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| 8-K - 8-K EARNINGS RELEASE Q2 2013 - Andersons, Inc. | a8-kq22013earningsrelease.htm |
NEWS RELEASEInvestor Relations Contact: Date: August 6, 2013
Nick Conrad
Phone: 419-891-6415
E-mail: nick_conrad@andersonsinc.com
THE ANDERSONS, INC. REPORTS SECOND QUARTER RESULTS
Second Quarter Earnings of $1.57 per Diluted Share
The Plant Nutrient, Ethanol and Rail Groups Lead Earning Results
MAUMEE, OHIO, August 6, 2013-The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $29.5 million, or $1.57 per diluted share, on revenues of $1.6 billion. In the same three month period of 2012, the company reported similar results of $29.2 million, or $1.56 per diluted share on revenues of $1.3 billion. During the first six months of 2013, the company earned $42.1 million, or $2.24 per diluted share. In the first half of 2012, The Andersons reported results of $47.6 million, or $2.54 per diluted share. The revenue for the first six months of 2013 and 2012 were $2.8 billion and $2.5 billion, respectively.
The Plant Nutrient Group had operating income of $23.2 million during the second quarter on revenues of $330 million. In the same three month period of 2012, the group had operating income of $28.0 million on revenues of $309 million. This quarter the group regained much of the volume lost in the first quarter; however, margins were down year over year. The group's first half 2013 operating income was $22.7 million on $442 million of revenues. Last year, the operating income through the first six months was $33.8 million on revenues of $484 million. Margins from year to year were down due to a slow start to the season and limited inventory price appreciation.
The Ethanol Group achieved record operating income of $10.6 million in the second quarter on revenues of $222 million. This compares to an operating loss of $2.1 million during the same period last year on revenues of $168 million. This income increase was due primarily to significant ethanol margin improvement, which includes the positive impact of co-products such as corn-oil, distillers dried grains, E-85, and CO2. Also, the group had a full quarter of income from its Denison Iowa production facility compared to the prior year as the acquisition occurred in May of 2012. The group's operating income through June was $13.1 million on revenues of $422 million. Last year, its first half operating loss was $2.0 million on revenues of $318 million. The revenue increase was due to added volume from the Denison plant and an increase in the average price per gallon of ethanol.
The Rail Group achieved record operating income of $9.7 million in the second quarter on revenues of $39 million. In the same three month period of 2012, the group earned $7.2 million and revenues were $32 million. The group's revenue and operating income benefited from higher lease rates and increased income from railcar financings. The group recognized $4.4 million in pre-tax gains on sales of railcars and related leases on non-recourse transactions during the second quarter this year. In 2012, the company recognized gains of $2.4 million on similar transactions. The average utilization rate for the quarter was 85.7 percent in comparison to 84.7 percent for the same period last year. The group's first half operating income was a record $24.3 million on $85 million of revenues. In 2012, operating income through June
was $15.2 million and revenues were $68 million. The rail fleet has increased to 23,245 cars from 23,107 last year.
The Grain Group reported operating income of $2.1 million in the second quarter of 2013, compared to $15.3 million in the same three month period last year, as it continued to be impacted by the 2012 drought, which led to significantly reduced space income. The group benefited from good second quarter earnings from its investment in Lansing Trade Group. Revenues for the Grain Group were $891 million and $719 million for the quarter in 2013 and 2012, respectively. The group's operating income for the first six months was $10.4 million on revenues of $1.7 billion. Last year, its first half operating income was $34.7 million and revenues were $1.4 billion. Revenues increased due to higher grain prices and greater sales volume, which resulted primarily from the addition of the former Green Plains Grain facilities.
The Turf & Specialty Group's operating income was $2.2 million in the second quarter on $43 million of revenues. Last year, the group reported operating income of $2.8 million on $44 million of revenues for the same period. Through the first half of 2013, the group's operating income was $6.2 million on $90 million of revenues. Comparatively, in 2012 the group earned $5.0 million through June on revenues of $89 million.
The Retail Group had operating income of $1.5 million during the second quarter of 2013 on revenues of $41 million. During the same period of the prior year, the group had operating income of $1.4 million and revenues were $44 million. Through the first six months, the group lost $1.6 million and revenues were $72 million. Last year through June, the group lost $1.3 million on revenues of $75 million.
