MGP INGREDIENTS INC

Previous wording

All forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. For information on these risks and uncertainties and other factors that could affect the Company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K for the year ended December 31, 2023, this Report, and our other filings with the Securities and Exchange Commission (the “SEC”). Forward looking statements in this Report are made as of the date of this Report, and we undertake no obligation to update any forward-looking statements or information made in this Report, except as required by law.

Current wording

All forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. For information on these risks and uncertainties and other factors that could affect the Company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our Annual Report on Form 10-K for the year ended December 31, 2023, our Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2024, this Report, and our other filings with the Securities and Exchange Commission (the “SEC”). Forward looking statements in this Report are made as of the date of this Report, and we undertake no obligation to update any forward-looking statements or information made in this Report, except as required by law.

Previous wording

Sales - Sales for the quarter ended June 30, 2024 were $190,805, a decrease of 9 percent compared to the year-ago quarter, which was the result of decreased sales in the Distilling Solutions and Ingredient Solution segments, partially offset by increased sales in the Branded Spirits segment. Within the Distilling Solutions segment, sales were down 20 percent due to decreased sales of white goods and other co-products in connection with the December 2023 closure of our distillery located in Atchison, Kansas (the “Atchison Distillery”). Within the Ingredient Solutions segment, sales were down 3 percent, primarily due to decreased sales of commodity wheat starches and specialty wheat proteins. Within the Branded Spirits segment, sales were up 11 percent, primarily due to increased sales of brands in the premium plus price tier (see “Segment Results”).

Current wording

Sales - Sales for the quarter ended September 30, 2024 were $161,461, a decrease of 24 percent compared to the year-ago quarter, which was the result of decreased sales in each segment. Within the Distilling Solutions segment, sales were down 36 percent due to decreased sales of white goods and other co-products in connection with the December 2023 closure of our distillery located in Atchison, Kansas (the “Atchison Distillery”), as well as decreased brown goods sales. Within the Ingredient Solutions segment, sales were down 18 percent, due to decreased sales of specialty wheat proteins, commodity wheat starches, and specialty wheat starches. Within the Branded Spirits segment, sales were down 6 percent, primarily due to decreased sales of brands in the mid and value price tiers (see “Segment Results”).

Previous wording

Gross profit -Gross profit for the quarter ended June 30, 2024 was $83,232, an increase of 9 percent compared to the year-ago quarter. The increase was driven by an increase in gross profit in the Branded Spirits and Distilling Solutions segments, partially offset by a decrease in gross profit in the Ingredient Solutions segment. Within the Branded Spirits segment, gross profit increased $7,630, or 29 percent. Within the Distilling Solutions segment, gross profit increased by $3,795, or 10 percent Within the Ingredient Solutions segment, gross profit decreased by $4,488, or 39 percent (see “Segment Results”).

Current wording

Gross profit -Gross profit for the quarter ended September 30, 2024 was $65,815, a decrease of 10 percent compared to the year-ago quarter. The decrease was driven by a decrease in gross profit in the Ingredient Solutions and Distilling Solutions segments, partially offset by an increase in gross profit in the Branded Spirits segment. Within the Ingredient Solutions segment, gross profit decreased by $6,403, or 58 percent. Within the Distilling Solutions segment, gross profit declined by $4,636, or 14 percent. Within the Branded Spirits segment, gross profit increased $3,406, or 12 percent (see “Segment Results”).

Previous wording

Advertising and promotion expenses -Advertising and promotion expenses for the quarter ended June 30, 2024 were $11,665, an increase of 35 percent compared to the year-ago quarter, primarily driven by increased advertising and promotion investment in the Branded Spirits segment, specifically in the premium plus price tier.

Current wording

Advertising and promotion expenses -Advertising and promotion expenses for the quarter ended September 30, 2024 were $9,647, a slight increase of 1 percent compared to the year-ago quarter.

Previous wording

SG&A expenses -SG&A expenses for the quarter ended June 30, 2024 were $22,759, a slight decrease of 3 percent compared to the year-ago quarter.

