Summary of The Andersons (ANDE) Conference Call Company Overview - The Andersons is a diversified agribusiness operating in grain trading, ethanol production, and plant nutrients, with a strong presence in the Eastern Corn Belt and recent expansion into the Western Corn Belt through the Skylin grain investment [2][6] Key Points and Arguments Leadership Transition - CEO Bill Krueger has been in the role since October, succeeding Pat Bo, and has been with the company since the Lansing acquisition [3] - The company has tripled in size since January 1, 2019, indicating significant growth and transformation [3] Business Segments and Strategy - The Andersons has combined its nutrient business with its trade group to enhance operational efficiency [5] - The company has adopted a more asset-light model since 2019, allowing for greater flexibility and nimbleness in operations [7][8] - The Skylin investment has filled gaps in the company's asset footprint, particularly in Southwest Kansas and the Texas Panhandle [6][21] Market Dynamics - The wheat market is currently balanced, with the U.S. showing a slight oversupply at a carryout of 1.6 million bushels [10][11] - Global corn demand is well-structured, but competition from Milo and wheat is affecting corn demand in the U.S. [11][12] - Fertilizer demand remains high despite a weaker financial position for some farmers, attributed to precision agriculture practices [14][15] Tariffs and Trade - Recent changes to tariffs and port fees have reduced risks for The Andersons, particularly regarding exports from the Great Lakes [18][20] - The company is well-positioned to navigate the current tariff environment, especially concerning fertilizer and wheat imports [18] Financial Performance and Outlook - The Skylin investment is expected to contribute $30 million to $40 million in EBITDA on a run-rate basis [25] - Ethanol margins are expected to improve through Q2 and Q3, driven by increased gasoline demand and potential E15 mandates [31][32] - The company anticipates a stable inventory level for ethanol, similar to the previous year, with a positive outlook on exports [36] Renewable Diesel and Feedstock Opportunities - The Renewable Volume Obligation (RVO) is expected to drive demand for feedstocks, positively impacting The Andersons' renewable diesel feedstock business [40][41] - The company has a target to increase its renewable diesel feedstock trading from 1.5 billion pounds to 2 billion pounds [42] Capital Expenditure and Growth Strategy - The company plans to invest approximately $200 million in CapEx for 2025, focusing on efficiency improvements and potential acquisitions [52] - The current environment is seen as favorable for acquisitions, with a preference for larger deals (doubles and triples) rather than smaller ones [53][54] Key Milestones and Monitoring - Investors should monitor the growing season, proposed legislation, and the company's carbon sequestration permit filing in Indiana [63][64] - The company is focused on optimizing its portfolio and addressing underperforming profit centers [66][67] Additional Important Insights - The Andersons has a robust internal growth project pipeline, with significant investments planned for the Port of Houston and other projects [51] - The company is considering share repurchase options, balancing this with potential acquisition opportunities [59][60] This summary encapsulates the key discussions and insights from The Andersons' conference call, highlighting the company's strategic direction, market dynamics, and financial outlook.

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents the unaudited condensed consolidated financial statements for Q1 2025, reflecting a segment realignment [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Reports a significant decline in Q1 2025 net income due to lower revenues and higher operating expenses Q1 2025 vs Q1 2024 Statement of Operations Highlights (in thousands, except per share data) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Sales and merchandising revenues | $2,659,098 | $2,718,217 | | Gross profit | $152,872 | $128,320 | | Income before income taxes | $3,213 | $13,968 | | Net income attributable to The Andersons, Inc. | $284 | $5,581 | | Diluted earnings per share | $0.01 | $0.16 | [Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) Shows a comprehensive loss in Q1 2025, reversing a prior-year gain due to unfavorable hedge and currency impacts Q1 2025 vs Q1 2024 Comprehensive Income (in thousands) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $5,331 | $12,665 | | Other comprehensive (loss) income | $(3,728) | $546 | | Comprehensive (loss) income attributable to The Andersons, Inc. | $(3,701) | $6,127 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details an expanded balance sheet as of March 31, 2025, with increased assets, liabilities, and equity Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Total