The Andersons, Inc. Reports Third Quarter Results; Best Q3 since 2014
MAUMEE, Ohio, Nov. 2, 2021 /PRNewswire/ -- The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the third quarter ended September 30, 2021.
Third Quarter Highlights:
- Company reported net income attributable to The Andersons from continuing operations of $13.9 million, or $0.41 per diluted share, and adjusted net income from continuing operations of $5.2 million, or $0.15 per diluted share
- Adjusted EBITDA from continuing operations was $56.3 million for the quarter, an increase of $9.3 million, or 20%, year over year; trailing twelve month adjusted EBITDA from continuing operations of $294.0 million
- Trade reported all-time record earnings with pretax income of $42.0 million and adjusted pretax income of $27.6 million on continued merchandising opportunities and strong elevation margins
- Completed strategic sale of Rail leasing assets and used proceeds to reduce debt
"I'm pleased with our third quarter, particularly the record results of our Trade Group business. We benefited from outstanding execution by our team, strong demand, and relatively low grain stocks - including growth in new markets, such as renewable diesel and supply chain extensions with our new Swiss trading office. We continue to identify opportunities in these volatile markets and remain focused on an anticipated large 2021 harvest. Harvest in the corn belt is progressing and we are pleased that storage income has returned to the wheat and corn markets," said President and CEO Pat Bowe.
"Ethanol margins have strengthened through the fall maintenance season and U.S. stocks are low at this time. We are focused on risk management and effective hedging and continue to see strong returns from co-products, particularly distillers' corn oil," added Bowe. "We anticipate strong fourth quarter margins in Ethanol. Plant Nutrient followed up a great first half with a third quarter loss, which was in line with our expectations for this seasonal business. Fertilizer prices and farm income both remain high. We continue to receive good support from our suppliers in this time of tight stocks. Our teams are executing well and remain focused on customer needs and operational excellence."
"Lastly, I want to comment on the sale of our Rail leasing business that was announced on August 16," stated Bowe. "This strategic sale allowed us to strengthen our balance sheet and focus on investing in our core agriculture businesses. We completed the acquisition of Capstone Commodities on October 1 which helps to expand our supply chain presence to southwestern U.S. dairy customers. We continue to evaluate organic growth projects in grain, renewable fuels, and fertilizer as well as potential acquisitions and investments, with the goal of growing our ag supply chain and renewable fuels businesses while reducing our carbon footprint."
$ in millions, except per share amounts | ||||||||||||||||||
Q3 2021 | Q3 2020 | Variance | YTD 2021 | YTD 2020 | Variance | |||||||||||||
Pretax Income (Loss) Attributable to the Company1,2 | $ | 17.9 | $ | (5.6) | $ | 23.5 | $ | 85.0 | $ | (30.1) | $ | 115.1 | ||||||
Adjusted Pretax Income (Loss) Attributable to the Company1,2 | 6.3 | (1.5) | 7.8 | 74.1 | (21.3) | 95.4 | ||||||||||||
Trade1 | 27.6 | 6.9 | 20.7 | 56.0 | (0.4) | 56.4 | ||||||||||||
Ethanol | (3.6) | 1.1 | (4.7) | 22.8 | (22.0) | 44.8 | ||||||||||||
Plant Nutrient | (5.8) | (5.4) | (0.4) | 26.7 | 12.8 | 13.9 | ||||||||||||
Other1 | (11.8) | (4.1) | (7.7) | (31.4) | (11.8) | (19.6) | ||||||||||||
Net Income (Loss) Attributable to the Company2 | 13.9 | (1.5) | 15.4 | 66.9 | (11.5) | 78.4 | ||||||||||||
Adjusted Net Income (Loss) Attributable to the Company1,2 | 5.2 | (2.9) | 8.1 | 58.8 | (19.6) | 78.4 | ||||||||||||
Diluted Earnings Per Share (EPS)2 | 0.41 | (0.04) | 0.45 | 1.99 | (0.35) | 2.34 | ||||||||||||
Adjusted Diluted EPS1,2 | 0.15 | (0.08) | 0.23 | 1.75 | (0.60) | 2.35 | ||||||||||||
EBITDA1,2 | 67.9 | 42.9 | 25.0 | 233.4 | 89.7 | 143.7 | ||||||||||||
Adjusted EBITDA1,2 | $ | 56.3 | $ | 47.0 | $ | 9.3 | $ | 222.5 | $ | 98.6 | $ | 123.9 | ||||||
1 Non-GAAP financial measures; see appendix for explanations and reconciliations. 2 Measure represents only continuing operations of the Company. |
Liquidity and Cash Management
"We generated cash flow from operations before working capital changes of $55.6 million for the third quarter and $237.7 million for the year to date," said Executive Vice President and CFO Brian Valentine. "This strong cash flow, combined with proceeds from the sale of assets, has enabled us to reduce long-term debt by over $300 million since the start of the year. We remain disciplined with capital allocation while ensuring that we are adequately maintaining our physical assets. Short-term borrowings at the end of the quarter have been significantly reduced to $281.2 million from the $915.2 million balance at the close of our first quarter, which is our typical seasonal high. We are now below our key target of 2.5x long-term debt to adjusted EBITDA and have capacity available for growth in our core agricultural businesses."
