In its latest annual report, MGP Ingredients (MGPI), a maker of distilled spirits, and food ingredients, revealed multiple accounting errors made the previous year. First, the company disclosed balance sheet errors related to Property, Plant & Equipment (PP&E) but did not prominently quantify the impact as the total remained unchanged.

In comparing the most recent annuals— investors were not provided a reconciliation in the latest— we discovered that in 2021 MGP:

—Overstated land, building & improvements by $7.8 million, or 3.76% of net PP&E
—Overstated machinery and equipment by $16.1 million, or 7.77% of net PP&E
—Overstated accumulated depreciation and amortization by $24.1 million, or 10.90% of accumulated D&A

MGP characterized the mistakes as immaterial and revised the prior year’s PP&E in the latest filing rather than restating them.

Second, MGP also miscalculated diluted earnings earnings per share (EPS) for 2021 as well. The company understated the measure, disclosing it actually earned $4.37 per share rather than $4.34.

Again, the company provided no explanation for the error. In comparing the filings, MGP inaccurately calculated the number of diluted shares outstanding. In the 2022 annual, MGP revised the 2021 diluted share count down by more than a quarter million shares, or 1.25%.