Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 0-17196 | |
Entity Registrant Name | MGP INGREDIENTS, INC. | |
Entity Incorporation, State or Country Code | KS | |
Entity Tax Identification Number | 45-4082531 | |
Entity Address, Address Line One | 100 Commercial Street | |
Entity Address, City or Town | Atchison | |
Entity Address, State or Province | KS | |
Entity Address, Postal Zip Code | 66002 | |
City Area Code | 913 | |
Local Phone Number | 367-1480 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | MGPI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 21,962,171 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0000835011 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Sales | $ 174,939 | $ 92,560 | $ 283,262 | $ 191,642 |
Cost of sales | 118,112 | 71,858 | 194,136 | 147,729 |
Gross profit | 56,827 | 20,702 | 89,126 | 43,913 |
Selling, general and administrative expenses | 29,164 | 9,364 | 40,963 | 18,867 |
Operating income | 27,663 | 11,338 | 48,163 | 25,046 |
Interest expense, net | (1,104) | (628) | (1,592) | (1,107) |
Other income (loss), net | (88) | 330 | (58) | 167 |
Income before income taxes | 26,471 | 11,040 | 46,513 | 24,106 |
Income tax expense | 6,412 | 2,550 | 11,027 | 5,774 |
Net income | 20,059 | 8,490 | 35,486 | 18,332 |
Income attributable to participating securities, basic | 150 | 57 | 299 | 123 |
Income attributable to participating securities, diluted | 150 | 57 | 299 | 123 |
Net loss attributable to noncontrolling interest | (76) | 0 | (76) | 0 |
Net income attributable to MGP Ingredients, Inc., basic | 19,985 | 8,433 | 35,263 | 18,209 |
Net income attributable to MGP Ingredients, Inc., diluted | $ 19,985 | $ 8,433 | $ 35,263 | $ 18,209 |
Basic weighted average common shares (in shares) | 21,916,721 | 16,899,079 | 19,436,143 | 16,956,502 |
Diluted weighted average common shares (in shares) | 21,916,721 | 16,899,079 | 19,436,143 | 16,956,502 |
Basic Earnings Per Share (in dollars per share) | $ 0.91 | $ 0.50 | $ 1.81 | $ 1.07 |
Diluted Earnings Per Share (in dollars per share) | $ 0.91 | $ 0.50 | $ 1.81 | $ 1.07 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,059 | $ 8,490 | $ 35,486 | $ 18,332 |
Other comprehensive income, net of tax: | ||||
Unrealized gain on foreign currency translation adjustment | 1 | 0 | 7 | 0 |
Change in Company-sponsored post-employment benefit plan | 0 | 21 | 49 | 15 |
Other comprehensive income | 1 | 21 | 56 | 15 |
Comprehensive income | 20,060 | 8,511 | 35,542 | 18,347 |
Comprehensive loss attributable to noncontrolling interest | (76) | 0 | (76) | 0 |
Comprehensive income attributable to MGP Ingredients, Inc. | $ 20,136 | $ 8,511 | $ 35,618 | $ 18,347 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 37,243 | $ 21,662 |
Receivables (less allowance for credit losses, $100 and $24 at June 30, 2021, and December 31, 2020, respectively) | 79,110 | 56,966 |
Inventory | 232,292 | 141,011 |
Prepaid expenses | 4,996 | 2,644 |
Total current assets | 353,641 | 222,283 |
Property, plant, and equipment | 378,962 | 313,730 |
Less accumulated depreciation and amortization | (189,330) | (181,738) |
Property, plant, and equipment, net | 189,632 | 131,992 |
Operating lease right-of-use assets, net | 9,169 | 5,151 |
Investment in joint ventures | 5,739 | 0 |
Intangible assets, net | 219,872 | 890 |
Goodwill | 228,243 | 2,738 |
Other assets | 8,001 | 3,521 |
Total assets | 1,014,297 | 366,575 |
Current Liabilities | ||
Current maturities of long-term debt | 3,227 | 1,600 |
Accounts payable | 37,434 | 30,273 |
Federal and state liquor taxes payable | 9,175 | 107 |
Income taxes payable | 1,721 | 704 |
Accrued expenses and other | 31,881 | 20,645 |
Total current liabilities | 83,438 | 53,329 |
Long-term debt, less current maturities | 36,870 | 38,271 |
Credit agreement - revolver | 230,294 | 0 |
Long-term operating lease liabilities | 6,626 | 3,057 |
Other noncurrent liabilities | 5,117 | 7,094 |
Deferred income taxes | 58,450 | 2,298 |
Total liabilities | 420,795 | 104,049 |
Commitments and Contingencies (Note 8) | ||
Capital stock | ||
Preferred, 5% non-cumulative; $10 par value; authorized 1,000 shares; issued and outstanding 437 shares | 4 | 4 |
Common stock | ||
Common Stock, value, issued (in US dollars per share) | 6,715 | 6,715 |
Additional paid-in capital | 315,062 | 15,503 |
Retained earnings | 293,724 | 262,943 |
Accumulated other comprehensive income | 542 | 486 |
Treasury stock, at cost, 1,162,560 and 1,200,103 shares at June 30, 2021 and December 31, 2020, respectively | (22,469) | (23,125) |
Total MGP Ingredients, Inc. stockholders’ equity | 593,578 | 262,526 |
Noncontrolling interest | (76) | 0 |
Total equity | 593,502 | 262,526 |
Total liabilities and equity | $ 1,014,297 | $ 366,575 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for credit losses | $ 100 | $ 24 |
Preferred stock, percentage non-cumulative | 5.00% | 5.00% |
Preferred stock, par value (in USD per share) | $ 10 | $ 10 |
Preferred stock, shares authorized (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 437 | 437 |
Preferred stock, shares outstanding (in shares) | 437 | 437 |
Common stock, par value (in US dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 23,123,793 | 18,115,965 |
Common stock, shares outstanding (in shares) | 21,961,233 | 16,915,862 |
Treasury stock (in shares) | 1,162,560 | 1,200,103 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 35,486 | $ 18,332 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,425 | 6,344 |
Net loss attributable to noncontrolling interest | (76) | 0 |
Gain on sale of assets | 0 | (8) |
Share-based compensation | 4,767 | 1,801 |
Deferred income taxes, including change in valuation allowance | (1,568) | (99) |
Unrealized gain on foreign currency | 7 | 0 |
Changes in operating assets and liabilities, net of effects of acquisition: | ||
Receivables, net | 7,531 | (13,174) |
Inventory | (408) | (9,983) |
Prepaid expenses | (897) | (1,973) |
Income taxes payable | 1,017 | 5,778 |
Accounts payable | (12,996) | (4,218) |
Accrued expenses and other | 7,987 | 3,126 |
Federal and state liquor taxes payable | 716 | 132 |
Other, net | (2,537) | (72) |
Net cash provided by operating activities | 47,454 | 5,986 |
Cash Flows from Investing Activities | ||
Additions to property, plant, and equipment | (18,336) | (10,177) |
Purchase of business, net of cash acquired | (149,599) | (2,750) |
Contributions to equity method investment | (988) | 0 |
Proceeds from sale of property | 0 | 688 |
Other, net | (1,312) | (168) |
Net cash used in investing activities | (170,235) | (12,407) |
Cash Flows from Financing Activities | ||
Payment of dividends and dividend equivalents | (4,707) | (4,101) |
Purchase of treasury stock | (765) | (4,395) |
Loan fees paid related to borrowings | (666) | (1,148) |
Principal payments on long-term debt | 0 | (199) |
Proceeds from credit agreement - revolver | 242,300 | 54,700 |
Payments on credit agreement - revolver | (10,306) | (30,000) |
Payment on assumed debt as part of the Merger | (87,497) | 0 |
Net cash provided by financing activities | 138,359 | 14,857 |
Effect of exchange rate changes on cash | 3 | 0 |
Increase in cash and cash equivalents | 15,581 | 8,436 |
Cash and cash equivalents, beginning of period | 21,662 | 3,309 |
Cash and cash equivalents, end of period | $ 37,243 | $ 11,745 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes In Stockholders' Equity - USD ($) $ in Thousands | Total | Capital Stock Preferred | Issued Common | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive income | Treasury Stock | Non-controlling Interest |
Balance at beginning of period at Dec. 31, 2019 | $ 231,044 | $ 4 | $ 6,715 | $ 14,029 | $ 230,784 | $ (246) | $ (20,242) | |
Comprehensive income: | ||||||||
Net income | 9,842 | 9,842 | ||||||
Other comprehensive income | (6) | (6) | ||||||
Dividends and dividend equivalents of $0.12 per common share and per restricted stock unit, net of estimated forfeitures | (2,059) | (2,059) | ||||||
Share-based compensation | 902 | 902 | ||||||
Stock shares awarded, forfeited or vested | 237 | (567) | 804 | |||||
Stock shares repurchased | (4,395) | (4,395) | ||||||
Balance at end of period at Mar. 31, 2020 | 235,565 | 4 | 6,715 | 14,364 | 238,567 | (252) | (23,833) | |
Balance at beginning of period at Dec. 31, 2019 | 231,044 | 4 | 6,715 | 14,029 | 230,784 | (246) | (20,242) | |
Comprehensive income: | ||||||||
Net income | 18,332 | |||||||
Other comprehensive income | 15 | |||||||
Balance at end of period at Jun. 30, 2020 | 242,697 | 4 | 6,715 | 15,026 | 245,016 | (231) | (23,833) | |
Balance at beginning of period at Mar. 31, 2020 | 235,565 | 4 | 6,715 | 14,364 | 238,567 | (252) | (23,833) | |
Comprehensive income: | ||||||||
Net income | 8,490 | 8,490 | ||||||
Other comprehensive income | 21 | 21 | ||||||
Dividends and dividend equivalents of $0.12 per common share and per restricted stock unit, net of estimated forfeitures | (2,041) | (2,041) | ||||||
Share-based compensation | 662 | 662 | ||||||
Balance at end of period at Jun. 30, 2020 | 242,697 | 4 | 6,715 | 15,026 | 245,016 | (231) | (23,833) | |
Balance at beginning of period at Dec. 31, 2020 | 262,526 | 4 | 6,715 | 15,503 | 262,943 | 486 | (23,125) | $ 0 |
Comprehensive income: | ||||||||
Net income | 15,427 | 15,427 | ||||||
Other comprehensive income | 55 | 55 | ||||||
Dividends and dividend equivalents of $0.12 per common share and per restricted stock unit, net of estimated forfeitures | (2,052) | (2,052) | ||||||
Share-based compensation | 3,229 | 3,229 | ||||||
Stock shares awarded, forfeited or vested | 0 | (716) | 716 | |||||
Stock shares repurchased | (674) | (674) | ||||||
Balance at end of period at Mar. 31, 2021 | 278,511 | 4 | 6,715 | 18,016 | 276,318 | 541 | (23,083) | 0 |
Balance at beginning of period at Dec. 31, 2020 | 262,526 | 4 | 6,715 | 15,503 | 262,943 | 486 | (23,125) | 0 |
Comprehensive income: | ||||||||
Net income | 35,486 | |||||||
Other comprehensive income | 56 | |||||||
Balance at end of period at Jun. 30, 2021 | 593,502 | 4 | 6,715 | 315,062 | 293,724 | 542 | (22,469) | (76) |
Balance at beginning of period at Mar. 31, 2021 | 278,511 | 4 | 6,715 | 18,016 | 276,318 | 541 | (23,083) | 0 |
Comprehensive income: | ||||||||
Net income | 20,059 | |||||||
Net income | 19,983 | 20,059 | (76) | |||||
Other comprehensive income | 1 | 1 | ||||||
Dividends and dividend equivalents of $0.12 per common share and per restricted stock unit, net of estimated forfeitures | (2,653) | (2,653) | ||||||
Share-based compensation | 1,538 | 1,538 | ||||||
Stock shares awarded, forfeited or vested | 0 | (705) | 705 | |||||
Stock shares repurchased | (91) | (91) | ||||||
Equity consideration for Merger | 296,213 | 296,213 | ||||||
Balance at end of period at Jun. 30, 2021 | $ 593,502 | $ 4 | $ 6,715 | $ 315,062 | $ 293,724 | $ 542 | $ (22,469) | $ (76) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends and dividend equivalents (in USD per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 |
Accounting Policies and Basis o
