Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Q2 2024 Earnings Presentation
40 slides from Mgp Ingredients's earnings presentation, August 2024
Slide 1: Investor Presentation Second Quarter 2024
INVESTOR PRESENTATION Second Quarter 2024 August 2024
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 industries of MGP Ingredients, Inc. (the “Com
Slide 3: Second Quarter 2024 Results
SECOND QUARTER 2024 RESULTS STRONG 2Q24 PERFORMANCE LARGELY DRIVEN BY CONTINUED BRAND MOMENTUM AND SOLID BROWN GOODS SALES • Sales decreased 9% to $190.8 million, primarily due to the Atchison distillery closure. Excluding the impact of the Atchison distillery, consolidated sales increased by 7% in
Slide 4: Solid Sales Growth
SOLID SALES GROWTH SECOND QUARTER SALES INCREASED BY 7%, EXCLUDING THE IMPACT OF THE ATCHISON DISTILLERY • Distilling Solutions segment sales increased 9% to Change vs Prior Year $93.3 million, driven primarily by higher brown Consolidated Sales, excluding goods sales. Atchison distillery (Quarter E
Slide 5: Double Digit Adjusted Operating Income and Earnings Growth
DOUBLE DIGIT ADJUSTED OPERATING INCOME AND EARNINGS GROWTH SECOND QUARTER GROWTH DRIVEN LARGELY BY BRANDED SPIRITS AND BROWN GOODS Adjusted Operating Income Drivers Adjusted EPS Drivers1 Second Quarter 2023-24 ($MM) Second Quarter 2023-24 ($MM) $1.71 $0.20 $0.04 $0.02 $3.8 $1.8 $51.3 $1.49 $7.6 ($0.
Slide 6: Distilling Solutions
DISTILLING SOLUTIONS BROWN GOODS SALES REBOUNDED; CONTINUED SHIFT TOWARDS NEW DISTILLATE Change vs Prior Year Distilling Solutions (excluding Atchison distillery) (Quarter ended 6/30/2024) $MM $MM % Change Brown goods $75.4 $2.3 3% Warehouse services 8.4 1.6 24 White goods and other co-products 9.5
Slide 7: Branded Spirits
BRANDED SPIRITS BRANDED SEGMENT GROWTH DRIVEN BY STRONG PREMIUM PLUS PRICE TIER BRANDS Change vs Prior Year Branded Spirits (Quarter ended 6/30/2024) $MM $MM % Premium plus $30.7 $6.9 29% Mid 17.1 - - Value 11.7 0.1 1 Other 4.6 (0.6) (11) Sales $64.0 $6.4 11% Gross Profit $33.6 $7.6 29% Gross Margin
Slide 8: Ingredient Solutions
INGREDIENT SOLUTIONS COMMODITY STARCHES AND SPECIALTY PROTEIN SOFTNESS PRESSURED QUARTERLY SEGMENT SALES Change vs Prior Year Ingredient Solutions (excluding Atchison distillery) (Quarter ended 6/30/2024) $MM $MM % Specialty wheat starches $19.2 $2.1 12% Specialty wheat proteins 11.2 (1.4) (11) Comm
Slide 9: Reiterate 2024 Financial Guidance
REITERATE 2024 FINANCIAL GUIDANCE Full Year 2024 Guidance1 Sales $742 million to $756 million Adjusted EBITDA2 $218 million to $222 million Adjusted basic EPS $6.12 to $6.23 Basic weighted average shares outstanding ~ 22.3 million Capital expenditures ~ $85 million 1 Guidance as of August 1, 2024. 9
Slide 10: MGP At-A-Glance
MGP AT-A-GLANCE 10
Slide 11: MGP At-A-Glance
MGP AT-A-GLANCE TOTAL SALES OF $837MM FOR FULL YEAR 2023 DISTILLING BRANDED INGREDIENT SOLUTIONS SPIRITS SOLUTIONS Sales: $451MM Sales: $254MM Sales: $132MM (54% of Total) (30% of Total) (16% of Total) GP Margin: 32.2% GP Margin : 44.4% GP Margin: 35.7% ■ Leading supplier of distilled spirits, ■ Att
Slide 12: Atchison Distillery Closure
ATCHISON DISTILLERY CLOSURE IMPACT ON CONSOLIDATED AND SEGMENT FINANCIALS Pro-Forma Results(1), excluding Atchison Distillery Overview of Closure Related Expenses Consolidated • We incurred one-time aggregate pre-tax charges of FY 2022 FY 2023 approximately $19.4 million in 2023. These charges inclu
Slide 13: Distilling Solutions
DISTILLING SOLUTIONS ONE OF THE LEADING SUPPLIERS OF DISTILLED SPIRITS, PARTICULARLY NEW AND AGED AMERICAN WHISKEYS 2023 Total Revenue of $451MM Products consist of the following: $29 • Brown Goods: Premium bourbon, rye, and other whiskeys sold as aged whiskey or unaged new distillate, which is then
Slide 14: Distilling Solutions: Brown Goods Key Focus Post Atchison Closure
DISTILLING SOLUTIONS BROWN GOODS ARE THE KEY FOCUS POST ATCHISON DISTILLERY CLOSURE • Brown goods accounted for more than 80% of segment sales in Brown Goods as a Percentage of Total Segment Sales the second quarter 2024 given greater focus on higher-margin and Distilling Solutions Gross Margin brow
Slide 15: Branded Spirits
