MGP Ingredients Reports Record Fourth Quarter and Full Year 2021 Results
02/24/2022
Full year consolidated sales increased 58.5% from prior year period
Full year operating income increased 133.0%
2021 fourth quarter consolidated results compared to 2020 fourth quarter
- Sales increased 65.3% to
$166.8 million , as a result of sales growth in each of the reporting segments. - Gross profit increased 66.3% to
$52.8 million , representing 31.6% of consolidated sales. - Operating income increased 191.6% to
$45.3 million ; adjusted operating income increased 70.5% to$29.0 million . - Adjusted EBITDA increased 67.5% to
$34.5 million . - Fully diluted earnings per share ("EPS") increased to
$1.40 per share from$0.69 per share; fully diluted adjusted EPS increased to$0.87 per share from$0.75 per share.
2021 full year consolidated results compared to 2020 full year
- Sales increased 58.5% to
$626.7 million , due to strong growth in each of the reporting segments. - Gross profit increased 101.4% to a record
$199.0 million , representing 31.7% of consolidated sales, due to strong growth in each of the reporting segments. - Adjusted gross profit increased 103.9% to a record
$201.5 million , representing 32.2% of consolidated sales. - Operating income increased 133.0% to
$126.4 million ; adjusted operating income increased 112.8% to$121.5 million . - Adjusted EBITDA increased 99.4% to
$141.0 million . - Fully diluted EPS increased to
$4.34 per share compared to$2.37 per share in 2020; fully diluted adjusted EPS increased to$4.24 per share from$2.51 per share.
“Our record performance this year demonstrated the strength of our business model and the value each of our segments bring to our global customer base and was bolstered by the synergistic effects of the
Distillery Products Segment
For the fourth quarter of 2021, Distillery Products segment sales increased 3.3% to
For the full year 2021, Distillery Products segment sales increased 12.5% to
“Strong consumer demand for our American Whiskey products continues to drive meaningful sales for premium beverage alcohol,” said Colo. “Our impressive gross profit results highlight the long-term value of our aging whiskey inventory and is augmented by our ability to create new relationships and develop partnerships with existing customers. We remain focused on being proactive to attract additional aged whiskey and new distillate customers across each customer type.”
Branded Spirits Segment
In the fourth quarter of 2021, sales for the
For the full year 2021,
“Our strong
Ingredient Solutions Segment
For the fourth quarter of 2021, Ingredient Solutions segment sales increased 15.2% to
For the full year 2021, Ingredient Solutions segment sales increased 16.1% to
"Ingredient Solutions again finished the year with great momentum, as our specialty wheat starches and proteins business lines contributed to another strong quarter," Colo continued. "We remain pleased with our diverse customer base and ability to further optimize the product mix and channels to drive additional profitability."
Other
MGP experienced a fire at the
Corporate selling, general and administrative ("SG&A") expenses for the fourth quarter 2021, inclusive of advertising and promotion expenses, increased to
The corporate effective tax rate for the fourth quarter 2021 was 26.8% compared with 23.7% a year ago. The corporate effective tax rate for the full year 2021 was 25.0% compared with 23.3% in 2020.
Fully diluted EPS increased to
2022 Outlook
MGP is offering the following increased 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. - Fully diluted adjusted earnings per share are forecasted to be in the
$3.95 to$4.10 range, with fully diluted weighted average shares outstanding expected to be approximately 24.1 million at year end.
