ATCHISON, KANSAS, U.S. — Interest in MGP Ingredients, Inc.’s TruTex, Fibersym and FiberRite products helped drive gains within the company’s Ingredients Solution segment, contributing to overall gains at the company in the second quarter.
Net income at MGP Ingredients increased 6.5% in the second quarter ended June 30, rising to $7.860 million, equal to 46¢ per share on the common stock, up from $7.379 million, or 44¢ per share, in the same period a year ago. Net sales also increased, rising to $90.501 million from $88.252 million.
“We saw improved results across most parts of our business this quarter, including the expected solid rebound in sales of new distillate, stronger sales and margins for our white beverage and industrial alcohol products and gains in both revenue and gross profit for Ingredients Solutions segment,” Augustus C. Griffin, president and chief executive officer, said during a July 31 conference call with analysts. “Both of our business segments showed top-line growth over the prior year, and as a result our consolidated sales for the quarter increased more than 2%. Even with these improvements, our operating income declined over 2% as sales of aged whiskey lagged our expectations.”
Gross profit in the Ingredient Solutions segment increased to $3 million in the second quarter of fiscal 2019, up 7% from $2.8 million in the second quarter of fiscal 2018, while sales increased nearly 6% to $16.5 million.
“We were pleased with the improved pricing and mix across the segment, particularly as we continue to cycle the loss of a large customer for our TruTex texture wheat protein product at the end of last year,” Griffin said. “We feel very good about the robust … pipeline for this product and remain confident that it will be a driver of long-term growth. We are also continuing to see increased customer interest in our Fibersym and FiberRite products, following their approval as sources of dietary fiber by the FDA. These products are ideally suited to help companies develop healthier food offerings, delivering high fiber content while lowering carbs. We are seeing a similar trend in Asia with consumers increasing interest in a healthy diet with lower carbs. Fibersym is benefiting from this trend and is well positioned for long-term growth.
“Sales of our commodity wheat proteins and starches increased from the prior year period as more customers seek to expand their clean label initiatives, which have enhanced our margins in those areas of the business. Overall, both of our business segments continue to benefit from favorable consumer trends, and we remain confident in our long-term strategy.”
MGPI revised its guidance for operating income to grow between 10% and 20% in fiscal 2019, down from an earlier projection of 15% and 20%. Fiscal 2019 sales growth is projected in the mid-single-digit percentage range versus 2018, the company said.