Agrium completes record year with strong fourth quarter.CALGARY Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial , Alberta--(BUSINESS WIRE)--Jan. 31, 1996--Agrium Inc. announces record earnings for the fourth quarter and year ended Dec. 31, 1995, with all amounts expressed in U.S. dollars. Unaudited net earnings for the year were $112.4 million ($1.68 per common share), 81 percent higher than the $62.1 million ($0.99 per common share) for 1994. Earnings per common share reflect the recent three for one stock split. Fourth quarter net earnings were $21.8 million ($0.33 per common share), compared with $14.6 million ($0.22 per common share) in the fourth quarter of 1994. "This outstanding performance has been driven by strong margins in our wholesale nitrogen business, record potash potash: see potassium carbonate. potash Name used for various inorganic compounds of potassium, chiefly the carbonate (K2CO3), a white crystalline material formerly obtained from wood ashes. production and sales volumes and a solid performance from our retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → ," said John M. Van Brunt brunt n. 1. The main impact or force, as of an attack. 2. The main burden: bore the brunt of the household chores. , Agrium Agrium Inc. NYSE: AGU TSX: AGU engages in the production, marketing, and distribution of agricultural products and services, and nutrients for agricultural and industrial markets in the United States and Argentina. president and chief executive officer. "Looking forward, all the fundamentals which drive our business remain aligned. "We are confident that fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. and other ag-product markets will remain strong. "Severely depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d world grain stocks, higher prices for coarse grains coarse grain - granularity and anticipated increases in planted acreage in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in 1996 all bode bode 1 v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for our business," added Van Brunt. "To take advantage of this strong demand scenario, we are increasing production capacity at our nitrogen and potash operations and have identified opportunities for enhancing our phosphate phosphate, salt or ester of phosphoric acid, H3PO4. Because phosphoric acid is tribasic (having three replaceable hydrogen atoms), it forms monophosphate, diphosphate, and triphosphate salts in which one, two, or three of the hydrogens of the production facilities that will be implemented over the next two years. "Our strong balance sheet will allow us to further capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the continued strength of the agricultural sector. We believe that several years of increased grain production will be required to replenish re·plen·ish v. re·plen·ished, re·plen·ish·ing, re·plen·ish·es v.tr. 1. To fill or make complete again; add a new stock or supply to: replenish the larder. 2. world stocks to reasonable levels. Consequently, our outlook remains very positive for a number of years." As a result of the acquisition of Crop Production Services Inc. (CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ), Western Farm Services Inc. (WFS WFS Wegfahrsperre (German: drive away blocking system) WFS Web Feature Service WFS World Future Society WFS World Food Summit WFS Wave Front Sensor WFS Wolfram Syndrome WFS Wire Feed Speed (welding) ) and Nu-West Industries Inc. (Nu-West), there has been a significant increase in the Corporation's business conducted in the United States and the U.S. dollar has become the unit of measurement for the large majority of business transactions. Accordingly, the U.S. dollar has been adopted as Agrium's reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. effective Jan. 1, 1995. Historically Agrium's financial statements have been expressed in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . Comparative financial information for 1994 has been restated in U.S. dollars, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , using the Dec. 31, 1994 exchange rate of Cdn. $1.4028. -0- Selected production and wholesale sales volumes in thousands of tonnes:
Years ended Dec. 31
-----------------------------------
1995 1994
-----------------------------------
Production Sales Production Sales
------------------ ---------------
Nitrogen 1,608 1,640 1,579 1,685
Potash 1,359 1,303 1,213 1,213
Phosphate (P2O5 equivalent) 69 70 - -
------------- --------------
3,036 3,013 2,792 2,898
------------- --------------
------------- --------------
-0-
Sales and gross profit in millions of U.S. dollars:
Years ended December 31
---------------------------------
1995 1994
---------------------------------
Net Gross Net Gross
Sales(a) Profit Sales(a) Profit
---------------------------------
Wholesale
Nitrogen $ 276.6 $ 153.5 $ 226.4 $ 77.3
Potash 83.7 46.4 70.9 36.3
Phosphate 28.7 7.3 - -
Other Products 50.6 3.2 32.3 4.8
------------------ -----------------
439.6 210.4 329.6 118.4
Retail 755.7 202.0 356.3 102.9
Eliminations and other (24.4) 1.2 (16.0) ( 0.9)
------------------ -----------------
$1,170.9 $ 413.6 $ 669.9 $ 220.4
------------------ -----------------
------------------ -----------------
