MGP Ingredients(MGPI) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter 2025 consolidated sales decreased by 19% to $130.9 million compared to the prior-year period, primarily due to declines in brown goods sales[4] - Consolidated gross profit decreased by 25% to $49.4 million, with gross margin declining by 300 basis points to 37.8%[5] - Adjusted EBITDA decreased by 29% to $32.3 million for the third quarter[5] - Net income decreased by 35% to $15.4 million, with adjusted net income down 36% to $18.5 million[5] - The company reported an adjusted non-GAAP net income of $18,516 thousand for the quarter ended September 30, 2025, compared to $23,862 thousand for the same quarter in 2024, a decrease of 22.5%[23] - For the quarter ended September 30, 2025, MGP Ingredients reported a net income of $15,429,000, compared to $23,862,000 in the same quarter of 2024, reflecting a decrease of 35%[25] - Adjusted EBITDA for the quarter was $32,255,000, down from $45,654,000 in the prior year, representing a decline of 29%[25] Segment Performance - Ingredient Solutions segment sales increased by 9% to $29.3 million, driven by higher sales of specialty and commodity wheat proteins[10] - Branded Spirits segment sales decreased by 3% to $60.7 million, while premium plus sales increased by 3%[7] - Distilling Solutions segment sales decreased by 43% to $40.9 million, with gross profit down 50% to $14.2 million[8] - Total branded spirits sales decreased by 3% to $60,748,000 in Q3 2025 from $62,624,000 in Q3 2024, with a gross margin improvement to 53.0% from 51.8%[31] - Distilling solutions sales saw a significant decline of 43%, falling to $40,881,000 from $71,919,000 year-over-year, with gross profit dropping by 50%[31] - Ingredient solutions sales increased by 9% to $29,283,000, with specialty wheat proteins growing by 15% to $8,905,000[31] - Year-to-date branded spirits sales decreased by 4% to $169,495,000 compared to $176,811,000 in the previous year[32] - Operating income for the branded spirits segment increased by 100% to $14,751,000 in Q3 2025, up from $7,391,000 in Q3 2024[31] Cash Flow and Capital Expenditures - Year-to-date operating cash flows increased by 26% to $92.5 million, reflecting strong cash generation efforts[5] - Year-to-date capital expenditures declined by 42% to $25.4 million compared to the prior-year period[5] - Net cash provided by operating activities increased to $92,449 thousand for the year to date ended September 30, 2025, compared to $73,512 thousand for the same period in 2024, reflecting a growth of 25.7%[22] - The company incurred $40,674 thousand in additions to property, plant, and equipment for the year to date ended September 30, 2025, down from $52,850 thousand in 2024, a decrease of 23.0%[22] Balance Sheet and Equity - Total assets decreased to $1,377,033 thousand as of September 30, 2025, down from $1,405,785 thousand at December 31, 2024, representing a decline of approximately 2.0%[21] - Total current liabilities rose significantly to $183,931 thousand as of September 30, 2025, compared to $92,450 thousand at December 31, 2024, marking an increase of 99.0%[21] - Net income for the year to date ended September 30, 2025, was $26,799 thousand, a decrease of 64.9% compared to $76,463 thousand for the same period in 2024[22] - Total equity increased to $853,539 thousand as of September 30, 2025, compared to $832,543 thousand at December 31, 2024, an increase of 2.5%[21] Debt and Financing - MGP Ingredients' total debt stood at $268,723,000, with cash and cash equivalents of $13,447,000 as of September 30, 2025[29] - The principal amount of the bonds outstanding is $201,250,000 for both 2025 and 2024[33] - The conversion price for the bonds is set at $96.23620 per share[33] - The number of bonds outstanding is 201,250, calculated by dividing the principal amount by the par value of $1,000[33] - The impact of conversion is zero as the average share price is below the conversion price[35] - The average share price for the quarter ended September 30, 2025, is $28.99063, while for 2024 it was $82.66859[33] - The average share price for the year to date ended September 30, 2025, is $30.67755 compared to $82.41075 for 2024[33] - The Convertible Senior Notes would only have a dilutive impact if the average market price per share exceeds the conversion price[35] - The conversion premium in shares is zero since the average share price is less than the conversion price[35] Guidance - The company updated its full-year adjusted EBITDA guidance to a range of $110 million to $115 million and adjusted EPS to $2.60 to $2.75[2]