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The Andersons, Inc. Reports Fourth Quarter Results
**IMPORTANT NOTE REGARDING UPDATE TO PREVIOUSLY REPORTED RESULTS**
On February 14, 2018, the Company issued a press release announcing the Company’s fourth quarter and full-year financial results for the period ended December 31, 2017. The press release reported: (a) net income attributable to The Andersons, Inc. of $68.4 million and $41.2 million; and (b) diluted earnings per common share attributable to The Andersons, Inc. shareholders of $2.42 and $1.46, each for the three and twelve months ended December 31, 2017. The Consolidated Statements of Operations and accompanying notes in the Annual Report on Form 10-K filed on February 26, 2018 reported (a) net income attributable to The Andersons, Inc. of $69.7 million and $42.5 million; and (b) diluted earnings per common share attributable to The Andersons, Inc. shareholders of $2.47 and $1.50, each for the three and twelve months ended December 31, 2017. Subsequent to the press release, the Company recorded additional tax benefit of $1.3 million as we finalized our tax provision. The February 14, 2018 press release remains accurate in all other respects.

MAUMEE, Ohio, Feb. 14, 2018 /PRNewswire/ -- The Andersons, Inc. (NASDAQ: ANDE) announces financial results for the fourth quarter and full year ended December 31, 2017 and its agreement to sell three grain elevators in Tennessee.

The Andersons, Inc. logo. (PRNewsFoto/The Andersons, Inc.)

The Company reports net income of $68.4 million, or $2.42 per diluted share, and adjusted net income of $17.6 million, or $0.62 per diluted share compared to $10.1 million and $0.36 per share, in the fourth quarter of 2016. Adjusted results exclude a $74.2 million, or $2.62 per diluted share net income tax benefit associated with recent U.S. federal income tax reform; a pretax $17.1 million goodwill impairment charge in the Plant Nutrient Group; and $10.9 million of pretax impairment charges associated with the Grain Group's Tennessee facilities. For the full year, the Company reports net income of $41.2 million, or $1.46 per diluted share, and adjusted net income of $32.3 million, or $1.15 per diluted share, compared to $11.6 million and $0.41 per share in 2016.

  • Grain Group records pretax income of $8.3 million and adjusted pretax income of $19.2 million on continued strong grain storage capacity utilization and strong risk management solutions business with farmers. The group also announces its agreement to sell three of its six Tennessee grain elevators.
  • Ethanol Group earns $6.4 million of pretax income despite weaker year-over-year margins.
  • Plant Nutrient Group reports a pretax loss of $18.0 million that includes a $17.1 million charge to write down goodwill as its primary markets remain depressed.
  • Rail Group earns $6.7 million of pretax income as the industry continues its slow improvement.

The Company reported fourth quarter 2017 net income attributable to The Andersons of $68.4 million, or $2.42 per diluted share, on revenues of $1.0 billion. These results included a $74.2 million or $2.62 per share net tax benefit as a result of recent corporate tax reform. During the fourth quarter of 2017, the Company also recorded a non-cash and mostly nondeductible goodwill impairment charge of $17.1 million or $0.59 per share related to the Plant Nutrient segment. It also recorded pretax non-cash impairment charges of $10.9 million or $0.24 per share related to its Tennessee grain assets. Adjusted net income attributable to the Company for the period was $17.6 million, or $0.62 per diluted share, compared to 2016 fourth quarter net income of $10.1 million, or $0.36 per diluted share, on revenues of $1.1 billion. The Company's EBITDA was $25.0 million for the fourth quarter of 2017 and $40.7 million for fourth quarter of 2016. Adjusted EBITDA was $53.0 million for the quarter compared to $40.7 million in fourth quarter 2016.

In addition, the Company announced it has signed an agreement, subject to close next month, to sell its grain elevators in Humboldt, Kenton and Dyer, Tennessee, to a subsidiary of Tyson Foods, Inc. The Andersons owns three additional elevators in Tennessee that are not a part of the purchase agreement with Tyson. The Company is exploring options for these three remaining facilities.

"Our fourth quarter performance was solid considering that we continue to face some challenging market conditions in several of our businesses, and we incurred some impairment expenses," said President and CEO Pat Bowe. "Notwithstanding expenses associated with our decision to sell the three Tennessee elevators, the Grain Group recorded better year-over-year results highlighted by significant improvement by Lansing Trade Group. For the full year, our adjusted Grain earnings improved by almost $40 million."

Bowe continued, "As we anticipated three months ago, ethanol margins in the quarter were lower again year over year in spite of continued strong U.S. exports. Margins continue to be lower than last year at this time."

"The Plant Nutrient Group's margins continued to be challenged by an oversupply of nutrients and low farm income, even as year-over-year volumes rose considerably. We also wrote down the remainder of our wholesale fertilizer goodwill balance due to the persistently soft fertilizer market. The Rail Group's utilization improved for the third consecutive quarter, and the group purchased more than 1,200 cars," added Bowe.