current assets | $2,528,744 | $2,850,277 | $2,213,908 | | Total assets | $3,797,682 | $4,121,314 | $3,261,073 | | Total current liabilities | $1,434,308 | $1,731,172 | $1,083,284 | | Total liabilities | $2,203,248 | $2,521,478 | $1,785,423 | | Total equity | $1,594,434 | $1,599,836 | $1,475,650 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Indicates increased cash usage in operating and investing activities, offset by cash provided from financing Cash Flow Summary (in thousands) | Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(350,020) | $(239,627) | | Net cash used in investing activities | $(43,831) | $(22,052) | | Net cash provided by (used in) financing activities | $50,445 | $(98,280) | | **Decrease in cash and cash equivalents** | **$(342,552)** | **$(359,952)** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides key disclosures on segment realignment, the Skyland acquisition, inventory levels, and derivative use - Effective January 1, 2025, the company realigned its structure, combining the former Trade and Nutrient & Industrial segments into a new **Agribusiness segment**, with prior periods recast[20](index=20&type=chunk)[66](index=66&type=chunk)[93](index=93&type=chunk) - On November 1, 2024, the company acquired a **65% ownership interest in Skyland Grain LLC for $85.0 million**, expanding its grain and fertilizer business in Kansas, Colorado, Oklahoma, and Texas[85](index=85&type=chunk) - The company uses commodity derivatives to manage price risk, with **net pretax gains of $50.0 million in Q1 2025** compared to $19.3 million in Q1 2024[29](index=29&type=chunk)[34](index=34&type=chunk) Inventory Breakdown (in thousands) | Inventory Class | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Grain and other agricultural products | $833,477 | $669,373 | | Ethanol and co-products | $133,352 | $104,878 | | Nutrients and cob products | $269,538 | $205,838 | | **Total inventories** | **$1,249,047** | **$994,543** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes segment performance, liquidity, and capital resources, highlighting challenges in Agribusiness and stability in Renewables [Executive Overview & Segment Performance](index=25&type=section&id=Executive%20Overview%20%26%20Segment%20Performance) Summarizes quarterly performance, noting market headwinds for the Agribusiness segment and improved results for Renewables - Agribusiness: Q1 operating results fell behind the prior year due to **limited trade flows and challenged basis levels** in western locations, including those from the Skyland investment[97](index=97&type=chunk) - Renewables: Q1 operating results were **slightly improved** compared to the prior year, driven by efficient ethanol production and higher yields, benefiting from better board crush margins[100](index=100&type=chunk) - The company's grain storage capacity **increased to approximately 280 million bushels** from 170 million bushels year-over-year, primarily due to the Skyland acquisition[99](index=99&type=chunk) [Operating Results](index=27&type=section&id=Operating%20Results) Details segment financial performance, showing a pre-tax loss in Agribusiness and stable income in Renewables Segment Income (Loss) Before Income Taxes (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Agribusiness | $(9,676) | $2,538 | | Renewables | $24,881 | $24,327 | | Other | $(11,992) | $(12,897) | | **Total** | **$3,213** | **$13,968** | - The Agribusiness segment's operating results decreased by $7.7 million (non-GAAP attributable to the company) from the prior year, primarily due to a **$27.6 million increase in operating expenses**, substantially all from the new Skyland business[106](index=106&type=chunk)[107](index=107&type=chunk) - The Renewables segment's operating results decreased by $1.9 million (non-GAAP attributable to the company) as a **$5.5 million increase in gross profit was more than offset by a $3.7 million decrease in other income**, net[110](index=110&type=chunk)[111](index=111&type=chunk) - The effective tax rate for Q1 2025 was **(65.9)%** due to a discrete adjustment for prior period U.S. federal research and development tax credits[112](index=112&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Reviews the company's liquidity, noting decreased working capital, higher cash usage, and significant borrowing capacity - **Working capital was $1,094.4 million** at March 31, 2025, a decrease of $36.2 million from the prior year[117](index=117&type=chunk) - Net cash used in operating activities **increased by $110.4 million YoY to $350.0 million**, mainly due to unfavorable changes in operating assets and liabilities[119](index=119&type=chunk)[120](index=120&type=chunk) - Management expects to invest approximately **$175 million to $200 million** in property, plant and equipment in 2025[121](index=121&type=chunk) - As of March 31, 2025, the Company had **$1,935.1 million available for