The Andersons, Inc. Reports Second Quarter 2019 Results

Published

MAUMEE, Ohio, Aug. 6, 2019 /PRNewswire/ -- The Andersons, Inc. (NASDAQ: ANDE) announces financial results for the second quarter ended June 30, 2019.

Second Quarter Highlights:

  • Company reports net income of $29.9 million, or $0.91 per diluted share, and adjusted net income of $32.3 million, or $0.98 per diluted share.
  • Adjusted EBITDA increases year over year by almost 50 percent to $88.6 million.
  • Trade Group reports pretax income of $23.7 million and adjusted pretax income of $27.0 million on strong corn and wheat basis appreciation and cash trading.
  • Ethanol Group records pretax income of $2.6 million in a challenging margin environment.
  • Plant Nutrient Group records pretax income of $15.9 million despite significantly lower primary and specialty nutrient sales volumes.
  • Rail Group earns $3.2 million of pretax income on steady railcar leasing income.

"Extremely wet weather in many of our core grain origination markets benefited our Trade Group but hurt both our Ethanol and Plant Nutrient Groups during the quarter. The resulting market conditions illustrated perfectly the value of the more diversified, newly integrated portfolio we now operate in our Trade Group," said President and CEO Pat Bowe. "We were able to capitalize on merchandising opportunities caused by grain and feed ingredient price volatility. However, we're concerned about the implications of a smaller corn crop on the utilization of our eastern grain assets for the remainder of this year and into 2020."

 $ in millions, except per share amounts     
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8)
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2)
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2)
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9)
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22)
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6

 $ in millions, except per share amounts      1 Excludes net income (loss) attributable to the noncontrolling interests of ($0.5) in Q2 2019, ($0.1) in Q2 2018, ($0.6) for year-to-date 2019 and ($0.4) for year-to-date 2018.
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8)
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2)
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2)
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9)
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22)
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6

"The Trade Group's adjusted results were strong, as basis appreciation and good merchandising results helped offset weakness in the food and specialty ingredients units," Bowe continued. "The Ethanol Group remained profitable in a considerably compressed margin environment. As expected, the Plant Nutrient Group's results were hurt by substantially lower primary and specialty nutrient volumes due to the wet spring, but margins were stronger, resulting in improved year-over-year pretax income. The Rail Group performed well, primarily due to solid leasing results."  

Further Adjustments Related to the Lansing Acquisition

The company continues to refine its purchase price allocation. While the net adjustments recorded during the quarter were negligible, the group also incurred $0.4 million, or $0.01 per diluted share, of incremental depreciation and amortization expenses based on a revised revaluation of acquired fixed assets and definite-lived intangibles. The group now expects to incur incremental depreciation and amortization of $2.4 million each quarter through 2021.

As it did in the first quarter, the company has recast second quarter 2018 pretax income for the former Grain Group and the Ethanol Group to conform to segment reporting changes made in conjunction with the acquisition of Lansing Trade Group. The changes resulted in a reclassification of $1.2 million in pretax income from the Grain Group to the Ethanol Group. The company expects similar adjustments for each quarter of 2018.

Second Quarter Segment Overview

Trade Group Records Excellent Results on Increased Volatility and Strong Merchandising Results; Announces Pending Sale of Ontario Agronomy Business

With the closing of the Lansing acquisition effective January 1, 2019, Trade Group results now include the consolidated operating results of both Lansing and Thompsons Limited. 

The Trade Group recorded pretax income of $23.7 million and adjusted pretax income of $27.0 million for the quarter. Adjustments include $3.1 million for pretax impairment charges on the Trade Group's remaining Tennessee assets. As noted above, the group also incurred $0.4 million of incremental depreciation and amortization expenses. The former Grain Group recorded pretax income of $8.7 million in the second quarter of 2018.

  • Income from merchandising activities was strong due to significant market volatility.
  • Profit from grain originations and the group's assets was up on significant corn and soft red wheat basis appreciation.
  • The integration of Lansing and Thompsons continued to progress well.

Due in large part to the Lansing acquisition, the group's second quarter 2019 EBITDA and adjusted EBITDA were $44.8 million and $48.0 million, respectively, which reflect improvements in both the legacy and acquired businesses.

The group also announced that it has reached an agreement to sell the agronomy assets of Thompsons Limited, a wholly owned subsidiary in Ontario, Canada, to Sylvite Holdings Inc. of Burlington, Ontario. The sale is expected to close in September 2019. The Andersons will continue to own and operate Thompsons' grain storage and food processing facilities in Ontario.

