<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2000 - Commission File No. 0-17196
MIDWEST GRAIN PRODUCTS, INC.
----------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
KANSAS 48-0531200
--------------------------- ------------------
(State or Other Jurisdiction of IRS Employer
Incorporation or Organization) Identification No.
130O Main Street, Atchison, Kansas 66002
----------------------------------------------------
(Address of Principal Executive Offices and Zip Code)
(913) 367-1480
------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to the filing
requirements for at least the past 90 days.
X YES NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
792410.1
Common stock, no par value
8,869,372 shares outstanding
as of May 1, 2000.
<PAGE>
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
Independent Accountants' Review Report.................. 2
Condensed Consolidated Balance Sheets as of
March 31, 2000 and June 30, 1999........................ 3
Condensed Consolidated Statements of Income for
the Three Months and Nine Months Ended March 31,
2000 and 1999........................................... 5
Condensed Consolidated Statements of Cash Flows for
the Nine Months Ended March 31, 2000 and 1999........... 6
Note to Condensed Consolidated Financial Statements..... 7
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations................. 8
-----------------------------------
Item 3. Quantitative and Qualitative Disclosures about Market
Risk ............................................... 13
PART II. OTHER INFORMATION
Item 6. Exhibita and Reports on Form 8-K................. 14
--------------------------------
<PAGE>
[LOGO]
Baird, Kurtz & Dobson
City Center Square
1100 Main, Suite 2700
Kansas City, Missouri 64105
816 221-6300 FAX 816 221-6380
www.bkd.com
Independent Accountants' Review Report
--------------------------------------
Board of Directors and Stockholders
Midwest Grain Products, Inc.
Atchison, Kansas 66002
We have reviewed the condensed consolidated balance sheets of MIDWEST GRAIN
PRODUCTS, INC. and subsidiaries as of March 31, 2000, and the related condensed
consolidated statements of income for the three month and nine month periods
ended March 31, 2000 and 1999, and the related condensed consolidated statements
of cash flows for the nine month periods ended March 31, 2000 and 1999. These
financial statements are the responsibility of the Company's management. We
conducted our reviews in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion. Based on our reviews, we are not
aware of any material modifications that should be made to the accompanying
condensed consolidated financial statements for them to be in conformity with
generally accepted accounting principles. We have previously audited, in
accordance with generally accepted auditing standards, the consolidated balance
sheet as of June 30, 1999, and the related consolidated statements of income,
stockholders' equity and cash flows for the year then ended (not presented
herein); and, in our report dated July 30, 1999, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of June 30, 1999, is fairly stated in all material respects in relation to
the consolidated balance sheet from which it has been derived.
s/Baird, Kurtz & Dobson
BAIRD, KURTZ & DOBSON
Member of
Moores Rowland International
Kansas City, Missouri
April 26, 2000
Solutions for Success
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
ASSETS
March 31, June 30,
2000 1999
----------- --------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 3,881 $ 4,054
Receivables 30,036 26,656
Inventories 23,744 24,450
Prepaid expenses 1,399 1,174
Deferred income taxes 3,034 3,034
---------- ----------
Total Current Assets 62,094 59,368
---------- ----------
PROPERTY AND EQUIPMENT, At cost 229,078 224,381
Less accumulated depreciation 136,356 126,465
---------- ----------
92,722 97,916
---------- ----------
OTHER ASSETS 137 86
TOTAL ASSETS $ 154,953 $ 157,370
========== ==========
See Accompanying Note to Condensed Consolidated
Financial Statements and Independent Accountants'
Review Report
-3-
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(In Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, June 30,
2000 1999
----------- --------
(Unaudited)
CURRENT LIABILITIES
Current maturities of long-term debt $ 2,357 $ 2,433
Accounts payable 9,410 9,129
Accrued expenses 3,592 4,296
Income taxes payable 2,313 457
---------- ----------
Total Current Liabilities 17,672 16,315
---------- ----------
LONG-TERM DEBT 18,681 21,099
---------- ----------
POST-RETIREMENT BENEFITS 6,197 6,312
---------- ----------
DEFERRED INCOME TAXES 8,199 8,199
---------- ----------
STOCKHOLDER' EQUITY
Capital stock
