Third Quarter & Nine Months Income Both Set New Earnings Records
Grain & Ethanol and Plant Nutrient Businesses Lead Earnings Growth
MAUMEE, Ohio, Oct. 31 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced that its third quarter and first nine
months net income and earnings per diluted share established new records
for the company. Net income was $10.6 million, or $0.58 per diluted share
for the third quarter, and total revenues were $554 million. In the same
three month period of 2006, the company reported net income of $8.4
million, or $0.51 per diluted share, on revenues of $336 million. During
the first nine months of 2007, the company earned net income of $45.3
million, or $2.48 per diluted share, on revenues of $1.6 billion. The
company more than doubled the net income of $22.6 million earned during the
first nine months of 2006, or $1.41 per diluted share, on revenues of $995
million.
The Grain & Ethanol Group's third quarter operating income of $13.7
million was $1.8 million better than its year earlier result, which had
included a 2006 gain of $4.2 million from a business interruption insurance
claim. Total revenues were $383 million for the period. This included $85
million of ethanol sales made by the group in accordance with marketing
agreements between the company and its ethanol joint ventures, for which it
receives a fee. In the third quarter of 2006, the group's total revenues
were $209 million and did not include any sales from the ethanol joint
ventures. Income from ethanol joint ventures grew significantly during the
most recent quarter. Both the Albion, Michigan and Clymers, Indiana ethanol
plants were in operation during the entire third quarter, which was the
first quarter both plants were in full operation. In addition, third
quarter income from the group's investment in Lansing Trade Group LLC (LTG)
was significantly higher this year. Through the first nine months of 2007,
the Grain & Ethanol Group's operating income was $35.9 million, which is
more than double the $15.7 million earned for the same period in 2006.
Total revenues through September were $950 million, including $171 million
in sales of ethanol. In comparison, the group's revenues for the first nine
months of the prior year were $486 million and did not include any sales of
ethanol from the ethanol joint ventures. Total revenues in the Grain &
Ethanol Group have increased for both the quarter and nine months due to an
increase in bushels sold, a considerable increase in the average price of
the grains sold, and an increase in the gallons of ethanol sold.
The Rail Group's operating income of $5.8 million in the third quarter
of 2007 was $0.9 million above the $4.9 million it earned in the same three
month period in 2006. Revenues of $34 million for the quarter were up from
$27 million in the same period of the prior year. The group now has
approximately 22,600 cars and locomotives; this compares to about 20,400
cars and locomotives in the prior year. The group's average lease rates for
new transactions and utilization rate (the percentage of the fleet's
railcars in service at the end of the period) have decreased from a year
ago due to softness in the overall rail leasing market. Including some
gains from railcar sales and related leases entered into during the third
quarter, operating income in the group's leasing business was higher than
its year earlier results. Absent gains from sales, operating income from
leasing was slightly lower. The railcar repair and manufacturing businesses
also continued to experience lower operating income during the third
quarter. Through the first nine months of the year the Rail Group had
operating income of $15.7 million on $102 million of revenues. In 2006,
operating income through the same period was $16.1 million and revenues
amounted to $90 million.
The Plant Nutrient Group achieved operating income of $0.8 million
during the third quarter of 2007; this is the first time in the history of
the group that they have reported a profit in the third quarter. Total
revenues were $77 million for the period. This represents a significant
improvement from the same three month period in 2006 when the group
reported a $1.9 million operating loss on $39 million of revenues. The net
income record resulted from significant increases in both margin and
volume. The third quarter volume increase is the result of customers buying
earlier and more aggressively due to the escalation of nutrient prices and
to replenish depleted fertilizer stockpiles left virtually empty at the end
of the second quarter. The group's operating income for the first nine
months was $18.4 million on $326 million of revenues. Last year, its
operating income through the same period was $1.9 million and revenues were
$198 million. The record quarter and year to date income and revenues for
the group have been influenced by the significant increase in corn acreage,
and nutrient inventory appreciation.
The Turf & Specialty Group incurred an operating loss of $1.6 million
in the third quarter this year on $18 million of revenues. Last year, the
group reported an operating loss of $0.4 million and revenues of $20
million for the period. Included in the 2006 earnings was a $0.4 million
gain from the settlement of an insurance claim. Turf products tonnage
continued to be lower in the third quarter due to relatively dry weather
throughout much of the country which curtailed sales of some formulated
products. Through the first nine months of 2007, the group's operating
income was $0.9 million on $85 million of revenues. Last year, its
operating income was $3.1 million for the same period, and revenues were
$93 million.
The Retail Group reported an operating loss of $0.6 million for the
third quarter of 2007; this compares to an operating loss of $0.4 million
in the prior year. Revenues were $42 million for the quarter. Although
total revenues were up from $41 million in the prior year due to the
addition of the Sylvania, Ohio, Food Market, same store sales were down 1.6
percent for the period. The group's nine months to date operating income
this year was $0.8 million on $131 million of revenues. Last year,
operating income through September was $1.3 million, and total revenues
were $128 million. The year to year income differential is caused primarily
by competitive sales pressure in the Toledo area market and the performance
of the new Sylvania Food Market.
