(Mark One) | ||
X |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Kansas
|
48-0531200
|
(State or Other Jurisdiction
|
(I.R.S. Employer
|
of Incorporation or Organization)
|
Identification No.)
|
100 Commercial Street, Box 130, Atchison, Kansas
|
66002
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Stock, no par value
|
NASDAQ Global Select Market
|
|
(1)
|
Portions of the MGP Ingredients, Inc. Proxy Statement for the Annual Meeting of Stockholders to be held on May 23, 2013 are incorporated by reference into Part III of this report to the extent set forth herein.
|
PRODUCT GROUP SALES
|
||||||||||||||||||||||||
Year Ended
|
Six Months Ended
|
Year Ended
|
||||||||||||||||||||||
December 31, 2012
|
December 31, 2011
|
June 30, 2011
|
||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||
Distillery Products:
|
||||||||||||||||||||||||
Food grade Alcohol
|
$ | 224,323 | 67.1 | % | $ | 98,358 | 67.2 | % | $ | 157,486 | 63.5 | % | ||||||||||||
Distillers Grain and related
Co-products
|
40,739 | 12.2 | % | 14,170 | 9.7 | % | 20,642 | 8.3 | % | |||||||||||||||
Fuel grade Alcohol
|
2,555 | 0.8 | % | 5,909 | 4.0 | % | 10,865 | 4.4 | % | |||||||||||||||
Warehouse revenue
|
9,073 | 2.7 | % | - | - | - | - | |||||||||||||||||
Total Distillery Products
|
$ | 276,690 | 82.8 | % | $ | 118,437 | 80.9 | % | $ | 188,993 | 76.2 | % | ||||||||||||
Ingredient Solutions:
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Specialty Starches
|
$ | 26,393 | 7.9 | % | $ | 15,557 | 10.6 | % | $ | 29,459 | 11.9 | % | ||||||||||||
Specialty Proteins
|
19,947 | 6.0 | % | 9,853 | 6.7 | % | 20,918 | 8.4 | % | |||||||||||||||
Commodity Wheat Starch
|
9,027 | 2.7 | % | 2,065 | 1.4 | % | 7,228 | 2.9 | % | |||||||||||||||
Vital Wheat Gluten
|
1,121 | 0.3 | % | 121 | 0.1 | % | 160 | 0.1 | % | |||||||||||||||
Total Ingredients
|
$ | 56,488 | 16.9 | % | $ | 27,596 | 18.8 | % | $ | 57,765 | 23.3 | % | ||||||||||||
Other Products:
|
$ | 1,157 | 0.3 | % | $ | 444 | 0.3 | % | $ | 1,157 | 0.5 | % | ||||||||||||
Net Sales
|
$ | 334,335 | 100.0 | % | $ | 146,477 | 100.0 | % | $ | 247,915 | 100.0 | % |
·
|
Fibersym
®
Resistant Starch series.
These starches serve as a convenient and rich source of dietary fiber. Unlike traditional fiber sources like bran, our resistant starches possess a clean, white color and neutral flavor that allow food formulators to create a wide range of both traditional and non-traditional fiber enhanced products that are savory in both appearance and taste. Applications include pan breads, pizza crust, flour tortillas, cookies, muffins, pastries and cakes.
|
·
|
FiberRite
®
RW Resistant Starch.
FiberRite
®
RW is a product that boosts dietary fiber levels while also reducing fat and caloric content in such foods as breads, sweet goods, ice cream, yogurt, salad dressings, sandwich spreads and emulsified meats.
|
·
|
Pregel
™
Instant Starch series.
Our Pregel
™
starches perform as an instant thickener in bakery mixes, allowing fruit, nuts and other particles such as chocolate pieces to be uniformly suspended in the finished product. In coating systems, batter pick-up can be controlled for improved yield and consistent product appearance. Additionally, shelf-life can be enhanced due to improved moisture retention, allowing products to remain tender and soft over an extended storage period.
|
·
|
Midsol
™
Cook-up Starch series.
As a whole, these starches deliver increased thickening, clarity, adhesion and tolerance to high shear, temperature and acidity during food processing. Certain varieties in this line of starches can also be used to reduce sodium content in some food formulations. Such properties are important in products such as soups, sauces, gravies, salad dressings, fillings and batter systems. Processing benefits of these starches also include the ability to control expansion in extruded breakfast cereals. In addition, they provide textural enhancement and moisture management in processed foods, especially during storage under frozen and refrigerated conditions.
|
·
|
Arise
®
series.
Our Arise
®
series of products consists of specialty wheat proteins that increase the freshness and shelf life of frozen, refrigerated and fresh dough products after they are baked. Certain ingredients in this series are also sold for use in the manufacturing of high protein, lower net carbohydrate products.
|
·
|
Wheatex
®
series.
This series consists of texturized wheat proteins made from vital wheat gluten by changing it into a pliable substance through special processing. The resulting solid food product can be further enhanced with flavoring and coloring and reconstituted with water. Texturized wheat proteins are used for meat, poultry and fish product enhancements and/or substitutes. Wheatex
®
mimics the textural characteristics and appearance of meat, fish and poultry products. It is available in a variety of sizes and colors and can be easily formed into patties, links or virtually any other shape the customer requires.
|
·
|
FP
™
series.
The FP™ series of products consists of specialty wheat proteins, each tailored for use in a variety of food applications. These include proteins that can be used to form barriers to fat and moisture penetration to enhance the crispness and improve batter adhesion in fried products, effectively bond other ingredients in vegetarian patties and extended meat products, increase the softness and pliability of flour tortillas, and fortify nutritional drinks.
|
·
|
HWG 2009
™
.
This is a lightly hydrolyzed wheat protein that is rich in peptide-bonded glutamine, an amino acid that counters muscle fatigue brought on by exercise and other physical activities. Applications include nutritional beverages and snack products.
|
·
|
Under the LLC Interest Purchase Agreement, we sold ICP Holdings 50% of the membership interest in ICP. This agreement gave ICP Holdings the option to purchase up to an additional 20% of the membership interest in ICP at any time between the second and fifth anniversary based on an agreed to criteria. As described above, this option was exercised on February 1, 2012.
|
·
|
Pursuant to the Limited Liability Company Agreement, control of day to day operations generally is retained by the members, acting by a majority in interest. Following ICP Holdings' exercise of its option referred to above, ICP Holdings owns 70% of ICP and generally is entitled to control its day to day operations. However, if SEACOR Energy Inc. were to default under its marketing agreement, referred to below, we could assume sole control of ICP's daily operations until the default is cured.
|
|
The Limited Liability Company Agreement also provides for the creation of an advisory board. As a result of ICP Holdings’ option exercise on February 1, 2012, this board consists of two advisors appointed by us and four advisors appointed by ICP Holdings. All actions of the advisory board require majority approval of the entire board, except that any transaction between ICP and ICP Holdings or its affiliates must be approved by the advisors appointed by us.
|
|
The Limited Liability Company Agreement gives either member certain rights to shut down the plant if it operates at a loss. Such rights are conditional in certain instances but absolute if EBITDA losses aggregate $1,500 over any three consecutive quarters or if ICP's net working capital is less than $2,500. ICP Holdings also has the right to shut down the plant if ICP is in default under its loan agreement for failure to pay principal or interest for two months.
|
|
The Limited Liability Company Agreement contains various buy/sell provisions and restrictions on transfer of membership interests. These include buy/sell provisions relating to a member's entire interest that may be exercised by any member at any time.
|
·
|
Under the Marketing Agreement, ICP manufactured and supplied food grade and industrial-use alcohol products for us and we purchased, marketed and sold such products for a marketing fee. The Marketing Agreement provided that we would share margin realized from the sale of the products under the agreement with ICP.
|
Name
|
Age
|
Position
|
Timothy W. Newkirk
|
44
|
President and Chief Executive Officer
|
Donald P. Tracy
|
55
|
Vice President, Finance and Chief Financial Officer
|
Donald G. Coffey, Ph.D.
|
58
|
Executive Vice President, Research, Development and Innovation
|
David E. Dykstra
|
49
|
Vice President, Alcohol Sales and Marketing
|
Michael J. Lasater
|
44
|
National Director of Sales
|
Scott B. Phillips
|
47
|
Vice President, Supply Chain Operations
|
David E. Rindom
|
57
|
Vice President, Human Resources
|
Ody Maningat, Ph.D.
|
58
|
Vice President, Applications Technology and Technical Services
|
Randy M. Schrick
|
62
|
Vice President, Engineering
|
Lori D. Norlen
|
51
|
Corporate Secretary
|
-
|
the difficulty of assimilating and integrating the acquired operations into ourcurrent business;
|
-
|
the difficulty of incorporating the acquired employees into our corporate culture and the possible loss of key employees;
|
-
|
the diversion or dilution of management resources or focus;
|
-
|
the possibility that effective internal controls are not established and maintained at the acquired company;
|
-
|
the risks of entering new product markets with which we have limited experience;
|
-
|
the possibility that the debt and liabilities that we incurred and assumed will prove to be more burdensome that we anticipated; and
|
-
|
the possibility that the acquired operations do not perform as expected or do not increase our profits.
|
·
|
incur additional indebtedness;
|
·
|
pay cash dividends or make distributions;
|
·
|
dispose of assets;
|
·
|
create liens on our assets;
|
·
|
pledge the fixed and real property assets of LDI’s Distillery Business; or
|
·
|
merge or consolidate.
|
|
·
We would have to use a greater portion of our cash flows from operations to pay principal and interest on our debt, which will reduce the funds that would otherwise be available to us for our operations, capital expenditures, future business opportunities and dividends; and
|
|
|
|
·
We would be adversely affected by any increases in prevailing interest rates.
|
Location
|
Purpose
|
Owned or
Leased
|
Plant Area
(in sq. ft.)
