Core Insights - The company has made significant progress in 2025, finishing the year above expectations despite a challenging operating environment in the spirits industry [4][5][37] - The strategic roadmap focuses on disciplined execution, organizational changes, and leveraging financial strength for long-term growth [2][3][39] Financial Performance - For Q4 2025, consolidated sales decreased by 23% year-over-year, with adjusted EBITDA at $26 million and adjusted basic EPS at $0.63 [5][28] - Full-year 2025 results included consolidated sales of $536 million, adjusted EBITDA of $116 million, and adjusted basic EPS of $2.85, with operating cash flows increasing by 19% to $122 million [5][29] - The company expects 2026 net sales in the range of $480 million to $500 million, with adjusted EBITDA between $90 million and $98 million [30] Industry Outlook - The spirits industry is anticipated to face continued challenges in 2026, with expectations of another down year for both the industry and the company [4][6][31] - Consumer sentiment and spending are under pressure, influenced by competition from online gambling, gaming, and health-focused trends [6][7] Strategic Initiatives - The Branded Spirits segment is viewed as the primary growth engine, with a focus on the Premium Plus category, particularly Penelope Bourbon, which saw an 80% increase in sales [8][10][12] - The company plans to rationalize 20% of its tail brands to streamline operations and focus on higher-velocity SKUs [11][75] - Investment in digital marketing and analytics is prioritized to enhance brand awareness and connect with consumers [13][68] Distilling Solutions Segment - The Distilling Solutions segment experienced a significant decline in sales, down 47% in 2025, with expectations of a further 35% decline in 2026 [25][31] - The company is focused on creating a differentiated value proposition and expanding its premium white goods offerings to complement its brown goods portfolio [15][16] Ingredient Solutions Segment - The Ingredient Solutions business is expected to benefit from strong consumer demand for high-protein and high-fiber products, with anticipated double-digit sales growth in 2026 [19][20] - Operational improvements and increased capital investment are being implemented to return to historical levels of operational excellence [21][79]

Financial Data and Key Metrics Changes - For Q4 2025, consolidated sales decreased by 23% year-over-year to $138 million, with adjusted EBITDA declining by 51% to $26 million and adjusted basic EPS decreasing by 60% to $0.63 [23][24][26] - For the full year 2025, consolidated sales were $536 million, adjusted EBITDA was $116 million, and adjusted basic EPS was $2.85, while operating cash flows increased by 19% to $122 million [8][26][27] - Net income for Q4 2025 was a loss of $135 million, primarily due to a non-cash adjustment of $153 million related to goodwill [26] Business Line Data and Key Metrics Changes - Branded Spirits segment sales declined by 1% in Q4 and 3% for the full year, with premium plus sales growing by 10% in Q4, driven by Penelope Bourbon [23][30] - Distilling Solutions segment sales fell by 47% in Q4 and 45% for the full year, with gross profit declining by 52% [23][24] - Ingredient Solutions sales decreased by 10% in Q4 and 7% for the full year, impacted by equipment outages and higher waste disposal costs [24][30] Market Data and Key Metrics Changes - The spirits industry is expected to face continued pressure, with consumer sentiment and spending under strain due to competition from online gambling and health trends [9][10] - Domestic whiskey production has sharply declined, with reports indicating a 26% drop over the trailing 12 months [15] Company Strategy and Development Direction - The company is focusing on strategic clarity and prioritizing growth in the premium plus category, particularly with Penelope Bourbon [4][11] - A comprehensive portfolio management review process is being implemented to rationalize 20% of tail brands, aiming to enhance focus and efficiency [13][65] - The company is committed to investing in digital marketing and analytics to drive brand awareness and improve execution [14][79] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2026 is likely to be another challenging year for the spirits industry, but expresses optimism based on proactive actions and strategic clarity [4][35] - The outlook for 2026 includes expected net sales in the range of $480 million to $500 million and adjusted EBITDA between $90 million and $98 million [29][30] Other Important Information - The company plans to increase its advertising and promotion spend to approximately 13.5% of segment sales in 2026 [32] - A significant earnout payment related to the Penelope acquisition is expected to impact cash flows in 2026 [32][33] Q&A Session Summary Question: What are you seeing regarding pricing in the industry? - Management indicates that pricing is rational, with some adjustments being made to offer more affordable pack sizes [40][41] Question: Does your credit facility allow limitations on how you can use it regarding the Penelope payment? - There are no limitations on the credit facility related to the Penelope earn-out, and the bank group views this payment positively [43] Question: Can you speak to your visibility on 2026 being the trough for brown goods? - Management confirms good visibility for 2026, with most aged and distillate contracts under contract [49][51] Question: What is embedded from fully committed orders in your guidance for distilling? - Substantially all new distillate orders are under contract, and guidance reflects similar spot ages to 2025 [57] Question: How will the rationalization of tail brands impact your 2026 guidance? - The rationalization is accounted for in the 2026 guidance and is not expected to impact it negatively [85]

