MGP Ingredients (MGPI) Tops Q1 EPS by 25c; Withdraws Guidance

MGP Ingredients (NASDAQ: MGPI) reported Q1 EPS of $0.61, $0.25 better than the analyst estimate of $0.36. Revenue for the quarter came in at $99.1 million versus the consensus estimate of $87.67 million.

“We are very pleased with our results this quarter, which reflect strong customer demand in both business segments and improved effectiveness in our tactical execution,” said Gus Griffin, CEO of MGP Ingredients. “As the COVID-19 pandemic continues to create a period of uncertainty and potential challenges, we remain committed to responding to these challenges while ensuring the safety and well-being of our employees.”

GUIDANCE:

While we are off to a strong start to the year, with ample access to capital and encouraging customer demand, our financial results for the balance of the year could be impacted by the COVID-19 virus,” said David Colo, president and COO of MGP Ingredients. “Given the uncertainty this pandemic has caused for nearly every industry across the world, it is impossible to predict with any level of precision the pandemic’s cumulative impact on our future financial results. For these reasons, we are withdrawing our previous 2020 guidance and will reassess this position based on the visibility of the macroeconomic recovery.”

Conclusion“Our pandemic response plan, which is designed to accommodate evolving information and guidance provided by government agencies and health officials, focuses on protecting our employees and customers and doing our part to help stop the spread of the virus,” continued Colo. “The aggressive implementation of our strategic plan put in place by Gus over the past several years has positioned MGP for sustainable long-term growth. Moving forward, our management team will be focused on continually refining the effectiveness of our tactical execution, accelerating the pace of our strategic implementation and leveraging the strong foundation we have built for growth in 2020 and beyond.

“Our balance sheet and access to capital continue to be strong while we seek to optimize cash management during this pandemic. We remain well capitalized and drew down additional funds on our revolving credit facility during the quarter to maintain a conservative cash position. The investment spend related to our warehouse expansion plan now totals approximately $49.7 million of the projected total investment of $49.8 million. Additionally, our investment in aged whiskey inventory grew to $111.4 million, at cost. The positive brown goods results this quarter continue to demonstrate the long-term value of our aged whiskey inventory.

“We were pleased to announce the acquisition of New Columbia Distillers, based in Washington, D.C., during the quarter and we’re thrilled to add the Green Hat Gin brand to our award-winning portfolio. This acquisition enhances the depth of expertise and commitment to the category we’ve developed over the years. We continue to develop our existing markets, focusing on increased retail distribution and velocity per point of distribution for our portfolio of brands. Although the current environment is not generally conducive to M&A activity, we will continue to assess opportunities to strengthen our position in growing markets in concert with our financial position in the coming quarters.”

For earnings history and earnings-related data on MGP Ingredients (MGPI) click here.

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