Ethanol Group Remains Profitable Despite Weak Industry Margins

The Ethanol Group earned pretax income of $2.6 million in the second quarter compared to the $7.3 million of pretax income it earned in the same period in 2018.  

  • Margins were extremely weak, but ethanol and corn oil yields continued to improve.
  • The group selectively reduced production in response to the margin environment
  • Third party ethanol trading increased sales volumes and margins.

The group is in the process of commissioning its state-of-the-art bio-refinery in Kansas in partnership with ICM, Inc. The plant will produce low-carbon ethanol targeted for the higher-margin California market and several higher-value coproducts.

Plant Nutrient Group Income Grows Year Over Year

The Plant Nutrient Group recorded pretax income of $15.9 million in the second quarter compared to pretax income of $15.1 million in the prior year period.

  • For the second consecutive quarter, both primary and specialty nutrient volumes significantly lagged prior year amounts due to unprecedented wet weather across our selling region, reducing planted corn acres.
  • Improved margins per ton driven by cost containment, operational efficiency and product mix offset the impact of the volume shortfall.
  • Inventory carrying costs increased year over year due to delayed and reduced planting.

The group's current quarter EBITDA was $24.9 million, a slight increase over 2018 second quarter results.

Rail Group Results Highlighted by Steady Leasing Income

The Rail Group earned second quarter pretax income of $3.2 million compared to $0.9 million in the same period of the prior year. Prior year results included a $4.7 million impairment charge on railcars the group later scrapped.

  • Railcar leasing income rose year over year on stronger utilization and more cars on lease but was offset in part by increased allowances for doubtful accounts.
  • Income from car sales was negligible.
  • Service and other pretax income fell significantly, largely due to workers compensation and other expenses and lower sales volumes at certain repair facilities.

The group's second quarter 2019 EBITDA of $15.8 million was comparable to second quarter 2018 EBITDA before considering the 2018 impairment charge.

Conference Call

The company will host a webcast on Wednesday, August 7, 2019, at 11 a.m. Eastern Daylight Time, to discuss its performance and provide its updated outlook for 2019. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 9055829). It is recommended that you call 10 minutes before the conference call begins. 

To access the webcast, click on the link: https://edge.media-server.com/mmc/p/izr35eyr. Complete the four fields as directed and click Submit. A replay of the call can also be accessed under the heading "Investors" on the company's website: www.andersonsinc.com.   

Forward-Looking Statements

This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks include economic, weather and regulatory conditions, competition, and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.

Non-GAAP Measures

This release contains non-GAAP financial measures. The company believes adjusted pretax income, adjusted net income, adjusted net income per share, EBITDA and adjusted EBITDA provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and better period-to-period comparability. Adjusted pretax income, adjusted net income, adjusted net income per share, EBITDA and adjusted EBITDA do not and should not be considered as alternatives to pretax income, net income or net income per share as determined by generally accepted accounting principles. Reconciliations of the GAAP to non-GAAP measures may be found within the financial tables provided in the release.

Company Description

Founded in 1947 in Maumee, Ohio, The Andersons, Inc. (Nasdaq: ANDE) is a diversified company rooted in agriculture that conducts business in the commodity trading, ethanol, plant nutrient and rail sectors. Guided by its Statement of Principles, The Andersons strives to provide extraordinary service to its customers, help its employees improve, support its communities and increase the value of the company. For more information, please visit www.andersonsinc.com.

 $ in millions, except per share amounts      1 Excludes net income (loss) attributable to the noncontrolling interests of ($0.5) in Q2 2019, ($0.1) in Q2 2018, ($0.6) for year-to-date 2019 and ($0.4) for year-to-date 2018. The Andersons, Inc.
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance Condensed Consolidated Statements of Operations
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8) (Unaudited)
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6 Three months ended June 30, Six months ended June 30,
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2) (in thousands, except per share data) 2019 2018 2019 2018
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2) Sales and merchandising revenues  $              2,325,041 $                    911,402 $              4,301,833 $                 1,547,141
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6 Cost of sales and merchandising revenues 2,164,313 820,928 4,031,441 1,392,962
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2 Gross profit 160,728 90,474 270,392 154,179
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9) Operating, administrative and general expenses 106,918 59,853 220,267 124,110
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2 Asset impairment 3,081 6,272 3,081 6,272
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22) Interest expense 15,727 7,825 31,637 14,824
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12 Other income:
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7 Equity in earnings (loss) of affiliates (157) 9,803 1,362 13,376
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6 Other income, net 5,563 2,828 4,049 4,514
Income (loss) before income taxes 40,408 29,155 20,818 26,863
Income tax provision (benefit) 10,997 7,742 5,555 7,432
Net income (loss) 29,411 21,413 15,263 19,431
Net income attributable to the noncontrolling interests (477) (116) (632) (398)
Net income (loss) attributable to The Andersons, Inc. $                    29,888 $                      21,529 $                    15,895 $                      19,829
Per common share:
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.92 $                          0.76 $                        0.49 $                          0.70
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.91 $                          0.76 $                        0.48 $                          0.70

