MGP INGREDIENTS INC 10-Q

ITEM 1. FINANCIAL STATEMENTS MGP INGREDIENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollars in thousands, except share and per share amounts) Quarter Ended September 30, Year to Date Ended September 30, 2025 2024 2025 2024 Sales $ 130,912 $ 161,461 $ 398,059 $ 522,829 Cost of sales 81,479 95,646 246,909 310,987 Gross profit 49,433 65,815 151,150 211,842 Advertising and promotion expenses 6,691 9,647 21,776 29,995 Selling, general, and administrative expenses 18,926 17,204 63,287 60,942 Impairment of long-lived assets and other — — — 137 Change in fair value of contingent consideration 2,800 6,400 25,500 15,900 Operating income 21,016 32,564 40,587 104,868 Interest expense, net ( 1,739 ) ( 2,174 ) ( 5,490 ) ( 6,398 ) Other income, net 428 1,026 957 1,917 Income before income taxes 19,705 31,416 36,054 100,387 Income tax expense 4,276 7,554 9,255 23,924 Net income 15,429 23,862 26,799 76,463 Net loss (income) attributable to noncontrolling interest ( 7 ) 43 25 162 Net income attributable to MGP Ingredients, Inc. 15,422 23,905 26,824 76,625 Income attributable to participating securities ( 190 ) ( 257 ) ( 322 ) ( 828 ) Net income used in earnings per common share calculation $ 15,232 $ 23,648 $ 26,502 $ 75,797 Weighted average common shares Basic 21,373,300 22,069,885 21,359,051 22,110,315 Diluted 21,373,300 22,069,885 21,359,051 22,110,315 Earnings per common share Basic $ 0.71 $ 1.07 $ 1.24 $ 3.43 Diluted $ 0.71 $ 1.07 $ 1.24 $ 3.43 See accompanying notes to unaudited condensed consolidated financial statements 3 MGP INGREDIENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands) Quarter Ended September 30, Year to Date Ended September 30, 2025 2024 2025 2024 Net income attributable to MGP Ingredients, Inc. $ 15,422 $ 23,905 $ 26,824 $ 76,625 Other comprehensive income (loss), net of tax: Unrealized gain (loss) on foreign currency translation adjustment ( 244 ) 573 711 497 Change in Company-sponsored post-employment benefit plan ( 21 ) ( 39 ) ( 63 ) ( 119 ) Other comprehensive income (loss) ( 265 ) 534 648 378 Comprehensive income attributable to MGP Ingredients, Inc. 15,157 24,439 27,472 77,003 Comprehensive income (loss) attributable to noncontrolling interest 7 ( 43 ) ( 25 ) ( 162 ) Comprehensive income $ 15,164 $ 24,396 $ 27,447 $ 76,841 See accompanying notes to unaudited condensed consolidated financial statements 4 MGP INGREDIENTS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands) September 30, 2025 December 31, 2024 Current Assets Cash and cash equivalents $ 13,447 $ 25,273 Receivables (less allowance for credit loss, $ 1,190 and $ 1,875 at September 30, 2025, and December 31, 2024, respectively) 106,668 148,488 Inventory 384,523 364,944 Prepaid expenses 4,130 3,983 Refundable income taxes 2,006 3,448 Total current assets 510,774 546,136 Property, plant, and equipment 588,443 562,714 Less accumulated depreciation and amortization ( 261,462 ) ( 246,042 ) Property, plant, and equipment, net 326,981 316,672 Operating lease right-of-use assets, net 14,849 15,540 Investment in joint venture 7,894 7,024 Intangible assets, net 266,010 268,451 Goodwill 247,789 247,789 Other assets 2,736 4,173 Total assets $ 1,377,033 $ 1,405,785 Current Liabilities Current maturities of long-term debt $ 6,400 $ 6,400 Accounts payable 42,695 66,336 Contingent consideration, current 110,800 — Federal and state excise taxes payable 2,452 5,358 Accrued expenses and other 21,584 14,356 Total current liabilities 183,931 92,450 Long-term debt, less current maturities 66,220 121,277 Convertible senior notes 196,103 195,864 Long-term operating lease liabilities 11,483 11,940 Contingent consideration — 85,300 Other noncurrent liabilities 2,352 2,981 Deferred income taxes 63,405 63,430 Total liabilities 523,494 573,242 Commitments and Contingencies (Note 7) Stockholders’ Equity Capital stock Preferred, 5 % non-cumulative; $ 10 par value; authorized 1,000 shares; issued and outstanding 437 shares 4 4 Common stock No par value; authorized 40,000,000 shares; issued 23,125,166 shares at September 30, 2025 and December 31, 2024; and 21,292,736 and 21,194,707 shares outstanding at September 30, 2025 and December 31, 2024, respectively 6,715 6,715 Additional paid-in capital 330,062 332,195 Retained earnings 582,973 563,929 Accumulated other comprehensive loss ( 10 ) ( 658 ) Treasury stock, at cost, 1,832,430 and 1,930,459 shares at September 30, 2025 and December 31, 2024, respectively ( 64,557 ) ( 68,019 ) Total MGP Ingredients, Inc. stockholders’ equity 855,187 834,166 Noncontrolling interest ( 1,648 ) ( 1,623 ) Total equity 853,539 832,543 Total liabilities and equity $ 1,377,033 $ 1,405,785 See accompanying notes to unaudited condensed consolidated financial statements 5 MGP INGREDIENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Year to Date Ended September 30, 2025 2024 Cash Flows from Operating Activities Net income $ 26,799 $ 76,463 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 17,824 16,298 Share-based compensation 3,320 2,748 Equity method investment gain ( 869 ) ( 1,446 ) Deferred income taxes, including change in valuation allowance ( 25 ) ( 1,084 ) Change in fair value of contingent consideration 25,500 15,900 Other, net 594 429 Changes in operating assets and liabilities: Receivables, net 41,699 13,979 Inventory ( 19,935 ) ( 24,979 ) Prepaid expenses ( 163 ) ( 1,091 ) Income taxes payable (refundable) 1,442 ( 2,765 ) Accounts payable ( 8,446 ) ( 10,627 ) Accrued expenses and other 7,689 ( 9,935 ) Federal and state excise taxes payable ( 2,906 ) 231 Other, net ( 74 ) ( 609 ) Net cash provided by operating activities 92,449 73,512 Cash Flows from Investing Activities Additions to property, plant, and equipment ( 40,674 ) ( 52,850 ) Other, net ( 14 ) ( 276 ) Net cash used in investing activities ( 40,688 ) ( 53,126 ) Cash Flows from Financing Activities Payment of dividends and dividend equivalents ( 7,739 ) ( 8,013 ) Repurchase of Common Stock ( 1,035 ) ( 12,235 ) Loan fees paid related to borrowings ( 2,712 ) — Proceeds from long-term debt 28,000 70,000 Principal payments on long-term debt ( 80,800 ) ( 67,800 ) Net cash used in financing activities ( 64,286 ) ( 18,048 ) Effect of exchange rate changes on cash and cash equivalents 699 46 Increase (decrease) in cash and cash equivalents ( 11,826 ) 2,384 Cash and cash equivalents, beginning of period 25,273 18,388 Cash and cash equivalents, end of period $ 13,447 $ 20,772 See accompanying notes to unaudited condensed consolidated financial statements 6 MGP INGREDIENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For Year to Date Ended September 30, 2025 (Unaudited) (Dollars in thousands) Capital Stock Preferred Issued Common Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (loss) Treasury Stock Non-controlling