The Andersons, Inc.
Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     
Date of Report (Date of earliest event reported)   November 3, 2004

THE ANDERSONS, INC.

(Exact name of registrant as specified in its charter)
     
OHIO
(State or other jurisdiction of
incorporation or organization)
  34-1562374
(I.R.S. Employer
Identification No.)
     
480 W. Dussel Drive, Maumee, Ohio
(Address of principal executive offices)
  43537
(Zip Code)

Registrant’s telephone number, including area code (419) 893-5050



 


TABLE OF CONTENTS

Item 2.02:
SIGNATURES


Table of Contents

Item 2.02:

The following press release was issued on November 3, 2004:

The Andersons, Inc.
480 W. Dussel Drive
Maumee, Ohio 43537

FOR IMMEDIATE RELEASE            AT THE COMPANY: Gary Smith (419) 891-6417
WEDNESDAY, NOVEMBER 3, 2004

THE ANDERSONS, INC. REPORTS RECORD 3RD QTR. EARNINGS
CITES GROWTH IN RAIL AND AGRICULTURE BUSINESSES
EPS of $0.14 for quarter beats last year by $0.47

MAUMEE, OHIO, NOVEMBER 3, 2004 — The Andersons, Inc. (Nasdaq: ANDE), today announced that its net income and earnings per share in the most recent three-month period were the best third-quarter performance in the company’s history. For the period, The Andersons achieved net income of $1.0 million, or $0.14 per diluted share, compared to the net loss of $2.3 million, or $0.33 per diluted share, that it experienced in the third quarter of 2003. Total revenues of $251 million for the period were $2 million below the third quarter of last year. For nine months to-date, the company’s net income was $10.9 million, or $1.45 per diluted share, on revenues of $902 million. In the first nine months of last year, The Andersons earned $5.0 million, or $0.68 per diluted share, on revenues of $804 million.

The Agriculture Group achieved an operating income of $0.3 million for the quarter. In the third quarter of 2003, the group incurred an operating loss of $2.8 million. Revenues of $169 million in this year’s third quarter were $9 million lower than a year ago. Third quarter revenues in the group’s grain business were lower this year because of fewer bushels sold during the period. However, increased bushel receipts and higher average gross margins fueled gross profit growth and income improvement. The group’s plant nutrient business also achieved gross profit and operating income improvement in the third quarter with increased fertilizer shipments and higher average gross margins. The Agriculture Group’s operating income for the first nine months of 2004 amounted to $9.7 million, an increase of $5.6 million from the same period in 2003. Total revenues of $622 million for the nine-month period were $86 million higher than a year ago. At this time, the fall harvest is in full swing, and the USDA is predicting that U.S. farmers will realize record corn and soybean yields and production totals. The company also indicated that it is evaluating the possibility of investing in an ethanol production facility at one of several possible locations in its region.

 


Table of Contents

The Rail Group’s July — September 2004 performance far outpaced its prior year results. Operating income of $4.9 million in the third quarter this year was $4.2 million higher than the same three-month period of 2003. Total revenues of $19.4 million were $10.1 million higher than last year. Continued improvement in lease rates during the period contributed to this strong performance as did a $2.5 million year-to-year increase in gross profit on car sales. Through the first nine months of 2004, the group has achieved operating income of $8.2 million on revenues of $43.6 million. In the same period last year, income was $2.4 million on $26.3 million of revenues.

The Processing Group incurred an operating loss of $1.9 million in the third quarter this year. This was $0.7 million higher than the operating loss experienced in the same three-month period of 2003. Total revenues of $20.8 million were $2.7 million below last year. The third quarter is typically a loss period for this group’s highly seasonal lawn fertilizer business. Through the first nine months of 2004, the group has achieved operating income of $2.4 million on $106 million of revenues. In the first nine months last year, the group had earned $2.6 million, and revenues amounted to $113 million. Although average gross margins have improved this year due to product mix improvements, volumes declined somewhat because of unfavorable weather patterns during the important lawn and garden season this spring. Noting recent escalation in some energy-related raw material costs, the company indicated that the Processing Group may also fall short of last year’s better than normal fourth quarter volume and profitability levels.

The Retail Group’s sales of $41.1 million in the third quarter were 1.9 percent below the same three-month period in 2003. Food-related product categories continued to achieve growth vs. prior-year levels, but home center products, especially lawn and garden categories, were down. In addition, labor and utility costs were higher than a year ago. As a result, the group’s operating loss widened from $0.1 million in 2003, to $0.2 million in the third quarter this year. Through the first nine months of the year, the group has earned operating income of $1.2 million, or $0.4 million less than it did during the same period of 2003. Total revenues for the Retail Group year-to-date through September are $130 million, 1.4 percent above last year.

“The third quarter has traditionally been a loss period because of the seasonality in several of our businesses, so achieving net income in excess of a million dollars in the third quarter this year is gratifying,” said President and Chief Executive Officer Mike Anderson. “During the quarter, when we saw that the Rail and Agriculture businesses were exceeding our performance expectations, we revised our full-year earnings per diluted share guidance upward. Now in the first week of November, the harvest is progressing well, fall fertilizer sales look promising, and the rail business remains strong. Although lawn fertilizer raw material costs have escalated and retail sales remain soft, I believe that the $1.80 to $2.05 full-year earnings guidance we issued in September is still appropriate.”

 


Table of Contents

The company will host a webcast on Thursday, November 4, 2004 at 11:00 A.M. EST, to discuss its third quarter performance and full-year outlook. This can be accessed under the heading “Financial Information” on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz410288278gf12.html.

