MAUMEE, Ohio, Nov. 4 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced third quarter net income of $12.8 million, or
$0.70 per diluted share, on revenues of $906 million. In the same three month
period in 2007, the company reported net income of $10.6 million, or $0.58 per
diluted share, on $554 million of revenues. For the first nine months of
2008, the company's net income was $66.3 million, or $3.60 per diluted share,
on revenues of $2.7 billion. In the first nine months of 2007, The Andersons
earned $45.3 million, or $2.48 per diluted share, on revenues of $1.6 billion.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081104/CLTU081LOGO )
The Grain & Ethanol Group's operating income was $9.4 million in the third
quarter, which was below its year earlier result of $13.7 million. The grain
business benefited from significantly improved basis income, with the company
recovering most of the basis losses incurred earlier in the year. Income from
the ethanol business declined $8.8 million during the most recent quarter to a
loss of $2.0 million due primarily to the combined performance of the
company's investments in three ethanol limited liability companies. Third
quarter income from the group's investment in Lansing Trade Group was $2.6
million, which is $1.0 million lower than last year. Total third quarter
revenues for the group were $651 million; this compares to total revenues of
$383 million for the same period last year. While revenues for the group are
higher, such amounts do not serve as good predictors of income or economic
performance in a commodity based business. During the quarter, the group
purchased a grain storage facility, and leased two others. This increased the
company's storage capacity by 7.6 million bushels. The Grain & Ethanol
Group's operating income through the first nine months was $31.7 million in
2008. In 2007, operating income through September was $35.9 million. Total
revenues through September 2008 and 2007 were $1.8 billion and $950 million,
respectively.
The Rail Group's operating income was $5.2 million in the third quarter on
revenues of $28 million. Last year, the group reported $5.8 million of income
and $34 million of revenues for the same three month period. The group
recognized $0.7 million in gross margin from the sale of railcars and related
leases during the quarter, which is $2.1 million less than similar sales for
the same period last year. Gross profit from the leasing business was higher
due to wider relet spreads, a higher utilization rate, and growth in the size
of the fleet. The fleet has increased 6 percent to 24,007 cars and
locomotives. The average utilization rate (the percentage of the fleet in
service) for the quarter was 93.2 percent in comparison to 92.5 percent for
the same period last year. The gross profit of the railcar repair and
manufacturing businesses also grew during the third quarter. The group's
first nine months operating income this year was $16.5 million on $106 million
of revenues. In 2007, operating income through September was $15.7 million
and revenues were $102 million. Included in these results were gains on sales
of railcars and related leases of $4.0 million and $7.9 million, for 2008 and
2007, respectively. A seventh railcar repair shop was opened in Ogden, Utah
in September, and the group continues to explore additional railcar repair
shop opportunities.
The Plant Nutrient Group had a record operating income of $7.2 million
during the third quarter of 2008 on revenues of $162 million. The group
reported an $0.8 million operating profit on $77 million of revenues in the
third quarter of 2007. The current quarter earnings were impacted both
positively and negatively by fluctuating fertilizer prices. During the
quarter significant margin increases were recognized on sales made due to the
inventory appreciation that occurred as a result of rising prices. Certain
inventory values, however, declined sharply late in the third quarter and into
the fourth quarter resulting in $13.1 million in adjustments due to adverse
purchase commitments and lower of cost or market adjustments. Sales volume
during the quarter was slightly above the prior year. The group's operating
income through September this year was $62.1 million on $541 million of
revenues. Last year, its operating income through the first nine months was
$18.4 million on revenues of $326 million.
The Turf & Specialty Group had an operating loss of $0.5 million in the
third quarter this year on $23 million of revenues. Last year, the group
reported a loss of $1.6 million on $18 million of revenues. Turf products
tonnage increased slightly from year to year, and gross profit per ton
increased considerably, due to a larger percentage of sales coming from
proprietary products such as Contec DG. The group continues to see
proprietary products as a growth area. Through the first nine months of 2008,
the group's operating income was $3.4 million on $99 million of revenues.
Last year, its operating income was $0.9 million for the same period, and
revenues were $85 million.
The Retail Group reported revenues of $41 million for the third quarter of
2008, which is slightly below the $42 million in revenues reported for the
same period in 2007. This sales decline is due to the overall decline in
consumer spending. For the three month period, the group's operating loss was
$0.2 million, which is an improvement over the $0.6 million operating loss in
the prior year. Through nine months the group has lost $0.2 million on $127
million of revenues. Last year, the operating income through September was
$0.8 million and total revenues were $131 million. Margins improved during
the third quarter, which has led to year to date margins being consistent with
the prior year.
Total company interest expense for the quarter and year to date are $3.3
million and $11.8 million higher than the prior year, respectively.
"Our third quarter and nine month results are both records, however, we
were disappointed by the sudden turn of events in the fertilizer markets,"
said President and Chief Executive Officer Mike Anderson. "The Plant Nutrient
Group contributed significantly to our income during the period, however, our
expectations for the group were even higher before the recent sharp decline in
global fertilizer prices that led to material inventory adjustment."