Interest Total Balance, December 31, 2024 $ 4 $ 6,715 $ 332,195 $ 563,929 $ ( 658 ) $ ( 68,019 ) $ ( 1,623 ) $ 832,543 Comprehensive loss: Net loss — — — ( 3,024 ) — — ( 33 ) ( 3,057 ) Other comprehensive income — — — — 296 — — 296 Dividends declared (a) — — — ( 2,578 ) — — — ( 2,578 ) Share-based compensation — — 524 — — — — 524 Stock shares awarded, forfeited or vested — — ( 3,784 ) — — 3,784 — — Stock shares repurchased — — — — — ( 1,035 ) — ( 1,035 ) Balance, March 31, 2025 4 6,715 328,935 558,327 ( 362 ) ( 65,270 ) ( 1,656 ) 826,693 Comprehensive income: Net income — — — 14,426 — — 1 14,427 Other comprehensive income — — — — 617 — — 617 Dividends declared (a) — — — ( 2,599 ) — — — ( 2,599 ) Share-based compensation — — 991 — — — — 991 Stock shares awarded, forfeited or vested — — ( 670 ) — — 670 — — Balance, June 30, 2025 4 6,715 329,256 570,154 255 ( 64,600 ) ( 1,655 ) 840,129 Comprehensive income: Net income — — — 15,422 — 7 15,429 Other comprehensive loss — — — — ( 265 ) — ( 265 ) Dividends declared (a) — — — ( 2,603 ) — — — ( 2,603 ) Share-based compensation — — 849 — — — — 849 Stock shares awarded, forfeited, or vested — — ( 43 ) — — 43 — — Balance, September 30, 2025 $ 4 $ 6,715 $ 330,062 $ 582,973 $ ( 10 ) $ ( 64,557 ) $ ( 1,648 ) $ 853,539 (a) Dividends and dividend equivalents were $ 0.12 per common share, per restricted stock unit, and per performance stock unit for the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025. See accompanying notes to unaudited condensed consolidated financial statements 7 MGP INGREDIENTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For Year to Date Ended September 30, 2024 (Unaudited) (Dollars in thousands) Capital Stock Preferred Issued Common Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (loss) Treasury Stock Non-controlling Interest Total Balance, December 31, 2023 $ 4 $ 6,715 $ 325,453 $ 539,883 $ ( 397 ) $ ( 21,166 ) $ ( 1,425 ) $ 849,067 Comprehensive income: Net income (loss) — — — 20,635 — — ( 51 ) 20,584 Other comprehensive loss — — — — ( 40 ) — — ( 40 ) Dividends declared (a) — — — ( 2,670 ) — — — ( 2,670 ) Share-based compensation — — 5,563 — — — — 5,563 Stock shares awarded, forfeited or vested — — ( 1,556 ) — — 1,556 — — Stock shares repurchased — — — — — ( 6,961 ) — ( 6,961 ) Balance, March 31, 2024 4 6,715 329,460 557,848 ( 437 ) ( 26,571 ) ( 1,476 ) 865,543 Comprehensive income: Net income (loss) — — — 32,085 — — ( 68 ) 32,017 Other comprehensive loss — — — — ( 116 ) — — ( 116 ) Dividends declared (a) — — — ( 2,668 ) — — — ( 2,668 ) Share-based compensation — — 911 — — — — 911 Stock shares awarded, forfeited, or vested — — ( 658 ) — — 658 — — Stock shares repurchased — — — — — ( 2,774 ) — ( 2,774 ) Balance, June 30, 2024 4 6,715 329,713 587,265 ( 553 ) ( 28,687 ) ( 1,544 ) 892,913 Comprehensive income: Net income (loss) — — — 23,905 — ( 43 ) 23,862 Other comprehensive income — — — — 534 — 534 Dividends declared (a) — — — ( 2,666 ) — — — ( 2,666 ) Share-based compensation — — 742 — — — — 742 Stock shares awarded, forfeited, or vested — — ( 59 ) — — 59 — — Stock shares repurchased — — — — — ( 2,500 ) — ( 2,500 ) Balance, September 30, 2024 $ 4 $ 6,715 $ 330,396 $ 608,504 $ ( 19 ) $ ( 31,128 ) $ ( 1,587 ) $ 912,885 (a) Dividends and dividend equivalents were $ 0.12 per common share and per restricted stock unit for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024. See accompanying notes to unaudited condensed consolidated financial statements 8 MGP INGREDIENTS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, unless otherwise noted) Note 1. Accounting Policies and Basis of Presentation The Company. MGP Ingredients, Inc. (the “Company” or “MGP”) is a Kansas corporation headquartered in Atchison, Kansas and is a leading producer of branded and distilled spirits, as well as food ingredient solutions. The Company has a portfolio of its own high quality branded spirits which are produced through its distilleries and bottling facilities and sold to distributors. The Company’s branded spirits products account for a range of price points from value products through premium plus brands. Distilled spirits include premium bourbon, rye, and other American whiskeys (“brown goods”) and grain neutral spirits (“GNS”), including vodka and gin. The Company’s distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits. The Company’s protein and starch food ingredients are predominately wheat based and provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry. The ingredient products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries. The Company reports three operating segments: Branded Spirits, Distilling Solutions, and Ingredient Solutions. Basis of Presentation and Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements as of and for the quarter and year to date ended September 30, 2025, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”). The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to fairly present the results for interim periods in accordance with U.S. generally accepted accounting principles (“GAAP”). Pursuant to the rules and regulations of the SEC, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted. The Company holds a 60 percent interest in Dos Primos Tequila, LLC (“Dos Primos”). The Company consolidated Dos Primos’ activity on the financial statements and presented the 40 percent non-controlling interest portion on a separate line. Use of Estimates. The financial reporting policies of the Company conform to GAAP. The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The application of certain of these policies places demands on management’s judgment, with financial reporting results relying on estimation about the effects of matters that are inherently uncertain. For all of these policies, management cautions that future events may not develop as forecast, and estimates routinely require adjustment and may require material adjustment. Inventory. Inventory includes finished goods, raw materials in the form of agricultural commodities used in the production process as well as bottles, caps, and labels used in the bottling process, and certain maintenance and repair items. Bourbons, ryes, and other whiskeys, included in inventory, are normally aged in barrels for several years, following industry practice; all barreled bourbon, rye, and other whiskeys are classified as a current asset. The Company includes warehousing, insurance, and other carrying charges applicable to barreled whiskey in inventory costs. 