The Andersons, Inc. Reports Third Quarter Results
MAUMEE, Ohio, Nov. 7, 2023 /PRNewswire/ -- The Andersons, Inc. (Nasdaq: ANDE) announces financial results for the third quarter ended September 30, 2023.
Third Quarter Highlights:
- Company reported net income attributable to The Andersons of $10 million, or $0.28 per diluted share and adjusted net income of $5 million, or $0.13 per diluted share
- Adjusted EBITDA was $70 million for the quarter
- Expect full year adjusted EBITDA to achieve previous expectations of $350-$375 million
- Renewables reported record Q3 pretax income of $47 million and record pretax income attributable to The Andersons of $26 million on strong operations and industry fundamentals
"Our third quarter includes record results from our Renewables team with great operating performance in our ethanol plants, a strong margin environment and good results from our renewable diesel feedstock merchandising team. We had solid core operating performance in our Trade segment which was offset by a currency loss in our international business. Lastly, our Nutrient & Industrial segment's third quarter, which is typically a loss in this seasonally slow period, had year over year improvements in both its ag and manufacturing businesses," said President and CEO Pat Bowe. "We remain confident about the balance of the year and expect to achieve our previously communicated full year adjusted EBITDA outlook of $350-$375 million."
"We continue to make good progress against our growth strategy. Our third quarter acquisition of ACJ International, a pet food ingredient supplier, contributed positively to these results. We are pleased with this complementary addition to our core grain and fertilizer verticals," continued Bowe. "We are actively pursuing opportunities for growth in our Renewables business. These opportunities include expansion of our renewable diesel feedstock merchandising business and investments to lower the carbon intensity of our ethanol plants. With our well-positioned balance sheet, we have good capacity for growth."
$ in millions, except per share amounts | ||||||
Q3 2023 | Q3 2022 | Variance | YTD 2023 | YTD 2022 | Variance | |
Pretax Income from Continuing Operations | $ 38.4 | $ 34.7 | $ 3.7 | $ 77.8 | $ 163.5 | $ (85.7) |
Pretax Income from Continuing Operations | 17.6 | 27.2 | (9.6) | 73.7 | 133.7 | (60.0) |
Adjusted Pretax Income (Loss) from | 10.1 | 27.2 | (17.1) | 90.7 | 134.3 | (43.6) |
Trade1 | 5.4 | 40.7 | (35.3) | 36.3 | 68.7 | (32.4) |
Renewables1 | 26.3 | 8.4 | 17.9 | 65.0 | 59.8 | 5.2 |
Nutrient & Industrial | (8.5) | (11.6) | 3.1 | 23.7 | 37.4 | (13.7) |
Other1 | (13.1) | (10.2) | (2.9) | (34.3) | (31.6) | (2.7) |
Net Income from Continuing Operations | 9.7 | 17.4 | (7.7) | 50.0 | 104.0 | (54.0) |
Adjusted Net Income from Continuing | 4.6 | 17.4 | (12.8) | 63.7 | 105.6 | (41.9) |
Diluted Earnings Per Share from Continuing | 0.28 | 0.50 | (0.22) | 1.46 | 3.02 | (1.56) |
Adjusted Diluted Earnings Per Share from | 0.13 | 0.50 | (0.37) | 1.86 | 3.07 | (1.21) |
EBITDA from Continuing Operations1 | 77.8 | 83.0 | (5.2) | 210.4 | 307.5 | (97.1) |
Adjusted EBITDA from Continuing | $ 70.3 | $ 83.0 | $ (12.7) | $ 270.0 | $ 308.2 | $ (38.2) |
1 Non-GAAP financial measures; see appendix for explanations and reconciliations. | ||||||
Cash, Liquidity, and Long-Term Debt Management
"Our businesses continue to generate strong cash flows," said Executive Vice President and CFO Brian Valentine. "Although we typically finance working capital with short-term borrowings, we ended the quarter with more than $400 million in cash and very little short-term debt due to strong cash flows and reduced commodity prices. We remain well below our long-term debt to EBITDA target of less than 2.5 times and are pleased with the strength of our balance sheet. We have meaningful capacity for growth and continue our disciplined approach to evaluating projects that fall within our stated strategy and meet our required financial hurdles."
