Financial Data and Key Metrics Changes - Consolidated sales decreased by 29% to $121.7 million compared to the prior year period [23] - Adjusted EBITDA decreased by 46% to $21.8 million, primarily due to lower gross profits [26] - Adjusted earnings per common share declined to $0.36, while operating cash flows increased by nearly 82% to $44.7 million [8][27] - Gross profit decreased by 31% to $43.3 million, with gross margin declining by 120 basis points to 35.6% [24] Business Line Data and Key Metrics Changes - Branded Spirits segment sales declined by 4%, but the Premium Plus portfolio posted solid growth of 7% [23][9] - Distilling Solutions segment sales declined by 45%, primarily driven by a 49% decline in brown goods sales [23] - Ingredient Solutions sales decreased by 26%, impacted by supply challenges and decreased sales volume of specialty wheat starches and proteins [24][20] Market Data and Key Metrics Changes - The overall American whiskey category saw a production decline of 4% for the full year and 15% in the last three months of 2024 [15] - The company noted that the elevated inventory of barrels in the industry is expected to persist into 2026 [56] Company Strategy and Development Direction - The company is focusing on fewer but more attractive growth opportunities within its Branded Spirits portfolio [9] - Key initiatives include stabilizing the brown goods business, repositioning branded spirits for growth, and enhancing productivity [5][6] - The company is taking proactive actions to strengthen partnerships with customers in the Distilling Solutions segment [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the proactive steps being taken to stabilize the business and improve performance throughout the year [6] - The company reaffirmed its 2025 guidance, expecting net sales in the range of $520 million to $540 million [22] - Management acknowledged the challenges posed by elevated barrel inventories but remains optimistic about the future [56] Other Important Information - The company has made substantial progress in fortifying its balance sheet, including upsizing its credit facility and extending its private placement shelf [21][28] - The company is increasing investments in its ingredients facility to improve throughput and reliability [20] Q&A Session Summary Question: Visibility into the outlook for Distilling Solutions - Management confirmed discussions with 100% of contracted customers, leading to modifications in orders and pricing [34][35] Question: Outlook for Distilling Solutions segment and margins - Expectations for the Distilling Solutions segment remain unchanged, with anticipated sales down 50% and gross profit down 65% for the year [39] Question: Quantification of new distillate negotiations and customer demand - Management expects to conclude negotiations with the remaining 25% of customers soon, with no negative feedback impacting guidance [45] Question: Optimism for Ingredient Solutions despite challenges - Management highlighted operational improvements and upcoming projects that should enhance performance in the second half of the year [48][49] Question: Impact of anticipated tariffs on customer demand - Management did not observe any significant pull forward in demand due to anticipated tariffs [75] Question: Performance of Penelope brand - Management noted that Penelope's performance exceeded expectations, leading to an increase in contingent liability [64][78] Question: Ongoing CEO search and its impact on strategic initiatives - The CEO search is ongoing, but the company is making strides in leadership and executing strategic initiatives [106][108]

Financial Data and Key Metrics Changes - Consolidated sales decreased by 29% to $121.7 million compared to the prior year period [23] - Adjusted EBITDA decreased by 46% to $21.8 million, primarily due to lower gross profits [26] - Adjusted earnings per common share decreased to $0.36 per share, while operating cash flows increased by nearly 82% to $44.7 million [8][27] Business Line Data and Key Metrics Changes - Branded Spirits segment sales declined by 4%, but the Premium Plus portfolio posted a solid growth of 7% [23][9] - Distilling Solutions segment sales declined by 45%, driven by a 49% decline in brown goods sales [23] - Ingredient Solutions sales decreased by 26%, impacted by supply challenges and decreased sales volume of specialty wheat starches [24] Market Data and Key Metrics Changes - The overall American whiskey category is responding to the current environment with deeper production cuts, with total whiskey production down 4% for the full year [15][16] - The company expects net whiskey put away to be down materially in 2025 compared to 2024, reflecting a decision to right-size excess inventory [14] Company Strategy and Development Direction - The company is focusing on fewer but more attractive growth