MGP INGREDIENTS INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. 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 our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. 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 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. KPMG, LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements contained herein, has issued an audit report on our internal control over financial reporting as of December 31, 2025, which is included in Item 8 of this Form 10-K. 37 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors MGP Ingredients, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of MGP Ingredients, Inc. 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. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective 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. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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 38 Table of Contents 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue recognition under bill and hold arrangements As discussed in Note 1 to the consolidated financial statements, the Company’s Distilling Solutions segment routinely enters into bill and hold arrangements, whereby the Company produces and sells aged and unaged distillate to customers. As discussed in Note 3 to the consolidated financial statements, brown goods revenue was $128,450 thousand for the year ended December 31, 2025, a portion of which was for bill and hold arrangements. We identified the evaluation of revenue recognized under bill and hold arrangements as a critical audit matter because of the extent of additional audit effort required to test the incremental bill and hold revenue recognition criteria. The incremental bill and hold revenue recognition criteria include the evaluation of: 1) the reason for the bill and hold arrangement; 2) the identification of the product as separately belonging to the customer; 3) the product being currently ready for physical transfer to the customer; and 4) the Company’s inability to use the product or direct it to another customer. 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 revenue recognition process, including controls related to bill and hold revenue recognition criteria being met. We examined a sample of bill and hold revenue transactions to assess the incremental bill and hold revenue recognition criteria. Specifically, we inspected documentation received from the customer directing the Company to warehouse distillate after production. Additionally, we observed a sample of customer-owned barrels to determine they were marked with unique identifiers separating them from Company-owned inventory and were ready for physical transfer to the customer upon request. 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. 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, 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. During the fourth quarter, the Company performed a quantitative assessment of goodwill and its indefinite-lived intangible assets. The estimated fair value of the Branded Spirits reporting unit used in the assessment of goodwill was determined through a combination of an income approach and a market approach. 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 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, 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 39 Table of Contents 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. 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 related to the critical audit matter. 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, 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: • evaluating the Company’s royalty rates by determining that the royalty rates used were supported by the associated margins and consistent with other internal and publicly available data. • 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. /s/ KPMG LLP We have served as the Company’s auditor since 2008. Kansas City, Missouri February 25, 2026 40 Table of Contents MGP INGREDIENTS, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Dollars in thousands, except share and per share amounts) Year Ended December 31, 2025 2024 2023 Sales $ 536,375 $ 703,625 $ 836,523 Cost of sales 336,966 417,308 531,811 Gross profit 199,409 286,317 304,712 Advertising and promotion expenses 31,083 40,508 38,213 Selling, general, and administrative expenses 84,819 81,391 91,395 Impairment of long-lived assets and other — 137 19,391 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 (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 (loss) before income taxes ( 100,350 ) 68,442 141,746 Income tax expense 7,482 33,977 34,616 Net income (loss) ( 107,832 ) 34,465 107,130 Net loss attributable to noncontrolling interest 23 198 345 Net income (loss) attributable to MGP Ingredients, Inc. ( 107,809 ) 34,663 107,475 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 Basic 21,363,047 22,015,439 22,059,816 Diluted 21,363,047 22,015,439 22,173,918 Earnings per common share Basic $ ( 4.99 ) $ 1.56 $ 4.82 Diluted $ ( 4.99 ) $ 1.56 $ 4.80 See Accompanying Notes to Consolidated Financial Statements 41 Table of Contents MGP INGREDIENTS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Dollars in thousands) Year Ended December 31, 2025 2024 2023 Net income (loss) attributable to MGP Ingredients, Inc. $ ( 107,809 ) $ 34,663 $ 107,475 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 income (loss) 285 ( 261 ) ( 93 ) 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 (loss) $ ( 107,547 ) $ 34,204 $ 107,037 See Accompanying Notes to Consolidated Financial Statements 42 Table of Contents MGP INGREDIENTS, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share amounts and par value) December 31, 2025 2024 Current Assets Cash and cash equivalents $ 18,460 $ 25,273 Receivables (less allowance for credit loss of $ 1,190 and $ 1,875 at December 31, 2025 and 2024, respectively) 116,160 148,488 Inventory 382,741 