COVER PAGE
COVER PAGE - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 17, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
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, Box 130 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,450,318,313 | ||
Entity Common Stock, Shares Outstanding (in shares) | 22,000,638 | ||
Documents Incorporated by Reference | Portions of the MGP Ingredients, Inc. Proxy Statement for the Annual Meeting of Stockholders to be held on May 25, 2023 are incorporated by reference into Part III of this report to the extent set forth herein. | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000835011 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Auditor Information [Abstract] | |
Auditor firm ID | 185 |
Auditor name | KPMG LLP |
Auditor location | Kansas City, Missouri |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Sales to customers: | $ 782,358 | $ 626,720 | $ 395,521 |
Cost of sales | 529,052 | 427,755 | 296,715 |
Gross profit | 253,306 | 198,965 | 98,806 |
Advertising and promotion expenses | 29,714 | 16,098 | 2,712 |
Selling, general, and administrative expenses | 74,627 | 72,829 | 41,853 |
Insurance recoveries | 0 | (16,325) | 0 |
Operating income | 148,965 | 126,363 | 54,241 |
Interest expense, net | (5,451) | (4,037) | (2,267) |
Other income (loss), net | (3,342) | (1,230) | 627 |
Income before income taxes | 140,172 | 121,096 | 52,601 |
Income tax expense | 31,300 | 30,279 | 12,256 |
Net income | 108,872 | 90,817 | 40,345 |
Net loss attributable to noncontrolling interest | 590 | 490 | 0 |
Net income attributable to MGP Ingredients, Inc. | 109,462 | 91,307 | 40,345 |
Income attributable to participating securities, basic | (871) | (712) | (261) |
Income attributable to participating securities, diluted | (871) | (712) | (261) |
Net income used in Earnings Per Share calculation, basic | 108,591 | 90,595 | 40,084 |
Net income used in Earnings Per Share calculation, diluted | $ 108,591 | $ 90,595 | $ 40,084 |
Weighted average common shares | |||
Weighted average common shares, basic (in shares) | 22,002,990 | 20,719,663 | 16,937,125 |
Weighted average common shares, diluted (in shares) | 22,053,966 | 20,719,663 | 16,937,125 |
Earnings per common share | |||
Earnings per share, basic (in USD per share) | $ 4.94 | $ 4.37 | $ 2.37 |
Earnings per share, diluted (in USD per share) | $ 4.92 | $ 4.37 | $ 2.37 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net income attributable to MGP Ingredients, Inc. | $ 109,462 | $ 91,307 | $ 40,345 |
Other comprehensive income (loss), net of tax: | |||
Unrealized loss on foreign currency translation adjustment | (676) | (151) | 0 |
Changes in Company-sponsored post-employment benefit plan | 18 | 19 | 732 |
Other comprehensive income (loss) | (658) | (132) | 732 |
Comprehensive income attributable to MGP Ingredients, Inc. | 108,804 | 91,175 | 41,077 |
Comprehensive loss attributable to noncontrolling interest | (590) | (490) | 0 |
Comprehensive income | $ 108,214 | $ 90,685 | $ 41,077 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 47,889 | $ 21,568 |
Receivables (less allowance for credit loss of $1,475 and $150 at December 31, 2022 and 2021, respectively) | 109,267 | 92,537 |
Inventory | 289,722 | 245,944 |
Prepaid expenses | 2,957 | 1,510 |
Refundable income taxes | 4,327 | 5,539 |
Total current assets | 454,162 | 367,098 |
Property, plant, and equipment, net | 235,632 | 207,286 |
Operating lease right-of-use assets, net | 15,042 | 9,671 |
Investment in joint venture | 5,534 | 4,944 |
Intangible assets, net | 216,768 | 218,838 |
Goodwill | 226,294 | 226,294 |
Other assets | 4,779 | 7,336 |
Total assets | 1,158,211 | 1,041,467 |
Current Liabilities | ||
Current maturities of long-term debt | 5,600 | 3,227 |
Accounts payable | 66,432 | 53,712 |
Federal and state excise taxes payable | 4,627 | 6,992 |
Accrued expenses and other | 28,716 | 24,869 |
Total current liabilities | 105,375 | 88,800 |
Long-term debt, less current maturities | 29,510 | 35,266 |
Convertible senior notes | 195,225 | 194,906 |
Long-term operating lease liabilities | 11,622 | 6,997 |
Other noncurrent liabilities | 3,723 | 5,132 |
Deferred income taxes | 67,112 | 66,101 |
Total liabilities | 412,567 | 397,202 |
Commitments and Contingencies – Note 10 | ||
Capital stock | ||
Preferred, 5% non-cumulative; $10 par value; authorized 1,000 shares; issued and outstanding 437 shares | 4 | 4 |
Common stock | ||
No par value; authorized 40,000,000 shares; issued 23,125,166 shares at December 31, 2022 and 2021; 21,994,042 and 21,964,314 shares outstanding at December 31, 2022 and 2021, respectively | 6,715 | 6,715 |
Additional paid-in capital | 318,839 | 315,802 |
Retained earnings | 443,061 | 344,237 |
Accumulated other comprehensive income | (304) | 354 |
Treasury stock, at cost, 1,131,124 and 1,160,852 shares at December 31, 2022 and 2021, respectively | (21,591) | (22,357) |
Total MGP Ingredients, Inc. stockholders equity | 746,724 | 644,755 |
Noncontrolling interest | (1,080) | (490) |
Total equity | 745,644 | 644,265 |
Total liabilities and equity | $ 1,158,211 | $ 1,041,467 |
Common stock, issued (in shares) | 23,125,166 | 23,125,166 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Financial Position [Abstract] | ||
Receivables, allowance for credit losses | $ 1,475 | $ 150 |
Preferred stock, percentage of non-cumulative | 5% | 5% |
Preferred stock, par value (in dollars per share) | $ 10 | $ 10 |
Preferred stock, authorized (in shares) | 1,000 | 1,000 |
Preferred stock, issued (in shares) | 437 | 437 |
Preferred stock, outstanding (in shares) | 437 | 437 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, issued (in shares) | 23,125,166 | 23,125,166 |
Common stock, outstanding (in shares) | 21,994,042 | 21,964,314 |
Treasury stock (in shares) | 1,131,124 | 1,160,852 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | |||
Net income | $ 108,872 | $ 90,817 | $ 40,345 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 21,455 | 19,092 | 12,961 |
Gain on insurance recoveries | 0 | (16,325) | 0 |
Share-based compensation | 5,502 | 5,555 | 3,002 |
Equity method investment loss | 2,220 | 1,611 | 0 |
Deferred income taxes, including change in valuation allowance | 1,011 | 6,772 | 593 |
Other, net | 194 | 145 | 494 |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Receivables, net | (16,786) | (6,031) | (16,173) |
Inventory | (44,350) | (14,214) | (3,886) |
Prepaid expenses | (1,468) | 2,586 | (748) |
Income taxes payable (refundable) | 1,212 | (6,242) | 1,750 |
Accounts payable | 10,626 | 5,301 | 1,817 |
Accrued expenses and other | 1,984 | 738 | 11,537 |
Federal and state excise taxes payable | (2,365) | (1,467) | (34) |
Other, net | 829 | (75) | 1,597 |
Net cash provided by operating activities | 88,936 | 88,263 | 53,255 |
Cash Flows from Investing Activities | |||
Additions to property, plant, and equipment | (45,323) | (47,389) | (19,701) |
Purchase of business, net of cash acquired | 0 | (149,005) | (2,750) |
Contributions to equity method investments | (2,810) | (1,470) | 0 |
Proceeds from property insurance recoveries | 0 | 16,325 | 0 |
Proceeds from sale of property and other | 150 | 0 | 2,906 |
Other, net | 170 | (1,080) | (102) |
Net cash used in investing activities | (47,813) | (182,619) | (19,647) |
Cash Flows from Financing Activities | |||
Payment of dividends and dividend equivalents | (10,646) | (10,017) | (8,188) |
Purchase of treasury stock | (715) | (767) | (4,411) |
Loan fees incurred with borrowings | 0 | (7,050) | (1,148) |
Principal payments on long-term debt | (3,403) | (1,620) | (1,208) |
Proceeds from credit agreement - revolver | 0 | 242,300 | 54,700 |
Payments on credit agreement - revolver | 0 | (242,300) | (55,000) |
Proceeds from convertible senior notes | 0 | 201,250 | 0 |
Payment on assumed debt as part of the Merger | 0 | (87,509) | 0 |
Net cash provided by (used in) financing activities | (14,764) | 94,287 | (15,255) |
Effect of exchange rate changes on cash and cash equivalents | (38) | (25) | 0 |
Increase (decrease) in cash and cash equivalents | 26,321 | (94) | 18,353 |
Cash and cash equivalents, beginning of year | 21,568 | 21,662 | 3,309 |
Cash and cash equivalents, end of year | $ 47,889 | $ 21,568 | $ 21,662 |
CONSOLIDATED STATEMENTS OF CHAN
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 (Loss) | Treasury Stock | Non-Controlling Interest |
Beginning Balance at Dec. 31, 2019 | $ 231,044 | $ 4 | $ 6,715 | $ 14,029 | $ 230,784 | $ (246) | $ (20,242) | $ 0 |
Comprehensive income (loss): | ||||||||
Net income | 40,345 | 40,345 | ||||||
Other comprehensive income (loss) | 732 | 732 | ||||||
Dividends and dividend equivalents per common shares and per restricted stock units, net of estimated forfeitures | (8,186) | (8,186) | ||||||
Share-based compensation | 2,067 | 2,067 | ||||||
Stock shares awarded, forfeited or vested | 935 | (593) | 1,528 | |||||
Stock shares repurchased | (4,411) | (4,411) | ||||||
Ending Balance at Dec. 31, 2020 | 262,526 | 4 | 6,715 | 15,503 | 262,943 | 486 | (23,125) | 0 |
Comprehensive income (loss): | ||||||||
Net income | 90,817 | 91,307 | ||||||
Other comprehensive income (loss) | (132) | (132) | ||||||
Dividends and dividend equivalents per common shares and per restricted stock units, net of estimated forfeitures | (10,013) | (10,013) | ||||||
Share-based compensation | 5,555 | 5,555 | ||||||
Stock shares awarded, forfeited or vested | 0 | (1,535) | 1,535 | |||||
Stock shares repurchased | (767) | (767) | ||||||
Equity consideration for Merger | 296,279 | 296,279 | ||||||
Ending Balance at Dec. 31, 2021 | 644,265 | 4 | 6,715 | 315,802 | 344,237 | 354 | (22,357) | (490) |
Comprehensive income (loss): | ||||||||
Net income | 108,872 | 109,462 | (590) | |||||
Other comprehensive income (loss) | (658) | (658) | ||||||
Dividends and dividend equivalents per common shares and per restricted stock units, net of estimated forfeitures | (10,638) | (10,638) | ||||||
Share-based compensation | 4,518 | 4,518 | ||||||
Stock shares awarded, forfeited or vested | 0 | (1,481) | 1,481 | |||||
Stock shares repurchased | (715) | (715) | ||||||
Ending Balance at Dec. 31, 2022 | $ 745,644 | $ 4 | $ 6,715 | $ 318,839 | $ 443,061 | $ (304) | $ (21,591) | $ (1,080) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||||||
Dividends and dividend equivalents (in USD per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | $ 0.48 | $ 0.48 |
NATURE OF OPERATIONS AND SUMMAR
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company. MGP Ingredients, Inc. (“MGP,” or the “Company”) is a leading producer and supplier of premium distilled spirits, branded spirits and food ingredients. Distilled spirits include premium bourbon, rye, and other whiskeys and grain neutral spirits (“GNS”), including vodka and gin. Our distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits. MGP is also a producer of high quality industrial alcohol for use in both food and non-food applications. The Company has a portfolio of its own high quality branded spirits which are produce through the distilleries and bottling facilities and sell to distributors. The Company’s branded spirits products account for a range of price points from value products through ultra premium brands, with a focus on high-end American whiskey, tequila and gin. 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 consumer packaged goods industry. The ingredients products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries. The Company reports three operating segments: Distilling Solutions, Branded Spirits and Ingredient Solutions. During 2022, the Company changed the name of its Distillery Products segment to Distilling Solutions. Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the 2020 and 2021 consolidated financial statements have been reclassified to conform to the 2022 presentation. Use of Estimates. The financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of 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 effects related to the COVID-19 pandemic. 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. Bourbons, ryes, and other whiskeys, included in inventory, are normally aged in barrels for several years, following industry practice; all barreled bourbon, rye, and other whiskeys 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 the 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. Properties, Depreciation, and Amortization. Property, plant, and equipment are typically stated at cost. Additions, including those that increase the life or utility of an asset, are capitalized and all properties are depreciated over their estimated remaining useful lives. Depreciation and amortization are computed using the straight line method over the following estimated useful lives: Buildings and improvements (a) 10 – 35 years Machinery and equipment 3 – 10 years Office furniture and equipment 5 – 10 years Computer equipment and software 3 – 5 years Motor vehicles 5 years (a) Leasehold improvements are the shorter of economic useful life or life of lease Maintenance costs are expensed as incurred. The cost of property, plant, and equipment sold, retired, or otherwise disposed of, as well as related accumulated depreciation and amortization, are eliminated from the property accounts with related gains and losses reflected in the Consolidated Statements of Income. The Company capitalizes interest costs associated with significant construction projects. Total interest incurred for 2022, 2021, and 2020 is noted below: Year Ended December 31, 2022 2021 2020 Interest costs charged to expense $ 5,451 $ 4,037 $ 2,267 Plus: Interest cost capitalized 866 339 246 Total $ 6,317 $ 4,376 $ 2,513 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 that 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. The Company’s Distilling Solutions 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 the following bill and hold criteria have been 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 service 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. Contract bottling is recognized over the time contract bottling services are rendered and as they are rendered. Sales in the Branded Spirits segment reflect reductions attributable to consideration given to customers in incentive programs, including discounts and allowances for certain volume targets. These allowances and discounts are not for distinct goods and are paid only when the depletion volume targets are achieved by the customer. The amounts reimbursed to customers are determined based on agreed-upon amounts and are recorded as a reduction of revenue. Excise Tax. 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 and expense. 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 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 Consolidated Statements of Income. 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 December 31, 2021, the Company received a legally binding commitment from its insurance carrier for final settlement of $43,688, $27,363 related to business interruption and $16,325 for the damaged dryer. As of December 31, 2021, $7,188 of the insurance recovery was recorded as receivables on the Consolidated Balance Sheet. The Company recorded a settlement related to business interruption from its insurance carrier of $23,583 and $3,780 for the years ended December 31, 2021 and 2020, respectively. The business interruption portion of the settlement was recorded as a reduction of cost of sales on the Consolidated Statements of Income and the insurance recoveries for the replacement of the damaged dryer was recorded as insurance recoveries on the Consolidated Statements of Income. The Company finalized the construction of the replacement drying system and placed this dryer into service during 2021. 