MAUMEE, Ohio, Aug. 5 /PRNewswire-FirstCall/ -- The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $15.9 million, or $0.87 per diluted share, on revenues of $811 million. In the same three month period of 2008, the company reported record results of $45.6 million, or $2.48 per diluted share, on $1.1 billion of revenues. For the first six months of 2009, the company earned $20.9 million, or $1.14 per diluted share, on revenues of $1.5 billion. In the first half of 2008, The Andersons reported record results of $53.4 million, or $2.90 per diluted share, on revenues of $1.8 billion. It should be noted that the earnings from the prior year included unprecedented margins in our Plant Nutrient Group that accounted for nearly two-thirds of the income.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081104/CLTU081LOGO )
The Grain & Ethanol Group's operating income of $8.9 million in the second quarter was significantly less than its year earlier result of $20.0 million. The grain business had its third best second quarter as it benefited from good space income. The ethanol business was profitable during the second quarter of 2009. When compared to the prior year; however, income from the ethanol business was down considerably in the second quarter as last year the business benefited from margins being locked in before the ethanol industry decline. Second quarter 2009 income from the group's investment in Lansing Trade Group was also significantly lower than last year, primarily due to declines in its trading business. Total second quarter revenues for the group were $500 million; this includes $188 million of grain and ethanol sales made by the group in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the second quarter of 2008, the group's total revenues were $696 million and included $226 million of the aforementioned sales. While revenues for the group are lower, due to substantially lower commodity prices, such amounts do not serve as good predictors of income or economic performance in a commodity-based business. The Grain & Ethanol Group's operating income through the first six months was $14.7 million in 2009 and $22.2 million in 2008. Total revenues through June 2009 and 2008 were $1.0 billion and $1.2 billion, respectively.
The Rail Group's operating income was $0.6 million in the second quarter of 2009, which is down significantly from the $4.9 million earned during the same three month period a year ago. The group continues to be impacted by the double digit declines in rail traffic. The group recognized $0.8 million in gross margin from the sale of railcars and related leases during the quarter, whereas last year $1.1 million was recognized. Gross profit from the leasing business was significantly less due to lower utilization rates, the corresponding increase in storage expense from idle assets, increased maintenance expense per car, and decreased leasing rates. The group now has approximately 23,800 cars and locomotives. The average utilization rate (the percentage of the fleet in service) for the quarter was 80.6 percent in comparison to 93.3 percent for the same period last year. The gross profit of both the railcar repair and manufacturing businesses declined considerably this quarter due to reduced activity resulting from the overall economic decline. Revenues of $24 million for the second quarter were down significantly from the $43 million reported in 2008, due mainly to a $14 million reduction in car sales. The group's first half operating income this year was $1.5 million on $51 million of revenues. In 2008, operating income through June was $11.3 million and revenues were $78 million. These results included gains on sales of railcars and related leases of $1.1 million and $3.3 million, respectively.
The Plant Nutrient Group had an operating income of $10.3 million during the second quarter of 2009, on revenues of $198 million. In the same three month period of 2008, the group achieved record operating income of $47.4 million, on revenues of $274 million. Margins were down significantly from the prior year. Margins were significantly lower as basic nutrient prices deflated in 2009, whereas in 2008 margins greatly increased as nutrient prices inflated. Retailers reducing their nutrient inventory holdings, and lower application rates of basic nutrients (potash, potassium and to a lesser degree nitrogen), led to reduced sales volume this quarter. The group's first half operating income this year was $12.4 million on $309 million of revenues. Last year, its operating income through the first six months was a record $54.9 million on revenues of $379 million. The group acquired Hartung Brothers Inc.'s Fertilizer Division (HBI) on August 1st. HBI is a regional wholesale supplier of liquid fertilizers with five locations in Wisconsin and one in southeastern Minnesota. This acquisition will allow the group to expand its value added product offering, grow its wholesale customer base, and broaden its geographic territory.
