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Andersons Inc (NASDAQ:ANDE)
Q3 2020 Earnings Call
Nov 4, 2020, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to The Andersons' Third Quarter 2020 Earnings Conference Call. [Operator Instructions]

I would now like to introduce your host for today's program, John Kraus, Director of Investor Relations. Please go ahead, sir.

John Kraus -- Director, Investor Relations

Thanks, Jonathan. Good morning everyone and thank you for joining us for The Andersons' third quarter 2020 earnings call. We have 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.

Certain information discussed today constitutes forward-looking statements and actual results could differ materially from those presented in the forward-looking statements as a result of many factors, including general economic conditions, weather, competitive conditions, conditions in the company's industries, both in the United States and internationally, the COVID-19 pandemic and additional factors that are described in the company's publicly filed documents including its '34 Act filings and the prospectuses prepared in connection with the company's offerings.

Today's call includes financial information which the company's independent auditors have not completely reviewed. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be accurate.

This presentation and today's prepared remarks contain non-GAAP financial measures. The company believes that adjusted pre-tax income, adjusted pre-tax income attributable to the company, adjusted net income attributable to the company, adjusted diluted EPS, EBITDA, adjusted EBITDA attributable to the company and adjusted effective tax rate provide additional information to investors and others about its operations, allowing an evaluation of underlying operating performance and better period-to-period comparability. These measures 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, President and Chief Executive Officer; and Brian Valentine, Executive Vice President and Chief Financial Officer. After our prepared remarks, Pat, Brian and I will be happy to take your questions.

Before Pat makes his opening comments, I want to remind you that we'll present an Investor Day in a virtual format on Tuesday, December 8, 2020 beginning at 9:00 AM Eastern Time. I want to also let you know that we have just completed a sustainability review, that document may be found in the Investors section of our website.

With that, Pat, the floor is yours.

Patrick E. Bowe -- President & Chief Executive Officer

Thank you, John, and good morning everyone. Thank you for joining our call this morning to review our third quarter results. Three of our four business segments recorded improved year-over-year results. The Trade business led the way by earning a much improved third quarter pre-tax profit year-over-year. Merchandising results and grain elevations were strong. Income earned by the Group's assets was positive, despite the final lingering effects of the small 2019 harvest in the east. We're seeing much improved grain production in the east this harvest. The Ethanol business recorded pre-tax income that was slightly better than its third quarter of 2019. Margins were stronger year-over-year. The corn futures price rally led to large non-cash mark-to-market charge on our corn and DDGs that we did not face in 2019. The Plant Nutrient business achieved its sixth consecutive quarterly year-over-year improvement in the third quarter. Margins were up slightly on similar volumes and the business continued to manage expenses and working capital effectively. Rail reported nearly breakeven results as continued lower rail traffic negatively impacted lease rates. Cars in service, fleet utilization and demand for rail services were all lower.

Our recent strategic combination of those four business segments into two groups is creating the commercial and cost synergies we anticipated. We also completed the related strategic cost take-out, which should result in run rate savings of approximately $10 million beginning early next year. We expect that these actions along with the moves made earlier in the year should result in more than $25 million in permanent cost reductions when comparing 2019 and 2021 results. We're continuing our evolution toward becoming a much leaner company that's poised to grow.

I'm now going to turn things over to Brian and when he is finished, I'll be back to discuss our outlook for the rest of 2020 and into 2021. Brian?

Brian A. Valentine -- Executive Vice President & Chief Financial Officer

Thanks, Pat, and good morning everyone. We're now turning to our third quarter results on Slide number 5. In the third quarter of 2020, the company reported a net loss attributable to The Andersons' of $1.1 million or $0.03 per diluted share in an adjusted net loss of $2.4 million or $0.07 per diluted share on revenues of $1.9 billion. In the third quarter of 2019, we reported a net loss attributable to the company of $4.2 million or $0.13 per diluted share and an adjusted net loss of $2.3 million or $0.07 per diluted share on revenues of $2 billion. The benefits of our cost reduction initiatives continue to be evident in the third quarter as operating, general and administrative expenses declined $8.9 million or 8% year-over-year.

