NEWS RELEASE Investor Relations Contact: Date: February 6, 2012
Nick Conrad
Phone: 419-891-6415
E-mail: nick_conrad@andersonsinc.com
THE ANDERSONS, INC. REPORTS FOURTH QUARTER & FULL YEAR RESULTS
Full Year Earnings of $4.23 per Diluted Share
Rail and Plant Nutrient Groups set New Records
MAUMEE, OHIO, February 6, 2013-The Andersons, Inc. (Nasdaq: ANDE), today announced net income attributable to the company of $79.5 million, or $4.23 per diluted share, on revenues of $5.3 billion. The company had a strong year, surpassed only by the prior year in which it earned $95.1 million, or $5.09 per diluted share, on revenues of $4.6 billion. The company earned $15.0 million in the fourth quarter of 2012, or $0.80 per diluted share, on revenues of $1.7 billion. In the same three month period of 2011, the company reported net income of $21.7 million, or $1.17 per diluted share, on revenues of $1.3 billion. The majority of the year to year revenue increase relates to rising volume and prices, and growth, in the agricultural businesses.
The Rail Group achieved record operating income of $42.8 million in 2012, a significant improvement over its $9.8 million 2011 operating income. Gross profit from the leasing business was significantly higher than the prior year due mainly to higher lease rates, as overall utilization rate for both years was consistent at 84.6 percent. The group recognized $23.7 million in pre-tax 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 2011, the company recognized gains of $8.4 million on similar transactions. Revenues of $156 million for 2012 were higher than the $107 million reported in the prior year due mainly to increased car sales and higher lease rates. The rail fleet increased by over 600 cars in 2012, to approximately 23,300 cars. The Rail Group had operating income of $8.6 million in the fourth quarter on revenues of $29 million. In 2011, operating income for the same three month period was $2.3 million on revenues of $25 million. These results include gains on sales of railcars and related leases and non-recourse transactions of $1.5 million and $0.7 million in 2012 and 2011, respectively.
The Plant Nutrient Group had record operating income of $39.3 million in 2012, surpassing 2011 earnings by $1.0 million. Revenues for 2012 and 2011 were $797 million and $691 million, respectively. While margins declined in 2012, both income and revenues increased due to higher volume. For the fourth quarter, the group's operating income was $4.7 million on $178 million of revenues. Last year the group had operating income of $2.5 million during the same three month period on revenues of $170 million. Increased operating income in the quarter was due to higher volume as favorable weather patterns increased nutrient application.
The Grain Group's 2012 operating income was $63.6 million, compared to operating income of $87.3 million in the prior year. The group had considerably lower space income in 2012, as a result of the drought, but an increase in bushels sold. In 2011, the group benefited from significant escalation in wheat basis. Lansing Trade Group contributed strongly to the Grain Group's result with its best ever annual performance. Total revenues for the Grain Group were $3.3 billion and $2.8 billion in 2012 and 2011, respectively. Revenues increased due to greater sales volume and higher grain prices. For the fourth quarter, the group's operating income was $18.1 million on revenues of $1.2 billion. In the same three month period of 2011, the group had operating income of $27.3 million on revenues of $876 million. The group acquired the majority of the Green Plains Grain Company assets, on December 3, 2012. The acquisition included seven facilities in Iowa and five in Tennessee, with grain storage capacity of approximately 32 million bushels. The Grain Group's storage capacity increased nearly 30 percent, and 30,000 tons of fertilizer storage was added as well.
The Ethanol Group had an operating loss of $3.7 million in 2012, compared to operating income of $23.3 million in the prior year. The operating income decline was due to significantly lower ethanol margins resulting from weak gasoline demand, an oversupply of ethanol, and high corn costs caused by last year's drought. The ethanol plants, however, continue to benefit from co-product sales of corn oil, E-85, Distillers Dried Grains and CO2. Total 2012 revenues were $743 million, up from $642 million in 2011. Revenues increased due to an increase in volume, the majority of which was due to the addition of the Denison, Iowa, facility in 2012. The group's fourth quarter operating loss was $0.8 million on revenues of $215 million. During the same three month period of 2011, operating income was $6.5 million on revenues of $165 million.
The Turf & Specialty Group's full year operating income was $2.2 million on revenues of $131 million. In 2011, the group had operating income of $2.0 million, and total revenues were $130 million. The group incurred an operating loss of $1.2 million in the fourth quarter on revenues of $21 million. Last year, operating loss for the same period was $1.8 million on revenues of $18 million. During the quarter, the group acquired the Mt. Pulaski cob business, which approximately doubled the production capacity of the Cob Division.
The Retail Group had an operating loss of $4.0 million in 2012, which included charges associated with closing its Woodville store. In the prior year, the group's operating loss was $1.5 million. Total 2012 sales for the group were $151 million, compared to sales of $158 million in the prior year. The Retail Group's fourth quarter operating income was a loss of $0.9 million on revenues of $41 million. Last year, during the same three month period, the group's operating income was $0.5 million and total revenues were $45 million.
