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The Andersons, Inc. Reports Strong 2nd Quarter, Six Month Results; EPS Of $0.89 For Quarter, 1% Below $0.90 Last Year

The Andersons, Inc. , today announced net income of $6.7 million, or $0.89 per diluted share, for the second quarter of 2000, slightly below the $7.5 million, or $0.90 per diluted share, for the comparable period last year. Total revenues of $259.2 million for the period were comparable to $260.3 million reported for the second quarter of 1999.

Earnings per diluted share reached $1.04 for the first six months this year, 14 percent higher than $0.91 generated in the comparable period of 1999. First-half net income rose to $7.9 million, second highest in the company's history, on revenues of $458.1 million. In the first half of 1999, the company had revenues of $461.1 million and net income of $7.5 million. The company has repurchased shares on the open market from time to time and presently has about 7.5 million shares outstanding.


The company's Agriculture Group operates grain elevators, fertilizer distribution terminals and farm centers in four eastern corn belt states. Collectively, these facilities annually handle in excess of 150 million bushels of grain and about 1.2 million tons of dry and liquid agricultural fertilizer products.

The group's second-quarter operating income improved slightly from prior year levels, and first-half income remained well ahead of last year. With U.S. grain and oilseed supplies presently quite high, the group's grain business achieved second-quarter operating income growth for the fourth consecutive year. Wholesale fertilizer sales volume and income for the quarter, typically the busiest season for this business, were comparable to 1999. Following the unusually strong early planting business experienced in the first quarter this year, wholesale fertilizer first half income was substantially ahead of prior year performance. Circumstances were not as favorable for the group's farm centers, located in the northern third of the group's region. Encountering extended rainfall, some locations were only able to get into farm fields about 30 percent of the historical average number of days, which curtailed fertilizer sales and application income. While projections of total U.S. grain production this year remain high, the weather anomaly experienced around the southern Great Lakes this spring hurt the group's farm center business.


The Manufacturing Group repairs and markets railroad cars and locomotives. It also operates a custom steel fabrication business. The group's railcar marketing segment has grown dramatically in the past few years and now has more than 4,400 railcars and 30 locomotives in its lease portfolio.

Growth in the size of the fleet enabled the group to achieve modest revenue increases for both the quarter and the first six months of 2000. Because of softness in lease rates and car values, however, particularly with grain covered hopper cars, operating income declined. The group remains solidly profitable and has been able to acquire cars for its fleet at attractive prices during this cyclical downturn in the industry.


The Processing Group produces granular lawn fertilizer products for major retailers throughout the country as well as for golf course and professional lawn-care markets. At the end of May, the company completed the acquisition of the professional turf business of The Scotts Co., a purchase that positions The Andersons as the industry leader in premium fertilizer products for golf courses and other professional turf markets in the U.S. The group also produces corncob-based chemical and feed-ingredient carriers, animal bedding, cat litter and ice-melter products.

With the expanded business, revenues continued to grow during the second quarter and were 12 percent above the first six months of 1999. Operating income declined, however, both for the second quarter and the first six months. Some of the decline, attributable to acquisition-related expenses, was anticipated. The balance, however, was due to the wet spring that hurt volume and average margins and growing pains associated with the expansion of manufacturing and distribution capacity in Ohio, Pennsylvania and Alabama.


This group operates six large stores in Ohio, characterizing its retail concept as "More For Your Home." A traditional home center with hardware, plumbing, electrical and building supplies, it also features indoor and outdoor garden centers, extensive lines of housewares and domestics, automotive supplies, pet supplies, sporting goods and a unique specialty food offering. The group also operates a lawn and garden equipment sales and service center.

April, May and June are traditionally very profitable months for this business. Primarily because of the frequent rains, same-store sales this year declined by 4 percent for the second quarter. The group's operating income was relatively unchanged from year-earlier performance, both for the second quarter and six months to-date.


According to President and Chief Executive Officer Mike Anderson, "We're encouraged by the strong results posted by the company for the past three months, especially in view of the impact of unusual spring weather on our farm center, lawn and retail businesses. While second quarter net income and earnings per share were down slightly from 1999, the past three months represented the third best quarter in our company's history, and our first half performance this year was exceeded only once - in 1994. We're also enthusiastic about the company's future, especially considering the substantial investments we've been making in our lawn products and railcar marketing businesses."

The Andersons recently paid a quarterly cash dividend of $0.06 per share. The company also indicated that it is authorized by its board of directors to continue to repurchase shares from time to time.

The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. Its strong position in this basic business has allowed the company to diversify into other agribusiness operations, railcar leasing, turf care product manufacturing and distribution, general merchandise retailing and other businesses. The company has been in operation since 1947.

