MGPI

(Dollar amounts in thousands, unless otherwise noted) CAUTIONARY NOTE CONCERNING FACTORS THAT MAY AFFECT FUTURE RESULTS This Report may contain forward-looking statements as well as historical information. All statements, other than statements of historical facts, regarding the prospects of our industries and our prospects, plans, financial position, mission, and strategy may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements about our source of cash being adequate; our ability to support our liquidity and operating needs through cash generated from operations and borrowings; and our capital expenditures. Forward looking statements are usually identified by or are associated with such words as “intend,” “plan,” “believe,” “estimate,” “expect,” “anticipate,” “project,” “forecast,” “hopeful,” “should,” “may,” “will,” “could,” “encouraged,” “opportunities,” “potential,” and similar terminology. These forward-looking statements reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, our performance, our financial results, and our 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. 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, 2025, 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. OVERVIEW MGP is a leading producer of branded and distilled spirits as well as food ingredient solutions. We have an extensive award-winning global portfolio of branded spirits, which we produce through our distilleries and bottling facilities and sell to distributors. Our branded spirits products account for a range of price points from value products through premium plus brands. Distilled spirits include premium bourbon, rye, and other whiskeys (“brown goods”) and grain neutral spirits (“GNS”), including vodka and gin. Our distilled spirits are either sold directly or indirectly to manufacturers of other branded spirits. Our protein and starch food ingredients are predominantly wheat based and provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the consumer packaged goods industry. Our ingredient products are sold directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and accompanying notes included in this Report, as well as our audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - General,” set forth in our Annual Report on Form 10-K for the year ended December 31, 2025. 23 RESULTS OF OPERATIONS Consolidated Results The table below details the consolidated results for the quarters ended June 30, 2026 and 2025: Quarter Ended June 30, 2026 2025 2026 v. 2025 Sales $ 124,357 $ 145,494 (15) % Cost of sales 77,886 87,107 (11) Gross profit 46,471 58,387 (20) Gross margin % 37.4 % 40.1 % (2.7) pp(a) Advertising and promotion expenses 5,683 6,913 (18) Selling, general, and administrative (“SG&A”) expenses 20,237 23,156 (13) Provision for credit loss 2,148 — N/A Impairment and other 751 — N/A Change in fair value of contingent consideration — 8,000 N/A Operating income 17,652 20,318 (13) Operating margin % 14.2 % 14.0 % 0.2 pp Interest expense, net (2,879) (1,897) 52 Other income, net 299 314 (5) Income before income taxes 15,072 18,735 (20) Income tax expense 3,063 4,308 (29) Effective tax expense rate % 20.3 % 23.0 % (2.7) pp Net income $ 12,009 $ 14,427 (17) % Net income margin % 9.7 % 9.9 % (0.2) pp (a) Percentage points (“pp”). Sales - Sales for the quarter ended June 30, 2026 were $124,357, a decrease of 15 percent compared to the year-ago quarter, which was the result of decreased sales in the Distilling Solutions and Branded Spirits segments, partially offset by increased sales in the Ingredient Solutions segment. Within the Distilling Solutions segment, sales were down 42 percent primarily due to decreased sale volume of brown goods. Within the Branded Spirits segment, sales were down 1 percent primarily due to decreased sales volume of our private label bottled products within the other category. Within the Ingredient Solutions segment, sales were up 2 percent, primarily due to increased sales of biofuel and other (see “Segment Results”). Gross profit - Gross profit for the quarter ended June 30, 2026 was $46,471, a decrease of 20 percent compared to the year-ago quarter, which was the result of decreased gross profit in each segment. Within the Distilling Solutions segment, gross profit decreased by $7,510, or 40 percent. Within the Ingredient Solutions segment, gross profit decreased by $4,018, or 53 percent. Within the Branded Spirits segment, gross profit decreased $388, or 1 percent (see “Segment Results”). Advertising and promotion expenses - Advertising and promotion expenses for the quarter ended June 30, 2026 were $5,683, a decrease of 18 percent compared to the year-ago quarter, primarily driven by timing of advertising and promotion spend. SG&A expenses - SG&A expenses for the quarter ended June 30, 2026 were $20,237, a decrease of 13 percent compared to the year-ago quarter, primarily driven by our cost savings initiatives. 