Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 26, 2018 | |
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 | 16,844,596 | |
Amendment Flag | false | |
Entity Central Index Key | 835,011 | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Income Statement [Abstract] | |||
Net sales | $ 87,956 | $ 87,169 | |
Cost of sales | [1] | 69,005 | 68,128 |
Gross profit | 18,951 | 19,041 | |
Selling, general and administrative expenses (SG&A) | 8,562 | 7,649 | |
Operating income | 10,389 | 11,392 | |
Equity method investment earnings | 0 | 471 | |
Interest expense, net | (207) | (331) | |
Income before income taxes | 10,182 | 11,532 | |
Income tax expense | 1,255 | 2,854 | |
Net income | 8,927 | 8,678 | |
Income attributable to participating securities | 175 | 250 | |
Net income attributable to common shareholders and used in EPS calculation | $ 8,752 | $ 8,428 | |
Share information: | |||
Basic and diluted weighted average common shares (in shares) | 16,843,255 | 16,712,578 | |
Basic and diluted earnings per common share (in dollars per share) | $ 0.52 | $ 0.50 | |
Dividends and dividend equivalents per common share (in dollars per share) | $ 0.08 | $ 0.04 | |
[1] | Includes related party purchases of $0 and $9,245 for the quarters ended March 31, 2018 and 2017, respectively. |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Income (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Cost of sales, related party transactions | $ 0 | $ 9,245 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 8,927 | $ 8,678 |
Other comprehensive loss, net of tax: | ||
Change in post-employment benefits | (13) | (39) |
Other, net of tax | 0 | (2) |
Other comprehensive loss | (13) | (41) |
Comprehensive income | $ 8,914 | $ 8,637 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 1,123 | $ 3,084 |
Receivables (less allowance for doubtful accounts: March 31, 2018 - $24; December 31, 2017 - $24) | 34,532 | 34,347 |
Inventory | 98,876 | 93,149 |
Prepaid expenses | 3,187 | 2,182 |
Refundable income taxes | 932 | 1,980 |
Total current assets | 138,650 | 134,742 |
Property and equipment | 271,097 | 267,288 |
Less accumulated depreciation and amortization | (167,095) | (164,237) |
Property and equipment, net | 104,002 | 103,051 |
Other assets | 2,559 | 2,535 |
Total assets | 245,211 | 240,328 |
Current Liabilities | ||
Current maturities of long-term debt | 375 | 372 |
Accounts payable | 24,630 | 30,037 |
Accrued expenses | 7,161 | 11,171 |
Total current liabilities | 32,166 | 41,580 |
Long-term debt, less current maturities | 21,316 | 21,407 |
Revolving credit facility | 10,544 | 2,775 |
Deferred credits | 1,934 | 2,151 |
Accrued retirement, health and life insurance benefits | 3,030 | 3,133 |
Other noncurrent liabilities | 542 | 540 |
Deferred income taxes | 291 | 12 |
Total liabilities | 69,823 | 71,598 |
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 March 31, 2018 and December 31, 2017, and 16,844,596 and 16,797,420 shares outstanding at March 31, 2018 and December 31, 2017, respectively | 6,715 | 6,715 |
Additional paid-in capital | 13,983 | 13,912 |
Retained earnings | 174,682 | 167,129 |
Accumulated other comprehensive loss | (324) | (311) |
Treasury stock, at cost | ||
Shares of 1,271,369 at March 31, 2018 and 1,318,545 at December 31, 2017 | (19,672) | (18,719) |
Total stockholders’ equity | 175,388 | 168,730 |
Total liabilities and stockholders’ equity | $ 245,211 | $ 240,328 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Statement of Financial Position [Abstract] | ||
Receivables allowance for doubtful accounts (in dollars) | $ 24 | $ 24 |
Preferred stock, percentage non-cumulative | 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 | 16,844,596 |
Common stock, shares outstanding (shares) | 16,797,420 | 16,797,420 |
Treasury stock (shares) | 1,271,369 | 1,318,545 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows from Operating Activities | ||
Net income | $ 8,927 | $ 8,678 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,929 | 2,738 |
Deferred income taxes | 279 | (490) |
Share-based compensation | 1,191 | 1,028 |
Equity method investment earnings | 0 | (471) |
Changes in Operating Assets and Liabilities: | ||
Receivables, net | (185) | (10,302) |
Inventory | (5,727) | (1,130) |
Prepaid expenses | (1,005) | (742) |
Accounts payable | (2,238) | (943) |
Accounts payable to affiliate, net | 0 | (542) |
Accrued expenses | (4,009) | (1,627) |
Income taxes payable | 1,048 | 3,239 |
Deferred credit | (217) | (201) |
Accrued retirement health and life insurance benefits | (114) | (177) |
Net cash provided by (used in) operating activities | 879 | (942) |
Cash Flows from Investing Activities | ||
Additions to plant, property and equipment | (6,978) | (6,454) |
Other, net | (62) | 0 |
Net cash used in investing activities | (7,040) | (6,454) |
Cash Flows from Financing Activities | ||
Purchase of treasury stock for tax withholding on share-based compensation | (2,073) | (1,131) |
Payment of dividends and dividend equivalents | (1,375) | (688) |
Principal payments on long-term debt | (93) | (89) |
Proceeds from credit agreement | 7,741 | 10,500 |
Payments on credit agreement | 0 | (2,765) |
Net cash provided by financing activities | 4,200 | 5,827 |
Decrease in cash and cash equivalents | (1,961) | (1,569) |
Cash and cash equivalents, beginning of period | 3,084 | 1,569 |
Cash and cash equivalents, end of period | $ 1,123 | $ 0 |
Condensed Consolidated Stateme8