It was announced last week that the company and Lansing Trade Group finalized the acquisition of Thompsons Limited, a grain and food-grade bean handler and agronomy input provider, headquartered in Blenheim, Ontario, and operating 12 locations across Ontario and Minnesota. Then, yesterday the company announced it has entered into an agreement to acquire Mile Rail, LLC, a railcar repair and cleaning provider headquartered in Kansas City, Missouri, with three satellite locations in Nebraska, Kansas and Indiana, and mobile units in the Central Midwest.
“We had record quarterly results in both our Rail and Ethanol groups, and strong results in our Plant Nutrient Group. The Rail Group continues to manage its railcar portfolio in a skillful manner. It is satisfying to see significantly improved margins in the ethanol business; however, we are very aware the ethanol market will continue to be volatile,” CEO Mike Anderson stated. “The 2012 drought continues to have a strong impact on our Grain Group, as was expected, and the largest impact may be seen in the third quarter. A projected record corn crop, however, should positively impact the group the last three or four months of 2013,” added Mr. Anderson.
The company will host a webcast on Wednesday, August 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 June 30, | Six months ended June 30, | |||||||||||||
(in thousands, except per share data) | 2013 | 2012 | 2012 | 2011 | ||||||||||
Sales and merchandising revenues | $ | 1,566,964 | $ | 1,315,834 | $ | 2,838,934 | $ | 2,452,967 | ||||||
Cost of sales and merchandising revenues | 1,463,735 | 1,213,184 | 2,656,432 | 2,264,447 | ||||||||||
Gross profit | 103,229 | 102,650 | 182,502 | 188,520 | ||||||||||
Operating, administrative and general expenses | 61,464 | 59,210 | 123,472 | 119,310 | ||||||||||
Interest expense | 4,855 | 5,380 | 11,259 | 10,710 | ||||||||||
Other income: | ||||||||||||||
Equity in earnings of affiliates | 10,010 | 5,096 | 17,814 | 9,379 | ||||||||||
Other income, net | 1,292 | 2,671 | 4,018 | 5,917 | ||||||||||
Income before income taxes | 48,212 | 45,827 | 69,603 | 73,796 | ||||||||||
Income tax provision | 17,480 | 17,356 | 26,559 | 27,597 | ||||||||||
Net income | 30,732 | 28,471 | 43,044 | 46,199 | ||||||||||
Net loss attributable to the noncontrolling interests | 1,193 | (728 | ) | 927 | (1,407 | ) | ||||||||
Net income attributable to The Andersons, Inc. | $ | 29,539 | $ | 29,199 | $ | 42,117 | $ | 47,606 | ||||||
Per common share: | ||||||||||||||
Basic earnings attributable to The Andersons, Inc. common shareholders | $ | 1.58 | $ | 1.57 | $ | 2.25 | $ | 2.56 | ||||||
Diluted earnings attributable to The Andersons, Inc. common shareholders | $ | 1.57 | $ | 1.56 | $ | 2.24 | $ | 2.54 | ||||||
Dividends paid | $ | 0.16 | $ | 0.15 | $ | 0.32 | $ | 0.30 | ||||||
The Andersons, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands) | June 30, 2013 | December 31, 2012 | June 30, 2012 | ||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 75,920 | $ | 138,218 | $ | 23,930 | |||||
Restricted cash | 872 | 398 | 5,644 | ||||||||
Accounts receivable, net | 216,432 | 208,877 | 205,046 | ||||||||
Inventories | 444,523 | 776,677 | 597,091 | ||||||||
Commodity derivative assets - current | 121,789 | 103,105 | 122,010 | ||||||||
Deferred income taxes | 2,797 | 15,862 | 18,784 | ||||||||
Other current assets | 44,936 | 54,016 | 38,535 | ||||||||
Total current assets | 907,269 | 1,297,153 | 1,011,040 | ||||||||
Other assets: | |||||||||||
Commodity derivative assets - noncurrent | 87 | 1,906 | 4,844 | ||||||||
Other assets, net | 103,781 | 105,129 | 70,040 | ||||||||
Equity method investments | 195,241 | 190,908 | 189,610 | ||||||||
299,109 | 297,943 | 264,494 | |||||||||
Railcar assets leased to others, net | 242,887 | 228,330 | 252,965 | ||||||||