24 Operating income - Operating income for the quarter ended June 30, 2026 decreased to $17,652 from $20,318 for the quarter ended June 30, 2025, primarily due to a decrease in gross profit in each segment and an increase in provision for credit loss related to one of our significant customers filing a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code during July 2026. These decreases were partially offset by the change in fair value of contingent consideration, as well as decreases in SG&A and advertising and promotion expenses. Operating income, quarter versus quarter Operating Income Change Operating income for the quarter ended June 30, 2025 $ 20,318 Decrease in gross profit - Distilling Solutions segment(a) (7,510) (37) % Decrease in gross profit - Ingredient Solutions segment(a) (4,018) (20) pp(b) Decrease in gross profit - Branded Spirits segment(a) (388) (2) pp Decrease in advertising and promotion expenses 1,230 6 pp Decrease in SG&A expenses 2,919 14 pp Increase in provision for credit loss (2,148) (11) pp Increase in impairment and other (751) (4) pp Change in fair value of contingent consideration 8,000 39 pp Operating income for the quarter ended June 30, 2026 $ 17,652 (13) % (a) See “Segment Results.” (b) Percentage points (“pp”). Income tax expense - Income tax expense for the quarter ended June 30, 2026 was $3,063, for an effective tax rate of 20.3 percent. Income tax expense for the quarter ended June 30, 2025 was $4,308, for an effective tax rate of 23.0 percent. The decrease in income tax expense, quarter versus quarter, was due primarily to lower income before income taxes. The decrease in tax rate, quarter versus quarter, was primarily due to the discrete impact of a state law change on the Company’s deferred tax balances. Earnings per common share (“EPS”) - Basic and Diluted EPS was $0.55 for the quarter ended June 30, 2026, compared to $0.67 for the quarter ended June 30, 2025. The change in basic and diluted EPS, quarter versus quarter, was primarily due to an increase in interest expense, net and a decrease in operating income. Change in EPS, quarter versus quarter EPS Change Basic and Diluted EPS for the quarter ended June 30, 2025 $ 0.67 Change in operating income(a) (0.10) (15) % Change in interest expense, net(a) (0.04) (6) pp(b) Change in effective tax rate 0.02 3 pp Basic and Diluted EPS for the quarter ended June 30, 2026 $ 0.55 (18) % (a) Net of tax based on the effective tax rate for the base year (2025). (b) Percentage points (“pp”). 25 The table below details the consolidated results for the year to date ended June 30, 2026 and 2025: Year to Date Ended June 30, 2026 2025 2026 v. 2025 Sales $ 230,784 $ 267,147 (14) % Cost of sales 150,731 165,430 (9) Gross profit 80,053 101,717 (21) Gross margin % 34.7 % 38.1 % (3.4) pp(a) Advertising and promotion expenses 11,874 15,085 (21) SG&A expenses 41,303 44,361 (7) Provision for credit loss 2,148 — N/A Impairment and other 180,277 — N/A Change in fair value of contingent consideration — 22,700 N/A Operating income (loss) (155,549) 19,571 (895) Operating margin % (67.4) % 7.3 % (74.7) pp Interest expense, net (4,300) (3,751) 15 Other income, net 249 529 (53) Income (loss) before income taxes (159,600) 16,349 (1,076) Income tax expense (benefit) (36,802) 4,979 (839) Effective tax expense rate % 23.1 % 30.5 % (7.4) pp Net income (loss) $ (122,798) $ 11,370 (1,180) % Net income margin % (53.2) % 4.3 % (57.5) pp (a) Percentage points (“pp”). Sales - Sales for the year to date ended June 30, 2026 were $230,784, a decrease of 14 percent compared to the year-ago period, which was the result of decreased sales in the Distilling Solutions and Branded Spirits segments, partially offset by increased sales in the Ingredient Solutions segment. Within the Distilling Solutions segment, sales were down 41 percent primarily due to decreased sales volume of brown goods. Sales of Branded Spirits were down 4 percent, primarily due to decreased sales volume of our private label bottled products within the other category. Within the Ingredient Solutions segment, sales were up 13 percent, primarily due to increased sales of specialty wheat proteins and starches (see “Segment Results”). Gross profit - Gross profit for the year to date ended June 30, 2026 was $80,053, a decrease of 21 percent