Earnings For Period Of $ 0.42 Per Diluted Share
Plant Nutrient and Rail Businesses Lead Earnings Results
MAUMEE, Ohio, May 7 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced first quarter net income of $7.8 million,
or $0.42 per diluted share, on revenues of $713 million. In the same three
month period of 2007, the company reported net income of $9.2 million, or
$0.51 per diluted share, on $407 million of revenues.
The Grain & Ethanol Group's first quarter operating income of $2.2
million was significantly less than its year earlier result of $10.2
million. The prior year's first quarter had $4.1 million more in
non-recurring development fees associated with the ethanol plants. The
grain business suffered a significant basis loss during the quarter as the
cash markets for corn, beans and wheat did not rise at the same pace as the
futures market. In contrast, income from the ethanol joint ventures grew
significantly during the most recent quarter. The Albion and Clymers
ethanol plants were in operation during the entire quarter and the
Greenville plant opened in February. This compares to last year, when only
the Albion facility was operating during the first quarter. In addition,
first quarter income from the group's investment in Lansing Trade Group was
significantly higher this year. The group was also impacted during the
first quarter by rising inventory carrying costs associated with higher
grain prices; specifically, interest expense increased over $3.0 million in
comparison to the prior period. Total first quarter revenues for the group
were $499 million; this includes $186 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. In the first quarter of 2007, the group's total revenues were $244
million, and included $40 million of the aforementioned ethanol joint
venture fee only sales. While revenues for the group are higher, such
amounts do not serve as good predictors of income or economic performance
in a commodity based business.
The Rail Group's record operating income of $6.4 million in the first
quarter of 2008 was more than double the $3.0 million earned during the
same three month period a year ago. Revenues of $35 million for the quarter
were $9 million higher than the $26 million reported in 2007. The group
recognized $2.2 million in gross margin from the sale of railcars and
related leases during the quarter. Gross profit from the leasing business
was higher due to lower maintenance costs per car, a higher utilization
rate, and growth in the size of the fleet. The group now has approximately
23,200 cars and locomotives, which is 10% more than it had twelve months
ago. The average utilization rate (the percentage of the fleet in service)
for the quarter was 93.4% in comparison to 92.5% for the same period last
year. The gross profit of the railcar repair business grew during the first
quarter due to the addition of a new repair shop in the second half of
2007.
The Plant Nutrient Group achieved record operating income of $7.5
million during the first quarter of 2008 on revenues of $105 million. These
earnings are unprecedented in the first quarter, as the first quarter is
typically a break-even or loss period. In the same three month period in
2007, the group reported a $0.4 million operating profit on $67 million of
revenues. These earnings resulted from significant margin increases
primarily resulting from inventory price appreciation, which began last
year and has continued into 2008. Due to this escalation of plant nutrient
prices, sales volume is slightly down from last year. As was recently
announced, the group purchased Douglass Fertilizer & Chemical Inc. at the
end of April. With 2007 sales of $47 million, Douglass has five facilities
in Florida and one in Puerto Rico and is a specialty liquid nutrient
manufacturer and retailer/wholesaler whose product lines complement the
group's existing product lines well.
The Turf & Specialty Group achieved operating income of $2.0 million on
$40 million of revenues during the first quarter. Last year, the group
reported $1.8 million of income on $36 million of revenues for the period.
Turf products tonnage increased slightly from year to year. Gross profit
per ton was also up slightly, in spite of record high raw material prices
this year, due to a larger percentage of sales coming from proprietary
products such as Contec DG.
The Retail Group reported revenues of $33.7 million for the first
quarter of 2008, which is similar to the $33.8 million in revenues reported
for the same period in 2007. This includes sales from the Sylvania market
store, which opened in the second quarter of 2007. Same store sales
decreased 4.9% for the period. This sales decline is believed to be due to
the overall decline in consumer spending. For the three month period, the
Retail Group incurred an operating loss of $3.4 million, which compares to
a $2.3 million loss incurred in the first quarter of 2007. Due to
competitive sales pressure in the markets served, margins have also been
reduced.
