MGP Ingredients, Inc. Reports Results for First Quarter of New Fiscal Year
05/09/2012
Highlights
- Q1 net sales up 34% vs. year ago led by food grade alcohol
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Q1 net income per share of
$0.10 vs. year ago income of$0.04 per share, driven by gain associated with sale of joint venture interest -
Distillery sales up 44% to
$72.4 million for Q1 vs. prior-year period - Q1 operating profits impacted by unfavorable change in open commodity contracts, plus one-time expenses for LDI acquisition and corporate restructuring
Net income for the three-month period ended
"We're making great progress in terms of a higher value sales mix, thanks in part to the addition of premium bourbons and whiskeys to our product portfolio," said
For the first quarter ended
Distillery Products Segment Review
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Distillery products sales for the first quarter were
$72.4 million , an increase of 44 percent compared to the prior year quarter. The majority of this increase was attributable to an$18.4 million , or 44 percent, rise in sales of high quality food grade alcohol, driven by per unit pricing gains of 27 percent and unit volume increases of approximately 13 percent. Non-food grade alcohol sales declined by 12 percent compared with the prior-year period. The recent acquisition of LDI's beverage alcohol distillery added significant new volume this quarter compared to one year ago. -
The distillery products segment reported first quarter pre-tax operating income of
$2.6 million compared to pre-tax operating income of$5.4 million during the same quarter a year ago. Despite higher unit volumes and per unit pricing of food grade alcohol, pre-tax margins were impacted by accounting for open commodity contracts as earlier stated. The per-bushel cost of corn for the three months averaged 6 percent higher than the same period a year ago. Quarter-on-quarter comparison was negatively affected by a$2.3 million difference in the profit impacts of open hedge contracts, as mentioned above.
Ingredient Solutions Segment Review
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Ingredient segment sales for the first quarter were
$13.5 million , approximately even with the prior year's quarter. Higher average pricing more than offset declines in unit volume. While sales of commodity starches increased significantly during the quarter, the Company remains focused on sales of its specialty starches and proteins. -
The ingredients segment reported a first quarter pre-tax operating income of
$1.6 million compared to pre-tax operating income of$100,000 for the quarter a year ago. This was principally due to improved average selling prices, a higher value product mix and lower natural gas prices. Flour costs averaged approximately 5 percent higher compared with the prior-year period.
Other Segment Review
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Sales of the Company's plant-based biopolymers in the first quarter were
$281,000 , which was modestly lower than prior year levels. The Company reported a pre-tax operating loss of$96,000 compared to a pre-tax loss of$175,000 in the prior year's quarter. InJanuary 2012 , MGPI announced an externally funded project with theKansas Alliance for Biorefining and Bioenergy and fourKansas universities. The goal is to find innovative ways to produce cost-competitive bio-based foams, plastics, and other materials from distillers dried grains and soluables.
Newkirk concluded, "We've made significant changes at MGPI over the years in terms of our product portfolio, our cost structure and our business processes. As a result, we are generating profitable sales in the face of near-record commodity costs, compared with significant losses during the last period in which prices approached these levels. However, this is only a starting point. With initiatives like our new raw materials strategy and the addition of higher value beverages from our newly-acquired
About
In business since 1941,
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) | Mar. 31, 2012 | Mar. 31, 2011 |
Gross Sales |
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Less Excise Taxes | 2,086 | 23 |
Net Sales |
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Cost of Sales | 80,765 | 57,669 |
Gross Profit |
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Selling, General and Administrative Expenses |
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Other operating costs | 74 | -- |
Income (loss) from Operations |
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Gain on Joint Venture Interest | 4,055 | -- |
Other Income, Net | 2 | 3 |
Interest Expense | (255) | (92) |
Equity in earnings of joint ventures | 437 | 124 |
Income Before Income Taxes |
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Provision for Income Taxes | 120 | 163 |
Net Income |
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Other Comprehensive Income | 173 | 17 |
Comprehensive Income |
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Basic Earnings Per Common Share |
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Diluted Earnings Per Common Share |
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Weighted average shares outstanding — |
16,916,304 | 16,711,938 |
Weighted average shares outstanding — Diluted | 16,919,308 | 16,732,812 |
CONSOLIDATED BALANCE SHEET (UNAUDITED) | |||||
(Dollars in thousands) |
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(Dollars in thousands) |
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ASSETS | LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Assets: | Current Liabilities: | ||||
Cash and cash equivalents | $ -- |
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Current maturities on long-term debt |
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Restricted cash | 6,151 | 7,605 | Revolving credit facility | 21,792 | 21,142 |
Receivables | 35,788 | 27,804 | Accounts payable | 20,970 | 22,704 |
Inventory | 34,318 | 31,082 | Accounts payable to affiliate, net | 4,787 | 6,167 |
Prepaid expenses | 1,367 | 958 | Accrued expenses | 5,841 | 4,023 |
Deposits | -- | -- | Derivative Liabilities | 3,165 | 3,465 |
Deferred income taxes | 6,802 | 6,056 | Total Current Liabilities |
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Refundable income taxes | 446 | 566 | Other Liabilities: | ||
Derivative Assets | -- | 1,304 | Long-term debt, less current maturities | 6,425 | 6,852 |
Assets held for sale | -- | 2,300 | Deferred credit | 4,045 | 4,195 |
Total Current Assets |
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Accrued retirement, health and life insurance benefits | 6,415 | 6,309 |
Property and equipment, at cost | 186,036 | 185,386 | Other non-current liabilities | 1,744 | 2,144 |
Less accumulated depreciation | (111,143) | (108,307) | Noncurrent deferred income taxes | 6,802 | 6,056 |
Net property, plant and | Total Other Liabilities |
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equipment |
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Total Liabilities |
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Investment in unconsolidated subsidiary | 8,049 | 12,147 | Stockholders' Equity | 85,918 | 84,430 |
Other assets | 1,774 | 1,873 | TOTAL LIABILITIES AND | ||
TOTAL ASSETS |
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STOCKHOLDERS' EQUITY |
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Capital Structure | |||||
Net Investment in: | |||||
Cash and cash equivalents | $ -- |
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Financed By: | |||||
Working capital |
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Long-term debt* |
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Property, plant and equipment | 74,893 | 77,079 | Deferred liabilities | 19,006 | 18,704 |
Other non-current assets | 9,823 | 14,020 | Stockholders' equity | 85,918 | 84,430 |
Total |
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Total |
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*Excludes short-term portion. Short- term portion is included within working capital. |
CONTACT:Source:Marta Myers , 913-367-1480
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