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The Andersons Reports Lower Sales, but Higher Net Income
USAgNet - 08/09/2018

The Andersons, Inc. announces financial results for the second quarter which ended June 30. The company reported second quarter 2018 net income of $21.5 million on revenues of $911 million. This result is a significant improvement over the net loss attributable to the company of $26.7 million.

Results for the quarter included pretax impairment charges of $4.7 million on idle railcars held for sale and $1.6 million on the Grain Group's Como, Tennessee, facility in anticipation of its recent sale. The decrease in revenues year over year was primarily the result of the Company's adoption of new revenue recognition rules at the beginning of 2018 that have changed the accounting treatment of a significant amount of Grain's sales transactions. This change has no impact on the amount of gross profit recognized on these transactions.

"As in the first quarter, our Grain and Ethanol businesses each posted significantly better year-over-year results, but our Plant Nutrient and Rail businesses posted lower results compared to last year," said CEO Pat Bowe.

"For the seventh consecutive quarter, our Grain Group recorded improved year-over-year results," Bowe continued. "The group's second quarter results improved by approximately $4.5 million when excluding the Tennessee asset impairment charge, and were highlighted by better results from merchandising and Lansing Trade Group. Ethanol Group results improved once again year over year due to higher volumes linked to plant optimization and improved DDG margins.

The Plant Nutrient Group's lawn and contract manufacturing business continued to grow, but that was not enough to offset the continued squeeze in margins for both primary and specialty nutrients, which suffered from continued competitive pricing pressure. The Rail Group's results were comparable year over year notwithstanding its decision to scrap about 600 idle cars. Utilization and total cars on lease improved sequentially and year over year, signaling a continued modest market upturn."

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