ATCHISON, Kan., May 02, 2024 (GLOBE NEWSWIRE) -- MGP Ingredients, Inc. (NASDAQ:MGPI), a leading provider of branded and distilled spirits as well as food ingredient solutions, today reported results for the first quarter ended March 31, 2024. 2024 first quarter consolidated results compared to 2023 first quarter: Due to the Atchison distillery closure, sales decreased 15% to $170.6 million. Excluding the impact of the Atchison distillery in both periods, consolidated sales were in line with the prior year period. As expected, gross profit decreased 10% to $62.8 million, representing 36.8% of sales. Excluding the impact of the Atchison distillery in the current period, gross margin was 37.3%. Operating income decreased 30% to $28.9 million. Adjusted operating income decreased 19% to $33.6 million. Net income decreased 34% to $20.6 million. Adjusted net income decreased 22% to $24.2 million. Adjusted EBITDA decreased 17% to $40.2 million. Basic earnings per common share ("EPS") decreased to $0.92 per share from $1.40 per share. Adjusted basic EPS decreased to $1.07 per share from $1.40 per share. Diluted EPS decreased to $0.92 per share from $1.39 per share. Adjusted diluted EPS decreased to $1.07 per share from $1.39 per share. "Given our previously communicated outlook for the first quarter of the year, we are pleased with the results, and remain optimistic regarding our business throughout the remainder of the year," said David Bratcher, CEO and president of MGP Ingredients. "Within our Branded Spirits segment, we remain confident in our premiumization strategy, as we saw continued sales growth in our premium plus portfolio, which was up 12% year over year. Our Distilling Solutions business continues to make progress towards our long-term strategy of being brown goods focused with the successful closure of the Atchison white goods facility. Lastly, our Ingredient Solutions business achieved record sales this quarter as demand for our specialty ingredients remains strong." Distilling SolutionsIn the first quarter 2024, as expected, sales for the Distilling Solutions segment decreased 25% to $84.9 million. Excluding the impact of the Atchison distillery in both periods, sales increased 2% to $83.6 million during the first quarter of 2024. Gross profit increased to $34.1 million, or 40.2% of segment sales, compared to $33.0 million, or 29.2% of segment sales in the first quarter 2023. Excluding the impact of the Atchison distillery in the current period, segment gross margin was 41.2% in the first quarter 2024. Branded SpiritsFor the first quarter 2024, sales for the Branded Spirits segment decreased 12% to $50.1 million, due to expected sales declines in mid and value price tier brands. Sales of the premium plus price tier spirit brands grew 12%. Gross profit decreased to $22.5 million, or 44.9% of segment sales compared to $24.6 million, or 43.2% of segment sales in the first quarter 2023. Ingredient SolutionsIn the first quarter 2024, sales for the Ingredient Solutions segment increased 15% to $35.6 million. Gross profit decreased to $6.2 million, or 17.4% of segment sales, compared to $12.2 million, or 39.5% of segment sales in the first quarter 2023. Excluding the impact of the Atchison distillery in both periods, gross profit decreased to $6.2 million, or 17.4% of segment sales, compared to $10.4 million, or 33.6% of segment sales in the first quarter 2023. OtherAdvertising and promotion expenses for the first quarter 2024 increased $1.0 million, or 12%, to $8.7 million as compared to the first quarter 2023. Corporate selling, general, and administrative ("SG&A") expenses for the first quarter 2024 increased 2% to $21.0 million as compared to the first quarter 2023. During the first quarter 2024, the change in fair value of the contingent consideration totaled $4.1 million related to the Penelope acquisition. The corporate effective tax rate for the first quarter 2024 was 23.3%, compared with 23.7% from the year ago period. 2024 Outlook MGP is confirming the following consolidated guidance for fiscal 2024: Sales are projected to be in the range of $742 million to $756 million, following the closure of the Company's Atchison, Kansas distillery in December 2023. Adjusted EBITDA is expected to be in the range of $218 million to $222 million, inclusive of the add back of share-based compensation expense. Adjusted basic earnings per common share are forecasted to be in the $6.12 to $6.23 range, with basic weighted average shares outstanding expected to be approximately 22.3 million at year end. "Looking to the remainder of the year, we remain confident in both the business and our long-term strategy and will continue to invest in initiatives we believe will provide our shareholders with enhanced value," concluded Bratcher. Conference Call and Webcast InformationMGP Ingredients will host a conference call for analysts and institutional investors at 10 a.m. ET today to discuss these results and current business trends.   