Ingredients company reports MGPI record results.
ATCHISON, Kansas. During the second quarter that concluded on June 30, MGP Ingredients, Inc.’s net income increased 137% to $19.99 million, or 91¢ per share on the common stock, from $8.43 million, or 50¢ per share, during the same period the previous year. Additionally, net sales grew, going from $92.56 million to $174.94 million, an 89% increase.
David J. Colo, president and chief executive officer, stated during a conference call with analysts on August 4 that “we experienced record results across each of our business segments this quarter, including the solid sales growth of aged whiskey, better-than-anticipated growth for our branded spirits segment, strong sales for our white beverage products as well as record results in both revenue and gross profit for our Ingredient Solutions segment.” “Top-line growth was observed in all of our business segments compared to the previous year. Our consolidated sales and profitability for the quarter therefore reached record highs.
While sales rose 39% to $24.2 million in the second quarter of fiscal 2021, the Ingredient Solutions segment’s gross profit improved to $6.4 million, up 36% from $4.7 million in the same period in fiscal 2020.
According to Mr. Colo, “this quarter, our specialty wheat protein sales grew 38.9%, and our specialty wheat starch sales grew 38.1%, both primarily driven by increased volume.” “We are convinced that our freshly rebranded ProTerra line of textured proteins and the strong private pipeline for these products will propel long-term growth for this market.
We think that the wide range of customers we serve and the products we offer are in line with the current, positive consumer trends, and we are encouraged by the high profit margins that follow.of our strategy to focus production and sales mix on our highest margin products.”
During the call’s Q&A session, Mr. Colo mentioned that MGPI was impacted by a cybersecurity incident that year, which had an impact on the company’s capacity to supply ingredients for roughly ten days in the fiscal 2020 second quarter. He noted that as a result, the company does not expect the segment’s 39% year-over-year sales growth to continue.
“It’s not a sustainable number in terms of ingredients quarter after quarter,” he clarified. “It would be more in line with what we’ve discussed on a few earlier calls, which is that while we do believe this business will grow, it won’t do so at those rates in the long run.”
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Considering the balance of the 2021 fiscal year, Vice President of Finance and Chief Financial Officer Brandon M. Gall stated that MGPI projects full-year sales to be between $570 million and $580 million, with adjusted EBITDA expected to be between $105 million and $110 million. It is anticipated that adjusted earnings per share will fall between $2.90 and $3. On the other hand, capital expenditures—which mainly represent CapEx associated with the acquisition of Luxco—are anticipated to come to $51.5 million, up from an earlier estimate of $43.3 million.
During the fourth quarter, the company’s Atchison facility experienced a fire that resulted in damage to the feed drying equipment and a brief loss of production time. Between $15 and $20 million of an estimated $31 million, according to Mr. Gall million in damages incurred at the plant are expected to be funded th