MGP Ingredients swings to $134.8M loss on branded spirits asset write-downs

MGP Ingredients (NASDAQ:MGPI) reported a substantial net loss for the first quarter ended March 31, 2026, as the company faced a dual challenge of declining sales and significant asset write-downs.

The Atchison, Kansas-based provider of branded and distilled spirits saw consolidated sales decrease 13% to $106.4 million, reflecting broader volatility and destocking trends within the global spirits market.

The company's bottom-line results were heavily impacted by a non-cash event.

MGP Ingredients reported a net loss of $134.8 million, a sharp contrast to the prior year.

This deficit was primarily attributed to $179.5 million in discrete, non-cash adjustments to reduce the carrying amount of goodwill and other long-lived assets within its Branded Spirits segment.

On an adjusted basis, which excludes these impairments, net income stood at $3.3 million, a 57% decrease compared to the first quarter of 2025.

Profitability metrics followed a similar downward trajectory.

Consolidated gross profit fell 22% to $33.6 million, with gross margins contracting by 400 basis points to 31.6%.

Adjusted EBITDA for the quarter was $15 million, representing a 31% decline year-over-year.

Consequently, basic earnings per share plummeted to a loss of $(6.30), while adjusted basic EPS fell 58% to $0.15.

In response to the tightening industry landscape, management took decisive steps to preserve liquidity and optimize its financial profile.

Capital expenditures were slashed by 75% to just $2 million.

Despite the reported GAAP loss, the company maintained a manageable balance sheet, ending the quarter with a net debt leverage ratio of approximately 2.1x.