Industry Overview - The Zacks Agriculture - Products industry is expected to benefit from stable food demand driven by a growing global population, projected to reach 8.5 billion by 2030 and 9.7 billion by 2050, leading to a 50% increase in food demand [3] - The industry includes companies involved in storing, distributing, and farming agricultural products, as well as those providing hydroponic gardening solutions and innovative health products [2] Growth Drivers - Rising consumer awareness regarding food ingredients and a preference for healthier options are key factors driving industry expansion [1] - Innovative agricultural technologies, such as hydroponics and vertical farming, are anticipated to be significant growth catalysts due to their efficiency and sustainability [1][4] - The hydroponic equipment market is projected to exceed $16 billion by 2025, while the legal cannabis market in North America is expected to reach $57 billion by 2028 [4] Cost Management - Companies in the industry are facing rising costs related to labor, packaging, and distribution, but recent easing of feed prices is expected to help margins [5] - Efforts to improve supply chain issues and implement cost-reduction strategies are underway to sustain profitability [5] Market Performance - The Zacks Agriculture - Products industry has outperformed the Basic Materials sector but lagged behind the S&P 500 over the past 12 months, with an 11.8% increase compared to the S&P 500's 26.3% [8] - The industry currently has a trailing 12-month EV/EBITDA ratio of 4.50X, significantly lower than the S&P 500's 13.94X and the Basic Materials sector's 11.66X [9] Company Highlights - **CalMaine Foods (CALM)**: Focused on expanding operational capacity and acquiring assets to enhance its geographic footprint, with a recent acquisition expected to boost egg prices due to supply concerns. Shares have gained 18.5% in the past six months [11][12] - **West Fraser Timber Co. (WFG)**: Benefiting from strong demand in the home construction market, with shares up 5.6% in the past six months. The company is optimizing its portfolio and investing in modernization [13][14] - **The Andersons, Inc. (ANDE)**: Strong cash flow supports growth in grain and fertilizer sectors, with shares gaining 21.5% in the last six months. The company is focused on renewables and improving ethanol production efficiency [15][16] - **Hydrofarm (HYFM)**: Streamlining operations and expanding into non-cannabis applications, with shares up 9.4% in the last six months. The company is focused on improving margins through cost reductions [17][18]

Sales and Revenue Performance - Trade segment's sales and merchandising revenues decreased by $983.9 million, resulting in a gross profit decline of $38.9 million compared to the prior year[96]. - Renewables operating results increased by $53.9 million compared to the prior year, with gross profit rising by $10.8 million despite a $182.5 million decrease in sales and merchandising revenues[98]. - Nutrient & Industrial segment operating results increased by $8.6 million, with sales and merchandising revenues up by $3.4 million and gross profit increasing by $8.4 million due to margin improvements[100]. Agricultural Inventory and Production - Agricultural inventories on hand were 106.7 million bushels as of March 31, 2024, compared to 99.6 million bushels a year earlier[88]. - Ethanol volumes shipped were 185,826 thousand gallons for the three months ended March 31, 2024, slightly down from 186,566 thousand gallons in the prior year[90]. - Total tons sold in the Ag Supply Chain segment increased from 170 thousand to 199 thousand year-over-year[92]. - The company expects strong demand for agricultural products if planting conditions improve, despite current delays due to wet and cold weather[91]. Financial Position and Cash Flow - Working capital as of March 31, 2024, was $1,130.6 million, an increase of $192.5 million from the prior year, primarily due to a decrease in current liabilities by $1,029.0 million[107][109]. - Cash and cash equivalents increased by $213.0 million to $283.9 million as of March 31, 2024, while accounts receivable decreased by $423.4 million[108]. - Net cash used in operating activities was $239.6 million for Q1 2024, a decrease from $333.5 million in Q1 2023, indicating improved cash flow management[111]. Investment and Financing Activities - The company expects to invest approximately $150 to $175 million in property, plant, and equipment in 2024, with about 50% allocated to maintaining current facilities[112]. - Financing activities used cash of $98.3 million in Q1 2024, compared to cash provided of $308.8 million in Q1 2023, primarily due to changes in short-term credit facility borrowings[113]. - The company paid dividends of $6.5 million in Q1 2024, slightly up from $6.3 million in the prior period, with a declared cash dividend of $0.190 per common share[113]. Compliance and Liabilities - The company is in compliance with all covenants related to its long-term borrowings as of March 31, 2024, with $1,845.6 million available for borrowing[114]. - Interest expense decreased by $6.2 million due to reduced short-term borrowings and better management of working capital[97].