Condensed Consolidated Statement of Changes In Stockholders' Equity - 3 months ended Mar. 31, 2018 - 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, 2017 | $ 168,730 | $ 4 | $ 6,715 | $ 13,912 | $ 167,129 | $ (311) | $ (18,719) |
Comprehensive income: | |||||||
Net income | 8,927 | 8,927 | |||||
Other comprehensive loss | (13) | (13) | |||||
Dividends and dividend equivalents, net of estimated forfeitures | (1,374) | (1,374) | |||||
Share-based compensation | 1,052 | 1,052 | |||||
Stock shares awarded, forfeited, or vested | 139 | (981) | 1,120 | ||||
Purchase of treasury stock for tax withholding on share-based compensation | (2,073) | (2,073) | |||||
Ending Balance at Mar. 31, 2018 | $ 175,388 | $ 4 | $ 6,715 | $ 13,983 | $ 174,682 | $ (324) | $ (19,672) |
Accounting Policies and Basis o
Accounting Policies and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
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 and is a leading producer and supplier of premium distilled spirits and specialty wheat protein and starch food ingredients. Distilled spirits include premium bourbon and rye whiskeys and grain neutral spirits, including vodka and gin. MGP is also a top producer of high quality industrial alcohol for use in both food and non-food applications. The Company’s protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the packaged goods industry. The Company's distillery products are derived from corn and other grains (including rye, barley, wheat, barley malt, and milo), and its ingredient products are derived from wheat flour. The majority of the Company's sales are made directly or through distributors to manufacturers and processors of finished packaged goods or to bakeries. 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 March 31, 2018 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, 2017 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: March 31, December 31, Finished goods $ 14,905 $ 13,284 Barreled distillate (bourbon and whiskey) 67,932 65,726 Raw materials 5,282 3,954 Work in process 1,366 1,935 Maintenance materials 7,448 7,256 Other 1,943 994 Total $ 98,876 $ 93,149 Revenue Recognition. As a result of the adoption of ASU No. 2014-09, Revenue from Contracts with Customers and related amendments (collectively " Topic 606 " ) on January 1, 2018, the Company has changes to its accounting policy for revenue recognition (also see Note 2). Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for the performance obligations. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Excise taxes that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer are excluded from revenue. Revenue is recognized for the sale of products at the point in time finished products are delivered to the customer in accordance with shipping terms. This is a faithful depiction of the satisfaction of the performance obligation because, at that point control passes to the customer, the customer has legal title and the risk and rewards of ownership have transferred, and the customer has present obligation to pay. The Company’s distillery products segment routinely enters into bill and hold arrangements, whereby the Company produces and sells unaged distillate to customers, and the product is subsequently barreled at the customer’s request and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers. Even though the unaged distillate remains in the Company's possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in bill and hold transactions when: customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product, the risk and rewards of ownership have transferred to the customer, and all the following additional bill and hold criteria have been met: the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer. Warehouse service revenue is recognized over the time that warehouse services are rendered and as they are rendered. This is a faithful depiction of the satisfaction of the performance obligation because control of the aging products has already passed to the customer and there are no additional performance activities required by the Company, except as requested by the customer. The performance of the service activities, as requested, are invoiced as they are satisfied and revenue is concurrently recognized. The Company applies the 'as-invoiced' practical expedient for its warehouse services, permitting it to recognize revenue in the amount to which it has a right to invoice the customer since that amount corresponds directly with the value to the customer of the Company's performance completed to date. 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. EPS. Basic and diluted EPS 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. 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 $32,683 and $24,838 at March 31, 2018 and December 31, 2017 , respectively. The financial statement carrying value of total debt was $32,235 (including unamortized loan fees) and $24,554 (including unamortized loan fees) at March 31, 2018 and December 31, 2017 , respectively. These fair values are considered Level 2 under the fair value hierarchy. Recent Accounting Pronouncements. In February 2018, the FASB issued Accounting Standards Update ("ASU") 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is evaluating the effect that ASU 2018-02 will have on its consolidated financial statements and related disclosures. In January 2018, the FASB issued ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842 , which clarifies that land easements are in the scope of ASU 2016-02, Leases , and provides transition relief. The effective date and transition requirements of ASU 2018-01 are the same as the effective date and transition requirements of ASU 2016-02. The Company is evaluating the effect that ASU 2018-01 will have on its consolidated financial statements and related disclosures in conjunction with ASU 2016-02. ASU Transition Updates. 