Document And Entity Information
Document And Entity Information - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jul. 27, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | MGP INGREDIENTS INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 16,715,939 | |
Amendment Flag | false | |
Entity Central Index Key | 835,011 | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Income Statement [Abstract] | |||||
Sales | $ 87,892 | $ 82,174 | $ 179,237 | $ 159,365 | |
Less: excise taxes | 2,139 | 1,782 | 6,315 | 2,138 | |
Net sales | 85,753 | 80,392 | 172,922 | 157,227 | |
Cost of sales | [1] | 66,928 | 64,861 | 135,056 | 124,650 |
Gross profit | 18,825 | 15,531 | 37,866 | 32,577 | |
Selling, general and administrative expenses | 8,311 | 6,404 | 15,960 | 12,725 | |
Operating income | 10,514 | 9,127 | 21,906 | 19,852 | |
Equity method investment earnings (loss) | (819) | 1,079 | (348) | 1,596 | |
Interest expense, net | (379) | (328) | (710) | (639) | |
Income before income taxes | 9,316 | 9,878 | 20,848 | 20,809 | |
Income tax expense | 2,947 | 3,570 | 5,801 | 7,442 | |
Net income | 6,369 | 6,308 | 15,047 | 13,367 | |
Income attributable to participating securities | 183 | 240 | 433 | 506 | |
Net income attributable to common shareholders and used in EPS calculation | $ 6,186 | $ 6,068 | $ 14,614 | $ 12,861 | |
Share information: | |||||
Diluted weighted average common shares (in shares) | 16,745,679 | 16,617,857 | 16,727,305 | 16,612,416 | |
Basic and diluted earnings per common share (in usd per share) | $ 0.37 | $ 0.37 | $ 0.87 | $ 0.77 | |
Dividends and dividend equivalents per common share (in usd per share) | $ 0.04 | $ 0 | $ 0.08 | $ 0.08 | |
[1] | Includes related party purchases of $9,180 and $6,698 for the quarters ended June 30, 2017 and 2016, respectively. Includes related party purchases of $18,425 and $12,939 for the year to date periods ended June 30, 2017 and 2016, respectively. |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Income (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Cost of sales, related party transactions | $ 9,180 | $ 6,698 | $ 18,425 | $ 12,939 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,369 | $ 6,308 | $ 15,047 | $ 13,367 |
Other comprehensive loss, net of tax: | ||||
Company sponsored benefit plans: | (38) | (18) | (77) | (35) |
Change in equity method investments | (2) | (3) | (4) | (3) |
Other comprehensive loss | (40) | (21) | (81) | (38) |
Comprehensive income | $ 6,329 | $ 6,287 | $ 14,966 | $ 13,329 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 7,911 | $ 1,569 |
Receivables (less allowance for doubtful accounts: June 30, 2017 - $24; December 31, 2016 - $24) | 34,930 | 26,085 |
Inventory | 85,551 | 78,858 |
Prepaid expenses | 2,832 | 1,684 |
Refundable income taxes | 3,131 | 2,705 |
Total current assets | 134,355 | 110,901 |
Property and equipment | 252,586 | 246,219 |
Less accumulated depreciation and amortization | (158,812) | (153,428) |
Property and equipment, net | 93,774 | 92,791 |
Equity method investments | 11,152 | 18,934 |
Other assets | 2,665 | 2,710 |
Total assets | 241,946 | 225,336 |
Current Liabilities | ||
Current maturities of long-term debt | 4,366 | 4,359 |
Accounts payable | 16,140 | 20,342 |
Accounts payable to affiliate, net | 3,181 | 3,349 |
Accrued expenses | 8,009 | 8,945 |
Total current liabilities | 31,696 | 36,995 |
Long-term debt, less current maturities | 14,034 | 16,218 |
Revolving credit facility | 25,332 | 15,424 |
Deferred credits | 2,568 | 2,978 |
Accrued retirement, health and life insurance benefits | 3,415 | 3,604 |
Deferred income taxes | 4,009 | 3,432 |
Other noncurrent liabilities | 402 | 393 |
Total liabilities | 81,456 | 79,044 |
Commitments and Contingencies | ||
Capital stock | ||
Preferred, 5% non-cumulative; $10 par value; authorized 1,000 shares; issued and outstanding 437 shares | 4 | 4 |
Common stock | ||
No par value; authorized 40,000,000 shares; issued 18,115,965 shares at June 30, 2017 and December 31, 2016, and 16,715,939 and 16,658,765 shares outstanding at June 30, 2017 and December 31, 2016, respectively | 6,715 | 6,715 |
Additional paid-in capital | 14,723 | 14,279 |
Retained earnings | 156,325 | 142,652 |
Accumulated other comprehensive loss, net of tax | (454) | (373) |
Treasury stock, at cost | ||
Shares of 1,400,026 at June 30, 2017 and 1,457,200 at December 31, 2016 | (16,823) | (16,985) |
Total stockholders’ equity | 160,490 | 146,292 |
Total liabilities and stockholders’ equity | $ 241,946 | $ 225,336 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Statement of Financial Position [Abstract] | ||
Receivables allowance for doubtful accounts (in dollars) | $ 24 | $ 24 |
Preferred stock, percentage non-cumulative (percent) | 5.00% | 5.00% |
Preferred stock, par value (in Dollars per share) | $ 10 | $ 10 |
Preferred stock, shares authorized (shares) | 1,000 | 1,000 |
Preferred stock, shares issued (shares) | 437 | 437 |
Preferred stock, shares outstanding (shares) | 437 | 437 |
Common stock, shares authorized (shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (shares) | 18,115,965 | 18,115,965 |
Common stock, shares outstanding (shares) | 16,715,939 | 16,658,765 |
Treasury stock (shares) | 1,400,026 | 1,457,200 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash Flows from Operating Activities | ||
Net income | $ 15,047 | $ 13,367 |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||
Depreciation and amortization | 5,554 | 5,983 |
Distribution received from equity method investee | 7,131 | 3,300 |
Deferred income taxes, including change in valuation allowance | 577 | (749) |
Share-based compensation | 1,737 | 1,234 |
Equity method investment earnings | 348 | (1,596) |
Other, net | 0 | (230) |
Changes in Operating Assets and Liabilities: | ||
Receivables, net | (8,845) | (3,328) |
Inventory | (6,693) | (12,894) |
Prepaid expenses | (1,148) | 270 |
Accounts payable | (671) | (2,106) |
Accounts payable to affiliate, net | (168) | 196 |
Accrued expenses | (934) | (2,814) |
Income taxes payable | (426) | 57 |
Deferred credit | (410) | (348) |
Accrued retirement health and life insurance benefits | (256) | (124) |
Net cash provided by operating activities | 10,843 | 218 |
Cash Flows from Investing Activities | ||
Additions to plant, property and equipment | (9,933) | (6,088) |
Return of equity method investment | 299 | 0 |
Other, net | 0 | 230 |
Net cash used in investing activities | (9,634) | (5,858) |
Cash Flows from Financing Activities | ||
Stock shares repurchased | (1,131) | 0 |
Payment of dividends | (1,376) | (1,378) |
Principal payments on long-term debt | (177) | (2,173) |
Proceeds from credit facility | 12,467 | 17,064 |
Payments on credit facility | (4,650) | (6,952) |
Loan fees incurred with borrowings | 0 | (114) |
Net cash provided by financing activities | 5,133 | 6,447 |
Increase in cash and cash equivalents | 6,342 | 807 |
Cash and cash equivalents, beginning of year | 1,569 | 747 |
Cash and cash equivalents, end of period | $ 7,911 | $ 1,554 |
Condensed Consolidated Stateme8
Condensed Consolidated Statement of Changes In Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Total | Capital Stock Preferred | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning Balance at Dec. 31, 2016 | $ 146,292 | $ 4 | $ 6,715 | $ 14,279 | $ 142,652 | $ (373) | $ (16,985) |
Comprehensive income: | |||||||
Net income | 15,047 | 15,047 | |||||
Other Comprehensive loss | (81) | (81) | |||||
Dividends and dividend equivalents, net of estimated forfeitures | (1,374) | (1,374) | |||||
Share-based compensation | 1,304 | 1,304 | |||||
Stock shares awarded, forfeited, and/or vested | 433 | (860) | 1,293 | ||||
Stock shares repurchased | (1,131) | (1,131) | |||||
Ending Balance at Jun. 30, 2017 | $ 160,490 | $ 4 | $ 6,715 | $ 14,723 | $ 156,325 | $ (454) | $ (16,823) |
Accounting Policies and Basis o
