Document

"Overall, our second quarter results were consistent with our expectations given the shift in ag markets over the past several months. Renewables had a very solid quarter with increased ethanol production and higher margins but didn't match last year's results on declining co-product values. Trade results were slightly improved from last year despite lower prices and volatility. With the majority of fertilizer applications occurring in the second quarter, Nutrient & Industrial had solid results although well behind last year's outsized performance given weather-related delays and lower margins," said Chairman and CEO Pat Bowe. "Farmer selling remains relatively quiet with adequate supply in this low-price commodity environment. We are seeing the benefits of our portfolio mix with grain assets and our growing premium ingredients business helping to offset a reduction in merchandising opportunities."

"We actively pursue opportunities for growth. In early June, we announced plans to acquire an ownership interest in Skyland Grain LLC, which holds a large grain and agronomy footprint spread across Kansas, Eastern Colorado, and the Texas and Oklahoma panhandles. We are devoting significant resources to this opportunity and expect to provide an update later in the third quarter," continued Bowe. "Our longer-term Renewables projects are moving forward, and we are focused on lowering the carbon intensity of our ethanol plants. We continue to manage a robust pipeline with meaningful growth opportunities in each of our businesses."


$ in millions, except per share amounts
	Q2 2024		Q2 2023		Variance		YTD 2024		YTD 2023		Variance
Pretax Income	$	57.3	$	104.4	$	(47.1)	$	71.3	$	39.4	$	31.9
Pretax Income Attributable to the Company1	40.9		76.8		(35.9)		47.7		56.1		(8.4)
Adjusted Pretax Income Attributable to the Company1	44.9		72.5		(27.6)		51.5		80.6		(29.1)
Trade1	9.5		7.2		2.3		18.2		30.9		(12.7)
Renewables1	22.7		32.4		(9.7)		35.3		38.7		(3.4)
Nutrient & Industrial	23.4		42.6		(19.2)		21.6		32.1		(10.5)
Other	(10.7)		(9.7)		(1.0)		(23.6)		(21.2)		(2.4)
Net Income Attributable to the Company	36.0		55.0		(19.0)		41.6		40.3		1.3
Adjusted Net Income Attributable to the Company1	39.5		51.8		(12.3)		45.1		58.6		(13.5)
Diluted Earnings Per Share ("EPS")	1.05		1.61		(0.56)		1.21		1.18		0.03
Adjusted EPS1	1.15		1.52		(0.37)		1.31		1.72		(0.41)
EBITDA1	94.2		148.7		(54.5)		145.7		132.6		13.1
Adjusted EBITDA from Continuing Operations1	$	98.3	$	144.4	$	(46.1)	$	149.4	$	199.7	$	(50.3)
1 Non-GAAP financial measures; see appendix for explanations and reconciliations.

"Our businesses generate consistent cash flows and we've continued to reduce debt," said Executive Vice President and CFO Brian Valentine. "With the strong cash flows and lower commodity prices, we continue to show a higher-than-normal cash position at this point in the year. We remain well below our long-term debt to EBITDA target of less than 2.5 times and are pleased with the strength of our balance sheet. We expect to invest in additional growth projects utilizing a disciplined approach to ensure that projects align with our stated strategy and meet appropriate financial hurdles."

Results from our grain asset footprint were better than the prior year, due to improved wheat storage income in the eastern grain belt. Trade's growing premium food and feed ingredients business also showed year-over-year improvement, driven by the addition of ACJ International, acquired in July 2023, and other recent growth capital investments. The merchandising business remained profitable but below 2023. Commodity markets are currently well-supplied with limited volatility. Farmer engagement remains slow due to overall market prices. While these carry markets benefit our assets, reduced volatility and lower prices limit opportunities for the merchandising business.

Margins on ethanol production improved year-over-year on lower corn basis in the east. Production facilities continued to operate efficiently in the quarter with increased volume and higher ethanol yields. Plant co-product values, particularly feed ingredients, were lower with feed ingredients following the overall price reduction of corn; however, feed ingredient demand improved year-over-year. Renewable diesel feedstock volumes continue to grow albeit with compressed margins on industry fundamentals. With a continued strong export environment, the ethanol margin environment should remain favorable.

