MGP Ingredients(MGPI) - 2025 Q4 - Annual Results

Financial Performance - Consolidated sales for Q4 2025 decreased 23% to $138.3 million compared to Q4 2024[3] - Full-year consolidated sales declined 24% to $536.4 million, primarily due to a decrease in Distilling Solutions segment sales[9] - Q4 consolidated gross profit decreased 35% to $48.3 million, with a gross profit margin decline of 630 basis points to 34.9%[3] - Full-year gross profit declined 30% to $199.4 million, with a gross margin decrease of 350 basis points to 37.2%[9] - Net income for Q4 2025 was a loss of $134.6 million, primarily due to a non-cash adjustment of $152.6 million[6] - Adjusted EBITDA for Q4 2025 decreased 51% to $26.1 million[5] - Full-year adjusted EBITDA decreased 41% to $116.0 million[9] - The company reported a net loss of $107.832 million for the year ended December 31, 2025, compared to a net income of $34.465 million in 2024[28] - For the quarter ended December 31, 2025, MGP Ingredients reported a net loss of $134.6 million, compared to a net loss of $42.0 million for the same quarter in 2024[29] - Adjusted EBITDA for the quarter ended December 31, 2025, was $26.1 million, down from $53.1 million in the same quarter of 2024[31] - The adjusted non-GAAP net income for the quarter ended December 31, 2025, was $13.7 million, compared to $34.4 million in the same quarter of 2024[29] - MGP Ingredients' diluted EPS for the quarter ended December 31, 2025, was $(6.22), compared to $(1.91) for the same quarter in 2024[29] Capital Expenditures and Assets - Capital expenditures for 2025 were $31.9 million, a decline of 56% from the previous year[9] - Total assets decreased to $1.236 billion as of December 31, 2025, from $1.406 billion in 2024, reflecting a decline of 12.1%[27] - Cash and cash equivalents at the end of the period were $18.460 million, down from $25.273 million in 2024, a decrease of 27.1%[28] - MGP Ingredients' cash and cash equivalents as of December 31, 2025, were $18.5 million, down from $25.3 million in 2024[31] Liabilities and Debt - Current liabilities increased significantly to $200.051 million in 2025, compared to $92.450 million in 2024, marking a 116.6% increase[27] - MGP Ingredients' total debt as of December 31, 2025, was $252.3 million, with a net debt leverage ratio of 2.0[31] Goodwill and Impairments - The company incurred $152.622 million in goodwill impairment for the year ended December 31, 2025, compared to $73.755 million in 2024[26] - The company recorded a goodwill impairment of $152.6 million for the year ended December 31, 2025, which is nondeductible for income tax purposes[30] Segment Performance - Total Branded Spirits Sales decreased by 1% to $63,446,000 in Q4 2025 from $64,005,000 in Q4 2024[33] - Operating loss for Branded Spirits increased by 123% to $(142,022,000) in Q4 2025 compared to $(63,814,000) in Q4 2024[33] - Total Distilling Solutions Sales fell by 47% to $43,576,000 in Q4 2025 from $82,045,000 in Q4 2024[33] - Gross profit for Distilling Solutions decreased by 54% to $16,910,000 in Q4 2025 from $36,727,000 in Q4 2024[33] - Total Ingredient Solutions Sales declined by 10% to $31,294,000 in Q4 2025 from $34,746,000 in Q4 2024[33] - Operating income for Ingredient Solutions dropped by 79% to $1,407,000 in Q4 2025 compared to $6,751,000 in Q4 2024[33] - Total Branded Spirits Sales for the year ended December 31, 2025 decreased by 3% to $232,941,000 from $240,816,000 in 2024[34] - Operating loss for Branded Spirits for the year increased by 164% to $(127,680,000) in 2025 from $(48,279,000) in 2024[34] - Total Ingredient Solutions Sales for the year ended December 31, 2025 decreased by 7% to $122,034,000 from $130,605,000 in 2024[34] - Gross margin for Ingredient Solutions fell to 12.7% in 2025 from 20.1% in 2024[34] Future Projections - The company projects 2026 consolidated sales in the range of $480 million to $500 million[22] - Adjusted basic EPS for 2026 is expected to be in the range of $1.50 to $1.80[22] - Adjusted EBITDA guidance for full year 2026 is provided on a non-GAAP basis, with no reconciliation to GAAP measures due to uncertainty in predicting certain items[24] Other Costs - The company incurred executive transition costs of $953,000 in the quarter ended December 31, 2025, compared to $2.9 million in the same quarter of 2024[31] - The company reported restructuring and other costs of $190,000 for the quarter ended December 31, 2025[31] Tax Information - The effective tax rate for the quarter ended December 31, 2025, was 21.7%, while for the year it was 24.8%[30] Operating Income - Operating income for the year ended December 31, 2025, was a loss of $94.615 million, compared to an operating income of $74.426 million in 2024[26] - Operating loss for Branded Spirits increased by 123% to $(142,022,000) in Q4 2025 compared to $(63,814,000) in Q4 2024[33]