Grain & Ethanol Business Leads Income Growth
MAUMEE, Ohio, May 2 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced first-quarter revenues of $409 million and
net income of $9.2 million, or $0.51 per diluted share. In the same
three-month period of 2006, the company reported net income of $3.8
million, or $0.25 per diluted share, on $281 million of revenues.
The Grain & Ethanol Group achieved operating income of $10.2 million in
the most recent quarter, more than five times the $1.8 million it earned in
the first quarter of 2006. Total revenues were $247 million for the period.
This included more than $30 million of ethanol sales made by the group in
accordance with a marketing agreement between the company and its new
Albion ethanol joint venture. In the first quarter of 2006, the group's
total revenues were $129 million. The group's grain business sold more
bushels than during last year's first quarter, and average grain prices
were more than 40 percent above year-earlier levels. The business also
benefited from two other items, improved income from its grain storage, and
fee income for originating corn for the ethanol companies in which it is a
significant investor. The group's ethanol business also achieved income
growth during the most recent quarter. The Albion, Michigan plant was still
under construction through the first two-thirds of 2006, but is in full
operation this year. In the first quarter of 2007, the group also realized
$5.4 million of income from non- recurring development fees associated with
the new ethanol plants. Last year, the group received $1.9 million of
ethanol development fees in the first quarter. Another new plant in which
the group is a significant investor, this one located in Clymers, Indiana,
is commencing ethanol production this week. First quarter income from the
group's investment in the Lansing Trade Group LLC was lower this year.
The Rail Group's operating income of $3.0 million in the first quarter
of 2007 was down $3.2 million from the same three-month period a year ago.
Revenues of $26 million for the quarter were $8 million lower. Although the
group sold some railcars during the quarter, its total fleet at the end of
March had increased by more than 1,800 railcars over the past twelve
months, but the utilization rate (the percentage of the fleet in service at
the end of the period) had decreased 2 percent to 93 percent at the end of
March this year. Overall U.S. rail traffic has declined by nearly 5 percent
compared to the first quarter of 2006, and demand for most car types has
softened. Since fewer railcars were sold in the first quarter of 2007 than
had been sold in the comparable period last year, and maintenance costs on
the group's fleet were higher, total revenues and operating income in the
railcar leasing business were down. A slowdown in the group's manufacturing
business and in its railcar repair business following completion of the
post-Katrina surge of railcars requiring refurbishment also contributed to
the decline in the group's operating income.
The Plant Nutrient Group achieved operating income of $0.4 million in
the first quarter of 2007 on $67 million of revenues. In this highly
seasonal industry, the first quarter is typically a loss period. Last year
the group incurred an operating loss of $1.2 million during the quarter on
revenues of $46 million. The revenue increase and improved bottom line was
due to higher prices for the group's products, slightly better margins, and
increased tonnage sold as dealers stocked up in anticipation of a large
increase in U.S. corn acres this season and anticipated tightness in
nutrient supplies during planting.
The Turf & Specialty Group achieved operating income of $1.8 million on
$36 million of revenues during the first quarter this year. Last year, it
reported $2.1 million of income and $40 million of revenues for the period.
Turf products tonnage was lower in the first quarter due to heavy buying by
distributors late last year and wintry weather in March this year. In spite
of record high raw material prices this year, average gross margins in the
lawn business were higher as a result of the introduction of several new
value- added products. The group's cob products business experienced
increased raw material costs in the first quarter this year due to tight
raw material supplies.
The Retail Group reported revenues of $33.8 million for the first
quarter of 2007, an increase of 5.2 percent in same-store sales from the
same period in 2006, in part due to continued growth in food and wine
categories and strong sales of cold-weather goods with the late winter
conditions this year. For the three month period, the Retail Group incurred
an operating loss of $2.3 million this year, slightly improved from the
$2.4 million loss incurred in the first quarter of 2006. Last week the
group opened a food-only store in Sylvania, Ohio, a suburb of Toledo. The
new 31,000 square foot store, known as The Andersons Market, features an
expanded line of basic groceries plus all of the deli, bakery, produce,
fresh and frozen meats, specialty foods, wines and related products that
are offered in the group's much larger stores.
