What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-26 · 292 added, 227 removed, 851 unchanged (38% of the section changed)

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

With the participation of the Interim Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission.

With the participation of the Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission.

As a result of this assessment, management has concluded that the Company’s internal control over financial reporting as of December 31, 2025 was effective.

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We have audited the accompanying consolidated balance sheets of MGP Ingredients, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income (loss), comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and

expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Also, to evaluate that the Company does not have the ability to use the product or direct to another customer, we inspected underlying documentation for the same sample of bill and hold transactions to determine legal title to the product had transferred to the customer.

Fair value measurement of contingent consideration liability

As discussed in Notes 1 and 4 to the consolidated financial statements, on June 1, 2023, the Company acquired Penelope Bourbon LLC (Penelope) in a business combination for cash consideration of $104,638 thousand and contingent consideration of up to $110,800 thousand if the Penelope business achieves certain net sales targets between the acquisition date and December 31, 2025.

As of December 31, 2024, management estimated the fair value of the contingent consideration liability to be $85,300 thousand using a Monte Carlo simulation based on certain assumptions including projected net sales over the term of the earn-out period and volatility rate.

We identified the assessment of the fair value measurement of the contingent consideration liability as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate the projected net sales and volatility rate used in the Monte Carlo simulation.

Changes in these assumptions could have had a significant impact on the fair value of the contingent consideration liability.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s fair value measurement of the contingent consideration liability, including controls related to the projected net sales and volatility rate.

We performed sensitivity analyses over the projected net sales and volatility rate to assess the impact of changes in those assumptions on the fair value

of the contingent consideration liability.

We assessed the projected net sales by comparing them to Penelope’s actual results since the acquisition, management’s updated forecasts, and industry data.

We also involved valuation professionals with specialized skills and knowledge, who assisted us in evaluating the volatility rate used in the Monte Carlo simulation model by comparing it to comparable companies.

Valuation of Branded Spirits goodwill and indefinite-lived intangible assets

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company recorded goodwill and intangible assets, net of $115,667 thousand and $244,696 thousand, respectively as of December 31, 2025.

For the year ended December 31, 2024, the Company recorded goodwill impairment of $73,755 thousand to adjust the carrying amount of the Branded Spirits reporting unit to fair value.

For the year ended December 31, 2025, the Company recorded goodwill and indefinite-lived intangible asset impairment of $132,122 thousand and $20,500 thousand, respectively to adjust the carrying amount of the Branded Spirits reporting unit and indefinite-lived intangible assets to fair value.

The Company tests goodwill and indefinite-lived intangible assets for impairment at least annually, in the fourth quarter, and 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 carrying value.

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The estimated fair value used in the assessment of the Company’s indefinite-lived intangible assets was determined using the relief from royalty method.

These fair value estimates were based on certain assumptions made by the Company, including projected revenue and operating margins, and the respective discount rates and market royalty rates.

These fair value estimates were based on certain assumptions made by the Company, including projected revenue and gross margins, and the respective discount rates and market royalty rates.

We identified the evaluation of the fair value of the Branded Spirits reporting unit and indefinite-lived intangible assets within the Branded Spirits reporting unit as a critical audit matter.

Subjective and challenging auditor judgment was required to evaluate (1) the revenue growth rates, operating margins and discount rate assumptions used in the determination of the fair value of the Branded Spirits reporting unit, and (2) the revenue growth rates, royalty rates, and discount rates used in the determination of the fair value of certain indefinite-lived intangible assets.

A significant degree of auditor judgment was also required in evaluating the guideline public companies used in the market approach for the Branded Spirits reporting unit.

Subjective and challenging auditor judgment was required to evaluate (1) the revenue growth rates, gross margins and discount rate assumptions used in the determination of the fair value of the Branded Spirits reporting unit, and (2) the revenue growth rates, royalty rates, and discount rates used in the

determination of the fair value of certain indefinite-lived intangible assets.

Changes to these assumptions could have had a significant effect on the Company’s assessment of the carrying values of the goodwill assigned to the Branded Spirits reporting unit and the associated indefinite-lived intangible assets.

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We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

This included controls over the revenue growth rates, operating margins, discount rates and royalty rates used to measure the fair value of the Branded Spirits reporting unit and associated indefinite-lived intangible assets.

This included controls over the revenue growth rates, gross margins, discount rates and royalty rates used to measure the fair value of the Branded Spirits reporting unit and associated indefinite-lived intangible assets.

To assess the Company’s ability to forecast, we compared historical forecasts to actual results.

We performed sensitivity analyses over the revenue growth rates, operating margins, discount rates, and royalty rates to assess the impact of changes in these assumptions on the estimated fair values.

We evaluated the revenue growth rates and operating margin assumptions by comparing them to past and current performance of the Branded Spirits reporting unit and external industry data.

We performed sensitivity analyses over the revenue growth rates, gross margins, discount rates, and royalty rates to assess the impact of changes in these assumptions on the estimated fair values.

We evaluated the revenue growth rates and gross margin assumptions by comparing them to past and current performance of the Branded Spirits reporting unit and external industry data.

We involved professionals with specialized skills and knowledge, who assisted in:

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• evaluating the discount rates used by the Company by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate.

• comparing the guideline public companies used in the market approach to available internal and external data.

We have served as the Company’s auditor since 2008.

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MGP INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Dollars in thousands, except share and per share amounts)

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Impairment of long-lived assets and other — 137 19,391

Goodwill impairment

Goodwill and indefinite-lived intangible asset impairment

152,622 73,755 —

Change in fair value of contingent consideration 25,500 16,100 7,100

Operating income 74,426 148,613 148,965

Operating income (loss)

( 94,615 ) 74,426 148,613

Interest expense, net ( 7,044 ) ( 8,439 ) ( 6,647 )

Other income (expense), net 1,309 2,455 ( 220 )

Income before income taxes 68,442 141,746 140,172

Income (loss) before income taxes

( 100,350 ) 68,442 141,746

Income tax expense 7,482 33,977 34,616

Net income 34,465 107,130 108,872

Net income (loss)

( 107,832 ) 34,465 107,130

Net loss attributable to noncontrolling interest 23 198 345

Net income attributable to MGP Ingredients, Inc.

Net income (loss) attributable to MGP Ingredients, Inc.

( 107,809 ) 34,663 107,475

Income attributable to participating securities ( 373 ) ( 1,074 ) ( 871 )

Net income used in earnings per common share calculation $ 34,290 $ 106,401 $ 108,591

Income (loss) attributable to participating securities

1,295 ( 373 ) ( 1,074 )

Net income (loss) used in earnings per common share calculation

$ ( 106,514 ) $ 34,290 $ 106,401

Weighted average common shares

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MGP INGREDIENTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

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2025 2024 2023

Net income attributable to MGP Ingredients, Inc.

