(Mark One)
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X
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Kansas
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45-4082531
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(State or Other Jurisdiction
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(I.R.S. Employer
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of Incorporation or Organization)
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Identification No.)
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100 Commercial Street, Box 130, 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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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, no par value
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NASDAQ Global Select Market
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(1)
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Portions of the MGP Ingredients, Inc. Proxy Statement for the Annual Meeting of Stockholders to be held on
June 1, 2017
are incorporated by reference into Part III of this report to the extent set forth herein.
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Business
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Selected Financial Data
and Supplementary Financial Information
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Consolidated Statements of Income - Years Ended December 31, 2016, 2015, and 2014
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Consolidated Statements of Comprehensive Income - Years Ended December 31, 2016, 2015, and 2014
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Consolidated Balance Sheets - December 31, 2016 and 2015
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Consolidated Statements of Cash Flows – Years Ended December 31, 201
6, 2015, and 2014
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Item 16.
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Form 10-K Summary
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Name
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Age
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Position
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First elected to officer position
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Augustus C. Griffin
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57
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President and Chief Executive Officer
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2014
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Thomas K. Pigott
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52
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Vice President, Finance and Chief Financial Officer
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2015
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Stephen J. Glaser
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56
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Vice President, Production and Engineering
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2015
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David E. Dykstra
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53
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Vice President, Alcohol Sales and Marketing
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2009
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Michael R. Buttshaw
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54
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Vice President, Ingredient Sales and Marketing
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2014
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David E. Rindom
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61
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Vice President and Chief Administrative Officer
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2000
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Andrew P. Mansinne
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57
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Vice President, Brands
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2016
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•
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Because our brands, internally developed and acquired, are early in their growth cycle or have not yet been developed, they have not achieved extensive brand recognition. Accordingly, if consumers do not accept our brands, we will not be able to penetrate our markets and our growth may be limited.
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•
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We depend, in part, on the marketing initiatives and efforts of our independent distributors in promoting our products and creating consumer demand and we have limited or no control regarding their promotional initiatives or the success of their efforts.
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•
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We depend on our independent distributors to distribute our products. The failure or inability of even a few of our independent distributors to adequately distribute our products within their territories could harm our sales and result in a decline in our results of operations.
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•
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We compete for shelf space in retail stores and for marketing focus by our independent distributors, most of whom carry extensive product portfolios.
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•
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The laws and regulations of several states prohibit changes of independent distributors, except under certain limited circumstances, making it difficult to terminate an independent distributor for poor performance without reasonable cause, as defined by applicable statutes. Any difficulty or inability to replace independent distributors, poor performance of our major independent distributors or our inability to collect accounts receivable from our major independent distributors could harm our business. There can be no assurance that the independent distributors and retailers we use will continue to purchase our products or provide our products with adequate levels of promotional support.
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Stock Sales Price
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Dividend and Dividend Equivalent Information (per Share and Unit)
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||||||||||||
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High
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Low
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Declared
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Paid
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||||||||
2016
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||||||||
First Quarter
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$
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26.52
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$
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19.91
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$
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0.08
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$
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—
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Second Quarter
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39.50
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22.11
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—
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0.08
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||||
Third Quarter
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44.25
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33.38
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0.02
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0.02
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||||
Fourth Quarter
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53.22
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31.93
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0.02
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0.02
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||||
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$
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0.12
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$
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0.12
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2015
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||||||||
First Quarter
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$
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16.71
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$
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13.06
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$
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0.06
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|
$
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—
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Second Quarter
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19.22
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12.32
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—
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0.06
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Third Quarter
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17.31
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12.85
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—
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—
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Fourth Quarter
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27.56
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15.56
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—
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—
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||||
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$
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0.06
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$
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0.06
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(a) Total
Number of
Shares (or
Units)
Purchased
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(b) Average
Price Paid
per Share (or
Unit)
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(c) Total
Number of
Shares (or
Units)
Purchased as
Part of
Publicly
Announced
Plans or
Programs
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(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs
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||||
October 1, 2016 through October 31, 2016
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—
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—
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—
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—
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November 1, 2016 through November 30, 2016
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—
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—
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—
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—
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December 1, 2016 through December 31, 2016
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—
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—
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—
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—
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Total
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—
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—
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Year Ended December 31,
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2016
(a)(h)(i)
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2015
(a)
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2014
(a),(b)
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2013
(c)
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2012
(d)
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Consolidated Statements of Income Data:
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Net sales
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$
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318,263
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$
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327,604
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$
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313,403
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$
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323,264
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$
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334,335
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Income before income taxes
(e)
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$
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44,717
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$
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38,418
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$
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25,940
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$
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(6,521
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)
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$
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1,942
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Net income (loss)
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$
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31,184
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$
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26,191
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$
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23,675
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$
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(4,929
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)
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$
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1,624
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Basic and Diluted Earnings (Loss) Per Share ("EPS")
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Income (loss) from continuing operations
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$
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1.82
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$
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1.48
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$
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1.32
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$
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(0.34
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)
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$
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0.09
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Income from discontinued operations
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—
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—
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—
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0.05
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—
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|||||
Net income (loss)
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$
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1.82
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$
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1.48
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$
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1.32
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|
$
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(0.29
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)
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$
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0.09
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Cash dividends per common share
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$
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0.12
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$
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0.06
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$
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0.05
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|
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$
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0.05
|
|
|
$
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0.05
|
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Consolidated Balance Sheet Data:
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Total assets
(f)
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$
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225,336
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$
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194,310
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$
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160,215
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$
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151,329
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$
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163,171
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Long-term debt, less current maturities
(f)(g)
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31,642
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$
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30,115
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$
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7,286
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|
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$
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21,611
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|
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$
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31,061
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(a)
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During
2016
,
2015
and
2014
, we determined that we would more likely than not realize a portion of our deferred tax asset and reduced the valuation allowance by
$718
,
$2,385
, and $7,446, respectively. The 2014 reduction amount included an adjustment to other comprehensive loss of $172.
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(b)
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In January 2014 and October 2014, we experienced a fire at one of our facilities. Insurance recoveries totaled
$8,290
for 2014.
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(c)
|
In connection with the proxy contest related to our 2013 Annual Meeting of stockholders, we were involved in various proceedings with respect to MGP Ingredients, Inc. Voting Trust, the 2013 Annual Meeting and the Special Committee of the Board of Directors and incurred $5,465 of expenses in 2013.
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(d)
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Net income for 2012 includes a $4,055 gain related to the sale of a 20 percent interest in our joint venture, ICP.
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(e)
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For 2013, we reported discontinued operations. Accordingly, the caption for 2013 was Loss from continuing operations before income taxes.
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(f)
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In November 2015, the FASB issued ASU 2015-17,
Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.
The ASU was effective for public business entities for interim and annual periods in fiscal years beginning after December 15, 2016. The intent of the new standard was to simplify reporting of deferred taxes. As such, the standard allows netting of current and non-current deferred taxes within a reporting jurisdiction and the resulting deferred tax assets and liabilities are presented as non-current in our Consolidated Balance Sheets at
December 31, 2016
and
2015
since we elected to early adopt the ASU on a prospective basis. The balance sheet classifications for years ended
December 31, 2014
, 2013, and 2012 were not adjusted to be consistent with
2016
and
2015
reporting.
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(g)
|
In April 2015, the FASB issued ASU No. 2015-03,
Interest - Imputation of Interest (Subtopic 835-30)
, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Our consolidated balance sheets have been adjusted and retrospectively adjusted at
December 31, 2015
and
2014
, respectively, for the presentation of debt issuance costs as required by ASU 2015-03. As of
December 31, 2016
,
2015
, and
2014
, we had
$576
,
$636
, and
$384
,
respectively,
of unamortized loan fees related to our debt that was reclassified as a direct deduction from the carrying amount of the related debt liability in the consolidated balance sheets. Years ended December 31, 2013 and 2012 were not adjusted to be consistent with
2016
,
2015
, and
2014
reporting.
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(h)
|
In March 2016, the FASB issued ASU No. 2016-09,
Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting
. We elected to early adopt the accounting update in the quarter ended September 30, 2016 and, due to a required change in accounting principle required by the ASU adoption and the vesting of
128,500
shares of restricted stock during the quarter of adoption, we received a combined federal and state tax effected excess tax benefit of
$1,571
from windfalls related to employee share-based compensation that was recognized as a reduction to income tax expense. Years ended
December 31, 2015
,
2014
, 2013, and 2012 were not adjusted to be consistent with
2016
reporting.
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(i)
|
Net income for 2016 included a legal settlement agreement and a gain on sale of long-lived assets totaling
$3,385
.
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•
|
Overview
|
•
|
Results of Operations
|
•
|
Distillery Products Segment
|
•
|
Ingredient Solutions Segment
|
•
|
Cash Flow, Financial Condition and Liquidity
|
•
|
Off Balance Sheet Obligations
|
•
|
Critical Accounting Policies and Estimates
|
•
|
New Accounting Pronouncements
|
•
|
Our shift in sales mix to higher margin products has contributed to a
12.2 percent
increase in gross profit within the distillery products segment in
2016
over the prior year.
|
•
|
Our shift in sales mix to higher margin products has contributed to a
7.3 percent
increase in gross profit within the ingredient solutions segment in
2016
over the prior year.
|
•
|
In March 2016, we announced the introduction of Till American Wheat Vodka®, distilled using the finest Kansas wheat, with initial distribution in the states of Kansas and Missouri. Within the first seven months following its release, Till American Wheat Vodka® had already received five prestigious awards, including a silver medal at each of the following: Sommelier Challenge™ International Wine and Spirits Competition in San Diego, the San Diego Spirits Festival, San Francisco World Spirits Competition, and the 2016 New York World Wine and Spirits Competition. The San Francisco World Spirits Competition and the New York event are each considered to be one of the most respected and influential spirits competitions of their type on an international scale. In May 2016, Till Vodka earned Beverage World magazine’s BevStar Gold Award in the spirits category. In October 2016, we announced that distribution was expanded to the states of Iowa and Indiana.
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•
|
In November 2016, we acquired the George Remus® brand from Queen City Whiskey LLC. The prior owner used sourced whiskey from us to launch and successfully build the brand in a small geography. The George Remus® brand portfolio currently consists of three expressions: George Remus® Bourbon Whiskey, George Remus® Rye Whiskey, and George Remus® Limited Edition Rye Whiskey. At the time of the acquisition, distribution was limited to the states of Ohio, Kentucky and Indiana.
|
•
|
Capital Expenditures:
Capital expenditures focus largely on supporting innovation and product development, improving operational reliability, and strengthening our ability to support all aspects of growth in the whiskey category.
|
•
|
Select Inventories:
As demand grows for American whiskeys, in both the United States and global markets, we are building our inventories of aged premium whiskeys to fully participate in this growth. This initiative helps us build strong partnerships and open new relationships with potential customers, in addition to supporting the development of our own brands.
|
•
|
Selling, General, and Administrative Expenses ("SG&A"):
As needed to support our long-term growth objectives, resources and capabilities are being added, particularly in sales and marketing, as well as in research and development.
|
•
|
Regarding our
Capital Expenditures
growth strategy:
|
•
|
Regarding our
Select Inventories
growth strategy:
|
•
|
Regarding our
SG&A
growth strategy:
|
1.
|
In May 2016, James L. Bareuther was elected to serve as a director to fill a vacancy. Mr. Bareuther served as chief operating officer of Brown-Forman Corporation from 2003 until his retirement in 2010. He has served as a director of First Beverage Group since 2012 and as chairman of its board of directors since April 2014.
|
2.
|
Effective November 2016, we appointed wine and spirits industry leader Andrew Mansinne to the newly created position of Vice President of Brands. Mr. Mansinne served for the past year as a managing director at Intercontinental Beverage Capital, as well as President of Tattico Strategies, which he founded, in Bethesda, Maryland. Mr. Mansinne served from 1995 to 2007 at Brown-Forman Corporation, Louisville, Kentucky, where he held increasingly important positions during his tenure from Brand Director to Senior Vice President.
|
•
|
In 2016, we completed a British Retail Consortium ("BRC") audit with outstanding results, achieving a Grade AA rating for both our Atchison and Lawrenceburg facilities. The Atchison facility earned the BRC’s highest food and beverage safety rating and the Lawrenceburg facility earned the BRC's highest beverage safety rating, which were previously measured on a scale with a maximum score of Grade A.
|
•
|
In September 2016, we completed the initial implementation of our Enterprise Risk Management program. The ongoing program will include identifying additional risk mitigation opportunities, re-prioritizing risks, as needed, and the continuing monitoring and reporting of results to management and the Board of Directors.
|
•
|
2016 marked the 75th anniversary of our founding in 1941 by the late Cloud L. Cray, Sr. Observances tied to the theme "75 Years Strong" occurred throughout the year. One observance was on March 29, 2016, when Company leaders rang the closing bell for the Nasdaq stock exchange in New York City's Time Square.
|
•
|
In August 2016, we announced that MGP was honored by The Kansas Department of Commerce as one of 21 Regional Business Award winners across the state in recognition of our business achievements and high level of community support and involvement. This was the second time in just four years that MGP received the award.
|
•
|
In August 2016, our Board of Directors announced the initiation of quarterly dividend declarations and payments, which recognizes our strong foundation and the progress we have made in delivering shareholder value. Going forward, we expect to be able to support our growth programs and maintain our capital base while returning capital to shareholders on a quarterly basis.
