NEWS RELEASEInvestor Relations Contact: Date: November 5, 2012
Nick Conrad
Phone: 419-891-6415
E-mail: nick_conrad@andersonsinc.com
THE ANDERSONS, INC. REPORTS THIRD QUARTER RESULTS
Third Quarter Earnings of $0.90 per Diluted Share
Rail Group Leads Earning Results
MAUMEE, OHIO, November 5, 2012-The Andersons, Inc. (NASDAQ: ANDE) today announced third quarter net income attributable to the company of $16.9 million, or $0.90 per diluted share, on revenues of $1.1 billion. In the third quarter of 2011, the company reported results of $10.9 million, or $0.59 per diluted share, on revenues of $939 million. For the first nine months of 2012, the company earned $64.5 million, or $3.43 per diluted share, on revenues of $3.6 billion. In the same period of 2011, The Andersons reported results of $73.4 million, or $3.92 per diluted share, on $3.3 billion of revenues.
The Rail Group achieved record third quarter operating income of $19.1 million on revenues of $60 million. In the same three month period of 2011, the group earned $1.1 million and revenues were $24 million. This quarter, the group recognized $13.5 million in gains on sales of railcars and related leases and non-recourse transactions (where the company continues to provide car management services to the purchaser and typically holds an option to purchase the railcars at the end of the assigned lease). In the third quarter of 2011, the company recognized a gain on similar transactions of $0.7 million. Gross profit from the leasing business was significantly higher due primarily to an increase in the average lease rate. The average utilization rate for the quarter was approximately 84 percent, which is down slightly from 85 percent last year. The rail fleet has increased to approximately 23,400 cars from 22,300 last year. The group's first nine months operating income was $34.3 million on $128 million of revenues. In 2011, operating income through September was $7.4 million and revenues were $82 million. These results include gains similar to those aforementioned of $22.2 million and $7.7 million in 2012 and 2011, respectively.
The Grain Group had operating income of $10.8 million in the third quarter of 2012 versus $8.3 million for the same period last year. The group benefited from an early harvest, which resulted in higher gross profit on sales in comparison to the prior year third quarter. Space income was down considerably, as expected. This was offset by record third quarter earnings from the company's investment in Lansing Trade Group. Revenues for the Grain Group were $677 million and $539 million for the third quarter of 2012 and 2011, respectively. Revenues increased primarily due to an increase in the bushels sold. The Grain Group's operating income for the first nine months of the year was $45.5 million on revenues of $2.1 billion. Last year, its operating income through September was $60.0 million on revenues of $2.0 billion. As announced last week, the group has entered into an agreement to purchase the majority of the grain and agronomy assets of Green Plains Grain Company, LLC, a subsidiary of Green Plains Renewable Energy, Inc. This acquisition includes seven facilities in Iowa and five in Tennessee, with a combined grain storage capacity of approximately 32 million bushels, which increases the group's storage capacity by nearly 30 percent. The Iowa locations also have 30 thousand tons of fertilizer storage space.
The Plant Nutrient Group's third quarter operating income was $0.8 million on revenues of $135 million. In the same three month period of 2011, the group had operating income of $6.6 million on revenues of $138 million. Margins in the third quarter were solid; however, in the prior year margins were significantly higher. The group's first nine months' operating income was $34.5 million on $619 million of revenues. Last year, its operating income through September was $35.8 million on revenues of $521 million. Increased revenues this year are due to both increased volume and higher selling prices.
The Ethanol Group had an operating loss of $0.9 million in the third quarter, compared to earnings of $4.4 million during the same period last year. The loss was primarily the result of a decrease in the company's earnings from its ethanol investment affiliates, whose income continues to be significantly impacted by lower ethanol margins that have resulted from increased corn costs and lower ethanol demand. Partially offsetting the group's lower margins are service income and income from co-products such as corn-oil, DDGs, E-85, and CO2. Total revenues for the quarter in 2012 and 2011 were $210 million and $179 million, respectively. Revenues were up due to the addition of the Denison, Iowa facility in May. The group's operating loss through September was $2.9 million on revenues of $528 million. Last year, its nine month operating income was $16.8 million on revenues of $477 million.
