MGP Ingredients Reports Fourth-Quarter and Full-Year 2025 Results

ATCHISON, Kan.--( BUSINESS WIRE)--MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of branded and distilled spirits and food ingredient solutions, today reported results for the fourth quarter and full-year ended December 31, 2025.

“2025 was a year of deliberate repositioning for MGP,” said Julie Francis, president and CEO. “I am pleased with the team’s efforts as we did what we said we will do and made meaningful progress against each of the five initiatives we outlined at the start of the year, advanced our key priorities, and delivered full-year financial results above our prior expectations.”

She added, “From an industry standpoint, we believe that elevated inventory levels will continue to pressure our brown goods business in the near-term. However, we expect improved operational reliability in the Ingredient Solutions segment, continued premium plus momentum, and accelerated productivity and cost discipline to help partially offset these headwinds – all of which are reflected in our 2026 guidance.”

She concluded, “As we look ahead, we believe our enhanced strategic clarity, decisive actions, and disciplined execution will position the company to deliver sustained growth off of our 2026 guidance expectations. Many of these actions are well underway, and they are already changing how we operate, giving us confidence that MGP will emerge better aligned, more resilient, and well positioned for long-term value creation.”

2025 fourth quarter consolidated results compared to 2024 fourth quarter:

2025 full-year consolidated results compared to 2024 full year:

Consolidated results

Fourth quarter 2025 consolidated sales decreased by 23% compared to the prior-year period, primarily due to lower brown goods sales within the Distilling Solutions segment and the residual impact from the outage of a key piece of equipment on Ingredient Solutions segment sales. These drivers, coupled with higher waste starch stream disposal costs related to the Ingredient Solutions segment, also pressured gross profit, as fourth quarter consolidated gross profit declined by 35% to $48.3 million, while gross margin decreased 630 basis points to 34.9%. Selling, general and administrative ("SG&A") costs increased by 5% as productivity savings were more than offset by the reinstatement of incentive compensation. Advertising and promotion expenses decreased by 12%, as planned. Fourth quarter operating income decreased to a loss of $135.2 million, while adjusted operating income decreased 60% to $18.7 million and adjusted EBITDA decreased 51% to $26.1 million.

During the fourth quarter, the company recorded a $152.6 million non-cash adjustment to the carrying value of goodwill and indefinite-lived intangible assets in the Branded Spirits segment, primarily due to certain unfavorable macroeconomic factors such as a higher discount rate and lower peer valuation multiples compared to the fourth quarter of 2024. These charges resulted in a net loss of $134.6 million and basic EPS loss of $6.22 for the fourth quarter. On an adjusted basis, fourth quarter net income and basic EPS were $13.7 million and $0.63 per share, respectively.

The effective tax rate for the fourth quarter 2025 was 1.3%, compared with (31.5)% in the year-ago period. On an adjusted basis, the effective tax rate for fourth quarter 2025 was 21.7%, compared to 24.0% in the year-ago period.

For the full-year 2025, consolidated sales declined by 24% compared to full-year 2024 to $536.4 million, primarily due to the anticipated decline in Distilling Solutions segment sales. Full-year gross profit declined by 30% to $199.4 million, and gross margin decreased by 350 basis points to 37.2% driven primarily by lower brown goods volumes, the impact from the outage of a key piece of equipment, and higher waste starch disposal costs at the company's ingredients plant. Full-year SG&A expense increased 4% to $84.8 million and adjusted SG&A expense increased 7% to $80.7 million, as the company's productivity initiatives were largely offset by the reinstatement of incentive compensation. Full-year operating income decreased to a loss of $94.6 million, while adjusted operating income and adjusted EBITDA decreased 49% and 41% to $87.6 million and $116.0 million, respectively. Full-year net income and basic EPS declined to a loss of $107.8 million and $4.99, respectively, due to a discrete non-cash impairment to goodwill and indefinite-lived intangible assets and lower operating results. On an adjusted basis, net income and basic EPS declined 51% and 49% to $61.5 million and $2.85, respectively.

Despite lower net income, full-year 2025 cash flow from operations increased to $121.5 million due to a heightened focus on managing working capital, including barrel inventory. Separately, net whiskey put-away declined from $32.9 million in 2024 to $18.5 million in 2025, and capital expenditures declined by 56% to $31.9 million.

