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): | November 3, 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 third 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 | Third 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. | ||
|---|---|---|
| November 3, 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 Third Quarter Results
MAUMEE, OHIO, November 3, 2020 - The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the third quarter ended September 30, 2020.
Third Quarter Highlights:
•Company reported a net loss attributable to The Andersons of $1.1 million, or $0.03 per diluted share, and adjusted net loss of $2.4 million, or $0.07 per diluted share.
•Adjusted EBITDA attributable to the company was $46.2 million for the quarter, up 21 percent year over year.
•Trade reported pretax income of $5.9 million and adjusted pretax income of $6.9 million on improved merchandising results.
•Ethanol reported pretax income attributable to the company of $1.1 million as margins improved
"We continued to make good progress during the quarter toward reaching our vision to be the most nimble and innovative ag supply chain company in North America,” said President and CEO Pat Bowe. "The integration of Trade and Ethanol is going well and is being modeled after the successful integration of Lansing Trade Group last year. While we will always be vigilant about costs, we are looking forward to placing more emphasis on profitable growth and extraordinary customer service in 2021 and beyond."
"Our results for the third quarter were solid in light of the current economic environment," continued Bowe. "Trade, Ethanol and Plant Nutrient all recorded improved results year over year. Trade led the way with better merchandising income as the fall harvest got off to a good start. Ethanol's results were much improved, notwithstanding large non-cash mark-to-market charges. Plant Nutrient's results improved substantially year over year in a quarter in which that business is usually seasonally weak. Finally, Rail continued to feel the negative impacts of weak railcar demand."
| in millions, except per share amounts | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Q3 2019 | Variance | YTD 2020 | YTD 2019 | Variance | |||||||
| Pretax Income (Loss) Attributable to the Company1 | (5.8) | $ | (11.4) | $ | 5.6 | $ | (26.7) | $ | 10.0 | $ | (36.7) |
| Adjusted Pretax Income (Loss) Attributable to the Company1 | (8.9) | 7.3 | (17.8) | 27.3 | (45.1) | ||||||
| Trade | 0.4 | 6.5 | (0.4) | 20.0 | (20.4) | ||||||
| Ethanol1 | 1.1 | — | (22.0) | 7.8 | (29.8) | ||||||
| Plant Nutrient | (7.4) | 2.0 | 12.8 | 4.5 | 8.3 | ||||||
| Rail | 3.1 | (3.2) | 3.5 | 10.6 | (7.1) | ||||||
| Other | (6.1) | 2.0 | (11.8) | (15.6) | 3.8 | ||||||
| Net Income (Loss) Attributable to the Company1 | (4.2) | 3.1 | (8.3) | 11.7 | (20.0) | ||||||
| Adjusted Net Income (Loss) Attributable to the Company1 | (2.3) | (0.1) | (16.4) | 24.7 | (41.1) | ||||||
| Diluted EPS | (0.13) | 0.10 | (0.25) | 0.35 | (0.60) | ||||||
| Adjusted Diluted EPS | (0.07) | — | (0.50) | 0.74 | (1.24) | ||||||
| EBITDA | 35.1 | 20.2 | 131.9 | 151.7 | (19.8) | ||||||
| Adjusted EBITDA Attributable to the Company | 46.2 | $ | 38.2 | $ | 8.0 | $ | 131.6 | $ | 170.2 | $ | (38.6) |
All values are in US Dollars.
1 Reflects amounts attributable to the company and excludes income attributable to the noncontrolling interests of $3.3 in Q3 2020 and losses attributable to the noncontrolling interests of $1.6 in Q3 2019, $20.6 for year-to-date 2020 and $2.3 for year-to-date 2019. See non-GAAP reconciliations in the accompanying tables.
Liquidity and Cash Management
“We continued to generate strong operating cash flows and manage capital expenditures during the third quarter,” said Executive Vice President and CFO Brian Valentine. “We were able to reduce total long-term debt by more than $60 million. We remain very focused on overall liquidity, including expense and cash management."
In addition to the $30 million in 2020 expense reductions announced in May, about half of which it expects to be permanent, the company also anticipates that the business restructuring announced in August will result in further annual general and administrative cost reductions of approximately $10 million beginning in early 2021.