9 Inventories are stated at the lower of cost or net realizable value on the first-in, first-out, or FIFO, method. Inventory valuations are impacted by constantly changing prices paid for key materials. Inventory consists of the following: September 30, 2025 December 31, 2024 Finished goods $ 47,740 $ 43,952 Barreled distillate (bourbons and other whiskeys) 299,438 283,119 Raw materials 25,898 25,491 Work in process 1,776 1,673 Maintenance materials 8,820 8,591 Other 851 2,118 Total $ 384,523 $ 364,944 Revenue Recognition. Revenue is recognized when control of the promised goods or services, through performance obligations by the Company, is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for the performance obligations. The term between invoicing and when payment is due is not significant and the period between when the entity transfers the promised good or service to the customer and when the customer pays for that good or service is generally one year or less. Revenue is recognized for the sale of products at the point in time finished products are delivered to the customer in accordance with shipping terms. This is a faithful depiction of the satisfaction of the performance obligation because, at the point control passes to the customer, the customer has legal title and the risk and rewards of ownership have transferred, and the customer has a present obligation to pay. The Distilling Solutions segment routinely enters into bill and hold arrangements, whereby the Company produces and sells aged and unaged distillate to customers, and the product is barreled at the customer’s request and warehoused by the Company for an extended period of time in accordance with directions received from the Company’s customers. Even though the aged and unaged distillate remains in the Company’s possession, a sale is recognized at the point in time when the customer obtains control of the product. Control is transferred to the customer in bill and hold transactions when the customer acceptance specifications have been met, legal title has transferred, the customer has a present obligation to pay for the product, and the risk and rewards of ownership have transferred to the customer. Additionally, all of the following bill and hold criteria have to be met in order for control to be transferred to the customer: the reason for the bill and hold arrangement is substantive, the customer has requested the product be warehoused, the product has been identified as separately belonging to the customer, the product is currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or direct it to another customer. Warehouse services revenue is recognized over the time that warehouse services are rendered and as they are rendered. This is a faithful depiction of the satisfaction of the performance obligation because control of the aging products has already passed to the customer and there are no additional performance activities required by the Company, except as requested by the customer. The performance of the service activities, as requested, is invoiced as satisfied and revenue is concurrently recognized. Contract bottling is recognized over the time contract bottling services are rendered and as they are rendered. Sales in the Branded Spirits segment reflect reductions attributable to consideration given to customers in incentive programs, including discounts and allowances for certain volume targets. These allowances and discounts are not for distinct goods and are paid only when the depletion volume targets are achieved by the customer. The amounts reimbursed to customers are determined based on agreed-upon amounts and are recorded as a reduction of revenue. Excise Taxes. The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau of the U.S. Treasury Department (the “TTB”) regulations, which include making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual U.S. states also impose excise taxes on alcohol beverages in varying amounts. The Company calculates its U.S. federal and state excise tax expense based upon units shipped and on its understanding of the applicable excise tax laws. Excise taxes that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by the Company from a customer, are excluded from revenue and expense. 10 Income Taxes. The Company accounts for income taxes using an asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. A valuation allowance is recognized if it is more likely than not that at least some portion of the deferred tax asset will not be realized. Earnings Per Common Share (“EPS”). Basic and diluted EPS is computed using the two-class method, which is an earnings allocation formula that determines net income per share for each class of Common Stock and participating security according to dividends declared and participation rights in undistributed earnings. Basic EPS amounts are computed by dividing net income attributable to common shareholders by the weighted average shares outstanding during each period. Diluted EPS is computed using the if-converted method by dividing the net income attributable to common shareholders by the weighted average shares outstanding, inclusive of the impact of potentially dilutive items such as the Convertible Senior Notes or stock options, except for where the result would be anti-dilutive as of the balance sheet date. Translation of Foreign Currencies. Assets and liabilities of Niche Drinks Co Ltd (“Niche”), a wholly-owned subsidiary of the Company whose functional currency is the British pound sterling, are translated to U.S. dollars using the exchange rate in effect at the condensed consolidated balance sheet date. Results of operations are translated using average rates during the period. Adjustments resulting from the translation process are included as a component of accumulated other comprehensive income. Goodwill and Indefinite-Lived Intangible Assets. The Company records goodwill and indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and indefinite-lived intangible assets to its respective reporting units. All goodwill and indefinite-lived intangible assets included in the Condensed Consolidated Balance Sheets are related to the Branded Spirits reporting unit. The Company evaluates goodwill for impairment at least annually, in the fourth quarter, or on an interim basis if events and circumstances occur that would indicate it is more likely than not that the fair value of a reporting unit is less than the carrying value. To the extent that the carrying value exceeds fair value, an impairment of goodwill is recognized. Judgment is required in the determination of reporting units, the assignment of assets and liabilities to reporting units, including goodwill, and the determination of fair value of the reporting units. The Company separately evaluates indefinite-lived intangible assets for impairment. During 2025, the Company experienced a decrease in stock price and market capitalization. The Company assessed whether this decrease constituted a triggering event for its Branded Spirits reporting unit. The Company concluded