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 Common Share (“EPS”). Basic and diluted EPS is 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. Basic EPS amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each period. Diluted EPS is computed using the if-converted method by dividing the net income attributable to common shareholders by the weighted average shares outstanding, inclusive of the impact of the Convertible Senior Notes, except for where the result would be anti-dilutive as of the balance sheet date. 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 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. The Company maintains a US bank account denominated in British pound sterling and is adjusted for the market exchange rate at the reporting period-end. Any impacts of the adjustment for the exchange rate applied to the financial asset is reported in other income (loss), net on the Consolidated Statements of Income. Business Combinations. Assets 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 value of 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 Other 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 and allocated to the reporting units. 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 December 31, 2022, 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 receivable 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. Excluding the impact of the conversion feature of the convertible note, the fair value of the Company’s debt was $150,249 and $272,971 at December 31, 2022 and 2021, respectively. The financial statement carrying value (including unamortized loan fees) was $230,335 and $233,399 at December 31, 2022 and 2021, respectively. These fair values are considered Level 2 under the fair value hierarchy. See Note 4, Business Combination, for discussion related the the fair value of tangible and intangible assets acquired and liabilities assumed as part of the merger with Luxco. Derivative Instruments. Certain commodities the Company uses in its production process, or input costs, expose it to market price risk due to volatility in the prices for those commodities. Through the Company’s grain supply contracts for its Atchison and Lawrenceburg facilities, its wheat flour supply contract for the Atchison facility, and its natural gas contracts for both facilities, it purchases grain, wheat flour, and natural gas, respectively, for delivery from one Derivatives and Hedging , because the quantities involved are for amounts to be consumed within the normal expected production process. Equity Method Investments. The 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 interest 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. At December 31, 2022 and 2021, the investment in LMX was $5,534 and $4,944, respectively, which is recorded in investment in joint ventures on the Consolidated Balance Sheets. During the years ended December 31, 2022 and 2021, the Company recorded a $2,220 and $1,611 loss from equity method investments, respectively, which is recorded in other income (loss), net on the Consolidated Statements of Income. Immaterial Correction to Prior Period Financial Statements. During the year ended December 31, 2022, the Company identified an immaterial correction related to gross amounts of property, plant and equipment and accumulated depreciation and amortization in the Consolidated Balance Sheet as of December 31, 2021. The Company performed a materiality assessment, considering both quantitative and qualitative factors, which resulted in the determination that the correction to the financial statements was immaterial. As such, the Company corrected the December 31, 2021 gross balances for property, plant, and equipment and accumulated depreciation and amortization in Note 2, Other Balance Sheet Captions, in this Form 10-K by equal and offsetting amounts, which resulted in no change to the balance of property, plant, and equipment, net. During the year ended December 31, 2022, the Company identified an immaterial correction related to the calculation of diluted earnings per share within the year ended December 31, 2021 financial statements filed on Form 10-K. Other than as follows, this correction had no impact on the financial statements for the year ended December 31, 2021. For the period ended December 31, 2021, diluted earnings per share should have been $4.37 instead of $4.34. The Company performed a materiality assessment, considering both quantitative and qualitative factors, which resulted in the determination that the correction to the financial statements is immaterial. As such, the Company corrected the December 31, 2021 diluted earnings per share on the Consolidated Statements of Income in this Form 10-K. Recently Adopted Accounting Standard Updates. ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue Recognition . This ASU is effective for annual and interim periods beginning after December 15, 2022. Early adoption is permitted. The Company has adopted this standard and it did not have an impact to the Company’s consolidated financial statements and related disclosures. ASU 2020-04, Facilitation of Effects of Reference Rate Reform on Financial Reporting , which provide optional expedients and exceptions for a period of time to help facilitate the adoption of reference rate reform and the impact on financial reporting. This guidance was effective for all entities as of March 12, 2020 through December 31, 2022. ASU 2022-06 , Deferral of the Sunset Date of Topic 848, which extends the effective date fro December 31, 2022 to December 31, 2024. The Company has adopted these standards and it did not have an impact to the Company’s consolidated financial statements and related disclosures. |
OTHER BALANCE SHEET CAPTIONS
OTHER BALANCE SHEET CAPTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
OTHER BALANCE SHEET CAPTIONS | OTHER BALANCE SHEET CAPTIONS Inventory. December 31, 2022 2021 Finished goods $ 47,073 $ 35,362 Barreled distillate (bourbons and other whiskeys) 199,040 174,080 Raw materials 29,931 24,981 Work in process 1,645 1,261 Maintenance materials 9,931 9,179 Other 2,102 1,081 Total $ 289,722 $ 245,944 Property, plant, and equipment, net. December 31, 2022 2021 Land, buildings, and improvements $ 155,385 $ 150,367 Transportation equipment 805 697 Machinery and equipment 257,075 236,352 Construction in progress 37,535 16,733 Property, plant, and equipment, at cost 450,800 404,149 Less accumulated depreciation and amortization (215,168) (196,863) Property, plant, and equipment, net $ 235,632 $ 207,286 Accrued expenses. December 31, 2022 2021 Employee benefit plans $ 2,389 $ 1,427 Salaries and wages 17,862 16,466 Property taxes 1,318 1,495 Current operating lease liabilities 3,807 2,865 Other 3,340 2,616 Total $ 28,716 $ 24,869 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUE | REVENUEThe Company generates revenues from the Distilling Solutions segment by the sale of products and by providing warehouse services related to the storage and aging of customer products. The Company generates revenue from the Branded Spirits segment by the sale of products and by providing contract bottling services. The Company generates revenue from the Ingredient Solutions segment by the sale of products. Revenue related to sales of products is recognized at a point in time whereas revenue generated from warehouse services and contract bottling services are recognized over time. Contracts with customers include a single performance obligation (either the sale of products or the provision of warehouse services and contract bottling service). Disaggregation of Sales. The following table presents the Company’s sales disaggregated by segment and major products and services. Year Ended December 31, 2022 2021 2020 Distilling Solutions Brown Goods $ 229,523 $ 162,074 $ 121,384 White Goods 74,510 75,818 63,873 Premium beverage alcohol 304,033 237,892 185,257 Industrial alcohol 46,812 62,628 80,682 Food grade alcohol 350,845 300,520 265,939 Fuel grade alcohol 13,681 14,916 5,630 Distillers feed and related co-products 40,354 19,545 26,109 Warehouse services 23,598 17,523 15,631 Total Distilling Solutions 428,478 352,504 313,309 Branded Spirits Ultra premium 48,245 27,722 1,785 Super premium 12,274 8,937 2,196 Premium 24,211 17,626 125 Premium plus 84,730 54,285 4,106 Mid 82,530 71,292 — Value 47,395 38,520 — Other 23,284 19,469 43 Total Branded Spirits 237,939 183,566 4,149 Ingredient Solutions Specialty wheat starches 62,567 47,758 41,631 Specialty wheat proteins 39,313 31,485 26,960 Commodity wheat starch 14,023 10,014 7,630 Commodity wheat protein 38 1,393 1,842 Total Ingredient Solutions 115,941 90,650 78,063 Total sales $ 782,358 $ 626,720 $ 395,521 |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2022 | |
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, Luxco became a wholly-owned subsidiary of MGP and is 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 was subject to customary purchase price adjustments related to, among other things, net working capital, acquired cash and assumed debt. The consideration paid at closing included a preliminary estimated purchase price adjustment. In September 2021, the parties finalized the purchase price adjustment, which decreased the cash consideration paid by approximately $608 and increased stock consideration by an additional 1,373 shares from the preliminary amounts that were paid at closing. 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. 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. Purchase Price Allocation. The Merger was accounted for as a business combination in accordance with Financial Accounting Standards Board Accounting Standard Codification 805, Business Combinations (“ASC 805”), and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date. The following table summarizes the allocation of the consideration paid for Luxco to the 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 $ 149,484 Value of MGP Common Stock issued at close (a) 296,279 Fair value of total consideration transferred $ 445,763 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) 87,509 Accounts payable 14,453 Federal and state excise taxes payable 8,352 Accrued expenses and other 2,832 Other noncurrent liabilities 196 Deferred income taxes 57,034 Total liabilities 170,376 Goodwill 223,556 Total $ 445,763 (a) The Company issued 5,007,833 shares of MGP Common Stock which was valued at $59.15 per share on April 1, 2021. In September 2021, the parties finalized the purchase price adjustments which increased stock consideration by an additional 1,373 shares from the preliminary amounts that were paid at closing. (b) Intangible assets acquired included 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. The fair value of personal property assets was determined using the market approach and the indirect and direct method of the cost approach, and the fair value of real property was determined using the cost approach and and the sales comparison approach. Goodwill of $223,556, none of which is expected to be deductible for tax purposes, represents the excess of the consideration transferred over the estimated fair value of assets acquired net of liabilities assumed. The intangible assets acquired include 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 recorded at the estimated fair values using the relief from royalty method and multi-period earnings method, respectively. Management engaged a third party valuation specialist to assist in the valuation analysis of certain acquired assets including 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 year ended December 31, 2021, the Company recorded $177,607 and $17,027, of sales and income before income taxes, respectively, attributable to Luxco on the Consolidated Statements of Income. During the year ended December 31, 2021, the Company incurred $8,927 of transaction related costs, which are included in Selling, general and administrative expenses on the Consolidated Statements of Income. Pro Forma Information . The following table summarizes the unaudited pro forma financial results for the year ended December 31, 2021 and 2020, as if the Merger had occurred on January 1, 2020: Pro Forma Financial Information Year Ended December 31, 2021 2020 Sales $ 671,090 $ 592,025 Net income 100,597 46,200 Basic earnings per common share 4.84 2.09 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 $8,927 for the year ended December 31, 2021 were excluded and $7,037 is assumed to have been incurred on January 1, 2020. Merger related costs incurred by Luxco of $3,132 were excluded from the year ended December 31, 2021 pro forma results. A non-recurring expense of $2,529 for the year ended December 31, 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 ended December 31, 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 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 OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER 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 $37,778, net of accumulated amortization of $3,622. The distributor relationships have a useful life of 20 years. The amortization expense for the years ended December 31, 2022 and 2021 was $2,070 and $1,552, respectively. As of December 31, 2022, the expected future amortization expense related to definite-lived intangibles assets are as follows: 2023 $ 2,070 2024 2,070 2025 2,070 2026 2,070 2027 2,070 Thereafter 27,428 Total $ 37,778 |
CORPORATE BORROWINGS
CORPORATE BORROWINGS | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
