MGPI sees need for ingredient business improvement

by Jeff Gelski
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ATCHISON, KAS. — Even though operating income slipped in its ingredients solutions business, MGP Ingredients recorded net income of $6.2 million, or 34c per share, in the third quarter ended Sept. 30. The Atchison-based company suffered a net loss of $6.3 million in the previous year’s third quarter.

Third-quarter net sales were $77.5 million. Gross profit for the third quarter was $7.3 million, or 9.4% of net sales, which compared with $800,000, or 1% of net sales, in the previous year’s third quarter.

“Our profit growth this quarter is a result of continued improvement in our distillery products segment and reflects a favorable shift towards premium spirits,” said Gus Griffin, president and chief executive officer, when results were given Nov. 12. “Ingredient solutions, while profitable, is not growing the way we would like. We are confident that we have identified opportunities and the appropriate strategies to drive growth for this business. Our quarterly results also benefited from a strong contribution from the ICP (Illinois Corn Processing) joint venture.”

In the ingredients solutions segment, third-quarter pre-tax operating income was $1.1 million, down from $1.3 million in the previous year’s third quarter. Third-quarter net sales were $13.8 million. In the Distillery Products segment in the third quarter, pre-tax operating income was $6.5 million, which compared with a loss of $1.6 million in the previous year’s third quarter. Joint venture (including ICP) equity investment earnings were $1.6 million in the third quarter, which compared with a loss of $100,000 in the previous year’s third quarter.

Companywide for the nine months ended Sept. 30, net income was $16.1 million, which compared with a loss of $4.6 million in the same time period of the previous year, and net sales were $237.1 million.
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