borrowing** under its credit facilities and was in compliance with all debt covenants[124](index=124&type=chunk)[125](index=125&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) States no material changes occurred in market risk during Q1 2025, referencing the 2024 Form 10-K - There were **no material changes in market risk**, specifically commodity and interest rate risk, during the three months ended March 31, 2025[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures with no material changes to internal controls in Q1 2025 - The company's principal executive officer and principal financial officer concluded that **disclosure controls and procedures were effective** as of March 31, 2025[130](index=130&type=chunk) - **No material changes** in the Company's internal control over financial reporting were identified during the first quarter of 2025[131](index=131&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Reports involvement in ordinary course legal proceedings not expected to have a material adverse financial impact - The company is subject to legal proceedings in the ordinary course of business, but management believes there is **no reasonable possibility of incurring a material loss** from these claims[134](index=134&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Refers to the 2024 Form 10-K for a comprehensive discussion of factors that could materially affect the business - The company refers to the "Risk Factors" section in its 2024 Form 10-K for a comprehensive discussion of potential risks affecting its business, financial condition, and operating results[136](index=136&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Q1 2025 share repurchase activity, with $96.5 million remaining available under the current plan Share Repurchase Activity (Q1 2025) | Metric | Value | | :--- | :--- | | Total Shares Purchased | 122,190 | | Average Price Paid Per Share | $41.09 | | Value Remaining Under Plan (as of Mar 31, 2025) | $96,521,201 | [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) Reports no adoption, modification, or termination of Rule 10b5-1 trading plans by directors or officers in Q1 2025 - **No directors or executive officers adopted, modified, or terminated** a Rule 10b5-1 trading plan or any non-Rule 10b5-1 trading arrangement in Q1 2025[139](index=139&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the report, including certifications, credit agreements, and XBRL data - Lists exhibits filed with the report, such as the First Amendment to the Amended and Restated Credit Agreement, CEO/CFO certifications, and Inline XBRL documents[140](index=140&type=chunk)

Financial Performance - Q1 2025 - Sales and Merchandising Revenues reached $2,659 million, slightly down from $2,718 million in YTD '24[14] - Gross Profit increased to $153 million compared to $128 million in YTD '24[14] - Pretax Income decreased to $3 million from $14 million in YTD '24[14] - Adjusted EPS was $0.12, compared to $0.16 in YTD '24[14] - Adjusted EBITDA increased to $57 million from $51 million in YTD '24[14] Agribusiness - Q1 2025 - Agribusiness revenues were $1,993 million, down from $2,061 million in YTD '24[21] - Agribusiness gross profit increased to $119 million from $100 million in YTD '24[21] - Agribusiness reported a Pretax loss of $10 million, compared to a $3 million profit in YTD '24[21] - Agribusiness Adjusted EBITDA was $31 million, compared to $29 million in YTD '24[21] Renewables - Q1 2025 - Renewables revenues increased to $666 million from $657 million in YTD '24[27] - Renewables gross profit increased to $34 million from $29 million in YTD '24[27] - Renewables Pretax income increased to $25 million from $24 million in YTD '24[27] - Renewables Adjusted EBITDA was $37 million, compared to $34 million in YTD '24[27] Cash and Debt - Cash from Operations Before Working Capital Changes was $57 million in Q1'25, compared to $48 million in Q1'24[16, 45] - Short-term Debt was $223 million as of 3/31/2025[16] - Long-term Debt was $651 million as of 3/31/2025[18] - Capital Spending for Q1'25 was $47 million[18]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net income of $300,000 or $0.01 per diluted share, and adjusted net income of $4,000,000 or $0.12 per diluted share, compared to net income of $6,000,000 or $0.16 per diluted share in Q1 2024 [10] - Revenues declined slightly due to lower commodity prices, while gross profit improved despite increased expenses [11] - Adjusted EBITDA for Q1 2025 was $57,000,000, up from $51,000,000 in 2024, with trailing twelve months adjusted EBITDA totaling $369,000,000 [11][12] Business Line Data and Key Metrics Changes - Agribusiness segment reported a pretax loss of $5,000,000, down from adjusted pretax income of $5,000,000 in Q1 2024, with adjusted EBITDA of $31,000,000 compared to $29,000,000 in the same period [14][15] - Renewables segment generated pretax income of $15,000,000, up from