8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 4, 2022

MGP Ingredients, Inc.

(Exact name of registrant as specified in its charter)

Kansas	0-17196	45-4082531
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Cray Business Plaza

100 Commercial Street

Box 130

Atchison, Kansas 66002

(Address of principal executive offices) (Zip Code)

(913) 367-1480

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	MGPI	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On August 4, 2022, MGP Ingredients, Inc. (the “Company”) issued a Press Release relating to financial results for the second quarter 2022, which ended June 30, 2022 (the “Press Release”). The Press Release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The Press Release is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” Item 7.01, “Regulation FD Disclosure” and Item 9.01, “Financial Statements and Exhibits.”

The information in Item 2.02 of this Current Report, including in Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Such information shall not be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except to the extent expressly incorporated by specific reference contained in such filing or document.

Item 7.01. Regulation FD Disclosure.

Attached as Exhibit 99.1, and incorporated into this Item 7.01 by reference, is the Press Release relating to the Company’s financial results for the second quarter 2022, which ended June 30, 2022.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1*	Press release dated August 4, 2022 furnished solely for the purpose of incorporation by reference into Items 2.02, 7.01, and 9.01
104	The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline Extensible Business Reporting Language)

* Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                        MGP INGREDIENTS, INC.

Date: August 4, 2022	By:	/s/ Brandon M. Gall
		Brandon M. Gall, Vice President, Finance and Chief Financial Officer

EX-99.1

MGP INGREDIENTS REPORTS STRONG SECOND QUARTER 2022 RESULTS

Consolidated sales increased 11% from prior year period

Operating income increased 28%

ATCHISON, Kan., August 4, 2022 - MGP Ingredients, Inc. (Nasdaq:MGPI), a leading provider of distilled spirits, branded spirits, and food ingredient solutions, today reported results for the second quarter ended June 30, 2022.

2022 second quarter consolidated results compared to 2021 second quarter

•Sales increased 11% to $195.0 million, as a result of sales growth in the Distilling Solutions and Ingredient Solutions segments.

•Gross profit increased 4% to $59.2 million, representing 30.4% of sales. Adjusted gross profit decreased slightly from $59.4 million.

•Operating income increased 28% to $35.3 million. Adjusted operating income decreased 4% from $36.9 million.

•Net income increased 26% to $25.4 million. Adjusted net income decreased 10% from $28.1 million.

•Adjusted EBITDA decreased 5% to $40.1 million.

•Basic and diluted earnings per common share ("EPS") increased to $1.15 per share from $0.91 per share. Adjusted basic and diluted EPS decreased to $1.15 per share from $1.27 per share.

“We are pleased with our team’s performance during the second quarter as we continue to execute against our long-term strategic plan,” said David Colo, president and CEO of MGP Ingredients. “Continued strength in the demand for new distillate and aged whiskey resulted in brown goods sales growth of 29% versus the prior year period, driving an overall increase in sales of 19% for premium beverage alcohol. As expected, industrial alcohol and white goods gross profits were negatively impacted by increased commodity costs and additional supply that has entered the market. Consumer demand for our Branded Spirits premium plus offerings, which include premium, super premium and ultra premium brands, remains strong. We also increased our advertising and promotion investment in these brands to support anticipated incremental growth. Our enthusiasm for our Ingredient Solutions segment remains strong, which again delivered record results during the second quarter as we made further progress to optimize segment product mix and align with consumer demand trends. We are confident the marketing platform and go-to-market strategy we have in place will drive further growth in the segment.”

Distilling Solutions

In the second quarter 2022, sales for the Distilling Solutions segment increased 19% to $107.1 million, reflecting a 19% increase in sales of premium beverage alcohol. Gross profit decreased to $29.8 million or 27.8% of segment sales, compared to $32.0 million, or 35.4% of segment sales in the second quarter 2021.

Branded Spirits

For the second quarter 2022, sales for the Branded Spirits segment declined 3% to $58.6 million. Gross profit increased to $21.0 million, or 35.8% of segment sales compared to $18.4 million, or 30.5% of segment

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sales in the second quarter 2021. Excluding the impact of purchase accounting related to the Luxco acquisition, gross margin was 34.7% for the second quarter 2021.