Adjusted pre-tax income attributable to the company increased $7.3 million year-over-year with the Trade Group accounting for almost 90% of the improvement. These operating results were offset by lower income tax benefits as we recorded an adjusted benefit of $200,000 in the third quarter of 2020 compared to a benefit of $7.2 million in the third quarter of 2019. Adjusted EBITDA attributable to the company was $46.2 million in the third quarter of 2020 compared to $38.2 million in the third quarter of 2019, an increase of 21%. Adjusted EBITDA for the quarter was higher for the Trade, Ethanol and Plant Nutrient segments.

Our effective tax rate continues to change considerably each quarter based on the amount of income or loss attributable to the noncontrolling interest. As in the first two quarters of the year, the adjusted rate also removes the benefits we expect to receive from the CARES Act. These benefits had an impact of $0.14 per share for the quarter and have had a $0.45 per share impact year-to-date.

We generated strong cash flow from operations and continue to focus on working capital management. We have also taken a disciplined approach to capital spending, which we expect to be about $100 million for the full year. Long-term debt decreased approximately $100 million compared to the beginning of the year. Long-term debt reduction remains a priority. In late October, we refinanced a portion of the debt supporting the Rail business. This decision will reduce borrowing costs going forward, however, it will result in the recognition of approximately $2.5 million of non-cash interest charges to the Rail business in the fourth quarter relating to interest rate swaps and debt issuance fees on the prior debt agreement. The refinancing accelerated the recognition of these expenses, which would have otherwise been amortized into interest expense through the third quarter of 2021.

Now we'll move on to a review of each of our four business segments, beginning with Trade on Slide 6. Trade reported pre-tax income of $5.9 million and adjusted pre-tax income of $6.9 million compared to a pre-tax loss of $2.1 million and adjusted pre-tax income of $400,000 in the same period of 2019. The difference between reported and adjusted results in both periods was stock compensation expense relating to the Lansing Trade Group acquisition. Income from Merchandising grain feed products in all other commodities was strong compared to the third quarter 2019 results, due to increased market volatility. Income from this segment asset portfolio was positive, due to improved results from our Ohio and Louisiana assets. Synergy capture and other cost-cutting efforts continue to provide benefits. Trade's adjusted EBITDA for the quarter was $22.3 million compared to adjusted EBITDA of $20.7 million in the third quarter of 2019.

Moving to Slide number 7. Ethanol's third quarter pre-tax income attributable to the company of $1.1 million was up slightly from the third quarter 2019 result. Margins were much improved, despite increasing corn costs as industry supply and demand remained relatively balanced. Third-party Ethanol trading results were also higher year-over-year. Offsetting those improvements was a $6.2 million non-cash mark-to-market adjustment, as Pat mentioned earlier. Ethanol recorded EBITDA attributable to the company of $11.1 million in the third quarter of 2020, up from $3.9 million in the third quarter of last year. I also want to remind everyone that year-over-year comparisons are difficult as 2020 includes the consolidated results of all five Ethanol plants, whereas 2019 results included equity earnings for three of those plants. Results will be more comparable beginning next quarter.

Turning to Slide 8. The Plant Nutrient business recorded a pre-tax loss of $5.4 million in the third quarter, which was a $2 million improvement from the third quarter 2019 loss of $7.4 million. The third quarter had marked this segment's sixth consecutive year-over-year quarterly improvement. Margins per ton were slightly higher on similar volumes. Operating and interest expenses continued to move lower year-over-year due to cost reduction initiatives and effective working capital management. Plant Nutrient's EBITDA for the quarter was $2.2 million, an increase of $1.3 million from the third quarter of 2019.