Preferred, 5% noncumulative,
$10 par value; authorized
1,000 shares; issued and
outstanding 437 shares 4 4
Common, no par; authorized
20,000,000 shares; issued
9,765,172 shares 6,715 6,715
Additional paid-in capital 2,485 2,485
Retained earnings 103,104 99,183
----------- ---------
112,308 108,387
Treasury stock, at cost
Common; March 31, 2000 -
829,600 shares
June 30, 1999 - 239,100 shares (8,104) (2,942)
------------ ----------
Total Stockholders' Equity 104,204 105,445
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 154,953 $ 157,370
=========== ==========
See Accompanying Note to Condensed Consolidated
Financial Statements and Independent Accountants'
Review Report
-4-
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands)
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
Three Months Nine Months
------------------- -------------------
2000 1999 2000 1999
------ ------ ------ ------
NET SALES $57,656 $56,958 $172,593 $ 162,813
COST OF SALES 51,610 53,643 156,367 148,995
------ ------ ------- -------
GROSS PROFIT 6,046 3,315 16,226 13,818
SELLING, GENERAL AND ADMINIS-
TRATIVE EXPENSES 3,154 2,512 8,835 8,680
----- ----- ----- -----
2,892 803 7,391 5,138
OTHER OPERATING INCOME 1 40 45 145
----- ----- ----- -----
INCOME FROM OPERATIONS 2,893 843 7,436 5,283
OTHER INCOME (LOSS)
Interest (354) (467) (1,115) (1,553)
Other 119 7 161 117
---- ----- ------ -----
INCOME BEFORE INCOME TAXES 2,658 383 6,482 3,847
PROVISION FOR INCOME TAXES 1,051 151 2,561 1,519
----- --- ----- -----
NET INCOME $ 1,607 $ 232 $ 3,921 $ 2,328
===== === ===== =====
EARNINGS PER COMMON SHARE $ .18 $ .02 $ .43 $ .24
=== === === ===
See Accompanying Note to Condensed Consolidated
Financial Statements and Independent Accountants'
Review Report
-5-
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
NINE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,921 $ 2,328
Items not requiring (providing) cash:
Depreciation 10,095 10,197
(Gain) loss on sale of equipment 6 (19)
Changes in:
Accounts receivable (3,380) 1,780
Inventories 706 (7,637)
Prepaid expenses and other assets (276) (385)
Accounts payable (38) 1,123
Accrued expenses (819) (75)
Income taxes receivable/payable 1,856 2,521
----- -----
Net cash provided by operating activities 12,071 9,833
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (4,594) (5,071)
Proceeds from sale of equipment 6 31
------ ------
Net cash used in investing activities (4,588) (5,040)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury stock (5,162) (1,704)
Net payments on long-term debt (2,494) (2,322)
Net proceeds from issuance of long-term debt - 2,000
------ ------
Net cash used in financing activities (7,656) (2,026)
------ ------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (173) 2,767
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,054 4,723
----- -----
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,881 $ 7,490
======= ==========
See Accompanying Note to Condensed Consolidated
Financial Statements and Independent Accountants'
Review Report
6
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 2000
(Unaudited)
NOTE 1: GENERAL
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to present
fairly the Company's condensed consolidated financial position as of March 31,
2000, and the condensed consolidated results of its operations and its cash
flows for the periods ended March 31, 2000 and 1999, and are of a normal
recurring nature.
The condensed consolidated balance sheet as of June 30, 1999 has been
derived from the audited consolidated balance sheet as of that date.
See Independent Accountants' Review Report
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000
Item 2.
RESULTS OF OPERATIONS
General
The Company's net income of $1,607,000 in the third quarter of fiscal 2000
represented a significant improvement over the net income of $232,000 that was
experienced in the third quarter of fiscal 1999. The increase was principally
due to the effects of heightened demand for the Company's vital wheat gluten,
specialty and modified wheat proteins and wheat starches. Lower per unit costs
for grain also contributed to the increase. These conditions partially offset
the impact of reduced selling prices for the Company's alcohol products
resulting from the continuation of excess alcohol supplies throughout the
industry. To improve alcohol production efficiencies long-term, the Company
currently is installing new distillation equipment at its Atchison plant. The
project is scheduled for completion in the first quarter of fiscal 2001 and is
expected to further enhance the Company's high quality food grade alcohol. In
addition, the Company currently is experiencing increased demand for its fuel
grade alcohol.
