The Andersons, Inc. Reports Fourth Quarter & Full Year Results

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).

 

Logo - http://photos.prnewswire.com/prnh/20081104/CLTU081LOGO

SOURCE The Andersons, Inc.

For further information: Jim Burmeister, Phone: 419-891-5848, E-mail: Jim_Burmeister@andersonsinc.com, http://www.andersonsinc.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890