Turning to Slide number 9. The Rail business was essentially breakeven in the third quarter compared with pre-tax earnings of $3.1 million last year. The year-over-year change was primarily driven by lower results from its lease fleet, as these rates cars on lease and utilization each declined year-over-year. Rail generated $12.5 million in EBITDA for the quarter compared with EBITDA of $16.1 million for the third quarter of 2019.

I'd now like to turn things back to Pat for some thoughts about the remainder of this year and some early views about 2021.

Patrick E. Bowe -- President & Chief Executive Officer

Thanks, Brian. We are very pleased to see the 2020 corn and soybean harvest very much improved from the short crop in the Eastern Corn Belt that hurt us last year. This puts us in a strong position for a year with robust grain demand. Nationwide, this year's crop is smaller and drier than we anticipated just three months ago. Export demand has been very robust, especially from China, which we expect to run well into the first quarter. These conditions have led to a significant increase in basis, strong elevation margins and considerable volatility, which creates good merchandising opportunities for The Andersons. Thereby grain futures prices have rallied creating an inverse in corn and soybean and wheat markets. If those conditions persist, they will impact the opportunity to earn storage income through the first part of 2021.

As a result of those conditions, our current outlook for the trading business in the next four quarters is strong overall, with solid merchandising opportunities, yet a softer outlook on income from carrying grain than we thought to be 90 days ago. We expect the results in 2021 to exceed 2020 in the Trade Group.

Spot ethanol crush margins continue to be very positive, but similar to grain markets are inverted. We completed all plants fall maintenance outages on schedule at the four plants owned by The Andersons Marathon Ethanol and they're all running well. We continue to line out some of the new technologies we're using in the ELEMENT plant and are excited about a new high protein feed product that we're already producing out there and at our Denison, Iowa facility. While spot margins are strong, how we finish 2020 and begin 2021 will depend on the balance between gasoline demand and the ethanol industry supply.

We expect our Plant Nutrient business to finish the year well. We appear to be having a good fall application season and we expect improvement in 2021 assuming continued higher commodity prices and another strong planting season. While railcar demand has been soft, and as we look into 2021 without any significant shutdowns, we think the bottom of the trough in railcar demand at leased prices may be behind us. However, we continue to see a challenging demand picture for railcars and rail repair services through much of '21 and the results should remain flat going into next year.

So in summary, we've made good progress on reducing long-term debt, put in place some more effective cost structure and we're seeing the benefits of the Lansing acquisition and a stronger trading platform. US Ag fundamentals have dramatically improved, which bodes well for the US Pharma and for The Andersons. I'm very encouraged by the resilience of our workforce this past year. We feel we have a leaner and stronger company going into 2021, and are excited about our future prospects.

With that I'd like to hand the call back to Jonathan, and will be happy to entertain your questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Ken Zaslow from Bank of Montreal. Your question please.

Kenneth Zaslow -- BMO Capital Markets -- Analyst

Good morning, everyone.

Patrick E. Bowe -- President & Chief Executive Officer

Good morning Ken.

Kenneth Zaslow -- BMO Capital Markets -- Analyst

I wanted to touch base on the bigger picture first. You guys have a $300 million EBITDA target. Can you talk about that and where that kind of stands for 2021 and how everything plays out in that?

Patrick E. Bowe -- President & Chief Executive Officer

Sure. And thanks for asking that question, Ken. We're currently working on our long-term strategy and our budgets for '21, and we'll be sharing in more detail at our Investor Day about that outlook in December. We have had in place long-term goal of $300 million EBITDA for '21 and we're encouraged by the improvement we've seen in Ag markets especially here, the last 90 days going into next year.

Kenneth Zaslow -- BMO Capital Markets -- Analyst

Okay. And then on top of that, when you think about the crop being restored in the Eastern Corn Belt. How do you frame how that would actually impact The Andersons'. It seems like you -- you're talking about crops could be 20%, 25% bigger than year ago levels, demand seems strong, can you talk about what that actually translates to and is that something that you would expect to see in 2021?

