MGP Ingredients, Inc. (NASDAQ: MGPI) has reported its second-quarter results for 2024, showing a strong performance and reiterating full-year guidance. The company's CEO and President, David Bratcher, highlighted the strong results driven by the momentum in the premium plus branded spirits portfolio and solid brown goods sales.
In the second quarter of 2024, the company's sales decreased by 9% to $190.8 million, primarily due to the closure of the Atchison distillery. However, excluding the impact of the distillery closure, consolidated sales increased by 7% during the quarter. Net income remained largely flat at $32.0 million, while adjusted net income increased by 15% to $38.0 million. Adjusted EBITDA increased by 7% to $57.5 million, with the adjusted EBITDA margin reaching 30.2%, the highest quarterly adjusted EBITDA margin.
Basic earnings per common share ("EPS") decreased to $1.43 per share from $1.44 per share, but adjusted basic EPS increased by 15% to $1.71 per share from $1.49 per share. The company's capital expenditures were $22.6 million year-to-date, with a full-year expectation of approximately $85 million, including the construction of additional warehouses to support future growth. The net debt leverage ratio stands at approximately 1.4x as of June 30, 2024. MGP Ingredients has reiterated its full-year 2024 guidance, expecting sales in the range of $742 million to $756 million, adjusted EBITDA in the range of $218 to $222 million, and adjusted basic EPS in the range of $6.12 to $6.23.
When looking at the segmented results, the Distilling Solutions segment saw a 20% decrease in sales to $93.4 million due to the Atchison distillery closure. However, excluding the impact of the closure, segment sales increased by 9% to $93.3 million, driven by higher brown goods sales. The Branded Spirits segment experienced a sales increase of 11% to $64.0 million, primarily due to the ongoing momentum in the premium plus portfolio, with gross profit reaching a record-high $33.6 million. However, the Ingredient Solutions segment saw a 3% decrease in sales to $33.4 million, with gross profit also decreasing.
Some additional highlights include a 35% increase in advertising and promotion expenses, a 3% decrease in corporate selling, general, and administrative expenses, and a change in fair value of the contingent consideration related to the Penelope acquisition totaling $5.4 million.
MGP Ingredients has confirmed its consolidated guidance for fiscal 2024, projecting sales in the range of $742 million to $756 million and adjusted EBITDA in the range of $218 million to $222 million.
MGP Ingredients, Inc. is a leading producer of premium branded and distilled spirits, as well as food ingredient solutions. The company has distilleries in Kentucky and Indiana, and bottling operations in Missouri, Ohio, and Northern Ireland. It offers a wide range of brands in every segment, including iconic brands from Luxco, and its ingredient solutions segment offers specialty proteins and starches for a variety of food products. Following these announcements, the company's shares moved 0.2%, and are now trading at a price of $81.55. For more information, read the company's full 8-K submission here.
