Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (November 2023)
45 slides from Mgp Ingredients's investor presentation, November 2023
Slide 1: Investor Presentation Third Quarter 2023
INVESTOR PRESENTATION Third Quarter 2023
Slide 2: Forward Looking Statements and Non-GAAP Disclaimer
FORWARD LOOKING STATEMENTS AND NON-GAAP DISCLAIMER This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the prospects of the industry of MGP Ingredients, Inc. (the “Compa
Slide 3: Mission Statement
MISSION STATEMENT Secure our future by consistently delivering superior financial results by more fully participating in all levels of the alcohol, spirits and food ingredients segments for the betterment of our shareholders, employees, partners, consumers and communities. 3
Slide 4: MGP Overview
MGP OVERVIEW Total sales were $782MM for the year ended December 31, 2022 DISTILLING BRANDED INGREDIENT SOLUTIONS SPIRITS SOLUTIONS Sales: $428MM Sales: $238MM Sales: $116MM (55% of Total) (30% of Total) (15% of Total) GP Margin: 29.5% GP Margin : 40.1% GP Margin: 27.2% ■ Leading supplier of distill
Slide 5: Distilling Solutions
DISTILLING SOLUTIONS A LEADING SUPPLIER OF DISTILLED SPIRITS TO THIRD PARTIES 2022 Total Revenue of $428MM Products consist of the following: $23 $40 • Brown Goods: Premium bourbon, rye and other whiskeys $14 sold as aged whiskey or unaged new distillate, which is then aged by customers from two to
Slide 6: Distilling Solutions
DISTILLING SOLUTIONS UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS Lawrenceburg, IN Operations • Distillery • Top-5 American Whiskey producer • One of the largest U.S. suppliers of rye whiskey Scale provides competitive pricing • Bourbon • American Single Malt Whiskey Capac
Slide 7: Distilling Solutions
DISTILLING SOLUTIONS WELL POSITIONED TO CONTINUE BENEFITTING FROM GROWTH IN U.S. SPIRITS – PRIMARILY AMERICAN WHISKEY U.S. Spirits Continue To Gain Share Of Total Beverage Alcohol Growth of American Whiskey Continues To Outperform Beverage Alcohol Market Share - Revenue 5-year U.S. American Whiskey
Slide 8: Distilling Solutions
DISTILLING SOLUTIONS FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLING SOLUTIONS SEGMENT Distilling Solutions Growth Strategy Distilling Solutions Gross Profit Ladder 1. Focus on Strategic and Targeted Craft Customers For New Distillate and Aged Whiskey Sales 2. Further D
Slide 9: Distilling Solutions: Progress of Planned Closure of the Atchison Distillery
DISTILLING SOLUTIONS PROGRESS OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY • Due to their lower relative gross margin profiles, white goods and industrial alcohol sales have been de- emphasized in recent years • Beginning in 2022, as a result of increased supply into the market following COVID and
Slide 10: Planned Closure of the Atchison Distillery
DISTILLING SOLUTIONS PLANNED CLOSURE OF THE ATCHISON DISTILLERY Pro-Forma Results(1), excluding the Atchison Distillery Overview of Expected One-Time Expenses Consolidated Expect to incur one-time aggregate pre-tax charges of FY 2022 Ytd September 30, 2023 approximately $23 million - $31 million for
Slide 11: Branded Spirits
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS 2022 Total Revenue of $238MM Brand Examples By Price Tier: • Ultra Premium: Yellowstone Bourbon, Remus Gatsby $23 Bourbon, Penelope Private Select Whiskey, Remus Repeal $48 Bourbon, Blood Oath Bourbon
Slide 12: Penelope Bourbon Acquisition