364,944 Prepaid expenses 2,139 3,983 Refundable income taxes 3,209 3,448 Total current assets 522,709 546,136 Property, plant, and equipment, net 327,987 316,672 Operating lease right-of-use assets, net 13,847 15,540 Investment in joint venture 8,211 7,024 Intangible assets, net 244,696 268,451 Goodwill 115,667 247,789 Other assets 2,747 4,173 Total assets $ 1,235,864 $ 1,405,785 Current Liabilities Current maturities of long-term debt $ 6,400 $ 6,400 Accounts payable 54,589 66,336 Contingent consideration 110,800 — Federal and state excise taxes payable 5,755 5,358 Accrued expenses and other 22,507 14,356 Total current liabilities 200,051 92,450 Long-term debt, less current maturities 49,735 121,277 Convertible senior notes 196,183 195,864 Long-term operating lease liabilities 10,561 11,940 Contingent consideration — 85,300 Other noncurrent liabilities 2,534 2,981 Deferred income taxes 60,010 63,430 Total liabilities 519,074 573,242 Commitments and Contingencies – Note 11 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 December 31, 2025 and 2024; 21,294,315 and 21,194,707 shares outstanding at December 31, 2025 and 2024, respectively 6,715 6,715 Additional paid-in capital 330,872 332,195 Retained earnings 445,736 563,929 Accumulated other comprehensive loss ( 373 ) ( 658 ) Treasury stock, at cost, 1,830,851 and 1,930,459 shares at December 31, 2025 and 2024, respectively ( 64,518 ) ( 68,019 ) Total MGP Ingredients, Inc. stockholders’ equity 718,436 834,166 Noncontrolling interest ( 1,646 ) ( 1,623 ) Total equity 716,790 832,543 Total liabilities and equity $ 1,235,864 $ 1,405,785 See Accompanying Notes to Consolidated Financial Statements 43 Table of Contents MGP INGREDIENTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Year Ended December 31, 2025 2024 2023 Cash Flows from 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 and indefinite-lived intangible asset impairment 152,622 73,755 — Share-based compensation 4,704 4,016 10,635 Equity method investment loss (gain) ( 1,187 ) ( 1,827 ) 337 Deferred income taxes, including change in valuation allowance ( 3,420 ) 359 ( 4,041 ) Change in fair value of contingent consideration 25,500 16,100 7,100 Other, net 831 465 728 Changes in operating assets and liabilities, net of effects of acquisitions: Receivables, net 32,189 ( 4,375 ) ( 32,397 ) Inventory ( 18,145 ) ( 18,155 ) ( 46,921 ) Prepaid expenses 1,831 ( 409 ) ( 481 ) Income taxes payable (refundable) 239 ( 2,258 ) 3,136 Accounts payable 1,619 ( 9,099 ) ( 2,406 ) Accrued expenses and other 8,424 ( 15,111 ) 348 Federal and state excise taxes payable 397 3,107 ( 2,375 ) Other, net ( 330 ) ( 881 ) 1,486 Net cash provided by operating activities 121,528 102,278 83,783 Cash Flows from Investing Activities Additions to property, plant, and equipment ( 45,488 ) ( 71,181 ) ( 55,267 ) Purchase of business, net of cash acquired — — ( 103,712 ) Other, net ( 37 ) ( 377 ) ( 263 ) Net cash used in investing activities ( 45,525 ) ( 71,558 ) ( 159,242 ) Cash Flows from Financing Activities Payment of dividends and dividend equivalents ( 10,325 ) ( 10,630 ) ( 10,675 ) 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 Principal payments on long-term debt ( 97,400 ) ( 89,400 ) ( 47,600 ) Net cash provided by (used in) financing activities ( 83,522 ) ( 23,803 ) 45,924 Effect of exchange rate changes on cash and cash equivalents 706 ( 32 ) 34 Increase (decrease) in cash and cash equivalents ( 6,813 ) 6,885 ( 29,501 ) Cash and cash equivalents, beginning of year 25,273 18,388 47,889 Cash and cash equivalents, end of year $ 18,460 $ 25,273 $ 18,388 See Accompanying Notes to Consolidated Financial Statements 44 Table of Contents MGP INGREDIENTS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (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, 2022 $ 4 $ 6,715 $ 318,839 $ 443,061 $ ( 304 ) $ ( 21,591 ) $ ( 1,080 ) $ 745,644 Comprehensive income (loss): Net income (loss) — — — 107,475 — — ( 345 ) 107,130 Other comprehensive loss — — — — ( 93 ) — — ( 93 ) Dividends declared (a) — — — ( 10,653 ) — — — ( 10,653 ) Share-based compensation — — 7,840 — — — — 7,840 Stock shares awarded, forfeited or vested — — ( 1,226 ) — — 1,226 — — Stock shares repurchased — — — — — ( 801 ) — ( 801 ) Balance, December 31, 2023 4 6,715 325,453 539,883 ( 397 ) ( 21,166 ) ( 1,425 ) 849,067 Comprehensive income (loss): Net income (loss) — — — 34,663 — — ( 198 ) 34,465 Other comprehensive loss — — — — ( 261 ) — — ( 261 ) Dividends declared (a) — — — ( 10,617 ) — — — ( 10,617 ) Share-based compensation — — 9,072 — — — — 9,072 Stock shares awarded, forfeited or vested — — ( 2,330 ) — — 2,330 — — Stock shares repurchased — — — — — ( 49,183 ) — ( 49,183 ) Balance, December 31, 2024 4 6,715 332,195 563,929 ( 658 ) ( 68,019 ) ( 1,623 ) 832,543 Comprehensive income (loss): Net loss — — — ( 107,809 ) — — ( 23 ) ( 107,832 ) Other comprehensive income — — — — 285 — — 285 Dividends declared (a) — — — ( 10,384 ) — — — ( 10,384 ) Share-based compensation — — 3,213 — — — — 3,213 Stock shares awarded, forfeited or vested — — ( 4,536 ) — — 4,536 — — Stock shares repurchased — — — — — ( 1,035 ) — ( 1,035 ) Balance, December 31, 2025 $ 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 45 Table of Contents MGP INGREDIENTS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, unless otherwise noted) NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company. MGP Ingredients, Inc. (“MGP” or the “Company”) is a leading producer of branded and distilled spirits, as well as food ingredient solutions. 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. 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: Branded Spirits, Distilling Solutions, and Ingredient Solutions. Principles of Consolidation. The 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. 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. The financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). The preparation of 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. 