2006 Net Income of $36.3 Million Up 39%
MAUMEE, Ohio, Feb. 8 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced its 2006 results, with full-year net income
at $36.3 million, or $2.19 per diluted share, on $1.5 billion of revenues.
In 2005, the company's full-year net income was $26.1 million, or $1.69 per
diluted share, and total revenues were $1.3 billion. Fourth-quarter net
income in 2006 was $13.8 million, or $0.76 per diluted share, and total
revenues were $463 million. In the same three-month period of 2005, the
company reported net income of $15.3 million, or $0.99 per diluted share,
on $384 million of revenues.
The Grain and Ethanol Group's full-year operating income of $27.9
million in 2006 established a new record, $15.3 million higher than the
$12.6 million it achieved in 2005, the group's previous best full-year
performance. Operating income of $12.3 million in the fourth quarter of
2006 was below the $14.8 million the group generated a year earlier. The
number of grain bushels delivered to The Andersons' elevators increased
slightly this year. Total grain gross profit and operating income also
improved for the year, despite reduced earnings from grain storage
attributable in part to higher interest costs. The group's emerging ethanol
business continued to register income growth during the most recent
quarter. The group's Albion, Michigan ethanol plant, in which The
Andersons, Inc. is a significant investor, began production during the
third quarter and shipped ethanol and distillers dried grain to customers
throughout the fourth quarter of 2006. Construction of its Clymers, Indiana
plant, in which the company also is a significant investor, is progressing
well and is scheduled to start producing ethanol early in the second
quarter of 2007. Recently construction also began on a Greenville, Ohio
plant, which is expected to begin operations in early 2008. The group's
investment in Lansing Trade Group, LLC exceeded its 2005 fourth-quarter
income in the most recent three-month period and achieved significant
income growth for the full year.
The Rail Group's 2006 revenues of $113 million exceeded 2005 by $21
million. Full-year operating income in 2006 was $19.5 million. In 2005, the
group had operating income of $22.8 million on $92 million of revenues.
Income from the rail leasing business was lower this year because gains
from the sale of railcars were down since fewer cars were liquidated in
2006, and maintenance costs were higher. The group's railcar fleet
continued to grow in 2006, and the utilization rate of the fleet remained
high. Revenues and income from the group's railcar repair and manufacturing
businesses also continued to increase this year. In the fourth quarter of
2005, the group generated total revenues of $33 million and $9.5 million of
operating income, including a significant amount from the liquidation of
some railcars. Without a similar sale during the fourth quarter this year,
the group's fourth-quarter 2006 revenues of $24 million and operating
income of $3.4 million were below its 2005 results.
The Plant Nutrient Group's revenues were $265 million in 2006, and its
operating income was $3.3 million. In 2005, its revenues amounted to $271
million and operating income was $10.4 million. The company believes that
farmers reduced the amount of nutrients applied to their fields in response
to significantly higher energy and nutrient input costs during the
important 2006 planting and growing seasons. This resulted in lower
wholesale and retail demand for plant nutrients including a deferral of
fall season purchasing, and a reduction in the group's gross profit and
operating income. In the fourth- quarter of 2006, the group had operating
income of $1.3 million on $67 million of revenues. In 2005, fourth-quarter
revenues were $60 million, and operating income was $1.7 million.
The Turf and Specialty Group's full-year operating income was $3.2
million in 2006, on $111 million of revenues. In 2005, the group incurred
an operating loss of $3.0 million, on revenues of $123 million. The
year-to-year improvement resulted from a change in the group's business
model which realigned staffing and assets in both the turf and cob products
businesses. In the fourth quarter, the group typically incurs an operating
loss due to the seasonal nature of its businesses. This year it achieved a
slight operating profit for the quarter on revenues of $18 million. During
the same three-month period in 2005, the group incurred an operating loss
of $1.5 million, with revenues of $22 million.
The Retail Group achieved an operating income of $3.2 million in 2006.
This was $0.3 million higher than its 2005 performance. Revenues amounted
to $177 million in 2006, down 3.0 percent from 2005. Improved average gross
margins were partially offset by lower average sales per transaction and
increased operating expenses. The group's fourth-quarter operating income
of $1.9 million was slightly below its year-earlier result. During the
quarter, the group began construction of a smaller-format food-only store
in Sylvania, Ohio. The new "Andersons Market" is scheduled to open in the
spring of 2007.
"We've been making a lot of changes throughout the company during the
past two years, and they're showing some very positive results," said
President and Chief Executive Officer Mike Anderson. "Our strategic
decision to enter the ethanol business is definitely having an impact, as
is our continued growth in Rail, our investment in Lansing Trade Group,
restructuring in Turf and Specialty, and other process improvements
throughout the company. As a result, in spite of the really tough market
realities encountered by our Plant Nutrient Group this year, we beat our
previous net income record by 39 percent. This successful growth benefits
all of our constituents - our customers, our employees, our communities,
and of course, our shareholders. With the Clymers, Indiana ethanol plant
scheduled to begin production two months from now, and continued growth in
our rail business, we look forward to continued positive progress in the
coming year."