This release contains forward-looking statements, including statements with respect to anticipated revenues, adequacy of cash flows and profitability. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, 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

                           The Andersons, Inc.
                               Segment Data

  Quarter ended June 30, 2000

                Agriculture Processing   Mfg.   Retail    Other    Total

  Revenues from
    customers     $164,997   $30,390   $9,078  $53,636    $--    $258,101
  Other income         308       100       17      211     476      1,112
    Total         $165,305   $30,490   $9,095  $53,847    $476   $259,213

  Operating income
    (loss)          $6,210       $80     $358   $3,864   $(405)   $10,107

  Quarter ended June 30, 1999
  Revenues from
    customers     $164,523   $27,646   $8,232  $55,889  $2,957   $259,247
  Other income         319       135       37      124     463      1,078
    Total         $164,842   $27,781   $8,269  $56,013  $3,420   $260,325

  Operating income
    (loss)          $5,961   $ 1,012   $1,122   $3,917   $(885)   $11,127

  Six Months ended June 30, 2000
  Revenues from
    customers     $283,611   $64,572  $15,552  $88,825  $2,489   $455,049
  Other income         574       192      153      317   1,793      3,029
    Total         $284,185   $64,764  $15,705  $89,142  $4,282   $458,078

  Operating income
    (loss)          $7,625   $ 1,780     $839   $1,695      $6    $11,945

  Six Months ended June 30, 1999
  Revenues from
    customers     $291,124   $57,513  $14,859  $90,239  $5,477   $459,212
  Other income         512       212       71      209     864      1,868
    Total         $291,636   $57,725  $14,930  $90,448  $6,341   $461,080

  Operating income
    (loss)          $4,843    $3,590   $1,883   $1,758   $(881)   $11,193

  Note:  Segments were restated to reflect the move of a small, retail lawn
         & garden equipment reseller to the Retail Group.  The results of
         this operation were previously included in Other.

                             The Andersons, Inc.
                         Consolidated Balance Sheets

                                             June 30        December 31
                                               2000            1999
  (in thousands)                           (unaudited)       (audited)

  Current assets:
    Cash and cash equivalents                 $5,332          $25,614
    Accounts receivable:
       Trade accounts and notes
         receivable (net)                     60,236           51,812
       Margin deposits                           106            1,339
         Total                                60,342           53,151
    Inventories                              153,981          178,323
    Deferred income taxes                      3,752            5,641
    Prepaid expenses                           3,295            5,796
  Total current assets                       226,702          268,525

  Other assets:
    Notes receivable (net) and other assets   10,123            4,640
    Investments in and advances to affiliates    988              954
      Total                                   11,111            5,594
  Property, plant and equipment (net)        105,819          102,657
      Total                                 $343,632         $376,776

  Liabilities and owners' equity
  Current liabilities:
    Notes payable                            $52,200          $45,000
    Accounts payable for grain                27,489           68,883
    Other accounts payable                    66,006           65,079
    Accrued expenses                          16,027           17,465
    Current maturities of long-term debt       8,009            4,159
  Total current liabilities                  169,731          200,586

  Pension and postretirement benefits          3,590            4,026
  Deferred income                              1,205            3,255
  Long-term debt                              71,836           74,127
  Deferred income taxes                        7,415            8,742
  Minority interest                              231            1,235
  Owners' equity                              89,624           84,805
    Total                                   $343,632         $376,776

                           The Andersons, Inc.
                    Consolidated Statements of Income

                                   Three Months ended     Six Months ended
                                         June 30               June 30
  (in thousands, except for
   per share amounts)                2000       1999       2000       1999

  Sales and merchandising revenues $258,101   $259,247   $455,049   $459,212
  Other income                        1,112      1,078      3,029      1,868
    Total                           259,213    260,325    458,078    461,080

  Cost of sales and merchandising
    revenues                        207,108    208,544    361,928    370,433
  Gross profit                       52,105     51,781     96,150     90,647

  Operating, administrative and
    general expenses                 39,404     38,602     78,935     75,336
  Interest expense                    2,594      2,052      5,270      4,118
    Total                            41,998     40,654     84,205     79,454

  Income before income taxes         10,107     11,127     11,945     11,193
  Income taxes                        3,389      3,668      4,005      3,690
  Net income                         $6,718     $7,459     $7,940     $7,503

  Per common share:
        Basic earnings                $0.89      $0.92      $1.05      $0.92
        Diluted earnings              $0.89      $0.90      $1.04      $0.91
        Dividends paid                $0.06      $0.05      $0.12      $0.10

  Weighted average shares
    outstanding-basic                 7,524      8,075      7,597      8,116
  Weighted average shares
    outstanding-diluted               7,533      8,243      7,605      8,273

SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., 419-891-6417