CORPORATE BORROWINGS | CORPORATE BORROWINGS Indebtedness Outstanding. The following table presents the Company’s outstanding indebtedness December 31, Description (a) 2022 2021 Credit Agreement - Revolver, 5.46% (variable rate) due 2025 $ — $ — Convertible Note, 1.88% (fixed rate) due 2041 201,250 201,250 Note Purchase Agreement Series A Senior Secured Notes, 3.53% (fixed rate) due 2027 15,200 18,400 Senior Secured Notes, 3.80% (fixed rate) due 2029 20,000 20,000 Other long-term borrowings — 203 Total indebtedness outstanding 236,450 239,853 Less unamortized loan fees (b) (6,115) (6,454) Total indebtedness outstanding, net 230,335 233,399 Less current maturities of long-term debt (5,600) (3,227) Long-term debt $ 224,735 $ 230,172 (a) Interest rates are as of December 31, 2022. (b) Loan fees are being amortized over the life of the debt agreements. 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”), which provided for a $300,000 revolving credit facility. On May 14, 2021, the Company amended the Credit Agreement 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 provided certain conditions are satisfied and at the discretion of the lender. On August 31, 2022, the Credit Agreement was amended to change the interest rate benchmark from LIBOR to SOFR. The Credit Agreement matures on February 14, 2025. The Credit Agreement is secured by substantially all assets, excluding real property. The Credit Agreement includes certain requirements and covenants, which the Company was in compliance with at December 31, 2022. The Company incurred no new loan fees related to the Credit Agreement during 2022. The unamortized balance of total loan fees related to the Credit Agreement was $1,177 at December 31, 2022, which were included in other assets, net on the Consolidated Balance Sheet. The unamortized loan fees are being amortized over the life of the Credit Agreement. As of December 31, 2022, the Company had no outstanding borrowings under the Credit Agreement leaving $400,000 available. The interest rate for the borrowings of the Credit Agreement at December 31, 2022 was 5.46%. Note Purchase Agreements . The Company’s Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”), with PGIM, Inc., (“Prudential”), an affiliate of Prudential Financial, Inc., and certain affiliates of Prudential, provides for the issuance of $20,000 of Series A Senior Secured Notes and the issuance of up to $105,000 of additional Senior Secured Notes (or any higher amount solely to the extent Prudential has provided written notice to the Company of its authorization of such a higher amount). On July 29, 2021, Prudential provided the Company notice pursuant to Section 1.2 of the Note Agreement that Prudential has authorized an increase in the amount of additional Senior Secured 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. The deadline for issuing the notes under the shelf facility is August 23, 2023. On August 23, 2017, the Company initially issued $20,000 of Series A Senior Secured Notes with a maturity date of August 23, 2027. The Series A Senior Secured Notes bear interest at a rate of 3.53 percent per year. On April 30, 2019, the Company issued $20,000 of additional Senior Secured Notes with a maturity date of April 30, 2029. The Senior Secured Notes bear interest at a rate of 3.80 percent per year. As of December 31, 2022, the Company has $15,200 of Series A Senior Secured Notes and $20,000 of additional Senior Secured Notes outstanding under the Note Purchase Agreement leaving $120,000 available of Senior Secured Notes. The Company incurred no new loan fees related to the Note Purchase Agreement during 2022. The unamortized balance of total loan fees related to the Note Purchase Agreement was $90 at December 31, 2022 and is being amortized over the life of the Note Purchase Agreement. The Note Purchase Agreement is secured by substantially all assets, excluding real property. The Note Purchase Agreement includes certain requirements and covenants, which the Company was in compliance with at December 31, 2022. Convertible Senior Notes . On November 16, 2021, the Company issued $201,250 in aggregate principal amount of 1.88% convertible senior notes due in 2041 (“2041 Notes”). The total aggregate principal amount includes $26,250 aggregate principal amount of 2041 Notes purchased by the initial purchasers in the offering pursuant to their exercise in full of their option to purchase additional notes under the purchase agreement for the offering. The 2041 Notes were issued pursuant to an indenture, dated as of November 16, 2021 ( the “Indenture”), by and among the Company, as issuer, Luxco, Inc., MGPI Processing, Inc., and MGPI of Indiana, LLC as subsidiary guarantors, and U.S. Bank National Association, as trustee. The 2041 Notes are senior, unsecured obligations of the Company and interest is payable semi-annually in arrears at a fixed interest rate of 1.88% on May 15 and November 15 of each year. The 2041 Notes mature on November 15, 2041 (“Maturity Date”) unless earlier repurchased, redeemed or converted, per the agreement. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2041 Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at its election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2041 Notes being converted. The Company incurred no new loan fees related to the 2041 Notes during 2022. The unamortized balance of total loan fees related to the 2041 Notes was $6,025 at December 31, 2022 and is being amortized over the life of the 2041 Notes. The initial conversion rate for the 2041 Notes is 10.3911 shares of common stock per $1 principal amount of the 2041 Notes. Prior to the Maturity Date, holders may convert at their option only in the following circumstances: • During any calendar quarter commencing after the quarter ending March 31, 2022, if the closing sale price of common stock for at least 20 trading days in the period of 30 consecutive trading days is more than 130% of the conversion price; • during the 5 consecutive business days following any 10 consecutive trading day period in which the trading price per $1 principal amount of the notes for each trading day was less than 98% of the product of the closing sale price of common stock on such trading day and the conversion rate on such trading day; • upon the occurrence of specified corporate events, as defined in the Indenture; • if the Company calls the notes for redemption; and • during the period July 15, 2026 ending close of business day immediately preceding November 20, 2026 or the period July 15, 2041 and close of business day immediately preceding the Maturity Date. Other long-term borrowings . As part of the Merger, the Company acquired additional long-term notes payable to certain counties in Kentucky and during the year ended December 31, 2022, the Company paid off the outstanding balances. Debt Maturities. Aggregate amount of maturities for long-term debt as of December 31, 2022 are as follows: 2023 $ 5,600 2024 6,400 2025 6,400 2026 6,400 2027 5,600 Thereafter 206,050 Total $ 236,450 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense is composed of the following: Year Ended December 31, 2022 2021 2020 Current: Federal $ 26,107 $ 19,746 $ 10,825 State 4,438 3,489 1,291 Foreign (223) 294 — 30,322 23,529 12,116 Deferred: Federal 2,870 5,345 (302) State (1,821) 1,405 442 Foreign (71) — — 978 6,750 140 Total $ 31,300 $ 30,279 $ 12,256 Income tax expense also included tax expense allocated to comprehensive income for 2022, 2021, and 2020 of $33, $19, and $229, respectively (see the Consolidated Statements of Comprehensive Income). A reconciliation of income tax expense at the normal statutory federal rate to income tax expense included in the accompanying Consolidated Statements of Income is below: Year Ended December 31, 2022 2021 2020 “Expected” provision at federal statutory rate $ 29,442 $ 25,435 $ 11,046 State income taxes, net 6,446 5,713 2,408 Foreign income taxes (223) 294 — Change in valuation allowance 416 204 (422) Share-based compensation (34) 31 56 Federal and state tax credits (3,506) (1,363) (1,035) Other (1,241) (35) 203 Income tax expense $ 31,300 $ 30,279 $ 12,256 Effective tax rate 22.3 % 25.0 % 23.3 % The tax effects of temporary differences giving rise to deferred income taxes shown on the Consolidated Balance Sheets are as follows: December 31, 2022 2021 Deferred income tax assets: Share-based compensation $ 2,462 $ 1,973 State tax credit carryforwards 3,991 2,343 Operating loss carryforwards 3,040 2,416 Inventories 1,936 1,923 Operating lease liabilities 3,949 2,536 Deferred compensation 691 1,357 Other 3,002 3,362 Gross deferred income tax assets 19,071 15,910 Less: valuation allowance (2,073) (1,657) Net deferred income tax assets 16,998 14,253 Deferred income tax liabilities: Property, plant and equipment (25,623) (24,627) Intangibles (47,187) (46,956) Inventory (2,812) (4,307) Operating lease right-of-use assets (3,850) (2,487) Convertible Senior Note (2,424) (411) Other (2,214) (1,566) Gross deferred income tax liabilities (84,110) (80,354) Net deferred income tax liability $ (67,112) $ (66,101) A schedule of the change in valuation allowance is as follows: Balance at December 31, 2020 $ 862 Increase 795 Balance at December 31, 2021 1,657 Increase 416 Balance at December 31, 2022 $ 2,073 As of December 31, 2022, the Company’s total valuation allowance of $2,073 related to net operating loss in states and foreign countries in which it is not “more likely than not” to create enough taxable income to fully utilize the carryforwards before expiration of the carryforward periods. As of December 31, 2021, the Company’s total valuation allowance of $1,657 related to net operating loss and tax credits carryforwards in states and foreign countries in which it is not “more likely than not” to create enough taxable income to fully utilize the carryforwards before expiration of the carryforward periods. The Merger with Luxco during 2021 was largely structured as a non-taxable merger for U.S. income tax purposes. This merger required the Company to book an additional $57,034 in deferred tax liabilities to its opening balance sheet. In addition, at December 31, 2021, the Company had book tax differences resulting in a net deferred tax liability balance of $66,101. This increase in the Company’s deferred tax balances could make the Company more susceptible to the tax impact of tax rate changes and its effect on earnings and earnings per share in the future. As of December 31, 2022 and 2021, the Company had $21,537 and $19,823 in gross state net operating loss carryforwards, respectively. Due to varying state carryforward periods, the state net operating loss carryforwards will primarily expire in varying years between calendar years 2022 and 2042. As of December 31, 2022 and 2021, the Company had gross state tax credit carryforwards of $5,052 and $2,966, respectively. State credits, if not used to offset income tax expense in their respective jurisdictions, will expire in varying years between 2022 and 2039. The Company treats accrued interest and penalties related to tax liabilities, if any, as a component of income tax expense. During 2022, 2021, and 2020, the Company’s activity in accrued interest and penalties was not significant. The following is a reconciliation of the total amount of unrecognized tax benefits (excluding interest and penalties) for 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 Beginning of year balance $ 113 $ 112 $ 255 Additions based on prior year tax positions 75 — 2 Additions based on current year tax positions 2 31 20 Reduction for prior year tax positions (34) (30) — Reductions for settlements — — (165) End of year balance $ 156 $ 113 $ 112 For each period presented, substantially all of the amount of unrecognized benefits (excluding interest and penalties) would impact the effective tax rate, if recognized. The Company reasonably expects that the amount of unrecognized tax benefit will not change significantly over the next 12 months. The Company is not under any federal, state or foreign income tax audits. For federal tax purpose, all tax years after 2018 remain open to adjustment. Amounts paid for income tax in foreign jurisdictions are not material to the financial statements. In addition, the Company is subject to examination for its state tax returns for years 2018, and forward, with the exception of certain net operating losses and credit carryforwards originating in years prior to 2018 that remain subject to adjustment. |
EQUITY AND EPS
EQUITY AND EPS | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
EQUITY AND EPS | EQUITY AND EPS Capital Stock. Common Stockholders are entitled to elect four of the nine members of the Board of Directors, while Preferred Stockholders are entitled to elect the remaining five members. All directors are elected annually for a one year term. Any vacancies on the Board are to be filled only by the shareholders and not by the Board. Shareholders who own 10 percent or more of the outstanding Common or Preferred Stock have the right to call a special meeting of stockholders. Common Stockholders are not entitled to vote with respect to a merger, dissolution, lease, exchange or sale of substantially all of the Company’s assets, or on an amendment to the Articles of Incorporation, unless such action would increase or decrease the authorized shares or par value of the Common or Preferred Stock, or change the powers, preferences or special rights of the Common or Preferred Stock so as to affect the Common Stockholders adversely. Generally, Common Stockholders and Preferred Stockholders vote as separate classes on all other matters requiring shareholder approval. EPS. The computations of basic and diluted EPS: Year Ended December 31, 2022 2021 2020 Operations: Net income (a) $ 108,872 $ 90,817 $ 40,345 Net loss attributable to noncontrolling interest 590 490 — Income attributable to participating securities (unvested shares and units) (b) (871) (712) (261) Net income used in EPS calculation $ 108,591 $ 90,595 $ 40,084 Share information: Basic weighted average common shares (c) 22,002,990 20,719,663 16,937,125 Diluted weighted average common shares (d) 22,053,966 20,719,663 16,937,125 Basic EPS $ 4.94 $ 4.37 $ 2.37 Diluted EPS $ 4.92 $ 4.37 $ 2.37 (a) Net income attributable to all shareholders. (b) Participating securities included 177,398, 163,024, and 110,665 unvested restricted stock units (“RSUs”) for the years ended December 31, 2022, 2021, and 2020, respectively. (c) Under the two class method, basic weighted average common shares exclude outstanding unvested participating securities. (d) The impacts of the Convertible Senior Notes were included in the diluted weighted average common shares if the inclusion was dilutive. The Convertible Senior Notes would only have a dilutive impact if the average market price per share during the quarter and year to date period exceeds the conversion price of $96.24 per share. There was no dilutive impact for the years ended December 31, 2021, and 2020. Share Issuance. On April 1, 2021, as part of the consideration for the Merger, the Company issued 5,007,833 shares of common stock. Additionally, in September 2021, the parties finalized the purchase price adjustments, which increased stock consideration by an additional 1,373 shares from the preliminary amounts that were paid at closing. Share Repurchase. On February 25, 2019, the 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. The Company did not repurchase any shares under the share repurchase program during 2022, prior to its expiration on February 27, 2022. The Company did not renew the share repurchase program upon its expiration. Common Stock Share Activity. Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2020 437 16,915,862 Issuance of Common Stock — 5,060,339 Repurchase of Common Stock — (11,887) Balance, December 31, 2021 437 21,964,314 Issuance of Common Stock — 38,760 Repurchase of Common Stock — (9,032) Balance, December 31, 2022 437 21,994,042 Dividends and Dividend Equivalents. Dividend and Dividend Equivalent Information (per Share and Unit) Declaration date Record date Payment date Declared Paid Dividend payment Dividend equivalent payment (a)(b) Total payment (b) 2022 February 22 March 11 March 25 $ 0.12 $ 0.12 $ 2,638 $ 23 $ 2,661 May 5 May 20 June 3 0.12 0.12 2,638 23 2,661 August 4 August 19 September 2 0.12 0.12 2,639 23 2,662 November 3 November 18 December 2 0.12 0.12 2,639 23 2,662 $ 0.48 $ 0.48 $ 10,554 $ 92 $ 10,646 2021 February 23 March 12 March 26 $ 0.12 $ 0.12 $ 2,033 $ 19 $ 2,052 May 3 May 21 June 4 0.12 0.12 2,635 20 2,655 August 2 August 20 September 3 0.12 0.12 2,635 20 2,655 November 1 November 19 December 3 0.12 0.12 2,635 20 2,655 $ 0.48 $ 0.48 $ 9,938 $ 79 $ 10,017 2020 February 24 March 13 March 27 $ 0.12 $ 0.12 $ 2,047 $ 13 $ 2,060 April 28 May 22 June 5 0.12 0.12 2,027 14 2,041 July 28 August 21 September 4 0.12 0.12 2,029 14 2,043 October 27 November 20 December 4 0.12 0.12 2,030 14 2,044 $ 0.48 $ 0.48 $ 8,133 $ 55 $ 8,188 (a) Dividend equivalent payments on unvested participating securities (see Note 11, Employee Benefit Plans ). (b) Includes estimated forfeitures. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company has operating leases for railcars, computer equipment, office spaces, a bottling facility, a distribution facility, fulfillment center, retail location, and certain equipment. The Company has no finance leases. Leases with terms of twelve months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Lease components are accounted for separately from non-lease components, such as common-area maintenance, based on the relative, observable stand-alone prices of the components. The Company’s leases have remaining lease terms of one year to six years, some of which may include options to extend the lease. Options to renew the Company’s leases were not considered when assessing the value of the right-of-use assets because the Company is not reasonably certain that it will assert the options to renew the leases. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The following table provides supplemental balance sheet classification information related to leases: December 31, Leases Balance Sheet Classification 2022 2021 Assets Operating Operating lease right-of-use-assets, net $ 15,042 $ 9,671 Total leased assets $ 15,042 $ 9,671 Liabilities Current Operating Accrued expenses $ 3,807 $ 2,865 Noncurrent Operating Long-term operating lease liabilities 11,622 6,997 Total operating lease liability $ 15,429 $ 9,862 The following table presents the components of lease costs: Year Ended December 31, 2022 2021 Operating lease costs $ 4,278 $ 2,358 Short-term lease costs 415 1,043 Sublease income — (4) Net lease costs (a) $ 4,693 $ 3,397 (a) Recorded as a component of operating income on the Company’s Consolidated Statements of Income. The following table presents supplemental cash flow and non-cash activity related to lease information: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,082 $ 2,857 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 3,417 $ 7,312 The following table presents weighted average discount rate and remaining lease term: December 31, 2022 2021 Weighted average discount rate Operating leases 2.03 % 2.26 % Weighted average remaining lease term Operating leases 4.6 years 4.1 years As of December 31, 2022, the maturities of operating lease liabilities were as follows: 2023 $ 4,066 2024 3,452 2025 3,073 2026 2,700 2027 1,601 Thereafter 1,201 Total lease payments 16,093 Less interest (664) Total operating lease liability $ 15,429 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments. We are in various stages of financing projects with industrial revenue bond transactions for our facilities located in Kentucky. The bonds allow a 15 or 40 year real property tax abatement on our renovated and newly-constructed warehouse buildings and distilleries in Kentucky. We have been approved for $55,500 of industrial revenue bonds with the City of Williamstown Kentucky, and have used approximately $21,000. Additionally, we have been approved for $175,000 of industrial revenue bonds with Nelson County Kentucky and have used approximately $48,000. The City of Williamstown and Nelson County issued the industrial revenue bonds to us. The Company recorded as property, plant, and equipment, net, on its Consolidated Balance Sheets under a capital lease. The lease payment on the facilities is sufficient to pay principal and interest on the bonds. Because the Company owns all of the outstanding bonds, has a legal right to set-off, and intends to set-off the corresponding lease and interest payment, the Company netted the capital lease obligation with the bond asset and, in turn, reflected no amount for the obligation or the corresponding asset on its Consolidated Balance Sheets at December 31, 2022 and 2021. 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. Shareholder matters. 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 K earns, derivatively on behalf of MGP Ingredients v. Griffin, et al. , Case 2020-CV-000042. The defendants were certain of the Company’s current and former officers and directors. The Company was a nominal defendant in each action. Plaintiffs alleged that the Company was damaged as a result of the commencement of securities litigation against defendants, the repurchase of Company stock at artificially inflated prices, and compensation paid to the individual defendants. The Complaint in Dorfman asserted 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 asserted 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 asserted claims for breach of fiduciary duties, waste of corporate assets, and unjust enrichment. The pleadings prayed 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 August 31, 2021, the court dismissed with prejudice the securities litigation on which some of the derivative claims were based. On January 4, 2022, the court dismissed the Carter action. On January 11, 2022, the court dismissed the Dorfman action. On February 2, 2022, the plaintiffs and defendants entered into a stipulation of dismissal of the Kearns action. The federal claims alleged in Carter were dismissed with prejudice. All other derivative claims were dismissed without prejudice. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS 401(k) Plans. The Company has established 401(k) plans covering all employees after certain eligibility requirements are met. Amounts charged to operations for employer contributions related to the plans totaled $2,517, $1,826, and $1,733 for 2022, 2021, and 2020, respectively. Post-Employment Benefits. The Company sponsors life insurance coverage as well as medical benefits, including prescription drug coverage, to certain retired employees and their spouses. In 2014, the Company made a change to the plan to terminate post-employment health care and life insurance benefits for retirees and employees except for a specified grandfathered group. As of December 31, 2022 and 2021, total current benefit obligation recorded in accrued expense on the Consolidated Balance Sheets was $190 and $232, respectively. As of December 31, 2022 and 2021, total noncurrent benefit obligation was $847 and $1,159, which was recorded in other noncurrent liabilities on the Consolidated Balance Sheets, respectively. Share-Based Compensation Plans. As of December 31, 2022, the Company was authorized to issue 40,000,000 shares of Common Stock and had a treasury share balance of 1,131,124 at December 31, 2022. The Company currently has two active share-based compensation plans: the Employee Equity Incentive Plan of 2014 (the “2014 Plan”) and the Non-Employee Director Equity Incentive Plan (the “Directors’ Plan”). The plans were approved by shareholders at the Company’s annual meeting in May 2014. Detail of activities in both plans follows below. The Company’s share-based compensation plans provide for the awarding of stock options, stock appreciation rights, and shares of restricted stock and RSUs for senior executives and salaried employees, as well as for outside directors. Compensation expense related to restricted stock awards is based on the market price of the stock on the date the Board of Directors communicates the approved award and is amortized over the vesting period of the restricted stock award. The Consolidated Statements of Income for 2022, 2021, and 2020 reflect total share-based compensation costs and director fees for awarded grants of $3,487, $2,346, and $2,723, respectively, related to these plans. For long-term incentive awards to be granted in the form of RSUs in 2023 based on 2022 results, the Human Resources and Compensation Committee (“HRCC”) determined that the grants would have performance conditions that would be based on the same performance metrics as the Short-Term Incentive Plan (the “STI Plan”). The performance metrics are operating income, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and EPS. Because management determined at the beginning of 2022 that the performance metrics would more likely than not be met, amortization of the estimated dollar pool of RSUs to be awarded based on 2022 results was started in the first quarter over an estimated 48 month period, including 12 months to the grant date and an additional 36 months to the vesting date. The Consolidated Statements of Income for 2022, 2021, and 2020 reflects share-based compensation costs for grants to be awarded of $2,018, $960, and $2,566, respectively. 2014 Plan. The 2014 Plan, with 1,500,000 shares registered for future grants, provides that vesting occurs pursuant to the time period specified in the particular award agreement approved for that issuance of RSUs, which is to be not less than three years unless vesting is accelerated due to the occurrence of certain events. As of December 31, 2022, 586,353 RSUs had been granted of the 1,500,000 shares approved for under the 2014 Plan. Directors’ Plan. The Director’s Plan, with 300,000 shares registered for future grants, provides that vesting occurs pursuant to the time period specified in the particular award agreement approved for that issuance of equity. As of December 31, 2022, 131,663 shares were granted of the 300,000 shares approved for grants under the Directors’ Plan and all 131,663 shares were vested. RSUs. Summary of unvested RSUs under the Company’s share-based compensation plans for 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 Units Weighted Average Units Weighted Average Units Weighted Average Unvested balance at beginning of year 167,994 $ 61.07 118,855 $ 60.56 116,855 $ 65.73 Granted 69,492 78.08 95,113 65.66 38,700 31.93 Forfeited (28,542) 61.11 (7,915) 62.77 (5,278) 63.17 Vested (29,406) 76.59 (38,059) 70.60 (31,422) 44.06 Unvested balance at end of year 179,538 $ 65.11 167,994 $ 61.07 118,855 $ 60.56 During 2022, 2021, and 2020, the total grant date fair value of RSU awards vested was $2,252, $2,687, and $1,384, respectively. As of December 31, 2022 there was $3,098 of total estimated unrecognized compensation costs (net of estimated forfeitures) related to granted RSU awards. These costs are expected to be recognized over a weighted average period of approximately 1.3 years. Upon their vesting, the Company purchased restricted stock and RSUs from employees to cover associated withholding taxes. Total treasury stock purchases added 9,031 shares for $715 in 2022; 11,887 shares for $767 in 2021; and 10,437 shares for $358 in 2020. Annual Cash Incentive Plan. Pursuant to the STI Plan, short-term incentive compensation is dependent on the achievement of certain performance metrics by the Company, established by the Board of Directors. Each performance metric is calculated in accordance with the rules approved by the HRCC, which may adjust the results to eliminate unusual items. For 2022, 2021, and 2020, the performance metrics were operating income, EBITDA, and EPS. Operating income for the performance metric was defined as reported GAAP operating income adjusted for certain discretionary items as determined by the Company’s management, if applicable (“adjusted operating income”). The HRCC determines the officers and employees eligible to participate under the STI Plan for the plan year as well as the target annual incentive compensation for each participant for each plan year. Additionally, certain employees within the Branded Spirits segment have an incentive plan that is based on performance metrics of number of depleted cases and gross margin. Amounts expensed under the STI Plan totaled $13,370, $11,155, and $9,732 for 2022, 2021, and 2020, respectively. 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 insignificant and were included as a component of operating income in the Company’s Consolidated Statements of Income, because the Company’s deferred compensation investments consist of mutual funds that are considered trading securities. 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. The current portion of deferred compensation plan deferrals is comprised of estimated amounts to be paid within one year depending on timing of planned disbursements. At December 31, 2022 and 2021, the EDC Plan investments were $2,176 and $3,072, respectively, which were recorded in other assets on the Company’s Consolidated Balance Sheets. The EDC Plan current liabilities were $510 and $617 at December 31, 2022 and 2021, respectively, and were included in accrued expenses and other on the Company’s Consolidated Balance Sheets. The EDC Plan non-current liabilities were $2,191 and $2,981 as of December 31, 2022 and 2021, respectively, which were recorded in Other non-current liabilities on the Company’s Consolidated Balance Sheets. |
CONCENTRATIONS AND RELATED PART
CONCENTRATIONS AND RELATED PARTIES | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND RELATED PARTIES | CONCENTRATIONS AND RELATED PARTIES Significant customers. For 2022, 2021, and 2020, the Company had no sales to an individual customer that accounted for more than 10 percent of consolidated sales. During the years 2022, 2021, and 2020, the Company’s ten largest customers accounted for approximately 38 percent, 36 percent, and 37 percent of consolidated sales, respectively. Significant suppliers. For 2022, the Company had purchases from two grain suppliers that approximated 23 percent of consolidated purchases. In addition, the Company’s ten largest suppliers, accounted for approximately 49 percent of consolidated purchases. For 2021, the Company had purchases from two grain suppliers that approximated 14 percent of consolidated purchases. In addition, the Company’s ten largest suppliers accounted for approximately 43 percent of consolidated purchases. For 2020, the Company had purchases from two grain suppliers that approximated 30 percent of consolidated purchases. In addition, the Company’s ten largest suppliers accounted for approximately 65 percent of consolidated purchases. Related Parties. For the years ended December 31, 2022 and 2021, the Company purchased $37,274 and $23,463, respectively, of bulk beverage alcohol from LMX. The Company holds 50 percent interest in LMX, which is accounted for as equity method investments. See Note 1, Nature of Operations and Summary of Significant Accounting Policies. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | OPERATING SEGMENTSAt December 31, 2022, the Company had three segments: Distilling Solutions, Branded Spirits and Ingredient Solutions. The Distilling Solutions 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 Distilling Solutions segment also includes warehouse services, including barrel put away, barrel storage, and barrel retrieval services. The Branded Spirits segment consists of a portfolio of high quality branded spirits which are produced through the distilleries and bottling facilities. 