Current wording

SG&A expenses -SG&A expenses for the quarter ended September 30, 2024 were $17,204, a decrease of 20 percent compared to the year-ago quarter. The decrease in SG&A expenses was primarily due to reduced incentive compensation expenses.

Previous wording

Operating income -Operating income for the quarter ended June 30, 2024 decreased to $43,387 from $44,143 for the quarter ended June 30, 2023, primarily due to the change in fair value of the contingent consideration of $5,400 related to the acquisition of Penelope, the decrease in gross profit in the Ingredient Solutions segment, and the increase in advertising and promotion expense. These decreases were partially offset by an increase in gross profit in the Branded Spirits and Distilling Solutions segments, and lower SG&A expenses.

Current wording

Operating income -Operating income for the quarter ended September 30, 2024 increased to $32,564 from $19,839 for the quarter ended September 30, 2023, primarily as a result of the 2023 impairment of long-lived assets and other expenses of $18,334 related to the closure of the Atchison Distillery that did not recur during the quarter ended September 30, 2024. Additionally, the increase in operating income was due to the lower SG&A expenses and the increase in gross profit in the Branded Spirits segment. These increases were partially offset by decreases in gross profit in the Ingredient Solutions and Distilling Solutions segments.

Previous wording

Income tax expense - Income tax expense for the quarter ended June 30, 2024 was $10,108, for an effective tax rate of 24.0 percent. Income tax expense for the quarter ended June 30, 2023 was $10,804, for an effective tax rate of 25.3 percent. The decrease in income tax expense, quarter versus quarter, was due to lower income before income taxes. The decrease in effective tax rate, quarter versus quarter, was primarily due to larger tax credits than in the prior year quarter.

Current wording

Income tax expense - Income tax expense for the quarter ended September 30, 2024 was $7,554, for an effective tax rate of 24.0 percent. Income tax expense for the quarter ended September 30, 2023 was $4,373, for an effective tax rate of 25.0 percent. The increase in income tax expense, quarter versus quarter, was due to higher income before income taxes. The decrease in effective tax rate, quarter versus quarter, was primarily due to larger tax credits than in the prior year.

Previous wording

Earnings per common share (“EPS”) -Basic and Diluted EPS was $1.43 for the quarter ended June 30, 2024, compared to $1.44 for the quarter ended June 30, 2023. The change in basic and diluted EPS, quarter versus quarter, was primarily due to a decrease in operating income, increase in interest expense, net, partially offset by an increase in other income (expense), net.

Current wording

Earnings per common share (“EPS”) -Basic and Diluted EPS was $1.07 for the quarter ended September 30, 2024, compared to $0.59 and $0.58, respectively for the quarter ended September 30, 2023. The change in basic and diluted EPS, quarter versus quarter, was primarily due to an increase in operating income and the change in other income (expense), net.

Previous wording

Sales - Sales for the year to date ended June 30, 2024 were $361,368, a decrease of 12 percent compared to the year-ago period, which was the result of decreased sales in the Distilling Solutions segment, partially offset by increased sales in the Ingredient Solutions segment. Sales of Branded Spirits were consistent with sales from the year ago period. Within the Distilling Solutions segment, sales were down 23 percent due to decreased sales of white goods and other co-products in connection with the December 2023 closure of the Atchison Distillery. Within the Ingredient Solutions segment, sales were up 5 percent, primarily due to increased sales of specialty wheat starches (see “Segment Results”).

Current wording

Sales - Sales for the year to date ended September 30, 2024 were $522,829, a decrease of 16 percent compared to the year-ago period, which was the result of decreased sales in each segment. Within the Distilling Solutions segment, sales were down 27 percent primarily due to decreased sales of white goods and other co-products in connection with the December 2023 closure of the Atchison Distillery. Sales of Branded Spirits were down 2 percent, primarily due to decreased sales of brands within the mid and value price tiers. Within the Ingredient Solutions segment, sales were down 3 percent, primarily due to decreased sales of specialty wheat proteins and commodity wheat starches (see “Segment Results”).

