KANSAS | 0-17196 | 45-4082531 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
MGP INGREDIENTS, INC. | ||
Date: November 12, 2013 | By: | /s/ Timothy W. Newkirk |
Timothy W. Newkirk, Chief Executive Officer | ||
• | Net sales of $80.1 million increase 5.3 percent vs year ago, aided by rising prices for high quality alcohol |
• | Income from operations declined by $6.8 million vs year ago due mainly to reduced industrial alcohol volume and costs associated with a corporate proxy dispute |
• | With new lower corn costs and the majority of its Q4 distillery production committed and priced, Company expects Q4 gross profit to top previous three quarters |
• | Distillery products net sales for the third quarter were $66 million, an increase of 7.4 percent compared to the prior year quarter. Increases in sales of premium spirits, whiskeys, bourbons and distillers feed were offset by declines in lower-grade industrial alcohol products. The decline in the lower grades was primarily driven by a 90 percent reduction in the supply sourcing of industrial alcohol from the Company's joint venture partner, ICP, to be sold by the Company. |
• | The distillery products segment reported a third quarter loss from continuing operations before income taxes of $1.7 million compared to income from continuing operations before income taxes of $3.5 million during the same quarter a year ago. Along with higher cost of goods as previously mentioned, the Company experienced a quarter-versus-quarter reduction in gross profit from lower grade bulk white goods, as corn costs rose while net sales prices remained flat. |
• | For the nine months of 2013, distillery segment sales were $200.7 million, a decrease of 2.2 percent compared to the prior year period. The decrease was mainly due to a 99 percent reduction in the supply sourcing of industrial alcohol from the Company’s joint venture partner, ICP. Income from continuing operations before income taxes for the year-to-date was $5.8 million compared to $9.9 million in the prior year period. Overall distillery segment pricing was out-paced by increased costs for corn and natural gas, which averaged 8.5 percent and 2.8 percent higher, respectively, from the prior year period. |
• | Ingredient segment net sales for the third quarter were $14.1 million, a decrease of less than 1 percent from the prior year’s quarter. For the segment as a whole, the 6.5 percent decrease in volume was partially offset by a 6.4 percent increase in unit pricing. |
• | The ingredients segment reported third quarter income from continuing operations before income taxes of $1.2 million, or 9.1 percent of net sales, equal to the same quarter a year ago. Flour costs averaged 13.9 percent higher than the prior year period. This was offset by improved sales mix. |
• | For the first nine months of 2013, ingredient segment net sales were $44.9 million, an increase of 7.5 percent. Sales benefited from both higher average unit pricing and unit volumes. Income from continuing operations before income taxes for the year-to-date period was $3.9 million, equal to the prior year period. |
(unaudited) | Quarter Ended | Year to Date Ended | ||||||||||||
(Dollars in thousands, except per share) | September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||
Sales | $ | 80,709 | $ | 76,189 | $ | 253,134 | $ | 251,882 | ||||||
Less: excise taxes | 538 | 82 | 7,164 | 3,897 | ||||||||||
Net sales | 80,171 | 76,107 | 245,970 | 247,985 | ||||||||||
Cost of sales (a) | 79,356 | 70,047 | 232,645 | 230,382 | ||||||||||
Gross profit | 815 | 6,060 | 13,325 | 17,603 | ||||||||||
Selling, general and administrative expenses | 6,760 | 6,037 | 17,405 | 20,070 | ||||||||||