adjusted pretax income of $14,000,000 in Q1 2024, with EBITDA of $37,000,000 compared to $34,000,000 last year [16][17] Market Data and Key Metrics Changes - Global trade uncertainty impacted grain flows and commodity values, particularly affecting the Agribusiness segment [6][7] - The Western Corn Belt faced declining grain basis and reduced exports of wheat and sorghum due to trade flow uncertainties [7][14] Company Strategy and Development Direction - The company is focused on integrating Nutrien and trade groups to achieve commercial, operational, and functional synergies [18] - Continued investment in safety culture and growth projects, including improvements at the Port of Houston and potential acquisitions in the ethanol production sector [20][22] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the Agribusiness outlook, expecting reduced market uncertainties and increased storage and handling opportunities in the latter half of the year [19] - The Renewables segment is expected to maintain efficient production, with solid demand for ethanol and co-products [20][21] Other Important Information - The company generated cash flow from operations before changes in working capital of $57,000,000 in Q1 2025, an increase of over $8,000,000 from 2024, resulting in a cash position of $219,000,000 at the end of the quarter [12][13] - Capital spending in Q1 was $47,000,000, up from $27,000,000 in 2024, with expectations to reach $200,000,000 for the year [13] Q&A Session Summary Question: Fertilizer business visibility for Q2 profits - Management noted that the planting season has started well, with opportunities in the fertilizer and nutrient business expanding due to increased corn acres and solid supplier planning [27] Question: Ethanol business performance and corn basis differences - Management explained that the Western Corn Belt has seen less demand this year, leading to higher corn basis in the Eastern Belt due to reduced exports and competition for grain [29] Question: Renewable diesel feedstock trading performance - Management indicated that internal visibility on the renewable diesel market is similar to industry expectations, with positive sentiment around RVO announcements expected in May [32] Question: Skyland acquisition performance - Management acknowledged that while the first quarter was tough, they remain positive about long-term fundamentals and integration synergies from the Skyland acquisition [40][42] Question: Investments in Houston and international trade flows - Management confirmed that investments are proceeding as planned, with confidence in the strategy to support increased demand for soybean oil and meal exports [44] Question: Ethanol exports to Canada - Management noted that Q1 exports were strong but may represent a pull forward, with expectations to maintain pace with last year's exports [50] Question: Grain storage income potential - Management expressed optimism about storage income opportunities in the latter half of the year, contingent on the size and quality of the wheat crop and fall harvest [52]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net income of $300,000 or $0.01 per diluted share, and adjusted net income of $4,000,000 or $0.12 per diluted share, compared to net income of $6,000,000 or $0.16 per diluted share in Q1 2024 [8] - Revenues declined slightly due to lower commodity prices, while gross profit improved despite increased expenses [9] - Adjusted EBITDA for Q1 2025 was $57,000,000, up from $51,000,000 in 2024, with trailing twelve months adjusted EBITDA totaling $369,000,000 [9][10] Business Line Data and Key Metrics Changes - Agribusiness segment reported a pretax loss of $5,000,000, down from adjusted pretax income of $5,000,000 in Q1 2024, with adjusted EBITDA of $31,000,000 compared to $29,000,000 in the same period last year [12][13] - Renewables segment generated pretax income of $15,000,000, up from adjusted pretax income of $14,000,000 in Q1 2024, with EBITDA of $37,000,000 compared to $34,000,000 last year [14][15] Market Data and Key Metrics Changes - Global trade uncertainty impacted grain flows and commodity values, particularly affecting the Agribusiness segment [5][6] - The Western Corn Belt faced declining grain basis and reduced exports of wheat and sorghum due to trade flow uncertainties [6][12] Company Strategy and Development Direction - The company is focused on integrating Nutrien and trade groups to achieve commercial, operational, and functional synergies [16] - Continued investment in safety culture and growth projects, including improvements at the Port of Houston and potential acquisitions in the ethanol production sector [18][20] Management Comments on Operating Environment and Future Outlook - Management remains optimistic about the Agribusiness outlook, anticipating reduced market uncertainties and increased storage and handling opportunities in the latter half of the