"The Company will certainly benefit from the U.S. federal income tax reform enacted in late December. We recorded a significant one-time income tax benefit of $74.2 million, primarily related to the new, lower tax rate on our deferred income tax liabilities," Bowe concluded.

For the full year, the Company reported net income attributable to The Andersons of $41.2 million, or $1.46 per diluted share, and adjusted net income attributable to The Andersons of $32.3 million, or $1.15 per diluted share. These amounts compared to net income attributable to The Andersons of $11.6 million, or $0.41 per diluted share, in 2016. The 2016 results included pretax impairment charges of $9.1 million, including $6.5 million in the Retail Group and $2.3 million in the Plant Nutrient Group, which equated to $0.20 per diluted share. The Company's EBITDA for 2017 and 2016 was $87.4 million and $123.9 million, respectively. Adjusted EBITDA was $157.4 million for 2017 compared to $123.9 million in 2016.

For purposes of better understanding ongoing results, the Company has expanded its pretax income disclosure in the table below to adjust for amounts that do not reflect ongoing operations. Specifically, adjustments have been made for the goodwill impairment charges in the second and fourth quarters of 2017 associated with the Plant Nutrient Group, and for the impairment of the Grain Group's Tennessee assets in the fourth quarter.

 

$ in millions     

   

Fourth Quarter

Year to Date

 

2017

2016

Vs

2017

2016

Vs

Reported Pretax Income (Loss)

$(0.9)

$16.7

$(17.6)

$(20.5)

$21.4

$(41.9)

Goodwill Impairment

17.1

-

17.1

59.1

-

59.1

Asset Impairment

10.9

-

10.9

10.9

-

10.9

Adjusted Pretax Income

$27.1

$16.7

$10.4

$49.5

$21.4

$28.1

EBITDA

$25.0

$40.7

$(15.7)

$87.4

$123.9

$(36.5)

Adjusted EBITDA

$53.0

$40.7

$12.3

$157.4

$123.9

$33.5

                 

 

Fourth Quarter Segment Overview

Grain Group Adjusted Operating Income Improves for Fifth Consecutive Quarter 

The Grain Group generated pretax income of $8.3 million and adjusted pretax income of $19.2 million in the fourth quarter, up $6.3 million or almost 50 percent from its fourth quarter 2016 pretax income results. The group's EBITDA was $14.3 million and $18.0 million in the 2017 and 2016 fourth quarters, respectively, and it generated adjusted EBITDA of $25.2 million and $18.0 million in the 2017 and 2016 fourth quarters, respectively.

For purposes of better understanding ongoing results, the Company has expanded its pretax income disclosure in the table below to adjust for amounts that are not reflective of ongoing operations. Specifically, an adjustment has been made for the impairment of the Grain Group's Tennessee assets in the fourth quarter.

 

$ in millions     

   

Fourth Quarter

Year to Date

 

2017

2016

Vs

2017

2016

Vs

Reported Pretax Income (Loss)

$8.3

$12.9

$(4.6)

$12.8

$(15.7)

$28.5

Asset Impairment

10.9

-

10.9

10.9

-

10.9

Adjusted Pretax Income

$19.2

$12.9

$6.3

$23.7

$(15.7)

$39.4

EBITDA

$14.3

$18.0

$(3.7)

$39.9

$10.5

$29.4

Adjusted EBITDA

$25.2

$18.0

$7.2

$50.8

$10.5

$40.3

                 

As the group reached an agreement to sell its elevators in Humboldt, Kenton and Dyer, Tennessee, it reclassified those assets from property, plant and equipment to assets held for sale and adjusted the value of the assets to the agreed-upon purchase price less costs to sell, resulting in a $5.3 million charge. The decision to sell prompted an evaluation of the carrying value of the remaining three Tennessee elevators. That evaluation resulted in an impairment charge of $5.6 million on those assets.

The table below separates the earnings of the group's base grain business from those of its grain affiliates. Base grain business earnings originate from grain facilities that the Company operates. The grain affiliates' earnings originate from equity method investments in Lansing Trade Group and Thompsons Limited.

 

$ in millions     

 

Fourth Quarter

   

Year to Date

 

Adjusted Pretax Income

2017

2016

Vs

2017

2016

Vs

  Base Grain

$15.7

$15.9

$(0.2)

$19.8

$(5.7)

$25.5

  Grain Affiliates

3.5

(3.0)

6.5

3.9

(10.0)

13.9

Total Grain Group

$19.2

$12.9

$6.3

$23.7

$(15.7)

$39.4

                     

 

Base grain pretax income was slightly lower in the fourth quarter compared to 2016 results. Income from grain ownership positions improved significantly year over year from better basis appreciation, largely in the corn and bean markets. Risk management services income was also up as the group was able to enroll record bushels in its Freedom pricing programs. In contrast, income from grain sales was down as put-through volumes were lower given that market dynamics are currently incenting grain owners to store rather than sell. Income from sales was also impacted by the extended harvest in Michigan and Indiana.

