The Andersons, Inc. Reports Third Quarter Results
MAUMEE, Ohio, Nov. 3, 2010 /PRNewswire-FirstCall/ — The Andersons, Inc. (Nasdaq: ANDE) today announced third quarter net income attributable to the company of $1.4 million, or $0.08 per diluted share, on revenues of $707 million. In the third quarter of 2009, the company reported similar results of $1.3 million, or $0.07 per diluted share, on revenues of $601 million. For the first nine months of 2010, the company earned $38.8 million, or $2.09 per diluted share, on revenues of $2.2 billion. In the same period of 2009, The Andersons reported results of $22.1 million, or $1.20 per diluted share, on $2.1 billion of revenues.
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The Grain & Ethanol Group’s operating income of $2.5 million in the third quarter was below its year earlier result of $8.9 million. The grain business benefited from increased gross profit on grain sales due to the early harvest; however, this was more than offset by a significant decrease in space income, due to basis losses. The ethanol LLC’s had a modest loss this quarter primarily because the company had previously, based on its view of the ethanol market at the time, contracted for ethanol sales at minimal margins. The ethanol results were also impacted by rising prices of certain inputs and higher than anticipated maintenance and repair costs. Third quarter 2010 income from the group’s investment in Lansing Trade Group was down slightly from the prior year. Total third quarter revenues for the Grain & Ethanol Group were $498 million; including $219 million of grain and ethanol sales made in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the third quarter of 2009, the group’s total revenues were $451 million and included $176 million of the previously mentioned sales. The Grain & Ethanol Group’s operating income through the first nine months was a record $42.8 million in 2010 and $23.5 million in 2009. This considerable year-to-date income differential was due to increased performance in all businesses – grain, ethanol, and Lansing Trade Group. Although space income in the grain business was down significantly during the third quarter, space income through September is up from the prior year. Total revenues through September 2010 and 2009 were $1.5 billion and $1.4 billion, respectively.
The Plant Nutrient Group earned an operating income of $1.5 million during the third quarter of 2010 on revenues of $129 million. In the same three month period of 2009, the group had an operating loss of $2.8 million on revenues of $70 million. Volume was up 60 percent due to re-stocking of the nutrient pipeline spurred by rising grain prices, an early harvest, and favorable application weather throughout the Midwest. Margins were also improved year over year, during the third quarter, due to price escalation. The group’s first nine months’ operating income this year was $21.2 million on $461 million of revenues. Last year, its operating income through the first nine months was $9.6 million on revenues of $380 million. This year to year improvement was due primarily to a significant increase in volume as spring and fall application rates of potassium and phosphate returned to more normal levels and to the re-stocking which occurred in the third quarter.
The Rail Group had an operating income of $0.1 million in the third quarter of 2010 on revenues of $22 million. The group lost $1.1 million and had revenues of $21 million during the same three month period a year ago. Gross profit from the leasing business was down for the quarter due primarily to lower utilization rates and the corresponding storage expense from idle assets. The average utilization rate for the quarter was 72.9 percent in comparison to 74.4 percent for the same period last year. Increased leasing activity late in the quarter caused the utilization as of September 30 to increase to 75.6 percent. The group has approximately 22,600 cars and locomotives, which is down from the prior year total of 24,000 units due to the selective scrapping of over 1,500 railcars this year. All other operations showed nice improvement this quarter. The short-line railroad in which the group invested last quarter showed solid performance. The group’s first nine months operating income this year was $1.2 million on $73 million of revenues. In 2009, operating income through September was $0.4 million and revenues were $72 million.
The Turf & Specialty Group reported an operating loss of $0.3 million in the third quarter for both this year and the prior year. A $1.3 million non-recurring gain was recognized in the prior year. Third quarter revenues for the group were $23 million, which is up $2 million from the prior year. Both turf products tonnage and gross profit per ton increased during the third quarter, in comparison to the prior year. Through the first nine months of 2010, the group’s operating income was $4.9 million on $106 million of revenues. Last year, its operating income was a record $5.8 million for the same period on similar revenues.