|
Tract Area
(in acres)
|
Atchison, Kansas
|
Grain processing, distillery,
warehousing,
and research and quality
control laboratories (Distillery
Products and Ingredient Solutions)
|
Owned
|
494,640
|
26
|
Principal executive office building
(Corporate)
|
Leased
|
18,000
|
1
|
|
Technical Innovation Center
(Ingredient Solutions, Distillery
Products and Other)
|
Leased
|
19,600
|
1
|
|
Lawrenceburg and
Greendale, Indiana
|
Distillery, warehousing, tank farm
and quality control facilities
|
Owned
|
1,458,143
|
43
|
Onaga, Kansas
(1)
|
Production of plant-based
polymers and
wood composites (Other)
|
Owned
|
23,040
|
3
|
Lenexa, Kansas
|
Administrative Office Space
|
Leased
|
3,222
|
1
|
Pekin, Illinois
|
Distillery,
warehousing and quality control
laboratories (Distillery Products)
|
Owned
|
462,926
|
49
|
Sales Price
|
Dividend
|
|||||||||||
High
|
Low
|
Per Share
|
||||||||||
For the Year Ended December 31, 2012
|
||||||||||||
For the Quarter Ended March 31, 2012
|
$ | 6.37 | $ | 5.28 | $ | 0.05 | ||||||
For the Quarter Ended June 30, 2012
|
4.90 | 3.43 | - | |||||||||
For the Quarter Ended September 30, 2012
|
3.68 | 3.30 | - | |||||||||
For the Quarter Ended December 31, 2012
|
3.71 | 3.40 | - | |||||||||
$ | 0.05 | |||||||||||
For the Transition Period from July 1, 2011 to December 31, 2011
|
||||||||||||
For the Quarter Ended September 30, 2011
|
$ | 8.75 | $ | 5.07 | $ | 0.05 | ||||||
For the Quarter Ended December 31, 2011
|
6.82 | 4.27 | - | |||||||||
$ | 0.05 | |||||||||||
For the Year Ended June 30, 2011
|
||||||||||||
For the Quarter Ended September 30, 2010
|
$ | 8.15 | $ | 6.46 | $ | 0.05 | ||||||
For the Quarter Ended December 31, 2010
|
11.90 | 8.14 | - | |||||||||
For the Quarter Ended March 31, 2011
|
11.06 | 7.90 | - | |||||||||
For the Quarter Ended June 30, 2011
|
9.00 | 7.75 | - | |||||||||
$ | 0.05 |
Years Ended
|
Six Months Ended
|
Year Ended
|
||||||||||||||||||
December 31,
2012
|
December 31,
2011
|
December 31,
2011
|
December 31,
2010
|
June 30,
2011
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Distillery Products
|
||||||||||||||||||||
Net Sales
|
$ | 276,690 | $ | 221,730 | $ | 118,437 | $ | 85,700 | $ | 188,993 | ||||||||||
Pre-Tax Income
|
14,874 | 2,997 | 1,234 | 15,426 | 19,720 | |||||||||||||||
Ingredient Solutions
|
||||||||||||||||||||
Net Sales
|
56,488 | 56,774 | 27,596 | 28,587 | 57,765 | |||||||||||||||
Pre-Tax Income
|
5,217 | 1,008 | 1,044 | 1,863 | 1,828 | |||||||||||||||
Other
(1)
|
||||||||||||||||||||
Net Sales
|
1,157 | 960 | 444 | 642 | 1,157 | |||||||||||||||
Pre-Tax Income (Loss)
|
(429 | ) | (658 | ) | (274 | ) | (136 | ) | (521 | ) |
Years Ended
|
Six Months Ended
|
Year Ended
|
||||||||||||||||||
Income (loss) before income taxes
|
December 31,
2012
(1)
|
December 31,
2011
(1)
|
December 31,
2011
(1)
|
December 31,
2010
(1)
|
June 30,
2011
(1)
|
|||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Distillery products
|
$ | 14,874 | $ | 2,997 | $ | 1,234 | $ | 15,426 | $ | 19,720 | ||||||||||
Ingredient solutions
|
5,217 | 1,008 | 1,044 | 1,863 | 1,828 | |||||||||||||||
Other
(2)
|
(429 | ) | (658 | ) | (274 | ) | (136 | ) | (521 | ) | ||||||||||
Corporate
|
(21,775 | ) | (22,288 | ) | (11,422 | ) | (8,875 | ) | (22,272 | ) | ||||||||||
Gain on sale of joint venture interest
|
4,055 | - | ||||||||||||||||||
Impairment of long-lived assets
|
- | (1,301 | ) | (1,301 | ) | - | - | |||||||||||||
Bargain purchase gain, net of tax
|
- | 13,048 | 13,048 | - | - | |||||||||||||||
Total income (loss) before income
Taxes
|
1,942 | (7,194 | ) | 2,329 | 8,278 | (1,245 | ) | |||||||||||||
Provision (benefit) for income taxes
|
318 | (8,272 | ) | (8,306 | ) | 34 | 68 | |||||||||||||
Net income (loss)
|
$ | 1,624 | $ | 1,078 | $ | 10,635 | $ | 8,244 | $ | (1,313 | ) |
(1)
|
Non-direct selling, general and administrative, interest expense, investment income and other general miscellaneous expenses are classified as corporate. In addition, we do not assign or allocate special charges to our operating segments. For purposes of comparative analysis, gain on sale of joint venture interest, loss on impairment of long-lived assets and bargain purchase gain for the year ended December 31, 2012, the year ended December 31, 2011, the six month transition period ended December 31, 2011, the six months ended December 31, 2010 and for the year ended June 30, 2011 have been excluded from our segments.
|
(2)
|
This segment was sold subsequent to December 31, 2012 as further described in
Note 20. Subsequent Events.
|
·
|
higher gross margins,
|
·
|
a temporary production interruption during the quarter ended June 30, 2011, and a lag in the adjustment of alcohol prices we charged to customers compared to rising corn prices,
|
·
|
a $4,055 gain recorded during the quarter ended March 31, 2012 related to the sale of a 20 percent interest in our joint venture, ICP,
|
·
|
a smaller loss from our joint venture operations, and
|
·
|
a favorable swing in earnings on the mark-to-market adjustment for open derivative contracts.
|
Quarter
|
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
Total
|
|||||||||||||||
Year Ended December 31, 2012
(1)(2)
|
||||||||||||||||||||
Net sales
|
$ | 86,344 | $ | 85,534 | $ | 76,107 | $ | 86,350 | $ | 334,335 | ||||||||||
Gross profit
|
5627 | 5,916 | 6,060 | 7,420 | 25,023 | |||||||||||||||
Net income (loss)
|
1,876 | (850 | ) | 418 | 180 | 1,624 | ||||||||||||||
Earnings (loss) per share (diluted)
(5)
|
$ | 0.10 | $ | (0.05 | ) | $ | 0.02 | $ | 0.01 | $ | 0.09 | |||||||||
Six Months Ended December 31, 2011
(3)(4)
|
||||||||||||||||||||
Net sales
|
$ | 76,138 | $ | 70,339 | n/a | n/a | $ | 146,477 | ||||||||||||
Gross profit
|
2,791 | 155 | n/a | n/a | 2,946 | |||||||||||||||
Net income (loss)
|
(5,509 | ) | 16,144 | n/a | n/a | 10,635 | ||||||||||||||
Earnings (loss) per share (diluted)
(5)
|
$ | (0.31 | ) | $ | 0.89 | n/a | n/a | $ | 0.59 | |||||||||||
Year Ended June 30, 2011
|
||||||||||||||||||||
Net sales
|
$ | 56,978 | $ | 57,951 | $ | 64,188 | $ | 68,798 | $ | 247,915 | ||||||||||
Gross profit (loss)
|
10,354 | 8,792 | 6,519 | (2,788 | ) | 22,877 | ||||||||||||||
Net income (loss)
|
5,002 | 3,242 | 701 | (10,258 | ) | (1,313 | ) | |||||||||||||
Earnings (loss) per share (diluted)
(5)
|
$ | 0.28 | $ | 0.18 | $ | 0.04 | $ | (0.58 | ) | $ | (0.07 | ) |
(1)
|
Net income for the first quarter of the year ended December 31, 2012 includes a $4,055 gain on sale of joint venture interest.
|
(2)
|
Net income for the third quarter of the year ended December 31, 2012 includes an $889 gain on sale equipment that was previously impaired.
|
(3)
|
Net income for the second quarter of the transition period ending December 31, 2011 includes a $13,048 bargain purchase gain (net of taxes of $8,336) related to the acquisition of LDI’s Distillery Business.
|
(4)
|
Net income for the second quarter of the transition period ending December 31, 2011 includes a $1,301 impairment loss on long-lived assets.
|
(5)
|
Earnings (loss) per share per quarter does not sum to total earnings (loss) per share due to rounding as well as due to allocation of losses under the two class method during periods of losses. For the quarters ended December 31, 2012 and June 30, 2012, the losses were fully allocated common stock.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Cash and cash equivalents
|
$ | - | $ | 383 | ||||
Working capital
|
48,320 | 18,887 | ||||||
Amounts available under lines of credit
|
18,381 | 23,358 | ||||||
Credit facility, notes payable and long-term debt
|
32,744 | 29,664 | ||||||
Stockholders’ equity
|
86,827 | 84,430 |
Years Ended
|
Six Months Ended
|
Year Ended
|
||||||||||||||||||
December 31,
2012
|
December 31,
2011
|
December 31,
2011
|
December 31,
2010
|
June 30,
2011
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Depreciation and amortization
|
$ | 11,568 | $ | 9,807 | $ | 5,047 | $ | 4,083 | $ | 8,843 | ||||||||||
Capital expenditures
|
9,229 | 21,514 | 12,403 | 3,663 | 12,775 | |||||||||||||||
Cash flows from operations
|
(5,026 | ) | (5,480 | ) | (9,603 | ) | (1,160 | ) | 3,139 |
Years Ended
|
Six Months Ended
|
Year Ended
|
||||||||||||||||||
December 31,
2012
|
December 31,
2011
|
December 31,
2011
|
December 31,
2010
|
June 30,
2011
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Cash flows provided by (used in):
|
||||||||||||||||||||
Operating activities
|
$ | (5,026 | ) | $ | (5,480 | ) | $ | (9,603 | ) | $ | (1,160 | ) | $ | 3,139 | ||||||
Investing activities
|
3,205 | (21,435 | ) | (12,324 | ) | (3,663 | ) | (12,775 | ) | |||||||||||
Financing activities
|
1,438 | 26,826 | 14,707 | (1,074 | ) | 10,870 | ||||||||||||||
Increase in cash and cash equivalents
|
(383 | ) | (89 | ) | (7,220 | ) | (5,897 | ) | 1,234 | |||||||||||
Cash and cash equivalents at beginning of period
|
383 | 472 | 7,603 | 6,369 | 6,369 | |||||||||||||||
Cash and cash equivalents at end of period
|
$ | - | $ | 383 | $ | 383 | $ | 472 | $ | 7,603 |
Years Ended
|
Six Months Ended
|
Year Ended
|
||||||||||||||||||
December 31,
2012
|
December 31,
2011
|
December 31,
2011
|
December 31,
2010
|
June 30,
2011
|
||||||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||||||
Net income (loss)
|
$ | 1,624 | $ | 1,078 | $ | 10,635 | $ | 8,244 | $ | (1,313 | ) | |||||||||
Depreciation and amortization
|
11,568 | 9,807 | 5,047 | 4,083 | 8,843 | |||||||||||||||
Gain on sale of joint venture interest
|
(4,055 | ) | - | - | - | - | ||||||||||||||
Loss (gain) on sale of assets
|
(832 | ) | 117 | 117 | 322 | 322 | ||||||||||||||
Share based compensation
|
969 | 1,119 | 510 | - | 1,164 | |||||||||||||||
Bargain purchase gain, net of tax
|
- | (13,048 | ) | (13,048 | ) | - | - | |||||||||||||
Loss on impairment of assets
|
- | 1,301 | 1,301 | - | - | |||||||||||||||
Deferred income taxes
|
- | (8,340 | ) | (8,340 | ) | - | - | |||||||||||||
Equity in loss (earnings)
|
301 | 2,723 | 551 | (632 | ) | 1,540 | ||||||||||||||
Changes in operating assets and liabilities, net of
acquisition:
|
||||||||||||||||||||
Restricted cash
|
7,593 | (7,115 | ) | (6,577 | ) | 481 | (57 | ) | ||||||||||||
Receivables, net
|
(7,521 | ) | (1,861 | ) | 4,368 | (3,941 | ) | (10,170 | ) | |||||||||||
Inventory
|
(5,450 | ) | (197 | ) | (4,082 | ) | (2,505 | ) | (2,568 | )) | ||||||||||
Prepaid expenses
|
261 | 154 | 244 | 406 | 316 | |||||||||||||||
Refundable income taxes
|
324 | (78 | ) | (37 | ) | 94 | 53 | |||||||||||||
Accounts payable
|
(4,302 | ) | 6,545 | 412 | (226 | ) | 5,907 | |||||||||||||
Accounts payable to affiliate, net
|
(2,159 | ) | 2,405 | 1 | (1,189 | ) | 1,215 | |||||||||||||
Accrued expenses
|
593 | (367 | ) | (650 | ) | (3,394 | ) | (3,111 | ) | |||||||||||
Change in derivatives
|
(2,034 | ) | (220 | ) | (220 | ) | (1,681 | ) | 2,267 | |||||||||||
Deferred credit
|
(630 | ) | (900 | ) | (303 | ) | (284 | ) | (881 | ) | ||||||||||
Accrued retirement health and life insurance
benefits and other noncurrent liabilities
|
(1,081 | ) | (689 | ) | (76 | ) | (46 | ) | (659 | ) | ||||||||||
Other
|
(195 | ) | 2,086 | 544 | (892 | ) | 271 | |||||||||||||
Net cash provided by (used in) operating
activities
|
$ | (5,026 | ) | $ | (5,480 | ) | $ | (9,603 | ) | $ | (1,160 | ) | $ | 3,139 |
·
|
for the year ended December 31, 2012, an increase in receivables of $7,521 compared to an increase of $1,861 for the year ended December 31, 2011;
|
·
|
for the year ended December 31, 2012, an increase in inventory of $5,450 compared to an increase of $197 for the year ended December 31, 2011. The acquisition of the Indiana Distillery, which we did not own a year ago, contributed to the increase in inventory. This is consistent with our strategy of barreling more product;
|
·
|
for the year ended December 31, 2012, a decrease in accounts payable of $4,302 compared to an increase of $6,545 for the year ended December 31, 2011; and
|
·
|
for the year ended December 31, 2012, a decrease in accounts payable to affiliate of $2,159 compared to an increase of $2,405 for the year ended December 31, 2011.
|
·
|
for the six month transition period ended December 31, 2011, a decrease in accounts receivable (net of receivables purchased in our acquisition of LDI’s Distillery Business) generated $4,368 of positive cash flows compared to a $3,941 use of cash for the six months ended December 31, 2011;
|
·
|
for the six month transition period ended December 31, 2011, an increase in accounts payable to affiliate generated $1 of positive cash flows compared to a $1,189 use of cash for the six months ended December 31, 2011; and
|
·
|
a smaller period-over-period decrease in accrued expenses. For the six month transition period ended December 31, 2011, a decrease in accrued expenses (net of accrued expenses assumed from our acquisition of LDI’s Distillery Business) used $650 of cash compared to a $3,394 use of cash for the six months ended December 31, 2010.
