8-K
Andersons, Inc. (ANDE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 8-K
______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
| Date of Report (Date of Earliest Event Reported): | August 4, 2020 |
|---|
__________________________________________
The Andersons, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
| Ohio | 000-20557 | 34-1562374 |
|---|---|---|
| (State of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1947 Briarfield Boulevard
Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
(419) 893-5050
(Registrant’s telephone number, including area code)
__________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[☐] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[☐] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[☐] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[☐] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol | Name of each exchange on which registered: |
|---|---|---|
| Common stock, $0.00 par value, $0.01 stated value | ANDE | The NASDAQ Stock Market LLC |
__________________________________________
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
[☐] Emerging growth company
[☐] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
The Andersons, Inc. issued a press release announcing its second quarter 2020 earnings. This press release is attached as exhibit 99.1 to this filing.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are filed with this Current Report on Form 8-K:
| Exhibit No. | Description |
|---|---|
| 99.1 | Second Quarter 2020 Earnings Release |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| The Andersons, Inc. | ||
|---|---|---|
| August 4, 2020 | By: | /s/ Brian A. Valentine |
| Name: Brian A. Valentine | ||
| Title: Executive Vice President and Chief Financial Officer | ||
| (Principal Financial Officer) |
Document
NEWS RELEASE
The Andersons, Inc. Reports Second Quarter Results and
Announces Business Structure and Organizational Changes
MAUMEE, OHIO, August 4, 2020 - The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the second quarter ended June 30, 2020 and business structure and organizational changes.
Second Quarter Highlights:
•Company reported net income attributable to The Andersons of $30.4 million, or $0.92 per diluted share, and adjusted net income of $29.3 million, or $0.88 per diluted share.
•Adjusted EBITDA attributable to the company was $70.7 million for the quarter.
•Trade Group reported pretax income of $0.4 million and adjusted pretax income of $1.4 million despite a tough operating environment.
•Ethanol Group reported pretax income attributable to the company of $0.9 million due to its timely maintenance shutdowns and improved ethanol margins.
•Plant Nutrient Group recorded pretax income of $19.4 million driven by a strong planting season.
•Rail Group earned $2.6 million of pretax income due to lower car sale income.
•Company announced a reorganization of its business groups and several leadership changes.
"I am proud of what we were able to accomplish in the second quarter, as all four of our business groups were profitable,” said President and CEO Pat Bowe. "We are focused on transforming The Andersons into a more cost-efficient company positioned for scalable growth. Our vision is to be the most nimble and innovative North American ag supply chain company. The steps we are taking to transform the organization should ensure that we have the right vision at the right time to continue to serve our customers."
"Our Plant Nutrient Group's income was up more than 20 percent due to an excellent spring planting season," continued Bowe. "Our Ethanol Group's navigation of the unprecedented decrease in demand due to the COVID-19 crisis helped produce good results under those difficult conditions. The Trade Group continued to feel the effects of a small 2019 corn crop in the East. Both the Trade Group and the Rail Group both felt the persistent negative impact of the pandemic on customer demand. Both groups were profitable for the quarter."
“I want to again thank our employees, particularly those working in our plants and operations, for continuing to demonstrate their commitment to the company and to our customers and communities by keeping our businesses running safely and effectively during this time. We have maintained as our top priority, the health and safety of our employees, who have performed admirably in these difficult circumstances. We also extend our thanks to the health and safety personnel in our communities who have helped respond to the pandemic.”
