Press Releases
The Andersons, Inc.
The company's Agriculture Group achieved an operating income of $0.3 million for the quarter, $2.2 million lower than the $2.5 million it realized in the first quarter of 2002. Revenues of $149.2 million for the quarter were 11 percent higher than 2002's first quarter total of $134.8 million. Plant nutrient sales volumes were higher, and average fertilizer margins rose slightly in spite of an increase in natural gas and nitrogen prices during January and February. These improvements were more than offset, however, by the continued reduction in grain storage income that had been anticipated. World grain stocks, especially corn, have declined significantly during the past two years, and the U.S. has borne a disproportionate share, about half, of this reduction. As a result, earnings from the group's elevators have declined. During the quarter, the group completed a previously announced transaction in which it acquired a minority interest in LGC Grain Company.
The first quarter is always an important period for the company's Processing Group as major retailers throughout the country gear up for the spring lawn and garden season and golf course superintendents work to get their greens, tees and fairways in prime condition following the winter. In the January - March period this year, the group achieved an operating income of $3.7 million. This was $1.3 million, or 54 percent, above its 2002 first quarter performance. Total revenues increased by $11.4 million from the $41.0 million generated in the first quarter of 2002 to $52.4 million this year. While product and customer mix shifts caused average gross margins to decline slightly, the volume of turf-care products sold during this three- month period was 24 percent higher than a year ago. Performance of the group's other businesses, the manufacture of cob-based chemical and feed ingredient carriers, animal bedding and litter products, was commensurate with year- earlier results.
Revenues and operating income of the company's Rail Group were relatively unchanged from the first three months of 2002. This year Rail's first quarter income amounted to $0.3 million on revenues of $4.4 million. In the corresponding period of 2002, income was $0.4 million on revenues of $4.2 million. The group's marketing unit continued to acquire railcars during the quarter and now controls a fleet of more than 5,700 railcars and 51 locomotives. The utilization rate of this fleet also improved from a year ago. Although the group benefited from a short-term car leasing opportunity early last year which was not repeated in the first quarter of 2003, this year-to-year decline was mostly offset by sales growth from a new line of railcar discharge gates.
The Retail Group experienced an 8 percent reduction in same-store sales for the quarter with revenues of $31.9 million this year vs. $34.8 million a year ago. Easter occurred in the first quarter last year, but fell in the second quarter in 2003. This and new competition in some markets explains some of the year-to-year first quarter sales decline. Colder weather experienced during the late winter months this year and economic uncertainty related to the situation in Iraq also seem to have caused retail consumers to curtail their spending. Because of the reduction in total sales, the group's operating loss for the first quarter increased from $1.7 million in 2002 to $2.6 million this year. Although total expenses grew slightly from a year ago, this was offset by favorable inventory performance and an improvement in average gross margins made possible in part by the recent addition of a meat market in three of the group's six stores.
"Our first quarter earnings were right in line with our expectations," said President and Chief Executive Officer Mike Anderson. "For some time now, I've been describing the factors underlying a decline in grain space income. As it turned out, our grain business did even better this quarter than I had anticipated. While sales in our retail stores were clearly affected by economic conditions during the first quarter, our lawn business continued to show solid improvement."
Anderson also stated "Based on our results so far and recognizing that we still have three-quarters of the year to go, our previous earnings projections of $1.15 to $1.30 per share for the full year still seem appropriate. This would be in line with historical averages and assumes, including a whole host of factors, that planting and growing conditions for eastern corn belt farmers this year fall somewhere within the 'normal' range."
The company will host a webcast on Tuesday, April 29, 2003 at 11:00 A.M. EDT, to discuss its first-quarter performance and full-year outlook. The webcast can be accessed under "Financial Information" on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz378674470gf12.html .
The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising and agricultural nutrients distribution. Its strong position in these businesses has allowed the company to diversify into the production of turf care products, rail equipment leasing, 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
The Andersons, Inc.
Consolidated Statements of Operations
Three Months ended
March 31
(in thousands, except for per share
amounts) 2003 2002
Sales and merchandising revenues $237,939 $214,831
Cost of sales and merchandising revenues 204,054 178,811
Gross profit 33,885 36,020
Operating, administrative and general
expenses 32,087 31,787
Interest expense 2,303 2,713
Other income 1,101 792
Income before income taxes 596 2,312
Income taxes 207 703
Net income $389 $1,609
Per common share:
Basic earnings $0.05 $0.22
Diluted earnings $0.05 $0.22
Dividends paid $0.070 $0.065
Weighted average shares outstanding-basic 7,179 7,288
Weighted average shares outstanding-diluted 7,344 7,393
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
March 31 December 31 March 31
(in thousands) 2003 2002 2002
Assets
Current assets:
Cash and cash equivalents $7,038 $6,095 $9,592
Accounts receivable (net) and
margin deposits 79,057 59,800 72,826
Inventories 248,454 256,275 238,903
Other current assets 19,660 15,716 24,271
Total current assets 354,209 337,886 345,592
Other assets 13,568 12,591 11,074
Railcar assets leased to others (net) 29,783 26,399 29,247
Property, plant and equipment (net) 92,557 92,939 94,851
$490,117 $469,815 $480,764
Liabilities and shareholders' equity
Current liabilities:
Notes payable $118,200 $70,000 $128,200
Other current liabilities 159,123 187,056 143,580
Total current liabilities 277,323 257,056 271,780
Deferred items, long-term liabilities
and minority interest 23,618 23,647 20,128
Long-term debt 84,481 84,272 92,269
Shareholders' equity 104,695 104,840 96,587
$490,117 $469,815 $480,764
Segment Data
Quarter ended March 31, 2003
Agriculture Processing Rail Retail Other Total
Revenues from
external
customers $149,193 $52,420 $4,382 $31,944 $- $237,939
Other income 543 203 50 138 167 1,101
$149,736 $52,623 $4,432 $32,082 $167 $239,040
Operating
income (loss) $293 $3,739 $304 $(2,623) $(1,117) $596
Quarter ended March 31, 2002
Revenues from
external
customers $134,840 $40,981 $4,160 $34,850 $- $214,831
Other income 267 123 3 119 280 792
$135,107 $41,104 $4,163 $34,969 $280 $215,623
Operating
income (loss) $2,524 $2,418 $380 $(1,739) $(1,271) $2,312
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/