 

 $ in millions, except per share amounts      1 Excludes net income (loss) attributable to the noncontrolling interests of ($0.5) in Q2 2019, ($0.1) in Q2 2018, ($0.6) for year-to-date 2019 and ($0.4) for year-to-date 2018. The Andersons, Inc. The Andersons, Inc.
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance Condensed Consolidated Statements of Operations Reconciliation to Adjusted Net Income
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8) (Unaudited) (Unaudited)
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6 Three months ended June 30, Six months ended June 30, Three months ended June 30, Six months ended June 30,
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2) (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2018 2019 2018
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2) Sales and merchandising revenues  $              2,325,041 $                    911,402 $              4,301,833 $                 1,547,141 Net income (loss) attributable to The Andersons, Inc. $                   29,888 $                     21,529 $                   15,895 $                     19,829
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6 Cost of sales and merchandising revenues 2,164,313 820,928 4,031,441 1,392,962 Items impacting other income, net of tax:
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2 Gross profit 160,728 90,474 270,392 154,179 One time acquisition costs (907) - 5,209 -
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9) Operating, administrative and general expenses 106,918 59,853 220,267 124,110 Transaction related stock compensation 1,010 - 3,572 -
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2 Asset impairment 3,081 6,272 3,081 6,272 Asset impairment 2,311 - 2,311 -
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22) Interest expense 15,727 7,825 31,637 14,824
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12 Other income: Total adjusting items 2,414 - 11,092 -
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7 Equity in earnings (loss) of affiliates (157) 9,803 1,362 13,376 Adjusted net income (loss) attributable to The Andersons, Inc. $                   32,302 $                     21,529 $                   26,987 $                     19,829
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6 Other income, net 5,563 2,828 4,049 4,514
Income (loss) before income taxes 40,408 29,155 20,818 26,863 Diluted earnings attributable to The Andersons, Inc. common shareholders $                       0.91 $                         0.76 $                       0.48 $                         0.70
Income tax provision (benefit) 10,997 7,742 5,555 7,432
Net income (loss) 29,411 21,413 15,263 19,431 Impact on diluted earnings per share 0.07 - 0.34 -
Net income attributable to the noncontrolling interests (477) (116) (632) (398) Adjusted diluted earnings (loss) per share $                       0.98 $                         0.76 $                       0.82 $                         0.70
Net income (loss) attributable to The Andersons, Inc. $                    29,888 $                      21,529 $                    15,895 $                      19,829
Per common share:
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.92 $                          0.76 $                        0.49 $                          0.70
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.91 $                          0.76 $                        0.48 $                          0.70

 

