The Andersons, Inc.
Included in these first quarter 2001 results were the impact of a $338,000 non-recurring pretax gain resulting from an insurance settlement and the cumulative $(185,000) after-tax effect of an accounting change. Income in the comparable three-month period in 2000 included a $907,000 one-time pretax gain on the sale of the company's interest in a subsidiary.
The company's Agriculture Group operates grain elevators, fertilizer distribution terminals and farm centers in Ohio, Michigan, Indiana and Illinois. Collectively, these facilities handle more than 150 million bushels of grain and 1.3 million tons of dry and liquid agricultural fertilizer products annually.
U.S. grain inventories remain relatively high, enabling the group's grain business to continue to generate significant earnings from its storage capacity. The unit's elevators also experienced higher inbound and outbound shipments during the first quarter of 2001 vs. the comparable period of 2000. Protracted cold weather during the first three months this year curtailed wholesale fertilizer shipments slightly. However, margins were somewhat stronger than year-earlier levels. The bottom line for the wholesale fertilizer business and also for the group's farm centers was relatively unchanged from the prior year. Because of the strong performance in the grain business, however, the total group achieved significant growth in revenues and income for the quarter.
The Rail Group leases and markets railroad cars and locomotives. It also repairs railcars and operates a custom steel fabrication business. The group's railcar marketing segment has grown significantly in the past few years and now controls a fleet of more than 4,900 railcars and 30 locomotives that are leased to shippers, railroads and fleet owners in a wide range of industries in the U.S. and Canada.
Because of a slowdown in demand for many types of rail equipment throughout the past year, this group has primarily pursued short-term leasing opportunities rather than making car sales or entering into long-term leasing commitments. While there are signs that the cyclical downturn may be easing, the group incurred a slight operating loss for the quarter.
The Processing Group manufactures turf and ornamental plant fertilizer and control products. With a national production and logistics infrastructure, it serves major retailers throughout the country and is the industry leader in premium fertilizer products for golf courses and other professional turf care markets. The group also produces chemical and feed-ingredient carriers, animal bedding, cat litter and ice-melter products.
Revenues were significantly higher during the period because of an acquisition made last year. The group's operating results for the quarter were below the prior year, however, in part due to continued cold weather throughout much of the country that delayed the start of turf care activities by golf course superintendents as well as by homeowners. In addition, margins were hurt by increases in fuel and nitrogen-based ingredient costs that the group was unable to pass on to its customers.
This group operates six large stores in Ohio. With a theme of More For Your Home™, these stores offer traditional home center merchandise including hardware, plumbing, electrical and building supplies, but also feature indoor and outdoor garden centers, extensive lines of housewares and domestics, automotive supplies, pet supplies, sporting goods and a unique specialty food offering.
A year ago, daytime temperatures reached the seventies in our region during March. This year the month was much more like winter. Consequently, sales of warm weather goods failed to take off, and the group experienced a decline in revenue for the first quarter when compared to the same three months of 2000. Although gross margins increased slightly, the group's first quarter operating loss this year was wider than that incurred a year earlier.
According to President and Chief Executive Officer Mike Anderson, "Many companies are experiencing an economic slowdown at the present time, and The Andersons is no exception. While our Agriculture Group more than doubled operating income for the period, the other three businesses all experienced a decline in operating results. Given our first quarter experience and the uncertain economic outlook, I anticipate that our full year performance may fall short of last year's results from continuing operations -- $1.15 per share before a non-recurring insurance gain. Although we're currently going through these cycles, I continue to feel bullish about the longer-term outlook."
Recently, the company paid a quarterly cash dividend of 6.5 cents per share to shareholders of record as of April 2, 2001. The company is authorized by its board of directors to continue to repurchase shares from time to time.
The Andersons will host a webcast on April 26, 2001 at 11:00 A.M. EST, to discuss these first quarter results and the full-year earnings outlook. The webcast can be accessed through the company's website http://www.andersonsinc.com/ under the heading "Financial Information" or at http://www.videonewswire.com/ANDERSONS/042601/.
The Andersons, Inc. is a respected leader and prominent 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 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, 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 www.andersonsinc.com . The Andersons, Inc. Consolidated Statements of Operations (Unaudited) Three Months ended March 31 (in thousands, except for per share amounts) 2001 2000 Sales and merchandising revenues $220,232 $204,607 Cost of sales and merchandising revenues 185,117 169,553 Gross profit 35,115 35,054 Operating, administrative and general expenses 33,351 32,457 Interest expense 3,614 2,676 Other income / gains: Other income 584 1,011 Gain on insurance settlement 338 - Gain on sale of business - 907 Income (loss) before income taxes and cumulative effect of accounting change (928) 1,839 Income taxes (credit) (298) 617 Net income (loss) before cumulative effect of accounting change (630) 1,222 Cumulative effect of accounting change, net of income tax benefit (185) - Net income (loss) $(815) $1,222 Per common share: Basic earnings (loss) $(0.11) $0.16 Diluted earnings (loss) $(0.11) $0.16 Dividends paid $0.065 $0.060 Weighted average shares outstanding - basic 7,371 7,670 Weighted average shares outstanding - diluted 7,371 7,674 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) March 31 December 31 March 31 (in thousands) 2001 2000 2000 Assets Cash and cash equivalents $6,246 $13,138 $6,047 Accounts receivable and margin deposits 63,610 55,475 75,637 Inventories 213,424 209,706 179,447 Other current assets 28,727 24,505 27,369 Total current assets 312,007 302,824 288,500 Other assets: 7,882 10,020 5,959 Railcar assets leased to others (net) 26,690 22,281 18,929 Property, plant and equipment (net) 96,945 98,071 95,852 $443,524 $433,196 $409,240 Liabilities and owners' equity Current liabilities: Notes payable $114,600 $71,300 $88,800 Other current liabilities 147,315 176,264 148,423 Total current liabilities 261,915 247,564 237,223 Deferred items, long-term liabilities and minority interest 15,800 15,637 14,379 Long-term debt 78,251 80,159 73,003 Shareholders' equity 87,558 89,836 84,635 Total $443,524 $433,196 $409,240 Segment Data (in thousands) Quarter ended March 31, 2001 Agriculture Processing Rail Retail Other Total Revenues from external customers $137,512 $42,246 $7,971 $32,503 $- $220,232 Other income 188 97 10 135 154 584 Gain on insurance settlement 338 - - - - 338 Total $138,038 $42,343 $7,981 $32,638 $154 $221,154 Operating income (loss) $3,329 $(243) $(295) $(2,993) $(726) $(928) Quarter ended March 31, 2000 Revenues from external customers $125,046 $35,409 $6,473 $35,190 $2,489 $204,607 Other income 266 92 136 106 411 1,011 Gain on sale of business - - - - 907 907 Total $125,312 $35,501 $6,609 $35,296 $3,807 $206,525 Operating income (loss) $1,415 $1,701 $481 $(2,169) $411 $1,839
SOURCE: The Andersons, Inc.
Contact: Gary Smith of The Andersons, Inc., 419-891-6417