What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 119 added, 77 removed, 562 unchanged (26% of the section changed)

3 unchanged sentences

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

Quarter Ended June 30, Year to Date Ended June 30,

Quarter Ended September 30, Year to Date Ended September 30,

2023 2022 2023 2022

4 unchanged sentences

Selling, general, and administrative expenses 21,570 17,905 65,615 51,995

Impairment of long-lived assets and other 18,334 — 18,334 —

Change in fair value of contingent consideration 4,200 — 4,200 —

Operating income 19,839 33,864 105,541 119,250

19 unchanged sentences

(Dollars in thousands)

Quarter Ended June 30, Year to Date Ended June 30,

Quarter Ended September 30, Year to Date Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) on foreign currency translation adjustment 136 ( 430 ) 311 ( 649 )

Unrealized loss on foreign currency translation adjustment ( 317 ) ( 467 ) ( 6 ) ( 1,116 )

Change in Company-sponsored post-employment benefit plan 8 ( 76 ) ( 168 ) ( 102 )

Other comprehensive income (loss) 67 ( 443 ) 135 ( 675 )

Other comprehensive loss ( 309 ) ( 543 ) ( 174 ) ( 1,218 )

Comprehensive income attributable to MGP Ingredients, Inc.

6 unchanged sentences

(Unaudited) (Dollars in thousands)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current Assets

Cash and cash equivalents $ 28,030 $ 47,889

Receivables (less allowance for credit loss, $ 1,475 at both June 30, 2023, and December 31, 2022)

Receivables (less allowance for credit loss, $ 1,475 at both September 30, 2023, and December 31, 2022)

126,692 109,267

34 unchanged sentences

authorized 40,000,000 shares;

issued 23,125,166 shares at June 30, 2023 and December 31, 2022;

and 22,014,374 and 21,994,042 shares outstanding at June 30, 2023 and December 31, 2022, respectively

issued 23,125,166 shares at September 30, 2023 and December 31, 2022;

and 22,015,196 and 21,994,042 shares outstanding at September 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 323,129 318,839

Retained earnings 511,480 443,061

Accumulated other comprehensive income (loss) ( 169 ) ( 304 )

Treasury stock, at cost, 1,110,792 and 1,131,124 shares at June 30, 2023 and December 31, 2022, respectively

Accumulated other comprehensive loss ( 478 ) ( 304 )

Treasury stock, at cost, 1,109,970 and 1,131,124 shares at September 30, 2023 and December 31, 2022, respectively

( 21,260 ) ( 21,591 )

8 unchanged sentences

(Dollars in thousands)

Year to Date Ended June 30,

Year to Date Ended September 30,

Cash Flows from Operating Activities

2 unchanged sentences

Depreciation and amortization 16,272 16,257

Impairment of long-lived assets and other 18,334 —

Share-based compensation 5,651 3,086

1 unchanged sentence

Deferred income taxes, including change in valuation allowance ( 2,112 ) ( 302 )

Change in fair value of contingent consideration 4,200 —

Other, net 376 426

28 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For Year to Date Ended June 30, 2023

For Year to Date Ended September 30, 2023

(Dollars in thousands)

24 unchanged sentences

Stock shares awarded, forfeited or vested — — ( 538 ) — — 538 — —

Stock shares repurchased — — — — — — — —

Balance, June 30, 2023

4 6,715 322,267 500,933 ( 169 ) ( 21,347 ) ( 1,281 ) 807,122

Comprehensive income:

Net income (loss) — — — 13,211 — ( 123 ) 13,088

Other comprehensive loss — — — — ( 309 ) — ( 309 )

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 2,664 ) — — — ( 2,664 )

Share-based compensation — — 949 — — — — 949

Stock shares awarded, forfeited, or vested — — ( 87 ) — — 87 — —

Balance, September 30, 2023

$ 4 $ 6,715 $ 323,129 $ 511,480 $ ( 478 ) $ ( 21,260 ) $ ( 1,404 ) $ 818,186

See accompanying notes to unaudited condensed consolidated financial statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For Year to Date Ended June 30, 2022

For Year to Date Ended September 30, 2022

(Dollars in thousands)

27 unchanged sentences

4 6,715 317,240 401,915 ( 321 ) ( 21,726 ) ( 754 ) 703,073

Comprehensive income:

Net income (loss) — — — 23,808 — ( 180 ) 23,628

Other comprehensive loss — — — — ( 543 ) — ( 543 )

