Record Full-Year Earnings of $3.84 per Diluted Share
Fourth Quarter Earnings of $0.89 per Diluted Share
Ethanol Group Leads Earnings Results
MAUMEE, Ohio, Feb. 10, 2015 /PRNewswire/ -- The
Andersons, Inc. (Nasdaq: ANDE) today announces financial
results for the fourth quarter and full year ended December 31, 2014.
Highlights
- Record full-year earnings of $3.84 per diluted share, unadjusted.
- The Ethanol Group delivered full-year
operating income of $92.3 million,
far exceeding its prior best year of $50.6
million in 2013.
- Continued growth in the fourth quarter
highlighted by the acquisition of Auburn Bean & Grain.
"We are pleased with our results in 2014. The company's
earnings this year have clearly been led by the exceptionally
strong performance of our ethanol business in a very supportive
market," said CEO Mike
Anderson. "After excluding the one-time pre-tax gain
of $17.1 million from the partial
redemption of our investment in Lansing Trade Group, our full year
adjusted results of $3.46 per share
were the highest in the company's history. The company will
begin to report adjusted earnings in the future, as we do for the
first time below.
"During the quarter we continued to grow. This is
highlighted by the purchase of Auburn Bean & Grain (AB&G),
which added six grain and four agronomy locations throughout
central Michigan and serves as a
nice geographic fit between our other Michigan assets and our Thompsons joint
venture in Ontario," added Mr.
Anderson. "The integration of AB&G is proceeding well, and its
locations were additive to income in the fourth quarter.
AB&G added grain storage capacity of about 18.1 million
bushels, and 16,000 tons of dry and 3.7 million gallons of liquid
nutrient capacity."
Financial and Operating Highlights
Net income for 2014 attributable to the company was a record
$109.7 million, or $3.84 per diluted share, on revenues of
$4.5 billion. Last year
earnings were $89.9 million, or
$3.18 per diluted share on revenues
of $5.6 billion. Full-year 2014
adjusted earnings were $99.1 million,
or $3.46 per diluted share, when the
Lansing Trade Group gain was excluded. (See the
Reconciliation to Adjusted Net Income Table for a discussion and
reconciliation of income and adjusted income.)
The company earned $25.9 million
in the fourth quarter of 2014, or $0.89 per diluted share, on revenues of
$1.3 billion. In the same three
month period of 2013, the company reported net income of
$30.7 million, or $1.08 per diluted share, on revenues of
$1.6 billion.
- Revenues were down this year within the company's agricultural
businesses due to lower commodity prices. The majority of the
decrease was within the Grain Group where the average price per
bushel sold decreased by 28 percent, which more than offset the
slight increase in bushels sold.
- The harvest was protracted in a number of states in which the
company does business, primarily due to weather conditions.
- The ethanol plants benefitted from operational improvements
made the past three years, with records being achieved for ethanol
production, ethanol yields, and corn oil yields.
- The Ethanol Group realized solid margins in 2014, however,
fourth quarter margins were lower than the same period of the prior
year.
- The Andersons received $89.5
million in net cash distributions from its non-consolidated
ethanol investments in 2014.
- The distillers dried grain market, which was negatively
impacted by a decline in the Chinese import market in the third
quarter, rebounded late in the fourth quarter and it is again
selling at levels significantly above 100 percent of corn
value.
- Fourth quarter volume for the Plant Nutrient Group was down
approximately 19 percent due to a late harvest and poor weather
conditions.
- The Rail Group's income was down in 2014 due primarily to gains
on railcar sales declining by $3.6
million, one-time gains in 2013 of $4.3 million from legal settlements, and an
increase in freight and maintenance expense to move idle railcars
into service, the benefits of which will be seen in future
periods.
- The Rail Group's utilization rate has increased for eight
consecutive quarters and ended the year at 91.0 percent.
2015 Outlook
There are solid fundamentals supporting the company's core
businesses going into 2015, although results will likely be below
2014 records, in part because the $17.1
million dollar pre-tax gain on the partial sale of Lansing
Trade Group will not be repeated.