“This is definitely one of those years where our purposeful diversification paid off,” CEO Mike Anderson stated. “The Rail Group had its best year ever, due to skillful management of its railcar portfolio. Similarly, our Plant Nutrient Group had its second record year in a row even though margins decreased, as they increased sales volume and prudently managed their inventory. Our Grain Group also had good results, in part due to the record earnings of Lansing Trade Group, even though there were unfavorable impacts caused by the drought,” Mr. Anderson added. “In the last year we demonstrated our commitment to growth by acquiring New Eezy Grow, Inc., Denison, Mt. Pulaski, and the majority of the assets of the Green Plains Grain Company. We also opened our Anselmo, Nebraska grain elevator in August and look forward to opening a new railcar blast and paint facility this spring. As we have in the past, we will continue to focus on long term earnings growth.”
The company will host a webcast on Thursday, February 7, 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)
Year ended December 31, | |||||||||||
(in thousands, except per share data) | 2012 | 2011 | 2010 | ||||||||
Sales and merchandising revenues | $ | 5,272,010 | $ | 4,576,331 | $ | 3,393,791 | |||||
Cost of sales and merchandising revenues | 4,914,005 | 4,223,479 | 3,112,112 | ||||||||
Gross profit | 358,005 | 352,852 | 281,679 | ||||||||
Operating, administrative and general expenses | 246,929 | 229,090 | 195,330 | ||||||||
Interest expense | 22,155 | 25,256 | 19,865 | ||||||||
Other income: | |||||||||||
Equity in earnings of affiliates | 16,487 | 41,450 | 26,007 | ||||||||
Other income, net | 14,725 | 7,922 | 11,652 | ||||||||
Income before income taxes | 120,133 | 147,878 | 104,143 | ||||||||
Income tax provision | 44,568 | 51,053 | 39,262 | ||||||||
Net income | 75,565 | 96,825 | 64,881 | ||||||||
Net income (loss) attributable to the noncontrolling interests | (3,915 | ) | 1,719 | 219 | |||||||
Net income attributable to The Andersons, Inc. | $ | 79,480 | $ | 95,106 | $ | 64,662 | |||||
Per common share: | |||||||||||
Basic earnings attributable to The Andersons, Inc. common shareholders | $ | 4.27 | $ | 5.13 | $ | 3.51 | |||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 4.23 | $ | 5.09 | $ | 3.48 | |||||
Dividends paid | $ | 0.60 | $ | 0.44 | $ | 0.36 | |||||
The Andersons, Inc.
Consolidated Balance Sheets (unaudited)
(in thousands) | December 31, 2012 | December 31, 2011 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 138,218 | $ | 20,390 | |||
Restricted cash | 398 | 18,651 | |||||
Accounts receivable, net | 208,877 | 167,640 | |||||
Inventories | 776,677 | 760,459 | |||||
Commodity derivative assets - current | 103,105 | 83,950 | |||||
Deferred income taxes | 15,862 | 21,483 | |||||
Other current assets | 54,016 | 34,649 | |||||
Total current assets | 1,297,153 | 1,107,222 | |||||
Other assets: | |||||||
Commodity derivative assets - noncurrent | 1,906 | 2,289 | |||||
Other assets, net (Note 1) | 105,129 | 53,327 | |||||
Equity method investments | 190,908 | 199,061 | |||||
297,943 | 254,677 | ||||||
Railcar assets leased to others, net | 228,330 | 197,137 | |||||
Property, plant and equipment, net | 358,878 | 175,087 | |||||
Total assets | $ | 2,182,304 | $ | 1,734,123 | |||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Borrowings under short-term line of credit | $ | 24,219 | $ | 71,500 | |||
Accounts payable for grain | 584,171 | 391,905 | |||||
Other accounts payable | 169,867 | 142,762 | |||||
Customer prepayments and deferred revenue | 99,164 | 79,557 | |||||
Commodity derivative liabilities – current | 33,277 | 15,874 | |||||
Accrued expenses and other current liabilities | 66,964 | 60,445 | |||||
Current maturities of long-term debt | 15,145 | 32,208 | |||||
Total current liabilities | 992,807 | 794,251 | |||||
Other long-term liabilities | 18,406 | 43,014 | |||||
Commodity derivative liabilities – noncurrent | 1,134 | 1,519 | |||||
Employee benefit plan obligations | 53,131 | 52,972 | |||||
Long-term debt, less current maturities | 427,243 | 238,885 | |||||
Deferred income taxes (Note 1) | 78,138 | 64,640 | |||||
Total liabilities | 1,570,859 | 1,195,281 | |||||
Total equity (Note 1) | 611,445 | 538,842 | |||||
Total liabilities and equity | $ | 2,182,304 | $ | 1,734,123 | |||
Note 1 - Other assets, net includes the investment in cumulative convertible preferred shares of Iowa Northern Railway Corporation, which is carried at estimated fair value. The annual valuation has not yet been finalized, and therefore the other assets, net line item within the Consolidated Balance Sheets, along with deferred income taxes and accumulated other comprehensive income (a component of equity) may be subject to change prior to issuance of the audited Consolidated Financial Statements.
The Andersons, Inc.
