picture1.jpg

MGP INGREDIENTS REPORTS RECORD FIRST QUARTER 2022 RESULTS
Consolidated sales increased 80.2% from prior year period
Operating income increased 144.3%

ATCHISON, Kan., May 5, 2022 - MGP Ingredients, Inc. (Nasdaq:MGPI), a leading provider of distilled spirits, branded spirits, and food ingredient solutions, today reported results for the first quarter ended March 31, 2022.

2022 first quarter consolidated results compared to 2021 first quarter

•Sales increased 80.2% to $195.2 million, as a result of sales growth in each of the reporting segments.
•Gross profit increased 122.4% to $71.8 million, representing 36.8% of sales.
•Operating income increased 144.3% to $50.1 million; adjusted operating income increased 123.7% to $50.1 million.
•Net income increased 142.2% to $37.4 million; adjusted net income increased 117.3% to $37.4 million.
•Adjusted EBITDA increased 115.2% to $55.4 million.
•Basic and diluted earnings per share ("EPS") increased to $1.69 per share from $0.90 per share; adjusted basic and diluted EPS increased to $1.69 per share from $1.01 per share.

“We are very pleased with our continued momentum this quarter, which has again yielded record consolidated results,” said David Colo, president and CEO of MGP Ingredients. “Sales of premium beverage alcohol increased 37.7%, while brown goods sales grew 44.4% from last year, due to higher aged whiskey and new distillate sales in our Distilling Solutions segment. Continued strong consumer demand for the premium, super premium, and ultra-premium offerings within our Branded Spirits segment further improved our results as we believe our expansive family of brands and spirits will continue to position us well for incremental growth. Additionally, our diverse product offering within the Ingredient Solutions segment continues to be aligned with strong consumer trends, as evidenced by our record results this quarter.”

Distilling Solutions Segment
In the first quarter of 2022, sales for the Distilling Solutions segment increased 25.8% to $111.5 million, reflecting a 37.7% increase in sales of premium beverage alcohol, primarily due to higher aged whiskey and new distillate sales. Gross profit increased to $38.9 million or 34.9% of segment sales, compared to $28.2 million, or 31.9% of segment sales in the first quarter 2021.

Branded Spirits Segment
For the first quarter of 2022, sales for the Branded Spirits segment totaled $55.8 million, primarily due to the April 1, 2021 Luxco acquisition. Gross profit increased to $24.8 million, or 44.5% of segment sales.
1


Ingredient Solutions Segment
In the first quarter of 2022, sales in the Ingredient Solutions segment increased 46.2% to $28.0 million. Gross profit increased to $8.1 million, or 29.0% of segment sales, compared to $4.0 million, or 20.7% of segment sales in the first quarter 2021.

Other
Corporate selling, general and administrative ("SG&A") expenses for the first quarter 2022, inclusive of advertising and promotion expenses, increased $10.0 million to $21.8 million as compared to the first quarter 2021, primarily driven by the assumption of Luxco’s SG&A expenses.

The corporate effective tax rate for the quarter was 23.0% and remained unchanged from the year ago period.

“We are off to another strong start to the year, and remain committed to the execution of our long-term growth strategy,” said Colo. “We believe the underlying macro consumer trends that are supporting each of our business segments remain strong. The three recently announced expansionary projects remain on track, which we believe will enable us to meet the continued strong demand we’re experiencing. Our capital allocation strategy remains focused on organic and acquisitive growth, which aligns well with our long-term strategy.”

2022 Outlook
MGP is confirming the following 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.

Full year 2022 guidance measures of adjusted EBITDA and basic adjusted earnings per share are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because MGP is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition related expenses, restructuring and related expenses, and other items not reflective of MGP’s ongoing operations.

Conference Call and Webcast Information
MGP Ingredients will host a conference call for analysts and institutional investors at 10 a.m. ET today to discuss these results and current business trends. The conference call and webcast will be available via:

Webcast: ir.mgpingredients.com on the Events & Presentations page
Conference Call: 844-308-6398 (domestic) or 412-717-9605 (international)

About MGP Ingredients, Inc.
MGP Ingredients, Inc. (Nasdaq: MGPI) is a leading producer of premium distilled spirits, branded spirits, and food ingredient solutions. Since 1941, we have combined our expertise and energy aimed at formulating excellence, and bringing product ideas to life collaboratively with our customers.

