MGP Ingredients (MGPI) investor relations material

Executive summary

• First quarter 2026 sales were $106.4 million, down 13% year-over-year, with adjusted EBITDA of $15.0 million and adjusted EPS of $0.15, both exceeding expectations.

• Net loss was $134.8 million, primarily due to $179.5 million in non-cash impairment charges in Branded Spirits; adjusted net income was $3.3 million.

• Premium plus spirits, led by Penelope Bourbon, showed growth; Ingredient Solutions delivered strong sales and profit gains.

• Strategic focus included operational improvements, portfolio rationalization, and targeted investments in premium brands and digital marketing.

• Capital expenditures were reduced by 75% to $2.0 million, reflecting a focus on capital optimization.

Financial highlights

• Consolidated sales declined 13% year-over-year to $106.4 million; gross profit fell 22% to $33.6 million; gross margin dropped 400 basis points to 31.6%.

• Net loss was $134.8 million due to a $179.5 million non-cash impairment in Branded Spirits; adjusted net income was $3.3 million, down 57%.

• Adjusted EBITDA decreased 31% to $15.0 million; adjusted EPS fell 58% to $0.15.

• Advertising and promotion expenses declined 24% to $6.2 million; SG&A expense down 1%.

• Capital expenditures dropped 75% to $2.0 million; net debt leverage ratio at 2.1x as of March 31, 2026.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: net sales of $480–$500 million, adjusted EBITDA of $90–$98 million, and adjusted EPS of $1.50–$1.80.

• Operating cash flow expected at $50–$55 million and free cash flow at $30–$35 million, excluding Penelope earn-out.

• Capital expenditures for 2026 expected to be approximately $20 million; effective tax rate projected at 27%.

• Net leverage ratio expected to peak at 3.5x, improved from prior guidance.

• Management expects sources of cash to be adequate for capital expenditures, potential M&A, and operating needs for the next 12 months and beyond.