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. Properties, Depreciation, and Amortization. Property, plant, and equipment are typically stated at cost. Additions, including those that increase the life or utility of an asset, are capitalized and all properties are depreciated over their estimated remaining useful lives. Depreciation and amortization are computed using the straight line method over the following estimated useful lives: Buildings and improvements (a) 10 – 35 years Machinery and equipment 3 – 10 years Office furniture and equipment 5 – 10 years Computer equipment and software 3 – 5 years Motor vehicles 5 years (a) Leasehold improvements are the shorter of economic useful life or life of the lease 46 Table of Contents 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 (Loss). The Company capitalizes interest costs associated with significant construction projects. Total interest incurred for 2025, 2024, and 2023 is noted below: Year Ended December 31, 2025 2024 2023 Interest costs charged to expense $ 7,044 $ 8,439 $ 6,647 Plus: Interest cost capitalized 2,594 2,031 2,349 Total $ 9,638 $ 10,470 $ 8,996 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 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 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 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. Impairment of Long-Lived Assets. The Company reviews long-lived assets for impairment when events or changes in circumstances indicate the carrying amount of the asset group may not be fully recoverable. The Company determines the carrying amount of the asset group using the future projected cash flows as well as quantitative and qualitative factors. An impairment loss is recognized when the carrying value exceeds the fair value of the asset group. See Note 6, Closure of the Atchison Distillery, for more information. 47 Table of Contents 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 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 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 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. Business Combinations. Assets acquired and liabilities assumed during a business combination are generally recorded at fair market value as of the acquisition date. Goodwill is recognized to the extent that the purchase consideration, including contingent consideration, exceeds the value of the assets acquired and liabilities assumed. The Company uses its internal estimates and third-party valuation specialists to assist in determining the fair value of the assets acquired and liabilities assumed. During the measurement period, which can be up to one year after the acquisition date, the Company can make adjustments to the fair value of the assets acquired and liabilities assumed, with the offset being an adjustment to goodwill. 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 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. 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. See Note 5, Goodwill and other Intangible Assets for more information. 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. 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 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. 48 Table of Contents 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. See Note 4, Business Combination, for more information. Fair value disclosure for deferred compensation plan investments is included in Note 12, Employee Benefit Plans. Derivative Instruments. Certain commodities the Company uses in its production process, or input costs, expose it to market price risk due to volatility in the prices for those commodities. Through the Company’s grain supply contracts, its wheat flour supply contract, and its natural gas contracts, it purchases grain, wheat flour, and natural gas, respectively, for delivery from one to 24 months into the future at negotiated fixed prices. The Company has determined that the firm commitments to purchase grain, wheat flour, and natural gas under the terms of its supply contracts meet the normal purchases and sales exception as defined under ASC 815, Derivatives and Hedging , because the quantities involved are for amounts to be consumed within the normal expected production process. Equity Method Investments. The Company holds 50 percent interest 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. 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, 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 2023-09, 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 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. 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 Statements 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 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 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 49 Table of Contents 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. NOTE 2: OTHER BALANCE SHEET CAPTIONS Inventory. December 31, 2025 2024 Finished goods $ 42,263 $ 43,952 Barreled distillate (bourbons and other whiskeys) 301,665 283,119 Raw materials 25,534 25,491 Work in process 2,782 1,673 Maintenance materials 9,097 8,591 Other 1,400 2,118 Total $ 382,741 $ 364,944 Property, plant, and equipment, net. December 31, 2025 2024 Land, buildings, and improvements $ 246,389 $ 211,129 Transportation equipment 839 905 Machinery and equipment 299,783 280,783 Construction in progress 47,887 69,897 Property, plant, and equipment, at cost 594,898 562,714 Less accumulated depreciation and amortization ( 266,911 ) ( 246,042 ) Property, plant, and equipment, net $ 327,987 $ 316,672 Accrued expenses and other. December 31, 2025 2024 Employee benefit plans $ 1,531 $ 467 Salaries and wages 11,716 5,712 Property taxes 2,194 916 Current operating lease liabilities 3,732 4,157 Other 3,334 3,104 Total $ 22,507 $ 14,356 NOTE 3: 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 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 services). 