Readily marketable inventories of $700 million at September 30 are a significant increase from the prior year and reflects the overall inflation in commodity prices. The company invested $19.8 million on capital projects for its continuing operations in the quarter. The company expects to invest approximately $85 million in 2021 in its continuing operations. In addition, the company received proceeds of $543 million from the sale of its Rail leasing business and other assets. A portion of these proceeds were used to retire long-term debt and reduce outstanding short-term borrowings.
Third Quarter Segment Overview
Record Trade Results Driven by Elevation Margins and Merchandising Income Result in $20.7 Million Year-Over-Year Improvement
The Trade segment had record adjusted pretax income of $27.6 million for the quarter compared to adjusted pretax income of $6.9 million in the third quarter of 2020. The difference in reported and adjusted pretax income in both periods was attributable to stock compensation expense associated with the 2019 acquisition of Lansing Trade Group, as well as a gain on the sale of a grain asset location in 2021.
Strong elevation margins in Idaho and Louisiana grain assets led the significant quarter-over-quarter improvement. In addition, new merchandising businesses have added incremental gross profit and earnings. Good overall positioning, risk management, and execution has contributed to year-over-year improved performance.
Continued merchandising opportunities are expected throughout the fourth quarter. The harvest outlook remains strong despite delays caused by recent precipitation. A good third quarter wheat harvest accumulated more bushels than expected and an opportunity for storage income with carry in the wheat market. Relatively low stocks are expected to continue past harvest along with higher prices and strong elevation margins are expected to continue into 2022.
Trade's third quarter adjusted EBITDA was $43.9 million, nearly double the third quarter 2020 adjusted EBITDA of $22.3 million.
Ethanol Records a Pretax Loss of $3.6 Million on Higher Corn Basis; Co-Product Values and Trading Remain Strong
The Ethanol segment reported a pretax loss attributable to the company of $3.6 million in the third quarter compared to the pretax income attributable to the company of $1.1 million it realized in the same period in 2020.
The quarter-over-quarter decline was driven by higher corn basis at all five ethanol plants eroding any board crush margins. Partially offsetting the ethanol margin decline was increased high-protein feed values and continuing corn oil strength. Profitable third-party trading of ethanol, feed ingredients, and vegetable oil exceeded last year's third quarter. Stocks of ethanol are at very low levels leading to ethanol board crush margins that are positive into the first quarter and despite a projected seasonal slowdown in gasoline demand. Industry production increases are expected in response.
Sales volumes for ethanol, corn oil, and feed ingredients were up, driven by higher production and additional third-party sales from the trading business. Hedges on forward ethanol production are in place for a portion of expected production.
Ethanol recorded EBITDA of $19.2 million in the third quarter of 2021, down $5.2 million from 2020 third quarter EBITDA of $24.4 million.
Plant Nutrient Results Nominally Lower than 2020
The Plant Nutrient segment posted a pretax loss of $5.8 million, compared to the pretax loss of $5.4 million last year. Gross profit for the group was up $1.4 million from good demand and strong margins in our agricultural product lines resulting from continued strength in both fertilizer prices and farmer income. High raw material costs and plant labor challenges lowered results for our turf and specialty products. Plant Nutrient's EBITDA was $1.8 million compared to 2020 third quarter EBITDA of $2.2 million.
Income Taxes; Corporate
The company has recorded income taxes from continuing operations at an effective rate of 24.7% for the third quarter and anticipates a full year effective rate of approximately 22%-25%.
Increases in corporate expense are due to variable incentive compensation and stranded costs from the sale of our Rail leasing business.
Conference Call
The company will host a webcast on Wednesday, November 3, 2021, at 11 a.m. Eastern Daylight Time, to discuss its performance and provide its updated outlook for 2021 and preliminary views for 2022. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 5175137). 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/k9hpyhef. 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.