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 was effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company adopted ASU 2017-07 for the quarter ended March 31, 2018 with immaterial impact on its financial results and presentation. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include cash and cash equivalents that have restrictions on withdrawal or use in total cash and cash equivalents on the statement of cash flows. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 for the quarter ended March 31, 2018 and has determined that there is no impact to the presentation of the condensed consolidated statements of cash flows because the Company had no restricted cash for the quarters ended March 31, 2018 and 2017 . In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addresses eight classification issues related to the statement of cash flows: Debt prepayment or debt extinguishment costs; Settlement of zero coupon bonds; Contingent consideration payments made after a business combination; Proceeds from the settlement of insurance claims; Proceeds from the settlement of corporate owned life insurance policies, including bank owned life insurance policies; Distributions received from equity method investees; Beneficial interests in securitization transactions; and Separately identifiable cash flows and application of the predominance principle. This ASU was effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-15 for the quarter ended March 31, 2018 and has determined that there is no impact to the presentation of the condensed consolidated statements of cash flows for the quarters ended March 31, 2018 and 2017 . 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 public business entities for 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 March 31, 2018 , the Company had various machinery and equipment operating leases, as well as operating leases for 251 rail cars and one office space. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue | Revenue. Adoption of Topic 606 , Revenue from Contracts with Customers On January 1, 2018, the Company adopted ASU No. 2014-09, Revenue from Contracts with Customers and related amendments (collectively " Topic 606 " ) using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Financial results for reporting periods beginning after January 1, 2018 are presented under Topic 606 , while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Accounting Standards Codification 605, Revenue Recognition ("ASC 605") . The Company has completed its evaluation of the impact of Topic 606 and concluded that there is no impact to the financial statements as a result of adopting Topic 606 . The Company recorded no adjustment to opening retained earnings as of January 1, 2018 related to the transition from ASC 605 to Topic 606 and there are no differences to disclose to reconcile financial statement activity as reported under Topic 606 to ASC 605 for the quarter ended March 31, 2018 . Disaggregation of Revenue. The following table presents the Company's revenues disaggregated by segment and major products and services. NET SALES Quarter Ended March 31, 2018 2017 (a) Distillery Products Premium beverage alcohol $ 44,071 $ 45,640 Industrial alcohol 19,344 19,123 Food grade alcohol $ 63,415 $ 64,763 Fuel grade alcohol 1,863 1,642 Distillers feed and related co-products 6,224 4,922 Warehouse services 2,875 2,623 Total distillery products $ 74,377 $ 73,950 Ingredient Solutions Specialty wheat starches $ 6,801 $ 6,407 Specialty wheat proteins 4,736 4,378 Commodity wheat starch 2,042 2,088 Commodity wheat protein — 346 Total ingredient solutions $ 13,579 $ 13,219 Total net sales $ 87,956 $ 87,169 (a) As noted above, prior period amounts were not adjusted upon adoption of Topic 606. The following table presents the Company's revenues disaggregated by segment and timing of revenue recognition. NET SALES Quarter Ended March 31, 2018 2017 (a) Distillery Products Products transferred at a point in time $ 71,502 $ 71,327 Services transferred over time 2,875 2,623 Total distillery products $ 74,377 $ 73,950 Ingredient Solutions Products transferred at a point in time $ 13,579 $ 13,219 Total net sales $ 87,956 $ 87,169 (a) As noted above, prior period amounts were not adjusted upon adoption of Topic 606. The Company generates revenues from the distillery products segment by the sale of products and by providing warehouse services related to the storage and aging of customer products. The Company generates revenues from the ingredient solutions segment by the sale of products. Contracts with customers in both segments include a single performance obligation (either the sale of products or the provision of warehouse services). Certain customers may receive volume rebates or discounts, which are accounted for as variable consideration. The Company estimates these amounts based on the expected amount to be provided to customers and reduces revenues recognized. The Company believes there will be no significant changes to the estimates of variable consideration. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments. As of March 31, 2018 , the Company had no investments accounted for using the equity method of accounting. Until July 3, 2017, the Company had a 30 percent interest in Illinois Corn Processing ("ICP"), which manufactured alcohol for fuel, industrial and beverage applications. The Company completed the sale of its equity ownership interest in ICP to Pacific Ethanol Central, LLC, on July 3, 2017, consistent with an Agreement and Plan of Merger entered into on June 26, 2017. Summary Financial Information (unaudited). Condensed financial information related to the Company’s non-consolidated equity method investment in ICP for the quarter ended March 31, 2017 is shown below. Quarter Ended March 31, 2017 ICP’s Operating results: Net sales (a) $ 38,385 Cost of sales and expenses (b) 36,814 Net income $ 1,571 (a) Includes related party sales to MGPI of $8,657 for the quarter ended March 31, 2017 . (b) Includes depreciation and amortization of $858 for the quarter ended March 31, 2017 . The Company’s equity method investment earnings for the quarter ended March 31, 2017 , based on unaudited financial statements, was $471 . |
Corporate Borrowings
Corporate Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Corporate Borrowings | Corporate Borrowings. Indebtedness Outstanding: Description (a) March 31, December 31, Credit Agreement - Revolver, 3.281% (variable rate) due 2022 $ 11,039 $ 3,298 Secured Promissory Note, 3.71% (variable rate) due 2022 1,874 1,966 Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 20,000 20,000 Unamortized loan fees (b) (678 ) (710 ) Total $ 32,235 $ 24,554 Less current maturities of long term debt (375 ) (372 ) Long-term debt $ 31,860 $ 24,182 (a) Interest rates are as of March 31, 2018 . (b) Loan fees are being amortized over the life of the Credit Agreements. Credit Agreements. On August 23, 2017, the Company entered into a credit agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association. The Credit Agreement provides for a $150,000 revolving credit facility. The Company may increase the facility from time to time by an aggregate principal amount of up to $25,000 provided certain conditions are satisfied and at the discretion of the lender. The Credit Agreement matures on August 23, 2022. The Credit Agreement includes certain requirements and covenants, which the Company was in compliance with at March 31, 2018 . As of March 31, 2018 , the Company's total outstanding borrowings under the Credit Agreement were $11,039 leaving $138,961 available. On August 23, 2017, the Company also entered into a Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”) with PGIM, Inc., an affiliate of Prudential Financial, Inc., and certain affiliates of PGIM, Inc. The Note Purchase Agreement provides for the issuance of up to $75,000 of Senior Secured Notes, and the Company issued $20,000 of Senior Secured Notes with a maturity date of August 23, 2027. The Note Purchase Agreement includes certain requirements and covenants, which the Company was in compliance with at March 31, 2018 . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes. On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), resulting in significant modifications to U.S. tax law. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. As of March 31, 2018 , we have not made a measurement period adjustment and the accounting for the Tax Act remains incomplete. Income tax expense for the quarter ended March 31, 2018 was $1,255 , for an effective tax rate for the quarter of 12.3 percent . The effective tax rate differs from the 21 percent federal statutory rate (as lowered by the Tax Act) on pretax income primarily due to ASU 2016-09, Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting and state taxes, including state income tax credits in Indiana and Kansas . Income tax expense for the quarter ended March 31, 2017 was $2,854 , for an effective tax rate of 24.7 percent for the quarter. The effective tax rate differed 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 taxes, including state income tax credits in Indiana and Kansas. |
EPS
EPS | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EPS | EPS. The computations of basic and diluted EPS for the quarters ended March 31, 2018 and 2017 are as follows: Quarter Ended March 31, March 31, Operations: Net income (a) $ 8,927 $ 8,678 Income attributable to participating securities (b) 175 250 Net income attributable to common shareholders $ 8,752 $ 8,428 Share information: Basic and diluted weighted average common shares (c) 16,843,255 16,712,578 Basic and diluted EPS $ 0.52 $ 0.50 (a) Net income attributable to all shareholders. (b) At March 31, 2018 and 2017 , participating securities included 338,375 and 497,491 unvested restricted stock units ("RSUs"), respectively. (c) Under the two-class method, weighted average common shares at March 31, 2018 and 2017 , exclude unvested, participating securities of 338,375 and 497,491 , respectively. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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. 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 Environmental Protection Agency ("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 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, but negotiations have paused pending resolution of the EPA's criminal investigation. Since the Company expects a negotiated resolution of the EPA civil case and EPA-proposed civil penalties are not material to the quarter ended March 31, 2018 , the Company has not included an accrual in its results. A portion, or all, of the settled penalty amount may be covered by insurance. |
