KANSAS
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45-4082531
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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100 Commercial Street, Atchison, Kansas
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66002
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(Address of principal executive offices)
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(Zip Code)
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Page
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Quarter Ended
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Year to Date Ended
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||||||||||||
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June 30,
2014 |
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June 30,
2013 |
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June 30,
2014 |
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June 30,
2013 |
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Sales
|
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$
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85,903
|
|
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$
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83,707
|
|
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$
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170,485
|
|
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$
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172,425
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Less: excise taxes
|
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5,336
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4,312
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10,922
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6,626
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||||
Net sales
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80,567
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79,395
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159,563
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165,799
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Cost of sales (a)
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72,169
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74,114
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144,364
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153,289
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||||
Gross profit
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8,398
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5,281
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15,199
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12,510
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Selling, general and administrative expenses
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5,166
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4,770
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10,238
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10,645
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Other operating costs
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160
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—
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160
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58
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||||
Income from operations
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3,072
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|
511
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4,801
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1,807
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|
||||
Interest expense, net
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(218
|
)
|
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(277
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)
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(416
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)
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(560
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)
|
||||
Equity method investment earnings (loss)
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2,331
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|
|
71
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5,666
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(871
|
)
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||||
Income from continuing operations before income taxes
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5,185
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|
305
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10,051
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376
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Provision for income taxes
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86
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25
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167
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25
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||||
Net income from continuing operations
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5,099
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280
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9,884
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351
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||||
Discontinued operations, net of tax
(Note 6)
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—
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—
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—
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1,406
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||||
Net income
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5,099
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280
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9,884
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1,757
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Other comprehensive income (loss), net of tax
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500
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(141
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)
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325
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(290
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)
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Comprehensive income
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$
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5,599
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$
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139
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$
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10,209
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$
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1,467
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Basic and diluted earnings per share
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Income from continuing operations
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$
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0.28
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$
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0.02
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$
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0.55
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$
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0.02
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Income from discontinued operations
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—
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—
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—
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0.08
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Net income
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$
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0.28
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$
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0.02
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$
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0.55
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$
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0.10
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Dividends and dividend equivalents per common share
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$
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—
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$
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—
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$
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0.05
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$
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0.05
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(a)
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Includes related party purchases of
$9,008
and
$1,329
for the quarters ended
June 30, 2014
and
2013
, respectively. Includes related party purchases of
$16,140
and
$4,792
for the year to date periods ended
June 30, 2014
and
2013
, respectively. See
Note 2. Equity Method Investments
.
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June 30,
2014 |
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December 31,
2013 |
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Current Assets
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Cash and cash equivalents
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$
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883
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$
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2,857
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Receivables (less allowance for doubtful accounts: June 30, 2014 -
$7
; December 31, 2013 - $18)
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34,737
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27,821
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Inventory
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31,947
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34,917
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Prepaid expenses
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2,097
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848
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Deferred income taxes
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3,303