compared to the year-ago period. The decrease was driven by decreased gross profit in each of the segments. In the Distilling Solutions segment, gross profit decreased by $17,565 or 47 percent. In the Ingredient Solutions segment, gross profit decreased by $2,649, or 26 percent. In the Branded Spirits segment, gross profit declined by $1,450, or 3 percent (see “Segment Results”). Advertising and promotion expenses - Advertising and promotion expenses for the year to date ended June 30, 2026 were $11,874, a decrease of 21 percent compared to the year-ago period, primarily driven by timing of advertising and promotion spend. SG&A expenses - SG&A expenses for the year to date ended June 30, 2026 were $41,303, a decrease of 7 percent compared to the year-ago period, primarily driven by our cost savings initiatives. Operating income (loss) - Operating income for the year to date ended June 30, 2026 decreased to a loss of $155,549 from income of $19,571 for the year to date period ended June 30, 2025, primarily due to the $179,526 goodwill and other long-lived assets impairment related to the Branded Spirits segment recorded during the first quarter 2026. Additionally, contributing to the operating loss was decreases in gross profit in each segment and an increase in provision for credit loss related to one of our significant customers filing a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code during July 2026. These decreases were partially offset by the change in the fair value of the contingent consideration liability, as well as the reduction in advertising and promotion and SG&A expenses. 26 Operating income (loss), year to date versus year to date Operating Income Change Operating income for the year to date ended June 30, 2025 $ 19,571 Decrease in gross profit - Distilling Solutions segment(a) (17,565) (90) % Decrease in gross profit - Ingredient Solutions segment(a) (2,649) (14) pp(b) Decrease in gross profit - Branded Spirits segment(a) (1,450) (7) pp Decrease in advertising and promotion expenses 3,211 16 pp Decrease in SG&A expenses 3,058 16 pp Increase in provision for credit loss (2,148) (11) pp Increase in impairment and other (180,277) (921) pp Change in fair value of contingent consideration 22,700 116 pp Operating loss for the year to date ended June 30, 2026 $ (155,549) (895) % (a) See “Segment Results.” (b) Percentage points (“pp”). Income tax expense (benefit) - Income tax benefit for the year to date ended June 30, 2026 was $36,802, for an effective tax rate of 23.1 percent. Income tax expense for the year to date ended June 30, 2025, was $4,979, for an effective tax rate of 30.5 percent. The decrease in income tax expense, year to date versus year to date, was primarily due to lower income before income taxes and the tax impact of the goodwill and other long-lived assets impairment. The decrease in tax rate, year to date versus year to date, was primarily due to the discrete impact of a state law change on the Company’s deferred tax balances. Earnings per common share - Basic and diluted EPS was $(5.74) for the year to date ended June 30, 2026, compared to $0.53 for the year to date ended June 30, 2025. The change in basic and diluted EPS, year to date versus year to date, was primarily due to a decrease in operating income. Change in EPS, year to date versus year to date EPS Change Basic and Diluted EPS for the year to date ended June 30, 2025 $ 0.53 Change in operating income(a) (5.71) (1,077) % Change in interest expense, net(a) (0.02) (4) pp(b) Change in other income, net(a) (0.01) (2) pp Change in effective tax rate (0.55) (104) pp Change in weighted average shares outstanding 0.02 4 pp Basic and Diluted EPS for the year to date ended June 30, 2026 $ (5.74) (1,183) % (a) Net of tax based on the effective tax rate for the base year (2025). (b) Percentage points (“pp”) 27 SEGMENT RESULTS Branded Spirits The following tables show selected financial information for the Branded Spirits segment for the quarters ended June 30, 2026 and 2025. BRANDED SPIRITS SALES Quarter Ended June 30, Quarter versus Quarter Sales Change Increase/(Decrease) 2026 2025 $ Change % Change Premium plus $ 32,645 $ 31,099 $ 1,546 5 % Mid 16,225 15,493 732 5 Value 8,324 8,936 (612) (7) Other 2,436 4,992 (2,556) (51) Total Branded Spirits $ 59,630 $ 60,520 $ (890) (1) % Change in Quarter versus Quarter Sales Attributed to: Total (a) Volume(b) Net Price/Mix(c) Total Branded Spirits (1)% —% (1)% Other Financial Information Quarter Ended June 30, Quarter versus Quarter Increase / (Decrease) 2026 2025 $ Change % Change Gross profit $ 31,596 $ 31,984 $ (388) (1) % Gross