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Sales
|
$ | 338,232 | $ | 146,563 | $ | 248,189 | ||||||
Less: excise taxes
|
3,897 | 86 | 274 | |||||||||
Net sales
|
334,335 | 146,477 | 247,915 | |||||||||
Cost of sales (a)
|
309,312 | 143,531 | 225,038 | |||||||||
Gross profit (loss)
|
25,023 | 2,946 | 22,877 | |||||||||
Selling, general and administrative expenses
|
26,536 | 11,417 | 21,157 | |||||||||
Other operating costs and (gains) losses on sale of
Assets
|
(569 | ) | 114 | 1,075 | ||||||||
Impairment of long-lived assets
|
- | 1,301 | - | |||||||||
Bargain purchase gain, net of tax
|
- | (13,048 | ) | - | ||||||||
Income (loss) from operations
|
(944 | ) | 3,162 | 645 | ||||||||
Gain on sale of joint venture interest
|
4,055 | - | - | |||||||||
Other income (expense), net
|
2 | 48 | 8 | |||||||||
Interest expense
|
(870 | ) | (330 | ) | (358 | ) | ||||||
Equity in loss
|
(301 | ) | (551 | ) | (1,540 | ) | ||||||
Income (loss) before income taxes
|
1,942 | 2,329 | (1,245 | ) | ||||||||
Provision (benefit) for income taxes
|
318 | (8,306 | ) | 68 | ||||||||
Net income (loss)
|
$ | 1,624 | $ | 10,635 | $ | (1,313 | ) | |||||
Per Share Data
|
||||||||||||
Total basic earnings (loss) per common share
|
$ | 0.09 | $ | 0.59 | $ | (0.08 | ) | |||||
Total diluted earnings (loss) per common share
|
$ | 0.09 | $ | 0.59 | $ | (0.08 | ) | |||||
Dividends per common share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 |
(a)
|
Includes related party purchases of $49,891 for the year ended December 31, 2012, $40,159 for the six month transition period ended December 31, 2011 and $57,482 for the year ended June 30, 2011.
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Net income (loss)
|
$ | 1,624 | $ | 10,635 | $ | (1,313 | ) | |||||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Company sponsored benefit plans:
|
||||||||||||
Change in pension plans
|
583 | (1,142 | ) | 1,257 | ||||||||
Change in post employment benefits
|
85 | 290 | 1,535 | |||||||||
Change in translation adjustment on
non-consolidated foreign subsidiary
|
7 | (41 | ) | 20 | ||||||||
Commodity derivative activity:
|
||||||||||||
Net losses from cash flow hedges
|
(286 | ) | (1,252 | ) | - | |||||||
Losses from cash flow hedges reclassified to
cost of sales
|
186 | 539 | - | |||||||||
Losses from de-designated cash flow
hedges reclassified to cost of sales
|
27 | - | - | |||||||||
Ineffective portion of cash flow hedges
reclassified to cost of sales
|
200 | 586 | - | |||||||||
Other comprehensive income (loss)
|
802 | (1,020 | ) | 2,812 | ||||||||
Comprehensive income
|
$ | 2,426 | $ | 9,615 | $ | 1,499 |
December 31,
2012
|
December 31,
2011
|
|||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | - | $ | 383 | ||||
Restricted cash
|
12 | 7,605 | ||||||
Receivables (less allowance for doubtful accounts:
December 31, 2012 - $12; December 31, 2011 - $63)
|
35,325 | 27,804 | ||||||
Inventory
|
36,532 | 31,082 | ||||||
Prepaid expenses
|
697 | 958 | ||||||
Derivative assets
|
- | 1,304 | ||||||
Deferred income taxes
|
5,283 | 6,056 | ||||||
Refundable income taxes
|
242 | 566 | ||||||
Assets held for sale
|
- | 2,300 | ||||||
Total current assets
|
78,091 | 78,058 | ||||||
Property and equipment, net of accumulated depreciation and amortization
|
75,391 | 77,079 | ||||||
Equity method investments
|
7,301 | 12,147 | ||||||
Other assets
|
2,388 | 1,873 | ||||||
Total assets
|
$ | 163,171 | $ | 169,157 | ||||
Current Liabilities
|
||||||||
Current maturities of long-term debt
|
$ | 1,683 | $ | 1,670 | ||||
Revolving credit facility
|
- | 21,142 | ||||||
Accounts payable
|
18,860 | 22,704 | ||||||
Accounts payable to affiliate, net
|
4,008 | 6,167 | ||||||
Accrued expenses
|
5,220 | 4,023 | ||||||
Derivative liabilities
|
- | 3,465 | ||||||
Total current liabilities
|
29,771 | 59,171 | ||||||
Long-term debt, less current maturities
|
5,168 | 6,852 | ||||||
Revolving credit facility
|
25,893 | - | ||||||
Deferred credit
|
4,133 | 4,195 | ||||||
Accrued retirement health and life insurance benefits
|
5,096 | 6,309 | ||||||
Other non current liabilities
|
1,000 | 2,144 | ||||||
Deferred income taxes
|
5,283 | 6,056 | ||||||
Total liabilities
|
76,344 | 84,727 | ||||||
Commitments and Contingencies – See Notes 4 and 7
|
||||||||
Stockholders’ Equity
|
||||||||
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 and 19,530,344 shares at December 31, 2012 and 2011,
respectively; 17,934,233 and 18,115,965 shares outstanding at December 31, 2012 and 2011, respectively
|
6,715 | 6,715 | ||||||
Additional paid-in capital
|
7,894 | 6,925 | ||||||
Retained earnings
|
72,531 | 78,953 | ||||||
Accumulated other comprehensive income (loss)
|
(233 | ) | (1,035 | ) | ||||
Treasury stock, at cost
|
||||||||
Common; 181,732 and 1,414,379 shares at December 31, 2012 and 2011, respectively
|
(84 | ) | (7,132 | ) | ||||
Total stockholders’ equity
|
86,827 | 84,430 | ||||||
Total liabilities and stockholders’ equity
|
$ | 163,171 | $ | 169,157 |
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Cash Flows from Operating Activities
|
||||||||||||
Net income (loss)
|
$ | 1,624 | $ | 10,635 | $ | (1,313 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
11,568 | 5,047 | 8,843 | |||||||||
Gain on sale of joint venture interest
|
(4,055 | ) | - | - | ||||||||
Loss (gain) on sale of assets
|
(832 | ) | 117 | 322 | ||||||||
Share based compensation
|
969 | 510 | 1,164 | |||||||||
Bargain purchase gain, net of tax
|
- | (13,048 | ) | - | ||||||||
Loss on impairment of assets
|
- | 1,301 | - | |||||||||
Deferred income taxes
|
- | (8,340 | ) | - | ||||||||
Equity in loss
|
301 | 551 | 1,540 | |||||||||
Changes in operating assets and liabilities, net of
acquisition:
|
||||||||||||
Restricted cash
|
7,593 | (6,577 | ) | (57 | ) | |||||||
Receivables, net
|
(7,521 | ) | 4,368 | (10,170 | ) | |||||||
Inventory
|
(5,450 | ) | (4,082 | ) | (2,568 | ) | ||||||
Prepaid expenses
|
261 | 244 | 316 | |||||||||
Refundable income taxes
|
324 | (37 | ) | 53 | ||||||||
Accounts payable
|
(4,302 | ) | 412 | 5,907 | ||||||||
Accounts payable to affiliate, net
|
(2,159 | ) | 1 | 1,215 | ||||||||
Accrued expenses
|
593 | (650 | ) | (3,111 | ) | |||||||
Change in derivatives
|
(2,034 | ) | (220 | ) | 2,267 | |||||||
Deferred credit
|
(630 | ) | (303 | ) | (881 | ) | ||||||
Accrued retirement health and life insurance benefits and other noncurrent liabilities
|
(1,081 | ) | (76 | ) | (659 | ) | ||||||
Other
|
(195 | ) | 544 | 271 | ||||||||
Net cash provided by (used in) operating
activities
|
(5,026 | ) | (9,603 | ) | 3,139 | |||||||
Cash Flows from Investing Activities
|
||||||||||||
Additions to property and equipment
|
(9,229 | ) | (1,502 | ) | (12,775 | ) | ||||||
Acquisition of LDI’s Distillery Business
|
- | (10,901 | ) | - | ||||||||
Investments in/ advances to equity method
investments
|
(500 | ) | - | - | ||||||||
Proceeds from sale of interest in ICP, net
|
9,103 | - | - | |||||||||
Proceeds from disposition of property and
Equipment
|
3,263 | 79 | - | |||||||||
Other
|
568 | - | - | |||||||||
Net cash provided by (used in) investing
activities
|
3,205 | (12,324 | ) | (12,775 | ) | |||||||
Cash Flows from Financing Activities
|
||||||||||||
Payment of dividends
|
(914 | ) | (906 | ) | (891 | ) | ||||||
Purchase of treasury stock
|
(84 | ) | (84 | ) | (33 | ) | ||||||
Proceeds from stock plans
|
- | - | 48 | |||||||||
Exercise of stock options
|
- | 98 | 452 | |||||||||
Loan fees incurred with borrowings
|
(644 | ) | - | - | ||||||||
Proceeds from issuance of long-term debt
|
- | - | 7,335 | |||||||||
Principal payments on long-term debt
|
(1,671 | ) | (885 | ) | (699 | ) | ||||||
Proceeds from revolving credit facility
|
127,089 | 165,242 | 317,179 | |||||||||
Principal payments on revolving credit facility
|
(122,338 | ) | (148,758 | ) | (312,521 | ) | ||||||
Net cash provided by financing activities
|
1,438 | 14,707 | 10,870 | |||||||||
Increase (decrease) in cash and cash equivalents
|
(383 | ) | (7,220 | ) | 1,234 | |||||||
Cash and cash equivalents, beginning of period
|
383 | 7,603 | 6,369 | |||||||||
Cash and cash equivalents, end of period
|
- | $ | 383 | $ | 7,603 |
Capital
Stock
Preferred
|
Issued
Common
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Treasury
Stock
|
Total
|
||||||||||||||||||||||
Balance, July 1, 2010
|
$ | 4 | $ | 6,715 | $ | 7,606 | $ | 71,428 | $ | (2,827 | ) | $ | (10,142 | ) | $ | 72,784 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net loss
|
(1,313 | ) | (1,313 | ) | ||||||||||||||||||||||||
Other
comprehensive income
|
2,812 | 2,812 | ||||||||||||||||||||||||||
Options exercised
|
53 | 622 | 675 | |||||||||||||||||||||||||
Dividends paid
|
(891 | ) | (891 | ) | ||||||||||||||||||||||||
Share-based compensation
|
1,164 | 1,164 | ||||||||||||||||||||||||||
Stock plan shares issued
from treasury, net of forfeitures
|
(1,350 | ) | 1,350 | - | ||||||||||||||||||||||||
Stock shares repurchased
|
(33 | ) | (33 | ) | ||||||||||||||||||||||||
Balance, June 30, 2011
|
$ | 4 | $ | 6,715 | $ | 7,473 | $ | 69,224 | $ | (15 | ) | $ | (8,203 | ) | $ | 75,198 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income
|
10,635 | 10,635 | ||||||||||||||||||||||||||
Other comprehensive income
|
(1,020 | ) | (1,020 | ) | ||||||||||||||||||||||||
Options exercised
|
(1 | ) | 98 | 97 | ||||||||||||||||||||||||
Dividends paid
|
(906 | ) | (906 | ) | ||||||||||||||||||||||||
Share-based compensation
|
510 | 510 | ||||||||||||||||||||||||||
Stock plan shares issued
from treasury, net of forfeitures
|
(1,057 | ) | 1,057 | - | ||||||||||||||||||||||||
Stock shares repurchased
|
(84 | ) | (84 | ) | ||||||||||||||||||||||||
Balance, December 31, 2011
|
$ | 4 | $ | 6,715 | $ | 6,925 | $ | 78,953 | $ | (1,035 | ) | $ | (7,132 | ) | $ | 84,430 | ||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||
Net income
|
1 ,624 | 1,624 | ||||||||||||||||||||||||||
Other comprehensive income
|
802 | 802 | ||||||||||||||||||||||||||
