0001466593false00014665932024-08-052024-08-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 5, 2024
OTTER TAIL CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation or organization)
0-53713
(Commission File Number)
27-0383995
(I.R.S. Employer Identification No.)
215 South Cascade Street, P.O. Box 496, Fergus Falls, MN 56538-0496
(Address of principal executive offices, including zip code)
(866) 410-8780
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $5.00 per shareOTTRThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐


Item 2.02    Results of Operations and Financial Condition
On August 5, 2024 Otter Tail Corporation issued a press release announcing its consolidated financial results for the second quarter of 2024. A copy of the press release is furnished herewith as Exhibit 99.1.
The information in this Item 2.02 (including Exhibit 99.1 attached hereto) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
Item 9.01    Financial Statements and Exhibits
(d)
Exhibits
Press Release issued August 5, 2024.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
OTTER TAIL CORPORATION
Date: August 6, 2024
By:/s/ Todd R. Wahlund
Todd R. Wahlund
Chief Financial Officer


Press Release
image4a.jpg
August 5, 2024
Otter Tail Corporation Announces Record Second Quarter Earnings, Maintains Electric Segment Guidance and Increases Consolidated 2024 Annual Earnings Guidance
FERGUS FALLS, Minnesota - Otter Tail Corporation (Nasdaq: OTTR) today announced financial results for the quarter ended June 30, 2024.
SUMMARY
•Diluted earnings per share increased 6% to $2.07 per share compared to the second quarter of 2023.
•Midpoint of 2024 earnings guidance increased 8% to $6.92 per share, or a return on equity of 18.7%.
•Received approval from the Minnesota Public Utilities Commission on Integrated Resource Plan.
CEO OVERVIEW
“We are pleased with our second quarter financial results,” said President and CEO Chuck MacFarlane, “as our team members continue to perform well amid changing market conditions. Plastics segment earnings increased 9 percent compared to the second quarter of 2023 due to higher sales volumes driven by customer sales volume growth and improved end market demand, partially offset by lower sales prices. Manufacturing segment earnings increased 15 percent, primarily driven by higher margins at BTD Manufacturing, partially offset by lower sales volumes. Electric segment earnings decreased 6 percent from the same time last year due to the impact of unfavorable weather.
“In May, Otter Tail Power received approval from the Minnesota Public Utilities Commission on its Integrated Resource Plan. The decision authorizes the addition of 200 to 300 megawatts of solar generation by 2027, and 150 to 200 megawatts of wind generation and 20 to 75 megawatts of battery storage by 2029. Otter Tail Power also received approval to designate the Minnesota portion of Coyote Station as an emergency-only resource starting as early as 2026, retaining the reliability benefits from the facility while simultaneously reducing its output and emissions.
“The process to receive final approval of our Integrated Resource Plan was complicated by changing energy policy and environmental regulation impacting the power system and changing market conditions in MISO influencing our preferred plan since our initial filing in 2021. I am grateful to our team members and the other parties to the docket for reaching a favorable outcome that helps to preserve reliability while we continue transitioning to cleaner energy.
“Despite our strong quarterly financial results within the Manufacturing segment, we continue to face end market demand related headwinds and anticipate conditions to soften further in the second half of 2024. We will continue to take action to manage costs and mitigate the impact of lower sales volumes.
“Our Plastics segment continues to perform exceptionally well, capitalizing on customer sales volume growth and distributor and end market demand. The sales price of PVC pipe continues to decline but at a slower rate than what we originally anticipated.
“We are increasing our 2024 diluted earnings per share guidance to a range of $6.77 to $7.07 from our previous range of $6.23 to $6.53 primarily due to continued strength within the Plastics segment.”
QUARTERLY DIVIDEND
On August 5, 2024, the corporation’s Board of Directors declared a quarterly common stock dividend of $0.4675 per share. This dividend is payable September 10, 2024 to shareholders of record on August 15, 2024.
CASH FLOWS AND LIQUIDITY
Our consolidated cash provided by operating activities for the six months ended June 30, 2024 was $223.5 million compared to $184.5 million for the six months ended June 30, 2023, with the increase primarily due to increased earnings from our Plastics segment.
Investing activities for the six months ended June 30, 2024 included capital expenditures of $175.5 million and the purchase of long-term marketable securities of $50.1 million. Capital expenditures during the period were largely within our Electric segment, including investments in our wind repowering and advanced metering infrastructure projects, but also included continued investments in our manufacturing facility expansion projects in Arizona and Georgia. Financing activities for the six months ended June 30, 2024 included the issuance of $120.0 million of long-term debt at Otter Tail Power; the proceeds of which were used to repay short-term borrowings, fund capital investments, and support operating activities. Financing activities for the six months ended June 30, 2024 also included dividend payments of $39.1 million.
As of June 30, 2024, we had $170.0 million and $148.1 million of available liquidity under our Otter Tail Corporation and Otter Tail Power Credit Agreements, respectively, along with $230.7 million of available cash and cash equivalents, for total available liquidity of $548.7 million.



