ATCHISON, KANSAS, U.S. — Net income at MGP Ingredients, Inc. increased nearly 4% in the first quarter ended March 31, rising to $8.752 million, equal to 52¢ per share on the common stock, from $8.428 million, or 50¢ per share, in the same period a year ago. Net sales also increased, rising to $87.956 million from $87.169 million.
“For the first quarter, both of our business segments showed growth over the prior year, driving consolidated net sales for the quarter, up about 1%, and net income increased almost 3%,” said Augustus C. Griffin, president and chief executive officer, during a May 2 conference call with analysts. “We continue to be very pleased with our progress against all parts of our strategic plan, and see no change in the macro consumer trends that are powering our growth. However, our results this period do reflect quarterly volatility resulting from changes in customer order timing for premium beverage alcohol in the distillery segment.”
Gross profit in the Ingredient Solutions segment increased to $3.1 million in the first quarter of fiscal 2018, up from $2.4 million in the same period of fiscal 2017, while sales increased 2.7% to $13.6 million.
“Gross margins expanded 430 basis points, driven by higher net sales in both our specialty wheat protein and specialty wheat starch businesses,” Griffin said. “This quarter versus prior year quarter, sales of our Fibersym specially wheat starch product grew substantially, and sales of our TruTex specialty wheat protein product more than doubled. We’re pleased with this continued sales growth, confident in the macro consumer trends supporting this growth and excited about the potential.”
Griffin elaborated on the success of Fibersym and TruTex during the questions-and-answers portion of the conference call.
“This (growth) is really being powered by strong macro-consumer trends, particularly for Fibersym, the consumer demand for more fiber in their diet,” he explained. “And then on TruTex, of course, the really strong trend of interesting plant-based proteins. So on Fibersym, of course, the patent expired last May. We have what we consider a superior product, but we do eventually expect some price competition. And we’ve been planning for that and putting together our strategic plans on how to address that and how to continue the growth despite that.
“On TruTex, we, again, feel we have a superior product. Our wheat-based product has a — and these are all benefits, — a more neutral color, a more neutral flavor and better texture. And this is a trend that just continues to accelerate, so we think there is substantial runway there.”MGPI confirmed its guidance for operating income to grow between 10% and 15% during fiscal 2018.