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 adjusted pretax income (loss) from continuing operations, pretax income (loss) attributable to the company from continuing operations, adjusted pretax income (loss) attributable to the company from continuing operations, adjusted net income attributable to the company from continuing operations, adjusted diluted earnings per share from continuing operations; earnings before interest, taxes, depreciation and amortization (or EBITDA); EBITDA from continuing operations; adjusted EBITDA; adjusted EBITDA from continuing operations; and cash from operations before working capital changes provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and liquidity and better period-to-period comparability. The above measures are not and should not be considered as alternatives to net income from continuing operations, pretax income from continuing operations or income (loss) before income taxes from continuing operations, diluted earnings (loss) per share attributable to The Andersons, Inc. common shareholders from continuing operations and cash provided by (used in) operating activities 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 merchandising, biofuels, and plant nutrient 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 endedSeptember 30, | Nine months endedSeptember 30, | ||||||||||||||
(in thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Sales and merchandising revenues | $ | 2,998,824 | $ | 1,885,586 | $ | 8,829,348 | $ | 5,556,317 | |||||||
Cost of sales and merchandising revenues | 2,876,989 | 1,792,349 | 8,430,665 | 5,314,101 | |||||||||||
Gross profit | 121,835 | 93,237 | 398,683 | 242,216 | |||||||||||
Operating, administrative and general expenses | 110,275 | 92,610 | 312,833 | 277,363 | |||||||||||
Interest expense, net | 8,799 | 6,853 | 28,848 | 25,951 | |||||||||||
Other income, net: | |||||||||||||||
Equity in earnings (losses) of affiliates, net | (250) | 20 | 2,389 | 228 | |||||||||||
Other income, net | 13,806 | 3,846 | 24,743 | 10,154 | |||||||||||
Income (loss) before income taxes from continuing operations | 16,317 | (2,360) | 84,134 | (50,716) | |||||||||||
Income tax provision (benefit) from continuing operations | 4,027 | (4,148) | 18,065 | (18,628) | |||||||||||
Net income (loss) from continuing operations | 12,290 | 1,788 | 66,069 | (32,088) | |||||||||||
Income (loss) from discontinued operations, net of income taxes | 1,846 | 427 | 7,453 | 3,224 | |||||||||||
Net income (loss) | 14,136 | 2,215 | 73,522 | (28,864) | |||||||||||
Net income (loss) attributable to noncontrolling interests | (1,602) | 3,273 | (822) | (20,583) | |||||||||||
Net income (loss) attributable to The Andersons, Inc. | $ | 15,738 | $ | (1,058) | $ | 74,344 | $ | (8,281) | |||||||
Earnings (loss) per share attributable to The Andersons, Inc. common shareholders: | |||||||||||||||
Basic earnings (loss): | |||||||||||||||
Continuing operations | $ | 0.42 | $ | (0.04) | $ | 2.01 | $ | (0.35) | |||||||
Discontinued operations | 0.06 | 0.01 | 0.22 | 0.10 | |||||||||||
$ | 0.48 | $ | (0.03) | $ | 2.23 | $ | (0.25) | ||||||||
Diluted earnings (loss): | |||||||||||||||
Continuing operations | $ | 0.41 | $ | (0.04) | $ | 1.99 | $ | (0.35) | |||||||
Discontinued operations | 0.05 | 0.01 | 0.22 | 0.10 | |||||||||||
$ | 0.46 | $ | (0.03) | $ | 2.21 | $ | (0.25) | ||||||||
The Andersons, Inc. | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(unaudited) | |||||||||||
(in thousands) | September 30,2021 | December 31,2020 | September 30,2020 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 216,874 | $ | 29,123 | $ | 13,693 | |||||
Accounts receivable, net | 735,349 | 641,326 | 509,964 | ||||||||
Inventories | 1,017,804 | 1,293,066 | 747,588 | ||||||||
Commodity derivative assets – current | 409,647 | 320,706 | 140,065 | ||||||||
Current assets held-for-sale | 26,561 | 32,659 | 45,132 | ||||||||
Other current assets | 92,159 | 99,529 | 83,807 | ||||||||
Total current assets | 2,498,394 | 2,416,409 | 1,540,249 | ||||||||
Other assets: | |||||||||||
Goodwill | 129,342 | 131,542 | 131,542 | ||||||||
Other intangible assets, net | 118,690 | 140,084 | 148,846 | ||||||||
Right of use assets, net | 50,270 | 33,387 | 33,547 | ||||||||
Other assets held-for-sale | 38,863 | 643,474 | 642,538 | ||||||||
Other assets, net | 74,923 | 46,914 | 44,738 | ||||||||
Total other assets | 412,088 | 995,401 | 1,001,211 | ||||||||
Property, plant and equipment, net | 797,660 | 860,311 | 870,151 | ||||||||