Financial Data and Key Metrics Changes - For Q4 2025, consolidated sales decreased by 23% year-over-year to $138 million, with adjusted EBITDA declining by 51% to $26 million and adjusted basic EPS decreasing to $0.63, a 60% drop [8][24][26] - For the full year 2025, consolidated sales were $536 million, adjusted EBITDA was $116 million, and adjusted basic EPS was $2.85, with operating cash flows increasing by 19% to $122 million [8][24][26] Business Line Data and Key Metrics Changes - Branded Spirits segment sales declined by 1% in Q4 and 3% for the full year, while premium plus sales grew by 10% in Q4, driven by Penelope Bourbon [23][30] - Distilling Solutions segment sales fell by 47% in Q4 and 45% for the full year, with gross profit declining by 52% [23][24] - Ingredient Solutions sales decreased by 10% in Q4 and 7% for the full year, impacted by equipment outages and higher waste disposal costs [24][30] Market Data and Key Metrics Changes - The spirits industry is expected to face continued pressure, with consumer sentiment and spending under strain due to competition from online gambling and health trends [9][10] - Domestic whiskey production has sharply declined, with reports indicating a 26% drop over the trailing 12 months [15] Company Strategy and Development Direction - The company is focusing on strategic clarity and prioritizing growth in the premium plus category, particularly with Penelope Bourbon [4][11] - A comprehensive portfolio management review process is being implemented to rationalize 20% of tail brands, aiming to enhance focus and efficiency [13][63] - The company plans to increase advertising and promotion spending to approximately 13.5% of segment sales in 2026, with a shift towards digital media [14][80] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2026 is likely to be another challenging year for the spirits industry, but expresses optimism based on proactive actions and strategic clarity [4][9] - The company expects net sales in the range of $480 million to $500 million for 2026, with adjusted EBITDA between $90 million and $98 million [28][29] Other Important Information - The company is committed to maintaining a flexible balance sheet and managing working capital effectively, with a focus on cash generation [32][33] - The Penelope earnout payment is expected to impact operating cash flow significantly in 2026, but the company anticipates deleveraging over time [32][33] Q&A Session Summary Question: What are you seeing regarding pricing in the industry? - Management indicates that pricing is rational, with affordability being an issue, and they are launching smaller pack sizes to address this [40][41] Question: Does your credit facility allow limitations on how you can use it regarding the Penelope payment? - There are no limitations on the credit facility related to the Penelope earn-out, and the bank group views this payment positively [43] Question: Can you speak to your visibility on 2026 being the trough for brown goods? - Management confirms good visibility for 2026, with most aged and distillate customers under contract [51] Question: What is the degree to which rationalizations are built into your 2026 guidance? - Rationalizations are not expected to impact the 2026 guidance, as they are accounted for in the long tail brands [85]

Financial Data and Key Metrics Changes - For Q4 2025, consolidated sales decreased by 23% year-over-year to $138 million, with adjusted EBITDA declining by 51% to $26 million and adjusted basic EPS decreasing by 60% to $0.63 [24][27] - For the full year 2025, consolidated sales were $536 million, adjusted EBITDA was $116 million, and adjusted basic EPS was $2.85, while operating cash flows increased by 19% to $122 million [8][27] - Net income for Q4 2025 was a loss of $135 million, primarily due to a non-cash adjustment of $153 million related to goodwill [27] Business Line Data and Key Metrics Changes - The Branded Spirits segment saw a 1% decline in sales for Q4 and a 3% decline for the full year, with premium plus sales growing by 10% in Q4, driven by Penelope Bourbon [24][30] - The Distilling Solutions segment experienced a 47% decline in Q4 sales, including a 53% decline in brown goods sales, with full year sales down 45% [24][30] - Ingredient Solutions sales declined by 10% in Q4 and 7% for the full year, impacted by equipment outages and higher waste disposal costs [25][30] Market Data and Key Metrics Changes - The spirits industry is