Grain & Ethanol and Plant Nutrient Businesses Lead Earnings Growth
MAUMEE, Ohio, Feb. 6 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced that both its full year and fourth quarter
results established new records for the company. For the full year, net
income was $68.8 million, or $3.75 per diluted share, on $2.4 billion of
revenues. In 2006, the company's full year net income was $36.3 million, or
$2.19 per share, and total revenues were $1.5 billion. The fourth quarter
net income was $23.5 million, or $1.28 per diluted share, and total
revenues were $785 million. In the same three month period of 2006, the
company reported net income of $13.8 million, or $0.76 per share, on
revenues of $463 million.
The Grain & Ethanol Group's 2007 operating income of $65.9 million was
more than double its previous income record of $28.0 million achieved in
2006. Total revenues were $1.5 billion for the year. This included $407
million of grain and ethanol sales made by the group in accordance with
origination and marketing agreements between the company and its ethanol
joint ventures, for which it receives a fee. The group's 2006 revenues were
$791 million. Total revenues in the Grain & Ethanol Group have increased
for both the quarter and year due to a considerable increase in both the
volume and price of grain sold, and due to an increase in the gallons of
ethanol sold. Income from the ethanol investments grew significantly during
the year because of the three ethanol plants in operation or under
development; the Albion, MI plant began production in August 2006, the
Clymers, IN plant began production in April 2007 and the third plant in
Greenville, OH is scheduled to begin production within the next week. The
group's grain business also benefited from higher space and fee income.
Additionally, income from the group's investment in Lansing Trade Group LLC
was more than double the prior year. For the fourth quarter, the Grain &
Ethanol Group's operating income was $30.1 million, in contrast to $12.3
million earned in the same three month period of 2006. Total revenues for
the quarter were $548 million, including $144 million of grain and ethanol
sales made by the group in accordance with origination and marketing
agreements with the ethanol joint ventures, for which only a fee is
received. In comparison, the group's fourth quarter revenues last year were
$305 million.
The Rail Group's operating income for 2007 was $19.5 million, which is
the same as 2006. Revenues of $130 million for the year were up from $113
million in the prior year. The group grew the rail fleet by more than 8
percent during 2007, and ended the year with more than 22,700 cars and
locomotives. The group's average lease rates have remained stable. The
average utilization rate (the percentage of the fleet's railcars in
service) for 2007 was 92.6 percent, which was down from the 2006 average of
95.2 percent; however the year ended with a utilization rate of 93.4
percent. Including gains from railcar sales and related leases entered into
during the year, gross profit in the group's leasing business was slightly
higher than year earlier results. The railcar repair and manufacturing
businesses experienced declines in gross profit during the year, but saw
some improvement in the fourth quarter. The Rail Group generated $3.8
million in operating income in the fourth quarter of 2007 on $28 million of
revenues. In 2006, operating income for the same three month period was
$3.4 million and revenues amounted to $24 million.
In 2007, the Plant Nutrient Group exceeded income records ending the
year with operating income of $27.1 million on $466 million of revenues.
This compares to the prior year operating income of $3.3 million on
revenues of $265 million. The 2007 income is more than double the group's
prior record of $10.4 million, established in 2005. Total nutrient volume
for the year increased by more than 40 percent; this was influenced by both
an approximate 20 percent increase in corn acreage and market share growth.
Margin improvement also contributed significantly to the improved bottom
line. For the fourth quarter, the group's operating income was $8.7 million
on $140 million of revenues. Last year its operating income was $1.3
million on revenues of $67 million for the same three month period. Sales
volume remained high in the fourth quarter as a result of increased wheat
acres and stepped up buying in the face of further escalation of nutrient
prices and robust demand driven by anticipated strong corn acres in 2008.
The Turf & Specialty Group's full year operating income was $0.1
million on $104 million of revenues. In 2006, the group had operating
income of $3.2 million, and total revenues were $111 million. The 2007
shortfall in the lawn business was attributable to reduced sales of
insecticide and fungicide products, and the escalation of raw material
costs. The cob business had lower earnings during 2007 mainly due to the
need to outsource a portion of the cob from competitors, which resulted in
a significantly higher cob cost for the year. The group incurred an
operating loss of $0.8 million in the fourth quarter on $19 million of
revenues. Last year, its operating income was $0.2 million for the same
period, and revenues were $18 million.
Total sales for the Retail Group were $180 million in 2007, or 1.9
percent above the 2006 total of $177 million. Same store sales, however,
were down approximately 1 percent. The group reported operating income of
$0.1 million in 2007 after recording a $1.9 million impairment charge on
certain retail assets. In the prior year, the group earned operating income
of $3.2 million. The Retail Group's fourth quarter operating loss was $0.6
million on $50 million of revenues, which includes the impairment. Last
year, operating income was $1.9 million, and total revenues were $49
million in the same three month period.
"To be reporting record breaking results for the fourth consecutive
year is truly gratifying. Our Grain & Ethanol and Plant Nutrient groups
achieved phenomenal income growth this year, and the Rail Group maintained
solid performance despite some tightening in the rail industry," said
President and Chief Executive Officer Mike Anderson. Mr. Anderson added,
"To see the results of our strategic growth initiatives is very satisfying.
Our investments in the ethanol business and Lansing Trade Group, and
continual expansion of the rail business are clearly paying dividends. It
was also rewarding to watch the Plant Nutrient Group rebound from the tough
market realities of 2006 and end 2007 with record earnings --- what a
difference a year can make. My thanks to all our employees whose hard work
made our current year performance possible."
