MGP Ingredients(US:MGPI)2021-08-04 11:35Financial Performance - Sales for the quarter ended June 30, 2021, were $174,939, an increase of 89.0% compared to the same quarter in 2020, driven by growth in the Branded Spirits, Distillery Products, and Ingredient Solutions segments[111]. - Gross profit for the quarter ended June 30, 2021, was $56,827, reflecting a 174.5% increase year-over-year, with significant contributions from all segments[113]. - Operating income for the quarter ended June 30, 2021, increased to $27,663, up 144.0% from $11,338 in the same quarter of 2020[116]. - Net income for the quarter ended June 30, 2021, was $20,059, representing a 136.3% increase compared to $8,490 in the prior year[111]. - Year-to-date sales ended June 30, 2021, were $283,262, an increase of 47.8% compared to the same period in 2020, driven by strong performance across all segments[121]. - Year-to-date gross profit for the period ended June 30, 2021, was $89,126, a 103.0% increase year-over-year, with notable growth in the Distillery Products segment[123]. - Operating income for the year-to-date period ended June 30, 2021, was $48,163, a 92.3% increase from $25,046 in the same period of 2020[125]. Segment Performance - Total sales of Distillery Products for the quarter ended June 30, 2021, increased by $15,543, or 20.8%, compared to the prior year quarter[135]. - Gross profit for the Distillery Products segment increased by $16,131, or 101.7%, with gross margin rising to 35.4% from 21.2% year over year[136]. - Total sales of Branded Spirits for the quarter ended June 30, 2021, increased by $60,042, or 15,635.9%, compared to the prior year quarter[144]. - Gross profit for Branded Spirits increased by $18,286, or 12,355.4%, although gross margin decreased to 30.5% from 38.5% due to purchase accounting adjustments related to the Merger[145]. - Year-to-date sales of Distillery Products increased by $24,653, or 16.0%, compared to the year-ago period[140]. - Year-to-date gross profit for Distillery Products increased by $26,317, or 77.6%, with gross margin improving to 33.7% from 22.0%[141]. - Total branded spirits sales for the year to date ended June 30, 2021, increased by $60,124, or 6,895% compared to the prior year[149]. - Gross profit for the year to date ended June 30, 2021, increased by $18,182, or 5,379%, while gross margin decreased to 30.4% from 38.8%[150]. - Ingredient Solutions sales for the quarter ended June 30, 2021, increased by $6,794, or 39.1%, driven by higher sales of specialty wheat starches and proteins[154]. - Total Ingredient Solutions sales for the year to date ended June 30, 2021, increased by $6,843, or 18.8%, compared to the prior year[158]. - Gross profit for Ingredient Solutions increased by $1,708, or 36.3%, for the quarter ended June 30, 2021[155]. - The increase in gross profit was primarily driven by higher sales volumes of specialty wheat starches and proteins, partially offset by higher input costs[159]. Expenses and Taxation - SG&A expenses for the quarter ended June 30, 2021, were $29,164, an increase of 211.4% compared to the prior year, primarily due to the acquisition of Luxco's expenses[114]. - The effective tax rate for the quarter ended June 30, 2021, was 24.2%, compared to 23.1% in the same quarter of 2020[111]. - Income tax expense for the year to date ended June 30, 2021, was $11,027, with an effective tax rate of 23.7%, compared to $5,774 and 24.0% for the same period in 2020[128]. - Earnings per share (EPS) increased to $1.81 for the year to date ended June 30, 2021, a 69.1% increase from $1.07 in the prior year[129][130]. Cash Flow and Capital Expenditures - Cash provided by operating activities for the year to date ended June 30, 2021, was $47,454, an increase of $41,468 compared to the prior year[163]. - Cash used in investing activities for the year to date ended June 30, 2021, was $170,235, primarily due to the Merger of Luxco[166]. - Capital expenditures for the year to date ended June 30, 2021, were $18,336, with expectations of approximately $51,500 in capital expenditures for 2021[168]. - Cash provided by financing activities for the year to date ended June 30, 2021, was $138,359, primarily due to net proceeds from debt[169]. - Cash provided from financing activities for the year to date ended June 30, 2020, was $14,857, primarily due to net proceeds from debt of $24,501[170]. Debt and Shareholder Returns - Total debt was $270,391 at June 30, 2021, compared to $39,871 at December 31, 2020[177]. - The Company repurchased approximately 159,104 shares of common stock for $4,053 during the year to date ended June 30, 2020[173]. - The Board of Directors declared a quarterly dividend of $0.12 per share, payable on September 3, 2021, totaling $2,052[176]. - The Company completed a merger with Luxco on April 1, 2021, with an aggregate consideration of $237,500 in cash and 5,007,833 shares of common stock[181]. - The Company has $20,947 remaining under the share repurchase plan as of June 30, 2021[172]. Liquidity and Market Conditions - At June 30, 2021, current assets exceeded current liabilities by $270,203, largely due to inventories of $232,292[180]. - A 100 basis point increase in market interest rates would increase annual interest expense by $2,401 based on variable-rate borrowings[185]. - The cash balance at June 30, 2021, was $37,243, with $168,000 remaining for additional borrowings under the Credit Agreement[180]. - The Company anticipates sufficient cash flows to support short-term liquidity and operating needs following the merger[181].