|
|
Year Ended December 31,
|
|
%
|
|||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2016 v. 2015
|
|
2015 v. 2014
|
|
||||||||
Net sales
|
$
|
318,263
|
|
|
$
|
327,604
|
|
|
$
|
313,403
|
|
|
(2.9
|
)%
|
|
4.5
|
%
|
|
Cost of sales
|
252,980
|
|
|
269,071
|
|
|
284,972
|
|
|
(6.0
|
)
|
|
(5.6
|
)
|
|
|||
Gross profit
|
65,283
|
|
|
58,533
|
|
|
28,431
|
|
|
11.5
|
|
|
105.9
|
|
|
|||
Gross margin %
|
20.5
|
%
|
|
17.9
|
%
|
|
9.1
|
%
|
|
2.6
|
|
pp
(a)
|
8.8
|
|
pp
(a)
|
|||
SG&A expenses
|
26,693
|
|
|
25,683
|
|
|
20,101
|
|
|
3.9
|
|
|
27.8
|
|
|
|||
Insurance recoveries
|
—
|
|
|
—
|
|
|
(8,290
|
)
|
|
N/A
|
|
|
N/A
|
|
|
|||
Other operating (income) costs, net
|
(3,385
|
)
|
|
—
|
|
|
1
|
|
|
N/A
|
|
|
N/A
|
|
|
|||
Operating income
|
41,975
|
|
|
32,850
|
|
|
16,619
|
|
|
27.8
|
|
|
97.7
|
|
|
|||
Operating margin %
|
13.2
|
%
|
|
10.0
|
%
|
|
5.3
|
%
|
|
3.2
|
|
pp
|
4.7
|
|
pp
|
|||
Equity method investment earnings
|
4,036
|
|
|
6,102
|
|
|
10,137
|
|
|
(33.9
|
)
|
|
(39.8
|
)
|
|
|||
Interest expense, net
|
(1,294
|
)
|
|
(534
|
)
|
|
(816
|
)
|
|
142.3
|
|
|
(34.6
|
)
|
|
|||
Income before income taxes
|
44,717
|
|
|
38,418
|
|
|
25,940
|
|
|
16.4
|
|
|
48.1
|
|
|
|||
Income tax expense
|
13,533
|
|
|
12,227
|
|
|
2,265
|
|
|
10.7
|
|
|
439.8
|
|
|
|||
Effective tax expense rate %
|
30.3
|
%
|
|
31.8
|
%
|
|
8.7
|
%
|
|
(1.5
|
)
|
pp
|
23.1
|
|
pp
|
|||
Net income
|
$
|
31,184
|
|
|
$
|
26,191
|
|
|
$
|
23,675
|
|
|
19.1
|
%
|
|
10.6
|
%
|
|
Net income margin %
|
9.8
|
%
|
|
8.0
|
%
|
|
7.6
|
%
|
|
1.8
|
|
pp
|
0.4
|
|
pp
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic and diluted EPS
|
$
|
1.82
|
|
|
$
|
1.48
|
|
|
$
|
1.32
|
|
|
23.0
|
%
|
|
12.1
|
%
|
|
|
|
|
Operating income
|
|
Change
|
|
Operating income
|
|
Change
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Operating income for 2015 and 2014
|
|
$
|
32,850
|
|
|
|
|
|
$
|
16,619
|
|
|
|
|
|||
|
Increase in gross profit - distillery products segment
(a)
|
|
6,174
|
|
|
18.8
|
|
pp
(b)
|
|
28,330
|
|
|
170.5
|
|
pp
(b)
|
||
|
Increase in gross profit - ingredient solutions segment
(a)
|
|
576
|
|
|
1.8
|
|
pp
|
|
1,772
|
|
|
10.7
|
|
pp
|
||
|
Change in SG&A
|
|
(1,010
|
)
|
|
(3.1
|
)
|
pp
|
|
(5,582
|
)
|
|
(33.6
|
)
|
pp
|
||
|
Change in insurance recoveries
|
|
—
|
|
|
—
|
|
|
|
(8,290
|
)
|
|
(49.9
|
)
|
pp
|
||
|
Change in other operating income, net
|
|
3,385
|
|
|
10.3
|
|
pp
|
|
1
|
|
|
—
|
|
|
||
Operating income for 2016 and 2015
|
|
$
|
41,975
|
|
|
27.8
|
%
|
|
|
$
|
32,850
|
|
|
97.7
|
%
|
|
|
|
Basic and Diluted EPS
|
|
Change
|
|
Basic and Diluted EPS
|
|
Change
|
|
||||||
Basic and diluted EPS for 2015 and 2014
|
|
$
|
1.48
|
|
|
|
|
$
|
1.32
|
|
|
|
|
||
Change in operating income:
|
|
|
|
|
|
|
|
|
|
||||||
Operations
(a)
|
|
0.21
|
|
|
14.2
|
|
pp
(b)
|
1.30
|
|
|
98.5
|
|
pp
(b)
|
||
Insurance recoveries
(a)
|
|
—
|
|
|
—
|
|
|
(0.44
|
)
|
|
(33.3
|
)
|
pp
|
||
Other operating income, net
(a)
|
|
0.13
|
|
|
8.8
|
|
pp
|
—
|
|
|
—
|
|
|
||
Change in equity method investments
(a)
|
|
(0.08
|
)
|
|
(5.4
|
)
|
pp
|
(0.21
|
)
|
|
(15.9
|
)
|
pp
|
||
Change in interest expense
(a)
|
|
(0.03
|
)
|
|
(2.0
|
)
|
pp
|
0.01
|
|
|
0.7
|
|
pp
|
||
Change in weighted average shares outstanding
(c)
|
|
0.05
|
|
|
3.4
|
|
pp
|
0.02
|
|
|
1.5
|
|
pp
|
||
Tax: Change in valuation allowance
|
|
(0.10
|
)
|
|
(6.8
|
)
|
pp
|
—
|
|
|
—
|
|
|
||
Tax: Implementation of ASU No. 2016-09
|
|
0.09
|
|
|
6.1
|
|
pp
|
—
|
|
|
—
|
|
|
||
Tax: Change in effective tax rate (excluding tax items above for 2016)
|
|
0.07
|
|
|
4.7
|
|
pp
|
(0.52
|
)
|
|
(39.4
|
)
|
pp
|
||
Basic and diluted EPS for 2016 and 2015
|
|
$
|
1.82
|
|
|
23.0
|
%
|
|
$
|
1.48
|
|
|
12.1
|
%
|
|
(a)
|
Changes are net of tax based on the effective tax rate for each base year, excluding the change in valuation allowance.
|
(b)
|
Percentage points ("pp").
|
|
DISTILLERY PRODUCTS NET SALES
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year-versus-Year Net Sales Change Increase/ (Decrease)
|
|
Year-versus-Year Volume Change
|
||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
% Change
|
||||||||
|
Amount
|
|
Amount
|
|
|
|
|||||||||||
Premium beverage alcohol
|
$
|
150,364
|
|
|
$
|
131,347
|
|
|
$
|
19,017
|
|
|
14.5
|
%
|
|
|
|
Industrial alcohol
|
77,290
|
|
|
98,917
|
|
|
(21,627
|
)
|
|
(21.9
|
)
|
|
|
||||
Food grade alcohol
(a)
|
227,654
|
|
|
230,264
|
|
|
(2,610
|
)
|
|
(1.1
|
)
|
|
|
||||
Fuel grade alcohol
(a)
|
7,372
|
|
|
7,366
|
|
|
6
|
|
|
0.1
|
|
|
|
||||
Distillers feed and related co-products
|
21,780
|
|
|
26,182
|
|
|
(4,402
|
)
|
|
(16.8
|
)
|
|
|
||||
Warehouse services
|
8,437
|
|
|
6,413
|
|
|
2,024
|
|
|
31.6
|
|
|
|
||||
Total distillery products
|
$
|
265,243
|
|
|
$
|
270,225
|
|
|
$
|
(4,982
|
)
|
|
(1.8
|
)%
|
|
(7.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
(a)
Volume change for alcohol products
|
|
|
|
|
|
|
|
|
|||||||||
|
Other Financial Information
|
|
|
||||||||||||||
|
Year Ended December 31,
|
Year-versus-Year Increase/(Decrease)
|
|
|
|||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
||||||||
Gross profit
|
$
|
56,836
|
|
|
$
|
50,662
|
|
|
$
|
6,174
|
|
|
12.2
|
%
|
|
|
|
Gross margin %
|
21.4
|
%
|
|
18.7
|
%
|
|
2.7
|
|
pp
(b)
|
|
|
|
|
|
DISTILLERY PRODUCTS NET SALES
|
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year-versus-Year Net Sales Change Increase/ (Decrease)
|
|
Year-versus-Year Volume Change
|
|
||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
% Change
|
|
||||||||
|
Amount
|
|
Amount
|
|
|
|
|
|||||||||||
Premium beverage alcohol
|
$
|
131,347
|
|
|
$
|
106,911
|
|
|
$
|
24,436
|
|
|
22.9
|
%
|
|
|
|
|
Industrial alcohol
|
98,917
|
|
|
101,464
|
|
|
(2,547
|
)
|
|
(2.5
|
)
|
|
|
|
||||
Food grade alcohol
(a)
|
230,264
|
|
|
208,375
|
|
|
21,889
|
|
|
10.5
|
|
|
|
|
||||
Fuel grade alcohol
(a)
|
7,366
|
|
|
12,987
|
|
|
(5,621
|
)
|
|
(43.3
|
)
|
|
|
|
||||
Distillers feed and related co-products
|
26,182
|
|
|
30,361
|
|
|
(4,179
|
)
|
|
(13.8
|
)
|
|
|
|
||||
Warehouse services
|
6,413
|
|
|
4,838
|
|
|
1,575
|
|
|
32.6
|
|
|
|
|
||||
Total distillery products
|
$
|
270,225
|
|
|
$
|
256,561
|
|
|
$
|
13,664
|
|
|
5.3
|
%
|
|
(1.5
|
)%
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(a) Volume change for alcohol products
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Other Financial Information
|
|
|
|
||||||||||||||
|
Year Ended December 31,
|
Year-versus-Year Increase/(Decrease)
|
|
|
|
|||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
|
|
||||||||
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
$
|
50,662
|
|
|
$
|
22,332
|
|
|
$
|
28,330
|
|
|
126.9
|
%
|
|
|
|
|
Gross margin %
|
18.7
|
%
|
|
8.7
|
%
|
|
10.0
|
|
pp
(b)
|
|
|
|
|
|
|
INGREDIENT SOLUTIONS NET SALES
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year-versus-Year Net Sales Change Increase/ (Decrease)
|
|
Year-versus-Year Volume Change
|
||||||||||||
|
2016
|
|
2015
|
|
$ Change
|
|
% Change
|
|
% Change
|
||||||||
|
Amount
|
|
Amount
|
|
|
|
|||||||||||
Specialty wheat starches
|
$
|
26,803
|
|
|
$
|
29,989
|
|
|
$
|
(3,186
|
)
|
|
(10.6
|
)%
|
|
|
|
Specialty wheat proteins
|
18,211
|
|
|
18,422
|
|
|
(211
|
)
|
|
(1.1
|
)
|
|
|
||||
Commodity wheat starch
|
7,002
|
|
|
7,079
|
|
|
(77
|
)
|
|
(1.1
|
)
|
|
|
||||
Commodity wheat proteins
|
1,004
|
|
|
1,889
|
|
|
(885
|
)
|
|
(46.9
|
)
|
|
|
||||
Total ingredient solutions
|
$
|
53,020
|
|
|
$
|
57,379
|
|
|
$
|
(4,359
|
)
|
|
(7.6
|
)%
|
|
(4.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Financial Information
|
|
|
||||||||||||||
|
Year Ended December 31,
|
|
Year-versus-year Increase/Decrease
|
|
|
||||||||||||
|
2016
|
|
2015
|
|
Change
|
|
% Change
|
|
|
||||||||
Gross profit
|
$
|
8,447
|
|
|
$
|
7,871
|
|
|
$
|
576
|
|
|
7.3
|
%
|
|
|
|
Gross margin %
|
15.9
|
%
|
|
13.7
|
%
|
|
2.2
|
|
pp
(a)
|
|
|
|
|
|
INGREDIENT SOLUTIONS NET SALES
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year-versus-Year Net Sales Change Increase/ (Decrease)
|
|
Year-versus-Year Volume Change
|
||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
% Change
|
||||||||
|
Amount
|
|
Amount
|
|
|
|
|||||||||||
Specialty wheat starches
|
$
|
29,989
|
|
|
$
|
28,217
|
|
|
$
|
1,772
|
|
|
6.3
|
%
|
|
|
|
Specialty wheat proteins
|
18,422
|
|
|
18,618
|
|
|
(196
|
)
|
|
(1.1
|
)
|
|
|
||||
Commodity wheat starch
|
7,079
|
|
|
7,884
|
|
|
(805
|
)
|
|
(10.2
|
)
|
|
|
||||
Commodity wheat proteins
|
1,889
|
|
|
2,123
|
|
|
(234
|
)
|
|
(11.0
|
)
|
|
|
||||
Total ingredient solutions
|
$
|
57,379
|
|
|
$
|
56,842
|
|
|
$
|
537
|
|
|
0.9
|
%
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Other Financial Information
|
|
|
||||||||||||||
|
Year Ended December 31,
|
|
Year-versus-year Increase/Decrease
|
|
|
||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
|
||||||||
|
|
|
|
|
|
||||||||||||
Gross profit
|
$
|
7,871
|
|
|
$
|
6,099
|
|
|
$
|
1,772
|
|
|
29.1
|
%
|
|
|
|
Gross margin %
|
13.7
|
%
|
|
10.7
|
%
|
|
3.0
|
|
pp
(a)
|
|
|
|
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
More than 5 years
|
||||||||||
Long term debt
|
$
|
2,324
|
|
|
$
|
358
|
|
|
$
|
758
|
|
|
$
|
816
|
|
|
$
|
392
|
|
Interest on Long term debt
|
267
|
|
|
80
|
|
|
119
|
|
|
61
|
|
|
7
|
|
|||||
Operating leases
|
9,700
|
|
|
3,397
|
|
|
2,936
|
|
|
2,374
|
|
|
993
|
|
|||||
Post-employment benefit plan obligations
|
3,948
|
|
|
502
|
|
|
1,024
|
|
|
957
|
|
|
1,465
|
|
|||||
Purchase commitments
|
80,274
|
|
|
76,380
|
|
(a)
|
3,634
|
|
|
260
|
|
|
—
|
|
|||||
Total
|
$
|
96,513
|
|
|
$
|
80,717
|
|
|
$
|
8,471
|
|
|
$
|
4,468
|
|
|
$
|
2,857
|
|
|
Year Ended December 31,
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||
Sales
|
$
|
328,081
|
|
|
$
|
345,887
|
|
|
$
|
338,352
|
|
|
Less: excise taxes
|
9,818
|
|
|
18,283
|
|
|
24,949
|
|
||||
Net sales
|
318,263
|
|
|
327,604
|
|
|
313,403
|
|
||||
Cost of sales
(a)
|
252,980
|
|
|
269,071
|
|
|
284,972
|
|
||||
Gross profit
|
65,283
|
|
|
58,533
|
|
|
28,431
|
|
||||
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
26,693
|
|
|
25,683
|
|
|
20,101
|
|
||||
Insurance recoveries (Note 16)
|
—
|
|
|
—
|
|
|
(8,290
|
)
|
||||
Other operating (income) costs, net
|
(3,385
|
)
|
|
—
|
|
|
1
|
|
||||
Operating income
|
41,975
|
|
32,850
|
|
32,850
|
|
|
16,619
|
|
|||
|
|
|
|
|
|
|||||||
Equity method investment earnings (Note 3)
|
4,036
|
|
|
6,102
|
|
|
10,137
|
|