BRANDED SPIRITS PENELOPE BOURBON ACQUISITION Transaction Overview Rationale • Acquired 100% of Penelope Bourbon • Enhances presence in growing American Whiskey category purchase price as follows: • Expands portfolio of premium-plus price point • Upfront: $105.0M upon closing brands • Earnout: additi
Slide 13: Penelope Bourbon Overview
BRANDED SPIRITS PENELOPE BOURBON OVERVIEW EXPANSIVE PREMIUM+ WHISKEY FAMILY One of the fastest growing FOUR GRAIN SERIES COOPER SERIES whiskey brands in the US +125% CORE BRANDS LIMITED RELEASES Source: Nielsen 52 weeks Sales CY All Growth Trend by American Whiskey Spirits Category thru October 7, 2
Slide 14: Expansive Family of Brands
BRANDED SPIRITS 1EXPANSIVE FAMILY OF BRANDS REMUS GATSBY RESERVE Straight Bourbon REMUS REPEAL Whiskey RESERVE SRP: $199.99 Straight Bourbon Whiskey OLD EZRA SRP: $99.99 YELLOWSTONE 7-Year Straight American Single Rye Whiskey Malt Whiskey SRP: $79.99 SRP: $54.99 THE QUIET MAN 8-Year Irish Whiskey YE
Slide 15: Branded Spirits: National Sales Platform and Operational Capabilities
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN BRANDS National Sales Platform Operational Capabilities Diverse Portfolio of Brands • Sales / Distributor representation in every U.S. state and a dedicated international sales team • Dedicated sales and mar
Slide 16: Focus and Innovate Within Growing U.S. Spirits Price Tiers
BRANDED SPIRITS CONTINUE TO FOCUS AND INNOVATE WITHIN U.S. SPIRITS PRICE TIERS THAT ARE GROWING – PRIMARILY HIGH-END AMERICAN WHISKEY, TEQUILA, & GIN Recent Innovation Launches are Designed to Capitalize on Growth Across Spirits Categories Continues to Outperform in the High-End Fastest Growing Pric
Slide 17: Five Strategies for Branded Spirits Growth
BRANDED SPIRITS FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Focus on the Right Marketing Support 1. Focus on the Right Categories • Paid Social (Facebook, 2. Focus on the Right Brands AWARENESS Instagram) • Online/Streami
Slide 18: Ingredient Solutions
INGREDIENT SOLUTIONS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS 2022 Total Revenue of $116MM Products consist of the following: $1 • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial portion of $14 which are modified for special a
Slide 19: Positioned to Serve Growing Specialty Plant-Based Markets
INGREDIENT SOLUTIONS STRONGLY POSITIONED TO SERVE GROWING SPECIALTY PLANT-BASED MARKETS • Plant-based eating represent the top four most common diets/eating patterns. 1 • Consumption of plant-based meat alternatives is higher for 22% of consumers surveyed vs. a year ago1 • Global Texturized Vegetabl
Slide 20: Five Strategies for Ingredient Solutions Growth
INGREDIENT SOLUTIONS FIVE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENT SOLUTIONS SEGMENT Ingredient Solutions Growth Strategy Top Nutrients Americans are Seeking to Consume* 59% Protein 1. Expand and Optimize Fibersym and Arise 57% Vitamin D Branded Platforms 56% Vitamin
Slide 21: Aggressively Expand Fibersym and Arise Platforms
INGREDIENT SOLUTIONS AGGRESSIVELY EXPAND FIBERSYM AND ARISE PLATFORMS Fibersym RW Overview Strategy • Granular RS4-type resistant wheat • Maximize value of existing capacities starch • SKU rationalization • Allows formulators to boost the fiber content and to lower net carbs • Develop marketing camp
Slide 22: Expand Textured Plant Proteins
INGREDIENT SOLUTIONS EXPAND TEXTURED PLANT PROTEINS U.S. product launches and plant-based claims Strategy Region 2018 2019 2020 2021 2022 • Expand our production capabilities with new “in-house” U.S. 291 539 637 772 817 extrusion platform in Atchison • Innovate new products to include pea and other