Previous wording

Gross profit -Gross profit for the year to date ended June 30, 2024 was $146,027, which was consistent with the year-ago period. In the Branded Spirits segment, gross profit increased by $5,569, or 11 percent. In the Distilling Solutions segment, gross profit increased by $4,850, or 7 percent. In the Ingredient Solutions segment, gross profit decreased by $10,511, or 44 percent (see “Segment Results”).

Current wording

Gross profit -Gross profit for the year to date ended September 30, 2024 was $211,842, a decrease of 4 percent compared to the year-ago period. The decrease was driven by a decrease in gross profit in the Ingredient Solutions segment, partially offset by an increase in gross profit in the Branded Spirits segment. In the Ingredient Solutions segment, gross profit decreased by $16,914, or 48 percent. In the Branded Spirits segment, gross profit increased by $8,975, or 11 percent. In the Distilling Solutions segment, gross profit was consistent with the year-ago period (see “Segment Results”).

Previous wording

Advertising and promotion expenses -Advertising and promotion expenses for the year to date ended June 30, 2024 were $20,348, an increase of 24 percent compared to the year-ago period, primarily driven by increased advertising and promotion investment in the Branded Spirits segment, specifically in the premium plus price tier.

Current wording

Advertising and promotion expenses -Advertising and promotion expenses for the year to date ended September 30, 2024 were $29,995, an increase of 16 percent compared to the year-ago period, primarily driven by increased advertising and promotion investment in the Branded Spirits segment, specifically in the premium plus price tier.

Previous wording

SG&A expenses -SG&A expenses for the year to date ended June 30, 2024 were $43,738, a slight decrease of 1 percent compared to the year-ago period.

Current wording

SG&A expenses -SG&A expenses for the year to date ended September 30, 2024 were $60,942, a decrease of 7 percent compared to the year-ago period. The decrease in SG&A expenses was primarily due to reduced incentive compensation expenses.

Previous wording

Operating income -Operating income for the year to date ended June 30, 2024 decreased to $72,304 from $85,702 for the year to date period ended June 30, 2023, primarily due to the decrease in gross profit in the Ingredient Solutions segment, the change in fair value of the contingent consideration of $9,500 related to the Penelope acquisition, and the increase in advertising and promotion expense. These decreases were partially offset by increased gross profit in the Branded Spirits and Distilling Solutions segments.

Current wording

Operating income -Operating income for the year to date ended September 30, 2024 decreased to $104,868 from $105,541 for the year to date period ended September 30, 2023, primarily due to the decrease in gross profit in the Ingredient Solutions segment, the change in fair value of the contingent consideration related to the Penelope acquisition, and the increase in advertising and promotion expenses. These decreases were partially offset by the impairment of assets and other expenses in the year ago period related to the closure of the Atchison Distillery which was closed in December 2023, increased gross profit in the Branded Spirits segment, and a decrease in SG&A expenses.

Previous wording

Income tax expense - Income tax expense for the year to date ended June 30, 2024 was $16,370, for an effective tax rate of 23.7 percent. Income tax expense for the year to date ended June 30, 2023, was $20,459, for an effective tax rate of 24.5 percent. The decrease in income tax expense, year to date versus year to date, was due to lower income before income taxes. The decrease in effective tax rate, year versus year, was primarily due to larger tax credits than in the prior year period.

Current wording

Income tax expense - Income tax expense for the year to date ended September 30, 2024 was $23,924, for an effective tax rate of 23.8 percent. Income tax expense for the year to date ended September 30, 2023, was $24,832, for an effective tax rate of 24.6 percent. The decrease in income tax expense, year to date versus year to date, was due to the decrease in effective tax rate and lower income before income taxes.

Previous wording

Total sales of the Distilling Solutions segment for the quarter ended June 30, 2024 decreased by $23,477, or 20 percent, compared to the prior year quarter. The decrease in sales of the Distilling Solutions segment is primarily related to the decrease in sales volume of white goods and other co-products, which was primarily due to the closure of the Atchison Distillery during December 2023. Sales of brown goods increased primarily due to an increase in sales volume, partially offset by a decrease in net price/mix (as defined in the table above).