 $ in millions, except per share amounts      1 Excludes net income (loss) attributable to the noncontrolling interests of ($0.5) in Q2 2019, ($0.1) in Q2 2018, ($0.6) for year-to-date 2019 and ($0.4) for year-to-date 2018. The Andersons, Inc. The Andersons, Inc. The Andersons, Inc.Condensed Consolidated Balance Sheets(Unaudited)
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance Condensed Consolidated Statements of Operations Reconciliation to Adjusted Net Income
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8) (Unaudited) (Unaudited) (in thousands) June 30, 2019 December 31, 2018 June 30, 2018
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0 Assets
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6 Three months ended June 30, Six months ended June 30, Three months ended June 30, Six months ended June 30, Current assets:
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2) (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2018 2019 2018 Cash and cash equivalents $                    11,087 $                         22,593 $                      58,611
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2) Sales and merchandising revenues  $              2,325,041 $                    911,402 $              4,301,833 $                 1,547,141 Net income (loss) attributable to The Andersons, Inc. $                   29,888 $                     21,529 $                   15,895 $                     19,829 Accounts receivable, net 712,294 207,285 218,476
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6 Cost of sales and merchandising revenues 2,164,313 820,928 4,031,441 1,392,962 Items impacting other income, net of tax: Inventories 753,641 690,804 495,611
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2 Gross profit 160,728 90,474 270,392 154,179 One time acquisition costs (907) - 5,209 - Commodity derivative assets – current 233,015 51,421 54,259
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9) Operating, administrative and general expenses 106,918 59,853 220,267 124,110 Transaction related stock compensation 1,010 - 3,572 - Other current assets 58,439 50,703 42,648
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2 Asset impairment 3,081 6,272 3,081 6,272 Asset impairment 2,311 - 2,311 - Assets held for sale 151 392 9,816
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22) Interest expense 15,727 7,825 31,637 14,824 Total current assets 1,768,627 1,023,198 879,421
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12 Other income: Total adjusting items 2,414 - 11,092 - Other assets:
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7 Equity in earnings (loss) of affiliates (157) 9,803 1,362 13,376 Adjusted net income (loss) attributable to The Andersons, Inc. $                   32,302 $                     21,529 $                   26,987 $                     19,829 Commodity derivative assets – noncurrent 6,161 480 1,008
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6 Other income, net 5,563 2,828 4,049 4,514 Other assets, net 346,531 127,503 138,201
Income (loss) before income taxes 40,408 29,155 20,818 26,863 Diluted earnings attributable to The Andersons, Inc. common shareholders $                       0.91 $                         0.76 $                       0.48 $                         0.70 Right of use asset, net 74,073 - -
Income tax provision (benefit) 10,997 7,742 5,555 7,432 Equity method investments 120,929 242,326 232,159
Net income (loss) 29,411 21,413 15,263 19,431 Impact on diluted earnings per share 0.07 - 0.34 - 547,694 370,309 371,368
Net income attributable to the noncontrolling interests (477) (116) (632) (398) Adjusted diluted earnings (loss) per share $                       0.98 $                         0.76 $                       0.82 $                         0.70 Rail Group assets leased to others, net 559,711 521,785 458,424
Net income (loss) attributable to The Andersons, Inc. $                    29,888 $                      21,529 $                    15,895 $                      19,829 Property, plant and equipment, net 695,827 476,711 408,575
Total assets $              3,571,859 $                    2,392,003 $                 2,117,788
Per common share:
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.92 $                          0.76 $                        0.49 $                          0.70 Liabilities and equity
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.91 $                          0.76 $                        0.48 $                          0.70 Current liabilities:
Short-term debt $                 426,125 $                       205,000 $                    185,000
Trade and other payables 527,250 462,535 282,221
Customer prepayments and deferred revenue 49,761 32,533 16,103
Commodity derivative liabilities – current 69,369 32,647 85,160
Accrued expenses and other current liabilities 165,383 79,046 74,512
Current maturities of long-term debt 66,678 21,589 13,700
Total current liabilities 1,304,566 833,350 656,696
Right of use liability 48,401 - -
Other long-term liabilities 18,398 32,184 30,325
Commodity derivative liabilities – noncurrent 3,985 889 3,202
Employee benefit plan obligations 22,019 22,542 26,131
Long-term debt, less current maturities 1,007,012 496,187 435,580
Deferred income taxes 146,839 130,087 118,864
Total liabilities 2,551,220 1,515,239 1,270,798
Total equity 1,020,639 876,764 846,990
Total liabilities and equity $              3,571,859 $                    2,392,003 $                 2,117,788

 