While the nearly two-year-old quota on imports of foreign wheat gluten has
helped reduce some of the severe effects of excessive, artificially-priced
gluten shipments from the European Union, the Company has seen a substantial
increase in shipments from other parts of the world, particularly Poland. Also,
with the opening of the third year of the quota on June 1, the market could
experience a rapid influx of imports as individual foreign producers accelerate
efforts to move product into the U.S. before quota limits placed on their
respective countries are met. With the realization of stable to lower wheat
prices in the months ahead, the Company would expect the impact of these
conditions to be partially offset. In addition, the Company expects to realize
continued growth in sales of its specialty wheat proteins, which are derived
from wheat gluten and marketed for use in a variety of value-added food and
non-food applications.
Third quarter sales of wheat starch were boosted largely by heightened demand
for the Company's modified and specialty starches. To further serve customers'
requirements for these unique ingredients, the Company recently completed the
installation of additional production capacity at its Atchison plant.
Sales
Net sales in the third quarter of fiscal 2000 increased nearly $700,000 above
net sales in the third quarter of fiscal 1999. The increase resulted principally
from higher sales of wheat gluten and premium wheat starch.
Growth in wheat gluten sales in the third quarter occurred as the result of
higher unit sales of wheat gluten and specialty wheat proteins together with a
modest improvement in selling prices.
Sales of wheat starch increased as the result of higher unit sales, while
selling prices for this product were slightly below selling prices in the third
quarter of fiscal 1999. The lower selling prices occurred with a reduction in
raw material prices for wheat.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000
Third quarter alcohol sales dropped below the level reached a year ago due to a
decrease in total unit sales along with lower selling prices for fuel grade
alcohol and food grade alcohol for beverage applications. The decline in alcohol
selling prices was due to lower demand caused mainly by the continuation of
excess supplies throughout the industry. In the final quarter of fiscal 2000,
however, fuel alcohol prices have taken an upturn as demand has risen. Sales of
distillers' feed, the principal by-product of the alcohol production process,
dropped below sales of a year ago. This was due to lower unit sales as the
selling price was approximately even with the same period the prior year.
Net sales for the first nine months of fiscal 2000 increased by approximately
$9. 8 million above net sales for the first nine months of fiscal 1999. The
majority of this increase occurred in the second quarter for the same reasons as
cited above.
Cost of Sales
The cost of sales in the third quarter of fiscal 2000 decreased by approximately
$2.0 million compared to cost of sales in the third quarter of fiscal 1999. The
decrease was principally due to lower alcohol sales and lower per unit grain
costs.
The cost of sales for the first nine months of fiscal 2000 rose by approximately
$7.4 million above the cost of sales for the first nine months the prior year.
This was due to higher energy and manufacturing costs together with costs
associated with increased volume sales, largely of gluten and alcohol products.
Lower per unit grain prices partially offset the higher costs resulting from
increased volumes.
In connection with the purchase of raw materials, principally corn and wheat,
for anticipated operating requirements, the Company enters into commodity
contracts to reduce or hedge the risk of future grain price increases. The
contracts are accounted for as hedges and, accordingly, gains and losses are
deferred and recognized in cost of sales as part of contract costs when contract
positions are settled and as related products are sold. For the third quarter of
fiscal 2000, no contracts settled during the quarter while a net hedging loss of
approximately $836,000 was experienced for the third quarter of fiscal 1999. For
the first nine months of fiscal 2000, raw material costs included a net hedging
loss of $1,204,000 on contracts compared to a net hedging loss of $2,908,000 for
the first nine months the prior year.