| in millions, except per share amounts | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Q2 2019 | Variance | YTD 2020 | YTD 2019 | Variance | |||||||
| Pretax Income (Loss) Attributable to the Company1 | 18.2 | $ | 40.9 | $ | (22.7) | $ | (20.9) | $ | 21.5 | $ | (42.4) |
| Adjusted Pretax Income (Loss) Attributable to the Company1 | 44.1 | (22.5) | (16.2) | 36.2 | (52.4) | ||||||
| Trade Group | 25.8 | (24.4) | (7.2) | 19.5 | (26.7) | ||||||
| Ethanol Group1 | 3.7 | (2.8) | (23.1) | 6.8 | (29.9) | ||||||
| Plant Nutrient Group | 15.9 | 3.5 | 18.2 | 12.0 | 6.2 | ||||||
| Rail Group | 3.2 | (0.6) | 3.6 | 7.5 | (3.9) | ||||||
| Other | (4.6) | 1.9 | (7.7) | (9.5) | 1.8 | ||||||
| Net Income (Loss) Attributable to the Company1 | 29.9 | 0.5 | (7.2) | 15.9 | (23.1) | ||||||
| Adjusted Net Income (Loss) Attributable to the Company1 | 32.3 | (3.0) | (14.0) | 27.0 | (41.0) | ||||||
| Diluted EPS | 0.91 | 0.01 | (0.22) | 0.48 | (0.70) | ||||||
| Adjusted Diluted EPS | 0.98 | (0.10) | (0.43) | 0.81 | (1.24) | ||||||
| EBITDA | 86.4 | (19.7) | 76.6 | 116.6 | (40.0) | ||||||
| Adjusted EBITDA Attributable to the Company | 70.7 | $ | 90.1 | $ | (19.4) | $ | 85.4 | $ | 132.0 | $ | (46.6) |
All values are in US Dollars.
^1^Reflects amounts attributable to the company and excludes losses attributable to the noncontrolling interests of $10.4 in Q2 2020, $0.5 in Q2 2019, $23.9 for year-to-date 2020 and $0.6 for year-to-date 2019. See non-GAAP reconciliations in the accompanying tables.
Company Continues to Actively Manage COVID-19 Pandemic
The company's executive-level response team has continued to closely monitor the crisis, share information and best practices across the company’s operations and manage its coordinated response. It has also implemented policies for remote work and supplemental sick time for those employees who have been impacted by the virus. Employees continue to practice appropriate social distancing and follow protocols for sanitation and good hygiene developed in conjunction with the pandemic.
Strategic Business Structure and Senior Leadership Changes Announced
The company announced strategic business structure and senior leadership changes. Among the changes were the following:
•The Trade Group and Ethanol Group will be combined and led by President Bill Krueger, who was formerly president of the Trade Group. Jim Pirolli, who was the Ethanol Group president, has been appointed senior vice president of the combined group, which will enable him to assume expanded responsibilities.
•The Plant Nutrient Group and Rail Group will be combined and led by Joe McNeely, who was formerly the president of the Rail Group.
"This new structure will enable us to focus on increasing gross profit and enhancing service to our customers, while also managing our cost structure," said Bowe. "The combination of the Trade and Ethanol Groups will allow for greater strategic alignment, risk management and integrated service to our customers. This restructuring of our business will also result in a leaner cost environment."
Liquidity and Cash Management
“We generated strong operating cash flows and continued to manage capital expenditures during the second quarter,” said Executive Vice President and CFO Brian Valentine. “As the pandemic persists, we remain very focused on overall liquidity, including expense and cash management."
In May, the company announced that it was targeting total expense reductions of $30 million in 2020, with approximately half of those savings expected to be permanent in nature. The company anticipates further general and administrative cost reductions that will be realized beginning in early 2021.
The company still expects to spend approximately $100 million on capital projects in 2020 after averaging more than $200 million over the last three years. This reduction prudently preserves working capital and supports our continued strong financial position.
Second Quarter Segment Overview
Trade Group Records Lower Adjusted Results Driven by Low Income from Storage Assets
The Trade Group recorded pretax income of $0.4 million and adjusted pretax income of $1.4 million for the quarter compared to pretax income of $22.6 million and adjusted pretax income of $25.8 million in the second quarter of 2019. The 2019 results were positively impacted by corn and wheat basis appreciation caused by the poor 2019 planting season and concerns about adequate grain supplies.
•The merchandising business continued to perform well, with comparable year-over-year results.
•The group's return on its Eastern Corn Belt assets was hurt by the small 2019 harvest and COVID-related decreases in demand, which resulted in compressed margins, minimal basis appreciation and lower originations.
The group adjusted its reported pretax income by $1.0 million for stock compensation expense associated with the 2019 acquisition of Lansing Trade Group.
The group’s second quarter adjusted EBITDA was $17.5 million compared to second quarter 2019 adjusted EBITDA of $46.8 million.
The group anticipates a large corn harvest, which should improve profitability during the latter part of the year and into 2021.