"We feel good about our overall performance so far this year. While
Rail is being impacted by some industry-wide softness, and part of our
earnings were from non-recurring items, the Grain & Ethanol, Plant
Nutrient, and Retail businesses all contributed to our income growth during
the period," said President and Chief Executive Officer Mike Anderson. "Our
new Andersons Market has just opened and is being favorably received by
area shoppers, the Clymers plant is starting to produce ethanol this week,
and the huge increase in corn plantings this spring should benefit our
grain, ethanol and plant nutrient businesses. All considered, I'm
optimistic about our company's future."
Mr. Anderson also stated "Looking at our 2007 earnings prospects,
numerous factors will have a bearing on the full-year outcome: weather
patterns during the important agricultural planting and growing season
within our region, the number of acres switched to corn from other crops,
nutrient and energy commodity prices, railcar values and lease rates,
retail and professional demand for lawn and garden products, and a
successful launch of the ethanol plant in Clymers, Indiana. Given all of
these variables and the picture we see before us today, we anticipate that
our full-year 2007 earnings will be within a range from $2.35 to $2.60 per
diluted share."
The company will host a webcast on Thursday, May 3, 2007 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 rail leasing, industrial products formulation, 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 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
FINANCIAL TABLES FOLLOW . . .
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended
March 31
(in thousands, except for per share amounts) 2007 2006
Sales and merchandising revenues $409,144 $280,658
Cost of sales and merchandising
revenues 363,123 240,387
Gross profit 46,021 40,271
Operating, administrative and general
expenses 39,620 36,692
Interest expense 5,022 4,194
Minority interests 83 -
Other income, net 9,873 3,059
Equity in earnings of affiliates 2,832 3,553
Income before income taxes 14,167 5,997
Income taxes 4,928 2,162
Net income $9,239 $3,835
Per common share:
Basic earnings $0.52 $0.25
Diluted earnings $0.51 $0.25
Dividends paid $0.0475 $0.0450
Weighted average shares outstanding-
basic 17,729 15,090
Weighted average shares outstanding-
diluted 18,242 15,638
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
March 31 December 31 March 31
(in thousands) 2007 2006 2006
Assets
Current assets:
Cash and cash equivalents $27,449 $23,398 $15,821
Restricted cash 3,774 3,801 3,856
Accounts receivable (net) and
margin deposits 166,916 136,819 100,063
Inventories 328,712 299,105 262,198
Other current assets 48,537 33,325 32,289
Total current assets 575,388 496,448 414,227
Investments and other assets 97,889 72,335 63,506
Railcar assets leased to others (net) 133,980 145,059 131,991
Property, plant and equipment (net) 96,552 95,502 90,943
$903,809 $809,344 $700,667
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $176,000 $75,000 $132,100
Other current liabilities 243,288 265,040 209,815
Total current liabilities 419,288 340,040 341,915
Deferred items and other long-term
liabilities 39,027 41,267 31,693
Long-term debt non-recourse 67,973 71,624 86,269
Long-term debt 85,848 86,238 77,217
Minority interest 12,837 - -
Shareholders' equity 278,836 270,175 163,573
$903,809 $809,344 $700,667
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Quarter ended March 31, 2007
Revenues from external customers $246,584 $25,916 $66,560 $36,304
Gross Profit 15,420 9,265 5,425 6,071
Other income / Equity in earnings of
affiliates 8,814 91 156 62
Operating income (loss) 10,170 3,008 431 1,800
Quarter ended March 31, 2006
Revenues from external customers $128,625 $34,383 $46,033 $39,505
Gross Profit 6,945 12,878 4,133 6,635
Other income / Equity in earnings of
affiliates 5,641 120 101 363
Operating income (loss) 1,780 6,218 (1,235) 2,149
Retail Other Total
Quarter ended March 31, 2007
Revenues from external customers $33,780 $- $409,144
Gross Profit 9,840 - 46,021
Other income / Equity in earnings of
affiliates 160 3,422 12,705
Operating income (loss) (2,287) 1,045 14,167
Quarter ended March 31, 2006
Revenues from external customers $32,112 $- $280,658
Gross Profit 9,680 - 40,271
Other income / Equity in earnings of
affiliates 164 223 6,612
Operating income (loss) (2,441) (474) 5,997
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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