Good morning, ladies and gentlemen and welcome to the 2020 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. I would now like to turn the conference over to your host, John Kraus, Director of Investor Relations, you may begin.

Thanks, Celine. Good morning everyone and thank you for joining us for The Andersons' First Quarter 2020 Earnings Call. We have provided a slide presentation that will enhance today's discussion. If you're viewing this presentation via our webcast, the slides and commentary will be in sync. This webcast is being recorded and the recording and the supporting slides will be made available on the Investors page of our website at andersonsinc.com shortly. Certain information discussed today constitutes forward-looking statements and actual results could differ materially from those presented in the forward-looking statements as a result of many factors including general economic conditions, weather, competitive conditions, conditions in the company's industries, both in the United States and internationally, the COVID-19 pandemic, and additional factors that are described in the company's publicly filed documents including its 34 Act filings and the prospectuses prepared in connection with the company's offerings. Today's call includes financial information which the company's independent auditors have not completely reviewed. 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 accurate. This presentation and today's prepared remarks contain non-GAAP financial measures. The company believes adjusted pre-tax income, adjusted pre-tax income attributable to the company, 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 pre-tax income, EBITDA and adjusted EBITDA do not and should not be considered as alternatives to net income or income before income taxes as determined by generally accepted accounting principles. On the call with me today are Pat Bowe, President and Chief Executive Officer and Brian Valentine, Executive Vice President and Chief Financial Officer. After our prepared remarks, Pat, Brian and I will be happy to take your questions. Before making his opening comments, I want to reiterate that we were sorry to have to postpone our April 1, 2020 Investor Day. We still intend to host that presentation later this year. We look forward to sharing more details with you about that in the coming weeks. With that Pat, the floor is yours.

Thank you, John, and good morning everyone. Thank you for joining our call this morning not only to review our first quarter results but also so that we can tell you all more about how our company is responding to the COVID-19 pandemic and what we think it might mean for us in the coming months. Before Brian provides the financial details, I want to spend a few moments reflecting on the spreads in the last couple of months. We have operated for more than 70 years with a mission-driven focus on serving our customers, employees, shareholders, and communities. It is a noble purpose. These fundamental principles serve us well in a time of crisis like this. We are an important part of a critical infrastructure industry. We've continued our efforts to provide extraordinary service to our customers by operating our more than 130 facilities because they are central to the North American agriculture supply chain. We've been closely monitoring the crisis and we have an executive-level task force that actively manages our response early on. We've communicated with employees often to make sure that we all practice physical distancing and good health hygiene. We've helped our community leaders identify the most pressing needs and help them fund those needs through both our related private foundations and by matching employee gifts. We've also promoted no-contact volunteer opportunities as a way for our employees and their families to serve their communities. Brian will discuss our financial response to the crisis momentarily. I'm very proud of our response to the pandemic thus far. We've been able to stay responsive to customers and suppliers. Our employees have shifted seamlessly to the new normal, whether it be working from home or in our plants. I'd like to offer my heartfelt thanks to our operational workers who show up every day to support the American Ag food supply chain and to all our employees who kept our business running smoothly. And finally, I'd like to express our deepest sympathies for all the families and communities who have been affected by COVID-19. The pandemic had a significant impact on our first quarter results. The Ethanol Group was the most directly impacted of our four business units, but both the Trade and Rail groups were affected as well. Fully 90% of the $30 million decrease in year-over-year adjusted pre-tax income attributable to the company came from the Ethanol Group, approximately half of which resulted from non-cash charges. A dramatic decrease in vehicle miles traveled resulted from the stay-at-home orders throughout most of the country. Those changes resulted in a significant decline in gasoline demand, which in turn decreased ethanol margins and corn basis. While ethanol production slowed nationally, it did not fall as quickly as demand did leading to record stocks that are now beginning to slowly subside. The Rail Group was impacted by carload traffic declines that are being exacerbated by the pandemic. The Plant Nutrient Group's first quarter was much improved from last year. After Brian discusses our current financial condition and responses to the pandemic, we will quickly review our first quarter financial results and then I'll be back to discuss what we're doing now to manage through the crisis and what we expect to see for the company going forward. Now I'll turn the call over to Brian.