opportunities within its Branded Spirits portfolio [9] - Key initiatives include stabilizing the brown goods business, repositioning branded spirits for growth, and enhancing productivity [5][6] - The company is taking proactive actions to strengthen partnerships with customers in the Distilling Solutions segment [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the proactive steps taken to stabilize the business and improve performance throughout the year [6] - The company reaffirmed its 2025 guidance, expecting net sales in the range of $520 million to $540 million [21] - Management noted that while industry-wide barrel whiskey inventories remain elevated, early signs of stabilization are encouraging [6][31] Other Important Information - The company has made substantial progress in fortifying its balance sheet, including upsizing its credit facility and extending its private placement shelf [20][28] - The board of directors is taking steps to strengthen its ranks in anticipation of the next chapter of growth [31] Q&A Session Summary Question: Visibility into the outlook for Distilling Solutions - Management confirmed that discussions with 100% of contracted customers have led to modifications in volume and pricing, providing greater visibility for 2025 [35][36] Question: Outlook for the Distilling Solutions segment and margin expectations - Management expects sales for the Distilling Solutions segment to be down 50% for the year, with gross profit down 65% [41] Question: Quantification of new distillate negotiations and branded spirits stabilization - Management indicated that they expect to conclude negotiations with the remaining 25% of customers soon and are implementing price support for mid and value brands [47][49] Question: Optimism for Ingredient Solutions despite challenges - Management highlighted ongoing operational improvements and key projects that are expected to enhance performance in the second half of the year [51][54] Question: Impact of anticipated tariffs on customer demand - Management noted that there has been no significant pull forward in demand due to anticipated tariffs [79] Question: Performance of the Penelope brand - Management acknowledged that Penelope's performance exceeded expectations, leading to an increase in contingent liability on the balance sheet [68][84]

Core Insights - MGP reported a revenue of $121.65 million for the quarter ended March 2025, reflecting a 28.7% decline year-over-year, with EPS at $0.36 compared to $1.07 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $113.26 million by 7.41%, while the EPS surpassed the consensus estimate of $0.31 by 16.13% [1] Financial Performance - MGP's branded spirits sales were $48.23 million, slightly below the estimated $48.51 million, marking a year-over-year decrease of 3.8% [4] - Ingredient solutions sales reached $26.48 million, exceeding the estimated $26.11 million, but showing a significant decline of 25.5% compared to the previous year [4] - Distilling solutions sales were reported at $46.94 million, surpassing the average estimate of $38.64 million, yet reflecting a substantial year-over-year drop of 44.7% [4] Market Performance - Over the past month, MGP shares have returned 4.2%, contrasting with a 0.7% decline in the Zacks S&P 500 composite [3] - MGP currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Consolidated sales decreased by 29% to $121.7 million compared to the prior year period [21] - Adjusted EBITDA decreased by 46% to $21.8 million, primarily due to lower gross profits [25] - Adjusted earnings per common share declined to $0.36, while operating cash flows increased by nearly 82% to $44.7 million [6][26] - Gross profit decreased by 31% to $43.3 million, with gross margin declining by 120 basis points to 35.6% [23] Business Line Data and Key Metrics Changes - Branded Spirits segment sales decreased by 4%, while the Premium Plus portfolio posted a 7% growth [21][6] - Distilling Solutions segment sales declined by 45%, primarily driven by a 49% decline in brown goods sales [21] - Ingredient Solutions sales decreased by 26%, impacted by supply challenges and decreased sales volume of specialty wheat starches [22][15] Market Data and Key Metrics Changes - The overall American whiskey category is experiencing a production decline, with total whiskey production down 4% for the full year and down 15% in the last three months of 2024 [14] - The company is seeing a shift in consumer behavior, with more consumers opting to drink what they have at home rather than purchasing new products [98] Company Strategy and Development Direction - The company is focusing on fewer but more attractive growth opportunities within its Branded Spirits portfolio [7] - Key initiatives include stabilizing the brown goods business, repositioning branded spirits for growth, and enhancing productivity [5][4] - The company