Accounting Policies and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Accounting Policies and Basis of Presentation | Accounting Policies and Basis of Presentation. The Company. MGP Ingredients, Inc. ("Company") is a Kansas corporation headquartered in Atchison, Kansas. It was incorporated in 2011 and is a holding company with no operations of its own. Its principal directly-owned operating subsidiaries are MGPI Processing, Inc. ("Processing") and MGPI of Indiana, LLC ("MGPI-I"). Processing was incorporated in Kansas in 1957 and is the successor to a business founded in 1941 by Cloud L. Cray, Sr. On January 3, 2012 , MGP Ingredients, Inc. reorganized into a holding company structure (the "Reorganization") through a series of steps involving various legal entities. Prior to the Reorganization, Processing was named MGP Ingredients, Inc. Basis of Presentation and Principles of Consolidation. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2017 should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission ("SEC"). The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the results for interim periods in accordance with U.S. generally accepted accounting principles (“GAAP”). Pursuant to the rules and regulations of the SEC, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted. Use of Estimates. The financial reporting policies of the Company conform to GAAP. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The application of certain of these policies places significant demands on management’s judgment, with financial reporting results relying on estimation about the effects of matters that are inherently uncertain. For all of these policies, management cautions that future events rarely develop as forecast, and estimates routinely require adjustment and may require material adjustment. Inventory. Inventory includes finished goods, raw materials in the form of agricultural commodities used in the production process and certain maintenance and repair items. Bourbon and whiskeys are normally aged in barrels for several years, following industry practice; all barreled bourbon and whiskey is classified as a current asset. The Company includes warehousing, insurance, and other carrying charges applicable to barreled whiskey in inventory costs. Inventories are stated at lower of cost or net realizable value on the first-in, first-out, or FIFO, method. Inventory valuations are impacted by constantly changing prices paid for key materials, primarily corn. Inventory consists of the following: June 30, December 31, Finished goods $ 14,474 $ 14,002 Barreled distillate (bourbon and whiskey) 56,383 50,941 Work in process 2,141 1,933 Raw materials 4,271 4,274 Maintenance materials 6,693 6,231 Other 1,589 1,477 Total $ 85,551 $ 78,858 Equity Method Investments. The Company accounts for its investment in non-consolidated subsidiaries under the equity method of accounting when the Company has significant influence, but does not have more than 50 percent voting control, and is not considered the primary beneficiary. Under the equity method of accounting, the Company reflects its investment in non-consolidated subsidiaries within the Company’s Condensed Consolidated Balance Sheets as Equity method investments; the Company’s share of the earnings or losses of the non-consolidated subsidiaries is reflected as Equity method investment earnings in the Condensed Consolidated Statements of Income. The Company reviews its investments in non-consolidated subsidiaries for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. Evidence of a loss in value that is other than temporary include, but are not limited to, the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity which would justify the carrying amount of the investment, or, where applicable, estimated sales proceeds which are insufficient to recover the carrying amount of the investment. If the fair value of the investment is determined to be less than the carrying value and the decline in value is considered to be other than temporary, an appropriate write-down is recorded based on the excess of the carrying value over the best estimate of fair value of the investment. Revenue Recognition. Except as discussed below, revenue from the sale of the Company’s products is recognized as products are delivered to customers according to shipping terms and when title and risk of loss have transferred. Income from various government incentive grant programs is recognized as it is earned. The Company’s Distillery segment routinely produces unaged distillate, and this product is frequently barreled and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers. This product must meet customer acceptance specifications, the risks of ownership and title to the goods must be passed to the customer, and requirements for bill and hold revenue recognition must be met prior to the Company recognizing revenue from the sale of the product. Separate warehousing agreements are maintained for customers who store their product with the Company and warehouse services revenues are recognized as the services are provided. Sales include customer paid freight costs billed to customers for the quarters ended June 30, 2017 and 2016 of $3,463 and $3,939 , respectively and $7,078 and $8,076 for the year to date periods ended June 30, 2017 and 2016 , respectively. Income Taxes. The Company accounts for income taxes using an asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Evaluating the need for, and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence on a jurisdiction-by-jurisdiction basis. Such judgments require the Company to interpret existing tax law and other published guidance as applied to the Company's circumstances. As part of this assessment, the Company considers both positive and negative evidence about its profitability and tax situation. A valuation allowance is recognized if it is more likely than not that at least some portion of the deferred tax asset will not be realized. Accounting for uncertainty in income tax positions requires management judgment and the use of estimates in determining whether the impact of a tax position is "more likely than not" of being sustained. The Company considers many factors when evaluating and estimating its tax positions, which may require periodic adjustment and which may not accurately anticipate actual outcomes. It is possible that amounts reserved for potential exposure could change as a result of the conclusion of tax examinations and, accordingly, materially affect the Company’s reported net income after tax. Earnings per Share. Basic and diluted earnings per share are computed using the two-class method, which is an earnings allocation formula that determines net income per share for each class of Common Stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during the period. Long-Lived Assets and Loss on Impairment of Assets. Management reviews long-lived assets, mainly property and equipment assets, whenever events or circumstances indicate that usage may be limited and carrying values may not be fully recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are determined to be impaired, the impairment is measured by the amount by which the asset carrying value exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No events or conditions occurred during the quarter ended June 30, 2017 that required the Company to test its long-lived assets for impairment. Fair Value of Financial Instruments. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into three levels based upon the observability of inputs. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s short term financial instruments include cash and cash equivalents, accounts receivable and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market. The fair value of the Company’s debt is estimated based on current market interest rates for debt with similar maturities and credit quality. The fair value of the Company’s debt was $44,372 and $37,412 at June 30, 2017 and December 31, 2016 , respectively. The financial statement carrying value of total debt was $43,732 (including unamortized loan fees of $485 ) and $36,001 (including unamortized loan fees of $576 ) at June 30, 2017 and December 31, 2016 , respectively. These fair values are considered Level 2 under the fair value hierarchy. Recent Accounting Pronouncements. In May 2017, the FASB issued Accounting Standards Update ("ASU") 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies what constitutes a modification of a share-based payment award. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company is evaluating the effect that ASU 2017-09 will have on its consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. Companies will present all other components of net benefit cost outside operating income, if this subtotal is presented. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company is evaluating the effect that ASU 2017-07 will have on its consolidated financial statements and related disclosures. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , which clarifies the guidance in Subtopic 610-20 on accounting for derecognition of a nonfinancial asset. The ASU also defines in-substance nonfinancial assets and includes guidance on partial sales of nonfinancial assets. An entity is required to apply the amendments in this ASU at the same time that it applies ASU 2014-09 (see below). The Company is evaluating the effect that ASU 2017-05 will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which requires an entity to no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. The changes are effective for public business entities that are SEC filers, for annual and interim periods in fiscal years beginning after December 15, 2019. All entities may early adopt the standard for goodwill impairment tests with measurement dates after January 1, 2017. The Company is evaluating the effect that ASU 2017-04 will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update) , which incorporates into the FASB Accounting Standards Codification ® recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards. The SEC staff had previously announced that registrants should include the disclosures starting with their December 2017 financial statements. The Company is evaluating the effect that ASU 2017-03 will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Entities may early adopt the ASU and apply it to transactions that have not been reported in financial statements that have been issued or made available for issuance. The Company is evaluating the effect that ASU 2017-01 will have on its consolidated financial statements and related disclosures. ASU Transition Updates. In February 2016, the FASB issued ASU 2016-02, Leases , which aims to make leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This ASU is effective for all interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements and related disclosures. At June 30, 2017 , the Company had various machinery and equipment operating leases, as well as operating leases for 224 rail cars and one office space. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in GAAP, including industry specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard is effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016. In 2016, the Company established an implementation team consisting of internal and external representatives. The implementation team is in the process of assessing the impact the new standard will have on the consolidated financial statements and assessing the impact on individual contracts in the Company's revenue streams. The scoping for the assessment is complete and the testing of individual contracts is substantially complete, with a review and compilation of findings to follow. In addition, the implementation team is in the process of identifying, and will then implement, appropriate changes to business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team will report findings and progress of the project to management and the Audit Committee on a frequent basis through the effective date. The Company will adopt the requirements of the new standard in the first quarter of 2018 and anticipates using the modified retrospective transition method. The Company has not yet determined the quantitative impact on its consolidated financial statements. |
Equity Method Investments
Equity Method Investments | 6 Months Ended |
Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments. As of June 30, 2017 , the Company’s investment accounted for using the equity method of accounting was a 30 percent interest in Illinois Corn Processing ("ICP"), which manufactures alcohol for fuel, industrial and beverage applications. Until December 23, 2016, the Company also had a 50 percent interest in D.M. Ingredients, GmbH, ("DMI"), which produced certain specialty starch and protein ingredients. On December 29, 2014, the Company gave notice to DMI and to the Company's partner in DMI, Crespel and Dieters GmbH & Co. KG ("C&D"), to terminate the joint venture effective June 30, 2015. On June 22, 2015, a termination agreement was executed by and between the Company, DMI, and C&D to dissolve DMI effective June 30, 2015. Additionally, on June 22, 2015 a termination agreement was executed by and between the Company and DMI to terminate their distribution agreement effective June 29, 2015. On December 23, 2016, the Company received its portion of the remaining DMI liquidation proceeds, which totaled $351 , as a return of its investment. Refer to Note 10 for events occurring subsequent to the financial statement date for the quarter and year to date periods ended June 30, 2017 related to the Company's equity method investment in ICP. Summary Financial Information (unaudited). Condensed financial information related to the Company’s non-consolidated equity method investment in ICP is shown below. Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, ICP’s Operating results: Net sales (a) $ 39,677 $ 40,576 $ 78,062 $ 90,185 Cost of sales and expenses (b) 42,410 36,980 79,224 84,866 Net income $ (2,733 ) $ 3,596 $ (1,162 ) $ 5,319 (a) Includes related party sales to MGPI of $9,015 and $6,698 for the quarters ended June 30, 2017 and 2016 , respectively. Includes related party sales to MGPI of $17,672 and $12,939 for the year to date periods ended June 30, 2017 and 2016 , respectively. (b) Includes depreciation and amortization of $862 and $747 for the quarters ended June 30, 2017 and 2016 , respectively. Includes depreciation and amortization of $1,720 and $1,482 for the year to date periods ended June 30, 2017 and 2016 , respectively. The Company’s equity method investment earnings (loss) from joint ventures, based on unaudited financial statements, is as follows: Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, ICP (30% interest) $ (819 ) $ 1,079 $ (348 ) $ 1,596 DMI (50% interest) (a) — — — — (a) $ (819 ) $ 1,079 $ (348 ) $ 1,596 (a) The Company's equity method investment in DMI ended on December 23, 2016, when it received a return of its investment. The Company’s investment in joint ventures is as follows: June 30, December 31, ICP (30% interest) $ 11,152 (a) $ 18,934 (a) (a) During the year to date periods ended June 30, 2017 and 2016 , the Company received cash distributions from ICP of $7,430 and $3,300 , respectively. The Company's portions of the cash distributions totaling $7,430 , were recorded in the Condensed Consolidated Balance Sheets as cash and returns on investment. In the Condensed Consolidated Statements of Cash Flows, $7,131 of the cash distributions received in the year to date period ended June 30, 2017 was recorded as a return on investment. The balance of $299 was recorded as a return of investment because, since the inception of the investment, total dividends received exceeded total equity earnings by this amount (see Note 10). The cash distribution of $3,300 received in the year to date period ended June 30, 2016 was a return on investment. |
Corporate Borrowings
Corporate Borrowings | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Corporate Borrowings | Corporate Borrowings. Indebtedness Outstanding: Description (a) June 30, 2017 December 31, 2016 Credit Agreement - Revolver, 3.262% (variable rate) due 2020 $ 25,817 $ 16,000 Credit Agreement - Fixed Asset Sub-Line term loan, 3.3005% (variable rate) due 2020 4,753 5,253 Credit Agreement - Term Loan, 3.3005% (variable rate) due 2020 11,500 13,000 Secured Promissory Note, 3.71% (variable rate) due 2022 2,147 2,324 Unamortized loan fees (b) (485 ) (576 ) Total $ 43,732 $ 36,001 Less current maturities of long term debt (4,366 ) (4,359 ) Long-term debt $ 39,366 $ 31,642 (a) Interest rates are as of June 30, 2017 . (b) Loan fees are being amortized over the life of the Credit Agreement. Credit Agreement. On March 21, 2016, the Company entered into a Third Amended and Restated Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, National Association. The Credit Agreement contains customary terms and conditions substantially similar to the Second Amended and Restated Credit Agreement (the "Previous Credit Agreement") and associated schedules with Wells Fargo Bank, National Association. The Credit Agreement is a $15,000 term loan and $80,000 revolving facility resulting in a $95,000 facility. The principal of the term loan can be prepaid at any time without penalty or otherwise will be repaid by the Company in installments of $250 each month. The Company was in compliance with the Credit Agreement covenants at June 30, 2017 . The Company incurred no new loan fees related to the Credit Agreement during the quarter ended June 30, 2017 . The unamortized balance of total loan fees related to the Credit Agreement was $485 at June 30, 2017 and is included in the carrying value of total debt on the Condensed Consolidated Balance Sheets as described above in the Fair Value of Financial Instruments section. The loan fees are being amortized over the life of the Credit Agreement. The amount of borrowings which the Company may make is subject to borrowing base limitations adjusted for the Fixed Asset Sub-Line collateral as described in the Credit Agreement. As of June 30, 2017 , the Company's total outstanding borrowings under the Credit Agreement were $42,070 , comprised of $25,817 of revolver borrowing (including unamortized loan fees), $4,753 of fixed asset sub-line term loan borrowing, and $11,500 of term loan borrowing, leaving $49,431 available. The average interest rate for total borrowings of the Credit Agreement at June 30, 2017 was 3.28 percent . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense for the quarter and year to date period ended June 30, 2017 was $2,947 and $5,801 , for an effective tax rate for the quarter of 31.6 percent and for the year to date period of 27.8 percent . The effective tax rate differs from the 35 percent federal statutory rate on pretax income, primarily due to the impact of income tax benefits related to share-based compensation as accounted for in ASU 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, which was adopted by the Company during the quarter ended September 30, 2016 , the domestic production activities deduction, and state tax planning, including state income tax credits in Indiana and Kansas. The Company updated its estimated annual effective tax rate to include the anticipated effects of the use of capital loss carryforwards and a release of the related $716 in valuation allowance for the quarter and year to date period ended June 30, 2017 , resulting in a reduction of income tax expense of $364 . This release was based upon the anticipated capital gain related to the Company’s sale of its 30 percent ownership interest in ICP (see Note 10). As of June 30, 2017 , the Company has a remaining valuation allowance of $10 related to state net operating loss carry forwards in states in which the Company no longer files tax returns. Income tax expense for the quarter and year to date period ended June 30, 2016 , was $3,570 and $7,442 , respectively, for an effective tax rate of 36.1 percent for the quarter and 35.8 percent for the year to date period. The primary reasons for the reduction in effective tax rate of 4.5 percentage points in the quarter ended June 30, 2017 , are the state tax credits and the release of the valuation allowance. The primary reasons for the reduction in effective tax rate of 8.0 percentage points in the year to date period ended June 30, 2017 , are the impact of ASU 2016-09 (see above), the state tax credits, and the release of the valuation allowance. |