 $ in millions, except per share amounts      1 Excludes net income (loss) attributable to the noncontrolling interests of ($0.5) in Q2 2019, ($0.1) in Q2 2018, ($0.6) for year-to-date 2019 and ($0.4) for year-to-date 2018. The Andersons, Inc. The Andersons, Inc. The Andersons, Inc.Condensed Consolidated Balance Sheets(Unaudited) The Andersons, Inc.
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance Condensed Consolidated Statements of Operations Reconciliation to Adjusted Net Income Segment Data
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8) (Unaudited) (Unaudited) (in thousands) June 30, 2019 December 31, 2018 June 30, 2018 (Unaudited)
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0 Assets
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6 Three months ended June 30, Six months ended June 30, Three months ended June 30, Six months ended June 30, Current assets: (in thousands) Trade Ethanol Plant Nutrient Rail Other Total
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2) (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2018 2019 2018 Cash and cash equivalents $                    11,087 $                         22,593 $                      58,611 Three months ended June 30, 2019
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2) Sales and merchandising revenues  $              2,325,041 $                    911,402 $              4,301,833 $                 1,547,141 Net income (loss) attributable to The Andersons, Inc. $                   29,888 $                     21,529 $                   15,895 $                     19,829 Accounts receivable, net 712,294 207,285 218,476 Revenues from external customers $             1,766,305 $          245,143 $          270,577 $            43,016 $                     - $           2,325,041
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6 Cost of sales and merchandising revenues 2,164,313 820,928 4,031,441 1,392,962 Items impacting other income, net of tax: Inventories 753,641 690,804 495,611 Gross profit 102,846 4,312 38,798 14,772 - 160,728
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2 Gross profit 160,728 90,474 270,392 154,179 One time acquisition costs (907) - 5,209 - Commodity derivative assets – current 233,015 51,421 54,259 Equity in earnings of affiliates (1,614) 1,457 - - - (157)
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9) Operating, administrative and general expenses 106,918 59,853 220,267 124,110 Transaction related stock compensation 1,010 - 3,572 - Other current assets 58,439 50,703 42,648 Other income, net 3,818 194 570 329 652 5,563
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2 Asset impairment 3,081 6,272 3,081 6,272 Asset impairment 2,311 - 2,311 - Assets held for sale 151 392 9,816 Income (loss) before income taxes 23,731 2,172 15,903 3,180 (4,578) 40,408
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22) Interest expense 15,727 7,825 31,637 14,824 Total current assets 1,768,627 1,023,198 879,421 Income (loss) attributable to the noncontrolling interests - (477) - - - (477)
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12 Other income: Total adjusting items 2,414 - 11,092 - Other assets: Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                   23,731 $               2,649 $            15,903 $              3,180 $             (4,578) $                 40,885
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7 Equity in earnings (loss) of affiliates (157) 9,803 1,362 13,376 Adjusted net income (loss) attributable to The Andersons, Inc. $                   32,302 $                     21,529 $                   26,987 $                     19,829 Commodity derivative assets – noncurrent 6,161 480 1,008
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6 Other income, net 5,563 2,828 4,049 4,514 Other assets, net 346,531 127,503 138,201 Three months ended June 30, 2018
Income (loss) before income taxes 40,408 29,155 20,818 26,863 Diluted earnings attributable to The Andersons, Inc. common shareholders $                       0.91 $                         0.76 $                       0.48 $                         0.70 Right of use asset, net 74,073 - - Revenues from external customers $                   365,100 $            201,758 $            303,106 $              41,438 $                      - $                 911,402
Income tax provision (benefit) 10,997 7,742 5,555 7,432 Equity method investments 120,929 242,326 232,159 Gross profit 33,887 5,862 37,167 13,558 - 90,474
Net income (loss) 29,411 21,413 15,263 19,431 Impact on diluted earnings per share 0.07 - 0.34 - 547,694 370,309 371,368 Equity in earnings of affiliates 5,510 4,293 - - - 9,803
Net income attributable to the noncontrolling interests (477) (116) (632) (398) Adjusted diluted earnings (loss) per share $                       0.98 $                         0.76 $                       0.82 $                         0.70 Rail Group assets leased to others, net 559,711 521,785 458,424 Other income, net 1,248 (476) 622 675 759 2,828
Net income (loss) attributable to The Andersons, Inc. $                    29,888 $                      21,529 $                    15,895 $                      19,829 Property, plant and equipment, net 695,827 476,711 408,575 Income (loss) before income taxes 8,707 7,179 15,124 944 (2,799) 29,155
Total assets $              3,571,859 $                    2,392,003 $                 2,117,788 Income (loss) attributable to the noncontrolling interests - (116) - - - (116)
Per common share: Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                       8,707 $                7,295 $              15,124 $                   944 $              (2,799) $                   29,271
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.92 $                          0.76 $                        0.49 $                          0.70 Liabilities and equity
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.91 $                          0.76 $                        0.48 $                          0.70 Current liabilities:
Short-term debt $                 426,125 $                       205,000 $                    185,000 Six months ended June 30, 2019
Trade and other payables 527,250 462,535 282,221 Revenues from external customers $             3,364,326 $          453,974 $          399,102 $            84,431 $                     - $              4,301,833
Customer prepayments and deferred revenue 49,761 32,533 16,103 Gross profit 171,835 8,120 59,732 30,705 - 270,392
Commodity derivative liabilities – current 69,369 32,647 85,160 Equity in earnings of affiliates (1,745) 3,107 - - - 1,362
Accrued expenses and other current liabilities 165,383 79,046 74,512 Other income, net 828 278 1,137 538 1,268 4,049
Current maturities of long-term debt 66,678 21,589 13,700 Income (loss) before income taxes 6,268 4,589 11,974 7,492 (9,505) 20,818
Total current liabilities 1,304,566 833,350 656,696 Income (loss) attributable to the noncontrolling interests - (632) - - - (632)
Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                     6,268 $               5,221 $            11,974 $              7,492 $             (9,505) $                 21,450
Right of use liability 48,401 - -
Other long-term liabilities 18,398 32,184 30,325 Six months ended June 30, 2018
Commodity derivative liabilities – noncurrent 3,985 889 3,202 Revenues from external customers $                   641,126 $            375,422 $            438,723 $              91,870 $                      - $              1,547,141
Employee benefit plan obligations 22,019 22,542 26,131 Gross profit 59,111 9,554 59,404 26,110 - 154,179
Long-term debt, less current maturities 1,007,012 496,187 435,580 Equity in earnings of affiliates 7,497 5,879 - - - 13,376
Deferred income taxes 146,839 130,087 118,864 Other income, net 1,573 138 1,274 691 838 4,514
Total liabilities 2,551,220 1,515,239 1,270,798 Income (loss) before income taxes 7,460 9,953 16,215 4,913 (11,678) 26,863
Total equity 1,020,639 876,764 846,990 Income (loss) attributable to the noncontrolling interest - (398) - - - (398)
Total liabilities and equity $              3,571,859 $                    2,392,003 $                 2,117,788 Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                       7,460 $              10,351 $              16,215 $                4,913 $            (11,678) $                   27,261
(a) Income (loss) before income taxes attributable to The Andersons, Inc. for each Group is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income (loss).