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4,977
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Refundable income taxes
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176
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466
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Total current assets
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73,143
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71,886
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Property and equipment
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196,796
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194,687
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Less accumulated depreciation and amortization
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(130,342
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)
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(124,443
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)
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Property and equipment, net
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66,454
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70,244
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Equity method investments
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12,786
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7,123
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Other assets
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2,391
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2,076
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Total assets
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$
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154,774
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$
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151,329
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Current Liabilities
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Current maturities of long-term debt
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$
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1,583
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$
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1,557
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Accounts payable
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18,342
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23,107
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Accounts payable to affiliate, net
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3,268
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1,204
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Accrued expenses
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7,314
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8,282
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Total current liabilities
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30,507
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34,150
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Long-term debt, less current maturities
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2,814
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3,611
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Revolving credit facility
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19,009
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18,000
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Deferred credit
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4,098
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3,925
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Accrued retirement health and life insurance benefits
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3,720
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4,423
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Other noncurrent liabilities
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684
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|
640
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Deferred income taxes
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3,303
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4,977
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|
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Total liabilities
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64,135
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69,726
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Commitments and Contingencies –
(Note 4)
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Stockholders’ Equity
|
|
|
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Capital stock
|
|
|
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Preferred, 5% non-cumulative; $10 par value; authorized 1,000 shares; issued and outstanding 437 shares
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4
|
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4
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Common stock
|
|
|
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No par value; authorized 40,000,000 shares; issued 18,115,965 shares at June 30, 2014 and December 31, 2013, 17,643,371 and 17,750,421 shares outstanding at June 30, 2014 and December 31, 2013, respectively
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6,715
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6,715
|
|
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Additional paid-in capital
|
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8,879
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|
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8,728
|
|
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Retained earnings
|
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75,663
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|
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66,686
|
|
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Accumulated other comprehensive loss, net of tax
|
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321
|
|
|
(4
|
)
|
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Treasury stock, at cost
|
|
|
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Shares of
472,594
and 365,544 at June 30, 2014 and December 31, 2013, respectively
|
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(943
|
)
|
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(526
|
)
|
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Total stockholders’ equity
|
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90,639
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|
|
81,603
|
|
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Total liabilities and stockholders’ equity
|
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$
|
154,774
|
|
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$
|
151,329
|
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|
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Year to Date Ended
|
||||||
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June 30,
2014 |
|
June 30,
2013 |
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
9,884
|
|
|
$
|
1,757
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
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Depreciation and amortization
|
|
6,108
|
|
|
5,951
|
|
||
Gain on sale of bioplastics manufacturing business
|
|
—
|
|
|
(1,453
|
)
|
||
Loss on sale of assets, net
|
|
163
|
|
|
—
|
|
||
Share based compensation
|
|
271
|
|
|
763
|
|
||
Equity method investment (earnings) loss
|
|
(5,666
|
)
|
|
871
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
Restricted cash
|
|
—
|
|
|
12
|
|
||
Receivables, net
|
|
(6,916
|
)
|
|
4,168
|
|
||
Inventory
|
|
2,970
|
|
|
(4,575
|
)
|
||
Prepaid expenses
|
|
(1,249
|
)
|
|
(1,145
|
)
|
||
Refundable income taxes
|
|
290
|
|
|
7
|
|
||
Accounts payable
|
|
(3,499
|
)
|
|
(781
|
)
|
||
Accounts payable to affiliate, net
|
|
2,064
|
|
|
(4,008
|
)
|
||
Accrued expenses
|
|
(968
|
)
|
|
1,049
|
|
||
Deferred credit
|
|
173
|
|
|
(175
|
)
|
||
Accrued retirement health and life insurance benefits and other noncurrent liabilities
|
|
(331
|
)
|
|
(480
|
)
|
||
Other
|
|
(417
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
|
2,877
|
|
|
1,961
|
|
||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
||
Additions to property and equipment
|
|
(3,594
|
)
|
|
(1,757
|
)
|
||
Proceeds from sale of bioplastics manufacturing business
|
|
—
|
|
|
2,797
|
|
||
Net cash provided by (used in) investing activities
|
|
(3,594
|
)
|
|
1,040
|
|
||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
||
Purchase of treasury stock
|
|
(537
|
)
|
|
—
|
|
||
Payment of dividends
|
|
(907
|
)
|
|
(916
|
)
|
||
Principal payments on long-term debt
|
|
(771
|
)
|
|
(855
|
)
|
||
Proceeds from revolving credit facility
|
|
34,683
|
|
|
59,036
|
|
||
Payments on revolving credit facility
|
|
(33,674
|
)
|
|
(60,266
|
)
|
||
Loan fees incurred with borrowings
|
|
(51
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(1,257
|
)
|
|
(3,001
|
)
|
||
Decrease in cash and cash equivalents
|
|
(1,974
|
)
|
|
—
|
|
||
Cash and cash equivalents, beginning of year
|
|
2,857
|
|
|
—
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
883
|
|
|
$
|
—
|
|
|
|
Capital
Stock
Preferred
|
|
Issued
Common
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Total
|
||||||||||||||
Balance, December 31, 2013
|
|
$
|
4
|
|
|
$
|
6,715
|
|
|
$
|
8,728
|
|
|
$
|
66,686
|
|
|
$
|
(4
|
)
|
|
$
|
(526
|
)
|
|
$
|
81,603
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,884
|
|
|
—
|
|
|
—
|
|
|
9,884
|
|
|||||||
Change in pension plans (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|||||||
Change in post employment benefits (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
370
|
|
|
—
|
|
|
370
|
|
|||||||
Change in translation adjustment on non-consolidated foreign subsidiary, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||
Dividends and dividend equivalents declared and paid, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(907
|
)
|
|
—
|
|
|
—
|
|
|
(907
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
151
|
|
|
—
|
|
|
|
|
|
120
|
|
|
271
|
|
|||||||
Common shares reacquired due to taxes derived from vesting of restricted stock and restricted stock units
|
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(537
|
)
|
|
(537
|
)
|
|||||||
Balance, June 30, 2014
|
|
$
|
4
|
|
|
$
|
6,715
|
|
|
$
|
8,879
|
|
|
$
|
75,663
|
|
|
$
|
321
|
|
|
$
|
(943
|
)
|
|
$
|
90,639
|
|
(a)
|
See
Note 7. Employee Benefit Plans
for amounts reclassified from Accumulated Other Comprehensive Income (Loss).
