TERRA INDUSTRIES DISCONTINUES NON-AGRIBUSINESS OPERATIONS & ADOPTS NEW ACCOUNTING STANDARDS; REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS
SIOUX CITY, Iowa, Jan. 26 /PRNewswire/ -- In keeping with its intention to focus on agribusiness, Terra Industries Inc. (NYSE: TRA) adopted plans to discontinue its leasing, construction materials and beryllium businesses, and sold its remaining coal property, it announced today . Terra also adopted new accounting standards for income taxes and post-retirement benefits effective Jan. 1, 1992. Net income for 1992, including the effect of these changes and discontinued operations, was $31.0 million, or $0.45 per share. The cumulative after-tax credit from the accounting changes was $22.3 million, or $0.32 per share. The impact of the new accounting standard for income taxes was a credit of $28.0 million, primarily as a result of expected utilization of net operating loss and tax credit carryforwards from prior years, consistent with Statement of Financial Accounting Standards (SFAS) 109. The impact of the new accounting standard for post-retirement benefits was a $5.7 million charge for retiree medical benefits. As a result of implementing these accounting standards, the company's income tax provision for continuing operations in 1992 and future years should approximate regular statutory rates. In addition, Terra now recognizes the cost of retiree medical benefits during the period employees work for the company. For the fourth quarter, Terra reported a loss of $8.3 million from continuing operations, or $0.12 per share, on revenues of $107.8 million, compared with a loss of $5.8 million, or $0.09 per share, on revenues of $103.7 million in the comparable 1991 period. (Results for 1991 have been restated for reclassification of discontinued operations.) The greater 1992 loss is attributable principally to increased natural gas costs. Also affecting fourth quarter results were contract settlements which, for the year, were greater than in 1991, but were lower in the fourth quarter of 1992 than in the comparable 1991 quarter. Net income for the 12 months ended Dec. 31, 1992, was $31.0 million, or $0.45 per share, on revenues of $1,082.2 million, compared with a loss of $151.7 million, or $2.26 per share, on revenues of $1,022.6 million in 1991.
The 1991 results included a $170 million loss on the disposal of the company's base metals business. Income from continuing operations for 1992 was $10.4 million, or $0.15 per share, compared with $12.0 million, or $0.18 per share in 1991. The 1992 results reflect a $7.9 million reduction in corporate and interest expenses compared with the prior year, $6.5 million in higher taxes due principally to adoption of the new accounting standards, and $0.7 million for 1992 retiree medical benefits.
Manufactured nitrogen fertilizer operating income declined from $26.7 million on sales of $126.7 million in 1991 to $14.8 million on sales of $125.7 million in 1992. This decrease was due to substantially higher natural gas costs, approximately $3.0 million more in expenses than anticipated during planned maintenance shut-downs at both fertilizer production facilities, and a two-week delay in re-starting the company's Iowa plant. Operating income from the company's distribution business was $16.6 million on revenues of $958.7 million, compared with $10.0 million on revenues of $899.3 million in 1991. This 66% increase resulted from higher agricultural chemical sales, improved margins and lower expenses as a percent of sales. Commenting on the year, Burton M. Joyce, president and chief executive officer, said, "We're pleased with the accomplishments of 1992. We have finalized our restructuring plans so that now we have a single focus -- agribusiness. The capacity expansion and productivity improvements we've made to our fertilizer business will benefit Terra in 1993 and beyond, as will our expansion into Canada once the acquisition of ICI Canada's fertilizer manufacturing and distribution business is completed. In addition, Terra is in sound financial shape with $122 million in cash. We're ready for 1993." Terra Industries Inc. is a leading marketer and producer of fertilizer, crop protection products, seed and services for agriculture. TERRA INDUSTRIES INC. Summarized Results of Operations (Unaudited, in thousands, except per share amounts) Periods ended Three months Year Dec. 31 1992 1991(A) 1992(A) 1991(A) Revenues Agribusiness: Manuf. fert. $ 32,575 $ 31,775 $125,590 $126,552 Resale fert. 35,920 36,054 229,136 240,803 Chemicals 27,766 26,051 641,021 576,325 Seed 4,209 3,972 51,059 46,467 Other, net of intercompany 7,375 5,885 35,385 32,450 Total $107,845 $103,737 $1,082,191 $1,022,597 Operating income (loss) $(11,296) $ (2,084) $ 30,532(B) 34,609 Corporate and unallocated expenses (1,058) (1,996) (4,813) (8,940) Interest income 650 706 3,084 1,789 Interest expense (2,796) (2,970) (10,617) (14,352) Income tax credit (prov.) 6,205 522 (7,757)(C) (1,073) Income (loss) from cont. opers. before extraordinary gain and cumulative effect of accounting changes (8,295) (5,822) 10,429 12,033 Discontinued operations 1,941 3,011 (1,665) (168,808) Income (loss) before extraordinary gain and accounting changes (6,354) (2,811) (8,764) (156,775) Extraordinary gain on debt retirement -- -- -- 5,115 Cumulative effect of accounting changes -- -- 22,265(D) -- Net income(loss) $ (6,354) $ (2,811) $ 31,029 $(151,660) Weighted average shares outstanding for the period 69,103 67,103 69,103 67,103 Income(loss) per share: Continuing operations $ (0.12) $ (0.09) $ 0.15 $ 0.18 Discontinued operations 0.03 0.05 (0.02) (2.51) Extraordinary gain on debt retirement -- -- -- 0.07 Cumulative effect of accounting changes -- -- 0.32 -- Net income(loss) per share $ (0.09) $ (0.04) $ 0.45 (2.26) (A) -- Restated for reclassification of discontinued operations. (B) -- Includes $1,161 for estimated retiree medical benefit costs recognized on an accrual basis beginning Jan. 1, 1992. (C) -- Increased $6,500 for adoption of new accounting standard. (D) -- Includes a $28,000 credit from recognizing the benefit of operating loss and tax credit carryforwards and a $5,735 charge to recognize the cost of retiree medical benefits. -0- 1/26/93 /CONTACT: Paula C. Norton of Terra Industries Inc., 712-277-5438/ (TRA)
CO: Terra Industries Inc. ST: Iowa IN: SU: ERN
TS -- NY006 -- 8970 01/26/93 10:01 EST
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|Date:||Jan 26, 1993|
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