ATCHISON, KAS. — Net income at MGP Ingredients, Inc. increased 5% in the fiscal year ended Dec. 31, 2019, climbing to $38,540,000, equal to $2.27 per share on the common stock, from $36,576,000, or $2.17 per share, in fiscal 2018. Net sales, meanwhile, decreased 3.6% to $362,745,000 from $376,089,000.
During the fourth quarter, net income totaled $12,865,000, or 76c per share, up 11% from $11,598,000, or 69c per share, in the same period a year ago. Net sales were $92,463,000, down 12% from $104,850,000.
Gross profit in the Ingredient Solutions segment decreased to $10.6 million in fiscal 2019 from $11.8 million in fiscal 2018, while sales increased 5.6% to $65.5 million. During the fourth quarter, gross profit in the segment totaled $3.3 million, up from $2.6 million in the same period a year ago. Net sales during the quarter increased 6% to $17.1 million.
“We finished 2019 with great momentum with the fourth quarter being one of our strongest ever,” Augustus C. Griffin, president and chief executive officer, said during a Feb. 26 conference call with analysts. “We faced two significant challenges this year. The first was the tough comparison created by the loss of a large customer for our textured special wheat protein product line at the end of 2018.
“We have now completed cycling that comparison and have added new customers with a variety of applications seeking to leverage our plant-based protein. As evidence of our progress in building this customer base, we saw double-digit volume growth on this product line in the fourth quarter, and we expect to continue rebuilding this business in 2020.
“The second was the uncertainty around F.D.A. approval of our Fibersym RW and FiberRite RW product lines as a source of dietary fiber. This issue was resolved in the early part of 2019, and we are now seeing increased customer orders for these product lines. Sales were up strong double-digit growth — double digit for the fourth quarter and up nicely for the full year.”
Mr. Griffin said MGPI’s Ingredient Solutions product offerings continue to be aligned with strong consumer trends, including plant-based proteins, high-fiber, high-protein, non-G.M.O. and clean label. He also said the company continues to be effective in recruiting new business.
“Overall, both of our business segments continue to benefit from favorable consumer trends, and our strategic plan has us well positioned to fully capture the potential these trends offer,” he said.
MGPI announced a new five-year, $300 million revolving credit facility with a syndicate of lenders led by Wells Fargo. The new facility replaces the company’s $150 million credit facility and increases its credit availability by $150 million, said Brandon Gall, vice-president of finance and chief financial officer.
Mr. Gall said 2020 sales growth is projected in the low- to mid-single digit percentage range versus 2019, and 2020 gross margins are expected to increase modestly as compared with 2019. MGPI expects growth in operating income of 2% to 7% in 2020, he said.