The Andersons, Inc. 480 W. Dussel Drive Maumee, Ohio 43537
FOR IMMEDIATE RELEASE AT THE COMPANY: Gary Smith (419) 891 — 6417 WEDNESDAY, AUGUST 1, 2007
THE ANDERSONS, INC. REPORTS RECORD INCOME EPS OF $1.40 FOR SECOND QUARTER
Grain & Ethanol and Plant Nutrient Businesses Lead Earnings Growth
MAUMEE, OHIO, AUGUST 1, 2007—The Andersons, Inc. (Nasdaq: ANDE), today announced that its second-quarter and first-half net income and per-share earnings established new records for the company, more than doubling its best previous performances. Net income was $25.5 million, or $1.40 per diluted share in the second quarter this year, and total revenues were $634 million. In the same three-month period of 2006, the company reported net income of $10.3 million, or $0.66 per diluted share, on $378 million of revenues. For the first six months of 2007, the company’s net income was $34.7 million, or $1.90 per diluted share, on revenues of $1.04 billion. In the first half of 2006, The Andersons earned $14.2 million, or $0.90 per diluted share, on revenues of $659 million.
The company’s Grain & Ethanol Group achieved operating income of $12.0 million in the most recent quarter, significantly above the $1.9 million it earned in the second quarter of 2006. Total revenues were $324 million for the period. This included $57 million of ethanol sales made by the group in accordance with marketing agreements between the company and its ethanol joint ventures. In the second quarter of 2006, the group’s total revenues were $149 million. Grain benefited from improved storage income and fee income for originating corn for ethanol companies, including those in which it is a significant investor. Ethanol also achieved income growth during the most recent quarter. The Albion, Michigan plant, which commenced production of ethanol during the second half of last year, was in operation throughout the second quarter this year, and the plant in Clymers, Indiana began production of ethanol this spring. Second-quarter income from the group’s investment in the Lansing Trade Group LLC was lower this year. Through the first six months of 2007, the Grain & Ethanol Group’s operating income was $22.2 million, or $18.5 million higher than the first half of 2006. Total year-to-date revenues this year were $568 million. In 2006, the group’s first half revenues were $277 million.
The Rail Group’s operating income of $6.9 million in the second quarter of 2007 was $1.9 million more than it achieved in the same three-month period a year ago. Revenues of $42 million for the quarter were up $14 million. The group’s railcar fleet increased by about 16 percent from its June 2006 total. However, its utilization rate (the percentage of the fleet’s railcars in service at the end of the period) decreased somewhat from a year ago. Including some gains from railcar sales made during the second quarter, operating income in the group’s leasing business was higher than its year-earlier results, but its railcar repair and manufacturing businesses experienced lower operating income in total for the quarter. The group’s first half operating income this year was $9.9 million on $68 million of revenues. In 2006, operating income through the first six months was $11.2 million and revenues amounted to $62 million.
The Plant Nutrient Group achieved operating income of $17.1 million in the second quarter of 2007 on $183 million of revenues. The application of nutrients in conjunction with the planting of agricultural crops throughout the U.S. each spring makes the second quarter the key selling season for this group. This was especially true this year. A large increase in U.S. corn acreage this spring helped the group achieve by far its best-ever quarterly operating income. In 2006, the group’s operating income was $5.0 million for the quarter, on $113 million of revenues. The group’s first half operating income this year was $17.5 million on $249 million of revenues. Last year, its operating income through the first six months was $3.8 million and revenues amounted to $159 million.
The Turf & Specialty Group had operating income of $0.7 million in the second quarter this year on $30 million of revenues. Last year, it reported $1.3 million of income and $33 million of revenues for the period. Turf products tonnage was lower in the second quarter this year due to relatively dry weather throughout much of the country which curtailed sales of some formulated products. While raw material prices remained high by historical standards, average lawn products gross margins increased slightly as a result of several new value-added products. Through the first half of 2007, the group’s operating income was $2.5 million on $67 million of revenues. Last year, its operating income was $3.5 million for the same period, and revenues amounted to $73 million.
The Retail Group reported total revenues of $55 million for the most recent quarter. Same-store sales were down 2.9 percent for the period. Sales of some lawn & garden products were clearly impacted by the dry weather this spring. For this three-month period, the group achieved operating income of $3.6 million. In the comparable period last year, the group’s operating income was $4.2 million with revenues of $55 million. The group’s six-months to-date operating income this year was $1.3 million on $89 million of revenues. Last year, operating income through June was $1.7 million, and total revenues stood at $87 million.
“Our second-quarter and first-half results are gratifying,” said President and Chief Executive Officer Mike Anderson. “The entire Plant Nutrient team did an excellent job in responding to unprecedented market demand this spring, our Grain & Ethanol businesses continued to achieve significant income growth, and we were again able to expand our railcar fleet.”
Mr. Anderson also stated, “In mid-June it became apparent that the spring season in our agriculture-related businesses was stronger than we had expected, and we had also begun production of ethanol at the Clymers, Indiana plant which had been under construction for the past year. As a result, we announced that our full-year earnings outlook had improved. While there are still a couple of months left in the growing season this year, and it has been drier than normal in parts of our eastern corn belt region, we now believe that our 2007 full-year earnings will be within a range from $2.90 to $3.15 per diluted share.”