Financial Performance - The Andersons reported a net income of $6 million, or $0.16 per diluted share, for Q1 2024, compared to a net loss of $14.8 million in Q1 2023[3]. - EBITDA for the quarter was $51 million, a significant increase from a loss of $16.2 million in the same quarter last year[3]. - Net income for the three months ended March 31, 2024, was $12,665, a significant improvement from a net loss of $59,117 in the same period last year[20]. - Adjusted net income attributable to The Andersons, Inc. for the three months ended March 31, 2024, was $5,595, compared to $6,796 in the same period last year, a decrease of approximately 17.6%[22]. - Net income for the three months ended March 31, 2024, was $12,665,000, a significant decrease from a net loss of $59,117,000 in the same period last year[25]. - EBITDA for the same period was $51,439,000, compared to a negative EBITDA of $16,156,000 in the prior year, indicating a strong recovery[25]. - Adjusted EBITDA for the three months ended March 31, 2024, was $51,174,000, reflecting a substantial improvement from $55,278,000 in the same period last year[25]. Segment Performance - The Renewables segment achieved a pretax income of $23 million, up from a pretax loss of $83 million in Q1 2023, with adjusted EBITDA of $32 million compared to $22 million last year[9][10]. - The Trade segment recorded adjusted pretax income of $9 million, down from $24 million in Q1 2023, with adjusted EBITDA decreasing to $24 million from $44 million[6][8]. - Nutrient & Industrial reported a pretax loss of $2 million, an improvement from a loss of $10 million in Q1 2023, with EBITDA rising to $7 million from a loss of $1 million[11]. Revenue and Sales - Total sales and merchandising revenues for Q1 2024 were $2.72 billion, a decrease from $3.88 billion in Q1 2023, with gross profit of $128.3 million compared to $148.0 million last year[17]. - Total sales and merchandising revenues for the three months ended March 31, 2024, were $2,718,217, compared to $3,881,238 for the same period in 2023, reflecting a decrease of approximately 30%[23]. - Gross profit for the three months ended March 31, 2024, was $128,320, down from $148,011 in the prior year, indicating a decline of about 13.3%[23]. Cash Flow and Liquidity - Cash from operating activities was $240 million in Q1 2024, down from $334 million in Q1 2023, while cash spent on capital projects increased slightly to $27 million[5]. - The company maintains a strong cash position of $283.9 million and an undrawn $1.5 billion credit facility, well below its long-term debt to EBITDA target of less than 2.5 times[5]. - Cash and cash equivalents at the end of the period were $283,902, a significant increase from $70,853 at the end of the same period last year[20]. - Net cash used in operating activities for the three months ended March 31, 2024, was $(239,627), an improvement from $(333,535) in the same period last year[20]. - Cash from operations before working capital changes improved to $48,409,000 in Q1 2024 from $40,639,000 in Q1 2023, indicating better operational efficiency[30]. Tax and Liabilities - The effective income tax rate for the quarter was 9%, with an anticipated full-year adjusted effective rate of approximately 18% - 22%[12]. - Total current liabilities as of the latest reporting period were $1,083,284, down from $1,636,331 in the previous year, a reduction of approximately 33.7%[19]. - Total liabilities amounted to $1,785,423, compared to $2,338,620 in the prior year, reflecting a decrease of about 23.6%[19]. Cost Management - Interest expense decreased to $6,522,000 in Q1 2024 from $16,625,000 in Q1 2023, showing improved financial management[25]. - Interest expense for the trailing twelve months was $36,764,000, down from $62,615,000 the previous year, reflecting improved cost management[27]. - The company reported total adjusting items impacting EBITDA of $(265,000) for Q1 2024, compared to $71,434,000 in Q1 2023, indicating a reduction in one-time costs[25]. - Depreciation and amortization expenses were $30,949,000 for the three months ended March 31, 2024, slightly lower than $32,220,000 in the same period last year[25]. Strategic Initiatives - The company is pursuing growth opportunities in Renewables, including capital projects to lower carbon intensity and partnerships for sourcing lower-carbon commodities[3]. - The company experienced a significant reduction in insured inventory recoveries, impacting the financials positively in the current quarter[28].

