Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Investor Presentation (May 2024)
44 slides from Mgp Ingredients's investor presentation, May 2024
Slide 1: Investor Presentation First Quarter 2024
INVESTOR PRESENTATION First Quarter 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: 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 $837MM for the year ended December 31, 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 distill
Slide 5: Distilling Solutions: A Leading Supplier of Distilled Spirits
DISTILLING SOLUTIONS A LEADING SUPPLIER OF DISTILLED SPIRITS TO THIRD PARTIES 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 aged by customers from two to four yea
Slide 6: Distilling Solutions: Unique Expertise Positions Us as Preferred Partner
DISTILLING SOLUTIONS UNIQUE EXPERTISE POSITIONS US AS THE PREFERRED PARTNER TO OUR CUSTOMERS Lawrenceburg, IN Operations • Ross & Squibb Distillery Scale provides competitive pricing • Top-5 American Whiskey producer • One of the largest U.S. suppliers of rye whiskey • Bourbon Capacity supports long
Slide 7: Distilling Solutions: Well Positioned for Growth in U.S. Spirits
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 Beer Sp
Slide 8: Distilling Solutions: Four Strategies for Long-Term Growth
DISTILLING SOLUTIONS FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE DISTILLING SOLUTIONS SEGMENT Distilling Solutions Growth Strategy American Whiskey is Underdeveloped Outside U.S. 1. Further develop our existing customer • Exports expected to be a key driver of long-term growth
Slide 9: Customer Evolution into New Distillate Provides Long-Term Stability
DISTILLING SOLUTIONS CUSTOMER EVOLUTION INTO NEW DISTILLATE PROVIDES LONG-TERM STABILITY AND SUSTAINABILITY New Distillate Sales Benefits 1. Attractive gross margin profile Brown Goods Revenue & Majority Type (Dollars are in ‘000’s) 2. Typically made to customers whose $289,191 brands are more sizea
Slide 10: Progress of Brown Goods Focus Strategy, Closure of Atchison Distillery
DISTILLING SOLUTIONS PROGRESS OF "BROWN GOODS FOCUS" STRATEGY, CLOSURE OF ATCHISON DISTILLERY • Due to their lower relative gross margin Brown Goods as a Percentage of Total Segment Sales profiles, white goods and industrial alcohol and Distilling Solutions Gross Margin sales have been de-emphasized
Slide 11: Impacts of Planned Closure of Atchison Distillery
DISTILLING SOLUTIONS IMPACTS OF THE PLANNED CLOSURE OF THE ATCHISON DISTILLERY ON THE CONSOLIDATED BUSINESS Pro-Forma Results(1), excluding the Atchison Distillery Overview of One-Time Expenses Consolidated Incurred one-time aggregate pre-tax charges of approximately FY 2022 FY 2023 $19.4 million in
Slide 12: Branded Spirits: Established Portfolio of High Margin Brands
BRANDED SPIRITS AN ESTABLISHED PORTFOLIO WITH A FOCUS ON GROWING HIGH POTENTIAL, HIGH MARGIN 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 Books Bourbon, Dos Primos T
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 +95% CORE BRANDS LIMITED RELEASES Source: Nielsen 52 weeks Sales CY All Growth Trend by American Whiskey Spirits Category thru March 23, 202
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: 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: Four Strategies for Branded Spirits Growth
BRANDED SPIRITS FOUR STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE BRANDED SPIRITS SEGMENT Branded Spirits Growth Strategy Focus on the Right Marketing Support 1. Points of distribution expansion • Paid Social (Facebook, 2. Increase innovation AWARENESS Instagram) • Online/Streaming
Slide 18: Ingredient Solutions: Leading Supplier of Specialty Wheat Starches & Proteins