year [17] - The Renewables segment is expected to maintain efficient production, with solid demand for ethanol and co-products [19][20] Other Important Information - The company generated cash flow from operations before changes in working capital of $57,000,000 in Q1 2025, an increase of over $8,000,000 from 2024, resulting in a cash position of $219,000,000 at the end of the quarter [10][11] - Capital spending in Q1 was $47,000,000, up from $27,000,000 in 2024, with expectations to reach $200,000,000 for the year [11] Q&A Session Summary Question: Fertilizer business visibility for Q2 profits - Management indicated that the current planting season is off to a strong start, with expectations for increased fertilizer and nutrient business opportunities compared to the last two years [25] Question: Ethanol business performance and corn basis differences - Management explained that the Western Corn Belt has seen less demand this year, leading to higher corn basis in the Eastern Belt due to reduced exports and competition for grain [27][28] Question: Renewable diesel feedstock trading performance - Management noted that internal visibility on renewable diesel feedstock transactions is similar to industry expectations, with anticipation of more information on RVO announcements in May [30] Question: Skyland acquisition performance - Management acknowledged that the Skyland acquisition faced challenges in Q1 but remains positive about long-term integration and synergies, with expected EBITDA in the range of $30,000,000 to $40,000,000 for the year [39][40] Question: Investments in Houston and international trade flows - Management confirmed that investments in Houston are proceeding as planned, with confidence in the strategy to support increased demand for soybean oil and meal exports [42]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported net income of $300,000 or $0.01 per diluted share, and adjusted net income of $4,000,000 or $0.12 per diluted share, compared to net income of $6,000,000 or $0.16 per diluted share in Q1 2024 [10] - Revenues declined slightly due to lower commodity prices, while gross profit improved despite increased expenses [10][11] - Adjusted EBITDA for Q1 2025 was $57,000,000, up from $51,000,000 in 2024, with trailing twelve months adjusted EBITDA totaling $369,000,000 [11] Business Line Data and Key Metrics Changes - The Agribusiness segment reported a pretax loss of $5,000,000, down from adjusted pretax income of $5,000,000 in Q1 2024, while adjusted EBITDA for Agribusiness was $31,000,000 compared to $29,000,000 in the same period [14][15] - The Renewables segment generated pretax income of $15,000,000, up from adjusted pretax income of $14,000,000 in Q1 2024, with EBITDA of $37,000,000 compared to $34,000,000 last year [16][17] Market Data and Key Metrics Changes - Global trade uncertainty due to threatened tariffs and pork fees disrupted typical grain flows, negatively impacting commodity values and limiting merchandising activity [5] - The Western Corn Belt faced declining grain basis and reduced exports of wheat and sorghum, while the agronomy business experienced increased volumes and margins [6][14] Company Strategy and Development Direction - The company is focused on integrating Nutrien and trade groups to achieve commercial, operational, and functional synergies through 2025 [18] - Continued investment in safety culture and growth projects, including improvements at the Port of Houston and potential acquisitions of ethanol production facilities [21][23] Management's Comments on Operating Environment and Future Outlook - Management remains positive about the outlook despite near-term challenges in Agribusiness, anticipating improved market conditions with reduced uncertainties regarding tariffs [20] - The company expects strong fertilizer and agronomy business performance in Q2, driven by increased corn plantings and nutrient requirements [20] Other Important Information - Cash flow from operations before changes in working capital was $57,000,000 in Q1 2025, an increase of over $8,000,000 from 2024, resulting in a cash position of $219,000,000 at the end of the quarter [12] - Capital spending in Q1 was $47,000,000, up from $27,000,000 in 2024, with expectations to reach $200,000,000 for the year [13] Q&A Session Summary Question: Fertilizer business visibility for Q2 profits - Management indicated that the current planting season is off to a strong start, with expectations for higher profits compared to the last two years due to increased corn acres and solid supplier planning [26][28] Question: Ethanol business performance and corn basis differences - Management explained that the Western Corn Belt has seen less demand this year, leading to higher corn basis in the Eastern Belt due to reduced exports and competition for grain [29][30] Question: Renewable diesel feedstock trading performance - Management acknowledged