MGP Ingredients, Inc. (MGPI) has reported a 22.94 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $8.68 million, or $0.50 a share in the quarter, compared with $7.06 million, or $0.41 a share for the same period last year.
Revenue during the quarter grew 13.45 percent to $87.17 million from $76.84 million in the previous year period. Gross margin for the quarter contracted 34 basis points over the previous year period to 21.84 percent. Total expenses were 86.93 percent of quarterly revenues, up from 86.04 percent for the same period last year. That has resulted in a contraction of 89 basis points in operating margin to 13.07 percent.
Operating income for the quarter was $11.39 million, compared with $10.72 million in the previous year period.
"Our first quarter results mark continued progress against our long term strategic plan," said Gus Griffin, president and chief executive officer of MGP. "Revenues grew as volumes in premium beverage alcohol increased and gross profit improved in both our Distillery Products and Ingredient Solutions segments. We are off to a good start and are optimistic about the outlook for 2017."
For fiscal year 2017, MGP Ingredients, Inc. projects operating income to grow in the range of 10 percent to 15 percent.
Working capital increases sharply
MGP Ingredients, Inc. has recorded an increase in the working capital over the last year. It stood at $87.28 million as at Mar. 31, 2017, up 36.87 percent or $23.51 million from $63.77 million on Mar. 31, 2016. Current ratio was at 3.77 as on Mar. 31, 2017, up from 2.72 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 61 days for the quarter from 103 days for the last year period. Days sales outstanding went down to 35 days for the quarter compared with 37 days for the same period last year.
Days inventory outstanding has decreased to 53 days for the quarter compared with 97 days for the previous year period. At the same time, days payable outstanding went down to 26 days for the quarter from 30 for the same period last year.
Debt moves up
MGP Ingredients, Inc. has witnessed an increase in total debt over the last one year. It stood at $43.69 million as on Mar. 31, 2017, up 16.69 percent or $6.25 million from $37.44 million on Mar. 31, 2016. Total debt was 18.63 percent of total assets as on Mar. 31, 2017, compared with 18.62 percent on Mar. 31, 2016. Debt to equity ratio was at 0.28 as on Mar. 31, 2017, down from 0.30 as on Mar. 31, 2016.
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