MGP Ingredients (MGPI) Q4 2023 earnings summary

Executive summary

• Q4 sales rose 13% to $214.9M; gross profit rose 35% to $85.1M, while adjusted operating income increased 70% to $50.4M.

• FY23 sales grew 7% to $836.5M and record gross profit increased 20% to $304.7M; adjusted EBITDA rose 20% to $202.5M.

Financial highlights

• Q4 operating income was $43.1M, up 45%; net income was $31.0M and adjusted net income was $36.6M.

• Q4 basic and diluted EPS were each $1.39; adjusted basic and diluted EPS were each $1.64, versus $1.02 and $1.01, respectively, in Q4 2022.

• FY23 operating income was $148.6M, slightly lower YoY; adjusted operating income increased 21% to $180.3M.

• FY23 net income declined 2% to $107.1M; adjusted net income rose 20% to $131.1M. Basic EPS was $4.82 and diluted EPS $4.80; adjusted EPS was $5.90 basic and $5.88 diluted.

Outlook and guidance

• FY24 sales guidance is $742M–$756M, reflecting the December 2023 Atchison distillery closure.

• FY24 adjusted EBITDA guidance is $213M–$217M excluding share-based compensation add-backs, or $218M–$222M including them; adjusted basic EPS is $6.12–$6.23, with ~22.3M basic weighted average shares expected at year-end.

• Guidance midpoint implies 6% adjusted EBITDA growth; the calculation reflects the planned addition of share-based compensation expense to the adjusted EBITDA measure beginning Q1 2024.