MGP Ingredients, Inc. Reports First Quarter 2014 Results
05/08/2014
Highlights
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Net income of
$4.7 million , or$0.26 per diluted share compared with$0.08 a year ago - Net sales down 9 percent vs year ago due to lower pricing relative to lower corn costs
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Income from operations of
$1.7 million compared with$1.2 million in the prior year quarter -
Joint venture benefits from favorable market conditions, contributing
$3.3 million to pre-tax net income
Net sales for the first quarter declined by approximately 9 percent from the year-ago quarter. Beverage alcohol sales improved significantly on higher shipments from the
The Company's gross profit during the first quarter was
The distillery products segment reported first quarter pre-tax operating income of
Food Ingredients
The ingredients segment reported first quarter pre-tax operating income of
Summary
Regarding the outlook, the Company expects strong profitability in white goods again in the second quarter, but is cautiously planning for more normalized pricing in the second half of 2014. While orders for premium spirits remain strong, the Company is facing a tight supply of oak barrels, which could impact the timing of shipments later in the year. Selling, general and administrative expenses are running at reduced levels when compared with 2013, after adjusting for severance and proxy-related costs incurred in the prior year period. On balance, current trends indicate improved annual operating performance over the prior year driven by increased gross margin and lower SG&A costs.
About
MGP is a leading independent supplier of premium spirits, offering flavor innovations and custom distillery blends to the beverage alcohol industry. The Company also produces high quality food grade industrial alcohol and formulates grain-based starches and proteins into nutritional, as well as highly functional, innovations for the branded consumer packaged goods industry. The Company is headquartered in
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements as well as historical information. 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 of these terms or variations of them or similar terminology. They reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance and 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. Investors should not place undue reliance upon forward-looking statements and the
Company undertakes no obligation to publicly update or revise any forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, among others: (i) disruptions in operations at our
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
(unaudited) | Quarter and Year to Date Ended | |
(Dollars in thousands, except per share) |
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Sales | $ 84,582 | $ 88,718 |
Less: excise taxes | 5,586 | 2,314 |
Net sales | 78,996 | 86,404 |
Cost of sales | 72,195 | 79,175 |
Gross profit | 6,801 | 7,229 |
Selling, general and administrative expenses | 5,072 | 5,875 |
Other operating costs and losses on sale of assets | — | 58 |
Income from operations | 1,729 | 1,296 |
Interest expense, net | (197) | (283) |
Equity method investment earnings (loss) | 3,334 | (942) |
Income from continuing operations before income taxes | 4,866 | 71 |
Provision for income taxes | 81 | — |
Net income from continuing operations | 4,785 | 71 |
Discontinued operations, net of tax | — | 1,406 |
Net income | 4,785 | 1,477 |
Other comprehensive loss, net of tax | (175) | (149) |
Comprehensive income | $ 4,610 | $ 1,328 |
Basic and diluted earnings per share | ||
Net income | $ 0.26 | $ 0.08 |
Weighted average shares outstanding - Basic | 17,246,251 | 16,999,146 |
Weighted average shares outstanding - Diluted | 17,246,251 | 16,999,146 |
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CONSOLIDATED BALANCE SHEET (UNAUDITED) | |||||
(Dollars in thousands) |
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2013 |
(Dollars in thousands) |
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2013 |
ASSETS | LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Assets: | Current Liabilities: | ||||
Cash and cash equivalents | $ — | $ 2,857 | Current maturities of long-term debt | $ 1,570 | $ 1,557 |
Receivables | 31,871 | 27,821 | Accounts payable | 18,552 | 23,107 |
Inventory | 30,875 | 34,917 | Accounts payable to affiliate, net | 2,564 | 1,204 |
Prepaid expenses | 2,035 | 848 | Accrued expenses | 7,239 | 8,282 |
Deferred income taxes | 4,162 | 4,977 | Total Current Liabilities | 29,925 | 34,150 |
Refundable income taxes | 258 | 466 | Other Liabilities: | ||
Total Current Assets | 69,201 | 71,886 | Long-term debt, less current maturities | 3,214 | 3,611 |
Revolving credit facility | 18,455 | 18,000 | |||
Property and equipment | 195,667 | 194,687 | Deferred credit | 3,770 | 3,925 |
Less accumulated depreciation and amortization | (127,409) | (124,443) | Accrued retirement, health and life insurance benefits | 4,363 | 4,423 |
Other noncurrent liabilities | 662 | 640 | |||
Deferred income taxes | 4,162 | 4,977 | |||
Net Property, Plant and Equipment | 68,258 | 70,244 | Total Liabilities | 64,551 | 69,726 |
Equity method investments | 10,458 | 7,123 | Stockholders' equity | 85,351 | 81,603 |
Other noncurrent assets | 1,985 | 2,076 | |||
TOTAL ASSETS | $ 149,902 | $ 151,329 | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 149,902 | $ 151,329 |
Capital Structure | |||||
Net Investment in: | Financed By: | ||||
Working capital | $ 39,276 | $ 37,736 | Long-term debt* | $ 21,669 | $ 21,611 |
Property, plant and equipment | 68,258 | 70,244 | Deferred liabilities | 12,957 | 13,965 |
Other noncurrent assets | 12,443 | 9,199 | Stockholders' equity | 85,351 | 81,603 |
Total | $ 119,977 | $ 117,179 | Total | $ 119,977 | $ 117,179 |
*Excludes short-term portion. Short-term portion is included within working capital. |
CONTACT: Investors & Analysts:Source:George Zagoudis , Investor Relations 913-360-5441 or george.zagoudis@mgpingredients.com Media:Shanae Randolph , Corporate Director of Communications 913-360-5442 or shanae.randolph@mgpingredients.com
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