Net income (loss) attributable to MGP Ingredients, Inc.

$ ( 107,809 ) $ 34,663 $ 107,475

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on foreign currency translation adjustment 719 ( 188 ) 236

Changes in Company-sponsored post-employment benefit plan ( 434 ) ( 73 ) ( 329 )

Other comprehensive loss

Other comprehensive income (loss)

285 ( 261 ) ( 93 )

Comprehensive income attributable to MGP Ingredients, Inc.

Comprehensive income (loss) attributable to MGP Ingredients, Inc.

( 107,524 ) 34,402 107,382

Comprehensive loss attributable to noncontrolling interest ( 23 ) ( 198 ) ( 345 )

Comprehensive income $ 34,204 $ 107,037 $ 108,214

Comprehensive income (loss)

$ ( 107,547 ) $ 34,204 $ 107,037

See Accompanying Notes to Consolidated Financial Statements

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Accounts payable 54,589 66,336

Contingent consideration

Federal and state excise taxes payable 5,755 5,358

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stockholders’ equity

718,436 834,166

Noncontrolling interest ( 1,646 ) ( 1,623 )

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Cash Flows from Operating Activities

Net income $ 34,465 $ 107,130 $ 108,872

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 107,832 ) $ 34,465 $ 107,130

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 24,086 21,989 22,113

Impairment of long-lived assets and other — 137 19,391

Goodwill impairment 73,755 — —

Goodwill and indefinite-lived intangible asset impairment 152,622 73,755 —

Share-based compensation 4,704 4,016 10,635

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Purchase of business, net of cash acquired — — ( 103,712 )

Contributions to equity method investments — — ( 2,810 )

Other, net ( 37 ) ( 377 ) ( 263 )

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Repurchase of Common Stock ( 1,035 ) ( 48,773 ) ( 801 )

Loan fees paid related to borrowings ( 2,762 ) — —

Proceeds from long-term debt 28,000 125,000 105,000

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Other comprehensive loss — — — — ( 93 ) — — ( 93 )

Dividends and dividend equivalents of $ 0.48 per common share and per restricted stock unit, net of estimated forfeitures

Dividends declared (a)

— — — ( 10,653 ) — — — ( 10,653 )

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Other comprehensive loss — — — — ( 261 ) — — ( 261 )

Dividends and dividend equivalents of $ 0.48 per common share and per restricted stock unit, net of estimated forfeitures

Dividends declared (a)

— — — ( 10,617 ) — — — ( 10,617 )

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Comprehensive income (loss):

Net income (loss) — — — 34,663 — — ( 198 ) 34,465

Other comprehensive loss — — — — ( 261 ) — — ( 261 )

Dividends and dividend equivalents of $ 0.48 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 107,809 ) — — ( 23 ) ( 107,832 )

Other comprehensive income

— — — — 285 — — 285

Dividends declared (a)

— — — ( 10,384 ) — — — ( 10,384 )

Share-based compensation — — 3,213 — — — — 3,213

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$ 4 $ 6,715 $ 330,872 $ 445,736 $ ( 373 ) $ ( 64,518 ) $ ( 1,646 ) $ 716,790

(a) Dividends and dividend equivalents were $ 0.48 per common share, per restricted stock unit, and per performance stock unit for the years ended December 31, 2025, 2024, and 2023.

See Accompanying Notes to Consolidated Financial Statements

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(“MGP” or the “Company”) is a leading producer of branded and distilled spirits, as well as food ingredient solutions.

Distilled spirits include premium bourbon, rye, and other 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 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 has an extensive award-winning global 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.

The Company’s protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry.

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 predominantly 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:

Distilling Solutions, Branded Spirits, and Ingredient Solutions.

Branded Spirits, Distilling Solutions, and Ingredient Solutions.

Principles of Consolidation.

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All significant intercompany balances and transactions have been eliminated in consolidation.

Certain amounts in the 2022 and 2023 consolidated financial statements have been reclassified to conform to the 2024 presentation.

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 the net loss attributable to noncontrolling interest line in the Consolidated Statements of Income (Loss).

Use of Estimates.

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Maintenance costs are expensed as incurred.

The cost of property, plant, and equipment sold, retired, or otherwise disposed of, as well as related accumulated depreciation and amortization, are eliminated from the property accounts with related gains and losses reflected in the Consolidated Statements of Income.

The Company capitalizes interest costs associated with significant construction projects.

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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 that 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.

This is a faithful depiction of the satisfaction of the performance obligation because, at that point control passes to the customer, the customer has legal title and the risks 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 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 the following bill and hold criteria have been met in order for control to be transferred to the customer:

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 risks and rewards of ownership have transferred to the customer.

Additionally, all of the following bill and hold criteria have been 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 service revenue is recognized over the time that warehouse services are rendered and as they are rendered.

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.

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The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau

Treasury Department (the “TTB”) regulations which includes making timely and accurate excise tax payments.

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.

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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 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 the Company’s common stock, no par value (“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 the Convertible Senior Notes, except for where the result would be anti-dilutive as of the balance sheet date.

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.

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 consolidated balance sheet date.

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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 other indefinite-lived intangible assets to its respective reporting units.

All goodwill and indefinite-lived intangible assets included in the Consolidated Balance Sheet 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.

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 Consolidated Balance Sheets are related to the Branded Spirits reporting unit.

The Company evaluates goodwill and indefinite-lived intangible assets 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.

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The carrying value of the short-term financial instruments approximates the fair value due to their short-term nature.

These financial instruments have no stated maturities or the financial instruments have short-term maturities that approximate market.

These financial instruments have no stated maturities or 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 $ 195,527 and $ 249,672 at December 31, 2025 and 2024, respectively.

The financial statement carrying value (net of unamortized loan fees) was $ 323,541 and $ 287,249 at December 31, 2024 and 2023, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 252,318 and $ 323,541 at December 31, 2025 and 2024, respectively.

These fair values are considered Level 2 under the fair value hierarchy.

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The Company holds 50 percent interest in DGL Destiladores, S.de R.L.

(“DGL”) and Agricola LG, S.de R.L.

(“DGL”) and Agricola LG, S.

(“Agricola” and together with DGL, “LMX”), which are accounted for as equity method investments.

At December 31, 2025 and 2024, the investment in LMX was $ 8,211 and $ 7,024 , respectively, which is recorded in investment in joint ventures on the Consolidated Balance Sheets.

During the years ended December 31, 2024 and 2023, the Company recorded a gain of $ 1,827 and a loss of $ 337 from equity method investments, respectively, which is recorded in other income (expense), net on the Consolidated Statements of Income.

During the years ended December 31, 2025 and 2024, the Company recorded income of $ 1,187 and $ 1,827 , respectively, from equity method investments, which is recorded in other income (expense), net on the Consolidated Statements of Income (Loss).

