MGP Ingredients (MGPI) investor relations material

Executive summary

• Julie Francis was appointed CEO, bringing strategic expertise and a growth mindset to drive long-term vision.

• Q2 2025 sales declined 24% to $145.5M, mainly due to lower Distilling Solutions and Branded Spirits sales, partially offset by Ingredient Solutions growth.

• Net income for Q2 2025 was $14.4M, down 55% year-over-year, with EPS at $0.67 compared to $1.43 in Q2 2024.

• All business segments showed sequential improvement, and the company reaffirmed its full-year outlook.

• Operating income fell 53% to $20.3M, impacted by lower gross profit in Distilling Solutions and an $8M increase in contingent consideration for Penelope.

Financial highlights

• Consolidated sales decreased 24% to $145.5M; gross margin declined 350 basis points to 40.1%.

• Adjusted EBITDA fell 38% to $35.9M; net income declined to $14.4M, with adjusted net income down 45% to $20.9M.

• Adjusted basic EPS dropped 43% to $0.97; operating cash flow year-to-date rose to $56.4M from $29.6M last year.

• Capital expenditures year-to-date were $18.7M, with full-year guidance reduced to $32.5M.

• Advertising and promotion expenses decreased 41% to $6.9M, reflecting a shift to higher-growth brands.

Outlook and guidance

• Full-year 2025 net sales expected in the $520M–$540M range, adjusted EBITDA $105M–$115M, and adjusted EPS $2.45–$2.75.

• Premium Plus sales projected to grow low single digits; mid and value tier sales expected to decline low double digits.

• Branded Spirits segment gross margins anticipated in the upper 40% range; effective tax rate around 25%.

• Capital expenditures for 2025 projected at $32.5M.

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