Accounting Policies and Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Accounting Policies and Basis of Presentation | Accounting Policies and Basis of Presentation The Company. MGP Ingredients, Inc. (“the Company,” and “MGP”) is a Kansas corporation headquartered in Atchison, Kansas and is a leading producer and supplier of premium distilled spirits, branded spirits and food ingredients. Distilled spirits include premium bourbon and rye whiskeys and grain neutral spirits, including vodka and gin. Our distilled spirits are either packaged and sold under our own brands to distributors, sold, directly or indirectly, to manufacturers of other branded spirits, or direct to consumer. MGP is also a top producer of high quality industrial alcohol for use in both food and non-food applications. The Company’s protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the packaged goods industry. Our industrial alcohol and ingredients products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries. The Company’s distillery products are derived from corn and other grains (including rye, barley, wheat, barley malt, and milo), and its ingredient products are derived, primarily from wheat flour. On April 1, 2021, the Company acquired Luxco, Inc. and its affiliated companies (“Luxco”, or “Luxco Companies”) which is a leading branded beverage alcohol company across various categories, with a more than 60-year business heritage. Luxco’s operations predominately involve the producing, importing, bottling and rectifying of distilled spirits. See Note 3, Business Combination, for further details. As a result of the merger with Luxco, during the quarter ended June 30, 2021, the Company established a new reportable segment structure that separates Branded Spirits from the Distillery Products segment. The Ingredient Solutions segment remains unchanged. The new segment presentation reflects how management is now operating the business and making resource allocations. The Company now reports three operating segments: Distillery Products, Branded Spirits and Ingredient Solutions. Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation and prior periods have been revised to reflect the new operating segment structure. Basis of Presentation and Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2021, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”). The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the results for interim periods in accordance with U.S. generally accepted accounting principles (“GAAP”). Pursuant to the rules and regulations of the SEC, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted. The Company holds 60 percent interest in Dos Primos Tequila, LLC (“Dos Primos”). The Company consolidated Dos Primos activity on the financial statements and backs out the 40 percent non-controlling interest portion on a separate line. Use of Estimates. The financial reporting policies of the Company conform to GAAP. The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The application of certain of these policies places demands on management’s judgment, with financial reporting results relying on estimation about the effects of matters that are inherently uncertain, inclusive of the effects related to COVID-19. For all of these policies, management cautions that future events rarely develop as forecast, and estimates routinely require adjustment and may require material adjustment. Inventory. Inventory includes finished goods, raw materials in the form of agricultural commodities used in the production process as well as bottles, caps, and labels used in the bottling process and certain maintenance and repair items. Bourbon and whiskeys are normally aged in barrels for several years, following industry practice; all barreled bourbon and whiskey is classified as a current asset. The Company includes warehousing, insurance, and other carrying charges applicable to barreled whiskey in inventory costs. Inventories are stated at lower of cost or net realizable value on the first-in, first-out, or FIFO, method. Inventory valuations are impacted by constantly changing prices paid for key materials, primarily corn. Inventory consists of the following: June 30, 2021 December 31, 2020 Finished goods $ 47,500 $ 16,414 Barreled distillate (bourbons and whiskeys) 151,441 105,445 Raw materials 21,850 6,954 Work in process 1,533 1,805 Maintenance materials 8,806 8,634 Other 1,162 1,759 Total $ 232,292 $ 141,011 Revenue Recognition. Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to receive in exchange for the performance obligations. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Revenue is recognized for the sale of products at the point in time finished products are delivered to the customer in accordance with shipping terms. This is a faithful depiction of the satisfaction of the performance obligation because, at the point control passes to the customer, the customer has legal title and the risk and rewards of ownership have transferred, and the customer has present obligation to pay. For certain international customers, deposits are required in advance of shipment. These deposits are reported as contract liabilities until control passes to the customer and revenue is recognized. The Company’s Distillery Products segment routinely enters into bill and hold arrangements, whereby the Company produces and sells aged and unaged distillate to customers, and the product is barreled at the customer’s request and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers. Even though the aged and unaged distillate remains in the Company’s possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in bill and hold transactions when: customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product, and the risk and rewards of ownership have transferred to the customer. Additionally, all of the following bill and hold criteria have to be met in order for control to be transferred to the customer: the reason for the bill and hold arrangement is substantive - the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer. Warehouse services revenue is recognized over the time that warehouse services are rendered and as they are rendered. This is a faithful depiction of the satisfaction of the performance obligation because control of the aging products has already passed to the customer and there are no additional performance activities required by the Company, except as requested by the customer. The performance of the service activities, as requested, is invoiced as satisfied and revenue is concurrently recognized. Excise Taxes. The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department (the “TTB”) regulations which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcohol beverages in varying amounts. The Company calculates its Federal and state excise tax expense based upon units shipped and on its understanding of the applicable excise tax laws . Excise taxes that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer are excluded from revenue. Recognition of Insurance Recoveries. Estimated loss contingencies are recognized as charges to income when they are probable and reasonably estimable. Insurance recoveries are not recognized until all contingencies related to the insurance claim have been resolved and settlement has been reached with the insurer. Insurance recoveries, to the extent of costs and losses, are reported as a reduction to costs on the Condensed Consolidated Statements of Income. Insurance recoveries, in excess of costs and losses, if any, would be reported as a separate caption in Operating income on the Condensed Consolidated Statements of Income. Legally committed recovery amounts obtained prior to contingencies being resolved are recorded in Accrued expenses and other on the Condensed Consolidated Balance Sheets. Income Taxes. The Company accounts for income taxes using an asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is recognized if it is “more likely than not” that at least some portion of the deferred tax asset will not be realized. Earnings Per Share (“EPS”). Basic and diluted EPS are computed using the two-class method, which is an earnings allocation formula that determines net income per share for each class of Common Stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each year during the period. Translation of Foreign Currencies. Assets and liabilities of Niche Drinks Co., Ltd. (“Niche”), a wholly-owned subsidiary of the Company whose functional currency is the British pound sterling, are translated to U.S. dollars using the exchange rate in effect at the condensed consolidated balance sheet date. Results of operations are translated using average rates during the period. Adjustments resulting from the translation process are included as a component of Accumulated other comprehensive income . Business Combinations. Assets acquired and liabilities assumed during a business combination are generally recorded at fair market value as of the acquisition date. Goodwill is recognized to the extent that the purchase consideration exceeds the assets acquired and liabilities assumed. The Company uses its best estimate and third party valuation specialists to determine the fair value of the assets acquired and liabilities assumed. During the measurement period, which can be up to one year after the acquisition date, the Company can make adjustments to the fair value of the assets acquired and liabilities assumed, with the offset being an adjustment to goodwill. Goodwill and Indefinite-Lived Intangible Assets. The Company records goodwill and other indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and other indefinite-lived intangible assets to its respective reporting units. The Company evaluates goodwill for impairment at least annually, in the fourth quarter, or on an interim basis if events and circumstances occur that would indicate it is more likely than not that the fair value of a reporting unit is less than the carrying value. To the extent that the carrying amount exceeds fair value, an impairment of goodwill is recognized. Judgment is required in the determination of reporting units, the assignment of assets and liabilities to reporting units, including goodwill, and the determination of fair value of the reporting units. The Company separately evaluates indefinite-lived intangible assets for impairment. As of June 30, 2021, the Company determined that goodwill and indefinite-lived intangible assets were not impaired. Fair Value of Financial Instruments. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into three levels based upon the observability of inputs. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s short term financial instruments include cash and cash equivalents, accounts receivables and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market. The fair value of the Company’s debt is estimated based on current market interest rates for debt with similar maturities and credit quality. The fair value of the Company’s debt was $276,919 and $44,548 at June 30, 2021 and December 31, 2020, respectively. The financial statement carrying value of total debt was $270,391 (including unamortized loan fees) and $39,871 (including unamortized loan fees) at June 30, 2021 and December 31, 2020, respectively. These fair values are considered Level 2 under the fair value hierarchy. Fair value disclosure for deferred compensation plan investments is included in Note 9. Equity Method Investments. The condensed consolidated financial statements include the results of Luxco and its affiliated companies since April 1, 2021, when the Company obtained control through the Merger. The Company holds 50 percent interests in DGL Destiladores, S.de R.L. de C.V. (“DGL”) and Agricola LG, S.de R.L. de C.V. (“Agricola”) (combined “LMX”), which are accounted for as equity method investments since the date of acquisition. At June 30, 2021, the investment in LMX was $5,739, which is recorded in Investment in joint ventures on the Condensed Consolidated Balance Sheet. During the quarter and year to date ended June 30, 2021, the Company recorded a $334 loss from our equity method investments, which is recorded in Other income (loss), net on the Condensed Consolidated Statement of Income. Recently Adopted Accounting Standard Updates. The Company did not adopt any new Accounting Standard Updates during the quarter ended June 30, 2021 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company generates revenues from the Distillery Products segment by the sale of products and by providing warehouse services related to the storage and aging of customer products. The Company generates revenues from the Branded Spirits and Ingredient Solutions segments by the sale of products. Revenue related to sales of products is recognized at a point in time whereas revenue generated from warehouse services is recognized over time. Contracts with customers include a single performance obligation (either the sale of products or the provision of warehouse services). The following table presents the Company’s sales by segment and major products and services: Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Distillery Products Brown goods $ 43,766 $ 25,325 $ 86,807 $ 53,970 White goods 18,205 14,873 34,862 31,712 Premium beverage alcohol 61,971 40,198 121,669 85,682 Industrial alcohol 14,770 