MGP Ingredients, Inc. (MGPI) has reported a 40.78 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $9.53 million, or $0.55 a share in the quarter, compared with $6.77 million, or $0.38 a share for the same period last year.
Revenue during the quarter went down marginally by 0.54 percent to $79.89 million from $80.33 million in the previous year period. Gross margin for the quarter expanded 416 basis points over the previous year period to 18.93 percent. Total expenses were 85.57 percent of quarterly revenues, down from 92.08 percent for the same period last year. This has led to an improvement of 650 basis points in operating margin to 14.43 percent.
Operating income for the quarter was $11.52 million, compared with $6.36 million in the previous year period.
We are pleased with the third quarter results," said Gus Griffin, president and chief executive officer of MGP. "Our focus continues to be on implementation of our long-term strategic plan and this performance reflects our continued progress against that plan."
Working capital increases sharply
MGP Ingredients, Inc. has recorded an increase in the working capital over the last year. It stood at $81.30 million as at Sep. 30, 2016, up 48.08 percent or $26.39 million from $54.90 million on Sep. 30, 2015. Current ratio was at 3.48 as on Sep. 30, 2016, up from 2.46 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 67 days for the quarter from 72 days for the last year period. Days sales outstanding went up to 43 days for the quarter compared with 39 days for the same period last year.
Days inventory outstanding has decreased to 54 days for the quarter compared with 65 days for the previous year period. At the same time, days payable outstanding went down to 29 days for the quarter from 32 for the same period last year.
Debt increases substantially
MGP Ingredients, Inc. has witnessed an increase in total debt over the last one year. It stood at $45.47 million as on Sep. 30, 2016, up 57.80 percent or $16.65 million from $28.81 million on Sep. 30, 2015. Total debt was 20.65 percent of total assets as on Sep. 30, 2016, compared with 15.21 percent on Sep. 30, 2015. Debt to equity ratio was at 0.33 as on Sep. 30, 2016, up from 0.26 as on Sep. 30, 2015.
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