As one of the largest distillers in the U.S., MGP’s offerings include bourbon and rye whiskeys, gins, and vodkas, which are created at the intersection of science and imagination, for customers of all sizes, from crafts to multinational brands. With U.S. distilleries in Kentucky, Indiana, Kansas, and Washington D.C., and bottling operations in Missouri, Ohio, and Northern Ireland, MGP has the infrastructure and expertise to create on any scale.

MGP’s branded spirits portfolio covers a wide spectrum of brands in every segment, including iconic brands from Luxco, which was founded in 1958 by the Lux Family. Luxco is a leading producer, supplier, importer


2


and bottler of beverage alcohol products. Our branded spirits mission is to meet the needs and exceed the expectations of consumers, associates and business partners. Luxco’s award-winning spirits portfolio includes well-known brands from five distilleries: Bardstown, Kentucky-based Lux Row Distillers, home of Ezra Brooks, Rebel, Blood Oath, David Nicholson and Daviess County; Lebanon, Kentucky-based Limestone Branch Distillery, maker of Yellowstone Kentucky Straight Bourbon Whiskey, Minor Case Straight Rye Whiskey and Bowling & Burch Gin; Jalisco, Mexico-based Destiladora González Lux, producer of 100% agave tequilas, El Mayor, Exotico and Dos Primos; MGP’s historic distillery in Lawrenceburg, Indiana, where the George Remus Straight Bourbon Whiskey and Rossville Union Straight Rye Whiskey are produced; and the Washington, D.C.-based Green Hat Distillery, producer of the Green Hat family of gins. The innovative and high-quality brand portfolio also includes Everclear Grain Alcohol, Pearl Vodka, Saint Brendan’s Irish Cream, The Quiet Man Irish Whiskey and other well-recognized brands.

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 MGP Ingredients, Inc. ("the Company") of continuing consumer trends and our announced expansionary projects. 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.

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, (i) disruptions in operations at our Atchison facility, our Lawrenceburg facility, or any Luxco facility, (ii) the availability and cost of grain, flour, and agave, and fluctuations in energy costs, (iii) the effectiveness of our grain purchasing program to mitigate our exposure to commodity price fluctuations, (iv) the effectiveness or execution of our strategic plan, (v) potential adverse effects to operations and our system of internal controls related to the loss of key management personnel, (vi) the competitive environment and related market conditions, (vii) the impact of the COVID-19 pandemic, (viii) the effects of inflation and the ability to effectively pass raw material and other price increases on to customers, (ix) our ability to maintain compliance with all applicable loan agreement covenants, (x) increases in interest rate, (xi) our ability to realize operating efficiencies, (xii) actions of governments, and (xiii) consumer tastes and preferences. For further information on these and other risks and uncertainties that may affect our business, including risks specific to our Distilling Solutions, Branded Spirits and Ingredient Solutions segments, see Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021.

Non-GAAP Financial Measures
In addition to reporting financial information in accordance with U.S. GAAP, the Company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, GAAP. In addition to the comparable GAAP measures, MGP has disclosed adjusted gross profit, adjusted operating income, adjusted income before taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA and basic and diluted adjusted earnings per share. The presentation of non-GAAP financial measures should be


3


reviewed in conjunction with gross profit, operating income, income before taxes, net income, net income attributable to common shareholders and basic and diluted earnings per share computed in accordance with U.S. GAAP and should not be considered a substitute for these GAAP measures. The non-GAAP adjustments referenced in the section entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures," take into account the impacts of items that are not necessarily ongoing in nature and/or predictive of the Company's operating trends. We believe that these non-GAAP measures provide useful information to investors regarding the Company's performance and overall results of operations. In addition, management uses these non-GAAP measures in conjunction with GAAP measures when evaluating the Company’s operating results compared to prior periods on a consistent basis, assessing financial trends and for forecasting purposes. Non-GAAP financial measures may not provide information that is directly comparable to other companies, even if similar terms are used to identify such measures. The attached schedules provide a full reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure.

For More Information
Investors & Analysts:
Mike Houston
646-475-2998 or investor.relations@mgpingredients.com

Media:
Greg Manis
913-360-5440 or greg.manis@mgpingredients.com


4


MGP INGREDIENTS, INC.
OPERATING INCOME ROLLFORWARD
(Dollars in thousands)
Operating income, quarter versus quarterOperating Income Change
Operating income for quarter ended March 31, 2021
$20,500 
Increase in gross profit - Branded Spirits segment
24,696 120.5 
pp(a)
Increase in gross profit - Distilling Solutions segment
10,688 52.1 pp
Increase in gross profit - Ingredient Solutions segment
4,138 20.2 pp
Increase in Advertising and promotion expenses
(4,651)(22.7)pp
Increase in SG&A expenses
(5,320)(26.0)pp
Increase in Other operating income, net29 0.1 pp
Operating income for quarter ended March 31, 2022
$50,080 144.3 %

(a) Percentage points (“pp”).