The Nutrient & Industrial segment reported pretax income of $23 million, compared to a very strong 2023 second quarter pretax income of $43 million. Volumes were negatively impacted by a late and wet spring application season in our market areas and declining nutrient prices did not provide outsized margin opportunities we've seen in prior years. Also impacting the year-over-year comparison was a 2023 second quarter that had a significant shift of income from Q1 into Q2. The engineered granules business saw improvement in the quarter on higher sales volume. Looking forward, second half agronomy sales and applications are dependent on the timing of harvest and grower's overall profitability.

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, geopolitical risk, 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.

This release contains non-GAAP financial measures. The company believes that pretax income (loss) attributable to the company; adjusted pretax income (loss) attributable to the company; adjusted pretax income (loss); adjusted net income attributable to the company; adjusted diluted earnings per share; earnings before interest, taxes, depreciation, and amortization (or EBITDA); adjusted EBITDA; and cash from operations before working capital changes provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and liquidity and better period-to-period comparability. The above measures are not and should not be considered as alternatives to pretax income (loss) or income (loss) before income taxes, net income (loss), diluted earnings (loss) per share attributable to The Andersons, Inc. common shareholders and cash provided by (used in) operating activities as determined by generally accepted accounting principles. Reconciliations of the GAAP to non-GAAP measures may be found within this press release and the financial tables provided herein.

The Andersons, Inc., named for 2024 to Forbes list of America’s Most Successful Small Companies, Newsweek’s list of America’s Most Responsible Companies, and one of The Americas’ Fastest Growing Companies by the Financial Times, is a diversified company rooted in agriculture that conducts business in the commodity merchandising, renewables, and nutrient & industrial sectors. Guided by its Statement of Principles, The Andersons is committed to providing extraordinary service to its customers, helping its employees improve, supporting its communities, and increasing the value of the company. For more information, please visit www.andersonsinc.com.


	Three months ended June 30,				Six months ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Sales and merchandising revenues	$	2,795,205	$	4,020,183	$	5,513,422	$	7,901,421
Cost of sales and merchandising revenues	2,619,834		3,798,246		5,209,731		7,531,473
Gross profit	175,371		221,937		303,691		369,948
Operating, administrative and general expenses	116,614		116,007		235,972		233,242
Asset impairment	—		—		—		87,156
Interest expense, net	6,611		13,953		13,133		30,578
Other income, net	5,200		12,441		16,728		20,445
Income before income taxes	57,346		104,418		71,314		39,417
Income tax provision	4,876		21,732		6,179		15,848
Net income	52,470		82,686		65,135		23,569


Net income (loss) attributable to noncontrolling interests	16,494		27,640		23,578		(16,727)
Net income attributable to The Andersons, Inc.	$	35,976	$	55,046	$	41,557	$	40,296

Earnings per share attributable to The Andersons, Inc. common shareholders:
Basic earnings:	$	1.06	$	1.63	$	1.22	$	1.20



Diluted earnings:	$	1.05	$	1.61	$	1.21	$	1.18


(in thousands)	June 30, 2024		December 31, 2023		June 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	530,386	$	643,854	$	96,293
Accounts receivable, net	743,550		762,549		1,030,271
Inventories	686,540		1,166,700		990,789
Commodity derivative assets – current	180,189		178,083		347,684
Other current assets	108,634		55,777		72,228
Total current assets	2,249,299		2,806,963		2,537,265




Property, plant and equipment, net	694,136		693,365		663,441
Other assets, net	356,378		354,679		369,340


Total assets	$	3,299,813	$	3,855,007	$	3,570,046

Liabilities and equity
Current liabilities:
Short-term debt	$	4,021	$	43,106	$	102,752
Trade and other payables	607,083		1,055,473		641,376
Customer prepayments and deferred revenue	124,424		187,054		189,947
Commodity derivative liabilities – current	128,847		90,849		251,101
Current maturities of long-term debt	27,671		27,561		27,511