Dividends paid
|
(914 | ) | (914 | ) | ||||||||||||||||||||||||
Share-based compensation
|
969 | 969 | ||||||||||||||||||||||||||
Stock shares repurchased
|
(84 | ) | (84 | ) | ||||||||||||||||||||||||
Cancellation of treasury stock
|
(7,132 | ) | 7,132 | - | ||||||||||||||||||||||||
Balance, December 31, 2012
|
$ | 4 | $ | 6,715 | $ | 7,894 | $ | 72,531 | $ | (233 | ) | $ | (84 | ) | $ | 86,827 |
NOTE 1:
|
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Buildings and improvements | 20 – 40 years | |
Transportation equipment | 5 – 6 years | |
Machinery and equipment | 10 – 12 years |
Periods ended,
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
|||||||||
Interest costs charged to expense
|
$ | 870 | $ | 330 | $ | 358 | ||||||
Plus: Interest cost capitalized
|
136 | 62 | 160 | |||||||||
Total
|
$ | 1,006 | $ | 392 | $ | 518 |
NOTE 2:
|
OTHER BALANCE SHEET CAPTIONS
|
December 31,
2012
|
December 31,
2011
|
|||||||
Finished goods
|
$ | 14,272 | $ | 15,728 | ||||
Barreled distillate
|
9,080 | 2,473 | ||||||
Raw materials
|
5,959 | 5,352 | ||||||
Work in process
|
2,571 | 3,529 | ||||||
Maintenance materials
|
4,116 | 3,468 | ||||||
Other
|
534 | 532 | ||||||
Total
|
$ | 36,532 | $ | 31,082 |
December 31,
2012
|
December 31,
2011
|
|||||||
Land, buildings and improvements
|
$ | 39,509 | $ | 40,073 | ||||
Transportation equipment
|
2,360 | 2,087 | ||||||
Machinery and equipment
|
144,106 | 141,195 | ||||||
Construction in progress
|
4,544 | 2,030 | ||||||
Property and equipment, at cost
|
190,519 | 185,385 | ||||||
Less accumulated depreciation and Amortization
|
(115,128 | ) | (108,306 | ) | ||||
Property and equipment, net
|
$ | 75,391 | $ | 77,079 |
December 31,
2012
|
December 31,
2011
|
|||||||
Employee benefit plans (Note 8)
|
$ | 784 | $ | 421 | ||||
Salaries and wages
|
1,843 | 1,334 | ||||||
Restructuring charges
|
643 | 745 | ||||||
Property taxes
|
512 | 426 | ||||||
Other accrued expenses
|
1,438 | 1,097 | ||||||
Total
|
$ | 5,220 | $ | 4,023 |
NOTE 3:
|
EQUITY METHOD INVESTMENTS
|
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
||||||||||
ICP’s Operating results:
|
||||||||||||
Net sales (a)
|
$ | 207,084 | $ | 131,181 | $ | 193,825 | ||||||
Cost of sales and expenses (b)
|
(208,623 | ) | (132,421 | ) | (196,964 | ) | ||||||
Net loss
|
$ | (1,539 | ) | $ | (1,240 | ) | $ | (3,139 | ) |
ICP’s Balance Sheet:
|
December 31,
2012
|
December 31,
2011
|
||||||
Current assets
|
$ | 19,972 | $ | 30,483 | ||||
Noncurrent assets
|
19,856 | 24,769 | ||||||
Total assets
|
$ | 39,828 | $ | 55,252 | ||||
Current liabilities
|
$ | 16,631 | $ | 12,769 | ||||
Noncurrent liabilities
|
203 | 18,929 | ||||||
Equity
|
22,994 | 23,554 | ||||||
Total liabilities and equity
|
$ | 39,828 | $ | 55,252 |
(a)
|
Includes related party sales of $48,611 for the year ended December 31, 2012, $40,159 for the six month transition period ended December 31, 2011 and $57,482 for the year ended June 30, 2011.
|
(b)
|
Includes depreciation and amortization of $5,008 for the year ended December 31, 2012, $2,709 for the six month transition period ended December 31, 2011 and $5,103 for the year ended June 30, 2011.
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
ICP (30% interest)
(a)
|
$ | (327 | ) | $ | (620 | ) | $ | (1,570 | ) | |||
DMI (50% interest)
|
26 | 69 | 30 | |||||||||
$ | (301 | ) | $ | (551 | ) | $ | (1,540 | ) |
(a)
|
The Company’s ownership percentage of ICP was 50 percent through February 1, 2012, when the Company sold a 20 percent interest of its investment. From February 2, 2012 through December 31, 2012, the Company’s ownership percentage in ICP was 30 percent.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
ICP (30% interest)
(a)
|
$ | 6,898 | $ | 11,777 | ||||
DMI (50% interest)
|
403 | 370 | ||||||
$ | 7,301 | $ | 12,147 |
(a)
|
The Company’s ownership percentage of ICP was 50 percent through February 1, 2012, when the Company sold a 20 percent interest of its investment. From February 2, 2012 through December 31, 2012, the Company’s ownership percentage in ICP was 30 percent.
|
NOTE 4:
|
CORPORATE BORROWINGS AND CAPITAL LEASE OBLIGATIONS
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Revolving Credit Agreement, 2.84% (variable
interest rate)
|
$ | 25,893 | $ | 21,142 | ||||
Secured Promissory Note, 6.39% (variable
interest rate), due monthly to July, 2016.
|
1,070 | 1,374 | ||||||
Water Cooling System Capital Lease
Obligation, 2.61%, due monthly to May, 2017
|
5,603 | 6,754 | ||||||
Other Capital Lease Obligations, 0.61%, due
monthly to October, 2013.
|
178 | 394 | ||||||
Total
|
32,744 | 29,664 | ||||||
Less revolving credit agreement
|
- | (21,142 | ) | |||||
Less current maturities of long term debt
|
(1,683 | ) | (1,670 | ) | ||||
Long-term debt
|
$ | 31,061 | $ | 6,852 |
·
|
incur additional indebtedness;
|
·
|
pay cash dividends or make distributions if the Company doesn’t maintain excess availability of $9,625 and fixed charge coverage ratio for the most recently completed twelve months of at least 1.20:1.00;
|
·
|
dispose of assets;
|
·
|
create liens on Company assets;
|
·
|
pledge the fixed and real property assets of LDI’s Distillery Business; or
|
·
|
merge or consolidate.
|
Capital Leases
|
||||||||||||||||||||||||||||
Year Ending
December
31,
|
Revolving
Credit
Agreement
|
Long-Term
Debt
|
Minimum
Lease
Payments
|
Less
Interest
|
Net Present
Value
|
Total Debt
|
Operating
Leases
|
|||||||||||||||||||||
2013
|
$ | - | $ | 324 | $ | 1,495 | $ | 136 | $ | 1,359 | $ | 1,683 | $ | 2,583 | ||||||||||||||
2014
|
- | 346 | 1,316 | 104 | 1,212 | 1,558 | 1,747 | |||||||||||||||||||||
2015
|
- | 369 | 1,316 | 72 | 1,244 | 1,613 | 1,728 | |||||||||||||||||||||
2016
|
- | 31 | 1,316 | 39 | 1,277 | 1,308 | 1,639 | |||||||||||||||||||||
2017
|
25,893 | - | 695 | 6 | 689 | 26,582 | 1,178 | |||||||||||||||||||||
Thereafter
|
- | - | - | - | - | - | 1,357 | |||||||||||||||||||||
Total
|
$ | 25,893 | $ | 1,070 | $ | 6,138 | $ | 357 | $ | 5,781 | $ | 32,744 | $ | 10,232 |
NOTE 5:
|
INCOME TAXES
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Current:
|
||||||||||||
Federal
|
$ | - | $ | - | $ | - | ||||||
State
|
318 | 30 | 68 | |||||||||
318 | 30 | 68 | ||||||||||
Deferred:
|
||||||||||||
Federal
|
- | (6,750 | ) | - | ||||||||
State
|
- | (1,586 | ) | - | ||||||||
- | $ | (8,336 | ) | - | ||||||||
Total
|
$ | 318 | $ | (8,306 | ) | $ | 68 |
Periods ended,
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
|||||||||
“Expected” provision at federal statutory rate
|
$ | 680 | $ | 812 | $ | (463 | ) | |||||
State income taxes
|
106 | 111 | (45 | ) | ||||||||
Bargain purchase gain
|
- | (4,985 | ) | - | ||||||||
Change in valuation allowance
|
(447 | ) | (4,263 | ) | 204 | |||||||
Change due to state rate change
|
- | - | 320 | |||||||||
Other
|
(21 | ) | 19 | 52 | ||||||||
Provision for income taxes
|
$ | 318 | $ | (8,306 | ) | $ | 68 | |||||
Effective tax rate
|
16.4 | % | (358.2 | )% | (5.5 | %) |
December 31,
2012
|
December 31,
2011
|
June 30,
2011
|
||||||||||
Deferred income tax assets:
|
||||||||||||
Post-retirement liability
|
$ | 2,277 | $ | 2,520 | $ | 2,595 | ||||||
Deferred income
|
1,651 | 1,676 | 1,796 | |||||||||
Stock based compensation
|
1,857 | 1,579 | 1,558 | |||||||||
Federal operating loss carry-forwards
|
11,481 | 15,788 | 11,214 | |||||||||
Capital loss carryforward
|
2,243 | 2,045 | - | |||||||||
State tax credits
|
3,022 | 3,022 | 3,022 | |||||||||
State operating loss carry-forwards
|
7,638 | 8,427 | 6,858 | |||||||||
Other
|
4,626 | 4,833 | 3,947 | |||||||||
Less: valuation allowance
|
(9,053 | ) | (9,840 | ) | (13,675 | ) | ||||||
Gross deferred income tax assets
|
25,742 | 30,050 | 17,315 | |||||||||
Deferred income tax liabilities:
|
||||||||||||
Fixed assets
|
(20,180 | ) | (21,860 | ) | (10,878 | ) | ||||||
Equity method investment
|
(526 | ) | (1,999 | ) | (1,939 | ) | ||||||
Other
|
(5,036 | ) | (6,191 | ) | (4,498 | ) | ||||||
Gross deferred income tax liabilities
|
(25,742 | ) | (30,050 | ) | (17,315 | ) | ||||||
Net deferred income tax liability
|
$ | - | $ | - | $ | - |
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Beginning of period balance
|
$ | 445 | $ | 414 | $ | 365 | ||||||
Additions for tax positions of prior years
|
- | 13 | ||||||||||
Decreases for tax positions of prior years
|
- | (1 | ) | - | ||||||||
Additions for tax positions of the current year
|
- | 32 | 36 | |||||||||
End of period balance
|
$ | 445 | $ | 445 | $ | 414 |
NOTE 6:
|
EQUITY
|
Stock options granted but not exercised
|
20,000 | |||
Restricted stock to non-employees (authorized but not granted)
|
39,797 | |||
Restricted stock to employees and executives (authorized but not granted)
|
1,344,312 | |||
Total
|
1,404,109 |
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Net income (loss) from continuing operations
attributable to shareholders
|
$ | 1,624 | $ | 10,635 | $ | (1,313 | ) | |||||
Amounts allocated to participating securities (non-vested shares)
|
(121 | ) | (707 | ) | (57 | ) | ||||||
Net income (loss) from continuing operations
attributable to common shareholders
|
$ | 1,503 | $ | 9,928 | $ | (1,370 | ) | |||||
Basic weighted average common shares
(i)
|
16,951,168 | 16,875,924 | 16,725,756 | |||||||||
Additional weighted average shares attributable to:
Stock options
|
- | 3,229 |
(ii)
|
|||||||||
Diluted weighted average common shares
|
16,951,168 | 16,879,153 | 16,725,756 | |||||||||
Earnings (loss) per share from continuing operations attributable to common shareholders:
|
||||||||||||
Basic
|
$ | 0.09 | $ | 0.59 | $ | (0.08 | ) | |||||
Diluted
|
$ | 0.09 | $ | 0.59 | $ | (0.08 | ) |
(i)
|
Shares listed reflect common stock outstanding after reducing the total for participating restricted stock. The Company had non-vested participating securities of 933,887 and 1,199,661at December 31, 2012 and 2011, respectively, as well as 423,264 and 0 restricted share units at December 31, 2012 and 2011.