Employee and Non-Employee Benef
Employee and Non-Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [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 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 March 31, 2018 , 319,301 RSUs had been granted of the 1,500,000 shares approved under the 2014 Plan. 65,793 shares had been granted of the 300,000 shares approved under the Directors' Plan. As of March 31, 2018 , 338,375 unvested RSUs were outstanding under the Company’s long-term incentive plans. |
Operating Segments
Operating Segments | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Operating Segments | Operating Segments. At March 31, 2018 and 2017 , the Company had two segments: distillery products and ingredient solutions. The distillery products segment consists of food grade alcohol and distillery co-products, such as distillers feed (commonly called dried distillers grain in the industry) and fuel grade alcohol. The distillery products segment also includes warehouse services, including barrel put away, storage, retrieval, and blending services. Ingredient solutions consists of specialty starches and proteins and commodity starches and proteins. Operating profit for each segment is based on net sales less identifiable operating expenses. Non-direct SG&A, interest expense, earnings from the Company's equity method investments until sold on July 3, 2017, other special charges, and other general miscellaneous expenses are excluded from segment operations and are 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 March 31, March 31, Net Sales to Customers Distillery products $ 74,377 $ 73,950 Ingredient solutions 13,579 13,219 Total 87,956 87,169 Gross Profit Distillery products 15,870 16,615 Ingredient solutions 3,081 2,426 Total 18,951 19,041 Depreciation and Amortization Distillery products 2,241 2,046 Ingredient solutions 434 408 Corporate 254 284 Total 2,929 2,738 Income (loss) before Income Taxes Distillery products 14,177 15,518 Ingredient solutions 2,424 1,804 Corporate (6,419 ) (5,790 ) Total $ 10,182 $ 11,532 The following table allocates assets to each segment: As of March 31, 2018 As of December 31, 2017 Identifiable Assets Distillery products $ 196,632 $ 191,321 Ingredient solutions 30,904 28,950 Corporate 17,675 20,057 Total $ 245,211 $ 240,328 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events. On April 30, 2018, the Board of Directors declared a quarterly dividend payable to stockholders of record as of May 16, 2018, of the Company's Common Stock, and a dividend equivalent payable to holders of RSUs as of May 16, 2018, of $.08 per share and per unit, payable on June 1, 2018. |
Accounting Policies and Basis19
Accounting Policies and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 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, 2017 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. |
Revenue Recognition | Revenue Recognition. As a result of the adoption of ASU No. 2014-09, Revenue from Contracts with Customers and related amendments (collectively " Topic 606 " ) on January 1, 2018, the Company has changes to its accounting policy for revenue recognition (also see Note 2). Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for the performance obligations. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is one year or less. Excise taxes that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer are excluded from revenue. Revenue is recognized for the sale of products at the point in time finished products are delivered to the customer in accordance with shipping terms. This is a faithful depiction of the satisfaction of the performance obligation because, at that point control passes to the customer, the customer has legal title and the risk and rewards of ownership have transferred, and the customer has present obligation to pay. The Company’s distillery products segment routinely enters into bill and hold arrangements, whereby the Company produces and sells unaged distillate to customers, and the product is subsequently barreled at the customer’s request and warehoused at a Company location for an extended period of time in accordance with directions received from the Company’s customers. Even though the unaged distillate remains in the Company's possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in bill and hold transactions when: customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product, the risk and rewards of ownership have transferred to the customer, and all the following additional bill and hold criteria have been met: the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer. Warehouse service revenue is recognized over the time that warehouse services are rendered and as they are rendered. This is a faithful depiction of the satisfaction of the performance obligation because control of the aging products has already passed to the customer and there are no additional performance activities required by the Company, except as requested by the customer. The performance of the service activities, as requested, are invoiced as they are satisfied and revenue is concurrently recognized. The Company applies the 'as-invoiced' practical expedient for its warehouse services, permitting it to recognize revenue in the amount to which it has a right to invoice the customer since that amount corresponds directly with the value to the customer of the Company's performance completed to date. |