Slide 23: Operational Excellence
OPERATIONAL EXCELLENCE A CULTURE OF CONTINUOUS IMPROVEMENT • “House of Zero Loss” operational excellence initiative • Improving throughput of existing assets while maintaining consistency of high-quality products • Lawrenceburg, IN operations increased capacity 28% from 2019 to 2022 to support growt
Slide 24: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY THE COMPANY’S ESG STRATEGY IS DISTILLED DOWN AND ORGANIZED INTO AN EASY TO DIGEST AND COMMUNICATE PLATFORM. At MGP, we are dedicated to operating in harmony with people and the environment. We are committed to a culture of continuous ESG Mission improvement, in which o
Slide 25: Financial Results
FINANCIAL RESULTS 25
Slide 26: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS THE COMPANY HAS DELIVERED RECORD RESULTS IN EACH BUSINESS SEGMENT Revenue ($MM) Adjusted Basic EPS1 ($) $4.94 $782 $4.26 $627 $396 $2.27 $2.51 $363 2019 2020 2021 2022 2019 2020 2021 2022 Adjusted EBITDA1 ($MM) FY 2023 Guidance2 Sales are projected to be in the range o
Slide 27: Strong Balance Sheet, Cash Flow, and Excellent Access to Capital
STRONG BALANCE SHEET, CASH FLOW, AND EXCELLENT ACCESS TO CAPITAL Adjusted EBITDA less CapEx and Conversion Adjusted EBITDA less CapEx 1 $124.0 • MGP has seen strong, consistent improvement in adjusted EBITDA1 Adjusted EBTIDA less CapEx as a percentage of Adjusted EBITDA less capital expenditures (“C
Slide 28: Capital Allocation Priorities Remain Focused on Growth Opportunities
CAPITAL ALLOCATION PRIORITIES REMAIN FOCUSED ON GROWTH OPPORTUNITIES Capital Allocation Priorities M&A • M&A will continue to be an important lever to increase our capabilities, margin up our portfolios, and accelerate growth in Branded Spirits. Whiskey Put-Away • With our inventory in balance, matc
Slide 29: Consolidated Financial Results – Q3 2023
CONSOLIDATED FINANCIAL RESULTS – Q3 2023 CONSOLIDATED GROSS PROFIT INCREASED 24% TO $73.4 MILLION Operating Income Drivers Third Quarter 2022-23 ($MM) • Sales increased 5% to $211.6 million. $3.9 $3.0 • Gross profit increased 24% to $73.4 million, $7.4 ($2.2) $33.9 representing 34.7% of sales. ($3.7
Slide 30: Consolidated Sales
CONSOLIDATED SALES SALES WERE UP 5% WITH SALES GROWTH IN ALL THREE BUSINESS SEGMENTS Key Drivers • Distilling Solutions growth due to higher brown goods sales. Consolidated Sales Change vs Prior Year (Quarter Ended 9/30/2023) $MM $MM % • Branded Spirits sales increased due primarily to increased sal
Slide 31: Distilling Solutions
DISTILLING SOLUTIONS INCREASED SALES OF BROWN GOODS PRIMARILY DUE TO HIGHER AVERAGE SELLING PRICE Distilling Solutions Sales Change vs Prior Year (Quarter ended 9/30/2023) $MM $MM % Brown Goods $73.4 $16.0 28% White Goods 14.4 (6.0) (30) Premium Beverage Alcohol 87.8 10.0 13 Industrial Alcohol 9.4 (
Slide 32: Branded Spirits
BRANDED SPIRITS INCREASED SALES OF BRANDS WITHIN PREMIUM PLUS PRICE TIERS Branded Spirits Sales Change vs Prior Year (Quarter ended 9/30/2023) $MM $MM % Ultra premium $20.1 $6.3 46% Super premium 3.6 0.3 9 Premium 7.1 1.1 18 Premium Plus 30.8 7.7 33 Mid 17.6 (3.2) (15) Value 11.1 (1.1) (9) Other 7.3
Slide 33: Ingredient Solutions
INGREDIENT SOLUTIONS INCREASED SALES ACROSS ALL PRODUCT LINES Ingredient Solutions Sales Change vs Prior Year (Quarter ended 9/30/2023) $MM $MM % Specialty wheat starches $17.2 $1.0 6% Specialty wheat proteins 11.4 1.7 18 Commodity wheat starches 4.2 0.4 11 Commodity wheat proteins 0.1 0.1 N/A Total