22,953 32,106 44,571 Food grade alcohol 76,741 63,151 153,775 130,253 Fuel grade alcohol 4,753 1,174 7,270 2,696 Distillers feed and related co-products 4,672 6,781 9,644 13,770 Warehouse services 4,182 3,699 8,283 7,600 Total Distillery Products 90,348 74,805 178,972 154,319 Branded Spirits Ultra premium 10,093 320 10,574 684 Premium 6,301 47 6,383 171 Mid 17,786 — 17,786 — Value 20,944 — 20,944 — Other 5,302 17 5,309 17 Total Branded Spirits 60,426 384 60,996 872 Ingredient Solutions Specialty wheat starches 12,598 9,122 22,820 19,334 Specialty wheat proteins 8,352 6,013 14,398 12,378 Commodity wheat starches 2,663 1,774 4,946 3,651 Commodity wheat proteins 552 462 1,130 1,088 Total Ingredient Solutions 24,165 17,371 43,294 36,451 Total sales $ 174,939 $ 92,560 $ 283,262 $ 191,642 |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination Description of the transaction . On January 22, 2021, the Company entered into a definitive agreement to acquire Luxco, and subsequently completed the merger on April 1, 2021 (the “Merger”). Luxco is a leading branded beverage alcohol company across various categories, with a more than 60-year business heritage. As a result of the Merger, MGP increased its scale and market position in the branded-spirits sector and believes it strengthened its platform for future growth of higher valued-added products. Following the Merger, the Luxco Companies became wholly-owned subsidiaries of MGP and are included within the Branded Spirits segment. The aggregate consideration paid by the Company in connection with the Merger was $237,500 in cash (less assumed indebtedness) and 5,007,833 shares of common stock of the Company, subject to adjustment for fractional shares (the “Company Shares,” and together with the cash portion, the “Merger Consideration”). The Company Shares were valued at $296,213 and represented approximately 22.8 percent of the Company’s outstanding common stock immediately following the closing of the Merger. The Merger Consideration is subject to customary purchase price adjustments, including working capital, a portion of which may be paid in common stock. The preliminary Merger Consideration will increase or decrease to the extent that actual closing date working capital exceeds or is less than the contractually agreed upon working capital target. In addition, the preliminary Merger Consideration will be increased for any acquired cash. In connection with the closing of the Merger on April 1, 2021, the preliminary purchase price adjustments increased the cash consideration paid by approximately $75 and increased stock consideration by approximately $159. The cash portion of the Merger Consideration, the repayment of assumed debt, and transaction-related expenses were financed with borrowings under the Company’s existing Credit Agreement which was drawn down on April 1, 2021. See Note 5, Corporate Borrowings, for further details. For tax purposes, the transaction was structured partially as a tax-free reorganization and partially as a taxable acquisition, as defined in the Internal Revenue Code. The Company anticipates the amount transferred in a tax deferred manner, under the tax-free reorganization rules, will not create additional tax basis for the Company. The taxable component of the transaction will create additional tax basis and a corresponding future tax deduction for the Company. The Merger was accounted for as a business combination in accordance with Accounting Standard Codification 805 “ASC 805”), Business Combinations, and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The fair value of the assets acquired and liabilities assumed are based upon a preliminary assessment of fair value and may change as valuations for certain tangible assets, intangible assets and contingent liabilities are finalized and the associated income tax impacts are determined. The Company expects to finalize the purchase price allocation as soon as practicable, but no longer than one year from the acquisition date. Purchase Price Allocation. The following table summarizes the preliminary allocation of the consideration paid for Luxco to the preliminary estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill. Consideration: Cash, net of assumed debt $ 150,078 Value of MGP Common Stock issued at close (a) 296,372 Fair value of total consideration transferred $ 446,450 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 479 Receivables 29,675 Inventory 90,854 Prepaid expenses 1,454 Property, plant and equipment, net 41,279 Investments in joint ventures 5,085 Intangible assets (b) 219,500 Other assets 4,257 Total assets 392,583 Current maturities of long-term debt (c) 87,497 Accounts payable 14,453 Federal and state liquor taxes payable 8,352 Accrued expenses and other 2,832 Other noncurrent liabilities 784 Deferred income taxes 57,720 Total liabilities 171,638 Goodwill 225,505 Total $ 446,450 (a) The Company issued 5,007,833 shares of MGP Common Stock which was valued at $59.15 per share on April 1, 2021. The value of MGP Common Stock includes the preliminary working capital adjustment of $159 . (b) Intangible assets acquired includes trade names with an estimated fair value of $178,100 and distributor relationships with an estimated fair value of $41,400. (c) The fair value of Luxco’s debt that was assumed by MGP in the transaction and repaid on the closing date. In accordance with ASC 805 assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The fair value measurements of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy. Level 3 inputs include discount rates that would be used by a market participant in valuing these assets and liabilities, projections of revenues and cash flows, distributor attrition rates, royalty rates and market comparable, among others. The fair value of work-in-process and finished goods inventory was determined using the comparative sales method and raw materials was determined using the replacement cost method. Goodwill of $225,505 represents the excess of the consideration transferred over the estimated fair value of assets acquired net of liabilities assumed. No Goodwill is expected to be deductible for tax purposes. The Intangible assets acquired includes indefinite-lived intangible assets, trade names, with an estimated fair value of $178,100 and definite-lived intangible assets, distributor relationships, with an estimated fair value of $41,400 and a useful life of 20 years. The trade names and distributor relationships acquired by the Company have been adjusted to the estimated fair values using the relief from royalty method and multi-period earnings method, respectively. Management and a third party valuation team performed a preliminarily valuation analysis to determine the fair value of each trade name and distributor relationship. Operating Results . The operating results of Luxco were consolidated with the Company’s operating results subsequent to the merger date. During the quarter and year to date ended June 30, 2021, the Company recorded $59,298 of Sales and $6,520 of Income before income taxes, attributable to Luxco on it’s Condensed Consolidated Statement of Income. During the quarter and year to date ended June 30, 2021, the Company has incurred $6,738 and $8,628, respectively, of transaction related costs, which are included in Selling, general and administrative expenses on the Condensed Consolidated Statements of Income. Pro Forma Information . The following table summarizes the unaudited pro forma financial results for the quarter and year to date ended June 30, 2021 and 2020, as if the Merger had occurred on January 1, 2020: Pro Forma Financial Information Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Sales $ 174,939 $ 141,686 $ 349,461 $ 289,894 Net income 28,124 12,589 34,419 15,990 Basic and diluted earnings per share 1.28 0.57 1.56 0.72 The pro forma results are adjusted for items that are non-recurring in nature and directly attributable to the Merger, including the income tax effect of the adjustments. Merger related costs incurred by the Company of $6,738 and $8,628 for the quarter and year to date ended June 30, 2021, respectively, were excluded and $6,738 is assumed to have been incurred on January 1, 2020. Merger related costs incurred by Luxco of $3,132 were excluded from the year to date ended June 30, 2021 pro forma results. A non-recurring expense of $2,529 for the quarter and year to date ended June 30, 2021 related to the fair value adjustment of finished goods inventory estimated to have been sold was removed and included in the results for the year to date ended June 30, 2020. Other acquired tangible and intangible assets are assumed to be recorded at estimated fair value on January 1, 2020 and are amortized or depreciated over their estimated useful lives. The summary pro forma financial information is for informational purposes only, is based on estimates and assumptions, and does not purport to represent what the Company’s consolidated results of operations actually would have been if the Merger had occurred at an earlier date, and such data does not purport to project the Company’s results of operations for any future period. The basic and diluted shares outstanding used to calculate the pro forma net income per share amounts presented above have been adjusted to assume shares issued at the closing of the Merger were outstanding since January 1, 2020. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Definite-Lived Intangible Assets The Company has a definite-lived intangible asset which was acquired as a result of the Merger. The distributor relationships have a carrying value of $40,882, net of accumulated amortization of $518. The distributor relationships have a useful life of 20 years. The amortization expense for the quarter and year to date ended June 30, 2021 was $518. As of June 30, 2021, the expected future amortization expense related to definite-lived intangibles assets are as follows: Remainder of 2021 $ 1,035 2022 2,070 2023 2,070 2024 2,070 2025 2,070 Thereafter 31,567 Total $ 40,882 Goodwill and Indefinite-Lived Intangible Assets The Company records goodwill and indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and indefinite-lived intangible assets to its respective reporting units. Changes in carrying amount of goodwill by business segment were as follows: Distillery Products Branded Spirits Ingredient Solutions Total Balance, December 31, 2020 $ — $ 2,738 $ — $ 2,738 Acquisitions — 225,505 — 225,505 Balance, June 30, 2021 $ — $ 228,243 $ — $ 228,243 Changes in carrying amount of trade name intangible assets by business segment were as follows: Distillery Products Branded Spirits Ingredient Solutions Total Balance, December 31, 2020 $ — $ 890 $ — $ 890 Acquisitions — 178,100 — 178,100 Balance, June 30, 2021 $ — $ 178,990 $ — $ 178,990 |
Corporate Borrowings