Other operating costs and losses on sale of assets | 1 | 38 | 59 | 288 | ||||||||||
Gain on sale of assets, net | — | (889 | ) | — | (841 | ) | ||||||||
Income (loss) from operations | (5,946 | ) | 874 | (4,139 | ) | (1,914 | ) | |||||||
Gain on sale of joint venture interest | — | — | — | 4,055 | ||||||||||
Interest expense | (269 | ) | (226 | ) | (829 | ) | (709 | ) | ||||||
Equity in earnings (loss) of Joint Ventures | (91 | ) | (130 | ) | (962 | ) | 164 | |||||||
Income (loss) from continuing operations before income taxes | (6,306 | ) | 518 | (5,930 | ) | 1,596 | ||||||||
Provision for income taxes | 19 | 100 | 44 | 152 | ||||||||||
Net income (loss) from continuing operations | (6,325 | ) | 418 | (5,974 | ) | 1,444 | ||||||||
Discontinued operations, net of tax | — | — | 1,406 | — | ||||||||||
Net income (loss) | (6,325 | ) | 418 | (4,568 | ) | 1,444 | ||||||||
Other comprehensive income (loss), net of tax | (111 | ) | 826 | (401 | ) | 1,011 | ||||||||
Comprehensive income (loss) | $ | (6,436 | ) | $ | 1,244 | $ | (4,969 | ) | $ | 2,455 | ||||
Basic and diluted earnings (loss) per share | ||||||||||||||
Net income (loss) | $ | (0.37 | ) | $ | 0.02 | $ | (0.27 | ) | $ | 0.08 | ||||
Weighted average shares outstanding – Basic | 17,127,523 | 16,976,054 | 17,045,001 | 16,936,366 | ||||||||||
Weighted average shares outstanding – Diluted | 17,127,523 | 16,976,120 | 17,045,001 | 16,936,679 |
(Dollars in thousands) | September 30, 2013 | December 31, 2012 | (Dollars in thousands) | September 30, 2013 | December 31, 2012 | |||||||||||
ASSETS | LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
Current Assets: | Current Liabilities: | |||||||||||||||
Cash and cash equivalents | $ | — | $ | — | Current maturities of long-term debt | $ | 1,558 | $ | 1,683 | |||||||
Restricted cash | — | 12 | Accounts payable | 19,689 | 18,860 | |||||||||||
Receivables | 31,796 | 35,325 | Accounts payable to affiliate, net | 517 | 4,008 | |||||||||||
Inventory | 36,801 | 36,532 | Accrued expenses | 7,145 | 5,220 | |||||||||||
Prepaid expenses | 1,238 | 697 | Total Current Liabilities | 28,909 | 29,771 | |||||||||||
Deferred income taxes | 6,349 | 5,283 | ||||||||||||||
Refundable income taxes | 226 | 242 | Other Liabilities: | |||||||||||||
Total Current Assets | 76,410 | 78,091 | Long-term debt, less current maturities | 4,005 | 5,168 | |||||||||||
Revolving credit facility | 24,867 | 25,893 | ||||||||||||||
Property and equipment | 192,361 | 190,519 | Deferred credit | 3,793 | 4,133 | |||||||||||
Less accumulated depreciation and amortization | (122,061 | ) | (115,128 | ) | Accrued retirement, health and life insurance benefits | 4,884 | 5,096 | |||||||||
Other noncurrent liabilities | 946 | 1,000 | ||||||||||||||
Net Property, Plant | Deferred income taxes | 6,349 | 5,283 | |||||||||||||
and Equipment | 70,300 | 75,391 | Total Liabilities | 73,753 | 76,344 | |||||||||||
Equity method investments | 6,352 | 7,301 | Stockholders’ equity | 81,462 | 86,827 | |||||||||||
Other noncurrent assets | 2,153 | 2,388 | ||||||||||||||
TOTAL ASSETS | $ | 155,215 | $ | 163,171 | TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 155,215 | $ | 163,171 | |||||||
Capital Structure | ||||||||||||||||
Net Investment in: | Financed By: | |||||||||||||||
Working capital | $ | 47,501 | $ | 48,320 | Long-term debt* | $ | 28,872 | $ | 31,061 | |||||||
Property, plant and equipment | 70,300 | 75,391 | Deferred liabilities | 15,972 | 15,512 | |||||||||||
Other noncurrent assets | 8,505 | 9,689 | Stockholders’ equity | 81,462 | 86,827 | |||||||||||
Total | $ | 126,306 | $ | 133,400 | Total | $ | 126,306 | $ | 133,400 |
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