The company generated $489 million and $568 million in cash from operating activities for the third quarters of 2023 and 2022, respectively, and cash from operations before working capital changes was comparable to the same period of the prior year. Included in our investing activities are several strategic growth projects along with normal spending to maintain our facilities.
Third Quarter Segment Overview
Trade Underlying Fundamentals Remain Solid
The Trade segment recorded pretax income of $8 million and adjusted pretax income of $5 million for the quarter compared to pretax income of $41 million in the third quarter of 2022.
Aggregate results for most of our product lines were comparable to the strong third quarter of 2022. Our asset business benefited from another solid Louisiana harvest and strong space income after a very large soft wheat harvest. Underlying merchandising fundamentals were solid; however, earnings were negatively impacted by a $19 million pretax loss ($0.43 per share) in Egypt. While we sell in U.S. dollars, given the unusual currency liquidity issues being experienced by our customers in Egypt, we accepted a lower exchange rate for previously delivered product.
The Trade business remains focused on domestic grain flows and is less impacted by slowdowns in U.S. exports. With the large and ongoing U.S. harvest, our assets are well-positioned to accumulate, condition and store large quantities of grain. In this harvest, we expect drying income due to receipts of higher moisture corn. Trade is also receiving increased storage rates including Variable Storage Rates (VSR) in wheat. With increased domestic supply, the merchandising focus will continue to be on serving customers and opportunistic arbitrage.
Renewables had a Record Third Quarter; Strong Operational Results and Industry Fundamentals
The Renewables segment reported record pretax income of $47 million and pretax income attributable to the company of $26 million in the third quarter. For the same period in 2022, the segment reported pretax income of $16 million and pretax income attributable to the company of $8 million.
Ethanol crush margins were outstanding throughout the quarter, and the current margin outlook remains strong. Production facilities operated efficiently in the quarter with improved ethanol yield and lower operating costs than the comparable quarter in 2022. Results from the merchandising businesses, including renewable diesel feedstocks, exceeded our third quarter 2022 results by nearly $5 million. The three large eastern plants completed their semi-annual maintenance shutdowns in the third quarter and the western plant completed shortly thereafter. Board crush values remain historically high into the fourth quarter.
Nutrient & Industrial Ag Businesses Recover on Improved Margin
The Nutrient & Industrial segment posted a pretax loss of $8 million, compared to a 2022 third quarter pretax loss of $12 million. During this seasonally slow period, volumes were down 6% with an overall increase in margins. Gross profit improved by $4 million and reflects these higher margins partially offset by the volume decline. The Sioux City specialty liquid plant was impacted by a rail service interruption which had an impact on volumes for approximately one month. Outlook for the fourth quarter remains solid.
Income Taxes; Corporate
The company recorded income tax expense at an effective rate of 20% for the quarter due to the tax treatment of non-controlling interests. We anticipate a full-year adjusted effective rate of approximately 21% - 24%.
Conference Call
The company will host a webcast on Wednesday, November 8, 2023, at 11 a.m. Eastern Time, to discuss its performance and provide its outlook for the remainder of 2023. To access the call, please dial 888-317-6003 or 412-317-6061 (elite entry number is 6326280). It is recommended that you call 10 minutes before the conference call begins.
To access the webcast, click on the link: https://app.webinar.net/RLX7mgJ2YKE and submit the requested information as directed. 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, geopolitical risk, 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 (loss) from continuing operations attributable to the company; adjusted pretax income (loss) from continuing operations attributable to the company; adjusted pretax income (loss) from continuing operations; adjusted net income from continuing operations attributable to the company; 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 pretax income from continuing operations or income (loss) before income taxes from continuing operations, net income 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
The Andersons, Inc., named to Forbes list of America's Best Small Companies for 2023 and one of America's Greatest Workplaces for Diversity 2023 by Newsweek®, is a diversified company rooted in agriculture that conducts business in the commodity merchandising, renewables, and nutrient and industrial sectors. Guided by its Statement of Principles, The Andersons is committed to providing extraordinary service to its customers, helping its employees improve, supporting its communities, and increasing the value of the company. For more information, please visit www.andersonsinc.com.