Current wording

Total sales of the Distilling Solutions segment for the quarter ended September 30, 2024 decreased by $39,934, or 36 percent, compared to the prior year quarter. The decrease in sales of the Distilling Solutions segment is primarily related to the decrease in sales volume of white goods and other co-products, which was due to the closure of the Atchison Distillery during December 2023. Sales of brown goods decreased primarily due to a decrease in net price/mix and decreased sales volume (as defined in the table above). The brown goods decline was primarily the result of softening American whiskey category trends and elevated industry-wide barrel inventories, leading to instances of customer contract non-performance that put pressure on our brown goods business with a larger impact on our smaller, craft customer base. We expect these trends to continue, which may impact our future results of operations.

Previous wording

Gross profit increased quarter versus quarter by $3,795, or 10 percent. Gross margin for the quarter ended June 30, 2024 increased to 45.5 percent from 33.1 percent for the prior year quarter. The increase in gross profit was primarily due to the positive impact the closure of the Atchison Distillery had on white goods and other co-products’ gross profit. The increase was also due to an increase in warehouse service sales and brown goods sales.

Current wording

Gross profit decreased quarter versus quarter by $4,636, or 14 percent. Gross margin for the quarter ended September 30, 2024 increased to 39.8 percent from 29.8 percent for the prior year quarter. The decrease in gross profit was primarily due to a decrease in brown goods sales due to decreases in net price/mix and sales volumes of brown goods, partially offset by lower average unit costs. This was partially offset by the positive impact the closure of the Atchison Distillery had on white goods and other co-products’ gross profit.

Previous wording

Total sales of the Distilling Solutions segment for the year to date ended June 30, 2024 decreased by $51,848, or 23 percent compared to the year-ago period. The decrease in sales of the Distilling Solutions segment is primarily related to the decrease in sales volume of white goods and other co-products, which was primarily due to the closure of the Atchison Distillery during December 2023. This decrease was partially offset by increased sales of warehouse services. Brown goods sales were consistent with prior year, with increased sales volume largely offset by a decrease in net price/mix (as defined in table above).

Current wording

Total sales of the Distilling Solutions segment for the year to date ended September 30, 2024 decreased by $91,782, or 27 percent compared to the year-ago period. The decrease in sales of the Distilling Solutions segment is primarily related to the decrease in sales volume of white goods and other co-products, which was due to the closure of the Atchison Distillery during December 2023. The decrease in brown goods was primarily related to a decrease in net price/mix (as defined above), partially offset by increased sales volume. These decreases were partially offset by increased sales of warehouse services.

Previous wording

Gross profit for the year to date ended June 30, 2024 increased by $4,850, or 7 percent compared to the year-ago period. Gross margin for the year to date ended June 30, 2024 increased to 43.0 percent from 31.2 percent for the prior year period. The increase in gross profit was primarily due to the positive impact the closure of the Atchison Distillery had on white goods and other co-products’ gross profit. Additionally, the increase was also due to an increase in warehouse service sales and brown goods sales.

Current wording

Gross profit for the year to date ended September 30, 2024 increased by $214 compared to the year-ago period. Gross margin for the year to date ended September 30, 2024 increased to 42.1 percent from 30.7 percent for the prior year period. The increase in gross profit was primarily due to the positive impact the closure of the Atchison Distillery had on white goods and other co-products’ gross profit. Additionally, the increase was due to an increase in warehouse services sales. These increases were partially offset by decreased net price/mix of brown goods.

Previous wording

Gross profit decreased quarter versus quarter by $4,488, or 39 percent. Gross margin for the quarter ended June 30, 2024 decreased to 21.4 percent from 33.6 percent for the prior year quarter. The decrease in gross profit was primarily driven by higher input costs across all product categories. The increase in input costs is driven primarily by the removal of the intercompany credit for the waste starch slurry by-product since the closure of the Atchison Distillery, as well as other costs incurred to ready the waste starch for commercial sale. Additionally, we incurred incremental costs for the new extrusion manufacturing facility during the quarter.

Current wording

Gross profit decreased quarter versus quarter by $6,403, or 58 percent. Gross margin for the quarter ended September 30, 2024 decreased to 17.6 percent from 33.8 percent for the prior year quarter. The decrease in gross profit was primarily driven by increased input costs primarily due to the removal of the intercompany credit for the waste starch slurry by-product since the closure of the Atchison Distillery, as well as other costs incurred to ready the waste starch for commercial sale. Additionally, the decrease in gross profit was attributable to decreased sales volume of specialty wheat proteins.

