The Andersons(US:ANDE)2021-11-03 16:00Sales and Revenue Performance - The Trade Group's third quarter sales and merchandising revenues increased by $809.2 million to $2,242.1 million compared to the same period last year, driven by higher commodity prices [122]. - The Ethanol Group's income from operations decreased despite higher revenues, primarily due to increased corn basis levels, with revenues of $614.6 million for the third quarter [112]. - The Plant Nutrient Group's tons sold decreased slightly, but improved margins offset the lower volumes, with total revenues of $142.1 million for the third quarter [113]. - For the nine months ended September 30, 2021, total sales and merchandising revenues reached $8,829.3 million, with a gross profit of $398.7 million [129]. - Trade Group operating results increased by $73.3 million, with sales and merchandising revenues rising by $2,360.4 million and cost of sales increasing by $2,299.2 million, resulting in a gross profit increase of $61.2 million [131]. - Ethanol Group operating results increased by $44.8 million, with sales and merchandising revenues up by $787.4 million and cost of sales increasing by $717.6 million, leading to a gross profit increase of $69.8 million [133]. - Plant Nutrient Group operating results increased by $13.9 million, with sales and merchandising revenues rising by $125.3 million and cost of sales increasing by $99.7 million, resulting in a gross profit increase of $25.5 million [135]. Expenses and Costs - Operating, administrative, and general expenses increased by $9.2 million, primarily due to higher incentive compensation costs [123]. - Interest expense increased by $0.9 million due to higher group borrowings on the Company's short-term line of credit compared to the prior year [123]. - Ethanol Group operating results declined by $4.8 million year-over-year, with sales and merchandising revenues increasing by $264.7 million and cost of sales rising by $270.1 million, resulting in a gross profit decrease of $5.4 million [124]. - Plant Nutrient Group operating results decreased by $0.4 million, with sales and merchandising revenues up by $39.3 million and cost of sales increasing by $38.0 million, leading to a gross profit increase of $1.3 million [125]. - Other segment operating results declined by $7.3 million, primarily due to increased operating expenses from variable incentive-based compensation and stranded costs from the Rail Leasing business sale [127]. Cash Flow and Investments - Operating activities provided cash of $119.1 million in the first nine months of 2021, down from $195.8 million in the same period of 2020, primarily due to changes in working capital driven by rising agricultural commodity prices [142]. - Investing activities generated cash of $519.5 million in the first nine months of 2021, a significant increase from cash used of $70.2 million in the prior year, mainly due to proceeds from the sale of the Rail Leasing business [143]. - Financing activities used cash of $450.6 million in the first nine months of 2021, compared to $166.4 million in the same period of 2020, largely due to strategic debt repayment efforts [144]. - The Company plans to invest approximately $85 million in property, plant, and equipment in 2021 related to continuing operations [143]. - The Company paid $17.5 million in dividends in the first nine months of 2021, slightly up from $17.2 million in the prior year, maintaining a dividend of $0.175 per common share [145]. Assets and Liquidity - Current assets from continuing operations increased by $976.7 million year-over-year, driven by significant increases in accounts receivable, commodity derivative assets, and inventory balances [139]. - Working capital related to continuing operations as of September 30, 2021, was $762.1 million, an increase of $335.5 million compared to the prior year [138]. - As of September 30, 2021, the Company had $1,169.9 million available for borrowing, with $397.5 million being non-recourse [144]. - The Company is expected to violate a debt service coverage ratio covenant related to a $70 million non-recourse credit agreement if a waiver is not obtained [146]. - Management believes that the sources of liquidity will be adequate to fund operations, capital expenditures, and service indebtedness [147]. Market Conditions - The Company expects continued merchandising opportunities into harvest due to supply scarcity impacting overall prices [111]. - Spot ethanol crush margins have improved as gasoline demand returned to pre-pandemic levels, supporting overall margins [112]. - Agricultural inventories on hand as of September 30, 2021, were 84.1 million bushels, up from 82.3 million bushels a year earlier [111]. - There were no material changes in market risk, specifically commodity and interest rate risk, during the nine months ended September 30, 2021 [148]. - Standby letters of credit outstanding as of September 30, 2021, amounted to $26.0 million [147].