BRANDED SPIRITS FOCUSED ON GROWING HIGH POTENTIAL, HIGH MARGIN PREMIUM PLUS BRANDS 2023 Total Revenue of $254MM Brand Examples By Price Tier: • Premium Plus: Yellowstone Bourbon, Remus Bourbon, $25 Penelope Bourbon, Blood Oath Bourbon, Rebel Bourbon, Ezra $48 $105 Premium Plus Mid Books Bourbon, Dos
Slide 16: Branded Spirits: Broad Portfolio Focused on Premium Plus
BRANDED SPIRITS Straight Bourbon Whiskey BROAD PORTFOLIO OF BRANDS FOCUSED ON THE PREMIUM PLUS SEGMENT SRP: $199.99 Straight Bourbon Whiskey SRP: $99.99 7-Year Straight Rye Whiskey American Single Malt SRP: $79.99 Whiskey SRP: $54.99 8-Year Irish Whiskey SRP: $42.99 Straight Bourbon Straight Bourbon
Slide 17: Branded Spirits: Growing Distribution Footprint
BRANDED SPIRITS GROWING DISTRIBUTION FOOTPRINT SUPPORTED BY A NATIONAL SALES PLATFORM AND EXTENSIVE DISTILLERY NETWORK National Distribution Partners Extensive Distillery and Bottling Network Lux Row Distillery Ross & Squibb Distillery Bardstown, KY Lawrenceburg, IN Limestone Distillery DGL Distille
Slide 18: Ingredient Solutions
INGREDIENT SOLUTIONS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES AND PROTEINS 2023 Total Revenue of $132MM Products consist of the following: $1 • Specialty Wheat Starches: Premium wheat starches are sold primarily to food processors and distributors to improve taste, $17 Specialty Wheat Starches
Slide 19: Historical Financial Results
HISTORICAL FINANCIAL RESULTS TRACK RECORD OF CONSISTENT GROWTH Revenue ($MM) Adjusted EBITDA ($MM) 23% 4 year CAGR 36% $837 4 year CAGR $210 $782 $175 $627 $144 $363 $396 $76 $61 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Adjusted Basic EPS ($) 27% 4 year CAGR $5.90 $4.94 $4.26 $2.27 $2.51 20
Slide 20: Strong Balance Sheet with Excellent Access to Capital
STRONG BALANCE SHEET WITH EXCELLENT ACCESS TO CAPITAL • Balance sheet remains healthy, and we remain Net Leverage Ratio well capitalized with debt totaling $309 million 1.5x 1.4x and a cash position of $21 million 1.3x • Excellent access to capital with total availability 1.0x of nearly $536 million
Slide 21: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Capital Allocation to Prioritize Organic and Inorganic Growth • M&A - Focused on alcohol spirits brands • Capital Expenditures – Invest in initiatives to support our growth and strengthen our competitive positioning • Whiskey Put-Away – American whiskey put-away for agi
Slide 22: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY At MGP, we are dedicated to operating in harmony with people and the environment. We are committed to a culture of continuous ESG Mission improvement, in which our shareholders, employees, and the communities where we operate all benefit from a business platform based
Slide 23: Appendix
MGP APPENDIX
Slide 24: Distilling Solutions: Positioned to Benefit from U.S. Spirits Growth
DISTILLING SOLUTIONS WELL POSITIONED TO CONTINUE BENEFITTING FROM GROWTH IN U.S. SPIRITS – PRIMARILY AMERICAN WHISKEY U.S. Spirits Continue To Gain Share Of Total Beverage Alcohol American Whiskey Remains Strong Beverage Alcohol Market Share - Revenue 5-year U.S. American Whiskey Volume CAGR 6.9% Be
Slide 25: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2023 Volume % Change Y/Y Total Distilled Spirits (TDS) 308,807 +1.2% Total Whiskey 74,591 -4.2% American Whiskey (Bourbon/Rye/Tennessee) 31,110 -0.4% Super Premium 5,655 +4.0% Rye (1) 1,730 +8.6% Vodka 74,908 -2.6% Super Premium 5,377 +4.2% Gin 8,977 -8.7% Su
Slide 26: Reconciliation: Branded Spirits Gross Profit to Adjusted Gross Profit
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT - UNAUDITED Branded Spirits segment ($ in thousands) 2019 2020 2021 2022 2023 Gross Profit $1,536 $2,187 $62,644 $95,521 $112,781 Inventory Step-Up - - 2,529 - - Adjusted Gross Profit $1,536 $2
Slide 27: Reconciliation: Basic EPS to Adjusted Basic EPS
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BASIC EARNINGS PER COMMON SHARE (“EPS”) TO ADJUSTED BASIC EARNINGS PER COMMON SHARE - UNAUDITED 2019 2020 2021 2022 2023 Basic EPS $2.27 $2.37 $4.37 $4.94 $4.82 Impairment of long-lived assets and other - - - - 0.66 Fair value of contingent consid
Slide 28: Reconciliation: Net Income to Adjusted EBITDA