"We feel good about our overall performance so far this year. The Plant
Nutrient and Rail businesses both contributed significantly to our income
during the period. Our Grain & Ethanol Group was impacted in the first
quarter by a reduction in basis that has started to return in April. We
anticipate regaining the majority of this back later in the year, since we
expect basis levels to improve. We were pleased this quarter that we were
able to adjust both our long and short term debt to respond to the
increasing commodity prices," said President and Chief Executive Officer
Mike Anderson. "We are excited about the recent addition of Douglass
Fertilizer, as this acquisition is consistent with our strategic goal of
increasing our plant nutrient footprint and national market share through
geographic expansion. We are also pleased that the third ethanol plant and
sixth rail repair shop became operational this year. Our team continues to
demonstrate the company's commitment to organic and adjacent growth," added
Mr. Anderson.
Mr. Anderson also stated "Looking at our 2008 earnings forecast,
numerous factors will have a bearing on the full year outcome: weather
patterns during the agricultural planting and growing season within our
region, the ability of farmers to make progress on corn planting that is
currently quite a bit behind the five year national average, nutrient and
energy prices, timing of railcar sales, and the performance of our equity
investments, which include the ethanol production plants and Lansing Trade
Group. Given all of these variables and the picture we see before us today,
we anticipate that our full year 2008 earnings will be within a range of
$3.65 to $4.00 per diluted share."
The company will host a webcast on Thursday, May 8, 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 ten U.S. states and Puerto Rico, 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
March 31
(in thousands, except for per share amounts) 2008 2007
Sales and merchandising revenues $713,001 $406,503
Cost of sales and merchandising revenues 660,760 362,118
Gross profit 52,241 44,385
Operating, administrative and general
expenses 39,504 37,751
Allowance for doubtful accounts receivable 1,787 233
Interest expense 9,122 5,022
Other income / gains:
Equity in earnings of affiliates 8,639 2,832
Other income, net 2,884 9,873
Minority interest in net (income)
loss of subsidiary (935) 83
Income before income taxes 12,416 14,167
Income taxes 4,593 4,928
Net income $7,823 $9,239
Per common share:
Basic earnings $0.43 $0.52
Diluted earnings $0.42 $0.51
Dividends paid $0.0775 $0.0475
Weighted average shares outstanding-basic 18,026 17,729
Weighted average shares outstanding-diluted 18,408 18,242
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
March 31 December 31 March 31
(in thousands) 2008 2007 2007
Assets
Current assets:
Cash and cash equivalents $34,765 $22,300 $27,449
Restricted cash 3,689 3,726 3,774
Accounts receivable, net 177,947 106,257 122,880
Margin deposits, net 65,932 20,467 46,894
Inventories 558,030 502,904 316,831
Commodity derivative assets -
current 283,417 205,956 74,959
Other current assets 58,079 43,281 48,537
Total current assets 1,181,859 904,891 641,324
Investments and other assets 156,521 137,518 97,889
Commodity derivative assets 50,828 29,458 20,613
Railcar assets leased to others (net) 172,142 153,235 133,980
Property, plant and equipment (net) 100,192 99,886 96,552
$1,661,542 $1,324,988 $990,358
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $390,000 $245,500 $176,000
Commodity derivative liabilities -
current 153,791 122,488 60,894
Other current liabilities 362,736 359,224 243,288
Total current liabilities 906,527 727,212 480,182
Deferred items and other long-term
liabilities 49,419 49,631 39,027
Commodity derivative liabilities 8,734 2,090 25,655
Long-term debt non-recourse 51,667 56,277 67,973
Long-term debt 279,348 133,195 85,848
Minority interest 13,154 12,219 12,837
Shareholders' equity 352,693 344,364 278,836
$1,661,542 $1,324,988 $990,358
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Quarter ended March 31, 2008
Revenues from external customers $499,123 $35,011 $105,469 $39,661
Gross Profit 11,379 11,151 13,678 6,926
Other income / Equity in earnings of
affiliates 11,173 178 146 93
Operating income (loss) 2,233 6,426 7,540 2,000
Quarter ended March 31, 2007
Revenues from external customers $243,943 $25,916 $66,560 $36,304
Gross Profit 15,420 7,629 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
Segment Data
Retail Other Total
Quarter ended March 31, 2008
Revenues from external customers $33,737 $- $713,001
Gross Profit 9,107 - 52,241
Other income / Equity in earnings of
affiliates 147 (214) 11,523
Operating income (loss) (3,377) (2,406) 12,416
Quarter ended March 31, 2007
Revenues from external customers $33,780 $- $406,503
Gross Profit 9,840 - 44,385
Other income / Equity in earnings of
affiliates 160 3,422 12,705
Operating income (loss) (2,287) 1,045 14,167
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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