||||
Interest expense, net
|
(1,294
|
)
|
|
(534
|
)
|
|
(816
|
)
|
||||
Income before income taxes
|
44,717
|
|
38,418
|
|
38,418
|
|
|
25,940
|
|
|||
|
|
|
|
|
|
|||||||
Income tax expense (Note 6)
|
13,533
|
|
|
12,227
|
|
|
2,265
|
|
||||
Net income
|
31,184
|
|
26,191
|
|
26,191
|
|
|
23,675
|
|
|||
|
|
|
|
|
|
|
||||||
Income attributable to participating securities
|
954
|
|
|
873
|
|
|
832
|
|
||||
Net income attributable to common shareholders and used in earnings per share calculation (Note 6)
|
$
|
30,230
|
|
|
$
|
25,318
|
|
|
$
|
22,843
|
|
|
|
|
|
|
|
|
|
||||||
Share information
|
|
|
|
|
|
|
||||||
Diluted weighted average common shares
|
16,643,811
|
|
|
17,123,556
|
|
|
17,305,866
|
|
||||
|
|
|
|
|
|
|||||||
Basic and diluted EPS
|
$
|
1.82
|
|
|
$
|
1.48
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
||||||
Dividends and dividend equivalents per common share
|
$
|
0.12
|
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
(a)
|
Includes related party purchases of
$29,596
, and
$40,206
,
$37,007
for the years ended
December 31, 2016
,
2015
, and
2014
, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
31,184
|
|
|
$
|
26,191
|
|
|
$
|
23,675
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|||||
Company sponsored benefit plans:
|
|
|
|
|
|
|
|||||
Change in pension plans, net of tax expense (benefit) of $0, $160, and $(155), respectively
|
—
|
|
|
244
|
|
|
133
|
|
|||
Change in post-employment benefits, net of tax expense (benefit) of $90, ($41), and ($6), respectively
|
134
|
|
|
(54
|
)
|
|
(846
|
)
|
|||
Change in translation adjustment and post-employment benefits of equity method investments, net of tax benefit of $6, $36, and $37, respectively
|
(7
|
)
|
|
42
|
|
|
(15
|
)
|
|||
Other comprehensive income (loss)
|
127
|
|
|
232
|
|
|
(728
|
)
|
|||
Comprehensive income
|
$
|
31,311
|
|
|
$
|
26,423
|
|
|
$
|
22,947
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,569
|
|
|
$
|
747
|
|
Receivables (less allowance for doubtful accounts: December 31, 2016, and 2015 - $24)
|
26,085
|
|
|
30,670
|
|
||
Inventory
|
78,858
|
|
|
58,701
|
|
||
Prepaid expenses
|
1,684
|
|
|
1,062
|
|
||
Refundable income taxes
|
2,705
|
|
|
—
|
|
||
Total current assets
|
110,901
|
|
|
91,180
|
|
||
|
|
|
|
||||
Property and equipment, net of accumulated depreciation and amortization
|
92,791
|
|
|
83,554
|
|
||
Equity method investments
|
18,934
|
|
|
18,563
|
|
||
Other assets
|
2,710
|
|
|
1,013
|
|
||
Total assets
|
$
|
225,336
|
|
|
$
|
194,310
|
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
4,359
|
|
|
$
|
3,345
|
|
Accounts payable
|
20,342
|
|
|
20,940
|
|
||
Accounts payable to affiliate, net
|
3,349
|
|
|
2,291
|
|
||
Accrued expenses
|
8,945
|
|
|
10,400
|
|
||
Income taxes payable
|
—
|
|
|
685
|
|
||
Total current liabilities
|
36,995
|
|
|
37,661
|
|
||
|
|
|
|
||||
Long-term debt, less current maturities
|
16,218
|
|
|
7,579
|
|
||
Revolving credit facility
|
15,424
|
|
|
22,536
|
|
||
Deferred credits
|
2,978
|
|
|
3,402
|
|
||
Accrued retirement health and life insurance benefits
|
3,604
|
|
|
4,136
|
|
||
Other non current liabilities
|
393
|
|
|
79
|
|
||
Deferred income taxes
|
3,432
|
|
|
2,757
|
|
||
Total liabilities
|
79,044
|
|
|
78,150
|
|
||
|
|
|
|
||||
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 shares at December 31, 2016 and 2015; 16,658,765 and 16,681,576 shares outstanding at December 31, 2016 and 2015, respectively
|
6,715
|
|
|
6,715
|
|
||
Additional paid-in capital
|
14,279
|
|
|
12,383
|
|
||
Retained earnings
|
142,652
|
|
|
113,531
|
|
||
Accumulated other comprehensive loss
|
(373
|
)
|
|
(500
|
)
|
||
Treasury stock, at cost, 1,457,200 and 1,434,389 shares at December 31, 2016 and 2015, respectively
|
(16,985
|
)
|
|
(15,973
|
)
|
||
Total stockholders’ equity
|
146,292
|
|
|
116,160
|
|
||
Total liabilities and stockholders’ equity
|
$
|
225,336
|
|
|
$
|
194,310
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
31,184
|
|
|
$
|
26,191
|
|
|
$
|
23,675
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
11,253
|
|
|
12,382
|
|
|
12,325
|
|
|||
Gain on property insurance recoveries
|
(230
|
)
|
|
—
|
|
|
(8,290
|
)
|
|||
Loss (gain) on sale of assets
|
(872
|
)
|
|
—
|
|
|
38
|
|
|||
Share-based compensation
|
2,402
|
|
|
1,414
|
|
|
930
|
|
|||
Excess tax benefits
|
—
|
|
|
453
|
|
|
463
|
|
|||
Equity method investment earnings
|
(4,036
|
)
|
|
(6,102
|
)
|
|
(10,137
|
)
|
|||
Distribution received from equity method investee
|
3,300
|
|
|
—
|
|
|
4,835
|
|
|||
Deferred income taxes, including change in valuation allowance
|
681
|
|
|
1,349
|
|
|
1,570
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||||
Receivables, net
|
4,585
|
|
|
2,002
|
|
|
(4,851
|
)
|
|||
Inventory, net of assets acquired in acquisition
|
(20,106
|
)
|
|
(24,260
|
)
|
|
476
|
|
|||
Prepaid expenses
|
(622
|
)
|
|
117
|
|
|
(331
|
)
|
|||
Refundable income taxes
|
(3,390
|
)
|
|
1,073
|
|
|
78
|
|
|||
Accounts payable
|
(3,178
|
)
|
|
3,653
|
|
|
(5,928
|
)
|
|||
Accounts payable to affiliate, net
|
1,058
|
|
|
(1,042
|
)
|
|
2,129
|
|
|||
Accrued expenses
|
(1,407
|
)
|
|
2,351
|
|
|
(373
|
)
|
|||
Deferred credits
|
(424
|
)
|
|
(697
|
)
|
|
174
|
|
|||
Accrued retirement health and life insurance benefits
|
(477
|
)
|
|
(703
|
)
|
|
(699
|
)
|
|||
Other, net
|
—
|
|
|
481
|
|
|
(272
|
)
|
|||
Net cash provided by operating activities
|
19,721
|
|
|
18,662
|
|
|
15,812
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Additions to property and equipment
|
(17,922
|
)
|
|
(30,526
|
)
|
|
(6,953
|
)
|
|||
Proceeds from property insurance recoveries
|
230
|
|
|
—
|
|
|
8,450
|
|
|||
Proceeds from sale of property and other
|
1,209
|
|
|
—
|
|
|
5
|
|
|||
Acquisition of George Remus®
|
(1,551
|
)
|
|
—
|
|
|
—
|
|
|||
Divestiture of DMI
|
351
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) investing activities
|
(17,683
|
)
|
|
(30,526
|
)
|
|
1,502
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Payment of dividends
|
(2,066
|
)
|
|
(1,087
|
)
|
|
(907
|
)
|
|||
Purchase of treasury stock
|
(1,518
|
)
|
|
(15,408
|
)
|
|
(672
|
)
|
|||
Loan fees incurred with borrowings
|
(114
|
)
|
|
(348
|
)
|
|
(66
|
)
|
|||
Principal payments on long-term debt
|
(2,346
|
)
|
|
(1,641
|
)
|
|
(1,555
|
)
|
|||
Proceeds on long-term debt
|
—
|
|
|
2,700
|
|
|
—
|
|
|||
Proceeds from credit agreement
|
27,184
|
|
|
26,092
|
|
|
62,146
|
|
|||
Principal payments on credit agreement
|
(22,356
|
)
|
|
(3,338
|
)
|
|
(73,476
|
)
|
|||
Net cash provided by (used in) financing activities
|
(1,216
|
)
|
|
6,970
|
|
|
(14,530
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash
|
822
|
|
|
(4,894
|
)
|
|
2,784
|
|
|||
Cash, beginning of year
|
747
|
|
|
5,641
|
|
|
2,857
|
|
|||
Cash, end of year
|
$
|
1,569
|
|
|
$
|
747
|
|
|
$
|
5,641
|
|
|
Capital
Stock
Preferred
|
|
Issued
Common
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Total
|
|||||||||||||||
Balance, December 31, 2013
(a)
|
$
|
4
|
|
|
$
|
6,715
|
|
|
$
|
9,755
|
|
|
$
|
65,659
|
|
|
$
|
(4
|
)
|
|
$
|
(526
|
)
|
|
$
|
81,603
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
23,675
|
|
|
—
|
|
|
—
|
|
|
23,675
|
|
||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(728
|
)
|
|
—
|
|
|
(728
|
)
|
||||||||
Dividends and dividend equivalents, net of estimated forfeitures
|
—
|
|
|
—
|
|
|
—
|
|
|
(907
|
)
|
|
—
|
|
|
—
|
|
|
(907
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
713
|
|
||||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
463
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
463
|
|
||||||||
Stock shares awarded, forfeited or vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218
|
|
|
218
|
|
||||||||
Stock shares repurchased for payment of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
|
(672
|
)
|
||||||||
Balance, December 2014
|
$
|
4
|
|
|
$
|
6,715
|
|
|
$
|
10,931
|
|
|
$
|
88,427
|
|
|
$
|
(732
|
)
|
|
$
|
(980
|
)
|
|
$
|
104,365
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
26,191
|
|
|
—
|
|
|
—
|
|
|
26,191
|
|
||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
232
|
|
|
—
|
|
|
232
|
|
||||||||
Dividends and dividend equivalents, net of estimated forfeitures
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,087
|
)
|
|
—
|
|
|
—
|
|
|
(1,087
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
999
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
999
|
|
||||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
453
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
453
|
|
||||||||
Stock shares awarded, forfeited or vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
415
|
|
|
415
|
|
||||||||
Stock shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,408
|
)
|
|
(15,408
|
)
|
||||||||
Balance, December 2015
|
$
|
4
|
|
|
$
|
6,715
|
|
|
$
|
12,383
|
|
|
$
|
113,531
|
|
|
$
|
(500
|
)
|
|
$
|
(15,973
|
)
|
|
$
|
116,160
|
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
31,184
|
|
|
—
|
|
|
—
|
|
|
31,184
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
—
|
|
|
127
|
|
||||||||
Dividends and dividend equivalents, net of estimated forfeitures
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,063
|
)
|
|
—
|
|
|
—
|
|
|
(2,063
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,896
|
|
||||||||
Excess tax benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Stock shares awarded, forfeited or vested
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|
506
|
|
||||||||
Stock shares repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,518
|
)
|
|
(1,518
|
)
|
||||||||
Balance, December 2016
|
$
|
4
|
|
|
$
|
6,715
|
|
|
$
|
14,279
|
|
|
$
|
142,652
|
|
|
$
|
(373
|
)
|
|
$
|
(16,985
|
)
|
|
$
|
146,292
|
|
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
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Interest costs charged to expense
|
|
$
|
1,294
|
|
|
$
|
534
|
|
|
$
|
816
|
|
Plus: Interest cost capitalized
|
|
198
|
|
|
297
|
|
|
107
|
|
|||
Total
|
|
$
|
1,492
|
|
|
$
|
831
|
|
|
$
|
923
|
|
•
|
Future realization of deferred tax assets is dependent on projected taxable income of the appropriate character from the Company's continuing operations.
|
•
|
Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable positive evidence.
|
•
|
The long carryback and carryforward periods permitted under the tax law are objectively verified positive evidence.