Recently Adopted Accounting Standard Updates.

ASU 2023-07, Improvements to Reportable Segment Disclosures , which requires companies to disclose significant segment expenses provided to the chief operating decision maker (“CODM”) and a description of other segment items.

Additionally, all existing annual disclosures must be provided on an interim basis.

This ASU is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

This ASU is required to be applied retrospectively to all prior periods presented in the consolidated financial statements.

The Company adopted ASU 2023-07 in 2024 and applied the amendment retrospectively to all periods presented in the Company’s consolidated financial statements.

See Note 14, Operating Segments, for more information.

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 U.S.

statutory federal income tax rate applied to pre-tax income from continuing operations.

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 consolidated financial statements.

The Company is currently evaluating the impact to the Company’s consolidated financial statements.

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.

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 adopted this ASU during the period on a prospective basis.

The ASU only required additional disclosures and did not impact the amount of tax reflected in the tax provision.

See Note 8, Income Taxes, for more information.

Recently Issued Accounting Pronouncements.

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.

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The Company is currently evaluating the impact of this ASU to the Company’s consolidated financial statements, however the Company does not anticipate this guidance having a material impact to the 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.

ASU 2025-11, Narrow-Scope Improvement (Topic 270 - Interim Reporting), clarifies the current interim reporting requirements and the form and content of the interim reporting requirements, and, includes a disclosure principle that requires companies to

disclose material events since the end of the last annual reporting period This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU to its consolidated financial statements.

The other recent accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) are not expected to have a significant impact on the Company’s consolidated financial statements and related disclosures.

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Total $ 22,507 $ 14,356

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 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 are 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 service).

Contracts with customers include a single performance obligation (either the sale of products or the provision of warehouse services and contract bottling services).

Disaggregation of Sales.

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2025 2024 2023

Distilling Solutions

Brown goods $ 265,873 $ 289,191 $ 229,523

Warehouse services 33,430 28,632 23,598

White goods and other co-products 32,901 133,031 175,357

Total Distilling Solutions 332,204 450,854 428,478

Branded Spirits

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Total Branded Spirits 232,941 240,816 253,933

Distilling Solutions

Brown goods 128,450 265,873 289,191

Warehouse services 32,388 33,430 28,632

White goods and other co-products 20,562 32,901 133,031

Total Distilling Solutions 181,400 332,204 450,854

Ingredient Solutions

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Commodity wheat protein 3,109 481 982

Biofuel and other 515 — —

Total Ingredient Solutions 122,034 130,605 131,736

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income tax purposes.

Purchase Price Allocation.

The Acquisition was accounted for as a business combination in accordance with FASB Accounting Standard Codification 805, Business Combinations (“ASC 805”), and as such, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the acquisition date.

The following table summarizes the allocation of the consideration paid for Penelope to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date, with the excess recorded to goodwill.

Consideration:

Cash $ 104,638

Contingent Consideration.

Fair value of total consideration transferred $ 166,738

Recognized amounts of identifiable assets acquired and liabilities assumed:

Receivables 2,323

Inventory 12,454

Prepaid expenses and other assets 77

Property, plant and equipment, net 253

Intangible assets (a)

Operating lease right-of-use assets, net 426

Other assets 44

Total assets 74,203

Accounts payable 2,242

Accrued expenses and other 205

Long-term operating lease liabilities 268

Total liabilities 2,715

Goodwill 95,250

Total $ 166,738

(a) Intangible assets acquired included trade names with an estimated fair value of $ 34,000 and distributor relationships with an estimated fair value of $ 23,700 .

In accordance with ASC 805, assets acquired, liabilities assumed, and consideration transferred were recorded at their estimated fair values on the Acquisition date.

The fair value measurements of tangible and intangible assets and liabilities were based on significant inputs not observable in the market and represent Level 3 measurements within the fair value hierarchy.

Level 3 inputs include discount rates that would be used by a market participant in valuing these assets and liabilities, projections of revenues and cash flows, distributor attrition rates, royalty rates, and market comparables, among others.

The fair value of work-in-process and finished goods inventory was determined using the comparative sales method and raw materials was determined using the replacement cost method.

Goodwill of $ 95,250 , all of which is expected to be deductible for tax purposes, represents the excess of the consideration transferred over the estimated fair value of assets acquired net of liabilities assumed.

Additionally, the goodwill is representative of the strength of the Penelope brand within the American whiskey category, and the synergies expected to be achieved by the combined company.

The intangible assets acquired included indefinite-lived intangible assets, trade names, which have an estimated fair value of $ 34,000 , and definite-lived intangible assets, distributor relationships, which have an estimated fair value of $ 23,700 and a useful life of 20 years.

The trade names and distributor relationships acquired by the Company have been recorded at estimated fair values using the relief from royalty method and multi-period excess earnings method, respectively.

Management engaged a third-party valuation specialist to assist in the valuation analysis of certain acquired assets including trade names and distributor relationships.

The operating results of Penelope have been included in the Company’s consolidated financial statements since the date of the Acquisition, June 1, 2023.

The operating results and pro forma results are not disclosed due to the immaterial impact to the Company’s Consolidated Statements of Income.

During the years ended December 31, 2024 and 2023, the Company incurred $ 116 and $ 2,060 , respectively, of costs related to the Acquisition, which are included in selling, general, and administrative expenses on the Consolidated Statements of Income.

Contingent Consideration.

The estimated fair value of the contingent consideration obligation at the Acquisition date was $ 62,100 , which was determined using a Monte Carlo simulation approach.

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The changes in fair value of the obligation resulted from changes in the key assumptions between measurement dates, such as projected net sales, discount rates, and volatility rates.

During the years ended December 31, 2024 and 2023, there was a $ 16,100 and $ 7,100 adjustment, respectively, to the fair value measurement of the contingent consideration obligation, which was included in the change in fair value of contingent consideration on the Consolidated Statements of Income.

During the years ended December 31, 2025, 2024 and 2023, there was a $ 25,500 , $ 16,100 and $ 7,100 adjustment, respectively, to the fair value measurement of the contingent consideration obligation, which was included in the change in fair value of contingent consideration on the Consolidated Statements of Income (Loss).

The amount payable is based upon achievement of certain net sales targets between the Acquisition date and December 31, 2025.

The possible payments range from zero to a maximum payout of $ 110,800 .

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.

GOODWILL AND OTHER INTANGIBLE ASSETS

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The distributor relationships have a useful life of 20 years.

The amortization expense for the years ended December 31, 2024 and 2023 was $ 3,255 and $ 2,761 , respectively.

The amortization expense for each of the years ended December 31, 2025 and 2024 was $ 3,255 .