Dividends and dividend equivalents of $ 0.12 per common share and per restricted stock unit, net of estimated forfeitures

— — — ( 2,660 ) — — — ( 2,660 )

Share-based compensation — — 363 — — — — 363

Stock shares awarded, forfeited, or vested — — ( 62 ) — — 62 — —

Stock shares repurchased — — — — — ( 1 ) — ( 1 )

Balance, September 30, 2022

$ 4 $ 6,715 $ 317,541 $ 423,063 $ ( 864 ) $ ( 21,665 ) $ ( 934 ) $ 723,860

See accompanying notes to unaudited condensed consolidated financial statements

20 unchanged sentences

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

These unaudited condensed consolidated financial statements as of and for the quarter and year to date ended June 30, 2023, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”).

These unaudited condensed consolidated financial statements as of and for the quarter and year to date ended September 30, 2023, should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”).

The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

16 unchanged sentences

Inventory consists of the following:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Finished goods $ 53,160 $ 47,073

50 unchanged sentences

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 determine the fair 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 periods, 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.

5 unchanged sentences

The Company separately evaluates indefinite-lived intangible assets for impairment.

As of June 30, 2023, the Company determined that goodwill and indefinite-lived intangible assets were not impaired.

As of September 30, 2023, the Company determined that goodwill and indefinite-lived intangible assets were not impaired.

Fair Value of Financial Instruments.

11 unchanged sentences

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 $ 235,270 and $ 150,249 at June 30, 2023 and December 31, 2022, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 325,104 and $ 230,335 at June 30, 2023 and December 31, 2022, respectively.

Excluding the impact of the conversion feature of the Convertible Senior Notes, the fair value of the Company’s debt was $ 223,030 and $ 150,249 at September 30, 2023 and December 31, 2022, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 316,677 and $ 230,335 at September 30, 2023 and December 31, 2022, respectively.

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

8 unchanged sentences

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

The investment in LMX, which is recorded in investment in joint ventures on the Condensed Consolidated Balance Sheets, was $ 4,955 and $ 5,534 at June 30, 2023 and December 31, 2022, respectively.

During the quarters ended June 30, 2023 and 2022, the Company recorded a loss of $ 319 and $ 574 , respectively, from its equity method investments, and during the year to date ended June 30, 2023 and 2022, the Company recorded a loss of $ 579 and $ 180 , respectively, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarter and year to date ended June 30, 2023, the Company purchased $ 11,538 and $ 19,955 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

During the quarter and year to date ended June 30, 2022, the Company purchased $ 11,538 and $ 19,929 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

The investment in LMX, which is recorded in investment in joint ventures on the Condensed Consolidated Balance Sheets, was $ 5,343 and $ 5,534 at September 30, 2023 and December 31, 2022, respectively.

During the quarters ended September 30, 2023 and 2022, the Company recorded a gain of $ 388 and a loss of $ 856 , respectively, from its equity method investments, and during the year to date ended September 30, 2023 and 2022, the Company recorded a loss of $ 191 and $ 1,036 , respectively, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarter and year to date ended September 30, 2023, the Company purchased $ 10,223 and $ 30,178 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

During the quarter and year to date ended September 30, 2022, the Company purchased $ 8,265 and $ 28,194 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

Recently Adopted Accounting Standard Updates.

The Company did not adopt any new Accounting Standard Updates during the quarter ended June 30, 2023.

The Company did not adopt any new Accounting Standard Updates during the quarter ended September 30, 2023.

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.

5 unchanged sentences

The following table presents the Company’s sales by segment and major products and services:

Quarter Ended June 30, Year to Date Ended June 30,

Quarter Ended September 30, Year to Date Ended September 30,

2023 2022 2023 2022

33 unchanged sentences

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 of $ 324 .

The consideration paid at closing included a preliminary estimated purchase price adjustment.

During the quarter ended September 30, 2023, the Company finalized the net working capital adjustments, which decreased the cash consideration from $ 105,000 at closing to $ 104,638 at September 30, 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 6, 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 will be accounted for in accordance with U.S.

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 will be accounted for in accordance with U.S.

federal tax law.

36 unchanged sentences

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

During the quarter ended June 30, 2023, the Company incurred $ 1,500 of acquisition related costs for the Acquisition, which are included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Income.

During the quarter and year to date ended September 30, 2023, the Company incurred $ 314 and $ 1,814 of costs related to the Acquisition, which are included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Income.

