MGP Ingredients, Inc. Sends Letter to Stockholders From Chairman John Speirs

MGP Ingredients, Inc. Sends Letter to Stockholders From Chairman John Speirs

Independent Chairman John Speirs Discusses the Company's Plan to Create
Stockholder Value and Commitment to the Atchison Community

Recommends Stockholders Vote MGP's WHITE Proxy Card and Reject the Cray
Group's Nominees and Proposals

ATCHISON, Kan., July 25, 2013 (GLOBE NEWSWIRE) -- MGP Ingredients, Inc.
(Nasdaq:MGPI) (the "Company") today announced that it sent a letter urging
stockholders to reject the Cray Group's dissident nominees and proposals by
signing, dating and returning MGP's WHITE proxy card.

Included below is the full text of the letter to MGP stockholders, which can
also be found at



  I have been fortunate to serve on the MGP Board since 2004 and as Chairman
  since 2009. I was very familiar with MGP through my work with them as a
  client of Stellus Consulting, a Minneapolis-based strategy consulting firm I
  co-founded, as well as through my 35 years of leadership experience across
  companies in the food and alcohol industries including, Diageo PLC,
  Pillsbury and Lever Brothers.

  Bud Cray, the Chairman at the time, and Ladd Seaberg, the CEO, asked me to
  join the Board, which I did because I had tremendous respect for them and
  MGP, and I was excited about its future potential. Importantly, I also
  appreciated that the founding Cray family wanted to bring in professional
  leadership to help take MGP to the next level and ensure ALL stockholders
  would benefit. It was – and is today – a place where I felt my skills and
  experience could be put to good use helping a great company grow and


  Independent directors are members of the Board of Directors who are not part
  of the management team. In companies where there is a very large owner, like
  the Cray family at MGP, independent also means people who are not in some
  way connected with the family.

  In a company like MGP, where the Cray family controlsover 90% of the
  preferred stock and owns 27.5% of the common stock, it's especially
  important that independent directors have a voice and are able to speak for
  and act in the best interests of all stockholders.Because they control
  nearly all of the "preferred" shares, the Cray Group can elect five of the
  nine directors on the Board.That means they can pick whomever they want for
  those five seats and common stockholders like you can do nothing about it.

  This year, three Board seats are up for election – two that the Cray family
  controls and one that common stockholders can vote on.The seat I am in is
  the only one over which common stockholders have a say this year, and now
  the Cray Group wants to fill that seat with their own hand-picked
  nominee.Also, several of the Cray Group's proposed governance changes, if
  adopted all together, would give the Cray Group the ability to dismiss and
  elect certain directors whenever they want for any reason.

  We believe that the governance changes and Board nominations, together with
  their control over the preferred stock, would give the Cray Group a clear
  path to asserting dominance over MGP, which would undermine the very
  independence that must exist at public companies.In our view, MGP would
  become a quasi-private, family-run company and common stockholders would get
  nothing in return for handing the Cray Group the keys to MGP.

  All of the directors on the Board, except apparently for the two Cray family
  representatives, firmly believe stockholders should act to make sure strong,
  independent voices remain on MGP's Board.Remember, Mrs. Seaberg and the
  Cray Group previously thought that your independent directors were valuable
  to MGP because they voted them onto the current Board.In the end, I believe
  a stronger MGP is better for our stockholders, customers, employees and
  community and that's what my fellow independent directors and I are trying
  to achieve.


  For many years, despite doing some things right, MGP didn't make important
  investments in its physical plant, technology and employees, leaving it at a
  significant competitive disadvantage.MGP was not prepared to adapt to the
  changing economy.Over the past few years, my fellow independent directors
  and I, along with our talented management team, have changed that.

  MGP's focus for much of its existence has been on the production and
  commercialization of beverage and industrial grade alcohol and specialty
  wheat proteins and wheat starches for both food and non-food uses.That
  business served MGP well for years, but with greater competition and severe
  swings in commodity prices it wasn't generating the profits it used to.It
  was time to look for new opportunities.

