The Andersons, Inc. Reports Record Income EPS of $3.39 for Year vs. $2.55 in 2004
Net Income of $26.1 Million Up 36%
Feb 8, 2006
The Andersons, Inc.
The Agriculture Group's fourth-quarter and full-year income both set new records. Operating income of $16.4 million for the quarter was $4.8 million higher than the $11.6 million the group generated a year earlier. Full-year operating income in 2005 was $23.0 million. This was $1.7 million above the $21.3 million achieved in 2004, the group's previous best performance. The Grain Division's total operating income in the fourth quarter was significantly higher than its 2004 result. For the full year, its operating income was down. In the fourth quarter, the group's Plant Nutrient Division exceeded its 2004 results and, in so doing, set a new income record for the full year.
The Rail Group's operating income of $9.5 million in the fourth quarter of 2005 more than tripled the $2.8 million it earned in the same three-month period a year ago. Revenues of $33.5 million for the quarter were $17.8 million higher than the $15.7 generated in the fourth quarter of 2004. Full- year income of $22.8 million and revenues of $92.0 million also exceeded 2004 results by a wide margin. In 2004, the group had earned $11.0 million on revenues of $59.3 million. The rail leasing business continued to achieve operating income growth during the most recent three-month period and the full year. The size of the group's fleet also continued to grow in 2005. From about 14,600 cars controlled by the group in December of 2004, the fleet was increased to more than 19,000 railcars by the end of 2005. The Rail Group's 2005 operating results also included gains on the sale of certain railcars. Income from the group's fabrication and railcar repair shops was higher in 2005 as a result of the fluid filtration product lines acquired earlier in the year which were immediately accretive.
The Turf and Specialty Group typically incurs a loss in the fourth quarter due to the seasonal nature of its business. This year the operating loss amounted to $1.5 million, on revenues of $22.0 million. During the same three- month period in 2004, the group's operating loss was $2.5 million, with revenues of $21.7 million. The $1.0 million improvement in the fourth-quarter operating loss was due to a change in the group's business model earlier this year which realigned staffing and assets in the turf and cob products businesses. For the full year, the group incurred an operating loss of $3.0 million. This was $2.9 million higher than its 2004 operating loss, and included $1.8 million of severance and other restructuring costs associated with the realignment and some property losses.
The Retail Group reported revenues of $52.8 million for the most recent quarter and $182.8 million for the full year. The group's fourth-quarter operating income of $2.0 million doubled its previous-year performance. In addition to continued favorable sales trends in food categories during the quarter, the group capitalized on high energy costs and frigid weather in December with strong sales of home insulation materials and outdoor workwear. Total customer counts and average gross margins were slightly lower in the fourth quarter this year, but the average amount each customer purchased increased. The group's operating income for the full year was $2.9 million, an increase of $0.8 million from 2004.
"The operating results our company achieved in the fourth quarter and full calendar year were impressive," said President and Chief Executive Officer Mike Anderson. "We've also set the stage for continued income growth. At the present time, construction is underway on an ethanol production facility in Michigan, in which we will be the largest equity investor and manager. We've recently announced plans for a plant in Indiana, in which The Andersons will also be the lead equity investor. These two plants will collectively have a planned production capacity of 165 million gallons of ethanol per year. In addition to managing these facilities, we will provide grain origination, ethanol marketing, risk management and other services. The company is also a minority investor in a third ethanol plant, currently under construction in Indiana, for which we will provide grain origination services. With our entry into ethanol, continued growth in rail, and the improvement we demonstrated in all of our other businesses during the most recent quarter, I believe that our company's future looks pretty bright."
