• | Company reports a net loss of $4.2 million or $0.13 per diluted share and an adjusted net loss of $2.3 million, or $0.07 per diluted share. |
• | Trade Group reports improved results, recording a pretax loss of $2.0 million and adjusted pretax income of $0.6 million, as stronger merchandising income was offset by the impact of reduced planting and a delayed harvest in the Eastern corn belt. |
• | Ethanol Group records pretax income of $0.9 million in a challenging margin environment. |
• | Plant Nutrient Group records a smaller pretax loss of $7.4 million due to increased field activity in the quarter. |
• | Rail Group earns $3.1 million of pretax income on stable railcar leasing income. |
$ in millions, except per share amounts | Q3 2019 | Q3 2018 | Variance | YTD 2019 | YTD 2018 | Variance |
Pretax Income (Loss) Attributable to the Company1 | $(11.4) | $(3.9) | $(7.5) | $10.0 | $23.4 | $(13.4) |
Adjusted Pretax Income (Loss)1 | $(8.9) | $(0.4) | $(8.5) | $27.3 | $26.9 | $0.4 |
Trade (Grain) Group | $0.6 | $(9.9) | $10.5 | $21.6 | $(2.5) | $24.1 |
Ethanol Group | $0.9 | $10.4 | $(9.5) | $6.2 | $20.7 | $(14.5) |
Plant Nutrient Group | $(7.4) | $(8.0) | $0.6 | $4.5 | $8.2 | $(3.7) |
Rail Group | $3.1 | $5.7 | $(2.6) | $10.6 | $10.6 | $— |
Other | $(6.1) | $1.4 | $(7.5) | $(15.6) | $(10.3) | $(5.3) |
Net Income (Loss)1 | $(4.2) | $(2.1) | $(2.1) | $11.7 | $17.7 | $(6.0) |
Adjusted Net Income (Loss)1 | $(2.3) | $0.5 | $(2.8) | $24.7 | $20.3 | $4.4 |
EPS | $(0.13) | $(0.07) | $(0.06) | $0.35 | $0.62 | $(0.27) |
Adjusted EPS | $(0.07) | $0.02 | $(0.09) | $0.75 | $0.71 | $0.04 |
EBITDA | $40.0 | $24.0 | $16.0 | $154.0 | $111.4 | $42.6 |
Adjusted EBITDA | $42.5 | $27.5 | $15.0 | $171.4 | $114.8 | $56.6 |
• | Performance improved across most of the group’s operations, but especially in merchandising. |
• | The newly integrated group has already identified and partially implemented changes that will result in more than $10 million in run-rate savings. |
• | The group absorbed the reduction in planted acres around its Eastern Corn Belt assets by finding additional opportunities in the West. |
• | Higher corn basis compressed margins, especially at the three eastern plants. |
• | The group continues to upgrade its production technology to gain additional efficiency. |
• | Third party ethanol trading again increased sales volumes and margins. |
• | Volumes were up, largely on primary nutrients and at the farm centers, which was reflective of the delayed planting season. |
• | Margins per ton were somewhat lower due to product mix. |
• | Inventory carrying costs increased year over year due to reduced spring planting. |
• | Railcar leasing income fell on continuing headwinds in the sand and ethanol markets. |
• | Income from car sales was significantly lower due to fewer direct and scrap car sales and lower scrap rates. |
• | Service and other pretax income fell somewhat due increased labor and benefits expenses. |
The Andersons, Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Sales and merchandising revenues | $ | 1,982,755 | $ | 685,579 | $ | 6,284,588 | $ | 2,232,720 | |||||||
Cost of sales and merchandising revenues | 1,873,614 | 631,715 | 5,905,055 | 2,024,677 | |||||||||||
Gross profit | 109,141 | 53,864 | 379,533 | 208,043 | |||||||||||
