The Andersons, Inc. Reports First Quarter Results First Quarter Earnings of $0.80 per Diluted Share

Ethanol and Rail Groups Lead Earning Results

MAUMEE, Ohio, May 7, 2014 /PRNewswire/ -- The Andersons, Inc. (Nasdaq: ANDE) announced first quarter net income attributable to the company of $22.7 million, or $0.80 per diluted share, on revenues of $1.0 billion.  In the same three month period of 2013, the company reported results of $12.6 million, or $0.45 per diluted share, on $1.3 billion of revenues.

The Ethanol Group achieved record operating income of $19.8 million in the first quarter.  This compares to $2.5 million earned during the same period of 2013.  The higher income is primarily due to improved performance of the ethanol limited liability company investments, which benefited from strong ethanol margins.  Ethanol margins during the first quarter were impacted by low U.S. ethanol stocks, accompanied by improving domestic and export demand.  The Ethanol Group also benefitted from improved production rates, ongoing service fees, and increased co-product sales of corn oil, E-85, and distillers dried grains.  Total revenues for the quarter were $189 million.  In comparison, the group's revenues for the same period last year were $199 million.      

The Rail Group had record first quarter operating income of $15.0 million on revenues of $52 million.  In the same three month period of 2013, the group earned $14.6 million and revenues were $46 million.  The group's revenue and income benefited from higher lease rates and increased income from car sales.  The group recognized $10.8 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions in the first quarter, which is approximately $1.0 million more than the prior year.  The average utilization rate for the quarter was 88.4 percent in comparison to 84.6 percent for the same period last year.  

The Grain Group reported first quarter operating income of $11.3 million in comparison to $8.3 million for the same period of the prior year.  Included in this year's results is a pre-tax gain of $17.1 million from the partial sale of its Lansing Trade Group holdings.  At the time of the sale the group reduced its ownership percentage, on a fully diluted basis, to approximately 39.2 percent, whereas previously it held approximately a 47.5 percent ownership interest in Lansing. The Grain Group's earnings from operations were a loss this quarter due in part to significantly lower space income, which was the result of less carry in the corn market and significantly reduced wheat inventory.  The group's earnings from its equity investments were also significantly reduced.   First quarter revenues for the Grain Group were $583 million and $836 million for 2014 and 2013, respectively.  Revenues decreased primarily due to lower grain prices, which decreased almost 30 percent.    

The Plant Nutrient Group had an operating loss of $1.4 million during the first quarter on revenues of $108 million.  In the same three month period of 2013, the group reported an operating loss of $0.6 million and revenues of $112 million.  The first quarter results were lower than anticipated due to weather related delays in fieldwork; it appears much of this volume will shift to the second quarter.  Margins from year to year are down slightly due to a slow start to the season.    

The Turf & Specialty Group had operating income of $1.4 million on $44 million of revenues during the first quarter.  Last year, the group reported $4.0 million of operating income on $47 million of revenues for the period. 

The Retail Group had an operating loss of $2.3 million during the first quarter on revenues of $28 million.  In the prior year, the group's operating loss for the same three month period was $3.2 million, and revenues were $31 million

"The superior results seen last year in both our Ethanol and Rail groups have continued into the first quarter.  The Ethanol Group worked diligently to increase its production in the first quarter when other ethanol plants were forced to reduce production.  This effort allowed our ethanol team to fully capitalize on the strong margins in the market.  Our Rail Group continued to perform well, working to increase both lease and utilization rates over time,"  CEO Mike Anderson stated.  "The Grain Group, however, had a difficult quarter.  Anticipated returns on stored grain inventories simply did not materialize in the quarter.  While the Plant Nutrient Group was impacted by adverse weather in the first quarter, it should benefit from an anticipated significant corn crop planting in the second quarter, as long as the weather cooperates," added Mr. Anderson. 

The company will host a webcast on Thursday, May 8, 2014 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

FINANCIAL TABLES FOLLOW . . .

 

The Andersons, Inc.



Consolidated Statements of Income



(Unaudited)







Three months ended March 31,

(in thousands, except per share data)

2014

2013




Sales and merchandising revenues

$ 1,003,294

$ 1,271,970

Cost of sales and merchandising revenues

926,519

1,192,697

Gross profit

76,775

79,273

Operating, administrative and general expenses

70,985

62,008

Interest expense

6,002

6,404

Other income:



   Equity in earnings of affiliates, net

20,501

7,804

   Other income, net

19,612

2,726

Income before income taxes

39,901

21,391

Income tax provision

13,872

9,079

Net income

26,029

12,312

   Net income (loss) attributable to the noncontrolling interests

3,321

(266)

Net income attributable to The Andersons, Inc.

