Press Releases
The Andersons, Inc.
The Agriculture Group achieved an operating income of $0.3 million for the quarter. In the third quarter of 2003, the group incurred an operating loss of $2.8 million. Revenues of $169 million in this year's third quarter were $9 million lower than a year ago. Third quarter revenues in the group's grain business were lower this year because of fewer bushels sold during the period. However, increased bushel receipts and higher average gross margins fueled gross profit growth and income improvement. The group's plant nutrient business also achieved gross profit and operating income improvement in the third quarter with increased fertilizer shipments and higher average gross margins. The Agriculture Group's operating income for the first nine months of 2004 amounted to $9.7 million, an increase of $5.6 million from the same period in 2003. Total revenues of $622 million for the nine-month period were $86 million higher than a year ago. At this time, the fall harvest is in full swing, and the USDA is predicting that U.S. farmers will realize record corn and soybean yields and production totals. The company also indicated that it is evaluating the possibility of investing in an ethanol production facility at one of several possible locations in its region.
The Rail Group's July - September 2004 performance far outpaced its prior year results. Operating income of $4.9 million in the third quarter this year was $4.2 million higher than the same three-month period of 2003. Total revenues of $19.4 million were $10.1 million higher than last year. Continued improvement in lease rates during the period contributed to this strong performance as did a $2.5 million year-to-year increase in gross profit on car sales. Through the first nine months of 2004, the group has achieved operating income of $8.2 million on revenues of $43.6 million. In the same period last year, income was $2.4 million on $26.3 million of revenues.
The Processing Group incurred an operating loss of $1.9 million in the third quarter this year. This was $0.7 million higher than the operating loss experienced in the same three-month period of 2003. Total revenues of $20.8 million were $2.7 million below last year. The third quarter is typically a loss period for this group's highly seasonal lawn fertilizer business. Through the first nine months of 2004, the group has achieved operating income of $2.4 million on $106 million of revenues. In the first nine months last year, the group had earned $2.6 million, and revenues amounted to $113 million. Although average gross margins have improved this year due to product mix improvements, volumes declined somewhat because of unfavorable weather patterns during the important lawn and garden season this spring. Noting recent escalation in some energy-related raw material costs, the company indicated that the Processing Group may also fall short of last year's better than normal fourth quarter volume and profitability levels.
The Retail Group's sales of $41.1 million in the third quarter were 1.9 percent below the same three-month period in 2003. Food-related product categories continued to achieve growth vs. prior-year levels, but home center products, especially lawn and garden categories, were down. In addition, labor and utility costs were higher than a year ago. As a result, the group's operating loss widened from $0.1 million in 2003, to $0.2 million in the third quarter this year. Through the first nine months of the year, the group has earned operating income of $1.2 million, or $0.4 million less than it did during the same period of 2003. Total revenues for the Retail Group year-to- date through September are $130 million, 1.4 percent above last year.
"The third quarter has traditionally been a loss period because of the seasonality in several of our businesses, so achieving net income in excess of a million dollars in the third quarter this year is gratifying," said President and Chief Executive Officer Mike Anderson. "During the quarter, when we saw that the Rail and Agriculture businesses were exceeding our performance expectations, we revised our full-year earnings per diluted share guidance upward. Now in the first week of November, the harvest is progressing well, fall fertilizer sales look promising, and the rail business remains strong. Although lawn fertilizer raw material costs have escalated and retail sales remain soft, I believe that the $1.80 to $2.05 full-year earnings guidance we issued in September is still appropriate."
The company will host a webcast on Thursday, November 4, 2004 at 11:00 A.M. EST, to discuss its third quarter performance and full-year outlook. This can be accessed under the heading "Financial Information" on its website at http://www.andersonsinc.com/ or at http://www.firstcallevents.com/service/ajwz410288278gf12.html .
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. Total revenues in 2003 exceeded $1.2 billion.
