Maumee, OH - May 6, 2019 - The Andersons, Inc. announces financial results for the first quarter ended March 31, 2019.
First Quarter Highlights:
"We closed our acquisition of Lansing Trade Group successfully in early January, and our work to integrate it with our former Grain Group is on schedule," said President and CEO Pat Bowe.
"I am very pleased with how well the new Trade Group team is functioning. However, our overall results were hampered by markets that continue to be negatively impacted by trade disruptions and poor weather that are affecting multiple business units significantly."
"The Trade Group's adjusted results were mixed, as weak markets and foreign trade uncertainty limited grain margin opportunities, and the group also incurred some insured property losses at one Nebraska facility due to heavy rains," Bowe continued.
"The Ethanol Group's results were encouraging, as the group remained profitable by continuing its excellent plant efficiency and hedging its production well.
"The Plant Nutrient Group continues to struggle, as its results were hurt by lower volume, primarily in agriculture and lawn fertilizer, and higher operating expenses.
"Rail's results improved on better leasing and repair results, even while it reduced car sale income by electing to sell fewer cars."
Adjustments Related to the Lansing Acquisition
The company made significant purchase price accounting adjustments and incurred other expenses during the period due to the Lansing acquisition.
The company adjusted the Trade Group's results for several one-time, largely noncash expenses totaling $8.2 million, or $0.19 per diluted share, and for noncash stock compensation expenses totaling $3.4 million, or $0.08 per diluted share, that were associated with the acquisition.
While not included in the adjustments above, the group also incurred an incremental $4.4 million, or $0.10 per diluted share, of depreciation and amortization expenses due to the revaluation of Lansing and Thompsons Limited fixed assets and the valuation of its definite-lived intangibles.
The group expects to incur similar amounts each quarter through 2021.
In addition, the company has recast first quarter 2018 pretax income for the Grain and Ethanol Groups to conform to segment reporting changes made in conjunction with the Lansing acquisition.
The changes, which related to service agreements for DDG marketing and a lease of grain storage assets in Denison, resulted in a shift of $1.2 million in pretax income from the Grain Group to the Ethanol Group.
The Company expects similar shifts for each of the remaining three quarters of 2018.
First Quarter Segment Overview
Trade Group Results Muted by Difficult Margin Environment
With the closing of the Lansing acquisition effective January 1, 2019.
Trade Group results now include the consolidated operating results of both Lansing and Thompsons.
The Trade Group recorded a pretax loss of $17.5 million and an adjusted pretax loss of $5.9 million for the quarter.
As noted above, the group also incurred $4.4 million of incremental depreciation and amortization expenses.
The former Grain Group posted a loss of $1.2 million in the first quarter of 2018.
Due in large part to the Lansing acquisition, the group's first quarter 2019 EBITDA and adjusted EBITDA were $7.0 million and $18.6 million, respectively, which compare favorably to the Grain Group's$5.7 million EBITDA in the first quarter of 2018.
Ethanol Group Performance Down Slightly on Weak Margins
The Ethanol Group earned pretax income of $2.6 million in the first quarter, somewhat less than the $3.1 million of pretax income it earned in the same period in 2018.
Construction is nearly complete on the state-of-the-art bio-refinery in Kansas that the group is building in partnership with ICM, Inc.
The company expects the facility to begin operating early in the third quarter.
Plant Nutrient Group Records Pretax Loss of $3.9 Million as All Product Lines Struggle
The Plant Nutrient Group recorded a pretax loss of $3.9 million in the first quarter compared to pretax income of $1.1 million in the prior year period.
The group's current quarter EBITDA was $5.0 million, a $4.3 million decrease from 2018 first quarter results.
Rail Group Registers Improved Quarter on Stronger Leasing and Repair Results
The Rail Group earned first quarter pretax income of $4.3 million compared to $4.0 million in the same period of the prior year.
The group's first quarter 2019 EBITDA was $16.3 million, up 20 percent from the $13.5 million in the comparable 2018 period.
Adjusted Net Corporate Expenses Decline Year over Year
Unallocated net company-level expenses were $4.9 million, down considerably from the $8.9 million net expenses incurred in the comparable 2018 period.
The year-over-year decrease was due in part due to the absence of severance expenses, which were $1.4 million in the prior period, and lower expenses associated with SAP implementation.
Read the full financial report here.
For more information, please contact John Kraus at 419-891-6544 or investorrelations@andersonsinc.com