Previous wording

Total sales of the Ingredient Solutions segment for the quarter ended June 30, 2024 decreased by $1,144, or 3 percent, compared to the prior year quarter. The decrease was primarily driven by decreased sales volume and net price/mix of commodity wheat starches and specialty wheat proteins. These decreases were partially offset by higher sales volume of specialty wheat starches.

Current wording

Total sales of the Ingredient Solutions segment for the year to date ended September 30, 2024 decreased by $2,517, or 3 percent, compared to the prior year period. The decrease was primarily driven by decreased net price/mix across all product categories, as well as a decrease in sales volume of specialty wheat protein primarily due to continued export market headwinds. These decreases were partially offset by an increase in sales volume of specialty wheat starches.

Previous wording

Gross profit decreased by $10,511, or 44 percent for the year to date ended June 30, 2024 compared to the prior year period. Gross margin for the year to date ended June 30, 2024 decreased to 19.3 percent from 36.4 percent for the prior year period. The decrease in gross profit was primarily driven by higher input costs across all product categories. The increase in input costs is driven primarily by the removal of the intercompany credit for the waste starch slurry by-product since the closure of the Atchison Distillery, as well as other costs incurred to ready the waste starch for commercial sale. Additionally, we incurred incremental costs for the new extrusion manufacturing facility during the year to date period.

Current wording

Gross profit decreased by $16,914, or 48 percent for the year to date ended September 30, 2024 compared to the prior year period. Gross margin for the year to date ended September 30, 2024 decreased to 18.8 percent from 35.5 percent for the prior year period. The decrease in gross profit was primarily driven by higher input costs associated with the removal of the intercompany credit for the waste starch slurry by-product since the closure of the Atchison Distillery, as well as other costs incurred to ready the waste starch for commercial sale. Additionally, we incurred incremental costs for the new extrusion manufacturing facility during the year to date period. The decrease in gross profit was also attributable to decreased sales volume of specialty wheat proteins.

Previous wording

Cash increased $2,623 for the year to date ended June 30, 2024, compared to a decrease of $25,930 for the year to date ended June 30, 2023, for a net increase in cash of $28,553, period versus period.

Current wording

Cash increased $2,384 for the year to date ended September 30, 2024, compared to a decrease of $19,859 for the year to date ended September 30, 2023, for a net increase in cash of $22,243, period versus period.

Previous wording

Operating Activities. Cash provided by operating activities for the year to date ended June 30, 2024 was $29,582. The cash provided by operating activities resulted primarily from net income of $52,601, adjustments for non-cash or non-operating charges of $21,745, including depreciation and amortization, the change in fair value of contingent consideration, and share-based compensation, partially offset by cash used in operating assets and liabilities of $44,764. The primary drivers of the changes in operating assets and liabilities were $14,766 use of cash related to increased accounts receivables net, due to the timing of sales and customer payments during the year to date period, $11,754 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, $10,738 use of cash related to accrued expenses and other, which related to the incentive compensation payout during the year to date period, and $6,345 use of cash related to a decrease in accounts payable due to timing of payments.

Current wording

Operating Activities. Cash provided by operating activities for the year to date ended September 30, 2024 was $73,512. The cash provided by operating activities resulted primarily from net income of $76,463, adjustments for non-cash or non-operating charges of $32,845, including depreciation and amortization, the change in fair value of contingent consideration, and share-based compensation, partially offset by cash used in operating assets and liabilities of $35,796. The primary drivers of the changes in operating assets and liabilities were $24,979 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, $10,627 use of cash related to a decrease in accounts payable due to timing of payments, $9,935 related to accrued expenses and other, which related to a decrease in our incentive compensation accrual, partially offset by $13,979 cash provided by decreased accounts receivables, net, due to the timing of sales and customer payments during the year to date period as well as the closure of the Atchison Distillery in December 2023.