INGREDIENT SOLUTIONS A LEADING SUPPLIER OF SPECIALTY WHEAT STARCHES & PROTEINS 2023 Total Revenue of $132MM Products consist of the following: $1 • Specialty Wheat Starches: Premium wheat starches sold to food processors and distributors, a substantial portion of $17 which are modified for special a
Slide 19: Strongly Positioned to Serve Specialty Plant-Based Markets
INGREDIENT SOLUTIONS STRONGLY POSITIONED TO SERVE SPECIALTY PLANT-BASED MARKETS • High protein diet tops the list as the most common diet pattern, while plant- based eating has dropped to seventh place, down from fourth place last year. 1 • 19% of consumers surveyed eat more plant-based meat and sea
Slide 20: Three Strategies for Ingredient Solutions Growth
INGREDIENT SOLUTIONS THREE STRATEGIES TO CONTINUE DELIVERING LONG-TERM GROWTH WITHIN THE INGREDIENT SOLUTIONS SEGMENT Ingredient Solutions Growth Strategy Top Nutrients Americans are Seeking to Consume* 1. Expand and optimize our dietary fiber, 67% Protein plant proteins and clean label starches 61%
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 • Products: Expand Fibersym RW dietary fiber, clean label starch pregels, and Arise wheat protein isolates • Allows formulators to boost the fiber content and to lo
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 • Product: Introduce new and innovative textured plant proteins, and Ingredients Inclusions, created from a variety U.S. 291 539 637 772 817 of plant sources desi
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 33% from 2019 to 2023 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 ou
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 ($) $837 $5.90 $782 $4.94 $627 $4.26 $363 $396 $2.51 $2.27 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Adjusted EBITDA1 ($MM) FY 2024 Guidance2 Sales are projected
Slide 27: Strong Balance Sheet, Cash Flow, and Access to Capital
STRONG BALANCE SHEET, CASH FLOW, AND EXCELLENT ACCESS TO CAPITAL Adjusted EBITDA less CapEx and Conversion 1 $154.8 Adjusted EBITDA less CapEx • MGP has seen strong, consistent improvement in adjusted EBITDA1 $129.5 Adjusted EBTIDA less CapEx as a percentage of less capital expenditures (“CapEx”) Ad
Slide 28: Capital Allocation Priorities Focused on Growth Opportunities
CAPITAL ALLOCATION PRIORITIES REMAIN FOCUSED ON GROWTH OPPORTUNITIES Capital Allocation Priorities M&A • M&A will continue to be an important lever to increase our capabilities, margin up our portfolios, and accelerate growth in Branded Spirits. Capital Expenditures • In addition to maintenance and
Slide 29: Consolidated Financial Results – Q1 2024
CONSOLIDATED FINANCIAL RESULTS – Q1 2024 Q1 RESULTS IN LINE WITH EXPECTATIONS • Due to the Atchison distillery closure, sales decreased 15% to Operating Income Drivers First Quarter 2023-24 ($MM) $170.6 million. Excluding the impact of the Atchison distillery in both periods, consolidated sales were
Slide 30: Consolidated Sales
CONSOLIDATED SALES SALES WERE DOWN 15% WITH A SALES DECLINE IN THE DISTILLING SOLUTIONS AND BRANDED SPIRITS SEGMENTS, PARTIALLY OFFSET BY AN INCREASE IN INGREDIENT SOLUTIONS SEGMENT SALES Key Drivers • Distilling Solutions declined primarily due to decreased sales of white goods Consolidated Sales C
Slide 31: Distilling Solutions Sales Decrease
DISTILLING SOLUTIONS DECREASED SALES OF WHITE GOODS AND OTHER CO-PRODUCTS RELATED TO THE CLOSURE OF THE ATCHISON DISTILLERY Distilling Solutions Sales Change vs Prior Year (Quarter ended 3/31/2024) $MM $MM % Brown Goods $66.3 $(2.0) 3% Warehouse Services 8.0 1.1 16 White goods and other co-products
Slide 32: Branded Spirits Sales Decrease