Dividends and Earnings per Shar
Dividends and Earnings per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Dividends and Earnings per Share | Dividends and Earnings per Share. Dividend and dividend equivalent information for year to date periods ended June 30, 2017 and 2016 is detailed below: Dividend and Dividend Equivalent Information (per Share and Unit) Declaration date Payment date Declared Paid Total payment 2017 February 15, 2017 March 24, 2017 $ 0.04 $ 0.04 $ 688 May 2, 2017 June 9, 2017 0.04 0.04 688 $ 0.08 $ 0.08 $ 1,376 2016 March 7, 2016 April 14, 2016 $ 0.08 $ 0.08 $ 1,378 The computations of basic and diluted earnings per share for the quarter and year to date periods ended June 30, 2017 and 2016 are as follows: Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, Operations: Net income (a) $ 6,369 $ 6,308 $ 15,047 $ 13,367 Income attributable to participating securities (b) 183 240 433 506 Net income attributable to common shareholders $ 6,186 $ 6,068 $ 14,614 $ 12,861 Share information: Basic and diluted weighted average common shares (c) 16,745,679 16,617,857 16,727,305 16,612,416 Basic and diluted earnings per share $ 0.37 $ 0.37 $ 0.87 $ 0.77 (a) Net income attributable to all shareholders. (b) At June 30, 2017 and 2016 , participating securities included 497,492 and 525,986 nonvested restricted stock units, respectively, and 0 and 128,500 nonvested shares of restricted stock, respectively. (c) Under the two-class method, weighted average common shares at June 30, 2017 and 2016 , exclude nonvested, participating securities of 497,492 and 654,486 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies. Commitments. Open purchase order commitments at June 30, 2017 related to raw materials and packaging used in the ordinary course of business were $60,079 extending out to June 2018 . Open purchase order commitments at June 30, 2017 related to the purchase of capital assets were $3,843 . In 2015 and 2016, our Board of Directors approved a $29,000 major expansion in warehousing capacity on a 20 -acre campus adjoining our current Lawrenceburg facility as part of the implementation of our five -year strategic plan to grow the whiskey category. As of June 30, 2017 , we had incurred $22,725 of this approved investment amount. Contingencies. There are various legal and regulatory proceedings involving the Company and its subsidiaries. The Company accrues estimated costs for a contingency when management believes that a loss is probable and can be reasonably estimated. • On December 21, 2016, the U.S. Environmental Protection Agency (“EPA”) issued a Notice of Violation to the Company alleging the Company commenced construction of new aging warehouses for whiskey at its facility in Lawrenceburg, Indiana, without first applying for or obtaining a Clean Air Act permit and without adequately demonstrating to the EPA that emissions control equipment did not need to be installed to meet applicable air quality standards. The Company notes that neither EPA nor the State of Indiana have required emission control equipment for aging whiskey warehouses and, to our knowledge, no other whiskey distillers in the U.S. have been required to install emissions control equipment in their aging whiskey warehouses. No demand for a penalty has been made in connection with the Notice of Violation, but the Company believes it is probable that a penalty will be assessed. Although it is not possible to reasonably estimate a loss or range of loss at the date of this filing, the Company currently does not expect that the amount of any such penalty or related remedies would have a material adverse effect on the Company’s business, financial condition or results of operations. • A chemical release occurred at the Company's Atchison facility on October 21, 2016, which resulted in emissions venting into the air. The Company reported the event to the EPA, the Occupational, Safety, and Health Administration ("OSHA"), and to Kansas and local authorities on that date, and is cooperating fully to investigate and ensure that all appropriate response actions are taken. The Company has also engaged outside experts to assist the investigation and response. The Company believes it is probable that a fine or penalty may be imposed by regulatory authorities, but it is currently unable to reasonably estimate the amount thereof for Kansas and local authorities since some investigations are not complete and could take several months up to a few years to complete. Private plaintiffs have initiated, and additional private plaintiffs may initiate, legal proceedings for damages resulting from the emission, but the Company is currently unable to reasonably estimate the amount of any such damages that might result. The Company's insurance is expected to provide coverage of any damages to private plaintiffs, subject to a deductible of $250 , but certain regulatory fines or penalties may not be covered and there can be no assurance to the amount or timing of possible insurance recoveries if ultimately claimed by the Company. There was no significant damage to the Company's Atchison plant as a result of this incident. No other MGP facilities, including the distillery in Lawrenceburg, Indiana, were affected by this incident. OSHA completed its investigation and, on April 19, 2017, issued its penalty to the Company in the amount of $138 . Management settled this assessment with OSHA in full for $75 , which was paid on May 16, 2017. A portion, or all, of the penalty amount may be covered by insurance. The EPA informed the Company on August 1, 2017, that it intends to seek civil penalties of approximately $250 in connection with its investigation, while offering the Company the opportunity to settle the matter prior to the EPA proceeding with a formal enforcement action. The Company is seeking a negotiated settlement with the EPA. Since negotiations are ongoing and EPA-proposed penalties are not material to the quarter ended June 30, 2017, the Company has not included an accrual in its results. A portion, or all, of the settled penalty amount may be covered by insurance. • The Alcohol and Tobacco Tax and Trade Bureau ("TTB") performed a federal excise tax audit of the Company’s subsidiaries, MGPI of Indiana, LLC and MGPI Processing, Inc., for the periods January 1, 2012 through July 31, 2015 and January 1, 2013 through July 31, 2015, respectively. TTB informed the Company that it would be assessing a penalty as a result of the audit, and the Company offered a settlement for the penalty. The settlement has been accepted in principle by the TTB and the amount expensed in the prior year was insignificant to the Company’s 2016 financial results. |
Employee and Non-Employee Benef
Employee and Non-Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee and Non-Employee Benefit Plans | Employee and Non-Employee Benefit Plans. Equity-Based Compensation Plans . The Company’s equity-based compensation plans provide for the awarding of stock options, stock appreciation rights, shares of restricted stock ("Restricted Stock"), and restricted stock units ("RSUs") for senior executives and salaried employees, as well as non-employee directors. The Company has two active equity-based compensation plans: the Employee Equity Incentive Plan of 2014 (the "2014 Plan") and the Non-Employee Director Equity Incentive Plan (the "Directors' Plan"). The 2014 Plan replaced the inactive Stock Incentive Plan of 2004. As of June 30, 2017 , 280,074 RSUs had been granted under the 2014 Plan, with 14,616 of those forfeited for termination of employment. 62,995 shares had been granted related to the Directors' Plan as of June 30, 2017 and 497,492 shares of unvested RSUs were outstanding under the Company’s active and inactive long-term incentive plans. As of June 30, 2017 , the estimated unaccrued amount of liability-classified awards yet to be granted in 2018, net of estimated forfeitures, was $1,268 . |
Operating Segments