50 Table of Contents Disaggregation of Sales. The following table presents the Company’s sales disaggregated by segment and major products and services. Year Ended December 31, 2025 2024 2023 Branded Spirits Premium plus $ 116,730 $ 110,991 $ 105,465 Mid 59,486 63,454 75,676 Value 32,606 42,100 47,907 Other 24,119 24,271 24,885 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 Specialty wheat starches 68,124 76,005 66,050 Specialty wheat proteins 39,915 41,768 48,291 Commodity wheat starch 10,371 12,351 16,413 Commodity wheat protein 3,109 481 982 Biofuel and other 515 — — Total Ingredient Solutions 122,034 130,605 131,736 Total Sales $ 536,375 $ 703,625 $ 836,523 NOTE 4: BUSINESS COMBINATION Acquisition of Penelope Description of the Transaction . On May 8, 2023, the Company entered into a definitive agreement to acquire 100 percent of the equity of Penelope, and subsequently completed the acquisition on June 1, 2023 (the “Acquisition”). Penelope, prior to the Acquisition, was a family and founder-owned and operated American whiskey company with a diverse portfolio of high-quality whiskeys in the premium plus price tier. As a result of the Acquisition, the Company enhanced its presence in the growing American whiskey category and expanded its portfolio of premium plus price tier brands. Following the Acquisition, Penelope became a wholly owned subsidiary of the Company and its financial results are included within the Branded Spirits segment. The aggregate consideration paid by the Company in connection with the Acquisition was $ 105,000 in cash paid at closing, with further additional potential earn-out consideration of up to a maximum cash payout of $ 110,800 if certain performance conditions, measured through December 31, 2025, are met. The consideration is subject to customary purchase price adjustments related to, among other things, net working capital and acquired cash. The consideration paid at closing included a preliminary estimated purchase price adjustment. During the year ended December 31, 2023, the Company finalized the net working capital adjustments, which decreased the cash consideration from $ 105,000 at closing to $ 104,638 at December 31, 2023. The cash portion of the consideration and transaction-related expenses were paid using both cash on hand and borrowings under the Company’s existing credit agreement. See Note 7, Corporate Borrowings, for further details. For tax purposes, the Acquisition was structured as an asset purchase which created additional tax basis in the assets acquired as a result of valuing the assets at fair market value and the purchase price was accounted for in accordance with U.S. federal tax law. Indefinite-lived intangible assets and goodwill are deductible for U.S. income tax purposes. 51 Table of Contents 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. This approach requires significant assumptions, including projected net sales, discount rates, and volatility rates. 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 projected net sales, discount rates, and volatility rates. 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 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. NOTE 5: GOODWILL AND OTHER 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 $ 52,206 , net of accumulated amortization of $ 12,894 . The distributor relationships have a useful life of 20 years. 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, 2025, the expected future amortization expense related to definite-lived intangible assets are as follows: 2026 $ 3,255 2027 3,255 2028 3,255 2029 3,255 2030 3,255 Thereafter 35,931 Total $ 52,206 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 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. These assumptions are based on historical trends as well as the projections and assumptions used in the Company’s budget and long-range plans. 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 52 Table of Contents 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 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 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. 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 Balance at December 31, 2023 (a) $ — $ 212,990 $ — $ 212,990 Balance at December 31, 2024 (a) — 212,990 — 212,990 Impairment — ( 20,500 ) — ( 20,500 ) Balance at December 31, 2025 $ — $ 192,490 $ — $ 192,490 (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. When estimating the fair value, the Company made certain assumptions for its future revenue projections, market royalty rates, and discount rates. 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. 53 Table of Contents 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. 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. When estimating the fair value, the Company made certain assumptions for its future revenue projections, market royalty rates, and discount rates. 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. 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 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. NOTE 6: CLOSURE OF THE ATCHISON FACILITY On July 13, 2023, the Company announced the decision by its Board of Directors to approve the closure of the Company’s distillery located in Atchison, Kansas (the “Atchison Distillery”). The Atchison Distillery ceased operations in December 2023. The decision to close the Atchison Distillery is consistent with the Company’s plan to address profitability headwinds associated with its GNS and industrial alcohol products within the Distilling Solutions segment. As a result of the decision to close the Atchison Distillery, the Company, with the assistance of a third-party valuation specialist, completed a fair value analysis of the assets associated with the Atchison Distillery during the year ended December 31, 2023. 