Andersons Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ben Klieve - Lake Street Capital Markets LLC - Analyst : All right. Thanks for taking my questions, and congratulations on the transaction. It's really great to see. First question on this -- you noted the regulatory dynamic here is supportive of the space, which just seems to certainly be clear in an accelerating fashion. And I'm wondering two things. One, did the timing of the transaction -- was that correlated to this regulatory tailwind? And then also, you REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 12:30PM, ANDE.OQ - Q2 2025 Andersons Inc Earnings Call noted that there are some opportunities to unlock more capacity within the existing four facilities given regulatory tailwinds. Can you talk about the incremental capacity that you could potentially introduce into these four facilities here given the regulatory dynamic?

Question: Ben Klieve - Lake Street Capital Markets LLC - Analyst : Got it. Thank you. On the Agribusiness segment, you noted some non-strategic exits. Can you characterize what those businesses were and what the financial impact was, either in the quarter or on a full-year basis?

Question: Ben Klieve - Lake Street Capital Markets LLC - Analyst : Got it. Okay, that's helpful. Thank you, Brian. And then I guess one more for me, and I'll get back in queue. You talked about the conditions on the ground here where you've got a stale grain network here over the past quarter and then also a bumper crop coming up. Given these conditions, can you talk about the outlook here for the mix between merchandising and storage for the second half of the year?

Question: Ben Klieve - Lake Street Capital Markets LLC - Analyst : Got it. Very good. All right. Well, plenty more to talk about, but I'll leave it there. Congratulations again, and I'll get back in queue. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 12:30PM, ANDE.OQ - Q2 2025 Andersons Inc Earnings Call

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Hey. Good morning, guys. Congratulations on the deal. I think it's great that you're bringing it in-house. So on that topic, can you discuss why acquiring the balance of TAMH ethanol assets was the right move now for The Andersons? And how does this deal fit into your longer-term strategic objectives to grow your EBITDA? And I think you said at the end of the prepared remarks there that you expected to hit your EBITDA run rate by '26. So I'm assuming that this all kind of ties into that, but if you could just elaborate, please. Thank you.

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Got it. That's very clear. Thank you for the context there. And then just staying on ethanol, just the fundamental environment, it seems like -- I mean, clearly first half had its struggles, higher corn basis in the eastern belt, higher nat gas costs there during periods of time. But it seems like we may have turned a corner here headed into the second half. And I was just hoping if you guys could just give a little more updated outlook kind of detail-wise on where you think things are headed margin-wise and if you think '26 could potentially be better with all of the policy stuff that's going on. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 12:30PM, ANDE.OQ - Q2 2025 Andersons Inc Earnings Call

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Okay, I'm going to sneak one more in here. On the Port of Houston investment, soybean meal prices have been falling, crush capacity is expanding in the US. Obviously, the RVO has very important implications for that. Can you just walk us through how this investment works, even with lower prices? I mean, is it a situation where you're taking advantage of the elevation margin aspect of the soybean meal transaction? And this might actually be more beneficial because you're getting it at cheaper interior costs, and then you're shipping it overseas for more expensive prices. Just kind of allay any concerns over lower soybean meal prices and the impact it might have on that investment. And that'll be it for me. Thanks.

Question: Benjamin Mayhew - Bank of Montreal - Analyst : Thank you very much.

Question: Pooran Sharma - Stephens - Analyst : Good morning. Thanks for the question. I just wanted to ask about Skyland. You mentioned in the prepared comments that there was some revenue contribution. Was wondering if you could detail what that was from the quarter. And I believe last time, you had mentioned that you were anticipating achieving the lower end of the $30 million to $40 million EBITDA guide. And was just wondering if you could provide some updated thoughts on Skyland.

Question: Pooran Sharma - Stephens - Analyst : Okay. Appreciate the color there, gentlemen. Wanted to also ask about -- you mentioned in the prepared comments that all four plants did get 45Z tax credits over the next year. Was just wondering if you could help us flesh that out a little bit. What type of CI score are you ultimately trying to get to? Or how much of a tax credit do you think you could squeeze out of your plants?

Question: Pooran Sharma - Stephens - Analyst : Okay. I appreciate that. Nonetheless, I think it's positive that you will be getting those credits. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 05, 2025 / 12:30PM, ANDE.OQ - Q2 2025 Andersons Inc Earnings Call But maybe we could understand the deal a little bit more here. You mentioned in the prepared comments, I believe you said you bought the incremental 250 at $1.54 a gallon. So from a per-gallon perspective, what else is out there? Do you think -- because $1.54 sounds like a steal, but I am assuming -- I am comparing this to a Red Trail and Gevo asset that was at $3.23 a gallon, but that had all the bells and whistles in terms of sequestration. So I just wanted to get a sense of what you saw out there in the marketplace and why ultimately $1.54 was the best choice for you.

Question: Pooran Sharma - Stephens - Analyst : Okay. Appreciate that detail. I will jump back in the queue.