Operating Segments | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments. The Company has two reportable segments: distillery products and ingredient solutions. The distillery products segment consists of food grade alcohol, including premium beverage alcohol and industrial alcohol, and distillery co-products, such as distillers feed (commonly called dried distillers grain in the industry), fuel grade alcohol, and corn oil. The distillery products segment also includes warehouse services, including barrel put away, barrel storage, and barrel retrieval services. Ingredient solutions consists of specialty starches and proteins, commodity starches and commodity proteins. Operating profit for each segment is based on net sales less identifiable operating expenses. Non-direct selling, general and administrative expenses, interest expense, earnings from our equity method investments, other special charges and other general miscellaneous expenses have been excluded from segment operations and classified as Corporate. Receivables, inventories and equipment have been identified with the segments to which they relate. All other assets are considered as Corporate. Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, Net Sales to Customers Distillery products $ 70,699 $ 66,740 $ 144,648 $ 130,582 Ingredient solutions 15,054 13,652 28,274 26,645 Total 85,753 80,392 172,922 157,227 Gross Profit Distillery products 15,953 13,663 32,568 28,515 Ingredient solutions 2,872 1,868 5,298 4,062 Total 18,825 15,531 37,866 32,577 Depreciation and Amortization Distillery products 2,125 1,957 4,171 4,475 Ingredient solutions 416 411 824 855 Corporate 275 310 559 653 Total 2,816 2,678 5,554 5,983 Income before Income Taxes Distillery products 14,131 12,900 29,649 27,283 Ingredient solutions 2,269 1,148 4,074 2,750 Corporate (7,084 ) (4,170 ) (12,875 ) (9,224 ) Total $ 9,316 $ 9,878 $ 20,848 $ 20,809 The following table allocates assets to each segment: As of June 30, 2017 As of December 31, 2016 Identifiable Assets Distillery products $ 177,718 $ 161,059 Ingredient solutions 26,274 27,109 Corporate 37,954 37,168 Total $ 241,946 $ 225,336 |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments. Certain commodities the Company uses in its production process are exposed to market price risk due to volatility in the prices for those commodities. The Company's grain supply contract for its Lawrenceburg and Atchison facilities permits the Company to purchase grain for delivery up to 12 months into the future at negotiated prices. The pricing for these contracts is based on a formula using several factors. The Company has determined that the firm commitments to purchase grain under the terms of these contracts meet the normal purchases and sales exception as defined under ASC 815, Derivatives and Hedging , and has excluded the fair value of these commitments from recognition within its consolidated financial statements until the actual contracts are physically settled. The Company’s production process also involves the use of wheat flour and natural gas. The contracts for wheat flour and natural gas range from monthly contracts to multi-year supply arrangements; however, because the quantities involved have always been for amounts to be consumed within the normal expected production process, the Company has determined that these contracts meet the criteria for the normal purchases and sales exception and have excluded the fair value of these commitments from recognition within its consolidated financial statements until the actual contracts are physically settled. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events. • On July 3, 2017, the Company completed the sale of its 30 percent equity ownership interest in ICP to Pacific Ethanol Central, LLC ("Pacific Ethanol") consistent with an Agreement and Plan of Merger ("Merger Agreement") entered into on June 26, 2017. Illinois Corn Processing Holdings, Inc., an affiliate of SEACOR Holdings, Inc., held the remaining equity in ICP that was also sold per the Merger Agreement. The Company received total cash proceeds of $9,000 (before transaction expenses and taxes), as well as a secured promissory note ("Note") with a principal amount of $14,008 , including the Company's portion of a favorable working capital adjustment. ICP is the obligor on the Note. The Note is secured by, among other things, all of the limited liability company interests issued by ICP, as well as all of the property and assets of ICP following the closing. The Note bears interest at LIBOR plus an applicable margin. The margin is 5% for the first three months the Note is outstanding, 8% for the next three months, and 10% at all times thereafter. The Note matures 18 months from the closing of the merger transaction. The Note may be prepaid without penalty or premium. The Note requires mandatory prepayment in certain circumstances as a result of the receipt of cash proceeds by the maker from the sale or other disposition of the property which is collateral under the Note. The Note includes customary representations and warranties and events of default. The Merger Agreement also contemplated a special distribution of all of ICP’s cash and cash equivalents to equity owners prior to the closing. On June 28, 2017, the Company received $6,600 representing its 30 percent share of a dividend in the amount of $22,000 approved on June 26, 2017. The Company also received a smaller distribution of $830 on June 30, 2017 representing its 30 percent share of an additional distribution in the amount of $2,765 . • On August 1, 2017, the Board of Directors declared a special dividend payable to stockholders of record as of August 18, 2017, of the Company's Common Stock, and a dividend equivalent payable to holders of RSUs as of August 18, 2017, of $.85 per share and per unit, payable on September 8, 2017. The total special dividend and dividend equivalent payment will be approximately $14,625 . • On August 1, 2017, the Board of Directors declared a quarterly dividend payable to stockholders of record as of August 18, 2017, of the Company's Common Stock, and a dividend equivalent payable to holders of RSUs as of August 18, 2017, of $.04 per share and per unit, payable on September 11, 2017. • Refer to Note 6. for events occurring subsequent to the financial statement date related to the October 21, 2016, chemical release at the Company's Atchison facility. |
Accounting Policies and Basis19
Accounting Policies and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements as of and for the quarter ended June 30, 2017 should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission ("SEC"). The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. |
Use of Estimates | Use of Estimates. The financial reporting policies of the Company conform to GAAP. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The application of certain of these policies places significant demands on management’s judgment, with financial reporting results relying on estimation about the effects of matters that are inherently uncertain. For all of these policies, management cautions that future events rarely develop as forecast, and estimates routinely require adjustment and may require material adjustment. |
Inventory | Inventory. Inventory includes finished goods, raw materials in the form of agricultural commodities used in the production process and certain maintenance and repair items. Bourbon and whiskeys are normally aged in barrels for several years, following industry practice; all barreled bourbon and whiskey is classified as a current asset. The Company includes warehousing, insurance, and other carrying charges applicable to barreled whiskey in inventory costs. Inventories are stated at lower of cost or net realizable value on the first-in, first-out, or FIFO, method. Inventory valuations are impacted by constantly changing prices paid for key materials, primarily corn. |
Equity Method Investments | Equity Method Investments. The Company accounts for its investment in non-consolidated subsidiaries under the equity method of accounting when the Company has significant influence, but does not have more than 50 percent voting control, and is not considered the primary beneficiary. Under the equity method of accounting, the Company reflects its investment in non-consolidated subsidiaries within the Company’s Condensed Consolidated Balance Sheets as Equity method investments; the Company’s share of the earnings or losses of the non-consolidated subsidiaries is reflected as Equity method investment earnings in the Condensed Consolidated Statements of Income. The Company reviews its investments in non-consolidated subsidiaries for impairment whenever events or changes in business circumstances indicate that the carrying amount of the investments may not be fully recoverable. Evidence of a loss in value that is other than temporary include, but are not limited to, the absence of an ability to recover the carrying amount of the investment, the inability of the investee to sustain an earnings capacity which would justify the carrying amount of the investment, or, where applicable, estimated sales proceeds which are insufficient to recover the carrying amount of the investment. If the fair value of the investment is determined to be less than the carrying value and the decline in value is considered to be other than temporary, an appropriate write-down is recorded based on the excess of the carrying value over the best estimate of fair value of the investment. |