The weighted average remaining amortization period at December 31, 2025 for definite-lived intangible assets is 16.1 years.

As of December 31, 2024, the expected future amortization expense related to definite-lived intangibles assets are as follows:

As of December 31, 2025, the expected future amortization expense related to definite-lived intangible assets are as follows:

Thereafter 35,931

Total $ 52,206

The Company records goodwill in connection with various acquisitions of businesses and allocates the goodwill to its respective reporting units.

The Company tests 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 amount exceeds fair value, an impairment of goodwill is recognized and allocated to the reporting units.

During the fourth quarter, the Company experienced a decrease in stock price and market capitalization as well as experienced the effects of the softening alcohol industry which contributed to declines in current year consolidated results and forecasted outlook.

Based on these factors, the Company performed a quantitative assessment of goodwill.

Changes in carrying amount of goodwill by business segment were as follows:

Distilling Solutions Branded Spirits Ingredient Solutions Total

Balance at December 31, 2023 (a)

$ — $ 321,544 $ — $ 321,544

Impairment — ( 73,755 ) — ( 73,755 )

Balance at December 31, 2024

— 247,789 — 247,789

Impairment — ( 132,122 ) — ( 132,122 )

Balance at December 31, 2025

$ — $ 115,667 $ — $ 115,667

(a) There were no accumulated impairment losses recorded at December 31, 2023.

2025 Impairment Analysis.

As part of its annual impairment testing, the Company performed a quantitative assessment of Goodwill.

The Company engaged a third party valuation specialist to assist in comparing the fair value of the Branded Spirits reporting unit to the respective carrying value.

The estimate of fair value of the Company’s reporting unit was calculated using equal weighting of the income approach that utilized the discounted cash flow method and the market approach that utilized the guideline public company method.

Estimates in the determination of fair value of the reporting unit through the income approach were based on (i) discount rates based on the reporting unit’s weighed average cost of capital, (ii) future expected cash flows including revenue and operating margin projections, and (iii) long-term growth rates based on inflation forecasts, industry growth, and long-term economic growth potential.

Estimates in the determination of fair value of the reporting unit through the income approach were based on (i) discount rates based on the reporting unit’s weighted average cost of capital, (ii) future expected cash flows including revenue and operating margin projections, and (iii) long-term growth rates based on inflation forecasts, industry growth, and long-term economic growth potential.

The market approach compares enterprise values and historical and projected results of public companies that reflect economic conditions and risks that are similar to the reporting unit to calculate an estimated enterprise value.

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These assumptions reflect the Company’s estimates of future economic and competitive conditions which can be affected by several factors such as inflation, business valuations in the market, the economy, and market competition.

Any changes in these assumptions may affect the Company’s fair value estimate and the results of an impairment test.

Any changes in these assumptions may

affect the Company’s fair value estimate and the results of an impairment test.

Based on the results of the Company’s 2025 impairment analysis, the Company recorded an impairment charge of $ 132,122 to adjust the carrying amount of the Branded Spirits reporting unit to fair value.

This goodwill impairment is included as a component of operating income in the Consolidated Statement of Income for the year ended December 31, 2024 and as a reduction of goodwill in the Consolidated Balance sheet as of December 31, 2024.

Changes in carrying amount of goodwill by business segment were as follows:

This goodwill impairment is included as a component of operating income in the Consolidated Statements of Income (Loss) for the year ended December 31, 2025 and as a reduction of goodwill in the Consolidated Balance Sheets as of December 31, 2025.

2024 Impairment Analysis.

During the fourth quarter 2024, the Company experienced a decrease in stock price and market capitalization as well as experienced the effects of the softening alcohol industry which contributed to declines in current year consolidated results and forecasted outlook.

Based on these factors, the Company performed a quantitative assessment of goodwill.

The Company engaged a third party valuation specialist to assist in comparing the fair value of the Branded Spirits reporting unit to the respective carrying value.

The estimates and assumptions used in the 2024 impairment analysis are the same as the 2025 impairment analysis.

Based on the results of the Company’s 2024 impairment analysis, the Company recorded an impairment charge of $ 73,755 to adjust the carrying amount of the Branded Spirits reporting unit to fair value.

This goodwill impairment is included as a component of operating income in the Consolidated Statements of Income (Loss) for the year ended December 31, 2024 and as a reduction of goodwill in the Consolidated Balance Sheets as of December 31, 2024.

Indefinite-Lived Intangible Assets.

Changes in carrying amount of trade name indefinite-lived intangible asset by business segment were as follows:

Distilling Solutions Branded Spirits Ingredient Solutions Total

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$ — $ 212,990 $ — $ 212,990

Acquisitions — 95,250 — 95,250

Balance at December 31, 2024 (a)

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$ — $ 192,490 $ — $ 192,490

(a) There was no accumulated impairment losses recorded at December 31, 2023 and 2022.

Indefinite-Lived Intangible Assets.

The Company records indefinite-lived intangible assets in connection with various acquisitions of businesses and allocates the indefinite-lived intangible assets to its respective reporting units.

During the fourth quarter 2024, in connection with the assessment of the same events and circumstances impacting the Branded Spirit reporting unit, the Company performed a quantitative impairment test of its indefinite-lived assets.

(a) There were no accumulated impairment losses recorded at December 31, 2023 and 2024.

2025 Impairment Analysis.

As part of the annual impairment testing, the Company performed a quantitative assessment of trade name indefinite-lived intangible assets.

The Company values its indefinite-lived intangible assets under the income approach using a relief-from-royalty method, which assumes the value of the asset is the sum of the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed it from another company.

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These assumptions reflect the Company’s estimates of future economic and competitive conditions which consider many factors including macroeconomic conditions, industry growth rates, and competition.

Any changes in these assumptions may affect the Company’s fair value estimate and the results of an impairment test.

The most sensitive assumption used in the analysis was an 11 percent discount rate.

Based on the results of the Company’s 2025 impairment analysis, the Company recorded an impairment charge of $ 20,500 to adjust the carrying amount of the trade name indefinite-lived intangible assets to fair value.

The impairment is included as a component of operating income in the Consolidated Statements of Income (Loss) for the year ended December 31, 2025 and as a reduction of intangible assets in the Consolidated Balance Sheets as of December 31, 2025.

The impairment charge to the trade name indefinite-lived intangible assets were most impacted by declines in the mid and value price tiers within the Branded Spirits segment.

As of December 31, 2025, after the impairment was recorded, the fair values of the Company’s indefinite-lived intangible assets were equal to or exceeded the respective carrying values by a range of 0 percent to 30 percent.

2024 Impairment Analysis.

During the fourth quarter 2024, in connection with the assessment of the same events and circumstances impacting the Branded Spirits reporting unit, the Company performed a quantitative impairment test of its indefinite-lived assets.

