Form 8-K Andersons, Inc. For: Aug 05
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 5, 2015 | |
The Andersons, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Ohio | 000-20557 | 34-1562374 |
_____________________ (State or other jurisdiction | _____________ (Commission | ______________ (I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
480 West Dussel Drive, Maumee, Ohio | 43537 | |
_________________________________ (Address of principal executive offices) | ___________ (Zip Code) | |
Registrant’s telephone number, including area code: | 419-893-5050 | |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
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))
Item 2.02 Results of Operations and Financial Condition.
The Andersons, Inc. issued a press release today announcing its second quarter 2015 earnings. This press release is attached as exhibit 99.1 to this filing.
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 5, 2015 | By: | /s/ John Granato | ||
Name: John Granato | ||||
Title: Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
Exhibit Index
Exhibit No. | Description | |
99.1 | Second Quarter 2015 Earnings Release | |
NEWS RELEASETHE ANDERSONS, INC. REPORTS SECOND QUARTER RESULTS
Second Quarter Earnings of $1.09 per Diluted Share
MAUMEE, OHIO, AUGUST 5, 2015 The Andersons, Inc. (NASDAQ: ANDE) announces financial results for the second quarter ended June 30, 2015.
Highlights
• | Rail Group has continued strong performance |
• | Ethanol Group earnings improve significantly from the first quarter |
• | Plant Nutrient Group acquires the nutrient business of Kay Flo Industries |
• | Unusually wet weather negatively impacts the Plant Nutrient Group |
“The Rail Group’s focus on asset management and operational performance helped produce a great quarter. The Ethanol Group had strong results as well, due primarily to an improvement in margins. The ethanol team also continued to benefit from investments made in technology and process improvement,” said CEO Mike Anderson. “The weather, however, did not cooperate in some of our markets, which led to decreased profitability in our Plant Nutrient Group. Extremely wet weather the last half of the second quarter impaired the normal application of crop nutrients in the Eastern corn-belt. We expect to return to normal nutrient volumes in the fall. Our results this quarter once again demonstrate the value of having a diversified portfolio of businesses. The most recent addition to our portfolio, Kay Flo, has already added new markets, customers and product lines to the Company. Additionally, significant cross selling opportunities and synergies have been identified that will pay dividends in 2016 and beyond.”
Key Highlights
Net income for the second quarter of 2015 attributable to the Company was $31.1 million, or $1.09 per diluted share. Last year second quarter net income was $44.3 million, or $1.56 per diluted share. Net income through June this year was $35.2 million, or $1.23 per diluted share. When excluding the partial redemption of our investment in Lansing Trade Group last year, adjusted net income through June of 2014 was $56.4 million, or $1.98 per diluted share. (See the Reconciliation to Adjusted Net Income Table for a discussion and reconciliation of income and adjusted income.) Second quarter 2015 revenues were $1.2 billion compared to $1.3 billion in revenues the same period last year.
• | The Rail Group achieved pre-tax income of $21.7 million this quarter. The group continues to have strong base leasing business results and the rail repair business had a $0.7 million year over year improvement. The group also had income of $10.6 million related to a lease settlement during the quarter. |
• | The Rail Group’s utilization rate increased for the tenth consecutive quarter and averaged 93.5 percent this quarter. |
• | The Ethanol Group executed well operationally and achieved record second quarter ethanol production volumes. Strong results from the sale of co-products were also seen. |
• | Wet weather reduced nutrient application in a number of areas in which the Plant Nutrient Group does business. This led to reduced margins and volume for the wholesale nutrient business, and prevented the group from regaining the volume shortfall seen in the prior two |
quarters. Further, there was a $3.0 million negative impact to income this quarter related to the Kay Flo acquisition.
