The following is a summary of the MGP Ingredients, Inc. (MGPI) Q1 2024 Earnings Call Transcript:

Financial Performance:

• MGP Ingredients reported a 15% decrease in Q1 2024 consolidated sales to $170.6 million, largely impacted by the closure of the Atchison distillery.

• Gross profit decreased by 10% to $62.8 million and net income fell by 34% to $20.6 million.

• Despite the fall in basic and diluted earnings per share to $0.92, the company managed to record a high cash flow from operations at $24.6 million for a Q1 period.

• The company's balance sheet continues to remain healthy with a debt total of $300.8 million and cash reserves at $19.5 million.

Business Progress:

• Despite the decreases in overall sales and profit, MGP managed to show sales growth in its Distilling Solutions segment, as well as the Ingredient Solutions and Premium Plus brands within branded spirits.

• The completed closure of the Atchison distillery has resulted in a record quarterly segment gross margin for the Distilling Solutions segment in Q1 2024.

• MGP managed to grow its points of distribution and expand its Premium Plus brand portfolio, shipping its product Finality into 2 new states during Q1.

• In addition, the company commissioned a new textured lead protein facility as part of its growth strategy.

• The company anticipates that input commodity costs will stabilize and expects margins to improve after a low in Q1, with the year-end projected to be in the mid-20s, gross margin-wise.

• Gross margin for Distilling Solutions is expected to be maintained in the low 40s going forward, due to a shift in mix.

• The company looks forward towards disciplined acquisitions that are margin accretive and help evolve the company into a branded spirits company.

More details: MGP Ingredients IR

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