margin % 53.0 % 52.8 % 0.2 pp(d) (a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars. (b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit. The product is then divided by prior period sales dollars. (c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume. The product is then divided by prior period sales dollars. (d) Percentage points (“pp”). Total sales of the Branded Spirits segment for the quarter ended June 30, 2026 decreased by $890, or 1 percent, compared to the prior year quarter, primarily due to a decrease in sales volume of our private label bottled products within the other category. This decrease was partially offset by increased sales volume in the premium plus price tier reflecting continued growth of our American whiskey offerings. Gross profit decreased versus the prior year quarter by $388, or 1 percent, primarily driven by lower sales volume of private label bottled products within the other category. Gross margin for the quarter ended June 30, 2026 increased to 53.0 percent from 52.8 percent for the prior year quarter, driven primarily by increased sales volume in the premium plus price tier. 28 The following tables show selected financial information for the Branded Spirits segment for the year to date ended June 30, 2026 and 2025. BRANDED SPIRITS SALES Year to Date Ended June 30, Year to Date versus Year to Date Sales Change Increase/(Decrease) 2026 2025 $ Change % Change Premium plus $ 55,296 $ 53,417 $ 1,879 4 % Mid 29,468 28,520 948 3 Value 14,827 16,277 (1,450) (9) Other 4,276 10,533 (6,257) (59) Total Branded Spirits $ 103,867 $ 108,747 $ (4,880) (4) % Change in Year to Date versus Year to Date Sales Attributed to: Total (a) Volume(b) Net Price/Mix(c) Total Branded Spirits (4)% (3)% (1)% Other Financial Information Year to Date Ended June 30, Year to Date versus Year to Date Increase / (Decrease) 2026 2025 $ Change % Change Gross profit $ 52,732 $ 54,182 $ (1,450) (3) % Gross margin % 50.8 % 49.8 % 1.0 pp(d) (a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars. (b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit. The product is then divided by prior period sales dollars. (c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume. The product is then divided by prior period sales dollars. (d) Percentage points (“pp”). Total sales of the Branded Spirits segment for the year to date ended June 30, 2026 decreased by $4,880, or 4 percent, compared to the year-ago period, primarily due to a decrease in sales volume of our private label bottled products within the other category. Sales volume of brands within the value price tier also decreased as we continued to optimize our offerings in this price tier. These decreases were partially offset by increased sales volume in the premium plus and mid price tiers reflecting our continued focus on the American whiskey and tequila categories. Gross profit for the year to date ended June 30, 2026 decreased by $1,450, or 3 percent, primarily driven by lower sales volume of private label bottled products within the other category. Gross margin for the year to date ended June 30, 2026 increased to 50.8 percent from 49.8 percent for the prior year period, driven primarily by increased sales volume in the premium plus price tier. 29 Distilling Solutions The following tables show selected financial information for the Distilling Solutions segment for the quarters ended June 30, 2026 and 2025. DISTILLING SOLUTIONS SALES Quarter Ended June 30, Quarter versus Quarter Sales Change Increase/(Decrease) 2026 2025 $ Change % Change Brown goods $ 14,260 $ 35,057 $ (20,797) (59) % Warehouse services 8,622 8,001 621 8 White goods and other co-products 6,338 6,942 (604) (9) Total Distilling Solutions $ 29,220 $ 50,000 $ (20,780) (42) % Change in Quarter versus Quarter Sales Attributed to: Total (a) Volume(b) Net Price/Mix(c) Brown goods (59)% (68)% 9% Other Financial Information Quarter Ended June 30, Quarter versus Quarter Increase / (Decrease) 2026 2025 $ Change % Change Gross profit $ 11,302 $ 18,812 $ (7,510) (40) % Gross margin % 38.7 % 37.6 % 1.1 pp(d) (a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars. (b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit. The product is then divided by prior period sales dollars. (c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume. The product is then divided by prior period sales dollars. (d) Percentage points (“pp”). Total sales of the Distilling Solutions segment for the quarter ended June 30, 2026 decreased by $20,780, or 42 percent, compared to the prior year quarter, primarily driven by lower brown goods sales volume. Brown goods sales decreased due to reduced customer volume demand resulting primarily from continued elevated industry-wide barrel inventory levels. This decrease was partially offset by an increase in net price/mix of brown goods compared to the prior year quarter. Gross profit decreased versus the prior year quarter by $7,510, or 40 percent, primarily due to lower brown goods sales volume. Gross margin for the quarter ended June 30, 2026 increased to 38.7 percent from 37.6 percent for the prior year quarter primarily due to an increase in net price/mix of brown goods and reduced distillation costs. 