The company will host a webcast on Thursday, February 9, 2006 at 11:00 A.M. EST, to discuss its fourth quarter and full-year 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, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar marketing, industrial products formulation, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now 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. 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. 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 The Andersons, Inc. Consolidated Statements of Income (Unaudited) Three Months ended Year ended December 31 December 31 (in thousands, except for per share amounts) 2005 2004 2005 2004 Sales and merchandising revenues $384,171 $369,962 $1,296,652 $1,266,932 Cost of sales and merchandising revenues 315,548 313,733 1,098,506 1,077,833 Gross profit 68,623 56,229 198,146 189,099 Operating, administrative and general expenses 44,349 43,215 153,759 154,895 Interest expense 3,108 2,671 12,079 10,545 Other income, net 1,118 1,814 4,683 4,973 Equity in earnings of affiliates 984 508 2,321 1,471 Income before income taxes 23,268 12,665 39,312 30,103 Income taxes 7,932 4,385 13,225 10,959 Net Income $15,336 $8,280 $26,087 $19,144 Per common share: Basic earnings $2.05 $1.14 $3.52 $2.64 Diluted earnings $1.98 $1.09 $3.39 $2.55 Dividends paid $0.085 $0.080 $0.330 $0.305 Weighted average shares outstanding-basic 7,465 7,292 7,421 7,246 Weighted average shares outstanding-diluted 7,745 7,568 7,705 7,498 The Andersons, Inc. Consolidated Balance Sheets (Unaudited) December 31 December 31 (in thousands) 2005 2004 Assets Current assets: Cash and cash equivalents $13,876 $8,439 Restricted cash 3,936 1,532 Accounts receivable (net) and margin deposits 83,291 66,235 Inventories 240,806 251,428 Other current assets 30,632 30,659 Total current assets 372,541 358,293 Other assets 39,008 21,437 Railcar assets leased to others (net) 131,097 101,358 Property, plant and equipment (net) 91,498 92,510 $634,144 $573,598 Liabilities and shareholders' equity Current liabilities: Short-term borrowings $12,400 $12,100 Other current liabilities 263,922 244,024 Total current liabilities 276,322 256,124 Deferred items and other long-term liabilities 30,896 29,452 Long-term debt non-recourse 88,714 64,343 Long-term debt 79,329 89,803 Shareholders' equity 158,883 133,876 $634,144 $573,598 Segment Data (Unaudited) Turf & Agriculture Rail Specialty Quarter ended December 31, 2005 Revenues from external customers $275,945 $33,455 $21,979 Gross Profit 33,556 14,945 4,809 Other income/Equity in earnings of affiliates 1,607 106 44 Operating income (loss) 16,421 9,542 (1,486) Quarter ended December 31, 2004 Revenues from external customers 284,004 15,685 21,738 Gross Profit 31,017 7,395 3,976 Other income/Equity in earnings of affiliates 1,133 626 143 Operating income (loss) 11,622 2,779 (2,515) Year ended December 31, 2005 Revenues from external customers 899,329 92,009 122,561 Gross Profit 82,933 43,281 18,888 Other income/Equity in earnings of affiliates 4,283 642 589 Operating income (loss) 22,974 22,822 (3,044) Year ended December 31, 2004 Revenues from external customers 901,139 59,283 127,814 Gross Profit 87,372 28,793 21,503 Other income/Equity in earnings of affiliates 3,544 962 596 Operating income (loss) 21,302 10,986 (144) Segment Data Retail Other Total Quarter ended December 31, 2005 Revenues from external customers $52,792 $- $384,171 Gross Profit 15,313 - 68,623 Other income/Equity in earnings of affiliates 129 216 2,102 Operating income (loss) 2,003 (3,212) 23,268 Quarter ended December 31, 2004 Revenues from external customers 48,535 - 369,962 Gross Profit 13,841 - 56,229 Other income/Equity in earnings of affiliates 215 205 2,322 Operating income (loss) 951 (172) 12,665 Year ended December 31, 2005 Revenues from external customers 182,753 - 1,296,652 Gross Profit 53,044 - 198,146 Other income/Equity in earnings of affiliates 646 844 7,004 Operating income (loss) 2,921 (6,361) 39,312 Year ended December 31, 2004 Revenues from external customers 178,696 - 1,266,932 Gross Profit 51,431 - 189,099 Other income/Equity in earnings of affiliates 756 586 6,444 Operating income (loss) 2,108 (4,149) 30,103
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/