Operating, administrative and general expenses | 107,118 | 65,986 | 327,385 | 190,096 | |||||||||||
Asset impairment | — | — | 3,081 | 6,272 | |||||||||||
Interest expense | 13,975 | 5,176 | 45,613 | 20,000 | |||||||||||
Other income: | |||||||||||||||
Equity in earnings (loss) of affiliates | (3,728 | ) | 7,225 | (2,367 | ) | 20,601 | |||||||||
Other income, net | 2,598 | 6,434 | 6,649 | 10,949 | |||||||||||
Income (loss) before income taxes | (13,082 | ) | (3,639 | ) | 7,736 | 23,225 | |||||||||
Income tax provision (benefit) | (7,212 | ) | (1,764 | ) | (1,657 | ) | 5,668 | ||||||||
Net income (loss) | (5,870 | ) | (1,875 | ) | 9,393 | 17,557 | |||||||||
Net income (loss) attributable to the noncontrolling interests | (1,633 | ) | 223 | (2,265 | ) | (175 | ) | ||||||||
Net income (loss) attributable to The Andersons, Inc. | $ | (4,237 | ) | $ | (2,098 | ) | $ | 11,658 | $ | 17,732 | |||||
Per common share: | |||||||||||||||
Basic earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | (0.13 | ) | $ | (0.07 | ) | $ | 0.36 | $ | 0.63 | |||||
Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | (0.13 | ) | $ | (0.07 | ) | $ | 0.35 | $ | 0.62 |
The Andersons, Inc. | |||||||||||||||
Reconciliation to Adjusted Net Income (Loss) Attributable to The Andersons, Inc. | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income (loss) attributable to The Andersons, Inc. | $ | (4,237 | ) | $ | (2,098 | ) | $ | 11,658 | $ | 17,732 | |||||
Items impacting other income, net of tax: | |||||||||||||||
One time acquisition costs | (17 | ) | 2,597 | 5,192 | 2,597 | ||||||||||
Transaction related stock compensation | 1,933 | — | 5,504 | — | |||||||||||
Asset impairment | — | — | 2,311 | — | |||||||||||
Total adjusting items, net of tax | 1,916 | 2,597 | 13,007 | 2,597 | |||||||||||
Adjusted net income (loss) attributable to The Andersons, Inc. | $ | (2,321 | ) | $ | 499 | $ | 24,665 | $ | 20,329 | ||||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | (0.13 | ) | $ | (0.07 | ) | $ | 0.35 | $ | 0.62 | |||||
Impact on diluted earnings per share | 0.06 | 0.09 | 0.40 | 0.09 | |||||||||||
Adjusted diluted earnings (loss) per share | $ | (0.07 | ) | $ | 0.02 | $ | 0.75 | $ | 0.71 |
The Andersons, Inc. | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
(in thousands) | September 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash, cash equivalents and restricted cash | $ | 21,299 | $ | 22,593 | $ | 16,820 | |||||
Accounts receivable, net | 523,110 | 207,285 | 206,380 | ||||||||
Inventories | 741,086 | 690,804 | 490,331 | ||||||||
Commodity derivative assets – current | 120,510 | 51,421 | 76,861 | ||||||||
Other current assets | 82,197 | 50,703 | 58,374 | ||||||||
Assets held for sale | 573 | 392 | 29,527 | ||||||||
Total current assets | 1,488,775 | 1,023,198 | 878,293 | ||||||||
Other assets: | |||||||||||
Commodity derivative assets – noncurrent | 1,943 | 480 | 766 | ||||||||
Other assets, net | 336,471 | 127,503 | 132,928 | ||||||||
Right of use asset, net | 70,773 | — | — | ||||||||
Equity method investments | 117,348 | 242,326 | 240,350 | ||||||||
Total Other Assets | 526,535 | 370,309 | 374,044 | ||||||||
Rail Group assets leased to others, net | 565,746 | 521,785 | 464,776 | ||||||||