|
(ii)
|
The stock options have not been included in the earnings (loss) per share computation due to the loss experienced this year.
|
NOTE 7:
|
COMMITMENTS AND CONTINGENCIES
|
NOTE 8:
|
EMPLOYEE BENEFIT PLANS
|
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Change in benefit obligation:
|
||||||||||||||||
Beginning of period
|
$ | 4,884 | $ | 4,024 | $ | 6,309 | $ | 6,498 | ||||||||
Service cost
|
- | - | 192 | 100 | ||||||||||||
Interest cost
|
146 | 107 | 209 | 151 | ||||||||||||
Actuarial loss (gain)
|
(300 | ) | 805 | 768 | (134 | ) | ||||||||||
Negative plan amendment benefit
|
- | - | (1,165 | ) | - | |||||||||||
Benefits paid
|
(2,040 | ) | (52 | ) | (613 | ) | (306 | ) | ||||||||
Benefit obligation at end of period
|
$ | 2,690 | $ | 4,884 | $ | 5,700 | $ | 6,309 |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Fair value of plan assets at beginning of period
|
$ | 3,278 | $ | 3,440 | $ | - | $ | - | ||||||||
Actual return on plan assets
|
129 | (228 | ) | - | - | |||||||||||
Employer contributions
|
353 | 118 | - | - | ||||||||||||
Benefits paid
|
(2,040 | ) | (52 | ) | - | - | ||||||||||
Fair value of plan assets at end of period
|
$ | 1,720 | $ | 3,278 | $ | - | $ | - |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||||||||||
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
|||||||||||||||||||
Discount rate
|
3.19 | % | 4.21 | % | 5.42 | % | 2.98 | % | 3.77 | % | 4.71 | % | ||||||||||||
Measurement date
|
December 31,
2012
|
December 31,
2011
|
June 30,
2011
|
December 31,
2012
|
December 31,
2011
|
June 30,
2011
|
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||||||||||
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
|||||||||||||||||||
Expected return on Assets
|
7.00 | % | 7.00 | % | 7.00 | % | - | - | - | |||||||||||||||
Discount rate
|
4.21 | % | 5.42 | % | 5.25 | % | 3.26 | % | 4.71 | % | 5.11 | % | ||||||||||||
Average compensation increase
|
n/a | n/a | n/a | n/a | n/a | 4.50 | % |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||||||||||
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
|||||||||||||||||||
|
||||||||||||||||||||||||
Service cost
|
$ | - | $ | - | $ | - | $ | 192 | $ | 100 | $ | 224 | ||||||||||||
Interest cost
|
146 | 107 | 238 | 209 | 151 | 409 | ||||||||||||||||||
Expected return on assets
|
(166 | ) | (118 | ) | (197 | ) | - | - | - | |||||||||||||||
Amortization of prior service cost
|
- | - | - | (227 | ) | (9 | ) | (17 | ) | |||||||||||||||
Prior service cost recognized due to curtailment
|
- | - | - | (79 | ) | - | - | |||||||||||||||||
Amortization of net actuarial gain
|
90 | 11 | 136 | - | - | 88 | ||||||||||||||||||
Settlement losses
|
228 | - | - | - | - | - | ||||||||||||||||||
Total
|
$ | 298 | $ | - | $ | 177 | $ | 95 | $ | 242 | $ | 704 |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||||||||||
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
Year
Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
|||||||||||||||||||
|
||||||||||||||||||||||||
Net actuarial (loss) gain
|
$ | 265 | $ | (1,153 | ) | $ | 1,121 | $ | (768 | ) | $ | 134 | $ | 1,634 | ||||||||||
Settlement losses
|
228 | - | - | - | - | - | ||||||||||||||||||
Recognized net actuarial gain
|
90 | 11 | 136 | - | - | 88 | ||||||||||||||||||
Prior service cost recognized due to negative plan adjustment
|
- | - | - | 1,165 | - | - | ||||||||||||||||||
Prior service cost recognized due to curtailments
|
- | - | - | (79 | ) | - | - | |||||||||||||||||
Amortization of prior service cost
|
- | - | - | (227 | ) | (9 | ) | (17 | ) | |||||||||||||||
Total other comprehensive income (loss)
|
$ | 583 | $ | (1,142 | ) | $ | 1,257 | $ | 91 | $ | 125 | $ | 1,705 |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||||||||||
As of
December 31,
2012
|
As of
December 31,
2011
|
As of
December 31,
2012
|
As of
December 31,
2011
|
|||||||||||||
Accrued expenses
|
$ | - | $ | - | $ | (604 | ) | $ | - | |||||||
Other non-current liabilities
|
(970 | ) | (1,607 | ) | - | - | ||||||||||
Accrued retirement benefits
|
- | - | (5,096 | ) | (6,309 | ) | ||||||||||
Net amount recognized
|
$ | (970 | ) | $ | (1,607 | ) | $ | (5,700 | ) | $ | (6,309 | ) |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plans
|
|||||||||||||||
As of
December 31,
2012
|
As of
December 31,
2011
|
As of
December 31,
2012
|
As of
December 31,
2011
|
|||||||||||||
Actuarial net (loss) gain
|
$ | (799 | ) | $ | (1,382 | ) | $ | (865 | ) | $ | (97 | ) | ||||
Net prior service cost
|
- | - | 1,036 | 177 | ||||||||||||
Net amount recognized
|
$ | (799 | ) | $ | (1,382 | ) | $ | 171 | $ | 80 |
Defined Benefit Retirement Plans
|
Post-Retirement Benefit Plan
|
|||||||
Actuarial net loss
|
$ | (66 | ) | $ | (28 | ) | ||
Net prior service credits
|
- | 647 | ||||||
Net amount recognized
|
$ | (66 | ) | $ | 619 |
Post-Retirement Benefit Plan
|
|||||||||||||
Periods ended,
|
Year Ended
December 31,
2012
|
Year Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Health care cost trend rate
|
8.00 | % | 8.00 | % | 8.50 | % | |||||||
Ultimate trend rate
|
5.00 | % | 5.00 | % | 5.00 | % | |||||||
Year rate reaches ultimate trend rate
|
2024 | 2020 | 2021 |
Defined Benefit
Retirement Plan
|
Post-Retirement Benefit Plan
|
|||||||||||
Expected Benefit
Payments
|
Expected Benefit
Payments
|
Expected Subsidy
Receipts
|
||||||||||
2013
|
$ | 158 | $ | 604 | $ | 30 | ||||||
2014
|
178 | 506 | 29 | |||||||||
2015
|
225 | 474 | 28 | |||||||||
2016
|
163 | 460 | 27 | |||||||||
2017
|
210 | 439 | 25 | |||||||||
2018-2022
|
989 | 2,237 | 98 | |||||||||
Total
|
$ | 1,923 | $ | 4,720 | $ | 237 |
Defined Benefit Retirement Plan
|
||||||||||||
Asset Category
|
As of
December 31,
2012
|
As of
December 31,
2011
|
Target
Allocation
|
|||||||||
Cash and cash
equivalents
|
42 | % | 4 | % | 0 | % | ||||||
Equity Securities
|
36 | % | 67 | % | 62 | % | ||||||
Debt Securities
|
13 | % | 24 | % | 26 | % | ||||||
Other
|
9 | % | 5 | % | 12 | % | ||||||
Total
|
100 | % | 100 | % | 100 | % |
Fair Value Measurements at
December 31, 2012
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$ | 724 | $ | - | $ | - | $ | 724 | ||||||||
Equity Securities:
|
||||||||||||||||
Domestic equity securities
|
487 | - | - | 487 | ||||||||||||
International equity securities
|
135 | - | - | 135 | ||||||||||||
Fixed income securities:
|
||||||||||||||||
Investment grade domestic bonds
|
207 | - | - | 207 | ||||||||||||
Other
|
167 | - | - | 167 | ||||||||||||
Total
|
$ | 1,720 | $ | - | $ | - | $ | 1,720 |
Fair Value Measurements at
December 31, 2011
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$ | 159 | $ | - | $ | - | $ | 159 | ||||||||
Equity Securities:
|
||||||||||||||||
Domestic equity securities
|
1,624 | - | - | 1,624 | ||||||||||||
International equity securities
|
560 | - | - | 560 | ||||||||||||
Fixed income securities:
|
||||||||||||||||
Investment grade domestic bonds
|
626 | - | - | 626 | ||||||||||||
International bonds
|
165 | - | - | 165 | ||||||||||||
Other
|
144 | - | - | 144 | ||||||||||||
Total
|
$ | 3,278 | $ | - | $ | - | $ | 3,278 |
Year Ended
December 31, 2012
|
Six Months Ended
December 31, 2011
|
Year Ended
June 30, 2011
|
||||||||||||||||||||||
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
Outstanding at beginning of Period
|
42,000 | $ | 6.98 | 63,100 | $ | 6.35 | 168,350 | $ | 5.91 | |||||||||||||||
Granted
|
- | - | - | - | - | - | ||||||||||||||||||
Cancelled/Forfeited
|
22,000 | 4.88 | (1,600 | ) | 5.95 | (30,000 | ) | 4.75 | ||||||||||||||||
Exercised
|
- | - | (19,500 | ) | 5.02 | (75,250 | ) | 6.01 | ||||||||||||||||
Outstanding at end of Period
|
20,000 | $ | 9.30 | 42,000 | $ | 6.98 | 63,100 | $ | 6.35 |
Shares
|
Exercise
Price
|
Remaining
Contractual
Lives
(Years)
|
Shares
Exercisable
at
December 31,
2012
|
|||||||||||||
Directors Option Plan
|
10,000 | 10.45 | 2.75 | 10,000 | ||||||||||||
8,000 | 9.09 | 1.75 | 8,000 | |||||||||||||
2,000 | 4.38 | .75 | 2,000 | |||||||||||||
Total
|
20,000 | 20,000 |
Year Ended
December 31, 2012
|
Six Months Ended
December 31, 2011
|
Year Ended
June 30, 2011
|
||||||||||||||||||||||
Shares
|
Weighted
Average
Grant-Date
Fair
Value
|
Shares
|
Weighted
Average
Grant-
Date Fair
Value
|
Shares
|
Weighted
Average
Grant-
Date Fair
Value
|
|||||||||||||||||||
Non vested balance at beginning of period
|
1,199,661 | $ | 6.26 | 1,088,644 | $ | 6.23 | 843,870 | $ | 5.99 | |||||||||||||||
Granted
|
- | - | 303,052 | 5.87 | 323,629 | 6.93 | ||||||||||||||||||
Forfeited
|
(181,696 | ) | 5.97 | (112,354 | ) | 6.70 | (60,726 | ) | 5.99 | |||||||||||||||
Vested
|
(84,078 | ) | 7.33 | (79,681 | ) | 5.41 | (18,129 | ) | 8.65 | |||||||||||||||
Non vested balance at end of period
|
933,887 | $ | 6.22 | 1,199,661 | $ | 6.26 | 1,088,644 | $ | 6.23 |
Year Ended
December 31, 2012
|
||||||||
Units
|
Weighted Average
Grant-Date Fair
Value
|
|||||||
Non vested balance at beginning of year
|
- | $ | - | |||||
Granted
|
432,264 | 4.33 | ||||||
Forfeited
|
(9,000 | ) | 5.92 | |||||
Vested
|
- | - | ||||||
Non vested balance at end of year
|
423,264 | $ | 4.29 |
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Balance at beginning of period
|
$ | 915 | $ | 1,655 | $ | 2,685 | ||||||
Provision for additional expense
|
- | - | 249 | |||||||||
Payments and adjustments
(a)
|
(431 | ) | (740 | ) | (1,279 | ) | ||||||
Balance at end of period
|
$ | 484 | $ | 915 | $ | 1,655 |
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Sales to Customers
|
||||||||||||
Distillery products
|
$ | 276,690 | $ | 118,437 | $ | 188,993 | ||||||
Ingredient solutions
|
56,488 | 27,596 | 57,765 | |||||||||
Other
(i)
|
1,157 | 444 | 1,157 | |||||||||
Total
|
$ | 334,335 | $ | 146,477 | $ | 247,915 | ||||||
Depreciation and amortization
|
||||||||||||
Distillery products
|
$ | 5,662 | $ | 2,128 | $ | 4,720 | ||||||
Ingredient solutions
|
2,427 | 1,240 | 2,148 | |||||||||