Accrued expenses and other current liabilities	192,683		232,288		180,552
Total current liabilities	1,084,729		1,636,331		1,393,239

Long-term debt, less current maturities	549,378		562,960		576,489

Other long-term liabilities	145,444		139,329		161,836
Total liabilities	1,779,551		2,338,620		2,131,564
Total equity	1,520,262		1,516,387		1,438,482
Total liabilities and equity	$	3,299,813	$	3,855,007	$	3,570,046

(unaudited)


	Six months ended June 30,
(in thousands)	2024		2023
Operating Activities
Net income	$	65,135	$	23,569


Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	61,218		62,585







Asset impairment	—		87,156

Other	10,821		952
Changes in operating assets and liabilities:
Accounts receivable	15,284		207,867
Inventories	477,723		734,855
Commodity derivatives	36,010		102,753
Other current and non-current assets	(50,587)		(1,247)
Payables and other current and non-current liabilities	(550,797)		(1,011,086)
Net cash provided by operating activities	64,807		207,404
Investing Activities
Acquisition of businesses, net of cash acquired	(9,561)		—
Purchases of property, plant and equipment and capitalized software	(55,389)		(74,991)






Other	6,812		3,318
Net cash used in investing activities	(58,138)		(71,673)
Financing Activities
Net payments under short-term lines of credit	(37,705)		(173,384)


Proceeds from issuance of long-term debt	—		100,000
Payments of long-term debt	(13,752)		(35,861)

Distributions to noncontrolling interest owner	(47,405)		(24,344)

Dividends paid	(12,993)		(12,527)

Value of shares withheld for taxes	(8,071)		(6,616)

Other	—		(2,255)
Net cash used in financing activities	(119,926)		(154,987)
Effect of exchange rates on cash and cash equivalents	(211)		280
Decrease in cash and cash equivalents	(113,468)		(18,976)
Cash and cash equivalents at beginning of period	643,854		115,269
Cash and cash equivalents at end of period	$	530,386	$	96,293


	Three months ended June 30,				Six months ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Net income	$	52,470	$	82,686	$	65,135	$	23,569
Net income (loss) attributable to noncontrolling interests	16,494		27,640		23,578		(16,727)
Net income attributable to The Andersons, Inc.	35,976		55,046		41,557		40,296
Adjustments:


Transaction related compensation	4,049		939		6,900		2,607
Gain on deconsolidation of joint venture	—		(6,544)		(3,117)		(6,544)
Insured inventory expenses (recoveries)	—		1,310		—		(16,080)
Asset impairment	—		—		—		44,450
Income tax impact of adjustments1	(531)		1,074		(252)		(6,108)
Total adjusting items, net of tax	3,518		(3,221)		3,531		18,325
Adjusted net income attributable to The Andersons, Inc.	$	39,494	$	51,825	$	45,088	$	58,621

Diluted earnings per share attributable to The Andersons, Inc. common shareholders	$	1.05	$	1.61	$	1.21	$	1.18

Impact on diluted earnings (loss) per share	$	0.10	$	(0.09)	$	0.10	$	0.54
Adjusted diluted earnings per share	$	1.15	$	1.52	$	1.31	$	1.72

Adjusted net income (loss) attributable to The Andersons, Inc. reflects reported net income (loss) available to The Andersons, Inc. common shareholders after the removal of specified items described above. Adjusted diluted earnings (loss) per share reflects the fully diluted EPS of The Andersons, Inc. after removal of the effect on EPS as reported of specified items described above. Management believes that Adjusted net income (loss) attributable to The Andersons, Inc. and Adjusted diluted earnings (loss) per share are useful measures of The Andersons, Inc. performance as they provide investors additional information about the operations of the company allowing better evaluation of underlying business performance and better comparability to previous periods. These non-GAAP financial measures are not intended to replace or be alternatives to Net income attributable to The Andersons, Inc. and Diluted earnings per share attributable to The Andersons, Inc. common shareholders as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s average number of diluted shares outstanding for each respective period in order to arrive at an adjusted diluted earnings (loss) per share amount for each specified item.


