The Andersons, Inc. Q1 FY2026 earnings call

Good morning, everyone. Anderson's delivered strongest first quarter ever with record net income and EPS. Industry had significant positive development with finalization of largest ever renewable volume obligations. Agribusiness saw fertilizer margins improve year over year, merchandising performance driven by increased volatility and better premium ingredients. Grain asset inventory basis appreciation delayed this quarter. Pursuing organic growth through strategic investments. Construction at Port of Houston facility progressing, Carlsbad mineral plant operational, upgrades at Mansfield Illinois facility underway. Renewables making strategic investments in large, high-efficiency ethanol plants, preparing for debottlenecking project in Climbers, Indiana. Production volumes in renewables surpassed previous periods. Although market fundamentals favorable, increased corn basis and natural gas prices reduced margins. Believes trough of grain cycle occurred in 2025 and underlying conditions continue to improve.

Agribusiness segment reported adjusted pre-tax income attributable of $18 million compared to break-even results in Q1 2025. Agribusiness had adjusted EBITDA of $49 million compared to $31 million in Q1 2025. Renewables had pre-tax income of $40 million compared to $15 million in Q1 2025; Renewables had EBITDA of $54 million compared to $37 million in Q1 2025.

Remain optimistic about 2026. Anticipate year-over-year shift from corn to soybeans in agribusiness. Finalization of RVO has industry-wide impacts on renewable diesel and ethanol production. Ethanol exports strong, elevated crude prices enhance ethanol's appeal. Actively pursuing projects to improve production processes and reduce carbon intensity of ethanol. Evaluating investment opportunities for cash generated from operations and tax credits. Reaffirm long-range EPS target of $7 per share by end of 2028.

Ongoing global uncertainty. Increased corn basis and natural gas prices reduced improved margins. Global fertilizer supply issues due to Iran conflict influence agribusiness dynamics.

Q: Ben Mayhew asked about first quarter cadence and ethanol trajectory.

A: Brian said first quarter is usually weakest, but cadence expected same. Bill said no hedges on past Q1, Q2 and Q3 board crush looks good.

Q: Ben Mayhew asked about Port of Houston investment.

A: Bill said it's important for soybean oil demand due to RVOs.

Q: Perron Sharma asked about agribusiness basis appreciation and tax rate.

A: Bill said basis appreciation could be pushed out by grain price spikes, tax rate 14% - 18% due to 45Z tax credits.

Q: Ben Cleavey asked about merchandising business and tax rate.

A: Bill said merchandising business benefited from market disruptors, tax rate due to 45Z non-taxable credits.

Q: Derek Whitfield asked about 45Z policy and MACRA.

A: Bill said 45Z policy finalization expected late summer early fall, MACRA affected corn crop yields with fertilizer supply issues.