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Finished goods
|
|
$
|
9,500
|
|
|
$
|
11,355
|
|
Barreled distillate
|
|
9,688
|
|
|
10,310
|
|
||
Work in process
|
|
2,547
|
|
|
2,737
|
|
||
Raw materials
|
|
4,670
|
|
|
5,183
|
|
||
Maintenance materials
|
|
5,029
|
|
|
4,766
|
|
||
Other
|
|
513
|
|
|
566
|
|
||
Total
|
|
$
|
31,947
|
|
|
$
|
34,917
|
|
•
|
Level 1 - quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.
|
•
|
Level 2 - observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
•
|
Level 3 - unobservable inputs for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
ICP’s Operating results:
|
|
|
|
|
|
|
|
|
||||||||
Net sales (a)
|
|
$
|
72,798
|
|
|
$
|
61,377
|
|
|
$
|
131,647
|
|
|
$
|
94,227
|
|
Cost of sales and expenses (b)
|
|
58,805
|
|
|
(61,034
|
)
|
|
106,747
|
|
|
(97,114
|
)
|
||||
Net income (loss)
|
|
$
|
13,993
|
|
|
$
|
343
|
|
|
$
|
24,900
|
|
|
$
|
(2,887
|
)
|
(a)
|
Includes related party sales to MGPI of
$8,273
and
$741
for the quarters ended
June 30, 2014
and
2013
, respectively, and
$14,618
and
$3,400
for the year to date periods ended
June 30, 2014
and
2013
, respectively.
|
(b)
|
Includes depreciation and amortization of
$691
and
$1,170
for the quarters ended
June 30, 2014
and
2013
, respectively, and
$1,363
and
$2,340
for the year to date periods ended
June 30, 2014
and
2013
, respectively.
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
ICP (a)
|
|
$
|
2,341
|
|
|
$
|
62
|
|
|
$
|
5,588
|
|
|
$
|
(907
|
)
|
DMI (50% interest)
|
|
(10
|
)
|
|
9
|
|
|
78
|
|
|
36
|
|
||||
|
|
$
|
2,331
|
|
|
$
|
71
|
|
|
$
|
5,666
|
|
|
$
|
(871
|
)
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
ICP (26% interest) (a)
|
|
$
|
12,241
|
|
|
$
|
6,653
|
|
DMI (50% interest)
|
|
545
|
|
|
470
|
|
||
|
|
$
|
12,786
|
|
|
$
|
7,123
|
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
Continuing Operations:
|
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations attributable to shareholders
|
|
$
|
5,099
|
|
|
$
|
280
|
|
|
9,884
|
|
|
$
|
351
|
|
|
Less: Amounts allocated to participating securities (nonvested shares and units)
(i)
|
|
218
|
|
|
17
|
|
|
423
|
|
|
24
|
|
||||
Net income from continuing operations attributable to common shareholders
|
|
$
|
4,881
|
|
|
$
|
263
|
|
|
$
|
9,461
|
|
|
$
|
327
|
|
|
|
|
|
|
|
|
|
|
||||||||
Discontinued Operations:
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations attributable to shareholders
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,406
|
|
Less: Amounts allocated to participating securities (nonvested shares and units)
(i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||
Discontinued operations attributable to common shareholders
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,310
|
|
|
|
|
|
|
|
|
|
|
||||||||
Share information:
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares
(ii)
|
|
17,277,225
|
|
|
17,006,922
|
|
|
17,261,824
|
|
|
17,003,056
|
|
||||
Potential dilutive securities
(iii)
|
|
—
|
|
|
134
|
|
|
—
|
|
|
25
|
|
||||
Diluted weighted average common shares
|
|
17,277,225
|
|
|
17,007,056
|
|
|
17,261,824
|
|
|
17,003,081
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
0.28
|
|
|
$
|
0.02
|
|
|
$
|
0.55
|
|
|
$
|
0.02
|
|
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.08
|
|
||||
Net income
(iv)
|
|
$
|
0.28
|
|
|
$
|
0.02
|
|
|
$
|
0.55
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
0.28
|
|
|
$
|
0.02
|
|
|
$
|
0.55
|
|
|
$
|
0.02
|
|
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.08
|
|
||||
Net income
(iv)
|
|
$
|
0.28
|
|
|
$
|
0.02
|
|
|
$
|
0.55
|
|
|
$
|
0.10
|
|
(i)
|
Participating securities include
303,664
and
724,012
nonvested restricted shares for the quarters
June 30, 2014
and
2013
, respectively, as well as
470,470
and
421,014
restricted share units for the quarters ended
June 30, 2014
and
2013
, respectively.