Branded Spirits

Fourth quarter 2025 Branded Spirits segment sales decreased 1% to $63.4 million compared to the prior-year period as the continued momentum in the premium plus portfolio was offset by weaker sales of mid and value priced brands. Led by Penelope Bourbon, premium plus brands posted their strongest quarterly growth of the year with 10% sales growth during the quarter. As expected, sales of mid and value priced brands, combined, decreased by double digits, consistent with the full-year trend, primarily due to lower volumes of certain tequila, liqueurs, and cordial brands. Branded Spirits gross profit decreased by 2% to $28.9 million while gross margin declined by 60 basis points to 45.6%.

For the full-year 2025, Branded Spirits sales decreased 3% to $232.9 million compared to the prior-year period. Premium plus sales increased by 5%, while sales of the mid and value priced portfolio, combined, declined by 13% as the company continued to optimize its offerings in these price tiers. Full-year gross profit decreased by 2% to $115.3 million, while gross margin improved by 40 basis points to 49.5%, benefiting from the ongoing premiumization of the Branded Spirits portfolio.

Distilling Solutions

Distilling Solutions segment sales for the fourth quarter 2025 decreased 47% from the prior-year period to $43.6 million and gross profit decreased by 54% to $16.9 million, or 38.8% of segment sales. In-line with the 2025 trend, lower demand for both aged and new distillate whiskey pressured segment results, driving a 53% decline in brown goods sales for the fourth quarter.

For the full-year 2025, Distilling Solutions segment sales decreased 45% compared to the prior-year period to $181.4 million and gross profit decreased by 52% to $68.6 million. Full-year brown goods sales declined by 52% as the company proactively renegotiated contracts and many large customers paused purchases, including to balance their whiskey inventories and manage their working capital. Sales of warehouse services and white goods and other co-products declined by 3% and 38%, respectively, for the full year.

Ingredient Solutions

Fourth quarter 2025 Ingredient Solutions segment sales decreased by 10% as compared to the prior-year period to $31.3 million, as the impact of the failure of a key piece of equipment persisted and remained an operational headwind into the fourth quarter. As a result, specialty fiber and specialty protein sales declined by 8% and 14%, respectively, along with lower commodity starch sales during the quarter. The issue was resolved and the equipment returned to service in November 2025. On the other hand, textured protein sales benefitted from the commercialization of a new large multinational customer and biofuel sales continue to increase. Fourth quarter gross margin declined by 70% to $2.4 million due to higher waste starch stream disposal costs, lower volumes, and operational inefficiencies tied to the failure of a key piece of equipment.

For the full-year 2025, Ingredient Solutions segment sales decreased 7% year over year to $122.0 million, while gross profit declined by 41% to $15.5 million due to a significant weather impact in the first quarter, and a number of transitory headwinds, including the impact of the failure of a key equipment in the second half of the year and high waste starch stream disposal costs.

2026 Financial Guidance

The consolidated financial guidance for 2026 includes:

Conference Call and Webcast Information

MGP Ingredients will host a conference call today, February 25, 2026, at 10 a.m. ET to discuss these results and current business trends. Investors can dial 844-308-6398 or 412-717-9605 (international) to listen to the live call. A live webcast will be available at the “News and Events” section of the company’s Investor Relations website at ir.mgpingredients.com/news-events. A replay of the conference call will be available on the company’s website.

About MGP Ingredients, Inc.

MGP Ingredients Inc. (Nasdaq: MGPI) has been formulating excellence since 1941 by bringing product ideas to life across the alcoholic beverage and specialty ingredient industries through three segments: Branded Spirits, Distilling Solutions, and Ingredient Solutions. MGPI is one of the leading spirits distillers with an award-winning portfolio of premium brands including Penelope, Rebel, Remus, and Yellowstone bourbons and El Mayor tequila, under the Luxco umbrella. With distilleries in Indiana and Kentucky; a tequila distillery in Arandas, Mexico; and bottling operations in Missouri, Ohio, and Northern Ireland, the company creates distilled spirits for customers including many world-renowned spirits brands. In addition, the company’s high-quality specialty fiber, protein, and starch ingredients provide functional, nutritional, and sensory solutions for a wide range of food products. To learn more visit MGPIngredients.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about pressure on the brown goods business of MGP Ingredients, Inc. (the “Company” or “MGP”); operational reliability; premium plus momentum; productivity and cost discipline; ability to deliver growth, be better aligned, be more resilient, and be well positioned for value creation; and the Company’s 2026 outlook, including its expectations for sales, adjusted EBITDA, adjusted basic EPS, shares outstanding, tax rate, and capital expenditures. Forward-looking statements are usually identified by or are associated with words such as “intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,” “project,” “forecast,” “hopeful,” “should,” “may,” “will,” “could,” “encouraged,” “opportunities,” “potential,” and similar terminology. These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, Company financial results, and Company financial condition and are not guarantees of future performance.

