Record Earnings Of $ 2.48 Per Diluted Share
The Plant Nutrient Group Leads Earnings Result
MAUMEE, Ohio, Aug. 6 /PRNewswire-FirstCall/ -- The Andersons, Inc.
(Nasdaq: ANDE), today announced record second quarter net income of $45.6
million, or $2.48 per diluted share, on revenues of $1.1 billion. In the same
three-month period in 2007, the company reported net income of $25.5 million,
or $1.40 per diluted share, on $634 million of revenues. For the first six
months of 2008, the company's net income was $53.4 million, or $2.91 per
diluted share, on revenues of $1.8 billion. In the first half of 2007, The
Andersons earned $34.7 million, or $1.90 per diluted share, on revenues of
$1.0 billion.
The Grain & Ethanol Group's record operating income of $20.0 million in
the second quarter was significantly more than its year earlier result of
$12.0 million. The grain business benefited from significantly improved
margins on grain sales and the more than doubling of service fee income. The
business, however, continues to be impacted by rising costs associated with
higher grain prices. Specifically, interest expense increased more than $5.6
million in comparison to the prior period, and contract fair value adjustments
were increased due to the increased risk of contract default associated with
rising grain prices. Income from the ethanol joint ventures also grew during
the most recent quarter. Second quarter income from the group's investment in
Lansing Trade Group was $5.1 million higher this year. Total second quarter
revenues for the group were $696 million; this compares to total revenues of
$324 million for the same period last year. While revenues for the group are
higher, such amounts do not serve as good predictors of income or economic
performance in a commodity based business. The Grain & Ethanol Group's
operating income through the first six months was $22.2 million in both 2008
and 2007. Total revenues through June 2008 and 2007 were $1.2 billion and
$568 million, respectively.
The Rail Group's operating income was $4.9 million in the second quarter
on revenues of $43 million. Last year, the group reported $6.9 million of
income and $42 million of revenues for the same three-month period. The group
recognized $1.1 million in gross margin from the sale of railcars and related
leases during the quarter; however, in the second quarter last year it
recognized gains of $4.1 million for similar sales. Gross profit from the
leasing business was higher due to a higher utilization rate and growth in the
size of the fleet. The group now has 23,840 cars and locomotives, which is 5
percent more than it had 12 months ago. The average utilization rate (the
percentage of the fleet in service) for the quarter was 93.2 percent in
comparison to 92.0 percent for the same period last year. The gross profit of
the railcar repair business grew slightly during the second quarter due to the
addition of a new repair shop in the second half of 2007. The group's first
half operating income this year was $11.3 million on $78 million of revenues.
In 2007, operating income through June was $9.9 million and revenues were $68
million. Included in these results were gains on sales of railcars and
related leases of $3.3 million and $5.0 million, respectively.
The Plant Nutrient Group achieved record operating income of $47.4 million
during the second quarter of 2008 on revenues of $274 million. With these
results, the group has had quarter income records for six consecutive
quarters. The group reported a $17.1 million operating profit on $183 million
of revenues in the second quarter of 2007. These exceptional earnings
resulted from significant margin increases primarily resulting from inventory
value appreciation stemming from its significant storage space and
unprecedented escalation in basic nutrient prices. This escalation of plant
nutrient prices, lower corn acres, and pre-season buying at the end of 2007
have led to a reduced sales volume when compared to last year. The group's
first half operating income this year was $54.9 million on $379 million of
revenues. Last year, its operating income through the first six months was
$17.5 million on revenues of $249 million. The purchase of Douglass
Fertilizer & Chemical Inc. that was completed last quarter has proven to be
accretive to earnings, as expected. Yesterday, the group announced the
purchase of three pelleted lime facilities in Ohio, Illinois and Nebraska.
The acquisition allows the group to expand its value added product offering
and further broaden its geographic territory.
The Turf & Specialty Group had operating income of $1.9 million in the
second quarter this year on $36 million of revenues.