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 Statements of Income (Loss). The impaired assets were recorded within the Distilling Solutions 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 (Loss). NOTE 7: CORPORATE BORROWINGS Indebtedness Outstanding. The following table presents the Company’s outstanding indebtedness: December 31, Description (a) 2025 2024 Credit Agreement - Revolver, 4.82 % (variable rate) due 2030 $ 42,000 $ 105,000 Convertible Note, 1.88 % (fixed rate) due 2041 201,250 201,250 Note Purchase Agreement Series A Senior Secured Notes, 3.53 % (fixed rate) due 2027 5,600 8,800 Senior Secured Notes, 3.80 % (fixed rate) due 2029 11,200 14,400 Total indebtedness outstanding 260,050 329,450 Less unamortized loan fees (b) ( 7,732 ) ( 5,909 ) Total indebtedness outstanding, net 252,318 323,541 Less current maturities of long-term debt ( 6,400 ) ( 6,400 ) Long-term debt $ 245,918 $ 317,141 (a) Interest rates are as of December 31, 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 54 Table of Contents 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 $ 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. As of December 31, 2025, the Company had $ 42,000 outstanding borrowings under the Credit Agreement, leaving $ 458,000 available. The interest rate for the borrowings of the Credit Agreement at December 31, 2025 was 4.82 %. 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. The Series A Senior Secured Notes bear interest at a rate of 3.53 percent per year. During 2019, the Company issued $ 20,000 of additional Senior Secured Notes with a maturity date of April 30, 2029. The Senior Secured Notes bear interest at a rate of 3.80 percent per year. 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 $ 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. The Note Purchase Agreement includes certain requirements and covenants, with which the Company was in compliance at December 31, 2025. 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 total aggregate principal amount includes $ 26,250 aggregate principal amount of 2041 Notes purchased by the initial purchasers in the offering pursuant to their exercise in full of their option to purchase additional notes under the purchase agreement for the offering. 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 (“Maturity Date”) 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. The Company incurred no new loan fees related to the 2041 Notes during 2025. The unamortized balance of total loan fees related to the 2041 Notes was $ 5,067 at December 31, 2025 and is being amortized over the life of the 2041 Notes. The initial conversion rate for the 2041 Notes is 10.3911 shares of Common Stock per $1 principal amount of the 2041 Notes. 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 55 Table of Contents 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; • upon the occurrence of specified corporate events, as defined in the Indenture; • if the Company calls the notes for redemption; or • during the period July 15, 2026 ending close of business day immediately preceding November 20, 2026 or the period July 15, 2041 and close of business day immediately preceding the Maturity Date. Debt Maturities. Aggregate amount of maturities for long-term debt as of December 31, 2025 are as follows: 2026 $ 6,400 2027 5,600 2028 3,200 2029 1,600 2030 42,000 Thereafter 201,250 Total $ 260,050 NOTE 8: INCOME TAXES 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: Year Ended December 31, 2025 2024 2023 Current: Federal $ 8,469 $ 28,234 $ 32,296 State 2,127 5,269 5,926 Foreign 291 131 330 10,887 33,634 38,552 Deferred: Federal ( 1,734 ) 625 ( 4,100 ) State ( 1,841 ) ( 238 ) 120 Foreign 170 ( 44 ) 44 ( 3,405 ) 343 ( 3,936 ) Total $ 7,482 $ 33,977 $ 34,616 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)). 56 Table of Contents 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 Amount Percent “Expected” provision at federal statutory rate $ ( 21,074 ) 21.0 % State and local income taxes, net of federal income tax effect (a) 226 ( 0.2 ) Foreign tax effects 462 ( 0.5 ) 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 ( 69 ) 0.1 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, 2024 2023 “Expected” provision at federal statutory rate $ 14,373 $ 29,895 State income taxes, net 5,865 6,545 Foreign income taxes 131 330 Change in valuation allowance ( 965 ) 1,135 Nondeductible goodwill impairment 15,489 — Share-based compensation ( 362 ) ( 288 ) Federal and state tax credits ( 2,078 ) ( 1,685 ) Other 1,524 ( 1,316 ) Income tax expense $ 33,977 $ 34,616 Effective tax rate 49.6 % 24.4 % 57 Table of Contents The tax effects of temporary differences giving rise to deferred income taxes shown on the Consolidated Balance Sheets are as follows: December 31, 2025 2024 Deferred income tax assets: Share-based compensation $ 2,819 $ 3,511 U.S. state and foreign tax credit carryforwards 4,453 3,426 Mexico and U.S. state loss carryforwards 1,303 3,165 Inventories 2,696 2,726 Operating lease liabilities 3,659 4,120 Deferred compensation 572 935 Section 174 timing difference — 1,554 Contingent Consideration 12,466 5,939 Other 2,082 2,462 Gross deferred income tax assets 30,050 27,838 Less: valuation allowance ( 418 ) ( 2,243 ) Net deferred income tax assets 29,632 25,595 Deferred income tax liabilities: Property, plant and equipment ( 25,882 ) ( 23,813 ) Intangibles ( 47,266 ) ( 50,518 ) Inventory ( 841 ) ( 1,165 ) Operating lease right-of-use assets ( 3,544 ) ( 3,978 ) Convertible Senior Note ( 9,724 ) ( 7,146 ) Other ( 2,384 ) ( 2,405 ) Gross deferred income tax liabilities ( 89,641 ) ( 89,025 ) Net deferred income tax liability $ ( 60,009 ) $ ( 63,430 ) A schedule of the change in valuation allowance is as follows: Balance at December 31, 2023 $ 3,208 Decrease ( 965 ) Balance at December 31, 2024 2,243 Decrease ( 1,825 ) Balance at December 31, 2025 $ 418 As of December 31, 2025, the Company’s total valuation allowance of $ 418 , related to net operating loss in U.S. 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. 