Corporate Borrowings | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Corporate Borrowings | Corporate Borrowings The following table presents the Company’s outstanding indebtedness: Description (a) June 30, 2021 December 31, 2020 Credit Agreement - Revolver, 1.09% (variable rate) due 2025 $ 232,000 $ — Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 20,000 20,000 Prudential Note Purchase Agreement, 3.80% (fixed rate) due 2029 20,000 20,000 Other long-term borrowings 216 — Total indebtedness outstanding 272,216 40,000 Less unamortized loan fees (b) (1,825) (129) Total indebtedness outstanding, net 270,391 39,871 Less current maturities of long-term debt (3,227) (1,600) Long-term debt and Credit Agreement - Revolver $ 267,164 $ 38,271 (a) Interest rates are as of June 30, 2021. (b) Loan fees are being amortized over the life of the Credit Agreement and Note Purchase Agreement. Credit Agreement. On February 14, 2020, the Company entered into a credit agreement (the “Credit Agreement”) with multiple participants led by Wells Fargo Bank, National Association (“Wells Fargo Bank”) that matures on February 14, 2025. The Credit Agreement provided for a $300,000 revolving credit facility. On May 14, 2021, the Credit Agreement was amended to increase the principal amount to $400,000 and to increase the amount of the revolving credit facility by up to an additional $100,000. The Company incurred $666 new loan fees related to the Credit Agreement during 2021. The Credit Agreement includes certain requirements and covenants, which the Company was in compliance with at June 30, 2021. As of June 30, 2021, the Company had $232,000 outstanding borrowings under the Credit Agreement leaving $168,000 available. The cash portion of the Merger Consideration, the repayment of assumed debt, and transaction-related expenses were financed with $242,300 borrowings under the Credit Agreement which was drawn down on April 1, 2021. Note Purchase Agreements. The Company’s Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”), as amended by the First Amendment to Private Shelf Agreement as of February 14, 2020, the Second Amendment to Private Shelf Agreement as of September 30, 2020, the Third Amendment to Private Shelf Agreement as of January 25, 2021, and the Fourth Amendment to Private Shelf Agreement as of May 14, 2021, with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc., provides for the issuance of up to $105,000 of Senior Secured Notes (or any higher amount solely to the extent PGIM, Inc. has provided written notice to the Company of its authorization of such a higher amount) and issuance of $20,000 of Senior Secured Notes. The deadline for issuing the notes under the shelf facility is August 23, 2023. During 2017, the Company issued $20,000 of Senior Secured Notes with a maturity date of August 23, 2027. During 2019, the Company issued $20,000 of additional Senior Secured Notes with a maturity date of April 30, 2029. The Note Purchase Agreement includes certain requirements and covenants, which the Company was in compliance with at June 30, 2021. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the estimated annual effective tax rate is updated and a year to date adjustment is made to the provision. The Company’s quarterly effective tax rate can be subject to significant change due to the effect of discrete items arising in a given quarter. Beginning in the second quarter of 2021, the estimated annual effective tax rate includes both domestic and foreign entities acquired in the Merger. See Note 3, Business Combination, for further details. Income tax expense for the quarter and year to date ended June 30, 2021, was $6,412 and $11,027, respectively, for an effective tax rate of 24.2 percent and 23.7 percent, respectively. The effective tax rate for quarter and year to date ended June 30, 2021, differed from the 21 percent federal statutory rate on pretax income, primarily due to state taxes, income taxes on foreign subsidiaries acquired as a result of the Merger, nondeductible transaction costs, and a change in accounting estimate related to the Company’s state tax credits. The increase in the estimated annual effective tax rate was partially offset by state and federal credits, including income taxes on foreign subsidiaries acquired as a result of the Merger, the deduction applicable to export activity, and a change related to the Company’s valuation allowance related to the ability to use certain state net operating losses carryforward. |
Equity and EPS
Equity and EPS | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Equity and EPS | Equity and EPS The computations of basic and diluted EPS: Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Operations: Net income (a) $ 20,059 $ 8,490 $ 35,486 $ 18,332 Less: Income attributable to participating securities (b) 150 57 299 123 Less: net loss attributable to noncontrolling interest (76) — (76) — Net income attributable to MGP Ingredients, Inc. $ 19,985 $ 8,433 $ 35,263 $ 18,209 Share information: Basic and diluted weighted average common shares (c) 21,916,721 16,899,079 19,436,143 16,956,502 Basic and diluted EPS $ 0.91 $ 0.50 $ 1.81 $ 1.07 (a) Net income attributable to all shareholders. (b) Participating securities included 166,674 and 116,127 unvested restricted stock units (“RSUs”), at June 30, 2021 and 2020, respectively. (c) Under the two-class method, basic and diluted weighted average common shares at June 30, 2021 and 2020 exclude unvested participating securities. Share Issuance. On April 1, 2021, as part of the consideration for the Merger, the Company issued 5,007,833 shares of common stock. The shares issued represented approximately 22.8 percent of the Company’s outstanding stock immediately following the closing of the Merger. Share Repurchase. On February 25, 2019, MGP’s Board of Directors approved a $25,000 share repurchase authorization commencing February 27, 2019, through February 27, 2022. Under the share repurchase program, the Company can repurchase stock from time to time for cash in open market purchases, block transactions, and privately negotiated transactions in accordance with applicable federal securities laws. This share repurchase program may be modified, suspended, or terminated by the Company at any time without prior notice. The Company did not repurchase any shares during the year to date ended June 30, 2021 and has $20,947 remaining under the share repurchase plan. During the year to date ended June 30, 2020, the Company repurchased approximately 159,104 shares of MGP Common Stock for $4,053. The Common Stock share activity: Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2021 437 16,915,862 Issuance of Common Stock — 35,114 Repurchase of Common Stock (a) — (10,376) Balance, March 31, 2021 437 16,940,600 Issuance of Common Stock — 5,022,122 Repurchase of Common Stock (a) — (1,489) Balance, June 30, 2021 437 21,961,233 Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2020 437 17,028,125 Issuance of Common Stock — 36,545 Repurchase of Common Stock (b) — (169,148) Balance, March 31, 2020 437 16,895,522 Issuance of Common Stock — — Repurchase of Common Stock (a) — — Balance, June 30, 2020 437 16,895,522 (a) The Common Stock repurchases were for tax withholding on equity based compensation (b) 159,104 shares that were repurchased during the quarter ended March 31, 2020 related to the share repurchase program. The remaining shares repurchased were related to tax withholding on equity based compensation |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies There are various legal and regulatory proceedings involving the Company and its subsidiaries. The Company accrues estimated costs for a contingency when management believes that a loss is probable and can be reasonably estimated. Dryer Fire Incident. During November 2020, the Company experienced a fire at the Atchison facility. The fire damaged certain equipment in the facility’s feed drying operations and caused temporary loss of production time. At June 30, 2021, the Company received a legally binding commitment from their insurance carrier of $11,300 that was recorded as Receivables on the Condensed Consolidated Balance Sheet. During the quarter and year to date ended June 30, 2021, the Company recorded $6,230 and $9,840, respectively, of partial settlement from its insurance carrier as a reduction of Cost of sales. At June 30, 2021, recorded within Accrued expenses and other on the Condensed Consolidated Balance Sheet is $11,400 related to legally committed insurance recovery amounts obtained prior to contingencies related to the insurance claim being resolved. The Company is working to construct a replacement drying system. The Company’s insurance is expected to provide coverage of any business interruption and other losses from damage to property, plant and equipment, but there can be no assurance to the amount or timing of possible insurance recoveries if ultimately claimed by the Company. Ransomware Cyber-Attack. In May 2020, the Company was affected by a ransomware cyber-attack that temporarily disrupted production at its Atchison facilities. The Company’s financial information was not affected and there is no evidence that any sensitive or confidential company, supplier, customer or employee data was improperly accessed or extracted from our network. The Company has insurance related to this event and is currently evaluating if it will seek further recovery. Following the attack, MGP implemented a variety of measures to further enhance our cybersecurity protections and minimize the impact of any future attack. The Company’s insurance may cover additional losses from this incident, but there can be no assurance as to the amount or timing of any possible insurance recoveries if ultimately claimed by the Company. Shareholder matters. In 2020, two putative class action lawsuits were filed in the United States District Court for District of Kansas, naming the Company and certain of its current and former executive officers as defendants, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The plaintiffs seek to pursue claims on behalf of a class consisting of purchasers or acquirers of the Company’s Common Stock during certain specified periods (the “Class Periods”). On May 28, 2020, the two lawsuits were consolidated and the Court appointed City of Miami Fire Fighters’ and Police Officers’ Retirement Trust as lead plaintiff. The consolidated action is captioned In re MGP Ingredients, Inc. Securities Litigation and the file is maintained under Master File No. 2:20-cv-2090-DDCJPO. On July 22, 2020, the Retirement Trust filed a consolidated Amended Complaint. The Consolidated Complaint alleges that the defendants made false and/or misleading statements regarding the Company’s forecasts of sales of aged whiskey, and that, as a result the Company’s Common Stock traded at artificially inflated prices throughout the Class Periods. The plaintiffs seek compensatory damages, interest, attorneys’ fees, costs, and unspecified equitable relief, but have not specified the amount of damages being sought. On September 8, 2020, defendants filed a Motion to Dismiss the Consolidated Amended Complaint. The Motion has been fully briefed and remains pending. Discovery is stayed while the motion is pending. The Company intends to continue to vigorously defend itself in this action. On May 11, 2020, Mitchell Dorfman, a shareholder in MGP, filed an action in the United States District Court for the District of Kansas, under the caption Dorfman, derivatively on behalf of MGP Ingredients v. Griffin, et al., Case 2:20-cv-02239. On June 4, 2020, Justin Carter, a shareholder in MGP, filed an action in the United States District Court for the District of Kansas, under the caption Carter, derivatively on behalf of MGP Ingredients v. Griffin, et al., Case 2:20-cv-02281. On June 18, 2020, Alexandra Kearns, a shareholder in MGP, filed an action in the District Court of Atchison County, Kansas, under the caption Kearns, derivatively on behalf of MGP Ingredients v. Griffin, et al., Case 2020-CV-000042. The defendants are certain of the Company’s current and former officers and directors. The Company is a nominal defendant in each action. Plaintiffs allege that the Company was damaged as a result of the conduct of the individual defendants alleged in the MGP Ingredients, Inc. Securities Litigation, the repurchase of company stock at artificially inflated prices, and compensation paid to the individual defendants. The Complaint in Dorfman asserts claims for violations of Sections 14(a), 10(b), and 20(a) of the Securities Exchange Act of 1934, breach of fiduciary duties, waste of corporate assets, and unjust enrichment. The Complaint in Carter asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, breach of fiduciary duties, waste of corporate assets, and unjust enrichment. The Petition in Kearns asserts claims for breach of fiduciary duties, waste of corporate assets, and unjust enrichment. The pleadings pray for an award of compensatory damages, including interest, in favor of the Company, for equitable relief related to the Company’s corporate governance, for disgorgement of compensation, and for an award of attorneys’ fees and costs. On July 13, 2020, defendants filed a Motion to Dismiss in Dorfman. On August 13, 2020, defendants filed a Motion to Stay the Kearns action pending the resolution of Dorfman. On November 3, 2020, the court entered an order providing that Defendants’ response to the Carter Complaint shall be due 14 days after a ruling on the Motion to Dismiss filed in Dorfman. On March 31, 2021, the Dorfman court issued a Memorandum and Order in which it granted defendants’ Motion to Dismiss plaintiff’s federal claims, dismissed those claims without prejudice, denied without prejudice defendants’ Motion to Dismiss plaintiff’s state claims, and stayed the case pending the Kansas Supreme Court’s decision in Herington v. City of Wichita. Herington involves the issue of whether a federal decision that determines federal claims and dismisses pendent state law claims for lack of supplemental jurisdiction precludes the reassertion of the state law claims in state court. The Kearns court has not yet taken any action in response to the court’s Memorandum and Order in Dorfman. On April 14, 2021, defendants in Carter filed a Motion to dismiss plaintiff’s federal claims and to stay plaintiff’s state claims until fourteen days after the Court rules on the state claims in Dorfman . On November 25, 2020, Kenneth Laury filed an action in the District Court of Shawnee County, Kansas under the caption Laury v. MGP Ingredients, Inc., Case Number: 2020-CV-000609. The Petition alleges that plaintiff commenced the action under K.S.A. 17-6510 to enforce his alleged right to inspect books and records of the Company, in order to enable him to evaluate possible misconduct by the Company’s Board of Directors and management. On January 8, 2021, the Company filed an answer to the Petition, denying that plaintiff has satisfied the statutory requirements for his demand. On May 13, 2021, the parties stipulated to the voluntary dismissal, with prejudice, of the action. 