The Andersons, Inc. Reports Strong 1st Qtr. Performance
EPS of $0.14 for Period Up $0.17 From 2004
Net Income Improves By $1.2 Million
May 4, 2005
The Andersons, Inc.
The Agriculture Group's first-quarter performance exceeded the two previous years. Operating income was $1.0 million for the quarter, $2.5 million higher than the $1.5 million loss the group incurred a year ago. Revenues of $165 million for the first quarter this year were $19 million below last year primarily due to lower average corn and soybean prices. Noting the less than perfect correlation between revenues and income in the grain business, the company indicated that grain sales margins and space income were both higher during the most recent quarter. The group also continued to benefit from its investment in Lansing Grain, a grain trading company. Gross margin improvement also boosted operating results for the group's plant nutrient business in the first three months of 2005 in spite of significantly higher fertilizer ingredient prices. During the quarter, the Agriculture Group continued to evaluate the possibility of investing in new ethanol production facilities in its eastern corn belt region.
The Rail Group's operating income of $3.6 million in the first quarter this year was $2.3 million above the $1.3 million it earned in the year- earlier three-month period. Revenues of $17.7 million for the quarter were almost 60 percent higher than the $11.1 generated in the comparable period of 2004. Car values and lease rates continued to be strong in this most recent quarter, and the utilization rate of the group's railcar fleet was again higher than year-earlier levels. Also contributing to the group's operating performance growth were the rail assets and attached leases acquired in a large acquisition that was completed midway through the first quarter of 2004. In early April, the group began operating a railcar repair business in Mississippi in addition to those it was already operating in Ohio and South Carolina.
The Processing Group's operating income of $1.1 million in the first three month period of 2005 was $2.1 million lower than a year ago. Revenues of $40.9 million for the quarter were $4.3 million below the $45.2 million it registered in the first quarter of last year. Turf-care product volumes were lower this year. Average margins were also down as a result of product cost increases that could not be fully recouped through higher prices.
The Retail Group reported revenues of $35.1 million for the first quarter of 2005, a 1.5 percent increase in same-store sales compared to the same three-month period in 2004. The average sale per transaction and average gross margin also improved somewhat. As a result, the group's operating loss of $2.1 million for the period was $0.2 million better than its 2004 performance.
"The first quarter is typically a loss period for our seasonal businesses, so earning net income of $1.0 million for the period this year shows that we're off to a good start," said President and Chief Executive Officer Mike Anderson. "Agriculture and Rail both posted terrific results during the first three months of 2005. In total, the Company's earnings improved by seventeen cents a share, and total cash provided by our operating activities also continued to grow."
Anderson also stated, "Looking forward, we're hoping for big corn and soybean crops again this year, and so far spring planting in much of our region is at, or ahead of, last year's pace. We still have a long way to go until the fall harvest, however, so prudence would suggest that we should reasonably expect our grain business to achieve full-year results more in line with the most recent three to five year averages rather than the exceptional results it achieved last year. All considered, I believe that our 2005 full- year EPS could be in the $2.20 to $2.50 range."
The company will host a webcast on Thursday, May 5, 2005 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 .
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 seven 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. Although the Company believes that the assumptions upon which 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 Operations Three Months ended (in thousands, except for per share March 31 amounts) 2005 2004 Sales and merchandising revenues $258,980 $275,050 Cost of sales and merchandising revenues 219,021 238,988 Gross profit 39,959 36,062 Operating, administrative and general expenses 36,901 34,744 Interest expense 2,950 2,666 Other income, net 1,079 791 Equity in earnings of affiliates 446 162 Income (loss) before income taxes 1,633 (395) Income taxes 599 (149) Net Income (loss) $1,034 $(246) Per common share: Basic earnings (loss) $0.14 $(0.03) Diluted earnings (loss) $0.14 $(0.03) Dividends paid $0.080 $0.075 Weighted average shares outstanding- basic 7,373 7,218 Weighted average shares outstanding- diluted 7,643 7,218 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) March 31 December 31 March 31 (in thousands) 2005 2004 2004 Assets Current assets: Cash and cash equivalents $6,138 $8,439 $3,624 Restricted cash 1,482 1,532 1,993 Accounts receivable (net) and margin deposits 90,778 66,235 118,534 Inventories 270,650 251,428 280,326 Other current assets 31,114 30,659 33,525 Total current assets 400,162 358,293 438,002 Other assets 20,949 21,437 23,094 Railcar assets leased to others (net) 113,318 101,358 101,062 Property, plant and equipment (net) 91,401 92,510 94,828 $625,830 $573,598 $656,986 Liabilities and shareholders' equity Current liabilities: Short-term borrowings $114,400 $12,100 $174,000 Other current liabilities 193,237 240,447 181,209 Total current liabilities 307,637 252,547 355,209 Deferred items and other long-term liabilities 32,822 33,029 28,001 Long-term debt non-recourse 61,465 64,343 77,036 Long-term debt 89,151 89,803 81,248 Shareholders' equity 134,755 133,876 115,492 $625,830 $573,598 $656,986 Segment Data Agriculture Rail Processing Quarter ended March 31, 2005 Revenues from external customers $165,332 $17,705 $40,891 Gross Profit 15,781 8,515 5,858 Other income / Equity in earnings of affiliates 908 185 168 Operating income (loss) 951 3,640 1,077 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 / Equity in earnings of affiliates 530 97 51 Operating income (loss) (1,529) 1,291 3,212 Segment Data Retail Other Total Quarter ended March 31, 2005 Revenues from external customers $35,052 $- $258,980 Gross Profit 9,805 - 39,959 Other income / Equity in earnings of affiliates 132 132 1,525 Operating income (loss) (2,098) (1,937) 1,633 Quarter ended March 31, 2004 Revenues from external customers $34,551 $- $275,050 Gross Profit 9,416 - 36,062 Other income / Equity in earnings of affiliates 156 119 953 Operating income (loss) (2,317) (1,052) (395)
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/