Patrick E. Bowe -- President & Chief Executive Officer

Yes, sure, Ken. A year ago, I mean, really a wet planting season which hurt our PN business and then going into the grain harvest it was really low volumes in the East. A lot of those crops tribute only to our Eastern assets. It was tough that '19 harvest. Coming into the current harvest here, we're just wrapping up maybe 20% of corn still to finish. We had a beautiful sunny 70 degree outlook here for the next five days. So harvest will finish really strong in the East, production has been restored. We've been taken in really good volumes of grain in all of our facilities. Again, a strong basis, strong export market, strong elevations. So it's been a much improved outlook and so we're on a level playing field, in fact, maybe Eastern crops in some cases have been better than some of the Western crops on the improvement year-to-year. So we're in a much better position than we were last year at the harvest time.

Kenneth Zaslow -- BMO Capital Markets -- Analyst

And then my last question on cost savings. I think you mentioned that $25 million in '19 to '21. What would it be just incremental from '20 to '21? I'm assuming there is still -- that does contribute to you $300 million of EBITDA.

Brian A. Valentine -- Executive Vice President & Chief Financial Officer

Yes, Ken, this is Brian. I think that's fair. I'd put it into kind of three buckets. At the beginning of the year, we talked about an incremental $10 million coming from a combination of synergies and productivity improvements. And then when we were talking COVID and some of the actions we are taking on cost containment, we talked about another $20-ish million, call it in May timeframe, and we said about half of that was sustainable and then probably another $10 million for some of the actions that we took with the reorg and some of the G&A side, that gave us kind of a $40 million number in total, about $30 million of which we felt was sustainable and there were some offsets for cost to achieve. So as we enter next year, probably think about an incremental $5 million to $10 million is probably how I'd frame it of the '20.

Kenneth Zaslow -- BMO Capital Markets -- Analyst

Thank you, guys.

Operator

Thank you. Our next question comes from the line of Ben Bienvenu from Stephens. Your question please.

Benjamin Bienvenu -- Stephens Inc -- Analyst

Hi, thanks. Good morning guys.

Patrick E. Bowe -- President & Chief Executive Officer

Good morning Ben.

Benjamin Bienvenu -- Stephens Inc -- Analyst

I want to ask with respect to the commentary around the carry. We can see what's going on across corn, soybeans wheat carries. Historically, I know you -- when you've had outsized carry opportunities and wheat that has given you an opportunity to capture outsized storage income. When you think across those three primary grain categories and oilseeds, I guess, wheat historically has been most important. How would you rank order if there is a rank order today, which matters most to you in terms of having a carry in the market?

Patrick E. Bowe -- President & Chief Executive Officer

Yes, I'm glad you brought the comment of carries, and the reason we pointed out was just because of the big change in 90 days. So, I mean 90 days ago, the markets have had a remarkable rally. So we're up $1 in corn to $4 and $1 in wheat to $6 and $2 in beans to $10.50, $10.75, so we've had a really big bull run here, often aggressive trying to export program, which is fantastic. And we're starting to hear some early signs of dryness in Argentina and Brazil at planting. So if that were to continue, or to persist, this bull run could continue to move up. So farmers are in a much stronger position, have received some government repayments and now getting the benefit of higher commodity prices. So that gives a macro backdrop.

With that, bull move all corn, bean and wheat markets inverted, so carries went out of those markets and that's true for everybody. I mean there's not an Andersons' thing, that's for everybody in the grain business, farmer, elevated process or exporter. So the reason we pointed that out was just, this is the current condition of the market, those can change. Spreads move quite dramatically sometimes. It's just unusual to have a crop harvest with a big crop and have such a bull rally and inverted markets and high premiums in harvest time. So this is, 2020 is an unusual year for a lots of things in this country and Ag is no different. So now it's particularly to us as you mentioned, Ben, we tend to historically have made steady wheat carries on softer [Phonetic] wheat, stored it mostly in the Toledo area. This year that wheat crop was good quality, but not big in size.