The company has spent $69 million net of proceeds from asset sales on capital projects through September and still expects to spend approximately $100 million in 2020 after averaging more than $200 million over the last three years. This reduction prudently preserves working capital and supports the company's continued strong financial position.
Third Quarter Segment Overview
Trade Records Higher Results Driven by Improved Merchandising Income
The Trade segment recorded improved pretax income of $5.9 million and adjusted pretax income of $6.9 million for the quarter compared to a pretax loss of $2.1 million and adjusted pretax income of $0.4 million in the third quarter of 2019. The difference in reported and adjusted income in both periods was attributable to stock compensation expense associated with the 2019 acquisition of Lansing Trade Group.
A large majority of the year-over-year improvement came from commodity merchandising, which earned pretax income that was more than 80 percent higher year over year. The performance of the segment's assets improved due to strong corn and soybean sales despite earning less income from wheat. The business also continued to benefit from the successful integration of Lansing and Thompsons Limited, portfolio optimization and other cost-cutting efforts.
Trade’s third quarter adjusted EBITDA was $22.3 million, up approximately 8 percent over third quarter 2019 adjusted EBITDA of $20.7 million.
While merchandising opportunities continue to be good, the resulting income will not likely fully offset the lack of carry in the corn and soybean markets into 2021 due to the significant increase in futures prices and narrowing spreads since early August.
Ethanol Remains Profitable on Improved Margins Despite Mark-to-Market Charge
The Ethanol segment reported pretax income attributable to the company of $1.1 million in the third quarter compared to the similar amount it earned in the same period in 2019.
Improved crush margins were the primary driver of significantly improved performance by the group's five plants. However, the segment recorded a non-cash mark-to-market charge of $6.2 million due to increases in corn and DDG prices late in the quarter.
Production volumes in the quarter were higher year over year due to higher yields at the The Andersons Marathon Holdings (TAMH) plants and ELEMENTTM operating for the entire quarter. Board crush margins were roughly 12 cents higher than in the third quarter of 2019. The third-party ethanol trading business also posted comparatively better results due to improved margins and higher volumes.
Ethanol recorded EBITDA attributable to the company of $11.1 million in the third quarter of 2020, up from 2019 third quarter EBITDA attributable to the company of $3.9 million. The results of three of the five ethanol plants were not consolidated in 2019.
Plant Nutrient Results Improve; Rail Breaks Even
The Plant Nutrient segment improved its results year over year, recording a pretax loss of $5.4 million in the third quarter compared to a pretax loss of $7.4 million in the same period of the prior year. This was the sixth consecutive quarter that the segment posted improved year-over-year results. Plant Nutrient’s current quarter EBITDA was $2.2 million compared to 2019 third quarter EBITDA of $0.9 million. While tons sold were unchanged, the improvement was driven by slightly better margin per ton and continued disciplined working capital and expense management.
Rail recorded a third quarter pretax loss of $0.1 million compared to $3.1 million of pretax income in the same period of the prior year. Its third quarter 2020 EBITDA was $12.5 million compared to its third quarter 2019 EBITDA of $16.1 million. The leasing business accounted for the majority of the shortfall due to lower lease rates and fleet utilization year over year; repair revenues and margins also fell.
Provision for Income Taxes Includes CARES Act Benefits
The company’s income tax provision included additional CARES Act tax benefits of approximately $4.5 million, or $0.14 per diluted share in the current quarter and now totals benefits of approximately $14.8 million, or $0.45 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 half 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 $8 million, bringing the total expected CARES Act refunds to approximately $39 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, November 4, 2020, at 11 a.m. Eastern Standard Time, to discuss its performance and provide its updated outlook for 2020 and its preliminary views for 2021. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 6386433). It is recommended that you call 10 minutes before the conference call begins.
To access the webcast, click on the link: https://edge.media-server.com/mmc/p/yn8hngoo. 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
The company will hold its investor day on the morning of Tuesday, December 8, 2020 and present it in a virtual format.
Sustainability Review
The company has recently published a 2020 sustainability review. It can also be accessed under the heading "Investors" on the company’s website at www.andersonsinc.com.
