First Half Results Set New Records
MAUMEE, Ohio, July 28 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced second-quarter net income of $10.3 million,
or $0.66 per diluted share, and total revenues of $378 million. In the same
three-month period of 2005, the company reported net income of $10.4
million, or $0.67 per diluted share, on $365 million of revenues. For the
first six months of 2006, the company's net income was $14.2 million, or
$0.90 per diluted share, on revenues of $659 million. These first half net
income and per share earnings established new records for the company. In
the first half of 2005, The Andersons earned $11.4 million, or $0.74 per
diluted share, on revenues of $624 million. All of the earnings per share
data have been adjusted to reflect the June 28, 2006 2-for-1 stock split.
The Grain & Ethanol Group's second-quarter operating income of $1.9
million was $3.3 million better than its year earlier result. Total
revenues of $149 million for the period were $16 million higher than the
second quarter of 2005. The number of bushels handled by the group's
elevators was higher than the prior period, and average gross sales margins
were also higher. Although space income was lower than last year in the
second quarter, total gross profit increased. The group's investment in its
commodity trading affiliate, Lansing Trade Group, LLC, also achieved
earnings growth in the most recent three-month period. Through the first
half of 2006, the Grain & Ethanol Group achieved operating income of $3.7
million. In the same period last year, operating income was $0.4 million.
During the past year, the group has invested in three limited liability
companies which are constructing ethanol production facilities in Michigan
and Indiana. The Andersons is a significant investor in two of these
projects and will provide general management, ethanol and DDGS marketing,
and risk management services to them and offers these services to other
ethanol producers as well. The plant located in Albion, Michigan, is
scheduled to begin production in August. The Grain & Ethanol Group's second
quarter results include the impact of employee recruiting, training and
some other pre-opening expenses associated with the ethanol business. The
group has also recently announced its intent to form a joint venture with
Marathon Oil to build and operate additional ethanol facilities.
The Rail Group's operating income of $5.0 million in the second quarter
of 2006 was $1.2 million higher than it earned in the same three-month
period a year ago. Revenues of $28 million for the quarter were $10 million
higher than the prior period. The group's railcar fleet utilization rate
(the percentage of the fleet in service at the end of the period) has also
increased over time. At the end of June 2006 it stood at 95 percent. The
group realized some gains from the sale of railcars and related leases
during the quarter, and income from the leasing business in total improved
versus the prior year. Operating income from the group's railcar repair and
manufacturing businesses was also higher in the second quarter. In the
first half of 2006, the group achieved revenues of $62 million and $11.2
million of operating income. Last year, it reported revenues of $35 million
and operating income of $7.4 million for the first half of 2005.
The Plant Nutrient Group had revenues of $113 million and operating
income of $5.0 million in the second quarter this year. It earned $10.3
million on $120 million of revenues during the same three-month period of
2005. With much higher energy and nutrient input costs, the company
believes that farmers have reduced the amount of nutrients applied to their
fields this year, essentially keeping spending in line with last year. With
volume and average gross margins both down, the group's second-quarter
gross profit declined significantly from last year. Through the first half
of 2006, the group's operating income was $3.8 million on $159 million of
revenues. In the same period last year, operating income amounted to $9.5
million on $164 million of revenues.
The Turf and Specialty Group continued to achieve improved results
during the most recent quarter. For the period, the group's operating
income was $1.3 million on $33 million of revenues. In 2005, it earned $0.4
million of operating income in the second quarter on $40 million of
revenues. The group's lawn and cob products businesses both contributed to
this improvement. Through the first six months of this year, the group has
reported operating income of $3.5 million and revenues of $73 million. In
the first half of 2005, the group had revenues of $81 million and $1.5
million of income. During the past year, this group has restructured its
businesses, reduced costs, improved operating efficiency, and focused on
the products and markets where it can add the most value, which has allowed
the group to increase profitability in spite of reduced revenue.
The Retail Group reported revenues of $55 million for the second
quarter of 2006, an increase of 0.7 percent in same-store sales from the
same period in 2005. With higher gross profit generated by the increase in
sales, and a slight reduction in expenses, the group's operating income was
$4.2 million for the quarter, about $0.3 million above the same period last
year. For the first half of the year, the group generated revenues of $87
million and operating income of $1.7 million. In the first half of 2005, it
also had operating income of $1.7 million but slightly higher revenues of
$89 million.
President and Chief Executive Officer Mike Anderson reports that "for
the following reasons, I believe the company's earnings prospects for the
2006 calendar year have strengthened versus earlier forecasts." Mr.
Anderson explains: "We're about to begin production of ethanol at the new
plant in Albion, Michigan ahead of schedule, and ethanol economics are
stronger now than our earlier projections envisioned. In addition, the
prospects for an excellent grain harvest in our region are even better now
than we thought earlier, we continue to achieve growth in our rail
business, our turf and specialty business is performing better than
anticipated, and our investment in Lansing Trade Group is doing very well.
