ATCHISON, KAN. — A faster-than-expected and larger-than-expected decline in the company’s brown goods business dragged down overall earnings during fiscal 2024 at MGP Ingredients, Inc. But executives at the Atchison-based company remained upbeat about the prospects for the company’s Branded Spirits and Ingredient Solutions businesses.

“These two businesses (Branded Spirits and Ingredient Solutions) on a combined basis accounted for a majority of our sales and gross profit in 2024, and we believe we are well positioned to deliver attractive growth and make them an even bigger driver of our consolidated financial performance in 2025 and beyond,” Brandon Gall, interim president and chief executive officer and vice president of finance and chief financial officer, said during a Feb. 26 call with investment analysts. Gall stepped into the interim roles after David Bratcher resigned at the end of December.

The positive outlook for the two segments was not enough to prevent a slide in the company’s share price, which dipped to a 52-week low of $31.31 on Feb. 26.

Net income at MGPI in the year ended Dec. 31, 2024, was $34.29 million, equal to $1.56 per share on the common stock, which was down 68% from $104.48 million, or $4.82 per share, in fiscal 2023. Sales were $703.63 million, down 16% from $836.52 million.

Adjusted net income during the most recent year fell 4% to $125.3 million. Results included $73.76 million in goodwill impairment and $137,000 in impairment charges. Results in the previous year included asset impairment charges of $19.39 million, related to the closing of the company’s Atchison distillery in December 2023.

During the fourth quarter, MGPI sustained a loss of $41.5 million, which compared with net income of $30.76 million, or $1.39 per share, in the same period a year ago. The most recent quarter included a one-time, non-cash adjustment of $73.8 million to lower the carrying amount of goodwill in the Branded Spirts segment. On an adjusted basis, net income fell 6% to $34.4 million during the quarter. Quarterly net sales were $180.8 million, down 16% from $214.89 million.

Excluding the impact of the Atchison distillery, gross profit in the Ingredient Solutions segment decreased 35% in fiscal 2024 to $26.2 million from $40.5 million in fiscal 2023, while sales decreased 1% to $130.6 million, as headwinds from the stronger US dollar and lower commodity starch sales were largely offset by continued strong growth of specialty starch sales, particularly under the Fibersym brand. During the fourth quarter, gross profit in the segment totaled $8.2 million, down from $12 million in the same period a year ago. Net sales during the quarter increased 4% to $34.7 million.

“Sequentially improving sales and gross margin performance in the fourth quarter reinforced our confidence in this business’s attractive long-term growth and gross margin upside potential,” Gall said. “Food with better functional nutrition, such as high protein and high fiber, continues to meaningful outgrow overall food industry spending.

“Our specialty starches under the Fibersym brand and specialty protein products under the Arise brand are designed to meet these needs. Our innovation pipeline remains strong with opportunities to expand into higher growth and markets, including plant-based foods and healthy snack categories. We continue to receive strong interest from both existing and new customers, and we are committed to working closely with them to develop ingredient solutions that align with emerging consumer trends. We’re positioning this business to take full advantage of these tailwinds by sharpening our commercial and operational execution.”

He added that the recent promotion of Mike Buttshaw to president of the Ingredient Solutions segment should enable “even closer cross-functional collaboration within the team.”