MAUMEE, Ohio, May 6, 2019 /CNW/ -- The Andersons, Inc.
(NASDAQ: ANDE) announces financial results for the first
quarter ended March 31, 2019.
First Quarter Highlights:
- Company reports a net loss of $14.0
million or $0.43 per diluted
share and an adjusted net loss of $5.3
million, or $0.16 per diluted
share. Adjustments include $8.7
million, or $0.27 per diluted
share, of expenses related to the Lansing Trade Group acquisition,
which closed in early January. Integration is progressing
well.
- Adjusted EBITDA increases by 45 percent to $40.2 million.
- Trade Group reports pretax loss of $17.5 million and adjusted pretax loss of
$5.9 million in a continuing
difficult grain margin environment.
- Ethanol Group remains profitable in a weak margin
environment, recording $2.6 million
of pretax income on continued improved plant efficiency.
- Plant Nutrient Group records pretax loss of $3.9 million on delayed primary and specialty
nutrient sales and lower lawn and contract manufacturing
results.
- Rail Group earns $4.3 million
of pretax income on better railcar leasing and repair
income.
"We closed our acquisition of Lansing Trade Group successfully
in early January, and our work to integrate it with our former
Grain Group is on schedule," said President and CEO Pat Bowe. "I am very pleased with how well the
new Trade Group team is functioning. However, our overall results
were hampered by markets that continue to be negatively impacted by
trade disruptions and poor weather that are affecting multiple
business units significantly."
$ in millions,
except per share amounts
|
|
Q1
2019
|
Q1
2018
|
Variance
|
Pretax Income
(Loss) Attributable to the Company1
|
($19.4)
|
($2.0)
|
($17.4)
|
Adjusted Pretax
Income (Loss)
|
($7.9)
|
($2.0)
|
($5.9)
|
Trade (Grain)
Group
|
($5.9)
|
($1.2)
|
($4.7)
|
Ethanol
Group
|
$2.6
|
$3.1
|
($0.5)
|
Plant Nutrient
Group
|
($3.9)
|
$1.1
|
($5.0)
|
Rail Group
|
$4.3
|
$4.0
|
$0.3
|
Other
|
($4.9)
|
($8.9)
|
$4.0
|
Net Income
(Loss)
|
($14.0)
|
($1.7)
|
($12.3)
|
Adjusted Net
Income (Loss)
|
($5.3)
|
($1.7)
|
($3.6)
|
EPS
|
($0.43)
|
($0.06)
|
($0.37)
|
Adjusted
EPS
|
($0.16)
|
($0.06)
|
($0.10)
|
EBITDA
|
$28.7
|
$27.7
|
$1.0
|
Adjusted
EBITDA
|
$40.2
|
$27.7
|
$12.5
|
|
1 Excludes net income (loss)
attributable to the noncontrolling interests of ($0.2) in Q1 2019
and ($0.3) in Q1 2018.
|
"The Trade Group's adjusted results were mixed, as weak markets
and foreign trade uncertainty limited grain margin opportunities,
and the group also incurred some insured property losses at one
Nebraska facility due to heavy
rains," Bowe continued. "The Ethanol Group's results were
encouraging, as the group remained profitable by continuing
its excellent plant efficiency and hedging its production well. The
Plant Nutrient Group continues to struggle, as its results were
hurt by lower volume, primarily in agriculture and lawn
fertilizer, and higher operating expenses. Rail's results improved
on better leasing and repair results, even while it reduced
car sale income by electing to sell fewer cars."
Adjustments Related to the Lansing Acquisition
The company made significant purchase price accounting
adjustments and incurred other expenses during the period due to
the Lansing acquisition. The company adjusted the Trade Group's
results for several one-time, largely noncash expenses totaling
$8.2 million, or $0.19 per diluted share, and for noncash stock
compensation expenses totaling $3.4
million, or $0.08 per diluted
share, that were associated with the acquisition.
