Press Releases
The Andersons, Inc.
Net income for 1998 was $9.8 million, or $1.20 per diluted share, on revenues of $1.104 billion. In 1997, the company had revenues of $998.8 million and net income of $4.1 million, or $0.50 per diluted share. Pretax income in 1998 more than doubled from the prior year, and the company also experienced a lower effective tax rate.
Agriculture
The Agriculture Group operates grain elevators, wholesale fertilizer distribution facilities and retail farm centers in four eastern corn belt states. Collectively these facilities handle about 160 million bushels of grain and more than 1 million tons of dry and liquid agricultural fertilizer annually. This year, the company leased two Toledo-area grain elevators from Cargill, opened a new fertilizer distribution facility in northeast Ohio, acquired four more retail farm centers in northwest Ohio and acquired a wholesale/retail fertilizer distribution center located in Waterloo, Ind.
The Agriculture Group experienced good grain sales and revenue. Corn and soybean yields in the region were excellent although somewhat dryer than normal. Operating income for the period was lower than in the fourth quarter of 1997 because of grain-sales timing and reduced drying income. For the full year, however, grain income was up substantially as a result of increased demand for, and utilization of, the company's storage space. Its elevators have a total storage capacity of 80 million bushels.
Wholesale fertilizer sales were somewhat soft during the fourth quarter, primarily as a result of the continued cautious reaction of farmers and dealers to low grain prices. Full-year operating income increased due to improved margins and higher overall shipments during 1998. With additional locations this year, the retail farm centers achieved fourth-quarter and full- year increases in revenues, fertilizer tons and application acres, but acquisition-related expenses impacted bottom-line results.
Processing & Manufacturing
The processing division produces granular lawn care products for retailers, professional lawn-care operators and golf courses. It also produces corncob-based chemical and feed ingredient carriers, animal bedding and litter products. With lawn fertilizer volume growth and the continuing shift of cob products to higher value-added applications, this division's top- and bottom- line performances improved slightly in the fourth quarter and were significantly higher for the full year.
The group's growing and very profitable manufacturing division repairs and markets various types of railcars and operates a custom steel fabrication business. Although fourth-quarter operating income was slightly lower than in the 1997 period, the division increased its railcar fleet and achieved substantial revenue and operating income growth for the third consecutive year.
Retail
This group operates six large retail stores in Ohio and characterizes its retail concept as "The Complete Home Store" -- "with more for your home than any other store." The product offering consists of traditional home center merchandise -- plumbing, electrical, building supplies, etc. -- and includes lawn and garden products, extensive lines of housewares and domestics, pet supplies, automotive supplies, sporting goods and a unique offering in food.
Supported by heavy customer traffic late in the Christmas season, the group registered a 2.7 percent same-store sales gain for the fourth quarter. For the full year, same-store sales grew by a more modest 0.3 percent. Average gross margins were higher than 1997 levels, for both the quarter and the full year. As a result, the group's fourth-quarter and 12-month operating income showed improvement from the year-earlier performance.
Company
According to President and Chief Executive Officer Mike Anderson, "We're really pleased with the performance achieved by our company this year. While our overall results tend to fluctuate, all three of our operating groups achieved solid income growth in 1998. As a result both net income and earnings per share more than doubled. We're very optimistic about 1999 as well. With large quantities of grain in our elevators at the present time, the outlook for storage income is very good, and the hesitancy by farmers to make late- 1998 purchases of their spring fertilizer requirements bodes well for our wholesale and retail fertilizer operations. As always, we will be watching very closely the spring planting and growing conditions in our region. We're increasing production and distribution capacity to support growth of our lawn fertilizer products, and our railcar fleet continues to expand. In retail, our stores have experienced double-digit percentage increases in same-store sales in the first several weeks of 1999. For these reasons, we expect to show solid earnings improvement in 1999."
The Andersons, Inc. recently paid a cash dividend of $0.05 per share to shareholders of record as of January 4, 1999. In 1998, the quarterly dividend was $0.04. The company has repurchased shares on the open market from time to time.
The Andersons, Inc. is a respected leader and dominant regional player in the grain industry. This strong position in its basic business has allowed the company to diversify into other agribusiness operations, several processing and manufacturing businesses, and general merchandise retailing. The company has been in operation since 1947.
This release contains forward-looking statements, including statements with respect to anticipated revenue growth, adequacy of cash flows and profitability. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, economic and weather conditions in agriculture, economic conditions and competition in its retail stores' markets, risks associated with acquisitions, and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission.
For further information regarding The Andersons free of charge via fax dial 1-800-PRO-INFO and enter company code "ANDE."
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months Ended Year Ended
December 31 December 31
(in thousands, except for
per share amounts) 1998 1997 1998 1997
(unaudited) (unaudited) (unaudited) (unaudited)
Sales and merchandising
revenues $365,486 $398,576 $1,098,722 $993,746
Other income 1,828 1,385 5,412 5,099
Total 367,314 399,961 1,104,134 998,845
Cost of sales and
merchandising revenues 320,212 353,271 937,493 851,157
Gross profit 47,102 46,690 166,641 147,688
Operating, administrative
and general expenses 38,518 34,976 144,681 131,818
Asset impairment charge -- 1,121 -- 1,121
Interest expense 2,457 2,176 8,954 8,494
Total 40,975 38,273 153,635 141,433
Income before income taxes 6,127 8,417 13,006 6,255
Income taxes 949 2,991 3,254 2,181
Net income $5,178 $5,426 $752 $4,074
Per common share:
Basic earnings $0.64 $0.68 $1.21 $0.50
Basic earnings before
asset impairment -- $0.77 -- $0.59
Diluted earnings $.63 $0.68 $1.20 $0.50
Dividends paid $0.04 $0.03 $0.16 $0.12
Weighted average shares
outstanding - basic 8,142 7,945 8,059 8,160
Weighted average shares
outstanding - diluted 8,235 7,957 8,118 8,167
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
December 31 December 31
(in thousands) 1998 1997
Assets
Current assets:
Cash and cash equivalents $3,253 $8,278
Accounts receivable:
Trade accounts and notes receivables (net) 62,647 68,643
Margin deposits 248 771
Total 62,895 69,414
Inventories 184,990 191,467
Deferred income taxes 4,634 1,408
Prepaid expenses 5,502 4,521
Total current assets 261,274 275,088
Other assets:
Notes receivable (net) and other assets 8,435 6,333
Investments in and advances to affiliates 1,057 1,026
Total 9,492 7,359
Property, plant and equipment (net) 90,057 85,797
Total $360,823 $368,244
Liabilities and owners' equity
Current liabilities:
Notes payable $7,700 $15,572
Accounts payable for grain 88,978 121,233
Other accounts payable 75,301 63,309
Accrued expenses 17,079 12,973
Current maturities of long-term debt 6,318 8,406
Total current liabilities 195,376 221,493
Pension and postretirement benefits 3,113 2,799
Long-term debt 71,565 65,709
Deferred income taxes 7,330 5,393
Minority interest 705 649
Owners' equity 82,734 72,201
Total $360,823 $368,244
SOURCE: The Andersons, Inc.
Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor of The Financial Relations Board, 312-640-6692
Website: http://www.andersonsinc.com/