MGP Amends Credit Pacts to Shield $20M in Receivable Losses From Covenants

MGP Ingredients (Nasdaq: MGPI) is an Atchison, Kansas-based producer of distilled spirits and specialty food ingredients operating through three segments: Branded Spirits, which includes Penelope Bourbon, Yellowstone, Rebel, and Remus; Distilling Solutions, which sells bulk whiskey and warehouse services; and Ingredient Solutions, which sells specialty wheat starches and proteins. The company carries a market capitalization of approximately $370.9 million.

The past eighteen months have been punishing. Full-year 2025 consolidated sales fell 24% to $536.4 million and the company posted a GAAP net loss of $107.8 million, driven primarily by a $152.6 million non-cash goodwill impairment in the Branded Spirits segment. The first quarter of 2026 added another $179.5 million non-cash impairment, and the cumulative GAAP net loss for the six months ended June 30, 2026 reached $122.8 million. The company's Distilling Solutions segment has faced a structural headwind as the American whiskey market works through elevated inventories, with brown goods sales down more than 50% year-over-year in both Q1 and Q2 2026. In May 2026, MGP temporarily idled distilling operations at its Limestone Branch Distillery and Lux Row Distillers in Kentucky, affecting 33 employees, with a return to operations anticipated no earlier than twelve months later.

Despite the losses, management has maintained its full-year 2026 adjusted EBITDA guidance of $90 million to $98 million and continued paying a $0.12 quarterly dividend. Net debt leverage has climbed sharply: 1.8x at September 30, 2025, 2.0x at December 31, 2025, 2.1x at March 31, 2026, and 3.5x at June 30, 2026. The primary driver of that increase was a $145 million draw on the revolving credit facility in the first half of 2026, the bulk of which funded the $110.8 million earnout payment related to the Penelope Bourbon LLC acquisition.