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. As of December 31, 2025 and 2024, the Company had $ 19,064 and $ 18,422 in gross U.S. state net operating loss carryforwards, respectively. Due to varying U.S. state carryforward periods, the state net operating loss carryforwards will primarily expire in varying years between calendar years 2026 and 2045. As of December 31, 2025 and 2024, the Company had gross U.S. state tax credit carryforwards of $ 5,636 and $ 4,336 , respectively. U.S. state credits, if not used to offset income tax expense in their respective jurisdictions, will expire in varying years between 2026 and 2041. 58 Table of Contents The Company treats accrued interest and penalties related to tax liabilities, if any, as a component of income tax expense. During 2025, 2024, and 2023, the Company’s activity in accrued interest and penalties was not significant. The following is a reconciliation of the total amount of unrecognized tax benefits (excluding interest and penalties) for 2025, 2024, and 2023: Year Ended December 31, 2025 2024 2023 Beginning of year balance $ 189 $ 424 $ 156 Additions based on prior year tax positions — — 83 Additions based on current year tax positions 5 — 245 Reduction for prior year tax positions ( 16 ) ( 235 ) ( 60 ) End of year balance $ 178 $ 189 $ 424 For each period presented, substantially all of the amount of unrecognized benefits (excluding interest and penalties) would impact the effective tax rate, if recognized. 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, 2025 U.S. Federal $ 8,200 U.S. State 2,359 Foreign 100 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. For U.S. 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. NOTE 9: EQUITY AND EPS Capital Stock. Common stockholders are entitled to elect four of the nine members of the Company’s Board of Directors, while Preferred stockholders are entitled to elect the remaining five members. All directors are elected annually for a one year term. Stockholders who own 10 percent or more of the outstanding Common Stock or preferred stock have the right to call a special meeting of stockholders. Common stockholders are not entitled to vote with respect to a merger, dissolution, lease, exchange or sale of substantially all of the Company’s assets, or on an amendment to the Articles of Incorporation, unless such action would increase or decrease the authorized shares or par value of the Common Stock or preferred stock, or change the powers, preferences or special rights of the Common Stock or preferred stock so as to affect the Common stockholders adversely. Generally, Common stockholders and Preferred stockholders vote as separate classes on all other matters requiring shareholder approval. 59 Table of Contents EPS. The following table presents the computations of basic and diluted EPS: Year Ended December 31, 2025 2024 2023 Operations: Net income (loss) (a) $ ( 107,832 ) $ 34,465 $ 107,130 Net loss attributable to noncontrolling interest 23 198 345 Income attributable to participating securities (unvested shares and units) (b) 1,295 ( 373 ) ( 1,074 ) Net income (loss) used in EPS calculation $ ( 106,514 ) $ 34,290 $ 106,401 Share information: Basic weighted average common shares (c) 21,363,047 22,015,439 22,059,816 Diluted weighted average common shares (d) 21,363,047 22,015,439 22,173,918 Basic EPS $ ( 4.99 ) $ 1.56 $ 4.82 Diluted EPS $ ( 4.99 ) $ 1.56 $ 4.80 (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 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 years ended December 31, 2025 and 2024. 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 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. Shares Outstanding Activity. The following table presents the Company’s share activity: Shares Outstanding Preferred Stock Common Stock Balance at December 31, 2023 437 22,016,113 Issuance of Common Stock — 91,051 Repurchase of Common Stock (a) — ( 912,457 ) Balance at December 31, 2024 437 21,194,707 Issuance of Common Stock — 131,239 Repurchase of Common Stock — ( 31,631 ) Balance at December 31, 2025 437 21,294,315 (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. 60 Table of Contents Dividends and Dividend Equivalents. The following table presents the Company’s dividend and dividend equivalent information: Dividend and Dividend Equivalent Information (per Share and Unit) Declaration date Record date Payment date Declared Paid Dividend payment Dividend equivalent payment (a)(b) Total payment (b) 2025 February 26 March 14 March 28 $ 0.12 $ 0.12 $ 2,553 $ 25 $ 2,578 May 1 May 16 May 30 0.12 0.12 2,553 25 2,578 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 $ 0.48 $ 0.48 $ 10,216 $ 109 $ 10,325 2024 February 22 March 15 March 29 $ 0.12 $ 0.12 $ 2,641 $ 31 $ 2,672 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 2023 February 23 March 10 March 24 $ 0.12 $ 0.12 $ 2,640 $ 29 $ 2,669 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 $ 0.48 $ 0.48 $ 10,565 $ 110 $ 10,675 (a) Dividend equivalent payments on unvested participating securities (see Note 12, Employee Benefit Plans). (b) Includes estimated forfeitures. NOTE 10: LEASES The Company has operating leases for railcars, computer equipment, office spaces, warehouse facilities, a distribution facility, fulfillment center, and certain equipment. The Company has no finance leases. Leases with terms of twelve months or less are not recorded on the Company’s Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. 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 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. As most of the Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. 