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| 8-K - Q3 2013 EARNINGS RELEASE - Andersons, Inc. | a8-kq32013earningsrelease.htm |
NEWS RELEASEInvestor Relations Contact: | Date: November 6, 2013 |
Nick Conrad
Phone: 419-891-6415
E-mail: nick_conrad@andersonsinc.com
THE ANDERSONS, INC. REPORTS RECORD THIRD QUARTER RESULTS
Third Quarter Earnings of $0.91 per Diluted Share
Grain, Ethanol, and Rail Groups Lead Earning Results
MAUMEE, OHIO, November 6, 2013-The Andersons, Inc. (NASDAQ: ANDE) today announced third quarter net income attributable to the company of $17.2 million, or $0.91 per diluted share, on revenues of $1.2 billion. In the third quarter of 2012, the company reported results of $16.9 million, or $0.90 per diluted share, on revenues of $1.1 billion. For the first nine months of 2013, the company earned $59.3 million, or $3.15 per diluted share, on revenues of $4.0 billion. In the same period of 2012, The Andersons reported results of $64.5 million, or $3.43 per diluted share, on $3.6 billion of revenues.
At the end of July, the company and Lansing Trade Group formed a 50/50 joint venture and acquired Thompsons Limited, a grain and food-grade bean handler/processer and agronomy input provider, headquartered in Blenheim, Ontario, and operating 12 locations across Ontario and Minnesota.
The Grain Group had operating income of $14.3 million in the third quarter of 2013 versus $10.8 million for the same period last year. Both space income and gross profit on sales in the third quarter were higher than the prior year. The company’s investment in Lansing Trade Group also had strong results. Revenues for the Grain Group were $766 million and $677 million for the third quarter of 2013 and 2012, respectively. Revenues increased due to an increase in the bushels sold, as the average price per bushel decreased. The Grain Group’s operating income for the first nine months of the year was $24.7 million on revenues of $2.5 billion. Last year, its operating income through September was $45.5 million on revenues of $2.1 billion. The group’s 2013 results have been materially impacted by the 2012 drought.
The Ethanol Group achieved record operating income of $10.9 million in the third quarter on revenues of $213 million. This compares to an operating loss of $0.9 million during the same period last year on revenues of $210 million. This income increase was primarily the result of an increase in the company’s earnings from its investments in the ethanol production facilities, which benefited from higher ethanol margins. These facilities also continue to benefit from significant income provided by co-products such as corn-oil, distillers dried grains, E-85, and CO2. The group’s operating income through September was a record $24.0 million on revenues of $635 million. Last year, its operating loss through September was $2.9 million on revenues of $528 million. The year to date revenue increase was due to added volume from its Denison, Iowa plant and an increase in the average price per gallon of ethanol.
The Rail Group achieved third quarter operating income of $12.4 million on revenues of $48 million. In the same three month period of 2012, the group earned $19.1 million and revenues were $60 million. This quarter, the group recognized $2.2 million in gains on sales of railcars. Last year, the group recognized
$13.5 million in gains on sales of railcars and related leases and non-recourse transactions during the third quarter. Gross profit from the leasing business increased significantly this quarter due to an increase in the average lease rate. The group also recognized gains related to the settlement of two non-performing leases. The average utilization rate for the quarter was 86.2 percent, which is up from 84.3 percent last year. The group’s first nine months operating income was a record $36.6 million on $132 million of revenues. In 2012, operating income through September was $34.3 million and revenues were $128 million. These results include gains similar to those aforementioned of $15.8 million and $22.2 million in 2013 and 2012, respectively. In September, the company completed the acquisition of Mile Rail, LLC, a railcar repair and cleaning facility headquartered in Kansas City, Missouri, with two satellite locations in Nebraska and Indiana.
