MGP Ingredients (NASDAQ: MGPI) reported Q2 EPS of $0.54, $0.06 better than the analyst estimate of $0.48. Revenue for the quarter came in at $92.6 million versus the consensus estimate of $93.42 million.

2020 second quarter results compared to 2019 second quarter results

• Consolidated sales increased 2.3% to $92.6 million, reflecting a 1.6% increase in the Distillery Products segment and a 5.4% increase in the Ingredient Solutions segment.
• Consolidated gross profit increased 6.0% to $20.7 million, due to increased gross profit in the Ingredient Solutions segment, partially offset by a $1.7 million impact of a cyberattack that temporarily disrupted production at the Atchison facilities.
• Consolidated operating income increased 4.3% to $11.3 million due to increased gross profit in the Ingredient Solutions segment, partially offset by decreased gross profit in the Distillery Products segment. Further offsetting the increase in operating income were the impacts from the aforementioned cyberattack, as well as increased corporate selling, general and administrative expenses.
• Non-GAAP operating income increased 11.5% to $12.1 million, exclusive of CEO transition costs.
• Earnings per share ("EPS") increased to $0.50 per share from $0.46 per share, reflecting improved operating results.
• Non-GAAP EPS increased to $0.54 per share from $0.46 per share, exclusive of CEO transition costs.

“We remain encouraged by the demand for our products, the improved financial results, as well as a strong balance sheet with ample liquidity to weather the challenges and uncertainty related to the COVID-19 pandemic,” said David Colo, president and CEO of MGP Ingredients. “The results this quarter reflect strong demand for our aged whiskey as well as solid growth in our Ingredient Solutions business.

“This quarter, MGP was the target of a cyberattack that temporarily disrupted production at our Atchison facilities. We have since resumed normal operations and while there was no evidence that any sensitive or confidential data breach occurred, we have since implemented a variety of measures to further enhance our cybersecurity protections.”

Distillery Products Segment - Strong Aged Brown Goods SalesIn the second quarter of 2020, sales for the Distillery Products segment increased 1.6% to $75.2 million, primarily driven by strong sales of aged brown goods and an 11.2% increase in sales of industrial alcohol, partially offset by a decrease in new distillate brown goods sales. Gross profit slightly declined to $16.0 million or 21.3% of segment sales, compared to $16.5 million, or 22.3% of segment sales in the second quarter 2019.

“We are very pleased with the improved performance of our aged whiskey sales this quarter, representing strong double-digit revenue growth from the prior year period,” said Colo. “Despite the uncertainty caused by the pandemic at the retail level and potential challenges to specific customers, we believe the underlying macro consumer trend supporting the ongoing growth of the American Whiskey category remains strong. These encouraging macro trends provide confidence as some new distillate customers worked through elevated inventory levels during the quarter, reflecting a year-over-year decline in new distillate brown goods sales.

“Demand for industrial alcohol remains strong during the COVID-19 pandemic as we continue to help customers navigate the challenges they are confronted with during these difficult times. We believe the increased demand for our industrial alcohol products will continue throughout the balance of the year and into 2021.”

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