MGP Ingredients, the US distiller, has predicted declining sales and adjusted EBITDA in 2025.
The company has forecast its annual sales will be between $520m and $540m, down from the $703.6m it booked for 2024, a year when its sales fell 16%.
MGP Ingredients sees its adjusted EBITDA reaching $105-115m this year, versus $196.5m in 2024, a figure that was down 6% year on year.
Amid pressure on spirits sales in the US and higher levels of inventory across the country’s whiskey industry, the company issued a profit warning in October ahead of its third-quarter results. The group subsequently announced plans to cut whiskey production.
Just before Christmas, MGP Ingredients, which owns brands and is a contract distiller, said CEO David Bratcher would leave the business after less than 12 months at the helm of the whiskey maker.
Alongside the declines in sales and adjusted EBITDA, 2024 was also a year in which the company’s net income fell by more than two thirds, slumping from $107.5m to $34.7m.
Fourth-quarter sales fell 16% to $180.8m. Adjusted EBITDA dropped 9% to $53.1m. MGP Ingredients booked a fourth-quarter net loss of $42m on the back of a $73.8m charge to “lower the carrying amount of goodwill” in its branded spirits division, which includes Penelope Bourbon and El Mayor Tequila.
MGP Ingredients makes distilled spirits, branded spirits and food ingredients.
The company’s distilled spirits, which Bourbon, rye whiskey, vodka and gin, are sold to manufacturers of other branded spirits.
The food ingredients business, housed in the group’s Ingredient Solutions division, sells wheat-based ingredients.
“Despite ongoing industry-wide challenges, our fourth quarter results were in line with our expectations,” CFO Brandon Gall – who is also the company’s interim president and CEO – said.
“Elevated industry-wide barrel whiskey inventories continue to weigh on overall brown goods sales and pricing trends, pressuring our financial performance and overshadowing the meaningful strides we continue to make across our branded spirits and ingredient solutions businesses.”
He added: “Our 2025 financial guidance, particularly the revised outlook for the Distilling Solutions business, reflects our decisive, proactive actions that are designed to de-risk our brown goods outlook.”
