MGP Ingredients, Inc. Reports First Quarter Results
05/06/2013
Highlights
- Net sales even with prior year; growth in premium beverages offset by lower industrial volumes
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Income from operations has improved for four consecutive quarters, reaching
$1.2 million in the first quarter compared with a loss of$2.3 million in the year-ago period - Company sets aggressive agenda for premium spirits in 2013, including continued growth in whiskey distillates, new mash bills for whiskeys and bourbons, and a customer innovation center
Net sales for the first quarter were approximately even compared with the year-ago period. Higher beverage alcohol sales continue to offset the reduction in sales of bulk alcohol for industrial applications. Premium spirits growth at the
First quarter income from operations improved significantly to
"Business remains challenging in bulk white goods, which still represent the majority of our alcohol sales," said
He continued, "We've made real progress over the past few quarters. I credit our employees, including key personnel we added in the areas of supply chain, plant operations and finance. The addition of whiskeys and bourbons to our revenue mix has certainly helped our profitability, and that holds even greater potential in the coming years."
"MGP is gearing up for the next phase of growth in premium spirits," Newkirk said. "The first year of ownership of our new distillery was mainly about honoring past contracts and showing that we can deliver a quality product. At the same time, our expanded sales team has brought in a significant number of new customers. More recently, we raised our profile among the hundreds of artisan craft distillers with the release of our new mash bills. Almost half of the spirits industry growth in 2012 was from flavored new products. We are uniquely positioned to support a large number of famous and emerging distiller brands with new product development, production and warehousing. Our
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Distillery products sales for the first quarter were
$70.8 million , a decrease of 2.3 percent compared to the prior year quarter. Increases in sales of premium spirits, whiskeys, bourbons and distillers feed were offset by declines in lower-grade industrial alcohol products.
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The distillery products segment reported first quarter pre-tax operating income of
$4.3 million , or 6.1 percent of sales, compared to a pre-tax profit of$2.6 million , or 3.7 percent of sales, during the same quarter a year ago. Quarter over quarter, pricing for distillery products out-paced increased market costs for corn and natural gas. For the first quarter, the per-bushel cost of corn averaged 19.7 percent higher than a year ago and natural gas increased by an average of 3.7 percent over the same period.
Food Ingredients
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Ingredient segment sales for the first quarter were
$15.4 million , an increase of 13.4 percent from the prior year's quarter. Sales benefited from both higher average pricing and unit volumes.
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The ingredients segment reported first quarter pre-tax operating income of
$1.5 million , or 10.2 percent of sales, compared with income of$1.6 million , or 12.1 percent of sales, for the same quarter a year ago. Profits were approximately even with the prior year due to higher average selling prices offset by increases in the average cost of flour and natural gas.
Bioplastics
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Sales of the Company's plant-based bioplastics business in the first quarter were
$198,000 compared with$281,000 in the same period one year ago. The decline in sales was mainly due to the sale of this business onFebruary 8, 2013 . The Company reported a pre-tax operating loss of$90,000 compared to a pre-tax loss of$96,000 in the prior year's quarter.
Outlook
Newkirk said, "MGP is running more efficiently, and it's helping to counter the effects of weak markets for bulk white goods and high input prices. We continue to reshape our product mix and our balance sheet to support growth opportunities in our premium markets. Our strategic business partners continue to play a key role in MGP's future, especially as we take these relationships to the next level. With the addition of our new distillery, we're exploring systemwide opportunities for optimizing storage and transportation, as well as protecting our margin on materials."
He concluded, "We've come through a volatile and protracted grain cycle in very good shape. More importantly, our future success will not be dependent on input prices as it was in years past. We think that the acquisition of the
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. Distilled spirits are produced at facilities in the adjacent towns of
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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CONSOLIDATED STATEMENTS OF INCOME | ||
(unaudited) | Quarter Ended | |
(Dollars in thousands, except per share) |
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Gross Sales |
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Less Excise Taxes | 2,314 | 2,086 |
Net Sales | 86,404 | 86,344 |
Cost of Sales | 79,175 | 80,765 |
Gross Profit | 7,229 | 5,579 |
Selling, General and Administrative Expenses | 5,875 | 7,748 |
Other Operating Costs and Losses on Sale of Assets | 58 | 74 |
Income (Loss) from Operations | 1,296 | (2,243) |
Gain on Sale of Joint Venture Interest | -- | 4,055 |
Interest Income | 6 | 2 |
Interest Expense | (289) | (255) |
Equity in Earnings (Loss) | (942) | 437 |
Income from Continuing Operations Before Income Taxes | 71 | 1,996 |
Provision for Income Taxes | -- | 120 |
Net Income from Continuing Operations | 71 | 1,876 |
Discontinued Operations, Net of Tax | 1,406 | -- |
Net Income | 1,477 | 1,876 |
Other Comprehensive Income (Loss) | (149) | 173 |
Comprehensive Income | $ 1,328 | $ 2,049 |
Basic and Diluted Earnings per Share | ||
Net Income | $ 0.08 |
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Weighted average shares outstanding — Basic | 16,999,146 | 16,916,304 |
Weighted average shares outstanding — Diluted | 16,999,146 | 16,919,308 |
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CONSOLIDATED BALANCE SHEET(UNAUDITED) | |||||
(Dollars in thousands) | Mar. 31, 2013 | Dec. 31, 2012 | (Dollars in thousands) |
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ASSETS | LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Assets: | Current Liabilities: | ||||
Restricted Cash | $ -- |
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Current Maturities of Long-term Debt |
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$1,683 |
Receivables | 34,345 | 35,325 | Accounts Payable | 22,977 | 18,860 |
Inventory | 38,998 | 36,532 | Accounts Payable to Affiliate, Net | 721 | 4,008 |
Prepaid Expenses | 1,351 | 697 | Accrued Expenses | 6,677 | 5,220 |
Deferred Income Taxes | 5,044 | 5,283 | Total Current Liabilities | 32,017 | 29,771 |
Refundable Income Taxes | 280 | 242 | |||
Total Current Assets | 80,018 | 78,091 | Other Liabilities: | ||
Long-term Debt, Less Current Maturities | 4,783 | 5,168 | |||
Revolving Credit Facility | 21,766 | 25,893 | |||
Property and Equipment, at Cost | 188,764 | 190,519 | Deferred Credit | 4,036 | 4,133 |
Less Accumulated Depreciation | (116,227) | (115,128) | Accrued Retirement, Health and Life | ||
Insurance Benefits | 4,985 | 5,096 | |||
Net Property, Plant and | Other Noncurrent Liabilities | 1,006 | 1,000 | ||
Equipment | 72,537 | 75,391 | Noncurrent Deferred Income Taxes | 5,044 | 5,283 |
Total Other Liabilities | 41,620 | 46,573 | |||
Equity Method Investments | 6,347 | 7,301 | Total Liabilities | 73,637 | 76,344 |
Other Assets | 2,312 | 2,388 | Stockholders' Equity | 87,577 | 86,827 |
TOTAL LIABILITIES AND | |||||
TOTAL ASSETS |
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STOCKHOLDERS' EQUITY |
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Capital Structure | |||||
Net Investment in: | Financed By: | ||||
Working Capital |
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$ 48,320 | Long-term Debt* |
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Property, Plant and Equipment | 72,537 | 75,391 | Deferred Liabilities | 15,071 | 15,512 |
Other Noncurrent Assets | 8,659 | 9,689 | Stockholders' Equity | 87,577 | 86,827 |
Total |
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Total |
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*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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