Previous wording

Cash provided by operating activities for the year to date ended June 30, 2023 was $20,156. The cash provided by operating activities resulted primarily from net income of $62,996, adjustments for non-cash or non-operating charges of $17,041, including depreciation and amortization and share-based compensation, partially offset by cash used in operating assets and liabilities, net of the effects of acquisition, of $59,881. The primary drivers of the changes in operating assets and liabilities were $41,020 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate and finished goods inventory, $35,833 use of cash related to increased accounts receivable, net due to timing of sales and customer payments during the quarter, and $7,048 use of cash related to a decrease in accrued expenses and other, primarily due to incentive compensation expense. These uses of cash were partially offset, primarily by $22,328 cash provided by an increase in accounts payable due to timing of payments.

Current wording

Cash provided by operating activities for the year to date ended September 30, 2023 was $48,605. The cash provided by operating activities resulted primarily from net income of $76,084, adjustments for non-cash or non-operating charges of $42,912, including impairment of long-lived assets and other, depreciation and amortization, share-based compensation and the change in fair value of contingent consideration, partially offset by cash used in operating assets and liabilities, net of the effects of acquisition, of $70,391. The primary drivers of the changes in operating assets and liabilities were $42,015 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, $14,980 use of cash related to increased accounts receivable, net, due to timing of sales and customer payments during the quarter, and $10,069 use of cash related to a decrease in accounts payable due to timing of payments.

Previous wording

Investing Activities. Cash used in investing activities for the year to date ended June 30, 2024 was $33,657, which primarily resulted from additions to property, plant, and equipment of $33,397 (see “Capital Spending”). Cash used in investing activities for the year to date ended June 30, 2023 was $135,589, which primarily resulted from $104,398 related to the acquisition of Penelope, net of cash acquired, and additions to property, plant, and equipment of $30,055 (see “Capital Spending”).

Current wording

Investing Activities. Cash used in investing activities for the year to date ended September 30, 2024 was $53,126, which primarily resulted from additions to property, plant, and equipment of $52,850 (see “Capital Spending”). Cash used in investing activities for the year to date ended September 30, 2023 was $146,690, which primarily resulted from $103,712 related to the acquisition of Penelope, net of cash acquired, and additions to property, plant, and equipment of $42,062 (see “Capital Spending”).

Previous wording

Capital Spending. We manage capital spending to support our business growth plans. We have incurred $22,560 and $23,863 of capital expenditures and have paid $33,397 and $30,055 for capital expenditures for the year to date ended June 30, 2024 and 2023, respectively. The difference between the amount of capital expenditures incurred and amount paid is due to the change in capital expenditures in accounts payable. We expect approximately $85,800 in capital expenditures in 2024, which includes capital expenditures for facility improvement and expansion, facility sustaining projects, and environmental health and safety projects.

Current wording

Capital Spending. We manage capital spending to support our business growth plans. We have incurred $43,503 and $36,879 of capital expenditures and have paid $52,850 and $42,062 for capital expenditures for the year to date ended September 30, 2024 and 2023, respectively. The difference between the amount of capital expenditures incurred and amount paid is due to the change in capital expenditures in accounts payable. We expect approximately $78,000 in capital expenditures in 2024, which includes capital expenditures for facility improvement and expansion, facility sustaining projects, and environmental health and safety projects.

Previous wording

Financing Activities. Cash provided by financing activities for the year to date ended June 30, 2024 was $6,721, due to net proceeds on debt of $21,800 (see “Long-Term and Short-Term Debt”), partially offset by repurchases of Common Stock of $9,735 (see “Treasury Purchases” and “Share Repurchase”), and payments of dividends and dividend equivalents of $5,344 (see “Dividends and Dividend Equivalents”).

Current wording

Financing Activities. Cash used in financing activities for the year to date ended September 30, 2024 was $18,048, due to repurchases of Common Stock of $12,235 (see “Treasury Purchases” and “Share Repurchase”), and payments of dividends and dividend equivalents of $8,013 (see “Dividends and Dividend Equivalents”), partially offset by net proceeds on debt of $2,200 (see “Long-Term and Short-Term Debt”).