Total assets | $ | 3,708,142 | $ | 4,272,121 | $ | 3,411,611 | |||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Short-term debt | $ | 281,199 | $ | 403,703 | $ | 100,405 | |||||
Trade and other payables | 825,923 | 954,809 | 635,206 | ||||||||
Customer prepayments and deferred revenue | 147,225 | 178,226 | 47,906 | ||||||||
Commodity derivative liabilities – current | 78,702 | 146,990 | 79,159 | ||||||||
Current maturities of long-term debt | 106,255 | 69,366 | 62,499 | ||||||||
Accrued taxes | 97,215 | 17,465 | 15,178 | ||||||||
Current liabilities held-for-sale | 13,427 | 25,277 | 27,996 | ||||||||
Accrued expenses and other current liabilities | 173,215 | 135,846 | 128,187 | ||||||||
Total current liabilities | 1,723,161 | 1,931,682 | 1,096,536 | ||||||||
Long-term lease liabilities | 31,332 | 19,835 | 19,216 | ||||||||
Long-term debt, less current maturities | 542,821 | 886,453 | 717,198 | ||||||||
Deferred income taxes | 79,636 | 170,147 | 163,454 | ||||||||
Other long-term liabilities held-for-sale | 13,592 | 48,096 | 221,334 | ||||||||
Other long-term liabilities | 81,587 | 55,248 | 56,646 | ||||||||
Total liabilities | 2,472,129 | 3,111,461 | 2,274,384 | ||||||||
Total equity | 1,236,013 | 1,160,660 | 1,137,227 | ||||||||
Total liabilities and equity | $ | 3,708,142 | $ | 4,272,121 | $ | 3,411,611 | |||||
The Andersons, Inc. | |||||||
Consolidated Statements of Cash Flows | |||||||
(unaudited) | |||||||
Nine months ended September 30, | |||||||
(in thousands) | 2021 | 2020 | |||||
Operating Activities | |||||||
Net income (loss) from continuing operations | $ | 66,069 | $ | (32,088) | |||
Income from discontinued operations, net of income taxes | 7,453 | 3,224 | |||||
Net income (loss) | 73,522 | (28,864) | |||||
Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 142,137 | 141,167 | |||||
Bad debt (recovery) expense, net | (2,182) | 8,049 | |||||
Equity in earnings of affiliates, net of dividends | (2,389) | (228) | |||||
Gain on sale of business from continuing operations | (14,619) | — | |||||
Loss on sale of business from discontinued operations | 1,491 | — | |||||
Gain on sales of assets, net | (6,505) | (1,037) | |||||
Stock-based compensation expense | 6,727 | 7,742 | |||||
Deferred federal income tax | (93,725) | 21,917 | |||||
Inventory write down | 3,399 | 10,933 | |||||
Other | 7,005 | 4,141 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (89,902) | (1,952) | |||||
Inventories | 266,865 | 400,262 | |||||
Commodity derivatives | (158,741) | (2,574) | |||||
Other assets | (3,357) | (34,343) | |||||
Payables and other accrued expenses | (10,659) | (329,422) | |||||
Net cash provided by operating activities | 119,067 | 195,791 | |||||
Investing Activities | |||||||
Purchases of property, plant and equipment and capitalized software | (52,730) | (59,414) | |||||
Proceeds from sale of assets | 3,999 | 8,121 | |||||
Purchases of investments | (5,993) | (2,849) | |||||
Proceeds from sale of business from continuing operations | 18,130 | 2,467 | |||||
Proceeds from sale of business from discontinued operations | 543,102 | — | |||||
Purchases of Rail assets | (6,039) | (26,258) | |||||
Proceeds from sale of Rail assets | 18,705 | 7,774 | |||||
Other | 349 | — | |||||
Net cash provided by (used in) investing activities | 519,523 | (70,159) | |||||
Financing Activities | |||||||
Net payments under lines of credit | (324,279) | (44,183) | |||||
Proceeds from issuance of short-term debt | 608,250 | — | |||||
Payments of short-term debt | (408,250) | — | |||||
Proceeds from issuance of long-term debt | 186,800 | 213,906 | |||||
Payments of long-term debt | (485,527) | (310,694) | |||||
Contributions from noncontrolling interest owner | 4,655 | 6,493 | |||||
Distributions to noncontrolling interest owner | (25) | (10,322) | |||||
Payments of debt issuance costs | (2,059) | (250) | |||||
Dividends paid | (17,503) | (17,234) | |||||
Other | (12,709) | (4,143) | |||||
Net cash used in financing activities | (450,647) | (166,427) | |||||
Effect of exchange rates on cash and cash equivalents | (192) | (407) | |||||
Increase (decrease) in cash and cash equivalents | 187,751 | (41,202) | |||||
Cash and cash equivalents at beginning of period | 29,123 | 54,895 | |||||
Cash and cash equivalents at end of period | $ | 216,874 | $ | 13,693 | |||
The Andersons, Inc. | |||||||||||||||
Adjusted Net Income Attributable to The Andersons, Inc. | |||||||||||||||
A non-GAAP financial measure | |||||||||||||||
(unaudited) | |||||||||||||||
Three months endedSeptember 30, | Nine months endedSeptember 30, | ||||||||||||||