When estimating the fair value, the Company made certain assumptions for its future revenue projections, market royalty rates, and discount rates.

These factors are subject to change as a result of changing market conditions.

The most sensitive assumption used in the analysis was a 10 percent discount rate.

The results of the assessment that the estimated fair values for the indefinite-lived intangible assets exceed its carrying value and no impairment loss was recognized for indefinite-lived intangible assets.

The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirit segment, was $ 212,990 at both December 31, 2024 and 2023.

The results of the 2024 assessment were that the estimated fair values for the indefinite-lived intangible assets exceeded its carrying values and no impairment loss was recognized for indefinite-lived intangible assets.

The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $ 212,990 at December 31, 2024.

As of December 31, 2024, the fair value of the Company’s indefinite-lived trade names exceeded the respective carrying values by a range of 10 percent to 20 percent.

While the indefinite-lived trade names were not determined to be impaired, if these brands do not perform as projected or if market factors utilized in the impairment analysis deteriorate, including unfavorable changes in the weighted average cost of capital, these changes could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

CLOSURE OF THE ATCHISON FACILITY

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The fair value of the assets associated with the Atchison Distillery were determined using a combination of the cost and market approach.

During the year ended December 31, 2023, the Company recorded a $ 17,112 impairment of assets, which was recorded in impairment of long-lived assets and other on the Consolidated Statement of Income.

The impaired assets were recorded within the Distilling Solution segment.

Additionally, for the years ended December 31, 2024 and 2023, the Company recorded $ 137 and $ 2,279 , respectively, of expenses related to severance costs, inventory write offs, contract termination fees, consulting fees, and other miscellaneous expenses, which were recorded in impairment of long-lived assets and other on the Consolidated Statement of Income.

During the year ended December 31, 2023, the Company recorded a $ 17,112 impairment of assets, which was recorded in impairment of long-lived assets and other on the Consolidated Statements of Income (Loss).

The impaired assets were recorded within the Distilling Solutions segment.

CORPORATE BORROWINGS

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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.

On May 14, 2021, the Company amended the Credit Agreement to extend the term and to increase the principal amount available to $ 400,000 and to permit the Company, subject to obtaining lender approval, to increase the amount of the revolving credit facility by up to an additional $ 100,000 provided certain conditions are satisfied and at the discretion of the lender.

On August 31, 2022, the Credit Agreement was amended to change the interest rate benchmark from LIBOR to SOFR.

The Credit Agreement matures on 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 Credit Agreement is secured by substantially all assets, excluding real property.

The Credit Agreement includes certain requirements and covenants, with which the Company was in compliance at December 31, 2025.

The Company incurred no new loan fees related to the Credit Agreement during 2024.

The Company incurred $ 2,762 of new loan fees related to the A&R Credit Agreement during 2025.

The unamortized balance of total loan fees related to the Credit Agreement was $ 2,633 at December 31, 2025.

The unamortized loan fees are being amortized over the life of the Credit Agreement.

Part of the cash portion of the consideration paid to acquire Penelope and transaction-related expenses were financed with $ 105,000 borrowings under the Credit Agreement during 2023.

As of December 31, 2025, the Company had $ 42,000 outstanding borrowings under the Credit Agreement, leaving $ 458,000 available.

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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 .

Additionally, the period for issuing senior secured promissory notes under the Note Purchase Agreement was extended from August 23, 2023 to August 31, 2026.

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.

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The Senior Secured Notes bear interest at a rate of 3.80 percent per year.

As of December 31, 2024, the Company had $ 8,800 of Series A Senior Secured Notes and $ 14,400 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 226,800 available of under the Note Purchase Agreement.

As of December 31, 2025, the Company had $ 5,600 of Series A Senior Secured Notes and $ 11,200 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 233,200 available under the Note Purchase Agreement.

The Company did not capitalize any new loan fees related to the Note Purchase Agreement during 2025.

The unamortized

balance of total loan fees related to the Note Purchase Agreement was $ 52 at December 31, 2024 and is being amortized over the life of the Note Purchase Agreement.

The unamortized balance of total loan fees related to the Note Purchase Agreement was $ 32 at December 31, 2025 and is being amortized over the life of the Note Purchase Agreement.

The Note Purchase Agreement is secured by substantially all assets, excluding real property.

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Prior to the Maturity Date, holders may convert at their option only in the following circumstances:

• During any calendar quarter commencing after the quarter ending March 31, 2022, if the closing sale price of Common Stock for at least 20 trading days in the period of 30 consecutive trading days is more than 130 % of the conversion price;

• during the five consecutive business days following any ten consecutive trading day period in which the trading price per $1 principal amount of the notes for each trading day was less than 98 % of the product of the closing sale price of Common Stock on such trading day and the conversion rate on such trading day;

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Total $ 260,050

Income (loss) before income taxes for the year ended December 31, 2025 was a loss of $ 100,350 , of which $ 2,376 relates to foreign income before income taxes and $ 102,726 relates to domestic loss before income taxes.

Income tax expense is composed of the following:

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Total $ 7,482 $ 33,977 $ 34,616

Income tax expense also included tax expense allocated to comprehensive income for 2024, 2023, and 2022 of $ 16 , $ 172 , and $ 33 , respectively (see the Consolidated Statements of Comprehensive Income).

A reconciliation of income tax expense at the normal statutory federal rate to income tax expense included in the accompanying Consolidated Statements of Income is below:

Income tax expense also included tax expense allocated to comprehensive income for 2025, 2024, and 2023 of $ 15 , $ 16 , and $ 172 , respectively (see the Consolidated Statements of Comprehensive Income (Loss)).

A reconciliation of income tax expense and effective tax rate at the normal statutory federal rate to income tax expense and effective tax rate included in the accompanying Consolidated Statements of Income (Loss) for 2025 is as follows:

Year Ended December 31, 2025

2024 2023 2022

Amount Percent

“Expected” provision at federal statutory rate $ ( 21,074 ) 21.0 %

State and local income taxes, net of federal income tax effect (a)

Foreign tax effects

Tax credits ( 592 ) 0.6

Nontaxable or nondeductible items

Nondeductible goodwill impairment 27,745 ( 27.7 )

Share-based compensation 957 ( 1.0 )

Other Nontaxable or nondeductible items

Changes in unrecognized tax benefits ( 11 ) —

Other adjustments ( 162 ) 0.2

Effective tax rate $ 7,482 ( 7.5 ) %

(a) State taxes in Indiana, Kansas, and Texas comprise the majority of this category.

