MGP Ingredients(US:MGPI)2025-10-29 11:34Financial Performance - Sales for the quarter ended September 30, 2025, were $130,912, a decrease of 19% compared to $161,461 in the same quarter of 2024[96] - Gross profit for the quarter ended September 30, 2025, was $49,433, a decrease of 25% from $65,815 in the prior year[96] - Operating income for the quarter ended September 30, 2025, decreased to $21,016, down 35% from $32,564 in the same quarter of 2024[96] - Net income for the quarter ended September 30, 2025, was $15,429, a decrease of 35% compared to $23,862 in the prior year[96] - Year-to-date sales for the period ended September 30, 2025, were $398,059, a decrease of 24% from $522,829 in the same period of 2024[107] - Year-to-date gross profit for the period ended September 30, 2025, was $151,150, a decrease of 29% compared to $211,842 in the prior year[107] - Year-to-date operating income for the period ended September 30, 2025, decreased to $40,587, down 61% from $104,868 in the same period of 2024[107] - Basic and diluted EPS decreased to $1.24 for the year to date ended September 30, 2025, down 64% from $3.43 in 2024, primarily due to a decrease in operating income[115][116] Segment Performance - Total sales of the Branded Spirits segment for the quarter ended September 30, 2025 decreased by $1,876, or 3%, primarily due to a decrease in net price/mix[120] - Gross profit for the Branded Spirits segment slightly decreased by $226, or 1%, with a gross margin increase to 53.0% from 51.8% year over year[121] - Total sales of the Distilling Solutions segment for the quarter ended September 30, 2025 decreased by $31,038, or 43%, primarily driven by lower brown goods sales[133] - Gross profit for the Distilling Solutions segment decreased by $14,444, or 50%, with a gross margin decrease to 34.7% from 39.8% year over year[134] - Total sales of Branded Spirits for the year to date ended September 30, 2025 decreased by $7,316, or 4%, due to lower sales volume and net price/mix within the value and mid price tiers[128] - Gross profit for the year to date ended September 30, 2025 decreased by $2,209, or 2%, with a gross margin increase to 51.0% from 50.1% year over year[129] - Total sales of Distilling Solutions for the year to date ended September 30, 2025 decreased by $112,335, or 45%, primarily due to lower brown goods sales[137] - Gross profit for the year to date ended September 30, 2025 decreased by $53,508, or 51%, with a gross margin decrease to 37.5% from 42.1% year over year[138] - Total sales of the Ingredient Solutions segment for the quarter increased by $2,365, or 9 percent, driven by increased sales volume of specialty wheat proteins[144] - Gross profit for the quarter decreased by $1,712, or 36 percent, with gross margin dropping to 10.3 percent from 17.6 percent[145] - Total sales of the Ingredient Solutions segment for the year to date decreased by $5,119, or 5 percent, primarily due to decreased sales volume of specialty wheat starches[149] - Gross profit for the year to date decreased by $4,975, or 28 percent, with gross margin decreasing to 14.4 percent from 18.8 percent[150] Cash Flow and Capital Expenditures - Cash provided by operating activities for the year to date was $92,449, an increase of $18,937 compared to the prior year[153] - Cash used in investing activities for the year to date was $40,688, primarily for additions to property, plant, and equipment[156] - Cash used in financing activities for the year to date was $64,286, due to net payments on debt of $52,800[158] - The company expects to incur approximately $32,500 in capital expenditures in 2025 for facility improvements and expansions[157] - The company announced a $100,000 share repurchase program approved by the Board of Directors, with approximately $53,412 remaining under the program as of September 30, 2025[162] - The company repurchased approximately 128,360 shares for approximately $10,000 during the year to date ended September 30, 2024[162] Debt and Liabilities - Total debt was $268,723 as of September 30, 2025, down from $323,541 at December 31, 2024[166] - The company had net borrowings of $52,800 for the year to date ended September 30, 2025, compared to net proceeds of $2,200 for the same period in 2024[166] - Current assets exceeded current liabilities by $326,843 as of September 30, 2025, largely due to inventories valued at $384,523[169] - The company incurred $2,712 of loan fees associated with amending and restating its credit agreement during the year to date ended September 30, 2025[166] Tax and Interest Rates - Effective tax rate for the quarter ended September 30, 2025, was 21.7%, down from 24.0% in the same quarter of 2024[103] - Income tax expense for the year to date ended September 30, 2025 was $9,255, with an effective tax rate of 25.7%, compared to $23,924 and 23.8% for the same period in 2024[114] - A 100 basis point increase in market interest rates would increase annual interest expense on variable-rate debt by $570[173] Risk Management - The company monitors commodity price and interest rate market risks as part of its overall risk management program[170]