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. |
EPS | EPS. Basic and diluted EPS 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. |
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 and ASU Transition Updates | Recent Accounting Pronouncements. In February 2018, the FASB issued Accounting Standards Update ("ASU") 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This ASU is effective for all entities for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The Company is evaluating the effect that ASU 2018-02 will have on its consolidated financial statements and related disclosures. In January 2018, the FASB issued ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842 , which clarifies that land easements are in the scope of ASU 2016-02, Leases , and provides transition relief. The effective date and transition requirements of ASU 2018-01 are the same as the effective date and transition requirements of ASU 2016-02. The Company is evaluating the effect that ASU 2018-01 will have on its consolidated financial statements and related disclosures in conjunction with ASU 2016-02. ASU Transition Updates. 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 was effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company adopted ASU 2017-07 for the quarter ended March 31, 2018 with immaterial impact on its financial results and presentation. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include cash and cash equivalents that have restrictions on withdrawal or use in total cash and cash equivalents on the statement of cash flows. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-18 for the quarter ended March 31, 2018 and has determined that there is no impact to the presentation of the condensed consolidated statements of cash flows because the Company had no restricted cash for the quarters ended March 31, 2018 and 2017 . In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addresses eight classification issues related to the statement of cash flows: Debt prepayment or debt extinguishment costs; Settlement of zero coupon bonds; Contingent consideration payments made after a business combination; Proceeds from the settlement of insurance claims; Proceeds from the settlement of corporate owned life insurance policies, including bank owned life insurance policies; Distributions received from equity method investees; Beneficial interests in securitization transactions; and Separately identifiable cash flows and application of the predominance principle. This ASU was effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The Company adopted ASU 2016-15 for the quarter ended March 31, 2018 and has determined that there is no impact to the presentation of the condensed consolidated statements of cash flows for the quarters ended March 31, 2018 and 2017 . 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 public business entities for 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 March 31, 2018 , the Company had various machinery and equipment operating leases, as well as operating leases for 251 rail cars and one office space. |
Accounting Policies and Basis20
Accounting Policies and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | Inventory consists of the following: March 31, December 31, Finished goods $ 14,905 $ 13,284 Barreled distillate (bourbon and whiskey) 67,932 65,726 Raw materials 5,282 3,954 Work in process 1,366 1,935 Maintenance materials 7,448 7,256 Other 1,943 994 Total $ 98,876 $ 93,149 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Revenues Disaggregated | The following table presents the Company's revenues disaggregated by segment and major products and services. NET SALES Quarter Ended March 31, 2018 2017 (a) Distillery Products Premium beverage alcohol $ 44,071 $ 45,640 Industrial alcohol 19,344 19,123 Food grade alcohol $ 63,415 $ 64,763 Fuel grade alcohol 1,863 1,642 Distillers feed and related co-products 6,224 4,922 Warehouse services 2,875 2,623 Total distillery products $ 74,377 $ 73,950 Ingredient Solutions Specialty wheat starches $ 6,801 $ 6,407 Specialty wheat proteins 4,736 4,378 Commodity wheat starch 2,042 2,088 Commodity wheat protein — 346 Total ingredient solutions $ 13,579 $ 13,219 Total net sales $ 87,956 $ 87,169 (a) As noted above, prior period amounts were not adjusted upon adoption of Topic 606. The following table presents the Company's revenues disaggregated by segment and timing of revenue recognition. NET SALES Quarter Ended March 31, 2018 2017 (a) Distillery Products Products transferred at a point in time $ 71,502 $ 71,327 Services transferred over time 2,875 2,623 Total distillery products $ 74,377 $ 73,950 Ingredient Solutions Products transferred at a point in time $ 13,579 $ 13,219 Total net sales $ 87,956 $ 87,169 (a) As noted above, prior period amounts were not adjusted upon adoption of Topic 606. |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 for the quarter ended March 31, 2017 is shown below. Quarter Ended March 31, 2017 ICP’s Operating results: Net sales (a) $ 38,385 Cost of sales and expenses (b) 36,814 Net income $ 1,571 (a) Includes related party sales to MGPI of $8,657 for the quarter ended March 31, 2017 . (b) Includes depreciation and amortization of $858 for the quarter ended March 31, 2017 . |
Corporate Borrowings (Tables)