|
•
|
Tax planning strategies can be, depending on their nature, heavily weighted sources of objectively verifiable positive evidence when the strategies are available and can be reasonably executed. Tax planning strategies are actions that are prudent and feasible, considering current operations and strategic plans, which the Company ordinarily might not take, but would take to prevent a tax benefit from expiring unused. Tax planning strategies, if available, may accelerate the recovery of a deferred tax asset so the tax benefit of the deferred tax asset can be carried back.
|
•
|
Projections of future taxable income exclusive of reversing temporary differences are a source of positive evidence when the projections are combined with a history of recent profits and current financial trends and can be reasonably estimated.
|
NOTE 2:
|
OTHER BALANCE SHEET CAPTIONS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Finished goods
|
$
|
14,002
|
|
|
$
|
15,126
|
|
Barreled distillate (bourbon and whiskey)
|
50,941
|
|
|
28,278
|
|
||
Raw materials
|
4,274
|
|
|
6,675
|
|
||
Work in process
|
1,933
|
|
|
2,364
|
|
||
Maintenance materials
|
6,231
|
|
|
5,371
|
|
||
Other
|
1,477
|
|
|
887
|
|
||
Total
|
$
|
78,858
|
|
|
$
|
58,701
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Land, buildings and improvements
|
$
|
67,487
|
|
|
$
|
56,143
|
|
Transportation equipment
|
3,253
|
|
|
5,417
|
|
||
Machinery and equipment
|
164,871
|
|
|
152,742
|
|
||
Construction in progress
|
10,608
|
|
|
15,612
|
|
||
Property and equipment, at cost
|
246,219
|
|
|
229,914
|
|
||
Less accumulated depreciation and amortization
|
(153,428
|
)
|
|
(146,360
|
)
|
||
Property and equipment, net
|
$
|
92,791
|
|
|
$
|
83,554
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Employee benefit plans
|
$
|
820
|
|
|
$
|
1,027
|
|
Salaries and wages
|
5,641
|
|
|
6,790
|
|
||
Restructuring and severance charges
|
124
|
|
|
517
|
|
||
Property taxes
|
824
|
|
|
784
|
|
||
Other accrued expenses
|
1,536
|
|
|
1,282
|
|
||
Total
|
$
|
8,945
|
|
|
$
|
10,400
|
|
|
|
Year Ended December 31,
|
|
||||||
|
|
2016
|
|
2015
|
|
||||
USDA grant
(a)
|
|
$
|
1,434
|
|
|
$
|
1,949
|
|
|
LCD reimbursement
(b)
|
|
959
|
|
|
1,042
|
|
|
||
Other reimbursement
|
|
313
|
|
|
411
|
|
|
||
Deferred incentive
|
|
272
|
|
|
—
|
|
|
||
Total
|
|
$
|
2,978
|
|
|
$
|
3,402
|
|
|
(a)
|
In 2001, the United States Department of Agriculture developed a grant program for the gluten industry ("USDA grant") and the Company received nearly
$26,000
of grants required to be used for research, marketing, promotional and capital costs related to value added gluten and starch products.
|
(b)
|
In 2012, the Lawrenceburg Conservancy District ("LCD") in Greendale, IN agreed to reimburse the Company up to
$1,250
of certain capital maintenance costs of a Company owned warehouse structure that is integral to the efficacy of the LCD’s flood control system ("LCD reimbursement"). Certain capital maintenance activities were completed prior to December 31, 2012 and the remaining capital maintenance activities were completed during 2014. As of December 31, 2014 the Company had received a total of
$1,236
in reimbursements.
|
NOTE 3:
|
EQUITY METHOD INVESTMENTS
|
|
Year Ended December 31,
|
||||||||||
ICP’s Operating results:
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
(a)
|
$
|
177,401
|
|
|
$
|
166,905
|
|
|
$
|
236,486
|
|
Cost of sales and expenses
(b)
|
(163,837
|
)
|
|
(146,098
|
)
|
|
(196,551
|
)
|
|||
Net income
|
$
|
13,564
|
|
|
$
|
20,807
|
|
(c)
|
$
|
39,935
|
|
(a)
|
Includes related party sales to MGPI of
$27,675
,
$38,941
, and
$36,289
for
2016
,
2015
, and
2014
, respectively.
|
(b)
|
Includes depreciation and amortization of
$3,030
,
$2,634
, and
$2,847
for
2016
,
2015
, and
2014
, respectively.
|
(c)
|
Includes business interruption insurance proceeds of
$4,112
for
2015
.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
ICP (30% interest)
|
$
|
4,069
|
|
|
$
|
6,242
|
|
|
$
|
10,098
|
|
DMI (50% interest)
|
(33
|
)
|
(a)
|
(140
|
)
|
|
39
|
|
|||
Total
|
$
|
4,036
|
|
|
$
|
6,102
|
|
|
$
|
10,137
|
|
(a)
|
On December 23, 2016, the Company received its portion of the remaining DMI liquidation proceeds totaling
$351
. Prior to receiving the proceeds, the Company's equity method investment was
$384
. The difference of
$33
was recognized as an equity method investment loss for the year ended
December 31, 2016
.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
ICP (30% interest)
(a)
|
$
|
18,934
|
|
|
$
|
18,179
|
|
DMI (50% interest)
|
—
|
|
|
384
|
|
||
Total
|
$
|
18,934
|
|
|
$
|
18,563
|
|
(a)
|
During 2016, the Company received a
$3,300
cash distribution from ICP, which reduced the Company's investment in ICP.
|
NOTE 4:
|
GOODWILL AND OTHER INTANGIBLE ASSET
|
Balance as of December 31, 2015
|
$
|
—
|
|
Goodwill
|
1,500
|
|
|
Brand name (indefinite lived)
|
350
|
|
|
Balance as of December 31, 2016
|
$
|
1,850
|
|
NOTE 5:
|
CORPORATE BORROWINGS AND CAPITAL LEASE OBLIGATIONS
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Credit Agreement - Revolver, 2.45% (variable rate) due 2020
|
$
|
16,000
|
|
|
$
|
23,172
|
|
Credit Agreement - Fixed Asset Sub-Line term loan, 2.86% (variable rate) due 2020
|
5,253
|
|
|
6,254
|
|
||
Credit Agreement - term loan, 2.86% (variable rate) due 2020
|
13,000
|
|
|
—
|
|
||
Secured Promissory Note, 3.71% (variable rate) due 2022
|
2,324
|
|
|
2,670
|
|
||
Secured Promissory Note, 6.89% (variable rate), due 2016.
|
—
|
|
|
36
|
|
||
Capital Lease Obligation, 2.61%, due 2017
|
—
|
|
|
1,964
|
|
||
Unamortized loan fees
(a)
|
(576
|
)
|
|
(636
|
)
|
||
Total
|
36,001
|
|
|
33,460
|
|
||
Less current maturities of long term debt
|
(4,359
|
)
|
|
(3,345
|
)
|
||
Long-term debt
|
$
|
31,642
|
|
|
$
|
30,115
|
|
|
|
|
|
|
|
|
||||||
Year Ending
December 31,
|
|
Credit
Agreement
|
|
Long-Term
Debt
|
|
Total Debt
|
||||||
2017
|
|
$
|
—
|
|
|
$
|
358
|
|
|
$
|
358
|
|
2018
|
|
—
|
|
|
372
|
|
|
$
|
372
|
|
||
2019
|
|
—
|
|
|
386
|
|
|
$
|
386
|
|
||
2020
|
|
34,253
|
|
|
400
|
|
|
$
|
34,653
|
|
||
2021
|
|
—
|
|
|
416
|
|
|
$
|
416
|
|
||
Thereafter
|
|
—
|
|
|
392
|
|
|
$
|
392
|
|
||
Total
|
|
$
|
34,253
|
|
|
$
|
2,324
|
|
|
$
|
36,577
|
|
NOTE 6:
|
INCOME TAXES
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
12,637
|
|
|
$
|
8,954
|
|
|
$
|
—
|
|
State
|
342
|
|
|
1,003
|
|
|
229
|
|
|||
|
12,979
|
|
|
9,957
|
|
|
229
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(254
|
)
|
|
3,174
|
|
|
5,010
|
|
|||
State
|
808
|
|
|
(904
|
)
|
|
(2,974
|
)
|
|||
|
554
|
|
|
2,270
|
|
|
2,036
|
|
|||
Total
|
$
|
13,533
|
|
|
$
|
12,227
|
|
|
$
|
2,265
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
"Expected" provision at federal statutory rate
|
$
|
15,651
|
|
|
$
|
13,446
|
|
|
$
|
9,116
|
|
State income taxes, net
|
1,672
|
|
|
1,714
|
|
|
709
|
|
|||
Change in valuation allowance
|
(718
|
)
|
|
(2,385
|
)
|
|
(7,618
|
)
|
|||
Domestic production activity deduction
|
(1,247
|
)
|
|
(1,002
|
)
|
|
—
|
|
|||
Share-based compensation
(a)
|
(1,408
|
)
|
|
N/A
|
|
|
N/A
|
|
|||
Federal and state tax credits
|
(1,065
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
648
|
|
|
454
|
|
|
58
|
|
|||
Income tax expense
|
$
|
13,533
|
|
|
$
|
12,227
|
|
|
$
|
2,265
|
|
Effective tax rate
|
30.3
|
%
|
|
31.8
|
%
|
|
8.7
|
%
|
(a)
|
The Company elected to early adopt ASU No. 2016-09,
Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting,
in the quarter ended September 30, 2016 and, due to a required change in accounting principle, beginning that quarter, all excess tax benefits and deficiencies related to employee stock compensation are recognized within income tax expense in the Consolidated Statements of Income. The Company received a federal tax benefit of
$1,408
and a state benefit of
$163
for excess tax benefits in 2016 (see Note 9 for additional detail related to the ASU No. 2016-09 adoption).
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred income tax assets:
|
|
|
|
||||
Post-retirement liability
|
$
|
1,621
|
|
|
$
|
1,848
|
|
Deferred income
|
1,176
|
|
|
1,343
|
|
||
Share-based compensation
|
1,313
|
|
|
2,247
|
|
||
Capital loss carryforwards
|
716
|
|
|
1,444
|
|
||
State tax credit carryforwards
|
3,204
|
|
|
2,653
|
|
||
State operating loss carryforwards
|
1,151
|
|
|
2,216
|
|
||
Inventories
|
2,560
|
|
|
1,684
|
|
||
Other
|
1,381
|
|
|
2,224
|
|
||
Gross deferred income tax assets
|
$
|
13,122
|
|
|
$
|
15,659
|
|
Less: valuation allowance
|
(726
|
)
|
|
(1,444
|
)
|
||
Net deferred income tax assets
|
12,396
|
|
|
14,215
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Fixed assets
|
(14,313
|
)
|
|
(16,050
|
)
|
||
Equity method investments
|
(969
|
)
|
|
—
|
|
||
Other
|
(546
|
)
|
|
(922
|
)
|
||
Gross deferred income tax liabilities
|
(15,828
|
)
|
|
(16,972
|
)
|
||
Net deferred income tax liability
|
$
|
(3,432
|
)
|
|
$
|
(2,757
|
)
|
|
|
Valuation allowance
|
||
Balance at December 31, 2014
|
|
$
|
3,829
|
|
Reductions
|
|
2,385
|
|
|
Balance at December 31, 2015
|
|
$
|
1,444
|
|
Reductions
|
|
718
|
|
|
Balance at December 31, 2016
|
|
$
|
726
|
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning of year balance
|
$
|
613
|
|
|
$
|
613
|
|
|
$
|
566
|
|
Additions for tax positions of prior years
|
2
|
|
|
—
|
|
|
8
|
|
|||
Additions for tax positions of the current year
|
21
|
|
|
—
|
|
|
39
|
|
|||
Reduction for prior year tax positions
|
(48
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions for settlements
|
(545
|
)
|
|
|
|
|
|||||
End of year balance
|
$
|
43
|
|
|
$
|
613
|
|
|
$
|
613
|
|
NOTE 7:
|
EQUITY AND EPS
|
Dividend and Dividend Equivalent Information (per Share and Unit)
|
||||||||||||||
Declaration date
|
|
Payment date
|
|
Declared
|
|
Paid
|
|
Total payment
|
||||||
2016
|
|
|
|
|
|
|
|
|
||||||
March 7, 2016
|
|
April 14, 2016
|
|
$
|
0.08
|
|
|
$
|
0.08
|
|
|
$
|
1,378
|
|
August 1, 2016
|
|
September 8, 2016
|
|
0.02
|
|
|
0.02
|
|
|
344
|
|
|||
October 31, 2016
|
|
December 8, 2016
|
|
0.02
|
|
|
0.02
|
|
|
344
|
|
|||
|
|
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
$
|
2,066
|
|
2015
|
|
|
|
|
|
|
|
|
||||||
March 10, 2015
|
|
April 21, 2015
|
|
$
|
0.06
|
|
|
$
|
0.06
|
|
|
$
|
1,087
|
|
2014
|
|
|
|
|
|
|
|
|
||||||
February 28, 2014
|
|
April 9, 2014
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
$
|
907
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Operations:
|
|
|
|
|
|
|
|||||
Net income
(a)
|
$
|
31,184
|
|
|
$
|
26,191
|
|
|
$
|
23,675
|
|
Less: Income attributable to participating securities (unvested shares and units)
(b)
|
954
|
|
|
873
|
|
|
832
|
|
|||
Net income attributable to common shareholders
|
$
|
30,230
|
|
|
$
|
25,318
|
|
|
$
|
22,843
|
|
|
|
|
|
|
|
||||||
Share information:
|
|
|
|
|
|
||||||
Basic weighted average common shares
(c)
|
16,643,811
|
|
|
17,123,556
|
|
|
17,305,866
|
|
|||
Incremental shares from potential dilutive securities
(d)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average common shares
|
16,643,811
|
|
|
17,123,556
|
|
|
17,305,866
|
|
|||
|
|
|
|
|
|
|
|||||
Basic and diluted EPS
(e)
|
$
|
1.82
|
|
|
$
|
1.48
|
|
|
$
|
1.32
|
|
(a)
|
Net income attributable to all shareholders.
