Second Quarter Earnings of $1.09 per Diluted Share
MAUMEE, Ohio, Aug. 5, 2015 /PRNewswire/ -- The Andersons, Inc.
(NASDAQ: ANDE) announces financial results for the second quarter
ended June 30, 2015.
Highlights
- Rail Group has continued strong performance
- Ethanol Group earnings improve significantly from the first
quarter
- Plant Nutrient Group acquires the nutrient business of Kay
Flo Industries
- Unusually wet weather negatively impacts the Plant Nutrient
Group
"The Rail Group's focus on asset management and operational
performance helped produce a great quarter. The Ethanol Group
had strong results as well, due primarily to an improvement in
margins. The ethanol team also continued to benefit from
investments made in technology and process improvement," said CEO
Mike Anderson. "The weather,
however, did not cooperate in some of our markets, which led to
decreased profitability in our Plant Nutrient Group.
Extremely wet weather the last half of the second quarter
impaired the normal application of crop nutrients in the Eastern
corn-belt. We expect to return to normal nutrient volumes in
the fall. Our results this quarter once again demonstrate the
value of having a diversified portfolio of businesses. The
most recent addition to our portfolio, Kay Flo, has already added
new markets, customers and product lines to the Company.
Additionally, significant cross selling opportunities and synergies
have been identified that will pay dividends in 2016 and
beyond."
Key Highlights
Net income for the second quarter of 2015 attributable to the
Company was $31.1 million, or
$1.09 per diluted share. Last
year second quarter net income was $44.3
million, or $1.56 per diluted
share. Net income through June this year was $35.2 million, or $1.23 per diluted share. When excluding the
partial redemption of our investment in Lansing Trade Group last
year, adjusted net income through June of 2014 was $56.4 million, or $1.98 per diluted share. (See the
Reconciliation to Adjusted Net Income Table for a discussion and
reconciliation of income and adjusted income.) Second quarter
2015 revenues were $1.2 billion
compared to $1.3 billion in revenues
the same period last year.
- The Rail Group achieved pre-tax income of $21.7 million this quarter. The group
continues to have strong base leasing business results and the rail
repair business had a $0.7 million
year over year improvement. The group also had income of
$10.6 million related to a lease
settlement during the quarter.
- The Rail Group's utilization rate increased for the tenth
consecutive quarter and averaged 93.5 percent this quarter.
- The Ethanol Group executed well operationally and achieved
record second quarter ethanol production volumes. Strong
results from the sale of co-products were also seen.
- Wet weather reduced nutrient application in a number of areas
in which the Plant Nutrient Group does business. This led to
reduced margins and volume for the wholesale nutrient business, and
prevented the group from regaining the volume shortfall seen in the
prior two quarters. Further, there was a $3.0 million negative impact to income this
quarter related to the Kay Flo acquisition.
- The Grain Group's results were impacted by lower margins and
volume, which resulted primarily from lower than expected
movement of grain off farm, and lower forward contracting activity.
Outlook
- The Rail Group is expected to deliver another great year.
- The demand for ethanol is expected to remain strong as lower
gasoline prices support base demand for gasoline. The Ethanol
Group believes export demand will support margins into the fall
when domestic gasoline demand falls off.
- Barring further unusual weather the Plant Nutrient Group should
have a typical second half of the year. Significant volume
improvement should be seen in 2016, as farmers address their soil
nutrient demands created by an abnormally wet spring. The
benefits from the Kay Flo acquisition should also begin to be seen
in 2016.
- The wet weather slightly reduced the likely size of fall crops
of corn and beans, and degraded wheat quality in some of our draw
territory. We will continue to look for other income
opportunities resulting from market volatility to somewhat offset
this lower volume.
Conference Call
The Company will host a webcast on Thursday, August 6, 2015 at 11:00 A.M. ET, to discuss its performance.
To dial-in to the call, the number is 866-439-8514
(participant passcode is 83166883). 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/nsm3rp8b. 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
Founded in Maumee, Ohio, in
1947, The Andersons is a diversified Company rooted in agriculture
conducting business across North
America in the grain, ethanol, plant nutrient and rail
sectors. The Company also has a consumer retailing presence. For
more information, visit The Andersons online at
www.andersonsinc.com.
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)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Sales and
merchandising revenues
|
$
1,208,492
|
|
$
1,312,082
|
|
$
2,158,581
|
|
$
2,315,376
|
Cost of sales and
merchandising revenues
|
1,100,319
|
|
1,190,587
|
|
1,967,097
|
|
2,117,106
|
Gross
profit
|
108,173
|
|
121,495
|
|
191,484
|
|
198,270
|
Operating,
administrative and general expenses
|
83,743
|
|
76,275
|
|
162,346
|
|
147,260
|
Interest
expense
|
4,025
|
|
6,146
|
|
10,063
|
|
12,148
|
Other
income:
|
|
|
|
|
|
|
|
Equity in earnings of
affiliates
|
16,190
|
|
32,213
|
|
19,450
|
|
52,714
|
Other income,
net
|
13,772
|
|
3,797
|
|
16,880
|
|
23,409
|
Income before income
taxes
|
50,367
|
|
75,084
|
|
55,405
|
|
114,985
|
Income tax
provision
|
17,969
|
|
25,714
|
|
19,061
|
|
39,586
|
Net income
|
32,398
|
|
49,370
|
|
36,344
|
|
75,399
|
Net income
attributable to the noncontrolling interests
|
1,306
|
|
5,069
|
|
1,155
|
|
8,390
|
Net income
attributable to The Andersons, Inc.