A reconciliation of income tax expense at the normal statutory federal rate to income tax expense included in the accompanying Consolidated Statements of Income (Loss) for 2024 and 2023 is as follows:

Year Ended December 31,

“Expected” provision at federal statutory rate $ 14,373 $ 29,895

State income taxes, net 5,865 6,545

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Balance at December 31, 2023

Increase 1,135

Decrease ( 965 )

Balance at December 31, 2024

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As of December 31, 2025, the Company’s total valuation allowance of $ 418 , related to net operating loss in U.S.

states and foreign countries in which it is not “more likely than not” to create enough taxable income to fully utilize the carryforwards before expiration of the carryforward periods and certain foreign tax credit carryforwards.

states in which it is not “more likely than not” to create enough taxable income to fully utilize the carryforwards before expiration of the carryforward periods and certain foreign tax credit carryforwards.

As of December 31, 2024, the Company’s total valuation allowance of $ 2,243 , related to net operating loss in U.S.

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The Company reasonably expects that the amount of unrecognized tax benefit will not change significantly over the next 12 months.

Income taxes paid for the year ended December 31, 2025 is composed of the following:

Year Ended December 31,

Total income tax paid $ 10,659

Income taxes paid to the state of Indiana was $ 1,025 , which was the only individual jurisdiction that exceeded 5 percent of total income taxes paid, net of refunds.

Foreign income taxes paid did not exceed 5% of total income taxes paid, net of refunds.

The Company is not under any U.S.

federal, state or foreign income tax audits.

federal tax purpose, all tax years after 2020 remain open to examination.

federal tax purposes, all tax years after 2021 remain open to examination.

Amounts paid for income tax in foreign jurisdictions are not material to the consolidated financial statements.

In addition, the Company is subject to examination for its state tax returns for years 2021, and forward, with the exception of certain net operating losses and credit carryforwards originating in years prior to 2021 that remain subject to adjustment.

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 year ended December 31, 2025, resulting in a cash tax benefit to the Company.

The OB3 Act had an immaterial impact to the Company’s effective tax rate for the year ended December 31, 2025.

EQUITY AND EPS

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2025 2024 2023

Net income (a)

Net income (loss) (a)

$ ( 107,832 ) $ 34,465 $ 107,130

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1,295 ( 373 ) ( 1,074 )

Net income used in EPS calculation $ 34,290 $ 106,401 $ 108,591

Net income (loss) used in EPS calculation

$ ( 106,514 ) $ 34,290 $ 106,401

Share information:

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Diluted EPS $ ( 4.99 ) $ 1.56 $ 4.80

(a) Net income attributable to all stockholders.

(a) Net income (loss) attributable to all stockholders.

(b) Participating securities included 266,079 , 243,007 , and 226,410 unvested restricted stock units (“RSUs”) for the years ended December 31, 2025, 2024, and 2023, respectively.

(c) Under the two class method, basic weighted average common shares exclude outstanding unvested participating securities.

(d) The impacts of the Convertible Senior Notes were included in the diluted weighted average common shares if the inclusion was dilutive.

(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 year end exceeds the conversion price of $ 96.24 per share.

There was no dilutive impact for the year ended December 31, 2024.

There was no dilutive impact for the years ended December 31, 2025 and 2024.

Share Repurchase.

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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 year ended December 31, 2024, the Company repurchased 886,936 shares of Common Stock for approximately $ 46,588 .

During the year ended December 31, 2025, the Company did not repurchase any shares of Common Stock.

During the year ended December 31, 2024, the Company repurchased 886,936 shares of Common Stock for $ 46,588 .

As of December 31, 2025, there were approximately $ 53,412 remaining under the share repurchase program.

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Issuance of Common Stock — 91,051

Repurchase of Common Stock — ( 8,436 )

Repurchase of Common Stock (a)

— ( 912,457 )

Balance at December 31, 2024

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Issuance of Common Stock — 131,239

Repurchase of Common Stock (a)

— ( 912,457 )

Repurchase of Common Stock — ( 31,631 )

Balance at December 31, 2025

437 21,294,315

(a) 886,936 shares were repurchased during the year end December 31, 2024, pursuant to the Company’s share repurchase program.

(a) 886,936 shares were repurchased during the year ended December 31, 2024, pursuant to the Company’s share repurchase program.

The remaining shares repurchased were related to the tax withholding on equity-based compensation.

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May 1 May 16 May 30 0.12 0.12 2,553 25 2,578

August 1 August 16 August 30 0.12 0.12 2,639 30 2,669

July 31 August 15 August 29 0.12 0.12 2,555 28 2,583

October 29 November 14 November 28 0.12 0.12 2,555 31 2,586

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February 22 March 15 March 29 $ 0.12 $ 0.12 $ 2,641 $ 31 $ 2,672

May 4 May 19 June 2 0.12 0.12 2,641 27 2,668

August 3 August 18 September 1 0.12 0.12 2,642 27 2,669

November 2 November 17 December 1 0.12 0.12 2,642 27 2,669

May 2 May 17 May 31 0.12 0.12 2,642 30 2,672

August 1 August 16 August 30 0.12 0.12 2,639 30 2,669

October 31 November 15 November 29 0.12 0.12 2,588 29 2,617

$ 0.48 $ 0.48 $ 10,510 $ 120 $ 10,630

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Lease components are accounted for separately from non-lease components, such as common-area maintenance, based on the relative, observable stand-alone prices of the components.

The Company’s leases have remaining lease terms of less than one year to nine years , some of which may include options to extend the lease.

The Company’s leases have remaining lease terms of less than one year to ten years , some of which may include options to extend the lease.

Options to renew the Company’s leases were not considered when assessing the value of the right-of-use assets because the Company is not reasonably certain that it will assert the options to renew the leases.

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Operating Operating lease right-of-use assets, net

$ 13,847 $ 15,540

Total leased assets

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$ 5,263 $ 4,006

(a) Recorded as a component of operating income on the Company’s Consolidated Statements of Income.

(a) Recorded as a component of operating income on the Company’s Consolidated Statements of Income (Loss).

The following table presents supplemental cash flow and non-cash activity related to lease information:

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COMMITMENTS AND CONTINGENCIES

The Company is in the process of completing several projects that have been financed using industrial revenue bonds in the state of Kentucky.

The Company has completed several projects that were financed using industrial revenue bonds in the state of Kentucky.

Traditionally, industrial revenue bonds have been used as an economic development tool in the state to attract desirable businesses, including business in the bourbon industry, and have allowed a 15 to 40 year real property tax abatement on the Company’s renovated and newly-constructed warehouse buildings and distilleries in Kentucky.

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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 Interim Chief Executive Officer and Chief Financial Officer (the “Operating Engineers Action”).

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.

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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.

Motions have been filed to consolidate the actions together with Lead Plaintiff applications.

The Company believes there are substantial defenses to the claims asserted and intends to defend the lawsuits vigorously.

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 Interim Chief Executive Officer and Chief Financial Officer, and the members of its Board of Directors.