Property, plant and equipment, net | 371,716 | 358,878 | 266,275 | ||||||||
Total assets | $ | 1,820,981 | $ | 2,182,304 | $ | 1,794,774 | |||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Borrowings under short-term line of credit | $ | 50,000 | $ | 24,219 | $ | 309,608 | |||||
Accounts payable for grain | 178,017 | 582,653 | 129,979 | ||||||||
Other accounts payable | 183,971 | 165,201 | 148,497 | ||||||||
Customer prepayments and deferred revenue | 25,621 | 105,410 | 55,912 | ||||||||
Commodity derivative liabilities – current | 58,183 | 33,277 | 29,764 | ||||||||
Accrued expenses and other current liabilities | 57,456 | 66,902 | 51,283 | ||||||||
Current maturities of long-term debt | 45,096 | 15,145 | 29,647 | ||||||||
Total current liabilities | 598,344 | 992,807 | 754,690 | ||||||||
Other long-term liabilities | 15,634 | 18,406 | 11,546 | ||||||||
Commodity derivative liabilities – noncurrent | 5,863 | 1,134 | 454 | ||||||||
Employee benefit plan obligations | 50,754 | 53,131 | 50,437 | ||||||||
Long-term debt, less current maturities | 409,020 | 427,243 | 317,648 | ||||||||
Deferred income taxes | 87,486 | 78,138 | 70,806 | ||||||||
Total liabilities | 1,167,101 | 1,570,859 | 1,205,581 | ||||||||
Total equity | 653,880 | 611,445 | 589,193 | ||||||||
Total liabilities and equity | $ | 1,820,981 | $ | 2,182,304 | $ | 1,794,774 | |||||
The Andersons, Inc.
Segment Data
Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
Three months ended June 30, 2013 | ||||||||||||||||||||||||
Revenues from external customers | $ | 891,350 | $ | 222,240 | $ | 330,339 | $ | 38,601 | $ | 43,144 | $ | 41,290 | $ | — | $ | 1,566,964 | ||||||||
Gross profit | 22,092 | 9,649 | 37,201 | 14,557 | 7,321 | 12,409 | — | 103,229 | ||||||||||||||||
Equity in earnings of affiliates | 5,027 | 4,983 | — | — | — | — | — | 10,010 | ||||||||||||||||
Other income (expense), net | (349 | ) | 199 | 164 | 702 | 175 | 100 | 301 | 1,292 | |||||||||||||||
Income (loss) before income taxes | 2,053 | 11,794 | 23,240 | 9,680 | 2,195 | 1,539 | (2,289 | ) | 48,212 | |||||||||||||||
Income attributable to the noncontrolling interests | — | 1,193 | — | — | — | — | — | 1,193 | ||||||||||||||||
Operating income (loss) (a) | $ | 2,053 | $ | 10,601 | $ | 23,240 | $ | 9,680 | $ | 2,195 | $ | 1,539 | $ | (2,289 | ) | $ | 47,019 | |||||||
Three months 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 (expense), 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 | ||||||
Grain | Ethanol | Plant Nutrient | Rail | Turf & Specialty | Retail | Other | Total | |||||||||||||||||
Six months ended June 30, 2013 | ||||||||||||||||||||||||
Revenues from external customers | $ | 1,727,845 | $ | 421,549 | $ | 442,241 | $ | 84,965 | $ | 90,331 | $ | 72,003 | $ | — | $ | 2,838,934 | ||||||||
Gross profit | 46,942 | 14,454 | 51,150 | 33,536 | 16,339 | 20,081 | — | 182,502 | ||||||||||||||||
Equity in earnings of affiliates | 12,937 | 4,877 | — | — | — | — | — | 17,814 | ||||||||||||||||
Other income, net | 222 | 430 | 139 | 1,648 | 450 | 214 | 915 | 4,018 | ||||||||||||||||
Income (loss) before income taxes | 10,352 | 14,007 | 22,678 | 24,254 | 6,196 | (1,630 | ) | (6,254 | ) | 69,603 | ||||||||||||||
Income attributable to the noncontrolling interests | — | 927 | — | — | — | — | — | 927 | ||||||||||||||||
Operating income (loss) (a) | $ | 10,352 | $ | 13,080 | $ | 22,678 | $ | 24,254 | $ | 6,196 | $ | (1,630 | ) | $ | (6,254 | ) | $ | 68,676 | ||||||
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 interest | — | (1,407 | ) | — | — | — | — | — | (1,407 | ) | ||||||||||||||
Operating income (loss) (a) | $ | 34,712 | $ | (1,984 | ) | $ | 33,781 | $ | 15,217 | $ | 4,955 | $ | (1,321 | ) | $ | (10,157 | ) | $ | 75,203 | |||||
(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.