EPS of $1.48 for First Half up $0.17 from 2004
Six-Month Net Income Up 16 Percent
MAUMEE, Ohio, Aug. 2 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced second-quarter 2005 net income of $10.4
million, an improvement of $0.3 million from the second quarter of 2004 when
the company earned $10.1 million. Earnings per diluted share for the period
were $1.35, unchanged from 2004 results. Total revenues were $365 million for
the second quarter this year compared to $375 million a year ago. The
reduction in revenues was attributed to lower average grain prices. The
company's second-quarter 2005 results included a favorable tax adjustment of
$0.6 million attributed to Ohio tax reform legislation which was enacted on
June 30th. For the first half of 2005, the company's net income was $11.4
million, or $1.48 per diluted share, on revenues of $624 million. Last year,
The Andersons earned $9.8 million, or $1.31 per diluted share, in the first
half, on revenues of $649 million.
The Agriculture Group's second-quarter operating income of $8.9 million
was $2.0 million below the $10.9 million it earned in the same period last
year. Revenues of $253 million for the second quarter this year were $14
million below last year primarily due to lower average corn and soybean
prices. Average grain margins were relatively unchanged during the quarter,
but space income declined and some grain inventory shrink and quality
adjustments were incurred. The group's plant nutrient business achieved
operating income growth in the second quarter in spite of significantly higher
commodity prices compared to 2004. Tonnage shipments were relatively
unchanged, but operating income per ton was higher, and the group's farm
centers also improved. Through the first six months of 2005, the Agriculture
Group had operating income of $9.9 million on revenues of $418 million. In the
first half of last year, the group had revenues of $450 million and operating
income of $9.4 million. The group expects to begin construction of a 55
million gallon-per-year ethanol production facility adjacent to its Albion,
Michigan grain facility soon. While preliminary site work has begun,
completion of the project is contingent upon several final items, including
state and local economic incentives. The company is also exploring the
construction of a 110 million gallon ethanol plant adjacent to its Clymers,
Indiana grain facility. No decision has yet been made about construction on
this site. The Company anticipates some level of outside investment on each of
these projects. In July, a grain elevator located in Toledo, Ohio, which The
Andersons operates, was severely damaged by an explosion and fire. The company
indicated that the necessary repairs will extend into next year. As a result,
2005 income will be reduced, but this will be mostly offset next year when the
insurance claim process is completed. Total income for the two years should
not be impacted materially by the accident.
The Rail Group's operating income of $3.8 million in the second quarter
this year was $1.7 million above the $2.1 million it earned in the same three-
month period a year ago. Revenues of $17.7 million for the quarter were $4.6
million higher than the $13.1 generated in the second quarter 2004. The rail
leasing business continued to achieve excellent revenue and operating income
growth during the most recent three-month period. Car values and lease rates
continued to be strong, and the utilization rate of the group's railcar fleet
was again higher than year-earlier levels. The group's railcar repair shops
and its steel fabrication business also achieved revenue and operating income
growth in the second quarter. For the first half of 2005, the Rail Group had
operating income of $7.4 million on revenues of $35.4 million. Last year the
group reported first-half revenues of $24.2 million and operating income of
$3.3 million. During the second quarter, the group purchased 2,000 railcars,
increasing its total fleet to approximately 18,000 railcars. In July, the
company announced the purchase of two product lines of fluid filtration
equipment that will be manufactured and marketed by the group's steel
fabrication business.
The Processing Group's operating income of $0.4 million in the second
quarter of 2005 was $0.6 million lower than a year ago. Revenues of $40.5
million for the quarter were $0.5 million higher than the $40.0 million it
registered in the second quarter of last year. Turf-care product volumes were
lower this year, primarily with industrial accounts, and expenses in the cob
products business increased. Through six months this year, the Processing
Group had $81.4 million of revenues and $1.5 million of operating income. In
the first half of 2004, the group's revenues were $85.3 million and operating
income was $4.2 million. While reaffirming its commitment to the professional
sector of the lawn products industry, the group is reassessing its strategic
position in that industry's consumer and industrial sectors.
The Retail Group reported revenues of $54.4 million for the second quarter
of 2005, a 0.2 percent decrease in same-store sales compared to the same
three-month period in 2004. The average sale per customer and average gross
margin both improved somewhat, and the group's operating income of $3.8
million for the period was $0.1 million better than its 2004 performance.
Sales of lawn and garden products were strong this spring, recovering from the
rather poor spring season experienced last year. The group's June year-to-date
revenues were $89.5 million this year, 0.4 percent higher than last year.
First half operating income this year was $1.7 million, $0.3 million above the
$1.4 million of operating income it generated in 2004.
"The second quarter is always a very strong period for several of our
seasonal businesses, and this year was no exception. Our net income of $10.4
million for the three-month period was a record," said President and Chief
Executive Officer Mike Anderson. "Agriculture's plant nutrient business, Rail
and Retail all achieved operating income growth during the second quarter of
2005, and these same businesses are also ahead of last year through six
months. In total, the Company's earnings are seventeen cents a share ahead of
last year, and the strong cash flow generated by our operating businesses
continues to enable us to pursue promising new growth opportunities."
