Press Releases
The Andersons, Inc.
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The Grain & Ethanol Group's operating income of $19.6 million in the second quarter was significantly higher than its year earlier result of $8.9 million. This was the result of both the grain and ethanol businesses achieving record second quarter results. The grain business benefited primarily from increased space income, which resulted primarily from sizeable basis gains. The ethanol business continued to benefit from a large portion of the ethanol sales being contracted during prior periods, when margins were at high levels. Second quarter 2010 income from the group's investment in Lansing Trade Group was also higher than the prior year. Total second quarter revenues for the group were $474 million; this includes $195 million of grain and ethanol sales made by the Grain & Ethanol Group in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the second quarter of 2009, the group's total revenues were $500 million and included $188 million of the aforementioned sales. The Grain & Ethanol Group's operating income through the first six months was a record $40.3 million in 2010 and $14.7 million in 2009. Total revenues through June 2010 and 2009 were $995 million and $981 million, respectively. During the quarter, the company finalized the acquisition of the assets of O'Malley Grain, Inc.'s two grain cleaning and storage facilities in Mansfield, Ill., and Fairmont, Neb.
The Plant Nutrient Group achieved operating income of $19.0 million during the second quarter of 2010, on revenues of $228 million. This is the second highest second quarter results in the group's history. In the same three month period of 2009, the group had an operating income of $10.3 million on revenues of $198 million. Margins were up slightly from the prior year and tons sold increased by more than a third as the industry returned to more traditional nutrient application rates on phosphates and potassium. Retail farm centers were building and maintaining inventories versus the de-stocking that took place in 2009. The group's first half 2010 operating income was $19.7 million on $332 million of revenues. Last year, its operating income through the first six months was $12.4 million on revenues of $309 million.
The Rail Group's operating income was $0.1 million in the second quarter of 2010, whereas the group earned $0.6 million for the same three month period a year ago. Second quarter revenues were $24 million in both 2010 and 2009. Gross profit from the leasing business was significantly less primarily due to lower utilization rates and the corresponding carrying costs of idle assets. This quarter, the group recognized $1.7 million in gross margin from the scrapping and sale of railcars, whereas last year $0.8 million was recorded. The group has approximately 22,800 cars and locomotives, which is down slightly from the prior year. The average utilization rate (the percentage of the fleet in service) for the quarter was 71.0 percent compared to 80.6 percent for the same period last year. As of the end of June, utilization was 71.4 percent. The rail repair business showed improvement during the second quarter. The group's first half operating income this year was $1.1 million on $50 million of revenues. In 2009, operating income through June was $1.5 million and revenues were $51 million. These results included gains on sales of railcars and related leases of $4.3 million and $1.1 million in 2010 and 2009, respectively. During the second quarter the Rail Group made a significant minority investment in a short-line railroad - the Iowa Northern Railway Company.
The Turf & Specialty Group had an operating income of $2.5 million in the second quarter this year on $41 million of revenues. Last year, the group reported a record $3.0 million of operating income on $40 million of revenues for the same period. Turf products tonnage increased slightly, but gross profit per ton decreased due to product mix. Through the first half of 2010, the group's operating income was $5.2 million on $83 million of revenues. Last year, its operating income was a record $6.1 million through the first six months and revenues were $84 million.
The Retail Group had an operating income of $2.1 million during the second quarter of 2010 on revenues of $44 million. During the same period of the prior year, the group had an operating income of $2.9 million and total revenues were $49 million. Through the first six months, the group lost $0.7 million and total revenues were $74 million. Last year through June, the group earned $0.2 million on total revenues of $83 million.
"We are pleased with our second quarter performance," CEO Mike Anderson stated. "The Grain & Ethanol Group led our results with record performance in both the grain and ethanol areas. Our Plant Nutrient Group also had a strong quarter. As I review these results, I am again reminded that our strategy of purposeful diversification allows us to remain a strong and profitable company even when one or more of our business units is under performing," added Mr. Anderson.
The company will host a webcast on Thursday, August 5, 2010 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading "Investor" on its website at www.andersonsinc.com.
The Andersons, Inc. is a diversified company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar leasing and repair, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now has operations across the United States, in Puerto Rico, and has rail equipment leasing interests in Canada and Mexico.
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. Although the Company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.
The Andersons, Inc. is located on the Internet at www.andersonsinc.com
FINANCIAL TABLES FOLLOW . . .