30 The following tables show selected financial information for the Distilling Solutions segment for the year to date ended June 30, 2026 and 2025. DISTILLING SOLUTIONS SALES Year to Date Ended June 30, Year to Date versus Year to Date Sales Change Increase/(Decrease) 2026 2025 $ Change % Change Brown goods $ 29,169 $ 68,713 $ (39,544) (58) % Warehouse services 16,914 16,078 836 5 White goods and other co-products 11,137 12,152 (1,015) (8) Total Distilling Solutions $ 57,220 $ 96,943 $ (39,723) (41) % Change in Year to Date versus Year to Date Sales Attributed to: Total(a) Volume(b) Net Price/Mix(c) Brown goods (58)% (62)% 4% Other Financial Information Year to Date Ended June 30, Year to Date versus Year to Date Increase / (Decrease) 2026 2025 $ Change % Change Gross profit $ 19,927 $ 37,492 $ (17,565) (47) % Gross margin % 34.8 % 38.7 % (3.9) pp(d) (a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars. (b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit. The product is then divided by prior period sales dollars. (c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume. The product is then divided by prior period sales dollars. (d) Percentage points (“pp”). Total sales of the Distilling Solutions segment for the year to date ended June 30, 2026 decreased by $39,723, or 41 percent compared to the year-ago period, primarily driven by lower brown goods sales volume. Brown goods sales decreased due to reduced customer volume demand resulting primarily from continued elevated industry-wide barrel inventory levels. This decrease was partially offset by an increase in net price/mix of brown goods compared to the prior year period. Gross profit for the year to date ended June 30, 2026 decreased by $17,565 compared to the year-ago period, primarily due to lower brown goods sales volume. Gross margin for the year to date ended June 30, 2026 decreased to 34.8 percent from 38.7 percent for the prior year period primarily due to lower brown goods sales. 31 Ingredient Solutions The following tables show selected financial information for the Ingredient Solutions segment for the quarters ended June 30, 2026 and 2025. INGREDIENT SOLUTIONS SALES Quarter Ended June 30, Quarter versus Quarter Sales Change Increase / (Decrease) 2026 2025 $ Change % Change Specialty wheat starches $ 18,889 $ 18,474 $ 415 2 % Specialty wheat proteins 12,749 12,612 137 1 Commodity wheat starches 2,670 3,061 (391) (13) Commodity wheat proteins 76 827 (751) (91) Biofuel and other 1,123 — 1,123 N/A Total Ingredient Solutions $ 35,507 $ 34,974 $ 533 2 % Change in Quarter versus Quarter Sales Attributed to: Total(a) Volume(b) Net Price/Mix(c) Total Ingredient Solutions 2% —% 2% Other Financial Information Quarter Ended June 30, Quarter versus Quarter Increase / (Decrease) 2026 2025 $ Change % Change Gross profit $ 3,573 $ 7,591 $ (4,018) (53) % Gross margin % 10.1 % 21.7 % (11.6) pp(d) (a) Total sales change is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars. (b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit. The product is then divided by prior period sales dollars. (c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume. The product is then divided by prior period sales dollars. (d) Percentage points (“pp”). Total sales of the Ingredient Solutions segment for the quarter ended June 30, 2026 increased by $533, or 2 percent, compared to the prior year quarter. The increase was primarily driven by increased sales volume of bio fuel and other byproducts and increased net price/mix of specialty wheat starches and proteins. These increases were partially offset by a decrease in sales volume of commodity wheat proteins and a decrease in net price/mix of commodity wheat starches. Gross profit decreased versus the prior year quarter by $4,018, or 53 percent. Gross margin for the quarter ended June 30, 2026 decreased to 10.1 percent from 21.7 percent for the prior year quarter. The decrease in gross profit was primarily driven by higher waste starch stream costs in biofuel and other, as well as lower net price/mix of commodity wheat starches. This decrease was partially offset by an increase in net/price mix of specialty wheat starches and proteins. 