|
(b)
|
Participating securities include
0
,
128,500
, and
278,900
unvested restricted stock for the years ended
December 31, 2016
,
2015
, and
2014
, as well as
527,486
,
437,946
, and
413,288
RSUs for the years ended
December 31, 2016
,
2015
, and
2014
, respectively. Participating securities do not receive an allocation in periods when a loss is experienced.
|
(c)
|
Under the two class method, basic weighted average common shares exclude outstanding unvested participating securities consisting of restricted stock awards of
0
,
128,500
, and
278,900
for
2016
,
2015
, and
2014
, respectively.
|
(d)
|
Potential dilutive securities have not been included in the EPS computation in a period when a loss is experienced. At
December 31, 2016
and
2015
, the Company had
0
stock options outstanding and potentially dilutive, respectively. At
December 31, 2014
, the Company had
4,000
stock options outstanding and potentially dilutive.
|
(e)
|
Basic and diluted weighted average common shares for
2016
and
2015
were affected by the September 1, 2015, purchase of
950,000
shares of common stock in a privately negotiated transaction with F2 SEA, Inc., an affiliate of SEACOR Holdings, Inc., pursuant to a Stock Repurchase Agreement. SEACOR Holdings, Inc. is the
70 percent
owner of ICP, the Company's
30 percent
equity method investment.
|
|
|
Pension Plan Items
|
(a)
|
Post-Employment Benefit Plan Items
|
|
Equity Method Investment Translation Adjustment and Post-Employment Benefit Adjustment
|
|
Total
|
||||||||
Balance, December 31, 2013
|
|
$
|
(377
|
)
|
|
$
|
390
|
|
|
$
|
(17
|
)
|
|
$
|
(4
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
218
|
|
|
(1,620
|
)
|
|
(15
|
)
|
|
(1,417
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
(85
|
)
|
|
774
|
|
|
—
|
|
|
689
|
|
||||
Net 2014 other comprehensive income (loss)
|
|
133
|
|
|
(846
|
)
|
|
(15
|
)
|
|
(728
|
)
|
||||
Balance, December 31, 2014
|
|
$
|
(244
|
)
|
|
$
|
(456
|
)
|
|
$
|
(32
|
)
|
|
$
|
(732
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(355
|
)
|
|
47
|
|
|
(10
|
)
|
|
(318
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
599
|
|
|
(101
|
)
|
|
52
|
|
|
550
|
|
||||
Net 2015 other comprehensive income (loss)
|
|
244
|
|
|
(54
|
)
|
|
42
|
|
|
232
|
|
||||
Balance, December 31, 2015
|
|
$
|
—
|
|
|
$
|
(510
|
)
|
|
$
|
10
|
|
|
$
|
(500
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
—
|
|
|
113
|
|
|
(14
|
)
|
|
99
|
|
||||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
21
|
|
|
7
|
|
|
28
|
|
||||
Net 2016 other comprehensive income (loss)
|
|
—
|
|
|
134
|
|
|
(7
|
)
|
|
127
|
|
||||
Balance, December 31, 2016
|
|
$
|
—
|
|
|
$
|
(376
|
)
|
|
$
|
3
|
|
|
$
|
(373
|
)
|
(a)
|
The Company's pension benefit plans were terminated as of the quarter ended June 2015.
|
Details about Accumulated Other Comprehensive Income Components
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Consolidated Statements of Income
|
||
Post Employment Benefit Items:
|
|
|
|
|
||
Amortization of prior service cost
|
|
$
|
(338
|
)
|
|
(a)
|
Recognized net actuarial loss
|
|
269
|
|
|
(a)
|
|
|
|
(69
|
)
|
|
Total before tax
|
|
|
|
90
|
|
|
Tax expense
|
|
|
|
$
|
21
|
|
|
Net of tax
|
Equity Method Investment Adjustment:
|
|
|
|
|
||
Accumulated postretirement benefit obligation
|
|
$
|
13
|
|
|
|
|
|
(6
|
)
|
|
Tax benefit
|
|
|
|
$
|
7
|
|
|
Net of tax
|
Reclassifications for 2016
|
|
$
|
28
|
|
|
Total net of tax
|
(a)
|
These accumulated other comprehensive income components are included in the computation of net period post-employment benefit cost. See Note 9
for additional details.
|
NOTE 8:
|
COMMITMENTS AND CONTINGENCIES
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
4-5 years
|
|
More than 5 years
|
||||||||||
Long term debt
|
$
|
2,324
|
|
|
$
|
358
|
|
|
$
|
758
|
|
|
$
|
816
|
|
|
$
|
392
|
|
Interest on Long term debt
|
267
|
|
|
80
|
|
|
119
|
|
|
61
|
|
|
7
|
|
|||||
Operating leases
|
9,700
|
|
|
3,397
|
|
|
2,936
|
|
|
2,374
|
|
|
993
|
|
|||||
Post-employment benefit plan obligations
|
3,948
|
|
|
502
|
|
|
1,024
|
|
|
957
|
|
|
1,465
|
|
|||||
Purchase commitments
|
80,274
|
|
|
76,380
|
|
(a)
|
3,634
|
|
|
260
|
|
|
—
|
|
|||||
Total
|
$
|
96,513
|
|
|
$
|
80,717
|
|
|
$
|
8,471
|
|
|
$
|
4,468
|
|
|
$
|
2,857
|
|
•
|
On December 21, 2016, the U.S. Environmental Protection Agency (“EPA”) issued a Notice of Violation to the Company alleging the Company commenced construction of new aging warehouses for whiskey at its facility in Lawrenceburg, Indiana, without first applying for or obtaining a Clean Air Act permit and without adequately demonstrating to the EPA that emissions control equipment did not need to be installed to meet applicable air quality standards. The Company notes that neither EPA nor the State of Indiana have required emission control equipment for aging whiskey warehouses and, to our knowledge, no other distillers in the U.S. have been required to install emissions control equipment in their aging whiskey warehouses. No demand for a penalty has been made in connection with the Notice of Violation, but the Company believes it is probable that a penalty will be assessed. Although it is not possible to reasonably estimate a loss or range of loss at the date of this filing, the Company currently does not expect that the amount of any such penalty or related remedies would have a material adverse effect on the Company’s business, financial condition or results of operations.
|
•
|
A chemical release occurred at the Company's Atchison facility on October 21, 2016, which resulted in emissions venting into the air. The Company reported the event to the EPA, OSHA and Kansas and local authorities on that date, and is cooperating fully to investigate and ensure that all appropriate response actions are taken. The Company has also engaged outside experts to assist the investigation and response. The Company believes it is probable that a fine or penalty may be imposed by
one
or more regulatory authorities, but it is currently unable to reasonably estimate the amount thereof since the investigations are not complete and can take several months and up to a few years to complete. Private plaintiffs have initiated, and additional private plaintiffs may initiate, legal proceedings for damages resulting from the emission, but the Company is currently unable to reasonably estimate the amount of any such damages that might result. The Company's insurance is expected to provide coverage of any damages to private plaintiffs, subject to a deductible of
$250
, but certain regulatory fines or penalties may not be covered and there can be no assurance to the amount or timing of possible insurance recoveries if ultimately claimed by the Company. There was no significant damage to the Company's Atchison plant as a result of this incident. No other MGP facilities, including the distillery in Lawrenceburg, Indiana, were affected by this incident.
|
•
|
The TTB performed a federal excise tax audit of the Company’s subsidiaries, MGPI of Indiana, LLC and MGPI Processing, Inc., for the periods January 1, 2012 through July 31, 2015 and January 1, 2013 through July 31, 2015, respectively. TTB informed the Company that it would be assessing a penalty as a result of the audit, and the Company offered a settlement for the penalty. The settlement has been accepted in principle by the TTB and the expensed amount is insignificant to the Company’s financial results.
|
NOTE 9:
|
EMPLOYEE BENEFIT PLANS
|
|
Pension Benefit Plans
|
|
Post-Employment Benefit Plan
|
|
|||||||||||||||||
|
December 31,
|
|
December 31,
|
|
|||||||||||||||||
|
2015
|
(a)
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Beginning of year
|
$
|
2,016
|
|
|
$
|
2,190
|
|
|
|
$
|
4,681
|
|
|
$
|
4,926
|
|
|
$
|
4,827
|
|
|
Service cost
|
—
|
|
|
—
|
|
|
|
36
|
|
|
51
|
|
|
72
|
|
|
|||||
Interest cost
|
36
|
|
|
87
|
|
|
|
142
|
|
|
141
|
|
|
149
|
|
|
|||||
Actuarial loss (gain)
|
(9
|
)
|
|
35
|
|
|
|
(297
|
)
|
|
45
|
|
|
1,632
|
|
|
|||||
Negative plan amendment benefit
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(1,183
|
)
|
|
|||||
Benefits paid
|
(2,043
|
)
|
|
(296
|
)
|
|
|
(456
|
)
|
|
(482
|
)
|
|
(571
|
)
|
|
|||||
Benefit obligation at end of year
|
$
|
—
|
|
|
$
|
2,016
|
|
|
|
$
|
4,106
|
|
|
$
|
4,681
|
|
|
$
|
4,926
|
|
|
|
Pension Benefit Plans
|
|
||
|
December 31,
|
|
||
|
2015
|
(a)
|
||
Fair value of plan assets at beginning of year
|
$
|
1,300
|
|
|
Actual return on plan assets
|
2
|
|
|
|
Employer contributions
|
741
|
|
|
|
Benefits paid
|
(2,043
|
)
|
|
|
Fair value of plan assets at end of year
|
$
|
—
|
|
|
|
Pension Benefit Plans
|
|
|
Post-Employment Benefit Plan
|
|
||
|
Year Ended December 31,
|
|
|
Year Ended December 31,
|
|
||
|
2015
|
(a)
|
|
2016
|
|
2015
|
|
Discount rate
|
3.65%
|
|
|
3.15%
|
|
3.20%
|
|
Measurement date
|
December 31, 2015
(b)
|
|
|
December 31,
2016 |
|
December 31,
2015 |
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
(b)
|
The measurement date was June 30, 2015 for termination liabilities in 2015.
|
|
Pension Benefit Plans
|
|
Post-Employment Benefit Plan
|
||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||
|
2015
|
(a)
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|
|||||
Expected return on Assets
|
7.00
|
%
|
|
7.00
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Discount rate
|
3.58
|
%
|
|
4.11
|
%
|
|
3.20
|
%
|
|
2.99
|
%
|
|
3.95 / 3.39%
|
|
(b)
|
Average compensation increase
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
(b)
|
The pension benefit plan was amended effective April 16, 2014 requiring a re-measurement valuation. The discount rate for 2014 was based on measurement dates of December 31, 2013 and April 16, 2014.
|
|
Pension Benefit Plans
|
|
Post-Employment Benefit Plan
|
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|
||||||||||||||||
|
2015
|
(a)
|
2014
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
51
|
|
|
$
|
72
|
|
|
Interest cost
|
36
|
|
|
87
|
|
|
142
|
|
|
141
|
|
|
149
|
|
|
|||||
Expected return on assets
|
(45
|
)
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
(338
|
)
|
|
(338
|
)
|
|
(369
|
)
|
|
|||||
Recognized net actuarial loss
|
25
|
|
|
21
|
|
|
269
|
|
|
278
|
|
|
18
|
|
|
|||||
Settlement losses
|
414
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Net benefit cost
|
$
|
430
|
|
|
$
|
54
|
|
|
$
|
109
|
|
|
$
|
132
|
|
|
$
|
(130
|
)
|
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
|
Pension Benefit Plans
|
|
Post-Employment Benefit Plan
|
||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||
|
2015
|
(a)
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Net actuarial (loss) gain
|
$
|
(35
|
)
|
|
$
|
(92
|
)
|
|
$
|
293
|
|
|
$
|
(35
|
)
|
|
$
|
(1,632
|
)
|
Settlement losses
|
414
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Plan amendment and curtailment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,183
|
|
|||||
Recognized net actuarial loss
|
25
|
|
|
20
|
|
|
269
|
|
|
278
|
|
|
18
|
|
|||||
Amortization of prior service cost
|
—
|
|
|
—
|
|
|
(338
|
)
|
|
(338
|
)
|
|
(369
|
)
|
|||||
Recognition of prior service cost due to curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|||||
Total other comprehensive income (loss), pre-tax
|
404
|
|
|
(22
|
)
|
|
224
|
|
|
(95
|
)
|
|
(852
|
)
|
|||||
Income tax expense (benefit)
|
160
|
|
|
(155
|
)
|
|
90
|
|
|
(41
|
)
|
|
(6
|
)
|
|||||
Total other comprehensive income (loss), net of tax
|
$
|
244
|
|
|
$
|
133
|
|
|
$
|
134
|
|
|
$
|
(54
|
)
|
|
$
|
(846
|
)
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
|
Pension Benefit Plans
|
|
Post-Employment Benefit Plan
|
||||||||
|
As of December 31,
|
|
As of December 31,
|
||||||||
|
2015
|
(a)
|
2016
|
|
2015
|
||||||
Accrued expenses
|
$
|
—
|
|
|
$
|
(502
|
)
|
|
$
|
(545
|
)
|
Accrued retirement benefits
|
—
|
|
|
(3,604
|
)
|
|
(4,136
|
)
|
|||
Net amount recognized
|
$
|
—
|
|
|
$
|
(4,106
|
)
|
|
$
|
(4,681
|
)
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
|
Post-Employment Benefit Plan
|
(a)
|
||
Actuarial net loss
|
$
|
(184
|
)
|
|
Net prior service credits
|
338
|
|
|
|
Net amount recognized
|
$
|
154
|
|
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
|
Post-Employment Benefit Plan
|
||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||
|
Group Plan
|
|
Lifetime Prescription Cost
|
|
Medicare Supplement
|
|
Group Plan
|
|
Lifetime Prescription Cost
|
|
Medicare Supplement
|
||||||
Health care cost trend rate
|
7.50
|
%
|
|
9.00
|
%
|
|
5.00
|
%
|
|
7.50
|
%
|
|
9.00
|
%
|
|
5.00
|
%
|
Ultimate trend rate
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year rate reaches ultimate trend rate
|
2023
|
|
|
2024
|
|
|
2017
|
|
|
2024
|
|
|
2025
|
|
|
2017
|
|
|
Post-Employment Benefit Plan
|
(a)
|
||||||
|
Expected Benefit
Payments
|
|
Expected Subsidy
Receipts
|
|
||||
2017
|
$
|
520
|
|
|
$
|
18
|
|
|
2018
|
522
|
|
|
17
|
|
|
||
2019
|
534
|
|
|
15
|
|
|
||
2020
|
505
|
|
|
14
|
|
|
||
2021
|
479
|
|
|
13
|
|
|
||
2022-2026
|
1,509
|
|
|
44
|
|
|
||
Total
|
$
|
4,069
|
|
|
$
|
121
|
|
|
(a)
|
The Company's pension benefit plans were terminated and paid as of June 2015.