that there was no triggering event because it believes the decline in the Company’s market capitalization results from the financial performance of all three reporting units, in particular, the recent declines experienced for Distilling Solutions and Ingredient Solutions. As of September 30, 2025, the Company determined that goodwill relating to the Branded Spirits reporting unit was not impaired. Also, despite recent declines in performance of certain brands within the mid and value price tiers, as of September 30, 2025, the Company determined that indefinite-lived intangible assets relating to the Branded Spirits reporting unit were not impaired. The Company will continue to evaluate its goodwill and indefinite-lived intangible assets in future quarters. Independent of the expected future operating performance of the Branded Spirits reporting unit, any further significant decline in the Company’s market capitalization or changes in discount rates, even if due to macroeconomic factors, could put pressure on the carrying value of its goodwill. In addition, if future revenues and contributions to the Company’s operating results for any of its indefinite-lived intangible assets or the Branded Spirits reporting unit perform at levels below its current projections, the Company may be required to record impairment charges to certain intangible assets or the goodwill related to the Branded Spirits reporting unit. A determination that a portion or all of the Company’s goodwill or indefinite-lived intangible assets are impaired could have a material adverse effect on its business, consolidated financial condition, and results of operations. Fair Value of Financial Instruments. The Company determines the fair values of its financial instruments based on a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into three levels based upon the observability of inputs. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s short-term financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of the short-term financial instruments approximates the fair value due to their short-term nature. 11 These financial instruments have no stated maturities or the financial instruments have short-term maturities that approximate market. The fair value of the Company’s debt is estimated based on current market interest rates for debt with similar maturities and credit quality. Excluding the impact of the conversion feature of the Convertible Senior Notes, the fair value of the Company’s debt was $ 204,021 and $ 249,672 at September 30, 2025 and December 31, 2024, respectively. The financial statement carrying value of total debt (net of unamortized loan fees) was $ 268,723 and $ 323,541 at September 30, 2025 and December 31, 2024, respectively. These fair values are considered Level 2 under the fair value hierarchy. The fair value calculation of contingent consideration associated with the acquisition of Penelope Bourbon LLC (“Penelope”) uses unobservable inputs, such as estimated net sales over the term of the earn-out period, discount rates, and volatility rates. The contingent consideration is measured using the Monte Carlo simulation approach. The inputs used in the calculation of the contingent consideration liability are considered Level 3 under the fair value hierarchy due to the lack of relevant market activity. The contingent consideration liability is measured on a quarterly basis and recorded at fair value. The changes in fair value of the obligation resulted from changes in the key assumptions between measurement dates, such as actual net sales, projected net sales, discount rates, and volatility rates. During the quarters ended September 30, 2025 and 2024, there were $ 2,800 and $ 6,400 , respectively, in adjustments to the fair value measurement of the contingent consideration obligation. During the years to date ended September 30, 2025 and 2024, there were $ 25,500 and $ 15,900 , respectively, in adjustments to the fair value measurement of the contingent consideration obligation. These adjustments were included in the change in fair value of contingent consideration on the Condensed Consolidated Statements of Income. The fair value of the Company’s contingent consideration liability was $ 110,800 and $ 85,300 at September 30, 2025 and December 31, 2024, respectively. The amount payable is based upon achievement of certain net sales targets between the acquisition date and December 31, 2025. The Company achieved the maximum net sales target as defined in the Penelope acquisition agreement during the third quarter 2025, and in accordance with the terms of the agreement, the Company will pay out the full contingent consideration of $ 110,800 during the first half of 2026. Fair value disclosure for deferred compensation plan investments is included in Note 8, Employee and Non-Employee Benefit Plans. Equity Method Investments. The Company holds 50 percent interests in DGL Destiladores, S.de R.L. de C.V. (“DGL”) and Agricola LG, S.de R.L. de C.V. (“Agricola” and together with DGL, “LMX”), which are accounted for as equity method investments and are considered affiliates of the Company. The investment in LMX, which is recorded in investment in joint venture on the Condensed Consolidated Balance Sheets, was $ 7,894 and $ 7,024 at September 30, 2025 and December 31, 2024, respectively. During the quarter and year to date ended September 30, 2025, the Company recorded income of $ 375 and $ 869 , respectively, from its equity method investment. During the quarter and year to date ended September 30, 2024, the Company recorded income of $ 832 and $ 1,446 , respectively, from its equity method investments. Income from the equity method investment is recorded in other income, net on the Condensed Consolidated Statements of Income. During the quarters ended September 30, 2025 and 2024, the Company purchased $ 5,753 and $ 7,606 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL. During the year to date ended September 30, 2025 and 2024, the Company purchased $ 16,319 and $ 22,604 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL. Recently Adopted Accounting Standard Updates. The Company did not adopt any new Accounting Standard Updates (“ASUs”) during the quarter ended September 30, 2025. Recently Issued Accounting Pronouncements. ASU 2023-09, Improvements to Income Tax Disclosures, requires improved disclosures related to the rate reconciliation and income taxes paid. This ASU requires companies to reconcile the income tax expense attributable to continuing operations to the statutory federal income tax rate applied to pre-tax income from continuing operations. Additionally, this ASU requires companies to disclose the total amount of income taxes paid during the period. This ASU is effective for annual periods beginning after December 15, 2024 with early adoption permitted. The guidance is required to be applied on a prospective basis with the option to apply retrospectively to all prior periods presented in the financial statements. The Company plans to adopt this ASU when it becomes effective, and the Company expects this ASU will impact the Company’s note disclosures with no material impacts to the Company’s consolidated financial statements. 