MGP Ingredients reports 2021 net profit of $90.6 million, or $4.37 a share, up from $40.08 million, or $2.37 a share, as sales rose to $626.72 million for $395.52 million.
“Our record performance this year demonstrated the strength of our business model and the value each of our segments bring to our global customer base and was bolstered by the synergistic effects of the Luxco acquisition,” said David Colo, president/CEO. “New distillate and aged whiskey sales experienced another solid year which drove a 28.4% increase in premium beverage alcohol sales for the year. Specialty ingredients sales posted strong double-digit growth this year, resulting in a 16.1% increase in segment sales, and represents another record year for our Ingredient Solutions segment.”
Distillery Products Segment
For the fourth quarter of 2021, Distillery Products segment sales increased 3.3% to $82.5 million, reflecting a 1.8% increase in sales of premium beverage alcohol, primarily due to higher new distillate American Whiskey and white goods sales. Gross profit increased to $26.9 million, or 32.6% of segment sales, compared to $26.0 million, or 32.5% of segment sales in the fourth quarter 2020.
For the full year 2021, Distillery Products segment sales increased 12.5% to $352.5 million, primarily due to higher aged whiskey and new distillate sales. Gross profit increased to $114.1 million, or 32.4% of segment sales, compared to $75.8 million, or 24.2% of segment sales in 2020.
“Strong consumer demand for our American Whiskey products continues to drive meaningful sales for premium beverage alcohol,” said Colo. “Our impressive gross profit results highlight the long-term value of our aging whiskey inventory and is augmented by our ability to create new relationships and develop partnerships with existing customers. We remain focused on being proactive to attract additional aged whiskey and new distillate customers across each customer type.”
Branded Spirits Segment
In the fourth quarter of 2021, sales for the Branded Spirits segment totaled $61.0 million, primarily due to the Luxco acquisition. Gross profit increased to $20.9 million, or 34.3% of segment sales.
For the full year 2021, Branded Spirits segment sales totaled $183.6 million. Gross profit increased to $62.6 million, or 34.1% of segment sales. Excluding the non-recurring impact of a purchase accounting adjustment related to the Luxco acquisition, gross margin totaled 35.5% for the year.
“Our strong Branded Spirits segment results for the quarter and year continued to benefit from the accelerated Luxco integration efforts by the organization,” commented Colo. “Growth in our American Whiskey and Tequila offerings contributed to the solid results for the quarter and year. We believe consumer demand for our expansive family of brands and spirits will continue to position us well for incremental growth.”
Ingredient Solutions Segment
For the fourth quarter of 2021, Ingredient Solutions segment sales increased 15.2% to $23.4 million. Gross profit totaled to $5.0 million, representing 21.2% of segment sales, compared to $5.3 million, or 26.3% of segment sales in the fourth quarter 2020.
For the full year 2021, Ingredient Solutions segment sales increased 16.1% to $90.7 million, driven by higher sales of specialty wheat starches and specialty wheat proteins. Gross profit increased to $22.2 million, or 24.5% of segment sales, compared to $20.8 million, or 26.7% of segment sales in the prior year period.
“Ingredient Solutions again finished the year with great momentum, as our specialty wheat starches and proteins business lines contributed to another strong quarter,” Colo continued. “We remain pleased with our diverse customer base and ability to further optimize the product mix and channels to drive additional profitability.”
2022 Outlook
MGP projects fiscal 2022 sales to be in the range of $690 million to $715 million and adjusted EBITDA in the range of $150 million to $157 million.
“We are very pleased with the momentum we ended the fiscal year on and believe we are well positioned to execute and deliver against our long-term growth strategy in fiscal 2022,” Colo said. “As a result of the continued demand we have been experiencing in each of our three business segments, we recently announced expansionary projects totaling approximately $33 million over the next two years. We are committed to leveraging the strong foundation we’ve established over the years to position MGP for sustainable long-term growth.”