improved performance in renewable diesel feedstock trading, with expectations for more clarity on RVO announcements in May [32][33] Question: Skylands acquisition performance - Management noted that while the first quarter was tough, they remain positive about the long-term fundamentals of the Skylands acquisition, with expected EBITDA in the range of $30,000,000 to $40,000,000 for the year [38][43] Question: Investments in Houston and international trade flows - Management confirmed that investments in Houston are ongoing and strategically aligned with expected increases in RVOs, which will boost demand for soybean oil and meal exports [44][46] Question: Ethanol exports to Canada - Management indicated that Q1 exports were strong but may represent a pull forward, with expectations to maintain pace with last year's exports [49][50] Question: Grain storage income potential - Management expressed optimism about storage income opportunities in the latter half of the year, contingent on the size and quality of the wheat crop and fall harvest [52][53]

[First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) The company reported mixed Q1 2025 results with strong Renewables performance offsetting Agribusiness challenges, while managing seasonal cash use and maintaining a strong balance sheet [Overall Performance](index=1&type=section&id=Overall%20Performance) The company reported mixed Q1 2025 results, with strong Renewables performance offsetting challenges in the Agribusiness segment Q1 2025 Key Financial Metrics ($ in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income Attributable to Company | $0.3 | $5.6 | | Adjusted Net Income Attributable to Company | $4.1 | $5.6 | | Diluted EPS | $0.01 | $0.16 | | Adjusted Diluted EPS | $0.12 | $0.16 | | Adjusted EBITDA | $57.3 | $51.2 | - The Renewables segment performed well due to strong operating efficiency and merchandising, producing one of its **best first quarters**[4](index=4&type=chunk) - The Agribusiness segment faced challenging markets as global trade uncertainties disrupted grain flows, leading commercial customers to focus on **just-in-time purchasing**[4](index=4&type=chunk) - The company is pursuing growth opportunities, with capital projects in Agribusiness expected to be completed by **mid-2026** and Renewables projects focused on improving efficiency and lowering carbon intensity[4](index=4&type=chunk) [Cash, Liquidity, and Debt Management](index=2&type=section&id=Cash%2C%20Liquidity%2C%20and%20Long-Term%20Debt%20Management) The company experienced seasonal cash usage in Q1 2025, maintaining a strong balance sheet with modest debt and increased capital project spending - The company's debt remains at a **modest level**, staying well below its long-term debt to EBITDA target of **less than 2.5 times**[7](index=7&type=chunk) Q1 Cash Flow and Capital Expenditures ($ in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash used in operating activities | $350 | $240 | | Cash from operations before working capital changes | $57 | $48 | | Capital project spending | $47 | $27 | [Segment Performance](index=2&type=section&id=First%20Quarter%20Segment%20Overview) The Agribusiness segment faced market challenges leading to a pretax loss, while Renewables delivered a strong quarter driven by efficient operations [Agribusiness](index=2&type=section&id=Agribusiness%20Challenged%20in%20Changing%20Markets) The Agribusiness segment reported a pretax loss due to market uncertainty and limited trade flows, despite improvement in the nutrient business Agribusiness Q1 Financial Results ($ in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Pretax Income (Loss) | $(10.0) | $3.0 | | Adjusted Pretax Income Attributable to Company | $0.0 | $5.0 | | Adjusted EBITDA | $31.0 | $29.0 | - Results were negatively impacted by limited trade flows due to market uncertainty and challenged basis levels in **western locations**[9](index=9&type=chunk) - The nutrient business demonstrated **year-over-year improvement** with good fertilizer volume and positioning, anticipating an increase in corn acres[9](index=9&type=chunk) [Renewables](index=3&type=section&id=Renewables%20has%20Strong%20Quarter%20on%20Efficient%20Operations%20and%20Favorable%20Ethanol%20Margins) The Renewables segment delivered a strong quarter with increased pretax income and EBITDA, driven by efficient operations and favorable ethanol margins Renewables Q1 Financial Results ($ in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Pretax Income | $25.0 | $24.0 | | Pretax Income Attributable to Company | $15.0 | $14.0 (Adjusted) | | EBITDA | $37.0 | $34.0 (Adjusted) | - Ethanol production facilities improved due to **efficient operations**, higher yields, and better year-over-year board crush margins[13](index=13&type=chunk) - Plant co-product values were lower, as corn-based feed ingredients faced competition from an **oversupply of alternative protein