While yearlong softness in the industrial alcohol market offset premium beverage revenue gains, MGP's bourbon and rye whiskeys reported strong revenue growth throughout the year, outperforming the continued steady growth of the bourbon category and contributing to gains in MGP's gross profit and margins."
Food Grade Alcohol | Net Sales Quarter Ended | Quarter vs. Quarter Net Sales Change Increase/(Decrease) | |||||||||||||
2016 | 2015 | $ Change | % Change | ||||||||||||
Premium Beverage Alcohol | $ | 40,818 | $ | 37,486 | $ | 3,332 | 8.9 | % | |||||||
Industrial Alcohol | 18,067 | 22,138 | (4,071 | ) | (18.4 | ) | |||||||||
Food Grade Alcohol | $ | 58,885 | $ | 59,624 | $ | (739 | ) | (1.2 | ) | ||||||
Net Sales Year Ended | Year vs. Year Net Sales Change Increase/(Decrease) | ||||||||||||||
2016 | 2015 | $ Change | % Change | ||||||||||||
Premium Beverage Alcohol | $ | 150,364 | $ | 131,347 | $ | 19,017 | 14.5 | % | |||||||
Industrial Alcohol | 77,290 | 98,917 | (21,627 | ) | (21.9 | ) | |||||||||
Food Grade Alcohol | $ | 227,654 | $ | 230,264 | $ | (2,610 | ) | (1.1 | ) | ||||||
Ingredient Solutions - Improved Performance
For the 2016 fourth quarter, net sales for the Ingredient Solutions segment increased 2.5% to
Griffin said, "Our Ingredient Solutions segment returned to modest growth in the fourth quarter as sales gains in specialty wheat starch more than offset sales declines in commodity wheat starch and proteins versus the prior year period. We continue our work to take full advantage of the macro trends benefitting this segment."
Other
Corporate selling, general and administrative expenses were
MGP
received joint venture equity method investment earnings of
The corporate effective tax rate for the fourth quarter was 31.3%, compared with 35.2% in the year ago quarter. The corporate effective tax rate for the year was 30.3% compared with 31.8% in the prior year.
2017 and Long Term Guidance
MGP is providing the following guidance for fiscal 2017 and beyond.
Conclusion
"2016 was a great year for MGP," Griffin continued. "We built on the solid foundation we set in 2015, and made substantial progress against all of our growth strategies. We maximized the value of our production, achieving strong double digit growth in premium beverage alcohol while steadily migrating away from less attractive industrial alcohol. We captured value share by introducing Till American Wheat Vodka®, acquiring the George Remus® brand, and adding leadership and building out our sales and marketing team to support our brands initiative. We invested to grow, steadily executing our expanded whiskey warehouse plan, and aggressively putting away whiskey. Our MGP aging whiskey inventory has now reached
About
MGP is a leading producer and supplier of premium distilled spirits and specialty wheat proteins and starches. Distilled spirits include premium bourbon and rye whiskeys, gins and vodkas, which are carefully crafted through a combination of art and science and backed by over 150 years of experience. The company's proteins and starches are created in the same manner and provide a host of functional, nutritional and sensory benefits for a wide range of food products. MGP additionally is a top producer of high quality industrial alcohol for use in both food and non-food applications. The company is headquartered in
