Financial Data and Key Metrics Changes - Consolidated sales increased 89% to $174.9 million, driven by strong growth across all business segments [23][28] - Consolidated gross profit rose 175% to $56.8 million, representing 32.5% of consolidated sales [23][28] - Net income increased 136% to $20.1 million, with earnings per share rising to $0.91 from $0.50 in the prior year [28] - Adjusted EBITDA increased to $42.3 million, representing a 170% increase from the prior year [28] Business Segment Data and Key Metrics Changes - Distillery Products segment sales increased 20.8% to $90.3 million, with gross profit improving to $32 million or 35.4% of segment sales [11] - Branded Spirits segment sales totaled $60.4 million, primarily due to the Luxco acquisition, with gross profit increasing to $18.4 million [17][18] - Ingredient Solutions segment sales grew 39.1% to a record $24.2 million, with gross profit increasing to $6.4 million, representing 26.5% of segment sales [20] Market Data and Key Metrics Changes - Aged whiskey sales showed strong growth, reflecting solid pricing, margins, and demand [12] - White goods sales increased by 22.4% from the prior year, primarily due to improved prices [13] - Industrial alcohol sales decreased 35.7%, attributed to reduced third-party sales from a former joint venture partner [14] Company Strategy and Development Direction - The integration of the Luxco acquisition is on track, improving gross profit and cash flow generation [8] - The company continues to focus on optimizing gross profits and margins across its brand portfolio [19] - The strategy includes targeting adequate inventory levels to support both the company's brands and customer needs [42] Management's Comments on Operating Environment and Future Outlook - Management highlighted three primary headwinds: potential COVID resurgence, increased commodity costs, and supply chain disruptions [38][39][40] - Despite these challenges, demand for products remains robust, and the company is well-positioned to mitigate these issues [41] - Full-year guidance reflects anticipated moderation in aged whiskey demand in the latter half of the year [12][35] Other Important Information - The company announced a second quarter dividend of $0.12 per share, marking the 11th consecutive year of dividend payments [36] - Cash flow from operations totaled $30.5 million, significantly up from $5.4 million last year [31] - The company ended the quarter with a debt balance of $278.4 million and a cash balance of $37.2 million [33] Q&A Session Summary Question: Aged whiskey sales performance and inventory levels - Management confirmed that strong sales allowed them to maintain inventory levels, with adequate amounts to support future growth [52][66] Question: Growth rates in different whiskey categories post-Luxco acquisition - Management noted strong growth in premium and ultra-premium categories, with expectations for continued growth as on-premise accounts fully open [55][58] Question: Future growth expectations for Ingredient Solutions - Management indicated that while the current growth rates are inflated due to last year's cyber security event, sustainable growth will be more in line with previous expectations [60][61] Question: Inventory management and optimization opportunities post-acquisition - Management emphasized the intention to utilize Luxco's inventory to support brand growth rather than bulk sales, focusing on maximizing margin returns [72]

Financial Performance - Sales for the quarter ended June 30, 2021, were $174,939, an increase of 89.0% compared to the same quarter in 2020, driven by growth in the Branded Spirits, Distillery Products, and Ingredient Solutions segments[111]. - Gross profit for the quarter ended June 30, 2021, was $56,827, reflecting a 174.5% increase year-over-year, with significant contributions from all segments[113]. - Operating income for the quarter ended June 30, 2021, increased to $27,663, up 144.0% from $11,338 in the same quarter of 2020[116]. - Net income for the quarter ended June 30, 2021, was $20,059, representing a 136.3% increase compared to $8,490 in the prior year[111]. - Year-to-date sales ended June 30, 2021, were $283,262, an increase of 47.8% compared to the same period in 2020, driven by strong performance across all segments[121]. - Year-to-date gross profit for the period ended June 30, 2021, was $89,126, a 103.0% increase year-over-year, with notable growth in the Distillery Products segment[123]. - Operating income for the year-to-date period ended June 30, 2021, was $48,163, a 92.3% increase from $25,046 in the same period of 2020[125]. Segment Performance - Total sales of Distillery Products for the quarter ended June 30, 2021, increased by $15,543, or 20.8%, compared to the prior year quarter[135]. - Gross profit for the Distillery Products segment increased by $16,131, or 101.7%, with gross margin rising to 35.4% from 21.2% year over year[136]. - Total sales of Branded Spirits for the quarter ended June 30, 2021, increased by $60,042, or 15,635.9%, compared to the prior year quarter[144]. - Gross profit for Branded Spirits increased by $18,286, or 12,355.4%, although gross margin decreased to 30.5% from 38.5% due to purchase accounting adjustments related to the Merger[145]. - Year-to-date sales of Distillery Products increased by $24,653, or 16.0%, compared to the year-ago period[140]. - Year-to-date gross profit for Distillery Products increased by $26,317, or 77.6%, with gross margin improving to 33.7% from 22.0%[141]. - Total branded spirits sales for the year to date ended June 30, 2021, increased by $60,124, or 6,895% compared to the prior year[149]. - Gross profit for the year to date ended June 30, 2021, increased by $18,182, or 5,379%, while gross margin decreased to 30.4% from 38.8%[150]. - Ingredient Solutions sales for the quarter ended June 30, 2021, increased by $6,794, or 39.1%, driven by higher sales of specialty wheat starches and proteins[154]. - Total Ingredient Solutions sales for the year to date ended June 30, 2021, increased by $6,843, or 18.8%, compared to the prior year[158]. - Gross profit for Ingredient Solutions increased