The Andersons, Inc. Reports Record 3rd Qtr.; Cites Improvement In All Segments
Nine Months EPS $1.37 Vs. $0.62 Last Year
Oct 23, 2002
The Andersons, Inc.
Net income for nine months was $10.3 million, or $1.37 per diluted share, with revenues of $721 million. In comparison, September year-to-date net income last year totaled $4.6 million, or $0.62 per diluted share, on revenues of $678 million. Earnings for the quarter and nine months to-date both established new records for the company.
The Andersons has four operating groups: Agriculture, Processing, Rail and Retail.
The Agriculture Group's grain, plant nutrient and farm center businesses all achieved improved revenues and operating results for the quarter. Although earnings from storing grain were lower than they were during the third quarter of 2001, the reduction was more than offset by higher grain and fertilizer sales, improved farm center average gross margins, and the impact of a marketing agreement that covers certain of the company's grain facilities. Through nine months of 2002, the group's operating income almost matched last year's January - September performance. Earlier this week, The Andersons announced that it has signed a letter of intent with Lansing Grain, a grain trading company, to form a new Limited Liability Company (LLC) that will serve as a platform from which to launch future growth initiatives.
The Processing Group continued to achieve improved operating results during the most recent three-month period. While lawn fertilizer volumes were lower than the previous year because of the unusually dry summer throughout much of the country, average gross margins increased due to lower ingredient costs and a shift toward higher margin control products as a result of these drought conditions. The group's nine-month results reflected a significant turnaround from last year's operating loss.
With significantly more cars in service this year than last year, the Rail Group continued to achieve bottom-line growth, overcoming its 2001 third- quarter operating loss. In addition to the increased utilization rate of its railcar and locomotive fleet, the total fleet was also bigger than it was in 2001. The group's operating income for the first nine months of 2002 similarly reflected significant improvement from its 2001 performance.
The Retail Group achieved a 0.6 percent increase in same-store sales compared to the third quarter of 2001, and a substantial reduction in its operating loss for this typically soft season of the year. Average gross margins were also higher, in part due to sales of lawn and garden products in July that had been delayed by poor weather in the spring. As a result, the group's operating income for the first nine months of 2002 was significantly improved from 2001 results.
"I'm really pleased with our recent performance," said President and Chief Executive Officer Mike Anderson. "The fact that all four of our business segments achieved improved operating results for the latest three-month period demonstrates real balance. We again established new records for the company's net income and earnings per share, and our year-to-date EBITDA of $32.2 million was $6.2 million higher than the first nine months of 2001. Excluding the interest to carry grain inventories, our EBITDA amounted to $28.4 million, up $5.4 million from last year. Expenses have been controlled well by our managers. In spite of increases in healthcare, retirement and insurance costs, total operating, administrative and general expenses through September are $1.5 million lower than they were a year ago."
"While we expect to continue to see positive results from many of these improvements, there are factors at work that will cause us to fall short of last year's fourth-quarter earnings. Three months ago, we stated that drought conditions would likely cause grain production in our region to fall below average this year, further eroding our grain storage earnings, already down from the unprecedented levels we have experienced during the past couple of years. I indicated at that time that I thought we would really be challenged to match last year's $1.21 full-year earnings per share. As it's now playing out, the grain harvest is about like we expected. New, however, is the degree of progress being made by all of our other businesses. Because of these positive strides, I now believe that our 2002 earnings may exceed last year by ten to twenty cents a share, placing our full-year EPS in a range from $1.31 to $1.41."
The company will host a webcast on Thursday, October 24, 2002 at 11:00 A.M. EST, to discuss its third-quarter performance and full-year outlook. The webcast can be accessed under "Financial Information" on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz367184468gf12.html .
The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. Its strong position in this basic business has allowed the company to diversify into agricultural fertilizer distribution, lawn fertilizer production, railcar marketing, and general merchandise retailing. The Andersons has been in operation since 1947.
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.
