Mgp Ingredients, Inc. · NASDAQ:MGPI
Mgp Ingredients — Q3 2024 Earnings Presentation
21 slides from Mgp Ingredients's earnings presentation, October 2024
Slide 1: Investor Presentation Third Quarter 2024
INVESTOR PRESENTATION Third Quarter 2024 October 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 capital allocation priorities of MGP Ingredients, Inc. (the “C
Slide 3: Third Quarter 2024 Results
THIRD QUARTER 2024 RESULTS WEAK QUARTERLY PERFORMANCE DRIVEN PRIMARILY BY BROWN GOODS AND INGREDIENT SOLUTIONS HEADWINDS • Consolidated sales decreased 14% to $161.5 million(1) • Softening whiskey consumption and elevated industry-wide barrel whiskey inventories had a larger and quicker than expecte
Slide 4: Third Quarter Sales Were Below Expectations
THIRD QUARTER SALES WERE BELOW EXPECTATIONS THIRD QUARTER SALES DECREASED BY 14%, EXCLUDING THE IMPACT OF THE ATCHISON DISTILLERY • Distilling Solutions segment* sales decreased 18% Change vs Prior Year Consolidated Sales, excluding to $71.9 million, driven by lower brown goods sales Atchison distil
Slide 5: Lower Profitability Primarily Due to Brown Goods Decline
LOWER PROFITABILITY PRIMARILY DUE TO BROWN GOODS DECLINE Adjusted Gross Profit Drivers(1) Adjusted EPS Drivers(2) Third Quarter 2023-24 ($MM) Third Quarter 2023-24 ($MM) $75.8 $1.36 $3.4 $0.04 $0.01 $1.29 $65.8 $0.01 ($8.7) ($0.01) ($0.12) ($4.7) Q3 2023 Distilling Solutions GP Ingredient Solutions
Slide 6: Distilling Solutions
DISTILLING SOLUTIONS BROWN GOODS SALES WEAKNESS DUE TO LOWER AGED AND NEW DISTILLATE SALES Change vs Prior Year Distilling Solutions (excluding Atchison distillery) (Quarter ended 9/30/2024) $MM $MM % Change Brown goods $57.1 $(16.3) (22)% Warehouse services 8.3 0.9 12 White goods and other co-produ
Slide 7: Branded Spirits
BRANDED SPIRITS PREMIUM PLUS GROWTH OFFSET BY THE PLANNED OPTIMIZATION IN MID AND VALUE PRICE TIER BRANDS Change vs Prior Year Branded Spirits (Quarter ended 9/30/2024) $MM $MM % Premium plus $31.1 $0.2 1% Mid 14.8 (2.9) (16) Value 10.0 (1.0) (9) Other 6.7 (0.6) (8) Sales $62.6 $(4.2) (6)% Gross Pro
Slide 8: Ingredient Solutions
INGREDIENT SOLUTIONS LOWER SPECIALTY PROTEIN AND COMMODITY STARCHES PRESSURED QUARTERLY SEGMENT SALES Change vs Prior Year Ingredient Solutions (excluding Atchison distillery) (Quarter ended 9/30/2024) $MM $MM % Specialty wheat starches $16.2 $(1.0) (6)% Specialty wheat proteins 7.8 (3.7) (32) Commo
Slide 9: Revised 2024 Financial Guidance
REVISED 2024 FINANCIAL GUIDANCE Full Year 2024 Revised Guidance1 Sales $695 million to $705 million Adjusted EBITDA2 $196 million to $200 million Adjusted basic EPS $5.55 to $5.65 Effective tax rate ~ 24% Basic weighted average shares outstanding ~ 22.1 million Capital expenditures ~ $78 million 1 G
Slide 10: 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 $290 million 1.5x and a cash position of $21 million, as of 1.3x September 30, 2024 1.3x 1.0x • Excellent access to capital with total availabil
Slide 11: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Capital Allocation to Prioritize Organic and Inorganic Growth • M&A - Focused on alcohol spirits brands • Capital Expenditures – Invest in initiatives to support our growth and strengthen our competitive positioning • Whiskey Put-Away – American whiskey put-away for agi
Slide 12: Appendix
MGP APPENDIX
Slide 13: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET INCOME TO ADJUSTED EBITDA AND NET DEBT LEVERAGE RATIO ($ 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 30,279 31,300 34,616 Depreciation an
Slide 14: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES FOR THE QUARTERS ENDED SEPTEMBER 30, 2024 AND 2023 Quarter Ended September 30, 2024 (in thousands) Operating Income Net Income Basic and Diluted EPS Reported GAAP Results $32,564 $23,862 $1.07 Fair value of contingent consideration 6,400 4,864 0.2
Slide 15: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA Quarter Ended Quarter Ended ($ in thousands) 9/30/2024 9/30/2023 Net income $23,862 $13,088 Interest expense 2,174 2,353 Income tax expense 7,554 4,373 Depreciation and amortization 5,680 5,782 Share
Slide 16: Reconciliation of Selected GAAP to Non-GAAP Measures
RECONCILIATION OF SELECTED GAAP TO NON-GAAP MEASURES NET DEBT LEVERAGE RATIO Quarter Ended Quarter Ended Quarter Ended Quarter Ended TTM1 ($ in thousands) 12/31/2023 3/31/2024 6/30/2024 9/30/2024 9/30/2024 Net income $31,046 $20,584 $32,017 $23,862 $107,509 Interest expense 2,017 2,019 2,205 2,174 8
Slide 17: Description of Non-GAAP Items
DESCRIPTION OF NON-GAAP ITEMS • The tax rate used for non-GAAP items for the quarter ended September 30, 2024 was 24.0% • The impairment of long-lived assets and other relates to impairment of assets as well as miscellaneous expenses incurred in connection with the closure of the Atchison distillery
Slide 18: Quarterly GAAP Results
QUARTERLY GAAP RESULTS Consolidated Sales Change vs Prior Year (Quarter Ended 9/30/2024) $MM $MM % Distilling Solutions $71.9 $(39.9) (36)% Branded Spirits 62.6 (4.2) (6) Ingredient Solutions 26.9 (6.0) (18) MGP Ingredients $161.5 $(50.2) (24)% Gross Profit Drivers EPS Drivers1 Third Quarter 2023-24
Slide 19: Impact of the Closure of the Atchison Distillery
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 September 30, 2024, as reported in the Company’s Quarter Ended 9/30/2024 Quarterly Report on Form 10-Q for the quarter ended (in thous
Slide 20: Impact of the Closure of the Atchison Distillery
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 September 30, 2024 ended September 30, 2024, as reported in the Company’s (in thousands) As Reported(1) Pro-Forma(3) $
Slide 21: Impact of the Closure of the Atchison Distillery
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 September 30, 2024, as reported in the Company’s Quarter Ended 9/30/2024 (in thousands) As Reported(1) Pro-Forma(3) $ % Quarte