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 SG&A, interest expense, and other general miscellaneous expenses are excluded from segment operations and are classified as Corporate. Receivables, inventories, and equipment have been identified with the segments to which they relate. All other assets are considered as Corporate. Year Ended December 31, 2022 2021 2020 Sales to customers: Distilling Solutions $ 428,478 $ 352,504 $ 313,309 Branded Spirits 237,939 183,566 4,149 Ingredient Solutions 115,941 90,650 78,063 Total (a) $ 782,358 $ 626,720 $ 395,521 Gross profit: Distilling Solutions $ 126,282 $ 114,106 $ 75,773 Branded Spirits 95,521 62,644 2,187 Ingredient Solutions 31,503 22,215 20,846 Total $ 253,306 $ 198,965 $ 98,806 Depreciation and amortization: Distilling Solutions $ 11,641 $ 10,766 $ 9,816 Branded Spirits 5,909 5,138 100 Ingredient Solutions 2,473 2,069 1,871 Corporate 1,432 1,119 1,174 Total $ 21,455 $ 19,092 $ 12,961 Income (loss) before income taxes: Distilling Solutions $ 121,651 $ 110,317 $ 73,533 Branded Spirits 33,333 20,742 (2,510) Ingredient Solutions 27,532 19,194 18,024 Corporate (42,344) (29,157) (36,446) Total $ 140,172 $ 121,096 $ 52,601 (a) Sales revenue from foreign sources totaled $56,719, $42,593, and $23,905 for the years ended December 31, 2022, 2021, and 2020, respectively, and is largely derived from the United Kingdom, Japan, Thailand, Canada, and Mexico. The balance of total sales revenue is from domestic sources. December 31, 2022 2021 Identifiable Assets Distilling Solutions $ 350,068 $ 314,816 Branded Spirits 698,985 658,826 Ingredient Solutions 63,943 43,009 Corporate 45,215 24,816 Total (a) $ 1,158,211 $ 1,041,467 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION Year Ended December 31, 2022 2021 2020 Non-cash investing and financing activities: Purchase of property, plant, and equipment in accounts payable $ 9,768 $ 7,232 $ 3,375 Additional cash payment information: Interest paid 5,952 3,457 2,212 Income taxes paid 29,052 29,766 10,566 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Summary of selected quarterly financial data for years ended December 31, 2022 and 2021: Year Ended December 31, 2022 Fourth Third Second First Sales $ 190,995 $ 201,146 $ 194,982 $ 195,235 Cost of sales 127,782 142,098 135,758 123,414 Gross profit 63,213 59,048 59,224 71,821 Advertising and promotion expenses 10,866 7,279 6,065 5,504 SG&A expenses 22,632 17,905 17,853 16,237 Operating income 29,715 33,864 35,306 50,080 Interest expense, net (960) (1,350) (1,543) (1,598) Other income (loss), net (981) (1,353) (1,062) 54 Income before income taxes 27,774 31,161 32,701 48,536 Income tax expense 5,263 7,533 7,339 11,165 Net income $ 22,511 $ 23,628 $ 25,362 $ 37,371 Basic EPS data (a) $ 1.02 $ 1.07 $ 1.15 $ 1.69 Diluted EPS data (a) $ 1.01 $ 1.06 $ 1.15 $ 1.69 Year Ended December 31, 2021 Fourth Third Second First Sales $ 166,847 $ 176,611 $ 174,939 $ 108,323 Cost of sales 114,094 119,525 118,112 76,024 Gross profit 52,753 57,086 56,827 32,299 Advertising and promotion expenses 6,210 5,664 3,371 853 SG&A expenses 17,552 18,538 25,793 10,946 Insurance recoveries (16,325) — — — Operating income 45,316 32,884 27,663 20,500 Interest expense, net (1,329) (1,116) (1,104) (488) Other income (loss), net (751) (421) (88) 30 Income before income taxes 43,236 31,347 26,471 20,042 Income tax expense 11,578 7,674 6,412 4,615 Net income $ 31,658 $ 23,673 $ 20,059 $ 15,427 Basic and diluted EPS data (a) $ 1.44 $ 1.08 $ 0.91 $ 0.90 (a) Quarterly EPS amounts may not add to amounts for the year because quarterly and annual EPS calculations are performed separately. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividend Declaration On February 23, 2023, the Board of Directors declared a quarterly dividend payable to stockholders of record as of March 10, 2023, of our Common Stock and a dividend equivalent payable to holders of certain RSUs as of March 10, 2023, of $0.12 per share and per unit. The dividend payment and dividend equivalent payment will occur on March 24, 2023. |
NATURE OF OPERATIONS AND SUMM_2
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company. MGP Ingredients, Inc. (“MGP,” or the “Company”) is a leading producer and supplier of premium distilled spirits, branded spirits and food ingredients. Distilled spirits include premium bourbon, rye, and other whiskeys and grain neutral spirits (“GNS”), including vodka and gin. Our distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits. MGP is also a producer of high quality industrial alcohol for use in both food and non-food applications. The Company has a portfolio of its own high quality branded spirits which are produce through the distilleries and bottling facilities and sell to distributors. The Company’s branded spirits products account for a range of price points from value products through ultra premium brands, with a focus on high-end American whiskey, tequila and gin. 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 consumer packaged goods industry. The ingredients products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries. |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts in the 2020 and 2021 consolidated financial statements have been reclassified to conform to the 2022 presentation. |
Use of Estimates | Use of Estimates. The financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of 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 effects related to the COVID-19 pandemic. 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. Bourbons, ryes, and other whiskeys, included in inventory, are normally aged in barrels for several years, following industry practice; all barreled bourbon, rye, and other whiskeys 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 the 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. |
Properties, Depreciation, and Amortization | Properties, Depreciation, and Amortization. Property, plant, and equipment are typically stated at cost. Additions, including those that increase the life or utility of an asset, are capitalized and all properties are depreciated over their estimated remaining useful lives. Depreciation and amortization are computed using the straight line method over the following estimated useful lives: Buildings and improvements (a) 10 – 35 years Machinery and equipment 3 – 10 years Office furniture and equipment 5 – 10 years Computer equipment and software 3 – 5 years Motor vehicles 5 years (a) Leasehold improvements are the shorter of economic useful life or life of lease Maintenance costs are expensed as incurred. The cost of property, plant, and equipment sold, retired, or otherwise disposed of, as well as related accumulated depreciation and amortization, are eliminated from the property accounts with related gains and losses reflected in the Consolidated Statements of Income. The Company capitalizes interest costs associated with significant construction projects. Total interest incurred for 2022, 2021, and 2020 is noted below: Year Ended December 31, 2022 2021 2020 Interest costs charged to expense $ 5,451 $ 4,037 $ 2,267 Plus: Interest cost capitalized 866 339 246 Total $ 6,317 $ 4,376 $ 2,513 |
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 that 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. The Company’s Distilling Solutions 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 the following bill and hold criteria have been 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 service 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. Contract bottling is recognized over the time contract bottling services are rendered and as they are rendered. |
Excise Tax | Excise Tax. The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau |
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 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 Consolidated Statements of Income. |
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 Common Share ("EPS") | Earnings Per Common Share (“EPS”). Basic and diluted EPS is 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. Basic EPS amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each period. Diluted EPS is computed using the if-converted method by dividing the net income attributable to common shareholders by the weighted average shares outstanding, inclusive of the impact of the Convertible Senior Notes, except for where the result would be anti-dilutive as of the balance sheet date. |
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 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. The Company maintains a US bank account denominated in British pound sterling and is adjusted for the market exchange rate at the reporting period-end. Any impacts of the adjustment for the exchange rate applied to the financial asset is reported in other income (loss), net on the Consolidated Statements of Income. |
Business Combinations | Business Combinations. Assets 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 value of 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 Other Intangible Assets | Goodwill and Other 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 and allocated to the reporting units. 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 December 31, 2022, 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 receivable 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. Excluding the impact of the conversion feature of the convertible note, the fair value of the Company’s debt was $150,249 and $272,971 at December 31, 2022 and 2021, respectively. The financial statement carrying value (including unamortized loan fees) was $230,335 and $233,399 at December 31, 2022 and 2021, respectively. These fair values are considered Level 2 under the fair value hierarchy. |
Derivative Instruments | Derivative Instruments. Certain commodities the Company uses in its production process, or input costs, expose it to market price risk due to volatility in the prices for those commodities. Through the Company’s grain supply contracts for its Atchison and Lawrenceburg facilities, its wheat flour supply contract for the Atchison facility, and its natural gas contracts for both facilities, it purchases grain, wheat flour, and natural gas, respectively, for delivery from one Derivatives and Hedging , because the quantities involved are for amounts to be consumed within the normal expected production process. |
Equity Method Investments | Equity Method Investments. The 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 interest 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. At December 31, 2022 and 2021, the investment in LMX was $5,534 and $4,944, respectively, which is recorded in investment in joint ventures on the Consolidated Balance Sheets. During the years ended December 31, 2022 and 2021, the Company recorded a $2,220 and $1,611 loss from equity method investments, respectively, which is recorded in other income (loss), net on the Consolidated Statements of Income. |
Immaterial Correction to Prior Period Financial Statements | Immaterial Correction to Prior Period Financial Statements. During the year ended December 31, 2022, the Company identified an immaterial correction related to gross amounts of property, plant and equipment and accumulated depreciation and amortization in the Consolidated Balance Sheet as of December 31, 2021. The Company performed a materiality assessment, considering both quantitative and qualitative factors, which resulted in the determination that the correction to the financial statements was immaterial. As such, the Company corrected the December 31, 2021 gross balances for property, plant, and equipment and accumulated depreciation and amortization in Note 2, Other Balance Sheet Captions, in this Form 10-K by equal and offsetting amounts, which resulted in no change to the balance of property, plant, and equipment, net. During the year ended December 31, 2022, the Company identified an immaterial correction related to the calculation of diluted earnings per share within the year ended December 31, 2021 financial statements filed on Form 10-K. Other than as follows, this correction had no impact on the financial statements for the year ended December 31, 2021. For the period ended December 31, 2021, diluted earnings per share should have been $4.37 instead of $4.34. The Company performed a materiality assessment, considering both quantitative and qualitative factors, which resulted in the determination that the correction to the financial statements is immaterial. As such, the Company corrected the December 31, 2021 diluted earnings per share on the Consolidated Statements of Income in this Form 10-K. |
Recently Adopted and Issued Accounting Standard Updates and Pronouncements | Recently Adopted Accounting Standard Updates. ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue Recognition . This ASU is effective for annual and interim periods beginning after December 15, 2022. Early adoption is permitted. The Company has adopted this standard and it did not have an impact to the Company’s consolidated financial statements and related disclosures. ASU 2020-04, Facilitation of Effects of Reference Rate Reform on Financial Reporting , which provide optional expedients and exceptions for a period of time to help facilitate the adoption of reference rate reform and the impact on financial reporting. This guidance was effective for all entities as of March 12, 2020 through December 31, 2022. ASU 2022-06 , Deferral of the Sunset Date of Topic 848, which extends the effective date fro December 31, 2022 to December 31, 2024. The Company has adopted these standards and it did not have an impact to the Company’s consolidated financial statements and related disclosures. |
NATURE OF OPERATIONS AND SUMM_3
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Estimated Useful Lives | Depreciation and amortization are computed using the straight line method over the following estimated useful lives: Buildings and improvements (a) 10 – 35 years Machinery and equipment 3 – 10 years Office furniture and equipment 5 – 10 years Computer equipment and software 3 – 5 years Motor vehicles 5 years (a) Leasehold improvements are the shorter of economic useful life or life of lease |
Schedule of Interest Expenses Incurred | Total interest incurred for 2022, 2021, and 2020 is noted below: Year Ended December 31, 2022 2021 2020 Interest costs charged to expense $ 5,451 $ 4,037 $ 2,267 Plus: Interest cost capitalized 866 339 246 Total $ 6,317 $ 4,376 $ 2,513 |
OTHER BALANCE SHEET CAPTIONS (T
OTHER BALANCE SHEET CAPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory | Inventory. December 31, 2022 2021 Finished goods $ 47,073 $ 35,362 Barreled distillate (bourbons and other whiskeys) 199,040 174,080 Raw materials 29,931 24,981 Work in process 1,645 1,261 Maintenance materials 9,931 9,179 Other 2,102 1,081 Total $ 289,722 $ 245,944 |
Property, Plant and Equipment, Net | Property, plant, and equipment, net. December 31, 2022 2021 Land, buildings, and improvements $ 155,385 $ 150,367 Transportation equipment 805 697 Machinery and equipment 257,075 236,352 Construction in progress 37,535 16,733 Property, plant, and equipment, at cost 450,800 404,149 Less accumulated depreciation and amortization (215,168) (196,863) Property, plant, and equipment, net $ 235,632 $ 207,286 |
Schedule of Accrued Expenses | Accrued expenses. December 31, 2022 2021 Employee benefit plans $ 2,389 $ 1,427 Salaries and wages 17,862 16,466 Property taxes 1,318 1,495 Current operating lease liabilities 3,807 2,865 Other 3,340 2,616 Total $ 28,716 $ 24,869 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Revenues Disaggregated | The following table presents the Company’s sales disaggregated by segment and major products and services. Year Ended December 31, 2022 2021 2020 Distilling Solutions Brown Goods $ 229,523 $ 162,074 $ 121,384 White Goods 74,510 75,818 63,873 Premium beverage alcohol 304,033 237,892 185,257 Industrial alcohol 46,812 62,628 80,682 Food grade alcohol 350,845 300,520 265,939 Fuel grade alcohol 13,681 14,916 5,630 Distillers feed and related co-products 40,354 19,545 26,109 Warehouse services 23,598 17,523 15,631 Total Distilling Solutions 428,478 352,504 313,309 Branded Spirits Ultra premium 48,245 27,722 1,785 Super premium 12,274 8,937 2,196 Premium 24,211 17,626 125 Premium plus 84,730 54,285 4,106 Mid 82,530 71,292 — Value 47,395 38,520 — Other 23,284 19,469 43 Total Branded Spirits 237,939 183,566 4,149 Ingredient Solutions Specialty wheat starches 62,567 47,758 41,631 Specialty wheat proteins 39,313 31,485 26,960 Commodity wheat starch 14,023 10,014 7,630 Commodity wheat protein 38 1,393 1,842 Total Ingredient Solutions 115,941 90,650 78,063 Total sales $ 782,358 $ 626,720 $ 395,521 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the consideration paid for Luxco to the 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 $ 149,484 Value of MGP Common Stock issued at close (a) 296,279 Fair value of total consideration transferred $ 445,763 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) 87,509 Accounts payable 14,453 Federal and state excise taxes payable 8,352 Accrued expenses and other 2,832 Other noncurrent liabilities 196 Deferred income taxes 57,034 Total liabilities 170,376 Goodwill 223,556 Total $ 445,763 (a) The Company issued 5,007,833 shares of MGP Common Stock which was valued at $59.15 per share on April 1, 2021. In September 2021, the parties finalized the purchase price adjustments which increased stock consideration by an additional 1,373 shares from the preliminary amounts that were paid at closing. (b) Intangible assets acquired included 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 year ended December 31, 2021 and 2020, as if the Merger had occurred on January 1, 2020: Pro Forma Financial Information Year Ended December 31, 2021 2020 Sales $ 671,090 $ 592,025 Net income 100,597 46,200 Basic earnings per common share 4.84 2.09 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2022, the expected future amortization expense related to definite-lived intangibles assets are as follows: 2023 $ 2,070 2024 2,070 2025 2,070 2026 2,070 2027 2,070 Thereafter 27,428 Total $ 37,778 |