Property, plant and equipment, net | 703,396 | 476,711 | 434,505 | ||||||||
Total assets | $ | 3,284,452 | $ | 2,392,003 | $ | 2,151,618 | |||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Short-term debt | $ | 138,249 | $ | 205,000 | $ | 132,000 | |||||
Trade and other payables | 594,708 | 462,535 | 344,406 | ||||||||
Customer prepayments and deferred revenue | 35,274 | 32,533 | 38,242 | ||||||||
Commodity derivative liabilities – current | 67,606 | 32,647 | 91,403 | ||||||||
Accrued expenses and other current liabilities | 162,749 | 79,046 | 68,925 | ||||||||
Current maturities of long-term debt | 66,899 | 21,589 | 15,677 | ||||||||
Total current liabilities | 1,065,485 | 833,350 | 690,653 | ||||||||
Right of use liability | 47,299 | — | — | ||||||||
Other long-term liabilities | 40,927 | 32,184 | 30,615 | ||||||||
Commodity derivative liabilities – noncurrent | 1,960 | 889 | 2,548 | ||||||||
Employee benefit plan obligations | 21,311 | 22,542 | 25,356 | ||||||||
Long-term debt, less current maturities | 968,117 | 496,187 | 437,280 | ||||||||
Deferred income taxes | 128,003 | 130,087 | 122,523 | ||||||||
Total liabilities | 2,273,102 | 1,515,239 | 1,308,975 | ||||||||
Total equity | 1,011,350 | 876,764 | 842,643 | ||||||||
Total liabilities and equity | $ | 3,284,452 | $ | 2,392,003 | $ | 2,151,618 |
The Andersons, Inc. | |||||||||||||||||||||||
Reconciliation to EBITDA and Adjusted EBITDA | |||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||
(in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | |||||||||||||||||
Three months ended September 30, 2019 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (2,001 | ) | $ | (684 | ) | $ | (7,440 | ) | $ | 3,137 | $ | (6,094 | ) | $ | (13,082 | ) | ||||||
Income (loss) attributable to the noncontrolling interests | — | (1,633 | ) | — | — | — | (1,633 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | (2,001 | ) | 949 | (7,440 | ) | 3,137 | (6,094 | ) | (11,449 | ) | |||||||||||||
Interest expense | 7,868 | 210 | 1,831 | 4,211 | (145 | ) | 13,975 | ||||||||||||||||
Depreciation and amortization | 12,487 | 6,907 | 6,485 | 8,713 | 2,849 | 37,441 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 18,354 | $ | 8,066 | $ | 876 | $ | 16,061 | $ | (3,390 | ) | $ | 39,967 | ||||||||||
Adjusting items impacting EBITDA: | — | ||||||||||||||||||||||
One time acquisition costs | (23 | ) | — | — | — | — | (23 | ) | |||||||||||||||
Transaction related stock compensation | 2,577 | — | — | — | — | 2,577 | |||||||||||||||||
Asset impairment | — | — | — | — | — | — | |||||||||||||||||
Total adjusting items | 2,554 | — | — | — | — | 2,554 | |||||||||||||||||
Adjusted EBITDA | $ | 20,908 | $ | 8,066 | $ | 876 | $ | 16,061 | $ | (3,390 | ) | $ | 42,521 | ||||||||||
Three months ended September 30, 2018 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (9,914 | ) | $ | 10,576 | $ | (7,976 | ) | $ | 5,732 | $ | (2,057 | ) | $ | (3,639 | ) | |||||||
Income (loss) attributable to the noncontrolling interests | — | 223 | — | — | — | 223 | |||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | (9,914 | ) | 10,353 | (7,976 | ) | 5,732 | (2,057 | ) | (3,862 | ) | |||||||||||||
Interest expense | 2,126 | (784 | ) | 1,315 | 2,602 | (83 | ) | 5,176 | |||||||||||||||