While not included in the adjustments above, the group also
incurred an incremental $4.4 million,
or $0.10 per diluted share, of
depreciation and amortization expenses due to the revaluation of
Lansing and Thompsons Limited fixed assets and the valuation of its
definite-lived intangibles. The group expects to incur similar
amounts each quarter through 2021.
In addition, the company has recast first quarter 2018 pretax
income for the Grain and Ethanol Groups to conform to segment
reporting changes made in conjunction with the Lansing
acquisition. The changes, which related to service agreements
for DDG marketing and a lease of grain storage assets in Denison,
resulted in a shift of $1.2 million
in pretax income from the Grain Group to the Ethanol Group. The
Company expects similar shifts for each of the remaining three
quarters of 2018.
First Quarter Segment Overview
Trade Group Results Muted by Difficult Margin
Environment
With the closing of the Lansing acquisition effective
January 1, 2019. Trade Group results
now include the consolidated operating results of both Lansing and
Thompsons.
The Trade Group recorded a pretax loss of $17.5 million and an adjusted pretax loss of
$5.9 million for the quarter. As
noted above, the group also incurred $4.4
million of incremental depreciation and amortization
expenses. The former Grain Group posted a loss of $1.2 million in the first quarter of 2018.
- Income from merchandising activities was muted by limited
market volatility.
- Income derived from grain originations and the group's assets
was down slightly on limited farmer selling and diminished income
from storing wheat; those results also included a $2.2 million insured loss due to property damage
caused by heavy rains in Nebraska.
- Food ingredient and specialty grains business results were
down.
Due in large part to the Lansing acquisition, the group's first
quarter 2019 EBITDA and adjusted EBITDA were $7.0 million and $18.6
million, respectively, which compare favorably to the Grain
Group's $5.7 million EBITDA in the
first quarter of 2018.
Ethanol Group Performance Down Slightly on Weak
Margins
The Ethanol Group earned pretax income of $2.6 million in the first quarter, somewhat less
than the $3.1 million of pretax
income it earned in the same period in 2018.
- Industry margins were weak, but improved late in the
quarter.
- The group continued to improve plant efficiency, which led to
higher product yields.
- E85 sales were well below those of the prior year, but began
rebounding as gasoline prices rose.
Construction is nearly complete on the state-of-the-art
bio-refinery in Kansas that the
group is building in partnership with ICM, Inc. The company expects
the facility to begin operating early in the third
quarter.
Plant Nutrient Group Records Pretax Loss of $3.9 Million as All Product Lines
Struggle
The Plant Nutrient Group recorded a pretax loss of $3.9 million in the first quarter compared to
pretax income of $1.1 million in the
prior year period.
- Both primary and specialty nutrient volumes significantly
lagged the prior year due to extended cold and wet
weather.
- Lawn and contract manufacturing got off to a decent start, but
volumes were down even more than expected.
The group's current quarter EBITDA was $5.0 million, a $4.3
million decrease from 2018 first quarter results.
Rail Group Registers Improved Quarter on Stronger Leasing and
Repair Results
The Rail Group earned first quarter pretax income of
$4.3 million compared to $4.0 million in the same period of the prior
year.
- The group's income from railcar leasing increased by
$1.2 million year over year on record
utilization, more cars on lease and slightly higher average lease
rates.
- Income from car sales declined $1.7
million year over year.
- Service and other pretax income improved by $0.9 million on higher volume and better margins
in the repair business.
The group's first quarter 2019 EBITDA was $16.3 million, up 20 percent from the
$13.5 million in the comparable 2018
period.
Adjusted Net Corporate Expenses Decline Year over
Year
Unallocated net company-level expenses were $4.9 million, down considerably from the
$8.9 million net expenses incurred in
the comparable 2018 period. The year-over-year decrease was due in
part due to the absence of severance expenses, which were
$1.4 million in the prior period, and
lower expenses associated with SAP
implementation.