The company will host a webcast on Thursday, February 7, 2008 at 11:00
A.M. ET, to discuss its performance and full year outlook. This can be
accessed under the heading "Investor Relations" on its website at
http://www.andersonsinc.com.
The Andersons, Inc. is a diversified company with interests in the
grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as
in railcar leasing and repair, turf products production, and general
merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now
has operations in eight U.S. states plus rail equipment leasing interests
in Canada and Mexico.
This release contains forward-looking statements. These statements
involve risks and uncertainties that could cause actual results to differ
materially. Without limitation, these risks include economic, weather and
regulatory conditions, competition, and the risk factors set forth from
time to time in the Company's filings with the Securities and Exchange
Commission. 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 correct.
The Andersons, Inc. is located on the Internet at http://www.andersonsinc.com.
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended Year ended
December 31 December 31
(in thousands, except for per
share amounts) 2007 2006 2007 2006
Sales and merchandising
revenues $784,634 $463,415 $2,379,059 $1,458,053
Cost of sales and
merchandising revenues 709,957 404,449 2,139,347 1,258,813
Gross profit 74,677 58,966 239,712 199,240
Operating, administrative and
general expenses 51,664 41,301 169,753 150,576
Interest expense 5,662 3,786 19,048 16,299
Other income / gains:
Equity in earnings of
affiliates 14,689 2,911 31,863 8,190
Other income, net 2,591 2,151 21,731 13,914
Minority interest in net
loss / (income) of
subsidiary 291 - 1,356 -
Income before income taxes 34,922 18,941 105,861 54,469
Income taxes 11,430 5,163 37,077 18,122
Net income $23,492 $13,778 $68,784 $36,347
Per common share:
Basic earnings $1.31 $0.78 $3.86 $2.27
Diluted earnings $1.28 $0.76 $3.75 $2.19
Dividends paid $0.078 $0.045 $0.220 $0.178
Weighted average shares
outstanding-basic 17,928 17,611 17,833 16,007
Weighted average shares
outstanding-diluted 18,320 18,122 18,326 16,566
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
December 31 December 31
(in thousands) 2007 2006
Assets
Current assets:
Cash and cash equivalents $22,300 $23,398
Restricted cash 3,726 3,801
Accounts receivable (net) 106,257 87,698
Margin deposits (net) 30,467 15,273
Inventories 502,904 296,457
Commodity derivative assets - current 205,956 85,338
Other current assets 43,281 33,325
Total current assets 914,891 545,290
Investments and other assets 137,518 72,335
Commodity derivative assets 29,458 20,862
Railcar assets leased to others (net) 153,235 145,059
Property, plant and equipment (net) 99,886 95,502
$1,334,988 $879,048
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $245,500 $75,000
Commodity derivative liabilities -
current 122,488 43,173
Other current liabilities 369,224 265,040
Total current liabilities 737,212 383,213
Deferred items and other long-term
liabilities 49,631 41,267
Commodity derivative liability 2,090 26,531
Long-term debt non-recourse 56,277 71,624
Long-term debt 133,195 86,238
Minority interest 12,219 -
Shareholders' equity 344,364 270,175
$1,334,988 $879,048
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Quarter ended December 31, 2007
Revenues from external customers $548,222 $27,681 $140,258 $18,921
Gross Profit 32,399 8,142 15,328 4,747
Other income / Equity in
earnings of affiliates 16,190 273 103 58
Operating income (loss) 30,077 3,803 8,692 (785)
Quarter ended December 31, 2006
Revenues from external customers $305,279 $23,768 $67,117 $17,955
Gross Profit 25,059 7,736 6,257 5,327
Other income / Equity in
earnings of affiliates 3,799 69 234 28
Operating income (loss) 12,302 3,428 1,349 173
Year ended December 31, 2007
Revenues from external customers $1,498,652 $129,932 $466,458 $103,530
Gross Profit 79,367 37,040 50,602 19,738
Other income / Equity in
earnings of affiliates 43,591 1,038 909 438
Operating income (loss) 65,934 19,505 27,055 95
Year ended December 31, 2006
Revenues from external customers $791,207 $113,326 $265,038 $111,284
Gross Profit 62,809 37,817 24,123 21,728
Other income / Equity in
earnings of affiliates 15,867 511 1,015 1,115
Operating income (loss) 27,955 19,543 3,287 3,246
Segment Data
Retail Other Total
Quarter ended December 31, 2007
Revenues from external customers $49,552 $- $784,634
Gross Profit 14,061 - 74,677
Other income / Equity in earnings of
affiliates 373 283 17,280
Operating income (loss) (636) (6,229) 34,922
Quarter ended December 31, 2006
Revenues from external customers $49,296 $- $463,415
Gross Profit 14,587 - 58,966
Other income / Equity in earnings of
affiliates 168 764 5,062
Operating income (loss) 1,856 (167) 18,941
Year ended December 31, 2007
Revenues from external customers $180,487 $- $2,379,059
Gross Profit 52,965 - 239,712
Other income / Equity in earnings of
affiliates 840 6,778 53,594
Operating income (loss) 139 (6,867) 105,861
Year ended December 31, 2006
Revenues from external customers $177,198 $- $1,458,053
Gross Profit 52,763 - 199,240
Other income / Equity in earnings of
affiliates 865 2,731 22,104
Operating income (loss) 3,152 (2,714) 54,469
SOURCE The Andersons, Inc.
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Related links:
http://www.andersonsinc.com
CONTACT:
Gary Smith of The Andersons, Inc.,
+1-419-891-6417
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