The Turf & Specialty Group had an operating loss of $1.6 million in the third quarter on $22 million of revenues. Last year, the group reported an operating loss of $1.2 million on $23 million of revenues for the same period. Through the first nine months of 2012, the group's operating income was $3.4 million on $110 million of revenues. Last year, its operating income was $3.8 million for the same period on revenues of $112 million.
The Retail Group had an operating loss of $1.8 million in the third quarter of 2012 on revenues of $35 million. In the comparable period last year, the group's operating loss was $1.2 million and total revenues were $36 million. Through nine months, the group recorded a loss of $3.1 million and total revenues of $110 million. Last year through September the group lost $2.0 million on total revenues of $112 million.
“We had a great quarter, due in a large part to the exceptional results seen in our Rail Group, which has had record results every quarter this year due to skillful management of its railcar assets,” CEO Mike Anderson stated. “We also had good results in the Grain Group, although some of its income has been accelerated due to the early harvest. The Grain Group's performance was impacted by record Lansing Trade Group earnings,” added Mr. Anderson. “Our expectations for the remainder of the year still remain tempered by the drought, which will continue to impact our grain and ethanol businesses through the first half of 2013. Our recent acquisitions and capital expansions, however, will pay dividends in the future. These include the acquisition of Mt. Pulaski Products, which was finalized last week, breaking ground on a new, state of the art, railcar blast and paint facility, the recent opening of our Anselmo, Nebraska grain elevator, and the previously mentioned Green Plains Grain Company, LLC acquisition. We will effectively manage through the 2012 drought, as we have to date, and will continue our focus on long term earnings growth,” concluded Mr. Anderson.
The company will host a webcast on Tuesday, November 6, 2012 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading “Investor” on its website at www.andersonsinc.com.
The Andersons, Inc. is a diversified company rooted in agriculture. Founded in Maumee, Ohio, in 1947, the company conducts business across North America in the grain, ethanol, and plant nutrient sectors, railcar leasing, turf and cob products, and consumer retailing.
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. 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 September 30, | Nine months ended September 30, | |||||||||||||
| (in thousands, except per share data) | 2012 | 2011 | 2012 | 2011 | ||||||||||
| Sales and merchandising revenues | $ | 1,138,402 | $ | 938,660 | $ | 3,591,369 | $ | 3,278,501 | ||||||
| Cost of sales and merchandising revenues | 1,060,086 | 873,696 | 3,324,533 | 3,012,080 | ||||||||||
| Gross profit | 78,316 | 64,964 | 266,836 | 266,421 | ||||||||||
| Operating, administrative and general expenses | 58,029 | 54,486 | 177,339 | 165,923 | ||||||||||
| Interest expense | 5,482 | 5,711 | 16,192 | 20,609 | ||||||||||
| Other income: | ||||||||||||||
| Equity in earnings of affiliates | 6,027 | 9,731 | 15,406 | 29,489 | ||||||||||
| Other income, net | 3,492 | 1,217 | 9,409 | 5,541 | ||||||||||
| Income before income taxes | 24,324 | 15,715 | 98,120 | 114,919 | ||||||||||
| Income tax provision | 9,133 | 4,484 | 36,730 | 40,265 | ||||||||||
| Net income | 15,191 | 11,231 | 61,390 | 74,654 | ||||||||||
| Net income (loss) attributable to the noncontrolling interests | (1,693 | ) | 306 | (3,100 | ) | 1,245 | ||||||||
| Net income attributable to The Andersons, Inc. | $ | 16,884 | $ | 10,925 | $ | 64,490 | $ | 73,409 | ||||||
| Per common share: | ||||||||||||||
| Basic earnings attributable to The Andersons, Inc. common shareholders | $ | 0.91 | $ | 0.59 | $ | 3.47 | $ | 3.96 | ||||||
| Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 0.90 | $ | 0.59 | $ | 3.43 | $ | 3.92 | ||||||
| Dividends paid | $ | 0.15 | $ | 0.11 | $ | 0.45 | $ | 0.33 | ||||||
The Andersons, Inc.
