ATCHISON, KAS. — MGP Ingredients, Inc., in the first quarter ended Sept. 30 sustained a loss of $17,243,000, versus a loss of $353,000 in the same period a year ago. Sales were $99,020,000, up 10% from $87,977 in the same quarter a year ago.
Results during the quarter included an income tax benefit of $6.3 million, which compared with a benefit of $152,000 in the same quarter a year ago.
"Our first quarter looked very similar to our recent fourth quarter, excluding special items," said Tim Newkirk, president and chief executive officer. "The main culprit again was continuing high prices for our principal raw materials, wheat and corn. However, a closer review of our results shows that we achieved significant sales growth in food grade alcohol products, as well as in some key categories in specialty ingredients. These opportunities represent the future of MGPI. To realize our true long-term profit potential, we continue to take additional steps to strengthen the organization. The latest of these include lowering our operating costs through the restructuring of our business with greater focus on those areas which can generate the highest returns while also further reducing risk across the enterprise."
Mr. Newkirk said MGPI is implementing a business transformation program that is expected to bring measurable rewards over the long term. As part of the effort, the company has exited underperforming areas and shifted focus to its core strengths and growth strategies.
"These strategies are centered on the production and commercialization of our higher margin products," he said. "As a result, we are working to improve the value of what we do by retaining those parts of our business in which we are competitively advantaged. We are among the best at applying grain science to create customer-oriented formulations for our specialty ingredients, specifically value-added wheat proteins and starches, while also strengthening our role as a leading provider of high quality, world class alcohol products."
In its Ingredient Solution segment, MGPI sustained an operating loss of $5,389,000 in the quarter, versus pre-tax income of $2,107,000 during the same period last year. Net sales were $25,897,000, up 16%.
MGPI said sales of specialty ingredients, consisting of specialty proteins and specialty starches, rose by $3.7 million, or 27%, during the quarter. Sales of vital wheat gluten, meanwhile, decreased by $1 million, or 13%.
Distillery Products suffered a pre-tax loss in the first quarter of fiscal 2009 of $12,926,000, which compared with pre-tax income of $2,408,000 in the same period a year ago. Net sales were $71,382,000, up 11%.