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA LESS CAPITAL EXPENDITURES1 - UNAUDITED ($ in thousands) 2019 2020 2021 2022 2023 Net Income $38,793 $40,345 $90,817 $108,872 $107,130 Interest 1,305 2,267 4,037 5,451 6,647 Taxes 7,144 12,256 30,27
Slide 29: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ in thousands) 2019 2020 2021 2022 2023 Total Debt $41,060 $39,871 $233,399 $230,335 $287,249 Cash and cash equivalents 3,309 21,662 21,568 47,889 18,388 Net Debt $37,751 $18,209 $211,831 $182,446 $268,861 Adjusted EBITDA $61,361 $75,969 $144,273 $174,800 $210,02
Slide 30: Reconciliation: Quarters Ended June 30, 2024 and 2023
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES FOR THE QUARTERS ENDED JUNE 30, 2024 AND 2023 Quarter Ended June 30, 2024 (in thousands) Operating Income Net Income Basic and Diluted EPS Reported GAAP Results $43,387 $32,017 $1.43 Impairment of long-lived assets and other 21 16 - Fair value of
Slide 31: Reconciliation of Net Income to Adjusted EBITDA
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA Quarter Ended Quarter Ended ($ in thousands) 6/30/2024 6/30/2023 Net income $32,017 $31,964 Interest expense 2,205 1,282 Income tax expense 10,108 10,804 Depreciation and amortization 5,329 5,319 Sha
Slide 32: Net Debt Leverage Ratio
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET DEBT LEVERAGE RATIO Quarter Ended Quarter Ended Quarter Ended Quarter Ended TTM1 ($ in thousands) 9/30/2023 12/31/2023 3/31/2024 6/30/2024 6/30/2024 Net income $13,088 $31,046 $20,584 $32,017 $96,735 Interest expense 2,353 2,017 2,019 2,205 8,
Slide 33: Description of Non-GAAP Items
DESCRIPTION OF NON-GAAP ITEMS • MGP Earnings is defined as “Net Income used in Earnings Per Common Share calculation” • The tax rate used for non-GAAP items for the quarter ended June 30, 2024 was 24.0% • The impairment of long-lived assets and other relates to miscellaneous expenses incurred in con
Slide 34: Quarterly GAAP Results
QUARTERLY GAAP RESULTS Consolidated Sales Change vs Prior Year (Quarter Ended 6/30/2024) $MM $MM % Distilling Solutions $93.4 $(23.5) (20)% Branded Spirits 64.0 6.4 11 Ingredient Solutions 33.4 (1.1) (3) MGP Ingredients $190.8 $(18.2) (9)% EPS Drivers1 Operating Income Drivers Second Quarter 2023-24
Slide 35: Impact of the Closure of the Atchison Distillery: Consolidated
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – CONSOLIDATED (1) Represents actual results of the Company for the quarter Change ended June 30, 2024, as reported in the Company’s Quarter Ended 6/30/2024 Quarterly Report on Form 10-Q for the quarter ended (in thousands)
Slide 36: Impact of the Closure of the Atchison Distillery: Distilling Solutions
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – DISTILLING SOLUTIONS Change (1) Represents actual results of the Company for the quarter Quarter Ended June 30, 2024 ended June 30, 2024, as reported in the Company’s (in thousands) As Reported(1) Pro-Forma(3) $ % Quarter
Slide 37: Impact of the Closure of the Atchison Distillery: Ingredient Solutions
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – INGREDIENT SOLUTIONS Change (1) Represents actual results of the Company for the quarter ended June 30, 2024, as reported in the Company’s Quarter Ended 6/30/2024 (in thousands) As Reported(1) Pro-Forma(3) $ % Quarterly R
Slide 38: Impact of the Closure of the Atchison Distillery: Consolidated 2022
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – CONSOLIDATED (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) Pro-Fo
Slide 39: Impact of the Closure of the Atchison Distillery: Distilling Solutions 2022
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – DISTILLING SOLUTIONS Change (1) Represents actual results of the Company for the year 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
Slide 40: Impact of the Closure of the Atchison Distillery: Ingredient Solutions 2022
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – INGREDIENT SOLUTIONS Change (1) Represents actual results of the Company for the year ended December 31, 2022, as reported in the Company’s Annual Report Year Ended 12/31/2022 As Reported(1) Pro-Forma(3) $ (5) % on Form 1