SEGMENT PERFORMANCE
Electric Segment
Three Months Ended June 30,
($ in thousands)20242023Change% Change
Operating Revenues$112,828 $113,763 $(935)(0.8)%
Net Income18,485 19,634 (1,149)(5.9)
Retail MWh Sales1,315,504 1,345,830 (30,326)(2.3)%
Heating Degree Days372 639 (267)(41.8)
Cooling Degree Days61 254 (193)(76.0)
The following table shows heating degree days (HDDs) and cooling degree days (CDDs) as a percent of normal.
Three Months Ended June 30,
20242023
HDDs68.8 %120.6 %
CDDs48.8 %215.3 %
The following table summarizes the estimated effect on diluted earnings per share of the difference in retail kilowatt-hour (kwh) sales under actual weather conditions and expected retail kwh sales under normal weather conditions for the three months ended June 30, 2024 and 2023.
 2024 vs Normal2024 vs
 2023		2023 vs Normal
Effect on Diluted Earnings Per Share$(0.03)$(0.07)$0.04 
Operating Revenues decreased $0.9 million primarily due to a decrease in retail revenue from the impact of unfavorable weather, as well as decreased transmission revenue. During the second quarter last year updates were made to estimated project costs for certain transmission projects and previously estimated recovery amounts for annual operating expenses were finalized which resulted in a nonrecurring increase in revenue during the period. The impact of unfavorable weather and decreases in transmission revenues were partially offset by an increase in retail revenues due to an interim rate increase in North Dakota in connection with our rate case filed in November 2023, increased fuel recovery revenues, and increased commercial and industrial sales.
Net Income decreased $1.1 million primarily due to the impact of unfavorable weather, as described above, partially offset by decreased operating and maintenance expenses, the interim rate increase in North Dakota, and increased commercial and industrial sales.
Manufacturing Segment
Three Months Ended June 30,
(in thousands)20242023$ Change% Change
Operating Revenues$96,684 $102,475 $(5,791)(5.7)%
Net Income6,835 5,969 866 14.5 
Operating Revenues decreased $5.8 million primarily due to decreased sales volumes at both of our manufacturing businesses, with an overall sales volume decrease of 13% compared to the same period last year. At BTD Manufacturing, our contract metal fabricator, sales volumes declined primarily in the lawn and garden and agriculture end markets. A 31% decline in scrap metal revenues also contributed to the overall decrease in operating revenues. Decreased sales volumes and scrap revenues were partially offset by increased steel prices, resulting in a 5% increase in material costs, which are passed through to customers. At T.O. Plastics, our plastics thermoforming manufacturer, sales volume declines were primarily attributable to decreased sales of horticulture products as customers and distributors continued to reduce inventory levels from the high levels previously established due to supply chain challenges.
Net Income increased $0.9 million primarily due to increased margins at BTD Manufacturing driven by a positive impact from the timing of pass-through steel cost fluctuations and the selling of lower cost inventory, as well as favorable product mix compared to the same period last year. These positive impacts were partially offset by lower sales volumes and lower scrap sales, as described above. Decreased profit margins at T.O. Plastics driven by a reduced leverage of fixed manufacturing costs resulting from decreased production and sales volumes, as described above, also partially offset the overall increase in earnings compared to the same period last year.