• | The Grain Group’s results were impacted by lower margins and volume, which resulted primarily from lower than expected movement of grain off farm, and lower forward contracting activity. |
Outlook
• | The Rail Group is expected to deliver another great year. |
• | The demand for ethanol is expected to remain strong as lower gasoline prices support base demand for gasoline. The Ethanol Group believes export demand will support margins into the fall when domestic gasoline demand falls off. |
• | Barring further unusual weather the Plant Nutrient Group should have a typical second half of the year. Significant volume improvement should be seen in 2016, as farmers address their soil nutrient demands created by an abnormally wet spring. The benefits from the Kay Flo acquisition should also begin to be seen in 2016. |
• | The wet weather slightly reduced the likely size of fall crops of corn and beans, and degraded wheat quality in some of our draw territory. We will continue to look for other income opportunities resulting from market volatility to somewhat offset this lower volume. |
Conference Call
The Company will host a webcast on Thursday, August 6, 2015 at 11:00 A.M. ET, to discuss its performance. To dial-in to the call, the number is 866-439-8514 (participant passcode is 83166883). 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/m/p/nsm3rp8b. Log on. Click on the phone icon at the bottom of the “webcast window” on the left side of the screen. Then, you will be provided with the conference call number and passcode. Click the gear set icon (left of the telephone icon) and select ‘Live Phone’ to synchronize the presentation with the audio on your phone. A replay of the call can also be accessed under the heading “Investor” 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.
Company Description
Founded in Maumee, Ohio, in 1947, The Andersons is a diversified Company rooted in agriculture conducting business across North America in the grain, ethanol, plant nutrient and rail sectors. The Company also has a consumer retailing presence. For more information, visit The Andersons online at www.andersonsinc.com.
Investor Relations Contact
Jim Burmeister
Phone: 419-891-5848
E-mail: [email protected]
The Andersons, Inc.
Condensed Consolidated Statements of Income
(unaudited)
(in thousands, except per share data) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Sales and merchandising revenues | $ | 1,208,492 | $ | 1,312,082 | $ | 2,158,581 | $ | 2,315,376 | |||||||
Cost of sales and merchandising revenues | 1,100,319 | 1,190,587 | 1,967,097 | 2,117,106 | |||||||||||
Gross profit | 108,173 | 121,495 | 191,484 | 198,270 | |||||||||||
Operating, administrative and general expenses | 83,743 | 76,275 | 162,346 | 147,260 | |||||||||||
Interest expense | 4,025 | 6,146 | 10,063 | 12,148 | |||||||||||
Other income: | |||||||||||||||
Equity in earnings of affiliates, net | 16,190 | 32,213 | 19,450 | 52,714 | |||||||||||
Other income, net | 13,772 | 3,797 | 16,880 | 23,409 | |||||||||||
Income before income taxes | 50,367 | 75,084 | 55,405 | 114,985 | |||||||||||
Income tax provision | 17,969 | 25,714 | 19,061 | 39,586 | |||||||||||
Net income | 32,398 | 49,370 | 36,344 | 75,399 | |||||||||||
Net income attributable to the noncontrolling interests | 1,306 | 5,069 | 1,155 | 8,390 | |||||||||||
Net income attributable to The Andersons, Inc. | $ | 31,092 | $ | 44,301 | $ | 35,189 | $ | 67,009 | |||||||