(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Three months ended June 30, 2024
Sales and merchandising revenues	$	1,757,741	$	686,127	$	351,337	$	—	$	2,795,205
Gross profit	79,648		46,727		48,996		—		175,371
Operating, administrative and general expenses	72,803		7,756		25,393		10,662		116,614
Other income (loss), net	4,033		1,176		509		(518)		5,200
Income (loss) before income taxes	5,424		39,200		23,419		(10,697)		57,346
Income attributable to noncontrolling interests	—		16,494		—		—		16,494
Income (loss) before income taxes attributable to The Andersons, Inc.1	$	5,424	$	22,706	$	23,419	$	(10,697)	$	40,852
Adjustments to income (loss) before income taxes2	4,049		—		—		—		4,049
Adjusted income (loss) before income taxes attributable to The Andersons, Inc.1	$	9,473	$	22,706	$	23,419	$	(10,697)	$	44,901

Three months ended June 30, 2023
Sales and merchandising revenues	$	2,696,810	$	877,781	$	445,592	$	—	$	4,020,183
Gross profit	80,711		68,292		72,934		—		221,937
Operating, administrative and general expenses	69,146		7,568		28,886		10,407		116,007
Other income, net	4,328		7,468		500		145		12,441
Income (loss) before income taxes	4,990		66,604		42,565		(9,741)		104,418
Income attributable to noncontrolling interests	—		27,640		—		—		27,640
Income (loss) before income taxes attributable to The Andersons, Inc.1	$	4,990	$	38,964	$	42,565	$	(9,741)	$	76,778
Adjustments to income (loss) before income taxes2	2,249		(6,544)		—		—		(4,295)
Adjusted income (loss) before income taxes attributable to The Andersons, Inc.1	$	7,239	$	32,420	$	42,565	$	(9,741)	$	72,483
1 Income (loss) before income taxes attributable to The Andersons, Inc. for each operating segment 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. 2 Additional information on the individual adjustments that are included in the adjustments to income (loss) before income taxes can be found in the Reconciliation to EBITDA and Adjusted EBITDA table.



(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Six months ended June 30, 2024
Sales and merchandising revenues	$	3,651,600	$	1,343,166	$	518,656	$	—	$	5,513,422
Gross profit	157,930		73,297		72,464		—		303,691
Operating, administrative and general expenses	145,061		15,753		50,836		24,322		235,972
Other income (loss), net	9,566		5,926		1,557		(321)		16,728
Income (loss) before income taxes	11,348		61,991		21,569		(23,594)		71,314
Income attributable to noncontrolling interests	—		23,578		—		—		23,578
Income (loss) before income taxes attributable to The Andersons, Inc.1	$	11,348	$	38,413	$	21,569	$	(23,594)	$	47,736
Adjustments to income (loss) before income taxes2	6,900		(3,117)		—		—		3,783
Adjusted income (loss) before income taxes attributable to The Andersons, Inc.1	$	18,248	$	35,296	$	21,569	$	(23,594)	$	51,519

Six months ended June 30, 2023
Sales and merchandising revenues	$	5,574,590	$	1,717,297	$	609,534	$	—	$	7,901,421
Gross profit	197,889		84,095		87,964		—		369,948
Operating, administrative and general expenses	141,126		16,472		53,018		22,626		233,242
Other income, net	10,311		8,309		1,346		479		20,445
Income (loss) before income taxes	44,354		(15,909)		32,127		(21,155)		39,417
Loss attributable to noncontrolling interests	—		(16,727)		—		—		(16,727)
Income (loss) before income taxes attributable to The Andersons, Inc.1	$	44,354	$	818	$	32,127	$	(21,155)	$	56,144
Adjustments to income (loss) before income taxes2	(13,473)		37,906		—		—		24,433
Adjusted income (loss) before income taxes attributable to The Andersons, Inc.1	$	30,881	$	38,724	$	32,127	$	(21,155)	$	80,577
1 Income (loss) before income taxes attributable to The Andersons, Inc. for each operating segment 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. 2 Additional information on the individual adjustments that are included in the adjustments to income (loss) before income taxes can be found in the Reconciliation to EBITDA and Adjusted EBITDA table. All adjustments are consistent with the EBITDA reconciliation with the exception of a $42.7 million difference in the Renewables segment which represents the asset impairment expense attributable to the non-controlling interest that is reflected in Income attributable to the noncontrolling interest within the reconciliation above.


