Press Releases
The Andersons, Inc.
The Agriculture Group's grain business reported increased revenues for the third quarter as a result of volume growth and higher average prices, but continued to experience an operating income decline during the period. As the company has noted previously, poor growing conditions a year ago lowered U.S. stocks of corn and soybeans, thereby reducing demand for grain storage space. The 2003 harvest is currently underway, and some industry analysts are predicting record corn production. The group's plant nutrient business achieved volume, revenue and income growth in the most recent quarter. Continued growth in industrial and specialty agricultural products along with volume and margin strength in traditional product categories contributed to these positive results. In total, the Agriculture Group experienced a $2.8 million loss for the quarter, $3 million below the $0.2 million operating income it achieved in the third quarter of 2002. Operating income through the first nine months of 2003 was $4.0 million, down $6.2 million from the prior year. The group also indicated that the previously announced negotiations to acquire the shares of Agrico Canada, Ltd. have been discontinued.
The Rail Group's operating income of $0.7 million in the third quarter was essentially unchanged from the same three-month period in 2002. The number of railcars and locomotives that it owns or manages continues to increase from year-earlier levels. At this time, the fleet consists of 74 locomotives and more than 6,000 rail cars. During the third quarter, the railcar repair and fabrication shops continued to contribute significantly to the group's operating income. The Rail Group's total operating income for the first nine months of 2003 amounted to $2.4 million, almost double its year-earlier performance.
The Processing Group incurred a loss of $1.1 million for the third quarter, improving slightly on its prior year performance for the period. Year-to-date operating income was $2.6 million, or $1.6 million better than the first nine months of 2002. Through September, turf-care product volumes were up approximately 14 percent in professional markets and 24 percent in consumer/industrial markets. However, because of product and customer mix changes and increased raw material costs, gross margins were somewhat lower. Sales growth in the group's cob-based products business also contributed to the group's third quarter and year-to-date income improvement.
The Retail Group achieved a 2.8 percent increase in same-store sales in the third quarter compared to the same three-month period in 2002. Average margins were down slightly, however, and expenses were somewhat higher than a year ago. As a result, the group matched its year-earlier $0.1 million operating loss for the period. Through nine months, the group's operating income was $1.6 million. This was $0.9 million below the $2.5 million it reported for the same period of 2002.
"Our third quarter results reflect the roller-coaster nature of the grain business," said President and Chief Executive Officer Mike Anderson. "While grain storage earnings have been declining since 2002's poor crop harvests, I'm hopeful that we'll see stocks begin to rebuild this fall. Our overall performance in the third quarter was right in line with our expectations and consistent with the full-year projections we've mentioned previously. A few months ago, I indicated that we expected 2003 full-year earnings per diluted share (EPS) to come in 'near the upper end of the $1.15 to $1.30 range.' Despite the restatement that raised 2002 EPS by 13 cents and reduced 2003 EPS by an equivalent amount, we're not reducing our projection for this year. We're really saying that the outlook has improved, and our expectation for total 2002 - 2003 earnings has increased."
The company will host a webcast on Thursday, October 23, 2003 at 11:00 A.M. EDT, to discuss its third quarter performance and full-year outlook. This can be accessed under "Financial Information" on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz390953513gf12.html .
The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising and agricultural plant nutrients distribution. Its strong position in these basic businesses has allowed the company to diversify into the production of turf care products, rail equipment leasing, and general merchandise retailing. The company has been in operation since 1947.
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.
The Andersons, Inc. is located on the Internet at www.andersonsinc.com
FINANCIAL TABLES FOLLOW . . .
The Andersons, Inc.