CORPORATE BORROWINGS (Tables)
CORPORATE BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Indebtedness Outstanding. The following table presents the Company’s outstanding indebtedness December 31, Description (a) 2022 2021 Credit Agreement - Revolver, 5.46% (variable rate) due 2025 $ — $ — Convertible Note, 1.88% (fixed rate) due 2041 201,250 201,250 Note Purchase Agreement Series A Senior Secured Notes, 3.53% (fixed rate) due 2027 15,200 18,400 Senior Secured Notes, 3.80% (fixed rate) due 2029 20,000 20,000 Other long-term borrowings — 203 Total indebtedness outstanding 236,450 239,853 Less unamortized loan fees (b) (6,115) (6,454) Total indebtedness outstanding, net 230,335 233,399 Less current maturities of long-term debt (5,600) (3,227) Long-term debt $ 224,735 $ 230,172 (a) Interest rates are as of December 31, 2022. (b) Loan fees are being amortized over the life of the debt agreements. |
Contractual Obligation, Fiscal Year Maturity Schedule | Debt Maturities. Aggregate amount of maturities for long-term debt as of December 31, 2022 are as follows: 2023 $ 5,600 2024 6,400 2025 6,400 2026 6,400 2027 5,600 Thereafter 206,050 Total $ 236,450 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense is composed of the following: Year Ended December 31, 2022 2021 2020 Current: Federal $ 26,107 $ 19,746 $ 10,825 State 4,438 3,489 1,291 Foreign (223) 294 — 30,322 23,529 12,116 Deferred: Federal 2,870 5,345 (302) State (1,821) 1,405 442 Foreign (71) — — 978 6,750 140 Total $ 31,300 $ 30,279 $ 12,256 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of income tax expense at the normal statutory federal rate to income tax expense included in the accompanying Consolidated Statements of Income is below: Year Ended December 31, 2022 2021 2020 “Expected” provision at federal statutory rate $ 29,442 $ 25,435 $ 11,046 State income taxes, net 6,446 5,713 2,408 Foreign income taxes (223) 294 — Change in valuation allowance 416 204 (422) Share-based compensation (34) 31 56 Federal and state tax credits (3,506) (1,363) (1,035) Other (1,241) (35) 203 Income tax expense $ 31,300 $ 30,279 $ 12,256 Effective tax rate 22.3 % 25.0 % 23.3 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences giving rise to deferred income taxes shown on the Consolidated Balance Sheets are as follows: December 31, 2022 2021 Deferred income tax assets: Share-based compensation $ 2,462 $ 1,973 State tax credit carryforwards 3,991 2,343 Operating loss carryforwards 3,040 2,416 Inventories 1,936 1,923 Operating lease liabilities 3,949 2,536 Deferred compensation 691 1,357 Other 3,002 3,362 Gross deferred income tax assets 19,071 15,910 Less: valuation allowance (2,073) (1,657) Net deferred income tax assets 16,998 14,253 Deferred income tax liabilities: Property, plant and equipment (25,623) (24,627) Intangibles (47,187) (46,956) Inventory (2,812) (4,307) Operating lease right-of-use assets (3,850) (2,487) Convertible Senior Note (2,424) (411) Other (2,214) (1,566) Gross deferred income tax liabilities (84,110) (80,354) Net deferred income tax liability $ (67,112) $ (66,101) |
Summary of Valuation Allowance | A schedule of the change in valuation allowance is as follows: Balance at December 31, 2020 $ 862 Increase 795 Balance at December 31, 2021 1,657 Increase 416 Balance at December 31, 2022 $ 2,073 |
Schedule of Unrecognized Tax Benefits Roll Forward | The following is a reconciliation of the total amount of unrecognized tax benefits (excluding interest and penalties) for 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 Beginning of year balance $ 113 $ 112 $ 255 Additions based on prior year tax positions 75 — 2 Additions based on current year tax positions 2 31 20 Reduction for prior year tax positions (34) (30) — Reductions for settlements — — (165) End of year balance $ 156 $ 113 $ 112 |
EQUITY AND EPS (Tables)
EQUITY AND EPS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted EPS: Year Ended December 31, 2022 2021 2020 Operations: Net income (a) $ 108,872 $ 90,817 $ 40,345 Net loss attributable to noncontrolling interest 590 490 — Income attributable to participating securities (unvested shares and units) (b) (871) (712) (261) Net income used in EPS calculation $ 108,591 $ 90,595 $ 40,084 Share information: Basic weighted average common shares (c) 22,002,990 20,719,663 16,937,125 Diluted weighted average common shares (d) 22,053,966 20,719,663 16,937,125 Basic EPS $ 4.94 $ 4.37 $ 2.37 Diluted EPS $ 4.92 $ 4.37 $ 2.37 (a) Net income attributable to all shareholders. (b) Participating securities included 177,398, 163,024, and 110,665 unvested restricted stock units (“RSUs”) for the years ended December 31, 2022, 2021, and 2020, respectively. (c) Under the two class method, basic weighted average common shares exclude outstanding unvested participating securities. |
Schedule of Common Stock Activity | Common Stock Share Activity. Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2020 437 16,915,862 Issuance of Common Stock — 5,060,339 Repurchase of Common Stock — (11,887) Balance, December 31, 2021 437 21,964,314 Issuance of Common Stock — 38,760 Repurchase of Common Stock — (9,032) Balance, December 31, 2022 437 21,994,042 |
Schedule of Dividends | Dividends and Dividend Equivalents. Dividend and Dividend Equivalent Information (per Share and Unit) Declaration date Record date Payment date Declared Paid Dividend payment Dividend equivalent payment (a)(b) Total payment (b) 2022 February 22 March 11 March 25 $ 0.12 $ 0.12 $ 2,638 $ 23 $ 2,661 May 5 May 20 June 3 0.12 0.12 2,638 23 2,661 August 4 August 19 September 2 0.12 0.12 2,639 23 2,662 November 3 November 18 December 2 0.12 0.12 2,639 23 2,662 $ 0.48 $ 0.48 $ 10,554 $ 92 $ 10,646 2021 February 23 March 12 March 26 $ 0.12 $ 0.12 $ 2,033 $ 19 $ 2,052 May 3 May 21 June 4 0.12 0.12 2,635 20 2,655 August 2 August 20 September 3 0.12 0.12 2,635 20 2,655 November 1 November 19 December 3 0.12 0.12 2,635 20 2,655 $ 0.48 $ 0.48 $ 9,938 $ 79 $ 10,017 2020 February 24 March 13 March 27 $ 0.12 $ 0.12 $ 2,047 $ 13 $ 2,060 April 28 May 22 June 5 0.12 0.12 2,027 14 2,041 July 28 August 21 September 4 0.12 0.12 2,029 14 2,043 October 27 November 20 December 4 0.12 0.12 2,030 14 2,044 $ 0.48 $ 0.48 $ 8,133 $ 55 $ 8,188 (a) Dividend equivalent payments on unvested participating securities (see Note 11, Employee Benefit Plans ). (b) Includes estimated forfeitures. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Components of Lease Costs | The following table provides supplemental balance sheet classification information related to leases: December 31, Leases Balance Sheet Classification 2022 2021 Assets Operating Operating lease right-of-use-assets, net $ 15,042 $ 9,671 Total leased assets $ 15,042 $ 9,671 Liabilities Current Operating Accrued expenses $ 3,807 $ 2,865 Noncurrent Operating Long-term operating lease liabilities 11,622 6,997 Total operating lease liability $ 15,429 $ 9,862 The following table presents the components of lease costs: Year Ended December 31, 2022 2021 Operating lease costs $ 4,278 $ 2,358 Short-term lease costs 415 1,043 Sublease income — (4) Net lease costs (a) $ 4,693 $ 3,397 (a) Recorded as a component of operating income on the Company’s Consolidated Statements of Income. The following table presents supplemental cash flow and non-cash activity related to lease information: Year Ended December 31, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,082 $ 2,857 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 3,417 $ 7,312 The following table presents weighted average discount rate and remaining lease term: December 31, 2022 2021 Weighted average discount rate Operating leases 2.03 % 2.26 % Weighted average remaining lease term Operating leases 4.6 years 4.1 years |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2022, the maturities of operating lease liabilities were as follows: 2023 $ 4,066 2024 3,452 2025 3,073 2026 2,700 2027 1,601 Thereafter 1,201 Total lease payments 16,093 Less interest (664) Total operating lease liability $ 15,429 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | Summary of unvested RSUs under the Company’s share-based compensation plans for 2022, 2021, and 2020: Year Ended December 31, 2022 2021 2020 Units Weighted Average Units Weighted Average Units Weighted Average Unvested balance at beginning of year 167,994 $ 61.07 118,855 $ 60.56 116,855 $ 65.73 Granted 69,492 78.08 95,113 65.66 38,700 31.93 Forfeited (28,542) 61.11 (7,915) 62.77 (5,278) 63.17 Vested (29,406) 76.59 (38,059) 70.60 (31,422) 44.06 Unvested balance at end of year 179,538 $ 65.11 167,994 $ 61.07 118,855 $ 60.56 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Year Ended December 31, 2022 2021 2020 Sales to customers: Distilling Solutions $ 428,478 $ 352,504 $ 313,309 Branded Spirits 237,939 183,566 4,149 Ingredient Solutions 115,941 90,650 78,063 Total (a) $ 782,358 $ 626,720 $ 395,521 Gross profit: Distilling Solutions $ 126,282 $ 114,106 $ 75,773 Branded Spirits 95,521 62,644 2,187 Ingredient Solutions 31,503 22,215 20,846 Total $ 253,306 $ 198,965 $ 98,806 Depreciation and amortization: Distilling Solutions $ 11,641 $ 10,766 $ 9,816 Branded Spirits 5,909 5,138 100 Ingredient Solutions 2,473 2,069 1,871 Corporate 1,432 1,119 1,174 Total $ 21,455 $ 19,092 $ 12,961 Income (loss) before income taxes: Distilling Solutions $ 121,651 $ 110,317 $ 73,533 Branded Spirits 33,333 20,742 (2,510) Ingredient Solutions 27,532 19,194 18,024 Corporate (42,344) (29,157) (36,446) Total $ 140,172 $ 121,096 $ 52,601 |
Schedule of Segment Reporting Identifiable Assets | December 31, 2022 2021 Identifiable Assets Distilling Solutions $ 350,068 $ 314,816 Branded Spirits 698,985 658,826 Ingredient Solutions 63,943 43,009 Corporate 45,215 24,816 Total (a) $ 1,158,211 $ 1,041,467 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Year Ended December 31, 2022 2021 2020 Non-cash investing and financing activities: Purchase of property, plant, and equipment in accounts payable $ 9,768 $ 7,232 $ 3,375 Additional cash payment information: Interest paid 5,952 3,457 2,212 Income taxes paid 29,052 29,766 10,566 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Summary of selected quarterly financial data for years ended December 31, 2022 and 2021: Year Ended December 31, 2022 Fourth Third Second First Sales $ 190,995 $ 201,146 $ 194,982 $ 195,235 Cost of sales 127,782 142,098 135,758 123,414 Gross profit 63,213 59,048 59,224 71,821 Advertising and promotion expenses 10,866 7,279 6,065 5,504 SG&A expenses 22,632 17,905 17,853 16,237 Operating income 29,715 33,864 35,306 50,080 Interest expense, net (960) (1,350) (1,543) (1,598) Other income (loss), net (981) (1,353) (1,062) 54 Income before income taxes 27,774 31,161 32,701 48,536 Income tax expense 5,263 7,533 7,339 11,165 Net income $ 22,511 $ 23,628 $ 25,362 $ 37,371 Basic EPS data (a) $ 1.02 $ 1.07 $ 1.15 $ 1.69 Diluted EPS data (a) $ 1.01 $ 1.06 $ 1.15 $ 1.69 Year Ended December 31, 2021 Fourth Third Second First Sales $ 166,847 $ 176,611 $ 174,939 $ 108,323 Cost of sales 114,094 119,525 118,112 76,024 Gross profit 52,753 57,086 56,827 32,299 Advertising and promotion expenses 6,210 5,664 3,371 853 SG&A expenses 17,552 18,538 25,793 10,946 Insurance recoveries (16,325) — — — Operating income 45,316 32,884 27,663 20,500 Interest expense, net (1,329) (1,116) (1,104) (488) Other income (loss), net (751) (421) (88) 30 Income before income taxes 43,236 31,347 26,471 20,042 Income tax expense 11,578 7,674 6,412 4,615 Net income $ 31,658 $ 23,673 $ 20,059 $ 15,427 Basic and diluted EPS data (a) $ 1.44 $ 1.08 $ 0.91 $ 0.90 (a) Quarterly EPS amounts may not add to amounts for the year because quarterly and annual EPS calculations are performed separately. |
NATURE OF OPERATIONS AND SUMM_4
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Building and improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Building and improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 35 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Office furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Office furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Computer equipment and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer equipment and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Motor vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
NATURE OF OPERATIONS AND SUMM_5
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Interest Incurred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Interest costs charged to expense | $ 5,451 | $ 4,037 | $ 2,267 |
Plus: Interest cost capitalized | 866 | 339 | 246 |
Total | $ 6,317 | $ 4,376 | $ 2,513 |
NATURE OF OPERATIONS AND SUMM_6
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2022 USD ($) $ / shares | Sep. 30, 2022 $ / shares | Jun. 30, 2022 $ / shares | Mar. 31, 2022 $ / shares | Dec. 31, 2021 USD ($) $ / shares | Sep. 30, 2021 USD ($) $ / shares | Jun. 30, 2021 USD ($) $ / shares | Mar. 31, 2021 USD ($) $ / shares | Dec. 31, 2022 USD ($) segment $ / shares | Dec. 31, 2021 USD ($) $ / shares | Dec. 31, 2020 USD ($) $ / shares | Apr. 01, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Number of operating segments | segment | 3 | |||||||||||
Debt instrument, fair value disclosure | $ 150,249 | $ 272,971 | $ 150,249 | $ 272,971 | ||||||||
Long-term debt, including current maturities | 230,335 | 233,399 | 230,335 | 233,399 | ||||||||
Investment in joint venture | $ 5,534 | 4,944 | 5,534 | 4,944 | ||||||||
Equity method investment loss | 2,220 | 1,611 | $ 0 | |||||||||
Insurance recoveries | $ 16,325 | $ 0 | $ 0 | $ 0 | $ 0 | $ 16,325 | $ 0 | |||||
Earnings per share, diluted (in USD per share) | $ / shares | $ 1.01 | $ 1.06 | $ 1.15 | $ 1.69 | $ 1.44 | $ 1.08 | $ 0.91 | $ 0.90 | $ 4.92 | $ 4.37 | $ 2.37 | |
Previously Reported | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Earnings per share, diluted (in USD per share) | $ / shares | $ 4.34 | |||||||||||
Dryer Fire | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Commitment received from insurance | $ 43,688 | $ 43,688 | ||||||||||
Insurance recovery receivable | 7,188 | 7,188 | ||||||||||
Insurance recoveries | 23,583 | $ 3,780 | ||||||||||
Dryer Fire - Business Interruption | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Commitment received from insurance | 27,363 | 27,363 | ||||||||||
Dryer Fire - Damages | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Commitment received from insurance | $ 16,325 | 16,325 | ||||||||||
