Press Releases
The Andersons, Inc.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081104/CLTU081LOGO)
The Grain & Ethanol Group's operating income of $8.9 million in the third quarter was comparable to its year earlier result of $9.4 million. The grain business income was down significantly in comparison to the prior year as space income and margin on grain sales returned to more traditional levels. In addition, bad debt reserves were increased. During the third quarter the ethanol business benefited from greatly improved margins and from the finalization of The Andersons Albion Ethanol LLC business interruption claim. Third quarter 2009 income from the group's investment in Lansing Trade Group was down slightly from the prior year. Total third quarter revenues for the Grain & Ethanol Group were $451 million; this includes $176 million of grain and ethanol sales made in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the third quarter of 2008, the group's total revenues were $651 million and included $232 million of the previously mentioned sales. While revenues for the group are lower, due to substantially lower commodity prices, such amounts do not serve as good indicators of income or economic performance in a commodity based business. The Grain & Ethanol Group's operating income through the first nine months was $23.5 million in 2009 and $31.7 million in 2008. Income through September for the grain division in comparison to the prior year is up considerably. Conversely, year to date income for both the ethanol division and Lansing Trade Group is down significantly. Total revenues through September 2009 and 2008 were $1.4 billion and $1.8 billion, respectively.
The Rail Group had an operating loss of $1.1 million in the third quarter of 2009, which is down significantly from the $5.2 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. Gross profit from the leasing business was significantly less due mainly to lower utilization rates and the corresponding increase in storage expense from idle assets. The group now has approximately 24,000 cars and locomotives. The average utilization rate (the percentage of the fleet in service) for the quarter was 74.4 percent in comparison to 93.3 percent for the same period last year. The gross profit of both the railcar repair and manufacturing businesses continued to be down significantly this quarter due to reduced activity resulting from overall economic conditions. Revenues of $21 million for the third quarter were down from the $28 million reported in 2008. The group's first nine month's operating income this year was $0.4 million on $72 million of revenues. In 2008, operating income through September was $16.5 million and revenues were $106 million. These year to date results included gains on sales of railcars and related leases of $1.6 million and $4.0 million in 2009 and 2008, respectively.
The Plant Nutrient Group had an operating loss of $2.8 million during the third quarter of 2009 on revenues of $70 million. In the same three month period of 2008, the group achieved operating income of $7.2 million on revenues of $162 million. Margins were down significantly from the prior year, as third quarter 2008 benefited from unprecedented inventory appreciation, whereas third quarter 2009 margins returned to normal levels. Retailers continue to maintain lower inventory holdings that led to reduced sales volume during the third quarter in comparison to the prior year. The group's first nine month's operating income this year was $9.6 million on $380 million of revenues. Last year, its operating income through the first nine months was a record $62.1 million on revenues of $541 million, as the group benefited from unprecedented earnings from inventory appreciation, before the significant decline in inventory values, which occurred in the fourth quarter of 2008. The integration of the Hartung Brothers Inc's. Fertilizer Division, which was acquired on August 1, is proceeding well. This acquisition is allowing the group to expand its value added product offering, grow its wholesale customer base, and broaden its geographic territory.
The Turf & Specialty Group had an operating loss of $0.3 million in the third quarter this year on $21 million of revenues. Last year, the group reported a $0.5 million loss on $23 million of revenues for the period. Turf products tonnage increased year to year, but gross profit per ton decreased due primarily to product mix. Through the first nine months of 2009, the group's operating income was a record $5.8 million on $106 million of revenues. Last year, its operating income was $3.4 million for the same period, and revenues were $99 million. The group continues to experience positive results from its focus on proprietary products and expanded product lines; however, there has been some softness in the professional product market lately.