12 ASU 2024-03, Disaggregation of Income Statement Expenses , requires disaggregated disclosures in the notes to the consolidated financial statements of certain categories of expenses that are included in expense line items on the Consolidated Statement of Income. This ASU is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance is required to be applied on a prospective basis with the option to apply retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact of this ASU to the Company’s consolidated financial statements. ASU 2024-04, Induced Conversions of Convertible Debt Instruments , clarifies the requirement for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions or extinguishments. This ASU is effective for annual periods beginning after December 15, 2025. Early adoption is permitted and can be applied either on a prospective basis or retrospective basis. The Company is currently evaluating the impact of this ASU to the Company’s consolidated financial statements, however the Company does not anticipate this ASU having a material impact to its consolidated financial statements. ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, amends certain aspects of the accounting for software costs, including removing software development project stages and requiring companies to capitalize software costs when both of the following occur: (1) management authorizes or commits to funding a software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. This ASU is effective for annual periods beginning after December 15, 2027 and interim periods within those fiscal years. Early adoption is permitted and can be applied prospectively, retrospectively, or utilizing a modified transition approach. The Company is currently evaluating the impact of this ASU to its consolidated financial statements. Note 2. Revenue The Company generates revenue from the Branded Spirits segment by the sale of products and by providing contract bottling services. The Company generates revenue from the Distilling Solutions segment by the sale of products and by providing warehouse services related to the storage and aging of customer products. The Company generates revenue from the Ingredient Solutions segment by the sale of products. Revenue related to sales of products is recognized at a point in time whereas revenue generated from warehouse services and contract bottling services is recognized over time. Contracts with customers include a single performance obligation (either the sale of products or the provision of warehouse services and contract bottling services). 13 Disaggregation of Sales. The following table presents the Company’s sales disaggregated by segment and major products and services: Quarter Ended September 30, Year to Date Ended September 30, 2025 2024 2025 2024 Branded Spirits Premium plus $ 32,119 $ 31,086 $ 85,536 $ 82,699 Mid 14,835 14,788 43,355 46,610 Value 8,170 10,034 24,447 31,698 Other 5,624 6,716 16,157 15,804 Total Branded Spirits 60,748 62,624 169,495 176,811 Distilling Solutions Brown goods 28,512 57,110 97,225 198,884 Warehouse services 8,052 8,264 24,130 24,612 White goods and other co-products 4,317 6,545 16,469 26,663 Total Distilling Solutions 40,881 71,919 137,824 250,159 Ingredient Solutions Specialty wheat starches 16,965 16,172 51,292 57,646 Specialty wheat proteins 8,905 7,752 28,865 28,947 Commodity wheat starches 2,317 2,611 8,097 8,846 Commodity wheat proteins 993 383 2,383 420 Biofuel and other 103 — 103 — Total Ingredient Solutions 29,283 26,918 90,740 95,859 Total sales $ 130,912 $ 161,461 $ 398,059 $ 522,829 Note 3. Goodwill and Intangible Assets Definite-Lived Intangible Assets. The Company acquired definite-lived intangible assets in connection with various acquisitions of businesses prior to 2025. The distributor relationships have a carrying value of $ 53,020 , net of accumulated amortization of $ 12,080 . The distributor relationships have a useful life of 20 years. The amortization expense for the quarters ended September 30, 2025 and 2024 was $ 814 . The amortization expense for years to date ended September 30, 2025 and 2024 was $ 2,441 . As of September 30, 2025, the expected future amortization expense related to definite-lived intangible assets is as follows: Remainder of 2025 $ 814 2026 3,255 2027 3,255 2028 3,255 2029 3,255 Thereafter 39,186 Total $ 53,020 Goodwill and Indefinite-Lived Intangible Assets. The Company records goodwill and indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the goodwill and indefinite-lived intangible assets to its respective reporting units. The carrying amount of goodwill, which relates to the Branded Spirits segment, was $ 247,789 at both September 30, 2025 and December 31, 2024. The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $ 212,990 at both September 30, 2025 and December 31, 2024. 14 Note 4. Corporate Borrowings The following table presents the Company’s outstanding indebtedness: Description (a) September 30, 2025 December 31, 2024 Credit Agreement - Revolver, 5.26 % (variable rate) due 2030 $ 57,000 $ 105,000 Convertible Senior Notes, 1.88 % (fixed rate) due 2041 201,250 201,250 Note Purchase Agreement Series A Senior Secured Notes, 3.53 % (fixed rate) due 2027 6,400 8,800 Senior Secured Notes, 3.80 % (fixed rate) due 2029 12,000 14,400 Total indebtedness outstanding 276,650 329,450 Less unamortized loan fees (b) ( 7,927 ) ( 5,909 ) Total indebtedness outstanding, net 268,723 323,541 Less current maturities of long-term debt ( 6,400 ) ( 6,400 ) Long-term debt $ 262,323 $ 317,141 (a) Interest rates are as of September 30, 2025. (b) Loan fees are being amortized over the life of the debt agreements. Credit Agreement. On February 14, 2020, the Company entered into a credit agreement (the “Credit Agreement”) with multiple participants led by Wells Fargo Bank, National Association (“Wells Fargo Bank”) which provided for a $ 300,000 revolving credit facility and had a maturity date of May 14, 2026. On April 24, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Wells Fargo Bank, as administrative agent, swingline lender, and issuing lender, and the other lenders and parties thereto. The A&R Credit Agreement amends and restates the Company’s existing Credit Agreement, extending the maturity date to April 24, 2030. The A&R Credit Agreement increases the size of the revolving credit