Plastics Segment
Three Months Ended June 30,
(in thousands)20242023$ Change% Change
Operating Revenues$132,824 $121,478 $11,346 9.3 %
Net Income60,612 55,392 5,220 9.4 
Operating Revenues increased $11.3 million primarily due to a 26% increase in sales volumes driven by customer sales volume growth and distributor and end market demand. Sales volumes in the second quarter of last year were negatively impacted by distributors’ inventory management strategies amid uncertain market conditions. Although demand has recovered from last year, sales prices have continued to decline. Sales prices decreased 13% compared to the same period last year, partially offsetting the impact of increased sales volumes.
Net Income increased $5.2 million primarily due to increased sales volumes, as described above. Resin and other input material costs decreased 14% compared to the same period last year and have remained relatively stable during the first half of the year.
Corporate
Three Months Ended June 30,
(in thousands)20242023$ Change% Change
Net Income
$1,063 $974 $89 9.1 %
2024 BUSINESS OUTLOOK
We are increasing our 2024 diluted earnings per share range to $6.77 to $7.07. We expect our earnings mix in 2024, based on our updated guidance, to be approximately 31% from our Electric segment and 69% from our Manufacturing and Plastics segments, net of corporate costs.
The segment components of our 2024 diluted earnings per share guidance compared with actual earnings for 2023 are as follows:
2024 EPS Guidance
2024 EPS Guidance
2023 EPS
by Segment
May 6, 2024August 5, 2024
LowHighLowHigh
Electric$2.01 $2.13 $2.17 $2.13 $2.17 
Manufacturing0.51 0.45 0.49 0.36 0.40 
Plastics4.47 3.78 3.97 4.35 4.54 
Corporate0.01 (0.13)(0.10)(0.07)(0.04)
Total$7.00 $6.23 $6.53 $6.77 $7.07 
Return on Equity22.1 %17.1 %17.8 %18.3 %19.0 %
The following items contribute to our revised 2024 earnings guidance:
Electric Segment - We are maintaining our guidance, expecting earnings to increase 7% over 2023.
Manufacturing Segment - We are decreasing our segment earnings guidance based on:
•Anticipated lower sales volumes as end market demand softens, primarily within the recreational vehicle, agriculture, construction and horticulture markets, and
•Declining operating margins as lower production and sales volumes negatively impact leverage of our fixed manufacturing costs.
Plastics Segment - We are increasing our segment earnings guidance based on:
•Better than expected financial results in the second quarter of 2024, and
•A slower decline in product sales prices than previously expected over the second half of 2024.
Corporate Costs - We are reducing our corporate cost estimate primarily due to an increase in expected income on our cash equivalent investments from a higher anticipated yield and an increase in invested funds driven by an increase in expected earnings and cash flows from our Plastics segment.
CONFERENCE CALL AND WEBCAST
The corporation will host a live webcast on Tuesday, August 6, 2024, at 10:00 a.m. CT to discuss its financial and operating performance.
The presentation will be posted on our website before the webcast. To access the live webcast, go to www.ottertail.com/presentations and select “Webcast.” Please allow time prior to the call to visit the site and download any software needed to listen in. An archived copy of the webcast will be available on our website shortly after the call.
If you are interested in asking a question during the live webcast, visit and follow the link provided in the press release announcing the upcoming conference call.



FORWARD-LOOKING STATEMENTS
Except for historical information contained here, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “likely,” “may,” “outlook,” “plan,” “possible,” “potential,” “predict,” “probable,” “projected,” “should,” “target,” “will,” “would” and similar words and expressions are intended to identify forward-looking statements. Such statements are based upon the current beliefs and expectations of management. Forward-looking statements made herein, which may include statements regarding 2024 earnings and earnings per share, long-term earnings, earnings per share growth and earnings mix, anticipated levels of energy generation from renewable resources, anticipated reductions in carbon dioxide emissions, future investments and capital expenditures, rate base levels and rate base growth, future raw materials costs, future raw materials availability and supply constraints, future operating revenues and operating results, and expectations regarding regulatory proceedings, as well as other assumptions and statements, involve known and unknown risks and uncertainties that may cause our actual results in current or future periods to differ materially from the forecasted assumptions and expected results. The Company’s risks and uncertainties include, among other things, uncertainty of future investments and capital expenditures, rate base levels and rate base growth, risks associated with energy markets, the availability and pricing of resource materials, inflationary cost pressures, attracting and maintaining a qualified and stable workforce, changing macroeconomic and industry conditions that impact the demand for our products, pricing and margin, long-term investment risk, seasonal weather patterns and extreme weather events, counterparty credit risk, future business volumes with key customers, reductions in our credit ratings, our ability to access capital markets on favorable terms, assumptions and costs relating to funding our employee benefit plans, our subsidiaries’ ability to make dividend payments, cybersecurity threats or data breaches, the impact of government legislation and regulation including foreign trade policy and environmental, health and safety laws and regulations, changes in tax laws and regulations, the impact of climate change including compliance with legislative and regulatory changes to address climate change, expectations regarding regulatory proceedings, including state utility commission approval of resource plans, assigned service areas, the siting and construction of major facilities, capital structure, and allowed customer rates, and operational and economic risks associated with our electric generating and manufacturing facilities. These and other risks are more fully described in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, as updated in subsequently filed Quarterly Reports on Form 10-Q, as applicable. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information.
Category: Earnings
About the Corporation: Otter Tail Corporation, a member of the S&P SmallCap 600 Index, has interests in diversified operations that include an electric utility and manufacturing businesses. Otter Tail Corporation stock trades on the Nasdaq Global Select Market under the symbol OTTR. The latest investor and corporate information is available at www.ottertail.com. Corporate offices are in Fergus Falls, Minnesota, and Fargo, North Dakota.
Media Contact:    Stephanie Hoff, Director of Corporate Communications, (218) 739-8535
Investor Contact:    Beth Eiken, Manager of Investor Relations, (701) 451-3571
# # #