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 September 30, | Nine months ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||
| Sales and merchandising revenues | $ | 1,922,233 | $ | 1,982,755 | $ | 5,665,519 | $ | 6,284,588 |
| Cost of sales and merchandising revenues | 1,820,398 | 1,873,614 | 5,394,288 | 5,905,055 | ||||
| Gross profit | 101,835 | 109,141 | 271,231 | 379,533 | ||||
| Operating, administrative and general expenses | 98,219 | 107,118 | 293,415 | 327,385 | ||||
| Asset impairment | — | — | — | 3,081 | ||||
| Interest expense, net | 10,569 | 13,975 | 37,983 | 45,613 | ||||
| Other income, net: | ||||||||
| Equity in earnings (loss) of affiliates, net | 20 | (3,728) | 228 | (2,367) | ||||
| Other income, net | 4,434 | 2,598 | 12,697 | 6,649 | ||||
| Income (loss) before income taxes | (2,499) | (13,082) | (47,242) | 7,736 | ||||
| Income tax benefit | (4,714) | (7,212) | (18,378) | (1,657) | ||||
| Net income (loss) | 2,215 | (5,870) | (28,864) | 9,393 | ||||
| Net income (loss) attributable to the noncontrolling interests | 3,273 | (1,633) | (20,583) | (2,265) | ||||
| Net income (loss) attributable to The Andersons, Inc. | $ | (1,058) | $ | (4,237) | $ | (8,281) | $ | 11,658 |
| Per common share: | ||||||||
| Basic earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | (0.03) | $ | (0.13) | $ | (0.25) | $ | 0.36 |
| Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | (0.03) | $ | (0.13) | $ | (0.25) | $ | 0.35 |
The Andersons, Inc.
Reconciliation to Adjusted Net Income (unaudited)
| Three months ended September 30, | Nine months ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||
| Net income (loss) attributable to The Andersons, Inc. | $ | (1,058) | $ | (4,237) | $ | (8,281) | $ | 11,658 |
| Items impacting other income, net of tax: | ||||||||
| One time acquisition costs | — | (23) | — | 5,849 | ||||
| Transaction related stock compensation | 912 | 2,577 | 3,260 | 7,339 | ||||
| Asset impairment | — | — | — | 3,081 | ||||
| Loss from remeasurement of equity method investments | — | — | — | 1,073 | ||||
| Severance costs | 3,222 | — | 5,563 | — | ||||
| Income tax impact of adjustments (a) | (5,511) | (638) | (16,962) | (4,335) | ||||
| Total adjusting items, net of tax | (1,377) | 1,916 | (8,139) | 13,007 | ||||
| Adjusted net income (loss) attributable to The Andersons, Inc. | $ | (2,435) | $ | (2,321) | $ | (16,420) | $ | 24,665 |
| Diluted earnings (loss) attributable to The Andersons, Inc. common shareholders | $ | (0.03) | $ | (0.13) | $ | (0.25) | $ | 0.35 |
| Impact on diluted earnings (loss) per share | $ | (0.04) | $ | 0.06 | $ | (0.25) | $ | 0.39 |
| Adjusted diluted earnings (loss) per share | $ | (0.07) | $ | (0.07) | $ | (0.50) | $ | 0.74 |
(a) Income tax adjustments include $(4.5) million and $(14.8) million due to CARES Act benefits and certain discrete items in the current quarter and year to date.
The Andersons, Inc.