"Our current guidance is $3.50 - $4.00 per diluted share," Mr. Anderson
continued. "As we noted in the second quarter press release our former
guidance was heavily influenced by the reported and expected performance of
our Plant Nutrient Group. This is again true of our current guidance, which
is primarily attributed to the aforementioned decline in global fertilizer
prices. The current guidance is also partially attributable to the economics
in the ethanol industry. Numerous other factors will also have a bearing on
the full year outcome, such as; grain prices, timing of railcar sales, and the
performance of our equity investments, which include Lansing Trade Group and
the ethanol production facilities."
The company will host a webcast on Wednesday, November 5, 2008 at 11:00
A.M. ET, to discuss its performance and full year outlook. 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 12 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 Nine Months ended
September 30 September 30
(in thousands, except for per
share amounts) 2008 2007 2008 2007
Sales and merchandising
revenues $905,712 $553,708 $2,719,413 $1,594,425
Cost of sales and
merchandising revenues 832,687 504,894 2,473,810 1,429,390
Gross profit 73,025 48,814 245,603 165,035
Operating, administrative and
general expenses 48,239 39,040 136,934 116,987
Allowance for doubtful
accounts receivable 333 458 2,902 1,102
Interest expense 7,497 4,174 25,140 13,386
Other income / gains:
Equity in earnings of
affiliates (619) 9,518 15,801 17,173
Other income, net 1,279 2,200 6,318 19,141
Minority interest in net
(income) loss of subsidiary 1,841 549 1,588 1,065
Income before income taxes 19,457 17,409 104,334 70,939
Income taxes 6,617 6,844 38,045 25,647
Net income $12,840 $10,565 $66,289 $45,292
Per common share:
Basic earnings $0.71 $0.59 $3.67 $2.54
Diluted earnings $0.70 $0.58 $3.60 $2.48
Dividends paid $0.0850 $0.0475 $0.2400 $0.1425
Weighted average shares
outstanding-basic 18,085 17,878 18,059 17,800
Weighted average shares
outstanding-diluted 18,380 18,311 18,409 18,282
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2008 2007 2007
Assets
Current assets:
Cash and cash equivalents $28,541 $22,300 $22,357
Restricted cash 3,630 3,726 3,737
Accounts receivable, net 184,566 106,257 127,382
Margin deposits, net 58,077 20,467 28,970
Inventories 382,268 502,904 306,908
Commodity derivative assets -
current 113,427 205,956 108,039
Other current assets 71,769 43,281 44,200
Total current assets 842,278 904,891 641,593
Investments and other assets 169,800 137,518 115,597
Commodity derivative assets 19,010 29,458 29,999
Railcar assets leased to others (net) 175,947 153,235 143,251
Property, plant and equipment (net) 118,288 99,886 100,829
$1,325,323 $1,324,988 $1,031,269
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $43,600 $245,500 $163,400
Commodity derivative liabilities -
current 80,874 122,488 77,617
Other current liabilities 370,430 359,224 244,624
Total current liabilities 494,904 727,212 485,641
Deferred items and other long-term
liabilities 65,007 49,631 45,315
Commodity derivative liabilities 6,825 2,090 26,285
Long-term debt non-recourse 43,964 56,277 60,107
Long-term debt 295,207 133,195 85,302
Minority interest 10,936 12,219 12,607
Shareholders' equity 408,480 344,364 316,012
$1,325,323 $1,324,988 $1,031,269
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Quarter ended September 30, 2008
Revenues from external customers $651,045 $28,394 $162,018 $23,164
Gross Profit 25,021 9,009 21,731 5,176
Other income / Equity in earnings
of affiliates 392 84 405 76
Operating income (loss) 9,443 5,164 7,223 (497)
Quarter ended
September 30, 2007
Revenues from external customers $382,907 $33,890 $76,732 $17,911
Gross Profit 16,294 10,367 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)
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Nine months ended
September 30, 2008
Revenues from external customers $1,845,955 $106,346 $540,988 $98,740
Gross Profit 65,595 29,260 93,805 19,368
Other income / Equity in earnings
of affiliates 20,567 602 732 265
Operating income (loss) 31,670 16,464 62,132 3,385
Nine months ended
September 30, 2007
Revenues from external customers $950,430 $102,251 $326,200 $84,609
Gross Profit 46,968 28,897 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
Segment Data
Retail Other Total
Quarter ended
September 30, 2008
Revenues from external customers $41,091 $- $905,712
Gross Profit 12,088 - 73,025
Other income / Equity in earnings of
affiliates 125 (422) 660
Operating income (loss) (155) (1,721) 19,457
Quarter ended
September 30, 2007
Revenues from external customers $42,268 $- $553,708
Gross Profit 11,942 - 48,814
Other income / Equity in earnings of
affiliates 149 565 11,718
Operating income (loss) (554) (724) 17,409
Retail Other Total
Nine months ended
September 30, 2008
Revenues from external customers $127,384 $- $2,719,413
Gross Profit 37,575 - 245,603
Other income / Equity in earnings of
affiliates 433 (480) 22,119
Operating income (loss) (172) (9,145) 104,334
Nine months ended
September 30, 2007
Revenues from external customers $130,935 $- $1,594,425
Gross Profit 38,905 - 165,035
Other income / Equity in earnings of
affiliates 467 6,495 36,314
Operating income (loss) 775 (638) 70,939
