MGP Ingredients Reports Strong Profitability, Net Income Growth Amid Revenue Decline

MGP Ingredients, Inc. reported significant financial performance for the quarter and year-to-date ending September 30, 2024, showcasing a notable increase in net income and comprehensive income compared to the same periods in 2023. The net income attributable to the company for the quarter was $23.9 million, up from $13.2 million in the prior year, while year-to-date net income reached $76.6 million, slightly higher than $76.4 million in 2023. Comprehensive income for the quarter also rose to $24.4 million from $12.9 million, with year-to-date comprehensive income increasing to $77.0 million from $76.2 million.

Total revenue for the quarter was $161.5 million, a decrease of 24% from $211.6 million in the same quarter last year. Year-to-date revenue also fell by 16% to $522.8 million from $621.6 million. The decline in revenue was primarily attributed to decreased sales in the Distilling Solutions and Ingredient Solutions segments, influenced by market conditions and the closure of the Atchison Distillery in December 2023.

Despite the revenue decline, MGP Ingredients achieved an operating income of $32.6 million for the quarter, a substantial increase of 64% from $19.8 million in the previous year. This increase was driven by lower selling, general, and administrative (SG&A) expenses, which decreased by 20% to $17.2 million, and the absence of prior year impairment charges. The operating margin improved to 20.2%, up from 9.4% in the prior year.

The company’s balance sheet showed total current assets of $532.0 million as of September 30, 2024, an increase from $514.3 million at the end of 2023. Cash and cash equivalents rose to $20.8 million, while total assets increased to $1.44 billion. Total stockholders' equity also grew to $914.5 million from $850.5 million at the end of 2023.

Strategically, MGP Ingredients completed the acquisition of Penelope on June 1, 2023, enhancing its presence in the American whiskey market. The acquisition was structured as an asset purchase for $105 million, with potential earn-out considerations based on performance. The company also initiated a share repurchase program in February 2024, with approximately $90 million remaining for future repurchases.

Overall, MGP Ingredients demonstrated resilience in profitability despite revenue challenges, supported by strategic acquisitions and cost management initiatives.