MGP Ingredients Reports Third Quarter Results

ATCHISON, Kan., Nov. 02, 2016 (GLOBE NEWSWIRE) -- MGP Ingredients, Inc. (Nasdaq:MGPI), a leading supplier of premium distilled spirits and specialty wheat proteins and starches, today reported results for the third quarter ended September 30, 2016.

2016 third quarter results compared to 2015 third quarter
  • Consolidated net sales decreased 0.5% to $79.9 million as strong increases in net sales of premium beverage alcohol were more than offset by a sales decline in lower margin industrial alcohol.
  • Consolidated gross profit increased 27.5% to $15.1 million, reflecting stronger profit performance in both the Distillery Products and Ingredient Solutions segments.
  • Consolidated gross margin increased 4.1 percentage points to 18.9%.
  • Other income of $3.4 million in the 2016 quarter included a previously-announced legal settlement and a gain on the sale of long-lived assets.
  • Operating income increased 81.1% to $11.5 million.
  • Equity in joint venture earnings decreased from $1.6 million to $0.7 million.
  • Net income increased 40.8% to $9.5 million.
  • Earnings per share increased 44.7% to $0.55 per share.

"We are pleased with the third quarter results," said Gus Griffin, president and CEO of MGP.  "Our focus continues to be on implementation of our long-term strategic plan and this performance reflects our continued progress against that plan."

Distillery Products Segment - Mix Shift to Beverage Alcohol Drives 19.2% Gross Profit Gain

For the third quarter of 2016, net sales for the Distillery Products segment were flat at $66.7 million.  Gross profit improved to $12.4 million, or 18.5% of net segment sales, compared with $10.4 million, or 15.5% of net segment sales in the third quarter 2015.  The improvement in gross profit was due to the continuing product sales mix shift to higher margin premium beverage alcohol products.

Griffin said, "In our Distillery Products segment, our focus is on migrating away from industrial alcohol by growing our vodka and gin business, and expanding our whiskey business.  While the industrial alcohol business continues to show softness, we are pleased with the pace of this migration.  Demand for our premium bourbon and rye whiskeys continues to outpace category trends."
Food Grade Alcohol Net SalesQuarter Ended September 30,   Quarter vs. Quarter Net Sales Change Increase/(Decrease)  
  2016   2015   $ Change   % Change  
Premium Beverage Alcohol $ 37,843     $ 32,606     $ 5,237     16.1 %  
Industrial Alcohol 19,114     24,433     (5,319 )   (21.8 )%  
Food Grade Alcohol $ 56,957     $ 57,039     $ (82 )   (0.1 )%  
                 
  Net Sales Year to Date Ended September 30,   Period vs. Period Net Sales Change Increase/(Decrease)  
  2016   2015   $ Change   % Change  
Premium Beverage Alcohol $ 109,546     $ 93,861     $ 15,685     16.7 %  
Industrial Alcohol 59,223     76,779     (17,556 )   (22.9 )%  
Food Grade Alcohol $ 168,769     $ 170,640     $ (1,871 )   (1.1 )%  

Ingredient Solutions - Improved Performance

For the 2016 third quarter, net sales for the Ingredient Solutions segment decreased 2.8% to $13.2 million.  Gross profit increased to $2.8 million, or 20.8% of net segment sales, compared with $1.5 million, or 10.9% of net segment sales in the third quarter 2015.

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