 

 $ in millions, except per share amounts      1 Excludes net income (loss) attributable to the noncontrolling interests of ($0.5) in Q2 2019, ($0.1) in Q2 2018, ($0.6) for year-to-date 2019 and ($0.4) for year-to-date 2018. The Andersons, Inc. The Andersons, Inc. The Andersons, Inc.Condensed Consolidated Balance Sheets(Unaudited) The Andersons, Inc. The Andersons, Inc.
Q2 2019 Q2 2018 Variance YTD 2019 YTD 2018 Variance Condensed Consolidated Statements of Operations Reconciliation to Adjusted Net Income Segment Data Reconciliation to EBITDA and Adjusted EBITDA
Pretax Income (Loss) Attributable to the Company1  $40.9 $29.3 $11.6 $21.5 $27.3 ($5.8) (Unaudited) (Unaudited) (in thousands) June 30, 2019 December 31, 2018 June 30, 2018 (Unaudited) (unaudited)
Adjusted Pretax Income (Loss)1 $44.1 $29.3 $14.8 $36.3 $27.3 $9.0 Assets
     Trade (Grain) Group $27.0 $8.7 $18.3 $21.1 $7.5 $13.6 Three months ended June 30, Six months ended June 30, Three months ended June 30, Six months ended June 30, Current assets: (in thousands) Trade Ethanol Plant Nutrient Rail Other Total
     Ethanol Group $2.6 $7.3 ($4.7) $5.2 $10.4 ($5.2) (in thousands, except per share data) 2019 2018 2019 2018 (in thousands, except per share data) 2019 2018 2019 2018 Cash and cash equivalents $                    11,087 $                         22,593 $                      58,611 Three months ended June 30, 2019 (in thousands)  Trade   Ethanol  Plant Nutrient  Rail Other  Total
     Plant Nutrient Group $15.9 $15.1 $0.8 $12.0 $16.2 ($4.2) Sales and merchandising revenues  $              2,325,041 $                    911,402 $              4,301,833 $                 1,547,141 Net income (loss) attributable to The Andersons, Inc. $                   29,888 $                     21,529 $                   15,895 $                     19,829 Accounts receivable, net 712,294 207,285 218,476 Revenues from external customers $             1,766,305 $          245,143 $          270,577 $            43,016 $                     - $           2,325,041 Three months ended June 30, 2019
     Rail Group $3.2 $0.9 $2.3 $7.5 $4.9 $2.6 Cost of sales and merchandising revenues 2,164,313 820,928 4,031,441 1,392,962 Items impacting other income, net of tax: Inventories 753,641 690,804 495,611 Gross profit 102,846 4,312 38,798 14,772 - 160,728 Income (loss) before income taxes $            23,731 $              2,172 $            15,903 $              3,180 $             (4,578) $            40,408
     Other ($4.6) ($2.8) ($1.8) ($9.5) ($11.7) $2.2 Gross profit 160,728 90,474 270,392 154,179 One time acquisition costs (907) - 5,209 - Commodity derivative assets – current 233,015 51,421 54,259 Equity in earnings of affiliates (1,614) 1,457 - - - (157) Income (loss) attributable to the noncontrolling interests - (477) - - - (477)
Net Income (Loss)1 $29.9 $21.5 $8.4 $15.9 $19.8 ($3.9) Operating, administrative and general expenses 106,918 59,853 220,267 124,110 Transaction related stock compensation 1,010 - 3,572 - Other current assets 58,439 50,703 42,648 Other income, net 3,818 194 570 329 652 5,563 Income (loss) before income taxes attributable to The Andersons, Inc. 23,731 2,649 15,903 3,180 (4,578) 40,885
Adjusted Net Income (Loss)1 $32.3 $21.5 $10.8 $27.0 $19.8 $7.2 Asset impairment 3,081 6,272 3,081 6,272 Asset impairment 2,311 - 2,311 - Assets held for sale 151 392 9,816 Income (loss) before income taxes 23,731 2,172 15,903 3,180 (4,578) 40,408 Interest expense 10,243 (906) 2,386 4,181 (177) 15,727
Diluted EPS $0.91 $0.76 $0.15 $0.48 $0.70 ($0.22) Interest expense 15,727 7,825 31,637 14,824 Total current assets 1,768,627 1,023,198 879,421 Income (loss) attributable to the noncontrolling interests - (477) - - - (477) Depreciation and amortization 10,837 48 6,631 8,389 2,850 28,755
Adjusted Diluted EPS $0.98 $0.76 $0.22 $0.82 $0.70 $0.12 Other income: Total adjusting items 2,414 - 11,092 - Other assets: Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                   23,731 $               2,649 $            15,903 $              3,180 $             (4,578) $                 40,885 Earnings before interest, taxes, depreciation and amortization (EBITDA) $            44,811 $              1,791 $            24,920 $            15,750 $             (1,905) $            85,367