Corporate Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Indebtedness Outstanding: Description (a) March 31, December 31, Credit Agreement - Revolver, 3.281% (variable rate) due 2022 $ 11,039 $ 3,298 Secured Promissory Note, 3.71% (variable rate) due 2022 1,874 1,966 Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 20,000 20,000 Unamortized loan fees (b) (678 ) (710 ) Total $ 32,235 $ 24,554 Less current maturities of long term debt (375 ) (372 ) Long-term debt $ 31,860 $ 24,182 (a) Interest rates are as of March 31, 2018 . (b) Loan fees are being amortized over the life of the Credit Agreements. |
EPS (Tables)
EPS (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted EPS for the quarters ended March 31, 2018 and 2017 are as follows: Quarter Ended March 31, March 31, Operations: Net income (a) $ 8,927 $ 8,678 Income attributable to participating securities (b) 175 250 Net income attributable to common shareholders $ 8,752 $ 8,428 Share information: Basic and diluted weighted average common shares (c) 16,843,255 16,712,578 Basic and diluted EPS $ 0.52 $ 0.50 (a) Net income attributable to all shareholders. (b) At March 31, 2018 and 2017 , participating securities included 338,375 and 497,491 unvested restricted stock units ("RSUs"), respectively. (c) Under the two-class method, weighted average common shares at March 31, 2018 and 2017 , exclude unvested, participating securities of 338,375 and 497,491 , respectively. |
Operating Segments (Tables)
Operating Segments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Quarter Ended March 31, March 31, Net Sales to Customers Distillery products $ 74,377 $ 73,950 Ingredient solutions 13,579 13,219 Total 87,956 87,169 Gross Profit Distillery products 15,870 16,615 Ingredient solutions 3,081 2,426 Total 18,951 19,041 Depreciation and Amortization Distillery products 2,241 2,046 Ingredient solutions 434 408 Corporate 254 284 Total 2,929 2,738 Income (loss) before Income Taxes Distillery products 14,177 15,518 Ingredient solutions 2,424 1,804 Corporate (6,419 ) (5,790 ) Total $ 10,182 $ 11,532 The following table allocates assets to each segment: As of March 31, 2018 As of December 31, 2017 Identifiable Assets Distillery products $ 196,632 $ 191,321 Ingredient solutions 30,904 28,950 Corporate 17,675 20,057 Total $ 245,211 $ 240,328 |
Accounting Policies and Basis26
Accounting Policies and Basis of Presentation - Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Finished goods | $ 14,905 | $ 13,284 |
Barreled distillate (bourbon and whiskey) | 67,932 | 65,726 |
Raw materials | 5,282 | 3,954 |
Work in process | 1,366 | 1,935 |
Maintenance materials | 7,448 | 7,256 |
Other | 1,943 | 994 |
Total | $ 98,876 | $ 93,149 |
Accounting Policies and Basis27
Accounting Policies and Basis of Presentation - Narrative (Details) $ in Thousands | Mar. 31, 2018USD ($)rail_caroffice_space | Dec. 31, 2017USD ($) |
Accounting Policies [Abstract] | ||
Debt instrument, fair value disclosure | $ 32,683 | $ 24,838 |
Long-term debt | $ 32,235 | $ 24,554 |
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 | 251 | |
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 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 87,956 | $ 87,169 |
Distillery products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 74,377 | 73,950 |
Distillery products | Products transferred at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 71,502 | 71,327 |
Distillery products | Services transferred over time | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,875 | 2,623 |
Ingredient solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 13,579 | 13,219 |
Food grade alcohol | Distillery products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 63,415 | 64,763 |
Premium beverage alcohol | Distillery products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 44,071 | 45,640 |
Industrial alcohol | Distillery products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 19,344 | 19,123 |
Fuel grade alcohol | Distillery products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,863 | 1,642 |
Distillers feed and related co-products | Distillery products | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 6,224 | 4,922 |
Specialty wheat starches | Ingredient solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 6,801 | 6,407 |
Specialty wheat proteins | Ingredient solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 4,736 | 4,378 |
Commodity wheat starch | Ingredient solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,042 | 2,088 |
Commodity wheat protein | Ingredient solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 0 | $ 346 |
Equity Method Investments - Nar
Equity Method Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jul. 03, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment earnings | $ 0 | $ 471 | |
ICP | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method ownership percentage | 30.00% | ||
Related party sales to MGPI | 8,657 | ||
Depreciation and amortization | 858 | ||
Equity method investment earnings | $ 471 |
Equity Method Investments - Ope
Equity Method Investments - Operating Results (Details) - ICP $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
ICP’s Operating results: | |
Net sales | $ 38,385 |
Cost of sales and expenses | 36,814 |
Net income | $ 1,571 |
Corporate Borrowings - Indebted
Corporate Borrowings - Indebtedness Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Unamortized loan fees | $ (678) | $ (710) |
Total | 32,235 | 24,554 |
