Date of Report (Date of Earliest Event Reported): | November 5, 2014 |
Ohio | 000-20557 | 34-1562374 |
_____________________ (State or other jurisdiction | _____________ (Commission | ______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
480 West Dussel Drive, Maumee, Ohio | 43537 | |
_________________________________ (Address of principal executive offices) | ___________ (Zip Code) |
Registrant’s telephone number, including area code: | 419-893-5050 |
The Andersons, Inc. | ||||
November 5, 2014 | By: | /s/ John Granato | ||
Name: John Granato | ||||
Title: Chief Financial Officer | ||||
(Principal Financial Officer) |
Exhibit No. | Description | |
99.1 | Third Quarter 2014 Earnings Release |
• | Year-to-date earnings of $2.95 per diluted share set a new record. |
• | Record third quarter operating income of $21.3 million for the Ethanol Group. |
• | Revenues were down in the Grain and Ethanol groups due to lower commodity prices. The majority of the decrease was within the Grain Group where the average price per bushel sold decreased by 36 percent, which more than offset the 11 percent increase in bushels sold. |
• | The Ethanol Group realized solid margins at all plants. These margins were primarily supported by strong export demand, lower corn prices, and solid operating metrics. The Ethanol Group had record E-85 sales. |
• | Volume for the Plant Nutrient Group was up almost 25 percent during the third quarter; however, this was partially offset by lower gross profit per ton. |
• | The Rail Group’s income was down this quarter due in part to the group recognizing $4.3 million in income from the settlement of two non-performing leases last year, and a significant increase in freight expense to move idle cars into service. |
• | Crop conditions were good to excellent in the majority of the company’s territories during the growing season, which has led to record yields. The harvest, however, had a slow start due to wet weather conditions. |
• | It should be noted that poor railroad service could impact the company in the fourth quarter. Both the Grain and Ethanol groups rely on outbound rail service to turn their inventory, which enables them to effectively serve their customers. Further, the Plant Nutrient Group relies on inbound rail to ensure nutrients are available to meet customer needs. |
• | Integration of the Auburn Bean and Grain (AB&G), United Grain, LLC and Keller Grain, Inc. acquisitions is underway. AB&G added grain storage capacity of about 18.1 million bushels, and 16,000 tons of dry and 3.7 million gallons of liquid nutrient capacity. |
• | All four ethanol plants had scheduled maintenance shut-downs during the third quarter. These went well, and new daily production records have been set since the maintenance was performed. |
• | At this time, approximately 85 percent of the fourth quarter and almost half of the January ethanol margin risk is hedged. These hedges were placed at different times during the year in accordance with the group’s risk management strategy. |
• | At the end of September, the Rail Group’s utilization rate was 90.1 percent, up from 86.3 percent the prior year. The utilization rate is expected to increase further as the year progresses. |
(in thousands, except per share data) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Sales and merchandising revenues | $ | 952,927 | $ | 1,181,374 | $ | 3,268,303 | $ | 4,020,308 | |||||||
Cost of sales and merchandising revenues | 868,009 | 1,108,228 | 2,985,115 | 3,764,660 | |||||||||||
Gross profit | 84,918 | 73,146 | 283,188 | 255,648 | |||||||||||