Per common share: | |||||||||||||||
Basic earnings attributable to The Andersons, Inc. common shareholders | $ | 1.09 | $ | 1.56 | $ | 1.23 | $ | 2.36 | |||||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 1.09 | $ | 1.56 | $ | 1.23 | $ | 2.36 | |||||||
Dividends declared | $ | 0.14 | $ | 0.11 | $ | 0.28 | $ | 0.22 | |||||||
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, | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income attributable to The Andersons, Inc. | $ | 31,092 | $ | 44,301 | $ | 35,189 | $ | 67,009 | |||||||
Items impacting other income, net: | |||||||||||||||
Partial redemption of investment in Lansing Trade Group | — | — | — | (10,656 | ) | ||||||||||
Total adjusting items | — | — | — | (10,656 | ) | ||||||||||
Adjusted net income attributable to The Andersons, Inc. | $ | 31,092 | $ | 44,301 | $ | 99,070 | $ | 56,353 | |||||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 1.09 | $ | 1.56 | $ | 1.23 | $ | 2.36 | |||||||
Impact on diluted earnings per share | — | — | — | (0.38 | ) | ||||||||||
Adjusted diluted earnings per share | $ | 1.09 | $ | 1.56 | $ | 1.23 | $ | 1.98 | |||||||
The Andersons, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands) | June 30, 2015 | December 31, 2014 | June 30, 2014 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 40,773 | $ | 114,704 | $ | 47,190 | |||||
Restricted cash | 941 | 429 | 895 | ||||||||
Accounts receivable, net | 238,601 | 183,059 | 189,646 | ||||||||
Inventories | 508,408 | 795,655 | 432,996 | ||||||||
Commodity derivative assets - current | 39,860 | 92,771 | 162,427 | ||||||||
Deferred income taxes | 6,069 | 7,337 | 7,443 | ||||||||
Other current assets | 44,765 | 60,492 | 24,596 | ||||||||
Total current assets | 879,417 | 1,254,447 | 865,193 | ||||||||
Other assets: | |||||||||||
Commodity derivative assets - noncurrent | 2,990 | 507 | 312 | ||||||||
Other assets, net | 225,601 | 131,527 | 116,985 | ||||||||
Pension asset | — | — | 13,023 | ||||||||
Equity method investments | 224,380 | 226,857 | 264,381 | ||||||||
452,971 | 358,891 | 394,701 | |||||||||
Railcar assets leased to others, net | 330,832 | 297,747 | 242,147 | ||||||||
Property, plant and equipment, net | 489,145 | 453,607 | 390,587 | ||||||||
Total assets | $ | 2,152,365 | $ | 2,364,692 | $ | 1,892,628 | |||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Short-term debt | $ | 141,250 | $ | 2,166 | $ | 27,000 | |||||
Trade and other payables | 358,190 | 706,823 | 307,765 | ||||||||
Customer prepayments and deferred revenue | 25,927 | 99,617 | 21,670 | ||||||||
Commodity derivative liabilities – current | 42,622 | 64,075 | 86,134 | ||||||||
Accrued expenses and other current liabilities | 72,034 | 78,610 | 81,260 | ||||||||
Current maturities of long-term debt | 27,188 | 76,415 | 89,387 | ||||||||
Total current liabilities | 667,211 | 1,027,706 | 613,216 | ||||||||
Other long-term liabilities | 14,934 | 15,507 | 15,032 | ||||||||
Commodity derivative liabilities – noncurrent | 2,177 | 3,318 | 7,444 | ||||||||
Employee benefit plan obligations | 57,686 | 59,308 | 39,178 | ||||||||
Long-term debt, less current maturities | 417,279 | 298,638 | 300,220 | ||||||||
Deferred income taxes | 171,163 | 136,166 | 126,258 | ||||||||
Total liabilities | 1,330,450 | 1,540,643 | 1,101,348 | ||||||||
Total equity | 821,915 | 824,049 | 791,280 | ||||||||
Total liabilities and equity | $ | 2,152,365 | $ | 2,364,692 | $ | 1,892,628 | |||||
The Andersons, Inc.