"Our Grain and Ethanol and Plant Nutrient Groups are achieving
excellent income growth this year, and the Rail Group is maintaining solid
performance despite some tightening in that industry, which more than
compensates for the softness being experienced in other segments," said
President and Chief Executive Officer Mike Anderson. Mr. Anderson added, "A
few weeks ago it became apparent that the results of our agriculture
related businesses were stronger than we had expected. As a result, we
announced on October 17th that our full-year earnings outlook had improved
to be within a range of $3.15 to $3.35 per diluted share. While there are
still various factors that could impact our full year results such as
supply and demand dynamics in the grain and plant nutrient markets, timing
of railcar sales, and investment results of LTG, we continue to believe
this is the right guidance at this time."
The company will host a webcast on Thursday, November 1, 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 railcar leasing and repair, turf products production, and general
merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now
has operations in eight 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
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended Nine Months ended
September 30 September 30
(in thousands, except for per
share amounts) 2007 2006 2007 2006
Sales and merchandising
revenues $553,708 $335,871 $1,594,425 $994,638
Cost of sales and
merchandising revenues 502,962 284,327 1,423,952 848,056
Gross profit 50,746 51,544 170,473 146,582
Operating, administrative and
general expenses 41,430 40,310 123,527 115,583
Interest expense 4,174 3,818 13,386 12,513
Other income / gains:
Equity in earnings of
affiliates 9,574 (483) 17,229 5,279
Other income, net 2,144 6,352 19,085 11,763
Minority interest in net loss /
(income) of subsidiary 549 - 1,065 -
Income before income taxes 17,409 13,285 70,939 35,528
Income taxes 6,844 4,898 25,647 12,959
Net income $10,565 $8,387 $45,292 $22,569
Per common share:
Basic earnings $0.59 $0.52 $2.54 $1.46
Diluted earnings $0.58 $0.51 $2.48 $1.41
Dividends paid $0.0475 $0.045 $0.1425 $0.1325
Weighted average shares
outstanding-basic 17,878 16,080 17,800 15,467
Weighted average shares
outstanding-diluted 18,311 16,591 18,282 16,021
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2007 2006 2006
Assets
Current assets:
Cash and cash equivalents $22,357 $23,398 $47,773
Restricted cash 3,737 3,801 3,815
Accounts receivable (net) 127,382 87,698 79,552
Margin deposits (net) 28,970 15,273 10,540
Inventories 306,908 296,457 172,056
Commodity derivative assets -
current 108,039 85,338 9,914
Other current assets 44,200 33,325 24,335
Total current assets 641,593 545,290 347,985
Investments and other assets 115,597 72,335 63,973
Commodity derivative assets 29,999 20,862 5,718
Railcar assets leased to others
(net) 143,251 145,059 148,936
Property, plant and equipment
(net) 100,829 95,502 93,065
$1,031,269 $879,048 $659,677
Liabilities and shareholders'
equity
Current liabilities:
Short-term borrowings $163,400 $75,000 $ -
Commodity derivative
liabilities - current 77,617 43,173 12,785
Other current liabilities 244,624 265,040 171,638
Total current liabilities 485,641 383,213 184,423
Deferred items and other
long-term liabilities 45,315 41,267 37,832
Commodity derivative liability 26,285 26,531 9,007
Long-term debt non-recourse 60,107 71,624 77,222
Long-term debt 85,302 86,238 87,076
Minority interest 12,607 - -
Shareholders' equity 316,012 270,175 264,117
$1,031,269 $879,048 $659,677
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Quarter ended September 30, 2007
Revenues from external customers $382,907 $33,890 $76,732 $17,911
Gross Profit 16,294 12,300 6,458 3,753
Other income / Equity in earnings
of affiliates 10,226 243 350 185
Operating income (loss) 13,706 5,792 815 (1,626)
Quarter ended September 30, 2006
Revenues from external customers $208,540 $27,339 $38,580 $20,396
Gross Profit 20,501 11,628 3,623 4,138
Other income / Equity in earnings
of affiliates 4,064 127 348 569
Operating income (loss) 11,950 4,898 (1,868) (420)
Nine months ended September 30,
2007
Revenues from external customers $950,430 $102,251 $326,200 $84,609
Gross Profit 46,968 34,336 35,274 14,991
Other income / Equity in earnings
of affiliates 27,401 765 806 380
Operating income (loss) 35,857 15,702 18,363 880
Nine months ended September 30,
2006
Revenues from external customers $485,928 $89,558 $197,921 $93,329
Gross Profit 37,750 36,389 17,866 16,401
Other income / Equity in earnings
of affiliates 12,068 442 781 1,087
Operating income (loss) 15,653 16,115 1,938 3,073
Segment Data
Retail Other Total
Quarter ended September 30, 2007
Revenues from external customers $42,268 $ - $553,708
Gross Profit 11,941 - 50,746
Other income / Equity in earnings of
affiliates 149 565 11,718
Operating income (loss) (554) (724) 17,409
Quarter ended September 30, 2006
Revenues from external customers $41,016 $ - $335,871
Gross Profit 11,654 - 51,544
Other income / Equity in earnings of
affiliates 265 496 5,869
Operating income (loss) (418) (857) 13,285
Nine months ended September 30, 2007
Revenues from external customers $130,935 $ - $1,594,425
Gross Profit 38,904 - 170,473
Other income / Equity in earnings of
affiliates 467 6,495 36,314
Operating income (loss) 775 (638) 70,939
Nine months ended September 30, 2006
Revenues from external customers $127,902 $ - $994,638
Gross Profit 38,176 - 146,582
Other income / Equity in earnings of
affiliates 697 1,967 17,042
Operating income (loss) 1,296 (2,547) 35,528
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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