$ 22,708

$ 12,578




Per common share:



Basic earnings attributable to The Andersons, Inc. common shareholders

$ 0.80

$ 0.45

Diluted earnings attributable to The Andersons, Inc. common shareholders

$ 0.80

$ 0.45

Dividends paid

$ 0.1100

$ 0.1067




 

The Andersons, Inc.






Condensed Consolidated Balance Sheets





(Unaudited)


















(In thousands)

March 31, 2014


December 31, 2013


March 31, 2013

Assets






Current assets:






   Cash and cash equivalents

$                  43,693


$                309,085


$                    58,284

   Restricted cash

652


408


635

   Accounts receivable, net

191,972


173,930


197,842

   Inventories

725,584


614,923


753,378

   Commodity derivative assets – current

119,330


71,319


158,079

   Deferred income taxes

9,104


4,931


15,482

   Other current assets

48,214


47,188


63,350

Total current assets

1,138,549


1,221,784


1,247,050

Other assets:






   Commodity derivative assets – noncurrent

1,365


246


813

   Other assets, net

114,528


118,010


104,535

   Pension assets

15,079


14,328


-

   Equity method investments

232,396


291,109


190,377


363,368


423,693


295,725

Railcar assets leased to others, net

237,534


240,621


244,706

Property, plant and equipment, net

386,132


387,458


364,307

Total assets

$            2,125,583


$             2,273,556


$               2,151,788







Liabilities and equity






Current liabilities:






   Borrowings under short-term line of credit

$               226,100


$                          -


$                  292,100

   Accounts payable for grain

183,998


592,183


183,997

   Other accounts payable

177,623


154,599


182,013

   Customer prepayments and deferred revenue

124,981


59,304


160,191

   Commodity derivative liabilities – current

32,153


63,954


50,157

   Accrued expenses and other current liabilities

56,290


70,295


52,519

   Current maturities of long-term debt

90,760


51,998


43,052

Total current liabilities

891,905


992,333


964,029







Other long-term liabilities

14,749


15,386


16,898

Commodity derivative liabilities – noncurrent

734


6,644


3,220

Employee benefit plan obligations

39,989


39,477


52,927

Long-term debt, less current maturities

306,161


375,213


412,700

Deferred income taxes

128,716


120,082


77,694

Total liabilities

1,382,254


1,549,135


1,527,468

Total equity

743,329


724,421


624,320

Total liabilities and equity

$            2,125,583


$             2,273,556


$               2,151,788







 










(in thousands)

Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Three months ended









March 31, 2014









Revenues from external customers

$              583,159

$         188,820

$  107,630

$            52,302

$      43,725

$            27,658

$                    -

$          1,003,294










Gross profit

17,008

7,365

14,075

21,865

8,475

7,987

-

76,775










Equity in earnings of affiliates

1,884

18,617

-

-

-

-

-

20,501










Other income (expense), net

18,346

(226)

185

710

307

112

178

19,612










Income (loss) before income taxes

11,303

23,148

(1,411)

15,045

1,375

(2,335)

(7,224)

39,901










Income (loss) attributable to the noncontrolling interests

(3)

3,324

-

-

-

-

-

3,321










Operating income (loss) (a)

$                11,306

$            19,824

$     (1,411)

$            15,045

$         1,375

$            (2,335)

$            (7,224)

$                36,580










Three months ended









March 31, 2013









Revenues from external customers

$              836,495

$          199,309

$   111,902

$           46,364

$       47,187

$           30,713

$                    -

$           1,271,970










Gross profit

24,850

4,805

13,949

18,979

9,018

7,672

-

79,273










Equity in earnings (loss) of affiliates

7,910

(106)

-

-

-

-

-

7,804










Other income (expense), net

571

231

(25)

946

275

114

614

2,726










Income (loss) before income taxes

8,299

2,213

(562)

14,574

4,001

(3,169)

(3,965)

21,391










Loss attributable to the noncontrolling interests

-

(266)

-

-

-

-

-

(266)










Operating income (loss) (a)

$                    8,299

$                2,479

$          (562)

$              14,574

$          4,001

$              (3,169)

$             (3,965)

$                  21,657



















(a) Operating income (loss) for each Group 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 (loss).

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SOURCE The Andersons, Inc.



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