61 Table of Contents The following table provides supplemental balance sheet classification information related to leases: December 31, Leases Balance Sheet Classification 2025 2024 Assets Operating Operating lease right-of-use assets, net $ 13,847 $ 15,540 Total leased assets $ 13,847 $ 15,540 Liabilities Current Operating Accrued expenses $ 3,732 $ 4,157 Noncurrent Operating Long-term operating lease liabilities 10,561 11,940 Total operating lease liability $ 14,293 $ 16,097 The following table presents the components of lease costs: Year Ended December 31, 2025 2024 Operating lease costs $ 4,828 $ 3,623 Short-term lease costs 435 383 Net lease costs (a) $ 5,263 $ 4,006 (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: Year Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 4,822 $ 3,612 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 763 $ 6,661 The following table presents weighted average discount rate and remaining lease term: December 31, 2025 2024 Weighted average discount rate Operating leases 4.94 % 4.43 % Weighted average remaining lease term Operating leases 4.5 years 4.4 years 62 Table of Contents As of December 31, 2025, the future payments under operating leases having initial terms of one year or more were as follows: 2026 $ 4,341 2027 4,176 2028 3,344 2029 1,132 2030 983 Thereafter 2,085 Total lease payments 16,061 Less interest ( 1,768 ) Total operating lease liability $ 14,293 NOTE 11: COMMITMENTS AND CONTINGENCIES Commitments. 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. As of December 31, 2025, approximately $ 50,000 of the Company’s facilities in Nelson County Kentucky and approximately $ 39,300 of the Company’s facilities in Williamstown, Kentucky were financed with industrial revenue bonds. The city then leased the facilities back to the Company under a capital lease, the terms of which provide for the payment of basic rent in an amount sufficient to pay principal and interest on the bonds. The Company’s obligation to pay rent under the lease is in the same amount and due on the same date as the obligation to pay debt service on the bonds which the Company holds. The lease permits the Company to present the bonds at any time for cancellation, upon which our obligation to pay basic rent would be canceled. At the bonds’ maturity the facilities will revert to the Company without costs. If the Company were to present the bonds for cancellation prior to maturity, a nominal fee could be incurred. The Company may not be able to use industrial revenue bonds in the future due to legislative, regulatory, and related changes in the state of Kentucky. The Company recorded the land and building assets as property, plant, and equipment, net, on its Consolidated Balance Sheets under a capital lease. The lease payment on the facilities is sufficient to pay principal and interest on the bonds. Because the Company owns all of the outstanding bonds, has a legal right to set-off, and intends to set-off the corresponding lease and interest payment, the Company netted the capital lease obligation with the bond asset and, in turn, reflected no amount for the obligation or the corresponding asset on its Consolidated Balance Sheets at December 31, 2025 and 2024. Contingencies. The Company and its subsidiaries are, from time to time, a party to legal and regulatory proceedings arising in the ordinary course of 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 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 63 Table of Contents 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. NOTE 12: EMPLOYEE BENEFIT PLANS 401(k) Plans. The Company has established 401(k) plans covering all U.S. employees after certain eligibility requirements are met. Amounts charged to operations for employer contributions related to the plans totaled $ 2,820 , $ 2,836 , and $ 2,810 for 2025, 2024, and 2023, respectively. Post-Employment Benefits. The Company sponsors life insurance coverage as well as medical benefits, including prescription drug coverage, to certain retired employees and their spouses. In 2014, the Company made a change to the plan to terminate post-employment health care and life insurance benefits for retirees and employees, except for a specified grandfathered group. As of December 31, 2025 the total current and non-current benefit obligations are immaterial. Share-Based Compensation Plans. 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 . 64 Table of Contents 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, 2025 Grant-date fair value $ 11.97 Expected term (1) 6 years Expected volatility (2) 46.3 % Risk-free interest rate (3) 3.8 % Expected dividend yield (4) 1.7 % (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: Year Ended December 31, 2025 2024 2023 Units Weighted Average Grant-Date Fair Value Units Weighted Average Grant-Date Fair Value Units Weighted Average Grant-Date Fair Value Unvested balance at beginning of year 243,007 $ 84.29 226,410 $ 77.56 179,538 $ 65.11 Granted 136,644 30.90 115,411 84.90 71,728 96.87 Forfeited ( 7,796 ) 75.16 ( 16,872 ) 86.88 ( 2,264 ) 81.76 Vested ( 105,776 ) 75.78 ( 81,942 ) 66.04 ( 22,592 ) 39.47 Unvested balance at end of year 266,079 $ 60.52 243,007 $ 84.29 226,410 $ 77.56 During 2025, 2024, and 2023, the total grant date fair value of RSU awards vested was $ 8,016 , $ 5,411 , and $ 892 , respectively. As of December 31, 2025, there was $ 4,160 of total estimated unrecognized compensation costs (net of estimated forfeitures) related to granted RSU awards. These costs are expected to be recognized over a weighted average period of approximately 1.6 years. 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; 25,521 shares for $ 2,185 in 2024; 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 65 Table of Contents 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, 2025 Units Weighted Average Grant-Date Fair Value 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 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. 