- Corn acres to be planted in 2015 are estimated to be 88 to 89
million acres, which is down 2 to 3 percent from 2014. Bean acres
to be planted are estimated to be roughly 85 million acres, which
is very similar to or slightly higher than 2014. Assuming trend
yields, this should create a good base for the company's grain
business in 2015. Further, continued strong performance from the
Grain Group's equity investments is anticipated.
- Early 2015 ethanol margins are well below 2014 margins, and are
expected to average lower for the full year. Factors impacting
current margins include lower crude price, greater ethanol
production and marginally rising ethanol stocks. On a positive
note, higher gasoline demand, improved demand and prices for
distillers dried grains in relation to corn price, an ample corn
supply, and the potential for improved export demand as the year
progresses could contribute to improved ethanol margins later in
the year.
- The anticipated acres to be planted creates a good environment
for the Plant Nutrient Group to participate in as well.
Additionally, if there is normal spring weather some of the volume
lost in the fourth quarter of 2014 is expected to be regained in
the first half of 2015.
- The Rail Group is expected to have improved financial results
as it will benefit from increased lease and utilization rates.
Conference Call
The company will host a webcast on Wednesday, February 11, 2015 at 11:00 A.M. ET, to discuss its performance.
To dial-in to the call, the number is 866-825-3209
(participant passcode is 28990476). It is recommended that
you call 10 minutes before the conference call begins.
To access the webcast: Click on the link:
http://edge.media-server.com/m/p/dwpegcgm/lan/en. Log
on. Click on the phone icon at the bottom of the "webcast
window" on the left side of the screen. Then, you will be
provided with the conference call number and passcode. Click
the gear set icon (left of the telephone icon) and select 'Live
Phone' to synchronize the presentation with the audio on your
phone. A replay of the call can also be accessed under the
heading "Investor" on the company website at
www.andersonsinc.com.
Forward Looking Statements
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.
Company Description
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. The Andersons, Inc. is
located on the Internet at www.andersonsinc.com.
The Andersons,
Inc.
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31
|
(in thousands, except
per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Sales and
merchandising revenues
|
$
1,271,768
|
|
$
1,584,266
|
|
$
4,540,071
|
|
$
5,604,574
|
Cost of sales and
merchandising revenues
|
1,157,817
|
|
1,474,689
|
|
4,142,932
|
|
5,239,349
|
Gross
profit
|
113,951
|
|
109,577
|
|
397,139
|
|
365,225
|
Operating,
administrative and general expenses
|
94,884
|
|
85,768
|
|
318,881
|
|
278,433
|
Interest
expense
|
5,359
|
|
4,253
|
|
21,760
|
|
20,860
|
Other
income:
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates
|
19,892
|
|
28,714
|
|
96,523
|
|
68,705
|
Other income,
net
|
6,031
|
|
3,253
|
|
31,125
|
|
14,876
|
Income before income
taxes
|
39,631
|
|
51,523
|
|
184,146
|
|
149,513
|
Income tax
provision
|
11,664
|
|
16,904
|
|
61,501
|
|
53,811
|
Net income
|
27,967
|
|
34,619
|
|
122,645
|
|
95,702
|
Net income
attributable to the noncontrolling interests
|
2,075
|
|
3,958
|
|
12,919
|
|
5,763
|
Net income
attributable to The Andersons, Inc.
|
$
25,892
|
|
$
30,661
|
|
$
109,726
|
|
$
89,939
|
|
|
|
|
|
|
|
|
Per common
share:
|
|
|
|
|
|
|
|
Basic earnings
attributable to The Andersons, Inc. common shareholders
|
$
0.89
|
|
$
1.09
|
|
$
3.85
|
|
$
3.20
|
Diluted earnings
attributable to The Andersons, Inc. common shareholders
|
$
0.89
|
|
$
1.08
|
|
$
3.84
|
|
$
3.18
|
Dividends
paid
|
$
0.1400
|
|
$
0.1100
|
|
$
0.4700
|
|
$
0.4300
|
The Andersons,
Inc.