Depreciation and amortization | 4,118 | 1,533 | 6,761 | 7,385 | 2,931 | 22,728 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | (3,670 | ) | $ | 11,102 | $ | 100 | $ | 15,719 | $ | 791 | $ | 24,042 | ||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||
One time acquisition costs | — | — | — | — | 3,463 | 3,463 | |||||||||||||||||
Transaction related stock compensation | — | — | — | — | — | — | |||||||||||||||||
Asset impairment | — | — | — | — | — | — | |||||||||||||||||
Total adjusting items | — | — | — | — | 3,463 | 3,463 | |||||||||||||||||
Adjusted EBITDA | $ | (3,670 | ) | $ | 11,102 | $ | 100 | $ | 15,719 | $ | 4,254 | $ | 27,505 |
Nine months ended September 30, 2019 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 4,268 | $ | 3,904 | $ | 4,534 | $ | 10,629 | $ | (15,599 | ) | $ | 7,736 | ||||||||||
Income (loss) attributable to the noncontrolling interests | — | (2,265 | ) | — | — | — | (2,265 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | 4,268 | 6,169 | 4,534 | 10,629 | (15,599 | ) | 10,001 | ||||||||||||||||
Interest expense | 29,027 | (1,520 | ) | 6,478 | 12,071 | (443 | ) | 45,613 | |||||||||||||||
Depreciation and amortization | 37,523 | 7,094 | 19,778 | 25,377 | 8,624 | 98,396 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 70,818 | $ | 11,743 | $ | 30,790 | $ | 48,077 | $ | (7,418 | ) | $ | 154,010 | ||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||
One time acquisition costs | 6,922 | — | — | — | — | 6,922 | |||||||||||||||||
Transaction related stock compensation | 7,339 | — | — | — | — | 7,339 | |||||||||||||||||
Asset impairment | 3,081 | — | — | — | — | 3,081 | |||||||||||||||||
Total adjusting items | 17,342 | — | — | — | — | 17,342 | |||||||||||||||||
Adjusted EBITDA | $ | 88,160 | $ | 11,743 | $ | 30,790 | $ | 48,077 | $ | (7,418 | ) | $ | 171,352 | ||||||||||
Nine months ended September 30, 2018 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | (2,453 | ) | $ | 20,528 | $ | 8,239 | $ | 10,645 | $ | (13,734 | ) | $ | 23,225 | |||||||||
Income (loss) attributable to the noncontrolling interests | — | (175 | ) | — | — | — | (175 | ) | |||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. | (2,453 | ) | 20,703 | 8,239 | 10,645 | (13,734 | ) | 23,400 | |||||||||||||||
Interest expense | 9,018 | (1,098 | ) | 4,397 | 7,688 | (5 | ) | 20,000 | |||||||||||||||
Depreciation and amortization | 12,261 | 4,559 | 20,257 | 21,673 | 9,210 | 67,960 | |||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 18,826 | $ | 24,164 | $ | 32,893 | $ | 40,006 | $ | (4,529 | ) | $ | 111,360 | ||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||
One time acquisition costs | — | — | — | — | 3,463 | 3,463 | |||||||||||||||||
Transaction related stock compensation | — | — | — | — | — | — | |||||||||||||||||
Asset impairment | — | — | — | — | — | — | |||||||||||||||||
Total adjusting items | — | — | — | — | 3,463 | 3,463 | |||||||||||||||||
Adjusted EBITDA | $ | 18,826 | $ | 24,164 | $ | 32,893 | $ | 40,006 | $ | (1,066 | ) | $ | 114,823 |
The Andersons, Inc. | ||||||||||||||||||||||||
Segment Data | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
(in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||||||||||||||
Three months ended September 30, 2019 | ||||||||||||||||||||||||