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements as well as historical information. All statements, other than statements of historical facts, included in this news release regarding the prospects of our industry and our prospects, plans, financial position, business strategy, guidance on growth in operating income, revenue, gross margin, and future effective tax rate may constitute forward-looking statements. In addition, 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. They reflect management's current beliefs and estimates of future economic circumstances, industry conditions, company performance, and company financial results 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 statement. Important factors that could cause actual results to differ materially from our expectations include, among others: (i) disruptions in operations at our
OPERATING INCOME ROLLFORWARD
Operating income quarter-versus-quarter
Operating income | Change | ||||||||
Operating income for the quarter ended | $ | 10,074 | |||||||
Increase in gross profit - distillery products segment | 801 | 8.0 | pp(a) | ||||||
Increase in gross profit - ingredient solutions segment | 1,029 | 10.2 | pp | ||||||
Change in SG&A | (1,306 | ) | (13.0 | ) | pp | ||||
Operating income for the quarter ended | 10,598 | 5.2 | % | ||||||
(a) Percentage points ("pp"). | |||||||||
Operating income year-versus-year
Operating income | Change | ||||||||
Operating income for the year
ended | $ | 32,850 | |||||||
Increase in gross profit - distillery products segment | 6,174 | 18.8 | pp(a) | ||||||
Increase in gross profit - ingredient solutions segment | 576 | 1.8 | pp | ||||||
Change in SG&A | (1,010 | ) | (3.1 | ) | pp | ||||
Change in other operating income, net | 3,385 | 10.3 | pp | ||||||
Operating income for the year ended | $ | 41,975 | 27.8 | % | |||||
(a) Percentage points ("pp"). | |||||||||
EARNINGS PER SHARE ROLLFORWARD
Change in basic and diluted earnings per share quarter-versus-quarter
Basic and Diluted EPS | Change | |||||||
Basic and diluted EPS for the quarter ended | $ | 0.38 | ||||||
Change in operating income: | ||||||||
Operations(a) | 0.02 | 5.3 | pp(b) | |||||
Change in equity method investments(a) | 0.07 | 18.4 | pp | |||||
Change in interest expense(a) | (0.01 | ) | (2.6 | ) | pp | |||
Tax: Change in valuation allowance | 0.01 | 2.6 | pp | |||||
Tax: Change in effective tax rate (excluding tax item above) | 0.01 | 2.6 | pp | |||||
Basic and diluted EPS for the quarter ended | $ | 0.48 | 26.3 | % | ||||
(a) Changes are net of tax based on the effective tax rate for each base year, excluding the change in valuation allowance. | ||||||||
(b) Percentage points ("pp"). | ||||||||
Change in basic and diluted earnings per share year-versus-year
Basic and Diluted EPS | Change | |||||||
Basic and diluted EPS for the year ended | $ | 1.48 | ||||||
Change in operating income: | ||||||||
Operations(a) | 0.21 | 14.2 | pp(b) | |||||
Other operating income, net(a) | 0.13 | 8.8 | pp | |||||
Change in equity method investments(a) | (0.08 | ) | (5.4 | ) | pp | |||
Change in interest expense(a) | (0.03 | ) | (2.0 | ) | pp | |||
Change in weighted average shares outstanding(c) | 0.05 | 3.4 | pp | |||||
Tax: Change in valuation allowance | (0.10 | ) | (6.8 | ) | pp | |||
Tax: Implementation of ASU No. 2016-09 | 0.09 | 6.1 | pp | |||||
Tax: Change in effective tax rate (excluding tax items above) | 0.07 | 4.7 | pp | |||||
Basic and diluted EPS for the year ended | $ | 1.82 | 23.0 | % |
(a) Changes are net of tax based on the effective tax rate for each base year, excluding the change in valuation allowance. |
(b) Percentage points ("pp"). |
(c) Weighted average shares outstanding change primarily due to the vesting of employee restricted
stock units, the granting of Common Stock to directors, our purchase of vested stock from employees to pay withholding taxes, and our repurchases of Common Stock. In September, 2015, our Board of Directors authorized the purchase of 950,000 shares of our Common Stock in a privately negotiated transaction with |