by $1,708, or 36.3%, for the quarter ended June 30, 2021[155]. - The increase in gross profit was primarily driven by higher sales volumes of specialty wheat starches and proteins, partially offset by higher input costs[159]. Expenses and Taxation - SG&A expenses for the quarter ended June 30, 2021, were $29,164, an increase of 211.4% compared to the prior year, primarily due to the acquisition of Luxco's expenses[114]. - The effective tax rate for the quarter ended June 30, 2021, was 24.2%, compared to 23.1% in the same quarter of 2020[111]. - Income tax expense for the year to date ended June 30, 2021, was $11,027, with an effective tax rate of 23.7%, compared to $5,774 and 24.0% for the same period in 2020[128]. - Earnings per share (EPS) increased to $1.81 for the year to date ended June 30, 2021, a 69.1% increase from $1.07 in the prior year[129][130]. Cash Flow and Capital Expenditures - Cash provided by operating activities for the year to date ended June 30, 2021, was $47,454, an increase of $41,468 compared to the prior year[163]. - Cash used in investing activities for the year to date ended June 30, 2021, was $170,235, primarily due to the Merger of Luxco[166]. - Capital expenditures for the year to date ended June 30, 2021, were $18,336, with expectations of approximately $51,500 in capital expenditures for 2021[168]. - Cash provided by financing activities for the year to date ended June 30, 2021, was $138,359, primarily due to net proceeds from debt[169]. - Cash provided from financing activities for the year to date ended June 30, 2020, was $14,857, primarily due to net proceeds from debt of $24,501[170]. Debt and Shareholder Returns - Total debt was $270,391 at June 30, 2021, compared to $39,871 at December 31, 2020[177]. - The Company repurchased approximately 159,104 shares of common stock for $4,053 during the year to date ended June 30, 2020[173]. - The Board of Directors declared a quarterly dividend of $0.12 per share, payable on September 3, 2021, totaling $2,052[176]. - The Company completed a merger with Luxco on April 1, 2021, with an aggregate consideration of $237,500 in cash and 5,007,833 shares of common stock[181]. - The Company has $20,947 remaining under the share repurchase plan as of June 30, 2021[172]. Liquidity and Market Conditions - At June 30, 2021, current assets exceeded current liabilities by $270,203, largely due to inventories of $232,292[180]. - A 100 basis point increase in market interest rates would increase annual interest expense by $2,401 based on variable-rate borrowings[185]. - The cash balance at June 30, 2021, was $37,243, with $168,000 remaining for additional borrowings under the Credit Agreement[180]. - The Company anticipates sufficient cash flows to support short-term liquidity and operating needs following the merger[181].

MGP Ingredient, Inc. (NASDAQ:MGPI) Q1 2021 Earnings Conference Call May 5, 2021 10:00 AM ET Company Participants Mike Houston - Investor Relations Dave Colo - President and Chief Executive Officer Brandon Gall - Vice President of Finance and Chief Financial Officer Conference Call Participants Alex Fuhrman - Craig-Hallum Bill Chappell - Truist Securities Operator Good day and welcome to the MGP Ingredients First Quarter 2021 Financial Results Conference Call. [Operator Instructions] Please note this event i ...

PART I. FINANCIAL INFORMATION [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited statements show significant profitability growth driven by higher sales and detail the definitive agreement to acquire Luxco, Inc Condensed Consolidated Statements of Income (Q1 2021 vs Q1 2020) (in thousands, except per share data) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Sales | $108,323 | $99,082 | | Gross Profit | $32,299 | $23,211 | | Operating Income | $20,500 | $13,708 | | Net Income | $15,427 | $9,842 | | Basic and Diluted EPS | $0.90 | $0.57 | Condensed Consolidated Balance Sheets (As of March 31, 2021) (in thousands) | Metric | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Current Assets | $229,548 | $222,283 | | Total Assets | $381,102 | $366,575 | | Total Current Liabilities | $55,003 | $53,329 | | Total Liabilities | $102,591 | $104,049 | | Total Stockholders' Equity | $278,511 | $262,526 | Condensed Consolidated Statements of Cash Flows (Q1 2021 vs Q1 2020) (in thousands) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,990 | $542 | | Net cash used in investing activities | ($13,340) | ($8,189) | | Net cash (used in) provided by financing activities | ($2,726) | $46,997 | | Increase in cash and cash equivalents | $924 | $39,350 | - On January 22, 2021, the Company entered into a definitive agreement to acquire Luxco, Inc for **$237.5 million in cash** and **5,007,833 shares** of common stock, with the merger completed on April 1, 2021[44](index=44&type=chunk)[45](index=45&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Consolidated sales rose 9.3% and operating income grew 49.6%, driven by strong performance in the Distillery Products segment - The acquisition of Luxco, Inc was completed on April 1, 2021, for aggregate consideration of **$237.5 million in cash** and approximately **5 million shares** of common stock, expected to significantly increase MGP's scale in the branded-spirits sector[84](index=84&type=chunk) Consolidated Results Summary (Q1 2021 vs Q1 2020) (in thousands) | Metric | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Sales | $108,323 | $99,082 | 9.3% | | Gross Profit | $32,299 | $23,211 | 39.2% | | Operating Income | $20,500 | $13,708 | 49.6% | | Net Income | $15,427 | $9,842 | 56.7% | - Distillery Products segment sales **increased 11.5% YoY**, driven by a **49.3% increase in brown goods sales**, with segment gross profit growing **55.2%** to $28.3 million[101](index=101&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - Ingredient Solutions segment sales were flat, but gross profit **decreased by 20.0%** to $4.0 million due to a temporary production shutdown caused by extreme weather[106](index=106&type=chunk)[109](index=109&type=chunk) - Cash provided by operating activities **increased significantly to $17.0 million** in Q1 2021 from $0.5 million in Q1 2020, primarily due to higher net income and favorable changes in working capital[112](index=112&type=chunk)[113](index=113&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to commodity price and interest rate risks, managed through supply contracts and fixed-rate debt - The company is exposed to market price volatility for key input costs, including grain, wheat flour, and natural gas, and uses supply contracts for future delivery to manage this risk[131](index=131&type=chunk) - A hypothetical **100 basis point increase** in market interest rates would have **no impact** on the company's variable-rate interest expense but would decrease the fair value of its outstanding fixed-rate debt by **$1,543 thousand**[133](index=133&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of the end of the quarter[135](index=135&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have **materially affected, or are reasonably likely to materially affect**, these controls[136](index=136&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company faces lawsuits related to aged whiskey sales forecasts and is managing the aftermath of a facility fire and a ransomware attack - The company is defending against consolidated putative class action and derivative lawsuits alleging **false and misleading statements** regarding forecasts for aged whiskey sales[66](index=66&type=chunk)[67](index=67&type=chunk) - The company is managing the aftermath of a November 2020 feed dryer fire and a May 2020 ransomware cyber-attack, with **insurance expected to cover a portion of the losses**[64](index=64&type=chunk)[65](index=65&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) Key risks include operational interruptions, acquisition integration, commodity price volatility, the COVID-19 pandemic, and cybersecurity threats - Operational risks include interruptions at facilities, such as the November 2020 dryer fire, and catastrophic events that could damage **significant inventory of aged whiskeys**[140](index=140&type=chunk)[141](index=141&type=chunk)[143](index=143&type=chunk) - The company faces risks from the **successful integration of acquisitions**, such as the recent Luxco acquisition, including achieving synergies, retaining key personnel, and managing increased debt[169](index=169&type=chunk)[171](index=171&type=chunk) - Profitability is significantly affected by **volatile input costs** like grain, wheat flour, agave, and natural gas, which may not be fully recoverable through price increases[145](index=145&type=chunk)[146](index=146&type=chunk) - The ongoing COVID-19 pandemic poses risks of **operational disruption, supply chain interruptions, and reduced consumer demand**[174](index=174&type=chunk) - Cybersecurity threats, such as the ransomware attack experienced in May 2020, pose a **significant risk to IT systems, data confidentiality, and business operations**[162](index=162&type=chunk)[164](index=164&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred, and share repurchases were limited to covering taxes on vested RSUs - There were **no unregistered sales of equity securities** in Q1 2021[206](index=206&type=chunk) Issuer Purchases of Equity Securities (Q1 2021) (dollar values in thousands) | Period | Total Shares Purchased | Average Price Paid per Share | Publicly Announced Program Purchases | Remaining Authorization Value | | :--- | :--- | :--- | :--- | :--- | | Jan 2021 | 12 | $49.07 | $0 | $20,947,113 | | Feb 2021 | 1,635 | $67.16 | $0 | $20,947,113 | | Mar 2021 | 8,729 | $64.58 | $0 | $20,947,113 | | **Total** | **10,376** | | **$0** | | - All shares purchased were vested RSUs withheld to cover employee withholding taxes, **not open market repurchases** under the publicly announced plan[208](index=208&type=chunk) [Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[210](index=210&type=chunk) [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[211](index=211&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[212](index=212&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including agreements related to the Luxco acquisition and credit facilities - Key exhibits filed include the **merger agreement for the Luxco acquisition**, related shareholder and registration rights agreements, and amendments to credit facilities[214](index=214&type=chunk)

MGP Ingredients, Inc. (NASDAQ:MGPI) Q4 2020 Earnings Conference Call February 25, 2021 10:00 AM ET Company Participants Mike Houston - Investor Relations Dave Colo - President and Chief Executive Officer Brandon Gall - Vice President, Finance and Chief Financial Officer Conference Call Participants Bill Chappell - Truist Securities Alex Fuhrman - Craig-Hallum Operator Good morning and welcome to the MGP Ingredients Fourth Quarter and Full Year 2020 Financial Results Conference Call. [Operator Instructions] ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 0-17196 MGP Ingredients, Inc. (Exact N ...

MGP Ingredients, Inc. (NASDAQ:MGPI) Q3 2020 Earnings Conference Call October 29, 2020 10:00 AM ET Company Participants Mike Houston - Investor Relations Dave Colo - President and Chief Executive Officer Brandon Gall - Vice President of Finance and Chief Financial Officer Conference Call Participants Mitchell Pinheiro - Sturdivant & Co. Bill Chappell - Truist Securities, Inc. Alex Fuhrman - Craig-Hallum Capital Group Ben Klieve - National Securities Corporation Donald McLee - Berenberg Operator Good morning ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________________ to _________________________________ Commission File Number: 0-17196 MGP INGREDIENTS, INC. (Exact name of registrant as specifie ...

MGP Ingredients, Inc. (NASDAQ:MGPI) Q2 2020 Earnings Conference Call July 30, 2020 10:00 AM ET Company Participants Mike Houston - Lambert & Co. Dave Colo - President & Chief Executive Officer Brandon Gall - Vice President-Finance & Chief Financial Officer Conference Call Participants Donald McLee - Berenberg Bill Chappell - SunTrust Alex Fuhrman - Craig-Hallum Capital Group Ben Klieve - National Securities Corp Operator Good day, and welcome to the Second Quarter 2020 Results Conference Call. All participa ...

