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MGP Ingredients (NASDAQ: MGPI) eases impact of $20M receivable losses

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

MGP Ingredients, Inc. entered into two amendments to its debt arrangements to change how certain potential receivable losses affect covenant calculations. Amendment No. 2 to its amended and restated credit agreement and an Eighth Amendment to its note purchase and private shelf agreement both revise the definition of Consolidated EBITDA.

The revisions allow the company, through December 31, 2027, to add back aggregate losses of up to $20,000,000 related to specified customer accounts receivable, with any future recoveries deducted from Consolidated EBITDA. This prevents these uncollected receivables from worsening compliance with key financial covenants, including a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00 and a consolidated net leverage ratio not exceeding 4.00 to 1.00, or 4.50 to 1.00 during an Elevated Ratio Period. MGP has elected an Elevated Ratio Period beginning with the quarter ended June 30, 2026 in connection with earnout obligations from its Penelope Bourbon LLC acquisition. The company describes these steps as precautionary and states it believes leverage will peak in the third quarter of 2026 and then decline.

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Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Consolidated EBITDA add-back cap $20,000,000 Aggregate losses from specified customer receivables that may be added back through December 31, 2027
Fixed charge coverage covenant 1.25 to 1.00 Minimum consolidated fixed charge coverage ratio under the amended agreements
Net leverage ratio covenant 4.00 to 1.00 Maximum consolidated net leverage ratio outside an Elevated Ratio Period
Elevated Ratio Period net leverage cap 4.50 to 1.00 Maximum consolidated net leverage ratio during any Elevated Ratio Period
Add-back eligibility period end December 31, 2027 Last date for including specified receivable losses in Consolidated EBITDA
Elevated Ratio Period start Quarter ended June 30, 2026 Fiscal quarter when MGPI elected an Elevated Ratio Period tied to Penelope Bourbon LLC earnout
Consolidated EBITDA financial
"the definition of Consolidated EBITDA was modified to permit the Company to add back"
Consolidated EBITDA is a measure of a parent company’s total operating earnings across all its subsidiaries, calculated before interest, taxes, depreciation and amortization (non‑cash charges). It shows the group’s raw cash‑generation and operating performance independent of financing and accounting choices, so investors use it like comparing the horsepower of an entire fleet rather than individual cars to judge core profitability and to compare firms on a more even footing.
consolidated fixed charge coverage ratio financial
"including (i) a consolidated fixed charge coverage ratio covenant of not less than 1.25 to 1.00"
consolidated net leverage ratio financial
"and (ii) a consolidated net leverage ratio covenant of no greater than 4.00 to 1.00"
The consolidated net leverage ratio measures how much debt a company carries compared with the cash it generates from core operations, calculated by taking total borrowings minus cash and dividing by annual operating profit. Like comparing a household’s mortgage balance to its yearly income, it tells investors how many years of operating profit would be needed to pay off net debt and thus gauges financial risk, flexibility to invest, and capacity to weather downturns.
Elevated Ratio Period financial
"may be increased to 4.50 to 1.00 in any fiscal quarter in which a permitted acquisition is consummated and for the three consecutive fiscal quarters thereafter (such increase, an “Elevated Ratio Period”)"
Note Purchase and Private Shelf Agreement financial
"Eighth Amendment to Note Purchase and Private Shelf Agreement, dated August 6, 2026"

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FAQ

What changes did MGP Ingredients (MGPI) make to its debt agreements on August 6, 2026?
MGP Ingredients revised the definition of Consolidated EBITDA in its amended and restated credit agreement and in its note purchase and private shelf agreement, aligning both so certain potential receivable losses can be added back when calculating covenant compliance.

How does the new $20,000,000 add-back affect MGPI’s financial covenants?
The amendments let MGPI add back up to $20,000,000 of losses on specified customer receivables to Consolidated EBITDA through 2027, so those uncollected amounts do not negatively affect compliance with its fixed charge coverage and net leverage ratio covenants.

What leverage and coverage covenants apply to MGP Ingredients (MGPI) after the amendments?
MGPI remains subject to a minimum consolidated fixed charge coverage ratio of 1.25 to 1.00 and a consolidated net leverage ratio not above 4.00 to 1.00, or 4.50 to 1.00 during an Elevated Ratio Period, when calculated using the revised EBITDA definition.

What is the Elevated Ratio Period elected by MGP Ingredients (MGPI)?
MGPI has exercised an Elevated Ratio Period, allowing a higher net leverage cap of 4.50 to 1.00, starting with the fiscal quarter ended June 30, 2026 and continuing for three quarters, in connection with earnout obligations from acquiring Penelope Bourbon LLC.

How long can MGP Ingredients (MGPI) use receivable loss add-backs in EBITDA?
MGPI may add back aggregate losses up to $20,000,000 from specified customer accounts receivable to Consolidated EBITDA for periods on or before December 31, 2027, with any subsequent recoveries then deducted from Consolidated EBITDA.

