Reaffirms Full-Year EPS Guidance of $1.90 - $2.10
MAUMEE, Ohio, Nov. 1 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced third-quarter net income of $8.4 million,
or $0.51 per diluted share, and total revenues of $336 million. In the same
three-month period of 2005, the company reported a net loss of $0.6
million, or $0.04 per diluted share, on $289 million of revenues. For the
first nine months of 2006, the company's net income was $22.6 million, or
$1.41 per diluted share, on revenues of $995 million. In the first nine
months of 2005, The Andersons earned net income of $10.8 million, or $0.70
per diluted share, on revenues of $913 million. The third quarter and nine
months results this year both established new records for the company. All
of the earnings per share data have been adjusted to reflect the June 2006
stock split. During the quarter, the company raised $81.6 million of
additional equity to support its growth initiatives and strengthen its
balance sheet.
The Grain & Ethanol Group's third-quarter operating income of $12.0
million was $14.5 million better than its year-earlier result. Total
revenues of $209 million for the period were $50 million higher than the
third quarter of 2005. Total grain gross profit for the period was also
significantly higher than it had been in the previous year. This included
the sale of a large number of wheat bushels at excellent margins during the
period and appreciation in corn basis values more usually seen in the
fourth quarter. The group's third quarter operating income also included
the settlement of the 2005 portion of the business interruption insurance
claim related to an elevator in Toledo which had been damaged by an
explosion and fire in the third quarter of 2005. Now that the elevator has
re-opened and is receiving grain, the company is actively working on the
2006 portion of the business interruption claim. Because of the degree of
volatility in recent wheat and ethanol markets, the group's investment in
its commodity trading affiliate, Lansing Trade Group, LLC, incurred a loss
during the most recent three-month period, although its income remains at a
record level through nine months. Construction of an ethanol plant in
Albion, Michigan, in which The Andersons, Inc. is a significant investor,
was completed during the third quarter, and the plant began to produce and
ship ethanol and distillers dried grain. Construction of another ethanol
plant, located in Clymers, Indiana, is underway and scheduled to start
production by the end of the first quarter of 2007. Through the first nine
months of 2006, the Grain & Ethanol Group achieved operating income of
$15.7 million. In the same period last year, the group incurred an
operating loss of $2.1 million.
The Rail Group's operating income of $4.9 million in the third quarter
of 2006 was $0.9 million below its third quarter 2005 results. Revenues of
$27 million for the quarter were $4 million higher than the prior period.
Railcar lease rates and the utilization rate of the group's railcar fleet
remained strong during the third quarter of 2006, but fleet maintenance
costs were higher. Operating income during the period from the group's
railcar repair and manufacturing businesses was higher than the third
quarter of 2005. Through the first nine months of 2006, the group achieved
revenues of $90 million and $16.1 million of operating income. Last year,
it reported revenues of $59 million and operating income of $13.3 million
for the same nine month period.
The Plant Nutrient Group incurred an operating loss of $1.9 million on
$39 million of revenues in the third quarter this year. It lost $0.8
million on $47 million of revenues during the same three-month period of
2005. Because energy and nutrient input costs through the third quarter
have been significantly higher this year, the company believes that farmers
reduced the amount of nutrients applied to their fields this season. This
resulted in reduced wholesale and retail demand for plant nutrients and a
deferral of pre- fall season purchasing. With volume down, the group's
third-quarter gross profit declined from last year. Through the first nine
months of 2006, the group's operating income was $1.9 million on $198
million of revenues. In the same period last year, operating income
amounted to $8.7 million on $211 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 loss
amounted to $0.4 million on $20 million of revenues. In 2005, it incurred
an operating loss of $3.0 million in the third quarter on $19 million of
revenues. The group's lawn and cob products businesses both contributed to
this improvement. Also included in this year's third quarter income was the
settlement of an insurance claim regarding a storage tank that was damaged
last year. Through the first nine months of this year, the group has
reported operating income of $3.1 million and revenues of $93 million. In
the first nine months of 2005, the group had revenues of $101 million and
an operating loss of $1.6 million. The improved third quarter and
year-to-date results were primarily due to restructuring actions and other
charges incurred in the third quarter of 2005.
The Retail Group reported revenues of $41 million for the third quarter
of 2006, an increase of 1.3 percent in same-store sales from the same
period in 2005. With higher gross margins and total gross profit, the
group's operating loss was $0.4 million for the quarter, about $0.4 million
better than the same period last year. For the first nine months of the
year, the group generated revenues of $128 million and operating income of
$1.3 million. In the first nine months of 2005, it reported operating
income of $0.9 million and revenues of $130 million.