OTTER TAIL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except per-share amounts)2024202320242023
Operating Revenues
Electric$112,828 $113,763 $254,317 $265,671 
Product Sales229,508 223,953 435,087 411,126 
Total Operating Revenues342,336 337,716 689,404 676,797 
Operating Expenses
Electric Production Fuel12,324 14,833 30,018 26,326 
Electric Purchased Power9,249 5,212 31,771 47,037 
Electric Operating and Maintenance Expense44,652 45,522 92,630 91,070 
Cost of Products Sold (excluding depreciation)116,795 120,658 231,518 233,027 
Nonelectric Selling, General, and Administrative Expenses
18,154 16,870 37,067 35,568 
Depreciation and Amortization26,632 24,232 52,528 48,089 
Electric Property Taxes3,619 4,336 7,986 8,957 
Total Operating Expenses231,425 231,663 483,518 490,074 
Operating Income110,911 106,053 205,886 186,723 
Other Income and (Expense)
Interest Expense(10,202)(9,696)(20,052)(19,111)
Nonservice Components of Postretirement Benefits2,388 2,421 4,830 4,833 
Other Income (Expense), net4,490 3,253 9,069 5,370 
Income Before Income Taxes107,587 102,031 199,733 177,815 
Income Tax Expense20,592 20,062 38,400 33,365 
Net Income$86,995 $81,969 $161,333 $144,450 
Weighted-Average Common Shares Outstanding:
Basic41,784 41,678 41,754 41,655 
Diluted42,068 42,053 42,051 42,035 
Earnings Per Share:
Basic$2.08 $1.97 $3.86 $3.47 
Diluted$2.07 $1.95 $3.84 $3.44 



OTTER TAIL CORPORATION
CONSOLIDATED BALANCE SHEETS (unaudited)
June 30,December 31,
(in thousands)20242023
Assets
Current Assets
Cash and Cash Equivalents$230,672 $230,373 
Receivables, net of allowance for credit losses191,946 157,143 
Inventories161,787 149,701 
Regulatory Assets8,172 16,127 
Other Current Assets21,551 16,826 
Total Current Assets614,128 570,170 
Noncurrent Assets
Investments117,062 62,516 
Property, Plant and Equipment, net of accumulated depreciation2,538,841 2,418,375 
Regulatory Assets95,605 95,715 
Intangible Assets, net of accumulated amortization6,293 6,843 
Goodwill37,572 37,572 
Other Noncurrent Assets51,282 51,377 
Total Noncurrent Assets2,846,655 2,672,398 
Total Assets$3,460,783 $3,242,568 
Liabilities and Shareholders' Equity
Current Liabilities
Short-Term Debt$12,809 $81,422 
Accounts Payable126,926 94,428 
Accrued Salaries and Wages25,972 38,134 
Accrued Taxes20,608 26,590 
Regulatory Liabilities45,183 25,408 
Other Current Liabilities39,454 43,775 
Total Current Liabilities270,952 309,757 
Noncurrent Liabilities and Deferred Credits
Pensions Benefit Liability32,781 33,101 
Other Postretirement Benefits Liability27,759 27,676 
Regulatory Liabilities275,068 276,547 
Deferred Income Taxes249,489 237,273 
Deferred Tax Credits14,799 15,172 
Other Noncurrent Liabilities80,691 75,977 
Total Noncurrent Liabilities and Deferred Credits680,587 665,746 
Commitments and Contingencies
Capitalization
Long-Term Debt943,592 824,059 
Shareholders’ Equity
  Common Shares209,072 208,553 
  Additional Paid-In Capital427,264 426,963 
  Retained Earnings928,553 806,342 
  Accumulated Other Comprehensive Income763 1,148 
Total Shareholders' Equity1,565,652 1,443,006 
Total Capitalization2,509,244 2,267,065 
Total Liabilities and Shareholders' Equity$3,460,783 $3,242,568 



