MGP Ingredients Reports Third Quarter 2026 Results

Company reaffirms full-year 2026 guidance, declares $0.12 quarterly dividend and will become Sempreon, Inc. (Nasdaq: CASK) on November 2

ATCHISON, Kan.--(BUSINESS WIRE)-- MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of branded and distilled spirits and food ingredient solutions, which will change its name to Sempreon, Inc. and its ticker symbol to CASK on November 2, 2026, today reported results for the third quarter ended September 30, 2026. During the quarter, the company continued to execute against its strategic roadmap, reducing total debt by $28.4 million and delivering adjusted EBITDA and adjusted basic EPS ahead of its expectations.

“Our third quarter results show that we are doing what we said we would do. Our cash flow from operations was $32 million during the quarter, and adjusted EBITDA, adjusted basic EPS and ending net leverage each came in better than our expectations. As a result, we are reaffirming guidance,” said Julie Francis, president and CEO. “In Branded Spirits, Penelope Bourbon sales grew 12% and our mid-priced brands grew 6%. Distilling Solutions continued to navigate an oversupplied market and Ingredient Solutions grew sales by 5%. As we become Sempreon on November 2, our focus remains on executing our strategic roadmap in each of our three businesses, supported by our financial discipline and our strong right to win.”

Consolidated Results

Third quarter 2026 versus prior year

• Sales decreased by 10% to $117.9 million, primarily due to expected lower brown goods sales in Distilling Solutions and lower sales of international private label bottled products within the Branded Spirits’ other category, partially offset by higher Ingredient Solutions sales.
• Gross profit decreased 18% to $40.5 million and gross margin declined approximately 350 basis points to 34.3%, as higher waste starch stream costs in Ingredient Solutions, higher costs in Branded Spirits and lower brown goods volume more than offset lower distillation costs in Distilling Solutions.
• Operating income decreased 43% to $12.0 million. On an adjusted basis, operating income decreased by 44% to $14.0 million.
• Adjusted EBITDA decreased 33% to $21.5 million.
• Advertising and promotion expenses decreased 4% to $6.4 million, reflecting the timing of spend throughout the year as well as savings resulting from outside agency consolidation.
• Selling, general and administrative expense increased 14%, primarily due to a higher incentive compensation accrual, partially offset by cost savings initiatives. Adjusted SG&A increased 13% and represented 17% of consolidated sales.
• Net income was $6.9 million and basic EPS was $0.32. On an adjusted basis, net income and basic EPS were $8.6 million and $0.39 per share, respectively.
• Year-to-date operating cash outflows were $8.9 million, inclusive of $48.7 million of the Penelope earnout payment classified in operating activities; excluding that payment, year-to-date operating cash inflows were $39.8 million. The net debt leverage ratio was approximately 3.6x at September 30, 2026.

Branded Spirits

Third quarter 2026 versus prior year

• Sales of $58.2 million decreased 4% versus $60.7 million.
• Gross profit of $29.2 million decreased 9% versus $32.2 million.
• Gross margin of 50.2% decreased by 280 basis points versus 53.0%.

Key developments versus prior year

• Excluding the other products category, which consists primarily of international sales of private label bottled products, sales were in line with the prior year and were negatively impacted by distributor system cutovers.
• Premium plus sales decreased by 1%. Penelope Bourbon sales increased 12%.
• Combined sales of the mid- and value-priced portfolios improved slightly, with mid-priced offerings growing 6%, led by Ezra Brooks 90 Proof, Exotico tequila and Juarez tequila.

Distilling Solutions

Third quarter 2026 versus prior year

• Sales of $29.0 million decreased 29% versus $40.9 million.
• Gross profit of $9.4 million decreased 34% versus $14.2 million.
• Gross margin of 32.4% decreased by 230 basis points versus 34.7%.

Key developments versus prior year

• As expected, elevated industry-wide barrel inventories resulted in a 47% decline in brown goods sales.
• Sales of white goods and other co-products increased 32% primarily due to higher sales volumes.
• Warehouse services revenue increased 3%.
• Higher white goods production volumes and cost savings initiatives led to lower distillation costs, partially offsetting the impact of lower brown goods sales.

Ingredient Solutions

Third quarter 2026 versus prior year

• Sales of $30.8 million increased 5% versus $29.3 million.
• Gross profit of $1.8 million decreased 39% versus $3.0 million.
• Gross margin of 6.0% decreased 430 basis points versus 10.3%.

Key developments versus prior year

• Sales growth was driven by higher sales of specialty wheat proteins, including textured proteins, and biofuel and other byproducts, partially offset by lower specialty wheat starch sales volumes primarily due to longer-than-expected downtime following a scheduled plant shutdown.
• Higher waste starch stream costs pressured profitability, partially offset by an initial insurance recovery payment related to a 2025 equipment outage.

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.
• An effective tax rate of approximately 23%.
• Full-year capital expenditures expected to be approximately $20 million.

Dividend Distribution

The company’s Board of Directors declared a dividend of $0.12 per share of common stock. The dividend is payable on November 27, 2026, to stockholders of record as of November 13, 2026.

Corporate Name Change and Ticker Change

As announced on October 15, 2026, the company’s name will change to Sempreon, Inc. and its Nasdaq ticker symbol will change to “CASK” effective November 2, 2026. The company’s CUSIP number will remain unchanged.

Conference Call and Webcast Information

MGP Ingredients will host a conference call today at 10 a.m. ET, October 28, 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. On November 2, 2026, MGP Ingredients, Inc. will become Sempreon, Inc. 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 execute its roadmap; and the Company’s 2026 outlook, including its expectations for sales, adjusted EBITDA, adjusted basic earnings per share (“EPS”), shares outstanding, tax rate, and capital expenditures. 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 quarters ended March 31, June 30, and September 30, 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.

The non-GAAP adjusted EBITDA measure is defined as earnings before interest expense, income tax expense (benefit), depreciation and amortization, share based compensation, equity method investment gain, executive transition costs, restructuring and other costs, impairment and other, fair value of contingent consideration, and professional service fees.

See "Reconciliation of selected GAAP measure to adjusted non-GAAP measures" for further details on selected non-GAAP items.

See "Reconciliation of selected GAAP measure to adjusted non-GAAP measures" for further details on selected non-GAAP items.