Full-year results above the top end of guidance; Provides 2026 financial outlook

MGP Ingredients, Inc. (Nasdaq: MGPI), a leading provider of branded and distilled spirits and food ingredient solutions, today reported results for the fourth quarter and full-year ended December 31, 2025.

“2025 was a year of deliberate repositioning for MGP,” said Julie Francis, president and CEO. “I am pleased with the team’s efforts as we did what we said we will do and made meaningful progress against each of the five initiatives we outlined at the start of the year, advanced our key priorities, and delivered full-year financial results above our prior expectations.”

She added, “From an industry standpoint, we believe that elevated inventory levels will continue to pressure our brown goods business in the near-term. However, we expect improved operational reliability in the Ingredient Solutions segment, continued premium plus momentum, and accelerated productivity and cost discipline to help partially offset these headwinds – all of which are reflected in our 2026 guidance.”

She concluded, “As we look ahead, we believe our enhanced strategic clarity, decisive actions, and disciplined execution will position the company to deliver sustained growth off of our 2026 guidance expectations. Many of these actions are well underway, and they are already changing how we operate, giving us confidence that MGP will emerge better aligned, more resilient, and well positioned for long-term value creation.”

2025 fourth quarter consolidated results compared to 2024 fourth quarter:

• Consolidated sales decreased 23% to $138.3 million.
• Consolidated gross profit decreased 35% to $48.3 million. Gross profit margin decreased by 630 basis points to 34.9%.
• Net income decreased to a loss of $134.6 million due to a discrete, non-cash adjustment of $152.6 million to lower the carrying amount of goodwill and indefinite-lived intangible assets in the Branded Spirits segment. On an adjusted basis, net income decreased 60% to $13.7 million.
• Basic earnings per common share ("EPS") decreased to $(6.22) per share from $(1.91) per share primarily due to a discrete, non-cash adjustment to goodwill and indefinite-lived intangible assets. Adjusted basic EPS decreased 60% to $0.63 per share.
• Adjusted EBITDA decreased 51% to $26.1 million.

2025 full-year consolidated results compared to 2024 full year:

• Consolidated sales decreased 24% to $536.4 million.
• Consolidated gross profit decreased 30% to $199.4 million. Gross profit margin decreased by 350 basis points to 37.2%.
• Net income decreased to a loss of $107.8 million primarily due to a discrete, non-cash adjustment to goodwill and indefinite-lived intangible assets. On an adjusted basis, net income decreased 51% to $61.5 million.
• Basic EPS decreased to $(4.99) per share from $1.56 per share primarily due to a discrete, non-cash adjustment to goodwill and indefinite-lived intangible assets as well as decreased gross profit. Adjusted basic EPS decreased 49% to $2.85 per share from $5.64 per share in 2024.
• Adjusted EBITDA decreased 41% to $116.0 million.
• Capital expenditures of $31.9 million declined 56% from the year-ago level, and were largely in line with the company's expectations.
• Cash flow from operations increased $19.3 million to record-high level of $121.5 million.
• Net debt leverage ratio stands at approximately 2.0x as of December 31, 2025.

Consolidated results

Fourth quarter 2025 consolidated sales decreased by 23% compared to the prior-year period, primarily due to lower brown goods sales within the Distilling Solutions segment and the residual impact from the outage of a key piece of equipment on Ingredient Solutions segment sales. These drivers, coupled with higher waste starch stream disposal costs related to the Ingredient Solutions segment, also pressured gross profit, as fourth quarter consolidated gross profit declined by 35% to $48.3 million, while gross margin decreased 630 basis points to 34.9%. Selling, general and administrative ("SG&A") costs increased by 5% as productivity savings were more than offset by the reinstatement of incentive compensation. Advertising and promotion expenses decreased by 12%, as planned. Fourth quarter operating income decreased to a loss of $135.2 million, while adjusted operating income decreased 60% to $18.7 million and adjusted EBITDA decreased 51% to $26.1 million.

During the fourth quarter, the company recorded a $152.6 million non-cash adjustment to the carrying value of goodwill and indefinite-lived intangible assets in the Branded Spirits segment, primarily due to certain unfavorable macroeconomic factors such as a higher discount rate and lower peer valuation multiples compared to the fourth quarter of 2024. These charges resulted in a net loss of $134.6 million and basic EPS loss of $6.22 for the fourth quarter. On an adjusted basis, fourth quarter net income and basic EPS were $13.7 million and $0.63 per share, respectively.

The effective tax rate for the fourth quarter 2025 was 1.3%, compared with (31.5)% in the year-ago period. On an adjusted basis, the effective tax rate for fourth quarter 2025 was 21.7%, compared to 24.0% in the year-ago period.