facility to $ 500,000 and permits the Company to increase the amount of the revolving credit facility by up to an additional $ 200,000 , subject to certain conditions and at the discretion of the lenders. The Company incurred $ 2,712 of loan fees related to the A&R Credit Agreement during the year to date ended September 30, 2025. The A&R Credit Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2025. As of September 30, 2025, the Company had $ 57,000 of outstanding borrowings under the A&R Credit Agreement, leaving $ 443,000 available. Convertible Senior Notes. On November 16, 2021, the Company issued $ 201,250 in aggregate principal amount of 1.88 % convertible senior notes due in 2041 (the “2041 Notes”). The 2041 Notes were issued pursuant to an indenture, dated as of November 16, 2021 (the “Indenture”), by and among the Company, as issuer, Luxco, Inc., MGPI Processing, Inc., and MGPI of Indiana, LLC, as subsidiary guarantors, and U.S. Bank National Association, as trustee. The 2041 Notes are senior, unsecured obligations of the Company and interest is payable semi-annually in arrears at a fixed interest rate of 1.88 % on May 15 and November 15 of each year. The 2041 Notes mature on November 15, 2041 unless earlier repurchased, redeemed, or converted, per the terms of the Indenture. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2041 Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at its election, in respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2041 Notes being converted. Note Purchase Agreements. The Company’s Note Purchase and Private Shelf Agreement (the “Note Purchase Agreement”) with PGIM, Inc. (“Prudential”), an affiliate of Prudential Financial, Inc., and certain affiliates of Prudential, provides for the issuance of $ 20,000 of Series A Senior Secured Notes and the issuance of up to $ 105,000 of additional Senior Secured Notes (or any higher amount solely to the extent Prudential has provided written notice to the Company of its authorization of such a higher amount). Effective August 23, 2023, the Note Purchase Agreement was amended to increase the total amount of Senior Secured Notes that may be issued under the facility of the Note Purchase Agreement to $ 250,000 . On April 24, 2025, the Note Purchase Agreement was amended to extend the period for issuing senior secured promissory notes under the Note Purchase Agreement from August 31, 2026 to April 24, 2028. During 2017, the Company issued $ 20,000 of Series A Senior Secured Notes with a maturity date of August 23, 2027. During 2019, the Company issued $ 20,000 of additional Senior Secured Notes with a maturity date of April 30, 2029. The Note Purchase Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2025 . As of September 30, 2025, the Company had $ 6,400 of Series A Senior Secured Notes and $ 12,000 of additional Senior 15 Secured Notes outstanding under the Note Purchase Agreement, leaving $ 231,600 available under the Note Purchase Agreement. Note 5. Income Taxes The Company’s tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the estimated annual effective tax rate is updated and a year to date adjustment is made to the provision. The Company’s quarterly effective tax rate can be subject to significant change due to the effect of discrete items arising in a given quarter. On July 4, 2025, the “One Big Beautiful Bill Act” (“OB3 Act”) was signed into law. Among other changes, the OB3 Act includes key provisions that make 100% bonus depreciation permanent, allow for the expensing of domestic research costs, and modify the business interest expense limitation calculation. The applicable changes were incorporated into the Company’s income tax provision for the quarter and year to date ended September 30, 2025, resulting in an increase in the Company’s deferred tax expense, offset by a corresponding decrease in the Company’s current tax expense. The OB3 Act had an immaterial impact to the Company’s effective tax rate for the quarter and year to date ended September 30, 2025, and the Company does not expect the OB3 Act to have a material impact on the Company’s effective tax rate for 2025. Income tax expense for the quarter and year to date ended September 30, 2025 was $ 4,276 and $ 9,255 , respectively, for an effective tax rate of 21.7 percent and 25.7 percent, respectively. The effective tax rate for the quarter and year to date ended September 30, 2025 differed from the 21 percent U.S. federal statutory rate on pretax income primarily due to state income tax and income tax on foreign subsidiaries, partially offset by federal and state tax credits. In addition, for the year to date ended September 30, 2025, the effective tax rate differed from the U.S. federal statutory rate on pretax income due to the discrete tax impact related to the vesting of share based awards. Income tax expense for the quarter and year to date ended September 30, 2024 was $ 7,554 and $ 23,924 , respectively, for an effective tax rate of 24.0 percent and 23.8 percent, respectively. The effective tax rate for the quarter and year to date ended September 30, 2024 differed from the 21 percent U.S. federal statutory rate on pretax income primarily due to state income taxes and income taxes on foreign subsidiaries, partially offset by U.S. state and federal tax credits and the deduction applicable to export activity. Note 6. Equity and EPS The following table presents computations of basic and diluted EPS: Quarter Ended September 30, Year to Date Ended September 30, 2025 2024 2025 2024 Operations: Net income (a) $ 15,429 $ 23,862 $ 26,799 $ 76,463 Net loss (income) attributable to noncontrolling interest ( 7 ) 43 25 162 Income attributable to participating securities (unvested shares and units) (b) ( 190 ) ( 257 ) ( 322 ) ( 828 ) Net income used in EPS calculation $ 15,232 $ 23,648 $ 26,502 $ 75,797 Share information: Basic weighted average common shares (c) 21,373,300 22,069,885 21,359,051 22,110,315 Diluted weighted average common shares (d) 21,373,300 22,069,885 21,359,051 22,110,315 Basic EPS $ 0.71 $ 1.07 $ 1.24 $ 3.43 Diluted EPS $ 0.71 $ 1.07 $ 1.24 $ 3.43 (a) Net income attributable to all stockholders. (b) Participating securities included 240,820 and 243,243 unvested restricted stock units (“RSUs”) at September 30, 2025 and 2024, respectively. (c) Under the two-class method, basic weighted average common shares exclude unvested participating securities. (d) The impacts of the Convertible Senior Notes and stock options were included in the diluted weighted average common shares if the inclusion was dilutive. The Convertible Senior Notes would only have a dilutive impact if the average market price per share during the quarter and year to date period exceeds the conversion price of $ 96.24 per share. 