Consolidated Balance Sheets
(unaudited)
| (in thousands) | September 30, 2012 | December 31, 2011 | September 30, 2011 | ||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 80,370 | $ | 20,390 | $ | 38,510 | |||||
| Restricted cash | 160 | 18,651 | 11,920 | ||||||||
| Accounts receivable, net | 199,158 | 167,640 | 158,757 | ||||||||
| Inventories | 682,292 | 760,459 | 458,314 | ||||||||
| Commodity derivative assets - current | 166,264 | 83,950 | 143,010 | ||||||||
| Deferred income taxes | 20,627 | 21,483 | 17,233 | ||||||||
| Other current assets | 41,568 | 34,649 | 41,559 | ||||||||
| Total current assets | 1,190,439 | 1,107,222 | 869,303 | ||||||||
| Other assets: | |||||||||||
| Commodity derivative assets - noncurrent | 7,047 | 2,289 | 3,907 | ||||||||
| Other assets, net | 67,801 | 53,327 | 48,010 | ||||||||
| Equity method investments | 190,057 | 199,061 | 189,118 | ||||||||
| 264,905 | 254,677 | 241,035 | |||||||||
| Railcar assets leased to others, net | 252,702 | 197,137 | 183,346 | ||||||||
| Property, plant and equipment, net | 283,394 | 175,087 | 164,893 | ||||||||
| Total assets | $ | 1,991,440 | $ | 1,734,123 | $ | 1,458,577 | |||||
| Liabilities and equity | |||||||||||
| Current liabilities: | |||||||||||
| Borrowings under short-term line of credit | $ | 275,522 | $ | 71,500 | $ | 105,000 | |||||
| Accounts payable for grain | 250,066 | 391,905 | 77,813 | ||||||||
| Other accounts payable | 204,347 | 142,762 | 137,872 | ||||||||
| Customer prepayments and deferred revenue | 77,278 | 79,557 | 82,785 | ||||||||
| Commodity derivative liabilities – current | 43,589 | 15,874 | 55,354 | ||||||||
| Accrued expenses and other current liabilities | 53,631 | 60,445 | 49,487 | ||||||||
| Current maturities of long-term debt | 32,655 | 32,208 | 45,171 | ||||||||
| Total current liabilities | 937,088 | 794,251 | 553,482 | ||||||||
| Other long-term liabilities | 14,083 | 43,014 | 35,421 | ||||||||
| Commodity derivative liabilities – noncurrent | 590 | 1,519 | 6,903 | ||||||||
| Employee benefit plan obligations | 49,478 | 52,972 | 30,132 | ||||||||
| Long-term debt, less current maturities | 312,404 | 238,885 | 235,729 | ||||||||
| Deferred income taxes | 75,377 | 64,640 | 64,841 | ||||||||
| Total liabilities | 1,389,020 | 1,195,281 | 926,508 | ||||||||
| Total equity | 602,420 | 538,842 | 532,069 | ||||||||
| Total liabilities and equity | $ | 1,991,440 | $ | 1,734,123 | $ | 1,458,577 | |||||
The Andersons, Inc.
