The Andersons, Inc. Reports 1st-Quarter Improvement Net Income vs. Year-Earlier Loss EPS $0.01 vs. $0.10 Loss in 1st Quarter '98
Sep 15, 2000
The Andersons, Inc.
Total revenues of $200.8 million for the period were down 9.6 percent from the $222.2 million realized in the first quarter of 1998, primarily due to lower average grain prices.
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 and last week announced the acquisition of an additional outlet in southern Michigan.
The group's operating performance in the first quarter this year improved from the 1998 period because of increased earnings on the company's grain storage space and wholesale fertilizer volume 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. The farm center division generally earns most of its income in the second quarter each year. This business incurred a somewhat larger first- quarter loss in 1999 because of several additional outlets in operation this year.
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 and now controls a fleet of more than 3,800 railcars, up from 3,100 a year earlier. While lease rates are soft in several industries at the present, the group's 1999 first-quarter operating income was higher than the year-earlier period due to 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.
Although the group's cob and pet segments achieved revenue and operating income growth in the first quarter of 1999 versus the comparable period in 1998, the lawn segment experienced a decline in operating income. While lawn- products volume and revenue both increased from 1998 first-quarter levels, operating income was somewhat lower due to changes in the mix of products sold and increased distribution costs. To accommodate growing production demand, The Andersons recently announced the addition of manufacturing capacity in eastern Pennsylvania and is currently evaluating other possible production opportunities.
This group operates six large retail stores in Ohio. The company characterizes its retail concept as "The Complete Home Store-more for your home than any other store." A traditional home center with plumbing, electrical and building supplies, etc., 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 first three months of 1999, the Retail Group achieved a same-store sales increase of about 10 percent, strong margins and a corresponding bottom- line improvement. Contributing to this year-to-year improvement was the strong demand for cold weather products, such as heaters, work wear and snow blowers, early in the quarter.
According to President and Chief Executive Officer Mike Anderson, "I'm pleased with our overall performance for the first three months of 1999 and the continuation of the earnings growth we achieved in 1998. Looking forward, the spring season is traditionally a very strong period for The Andersons, and we expect this year's to be the same."
The Andersons, Inc. paid a cash dividend of $0.05 per share in the first and second quarters of 1999 and last week announced a similar $0.05 dividend to be paid in July. In 1998, the quarterly dividend was $0.04. 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.
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 Operations (Unaudited) Three Months Ended March 31 (in thousands, except for per share amounts) 1999 1998 Sales and merchandising revenues $199,965 $221,221 Other income 790 968 Total 200,755 222,189 Cost of sales and merchandising revenues 161,889 188,329 Gross profit 38,866 33,860 Operating, administrative and general expenses 36,734 32,729 Interest expense 2,066 2,458 Total 38,800 35,187 Income (loss) before income taxes 66 (1,327) Income tax expense (credit) 22 (503) Net income (loss) $44 $(824) Per common share: Basic and earnings (loss) $0.01 $(0.10) Diluted earnings (loss) $0.01 $(0.10) Dividends paid $0.05 $0.04 Weighted average shares outstanding - basic 8,157 7,986 Weighted average shares outstanding - diluted 8,302 7,989 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) March 31 December 31 (in thousands) 1999 1998 Assets Current assets: Cash and cash equivalents $7,718 $3,253 Accounts receivable: Trade accounts and notes receivable (net) 80,114 62,647 Margin deposits 6,246 248 Total 86,360 62,895 Inventories 192,738 184,990 Deferred income taxes 5,787 4,634 Prepaid expenses 4,792 5,502 Total current assets 297,395 261,274 Other assets: Notes receivable (net) and other assets 7,371 8,435 Investments in and advances to affiliates 1,052 1,057 Total 8,423 9,492 Property, plant and equipment (net) 89,845 90,057 Total $395,663 $360,823 Liabilities and owners' equity Current liabilities: Notes payable $84,000 $7,700 Accounts payable for grain 36,968 88,978 Other accounts payable 89,066 75,301 Accrued expenses 14,766 17,079 Current maturities of long-term debt 5,992 6,318 Total current liabilities 230,792 195,376 Pension and postretirement benefits 3,026 3,113 Long-term debt 71,757 71,565 Deferred income taxes 7,070 7,330 Minority interest 694 705 Owners' equity 82,324 82,734 Total $395,663 $360,823
SOURCE: The Andersons, Inc.
Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor, 312-640-6692; or Lisa Fortuna, 312-640-6779, both of The Financial