Conclusion
"We are very pleased with the momentum we ended the fiscal year on and believe we are well positioned to execute and deliver against our long-term growth strategy in fiscal 2022," Colo continued. “As a result of the continued demand we have been experiencing in each of our three business segments, we recently announced expansionary projects totaling approximately
Conference Call and Webcast Information
Webcast: ir.mgpingredients.com on the Events & Presentations page
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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, among others: (i) the satisfaction of the conditions to closing the transaction to acquire
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 |
$ | 15,543 | ||||||
Increase in gross profit - |
20,447 | 131.6 | pp(a) | |||||
Increase in gross profit - Distillery Products segment | 953 | 6.1 | pp | |||||
Decrease in gross profit - Ingredient Solutions segment | (378 | ) | (2.4 | ) | pp | |||
Increase in insurance recoveries | 16,325 | 105.0 | pp | |||||
Increase in Advertising and promotion expenses | (5,332 | ) | (34.3 | ) | pp | |||
Increase in selling general and administrative expenses | (2,242 | ) | (14.4 | ) | pp | |||
Operating income for quarter ended |
$ | 45,316 | 191.6 | % |
Operating income, year versus year | Operating Income | Change | ||||||
Operating income for year ended |
$ | 54,241 | ||||||
Increase in gross profit - |
60,457 | 111.5 | pp(a) | |||||
Increase in gross profit - Distillery Products segment | 38,333 | 70.7 | pp | |||||
Increase in gross profit - Ingredient Solutions segment | 1,369 | 2.5 | pp | |||||
Increase in Insurance recoveries | 16,325 | 30.1 | pp | |||||
Increase in Advertising and promotion expenses | (13,386 | ) | (24.7 | ) | pp | |||
Increase in SG&A expenses | (30,976 | ) | (57.1 | ) | pp | |||
Operating income for year ended |
$ | 126,363 | 133.0 | % |
(a) Percentage points (“pp”).
EARNINGS PER SHARE (“EPS”) ROLLFORWARD
Change in basic and diluted EPS, quarter versus quarter | EPS | Change | ||||||
Basic and diluted EPS for quarter ended |
$ | 0.69 | ||||||
Change in operations (a) | 1.32 | 191.3 | pp(b) | |||||
Change in income attributable to participating securities(c) | 0.03 | 4.3 | pp | |||||
Change in other income (expense), net (a) | (0.05 | ) | (7.2 | ) | pp | |||
Change in interest expense(a) | (0.04 | ) | (5.8 | ) | pp | |||
Change in weighted average shares outstanding(d) | (0.40 | ) | (58.0 | ) | pp | |||
Tax: Change in effective tax rate | (0.08 | ) | (11.6 | ) | pp | |||
Change in noncontrolling interest | (0.03 | ) | (4.3 | ) | pp | |||
Basic EPS for quarter ended |
1.44 | 108.7 | % | |||||
Conversion feature of Convertible Senior Notes | (0.04 | ) | (5.8 | ) | pp | |||
Diluted EPS for quarter ended |
$ | 1.40 | 102.9 | % |
Change in basic and diluted EPS, year versus year | EPS | Change | ||||||
Basic and diluted EPS for year ended |
$ | 2.37 | ||||||
Change in operating income(a) | 3.24 | 136.7 | pp(b) | |||||
Change in income attributable to participating securities(c) | 0.03 | 1.3 | pp | |||||
Change in interest expense(a) | (0.08 | ) | (3.4 | ) | pp | |||
Change in other income (expense), net(a) | (0.08 | ) | (3.4 | ) | pp | |||
Change in weighted average shares outstanding(d) | (0.98 | ) | (41.4 | ) | pp | |||
Tax: Change in effective tax rate | (0.10 | ) | (4.2 | ) | pp | |||
Change in noncontrolling interest | (0.03 | ) | (1.3 | ) | pp | |||
Basic EPS for year ended |
4.37 | 84.4 | % | |||||
Conversion feature of Convertible Senior Notes | (0.03 | ) | (1.3 | ) | pp | |||
Diluted EPS for year ended |
$ | 4.34 | 83.1 | % |
(a) Items are net of tax based on the effective tax rate for the base year (2020).
(b) Percentage points ("pp")
(c) Income attributable to participating securities changes primarily due to the awarding and vesting of the employee RSUs that receive dividend equivalent payments.
