Company Reaffirms EPS Guidance of $2.20 to $2.50 For 2005
MAUMEE, Ohio, Nov. 2 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced a net loss of $0.6 million for the third
quarter. In the same three-month period last year, the company reported a net
income of $1.0 million. Earnings per diluted share for the third quarter this
year were a loss of nine cents. In 2004, the company earned fourteen cents per
diluted share during the third quarter. Total revenues were $289 million for
the third quarter this year, 16 percent above its third-quarter 2004 total of
$248 million. For the first nine months of 2005, the company's net income was
$10.8 million, or $1.40 per diluted share, on revenues of $912 million. Last
year, The Andersons earned $10.9 million, or $1.45 per diluted share, in the
first nine months, on revenues of $897 million.
The Agriculture Group incurred an operating loss of $3.3 million in the
third quarter. Last year it reported an operating income of $0.3 million for
the period. Revenues of $206 million for the third quarter this year were $39
million above last year primarily due to increased grain sales volume. Average
grain margins were lower during the quarter, and some grain inventory and
quality adjustments were incurred. The group's plant nutrient business matched
its 2004 results for the third quarter. Nutrient sales volume was down
slightly, and commodity prices were significantly higher than they were in
2004, but margins remained strong, and application acreage growth improved
service revenues. Through the first three quarters of 2005, the Agriculture
Group had operating income of $6.6 million on revenues of $623 million. In the
first nine months of last year, the group had revenues of $617 million and
operating income of $9.7 million. The company is a 44 percent equity investor
in The Andersons Albion Ethanol LLC which began construction of a 55 million
gallon-per-year ethanol production facility during the third quarter. The new
plant will be situated next to The Andersons' Albion, Michigan grain elevator.
The company is also exploring the construction of a 110 million gallon ethanol
plant adjacent to its Clymers, Indiana grain facility and anticipates some
level of outside investment in this project as well. In July, a grain elevator
located in Toledo, Ohio, which The Andersons operates, was severely damaged by
an explosion and fire. Although negatively impacting its current year income,
the company believes that the accident will not have a material impact on the
two-year (2005-06) total once the insurance claim process is completed
sometime next year.
The Rail Group's operating income of $5.8 million in the third quarter
this year was $0.9 million above the $4.9 million it earned in the same three-
month period a year ago. Revenues of $23.2 million for the quarter were $3.8
million higher than the $19.4 generated in the third quarter of 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 third quarter operating
results included income from the sale of some railcars, although this was less
than the income it realized on a larger sale of railcars during the third
quarter of last year. The group's railcar repair shops' revenues and operating
income for the period were down slightly from a year ago, but the steel
fabrication business, including the fluid filtration product lines that the
group acquired during the quarter, contributed to the overall revenue and
income growth. Through nine months, the Rail Group had operating income of
$13.3 million on revenues of $58.6 million and had added more than 3,000
railcars to its fleet, increasing its total to approximately 18,000 railcars.
Last year the group reported September year-to-date revenues of $43.6 million
and operating income of $8.2 million.
The Processing Group's $3.0 million operating loss in the third quarter
was $1.1 million higher than the $1.9 million operating loss it incurred a
year ago. Revenues of $19.2 million for the quarter were $1.6 million below
the $20.8 million it registered in the third quarter of last year. Turf-care
product volumes were lower this year, primarily with industrial accounts, and
cob product gross margins declined due to increased raw material costs. Cob
operating expenses were also higher in the third quarter this year. Through
nine months, the Processing Group had $100.6 million of revenues and an
operating loss of $1.6 million. In the first three quarters of 2004, the group
reported revenues of $106.1 million and operating income of $2.4 million.
Recently, the group announced a restructuring of its turf products business to
focus on the professional market and certain areas of the consumer and
industrial markets.
The Retail Group reported revenues of $40.5 million for the most recent
quarter, a 1.4 percent decrease in same-store sales from the third quarter of
2004. The group's third-quarter operating loss was $0.8 million this year,
$0.6 million wider than last year's result. While sales in food categories
were higher than last year, and their margins remained strong, sales in other
product categories were down. Operating expenses were somewhat higher during
the quarter in part due to increased health-care and other employee benefit
costs. The group's September year-to-date revenues were $130 million this
year, just slightly lower than last year. Operating income for the first nine
months of 2005 was $0.9 million, about $0.3 million below the $1.2 million it
generated in the first three quarters of 2004.