The Andersons, Inc. | |||||||
Three months ended | Nine months ended | ||||||
(in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | |||
Sales and merchandising revenues | $ 3,635,691 | $ 4,219,325 | $ 11,537,112 | $ 12,647,896 | |||
Cost of sales and merchandising revenues | 3,477,990 | 4,055,560 | 11,009,463 | 12,133,755 | |||
Gross profit | 157,701 | 163,765 | 527,649 | 514,141 | |||
Operating, administrative and general expenses | 126,306 | 115,539 | 359,548 | 330,085 | |||
Asset impairment | — | — | 87,156 | — | |||
Interest expense, net | 8,188 | 14,982 | 38,766 | 42,762 | |||
Other income, net | 15,178 | 1,475 | 35,623 | 22,185 | |||
Income before income taxes from continuing operations | 38,385 | 34,719 | 77,802 | 163,479 | |||
Income tax provision from continuing operations | 7,862 | 9,839 | 23,710 | 29,695 | |||
Net income from continuing operations | 30,523 | 24,880 | 54,092 | 133,784 | |||
Income from discontinued operations, net of income taxes | — | 19,392 | — | 18,099 | |||
Net income | 30,523 | 44,272 | 54,092 | 151,883 | |||
Net income attributable to noncontrolling interests | 20,815 | 7,524 | 4,088 | 29,827 | |||
Net income attributable to The Andersons, Inc. | $ 9,708 | $ 36,748 | $ 50,004 | $ 122,056 | |||
Earnings per share attributable to The Andersons, Inc. common | |||||||
Basic earnings: | |||||||
Continuing operations | $ 0.29 | $ 0.51 | $ 1.48 | $ 3.08 | |||
Discontinued operations | — | 0.57 | — | 0.54 | |||
$ 0.29 | $ 1.08 | $ 1.48 | $ 3.62 | ||||
Diluted earnings: | |||||||
Continuing operations | $ 0.28 | $ 0.50 | $ 1.46 | $ 3.02 | |||
Discontinued operations | — | 0.56 | — | 0.53 | |||
$ 0.28 | $ 1.06 | $ 1.46 | $ 3.55 | ||||
The Andersons, Inc. | |||||
(in thousands) | September 30, 2023 | December 31, 2022 | September 30, 2022 | ||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 418,055 | $ 115,269 | $ 140,771 | ||
Accounts receivable, net | 816,686 | 1,248,878 | 990,531 | ||
Inventories | 985,292 | 1,731,725 | 1,556,426 | ||
Commodity derivative assets – current | 239,595 | 295,588 | 502,097 | ||
Other current assets | 67,471 | 74,493 | 75,402 | ||
Total current assets | 2,527,099 | 3,465,953 | 3,265,227 | ||
Other assets: | |||||
Goodwill | 128,542 | 129,342 | 129,342 | ||
Other intangible assets, net | 90,768 | 100,907 | 99,317 | ||
Right of use assets, net | 56,919 | 61,890 | 59,146 | ||
Other assets, net | 104,586 | 87,175 | 99,650 | ||
Total other assets | 380,815 | 379,314 | 387,455 | ||
Property, plant and equipment, net | 680,188 | 762,729 | 765,939 | ||
Total assets | $ 3,588,102 | $ 4,607,996 | $ 4,418,621 | ||
Liabilities and equity | |||||
Current liabilities: | |||||
Short-term debt | $ 14,138 | $ 272,575 | $ 652,947 | ||
Trade and other payables | 822,153 | 1,423,633 | 930,027 | ||
Customer prepayments and deferred revenue | 211,867 | 370,524 | 258,828 | ||
Commodity derivative liabilities – current | 142,511 | 98,519 | 137,168 | ||
Current maturities of long-term debt | 27,535 | 110,155 | 112,029 | ||
Accrued expenses and other current liabilities | 189,430 | 245,916 | 229,508 | ||
Total current liabilities | 1,407,634 | 2,521,322 | 2,320,507 | ||
Long-term lease liabilities | 32,883 | 37,147 | 34,779 | ||
Long-term debt, less current maturities | 569,730 | 492,518 | 497,988 | ||
Deferred income taxes | 58,217 | 64,080 | 59,079 | ||
Other long-term liabilities | 70,552 | 63,160 | 79,727 | ||
Total liabilities | 2,139,016 | 3,178,227 | 2,992,080 | ||