Other
(i)
|
244 | 122 | 245 | |||||||||
Corporate
|
3,235 | 1,557 | 1,730 | |||||||||
Total
|
$ | 11,568 | $ | 5,047 | $ | 8,843 | ||||||
Income (loss) before Income Taxes
|
||||||||||||
Distillery products
|
$ | 14,874 | $ | 1,234 | $ | 19,720 | ||||||
Ingredient solutions
|
5,217 | 1,044 | 1,828 | |||||||||
Other
(i)
|
(429 | ) | (274 | ) | (521 | ) | ||||||
Corporate
|
(21,775 | ) | (11,422 | ) | (22,272 | ) | ||||||
Gain on sale of joint venture interest
(ii)
|
4,055 | - | - | |||||||||
Impairment of long-lived assets
(ii)
|
- | (1,301 | ) | - | ||||||||
Bargain purchase gain, net of tax
(ii)
|
- | 13,048 | - | |||||||||
Total
|
$ | 1,942 | $ | 2,329 | $ | (1,245 | ) |
(i)
|
This segment was sold subsequent to December 31, 2012 as further described in
Note 20. Subsequent Events.
|
(ii)
|
The Company’s management reporting does not assign or allocate special charges to the Company’s operating segments. For purposes of comparative analysis, gain on sale of joint venture interest, impairment of long-lived assets and bargain purchase gain for the year ended December 31, 2012, the six month transition period ended December 31, 2011, and for the year ended June 30, 2011 have been excluded from the Company’s segments.
|
December 31,
|
||||||||
2012
|
2011
|
|||||||
Identifiable Assets
|
||||||||
Distillery products
|
$ | 107,140 | $ | 99,374 | ||||
Ingredient solutions
|
27,038 | 26,546 | ||||||
Other
(i)
|
1,247 | 1,448 | ||||||
Corporate
|
27,746 | 41,789 | ||||||
Total
|
$ | 163,171 | $ | 169,157 |
(i)
|
This segment was sold subsequent to December 31, 2012 as further described in
Note 20. Subsequent Events.
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Distillery products
(i)
|
$ | 7,422 | $ | 12,033 | $ | 9,340 | ||||||
Ingredient solutions
|
1,078 | 765 | 4,434 | |||||||||
Other
(ii)
|
20 | - | - | |||||||||
Corporate
|
1,187 | 545 | 808 | |||||||||
Total
|
$ | 9,707 | $ | 13,343 | $ | 14,582 |
(i)
|
Includes $11,041 related to acquisition of LDI’s Distillery Business (see
Note 18. Business Combination
) for the six months ended December 31, 2011.
|
(ii)
|
This segment was sold subsequent to December 31, 2012 as further described in
Note 20. Subsequent Events
.
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Non-cash investing and financing activities:
|
||||||||||||
Purchase of property and equipment
in Accounts Payable
|
$ | 478 | $ | 800 | $ | 1,806 | ||||||
Reclassification of assets held for
sale from Property and equipment
|
- | 2,300 | - | |||||||||
Stock plan shares issued from
Treasury
|
- | 1,057 | 1,350 | |||||||||
Additional cash payment information:
|
||||||||||||
Interest paid
|
928 | 375 | 515 | |||||||||
Income tax (paid)/ refunds received
|
293 | 169 | (234 | ) |
Classified
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year Ended
June 30,
2011
|
||||||||||
Commodity derivatives
|
Cost of sales
|
$ | 2,173 | $ | (634 | ) | $ | 11,299 |
Amounts of Gains (Losses) Recognized in
OCI on Derivatives
|
Amount of Gains (Losses) Reclassified
from AOCI into Earnings
|
||||||||||||||||||||||||
Derivatives in Cash
Flow Hedging
Relationship
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
Location of
Losses
Reclassified
from AOCI
into Income
|
Year Ended
December 31,
2012
|
Six Months
Ended
December 31,
2011
|
Year
Ended
June 30,
2011
|
||||||||||||||||||
Commodity derivatives
|
$ | (286 | ) | $ | (1,252 | ) | n/a |
Cost of sales
|
$ | (413 | ) | $ | (539 | ) | n/a |
Fair Value Measurements
|
|||||||||||||||||
Classified
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
December 31, 2011
|
|||||||||||||||||
Assets
|
|||||||||||||||||
Corn Derivatives
|
Derivative
Assets
|
$ | 1,091 | $ | 1,091 | $ | - | $ | - | ||||||||
Ethanol Derivatives
|
Derivative
Assets
|
$ | 213 | $ | 213 | ||||||||||||
Liabilities
|
|||||||||||||||||
Corn Derivatives
|
Derivative
Liabilities
|
$ | (974 | ) | $ | ( 974 | ) | $ | - | $ | - | ||||||
Ethanol Derivatives
|
Derivative
Liabilities
|
$ | (2,491 | ) | $ | (2,491 | ) | $ | - | $ | - |
Year Ended
|
Six Months Ended
|
|||||||||||||||
December 31,
2012
|
December 31,
2011
|
December 31,
2011
|
December 31,
2010
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
Operating Data:
|
||||||||||||||||
Sales
|
$ | 338,232 | $ | 279,656 | $ | 146,563 | $ | 115,142 | ||||||||
Less: excise tax
|
3,897 | 193 | 86 | 213 | ||||||||||||
Net sales
|
334,335 | 279,463 | 146,477 | 114,929 | ||||||||||||
Cost of sales
|
309,312 | 272,786 | 143,531 | 95,783 | ||||||||||||
Gross profit
|
25,023 | 6,677 | 2,946 | 19,146 | ||||||||||||
Selling, general and administrative expenses
|
26,536 | 21,987 | 11,417 | 10,587 | ||||||||||||
Other operating costs and (gain) loss on sale of assets, net
|
(569 | ) | 539 | 114 | 650 | |||||||||||
Impairment of long-lived assets
|
- | 1,301 | 1,301 | - | ||||||||||||
Bargain purchase gain, net of tax
|
- | (13,048 | ) | (13,048 | ) | - | ||||||||||
Income (loss) from operations
|
(944 | ) | (4,102 | ) | 3,162 | 7,909 | ||||||||||
Gain on sale of joint venture interest
|
4,055 | - | - | - | ||||||||||||
Other income, net
|
2 | 53 | 48 | 3 | ||||||||||||
Interest expense
|
(870 | ) | (422 | ) | (330 | ) | (266 | ) | ||||||||
Equity in earnings (loss)
|
(301 | ) | (2,723 | ) | (551 | ) | 632 | |||||||||
Income (loss) before income taxes
|
1,942 | (7,194 | ) | 2,329 | 8,278 | |||||||||||
Provision (benefit) for income taxes
|
318 | (8,272 | ) | (8,306 | ) | 34 | ||||||||||
Net income (loss)
|
$ | 1,624 | 1,078 | 10,635 | 8,244 | |||||||||||
Other comprehensive income loss, net
|
802 | 1968 | (1,020 | ) | (176 | ) | ||||||||||
Comprehensive income
|
$ | 2,426 | $ | 3,046 | $ | 9,615 | $ | 8,068 | ||||||||
Per Share Data
|
||||||||||||||||
Total basic earnings per common share
|
$ | 0.09 | $ | 0.06 | $ | 0.59 | $ | 0.46 | ||||||||
Total diluted earnings per common share
|
$ | 0.09 | $ | 0.06 | $ | 0.59 | $ | 0.46 | ||||||||
Shares used in computing basic earnings per share
|
16,951,168 | 16,804,797 | 16,875,924 | 16,684,606 | ||||||||||||
Shares used in computing diluted earnings per share
|
16,951,168 | 16,808,883 | 16,879,153 | 16,702,189 | ||||||||||||
Dividends per common share
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | ||||||||
Cash Flow Data:
|
||||||||||||||||
Net cash used in operating activities
|
$ | (5,026 | ) | $ | (5,480 | ) | $ | (9,603 | ) | $ | (1,160 | ) | ||||
Net cash provided by (used in) investing activities
|
3,205 | (21,435 | ) | (12,324 | ) | (3,663 | ) | |||||||||
Net cash provided by (used in) financing activities
|
1,438 | 26,826 | 14,707 | (1,074 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents
|
$ | (383 | ) | $ | 89 | $ | (7,220 | ) | $ | (5,897 | ) |
Components of purchase price
|
||||
Cash consideration paid to seller at closing
|
$ | 10,901 | ||
Accrued consideration
|
140 | |||
Total purchase price
|
$ | 11,041 | ||
Recognized Fair Value Amounts of Identifiable Assets
Acquired and Liabilities Assumed
|
||||
Receivables
|
$ | 4,328 | ||
Inventory
|
9,921 | |||
Land, buildings and improvements
|
6,549 | |||
Machinery and equipment
|
11,404 | |||
Assets held for sale (See Note 10)
|
2,300 | |||
Customer relationships
|
1,496 | |||
Accounts payable and accrued expenses
|
(3,208 | ) | ||
Other non current liabilities
|
(365 | ) | ||
Deferred tax liability on bargain purchase gain
|
(8,336 | ) | ||
Total identifiable net assets
|
24,089 | |||
Bargain Purchase Gain, net of tax
|
$ | 13,048 |
Six Months Ended
December 31,
2011
|
Year Ended
June 30, 2011
|
|||||||
Net sales
|
$ | 169,469 | $ | 290,825 | ||||
Net income (loss)
|
$ | (15,288 | ) | $ | 16,255 | |||
Pro forma earnings (loss) per share
|
||||||||
Basic
|
$ | (0.91 | ) | $ | 0.91 | |||
Diluted
|
$ | (0.91 | ) | $ | 0.91 |
Year ended December 31, 2012
|
||||||||||||||||
Fourth
Quarter
|
Third
Quarter
|
Second
Quarter
|
First
Quarter
|
|||||||||||||
(In thousands, except per share data amounts)
|
||||||||||||||||
Sales
|
$ | 86,350 | $ | 76,189 | $ | 87,263 | $ | 88,430 | ||||||||
Less: excise tax
|
- | 82 | 1,729 | 2,086 | ||||||||||||
Net sales
|
86,350 | 76,107 | 85,534 | 86,344 | ||||||||||||
Cost of sales
|
78,930 | 70,047 | 79,618 | 80,717 | ||||||||||||
Gross profit
|
7,420 | 6,060 | 5,916 | 5,627 | ||||||||||||
Selling, general and administrative
|
6,466 | 6,037 | 6,285 | 7,748 | ||||||||||||
Other operating costs and (gain) loss on
sale of assets, net
|
(16 | ) | (851 | ) | 176 | 122 | ||||||||||
Income (loss) from operations
|
970 | 874 | (545 | ) | (2,243 | ) | ||||||||||
Gain on sale of joint venture interest
|
- | - | - | 4,055 | ||||||||||||
Other income (expense), net
|
(1 | ) | (1 | ) | 2 | 2 | ||||||||||
Interest expense
|
(158 | ) | (225 | ) | (232 | ) | (255 | ) | ||||||||
Equity in earnings (loss)
|
(465 | ) | (130 | ) | (143 | ) | 437 | |||||||||
Income (loss) before income taxes
|
346 | 518 | (918 | ) | 1,996 | |||||||||||
Provision (benefit) for income taxes
|
166 | 100 | (68 | ) | 120 | |||||||||||
Net income (loss)
|
$ | 180 | $ | 418 | $ | (850 | ) | $ | 1,876 | |||||||
Per Share Data(i)
|
||||||||||||||||
Total basic earnings (loss) per common share
|
$ | 0.01 | 0.02 | (0.05 | ) | 0.10 | ||||||||||
Total diluted earnings (loss) per common share
|
$ | 0.01 | 0.02 | (0.05 | ) | 0.10 | ||||||||||
Dividends per Common Share
|
$ | - | $ | - | $ | - | $ | 0.05 | ||||||||
Stock price ranges:
|
||||||||||||||||
Common
|
||||||||||||||||
-High
|
$ | 3.71 | $ | 3.68 | $ | 4.90 | $ | 6.37 | ||||||||
-Low
|
$ | 3.40 | $ | 3.30 | $ | 3.43 | $ | 5.28 |
(i)
|
Total basic and diluted losses per common share do not equal the annual amounts of $0.09 and $0.09, respectively, due to rounding as well as due to allocation of losses under the two class method during periods of losses. For the quarters ended December 31, 2012 and June 30, 2012, the losses were fully allocated common stock.