Financial Data and Key Metrics Changes - The company reported adjusted pre-tax income of $159 million for 2023, marking the second-best year ever, with adjusted EBITDA at $405 million, just below the 2022 record [7][10] - Fourth quarter net income from continuing operations was $51 million, or $1.49 per diluted share, compared to adjusted net income of $34 million, or $0.98 per diluted share in Q4 2022 [10] - Gross profit for Q4 2023 was $218 million, up over 25% from $170 million in Q4 2022, while full-year gross profit increased 9% to $745 million from $684 million [10][11] Business Line Data and Key Metrics Changes - The Trade business reported fourth quarter adjusted pre-tax income of $47 million, down from $52 million in Q4 2022, with adjusted EBITDA for the quarter at $62 million compared to $72 million in the same period last year [12][13] - Renewables achieved record fourth quarter pre-tax income of $33 million, significantly up from $13 million in 2022, with adjusted EBITDA of $73 million, more than double the $36 million in Q4 2022 [14] - Nutrient and Industrial reported fourth quarter adjusted pre-tax income of $2 million, a slight increase from the previous year, with adjusted EBITDA for the quarter at $11 million, just above Q4 2022 [15] Market Data and Key Metrics Changes - The company noted a shift in agricultural fundamentals as global supply replenished low stocks, leading to declining commodity prices [17] - Expectations for higher wheat storage income faded due to large export purchases by China in Q4 [18] - The company anticipates significant quantities of corn in key dry areas for 2024, despite shifts in the mix of US crops [18] Company Strategy and Development Direction - The company remains optimistic about growth prospects while acknowledging a shift in agricultural fundamentals, focusing on leveraging a balanced portfolio of assets and merchandising product lines [17][18] - Investments in core assets and bolt-on acquisitions are part of the strategy to strengthen the business for long-term growth [17][22] - The company aims to achieve a run-rate EBITDA target of $475 million by 2025, relying on both internal growth and successful acquisitions [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2024 despite a slower start due to farmers' reluctance to make forward sales on lower market prices [17] - The renewables segment is expected to see seasonal weak demand initially, but improvements in margins are anticipated as driving miles increase in the spring [19][55] - The company is exploring investments to lower carbon intensity in ethanol production and participate in sustainable aviation fuel initiatives [20][41] Other Important Information - The company ended 2023 with cash of $644 million, exceeding total debt, and maintained a long-term debt-to-EBITDA ratio of 1.5 times [11][12] - Capital expenditures for 2024 are targeted between $150 million to $175 million, with an equal balance between maintenance and growth CapEx [25] Q&A Session Summary Question: What are the expectations for capital expenditures in 2024? - The company targets capital expenditures of $150 million to $175 million, with an equal balance between maintenance and growth CapEx [25] Question: How does the company view stock buybacks versus pursuing acquisitions? - The company is focused on a balanced approach, considering both growth investments and potential returns to shareholders, while maintaining flexibility for future opportunities [26][29] Question: What is the outlook for the agricultural cycle in 2024 and 2025? - Management emphasized the importance of positioning the business to succeed regardless of the agricultural cycle, focusing on strong asset performance and diversification [30][33] Question: Can you discuss the impact of the renewable segment and carbon sequestration initiatives? - The company is actively planning for carbon sequestration projects and is focused on enhancing ethanol plants to participate in future sustainable aviation fuel markets [39][41] Question: What are the expectations for growth in the renewable diesel feedstock business? - The company anticipates continued growth in the renewable diesel feedstock business, aiming for £2 billion in sales by 2025, while acknowledging potential market fluctuations [42][44] Question: How is the merchandising business performing with current corn prices? - The merchandising business remains steady, with opportunities to add value through customer collaboration, despite lower commodity prices [46][49]

Financial Performance - Q4 2023 - Sales and merchandising revenues decreased to $3.213 billion from $4.677 billion in Q4 2022[9], a decrease of approximately 31% - Gross profit increased to $218 million from $170 million in Q4 2022[9], an increase of approximately 28% - Pretax income from continuing operations attributable to ANDE increased to $65 million from $25 million in Q4 2022[9], an increase of approximately 160% - Adjusted EBITDA from continuing operations increased to $135 million from $104 million in Q4 2022[9], an increase of approximately 30% - Adjusted EPS from continuing operations increased to $1.59 from $0.98 in Q4 2022[9], an increase of approximately 62% Financial Performance - Year to Date 2023 - Sales and merchandising revenues decreased to $14.750 billion from $17.325 billion YTD 2022[9], a decrease of approximately 15% - Pretax income from continuing operations attributable to ANDE decreased to $138 million from $159 million YTD 2022[9], a decrease of approximately 13% - Adjusted EBITDA from continuing operations decreased to $405 million from $412 million YTD 2022[9], a decrease of approximately 2% - Adjusted EPS from continuing operations decreased to $3.44 from $4.05 YTD 2022[9], a decrease of approximately 15%

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 000-20557 THE ANDERSONS, INC. (Exact name of the registrant as specified in its charter) Ohio 34-1562374 (State of incorporatio ...