The Plant Nutrient Group’s third quarter operating loss was $1.6 million on revenues of $96 million. In the same three month period of 2012, the group had operating income of $0.8 million on revenues of $135 million. Margins in the third quarter were solid, but volume was down significantly as customers have only been purchasing nutrients as needed due to lower price trends and increased volatility in the market. Some of this volume shortfall may be regained in the fourth quarter. The group’s operating income the first nine months was $21.0 million on $538 million of revenues. Last year, its operating income through September was $34.5 million on revenues of $619 million. Decreased revenues this year are due primarily to lower volume and to a lesser extent to lower selling prices.
The Turf & Specialty Group had an operating loss of $0.1 million in the third quarter on $28 million of revenues. Last year, the group reported an operating loss of $1.6 million on $22 million of revenues for the same period. Through the first nine months of 2013, the group’s operating income was a record $6.1 million on $118 million of revenues. Last year, its operating income was $3.4 million for the same period on revenues of $110 million.
The Retail Group had an operating loss of $2.0 million in the third quarter of 2013 on revenues of $31 million. In the comparable period last year, the group’s operating loss was $1.8 million and total revenues were $35 million. Through nine months, the group recorded a loss of $3.7 million and total revenues of $103 million. Last year through September the group lost $3.1 million on total revenues of $110 million.
“We had a record third quarter, due the exceptional results seen in our Ethanol and Rail groups,” CEO Mike Anderson stated. “We also had good results in the Grain Group,” added Mr. Anderson. “Our expectation for the last quarter of the year is that it will be comparable to results seen in 2010 and 2011. The fourth quarter of 2012 results were tempered by the drought, which we are happy to say is behind us; we are instead in the midst of a record corn crop. Looking back, I am proud of our employees and how they effectively managed through the 2012 drought, with good earnings,” concluded Mr. Anderson.
The company will host a webcast on Thursday, November 7, 2013 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.
Condensed Consolidated Statements of Income
(unaudited)
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Sales and merchandising revenues | $ | 1,181,374 | $ | 1,138,402 | $ | 4,020,308 | $ | 3,591,369 | |||||||
Cost of sales and merchandising revenues | 1,108,228 | 1,060,086 | 3,764,660 | 3,324,533 | |||||||||||
Gross profit | 73,146 | 78,316 | 255,648 | 266,836 | |||||||||||
Operating, administrative and general expenses | 69,193 | 58,029 | 192,665 | 177,339 | |||||||||||
Interest expense | 5,348 | 5,482 | 16,607 | 16,192 | |||||||||||
Other income: | |||||||||||||||
Equity in earnings of affiliates | 22,177 | 6,027 | 39,991 | 15,406 | |||||||||||
Other income, net | 7,605 | 3,492 | 11,623 | 9,409 | |||||||||||
Income before income taxes | 28,387 | 24,324 | 97,990 | 98,120 | |||||||||||
Income tax provision | 10,348 | 9,133 | 36,907 | 36,730 | |||||||||||
Net income | 18,039 | 15,191 | 61,083 | 61,390 | |||||||||||