Lansing Trade Group's continued recovery from a poor 2016 drove a $6.5 million year-over-year improvement in the Grain Group affiliates' results, turning a $3.0 million fourth quarter 2016 pretax loss to pretax income of $3.5 million in the fourth quarter of 2017.

The group estimates that growers will plant 87 to 90 million acres of corn in 2018, perhaps slightly below the 90 million acres planted in 2017. Soybean planted acres are expected to be 89 to 92 million, compared to 90 million acres planted last year. Total wheat acres planted have been reported to be approximately 46 million in 2017 compared to 50 million in 2016. Normal weather conditions during planting and growing seasons should create favorable storage and merchandising opportunities in the coming year.

For the full year, the group earned pretax income of $12.8 million and adjusted pretax income of $23.7 million, a substantial turnaround from the $15.7 million pretax loss realized in the same period last year. Base grain results improved by more than $25 million on 2017 grain ownership margins that were more than twice the 2016 results. Affiliates results accounted for about $14 million of the change as Lansing Trade Group bounced back from a very disappointing 2016. The group generated EBITDA of $39.9 million and $10.5 million in 2017 and 2016, respectively. Adjusted EBITDA was $50.8 million and $10.5 million for the full years 2017 and 2016, respectively.

Ethanol Group Challenged by Continued Lower Margins

The Ethanol Group generated pretax income of $6.4 million attributable to The Andersons in the fourth quarter, about 45 percent lower than the $11.7 million pretax income attributable to The Andersons for the same period in 2016. This result was in line with group expectations and is due to lower margins.

The table below separates the results of the Ethanol Group's unconsolidated entities, which include the Albion, Michigan; Clymers, Indiana; and Greenville, Ohio plants, from the earnings of the consolidated Denison, Iowa plant and the group's management services income.

 

$ in millions     

   

Fourth Quarter

Year to Date

 

2017

2016

Vs

2017

2016

Vs

Equity in Earnings of Affiliates

$5.0

$8.5

$(3.5)

$12.2

$18.5

$(6.3)

Consolidated Operations and Service Fees

1.4

4.3

(2.9)

6.8

9.1

(2.3)

Pretax Income

6.4

12.8

(6.4)

19.0

27.6

(8.6)

Attributable to Noncontrolling Interests

-

1.1

(1.1)

0.1

2.9

(2.8)

Ethanol Group Pretax Income Attributable to The Andersons

$6.4

$11.7

$(5.3)

$18.9

$24.7

$(5.8)

                   

 

Continued robust industry production and high ethanol stocks were the main contributors to the weaker margin environment even as the export market continued to strengthen. The average sales price of ethanol was off about 4 percent. In addition, natural gas costs were up 2.5 percent year over year, while corn costs were flat.

On a more positive note, the group's industry-leading E85 sales increased year over year by 39 percent, and accounted for 11 percent of the group's production for the quarter compared to a little over 9 percent in the comparable 2016 period. The group expects to continue to aggressively grow E85 sales.

Values for distillers dried grains (DDGs) improved markedly during the quarter as the group worked through the last of the 2016 corn crop's vomitoxin issues. Better international demand for DDGs also improved pricing and margins. Those two conditions combined to drive values more than 10 percent higher than in the prior quarter but not quite up to the values of the comparable 2016 period.

The group's facilities ran well, setting quarterly and monthly production records in the fourth quarter and December, respectively.

For the year, the group earned pretax income of $18.9 million compared to $24.7 million last year on lower margins. While the sales price of ethanol was relatively flat and the cost of corn was down by 3 percent, DDG values were down by 27 percent and the cost for natural gas was up 15 percent. E85 gallons sold were up by 26 percent.

Plant Nutrient Group Results Hurt by Continued Lower Margins

For purposes of better understanding ongoing results, the Company has expanded the Plant Nutrient Group's pretax income disclosure in the table below to adjust for the second and fourth quarter goodwill impairment charges associated with the wholesale fertilizer business.

