What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 81 added, 59 removed, 581 unchanged (19% 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,

2024 2023 2024 2023

27 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,

2024 2023 2024 2023

13 unchanged sentences

(Unaudited) (Dollars in thousands)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current Assets

Cash and cash equivalents $ 20,772 $ 18,388

Receivables (less allowance for credit loss, $ 1,475 at both June 30, 2024, and December 31, 2023)

Receivables (less allowance for credit loss, $ 1,475 at both September 30, 2024, and December 31, 2023)

130,436 144,286

34 unchanged sentences

authorized 40,000,000 shares;

issued 23,125,166 shares at June 30, 2024 and December 31, 2023;

and 21,987,685 and 22,016,113 shares outstanding at June 30, 2024 and December 31, 2023, respectively

issued 23,125,166 shares at September 30, 2024 and December 31, 2023;

and 21,952,581 and 22,016,113 shares outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 330,396 325,453

1 unchanged sentence

Accumulated other comprehensive loss ( 19 ) ( 397 )

Treasury stock, at cost, 1,137,481 and 1,109,053 shares at June 30, 2024 and December 31, 2023, respectively

Treasury stock, at cost, 1,172,585 and 1,109,053 shares at September 30, 2024 and December 31, 2023, respectively

( 31,128 ) ( 21,166 )

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 16,298 16,272

Impairment of long-lived assets and other 137 18,334

Share-based compensation 2,748 5,651

25 unchanged sentences

Principal payments on long-term debt ( 67,800 ) ( 18,000 )

Net cash provided by financing activities 6,721 89,462

Net cash provided by (used in) financing activities ( 18,048 ) 78,193

Effect of exchange rate changes on cash and cash equivalents 46 33

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For Year to Date Ended June 30, 2024

For Year to Date Ended September 30, 2024

(Dollars in thousands)

10 unchanged sentences

Other comprehensive loss — — — — ( 40 ) — — ( 40 )

— — — — ( 40 ) — — ( 40 )

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

7 unchanged sentences

Net income (loss) — — — 32,085 — — ( 68 ) 32,017

Other comprehensive income — — — — ( 116 ) — — ( 116 )

Other comprehensive loss — — — — ( 116 ) — — ( 116 )

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

5 unchanged sentences

4 6,715 329,713 587,265 ( 553 ) ( 28,687 ) ( 1,544 ) 892,913

Comprehensive income:

Net income (loss) — — — 23,905 — ( 43 ) 23,862

Other comprehensive income — — — — 534 — 534

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

— — — ( 2,666 ) — — — ( 2,666 )

Share-based compensation — — 742 — — — — 742

Stock shares awarded, forfeited, or vested — — ( 59 ) — — 59 — —

Stock shares repurchased — — — — — ( 2,500 ) — ( 2,500 )

Balance, September 30, 2024

$ 4 $ 6,715 $ 330,396 $ 608,504 $ ( 19 ) $ ( 31,128 ) $ ( 1,587 ) $ 912,885

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, 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

17 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, 2024, 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, 2023, 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, 2024, 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, 2023, 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, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Finished goods $ 50,712 $ 55,463

55 unchanged sentences

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

As of June 30, 2024, the Company determined that goodwill and indefinite-lived intangible assets were not impaired.

As of September 30, 2024, 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 $ 218,350 and $ 194,440 at June 30, 2024 and December 31, 2023, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 309,396 and $ 287,249 at June 30, 2024 and December 31, 2023, respectively.

Excluding the impact of the conversion feature of the Convertible Senior Notes, the fair value of the Company’s debt was $ 207,827 and $ 194,440 at September 30, 2024 and December 31, 2023, respectively.

The financial statement carrying value of total debt (net of unamortized loan fees) was $ 289,968 and $ 287,249 at September 30, 2024 and December 31, 2023, 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 $ 5,811 and $ 5,197 at June 30, 2024 and December 31, 2023, respectively.

During the quarter and year to date ended June 30, 2024, the Company recorded a gain of $ 910 and $ 614 , respectively, from its equity method investments, 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 recorded a loss of $ 319 and $ 579 , respectively, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarters ended June 30, 2024 and 2023, the Company purchased $ 6,906 and $ 11,538 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

During the year to date ended June 30, 2024 and 2023, the Company purchased $ 14,998 and $ 19,955 , 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 $ 6,643 and $ 5,197 at September 30, 2024 and December 31, 2023, respectively.