All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially from our expectations include without limitation any effects of changes in consumer preferences and purchases and our ability to anticipate or react to those changes; our ability to compete effectively and any effects of industry dynamics and market conditions; unfavorable economic conditions; damage to our reputation or that of any of our key customers or their brands; failure to introduce successful new brands and products or have effective marketing or advertising; changes in public opinion about alcohol or our products; our reliance on our distributors to distribute our branded spirits; our reliance on fewer, more profitable customer relationships; interruptions in our operations or a catastrophic event at our facilities; decisions concerning the quantity of maturing stock of our aged distillate; any inability to successfully complete our capital projects or fund capital expenditures or any warehouse expansion issues; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; regulation and taxation and compliance with existing or future laws and regulations; tariffs, trade relations, and trade policies; excise taxes, incentives and customs duties; our ability to protect our intellectual property rights and defend against alleged intellectual property rights infringement claims; failure to secure and maintain listings in control states; labeling or warning requirements or limitations on the availability of our products; product recalls or other product liability claims; anti-corruption laws, trade sanctions, and restrictions; litigation or legal proceedings; limited rights of common stockholders and anti-takeover provisions in our governing documents; the impact of issuing shares of our common stock; higher costs or the unavailability and cost of raw materials, product ingredients, energy resources, or labor; failure of our information technology systems, networks, processes, associated sites, or service providers; inability to successfully implement our strategies; interest rate increases; reliance on key personnel; impairment charges; commercial, political, and financial risks; covenants and other provisions in our credit arrangements; pandemics or other health crises; ability to pay any dividends and make any share repurchases. For further information on these risks and uncertainties and other factors that could affect the Company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as well as the Company’s other SEC filings. The Company undertakes no obligation to update any forward-looking statements or information in this press release, except as required by law.

Non-GAAP Financial Measures

In addition to reporting financial information in accordance with U.S. GAAP, the Company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, GAAP. In addition to the comparable GAAP measures, the Company has disclosed adjusted selling, general, and administrative expenses (“SG&A”), adjusted operating income, adjusted income before income taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA, net debt, net debt leverage ratio, adjusted basic and diluted EPS, adjusted effective tax rate, as well as guidance for adjusted EBITDA and adjusted basic EPS. The presentation of these non-GAAP financial measures should be reviewed in conjunction with SG&A, operating income, income before income taxes, net income, net income used in earnings per common share calculation, debt, basic and diluted EPS, and effective tax rate computed in accordance with U.S. GAAP and should not be considered a substitute for the GAAP measure. We believe that the non-GAAP measures provide useful information to investors regarding the Company's performance and overall results of operations. In addition, management uses these non-GAAP measures in conjunction with GAAP measures when evaluating the Company’s operating results compared to prior periods on a consistent basis, assessing financial trends, and for forecasting purposes. Non-GAAP financial measures may not provide information that is directly comparable to other companies, even if similar terms are used to identify such measures. The attached schedules provide a full reconciliation of historical non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. Full year 2026 guidance measures of adjusted EBITDA and adjusted basic EPS are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include without limitation, acquisition related expenses, restructuring and related expenses, and other items not reflective of the Company's ongoing operations.

MGP INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Dollars in thousands, except share and per share amounts)

Quarter Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Sales

138,316

180,796

536,375

703,625

Cost of sales

90,057

106,321

336,966

417,308

Gross profit

48,259

74,475

199,409

286,317

Advertising and promotion expenses

9,307

10,513

31,083

40,508

Selling, general, and administrative expenses

21,532

20,449

84,819

81,391

Impairment of long-lived assets and other

—

137

Goodwill and indefinite-lived intangible asset impairment

152,622

73,755

152,622

73,755

Change in fair value of contingent consideration

—

200

25,500

16,100

Operating income (loss)

(135,202

)

(30,442

)

(94,615

)

74,426

Interest expense, net

(1,554

)

(2,041

)

(7,044

)

(8,439

)

Other income, net

352

538

1,309

2,455

Income (loss) before income taxes

(136,404

)

(31,945

)

(100,350

)

68,442

Income tax expense (benefit)

(1,773

)

10,053

7,482

33,977

Net income (loss)

(134,631

)

(41,998

)

(107,832

)

34,465

Net loss (income) attributable to noncontrolling interest

)

198

Net income (loss) attributable to MGP Ingredients, Inc.