Consolidated Statements of Operations
Three Months ended Nine Months ended
September 30 September 30
(in thousands, except for per
share amounts) 2003 2002 2003 2002
(as (as
restated) restated)
Sales and merchandising revenues $253,027 $204,868 $803,828 $721,430
Cost of sales and merchandising
revenues 222,789 171,089 692,978 603,717
Gross profit 30,238 33,779 110,850 117,713
Operating, administrative and
general expenses 33,748 34,188 101,055 101,523
Interest expense 1,603 2,042 6,119 7,328
Other income / Gains:
Other income 1,519 734 3,816 2,364
Gain on involuntary conversion - - - -
Income (loss) before income taxes
and cumulative effect
of accounting change (3,594) (1,717) 7,492 11,226
Income taxes (1,245) (1,087) 2,529 2,847
Income (loss) before cumulative
effect of accounting change (2,349) (630) 4,963 8,379
Cumulative effect of accounting
change, net of
income tax benefit - - - 3,480
Net income (loss) $(2,349) $(630) $4,963 $11,859
Per common share:
Basic earnings (loss) $(0.33) $(0.09) $0.70 $1.62
Diluted earnings (loss) $(0.33) $(0.09) $0.68 $1.58
Dividends paid $0.065 $0.065 $0.195 $0.195
Weighted average shares
outstanding-basic 7,106 7,319 7,139 7,302
Weighted average shares
outstanding-diluted 7,106 7,319 7,311 7,499
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2003 2002 2002
(as restated) (as restated)
Assets
Current assets:
Cash and cash equivalents $3,964 $6,095 $7,835
Accounts receivable (net) and
margin deposits 71,092 59,800 64,159
Inventories 184,049 256,275 201,247
Other current assets 16,794 15,119 13,401
Total current assets 275,899 337,289 286,642
Other assets 14,915 12,591 11,709
Railcar assets leased
to others (net) 26,979 26,399 25,435
Property, plant and
equipment (net) 91,716 92,939 93,039
$409,509 $469,218 $416,825
Liabilities and shareholders'
equity
Current liabilities:
Notes payable $80,000 $70,000 $80,000
Other current liabilities 113,273 185,534 125,791
Total current liabilities 193,273 255,534 205,791
Deferred items and other long-term
liabilities 24,105 23,647 20,812
Long-term debt 83,241 84,272 84,961
Shareholders' equity 108,890 105,765 105,261
$409,509 $469,218 $416,825
Segment Data
Quarter ended September 30, 2003 Agriculture Processing Rail
Revenues from external customers $178,376 $23,522 $9,252
Other income 647 464 128
$179,023 $23,986 $9,380
Operating income (loss) $(2,828) $(1,139) $693
Quarter ended September 30, 2002 (as
restated)
Revenues from external customers $138,531 $20,466 $5,119
Other income 340 63 24
$138,871 $20,529 $5,143
Operating income (loss) $188 $(1,358) $733
Nine months ended September 30, 2003
Revenues from external customers $536,044 $113,072 $26,315
Other income 1,705 782 213
$537,749 $113,854 $26,528
Operating income (loss) $4,034 $2,567 $2,373
Nine months ended September 30, 2002
(as restated)
Revenues from external customers $483,201 $93,730 $13,335
Other income 827 352 57
$484,028 $94,082 $13,392
Operating income (loss) $10,278 $947 $1,253
Segment Data
Quarter ended September 30, 2003 Retail Other Total
Revenues from external customers $41,877 $- $253,027
Other income 156 124 1,519
$42,033 $124 $254,546
Operating income (loss) $(65) $(255) $(3,594)
Quarter ended September 30, 2002 (as
restated)
Revenues from external customers $40,752 $- $204,868
Other income 173 134 734
$40,925 $134 $205,602
Operating income (loss) $(60) $(1,220) $(1,717)
Nine months ended September 30, 2003
Revenues from external customers $128,397 $- $803,828
Other income 689 427 3,816
$129,086 $427 $807,644
Operating income (loss) $1,574 $(3,056) $7,492
Nine months ended September 30, 2002
(as restated)
Revenues from external customers $131,164 $- $721,430
Other income 547 581 2,364
$131,711 $581 $723,794
Operating income (loss) $2,508 $(3,760) $11,226
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/