Revenue Recognition | Revenue Recognition. Except as discussed below, revenue from the sale of the Company’s products is recognized as products are delivered to customers according to shipping terms and when title and risk of loss have transferred. Income from various government incentive grant programs is recognized as it is earned. The Company’s Distillery segment routinely produces unaged distillate, and this product is frequently barreled and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers. This product must meet customer acceptance specifications, the risks of ownership and title to the goods must be passed to the customer, and requirements for bill and hold revenue recognition must be met prior to the Company recognizing revenue from the sale of the product. Separate warehousing agreements are maintained for customers who store their product with the Company and warehouse services revenues are recognized as the services are provided. |
Income Taxes | Income Taxes. The Company accounts for income taxes using an asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Evaluating the need for, and amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence on a jurisdiction-by-jurisdiction basis. Such judgments require the Company to interpret existing tax law and other published guidance as applied to the Company's circumstances. As part of this assessment, the Company considers both positive and negative evidence about its profitability and tax situation. A valuation allowance is recognized if it is more likely than not that at least some portion of the deferred tax asset will not be realized. Accounting for uncertainty in income tax positions requires management judgment and the use of estimates in determining whether the impact of a tax position is "more likely than not" of being sustained. The Company considers many factors when evaluating and estimating its tax positions, which may require periodic adjustment and which may not accurately anticipate actual outcomes. It is possible that amounts reserved for potential exposure could change as a result of the conclusion of tax examinations and, accordingly, materially affect the Company’s reported net income after tax. |
Earnings per Share | Earnings per Share. Basic and diluted earnings per share are computed using the two-class method, which is an earnings allocation formula that determines net income per share for each class of Common Stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during the period. |
Long-lived Assets and Loss on Impairment of Assets | Long-Lived Assets and Loss on Impairment of Assets. Management reviews long-lived assets, mainly property and equipment assets, whenever events or circumstances indicate that usage may be limited and carrying values may not be fully recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are determined to be impaired, the impairment is measured by the amount by which the asset carrying value exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into three levels based upon the observability of inputs. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s short term financial instruments include cash and cash equivalents, accounts receivable and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In May 2017, the FASB issued Accounting Standards Update ("ASU") 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies what constitutes a modification of a share-based payment award. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company is evaluating the effect that ASU 2017-09 will have on its consolidated financial statements and related disclosures. In March 2017, the FASB issued ASU 2017-07, Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , which requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. Companies will present all other components of net benefit cost outside operating income, if this subtotal is presented. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company is evaluating the effect that ASU 2017-07 will have on its consolidated financial statements and related disclosures. In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets , which clarifies the guidance in Subtopic 610-20 on accounting for derecognition of a nonfinancial asset. The ASU also defines in-substance nonfinancial assets and includes guidance on partial sales of nonfinancial assets. An entity is required to apply the amendments in this ASU at the same time that it applies ASU 2014-09 (see below). The Company is evaluating the effect that ASU 2017-05 will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which requires an entity to no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. The changes are effective for public business entities that are SEC filers, for annual and interim periods in fiscal years beginning after December 15, 2019. All entities may early adopt the standard for goodwill impairment tests with measurement dates after January 1, 2017. The Company is evaluating the effect that ASU 2017-04 will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update) , which incorporates into the FASB Accounting Standards Codification ® recent SEC guidance about disclosing, under SEC SAB Topic 11.M, the effect on financial statements of adopting the revenue, leases, and credit losses standards. The SEC staff had previously announced that registrants should include the disclosures starting with their December 2017 financial statements. The Company is evaluating the effect that ASU 2017-03 will have on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Entities may early adopt the ASU and apply it to transactions that have not been reported in financial statements that have been issued or made available for issuance. The Company is evaluating the effect that ASU 2017-01 will have on its consolidated financial statements and related disclosures. ASU Transition Updates. In February 2016, the FASB issued ASU 2016-02, Leases , which aims to make leasing activities more transparent and comparable and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. This ASU is effective for all interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements and related disclosures. At June 30, 2017 , the Company had various machinery and equipment operating leases, as well as operating leases for 224 rail cars and one office space. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in GAAP, including industry specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard is effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016. In 2016, the Company established an implementation team consisting of internal and external representatives. The implementation team is in the process of assessing the impact the new standard will have on the consolidated financial statements and assessing the impact on individual contracts in the Company's revenue streams. The scoping for the assessment is complete and the testing of individual contracts is substantially complete, with a review and compilation of findings to follow. In addition, the implementation team is in the process of identifying, and will then implement, appropriate changes to business processes, systems and controls to support recognition and disclosure under the new standard. The implementation team will report findings and progress of the project to management and the Audit Committee on a frequent basis through the effective date. The Company will adopt the requirements of the new standard in the first quarter of 2018 and anticipates using the modified retrospective transition method. The Company has not yet determined the quantitative impact on its consolidated financial statements. |
Accounting Policies and Basis20
Accounting Policies and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Inventory consists of the following: June 30, December 31, Finished goods $ 14,474 $ 14,002 Barreled distillate (bourbon and whiskey) 56,383 50,941 Work in process 2,141 1,933 Raw materials 4,271 4,274 Maintenance materials 6,693 6,231 Other 1,589 1,477 Total $ 85,551 $ 78,858 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | Condensed financial information related to the Company’s non-consolidated equity method investment in ICP is shown below. Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, ICP’s Operating results: Net sales (a) $ 39,677 $ 40,576 $ 78,062 $ 90,185 Cost of sales and expenses (b) 42,410 36,980 79,224 84,866 Net income $ (2,733 ) $ 3,596 $ (1,162 ) $ 5,319 (a) Includes related party sales to MGPI of $9,015 and $6,698 for the quarters ended June 30, 2017 and 2016 , respectively. Includes related party sales to MGPI of $17,672 and $12,939 for the year to date periods ended June 30, 2017 and 2016 , respectively. (b) Includes depreciation and amortization of $862 and $747 for the quarters ended June 30, 2017 and 2016 , respectively. Includes depreciation and amortization of $1,720 and $1,482 for the year to date periods ended June 30, 2017 and 2016 , respectively. The Company’s equity method investment earnings (loss) from joint ventures, based on unaudited financial statements, is as follows: Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, ICP (30% interest) $ (819 ) $ 1,079 $ (348 ) $ 1,596 DMI (50% interest) (a) — — — — (a) $ (819 ) $ 1,079 $ (348 ) $ 1,596 (a) The Company's equity method investment in DMI ended on December 23, 2016, when it received a return of its investment. The Company’s investment in joint ventures is as follows: June 30, December 31, ICP (30% interest) $ 11,152 (a) $ 18,934 (a) (a) During the year to date periods ended June 30, 2017 and 2016 , the Company received cash distributions from ICP of $7,430 and $3,300 , respectively. The Company's portions of the cash distributions totaling $7,430 , were recorded in the Condensed Consolidated Balance Sheets as cash and returns on investment. In the Condensed Consolidated Statements of Cash Flows, $7,131 of the cash distributions received in the year to date period ended June 30, 2017 was recorded as a return on investment. The balance of $299 was recorded as a return of investment because, since the inception of the investment, total dividends received exceeded total equity earnings by this amount (see Note 10). The cash distribution of $3,300 received in the year to date period ended June 30, 2016 was a return on investment. |
