Core Insights - The Mairs & Power Small Cap Fund reported a return of 2.06% in the first nine months of 2025, underperforming against benchmarks such as the Russell 2000 Total Returns Index, which increased by 10.39% [1] - The market remains concentrated in 2025, with a few dominant mega-cap stocks related to artificial intelligence driving most favorable outcomes [1] Fund Performance - The fund's performance lagged behind the S&P Small Cap 600 TR, which rose by 4.24%, and the Morningstar U.S. Fund Small Blend, which returned 6.15% [1] Company Focus: MGP Ingredients, Inc. - MGP Ingredients, Inc. (NASDAQ:MGPI) experienced a one-month return of 1.93% but saw a significant decline of 43.49% over the last 52 weeks, closing at $26.35 per share with a market capitalization of $561.105 million on December 10, 2025 [2] - The company faced challenges due to excess inventory, particularly in bourbon, and shifts in consumer consumption levels across the alcohol industry [3] Hedge Fund Interest - MGP Ingredients, Inc. was held by 18 hedge fund portfolios at the end of the third quarter, down from 26 in the previous quarter, indicating reduced interest among hedge funds [4] - While MGP Ingredients is acknowledged for its potential, certain AI stocks are viewed as offering greater upside potential with less downside risk [4]

Financial Performance - Consolidated sales decreased by 19% to $130.9 million[6] - Branded Spirits sales declined by 3%[6] - Distilling Solutions sales decreased significantly by 43%[6] - Ingredient Solutions sales increased by 9%[6] - Adjusted EBITDA decreased by 29% to $32.3 million[6] - Adjusted EPS decreased by 34% to $0.85[6] - Year-to-date operating cash flows increased 26% to $92.5 million[6, 27] Segment Analysis - Branded Spirits premium plus sales increased 3% to $32.1 million, while value sales decreased 19% to $8.2 million[11] - Distilling Solutions sales decreased 50% to $28.5 million for brown goods[22] - Ingredient Solutions saw a sales increase of 5% to $17.0 million in specialty wheat starches and 15% to $8.9 million in specialty wheat proteins[23] Financial Guidance - The company raised full year adjusted EBITDA guidance to $110 million to $115 million[24] - The company raised full year adjusted basic EPS guidance to $2.60 to $2.75[24]

Industry Trend - Brandy has a long history predating the US, but isn't typically associated with the US [1] - A distillery in New York's Hudson Valley aims to change the perception of brandy in the US [1]

Core Viewpoint - Stock Spirits Group has appointed Steven Libermann as the new CEO, succeeding Jean-Christophe Coutures, who is stepping down for family reasons [1][4]. Group 1: Leadership Transition - Steven Libermann will take over as CEO in December, bringing experience from his previous roles at Nomad Foods, where he held senior positions since 2015 [1][2]. - Libermann is expected to enhance the company's transformation strategy, focusing on empowerment, execution, and sustainable growth [3]. Group 2: Company Developments - Under Coutures' leadership, Stock Spirits expanded its portfolio by acquiring several businesses, including Clan Campbell and Germany's Borco-Marken-Import Matthiesen [3][5]. - The company has also entered the non-alcoholic spirits market with a 0% ABV gin-style product [3]. - Recently, Stock Spirits announced the closure of its production facility in Hamburg, expected to shut down in early 2027 [5]. Group 3: Financial and Market Position - Libermann emphasized the company's strong financial platform and its potential for growth in European markets [4]. - Stock Spirits is transitioning from a central European operator to a leading pan-European player, indicating a strategic shift in its market positioning [5].

Core Insights - Sazerac has acquired Western Son Vodka and Distillery, a craft distiller based in Texas, for an undisclosed amount, marking Sazerac's third acquisition in 18 months [1][4] - The acquisition includes all of Western Son's assets, production capabilities, and employees, although the exact number of staff joining Sazerac has not been confirmed [1][2] - Western Son was previously set to be acquired by Splash Beverage, but that deal was never finalized [3][4] Company Strategy - Sazerac's CEO, Jake Wenz, expressed excitement about the acquisition, highlighting Western Son's strong brand and the opportunity to enhance Sazerac's portfolio and production capabilities [2] - The acquisition aligns with Sazerac's strategy to expand its vodka offerings, which already include brands like Svedka and Wheatley Vodka [5] Market Context - The acquisition follows Sazerac's recent purchases, including Svedka vodka from Constellation Brands and Buzzball, a ready-to-drink cocktails producer [4] - Additionally, Sazerac has taken over the manufacturing and distribution of Coca-Cola's alcoholic ready-to-drink products, further expanding its market presence [5]

Group 1 - Lark Distilling has appointed Stuart Gregor as the new CEO, succeeding Satya Sharma who will step down on December 31 [1] - Gregor has been a director at Lark since last year and is recognized for his deep understanding of the business [1][2] - The chairman of Lark Distilling, Domenic Panaccio, highlighted Gregor's entrepreneurial credentials and passion for Australian spirits, indicating that his leadership will enhance Lark's ambition in the whisky market [2] Group 2 - Under Sharma's leadership, Lark Distilling achieved consistent results, expanded into international markets, and strengthened its portfolio [3] - For the financial year ending June 2025, Lark reported a 12% increase in net sales revenue to A$15.6 million (approximately $10.3 million) [3][4] - The growth was primarily driven by direct-to-consumer sales, travel retail, and exports, although the transition to a distributor-led model led to a decrease in gross profit percentage to 64%, down by about 3.5 percentage points [4] Group 3 - Lark Distilling reported a gross profit of A$10 million, an increase of A$0.6 million, but faced a statutory EBITDA loss of A$5.9 million and a net loss of A$11.3 million, up from A$4.6 million the previous year [4] - Gregor expressed excitement about leading Lark, viewing it as a unique opportunity in the Australian distilling landscape [5]

Many hope that the spirit will, in time, become a national treasure akin to Mexican tequila. As a result, Indian distillers are targeting curious drinkers farther afield https://t.co/iyRIKoU4Ae ...