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months
ended Six Months ended
June 30 June 30
(in thousands, except for
per share amounts) 2010 2009 2010 2009
---- ---- ---- ----
Sales and merchandising
revenues $810,999 $810,954 $1,532,997 $1,508,346
Cost of sales and
merchandising revenues 723,445 737,620 1,386,893 1,373,638
------- ------- --------- ---------
Gross profit 87,554 73,334 146,104 134,708
Operating, administrative
and general expenses 51,107 46,723 96,510 93,253
Interest expense 4,663 5,161 9,298 10,851
Other income (loss):
Equity in earnings (loss)
of affiliates 6,667 784 16,572 (2,890)
Other income, net 1,881 2,724 5,535 3,963
----- ----- ----- -----
Income before income taxes 40,332 24,958 62,403 31,677
Income taxes 14,553 9,312 23,968 12,118
------ ----- ------ ------
Net income 25,779 15,646 38,435 19,559
Net (income) loss
attributable to the
noncontrolling interest (610) 272 (1,001) 1,311
---- --- ------ -----
Net income attributable to
The Andersons, Inc. $25,169 $15,918 $37,434 $20,870
======= ======= ======= =======
Per common share:
Basic earnings $1.37 $0.87 $2.04 $1.15
===== ===== ===== =====
Diluted earnings $1.36 $0.87 $2.02 $1.14
===== ===== ===== =====
Dividends paid $0.0900 $0.0875 $0.1775 $0.1725
======= ======= ======= =======
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
December
June 30 31 June 30
(in thousands) 2010 2009 2009
---- ---- ----
Assets
Current assets:
Cash and cash equivalents $204,317 $145,929 $179,752
Restricted cash 3,548 3,123 4,243
Accounts receivable, net 132,701 137,195 130,824
Margin deposits, net 7,384 27,012 38,009
Inventories 237,994 407,845 205,084
Commodity derivative assets -
current 14,150 24,255 48,635
Other current assets 32,176 41,464 40,564
------ ------ ------
Total current assets 632,270 786,823 647,111
Investments and other assets 209,290 182,989 153,281
Commodity derivative assets 389 3,137 1,354
Railcar assets leased to
others (net) 169,331 179,154 176,656
Property, plant and equipment
(net) 144,165 132,288 120,535
$1,155,445 $1,284,391 $1,098,937
========== ========== ==========
Liabilities and shareholders'
equity
Current liabilities:
Commodity derivative
liabilities -current 54,918 24,871 66,698
Other current liabilities 278,051 454,250 243,056
------- ------- -------
Total current liabilities 332,969 479,121 309,754
Other noncurrent liabilities 95,268 90,138 85,772
Commodity derivative
liabilities 2,911 830 4,555
Long-term debt 281,740 308,026 314,557
Shareholders' equity 442,557 406,276 384,299
$1,155,445 $1,284,391 $1,098,937
========== ========== ==========
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
------- ---- -------- ---------
Quarter ended June 30, 2010
Revenues from external customers $473,680 $23,635 $228,404 $41,182
Gross Profit 30,073 4,351 31,563 8,032
Equity in earnings (loss) of
affiliates 6,665 - 2 -
Other income (loss), net 624 499 302 377
Income before income taxes 20,232 114 19,017 2,486
(Income) loss attributable to
the noncontrolling interest (610) - - -
Operating income (loss) (a) 19,622 114 19,017 2,486
Quarter ended June 30, 2009
Revenues from external customers $500,401 $23,762 $197,638 $39,752
Gross Profit 23,325 4,815 22,106 7,614
Equity in earnings of affiliates 781 - 3 -
Other income (loss), net 590 221 770 236
Income before income taxes 8,659 619 10,345 3,042
(Income) loss attributable to
the noncontrolling interest 272 - - -
Operating income (loss) (a) 8,931 619 10,345 3,042
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
------- ---- -------- ---------
Six months ended June 30, 2010
Revenues from external customers $994,569 $50,325 $331,562 $82,815
Gross Profit 56,006 8,353 43,559 16,472
Equity in earnings (loss) of
affiliates 16,568 - 4 -
Other income (loss), net 1,297 2,308 633 794
Income before income taxes 41,339 1,140 19,736 5,150
(Income) loss attributable to
the noncontrolling interest (1,001)
Operating income (loss) 40,338 1,140 19,736 5,150
Six months ended June 30, 2009
Revenues from external customers $980,922 $50,532 $309,400 $84,455
Gross Profit 46,624 10,546 36,628 16,033
Equity in earnings (loss) of
affiliates (2,895) - 5 -
Other income (loss), net 1,149 187 1,258 541
Income before income taxes 13,355 1,501 12,392 6,139
(Income) loss attributable to
the noncontrolling interest 1,311
Operating income (loss) 14,666 1,501 12,392 6,139
Retail Other Total
------ ----- -----
Quarter ended June 30, 2010
Revenues from external customers $44,098 $- $810,999
Gross Profit 13,535 - 87,554
Equity in earnings (loss) of affiliates - - 6,667
Other income (loss), net 157 (78) 1,881
Income before income taxes 2,078 (3,595) 40,332
(Income) loss attributable to the
noncontrolling interest - - (610)
Operating income (loss) (a) 2,078 (3,595) 39,722
Quarter ended June 30, 2009
Revenues from external customers $49,401 $- $810,954
Gross Profit 15,474 - 73,334
Equity in earnings of affiliates - - 784
Other income (loss), net 136 771 2,724
Income before income taxes 2,864 (571) 24,958
(Income) loss attributable to the
noncontrolling interest - - 272
Operating income (loss) (a) 2,864 (571) 25,230
Retail Other Total
------ ----- -----
Six months ended June 30, 2010
Revenues from external customers $73,726 $- $1,532,997
Gross Profit 21,714 - 146,104
Equity in earnings (loss) of affiliates - - 16,572
Other income (loss), net 276 227 5,535
Income before income taxes (749) (4,213) 62,403
(Income) loss attributable to the
noncontrolling interest (1,001)
Operating income (loss) (749) (4,213) 61,402
Six months ended June 30, 2009
Revenues from external customers $83,037 $- $1,508,346
Gross Profit 24,877 - 134,708
Equity in earnings (loss) of affiliates - - (2,890)
Other income (loss), net 247 581 3,963
Income before income taxes 163 (1,873) 31,677
(Income) loss attributable to the
noncontrolling interest 1,311
Operating income (loss) 163 (1,873) 32,988
(a) Operating income (loss) for each Group is defined as net sales
and merchandising revenues plus identifiable other income less all
identifiable operating
expenses, including interest expense for carrying working capital and
long-term assets and is reported net of the noncontrolling interest
share of (income)
loss.
First Call Analyst:
FCMN Contact:
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SOURCE: The Andersons, Inc.
CONTACT: Nicholas C. Conrad, VP, Finance & Treasurer of The Andersons,
Inc., +1-419-891-6415,
Web Site: http://www.andersonsinc.com/