Segment Data
| Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
| Quarter ended September 30, 2012 | ||||||||||||||||||||||||
| Revenues from external customers | $ | 677,484 | $ | 209,634 | $ | 135,144 | $ | 59,703 | $ | 21,509 | $ | 34,928 | $ | — | $ | 1,138,402 | ||||||||
| Gross profit | 21,166 | 3,846 | 15,297 | 22,892 | 5,296 | 9,819 | — | 78,316 | ||||||||||||||||
| Equity in earnings (loss) of affiliates | 9,249 | (3,224 | ) | 2 | — | — | — | — | 6,027 | |||||||||||||||
| Other income, net | 526 | 1 | 523 | 1,695 | 181 | 117 | 449 | 3,492 | ||||||||||||||||
| Income (loss) before income taxes | 10,807 | (2,629 | ) | 759 | 19,071 | (1,571 | ) | (1,769 | ) | (344 | ) | 24,324 | ||||||||||||
| Loss attributable to the noncontrolling interests | — | (1,693 | ) | — | — | — | — | — | (1,693 | ) | ||||||||||||||
| Operating income (loss) (a) | $ | 10,807 | $ | (936 | ) | $ | 759 | $ | 19,071 | $ | (1,571 | ) | $ | (1,769 | ) | $ | (344 | ) | $ | 26,017 | ||||
| Quarter ended September 30, 2011 | ||||||||||||||||||||||||
| Revenues from external customers | $ | 538,723 | $ | 179,331 | $ | 137,637 | $ | 24,067 | $ | 23,051 | $ | 35,851 | $ | — | $ | 938,660 | ||||||||
| Gross profit | 20,757 | 3,079 | 20,977 | 5,180 | 4,714 | 10,257 | — | 64,964 | ||||||||||||||||
| Equity in earnings of affiliates | 6,459 | 3,270 | 2 | — | — | — | — | 9,731 | ||||||||||||||||
| Other income (expense), net | 652 | 38 | 282 | 604 | 167 | 130 | (656 | ) | 1,217 | |||||||||||||||
| Income (loss) before income taxes | 8,313 | 4,749 | 6,622 | 1,123 | (1,245 | ) | (1,233 | ) | (2,614 | ) | 15,715 | |||||||||||||
| Income attributable to the noncontrolling interest | — | 306 | — | — | — | — | — | 306 | ||||||||||||||||
| Operating income (loss) (a) | $ | 8,313 | $ | 4,443 | $ | 6,622 | $ | 1,123 | $ | (1,245 | ) | $ | (1,233 | ) | $ | (2,614 | ) | $ | 15,409 | |||||
| Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
| Nine months ended September 30, 2012 | ||||||||||||||||||||||||
| Revenues from external customers | $ | 2,096,256 | $ | 528,062 | $ | 619,301 | $ | 127,608 | $ | 110,481 | $ | 109,661 | $ | — | $ | 3,591,369 | ||||||||
| Gross profit | 80,207 | 8,544 | 78,272 | 47,020 | 20,785 | 32,008 | — | 266,836 | ||||||||||||||||
| Equity in earnings (loss) of affiliates | 22,706 | (7,305 | ) | 5 | — | — | — | — | 15,406 | |||||||||||||||
| Other income, net | 1,842 | 37 | 1,651 | 3,295 | 671 | 396 | 1,517 | 9,409 | ||||||||||||||||
| Income (loss) before income taxes | 45,519 | (6,020 | ) | 34,540 | 34,288 | 3,384 | (3,090 | ) | (10,501 | ) | 98,120 | |||||||||||||
| Loss attributable to the noncontrolling interests | — | (3,100 | ) | — | — | — | — | — | (3,100 | ) | ||||||||||||||
| Operating income (loss) (a) | $ | 45,519 | $ | (2,920 | ) | $ | 34,540 | $ | 34,288 | $ | 3,384 | $ | (3,090 | ) | $ | (10,501 | ) | $ | 101,220 | |||||
| Nine months ended September 30, 2011 | ||||||||||||||||||||||||
| Revenues from external customers | $ | 1,973,820 | $ | 476,783 | $ | 521,109 | $ | 82,478 | $ | 111,872 | $ | 112,439 | $ | — | $ | 3,278,501 | ||||||||
| Gross profit | 103,529 | 12,373 | 78,312 | 18,712 | 20,458 | 33,037 | — | 266,421 | ||||||||||||||||
| Equity in earnings of affiliates | 18,117 | 11,366 | 6 | — | — | — | — | 29,489 | ||||||||||||||||
| Other income (expense), net | 1,754 | 133 | 541 | 2,198 | 716 | 430 | (231 | ) | 5,541 | |||||||||||||||
| Income (loss) before income taxes | 59,955 | 18,089 | 35,813 | 7,432 | 3,811 | (2,020 | ) | (8,161 | ) | 114,919 | ||||||||||||||
| Income attributable to the noncontrolling interest | — | 1,245 | — | — | — | — | — | 1,245 | ||||||||||||||||
| Operating income (loss) (a) | $ | 59,955 | $ | 16,844 | $ | 35,813 | $ | 7,432 | $ | 3,811 | $ | (2,020 | ) | $ | (8,161 | ) | $ | 113,674 | ||||||
(a) Operating income (loss) for each operating segment is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income.