The Retail Group had an operating loss of $1.7 million in the third quarter of 2010 on revenues of $34 million. In the comparable period last year, the group’s operating loss was $2.3 million and total revenues were $37 million. Through nine months, the group recorded a loss of $2.4 million and total revenues of $108 million. Last year through September the group lost $2.1 million on total revenues of $120 million.
“We had mixed results this quarter,” said Chairman and Chief Executive Officer Mike Anderson. “We were pleased with the performance of the Plant Nutrient Group, which typically has little to no income during the third quarter. The increase in railcar lease renewals at the end of the quarter and the resulting increase in the utilization rate were encouraging to see. Conversely, our Grain & Ethanol Group’s results for the quarter were lower due primarily to the decreased performance of our ethanol business. Our grain business was impacted by a decline in wheat basis, which we expect to be regained through the balance of the wheat crop year. As it relates to our results through September, the Grain & Ethanol Group had record results of $42.8 million, and our Plant Nutrient Group is having their second best year, surpassed only by the unprecedented earnings seen in 2008,” added Mr. Anderson.
The company will host a webcast on Thursday, November 4, 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
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months
ended Nine Months ended
September 30 September 30
(in thousands, except for
per share amounts) 2010 2009 2010 2009
---- ---- ---- ----
Sales and merchandising
revenues $706,825 $601,000 $2,239,822 $2,109,346
Cost of sales and
merchandising revenues 653,716 549,990 2,040,609 1,923,628
------- ------- --------- ---------
Gross profit 53,109 51,010 199,213 185,718
Operating, administrative
and general expenses 50,143 51,303 146,653 144,556
Interest expense 4,625 5,123 13,923 15,974
Other income (loss):
Equity in earnings (loss) of
affiliates (1,096) 5,275 15,476 2,385
Other income, net 3,561 2,443 9,096 6,406
----- ----- ----- -----
Income before income taxes 806 2,302 63,209 33,979
Income taxes 438 685 24,406 12,803
--- --- ------ ------
Net income 368 1,617 38,803 21,176
Net (income) loss
attributable to the
noncontrolling interest 1,026 (367) 25 944
----- ---- --- ---
Net income attributable to
The Andersons, Inc. $1,394 $1,250 $38,828 $22,120
====== ====== ======= =======
Per common share:
Basic earnings $0.08 $0.07 $2.11 $1.21
===== ===== ===== =====
Diluted earnings $0.08 $0.07 $2.09 $1.20
===== ===== ===== =====
Dividends paid $0.0900 $0.0875 $0.2675 $0.2600
======= ======= ======= =======
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2010 2009 2009
---- ---- ----
Assets
Current assets:
Cash and cash equivalents $25,732 $145,929 $180,578
Restricted cash 2,915 3,123 3,612
Accounts receivable, net 143,591 137,195 101,279
Margin deposits, net 58,612 27,012 18,948
Inventories 432,448 407,845 190,818
Commodity derivative assets -
current 118,488 24,255 26,608
Other current assets 48,653 41,464 51,412
------ ------ ------
Total current assets 830,439 786,823 573,255
Investments and other assets 205,363 182,989 169,710
Commodity derivative assets 9,851 3,137 2,065
Railcar assets leased to
others (net) 169,694 179,154 181,830
Property, plant and equipment
(net) 147,184 132,288 133,350
$1,362,531 $1,284,391 $1,060,210
========== ========== ==========
Liabilities and shareholders'
equity
Current liabilities:
Short-term line of credit $101,400 $- $-
Commodity derivative
liabilities -current 47,968 24,871 59,033
Other current liabilities 407,917 454,250 214,950