Ingredient Solutions

In the second quarter 2022, sales in the Ingredient Solutions segment increased 21% to a record $29.3 million.Gross profit increased to $8.5 million, or 29.0% of segment sales, compared to $6.4 million, or 26.5% of segment sales in the second quarter 2021.

Other

Advertising and promotion expenses for the second quarter 2022 increased $2.7 million to $6.1 million as compared to the second quarter 2021, primarily driven by incremental investment in the ultra premium, super premium and premium price tier spirit brands.

Corporate selling, general and administrative ("SG&A") expenses for the second quarter 2022 decreased $7.9 million to $17.9 million as compared to the second quarter 2021, primarily due to the one-time acquisition costs in 2021 related to the Luxco acquisition that did not recur in 2022.

The corporate effective tax rate for the second quarter 2022 was 22.4%, compared with 24.2% from the year ago period.

“As we look ahead to the second half of the year, we are confident in our ability to build on the accomplishments we have made towards our long-term strategic objectives,” said Colo. “The expansionary projects we announced earlier this year remain on track and we believe will enable us to meet evolving consumer trends and demand. Our approach to capital allocation remains unchanged, and we will continue to prioritize organic and acquisitive growth. Our excellent performance during the first half of the year has enabled us to revise our full-year guidance upward.”

2022 Outlook

MGP is revising upward its previous consolidated guidance for fiscal 2022:

•Sales are projected to be in the range of $745 million to $765 million.

•Adjusted EBITDA is expected to be in the range of $156 million to $163 million.

•Basic adjusted earnings per common share are forecasted to be in the $4.41 to $4.65 range, with basic weighted average shares outstanding expected to be approximately 22.0 million at year end.

Full year 2022 guidance measures of adjusted EBITDA and basic adjusted EPS are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because MGP is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition related expenses, restructuring and related expenses, and other items not reflective of MGP’s ongoing operations.

Conference Call and Webcast Information

MGP 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 distilled spirits, branded spirits, and food ingredient solutions. Since 1941, we have combined our expertise and energy aimed at formulating excellence, and 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

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crafts to multinational brands. With U.S. distilleries in Kentucky, Indiana, Kansas, and Washington D.C., 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 five 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; MGP’s historic distillery in Lawrenceburg, Indiana, where the George Remus Straight Bourbon Whiskey and Rossville Union Straight Rye Whiskey are produced; and the Washington, D.C.-based Green Hat Distillery, producer of the Green Hat family of gins. The innovative and high-quality brand portfolio also includes Everclear Grain Alcohol, Pearl Vodka, 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

The forward-looking statements contained herein include, but are not limited to, statements about the expected effects on MGP Ingredients, Inc. ("the Company") of continuing consumer trends and our announced expansionary projects. 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 or variations of these terms or similar terminology.

These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, and Company financial results and financial condition 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 statements. Important factors that could cause actual results to differ materially from our expectations include, (i) disruptions in the operations at any of our facilities, (ii) the availability and cost of grain, flour, and agave, and fluctuations in energy costs, (iii) the effectiveness of our grain purchasing program to mitigate our exposure to commodity price fluctuations, (iv) the effectiveness or execution of our strategic plan, (v) potential adverse effects to operations and our system of internal controls related to the loss of key management personnel, (vi) the competitive environment and related market conditions, (vii) the impact of the COVID-19 pandemic, (viii) the effects of inflation and the ability to effectively pass raw material and other price increases on to customers, (ix) our ability to maintain compliance with all applicable loan agreement covenants, (x) increases in interest rates, (xi) our ability to realize operating efficiencies, (xii) actions of governments, and (xiii) consumer tastes and preferences. For further information on these and other risks and uncertainties that may affect our business, including risks specific to our Distilling Solutions, Branded Spirits and Ingredient Solutions segments, see Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

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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, MGP has disclosed adjusted gross profit, adjusted operating income, adjusted income before taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA and basic and diluted adjusted earnings per common share. The presentation of non-GAAP financial measures should be reviewed in conjunction with gross profit, 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 these GAAP measures.The non-GAAP adjustments referenced in the section entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures," take into account the impacts of items that are not necessarily ongoing in nature and/or predictive of the Company's operating trends.We believe that these 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 these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measure.