Less current maturities of long term debt | (375) | (372) |
Long-term debt | 31,860 | 24,182 |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Credit Agreement - Revolver, 3.281% (variable rate) due 2022 | $ 11,039 | 3,298 |
Credit agreement, interest rate | 3.281% | |
Secured Promissory Note, 3.71% (variable rate) due 2022 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Secured Promissory Note, 3.71% (variable rate) due 2022 | $ 1,874 | 1,966 |
Interest rate during period | 3.71% | |
Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Prudential Note Purchase Agreement, 3.53% (fixed rate) due 2027 | $ 20,000 | $ 20,000 |
Fixed interest rate | 3.53% |
Corporate Borrowings - Narrativ
Corporate Borrowings - Narrative (Details) - USD ($) | Aug. 23, 2017 | Mar. 31, 2018 | Dec. 31, 2017 |
Credit Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 150,000,000 | ||
Contingent increase in borrowing capacity | 25,000,000 | ||
Outstanding borrowings under credit facility | $ 11,039,000 | $ 3,298,000 | |
Credit facility, remaining borrowing capacity | $ 138,961,000 | ||
Note Purchase Agreement | Senior Notes | |||
Debt Instrument [Line Items] | |||
Term loan face value | 75,000,000 | ||
Proceeds from issuance of debt | $ 20,000,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 1,255 | $ 2,854 |
Effective tax rate | 12.30% | 24.70% |
EPS - The Computations of Basic
EPS - The Computations of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operations: | ||
Net income | $ 8,927 | $ 8,678 |
Income attributable to participating securities | 175 | 250 |
Net income attributable to common shareholders and used in EPS calculation | $ 8,752 | $ 8,428 |
Share information: | ||
Basic and diluted weighted average common shares (in shares) | 16,843,255 | 16,712,578 |
Basic and diluted EPS (in dollars per share) | $ 0.52 | $ 0.50 |
EPS - Narrative (Details)
EPS - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restricted Stock Units (RSUs) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Participating securities (in shares) | 338,375 | 497,491 |
Restricted Stock and Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Unvested awards (in shares) | 338,375 | 497,491 |
Contingencies (Details)
Contingencies (Details) - USD ($) | Aug. 01, 2017 | Apr. 19, 2017 | Oct. 21, 2016 |
Commitments and Contingencies Disclosure [Abstract] | |||
Insurance deductible | $ 250,000 | ||
Penalty issued by OSHA | $ 138,000 | ||
Payments for legal settlements | $ 75,000 | ||
Civil penalties | $ 250,000 |
Employee and Non-Employee Ben37
Employee and Non-Employee Benefit Plans (Details) | 3 Months Ended | |
Mar. 31, 2018planshares | Mar. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of active equity-based compensation plans | plan | 2 | |
The 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares approved (in shares) | 1,500,000 | |
The Directors' Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares approved (in shares) | 300,000 | |
Restricted Stock Units (RSUs) | The 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in period (in shares) | 319,301 | |
Restricted Stock Units (RSUs) | The Directors' Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants in period (in shares) | 65,793 | |
Restricted Stock and Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unvested awards (in shares) | 338,375 | 497,491 |
Operating Segments (Details)
Operating Segments (Details) - segment | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting [Abstract] | ||
Number of reportable segments | 2 | 2 |
Operating Segments - Operating
Operating Segments - Operating Profit (Loss) for Each Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Sales to Customers | ||
Net Sales to Customers | $ 87,956 | $ 87,169 |
Gross Profit | ||
Gross Profit | 18,951 | 19,041 |
Depreciation and Amortization | ||
Depreciation and Amortization | 2,929 | 2,738 |
Income (loss) before Income Taxes | ||
Income (loss) before Income Taxes | 10,182 | 11,532 |
Operating Segments | Distillery products | ||
Net Sales to Customers | ||
Net Sales to Customers | 74,377 | 73,950 |
Gross Profit | ||
Gross Profit | 15,870 | 16,615 |
Depreciation and Amortization | ||
Depreciation and Amortization | 2,241 | 2,046 |
Income (loss) before Income Taxes | ||
Income (loss) before Income Taxes | 14,177 | 15,518 |
Operating Segments | Ingredient solutions | ||
Net Sales to Customers | ||
Net Sales to Customers | 13,579 | 13,219 |
Gross Profit | ||
Gross Profit | 3,081 | 2,426 |
Depreciation and Amortization | ||
Depreciation and Amortization | 434 | 408 |
Income (loss) before Income Taxes | ||
Income (loss) before Income Taxes | 2,424 | 1,804 |
Corporate | ||
Depreciation and Amortization | ||
Depreciation and Amortization | 254 | 284 |
Income (loss) before Income Taxes | ||
Income (loss) before Income Taxes | $ (6,419) | $ (5,790) |
Operating Segments - Identifiab
Operating Segments - Identifiable Assets for Each Segment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 245,211 | $ 240,328 |
Operating Segments | Distillery products | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 196,632 | 191,321 |
Operating Segments | Ingredient solutions | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | 30,904 | 28,950 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Identifiable Assets | $ 17,675 | $ 20,057 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 30, 2018$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividend payable (in dollars per share) | $ 0.08 |