Corporate Borrowings (Tables)
Corporate Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Indebtedness Outstanding: Description (a) June 30, 2017 December 31, 2016 Credit Agreement - Revolver, 3.262% (variable rate) due 2020 $ 25,817 $ 16,000 Credit Agreement - Fixed Asset Sub-Line term loan, 3.3005% (variable rate) due 2020 4,753 5,253 Credit Agreement - Term Loan, 3.3005% (variable rate) due 2020 11,500 13,000 Secured Promissory Note, 3.71% (variable rate) due 2022 2,147 2,324 Unamortized loan fees (b) (485 ) (576 ) Total $ 43,732 $ 36,001 Less current maturities of long term debt (4,366 ) (4,359 ) Long-term debt $ 39,366 $ 31,642 (a) Interest rates are as of June 30, 2017 . (b) Loan fees are being amortized over the life of the Credit Agreement. |
Dividends and Earnings per Sh23
Dividends and Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Dividends Declared | Dividend and dividend equivalent information for year to date periods ended June 30, 2017 and 2016 is detailed below: Dividend and Dividend Equivalent Information (per Share and Unit) Declaration date Payment date Declared Paid Total payment 2017 February 15, 2017 March 24, 2017 $ 0.04 $ 0.04 $ 688 May 2, 2017 June 9, 2017 0.04 0.04 688 $ 0.08 $ 0.08 $ 1,376 2016 March 7, 2016 April 14, 2016 $ 0.08 $ 0.08 $ 1,378 |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted earnings per share for the quarter and year to date periods ended June 30, 2017 and 2016 are as follows: Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, Operations: Net income (a) $ 6,369 $ 6,308 $ 15,047 $ 13,367 Income attributable to participating securities (b) 183 240 433 506 Net income attributable to common shareholders $ 6,186 $ 6,068 $ 14,614 $ 12,861 Share information: Basic and diluted weighted average common shares (c) 16,745,679 16,617,857 16,727,305 16,612,416 Basic and diluted earnings per share $ 0.37 $ 0.37 $ 0.87 $ 0.77 (a) Net income attributable to all shareholders. (b) At June 30, 2017 and 2016 , participating securities included 497,492 and 525,986 nonvested restricted stock units, respectively, and 0 and 128,500 nonvested shares of restricted stock, respectively. (c) Under the two-class method, weighted average common shares at June 30, 2017 and 2016 , exclude nonvested, participating securities of 497,492 and 654,486 , respectively. |
Operating Segments (Tables)
Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | All other assets are considered as Corporate. Quarter Ended Year to Date Ended June 30, June 30, June 30, June 30, Net Sales to Customers Distillery products $ 70,699 $ 66,740 $ 144,648 $ 130,582 Ingredient solutions 15,054 13,652 28,274 26,645 Total 85,753 80,392 172,922 157,227 Gross Profit Distillery products 15,953 13,663 32,568 28,515 Ingredient solutions 2,872 1,868 5,298 4,062 Total 18,825 15,531 37,866 32,577 Depreciation and Amortization Distillery products 2,125 1,957 4,171 4,475 Ingredient solutions 416 411 824 855 Corporate 275 310 559 653 Total 2,816 2,678 5,554 5,983 Income before Income Taxes Distillery products 14,131 12,900 29,649 27,283 Ingredient solutions 2,269 1,148 4,074 2,750 Corporate (7,084 ) (4,170 ) (12,875 ) (9,224 ) Total $ 9,316 $ 9,878 $ 20,848 $ 20,809 The following table allocates assets to each segment: As of June 30, 2017 As of December 31, 2016 Identifiable Assets Distillery products $ 177,718 $ 161,059 Ingredient solutions 26,274 27,109 Corporate 37,954 37,168 Total $ 241,946 $ 225,336 |
Accounting Policies and Basis25
Accounting Policies and Basis of Presentation - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Finished goods | $ 14,474 | $ 14,002 |
Barreled distillate (bourbon and whiskey) | 56,383 | 50,941 |
Work in process | 2,141 | 1,933 |
Raw materials | 4,271 | 4,274 |
Maintenance materials | 6,693 | 6,231 |
Other | 1,589 | 1,477 |
Total | $ 85,551 | $ 78,858 |
Accounting Policies and Basis26
Accounting Policies and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)rail_caroffice_space | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)rail_caroffice_space | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Accounting Policies [Abstract] | |||||
Shipping and handling revenue | $ 3,463 | $ 3,939 | $ 7,078 | $ 8,076 | |
Debt instrument, fair value disclosure | 44,372 | 44,372 | $ 37,412 | ||
Long-term debt | 43,732 | 43,732 | 36,001 | ||
Unamortized loan fees | $ 485 | $ 485 | $ 576 | ||
Property under operating lease | Rail cars | |||||
Property Subject to or Available for Operating Lease [Line Items] | |||||
Property subject to operating leases, number of units | rail_car | 224 | 224 | |||
Property under operating lease | Office space | |||||
Property Subject to or Available for Operating Lease [Line Items] | |||||
Property subject to operating leases, number of units | office_space | 1 | 1 |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Jun. 28, 2017 | Dec. 23, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Schedule of Equity Method Investments [Line Items] | |||||||
Return of equity method investment | $ 299 | $ 0 | |||||
Distribution received from equity method investee | $ 7,131 | 3,300 | |||||
ICP | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method ownership percentage (percent) | 30.00% | 30.00% | 30.00% | ||||
Related party sales to MGPI | $ 9,015 | $ 6,698 | $ 17,672 | 12,939 | |||
Depreciation and amortization | $ 862 | $ 747 | 1,720 | 1,482 | |||
Cash distributions received from ICP | 7,430 | 3,300 | |||||
Return of equity method investment | $ 830 | $ 6,600 | 7,131 | $ 3,300 | |||
Distribution received from equity method investee | $ 299 | ||||||
DMI | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Equity method ownership percentage (percent) | 50.00% | 50.00% | 50.00% | 50.00% | |||
Liquidation proceeds | $ 351 |
Equity Method Investments - Ope
Equity Method Investments - Operating Results (Details) - ICP - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
ICP’s Operating results: | ||||
Net sales | $ 39,677 | $ 40,576 | $ 78,062 | $ 90,185 |
Cost of sales and expenses | 42,410 | 36,980 | 79,224 | 84,866 |
Net income | $ (2,733) | $ 3,596 | $ (1,162) | $ 5,319 |
Equity Method Investments - The
Equity Method Investments - The Company's Equity in Earnings (Loss) of Joint Ventures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 23, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||||
Equity in earnings (loss) of joint ventures | $ (819) | $ 1,079 | $ (348) | $ 1,596 | |
ICP | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity in earnings (loss) of joint ventures | $ (819) | 1,079 | $ (348) | 1,596 | |
Equity method ownership percentage (percent) | 30.00% | 30.00% | |||
DMI | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity in earnings (loss) of joint ventures | $ 0 | $ 0 | $ 0 | $ 0 | |
Equity method ownership percentage (percent) | 50.00% | 50.00% | 50.00% |
Equity Method Investments - T30
Equity Method Investments - The Company's Investment in Joint Ventures (Details) - ICP - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 11,152 | $ 18,934 |
Equity method ownership percentage (percent) | 30.00% |
Corporate Borrowings - Indebted
Corporate Borrowings - Indebtedness Outstanding (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Unamortized loan fees | $ (485) | $ (576) |
Total | 43,732 | 36,001 |
Less current maturities of long term debt | (4,366) | (4,359) |
Long-term debt | $ 39,366 | 31,642 |
Credit Agreement - Revolver, 3.262% (variable rate) due 2020 | ||
Debt Instrument [Line Items] | ||
Credit Agreement, interest rate (as a percent) | 3.262% | |
Fixed asset sub-line term loan | Credit Agreement - Revolver, 3.262% (variable rate) due 2020 | ||
Debt Instrument [Line Items] | ||
Credit Agreement (variable rate) due 2020 | $ 25,817 | 16,000 |
Fixed asset sub-line term loan | Credit Agreement - Fixed Asset Sub-Line term loan, 3.3005% (variable rate) due 2020 | ||
Debt Instrument [Line Items] | ||
Credit Agreement (variable rate) due 2020 | $ 4,753 | 5,253 |
Credit Agreement, interest rate (as a percent) | 3.3005% | |
Term Loan | Credit Agreement - Term Loan, 3.3005% (variable rate) due 2020 | ||
Debt Instrument [Line Items] | ||
Credit Agreement - Term Loan, 3.3005% (variable rate) due 2020 | $ 11,500 | 13,000 |
Effective interest rate (as a percent) | 3.3005% | |