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. Deferred Compensation Plan. The Company established an unfunded Executive Deferred Compensation Plan (the “EDC Plan”) effective as of 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 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 (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. The current portion of the EDC Plan deferrals is comprised of estimated amounts to be paid within one year depending on timing of planned disbursements. At December 31, 2025 and 2024, the EDC Plan investments were $ 2,236 and $ 3,653 , respectively, which were recorded in other assets on the Company’s Consolidated Balance Sheets. The EDC Plan current liabilities were $ 585 and $ 1,520 at December 31, 2025 and 2024, respectively, and were included in accrued expenses and other on the Company’s Consolidated Balance Sheets. The EDC Plan non-current liabilities were $ 1,651 and $ 2,132 as of December 31, 2025 and 2024, respectively, which were recorded in Other non-current liabilities on the Company’s Consolidated Balance Sheets. NOTE 13: CONCENTRATIONS AND RELATED PARTIES Significant customers. 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 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. Significant suppliers. For 2025, the Company had purchases from two suppliers that approximated 19 percent of consolidated purchases. In addition, the Company’s ten largest suppliers accounted for approximately 44 percent of consolidated purchases. 66 Table of Contents 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. For 2023, the Company had purchases from two grain suppliers that approximated 20 percent of consolidated purchases. In addition, the Company’s ten largest suppliers accounted for approximately 51 percent of consolidated purchases. Related Parties. For the years ended December 31, 2025, 2024, and 2023 the Company purchased $ 22,866 , $ 26,345 , and $ 41,520 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL. The Company holds 50 percent interest in DGL and Agricola, which is accounted for as equity method investments. See Note 1, Nature of Operations and Summary of Significant Accounting Policies. The Company leased bottling and warehousing facilities in St. Louis, Missouri from Kemper-Themis, L.L.C. (“Kemper”), which was owned by Donn Lux, a member of the Company’s Board of Directors. On October 31, 2023, the Company’s Audit Committee and Board of Directors approved the purchase of the Kemper bottling and warehousing facilities from Kemper for $ 9,000 . The purchase and sales agreement was entered into by both parties subsequent to Board approval and the transaction closed in February 2024. The transaction was entered into at fair value based on two independent appraisers’ valuation; therefore, the transaction is deemed to have been conducted at an arm’s length. NOTE 14: OPERATING SEGMENTS At December 31, 2025, the Company had three segments: 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 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 income for each segment is based on sales less identifiable operating expenses. The CODM used the operating income to evaluate the segment profitability and to assess the actual results compared to the budget. Non-direct selling, general, and administrative expenses (“SG&A”), non-direct advertising and promotion expense, interest expense, and other general miscellaneous expenses are classified as Corporate. Receivables, inventories, and equipment have been identified with the segments to which they relate. All other assets are considered as Corporate. 67 Table of Contents The following tables present summarized financial information for each segment: Year Ended December 31, 2025 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales (a) $ 232,941 $ 181,400 $ 122,034 $ — $ 536,375 Cost of Goods Sold 117,621 112,798 106,547 — 336,966 Gross Profit 115,320 68,602 15,487 — 199,409 Advertising and promotion expense 29,231 696 1,036 120 31,083 SG&A expense 35,647 2,827 3,937 42,408 84,819 Goodwill and indefinite-lived intangible asset impairment 152,622 — — — 152,622 Change in fair value of contingent consideration 25,500 — — — 25,500 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 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales (a) $ 240,816 $ 332,204 $ 130,605 $ — $ 703,625 Cost of Goods Sold 122,620 190,277 104,411 — 417,308 Gross Profit 118,196 141,927 26,194 — 286,317 Advertising and promotion expense 36,909 1,352 1,714 533 40,508 SG&A expense 39,711 2,970 3,949 34,761 81,391 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 (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 Branded Spirits Distilling Solutions Ingredient Solutions Corporate Total Sales (a) $ 253,933 $ 450,854 $ 131,736 $ — $ 836,523 Cost of Goods Sold 141,152 305,890 84,769 — 531,811 Gross Profit 112,781 144,964 46,967 — 304,712 Advertising and promotion expense 34,463 1,127 2,400 223 38,213 SG&A expense 37,389 2,301 3,838 47,867 91,395 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 $ 36,497 , $ 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. 68 Table of Contents The following table allocates assets to each segment as of: December 31, 2025 2024 Identifiable Assets Branded Spirits $ 734,459 $ 862,458 Distilling Solutions 342,449 382,432 Ingredient Solutions 133,807 132,003 Corporate 25,149 28,892 Total (a) $ 1,235,864 $ 1,405,785 (a) As of December 31, 2025 and 2024, the Company had $ 5,120 and $ 4,042 , respectively, of long-lived assets located in Northern Ireland. NOTE 15: SUPPLEMENTAL CASH FLOW INFORMATION Year Ended December 31, 2025 2024 2023 Non-cash investing and financing activities: Purchase of property, plant, and equipment in accounts payable $ 3,989 $ 17,590 $ 15,610 Additional cash payment information: Interest paid 9,417 10,569 9,241 Income taxes paid 10,659 36,068 35,144 See Note 10, Leases for operating lease supplemental cash flow information. NOTE 16: SUBSEQUENT EVENTS Dividend Declaration. On February 25, 2026, the Company announced a quarterly dividend payable to stockholders of record of the Company’s Common Stock, resulting in dividend equivalents payable to RSU holders, of $ 0.12 per share and per RSU. The dividend and dividend equivalents are payable on March 27, 2026, to stockholders of record and RSU holders as of March 13, 2026. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.