MAUMEE, Ohio, July 28 /PRNewswire-FirstCall/ — The Andersons, Inc. (Nasdaq: ANDE), today announced second-quarter net income of $10.3 million, or $0.66 per diluted share, and total revenues of $378 million. In the same three-month period of 2005, the company reported net income of $10.4 million, or $0.67 per diluted share, on $365 million of revenues. For the first six months of 2006, the company’s net income was $14.2 million, or $0.90 per diluted share, on revenues of $659 million. These first half net income and per share earnings established new records for the company. In the first half of 2005, The Andersons earned $11.4 million, or $0.74 per diluted share, on revenues of $624 million. All of the earnings per share data have been adjusted to reflect the June 28, 2006 2-for-1 stock split.
The Grain & Ethanol Group’s second-quarter operating income of $1.9 million was $3.3 million better than its year earlier result. Total revenues of $149 million for the period were $16 million higher than the second quarter of 2005. The number of bushels handled by the group’s elevators was higher than the prior period, and average gross sales margins were also higher. Although space income was lower than last year in the second quarter, total gross profit increased. The group’s investment in its commodity trading affiliate, Lansing Trade Group, LLC, also achieved earnings growth in the most recent three-month period. Through the first half of 2006, the Grain & Ethanol Group achieved operating income of $3.7 million. In the same period last year, operating income was $0.4 million. During the past year, the group has invested in three limited liability companies which are constructing ethanol production facilities in Michigan and Indiana. The Andersons is a significant investor in two of these projects and will provide general management, ethanol and DDGS marketing, and risk management services to them and offers these services to other ethanol producers as well. The plant located in Albion, Michigan, is scheduled to begin production in August. The Grain & Ethanol Group’s second quarter results include the impact of employee recruiting, training and some other pre-opening expenses associated with the ethanol business. The group has also recently announced its intent to form a joint venture with Marathon Oil to build and operate additional ethanol facilities.
The Rail Group’s operating income of $5.0 million in the second quarter of 2006 was $1.2 million higher than it earned in the same three-month period a year ago. Revenues of $28 million for the quarter were $10 million higher than the prior period. The group’s railcar fleet utilization rate (the percentage of the fleet in service at the end of the period) has also increased over time. At the end of June 2006 it stood at 95 percent. The group realized some gains from the sale of railcars and related leases during the quarter, and income from the leasing business in total improved versus the prior year. Operating income from the group’s railcar repair and manufacturing businesses was also higher in the second quarter. In the first half of 2006, the group achieved revenues of $62 million and $11.2 million of operating income. Last year, it reported revenues of $35 million and operating income of $7.4 million for the first half of 2005.
The Plant Nutrient Group had revenues of $113 million and operating income of $5.0 million in the second quarter this year. It earned $10.3 million on $120 million of revenues during the same three-month period of 2005. With much higher energy and nutrient input costs, the company believes that farmers have reduced the amount of nutrients applied to their fields this year, essentially keeping spending in line with last year. With volume and average gross margins both down, the group’s second-quarter gross profit declined significantly from last year. Through the first half of 2006, the group’s operating income was $3.8 million on $159 million of revenues. In the same period last year, operating income amounted to $9.5 million on $164 million of revenues.
The Turf and Specialty Group continued to achieve improved results during the most recent quarter. For the period, the group’s operating income was $1.3 million on $33 million of revenues. In 2005, it earned $0.4 million of operating income in the second quarter on $40 million of revenues. The group’s lawn and cob products businesses both contributed to this improvement. Through the first six months of this year, the group has reported operating income of $3.5 million and revenues of $73 million. In the first half of 2005, the group had revenues of $81 million and $1.5 million of income. During the past year, this group has restructured its businesses, reduced costs, improved operating efficiency, and focused on the products and markets where it can add the most value, which has allowed the group to increase profitability in spite of reduced revenue.
The Retail Group reported revenues of $55 million for the second quarter of 2006, an increase of 0.7 percent in same-store sales from the same period in 2005. With higher gross profit generated by the increase in sales, and a slight reduction in expenses, the group’s operating income was $4.2 million for the quarter, about $0.3 million above the same period last year. For the first half of the year, the group generated revenues of $87 million and operating income of $1.7 million. In the first half of 2005, it also had operating income of $1.7 million but slightly higher revenues of $89 million.
President and Chief Executive Officer Mike Anderson reports that “for the following reasons, I believe the company’s earnings prospects for the 2006 calendar year have strengthened versus earlier forecasts.” Mr. Anderson explains: “We’re about to begin production of ethanol at the new plant in Albion, Michigan ahead of schedule, and ethanol economics are stronger now than our earlier projections envisioned. In addition, the prospects for an excellent grain harvest in our region are even better now than we thought earlier, we continue to achieve growth in our rail business, our turf and specialty business is performing better than anticipated, and our investment in Lansing Trade Group is doing very well. Our estimate of the business interruption insurance settlement related to the accident at one of our elevators last year is also higher now that more specific data is available. The guidance we issued in early May, adjusted for the subsequent stock split, indicated that we expected to earn $1.70 to $1.90 per diluted share this year. While there is still a lot of time left in the growing season, and several other things such as the ethanol plant launch have to be executed well, it now appears that a range of $1.90 to $2.10 for our full-year earnings per share is a reasonable expectation. These per share estimates do not take into account the pending issuance of additional shares pursuant to our announced stock offering, which is not yet final. We will, of course, continue to evaluate our earnings projections as we progress through the year.”
