- Company reports Q1 diluted earnings of $0.28 per share vs. year-ago earnings of $0.23 per share
- Total sales increase of 13 percent driven mainly by food grade alcohol
- Company strengthens sales, product innovation and customer-facing teams
Distillery Products Segment
- Total distillery products sales revenue for the first quarter was $42.5 million, an increase of 24 percent compared to the prior year's first quarter. The majority of the increase was attributable to a 32 percent increase in high quality food grade alcohol. Fuel grade alcohol revenues accounted for approximately 5 percent of total distillery products sales for the quarter.
- Distillery products pre-tax profits of $8.1 million were up 22 percent from pre-tax income of $6.6 million during the same quarter a year ago. While overall revenues and gross profits increased year-over-year, greater profitability was hampered by significant increases in natural gas prices and corn prices, two principle components of the cost of goods sold. For the first quarter, the per-bushel cost of corn was approximately 15 percent higher than the first quarter of fiscal 2010, while the per-million cubic foot cost of natural gas averaged 58 percent higher than a year ago.
- Total ingredient segment sales revenue for the first quarter was $14.1 million, a decrease of 8 percent compared to the prior year's first quarter. The majority of this decrease in revenue was attributable to lower unit volumes of certain specialty starches as well as commodity starches due to planned slowdowns to accommodate a series of facility and process improvements. This decrease was partially offset by a slight increase in sales of specialty proteins.
- Ingredient solutions pre-tax income declined to $1.4 million compared with $2.3 million in the prior year's first quarter. This was principally due to higher unit production costs caused by the decreased volume. Profitability was aided by a higher mix of targeted ingredients and lower raw material costs for flour, with the per-pound cost of flour declining by 14 percent compared to the year ago quarter.
- Sales in the other segment for the first quarter were approximately $0.4 million, a decrease of approximately 40 percent compared to the previous year's first quarter. There were no revenues of pet products in the fourth quarter compared with a year ago. As previously announced, the company sold the assets related to pet products during the first quarter of fiscal 2010. Sales of plant-based biopolymers and resins also decreased by approximately 12 percent due mainly to a decline in unit pricing partially offset by increased volume.
- The other segment reported a slight pre-tax loss of $20,000 compared to net income of $116,000 in the prior year period due mainly to lower unit pricing.
"There is a strong focus at MGPI to enhance our service levels on the ingredients side with regard to product innovation and commercialization. This is based on heightened new product activity across several of our key customer categories. We've said before that our job is to help our customers grow their businesses. To support this mission, we are strengthening our product innovation and applications capabilities and have recently added a new national sales director to lead our sales initiatives in the ingredients segment."Newkirk concluded, "The coming year will be all about execution. The early evidence of improved profitability is encouraging, but MGPI is still a work in progress." About MGP Ingredients In business since 1941, MGP Ingredients, Inc. is a recognized pioneer in the development and production of value–added, grain-based starches, proteins and food grade alcohol products for the branded packaged goods industry. The company has facilities in Atchison, Kan., and Onaga, Kan. that are equipped with the latest technologies to assure high quality products and to maintain efficient production and service capabilities. Cautionary Note Regarding Forward-Looking Statements This news release contains forward-looking statements as well as historical information. Forward-looking statements are usually identified by or are associated with such words as "intend," "plan", "believe," "estimate," "expect," "anticipate," "hopeful," "should," "may," "will", "could", "encouraged", "opportunities", "potential" and/or the negatives of these terms or variations of them or similar terminology. They reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results and are not guarantees of future performance. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others: (i) disruptions in operations at our Atchison facility, (ii) the availability and cost of grain and fluctuations in energy costs, (iii) the effectiveness of our hedging strategy, (iv) the competitive environment and related market conditions, (v) our ability to maintain compliance with all applicable loan agreement covenants (vi), the ability to effectively operate the Illinois Corn Processing, LLC ("ICP"), joint venture, (vii) our ability to realize operating efficiencies, (viii) and actions of governments. For further information on these and other risks and uncertainties that may affect the company's business, see Item 1A. Risk Factors in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2010.
|MGP INGREDIENTS, INC.|
|CONSOLIDATED STATEMENTS OF INCOME|
|(Dollars in thousands, except per share)||Sept. 30, 2010||Sept. 30, 2009|
|Net Sales||56,978||$ 50,249|
|Cost of Sales||46,624||40,412|
|Gross Profit||$ 10,354||$ 9,837|
|Selling, General and Administrative Expenses||6,227||4,596|
|Other operating costs||273||797|
|Gain/(Loss) on sale/disposal of assets||289||(200)|
|Income from Operations||$ 3,565||$ 4,644|
|Other Income, Net||3||21|
|Equity in earnings/(loss) of joint venture||1,589||(48)|
|Income Before Income Taxes||$ 5,032||$ 3,828|
|Provision for Income Taxes||30||90|
|Net Income||$ 5,002||$ 3,738|
|Other Comprehensive Income, net of tax||28||3|
|Comprehensive Income||$ 5,030||$ 3,741|
|Basic Earnings Per Common Share||$ 0.28||$ 0.23|
|Diluted Earnings Per Common Share||$ 0.28||$ 0.23|
|Weighted average shares outstanding – Basic||16,675,744||16,602,971|
|Weighted average shares outstanding – Diluted||16,696,246||16,603,068|
|CONSOLIDATED BALANCE SHEET (UNAUDITED)|
|(Dollars in thousands)||Sept. 30, 2010||June 30, 2010||(Dollars in thousands)||Sept. 30, 2010||June 30, 2010|
|ASSETS||LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current Assets:||Current Liabilities:|
|Cash and cash equivalents||$ 157||$ 6,369||Current maturities on long-term debt||$ 700||$ 689|
|Restricted cash||--||971||Revolving credit facility||1,517||--|
|Inventory||18,121||14,524||Accounts payable to affiliate||3,672||4,951|
|Prepaid expenses||1,802||1,517||Accrued expenses||6,194||7,510|
|Deposits||1,120||733||Total Current Liabilities||$ 22,460||$ 23,491|
|Deferred income tax assets||4,330||6,267||Other Liabilities:|
|Refundable income taxes||600||578||Long-term debt, less current maturities||1,897||2,082|
|Total Current Assets||$ 48,379||$ 48,633||Deferred credit||5,239||5,379|
|Accrued Retiree Health and Life Insurance Benefits||8,339||8,170|
|Property and Equipment, At Cost||165,614||164,559||Other non-current liabilities||2,767||2,964|
|Less accumulated depreciation||(108,388)||(107,196)||Deferred income taxes||4,330||6,267|
|Net property, plant and equipment||$ 57,226||$ 57,363||Total Liabilities||$ 45,032||$ 48,353|
|Investment in unconsolidated subsidiary||15,883||14,266||Stockholders' Equity||77,237||72,784|
|Other assets||781||875||TOTAL LIABILITIES AND|
|TOTAL ASSETS||$ 122,269||$ 121,137||STOCKHOLDERS' EQUITY||$ 122,269||$ 121,137|
|Net Investment in:||Financed By:|
|Working capital||$ 25,919||$ 25,142||Long-term debt*||$ 1,897||$ 2,082|
|Property, plant and equipment||57,226||57,363||Deferred liabilities||20,675||22,780|
|Other non-current assets||16,664||15,141||Stockholders' equity||77,237||72,784|
|Total||$ 99,809||$ 97,646||Total||$ 99,809||$ 97,646|
|*Excludes short-term portion. Short- term portion is included within working capital.|
CONTACT: MGP Ingredients, Inc. Steve Pickman 913-367-1480