Thanks, Pat, and good morning everyone. Before we dive into our first quarter results, I want to take a moment to explain how we are addressing the financial challenges posed by the pandemic. In brief, we are cutting expenses and saving cash wherever we can. Most importantly, we have sufficient liquidity, highlighted by about $850 million in undrawn capacity from our main credit agreement as of March 31st. Our recent stress tests indicate that we have significant leeway with our debt covenants, which are primarily linked to working capital and various debt-to-capital ratios. As is typical in the first quarter, our short-term debt has increased as we built fertilizer inventories in anticipation of planting season, which we consider to be a normal seasonal occurrence. Reducing our long-term debt remains a key goal, and our long-term debt maturity schedule is well-structured, with no major amounts due until August next year. Since 2016, we have fostered a culture of expense management, identifying over $40 million in expense reduction opportunities in the last four years. More recently, we increased the expected synergies from the Lansing acquisition from $10 million to $15 million and plan to cut other operating expenses by an additional $5 million. However, given the current crisis, we know we need to do more. Therefore, we now aim to reduce expenses in 2020 by $20 million, excluding the previously mentioned amounts. We have already started by cutting discretionary spending, including travel, external contractors, professional fees, and other various expenses. We are also scaling back on capital expenditures. Over the past three years, we averaged more than $200 million annually on maintenance and growth capital spending, but in 2020, we plan to reduce that to around $100 million. That doesn't mean we won't pursue selective growth; for instance, our recent investment in Roger LLC, a new digital platform for truck shipping of bulk commodities, exemplifies such growth. Now, let's move to our first quarter results. In the first quarter of 2020, the company reported a net loss attributable to The Andersons of $37.7 million or $1.15 per diluted share, and an adjusted net loss of $43.2 million or $1.32 per diluted share, on revenues of $1.9 billion. In comparison, the first quarter of 2019 showed a net loss of $14 million or $0.43 per diluted share, with an adjusted net loss of $5.3 million or $0.16 per diluted share on revenues of $2 billion. Adjusted EBITDA attributable to the company fell to $14.7 million in the first quarter of 2020, down from $41.8 million in the same quarter of 2019. Our effective tax rate for the first quarter of 2020 was 2.7%, while the adjusted rate was negative 9.7%. For reference, the full-year rate in 2019 was 27.8%. The adjusted 2020 rate reflects benefits we expect to receive under the CARES Act, which we have excluded from our reported income. We currently anticipate that our effective income tax rate for the full year 2020 will range between 20% and 26%, though this may vary based on the income or loss attributed to non-controlling interests. Long-term debt has increased year-over-year but fell by just over $10 million compared to the prior quarter. Now, let's assess each of our four business units, starting with the Trade Group. The Trade Group posted a pre-tax loss of $10 million and an adjusted pre-tax loss of $8.7 million, compared to a pre-tax loss of $17.9 million and an adjusted pre-tax loss of $6.3 million in the same quarter of 2019. The sharp decline in ethanol demand led to a significant decrease in corn basis, impacting the Trade Group's return on its storage assets compared to the first quarter of 2019. We also raised accounts receivable reserves by about $4 million. The group's food and specialty ingredients sectors performed exceptionally well, more than doubling 2019 results, and its merchandising businesses were profitably stable. The current quarter’s adjusted pre-tax income excludes $1.3 million or $0.03 per diluted share in stock compensation expenses related to the Lansing Trade Group acquisition. We expect to incur $4.2 million in such stock compensation expenses for the full year 2020 and $1.5 million in 2021. The full-year earnings per share impacts of these adjustments based on current shares outstanding are unavailable at this time and $0.04 per share, respectively. The adjusted EBITDA for the Trade Group this quarter was $9.9 million compared to $18.7 million recorded in the first quarter of 2019.