PART I. FINANCIAL INFORMATION Presents the company's unaudited financial statements and management's discussion for the quarter and year-to-date periods [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents unaudited condensed consolidated financial statements, highlighting growth in sales, profit, and net income, with increased assets and strong cash flows [Condensed Consolidated Statements of Income (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) Details the company's financial performance, showing sales, cost of sales, gross profit, and net income for the quarter and year-to-date Consolidated Statements of Income (Unaudited) | Metric | Quarter Ended June 30, 2020 ($ in thousands) | Quarter Ended June 30, 2019 ($ in thousands) | Year to Date Ended June 30, 2020 ($ in thousands) | Year to Date Ended June 30, 2019 ($ in thousands) | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------------ | :------------------------------------------------ | | Sales | $92,560 | $90,501 | $191,642 | $179,597 | | Cost of sales | $71,858 | $70,979 | $147,729 | $143,415 | | Gross profit | $20,702 | $19,522 | $43,913 | $36,182 | | Selling, general and administrative expenses | $9,364 | $8,648 | $18,867 | $16,795 | | Operating income | $11,338 | $10,874 | $25,046 | $19,387 | | Income before income taxes | $11,040 | $10,553 | $24,106 | $18,814 | | Income tax expense | $2,550 | $2,642 | $5,774 | $1,183 | | Net income | $8,490 | $7,911 | $18,332 | $17,631 | | Net income attributable to common shareholders | $8,433 | $7,860 | $18,209 | $17,514 | | Basic and diluted earnings per common share | $0.50 | $0.46 | $1.07 | $1.03 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Presents net income and other comprehensive income components, such as changes in post-employment benefit plans, for the reported periods Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Quarter Ended June 30, 2020 ($ in thousands) | Quarter Ended June 30, 2019 ($ in thousands) | Year to Date Ended June 30, 2020 ($ in thousands) | Year to Date Ended June 30, 2019 ($ in thousands) | | :------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------------------------------------ | :------------------------------------------------ | | Net income | $8,490 | $7,911 | $18,332 | $17,631 | | Change in Company-sponsored post-employment benefit plan | $21 | $(16) | $15 | $(2) | | Comprehensive income | $8,511 | $7,895 | $18,347 | $17,629 | [Condensed Consolidated Balance Sheets (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2020 ($ in thousands) | December 31, 2019 ($ in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $11,745 | $3,309 | | Receivables, net | $54,164 | $40,931 | | Inventory | $147,108 | $136,931 | | Total current assets | $217,038 | $184,206 | | Property, plant, and equipment, net | $128,603 | $128,419 | | Total assets | $357,013 | $322,597 | | Total current liabilities | $39,195 | $39,295 | | Long-term debt, less current maturities | $40,463 | $40,658 | | Credit agreement - revolver | $23,662 | $1 | | Total liabilities | $114,316 | $91,553 | | Total stockholders' equity | $242,697 | $231,044 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Outlines cash inflows and outflows from operating, investing, and financing activities for the year-to-date periods Consolidated Statements of Cash Flows (Unaudited) | Metric | Year to Date Ended June 30, 2020 ($ in thousands) | Year to Date Ended June 30, 2019 ($ in thousands) | | :------------------------------------ | :------------------------------------------------ | :------------------------------------------------ | | Net cash provided by operating activities | $5,986 | $3,070 | | Net cash used in investing activities | $(12,407) | $(7,369) | | Net cash provided by financing activities | $14,857 | $1,436 | | Increase (decrease) in cash and cash equivalents | $8,436 | $(2,863) | | Cash and cash equivalents, beginning of period | $3,309 | $5,025 | | Cash and cash equivalents, end of period | $11,745 | $2,162 | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) Details changes in stockholders' equity, including net income, dividends, share-based compensation, and stock repurchases Changes in Stockholders' Equity (YTD June 30, 2020) | Metric | Balance, Dec 31, 2019 ($ in thousands) | Net Income ($ in thousands) | Dividends ($ in thousands) | Share-based Compensation ($ in thousands) | Stock Shares Repurchased ($ in thousands) | Balance, June 30, 2020 ($ in thousands) | | :-------------------------- | :----------------------------------- | :------------------------ | :----------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------------------ | | Total Stockholders' Equity | $231,044 | $18,332 | $(4,100) | $1,564 | $(4,395) | $242,697 | | Retained Earnings | $230,784 | $18,332 | $(4,100) | — | — | $245,016 | | Treasury Stock, at cost | $(20,242) | — | — | $804 | $(4,395) | $(23,833) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, revenue recognition, debt, equity, and other significant financial information - **Note 1. Accounting Policies and Basis of Presentation:** * MGP Ingredients, Inc. is a leading producer and supplier of premium distilled spirits (bourbon, rye, grain neutral spirits, industrial alcohol) and specialty wheat protein and starch food ingredients[25](index=25&type=chunk) * Inventory is stated at the lower of cost or net realizable value using the first-in, first-out (FIFO) method, with barreled bourbon and whiskeys classified as current assets[30](index=30&type=chunk) * Revenue is recognized when control of promised goods or services is transferred to the customer, including specific criteria for bill-and-hold arrangements in the Distillery Products segment[30](index=30&type=chunk)[32](index=32&type=chunk) * The Company adopted several