16 Share Repurchase. On February 29, 2024, the Company announced that its Board of Directors approved a $ 100,000 share repurchase program. Under the share repurchase program, the Company can repurchase stock from time to time for cash in open market purchases, privately negotiated transactions, or by other means, in accordance with applicable securities laws and other legal requirements. The repurchase program has no expiration date and may be modified, suspended, or discontinued at any time by the Company without prior notice. During the quarter and year to date ended September 30, 2025, the Company repurchased no shares under the share repurchase program. During the quarter and year to date ended September 30, 2024, the Company repurchased approximately 35,913 and 128,360 shares, respectively, of Company Stock for approximately $ 2,500 and $ 10,000 , respectively. As of September 30, 2025, there was approximately $ 53,412 remaining under the share repurchase program. Common Stock Share Activity. The following table presents the Company’s share activity: Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2024 437 21,194,707 Issuance of Common Stock — 107,267 Repurchase of Common Stock (b) — ( 31,631 ) Balance, March 31, 2025 437 21,270,343 Issuance of Common Stock — 21,099 Repurchase of Common Stock — — Balance, June 30, 2025 437 21,291,442 Issuance of Common Stock — 1,294 Repurchase of Common Stock — — Balance, September 30, 2025 437 21,292,736 Shares Outstanding Capital Stock Preferred Common Stock Balance, December 31, 2023 437 22,016,113 Issuance of Common Stock — 74,913 Repurchase of Common Stock (a) — ( 81,969 ) Balance, March 31, 2024 437 22,009,057 Issuance of Common Stock — 14,627 Repurchase of Common Stock (a) — ( 35,999 ) Balance, June 30, 2024 437 21,987,685 Issuance of Common Stock — 809 Repurchase of Common Stock (a) — ( 35,913 ) Balance, September 30, 2024 437 21,952,581 (a) 59,084 , 33,363 , and 35,913 shares that were repurchased during the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, respectively, pursuant to the Company’s share repurchase program. The remaining shares repurchased were related to the tax withholding on equity-based compensation. (b) The Common Stock repurchases were for tax withholding on equity-based compensation. Note 7. Commitments and Contingencies The Company and its subsidiaries are, from time to time, a party to legal and regulatory proceedings arising in the ordinary course of its business. The Company accrues estimated costs for a contingency when management believes that a loss is probable and can be reasonably estimated. On December 16, 2024, a putative securities class action, captioned Operating Engineers Construction Industry Miscellaneous Pension Fund v. MGP Ingredients, Inc. et al., was filed in the United States District Court for the Southern District of New York against the Company, two of its former Chief Executive Officers and its current Chief Financial Officer (the “Operating Engineers Action”). The Operating Engineers Action was brought on behalf of a putative class who acquired publicly traded MGP common stock between May 4, 2023 and October 30, 2024. On February 13, 2025, a second putative securities class action, captioned Bronstein v. MGP Ingredients, Inc. et al., was filed in the United States District Court for the Southern 17 District of New York against the same defendants (the “Bronstein Action”). The Bronstein Action was brought on behalf of a putative class who acquired publicly traded MGP securities between May 4, 2023 and October 30, 2024. Both actions assert securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, in connection with statements made in the Company’s quarterly earnings releases and on earnings calls during the alleged class period. The Operating Engineers Action and Bronstein Action have been consolidated and transferred to the United States District Court for the District of Kansas, now captioned In re MGPI Ingredients, Inc. Securities Litigation. Lead Plaintiffs filed an Amended Complaint on May 15, 2025, which Defendants moved to dismiss on July 15, 2025. The Company believes there are substantial defenses to the claims asserted and intends to defend the lawsuit vigorously. On January 23, 2025, a putative derivative lawsuit captioned Sebald v. Colo, et al., Case No. 2:25-cv-02034, was filed in the United States District Court for the District of Kansas against two of the Company’s former Chief Executive Officers, its current Chief Financial Officer, and the members of its Board of Directors (the “Sebald Action”). On March 17, 2025, a second putative derivative lawsuit captioned Reid v. Bratcher, et al., Case No. 2:25-cv-02127, was filed in the United States District Court for the District of Kansas against the same defendants (the “Reid Action”). On July 1, 2025, the respective plaintiffs in these cases filed a consolidated amended complaint (the “Consolidated Action”). On May 15, 2025, a third putative derivative lawsuit captioned Kruitwagen v. Bratcher, et al., Case No. 2:25-cv-02262, was filed in the United States District Court for the District of Kansas against the same defendants as in the Consolidated Action. The Company is a “Nominal Defendant” in the lawsuits, which reflects the fact that the lawsuits are maintained by the respective named plaintiffs on behalf of the Company and that the plaintiffs seek damages on the Company’s behalf. The complaints allege, among other things, that the defendants breached their fiduciary duties and violated federal securities laws by causing the Company to make false and/or misleading statements and/or omissions in public filings during the class period alleged in the securities action and also allege breaches of fiduciary duties by failing to maintain internal controls. The complaints also allege breaches of fiduciary duties by seeking shareholder approval of an equity incentive plan, and causing the Company to repurchase its own stock at artificially inflated prices. The complaints bring additional claims for unjust enrichment, abuse of control, gross mismanagement, aiding and abetting breaches of fiduciary duties, and waste of corporate assets and seek indemnity and contribution from the named current and former officers. On July 24, 2025 and July 28, 2025, the Court entered orders staying the Consolidated Action and Kruitwagen, respectively, pending an outcome on the motion to dismiss filed in the putative securities class action. The defendants believe there are substantial defenses to the claims asserted and intend to defend the lawsuits vigorously. Note 8. Employee and Non-Employee Benefit Plans Share-Based Compensation Plans . The Company has one equity-based compensation plan, the 2024 Equity Incentive Plan (the “2024 Plan”), which authorized 1,319,320 shares for