What does MGPI say about its expected leverage trend after these amendments?
The company states it believes the third fiscal quarter of 2026 will represent its peak leverage and that leverage is expected to decline thereafter, while noting that this expectation is subject to risks and uncertainties outlined in its SEC reports.
FALSE000083501100008350112026-08-062026-08-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2026

MGP Ingredients, Inc.
(Exact name of registrant as specified in its charter)
Kansas0-1719645-4082531
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
Cray Business Plaza
100 Commercial Street
Box 130
Atchison, Kansas 66002
(Address of principal executive offices) (Zip Code)

(913) 367-1480
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, no par valueMGPINASDAQ Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 1.01. Entry into a Material Definitive Agreement.
On August 6, 2026, MGP Ingredients, Inc. (the “Company”) entered into an Amendment No. 2 to Amended and Restated Credit Agreement (“Amendment No. 2”) with Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”), the other loan parties party thereto, and the lenders party thereto. Amendment No. 2 amended the Amended and Restated Credit Agreement, dated February 14, 2020 among the Company, as borrower, Wells Fargo Bank, National Association, as Administrative Agent, swingline lender and issuing lender, and the other lenders and parties thereto (as amended, including by Amendment No. 2, the “A&R Credit Agreement”).

Pursuant to Amendment No. 2, the definition of Consolidated EBITDA was modified to permit the Company to add back, for any period on or prior to December 31, 2027, aggregate losses up to $20,000,000 related to accounts receivable from specific customers, subject to disclosure of such customers in writing to the Administrative Agent. In the event any receivables added back pursuant to this provision are recovered, such receivables must then be deducted from Consolidated EBITDA. As a result of Amendment No. 2, such uncollected receivables will not negatively impact the calculation of the financial covenants which the Company must comply with under the A&R Credit Agreement, including (i) a consolidated fixed charge coverage ratio covenant of not less than 1.25 to 1.00 and (ii) a consolidated net leverage ratio covenant of no greater than 4.00 to 1.00, as may be increased to 4.50 to 1.00 in any fiscal quarter in which a permitted acquisition is consummated and for the three consecutive fiscal quarters thereafter (such increase, an “Elevated Ratio Period”). The Company has exercised its option for an Elevated Ratio Period, commencing with the fiscal quarter ended June 30, 2026 and for the three fiscal quarters thereafter, in connection with the earnout obligations for the acquisition of Penelope Bourbon LLC.

In connection with Amendment No. 2, the Company entered into an Eighth Amendment to Note Purchase and Private Shelf Agreement (the “Eighth Amendment,” and together with Amendment No. 2, the “Amendments”), dated August 6, 2026, among the Company, PGIM, Inc., and certain of its affiliates as noteholders. The Eighth Amendment amended the Note Purchase and Private Shelf Agreement, dated August 23, 2017 among the Company, as issuer, PGIM, Inc. and certain of its affiliates as noteholders. The Eighth Amendment incorporated conforming changes to the definition of Consolidated EBITDA in Amendment No. 2 for the purposes described above.

The Company undertook the Amendments described above as precautionary measures. The Company continues to believe that the third fiscal quarter of 2026 will represent its peak leverage, after which it expects leverage to decline. The Amendments were supported by the full participation of the banking group.

Forward-Looking Statements

The foregoing descriptions of Amendment No. 2 and the Eighth Amendment do not purport to be complete and are qualified in their entirety by reference to the full texts of Amendment No. 2 and the Eighth Amendment, which are filed as Exhibit 10.1 and 10.2 hereto, respectively, and are incorporated herein by reference.

This Current Report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements about the Company’s expected leverage levels, anticipated timing of peak leverage, the collectability of certain receivables, and the expected impact of the amendments to the Company’s credit facilities that are identified by the words “believe” and “expect.” These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, and Company financial results and financial condition and are not guarantees of future performance. All forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Factors that could cause actual results to differ materially from our expectations include without limitation, the Company’s inability to collect receivables; an inability to achieve expected improvements in the Company’s leverage position; unanticipated costs or events arising from or in connection with the Amendments; changes in the Company’s relationships with its lenders or the terms of its credit facilities; and general economic, market, or business conditions that may affect the Company’s liquidity, financial condition, or ability to service its indebtedness.



For further information on these and other risks and uncertainties that may affect the Company’s business, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC, as well as the Company’s other SEC filings. The Company undertakes no obligation to update any forward-looking statements made in this Current Report to reflect future events or developments, except as required by law.

Because it is not possible to predict or identify all such factors, this list cannot be considered a complete set of all potential risks or uncertainties.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit NumberDescription
10.1
Amendment No. 2 to Amended and Restated Credit Agreement, dated August 6, 2026, among MGP Ingredients, Inc., Wells Fargo Bank, National Association, as Administrative Agent, the other loan parties party thereto and the lenders party thereto.
10.2
Eighth Amendment to Note Purchase and Private Shelf Agreement, dated August 6, 2026, among MGP Ingredients, Inc., PGIM, Inc. and certain noteholders affiliated with PGIM, Inc.
104The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline Extensible Business Reporting Language)










SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


                        MGP INGREDIENTS, INC.
Date: August 7, 2026
By:/s/ Brandon M. Gall
Brandon M. Gall, Chief Financial Officer

Source: View Original Filing on SEC EDGAR

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