We're optimistic about plantings with good fall conditions and good high prices for wheat. We will see a bigger crop next year in wheat. So that's encouraging, when it comes to wheat. But corn overall, we say corn is king. Corn total volume of corn is the biggest impact to everyone in Ag. So when you have big carries in corn, that generates, probably the most income when it comes to total dollars. And probably has probably a little more volatility too with the corn spread.

So answer to your question is seen carries return in corn will be good for storage income across the Ag sector and right now, no farmer has been selling beans at high prices and sitting on corn, it's not good to sit on corn when you don't have much if you're carrying it right? So it's going to be an interesting market as we go into the first quarter and second quarter of next year and see how spreads play out.

Benjamin Bienvenu -- Stephens Inc -- Analyst

That's a great really helpful color. Thank you for the detail. Switching to the Ethanol business. Industry SMB is much improved. You guys have always run best-in-class assets. I'm curious, in addition to that kind of F&D on the traditional Ethanol product, co-Ethanol product improving. A number of producers have had a shot in the arm on USP grade alcohol, I don't know -- I just don't know to what extent you guys participate in that market today, if at all and if not, is there an avenue by which you think there is not sustainable demand to enter that market with the assets that you have?

Patrick E. Bowe -- President & Chief Executive Officer

Yes, I think you pointed out some good comments Ben. The Ethanol margins when it comes to crush with the corn market rally and soybean and soybean meal rally, DDGs have really improved as well. Also corn oil outlook, especially in the long-term is attractive with renewable biodiesel demand for corn oil. So the co-products in long-term in Ethanol look pretty friendly. We're also seeing our ability to make high protein, new feed streams that create much higher margins and values on our feed products. We are now selling those out of our Iowa plant and our Kansas plant. So those are encouraging across the co-product side.

We've looked at the USP grade market and to invest the capital necessary to build a true potable alcohol plant and didn't feel the returns, we're having the contracts in place with users who are there for us. I think some people have the capability today are enjoying that margin, but we didn't see that as a good place to deploy capital today for our company.

Benjamin Bienvenu -- Stephens Inc -- Analyst

Perfect. Thanks for the color and best of luck.

Patrick E. Bowe -- President & Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Eric Larson from Seaport Global. Your question please.

Eric Larson -- Seaport Global -- Analyst

Yes, good morning. Thanks for the question, guys. I want to just focus a few minutes on Rail. I mean that was -- I think a breakeven quarter. I think that was probably one of your poor performance if I think in that Rail division in some time. So I think, Brian you mentioned that there is going to be, I think a one-time interest charge adjusted in four -- in Q4, but you earned I think on adjusted basis $4.5 million in pre-tax profits in the fourth quarter a year ago. Can you talk about what the impact is on fourth quarter given the current environment. And then I think Pat, you said that flattish for 2021. I may have misheard that. So can you help us with the Rail side of it?

Brian A. Valentine -- Executive Vice President & Chief Financial Officer

Yes, I think -- as we think about 2021, I think you're right thinking about it on a flattish on kind of an EBITDA basis, makes sense. I think if we think about our Rail business on the whole for the kind of the full year of this year, I would think of it in the context of a few million dollars positive, but before that non-cash charge. John, anything you -- like you want to add some John.

John Kraus -- Director, Investor Relations

Yes. I think you said flattish on an EBITDA basis. I think we wanted to say EBT basis.

Patrick E. Bowe -- President & Chief Executive Officer

And then I think on a macro level, loadings, utilization and even sharp volumes that have really been weak. So the Rail economy has continued to struggle all year and we're no different than anyone else. We have seen some pickups in some types of cars. Grain cars for example, are starting to look a little better. Intermodal has been good in the industry. But, still a lot of segments that are really pretty tough and a lot of cars part. So question is what's the economy going to look like. Could there be other COVID shutdowns next year that impact what drives a rail traffic. We'll have to see how that plays out. We think this might be the bottom, but we get excited about a real robust turnaround in Rail demand, we don't see that in the cards for next year.

