MGP Ingredients expands credit facility to $500 million

ATCHISON, Kan. - MGP Ingredients, Inc. (NASDAQ:MGPI), a prominent provider of distilled spirits and specialty food ingredients with a market capitalization of $628 million, has announced the successful refinancing of its revolving credit facility and the amendment of its note purchase and private shelf agreement. The company has increased its revolving credit facility from $400 million to $500 million and extended the maturity date from 2026 to 2030. The interest rates applicable to the facility remain unchanged. According to InvestingPro analysis, the company maintains strong liquidity with a current ratio of 5.91, and its cash flows sufficiently cover interest payments, supporting this refinancing decision.

The amended credit agreement also includes an expanded accordion feature, which now allows for an increase from $100 million to $200 million, subject to certain conditions. Furthermore, MGP Ingredients has extended its shelf for issuing up to $250 million of senior secured promissory notes until 2028.

Mark Davidson, VP, Corporate Controller, and Head of Treasury at MGP Ingredients, expressed satisfaction with the refinancing outcome. He stated that the ability to upsize and extend the maturity of their credit facility while maintaining attractive interest rates reflects the company’s strong balance sheet and cash flows. Davidson believes that this financial maneuver enhances MGP Ingredients’ ability to pursue strategic objectives and potentially improve shareholder returns. The company has demonstrated commitment to shareholder value, maintaining dividend payments for 16 consecutive years, as noted by InvestingPro analysts, who currently identify the stock as undervalued based on their Fair Value analysis.

The credit facility is managed by a syndicate of lenders with Wells Fargo Bank, N.A. at the helm. The note purchase and private shelf agreement involve various affiliates of PGIM, Inc., a subsidiary of Prudential.

MGP Ingredients has established itself as a leader in the spirits industry, with a portfolio that includes award-winning brands like Penelope, Rebel, Remus, and Yellowstone bourbons, as well as El Mayor Tequila. The company operates distilleries in Indiana and Kentucky, a tequila distillery in Mexico, and bottling operations in Missouri, Ohio, and Northern Ireland. MGP Ingredients also provides specialty fiber, protein, and starch ingredients for the food industry.

This financial update is based on a press release statement from MGP Ingredients, Inc. The company’s forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations. Factors such as changes in consumer preferences, market conditions, and regulatory compliance may impact the company’s performance. The stock has experienced significant volatility, with a one-year price decline of 63.58%. For comprehensive analysis and additional insights, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence. Investors are advised to consider the detailed risk factors and management discussions available in the company’s SEC filings.

In other recent news, MGP Ingredients reported its fourth-quarter 2024 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $1.56 compared to the forecasted $1.50. Despite a 16% decrease in consolidated sales to $180.8 million, the company maintained strong operational cash flow, achieving a record $102.3 million for the year. MGP Ingredients also announced a significant overhaul of its executive compensation structure, introducing performance stock units (PSUs) with forward-looking financial performance goals and time-vested restricted stock units (RSUs). This revamp aligns executive compensation more closely with company performance and industry standards. Additionally, three members of MGP Ingredients’ Board of Directors plan to sell shares as part of their personal financial strategies. Despite these sales, the directors maintain a significant equity stake, indicating continued confidence in the company’s strategic vision. The company also disclosed a significant non-cash goodwill adjustment, resulting in a net income loss of $42 million. However, MGP Ingredients remains optimistic about its branded spirits and ingredient solutions segments, projecting positive developments for 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.