is taking proactive actions to strengthen partnerships with customers in the Distilling Solutions segment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the proactive steps being taken to stabilize the business and improve performance throughout the year [5] - The company reaffirmed its 2025 guidance, expecting net sales in the range of $520 million to $540 million and adjusted EBITDA between $105 million and $115 million [20] - Management noted that while the current environment is challenging, there are early signs of stabilization across all three segments [29] Other Important Information - The company has made substantial progress in fortifying its balance sheet, including upsizing its credit facility and extending its private placement shelf [19][27] - The company is prioritizing strong cash generation by managing working capital and reducing barrel inventory put away [25] Q&A Session Summary Question: Visibility into the outlook for Distilling Solutions - Management confirmed that discussions with 100% of contracted customers have led to modifications in orders and pricing, providing greater visibility for 2025 [34][35] Question: Outlook for the Distilling Solutions segment - Management expects sales for the Distilling Solutions segment to be down 50% for the year, with gross profit down 65% [39] Question: Quantification of new distillate negotiations - Management indicated that they expect to conclude negotiations with the remaining 25% of customers soon, with no negative feedback affecting their guidance [45][46] Question: Optimism for Ingredient Solutions - Management highlighted operational improvements and upcoming projects that are expected to enhance performance in the Ingredient Solutions segment [49][50] Question: Impact of anticipated tariffs on customer demand - Management stated that they have not seen any significant impact on customer demand related to anticipated tariffs [76] Question: Performance of the Penelope brand - Management noted that the Penelope brand performed better than expected, leading to an increase in contingent liability on the balance sheet [66][80]

Core Viewpoint - MGP (MGPI) reported quarterly earnings of $0.36 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, but down from $1.07 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was 16.13%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - MGP's revenues for the quarter ended March 2025 were $121.65 million, surpassing the Zacks Consensus Estimate by 7.41%, but down from $170.56 million year-over-year [3] Stock Performance - MGP shares have declined approximately 25.2% since the beginning of the year, compared to a 5.3% decline in the S&P 500 [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.73 on revenues of $140.29 million, and for the current fiscal year, it is $2.55 on revenues of $530.14 million [8] - The estimate revisions trend for MGP is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Beverages - Alcohol industry, to which MGP belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, suggesting potential challenges ahead [9] - Molson Coors Brewing (TAP), another company in the same industry, is expected to report a quarterly earnings decline of 15.8% year-over-year, with revenues projected at $2.44 billion, down 6% from the previous year [10][11]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2025, detailing a net loss of $3.0 million driven by a 29% sales decrease and a $14.7 million contingent consideration charge [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) For Q1 2025, MGP Ingredients reported a net loss of $3.0 million and diluted EPS of -$0.14, a significant decline from prior year's net income due to a 29% sales drop Condensed Consolidated Statements of Income (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Sales | $121,653 | $170,563 | | Gross Profit | $43,330 | $62,795 | | Operating Income (Loss) | $(747) | $28,917 | | Net Income (Loss) | $(3,057) | $20,584 | | Diluted EPS | $(0.14) | $0.92 | Condensed Consolidated Balance Sheets (As of March 31, 2025) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $516,726 | $546,136 | | Total Assets | $1,378,202 | $1,405,785 | | Total Current Liabilities | $182,342 | $92,450 | | Total Liabilities | $551,509 | $573,242 | | Total Equity | $826,693 | $832,543 | Condensed Consolidated Statements of Cash Flows (Q1 2025 vs Q1 2024) | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,684 | $24,623 | | Net cash used in investing activities | $(19,926) | $(27,266) | | Net cash provided by (used in) financing activities | $(30,213) | $3,767 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and financial activities, including significant sales declines, an increased contingent consideration liability, and a subsequent amendment to the credit facility - The company operates and reports across three segments: Branded