 

$ in millions     

   

Fourth Quarter

Year to Date

 

2017

2016

Vs

2017

2016

Vs

Reported Pretax Income (Loss)

$(18.0)

$(3.8)

$(14.2)

$(45.1)

$14.2

$(59.3)

Goodwill Impairment

17.1

-

17.1

59.1

-

59.1

Adjusted Pretax Income (Loss)

$(0.9)

$(3.8)

$2.9

$14.0

$14.2

$(0.2)

EBITDA

$(10.2)

$4.5

$(14.7)

$(12.1)

$49.3

$(61.4)

Adjusted EBITDA

$6.9

$4.5

$2.4

$47.0

$49.3

$(2.3)

                 

 

The Plant Nutrient Group recorded a pretax loss of $18.0 million and an adjusted pretax loss of $0.9 million in the fourth quarter compared to a pretax loss of $3.8 million in the fourth quarter of 2016. Considering that 2016 results included $3.3 million of expenses incurred while closing a cob facility, the 2017 and 2016 fourth quarter results were comparable. The group's current quarter EBITDA was $(10.2) million, a $14.7 million decrease compared to 2016 fourth quarter results. The comparable adjusted EBITDA amounts were $6.9 million and $4.5 million for the 2017 and 2016 fourth quarters, respectively.

As in the last several quarters, the business was impacted by low nutrient prices and an oversupply of product during the period. The group's performance in the fourth quarter was also hampered by continuing pressure on margins, even though the group achieved a healthy increase in volume. 

Base nutrient (NPK) volumes were up almost 10 percent year over year, while higher-margin, value-added nutrient tons (low salt starter fertilizers and micro nutrients) were up nearly 18 percent. Volumes for products in the group's other businesses (farm centers, lawn and cob) were down 27 percent; all but 10 percent of the decrease resulted from selling the group's Florida farm centers in the first quarter.

Margins per ton were considerably lower in both base nutrients and value-added products, finishing down 25 percent and 11 percent year-over-year, respectively. Margins per ton improved considerably for the farm centers and the cob business, but were flat in the lawn fertilizer business. Those volume and margin changes combined to reduce gross profit by about $4.8 million, or more than 18 percent.

For the full year, the Group generated a pretax loss of $45.1 million and adjusted pretax income of $14.0 million, which includes a $4.7 million gain on the sale of the Florida farm centers, compared to pretax income of $14.2 million in 2016. Wholesale fertilizer volumes were slightly higher, and margins were down about 5 percent, including more than 8 percent for the value added product line. Full-year 2017 adjusted EBITDA was $47.0 million compared to $49.3 million for 2016.

The Company expects the Plant Nutrient's wholesale fertilizer business to continue to be challenged in the near term until some supply/demand equilibrium is achieved.

Rail Group Pretax Income Reflects Lower Lease Income and Car Sale Income

The Rail Group earned fourth quarter pretax income of $6.7 million compared to $9.7 million in the same period of the prior year. The group's adjusted fourth quarter 2017 EBITDA was $14.3 million compared to $15.6 million in the comparable 2016 period.

 

$ in millions

     Fourth Quarter

Year to Date

Pretax Income

2017

2016

Vs

2017

2016

Vs

  Lease Income

$1.9

$2.9

$(1.0)

$8.9

$13.2

$(4.3)

  Car Sales

3.3

4.7

(1.4)

11.0

11.0

-

  Services and Other

1.5

2.1

(0.6)

4.9

8.2

(3.3)

Total Rail Group

$6.7

$9.7

$(3.0)

$24.8

$32.4

$(7.6)

EBITDA

$14.3

$15.6

$(1.3)

$54.9

$59.0

$(4.1)

   Utilization Rate

86.2%

84.8%

1.4%

85.0%

87.8%

(2.8)%

                     

 

Base leasing operations earned $1.9 million in the fourth quarter, down $1.5 million sequentially and $1.0 million year over year. Utilization averaged 86.2 percent during the quarter compared to 85.8 percent sequentially and 84.8 percent during the same period last year. Average lease rates for the fleet were down about 4 percent as shorter leases at lower rates continued to have an impact. Depreciation and interest expense were each up $1.0 million and $0.7 million, respectively, primarily due to a 30 percent higher asset base. The group earned fourth quarter EBITDA of $14.3 million and $15.6 million in 2017 and 2016, respectively.

The group purchased more than 1,200 railcars during the quarter at a cost of almost $60 million, which represented its most active quarter of purchasing in more than 10 years.

The group earned $3.3 million of pretax income on railcar sales in the quarter compared to $2.6 million sequentially and $4.7 million in the fourth quarter of 2016. The group scrapped more than 400 older, out-of-favor cars, but sold fewer cars outright than in the same 2016 period.

Rail's service and other pretax income was $1.5 million in the quarter compared to $2.1 million during the same period of 2016. Repair sales were 4 percent lower year over year, and margins tightened. The group opened a new facility in New York during the quarter, and has announced its intent to open another in Texas in early 2018.  

U.S. rail traffic excluding coal carloads was up about 2.5 percent year over year, but was up less than 1 percent for the full year 2017. In addition, Class I railroad efficiency was lower than 2016 levels.