Ethanol Group Records a Profit Due to Timely Maintenance Shutdowns and Improving Margins
The Ethanol Group reported pretax income attributable to the company of $0.9 million in the second quarter compared to the $3.7 million of pretax income attributable to the company it earned in the same period in 2019.
•Margins began to improve in early May and were strong by the end of the quarter as improving demand outpaced increases in industry production.
•As expected, a significant portion of the non-cash mark-to-market losses recorded in the first quarter reversed during the second quarter.
•The group's five plants operated at approximately 50 percent of capacity during the quarter as planned. The group safely completed extended maintenance shutdowns using largely its own employees.
The group recorded adjusted EBITDA attributable to the company of $11.0 million in the second quarter of 2020 compared to 2019 second quarter adjusted EBITDA attributable to the company of $4.5 million.
Plant Nutrient Group Pretax Income Increases 22 Percent Driven by a Strong Planting Season
The Plant Nutrient Group improved its results year over year, recording pretax income of $19.4 million compared to pretax income of $15.9 million in the same period of the prior year. This was the fifth consecutive quarter that the group posted improved year-over-year results.
•Volumes were up substantially due to a strong planting season.
•Improved Engineered Granules results continued to be driven by better procurement and operating expenses controls.
The group’s current quarter EBITDA was $27.2 million compared to 2019 second quarter EBITDA of $24.9 million.
The group's near-term outlook is guarded, as low corn prices and COVID-related demand decreases in the industrial sector may offset the positive impacts of continuing cost reductions, which have improved results over the last several quarters, and new business opportunities in Engineered Granules.
Rail Group Results Down Slightly on Lower Car Sale Income
The Rail Group earned second quarter pretax income of $2.6 million compared to $3.2 million in the same period of the prior year.
•Railcar leasing results were flat year over year. Cars on lease, average lease rate and utilization were all lower as railcar loadings continued to decrease.
•Income from cars sales was negligible.
•Service and other pretax income was unchanged.
The group’s second quarter 2020 EBITDA of $15.3 million was comparable to its second quarter 2019 EBITDA.
The COVID-19 pandemic has caused the idling of nearly one-third of the North American railcar fleet and has driven year-to-date railcar loadings 16 percent lower year over year through June. These conditions are expected to continue until the general economy returns to normal levels, and will continue to negatively impact lease renewals, lease rates and demand for railcar repairs.
Provision for Income Taxes Includes CARES Act Benefits
The company’s second quarter income tax provision included additional CARES Act tax benefits of approximately $3.7 million, or $0.11 per diluted share in the current quarter and approximately $10.3 million, or $0.31 per diluted share year to date. As with the impacts of the Tax Cuts and Jobs Act of 2017 and CARES Act benefits recognized in the first quarter of 2020, the company has excluded the current quarter benefits from its adjusted net income. This quarter's additional benefits are expected to result in cash refunds of nearly $14 million, bringing the total expected CARES Act refunds in 2020 to approximately $32 million. In addition, the company’s reported effective income tax rate is substantially impacted by the income or loss earned by the noncontrolling interests and may result in highly variable effective tax rates in future periods.
Conference Call
The company will host a webcast on Wednesday, August 5, 2020, at 11 a.m. Eastern Daylight Time, to discuss its performance and provide its updated outlook for 2020. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 3588432). It is recommended that you call 10 minutes before the conference call begins.
To access the webcast, click on the link: http://edge.media-server.com/mmc/p/r7mauxjq. Complete the four fields as directed and click Submit. A replay of the call can also be accessed under the heading "Investors" on the company’s website at www.andersonsinc.com.
Investor Day Rescheduled
The company has rescheduled its investor day for the morning of Tuesday, December 8, 2020. The event will be presented in a virtual format. The company will share more details about the event at a later date.
Forward-Looking Statements
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, the COVID-19 pandemic 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.
Non-GAAP Measures
This release contains non-GAAP financial measures. The company believes that pretax income attributable to The Andersons, adjusted pretax income attributable to the company, net income attributable to the company, adjusted net income attributable to the company, adjusted diluted earnings per share, EBITDA and adjusted EBITDA attributable to the company provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and better period-to-period comparability. The above measures are not and should not be considered as alternatives to pretax income, net income or net income per share 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.