Previous wording

Cash provided by financing activities for the year to date ended June 30, 2023 was $89,462, due to net proceeds on debt of $95,600 (see “Long-Term and Short-Term Debt”), partially offset by payments of dividends and dividend equivalents of $5,337 (see “Dividends and Dividend Equivalents”), and repurchase of Common Stock of $801 (see “Treasury Purchases”).

Current wording

Cash provided by financing activities for the year to date ended September 30, 2023 was $78,193, due to net proceeds on debt of $87,000 (see “Long-Term and Short-Term Debt”), partially offset by payments of dividends and dividend equivalents of $8,006 (see “Dividends and Dividend Equivalents”), and repurchase of Common Stock of $801 (see “Treasury Purchases”).

Previous wording

Share Repurchase. On February 29, 2024, we announced that our Board of Directors approved a $100,000 share repurchase program. Under the share repurchase program, we can repurchase Common Stock from time to time for cash in open market purchases, privately negotiated transactions, or by other means, in accordance with applicable securities laws and other legal requirements. 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 year to date ended June 30, 2024, we repurchased 92,447 shares of Common Stock for approximately $7,500, resulting in approximately $92,500 remaining under the share repurchase program.

Current wording

Share Repurchase. On February 29, 2024, we announced that our Board of Directors approved a $100,000 share repurchase program. Under the share repurchase program, we can repurchase Common Stock from time to time for cash in open market purchases, privately negotiated transactions, or by other means, in accordance with applicable securities laws and other legal requirements. 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 year to date ended September 30, 2024, we repurchased 128,360 shares of Common Stock for approximately $10,000, resulting in approximately $90,000 remaining under the share repurchase program.

Previous wording

Long-Term and Short-Term Debt. We maintain debt levels we consider appropriate after evaluating a number of factors, including cash flow expectations, cash requirements for ongoing operations, investment and financing plans (including brand development, merger and acquisition, and share repurchase activities), and the overall cost of capital. Total debt was $309,396 (net of unamortized loan fees of $6,254) at June 30, 2024, and $287,249 (net of unamortized loan fees of $6,601) at December 31, 2023.

Current wording

Long-Term and Short-Term Debt. We maintain debt levels we consider appropriate after evaluating a number of factors, including cash flow expectations, cash requirements for ongoing operations, investment and financing plans (including brand development, merger and acquisition, and share repurchase activities), and the overall cost of capital. Total debt was $289,968 (net of unamortized loan fees of $6,082) at September 30, 2024, and $287,249 (net of unamortized loan fees of $6,601) at December 31, 2023.

Previous wording

At June 30, 2024, our current assets exceeded our current liabilities by $461,609, largely due to our inventories, at cost, of $358,567. At June 30, 2024, our cash balance was $21,011 and we have used our various debt agreements for liquidity purposes, with $312,000 available under our Credit Agreement for additional borrowings and $223,600 available under the Note Purchase Agreement (see Note 5, Corporate Borrowings). We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations. We regularly assess our cash needs and the available sources to fund these needs. We utilize short-term and long-term debt to fund discretionary items, such as capital investments, dividend payments, and potential mergers and acquisitions. Subject to market conditions, we could also fund future mergers and acquisitions through the issuance of additional shares of Common Stock. In addition, we have strong operating results such that we believe financial institutions should provide sufficient credit funding to meet short-term financing requirements, if needed.

Current wording

At September 30, 2024, our current assets exceeded our current liabilities by $449,670, largely due to our inventories, at cost, of $372,153. At September 30, 2024, our cash balance was $20,772 and we have used our various debt agreements for liquidity purposes, with $330,000 available under our Credit Agreement for additional borrowings and $225,200 available under the Note Purchase Agreement (see Note 5, Corporate Borrowings). We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations. We regularly assess our cash needs and the available sources to fund these needs. We utilize short-term and long-term debt to fund discretionary items, such as capital investments, dividend payments, and potential mergers and acquisitions. Subject to market conditions, we could also fund future mergers and acquisitions through the issuance of additional shares of Common Stock. In addition, we have strong operating results such that we believe financial institutions should provide sufficient credit funding to meet short-term financing requirements, if needed.