XNAS:MGPI MGP Ingredients Inc Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

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f10q_051012.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 10-Q
 
(Mark One)
 
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2012
 
or
 
[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _________________________ to _________________________________
 
Commission File Number:  0-17196
 
MGP INGREDIENTS, INC.
(Exact name of registrant as specified in its charter)
 
KANSAS
45-4082531
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

100 Commercial Street, Atchison Kansas
66002
(Address of principal executive offices)
(Zip Code)
 
(913) 367-1480
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [X] Yes [  ] No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X ] Yes [  ] No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definition of  “large accelerated filer”, “accelerated filer and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check One) 
 
[  ] Large accelerated filer                                                     [ X] Accelerated filer
[  ]  Non-accelerated filer                                                      [  ] Smaller Reporting Company
 
Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [  ]Yes [ X ] No
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Common stock, no par value
18,115,965 shares outstanding
as of May 3, 2012
 
 
 

 
INDEX
 
 
PART I.  FINANCIAL INFORMATION
Page
   
 
     
 
 
 
 
 
     
   
PART II.  OTHER INFORMATION
 
   
 
 
 
2

 
FORWARD-LOOKING STATEMENTS
 
This report contains forward-looking statements as well as historical information.  All statements, other than statements of historical facts, included in this Quarterly Report on Form 10-Q regarding the prospects of our industry and our prospects, plans, financial position and business strategy may constitute forward-looking statements.  In addition, forward-looking statements are usually identified by or are associated with such words as “intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,” “hopeful,” “should,” “may,” “will,” “could,” “encouraged,” “opportunities,” “potential” and/or the negatives of these terms or variations of them or similar terminology.  They reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results and are not guarantees of future performance.  All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement.  Investors should not place undue reliance upon forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.  Important factors that could cause actual results to differ materially from our expectations include, among others: (i) disruptions in operations at our Atchison facility or Indiana distillery,  (ii) the availability and cost of grain and fluctuations in energy costs, (iii) the effectiveness of our hedging strategy, (iv) our ability to integrate the acquired operations of Lawrenceburg Distillers Indiana, LLC into our own, (v) the competitive environment and related market conditions, (vi) the ability to effectively pass raw material price increases on to customers, (vii) the profitability of the Illinois Corn Processing, LLC (“ICP”) joint venture, (viii) our ability to maintain compliance with all applicable loan agreement covenants, (ix) our ability to realize operating efficiencies, (x) actions of governments, and (xi) consumer tastes and preferences.  For further information on these and other risks and uncertainties that may affect our business, see Item 1A. Risk Factors of our Annual Report on Form 10-K for the six month transition period ended December 31, 2011, as updated by Item 1A. Risk Factors of this Quarterly Report on Form 10-Q.

 
METHOD OF PRESENTATION
 
All amounts in this quarterly report, except for shares, units, bushels, gallons, pounds, mmbtu, per share, per bushel and per gallon amounts, are shown in thousands.
 
 
3

 
PART I. FINANCIAL INFORMATION
 

ITEM 1. FINANCIAL STATEMENTS

MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
(Dollars in thousands, except per-share amounts)

   
Quarter ended
 
   
March 31,
   
March 31,
 
   
2012
   
2011
 
             
Sales
  $ 88,430     $ 64,211  
     Less:  excise taxes
    2,086       23  
Net sales
    86,344       64,188  
Cost of sales (a)
    80,765       57,669  
Gross profit
    5,579       6,519  
                 
Selling, general and administrative expenses
    7,748       5,690  
Other operating costs
    74       -  
Income (loss) from operations
    (2,243 )     829  
                 
Gain on sale of joint venture interest
    4,055       -  
Other income, net
    2       3  
Interest expense
    (255 )     (92 )
Equity in earnings of joint ventures
    437       124  
Income before income taxes
    1,996       864  
                 
Provision for income taxes
    120       163  
Net income
    1,876       701  
                 
Other comprehensive income, net of tax
    173       17  
Comprehensive income
  $ 2,049     $ 718  
                 
Per share data
               
Total basic earnings per common share
  $ 0.10     $ 0.04  
Total diluted earnings per common share
  $ 0.10     $ 0.04  
                 
Dividends per common share
  $ 0.05     $ -  

(a)  
Includes related party purchases of $16,226 and $16,319 for the quarters ended March 31, 2012 and 2011, respectively.
 
See accompanying notes to unaudited condensed consolidated financial statements
 
 
4

 
       MGP INGREDIENTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in thousands)

   
March 31,
2012
   
December 31,
2011
 
       
             
Current Assets
           
  Cash and cash equivalents
  $ -     $ 383  
  Restricted cash
    6,151       7,605  
  Receivables (less allowance for doubtful accounts: March 31, 2012 - $12; December 31, 2011 - $63)
    35,788       27,804  
  Inventory
    34,318       31,082  
  Prepaid expenses
    1,367       958  
  Derivative assets
    -       1,304  
  Deferred income taxes
    6,802       6,056  
  Refundable income taxes
    446       566  
  Assets held for sale
    -       2,300  
Total current assets
    84,872       78,058  
                 
Property and equipment
    186,036       185,386  
  Less accumulated depreciation and amortization
    (111,143 )     (108,307 )
Property and equipment, net
    74,893       77,079  
                 
Investment in joint ventures
    8,049       12,147  
Other assets
    1,774       1,873  
Total assets
  $ 169,588     $ 169,157  
                 
Current Liabilities
               
  Current maturities of long-term debt
  $ 1,684     $ 1,670  
  Revolving credit facility
    21,792       21,142  
  Accounts payable
    20,970       22,704  
  Accounts payable to affiliate, net
    4,787       6,167  
  Accrued expenses
    5,841       4,023  
  Derivative liabilities
    3,165       3,465  
Total current liabilities
    58,239       59,171  
                 
Long-term debt, less current maturities
    6,425       6,852  
Deferred credit
    4,045       4,195  
Accrued retirement health and life insurance benefits
    6,415       6,309  
Other non current liabilities
    1,744       2,144  
Deferred income taxes
    6,802       6,056  
Total liabilities
    83,670       84,727  
       

XNAS:MGPI MGP Ingredients Inc Quarterly Report 10-Q Filling

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