Contingent Consideration.

3 unchanged sentences

The contingent consideration liability is measured on a quarterly basis and recorded at fair value.

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

There were no changes in the fair value measurement of the contingent consideration obligation for the quarter ended June 30, 2023.

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 quarter ended September 30, 2023 there was a $ 4,200 adjustment to the fair value measurement of the contingent consideration obligation.

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

5 unchanged sentences

The distributor relationships have a useful life of 20 years.

The amortization expense for the quarter and year to date ended June 30, 2023 was $ 610 and $ 1,128 , respectively.

The amortization expense for the quarter and year to date ended June 30, 2022 was $ 517 and $ 1,035 , respectively.

As of June 30, 2023, the expected future amortization expense related to definite-lived intangible assets is as follows:

The amortization expense for the quarter and year to date ended September 30, 2023 was $ 820 and $ 1,948 , respectively.

The amortization expense for the quarter and year to date ended September 30, 2022 was $ 518 and $ 1,553 , respectively.

As of September 30, 2023, the expected future amortization expense related to definite-lived intangible assets is as follows:

Remainder of 2023 $ 813

8 unchanged sentences

Acquisitions — 95,250 — 95,250

Balance, June 30, 2023

Balance, September 30, 2023

$ — $ 321,544 $ — $ 321,544

4 unchanged sentences

Acquisitions — 34,000 — 34,000

Balance, June 30, 2023

Balance, September 30, 2023

$ — $ 212,990 $ — $ 212,990

Planned Closure of the Atchison Distillery

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 anticipated closure date is January 2024.

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 quarter ended September 30, 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 quarter and year to date ended September 30, 2023, the Company recorded a $ 17,112 impairment of assets, which was recorded in impairment of long-lived assets and other on the Condensed Consolidated Statement of Income.

The impaired assets were recorded within the Distilling Solution segment.

Additionally, the Company recorded $ 1,222 of expenses related to severance costs, contract termination fees, and consulting fees, which were recorded in impairment of long-lived assets and other on the Condensed Consolidated Statement of Income for the quarter and year to date ended September 30, 2023.

Corporate Borrowings

1 unchanged sentence

Description (a)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Credit Agreement - Revolver, 6.42 % (variable rate) due 2026

12 unchanged sentences

Long-term debt $ 310,277 $ 224,735

(a) Interest rates are as of June 30, 2023.

(a) Interest rates are as of September 30, 2023.

(b) Loan fees are being amortized over the life of the debt instruments.

4 unchanged sentences

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

The Credit Agreement includes certain requirements and covenants with which the Company was in compliance at June 30, 2023.

The Credit Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2023.

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

As of June 30, 2023, the Company had $ 98,000 outstanding borrowings under the Credit Agreement, leaving $ 302,000 available.

As of September 30, 2023, the Company had $ 91,000 outstanding borrowings under the Credit Agreement, leaving $ 309,000 available.

Convertible Senior Notes.

7 unchanged sentences

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).

On July 29, 2021, Prudential provided the Company notice pursuant to Section 1.2 of the Note Purchase Agreement that Prudential has authorized an increase in the amount of additional Senior Secured Notes that may be issued under the uncommitted shelf facility under the Note Purchase Agreement from $ 105,000 to $ 140,000 , effective as of July 29, 2021.

The deadline for issuing any new notes under the shelf facility is August 23, 2023.

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 .

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

During 2017, the Company issued $ 20,000 of Series A Senior Secured Notes with a maturity date of August 23, 2027.

During 2019, the Company issued $ 20,000 of additional Senior Secured Notes with a maturity date of April 30, 2029.

The Note Purchase Agreement includes certain requirements and covenants with which the Company was in compliance at June 30, 2023 .

As of June 30, 2023, the Company had $ 13,600 of Series A Senior Secured Notes and $ 19,200 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 120,000 available of Senior Secured Notes.

The Note Purchase Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2023 .

As of September 30, 2023, the Company had $ 12,800 of Series A Senior Secured Notes and $ 18,400 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 218,800 available under the Note Purchase Agreement.

The Company’s tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter.

1 unchanged sentence

The Company’s quarterly effective tax rate can be subject to significant change due to the effect of discrete items arising in a given quarter.

Beginning in the second quarter of 2023, the estimated annual tax rate includes U.S.

entities acquired in the Penelope acquisition.

