The Andersons, Inc. Reports Strong 2nd Quarter, Six Months

5th Consecutive Qtr. of Year-To-Year EPS Improvement 80 Cents Per Share vs. 52 Cents in Same Quarter of '97

PRNewswire
MAUMEE, Ohio
Sep 14, 2000

The Andersons, Inc. , today announced net income of $6.4 million, or $0.80 per share, for the second quarter of 1998, a 48.8 percent improvement from the $4.3 million, or $0.52 per share, earned in last year's quarter. The second quarter 1998 results marked the fifth consecutive quarter of year-to-year improvement in earnings per share. Because of the seasonal nature of its agricultural, lawn fertilizer and retail businesses, the second and fourth calendar quarters are typically periods of strong earnings for the company.

Total revenues of $283.8 million for the period were up 13.4 percent from the $250.2 million reported for the second quarter of 1997, primarily due to higher grain sales volume.

Net income for the first six months of 1998 jumped to $5.5 million, or $0.70 per share, on revenues of $506.0 million. In the first half of 1997, the company had revenues of $437.0 million and net income of $177,000, or $0.02 per share. The company's EPS on 12-month trailing income stood at $1.18; a year ago it was $0.47.

Agriculture

The company's Agriculture Group operates grain elevators, wholesale fertilizer distribution facilities and retail farm centers in four eastern corn belt states. Collectively these facilities handle about 180 million bushels of grain and more than 1 million tons of dry and liquid agricultural fertilizer annually. In the past few months, The Andersons opened a new fertilizer distribution facility in northeast Ohio, acquired four more retail farm centers in northwest Ohio and began operating two additional Toledo-area grain elevators under a previously announced lease agreement with Cargill. Last week the company also announced the proposed acquisition of a wholesale fertilizer and retail farm center business located in Waterloo, Ind.

The Agriculture Group's operating performance in the second quarter was improved from the prior year. In addition to growth in grain sales volume, increased U.S. grain stocks this year enabled the company to earn a higher return on its storage space. Revenue and income were both further enhanced by agricultural fertilizer volume increases achieved during the strong planting season this spring. Year-to-date operating income for the group also reflected solid improvement from the first half of 1997.

Processing & Manufacturing

The processing business produces granular lawn fertilizer products for retailers throughout the country as well as professional lawn-care and golf course markets. It also produces corncob-based chemical and feed ingredient carriers and animal bedding and litter products. The manufacturing business repairs, sells and leases various types of railcars, offers fleet management services to private railcar owners and operates a custom steel fabrication business.

Primarily because of continued lawn fertilizer volume growth, the Processing & Manufacturing Group's operating income in both the second quarter and the first half of 1998 showed growth from the comparable periods in 1997.

Retail

This group operates six large retail stores in Ohio. The company characterizes its retail concept as "a complete home store" -- a traditional home center with plumbing, electrical and building supplies, etc. -- but also indoor and outdoor garden centers, extensive lines of housewares and domestics, pet supplies, automotive supplies, sporting goods, and a unique offering in food that includes a deli, bakery, produce, specialty foods and wine.

The company's Retail Group registered a modest same-store sales gain in the second quarter, up two percent from the April - June period of 1997. Gross margins were strong during the period, buoyed by growth in housewares and lawn and garden products. As a result, the group's second-quarter operating income was higher this year. First-half performance also reflected improvement from year-earlier results.

Company

According to Chairman and Chief Executive Officer Dick Anderson, "We're really pleased with the performance achieved by our company so far this year. Looking forward, there are several sizable railcar lease transactions in the pipeline that we expect to close in the second half of 1998, and our relatively high grain inventories should provide good storage income for the year. Overall, I believe we'll see a strong performance in 1998. Longer term, we continue to be optimistic about the growth potential in several of our businesses."

The Andersons, Inc. recently paid a cash dividend of $0.04 per share to shareholders of record as of July 1, the company's third such $0.04 quarterly dividend. In 1997, the quarterly dividend was $0.03. 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    Six Months Ended
  (in thousands except for               June 30               June 30
    per share amounts)               1998       1997       1998       1997
  Grain sales and revenues         $123,043    $98,721   $250,872   $192,529
  Fertilizer, retail
    and other sales                 159,756    150,719    253,148    242,729
  Other income                        1,040        750      2,008      1,697
    Total                           283,839    250,190    506,190    436,955

  Cost of grain sales               115,078     92,664    235,311    183,864
  Cost of fertilizer, retail
    and other sales                 119,999    114,642    188,095    182,891

    Total                           235,077    207,306    423,306    366,755

  Gross profit                       48,762     42,884     82,622     70,200

  Operating, administrative
    and general expenses             37,210     33,603     69,938     65,505
  Interest expense                    1,886      2,273      4,344      4,412

    Total                            39,096     35,876     74,282     69,917

  Income before income taxes          9,666      7,008      8,340        283

  Income taxes                        3,296      2,749      2,794        106
  Net income                         $6,370     $4,259     $5,546       $177

  Per common share:
    Basic and diluted earnings        $0.80      $0.52      $0.70      $0.02
    Dividends paid                    $0.04      $0.03      $0.08      $0.06

  Weighted average shares outstanding 7,960      8,230      7,973      8,287

                             The Andersons, Inc.
                         Consolidated Balance Sheets
                                 (Unaudited)

                                                      June      December 31
  (in thousands)                                      1998         1997

  Assets
  Current assets:
    Cash and cash equivalents                       $5,885         $8,278
    Accounts receivable:
    Trade accounts and notes receivables (net)      64,035         68,643
    Margin deposits                                    278            771
      Total                                         64,313         69,414

    Inventories                                    121,221        191,467
    Deferred income taxes                            3,957          1,408
    Prepaid expenses                                 2,525          4,521

  Total current assets                             197,901        275,088

  Other assets:
  Notes receivable (net) and other assets            6,067          6,333
  Investments in and advances to affiliates          1,027          1,026

    Total                                            7,094          7,359
  Property, plant and equipment                     86,993         85,797

    Total                                         $291,988       $368,244

  Liabilities and owners' equity
  Current liabilities:
    Notes payable                                   $9,500        $15,572
    Accounts payable for grain                      34,805        121,233
    Other accounts payable                          70,077         63,309
    Accrued expenses                                17,242         12,973
    Current maturities of long-term debt             7,136          8,406

  Total current liabilities                        138,760        221,493

  Pension and postretirement benefits                2,825          2,799
  Long-term debt                                    66,647         65,709
  Deferred income taxes                              5,931          5,393
  Minority interest                                    647            649
  Shareholders' equity                              77,178         72,201

    Total                                         $291,988       $368,244

SOURCE: The Andersons, Inc.

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


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