(d) Weighted average shares outstanding change primarily due to our repurchases of Common Stock, the vesting of employee RSUs, our purchase of vested RSUs from employees to pay withholding taxes, and the granting of Common Stock to directors. Additionally, during 2021, the weighted average shares outstanding was impacted by the issuance of shares as part of the Merger consideration.
SALES BY OPERATING SEGMENT
(Dollars in thousands)
DISTILLERY PRODUCTS SALES | ||||||||||||
Quarter Ended |
Quarter versus Quarter Sales Change Increase/(Decrease) | |||||||||||
2021 | 2020 | $ Change | % Change | |||||||||
Brown goods | $ | 32,474 | $ | 35,346 | $ | (2,872 | ) | (8.1 | )% | |||
White goods | 19,769 | 15,951 | 3,818 | 23.9 | ||||||||
Premium beverage alcohol | 52,243 | 51,297 | 946 | 1.8 | ||||||||
Industrial alcohol | 15,732 | 16,650 | (918 | ) | (5.5 | ) | ||||||
Food grade alcohol | 67,975 | 67,947 | 28 | — | ||||||||
Fuel grade alcohol | 4,054 | 1,660 | 2,394 | 144.2 | ||||||||
Distillers feed and related co-products | 5,885 | 6,220 | (335 | ) | (5.4 | ) | ||||||
Warehouse services | 4,574 | 3,990 | 584 | 14.6 | ||||||||
Total Distillery Products | $ | 82,488 | $ | 79,817 | $ | 2,671 | 3.3 | % | ||||
BRANDED SPIRITS SALES | |||||||||||
Quarter Ended |
Quarter versus Quarter Sales Change Increase/(Decrease) |
||||||||||
2021 | 2020 | $ Change | % Change | ||||||||
Ultra premium | $ | 10,338 | $ | 723 | $ | 9,615 | 1,329.9 | % | |||
Premium | 6,971 | 91 | 6,880 | 7,560.4 | |||||||
Mid | 16,996 | — | 16,996 | N/A | |||||||
Value | 18,513 | — | 18,513 | N/A | |||||||
Other | 8,191 | 14 | 8,177 | 58,407.1 | |||||||
$ | 61,009 | $ | 828 | $ | 60,181 | 7,268.2 | % |
INGREDIENT SOLUTIONS SALES | ||||||||||||
Quarter Ended |
Quarter versus Quarter Sales Change Increase / (Decrease) |
|||||||||||
2021 | 2020 | $ Change | % Change | |||||||||
Specialty wheat starches | $ | 12,707 | $ | 10,693 | $ | 2,014 | 18.8 | % | ||||
Specialty wheat proteins | 8,186 | 6,588 | 1,598 | 24.4 | ||||||||
Commodity wheat starches | 2,442 | 2,383 | 59 | 2.5 | ||||||||
Commodity wheat proteins | 15 | 606 | (591 | ) | (97.5 | ) | ||||||
Total Ingredient Solutions | $ | 23,350 | $ | 20,270 | $ | 3,080 | 15.2 | % | ||||
SALES BY OPERATING SEGMENT
(Dollars in thousands)
DISTILLERY PRODUCTS SALES | ||||||||||||
Year Ended |
Year versus Year Sales Change Increase/(Decrease) |
|||||||||||
2021 | 2020 | $ Change | % Change | |||||||||
Brown goods | $ | 162,074 | $ | 121,384 | $ | 40,690 | 33.5 | % | ||||
White goods | 75,818 | 63,873 | 11,945 | 18.7 | ||||||||
Premium beverage alcohol | 237,892 | 185,257 | 52,635 | 28.4 | ||||||||
Industrial alcohol | 62,628 | 80,682 | (18,054 | ) | (22.4 | ) | ||||||
Food grade alcohol | 300,520 | 265,939 | 34,581 | 13.0 | ||||||||
Fuel grade alcohol | 14,916 | 5,630 | 9,286 | 164.9 | ||||||||
Distillers feed and related co-products | 19,545 | 26,109 | (6,564 | ) | (25.1 | ) | ||||||
Warehouse services | 17,523 | 15,631 | 1,892 | 12.1 | ||||||||
Total Distillery Products | $ | 352,504 | $ | 313,309 | $ | 39,195 | 12.5 | % | ||||
BRANDED SPIRITS SALES | |||||||||||
Year Ended |
Year versus Year Sales Change Increase/(Decrease) |
||||||||||
2021 | 2020 | $ Change | % Change | ||||||||
Ultra premium | $ | 34,030 | $ | 3,772 | $ | 30,258 | 802.2 | % | |||