(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Three months ended June 30, 2024
Net income (loss)	$	5,424	$	39,200	$	23,419	$	(15,573)	$	52,470
Interest expense (income)	5,454		947		693		(483)		6,611
Tax provision	—		—		—		4,876		4,876
Depreciation and amortization	9,314		11,719		7,965		1,271		30,269
EBITDA	20,192		51,866		32,077		(9,909)		94,226
Adjusting items impacting EBITDA:
Transaction related compensation	4,049		—		—		—		4,049





Total adjusting items	4,049		—		—		—		4,049
Adjusted EBITDA	$	24,241	$	51,866	$	32,077	$	(9,909)	$	98,275

Three months ended June 30, 2023
Net income (loss)	$	4,990	$	66,604	$	42,565	$	(31,473)	$	82,686
Interest expense (income)	10,903		1,588		1,983		(521)		13,953
Tax provision	—		—		—		21,732		21,732
Depreciation and amortization	8,683		12,425		7,097		2,160		30,365
EBITDA	24,576		80,617		51,645		(8,102)		148,736
Adjusting items impacting EBITDA:
Transaction related compensation	939		—		—		—		939
Insured inventory recoveries	1,310		—		—		—		1,310


Gain on deconsolidation of joint venture	—		(6,544)		—		—		(6,544)
Total adjusting items	2,249		(6,544)		—		—		(4,295)
Adjusted EBITDA	$	26,825	$	74,073	$	51,645	$	(8,102)	$	144,441

Adjusted EBITDA is defined as earnings before interest, taxes and depreciation and amortization, adjusted for specified items. The company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense, tax expense and depreciation and amortization to net income (loss). Management believes that adjusted EBITDA is a useful measure of the company’s performance as it provides investors additional information about the company’s operations allowing better evaluation of underlying business performance and improved comparability to prior periods. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to net income (loss), the most directly comparable GAAP financial measure.


(in thousands)	Trade		Renewables		Nutrient & Industrial		Other		Total
Six months ended June 30, 2024
Net income (loss)	$	11,348	$	61,991	$	21,569	$	(29,773)	$	65,135
Interest expense (income)	11,087		1,479		1,616		(1,049)		13,133
Tax provision	—		—		—		6,179		6,179
Depreciation and amortization	18,569		23,684		15,758		3,207		61,218
EBITDA	41,004		87,154		38,943		(21,436)		145,665
Adjusting items impacting EBITDA:
Transaction related compensation	6,900		—		—		—		6,900




Gain on deconsolidation of joint venture	—		(3,117)		—		—		(3,117)
Total adjusting items	6,900		(3,117)		—		—		3,783
Adjusted EBITDA	$	47,904	$	84,037	$	38,943	$	(21,436)	$	149,448

Six months ended June 30, 2023
Net income (loss)	$	44,354	$	(15,909)	$	32,127	$	(37,003)	$	23,569
Interest expense (income)	22,720		4,685		4,165		(992)		30,578
Tax provision	—		—		—		15,848		15,848
Depreciation and amortization	17,328		26,896		14,054		4,307		62,585
EBITDA	84,402		15,672		50,346		(17,840)		132,580
Adjusting items impacting EBITDA:
Transaction related compensation	2,607		—		—		—		2,607
Insured inventory recoveries	(16,080)		—		—		—		(16,080)