Accounting Standard Updates (ASU 2016-13, 2017-04, 2018-13, 2019-12) on January 1, 2020, with no material impact on its consolidated financial statements[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) Note 2. Revenue - Sales by Segment and Major Products | Segment/Product | Q2 2020 Sales ($ in thousands) | Q2 2019 Sales ($ in thousands) | YTD 2020 Sales ($ in thousands) | YTD 2019 Sales ($ in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | :------------------------------ | :------------------------------ | | **Distillery Products Total** | **$75,189** | **$74,023** | **$155,191** | **$148,600** | | Brown goods | $25,540 | $27,621 | $54,610 | $52,448 | | Industrial alcohol | $22,953 | $20,636 | $44,571 | $41,079 | | Warehouse services | $3,699 | $3,496 | $7,600 | $7,025 | | **Ingredient Solutions Total** | **$17,371** | **$16,478** | **$36,451** | **$30,997** | | Specialty wheat starches | $9,122 | $7,210 | $19,334 | $14,090 | | Specialty wheat proteins | $6,013 | $5,276 | $12,378 | $9,718 | | **Total Sales** | **$92,560** | **$90,501** | **$191,642** | **$179,597** | Note 3. Goodwill and Other Intangible Assets | Metric | Balance at December 31, 2019 ($ in thousands) | Acquisitions ($ in thousands) | Balance at June 30, 2020 ($ in thousands) | | :-------------------------------- | :------------------------------------------ | :-------------------------- | :---------------------------------------- | | Goodwill (Distillery Products) | $1,850 | $1,739 | $3,589 | | Trade names (indefinite-lived) | $350 | N/A | $890 | - **Note 4. Corporate Borrowings:** * Total indebtedness outstanding (net of unamortized loan fees) increased to **$64,533 thousand** at June 30, 2020, from **$41,060 thousand** at December 31, 2019[46](index=46&type=chunk) * The Company entered into a new **$300,000 thousand** revolving credit facility on February 14, 2020, maturing in 2025, replacing a previous agreement. As of June 30, 2020, **$25,000 thousand** was outstanding, leaving **$275,000 thousand** available[47](index=47&type=chunk) * The Company was in compliance with all credit agreement and note purchase agreement covenants at June 30, 2020[47](index=47&type=chunk)[48](index=48&type=chunk) Note 5. Income Taxes - Expense and Effective Rate | Metric | Quarter Ended June 30, 2020 | Quarter Ended June 30, 2019 | Year to Date Ended June 30, 2020 | Year to Date Ended June 30, 2019 | | :-------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | Income tax expense | $2,550 | $2,642 | $5,774 | $1,183 | | Effective tax rate | 23.1% | 25.0% | 24.0% | 6.3% | - **Note 5. Income Taxes (continued):** * The effective tax rate for YTD June 30, 2020, was **24.0%**, primarily due to state taxes and an estimated increase in valuation allowance, partially offset by federal and state credits[50](index=50&type=chunk) * The Company is monetizing parts of the CARES Act, including deferring Social Security taxes and estimated income tax payments, which impacted the income taxes payable balance[53](index=53&type=chunk) Note 6. Equity and EPS - Basic and Diluted EPS | Metric | Quarter Ended June 30, 2020 | Quarter Ended June 30, 2019 | Year to Date Ended June 30, 2020 | Year to Date Ended June 30, 2019 | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :------------------------------- | :------------------------------- | | Net income attributable to common shareholders | $8,433 | $7,860 | $18,209 | $17,514 | | Basic and diluted weighted average common shares | 16,899,079 | 17,021,599 | 16,956,502 | 16,994,864 | | Basic and diluted EPS | $0.50 | $0.46 | $1.07 | $1.03 | - **Note 6. Equity and EPS (continued):** * The Board approved a **$25,000 thousand** share repurchase authorization on February 25, 2019, valid through February 27, 2022. During YTD June 30, 2020, **159,104 shares** were repurchased for **$4,053 thousand**, with **$20,947 thousand** remaining under the plan[56](index=56&type=chunk) - **Note 7. Commitments and Contingencies:** * In May 2020, the Company was affected by a ransomware cyber-attack that temporarily disrupted production at its Atchison facilities, adversely impacting gross profit by an estimated **$1,728 thousand**. Financial information and sensitive data were not affected, and the Company is seeking insurance recovery[58](index=58&type=chunk)[59](index=59&type=chunk) * A consolidated class action lawsuit was filed alleging false/misleading statements regarding aged whiskey sales forecasts, seeking compensatory damages. The Company intends to vigorously defend itself[60](index=60&type=chunk) * Multiple shareholder derivative actions were filed against current/former officers and directors, alleging damages related to the securities litigation, stock repurchases, and executive compensation[61](index=61&type=chunk) * A Clean Air Act violation case related to a 2016 chemical release was terminated on May 27, 2020, with the Company paying a **$1,000 thousand** fine. Private lawsuits for damages are possible, with insurance expected to provide coverage[63](index=63&type=chunk)[64](index=64&type=chunk) - **Note 8. Employee and Non-Employee Benefit Plans:** * As of June 30, 2020, **421,220 Restricted Stock Units (RSUs)** were granted under the 2014 Plan and **89,840 shares** under the Directors' Plan[66](index=66&type=chunk) * The Executive Deferred Compensation Plan (EDC Plan) had investments of **$1,516 thousand** at June 30, 2020 (vs. **$1,185 thousand** at December 31, 2019), classified as Level 1 in the fair value hierarchy[68](index=68&type=chunk) Note 9. Operating Segments - Sales and Gross Profit | Metric | Q2 2020 Distillery Products ($ in thousands) | Q2 2019 Distillery Products ($ in thousands) | Q2 2020 Ingredient Solutions ($ in thousands) | Q2 2019 Ingredient Solutions ($ in