Minimum | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Derivative term (in months) | 1 month | |||||||||||
Maximum | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Derivative term (in months) | 24 months | |||||||||||
LMX | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Equity method ownership percentage | 50% | 50% | 50% | |||||||||
Equity method investment loss | $ 2,220 | $ 1,611 |
OTHER BALANCE SHEET CAPTIONS -
OTHER BALANCE SHEET CAPTIONS - Components of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Finished goods | $ 47,073 | $ 35,362 |
Barreled distillate (bourbons and other whiskeys) | 199,040 | 174,080 |
Raw materials | 29,931 | 24,981 |
Work in process | 1,645 | 1,261 |
Maintenance materials | 9,931 | 9,179 |
Other | 2,102 | 1,081 |
Total | $ 289,722 | $ 245,944 |
OTHER BALANCE SHEET CAPTIONS _2
OTHER BALANCE SHEET CAPTIONS - Components of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, at cost | $ 450,800 | $ 404,149 |
Less accumulated depreciation and amortization | (215,168) | (196,863) |
Property, plant, and equipment, net | 235,632 | 207,286 |
Land, buildings, and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, at cost | 155,385 | 150,367 |
Transportation equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, at cost | 805 | 697 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, at cost | 257,075 | 236,352 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, at cost | $ 37,535 | $ 16,733 |
OTHER BALANCE SHEET CAPTIONS _3
OTHER BALANCE SHEET CAPTIONS - Components of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Employee benefit plans | $ 2,389 | $ 1,427 |
Salaries and wages | 17,862 | 16,466 |
Property taxes | 1,318 | 1,495 |
Current operating lease liabilities | 3,807 | 2,865 |
Other | 3,340 | 2,616 |
Total | $ 28,716 | $ 24,869 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | $ 190,995 | $ 201,146 | $ 194,982 | $ 195,235 | $ 166,847 | $ 176,611 | $ 174,939 | $ 108,323 | $ 782,358 | $ 626,720 | $ 395,521 |
Distilling Solutions | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 428,478 | 352,504 | 313,309 | ||||||||
Distilling Solutions | Premium beverage alcohol | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 304,033 | 237,892 | 185,257 | ||||||||
Distilling Solutions | Brown Goods | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 229,523 | 162,074 | 121,384 | ||||||||
Distilling Solutions | White Goods | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 74,510 | 75,818 | 63,873 | ||||||||
Distilling Solutions | Food grade alcohol | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 350,845 | 300,520 | 265,939 | ||||||||
Distilling Solutions | Industrial alcohol | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 46,812 | 62,628 | 80,682 | ||||||||
Distilling Solutions | Fuel grade alcohol | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 13,681 | 14,916 | 5,630 | ||||||||
Distilling Solutions | Distillers feed and related co-products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 40,354 | 19,545 | 26,109 | ||||||||
Distilling Solutions | Warehouse services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 23,598 | 17,523 | 15,631 | ||||||||
Branded Spirits | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 237,939 | 183,566 | 4,149 | ||||||||
Branded Spirits | Ultra premium | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 48,245 | 27,722 | 1,785 | ||||||||
Branded Spirits | Super premium | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 12,274 | 8,937 | 2,196 | ||||||||
Branded Spirits | Premium | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 24,211 | 17,626 | 125 | ||||||||
Branded Spirits | Premium plus | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 84,730 | 54,285 | 4,106 | ||||||||
Branded Spirits | Mid | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 82,530 | 71,292 | 0 | ||||||||
Branded Spirits | Value | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 47,395 | 38,520 | 0 | ||||||||
Branded Spirits | Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 23,284 | 19,469 | 43 | ||||||||
Ingredient Solutions | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 115,941 | 90,650 | 78,063 | ||||||||
Ingredient Solutions | Specialty wheat starches | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 62,567 | 47,758 | 41,631 | ||||||||
Ingredient Solutions | Specialty wheat proteins | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 39,313 | 31,485 | 26,960 | ||||||||
Ingredient Solutions | Commodity wheat starch | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | 14,023 | 10,014 | 7,630 | ||||||||
Ingredient Solutions | Commodity wheat protein | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Sales to customers: | $ 38 | $ 1,393 | $ 1,842 |
BUSINESS COMBINATION - Narrativ
BUSINESS COMBINATION - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Apr. 01, 2021 | Jan. 01, 2020 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 226,294 | $ 226,294 | ||||
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% | |||||
Decrease in cash consideration | $ 608 | |||||
Increase in stock consideration (in shares) | 1,373 | |||||
Goodwill | $ 223,556 | |||||
Intangible assets | 219,500 | |||||
Sales | 177,607 | |||||
Income before income taxes | 17,027 | |||||
Transaction costs incurred | 8,927 | |||||
Adjustments to pro forma net income | $ (100,597) | $ (46,200) | ||||
Luxco | Acquisition-related Costs | ||||||
Business Acquisition [Line Items] | ||||||
Adjustments to pro forma net income | $ 7,037 | |||||
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 | |||||
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 | 1 Months Ended | 12 Months Ended | |||
Apr. 01, 2021 | Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination, Separately Recognized Transactions [Line Items] | |||||
Purchase of business, net of cash acquired | $ 0 | $ 149,005 | $ 2,750 | ||
Goodwill | $ 226,294 | $ 226,294 | |||
Luxco | |||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||
Purchase of business, net of cash acquired | $ 149,484 | ||||
Value of MGP Common Stock issued at close | 296,279 | ||||
Fair value of total consideration transferred | 445,763 | ||||
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 | 87,509 | ||||
Accounts payable | 14,453 | ||||
Federal and state excise taxes payable | 8,352 | ||||
Accrued expenses and other | 2,832 | ||||
Other noncurrent liabilities | 196 | ||||
Deferred income taxes | 57,034 | ||||
Total liabilities | 170,376 | ||||
Goodwill | 223,556 | ||||
Total | $ 445,763 | ||||
Common stock issued to acquire business (in shares) | 5,007,833 | ||||
Common stock price to acquire business (in dollars per share) | $ 59.15 | ||||
Increase in stock consideration (in shares) | 1,373 | ||||
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 | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Sales | $ 671,090 | $ 592,025 | |
Net income | $ 100,597 | $ 46,200 | |
Basic earnings per sale (in USD per share) | $ 4.84 | $ 2.09 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Apr. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 2,070 | $ 1,552 | |
Goodwill | 226,294 | 226,294 | |
Branded Spirits | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | 226,294 | 226,294 | |
Indefinite-lived intangible assets | $ 178,990 | $ 178,990 | |
Luxco | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 223,556 | ||
Luxco | Distribution Rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | 37,778 | ||
Accumulated amortization | $ 3,622 | ||
Weighted average useful life | 20 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Expected Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 2,070 |
2024 | 2,070 |
2025 | 2,070 |
2026 | 2,070 |
2027 | 2,070 |
Thereafter | 27,428 |
Total | $ 37,778 |
CORPORATE BORROWINGS - Indebted
CORPORATE BORROWINGS - Indebtedness Outstanding Summary (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 16, 2021 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 236,450,000 | $ 239,853,000 | ||
Unamortized loan fees | (6,115,000) | (6,454,000) | ||
Total indebtedness outstanding, net | 230,335,000 | 233,399,000 | ||
Less current maturities of long-term debt | (5,600,000) | (3,227,000) | ||
Long-term debt | $ 224,735,000 | 230,172,000 | ||
Credit Agreement | Revolver | ||||
Debt Instrument [Line Items] | ||||
Credit Agreement, interest rate | 5.46% | |||
Credit Agreement | Revolver | Revolving Credit Agreement, Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 0 | 0 | ||
Credit Agreement, interest rate | 5.46% | |||
Convertible Debt | Convertible Note 1.88% Due 2041 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 201,250,000 | 201,250,000 | ||
Unamortized loan fees | $ (6,025,000) | |||
Senior secured notes, stated interest rate | 1.88% | 1.88% | ||
Secured Debt | Note Purchase Agreement Due 2027 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 15,200,000 | 18,400,000 | ||
Senior secured notes, stated interest rate | 3.53% | 3.53% | ||
Secured Debt | Note Purchase Agreement Due 2029 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 20,000,000 | 20,000,000 | ||
Senior secured notes, stated interest rate | 3.80% | |||
Other long-term borrowings | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 0 | $ 203,000 |
CORPORATE BORROWINGS - Narrativ
CORPORATE BORROWINGS - Narrative (Details) | 12 Months Ended | |||||||||
Nov. 16, 2021 USD ($) d | Apr. 30, 2019 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2017 USD ($) | Jul. 29, 2021 USD ($) | Jul. 28, 2021 USD ($) | May 14, 2021 USD ($) | Feb. 14, 2020 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Proceeds from credit agreement - revolver | $ 0 | $ 242,300,000 | $ 54,700,000 | |||||||
Unamortized loan fees | 6,115,000 | 6,454,000 | ||||||||
Long-term debt, gross | 236,450,000 | 239,853,000 | ||||||||
Credit Agreement Due 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Credit agreement - revolver | $ 400,000,000 | $ 300,000,000 | ||||||||
Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
New loan fees | 0 | |||||||||
Unamortized loan fees | 1,177,000 | |||||||||
Note Purchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized loan fees | 90,000 | |||||||||
Secured Debt | Note Purchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
New loan fees | 0 | |||||||||
Term loan face amount | 20,000 | |||||||||
Secured Debt | Note Purchase Agreement Due 2027 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt, gross | $ 15,200,000 | 18,400,000 | ||||||||
Proceeds from issuance of debt | $ 20,000,000 | |||||||||
Senior secured notes, stated interest rate | 3.53% | 3.53% | ||||||||
Secured Debt | Note Purchase Agreement Due 2029 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt, gross | $ 20,000,000 | 20,000,000 | ||||||||
Proceeds from issuance of debt | $ 20,000,000 | |||||||||
Senior secured notes, stated interest rate | 3.80% | |||||||||
Convertible Debt | Convertible Note 1.88% Due 2041 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
New loan fees | $ 0 | |||||||||
Unamortized loan fees | 6,025,000 | |||||||||
Long-term debt, gross | $ 201,250,000 | 201,250,000 | ||||||||
Proceeds from issuance of debt | $ 201,250,000 | |||||||||
Senior secured notes, stated interest rate | 1.88% | 1.88% | ||||||||
Conversion ratio | 10.3911 | |||||||||
Threshold of trading days | d | 20 | |||||||||
Threshold of consecutive trading days | d | 30 | |||||||||
Threshold percentage | 130% | |||||||||
Threshold of business day | d | 5 | |||||||||
Threshold period | d | 10 | |||||||||
Measurement percentage | 0.98 | |||||||||
Convertible Debt | Convertible Note 1.88% Due 2041 | Initial Purchasers | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of debt | $ 26,250,000 | |||||||||
Revolver | Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Contingent increase in borrowing capacity | 100,000,000 | |||||||||
Remaining borrowing capacity | $ 400,000,000 | |||||||||
Credit Agreement, interest rate | 5.46% | |||||||||
Revolver | Credit Agreement | Revolving Credit Agreement, Due 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt, gross | $ 0 | $ 0 | ||||||||
Credit Agreement, interest rate | 5.46% | |||||||||
Revolver | Secured Debt | Note Purchase Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Remaining borrowing capacity | $ 120,000,000 | |||||||||
Term loan face amount | $ 140,000 | $ 105,000 | $ 105,000 |
CORPORATE BORROWINGS - Summary
CORPORATE BORROWINGS - Summary of Leases and Debt Maturities (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2023 | $ 5,600 |
2024 | 6,400 |
2025 | 6,400 |
2026 | 6,400 |
2027 | 5,600 |
Thereafter | 206,050 |
Total | $ 236,450 |
INCOME TAXES - Provision (Benef
INCOME TAXES - Provision (Benefit) for Income Taxes from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||||||||||
Federal | $ 26,107 | $ 19,746 | $ 10,825 | ||||||||
State | 4,438 | 3,489 | 1,291 | ||||||||
Foreign | (223) | 294 | 0 | ||||||||
Current income tax expense (benefit) | 30,322 | 23,529 | 12,116 | ||||||||
Deferred: | |||||||||||
Federal | 2,870 | 5,345 | (302) | ||||||||
State | (1,821) | 1,405 | 442 | ||||||||
Foreign | (71) | 0 | 0 | ||||||||
Deferred income tax expense (benefit) | 978 | 6,750 | 140 | ||||||||
Total | $ 5,263 | $ 7,533 | $ 7,339 | $ 11,165 | $ 11,578 | $ 7,674 | $ 6,412 | $ 4,615 | $ 31,300 | $ 30,279 | $ 12,256 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 01, 2021 | |
Operating Loss Carryforwards [Line Items] | ||||
Income tax expense (benefit) allocated to comprehensive income (loss) | $ 33 | $ 19 | $ 229 | |
Operating loss carryforward, valuation allowance | 2,073 | 1,657 | $ 862 | |
Net deferred tax liability | 67,112 | 66,101 | ||
Luxco | ||||
Operating Loss Carryforwards [Line Items] | ||||
Deferred tax liability resulting from merger | $ 57,034 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | 21,537 | 19,823 | ||
Tax credit carryforward | $ 5,052 | $ 2,966 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of provision for income taxes from continuing operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||||||||||
“Expected” provision at federal statutory rate | $ 29,442 | $ 25,435 | $ 11,046 | ||||||||
State income taxes, net | 6,446 | 5,713 | 2,408 | ||||||||
Foreign income taxes | (223) | 294 | 0 | ||||||||
Change in valuation allowance | 416 | 204 | (422) | ||||||||
Federal and state tax credits | (3,506) | (1,363) | (1,035) | ||||||||
Other | (1,241) | (35) | 203 | ||||||||
Total | $ 5,263 | $ 7,533 | $ 7,339 | $ 11,165 | $ 11,578 | $ 7,674 | $ 6,412 | $ 4,615 | $ 31,300 | $ 30,279 | $ 12,256 |
Effective tax rate | 22.30% | 25% | 23.30% | ||||||||
Federal | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Share-based compensation | $ (34) | $ 31 | $ 56 |
INCOME TAXES - Temporary Differ
INCOME TAXES - Temporary Differences Related to Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred income tax assets: | ||
Share-based compensation | $ 2,462 | $ 1,973 |
State tax credit carryforwards | 3,991 | 2,343 |
Operating loss carryforwards | 3,040 | 2,416 |
Inventories | 1,936 | 1,923 |
Operating lease liabilities | 3,949 | 2,536 |
Deferred compensation | 691 | 1,357 |
Other | 3,002 | 3,362 |
Gross deferred income tax assets | 19,071 | 15,910 |
Less: valuation allowance | (2,073) | (1,657) |
Net deferred income tax assets | 16,998 | 14,253 |
Deferred income tax liabilities: | ||
Property, plant and equipment | (25,623) | (24,627) |
Intangibles | (47,187) | (46,956) |
Inventory | (2,812) | (4,307) |
Operating lease right-of-use assets | (3,850) | (2,487) |
Convertible Senior Note | (2,424) | (411) |
Other | (2,214) | (1,566) |
Gross deferred income tax liabilities | (84,110) | (80,354) |
