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| 8-K - 8-K Q2 2012 EARNINGS RELEASE - Andersons, Inc. | a8kq22012earningsrelease.htm |
NEWS RELEASE Investor Relations Contact: Date: August 2, 2012
Nick Conrad
Phone: 419-891-6415
E-mail: nick_conrad@andersonsinc.com
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, August 2, 2012-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.
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
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.
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 | |||||
The Andersons, Inc.
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 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.