Company Description
Founded in 1947 in Maumee, Ohio, The Andersons, Inc. (Nasdaq: ANDE) is a diversified company rooted in agriculture that conducts business in the commodity trading, ethanol, plant nutrient and rail sectors. Guided by its Statement of Principles, The Andersons strives to provide extraordinary service to its customers, help its employees improve, support its communities and increase the value of the company. For more information, please visit www.andersonsinc.com.
Investor Relations Contact
John Kraus
Director, Investor Relations
Phone: 419-891-6544
E-mail: investorrelations@andersonsinc.com
The Andersons, Inc.
Condensed Consolidated Statements of Operations (unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||
| Sales and merchandising revenues | $ | 1,890,180 | $ | 2,325,041 | $ | 3,743,286 | $ | 4,301,833 |
| Cost of sales and merchandising revenues | 1,783,914 | 2,164,313 | 3,573,890 | 4,031,441 | ||||
| Gross profit | 106,266 | 160,728 | 169,396 | 270,392 | ||||
| Operating, administrative and general expenses | 90,136 | 106,918 | 195,196 | 220,267 | ||||
| Asset impairment | — | 3,081 | — | 3,081 | ||||
| Interest expense, net | 11,827 | 15,727 | 27,414 | 31,637 | ||||
| Other income, net: | ||||||||
| Equity in earnings (loss) of affiliates, net | 79 | (157) | 209 | 1,362 | ||||
| Other income, net | 3,450 | 5,563 | 8,263 | 4,049 | ||||
| Income (loss) before income taxes | 7,832 | 40,408 | (44,742) | 20,818 | ||||
| Income tax (benefit) provision | (12,200) | 10,997 | (13,664) | 5,555 | ||||
| Net income (loss) | 20,032 | 29,411 | (31,078) | 15,263 | ||||
| Net loss attributable to the noncontrolling interests | (10,407) | (477) | (23,856) | (632) | ||||
| Net income (loss) attributable to The Andersons, Inc. | $ | 30,439 | $ | 29,888 | $ | (7,222) | $ | 15,895 |
| Per common share: | ||||||||
| Basic earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | 0.92 | $ | 0.92 | $ | (0.22) | $ | 0.49 |
| Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | 0.92 | $ | 0.91 | $ | (0.22) | $ | 0.48 |
The Andersons, Inc.
Reconciliation to Adjusted Net Income (unaudited)
| (in thousands, except per share data) | Three months ended June 30, | Six months ended June 30, | ||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Net income (loss) attributable to The Andersons, Inc. | $ | 30,439 | $ | 29,888 | $ | (7,222) | $ | 15,895 |
| Items adjusted for certain gains and charges: | ||||||||
| Acquisition costs | — | 1,229 | — | 5,872 | ||||
| Transaction related stock compensation | 1,017 | 1,346 | 2,348 | 4,762 | ||||
| Asset impairment | — | 3,081 | — | 3,081 | ||||
| Loss (gain) from remeasurement of equity method investments | — | (2,439) | — | 1,073 | ||||
| Severance costs | 2,341 | — | 2,341 | — | ||||
| Income tax impact of adjustments (a) | (4,541) | (803) | (11,451) | (3,696) | ||||
| Total adjustments | (1,183) | 2,414 | (6,762) | 11,092 | ||||
| Adjusted net income (loss) attributable to The Andersons, Inc. | $ | 29,256 | $ | 32,302 | $ | (13,984) | $ | 26,987 |
| Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | 0.92 | $ | 0.91 | $ | (0.22) | $ | 0.48 |
| Impact on diluted earnings (loss) per share | (0.04) | 0.07 | $ | (0.21) | 0.33 | |||
| Adjusted diluted income (loss) per share | $ | 0.88 | $ | 0.98 | $ | (0.43) | $ | 0.81 |
(a) Income tax adjustments include $(4.5) million and $(11.5) million due to CARES Act benefits and certain discrete items in the current quarter and year to date, respectively, and $(0.8) million and $(3.7) million due to certain discrete items in the prior year quarter and year to date, respectively.
The Andersons, Inc.
