MGP Ingredients Reports Second Quarter 2026 Results

Company reaffirms full-year 2026 guidance and declares $0.12 quarterly dividend

ATCHISON, Kan., July 29, 2026--(BUSINESS WIRE)--MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of branded and distilled spirits and food ingredient solutions, today reported results for the second quarter ended June 30, 2026. During the quarter, MGP executed against its strategic roadmap, and the company continued to strengthen and revamp its sales, marketing and supply chain functions, while adding specific capabilities to address new and existing growth opportunities. The company also continued to drive progress across the business, by eliminating waste, driving efficiencies and maximizing effectiveness through the implementation of its ownership cost management initiative.

Key Second Quarter Metrics

"I'm pleased with our second quarter results, as adjusted EBITDA and adjusted basic EPS came in ahead of our expectations. These results reflect continued momentum in our premium plus portfolio, led by Penelope Bourbon and Yellowstone, and an improvement in select mid- and value-priced brands. We also delivered sales growth in Ingredient Solutions, which reflects both continued strong customer demand and improvements in operational reliability," said Julie Francis, president and CEO. "Our second quarter results are a reflection of our efforts to drive long-term growth across all three of our businesses and to deliver value creation, even as we continue to navigate a challenging industry backdrop. As we move through the second half of 2026, we will maintain our strategic roadmap and drive our key growth initiatives, while prioritizing our best opportunities for growth, taking decisive actions and executing with discipline."

Consolidated Results

Second quarter 2026 versus prior year

• Sales and gross profit decreased by 15% and 20%, respectively, primarily due to expected declines in brown goods sales in Distilling Solutions, which were partially offset by higher Ingredient Solutions sales.

• While Branded Spirits and Distilling Solutions delivered gross margin improvement, consolidated gross margin declined ~270 basis points, as higher waste starch stream costs in Ingredient Solutions pressured profitability.

• Operating income decreased to $17.7 million, as growth in Branded Spirits was offset by expected reductions in Distilling Solutions and Ingredient Solutions and was impacted by an increase in provision for credit loss related to a customer bankruptcy. On an adjusted basis, operating income decreased by 30% to $20.1 million.

• Adjusted EBITDA decreased 23% to $27.6 million.

• Advertising and promotion expenses decreased 18% to $5.7 million, primarily due to the timing of spend throughout the year, which has been aligned with the company's strategic roadmap and focused on the most attractive growth opportunities.

• Selling, general and administrative expense declined 13%, while adjusted SG&A decreased 19% and represented 15% of consolidated sales, as cost savings efforts continued to expand.

• Net income was $12.0 million and basic EPS was $0.55 for the second quarter. On an adjusted basis, second quarter net income and basic EPS were $15.8 million and $0.72 per share, respectively.

Branded Spirits

Second quarter 2026 versus prior year

• Sales of $59.6 million decreased 1% versus $60.5 million.

• Gross profit of $31.6 million decreased 1% versus $32.0 million.

• Gross margin of 53.0% increased by 20 basis points versus 52.8%.

Key developments versus prior year

• Excluding the other products category, which consists primarily of private label bottled products, sales increased 3% and reflected the highest growth rate in the past two years.

• Premium plus sales increased by 5%, with key brands showing improvement, as the company's targeted focus on growth opportunities continued to gain traction.

• Within premium plus, Penelope Bourbon maintained its strong growth trajectory and was up 13%. Yellowstone also saw significant growth, driven by an innovative, limited edition offering.

• Combined sales of the mid- and value-priced portfolios improved slightly, with mid-priced offerings growing 5%. The company continued to successfully prioritize its best performing brands in these price tiers.

Distilling Solutions

Second quarter 2026 versus prior year

• Sales of $29.2 million decreased 42% versus $50.0 million.

• Gross profit of $11.3 million decreased 40% versus $18.8 million.

• Gross margin of 38.7% increased by 110 basis points versus 37.6%.

Key developments versus prior year

• As expected, lower demand for aged and new distillate whiskey continued to pressure results and drove a 59% decline in brown goods sales.

• Gross margin improved, due to better mix and cost savings efforts.

• Warehouse services revenue increased by high-single digits and was driven, in part, by expanded service offerings.

Ingredient Solutions

Second quarter 2026 versus prior year

• Sales of $35.5 million increased 2% versus $35.0 million.

• Gross profit of $3.6 million decreased 53% versus $7.6 million.

• Gross margin of 10.1% decreased versus 21.7%.

Key developments versus prior year

• Sales improvement was primarily driven by favorable price and mix of specialty wheat proteins and starches, as well as increased sales of biofuel and other byproducts.

• Despite improvements in operational reliability, higher waste starch stream costs pressured profitability.

2026 Financial Outlook

MGP reaffirmed its consolidated guidance for fiscal 2026:

• Sales projected to be in the range of $480 million to $500 million.

• Adjusted EBITDA expected to be between $90 million to $98 million.

• Adjusted basic EPS expected to be in the $1.50 to 1.80 range, with weighted average basic shares outstanding of approximately 21.4 million.