Segment Data
(Unaudited)
(in thousands) | Grain | Ethanol | Plant Nutrient | Rail | Retail | Other | Total | ||||||||||||||||||||
Three months ended June 30, 2015 | |||||||||||||||||||||||||||
Revenues from external customers | $ | 625,316 | $ | 139,432 | $ | 357,186 | $ | 45,523 | $ | 41,035 | $ | — | $ | 1,208,492 | |||||||||||||
Gross profit | 25,005 | 5,843 | 46,698 | 18,249 | 12,378 | — | 108,173 | ||||||||||||||||||||
Equity in earnings of affiliates | 7,875 | 8,315 | — | — | — | — | 16,190 | ||||||||||||||||||||
Other income, net | 1,230 | 6 | 459 | 11,834 | 94 | 149 | 13,772 | ||||||||||||||||||||
Income (loss) before income taxes | 3,147 | 10,975 | 18,873 | 21,689 | 1,469 | (5,786 | ) | 50,367 | |||||||||||||||||||
Income (loss) attributable to the noncontrolling interests | (2 | ) | 1,308 | — | — | — | — | 1,306 | |||||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 3,149 | $ | 9,667 | $ | 18,873 | $ | 21,689 | $ | 1,469 | $ | (5,786 | ) | $ | 49,061 | ||||||||||||
Three months ended June 30, 2014 | |||||||||||||||||||||||||||
Revenues from external customers | $ | 656,004 | $ | 226,388 | $ | 354,808 | $ | 33,409 | $ | 41,473 | $ | — | $ | 1,312,082 | |||||||||||||
Gross profit | 27,909 | 18,638 | 48,538 | 13,863 | 12,547 | — | 121,495 | ||||||||||||||||||||
Equity in earnings of affiliates | 8,467 | 23,746 | — | — | — | — | 32,213 | ||||||||||||||||||||
Other income, net | 975 | 356 | 858 | 787 | 190 | 631 | 3,797 | ||||||||||||||||||||
Income (loss) before income taxes | 10,352 | 38,976 | 27,002 | 6,684 | 1,637 | (9,567 | ) | 75,084 | |||||||||||||||||||
Income (loss) attributable to the noncontrolling interest | (3 | ) | 5,072 | — | — | — | — | 5,069 | |||||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 10,355 | $ | 33,904 | $ | 27,002 | $ | 6,684 | $ | 1,637 | $ | (9,567 | ) | $ | 70,015 | ||||||||||||
Grain | Ethanol | Plant Nutrient | Rail | Retail | Other | Total | |||||||||||||||||||||
Six months ended June 30, 2015 | |||||||||||||||||||||||||||
Revenues from external customers | $ | 1,210,478 | $ | 277,612 | $ | 511,137 | $ | 89,739 | $ | 69,615 | $ | — | $ | 2,158,581 | |||||||||||||
Gross profit | 54,730 | 12,129 | 68,664 | 35,571 | 20,390 | — | 191,484 | ||||||||||||||||||||
Equity in earnings of affiliates | 9,423 | 10,027 | — | — | — | — | 19,450 | ||||||||||||||||||||
Other income, net | 2,064 | 48 | 1,494 | 12,673 | 191 | 410 | 16,880 | ||||||||||||||||||||
Income (loss) before income taxes | 3,887 | 16,106 | 19,297 | 32,002 | (714 | ) | (15,173 | ) | 55,405 | ||||||||||||||||||
Income (loss) attributable to the noncontrolling interests | (5 | ) | 1,160 | — | — | — | — | 1,155 | |||||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 3,892 | $ | 14,946 | $ | 19,297 | $ | 32,002 | $ | (714 | ) | $ | (15,173 | ) | $ | 54,250 | |||||||||||
Six months ended June 30, 2014 | |||||||||||||||||||||||||||
Revenues from external customers | $ | 1,239,163 | $ | 415,208 | $ | 506,163 | $ | 85,711 | $ | 69,131 | $ | — | $ | 2,315,376 | |||||||||||||
Gross profit | 44,917 | 26,003 | 71,088 | 35,728 | 20,534 | — | 198,270 | ||||||||||||||||||||
Equity in earnings of affiliates | 10,351 | 42,363 | — | — | — | — | 52,714 | ||||||||||||||||||||
Other income, net | 19,321 | 130 | 1,350 | 1,497 | 302 | 809 | 23,409 | ||||||||||||||||||||
Income (loss) before income taxes | 21,655 | 62,124 | 26,966 | 21,729 | (698 | ) | (16,791 | ) | 114,985 | ||||||||||||||||||
Income attributable to the noncontrolling interest | (6 | ) | 8,396 | — | — | — | — | 8,390 | |||||||||||||||||||
Income (loss) before income taxes attributable to The Andersons, Inc. (a) | $ | 21,661 | $ | 53,728 | $ | 26,966 | $ | 21,729 | $ | (698 | ) | $ | (16,791 | ) | $ | 106,595 | |||||||||||
(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).