MAUMEE, Ohio, Feb. 14, 2018 /CNW/ -- 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 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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
|
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SOURCE The Andersons, Inc.