Total equity | 1,449,086 | 1,429,769 | 1,426,541 | ||
Total liabilities and equity | $ 3,588,102 | $ 4,607,996 | $ 4,418,621 | ||
The Andersons, Inc. | |||
Nine months ended September 30, | |||
(in thousands) | 2023 | 2022 | |
Operating Activities | |||
Net income from continuing operations | $ 54,092 | $ 133,784 | |
Income from discontinued operations, net of income taxes | — | 18,099 | |
Net income | 54,092 | 151,883 | |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | |||
Depreciation and amortization | 93,800 | 101,266 | |
Gain on sale of business from discontinued operations | — | (27,091) | |
Asset impairment | 87,156 | — | |
Other | 1,347 | (1,296) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 406,263 | (140,866) | |
Inventories | 748,118 | 236,854 | |
Commodity derivatives | 99,479 | (104,901) | |
Other current and non-current assets | 2,048 | 2,000 | |
Payables and other current and non-current liabilities | (796,216) | (371,219) | |
Net cash provided by (used in) operating activities | 696,087 | (153,370) | |
Investing Activities | |||
Acquisition of businesses, net of cash acquired | (24,385) | — | |
Purchases of property, plant and equipment and capitalized software | (108,718) | (72,247) | |
Proceeds from sale of assets | 3,082 | 4,810 | |
Proceeds from sale of business from continuing operations | 10,318 | 5,171 | |
Proceeds from sale of business from discontinued operations | — | 56,302 | |
Purchases of Rail assets | — | (27,464) | |
Proceeds from sale of Rail assets | 2,871 | 36,706 | |
Other | (431) | (359) | |
Net cash (used in) provided by investing activities | (117,263) | 2,919 | |
Financing Activities | |||
Net receipts (payments) under short-term lines of credit | (261,152) | 361,318 | |
Proceeds from issuance of short-term debt | — | 350,000 | |
Payments of short-term debt | — | (550,000) | |
Proceeds from issuance of long-term debt | 100,000 | — | |
Payments of long-term debt | (42,734) | (22,585) | |
Contributions from noncontrolling interest owner | — | 2,450 | |
Distributions to noncontrolling interest owner | (44,304) | (34,930) | |
Payments of debt issuance costs | (769) | (7,802) | |
Dividends paid | (18,771) | (18,262) | |
Proceeds from exercises of stock options | — | 5,024 | |
Common stock repurchased | (1,747) | (6,769) | |
Value of shares withheld for taxes | (6,627) | (3,349) | |
Other | 258 | 394 | |
Net cash (used in) provided by financing activities | (275,846) | 75,489 | |
Effect of exchange rates on cash and cash equivalents | (192) | (711) | |
Increase (decrease) in cash and cash equivalents | 302,786 | (75,673) | |
Cash and cash equivalents at beginning of period | 115,269 | 216,444 | |
Cash and cash equivalents at end of period | $ 418,055 | $ 140,771 | |
The Andersons, Inc. | |||||||
Three months ended | Nine months ended | ||||||
(in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | |||
Net income from continuing operations | $ 30,523 | $ 24,880 | $ 54,092 | $ 133,784 | |||
Net income attributable to noncontrolling interests | 20,815 | 7,524 | 4,088 | 29,827 | |||
Net income from continuing operations attributable to The Andersons, Inc. | 9,708 | 17,356 | 50,004 | 103,957 | |||
Adjustments: | |||||||
Gain on sale of assets | (5,643) | — | (5,643) | (3,762) | |||
Gain on cost method investment | (4,798) | — | (4,798) | — | |||
Transaction related compensation | 1,999 | — | 4,606 | — | |||
Gain on deconsolidation of joint venture | — | — | (6,544) | — | |||
Insured inventory recoveries | — | — | (16,080) | — | |||