issuance, subject to the adjustment and add-back provision of the 2024 Plan. The 2024 Plan provides for the awarding of stock options, stock appreciation rights, shares of restricted stock, RSUs, performance stock units (“PSUs”), and other stock-based awards for executive officers and other employees, as well as non-employee directors and certain consultants and advisors. As of September 30, 2025, 908,619 shares remain available for issuance under the 2024 Plan, with PSUs counted at the target level established on the award’s grant date. Deferred Compensation Plan. The Company established an unfunded Executive Deferred Compensation Plan (the “EDC Plan”) effective June 30, 2018, with a purpose to attract and retain highly-compensated key employees by providing participants with an opportunity to defer receipt of a portion of their salary, bonus, and other specified compensation. The Company’s obligations under the EDC Plan change in conjunction with the performance of the participants’ investments, along with contributions to and withdrawals from the EDC Plan. Realized and unrealized gains (losses) on deferred compensation plan investments were included as a component of other income (expense), net on the Company’s Condensed Consolidated Statements of Income. For the quarter and year to date ended September 30, 2025, the Company had a gain on deferred compensation plan investments of $ 73 and $ 121 , respectively, and for the quarter and year to date ended September 30, 2024, the Company had a gain on deferred compensation plan investments of $ 196 and $ 482 , respectively. EDC Plan investments are classified as Level 1 in the fair value hierarchy since the investments trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis. At September 30, 2025 and December 31, 2024, the EDC Plan investments were $ 2,223 and $ 3,653 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets. The EDC Plan current liabilities were $ 661 and $ 1,520 at September 30, 2025 and December 31, 2024, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets. The EDC Plan non-current liabilities were $ 1,562 and $ 2,132 at September 30, 2025 and December 31, 2024, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets. 18 Note 9. Operating Segments At September 30, 2025, the Company had three segments: Branded Spirits, Distilling Solutions, and Ingredient Solutions. The Company’s reportable segments are based on the financial information the chief operating decision maker uses to allocate resources and evaluate performance of the business. The Branded Spirits segment consists of a portfolio of high quality branded spirits which are produced through distilleries and bottling facilities. The Distilling Solutions segment consists of food grade alcohol (primarily brown goods) and distillery co-products, such as distillers feed (commonly called dried distillers grain in the industry). The Distilling Solutions segment also includes warehouse services, such as barrel put away, barrel storage, and barrel retrieval services. The Ingredient Solutions segment consists of specialty starches and proteins as well as commodity starches and proteins. Intersegment sales and transfers are recorded at cost and are treated as a transfer of inventory. All intercompany revenues are eliminated in consolidation and are not reviewed when evaluating segment performance. Operating profit for each segment is based on sales less identifiable operating expenses. Non-direct selling, general, and administrative expenses, interest expense, and other general miscellaneous expenses are excluded from segment operations and are classified as Corporate. Receivables, inventories, property, plant and equipment, leases, goodwill, and intangible assets have been identified with the segments to which they relate. All other assets are considered as Corporate. The following tables present summarized financial information for each segment: Quarter Ended September 30, 2025 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales $ 60,748 $ 40,881 $ 29,283 $ — $ 130,912 Cost of Goods Sold 28,528 26,681 26,270 — 81,479 Gross Profit 32,220 14,200 3,013 — 49,433 Advertising and promotion expense 6,249 185 241 16 6,691 SG&A expense 8,420 711 963 8,832 18,926 Change in fair value of contingent consideration 2,800 — — — 2,800 Operating income $ 14,751 $ 13,304 $ 1,809 $ ( 8,848 ) $ 21,016 Depreciation and amortization $ 2,157 $ 2,041 $ 1,635 $ 353 $ 6,186 Quarter Ended September 30, 2024 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales $ 62,624 $ 71,919 $ 26,918 $ — $ 161,461 Cost of Goods Sold 30,178 43,275 22,193 — 95,646 Gross Profit 32,446 28,644 $ 4,725 $ — 65,815 Advertising and promotion expense 8,704 395 410 138 9,647 SG&A expense 9,951 618 1,038 5,597 17,204 Change in fair value of contingent consideration 6,400 — — — 6,400 Operating income $ 7,391 $ 27,631 $ 3,277 $ ( 5,735 ) $ 32,564 Depreciation and amortization $ 2,192 $ 1,975 $ 1,178 $ 335 $ 5,680 19 Year to Date Ended September 30, 2025 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales $ 169,495 $ 137,824 $ 90,740 $ — $ 398,059 Cost of Goods Sold 83,093 86,132 77,684 — 246,909 Gross Profit 86,402 51,692 13,056 — 151,150 Advertising and promotion expense 20,171 616 892 97 21,776 SG&A expense 26,389 2,149 3,057 31,692 63,287 Change in fair value of contingent consideration 25,500 — — — 25,500 Operating income $ 14,342 $ 48,927 $ 9,107 $ ( 31,789 ) $ 40,587 Depreciation and amortization $ 6,442 $ 6,121 $ 4,213 $ 1,048 $ 17,824 Year to Date Ended September 30, 2024 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales $ 176,811 $ 250,159 $ 95,859 $ — $ 522,829 Cost of Goods Sold 88,200 144,959 77,828 — 310,987 Gross Profit 88,611 105,200 18,031 — 211,842 Advertising and promotion expense 27,286 955 1,344 410 29,995 SG&A expense 29,891 1,880 2,906 26,265 60,942 Impairment of long-lived assets and other — 137 — — 137 Change in fair value of contingent consideration 15,900 — — — 15,900 Operating income $ 15,534 $ 102,228 $ 13,781 $ ( 26,675 ) $ 104,868 Depreciation and amortization $ 5,867 $ 5,900 $ 3,517 $ 1,014 $ 16,298 The following table allocates assets to each segment as of: September 30, 2025 December 31, 2024 Identifiable Assets Branded Spirits $ 874,688 $ 862,458 Distilling Solutions 342,092 382,432 Ingredient Solutions 132,844 132,003 Corporate 27,409 28,892 Total $ 1,377,033 $ 1,405,785 Note 10. Subsequent Events Dividend. On October 29, 2025, the Company announced a quarterly dividend payable to stockholders of record of the Company’s common stock, resulting in dividend equivalents payable to certain RSU holders, of $ 0.12 per share and per RSU. The dividend and dividend equivalents are payable on November 28, 2025 to stockholders of record and certain RSU holders as of November 14, 2025. 20