Core Viewpoint - The Andersons (ANDE) is set to report its fourth-quarter 2023 results on February 20, with expectations of a revenue decline but an improvement in earnings per share compared to the previous year [1][2]. Q4 Estimates - The Zacks Consensus Estimate for ANDE's fourth-quarter revenues is $4.2 billion, indicating a 9.9% year-over-year decline [2]. - The consensus estimate for fourth-quarter earnings is $1.11 per share, suggesting a 13.3% improvement from the same quarter last year [2]. - The earnings estimate has remained unchanged over the past 60 days [2]. Q3 Results - In the last reported quarter, Andersons experienced year-over-year declines in both revenues and earnings, missing the Zacks Consensus Estimate [3]. - The company has missed the consensus estimate in one of the last four quarters, while beating in the other three, with an average surprise of 32.7% [3]. Factors to Note - The Trade segment is expected to benefit from strong momentum in merchandising businesses and recent investments in food and pet food ingredients [4]. - The Renewables segment is anticipated to reflect strong ethanol crush margins, enhanced efficiency, and lower costs contributing to earnings [4]. - The Nutrient & Industrial segment may show lower volume impacts, but demand for fertilizer and specialty liquid products remains solid [4]. Price Performance - Andersons' shares have increased by 22.6% over the past year, contrasting with a 1.8% decline in the industry [6].

Core Viewpoint - The importance of analyzing a company's cash flow efficiency is emphasized, as even profitable companies can face bankruptcy without adequate cash flow [1][2]. Group 1: Cash Flow Importance - Cash flow is essential for a company's existence, development, and success, providing the means to meet obligations and reinvest in the business [1]. - Positive cash flow indicates an increase in liquid assets, allowing companies to manage debt, expenses, and downturns effectively [2]. - A company must not only have positive cash flow but also increasing cash flow to ensure future growth and reduce reliance on external financing [2]. Group 2: Screening Parameters - Stocks were screened for those with cash flow in the latest quarter at least equal to the 5-year average cash flow per common share, indicating a positive trend [4]. - Additional criteria included Zacks Rank 1, average broker rating of 1, current price greater than or equal to $5, and a VGM Score of B or better [4]. Group 3: Stock Picks - **Griffon Corporation (GFF)**: A diversified management and holding company with a revised earnings estimate of $4.62 for fiscal 2024, reflecting a 13% upward revision [5]. - **Photronics, Inc. (PLAB)**: A leading manufacturer of photomasks with a fiscal 2024 earnings estimate of $2.60, up by 15.6% [6]. - **The Andersons, Inc. (ANDE)**: A regional grain merchandiser with a revised earnings estimate of $3.86 for 2024, up by 13.5% [7]. - **AZZ Inc. (AZZ)**: A global provider of metal coating services with a fiscal 2024 earnings estimate of $4.30, reflecting a 5.4% increase [7].

The Andersons, Inc. (ANDE) saw record third quarter 2023 results in Renewables. This Zacks Rank #1 (Strong Buy) is expected to keep its momentum into 2024, growing earnings by 32.2%.The Andersons is an agribusiness company which has grown, over the last 77 years, from a single grain elevator to a diverse company with commodity merchandising (trade), renewables, and nutrient and industrial specialties.It has 82 facilities in the trade division, 4 in renewables and 37 in nutrient and industrial along with 10 ...

Core Viewpoint - Cash flow is essential for a company's survival, growth, and success, making stocks with strong cash flow attractive investment opportunities [1][2] Group 1: Importance of Cash Flow - Cash is crucial for decision-making, investments, and sustaining growth, indicating a company's health and operational efficiency [1] - Positive cash flow signifies an increase in liquid assets, enabling a company to meet obligations, reinvest, and return wealth to shareholders, while negative cash flow indicates declining liquidity [2] - Increasing cash flow is vital for future growth, reflecting management's efficiency and reduced reliance on external financing [2] Group 2: Screening Parameters for Stocks - Stocks were screened for those with cash flow in the latest quarter at least equal to the 5-year average cash flow per share, indicating a positive trend [4] - Additional criteria included Zacks Rank 1 for strong buy potential, average broker rating of 1, current price of at least $5, and a VGM Score of B or better [4] Group 3: Selected Stocks - **Arcos Dorados Holdings Inc. (ARCO)**: Operates McDonald's franchises in Latin America; 2024 earnings per share estimate revised up by 8% to $0.95; VGM Score of A [5] - **Photronics, Inc. (PLAB)**: Manufacturer of photomasks for semiconductors; 2024 earnings estimate increased by 15.6% to $2.60; VGM Score of A [6] - **The Andersons, Inc. (ANDE)**: Regional grain merchandiser with diversified operations; 2024 earnings estimate raised by 13.5% to $3.86; VGM Score of A [7] - **GigaCloud Technology Inc. (GCT)**: B2B e-commerce solutions provider; 2024 earnings estimate up by 13.8% to $2.23; VGM Score of A [7]