Andersons (NASDAQ:ANDE) held its first-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.
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The full earnings call is available at https://app.webinar.net/r9QEJNbJ2Mk
Summary
Andersons Inc reported its strongest first quarter ever with record net income and earnings per share, reflecting a diversified portfolio and improved market conditions.
The finalization of the largest renewable volume obligations for 2026 and 2027 is expected to boost domestic demand for U.S. corn and soybeans.
Strategic investments in facilities are underway, including projects in Houston and Illinois, aimed at enhancing customer service and responding to demand trends.
Ethanol plants are seeing strong production volumes and strategic investments are being made to expand production and lower carbon intensity.
The company reported adjusted EBITDA of $91 million for the quarter, a significant increase from $57 million in 2025.
The company expects a favorable outlook for 2026, driven by strong demand for ethanol and strategic growth initiatives.
Management reaffirmed their long-term EPS target of $7 per share by 2028, focusing on completing key projects and maintaining operational excellence.
Full Transcript
Joe (Operator)
Good morning ladies and gentlemen and welcome to the Anderson’s 2026 first quarter earnings conference call. My name is Joe and I will be your coordinator for today. At this time, all participants are in a listen only mode. Later, we will facilitate a question and answer session. To ask a question at that time, please press Star then one on your telephone keypad. And to remove a question for any reason,, please press Star then two. As a reminder, this conference is being recorded for replay purposes. I will now hand the presentation to your Host for today, Mr. Mike Holter, Vice President, Corporate Controller and Investor Relations. Please proceed.
Mike Holter (Vice President, Corporate Controller and Investor Relations)
Good morning everyone and thank you for joining us for the Anderson’s first quarter earnings call. We have provided a slide presentation that will enhance today’s discussion. If you are viewing this presentation via the webcast, the slides and commentary will be in sync. This webcast is being recorded and the recording and the supporting slides will be made available on the investors page of our website shortly. Please direct your attention to the disclosure statement on slide 2 as well as the disclaimers in the press release related to forward looking statements. Certain information discussed today constitutes forward looking statements that reflect the Company’s current views with respect to future events, financial performance and industry conditions. These forward looking statements are subject to various risks and uncertainties. Actual results could differ materially as a result of many factors which are described in the Company’s reports on file with the SEC. We encourage you to review these factors. This presentation and today’s prepared remarks contain non-GAAP financial measures. Reconciliations of the GAAP to non-GAAP measures are included within the appendix of this presentation. On the call with me today are Bill Krueger, President and Chief Executive Officer, and Brian Valentine, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will be happy to take your questions. I will now turn the call over to Bill.
Bill Krueger (President and Chief Executive Officer)
Thanks Mike and good morning everyone. Thank you for joining the call to discuss our first quarter 2026 results and outlook. I’m pleased to report that we delivered our strongest first quarter ever, achieving record net income and earnings per share. These results reflect the strength of our diversified portfolio, improved market conditions and above all, the dedication of our teams who continue to execute in an increasingly dynamic environment. From an industry standpoint, the quarter included a significant positive development with the finalization of the largest ever renewable volume obligations for 2026 and 2027. The Renewable Volume Obligations (RVO) will support domestic demand for U.S. corn and soybeans along with providing greater regulatory clarity for our agribusiness and renewables platforms. In agribusiness fertilizer margins improved year over year due to strong product positioning. Amid supply disruptions, increased volatility and better premium ingredients results drove merchandising performance. Our grain asset inventory basis appreciation was delayed this quarter and we anticipate positive changes in the next quarter. We continue to pursue organic growth through strategic investments to enhance customer service and respond to changes in demand trends. Construction at our Port of Houston facility is progressing with full operations expected in the third quarter. Our Carlsbad Mineral plant is now operational and the upgrades to increase cleaned corn capacity at our Mansfield, Illinois facility are underway. In renewables, we are making strategic investments in our large, high efficiency ethanol plants, including preparations for the previously announced debottlenecking project in Clymers, Indiana, which is expected to be completed by late 2027. We continue to assess further opportunities to expand production and lower the carbon intensity of ethanol at all of our plants. Production volumes within renewables have consistently surpassed those of previous periods, driven by efficient operations and robust demand. Although market fundamentals remained favorable in the quarter, increased corn basis and natural gas prices reduced our improved margins. Despite ongoing global uncertainty, we believe the trough of the grain cycle occurred in 2025 and underlying conditions continue to improve. With that overview, I will turn the call over to Brian to discuss our financial results.