The conference call and webcast will be available via: Webcast:    ir.mgpingredients.com on the Events & Presentations page Conference Call:   844-308-6398 (domestic) or 412-717-9605 (international)       About MGP Ingredients, Inc.MGP Ingredients, Inc. (NASDAQ:MGPI) is a leading producer of premium branded and distilled spirits, as well as food ingredient solutions. Since 1941, we have combined our expertise and energy aimed at formulating excellence, bringing product ideas to life collaboratively with our customers. As one of the largest distillers in the U.S., MGP's offerings include bourbon and rye whiskeys, gins, and vodkas, which are created at the intersection of science and imagination, for customers of all sizes, from crafts to multinational brands. With distilleries in Kentucky and Indiana, and bottling operations in Missouri, Ohio, and Northern Ireland, MGP has the infrastructure and expertise to create on any scale. MGP's branded spirits portfolio covers a wide spectrum of brands in every segment, including iconic brands from Luxco, which was founded in 1958 by the Lux Family. Luxco is a leading producer, supplier, importer, and bottler of beverage alcohol products. Our branded spirits mission is to meet the needs and exceed the expectations of consumers, associates, and business partners. Luxco's award-winning spirits portfolio includes well-known brands from four distilleries: Bardstown, Kentucky-based Lux Row Distillers, home of Ezra Brooks, Rebel, Blood Oath, David Nicholson, and Daviess County; Lebanon, Kentucky-based Limestone Branch Distillery, maker of Yellowstone Kentucky Straight Bourbon Whiskey, Minor Case Straight Rye Whiskey, and Bowling & Burch Gin; Jalisco, Mexico-based Destiladora González Lux, producer of 100% agave tequilas, El Mayor, Exotico, and Dos Primos; and the historic Ross & Squibb Distillery in Lawrenceburg, Indiana, where Penelope Bourbon, Remus Straight Bourbon Whiskey, and Rossville Union Straight Rye Whiskey are produced. The innovative and high-quality brand portfolio also includes Everclear Grain Alcohol, Pearl Vodka, Green Hat Gin, Saint Brendan's Irish Cream, The Quiet Man Irish Whiskey, and other well-recognized brands. In addition, our Ingredient Solutions segment offers specialty proteins and starches that help customers harness the power of plants and provide a host of functional, nutritional, and sensory benefits for a wide range of food products. The transformation of American grain into something more is in the soul of our people, products, and history. We're devoted to unlocking the creative potential of this extraordinary resource. For more information, visit mgpingredients.com. Cautionary Note Regarding Forward-Looking Statements This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about optimism regarding the business of MGP Ingredients, Inc. (the "Company" or "MGP"); its premiumization strategy, business, and long-term strategy; its ability to enhance shareholder value; and the Company's 2024 outlook, including its expectations for sales, adjusted EBITDA, adjusted basic earnings per common share ("EPS"), and shares outstanding. Forward looking statements are usually identified by or are associated with words such as "intend," "plan," "believe," "estimate," "expect," "anticipate," "project," "forecast," "hopeful," "should," "may," "will," "could," "encouraged," "opportunities," "potential," and similar terminology. These forward-looking statements reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance, Company financial results, and Company financial condition and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially from our expectations include without limitation any effects of changes in consumer preferences and purchases and our ability to anticipate or react to those changes; our ability to compete effectively; damage to our reputation or that of any of our key customers or their brands; failure to introduce successful new brands and products or have effective marketing or advertising; changes in public opinion about alcohol or our products; our reliance on our distributors to distribute our branded spirits; our reliance on fewer, more profitable customer relationships; interruptions in our operations or a catastrophic event at our facilities; decisions concerning the quantity of maturing stock of our aged distillate; warehouse expansion issues; our reliance on a limited number of suppliers; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; our closure of our Atchison, Kansas distillery; regulation and taxation and compliance with existing or future laws and regulations; tariffs, trade relations, and trade policies; excise taxes, incentives and customs duties; our ability to protect our intellectual property rights and defend against alleged intellectual property rights infringement claims; failure to secure and maintain listings in control states; labeling or warning requirements or limitations on the availability of our products; product recalls or other product liability claims; anti-corruption laws, trade sanctions and restrictions; class action or other litigation; higher costs or the unavailability and cost of raw materials, product ingredients, energy resources, or labor; failure of our information technology systems, networks, processes, associated sites, or service providers; acquisitions and potential future acquisitions; interest rate increases; reliance on key personnel; commercial, political, and financial risks; covenants and other provisions in our credit arrangements; pandemics or other health crises; ability to pay any dividends; limited rights of common stockholders and antitakeover provisions in our governing documents; the impact of issuing shares of our common stock; and the effectiveness or execution of our strategic plan. For further information on these risks and uncertainties and other factors that could affect the Company's business, see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as well as the Company's other SEC filings. The Company undertakes no obligation to update any forward-looking statements or information in this press release, except as required by law. Non-GAAP Financial Measures In addition to reporting financial information in accordance with U.S. GAAP, the Company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, GAAP. In