• | 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. |
$ 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 |
• | 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. |
• | 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. |
• | 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. |
• | 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. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Sales and merchandising revenues | $ | 2,325,041 | $ | 911,402 | $ | 4,301,833 | $ | 1,547,141 | |||||||
Cost of sales and merchandising revenues | 2,164,313 | 820,928 | 4,031,441 | 1,392,962 | |||||||||||
Gross profit | 160,728 | 90,474 | 270,392 | 154,179 | |||||||||||
Operating, administrative and general expenses | 106,918 | 59,853 | 220,267 | 124,110 | |||||||||||
Asset impairment | 3,081 | 6,272 | 3,081 | 6,272 | |||||||||||
Interest expense | 15,727 | 7,825 | 31,637 | 14,824 | |||||||||||
Other income: | |||||||||||||||
Equity in earnings (loss) of affiliates | (157 | ) | 9,803 | 1,362 | 13,376 | ||||||||||
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 (loss) 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 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income (loss) attributable to The Andersons, Inc. | $ | 29,888 | $ | 21,529 | $ | 15,895 | $ | 19,829 | |||||||
Items impacting other income, net of tax: | |||||||||||||||
One time acquisition costs | (907 | ) | — | 5,209 | — | ||||||||||
Transaction related stock compensation | 1,010 | — | 3,572 | — | |||||||||||
Asset impairment | 2,311 | — | 2,311 | — | |||||||||||
Total adjusting items | 2,414 | — | 11,092 | — | |||||||||||
Adjusted net income (loss) attributable to The Andersons, Inc. | $ | 32,302 | $ | 21,529 | $ | 26,987 | $ | 19,829 | |||||||
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | 0.91 | $ | 0.76 | $ | 0.48 | $ | 0.70 | |||||||
Impact on diluted earnings per share | 0.07 | — | 0.34 | — | |||||||||||
Adjusted diluted earnings (loss) per share | $ | 0.98 | $ | 0.76 | $ | 0.82 | $ | 0.70 |
(in thousands) | June 30, 2019 | December 31, 2018 | June 30, 2018 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 11,087 | $ | 22,593 | $ | 58,611 | |||||
Accounts receivable, net | 712,294 | 207,285 | 218,476 | ||||||||
Inventories | 753,641 | 690,804 | 495,611 | ||||||||
Commodity derivative assets – current | 233,015 | 51,421 | 54,259 | ||||||||
Other current assets | 58,439 | 50,703 | 42,648 | ||||||||
Assets held for sale | 151 | 392 | 9,816 | ||||||||
Total current assets | 1,768,627 | 1,023,198 | 879,421 | ||||||||
Other assets: | |||||||||||
Commodity derivative assets – noncurrent | 6,161 | 480 | 1,008 | ||||||||
Other assets, net | 346,531 | 127,503 | 138,201 | ||||||||
Right of use asset, net | 74,073 | — | — | ||||||||
Equity method investments | 120,929 | 242,326 | 232,159 | ||||||||
547,694 | 370,309 | 371,368 | |||||||||
Rail Group assets leased to others, net | 559,711 | 521,785 | 458,424 | ||||||||
Property, plant and equipment, net | 695,827 | 476,711 | 408,575 | ||||||||
Total assets | $ | 3,571,859 | $ | 2,392,003 | $ | 2,117,788 | |||||
Liabilities and equity | |||||||||||
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 thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | |||||||||||||||||
Three months ended June 30, 2019 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 23,731 | $ | 2,172 | $ | 15,903 | $ | 3,180 | $ | (4,578 | ) | $ | 40,408 | ||||||||||
Income (loss) attributable to the noncontrolling interest | — | (477 | ) | — | — | — | (477 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | 23,731 | 2,649 | 15,903 | 3,180 | (4,578 | ) | 40,885 | ||||||||||||||||
Interest expense | 10,243 | (906 | ) | 2,386 | 4,181 | (177 | ) | 15,727 | |||||||||||||||
Depreciation and amortization | 10,837 | 48 | 6,631 | 8,389 | 2,850 | 28,755 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 44,811 | $ | 1,791 | $ | 24,920 | $ | 15,750 | $ | (1,905 | ) | $ | 85,367 | ||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||
One time acquisition costs | (1,209 | ) | — | — | — | — | (1,209 | ) | |||||||||||||||
Transaction related stock compensation | 1,346 | — | — | — | — | 1,346 | |||||||||||||||||
Asset impairment | 3,081 | — | — | — | — | 3,081 | |||||||||||||||||
Total adjusting items | 3,218 | — | — | — | — | 3,218 | |||||||||||||||||
Adjusted EBITDA | $ | 48,029 | $ | 1,791 | $ | 24,920 | $ | 15,750 | $ | (1,905 | ) | $ | 88,585 | ||||||||||
Three months ended June 30, 2018 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 8,707 | $ | 7,179 | $ | 15,124 | $ | 944 | $ | (2,799 | ) | $ | 29,155 | ||||||||||
