MGP Ingredients announces a US$2.99M net loss for Q1 2025
In the same period last year, the company reported a net income of $20.4 million, which amounted to 92 cents per share of common stock.
USA – For the first quarter ending March 31, MGP Ingredients experienced a net loss of US$2.99M, and recorded total sales amounting to US$121.65M, a decline of 29% from US$170.65M in the previous year.
Within the company’s Ingredients Solutions segment, gross profits fell sharply, and sales dropped by more than a quarter during the three-month period.
The gross profit for this segment was US$2.45M, down 60% from US$6.18M a year earlier, while sales decreased to US$26.48M, a 26% drop from US$35.57M in the same quarter last year.
Mark Davidson, the vice president and corporate controller, stated that the decline in sales was primarily driven by reduced sales of specialty wheat starches and a less favourable net price mix for specialty wheat proteins.
“The declines in specialty wheat starches and proteins were impacted by supply challenges caused by adverse weather, complexities associated with the closure of the Atchison distillery, and delays in the commercialization of new customers,” he said
Brandon Gall, the interim president, CEO, and CFO expressed optimism about the division’s prospects, highlighting that their Fibersym branded specialty starch continues to gain traction among food manufacturers seeking FDA-approved dietary fiber solutions.
He also noted progress in specialty proteins, particularly with new customers in North America, especially in the plant-based and functional food sectors.
“Demand for our specialty ingredients remains strong, and we are executing with urgency,” Gall remarked.
He added that the company is increasing investments in their ingredients facility to enhance throughput, improve reliability, and streamline operations.
“Our teams are energized. Our customer pipeline is growing, and our commercial execution is improving. We are fostering operational excellence with greater cross-functional collaboration to enhance transparency, accountability, and responsiveness,” said Gall.
Despite acknowledging that the quarter was challenging for the ingredients business, Gall stated that the results were largely in line with expectations.
In regard to the company’s alcoholic beverages segment, Davidson noted that while sales of branded premium spirits were strong, other segments of the spirits business were facing pressure.
Gall indicated that the weakness within the core spirits business aligns with overall consumer trends.
Following the announcement of the financial results on May 1, shares of MGP Ingredients increased by US$1.40, or 4.8%, closing at US$30.87.
Additionally, the company stated that it successfully expanded its credit facility from US$400M to US$500M on April 24, extending the maturity to 2030.
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