Selling General and Administrative Expenses
Selling, general and administrative expenses in the third quarter of fiscal 2000
increased by approximately $642,000 above selling, general and administrative
expenses in the third quarter of fiscal 1999. The increase was due largely to
employee-related costs, industry association fees and costs related to increased
marketing activities. These same factors, along with higher technology costs,
resulted in an increase of approximately $155,000 in selling, general and
administrative expenses for the first nine months of fiscal 2000 compared to the
first nine months of fiscal 1999. A sizeable reduction in bad debts partially
offset this increase.
The consolidated effective income tax rate is consistent
for all periods. The general effects of inflation were minimal.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000
Net Income
As the result of the foregoing factors, the Company experienced net income of
$1,607,000 in the third quarter of fiscal 2000 compared to net income of
$232,000 in the third quarter of fiscal 1999. For the first nine months of
fiscal 2000, the Company had net income of $3,921,000 versus net income of
$2,328,000 for the first nine months of fiscal 1999.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000
LIQUIDITY AND CAPITAL RESOURCES
The following table is presented as a measure of the Company's liquidity and
financial condition:
March 31, June 30,
2000 1999
-------- -------
(in thousands)
Cash and cash equivalents $ 3,881 $ 4,054
Working capital 44,422 43,053
Amounts available under lines of credit 23,000 33,000
Notes payable and long-term debt 21,038 23,532
Stockholders' equity 104,204 105,445
Short-term liquidity continues to be impacted by the high inventory requirements
to meet anticipated customer needs for wheat gluten. While still at high levels,
gluten inventories have moderated somewhat during the past two quarters due to
higher sales volumes and lower costs. As expected, the increased customer
requirements result from the three-year import quota to create a more fair and
stable competitive environment. The Company anticipates maintaining this high
level to satisfy customer needs throughout fiscal 2000. Additionally, alcohol
inventories have remained level as sales have approximated production, but
excess supplies still exist throughout the industry.
Short-term liquidity was also impacted by open market purchases of 590,500
shares of the Company's common stock. These purchases were made to fund the
Company's stock option plans and for other corporate purposes.
At March 31, 2000, the Company had $6.8 million committed to improvements in
production efficiencies and replacements of existing equipment, which includes
the equipment described in the first and third paragraphs on page 8.
The Company continues to maintain a strong working capital position and a low
debt-to-equity ratio while generating strong earnings before interest, taxes
and depreciation. Management believes this strong financial position and
available lines of credit will allow the Company to effectively supply the
increased customer needs for vital wheat gluten as market demand increases due
to the effects of the quotas on imports of foreign wheat gluten, as well as its
other products.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000
FORWARD-LOOKING INFORMATION
This report contains forward-looking statements as well as historical
information. Forward-looking statements are identified by or are associated with
such words as "intend," "believe," "estimate," "expect," "anticipate," "hopeful"
and similar expressions. They reflect management's current beliefs and estimates
of future economic circumstances, industry conditions, Company performance and
financial results and are not guarantees of future performance. The
forward-looking statements are based on many assumptions and factors including
those relating to grain prices, energy costs, product pricing, competitive
environment and related market conditions, operating efficiencies, access to
capital and actions of governments. Any changes in the assumptions or factors
could produce materially different results than those predicted and could impact
stock values.
12
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 2000
Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company produces its products from wheat, corn and milo and, as such,
is sensitive to changes in commodity prices. Grain futures and/or options are
used as a hedge to protect against fluctuations in the market. The information
regarding inventories and futures contracts at June 30, 1999, as presented in
the annual report, is not significantly different from March 31, 2000.
13
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
15.1 Letter from independent public accountants pursuant to
paragraph (d) of Rule 10-01 of Regulation S-X (incorporated
by reference to Independent Accountants' Review Report at
page 2 hereof.)
15.2 Letter from independent public accountants concerning the
use of its Review Report in the Company's Registration
Statement No. 333-51849.
27 Financial Data schedule for the quarter ending March 31,
2000
99 Press Release dated May 9, 2000 (w/o financial statements).
(b) Reports on Form 8-K
The Company has filed no reports on Form 8-K during the quarter
ended March 31, 2000.
14
<PAGE>
MIDWEST GRAIN PRODUCTS, INC.