Income tax expense for the quarter and year to date ended June 30, 2023 was $ 10,804 and $ 20,459 , respectively, for an effective tax rate of 25.3 percent and 24.5 percent, respectively.

The effective tax rate for the quarter and year to date ended June 30, 2023 differed from the 21 percent U.S.

Beginning in the second quarter of 2023, the estimated annual tax rate includes the U.S.

entity acquired in the Penelope Acquisition.

Income tax expense for the quarter and year to date ended September 30, 2023 was $ 4,373 and $ 24,832 , respectively, for an effective tax rate of 25.0 percent and 24.6 percent, respectively.

The effective tax rate for the quarter and year to date ended September 30, 2023 differed from the 21 percent U.S.

federal statutory rate on pretax income primarily due to state income taxes and income taxes on foreign subsidiaries, partially offset by U.S.

state and federal tax credits and the deduction applicable to export activity.

The Penelope acquisition had an immaterial impact on the quarter and year to date effective tax rate and deferred taxes, including any valuation allowances related to deferred taxes and reserves for uncertain tax positions.

Income tax expense for the quarter and year to date ended June 30, 2022 was $ 7,339 and $ 18,504 , respectively, for an effective tax rate of 22.4 percent and 22.8 percent, respectively.

The effective tax rate for the quarter and year to date ended June 30, 2022 differed from the 21 percent U.S.

federal statutory rate on pretax income primarily due to state income taxes and income taxes on foreign subsidiaries, partially offset by state and federal tax credits, and the deduction applicable to export activity.

The increase in income tax expense for the quarter and year to date ended June 30, 2022 was primarily due to higher income before income taxes as compared to the prior year periods.

As a result of the planned closure of the Atchison Distillery, the Company incurred impairment expenses (see Note 5 for more details on the planned closure).

For the quarter ended September 30, 2023, the impairment had an immaterial impact on the effective tax rate;

however, it did result in a reduced income tax expense due to the decrease in income before income taxes when using the estimated annual effective rate calculation.

Income tax expense for the quarter and year to date ended September 30, 2022 was $ 7,533 and $ 26,037 , respectively, for an effective tax rate of 24.2 percent and 23.2 percent, respectively.

The effective tax rate for the quarter and year to date ended September 30, 2022 differed from the 21 percent U.S.

federal statutory rate on pretax income primarily due to state and foreign income taxes, partially offset by state and federal tax credits, and the deduction applicable to export activity.

The increase in income tax expense for the year to date ended September 30, 2022 was primarily due to higher income before income taxes as compared to the prior year periods.

Equity and EPS

The following table presents computations of basic and diluted EPS:

Quarter Ended June 30, Year to Date Ended June 30,

Quarter Ended September 30, Year to Date Ended September 30,

2023 2022 2023 2022

13 unchanged sentences

(a) Net income attributable to all stockholders.

(b) Participating securities included 226,684 and 189,297 unvested restricted stock units (“RSUs”) at June 30, 2023 and 2022, respectively.

(b) Participating securities included 226,410 and 176,398 unvested restricted stock units (“RSUs”) at September 30, 2023 and 2022, respectively.

1 unchanged sentence

The Convertible Senior Notes would only have a dilutive impact if the average market price per share during the quarter and year to date period exceeds the conversion price of $ 96.24 per share.

For the quarter ended June 30, 2023, the average market price per share during the quarter exceeded $ 96.24 per share;

however, the impact to diluted EPS calculation was less than $ 0.01 , which resulted in reported basic and diluted EPS being equal.

For the year to date ended June 30, 2023, the inclusion of the shares had a dilutive impact and were included in the diluted EPS calculation.

There was no dilutive impact for the quarter and year to date ended June 30, 2022.

Common Stock Share Activity.

9 unchanged sentences

Balance, June 30, 2023 437 22,014,374

Issuance of Common Stock — 822

Repurchase of Common Stock (a)

Balance, September 30, 2023 437 22,015,196

Shares Outstanding

7 unchanged sentences

Balance, June 30, 2022 437 21,992,751

Issuance of Common Stock — 606

Repurchase of Common Stock (a)

Balance, September 30, 2022 437 21,993,355

(a) The Common Stock repurchases were for tax withholding on equity-based compensation.

Commitments and Contingencies

There are various legal and regulatory proceedings involving the Company and its subsidiaries.

The Company and its subsidiaries are, from time to time, a party to legal and regulatory proceedings arising in the ordinary course of its business.

The Company accrues estimated costs for a contingency when management believes that a loss is probable and can be reasonably estimated.