Condensed Consolidated Balance Sheets (unaudited)
| (in thousands) | September 30, 2020 | December 31, 2019 | September 30, 2019 | |||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Current assets: | ||||||
| Cash, cash equivalents and restricted cash | $ | 13,693 | $ | 54,895 | $ | 21,299 |
| Accounts receivable, net | 529,584 | 536,367 | 523,110 | |||
| Inventories | 754,604 | 1,170,536 | 741,086 | |||
| Commodity derivative assets - current | 140,066 | 107,863 | 120,510 | |||
| Other current assets | 102,302 | 75,681 | 82,770 | |||
| Total current assets | 1,540,249 | 1,945,342 | 1,488,775 | |||
| Other assets: | ||||||
| Goodwill | 135,709 | 135,360 | 135,872 | |||
| Other intangible assets, net | 152,214 | 175,312 | 181,100 | |||
| Right of use assets, net | 58,108 | 76,401 | 70,773 | |||
| Equity method investments | 25,368 | 23,857 | 117,348 | |||
| Other assets, net | 23,601 | 21,753 | 21,442 | |||
| Total other assets | 395,000 | 432,683 | 526,535 | |||
| Rail Group assets leased to others, net | 587,851 | 584,298 | 565,746 | |||
| Property, plant and equipment, net | 888,511 | 938,418 | 703,396 | |||
| Total assets | $ | 3,411,611 | $ | 3,900,741 | $ | 3,284,452 |
| Liabilities and equity | ||||||
| Current liabilities: | ||||||
| Short-term debt | 100,405 | 147,031 | 138,249 | |||
| Trade and other payables | 641,812 | 873,081 | 594,708 | |||
| Customer prepayments and deferred revenue | 49,573 | 133,585 | 35,274 | |||
| Commodity derivative liabilities – current | 79,159 | 46,942 | 67,606 | |||
| Current maturities of long-term debt | 67,786 | 62,899 | 66,899 | |||
| Accrued expenses and other current liabilities | 157,801 | 176,381 | 162,749 | |||
| Total current liabilities | 1,096,536 | 1,439,919 | 1,065,485 | |||
| Long-term lease liabilities | 38,232 | 51,091 | 47,299 | |||
| Long-term debt, less current maturities | 916,087 | 1,016,248 | 968,117 | |||
| Deferred income taxes | 163,454 | 146,155 | 128,003 | |||
| Other long-term liabilities | 60,075 | 51,673 | 64,198 | |||
| Total liabilities | 2,274,384 | 2,705,086 | 2,273,102 | |||
| Total equity | 1,137,227 | 1,195,655 | 1,011,350 | |||
| Total liabilities and equity | $ | 3,411,611 | $ | 3,900,741 | $ | 3,284,452 |
The Andersons, Inc.
Segment Data (unaudited)
| (in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended September 30, 2020 | ||||||||||||
| Sales and merchandising revenues | $ | 1,432,922 | $ | 349,957 | $ | 102,707 | $ | 36,647 | $ | — | $ | 1,922,233 |
| Gross profit | 65,572 | 11,169 | 16,496 | 8,598 | — | 101,835 | ||||||
| Equity in earnings (losses) of affiliates, net | 20 | — | — | — | — | 20 | ||||||
| Other income (loss), net | 3,114 | 553 | 579 | 588 | (400) | 4,434 | ||||||
| Income (loss) before income taxes | 5,941 | 4,421 | (5,387) | (139) | (7,335) | (2,499) | ||||||
| Income attributable to the noncontrolling interests | — | 3,273 | — | — | — | 3,273 | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 5,941 | $ | 1,148 | $ | (5,387) | $ | (139) | $ | (7,335) | $ | (5,772) |
| Adjustments to income (loss) before income taxes (b) | 912 | — | — | — | 3,222 | 4,134 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 6,853 | $ | 1,148 | $ | (5,387) | $ | (139) | $ | (4,113) | $ | (1,638) |
| Three months ended September 30, 2019 | ||||||||||||
| Sales and merchandising revenues | $ | 1,515,107 | $ | 319,105 | $ | 109,446 | $ | 39,097 | $ | — | $ | 1,982,755 |
| Gross profit | 73,379 | 8,083 | 15,851 | 11,828 | — | 109,141 | ||||||
| Equity in earnings (losses) of affiliates, net | (98) | (3,630) | — | — | — | (3,728) | ||||||
| Other income (loss), net | 876 | 417 | 510 | 854 | (59) | 2,598 | ||||||