32 The following tables show selected financial information for the Ingredient Solutions segment for the year to date June 30, 2026 and 2025. INGREDIENT SOLUTIONS SALES Year to Date Ended June 30, Year to Date versus Year to Date Sales Change Increase/(Decrease) 2026 2025 $ Change % Change Specialty wheat starches $ 37,305 $ 34,327 $ 2,978 9 % Specialty wheat proteins 25,457 19,960 5,497 28 Commodity wheat starches 5,287 5,780 (493) (9) Commodity wheat proteins 459 1,390 (931) (67) Biofuel and other 1,189 — 1,189 N/A Total Ingredient Solutions $ 69,697 $ 61,457 $ 8,240 13 % Change in Year to Date versus Year to Date Sales Attributed to: Total(a) Volume(b) Net Price/Mix(c) Total Ingredient Solutions 13% 8% 5% Other Financial Information Year to Date Ended June 30, Year to Date versus Year to Date Increase / (Decrease) 2026 2025 $ Change % Change Gross profit $ 7,394 $ 10,043 $ (2,649) (26) % Gross margin % 10.6 % 16.3 % (5.7) pp(d) (a) Total sale changes is calculated by taking the difference between current period sales dollars and prior period sales dollars, divided by prior period sales dollars. (b) Volume change is calculated by taking the difference between current period sales volume and prior period sales volume, multiplied by prior period sales per unit. The product is then divided by prior period sales dollars. (c) Net price/mix change is calculated by taking the difference between current period sales-per-unit and prior period sales-per unit, multiplied by current period sales volume. The product is then divided by prior period sales dollars. (d) Percentage points (“pp”). Total sales of the Ingredient Solutions segment for the year to date ended June 30, 2026 increased by $8,240, or 13 percent, compared to the prior year period. The increase was primarily driven by increased net price/mix and sales volume of specialty wheat proteins and starches due to cycling against the supply challenges resulting from adverse weather during the prior year, complexities associated with the closure of the Atchison distillery, as well as cycling against the timing of commercialization of new customers during the prior year. Gross profit decreased by $2,649, or 26 percent for the year to date ended June 30, 2026 compared to the prior year period. Gross margin for the year to date ended June 30, 2026 decreased to 10.6 percent from 16.3 percent for the prior year period. The decrease in gross profit and margin was primarily driven by higher waste starch stream costs in biofuel and other. This decrease was partially offset by an increase in net price/mix and volume of specialty wheat proteins and starches. 33 CASH FLOW, FINANCIAL CONDITION, AND LIQUIDITY Our primary sources of liquidity have been cash flow from operating activities and borrowings through our Credit Agreement, Convertible Senior Notes, and Note Purchase Agreement (see Note 4, Corporate Borrowings). These sources of cash are used to fund our operating needs, capital expenditures, stockholder dividends, and other discretionary uses. We continue to monitor market conditions which have created, and may continue to create, credit and economic challenges that could adversely impact our cash flow from operating activities and cash provided by borrowings. In the past, this has included consumer, distributor, retailer, and supplier inventory destocking, increases in our provision for credit loss, and customer contract non-performance, and we continue to face these risks (see “Operating Activities”). Our overall liquidity reflects our effective cash management strategy that takes into account liquidity management, economic factors, and tax considerations. We expect our sources of cash to be adequate to provide for budgeted capital expenditures, potential mergers or acquisitions, and anticipated operating requirements for the next 12 months and beyond. Our principal uses of cash in the ordinary course of business are for input costs used in our production processes, salaries, and investments supporting our strategic plan, such as capital expenditures, the aging of barreled distillate primarily to support our branded spirits segment, and potential mergers or acquisitions. Generally, during periods when commodity prices are rising, our operations require increased use of cash to support inventory levels. At June 30, 2026, our current assets exceeded our current liabilities by $458,355, largely due to our inventories, at cost, of $408,416. At June 