The Andersons(US:ANDE)2021-08-03 16:00Financial Performance - The Company reported total sales and merchandising revenues of $3,273.726 million for the three months ended June 30, 2021, compared to $2,297.869 million in the same period of the previous year, reflecting a significant increase [109]. - The gross profit for the Company was $174.044 million for the three months ended June 30, 2021, compared to $77.831 million in the same period of 2020, indicating a substantial improvement in profitability [109]. - Total sales and merchandising revenues for the six months ended June 30, 2021, reached $5,909,455 thousand, compared to $5,612,699 thousand in the same period last year [119]. - Gross profit for the six months ended June 30, 2021, was $296,756 thousand, an increase from the previous year's $169,396 thousand [120]. - Sales and merchandising revenues for the Trade Group increased by $946.7 million, resulting in a net gross profit impact of $18.4 million due to improved merchandising results and increased commodity prices [112]. - Ethanol Group's sales and merchandising revenues rose by $392.8 million, leading to a gross profit increase of $37.3 million, primarily driven by improved ethanol margins and higher coproduct sales [114]. - Plant Nutrient Group's sales and merchandising revenues increased by $41.6 million, resulting in a gross profit increase of $12.1 million, supported by higher spring demand and strong grower income [115]. Operational Efficiency - Average utilization rates in the Rail segment increased from 88.3% in Q2 2020 to 89.7% in Q2 2021, indicating improved operational efficiency [106]. - Ethanol Group operating results increased by $49.6 million year-over-year, with sales and merchandising revenues up by $522.7 million, leading to a gross profit increase of $75.2 million [123]. - Plant Nutrient Group operating results rose by $14.3 million, with sales and merchandising revenues increasing by $85.9 million, resulting in a gross profit increase of $24.1 million [124]. - Rail Group operating results increased by $4.3 million, with sales and merchandising revenues up by $6.4 million, although gross profit decreased by $0.5 million due to increased cost of sales [125]. Inventory and Demand - Agricultural inventories on hand at June 30, 2021, were 85.8 million bushels, up from 74.4 million bushels at June 30, 2020, showing a year-over-year increase of approximately 18.6% [98]. - The Ethanol Group shipped 186,396 thousand gallons in the second quarter of 2021, a 56% increase from 119,528 thousand gallons in the same period of 2020 [102]. - The Company anticipates continued merchandising opportunities into harvest due to supply scarcity impacting overall prices, with expectations of high prices and strong elevation margins continuing into 2022 [98]. - The Ethanol Group experienced improved crush margins and overall ethanol demand, reflecting a recovery from the previous year's COVID-19 impact [99]. - The Plant Nutrient Group expects continued higher fertilizer prices and strong demand into the fall application season, driven by favorable weather and strong grower income [101]. - The Company has maintained a positive long-term outlook for agricultural commodities, driven by market volatility from supply scarcity and strong demand [96]. Expenses and Liabilities - Operating, administrative, and general expenses increased by $6.5 million, mainly due to higher incentive compensation costs from improved operating results [113]. - Interest expense rose by $2.4 million due to higher group borrowings on the Company's short-term line of credit compared to the prior year [113]. - Current liabilities increased by $763.8 million, primarily due to higher short-term debt and trade payables, reflecting rising agricultural commodity prices [129]. - The company recorded an income tax expense of $10.6 million for the three months ended June 30, 2021, with an effective tax rate of 18.7% [118]. - The company recorded an income tax expense of $16.4 million for the six months ended June 30, 2021, with an effective tax rate of 21.6%, compared to a tax benefit of $13.7 million and a rate of 30.5% in the prior year [127]. Cash Flow and Investments - Net cash used in operating activities was $245.5 million for the first six months of 2021, compared to cash provided of $145.5 million in the same period of 2020 [131]. - Financing activities provided cash of $267.6 million for the six months ended June 30, 2021, largely due to increased short-term borrowings to meet working capital needs [133]. - The company expects to invest approximately $100 million in property, plant, and equipment in 2021, with about 60% allocated for maintaining facilities [132]. - The company paid $11.7 million in dividends in the first six months of 2021, slightly up from $11.5 million in the prior year, maintaining a dividend of $0.175 per common share [134].