The Andersons, Inc. Reports Second Quarter Results Second Quarter Earnings of $1.56 per Diluted Share

The Grain, Plant Nutrient and Rail Groups Lead Earning Results

MAUMEE, Ohio, Aug. 2, 2012 /PRNewswire/ -- The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $29.2 million, or $1.56 per diluted share, on revenues of $1.3 billion.  In the same three month period of 2011, the company reported results of $45.2 million, or $2.42 per diluted share on similar revenues.  During the first six months of 2012, the company earned $47.6 million, or $2.54 per diluted share.  In the first half of 2011, The Andersons reported record results of $62.5 million, or $3.34 per diluted share.  The revenue for the first six months of 2012 and 2011 were $2.5 billion and $2.3 billion, respectively.   

(Logo: http://photos.prnewswire.com/prnh/20081104/CLTU081LOGO )

The Grain Group reported operating income of $15.3 million in the second quarter of 2012 and $36.5 million for the same period last year, driven primarily by a return to more normal space income.  As noted previously, wheat space income in the second quarter of the prior year was extraordinary and likely not repeatable.  The group benefited from record second quarter earnings from its investment in Lansing Trade Group.  Revenues for the Grain Group were $719 million and $797 million for the quarter in 2012 and 2011, respectively.  The group's operating income for the first six months was $34.7 million on revenues of $1.4 billion.  Last year, its first half operating income was $51.6 million on similar revenues.

The Ethanol Group had an operating loss of $2.1 million in the second quarter, compared to earnings of $8.8 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 was significantly impacted by lower ethanol margins resulting from increased corn costs and lower ethanol demand.  Income from co-products such as corn-oil, E-85, and CO2 continued to have a positive impact on the financials.  Total revenues for the quarter in 2012 and 2011 were comparable at $168 million and $165 million, respectively.  The group's operating loss through June was $2.0 million on revenues of $318 million.  Last year, its first half operating income was $12.4 million on revenues of $297 million

The Plant Nutrient Group achieved operating income of $28.0 million during the second quarter on revenues of $309 million.  In the same three month period of 2011, the group had operating income of $24.1 million on revenues of $260 million.  This improved performance was due to increased volume.  Margins were down slightly year over year, but still historically strong.  The group's first half 2012 operating income was $33.8 million on $484 million of revenues.  Last year, the operating income through the first six months was $29.2 million on revenues of $383 million.  

The Rail Group achieved record operating income of $7.2 million in the second quarter on revenues of $32 million.  In the same three month period of 2011, the group earned $2.8 million and revenues were $30 million.  This quarter, the group recognized $2.4 million in gains on sales of railcars and related leases and non-recourse transactions, which is comparable to the gain of $2.3 million recorded in the prior year.  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 85 percent, which is consistent with last year.  Income from the railcar repair business increased considerably as well.  The group's first half operating income was a record $15.2 million on $68 million of revenues.  In 2011, operating income through June was $6.3 million and revenues were $58 million.  The rail fleet has increased to approximately 23,100 cars from 22,400 last year. In addition, the Rail Group executed several transactions in the quarter that will result in the recognition of $4.3 million in operating income next quarter.    

The Turf & Specialty Group had operating income of $2.8 million in the second quarter on $44 million of revenues.  Last year, the group reported operating income of $1.8 million on $42 million of revenues for the same period.  Through the first half of 2012, the group's operating income was $5.0 million on $89 million of revenues, which is similar to the prior year's result.

The Retail Group had an operating income of $1.4 million during the second quarter of 2012 on revenues of $44 million.  During the same period of the prior year, the group had an operating income of $1.9 million and revenues were $45 million.  Through the first six months, the group lost $1.3 million and revenues were $75 million.  Last year through June, the group lost $0.8 million on revenues of $77 million.  

"We had a good quarter, although our expectations for the remainder of the year have been tempered by the drought conditions currently being experienced, which will certainly impact our grain and ethanol businesses," CEO Mike Anderson stated.  "Although the results of our Ethanol Group have declined, given the current ethanol margin environment, we feel the results demonstrate that our business structure, including co-products, services, and equity partners, perform much better in a down market than the general industry.  I am particularly proud of the Rail Group's record results this quarter as well as PNG's strong results, which continue to demonstrate the portfolio benefits of our business mix," added Mr. Anderson.

The company will host a webcast on Friday, August 3, 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

FINANCIAL TABLES FOLLOW . . .

 

The Andersons, Inc.





Consolidated Statements of Income





(Unaudited)











Three months ended June 30,

Six months ended

June 30,

(in thousands, except per share data)

2012

2011

2012

2011






Sales and merchandising revenues

$ 1,315,834

$ 1,338,167

$ 2,452,967

$ 2,339,841

Cost of sales and merchandising revenues

1,213,184

1,215,395

2,264,447

2,138,384

Gross profit

102,650

122,772

188,520

201,457

Operating, administrative and general expenses

59,210

57,730

119,310

111,437

Interest expense

5,380

7,562

10,710

14,898

Other income:





Equity in earnings of affiliates

5,096

12,512

9,379

19,758

Other income, net

2,671

2,018

5,917

4,324

Income before income taxes

45,827

72,010

73,796

99,204

Income tax provision

17,356

25,975

27,597

35,781

Net income

28,471

46,035

46,199

63,423

Net income (loss) attributable to the noncontrolling interests

(728)

817

(1,407)

939

Net income attributable to The Andersons, Inc.