|
$
31,092
|
|
$
44,301
|
|
$
35,189
|
|
$
67,009
|
|
|
|
|
|
|
|
|
Per common
share:
|
|
|
|
|
|
|
|
Basic earnings
attributable to The Andersons, Inc. common shareholders
|
$
1.09
|
|
$
1.56
|
|
$
1.23
|
|
$
2.36
|
Diluted earnings
attributable to The Andersons, Inc. common shareholders
|
$
1.09
|
|
$
1.56
|
|
$
1.23
|
|
$
2.36
|
Dividends
paid
|
$
0.1400
|
|
$
0.1100
|
|
$
0.2800
|
|
$
0.2200
|
|
|
|
|
|
|
|
|
The Andersons,
Inc.
|
|
|
|
|
|
|
|
Reconciliation to
Adjusted Net Income
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
(in thousands, except
per share data)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
attributable to The Andersons, Inc.
|
$
31,092
|
|
$
44,301
|
|
$
35,189
|
|
$
67,009
|
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.
|
$
31,092
|
|
$
44,301
|
|
$
35,189
|
|
$
56,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
attributable to The Andersons, Inc. common shareholders
|
$
1.09
|
|
$
1.56
|
|
$
1.23
|
|
$
2.36
|
|
|
|
|
|
|
|
|
Impact on diluted
earnings per share
|
-
|
|
-
|
|
-
|
|
(0.38)
|
Adjusted diluted
earnings per share
|
$
1.09
|
|
$
1.56
|
|
$
1.23
|
|
$
1.98
|
|
|
|
|
|
|
|
|
The Andersons,
Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
June 30,
2015
|
|
December 31,
2014
|
|
June 30,
2014
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
40,773
|
|
$
114,704
|
|
$
47,190
|
Restricted
cash
|
941
|
|
429
|
|
895
|
Accounts receivable,
net
|
238,601
|
|
183,059
|
|
189,646
|
Inventories
|
508,408
|
|
795,655
|
|
432,996
|
Commodity derivative
assets – current
|
39,860
|
|
92,771
|
|
162,427
|
Deferred income
taxes
|
6,069
|
|
7,337
|
|
7,443
|
Other current
assets
|
44,765
|
|
60,492
|
|
24,596
|
Total current
assets
|
879,417
|
|
1,254,447
|
|
865,193
|
Other
assets:
|
|
|
|
|
|
Commodity derivative
assets – noncurrent
|
2,990
|
|
507
|
|
312
|
Other assets,
net
|
225,601
|
|
131,527
|
|
116,985
|
Pension
asset
|
-
|
|
-
|
|
13,023
|
Equity method
investments
|
224,380
|
|
226,857
|
|
264,381
|
|
452,971
|
|
358,891
|
|
394,701
|
Rail Group assets
leased to others, net
|
330,832
|
|
297,747
|
|
242,147
|
Property, plant and
equipment, net
|
489,145
|
|
453,607
|
|
390,587
|
Total
assets
|
$
2,152,365
|
|
$
2,364,692
|
|
$
1,892,628
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Short-term
debt
|
$
141,250
|
|
$
2,166
|
|
$
27,000
|
Trade and other
payables
|
358,190
|
|
706,823
|
|
307,765
|
Customer prepayments
and deferred revenue
|
25,927
|
|
99,617
|
|
21,670
|
Commodity derivative
liabilities – current
|
42,622
|
|
64,075
|
|
86,134
|
Accrued expenses and
other current liabilities
|
72,034
|
|
78,610
|
|
81,260
|
Current maturities of
long-term debt
|
27,188
|
|
76,415
|
|
89,387
|
Total current
liabilities
|
667,211
|
|
1,027,706
|
|
613,216
|
|
|
|
|
|
|
Other long-term
liabilities
|
14,934
|
|
15,507
|
|
15,032
|
Commodity derivative
liabilities – noncurrent
|
2,177
|
|
3,318
|
|
7,444
|
Employee benefit plan
obligations
|
57,686
|
|
59,308
|
|
39,178
|
Long-term debt, less
current maturities
|
417,279
|
|
298,638
|
|
300,220
|
Deferred income
taxes
|
171,163
|
|
136,166
|
|
126,258
|
Total
liabilities
|
1,330,450
|
|
1,540,643
|
|
1,101,348
|
Total
equity
|
821,915
|
|
824,049
|
|
791,280
|
Total liabilities and
equity
|
$
2,152,365
|
|
$
2,364,692
|
|
$
1,892,628
|
|
|
|
|
|
|
The Andersons,
Inc.