Net loss attributable to the noncontrolling interests | 878 | (1,693 | ) | 1,805 | (3,100 | ) | |||||||||
Net income attributable to The Andersons, Inc. | $ | 17,161 | $ | 16,884 | $ | 59,278 | $ | 64,490 | |||||||
Per common share: | |||||||||||||||
Basic earnings attributable to The Andersons, Inc. common shareholders | $ | 0.92 | $ | 0.91 | $ | 3.17 | $ | 3.47 | |||||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 0.91 | $ | 0.9 | $ | 3.15 | $ | 3.43 | |||||||
Dividends paid | $ | 0.16 | $ | 0.15 | $ | 0.48 | $ | 0.45 | |||||||
The Andersons, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands) | September 30, 2013 | December 31, 2012 | September 30, 2012 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 134,441 | $ | 138,218 | $ | 80,370 | |||||
Restricted cash | 164 | 398 | 160 | ||||||||
Accounts receivable, net | 178,970 | 208,877 | 199,158 | ||||||||
Inventories | 429,017 | 776,677 | 682,292 | ||||||||
Commodity derivative assets - current | 105,390 | 103,105 | 166,264 | ||||||||
Deferred income taxes | 5,254 | 15,862 | 20,627 | ||||||||
Other current assets | 42,278 | 54,016 | 41,568 | ||||||||
Total current assets | 895,514 | 1,297,153 | 1,190,439 | ||||||||
Other assets: | |||||||||||
Commodity derivative assets - noncurrent | 5 | 1,906 | 7,047 | ||||||||
Goodwill | 58,554 | 51,418 | 19,226 | ||||||||
Other assets, net | 52,177 | 53,711 | 48,575 | ||||||||
Equity method investments | 262,643 | 190,908 | 190,057 | ||||||||
373,379 | 297,943 | 264,905 | |||||||||
Railcar assets leased to others, net | 233,024 | 228,330 | 252,702 | ||||||||
Property, plant and equipment, net | 380,374 | 358,878 | 283,394 | ||||||||
Total assets | $ | 1,882,291 | $ | 2,182,304 | $ | 1,991,440 | |||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Borrowings under short-term line of credit | $ | — | $ | 24,219 | $ | 275,522 | |||||
Accounts payable for grain | 241,575 | 582,653 | 250,066 | ||||||||
Other accounts payable | 200,664 | 165,201 | 204,347 | ||||||||
Customer prepayments and deferred revenue | 23,974 | 105,410 | 77,278 | ||||||||
Commodity derivative liabilities – current | 88,234 | 33,277 | 43,589 | ||||||||
Accrued expenses and other current liabilities | 63,900 | 66,902 | 53,631 | ||||||||
Current maturities of long-term debt | 44,232 | 15,145 | 32,655 | ||||||||
Total current liabilities | 662,579 | 992,807 | 937,088 | ||||||||
Other long-term liabilities | 17,129 | 18,406 | 14,083 | ||||||||
Commodity derivative liabilities – noncurrent | 9,636 | 1,134 | 590 | ||||||||
Employee benefit plan obligations | 49,768 | 53,131 | 49,478 | ||||||||
Long-term debt, less current maturities | 381,018 | 427,243 | 312,404 | ||||||||
Deferred income taxes | 91,869 | 78,138 | 75,377 | ||||||||
Total liabilities | 1,211,999 | 1,570,859 | 1,389,020 | ||||||||
Total equity | 670,292 | 611,445 | 602,420 | ||||||||
Total liabilities and equity | $ | 1,882,291 | $ | 2,182,304 | $ | 1,991,440 | |||||
The Andersons, Inc.
Segment Data
Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
Three months ended September 30, 2013 | ||||||||||||||||||||||||
Revenues from external customers | $ | 765,833 | $ | 213,384 | $ | 95,681 | $ | 47,523 | $ | 27,624 | $ | 31,329 | $ | — | $ | 1,181,374 | ||||||||
Gross profit | 27,005 | 4,735 | 13,553 | 13,000 | 6,408 | 8,445 | — | 73,146 | ||||||||||||||||
Equity in earnings of affiliates | 12,003 | 10,174 | — | — | — | — | — | 22,177 | ||||||||||||||||