|
Transition Period Ended
December 31, 2011
|
||||||||
Quarter
ending
December 31,
2011
|
Quarter
ending
September 30,
2011
|
|||||||
(In thousands, except per share
data amounts)
|
||||||||
Sales
|
$ | 70,425 | $ | 76,138 | ||||
Less: excise tax
|
86 | - | ||||||
Net sales
|
70,339 | 76,138 | ||||||
Cost of sales
|
70,184 | 73,347 | ||||||
Gross profit
|
155 | 2,791 | ||||||
Selling, general and administrative
|
6,343 | 5,074 | ||||||
Other operating costs and (gain) loss
on sale of assets, net
|
(180 | ) | 294 | |||||
Impairment of long-lived assets
|
1,301 | - | ||||||
Bargain purchase gain, net of tax
|
(13,048 | ) | - | |||||
Income (loss) from operations
|
5,739 | (2,577 | ) | |||||
Other income (expense), net
|
2 | 46 | ||||||
Interest expense
|
(216 | ) | (114 | ) | ||||
Equity in earnings (loss)
|
2,279 | (2,830 | ) | |||||
Income (loss) before income taxes
|
7,804 | (5,475 | ) | |||||
Provision (benefit) for income taxes
|
(8,340 | ) | 34 | |||||
Net income (loss)
|
$ | 16,144 | $ | (5,509 | ) | |||
Per Share Data(i)
|
||||||||
Total basic earnings (loss) per
common share
|
$ | 0.89 | $ | (0.33 | ) | |||
Total diluted earnings (loss) per
common share
|
$ | 0.89 | $ | (0.33 | ) | |||
Dividends per Common Share
|
$ | - | $ | 0.05 | ||||
Stock price ranges:
|
||||||||
Common
|
||||||||
-High
|
$ | 6.82 | $ | 8.75 | ||||
-Low
|
$ | 4.27 | $ | 5.07 |
(i)
|
Total basic and diluted income (losses) per common share do not equal the annual amounts of $0.59 and $0.59, respectively, due to rounding as well as due to allocation of losses under the two class method during periods of losses. For the quarter ended September 30, 2011, the loss was fully allocated common stock.
|
Year ended June 30, 2011
|
||||||||||||||||
Fourth
Quarter
|
Third
Quarter
|
Second
Quarter
|
First
Quarter
|
|||||||||||||
(In thousands, except per share data amounts)
|
||||||||||||||||
Sales
|
$ | 68,882 | $ | 64,211 | $ | 58,072 | $ | 57,024 | ||||||||
Less: excise tax
|
84 | 23 | 121 | 46 | ||||||||||||
Net sales
|
68,798 | 64,188 | 57,951 | 56,978 | ||||||||||||
Cost of sales
|
71,586 | 57,669 | 49,159 | 46,624 | ||||||||||||
Gross profit
|
(2,788 | ) | 6,519 | 8,792 | 10,354 | |||||||||||
Selling, general and administrative
|
4,880 | 5,690 | 4,360 | 6,227 | ||||||||||||
Other operating costs and (gain) loss on
sale of assets, net
|
425 | - | 88 | 562 | ||||||||||||
Income (loss) from operations
|
(8,093 | ) | 829 | 4,344 | 3,565 | |||||||||||
Other income (expense), net
|
2 | 3 | - | 3 | ||||||||||||
Interest expense
|
- | (92 | ) | (141 | ) | (125 | ) | |||||||||
Equity in earnings (loss)
|
(2,296 | ) | 124 | (957 | ) | 1,589 | ||||||||||
Income (loss) before income taxes
|
(10,387 | ) | 864 | 3,246 | 5,032 | |||||||||||
Provision (benefit) for income taxes
|
(129 | ) | 163 | 4 | 30 | |||||||||||
Net income (loss)
|
$ | (10,258 | ) | $ | 701 | $ | 3,242 | $ | 5,002 | |||||||
Per Share Data
(i)
|
||||||||||||||||
Total basic earnings (loss) per common share
|
$ | (0.61 | ) | $ | 0.04 | $ | 0.18 | $ | 0.28 | |||||||
Total diluted earnings (loss) per common share
|
$ | (0.61 | ) | $ | 0.04 | $ | 0.18 | $ | 0.28 | |||||||
Dividends per Common Share
|
$ | - | $ | - | $ | - | $ | 0.05 | ||||||||
Stock price ranges:
|
||||||||||||||||
Common
|
||||||||||||||||
-High
|
$ | 9.00 | $ | 11.06 | $ | 11.90 | $ | 8.15 | ||||||||
-Low
|
$ | 7.75 | $ | 7.90 | $ | 8.14 | $ | 6.46 | ||||||||
(i)
|
Total basic and diluted losses per common share do not equal the annual amounts of $(0.08) and $(0.08), respectively, due to rounding as well as due to allocation of losses under the two class method during periods of losses. For the quarter ended June 30, 2011, the loss was fully allocated common stock.
|
(A)
Number of shares to
be issued upon
exercise of
outstanding options,
warrants and rights
|
(B)
Weighted-average of
exercise price of
outstanding options,
warrants and rights
|
(C)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column
(A)) (*)
|
||||||||||
Equity compensation plans
approved by security holders
|
20,000 | $ | 9.30 | 1,384,109 | ||||||||
Equity compensation plans not
approved by security holders
|
- | - | - | |||||||||
Total
|
20,000 | $ | 9.30 | 1,384,109 |
2.1
|
Agreement of Merger and Plan of Reorganization, dated as of January 3, 2012, by and among MGPI Processing, Inc. (formerly MGP Ingredients, Inc.), MGP Ingredients, Inc. (formerly MGPI Holdings, Inc.) and MGPI Merger Sub, Inc. (Incorporated by reference to Exhibit 2 of the Company's current report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
2.2
|
Asset Purchase Agreement by and among Lawrenceburg Distillers Indiana, LLC, Angostura US Holdings Limited and MGPI of Indiana, LLC, dated October 20, 2011 (Incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed December 28, 2011 (File number 000-17196))
|
3.1.1
|
Articles of Incorporation of MGP Ingredients, Inc. (formerly MGPI Holdings, Inc.), as amended (Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
3.1.2
|
Certificate of Amendment to Articles of Incorporation of MGP Ingredients, Inc. (formerly MGPI Holdings, Inc.) (Incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
3.2
|
Bylaws of MGP Ingredients, Inc. (formerly MGPI Holdings, Inc.) (Incorporated by reference to Exhibit 3.3 of the Company’s Current Report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
4.1
|
Amended and Restated Credit Agreement dated November 2, 2012 between MGP Ingredients, Inc., MGPI Processing, Inc., MGPI Pipeline, Inc. and MGPI of Indiana, LLC and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed November 8, 2012 (File number 000-17196))
|
4.1.1
|
Amended and Restated Patent Security Agreement dated November 2, 2012 between MGPI Processing, Inc and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on November 8, 2012 (File number 000-17196))
|
4.1.2
|
Trademark Security Agreement dated November 2, 2012 between MGPI Processing, Inc. and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed on November 8, 2012 (File number 000-17196))
|
4.1.3
|
Assignment of Membership Interests dated as of July 21, 2009 between MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and Wells Fargo Bank, National Association, relating to MGPI of Indiana, LLC (formerly, Firebird Acquisitions, LLC) (Incorporated by reference to Exhibit 4.1.2 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.1.4
|
Stock Pledge Agreement dated as of July 21, 2009 between MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and Wells Fargo Bank, National Association, relating to stock of Midwest Grain Pipeline, Inc. (Incorporated by reference to Exhibit 4.1.3 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.1.5
|
Control Agreement and Assignment of Hedging Account among Wells Fargo Bank, National Association, MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and ADM Investor Services, Inc. (Incorporated by reference to Exhibit 4.1.4 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.1.19
|
Amended and Restated Guaranty and Security Agreement dated November 2, 2012, by and among MGP Ingredients, Inc., MGPI of Indiana, LLC, MGPI Pipeline, Inc., MGPI Processing, Inc. and Wells Fargo Bank, National Association (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed November 8, 2012 (File number 000-17196))
|
4.2
|
Commercial Security Agreement from MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) to Union State Bank of Everest dated March 31, 2009 (Incorporated by reference to Exhibit 4.5.2 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.2.1
|
Amendment to Commercial Security Agreement dated as of July 20, 2009 between MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and Union State Bank of Everest (Incorporated by reference to Exhibit 4.5.3 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.3
|
Promissory Note dated July 20, 2009 from MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) to Union State Bank of Everest in the initial principal amount of $2,000,000 (Incorporated by reference to Exhibit 4.6 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.3.1
|
Commercial Security Agreement dated July 20, 2009 from MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) to Union State Bank of Everest relating to equipment at Atchison Plant and Onaga plant (Incorporated by reference to Exhibit 4.6.1 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.3.2
|
Mortgage dated July 20, 2009 from MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) to Union State Bank of Everest relating to the Atchison plant (Incorporated by reference to Exhibit 4.6.2 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 30, 2009 (File number 000-17196))
|
4.4
|
Amended and Restated Intercreditor Agreement between Wells Fargo Bank, National Association and Union State Bank of Everest dated October 31, 2012 (Incorporated by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed November 8, 2012 (File number 000-17196))
|
4.5
|
Trust Indenture Dated as of December 28, 2006 relating to $7,000,000 Taxable Industrial Revenue Bonds Series 2006 (MGP Ingredients Project) (Incorporated by Reference to Exhibit 4.2 of the Company's Quarterly Report on Form 10-Q for the Quarter ended December 31, 2006 (File number 000-17196))
|
4.6
|
Lease dated as of December 28, 2006 between the City of Atchison, as Issuer and MGPI Processing, Inc. (formerly MGP Ingredients, Inc.), as tenant relating to $7,000,000 Taxable Industrial Revenue Bonds Series 2006 (MGP Ingredients Project) (Incorporated by Reference to Exhibit 10.6 of the Company's Quarterly Report on Form 10-Q for the Quarter ended December 31, 2006 (File number 000-17196))
|
4.7
|
Master Lease Agreement dated as of June 28, 2011 between U.S. Bancorp Equipment Finance, Inc. and MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and related bill of sale and Schedules #001-0018787-001 and 1166954-001-0018787-001 (Incorporated by reference to Exhibit 4.7 of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011(File number 000-17196))
|
4.7.1
|
Mortgagee's Waiver executed by Union State Bank of Everest (Incorporated by reference to Exhibit 4.7.1 of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011 (File number 000-17196))
|
4.7.2
|
Mortgagee's Waiver and lien release executed by Wells Fargo Bank National Association (Incorporated by reference to Exhibit 4.7.2 of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011(File number 000-17196))
|
4.8
|
In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, certain instruments respecting long-term debt of the Registrant have been omitted but will be furnished to the Commission upon request.
