MGP Ingredients posts US$2.99M Q1 net loss amid sales decline

USA – MGP Ingredients, Inc. has reported a net loss of US$2.99 million for the first quarter ended March 31, 2025, citing lower sales across key business segments and higher financial liabilities.  

The Kansas-based distiller and food ingredient supplier saw consolidated sales fall 29% to US$121.65 million, compared to US$170.65 million in the same period last year. 

The decline in revenue was primarily attributed to anticipated decreases in brown goods and specialty ingredients sales within its Distilling Solutions and Ingredient Solutions divisions, respectively.  

Operating income also turned negative, posting a loss of US$0.7 million, largely due to lower gross profits and a US$10.6 million increase in the fair value of a contingent consideration liability tied to the strong performance of the Penelope spirits brand. 

Adjusted operating income stood at US$15.3 million, supported partially by a reduction in operating expenses. Adjusted net income dropped 68% year-on-year to US$7.8 million. 

Branded Spirits segment sales declined 4% to US$48.2 million. However, the company reported a 7% increase in sales within its Premium Plus portfolio, driven by stronger demand for select American whiskey and tequila products, particularly Penelope, El Mayor, and Rebel 100. 

“Our mid- and value-price brands declined by double digits during the quarter due to lower sales of certain tequila, liqueur, and cordials brands,” said Mark Davidson, vice president and corporate controller. “Meanwhile, Premium Plus sales increased by 7%, reflecting continued momentum in select American whiskey and tequila brands.” 

Interim president and CEO Brandon Gall emphasized that the Branded Spirits segment’s weakness aligns with broader industry trends. He noted that the company will focus on fewer, high-growth opportunities to optimize brand performance. 

The Ingredient Solutions segment also experienced a sharp decline. Gross profit fell 60% to US$2.45 million from US$6.18 million in the previous year, while sales decreased 26% to US$26.48 million.  

Davidson attributed the drop to reduced sales of specialty wheat starches and a weaker price mix for specialty wheat proteins, citing supply issues caused by adverse weather, the Atchison distillery closure, and delays in new customer commercialization. 

Despite the challenging quarter, MGP successfully expanded its financial capacity. On April 24, 2025, the company increased its credit facility from US$400 million to US$500 million and extended its maturity to 2030.  

Additionally, the accordion feature was raised from US$100 million to US$200 million, and the shelf for issuing up to US$250 million in senior secured promissory notes was extended through 2028. 

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