$ 29,199

$ 45,218

$ 47,606

$ 62,484






Per common share:





Basic earnings attributable to The Andersons, Inc. common shareholders

$ 1.57

$ 2.44

$ 2.56

$ 3.37

Diluted earnings attributable to The Andersons, Inc. common shareholders

$ 1.56

$ 2.42

$ 2.54

$ 3.34

Dividends paid

$ 0.15

$ 0.11

$ 0.30

$ 0.22






 

The Andersons, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)(In thousands)














June 30, 2012


December 31, 2011


June 30, 2011

Assets






Current assets:






Cash and cash equivalents

$              23,930


$                  20,390


$                18,616

Restricted cash

5,644


18,651


12,572

Accounts receivable, net

205,046


167,640


240,254

Inventories

597,091


760,459


469,551

Commodity derivative assets – current

122,010


83,950


187,438

Deferred income taxes

18,784


21,483


17,710

Other current assets

38,535


34,649


30,867

Total current assets

1,011,040


1,107,222


977,008

Other assets:






Commodity derivative assets – noncurrent

4,844


2,289


8,560

Other assets, net

70,040


53,327


46,610

Equity method investments

189,610


199,061


179,888


264,494


254,677


235,058

Railcar assets leased to others, net

252,965


197,137


178,141

Property, plant and equipment, net

266,275


175,087


153,642

Total assets

$         1,794,774


$             1,734,123


$           1,543,849







Liabilities and equity






Current liabilities:






Borrowings under short-term line of credit

$            309,608


$                  71,500


$              194,200

Accounts payable for grain

129,979


391,905


80,374

Other accounts payable

148,497


142,762


164,325

Customer prepayments and deferred revenue

55,912


79,557


64,231

Commodity derivative liabilities – current

29,764


15,874


24,289

Accrued expenses and other current liabilities

51,283


60,445


51,410

Current maturities of long-term debt

29,647


32,208


45,432

Total current liabilities

754,690


794,251


624,261







Other long-term liabilities

11,546


43,014


33,757

Commodity derivative liabilities – noncurrent

454


1,519


1,850

Employee benefit plan obligations

50,437


52,972


30,835

Long-term debt, less current maturities

317,648


238,885


260,645

Deferred income taxes

70,806


64,640


68,038

Total liabilities

1,205,581


1,195,281


1,019,386

Total equity

589,193


538,842


524,463

Total liabilities and equity

$         1,794,774


$             1,734,123


$           1,543,849







Segment Data



















Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Quarter ended June 30, 2012









Revenues from external customers

$      718,911

$    167,758

$  308,797

$    32,046

$              43,845

$    44,477

$            -

$    1,315,834










Gross profit

26,440

1,925

41,657

11,563

7,490

13,575

-

102,650








-


Equity in earnings (loss) of affiliates

7,505

(2,410)

1

-

-

-

-

5,096










Other income, net

489

20

1,010

824

289

155

(116)

2,671










Income (loss) before income taxes

15,277

(2,833)

27,953

7,199

2,753

1,428

(5,950)

45,827










Loss attributable to the noncontrolling interests

-

(728)

-

-

-

-

-

(728)










Operating income (loss) (a)

$         15,277

$       (2,105)

$    27,953

$      7,199

$                 2,753

$      1,428

$    (5,950)

$         46,555










Quarter ended June 30, 2011









Revenues from external customers

$         797,130

$      164,704

$    259,823

$      29,501

$                41,551

$      45,458

$             -

$      1,338,167










Gross profit

51,480

4,829

39,251

6,415

6,968

13,829

-

122,772










Equity in earnings of affiliates

5,428

7,082

2

-

-

-

-

12,512










Other income, net

522

37

134

841

259

144

81

2,018










Income (loss) before income taxes

36,541

9,647

24,077

2,763

1,778

1,877

(4,673)

72,010










Income attributable to the noncontrolling interest

-

817

-

-

-

-

-

817










Operating income (loss) (a)

$           36,541

$          8,830

$      24,077

$        2,763

$                  1,778

$        1,877

$     (4,673)

$           71,193











Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Six months ended June 30, 2012









Revenues from external customers

$   1,418,772

$    318,428

$  484,157

$    67,905

$              88,972

$    74,733

$            -

$    2,452,967










Gross profit

59,041

4,698

62,975

24,128

15,489

22,189

-

188,520










Equity in earnings (loss) of affiliates

13,457

(4,081)

3

-

-

-

-

9,379










Other income, net

1,316

36

1,128

1,600

490

279

1,068

5,917










Income (loss) before income taxes

34,712

(3,391)

33,781

15,217

4,955

(1,321)

(10,157)

73,796










Loss attributable to the noncontrolling interests

-

(1,407)

-

-

-

-

-

(1,407)










Operating income (loss) (a)

$         34,712

$       (1,984)

$    33,781

$    15,217

$                 4,955

$     (1,321)

$ (10,157)

$         75,203










Six months ended June 30, 2011









Revenues from external customers

$      1,435,097

$      297,452

$    383,472

$      58,411

$                88,821

$      76,588

$             -

$      2,339,841










Gross profit

82,772

9,294

57,335

13,532

15,744

22,780

-

201,457










Equity in earnings of affiliates

11,658

8,096

4

-

-

-

-

19,758










Other income, net

1,102

95

259

1,594

549

300

425

4,324










Income (loss) before income taxes

51,642

13,340

29,191

6,309

5,056

(787)

(5,547)

99,204










Income attributable to the noncontrolling interest

-

939

-

-

-

-

-

939










Operating income (loss) (a)

$           51,642

$        12,401

$      29,191

$        6,309

$                  5,056

$         (787)

$     (5,547)

$           98,265










(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.










SOURCE The Andersons, Inc.



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