(a) Net of distribution costs-0- Wholesale product gross profit continues to reflect robust margins Wholesale sales revenues, net of distribution costs distribution costs distribute npl → Vertriebskosten pl , increased by $110.0 million or 33 percent in 1995 when compared with 1994. Related gross profit was up $92.0 million or 78 percent. The increase in revenues resulted primarily from higher nitrogen selling prices. This, together with lower nitrogen fertilizer production costs, accounted for the large majority of the gross profit increase. Increases in potash prices and sales volumes accounted for $10.1 million of additional gross profit. Phosphate production operations, following the acquisition of Nu-West early in fourth quarter 1995, also contributed to the higher revenues and gross profit. Nitrogen gross profit for 1995 amounted to $153.5 million, an increase of $76.2 million or 99 percent over 1994. The increase resulted principally from higher selling prices and, to a lesser extent, lower production costs. Production costs during 1995 benefited from natural gas prices which were approximately 30 percent lower than in 1994. Fourth quarter nitrogen gross profit totalled $41.3 million, an increase of $15.6 million or 61 percent over the same quarter of 1994. The most significant contributor to the increase was higher urea selling prices. Demand for nitrogen fertilizers remained strong throughout the fourth quarter. Potash gross profit for 1995 was $46.4 million, up $10.1 million or 28 percent over 1994. The increase was primarily due to higher realized prices and, to a lesser extent, increased sales volumes. The higher prices and sales volumes reflect strong demand from both North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and offshore markets. Production levels throughout 1995 were at record levels. Fourth quarter potash gross profit totalled $9.9 million, down $0.8 million from the same quarter of 1994. Although revenues benefited from higher sales volumes and somewhat higher selling prices, increased production costs caused gross profits to decline marginally during the quarter. Phosphate gross profit was $7.3 million on net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $28.7 million. Prices and demand for phosphate fertilizers were strong throughout the fourth quarter. Retail results remain strong in the quarter While inclement in·clem·ent adj. 1. Stormy: inclement weather. 2. Showing no clemency; unmerciful. in·clem weather delayed first quarter 1995 agricultural activities in traditionally early markets like California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , and continued in the second quarter in other retail market areas, the third quarter showed a strong increase in retail sales and profitability, largely the result of delayed spring application. Fourth quarter results reflected seasonal norms. Combined retail sales of WFS and CPS for 1995 totalled $755.7 million and generated gross profit of $202.0 million. This compares with sales of $356.3 million and gross profit of $102.9 million for CPS during 1994. Selling, general and administrative expense for the retail operations was $146.7 million in 1995. Depreciation and amortization was $19.1 million. Comparable expenses for 1994 were $74.4 million and $10.1 million, respectively. The inclusion of WFS, acquired in early January January: see month. 1995, accounted for the large majority of the 1995 increases. Fourth quarter sales were $147.4 million with corresponding gross profit of $42.3 million. Sales and gross profit were $57.5 million and $18.6 million, respectively, during the same period of 1994. Selling, general and administrative expense was $36.3 million while depreciation and amortization was $5.1 million. Comparative amounts for fourth quarter 1994 were $17.2 million and $2.5 million, respectively. Financial and other information Cash provided by operations, before changes in non-cash working capital, was $151.2 million ($2.29 per common share) for 1995 compared with $93.8 million ($1.49 per common share) in 1994. Working capital at December December: see month. 31, 1995 was $188.8 million. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. was $186.7 million or 32 percent of combined long-term debt and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. . Agrium's effective income tax rate increased from 32.3 percent in 1994 to 36.5 percent in 1995, reflecting a reduction in the relative benefit of tax deductions Tax deduction An expense that a taxpayer is allowed to deduct from taxable income. tax deduction See deduction. as income levels increased. During October October: see month. 1995, Agrium acquired, pursuant to a tender offer, all the common shares of Nu-West Industries Inc. for cash consideration of $98.9 million. Nu-West, with production facilities located in Soda Springs, Idaho Soda Springs is a city in Caribou County, Idaho, United States. The population was 3,381 at the 2000 census. The city is the county seat of Caribou CountyGR6. , is a producer and wholesale marketer of phosphate fertilizer products. In December 1995, Agrium completed a $175 million private placement debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay with U.S. institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . The unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. was issued in two tranches Tranches A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". - $100 million of 7.06 percent senior notes maturing in 15 years with a 12 year average life, and $75 million of 6.86 percent senior notes maturing in 12 years with a 10 year average life. Approximately $100 million of the proceeds was used to repay high cost secured debt of CPS, WFS and Nu-West with the balance added to working capital. Through December 1995, Agrium repurchased 2,318,400 of its common shares at an average cost of $11.41 per share pursuant to a Normal Course Issuer Bid initiated in March 1995. Repurchases during January 1996 increased the total to 3,073,600 common shares; 92 percent of the number of shares allowed under the Issuer Bid. Figures take into account the recent three for one stock split. Other In January 1996, notification was received from the newly elected governor of the Province of Neuquen, Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. , advising of the Province's inability to meet certain financial commitments, made by a previous administration and ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. by the Provincial Legislature in September 1995, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Agrium's proposed nitrogen fertilizer production facility in Neuquen. Agrium remains committed to participate in the development of Argentina's expanding agricultural market. Accordingly, Agrium will continue to pursue alternatives leading to the construction of a nitrogen fertilizer production facility to serve this market. In 1995, Agrium opened four full service retail outlets in Argentina. Based on the initial success of these outlets, additional outlets are planned for 1996. Agrium Inc. is one of North American's largest integrated and diversified diversified (di·verˑ·s fertilizer companies. -0-