Secured Debt | Secured Promissory Note, 3.71% (variable rate) due 2022 | ||
Debt Instrument [Line Items] | ||
Secured Promissory Note, 3.71% (variable rate) due 2022 | $ 2,147 | $ 2,324 |
Interest rate during period (as a percent) | 3.71% |
Corporate Borrowings - Narrativ
Corporate Borrowings - Narrative (Details) - USD ($) | Mar. 21, 2016 | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Unamortized loan fees | $ 485,000 | $ 576,000 | |
Long-term debt | 43,732,000 | $ 36,001,000 | |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 95,000,000 | ||
Monthly installment | 250,000 | ||
Long-term debt | 42,070,000 | ||
Credit facility, remaining borrowing capacity | $ 49,431,000 | ||
Average interest rate (as a percent) | 3.28% | ||
Credit Agreement | Revolver borrowings | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 80,000,000 | ||
Term Loan | Credit Agreement | |||
Debt Instrument [Line Items] | |||
Term loan face value | $ 15,000,000 | ||
Long-term debt | $ 11,500,000 | ||
Fixed asset sub-line term loan | Credit Agreement | Revolver borrowings | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings under credit facility | 25,817,000 | ||
Fixed asset sub-line term loan | Credit Agreement | Credit Agreement - Fixed Asset Sub-Line term loan, 3.3005% (variable rate) due 2020 | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings under credit facility | $ 4,753,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 2,947 | $ 3,570 | $ 5,801 | $ 7,442 |
Effective tax rate (as a percent) | 31.60% | 36.10% | 27.80% | 35.80% |
Federal statutory rate (as a percent) | 35.00% | |||
Release of valuation allowance due to anticipated effects of the use of capital loss carryforwards | $ 716 | $ 716 | ||
Reduction in income tax expense | $ 364 | $ 364 | ||
Operating Loss Carryforwards [Line Items] | ||||
Reduction in effective tax rate due to state tax credits and valuation allowance (as a percent) | 4.50% | 8.00% | ||
State and Local Jurisdiction | ||||
Operating Loss Carryforwards [Line Items] | ||||
Operating loss carryforwards | $ 10 | $ 10 | ||
ICP | ||||
Operating Loss Carryforwards [Line Items] | ||||
Equity method ownership percentage (percent) | 30.00% | 30.00% |
Dividends and Earnings per Sh34
Dividends and Earnings per Share - Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 09, 2017 | May 02, 2017 | Mar. 24, 2017 | Feb. 15, 2017 | Apr. 14, 2016 | Mar. 07, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 |
Earnings Per Share [Abstract] | ||||||||||
Dividends declared (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.08 | $ 0.08 | ||||||
Dividends paid (in dollars per share) | $ 0.04 | $ 0.04 | $ 0.08 | $ 0.04 | $ 0 | $ 0.08 | $ 0.08 | |||
Total payment | $ 688 | $ 688 | $ 1,378 | $ 1,376 | $ 1,378 |
Dividends and Earnings per Sh35
Dividends and Earnings per Share - The Computations of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operations: | ||||
Net income | $ 6,369 | $ 6,308 | $ 15,047 | $ 13,367 |
Income attributable to participating securities | 183 | 240 | 433 | 506 |
Net income attributable to common shareholders and used in EPS calculation | $ 6,186 | $ 6,068 | $ 14,614 | $ 12,861 |
Share information: | ||||
Basic and diluted weighted average common shares (in shares) | 16,745,679 | 16,617,857 | 16,727,305 | 16,612,416 |
Basic and diluted earnings per common share (in usd per share) | $ 0.37 | $ 0.37 | $ 0.87 | $ 0.77 |
Dividends and Earnings per Sh36
Dividends and Earnings per Share - Narrative (Details) - shares | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Participating securities (in shares) | 497,492 | 525,986 |
Restricted Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Participating securities (in shares) | 0 | 128,500 |
Restricted Stock and Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Unvested awards (in shares) | 497,492 | 654,486 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Aug. 01, 2017USD ($) | May 16, 2017USD ($) | Apr. 19, 2017USD ($) | Oct. 21, 2016USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($)a |
Long-term Purchase Commitment [Line Items] | ||||||
Commitments | $ 60,079,000 | |||||
Insurance deductible | $ 250,000 | |||||
Penalty issued by OSHA | $ 138,000 | |||||
Payments for legal settlements | $ 75,000 | |||||
Environmental Protection Agency (EPA) | Subsequent Event | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Civil penalties | $ 250,000 | |||||
Warehouse Expansion | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Commitments | $ 29,000,000 | |||||
Area of campus (in acres) | a | 20 | |||||
Strategic growth period | 5 years | |||||
Purchases made against approved investment amount | 22,725,000 | |||||
Capital Expenditures | ||||||
Long-term Purchase Commitment [Line Items] | ||||||
Aggregate purchase commitments | $ 3,843,000 |
Employee and Non-Employee Ben38
Employee and Non-Employee Benefit Plans (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017USD ($)planshares | Jun. 30, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of active equity-based compensation plans | plan | 2 | |
Restricted Stock Units (RSUs) | The 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in period (in shares) | 280,074 | |
RSUs forfeited for termination of employment (in shares) | 14,616 | |
Unamortized balance of liability-classified awards, net of estimated forfeitures | $ | $ 1,268 | |
Restricted Stock Units (RSUs) | The Directors' Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in period (in shares) | 62,995 | |
Restricted Stock and Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested awards (in shares) | 497,492 | 654,486 |
Operating Segments (Details)
Operating Segments (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Operating Segments - Operating
Operating Segments - Operating Profit (Loss) for Each Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net Sales to Customers | ||||
Net Sales to Customers | $ 85,753 | $ 80,392 | $ 172,922 | $ 157,227 |
Gross Profit | ||||
Gross Profit | 18,825 | 15,531 | 37,866 | 32,577 |
Depreciation and Amortization | ||||
Depreciation and Amortization | 2,816 | 2,678 | 5,554 | 5,983 |
Income before Income Taxes | ||||
Income before Income Taxes | 9,316 | 9,878 | 20,848 | 20,809 |
Operating Segments | Distillery products | ||||
Net Sales to Customers | ||||
Net Sales to Customers | 70,699 | 66,740 | 144,648 | 130,582 |
Gross Profit | ||||
Gross Profit | 15,953 | 13,663 | 32,568 | 28,515 |
Depreciation and Amortization | ||||
Depreciation and Amortization | 2,125 | 1,957 | 4,171 | 4,475 |
Income before Income Taxes | ||||
Income before Income Taxes | 14,131 | 12,900 | 29,649 | 27,283 |
Operating Segments | Ingredient solutions | ||||
Net Sales to Customers | ||||
Net Sales to Customers | 15,054 | 13,652 | 28,274 | 26,645 |
Gross Profit | ||||
Gross Profit | 2,872 | 1,868 | 5,298 | 4,062 |
Depreciation and Amortization | ||||
Depreciation and Amortization | 416 | 411 | 824 | 855 |
Income before Income Taxes | ||||
Income before Income Taxes | 2,269 | 1,148 | 4,074 | 2,750 |
Corporate | ||||
Depreciation and Amortization | ||||
Depreciation and Amortization | 275 | 310 | 559 | 653 |
Income before Income Taxes | ||||
Income before Income Taxes | $ (7,084) | $ (4,170) | $ (12,875) | $ (9,224) |
Operating Segments - Identifiab
Operating Segments - Identifiable Assets for Each Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 241,946 | $ 225,336 |
Operating Segments | Distillery products | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 177,718 | 161,059 |
Operating Segments | Ingredient solutions | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 26,274 | 27,109 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 37,954 | $ 37,168 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 03, 2017 | Jun. 30, 2017 | Jun. 28, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Aug. 01, 2017 | Jun. 26, 2017 |
Subsequent Event [Line Items] | |||||||
Return of equity method investment | $ 299 | $ 0 | |||||
Subsequent Event | Special Dividend | |||||||
Subsequent Event [Line Items] | |||||||
Dividends payable, amount | $ 14,625 | ||||||
Dividends payable (in dollars per share) | $ 0.85 | ||||||
Subsequent Event | Quarterly Dividend | |||||||
Subsequent Event [Line Items] | |||||||
Dividends payable (in dollars per share) | $ 0.04 | ||||||
Pacific Ethanol Central, LLC | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Notes receivable, net | $ 14,008 | ||||||
Loans receivable, term | 18 months | ||||||
Pacific Ethanol Central, LLC | Subsequent Event | LIBOR | |||||||
Subsequent Event [Line Items] | |||||||
Basis spread on variable rate, first three months (as a percent) | 5.00% | ||||||
Basis spread on variable rate, next three months (as a percent) | 8.00% | ||||||
Basis spread on variable rate, thereafter (as a percent) | 10.00% | ||||||
ICP | |||||||
Subsequent Event [Line Items] | |||||||
Dividends payable, amount | $ 2,765 | $ 2,765 | $ 22,000 | ||||
ICP | |||||||
Subsequent Event [Line Items] | |||||||
Equity method ownership percentage (percent) | 30.00% | 30.00% | |||||
Return of equity method investment | $ 830 | $ 6,600 | $ 7,131 | $ 3,300 | |||
ICP | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Total cash proceeds from sale of equity method investments | $ 9,000 |