For More Information

Investors & Analysts:

Mike Houston

646-475-2998 or investor.relations@mgpingredients.com

Media:

Greg Manis

913-360-5440 or greg.manis@mgpingredients.com

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MGP INGREDIENTS, INC.

OPERATING INCOME ROLLFORWARD

(Dollars in thousands)

Operating income, quarter versus quarter	Operating Income		Change
Operating income for quarter ended June 30, 2021	$	27,663
Increase in gross profit - Branded Spirits segment	2,526		9		pp(a)
Increase in gross profit - Ingredient Solutions segment	2,076		8		pp
Decrease in gross profit - Distilling Solutions segment	(2,205)		(8)		pp
Increase in Advertising and promotion expenses	(2,694)		(10)		pp
Decrease in SG&A expenses	7,934		29		pp
Increase in Other operating income (expense), net	6		—		pp
Operating income for quarter ended June 30, 2022	$	35,306	28	%

Operating income, year to date versus year to date	Operating Income		Change
Operating income for year to date ended June 30, 2021	$	48,163
Increase in gross profit - Branded Spirits segment	27,222		57		pp(a)
Increase in gross profit - Distilling Solutions segment	8,483		17		pp
Increase in gross profit - Ingredient Solutions segment	6,214		13		pp
Increase in Advertising and promotion expenses	(7,345)		(15)		pp
Decrease in SG&A expenses	2,614		5		pp
Increase in Other operating income (expense), net	35		—		pp
Operating income for year to date June 30, 2022	$	85,386	77	%

(a) Percentage points (“pp”).

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MGP INGREDIENTS, INC.

EARNINGS PER COMMON SHARE (“EPS”) ROLLFORWARD

Change in basic and diluted EPS, quarter versus quarter	Basic and Diluted EPS		Change
Basic and diluted EPS for quarter ended June 30, 2021	$	0.91
Increase in Operating income (b)	0.26		28		pp(a)
Increase in other income (expense), net(b)	(0.03)		(3)		pp
Tax: Change in effective tax rate	0.04		4		pp
Change in income allocated to participating securities	(0.01)		(1)		pp
Change in interest expense, net (b)	(0.02)		(2)		pp
Basic and diluted EPS for quarter ended June 30, 2022	$	1.15	26	%

Change in basic and diluted EPS, year to date versus year to date	Basic and Diluted EPS		Change
Basic and diluted EPS for year to date ended June 30, 2021	$	1.81
Increase in Operating income(b)	1.60		88		pp(a)
Change in interest expense, net(b)	(0.07)		(4)		pp
Increase in other income (expense), net(b)	(0.03)		(1)		pp
Tax: Change in effective tax rate	0.04		2		pp
Change in weighted average shares outstanding	(0.51)		(28)		pp
Basic and diluted EPS for year to date ended June 30, 2022	$	2.84	57	%

(a) Percentage points (“pp”).

(b) Items are net of tax based on the effective tax rate for the base year (2021).

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MGP INGREDIENTS, INC.

SALES BY OPERATING SEGMENT

(Dollars in thousands)

	DISTILLING SOLUTIONS SALES
	Quarter Ended June 30,				Quarter versus Quarter Sales Change Increase/(Decrease)
	2022		2021		$ Change		% Change
Brown goods	$	56,331	$	43,766	$	12,565	29	%
White goods	17,441		18,205		(764)		(4)
Premium beverage alcohol	73,772		61,971		11,801		19
Industrial alcohol	12,885		14,770		(1,885)		(13)
Food grade alcohol	86,657		76,741		9,916		13
Fuel grade alcohol	3,312		4,753		(1,441)		(30)
Distillers feed and related co-products	11,267		4,672		6,595		141
Warehouse services	5,902		4,182		1,720		41
Total Distilling Solutions	$	107,138	$	90,348	$	16,790	19	%

	BRANDED SPIRITS SALES
	Quarter Ended June 30,				Quarter versus Quarter Sales Change Increase/(Decrease)
	2022		2021		$ Change		% Change
Ultra premium	$	9,435	$	8,002	$	1,433	18	%
Super premium	3,226		3,184		42		1
Premium	5,775		5,303		472		9
Mid	23,301		25,407		(2,106)		(8)
Value	12,908		13,228		(320)		(2)
Other	3,921		5,302		(1,381)		(26)
Total Branded Spirits	$	58,566	$	60,426	$	(1,860)	(3)	%

	INGREDIENT SOLUTIONS SALES
	Quarter Ended June 30,				Quarter versus Quarter Sales Change Increase / (Decrease)
	2022		2021		$ Change		% Change
Specialty wheat starches	$	16,001	$	12,598	$	3,403	27	%
Specialty wheat proteins	10,109		8,352		1,757		21
Commodity wheat starches	3,130		2,663		467		18
Commodity wheat proteins	38		552		(514)		(93)
Total Ingredient Solutions	$	29,278	$	24,165	$	5,113	21	%

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MGP INGREDIENTS, INC.

