Andersons Inc (NASDAQ:ANDE) Q3 2018 Earnings Conference Call Transcript
Nov 06, 2018 • 11:00 am ET
Good day, ladies and gentlemen, and welcome to The Andersons 2018 Third Quarter Earnings Conference Call. (Operator Instructions) As a reminder, this conference call may be recorded.
I would now like to introduce your host for today's conference, Mr. John Kraus, Director of IR. Please go ahead.
Thanks, Crystal. Good morning, everyone, and thank you for joining us for The Andersons third quarter 2018 earnings call. We've provided a slide presentation that will enhance today's discussion. If you're viewing this presentation via our 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 at andersonsinc.com shortly.
(Forward-Looking Cautionary Statements)
This presentation and today's prepared remarks contain non-GAAP financial measures. The company believes that adjusted pre-tax income, EBITDA and adjusted EBITDA provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and better period-to-period comparability. Adjusted pre-tax income, EBITDA and adjusted EBITDA do not and should not be considered as alternatives to net income, or income before income taxes, as determined by generally accepted accounting principles.
On the call with me today are Pat Bowe, CEO; and Brian Valentine, CFO. After our prepared remarks, Pat, Brian and I will be happy to take your questions. Corey Jorgenson, who's President of our Grain Group, is also with us and is available to address questions.
Now I'll turn the floor over to Pat for his opening comments.
Patrick E. Bowe
Thank you, John, and good morning, everyone. Thank you for joining our call this morning to review our third quarter 2018 results. I'll start by providing some viewpoints on each of our four business groups. After Brian presents his business review, I'll conclude our prepared remarks with some comments about our outlook for the remainder of the year and give you a brief look into what we're beginning to see for 2019.
Our third quarter results fell short of our third quarter 2017 results, but a significant reason for that shortfall is a timing difference caused by lower basis values in the grain business, driven by abundant grain stocks and near record corn and soybean yields.
The Ethanol Group performed very well in the third quarter but we see some difficulties on the horizon as ethanol prices remain at multi-year lows. Results for Plant Nutrient and Rail groups were comparable year-over-year. The Rail Group continues to ride a gradual market recovery. Grain Group income declined during the quarter as corn and soybean basis levels fell.
Frankly, resulting basis reset has provided a good opportunity to purchase most of our grain from this harvest at historically low basis levels. As a result, we're confident that the market conditions we faced in the third quarter ultimately present opportunities over the course of the next two or three quarters.
The other parts of the grain business, namely our risk management, food ingredients and affiliated companies, all recorded better year-over-year results. That