Operating, administrative and general expenses | 76,737 | 69,193 | 223,997 | 192,665 | |||||||||||
Interest expense | 4,253 | 5,348 | 16,401 | 16,607 | |||||||||||
Other income: | |||||||||||||||
Equity in earnings of affiliates, net | 23,917 | 22,177 | 76,631 | 39,991 | |||||||||||
Other income, net | 1,685 | 7,605 | 25,094 | 11,623 | |||||||||||
Income before income taxes | 29,530 | 28,387 | 144,515 | 97,990 | |||||||||||
Income tax provision | 10,251 | 10,348 | 49,837 | 36,907 | |||||||||||
Net income | 19,279 | 18,039 | 94,678 | 61,083 | |||||||||||
Net income attributable to the noncontrolling interests | 2,454 | 878 | 10,844 | 1,805 | |||||||||||
Net income attributable to The Andersons, Inc. | $ | 16,825 | $ | 17,161 | $ | 83,834 | $ | 59,278 | |||||||
Per common share: | |||||||||||||||
Basic earnings attributable to The Andersons, Inc. common shareholders | $ | 0.59 | $ | 0.61 | $ | 2.95 | $ | 2.11 | |||||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 0.59 | $ | 0.61 | $ | 2.95 | $ | 2.10 | |||||||
Dividends paid | $ | 0.1100 | $ | 0.1067 | $ | 0.3300 | $ | 0.3200 |
(in thousands) | September 30, 2014 | December 31, 2013 | September 30, 2013 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 326,946 | $ | 309,085 | $ | 134,441 | |||||
Restricted cash | 173 | 408 | 164 | ||||||||
Accounts receivable, net | 162,270 | 173,930 | 178,970 | ||||||||
Inventories | 396,464 | 614,923 | 429,017 | ||||||||
Commodity derivative assets - current | 126,396 | 71,319 | 105,390 | ||||||||
Deferred income taxes | 148 | 4,931 | 5,254 | ||||||||
Other current assets | 36,518 | 47,188 | 42,278 | ||||||||
Total current assets | 1,048,915 | 1,221,784 | 895,514 | ||||||||
Other assets: | |||||||||||
Commodity derivative assets - noncurrent | 2,383 | 246 | 5 | ||||||||
Other assets, net | 113,141 | 118,010 | 110,731 | ||||||||
Pension asset | 13,738 | 14,328 | — | ||||||||
Equity method investments | 257,166 | 291,109 | 262,643 | ||||||||
386,428 | 423,693 | 373,379 | |||||||||
Railcar assets leased to others, net | 245,849 | 240,621 | 233,024 | ||||||||
Property, plant and equipment, net | 401,800 | 387,458 | 380,374 | ||||||||
Total assets | $ | 2,082,992 | $ | 2,273,556 | $ | 1,882,291 | |||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Short-term debt | $ | 451 | $ | — | $ | — | |||||
Accounts payable for grain | 222,178 | 592,183 | 241,575 | ||||||||
Other accounts payable | 165,133 | 154,599 | 200,664 | ||||||||
Customer prepayments and deferred revenue | 27,246 | 59,304 | 23,974 | ||||||||
Commodity derivative liabilities – current | 229,265 | 63,954 | 88,234 | ||||||||
Accrued expenses and other current liabilities | 70,598 | 70,295 | 63,900 | ||||||||
Current maturities of long-term debt | 76,757 | 51,998 | 44,232 | ||||||||
Total current liabilities | 791,628 | 992,333 | 662,579 | ||||||||
Other long-term liabilities | 13,902 | 15,386 | 17,129 | ||||||||
Commodity derivative liabilities – noncurrent | 26,203 | 6,644 | 9,636 | ||||||||
Employee benefit plan obligations | 39,606 | 39,477 | 49,768 | ||||||||
Long-term debt, less current maturities | 289,448 | 375,213 | 381,018 | ||||||||
Deferred income taxes | 120,628 | 120,082 | 91,869 | ||||||||
Total liabilities | 1,281,415 | 1,549,135 | 1,211,999 | ||||||||
Total equity | 801,577 | 724,421 | 670,292 | ||||||||
Total liabilities and equity | $ | 2,082,992 | $ | 2,273,556 | $ | 1,882,291 |
(in thousands) | Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | ||||||||||||||||
Three months ended September 30, 2014 | ||||||||||||||||||||||||