2016 Atchison Chemical Release. A chemical release occurred at the Company’s Atchison facility on October 21, 2016, which resulted in emissions venting into the air (“the Atchison Chemical Release”). Private plaintiffs have initiated, and additional private plaintiffs may initiate, legal proceedings for damages resulting from the Atchison Chemical Release, but the Company is currently unable to reasonably estimate the amount of any such damages that might result. The Company’s insurance is expected to provide coverage of any damages to private plaintiffs, subject to a deductible, but there can be no assurance to the amount or timing of possible insurance recoveries if ultimately claimed by the Company. |
Employee and Non-Employee Benef
Employee and Non-Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee and Non-Employee Benefit Plans | Employee and Non-Employee Benefit Plans Equity-Based Compensation Plans . The Company’s equity-based compensation plans provide for the awarding of stock options, stock appreciation rights, shares of restricted stock (“Restricted Stock”), and RSUs for senior executives and salaried employees, as well as non-employee directors. The Company has two active equity-based compensation plans: the Employee Equity Incentive Plan of 2014 (the “2014 Plan”) and the Non-Employee Director Equity Incentive Plan (the “Directors’ Plan”). As of June 30, 2021, 516,861 RSUs had been granted of the 1,500,000 shares approved under the 2014 Plan, and 120,619 shares had been granted of the 300,000 shares approved under the Directors’ Plan. As of June 30, 2021, there were 171,824 unvested RSUs under the Company’s long-term incentive plans and 166,674 were participating securities (Note 7). Deferred Compensation Plan. The Company established an unfunded Executive Deferred Compensation Plan (“EDC Plan”) effective as of June 30, 2018, with a purpose to attract and retain highly-compensated key employees by providing participants with an opportunity to defer receipt of a portion of their salary, bonus, and other specified compensation. The Company’s obligations under this plan will change in conjunction with the performance of the participants’ investments, along with contributions to and withdrawals from the plan. Realized and unrealized gains (losses) on deferred compensation plan investments were included as a component of Other income (loss), net on the Company’s Condensed Consolidated Statements of Income for the quarter and year to date ended June 30, 2021. For quarter and year to date ended June 30, 2021, the Company had a gain on deferred compensation plan investments of $246 and $276, respectively. For quarter and year to date ended June 30, 2020, the Company had a gain on deferred compensation plan investments of $331 and $167, respectively. Plan investments are classified as Level 1 in the fair value hierarchy since the investments trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis. Participants were able to direct the deferral of a portion of their base salary and a portion of their estimated accrued Short-term incentive plan (“STI Plan”) amounts that were paid during first quarter of the following year. Base salary amounts elected for deferral are deposited into the EDC Plan by the Company on a weekly basis and allocated by participants among Company-determined investment options. STI plan deferral were deposited, at the time of payment, into the EDC Plan by the Company and allocated by participants among Company-determined investment options. At June 30, 2021 and December 31, 2020, the EDC Plan investments were $3,558 and $2,007, respectively, which were recorded in Other assets on the Company’s Condensed Consolidated Balance Sheets. The EDC Plan current liabilities were $897 at June 30, 2021 and were included in Accrued expenses and other on the Company’s Condensed Consolidated Balance Sheet. The EDC Plan non-current liabilities were $2,924 and $3,140 at June 30, 2021 and December 31, 2020, respectively, and were included in Other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets. |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments As discussed in Note 1, the Company established a new reportable segment structure as a result of the Merger and prior periods have been revised to reflect the new operating segments. At June 30, 2021, the Company had three segments: Distillery Products, Branded Spirits, and Ingredient Solutions. The Distillery Products segment consists of food grade alcohol and distillery co-products, such as distillers feed (commonly called dried distillers grain in the industry) and fuel grade alcohol. The Distillery Products segment also includes warehouse services, including barrel put away, storage, retrieval, and blending services. The Branded Spirits segment consists of producing, importing, bottling and rectifying of distilled spirits. Ingredient Solutions segment consists of specialty starches and proteins and commodity starches and proteins. Operating profit for each segment is based on sales less identifiable operating expenses. Non-direct selling, general and administrative expenses, interest expense, other special charges, and other general miscellaneous expenses are excluded from segment operations and are classified as Corporate. Receivables, inventories, property, plant and equipment, leases, goodwill and intangible assets have been identified with the segments to which they relate. All other assets are considered as Corporate. Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Sales to Customers Distillery Products $ 90,348 $ 74,805 $ 178,972 $ 154,319 Branded Spirits 60,426 384 60,996 872 Ingredient Solutions 24,165 17,371 43,294 36,451 Total $ 174,939 $ 92,560 $ 283,262 $ 191,642 Gross Profit Distillery Products $ 31,985 $ 15,854 $ 60,230 $ 33,913 Branded Spirits 18,434 148 18,520 338 Ingredient Solutions 6,408 4,700 10,376 9,662 Total $ 56,827 $ 20,702 $ 89,126 $ 43,913 Depreciation and Amortization Distillery Products $ 2,652 $ 2,417 $ 5,205 $ 4,808 Branded Spirits 1,709 30 1,738 40 Ingredient Solutions 481 469 956 922 Corporate 273 304 526 574 Total $ 5,115 $ 3,220 $ 8,425 $ 6,344 Income (loss) before Income Taxes Distillery Products $ 31,315 $ 15,364 $ 58,178 $ 32,732 Branded Spirits 7,113 (930) 5,889 $ (2,065) Ingredient Solutions 5,735 4,099 8,907 8,313 Corporate (17,692) (7,493) (26,461) (14,874) Total $ 26,471 $ 11,040 $ 46,513 $ 24,106 The following table allocates assets to each segment as of: June 30, 2021 December 31, 2020 Identifiable Assets Distillery Products $ 285,451 $ 281,721 Branded Spirits 644,763 6,348 Ingredient Solutions 41,324 41,276 Corporate 42,759 37,230 Total $ 1,014,297 $ 366,575 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividend. On August 2, 2021, the Company’s Board of Directors declared a quarterly dividend payable to stockholders of record as of August 20, 2021, of the Company’s Common Stock, and a dividend equivalent payable to holders of certain RSUs as of August 20, 2021, of $0.12 per share and per unit, payable on September 3, 2021. Note Purchase Agreements. On July 29, 2021, PGIM, Inc. (“Prudential”) provided the Company notice pursuant to Section 1.2 of the Note Purchase and Private Shelf Agreement dated as of August 23, 2017 (as amended by the First Amendment to Note Purchase and Private Shelf Agreement dated as of February 14, 2020, the Second Amendment to Note Purchase and Private Shelf Agreement dated as of September 30, 2020, the Third Amendment to Note Purchase and Private Shelf Agreement dated as of January 25, 2021, and the Fourth Amendment to Note Purchase and Private Shelf Agreement dated as of May 14, 2021, the “Note Agreement”) that Prudential has authorized an increase in the amount of the senior promissory notes that may be issued under the uncommitted shelf facility under the Note Agreement from $105,000 to $140,000, effective as of July 29, 2021. |
Accounting Policies and Basis_2
Accounting Policies and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
The Company | The Company. MGP Ingredients, Inc. (“the Company,” and “MGP”) is a Kansas corporation headquartered in Atchison, Kansas and is a leading producer and supplier of premium distilled spirits, branded spirits and food ingredients. Distilled spirits include premium bourbon and rye whiskeys and grain neutral spirits, including vodka and gin. Our distilled spirits are either packaged and sold under our own brands to distributors, sold, directly or indirectly, to manufacturers of other branded spirits, or direct to consumer. MGP is also a top producer of high quality industrial alcohol for use in both food and non-food applications. The Company’s protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the packaged goods industry. Our industrial alcohol and ingredients products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries. The Company’s distillery products are derived from corn and other grains (including rye, barley, wheat, barley malt, and milo), and its ingredient products are derived, primarily from wheat flour. On April 1, 2021, the Company acquired Luxco, Inc. and its affiliated companies (“Luxco”, or “Luxco Companies”) which is a leading branded beverage alcohol company across various categories, with a more than 60-year business heritage. Luxco’s operations predominately involve the producing, importing, bottling and rectifying of distilled spirits. See Note 3, Business Combination, for further details. As a result of the merger with Luxco, during the quarter ended June 30, 2021, the Company established a new reportable segment structure that separates Branded Spirits from the Distillery Products segment. The Ingredient Solutions segment remains unchanged. The new segment presentation reflects how management is now operating the business and making resource allocations. The Company now reports three operating segments: Distillery Products, Branded Spirits and Ingredient Solutions. Certain amounts in the 2020 consolidated financial statements have been reclassified to conform to the 2021 presentation and prior periods have been revised to reflect the new operating segment structure. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2021, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”). The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the results for interim periods in accordance with U.S. generally accepted accounting principles (“GAAP”). Pursuant to the rules and regulations of the SEC, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted. |