MGP INGREDIENTS, INC.
EARNINGS PER SHARE (“EPS”) ROLLFORWARD
Change in basic and diluted EPS, quarter versus quarterBasic and Diluted EPSChange
Basic and diluted EPS for quarter ended March 31, 2021
$0.90 
Increase in Operating income (b)
1.34 148.9 
pp(a)
Change in income allocated to participating securities0.01 1.1 pp
Change in interest expense, net (b)
(0.05)(5.6)pp
Change in weighted average shares outstanding(0.51)(56.7)pp
Basic and diluted EPS for quarter ended March 31, 2022
$1.69 87.7 %

(a) Percentage points (“pp”).
(b) Items are net of tax based on the effective tax rate for the base year (2021).



5


MGP INGREDIENTS, INC.
SALES BY OPERATING SEGMENT
(Dollars in thousands)
DISTILLING SOLUTIONS SALES
Quarter Ended March 31,Quarter versus Quarter Sales Change Increase/(Decrease)
20222021$ Change% Change
Brown goods$62,145 $43,041 $19,104 44.4 %
White goods20,086 16,657 3,429 20.6 
Premium beverage alcohol82,231 59,698 22,533 37.7 
Industrial alcohol11,495 17,336 (5,841)(33.7)
Food grade alcohol93,726 77,034 16,692 21.7 
Fuel grade alcohol3,282 2,517 765 30.4 
Distillers feed and related co-products8,917 4,972 3,945 79.3 
Warehouse services5,584 4,101 1,483 36.2 
Total Distilling Solutions$111,509 $88,624 $22,885 25.8 %
BRANDED SPIRITS SALES
Quarter Ended March 31,Quarter versus Quarter Sales Change Increase/(Decrease)
20222021$ Change% Change
Ultra premium$12,597 $126 $12,471 9,897.6 %
Super premium2,946 411 2,535 616.8 
Premium6,140 26 6,114 23,515.4 
Mid19,273 — 19,273 N/A
Value11,299 — 11,299 N/A
Other3,496 7 3,489 49,842.9 
Total Branded Spirits$55,751 $570 $55,181 9,680.9 %

INGREDIENT SOLUTIONS SALES
Quarter Ended March 31,Quarter versus Quarter Sales Change Increase / (Decrease)
20222021$ Change% Change
Specialty wheat starches$15,203 $10,222 $4,981 48.7 %
Specialty wheat proteins9,419 6,046 3,373 55.9 
Commodity wheat starches3,353 2,283 1,070 46.9 
Commodity wheat proteins— 578 (578)N/A
Total Ingredient Solutions$27,975 $19,129 $8,846 46.2 %














6


MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands)

 Quarter Ended March 31,
 20222021
Sales$195,235 $108,323 
Cost of sales123,414 76,024 
Gross profit71,821 32,299 
Advertising and promotion expenses5,504 853 
Selling, general and administrative expenses16,266 10,946 
Other operating income, net(29)— 
Operating income50,080 20,500 
Interest expense, net(1,598)(488)
Other income, net54 30 
Income before income taxes48,536 20,042 
Income tax expense11,165 4,615 
Net income37,371 15,427 
Net loss attributable to noncontrolling interest66 — 
Net income attributable to MGP Ingredients, Inc.37,437 15,427 
Income attributable to participating securities(318)(146)
Net income used in earnings per share calculation$37,119 $15,281 
Basic and diluted weighted average common shares21,989,100 16,928,003 
Basic and diluted earnings per common share$1.69 $0.90 