The Company is a “Nominal Defendant” in the lawsuit, which reflects the fact that the lawsuit is maintained by the named plaintiff on behalf of the Company and that the plaintiff seeks damages on the Company’s behalf.

The complaint alleges, 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 actions.

It also alleges breaches of fiduciary duties by failing to maintain internal controls, seeking shareholder approval of an equity incentive plan, and causing the Company to repurchase its own stock at artificially inflated prices.

The complaint brings additional claims for unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets and seeks indemnity and contribution from the named current and former officers.

The Company believes there are substantial defenses to the claims asserted and intends to defend the lawsuit vigorously.

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 “Kruitwagen 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 the Kruitwagen Action, 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.

EMPLOYEE BENEFIT PLANS

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Share-Based Compensation Plans.

As of December 31, 2024, the Company was authorized to issue 40,000,000 shares of Common Stock and had a treasury share balance of 1,930,459 at December 31, 2024.

The Company had two active share-based compensation plans, the 2014 Equity Incentive Plan as amended (the “2014 Plan”) and the 2014 Non-Employee Director Equity Incentive Plan (the “Directors’ Plan”), both of which expired in April 2024.

At the Company’s annual meeting in May 2024, the stockholders of the Company approved a new equity-based compensation plan, the 2024 Equity Incentive Plan (the “2024 Plan”), which initially authorized 1,319,320 shares for issuance, subject to the adjustment and add-back provision of the 2024 Plan.

Similar to prior plans, the 2024 Plan provides for the awarding of stock options, stock appreciation rights, shares of restricted stock, RSUs and other stock-based awards for executive officers and other employees, as well as for non-employee directors and certain consultants and advisors.

The 2024 Plan provides that vesting occurs pursuant to the time period specified in the particular award agreement approved for that issuance of RSUs.

As of December 31, 2024, 1,323,614 shares remain available for issuance under the 2024 Plan.

Compensation expense related to RSU awards is based on the market price of the stock on the date the Board of Directors communicates the approved award and is amortized over the vesting period of the restricted stock award.

The Consolidated Statements of Income for 2024, 2023, and 2022 reflect total share-based compensation costs and director fees for awarded grants of $ 4,016 , $ 5,425 , and $ 3,487 , respectively, related to these plans.

For long-term incentive awards to be granted in the form of RSUs in 2025 based on 2024 results, the Human Resources and Compensation Committee (“HRCC”) of the Company’s Board of Directors determined that the grants would have performance conditions that would be based on the same performance metrics as the Short-Term Incentive Plan (the “STI Plan”).

The performance metrics are adjusted operating income, adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and adjusted EPS.

Because the 2024 performance metrics were not met, there was no amortization of the estimated dollar pool of RSUs to be awarded based on 2024 results, as such there was no share-based compensation costs for grants to be awarded on the Consolidated Statement of Income for the year ended December 31, 2024.

The Consolidated Statements of Income for 2023 and 2022 reflect share-based compensation costs for grants to be awarded of $ 5,187 , and $ 2,018 , respectively.

The Company has one equity-based compensation plan, the 2024 Equity Incentive Plan (the “2024 Plan”), which was approved by the stockholders of the Company in May 2024.

The 2024 Plan initially 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 December 31, 2025, 907,717 shares remain available for issuance under the 2024 Plan, with PSUs counted at the target level established on the award’s grant date.

The Consolidated Statements of Income (Loss) for 2025, 2024, and 2023 reflect total share-based compensation costs and director fees for awarded grants of $ 4,704 , $ 4,016 , and $ 5,425 , respectively, related to these 2024 Plans and predecessor equity compensation plans.

Compensation expense related to share-based compensation arrangements is based on the market price of the stock on the date the Board of Directors communicates the approved award and is amortized over the vesting period of the restricted stock award.

Stock Options .

Nonqualified stock options are granted with an exercise price equal to the closing price per share of the Company’s Common Stock on the grant date.

Nonqualified stock options generally vest and become exercisable two years from the grant date, and expire ten years following the grant date.

The fair value of each stock option award is estimated using a Black-Scholes-Merton model and is expensed on a straight line basis over the vesting period, which is generally two years .

The following table presents the weighted average fair value of stock options granted and the weighted average assumptions used in the Black-Scholes-Merton model for stock options granted in 2025:

Year Ended December 31,

Grant-date fair value $ 11.97

Expected term (1)

Expected volatility (2)

Risk-free interest rate (3)

Expected dividend yield (4)

(1) The expected term equals the average of the vesting period and the contractual life.

(2) The expected volatility is based on the historical volatility levels of the Company’s Common Stock.

(3) The risk free interest rate for the period matching the expected term of the stock options is based on the U.S.

Treasury yield curve for constant maturities.

(4) The dividend yield is the calculated yield on the closing market price per share of the Company’s Common Stock on the grant date.

The following table presents stock option activity during 2025:

Number of Options Weighted Average Exercise Price

Outstanding as of January 1, 2025 — $ —

Granted 138,310 28.54

Outstanding as of December 31, 2025 138,310 $ 28.54

Exercisable as of December 31, 2025 —

As of December 31, 2025, the weighted average remaining contractual life for the outstanding stock options was 1.6 years.

Restricted Stock Units .

RSU awards are based on service and generally vest over a three year period from the date of the grant.

The following table presents the summary of unvested RSUs under the Company’s share-based compensation plans for 2025, 2024, and 2023:

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These costs are expected to be recognized over a weighted average period of approximately 1.6 years.

Upon their vesting, the Company purchased restricted stock and RSUs from employees to cover associated withholding taxes.

Upon their vesting, the Company purchased RSUs from employees to cover associated withholding taxes.

Total treasury stock purchases added 31,631 shares for $ 1,035 in 2025;

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and 8,437 shares for $ 801 in 2023.

Performance Stock Units.

PSU awards are based on service and the satisfaction of certain performance metrics.

The performance metrics for PSUs granted in 2025 are adjusted operating income, adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”), and adjusted basic EPS for 2025.

The PSUs generally have a vesting period of

three years and the actual number of shares to be awarded upon vesting can range between 0 percent to 200 percent of the target award, based upon the achievement of the performance metrics.

The following table presents the summary of unvested PSUs under the Company’s share-based compensation plans for 2025:

Year Ended December 31,

Units Weighted Average

Unvested balance at beginning of year — $ —

Granted 149,308 29.98

Forfeited ( 5,840 ) 31.43

Unvested balance at end of year 143,468 $ 29.92

As of December 31, 2025, there was $ 3,100 of total estimated unrecognized compensation costs (net of estimated forfeitures) related to granted PSU awards.

These costs are expected to be recognized over a weighted average period of approximately 2.4 years.

Annual Cash Incentive Plan.

Pursuant to the STI Plan, short-term incentive compensation is dependent on the achievement of certain performance metrics, which are established by the HRCC.