According to President and Chief Executive Officer Mike Anderson,
"We've frequently noted that it's not unusual for some of our units to
experience volatility in quarterly income over and above normal seasonal
patterns. This has often been true in our commodity-based grain and plant
nutrient businesses, and to some degree in our rail business, given the
unpredictable timing of opportunistic railcar sales. With our strong
third-quarter income this year, one might conclude that our prospects for
the full year had noticeably improved. There are several variables which
could still swing either way. Supply and demand dynamics in the grain
markets, including rainfalls that have delayed the fall harvest, will
impact fourth quarter income. Accordingly, I believe that our
previously-announced guidance of $1.90 to $2.10 for our 2006 full-year
earnings per diluted share is still a reasonable expectation. There are
also some non-recurring items which, if they were to occur prior to
year-end, could raise this guidance range. These include the 2006 portion
of our elevator business interruption claim and additional ethanol
development activities."
The company will host a webcast on Thursday, November 2, 2006 at 11:00
A.M. ET, to discuss its third-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, 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
FINANCIAL TABLES FOLLOW . . .
The Andersons, Inc.
Consolidated Statements of Income
Three Months ended Nine Months ended
September 30 September 30
(in thousands, except for per
share amounts) 2006 2005 2006 2005
Sales and merchandising revenues $335,871 $288,755 $994,638 $912,528
Cost of sales and merchandising
revenues 284,327 252,162 848,056 782,958
Gross profit 51,544 36,593 146,582 129,570
Operating, administrative and
general expenses 40,310 36,654 115,583 109,410
Interest expense 3,818 2,830 12,513 8,971
Other income, net 6,352 1,009 11,763 3,518
Equity in earnings of affiliates (483) 877 5,279 1,337
Income (loss) before income taxes 13,285 (1,005) 35,528 16,044
Income tax provision 4,898 (369) 12,959 5,293
Net income (loss) $8,387 $(636) $22,569 $10,751
Per common share:
Basic earnings $0.52 $(0.04) $1.46 $0.73
Diluted earnings $0.51 $(0.04) $1.41 $0.70
Dividends paid $0.045 $0.0425 $0.1325 $0.1225
Weighted average shares
outstanding-basic 16,080 14,890 15,467 14,812
Weighted average shares
outstanding-diluted 16,591 14,890 16,021 15,382
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2006 2005 2005
Assets
Current assets:
Cash and cash equivalents $47,773 $13,876 $9,592
Restricted cash 3,815 3,936 1,367
Accounts receivable (net) and
margin deposits 92,867 83,291 78,845
Inventories 163,121 240,806 184,247
Other current assets 24,335 30,632 28,537
Total current assets 331,911 372,541 302,588
Investments and other assets 63,973 39,008 33,732
Railcar assets leased to others (net) 148,936 131,097 112,882
Property, plant and equipment (net) 93,065 91,498 92,098
$637,885 $634,144 $541,300
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $ - $12,400 $42,900
Other current liabilities 171,638 263,922 178,583
Total current liabilities 171,638 276,322 221,483
Deferred items and other long-term
liabilities 37,832 30,896 29,869
Long-term debt non-recourse 77,222 88,714 59,164
Long-term debt 87,076 79,329 87,128
Shareholders' equity 264,117 158,883 143,656
$637,885 $634,144 $541,300
Segment Data
Grain & Plant Turf &
Ethanol Nutrient Rail Specialty
Quarter ended September 30, 2006
Revenues from external customers $208,540 $38,580 $27,339 $20,396
Gross Profit 20,501 3,623 11,628 4,138
Other income / Equity in earnings of
affiliates 4,064 348 127 569
Operating income (loss) 11,950 (1,868) 4,898 (420)
Quarter ended September 30, 2005
Revenues from external customers 158,875 46,986 23,176 19,227
Gross Profit 6,263 4,443 11,232 3,398
Other income / Equity in earnings of
affiliates 908 384 (5) 238
Operating income (loss) (2,504) (808) 5,841 (3,047)
Nine months ended September 30, 2006
Revenues from external customers 485,928 197,921 89,558 93,329
Gross Profit 37,750 17,866 36,389 16,401
Other income / Equity in earnings of
affiliates 12,068 781 442 1,087
Operating income (loss) 15,653 1,938 16,115 3,073
Nine months ended September 30, 2005
Revenues from external customers 412,460 210,971 58,554 100,582
Gross Profit 23,801 25,623 28,336 14,079
Other income / Equity in earnings of
affiliates 1,733 896 536 545
Operating income (loss) (2,147) 8,700 13,280 (1,558)
Segment Data
Retail Other Total
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
Quarter ended September 30, 2005
Revenues from external customers 40,491 - 288,755
Gross Profit 11,257 - 36,593
Other income / Equity in earnings of
affiliates 140 221 1,886
Operating income (loss) (827) 340 (1,005)
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
Nine months ended September 30, 2005
Revenues from external customers 129,961 - 912,528
Gross Profit 37,731 - 129,570
Other income / Equity in earnings of
affiliates 517 628 4,855
Operating income (loss) 918 (3,149) 16,044
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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