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (UNAUDITED)
Quarter Ended | Year Ended | |||||||||||||||
(Dollars in thousands, except per share) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Sales | $ | 85,005 | $ | 85,072 | $ | 328,081 | $ | 345,887 | ||||||||
Less: excise taxes | 3,860 | 3,563 | 9,818 | 18,283 | ||||||||||||
Net sales | 81,145 | 81,509 | 318,263 | 327,604 | ||||||||||||
Cost of sales | 63,560 | 65,754 | 252,980 | 269,071 | ||||||||||||
Gross profit | 17,585 | 15,755 | 65,283 | 58,533 | ||||||||||||
Selling, general and administrative expenses | 6,987 | 5,681 | 26,693 | 25,683 | ||||||||||||
Other operating costs and losses on sale of assets | — | — | (3,385 | ) | — | |||||||||||
Operating income | 10,598 | 10,074 | 41,975 | 32,850 | ||||||||||||
Equity method investment earnings | 1,776 | 92 | 4,036 | 6,102 | ||||||||||||
Interest expense, net | (314 | ) | (160 | ) | (1,294 | ) | (534 | ) | ||||||||
Income before income taxes | 12,060 | 10,006 | 44,717 | 38,418 | ||||||||||||
Income tax expense | 3,775 | 3,527 | 13,533 | 12,227 | ||||||||||||
Net income | 8,285 | 6,479 | 31,184 | 26,191 | ||||||||||||
Income attributable to participating securities | 254 | 214 | 954 | 873 | ||||||||||||
Net income attributable to common shareholders and used in earnings per share calculation | $ | 8,031 | $ | 6,265 | $ | 30,230 | $ | 25,318 | ||||||||
Share information | ||||||||||||||||
Diluted weighted average common shares | 16,696,787 | 16,552,873 | 16,643,811 | 17,123,556 | ||||||||||||
Basic and diluted EPS | $ | 0.48 | $ | 0.38 | $ | 1.82 | $ | 1.48 | ||||||||
Dividends and dividend equivalents per common share | $ | 0.02 | $ | — | $ | 0.12 | $ | 0.06 | ||||||||
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Dollars in thousands) | 2016 | 2015 | (Dollars in thousands) | 2016 | 2015 | |||||||||||
ASSETS | LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
Current Assets: | Current Liabilities: | |||||||||||||||
Cash and cash equivalents | $ | 1,569 | $ | 747 | Current maturities of long-term debt | $ | 4,359 | $ | 3,345 | |||||||
Receivables | 26,085 | 30,670 | Accounts payable | 20,342 | 20,940 | |||||||||||
Inventory | 78,858 | 58,701 | Accounts payable to affiliate, net | 3,349 | 2,291 | |||||||||||
Prepaid expenses | 1,684 | 1,062 | Accrued expenses | 8,945 | 10,400 | |||||||||||
Refundable income taxes | 2,705 | — | Income taxes payable | — | 685 | |||||||||||
Total Current Assets | 110,901 | 91,180 | Total Current Liabilities | 36,995 | 37,661 | |||||||||||
Other Liabilities: | ||||||||||||||||
Long-term debt, less current maturities | 16,218 | 7,579 | ||||||||||||||
Revolving credit facility | 15,424 | 22,536 | ||||||||||||||
Property and equipment | 246,219 | 229,914 | Deferred credit | 2,978 | 3,402 | |||||||||||
Less accumulated depreciation and amortization | (153,428 | ) | (146,360 | ) | Accrued retirement, health and life insurance benefits | 3,604 | 4,136 | |||||||||
Net Property, Plant | Other non current liabilities | 393 | 79 | |||||||||||||
and Equipment | 92,791 | 83,554 | Deferred income taxes | 3,432 | 2,757 | |||||||||||
Equity method investments | 18,934 | 18,563 | Total Liabilities | 79,044 | 78,150 | |||||||||||
Other assets | 2,710 | 1,013 | Stockholders' equity | 146,292 | 116,160 | |||||||||||
TOTAL ASSETS | $ | 225,336 | $ | 194,310 | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 225,336 | $ | 194,310 |
For More Information Investors & Analysts:Source:Bob Burton 616-233-0500 or Investor.Relations@mgpingredients.com Media:Greg Manis 913-360-5440 or greg.manis@mgpingredients.com
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