Press Releases
The Andersons, Inc.
The first quarter 1998 results marked the fourth consecutive quarter of year-to-year improvement in earnings per share. The company's EPS on 12-month trailing income stands at 91 cents. A year ago it was 12 cents.
Total revenues of $222.2 million for the period were up 19 percent from the $186.8 million realized in the first quarter of 1997, primarily due to higher grain sales.
Agriculture
The company's Agriculture Group operates grain elevators and wholesale fertilizer distribution facilities in four eastern corn belt states. Collectively, these facilities handle about 150 million bushels of grain and one million tons of dry and liquid agricultural fertilizer products annually. In addition, the group operates retail farm centers in the region and recently announced its intent to acquire several additional outlets in northwest Ohio. Late last month, the company also announced a proposed lease and marketing agreement with Cargill whereby The Andersons will operate Cargill's grain elevators in Maumee and Toledo, Ohio.
The group's operating performance in the first quarter this year was dramatically better than the 1997 January-March period because of improvements in the grain business. A year ago, the company was still suffering from two successive poor harvests in parts of its region. Last year, however, grain production returned to a more normal pattern, and carryover stocks of U.S. corn, soybeans and wheat all rose. This improved The Andersons' ability to generate a return on its storage space. At the end of 1997, the company's elevators were essentially full, with almost double the amount of grain they had held a year earlier.
Processing & Manufacturing
As its name implies, this group consists primarily of two value-added businesses. The processing business unit produces granular lawn fertilizer products for retailers throughout the country as well as professional lawn- care and golf course markets. It also produces corncob-based chemical and feed ingredient carriers and animal bedding and litter products. The manufacturing business unit repairs, sells and leases various types of railcars, offers fleet management services to private railcar owners and operates a custom steel fabrication business.
The Processing & Manufacturing Group's first-quarter operating income improved from the year-earlier period primarily due to lawn fertilizer volume growth from a nationwide retailer which The Andersons has recently begun to supply.
Retail
This group operates six large retail stores in Ohio. The company characterizes its retail concept as "a complete home store" -- a traditional home center with plumbing, electrical and building supplies, etc. -- but also indoor and outdoor garden centers, extensive lives of housewares and domestics, pet supplies, automotive supplies, sporting goods, and a unique offering in food which includes a deli, bakery, produce, specialty foods and wine.
The Retail Group has just completed a major two-year effort to renovate its stores and greatly improve its appearance and merchandising. The unusually warm weather encountered in the first quarter this year adversely affected sales of cold weather products such as space heaters, workwear and snowblowers. For the quarter, same store sales were down somewhat. The timing of Easter, in the first quarter last year but the second quarter this year, also impacted year-to-year comparisons. During the month of April, The Andersons stores are registering sales gains.
Company
According to Chairman and Chief Executive Officer Dick Anderson, "The past couple of years have been tough because of two unusually poor harvests in our region, but our improved first-quarter performance shows that it's pretty well behind us now. Looking forward, we are optimistic about the growth potential in PMG's railcar and processing businesses and believe we'll see a strong performance overall in 1998."
The Andersons, Inc. paid cash dividends of four cents per share in the first and second quarters of 1998. In 1997, the quarterly dividend was three cents. The company continues to repurchase shares on the open market from time to time.
The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. This strong position in its basic business has allowed the company to diversity into other agribusiness operations, several processing and manufacturing businesses, and general merchandise retailing. The company has been in operation since 1947.
This release contains forward-looking statements, including statements with respect to anticipated revenue growth, adequacy of cash flows and profitability. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, economic and weather conditions in agriculture, economic conditions and competition in its retail stores' markets, risks associated with acquisitions and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission.
The Andersons, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
(in thousands, except for per share amounts) 1998 1997
Grain sales and revenues $127,829 $93,809
Fertilizer, retail and other sales 93,392 92,009
Other income 968 947
Total 222,189 186,765
Cost of grain sales 120,233 91,200
Cost of fertilizer, retail and other sales 68,096 68,248
Total 188,329 159,448
Gross profit 33,860 27,317
Operating, administrative and general expenses 32,729 31,902
Interest expense 2,458 2,140
Total 35,187 34,042
Net loss before income tax credit (1,327) (6,725)
Income tax credit (503) (2,643)
Net loss $(824) $(4,082)
Per common share:
Basic and diluted earnings $(0.10) $(0.49)
Dividends paid $0.04 $0.03
Weighted average common shares outstanding 7,986 8,346
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands) March 31 December 31
1998 1997
Assets
Current assets:
Cash and cash equivalents $3,391 $8,278
Accounts receivable:
Trade accounts and notes receivable (net) 79,363 68,643
Margin deposits 1,291 771
Total 80,654 69,414
Inventories 197,868 191,467
Deferred income taxes 2,375 1,408
Prepaid expenses 4,009 4,521
Total current assets 288,297 275,088
Other assets:
Notes receivable (net) and other assets 6,609 6,333
Investments in and advances to affiliates 1,040 1,026
Total 7,649 7,359
Property, plant and equipment 87,102 85,797
Total $383,048 $368,244
Liabilities and owners' equity
Current liabilities:
Notes payable $75,300 $15,572
Accounts payable for grain 55,075 121,233
Other accounts payable 85,867 63,309
Accrued expenses 12,840 12,973
Current maturities of long-term debt 8,386 8,406
Total current liabilities 237,468 221,493
Pension and postretirement benefits 2,864 2,799
Long-term debt 65,114 65,709
Deferred income taxes 5,525 5,393
Minority interest 606 649
Owners' equity 71,471 72,201
Total $383,048 $368,244
SOURCE: The Andersons, Inc.
Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor of The Financial Relations Board, Inc., 312-640-6779
Website: http://www.andersonsinc.com/