SALES BY OPERATING SEGMENT

(Dollars in thousands)

	DISTILLERY PRODUCTS SALES
	Year to Date Ended June 30,				Year to Date versus Year to date Sales Change Increase/(Decrease)
	2022		2021		$ Change		% Change
Brown goods	$	118,476	$	86,807	$	31,669	36	%
White goods	37,527		34,862		2,665		8
Premium beverage alcohol	156,003		121,669		34,334		28
Industrial alcohol	24,380		32,106		(7,726)		(24)
Food grade alcohol	180,383		153,775		26,608		17
Fuel grade alcohol	6,594		7,270		(676)		(9)
Distillers feed and related co-products	20,184		9,644		10,540		109
Warehouse services	11,486		8,283		3,203		39
Total Distilling Soutions	$	218,647	$	178,972	$	39,675	22	%

	BRANDED SPIRITS SALES
	Year to Date Ended June 30,				Year to Date versus Year to date Sales Change Increase/(Decrease)
	2022		2021		$ Change		% Change
Ultra premium	$	22,032	$	8,128	$	13,904	171	%
Super premium	6,172		3,595		2,577		72
Premium	11,915		5,329		6,586		124
Mid	42,574		25,407		17,167		68
Value	24,207		13,228		10,979		83
Other	7,417		5,309		2,108		40
Total Branded Spirits	$	114,317	$	60,996	$	53,321	87	%

	INGREDIENT SOLUTIONS SALES
	Year to Date Ended June 30,				Year to Date versus Year to date Sales Change Increase/(Decrease)
	2022		2021		$ Change		% Change
Specialty wheat starches	$	31,204	$	22,820	$	8,384	37	%
Specialty wheat proteins	19,528		14,398		5,130		36
Commodity wheat starches	6,483		4,946		1,537		31
Commodity wheat proteins	38		1,130		(1,092)		(97)
Total Ingredient Solutions	$	57,253	$	43,294	$	13,959	32	%

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MGP INGREDIENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(Dollars in thousands)

	Quarter Ended June 30,				Year to Date Ended June 30,
	2022		2021		2022		2021
Sales	$	194,982	$	174,939	$	390,217	$	283,262
Cost of sales	135,758		118,112		259,172		194,136
Gross profit	59,224		56,827		131,045		89,126
Advertising and promotion expenses	6,065		3,371		11,569		4,224
Selling, general and administrative expenses	17,859		25,793		34,125		36,739
Other operating (income) expense, net	(6)		—		(35)		—
Operating income	35,306		27,663		85,386		48,163
Interest expense, net	(1,543)		(1,104)		(3,141)		(1,592)
Other income (expense), net	(1,062)		(88)		(1,008)		(58)
Income before income taxes	32,701		26,471		81,237		46,513
Income tax expense	7,339		6,412		18,504		11,027
Net income	25,362		20,059		62,733		35,486
Net (income) loss attributable to noncontrolling interest	198		76		264		76
Net income attributable to MGP Ingredients, Inc.	25,560		20,135		62,997		35,562
Income attributable to participating securities	(217)		(150)		(535)		(299)
Net income used in earnings per common share calculation	$	25,343	$	19,985	$	62,462	$	35,263
Basic and diluted weighted average common shares	22,002,385		21,916,721		21,995,779		19,436,143
Basic and diluted earnings per common share	$	1.15	$	0.91	$	2.84	$	1.81

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MGP INGREDIENTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands)