For the full year, the Rail Group earned pretax income of $24.8 million compared to $32.4 million in 2016. EBITDA was $54.9 million for full-year 2017 compared to $59.0 million for 2016. Lower base leasing revenue accounted for a majority of the full-year income variance, as full-year utilization and average lease rates were each modestly lower, and depreciation, freight and storage expenses were higher. Income from car sales for the two years were flat. Pretax income for 2017 also included lower earnings from the group's barge fleet and did not include any earnings from its former investment in a short line railroad sold in early 2016.

The Rail Group will continue to pursue opportunities to enlarge its diverse lease and car portfolio and its repair network.

Company Sells a Third Retail Property; Other Net Company-Level Expenses Lower

The Company recorded pretax income of $1.8 million during the quarter from its closed retail business. This result was driven by the sale of the third of four retail properties for a gain of $2.9 million. For the full year, results from a short period of normal operations followed by liquidation activities, closing expenses and gains from property sales netted to a pretax loss of $7.3 million.

Unallocated net Company-level expenses for the fourth quarter of 2017 were $6.2 million, more than 25 percent lower than the $8.7 million incurred in the fourth quarter of 2016. Lower professional and contract services expenses accounted for most of the variance. Full year unallocated net Company-level expenses were $24.7 million, down $3.6 million or about 12 percent from 2016 levels. Professional and contract services were lower by $3.7 million, while $1.9 million less in benefits costs offset $1.9 million more depreciation and rent expense.

Company Benefits from U.S. Federal Income Tax Reform

As a result of legislation enacted in late December, the Company recognized a one-time net income tax benefit of $74.2 million, or $2.62 per diluted share. The principal component of the benefit was a $75.6 million reduction in the value of net deferred income tax liabilities driven by the reduction of the statutory U.S. federal income tax rate from 35 percent to 21 percent. The other component was a $1.4 million incremental expense associated with the one-time mandatory tax on previously deferred earnings of certain non-U.S. subsidiaries that are owned either wholly or partially by a U.S. subsidiary of The Andersons.

The company expects to benefit from a substantial decrease in its effective tax rate beginning in 2018.

Conference Call

The Company will host a webcast on Thursday, February 15, 2018, at 11 a.m. Eastern Standard Time to discuss its performance and provide an updated outlook for 2018. To access the call, please dial 866-439-8514 or 678-509-7568 (participant passcode is 4391507). We recommend that you call 10 minutes before the conference call begins.

To access the webcast, click on the link: https://edge.media-server.com/m6/p/vwki6x4u. Complete the four fields as directed and click submit. A replay of the call can also be accessed under the heading "Investors" on the Company website at www.andersonsinc.com.

Forward-Looking Statements

This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks include economic, weather and regulatory conditions, competition and the risk factors set forth from time to time in the Company's filings with the Securities and Exchange Commission. Although the Company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.

Non-GAAP Measures

This release contains non-GAAP financial measures. Adjusted pretax income; EBITDA, or earnings before interest, taxes, depreciation and amortization; and adjusted EBITDA are our primary measures of period-over-period comparisons, and we believe they are meaningful measures for investors to compare our results from period to period. We have excluded the impairment charges related to our Plant Nutrient and Grain Groups, as well as the one-time benefits of recent U.S. federal income tax reform, as we believe they are not representative of our ongoing core operations when calculating adjusted pretax income, adjusted net income, adjusted earnings per diluted share and adjusted EBITDA. Reconciliations of the non-GAAP to GAAP measures may be found within the financial tables provided in the release and a reconciliation of net income to adjusted net income is provided in a table below.

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. For more information, visit The Andersons online at www.andersonsinc.com.

 

 

The Andersons, Inc.

             

Condensed Consolidated Statements of Operations

             

(Unaudited)

             
               
 

Three months ended December 31,

 

Twelve months ended December 31,

(in thousands, except per share data)

2017

 

2016

 

2017

 

2016

Sales and merchandising revenues 

$              1,004,072

 

$                 1,113,055

 

$              3,686,345

 

$                 3,924,790

Cost of sales and merchandising revenues

919,236

 

1,009,361

 

3,367,546

 

3,579,284

Gross profit

84,836

 

103,694

 

318,799

 

345,506

Operating, administrative and general expenses

67,598

 

84,629

 

287,930

 

318,395

Asset impairment

10,913

 

8,820

 

10,913

 

9,107

Goodwill impairment

17,081

 

-

 

59,081

 

-

Interest expense

4,095

 

3,073

 

21,567

 

21,119

Other income:

             

Equity in earnings of affiliates

8,630

 

5,932

 

16,723

 

9,721

Other income, net

5,327

 

3,631

 

23,444

 

14,775

Income (loss) before income taxes

(894)

 

16,735

 

(20,525)

 

21,381

Income tax provision (benefit)

(69,329)

 

5,425

 

(61,824)

 

6,911

Net income (loss)

68,435

 

11,310

 

41,299

 

14,470

Net income attributable to the noncontrolling interests

25

 

1,165

 

98

 

2,876

Net income (loss) attributable to The Andersons, Inc.

