The Andersons, Inc. Reports Second Quarter Results

Second Quarter Earnings of $1.09 per Diluted Share

MAUMEE, Ohio, Aug. 5, 2015 /CNW/ -- 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.

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


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