	June 30, 2022		December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	37,415	$	21,568
Receivables, net	105,393		92,537
Inventory	272,948		245,944
Prepaid expenses	6,768		1,510
Refundable income taxes	—		5,539
Total Current Assets	422,524		367,098
Property, plant, and equipment	418,040		404,149
Less accumulated depreciation and amortization	(206,055)		(196,863)
Property, Plant, and Equipment, net	211,985		207,286
Operating lease right-of-use assets, net	15,559		9,671
Investment in joint ventures	5,792		4,944
Intangible assets, net	217,803		218,838
Goodwill	226,294		226,294
Other assets	6,663		7,336
TOTAL ASSETS	$	1,106,620	$	1,041,467
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt	$	4,189	$	3,227
Accounts payable	60,572		53,712
Federal and state excise taxes payable	7,673		6,992
Income taxes payable	141		—
Accrued expenses and other	20,681		24,869
Total Current Liabilities	93,256		88,800
Long-term debt, less current maturities	32,698		35,266
Convertible senior notes	195,066		194,906
Long-term operating lease liabilities	12,206		6,997
Other noncurrent liabilities	4,095		5,132
Deferred income taxes	66,226		66,101
Total Liabilities	403,547		397,202
Total equity	703,073		644,265
TOTAL LIABILITIES AND TOTAL EQUITY	$	1,106,620	$	1,041,467

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MGP INGREDIENTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands)

	Year to Date Ended June 30,
	2022		2021
Cash Flows from Operating Activities
Net income	$	62,733	$	35,486
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,924		8,425
Share-based compensation	2,131		4,767
Deferred income taxes, including change in valuation allowance	125		(1,568)
Other, net	82		(69)
Changes in operating assets and liabilities, net of effects of acquisition:
Receivables, net	(13,142)		7,531
Inventory	(27,508)		(408)
Prepaid expenses	266		(897)
Income taxes payable	141		1,017
Accounts payable	11,438		(12,996)
Accrued expenses and other	(4,791)		7,987
Federal and state liquor excise payable	681		716
Other, net	(61)		(2,537)
Net cash provided by operating activities	43,019		47,454
Cash Flows from Investing Activities
Additions to property, plant, and equipment	(18,087)		(18,336)
Purchase of business, net of cash acquired	—		(149,599)
Contributions to equity method investment	(1,028)		(988)
Other, net	(369)		(1,312)
Net cash used in investing activities	(19,484)		(170,235)
Cash Flows from Financing Activities
Payment of dividends and dividend equivalents	(5,322)		(4,707)
Purchase of treasury stock	(713)		(765)
Loan fees paid related to borrowings	—		(666)
Principal payments on long-term debt	(1,614)		—
Proceeds from credit agreement - revolver	—		242,300
Payments on credit agreement - revolver	—		(10,306)
Payment on assumed debt as part of the Merger	—		(87,497)
Net cash provided by (used in) financing activities	(7,649)		138,359
Effect of exchange rate changes on cash	(39)		3
Increase in cash and cash equivalents	15,847		15,581
Cash and cash equivalents, beginning of period	21,568		21,662
Cash and cash equivalents, end of period	$	37,415	$	37,243

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MGP INGREDIENTS, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES (UNAUDITED)

(in thousands)

	Quarter Ended June 30, 2022
	Gross Profit		Operating Income		Income before Income Taxes		Net Income		MGP Earnings(a)		Basic and Diluted EPS
Reported GAAP Results	$	59,224	$	35,306	$	32,701	$	25,362	$	25,343	$	1.15
No adjustments for the period	—		—		—		—		—		—
Adjusted Non-GAAP results	$	59,224	$	35,306	$	32,701	$	25,362	$	25,343	$	1.15

	Quarter Ended June 30, 2021
	Gross Profit		Operating Income		Income before Income Taxes		Net Income		MGP Earnings(a)		Basic and Diluted EPS
Reported GAAP Results	$	56,827	$	27,663	$	26,471	$	20,059	$	19,985	$	0.91
Adjusted to remove:
Inventory step-up - Branded Spirits (b)	2,529		2,529		2,529		2,529		2,510		0.11
Business acquisition costs (c)	—		6,738		6,738		5,535		5,473		0.25
Adjusted Non-GAAP results	$	59,356	$	36,930	$	35,738	$	28,123	$	27,968	$	1.27