$                    68,410

 

$                      10,145

 

$                    41,201

 

$                      11,594

               

Per common share:

             

Basic earnings attributable to The Andersons, Inc. common shareholders

$                        2.43

 

$                          0.36

 

$                        1.46

 

$                          0.41

Diluted earnings attributable to The Andersons, Inc. common shareholders

$                        2.42

 

$                          0.36

 

$                        1.46

 

$                          0.41

Dividends declared

$                      0.165

 

$                        0.160

 

$                      0.645

 

$                        0.625

 

 

 

The Andersons, Inc.

             

Reconciliation to Adjusted Net Income

             

(Unaudited)

             
               
 

Three months ended December 31,

 

Twelve months ended December 31,

(in thousands, except per share data)

2017

 

2016

 

2017

 

2016

Net income (loss) attributable to The Andersons, Inc.

$                   68,410

 

$                     10,145

 

$                   41,201

 

$                     11,594

Items impacting other income, net of tax:

             

Tax reform impact

(74,227)

 

-

 

(74,227)

 

-

Goodwill impairment

16,607

 

-

 

58,607

 

-

Asset impairment

6,766

 

-

 

6,766

 

-

               

Total adjusting items

(50,854)

 

-

 

(8,854)

 

-

Adjusted net income (loss) attributable to The Andersons, Inc.

$                   17,556

 

$                     10,145

 

$                   32,347

 

$                     11,594

               

Diluted earnings attributable to The Andersons, Inc. common shareholders

$                       2.42

 

$                         0.36

 

$                       1.46

 

$                         0.41

               

Impact on diluted earnings per share

(1.80)

 

-

 

(0.31)

 

-

Adjusted diluted earnings per share

$                       0.62

 

$                         0.36

 

$                       1.15

 

$                         0.41

 

 

 

The Andersons, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

 
 

(in thousands)

December 31, 2017

 

December 31, 2016

 

Assets

       

Current assets:

       

Cash and cash equivalents

$                    34,919

 

$                     62,630

 

Restricted cash

-

 

471

 

Accounts receivable, net

183,238

 

194,698

 

Inventories

648,703

 

682,747

 

Commodity derivative assets – current

30,702

 

45,447

 

Other current assets

63,716

 

72,133

 

Assets held for sale

37,859

 

-

 

Total current assets

999,137

 

1,058,126

 

Other assets:

       

Commodity derivative assets – noncurrent

310

 

100

 

Other assets, net

131,474

 

180,445

 

Equity method investments

223,239

 

216,931

 
 

355,023

 

397,476

 

Rail Group assets leased to others, net

423,443

 

327,195

 

Property, plant and equipment, net

384,677

 

450,052

 

Total assets

$              2,162,280

 

$                2,232,849

 
         

Liabilities and equity

       

Current liabilities:

       

Short-term debt

$                    22,000

 

$                     29,000

 

Trade and other payables

503,571

 

581,826

 

Customer prepayments and deferred revenue

59,710

 

48,590

 

Commodity derivative liabilities – current

29,651

 

23,167

 

Accrued expenses and other current liabilities

69,579

 

69,648

 

Current maturities of long-term debt

54,205

 

47,545

 

Total current liabilities

738,716

 

799,776

 
         

Other long-term liabilities

33,129

 

27,833

 

Commodity derivative liabilities – noncurrent

825

 

339

 

Employee benefit plan obligations

26,716

 

35,026

 

Long-term debt, less current maturities

418,339

 

397,065

 

Deferred income taxes

122,966

 

182,113

 

Total liabilities

1,340,691

 

1,442,152

 

Total equity

821,589

 

790,697

 

Total liabilities and equity

$              2,162,280

 

$                2,232,849

 

 

 

 

The Andersons, Inc.

                         

Segment Data

                         

(Unaudited)

                         
                           

(in thousands)

Grain

 

Ethanol

 

Plant Nutrient

 

Rail

 

Retail

 

Other

 

Total

Three months ended December 31, 2017

                         

Revenues from external customers

$                 641,876

 

$          174,548

 

$          136,881

 

$            50,491

 

$                  276

 

$                     -

 

$           1,004,072

Gross profit

44,976

 

4,609

 

21,554

 

14,030

 

(333)

 

-

 

84,836

Equity in earnings of affiliates

3,645

 

4,985

 

-

 

-

 

-

 

-

 

8,630

Other income, net

612

 

20

 

514

 

368

 

3,382

 

431

 

5,327

Income (loss) before income taxes

8,347

 

6,429

 

(18,047)

 