The Retail Group had an operating loss of $2.3 million in the third quarter of 2009; this was partially due to the recording of costs associated with the upcoming closing of the Lima store. In the comparable period last year, the group's operating loss was $0.2 million. The group reported revenues of $37 million for the third quarter of 2009, which is below the $41 million in revenues reported for the same period in 2008. Through nine months, the group recorded a loss of $2.1 million and total revenues of $120 million. Last year through September the group lost $0.2 million on total revenues of $127 million. The group continues to be impacted by the overall economic down turn, which has resulted in a decline of both customer counts and average sale per customer. Margins, however, have remained consistent with the prior year.
"We are disappointed overall with this quarter's results, which we would characterize as a mix of areas of continued concern, and some positive developments," said Chairman and Chief Executive Officer Mike Anderson. "Most significantly, our Rail Group continued to be seriously impacted by the overall weak economy. To a lesser extent our Retail Group was also impacted by the economic decline. Conversely, while our Grain & Ethanol Group's results for the quarter were lower than that of the prior year it was nice to see decent margins return to the ethanol business and Lansing Trade Group return to profitability. Within the grain business, while our quarterly results were well below the prior year, our year to date result is a record, which reflects our solid position in the grain business. And, the current ethanol trading environment, which allowed the third quarter results for the ethanol business to be markedly improved over recent quarters, has allowed us to lock in profitable margins for a significant portion of the fourth quarter sales and for some of the sales during the first half of 2010. Both our Plant Nutrient and Turf & Specialty groups had losses for the quarter, which is a typical third quarter result for these seasonal businesses, and for Plant Nutrient, a return to normal patterns following an extraordinary 2008. Finally, we recognized a one-time $4.1 million gain arising from the freezing of the Company's defined benefit pension plan effective July 1, 2010."
The company will host a webcast on Thursday, November 5, 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
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended Nine Months ended
September 30 September 30
2009 2008 2009 2008
---- ---- ---- ----
(in thousands, except for
per share amounts)
Sales and
merchandising
revenues $601,000 $905,712 $2,109,346 $2,719,413
Cost of sales and
merchandising
revenues 549,990 832,687 1,923,628 2,473,810
------- ------- --------- ---------
Gross profit 51,010 73,025 185,718 245,603
Operating,
administrative and
general expenses 51,303 48,572 144,556 139,836
Interest expense 5,123 7,497 15,974 25,140
Other income (loss):
Equity in earnings
(loss) of affiliates 5,275 (619) 2,385 15,801
Other income, net 2,443 1,279 6,406 6,318
----- ----- ----- -----
Income before income taxes 2,302 17,616 33,979 102,746
Income taxes 685 6,617 12,803 38,045
--- ----- ------ ------
Net income 1,617 10,999 21,176 64,701
Net (income) loss
attributable to the
noncontrolling interest (367) 1,841 944 1,588
---- ----- --- -----
Net income attributable
to The Andersons, Inc. $1,250 $12,840 $22,120 $66,289
====== ======= ======= =======
Per common share:
Basic earnings $0.07 $0.71 $1.21 $3.66
===== ===== ===== =====
Diluted earnings $0.07 $0.70 $1.20 $3.59
===== ===== ===== =====
Dividends paid $0.0875 $0.0850 $0.2600 $0.2400
======= ======= ======= =======
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2009 2008 2008
---- ---- ----
Assets
Current assets:
Cash and cash equivalents $180,578 $81,682 $28,541