|
(ii)
|
Under the two-class method, basic weighted average common shares exclude outstanding nonvested participating securities consisting of restricted share awards of
303,664
and
724,012
for the quarters ended
June 30, 2014
and
2013
, respectively.
|
(iii)
|
Anti-dilutive shares related to stock options totaled
10,000
and
18,000
for the quarters ended
June 30, 2014
and
2013
, respectively, and
10,000
and
19,000
for the year to date periods ended
June 30, 2014
and
2013
, respectively.
|
(iv)
|
See
Note 2. Equity Method Investments
for further discussion of earnings per share for the quarter and year to date periods ended
June 30, 2014
.
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
Net Sales to Customers
|
|
|
|
|
|
|
|
|
||||||||
Distillery products
|
|
$
|
65,403
|
|
|
$
|
63,912
|
|
|
$
|
130,335
|
|
|
$
|
134,716
|
|
Ingredient solutions
|
|
15,164
|
|
|
15,483
|
|
|
29,228
|
|
|
30,885
|
|
||||
Other
(i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
198
|
|
||||
Total
|
|
80,567
|
|
|
79,395
|
|
|
159,563
|
|
|
165,799
|
|
||||
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
||||||||
Distillery products
|
|
2,111
|
|
|
2,037
|
|
|
4,200
|
|
|
4,038
|
|
||||
Ingredient solutions
|
|
578
|
|
|
585
|
|
|
1,161
|
|
|
1,170
|
|
||||
Other
(i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Corporate
|
|
377
|
|
|
361
|
|
|
747
|
|
|
723
|
|
||||
Total
|
|
3,066
|
|
|
2,983
|
|
|
6,108
|
|
|
5,951
|
|
||||
Income (Loss) from Continuing Operations before Income Taxes
|
|
|
|
|
|
|
|
|
||||||||
Distillery products
|
|
5,964
|
|
|
3,136
|
|
|
11,416
|
|
|
7,483
|
|
||||
Ingredient solutions
|
|
1,447
|
|
|
875
|
|
|
1,746
|
|
|
2,665
|
|
||||
Other
(i)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
||||
Corporate
|
|
(2,226
|
)
|
|
(3,706
|
)
|
|
(3,111
|
)
|
|
(9,682
|
)
|
||||
Total
|
|
$
|
5,185
|
|
|
$
|
305
|
|
|
$
|
10,051
|
|
|
$
|
376
|
|
|
|
As of June 30, 2014
|
|
As of December 31, 2013
|
||||
Identifiable Assets
|
|
|
|
|
||||
Distillery products
|
|
$
|
98,596
|
|
|
$
|
97,875
|
|
Ingredient solutions
|
|
25,105
|
|
|
24,954
|
|
||
Other
(i)
|
|
—
|
|
|
—
|
|
||
Corporate
|
|
31,073
|
|
|
28,500
|
|
||
Total
|
|
$
|
154,774
|
|
|
$
|
151,329
|
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
Service cost
|
|
$
|
16
|
|
|
$
|
31
|
|
|
$
|
44
|
|
|
$
|
64
|
|
Interest cost
|
|
35
|
|
|
39
|
|
|
81
|
|
|
82
|
|
||||
Amortization of prior service cost
|
|
(84
|
)
|
|
(156
|
)
|
|
(239
|
)
|
|
(323
|
)
|
||||
Amortization of net actuarial loss
|
|
5
|
|
|
6
|
|
|
5
|
|
|
14
|
|
||||
Prior service cost recognized due to current curtailment
|
|
(52
|
)
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
||||
Total post-retirement benefit cost / (income)
|
|
$
|
(80
|
)
|
|
$
|
(80
|
)
|
|
$
|
(161
|
)
|
|
$
|
(163
|
)
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
Interest cost
|
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
44
|
|
|
$
|
42
|
|
Expected return on plan assets
|
|
(26
|
)
|
|
(28
|
)
|
|
(52
|
)
|
|
(57
|
)
|
||||
Amortization of net actuarial loss
|
|
5
|
|
|
16
|
|
|
10
|
|
|
33
|
|
||||
Total pension benefit cost
|
|
$
|
1
|
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
18
|
|
Stock options granted but not exercised
|
10,000
|
|
Restricted stock to non-employees (authorized but not granted)
|
30,110
|
|
Restricted stock to employees and executives (authorized but not granted)
|
424,000
|
|
Total
|
464,110
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
June 30, 2014
|
|
June 30, 2013
|
|
June 30, 2014
|
|
June 30, 2013
|
||||||||