6,733

 

1,832

 

(6,188)

 

(894)

Income (loss) attributable to the noncontrolling interests

-

 

25

 

-

 

-

 

-

 

-

 

25

Income (loss) before income taxes attributable to The Andersons, Inc. (a)

$                     8,347

 

$               6,404

 

$           (18,047)

 

$              6,733

 

$              1,832

 

$              (6,188)

 

$                     (919)

                           

Three months ended December 31, 2016

                         

Revenues from external customers

$                   745,179

 

$            147,930

 

$            136,379

 

$              45,506

 

$              38,061

 

$-

 

$              1,113,055

Gross profit

43,866

 

7,097

 

26,478

 

15,240

 

11,013

 

-

 

103,694

Equity in earnings of affiliates

(2,605)

 

8,537

 

-

 

-

 

-

 

-

 

5,932

Other income, net

1,801

 

38

 

988

 

205

 

244

 

355

 

3,631

Income (loss) before income taxes

12,912

 

12,840

 

(3,832)

 

9,730

 

(6,204)

 

(8,711)

 

16,735

Income (loss) attributable to the noncontrolling interests

-

 

1,165

 

-

 

-

 

-

 

-

 

1,165

Income (loss) before income taxes attributable to The Andersons, Inc. (a)

$                     12,912

 

$              11,675

 

$               (3,832)

 

$                9,730

 

$              (6,204)

 

$               (8,711)

 

$                   15,570

                           
 

Grain

 

Ethanol

 

Plant Nutrient

 

Rail

 

Retail

 

Other

 

Total

Twelve months ended December 31, 2017

                         

Revenues from external customers

$             2,106,464

 

$          708,063

 

$          651,824

 

$          172,123

 

$            47,871

 

$                     -

 

$           3,686,345

Gross profit

131,388

 

19,857

 

104,645

 

52,459

 

10,450

 

-

 

318,799

Equity in earnings of affiliates

4,509

 

12,214

 

-

 

-

 

-

 

-

 

16,723

Other income, net

3,658

 

54

 

5,092

 

2,632

 

10,684

 

1,324

 

23,444

Income (loss) before income taxes

12,844

 

18,976

 

(45,121)

 

24,798

 

(7,309)

 

(24,713)

 

(20,525)

Income (loss) attributable to the noncontrolling interests

-

 

98

 

-

 

-

 

-

 

-

 

98

Income (loss) before income taxes attributable to The Andersons, Inc. (a)

$                   12,844

 

$            18,878

 

$           (45,121)

 

$            24,798

 

$             (7,309)

 

$           (24,713)

 

$               (20,623)

                           

Twelve months ended December 31, 2016

                         

Revenues from external customers

$                2,357,171

 

$            544,556

 

$            725,176

 

$            163,658

 

$            134,229

 

$-

 

$              3,924,790

Gross profit

108,082

 

20,304

 

122,131

 

55,929

 

39,060

 

-

 

345,506

Equity in earnings of affiliates

(8,746)

 

18,467

 

-

 

-

 

-

 

-

 

9,721

Other income, net

5,472

 

77

 

3,716

 

2,218

 

507

 

2,785

 

14,775

Income (loss) before income taxes

(15,654)

 

27,602

 

14,176

 

32,428

 

(8,848)

 

(28,323)

 

21,381

Income (loss) attributable to the noncontrolling interest

(3)

 

2,879

 

-

 

-

 

-

 

-

 

2,876

Income (loss) before income taxes attributable to The Andersons, Inc. (a)

$                   (15,651)

 

$              24,723

 

$              14,176

 

$              32,428

 

$              (8,848)

 

$             (28,323)

 

$                   18,505

                           

(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).

                           
                           

 

 

 

The Andersons, Inc.

                         

Reconciliation to EBITDA and Adjusted EBITDA

                         

(unaudited)

                         
                           
                           

(in thousands)

  Grain 

 

 Ethanol

 

 Plant Nutrient

 

 Rail

 

 Retail

 

 Other

 

 Total

Three months ended December 31, 2017

                         

Income (loss) before income taxes

$              8,347

 

$              6,429

 

$          (18,047)

 

$              6,733

 

$              1,832

 

$             (6,188)

 

$                (894)

Income (loss) attributable to the noncontrolling interests

-

 

25

 

-

 

-

 

-

 

-

 

25

Income (loss) before income taxes attributable to The Andersons, Inc.

