MGPI still suffering from low-carb decrease
headache for MGP Ingredients in the 3Q, decreasing earnings and
revenue compared to the same period last year.
The Atchison, Kansas based company announced its results on Thursday, reporting earnings of $1.6 million, or 10 cents a share, down 19 percent from $2 million, or 12 cents a share, last year. Meanwhile, sales for the quarter totaled $71.2 million, down 5 percent from $75.2 million last year.
The firm, which develops and produces grain-based products at plants in Atchison, Kansas City, Kansas and Pekin, Illinois, said the 22 percent decline in sales in its ingredients sector was "due principally to the decrease in sales of speciality ingredients for use in low-carbohydrate products."
The company's Arise line of speciality wheat protein isoalates and some applications realated to its Wheatex line of textured wheat proteins were also affected by the downturn in low-carb product demand.
On the other hand, the rise in sales of its Fibersym resistant starches that began last quarter continued.
"The third and fourth quarters of fiscal 2004 represented the peak in our ingredients sales related to last year's low-carbohydrate trend," said Michael Trautschold, executive vice president of marketing and sales.
But added: "We expect the larger market trends toward healthier food products to contribute favorably to demand for ingredients with specialized nutritional profiles such as Fibersym."
However, Ladd Seaberg, the company CEO, said that year-over-year comparisons would remain a "challenge".
According to AC Nielsen, the "carb conscious" segment has been seeing slowing sales since mid-June 2004 when the sector saw a one-week growth rate of over 200 percent.
Nevertheless, foods bearing "low/no"carb labels topped the list of 11 good-for-you segments tracked by the market research company for generating the highest growth in the first 12 weeks of 2005 - up 20.2 percent compared to the same period last year.