	Year to Date Ended June 30, 2022
	Gross Profit		Operating Income		Income before Income Taxes		Net Income		MGP Earnings(a)		Basic and Diluted EPS
Reported GAAP Results	$	131,045	$	85,386	$	81,237	$	62,733	$	62,462	$	2.84
No adjustments for the period	—		—		—		—		—		—
Adjusted Non-GAAP results	$	131,045	$	85,386	$	81,237	$	62,733	$	62,462	$	2.84

	Year to Date Ended June 30, 2021
	Gross Profit		Operating Income		Income before Income Taxes		Net Income		MGP Earnings(a)		Basic and Diluted EPS
Reported GAAP Results	$	89,126	$	48,163	$	46,513	$	35,486	$	35,263	$	1.81
Adjusted to remove:
Inventory step-up - Branded Spirits (b)	2,529		2,529		2,529		2,529		2,510		0.13
Business acquisition costs(c)	—		8,628		8,628		7,303		7,241		0.37
Adjusted Non-GAAP results	$	91,655	$	59,320	$	57,670	$	45,318	$	45,014	$	2.31

(a)MGP Earnings has been defined as "Net income used in Earnings Per Common Share calculation."

(b)The finished goods Inventory valuation step-up costs are included in the Condensed Consolidated Statement of Income within Cost of goods by the Branded Spirits segment. The adjustment includes the purchase accounting adjustment to value the finished goods inventory acquired in the Luxco acquisition at its estimated fair value.

(c)The Business acquisition costs are included in the Condensed Consolidated Statement of Income within the Selling, general and administrative line item. The adjustment includes transaction and integration costs associated with the merger with Luxco.

12

MGP INGREDIENTS, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES - BRANDED SPIRITS SEGMENT (UNAUDITED)

(in thousands)

	Quarter Ended June 30, 2022
	Revenue		Gross Profit		Gross Margin
Reported GAAP Results - Branded Spirits segment	$	58,566	$	20,960	35.8	%
No adjustments for the period	—		—		—
Adjusted Non-GAAP results - Branded Spirits segment	$	58,566	$	20,960	35.8	%

	Quarter Ended June 30, 2021
	Revenue		Gross Profit		Gross Margin
Reported GAAP Results - Branded Spirits segment	$	60,426	$	18,434	30.5	%
Inventory step-up (a)	—		2,529		4.2		pp(b)
Adjusted Non-GAAP results - Branded Spirits segment	$	60,426	$	20,963	34.7	%

(a)The finished goods Inventory valuation step-up costs are included in the Condensed Consolidated Statement of Income within Cost of goods by the Branded Spirits segment. The adjustment includes the purchase accounting adjustment to value the finished goods inventory acquired in the Luxco acquisition at its estimated fair value.

(b)Percentage points (“pp”).

MGP INGREDIENTS, INC.

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(UNAUDITED)

(in thousands)

	Quarter Ended June 30,				Year to Date Ended June 30,
	2022		2021		2022		2021
Net Income	$	25,362	$	20,059	$	62,733	$	35,486
Interest expense	1,543		1,104		3,141		1,592
Income tax expense	7,339		6,412		18,504		11,027
Depreciation and amortization	5,303		5,115		10,924		8,425
Equity method investment	574		334		180		334
Inventory step-up - Branded Spirits	—		2,529		—		2,529
Business acquisition costs	—		6,738		—		8,628
Adjusted EBITDA	$	40,121	$	42,291	$	95,482	$	68,021

The non-GAAP adjusted EBITDA measure is defined as earnings before interest, taxes, depreciation and amortization, equity method investment and business acquisition costs. See section "reconciliation of selected GAAP measure to non-GAAP measures" for further details on each of these non-GAAP Items.

13

XML

Cover	Aug. 04, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 04, 2022
Entity Registrant Name	MGP Ingredients, Inc.
Entity Incorporation, State or Country Code	KS
Entity File Number	0-17196
Entity Tax Identification Number	45-4082531
Entity Address, Address Line One	Cray Business Plaza
Entity Address, Address Line Two	100 Commercial Street
Entity Address, Address Line Three	Box 130
Entity Address, City or Town	Atchison
Entity Address, State or Province	KS
Entity Address, Postal Zip Code	66002
City Area Code	913
Local Phone Number	367-1480
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of each class	Common Stock, no par value
Trading Symbol	MGPI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0000835011