Asset impairment including equity method investments | 963 | — | 45,413 | 4,455 | |||
Income tax impact of adjustments1 | 2,367 | — | (3,255) | 940 | |||
Total adjusting items, net of tax | (5,112) | — | 13,699 | 1,633 | |||
Adjusted net income from continuing operations attributable to The | $ 4,596 | $ 17,356 | $ 63,703 | $ 105,590 | |||
Diluted earnings per share from continuing operations attributable to The | $ 0.28 | $ 0.50 | $ 1.46 | $ 3.02 | |||
Impact on diluted earnings (loss) per share from continuing operations | $ (0.15) | $ — | $ 0.40 | $ 0.05 | |||
Adjusted diluted earnings per share from continuing operations | $ 0.13 | $ 0.50 | $ 1.86 | $ 3.07 | |||
1 The income tax impact of adjustments is taken at the statutory tax rate of 25% with the exception of certain transaction related compensation and impairments of equity method investments in both 2023 and 2022, 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 from continuing operations attributable to The Andersons, Inc. and Diluted earnings per share from continuing operations 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. | |||||||||
(in thousands) | Trade | Renewables | Nutrient & | Other | Total | ||||
Three months ended September 30, 2023 | |||||||||
Sales and merchandising revenues | $ 2,639,059 | $ 868,099 | $ 128,533 | $ — | $ 3,635,691 | ||||
Gross profit | 85,997 | 53,045 | 18,659 | — | 157,701 | ||||
Operating, administrative and general expenses | 79,247 | 8,332 | 26,233 | 12,494 | 126,306 | ||||
Other income, net | 7,838 | 3,346 | 606 | 3,388 | 15,178 | ||||
Income (loss) before income taxes from continuing operations | 8,073 | 47,096 | (8,452) | (8,332) | 38,385 | ||||
Income attributable to noncontrolling interests | — | 20,815 | — | — | 20,815 | ||||
Income (loss) before income taxes from continuing operations | $ 8,073 | $ 26,281 | $ (8,452) | $ (8,332) | $ 17,570 | ||||
Adjustments to income (loss) before income taxes from | (2,681) | — | — | (4,798) | (7,479) | ||||
Adjusted income (loss) before income taxes from continuing | $ 5,392 | $ 26,281 | $ (8,452) | $ (13,130) | $ 10,091 | ||||
Three months ended September 30, 2022 | |||||||||
Sales and merchandising revenues | $ 3,240,526 | $ 814,923 | $ 163,876 | $ — | $ 4,219,325 | ||||
Gross profit | 124,368 | 24,677 | 14,720 | — | 163,765 | ||||
Operating, administrative and general expenses | 73,347 | 7,053 | 25,427 | 9,712 | 115,539 | ||||
Other income (loss), net | 419 | 832 | 1,018 | (794) | 1,475 | ||||
Income (loss) before income taxes from continuing operations | 40,658 | 15,901 | (11,609) | (10,231) | 34,719 | ||||
Income attributable to noncontrolling interests | — | 7,524 | — | — | 7,524 | ||||
Income (loss) before income taxes from continuing operations | $ 40,658 | $ 8,377 | $ (11,609) | $ (10,231) | $ 27,195 | ||||
1 Income (loss) from continuing operations before income taxes attributable to The Andersons, Inc. for each operating segment is defined as net sales and 2 Additional information on the individual adjustments that are included in the adjustments to income (loss) from continuing operations before income taxes | |||||||||
The Andersons, Inc. | |||||||||
(in thousands) | Trade | Renewables | Nutrient & | Other | Total | ||||
Nine months ended September 30, 2023 | |||||||||
Sales and merchandising revenues | $ 8,213,649 | $ 2,585,396 | $ 738,067 | $ — | $ 11,537,112 | ||||
Gross profit | 283,886 | 137,140 | 106,623 | — | 527,649 | ||||