Revenues from external customers | $ | 575,354 | $ | 179,405 | $ | 110,809 | $ | 32,022 | $ | 22,631 | $ | 32,706 | $ | — | $ | 952,927 | ||||||||
Gross profit | 32,748 | 12,770 | 13,934 | 10,841 | 5,306 | 9,319 | — | 84,918 | ||||||||||||||||
Equity in earnings of affiliates | 10,190 | 13,727 | — | — | — | — | — | 23,917 | ||||||||||||||||
Other income (expense), net | (2,354 | ) | 71 | 2,617 | 792 | 244 | 418 | (103 | ) | 1,685 | ||||||||||||||
Income (loss) before income taxes | 12,447 | 23,709 | (129 | ) | 4,160 | (2,885 | ) | (968 | ) | (6,804 | ) | 29,530 | ||||||||||||
Income (loss) attributable to the noncontrolling interests | (2 | ) | 2,456 | — | — | — | — | — | 2,454 | |||||||||||||||
Operating income (loss) (a) | $ | 12,449 | $ | 21,253 | $ | (129 | ) | $ | 4,160 | $ | (2,885 | ) | $ | (968 | ) | $ | (6,804 | ) | $ | 27,076 | ||||
Three months ended September 30, 2013 | ||||||||||||||||||||||||
Revenues from external customers | $ | 765,833 | $ | 213,384 | $ | 95,681 | $ | 47,523 | $ | 27,624 | $ | 31,329 | $ | — | $ | 1,181,374 | ||||||||
Gross profit | 27,005 | 4,735 | 13,553 | 13,000 | 6,408 | 8,445 | — | 73,146 | ||||||||||||||||
Equity in earnings of affiliates | 12,003 | 10,174 | — | — | — | — | — | 22,177 | ||||||||||||||||
Other income (expense), net | 1,216 | 35 | 320 | 5,031 | 135 | 102 | 766 | 7,605 | ||||||||||||||||
Income (loss) before income taxes | 14,315 | 11,790 | (1,643 | ) | 12,360 | (83 | ) | (2,043 | ) | (6,309 | ) | 28,387 | ||||||||||||
Income attributable to the noncontrolling interest | (8 | ) | 886 | — | — | — | — | — | 878 | |||||||||||||||
Operating income (loss) (a) | $ | 14,323 | $ | 10,904 | $ | (1,643 | ) | $ | 12,360 | $ | (83 | ) | $ | (2,043 | ) | $ | (6,309 | ) | $ | 27,509 | ||||
Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
Nine months ended September 30, 2014 | ||||||||||||||||||||||||
Revenues from external customers | $ | 1,814,517 | $ | 594,613 | $ | 530,334 | $ | 117,733 | $ | 109,269 | $ | 101,837 | $ | — | $ | 3,268,303 | ||||||||
Gross profit | 77,665 | 38,773 | 68,742 | 46,569 | 21,586 | 29,853 | — | 283,188 | ||||||||||||||||
Equity in earnings of affiliates | 20,541 | 56,090 | — | — | — | — | — | 76,631 | ||||||||||||||||
Other income, net | 16,967 | 201 | 3,193 | 2,289 | 1,018 | 720 | 706 | 25,094 | ||||||||||||||||
Income (loss) before income taxes | 34,102 | 85,833 | 23,464 | 25,889 | 488 | (1,666 | ) | (23,595 | ) | 144,515 | ||||||||||||||
Income (loss) attributable to the noncontrolling interests | (8 | ) | 10,852 | — | — | — | — | — | 10,844 | |||||||||||||||
Operating income (loss) (a) | $ | 34,110 | $ | 74,981 | $ | 23,464 | $ | 25,889 | $ | 488 | $ | (1,666 | ) | $ | (23,595 | ) | $ | 133,671 | ||||||
Nine months ended September 30, 2013 | ||||||||||||||||||||||||
Revenues from external customers | $ | 2,493,678 | $ | 634,933 | $ | 537,922 | $ | 132,488 | $ | 117,955 | $ | 103,332 | $ | — | $ | 4,020,308 | ||||||||
Gross profit | 73,947 | 19,189 | 64,703 | 46,536 | 22,747 | 28,526 | — | 255,648 | ||||||||||||||||
Equity in earnings of affiliates | 24,940 | 15,051 | — | — | — | — | — | 39,991 | ||||||||||||||||
Other income, net | 1,438 | 465 | 459 | 6,679 | 585 | 316 | 1,681 | 11,623 | ||||||||||||||||
Income (loss) before income taxes | 24,667 | 25,797 | 21,035 | 36,614 | 6,113 | (3,673 | ) | (12,563 | ) | 97,990 | ||||||||||||||
Income attributable to the noncontrolling interest | (8 | ) | 1,813 | — | — | — | — | — | 1,805 | |||||||||||||||
Operating income (loss) (a) | $ | 24,675 | $ | 23,984 | $ | 21,035 | $ | 36,614 | $ | 6,113 | $ | (3,673 | ) | $ | (12,563 | ) | $ | 96,185 |
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