Premium | 19,663 | 334 | 19,329 | 5,787.1 | |||||||
Mid | 51,890 | — | 51,890 | N/A | |||||||
Value | 58,514 | — | 58,514 | N/A | |||||||
Other | 19,469 | 43 | 19,426 | 45,176.7 | |||||||
$ | 183,566 | $ | 4,149 | $ | 179,417 | 4,324.3 | % | ||||
INGREDIENT SOLUTIONS SALES | ||||||||||||
Year Ended |
Year versus Year Sales Change Increase/(Decrease) |
|||||||||||
2021 | 2020 | $ Change | % Change | |||||||||
Specialty wheat starches | $ | 47,758 | $ | 41,631 | $ | 6,127 | 14.7 | % | ||||
Specialty wheat proteins | 31,485 | 26,960 | 4,525 | 16.8 | ||||||||
Commodity wheat starches | 10,014 | 7,630 | 2,384 | 31.2 | ||||||||
Commodity wheat proteins | 1,393 | 1,842 | (449 | ) | (24.4 | ) | ||||||
Total Ingredient Solutions | $ | 90,650 | $ | 78,063 | $ | 12,587 | 16.1 | % | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)
Quarter Ended |
Year Ended |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Sales | $ | 166,847 | $ | 100,915 | $ | 626,720 | $ | 395,521 | ||||||||
Cost of sales | 114,094 | 69,184 | 427,755 | 296,715 | ||||||||||||
Gross profit | 52,753 | 31,731 | 198,965 | 98,806 | ||||||||||||
Advertising and promotion expense | 6,210 | 878 | 16,098 | 2,712 | ||||||||||||
Selling, general and administrative | 17,552 | 15,310 | 72,829 | 41,853 | ||||||||||||
Insurance Recoveries | (16,325 | ) | — | (16,325 | ) | — | ||||||||||
Operating income | 45,316 | 15,543 | 126,363 | 54,241 | ||||||||||||
Interest expense, net | (1,329 | ) | (566 | ) | (4,037 | ) | (2,267 | ) | ||||||||
Other income (loss), net | (751 | ) | 275 | (1,230 | ) | 627 | ||||||||||
Income before income taxes | 43,236 | 15,252 | 121,096 | 52,601 | ||||||||||||
Income tax expense | 11,578 | 3,620 | 30,279 | 12,256 | ||||||||||||
Net income | 31,658 | 11,632 | 90,817 | 40,345 | ||||||||||||
Net loss attributable to noncontrolling interest | 211 | — | 490 | — | ||||||||||||
Net income attributable to |
31,869 | 11,632 | 91,307 | 40,345 | ||||||||||||
Income attributable to participating securities | (236 | ) | (75 | ) | (712 | ) | (261 | ) | ||||||||
Net income used in earnings per share calculation | $ | 31,633 | $ | 11,557 | $ | 90,595 | $ | 40,084 | ||||||||
Weighted average common shares | ||||||||||||||||
Basic | 21,983,310 | 16,919,241 | 20,719,663 | 16,937,125 | ||||||||||||
Diluted | 23,011,154 | 16,919,241 | 20,982,453 | 16,937,125 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 1.44 | $ | 0.69 | $ | 4.37 | $ | 2.37 | ||||||||
Diluted | $ | 1.40 | $ | 0.69 | $ | 4.34 | $ | 2.37 | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
2021 |
2020 |
2021 |
2020 |
|||||||||||
ASSETS | LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||
Current Assets: | Current Liabilities: | |||||||||||||
Cash and cash equivalents | $ | 21,568 | $ | 21,662 | Current maturities of long-term debt | $ | 3,227 | $ | 1,600 | |||||
Receivables, net | 92,537 | 56,966 | Accounts payable | 53,712 | 30,273 | |||||||||
Inventory | 245,944 | 141,011 | Federal and state excise taxes payable | 6,992 | 107 | |||||||||
Prepaid expenses | 1,510 | 2,644 | Income taxes payable | — | 704 | |||||||||
Refundable income taxes | 5,539 | — | Accrued expenses and other | 24,869 | 20,645 | |||||||||
Total Current Assets | 367,098 | 222,283 | Total Current Liabilities | 88,800 | 53,329 | |||||||||
Property, plant, and equipment | 428,249 | 313,730 | Other liabilities: | |||||||||||
