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The Andersons, Inc. Reports Strong 2nd-Quarter, Six-Month Results; Net Income Up $1.1 Million for Quarter, $2.0 Million for 1st Half
Second-Quarter EPS 90 Cents Vs. 80 Cents in '98

The Andersons, Inc. , today announced net income of $7.5 million, or $0.90 per diluted share, for the second quarter of 1999, an increase of 17.1 percent from the $6.4 million, or $0.80 per diluted share, from the comparable period last year. Because of the seasonal nature of several of its businesses, the second and fourth calendar quarters are typically periods of strong earnings for the company. EPS on 12-month trailing income was $1.45. A year ago it was $1.18.

Total revenues of $260.3 million for the period were down 8.3 percent from the $283.8 million realized in the second quarter of 1998, primarily due to lower grain prices.

Net income for the first six months of 1999 rose to $7.5 million, or $0.91 per diluted share, on revenues of $461.1 million. In the first half of 1998, the company had revenues of $506.0 million and net income of $5.5 million, or $0.70 per diluted share.


The company's Agriculture Group operates grain elevators and wholesale fertilizer distribution facilities in four eastern corn belt states. Collectively these facilities handle about 150 million bushels of grain and one million tons of dry and liquid agricultural fertilizer products annually. In addition, the group operates farm centers in the region.

The group's operating performance in the second quarter this year improved slightly from the 1998 period because of increased earnings on the company's grain storage space and farm center fertilizer volume and service growth. Despite weakness in parts of the U.S. agricultural industry, the grain elevator segment is presently quite strong due to the need to store sizable carryover grain stocks. Because of low grain prices this year, farmers have reduced their fertilizer usage. As a result, The Andersons' wholesale fertilizer business experienced declines in volume, revenue and income from the year-earlier second quarter. The group's farm center division reported increases in revenue and income mainly due to additional outlets acquired during the past 12 months. The wholesale fertilizer and farm center divisions generally earn most of their income in the second quarter.


The Manufacturing Group repairs, sells and leases various types of railcars and operates a custom steel fabrication business. This business has achieved dramatic revenue and income growth in the past few years. While railcar lease rates in several industries are soft at the present time, the group's 1999 second-quarter revenues and operating income were higher than the year-earlier period due to the larger fleet and increased sales of railcars.


The Processing Group produces granular lawn fertilizer products for major retailers throughout the country as well as professional lawn-care and golf- course markets. It also produces ice-melt products, corncob-based chemical and feed-ingredient carriers and animal bedding and litter products. The group's lawn-products segment recorded volume and revenue growth in the second quarter of 1999 versus the comparable period in 1998. Operating income declined somewhat, however, because of changes in the mix of products sold and increased costs associated with production requirements in excess of rated capacity. In this rapidly consolidating industry, The Andersons added manufacturing and distribution capacity in eastern Pennsylvania earlier this year and is in the process of converting an Alabama facility it acquired during the quarter for lawn-products manufacturing and distribution.


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

In the second quarter of 1999, the Retail Group achieved a same-store sales increase of about six percent, strong margins and a corresponding bottom-line improvement. Contributing to this year-over-year improvement was the strong demand for lawn and garden, nursery and home improvement merchandise.


According to President and Chief Executive Officer Mike Anderson, "The spring season is usually a good period for our company, and this year's was no exception. Our overall earnings continued to grow, and the operating income of all four groups was substantial. We are pleased the Retail Group recorded the fifth consecutive quarter of same-store sales growth and improved operating results. However, we're cautious about expectations for the remainder of the year, due to reduced demand for agricultural fertilizer, costs of adding new lawn fertilizer manufacturing capacity and softening of rail car demand." The Andersons, Inc. paid its third five-cent per share quarterly cash dividend on July 21. In 1998, the quarterly dividend was four cents. The company continues to repurchase shares on the open market from time to time.

The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. 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, 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.
                    Consolidated Statements of Income

                                Three Months Ended      Six Months Ended
  (in thousands except for           June 30                June 30
    per share amounts)           1999      1998         1999       1998

  Sales and merchandising
    revenues                   $259,247   $282,799    $459,212   $504,020
  Other income                    1,078      1,040       1,868      2,008
    Total                       260,325    283,839     461,080    506,028

  Cost of sales and
    merchandising revenues      208,544    235,077     370,433    423,406

  Gross profit                   51,781     48,762      90,647     82,622

  Operating, administrative
    and general expenses         38,602     37,210      75,336     69,938
  Interest expense                2,052      1,886       4,118      4,344

    Total                        40,654     39,096      79,454     74,282

  Income before income taxes     11,127      9,666      11,193      8,340

  Income taxes                    3,668      3,296       3,690      2,794

  Net income                     $7,459     $6,370      $7,503     $5,546

  Per common share:
    Basic earnings                $0.92      $0.80       $0.92      $0.70

    Diluted earnings              $0.90      $0.80       $0.91      $0.70

    Dividends paid                $0.05      $0.04       $0.10      $0.08

  Weighted average shares
    outstanding-basic             8,075      7,960       8,116      7,973

  Weighted average shares
    outstanding-diluted           8,243      8,012       8,273      7,979

                           The Andersons, Inc.
                       Consolidated Balance Sheets

                                                June 30    December 31
  (in thousands)                                  1999        1998
                                              (unaudited)  (audited)

  Current assets:
    Cash and cash equivalents                    $6,652      $3,253
    Accounts receivable:
    Trade accounts and notes receivables (net)   59,047      62,647
    Margin deposits                                 148         248

      Total                                      59,195      62,895
    Inventories                                 143,224     184,900
    Deferred income taxes                         3,844       5,502
    Prepaid expenses                              4,690       4,521

  Total current assets                          217,605     261,274

  Other assets:
    Notes receivable (net) and other assets       6,726       8,435
    Investments in and advances to affiliates     1,042       1,057

      Total                                       7,768       9,492
  Property, plant and equipment                  91,952      90,057

      Total                                    $317,325    $360,823

  Liabilities and owners' equity
  Current liabilities:
    Notes payable                               $35,000      $7,700
    Accounts payable for grain                   28,466      88,978
    Other accounts payable                       64,906      75,301
    Accrued expenses                             15,940      17,079
    Current maturities of long-term debt          5,426       6,318

  Total current liabilities                     149,738     221,493

  Pension and postretirement benefits             2,640       3,113
  Long-term debt                                 68,371      71,565
  Deferred income taxes                           7,635       7,330
  Minority interest                               1,167         705
  Shareholders' equity                           87,774      82,734

    Total                                      $317,325    $360,823

SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor, 312-640-6779, or Lisa Fortuna, 312-640-6692, both of The Financial
Relations Board, Inc.