The Andersons, Inc. announces financial results for the second quarter ended June 30, 2020 and business structure and organizational changes.
Second quarter highlights include:
- Company reported net income attributable to The Andersons of $30.4 million, or $0.92 per diluted share, and adjusted net income of $29.3 million, or $0.88 per diluted share.
- Adjusted EBITDA attributable to the company was $70.7 million for the quarter.
- Trade Group reported pretax income of $0.4 million and adjusted pretax income of $1.4 million despite a tough operating environment.
- Ethanol Group reported pretax income attributable to the company of $0.9 million due to its timely maintenance shutdowns and improved ethanol margins.
- Plant Nutrient Group recorded pretax income of $19.4 million driven by a strong planting season.
- Rail Group earned $2.6 million of pretax income due to lower car sale income.
- Company announced a reorganization of its business groups and several leadership changes.
"I am proud of what we were able to accomplish in the second quarter, as all four of our business groups were profitable," says President and CEO Pat Bowe. "We are focused on transforming The Andersons into a more cost-efficient company positioned for scalable growth. Our vision is to be the most nimble and innovative North American ag supply chain company. The steps we are taking to transform the organization should ensure that we have the right vision at the right time to continue to serve our customers.
"Our Plant Nutrient Group's income was up more than 20 percent due to an excellent spring planting season," continues Bowe. "Our Ethanol Group's navigation of the unprecedented decrease in demand due to the COVID-19 crisis helped produce good results under those difficult conditions. The Trade Group continued to feel the effects of a small 2019 corn crop in the East. Both the Trade Group and the Rail Group both felt the persistent negative impact of the pandemic on customer demand. Both groups were profitable for the quarter."
Bowe thanked employees, particularly those working in the plants and operations, for continuing to demonstrate their commitment to the company and to customers and communities by keeping our businesses running safely and effectively during the pandemic.
"We have maintained as our top priority, the health and safety of our employees, who have performed admirably in these difficult circumstances," he says. "We also extend our thanks to the health and safety personnel in our communities who have helped respond to the pandemic."
Company Continues to Actively Manage COVID-19 Pandemic
The company's executive-level response team has continued to closely monitor the crisis, share information and best practices across the company's operations and manage its coordinated response. It has also implemented policies for remote work and supplemental sick time for those employees who have been impacted by the virus. Employees continue to practice appropriate social distancing and follow protocols for sanitation and good hygiene developed in conjunction with the pandemic.
Strategic Business Structure & Senior Leadership Changes Announced
The company announced strategic business structure and senior leadership changes. Among the changes were the following:
- The Trade Group and Ethanol Group will be combined and led by President Bill Krueger, who was formerly president of the Trade Group. Jim Pirolli, who was the Ethanol Group president, has been appointed senior vice president of the combined group, which will enable him to assume expanded responsibilities.
- The Plant Nutrient Group and Rail Group will be combined and led by Joe McNeely, who was formerly the president of the Rail Group.
"This new structure will enable us to focus on increasing gross profit and enhancing service to our customers, while also managing our cost structure," says Bowe. "The combination of the Trade and Ethanol Groups will allow for greater strategic alignment, risk management and integrated service to our customers. This restructuring of our business will also result in a leaner cost environment."
Liquidity and Cash Management
"We generated strong operating cash flows and continued to manage capital expenditures during the second quarter," said Executive Vice President and CFO Brian Valentine. "As the pandemic persists, we remain very focused on overall liquidity, including expense and cash management."
In May, the company announced that it was targeting total expense reductions of $30 million in 2020, with approximately half of those savings expected to be permanent in nature. The company anticipates further general and administrative cost reductions that will be realized beginning in early 2021.
The company still expects to spend approximately $100 million on capital projects in 2020 after averaging more than $200 million over the last three years. This reduction prudently preserves working capital and supports our continued strong financial position.
For a full second quarter segment overview, click here.
About The Andersons Inc.
Founded in 1947 in Maumee, OH, The Andersons, Inc. is a diversified company rooted in agriculture that conducts business in the commodity trading, ethanol, plant nutrient and rail sectors. Guided by its Statement of Principles, The Andersons strives to provide extraordinary service to its customers, help its employees improve, support its communities and increase the value of the company. For more information, please visit andersonsinc.com.
