The supplier of grain-based starches, proteins and food grade alcohols has restructured significantly over the past year to combat excessive costs.
Last year the Kansas-based ingredients business reported a net loss of $11.7m and has since sought to reduce production of commodity type ingredients and focus instead on value-added products.
New product mix
Talking about the new product mix, CEO Tim Newkirk said: “We aim to be the first call in dietary fiber, protein isolates and concentrates, and textured proteins. There is also a renewed drive to become a more valuable partner with our customers in the food grade alcohol markets.”
With the size and scope of the business narrowed, Newkirk said: “MGP Ingredients is back to being a niche player.”
Financial results
As a result of the changes, which included a 55 per cent reduction in the size of the workforce, fourth quarter sales dropped 52.8 percent to $15.5m and sales for the fiscal year fell to $80.1m from $100m last year.
MGP Ingredients said the new product mix and cost structure created by the restructuring and resulting sales drop has already had a positive effect on profits.
Illustrating the point, the company said fourth quarter pre-tax income from the ingredients segment was $1.4m compared to a pre-tax loss of $7.9m last year. Meanwhile, net loss across the whole business in the quarter reduced from $10m last year to $2.9m this year.
Despite the improvements to the bottom line in the fourth quarter, MGP Ingredients incurred a net loss for 2009 of $69.1m, compared to a loss of $11.7m last year. Charges related to restructuring were blamed for this increase in losses.