Condensed Consolidated Balance Sheets (unaudited)
| (in thousands) | June 30, 2020 | December 31, 2019 | June 30, 2019 | |||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Current assets: | ||||||
| Cash, cash equivalents and restricted cash | $ | 30,011 | $ | 54,895 | $ | 11,087 |
| Accounts receivable, net | 537,011 | 536,367 | 712,294 | |||
| Inventories | 616,323 | 1,170,536 | 753,641 | |||
| Commodity derivative assets - current | 112,089 | 107,863 | 233,015 | |||
| Other current assets | 102,755 | 75,681 | 58,590 | |||
| Total current assets | 1,398,189 | 1,945,342 | 1,768,627 | |||
| Other assets: | ||||||
| Goodwill | 135,709 | 135,360 | 135,872 | |||
| Other intangible assets, net | 160,180 | 175,312 | 188,818 | |||
| Right of use assets, net | 62,838 | 76,401 | 74,073 | |||
| Equity method investments | 25,083 | 23,857 | 120,929 | |||
| Other assets, net | 23,152 | 21,753 | 28,002 | |||
| Total other assets | 406,962 | 432,683 | 547,694 | |||
| Rail Group assets leased to others, net | 592,821 | 584,298 | 559,711 | |||
| Property, plant and equipment, net | 906,017 | 938,418 | 695,827 | |||
| Total assets | $ | 3,303,989 | $ | 3,900,741 | $ | 3,571,859 |
| Liabilities and equity | ||||||
| Current liabilities: | ||||||
| Short-term debt | 96,071 | 147,031 | 426,125 | |||
| Trade and other payables | 503,892 | 873,081 | 527,250 | |||
| Customer prepayments and deferred revenue | 45,734 | 133,585 | 49,761 | |||
| Commodity derivative liabilities – current | 65,186 | 46,942 | 69,369 | |||
| Current maturities of long-term debt | 68,477 | 62,899 | 66,678 | |||
| Accrued expenses and other current liabilities | 147,422 | 176,381 | 165,383 | |||
| Total current liabilities | 926,782 | 1,439,919 | 1,304,566 | |||
| Long-term lease liabilities | 41,061 | 51,091 | 48,401 | |||
| Long-term debt, less current maturities | 975,973 | 1,016,248 | 1,007,012 | |||
| Deferred income taxes | 162,475 | 146,155 | 146,839 | |||
| Other long-term liabilities | 65,615 | 51,673 | 44,402 | |||
| Total liabilities | 2,171,906 | 2,705,086 | 2,551,220 | |||
| Total equity | 1,132,083 | 1,195,655 | 1,020,639 | |||
| Total liabilities and equity | $ | 3,303,989 | $ | 3,900,741 | $ | 3,571,859 |
The Andersons, Inc.
Segment Data (unaudited)
| (in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended June 30, 2020 | ||||||||||||
| Revenues from external customers | $ | 1,351,168 | $ | 223,745 | $ | 279,825 | $ | 35,442 | $ | — | $ | 1,890,180 |
| Gross profit | 59,382 | (2,599) | 38,765 | 10,718 | — | 106,266 | ||||||
| Equity in earnings (losses) of affiliates | 79 | — | — | — | — | 79 | ||||||
| Other income (loss), net | 986 | 466 | 386 | 905 | 707 | 3,450 | ||||||
| Income (loss) before income taxes | 393 | (9,539) | 19,407 | 2,606 | (5,035) | 7,832 | ||||||
| Loss attributable to the noncontrolling interests | — | (10,407) | — | — | — | (10,407) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 393 | $ | 868 | $ | 19,407 | $ | 2,606 | $ | (5,035) | $ | 18,239 |
| Adjustments to income (loss) before income taxes (b) | 1,017 | — | — | — | 2,341 | 3,358 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 1,410 | $ | 868 | $ | 19,407 | $ | 2,606 | $ | (2,694) | $ | 21,597 |
| Three months ended June 30, 2019 | ||||||||||||
| Revenues from external customers | $ | 1,700,581 | $ | 310,867 | $ | 270,577 | $ | 43,016 | $ | — | $ | 2,325,041 |
| Gross profit | 100,666 | 6,492 | 38,798 | 14,772 | — | 160,728 | ||||||
| Equity in earnings (losses) of affiliates | (1,614) | 1,457 | — | — | — | (157) | ||||||
| Other income (loss), net | 3,817 | 195 | 570 | 329 | 652 | 5,563 | ||||||
| Income (loss) before income taxes | 22,631 | 3,272 | 15,903 | 3,180 | (4,578) | 40,408 | ||||||
| Loss attributable to the noncontrolling interests | — | (477) | — | — | — | (477) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 22,631 | $ | 3,749 | $ | 15,903 | $ | 3,180 | $ | (4,578) | $ | 40,885 |
| Adjustments to income (loss) before income taxes (b) | 3,217 | — | — | — | — | 3,217 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 25,848 | $ | 3,749 | $ | 15,903 | $ | 3,180 | $ | (4,578) | $ | 44,102 |
(a) 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.