  We saw those opportunities in higher value added products in the premium
  alcohol business, like bourbons and whiskeys.I know this business very well
  through my years in the spirits industry, and I knew it represented an
  opportunity to break away from commodity influence and solidify MGP as a
  serious competitor in premium spirits and flavor innovations where the
  profits are higher, there are fewer competitors, and MGP has a solid
  starting position.

  So we have focused on premium distilled spirits, as well as nutritional
  health innovations, while also ensuring we remain a low cost industrial
  alcohol producer.We have been able to make these strategic changes while
  improving the systems and accountability throughout the organization
  enabling us to increase the return we generate on our assets from about 6%
  between 2005 and 2009 to over 18% from 2010 to 2013.Just like in any
  transformation, there have been highs and lows, but we firmly believe MGP is
  on the right path and we are seeing results.

  We are doing more business with existing customers and serving important new
  customers.Over the past four years, we have nearly doubled our mix of high
  value added sales, increasing from an average of 44% between 2005 and 2009
  to an average of 82% from 2010 to 2013.The first quarter of 2013 marked
  MGP's fourth consecutive quarter of growth in income from operations,
  reaching $1.2 million compared to a loss of $2.3 million in the prior year
  and over the same period our percentage of profit on sales more than doubled
  from 3% to 8%. These are early signs, but significant ones, and we believe
  the beginning of MGP's return to sustainable profitability, long-term growth
  and driving value for ALL stockholders.


  Part of our strategic shift included investing in the business, which in
  turn was an investment in the communities where we operate.For example,
  this Board directed the investment of $27 million into the expansion and
  upgrade of MGP's facilities in Atchison, including the construction of a
  Technical Innovation Center and the installation of a $10 million
  closed-circuit water cooling system to bring MGP into compliance with
  environmental emissions standards.We also made additional investments
  beyond the $27 million in important quality and safety upgrades and improved
  our financial reporting systems so we could manage the business better.As a
  result, our operations run at higher profitability, use less energy and we
  utilize our assets more efficiently.We are heavily invested in the Atchison
  community.The bottom line is a stronger MGP is better for Atchison, and our
  stockholders, and we've done a lot to make sure MGP remains strong for many
  years to come.


  As independent directors we have been very clear, for as long as we remain
  directors, we plan to keep MGP headquartered in Atchison.We believe a
  strong MGP is good for Atchison, our employees, our customers and our
  stockholders.We have undertaken considerable efforts to strengthen MGP's
  position with that in mind.

  We also recognize the need to continually evolve. To ensure we are exploring
  all avenues to maximizing value for stockholders, the independent members of
  the Board are looking at everything to make sure we are on the path that
  will create the most value. Contrary to the Cray Group's statements, this
  does not necessarily mean MGP, or even pieces of the business will be sold.


  Tim is an excellent CEO.He has led MGP through a number of important
  changes and helped to establish a path to future growth for the company.Tim
  is a long-time veteran of MGP and an Atchison "lifer."He has worked his way
  up from distillery shift manager through various operating roles before
  being selected by the Board, including by Bud and Karen, to take over as
  MGP's first non-family member CEO.

  He knows this business inside and out, probably more than anyone else at
  MGP.He has successfully overseen the implementation of our strategy,
  including process improvements across nearly every aspect of the business
  and the acquisition of our Lawrenceburg distillery.He has worked hard to
  create an open, supportive and performance-focused culture at MGP, and as a
  result has attracted and retained top talent with experience from large
  consumer packaged goods companies.In addition, he has motivated and excited
  the team with the new direction we have been taking the company, leading to
  low levels of employee departures.And this is not just our viewpoint.The
  Board has received comments from our customers, suppliers and the banks that
  provide our financing praising Tim and his management team for MGP's
  strategy and the progress they have made in implementing it.