Conference Call
The company will host a webcast on Tuesday, May 7, 2019, at
11 a.m. Eastern Daylight Time, to
discuss its performance and provide its updated outlook for 2019.
To access the call, please dial 866-439-8514 or 678-509-7568
(participant passcode is 9681589). 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/m6/p/aec8j4o7. 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
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,
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 adjusted pretax income, adjusted net income, adjusted net
income per share, 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 pretax income, adjusted
net income, adjusted net income per share, EBITDA and adjusted
EBITDA do 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 the financial tables
provided in the release.
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.
The Andersons,
Inc.
|
|
|
|
Condensed
Consolidated Statements of Operations
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
(in thousands, except
per share data)
|
2019
|
|
2018
|
Sales and
merchandising revenues
|
$
2,079,391
|
|
$
635,739
|
Cost of sales and
merchandising revenues
|
1,969,727
|
|
572,034
|
Gross
profit
|
109,664
|
|
63,705
|
Operating,
administrative and general expenses
|
113,349
|
|
64,257
|
Asset
impairment
|
-
|
|
-
|
Goodwill
impairment
|
-
|
|
-
|
Interest
expense
|
15,910
|
|
6,999
|
Other
income:
|
|
|
|
Equity in
earnings (loss) of affiliates
|
1,519
|
|
3,573
|
Other income,
net
|
(1,514)
|
|
1,686
|
Income (loss) before
income taxes
|
(19,590)
|
|
(2,292)
|
Income tax provision
(benefit)
|
(5,442)
|
|
(310)
|
Net income
(loss)
|
(14,148)
|
|
(1,982)
|
Net income
attributable to the noncontrolling interests
|
(155)
|
|
(282)
|
Net income (loss)
attributable to The Andersons, Inc.
|
$
(13,993)
|
|
$
(1,700)
|
|
|
|
|
Per common
share:
|
|
|
|
Basic earnings
(loss) attributable to The Andersons, Inc. common
shareholders
|
$
(0.43)
|
|
$
(0.06)
|
Diluted
earnings (loss) attributable to The Andersons, Inc. common
shareholders
|
$
(0.43)
|
|
$
(0.06)
|
Dividends
declared
|
$
0.170
|
|
$
0.165
|
|
|
|
|
The Andersons,
Inc.
|
|
|
|
Reconciliation to
Adjusted Net Income
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
(in thousands, except
per share data)
|
2019
|
|
2018
|
Net income (loss)
attributable to The Andersons, Inc.
|
$
(13,993)
|
|
$
(1,700)
|
Items impacting other
income, net of tax:
|
|
|
|
One time acquisition
costs
|
6,116
|
|
-
|
Transaction related
stock compensation
|
2,562
|
|
-
|
|
|
|
|
Total adjusting
items
|
8,678
|
|
-
|
Adjusted net income
(loss) attributable to The Andersons, Inc.