30, 2026, our cash balance was $17,794 and we have used our various debt agreements for liquidity purposes, with $338,000 available under our credit agreement for additional borrowings and $236,400 available under the Note Purchase Agreement (see Note 4, Corporate Borrowings). Under these agreements (including the Credit Agreement amendment and the Note Purchase Agreement amendment we entered into on February 20, 2026), we must meet certain financial covenants and restrictions, and at June 30, 2026, we met those covenants and restrictions. We anticipate being able to support our short-term liquidity and operating needs largely through cash generated from operations and borrowings under our various debt agreements. We expect some holders of the Convertible Senior Notes to require the Company to repurchase the Convertible Senior Notes during the fourth quarter of 2026. We have sufficient availability to repurchase the Convertible Senior Notes that are tendered for repurchase utilizing borrowings under our Credit Agreement, the Note Purchase Agreement, or a combination thereof. Additionally, in accordance with the terms of the agreement, we paid out the full contingent consideration related to the Penelope acquisition on April 28, 2026. We utilize short-term and long-term debt to fund discretionary items, such as capital investments, dividend payments, share repurchases, as well as potential mergers or acquisitions. Subject to market conditions, we could also fund future mergers and acquisitions through the issuance of additional shares of Common Stock or preferred stock. Cash Flow Summary Year to Date Ended June 30, Changes, year versus year Increase / (Decrease) 2026 2025 Net cash provided by (used in) operating activities $ (40,732) $ 56,357 $ (97,089) Net cash used in investing activities (8,397) (32,167) 23,770 Net cash provided by (used in) financing activities 48,618 (33,103) 81,721 Effect of exchange rate changes on cash (155) 960 (1,115) Decrease in cash and cash equivalents $ (666) $ (7,953) $ 7,287 Cash decreased $666 for the year to date ended June 30, 2026, compared to a decrease of $7,953 for the year to date ended June 30, 2025, for a net decrease in cash of $7,287, period versus period. Operating Activities. Cash used in operating activities for the year to date ended June 30, 2026 was $40,732. The cash used in operating activities resulted primarily from net loss of $122,798, adjustments for non-cash or non-operating charges of $102,533, including goodwill and other long-lived assets impairment, a portion of the contingent consideration payment related to the Penelope acquisition and deferred income taxes, and cash used in operating assets and liabilities of $20,467. The primary drivers of the changes in operating assets and liabilities were $25,631 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, and $7,001 use of cash related to accrued expenses and other primarily related to an incentive compensation payout during the year to date period. These decreases were partially offset by $12,520 of cash 34 provided by decreased accounts receivables, net, due to timing of customer payments, lower sales during the quarter, and a provision for credit loss recorded during the quarter. On July 26, 2026, one of our significant customers filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. As a result, we recognized an allowance for credit loss of $2,148 on the Condensed Consolidated Balance Sheet as of June 30, 2026 and in provision for credit loss on the Condensed Consolidated Statements of Income (Loss) for the quarter and year to date ended June 30, 2026. The allowance for credit loss was recorded within the Branded Spirits segment. We believe this allowance for credit loss is appropriate and consistent with our accounting policy and assessment of the information currently available. We evaluate our credit losses periodically and as circumstances warrant which may result in changes to our credit loss allowance. We are evaluating the impact of the bankruptcy on future sales and cash collections, and the ultimate amount recoverable may differ from current estimates. Cash provided by operating activities for the year to date ended June 30, 2025 was $56,357. The cash provided by operating activities resulted primarily from adjustments for non-cash or non-operating charges of $35,419, including changes in fair value of contingent consideration, depreciation and amortization, and share-based compensation, net income of $11,370, and cash provided by operating assets and liabilities of $9,568. The primary drivers of the changes in operating assets