thousands) | | :-------------------- | :------------------------------------------- | :------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Sales to Customers | $75,189 | $74,023 | $17,371 | $16,478 | | Gross Profit | $16,002 | $16,503 | $4,700 | $3,019 | | Income (loss) before Income Taxes | $14,434 | $14,866 | $4,099 | $2,325 | | Metric | YTD 2020 Distillery Products ($ in thousands) | YTD 2019 Distillery Products ($ in thousands) | YTD 2020 Ingredient Solutions ($ in thousands) | YTD 2019 Ingredient Solutions ($ in thousands) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Sales to Customers | $155,191 | $148,600 | $36,451 | $30,997 | | Gross Profit | $34,251 | $31,742 | $9,662 | $4,440 | | Income (loss) before Income Taxes | $30,667 | $28,301 | $8,313 | $3,100 | - **Note 10. Subsequent Events:** * On July 28, 2020, the Board of Directors declared a quarterly dividend of **$0.12 per share** and per unit, payable on September 4, 2020, to stockholders of record as of August 21, 2020[73](index=73&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=23&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's discussion and analysis of financial condition, results of operations, liquidity, and the impact of COVID-19 and a cyber-attack [CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS](index=23&type=section&id=CAUTIONARY%20NOTE%20CONCERNING%20FACTORS%20THAT%20MAY%20AFFECT%20FUTURE%20RESULTS) Highlights that forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied. The Company undertakes no obligation to update or revise any forward-looking statements[74](index=74&type=chunk) [OVERVIEW](index=23&type=section&id=OVERVIEW) Introduces MGP as a leading producer of distilled spirits and food ingredients, noting the impact of COVID-19 and a cyber-attack - MGP is a leading producer and supplier of premium distilled spirits and specialty wheat protein and starch food ingredients, operating through two reportable segments: Distillery Products and Ingredient Solutions[78](index=78&type=chunk) - The Company's operations, supply chain, and customer demand have not been significantly affected by COVID-19 as of the report date, but the situation is being closely monitored. Incremental costs incurred for safety measures were immaterial[75](index=75&type=chunk)[76](index=76&type=chunk) - A ransomware cyber-attack in May 2020 temporarily disrupted production at Atchison facilities, adversely impacting gross profit by an estimated **$1,728 thousand**, though financial information and sensitive data were not affected[77](index=77&type=chunk) [RESULTS OF OPERATIONS](index=24&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes consolidated financial performance for the quarter and year-to-date, detailing sales, gross profit, and net income changes Consolidated Results (Quarter Ended June 30, 2020 vs. 2019) | Metric | Q2 2020 | Q2 2019 | % Change | Change (pp) | | :-------------------------------- | :------ | :------ | :------- | :---------- | | Sales | $92,560 | $90,501 | 2.3% | | | Gross profit | $20,702 | $19,522 | 6.0% | | | Gross margin % | 22.4% | 21.6% | | 0.8 | | SG&A expenses | $9,364 | $8,648 | 8.3% | | | Operating income | $11,338 | $10,874 | 4.3% | | | Operating margin % | 12.2% | 12.0% | | 0.2 | | Net income | $8,490 | $7,911 | 7.3% | | | Net income margin % | 9.2% | 8.7% | | 0.5 | | Basic and diluted EPS | $0.50 | $0.46 | 8.7% | | - For Q2 2020, the increase in gross profit was driven by the Ingredient Solutions segment (up **$1,681 thousand** or **55.7%**), partially offset by a decrease in the Distillery Products segment (down **$501 thousand** or **3.0%**). Both segments' gross profits were negatively impacted by increased production costs due to the cyber-attack[83](index=83&type=chunk) Consolidated Results (Year to Date Ended June 30, 2020 vs. 2019) | Metric | YTD 2020 | YTD 2019 | % Change | Change (pp) | | :-------------------------------- | :------- | :------- | :------- | :---------- | | Sales | $191,642 | $179,597 | 6.7% | | | Gross profit | $43,913 | $36,182 | 21.4% | | | Gross margin % | 22.9% | 20.1% | | 2.8 | | SG&A expenses | $18,867 | $16,795 | 12.3% | | | Operating income | $25,046 | $19,387 | 29.2% | | | Operating margin % | 13.1% | 10.8% | | 2.3 | | Net income | $18,332 | $17,631 | 4.0% | | | Net income margin % | 9.6% | 9.8% | | (0.2) | | Basic and diluted EPS | $1.07 | $1.03 | 3.9% | | - For YTD June 30, 2020, gross profit increased in both Ingredient Solutions (up **$5,222 thousand** or **117.6%**) and Distillery Products (up **$2,509 thousand** or **7.9%**), despite negative impacts from cyber-attack related production costs[93](index=93&type=chunk) - SG&A expenses increased for both periods primarily due to higher personnel and incentive compensation costs, including those related to the CEO transition[84](index=84&type=chunk)[94](index=94&type=chunk) [SEGMENT RESULTS](index=28&type=section&id=SEGMENT%20RESULTS) Provides a detailed breakdown of sales and gross profit performance for the Distillery Products and Ingredient Solutions segments Distillery Products Segment Results (Quarter Ended June 30, 2020 vs. 2019) | Product Category | Q2 2020 Sales ($ in thousands) | Q2 2019 Sales ($ in thousands) | % Change | Gross Profit Q2 2020 ($ in thousands) | Gross Profit Q2 2019 ($ in thousands) | Gross Profit % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | :------------------------------------ | :------------------------------------ | :-------------------- | | Total Distillery Products Sales | $75,189 | $74,023 | 1.6% | $16,002 | $16,503 | (3.0)% | | Industrial alcohol | $22,953 | $20,636 | 11.2% | | | | | Distillers feed and related co-products | $6,781 | $6,181 | 9.7% | | | | | Brown goods | $25,540 | $27,621 | (7.5)% | | | | - Q2 2020 Distillery Products sales increase was driven by