The Andersons, Inc. is located on the Internet at www.andersonsinc.com . The Andersons, Inc. Consolidated Statements of Operations Three Months ended Nine Months ended September 30 September 30 (in thousands, except for per share amounts) 2002 2001 2002 2001 Sales and merchandising revenues $204,722 $186,518 $720,651 $677,590 Cost of sales and merchandising revenues 170,247 155,204 601,073 562,901 Gross profit 34,475 31,314 119,578 114,689 Operating, administrative and general expenses 33,828 33,044 100,376 101,869 Interest expense 2,042 2,463 7,328 8,944 Other income / Gains: Other income 734 812 2,364 2,189 Gain on involuntary conversion - - - 338 Income (loss) before income taxes and cumulative effect of accounting change (661) (3,381) 14,238 6,403 Income taxes (577) (1,476) 3,953 1,664 Income (loss) before cumulative effect of accounting change (84) (1,905) 10,285 4,739 Cumulative effect of accounting change, net of income tax benefit - - - (185) Net income (loss) $(84) $(1,905) $10,285 $4,554 Per common share: Basic earnings (loss) $(0.01) $(0.26) $1.41 $0.62 Diluted earnings (loss) $(0.01) $(0.26) $1.37 $0.62 Dividends paid $0.065 $0.065 $0.195 $0.195 Weighted average shares outstanding-basic 7,319 7,225 7,302 7,300 Weighted average shares outstanding-diluted 7,319 7,225 7,499 7,324 Depreciation and amortization $10,623 $10,606 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) September 30 December 31 September 30 (in thousands) 2002 2001 2001 Assets Current assets: Cash and cash equivalents $7,835 $5,697 $5,088 Accounts receivable (net) and margin deposits 64,159 54,836 58,165 Inventories 201,247 238,291 191,535 Other current assets 14,169 27,849 21,228 Total current assets 287,410 326,673 276,016 Other assets 6,655 6,300 6,695 Railcar assets leased to others (net) 25,435 26,102 24,379 Property, plant and equipment (net) 93,039 95,001 95,422 $412,539 $454,076 $402,512 Liabilities and shareholders' equity Current liabilities: Notes payable $80,000 $82,600 $95,100 Other current liabilities 128,337 169,068 112,900 Total current liabilities 208,337 251,668 208,000 Deferred items and other long-term liabilities 15,554 16,158 16,036 Long-term debt 84,961 91,316 87,463 Shareholders' equity 103,687 94,934 91,013 $412,539 $454,076 $402,512 Segment Data Quarter ended September 30, 2002 Agriculture Processing Rail Revenues from external customers $138,385 $20,466 $5,119 Other income 340 63 24 $138,725 $20,529 $5,143 Operating income (loss) $1,244 $(1,358) $733 Quarter ended September 30, 2001 Revenues from external customers $115,799 $22,345 $7,860 Other income 333 97 27 $116,132 $22,442 $7,887 Operating income (loss) $(130) $(2,184) $(282) Nine months ended September 30, 2002 Revenues from external customers $482,422 $93,730 $13,335 Other income 827 352 57 $483,249 $94,082 $13,392 Operating income (loss) $13,290 $947 $1,253 Nine months ended September 30, 2001 Revenues from external customers $430,573 $98,128 $20,863 Other income 832 273 13 Gain on involuntary conversion 338 - - $431,743 $98,401 $20,876 Operating income (loss) $13,385 $(4,210) $(1,205) Segment Data Quarter ended September 30, 2002 Retail Other Total Revenues from external customers $40,752 $- $204,722 Other income 173 134 734 $40,925 $134 $205,456 Operating income (loss) $(60) $(1,220) $(661) Quarter ended September 30, 2001 Revenues from external customers $40,514 $- $186,518 Other income 131 224 812 $40,645 $224 $187,330 Operating income (loss) $(706) $(79) $(3,381) Nine months ended September 30, 2002 Revenues from external customers $131,164 $- $720,651 Other income 547 581 2,364 $131,711 $581 $723,015 Operating income (loss) $2,508 $(3,760) $14,238 Nine months ended September 30, 2001 Revenues from external customers $128,026 $- $677,590 Other income 465 606 2,189 Gain on involuntary conversion - - 338 $128,491 $606 $680,117 Operating income (loss) $86 $(1,653) $6,403
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/