Milling & Baking News - March 14, 2006 - 13

F I N A N C I A L

R E S U L T S

Tasty Baking yearly net climbs
behind strong sales growth
PHILADELPHIA - Net income of Tasty
Baking Co. in the year ended Dec. 31,
2005, was $1,843,000, equal to 23c per
share on the common stock, up 48% from
$1,243,000, or 15c per share, in 2004.
Net sales were $172,273,000, up 8%
from $159,061,000 in 2004. Route net
sales for the year were up 6% versus
fiscal 2004. Non-route sales for the
year were up 18%.
"The company delivered strong net
sales growth in both the route and nonroute areas in 2005 while continuing to
execute against the Strategic Transformation Plan," said Charles P. Pizzi, president and chief executive officer. "This
strong net sales growth was largely offset by cost inflation experienced in the
second half of 2005."
In the fourth quarter ended Dec. 31,
Tasty Baking earned $167,000 on sales of
$44,964,000, which compared with a loss
of $112,000 on sales of $39,218,000 during the final period last year.
"The fourth quarter was negatively
impacted by higher fuel and energy
costs," said David S. Marberger, senior
vice-president and chief financial offi-

cer. "These costs impacted the company
directly in the areas of operations and
transportation, as well as through increased packaging costs from suppliers.
In response to these economic factors,
the company initiated a price increase
across the Tastykake product line effective January 2006. We believe
this action will enable
the company to offset
the inflation it has been
experiencing, while allowing the business to improve gross margins in 2006."
Fourth-quarter gross margin was
29.6%, a 1.7-point improvement from the
fourth quarter of 2004. Increased freight
and transportation expense as a result of
higher fuel costs and the increase in case
shipments contributed to a 13% increase
in selling, general and administrative expenses versus the fourth quarter of 2004.
Tasty Baking said the increases were
partially offset by a reduction in pension
and retiree medical expense.
Consistent with the company's Strategic Transformation Plan, Mr. Pizzi said
Tasty Baking has focused on building a

The Andersons posts higher earnings
and sales for 2005
MAUMEE, OHIO - The Andersons, Inc. reported 2005 net income of $26,087,000, equal
to $3.52 per share on the common stock, on
sales of $1,296,652,000, compared with net
earnings of $19,144,000, or $2.64 per share,
on sales of $1,266,932,000 in 2004.
The company's income was up 36%
for the year, while sales increased 2%. For
the fourth quarter ended Dec. 31, 2005,
net income was $15,336,000, up 85% from
$8,280,000 a year earlier. Fourth-quarter sales were $384,171,000, up 4% from
$369,962,000 the previous year. Earnings
per share were $1.98 compared with $1.09
in the fourth quarter of 2004.
"The operating results our company
achieved in the fourth quarter and full
year were impressive," said Mike Anderson, president and chief executive officer.
"We've also set the stage for continued income growth.
"With our entry into ethanol, continued
growth in rail, and the improvement we
demonstrated in all of our other businesses
during the most recent quarter, I believe that
our company's future looks pretty bright."
Construction of an ethanol production
facility is under way in Michigan, and the
company recently said it planned to build
14 / Milling & Baking News, March 14, 2006

another ethanol plant in Indiana. The company will manage both plants, which will
have a total capacity to produce 165 million
gallons of ethanol annually. It also will provide grain origination, marketing, risk management and other services. The Andersons
also has minority interest in another ethanol
plant now under construction in Indiana.
The company said its Agriculture Group
fourth quarter and full 2005 income were record large. Fourth-quarter operating income
for the segment was $16,421,000, up 41%
from $11,622,000 a year earlier, on sales of
$275,945,000, down 3% from $284,004,000 in
2004. For the year, Agriculture Group income
of $22,974,000 was up 8% from $21,302,000
the previous year, on sales of $899,329,000,
down slightly from $901,139,000 in 2004.
However, in the Grain Division part of
the Agriculture Group, operating income
was up significantly in the fourth quarter,
but was down for the year. But the Plant
Nutrient Division set an income record for
the full year.
The Rail Group had operating income of
$9,542,000 in the fourth quarter of 2005, nearly
3.5 times the operating income of $2,779,000
in the same quarter a year earlier. Sales for
the quarter, at $33,455,000, were more than

platform to deliver "sustainable, longterm sales and profit growth."
"We are pleased with the progress we
have made to date in building a stronger
team, delivering new products and better
marketing, enhancing technology, and
improving the debt structure," he said.
Commenting in a Feb. 28 conference
call, Mr. Pizzi said products launched
within the past two years represented
approximately 11% of
the company's sales
in 2005.
"Sugar-free
Tastykake Sensables,
launched in late 2004,
delivered $8 million in sales in 2005,"
Mr. Pizzi said. "In addition, in the geographies served by our D.S.D. system,
6 of the top 10 new products in the
overall sweet baked goods category
in 2005 were delivered by Tasty Baking Co. Our new Chocolate and Vanilla
Lovers Cupcake ranked first and second on that list, respectively."
Because of price increases implemented in January, Tasty Baking said
it expects total sales volume to decline
approximately 8% to 10% in fiscal
2006. The volume decline will result
in a net sales change of 0% to 2%, the
company said. MBN

double the sales of $15,685,000 the previous
year. For the full year, the Rail Group's income was $22,822,000, more than twice the
$10,986,000 recorded during the same period
in 2004. Sales for the year, at $92,009,000, were
up 55% from $59,283,000 for 2004.
"The rail leasing business continued to
achieve operating income growth during
the most recent three-month period and
full year," the company said. "The size of
the group's fleet also continued to grow in
2005. From about 14,600 cars controlled by
the group in December 2004, the fleet was
increased to more than 19,000 railcars by the
end of 2005."
The Retail Group had income of $2,003,000
in the fourth quarter, more than twice the
$951,000 a year earlier. Sales for the group
were $52,792,000 for the quarter, up 9%
from $48,535,000 a year earlier. For the year,
the Retail Group had income of $2,921,000,
up about 39% from $2,108,000 in 2004. Sales
for the full year were $182,752,000, up 2%
from $178,696,000 in 2004.
The company's Turf and Specialty Group
had a net loss of $1,486,000 in the fourth
quarter, compared with a loss of $2,515,000
a year earlier. For the year, the group had a
loss of $3,044,000, compared with a loss of
$144,000 in 2004. Sales for the quarter were
$21,979,000, up 1% from $21,738,000 in 2004.
Full-year sales of $122,561,000 were down
4% from $127,814,000 the previous year. MBN
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - March 14, 2006

Table of Contents for the Digital Edition of Milling & Baking News - March 14, 2006