Use of Estimates | Use of Estimates. The financial reporting policies of the Company conform to GAAP. The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The application of certain of these policies places demands on management’s judgment, with financial reporting results relying on estimation about the effects of matters that are inherently uncertain, inclusive of the effects related to COVID-19. For all of these policies, management cautions that future events rarely develop as forecast, and estimates routinely require adjustment and may require material adjustment. |
Inventory | Inventory. Inventory includes finished goods, raw materials in the form of agricultural commodities used in the production process as well as bottles, caps, and labels used in the bottling process and certain maintenance and repair items. Bourbon and |
Revenue Recognition | Revenue Recognition. Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to receive in exchange for the performance obligations. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Revenue is recognized for the sale of products at the point in time finished products are delivered to the customer in accordance with shipping terms. This is a faithful depiction of the satisfaction of the performance obligation because, at the point control passes to the customer, the customer has legal title and the risk and rewards of ownership have transferred, and the customer has present obligation to pay. For certain international customers, deposits are required in advance of shipment. These deposits are reported as contract liabilities until control passes to the customer and revenue is recognized. The Company’s Distillery Products segment routinely enters into bill and hold arrangements, whereby the Company produces and sells aged and unaged distillate to customers, and the product is barreled at the customer’s request and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers. Even though the aged and unaged distillate remains in the Company’s possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in bill and hold transactions when: customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product, and the risk and rewards of ownership have transferred to the customer. Additionally, all of the following bill and hold criteria have to be met in order for control to be transferred to the customer: the reason for the bill and hold arrangement is substantive - the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer. Warehouse services revenue is recognized over the time that warehouse services are rendered and as they are rendered. This is a faithful depiction of the satisfaction of the performance obligation because control of the aging products has already passed to the customer and there are no additional performance activities required by the Company, except as requested by the customer. The performance of the service activities, as requested, is invoiced as satisfied and revenue is concurrently recognized. |
Excise Taxes | Excise Taxes. The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department (the “TTB”) regulations which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcohol beverages in varying amounts. The Company calculates its Federal and state excise tax expense based upon units shipped and on its understanding of the applicable excise tax laws . |
Recognition of Insurance Recoveries | Recognition of Insurance Recoveries. Estimated loss contingencies are recognized as charges to income when they are probable and reasonably estimable. Insurance recoveries are not recognized until all contingencies related to the insurance claim have been resolved and settlement has been reached with the insurer. Insurance recoveries, to the extent of costs and losses, are reported as a reduction to costs on the Condensed Consolidated Statements of Income. Insurance recoveries, in |
Income Taxes | Income Taxes. The Company accounts for income taxes using an asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is recognized if it is “more likely than not” that at least some portion of the deferred tax asset will not be realized. |
Earnings Per Share ("EPS") | Earnings Per Share (“EPS”). Basic and diluted EPS are computed using the two-class method, which is an earnings allocation formula that determines net income per share for each class of Common Stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each year during the period. |
Translation of Foreign Currencies | Translation of Foreign Currencies. Assets and liabilities of Niche Drinks Co., Ltd. (“Niche”), a wholly-owned subsidiary of the Company whose functional currency is the British pound sterling, are translated to U.S. dollars using the exchange rate in effect at the condensed consolidated balance sheet date. Results of operations are translated using average rates during the period. Adjustments resulting from the translation process are included as a component of Accumulated other comprehensive income . |
Business Combinations | Business Combinations. Assets acquired and liabilities assumed during a business combination are generally recorded at fair market value as of the acquisition date. Goodwill is recognized to the extent that the purchase consideration exceeds the assets acquired and liabilities assumed. The Company uses its best estimate and third party valuation specialists to determine the fair value of the assets acquired and liabilities assumed. During the measurement period, which can be up to one year after the acquisition date, the Company can make adjustments to the fair value of the assets acquired and liabilities assumed, with the offset being an adjustment to goodwill. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets. The Company records goodwill and other indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and other indefinite-lived intangible assets to its respective reporting units. The Company evaluates goodwill for impairment at least annually, in the fourth quarter, or on an interim basis if events and circumstances occur that would indicate it is more likely than not that the fair value of a reporting unit is less than the carrying value. To the extent that the carrying amount exceeds fair value, an impairment of goodwill is recognized. Judgment is required in the determination of reporting units, the assignment of assets and liabilities to reporting units, including goodwill, and the determination of fair value of the reporting units. The Company separately evaluates indefinite-lived intangible assets for impairment. As of June 30, 2021, the Company determined that goodwill and indefinite-lived intangible assets were not impaired. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into three levels based upon the observability of inputs. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s short term financial instruments include cash and cash equivalents, accounts receivables and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market. |
Equity Method Investments | Equity Method Investments. The condensed consolidated financial statements include the results of Luxco and its affiliated companies since April 1, 2021, when the Company obtained control through the Merger. The Company holds 50 percent interests in DGL Destiladores, S.de R.L. de C.V. (“DGL”) and Agricola LG, S.de R.L. de C.V. (“Agricola”) (combined “LMX”), which are accounted for as equity method investments since the date of acquisition. At June 30, 2021, the investment in LMX was $5,739, which is recorded in Investment in joint ventures on the Condensed Consolidated Balance Sheet. During the quarter and year to date ended June 30, 2021, the Company recorded a $334 loss from our equity method investments, which is recorded in Other income (loss), net on the Condensed Consolidated Statement of Income. |
Recently Adopted Accounting Standard Updates | Recently Adopted Accounting Standard Updates. The Company did not adopt any new Accounting Standard Updates during the quarter ended June 30, 2021 |
Accounting Policies and Basis_3
Accounting Policies and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Inventory consists of the following: June 30, 2021 December 31, 2020 Finished goods $ 47,500 $ 16,414 Barreled distillate (bourbons and whiskeys) 151,441 105,445 Raw materials 21,850 6,954 Work in process 1,533 1,805 Maintenance materials 8,806 8,634 Other 1,162 1,759 Total $ 232,292 $ 141,011 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Sales by Segment | The following table presents the Company’s sales by segment and major products and services: Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Distillery Products Brown goods $ 43,766 $ 25,325 $ 86,807 $ 53,970 White goods 18,205 14,873 34,862 31,712 Premium beverage alcohol 61,971 40,198 121,669 85,682 Industrial alcohol 14,770 22,953 32,106 44,571 Food grade alcohol 76,741 63,151 153,775 130,253 Fuel grade alcohol 4,753 1,174 7,270 2,696 Distillers feed and related co-products 4,672 6,781 9,644 13,770 Warehouse services 4,182 3,699 8,283 7,600 Total Distillery Products 90,348 74,805 178,972 154,319 Branded Spirits Ultra premium 10,093 320 10,574 684 Premium 6,301 47 6,383 171 Mid 17,786 — 17,786 — Value 20,944 — 20,944 — Other 5,302 17 5,309 17 Total Branded Spirits 60,426 384 60,996 872 Ingredient Solutions Specialty wheat starches 12,598 9,122 22,820 19,334 Specialty wheat proteins 8,352 6,013 14,398 12,378 Commodity wheat starches 2,663 1,774 4,946 3,651 Commodity wheat proteins 552 462 1,130 1,088 Total Ingredient Solutions 24,165 17,371 43,294 36,451 Total sales $ 174,939 $ 92,560 $ 283,262 $ 191,642 |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the consideration paid for Luxco to the preliminary estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill. Consideration: Cash, net of assumed debt $ 150,078 Value of MGP Common Stock issued at close (a) 296,372 Fair value of total consideration transferred $ 446,450 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash $ 479 Receivables 29,675 Inventory 90,854 Prepaid expenses 1,454 Property, plant and equipment, net 41,279 Investments in joint ventures 5,085 Intangible assets (b) 219,500 Other assets 4,257 Total assets 392,583 Current maturities of long-term debt (c) 87,497 Accounts payable 14,453 Federal and state liquor taxes payable 8,352 Accrued expenses and other 2,832 Other noncurrent liabilities 784 Deferred income taxes 57,720 Total liabilities 171,638 Goodwill 225,505 Total $ 446,450 (a) The Company issued 5,007,833 shares of MGP Common Stock which was valued at $59.15 per share on April 1, 2021. The value of MGP Common Stock includes the preliminary working capital adjustment of $159 . (b) Intangible assets acquired includes trade names with an estimated fair value of $178,100 and distributor relationships with an estimated fair value of $41,400. |
Schedule of Pro Forma Information | The following table summarizes the unaudited pro forma financial results for the quarter and year to date ended June 30, 2021 and 2020, as if the Merger had occurred on January 1, 2020: Pro Forma Financial Information Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Sales $ 174,939 $ 141,686 $ 349,461 $ 289,894 Net income 28,124 12,589 34,419 15,990 Basic and diluted earnings per share 1.28 0.57 1.56 0.72 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of June 30, 2021, the expected future amortization expense related to definite-lived intangibles assets are as follows: Remainder of 2021 $ 1,035 2022 2,070 2023 2,070 2024 2,070 2025 2,070 Thereafter 31,567 Total $ 40,882 |
Schedule of Goodwill and Indefinite-lived Intangible Assets by Business Segment | Changes in carrying amount of goodwill by business segment were as follows: Distillery Products Branded Spirits Ingredient Solutions Total Balance, December 31, 2020 $ — $ 2,738 $ — $ 2,738 Acquisitions — 225,505 — 225,505 Balance, June 30, 2021 $ — $ 228,243 $ — $ 228,243 Changes in carrying amount of trade name intangible assets by business segment were as follows: Distillery Products Branded Spirits Ingredient Solutions Total Balance, December 31, 2020 $ — $ 890 $ — $ 890 Acquisitions — 178,100 — 178,100 Balance, June 30, 2021 $ — $ 178,990 $ — $ 178,990 |