New Product Launch - Bowmore 威士忌酒厂推出首个代币化威士忌瓶系列 [1] - 这些限量版瓶子将在 Avalanche c-chain 上铸造 [1] - 该系列除了优质烈酒外，还将包含其他内容 (具体内容报告中未提及) [1] Industry Trend - 威士忌行业正在探索将区块链技术应用于产品销售和营销 [1] - 代币化威士忌瓶可能代表了一种新的收藏品和投资形式 [1]

Financial Data and Key Metrics Changes - Consolidated sales decreased by 24% to $145.5 million compared to the prior year period [26] - Adjusted EBITDA decreased by 38% to $35.9 million, primarily due to lower gross profits [30] - Basic earnings per common share decreased to $0.67, while adjusted basic EPS decreased 43% to $0.97 [30] - Year-to-date operating cash flows increased to $56.4 million from $29.6 million in the same period last year [10] Business Line Data and Key Metrics Changes - Branded Spirits segment sales decreased by 5%, with a 1% increase in Premium Plus sales [26][10] - Distilling Solutions segment sales declined by 46%, primarily driven by a 54% decline in brown goods sales [26] - Ingredient Solutions sales increased by 5%, driven by a strong rebound in specialty wheat protein sales [26] Market Data and Key Metrics Changes - Overall economic uncertainty, persistent inflation, and higher interest rates continue to weigh on consumer sentiment, which fell to a multi-year low during the quarter [11] - Consumer confidence improved slightly last month, but discretionary spending remains cautious [11] Company Strategy and Development Direction - The company aims to become a premier branded spirits company, focusing on fewer but more attractive growth opportunities [5][12] - Key brands such as Penelope, El Mejor, and Rebel 100 are prioritized for investment [12] - The company is partnering with Breakthrough Beverage Group for distribution in California to drive growth [15] Management's Comments on Operating Environment and Future Outlook - The external environment remains challenging, but the company continues to execute with discipline and make progress on key initiatives [11] - Management expects the Distilling Solutions segment to see stronger sales and profits in the first half of the year compared to the second half [18] - The company remains confident in its ability to build on progress and achieve full-year guidance [32] Other Important Information - The company reaffirmed its 2025 guidance, expecting net sales in the range of $520 million to $540 million and adjusted EBITDA between $105 million and $115 million [23] - The balance sheet remains strong, with net debt leverage under two times and over $600 million in availability under debt facilities [22] Q&A Session Summary Question: Update on new distillate contracts and revenue visibility - Management confirmed that no contracts have been canceled, and most have been confirmed or amended, providing good visibility for the remainder of 2025 [38][40] - The back half of the year is expected to be lighter due to contract resets, but this was anticipated in guidance [40] Question: Insights on branded margins and advertising spending - Branded Spirits margins are strong, primarily due to the Premium Plus portfolio, but may be lighter in the back half of the year [55] - Advertising and promotion expenses were down significantly, with a focus on high-margin brands [56] Question: Inventory rationalization and competitive environment - The company is seeing positive signs in inventory dynamics, but acknowledges that it will take time to fully rationalize [66] - Management believes that partnerships and long-term relationships with customers are crucial in the current environment [68] Question: Clarification on paused purchases versus canceled contracts - Management views paused purchases as temporary, with confidence that they will resume, albeit potentially at lower volumes [76] Question: Update on SG&A expenses and incentive compensation - SG&A expenses are expected to remain elevated due to reinstated incentive compensation, but adjusted SG&A showed an 8% decline [78] Question: Participation in ready-to-drink segment growth - The company is participating in the ready-to-drink segment growth through various offerings, including American whiskey [95] Question: Performance of other brands in the Premium Plus segment - Penelope continues to show strong momentum, while some larger volume American whiskey brands are experiencing declines [98]

Group 1 - MGP reported revenue of $145.49 million for the quarter ended June 2025, a decrease of 23.8% year-over-year, with EPS at $0.97 compared to $1.71 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $137.79 million by 5.59%, while the EPS surprised by 51.56% against the consensus estimate of $0.64 [1] - MGP's stock has returned -10.7% over the past month, contrasting with the Zacks S&P 500 composite's increase of 2.7%, and currently holds a Zacks Rank 3 (Hold) [3] Group 2 - Sales in Branded Spirits were reported at $60.52 million, below the estimated $63.57 million, reflecting a year-over-year decline of 5.5% [4] - Ingredient Solutions sales reached $34.97 million, surpassing the average estimate of $33.56 million, marking a year-over-year increase of 4.8% [4] - Sales in Distilling Solutions were $50 million, significantly higher than the estimated $40.68 million, but this represents a substantial decline of 46.5% compared to the previous year [4]