The degree of achievement of each financial performance metric for each plan year is calculated in accordance with the STI Plan.

These calculations are approved by the HRCC, which may adjust results to eliminate unusual items.

Pursuant to the Company’s Short-Term Incentive Plan (the “STI Plan”), short-term incentive compensation is dependent on the achievement of certain performance metrics.

The degree of achievement of each financial performance metric for each plan year is calculated in accordance with the STI Plan, which allows for adjustments to eliminate unusual items.

For 2025, 2024, and 2023, the financial performance metrics were adjusted operating income, adjusted EBITDA, and adjusted EPS.

The HRCC also approves the amount of short-term incentive compensation paid for the plan year to officers and employees eligible to participate under the STI Plan.

Additionally, certain employees within the Branded Spirits segment participate in incentive plans that are based on performance metrics, including the number of depleted cases and gross profit.

Amounts expensed under the STI Plan totaled $ 13,443 , and $ 13,370 for 2023, and 2022, respectively.

A mounts expensed under the STI Plan totaled $ 8,750 and $ 13,443 for 2025 and 2023, respectively.

There were no amounts expensed under the STI Plan for 2024.

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The Company’s obligations under this plan will change in conjunction with the performance of the participants’ investments, along with contributions to and withdrawals from the plan.

Realized and unrealized gains (losses) on the EDC plan investments were insignificant and were included as a component of operating income in the Company’s Consolidated Statements of Income, because the Company’s deferred compensation investments consist of mutual funds that are considered trading securities.

Realized and unrealized gains (losses) on the EDC plan investments were insignificant and were included as a component of operating income in the Company’s Consolidated Statements of Income (Loss), because the Company’s deferred compensation investments consist of mutual funds that are considered trading securities.

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.

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For 2025, one customer of the Branded Spirits segment accounted for approximately 16 percent of consolidated sales and one customer of the Ingredient Solutions segment accounted for approximately 14 percent of consolidated sales.

For 2023, the Company had sales to one customer that accounted for approximately 11 percent of consolidated sales, respectively.

For 2022, the Company had no sales to an individual customer that accounted for more than 10 percent of consolidated sales.

For 2024, one customer of the Branded Spirits segment accounted for approximately 13 percent of consolidated sales and one customer of the Ingredient Solutions segment accounted for approximately 12 percent of consolidated sales.

For 2023, the Company had sales to one customer that accounted for approximately 11 percent of consolidated sales.

During the years 2025, 2024, and 2023, the Company’s ten largest customers accounted for approximately 54 percent, 53 percent, and 44 percent of consolidated sales, respectively.

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In addition, the Company’s ten largest suppliers accounted for approximately 44 percent of consolidated purchases.

For 2023, the Company had purchases from two grain suppliers that approximated 20 percent of consolidated purchases.

For 2024, the Company had purchases from two suppliers that approximated 25 percent of consolidated purchases.

In addition, the Company’s ten largest suppliers accounted for approximately 57 percent of consolidated purchases.

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At December 31, 2025, the Company had three segments:

Distilling Solutions, Branded Spirits, and Ingredient Solutions.

Branded Spirits, Distilling Solutions, and Ingredient Solutions.

The Company’s operating segments are based on the financial information the chief operating decision maker uses to allocate resources and evaluate performance of the business.

During the year ended December 31, 2025, the chief operating decision maker was the Company’s Chief Executive Officer.

The Branded Spirits segment consists of a portfolio of high quality branded spirits which are produced through the 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 Branded Spirits segment consists of a portfolio of high quality branded spirits which are produced through the distilleries and bottling facilities.

The Ingredient Solutions segment consists of specialty starches and proteins as well as commodity starches and proteins.

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Year Ended December 31, 2025

Distilling Solutions Branded Spirits Ingredient Solutions Corporate Total

Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total

$ 232,941 $ 181,400 $ 122,034 $ — $ 536,375

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SG&A expense 35,647 2,827 3,937 42,408 84,819

Impairment of long-lived assets and other 137 — — — 137

Goodwill impairment

Goodwill and indefinite-lived intangible asset impairment

152,622 — — — 152,622

Change in fair value of contingent consideration 25,500 — — — 25,500

Operating income $ 137,468 $ ( 48,279 ) $ 20,531 $ ( 35,294 ) $ 74,426

Operating income (loss)

$ ( 127,680 ) $ 65,079 $ 10,514 $ ( 42,528 ) $ ( 94,615 )

Depreciation and amortization $ 8,607 $ 8,177 $ 5,899 $ 1,403 $ 24,086

Year Ended December 31, 2024

Distilling Solutions Branded Spirits Ingredient Solutions Corporate Total

Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total

$ 240,816 $ 332,204 $ 130,605 $ — $ 703,625

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Impairment of long-lived assets and other — 137 — — 137

Goodwill impairment 73,755 — — — 73,755

Change in fair value of contingent consideration 16,100 — — — 16,100

Operating income $ 122,145 $ 33,829 $ 40,729 $ ( 48,090 ) $ 148,613

Operating income (loss)

$ ( 48,279 ) $ 137,468 $ 20,531 $ ( 35,294 ) $ 74,426

Depreciation and amortization $ 8,035 $ 7,893 $ 4,711 $ 1,350 $ 21,989

Year Ended December 31, 2023

Distilling Solutions Branded Spirits Ingredient Solutions Corporate Total

Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total

$ 253,933 $ 450,854 $ 131,736 $ — $ 836,523

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SG&A expense 37,389 2,301 3,838 47,867 91,395

Operating income $ 121,651 $ 33,333 $ 27,532 $ ( 33,551 ) $ 148,965

Impairment of long-lived assets and other — 19,391 — — 19,391

Change in fair value of contingent consideration 7,100 — — — 7,100

Operating income (loss)

$ 33,829 $ 122,145 $ 40,729 $ ( 48,090 ) $ 148,613

Depreciation and amortization $ 6,952 $ 11,833 $ 2,574 $ 754 $ 22,113

(a) Sales from foreign sources totaled $ 36,240 , $ 49,822 , and $ 56,719 for the years ended December 31, 2024, 2023, and 2022, respectively, and is largely derived from the United Kingdom, Japan, Canada, Mexico, and Australia.

(a) Sales from foreign sources totaled $ 36,497 , $ 36,240 , and $ 49,822 for the years ended December 31, 2025, 2024, and 2023, respectively, and are largely derived from the United Kingdom, Japan, Canada, Mexico, and Australia.

The balance of total sales is from domestic sources.

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Identifiable Assets

Distilling Solutions $ 382,432 $ 369,241

Branded Spirits $ 734,459 $ 862,458

Distilling Solutions 342,449 382,432

Ingredient Solutions 133,807 132,003

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data