Net deferred income tax liability | $ (67,112) | $ (66,101) |
INCOME TAXES - Change in Valuat
INCOME TAXES - Change in Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ 1,657 | $ 862 |
Increase (decrease) | 416 | 795 |
Ending balance | $ 2,073 | $ 1,657 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized Tax Benefits [Roll Forward] | |||
Beginning of year balance | $ 113 | $ 112 | $ 255 |
Additions based on prior year tax positions | 75 | 0 | 2 |
Additions based on current year tax positions | 2 | 31 | 20 |
Reduction for prior year tax positions | (34) | (30) | 0 |
Reductions for settlements | 0 | 0 | (165) |
End of year balance | $ 156 | $ 113 | $ 112 |
EQUITY AND EPS - Narrative (Det
EQUITY AND EPS - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 boardMember | Feb. 25, 2019 USD ($) | |
Equity [Abstract] | ||
Number of board members that common stockholders are entitled to elect | 4 | |
Total number of board members | 9 | |
Number of board members preferred stock shareholders entitled to elect | 5 | |
Board of directors, term of service | 1 year | |
Minimum single shareholder ownership percentage to call special stockholder meeting | 10% | |
Share repurchase authorization, amount | $ | $ 25,000,000 |
EQUITY AND EPS - Computations o
EQUITY AND EPS - Computations of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operations: | |||||||||||
Net income | $ 22,511 | $ 23,628 | $ 25,362 | $ 37,371 | $ 31,658 | $ 23,673 | $ 20,059 | $ 15,427 | $ 108,872 | $ 90,817 | $ 40,345 |
Net loss attributable to noncontrolling interest | 590 | 490 | 0 | ||||||||
Income attributable to participating securities (unvested shares and units) | (871) | (712) | (261) | ||||||||
Net income used in Earnings Per Share calculation, basic | 108,591 | 90,595 | 40,084 | ||||||||
Net income used in Earnings Per Share calculation, diluted | $ 108,591 | $ 90,595 | $ 40,084 | ||||||||
Share information: | |||||||||||
Weighted average common shares, basic (in shares) | 22,002,990 | 20,719,663 | 16,937,125 | ||||||||
Weighted average common shares, diluted (in shares) | 22,053,966 | 20,719,663 | 16,937,125 | ||||||||
Earnings per share, basic (in USD per share) | $ 1.02 | $ 1.07 | $ 1.15 | $ 1.69 | $ 1.44 | $ 1.08 | $ 0.91 | $ 0.90 | $ 4.94 | $ 4.37 | $ 2.37 |
Earnings per share, diluted (in USD per share) | 1.01 | $ 1.06 | $ 1.15 | $ 1.69 | $ 1.44 | $ 1.08 | $ 0.91 | $ 0.90 | 4.92 | $ 4.37 | $ 2.37 |
Dilutive effect of convertible senior notes (in shares) | 0 | 0 | |||||||||
Convertible Debt | Convertible Note 1.88% Due 2041 | |||||||||||
Share information: | |||||||||||
Conversion price (in USD per share) | $ 96.24 | $ 96.24 | |||||||||
Restricted Stock Units (RSUs) | |||||||||||
Share information: | |||||||||||
Participating securities (in shares) | 177,398 | 163,024 | 110,665 |
EQUITY AND EPS - Schedule of Co
EQUITY AND EPS - Schedule of Common Stock Activity (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Capital Stock Preferred | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Shares outstanding at beginning of period (in shares) | 437 | 437 |
Issuance of Common Stock (in shares) | 0 | 0 |
Repurchase of Common Stock (in shares) | 0 | 0 |
Shares outstanding at end of period (in shares) | 437 | 437 |
Common Stock | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Shares outstanding at beginning of period (in shares) | 21,964,314 | 16,915,862 |
Issuance of Common Stock (in shares) | 38,760 | 5,060,339 |
Repurchase of Common Stock (in shares) | (9,032) | (11,887) |
Shares outstanding at end of period (in shares) | 21,994,042 | 21,964,314 |
EQUITY AND EPS - Dividends (Det
EQUITY AND EPS - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||||||||||||||
Dividends declared (in USD per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | $ 0.48 | $ 0.48 |
Dividends and dividend equivalents (in USD per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | $ 0.48 | $ 0.48 |
Dividend payment | $ 2,639 | $ 2,639 | $ 2,638 | $ 2,638 | $ 2,635 | $ 2,635 | $ 2,635 | $ 2,033 | $ 2,030 | $ 2,029 | $ 2,027 | $ 2,047 | $ 10,554 | $ 9,938 | $ 8,133 |
Dividend equivalent payment | 23 | 23 | 23 | 23 | 20 | 20 | 20 | 19 | 14 | 14 | 14 | 13 | 92 | 79 | 55 |
Total payment | $ 2,662 | $ 2,662 | $ 2,661 | $ 2,661 | $ 2,655 | $ 2,655 | $ 2,655 | $ 2,052 | $ 2,044 | $ 2,043 | $ 2,041 | $ 2,060 | $ 10,646 | $ 10,017 | $ 8,188 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | Dec. 31, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of contract (in years) | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of contract (in years) | 6 years |
LEASES - Components of Lease Co
LEASES - Components of Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Total leased assets | $ 15,042 | $ 9,671 |
Current operating lease liabilities | 3,807 | 2,865 |
Long-term operating lease liabilities | 11,622 | 6,997 |
Total operating lease liability | 15,429 | 9,862 |
Operating lease costs | 4,278 | 2,358 |
Short-term lease costs | 415 | 1,043 |
Sublease income | 0 | (4) |
Net lease costs | 4,693 | 3,397 |
Operating cash flows from operating leases | 4,082 | 2,857 |
Right-of-use assets obtained in exchange for lease obligations | $ 3,417 | $ 7,312 |
Weighted average discount rate | 2.03% | 2.26% |
Weighted average remaining lease term | 4 years 7 months 6 days | 4 years 1 month 6 days |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other | Accrued expenses and other |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 4,066 | |
2024 | 3,452 | |
2025 | 3,073 | |
2026 | 2,700 | |
2027 | 1,601 | |
Thereafter | 1,201 | |
Total lease payments | 16,093 | |
Less interest | (664) | |
Total operating lease liability | $ 15,429 | $ 9,862 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | |||||||
Proceeds from insurance recoveries | $ 16,325,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 16,325,000 | $ 0 |
Industrial Revenue Bond With Williamstown Kentucky | |||||||
Loss Contingencies [Line Items] | |||||||
Industrial revenue bonds available | 55,500 | ||||||
Industrial revenue bonds used | 21,000 | ||||||
Industrial Revenue Bond With Nelson County Kentucky | |||||||
Loss Contingencies [Line Items] | |||||||
Industrial revenue bonds available | 175,000 | ||||||
Industrial revenue bonds used | $ 48,000 |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) plan shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cost recognized | $ 2,517 | $ 1,826 | $ 1,733 |
Common stock, authorized (in shares) | shares | 40,000,000 | 40,000,000 | |
Treasury stock (in shares) | shares | 1,131,124 | 1,160,852 | |
Number of active plans | plan | 2 | ||
Share-based compensation expense | $ 3,487 | $ 2,346 | $ 2,723 |
Grants in period (in shares) | shares | 131,663 | ||
Stock shares repurchased (in shares) | shares | 9,031 | 11,887 | 10,437 |
Stock shares repurchased | $ 715 | $ 767 | $ 358 |
EDC plan investments | 2,176 | 3,072 | |
EDC plan liabilities, current | 510 | 617 | |
EDC plan liabilities, noncurrent | $ 2,191 | $ 2,981 | |
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grants in period (in shares) | shares | 69,492 | 95,113 | 38,700 |
Options, vested in period, fair value | $ 2,252 | $ 2,687 | $ 1,384 |
Unrecognized compensation costs, other than options | $ 3,098 | ||
Period for recognition of unrecognized compensation cost | 1 year 3 months 18 days | ||
Short-term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Targeted bonus award expense | $ 13,370 | 11,155 | 9,732 |
Short-term Incentive Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 2,018 | 960 | $ 2,566 |
Award vesting period | 48 months | ||
Short-term Incentive Plan | Restricted Stock Units (RSUs) | Award vesting period, tranche one | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 12 months | ||
Short-term Incentive Plan | Restricted Stock Units (RSUs) | Remaining award vesting period | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 36 months | ||
The 2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock authorized but not granted (in shares) | shares | 1,500,000 | ||
The 2014 Plan | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Grants in period (in shares) | shares | 586,353 | ||
The Director's Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock authorized but not granted (in shares) | shares | 300,000 | ||
Post-employment benefits | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Current benefit obligation | $ 190 | 232 | |
Noncurrent benefit obligation | $ (847) | $ (1,159) |
EMPLOYEE BENEFIT PLANS - Restri
EMPLOYEE BENEFIT PLANS - Restricted Stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Units | |||
Granted (in shares) | 131,663 | ||
Restricted Stock Units (RSUs) | |||
Units | |||
Non vested balance at beginning of period (in shares) | 167,994 | 118,855 | 116,855 |
Granted (in shares) | 69,492 | 95,113 | 38,700 |
Forfeited (in shares) | (28,542) | (7,915) | (5,278) |
Vested (in shares) | (29,406) | (38,059) | (31,422) |
Non vested balance at end of period (in shares) | 179,538 | 167,994 | 118,855 |
Weighted Average Grant-Date Fair Value | |||
Non vested balance at beginning of period (in USD per share) | $ 61.07 | $ 60.56 | $ 65.73 |
Granted (in USD per share) | 78.08 | 65.66 | 31.93 |
Forfeited (in USD per share) | 61.11 | 62.77 | 63.17 |
Vested (in USD per share) | 76.59 | 70.60 | 44.06 |
Non vested balance at end of period (in USD per share) | $ 65.11 | $ 61.07 | $ 60.56 |
CONCENTRATIONS AND RELATED PA_2
CONCENTRATIONS AND RELATED PARTIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 01, 2021 | |
LMX | ||||
Concentration Risk [Line Items] | ||||
Related party purchases | $ 37,274 | $ 23,463 | ||
MGP | Lux Family Group | ||||
Concentration Risk [Line Items] | ||||
Lux family group ownership percentage | 22.80% | |||
Meier's | ||||
Concentration Risk [Line Items] | ||||
Related party purchases | $ 2,718 | |||
Related party transaction | $ 2,411 | |||
LMX | ||||
Concentration Risk [Line Items] | ||||
Equity method ownership percentage | 50% | 50% | ||
Revenue | Customer Concentration Risk | Ten Largest Customers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 38% | 36% | 37% | |
Cost of Goods and Service Benchmark | Supplier Concentration Risk | 2 Grain Suppliers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 23% | 14% | 30% | |
Cost of Goods and Service Benchmark | Supplier Concentration Risk | 10 Largest Suppliers | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 49% | 43% | 65% |
OPERATING SEGMENTS - Narrative
OPERATING SEGMENTS - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
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 | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||||||||
Sales to customers: | $ 190,995 | $ 201,146 | $ 194,982 | $ 195,235 | $ 166,847 | $ 176,611 | $ 174,939 | $ 108,323 | $ 782,358 | $ 626,720 | $ 395,521 |
Gross profit: | 63,213 | 59,048 | 59,224 | 71,821 | 52,753 | 57,086 | 56,827 | 32,299 | 253,306 | 198,965 | 98,806 |
Depreciation and amortization | 21,455 | 19,092 | 12,961 | ||||||||
Income (loss) before income taxes: | $ 27,774 | $ 31,161 | $ 32,701 | $ 48,536 | $ 43,236 | $ 31,347 | $ 26,471 | $ 20,042 | 140,172 | 121,096 | 52,601 |
Foreign sources | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales to customers: | 56,719 | 42,593 | 23,905 | ||||||||
Distilling Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales to customers: | 428,478 | 352,504 | 313,309 | ||||||||
Gross profit: | 126,282 | 114,106 | 75,773 | ||||||||
Branded Spirits | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales to customers: | 237,939 | 183,566 | 4,149 | ||||||||
Gross profit: | 95,521 | 62,644 | 2,187 | ||||||||
Ingredient Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales to customers: | 115,941 | 90,650 | 78,063 | ||||||||
Gross profit: | 31,503 | 22,215 | 20,846 | ||||||||
Operating Segments | Distilling Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 11,641 | 10,766 | 9,816 | ||||||||
Income (loss) before income taxes: | 121,651 | 110,317 | 73,533 | ||||||||
Operating Segments | Branded Spirits | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 5,909 | 5,138 | 100 | ||||||||
Income (loss) before income taxes: | 33,333 | 20,742 | (2,510) | ||||||||
Operating Segments | Ingredient Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 2,473 | 2,069 | 1,871 | ||||||||
Income (loss) before income taxes: | 27,532 | 19,194 | 18,024 | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Depreciation and amortization | 1,432 | 1,119 | 1,174 | ||||||||
Income (loss) before income taxes: | $ (42,344) | $ (29,157) | $ (36,446) |
OPERATING SEGMENTS - Identifiab
OPERATING SEGMENTS - Identifiable Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 1,158,211 | $ 1,041,467 |
Ireland | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 14,209 | 12,758 |
Long-lived assets | 3,042 | 2,930 |
Operating Segments | Distilling Solutions | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 350,068 | 314,816 |
Operating Segments | Branded Spirits | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 698,985 | 658,826 |
Operating Segments | Ingredient Solutions | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 63,943 | 43,009 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 45,215 | $ 24,816 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Non-cash investing and financing activities: | |||
Purchase of property, plant, and equipment in accounts payable | $ 9,768 | $ 7,232 | $ 3,375 |
Additional cash payment information: | |||
Interest paid | 5,952 | 3,457 | 2,212 |
Income taxes paid | $ 29,052 | $ 29,766 | $ 10,566 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales | $ 190,995 | $ 201,146 | $ 194,982 | $ 195,235 | $ 166,847 | $ 176,611 | $ 174,939 | $ 108,323 | $ 782,358 | $ 626,720 | $ 395,521 |
Cost of sales | 127,782 | 142,098 | 135,758 | 123,414 | 114,094 | 119,525 | 118,112 | 76,024 | 529,052 | 427,755 | 296,715 |
Gross profit | 63,213 | 59,048 | 59,224 | 71,821 | 52,753 | 57,086 | 56,827 | 32,299 | 253,306 | 198,965 | 98,806 |
Advertising and promotion expenses | 10,866 | 7,279 | 6,065 | 5,504 | 6,210 | 5,664 | 3,371 | 853 | 29,714 | 16,098 | 2,712 |
SG&A expenses | 22,632 | 17,905 | 17,853 | 16,237 | 17,552 | 18,538 | 25,793 | 10,946 | 74,627 | 72,829 | 41,853 |
Insurance recoveries | (16,325) | 0 | 0 | 0 | 0 | (16,325) | 0 | ||||
Operating income | 29,715 | 33,864 | 35,306 | 50,080 | 45,316 | 32,884 | 27,663 | 20,500 | 148,965 | 126,363 | 54,241 |
Interest expense, net | (960) | (1,350) | (1,543) | (1,598) | (1,329) | (1,116) | (1,104) | (488) | (5,451) | (4,037) | (2,267) |
Other income (loss), net | (981) | (1,353) | (1,062) | 54 | (751) | (421) | (88) | 30 | (3,342) | (1,230) | 627 |
Income before income taxes | 27,774 | 31,161 | 32,701 | 48,536 | 43,236 | 31,347 | 26,471 | 20,042 | 140,172 | 121,096 | 52,601 |
Income tax expense (benefit) | 5,263 | 7,533 | 7,339 | 11,165 | 11,578 | 7,674 | 6,412 | 4,615 | 31,300 | 30,279 | 12,256 |
Net income | $ 22,511 | $ 23,628 | $ 25,362 | $ 37,371 | $ 31,658 | $ 23,673 | $ 20,059 | $ 15,427 | $ 108,872 | $ 90,817 | $ 40,345 |
Basic EPS data (in USD per share) | $ 1.02 | $ 1.07 | $ 1.15 | $ 1.69 | $ 1.44 | $ 1.08 | $ 0.91 | $ 0.90 | $ 4.94 | $ 4.37 | $ 2.37 |
Diluted EPS data (in USD per share) | $ 1.01 | $ 1.06 | $ 1.15 | $ 1.69 | $ 1.44 | $ 1.08 | $ 0.91 | $ 0.90 | $ 4.92 | $ 4.37 | $ 2.37 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||||||||||||||
Feb. 23, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | ||||||||||||||||
Dividends declared (in USD per share) | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.12 | $ 0.48 | $ 0.48 | $ 0.48 | |
Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Dividends declared (in USD per share) | $ 0.12 |