| Income (loss) before income taxes | (2,122) | (563) | (7,440) | 3,137 | (6,094) | (13,082) | ||||||
| Loss attributable to the noncontrolling interests | — | (1,633) | — | — | — | (1,633) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (2,122) | $ | 1,070 | $ | (7,440) | $ | 3,137 | $ | (6,094) | $ | (11,449) |
| Adjustments to income (loss) before income taxes (b) | 2,554 | — | — | — | — | 2,554 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 432 | $ | 1,070 | $ | (7,440) | $ | 3,137 | $ | (6,094) | $ | (8,895) |
(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 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine months ended September 30, 2020 | ||||||||||||
| Sales and merchandising revenues | $ | 4,162,130 | $ | 886,742 | $ | 507,445 | $ | 109,202 | $ | — | $ | 5,665,519 |
| Gross profit | 187,420 | (20,829) | 75,625 | 29,015 | — | 271,231 | ||||||
| Equity in earnings (losses) of affiliates, net | 228 | — | — | — | — | 228 | ||||||
| Other income (loss), net | 6,865 | 1,465 | 935 | 2,543 | 889 | 12,697 | ||||||
| Income (loss) before income taxes | (3,650) | (42,543) | 12,828 | 3,474 | (17,351) | (47,242) | ||||||
| Loss attributable to the noncontrolling interests | — | (20,583) | — | — | — | (20,583) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (3,650) | $ | (21,960) | $ | 12,828 | $ | 3,474 | $ | (17,351) | $ | (26,659) |
| Adjustments to income (loss) before income taxes (b) | 3,260 | — | — | — | 5,563 | 8,823 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | (390) | $ | (21,960) | $ | 12,828 | $ | 3,474 | $ | (11,788) | $ | (17,836) |
| Nine months ended September 30, 2019 | ||||||||||||
| Sales and merchandising revenues | $ | 4,753,375 | $ | 899,137 | $ | 508,548 | $ | 123,528 | $ | — | $ | 6,284,588 |
| Gross profit | 241,444 | 19,973 | 75,583 | 42,533 | — | 379,533 | ||||||
| Equity in earnings (losses) of affiliates, net | (1,843) | (524) | — | — | — | (2,367) | ||||||
| Other income (loss), net | 1,705 | 696 | 1,647 | 1,392 | 1,209 | 6,649 | ||||||
| Income (loss) before income taxes | 2,610 | 5,562 | 4,534 | 10,629 | (15,599) | 7,736 | ||||||
| Loss attributable to the noncontrolling interests | — | (2,265) | — | — | — | (2,265) | ||||||
| Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 2,610 | $ | 7,827 | $ | 4,534 | $ | 10,629 | $ | (15,599) | $ | 10,001 |
| Adjustments to income (loss) before income taxes (b) | 17,342 | — | — | — | — | 17,342 | ||||||
| Adjusted income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 19,952 | $ | 7,827 | $ | 4,534 | $ | 10,629 | $ | (15,599) | $ | 27,343 |
| (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 September 30, 2020 | ||||||||||||
| Net income (loss) | $ | 5,941 | $ | 4,421 | $ | (5,387) | $ | (139) | $ | (2,621) | $ | 2,215 |
| Interest expense (income) | 4,380 | 1,651 | 1,287 | 3,716 | (465) | 10,569 | ||||||
| Tax provision (benefit) | — | — | — | — | (4,714) | (4,714) | ||||||
| Depreciation and amortization | 11,079 | 18,282 | 6,316 | 8,882 | 2,710 | 47,269 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 21,400 | 24,354 | 2,216 | 12,459 | (5,090) | 55,339 | ||||||
| EBITDA attributable to non-controlling interests | — | 13,250 | — | — | — | 13,250 | ||||||
| EBITDA attributable to The Andersons, Inc. | 21,400 | 11,104 | 2,216 | 12,459 | (5,090) | 42,089 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Transaction related stock compensation | 912 | — | — | — | — | 912 | ||||||
| Severance Costs | — | — | — | — | 3,222 | 3,222 | ||||||
| Total adjusting items | 912 | — | — | — | 3,222 | 4,134 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 22,312 | $ | 11,104 | $ | 2,216 | $ | 12,459 | $ | (1,868) | $ | 46,223 |