Gain on deconsolidation of joint venture	—		(6,544)		—		—		(6,544)
Asset impairment	—		87,156		—		—		87,156
Total adjusting items	(13,473)		80,612		—		—		67,139
Adjusted EBITDA	$	70,929	$	96,284	$	50,346	$	(17,840)	$	199,719


	Three Months Ended,								Twelve months ended June 30, 2024
(in thousands)	September 30, 2023		December 31, 2023		March 31, 2024		June 30, 2024
Net income	$	30,523	$	78,437	$	12,665	$	52,470	$	174,095
Interest expense	8,188		8,101		6,522		6,611		29,422
Tax provision	7,862		13,324		1,303		4,876		27,365
Depreciation and amortization	31,215		31,306		30,949		30,269		123,739
EBITDA	77,788		131,168		51,439		94,226		354,621
Adjusting items impacting EBITDA:
Transaction related compensation	1,999		3,212		2,852		4,049		12,112
Gain on sale of assets	(5,643)		—		—		—		(5,643)
Gain on cost method investment	(4,798)		—		—		—		(4,798)
Impairment on equity method investments	963		—		—		—		963

Gain on deconsolidation of joint venture	—		—		(3,117)		—		(3,117)

Goodwill impairment	—		686		—		—		686
Total adjusting items	(7,479)		3,898		(265)		4,049		203
Adjusted EBITDA	$	70,309	$	135,066	$	51,174	$	98,275	$	354,824

	Three Months Ended,								Twelve months ended June 30, 2023
	September 30, 2022		December 31, 2022		March 31, 2023		June 30, 2023
Net income (loss)	$	24,880	$	21,170	$	(59,117)	$	82,686	$	69,619
Interest expense	14,982		14,087		16,625		13,953		59,647
Tax provision (benefit)	9,839		9,933		(5,884)		21,732		35,620
Depreciation and amortization	33,322		33,476		32,220		30,365		129,383
EBITDA	83,023		78,666		(16,156)		148,736		294,269
Adjusting items impacting EBITDA:
Insured inventory expenses (recoveries)	—		15,993		(17,390)		1,310		(87)
Transaction related compensation	—		—		1,668		939		2,607
Asset impairment	—		9,000		87,156		—		96,156

Gain on deconsolidation of joint venture	—		—		—		(6,544)		(6,544)
Total adjusting items	—		24,993		71,434		(4,295)		92,132
Adjusted EBITDA	$	83,023	$	103,659	$	55,278	$	144,441	$	386,401


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2024		2023		2024		2023
Cash provided by operating activities	$	304,434	$	540,939	$	64,807	$	207,404
Changes in operating assets and liabilities
Accounts receivable	(42,441)		82,754		15,284		207,867
Inventories	308,640		556,845		477,723		734,855
Commodity derivatives	64,508		19,605		36,010		102,753
Other current and non-current assets	(52,510)		16,296		(50,587)		(1,247)
Payables and other current and non-current liabilities	(62,528)		(250,794)		(550,797)		(1,011,086)
Total changes in operating assets and liabilities	215,669		424,706		(72,367)		33,142
Adjusting items impacting cash from operations before working capital changes:
Less: Insured inventory expenses (recoveries)	—		1,310		—		(16,080)

Cash from operations before working capital changes	$	88,765	$	117,543	$	137,174	$	158,182

Cash from operations before working capital changes is defined as cash provided by (used in) operating activities before the impact of changes in working capital within the statement of cash flows. The Company calculates cash from operations by eliminating the effect of changes in accounts receivable, inventories, commodity derivatives, other assets, and payables and accrued expenses from the cash provided by (used in) operating activities. Management believes that cash from operations before working capital changes is a useful measure of the company’s performance as it provides investors additional information about the company’s operations allowing better evaluation of underlying business performance and improved comparability to prior periods. Cash from operations before working capital changes is a non-GAAP financial measure and is not intended to replace or be an alternative to cash provided by (used in) operating activities, the most directly comparable GAAP financial measure.