|
Reconciliation to
Adjusted Net Income
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months
ended December 31,
|
(in thousands, except
per share data)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Net income
attributable to The Andersons, Inc.
|
$
25,892
|
|
$
30,661
|
|
$
109,726
|
|
$
89,939
|
Items impacting other
income, net:
|
|
|
|
|
|
|
|
Partial redemption of
investment in Lansing Trade Group
|
-
|
|
-
|
|
(10,656)
|
|
-
|
Total adjusting
items
|
-
|
|
-
|
|
(10,656)
|
|
-
|
Adjusted net income
attributable to The Andersons, Inc.
|
$
25,892
|
|
$
30,661
|
|
$
99,070
|
|
$
89,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
attributable to The Andersons, Inc. common shareholders
|
$
0.89
|
|
$
1.08
|
|
$
3.84
|
|
$
3.18
|
|
|
|
|
|
|
|
|
Impact on diluted
earnings per share
|
-
|
|
-
|
|
(0.38)
|
|
-
|
Adjusted diluted
earnings per share
|
$
0.89
|
|
$
1.08
|
|
$
3.46
|
|
$
3.18
|
The Andersons,
Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
(in
thousands)
|
December 31,
2014
|
|
December 31,
2013
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
114,704
|
|
$
309,085
|
|
Restricted
cash
|
429
|
|
408
|
|
Accounts receivable,
net
|
183,059
|
|
173,930
|
|
Inventories
|
795,655
|
|
614,923
|
|
Commodity derivative
assets – current
|
92,771
|
|
71,319
|
|
Deferred income
taxes
|
7,337
|
|
4,931
|
|
Other current
assets
|
60,492
|
|
47,188
|
|
Total current
assets
|
1,254,447
|
|
1,221,784
|
|
Other
assets:
|
|
|
|
|
Commodity derivative
assets – noncurrent
|
507
|
|
246
|
|
Other assets,
net
|
131,527
|
|
118,010
|
|
Pension
asset
|
-
|
|
14,328
|
|
Equity method
investments
|
232,513
|
|
291,109
|
|
|
364,547
|
|
423,693
|
|
Rail Group assets
leased to others, net
|
297,747
|
|
240,621
|
|
Property, plant and
equipment, net
|
453,607
|
|
387,458
|
|
Total
assets
|
$
2,370,348
|
|
$
2,273,556
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
debt
|
$
2,166
|
|
$
-
|
|
Accounts payable for
grain
|
535,974
|
|
592,183
|
|
Other accounts
payable
|
170,849
|
|
154,599
|
|
Customer prepayments
and deferred revenue
|
99,617
|
|
59,304
|
|
Commodity derivative
liabilities – current
|
64,075
|
|
63,954
|
|
Accrued expenses and
other current liabilities
|
78,610
|
|
70,295
|
|
Current maturities of
long-term debt
|
76,415
|
|
51,998
|
|
Total current
liabilities
|
1,027,706
|
|
992,333
|
|
|
|
|
|
|
Other long-term
liabilities
|
15,507
|
|
15,386
|
|
Commodity derivative
liabilities – noncurrent
|
3,318
|
|
6,644
|
|
Employee benefit plan
obligations
|
59,308
|
|
39,477
|
|
Long-term debt, less
current maturities
|
298,638
|
|
375,213
|
|
Deferred income
taxes
|
137,113
|
|
120,082
|
|
Total
liabilities
|
1,541,590
|
|
1,549,135
|
|
Total
equity
|
828,758
|
|
724,421
|
|
Total liabilities and
equity
|
$
2,370,348
|
|
$
2,273,556
|
|
The Andersons,
Inc.