The company will host a webcast today at 2:00 P.M. ET, to discuss its second-quarter performance and full-year outlook. This can be accessed under the heading “Investor Relations” on its website at http://www.andersonsinc.com.
The Andersons, Inc. is a diversified company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar leasing and repair, turf products production and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now has operations in seven U.S. states plus rail leasing interests in Canada and Mexico.
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 have been based are reasonable, it can give no assurance that these assumptions and the forward-looking statements will prove to be correct.
The Andersons, Inc. is located on the Internet at http://www.andersonsinc.com
The Andersons, Inc.
Consolidated Statements of Income
Three Months ended
Six Months ended
June 30
June 30
(in thousands, except for per share amounts)
2006
2005
2006
2005
Sales and merchandising revenues
$
378,109
$
365,117
$
658,767
$
623,773
Cost of sales and merchandising revenues
323,342
312,099
563,729
530,796
Gross profit
54,767
53,018
95,038
92,977
Operating, administrative and general expenses
38,581
35,855
75,273
72,756
Interest expense
4,501
3,191
8,695
6,141
Other income, net
2,352
1,430
5,411
2,509
Equity in earnings of affiliates
2,209
14
5,762
460
Income before income taxes
16,246
15,416
22,243
17,049
Income tax provision
5,899
5,063
8,061
5,662
Net Income
$
10,347
$
10,353
$
14,182
$
11,387
Per common share:
Basic earnings
$
0.68
$
0.70
$
0.94
$
0.77
Diluted earnings
$
0.66
$
0.67
$
0.90
$
0.74
Dividends paid
$
0.045
$
0.040
$
0.0875
$
0.080
Weighted average shares outstanding-basic
15,220
14,798
15,155
14,772
Weighted average shares outstanding-diluted
15,776
15,392
15,728
15,340
Consolidated Balance Sheets
(Unaudited)
June 30
December 31
June 30
(in thousands)
2006
2005
2005
Assets
Current assets:
Cash and cash equivalents
$
15,474
$
13,876
$
7,864
Restricted cash
3,836
3,936
1,435
Accounts receivable (net) and margin deposits
95,927
83,291
91,025
Inventories
168,918
240,806
182,405
Other current assets
24,623
30,632
16,177
Total current assets
308,778
372,541
298,906
Investments and other assets
64,344
39,008
18,928
Railcar assets leased to others (net)
136,271
131,097
134,450
Property, plant and equipment (net)
91,355
91,498
91,678
$
600,748
$
634,144
$
543,962
Liabilities and shareholders’ equity
Current liabilities:
Short-term borrowings
$
51,600
$
12,400
$
69,900
Other current liabilities
169,723
263,922
151,884
Total current liabilities
221,323
276,322
221,784
Deferred items and other long-term liabilities
33,683
30,896
29,233
Long-term debt non-recourse
82,529
88,714
59,333
Long-term debt
88,862
79,329
89,105
Shareholders’ equity
174,351
158,883
144,507
$
600,748
$
634,144
$
543,962
Segment Data
Grain &
Plant
Turf &
Ethanol
Nutrient
Rail
Specialty
Retail
Other
Total
Quarter ended June 30, 2006
Revenues from external customers
$
148,763
$
113,308
$
27,836
$
33,428
$
54,774
$
—
$
378,109
Gross Profit
10,304
10,110
11,883
5,628
16,842
—
54,767
Other income / Equity in earnings of affiliates
2,363
332
195
155
268
1,248
4,561
Operating income (loss)
1,923
5,041
4,999
1,344
4,155
(1,216
)
16,246
Quarter ended June 30, 2005
Revenues from external customers
132,648
119,914
17,673
40,464
54,418
—
365,117
Gross Profit
7,339
15,598
8,589
4,823
16,669
—
53,018
Other income / Equity in earnings of affiliates
144
285
356
139
245
275
1,444
Operating income (loss)
(1,381
)
10,295
3,799
412
3,843
(1,552
)
15,416
Six months ended June 30, 2006
Revenues from external customers
277,388
159,341
62,219
72,933
86,886
—
658,767
Gross Profit
17,249
14,243
24,761
12,263
26,522
—
95,038
Other income / Equity in earnings of affiliates
8,004
433
315
518
432
1,471
11,173
Operating income (loss)
3,703
3,806
11,217
3,493
1,714
(1,690
)
22,243
Six months ended June 30, 2005
Revenues from external customers
253,585
163,985
35,378
81,355
89,470
—
623,773
Gross Profit
17,538
21,180
17,104
10,681
26,474
—
92,977
Other income / Equity in earnings of affiliates
825
512
541
307
377
407
2,969
Operating income (loss)
357
9,508
7,439
1,489
1,745
(3,489
)
17,049
SOURCE The Andersons, Inc.
CONTACT: Gary Smith of The Andersons, Inc., 1-419-891-6417
Web site: http://www.andersonsinc.com /
(ANDE)
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