|
|
|
|
|
|
|
|
|
|
|
Segment
Data
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
Grain
|
|
Ethanol
|
|
Plant
Nutrient
|
|
Rail
|
|
Retail
|
|
Other
|
|
Total
|
Three months ended
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
625,316
|
|
$
139,432
|
|
$
357,186
|
|
$
45,523
|
|
$
41,035
|
|
$—
|
|
$
1,208,492
|
Gross
profit
|
25,005
|
|
5,843
|
|
46,698
|
|
18,249
|
|
12,378
|
|
—
|
|
108,173
|
Equity in earnings of
affiliates
|
7,875
|
|
8,315
|
|
—
|
|
—
|
|
—
|
|
—
|
|
16,190
|
Other income,
net
|
1,231
|
|
6
|
|
459
|
|
11,834
|
|
93
|
|
149
|
|
13,772
|
Income (loss) before
income taxes
|
3,147
|
|
10,975
|
|
18,873
|
|
21,689
|
|
1,469
|
|
(5,786)
|
|
50,367
|
Income (loss)
attributable to the noncontrolling interests
|
(2)
|
|
1,308
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,306
|
Income (loss) before
income taxes attributable to The Andersons, Inc. (a)
|
$
3,149
|
|
$
9,667
|
|
$
18,873
|
|
$
21,689
|
|
$
1,469
|
|
$
(5,786)
|
|
$
49,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Three months ended
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Revenues from
external customers
|
$
656,004
|
|
$
226,388
|
|
$
354,808
|
|
$
33,409
|
|
$
41,473
|
|
$—
|
|
$
1,312,082
|
Gross
profit
|
27,909
|
|
18,638
|
|
48,538
|
|
13,863
|
|
12,547
|
|
—
|
|
121,495
|
Equity in earnings of
affiliates
|
8,467
|
|
23,746
|
|
—
|
|
—
|
|
—
|
|
—
|
|
32,213
|
Other income
(expense), net
|
975
|
|
356
|
|
858
|
|
787
|
|
190
|
|
631
|
|
3,797
|
Income (loss) before
income taxes
|
10,352
|
|
38,976
|
|
27,002
|
|
6,684
|
|
1,637
|
|
(9,567)
|
|
75,084
|
Income (loss)
attributable to the noncontrolling interests
|
(3)
|
|
5,072
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,069
|
Income (loss) before
income taxes attributable to The Andersons, Inc. (a)
|
$
10,355
|
|
$
33,904
|
|
$
27,002
|
|
$
6,684
|
|
$
1,637
|
|
$
(9,567)
|
|
$
70,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grain
|
|
Ethanol
|
|
Plant
Nutrient
|
|
Rail
|
|
Retail
|
|
Other
|
|
Total
|
Six months ended
June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues from
external customers
|
$
1,210,478
|
|
$
277,612
|
|
$
511,137
|
|
$
89,739
|
|
$
69,615
|
|
$—
|
|
$
2,158,581
|
Gross
profit
|
54,730
|
|
12,129
|
|
68,664
|
|
35,571
|
|
20,390
|
|
—
|
|
191,484
|
Equity in earnings of
affiliates
|
9,423
|
|
10,027
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,450
|
Other income,
net
|
2,064
|
|
48
|
|
1,494
|
|
12,673
|
|
192
|
|
409
|
|
16,880
|
Income (loss) before
income taxes
|
3,887
|
|
16,106
|
|
19,297
|
|
32,002
|
|
(714)
|
|
(15,173)
|
|
55,405
|
Income (loss)
attributable to the noncontrolling interests
|
(5)
|
|
1,160
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,155
|
Income (loss) before income taxes attributable to The
Andersons, Inc. (a)
|
$
3,892
|
|
$
14,946
|
|
$
19,297
|
|
$
32,002
|
|
$
(714)
|
|
$
(15,173)
|
|
$
54,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Six months ended
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Revenues from
external customers
|
$
1,239,163
|
|
$
415,208
|
|
$
506,163
|
|
$
85,711
|
|
$
69,131
|
|
$—
|
|
$
2,315,376
|
Gross
profit
|
44,917
|
|
26,003
|
|
71,088
|
|
35,728
|
|
20,534
|
|
—
|
|
198,270
|
Equity in earnings of
affiliates
|
10,351
|
|
42,363
|
|
—
|
|
—
|
|
—
|
|
—
|
|
52,714
|
Other income,
net
|
19,321
|
|
130
|
|
1,350
|
|
1,497
|
|
302
|
|
809
|
|
23,409
|
Income (loss) before
income taxes
|
21,655
|
|
62,124
|
|
26,966
|
|
21,729
|
|
(698)
|
|
(16,791)
|
|
114,985
|
Income (loss)
attributable to the noncontrolling interests
|
(6)
|
|
8,396
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,390
|
Income (loss) before income taxes attributable to The
Andersons, Inc. (a)
|
21,661
|
|
53,728
|
|
26,966
|
|
21,729
|
|
(698)
|
|
(16,791)
|
|
106,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Income (loss)
before income taxes attributable to The Andersons, Inc. 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.