The Andersons, Inc. is a diversified company with interests in the grain and plant nutrient sectors of U.S. agriculture, as well as in railcar marketing, industrial materials formulation, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company presently has operations in seven U.S. states plus rail equipment leasing interests in Canada and Mexico. Total revenues in 2003 exceeded $1.2 billion.

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.

The Andersons, Inc. is located on the Internet at www.andersonsinc.com

FINANCIAL TABLES FOLLOW . . .

 


Table of Contents

The Andersons, Inc.

Consolidated Statements of Income
(Unaudited)

                                 
    Three Months ended   Nine months ended
    September 30   September 30
(in thousands, except for per share amounts)   2004
  2003
  2004
  2003
Sales and merchandising revenues
  $ 250,682     $ 253,027     $ 901,631     $ 803,828  
Cost of sales and merchandising revenues
    209,942       222,789       768,761       692,978  
 
   
 
     
 
     
 
     
 
 
Gross profit
    40,740       30,238       132,870       110,850  
Operating, administrative and general expenses
    38,801       33,748       111,680       101,055  
Interest expense
    2,470       1,603       7,874       6,119  
Other income
    1,892       1,519       4,122       3,816  
 
   
 
     
 
     
 
     
 
 
Income before income taxes
    1,361       (3,594 )     17,438       7,492  
Income taxes
    313       (1,246 )     6,574       2,528  
 
   
 
     
 
     
 
     
 
 
Net income
  $ 1,048     $ (2,348 )   $ 10,864     $ 4,964  
 
   
 
     
 
     
 
     
 
 
Per common share:
                               
Basic earnings
  $ 0.14     $ (0.33 )   $ 1.50     $ 0.70  
 
   
 
     
 
     
 
     
 
 
Diluted earnings
  $ 0.14     $ (0.33 )   $ 1.45     $ 0.68  
 
   
 
     
 
     
 
     
 
 
Dividends paid
  $ 0.075     $ 0.070     $ 0.225     $ 0.210  
 
   
 
     
 
     
 
     
 
 
Weighted average shares outstanding-basic
    7,240       7,106       7,231       7,139  
 
   
 
     
 
     
 
     
 
 
Weighted average shares outstanding-diluted
    7,473       7,106       7,474       7,311  
 
   
 
     
 
     
 
     
 
 

 


Table of Contents

The Andersons, Inc.

Consolidated Balance Sheets
(Unaudited)

                         
    September 30   December 31   September 30
(in thousands)   2004
  2003
  2003
Assets
                       
Current assets:
                       
Cash and cash equivalents
  $ 8,138     $ 6,444     $ 3,964  
Restricted cash
    1,730              
Accounts receivable (net) and margin deposits
    63,520       68,546       71,092  
Inventories
    204,485       259,755       184,049  
Other current assets
    21,404       22,234       16,794  
 
   
 
     
 
     
 
 
Total current assets
    299,277       356,979       275,899  
Other assets
    20,662       13,702       14,915  
Railcar assets leased to others (net)
    100,259       29,489       26,979  
Property, plant and equipment (net)
    93,933       92,449       91,716  
 
   
 
     
 
     
 
 
 
  $ 514,131     $ 492,619     $ 409,509  
 
   
 
     
 
     
 
 
Liabilities and shareholders’ equity
                       
Current liabilities:
                       
Notes payable
  $ 10,600     $ 48,000     $ 80,000  
Other current liabilities
    191,046       219,447       113,273  
 
   
 
     
 
     
 
 
Total current liabilities
    201,646       267,447       193,273  
Deferred items and other long-term liabilities
    30,907       27,254       24,105  
Long-term debt non-recourse
    67,121              
Long-term debt
    88,877       82,127       83,241  
Shareholders’ equity
    125,580       115,791       108,890  
 
   
 
     
 
     
 
 
 
  $ 514,131     $ 492,619     $ 409,509  
 
   
 
     
 
     
 
 

 


Table of Contents

Segment Data

                                                 
    Agriculture
  Rail
  Processing
  Retail
  Other
  Total
Quarter ended September 30, 2004
                                               
Revenues from external customers
  $ 169,395     $ 19,385     $ 20,819     $ 41,083     $     $ 250,682  
Gross Profit
    15,448       9,464       4,162       11,666             40,740  
Other income
    1,114       183       314       131       150       1,892  
Operating income (loss)
    269       4,866       (1,859 )     (232 )     (1,683 )     1,361  
Quarter ended September 30, 2003
                                               
Revenues from external customers
    178,377       9,252       23,522       41,876             253,027  
Gross Profit
    11,413       3,087       4,411       11,327             30,238  
Other income
    647       128       464       156       124       1,519  
Operating income (loss)
    (2,828 )     693       (1,139 )     (65 )     (255 )     (3,594 )
Nine months ended September 30, 2004
                                               
Revenues from external customers
    621,796       43,598       106,076       130,161             901,631  
Gross Profit
    56,355       21,398       17,527       37,590             132,870  
Other income
    2,411       336       453       541       381       4,122  
Operating income (loss)
    9,680       8,207       2,371       1,157       (3,977 )     17,438  
Nine months ended September 30, 2003
                                               
Revenues from external customers
    536,044       26,315       113,072       128,397             803,828  
Gross Profit
    48,138       8,587       18,051       36,074             110,850  
Other income
    1,705       213       782       689       427       3,816  
Operating income (loss)
    4,034       2,373       2,567       1,574       (3,056 )     7,492  

 


Table of Contents

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
  The Andersons, Inc.
 
 
Date: November 3, 2004  By:   /s/Michael J. Anderson    
    Michael J. Anderson   
    President and Chief Executive Officer