(b) 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 | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Six months ended June 30, 2020 | ||||||||||||
| Revenues from external customers | $ | 2,729,209 | $ | 536,784 | $ | 404,738 | $ | 72,555 | $ | — | $ | 3,743,286 |
| Gross profit | 121,848 | (31,998) | 59,129 | 20,417 | — | 169,396 | ||||||
| Equity in earnings (losses) of affiliates | 209 | — | — | — | — | 209 | ||||||
| Other income (loss), net | 3,750 | 912 | 356 | 1,955 | 1,290 | 8,263 | ||||||
| Income (loss) before income taxes | (9,591) | (46,964) | 18,215 | 3,613 | (10,015) | (44,742) | ||||||
| Loss attributable to the noncontrolling interests | — | (23,856) | — | — | — | (23,856) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (9,591) | $ | (23,108) | $ | 18,215 | $ | 3,613 | $ | (10,015) | $ | (20,886) |
| Adjustments to income (loss) before income taxes (b) | 2,348 | — | — | — | 2,341 | 4,689 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (7,243) | $ | (23,108) | $ | 18,215 | $ | 3,613 | $ | (7,674) | $ | (16,197) |
| Six months ended June 30, 2019 | ||||||||||||
| Revenues from external customers | $ | 3,238,267 | $ | 580,033 | $ | 399,102 | $ | 84,431 | $ | — | $ | 4,301,833 |
| Gross profit | 168,063 | 11,892 | 59,732 | 30,705 | — | 270,392 | ||||||
| Equity in earnings (losses) of affiliates | (1,745) | 3,107 | — | — | — | 1,362 | ||||||
| Other income (loss), net | 827 | 279 | 1,137 | 538 | 1,268 | 4,049 | ||||||
| Income (loss) before income taxes | 4,729 | 6,128 | 11,974 | 7,492 | (9,505) | 20,818 | ||||||
| Loss attributable to the noncontrolling interests | — | (632) | — | — | — | (632) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 4,729 | $ | 6,760 | $ | 11,974 | $ | 7,492 | $ | (9,505) | $ | 21,450 |
| Adjustments to income (loss) before income taxes (b) | 14,788 | — | — | — | — | 14,788 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 19,517 | $ | 6,760 | $ | 11,974 | $ | 7,492 | $ | (9,505) | $ | 36,238 |
| (a) 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.<br>(b) 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. |
The Andersons, Inc.
Reconciliation to EBITDA and Adjusted EBITDA
(unaudited)
| (in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended June 30, 2020 | ||||||||||||
| Net income (loss) | $ | 393 | $ | (9,539) | $ | 19,407 | $ | 2,606 | $ | 7,165 | $ | 20,032 |
| Interest expense | 5,056 | 1,900 | 1,463 | 3,833 | (425) | 11,827 | ||||||
| Tax provision (benefit) | — | — | — | — | (12,200) | (12,200) | ||||||
| Depreciation and amortization | 11,055 | 17,952 | 6,364 | 8,869 | 2,757 | 46,997 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 16,504 | 10,313 | 27,234 | 15,308 | (2,703) | 66,656 | ||||||
| EBITDA attributable to non-controlling interests | — | (645) | — | — | — | (645) | ||||||
| EBITDA attributable to The Andersons, Inc. | 16,504 | 10,958 | 27,234 | 15,308 | (2,703) | 67,301 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Transaction related stock compensation | 1,017 | — | — | — | — | 1,017 | ||||||
| Severance Costs | — | — | — | — | 2,341 | 2,341 | ||||||
| Total adjusting items | 1,017 | — | — | — | 2,341 | 3,358 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 17,521 | $ | 10,958 | $ | 27,234 | $ | 15,308 | $ | (362) | $ | 70,659 |
| Three months ended June 30, 2019 | ||||||||||||
| Net income (loss) | $ | 22,631 | $ | 3,272 | $ | 15,903 | $ | 3,180 | $ | (15,575) | $ | 29,411 |