(in thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Net income (loss) from continuing operations | $ | 12,290 | $ | 1,788 | $ | 66,069 | $ | (32,088) | |||||||
Net income (loss) attributable to noncontrolling interests | (1,602) | 3,273 | (822) | (20,583) | |||||||||||
Net income (loss) from continuing operations attributable to The Andersons, Inc. | 13,892 | (1,485) | 66,891 | (11,505) | |||||||||||
Items impacting other income, net of tax: | |||||||||||||||
Transaction related stock compensation | 243 | 912 | 1,000 | 3,260 | |||||||||||
Gain on sale of a business | (14,619) | — | (14,619) | — | |||||||||||
Loss on cost method investment | 2,784 | — | 2,784 | — | |||||||||||
Severance costs | — | 3,222 | — | 5,563 | |||||||||||
Income tax impact of adjustments (a) | 2,898 | (5,511) | 2,709 | (16,962) | |||||||||||
Total adjusting items, net of tax | (8,694) | (1,377) | (8,126) | (8,139) | |||||||||||
Adjusted net income (loss) from continuing operations attributable to The Andersons, Inc. | $ | 5,198 | $ | (2,862) | $ | 58,765 | $ | (19,644) | |||||||
Diluted earnings (loss) from continuing operations attributable to The Andersons, Inc. common shareholders | $ | 0.41 | $ | (0.04) | $ | 1.99 | $ | (0.35) | |||||||
Impact on diluted earnings (loss) per share from continuing operations | $ | (0.26) | $ | (0.04) | $ | (0.24) | $ | (0.25) | |||||||
Adjusted diluted earnings (loss) from continuing operations per share | $ | 0.15 | $ | (0.08) | $ | 1.75 | $ | (0.60) | |||||||
(a) Prior year income tax adjustments include $(4.5) million and $(14.8) million due to CARES Act benefits for the quarter and year ended September 30, 2020, respectively. |
Adjusted net income (loss) from continuing operations attributable to The Andersons, Inc. reflects reported net income (loss) from continuing operations available to The Andersons, Inc. common shareholders after the removal of specified items described above. Adjusted diluted earnings (loss) from continuing operations per share reflects the fully diluted EPS of The Andersons, Inc. after removal of the effect on EPS as reported of specified items described above. Management believes that Adjusted net income (loss) from continuing operations attributable to The Andersons, Inc. and Adjusted diluted earnings (loss) from continuing operations per share are useful measures of The Andersons, Inc. performance as they provide investors additional information about the operations of the company allowing better evaluation of underlying business performance and better comparability to previous periods. These non-GAAP financial measures are not intended to replace or be alternatives to Net income attributable to The Andersons, Inc. and Diluted earnings attributable to The Andersons, Inc. common shareholders as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company's average number of diluted shares outstanding for each respective period in order to arrive at an adjusted diluted earnings (loss) from continuing operations per share amount for each specified item. |
The Andersons, Inc. | |||||||||||||||||||
Segment Data | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
(in thousands) | Trade | Ethanol | PlantNutrient | Other | Total | ||||||||||||||
Three months ended September 30, 2021 | |||||||||||||||||||
Sales and merchandising revenues | $ | 2,242,131 | $ | 614,637 | $ | 142,056 | $ | — | $ | 2,998,824 | |||||||||
Gross profit | 98,196 | 5,751 | 17,888 | — | 121,835 | ||||||||||||||
Operating, administrative and general expenses | 67,590 | 10,014 | 22,883 | 9,788 | 110,275 | ||||||||||||||
Other income (loss), net | 16,886 | 683 | 309 | (4,072) | 13,806 | ||||||||||||||
Income (loss) before income taxes from continuing operations | 41,999 | (5,238) | (5,832) | (14,612) | 16,317 | ||||||||||||||
Income (loss) attributable to noncontrolling interests | — | (1,602) | — | — | (1,602) | ||||||||||||||
Income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | 41,999 | $ | (3,636) | $ | (5,832) | $ | (14,612) | $ | 17,919 | |||||||||
Adjustments to income (loss) before income taxes from continuing operations (b) | (14,376) | — | — | 2,784 | (11,592) | ||||||||||||||
Adjusted income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | 27,623 | $ | (3,636) | $ | (5,832) | $ | (11,828) | $ | 6,327 | |||||||||
Three months ended September 30, 2020 | |||||||||||||||||||
Sales and merchandising revenues | $ | 1,432,922 | $ | 349,957 | $ | 102,707 | $ | — | $ | 1,885,586 | |||||||||
Gross profit | 65,572 | 11,169 | 16,496 | — | 93,237 | ||||||||||||||
Operating, administrative and general expenses | 58,385 | 5,650 | 21,175 | 7,400 | 92,610 | ||||||||||||||