For the full-year 2025, consolidated sales declined by 24% compared to full-year 2024 to $536.4 million, primarily due to the anticipated decline in Distilling Solutions segment sales. Full-year gross profit declined by 30% to $199.4 million, and gross margin decreased by 350 basis points to 37.2% driven primarily by lower brown goods volumes, the impact from the outage of a key piece of equipment, and higher waste starch disposal costs at the company's ingredients plant. Full-year SG&A expense increased 4% to $84.8 million and adjusted SG&A expense increased 7% to $80.7 million, as the company's productivity initiatives were largely offset by the reinstatement of incentive compensation. Full-year operating income decreased to a loss of $94.6 million, while adjusted operating income and adjusted EBITDA decreased 49% and 41% to $87.6 million and $116.0 million, respectively. Full-year net income and basic EPS declined to a loss of $107.8 million and $4.99, respectively, due to a discrete non-cash impairment to goodwill and indefinite-lived intangible assets and lower operating results. On an adjusted basis, net income and basic EPS declined 51% and 49% to $61.5 million and $2.85, respectively.

Despite lower net income, full-year 2025 cash flow from operations increased to $121.5 million due to a heightened focus on managing working capital, including barrel inventory. Separately, net whiskey put-away declined from $32.9 million in 2024 to $18.5 million in 2025, and capital expenditures declined by 56% to $31.9 million.

Branded Spirits

Fourth quarter 2025 Branded Spirits segment sales decreased 1% to $63.4 million compared to the prior-year period as the continued momentum in the premium plus portfolio was offset by weaker sales of mid and value priced brands. Led by Penelope Bourbon, premium plus brands posted their strongest quarterly growth of the year with 10% sales growth during the quarter. As expected, sales of mid and value priced brands, combined, decreased by double digits, consistent with the full-year trend, primarily due to lower volumes of certain tequila, liqueurs, and cordial brands. Branded Spirits gross profit decreased by 2% to $28.9 million while gross margin declined by 60 basis points to 45.6%.

For the full-year 2025, Branded Spirits sales decreased 3% to $232.9 million compared to the prior-year period. Premium plus sales increased by 5%, while sales of the mid and value priced portfolio, combined, declined by 13% as the company continued to optimize its offerings in these price tiers. Full-year gross profit decreased by 2% to $115.3 million, while gross margin improved by 40 basis points to 49.5%, benefiting from the ongoing premiumization of the Branded Spirits portfolio.

Distilling Solutions

Distilling Solutions segment sales for the fourth quarter 2025 decreased 47% from the prior-year period to $43.6 million and gross profit decreased by 54% to $16.9 million, or 38.8% of segment sales. In-line with the 2025 trend, lower demand for both aged and new distillate whiskey pressured segment results, driving a 53% decline in brown goods sales for the fourth quarter.

For the full-year 2025, Distilling Solutions segment sales decreased 45% compared to the prior-year period to $181.4 million and gross profit decreased by 52% to $68.6 million. Full-year brown goods sales declined by 52% as the company proactively renegotiated contracts and many large customers paused purchases, including to balance their whiskey inventories and manage their working capital. Sales of warehouse services and white goods and other co-products declined by 3% and 38%, respectively, for the full year.

Ingredient Solutions

Fourth quarter 2025 Ingredient Solutions segment sales decreased by 10% as compared to the prior-year period to $31.3 million, as the impact of the failure of a key piece of equipment persisted and remained an operational headwind into the fourth quarter. As a result, specialty fiber and specialty protein sales declined by 8% and 14%, respectively, along with lower commodity starch sales during the quarter. The issue was resolved and the equipment returned to service in November 2025. On the other hand, textured protein sales benefitted from the commercialization of a new large multinational customer and biofuel sales continue to increase. Fourth quarter gross margin declined by 70% to $2.4 million due to higher waste starch stream disposal costs, lower volumes, and operational inefficiencies tied to the failure of a key piece of equipment.

For the full-year 2025, Ingredient Solutions segment sales decreased 7% year over year to $122.0 million, while gross profit declined by 41% to $15.5 million due to a significant weather impact in the first quarter, and a number of transitory headwinds, including the impact of the failure of a key equipment in the second half of the year and high waste starch stream disposal costs.

2026 Financial Guidance

The consolidated financial guidance for 2026 includes:

• Sales are projected to be in the range of $480 million to $500 million.
• Adjusted EBITDA is expected to be in the range of $90 million to $98 million.
• Adjusted basic EPS is expected to be in the $1.50 to $1.80 range, with weighted average basic shares outstanding of approximately 21.4 million, and an effective tax rate of approximately 27%.
• Full year capital expenditures are expected to be approximately $20 million.

Conference Call and Webcast Information

MGP Ingredients will host a conference call today, February 25, 2026, at 10 a.m. ET to discuss these results and current business trends. Investors can dial 844-308-6398 or 412-717-9605 (international) to listen to the live call. A live webcast will be available at the “News and Events” section of the company’s Investor Relations website at ir.mgpingredients.com/news-events. A replay of the conference call will be available on the company’s website.

About MGP Ingredients, Inc.