Corporate Borrowings (Tables)
Corporate Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Indebtedness | The following table presents the Company’s outstanding indebtedness: Description (a) June 30, 2021 December 31, 2020 Credit Agreement - Revolver, 1.09% (variable rate) due 2025 $ 232,000 $ — Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 20,000 20,000 Prudential Note Purchase Agreement, 3.80% (fixed rate) due 2029 20,000 20,000 Other long-term borrowings 216 — Total indebtedness outstanding 272,216 40,000 Less unamortized loan fees (b) (1,825) (129) Total indebtedness outstanding, net 270,391 39,871 Less current maturities of long-term debt (3,227) (1,600) Long-term debt and Credit Agreement - Revolver $ 267,164 $ 38,271 (a) Interest rates are as of June 30, 2021. (b) Loan fees are being amortized over the life of the Credit Agreement and Note Purchase Agreement. |
Equity and EPS (Tables)
Equity and EPS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of Basic and Diluted EPS | The computations of basic and diluted EPS: Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Operations: Net income (a) $ 20,059 $ 8,490 $ 35,486 $ 18,332 Less: Income attributable to participating securities (b) 150 57 299 123 Less: net loss attributable to noncontrolling interest (76) — (76) — Net income attributable to MGP Ingredients, Inc. $ 19,985 $ 8,433 $ 35,263 $ 18,209 Share information: Basic and diluted weighted average common shares (c) 21,916,721 16,899,079 19,436,143 16,956,502 Basic and diluted EPS $ 0.91 $ 0.50 $ 1.81 $ 1.07 (a) Net income attributable to all shareholders. (b) Participating securities included 166,674 and 116,127 unvested restricted stock units (“RSUs”), at June 30, 2021 and 2020, respectively. (c) Under the two-class method, basic and diluted weighted average common shares at June 30, 2021 and 2020 exclude unvested participating securities. |
Schedule of Common Stock Activity | The Common Stock share activity: Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2021 437 16,915,862 Issuance of Common Stock — 35,114 Repurchase of Common Stock (a) — (10,376) Balance, March 31, 2021 437 16,940,600 Issuance of Common Stock — 5,022,122 Repurchase of Common Stock (a) — (1,489) Balance, June 30, 2021 437 21,961,233 Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2020 437 17,028,125 Issuance of Common Stock — 36,545 Repurchase of Common Stock (b) — (169,148) Balance, March 31, 2020 437 16,895,522 Issuance of Common Stock — — Repurchase of Common Stock (a) — — Balance, June 30, 2020 437 16,895,522 (a) The Common Stock repurchases were for tax withholding on equity based compensation (b) 159,104 shares that were repurchased during the quarter ended March 31, 2020 related to the share repurchase program. The remaining shares repurchased were related to tax withholding on equity based compensation |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Quarter Ended June 30, Year to Date Ended June 30, 2021 2020 2021 2020 Sales to Customers Distillery Products $ 90,348 $ 74,805 $ 178,972 $ 154,319 Branded Spirits 60,426 384 60,996 872 Ingredient Solutions 24,165 17,371 43,294 36,451 Total $ 174,939 $ 92,560 $ 283,262 $ 191,642 Gross Profit Distillery Products $ 31,985 $ 15,854 $ 60,230 $ 33,913 Branded Spirits 18,434 148 18,520 338 Ingredient Solutions 6,408 4,700 10,376 9,662 Total $ 56,827 $ 20,702 $ 89,126 $ 43,913 Depreciation and Amortization Distillery Products $ 2,652 $ 2,417 $ 5,205 $ 4,808 Branded Spirits 1,709 30 1,738 40 Ingredient Solutions 481 469 956 922 Corporate 273 304 526 574 Total $ 5,115 $ 3,220 $ 8,425 $ 6,344 Income (loss) before Income Taxes Distillery Products $ 31,315 $ 15,364 $ 58,178 $ 32,732 Branded Spirits 7,113 (930) 5,889 $ (2,065) Ingredient Solutions 5,735 4,099 8,907 8,313 Corporate (17,692) (7,493) (26,461) (14,874) Total $ 26,471 $ 11,040 $ 46,513 $ 24,106 |
Schedule of Segment Reporting Identifiable Assets | The following table allocates assets to each segment as of: June 30, 2021 December 31, 2020 Identifiable Assets Distillery Products $ 285,451 $ 281,721 Branded Spirits 644,763 6,348 Ingredient Solutions 41,324 41,276 Corporate 42,759 37,230 Total $ 1,014,297 $ 366,575 |
Accounting Policies and Basis_4
Accounting Policies and Basis of Presentation - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Finished goods | $ 47,500 | $ 16,414 |
Barreled distillate (bourbons and whiskeys) | 151,441 | 105,445 |
Raw materials | 21,850 | 6,954 |
Work in process | 1,533 | 1,805 |
Maintenance materials | 8,806 | 8,634 |
Other | 1,162 | 1,759 |
Total | $ 232,292 | $ 141,011 |
Accounting Policies and Basis_5
Accounting Policies and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($)segment | Jun. 30, 2021USD ($) | Apr. 01, 2021 | Dec. 31, 2020USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Debt instrument, fair value disclosure | $ 276,919 | $ 276,919 | $ 44,548 | |
Long-term debt, including current maturities | 270,391 | 270,391 | 39,871 | |
Investment in joint ventures | $ 5,739 | $ 5,739 | $ 0 | |
Dos Primos | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Noncontrolling ownership interest | 40.00% | 40.00% | ||
Dos Primos | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 60.00% | 60.00% | ||
LMX | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest | 50.00% | |||
Investment in joint ventures | $ 5,739 | $ 5,739 | ||
Loss from equity method investments | $ 334 | $ 334 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 174,939 | $ 92,560 | $ 283,262 | $ 191,642 |
Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 90,348 | 74,805 | 178,972 | 154,319 |
Branded Spirits | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 60,426 | 384 | 60,996 | 872 |
Ingredient Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 24,165 | 17,371 | 43,294 | 36,451 |
Premium beverage alcohol | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 61,971 | 40,198 | 121,669 | 85,682 |
Brown goods | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 43,766 | 25,325 | 86,807 | 53,970 |
White goods | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 18,205 | 14,873 | 34,862 | 31,712 |
Industrial alcohol | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 14,770 | 22,953 | 32,106 | 44,571 |
Food grade alcohol | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 76,741 | 63,151 | 153,775 | 130,253 |
Fuel grade alcohol | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 4,753 | 1,174 | 7,270 | 2,696 |
Distillers feed and related co-products | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 4,672 | 6,781 | 9,644 | 13,770 |
Warehouse services | Distillery Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 4,182 | 3,699 | 8,283 | 7,600 |
Ultra premium | Branded Spirits | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 10,093 | 320 | 10,574 | 684 |
Premium | Branded Spirits | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 6,301 | 47 | 6,383 | 171 |
Mid | Branded Spirits | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 17,786 | 0 | 17,786 | 0 |
Value | Branded Spirits | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 20,944 | 0 | 20,944 | 0 |
Other | Branded Spirits | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 5,302 | 17 | 5,309 | 17 |
Specialty wheat starches | Ingredient Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 12,598 | 9,122 | 22,820 | 19,334 |
Specialty wheat proteins | Ingredient Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 8,352 | 6,013 | 14,398 | 12,378 |
Commodity wheat starches | Ingredient Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 2,663 | 1,774 | 4,946 | 3,651 |
Commodity wheat proteins | Ingredient Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 552 | $ 462 | $ 1,130 | $ 1,088 |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) $ in Thousands | Apr. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 228,243 | $ 228,243 | $ 2,738 | |||
Luxco | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration paid | $ 237,500 | |||||
Common stock issued to acquire business (in shares) | 5,007,833 | |||||
Value of MGP Common Stock issued at close | $ 296,213 | |||||
Shares issued to acquire business as a percentage of outstanding common stock | 22.80% | |||||
Increase (decrease) in cash consideration | $ 75 | |||||
Increase (decrease) in stock consideration | 159 | |||||
Goodwill | 225,505 | |||||
Intangible assets | 219,500 | |||||
Sales | 59,298 | 59,298 | ||||
Income before income taxes | 6,520 | 6,520 | ||||
Transaction costs incurred | 6,738 | 8,628 | ||||
Adjustments to pro forma net income | (28,124) | $ (12,589) | (34,419) | $ (15,990) | ||
Luxco | Acquisition-related Costs | ||||||
Business Acquisition [Line Items] | ||||||
Adjustments to pro forma net income | 6,738 | 8,628 | ||||
Luxco | Acquisition-related Costs | Luxco | ||||||
Business Acquisition [Line Items] | ||||||
Adjustments to pro forma net income | 3,132 | |||||
Luxco | Fair Value Adjustment to Inventory | ||||||
Business Acquisition [Line Items] | ||||||
Adjustments to pro forma net income | $ 2,529 | $ 2,529 | ||||
Luxco | Trade Names | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | 178,100 | |||||
Luxco | Distribution Rights | ||||||
Business Acquisition [Line Items] | ||||||
Intangible assets | $ 41,400 | |||||
Weighted average useful life | 20 years |
Business Combination - Consider
Business Combination - Considerations Transferred (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash, net of assumed debt | $ 149,599 | $ 2,750 | ||
Goodwill | $ 228,243 | $ 2,738 | ||
Luxco | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Cash, net of assumed debt | $ 150,078 | |||
Value of MGP Common Stock issued at close | 296,372 | |||
Fair value of total consideration transferred | 446,450 | |||
Cash | 479 | |||
Receivables | 29,675 | |||
Inventory | 90,854 | |||
Prepaid expenses | 1,454 | |||
Property, plant and equipment, net | 41,279 | |||
Investments in joint ventures | 5,085 | |||
Intangible assets | 219,500 | |||
Other assets | 4,257 | |||
Total assets | 392,583 | |||
Current maturities of long-term debt | 87,497 | |||
Accounts payable | 14,453 | |||
Federal and state liquor taxes payable | 8,352 | |||
Accrued expenses and other | 2,832 | |||
Other noncurrent liabilities | 784 | |||
Deferred income taxes | 57,720 | |||
Total liabilities | 171,638 | |||
Goodwill | 225,505 | |||
Total | $ 446,450 | |||
Common stock issued to acquire business (in shares) | 5,007,833 | |||
Common stock price to acquire business (in US dollars per share) | $ 59.15 | |||
Luxco | Trade Names | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Intangible assets | $ 178,100 | |||
Luxco | Distribution Rights | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Intangible assets | $ 41,400 |
Business Combination - Schedule
Business Combination - Schedule of Pro Forma Information (Details) - Luxco - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Sales | $ 174,939 | $ 141,686 | $ 349,461 | $ 289,894 |
Net income | $ 28,124 | $ 12,589 | $ 34,419 | $ 15,990 |
Diluted earnings per sale (in US dollars per share) | $ 1.28 | $ 0.57 | $ 1.56 | $ 0.72 |
Basic earnings per sale (in US dollar per share) | $ 1.28 | $ 0.57 | $ 1.56 | $ 0.72 |
Acquisition-related Costs | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | $ (6,738) | $ (8,628) | ||
Fair Value Adjustment to Inventory | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net income | $ (2,529) | $ (2,529) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | Apr. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 518 | $ 518 | |
Luxco | Distribution Rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 40,882 | ||
Accumulated amortization | $ 518 | ||
Weighted average useful life | 20 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Expected Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2021 | $ 1,035 |
2022 | 2,070 |
2023 | 2,070 |
2024 | 2,070 |
2025 | 2,070 |
Thereafter | 31,567 |
Total | $ 40,882 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Goodwill and Indefinite-lived Intangible Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill balance at beginning of period | $ 2,738 |
Indefinite-lived intangible assets at beginning of period | 890 |