Spirits, Distilling Solutions, and Ingredient Solutions[25](index=25&type=chunk) Sales by Segment (Q1 2025 vs Q1 2024) | Segment | Q1 2025 Sales (in thousands) | Q1 2024 Sales (in thousands) | | :--- | :--- | :--- | | Branded Spirits | $48,227 | $50,146 | | Distilling Solutions | $46,943 | $84,852 | | Ingredient Solutions | $26,483 | $35,565 | | **Total Sales** | **$121,653** | **$170,563** | - The fair value of the contingent consideration liability for the Penelope acquisition increased by **$14.7 million** during the quarter, reaching a total of **$100 million** as of March 31, 2025, with a potential payout ranging from zero to a maximum of **$110.8 million**[46](index=46&type=chunk) - Subsequent to the quarter end, on April 24, 2025, the company amended its credit agreement, increasing the revolving credit facility from **$400 million** to **$500 million** and extending the maturity to 2030[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 results, highlighting a 29% sales decrease, a shift to operating loss, and segment-specific declines, while affirming strong liquidity despite the downturn [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Consolidated sales for Q1 2025 decreased by 29% to $121.7 million, leading to a **$0.7 million** operating loss, primarily due to lower gross profit and increased contingent consideration charges Consolidated Results Summary (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Sales | $121,653 | $170,563 | (29)% | | Gross Profit | $43,330 | $62,795 | (31)% | | Operating Income (Loss) | $(747) | $28,917 | (103)% | | Net Income (Loss) | $(3,057) | $20,584 | (115)% | - The operating loss was primarily driven by a **$15.4 million** decrease in gross profit from the Distilling Solutions segment and a **$10.6 million** increase in the charge for the change in fair value of contingent consideration[94](index=94&type=chunk) [Segment Results](index=23&type=section&id=Segment%20Results) Q1 2025 segment performance varied, with Branded Spirits sales down 4%, Distilling Solutions plummeting 45% due to reduced brown goods demand, and Ingredient Solutions falling 26% from supply challenges - Branded Spirits sales decreased **4%** to **$48.2 million**, with premium plus category growth offset by declines in mid and value tiers[99](index=99&type=chunk)[101](index=101&type=chunk) - Distilling Solutions sales fell **45%** to **$46.9 million**, primarily due to a **49%** decrease in brown goods sales resulting from reduced customer demand and elevated industry-wide barrel inventory levels[104](index=104&type=chunk)[106](index=106&type=chunk) - Ingredient Solutions sales dropped **26%** to **$26.5 million**, driven by lower sales volume of specialty wheat starches and proteins, which were affected by supply challenges[109](index=109&type=chunk)[111](index=111&type=chunk) [Cash Flow, Financial Condition, and Liquidity](index=26&type=section&id=Cash%20Flow,%20Financial%20Condition,%20and%20Liquidity) Despite a **$5.2 million** cash decrease, net cash from operating activities increased to **$44.7 million** due to reduced receivables, with the company maintaining strong liquidity supported by available credit facilities Cash Flow Summary (Q1 2025 vs Q1 2024) | Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $44,684 | $24,623 | | Net cash used in investing activities | $(19,926) | $(27,266) | | Net cash provided by (used in) financing activities | $(30,213) | $3,767 | - Total debt was reduced to **$297.1 million** at March 31, 2025, from **$323.5 million** at December 31, 2024[127](index=127&type=chunk) - The company expects to incur approximately **$36,000** in capital expenditures in 2025[120](index=120&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company identifies commodity price volatility and interest rate changes as primary market risks, estimating an **$800,000** increase in annual interest expense for a 100 basis point rate hike - The company is exposed to market price risk for commodities used in production, including grain, wheat flour, and natural gas[132](index=132&type=chunk) - Based on outstanding variable-rate debt at March 31, 2025, a 100 basis point increase in interest rates would increase annual interest expense by approximately **$800,000**[134](index=134&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) The Interim CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Interim CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[135](index=135&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[136](index=136&type=chunk) [PART II. OTHER INFORMATION](index=29&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company faces consolidated securities class action and derivative lawsuits alleging securities fraud and breaches of fiduciary duty, which it intends to vigorously defend - The company is a defendant in a consolidated securities class action lawsuit alleging securities fraud under the Securities Exchange Act of 1934 for statements made between May 4, 2023, and October 30, 2024[72](index=72&type=chunk) - The company is also named as a nominal defendant in consolidated derivative lawsuits alleging breaches of fiduciary duties, waste of corporate assets, and other claims against certain officers and directors[73](index=73&type=chunk)[74](index=74&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the detailed discussion of risk factors in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - For a description of risk factors, the report refers to "Item 1A. Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2024[139](index=139&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company did not repurchase any equity securities, with approximately **$53.4 million** remaining available under its **$100 million** share repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid | Maximum Value Remaining for Purchase (in thousands) | | :--- | :--- | :--- | :--- | | Jan 1 - Jan 31, 2025 | — | $— | $53,412 | | Feb 1 - Feb 28, 2025 | — | $— | $53,412 | | Mar 1 - Mar 31, 2025 | — | $— | $53,412 | - The **$100 million** share repurchase program was approved on February 29, 2024, and has no expiration date[140](index=140&type=chunk) [Other Information Items (Items 3, 4, 5, 6)](index=29&type=section&id=Other%20Information%20Items%20(Items%203,%204,%205,%206)) The company reported no defaults on senior securities, no Rule 10b5-1 trading arrangement changes by directors or officers, and filed exhibits including an amended credit agreement - Item 3: No defaults upon senior securities were reported[141](index=141&type=chunk) - Item 5: No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in Q1 2025[143](index=143&type=chunk) - Item 6: Filed exhibits include an Amended and Restated Credit Agreement and a Sixth Amendment to the Note Purchase and Private Shelf Agreement, both dated April 24, 2025[144](index=144&type=chunk)

MGP INGREDIENTS REPORTS FIRST QUARTER 2025 RESULTS Encouraging first quarter results; Reaffirms full year 2025 financial outlook ATCHISON, Kan., May 1, 2025 - MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of branded and distilled spirits and food ingredient solutions, today reported results for the first quarter ended March 31, 2025. "We are pleased with first quarter results that keep us on track to meet our full-year guidance. While elevated industry-wide barrel whiskey inventories and a cautio ...

Wall Street expects a year-over-year decline in earnings on lower revenues when MGP (MGPI) reports results for the quarter ended March 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on May 1. On the other han ...

Core Insights - El Mayor Tequila is produced at Destiladora Gonzalez Lux in Arandas, Mexico, using 100% estate-grown Blue Weber Agave from Jalisco, Mexico [1][3] - The brand has adopted a consistent packaging design across its product line to enhance consumer recognition [1] - El Mayor Tequila has received multiple prestigious awards, including gold medals at the ASCOT and SIP Awards, and recognition as one of the top 10 tequilas in the world at the 2025 International Wines and Spirits Competition [1][3] Product Offerings - El Mayor Tequila Blanco is an unaged clear tequila with a light body and floral hints [5] - El Mayor Tequila Reposado is aged for a minimum of nine months, offering fruit flavors with vanilla and spice [5] - El Mayor Tequila Rosado Reposado is finished in Cabernet Sauvignon casks for nine months, providing a rich, smooth taste with spiced-berry notes [5] - El Mayor Tequila Añejo is aged for 18 to 36 months, delivering a sophisticated flavor profile with caramel and grilled fruits [5] - El Mayor Tequila Extra Añejo is aged for a minimum of three-and-a-half years, featuring complex flavors of wood, caramel, dark chocolate, and hazelnut [5] - El Mayor Tequila Cristalino is aged for at least 12 months and filtered for a bright, crisp profile while retaining Añejo complexity [5] Company Background - Luxco, founded in 1958, is a leading producer and supplier of beverage alcohol products, operating under MGP Ingredients Inc. since 2021 [4] - The company has a diverse portfolio that includes brands from multiple distilleries, including the production of El Mayor Tequila at Destiladora Gonzalez Lux [4]

With fourth-generation Master Distiller Graciela Gonzalez at the helm, EscasaTM Tequila premieres with Blanco, Reposado to followST. LOUIS, April 16, 2025 /PRNewswire/ -- Today, Luxco, Inc. announces the launch of EscasaTM – a new ultra-premium sipping Tequila, now available nationwide. With the portfolio offering both Blanco and Reposado, the latter releasing in summer 2025, Escasa Tequila showcases the beauty of Tequila when crafted with care, highlighting – not masking – the flavors intrinsic to the soil ...