Balance at beginning of period
|
$
|
699
|
|
|
$
|
99
|
|
|
$
|
1,142
|
|
|
$
|
126
|
|
Provision for additional expense
|
184
|
|
|
—
|
|
|
313
|
|
|
1
|
|
||||
Payments and adjustments
|
(336
|
)
|
|
(16
|
)
|
|
(908
|
)
|
|
(44
|
)
|
||||
Balance at end of period
|
$
|
547
|
|
|
$
|
83
|
|
|
$
|
547
|
|
|
$
|
83
|
|
|
|
Quarter Ended
|
|
Year to Date Ended
|
||||||||||||
|
|
June 30,
2014 |
|
June 30,
2013 |
|
June 30,
2014 |
|
June 30,
2013 |
||||||||
Distillery Products
|
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
|
$
|
65,403
|
|
|
$
|
63,912
|
|
|
$
|
130,335
|
|
|
$
|
134,716
|
|
Pre-Tax Income
|
|
5,964
|
|
|
3,136
|
|
|
11,416
|
|
|
7,483
|
|
||||
Ingredient Solutions
|
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
|
15,164
|
|
|
15,483
|
|
|
29,228
|
|
|
30,885
|
|
||||
Pre-Tax Income
|
|
1,447
|
|
|
875
|
|
|
1,746
|
|
|
2,665
|
|
||||
Other
|
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
|
—
|
|
|
—
|
|
|
—
|
|
|
198
|
|
||||
Pre-Tax Loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
|
June 30,
2014 |
|
December 31,
2013 |
||||
Cash and cash equivalents
|
|
$
|
883
|
|
|
$
|
2,857
|
|
Working capital
|
|
42,636
|
|
|
37,736
|
|
||
Credit facility, notes payable and long-term debt outstanding
|
|
23,406
|
|
|
23,168
|
|
||
Amounts available under lines of credit
|
|
22,004
|
|
|
23,920
|
|
||
Stockholders’ equity
|
|
90,639
|
|
|
81,603
|
|
|
|
Year to Date Ended
|
||||||
|
|
June 30, 2014
|
|
June 30, 2013
|
||||
Depreciation and amortization
|
|
$
|
6,108
|
|
|
$
|
5,951
|
|
Capital expenditures
|
|
(3,594
|
)
|
|
(1,757
|
)
|
||
Cash flows from operations
|
|
2,877
|
|
|
1,961
|
|
|
|
Year to Date Ended
|
||||||
|
|
June 30, 2014
|
|
June 30, 2013
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net income
|
|
$
|
9,884
|
|
|
$
|
1,757
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
6,108
|
|
|
5,951
|
|
||
Gain on sale of bioplastics manufacturing business
|
|
—
|
|
|
(1,453
|
)
|
||
Loss on sale of assets, net
|
|
163
|
|
|
—
|
|
||
Share based compensation
|
|
271
|
|
|
763
|
|
||
Equity method investment (earnings) loss
|
|
(5,666
|
)
|
|
871
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Restricted cash
|
|
—
|
|
|
12
|
|
||
Receivables, net
|
|
(6,916
|
)
|
|
4,168
|
|
||
Inventory
|
|
2,970
|
|
|
(4,575
|
)
|
||
Prepaid expenses
|
|
(1,249
|
)
|
|
(1,145
|
)
|
||
Refundable income taxes
|
|
290
|
|
|
7
|
|
||
Accounts payable
|
|
(3,499
|
)
|
|
(781
|
)
|
||
Accounts payable to affiliate, net
|
|
2,064
|
|
|
(4,008
|
)
|
||
Accrued expenses
|
|
(968
|
)
|
|
1,049
|
|
||
Deferred credit
|
|
173
|
|
|
(175
|
)
|
||
Accrued retirement health and life insurance benefits and other noncurrent liabilities
|
|
(331
|
)
|
|
(480
|
)
|
||
Other
|
|
(417
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
|
$
|
2,877
|
|
|
$
|
1,961
|
|
•
|
Receivables increased
$6,916
for the year to date period ended
June 30, 2014
compared to a decrease of
$4,168
for the year to date period ended
June 30, 2013
. The increase in receivables was due to an increase in sales for the quarter ended
June 30, 2014
as compared to the quarter ended
June 30, 2013
as well as the timing of cash receipts.
|
•
|
Accounts payable decreased
$3,499
for the year to date period ended
June 30, 2014
compared to a decrease of
$781
for the year to date period ended
June 30, 2013
, with the resulting change due primarily to timing of cash disbursements.
|
•
|
Accrued expenses decreased
$968
for the year to date period ended
June 30, 2014
compared to an increase of
$1,049
for the year to date period ended