Operating, administrative and general expenses | 220,373 | 24,804 | 79,251 | 35,120 | 359,548 | ||||
Other income, net | 18,149 | 11,655 | 1,952 | 3,867 | 35,623 | ||||
Income (loss) before income taxes from continuing operations | 52,427 | 31,187 | 23,675 | (29,487) | 77,802 | ||||
Income attributable to noncontrolling interests | — | 4,088 | — | — | 4,088 | ||||
Income (loss) before income taxes from continuing operations | $ 52,427 | $ 27,099 | $ 23,675 | $ (29,487) | $ 73,714 | ||||
Adjustments to income (loss) before income taxes from | (16,154) | 37,906 | — | (4,798) | 16,954 | ||||
Adjusted income (loss) before income taxes from continuing | $ 36,273 | $ 65,005 | $ 23,675 | $ (34,285) | $ 90,668 | ||||
Nine months ended September 30, 2022 | |||||||||
Sales and merchandising revenues | $ 9,422,974 | $ 2,380,721 | $ 844,201 | $ — | $ 12,647,896 | ||||
Gross profit | 293,981 | 99,756 | 120,404 | — | 514,141 | ||||
Operating, administrative and general expenses | 195,867 | 23,533 | 80,343 | 30,342 | 330,085 | ||||
Other income (loss), net | 2,148 | 19,750 | 2,688 | (2,401) | 22,185 | ||||
Income (loss) before income taxes from continuing operations | 67,993 | 89,639 | 37,445 | (31,598) | 163,479 | ||||
Income attributable to noncontrolling interests | — | 29,827 | — | — | 29,827 | ||||
Income (loss) before income taxes from continuing operations | $ 67,993 | $ 59,812 | $ 37,445 | $ (31,598) | $ 133,652 | ||||
Adjustments to income before income taxes from continuing | 693 | — | — | — | 693 | ||||
Adjusted income (loss) before income taxes from continuing | $ 68,686 | $ 59,812 | $ 37,445 | $ (31,598) | $ 134,345 | ||||
1 Income (loss) from continuing operations before income taxes attributable to The Andersons, Inc. for each operating segment is defined as net sales and 2 Additional information on the individual adjustments that are included in the adjustments to income (loss) from continuing operations before income taxes | |||||||||
The Andersons, Inc. | |||||||||
(in thousands) | Trade | Renewables | Nutrient & | Other | Total | ||||
Three months ended September 30, 2023 | |||||||||
Net income (loss)1 | $ 8,073 | $ 47,096 | $ (8,452) | $ (16,194) | $ 30,523 | ||||
Interest expense (income) | 6,515 | 963 | 1,484 | (774) | 8,188 | ||||
Tax provision | — | — | — | 7,862 | 7,862 | ||||
Depreciation and amortization | 9,331 | 12,328 | 7,464 | 2,092 | 31,215 | ||||
EBITDA1 | 23,919 | 60,387 | 496 | (7,014) | 77,788 | ||||
Adjusting items impacting EBITDA: | |||||||||
Transaction related compensation | 1,999 | — | — | — | 1,999 | ||||
Gain on cost method investment | — | — | — | (4,798) | (4,798) | ||||
Gain on sale of assets | (5,643) | — | — | — | (5,643) | ||||
Impairment on equity method investment | 963 | — | — | — | 963 | ||||
Total adjusting items | (2,681) | — | — | (4,798) | (7,479) | ||||
Adjusted EBITDA1 | $ 21,238 | $ 60,387 | $ 496 | $ (11,812) | $ 70,309 | ||||
Three months ended September 30, 2022 | |||||||||
Net income (loss) from continuing operations | $ 40,658 | $ 15,901 | $ (11,609) | $ (20,070) | $ 24,880 | ||||
Interest expense (income) | 10,782 | 2,555 | 1,920 | (275) | 14,982 | ||||
Tax provision | — | — | — | 9,839 | 9,839 | ||||
Depreciation and amortization | 9,011 | 15,501 | 6,626 | 2,184 | 33,322 | ||||
EBITDA from continuing operations | $ 60,451 | $ 33,957 | $ (3,063) | $ (8,322) | $ 83,023 | ||||
