The Andersons(US:ANDE)2025-05-07 15:51PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Presents the unaudited condensed consolidated financial statements for Q1 2025, reflecting a segment realignment Condensed Consolidated Statements of Operations 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 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 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 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 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 recast206693 - 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 Texas85 - 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 20242934 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 Analyzes segment performance, liquidity, and capital resources, highlighting challenges in Agribusiness and stability in Renewables Executive Overview & Segment Performance 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 investment97 - 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 margins100 - The company's grain storage capacity increased to approximately 280 million bushels from 170 million bushels year-over-year, primarily due to the Skyland acquisition99 Operating Results 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 business106107 - 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, net110111 - 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 credits112 Liquidity and Capital Resources 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 year117 - 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 liabilities119120 - Management expects to invest approximately $175 million to $200 million in property, plant and equipment in 2025121 - 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 covenants124125 Item 3. Quantitative and Qualitative Disclosures about Market Risk 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, 2025129 Item 4. Controls and Procedures 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, 2025130 - No material changes in the Company's internal control over financial reporting were identified during the first quarter of 2025131 PART II. OTHER INFORMATION Item 1. Legal Proceedings 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 claims134 Item 1A. Risk Factors 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 results136 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 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 2025139 Item 6. Exhibits 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 documents140