MGP Ingredients reported a weaker third quarter, with lower sales, profit and adjusted EBITDA than a year earlier. The company said adjusted EBITDA and adjusted basic earnings per share came in ahead of its expectations, and reaffirmed its 2026 full-year guidance.
MGP also declared a quarterly dividend of 12 cents per share. On Nov. 2, it plans to change its name to Sempreon Inc. and its Nasdaq ticker from MGPI to CASK.
Key details
- Quarterly results declined year over year: Sales fell 10% to $117.9 million, gross profit dropped 18% to $40.5 million, and gross margin contracted 3.5 percentage points to 34.3%.
- Earnings were lower: Net income was $6.9 million, compared with $15.4 million a year earlier. Adjusted net income was $8.6 million, down from $18.5 million. Basic earnings per share fell to 32 cents from 71 cents; adjusted basic EPS was 39 cents, versus 85 cents.
- Adjusted EBITDA fell: It was $21.5 million, down 33% from $32.3 million. Operating income declined 43% to $12 million; adjusted operating income fell 44% to $14 million.
- Sales trends differed across businesses: Branded Spirits sales of Penelope Bourbon grew 12%, while its mid-priced brands grew 6%. Ingredient Solutions sales increased 5%. Distilling Solutions continued to contend with an oversupplied market.
- The company attributed the sales decline mainly to lower brown-goods sales in Distilling Solutions and lower international private-label bottled-product sales in Branded Spirits. Higher Ingredient Solutions sales partly offset those declines.
- Costs pressured margins: Higher waste-starch-stream costs in Ingredient Solutions, higher costs in Branded Spirits and lower brown-goods volume more than offset lower distillation costs.
- Cash generation and debt: MGP generated $32 million of cash from operations during the quarter and reduced total debt by $28.4 million. Its net debt leverage ratio was 3.6 times at Sept. 30, compared with 1.8 times a year earlier.
- Capital spending: Capital expenditures totaled $11 million year to date, down from $25.4 million over the same period in 2025.
- Other expenses: Advertising and promotion costs declined 4% to $6.4 million, reflecting the timing of spending and savings from consolidating outside agencies. Selling, general and administrative expenses rose 14%, mainly because of a higher incentive-compensation accrual, partly offset by cost-saving efforts.
- Dividend and name change: The company declared a quarterly dividend of 12 cents per share. It said the name and ticker change to Sempreon Inc. (Nasdaq: CASK) will take effect Nov. 2.
The quarter’s results show both pressure on current profitability and a focus on reducing debt. The leverage ratio was higher than a year earlier even as MGP reported a reduction in total debt during the quarter. The company reaffirmed its full-year guidance, but the announcement did not state the guidance figures.