1 Amounts for the three months ended September 30, 2023, contain no activity from discontinued operations. As such, references to EBITDA and EBITDA from continuing operations, as well as, Adjusted EBITDA and Adjusted EBITDA from continuing operations will yield the same results for the three months ended September 30, 2023. |
Adjusted EBITDA is defined as earnings before interest, taxes and depreciation and amortization, adjusted for specified items. The company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense, tax expense and depreciation and amortization to net income (loss). Management believes that adjusted EBITDA 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. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to net income (loss), the most directly comparable GAAP financial measure. |
The Andersons, Inc. | |||||||||
(in thousands) | Trade | Renewables | Nutrient & | Other | Total | ||||
Nine months ended September 30, 2023 | |||||||||
Net income (loss)1 | $ 52,427 | $ 31,187 | $ 23,675 | $ (53,197) | $ 54,092 | ||||
Interest expense (income) | 29,235 | 5,648 | 5,649 | (1,766) | 38,766 | ||||
Tax provision | — | — | — | 23,710 | 23,710 | ||||
Depreciation and amortization | 26,659 | 39,224 | 21,518 | 6,399 | 93,800 | ||||
EBITDA1 | 108,321 | 76,059 | 50,842 | (24,854) | 210,368 | ||||
Adjusting items impacting EBITDA: | |||||||||
Transaction related compensation | 4,606 | — | — | — | 4,606 | ||||
Insured inventory recoveries | (16,080) | — | — | — | (16,080) | ||||
Gain on sale of assets | (5,643) | — | — | — | (5,643) | ||||
Gain on cost method investment | — | — | — | (4,798) | (4,798) | ||||
Asset impairment including equity method | 963 | 87,156 | — | — | 88,119 | ||||
Gain on deconsolidation of joint venture | — | (6,544) | — | — | (6,544) | ||||
Total adjusting items | (16,154) | 80,612 | — | (4,798) | 59,660 | ||||
Adjusted EBITDA1 | $ 92,167 | $ 156,671 | $ 50,842 | $ (29,652) | $ 270,028 | ||||
Nine months ended September 30, 2022 | |||||||||
Net income (loss) from continuing operations | $ 67,993 | $ 89,639 | $ 37,445 | $ (61,293) | $ 133,784 | ||||
Interest expense (income) | 32,269 | 6,334 | 5,304 | (1,145) | 42,762 | ||||
Tax provision | — | — | — | 29,695 | 29,695 | ||||
Depreciation and amortization | 26,899 | 48,015 | 19,800 | 6,552 | 101,266 | ||||
EBITDA from continuing operations | 127,161 | 143,988 | 62,549 | (26,191) | 307,507 | ||||
Adjusting items impacting EBITDA: | |||||||||
Gain on sale of assets | (3,762) | — | — | — | (3,762) | ||||
Impairment on equity method investment | 4,455 | — | — | — | 4,455 | ||||
Total adjusting items | 693 | — | — | — | 693 | ||||
Adjusted EBITDA from continuing operations | $ 127,854 | $ 143,988 | $ 62,549 | $ (26,191) | $ 308,200 | ||||
1 Amounts for the nine months ended September 30, 2023, contain no activity from discontinued operations. As such, references to EBITDA and EBITDA from continuing operations, as well as, Adjusted EBITDA and Adjusted EBITDA from continuing operations will yield the same results for the nine months ended September 30, 2023. |
Adjusted EBITDA is defined as earnings before interest, taxes and depreciation and amortization, adjusted for specified items. The company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of interest expense, tax expense and depreciation and amortization to net income (loss). Management believes that adjusted EBITDA 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. Adjusted EBITDA is a non-GAAP financial measure and is not intended to replace or be an alternative to net income (loss), the most directly comparable GAAP financial measure. |