Revenues from external customers | $ | 1,580,157 | $ | 254,055 | $ | 109,446 | $ | 39,097 | $ | — | $ | 1,982,755 | ||||||||||||
Gross profit | 74,752 | 6,710 | 15,851 | 11,828 | — | 109,141 | ||||||||||||||||||
Equity in earnings (losses) of affiliates | (98 | ) | (3,630 | ) | — | — | — | (3,728 | ) | |||||||||||||||
Other income (expense), net | 876 | 417 | 510 | 854 | (59 | ) | 2,598 | |||||||||||||||||
Income (loss) before income taxes | (2,001 | ) | (684 | ) | (7,440 | ) | 3,137 | (6,094 | ) | (13,082 | ) | |||||||||||||
Income (loss) attributable to the noncontrolling interests | — | (1,633 | ) | — | — | — | (1,633 | ) | ||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (2,001 | ) | $ | 949 | $ | (7,440 | ) | $ | 3,137 | $ | (6,094 | ) | $ | (11,449 | ) | ||||||||
Three months ended September 30, 2018 | ||||||||||||||||||||||||
Revenues from external customers | $ | 342,610 | $ | 195,669 | $ | 104,188 | $ | 43,112 | $ | — | $ | 685,579 | ||||||||||||
Gross profit | 15,791 | 7,781 | 15,542 | 14,750 | — | 53,864 | ||||||||||||||||||
Equity in earnings of affiliates | 2,412 | 4,813 | — | — | — | 7,225 | ||||||||||||||||||
Other income, net | 92 | 553 | 626 | 220 | 4,943 | 6,434 | ||||||||||||||||||
Income (loss) before income taxes | (9,914 | ) | 10,576 | (7,976 | ) | 5,732 | (2,057 | ) | (3,639 | ) | ||||||||||||||
Income (loss) attributable to the noncontrolling interests | — | 223 | — | — | — | 223 | ||||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (9,914 | ) | $ | 10,353 | $ | (7,976 | ) | $ | 5,732 | $ | (2,057 | ) | $ | (3,862 | ) | ||||||||
Nine months ended September 30, 2019 | ||||||||||||||||||||||||
Revenues from external customers | $ | 4,944,483 | $ | 708,029 | $ | 508,548 | $ | 123,528 | $ | — | $ | 6,284,588 | ||||||||||||
Gross profit | 246,587 | 14,830 | 75,583 | 42,533 | — | 379,533 | ||||||||||||||||||
Equity in earnings (losses) of affiliates | (1,843 | ) | (524 | ) | — | — | — | (2,367 | ) | |||||||||||||||
Other income, net | 1,706 | 695 | 1,647 | 1,392 | 1,209 | 6,649 | ||||||||||||||||||
Income (loss) before income taxes | 4,268 | 3,904 | 4,534 | 10,629 | (15,599 | ) | 7,736 | |||||||||||||||||
Income (loss) attributable to the noncontrolling interests | — | (2,265 | ) | — | — | — | (2,265 | ) | ||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 4,268 | $ | 6,169 | $ | 4,534 | $ | 10,629 | $ | (15,599 | ) | $ | 10,001 | |||||||||||
Nine months ended September 30, 2018 | ||||||||||||||||||||||||
Revenues from external customers | $ | 983,737 | $ | 571,090 | $ | 542,911 | $ | 134,982 | $ | — | $ | 2,232,720 | ||||||||||||
Gross profit | 74,903 | 17,334 | 74,946 | 40,860 | — | 208,043 | ||||||||||||||||||
Equity in earnings of affiliates | 9,909 | 10,692 | — | — | — | 20,601 | ||||||||||||||||||
Other income, net | 615 | 1,741 | 1,900 | 911 | 5,782 | 10,949 | ||||||||||||||||||
Income (loss) before income taxes | (2,453 | ) | 20,528 | 8,239 | 10,645 | (13,734 | ) | 23,225 | ||||||||||||||||
Income (loss) attributable to the noncontrolling interest | — | (175 | ) | — | — | — | (175 | ) | ||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (2,453 | ) | $ | 20,703 | $ | 8,239 | $ | 10,645 | $ | (13,734 | ) | $ | 23,400 | ||||||||||
(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). | ||||||||||||||||||||||||