• Full-year capital expenditures expected to be approximately $20 million.

Due to a recent revision to 2025 Kansas tax law, which resulted in the revaluation of deferred tax liabilities, the company now anticipates its full year 2026 effective tax rate will be approximately 23%.

Dividend Distribution

The company's Board of Directors declared a dividend of $0.12 per share of common stock. The dividend is payable on August 28, 2026, to stockholders of record as of August 14, 2026.

Conference Call and Webcast Information

MGP Ingredients will host a conference call today at 10 a.m. ET, July 29, 2026, to discuss the results, provide a general business update, and answer questions. Please visit the News and Events section of the company's Investor Relations website to access the webcast. Investors can also dial (844) 308-6398 or (412) 717-9605 (international) to listen to the call. A replay will be available on the company's website approximately 24 hours after the call concludes.

About MGP Ingredients, Inc.

MGP Ingredients Inc. (Nasdaq: MGPI) has been formulating excellence since 1941 by bringing product ideas to life across the alcoholic beverage and specialty ingredient industries through three segments: Branded Spirits, Distilling Solutions, and Ingredient Solutions. MGPI is one of the leading spirits distillers with an award-winning portfolio of premium brands including Penelope, Rebel, Remus, and Yellowstone bourbons and El Mayor tequila, under the Luxco umbrella. With distilleries in Indiana and Kentucky; a tequila distillery in Arandas, Mexico; and bottling operations in Missouri, Ohio, and Northern Ireland, the company creates distilled spirits for customers including many world-renowned spirits brands. In addition, the company's high-quality specialty fiber, protein, and starch ingredients provide functional, nutritional, and sensory solutions for a wide range of food products. To learn more visit MGPIngredients.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about the ability of MGP Ingredients, Inc. (the "Company" or "MGP") to drive growth initiatives, prioritize growth opportunities, take decisive actions, and execute with discipline; and the Company's 2026 outlook, including its expectations for sales, adjusted EBITDA, adjusted basic earnings per share ("EPS"), shares outstanding, capital expenditures, and tax rate. Forward looking statements are usually identified by or are associated with words such as "intend," "plan," "believe," "estimate," "expect," "anticipate," "project," "forecast," "hopeful," "should," "may," "will," "could," "encouraged," "opportunities," "potential," and similar terminology. These forward-looking statements reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance, Company financial results, and Company financial condition and are not guarantees of future performance.

All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially from our expectations include without limitation any effects of changes in consumer preferences and purchases and our ability to anticipate or react to those changes; our ability to compete effectively and any effects of industry dynamics and market conditions; unfavorable economic conditions; damage to our reputation or that of any of our key customers or their brands; failure to introduce successful new brands and products or have effective marketing or advertising; changes in public opinion about alcohol or our products; our reliance on our distributors to distribute our branded spirits; our reliance on fewer, more profitable customer relationships; interruptions in our operations or a catastrophic event at our facilities; decisions concerning the quantity of maturing stock of our aged distillate; any inability to successfully complete our capital projects or fund capital expenditures or any warehouse expansion issues; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; regulation and taxation and compliance with existing or future laws and regulations; tariffs, trade relations, and trade policies; excise taxes, incentives and customs duties; our ability to protect our intellectual property rights and defend against alleged intellectual property rights infringement claims; failure to secure and maintain listings in control states; labeling or warning requirements or limitations on the availability of our products; product recalls or other product liability claims; anti-corruption laws, trade sanctions, and restrictions; litigation or legal proceedings; limited rights of common stockholders and anti-takeover provisions in our governing documents; the impact of issuing shares of our common stock; higher costs or the unavailability and cost of raw materials, product ingredients, energy resources, or labor; failure of our information technology systems, networks, processes, associated sites, or service providers; inability to successfully implement our strategies; interest rate increases; reliance on key personnel; impairment charges; commercial, political, and financial risks; covenants and other provisions in our credit arrangements; pandemics or other health crises; ability to pay any dividends and make any share repurchases. For further information on these risks and uncertainties and other factors that could affect the Company's business, see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as well as the Company's other SEC filings. The Company undertakes no obligation to update any forward-looking statements or information in this press release, except as required by law.

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, the Company has disclosed adjusted selling, general, and administrative expenses ("SG&A"), adjusted operating income, adjusted income before income taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA, net debt, net debt leverage ratio, and adjusted basic and diluted EPS, as well as guidance for adjusted EBITDA and adjusted basic EPS. The presentation of these non-GAAP financial measures should be reviewed in conjunction with SG&A, operating income, income before income taxes, net income, net income used in earnings per common share calculation, debt, and basic and diluted EPS computed in accordance with U.S. GAAP and should not be considered a substitute for the GAAP measure. We believe that the 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 historical non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. Full year 2026 guidance measures of adjusted EBITDA and adjusted basic EPS are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include without limitation, acquisition related expenses, restructuring and related expenses, and other items not reflective of the Company's ongoing operations.