During the quarter and year to date ended September 30, 2024, the Company recorded a gain of $ 832 and $ 1,446 , respectively, from its equity method investments, 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 recorded a gain of $ 388 and a loss of $ 191 , respectively, which is recorded in other income (expense), net on the Condensed Consolidated Statements of Income.

During the quarters ended September 30, 2024 and 2023, the Company purchased $ 7,606 and $ 10,223 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

During the year to date ended September 30, 2024 and 2023, the Company purchased $ 22,604 and $ 30,178 , respectively, of finished goods from LMX and bulk beverage alcohol from the other 50 percent owner of DGL.

Related Party Transaction.

7 unchanged sentences

Recently Adopted Accounting Standard Updates.

The Company did not adopt any new Accounting Standard Updates (“ASUs”) during the quarter ended June 30, 2024.

The Company did not adopt any new Accounting Standard Updates (“ASUs”) during the quarter ended September 30, 2024.

Recently Issued Accounting Pronouncements.

17 unchanged sentences

The following table presents the Company’s sales disaggregated 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,

2024 2023 2024 2023

70 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 and year to date ended June 30, 2024, the Company incurred $ 15 and $ 86 , respectively, of costs related to 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, 2024, the Company incurred $ 15 and $ 101 , respectively, of costs related to the Acquisition, which are included in selling, general, and administrative expenses on the Condensed Consolidated Statements of Income.

Contingent Consideration.

4 unchanged sentences

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 and year to date ended June 30, 2024, there were $ 5,400 and $ 9,500 , respectively, in adjustments to the fair value measurement of the contingent consideration obligation, which were included in the change of fair value of contingent consideration on the Condensed Consolidated Statements of Income.

During the quarter and year to date ended September 30, 2024, there were $ 6,400 and $ 15,900 , respectively, in adjustments to the fair value measurement of the contingent consideration obligation, which were included in the change of fair value of contingent consideration on the Condensed Consolidated Statements of Income.

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, 2024 was $ 814 and $ 1,627 , respectively.

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

As of June 30, 2024, 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, 2024 was $ 814 and $ 2,441 , respectively.

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

As of September 30, 2024, the expected future amortization expense related to definite-lived intangible assets is as follows:

Remainder of 2024 $ 814

3 unchanged sentences

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

The carrying amount of goodwill, which relates to the Branded Spirits segment, was $ 321,544 at both June 30, 2024 and December 31, 2023.

The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $ 212,990 at both June 30, 2024 and December 31, 2023.

The carrying amount of goodwill, which relates to the Branded Spirits segment, was $ 321,544 at both September 30, 2024 and December 31, 2023.

The carrying amount of trade name indefinite-lived intangible assets, which relates to the Branded Spirits segment, was $ 212,990 at both September 30, 2024 and December 31, 2023.

Corporate Borrowings

1 unchanged sentence

Description (a)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Credit Agreement - Revolver, 6.00 % (variable rate) due 2026

4 unchanged sentences

Series A Senior Secured Notes, 3.53 % (fixed rate) due 2027

10,400 12,000

Senior Secured Notes, 3.80 % (fixed rate) due 2029

6 unchanged sentences

Long-term debt $ 283,568 $ 280,849

(a) Interest rates are as of June 30, 2024.

(a) Interest rates are as of September 30, 2024.

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

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, 2024.

The Credit Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2024.

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

As of June 30, 2024, the Company had $ 88,000 outstanding borrowings under the Credit Agreement, leaving $ 312,000 available.

As of September 30, 2024, the Company had $ 70,000 outstanding borrowings under the Credit Agreement, leaving $ 330,000 available.

Convertible Senior Notes.

12 unchanged sentences

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, 2024 .

As of June 30, 2024, the Company had $ 10,400 of Series A Senior Secured Notes and $ 16,000 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 223,600 available under the Note Purchase Agreement.

The Note Purchase Agreement includes certain requirements and covenants with which the Company was in compliance at September 30, 2024 .

As of September 30, 2024, the Company had $ 9,600 of Series A Senior Secured Notes and $ 15,200 of additional Senior Secured Notes outstanding under the Note Purchase Agreement, leaving $ 225,200 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.

