MGP Ingredients Reports Strong Third Quarter 2015 Results
11/05/2015
Third quarter 2015 highlights (vs. third quarter 2014)
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Net sales increased by
$2.8 million or 3.6%. -
Gross profit increased by
$4.6 million to$11.9 million . - Gross margin improved 5.4 percentage points to 14.8%.
-
Operating income increased by
$2.7 million to$6.4 million . -
ICP joint venture contributed
$1.6 million to pretax income, consistent with$1.6 million a year ago. -
Net income increased 8.7% to
$6.8 million . -
Earnings per share increased by 11.8% to
$.38 , more than offsetting the impact of increased tax obligations and the absence of a favorable insurance recovery that occurred in the 2014 third quarter.
For the first nine months of 2015, net sales increased by 3.8% to
"We are enjoying strong demand for our products, driven by long term macro consumer trends," said
Distillery Products Segment - Gross Profit Rises 80%
For the quarter, net sales for the Distillery Products segment increased 4.7% to
"Our strong reputation for quality and innovation, combined with our production capacity, make MGP uniquely positioned to benefit from the continual growth of the whiskey category and the premiumization of the beverage alcohol industry," noted Griffin.
Ingredient Solutions - Continued Improvement in Product Mix
For the quarter, net sales for the Ingredient Solutions segment decreased 1.4% to
Griffin added, "While segment results were down slightly for the quarter, we were pleased by both the growth in specialty starch net sales, which increased 5.4% over the 2014 quarter, and improved mix, as specialty products accounted for 85.9% of total segment net sales. We remain very confident in the long term growth potential of our ingredient solutions segment."
Other
Corporate selling, general and administrative expenses were
For the quarter, MGP received joint venture equity method investment earnings of
Conclusion
"We are making great progress in the implementation of our strategic plan," said Griffin. "We continue to strengthen our leadership, making outstanding additions to both our board and executive team this quarter. Our initial brand offering, Metze's Select, a limited edition Indiana Straight Bourbon Whiskey, has been very well received, demonstrating our ability to capture a larger share of the value chain. Our recently announced
About
MGP is a leading supplier of premium distilled spirits and specialty wheat proteins and starches. Distilled spirits include 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 Quarterly Report on Form 10-Q regarding the prospects of our industry and our prospects, plans, financial position and business strategy 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
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RESULTS OF OPERATIONS | |
FOR THE QUARTER AND YEAR TO DATE ENDED |
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Quarter Ended |
|
Net income for the quarter ended |
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Improved by: | |
Increased gross profit from distillery products segment | 4,618 |
Other | 85 |
Reduced by: | |
Increase in income tax expense | (2,211) |
Decreased insurance recoveries | (1,293) |
Increased selling, general, and administrative expenses | (530) |
Decreased gross profit from ingredient solutions segment(a) | (67) |
Decreased earnings from equity method investments | (59) |
Net income for the quarter ended |
$6,771 |
Year to Date Ended |
|
Net income for the year to date period ended |
|
Improved by: | |
Increased gross profit from distillery products segment | 17,378 |
Increased gross profit from ingredient solutions segment | 2,980 |
Decreased interest expense | 241 |
Other | — |
Reduced by: | |
Increased income tax expense | (9,702) |
Increased selling, general, and administrative expenses | (4,797) |