The Turf & Specialty Group had a record operating income of $3.0 million in the second quarter this year on $40 million of revenues. Last year, the group reported $1.9 million of income on $36 million of revenues for the period. Turf products tonnage increased by over 20 percent year to year, but gross profit per ton decreased due to a product mix that included a higher percentage of consumer and industrial products. Through the first half of 2009, the group's operating income was a record $6.1 million on $84 million of revenues. Last year, its operating income was $3.9 million for the same period, and revenues were $76 million. The group continues to experience positive results from its focus on proprietary products and expanded product lines.
The Retail Group reported revenues of $49 million for the second quarter of 2009, which is below the $53 million in revenues reported for the same period in 2008. The group earned operating income of $2.9 million in the second quarter of 2009. In the comparable period last year, the group's operating income was $3.4 million. Through six months, the group earned $0.2 million and total revenues were $83 million. Last year through June the group broke even on total revenues of $86 million. Both the group's margins and customer counts have improved slightly; however, this was offset by a decline in the average sale per customer.
"Although we would have liked better results this quarter, it is important to remember that last year's second quarter results included unprecedented margins in our Plant Nutrient Group. We are pleased with the results of our grain and ethanol businesses. The grain business performance was strong, and our ethanol business returned to profitability, which is an accomplishment in the current ethanol environment. Conversely, we continue to be disappointed with the Lansing Trade Group results this year. The Plant Nutrient Group has returned to solid financial performance, and we believe the lower of cost or market issues are behind us. The Turf & Specialty Group set an earnings record as the value added and proprietary product strategy being pursued continues to be successful. Our Rail Group, and to a lesser extent our Retail Group, however, continue to be impacted by the overall economic decline," said Chairman and Chief Executive Officer Mike Anderson. "These results continue to demonstrate that our purposeful diversification allows us to remain a strong and profitable company, even when some businesses are underperforming."
The company will host a webcast on Thursday, August 6, 2009 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading "Investor" on its website at 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 14 U.S. states and Puerto Rico, 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 www.andersonsinc.com
FINANCIAL TABLES FOLLOW . . .
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended Six Months ended
June 30 June 30
(in thousands, except
for per share amounts) 2009 2008 2009 2008
---- ---- ---- ----
Sales and
merchandising
revenues $810,954 $1,100,700 $1,508,346 $1,813,701
Cost of sales and
merchandising
revenues 737,620 980,363 1,373,638 1,641,123
------- ------- --------- ---------
Gross profit 73,334 120,337 134,708 172,578
Operating,
administrative and
general expenses 46,723 49,973 93,253 91,264
Interest expense 5,161 8,521 10,851 17,643
Other income (loss):
Equity in earnings
(loss) of affiliates 784 7,781 (2,890) 16,420
Other income, net 2,724 2,155 3,963 5,039
----- ----- ----- -----
Income before income taxes 24,958 71,779 31,677 85,130
Income taxes 9,312 26,835 12,118 31,428
----- ------ ------ ------
Net income 15,646 44,944 19,559 53,702
Net (income) loss attributable
to the noncontrolling interest 272 682 1,311 (253)
--- --- ----- ----
Net income attributable
to The Andersons, Inc. $15,918 $45,626 $20,870 $53,449
======= ======= ======= =======
Per common share:
Basic earnings $0.87 $2.52 $1.15 $2.95
===== ===== ===== =====
Diluted earnings $0.87 $2.48 $1.14 $2.90
===== ===== ===== =====
Dividends paid $0.0875 $0.0775 $0.1725 $0.0155