Segment Data
Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
Three months ended December 31, 2012 | ||||||||||||||||||||||||
Revenues from external customers | $ | 1,197,376 | $ | 214,867 | $ | 177,732 | $ | 28,818 | $ | 20,545 | $ | 41,303 | $ | — | $ | 1,680,641 | ||||||||
Gross profit | 36,973 | 6,129 | 19,980 | 9,709 | 6,241 | 12,137 | — | 91,169 | ||||||||||||||||
Equity in earnings (loss) of affiliates | 6,374 | (5,293 | ) | — | — | — | — | — | 1,081 | |||||||||||||||
Other income, net | 706 | 16 | 266 | 3,841 | 113 | 158 | 216 | 5,316 | ||||||||||||||||
Income (loss) before income taxes | 18,078 | (1,615 | ) | 4,714 | 8,553 | (1,168 | ) | (861 | ) | (5,688 | ) | 22,013 | ||||||||||||
Loss attributable to the noncontrolling interests | — | (815 | ) | — | — | — | — | — | (815 | ) | ||||||||||||||
Operating income (loss) (a) | $ | 18,078 | $ | (800 | ) | $ | 4,714 | $ | 8,553 | $ | (1,168 | ) | $ | (861 | ) | $ | (5,688 | ) | $ | 22,828 | ||||
Three months ended December 31, 2011 | ||||||||||||||||||||||||
Revenues from external customers | $ | 875,538 | $ | 164,763 | $ | 169,522 | $ | 24,981 | $ | 17,844 | $ | 45,182 | $ | — | $ | 1,297,830 | ||||||||
Gross profit | 40,084 | 2,649 | 18,882 | 6,038 | 5,777 | 13,001 | — | 86,431 | ||||||||||||||||
Equity in earnings (loss) of affiliates | 5,631 | 6,349 | (19 | ) | — | — | — | — | 11,961 | |||||||||||||||
Other income, net | 708 | 26 | 163 | 668 | 164 | 208 | 444 | 2,381 | ||||||||||||||||
Income (loss) before income taxes | 27,333 | 6,974 | 2,454 | 2,346 | (1,811 | ) | 500 | (4,837 | ) | 32,959 | ||||||||||||||
Income attributable to the noncontrolling interest | — | 474 | — | — | — | — | — | 474 | ||||||||||||||||
Operating income (loss) (a) | $ | 27,333 | $ | 6,500 | $ | 2,454 | $ | 2,346 | $ | (1,811 | ) | $ | 500 | $ | (4,837 | ) | $ | 32,485 | ||||||
Twelve months ended December 31, 2012 | ||||||||||||||||||||||||
Revenues from external customers | $ | 3,293,632 | $ | 742,929 | $ | 797,033 | $ | 156,426 | $ | 131,026 | $ | 150,964 | $ | — | $ | 5,272,010 | ||||||||
Gross profit | 117,180 | 14,673 | 98,252 | 56,729 | 27,026 | 44,145 | — | 358,005 | ||||||||||||||||
Equity in earnings (loss) of affiliates | 29,080 | (12,598 | ) | 5 | — | — | — | — | 16,487 | |||||||||||||||
Other income, net | 2,548 | 53 | 1,917 | 7,136 | 784 | 554 | 1,733 | 14,725 | ||||||||||||||||
Income (loss) before income taxes | 63,597 | (7,635 | ) | 39,254 | 42,841 | 2,216 | (3,951 | ) | (16,189 | ) | 120,133 | |||||||||||||
Loss attributable to the noncontrolling interests | — | (3,915 | ) | — | — | — | — | — | (3,915 | ) | ||||||||||||||
Operating income (loss) (a) | $ | 63,597 | $ | (3,720 | ) | $ | 39,254 | $ | 42,841 | $ | 2,216 | $ | (3,951 | ) | $ | (16,189 | ) | $ | 124,048 | |||||
Twelve months ended December 31, 2011 | ||||||||||||||||||||||||
Revenues from external customers | $ | 2,849,358 | $ | 641,546 | $ | 690,631 | $ | 107,459 | $ | 129,716 | $ | 157,621 | $ | — | $ | 4,576,331 | ||||||||
Gross profit | 143,613 | 15,022 | 97,194 | 24,750 | 26,235 | 46,038 | — | 352,852 | ||||||||||||||||
Equity in earnings (loss) of affiliates | 23,748 | 17,715 | (13 | ) | — | — | — | — | 41,450 | |||||||||||||||
Other income, net | 2,462 | 159 | 704 | 2,866 | 880 | 638 | 213 | 7,922 | ||||||||||||||||
Income (loss) before income taxes | 87,288 | 25,063 | 38,267 | 9,778 | 2,000 | (1,520 | ) | (12,998 | ) | 147,878 | ||||||||||||||
Income attributable to the noncontrolling interest | — | 1,719 | — | — | — | — | — | 1,719 | ||||||||||||||||
Operating income (loss) (a) | $ | 87,288 | $ | 23,344 | $ | 38,267 | $ | 9,778 | $ | 2,000 | $ | (1,520 | ) | $ | (12,998 | ) | $ | 146,159 | ||||||
(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.