(134,633

)

(41,962

)

(107,809

)

34,663

Income (loss) attributable to participating securities

1,638

466

1,295

(373

)

Net income (loss) used in earnings per share calculation

(132,995

)

(41,496

)

(106,514

)

34,290

Weighted average common shares

Basic

21,374,904

21,732,872

21,363,047

22,015,439

Diluted

21,374,904

21,732,872

21,363,047

22,015,439

Earnings per common share

Basic

(6.22

)

(1.91

)

(4.99

)

1.56

Diluted

(6.22

)

(1.91

)

(4.99

)

1.56

MGP INGREDIENTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

December 31,

2025

2024

ASSETS

Current Assets:

Cash and cash equivalents

18,460

25,273

Receivables, net

116,160

148,488

Inventory

382,741

364,944

Prepaid expenses

2,139

3,983

Refundable income taxes

3,209

3,448

Total current assets

522,709

546,136

Property, plant, and equipment

594,898

562,714

Less accumulated depreciation and amortization

(266,911

)

(246,042

)

Property, plant, and equipment, net

327,987

316,672

Operating lease right-of-use assets, net

13,847

15,540

Investment in joint venture

8,211

7,024

Intangible assets, net

244,696

268,451

Goodwill

115,667

247,789

Other assets

2,747

4,173

TOTAL ASSETS

1,235,864

1,405,785

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Current maturities of long-term debt

6,400

Accounts payable

54,589

66,336

Contingent consideration

110,800

—

Federal and state excise taxes payable

5,755

5,358

Accrued expenses and other

22,507

14,356

Total current liabilities

200,051

92,450

Long-term debt, less current maturities

49,735

121,277

Convertible senior notes

196,183

195,864

Long-term operating lease liabilities

10,561

11,940

Contingent consideration

—

85,300

Other noncurrent liabilities

2,534

2,981

Deferred income taxes

60,010

63,430

Total liabilities

519,074

573,242

Total equity

716,790

832,543

TOTAL LIABILITIES AND TOTAL EQUITY

1,235,864

1,405,785

MGP INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Year Ended December 31,

2025

2024

Cash Flows from Operating Activities

Net income (loss)

(107,832

)

34,465

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

24,086

21,989

Impairment of long-lived assets and other

—

137

Goodwill and indefinite-lived intangible asset impairment

152,622

73,755

Share-based compensation

4,704

4,016

Equity method investment gain

(1,187

)

(1,827

)

Deferred income taxes, including change in valuation allowance

(3,420

)

359

Change in fair value of contingent consideration

25,500

16,100

Other, net

831

465

Changes in operating assets and liabilities:

Receivables, net

32,189

(4,375

)

Inventory

(18,145

)

(18,155

)

Prepaid expenses

1,831

(409

)

Income taxes payable (refundable)

239

(2,258

)

Accounts payable

1,619

(9,099

)

Accrued expenses and other

8,424

(15,111

)

Federal and state excise taxes payable

397

3,107

Other, net

(330

)

(881

)

Net cash provided by operating activities

121,528

102,278

Cash Flows from Investing Activities

Additions to property, plant, and equipment

(45,488

)

(71,181

)

Other, net

(37

)

(377

)

Net cash used in investing activities

(45,525

)

(71,558

)

Cash Flows from Financing Activities

Payment of dividends and dividend equivalents

(10,325

)

(10,630

)

Repurchase of Common Stock

(1,035

)

(48,773

)

Loan fees paid related to borrowings

(2,762

)

—

Proceeds from long-term debt

28,000

125,000

Principal payments on long-term debt

(97,400

)

(89,400

)

Net cash used in financing activities

(83,522

)

(23,803

)

Effect of exchange rate changes on cash and cash equivalents

706

(32

)

Increase (decrease) in cash and cash equivalents

(6,813

)

6,885

Cash and cash equivalents, beginning of period

25,273

18,388

Cash and cash equivalents, end of period

18,460

25,273

MGP INGREDIENTS, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO ADJUSTED NON-GAAP MEASURES

(UNAUDITED) (in thousands)