June 30, 2013
. The decrease in accrued liabilities was primarily due to timing of cash disbursements related to 2013 bonus accruals.
|
|
|
(a) Total
Number of
Shares (or
Units)
Purchased
|
|
|
(b) Average
Price Paid
per Share (or
Unit)
|
|
|
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs
|
||||||
April 1, 2014 through April 30, 2014
|
|
—
|
|
(1)
|
|
$
|
7.13
|
|
(1)
|
|
—
|
|
|
$
|
—
|
|
May 1, 2014 through May 31, 2014
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
||||
June 1, 2014 through June 30, 2014
|
|
60,708
|
|
|
|
|
|
|
—
|
|
|
|
||||
Total
|
|
60,708
|
|
|
|
|
|
|
—
|
|
|
|
(1)
|
Aggregate number of shares repurchased to satisfy withholding tax obligations under restricted stock that vested during the month.
|
Date:
|
August 7, 2014
|
By
|
/s/ Augustus C. Griffin
|
|
|
|
Augustus C. Griffin, President and Chief Executive Officer
|
|
|
|
|
Date:
|
August 7, 2014
|
By
|
/s/ Donald P. Tracy
|
|
|
|
Donald P. Tracy, Vice President, Finance and Chief Financial Officer
|
Exhibit Number
|
Description of Exhibit
|
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))
|
3.1
|
Articles of Incorporation of MGP Ingredients, Inc. (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))
|
3.2
|
Certificate of Amendment to Articles of Incorporation of MGP Ingredients, 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))
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3.3
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Bylaws of MGP Ingredients, Inc. (Incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 filed March 13, 2014 (File number 000-17196))
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*10.1
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Form of Award Agreement for Fiscal 2014 Restricted Stock Unit Awards granted under the Non-Employee Director Equity Incentive Plan
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*10.2
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Amendment 2 to Amended and Restated Credit Agreement dated August 5, 2014, between Wells Fargo Bank, National Association and MGP Ingredients, Inc., MGPI Processing, Inc., MGPI Pipeline, Inc. and MGPI of Indiana, LLC
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*31.1
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CEO Certification pursuant to Rule 13a-14(a)
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*31.2
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CFO Certification pursuant to Rule 13a-14(a)
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*32.1
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CEO Certification furnished pursuant to Rule 13a-14(b) and 18 U.S.C. 1350
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*32.2
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CEO Certification furnished pursuant to Rule 13a-14(b) and 18 U.S.C. 1350
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*101
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The following financial information from MGP Ingredients, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, formatted in XBRL (Extensible Business Reporting Language) includes: (i) Condensed Consolidated Balance Sheets as of June 30, 2014, and December 31, 2013, (ii) Condensed Consolidated Statements of Comprehensive Income for the six months ended June 30, 2014 and 2013, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014, and 2013, (iv) Condensed Consolidated Statement of Changes in Stockholders' Equity, and (v) the Notes to Condensed Consolidated Financial Statements.
