MGP Ingredients Reports Record First Quarter 2022 Results
05/05/2022
Consolidated sales increased 80.2% from prior year period
Operating income increased 144.3%
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
Distilling Solutions Segment
In the first quarter of 2022, sales for the Distilling Solutions segment increased 25.8% to
Branded Spirits Segment
For the first quarter of 2022, sales for the
Ingredient Solutions Segment
In the first quarter of 2022, sales in the Ingredient Solutions segment increased 46.2% to
Other
Corporate selling, general and administrative ("SG&A") expenses for the first quarter 2022, inclusive of advertising and promotion expenses, increased
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
Webcast: | ir.mgpingredients.com on the Events & Presentations page | |
Conference Call: | 844-308-6398 (domestic) or 412-717-9605 (international) |
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
The forward-looking statements contained herein include, but are not limited to, statements about the expected effects on
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
Non-GAAP Financial Measures
In addition to reporting financial information in accordance with
For More Information
Investors & Analysts:
646-475-2998 or investor.relations@mgpingredients.com
Media:
913-360-5440 or greg.manis@mgpingredients.com
OPERATING INCOME ROLLFORWARD
(Dollars in thousands)
Operating income, quarter versus quarter | Operating Income | Change | ||||||
Operating income for quarter ended |
$ | 20,500 | ||||||
Increase in gross profit - |
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 |
$ | 50,080 | 144.3 | % |
(a) Percentage points (“pp”).
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 |
$ | 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 |
$ | 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).
SALES BY OPERATING SEGMENT
(Dollars in thousands)
DISTILLING SOLUTIONS SALES | |||||||||||||
Quarter Ended |
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 |
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 | ||||||||
$ | 55,751 | $ | 570 | $ | 55,181 | 9,680.9 | % |
INGREDIENT SOLUTIONS SALES | |||||||||||||
Quarter Ended |
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 | % | |||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
Quarter Ended |
||||||||
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 |
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 | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
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 | |||||||||
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 | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Quarter Ended |
||||||||
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 | ||||
RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES (UNAUDITED)
(in thousands)
Quarter Ended |
|||||||||||||||||
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 | $ | 71,821 | $ | 50,080 | $ | 48,536 | $ | 37,371 | $ | 37,119 | $ | 1.69 |
Quarter Ended |
|||||||||||||||||
Gross Profit | Operating Income | Income before Income Taxes | Net Income | MGP Earnings(a) | Basic and Diluted EPS | ||||||||||||
Reported GAAP Results | $ | 32,299 | $ | 20,500 | $ | 20,042 | $ | 15,427 | $ | 15,281 | $ | 0.90 | |||||
Adjusted to remove: | |||||||||||||||||
Business acquisition costs (b) | — | 1,890 | 1,890 | 1,768 | 1,768 | 0.11 | |||||||||||
Adjusted Non-GAAP results | $ | 32,299 | $ | 22,390 | $ | 21,932 | $ | 17,195 | $ | 17,049 | $ | 1.01 |
(a) | MGP Earnings has been defined as "Net income used in Earnings Per Share calculation." |
(b) | The Business acquisition costs are included in the Condensed Consolidated Statement of Income within the Selling, general and administrative line item. The adjustment includes transaction and integration costs associated with the merger with |
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(UNAUDITED)
(in thousands)
Quarter Ended |
||||||
2022 | 2021 | |||||
Net Income | $ | 37,371 | $ | 15,427 | ||
Interest expense | 1,598 | 488 | ||||
Income tax expense | 11,165 | 4,615 | ||||
Depreciation and amortization | 5,621 | 3,311 | ||||
Equity method investment | (394 | ) | — | |||
Business acquisition costs | — | 1,890 | ||||
Adjusted EBITDA | $ | 55,361 | $ | 25,731 |
The non-GAAP adjusted EBITDA measure is defined as earnings before interest, taxes, depreciation and amortization, equity method investment and business acquisition costs. See section "reconciliation of selected GAAP measure to non-GAAP measures" for further details on each of these non-GAAP Items.

Source: MGP Ingredients