Quarter Ended December 31, 2025

SG&A

Operating Income (loss)

Income (loss) before Income Taxes

Net Income (loss) (b)

MGP Earnings (a)

Basic and Diluted EPS

Reported GAAP Results

21,532

(135,202

)

(136,404

)

(134,631

)

(132,995

)

(6.22

)

Goodwill and indefinite-lived intangible asset impairment (c)

—

152,622

147,374

145,562

6.81

Executive transition costs (d)

(953

)

953

709

700

0.03

Professional service fees (e)

(113

)

113

—

Restructuring and other costs (f)

(190

)

190

141

140

0.01

Adjusted Non-GAAP results

20,276

18,676

17,474

13,677

13,490

0.63

Quarter Ended December 31, 2024

SG&A

Operating Income (loss)

Income (loss) before Income Taxes

Net Income (loss)

MGP Earnings (a)

Basic and Diluted EPS

Reported GAAP Results

20,449

(30,442

)

(31,945

)

(41,998

)

(41,496

)

(1.91

)

Goodwill impairment (c)

—

73,755

72,943

3.36

Fair value of contingent consideration (g)

—

200

152

150

0.01

Business acquisition costs (h)

(15

)

—

Executive transition costs (d)

(2,857

)

2,857

2,171

2,145

0.10

Unusual items costs (i)

(408

)

408

310

306

0.01

Adjusted Non-GAAP results

17,169

46,793

45,290

34,401

34,059

1.57

Year Ended December 31, 2025

SG&A

Operating Income (loss)

Income (loss) before Income Taxes

Net Income (loss) (b)

MGP Earnings (a)

Basic and Diluted EPS

Reported GAAP Results

84,819

(94,615

)

(100,350

)

(107,832

)

(106,514

)

(4.99

)

Goodwill and indefinite-lived intangible asset impairment (c)

—

152,622

147,374

145,562

6.81

Fair value of contingent consideration (g)

—

25,500

18,972

18,739

0.88

Executive transition costs (d)

(2,778

)

2,778

2,067

2,041

0.10

Professional service fees (e)

(495

)

495

368

364

0.02

Restructuring and other costs (f)

(803

)

803

597

590

0.03

Adjusted Non-GAAP results

80,743

87,583

81,848

61,546

60,782

2.85

Year Ended December 31, 2024

SG&A

Operating Income

Income before Income Taxes

Net Income

MGP Earnings (a)

Basic and Diluted EPS

Reported GAAP Results

81,391

74,426

68,442

34,465

34,290

1.56

Goodwill impairment (c)

—

73,755

72,950

3.31

Impairment of long-lived assets and other (j)

—

137

104

103

0.01

Fair value of contingent consideration (g)

—

16,100

12,252

12,118

0.55

Business acquisition costs (h)

(116

)

116

—

Executive transition costs (d)

(4,075

)

4,075

3,101

3,067

0.14

Unusual items costs (i)

(2,081

)

2,081

1,584

1,566

0.07

Adjusted Non-GAAP results

75,119

170,690

164,706

125,349

124,181

5.64

(a)

MGP Earnings has been defined as "Net income (loss) used in earnings per share calculation," which accounts for the impacts of the net loss (income) attributable to noncontrolling interest and income (loss) attributable to participating securities.

(b)

Excluding the impacts of the non-GAAP items, the effective tax rate was 21.7% and 24.8% for the quarter and year ended December 31, 2025, respectively.

(c)

Goodwill and indefinite-lived intangible asset impairment relates to the write down of goodwill and indefinite-lived intangible assets during the quarter and year ended December 31, 2025. Goodwill impairment relates to the write down of the goodwill during the quarter and year ended December 31, 2024. The goodwill impairment is nondeductible for income tax purposes. It is included in the Consolidated Statement of Income (Loss) as a component of operating income and relates to the Branded Spirits segment.

(d)

The executive transition costs are included in the Consolidated Statement of Income (Loss) within the selling, general and administrative line item. The adjustment includes costs related to the transition of certain executive positions.

(e)

The professional services fees are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item. The adjustment includes costs related to professional services in conjunction with the goodwill impairment valuation.

(f)

The restructuring and other costs are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item. The adjustment includes special one-time severance costs related to the reduction in force that occurred during 2025.