BRANDED SPIRITS DECREASED SALES OF BRANDS WITHIN MID AND VALUE PRICE TIERS PRIMARILY DUE TO THE 2023 DISTRIBUTOR REALIGNMENT Branded Spirits Sales Change vs Prior Year (Quarter ended 3/31/2024) $MM $MM % Premium plus $20.9 $2.2 12% Mid 14.8 (6.1) (29) Value 10.0 (3.4) (25) Other 4.5 0.6 15 Total Bra
Slide 33: Ingredient Solutions Sales Increase
INGREDIENT SOLUTIONS INCREASED SALES VOLUME OF SPECIALTY WHEAT STARCHES Ingredient Solutions Sales Change vs Prior Year (Quarter ended 3/31/2024) $MM $MM % Specialty wheat starches $22.3 $7.6 52% Specialty wheat proteins 10.0 (1.9) (16) Commodity wheat starches 3.3 (0.5) (14) Commodity wheat protein
Slide 34: Appendix
MGP APPENDIX
Slide 35: U.S. Spirits Market
U.S. SPIRITS MARKET 9-Liter Cases (000s) 2023 Volume % Change Y/Y Total Distilled Spirits (TDS) 308,807 +1.2% Total Whiskey 74,591 -4.2% American Whiskey (Bourbon/Rye/Tennessee) 31,110 -0.4% Super Premium 5,655 +4.0% Rye (1) 1,730 +8.6% Vodka 74,908 -2.6% Super Premium 5,377 +4.2% Gin 8,977 -8.7% Su
Slide 36: Reconciliation: Branded Spirits Gross Profit to Adjusted Gross Profit
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES BRANDED SPIRITS GROSS PROFIT TO ADJUSTED GROSS PROFIT1 - UNAUDITED Branded Spirits segment ($ 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 Profit1 $1,536
Slide 37: 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 SHARE1 - UNAUDITED 2019 2020 2021 2022 2023 Basic EPS $2.27 $2.37 $4.37 $4.94 $4.82 Impairment of long-lived assets and other - - - - 0.66 Fair value of contingent consi
Slide 38: Reconciliation: Net Income to Adjusted EBITDA and Less CapEx
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA1 AND ADJUSTED EBITDA1 LESS CAPITAL EXPENDITURES2 - UNAUDITED ($ in thousands) 2019 2020 2021 2022 2023 Net Income $38,793 $40,345 $90,817 $108,872 $107,130 Interest 1,305 2,267 4,037 5,451 6,647 Taxes 7,144 12,256 30,
Slide 39: Reconciliation of Debt to Net Debt
RECONCILIATION OF DEBT TO NET DEBT ($ 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 39
Slide 40: Reconciliation: Quarters Ended March 31, 2024 and 2023
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES FOR THE QUARTERS ENDED MARCH 31, 2024 AND 2023 Operating Net Diluted Quarter Ended March 31, 2024 (in thousands) Basic EPS Income Income EPS Reported GAAP Results $28,917 $20,584 $0.92 $0.92 Impairment of long-lived assets and other 116 89 - - Fai
Slide 41: Reconciliation of Net Income to Adjusted EBITDA (Quarterly)
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA1 Quarter Ended Quarter Ended ($ in thousands) 3/31/2024 3/31/2023 Net income $20,584 $31,032 Interest expense 2,019 995 Income tax expense 6,262 9,655 Depreciation and amortization 5,289 5,171 Share
Slide 42: Impact of Atchison Closure: Pro-Forma Consolidated
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – CONSOLIDATED Change (1) Represents actual results of the Company for the Quarter Ended 3/31/2024 quarter ended March 31, 2024, as reported in the (in thousands) As Reported(1) Pro-Forma(3) $ % Company’s Quarterly Report o
Slide 43: Impact of Atchison Closure: Pro-Forma 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 ended March 31, 2024, as reported in the As Company’s Quarterly Report on Form 10-Q for the $ % Quarter Ended March 31, 2024 (in tho
Slide 44: Impact of Atchison Closure: Pro-Forma Ingredient Solutions
IMPACT OF THE CLOSURE OF THE ATCHISON DISTILLERY UNAUDITED PRO-FORMA RESULTS – INGREDIENT SOLUTIONS (1) Represents actual results of the Company for the Change quarter ended March 31, 2024, as reported in the Quarter Ended 3/31/2024 Company’s Quarterly Report on Form 10-Q for the (in thousands) As R