higher volume and favorable pricing in industrial alcohol and white goods, and favorable pricing in distillers feed. Brown goods sales decreased due to lower volume. Gross profit declined due to higher input costs and cyber-attack related production costs[103](index=103&type=chunk)[104](index=104&type=chunk) Distillery Products Segment Results (Year to Date Ended June 30, 2020 vs. 2019) | Product Category | YTD 2020 Sales ($ in thousands) | YTD 2019 Sales ($ in thousands) | % Change | Gross Profit YTD 2020 ($ in thousands) | Gross Profit YTD 2019 ($ in thousands) | Gross Profit % Change | | :-------------------------------- | :------------------------------ | :------------------------------ | :------- | :------------------------------------- | :------------------------------------- | :-------------------- | | Total Distillery Products Sales | $155,191 | $148,600 | 4.4% | $34,251 | $31,742 | 7.9% | | Industrial alcohol | $44,571 | $41,079 | 8.5% | | | | | Brown Goods | $54,610 | $52,448 | 4.1% | | | | | Warehouse services | $7,600 | $7,025 | 8.2% | | | | - YTD 2020 Distillery Products sales growth was led by industrial alcohol (volume and pricing), brown goods (volume), and warehouse services (customer demand). Gross profit increased due to higher brown goods volumes and favorable industrial alcohol pricing, partially offset by higher input costs and cyber-attack related production costs[107](index=107&type=chunk)[108](index=108&type=chunk) Ingredient Solutions Segment Results (Quarter Ended June 30, 2020 vs. 2019) | Product Category | Q2 2020 Sales ($ in thousands) | Q2 2019 Sales ($ in thousands) | % Change | Gross Profit Q2 2020 ($ in thousands) | Gross Profit Q2 2019 ($ in thousands) | Gross Profit % Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :------- | :------------------------------------ | :------------------------------------ | :-------------------- | | Total Ingredient Solutions Sales | $17,371 | $16,478 | 5.4% | $4,700 | $3,019 | 55.7% | | Specialty wheat starches | $9,122 | $7,210 | 26.5% | | | | | Specialty wheat proteins | $6,013 | $5,276 | 14.0% | | | | | Commodity wheat starches | $1,774 | $3,013 | (41.1)% | | | | - Q2 2020 Ingredient Solutions sales increased due to higher sales volume of specialty wheat starches and proteins, partially offset by decreased commodity wheat product sales. Gross profit surged due to increased specialty product sales volume and favorable mix, despite cyber-attack related production costs[113](index=113&type=chunk)[114](index=114&type=chunk) Ingredient Solutions Segment Results (Year to Date Ended June 30, 2020 vs. 2019) | Product Category | YTD 2020 Sales ($ in thousands) | YTD 2019 Sales ($ in thousands) | % Change | Gross Profit YTD 2020 ($ in thousands) | Gross Profit YTD 2019 ($ in thousands) | Gross Profit % Change | | :-------------------------------- | :------------------------------ | :------------------------------ | :------- | :------------------------------------- | :------------------------------------- | :-------------------- | | Total Ingredient Solutions Sales | $36,451 | $30,997 | 17.6% | $9,662 | $4,440 | 117.6% | | Specialty wheat starches | $19,334 | $14,090 | 37.2% | | | | | Specialty wheat proteins | $12,378 | $9,718 | 27.4% | | | | | Commodity wheat starches | $3,651 | $5,275 | (30.8)% | | | | - YTD 2020 Ingredient Solutions sales increased significantly due to higher sales volume and favorable pricing of specialty wheat starches and proteins, partially offset by decreased commodity wheat product sales. Gross profit more than doubled due to these factors, despite cyber-attack related production costs[119](index=119&type=chunk)[120](index=120&type=chunk) [CASH FLOW, FINANCIAL CONDITION AND LIQUIDITY](index=32&type=section&id=CASH%20FLOW,%20FINANCIAL%20CONDITION%20AND%20LIQUIDITY) Assesses the company's cash flow from operations, investing, and financing activities, along with its overall financial condition and liquidity position - The Company's financial condition is strong, with adequate cash generation from operations and ready access to capital. Primary cash sources include operating cash flow, the Credit Agreement, and Note Purchase Agreement[121](index=121&type=chunk)[122](index=122&type=chunk) Cash Flow Summary (Year to Date Ended June 30, 2020 vs. 2019) | Metric | YTD 2020 ($ in thousands) | YTD 2019 ($ in thousands) | Change ($ in thousands) | | :------------------------------------ | :------------------------ | :------------------------ | :---------------------- | | Cash provided by operating activities | $5,986 | $3,070 | $2,916 | | Cash used in investing activities | $(12,407) | $(7,369) | $(5,038) | | Cash provided by financing activities | $14,857 | $1,436 | $13,421 | | Increase (decrease) in cash and cash equivalents | $8,436 | $(2,863) | $11,299 | - **Operating Activities:** Net cash provided by operating activities increased to **$5,986 thousand** in YTD 2020, driven by net income and non-cash adjustments, partially offset by increased receivables and inventory. Deferral of income tax payments under the CARES Act provided **$5,778 thousand**[124](index=124&type=chunk) - **Investing Activities:** Cash used in investing activities increased to **$12,407 thousand** in YTD 2020, primarily due to **$10,177 thousand** in property, plant, and equipment additions and a **$2,750 thousand** business acquisition[126](index=126&type=chunk) - **Capital Spending:** Investments in property, plant, and equipment were **$10,177 thousand** in YTD 2020. The warehouse expansion project is substantially completed, with approximately **$49,800 thousand** incurred to date. The Company expects approximately **$19,600 thousand** in capital expenditures for 2020[127](index=127&type=chunk)[128](index=128&type=chunk) - **Financing