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 thereunto duly authorized.
MIDWEST GRAIN PRODUCTS, INC.
s/Ladd M. Seaberg
Date: May 11, 2000 By________________________________
Ladd M. Seaberg, President
and Chief Executive Officer
s/Robert G. Booe
Date: May 11, 2000 By________________________________
Robert G. Booe, Vice President
and Chief Financial Officer
15
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
15.1 Letter from independent public accountants pursuant to
paragraph (d) of Rule 10-01 of Regulation S-X (incorporated
by reference to Independent Accountants' Review Report at
page 2 hereof.)
15.2 Letter from independent public accountants concerning the
use of its Review Report in the Company's Registration
Statement No. 333-51849.
27 Financial Data schedule for the quarter ending March 31,
2000
99 Press Release dated May 9, 2000 (w/o financial statements).
<PAGE>
Exhibit 15.2
[LOGO]
Baird, Kurtz & Dobson
City Center Square
1100 Main, Suite 2700
Kansas City, Missouri 64105
816 221-6300 FAX 816 221-6380
www.bkd.com
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated April 26,2000 on our review of the
interim financial information of Midwest Grain Products, Inc. for the periods
ended March 31, 2000 and 1999 is incorporated by reference in this registration
statement. Pursuant to Rule 436(c) under the Securities Act of 1933, this report
should not be considered part of the registration statement prepared or
certified by us within the meaning of Sections 7 and 11 of that Act.
s/ Baird, Kurtz & Dobson
BAIRD, KURTZ & DOBSON
Member of
Moores Rowland International
Kansas City, Missouri
April 26, 2000
Solutions for Success
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
MIDWEST GRAIN PRODUCTS, INC. CONSOLIDATED STATEMENT OF INCOME FOR
THE NINE MONTHS ENDED MARCH 31, 2000 AND CONSOLIDATED BALANCE
SHEET AS AT MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000835011
<NAME> MIDWEST GRAIN PRODUCTS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
<PERIOD-END> MAR-31-2000
<CASH> 3,881
<SECURITIES> 0
<RECEIVABLES> 30,036<F1>
<ALLOWANCES> 285
<INVENTORY> 23,744
<CURRENT-ASSETS> 62,094
<PP&E> 229,078
<DEPRECIATION> 136,356
<TOTAL-ASSETS> 154,953
<CURRENT-LIABILITIES> 17,672
<BONDS> 18,681
<COMMON> 6,715
0
4
<OTHER-SE> 97,485<F2>
<TOTAL-LIABILITY-AND-EQUITY> 154,953
<SALES> 172,593
<TOTAL-REVENUES> 172,593
<CGS> 156,367
<TOTAL-COSTS> 165,202<F3>
<OTHER-EXPENSES> (45)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,115)
<INCOME-PRETAX> 6,482
<INCOME-TAX> 2,561
<INCOME-CONTINUING> 3,921
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,921
<EPS-BASIC> .43
<EPS-DILUTED> .43
<FN>
<F1> Reflects Receivables less Allowances.
<F2> Reflects retained earnings and additional paid in captial
less cost of Treasury Stock.
<F3> Reflects cost of sales and selling, general &
administrative expenses.
</FN>
</TABLE>
<PAGE>
Exhibit 99
[Midwest Grain Products Logo and Address]
News Release
FOR IMMEDIATE RELEASE: MIDWEST GRAIN REPORTS SIGNIFICANT INCREASE
IN THIRD QUARTER EARNINGS
ATCHISON, Kan., May 8, 2000--Midwest Grain Products, Inc. (MWGP), today
reported that the company's net income for the third quarter of fiscal 2000
climbed to $1,607,000, or 18 cents per share, significantly overshadowing the
prior year's third quarter net income of $232,000, or 2 cents per share. Sales
for the period, which ended March 31, 2000, were $57,656,000 compared to sales
of $56,958,000 for the third quarter of fiscal 1999.
For the first nine months of fiscal 2000, the company had net income of
$3,921,000, or 43 cents per share, on sales of $172,593,000, compared to net
income of $2,328,000, or 24 cents per share, on sales of $162,813,000 for the
first nine months of fiscal 1999.
