The Andersons, Inc. Reports Record 4th Qtr. & Full Year Earnings
EPS of $2.55 for Year vs. $1.59 in 2003
Full Year Net Income of $19.1 Million Up 64%
Feb 9, 2005
The Andersons, Inc.
The Agriculture Group's fourth-quarter and full-year results both established new income performance records. Operating income was $11.6 million for the quarter, $1.8 million higher than the $9.8 million the group generated a year earlier. Full-year operating income in 2004 was $21.3 million. This was $7.4 million above the $13.9 million achieved in 2003. Revenues of $288 million for the fourth quarter this year were $75 million below last year primarily due to lower average grain prices. Full-year revenues of $909 million were $10 million higher than the previous year. Record corn and soybean production in the U.S. this year enabled the group's elevators to achieve strong earnings from grain storage in the fourth quarter of 2004, and full-year grain space income was the highest it's been in three years. Operating income in the group's plant nutrient business this year was its second best year ever. As a result of tonnage growth of more than 10% and price increases in certain products, revenues increased significantly. Average gross margins were slightly lower than the prior year. During the year, the Agriculture Group acquired an elevator in Oakville, Indiana, continued to benefit from its investment in Lansing Grain, a grain trading company, and sold two underperforming farm centers. The group has also been evaluating the possibility of investing in ethanol production facilities in its region.
The Rail Group's operating income of $2.8 million in the fourth quarter of 2004 was $1.1 million above the $1.7 million it earned in the year-earlier three-month period. Revenues of $15.7 million for the quarter were 76 percent higher than the $8.9 generated in the comparable period of 2003. Full-year income of $11.0 million and revenues of $59.3 million also exceeded 2003 results by a wide margin. In 2003, the group had earned $4.1 million on revenues of $35.2 million. Contributing to the group's significant income growth in 2004 was a large acquisition made early in the year. This transaction dramatically increased the number of railcars the group owns directly, leases, or manages for others throughout North America and improved the group's overall operating efficiency.
The Processing Group typically incurs an operating loss during the fourth quarter. This year the loss amounted to $2.5 million, on revenues of $21.7 million. During the same three-month period in 2003, the group's operating loss was $1.5 million, with revenues of $20.9 million. In the most recent three-month period, turf-care product volumes were up slightly but were offset by higher employment-related costs and other non-recurring realignment charges. For the full calendar year, turf-care product volumes were lower, and the group incurred an operating loss of $0.1 million, or $1.1 million below the $1.0 million operating income it achieved in 2003. Full-year revenues of $128 million in 2004 were $6 million below last year. Margin pressure in the group's cob-based products business also contributed to the decline in the group's operating income. In response to these conditions, the group has closed a lawn products manufacturing operation in Pennsylvania and has reduced certain sales, general and administrative expenses. It has also reduced year- end inventories of turf-care products by 23 percent versus 2003.
The Retail Group reported revenues of $48.5 million for the fourth quarter of 2004, a 3.3 percent decrease in same-store sales compared to the same three-month period in 2003. Sales of $179 million for the full year were flat compared to the group's 2003 experience. Customer counts and average gross margins were also relatively unchanged, but expenses increased versus 2003, both for the quarter and the full year. As a result, the group achieved an operating income of $0.9 million for the quarter, $0.9 million below the prior year. For the full calendar year, operating income was $2.1 million in 2004, compared to $3.4 million in 2003. It was noted that competitors had opened several new stores in the group's region during the past year, especially in the Lima and Toledo, Ohio market areas.
"All considered, our overall performance in 2004 was very gratifying," said President and Chief Executive Officer Mike Anderson. "Agriculture and Rail both posted exceptional results, the company set new earnings records, for the quarter as well as the year, and cash provided by operating activities has been very strong. We were able to achieve these results in spite of unusually high energy prices, continued escalation in health care costs, and a huge investment in terms of employees' time and significant external expenditures that we incurred in connection with the initial year of the new Sarbanes-Oxley regulations."