|
(b)
|
This expected pay out schedule considers the termination of the pension benefit plan during 2015.
|
|
Year Ended December 31,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
Shares |
|
Weighted
Average Exercise Price |
|
Shares
|
|
Weighted
Average Exercise Price |
||||||
Outstanding at beginning of year
|
4,000
|
|
|
$
|
10.45
|
|
|
10,000
|
|
|
$
|
9.91
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Canceled/Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
4,000
|
|
|
17.09
|
|
|
6,000
|
|
|
9.54
|
|
||
Outstanding at end of year
|
—
|
|
|
$
|
—
|
|
|
4,000
|
|
|
$
|
10.45
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Shares |
|
Weighted
Average Grant-Date Fair Value |
|
Shares |
|
Weighted
Average Grant-Date Fair Value |
|
Shares
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||||||||
Unvested balance at beginning of year
|
128,500
|
|
|
$
|
5.85
|
|
|
278,900
|
|
|
$
|
6.28
|
|
|
569,296
|
|
|
$
|
5.26
|
|
Granted
|
—
|
|
|
—
|
|
|
13,585
|
|
|
17.02
|
|
|
58,669
|
|
|
4.42
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
(30,800
|
)
|
|
6.27
|
|
|
(206,282
|
)
|
|
4.59
|
|
|||
Vested
|
(128,500
|
)
|
|
5.85
|
|
|
(133,185
|
)
|
|
7.80
|
|
|
(142,783
|
)
|
|
3.87
|
|
|||
Unvested balance at end of year
|
—
|
|
|
$
|
—
|
|
|
128,500
|
|
|
$
|
5.85
|
|
|
278,900
|
|
|
$
|
6.28
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
|
Units
|
|
Weighted Average
Grant-Date Fair Value |
|
Units |
|
Weighted Average
Grant-Date Fair Value |
|
Units |
|
Weighted Average
Grant-Date Fair Value |
|||||||||
Unvested balance at beginning of year
|
437,946
|
|
|
$
|
7.09
|
|
|
413,288
|
|
|
$
|
5.09
|
|
|
371,502
|
|
|
$
|
4.34
|
|
Granted
|
100,892
|
|
|
23.15
|
|
|
89,702
|
|
|
16.63
|
|
|
247,463
|
|
|
5.83
|
|
|||
Forfeited
|
(11,352
|
)
|
|
11.55
|
|
|
(54,506
|
)
|
|
6.15
|
|
|
(135,104
|
)
|
|
4.60
|
|
|||
Vested
|
—
|
|
|
—
|
|
|
(10,538
|
)
|
|
14.88
|
|
|
(70,573
|
)
|
|
3.22
|
|
|||
Unvested balance at end of year
|
527,486
|
|
|
$
|
10.17
|
|
|
437,946
|
|
|
$
|
7.09
|
|
|
413,288
|
|
|
$
|
5.09
|
|
NOTE 10:
|
CONCENTRATIONS
|
NOTE 11:
|
OPERATING SEGMENTS
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales to customers:
|
|
|
|
|
|
||||||
Distillery products
|
$
|
265,243
|
|
|
$
|
270,225
|
|
|
$
|
256,561
|
|
Ingredient solutions
|
53,020
|
|
|
57,379
|
|
|
56,842
|
|
|||
Total
|
$
|
318,263
|
|
|
$
|
327,604
|
|
|
$
|
313,403
|
|
|
|
|
|
|
|
|
|||||
Gross profit:
|
|
|
|
|
|
||||||
Distillery products
|
56,836
|
|
|
50,662
|
|
|
22,332
|
|
|||
Ingredient solutions
|
8,447
|
|
|
7,871
|
|
|
6,099
|
|
|||
Total
|
$
|
65,283
|
|
|
$
|
58,533
|
|
|
$
|
28,431
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
|
|||||
Distillery products
|
$
|
8,371
|
|
|
$
|
8,900
|
|
|
$
|
8,510
|
|
Ingredient solutions
|
1,655
|
|
|
2,111
|
|
|
2,316
|
|
|||
Corporate
|
1,227
|
|
|
1,371
|
|
|
1,499
|
|
|||
Total
|
$
|
11,253
|
|
|
$
|
12,382
|
|
|
$
|
12,325
|
|
|
|
|
|
|
|
|
|||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
|||||
Distillery products
|
$
|
53,583
|
|
|
$
|
49,097
|
|
|
$
|
28,701
|
|
Ingredient solutions
|
5,836
|
|
|
5,636
|
|
|
3,939
|
|
|||
Corporate
|
(14,702
|
)
|
|
(16,315
|
)
|
|
(6,700
|
)
|
|||
Total
|
$
|
44,717
|
|
|
$
|
38,418
|
|
|
$
|
25,940
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Identifiable Assets
|
|
|
|
||||
Distillery products
|
$
|
161,059
|
|
|
$
|
131,963
|
|
Ingredient solutions
|
27,109
|
|
|
24,023
|
|
||
Corporate
|
37,168
|
|
|
38,324
|
|
||
Total
|
$
|
225,336
|
|
|
$
|
194,310
|
|
NOTE 12:
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Purchase of property and equipment in accounts payable
|
$
|
4,364
|
|
|
$
|
1,784
|
|
|
$
|
574
|
|
Additional cash payment information:
|
|
|
|
|
|
|
|||||
Interest paid
|
1,467
|
|
|
818
|
|
|
903
|
|
|||
Income tax paid
|
16,409
|
|
|
9,393
|
|
|
146
|
|
NOTE 13:
|
DERIVATIVE INSTRUMENTS
|
NOTE 14:
|
RELATED PARTY TRANSACTIONS
|
NOTE 15:
|
QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
Year Ended December 31, 2016
(a) (b)
|
||||||||||||||
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||
Sales
|
$
|
85,005
|
|
|
$
|
83,711
|
|
|
$
|
82,174
|
|
|
$
|
77,191
|
|
Less: excise tax
|
3,860
|
|
|
3,820
|
|
|
1,782
|
|
|
356
|
|
||||
Net sales
|
81,145
|
|
|
79,891
|
|
|
80,392
|
|
|
76,835
|
|
||||
Cost of sales
|
63,560
|
|
|
64,770
|
|
|
64,861
|
|
|
59,789
|
|
||||
Gross profit
|
17,585
|
|
|
15,121
|
|
|
15,531
|
|
|
17,046
|
|
||||
Selling, general and administrative expenses
|
6,987
|
|
|
6,981
|
|
|
6,404
|
|
|
6,321
|
|
||||
Other operating income, net
|
—
|
|
|
(3,385
|
)
|
|
—
|
|
|
—
|
|
||||
Operating income
|
10,598
|
|
|
11,525
|
|
|
9,127
|
|
|
10,725
|
|
||||
Equity in earnings (Note 3)
|
1,776
|
|
|
664
|
|
|
1,079
|
|
|
517
|
|
||||
Interest expense
|
(314
|
)
|
|
(341
|
)
|
|
(328
|
)
|
|
(311
|
)
|
||||
Income before income taxes
|
12,060
|
|
|
11,848
|
|
|
9,878
|
|
|
10,931
|
|
||||
Income tax expense (Note 6)
|
3,775
|
|
|
2,316
|
|
|
3,570
|
|
|
3,872
|
|
||||
Net income
|
$
|
8,285
|
|
|
$
|
9,532
|
|
|
$
|
6,308
|
|
|
$
|
7,059
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted EPS data
|
$
|
0.48
|
|
|
$
|
0.55
|
|
|
$
|
0.37
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per common share and per unit
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.08
|
|
(a)
|
Net income was positively impacted during the third quarter of 2016 by other operating income, net, of
$3,385
related to a legal settlement agreement and a gain on sale of long-lived assets and by a lower effective income tax rate related to the implementation of ASU No. 2016-09,
Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting
.
|
(b)
|
Quarterly EPS amounts may not add to amounts for the year because quarterly and annual EPS calculations are performed separately.
|
|
Year Ended December 31, 2015
(a) (b)
|
||||||||||||||
|
Fourth
Quarter
|
|
Third
Quarter
|
|
Second
Quarter
|
|
First
Quarter
|
||||||||
Sales
|
$
|
85,072
|
|
|
$
|
83,880
|
|
|
$
|
92,071
|
|
|
$
|
84,864
|
|
Less: excise tax
|
3,563
|
|
|
3,552
|
|
|
6,717
|
|
|
4,451
|
|
||||
Net sales
|
81,509
|
|
|
80,328
|
|
|
85,354
|
|
|
80,413
|
|
||||
Cost of sales
|
65,754
|
|
|
68,466
|
|
|
67,826
|
|
|
67,025
|
|
||||
Gross profit
|
15,755
|
|
|
11,862
|
|
|
17,528
|
|
|
13,388
|
|
||||
Selling, general and administrative expenses
|
5,681
|
|
|
5,497
|
|
|
8,025
|
|
|
6,480
|
|
||||
Operating income
|
10,074
|
|
|
6,365
|
|
|
9,503
|
|
|
6,908
|
|
||||
Equity in earnings (Note 3)
|
92
|
|
|
1,562
|
|
|
3,096
|
|
|
1,352
|
|
||||
Interest expense
|
(160
|
)
|
|
(114
|
)
|
|
(129
|
)
|
|
(131
|
)
|
||||
Income before income taxes
|
10,006
|
|
|
7,813
|
|
|
12,470
|
|
|
8,129
|
|
||||
Income tax expense (Note 6)
|
3,527
|
|
|
1,042
|
|
|
4,599
|
|
|
3,059
|
|
||||
Net income
|
$
|
6,479
|
|
|
$
|
6,771
|
|
|
$
|
7,871
|
|
|
$
|
5,070
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted EPS data
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
$
|
0.44
|
|
|
$
|
0.28
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends per common share and per unit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.06
|
|
(a)
|
Net income was positively impacted during the second quarter of 2015 by
$460
as result of an insurance recovery.
|
(b)
|
Net income was positively impacted during the third and fourth quarters of 2015 by
$1,908
and
$477
, respectively, as result of a release of the valuation allowance related to deferred tax assets,
|
NOTE 16:
|
PROPERTY AND BUSINESS INTERRUPTION INSURANCE CLAIMS AND RECOVERIES
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Total insurance recoveries
|
$
|
460
|
|
|
$
|
9,375
|
|
Insurance recoveries - interruption of business
|
$
|
460
|
|
|
$
|
925
|
|
Less: out-of-pocket expenses related to interruption of business in
Cost of Sales
|
—
|
|
|
617
|
|
||
Net reduction to
Cost of sales
on the Consolidated Statements of Income
|
$
|
460
|
|
|
$
|
308
|
|
|
|
|
|
||||
Insurance recoveries - property damage
|
$
|
—
|
|
|
$
|
8,450
|
|
Less: Net book value of property loss in insurance recoveries
|
—
|
|
|
160
|
|
||
Insurance recoveries
on the Consolidated Statements of Income
|
$
|
—
|
|
|
$
|
8,290
|
|
NOTE 17:
|
ACQUISITION
|
Consideration:
|
|
||
Cash
|
$
|
1,551
|
|
Contingent consideration arrangement
(included in Other non-current liabilities on the Consolidated Balance Sheets)
|
350
|
|
|
Fair value of total consideration transferred
|
$
|
1,901
|
|
|
|
||
Recognized amounts of identifiable assets acquired:
|
|
||
Inventory
|
$
|
51
|
|
Total identifiable net assets assumed
|
$
|
51
|
|
Goodwill and Brand name (indefinite lived)
(included in Other assets on the Consolidated Balance Sheets) (see Note 4)
|
1,850
|
|
|
Total
|
$
|
1,901
|
|
NOTE 18:
|
SUBSEQUENT EVENTS
|
|
(1) Number of shares to be issued upon exercise of outstanding options, warrants and rights
|
|
(2) Weighted average of exercise price of outstanding options, warrants and rights
|
|
(3) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
(1))
|
||||
Equity compensation plans approved by security holders
|
527,486
|
|
|
$
|
10.17
|
|
|
1,509,683
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
527,486
|
|
|
$
|
10.17
|
|
|
1,509,683
|
|
•
|
Management's Report on Internal Control over Financial Reporting.
|
▪
|
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.
|
▪
|
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements.
|
▪
|
Consolidated Statements of Income – for the Years Ended
December 31, 2016
,
2015
and
2014
.
|
•
|
Consolidated Balance Sheets at
December 31, 2016
and
2015
.
|
▪
|
Consolidated Statements of Changes in Stockholders’ Equity – for the Years Ended
December 31, 2016
,
2015
and
2014
.
|
▪
|
Consolidated Statements of Cash Flows – for the Years Ended
December 31, 2016
,
2015
and
2014
.
|
▪
|
Notes to Consolidated Financial Statements.
