KANSAS | 0-17196 | 45-4082531 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
MGP INGREDIENTS, INC. | ||
Date: March 10, 2016 | By: | /s/ Thomas K. Pigott |
Thomas K. Pigott, Vice President and Chief Financial Officer |
• | Net sales increased 4.5% to $327.6 million. |
• | Gross profit increased 105.9% to $58.5 million. |
• | Gross margin improved 8.8 percentage points to 17.9%. |
• | Operating income increased 97.7% to $32.9 million. 2014 operating income of $16.6 million included an $8.3 million insurance settlement gain. |
• | Net income increased 10.6% to $26.2 million. |
• | Earnings per share increased 12.1% to $1.48. |
• | Operating income is expected to increase by a compound annual growth rate in the ten to fifteen percent range over the next three years. |
• | 2016 net sales percentage growth is expected to accelerate into the high single digits. |
• | 2016 gross margin gains are expected to be moderate following strong 2015 improvement. |
• | 2016 effective tax rate is forecast to be 35% and shares outstanding are expected to be approximately 16.7 million, reflecting the benefit of the 2015 share repurchase. |
• | Due to challenging and volatile conditions in the fuel ethanol market, ICP's 2015 level of profitability may not be sustainable in 2016. |
Basic and Diluted EPS | Change | |||||||
Basic and diluted earnings (loss) per share for 2014 | $ | 1.32 | ||||||
Change in operations(a) | 1.30 | 98.5 | pp(b) | |||||
Change in insurance recoveries(a) | (0.44 | ) | (33.3 | ) | pp | |||
Change in equity method investments(a) | (0.21 | ) | (15.9 | ) | pp | |||
Change in interest expense(a) | 0.01 | 0.7 | pp | |||||
Change in weighted average shares outstanding(c) | 0.02 | 1.5 | pp | |||||
Change in effective tax rate | (0.52 | ) | (39.4 | ) | pp | |||
Basic and diluted earnings (loss) per share for 2015 | $ | 1.48 | 12.1 | % |
(a) | Changes are net of tax based on the effective tax rate for the base year. |
(b) | Percentage points ("pp"). |
(c) | Weighted average shares outstanding change primarily due to the vesting of employee restricted stock units, the granting of Common Stock to directors, the purchase of vested stock by the Company from employees to pay withholding taxes, and repurchases by the Company of Common Stock. In September 2015, our Board of Directors authorized the purchase of 950,000 shares of our Common Stock in a privately negotiated transaction with F2 SEA Inc., an affiliate of SEACOR Holdings Inc. pursuant to a Stock Repurchase Agreement. On September 1, 2015, we completed this purchase. SEACOR Holdings, Inc. is the 70 percent owner of ICP, the Company's 30 percent equity method investment. |
Quarter Ended | Year Ended | |||||||||||||||
(Dollars in thousands, except per share) | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||
Sales | $ | 85,072 | $ | 83,901 | $ | 345,887 | $ | 338,352 | ||||||||
Less: excise taxes | 3,563 | 7,576 | 18,283 | 24,949 | ||||||||||||
Net sales | 81,509 | 76,325 | 327,604 | 313,403 | ||||||||||||
Cost of sales | 65,754 | 70,314 | 269,071 | 284,972 | ||||||||||||
Gross profit | 15,755 | 6,011 | 58,533 | 28,431 | ||||||||||||
Selling, general and administrative expenses | 5,681 | 4,897 | 25,683 | 20,101 | ||||||||||||
Insurance recoveries | — | (7,067 | ) | — | (8,290 | ) | ||||||||||
Other operating costs and losses on sale of assets | — | — | — | 1 | ||||||||||||
Operating income | 10,074 | 8,181 | 32,850 | 16,619 | ||||||||||||
Equity method investment earnings | 92 | 2,850 | 6,102 | 10,137 | ||||||||||||
Interest expense, net | (160 | ) | (201 | ) | (534 | ) | (816 | ) | ||||||||
Income before income taxes | 10,006 | 10,830 | 38,418 | 25,940 | ||||||||||||
Income tax expense | 3,527 | 3,267 | 12,227 | 2,265 | ||||||||||||
Net income | 6,479 | 7,563 | 26,191 | 23,675 | ||||||||||||
Other comprehensive income (loss), net of tax | (11 | ) | (930 | ) | 232 | (728 | ) | |||||||||
Comprehensive income | $ | 6,468 | $ | 6,633 | $ | 26,423 | $ | 22,947 | ||||||||
Basic and diluted earnings per share(a) | $ | 0.38 | $ | 0.42 | $ | 1.48 | $ | 1.32 | ||||||||
Dividends and dividend equivalents per common share | $ | — | $ | — | $ | 0.06 | $ | 0.05 |
(a) | Share information: | Quarter Ended | Year to Date Ended | ||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||
Basic weighted average common shares | 16,552,873 | 17,355,048 | 17,123,556 | 17,305,866 | |||||||||
Incremental shares from potential dilutive securities | — | 553 | — | — | |||||||||
Diluted weighted average common shares | 16,552,873 | 17,355,601 | 17,123,556 | 17,305,866 |
(Dollars in thousands) | December 31, 2015 | December 31, 2014 | (Dollars in thousands) | December 31, 2015 | December 31, 2014 | |||||||||||
ASSETS | LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
Current Assets: | Current Liabilities: | |||||||||||||||
Cash and cash equivalents | $ | 747 | $ | 5,641 | Current maturities of long-term debt | $ | 3,345 | $ | 2,613 | |||||||
Receivables | 30,670 | 32,672 | Accounts payable | 20,940 | 16,076 | |||||||||||
Inventory | 58,701 | 34,441 | Accounts payable to affiliate, net | 2,291 | 3,333 | |||||||||||
Prepaid expenses | 1,062 | 1,179 | Accrued expenses | 10,400 | 8,010 | |||||||||||
Deferred income taxes | — | 7,924 | Income taxes payable | 685 | — | |||||||||||
Refundable income taxes | — | 388 | Other current liabilities | — | 716 | |||||||||||
Total Current Assets | 91,180 | 82,245 | Total Current Liabilities | 37,661 | 30,748 | |||||||||||
Other Liabilities: | ||||||||||||||||
Long-term debt, less current maturities | 7,579 | 7,286 | ||||||||||||||
Revolving credit facility | 22,536 | — | ||||||||||||||
Property and equipment | 229,914 | 198,176 | Deferred credit | 3,402 | 4,099 | |||||||||||
Less accumulated depreciation and amortization | (146,360 | ) | (134,295 | ) | Accrued retirement, health and life insurance benefits | 4,136 | 4,420 | |||||||||
Net Property, Plant | Other non current liabilities | 79 | — | |||||||||||||
and Equipment | 83,554 | 63,881 | Deferred income taxes | 2,757 | 9,297 | |||||||||||
Equity method investments | 18,563 | 12,373 | Total Liabilities | 78,150 | 55,850 | |||||||||||
Other assets | 1,013 | 1,716 | Stockholders’ equity | 116,160 | 104,365 | |||||||||||
TOTAL ASSETS | $ | 194,310 | $ | 160,215 | TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 194,310 | $ | 160,215 |
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