The company will host a webcast on Thursday, February 10, 2005 at 10:00 A.M. EST, to discuss its 2004 performance. This can be accessed under the heading "Financial Information" on its website at www.andersonsinc.com .
The Andersons, Inc. is a diversified company with interests in the grain and plant nutrient sectors of U.S. agriculture, as well as in railcar marketing, industrial materials formulation, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company presently has operations in six U.S. states plus 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. It also includes financial information, of which, as of the date of this press release, the Company's independent auditors have not completed their audit. Subsequent events may occur or additional information may arise that could have an effect on the final year-end financial information. 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 FINANCIAL TABLES FOLLOW . . . The Andersons, Inc. Consolidated Statements of Income (Unaudited) Three Months ended Year ended December 31 December 31 (in thousands, except for per share amounts) 2004 2003 2004 2003 Sales and merchandising revenues $373,642 $443,136 $1,275,273 $1,246,964 Cost of sales and merchandising revenues 317,413 389,892 1,086,174 1,082,870 Gross profit 56,229 53,244 189,099 164,094 Operating, administrative and general expenses 43,215 42,074 154,895 143,129 Interest expense 2,671 1,929 10,545 8,048 Other income 2,322 1,232 6,444 5,048 Income before income taxes 12,665 10,473 30,103 17,965 Income taxes 4,385 3,736 10,959 6,264 Net income $8,280 $6,737 $19,144 $11,701 Per common share: Basic earnings $1.14 $0.94 $2.64 $1.64 Diluted earnings $1.09 $0.91 $2.55 $1.59 Dividends paid $0.080 $0.070 $0.305 $0.280 Weighted average shares outstanding-basic 7,292 7,147 7,247 7,141 Weighted average shares outstanding-diluted 7,568 7,388 7,498 7,340 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) December 31 December 31 (in thousands) 2004 2003 Assets Current assets: Cash and cash equivalents $8,439 $6,444 Restricted cash 1,532 - Accounts receivable (net) and margin deposits 66,235 68,546 Inventories 251,428 259,755 Other current assets 30,659 22,234 Total current assets 358,293 356,979 Other assets 20,628 13,702 Railcar assets leased to others (net) 101,358 29,489 Property, plant and equipment (net) 92,510 92,449 $572,789 $492,619 Liabilities and shareholders' equity Current liabilities: Notes payable $12,100 $48,000 Other current liabilities 240,447 219,447 Total current liabilities 252,547 267,447 Deferred items and other long-term liabilities 32,220 27,254 Long-term debt non-recourse 64,343 - Long-term debt 89,803 82,127 Shareholders' equity 133,876 115,791 $572,789 $492,619 Segment Data Agri- Process- culture Rail ing Retail Other Total Quarter ended December 31, 2004 Revenues from external customers $287,684 $15,685 $21,738 $48,535 $- $373,642 Gross Profit 31,017 7,395 3,976 13,841 - 56,229 Other income 1,132 627 143 215 205 2,322 Operating income (loss) 11,622 2,779 (2,515) 951 (172) 12,665 Quarter ended December 31, 2003 Revenues from external customers 363,130 8,885 20,945 50,176 - 443,136 Gross Profit 28,568 5,039 5,316 14,321 - 53,244 Other income 813 (123) 182 146 214 1,232 Operating income (loss) 9,834 1,689 (1,545) 1,839 (1,344) 10,473 Year ended December 31, 2004 Revenues from external customers 909,480 59,283 127,814 178,696 - 1,275,273 Gross Profit 87,372 28,793 21,503 51,431 - 189,099 Other income 3,543 963 596 756 586 6,444 Operating income (loss) 21,302 10,986 (144) 2,108 (4,149) 30,103 Year ended December 31, 2003 Revenues from external customers 899,174 35,200 134,017 178,573 - 1,246,964 Gross Profit 76,706 13,626 23,367 50,395 - 164,094 Other income 2,518 90 964 835 641 5,048 Operating income (loss) 13,868 4,062 1,022 3,413 (4,400) 17,965
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/