|
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))
|
3.1.3
|
Certificate of Amendment to Articles of Incorporation of MGP Ingredients, Inc., dated May 22, 2014 (Incorporated by reference to Exhibit A of the Company's Proxy Statement on Schedule 14A filed April 24, 2014 (File number 000-17196))
|
3.2
|
Amended and Restated Bylaws of MGP Ingredients, Inc. dated May 21, 2015 (Incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K filed May 27, 2015 (File number 000-17196)
|
4.1
|
Third Amended and Restated Credit Agreement, dated March 21, 2016, by and among MGPI Processing, Inc., MGPI Pipeline, Inc. and MGPI of Indiana, LLC as Borrowers, MGP Ingredients, Inc., Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on March 25, 2016.)
|
4.1.1**
|
Amendment No. 1 to Third Amended and Restated Credit Agreement, dated November 8, 2016, by and among MGPI Processing, Inc., MGPI Pipeline, Inc. and MGPI of Indiana, LLC as Borrowers, MGP Ingredients, Inc., Wells Fargo Bank, National Association, as Administrative Agent, and the Lenders party thereto
|
4.1.2**
|
Reaffirmation of Loan Documents and Amendment No. 2 to Guaranty and Security Agreement, dated March 21, 2016, by and among MGP Ingredients, Inc., MGPI Processing, Inc., MGPI Pipeline, Inc., MGPI of Indiana, LLC, and Thunderbird Real Estate Holdings, LLC, as Grantors, and Wells Fargo Bank, National Association, as Administrative Agent
|
4.1.3
|
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 the Atchison and Onaga facilities (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 facility (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
|
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))
|
4.5.1
|
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))
|
4.5.2
|
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))
|
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
|
Limited Liability Company Agreement dated November 20, 2009 between MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and Illinois Corn Processing Holdings LLC (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on November 27, 2009 (File number 000-17196))
|
10.3*
|
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))
|
10.4*
|
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))
|
10.5*
|
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))
|
10.6*
|
Non-Employee Directors’ Restricted Stock and Restricted Unit Plan, as amended and restated (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
10.7*
|
Amendment 1 to Non-Employee Directors' Restricted Stock and restricted Stock Unit Plan dated as of March 14, 2014 (Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the Quarter ended March 31, 2014 (File number 000-17196))
|
10.8*
|
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))
|
10.9.1*
|
First Amended and Restated MGP Ingredients, Inc. Short-Term Incentive Plan (For 2012 and Subsequent Years) (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 19, 2012 (File number 000-17196))
|
10.9.2*
|
First Amendment to the First Amended and Restated MGP Ingredients, Inc. Short-Term Incentive Plan (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on August 9, 2013 (File number 000-17196))
|
10.10*
|
MGP Ingredients, Inc. 2014 Non-Employee Director Equity Incentive Plan (Incorporated by reference to Exhibit C of the Company's Proxy Statement on Schedule 14A filed April 24, 2014 (File number 000-17196))
|
10.11*
|
MGP Ingredients, Inc. 2014 Equity Incentive Plan (as amended and restated) (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on May 20, 2016 (File number 000-17196))
|
10.12*
|
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))
|
10.13*
|
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))
|
10.14*
|
Guidelines on Issuance of Fiscal 2012 Restricted Stock Unit Awards (Incorporated by reference to Exhibit 10.41 of the Company’s Report on Form 10-K for fiscal 2012 (File number 000-17196))
|
10.15*
|
Guidelines on Issuance of Fiscal 2013 Restricted Stock Unit Awards (Incorporated by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013)
|
10.16*
|
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))
|
10.18*
|
Form of Award Agreement for Fiscal 2012 Restricted Stock Unit Awards granted under the Stock Incentive Plan of 2004 (Incorporated by reference to Exhibit 10.40 of the Company’s Report on Form 10-K for fiscal 2012 (File number 000-17196))
|
10.19*
|
Form of Award Agreement for Fiscal 2013 Restricted Stock Unit Awards granted under the Non-Employee Directors’ Restricted Stock and Restricted Unit Plan (Incorporated by reference to Exhibit 10.26 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013)
|
10.20*
|
Form of Award Agreement for Fiscal 2014 Restricted Stock Unit Awards granted under the Non-Employee Director Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the Quarter ended June 30, 2014 (File number 000-17196))
|
10.21*
|
MGP Ingredients, Inc. Agreement as to Award of Restricted Stock Units Granted under the 2014 Equity Incentive Plan (Incorporated by reference to Exhibit 10.3 of the Company's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2014 (File number 000-17196))
|
10.22*
|
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))
|
10.23.1*
|
Form of Indemnification Agreement between MGPI Processing, Inc. (formerly MGP Ingredients, Inc.) and its Directors and Executive Officers (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly report on Form 10-Q for the quarter ended December 31, 2006 (File number 000-17196))
|
10.23.2*
|
Form of Indemnification Agreement between MGP Ingredients, Inc. (formerly MGPI Holdings, Inc.) and its Directors and Executive Officers (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed January 5, 2012 (File number 000-17196))
|
10.24*
|
Employment Agreement, dated July 23, 2014, between MGP Ingredients, Inc. and Augustus C. Griffin, Chief Executive Officer (Incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the Quarter ended September 30, 2014 (File number 000-17196))
|
10.25
|
Settlement Agreement and Mutual Release dated December 3, 2013 among MGP Ingredients, Inc. and Cloud "Bud" Cray, Jr., Karen Seaberg, and Thomas M. Cray, Michael Braude, Linda Miller, Gary Gradinger, Daryl Schaller, John Speirs, and Timothy Newkirk (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on December 6, 2013 (File number 000-17196))
|
10.26*
|
Offer Letter between MGP Ingredients, Inc. and Tom Pigott dated August 28, 2015 (Incorporated by reference to Exhibit 10.27 of the Company's Annual Report on Form 10-K for the year ended December 31, 2015)
|
10.27
|
Stock Repurchase Agreement between MGP Ingredients, Inc. and F2 SEA Inc., dated September 1, 2015 (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on September 8, 2015)
|
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, 2016, formatted in XBRL (Extensible Business Reporting Language) includes: (i) Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, and (ii) Consolidated Statements of Income, (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 years ended December 31, 2016, December 31, 2015, and December 31, 2014, and (vi) the Notes to the Consolidated Financial Statements.
|
|
MGP INGREDIENTS, INC.
|
|
|
|
|
|
By
|
/s/ Augustus C. Griffin
|
|
|
Augustus C. Griffin, President and Chief Executive Officer
|
|
|
|
|
By
|
/s/ Thomas K. Pigott
|
|
|
Thomas K. Pigott, Vice President, Finance and Chief Financial Officer
|
|
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: __________________________________ Name:________________________________ Title:_________________________________ |
|
U.S. BANK NATIONAL ASSOCIATION
, a national banking association, as a Lender
By: ________________________________________ Name: _____________________________________
Its Authorized Signatory
|
|
MGP INGREDIENTS, INC.
By: __________________________________ Name:________________________________ Title:_________________________________ |
|
MGPI PIPELINE, INC.
By: __________________________________ Name:________________________________ Title:_________________________________ |
|
MGPI PROCESSING, INC.
By: __________________________________ Name:________________________________ Title:_________________________________ |
|
MGPI OF INDIANA, LLC
By: __________________________________ Name:________________________________ Title:_________________________________ |
THUNDERBIRD REAL ESTATE HOLDINGS, LLC
, a Delaware limited liability company
By: _____________________________________ Title: ____________________________________ |
MGP INGREDIENTS, INC.
By: _______________________________________________ Name: _____________________________________________ Title: ______________________________________________ |
|
MGPI PROCESSING, INC.
By: _______________________________________________ Name: _____________________________________________ Title: ______________________________________________ |
|
MGPI PIPELINE, INC.
By: _______________________________________________ Name: _____________________________________________ Title: ______________________________________________ |
|
MGPI OF INDIANA, LLC
By: _______________________________________________ Name: _____________________________________________ Title: ______________________________________________ |
|
THUNDERBIRD REAL ESTATE HOLDINGS, LLC
By: _______________________________________________ Name: _____________________________________________ Title: ______________________________________________ |
Acknowledged and agreed to as of
the date hereof: WELLS FARGO BANK, NATIONAL ASSOCIATION , as administrative agent By: _________________________________ Name: _______________________________ Title: ________________________________ |
LICENSEE
|
LICENSOR
|
COUNTRY/STATE
|
REGISTRATION/ APPLICATION NUMBER, IF ANY
|
DESCRIPTION
|
MGPI Processing, Inc.
|
Kansas State University Research Foundation
|
Australia and International
|
5,855,946 and 6,299,907
|
Plant Based Starches
|
DM Ingredients GmbH
|
MGPI Processing, Inc.
|
EU and specified countries
|
|
Exclusive license to make food products made with Wheatex technology and a nonexclusive license to sell outside the territory. Also granted license for use of Trutex trade mark in offering the products
|
Crespel & Dieters GmbH & Co. KG
|
MGPI Processing, Inc.
|
|
|
Upon the dissolution of GmbH, the licensee will have rights with respect to the Wheatex technology and Trutex Trademark
|
Cargill
|
MGPI Processing, Inc.
|
Australia
|
5,855,946
|
Production and Marketing of a resistant starch call Fibersym® HA
|
National Starch and Chemical Company
|
MGPI Processing, Inc.
|
USA; Australia; and New Zealand
|
|
Make high amylase maize resistant starch products using licensed technology in the US for sale outside the US; exclusive right to make and sell such products in New Zealand and Australia; nonexclusive right to make and sell the product in the EU; and exclusive right to make and sell the product in the rest of the world (excluding US, EU, Australia and New Zealand)
|
OWNER
|
REGISTRATION NUMBER
|
DESCRIPTION
|
MGPI Processing, Inc.
|
5747648
|
MODIFIED
WHEAT GLUTENS AND USE THEREOF IN FABRICATION OF FILMS
|
MGPI Processing, Inc.
|
5965708
|
MODIFIED WHEAT GLUTENS AND USE THEREOF IN FABRICATION OF FILMS
|
MGPI Processing, Inc.
|
5977312
|
MODIFIED WHEAT GLUTENS AND USE THEREOF IN FABRICATION OF FILMS
|
MGPI Processing, Inc.
|
5665152
|
BIODEGRADABLE GRAIN PROTEIN-BASED SOLID ARTICLES
|
MGPI Processing, Inc.
|
6517625
|
PROTEIN STARCH PAPER
|
MGPI Processing, Inc.
|
6605367
|
PROTEIN STARCH PAPER
|
MGPI Processing, Inc.;
Desert Whale Jojoba Company, Inc. |
6552171
|
HYDROLYZED JOJOBA PROTEIN AND USES THEREOF
|
MGPI Processing, Inc.;
Desert Whale Jojoba Company, Inc. |
6800736
|
HYDROLYZED JOJOBA PROTEIN AND USES THEREOF
|
MGPI Processing, Inc.;
Desert Whale Jojoba Company, Inc. |
6649177
|
HYDROLYZED JOJOBA PROTEIN AND USES THEREOF
|
MGPI Processing, Inc.
|
7534459
|
PROCESS FOR PREPARING HYBRID PROTEINS
|
MGPI Processing, Inc.
|
6809197
|
EMULSION STABILIZING STARCH PRODUCTS
|
MGPI Processing, Inc.
|
7166305
|
POLYVALENT METAL-SUBSTITUTED STARCH PRODUCTS
|
MGPI Processing, Inc.
|
7989592
|
PROCESS FOR PREPARING HYBRID PROTEINS
|
MGPI Processing, Inc.
|
8309152
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
OWNER
|
APPLICATION NUMBER
|
DESCRIPTION
|
MGPI Processing, Inc.
|
12/785,169
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
11/115,441
|
EXPANDED PRODUCTS WITH HIGH PROTEIN CONTENT
|
MGPI Processing, Inc.
|
14/256,243
|
EXPANDED PRODUCTS WITH HIGH PROTEIN CONTENT
|
MGPI Processing, Inc.
|
11/294,314
|
PREGELATINIZED CHEMICALLY MODIFIED RESISTANT STARCH PRODUCTS AND USES THEREOF
|
MGPI Processing, Inc.
|
11/146,623
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
11/146,671
|
REVERSIBLY SWELLABLE GRANULAR STARCH-LIPID COMPOSITES AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
11/830507
|
HIGH-PROTEIN, LOW-CARBOHYDRATE BAKERY PRODUCTS
|
MGPI Processing, Inc.
|
12/580755
|
RESISTANT STARCH-HYDROCOLLOID BLENDS AND USES THEREOF
|
MGPI Processing, Inc.
|
11/689620
|
RESISTANT STARCH-HYDROCOLLOID BLENDS AND USES THEREOF
|
MGPI Processing, Inc.
|
13/673,641
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGP Ingredients, Inc.
|
13/915200
|
HIGH-PROTEIN, LOW-CARBOHYDRATE BAKERY PRODUCTS
|
MGPI Processing, Inc. and Pittsburg State University
|
14/516414
|
PRODUCTION OF POLYOLS USING DISTILLERS GRAINS AND PROTEINS AND LIGNIN EXTRACTED FROM DISTILLERS
|
MGPI Processing, Inc. and Pittsburg State University
|
13/757179
|
PRODUCTION OF POLYOLS USING DISTILLERS GRAINS AND PROTEINS AND LIGNIN EXTRACTED FROM DISTILLERS
|
MGPI Processing, Inc.
|
11/585369
|
THERMOTOLERANT STARCH-POLYESTER COMPOSITES AND METHODS OF MAKING SAME
|
MGPI Processing, Inc.
|
8802754 11/339367
|
STARCH-PLASTIC COMPOSITE RESINS AND PROFILES MADE BY EXTRUSION
|
MGPI Processing, Inc.
|
6716599
|
METHOD OF PREPARING HYDROLYZED JOJOBA PROTEIN
|
OWNER
|
REGISTRATION NUMBER
|
COUNTRY/STATE
|
DESCRIPTION
|
MGPI Processing, Inc.