"Our Rail Group and Agriculture's plant nutrient business are achieving
excellent income growth this year," said President and Chief Executive Officer
Mike Anderson. "In spite of the impact of insurance deductibles and business
interruptions in our grain and cob operations this quarter, and severance
costs we incurred in the restructuring of our lawn business, our overall
performance in the third quarter leaves us right on track toward achieving the
$2.20 to $2.50 earnings per share for the year that we've been projecting
throughout the year. More importantly, we're encouraged by our ability to
continue to grow our very profitable Rail business and to expand into the
promising ethanol industry."
The company will host a webcast on Thursday, November 3, 2005 at 11:00
A.M. EST, 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
and plant nutrient sectors of U.S. agriculture, as well as in railcar
marketing, industrial products 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 Nine Months ended
September 30 September 30
(in thousands, except for per
share amounts) 2005 2004 2005 2004
Sales and merchandising revenues $288,708 $248,124 $912,481 $896,970
Cost of sales and merchandising
revenues 252,162 207,384 782,958 764,100
Gross profit 36,546 40,740 129,523 132,870
Operating, administrative and
general expenses 36,654 38,801 109,410 111,680
Interest expense 2,830 2,470 8,971 7,874
Other income, net 1,056 1,251 3,565 3,159
Equity in earnings of affiliates 877 641 1,337 963
Income (loss) before income taxes (1,005) 1,361 16,044 17,438
Income taxes (369) 313 5,293 6,574
Net Income (loss) $(636) $1,048 $10,751 $10,864
Per common share:
Basic earnings (loss) $(0.09) $0.14 $1.45 $1.50
Diluted earnings (loss) $(0.09) $0.14 $1.40 $1.45
Dividends paid $0.085 $0.075 $0.245 $0.225
Weighted average shares
outstanding-basic 7,445 7,240 7,406 7,231
Weighted average shares
outstanding-diluted 7,445 7,473 7,691 7,474
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2005 2004 2004
Assets
Current assets:
Cash and cash equivalents $9,592 $8,439 $8,138
Restricted cash 1,367 1,532 1,730
Accounts receivable (net) and
margin deposits 78,845 66,235 63,520
Inventories 184,247 251,428 204,485
Other current assets 28,537 30,659 21,404
Total current assets 302,588 358,293 299,277
Other assets 33,732 21,437 21,472
Railcar assets leased to others (net) 112,882 101,358 100,259
Property, plant and equipment (net) 92,098 92,510 93,933
$541,300 $573,598 $514,941
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $42,900 $12,100 $10,600
Other current liabilities 174,473 240,447 191,046
Total current liabilities 217,373 252,547 201,646
Deferred items and other long-term
liabilities 33,979 33,029 31,717
Long-term debt non-recourse 59,164 64,343 67,121
Long-term debt 87,128 89,803 88,877
Shareholders' equity 143,656 133,876 125,580
$541,300 $573,598 $514,941
Segment Data
Agriculture Rail Processing Retail Other Total
Quarter ended
September 30, 2005
Revenues from
external customers $205,814 $23,176 $19,227 $40,491 $- $288,708
Gross Profit 10,659 11,232 3,398 11,257 - 36,546
Other income / Equity
in earnings of
affiliates 1,339 (5) 238 140 221 1,933
Operating income
(loss) (3,312) 5,841 (3,047) (827) 340 (1,005)
Quarter ended
September 30, 2004
Revenues from
external customers 166,837 19,385 20,819 41,083 - 248,124
Gross Profit 15,448 9,464 4,162 11,666 - 40,740
Other income / Equity
in earnings of
affiliates 1,114 183 314 131 150 1,892
Operating income
(loss) 269 4,866 (1,859) (232) (1,683) 1,361
Nine months ended
September 30, 2005
Revenues from external
customers 623,384 58,554 100,582 129,961 - 912,481
Gross Profit 49,377 28,336 14,079 37,731 - 129,523
Other income / Equity
in earnings of
affiliates 2,676 536 545 517 628 4,902
Operating income
(loss) 6,553 13,280 (1,558) 918 (3,149) 16,044
Nine months ended
September 30, 2004
Revenues from
external customers 617,135 43,598 106,076 130,161 - 896,970
Gross Profit 56,355 21,398 17,527 37,590 - 132,870
Other income / Equity
in earnings of
affiliates 2,411 336 453 541 381 4,122
Operating income
(loss) 9,680 8,207 2,371 1,157 (3,977) 17,438
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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