======= ======= ======= =======
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
June 30 December 31 June 30
(in thousands) 2009 2008 2008
---- ---- ----
Assets
Current assets:
Cash and cash equivalents $179,752 $81,682 $33,379
Restricted cash 4,243 3,927 3,664
Accounts receivable, net 130,824 126,255 187,184
Margin deposits, net 38,009 13,094 79,017
Inventories 205,084 436,920 406,839
Commodity derivative
assets - current 48,635 84,919 493,571
Other current assets 40,564 109,165 47,489
------ ------- ------
Total current assets 647,111 855,962 1,251,143
Investments and
other assets 153,281 153,488 156,005
Commodity derivative assets 1,354 3,662 84,297
Railcar assets leased
to others (net) 176,656 174,132 152,879
Property, plant and
equipment (net) 120,535 121,529 110,146
------- ------- -------
$1,098,937 $1,308,773 $1,754,470
========== ========== ==========
Liabilities and
shareholders' equity
Current liabilities:
Short-term line of credit $- $- $432,500
Commodity derivative
liabilities - current 66,698 67,055 160,611
Other current liabilities 243,056 458,208 350,795
------- ------- -------
Total current liabilities 309,754 525,263 943,906
Deferred items and other
long-term liabilities 85,772 80,687 53,058
Commodity
derivative
liabilities 4,555 3,706 19,923
Long-term debt non-recourse 28,938 40,055 47,934
Long-term debt 285,619 293,955 281,496
Shareholders' equity 384,299 365,107 408,153
------- ------- -------
$1,098,937 $1,308,773 $1,754,470
========== ========== ==========
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty Retail Other Total
------- ---- -------- --------- ------ ----- -----
Quarter ended
June 30, 2009
Revenues from
external
customers $500,401 $23,762 $197,638 $39,752 $49,401 $- $810,954
Gross Profit 23,325 4,815 22,106 7,614 15,474 - 73,334
Equity in
earnings
(loss) of
affiliates 781 - 3 - - - 784
Other income
(loss), net 590 221 770 236 136 771 2,724
Income before
income taxes 8,659 619 10,345 3,042 2,864 (571) 24,958
(Income) loss
attributable
to the
noncontrolling
interest 272 - - - - - 272
Operating income
(loss) (a) 8,931 619 10,345 3,042 2,864 (571) 25,230
Quarter ended
June 30, 2008
Revenues from
external
customers $695,787 $42,941 $273,501 $35,915 $52,556 $- $1,100,700
Gross Profit 29,195 9,100 58,396 7,266 16,380 - 120,337
Equity in
earnings of
affiliates 7,780 - 1 - - - 7,781
Other income
(loss), net 1,221 340 181 96 161 156 2,155
Income before
income taxes 19,312 4,874 47,369 1,882 3,360 (5,018) 71,779
(Income) loss
attributable
to the
noncontrolling
interest 682 - - - - - 682
Operating income
(loss) (a) 19,994 4,874 47,369 1,882 3,360 (5,018) 72,461
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty Retail Other Total
------- ---- -------- --------- ------ ----- -----
Six months
ended June 30,
2009
Revenues from
external
customers $980,922 $50,532 $309,400 $84,455 $83,037 $- $1,508,346
Gross Profit 46,624 10,546 36,628 16,033 24,877 - 134,708
Equity in
Earnings (loss)
of affiliates (2,895) - 5 - - - (2,890)
Other income
(loss), net 1,149 187 1,258 541 247 581 3,963
Income before
income taxes 13,355 1,501 12,392 6,139 163 (1,873) 31,677
(Income) loss
attributable
to the
noncontrolling
interest 1,311 1,311
Operating
income (loss) 14,666 1,501 12,392 6,139 163 (1,873) 32,988
Six months ended
June 30, 2008
Revenues from
external
customers $1,194,910 $77,952 $378,970 $75,576 $86,293 $- $1,813,701
Gross Profit 40,574 20,251 72,074 14,192 25,487 - 172,578
Equity in
earnings
(loss) of
affiliates 16,417 - 3 - - - 16,420
Other income
(loss), net 3,758 518 324 189 308 (58) 5,039
Income before
income taxes 22,480 11,300 54,909 3,882 (17) (7,424) 85,130
(Income) loss
attributable
to the
noncontrolling
interest (253) (253)
Operating
income (loss) 22,227 11,300 54,909 3,882 (17) (7,424) 84,877
(a) Operating income (loss) for each Group is defined as net sales and
merchandising revenues plus identifiable other income less all
identifiable operating expenses, including interest expense for carrying
working capital and long-term assets and is reported net of the
noncontrolling interest share of (income) loss.