Eric Larson -- Seaport Global -- Analyst

Okay.

Patrick E. Bowe -- President & Chief Executive Officer

So of our four business groups, that's the one that's flat. The other three are all going to be improved in '21.

Eric Larson -- Seaport Global -- Analyst

Okay. So when you kind of look at just the very near term. Right now, you said in Eastern Corn Belt, you've got about 20% of the harvest I think left in corn. We are having fantastic weather right now, it's just unusual. Of course, it was a pretty poor October though too, but with -- what could come to the market in a pretty rapid fashion for let's say, the remaining 20% of harvest, can that give you maybe an opportunity on a more favorable basis on a near term as some of that supply comes in pretty quickly?

Patrick E. Bowe -- President & Chief Executive Officer

I think they leaned it our pretty well Eric. I mean we in buying beans aggressively also harvest farmers liking the high level of flat price and beans over $10. So, and we've been putting through those beans just as fast with robust demand for export. So it's been a really good season for bean elevations. Corn, the farmer has been holding a little bit, that's been early harvested. So we'll see at the end of harvest if they're going to be moving more corn. We expect to see more corn movement here in the next few weeks. So overall, we've been pleased with harvest progress and quality of harvest as well as quantity at our facilities. Feeling very good about harvest in general. So it's been a good season for everybody so far. So really pleased.

Eric Larson -- Seaport Global -- Analyst

Okay. So just my final question Pat and this is more of a -- kind of a general observation. But it's a question that I get all the time and I think in the investment community it lingers as it's kind of one of the overall maybe overhanging debates. So we talk about the sustainability of this particular Ag recovery. As you know, we've had several sort of false starts over the past several years, right? But this time around does seem a lot different, and I'm just curious how you are looking at sustainability. What could be the driving factors that have changed that across the sector and you participate in most of those sectors. So can you just -- on the other side, we've seen some pretty disappointing fertile -- we've seen disappointing fertilizer result. Those were all looking backward, not forward honestly. And I think that the sentiment here is trying to find an answer to what the outlook might be sustainability of this particular Ag recovery?

Patrick E. Bowe -- President & Chief Executive Officer

Yes, and I think the best part about an Ag recovery is being demand led, right. So China coming in for just record uptick this year is super encouraging to everyone. To the exporters of the Gulf, the PNW, Texas cost even stuff we're doing out of Lakes, I mean the whole export program impacts everybody. So that's a really good sign. When is the demand pull? If you coupled that with some domestic demand lift, which probably would come from Ethanol, so Ethanol, let's call it 90% right now of driving starts to pick up as we get to New Year and we get past a COVID situation where demand for gasoline improves, we'll see a pickup in Ethanol. Already protein demand is solid. So demand side of Ag is good. Farmers balance sheets are better now getting some government payments as well as having higher commodity prices. So people are in a much better position. Looking forward to the conditions in South America. If we had some dryness in South America, we really are going have kind of a bullish environment for commodity prices.

And that's a little bit why I was surprised candidly this morning to see that reaction in our stock price, because we had a beat on the quarter and as solid earnings for the quarter and our outlook is good as part of a stronger Ag market. I think maybe our comments about carry might have concerned people and that surprised everybody. So we just kind of pointed it out what changed in the last 90 days and markets inverting in the last 90 days has been a big factor in Ag. So that's the reason we brought that up. But your answer to your long-term question is an Ag recovery being driven by Asian demand and specifically China can be sustainable, and that's encouraging.

Eric Larson -- Seaport Global -- Analyst

Okay. And then you mentioned, it looks like we're going to have new sources of demand for oil. You mentioned it in your corn oil comments. We have pretty significant capacity increases coming in renewable diesel and that could be more than a one-year benefit to the Ag industry. Is that -- would that be part of your sustainable recovery comments as well?