(g)

Fair value of contingent consideration relates to the quarterly adjustment of the contingent consideration liability related to the acquisition of Penelope Bourbon LLC. It is included in the Consolidated Statement of Income (Loss) as a component of operating income and relates to the Branded Spirits segment.

(h)

Business acquisition costs are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item and include transaction and integration costs associated with the acquisition of Penelope Bourbon LLC.

(i)

The unusual items costs are included in the Consolidated Statement of Income (Loss) within the selling, general, and administrative line item. The adjustment includes professional and legal costs associated with special projects.

(j)

The impairment of long-lived assets and other relates to the closure of the Company's distillery located in Atchison, Kansas. For the year ended December 31, 2024, the full expense amount relates to miscellaneous expenses. Impairment of long-lived assets and other are included in the Consolidated Statement of Income (Loss) as a component of operating income and relates to the Distilling Solutions segment.

MGP INGREDIENTS, INC.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA AND NET DEBT LEVERAGE RATIO

(UNAUDITED) (in thousands)

Quarter Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Net Income (loss)

(134,631

)

(41,998

)

(107,832

)

34,465

Interest expense

1,554

2,041

7,044

8,439

Income tax expense (benefit)

(1,773

)

10,053

7,482

33,977

Depreciation and amortization

6,262

5,691

24,086

21,989

Share based compensation (a)

1,129

440

4,216

3,188

Equity method investment gain

(318

)

(381

)

(1,187

)

(1,827

)

Goodwill and indefinite-lived intangible asset impairment

152,622

73,755

152,622

73,755

Executive transition costs

953

2,857

2,778

4,075

Professional service fees

113

—

495

—

Restructuring and other costs

190

—

803

—

Fair value of contingent consideration

—

200

25,500

16,100

Business acquisition costs

—

116

Unusual items costs

—

408

—

2,081

Impairment of long-lived assets and other

—

137

Adjusted EBITDA

26,101

53,081

116,007

196,495

Total debt

252,318

323,541

Cash and cash equivalents

18,460

25,273

Net debt

233,858

298,268

Net debt leverage ratio (b)

2.0

1.5

(a)

This amount excludes share based compensation related to executive transition costs

(b)

Net leverage ratio defined as net debt divided by adjusted EBITDA

The non-GAAP adjusted EBITDA measure is defined as earnings before interest expense, income tax expense (benefit), depreciation and amortization, share based compensation, equity method investment gain, goodwill and indefinite-lived intangible asset impairment, executive transition costs, professional service fees, restructuring and other costs, fair value of contingent consideration, business acquisition costs, unusual items costs and impairment of long-lived assets and other.

See "Reconciliation of selected GAAP measures to adjusted non-GAAP measures" and "Description of Non-GAAP items" for further details.

MGP INGREDIENTS, INC.

OPERATING SEGMENT RESULTS

(Dollars in thousands)

BRANDED SPIRITS

Quarter Ended December 31,

Quarter versus Quarter Sales Change Increase/(Decrease)

2025

2024

$ Change

% Change

Premium plus

31,194

28,292

2,902

Mid

16,131

16,844

(713

)

Value

8,159

10,402

(2,243

)

(22

)

Other

7,962

8,467

(505

)

Total Branded Spirits Sales

63,446

64,005

(559

)

Gross profit

28,918

29,585

(667

)

Gross margin %

45.6

46.2

(0.6

)

Operating loss

(142,022

)

(63,814

)

(78,208

)

123

Depreciation and amortization

2,165

2,168

)

—

DISTILLING SOLUTIONS

Quarter Ended December 31,

Quarter versus Quarter Sales Change Increase/(Decrease)

2025

2024

$ Change

% Change

Brown goods

31,225

66,989

(35,764

)

(53

Warehouse services

8,258

8,818

(560

)

White goods and other co-products

4,093

6,238

(2,145

)

(34

)

Total Distilling Solutions Sales

43,576

82,045

(38,469

)

(47

Gross profit

16,910

36,727

(19,817

)

(54

Gross margin %

38.8

44.8

(6.0

)

Operating income

16,152

35,240

(19,088

)

(54

Depreciation and amortization

2,056

1,993

INGREDIENT SOLUTIONS

Quarter Ended December 31,

Quarter versus Quarter Sales Change Increase/(Decrease)

2025

2024

$ Change

% Change

Specialty wheat starches

16,832

18,359

(1,527

)

Specialty wheat proteins

11,050

12,821

(1,771

)

(14

)

Commodity wheat starches

2,274

3,505

(1,231

)

(35

)

Commodity wheat proteins

726

665

1,090

Biofuel and other

412

—

412

n/a

Total Ingredient Solutions Sales

31,294

34,746

(3,452

)

(10

Gross profit

2,431

8,163

(5,732

)

(70

Gross margin %

7.8

23.5

(16

)

Operating income

1,407

6,751

(5,344

)

(79

Depreciation and amortization

1,686

1,194

492

MGP INGREDIENTS, INC.