4 unchanged sentences

the 2014 Equity Incentive Plan (as amended, the “2014 Plan”) and the 2014 Non-Employee Director Equity Incentive Plan (the “Directors’ Plan”).

As of June 30, 2023, 658,081 RSUs had been granted from the 1,500,000 shares approved under the 2014 Plan, and 137,840 shares had been granted from the 300,000 shares approved under the Directors’ Plan.

As of June 30, 2023, there were 226,684 unvested RSUs under the Company’s long-term incentive plans, all of which were participating securities (see Note 7).

As of September 30, 2023, 658,081 RSUs had been granted from the 1,500,000 shares approved under the 2014 Plan, and 138,662 shares had been granted from the 300,000 shares approved under the Directors’ Plan.

As of September 30, 2023, there were 226,410 unvested RSUs under the Company’s long-term incentive plans, all of which were participating securities (see Note 8).

Deferred Compensation Plan.

2 unchanged sentences

Realized and unrealized gains (losses) on deferred compensation plan investments were included as a component of other income (expense), net on the Company’s Condensed Consolidated Statements of Income.

For the quarter and year to date ended June 30, 2023, the Company had a gain on deferred compensation plan investments of $ 211 and $ 390 , respectively, and for the quarter and year to date ended June 30, 2022, the Company had a loss on deferred compensation plan investments of $ 489 and $ 828 , respectively.

For the quarter and year to date ended September 30, 2023, the Company had a loss on deferred compensation plan investments of $ 118 and a gain on deferred compensation plan investments of $ 272 , respectively.

For the quarter and year to date ended September 30, 2022, the Company had a loss on deferred compensation plan investments of $ 103 and $ 931 , respectively.

EDC Plan investments are classified as Level 1 in the fair value hierarchy since the investments trade with sufficient frequency and volume to enable the Company to obtain pricing information on an ongoing basis.

2 unchanged sentences

STI Plan deferral amounts are deposited, at the time of payment, into the EDC Plan by the Company and allocated by participants among Company-determined investment options.

At June 30, 2023 and December 31, 2022, the EDC Plan investments were $ 2,979 and $ 2,176 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan current liabilities were $ 650 and $ 510 at June 30, 2023 and December 31, 2022, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan non-current liabilities were $ 2,621 and $ 2,191 at June 30, 2023 and December 31, 2022, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets.

At September 30, 2023 and December 31, 2022, the EDC Plan investments were $ 2,878 and $ 2,176 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan current liabilities were $ 650 and $ 510 at September 30, 2023 and December 31, 2022, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan non-current liabilities were $ 2,615 and $ 2,191 at September 30, 2023 and December 31, 2022, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets.

Operating Segments

At June 30, 2023, the Company had three segments:

At September 30, 2023, the Company had three segments:

Distilling Solutions, Branded Spirits, and Ingredient Solutions.

8 unchanged sentences

The following table presents summarized financial information for each segment:

Quarter Ended June 30, Year to Date Ended June 30,

Quarter Ended September 30, Year to Date Ended September 30,

2023 2022 2023 2022

21 unchanged sentences

The following table allocates assets to each segment as of:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Identifiable Assets

5 unchanged sentences

Subsequent Events

On August 3, 2023, the Company announced a quarterly dividend payable to stockholders of record of the Company’s common stock, resulting in dividend equivalents payable to certain RSU holders, of $ 0.12 per share and per RSU.

The dividend and dividend equivalents are payable on September 1, 2023 to stockholders of record and certain RSU holders on August 18, 2023.

Planned Closure of the Atchison Distillery.

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 anticipated closure date is January 2024.

The Company currently expects to incur aggregate pre-tax charges of $ 23,000 to $ 31,000 for the year ending December 31, 2023 in connection with the closure of the Atchison Distillery.

On November 2, 2023, the Company announced a quarterly dividend payable to stockholders of record of the Company’s common stock, resulting in dividend equivalents payable to certain RSU holders, of $ 0.12 per share and per RSU.

The dividend and dividend equivalents are payable on December 1, 2023 to stockholders of record and certain RSU holders on November 17, 2023.

Related Party Transaction.

The Company leases bottling and warehousing facilities in St.

Louis, Missouri from Kemper-Themis, L.L.C.

(“Kemper”), which is 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 approval and the transaction is expected to close during the first quarter of 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.

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

What changed 10-Q

Item 1. Financial Statements