Moving to slide nine, the Ethanol Group experienced a first quarter pre-tax loss of $24 million, compared to a pre-tax income of $3 million in the first quarter of 2019. It's important to note that the first quarter of 2020 includes consolidated results from all five ethanol plants, while the first quarter of 2019 included equity earnings from three of those plants. After a strong start to the quarter, the implementation of stay-at-home orders due to the COVID-19 pandemic led to a significant decline in demand and margins. In March, we announced extended maintenance shutdowns of our facilities. Fortunately, the plants operated efficiently before shutdowns were implemented late in the month, which limited variable costs for first quarter production. Our results reflect non-cash mark-to-market adjustments totaling $14.7 million, with approximately two-thirds stemming from declines in the value of contracts for feedstocks, ethanol, and co-products. The remaining amount comes from a lower of cost or net realizable value inventory adjustment caused by falling ethanol prices and corn basis. The Group reported an EBITDA of negative $14 million for the first quarter of 2020, compared to an EBITDA of $4.1 million in the first quarter of 2019. The change in reporting following last October's merger of our ethanol entities complicates year-over-year EBITDA comparisons. Turning to slide ten, the Plant Nutrient Group posted a pre-tax loss of $1.2 million in the first quarter, which is an improvement over the losses in the same period last year. Decreased operating and interest expenses more than compensated for a minor drop in gross profit due to product movement timing. At the start of the year, the Group reorganized into three segments: Ag Supply Chain, Specialty Liquids, and Engineered Granules. This new structure combines several related businesses to better align with our markets. The adjusted EBITDA for Plant Nutrient for the quarter reached $6.9 million, up from $5 million in the first quarter of 2019. Turning to slide 11, the Rail Group generated $1 million in pre-tax income for the first quarter, down from $4.3 million last year. Leasing results were affected by lower average lease rates, a decrease in leased cars, and some credit challenges in the sand and ethanol sectors. Utilization remained stable at 89%. The total number of cars controlled decreased to 24,400 due to the scrapping of 400 cars, while average cars on lease slightly dropped to 21,900 compared to the fourth quarter. Average lease rates fell by 7% year-over-year. Service and other income remained similar to the amount in the first quarter of 2019, and repair business results showed a slight decline year-over-year. Finally, the Group achieved $14.4 million in EBITDA for the quarter, which is 11% lower than last year's figure. I will now hand things back to Pat. Thanks, Brian. When we last spoke on February 13th, we said that the coronavirus epidemic had not yet had a direct material impact on the company. We also thought that the implementation timeline for the Phase 1 trade agreement with China would be a positive business driver for our trade and Ethanol Groups in 2020. While we continue to learn more each day about the potential economic implications of these unusual times, much more remains unknown than known. We will continue to control what is in our power to control. Though part of the Central U.S. Ag food supply chain, which has operated throughout the crisis, we remain focused on the health and safety of our employees and providing exceptional service to our customers, with a strong start to the spring planting season, which should continue to be a positive for our Plant Nutrient Group. A large corn crop should be beneficial for the Trade Group beginning with the 2020 fall harvest and well into 2021. We expect ethanol demand to improve as the U.S. economy reopens. We operate highly efficient plants and are well positioned to benefit from that when it happens. For the Rail Group, the year-over-year decrease in North American railcar loadings has widened even further over the last 12 weeks, which suggests that both leasing and repair income could trend lower in 2020 than we originally thought. On last quarter's call, we shared that we thought we would remain on pace to hit our $300 million run rate adjusted EBITDA target by the end of this year with the move toward more normal market conditions. Unfortunately, as a result of the COVID-19 pandemic, we do not have normal market conditions, so we do not expect to reach that goal this year. In summary, I'm immensely proud of the whole ANDE team for its efforts to work together effectively under difficult circumstances and provide great service to our customers during this unprecedented time. While economic challenges may continue for a bit longer, our company is in a good position to emerge stronger from this difficult time. We believe in the future of American agriculture and our long-term future in it is strong. With that, I'd like to hand the call back to Celine, the operator and we'll be happy to entertain your questions.

Your first question comes from Kenneth Zaslow from BMO Capital Markets. Please go ahead.

Hey, good morning everyone.

Good morning, Ken.

So, just a couple of questions. Let me start off big picture. Do you think that COVID-19 will change the earnings power? Are there businesses that you think are structurally impaired or do you think it's just a matter of returning? How do you think about that? That's a longer-term question?

Sure. No, it's a good question, Ken. So we have to look at the portfolio. The good news is our Plant Nutrient business is having a very strong spring. As you remember, we had a very wet spring last year that hurt our volumes. We are having a really good start to the year, so our Plant Nutrient business is in a very good position and running well. The Rail business has been impacted with the general economic slowdowns due to COVID and we think lease rates and maybe even volume of repairs will slow as we continue in the year, but that's usually a slower decline number, not a big rapid drop-off. The grain business we're more optimistic about because we see trade improving in the future. We see a very big corn crop, which could give a return to more normal storage income for us. As you know, we had a bad crop in the East and suffered from not having that volume we normally would see, and a return to a bigger corn crop is a good thing for The Andersons. The big unknown probably, Ken, is the ethanol business. Well, we had shut down all five of our plants in the month of March. I think we were early to do so. We got all our maintenance done with our own employees. We didn't want to bring too many contractors to the site at the time of the pandemic, so they are all in great shape to run. We've now brought up two of our plants in Albany, Michigan, and also in Denison, Iowa. So we're less than half rate, but the plants are running well. We took some mark-to-market impacts in ethanol last quarter that we see some of that coming back as the ethanol market returns as gas demand increases. Just today, numbers were out on gasoline demand. We went from down 50% to down 40%. We've seen a nice increase on the week. So that's a little bit of optimism on the recovery and gasoline demand. A long way to go at the beginning of this recovery. But I think the key thing is what will economic conditions be for driving miles thus driving demand for ethanol? That's our big question for the company.