|
1758461
|
GB
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1758461
|
LU
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1758461
|
MC
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1758461
|
CH
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1758461
|
IE
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1758461
|
FR
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1758461
|
DE
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
2532285
|
CA
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
SI
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
DE
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
FR
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
IE
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
SE
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
CH
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
LU
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
OWNER
|
REGISTRATION NUMBER
|
COUNTRY/STATE
|
DESCRIPTION
|
MGPI Processing, Inc.
|
1648237
|
MC
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
NL
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
DK
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
1648237
|
GB
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
2004253169
|
Australia
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
MGPI Processing, Inc.
|
2005267599
|
Australia
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
1643841
|
DE
|
HIGH-PROTEIN, LOW-CARBOHYDRATE BAKERY PRODUCTS
|
MGPI Processing, Inc.
|
1643841
|
FR
|
HIGH-PROTEIN, LOW-CARBOHYDRATE BAKERY PRODUCTS
|
MGPI Processing, Inc.
|
1643841
|
GB
|
HIGH-PROTEIN, LOW-CARBOHYDRATE BAKERY PRODUCTS
|
MGPI Processing, Inc.
|
3866289
|
JP
|
BIODEGRADABLE, GRAIN PROTEIN-BASED ARTICLES AND FORMING
|
MGPI Processing, Inc.
|
4229236
|
JP
|
Hydrolyzed Protein and Uses Thereof
|
MGPI Processing, Inc.
|
4839213
|
JP
|
High-Protein, Low-Carbohydrate Bakery Products
|
MGPI Processing, Inc.
|
5238495
|
JP
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
1888650
|
Europe
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
602006033350.1
|
DE
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
1888650
|
GB
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
OWNER
|
REGISTRATION NUMBER
|
COUNTRY/STATE
|
DESCRIPTION
|
MGPI Processing, Inc.
|
2006254932
|
Australia
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
OWNER
|
APPLICATION NUMBER
|
COUNTRY/STATE
|
DESCRIPTION
|
MGPI Processing, Inc.
|
2011124186
|
JP
|
COMPOSITION AND METHOD FOR MAKING HIGH-PROTEIN AND LOW-CARBOHYDRATE FOOD PRODUCTS
|
MGPI Processing, Inc.
|
2011164823
|
Japan
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
2007275271
|
Australia
|
PROCESS FOR PREPARING HYBRID PROTEINS
|
MGPI Processing, Inc.
|
2661310
|
Canada
|
PROCESS FOR PREPARING HYBRID PROTEINS
|
MGPI Processing, Inc.
|
7813110.9
|
Europe
|
PROCESS FOR PREPARING HYBRID PROTEINS
|
MGPI Processing, Inc.
|
2009-521909
|
Japan
|
PROCESS FOR PREPARING HYBRID PROTEINS
|
MGPI Processing, Inc.
|
2 611431
|
Canada
|
MINERAL-BOUND STARCH COMPOSITIONS AND METHODS OF MAKING THE SAME
|
MGPI Processing, Inc.
|
2007 556375
|
Japan
|
PREGELATINIZED CHEMICALLY MODIFIED RESISTANT STARCH PRODUCTS AND USES THEREOF
|
MGPI Processing, Inc.
|
6720893.4
|
Europe
|
PREGELATINIZED CHEMICALLY MODIFIED RESISTANT STARCH PRODUCTS AND USES THEREOF
|
MGPI Processing, Inc.
|
2598089
|
Canada
|
PREGELATINIZED CHEMICALLY MODIFIED RESISTANT STARCH PRODUCTS AND USES THEREOF
|
MGPI Processing, Inc.
|
2006214040
|
Australia
|
PREGELATINIZED CHEMICALLY MODIFIED RESISTANT STARCH PRODUCTS AND USES THEREOF
|
MGPI Processing, Inc.
|
2570902
|
Canada
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
2005 267599
|
Australia
|
WHEAT PROTEIN ISOLATES AND THEIR MODIFIED FORMS AND METHODS OF MAKING
|
MGPI Processing, Inc.
|
2006 520157
|
Japan
|
HIGH-PROTEIN, REDUCED-CARBOHYDRATE BAKERY AND OTHER FOOD PRODUCTS
|
Name of Grantor
|
Name of Pledged Company
|
Number of Share Units
|
Class of Interests
|
Percentage of Class Owned
|
Percentage Of Class Pledged
|
Certificate Nos.
|
MGP Ingredients, Inc.
|
MGPI Processing, Inc.
|
1,000
|
Common
|
100%
|
100%
|
Cl
|
MGP Ingredients, Inc.
|
MGPI Processing, Inc.
|
10
|
Preferred
|
100%
|
100%
|
P1
|
MGP Ingredients, Inc.
|
MGPI Pipeline, Inc.
|
5,000
|
Common
|
100%
|
100%
|
C2
|
MGP Ingredients, Inc.
|
MGPI of Indiana, LLC
|
n/a
|
n/a
|
100%
|
100%
|
n/a
|
MGPI Processing, Inc.
|
Thunderbird Real Estate Holdings, LLC
|
n/a
|
n/a
|
100%
|
100%
|
n/a
|
MGPI Processing, Inc.
|
Illinois Corn Processing, LLC
|
n/a
|
n/a
|
30%
|
30%
|
n/a
|
OWNER
|
REGISTRATION
NUMBER |
TRADEMARK
|
MGPI Processing, Inc.
|
2,681,958
|
ARISE
|
MGPI Processing, Inc.
|
3,259,490
|
FIBERRITE
|
MGPI Processing, Inc.
|
3,143,069
|
FIBERSYM
|
MGPI Processing, Inc.
|
3,086,500
|
FIBERSYM and Design
(highly stylized S) |
MGPI Processing, Inc.
|
2,083,385
|
FOAM PRO
|
MGPI Processing, Inc.
|
3,032,619
|
MGP INGREDIENTS
|
MGPI Processing, Inc.
|
3,020,190
|
MGP INGREDIENTS, INC.
and Design |
MGPI Processing, Inc.
|
2,926,087
|
MIDWEST GRAIN
PRODUCTS |
MGPI Processing, Inc.
|
4472546
|
OPTEIN
|
MGPI Processing, Inc.
|
4556537
|
TRUTEX
|
MGPI Processing, Inc.
|
2,076,023
|
WHEATEX
|
MGPI Processing, Inc.
|
3,450,542
|
WHEATEX (word mark)
|
OWNER
|
APPLICATION NUMBER
|
TRADEMARK
|
MGPI of Indiana, LLC
|
85783212
|
DUMA'S HAMMER
|
MGPI of Indiana, LLC
|
85777793
|
CLOUD'S BATCH '41 CLOUD
L. CRAY SNR |
MGPI of Indiana, LLC
|
85777791
|
CLOUD'S BATCH '41
|
MGPI of Indiana, LLC
|
85743480
|
TANNERS CREEK
|
MGPI of Indiana, LLC
|
85725079
|
1729 LONDON GIN
|
MGPI of Indiana, LLC
|
85725074
|
B UR BN
|
MGPI Processing, Inc.
|
86603719
|
Till Vodka
|
MGPI Processing, Inc.
|
86603204
|
TILL WHEAT VODKA
|
MGPI Processing, Inc.
|
86603198
|
TILL KANSAS WHEAT VODKA
|
MGPI Processing, Inc.
|
86603185
|
TILL KANSAS ESTATE WHEAT VODKA
|
MGPI Processing, Inc.
|
86603179
|
TILL AMERICAN WHEAT VODKA
|
MGPI Processing, Inc.
|
86603172
|
TILL WHEAT GIN
|
MGPI Processing, Inc.
|
86749823
|
TILL
|
MGPI Processing, Inc.
|
86749821
|
TILL DISTILLING COMPANY
|
MGPI Processing, Inc.
|
86822944
|
TILL and Design
|
MGPI Processing, Inc.
|
86822946
|
Till Bottle Design
|
MGPI of Indiana, LLC
|
86603161
|
MERIWETHER GIN
|
MGPI of Indiana, LLC
|
86603150
|
MERIWETHER LEWIS GIN
|
MGPI of Indiana, LLC
|
86794384
|
ROSSVILLE DISTILLERY
|
MGPI of Indiana, LLC
|
86651279
|
LDI
|
MGPI of Indiana, LLC
|
86651282
|
LAWRENCEBURG DISTILLERS INDIANA
|
OWNER
|
REGISTRATION NUMBER
|
COUNTRY/STATE
|
TRADEMARK
|
MGPI Processing, Inc.
|
2,681,958
|
International Class 30
|
ARISE
|
MGPI Processing, Inc.
|
3,259,490
|
International Class 30
|
FIBERRITE
|
MGPI Processing, Inc.
|
3,143,069
|
International Class 30
|
FIBERSYM
|
MGPI Processing, Inc.
|
3,086,500
|
International Class 30
|
FIBERSYM and Design
(highly stylized S) |
MGPI Processing, Inc.
|
2,083,385
|
International Class 1
|
FOAM PRO
|
MGPI Processing, Inc.
|
3,032,619
|
International Class l and 31
|
MGP INGREDIENTS
|
MGPI Processing, Inc.
|
3,020,190
|
International Class 1 and 31
|
MGP INGREDIENTS,
INC. and Design |
MGPI Processing, Inc.
|
2,926,087
|
International Class 42
|
MIDWEST GRAIN
PRODUCTS |
MGPI Processing, Inc.
|
2,076,023
|
International Class 30
|
WHEATEX
|
MGPI Processing, Inc.
|
3,450,542
|
International Class 29
|
WHEATEX
|
Legal Name
|
Chief Executive Office
|
Organizational Number
|
Federal Taxpayer Identification Number
|
MGP Ingredients, Inc.
|
100 Commercial Street
Atchison, Kansas |
KS - 4554606
|
45-4082531
|
MGPI Processing, Inc.
|
100 Commercial Street Atchison, Kansas
|
KS - 083220
|
48-0531200
|
MGPI Pipeline, Inc.
|
100 Commercial Street Atchison, Kansas
|
KS - 1569474
|
48-1076698
|
MGPI of Indiana, LLC
|
100 Commercial Street Atchison, Kansas
|
DE - 4527045
|
26-2330535
|
Thunderbird Real Estate Holdings, LLC
|
100 Commercial Street Atchison, Kansas
|
DE - 5517956
|
46-5428467
|
Grantor
|
Jurisdictions
|
MGP Ingredients, Inc.
|
Kansas Secretary of State
|
MGPI Processing, Inc.
|
Kansas Secretary of State
|
MGPI Pipeline, Inc.
|
Kansas Secretary of State
|
MGPI of Indiana, LLC
|
Delaware Secretary of State
|
MGPI Processing, Inc.
|
Atchison County, Kansas Register of Deeds
|
MGPI Processing, Inc.
|
Potawatomie County, Kansas Register of Deeds
|
MGPI of Indiana, LLC
|
Dearborn County, Indiana Recorder
|
Thunderbird Real Estate Holdings, LLC
|
Delaware Secretary of State
|
|
|
DESCRIPTION
|
VIN #
|
1969 Chevrolet
|
CS539P869050
|
2003 Chevrolet S10 Pickup
|
1GCCS14H138141050
|
2003 Chevrolet LD 3500
|
1GBJC34U13E228143
|
2001 Dodge 3500
|
3B6MF36WX1M275360
|
1999 Chevrolet 2500
|
1GBGC24R0XF065694
|
2006 Chevrolet Uplander
|
1GNDV23L06D190251
|
2009 Dodge Ram 1500
|
1D3HB16PX9J516677
|
1991 Trailer
|
1PT01ARH5M9001559
|
1991 Trailer
|
1PT01ARH1M9001560
|
1991 Trailer
|
1PT01ARH3M9001561
|
DESCRIPTION
|
VIN #
|
2005 DODGE PICKUP TRUCK
|
3D7KS28C85G797314
|
1996 GRAND MARQUIS
|
2MELM74W4TX658773
|
2008 FORD EXPLORER
|
1FMEU74E18UA93796
|
1991 CHEVY STAKE TRUCK
|
1GBKC34N5NJ101371
|
2003 CAPACITY
|
4LMDF71333LD013960
|
OTR TRAILERS
|
|
1988 FRUEHAUF
|
1H2V0452XJBO29509
|
1989 GREAT DANE
|
1GRAA9027LBO31901
|
1989 GREAT DANE
|
1GRAA9020LB031903
|
1989 GREAT DANE
|
1GRAA902XLB031908
|
1990 GREAT DANE
|
1GRAA9028LB031907
|
1989 GREAT DANE
|
1GRAA90242LB031905
|
1990 STOUGHTON GVW-485T-S-Z
|
1DW1A4826LS693108
|
FLATBED TRAILERS
|
|
1987 TRANSCRAFT 45 FT.
|
1TTF45208H1029068
|
1985 TRANSCRAFT
|
1TTF45208F1026314
|
SPECIAL
EQUIPMENT |
VIN #
|
1996 SWEEPER 3366XP
|
585399
|
1988 FORD DIESEL FARM TRACTOR
|
|
MAINT. 2-WHEEL TRAILER
|
IN2WHEEL0115653
|
FORKLIFT MAINT. C500-YS60
|
4355-94-5090-082
|
|
|
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
|
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 8, 2017
|
|
|
|
|
|
/s/ Augustus C. Griffin
|
|
|
|
Augustus C. Griffin,
President and Chief 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 8, 2017
|
|
|
|
|
|
/s/ Thomas K. Pigott
|
|
|
|
Thomas K. Pigott,
Vice President, Finance and Chief Financial Officer
|
Dated:
|
March 8, 2017
|
|
|
|
|
|
/s/ Augustus C. Griffin
|
|
|
|
Augustus C. Griffin
|
|
|
|
President and Chief Executive Officer
|
Dated:
|
March 8, 2017
|
|
|
|
|
|
/s/ Thomas K. Pigott
|
|
|
|
Thomas K. PIgott
|
|
|
|
Vice President, Finance and Chief Financial Officer
|