Less accumulated depreciation and amortization | (220,963 | ) | (181,738 | ) | Long-term debt, less current maturities | 35,266 | 38,271 | |||||||
Property, Plant, and Equipment, net | 207,286 | 131,992 | Convertible senior notes | 194,906 | — | |||||||||
Operating lease right-of-use assets, net | 9,671 | 5,151 | Long-term operating lease liabilities | 6,997 | 3,057 | |||||||||
Investment in joint ventures | 4,944 | — | Other noncurrent liabilities | 5,132 | 7,094 | |||||||||
Intangible assets, net | 218,838 | 890 | Deferred income taxes | 66,101 | 2,298 | |||||||||
226,294 | 2,738 | Total Liabilities | 397,202 | 104,049 | ||||||||||
Other assets | 7,336 | 3,521 | Total equity | 644,265 | 262,526 | |||||||||
TOTAL ASSETS | $ | 1,041,467 | $ | 366,575 | TOTAL LIABILITIES AND TOTAL EQUITY | $ | 1,041,467 | $ | 366,575 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
2021 | 2020 | |||||||
Cash Flows from Operating Activities | ||||||||
Net income | $ | 90,817 | $ | 40,345 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 19,092 | 12,961 | ||||||
Gain on insurance recoveries | (16,325 | ) | — | |||||
Share-based compensation | 5,555 | 3,002 | ||||||
Equity Method investment loss | 1,611 | — | ||||||
Deferred income taxes, including change in valuation allowance | 6,772 | 593 | ||||||
Other, net | 145 | 494 | ||||||
Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
Receivables, net | (6,031 | ) | (16,173 | ) | ||||
Inventory | (14,214 | ) | (3,886 | ) | ||||
Prepaid expenses | 2,586 | (748 | ) | |||||
Income taxes payable (refundable) | (6,242 | ) | 1,750 | |||||
Accounts payable | 5,301 | 1,817 | ||||||
Accrued expenses and other | 738 | 11,537 | ||||||
Federal and state excise taxes payable | (1,467 | ) | (34 | ) | ||||
Other, net | (75 | ) | 1,597 | |||||
Net cash provided by operating activities | 88,263 | 53,255 | ||||||
Cash Flows from Investing Activities | ||||||||
Additions to property, plant, and equipment | (47,389 | ) | (19,701 | ) | ||||
Purchase of business, net of cash acquired | (149,005 | ) | (2,750 | ) | ||||
Contributions to equity method investment | (1,470 | ) | — | |||||
Proceeds from property insurance recoveries | 16,325 | — | ||||||
Proceeds from sale of property and other | — | 2,906 | ||||||
Other, net | (1,080 | ) | (102 | ) | ||||
Net cash used in investing activities | (182,619 | ) | (19,647 | ) | ||||
Cash Flows from Financing Activities | ||||||||
Payment of dividends and dividend equivalents | (10,017 | ) | (8,188 | ) | ||||
Purchase of treasury stock | (767 | ) | (4,411 | ) | ||||
Loan fees paid related to borrowings | (7,050 | ) | (1,148 | ) | ||||
Principal payments on long-term debt | (1,620 | ) | (1,208 | ) | ||||
Proceeds from credit agreement - revolver | 242,300 | 54,700 | ||||||
Payments on credit agreement - revolver | (242,300 | ) | (55,000 | ) | ||||
Proceeds from Convertible Senior Notes | 201,250 | — | ||||||
Payment on assumed debt as part of the Merger | (87,509 | ) | — | |||||
Net cash provided by (used in) financing activities | 94,287 | (15,255 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (25 | ) | — | |||||
Increase (decrease) in cash and cash equivalents | (94 | ) | 18,353 | |||||
Cash and cash equivalents, beginning of period | 21,662 | 3,309 | ||||||