MGP Ingredients Inc. (Nasdaq: MGPI) has been formulating excellence since 1941 by bringing product ideas to life across the alcoholic beverage and specialty ingredient industries through three segments: Branded Spirits, Distilling Solutions, and Ingredient Solutions. MGPI is one of the leading spirits distillers with an award-winning portfolio of premium brands including Penelope, Rebel, Remus, and Yellowstone bourbons and El Mayor tequila, under the Luxco umbrella. With distilleries in Indiana and Kentucky; a tequila distillery in Arandas, Mexico; and bottling operations in Missouri, Ohio, and Northern Ireland, the company creates distilled spirits for customers including many world-renowned spirits brands. In addition, the company’s high-quality specialty fiber, protein, and starch ingredients provide functional, nutritional, and sensory solutions for a wide range of food products. To learn more visit MGPIngredients.com.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about pressure on the brown goods business of MGP Ingredients, Inc. (the “Company” or “MGP”); operational reliability; premium plus momentum; productivity and cost discipline; ability to deliver growth, be better aligned, be more resilient, and be well positioned for value creation; and the Company’s 2026 outlook, including its expectations for sales, adjusted EBITDA, adjusted basic EPS, shares outstanding, tax rate, and capital expenditures. Forward-looking statements are usually identified by or are associated with words such as “intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,” “project,” “forecast,” “hopeful,” “should,” “may,” “will,” “could,” “encouraged,” “opportunities,” “potential,” and similar terminology. These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, Company financial results, and Company financial condition and are not guarantees of future performance.

All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially from our expectations include without limitation any effects of changes in consumer preferences and purchases and our ability to anticipate or react to those changes; our ability to compete effectively and any effects of industry dynamics and market conditions; unfavorable economic conditions; damage to our reputation or that of any of our key customers or their brands; failure to introduce successful new brands and products or have effective marketing or advertising; changes in public opinion about alcohol or our products; our reliance on our distributors to distribute our branded spirits; our reliance on fewer, more profitable customer relationships; interruptions in our operations or a catastrophic event at our facilities; decisions concerning the quantity of maturing stock of our aged distillate; any inability to successfully complete our capital projects or fund capital expenditures or any warehouse expansion issues; our reliance on a limited number of suppliers; work disruptions or stoppages; climate change and measures to address climate change; regulation and taxation and compliance with existing or future laws and regulations; tariffs, trade relations, and trade policies; excise taxes, incentives and customs duties; our ability to protect our intellectual property rights and defend against alleged intellectual property rights infringement claims; failure to secure and maintain listings in control states; labeling or warning requirements or limitations on the availability of our products; product recalls or other product liability claims; anti-corruption laws, trade sanctions, and restrictions; litigation or legal proceedings; limited rights of common stockholders and anti-takeover provisions in our governing documents; the impact of issuing shares of our common stock; higher costs or the unavailability and cost of raw materials, product ingredients, energy resources, or labor; failure of our information technology systems, networks, processes, associated sites, or service providers; inability to successfully implement our strategies; interest rate increases; reliance on key personnel; impairment charges; commercial, political, and financial risks; covenants and other provisions in our credit arrangements; pandemics or other health crises; ability to pay any dividends and make any share repurchases. For further information on these risks and uncertainties and other factors that could affect the Company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as well as the Company’s other SEC filings. The Company undertakes no obligation to update any forward-looking statements or information in this press release, except as required by law.

Non-GAAP Financial Measures

In addition to reporting financial information in accordance with U.S. GAAP, the Company provides certain non-GAAP financial measures that are not in accordance with, or alternatives for, GAAP. In addition to the comparable GAAP measures, the Company has disclosed adjusted selling, general, and administrative expenses (“SG&A”), adjusted operating income, adjusted income before income taxes, adjusted net income, adjusted MGP earnings, adjusted EBITDA, net debt, net debt leverage ratio, adjusted basic and diluted EPS, adjusted effective tax rate, as well as guidance for adjusted EBITDA and adjusted basic EPS. The presentation of these non-GAAP financial measures should be reviewed in conjunction with SG&A, operating income, income before income taxes, net income, net income used in earnings per common share calculation, debt, basic and diluted EPS, and effective tax rate computed in accordance with U.S. GAAP and should not be considered a substitute for the GAAP measure. We believe that the non-GAAP measures provide useful information to investors regarding the Company's performance and overall results of operations. In addition, management uses these non-GAAP measures in conjunction with GAAP measures when evaluating the Company’s operating results compared to prior periods on a consistent basis, assessing financial trends, and for forecasting purposes. Non-GAAP financial measures may not provide information that is directly comparable to other companies, even if similar terms are used to identify such measures. The attached schedules provide a full reconciliation of historical non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure. Full year 2026 guidance measures of adjusted EBITDA and adjusted basic EPS are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measures because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. Such items include without limitation, acquisition related expenses, restructuring and related expenses, and other items not reflective of the Company's ongoing operations.

The non-GAAP adjusted EBITDA measure is defined as earnings before interest expense, income tax expense (benefit), depreciation and amortization, share based compensation, equity method investment gain, goodwill and indefinite-lived intangible asset impairment, executive transition costs, professional service fees, restructuring and other costs, fair value of contingent consideration, business acquisition costs, unusual items costs and impairment of long-lived assets and other.

See "Reconciliation of selected GAAP measures to adjusted non-GAAP measures" and "Description of Non-GAAP items" for further details.