AGRIUM INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31
(Thousands of U.S. dollars)
(Unaudited)
1995 1994
-------- --------
Current Assets
Cash and short term investments $ 56,084 $ 63,991
Accounts receivable 194,291 114,518
Inventories 156,360 84,174
Prepaid expenses 13,428 5,856
--------- ---------
420,163 268,539
Capital Assets 351,643 188,537
Other Assets 109,366 10,935
--------- ---------
$881,172 $468,011
--------- ---------
--------- ---------
Current Liabilities
Bank indebtedness $ 59,530 $ 10,001
Accounts payable and
accrued liabilities 136,586 95,626
Income and other taxes 30,822 10,106
Principal repayments on
long term debt 4,427 3,863
-------- --------
231,365 119,596
Long Term Debt 186,713 35,820 Deferred Liabilities 16,018 5,934 Deferred Income Taxes - 21,959
Minority Interest 48,174 476
---------- ---------
482,270 183,785
----------- ---------
Shareholders' Equity Share capital 229,079 203,659 Retained earnings 152,152 67,572
Cumulative translation
adjustment 17,671 12,995
--------- --------
398,902 284,226
--------- --------
$881,172 $468,011
--------- --------
--------- --------
AGRIUM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of U.S. dollars except per share information)
(Unaudited)
Three months ended Year ended
December 31 December 31
----------------------------------------
1995 1994 1995 1994
----------------------------------------
Sales $287,491 $142,492 $1,170,949 $669,889
Cost of product 185,339 87,008 757,378 449,476
----------------------------------------
Gross profit 102,152 55,484 413,571 220,413
----------------------------------------
Expenses Selling, general and administrative 50,552 24,561 181,853 99,463 Depreciation and amortization 11,613 5,268 33,904 21,056 Research and development 1,292 93 2,830 317 Royalties, resource and other taxes 3,621 2,827 14,292 9,526 Interest 4,082 1,359 10,449 5,815
Other expenses
(income) (2,744) (4,187) (6,770) (7,491)
----------------------------------------
68,416 29,921 236,558 128,686
----------------------------------------
Earnings before income taxes 33,736 25,563 177,013 91,727
Income taxes 11,944 10,954 64,623 29,673
----------------------------------------
Net earnings for
the period $21,792 $14,609 $112,390 $62,054
----------------------------------------
----------------------------------------
Basic earnings per common share $ 0.33 $ 0.22 $ 1.68 $ 0.99 Average outstanding shares (in thousands) 65,228 66,778 66,006 62,839 Fully diluted earnings per common share $ 0.31 $ 0.22 $ 1.59 $ 0.98 Average outstanding shares (in thousands) 70,200 67,507 70,885 63,235 AGRIUM INC. CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION (Thousands of U.S. dollars) (Unaudited)
Three months ended Year ended
December 31 December 31
--------------------------------------
1995 1994 1995 1994
--------------------------------------
Operating: Net earnings for the period $ 21,792 $ 14,609 $112,390 $ 62,054 Add (deduct) items not involving cash Depreciation and xD amortization 11,613 5,268 33,904 21,056 Deferred income taxes 3,888 2,228 4,008 10,926
Other (645) 719 901 (261)
---------------------------------------
Cash provided by operating
activities, before changes
in non-cash working
capital 36,648 22,824 151,203 93,775
Net change in non-cash
working capital 32,893 (11,060) (18,732) 7
--------------------------------------
Cash provided by
operating activities 69,541 11,764 132,471 93,782
---------------------------------------
Investing:
Acquisition of subsidiaries, net of cash acquired (98,683) - (130,809) ( 5,139) Capital and other assets (23,950) (6,754) ( 66,757) (29,497)
Proceeds from disposal
of assets and
investments 215 177 2,040 916
--------------------------------------
Cash used in investing
activities (122,418) (6,577) (195,526) (33,720)
---------------------------------------
Financing:
Issue (repurchase)
of common shares ( 17,039) 9 ( 25,453) 74,024
Issue of preferred
shares - - 31,500 -
Issue of long-term
debt on acquisition
of subsidiary - - - 4,517
Increase (decrease) in
long-term debt 79,984 (708) 57,558 (69,675)
Dividends paid on
common shares - - (7,185) ( 6,457)
Dividends paid on
preferred shares (437) - (1,272) -
Share issue costs - - - ( 1,705)
--------------------------------------
Cash provided by
(used in) fiancing
activities 62,508 (699) 55,148 704
--------------------------------------
Increase (decrease)
in cash position 9,631 4,488 (7,907) 60,766
Cash position
beginning of period 46,453 59,503 63,991 3,225
------------------------------------
Cash position end
of period $56,084 $63,991 $56,084 $63,991
-------------------------------------
-------------------------------------
CONTACT: Agrium Inc., Calgary Dick Nichols Richard Nichols (born April 29, 1926) is a U.S. Representative from Kansas. Born in Fort Scott, Kansas, Nichols attended public schools. He earned his B.S. from Kansas State University in 1951. He was ensign in the United States Navy from 1944 to 1947. , 403/258-5746 Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the : dnichols@agrium.com or Larry Thiessen, 403/258-4615 |
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