Goodwill acquired | 225,505 |
Indefinite-lived intangible assets acquired | 178,100 |
Goodwill balance at end of period | 228,243 |
Indefinite-lived intangible assets at end of period | 178,990 |
Distillery Products | |
Goodwill [Roll Forward] | |
Goodwill balance at beginning of period | 0 |
Indefinite-lived intangible assets at beginning of period | 0 |
Goodwill acquired | 0 |
Indefinite-lived intangible assets acquired | 0 |
Goodwill balance at end of period | 0 |
Indefinite-lived intangible assets at end of period | 0 |
Branded Spirits | |
Goodwill [Roll Forward] | |
Goodwill balance at beginning of period | 2,738 |
Indefinite-lived intangible assets at beginning of period | 890 |
Goodwill acquired | 225,505 |
Indefinite-lived intangible assets acquired | 178,100 |
Goodwill balance at end of period | 228,243 |
Indefinite-lived intangible assets at end of period | 178,990 |
Ingredient Solutions | |
Goodwill [Roll Forward] | |
Goodwill balance at beginning of period | 0 |
Indefinite-lived intangible assets at beginning of period | 0 |
Goodwill acquired | 0 |
Indefinite-lived intangible assets acquired | 0 |
Goodwill balance at end of period | 0 |
Indefinite-lived intangible assets at end of period | $ 0 |
Corporate Borrowings - Indebted
Corporate Borrowings - Indebtedness Outstanding (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total indebtedness outstanding | $ 272,216 | $ 40,000 |
Less unamortized loan fees | (1,825) | (129) |
Total indebtedness outstanding, net | 270,391 | 39,871 |
Less current maturities of long-term debt | (3,227) | (1,600) |
Long-term debt and Credit Agreement - Revolver | 267,164 | 38,271 |
Other long-term borrowings | ||
Debt Instrument [Line Items] | ||
Total indebtedness outstanding | 216 | 0 |
Credit Agreement - Revolver, 1.09% (variable rate) due 2025 | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total indebtedness outstanding | $ 232,000 | 0 |
Credit agreement, interest rate (as a percent) | 1.09% | |
Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total indebtedness outstanding | $ 20,000 | 20,000 |
Senior secured notes, stated interest rate (as a percent) | 3.53% | |
Prudential Note Purchase Agreement, 3.80% (fixed rate) due 2029 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total indebtedness outstanding | $ 20,000 | $ 20,000 |
Senior secured notes, stated interest rate (as a percent) | 3.80% |
Corporate Borrowings - Narrativ
Corporate Borrowings - Narrative (Details) - USD ($) | Apr. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | May 14, 2021 | Dec. 31, 2020 | Feb. 14, 2020 |
Debt Instrument [Line Items] | ||||||||
Outstanding borrowings under credit facility | $ 230,294,000 | $ 0 | ||||||
Total indebtedness outstanding | 272,216,000 | 40,000,000 | ||||||
Proceeds from credit agreement - revolver | 242,300,000 | $ 54,700,000 | ||||||
Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Contingent increase in borrowing capacity | $ 100,000,000 | |||||||
Credit Agreement - Revolver, 1.09% (variable rate) due 2025 | ||||||||
Debt Instrument [Line Items] | ||||||||
Outstanding borrowings under credit facility | $ 400,000,000 | $ 300,000,000 | ||||||
Credit Agreement - Revolver, 1.09% (variable rate) due 2025 | Luxco | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from credit agreement - revolver | $ 242,300,000 | |||||||
Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
New loan fees | 666,000 | |||||||
Credit Agreement - Revolver, 1.09% (variable rate) due 2025 | Line of Credit | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Total indebtedness outstanding | 232,000,000 | 0 | ||||||
Remaining borrowing capacity | 168,000,000 | |||||||
Note Purchase Agreement | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan face value | 20,000,000 | |||||||
Note Purchase Agreement | Secured Debt | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Term loan face value | 105,000,000 | |||||||
Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total indebtedness outstanding | 20,000,000 | 20,000,000 | ||||||
Proceeds from issuance of debt | $ 20,000,000 | |||||||
Prudential Note Purchase Agreement, 3.80% (fixed rate) due 2029 | Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total indebtedness outstanding | $ 20,000,000 | $ 20,000,000 | ||||||
Proceeds from issuance of debt | $ 20,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 6,412 | $ 2,550 | $ 11,027 | $ 5,774 |
Effective tax rate | 24.20% | 23.10% | 23.70% | 24.00% |
Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Equity and EPS - Computations (
Equity and EPS - Computations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Operations: | ||||||
Net income | $ 20,059 | $ 15,427 | $ 8,490 | $ 9,842 | $ 35,486 | $ 18,332 |
Less: Income attributable to participating securities, basic | 150 | 57 | 299 | 123 | ||
Less: Income attributable to participating securities, diluted | 150 | 57 | 299 | 123 | ||
Less: net loss attributable to noncontrolling interest | (76) | 0 | (76) | 0 | ||
Net income attributable to MGP Ingredients, Inc., basic | 19,985 | 8,433 | 35,263 | 18,209 | ||
Net income attributable to MGP Ingredients, Inc., diluted | $ 19,985 | $ 8,433 | $ 35,263 | $ 18,209 | ||
Share information: | ||||||
Basic weighted average common shares (in shares) | 21,916,721 | 16,899,079 | 19,436,143 | 16,956,502 | ||
Diluted weighted average common shares (in shares) | 21,916,721 | 16,899,079 | 19,436,143 | 16,956,502 | ||
Basic Earnings Per Share (in dollars per share) | $ 0.91 | $ 0.50 | $ 1.81 | $ 1.07 | ||
Diluted Earnings Per Share (in dollars per share) | $ 0.91 | $ 0.50 | $ 1.81 | $ 1.07 | ||
Restricted Stock Units (RSUs) | ||||||
Share information: | ||||||
Participating securities (in shares) | 166,674 | 116,127 |
Equity and EPS - Narrative (Det
Equity and EPS - Narrative (Details) - USD ($) | Apr. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Feb. 25, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share repurchase authorization, amount | $ 25,000,000 | |||
Stock repurchased during the period (in shares) | 0 | 159,104 | ||
Remaining authorized repurchase amount | $ 20,947,000 | |||
Stock repurchased during period | $ 4,053,000 | |||
Luxco | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock issued to acquire business (in shares) | 5,007,833 | |||
Shares issued to acquire business as a percentage of outstanding common stock | 22.80% |
Equity and EPS - Schedule of Co
Equity and EPS - Schedule of Common Stock Activity (Details) - shares | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of Common Stock (in shares) | 0 | (159,104) | ||||
Capital Stock Preferred | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares outstanding at beginning of period (in shares) | 437 | 437 | 437 | 437 | 437 | 437 |
Issuance of Common Stock (in shares) | 0 | 0 | 0 | 0 | ||
Repurchase of Common Stock (in shares) | 0 | 0 | 0 | 0 | ||
Shares outstanding at end of period (in shares) | 437 | 437 | 437 | 437 | 437 | 437 |
Issued Common | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares outstanding at beginning of period (in shares) | 16,940,600 | 16,915,862 | 16,895,522 | 17,028,125 | 16,915,862 | 17,028,125 |
Issuance of Common Stock (in shares) | 5,022,122 | 35,114 | 0 | 36,545 | ||
Repurchase of Common Stock (in shares) | (1,489) | (10,376) | 0 | (169,148) | ||
Shares outstanding at end of period (in shares) | 21,961,233 | 16,940,600 | 16,895,522 | 16,895,522 | 21,961,233 | 16,895,522 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Dryer Fire $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021USD ($) | Jun. 30, 2021USD ($) | |
Loss Contingencies [Line Items] | ||
Commitment received from insurance | $ 11,300 | $ 11,300 |
Proceeds from insurance recoveries | 6,230 | 9,840 |
Insurance recovery obtained prior to contingencies | $ 11,400 | $ 11,400 |
Employee and Non-Employee Ben_2
Employee and Non-Employee Benefit Plans (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)planshares | Jun. 30, 2020USD ($)shares | Dec. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of active equity-based compensation plans | plan | 2 | ||||
Gain (loss) on deferred compensation plan investments | $ | $ 246 | $ 331 | $ 276 | $ 167 | |
EDC plan investments | $ | 3,558 | 3,558 | $ 2,007 | ||
EDC plan current liabilities | $ | 897 | 897 | |||
EDC plan noncurrent liabilities | $ | $ 2,924 | $ 2,924 | $ 3,140 | ||
The 2014 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares approved (in shares) | 1,500,000 | 1,500,000 | |||
The Director's Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares approved (in shares) | 300,000 | 300,000 | |||
Restricted Stock Units (RSUs), granted | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
RSUs outstanding (in shares) | 171,824 | 171,824 | |||
Participating securities (in shares) | 166,674 | 116,127 | |||
Restricted Stock Units (RSUs), granted | The 2014 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants in period (in shares) | 516,861 | ||||
Restricted Stock Units (RSUs), granted | The Director's Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants in period (in shares) | 120,619 |
Operating Segments - Narrative
Operating Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Operating Segments - Operating
Operating Segments - Operating Profit (Loss) Per Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Sales to Customers | $ 174,939 | $ 92,560 | $ 283,262 | $ 191,642 |
Gross Profit | 56,827 | 20,702 | 89,126 | 43,913 |
Depreciation and Amortization | 5,115 | 3,220 | 8,425 | 6,344 |
Income (loss) before Income Taxes | 26,471 | 11,040 | 46,513 | 24,106 |
Distillery Products | ||||
Segment Reporting Information [Line Items] | ||||
Sales to Customers | 90,348 | 74,805 | 178,972 | 154,319 |
Gross Profit | 31,985 | 15,854 | 60,230 | 33,913 |
Branded Spirits | ||||
Segment Reporting Information [Line Items] | ||||
Sales to Customers | 60,426 | 384 | 60,996 | 872 |
Gross Profit | 18,434 | 148 | 18,520 | 338 |
Ingredient Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Sales to Customers | 24,165 | 17,371 | 43,294 | 36,451 |
Gross Profit | 6,408 | 4,700 | 10,376 | 9,662 |
Operating Segments | Distillery Products | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and Amortization | 2,652 | 2,417 | 5,205 | 4,808 |
Income (loss) before Income Taxes | 31,315 | 15,364 | 58,178 | 32,732 |
Operating Segments | Branded Spirits | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and Amortization | 1,709 | 30 | 1,738 | 40 |
Income (loss) before Income Taxes | 7,113 | (930) | 5,889 | (2,065) |
Operating Segments | Ingredient Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and Amortization | 481 | 469 | 956 | 922 |
Income (loss) before Income Taxes | 5,735 | 4,099 | 8,907 | 8,313 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and Amortization | 273 | 304 | 526 | 574 |
Income (loss) before Income Taxes | $ (17,692) | $ (7,493) | $ (26,461) | $ (14,874) |
Operating Segments - Identifiab
Operating Segments - Identifiable Assets by Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,014,297 | $ 366,575 |
Operating Segments | Distillery Products | ||
Segment Reporting Information [Line Items] | ||
Assets | 285,451 | 281,721 |
Operating Segments | Branded Spirits | ||
Segment Reporting Information [Line Items] | ||
Assets | 644,763 | 6,348 |
Operating Segments | Ingredient Solutions | ||
Segment Reporting Information [Line Items] | ||
Assets | 41,324 | 41,276 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 42,759 | $ 37,230 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 02, 2021 | Jul. 29, 2021 | Jun. 30, 2021 |
Note Purchase Agreement | Secured Debt | |||
Subsequent Event [Line Items] | |||
Senior promissory notes to be issued under agreement | $ 20,000,000 | ||
Revolving Credit Facility | Note Purchase Agreement | Secured Debt | |||
Subsequent Event [Line Items] | |||
Senior promissory notes to be issued under agreement | $ 105,000,000 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividend declared (in USD per share) | $ 0.12 | ||
Subsequent Event | Revolving Credit Facility | Note Purchase Agreement | Secured Debt | |||
Subsequent Event [Line Items] | |||
Senior promissory notes to be issued under agreement | $ 140,000,000 |