|
9.1
|
Copy of Cray Family Trust (Incorporated by reference to Exhibit 1 of Amendment No. 1 to Schedule 13D of Cloud L. Cray, Jr. dated November 18, 1994)
|
9.2
|
First Amendment to Cray Family Trust dated November 13, 1980 (Incorporated by reference to Exhibit 9.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 (File number 000-17196))
|
9.3
|
Voting Trust Agreement dated as of November 16, 2005 among Cloud L. Cray, Jr., Richard B. Cray and Laidacker M. Seaberg, as trustees of the Cray Family Trust and Cloud L. Cray, Jr., Richard B. Cray and Laidacker M. Seaberg, as trustees (Incorporated by reference to Exhibit 9.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 (File number 000-17196))
|
9.4
|
First Amendment to Voting Trust Agreement (Incorporated by reference to Exhibit 9.4 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 20, 2010 (File number 000-17196))
|
10.1
|
Assumption Agreement, dated as of January 3, 2012, between MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and MGP Ingredients, Inc. (formerly MGPI Holdings, Inc.) (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
10.2
|
Copy of MGP Ingredients, Inc. 1996 Stock Option Plan for Outside Directors, as amended (Incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (File number 333-51849))
|
10.3
|
Copy of amendments to Options granted under MGP Ingredients, Inc. 1996 Stock Option Plan for Outside Directors (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended September 30, 1998 (File number 000-17196))
|
10.4
|
Form of Option Agreement for the grant of Options under the MGP Ingredients, Inc. 1996 Stock Option Plan for Outside Directors, as amended (Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended September 30, 1998 (File number 000-17196))
|
10.5
|
Stock Incentive Plan of 2004, as amended (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statements on Form S-8 (File numbers 333-162625 & 333-119860))
|
10.6
|
Guidelines for Issuance of Fiscal 2005 Restricted Share Awards (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended December 31, 2004 (File number 000-17196))
|
10.7
|
Agreement with Ladd M. Seaberg as to Award of Restricted Shares Granted under the Stock Incentive Plan of 2004 (A similar agreement has been made with the following named executive officer as to the number of shares indicated: Randy M. Schrick – 7,000 shares (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the Quarter ended December 31, 2004 (File number 000-17196))
|
10.8
|
Guidelines for Issuance of Fiscal 2006 Restricted Share Awards (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (File number 000-17196))
|
10.9
|
Agreement with Ladd M. Seaberg as to Award of Restricted Shares Granted under the Stock Incentive Plan of 2004 (A similar agreement has been made with the following named executive officer as to the number of shares indicated: Randy M. Schrick – 13, 500 shares) (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (File number 000-17196))
|
10.34
|
Non-Employee Director Restricted Share Award Agreement effective October 21, 2011 of John Speirs (Similar agreements were made for the same number of shares with Michael Braude, John Byom, Cloud L. Cray, Gary Gradinger, Linda Miller, Karen Seaberg and Daryl Schaller) (Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (File number 000-17196))
|
10.35
|
Guidelines on Issuance of Fiscal 2011 Restricted Share Awards (Incorporated by reference to Exhibit 10.48 of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011 (File number 000-17196))
|
10.36
|
Agreement with Timothy Newkirk as to Award of Restricted Shares Granted Under the Stock Incentive Plan of 2004 with respect to Fiscal 2011 (Similar agreements have been made for 16,500 shares to each of the following named executive officers: Don Tracy, Randy M. Schrick, Donald Coffey and Scott Phillips) (Incorporated by reference to Exhibit 10.49 of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011 (File number 000-17196))
|
10.37
|
Compensation Claw Back Policy (Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed December 12, 2011 (File number 000-17196))
|
10.38
|
LLC Interest Assignment and Purchase Agreement dated February 1, 2012 between MGPI Processing, Inc. and Illinois Corn Processing Holdings, Inc. (Incorporated by reference to Exhibit 10.51 of the Company’s Report on Form 10-K for the transition period from July 1, 2011 to December 31, 2011 (File number 000-17196))
|
10.39
|
Guidelines on Issuance of 2011 Transition Period Restricted Stock Unit Awards (Incorporated by reference to Exhibit 10.52 of the Company’s Report on Form 10-K for the transition period from July 1, 2011 to December 31, 2011 (File number 000-17196))
|
*10.40
|
Form of Award Agreement for Restricted Stock Unit Awards granted under the Stock Incentive Plan of 2004
|
*10.41
|
Guidelines on Issuance of Fiscal 2012 Restricted Stock Unit Awards
|
14
|
Code of Conduct (Incorporated by reference to Exhibit 14 of the Company’s Annual Report on Form 10-K for the Fiscal Year ended June 20, 2010 (File number 000-17196))
|
*21
|
Subsidiaries of the Company
|
*23.1
|
Consent of KPMG, LLP, Independent Registered Public Accounting Firm
|
24
|
Powers of Attorney executed by all officers and directors of the Company who have signed this report on Form 10-K (Incorporated by reference to the signature pages of this report)
|
*31.1
|
CEO Certification pursuant to Rule 13a-14(a)
|
*31.2
|
CFO Certification pursuant to Rule 13a-14(a)
|
*32.1
|
CEO Certification furnished pursuant to Rule 13a-14(b) and 18 U.S.C. 1350
|
*32.2
|
CFO Certification furnished pursuant to Rule 13a-14(b)
|
*101
|
The following financial information from MGP Ingredients, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2012, formatted in XBRL (Extensible Business Reporting Language) includes: (i) Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011 and , (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Changes in Stockholders' Equity, (v) Consolidated Statements of Cash Flows (and in the case of (ii), (iii), (iv) and (v)) for the year ended December 31, 2012, the six months ended December 31, 2011, and the year ended June 30, 2011, and (vi) the Notes to the Consolidated Financial Statements. In accordance with Regulation S-T, the XBRL - formatted interactive data files that comprise this Exhibit 101 shall be deemed "furnished" and not "filed."
|
MGP INGREDIENTS, INC. | |
By /s/Timothy W. Newkirk | |
Timothy W. Newkirk, President and Chief Executive Officer
|
Name
|
Title
|
Date
|
/s/Timothy W. Newkirk
Timothy W. Newkirk
|
President and Chief Executive
Officer
|
March 12, 2013
|
/s/Don Tracy
Don Tracy
|
Vice President and Chief Financial
Officer (Principal Financial and
Accounting Officer)
|
March 12, 2013
|
/s/Michael Braude
Michael Braude
|
Director
|
March 12, 2013
|
/s/John E. Byom
John E. Byom
|
Director
|
March 12, 2013
|
/s/Cloud L. Cray, Jr.
Cloud L. Cray, Jr.
|
Director
|
March 12, 2013
|
/s/Gary Gradinger
Gary Gradinger
|
Director
|
March 12, 2013
|
/s/Daryl R. Schaller
Daryl R. Schaller
|
Director
|
March 12, 2013
|
/s/ Karen Seaberg
Karen Seaberg
|
Director
|
March 12, 2013
|
/s/John R. Speirs
John R. Speirs
|
Director; Chairman of the Board
|
March 12, 2013
|
Date of Grant: _______________, 20__
|
||
Restricted Stock Units
|
1.
|
Award of Restricted Stock Units
. The Restricted Stock Units specified above are being awarded by the Company to the Participant pursuant to the terms and provisions of the 2004 Plan and of the Guidelines for Issuance of the 20___ Restricted Stock Unit Awards (the “Guidelines”) adopted by the Human Resources Committee of the Board of Directors of the Company, true copies of which are attached hereto as Exhibits A and B and incorporated herein by reference.
|
2.
|
Vesting in Restricted Stock Units
. Subject to the provisions of the Guidelines, the Restricted Stock Units shall vest in the Participant upon the Participant’s completion of five (5) full years of employment with the Company or any of its Subsidiaries commencing on ___________, 20__. Shares will be issued following vesting in accordance with the Guidelines. Except as provided in the Guidelines, the Restricted Stock Units awarded to the Participant shall be forfeited to the Company if the Participant’s employment with the Company and its Subsidiaries is terminated prior to the end of the applicable Restriction Period. Notwithstanding vesting, this award and any shares issued or amounts paid hereunder are subject to the Company's claw back policy, as referenced in the Guidelines, as it may be amended.
|
3.
|
Restriction on Transfer
. The Participant shall not voluntarily sell, exchange, transfer, pledge, hypothecate, or otherwise dispose of any Restricted Stock Units or the right to receive shares of Common Stock under this Restricted Stock Unit award to any other person or entity. Any disposition or purported disposition made in violation of this paragraph shall be null and void, and the Company shall not recognize or give effect to such disposition on its books and records.
|
4.
|
Controlling Provisions
. The provisions of the Guidelines shall apply to the award made under this Agreement. In the event of a conflict between the provisions of this Agreement and the Guidelines, the provisions of the Guidelines will control.
|
MGP INGREDIENTS, INC.
|
||
By:
|
||
Signature of Participant
|
Percentage of voting
securities directly or
indirectly owned by
Registrant:
|
State or Country
of incorporation or
organization:
|
|
MGPI Processing, Inc.
|
100
|
Kansas
|
MGPI of Indiana, LLC
|
100
|
Delaware
|
MGPI Pipeline, Inc.
|
100
|
Kansas
|
DM Ingredients GmbH
|
50
|
Germany
|
Illinois Corn Processing, LLC
|
30
|
Delaware
|
|
1.
|
I have reviewed this annual report on Form 10-K of MGP Ingredients, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 12, 2013
|
|
|
/s/Timothy W. Newkirk | ||
President and Principal Executive Officer |
|
1.
|
I have reviewed this annual report on Form 10-K of MGP Ingredients, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 12, 2013
|
|
|
/s/Donald P. Tracy | ||
Vice President, Chief Financial Officer, | ||
and Principal Financial and Accounting Officer |
Date: March 12, 2013
|
|
|
/s/Timothy W. Newkirk | ||
President and Chief Executive Officer |
Date: March 12, 2013
|
|
|
/s/Donald P. Tracy | ||
Vice President and Chief Financial Officer |