Grain & Ethanol Business Leads Income Growth
MAUMEE, Ohio, May 2 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced first-quarter revenues of $409 million and net
income of $9.2 million, or $0.51 per diluted share. In the same three-month
period of 2006, the company reported net income of $3.8 million, or $0.25 per
diluted share, on $281 million of revenues.
The Grain & Ethanol Group achieved operating income of $10.2 million in
the most recent quarter, more than five times the $1.8 million it earned in
the first quarter of 2006. Total revenues were $247 million for the period.
This included more than $30 million of ethanol sales made by the group in
accordance with a marketing agreement between the company and its new Albion
ethanol joint venture. In the first quarter of 2006, the group's total
revenues were $129 million. The group's grain business sold more bushels than
during last year's first quarter, and average grain prices were more than 40
percent above year-earlier levels. The business also benefited from two other
items, improved income from its grain storage, and fee income for originating
corn for the ethanol companies in which it is a significant investor. The
group's ethanol business also achieved income growth during the most recent
quarter. The Albion, Michigan plant was still under construction through the
first two-thirds of 2006, but is in full operation this year. In the first
quarter of 2007, the group also realized $5.4 million of income from non-
recurring development fees associated with the new ethanol plants. Last year,
the group received $1.9 million of ethanol development fees in the first
quarter. Another new plant in which the group is a significant investor, this
one located in Clymers, Indiana, is commencing ethanol production this week.
First quarter income from the group's investment in the Lansing Trade Group
LLC was lower this year.
The Rail Group's operating income of $3.0 million in the first quarter of
2007 was down $3.2 million from the same three-month period a year ago.
Revenues of $26 million for the quarter were $8 million lower. Although the
group sold some railcars during the quarter, its total fleet at the end of
March had increased by more than 1,800 railcars over the past twelve months,
but the utilization rate (the percentage of the fleet in service at the end of
the period) had decreased 2 percent to 93 percent at the end of March this
year. Overall U.S. rail traffic has declined by nearly 5 percent compared to
the first quarter of 2006, and demand for most car types has softened. Since
fewer railcars were sold in the first quarter of 2007 than had been sold in
the comparable period last year, and maintenance costs on the group's fleet
were higher, total revenues and operating income in the railcar leasing
business were down. A slowdown in the group's manufacturing business and in
its railcar repair business following completion of the post-Katrina surge of
railcars requiring refurbishment also contributed to the decline in the
group's operating income.
The Plant Nutrient Group achieved operating income of $0.4 million in the
first quarter of 2007 on $67 million of revenues. In this highly seasonal
industry, the first quarter is typically a loss period. Last year the group
incurred an operating loss of $1.2 million during the quarter on revenues of
$46 million. The revenue increase and improved bottom line was due to higher
prices for the group's products, slightly better margins, and increased
tonnage sold as dealers stocked up in anticipation of a large increase in U.S.
corn acres this season and anticipated tightness in nutrient supplies during
planting.
The Turf & Specialty Group achieved operating income of $1.8 million on
$36 million of revenues during the first quarter this year. Last year, it
reported $2.1 million of income and $40 million of revenues for the period.
Turf products tonnage was lower in the first quarter due to heavy buying by
distributors late last year and wintry weather in March this year. In spite of
record high raw material prices this year, average gross margins in the lawn
business were higher as a result of the introduction of several new value-
added products. The group's cob products business experienced increased raw
material costs in the first quarter this year due to tight raw material
supplies.
The Retail Group reported revenues of $33.8 million for the first quarter
of 2007, an increase of 5.2 percent in same-store sales from the same period
in 2006, in part due to continued growth in food and wine categories and
strong sales of cold-weather goods with the late winter conditions this year.
For the three month period, the Retail Group incurred an operating loss of
$2.3 million this year, slightly improved from the $2.4 million loss incurred
in the first quarter of 2006. Last week the group opened a food-only store in
Sylvania, Ohio, a suburb of Toledo. The new 31,000 square foot store, known as
The Andersons Market, features an expanded line of basic groceries plus all of
the deli, bakery, produce, fresh and frozen meats, specialty foods, wines and
related products that are offered in the group's much larger stores.