Cash and cash equivalents, end of period | $ | 21,568 | $ | 21,662 |
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 EPS | Diluted EPS | ||||||||||||||||||||
Reported GAAP Results | $ | 52,753 | $ | 45,316 | $ | 43,236 | $ | 31,658 | $ | 31,633 | $ | 1.44 | $ | 1.40 | ||||||||||||
Adjusted to remove: | ||||||||||||||||||||||||||
Insurance recoveries(b) | — | (16,325 | ) | (16,325 | ) | (12,244 | ) | (12,244 | ) | (0.56 | ) | (0.53 | ) | |||||||||||||
Business acquisition costs(c) | — | 5 | 5 | 5 | 5 | — | — | |||||||||||||||||||
Adjusted Non-GAAP results | $ | 52,753 | $ | 28,996 | $ | 26,916 | $ | 19,419 | $ | 19,394 | $ | 0.88 | $ | 0.87 |
Quarter Ended |
|||||||||||||||||
Gross Profit | Operating Income | Income before Income Taxes | Net Income | MGP Earnings(a) | Basic and Diluted EPS | ||||||||||||
Reported GAAP Results | 31,731 | $ | 15,543 | $ | 15,252 | $ | 11,632 | $ | 11,557 | $ | 0.69 | ||||||
Adjusted to remove: | |||||||||||||||||
CEO transition costs (d) | — | 542 | 542 | 188 | 188 | 0.01 | |||||||||||
Business acquisition costs (c) | — | 919 | 919 | 919 | 919 | 0.05 | |||||||||||
Adjusted Non-GAAP results | $ | 31,731 | $ | 17,004 | $ | 16,713 | $ | 12,739 | $ | 12,664 | $ | 0.75 |
Year Ended |
||||||||||||||||||||||||||
Gross Profit | Operating Income | Income before Income Taxes | Net Income | MGP Earnings(a) | Basic EPS | Diluted EPS | ||||||||||||||||||||
Reported GAAP Results | $ | 198,965 | $ | 126,363 | $ | 121,096 | $ | 90,817 | $ | 90,595 | $ | 4.37 | $ | 4.34 | ||||||||||||
Adjusted to remove: | ||||||||||||||||||||||||||
Insurance recoveries(b) | — | (16,325 | ) | (16,325 | ) | (12,244 | ) | (12,244 | ) | (0.59 | ) | (0.58 | ) | |||||||||||||
Inventory step-up - |
2,529 | 2,529 | 2,529 | 2,529 | 2,510 | 0.12 | 0.12 | |||||||||||||||||||
Business acquisition costs(c) | — | 8,927 | 8,927 | 7,529 | 7,467 | 0.36 | 0.36 | |||||||||||||||||||
Adjusted Non-GAAP results | $ | 201,494 | $ | 121,494 | $ | 116,227 | $ | 88,631 | $ | 88,328 | $ | 4.26 | $ | 4.24 |
Year Ended |
|||||||||||||||||
Gross Profit | Operating Income | Income before Income Taxes | Net Income | MGP Earnings(a) | Basic and Diluted EPS | ||||||||||||
Reported GAAP Results | $ | 98,806 | $ | 54,241 | $ | 52,601 | $ | 40,345 | $ | 40,084 | $ | 2.37 | |||||
Adjusted to remove: | |||||||||||||||||
CEO transition costs (d) | — | 1,932 | 1,932 | 1,467 | 1,467 | 0.09 | |||||||||||
Business acquisition costs (c) | — | 919 | 919 | 919 | 919 | 0.05 | |||||||||||
Adjusted Non-GAAP results | $ | 98,806 | $ | 57,092 | $ | 55,452 | $ | 42,731 | $ | 42,470 | $ | 2.51 |
RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES
(a) MGP Earnings has been defined as "Net income used in earnings per share calculation"
(b) The Insurance recovery costs are included in the Consolidated Statement of Income within the Insurance recoveries line item. During
(c) The Business acquisition costs are included in the Consolidated Statement of Income within the Selling, general and administrative line item. The adjustment includes transaction and integration costs associated with the merger with
(d) The CEO transition costs are included in the Consolidated Statement of Income within the Selling, general and administrative line item. The adjustment includes additional employee related costs in connection with the transition of CEOs.