8,347

 

6,404

 

(18,047)

 

6,733

 

1,832

 

(6,188)

 

(919)

Interest expense

1,399

 

(15)

 

1,404

 

1,536

 

55

 

(284)

 

4,095

Depreciation and amortization

4,537

 

1,504

 

6,405

 

6,011

 

-

 

3,409

 

21,866

Earnings before interest, taxes, depreciation and amortization (EBITDA)

14,283

 

7,893

 

(10,238)

 

14,280

 

1,887

 

(3,063)

 

25,042

Adjusting items impacting EBITDA:

                         

Goodwill impairment

-

 

-

 

17,081

 

-

 

-

 

-

 

17,081

Asset impairment

10,913

 

-

 

-

 

-

 

-

 

-

 

10,913

Total adjusting items

10,913

 

-

 

17,081

 

-

 

-

 

-

 

27,994

Adjusted EBITDA

$            25,196

 

$              7,893

 

$              6,843

 

$            14,280

 

$              1,887

 

$             (3,063)

 

$            53,036

                           

Three months ended December 31, 2016

                         

Income (loss) before income taxes

$              12,912

 

$              12,840

 

$              (3,832)

 

$                9,730

 

$              (6,204)

 

$              (8,711)

 

$              16,735

Income (loss) attributable to the noncontrolling interests

 

1,165

 

 

 

 

 

1,165

Income (loss) before income taxes attributable to The Andersons, Inc.

12,912

 

11,675

 

(3,832)

 

9,730

 

(6,204)

 

(8,711)

 

15,570

Interest expense

770

 

1

 

889

 

853

 

55

 

505

 

3,073

Depreciation and amortization

4,364

 

1,490

 

7,450

 

5,025

 

598

 

3,154

 

22,081

Earnings before interest, taxes, depreciation and amortization (EBITDA)

18,046

 

13,166

 

4,507

 

15,608

 

(5,551)

 

(5,052)

 

40,724

Adjusting items impacting EBITDA:

                         

Total adjusting items

-

 

-

 

-

 

-

 

-

 

-

 

-

Adjusted EBITDA

$              18,046

 

$              13,166

 

$                4,507

 

$              15,608

 

$              (5,551)

 

$              (5,052)

 

$              40,724

                           

Twelve months ended December 31, 2017

                         

Income (loss) before income taxes

$            12,844

 

$            18,976

 

$          (45,121)

 

$            24,798

 

$             (7,309)

 

$          (24,713)

 

$          (20,525)

Income (loss) attributable to the noncontrolling interests

-

 

98

 

-

 

-

 

-

 

-

 

98

Income (loss) before income taxes attributable to The Andersons, Inc.

12,844

 

18,878

 

(45,121)

 

24,798

 

(7,309)

 

(24,713)

 

(20,623)

Interest expense

8,320

 

(67)

 

6,420

 

7,023

 

324

 

(453)

 

21,567

Depreciation and amortization

18,757

 

5,970

 

26,628

 

23,081

 

70

 

11,906

 

86,412

Earnings before interest, taxes, depreciation and amortization (EBITDA)

39,921

 

24,781

 

(12,073)

 

54,902

 

(6,915)

 

(13,260)

 

87,356

Adjusting items impacting EBITDA:

                         

Goodwill impairment

-

 

-

 

59,081

 

-

 

-

 

-

 

59,081

Asset impairment

10,913

 

-

 

-

 

-

 

-

 

-

 

10,913

Total adjusting items

10,913

 

-

 

59,081

 

-

 

-

 

-

 

69,994

Adjusted EBITDA

$            50,834

 

$            24,781

 

$            47,008

 

$            54,902

 

$             (6,915)

 

$          (13,260)

 

$          157,350

                           

Twelve months ended December 31, 2016

                         

Income (loss) before income taxes

$            (15,654)

 

$              27,602

 

$              14,176

 

$              32,428

 

$              (8,848)

 

$            (28,323)

 

$              21,381

Income (loss) attributable to the noncontrolling interests

(3)

 

2,879

 

-

 

-

 

-

 

-

 

2,876

Income (loss) before income taxes attributable to The Andersons, Inc.

(15,651)

 

24,723

 

14,176

 

32,428

 

(8,848)

 

(28,323)

 

18,505

Interest expense

7,955

 

35

 

6,448

 

6,461

 

496

 

(276)

 

21,119

Depreciation and amortization

18,232

 

5,925

 

28,663

 

20,082

 

2,452

 

8,971

 

84,325

Earnings before interest, taxes, depreciation and amortization (EBITDA)

10,536

 

30,683

 

49,287

 

58,971

 

(5,900)

 

(19,628)

 

123,949

Adjusting items impacting EBITDA:

                         

Total adjusting items

-

 

-

 

-

 

-

 

-

 

-

 

-

Adjusted EBITDA

$              10,536

 

$              30,683

 

$              49,287

 

$              58,971

 

$              (5,900)

 

$            (19,628)

 

$            123,949

 

 

 

 

SOURCE The Andersons, Inc.

For further information: Investor Relations Contact, John Kraus, Director, Investor Relations, Phone: 419-891-6544, E-mail: investorrelations@andersonsinc.com