Other income (loss), net | 3,114 | 553 | 579 | (400) | 3,846 | ||||||||||||||
Income (loss) before income taxes from continuing operations | 5,941 | 4,421 | (5,387) | (7,335) | (2,360) | ||||||||||||||
Income (loss) attributable to noncontrolling interests | — | 3,273 | — | — | 3,273 | ||||||||||||||
Income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | 5,941 | $ | 1,148 | $ | (5,387) | $ | (7,335) | $ | (5,633) | |||||||||
Adjustments to income (loss) before income taxes from continuing operations (b) | 912 | — | — | 3,222 | 4,134 | ||||||||||||||
Adjusted income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | 6,853 | $ | 1,148 | $ | (5,387) | $ | (4,113) | $ | (1,499) | |||||||||
(a) Income (loss) from continuing operations 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) from continuing operations before income taxes can be found in the Reconciliation to EBITDA and Adjusted EBITDA table. |
The Andersons, Inc. | |||||||||||||||||||
Segment Data (continued) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
(in thousands) | Trade | Ethanol | PlantNutrient | Other | Total | ||||||||||||||
Nine months ended September 30, 2021 | |||||||||||||||||||
Sales and merchandising revenues | $ | 6,522,508 | $ | 1,674,123 | $ | 632,717 | $ | — | $ | 8,829,348 | |||||||||
Gross profit | 248,584 | 48,950 | 101,149 | — | 398,683 | ||||||||||||||
Operating, administrative and general expenses | 186,035 | 23,247 | 72,850 | 30,701 | 312,833 | ||||||||||||||
Other income (loss), net | 24,439 | 2,048 | 1,745 | (3,489) | 24,743 | ||||||||||||||
Income (loss) before income taxes from continuing operations | 69,631 | 21,999 | 26,686 | (34,182) | 84,134 | ||||||||||||||
Income (loss) attributable to noncontrolling interests | — | (822) | — | — | (822) | ||||||||||||||
Income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | 69,631 | $ | 22,821 | $ | 26,686 | $ | (34,182) | $ | 84,956 | |||||||||
Adjustments to income (loss) before income taxes from continuing operations (b) | (13,619) | — | — | 2,784 | (10,835) | ||||||||||||||
Adjusted income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | 56,012 | $ | 22,821 | $ | 26,686 | $ | (31,398) | $ | 74,121 | |||||||||
Nine months ended September 30, 2020 | |||||||||||||||||||
Sales and merchandising revenues | $ | 4,162,130 | $ | 886,742 | $ | 507,445 | $ | — | $ | 5,556,317 | |||||||||
Gross profit | 187,420 | (20,829) | 75,625 | — | 242,216 | ||||||||||||||
Operating, administrative and general expenses | 181,539 | 17,271 | 59,197 | 19,356 | 277,363 | ||||||||||||||
Other income (loss), net | 6,865 | 1,465 | 935 | 889 | 10,154 | ||||||||||||||
Income (loss) before income taxes from continuing operations | (3,650) | (42,543) | 12,828 | (17,351) | (50,716) | ||||||||||||||
Income (loss) attributable to noncontrolling interests | — | (20,583) | — | — | (20,583) | ||||||||||||||
Income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | (3,650) | $ | (21,960) | $ | 12,828 | $ | (17,351) | $ | (30,133) | |||||||||
Adjustments to income (loss) before income taxes from continuing operations (b) | 3,260 | — | — | 5,563 | 8,823 | ||||||||||||||
Adjusted income (loss) before income taxes from continuing operations attributable to The Andersons, Inc. (a) | $ | (390) | $ | (21,960) | $ | 12,828 | $ | (11,788) | $ | (21,310) | |||||||||
(a) Income (loss) from continuing operations 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) from continuing operations before income taxes can be found in the Reconciliation to EBITDA and Adjusted EBITDA table. |
The Andersons, Inc. | |||||||||||||||||||||||||||
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) | |||||||||||||||||||||||||||
A non-GAAP financial measure | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Continuing Operations | DiscontinuedOperations | TotalCompany | |||||||||||||||||||||||||
(in thousands) | Trade | Ethanol | PlantNutrient | Other | Total | Rail | |||||||||||||||||||||
Three months ended September 30, 2021 | |||||||||||||||||||||||||||
Net income (loss) | $ | 41,999 | $ | (5,238) | $ | (5,832) | $ | (18,639) | $ | 12,290 | $ | 1,846 | $ | 14,136 | |||||||||||||
Interest expense (income) | 5,243 | 1,658 | 1,146 | 752 | 8,799 | 2,139 | 10,938 | ||||||||||||||||||||
Tax provision (benefit) | — | — | — | 4,027 | 4,027 | (2,777) | 1,250 | ||||||||||||||||||||
Depreciation and amortization | 11,037 | 22,811 | 6,508 | 2,455 | 42,811 | 4,172 | 46,983 | ||||||||||||||||||||
EBITDA | 58,279 | 19,231 | 1,822 | (11,405) | 67,927 | 5,380 | 73,307 | ||||||||||||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||||||
