May 12, 2008

MGP reports loss of US$6.7 million in Q3

MGP Ingredients Inc. reported that in the third quarter ended March 31, it incurred a loss of US$6.7 million against net profit of US$2.1 in the same period last year.

Sales were US$106,694,000, up 14 percent from the third quarter last year.

Tim Newkirk, president and chief executive officer, said MGP has made considerable progress in its strategic focus on building its value-added product sales but said earnings were adversely affected by record wheat prices.

However, Newkirk added that the company sees less crop risk in global wheat supplies than with corn.

Should wheat prices decline to levels experienced during second quarter, MGP would anticipate moving toward a stronger sustainable earnings contribution from ingredient solutions going forward, he said.

Meanwhile, MGP distillery operations remained profitable due principally to higher unit sales and pricing for food grade alcohol, combined with strengthened pricing for our fuel grade alcohol.

Further progress in the distillery segment was hampered by increased prices for corn, the principal raw material used in our alcohol production process, Newkirk pointed out.

In the nine months ended March 31, MGP Ingredients sustained a loss of US$1.7 million versus net income of US$15.8 or 97 cents per share, in the first three quarters of fiscal 2007. Net sales were US$288 million, up by 8 percent.