Income tax expense for the quarter and year to date ended June 30, 2024 was $ 10,108 and $ 16,370 , respectively, for an effective tax rate of 24.0 percent and 23.7 percent, respectively.

The effective tax rate for the quarter and year to date ended June 30, 2024 differed from the 21 percent U.S.

Income tax expense for the quarter and year to date ended September 30, 2024 was $ 7,554 and $ 23,924 , respectively, for an effective tax rate of 24.0 percent and 23.8 percent, respectively.

The effective tax rate for the quarter and year to date ended September 30, 2024 differed from the 21 percent U.S.

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

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

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.

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.

2 unchanged sentences

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,

2024 2023 2024 2023

13 unchanged sentences

(a) Net income attributable to all stockholders.

(b) Participating securities included 243,243 and 226,684 unvested restricted stock units (“RSUs”) at June 30, 2024 and 2023, respectively.

(b) Participating securities included 243,243 and 226,410 unvested restricted stock units (“RSUs”) at September 30, 2024 and 2023, respectively.

5 unchanged sentences

The repurchase program has no expiration date and may be modified, suspended, or discontinued at any time by the Company without prior notice.

During the quarter and year to date ended June 30, 2024, the Company repurchased 33,363 and 92,447 shares, respectively, of Common Stock for approximately $ 2,500 and $ 7,500 , respectively.

As of June 30, 2024, there was approximately $ 92,500 remaining under the share repurchase program.

During the quarter and year to date ended September 30, 2024, the Company repurchased 35,913 and 128,360 shares, respectively, of Common Stock for approximately $ 2,500 and $ 10,000 , respectively.

As of September 30, 2024, there was approximately $ 90,000 remaining under the share repurchase program.

Common Stock Share Activity.

9 unchanged sentences

Balance, June 30, 2024 437 21,987,685

Issuance of Common Stock — 809

Repurchase of Common Stock (a)

Balance, September 30, 2024 437 21,952,581

Shares Outstanding

6 unchanged sentences

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

(a) 59,084 and 33,363 shares that were repurchased during the quarter ended March 31, 2024 and June 30, 2024, respectively, pursuant to the Company’s share repurchase program.

Issuance of Common Stock — 822

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

(a) 59,084 , 33,363 and 35,913 shares that were repurchased during the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, respectively, pursuant to the Company’s share repurchase program.

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

8 unchanged sentences

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

As of June 30, 2024, 1,330,041 shares remain available for issuance under the 2024 Plan.

As of September 30, 2024, 1,329,232 shares remain available for issuance under the 2024 Plan.

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, 2024, the Company had a gain on deferred compensation plan investments of $ 34 and $ 286 , respectively, and 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.

For the quarter and year to date ended September 30, 2024, the Company had a gain on deferred compensation plan investments of $ 196 and $ 482 , respectively, and 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.

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, 2024 and December 31, 2023, the EDC Plan investments were $ 3,458 and $ 2,916 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan current liabilities were $ 1,796 and $ 74 at June 30, 2024 and December 31, 2023, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan non-current liabilities were $ 1,803 and $ 3,314 at June 30, 2024 and December 31, 2023, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets.

At September 30, 2024 and December 31, 2023, the EDC Plan investments were $ 3,659 and $ 2,916 , respectively, which were recorded in other assets on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan current liabilities were $ 1,796 and $ 74 at September 30, 2024 and December 31, 2023, respectively, which were included in accrued expenses and other on the Company’s Condensed Consolidated Balance Sheets.

The EDC Plan non-current liabilities were $ 2,003 and $ 3,314 at September 30, 2024 and December 31, 2023, respectively, and were included in other noncurrent liabilities on the Company’s Condensed Consolidated Balance Sheets.

Operating Segments

At June 30, 2024, the Company had three segments:

At September 30, 2024, the Company had three segments:

Distilling Solutions, Branded Spirits, and Ingredient Solutions.

11 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,

2024 2023 2024 2023

21 unchanged sentences

The following table allocates assets to each segment as of:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Identifiable Assets

5 unchanged sentences

Subsequent Events

On August 1, 2024, 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 August 30, 2024 to stockholders of record and RSU holders on August 16, 2024.

On October 31, 2024, 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 November 29, 2024 to stockholders of record and RSU holders on November 15, 2024.

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