Brian Valentine (Executive Vice President and Chief Financial Officer)
Thanks Bill and good morning everyone. We’re now turning to our first quarter results on slide number 5. In the first quarter of 2026, the company reported net income attributable to The Andersons of $33 million or 97 cents per diluted share, an adjusted net income of $38 million or $1.12 per diluted share. This compares to adjusted net income of $4 million or $0.12 per diluted share in the first quarter of 2025. Gross profit increased as ag fundamentals were improved and compared to the difficult market conditions. In the first quarter of 2025, operating expenses were down slightly year over year. Adjusted pre tax earnings were $44 million compared to $3 million in 2025, with improvements realized across both agribusiness and renewables including the recognition of 45Z, producer tax credits. In 2026, adjusted EBitDA for the quarter was $91 million compared to $57 million in 2025. Our effective tax rate varies each quarter based primarily on tax credits earned and the amount of income or loss attributable to non controlling interests. We recorded taxes at an effective tax rate of 14% for the first quarter and expect our full year adjusted tax rate to be in the range of 14% to 18%. Next we’ll move to slide 6 to discuss cash liquidity and debt. We generated cash flow from operations before changes in working capital of $68 million in the first quarter of 2026 compared to $57 million in 2025. This continues to demonstrate our ability to generate strong cash flows in various market conditions. Our short term borrowings are up compared to the prior year as we funded the purchase of our partner’s share of the ethanol plants last summer and we have seen a recent increase in market volatility. However, our readily marketable grain inventories continue to be well in excess of our short term debt which is consistently the case throughout the ag cycle. Next we’ll take a look at capital spending and long term debt on slide 7. First quarter capital spending was $52 million compared to $47 million in 2025 which includes the funding of previously announced long term growth projects as well as normal maintenance capital. We continue to take a disciplined, responsible approach to capital spending which we expect will be approximately $225 million for the year. Excluding acquisitions, our long term debt to EBitDA is 1.6 times, which remains well below our stated target of less than 2.5 times. We continue to evaluate various acquisitions and internal growth projects and have a strong balance sheet that will support investments that meet our strategic and financial criteria.
Brian Valentine (Executive Vice President and Chief Financial Officer)
Now we’ll move on to a review of each of our segments beginning with agribusiness on slide number 8, the Agribusiness segment reported adjusted pre tax income attributable of $18 million compared to break even results in the first quarter of 2025. Agribusiness saw considerable improvement year over year as volatility returned to the ag markets. As prices rallied, old crop bushels still on farm came to market which provided more opportunities for our merchandising businesses.
Brian Valentine (Executive Vice President and Chief Financial Officer)
However, with the shifting market dynamics, our asset footprint saw limited basis appreciation. Our premium ingredients business had improved earnings as we continue to focus on serving our CPG customers, including through recent investments in our corn and wheat cleaning capabilities. Our fertilizer assets were well positioned and we were able to capture higher margins leading up to the spring application season. Agribusiness had adjusted EBitDA of $49 million compared to $31 million in the first quarter of 2025.
Brian Valentine (Executive Vice President and Chief Financial Officer)
Moving to Slide 9, Renewables had another strong quarter generating pre tax income of $40 million compared to pre tax income attributable of $15 million in the first quarter of 2025. Our ethanol plants continued to perform well with efficient operations resulting in record first quarter production. Ethanol crush margins were up significantly year over year on continued strong demand. We did have some of the first quarter margins hedged at historically favorable levels which limited a portion of the upside as margins started to run early in the quarter. Ethanol margins were also challenged with higher eastern corn bases and natural gas costs. As expected, we qualified for the next tier of 45Z, tax credits in 2026, recording $26 million of these …
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