Activities:** Cash provided by financing activities significantly increased to **$14,857 thousand** in YTD 2020, primarily due to **$24,501 thousand** in net proceeds from debt, partially offset by **$4,395 thousand** in treasury stock purchases and **$4,101 thousand** in dividends[129](index=129&type=chunk) - **Treasury Purchases & Share Repurchases:** During YTD 2020, **10,044 shares** valued at **$342 thousand** were purchased for treasury to cover withholding taxes on vested RSUs. Additionally, **159,104 shares** were repurchased for **$4,053 thousand** under the **$25,000 thousand** share repurchase program[131](index=131&type=chunk)[132](index=132&type=chunk) Dividends and Dividend Equivalents (YTD) | Period | Declared per Share and Unit | Total Payment ($ in thousands) | | :----- | :-------------------------- | :----------------------------- | | 2020 | $0.24 | $4,101 | | 2019 | $0.20 | $3,427 | - **Long-Term and Short-Term Debt:** Total debt (net) was **$64,533 thousand** at June 30, 2020, up from **$41,060 thousand** at December 31, 2019[135](index=135&type=chunk) - **Financial Condition and Liquidity:** Current assets exceeded current liabilities by **$177,843 thousand** at June 30, 2020, largely due to **$147,108 thousand** in inventories. The Company had a cash balance of **$11,745 thousand** and **$275,000 thousand** remaining available under its Credit Agreement, indicating strong liquidity to support operations and strategic investments[138](index=138&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=34&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Company is exposed to market risks related to commodity prices and interest rates, which it actively monitors and manages - **Commodity Costs:** The Company is exposed to market price risk for commodities like grain, wheat flour, and natural gas. It manages this through supply contracts for 1 to 24 months, which qualify for the normal purchases and sales exception under ASC 815[140](index=140&type=chunk) - **Interest Rate Exposures:** The Credit Agreement and Note Purchase Agreement expose the Company to market risks from adverse changes in interest rates. A **100 basis point** increase in variable-rate borrowings would increase annualized interest expense by **$316 thousand**[141](index=141&type=chunk)[142](index=142&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - **Evaluation of Disclosure Controls and Procedures:** The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2020[143](index=143&type=chunk) - **Changes in Internal Controls:** There were no material changes in the Company's internal controls over financial reporting during the fiscal quarter ended June 30, 2020[144](index=144&type=chunk) PART II. OTHER INFORMATION Presents additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Company's legal proceedings include a resolved Clean Air Act case and ongoing class action and derivative lawsuits - The federal charges for alleged Clean Air Act violations related to a 2016 chemical release were resolved, with the Company pleading guilty to a misdemeanor and paying a **$1,000 thousand** fine, terminating the matter[147](index=147&type=chunk) - Various other legal proceedings in the ordinary course of business are not expected to have a material adverse effect on the Company[147](index=147&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) Updates risk factors, emphasizing IT system failures, cybersecurity threats, and the ongoing COVID-19 pandemic's potential negative impacts - A failure of IT systems, networks, or services, including those of third-party vendors, or increased cybersecurity threats (e.g., ransomware attacks) could disrupt operations, lead to data loss, reputational harm, and financial losses[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - In May 2020, the Company experienced a ransomware attack that temporarily disrupted production and adversely impacted gross profit by **$1,728 thousand**. While financial data was unaffected and cybersecurity measures were enhanced, future cyber events cannot be guaranteed against[152](index=152&type=chunk)[153](index=153&type=chunk) - The COVID-19 pandemic could continue to negatively impact the global economy and the Company's operations, including potential facility closures, supply chain interruptions, reduced customer demand, labor shortages, and increased compliance costs. The full extent of its impact remains highly uncertain[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities were reported, and details on the share repurchase program are provided - There were no unregistered sales of equity securities during the quarter ended June 30, 2020[160](index=160&type=chunk) - Under the **$25,000 thousand** share repurchase authorization (approved Feb 25, 2019, through Feb 27, 2022), no shares were purchased during the quarter ended June 30, 2020[162](index=162&type=chunk)[163](index=163&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=37&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The Company reported no defaults upon senior securities during the period - None[164](index=164&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=37&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the Company - Not applicable[165](index=165&type=chunk) [ITEM 5. OTHER INFORMATION](index=37&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The Company reported no other information for this period - None[166](index=166&type=chunk) [ITEM 6. EXHIBITS](index=38&type=section&id=ITEM%206.%20EXHIBITS) Lists all exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial information presented in iXBRL format - Exhibits include CEO and CFO Certifications (31.1, 31.2, 32.1, 32.2) and financial information formatted in iXBRL (101, 104)[168](index=168&type=chunk)