Restricted cash 3,612 3,927 3,630
Accounts receivable, net 101,279 126,255 181,689
Margin deposits, net 18,948 13,094 58,077
Inventories 190,818 436,920 382,268
Commodity derivative assets -
current 26,608 84,919 113,427
Other current assets 51,412 109,165 74,646
------ ------- ------
Total current assets 573,255 855,962 842,278
Investments and other assets 169,710 153,488 169,800
Commodity derivative assets 2,065 3,662 19,010
Railcar assets leased to
others (net) 181,830 174,132 175,947
Property, plant and equipment (net) 133,350 121,529 118,288
------- ------- -------
$1,060,210 $1,308,773 $1,325,323
========== ========== ==========
Liabilities and shareholders' equity
Current liabilities:
Short-term line of credit $- $- $43,600
Commodity derivative liabilities -
current 59,033 67,055 80,874
Other current liabilities 214,950 458,208 370,430
------- ------- -------
Total current liabilities 273,983 525,263 494,904
Deferred items and other long-term
liabilities 89,263 80,687 65,007
Commodity derivative liabilities 2,360 3,706 6,825
Long-term debt non-recourse 20,611 40,055 43,964
Long-term debt 286,816 293,955 295,207
Shareholders' equity 387,177 365,107 419,416
------- ------- -------
$1,060,210 $1,308,773 $1,325,323
========== ========== ==========
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty Retail Other Total
------- ---- -------- --------- ------ ----- -----
Quarter
ended
September
30, 2009
Revenues
from
external
custo-
mers $450,762 $21,156 $70,446 $21,451 $37,185 $- $601,000
Gross
Profit 24,488 3,166 8,206 4,468 10,682 - 51,010
Equity in
earnings
(loss) of
affiliates 5,271 - 1 - - 3 5,275
Other income
(loss), net 751 66 337 287 111 891 2,443
Income
before
income
taxes 9,245 (1,064) (2,769) (314) (2,285) (511) 2,302
(Income)
loss
attributable
to the
noncontrol-
ling
interest (367) - - - - - (367)
Operating
income
(loss) (a) 8,878 (1,064) (2,769) (314) (2,285) (511) 1,935
Quarter ended
September
30, 2008
Revenues
from
external
custo-
mers $651,045 $28,394 $162,018 $23,164 $41,091 $- $905,712
Gross
Profit 25,021 9,009 21,731 5,176 12,088 - 73,025
Equity in
earnings of
affiliates (620) - 1 - - - (619)
Other
income
(loss),
net 1,012 84 404 76 125 (422) 1,279
Income
before
income
taxes 7,602 5,164 7,223 (497) (155) (1,721) 17,616
(Income)
loss
attributable
to the
noncontrol-
ling
interest 1,841 - - - - - 1,841
Operating
Income
(loss) (a) 9,443 5,164 7,223 (497) (155) (1,721) 19,457
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty Retail Other Total
------- ---- -------- --------- ------ ----- -----
Nine
months
ended
September
30, 2009
Revenues
from
external
custo-
mers $1,431,684 $71,688 $379,846 $105,906 $120,222 $- $2,109,346
Gross
Profit 71,112 13,712 44,834 20,501 35,559 - 185,718
Equity in
earnings
(loss) of
affiliates 2,376 - 6 - - 3 2,385
Other
income
(loss),
net 1,900 253 1,595 828 358 1,472 6,406
Income
before
income
taxes 22,600 437 9,623 5,825 (2,122) (2,384) 33,979
(Income)
loss
attributable
to the
noncontrol-
ling
interest 944 - - - - - 944
Operating
Income
(loss) 23,544 437 9,623 5,825 (2,122) (2,384) 34,923
Nine months
ended
September
30, 2008
Revenues
from
external
custo-
mers $1,845,955 $106,346 $540,988 $98,740 $127,384 $- $2,719,413
Gross
Profit 65,595 29,260 93,805 19,368 37,575 - 245,603
Equity in
earnings
(loss) of
affiliates 15,797 - 4 - - - 15,801
Other
income
(loss),
net 4,770 602 728 265 433 (480) 6,318
Income
before
income
taxes 30,082 16,464 62,132 3,385 (172)(9,145) 102,746
(Income)
loss
attributable
to the
noncontrol-
ling
interest 1,588 - - - - - 1,588
Operating
income
(loss) 31,670 16,464 62,132 3,385 (172)(9,145) 104,334
(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.
First Call Analyst:
FCMN Contact: debra_crow@andersonsinc.com
SOURCE: The Andersons, Inc.
CONTACT: Nicholas C. Conrad, VP, Finance & Treasurer, +1-419-891-6415,
Web Site: http://www.andersonsinc.com/