|
$
(5,316)
|
|
$
(1,700)
|
|
|
|
|
Diluted earnings
attributable to The Andersons, Inc. common shareholders
|
$
(0.43)
|
|
$
(0.06)
|
|
|
|
|
Impact on diluted
earnings per share
|
0.27
|
|
-
|
Adjusted diluted
earnings (loss) per share
|
$
(0.16)
|
|
$
(0.06)
|
|
|
|
|
The Andersons,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
(in
thousands)
|
March 31,
2019
|
|
December 31,
2018
|
|
March 31,
2018
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
29,991
|
|
$
22,593
|
|
$
31,497
|
Accounts
receivable, net
|
611,290
|
|
207,285
|
|
216,021
|
Inventories
|
1,026,465
|
|
690,804
|
|
731,629
|
Commodity
derivative assets – current
|
158,277
|
|
51,421
|
|
43,810
|
Other current
assets
|
60,222
|
|
50,703
|
|
57,147
|
Assets held
for sale
|
364
|
|
392
|
|
57,775
|
Total current
assets
|
1,886,609
|
|
1,023,198
|
|
1,137,879
|
Other
assets:
|
|
|
|
|
|
Commodity
derivative assets – noncurrent
|
3,757
|
|
480
|
|
1,739
|
Other assets,
net
|
352,905
|
|
127,503
|
|
143,445
|
Right of use
asset, net
|
85,766
|
|
-
|
|
-
|
Equity method
investments
|
121,781
|
|
242,326
|
|
224,449
|
|
564,209
|
|
370,309
|
|
369,633
|
Rail Group assets
leased to others, net
|
537,629
|
|
521,785
|
|
462,253
|
Property, plant and
equipment, net
|
671,805
|
|
476,711
|
|
393,763
|
Total
assets
|
$
3,660,252
|
|
$
2,392,003
|
|
$
2,363,528
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
$
434,304
|
|
$
205,000
|
|
$
489,000
|
Trade and
other payables
|
590,258
|
|
462,535
|
|
263,519
|
Customer
prepayments and deferred revenue
|
148,345
|
|
32,533
|
|
81,778
|
Commodity
derivative liabilities – current
|
66,623
|
|
32,647
|
|
15,424
|
Accrued
expenses and other current liabilities
|
151,648
|
|
79,046
|
|
60,095
|
Current
maturities of long-term debt
|
55,160
|
|
21,589
|
|
14,134
|
Total current
liabilities
|
1,446,338
|
|
833,350
|
|
923,950
|
|
|
|
|
|
|
Right of use
liability
|
57,451
|
|
-
|
|
-
|
Other long-term
liabilities
|
12,262
|
|
32,184
|
|
31,536
|
Commodity derivative
liabilities – noncurrent
|
3,821
|
|
889
|
|
1,414
|
Employee benefit plan
obligations
|
21,471
|
|
22,542
|
|
26,310
|
Long-term debt, less
current maturities
|
982,025
|
|
496,187
|
|
438,628
|
Deferred income
taxes
|
138,598
|
|
130,087
|
|
118,933
|
Total
liabilities
|
2,661,966
|
|
1,515,239
|
|
1,540,771
|
Total
equity
|
998,286
|
|
876,764
|
|
822,757
|
Total liabilities and
equity
|
$
3,660,252
|
|
$
2,392,003
|
|
$
2,363,528
|
|
|
|
|
|
|
The Andersons,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to
EBITDA and Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Trade
|
|
Ethanol
|
|
Plant
Nutrient
|
|
Rail
|
|
Other
|
|
Total
|
Three months ended
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$
(17,464)
|
|
$
2,417
|
|
$
(3,929)
|
|
$
4,312
|
|
$
(4,926)
|
|
$
(19,590)
|
Income (loss)
attributable to the noncontrolling interests
|
-
|
|
(155)
|
|
-
|
|
-
|
|
-
|
|
(155)
|
Income (loss) before
income taxes attributable to The Andersons, Inc.
|
(17,464)
|
|
2,572
|
|
(3,929)
|
|
4,312
|
|
(4,926)
|
|
(19,435)
|
Interest
expense
|
10,274
|
|
(824)
|
|
2,261
|
|
3,679
|
|
520
|
|
15,910
|
Depreciation and
amortization
|
14,200
|
|
139
|
|
6,662
|
|
8,275
|
|
2,925
|
|
32,201
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA)
|
$
7,010
|
|
$
1,887
|
|
$
4,994
|
|
$
16,266
|
|
$
(1,481)
|
|
$
28,676
|
Adjusting items
impacting EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
One time acquisition
costs
|
8,154
|
|
-
|
|
-
|
|
-
|
|
-
|
|
8,154
|
Transaction related
stock compensation
|
3,416
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3,416
|
Total adjusting
items
|
11,570
|
|
-
|
|
-
|
|
-
|
|
-
|
|
11,570
|
Adjusted
EBITDA
|
$
18,580
|
|
$
1,887
|
|
$
4,994
|
|
$
16,266
|
|
$
(1,481)
|
|
$
40,246
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$
(1,244)
|
|
$
2,771
|
|
$
1,091
|
|
$
3,969
|
|
$
(8,879)
|
|
$
(2,292)
|
Income (loss)
attributable to the noncontrolling interests
|
-
|
|
(282)
|
|
-
|
|
-
|
|
-
|
|
(282)
|
Income (loss) before
income taxes attributable to The Andersons, Inc.