OPERATING SEGMENT RESULTS

(Dollars in thousands)

BRANDED SPIRITS

Year Ended December 31,

Year versus Year Sales Change Increase/(Decrease)

2025

2024

$ Change

% Change

Premium Plus

116,730

110,991

5,739

Mid

59,486

63,454

(3,968

)

Value

32,606

42,100

(9,494

)

(23

)

Other

24,119

24,271

(152

)

Total Branded Spirits Sales

232,941

240,816

(7,875

)

Gross profit

115,320

118,196

(2,876

)

Gross margin %

49.5

49.1

0.4

Operating loss

(127,680

)

(48,279

)

(79,401

)

164

Depreciation and amortization

8,607

8,035

572

DISTILLING SOLUTIONS

Year Ended December 31,

Year versus Year Sales Change Increase/(Decrease)

2025

2024

$ Change

% Change

Brown goods

128,450

265,873

(137,423

)

(52

Warehouse services

32,388

33,430

(1,042

)

White goods and other co-products

20,562

32,901

(12,339

)

(38

)

Total Distilling Solutions Sales

181,400

332,204

(150,804

)

(45

Gross profit

68,602

141,927

(73,325

)

(52

Gross margin %

37.8

42.7

(4.9

)

Operating income

65,079

137,468

(72,389

)

(53

Depreciation and amortization

8,177

7,893

284

INGREDIENT SOLUTIONS

Year Ended December 31,

Year versus Year Sales Change Increase/(Decrease)

2025

2024

$ Change

% Change

Specialty wheat starches

68,124

76,005

(7,881

)

(10

Specialty wheat proteins

39,915

41,768

(1,853

)

Commodity wheat starches

10,371

12,351

(1,980

)

(16

)

Commodity wheat proteins

3,109

481

2,628

546

Biofuel and other

515

—

515

n/a

Total Ingredient Solutions Sales

122,034

130,605

(8,571

)

Gross profit

15,487

26,194

(10,707

)

(41

Gross margin %

12.7

20.1

(7.4

)

Operating income

10,514

20,531

(10,017

)

(49

Depreciation and amortization

5,899

4,711

1,188

MGP INGREDIENTS, INC.

DILUTIVE SHARES OUTSTANDING CALCULATION

(UNAUDITED)

Quarter Ended December 31,

Year Ended December 31,

2025

2024

2025

2024

Principal amount of the bonds

201,250,000

Par value

1,000

Number of bonds outstanding (b)

201,250

Initial conversion rate

10.3911

Conversion price

96.23620

Average share price (c)

24.37111

54.41547

29.08195

75.30083

Impact of conversion (d)

—

Cash paid for principal

(201,250,000

)

(201,250,000

)

(201,250,000

)

(201,250,000

)

Conversion premium

—

Average share price

24.37111

54.41547

29.08195

75.30083

Conversion premium in shares (a) (e)

—

(a)

Number of bonds outstanding is calculated by taking the principal amount of the bonds divided by the par value.

(b)

Average share price is calculated by taking the average of the daily closing share price for the period. If the average share price is less than the conversion price of $96.23620 per share, the impact to EPS is anti-dilutive and therefore the shares were excluded from the diluted EPS calculation.

(c)

Impact of conversion is calculated by taking the number of bonds outstanding multiplied by the initial conversion rate multiplied by the average share price. If the average share price is less than the conversion price then the impact of conversion is zero.

(d)

The impacts of the Convertible Senior Notes were included in the diluted weighted average common shares outstanding if the impact was dilutive. The Convertible Senior Notes would only have a dilutive impact if the average market price per share during the quarter and year to date period exceeds the conversion price of $96.23620 per share.

(e)

Conversion premium in shares is calculated by taking the conversion premium divided by the average share price. If the average share price is less than the conversion price, then the conversion premium in shares is zero.