Income (loss) attributable to the noncontrolling interests | — | (116 | ) | — | — | — | (116 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | 8,707 | 7,295 | 15,124 | 944 | (2,799 | ) | 29,271 | ||||||||||||||||
Interest expense | 3,930 | (271 | ) | 1,642 | 2,718 | (194 | ) | 7,825 | |||||||||||||||
Depreciation and amortization | 4,126 | 1,517 | 6,769 | 7,119 | 3,022 | 22,553 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 16,763 | $ | 8,541 | $ | 23,535 | $ | 10,781 | $ | 29 | $ | 59,649 | |||||||||||
Six months ended June 30, 2019 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 6,268 | $ | 4,589 | $ | 11,974 | $ | 7,492 | $ | (9,505 | ) | $ | 20,818 | ||||||||||
Income (loss) attributable to the noncontrolling interests | — | (632 | ) | — | — | — | (632 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | 6,268 | 5,221 | 11,974 | 7,492 | (9,505 | ) | 21,450 | ||||||||||||||||
Interest expense | 21,158 | (1,730 | ) | 4,647 | 7,860 | (298 | ) | 31,637 | |||||||||||||||
Depreciation and amortization | 25,036 | 187 | 13,294 | 16,664 | 5,775 | 60,956 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 52,462 | $ | 3,678 | $ | 29,915 | $ | 32,016 | $ | (4,028 | ) | $ | 114,043 | ||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||
One time acquisition costs | 6,945 | — | — | — | — | 6,945 | |||||||||||||||||
Transaction related stock compensation | 4,762 | — | — | — | — | 4,762 | |||||||||||||||||
Asset impairment | 3,081 | — | — | — | — | 3,081 | |||||||||||||||||
Total adjusting items | 14,788 | — | — | — | — | 14,788 | |||||||||||||||||
Adjusted EBITDA | $ | 67,250 | $ | 3,678 | $ | 29,915 | $ | 32,016 | $ | (4,028 | ) | $ | 128,831 | ||||||||||
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 |
(in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | |||||||||||||||||
Three months ended June 30, 2019 | |||||||||||||||||||||||
Revenues from external customers | $ | 1,766,305 | $ | 245,143 | $ | 270,577 | $ | 43,016 | $ | — | $ | 2,325,041 | |||||||||||
Gross profit | 102,846 | 4,312 | 38,798 | 14,772 | — | 160,728 | |||||||||||||||||
Equity in earnings (loss) of affiliates | (1,614 | ) | 1,457 | — | — | — | (157 | ) | |||||||||||||||
Other income, net | 3,818 | 194 | 570 | 329 | 652 | 5,563 | |||||||||||||||||
Income (loss) before income taxes | 23,731 | 2,172 | 15,903 | 3,180 | (4,578 | ) | 40,408 | ||||||||||||||||
Income (loss) attributable to the noncontrolling interests | — | (477 | ) | — | — | — | (477 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 23,731 | $ | 2,649 | $ | 15,903 | $ | 3,180 | $ | (4,578 | ) | $ | 40,885 | ||||||||||
Three months ended June 30, 2018 | |||||||||||||||||||||||
Revenues from external customers | $ | 365,100 | $ | 201,758 | $ | 303,106 | $ | 41,438 | $ | — | $ | 911,402 | |||||||||||
Gross profit | 33,887 | 5,862 | 37,167 | 13,558 | — | 90,474 | |||||||||||||||||
Equity in earnings of affiliates | 5,510 | 4,293 | — | — | — | 9,803 | |||||||||||||||||
Other income, net | 1,248 | (476 | ) | 622 | 675 | 759 | 2,828 | ||||||||||||||||
Income (loss) before income taxes | 8,707 | 7,179 | 15,124 | 944 | (2,799 | ) | 29,155 | ||||||||||||||||
Income (loss) attributable to the noncontrolling interest | — | (116 | ) | — | — | — | (116 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 8,707 | $ | 7,295 | $ | 15,124 | $ | 944 | $ | (2,799 | ) | $ | 29,271 | ||||||||||
Six months ended June 30, 2019 | |||||||||||||||||||||||
Revenues from external customers | $ | 3,364,326 | $ | 453,974 | $ | 399,102 | $ | 84,431 | $ | — | $ | 4,301,833 | |||||||||||
Gross profit | 171,835 | 8,120 | 59,732 | 30,705 | — | $ | 270,392 | ||||||||||||||||
Equity in earnings of affiliates | (1,745 | ) | 3,107 | — | — | — | $ | 1,362 | |||||||||||||||
Other income, net | 828 | 278 | 1,137 | 538 | 1,268 | $ | 4,049 | ||||||||||||||||
Income (loss) before income taxes | 6,268 | 4,589 | 11,974 | 7,492 | (9,505 | ) | $ | 20,818 | |||||||||||||||
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 | ||||||||||
Six months ended June 30, 2018 | |||||||||||||||||||||||
Revenues from external customers | $ | 641,126 | $ | 375,422 | $ | 438,723 | $ | 91,870 | $ | — | $ | 1,547,141 | |||||||||||
Gross profit | 59,111 | 9,554 | 59,404 | 26,110 | — | 154,179 | |||||||||||||||||
Equity in earnings of affiliates | 7,497 | 5,879 | — | — | — | 13,376 | |||||||||||||||||
Other income, net | 1,573 | 138 | 1,274 | 691 | 838 | 4,514 | |||||||||||||||||
Income (loss) before income taxes | 7,460 | 9,953 | 16,215 | 4,913 | (11,678 | ) | 26,863 | ||||||||||||||||
Income (loss) attributable to the noncontrolling interest | — | (398 | ) | — | — | — | (398 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 7,460 | $ | 10,351 | $ | 16,215 | $ | 4,913 | $ | (11,678 | ) | $ | 27,261 |