Transaction related stock compensation | 243 | — | — | — | 243 | — | 243 | ||||||||||||||||||||
Gain on sale of a business | (14,619) | — | — | — | (14,619) | — | (14,619) | ||||||||||||||||||||
Loss on cost method investment | — | — | — | 2,784 | 2,784 | — | 2,784 | ||||||||||||||||||||
Total adjusting items | (14,376) | — | — | 2,784 | (11,592) | — | (11,592) | ||||||||||||||||||||
Adjusted EBITDA | $ | 43,903 | $ | 19,231 | $ | 1,822 | $ | (8,621) | $ | 56,335 | $ | 5,380 | $ | 61,715 | |||||||||||||
Three months ended September 30, 2020 | |||||||||||||||||||||||||||
Net income (loss) | $ | 5,941 | $ | 4,421 | $ | (5,387) | $ | (3,187) | $ | 1,788 | $ | 427 | $ | 2,215 | |||||||||||||
Interest expense (income) | 4,380 | 1,651 | 1,287 | (465) | 6,853 | 3,716 | 10,569 | ||||||||||||||||||||
Tax provision (benefit) | — | — | — | (4,148) | (4,148) | (566) | (4,714) | ||||||||||||||||||||
Depreciation and amortization | 11,079 | 18,282 | 6,316 | 2,710 | 38,387 | 8,882 | 47,269 | ||||||||||||||||||||
EBITDA | 21,400 | 24,354 | 2,216 | (5,090) | 42,880 | 12,459 | 55,339 | ||||||||||||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||||||
Transaction related stock compensation | 912 | — | — | — | 912 | — | 912 | ||||||||||||||||||||
Severance Costs | — | — | — | 3,222 | 3,222 | — | 3,222 | ||||||||||||||||||||
Total adjusting items | 912 | — | — | 3,222 | 4,134 | — | 4,134 | ||||||||||||||||||||
Adjusted EBITDA | $ | 22,312 | $ | 24,354 | $ | 2,216 | $ | (1,868) | $ | 47,014 | $ | 12,459 | $ | 59,473 | |||||||||||||
Continuing Operations | DiscontinuedOperations | TotalCompany | |||||||||||||||||||||||||
(in thousands) | Trade | Ethanol | PlantNutrient | Other | Total | Rail | |||||||||||||||||||||
Nine months ended September 30, 2021 | |||||||||||||||||||||||||||
Net income (loss) | $ | 69,631 | $ | 21,999 | $ | 26,686 | $ | (52,247) | $ | 66,069 | $ | 7,453 | $ | 73,522 | |||||||||||||
Interest expense (income) | 19,746 | 5,752 | 3,358 | (8) | 28,848 | 8,714 | 37,562 | ||||||||||||||||||||
Tax provision (benefit) | — | — | — | 18,065 | 18,065 | (428) | 17,637 | ||||||||||||||||||||
Depreciation and amortization | 33,317 | 60,608 | 19,345 | 7,107 | 120,377 | 21,760 | 142,137 | ||||||||||||||||||||
EBITDA | 122,694 | 88,359 | 49,389 | (27,083) | 233,359 | 37,499 | 270,858 | ||||||||||||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||||||
Transaction related stock compensation | 1,000 | — | — | — | 1,000 | — | 1,000 | ||||||||||||||||||||
Gain on sale of a business | (14,619) | — | — | — | (14,619) | — | (14,619) | ||||||||||||||||||||
Loss on cost method investment | — | — | — | 2,784 | 2,784 | — | 2,784 | ||||||||||||||||||||
Total adjusting items | (13,619) | — | — | 2,784 | (10,835) | — | (10,835) | ||||||||||||||||||||
Adjusted EBITDA | $ | 109,075 | $ | 88,359 | $ | 49,389 | $ | (24,299) | $ | 222,524 | $ | 37,499 | $ | 260,023 | |||||||||||||
Nine months ended September 30, 2020 | |||||||||||||||||||||||||||
Net income (loss) | $ | (3,650) | $ | (42,543) | $ | 12,828 | $ | 1,277 | $ | (32,088) | $ | 3,224 | $ | (28,864) | |||||||||||||
Interest expense (income) | 16,624 | 5,908 | 4,535 | (1,116) | 25,951 | 12,032 | 37,983 | ||||||||||||||||||||
Tax provision (benefit) | — | — | — | (18,628) | (18,628) | 250 | (18,378) | ||||||||||||||||||||
Depreciation and amortization | 33,478 | 53,786 | 19,021 | 8,212 | 114,497 | 26,670 | 141,167 | ||||||||||||||||||||
EBITDA | 46,452 | 17,151 | 36,384 | (10,255) | 89,732 | 42,176 | 131,908 | ||||||||||||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||||||||||
Transaction related stock compensation | 3,260 | — | — | — | 3,260 | — | 3,260 | ||||||||||||||||||||
Severance Costs | — | — | — | 5,563 | 5,563 | — | 5,563 | ||||||||||||||||||||
Total adjusting items | 3,260 | — | — | 5,563 | 8,823 | — | 8,823 | ||||||||||||||||||||
Adjusted EBITDA | $ | 49,712 | $ | 17,151 | $ | 36,384 | $ | (4,692) | $ | 98,555 | $ | 42,176 | $ | 140,731 | |||||||||||||
The Andersons, Inc. | |||||||||||||||||||
Trailing Twelve Months of EBITDA and Adjusted EBITDA | |||||||||||||||||||
A non-GAAP financial measure | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended, | Twelve monthsended September 30,2021 | ||||||||||||||||||
(in thousands) | December 31,2020 | March 31,2021 | June 30,2021 | September 30,2021 | |||||||||||||||
Net income (loss) from continuing operations | $ | 15,917 | $ | 9,755 | $ | 44,024 | $ | 12,290 | $ | 81,986 | |||||||||
Interest expense (income) | 7,833 | 9,989 | 10,060 | 8,799 | 36,681 | ||||||||||||||
