Press Releases
The Andersons, Inc.
Net income for six months was $8.2 million, or $1.12 per diluted share, with revenues of $550 million. In comparison, net income for the first half of 2002 totaled $10.4 million, or $1.39 per diluted share, on revenues of $516 million.
The Agriculture Group's grain business experienced an operating income decline during the first two quarters this year. U.S. stocks of corn, soybeans and wheat have fallen to five-year lows following poor planting and growing conditions in 2002. As a result, demand for grain storage space softened in the first half of 2003, and fewer bushels were handled by the group's elevators, causing a reduction in gross profit from last year's record levels. The company had previously indicated that the 2003 decline was to be expected. Recently, industry analysts and the U.S. Dept. of Agriculture have indicated that there is a strong possibility that 2003 crops will produce record yields. The group's plant nutrient business achieved bottom-line improvement in both the first and second quarters this year. During the most recent three months, volume growth in industrial and specialty agricultural products, better than trend-line margins across most traditional product lines, and expense savings in a number of areas contributed to this improvement. Total Agriculture Group operating income was $8.1 million in the second quarter, and stands at $8.4 million through six months.
The Rail Group's operating income of $1.4 million in the second quarter was up significantly from the same three-month period in 2002. During the period, the group continued to increase the fleet of rail equipment that it owns or manages. At mid-year, the fleet consists of 74 locomotives and more than 5,900 rail cars. Improved utilization of the fleet, with a growing number of cars in active lease service, contributed to the income growth. Although railcar values and monthly lease rates are still below historical averages, these have begun to recover somewhat. During the second quarter, the volume of business in the group's rail car repair and fabrication shops also increased significantly, contributing to the group's operating income improvement. The group also started a rail car repair business in South Carolina. The Rail Group's operating income for the first half of 2003 amounted to $1.7 million.
The Processing Group broke even in the second quarter, essentially matching its prior year results for the period. First-half operating income totaled $3.7 million, or $1.4 million better than the first half of 2002. Through six months, turf-care product sales were up about 16 percent in professional markets and 29 percent in consumer/industrial markets. However, because of product and customer mix changes and higher nitrogen ingredient costs only partially offset by price increases, gross margins were somewhat lower. Sales growth in the group's cob-based products business also contributed to the group's first-half income improvement.
The Retail Group experienced a 2 percent decline in same-store sales in the second quarter compared to the same three-month period in 2002 due to softness in the general economy, new competition in the Toledo area, and weather-related softness in sales of nursery stock. This decline was an improvement from the 8 percent drop experienced in the first quarter, however. Despite lower gross profit attributable to the drop in revenue, store operating costs were reduced in the April-June period, and operating income of $4.3 million equaled the previous year's second-quarter performance. Through six months, the group's operating income is $1.6 million.
"Our most recent quarterly performance should probably be viewed from several different perspectives," said President and Chief Executive Officer Mike Anderson. "First, it was the second best quarter in the company's entire 56-year history. Since our best-ever quarter was in the same three-month period of 2002, however, it shows up as a year-to-year decline. The most meaningful benchmark may well be that our April-June and first half results are at the upper end of the performance track that we've projected on several previous occasions."
The company will host a webcast on Thursday, July 24, 2003 at 11:00 A.M. EDT, to discuss its second 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/ajwz384660748gf12.html .
The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising and agricultural plant nutrients distribution. Its strong position in these basic 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 Income
(Unaudited)
Three Months ended Six months ended
(in thousands, except for per June 30 June 30
share amounts) 2003 2002 2003 2002
Sales and merchandising revenues $311,891 $301,098 $549,830 $515,929
Cost of sales and merchandising
revenues 263,911 251,557 467,614 430,039
Gross profit 47,980 49,541 82,216 85,890
Operating, administrative and
general expenses 34,869 35,219 67,307 67,335
Interest expense 2,213 2,573 4,516 5,286
Other income 1,114 838 2,215 1,630
Income before income taxes 12,012 12,587 12,608 14,899
Income taxes 4,164 3,827 4,371 4,530
Net income $7,848 $8,760 $8,237 $10,369
Per common share:
Basic earnings $1.10 $1.20 $1.15 $1.42
Diluted earnings $1.08 $1.17 $1.12 $1.39
Dividends paid $0.07 $0.065 $0.14 $0.13
Weighted average shares
outstanding-basic 7,130 7,299 7,155 7,294
Weighted average shares
outstanding-diluted 7,294 7,509 7,344 7,445
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
June 30 December 31 June 30
(in thousands) 2003 2002 2002
Assets
Current assets:
Cash and cash equivalents $14,573 $6,095 $7,072
Accounts receivable (net) and
margin deposits 62,780 59,800 67,537
Inventories 170,450 256,275 149,582
Other current assets 12,199 15,716 17,058
Total current assets 260,002 337,886 241,249
Other assets 14,369 12,591 10,953
Railcar assets leased to others (net) 29,695 26,399 31,577
Property, plant and equipment (net) 91,653 92,939 94,537
$395,719 $469,815 $378,316
Liabilities and shareholders' equity
Current liabilities:
Notes payable $60,000 $70,000 $41,800
Other current liabilities 115,576 187,056 126,599
Total current liabilities 175,576 257,056 168,399
Deferred items, long-term liabilities
and minority interest 24,068 23,647 19,911
Long-term debt 84,752 84,272 85,529
Shareholders' equity 111,323 104,840 104,477
$395,719 $469,815 $378,316
Segment Data
(Unaudited)
Quarter ended June 30, 2003
Agriculture Rail Processing Retail Other Total
Revenues
from
external
customers $207,503 $12,681 $37,130 $54,577 $ - $311,891
Other income 433 35 115 395 136 1,114
$207,936 $12,716 $37,245 $54,972 $ 136 $313,005
Operating
income
(loss) $8,091 $1,376 $ (33) $ 4,262 $ (1,684) $12,012
Quarter ended June 30, 2002
Revenues from
external
customers $209,197 $4,056 $32,283 $55,562 $ - $301,098
Other income 220 30 166 255 167 838
$209,417 $4,086 $32,449 $55,817 $ 167 $301,936
Operating
income
(loss) $9,522 $ 140 $ (113) $ 4,307 $ (1,269) $ 12,587
Six months ended June 30, 2003
Revenues from
external
customers $356,696 $17,063 $89,550 $86,521 $ - $549,830
Other income 976 85 318 533 303 2,215
$357,672 $17,148 $89,868 $87,054 $ 303 $552,045
Operating
income
(loss) $ 8,384 $ 1,680 $ 3,706 $ 1,639 $ (2,801) $ 12,608
Six months ended June 30, 2002
Revenues
from
external
customers $344,037 $ 8,216 $73,264 $90,412 $ - $515,929
Other income 487 33 289 374 447 1,630
$344,524 $ 8,249 $73,553 $90,786 $ 447 $517,559
Operating
income
(loss) $12,046 $ 520 $ 2,305 $ 2,568 $(2,540) $ 14,899
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417
Web site: http://www.andersonsinc.com/