The Andersons, Inc. Reports Improved Revenue And Earnings
First Qtr. EPS $(0.03) This Year vs. $(0.07) in 2003
May 5, 2004
The Andersons, Inc.
The Agriculture Group incurred an operating loss of $1.5 million for the quarter. In the comparable three-month period of 2003, the group lost $1.0 million. Revenues of $184 million in this year's first quarter were $34 million higher than a year ago. First quarter revenues in the group's grain business were higher this year due to higher average grain prices and increased volume. Grain gross profit and operating income were both slightly below first quarter 2003 levels. Total tonnage and revenues in the group's plant nutrient business increased somewhat from the prior year during the first quarter. Expenses were moderately higher, however, and the plant nutrient bottom line declined slightly. With carryover stocks of corn in the U.S. projected to drop to their lowest level in several years and currently high grain market prices, planted acres and total corn production on U.S. farms are expected to increase this season. This points toward good fertilizer sales this spring and a large grain harvest in the fall, assuming reasonably good weather during the growing season.
The Rail Group's first quarter performance outpaced 2003's first quarter. Total revenues of $11.1 million were up $6.7 million for the period, and operating income of $1.3 million was $1.0 million above last year. The group completed several railcar financing transactions during the quarter and midway through the period finalized the previously announced acquisition of a large number of railcars and locomotives. This transaction more than doubled the size of the group's fleet and positioned it among the major rail leasing companies in North America.
The Processing Group's first quarter 2004 operating income of $3.2 million was $0.5 million below the amount it earned in the same period last year. Total revenues of $45.2 million for the quarter were $7.2 million below the 2003 first quarter level. Most of the group's lawn products income is typically generated during the first quarter each year as retailers, golf course superintendents and landscapers get ready for springtime business. This year, first quarter sales were lower due to the volume of carryover inventories held by retailers and some shipments that occurred late in 2003 which normally would have happened in January of 2004. In addition, sales to professional markets were hampered by the cold weather which delayed the season's start for many lawn care operators.
The Retail Group's sales of $34.6 million in the first quarter represented a robust 8.2 percent increase in same-store sales compared to the same three- month period in 2003. While the average amount of each customer's purchase increased slightly, most of the $2.6 million increase in the group's total revenue was attributable to growth in the number of customers served. Average margins were relatively unchanged for the period. Because of the resultant increase in total gross profit, the group's operating performance improved by $0.3 million.
The Andersons' consolidated balance sheet grew noticeably during the first quarter, primarily due to the rail acquisition that added approximately $90 million to the company's total assets and $86.4 million of non-recourse debt securitized by the rail assets purchased.
"We're off to a reasonably good start this year, and things appear to be positioned pretty well for the important spring season," said President and Chief Executive Officer Mike Anderson. "Corn acreage projections look promising, and we believe that strong grain prices will encourage average or better agricultural fertilizer use this season. We're getting indications of good spring activity in our stores' lawn and garden business, and we're also encouraged by the early results from our big rail acquisition."
Anderson also stated, "At this juncture, I believe that our 2004 full-year EPS could be in the $1.40 to $1.65 range. It's still early, though, and numerous factors could go either way. My point is simply that forecasting future results in our diverse businesses is imprecise at best. I will update this forecast as we go through the year."
The company will host a webcast on Thursday, May 6, 2004 at 11:00 A.M. EDT, to discuss its first quarter performance and full-year outlook. This can be accessed under the heading "Financial Information" on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz405410570gf12.html .
The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising and agricultural plant nutrients distribution. Its strong position in these basic businesses has allowed the company to diversify into rail equipment leasing, the production of turf care products, and general merchandise retailing. The company 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 . Financial tables follow . . . The Andersons, Inc. Consolidated Statements of Operations Three Months ended March 31 (in thousands, except for per share amounts) 2004 2003 Sales and merchandising revenues $275,050 $238,651 Cost of sales and merchandising revenues 238,988 205,768 Gross profit 36,062 32,883 Operating, administrative and general expenses 34,744 32,438 Interest expense 2,666 2,303 Other income, net 953 1,129 Loss before income tax credit (395) (729) Income tax credit (149) (248) Net loss $(246) $(481) Per common share: Basic earnings (loss) $(0.03) $(0.07) Diluted earnings (loss) $(0.03) $(0.07) Dividends paid $0.075 $0.070 Weighted average shares outstanding-basic 7,218 7,181 Weighted average shares outstanding-diluted 7,218 7,181 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) March 31 December 31 March 31 (in thousands) 2004 2003 2003 Assets Current assets: Cash and cash equivalents $3,624 $6,444 $7,038 Restricted cash 1,993 - - Accounts receivable (net) and margin deposits 118,534 68,546 79,057 Inventories 280,326 259,755 248,454 Other current assets 33,525 22,234 19,582 Total current assets 438,002 356,979 354,131 Other assets 22,422 13,702 13,568 Railcar assets leased to others (net) 101,062 29,489 29,783 Property, plant and equipment (net) 94,828 92,449 92,557 $656,314 $492,619 $490,039 Liabilities and shareholders' equity Current liabilities: Notes payable $174,000 $48,000 $118,200 Other current liabilities 181,209 219,447 158,990 Total current liabilities 355,209 267,447 277,190 Deferred items and other long-term liabilities 27,329 27,254 23,618 Long-term debt non-recourse 77,036 - - Long-term debt 81,248 82,127 84,481 Shareholders' equity 115,492 115,791 104,750 $656,314 $492,619 $490,039 Segment Data Agriculture Rail Processing Quarter ended March 31, 2004 Revenues from external customers $184,193 $11,080 $45,226 Gross Profit 13,718 5,069 7,859 Other income 530 97 51 Operating income (loss) (1,529) 1,291 3,212 Quarter ended March 31, 2003 Revenues from external customers 149,905 4,382 52,420 Gross Profit 13,753 2,142 8,482 Other income 571 50 203 Operating income (loss) (1,032) 304 3,739 Segment Data Retail Other Total Quarter ended March 31, 2004 Revenues from external customers $34,551 $- $275,050 Gross Profit 9,416 - 36,062 Other income 156 119 953 Operating income (loss) (2,317) (1,052) (395) Quarter ended March 31, 2003 Revenues from external customers 31,944 - 238,651 Gross Profit 8,506 - 32,883 Other income 138 167 1,129 Operating income (loss) (2,623) (1,117) (729)
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith, Vice President Finance & Treasurer of The
Andersons, Inc., +1-419-891-6417