| Three months ended September 30, 2019 | ||||||||||||
| Net income (loss) | $ | (2,122) | $ | (563) | $ | (7,440) | $ | 3,137 | $ | 1,118 | $ | (5,870) |
| Interest expense (income) | 7,788 | 291 | 1,831 | 4,211 | (146) | 13,975 | ||||||
| Tax provision (benefit) | — | — | — | — | (7,212) | (7,212) | ||||||
| Depreciation and amortization | 12,487 | 3,716 | 6,485 | 8,713 | 2,849 | 34,250 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 18,153 | 3,444 | 876 | 16,061 | (3,391) | 35,143 | ||||||
| EBITDA attributable to non-controlling interests | — | (483) | — | — | — | (483) | ||||||
| EBITDA attributable to The Andersons, Inc. | 18,153 | 3,927 | 876 | 16,061 | (3,391) | 35,626 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Acquisition costs | (23) | — | — | — | — | (23) | ||||||
| Transaction related stock compensation | 2,577 | — | — | — | — | 2,577 | ||||||
| Total adjusting items | 2,554 | — | — | — | — | 2,554 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 20,707 | $ | 3,927 | $ | 876 | $ | 16,061 | $ | (3,391) | $ | 38,180 |
| (in thousands) | Trade | Ethanol | Plant Nutrient | Rail | Other | Total | ||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Nine months ended September 30, 2020 | ||||||||||||
| Net income (loss) | $ | (3,650) | $ | (42,543) | $ | 12,828 | $ | 3,474 | $ | 1,027 | $ | (28,864) |
| Interest expense (income) | 16,624 | 5,908 | 4,535 | 12,032 | (1,116) | 37,983 | ||||||
| Tax provision (benefit) | — | — | — | — | (18,378) | (18,378) | ||||||
| Depreciation and amortization | 33,478 | 53,786 | 19,021 | 26,670 | 8,212 | 141,167 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 46,452 | 17,151 | 36,384 | 42,176 | (10,255) | 131,908 | ||||||
| EBITDA attributable to non-controlling interests | — | 9,130 | — | — | — | 9,130 | ||||||
| EBITDA attributable to The Andersons, Inc. | 46,452 | 8,021 | 36,384 | 42,176 | (10,255) | 122,778 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Transaction related stock compensation | 3,260 | — | — | — | — | 3,260 | ||||||
| Severance Costs | — | — | — | — | 5,563 | 5,563 | ||||||
| Total adjusting items | 3,260 | — | — | — | 5,563 | 8,823 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 49,712 | $ | 8,021 | $ | 36,384 | $ | 42,176 | $ | (4,692) | $ | 131,601 |
| Nine months ended September 30, 2019 | ||||||||||||
| Net income (loss) | $ | 2,610 | $ | 5,562 | $ | 4,534 | $ | 10,629 | $ | (13,942) | $ | 9,393 |
| Interest expense (income) | 28,740 | (1,232) | 6,478 | 12,071 | (444) | 45,613 | ||||||
| Tax provision (benefit) | — | — | — | — | (1,657) | (1,657) | ||||||
| Depreciation and amortization | 37,523 | 7,094 | 19,778 | 25,377 | 8,624 | 98,396 | ||||||
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 68,873 | 11,424 | 30,790 | 48,077 | (7,419) | 151,745 | ||||||
| EBITDA attributable to non-controlling interests | — | (1,073) | — | — | — | (1,073) | ||||||
| EBITDA attributable to The Andersons, Inc. | 68,873 | 12,497 | 30,790 | 48,077 | (7,419) | 152,818 | ||||||
| Adjusting items impacting EBITDA: | ||||||||||||
| Acquisition costs | 5,849 | — | — | — | — | 5,849 | ||||||
| Transaction related stock compensation | 7,339 | — | — | — | — | 7,339 | ||||||
| Asset impairment | 3,081 | — | — | — | — | 3,081 | ||||||
| Loss from remeasurement of equity method investment | 1,073 | — | — | — | — | 1,073 | ||||||
| Total adjusting items | 17,342 | — | — | — | — | 17,342 | ||||||
| Adjusted EBITDA attributable to The Andersons, Inc. | $ | 86,215 | $ | 12,497 | $ | 30,790 | $ | 48,077 | $ | (7,419) | $ | 170,160 |