MGPI Reports Net Loss
"We continue to experience some of the same issues we faced in our fourth quarter of fiscal 2011, including higher raw material costs and non-cash losses on some of our open derivative commodity contracts used in our margin management process," said Tim Newkirk, president and chief executive officer. "However, we achieved a significant improvement in our two major operating segments over the past three months where the combined income before taxes was $1.97 million compared to a combined loss before taxes of $3.8 million in last year's fourth quarter. We recognize that this is well below our potential, especially in the distillery segment. Profitability in this segment is very much volume sensitive. While our quarterly distillery sales are reaching new levels since the company virtually exited the fuel grade alcohol business over two years ago, the way to bring more dollars to the bottom line is with higher throughput at both our Atchison facility and our ICP joint venture. The incremental volumes we are targeting in the months ahead should have a positive impact on gross profits.
"Our primary goal for the ingredients segment has been to improve profit margins. Following three quarters of sub-par performance, we succeeded in getting pre-tax margins back on a sound footing in the first quarter. However, this is only a starting point for this segment as we continue working to accelerate the sales and optimize the manufacturing of our specialty starches and proteins. We also expect to benefit from new pricing on certain products that will take effect on January 1, 2012."
Newkirk added, "Growing our sales into the consumer packaged goods market is our number one priority. We are on the verge of greatly increasing our presence in distilled beverages, specifically bourbon and rye whiskey, with the pending acquisition of Lawrenceburg Distillers Indiana. Our integration teams are making significant progress in planning to transition the existing production facilities and their customers as we target completion of this exciting acquisition sometime early in 2012."
From the November 9, 2011, Prepared Foods' Daily News.