OTTER TAIL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30,
(in thousands)20242023
Operating Activities
Net Income$161,333 $144,450 
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization52,528 48,089 
Deferred Tax Credits(372)(372)
Deferred Income Taxes9,492 8,708 
Investment Gains
(3,111)(4,295)
Stock Compensation Expense6,824 6,484 
Other, net(1,251)161 
Change in Operating Assets and Liabilities:
Receivables(34,803)(50,558)
Inventories(11,551)2,396 
Regulatory Assets7,361 7,320 
Other Assets(3,951)3,561 
Accounts Payable41,239 1,037 
Accrued and Other Liabilities(19,312)(4,271)
Regulatory Liabilities23,863 27,169 
Pension and Other Postretirement Benefits(4,828)(5,382)
Net Cash Provided by Operating Activities223,461 184,497 
Investing Activities
Capital Expenditures(175,528)(151,516)
Proceeds from Disposal of Noncurrent Assets5,124 2,970 
Purchases of Investments and Other Assets(57,661)(5,079)
Net Cash Used in Investing Activities(228,065)(153,625)
Financing Activities
Net Borrowings (Repayments) on Short-Term Debt(68,612)41,993 
Proceeds from Issuance of Long-Term Debt120,000 — 
Dividends Paid(39,122)(36,524)
Payments for Shares Withheld for Employee Tax Obligations(5,753)(3,088)
Other, net(1,610)(1,671)
Net Cash Provided by Financing Activities
4,903 710 
Net Change in Cash and Cash Equivalents299 31,582 
Cash and Cash Equivalents at Beginning of Period230,373 118,996 
Cash and Cash Equivalents at End of Period$230,672 $150,578 



OTTER TAIL CORPORATION
SEGMENT RESULTS (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2024202320242023
Operating Revenues
Electric$112,828 $113,763 $254,317 $265,671 
Manufacturing96,684 102,475 196,065 209,257 
Plastics132,824 121,478 239,022 201,869 
Total Operating Revenues$342,336 $337,716 $689,404 $676,797 
Operating Income (Loss)
Electric$22,597 $25,188 $51,639 $55,284 
Manufacturing9,600 8,320 17,014 17,829 
Plastics82,089 75,035 145,392 120,718 
Corporate(3,375)(2,490)(8,159)(7,108)
Total Operating Income$110,911 $106,053 $205,886 $186,723 
Net Income (Loss)
Electric$18,485 $19,634 $40,956 $42,854 
Manufacturing6,835 5,969 12,096 12,831 
Plastics60,612 55,392 107,350 89,078 
Corporate1,063 974 931 (313)
Total Net Income$86,995 $81,969 $161,333 $144,450 


v3.24.2.u1
Cover
Aug. 05, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 05, 2024
Entity Registrant Name OTTER TAIL CORPORATION
Entity Incorporation, State or Country Code MN
Entity File Number 0-53713
Entity Tax Identification Number 27-0383995
Entity Address, Address Line One 215 South Cascade Street
Entity Address, Address Line Two P.O. Box 496
Entity Address, City or Town Fergus Falls
Entity Address, State or Province MN
Entity Address, Postal Zip Code 56538-0496
City Area Code 866
Local Phone Number 410-8780
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Shares, par value $5.00 per share
Trading Symbol OTTR
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001466593
Amendment Flag false
Otter Tail (NASDAQ:OTTR)
Historical Stock Chart
From Nov 2024 to Dec 2024 Click Here for more Otter Tail Charts.
Otter Tail (NASDAQ:OTTR)
Historical Stock Chart
From Dec 2023 to Dec 2024 Click Here for more Otter Tail Charts.