------- ------- -------
Total current liabilities 557,285 479,121 273,983
Deferred items and other long-
term liabilities 97,107 90,138 89,263
Commodity derivative
liabilities 1,936 830 2,360
Long-term debt 264,349 308,026 307,427
Shareholders' equity 441,854 406,276 387,177
$1,362,531 $1,284,391 $1,060,210
========== ========== ==========
Segment Data
Grain & Plant Turf &
Ethanol Rail Nutrient Specialty
------- ---- -------- ---------
Quarter ended September 30, 2010
Revenues from external customers $498,245 $22,314 $129,109 $23,156
Gross Profit 21,372 2,577 14,226 5,217
Equity in earnings (loss) of
affiliates (1,097) - 1 -
Other income (loss), net 709 1,782 233 244
Income before income taxes 1,430 85 1,462 (291)
Income attributable to the
noncontrolling interest 1,026 - - -
Operating income (loss) (a) 2,456 85 1,462 (291)
Quarter ended September 30, 2009
Revenues from external customers $450,762 $21,156 $70,446 $21,451
Gross Profit 24,488 3,166 8,206 4,468
Equity in earnings (loss) of
affiliates 5,271 - 1 -
Other income (loss), net 751 66 337 287
Income before income taxes 9,245 (1,064) (2,769) (314)
Income attributable to the
noncontrolling interest (367) - - -
Operating income (loss) (a) 8,878 (1,064) (2,769) (314)
Nine months ended September 30,
2010
Revenues from external customers $1,492,814 $72,639 $460,671 $105,971
Gross Profit 77,378 10,930 57,785 21,689
Equity in earnings (loss) of
affiliates 15,471 - 5 -
Other income (loss), net 2,006 4,090 866 1,038
Income before income taxes 42,769 1,225 21,198 4,859
Income attributable to the
noncontrolling interest 25 - - -
Operating income (loss) (a) 42,794 1,225 21,198 4,859
Nine months ended September 30,
2009
Revenues from external customers $1,431,684 $71,688 $379,846 $105,906
Gross Profit 71,112 13,712 44,834 20,501
Equity in earnings (loss) of
affiliates 2,376 - 6 -
Other income (loss), net 1,900 253 1,595 828
Income before income taxes 22,600 437 9,623 5,825
Income attributable to the
noncontrolling interest 944 - - -
Operating income (loss) (a) 23,544 437 9,623 5,825
Retail Other Total
------ ----- -----
Quarter ended September 30, 2010
Revenues from external customers $34,001 $- $706,825
Gross Profit 9,717 - 53,109
Equity in earnings (loss) of
affiliates - - (1,096)
Other income (loss), net 128 465 3,561
Income before income taxes (1,651) (229) 806
Income attributable to the
noncontrolling interest - - 1,026
Operating income (loss) (a) (1,651) (229) 1,832
Quarter ended September 30, 2009
Revenues from external customers $37,185 $- $601,000
Gross Profit 10,682 - 51,010
Equity in earnings (loss) of
affiliates - 3 5,275
Other income (loss), net 111 891 2,443
Income before income taxes (2,285) (511) 2,302
Income attributable to the
noncontrolling interest - - (367)
Operating income (loss) (a) (2,285) (511) 1,935
Nine months ended September 30,
2010
Revenues from external customers $107,727 $- $2,239,822
Gross Profit 31,431 - 199,213
Equity in earnings (loss) of
affiliates - - 15,476
Other income (loss), net 404 692 9,096
Income before income taxes (2,400) (4,442) 63,209
Income attributable to the
noncontrolling interest - - 25
Operating income (loss) (a) (2,400) (4,442) 63,234
Nine months ended September 30,
2009
Revenues from external customers $120,222 $- $2,109,346
Gross Profit 35,559 - 185,718
Equity in earnings (loss) of
affiliates - 3 2,385
Other income (loss), net 358 1,472 6,406
Income before income taxes (2,122) (2,384) 33,979
Income attributable to the
noncontrolling interest - - 944
Operating income (loss) (a) (2,122) (2,384) 34,923
(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.
SOURCE The Andersons, Inc.