and liabilities were $31,103 of cash provided by decreased accounts receivables, net, due to the timing of customer payments and lower sales during the quarter. This was partially offset by $15,224 use of cash related to an increase in inventories, primarily due to an increase in barreled distillate, and $10,687 use of cash related to a decrease in accounts payable due to timing of vendor payments and lower costs during the year to date period. Investing Activities. Cash used in investing activities for the year to date ended June 30, 2026 was $8,397, which resulted primarily from additions to property, plant, and equipment of $10,219 (see “Capital Spending”), partially offset by distributions from equity method investments of $1,500. Cash used in investing activities for the year to date ended June 30, 2025 was $32,167, which resulted primarily from additions to property, plant, and equipment of $32,156 (see “Capital Spending”). Capital Spending. We manage capital spending to support our business growth plans. We have incurred $6,433 and $18,691 of capital expenditures and have paid $10,219 and $32,156 for capital expenditures for the years to date ended June 30, 2026 and 2025, 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 to incur approximately $20,000 in capital expenditures in 2026, which we expect to use for facility improvement and facility sustenance projects and environmental health and safety projects. Financing Activities. Cash provided by financing activities for the year to date ended June 30, 2026 was $48,618, due to net proceeds on debt of $116,800 (see “Long-Term and Short-Term Debt”), partially offset by a portion of the contingent consideration payment of $62,100, payments of dividends and dividend equivalents of $5,196 (see “Dividends and Dividend Equivalents”), and repurchases of Common Stock of $886 (see “Treasury Purchases” and “Share Repurchases”). Cash used in financing activities for the year to date ended June 30, 2025 was $33,103, due to net payments on debt of $24,200 (see “Long-Term and Short-Term Debt”), payments of dividends and dividend equivalents of $5,156 (see “Dividends and Dividend Equivalents”), payments of loan fees related to borrowings of $2,712, and repurchases of Common Stock of $1,035 (see “Treasury Purchases” and “Share Repurchases”). Treasury Purchases. 150,350 RSUs vested and converted to shares of Common Stock for employees during the year to date ended June 30, 2026, of which we withheld and purchased for treasury 34,415 shares valued at $886 to cover payment of associated withholding taxes. 105,776 RSUs vested and converted to shares of Common Stock for employees during the year to date ended June 30, 2025, of which we withheld and purchased for treasury 31,631 shares valued at $1,035 to cover payment of associated withholding taxes. Share Repurchases. 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 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, 2026 and 2025 we did not repurchase any shares of Common Stock under the share repurchase program. As of June 30, 2026, there was approximately $53,412 remaining under the share repurchase program. 35 Dividends and Dividend Equivalents Dividend and Dividend Equivalent Information (per Share and Unit) Declaration date Record date Payment date Declared(a) Paid(a) Dividend payment Dividend equivalent payment(b) Total payment 2026 February 25, 2026 March 13, 2026 March 27, 2026 $ 0.12 $ 0.12 $ 2,564 $ 34 $ 2,598 April 29, 2026 May 15, 2026 May 29, 2026 0.12 0.12 2,565 33 2,598 $ 0.24 $ 0.24 $ 5,129 $ 67 $ 5,196 2025 February 26, 2025 March 14, 2025 March 28, 2025 $ 0.12 $ 0.12 $ 2,553 $ 25 $ 2,578 May 1, 2025 May 16, 2025 May 30, 2025 0.12 0.12 2,553 25 2,578 $ 0.24 $ 0.24 $ 5,106 $ 50 $ 5,156 (a) Per share amount. (b) Dividend equivalent payments on unvested participating securities. On July 29, 2026, we announced a dividend payable to stockholders of record of our Common Stock, resulting in dividend equivalents payable to certain RSU holders, of $0.12 per share and per RSU. The dividend and dividend equivalents are payable on August 28, 2026 to stockholders of record and certain RSU holders as of August 14, 2026. 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, Board-approved dividends, and share repurchase activities), and the overall cost of capital. Total debt was $369,596 (net of unamortized loan fees of $7,254) at June 30, 2026, and $252,318 (net of unamortized loan fees of $7,732) at December 31, 2025. We had net proceeds on debt of $116,800 and net payment on debt of $24,200 for year to date ended June 30, 2026 and 2025, respectively.