  We are at a critical juncture in MGP's transformation.Even Karen Seaberg
  acknowledges that we are on the right path.We are seeing the focus on
  premium products gain traction and beginning to see early returns come
  in.To switch management at this point and lose an important architect of
  the reinvigorated business we believe would be detrimental to MGP, to you as
  a common stockholder, and to Atchison.

  All of us independent directors recognize the contributions Tim has made to
  MGP and we also have worked hard to make sure that compensation for Tim and
  the other executives aligns their pay with performance.Establishing the
  high levels of performance and personal accountability that stockholders
  expect from a public company has been an important part of our

  Karen and Bud have been part of those discussions and approved (not just
  once, but twice in the last year) the very pay packages they are now
  criticizing.It is puzzling that Mrs. Seaberg, as the leader of the Cray
  Group, has so suddenly turned on management, especially since the Cray
  family themselves openly supported Tim to be the first non-family member CEO
  of MGP and furthermore, picked him to serve on the family's trust.


  Vote the WHITE proxy card.We sent you one of these cards with our proxy
  statement and there's another one with this mailing.You can use either of
  them.You'll see on the WHITE card instructions for how to vote in three
  different ways.You can pick to vote by telephone, Internet, or by
  mail.Under no circumstances should you use the Cray Group's gold proxy
  card.You can put it in the recycling bin.

  Thank you for taking the time to stay informed.We appreciate your continued
  support of MGP and urge you to vote the WHITE proxy card today.


  /s/ John R. Speirs
  John R. Speirs
  Chairman of the Board


   If you have questions about how to vote your shares, or need additional
assistance, please contact the firm assisting us in the solicitation of proxy

                          Innisfree M&A Incorporated

                 Stockholders Call Toll-Free: (888) 750-5834

                    Banks and Brokers Call: (212) 750-5833


                       Vote the White Proxy Card today!




This letter contains forward-looking statements as well as historical
information. Forward-looking statements are usually identified by or are
associated with such words as "intend," "plan," "believe," "estimate,"
"expect," "anticipate," "hopeful," "should," "may," "will," "could,"
"encouraged," "opportunities," "potential" and/or the negatives of these terms
or variations of them or similar terminology. 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. All such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking statement.
Investors should not place undue reliance upon forward-looking statements and
MGP undertakes no obligation to publicly update or revise any forward-looking
statements. Important factors that could cause actual results to differ
materially from our expectations include, among others: (i) disruptions in
operations at our Atchison facility or Indiana Distillery, (ii) the
availability and cost of grain and fluctuations in energy costs, (iii) the
effectiveness of our hedging strategy, (iv) the competitive environment and
related market conditions, (v) the ability to effectively pass raw material
price increases on to customers, (vi) the viability of the Illinois Corn
Processing, LLC ("ICP") joint venture and its ability to obtain financing,
(vii) our ability to maintain compliance with all applicable loan agreement
covenants, (viii) our ability to realize operating efficiencies, (ix) actions
of governments, (x) and consumer tastes and preferences. For further
information on these and other risks and uncertainties that may affect our
business, including risks specific to our Distillery and Ingredient segments,
see Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended
December 31, 2012.


MGP Ingredients, Inc., its directors, and certain of its officers are
participants in the solicitation of proxies from MGP stockholders in
connection with MGP's 2013 Annual Meeting of Stockholders.Important
information concerning the identity and interests of these persons is
available in the definitive proxy statement that MGP filed with the SEC on
April 11, 2013 as subsequently supplemented or amended, including the amended
definitive materialsdated July 12, 2013.

The definitive proxy statement, any other relevant documents and other
materials filed with the SEC concerning MGP are available free of charge at and Stockholders should carefully read the
definitive proxy statement, including supplements there to, before making any
voting decision.

CONTACT: Investors & Analysts:
         George Zagoudis, Investor Relations
         913-360-5441 or
         Shanae Randolph, Corporate Director of Communications
         913-367-1480 or

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