MGP Ingredients(US:MGPI)2025-07-31 11:32Financial Performance - Sales for the quarter ended June 30, 2025 were $145,494, a decrease of 24% compared to $190,805 in the same quarter of 2024, primarily due to decreased sales in the Distilling Solutions and Branded Spirits segments [97]. - Gross profit for the quarter ended June 30, 2025 was $58,387, a decrease of 30% from $83,232 in the prior year, driven by declines in the Distilling Solutions and Branded Spirits segments [99]. - Operating income for the quarter ended June 30, 2025 decreased to $20,318, down 53% from $43,387 in the same quarter of 2024, primarily due to reduced gross profit in key segments [102]. - Net income for the quarter ended June 30, 2025 was $14,427, a decline of 55% compared to $32,017 in the prior year, reflecting lower operating income [97]. - Year-to-date sales for the period ended June 30, 2025 were $267,147, a decrease of 26% from $361,368 in the same period of 2024, with declines across all segments [108]. - Year-to-date gross profit for the period ended June 30, 2025 was $101,717, down 30% from $146,027 in the prior year, with significant decreases in the Distilling Solutions segment [110]. - Operating income for the year to date ended June 30, 2025, was $19,571, a decrease of 73% compared to $72,304 for the same period in 2024 [114]. - Gross profit for the year to date ended June 30, 2025 decreased by $39,064, or 51%, with a gross margin decline to 38.7% from 43.0% in the prior year [141]. Earnings Per Share - Basic and diluted EPS for the quarter ended June 30, 2025 was $0.67, a decrease of 53% from $1.43 in the same quarter of 2024, reflecting the decline in operating income [105]. - Basic and diluted EPS for the year to date ended June 30, 2025, was $0.53, down 78% from $2.36 for the year to date ended June 30, 2024 [116]. Segment Performance - Total sales of the Branded Spirits segment for the quarter ended June 30, 2025, decreased by $3,521, or 5%, compared to the prior year quarter [121]. - Gross profit for the Branded Spirits segment for the year to date ended June 30, 2025, decreased by $1,983, or 4%, compared to the year to date ended June 30, 2024 [129]. - Total sales of the Distilling Solutions segment for the quarter ended June 30, 2025, decreased by $43,388, or 46%, compared to the prior year quarter [134]. - Gross profit for the Distilling Solutions segment for the quarter ended June 30, 2025, decreased by $23,661, or 56%, compared to the prior year quarter [135]. - Total sales of the Ingredient Solutions segment increased by $1,598, or 5%, for the quarter ended June 30, 2025, driven by increased sales volume of specialty wheat proteins [146]. - Total sales of the Ingredient Solutions segment decreased by $7,484, or 11%, for the year to date ended June 30, 2025, primarily due to decreased sales volume of specialty wheat starches [153]. Expenses - Advertising and promotion expenses for the quarter ended June 30, 2025 were $6,913, a decrease of 41% compared to $11,665 in the same quarter of 2024, due to realignment of spending [100]. - SG&A expenses for the quarter ended June 30, 2025 were $23,156, a slight increase of 2% from $22,759 in the prior year, driven by increased incentive compensation [101]. Tax and Interest Rates - Effective tax rate for the quarter ended June 30, 2025 was 23.0%, down from 24.0% in the same quarter of 2024, primarily due to lower income before taxes [104]. - The effective tax rate for the year to date ended June 30, 2025, was 30.5%, up from 23.7% for the year to date ended June 30, 2024 [115]. - A 100 basis point increase in market interest rates would increase annual interest expense on variable-rate debt by $840 [178]. Cash Flow and Debt - Cash provided by operating activities for the year to date ended June 30, 2025 was $56,357, an increase of $26,775 compared to the prior year [158]. - Cash used in investing activities for the year to date ended June 30, 2025 was $32,167, primarily for additions to property, plant, and equipment [161]. - Cash used in financing activities for the year to date ended June 30, 2025 was $33,103, primarily due to net payments on debt of $24,200 and dividend payments of $5,156 [163]. - Total debt was $297,086 at June 30, 2025, down from $323,541 at December 31, 2024, with net borrowings on debt of $24,200 for the year to date ended June 30, 2025 [171]. - The company has $416,000 available under its credit agreement for additional borrowings as of June 30, 2025 [174]. Shareholder Activities - The company repurchased approximately 92,447 shares of Common Stock for approximately $7,500 during the year to date ended June 30, 2024, with $53,412 remaining under the share repurchase program as of June 30, 2025 [167]. - The company declared a dividend of $0.12 per share on February 26, 2025, and May 1, 2025, totaling $5,156 in dividend payments for the year to date ended June 30, 2025 [168]. Risk Management - The company monitors commodity price and interest rate market risks as part of its overall risk management program [175].