The Andersons(ANDE) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights 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 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 | $51.2 | - The Renewables segment performed well due to strong operating efficiency and merchandising, producing one of its best first quarters[4] - The Agribusiness segment faced challenging markets as global trade uncertainties disrupted grain flows, leading commercial customers to focus on just-in-time purchasing[4] - The company is pursuing growth opportunities, with capital projects in Agribusiness expected to be completed by mid-2026 and Renewables projects focused on improving efficiency and lowering carbon intensity[4] Cash, Liquidity, and Debt Management The company experienced seasonal cash usage in Q1 2025, maintaining a strong balance sheet with modest debt and increased capital project spending - The company's debt remains at a modest level, staying well below its long-term debt to EBITDA target of less than 2.5 times[7] Q1 Cash Flow and Capital Expenditures ($ 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 | $27 | Segment Performance The Agribusiness segment faced market challenges leading to a pretax loss, while Renewables delivered a strong quarter driven by efficient operations Agribusiness The Agribusiness segment reported a pretax loss due to market uncertainty and limited trade flows, despite improvement in the nutrient business Agribusiness Q1 Financial Results ($ 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 | $29.0 | - Results were negatively impacted by limited trade flows due to market uncertainty and challenged basis levels in western locations[9] - The nutrient business demonstrated year-over-year improvement with good fertilizer volume and positioning, anticipating an increase in corn acres[9] Renewables The Renewables segment delivered a strong quarter with increased pretax income and EBITDA, driven by efficient operations and favorable ethanol margins Renewables Q1 Financial Results ($ 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] - Plant co-product values were lower, as corn-based feed ingredients faced competition from an oversupply of alternative protein sources[13] Other Financial Information The company recorded an anomalous Q1 income tax benefit due to a discrete adjustment, anticipating a normalized full-year effective tax rate Income Taxes 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] - The rate was impacted by a discrete adjustment for a decrease in unrecognized tax benefits related to prior period tax positions[15] - The company anticipates a full-year adjusted effective tax rate of approximately 18% - 22%[15] Consolidated Financial Statements (Unaudited) 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 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 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 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 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 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 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 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 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 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 |