Anderson also stated "The corn and soybean crops in our region were
definitely impacted by the hot and dry weather we experienced in June and
early July. Recent rains have helped, but the proportion of Illinois crops
rated "good" or "excellent" in weekly USDA surveys remains way below recent
years' experience. Although we expect that our Agriculture Group's second half
grain income will be closer to multi-year averages rather than last year's
record performance, the strong results achieved by our plant nutrient, rail
and retail businesses suggest that our previously-announced full-year earnings
projection of $2.20 to 2.50 per share is still appropriate."
The company will host a webcast on Wednesday, August 3, 2005 at 11:00 A.M.
EDT, to discuss its second quarter performance and full-year outlook. This can
be accessed under the heading "Financial Information" on its website at
http://www.andersonsinc.com.
The Andersons, Inc. is a diversified company with interests in the grain
and plant nutrient sectors of U.S. agriculture, as well as in railcar
marketing, industrial materials formulation, turf products production, and
general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company
presently 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 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 Six Months ended
June 30 June 30
(in thousands, except for per
share amounts) 2005 2004 2005 2004
Sales and merchandising revenues $365,116 $374,510 $623,773 $648,846
Cost of sales and merchandising
revenues 312,098 318,442 530,796 556,716
Gross profit 53,018 56,068 92,977 92,130
Operating, administrative and
general expenses 35,855 38,135 72,756 72,879
Interest expense 3,191 2,738 6,141 5,404
Other income, net 1,430 1,117 2,509 1,908
Equity in earnings of affiliates 14 160 460 322
Income (loss) before income taxes 15,416 16,472 17,049 16,077
Income taxes 5,063 6,410 5,662 6,261
Net Income (loss) $10,353 $10,062 $11,387 $9,816
Per common share:
Basic earnings (loss) $1.40 $1.39 $1.54 $1.36
Diluted earnings (loss) $1.35 $1.35 $1.48 $1.31
Dividends paid $0.080 $0.075 $0.160 $0.150
Weighted average shares
outstanding-basic 7,399 7,235 7,386 7,227
Weighted average shares
outstanding-diluted 7,688 7,472 7,670 7,475
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
June 30 December 31 June 30
(in thousands) 2005 2004 2004
Assets
Current assets:
Cash and cash equivalents $7,864 $8,439 $8,768
Restricted cash 1,435 1,532 1,777
Accounts receivable (net) and
margin deposits 91,025 66,235 75,343
Inventories 182,405 251,428 152,865
Other current assets 16,177 30,659 20,987
Total current assets 298,906 358,293 259,740
Other assets 18,928 21,437 22,179
Railcar assets leased to others (net) 134,450 101,358 103,214
Property, plant and equipment (net) 91,678 92,510 94,360
$543,962 $573,598 $479,493
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $69,900 $12,100 $15,000
Other current liabilities 148,032 240,447 152,158
Total current liabilities 217,932 252,547 167,158
Deferred items and other long-term
liabilities 33,085 33,029 29,323
Long-term debt non-recourse 59,333 64,343 74,216
Long-term debt 89,105 89,803 83,578
Shareholders' equity 144,507 133,876 125,218
$543,962 $573,598 $479,493
Segment Data
Agriculture Rail Processing Retail Other Total
Quarter ended
June 30, 2005
Revenues from
external
customers $252,561 $17,673 $40,464 $54,418 $- $365,116
Gross Profit 22,937 8,589 4,823 16,669 - 53,018
Other income /
Equity in
earnings of
affiliates 429 356 139 245 275 1,444
Operating income
(loss) 8,914 3,799 412 3,843 (1,552) 15,416
Quarter ended
June 30, 2004
Revenues from
external
customers 266,819 13,133 40,031 54,527 - 374,510
Gross Profit 27,189 6,865 5,506 16,508 - 56,068
Other income /
Equity in
earnings of
affiliates 767 56 88 254 112 1,277
Operating income
(loss) 10,940 2,050 1,018 3,706 (1,242) 16,472
Six months ended
June 30, 2005
Revenues from
external
customers 417,570 35,378 81,355 89,470 - 623,773
Gross Profit 38,718 17,104 10,681 26,474 - 92,977
Other income /
Equity in
earnings of
affiliates 1,337 541 307 377 407 2,969
Operating income
(loss) 9,865 7,439 1,489 1,745 (3,489) 17,049
Six months ended
June 30, 2004
Revenues from
external
customers 450,298 24,213 85,257 89,078 - 648,846
Gross Profit 40,907 11,934 13,365 25,924 - 92,130
Other income /
Equity in
earnings of
affiliates 1,297 153 139 410 231 2,230
Operating income
(loss) 9,411 3,341 4,230 1,389 (2,294) 16,077
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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