The Andersons(ANDE) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights The company reported a decline in Q2 2025 net income and adjusted net income, while strategically acquiring full ownership of its ethanol business and advancing port projects Second Quarter 2025 Performance Overview The Andersons, Inc. reported a decline in Q2 2025 net income and adjusted net income, with Renewables and Agribusiness segments still achieving pre-tax income, alongside the full acquisition of The Andersons Marathon Holdings LLC (TAMH) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------------------- | :------ | :------ | :----- | | Net Income Attributable to The Andersons (million USD) | 8 | 36 | (28) | | Adjusted Net Income Attributable to The Andersons (million USD) | 8 | 39.5 | (31.5) | | Diluted EPS (USD) | 0.23 | 1.05 | (0.82) | | Adjusted Diluted EPS (USD) | 0.24 | 1.15 | (0.91) | | Adjusted EBITDA (million USD) | 65 | 98.3 | (33.3) | | Renewables Pre-Tax Income (million USD) | 17 | 39 | (22) | | Agribusiness Pre-Tax Income (million USD) | 19 | 29 | (10) | Strategic Developments The company completed the acquisition of the remaining 49.9% stake in The Andersons Marathon Holdings LLC (TAMH), securing 100% ownership in the ethanol industry to grow earnings through renewable energy investments, while advancing the Houston port project to enhance grain operations and export capabilities - The company acquired the remaining 49.9% stake in TAMH for $425 million (net purchase price of $385 million), doubling its ownership in the ethanol industry, aligning with its renewable energy growth strategy[4][6][7] - TAMH operates four ethanol plants with a total annual capacity of 500 million gallons, and has been renamed The Andersons Renewables, LLC following the acquisition[7] - Construction of the Houston port project is ongoing, expected to be completed by mid-2026, aiming to enhance grain operational efficiency and U.S. soybean meal export capacity[5] Financial Performance Analysis The company's Q2 2025 consolidated net income and diluted EPS significantly decreased year-over-year, with strong operating cash flow in Q2 but a net outflow for the first half Consolidated Financial Results In Q2 2025, the company's consolidated net income and diluted EPS significantly decreased year-over-year, with total assets and liabilities declining on the balance sheet, and operating cash flow remaining strong in Q2 but showing a net outflow for the first half Income Statement In Q2 2025, the company's sales and merchandising revenues increased by 12.2% year-over-year, while gross profit decreased by 9.7%, and income before income taxes and net income attributable to The Andersons declined by 56.7% and 78.1% respectively 2025 Second Quarter Income Statement Key Data (thousand USD) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--------------------------------- | :------ | :------ | :------- | | Sales and Merchandising Revenues | 3,135,869 | 2,795,205 | 12.2 | | Gross Profit | 158,416 | 175,371 | (9.7) | | Income Before Income Taxes | 24,835 | 57,346 | (56.7) | | Net Income Attributable to The Andersons | 7,857 | 35,976 | (78.1) | | Diluted EPS | 0.23 | 1.05 | (78.1) | Balance Sheet As of June 30, 2025, total assets were $3.446 billion, a 16.4% decrease from December 31, 2024, with cash and cash equivalents down 37.5% and inventories down 39.9% Balance Sheet Key Data (thousand USD) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :-------------------- | :----------- | :------------- | :------- | | Cash and Cash Equivalents | 350,970 | 561,771 | (37.5) | | Inventories | 771,868 | 1,286,811 | (39.9) | | Total Assets | 3,446,491 | 4,121,314 | (16.4) | | Short-Term Debt | 104,467 | 166,614 | (37.3) | | Long-Term Debt (Less Current Maturities) | 578,464 | 608,151 | (4.8) | | Total Liabilities | 1,835,981 | 2,521,478 | (27.2) | Cash Flow Statement In the first half of 2025, net cash used in operating activities was $50.7 million, compared to a net inflow of $64.8 million in the prior year, with cash used in investing activities increasing to $75.7 million primarily due to higher property, plant, and equipment purchases 2025 First Half Cash Flow Statement Key Data (thousand USD) | Metric | YTD 2025 | YTD 2024 | Change (thousand USD) | | :----------------------- | :------- | :------- | :------------ | | Net Cash Provided by (Used in) Operating Activities | (50,699) | 64,807 | (115,506) | | Net Cash Used in Investing Activities | (75,707) | (58,138) | (17,569) | | Net Cash Used in Financing Activities | (87,008) | (119,926) | 32,918 | | Decrease in Cash and Cash Equivalents | (210,801) | (113,468) | (97,333) | | Cash and Cash Equivalents at End of Period | 350,970 | 530,386 | (179,416) | - Operating cash flow for Q2 2025 was $299 million, compared to $304 million in Q2 2024[9] - Capital project expenditures totaled $49 million for the quarter, an increase of $20 million from 2024[9] 2025 Second Quarter and First Half Consolidated Income Statement Summary | Metric (thousand USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------- | :------ | :------ | :------- | :------- | | Sales and Merchandising Revenues | 3,135,869 | 