The Andersons, Inc. | |||||||||
Three Months Ended, | Twelve months ended | ||||||||
(in thousands) | December 31, | March 31, | June 30, | September 30, | |||||
Net income (loss) from continuing operations | $ 21,170 | $ (59,117) | $ 82,686 | $ 30,523 | $ 75,262 | ||||
Interest expense | 14,087 | 16,625 | 13,953 | 8,188 | 52,853 | ||||
Tax provision (benefit) | 9,933 | (5,884) | 21,732 | 7,862 | 33,643 | ||||
Depreciation and amortization | 33,476 | 32,220 | 30,365 | 31,215 | 127,276 | ||||
EBITDA from continuing operations | 78,666 | (16,156) | 148,736 | 77,788 | 289,034 | ||||
Adjusting items impacting EBITDA from | |||||||||
Transaction related compensation expense | — | 1,668 | 939 | 1,999 | 4,606 | ||||
Gain on sale of assets | — | — | — | (5,643) | (5,643) | ||||
Gain on cost method investment | — | — | — | (4,798) | (4,798) | ||||
Asset impairment including equity | 9,000 | 87,156 | — | 963 | 97,119 | ||||
Insured inventory expenses (recoveries) | 15,993 | (17,390) | 1,310 | — | (87) | ||||
Gain on deconsolidation of joint venture | — | — | (6,544) | — | (6,544) | ||||
Total adjusting items | 24,993 | 71,434 | (4,295) | (7,479) | 84,653 | ||||
Adjusted EBITDA from continuing operations | $ 103,659 | $ 55,278 | $ 144,441 | $ 70,309 | $ 373,687 | ||||
Three Months Ended, | Twelve months ended | ||||||||
December 31, | March 31, | June 30, | September 30, | ||||||
Net income from continuing operations | $ 65,473 | $ 6,504 | $ 102,400 | $ 24,880 | $ 199,257 | ||||
Interest expense | 8,444 | 10,859 | 16,921 | 14,982 | 51,206 | ||||
Tax provision | 11,163 | 4,103 | 15,753 | 9,839 | 40,858 | ||||
Depreciation and amortization | 36,797 | 34,377 | 33,567 | 33,322 | 138,063 | ||||
EBITDA from continuing operations | 121,877 | 55,843 | 168,641 | 83,023 | 429,384 | ||||
Adjusting items impacting EBITDA from | |||||||||
Transaction related compensation expense | 274 | — | — | — | 274 | ||||
Asset impairments including equity | 8,321 | — | 4,455 | — | 12,776 | ||||
Gain on sales of assets | — | — | (3,762) | — | (3,762) | ||||
Total adjusting items | 8,595 | — | 693 | — | 9,288 | ||||
Adjusted EBITDA from continuing operations | $ 130,472 | $ 55,843 | $ 169,334 | $ 83,023 | $ 438,672 | ||||
The Andersons, Inc. | |||||||
Three months ended | Nine months ended | ||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||
Cash provided by (used in) operating activities | $ 488,683 | $ 568,429 | $ 696,087 | $ (153,370) | |||
Changes in operating assets and liabilities | |||||||
Accounts receivable | 198,396 | 148,330 | 406,263 | (140,866) | |||
Inventories | 13,263 | 50,169 | 748,118 | 236,854 | |||
Commodity derivatives | (3,274) | 84,189 | 99,479 | (104,901) | |||
Other current and non-current assets | 3,295 | (3,106) | 2,048 | 2,000 | |||
Payables and other current and non-current liabilities | 214,870 | 238,184 | (796,216) | (371,219) | |||
Total changes in operating assets and liabilities | 426,550 | 517,766 | 459,692 | (378,132) | |||
Adjusting items impacting cash from operations before | |||||||
Less: Insured inventory recoveries | — | — | (16,080) | — | |||
Less: Unrealized foreign currency losses on receivables | (12,088) | — | (12,088) | — | |||
Cash from operations before working capital changes | $ 50,045 | $ 50,663 | $ 208,227 | $ 224,762 | |||
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. |
SOURCE The Andersons, Inc.
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