EBITDA $85.4 $59.7 $25.7 $114.0 $87.3 $26.7 Equity in earnings (loss) of affiliates (157) 9,803 1,362 13,376 Adjusted net income (loss) attributable to The Andersons, Inc. $                   32,302 $                     21,529 $                   26,987 $                     19,829 Commodity derivative assets – noncurrent 6,161 480 1,008 Adjusting items impacting EBITDA:
Adjusted EBITDA $88.6 $59.7 $28.9 $128.9 $87.3 $41.6 Other income, net 5,563 2,828 4,049 4,514 Other assets, net 346,531 127,503 138,201 Three months ended June 30, 2018 One time acquisition costs (1,209) - - - - (1,209)
Income (loss) before income taxes 40,408 29,155 20,818 26,863 Diluted earnings attributable to The Andersons, Inc. common shareholders $                       0.91 $                         0.76 $                       0.48 $                         0.70 Right of use asset, net 74,073 - - Revenues from external customers $                   365,100 $            201,758 $            303,106 $              41,438 $                      - $                 911,402 Transaction related stock compensation 1,346 - - - - 1,346
Income tax provision (benefit) 10,997 7,742 5,555 7,432 Equity method investments 120,929 242,326 232,159 Gross profit 33,887 5,862 37,167 13,558 - 90,474 Asset impairment 3,081 - - - - 3,081
Net income (loss) 29,411 21,413 15,263 19,431 Impact on diluted earnings per share 0.07 - 0.34 - 547,694 370,309 371,368 Equity in earnings of affiliates 5,510 4,293 - - - 9,803 Total adjusting items 3,218 - - - - 3,218
Net income attributable to the noncontrolling interests (477) (116) (632) (398) Adjusted diluted earnings (loss) per share $                       0.98 $                         0.76 $                       0.82 $                         0.70 Rail Group assets leased to others, net 559,711 521,785 458,424 Other income, net 1,248 (476) 622 675 759 2,828 Adjusted EBITDA $            48,029 $              1,791 $            24,920 $            15,750 $             (1,905) $            88,585
Net income (loss) attributable to The Andersons, Inc. $                    29,888 $                      21,529 $                    15,895 $                      19,829 Property, plant and equipment, net 695,827 476,711 408,575 Income (loss) before income taxes 8,707 7,179 15,124 944 (2,799) 29,155
Total assets $              3,571,859 $                    2,392,003 $                 2,117,788 Income (loss) attributable to the noncontrolling interests - (116) - - - (116) Three months ended June 30, 2018
Per common share: Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                       8,707 $                7,295 $              15,124 $                   944 $              (2,799) $                   29,271 Income (loss) before income taxes $                8,707 $                7,179 $              15,124 $                   944 $              (2,799) $              29,155
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.92 $                          0.76 $                        0.49 $                          0.70 Liabilities and equity Income (loss) attributable to the noncontrolling interests - (116) - - - (116)
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders $                        0.91 $                          0.76 $                        0.48 $                          0.70 Current liabilities: Income (loss) before income taxes attributable to The Andersons, Inc. 8,707 7,295 15,124 944 (2,799) 29,271
Short-term debt $                 426,125 $                       205,000 $                    185,000 Six months ended June 30, 2019 Interest expense 3,930 (271) 1,642 2,718 (194) 7,825
Trade and other payables 527,250 462,535 282,221 Revenues from external customers $             3,364,326 $          453,974 $          399,102 $            84,431 $                     - $              4,301,833 Depreciation and amortization 4,126 1,517 6,769 7,119 3,022 22,553