Decreased earnings from equity method investments | (1,277) |
Decreased insurance recoveries | (1,223) |
Net income for the year to date period ended |
$19,712 |
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) | ||||
Quarter Ended | Year to Date Ended | |||
(Dollars in thousands, except per share) |
2015 |
2014 |
2015 |
2014 |
Sales | $ 83,880 | $ 83,966 | $ 260,815 | $ 254,451 |
Less: excise taxes | 3,552 | 6,451 | 14,720 | 17,373 |
Net sales | 80,328 | 77,515 | 246,095 | 237,078 |
Cost of sales | 68,466 | 70,204 | 203,317 | 214,658 |
Gross profit | 11,862 | 7,311 | 42,778 | 22,420 |
Selling, general and administrative expenses | 5,497 | 4,967 | 20,002 | 15,205 |
Insurance recoveries | — | (1,293) | — | (1,223) |
Income from operations | 6,365 | 3,637 | 22,776 | 8,438 |
Interest expense, net | (114) | (199) | (374) | (615) |
Equity method investment earnings | 1,562 | 1,621 | 6,010 | 7,287 |
Income before income taxes | 7,813 | 5,059 | 28,412 | 15,110 |
Provision (benefit) for income taxes | 1,042 | (1,169) | 8,700 | (1,002) |
Net income | 6,771 | 6,228 | 19,712 | 16,112 |
Other comprehensive income (loss), net of tax | (15) | (123) | 243 | 202 |
Comprehensive income | $ 6,756 | $ 6,105 | $ 19,955 | $ 16,314 |
Basic and diluted earnings per share(a) | $ 0.38 | $ 0.34 | $ 1.10 | $ 0.89 |
Dividends and dividend equivalents per common share | $ — | $ — | $ 0.06 | $ 0.05 |
(a) Share information: | Quarter Ended | Year to Date Ended | ||
2015 |
2014 |
2015 |
2014 |
|
Basic weighted average common shares | 17,154,303 | 17,334,330 | 17,315,890 | 17,286,258 |
Incremental shares from potential dilutive securities | 769 | 229 | 759 | — |
Diluted weighted average common shares | 17,155,072 | 17,334,559 | 17,316,649 | 17,286,258 |
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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 | $ 126 | $ 5,641 | Current maturities of long-term debt | $ 2,400 | $ 2,613 |
Receivables | 31,659 | 32,672 | Accounts payable | 20,775 | 16,076 |
Inventory | 52,208 | 34,441 | Accounts payable to affiliate, net | 4,070 | 3,333 |
Prepaid expenses | 2,239 | 1,179 | Accrued expenses | 10,348 | 8,010 |
Deferred income taxes | 5,555 | 7,924 | Income taxes payable | — | — |
Refundable income taxes | 707 | 388 | Other current liabilities | — | 716 |
Total Current Assets | 92,494 | 82,245 | Total Current Liabilities | 37,593 | 30,748 |
Other Liabilities: | |||||
Property and equipment | 219,866 | 198,176 | Long-term debt, less current maturities | 6,512 | 7,670 |
Less accumulated depreciation and amortization | (143,315) | (134,295) | Credit facility | 19,901 | — |
Deferred credit | 3,579 | 4,099 | |||
Net Property, Plant | Accrued retirement, health and life insurance benefits | 4,193 | 4,420 | ||
and Equipment | 76,551 | 63,881 | Deferred income taxes | 8,333 | 9,297 |
Equity method investments | 18,427 | 12,373 | Total Liabilities | 80,111 | 56,234 |
Other noncurrent assets | 1,923 | 2,100 | Stockholders' equity | 109,284 | 104,365 |
TOTAL ASSETS | $ 189,395 | $ 160,599 | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 189,395 | $ 160,599 |
Capital Structure | |||||
Net Investment in: | Financed By: | ||||
Working capital | $ 54,901 | $ 51,497 | Long-term debt(a) | $ 26,413 | $ 7,670 |
Property, plant and equipment | 76,551 | 63,881 | Deferred liabilities | 16,105 | 17,816 |
Other noncurrent assets | 20,350 | 14,473 | Stockholders' equity | 109,284 | 104,365 |
Total | $ 151,802 | $ 129,851 | Total | $ 151,802 | $ 129,851 |
(a) Excludes short-term portion. Short-term portion is included within working capital. |
CONTACT: For More Information Investors & Analysts:Source:Bob Burton 616-233-0500 or Investor.Relations@mgpingredients.com Media:Shanae Randolph , Corporate Director of Communications 913-367-1480 or shanae.randolph@mgpingredients.com
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