expected to face continued challenges, with consumer sentiment under pressure due to competition from online gambling and health trends [9][10] - Domestic whiskey production has sharply declined, with reports indicating a 26% drop over the trailing 12 months [16] Company Strategy and Development Direction - The company is focusing on strategic clarity and prioritizing growth in the premium plus category, particularly with Penelope Bourbon [4][11] - A comprehensive portfolio management review process is being implemented to rationalize 20% of tail brands, aiming to enhance focus and efficiency [13][63] - The company plans to increase advertising and promotion spending to approximately 13.5% of segment sales in 2026, with a shift towards digital media [14][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that 2026 is likely to be another down year for the industry, but expresses optimism based on proactive actions and strategic clarity [4][35] - The company expects net sales in the range of $480 million to $500 million for 2026, with adjusted EBITDA between $90 million and $98 million [29][30] - Management emphasizes the importance of maintaining a flexible balance sheet and prioritizing cash generation [32][33] Other Important Information - The company is committed to reducing costs and managing working capital effectively, with capital expenditures expected to be approximately $20 million in 2026 [29][33] - The Penelope earnout payment is expected to impact cash flows significantly, with operating cash flow projected to be in the range of $40 million to $45 million [32][33] Q&A Session Summary Question: What are you seeing regarding pricing in the industry? - Management indicates that pricing is rational, with affordability being an issue, and they are launching smaller pack sizes to address this [39][40] Question: Does your credit facility allow limitations on how you can use it regarding the Penelope payment? - There are no limitations on the credit facility related to the Penelope earn-out, and the bank views this payment positively [42] Question: Can you speak to your visibility on 2026 being the trough for brown goods? - Management confirms good visibility for 2026, with most contracts under agreement and a focus on premium white goods to reduce costs [49][51] Question: What is the degree of rationalization in the Branded Spirits segment? - The rationalization of tail brands is not expected to impact 2026 guidance, and the company plans to recover costs from divesting certain brands [82][83]

INVESTOR PRESENTATION Fourth Quarter 2025 2 QUARTERLY AND FULL-YEAR HIGHLIGHTS February 2026 FORWARD LOOKING STATEMENTS AND NON-GAAP DISCLAIMER This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the ability of the whiskey inventories of MGP Ingredients, Inc. (the "Company" or "MGP") to provide optionality and upside; ability of the Company to support and meet liquidity needs an ...

Financial Data and Key Metrics Changes - Consolidated sales decreased by 19% to $131 million compared to the prior year [20] - Adjusted EBITDA declined by 29% to $32 million, primarily due to lower gross profit [22] - Basic earnings per share decreased to $0.71, while adjusted basic earnings per share decreased 34% to $0.85 [23] - Year-to-date operating cash flows increased by 26% to $93 million [23] - Full-year adjusted EBITDA guidance raised to the range of $110 to $115 million, and adjusted earnings per share guidance raised to $2.60 to $2.75 [25] Business Line Data and Key Metrics Changes - Branded spirits segment sales decreased by 3%, with premium plus sales showing growth driven by Penelope Bourbon [20] - Distilling solutions segment sales declined by 43%, with brown goods sales down by 50% [20] - Ingredient solutions segment sales increased by 9%, primarily due to higher specialty and commodity wheat protein sales [21] - Gross profits in the ingredient solutions segment declined by 36% due to equipment outages and operational reliability issues [21] Market Data and Key Metrics Changes - Total U.S. whiskey production is down 19% over the prior 12 months, down 28% over the prior six months, and down 32% over the prior three months [14] - The broader domestic whiskey industry is recalibrating to the current environment, which is seen as a positive signal for future supply and demand dynamics [14] Company Strategy and Development Direction - The company is conducting a strategic review to improve clarity and focus on high-potential brands while trimming underperformers [6][7] - New appointments in leadership aim to strengthen operational execution and brand growth [7] - The company is focusing on five key initiatives for 2025: sharpen commercial focus, strengthen customer relationships, improve operational execution, fortify the balance sheet, and drive productivity [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the industry but expresses confidence in the company's long-term potential and the strength of its brands [9] - The company is optimistic about the future, with a focus on building a resilient business model that can weather industry cycles [27] Other Important Information - The company is experiencing a transition