(e) The finished goods Inventory valuation step-up costs are included in the Consolidated Statement of Income within Cost of goods by the
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(UNAUDITED) (in thousands)
Quarter Ended |
Year Ended |
||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||
Net Income | $ | 31,658 | $ | 11,632 | $ | 90,817 | $ | 40,345 | |||||
Interest expense | 1,329 | 566 | 4,037 | 2,267 | |||||||||
Income tax expense | 11,578 | 3,620 | 30,279 | 12,256 | |||||||||
Depreciation and amortization | 5,424 | 3,343 | 19,092 | 12,961 | |||||||||
Equity method investment | 872 | — | 1,611 | — | |||||||||
Insurance recoveries | (16,325 | ) | — | (16,325 | ) | — | |||||||
Inventory step-up - |
— | — | 2,529 | — | |||||||||
Business acquisition costs | 5 | 919 | 8,927 | 919 | |||||||||
CEO transition costs | — | 542 | — | 1,932 | |||||||||
Adjusted EBITDA | $ | 34,541 | $ | 20,622 | $ | 140,967 | $ | 70,680 |
The non-GAAP adjusted EBITDA measure is defined as earnings before interest, taxes, depreciation and amortization, equity method investment, insurance recoveries, inventory step-up, business acquisition costs and CEO transition costs. See section "reconciliation of selected GAAP measure to non-GAAP measures" for further details on each of these non-GAAP Items.
Purchase Accounting - Summary of Preliminary Fair Value Step Up
(UNAUDITED) (in thousands)
The Merger was accounted for as a business combination in accordance with Accounting Standard Codification 805 (“ASC 805”), Business Combinations, and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The fair value of the assets and liabilities are based upon a preliminary assessment of fair value and may change as valuations for certain tangible assets, intangible assets and contingent liabilities are finalized and the associated income tax impacts are determined. The Company expects to finalize the purchase price allocation as soon as practicable, but no longer than one year from the acquisition date. The table below reflects the summary for Finished Goods inventory, Whiskey inventory, Property, plant and equipment, and Distributor relationships preliminary purchase price accounting step up to fair value, the related amortization period and the Income Statement caption within which the adjustment is included.
Income Statement Impact | ||||||||||||
Step Up Value | Amortization Period | Income Statement Caption | Quarter Ended |
Year Ended |
||||||||
Finished Goods Inventory | $ | 2,529 | 3 months | Cost of sales | $ | — | $ | 2,529 | ||||
Whiskey Inventory | 1,065 | 10 years | Cost of sales | 27 | 81 | |||||||
Property, plant and equipment | 7,340 | various | Cost of sales | 487 | 1,534 | |||||||
Definite-lived intangible asset - Distributor relationships | 41,400 | 20 years | SG&A | 516 | 1,552 | |||||||
Total Fair Value Step Up | $ | 52,334 | $ | 1,030 | $ | 5,696 |

Source: MGP Ingredients, Inc.