addition to the comparable GAAP measures, the Company has disclosed adjusted operating income, adjusted income before income taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA and adjusted basic and diluted EPS, as well as guidance for adjusted EBITDA and adjusted basic EPS. The presentation of these non-GAAP financial measures should be reviewed in conjunction with operating income, income before income taxes, net income, net income used in earnings per common share calculation, and basic and diluted EPS computed in accordance with U.S. GAAP and should not be considered a substitute for the GAAP measure. We believe that the non-GAAP measures provide useful information to investors regarding the Company's performance and overall results of operations. In addition, management uses these non-GAAP measures in conjunction with GAAP measures when evaluating the Company's operating results compared to prior periods on a consistent basis, assessing financial trends, and for forecasting purposes. Non-GAAP financial measures may not provide information that is directly comparable to other companies, even if similar terms are used to identify such measures. The attached schedules provide a full reconciliation of historical non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. Full year 2024 guidance measures of adjusted EBITDA and adjusted basic EPS are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include without limitation, acquisition related expenses, restructuring and related expenses, and other items not reflective of the Company's ongoing operations. For More Information Investors & Analysts:Mike Houston646-475-2998 or Media:Greg Manis913-360-5440 or MGP INGREDIENTS, INC.OPERATING INCOME ROLLFORWARD(Dollars in thousands) Operating income, quarter versus quarter   Operating Income   Change   Operating income for the quarter ended March 31, 2023   $ 41,559         Decrease in gross profit - Ingredient Solutions segment     (6,023 )   (15 )%   Decrease in gross profit - Branded Spirits segment     (2,061 )   (5 ) pp(a) Increase in gross profit - Distilling Solutions segment     1,055     3   pp Increase in advertising and promotion expenses     (950 )   (2 ) pp Increase in SG&A expenses     (447 )   (1 ) pp Impairment of long-lived assets and other     (116 )   —   pp Change in fair value of contingent consideration     (4,100 )   (10 ) pp Operating income for the quarter ended March 31, 2024   $ 28,917     (30 )%   (a)   Percentage points ("pp").       MGP INGREDIENTS, INC.EARNINGS PER COMMON SHARE ("EPS") ROLLFORWARD Change in EPS, quarter versus quarter   EPS   Change   Basic EPS for the quarter ended March 31, 2023   $ 1.40         Change in operating income (b)     (0.44 )   (31 )%   Change in other income (expense), net(b)     (0.01 )   (1 ) pp(a) Change in interest expense, net (b)     (0.04 )   (3 ) pp Change in effective tax rate     0.01     1   pp Basic and Diluted EPS for the quarter ended March 31, 2024   $ 0.92     (34 )%   (a)   Percentage points ("pp"). (b)   Items are net of tax based on the effective tax rate for the base year (2023).       MGP INGREDIENTS, INC.SALES BY OPERATING SEGMENT(Dollars in thousands)   DISTILLING SOLUTIONS SALES     Quarter Ended March 31,   Quarter versus Quarter SalesChange Increase/(Decrease)       2024     2023   $ Change   % Change   Brown goods $ 66,331   $ 68,324   $ (1,993 )   (3 )%   Warehouse services   7,956     6,858     1,098     16     White goods and other co-products   10,565     38,041     (27,476 )   (72 )   Total Distilling Solutions $ 84,852   $ 113,223   $ (28,371 )   (25 )%                       BRANDED SPIRITS SALES     Quarter Ended March 31,   Quarter versus Quarter SalesChange Increase/(Decrease)       2024     2023   $ Change   % Change   Premium plus   20,906     18,746     2,160     12 %   Mid   14,761     20,835     (6,074 )   (29 )   Value   10,009     13,421     (3,412 )   (25 )   Other   4,470     3,881     589     15     Total Branded Spirits $ 50,146   $ 56,883   $ (6,737 )   (12 )%                                 INGREDIENT SOLUTIONS SALES     Quarter Ended March 31,   Quarter versus Quarter SalesChange Increase / (Decrease)       2024     2023   $ Change   % Change   Specialty wheat starches $ 22,271   $ 14,686   $ 7,585     52 %   Specialty wheat proteins   9,995     11,890     (1,895 )   (16 )   Commodity wheat starches   3,262     3,807     (545 )   (14 )   Commodity wheat proteins   37     521     (484 )   (93 )   Total Ingredient Solutions $ 35,565   $ 30,904   $ 4,661     15 %                     MGP INGREDIENTS, INC.CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(Dollars in thousands, except share and per share amounts)     Quarter Ended March 31,       2024       2023   Sales   $ 170,563     $ 201,010   Cost of sales     107,768       131,186   Gross profit     62,795       69,824             Advertising and promotion expenses     8,683       7,733   Selling, general, and administrative expenses     20,979       20,532   Impairment of long-lived assets and other     116       —   Change in fair value of contingent consideration     4,100       —   Operating income     28,917       41,559             Interest expense, net     (2,019 )     (995 ) Other income (expense), net     (52 )     123   Income before income taxes     26,846       40,687             Income tax expense     6,262       9,655   Net income     20,584       31,032             Net loss attributable to noncontrolling interest     51       39   Net income attributable to MGP Ingredients, Inc.     20,635       31,071             Income attributable to participating securities     (239 )     (311