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*Filed herewith
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1.
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Issuance of Restricted Stock Units
. Pursuant to action of the Board of Directors of the Company, as of the Date of Grant, the Company awards to the Participant the number of Restricted Stock Units identified above; provided, however, that the Restricted Stock Units hereby awarded are nontransferable by the Participant during the Vesting Period (defined below in Section 2) and are subject to the risk of forfeiture described below. The Restricted Stock Units are being issued by the Company to the Participant as a Restricted Stock Unit award pursuant to the terms and provisions of the Plan, a true copy of which is attached hereto as Exhibit A and incorporated herein by reference. Each Restricted Stock Unit is a bookkeeping entry that represents the right of the Participant to receive one share of Common Stock upon future vesting, subject to the terms and conditions and subject to the risks of forfeiture and cancellation set forth in this Agreement and the Plan.
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2.
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Vesting of Restricted Stock Units
. Subject to the provisions of the Plan, the Restricted Stock Units shall vest in the Participant upon the Participant’s completion of three (3) full years of service on the Board of Directors of the Company (“Vesting Period”) commencing on
June 3
, 20
14
. The Restricted Stock Units awarded to the Participant shall be forfeited to the Company if the Participant resigns as a director during his or her term and prior to the end of the Vesting Period. Notwithstanding the above, in the event of (i) a Change in Control (as defined in the Plan) while the Participant is a member of the Board of Directors of the Company, or (ii) the Participant’s death while serving on the Board of Directors of the Company, all previously granted Restricted Stock Units under this Agreement not yet free of the restrictions of this Section 2 shall become immediately free of such restrictions and 100% vested.
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3.
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Payment
. On the date any Restricted Stock Units granted pursuant to the Agreement vest, the Company shall transfer a number of shares of Common Stock to the Participant (or such other person entitled to receive payment pursuant to this Agreement and the Plan) equal to the number of Restricted Stock Units that vest on such vesting date.
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4.
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Restriction on Transfer
. The Participant may not sell, assign, transfer, pledge, hypothecate, or otherwise dispose of any Restricted Stock Units to any other person or entity during the Vesting Period. 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.
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5.
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Rights With Respect to Restricted Stock Units
. The Restricted Stock Units do not represent a current interest in any shares of Common Stock. The Participant shall not have any rights of a shareholder with respect to the shares underlying the Restricted Stock Units (including, without limitation, any voting rights or any right to dividends paid with respect to the shares underlying the Restricted Stock Units). Without limiting the foregoing, the Participant shall not be entitled to any dividend equivalents with respect to the Restricted Stock Units to reflect any dividends payable on shares.
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6.
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Controlling Provisions
. The provisions of the Plan shall apply to the award made under this Agreement. In the event of a conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will control.
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WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as sole Lender
By: Name: Title: |
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MGP INGREDIENTS, INC.
By: Name: Title: |
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MGPI PIPELINE, INC.
By: Name: Title: |
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MGPI PROCESSING, INC.
By: Name: Title: |
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MGPI OF INDIANA, LLC
By: Name: Title: |
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1.
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I have reviewed this Quarterly Report on Form 10-Q of MGP Ingredients, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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August 7, 2014
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/s/ Augustus C. Griffin_________
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of MGP Ingredients, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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August 7, 2014
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/s/Donald P. Tracy
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Vice President, Finance and Chief Financial Officer
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Date:
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August 7, 2014
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/s/ Augustus C. Griffin
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President and Chief Executive Officer
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Date:
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August 7, 2014
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/s/Donald P. Tracy
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Vice President, Finance and Chief Financial Officer
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