|
(1,244)
|
|
3,053
|
|
1,091
|
|
3,969
|
|
(8,879)
|
|
(2,010)
|
Interest
expense
|
2,959
|
|
(41)
|
|
1,441
|
|
2,368
|
|
272
|
|
6,999
|
Depreciation and
amortization
|
4,017
|
|
1,509
|
|
6,727
|
|
7,169
|
|
3,257
|
|
22,679
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA)
|
$
5,732
|
|
$
4,521
|
|
$
9,259
|
|
$
13,506
|
|
$
(5,350)
|
|
$
27,668
|
|
|
|
|
|
|
|
|
|
|
|
|
The Andersons,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Segment
Data
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Trade
|
|
Ethanol
|
|
Plant
Nutrient
|
|
Rail
|
|
Other
|
|
Total
|
Three months ended
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
1,700,620
|
|
$
208,831
|
|
$
128,525
|
|
$
41,415
|
|
-
|
|
$
2,079,391
|
Gross
profit
|
68,989
|
|
3,808
|
|
20,934
|
|
15,933
|
|
-
|
|
109,664
|
Equity in earnings of
affiliates
|
(131)
|
|
1,650
|
|
-
|
|
-
|
|
-
|
|
1,519
|
Other income,
net
|
(2,990)
|
|
84
|
|
567
|
|
209
|
|
616
|
|
(1,514)
|
Income (loss) before
income taxes
|
(17,464)
|
|
2,417
|
|
(3,929)
|
|
4,312
|
|
(4,926)
|
|
(19,590)
|
Income (loss)
attributable to the noncontrolling interests
|
-
|
|
(155)
|
|
-
|
|
-
|
|
-
|
|
(155)
|
Income (loss) before
income taxes attributable to The
Andersons, Inc. (a)
|
(17,464)
|
|
2,572
|
|
(3,929)
|
|
4,312
|
|
(4,926)
|
|
$
(19,435)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
276,027
|
|
$
173,663
|
|
$
135,617
|
|
$
50,432
|
|
$
-
|
|
$
635,739
|
Gross
profit
|
25,225
|
|
3,691
|
|
22,237
|
|
12,552
|
|
-
|
|
63,705
|
Equity in earnings of
affiliates
|
1,987
|
|
1,586
|
|
-
|
|
-
|
|
-
|
|
3,573
|
Other income,
net
|
325
|
|
614
|
|
652
|
|
16
|
|
79
|
|
1,686
|
Income (loss) before
income taxes
|
(1,244)
|
|
2,771
|
|
1,091
|
|
3,969
|
|
(8,879)
|
|
(2,292)
|
Income (loss)
attributable to the noncontrolling interests
|
-
|
|
(282)
|
|
-
|
|
-
|
|
-
|
|
(282)
|
Income (loss) before
income taxes attributable to The
Andersons, Inc. (a)
|
$
(1,244)
|
|
$
3,053
|
|
$
1,091
|
|
$
3,969
|
|
$
(8,879)
|
|
$
(2,010)
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Income (loss)
before income taxes attributable to The Andersons, Inc. for each
Group is defined as net sales and merchandising revenues plus
identifiable other income less all identifiable operating expenses,
including interest expense for carrying working capital and
long-term assets and is reported net of the noncontrolling interest
share of income (loss).
|
|
|
|
|
|
|
|
|
|
|
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|
View original content to download
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SOURCE The Andersons, Inc.