| Interest expense | 10,148 | (811) | 2,386 | 4,181 | (177) | 15,727 | ||||||
| Tax provision (benefit) | — | — | — | — | 10,997 | 10,997 | ||||||
| Depreciation and amortization | 10,836 | 1,587 | 6,631 | 8,389 | 2,850 | 30,293 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 43,615 | 4,048 | 24,920 | 15,750 | (1,905) | 86,428 | ||||||
| EBITDA attributable to non-controlling interests | — | (439) | — | — | — | (439) | ||||||
| EBITDA attributable to The Andersons, Inc. | 43,615 | 4,487 | 24,920 | 15,750 | (1,905) | 86,867 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Acquisition costs | 1,229 | — | — | — | — | 1,229 | ||||||
| Transaction related stock compensation | 1,346 | — | — | — | — | 1,346 | ||||||
| Asset impairment | 3,081 | — | — | — | — | 3,081 | ||||||
| Loss from remeasurement of equity method investment | (2,439) | — | — | — | — | (2,439) | ||||||
| Total adjusting items | 3,217 | — | — | — | — | 3,217 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 46,832 | $ | 4,487 | $ | 24,920 | $ | 15,750 | $ | (1,905) | $ | 90,084 |
| (in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six months ended June 30, 2020 | ||||||||||||
| Net income (loss) | $ | (9,591) | $ | (46,964) | $ | 18,215 | $ | 3,613 | $ | 3,649 | $ | (31,078) |
| Interest expense | 12,245 | 4,257 | 3,248 | 8,316 | (652) | 27,414 | ||||||
| Tax provision (benefit) | — | — | — | — | (13,664) | (13,664) | ||||||
| Depreciation and amortization | 22,399 | 35,504 | 12,705 | 17,788 | 5,502 | 93,898 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 25,053 | (7,203) | 34,168 | 29,717 | (5,165) | 76,570 | ||||||
| EBITDA attributable to non-controlling interests | — | (4,120) | — | — | — | (4,120) | ||||||
| EBITDA attributable to The Andersons, Inc. | 25,053 | (3,083) | 34,168 | 29,717 | (5,165) | 80,690 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Transaction related stock compensation | 2,348 | — | — | — | — | 2,348 | ||||||
| Severance Costs | — | — | — | — | 2,341 | 2,341 | ||||||
| Total adjusting items | 2,348 | — | — | — | 2,341 | 4,689 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 27,401 | $ | (3,083) | $ | 34,168 | $ | 29,717 | $ | (2,824) | $ | 85,379 |
| Six months ended June 30, 2019 | ||||||||||||
| Net income (loss) | $ | 4,729 | $ | 6,128 | $ | 11,974 | $ | 7,492 | $ | (15,060) | $ | 15,263 |
| Interest expense | 20,951 | (1,523) | 4,647 | 7,860 | (298) | 31,637 | ||||||
| Tax provision (benefit) | — | — | — | — | 5,555 | 5,555 | ||||||
| Depreciation and amortization | 25,035 | 3,377 | 13,293 | 16,664 | 5,777 | 64,146 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 50,715 | 7,982 | 29,914 | 32,016 | (4,026) | 116,601 | ||||||
| EBITDA attributable to non-controlling interests | — | (590) | — | — | — | (590) | ||||||
| EBITDA attributable to The Andersons, Inc. | 50,715 | 8,572 | 29,914 | 32,016 | (4,026) | 117,191 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Acquisition costs | 5,872 | — | — | — | — | 5,872 | ||||||
| Transaction related stock compensation | 4,762 | — | — | — | — | 4,762 | ||||||
| Asset impairment | 3,081 | — | — | — | — | 3,081 | ||||||
| Loss from remeasurement of equity method investment | 1,073 | — | — | — | — | 1,073 | ||||||
| Total adjusting items | 14,788 | — | — | — | — | 14,788 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 65,503 | $ | 8,572 | $ | 29,914 | $ | 32,016 | $ | (4,026) | $ | 131,979 |