Slide 34: Appendix
MGP APPENDIX
Slide 35: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2022 Volume % Change Y/Y Total Distilled Spirits (TDS) 305,004 +4.8% Total Whiskey 77,882 +1.9% American Whiskey (Bourbon/Rye/Tennessee) 31,236 +5.2% Super Premium 5,435 +15.1% Rye 1,730 +8.6% Vodka 76,897 -1.5% Super Premium 5,162 -9.0% Gin 9,831 -1.6% Super
Slide 36: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT1 Branded Spirits segment ($ in thousands) 2019 2020 2021 2022 Gross Profit $1,536 $2,187 $62,644 $95,521 Inventory Step-Up - - 2,529 - Adjusted Gross Profit1 $1,536 $2,187 $65,173 $95,521 Adjus
Slide 37: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BASIC EARNINGS PER COMMON SHARE (“EPS”) TO ADJUSTED BASIC EARNINGS PER COMMON SHARE1 2019 2020 2021 2022 Basic EPS $2.27 $2.37 $4.37 $4.94 Insurance recoveries - - (0.59) - Inventory Step-Up – Branded Spirits - - 0.12 - Business Acquisition Costs
Slide 38: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA1 AND ADJUSTED EBITDA1 LESS CAPITAL EXPENDITURES2 ($ in thousands) 2019 2020 2021 2022 Net Income $38,793 $40,345 $90,817 $108,872 Interest 1,305 2,267 4,037 5,451 Taxes 7,144 12,256 30,279 31,300 Depreciation and Amor
Slide 39: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ in thousands) 2019 2020 2021 2022 Total Debt $41,060 $39,871 $233,399 $230,335 Cash and cash equivalents 3,309 21,662 21,568 47,889 Net Debt $37,751 $18,209 $211,831 $182,446 39 Source: Company filings
Slide 40: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES FOR THE QUARTERS ENDED SEPTEMBER 30, 2023 AND 2022 Operating Net Diluted Quarter Ended September 30, 2023 (in thousands) Basic EPS Income Income EPS Reported GAAP Results $19,839 $13,088 $0.59 $0.58 Impairment of long-lived assets and other 18,334
Slide 41: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA1 Quarter Ended Quarter Ended ($ in thousands) 9/30/2023 9/30/2022 Net income $13,088 $23,628 Interest expense 2,353 1,350 Income tax expense 4,373 7,533 Depreciation and amortization 5,782 5,333 Equi
Slide 42: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY PRO-FORMA RESULTS – CONSOLIDATED Change (1) Represents actual results of the Company for the year ended December 31, 2022, as reported in the (Year Ended 12/31/2022) As Reported(1) Pro-Forma(3) $ % Company’s Annual Report on Form 10-K for the year
Slide 43: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY PRO-FORMA RESULTS – DISTILLING SOLUTIONS Change (1) Represents actual results of the Company for the year ended December 31, 2022, as reported in the As Company’s Annual Report on Form 10-K for the year $ % ended December 31, 2022. Year Ended Dece
Slide 44: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY PRO-FORMA RESULTS – DISTILLING SOLUTIONS Change (1) Represents actual results of the Company for the year to date ended September 30, 2023, as reported As in the Company's Quarterly Report on Form 10-Q $ % Year to Date Ended September 30, 2023 Rep
Slide 45: Impact of Planned Closure of the Atchison Distillery
IMPACT OF PLANNED CLOSURE OF THE ATCHISON DISTILLERY PRO-FORMA RESULTS – INGREDIENT SOLUTIONS (1) Represents actual results of the Company for the year Change ended December 31, 2022, as reported in the Company’s Annual Report on Form 10-K for the year ended (Year Ended 12/31/2022) As Reported(1) Pr
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