sources**[13](index=13&type=chunk) [Other Financial Information](index=3&type=section&id=Other%20Financial%20Information) The company recorded an anomalous Q1 income tax benefit due to a discrete adjustment, anticipating a normalized full-year effective tax rate [Income Taxes](index=3&type=section&id=Income%20Taxes) The company recorded an anomalous Q1 income tax benefit due to a discrete adjustment, with a normalized full-year rate anticipated - Recorded an income tax benefit of **$2.1 million** for the quarter, resulting in an effective rate of **(66)%**[15](index=15&type=chunk) - The rate was impacted by a discrete adjustment for a decrease in unrecognized tax benefits related to **prior period tax positions**[15](index=15&type=chunk) - The company anticipates a full-year adjusted effective tax rate of approximately **18% - 22%**[15](index=15&type=chunk) [Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) The unaudited consolidated financial statements show decreased sales and net income, significant seasonal cash usage, and a stable balance sheet [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 sales and merchandising revenues decreased to **$2.66 billion**, with net income attributable to the company significantly declining to **$0.3 million** Q1 Statement of Operations Highlights (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales and merchandising revenues | $2,659,098 | $2,718,217 | | Gross profit | $152,872 | $128,320 | | Income before income taxes | $3,213 | $13,968 | | Net income attributable to The Andersons, Inc. | $284 | $5,581 | | Diluted earnings per share | $0.01 | $0.16 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$3.80 billion**, with a significant decrease in cash due to seasonal working capital usage Balance Sheet Highlights (in thousands) | Account | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $219,219 | $561,771 | $283,902 | | Total current assets | $2,528,744 | $2,850,277 | $2,213,908 | | Total assets | $3,797,682 | $4,121,314 | $3,261,073 | | Total liabilities | $2,203,248 | $2,521,478 | $1,785,423 | | Total equity | $1,594,434 | $1,599,836 | $1,475,650 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw increased cash usage from operating activities, leading to a net decrease in cash and cash equivalents of **$342.6 million** Q1 Statement of Cash Flows Highlights (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(350,020) | $(239,627) | | Net cash used in investing activities | $(43,831) | $(22,052) | | Net cash provided by (used in) financing activities | $50,445 | $(98,280) | | Decrease in cash and cash equivalents | $(342,552) | $(359,952) | [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides reconciliations for non-GAAP financial measures, including adjusted net income, segment performance, EBITDA, and cash from operations before working capital changes [Reconciliation of Adjusted Net Income](index=8&type=section&id=Adjusted%20Net%20Income%20Attributable%20to%20The%20Andersons%2C%20Inc.) The company reconciled GAAP net income to an adjusted non-GAAP figure, with Q1 2025 adjusted net income reaching **$4.1 million** Q1 2025 Reconciliation to Adjusted Net Income (in thousands) | Description | Amount | | :--- | :--- | | Net income attributable to The Andersons, Inc. (GAAP) | $284 | | Adjustments (Transaction compensation, inventory damage, etc.) | $3,772 | | **Adjusted net income attributable to The Andersons, Inc. (Non-GAAP)** | **$4,056** | [Segment Data and Reconciliations](index=9&type=section&id=Segment%20Data) This section details Q1 2025 segment performance, showing Agribusiness revenue of **$2.0 billion** with a pretax loss, and Renewables revenue of **$666 million** with pretax income Q1 2025 Segment Performance (in thousands) | Segment | Sales and merchandising revenues | Income (loss) before income taxes | | :--- | :--- | :--- | | Agribusiness | $1,993,287 | $(9,676) | | Renewables | $665,811 | $24,881 | | Other | $— | $(11,992) | | **Total** | **$2,659,098** | **$3,213** | [Reconciliation of Adjusted EBITDA](index=10&type=section&id=Adjusted%20Earnings%20Before%20Interest%2C%20Taxes%2C%20Depreciation%2C%20and%20Amortization%20%28EBITDA%29) Total company Adjusted EBITDA for Q1 2025 increased to **$57.3 million**, with contributions from both Agribusiness and Renewables segments Q1 Adjusted EBITDA by Segment (in thousands) | Segment | Q1 2025 Adjusted EBITDA | Q1 2024 Adjusted EBITDA | | :--- | :--- | :--- | | Agribusiness | $31,440 | $29,069 | | Renewables | $37,470 | $33,632 | | Other | $(11,656) | $(11,527) | | **Total** | **$57,254** | **$51,174** | [Trailing Twelve Months EBITDA and Adjusted EBITDA](index=11&type=section&id=Trailing%20Twelve%20Months%20of%20EBITDA%20and%20Adjusted%20EBITDA) The company's trailing twelve-month Adjusted EBITDA as of March 31, 2025, was **$369.5 million**, a decrease from the prior year TTM Adjusted EBITDA (in thousands) | Period | TTM Adjusted