Tax provision (benefit) | 7,718 | 4,361 | 9,677 | 4,027 | 25,783 | ||||||||||||||
Depreciation and amortization | 38,568 | 38,617 | 38,949 | 42,811 | 158,945 | ||||||||||||||
EBITDA | 70,036 | 62,722 | 102,710 | 67,927 | 303,395 | ||||||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||
Transaction related stock compensation | 946 | 483 | 274 | 243 | 1,946 | ||||||||||||||
Gain on sale of a business | — | — | — | (14,619) | (14,619) | ||||||||||||||
Loss from cost method investment | — | — | — | 2,784 | 2,784 | ||||||||||||||
Severance Costs | 528 | — | — | — | 528 | ||||||||||||||
Total adjusting items | 1,474 | 483 | 274 | (11,592) | (9,361) | ||||||||||||||
Adjusted EBITDA | $ | 71,510 | $ | 63,205 | $ | 102,984 | $ | 56,335 | $ | 294,034 | |||||||||
Three Months Ended, | Twelve monthsended September 30,2020 | ||||||||||||||||||
December 31,2019 | March 31,2020 | June 30,2020 | September 30,2020 | ||||||||||||||||
Net income (loss) from continuing operations | $ | 1,206 | $ | (44,166) | $ | 10,290 | $ | 1,788 | $ | (30,882) | |||||||||
Interest expense (income) | 9,663 | 11,104 | 7,994 | 6,853 | 35,614 | ||||||||||||||
Tax provision (benefit) | 13,593 | (9,416) | (5,064) | (4,148) | (5,035) | ||||||||||||||
Depreciation and amortization | 39,025 | 37,982 | 38,128 | 38,387 | 153,522 | ||||||||||||||
EBITDA | 63,487 | (4,496) | 51,348 | 42,880 | 153,219 | ||||||||||||||
Adjusting items impacting EBITDA: | |||||||||||||||||||
Transaction related stock compensation | 1,998 | 1,331 | 1,017 | 912 | 5,258 | ||||||||||||||
Acquisition costs | 2,158 | — | — | — | 2,158 | ||||||||||||||
Asset impairments including equity method investments | 43,097 | — | — | — | 43,097 | ||||||||||||||
Loss from remeasurement of equity method investment | (36,287) | — | — | — | (36,287) | ||||||||||||||
Gain on sales of assets | (8,646) | — | — | — | (8,646) | ||||||||||||||
Severance Costs | — | — | 2,341 | 3,222 | 5,563 | ||||||||||||||
Total adjusting items | 2,320 | 1,331 | 3,358 | 4,134 | 11,143 | ||||||||||||||
Adjusted EBITDA | $ | 65,807 | $ | (3,165) | $ | 54,706 | $ | 47,014 | $ | 164,362 | |||||||||
The Andersons, Inc. | |||||||||||||||
Cash from Operations Before Working Capital Changes | |||||||||||||||
A non-GAAP financial measure | |||||||||||||||
(unaudited) | |||||||||||||||
Three months endedSeptember 30, | Nine months endedSeptember 30, | ||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Cash provided by (used in) operating activities | $ | 364,561 | $ | 50,280 | $ | 119,067 | $ | 195,791 | |||||||
Changes in operating assets and liabilities | |||||||||||||||
Accounts receivable | (31,564) | 7,229 | (89,902) | (1,952) | |||||||||||
Inventories | (123,641) | (136,689) | 266,865 | 400,262 | |||||||||||
Commodity derivatives | 91,950 | (17,554) | (158,741) | (2,574) | |||||||||||
Other assets | (38,925) | (9,559) | (3,357) | (34,343) | |||||||||||
Payables and other accrued expenses | 506,224 | 152,202 | (10,659) | (329,422) | |||||||||||
Total changes in operating assets and liabilities | 404,044 | (4,371) | 4,206 | 31,971 | |||||||||||
Adjusting items impacting cash from operations before working capital changes: | |||||||||||||||
Changes in CARES Act tax refund receivable | — | (1,870) | 27,697 | (37,564) | |||||||||||
Changes in deferred income taxes as a result of the Rail leasing sale | 95,097 | — | 95,097 | — | |||||||||||
Cash from operations before working capital changes | $ | 55,614 | $ | 52,781 | $ | 237,655 | $ | 126,256 | |||||||
Cash from operations before working capital changes is defined as cash provided by (used in) operating activities before the impact of changes in working capital within the statement of cash flows. The Company calculates cash from operations by eliminating the effect of changes in accounts receivable, inventories, commodity derivatives, other assets, and payables and accrued expenses from the cash provided by (used in) operating activities. Management believes that cash from operations before working capital changes is a useful measure of the company's performance as it provides investors additional information about the company's operations allowing better evaluation of underlying business performance and improved comparability to prior periods. Cash from operations before working capital changes is a non-GAAP financial measure and is not intended to replace or be an alternative to cash provided by (used in) operating activities, the most directly comparable GAAP financial measure. |
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SOURCE The Andersons, Inc.