MGP Ingredients Reports Strong Fourth Quarter and Full Year 2015 Results
2015 full year highlights
- Net sales increased 4.5% to
- Gross profit increased 105.9% to
- Gross margin improved 8.8 percentage points to 17.9%.
- Operating income increased 97.7% to
$32.9 million. 2014 operating income of $16.6 millionincluded an $8.3 millioninsurance settlement gain.
- Net income increased 10.6% to
- Earnings per share increased 12.1% to
For the fourth quarter of 2015, net sales increased 6.8% to
"We are very pleased with our results this year," said
Distillery Products Segment - Full Year Gross Profit Rises 127%
In 2015, net sales for the Distillery Products segment increased 5.3% to
For the fourth quarter, net sales for the Distillery Products segment increased 9.8% to
"We are starting to see the benefits of our targeted investments, which should ensure that we can fully support the growth of the whiskey category," Griffin noted. "Strong tailwinds for our business include spirits gaining share from beer, the continued strong demand for bourbon and rye whiskeys, and the overall premiumization of the beverage alcohol industry."
Ingredient Solutions - Full Year Gross Profit Increases 29%
In 2015, net sales for the Ingredient Solutions segment increased 0.9% to
For the 2015 fourth quarter, net sales for the Ingredient Solutions segment decreased 7.1% to
"Our Ingredients Solutions segment had a very strong year overall, but slower growth rates in the second half indicate that realizing the long-term potential for this segment may occur at a slower pace," Griffin said.
Corporate selling, general and administrative expenses were
MGP received joint venture equity method investment earnings of
Earnings per share were
2016 and Long Term Guidance
MGP is providing guidance for 2016 and beyond as follows:
- Operating income is expected to increase by a compound annual growth rate in the ten to
fifteen percent range over the next three years.
- 2016 net sales percentage growth is expected to accelerate into the high single digits.
- 2016 gross margin gains are expected to be moderate following strong 2015 improvement.
- 2016 effective tax rate is forecast to be 35% and shares outstanding are expected to be approximately 16.7 million, reflecting the benefit of the 2015 share repurchase.
- Due to challenging and volatile conditions in the fuel ethanol market, ICP's 2015 level of profitability may not be sustainable in 2016.
"The initial phase of our strategy has gone much faster than we anticipated, both in terms of producing financial results and the pace of implementation of key strategic initiatives," said Griffin. "While we realized many of the immediate opportunities in 2015, we are very confident that we are building a strong team and making the necessary investments to enable us to deliver against our longer term potential. As our business grows, there will be some inherent quarter-to-quarter volatility due to product and customer mix, but we believe that sustained long-term growth will be the underlying trend."
MGP is a leading producer and supplier of premium distilled spirits and specialty wheat proteins and starches. Distilled spirits include premium bourbon and rye whiskeys, gins and vodkas, which are carefully crafted through a combination of art and science and backed by over 150 years of experience. The company's proteins and starches are created in the same manner and provide a host of functional, nutritional and sensory benefits for a
wide range of food products. MGP additionally is a top producer of high quality industrial alcohol for use in both food and non-food applications. The company is headquartered in
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements as well as historical information. All statements, other than statements
of historical facts, included in this news release regarding the prospects of our industry and our prospects, plans, financial position, business strategy, guidance on growth in operating income, revenue, gross margin, and future effective tax rate may constitute forward-looking statements. In addition, 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 or variations of these terms or similar terminology. They reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance, and Company 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. Important factors that could cause actual results to differ materially from our expectations include, among others: (i) disruptions in operations at our
EARNINGS PER SHARE ROLLFORWARD
Change in Full Year Diluted Earnings per Share
|Basic and Diluted EPS||Change|
|Basic and diluted earnings (loss) per share for 2014||$||1.32|
|Change in operations(a)||1.30||98.5||pp(b)|
|Change in insurance recoveries(a)||(0.44||)||(33.3||)||pp|
|Change in equity method investments(a)||(0.21||)||(15.9||)||pp|
|Change in interest expense(a)||0.01||0.7||pp|
|Change in weighted average shares outstanding(c)||0.02||1.5||pp|
|Change in effective tax rate||(0.52||)||(39.4||)||pp|
|Basic and diluted earnings (loss) per share for 2015||$||1.48||12.1||%|
(a) Changes are net of tax based on the effective tax rate for the base year.
(b) Percentage points ("pp").
(c) Weighted average shares outstanding change primarily due to the vesting of employee restricted stock units, the granting of Common Stock to directors, the purchase of vested stock by the Company from employees to pay withholding taxes, and repurchases by the Company of Common Stock. In
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
|Quarter Ended||Year Ended|
|(Dollars in thousands, except per share)|
|Less: excise taxes||3,563||7,576||18,283||24,949|
|Cost of sales||65,754||70,314||269,071||284,972|
|Selling, general and administrative expenses||5,681||4,897||25,683||20,101|
|Other operating costs and losses on sale of assets||—||—||—||1|
|Equity method investment earnings||92||2,850||6,102||10,137|
|Interest expense, net||(160||)||(201||)||(534||)||(816||)|
|Income before income taxes||10,006||10,830||38,418||25,940|
|Income tax expense||3,527||3,267||12,227||2,265|
|Other comprehensive income (loss), net of tax||(11||)||(930||)||232||(728||)|
|Basic and diluted earnings per share(a)||$||0.38||$||0.42||$||1.48||$||1.32|
|Dividends and dividend equivalents per common share||$||—||$||—||$||0.06||$||0.05|
|(a)||Share information:||Quarter Ended||Year to Date Ended|
|Basic weighted average common shares||16,552,873||17,355,048||17,123,556||17,305,866|
|Incremental shares from potential dilutive securities||—||553||—||—|
|Diluted weighted average common shares||16,552,873||17,355,601||17,123,556||17,305,866|
CONSOLIDATED BALANCE SHEET (UNAUDITED)
|(Dollars in thousands)||(Dollars in thousands)|
|ASSETS||LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current Assets:||Current Liabilities:|
|Cash and cash equivalents||$||747||$||5,641||Current maturities of long-term debt||$||3,345||$||2,613|
|Inventory||58,701||34,441||Accounts payable to affiliate, net||2,291||3,333|
|Prepaid expenses||1,062||1,179||Accrued expenses||10,400||8,010|
|Deferred income taxes||—||7,924||Income taxes payable||685||—|
|Refundable income taxes||—||388||Other current liabilities||—||716|
|Total Current Assets||91,180||82,245||Total Current Liabilities||37,661||30,748|
|Long-term debt, less current maturities||7,579||7,286|
|Revolving credit facility||22,536||—|
|Property and equipment||229,914||198,176||Deferred credit||3,402||4,099|
|Less accumulated depreciation and amortization||(146,360||)||(134,295||)||Accrued retirement, health and life insurance benefits||4,136||4,420|
|Net Property, Plant||Other non current liabilities||79||—|
|and Equipment||83,554||63,881||Deferred income taxes||2,757||9,297|
|Equity method investments||18,563||12,373||Total Liabilities||78,150||55,850|
|Other assets||1,013||1,716||Stockholders' equity||116,160||104,365|
|TOTAL ASSETS||$||194,310||$||160,215||TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||194,310||$||160,215|
For More Information Investors & Analysts:
Bob Burton616-233-0500 or Investor.Relations@mgpingredients.com Media: Shanae Randolph913-367-1480 or email@example.com
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