"We feel good about our overall performance so far this year. While Rail
is being impacted by some industry-wide softness, and part of our earnings
were from non-recurring items, the Grain & Ethanol, Plant Nutrient, and Retail
businesses all contributed to our income growth during the period," said
President and Chief Executive Officer Mike Anderson. "Our new Andersons Market
has just opened and is being favorably received by area shoppers, the Clymers
plant is starting to produce ethanol this week, and the huge increase in corn
plantings this spring should benefit our grain, ethanol and plant nutrient
businesses. All considered, I'm optimistic about our company's future."
Mr. Anderson also stated "Looking at our 2007 earnings prospects, numerous
factors will have a bearing on the full-year outcome: weather patterns during
the important agricultural planting and growing season within our region, the
number of acres switched to corn from other crops, nutrient and energy
commodity prices, railcar values and lease rates, retail and professional
demand for lawn and garden products, and a successful launch of the ethanol
plant in Clymers, Indiana. Given all of these variables and the picture we see
before us today, we anticipate that our full-year 2007 earnings will be within
a range from $2.35 to $2.60 per diluted share."
The company will host a webcast on Thursday, May 3, 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 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 rail
leasing, industrial products formulation, 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 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
March 31
(in thousands, except for per share amounts) 2007 2006
Sales and merchandising revenues $409,144 $280,658
Cost of sales and merchandising
revenues 363,123 240,387
Gross profit 46,021 40,271
Operating, administrative and general
expenses 39,620 36,692
Interest expense 5,022 4,194
Minority interests 83 -
Other income, net 9,873 3,059
Equity in earnings of affiliates 2,832 3,553
Income before income taxes 14,167 5,997
Income taxes 4,928 2,162
Net income $9,239 $3,835
Per common share:
Basic earnings $0.52 $0.25
Diluted earnings $0.51 $0.25
Dividends paid $0.0475 $0.0450
Weighted average shares outstanding-
basic 17,729 15,090
Weighted average shares outstanding-
diluted 18,242 15,638
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
March 31 December 31 March 31
(in thousands) 2007 2006 2006
Assets
Current assets:
Cash and cash equivalents $27,449 $23,398 $15,821
Restricted cash 3,774 3,801 3,856
Accounts receivable (net) and
margin deposits 166,916 136,819 100,063
Inventories 328,712 299,105 262,198
Other current assets 48,537 33,325 32,289
Total current assets 575,388 496,448 414,227
Investments and other assets 97,889 72,335 63,506
Railcar assets leased to others (net) 133,980 145,059 131,991
Property, plant and equipment (net) 96,552 95,502 90,943
$903,809 $809,344 $700,667
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings $176,000 $75,000 $132,100
Other current liabilities 243,288 265,040 209,815
Total current liabilities 419,288 340,040 341,915
Deferred items and other long-term
liabilities 39,027 41,267 31,693
Long-term debt non-recourse 67,973 71,624 86,269
Long-term debt 85,848 86,238 77,217
Minority interest 12,837 - -
Shareholders' equity 278,836 270,175 163,573
$903,809 $809,344 $700,667
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
Quarter ended March 31, 2007
Revenues from external customers $246,584 $25,916 $66,560 $36,304
Gross Profit 15,420 9,265 5,425 6,071
Other income / Equity in earnings of
affiliates 8,814 91 156 62
Operating income (loss) 10,170 3,008 431 1,800
Quarter ended March 31, 2006
Revenues from external customers $128,625 $34,383 $46,033 $39,505
Gross Profit 6,945 12,878 4,133 6,635
Other income / Equity in earnings of
affiliates 5,641 120 101 363
Operating income (loss) 1,780 6,218 (1,235) 2,149
Retail Other Total
Quarter ended March 31, 2007
Revenues from external customers $33,780 $- $409,144
Gross Profit 9,840 - 46,021
Other income / Equity in earnings of
affiliates 160 3,422 12,705
Operating income (loss) (2,287) 1,045 14,167
Quarter ended March 31, 2006
Revenues from external customers $32,112 $- $280,658
Gross Profit 9,680 - 40,271
Other income / Equity in earnings of
affiliates 164 223 6,612
Operating income (loss) (2,441) (474) 5,997
SOURCE The Andersons, Inc.
-0- 05/02/2007
/CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417/
/Web site: http://www.andersonsinc.com /
(ANDE)
CO: The Andersons, Inc.
ST: Ohio
IN: AGR TRN
SU: ERN
KN
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0859 05/02/2007 16:07 EDT http://www.prnewswire.com