period, with a focus on operational excellence and customer engagement [26] - The distilling solutions segment is crucial, with a notable shift in customer purchasing behavior from just-in-case to just-in-time [45] Q&A Session Summary Question: Industry trends and channel inventory - Management noted that customers are eager to communicate and maintain relationships amid changes in the industry, with elevated inventory levels still present [31] Question: Gross margin performance - The strong gross margins were attributed to higher-than-expected aged whiskey sales and effective cost management [33] Question: Portfolio management of branded spirits - Management discussed the pros and cons of trimming lower-performing brands while focusing on premium brands that show growth potential [38] Question: Customer purchasing behavior - Management confirmed that large multinationals have paused purchases, but they expect to hear more about 2026 plans in the spring [44] Question: Ingredient solutions segment performance - Management acknowledged operational challenges but emphasized that demand for their products remains strong [48] Question: Biofuel facility and cost offsets - The biofuel facility is expected to offset disposal costs over time, with initial shipments already made [53] Question: Tariff impacts - Management indicated that while there is some tariff pressure, it is not as significant as for some peers, and the impact on customers with international business is being monitored [80]

Financial Data and Key Metrics Changes - Consolidated sales decreased by 19% to $131 million compared to the prior year [22] - Adjusted EBITDA declined by 29% to $32 million, primarily due to lower gross profit [24] - Net income decreased to $15 million, with adjusted net income down 36% to $18 million [24] - Basic earnings per share decreased to $0.71, while adjusted basic earnings per share decreased 34% to $0.85 [25] - Year-to-date operating cash flows increased by 26% to $93 million [25] - Full-year 2025 adjusted EBITDA guidance raised to $110 to $115 million, and adjusted EPS guidance raised to $2.60 to $2.75 [26] Business Line Data and Key Metrics Changes - Branded spirits segment sales decreased by 3%, with premium plus sales showing growth driven by Penelope Bourbon [22] - Distilling solutions segment sales declined by 43%, with brown goods sales down by 50% [22] - Ingredient solutions segment sales increased by 9%, primarily due to higher specialty and commodity wheat protein sales [23] - Gross profit for the ingredient solutions segment declined by 36% due to operational issues [23] Market Data and Key Metrics Changes - Total U.S. whiskey production down 19% over the prior 12 months, down 28% over the prior six months, and down 32% over the prior three months [15] - Diageo North America recognized MGP Ingredients as one of its distinguished suppliers, indicating strong partnerships [15] Company Strategy and Development Direction - Company is conducting a strategic review to improve clarity and focus on high-potential brands while trimming underperformers [5][6] - New appointments in marketing and operations aim to strengthen brand growth and operational efficiency [6][7] - Focus on innovation and new product launches to meet consumer demand, particularly in the ready-to-pour cocktail segment [12] - Emphasis on operational reliability and cost savings to enhance productivity [8][19] Management Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the industry but expresses confidence in the company's long-term potential [9] - The company is focused on building a resilient business model that can adapt to industry cycles [29] - Management is optimistic about the alignment and enthusiasm within the organization, which supports future growth [20] Other Important Information - The company is prioritizing strong cash generation and has reduced capital expenditures significantly [25][26] - The operational challenges in the ingredient solutions segment are being addressed through increased staffing and maintenance investments [17][19] Q&A Session Summary Question: Industry trends and channel inventory - Management noted that customers are seeking closer relationships due to elevated inventory and reduced production, with a shift towards direct dealings with MGP [31] Question: Gross margin performance - Margins were better than expected due to higher aged whiskey sales and effective cost management [32] Question: Portfolio management of branded spirits - Management is evaluating lower-performing brands while focusing on premium brands that show growth potential [37] Question: Customer purchasing behavior - Large multinationals have paused purchases, but craft customers are increasingly seeking aged whiskey, indicating a shift in demand [41][43] Question: Ingredient solutions segment performance - Management acknowledged operational issues but emphasized strong demand for products, with plans to improve reliability and performance [46][48] Question: Success of Penelope brand - Penelope is experiencing significant growth due to innovative marketing and appealing product offerings, attracting a diverse consumer base [56][58]