The company will host a webcast on Thursday, August 2, 2007 at 11:00 A.M. ET, to discuss its performance and full year outlook. This can be accessed under the heading “Investor Relations” on its website atwww.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 equipment 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 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 atwww.andersonsinc.com
FINANCIAL TABLES FOLLOW . . .
The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months ended
Six Months ended
June 30
June 30
(in thousands, except for per share amounts)
2007
2006
2007
2006
Sales and merchandising revenues
$
634,214
$
378,109
$
1,040,717
$
658,767
Cost of sales and merchandising revenues
559,601
323,342
920,083
563,729
Gross profit
74,613
54,767
120,634
95,038
Operating, administrative and general expenses
42,477
38,581
82,097
75,273
Interest expense
4,190
4,501
9,212
8,695
Other income / gains:
Equity in earnings of affiliates
3,916
2,209
6,748
5,762
Other income, net
7,068
2,352
16,941
5,411
Minority interest in net loss / (income) of subsidiary
433
—
516
—
Income before income taxes
39,363
16,246
53,530
22,243
Income taxes
13,875
5,899
18,803
8,061
Net income
$
25,488
$
10,347
$
34,727
$
14,182
Per common share:
Basic earnings
$
1.43
$
0.68
$
1.96
$
0.94
Diluted earnings
$
1.40
$
0.66
$
1.90
$
0.90
Dividends paid
$
0.0475
$
0.045
$
0.0950
$
0.0875
Weighted average shares outstanding-basic
17,792
15,220
17,761
15,155
Weighted average shares outstanding-diluted
18,245
15,776
18,260
15,728
1
The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
June 30
December 31
June 30
(in thousands)
2007
2006
2006
Assets
Current assets:
Cash and cash equivalents
$
28,945
$
23,398
$
15,474
Restricted cash
3,756
3,801
3,836
Accounts receivable (net)
138,451
87,698
87,152
Margin deposits (net)
27,139
15,273
7,133
Inventories
215,925
296,457
174,310
Commodity derivative assets — current
47,634
85,338
5,686
Other current assets
26,307
33,325
24,623
Total current assets
488,157
545,290
318,214
Investments and other assets
106,477
72,335
64,344
Commodity derivative assets
27,169
20,862
11,192
Railcar assets leased to others (net)
146,567
145,059
136,271
Property, plant and equipment (net)
99,117
95,502
91,355
$
867,487
$
879,048
$
621,376
Liabilities and shareholders’ equity
Current liabilities:
Short-term borrowings
$
77,000
$
75,000
$
51,600
Commodity derivative liabilities — current
39,481
43,173
9,562
Other current liabilities
215,196
265,040
169,723
Total current liabilities
331,677
383,213
230,885
Deferred items and other long-term liabilities
40,147
41,267
33,683
Commodity derivative liability
26,002
26,531
11,066
Long-term debt non-recourse
64,382
71,624
82,529
Long-term debt
87,150
86,238
88,862
Minority interest
13,120
—
-
Shareholders’ equity
305,009
270,175
174,351
$
867,487
$
879,048
$
621,376
2
Segment Data
Grain &
Plant
Turf &
Ethanol
Rail
Nutrient
Specialty
Retail
Other
Total
Quarter ended June 30, 2007
Revenues from external customers
$
323,580
$
42,445
$
182,908
$
30,394
$
54,887
$
—
$
634,214
Gross Profit
16,161
12,771
23,391
5,167
17,123
—
74,613
Other income / Equity in earnings of affiliates
7,454
431
300
133
158
2,508
10,984
Operating income (loss)
11,981
6,902
17,117
706
3,616
(959
)
39,363
Quarter ended June 30, 2006
Revenues from external customers
$
148,763
$
27,836
$
113,308
$
33,428
$
54,774
$
—
$
378,109
Gross Profit
10,304
11,883
10,110
5,628
16,842
—
54,767
Other income / Equity in earnings of affiliates
2,363
195
332
155
268
1,248
4,561
Operating income (loss)
1,923
4,999
5,041
1,344
4,155
(1,216
)
16,246
Six months ended June 30, 2007
Revenues from external customers
$
567,523
$
68,361
$
249,468
$
66,698
$
88,667
$
—
$
1,040,717
Gross Profit
31,581
22,036
28,816
11,238
26,963
—
120,634
Other income / Equity in earnings of affiliates
16,268
522
456
195
318
5,930
23,689
Operating income (loss)
22,151
9,910
17,548
2,506
1,329
86
53,530
Six months ended June 30, 2006
Revenues from external customers
$
277,388
$
62,219
$
159,341
$
72,933
$
86,886
$
—
$
658,767
Gross Profit
17,249
24,761
14,243
12,263
26,522
—
95,038
Other income / Equity in earnings of affiliates
8,004
315
433
518
432
1,471
11,173
Operating income (loss)
3,703
11,217
3,806
3,493
1,714
(1,690
)
22,243
3
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.