7


MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
March 31, 2022December 31, 2021March 31, 2022December 31, 2021
ASSETS  LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Assets:Current Liabilities:  
Cash and cash equivalents$27,295 $21,568 Current maturities of long-term debt$3,228 $3,227 
Receivables, net102,062 92,537 Accounts payable52,763 53,712 
Inventory259,517 245,944 Federal and state excise taxes payable6,476 6,992 
Prepaid expenses6,391 1,510 Income taxes payable5,437 — 
Refundable income taxes— 5,539 Accrued expenses and other16,559 24,869 
Total Current Assets395,265 367,098 Total Current Liabilities84,463 88,800 
Property, plant, and equipment433,017 428,249 Other liabilities:
Less accumulated depreciation and amortization(225,651)(220,963)Long-term debt, less current maturities34,463 35,266 
Property, Plant, and Equipment, net207,366 207,286 Convertible senior notes194,986 194,906 
Operating lease right-of-use assets, net15,981 9,671 Long-term operating lease liabilities12,595 6,997 
Investment in joint ventures6,366 4,944 Other noncurrent liabilities4,513 5,132 
Intangible assets, net218,320 218,838 Deferred income taxes66,394 66,101 
Goodwill226,294 226,294 Total Liabilities397,414 397,202 
Other assets7,227 7,336 Total equity679,405 644,265 
TOTAL ASSETS$1,076,819 $1,041,467 TOTAL LIABILITIES AND TOTAL EQUITY$1,076,819 $1,041,467 
 


8


MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
 Quarter Ended March 31,
 20222021
Cash Flows from Operating Activities  
Net income$37,371 $15,427 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization5,621 3,311 
Share-based compensation1,373 3,229 
Gain on equity method investment(394)— 
Deferred income taxes, including change in valuation allowance347 (648)
Other, net24 — 
Changes in operating assets and liabilities:  
Receivables, net(9,601)(4,348)
Inventory(13,696)4,924 
Prepaid expenses657 (1,084)
Income taxes payable5,437 5,237 
Accounts payable4,638 509 
Accrued expenses and other(8,896)(8,278)
Federal and state liquor excise payable(515)(107)
Other, net(136)(1,182)
Net cash provided by operating activities22,230 16,990 
Cash Flows from Investing Activities  
Additions to property, plant, and equipment(10,642)(12,059)
Contributions to equity method investment(1,028)— 
Other, net(363)(1,281)
Net cash used in investing activities(12,033)(13,340)
Cash Flows from Financing Activities  
Payment of dividends and dividend equivalents(2,661)(2,052)
Purchase of treasury stock(714)(674)
Principal payments on long-term debt(807)— 
Net cash used in financing activities(4,182)(2,726)
Effect of exchange rate changes on cash(288)— 
Increase in cash and cash equivalents5,727 924 
Cash and cash equivalents, beginning of period21,568 21,662 
Cash and cash equivalents, end of period$27,295 $22,586 




9


MGP INGREDIENTS, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES (UNAUDITED)
(in thousands)
Quarter Ended March 31, 2022
Gross ProfitOperating IncomeIncome before Income TaxesNet Income
MGP Earnings(a)
Basic and Diluted EPS
Reported GAAP Results$71,821 $50,080 $48,536 $37,371 $37,119 $1.69 
No adjustments for the period— — — — — — 
Adjusted Non-GAAP results$71,821 $50,080 $48,536 $37,371 $37,119 $1.69 
Quarter Ended March 31, 2021
Gross ProfitOperating IncomeIncome before Income TaxesNet Income
MGP Earnings(a)
Basic and Diluted EPS
Reported GAAP Results$32,299 $20,500 $20,042 $15,427 $15,281 $0.90 
Adjusted to remove:
Business acquisition costs (b)
— 1,890 1,890 1,768 1,768 0.11 
Adjusted Non-GAAP results$32,299 $22,390 $21,932 $17,195 $17,049 $1.01 


(a)MGP Earnings has been defined as "Net income used in Earnings Per Share calculation."

(b)The Business acquisition costs are included in the Condensed Consolidated Statement of Income within the Selling, general and administrative line item. The adjustment includes transaction and integration costs associated with the merger with Luxco.





MGP INGREDIENTS, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
(UNAUDITED)
(in thousands)


Quarter Ended March 31,
20222021
Net Income$37,371 $15,427 
Interest expense1,598 488 
Income tax expense11,165 4,615 
Depreciation and amortization5,621 3,311 
Equity method investment(394)— 
Business acquisition costs— 1,890 
Adjusted EBITDA$55,361 $25,731 


The non-GAAP adjusted EBITDA measure is defined as earnings before interest, taxes, depreciation and amortization, equity method investment and business acquisition costs. See section "reconciliation of selected GAAP measure to non-GAAP measures" for further details on each of these non-GAAP Items.



10