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 http://www.andersonsinc.com/
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended Nine months ended
(in thousands, except for per September 30 September 30
share amounts) 2004 2003 2004 2003
Sales and merchandising revenues $250,682 $253,027 $901,631 $803,828
Cost of sales and merchandising
revenues 209,942 222,789 768,761 692,978
Gross profit 40,740 30,238 132,870 110,850
Operating, administrative and
general expenses 38,801 33,748 111,680 101,055
Interest expense 2,470 1,603 7,874 6,119
Other income 1,892 1,519 4,122 3,816
Income before income taxes 1,361 (3,594) 17,438 7,492
Income taxes 313 (1,246) 6,574 2,528
Net income $1,048 $(2,348) $10,864 $4,964
Per common share:
Basic earnings $0.14 $(0.33) $1.50 $0.70
Diluted earnings $0.14 $(0.33) $1.45 $0.68
Dividends paid $0.075 $0.075 $0.23 $0.225
Weighted average shares
outstanding-basic 7,240 7,106 7,231 7,139
Weighted average shares
outstanding-diluted 7,473 7,106 7,474 7,311
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
September 30 December 31 September 30
(in thousands) 2004 2003 2003
Assets
Current assets:
Cash and cash equivalents $8,138 $6,444 $3,964
Restricted cash 1,730 - -
Accounts receivable (net) and
margin deposits 63,520 68,546 71,092
Inventories 204,485 259,755 184,049
Other current assets 21,404 22,234 16,794
Total current assets 299,277 356,979 275,899
Other assets 20,662 13,702 14,915
Railcar assets leased to others (net) 100,259 29,489 26,979
Property, plant and equipment (net) 93,933 92,449 91,716
$514,131 $492,619 $409,509
Liabilities and shareholders' equity
Current liabilities:
Notes payable $10,600 $48,000 $80,000
Other current liabilities 191,046 219,447 113,273
Total current liabilities 201,646 267,447 193,273
Deferred items and other long-term
liabilities 30,907 27,254 24,105
Long-term debt non-recourse 67,121 - -
Long-term debt 88,877 82,127 83,241
Shareholders' equity 125,580 115,791 108,890
$514,131 $492,619 $409,509
Segment Data
Agriculture Rail Processing
Quarter ended September 30, 2004
Revenues from external customers $169,395 $19,385 $20,819
Gross Profit 15,719 9,464 4,162
Other income 1,114 183 314
Operating income (loss) 269 4,866 (1,859)
Quarter ended September 30, 2003
Revenues from external customers 178,377 9,252 23,522
Gross Profit 11,413 3,087 4,411
Other income 647 128 464
Operating income (loss) (2,828) 693 (1,139)
Nine months ended September 30, 2004
Revenues from external customers 621,796 43,598 106,076
Gross Profit 56,626 21,398 17,527
Other income 2,411 336 453
Operating income (loss) 9,680 8,207 2,371
Nine months ended September 30, 2003
Revenues from external customers 536,044 26,315 113,072
Gross Profit 48,138 8,587 18,051
Other income 1,705 213 782
Operating income (loss) 4,034 2,373 2,567
Segment Data
Retail Other Total
Quarter ended September 30, 2004
Revenues from external customers $41,083 $- $250,682
Gross Profit 11,666 - 41,011
Other income 131 150 1,892
Operating income (loss) (232) (1,683) 1,361
Quarter ended September 30, 2003
Revenues from external customers 41,876 - 253,027
Gross Profit 11,327 - 30,238
Other income 156 124 1,519
Operating income (loss) (65) (255) (3,594)
Nine months ended September 30, 2004
Revenues from external customers 130,161 - 901,631
Gross Profit 37,590 - 133,141
Other income 541 381 4,122
Operating income (loss) 1,157 (3,977) 17,438
Nine months ended September 30, 2003
Revenues from external customers 128,397 - 803,828
Gross Profit 36,074 - 110,850
Other income 689 427 3,816
Operating income (loss) 1,574 (3,056) 7,492
SOURCE: The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., +1-419-891-6417