EBITDA | | :--- | :--- | | Twelve months ended March 31, 2025 | $369,466 | | Twelve months ended March 31, 2024 | $400,990 | [Reconciliation of Cash from Operations Before Working Capital Changes](index=12&type=section&id=Cash%20from%20Operations%20Before%20Working%20Capital%20Changes) Cash from operations before working capital changes increased to **$57.0 million** in Q1 2025, indicating stronger underlying cash generation Cash from Operations Before Working Capital Changes (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash used in operating activities (GAAP) | $(350,020) | $(239,627) | | Total changes in operating assets and liabilities | $(406,994) | $(288,036) | | **Cash from operations before working capital changes (Non-GAAP)** | **$56,974** | **$48,409** |

Industry Overview - The Materials Sector on Wall Street faced a challenging 2024, becoming one of the worst-performing sectors in the S&P 500 with a decline of 1.5% due to global economic concerns, particularly a slowdown in China and insufficient interest rate reductions [1] - Demand for materials such as steel, copper, and chemicals has been dampened, adversely impacting companies across the sector [1] Economic Factors - Global central banks, including the Fed, have initiated interest rate cuts after a period of tightening, which can lower borrowing costs for materials companies and stimulate demand in construction and manufacturing [2] - China has introduced economic stimulus packages aimed at revitalizing its economy, which could lead to increased demand for materials due to its significant role as a global importer [2] Sector-Specific Opportunities - Copper producers may benefit from short-term economic rebounds and long-term supply-demand imbalances, especially as copper is essential in electric vehicles and renewable energy infrastructure [3] - The imposition of a 25% tariff on all steel and aluminum imports by the U.S. is expected to boost domestic production by reducing foreign competition [3] Geopolitical Dynamics - Tariffs have intensified the geopolitical race for rare earths and critical minerals, with China's export restrictions on materials like terbium and dysprosium disrupting supply chains in industries such as electric vehicles and defense [4] - The U.S. is accelerating efforts to boost domestic production, including initiatives to streamline mining permits and develop processing capabilities [4] Future Outlook - Despite the challenges faced in 2024, the outlook for the Materials sector in 2025 appears more promising due to economic stimulus measures, lower interest rates, and sector-specific growth areas [5] - Investors may find opportunities in companies strategically positioned to benefit from these macroeconomic and industry-specific trends [5] Company Highlights - Steel Dynamics, Inc. (STLD) has an expected earnings growth rate of 3% for the current year, with a Zacks Consensus Estimate improvement of 17.7% over the past 60 days, holding a Zacks Rank 2 and a VGM Score of B [7] - The Andersons, Inc. (ANDE) is expected to have a 22.8% earnings growth rate for the next year, with a 4.5% improvement in the current-year earnings estimate, holding a Zacks Rank 1 and a VGM Score of B [8] - Intrepid Potash, Inc. (IPI) has an expected earnings growth rate of 46.7% for the current year, with a significant 64.4% improvement in the current-year earnings estimate, holding a Zacks Rank 2 and a VGM Score of B [9]

Core Viewpoint - The Andersons (ANDE) is identified as a strong value stock with a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating potential undervaluation and a favorable earnings outlook [3][7]. Valuation Metrics - ANDE has a Price-to-Book (P/B) ratio of 0.81, which is lower than the industry average of 0.88, suggesting a solid market value compared to its book value [4]. - The Price-to-Sales (P/S) ratio for ANDE is 0.12, significantly lower than the industry's average P/S of 0.2, indicating strong sales performance relative to its price [5]. - ANDE's Price-to-Cash Flow (P/CF) ratio stands at 5.43, which is attractive compared to the industry average of 5.81, reflecting a favorable cash flow outlook [6]. Investment Outlook - The combination of ANDE's strong valuation metrics and positive earnings outlook positions it as an impressive value stock in the current market [7].

Core Viewpoint - The Andersons, Inc. is set to release its financial results for Q1 2025 on May 6, 2025, followed by a webcast on May 7, 2025, to discuss the results and provide updates on the company [1]. Company Information - The Andersons, Inc. has been recognized as one of The Americas' Fastest Growing Companies by the Financial Times in 2024 and as one of America's Climate Leaders by USA Today [3]. - The company operates in the agribusiness and renewable sectors, emphasizing its commitment to customer service, employee development, community support, and increasing company value [3].