MGP Ingredients, Inc., a leading provider of distilled spirits, branded spirits, and food ingredient solutions, reported results for the third quarter that ended September 30, 2022.
2022 third quarter consolidated results compared to 2021 third quarter
- Sales increased 14% to $201.2 million due to record third-quarter sales across all three business segments.
- Gross profit increased by 3% to $59.1 million, representing 29.4% of sales.
- Operating income increased by 3% to $33.9 million. Adjusted operating income increased by 2% from $33.2 million.
- Net income decreased slightly to $23.6 million. Adjusted net income decreased by 1% from $23.9 million.
- Adjusted EBITDA increased by 1% to $38.7 million.
- Basic earnings per common share (“EPS”) decreased to $1.07 per share from $1.08 per share. Adjusted basic EPS decreased to $1.07 per share from $1.09 per share.
- Diluted EPS decreased to $1.06 per share from $1.08 per share. Adjusted diluted EPS decreased to $1.06 per share from $1.09 per share.
In the third quarter of 2022, sales for the Distilling Solutions segment increased 19% to a record $108.6 million, reflecting a 22% increase in sales of premium beverage alcohol. Gross profit decreased to $25.9 million, or 23.9% of segment sales, compared to $27.0 million, or 29.6% of segment sales in the third quarter of 2021.
For the third quarter of 2022, sales for the Branded Spirits segment increased by 2% to a record $62.8 million. Gross profit increased to a record $25.1 million, or 39.9% of segment sales, compared to $23.2 million, or 37.7% of segment sales, in the third quarter of 2021.
In the third quarter of 2022, sales in the Ingredient Solutions segment increased by 24% to a record $29.7 million. Gross profit increased to $8.1 million, or 27.1% of segment sales, compared to $6.9 million, or 28.7% of segment sales, in the third quarter of 2021.
Advertising and promotion expenses for the third quarter of 2022 increased $1.6 million, or 29%, to $7.3 million as compared to the third quarter of 2021, primarily driven by further incremental investment to support continued growth in the ultra-premium, super premium and premium price tier spirit brands.
Corporate selling, general and administrative (“SG&A”) expenses for the third quarter of 2022 decreased by $0.6 million to $17.9 million as compared to the third quarter of 2021.
The corporate effective tax rate for the third quarter of 2022 was 24.2%, compared with 24.5% from the year-ago period.
MGP is revising its previous consolidated guidance for fiscal 2022 upward:
- Sales are projected to be in the range of $765 million to $780 million.
- Adjusted EBITDA is expected to be in the range of $162 million to $167 million.
- Adjusted basic earnings per common share are forecasted to be in the $4.62 to $4.80 range, with basic weighted average shares outstanding expected to be approximately 22.0 million at year-end.
Full-year 2022 guidance measures of adjusted EBITDA and adjusted basic EPS are provided on a non-GAAP basis without reconciliation to the most directly comparable GAAP measures because MGP cannot reasonably predict certain items contained in the GAAP measures without unreasonable efforts. Such items include, but are not limited to, acquisition-related expenses, restructuring and related expenses, and other items not reflective of MGP’s ongoing operations.