According to Ladd Seaberg, president and chief executive officer, the
third quarter earnings improvement resulted primarily from increased demand for
vital wheat gluten, specialty wheat proteins and wheat starches. Lower raw
material costs for grain on a per unit basis also had a favorable impact on the
quarter's results, he noted. The company's third quarter alcohol sales,
meanwhile, continued to be subjected to tight market conditions, squeezing
selling prices below levels of a year ago. However, Seaberg reported, alcohol
sales currently are benefitting from increased demand and improved pricing in
the fuel grade sector.
Seaberg also reported that steady growth is expected to continue in
sales of the company's value-added wheat-based ingredients, which are produced
and marketed for use in a variety of food and non-food applications. "These
products, consisting of specialty and modified proteins and starches, hold
tremendous promise and are the focal point of our long-term growth strategies,"
Seaberg said. "They continue to effectively prove their ability to satisfy
evolving needs in the marketplace such as helping customers meet growing demand
for products that offer greater consumer convenience, selection and quality."
To strengthen the company's sales capabilities, "we are fortifying our
marketing operations with an enhanced organizational structure that should allow
us to more effectively and rapidly move our products, particularly our specialty
proteins and starches, into a higher growth mode," Seaberg stated. "Measures we
are taking include the creation of an executive vice president's position to
oversee the development and implementation of all marketing and sales programs,
and the addition of experienced formulation scientists to assist our sales
personnel in providing enhanced technical support services to customers.
Additionally, we intend to actively explore possibilities for future
acquisitions and/or relationships that would complement our growth strategies,
add to our profitability and help strengthen stockholder value," he said.
"In the immediate future," Seaberg continued, "we expect fuel alcohol
demand to remain at or near the current higher level through the summer months
when motor fuel usage in this country typically climbs." He added that
grain-based fuel alcohol, or ethanol as it is commonly known, has
<PAGE>
recently gained increased favor in the marketplace as "the safe, effective and
logical answer" to the nation's gasoline oxygenate needs. This has resulted from
the Environmental Protection Agency's recent proposal to phase-out MTBE, a
synthetically-derived oxygenate, as the result of health-related environmental
concerns. Seaberg also pointed out that prices for corn, which is used in the
alcohol production process, have nudged up due mainly to concerns about dry soil
conditions in sections of the nation's grain belt. As a result, improvements in
fuel alcohol prices could be partially offset, he noted.
While continuing at a higher rate than was experienced a year ago, sales of the
company's vital wheat gluten have slackened some since the end of the third
quarter, Seaberg reported. "Although the nearly two-year-old quota on imports of
foreign gluten has helped alleviate some of the severe effects of excessive,
artificially-priced shipments from the European Union, we have seen a
substantial rise in gluten shipments from other parts of the world, most notably
Poland," he said. "Furthermore, with the opening of the third year of the quota
on June 1, the market could be immediately inundated with imports as individual
producers race to beat quota limits placed on their respective countries."
Seaberg indicated that a stabilization or lowering of grain raw material costs
could help counter these conditions in the gluten market.
Seaberg added that actions to improve the effectiveness of the quota presently
are being pursued in Washington. "While there is no certainty as to when or to
what extent additional steps might be taken, further action on this issue would
reinforce the intent of the quota to help create a more level and stable playing
field in the gluten market," Seaberg stated. "Additionally," he said, "it would
demonstrate to the American public and to current and future trade partners that
the United States is sincere about enforcing necessary safeguard measures to
preserve fair trade.
This news release contains forward-looking statements as well as historical
information. Forward- looking statements are identified by or are associated
with such words as "intend," "believe," "estimate," "expect," "anticipate,"
"hopeful," "should," "may" and similar expressions. They reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, company performance and financial results and are not guarantees of
future performance. The forward-looking statements are based on many assumptions
and factors, including those relating to grain prices, gasoline prices, energy
costs, product pricing, competitive environment and related marketing
conditions, operating efficiencies, access to capital and actions of
governments. Any changes in the assumptions or factors could produce materially
different results than those predicted and could impact stock values.
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