|
|
|
|
|
|
|
Segment
Data
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Grain
|
|
Ethanol
|
|
Plant
Nutrient
|
|
Rail
|
|
Turf &
Specialty
|
|
Retail
|
|
Other
|
|
Total
|
Three months ended
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
867,521
|
|
$
171,326
|
|
$
137,790
|
|
$
31,221
|
|
$
24,940
|
|
$
38,970
|
|
$
—
|
|
$
1,271,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
53,464
|
|
9,284
|
|
18,877
|
|
13,193
|
|
7,734
|
|
11,399
|
|
—
|
|
113,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates
|
7,102
|
|
12,790
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
4,483
|
|
22
|
|
69
|
|
805
|
|
92
|
|
235
|
|
325
|
|
6,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
24,024
|
|
19,353
|
|
381
|
|
5,556
|
|
181
|
|
1,046
|
|
(10,910)
|
|
39,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to the noncontrolling interests
|
(2)
|
|
2,077
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) (a)
|
$
24,026
|
|
$
17,276
|
|
$
381
|
|
$
5,556
|
|
$
181
|
|
$
1,046
|
|
$
(10,910)
|
|
$
37,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
1,124,265
|
|
$
197,032
|
|
$
170,732
|
|
$
32,306
|
|
$
22,557
|
|
$
37,374
|
|
$
—
|
|
$
1,584,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
44,570
|
|
13,323
|
|
21,979
|
|
12,328
|
|
6,542
|
|
10,835
|
|
—
|
|
109,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates
|
8,182
|
|
20,532
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
682
|
|
(66)
|
|
634
|
|
987
|
|
105
|
|
185
|
|
726
|
|
3,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
22,127
|
|
30,577
|
|
6,240
|
|
6,171
|
|
(1,369)
|
|
(3,861)
|
|
(8,362)
|
|
51,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to the noncontrolling interest
|
(3)
|
|
3,961
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) (a)
|
$
22,130
|
|
$
26,616
|
|
$
6,240
|
|
$
6,171
|
|
$
(1,369)
|
|
$
(3,861)
|
|
$
(8,362)
|
|
$
47,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grain
|
|
Ethanol
|
|
Plant
Nutrient
|
|
Rail
|
|
Turf &
Specialty
|
|
Retail
|
|
Other
|
|
Total
|
Twelve months
ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
2,682,038
|
|
$
765,939
|
|
$
668,124
|
|
$
148,954
|
|
$
134,209
|
|
$
140,807
|
|
$
—
|
|
$
4,540,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
131,129
|
|
48,057
|
|
87,619
|
|
59,762
|
|
29,320
|
|
41,252
|
|
—
|
|
397,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates
|
27,643
|
|
68,880
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
96,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
21,450
|
|
223
|
|
3,262
|
|
3,094
|
|
1,110
|
|
955
|
|
1,031
|
|
31,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
58,126
|
|
105,186
|
|
23,845
|
|
31,445
|
|
669
|
|
(620)
|
|
(34,505)
|
|
184,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to the noncontrolling interests
|
(10)
|
|
12,929
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) (a)
|
$
58,136
|
|
$
92,257
|
|
$
23,845
|
|
$
31,445
|
|
$
669
|
|
$
(620)
|
|
$
(34,505)
|
|
$
171,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months
ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
3,617,943
|
|
$
831,965
|
|
$
708,654
|
|
$
164,794
|
|
$
140,512
|
|
$
140,706
|
|
$
—
|
|
$
5,604,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
118,517
|
|
32,512
|
|
86,682
|
|
58,864
|
|
29,289
|
|
39,361
|
|
—
|
|
365,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates
|
33,122
|
|
35,583
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
68,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
2,120
|
|
399
|
|
1,093
|
|
7,666
|
|
690
|
|
501
|
|
2,407
|
|
14,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
46,794
|
|
56,374
|
|
27,275
|
|
42,785
|
|
4,744
|
|
(7,534)
|
|
(20,925)
|
|
149,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
attributable to the noncontrolling interest
|
(11)
|
|
5,774
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) (a)
|
$
46,805
|
|
$
50,600
|
|
$
27,275
|
|
$
42,785
|
|
$
4,744
|
|
$
(7,534)
|
|
$
(20,925)
|
|
$
143,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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).
|
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SOURCE The Andersons, Inc.