Our estimate of the business interruption insurance settlement related to
the accident at one of our elevators last year is also higher now that more
specific data is available. The guidance we issued in early May, adjusted
for the subsequent stock split, indicated that we expected to earn $1.70 to
$1.90 per diluted share this year. While there is still a lot of time left
in the growing season, and several other things such as the ethanol plant
launch have to be executed well, it now appears that a range of $1.90 to
$2.10 for our full-year earnings per share is a reasonable expectation.
These per share estimates do not take into account the pending issuance of
additional shares pursuant to our announced stock offering, which is not
yet final. We will, of course, continue to evaluate our earnings
projections as we progress through the year."
The company will host a webcast today at 2:00 P.M. ET, to discuss its
second-quarter 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 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. Although the company believes that the assumptions upon which
the financial information and its forward-looking statements have been
based are reasonable, it can give no assurance that these assumptions and
the forward-looking statements 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 Six Months ended
June 30 June 30
(in thousands, except for per
share amounts) 2006 2005 2006 2005
Sales and merchandising revenues $378,109 $365,117 $658,767 $623,773
Cost of sales and merchandising
revenues 323,342 312,099 563,729 530,796
Gross profit 54,767 53,018 95,038 92,977
Operating, administrative and
general expenses 38,581 35,855 75,273 72,756
Interest expense 4,501 3,191 8,695 6,141
Other income, net 2,352 1,430 5,411 2,509
Equity in earnings of affiliates 2,209 14 5,762 460
Income before income taxes 16,246 15,416 22,243 17,049
Income tax provision 5,899 5,063 8,061 5,662
Net Income $10,347 $10,353 $14,182 $11,387
Per common share:
Basic earnings $0.68 $0.70 $0.94 $0.77
Diluted earnings $0.66 $0.67 $0.90 $0.74
Dividends paid $0.045 $0.040 $0.0875 $0.080
Weighted average shares
outstanding-basic 15,220 14,798 15,155 14,772
Weighted average shares
outstanding-diluted 15,776 15,392 15,728 15,340
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
June 30 December 31 June 30
(in thousands) 2006 2005 2005
Assets
Current assets:
Cash and cash equivalents $15,474 $13,876 $7,864
Restricted cash 3,836 3,936 1,435
Accounts receivable (net) and
margin deposits 95,927 83,291 91,025
Inventories 168,918 240,806 182,405
Other current assets 24,623 30,632 16,177
Total current assets 308,778 372,541 298,906
Investments and other assets 64,344 39,008 18,928
Railcar assets leased to others (net) 136,271 131,097 134,450
Property, plant and equipment (net) 91,355 91,498 91,678
$600,748 $634,144 $543,962
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $51,600 $12,400 $69,900
Other current liabilities 169,723 263,922 151,884
Total current liabilities 221,323 276,322 221,784
Deferred items and other long-term
liabilities 33,683 30,896 29,233
Long-term debt non-recourse 82,529 88,714 59,333
Long-term debt 88,862 79,329 89,105
Shareholders' equity 174,351 158,883 144,507
$600,748 $634,144 $543,962
Segment Data
Grain
& Plant Turf &
Quarter ended June 30, 2006 Ethanol Nutrient Rail Specialty
Revenues from external customers $148,763 $113,308 $27,836 $33,428
Gross Profit 10,304 10,110 11,883 5,628
Other income / Equity in earnings of
affiliates 2,363 332 195 155
Operating income (loss) 1,923 5,041 4,999 1,344
Quarter ended June 30, 2005
Revenues from external customers 132,648 119,914 17,673 40,464
Gross Profit 7,339 15,598 8,589 4,823
Other income / Equity in earnings of
affiliates 144 285 356 139
Operating income (loss) (1,381) 10,295 3,799 412
Six months ended June 30, 2006
Revenues from external customers 277,388 159,341 62,219 72,933
Gross Profit 17,249 14,243 24,761 12,263
Other income / Equity in earnings of
affiliates 8,004 433 315 518
Operating income (loss) 3,703 3,806 11,217 3,493
Six months ended June 30, 2005
Revenues from external customers 253,585 163,985 35,378 81,355
Gross Profit 17,538 21,180 17,104 10,681
Other income / Equity in earnings of
affiliates 825 512 541 307
Operating income (loss) 357 9,508 7,439 1,489
Segment Data
Retail Other Total
Quarter ended June 30, 2006
Revenues from external customers $54,774 $- $378,109
Gross Profit 16,842 - 54,767
Other income / Equity in earnings of
affiliates 268 1,248 4,561
Operating income (loss) 4,155 (1,216) 16,246
Quarter ended June 30, 2005
Revenues from external customers 54,418 - 365,117
Gross Profit 16,669 - 53,018
Other income / Equity in earnings of
affiliates 245 275 1,444
Operating income (loss) 3,843 (1,552) 15,416
Six months ended June 30, 2006
Revenues from external customers 86,886 - 658,767
Gross Profit 26,522 - 95,038
Other income / Equity in earnings of
affiliates 432 1,471 11,173
Operating income (loss) 1,714 (1,690) 22,243
Six months ended June 30, 2005
Revenues from external customers 89,470 - 623,773
Gross Profit 26,474 - 92,977
Other income / Equity in earnings of
affiliates 377 407 2,969
Operating income (loss) 1,745 (3,489) 17,049
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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