I was surprised by the grain results. Other grain-based companies didn't experience the same issues. There were clear challenges in ethanol, and the weakness was greater than I anticipated. Can you provide some insight into why your grain operations were impacted more than those of some of your larger competitors?

Yeah, that's a very good question, Ken. So, several parts of our business within our Trade Group are doing quite well. Our feed ingredients, pet food, and several of our trading businesses had a very good quarter. Ethanol impacts a lot of our business because we supply a lot of corn to ethanol plants besides our own. So that decline in demand for ethanol and the weakness of the corn basis, especially being a company that has a large eastern footprint in corn, that really hurt us during the quarter on the corn basis. And that's really the particular part that is typical for us in the first quarter.

Okay. My last question is about the ethanol business. How does this situation conclude? Will the industry undergo restructuring? Are we likely to see permanent closures? Or will it remain a prolonged issue until conditions improve? What does the future look like?

That's the crystal ball, it is difficult. You outlined three potential scenarios, right? I think the key thing that we can control is that we have very highly efficient plants, so we want to be a part of the industry that's running and that shows that demand that comes back for gasoline as an ethanol additive. I think there will be some plants that could be permanently closed just due to a very tough economic environment. The key thing for us is just to make sure we're in a very smart position on those plants and run them tight and efficiently and bring them up at the right time when the market asks for them.

Great. I appreciate it. Thank you.

Thanks, Ken.

Your next question comes from the line of Ben Bienvenu from Stephens. Your line is open.

Hey, good morning everyone.

Good morning, Ben.

I want to follow up on the ethanol business. You said you're running at 50% in April. When we think about the demand recovery in gasoline, should we think about you matching that demand in lockstep or are you looking at gasoline demand and saying you want to see a formal recovery before you really ramp production back up?

Yeah. Just to clarify, when I mentioned 50% for April, I didn't mean for the entire quarter. We've recently restarted two of our plants in Albion and Denison due to favorable economics at those locations. It's really a mix of corn basis, ethanol prices, and the overall market for core products. DDGs have improved significantly, which makes it feasible to operate those plants on a cash basis. We're being cautious and strategic about optimizing profitability at each site. We want to avoid being too early; we were quick to shut down the plants, and we don’t want to rush their production ramp-up either. We need to stay aligned with market conditions. The uncertainty lies in gasoline demand each month as the economy starts to recover, so we'll monitor that closely and respond accordingly for each plant.

Okay, great. And I'd love to get your impressions of trade flow outlook. We have good March export numbers and some of the key export categories to China like pork. They've been buying soybeans here more recently. Just how you think about the actions that we've seen in the market and what that could mean for later this year in the context of COVID which obviously casts some uncertainty into what would be potential recovery or normalization of trade flows this year in favor of the market that you're seeing?

Yeah, it's nice to see China back for some commodities. They've also bought some hard wheat and sorghum from the U.S. As you know, Brazil and Argentina had a good year and the devaluation of their currencies has made them very competitive. We are more optimistic about exports to China in the latter half of the year. So any saber-rattling with trade disputes is welcome by the U.S. farmer or the Ag community because we would like to see some volume of exports. We have challenges in the domestically dairy, chicken, swine, and beef markets related to the pandemic and early on those markets need to solidify, but we'll have to see how those go. Ethanol being the biggest demand decline in corn, so going into a big corn crop, I think we'll feel good about righting corn basis and capturing corn carries in the ETG Group.

Okay, and my phone was cutting out a bit. So I apologize if you talked about this already, but just where in your ethanol business, if at all, you're hedged through the rest of the year and what kind of coverage you guys have heading into Q2 and Q3?

We currently don't have any forward coverage. We haven't found any attractive opportunities to act on. If something arises, we will take advantage of it. However, there haven't been any opportunities to secure forward bookings for this year.

Okay. Thank you so much.

There are no further questions at this time, I will now turn the call back over to John Kraus.

Thanks, Celine. We want to thank you all for joining us this morning. I also want to mention again that this presentation and slides with additional supporting information are available on the Investors page of our website at andersonsinc.com. Our next earnings conference call is scheduled for Wednesday, August 5, 2020, at 11 AM Eastern Time when we will review our second quarter 2020 results. We hope you can join us again at that time, until then be well.

This concludes today's teleconference. You may now disconnect.