Customer prepayments and deferred revenue 49,761 32,533 16,103 Gross profit 171,835 8,120 59,732 30,705 - 270,392 Earnings before interest, taxes, depreciation and amortization (EBITDA) $              16,763 $                8,541 $              23,535 $              10,781 $                     29 $              59,649
Commodity derivative liabilities – current 69,369 32,647 85,160 Equity in earnings of affiliates (1,745) 3,107 - - - 1,362
Accrued expenses and other current liabilities 165,383 79,046 74,512 Other income, net 828 278 1,137 538 1,268 4,049 Six months ended June 30, 2019
Current maturities of long-term debt 66,678 21,589 13,700 Income (loss) before income taxes 6,268 4,589 11,974 7,492 (9,505) 20,818 Income (loss) before income taxes $              6,268 $              4,589 $            11,974 $              7,492 $             (9,505) $            20,818
Total current liabilities 1,304,566 833,350 656,696 Income (loss) attributable to the noncontrolling interests - (632) - - - (632) Income (loss) attributable to the noncontrolling interests - (632) - - - (632)
Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                     6,268 $               5,221 $            11,974 $              7,492 $             (9,505) $                 21,450 Income (loss) before income taxes attributable to The Andersons, Inc. 6,268 5,221 11,974 7,492 (9,505) 21,450
Right of use liability 48,401 - - Interest expense 21,158 (1,730) 4,647 7,860 (298) 31,637
Other long-term liabilities 18,398 32,184 30,325 Six months ended June 30, 2018 Depreciation and amortization 25,036 187 13,294 16,664 5,775 60,956
Commodity derivative liabilities – noncurrent 3,985 889 3,202 Revenues from external customers $                   641,126 $            375,422 $            438,723 $              91,870 $                      - $              1,547,141 Earnings before interest, taxes, depreciation and amortization (EBITDA) $            52,462 $              3,678 $            29,915 $            32,016 $             (4,028) $          114,043
Employee benefit plan obligations 22,019 22,542 26,131 Gross profit 59,111 9,554 59,404 26,110 - 154,179 Adjusting items impacting EBITDA:
Long-term debt, less current maturities 1,007,012 496,187 435,580 Equity in earnings of affiliates 7,497 5,879 - - - 13,376 One time acquisition costs 6,945 - - - - 6,945
Deferred income taxes 146,839 130,087 118,864 Other income, net 1,573 138 1,274 691 838 4,514 Transaction related stock compensation 4,762 - - - - 4,762
Total liabilities 2,551,220 1,515,239 1,270,798 Income (loss) before income taxes 7,460 9,953 16,215 4,913 (11,678) 26,863 Asset impairment 3,081 - - - - 3,081
Total equity 1,020,639 876,764 846,990 Income (loss) attributable to the noncontrolling interest - (398) - - - (398) Total adjusting items 14,788 - - - - 14,788
Total liabilities and equity $              3,571,859 $                    2,392,003 $                 2,117,788 Income (loss) before income taxes attributable to The Andersons, Inc. (a) $                       7,460 $              10,351 $              16,215 $                4,913 $            (11,678) $                   27,261 Adjusted EBITDA $              67,250 $              3,678 $            29,915 $            32,016 $             (4,028) $          128,831
(a) Income (loss) before income taxes attributable to The Andersons, Inc. for each Group is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income (loss). Six months ended June 30, 2018
Income (loss) before income taxes $                7,460 $                9,953 $              16,215 $                4,913 $            (11,678) $              26,863
Income (loss) attributable to the noncontrolling interests - (398) - - - (398)
Income (loss) before income taxes attributable to The Andersons, Inc. 7,460 10,351 16,215 4,913 (11,678) 27,261
Interest expense 6,889 (311) 3,082 5,086 78 14,824
Depreciation and amortization 8,143 3,026 13,497 14,288 6,278 45,232
Earnings before interest, taxes, depreciation and amortization (EBITDA) $              22,492 $              13,066 $              32,794 $              24,287 $              (5,322) $              87,317

 

 

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SOURCE The Andersons, Inc.

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