2,795,205 | 5,794,967 | 5,513,422 | | Gross Profit | 158,416 | 175,371 | 311,288 | 303,691 | | Income Before Income Taxes | 24,835 | 57,346 | 28,048 | 71,314 | | Net Income | 16,807 | 52,470 | 22,138 | 65,135 | | Net Income Attributable to The Andersons | 7,857 | 35,976 | 8,141 | 41,557 | | Diluted EPS | 0.23 | 1.05 | 0.24 | 1.21 | Consolidated Balance Sheet Summary (thousand USD) | Metric (thousand USD) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :-------------- | :----------- | :------------- | :----------- | | Total Assets | 3,446,491 | 4,121,314 | 3,299,813 | | Total Liabilities | 1,835,981 | 2,521,478 | 1,779,551 | | Total Equity | 1,610,510 | 1,599,836 | 1,520,262 | Consolidated Cash Flow Statement Summary (thousand USD) | Metric (thousand USD) | YTD 2025 | YTD 2024 | | :-------------- | :------- | :------- | | Net Cash Provided by (Used in) Operating Activities | (50,699) | 64,807 | | Net Cash Used in Investing Activities | (75,707) | (58,138) | | Net Cash Used in Financing Activities | (87,008) | (119,926) | | Cash and Cash Equivalents at End of Period | 350,970 | 530,386 | Segment Performance Agribusiness and Renewables segments both experienced year-over-year declines in pre-tax income, with Agribusiness impacted by grain market oversupply and weak demand, and Renewables by lower crush margins and higher natural gas costs despite efficient operations Agribusiness Segment The Agribusiness segment reported $19 million in pre-tax income for Q2 2025, down from $29 million in the prior year, impacted by grain market oversupply, low prices, and limited forward contracting despite increased nutrient sales Agribusiness Segment Key Financial Data (million USD) | Metric | Q2 2025 | Q2 2024 | Change (million USD) | | :--------------------------------- | :------ | :------ | :-------------- | | Pre-Tax Income | 19 | 29 | (10) | | Adjusted Pre-Tax Income Attributable to the Company | 17 | 33 | (16) | | Adjusted EBITDA | 46 | 56 | (10) | - Nutrient sales increased year-over-year, primarily driven by higher nitrogen fertilizer demand due to increased corn acres planted[12] - Grain oversupply in western markets and weak customer demand resulted in depressed grain prices and limited forward contracting[12] - Significant grain volumes are expected to come to market at favorable prices in the second half of 2025, presenting opportunities for sales and merchandising in late 2025 and 2026[13] Renewables Segment The Renewables segment reported $17 million in pre-tax income for Q2 2025, significantly down from $39 million in the prior year, due to lower crush margins, higher eastern corn basis, and increased natural gas costs, despite efficient ethanol plant operations Renewables Segment Key Financial Data (million USD) | Metric | Q2 2025 | Q2 2024 | Change (million USD) | | :--------------------------------- | :------ | :------ | :-------------- | | Pre-Tax Income | 17 | 39 | (22) | | Pre-Tax Income Attributable to the Company | 10 | 23 | (13) | | EBITDA | 30 | 52 | (22) | - Ethanol plants continued to operate efficiently, with production and output increasing year-over-year[16] - Lower crush margins, higher eastern corn basis, and increased natural gas costs contributed to reduced overall profitability[16] - Ethanol crush margins are expected to rebound in July and continue through the summer driving season, supported by strong demand and anticipated lower corn costs[17] 2025 Second Quarter Segment Pre-Tax Income (million USD) | Segment | Q2 2025 Pre-Tax Income | Q2 2024 Pre-Tax Income | Change (million USD) | | :--------- | :--------------- | :--------------- | :-------------- | | Agribusiness | 19 | 29 | (10) | | Renewables | 17 | 39 | (22) | Non-GAAP Financial Measures The company provides non-GAAP financial measures such as adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, and cash from operations before working capital changes to better assess underlying business performance and period-over-period comparability - Non-GAAP financial measures aim to provide additional information, helping investors evaluate the company's operating performance and liquidity, and enhance period-over-period comparability[24] Adjusted Net Income and EPS In Q2 2025, adjusted net income attributable to The Andersons was $8.365 million and adjusted diluted EPS was $0.24, both lower than the prior year period Adjusted Net Income and EPS (thousand USD) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Adjusted Net Income Attributable to The Andersons | 8,365 | 39,494 | 12,421 | 45,088 | | Adjusted Diluted EPS | 0.24 | 1.15 | 0.36 | 1.31 | EBITDA and Adjusted EBITDA In Q2 2025, the company's EBITDA was $69.401 million and adjusted EBITDA was $65.192 million, both decreasing year-over-year, with Agribusiness and Renewables segments also showing a downward trend EBITDA and Adjusted EBITDA (thousand USD) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :---------------- | :------ | :------ | :------- | :------- | | EBITDA | 69,401 | 94,226 | 120,050 | 145,665 | | Adjusted EBITDA | 65,192 | 98,275 | 122,445 | 149,448 | Segment Adjusted EBITDA (thousand USD) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------- | :------ | :------ | :------- | :------- | | Agribusiness | 46,420 | 56,007 | 77,859 | 85,075 | | Renewables | 30,167 | 52,177 | 67,637 | 85,809 | Cash from Operations Before Working Capital Changes In Q2 2025, cash from operations before working capital changes significantly decreased to $42.886 million from $88.765 million in the prior year, with the year-to-date figure also declining from $137.174 million to $99.860 million Cash from Operations Before Working Capital Changes (thousand USD) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------- | :------- | | Net Cash Provided by (Used in) Operating Activities | 299,321 | 304,434 | (50,699) | 64,807 | | Cash from Operations Before Working Capital Changes | 42,886 | 88,765 | 99,860 | 137,174 | Outlook and Forward-Looking Information The company anticipates future earnings to include all ethanol plant contributions, expects an accretive impact, and is exploring new regulatory opportunities like carbon capture well permits Future Expectations and Strategic Initiatives The company expects future quarterly earnings to include contributions from all ethanol plants, including those previously attributable to non-controlling interests, anticipating an accretive impact, and is exploring new regulatory opportunities such as carbon capture well permits - Future quarterly results will include earnings from all ethanol plants, including those previously attributable to non-controlling interests, which is expected to be accretive[18] - The company is exploring new regulatory opportunities, including applying for a Class VI well permit at its Clymers, Indiana facility for potential carbon capture[18] Income Tax Outlook The company recorded an $8 million income tax provision in Q2 with an effective tax rate of 32%, and anticipates a full-year adjusted effective tax rate of approximately 22% to 25% due to the TAMH transaction and elimination of non-controlling interest income Income Tax Information | Metric | Q2 2025 | | :---------- | :------ | | Income Tax Provision | $8 million | | Effective Tax Rate | 32% | - The full-year adjusted effective tax rate is projected to be approximately 22% to 25%, primarily benefiting from the TAMH transaction and the elimination of non-controlling interest income[20] Conference Call Information The company will host a webcast conference call on August 5, 2025, at 8:30 AM ET to discuss results and provide an outlook for the remainder of 2025 - A conference call will be held on August 5, 2025, at 8:30 AM ET to discuss results and the 2025 outlook[21] - Participation in the webcast is available via dial-in or a link on the company's website[21][22] Forward-Looking Statements Disclaimer This press release contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from expectations, including economic, weather, regulatory, competitive, and geopolitical risks - Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations[23] - Risk factors include economic, weather, regulatory conditions, competition, geopolitical risks, and those listed in the company's filings with the U.S. Securities and Exchange Commission[23] Company Information & Non-GAAP Explanation The Andersons, Inc. is a North American agricultural company operating in agribusiness and renewables, committed to customer service, employee growth, community support, and shareholder value, with detailed explanations of non-GAAP financial measures Company Description The Andersons, Inc. is a North American agricultural company with operations in agribusiness and renewables, dedicated to providing excellent customer service, fostering employee growth, supporting communities, and enhancing company value - The Andersons, Inc. is a North American agricultural company with operations in agribusiness and renewables[25] - The company is committed to providing excellent customer service, fostering employee growth, supporting communities, and enhancing company value[25] Investor Relations Contact Investors can contact Mike Hoelter, Vice President, Corporate Controller, and Investor Relations, via phone or email for further information - Investor Relations Contact: Mike Hoelter, Vice President, Corporate Controller, and Investor Relations[26] - Contact Phone: 419-897-6715; Email: investorrelations@andersonsinc.com[26] Non-GAAP Measures Explanation The company utilizes non-GAAP financial measures such as pre-tax income (loss) attributable to the company, adjusted pre-tax income (loss), adjusted net income attributable to the company, adjusted diluted EPS, EBITDA, adjusted EBITDA, and cash from operations before working capital changes to provide additional insights into operational performance and liquidity - Non-GAAP financial measures include: Pre-Tax Income (Loss) Attributable to the Company, Adjusted Pre-Tax Income (Loss), Adjusted Net Income Attributable to the Company, Adjusted Diluted EPS, EBITDA, Adjusted EBITDA, and Cash from Operations Before Working Capital Changes[24] - These metrics aim to provide additional information to help investors assess the company's operating performance and liquidity and enhance period-over-period comparability, but should not replace GAAP financial measures[24]