Patrick E. Bowe -- President & Chief Executive Officer

Yes. Yes, renewable diesel is another lift to the veg oil complex here in the US. That's a good thing for our corn oil production business, but also we trade those feedstock. So it's an opportunity that I think is going to be good for the Ag sector in general.

Eric Larson -- Seaport Global -- Analyst

All right, thank you.

Operator

Thank you. Our next question comes from the line of Ben Klieve from National Securities. Your question please.

Ben Klieve -- National Securities -- Analyst

All right. Thanks for taking my questions. Really just have one question here within the Ethanol segment and the ELEMENT plant specifically. Can you just kind of give us an update here really where, where this facility stands in terms of ramping toward full production both either from utilization rate from integration of new technology perspective and kind of upcoming milestones relating to getting final approval for tax credits. And where really do we stand in the ramp of that of that facility overall?

Patrick E. Bowe -- President & Chief Executive Officer

Good question, Ben. So we'd hope pre-COVID that we were going to be a much better position than we were now, given the impact of the Ethanol plant shutdowns that happened earlier this year, right, when we are in the middle of kind of a ramp up and start of -- start-up of the ELEMENT facility, kind of delayed our prospects for that plant to put us behind the trajectory we wanted to be on. So the plant has been running at full capacity in producing Ethanol. We don't have our California CARB approval yet, because we're waiting to have our gasifiers. This is our front-end wood burning system recertified. We had a big maintenance shutdown, we're doing here this fall and then when we bring the plant back up, we'll be working on getting that California CARB approval. You have to have a 90-day run to get that proper certification of your carbon score. We feel really good about that carbon score. We've been producing our high pro-DDGs and have been really good market acceptance of our feed products. So really we're just behind schedule. And I think we're talking about, Brian, did we put in the calendar.

Brian A. Valentine -- Executive Vice President & Chief Financial Officer

I think, Ben I would think of that as kind of a second half '21 type impact starting to have impact of the California approval.

Ben Klieve -- National Securities -- Analyst

Got it. And sorry, can I ask you a clarifying question on this, the kind of the timeline here that the 90 day track record is -- has that 90-day process started yet or is that -- does that still waiting as you bring that facility back after the maintenance?

Patrick E. Bowe -- President & Chief Executive Officer

I think because I know we haven't done that, we're bringing up the new orders back online and then we'll plan to make the 90-day run submitted to CARB, we are going to get approved and we are talking about like Brian said mid-year or summer of '21 for having full approval and shipments to California, gaining the California. Now the plants running full which is us getting that additional California premium at this time.

Ben Klieve -- National Securities -- Analyst

You [Indecipherable] that. Okay, very good. Well, thanks for the clarification and appreciate that. I'll get back in queue now.

Patrick E. Bowe -- President & Chief Executive Officer

Okay.

Operator

[Operator Instructions] And this does conclude the question-and-answer session of today's program. I'd like to hand the program back to John Kraus for any further remarks.

John Kraus -- Director, Investor Relations

Thank you, Jonathan. We want to thank you all for joining us this morning. I also want to mention again that this presentation and slides with additional supporting information are available on the Investors page of our website at andersonsinc.com. Our next earnings conference call is scheduled for Wednesday, February 17, 2021 at 11:00 AM Eastern Time, when we will review our fourth quarter 2020 results. We hope you can join us again at that time. Until then, be well.

Operator

[Operator Closing Remarks]

Duration: 38 minutes

Call participants:

John Kraus -- Director, Investor Relations

Patrick E. Bowe -- President & Chief Executive Officer

Brian A. Valentine -- Executive Vice President & Chief Financial Officer

Kenneth Zaslow -- BMO Capital Markets -- Analyst

Benjamin Bienvenu -- Stephens Inc -- Analyst

Eric Larson -- Seaport Global -- Analyst

Ben Klieve -- National Securities -- Analyst

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