Other income, net | 1,216 | 35 | 320 | 5,031 | 135 | 102 | 766 | 7,605 | ||||||||||||||||
Income (loss) before income taxes | 14,315 | 11,790 | (1,643 | ) | 12,360 | (83 | ) | (2,043 | ) | (6,309 | ) | 28,387 | ||||||||||||
Income (loss) attributable to the noncontrolling interests | (8 | ) | 886 | — | — | — | — | — | 878 | |||||||||||||||
Operating income (loss) (a) | $ | 14,323 | $ | 10,904 | $ | (1,643 | ) | $ | 12,360 | $ | (83 | ) | $ | (2,043 | ) | $ | (6,309 | ) | $ | 27,509 | ||||
Three months ended September 30, 2012 | ||||||||||||||||||||||||
Revenues from external customers | $ | 677,484 | $ | 209,634 | $ | 135,144 | $ | 59,703 | $ | 21,509 | $ | 34,928 | $ | — | $ | 1,138,402 | ||||||||
Gross profit | 21,166 | 3,846 | 15,297 | 22,892 | 5,296 | 9,819 | — | 78,316 | ||||||||||||||||
Equity in earnings (loss) of affiliates | 9,249 | (3,224 | ) | 2 | — | — | — | — | 6,027 | |||||||||||||||
Other income, net | 526 | 1 | 523 | 1,695 | 181 | 117 | 449 | 3,492 | ||||||||||||||||
Income (loss) before income taxes | 10,807 | (2,629 | ) | 759 | 19,071 | (1,571 | ) | (1,769 | ) | (344 | ) | 24,324 | ||||||||||||
Loss attributable to the noncontrolling interests | — | (1,693 | ) | — | — | — | — | — | (1,693 | ) | ||||||||||||||
Operating income (loss) (a) | $ | 10,807 | $ | (936 | ) | $ | 759 | $ | 19,071 | $ | (1,571 | ) | $ | (1,769 | ) | $ | (344 | ) | $ | 26,017 | ||||
Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
Nine months ended September 30, 2013 | ||||||||||||||||||||||||
Revenues from external customers | $ | 2,493,678 | $ | 634,933 | $ | 537,922 | $ | 132,488 | $ | 117,955 | $ | 103,332 | $ | — | $ | 4,020,308 | ||||||||
Gross profit | 73,947 | 19,189 | 64,703 | 46,536 | 22,747 | 28,526 | — | 255,648 | ||||||||||||||||
Equity in earnings of affiliates | 24,940 | 15,051 | — | — | — | — | — | 39,991 | ||||||||||||||||
Other income, net | 1,438 | 465 | 459 | 6,679 | 585 | 316 | 1,681 | 11,623 | ||||||||||||||||
Income (loss) before income taxes | 24,667 | 25,797 | 21,035 | 36,614 | 6,113 | (3,673 | ) | (12,563 | ) | 97,990 | ||||||||||||||
Income (loss) attributable to the noncontrolling interests | (8 | ) | 1,813 | — | — | — | — | — | 1,805 | |||||||||||||||
Operating income (loss) (a) | $ | 24,675 | $ | 23,984 | $ | 21,035 | $ | 36,614 | $ | 6,113 | $ | (3,673 | ) | $ | (12,563 | ) | $ | 96,185 | ||||||
Nine months ended September 30, 2012 | ||||||||||||||||||||||||
Revenues from external customers | $ | 2,096,256 | $ | 528,062 | $ | 619,301 | $ | 127,608 | $ | 110,481 | $ | 109,661 | $ | — | $ | 3,591,369 | ||||||||
Gross profit | 80,207 | 8,544 | 78,272 | 47,020 | 20,785 | 32,008 | — | 266,836 | ||||||||||||||||
Equity in earnings (loss) of affiliates | 22,706 | (7,305 | ) | 5 | — | — | — | — | 15,406 | |||||||||||||||
Other income, net | 1,842 | 37 | 1,651 | 3,295 | 671 | 396 | 1,517 | 9,409 | ||||||||||||||||
Income (loss) before income taxes | 45,519 | (6,020 | ) | 34,540 | 34,288 | 3,384 | (3,090 | ) | (10,501 | ) | 98,120 | |||||||||||||
Loss attributable to the noncontrolling interest | — | (3,100 | ) | — | — | — | — | — | (3,100 | ) | ||||||||||||||
Operating income (loss) (a) | $ | 45,519 | $ | (2,920 | ) | $ | 34,540 | $ | 34,288 | $ | 3,384 | $ | (3,090 | ) | $ | (10,501 | ) | $ | 101,220 | |||||
(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.