The company will host a webcast on Friday, February 9, 2007 at 11:00
A.M. ET, to discuss its fourth quarter and full-year performance. 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 seven U.S. states plus rail 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. It also includes financial information, of which, as of the
date of this press release, the Company's independent auditors have not
completed their audit. 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
Three Months ended Year ended
December 31 December 31
(in thousands, except for per
share amounts) 2006 2005 2006 2005
Sales and merchandising
revenues $463,415 $384,421 $1,458,053 $1,296,949
Cost of sales and
merchandising revenues 402,865 315,548 1,250,921 1,098,506
Gross profit 60,550 68,873 207,132 198,443
Operating, administrative and
general expenses 42,885 44,349 158,468 153,759
Interest expense 3,786 3,108 16,299 12,079
Other income, net 2,151 868 13,914 4,386
Equity in earnings of
affiliates 2,911 984 8,190 2,321
Income before income taxes 18,941 23,268 54,469 39,312
Income tax provision 5,163 7,932 18,122 13,225
Net income $13,778 $15,336 $36,347 $26,087
Per common share:
Basic earnings $0.78 $1.03 $2.27 $1.76
Diluted earnings $0.76 $0.99 $2.19 $1.69
Dividends paid $0.045 $0.0425 $0.1775 $0.1650
Weighted average shares
outstanding-basic 17,611 14,930 16,007 14,842
Weighted average shares
outstanding-diluted 18,122 15,490 16,566 15,410
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
December 31 December 31
(in thousands) 2006 2005
Assets
Current assets:
Cash and cash equivalents $23,398 $13,876
Restricted cash 3,801 3,936
Accounts receivable (net) and
margin deposits 136,819 83,291
Inventories 299,105 240,806
Other current assets 33,325 30,632
Total current assets 496,448 372,541
Investments and other assets 72,335 39,008
Railcar assets leased to others (net) 145,059 131,097
Property, plant and equipment (net) 95,502 91,498
$809,344 $634,144
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $75,000 $12,400
Other current liabilities 265,040 263,922
Total current liabilities 340,040 276,322
Deferred items and other long-term
liabilities 41,267 30,896
Long-term debt non-recourse 71,624 88,714
Long-term debt 86,238 79,329
Shareholders' equity 270,175 158,883
$809,344 $634,144
Segment Data
Grain & Plant Turf &
Ethanol Nutrient Rail Specialty
Quarter ended December 31, 2006
Revenues from external customers $305,279 $67,117 $23,768 $17,955
Gross Profit 25,059 6,257 9,320 5,327
Other income / Equity in earnings of
affiliates 3,799 234 69 28
Operating income (loss) 12,302 1,349 3,428 173
Quarter ended December 31, 2005
Revenues from external customers 215,795 60,400 33,455 21,979
Gross Profit 26,655 7,151 14,945 4,809
Other income / Equity in earnings of
affiliates 1,157 200 106 44
Operating income (loss) 14,770 1,651 9,542 (1,486)
Year ended December 31, 2006
Revenues from external customers 791,207 265,038 113,326 111,284
Gross Profit 62,809 24,123 45,709 21,728
Other income / Equity in earnings of
affiliates 15,867 1,015 511 1,115
Operating income (loss) 27,955 3,287 19,543 3,246
Year ended December 31, 2005
Revenues from external customers 628,255 271,371 92,009 122,561
Gross Profit 50,456 32,774 43,281 18,888
Other income / Equity in earnings of
affiliates 2,890 1,096 642 589
Operating income (loss) 12,623 10,351 22,822 (3,044)
Segment Data
Retail Other Total
Quarter ended December 31, 2006
Revenues from external customers $49,296 $- $463,415
Gross Profit 14,587 - 60,550
Other income / Equity in earnings of
affiliates 168 764 5,062
Operating income (loss) 1,856 (167) 18,941
Quarter ended December 31, 2005
Revenues from external customers 52,792 - 384,421
Gross Profit 15,313 - 68,873
Other income / Equity in earnings of
affiliates 129 216 1,852
Operating income (loss) 2,003 (3,212) 23,268
Year ended December 31, 2006
Revenues from external customers 177,198 - 1,458,053
Gross Profit 52,763 - 207,132
Other income / Equity in earnings of
affiliates 865 2,731 22,104
Operating income (loss) 3,152 (2,714) 54,469
Year ended December 31, 2005
Revenues from external customers 182,753 - 1,296,949
Gross Profit 53,044 - 198,443
Other income / Equity in earnings of
affiliates 646 844 6,707
Operating income (loss) 2,921 (6,361) 39,312
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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