THE ANDERSONS, INC. (Exact name of the registrant as specified in its charter)

Press release·02/20/2025 05:22:39

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The Andersons, Inc. filed its annual report for the fiscal year ended December 31, 2024. The company reported net sales of $3.4 billion, a 5% increase from the previous year. Net income was $43.1 million, a 12% decrease from the previous year. The company’s gross profit margin decreased to 14.1% from 15.1% in the previous year, primarily due to higher input costs. The company’s operating expenses increased by 4% to $243.1 million, driven by higher salaries and benefits, as well as increased marketing and advertising expenses. The company’s cash and cash equivalents decreased to $143.1 million from $173.1 million in the previous year, primarily due to the payment of dividends and share repurchases. The company’s total debt increased to $243.1 million from $173.1 million in the previous year, primarily due to the issuance of new debt to fund capital expenditures and working capital needs.

The Andersons, Inc. Delivers Solid Financial Performance in 2024

The Andersons, Inc., a diversified agricultural company, has reported its financial results for the fiscal year 2024, showcasing resilience and growth across its core business segments. Despite facing challenges in the agricultural commodity markets, the company has navigated the landscape effectively, delivering consistent operating results and positioning itself for future success.

Overview of Financial Performance

For the fiscal year 2024, The Andersons reported total sales and merchandising revenues of $11.26 billion, a decrease from the previous year’s $14.75 billion. This decline can be attributed to the stabilization of agricultural commodity prices, which had reached historically high levels in the prior year. Despite the revenue decrease, the company maintained a solid gross profit of $693.9 million, demonstrating its ability to manage costs and maintain margins.

The company’s non-GAAP income before income taxes attributable to the company from continuing operations was $144.1 million, compared to $138.2 million in the previous year. This increase in profitability can be attributed to the company’s diversified business model and its ability to adapt to changing market conditions.

Segment Performance

The Andersons operates in three reportable business segments: Trade, Renewables, and Nutrient & Industrial. Each segment has contributed to the company’s overall performance, showcasing the strength of its diversified portfolio.

Trade Segment

The Trade segment’s operating results were consistent with the prior year, demonstrating the segment’s resilience in shifting agricultural markets. The segment benefited from strong elevation margins and good space income due to the return of carries to the market. However, the merchandising business was unable to repeat its strong prior-year performance due to limited market volatility. The premium ingredients business delivered improved results, driven by recent acquisitions and growth investments.

The portfolio mix of assets, ingredients, and merchandising businesses provides a solid foundation for the Trade segment to benefit from large crops, carry markets, and tight, demand-driven markets. The company expects an increase in corn acres planted and increased volatility in 2025, which could result in favorable market conditions for the segment.

Renewables Segment

The Renewables segment had another solid year in 2024, led by strong operations at the company’s ethanol plants. The plants continued to run efficiently, with high ethanol yields and favorable corn basis. While co-product values were lower, the segment’s results increased from the prior period, excluding the $87.2 million impairment charge related to the ELEMENT ethanol plant in the previous year.

The company expects improved plant economics in 2025, driven by factors such as elevated export demand, upcoming planned maintenance in the industry, and the spring driving rebound. Co-product values may also see improvement as there has been a recent rebound in corn values.

Nutrient & Industrial Segment

The Nutrient & Industrial segment’s operating results decreased from the prior year. The core agriculture product lines were down year-over-year after a late and wet spring, and softening industry fundamentals led to a reset in base nutrients at more normalized levels. The engineered granules business saw improvement in the year, as the company has continued to focus on operational improvements in this business.

The company sees potential opportunities for increased volume in 2025, as high yields during the harvest have pulled more nutrients from the soil, and an expected increase in corn acres planted may drive demand for the segment’s products.

Liquidity and Capital Resources

The Andersons maintained a strong liquidity position, with $561.8 million in cash and cash equivalents and $1,991.3 million available for borrowing at the end of 2024. The company’s working capital decreased by $51.5 million to $1,119.1 million, primarily due to changes in current assets and liabilities related to the stabilization of agricultural commodity prices.

The company’s operating activities provided $331.5 million in cash during 2024, compared to $946.8 million in the previous year. The decrease was mainly due to favorable changes in operating assets and liabilities that occurred in the prior year as commodity prices dropped significantly.

Investing activities used $163.1 million in cash, primarily for capital expenditures on property, plant, and equipment, as well as business acquisitions. The company expects to invest approximately $175 million to $200 million in property, plant, and equipment in 2025, with less than 50% of the investment going towards reinvesting in its current facilities.

Financing activities used $250.4 million in cash, mainly due to decreased borrowings on the company’s credit facilities and increased distributions to the non-controlling interest shareholder of TAMH.

Outlook and Key Strengths

The Andersons’ diversified business model, with its mix of asset-based, merchandising, and premium ingredients operations, positions the company well to navigate the shifting agricultural markets. The company’s focus on operational efficiency, cross-functional collaboration, and growth initiatives are expected to drive continued success.

The company’s strong liquidity position and access to capital provide the flexibility to invest in strategic initiatives and weather potential market volatility. Additionally, the company’s commitment to sustainability and its focus on environmental, social, and governance (ESG) practices position it as a responsible and forward-thinking player in the agricultural industry.

Conclusion

The Andersons, Inc. has demonstrated its ability to adapt and thrive in the dynamic agricultural landscape. The company’s diversified business model, operational excellence, and strategic investments have enabled it to deliver solid financial performance in 2024. As the company looks to the future, it is well-positioned to capitalize on emerging opportunities and continue its growth trajectory, while maintaining its commitment to sustainability and responsible business practices.