GROWMARK, Inc.

GROWMARK, Inc.

September 08, 2010 11:28 ET

GROWMARK Reports Estimated Year-End Financial Results

CHICAGO, ILLINOIS--(Marketwire - Sept. 8, 2010) - GROWMARK officials reported unaudited, estimated results for the fiscal year that ended August 31, 2010 at its Annual General Meeting in Chicago on Aug 27. Senior Vice President of Finance Jeff Solberg announced sales of $6 billion (US) for the 2009-2010 fiscal year. GROWMARK net income is estimated to be $81 million.

"Fiscal 2010 was another good year in a series of good years," he said. "The result of this strong performance is a very strong balance sheet with a sound equity base built on a substantial layer of retained earnings, which minimizes the stock investment required of members, which is supplemented by a prudent level of long-term debt."

An estimated $55 million in patronage refunds will be returned to GROWMARK member cooperatives in the cooperative's Plant Food, Crop Protection, Seed, Energy, and Facility Planning & Supply business units.

Agronomy/Seed Divisions The Plant Food Division staged a strong comeback after a relatively weak prior year. Operating gross income is the second highest on record and volumes rebounded significantly from 2009, as prices declined and product became more affordable for farmers.

"The late harvest in 2009 prevented the majority of fall tillage and plant food applications," Solberg said. "Fortunately, April provided a window of opportunity to complete the extra work. Our FS cooperatives proved their ability to move massive quantities of product to the field."

The performance of the Crop Protection Division has been very strong the last three years, and the outlook is positive.

The Seed Division generated another year of growth in seed corn units, while soybean seed sales units ended the year flat as compared to last year. However, the Seed Division has achieved solid profitability and will pay patronage for the fifth year in a row.

Energy Division The Energy Division had a very strong year with volume increases in all products. Propane volume reached nearly 310 million gallons, an all-time record for the GROWMARK System, due to the wet harvest conditions of 2009.

"The demand surge for grain drying stressed the industry's distribution capabilities, but the GROWMARK Energy and Logistics Divisions performed exceedingly well to deliver the volume," Solberg said.

Grain Division

GROWMARK has made significant investments in its retail grain business segment, which produced $800 million in sales and pretax income of $16 million in 2010. All four retail grain units – Total Grain Marketing, WESTERN GRAIN MARKETING, NORTHERN GRAIN MARKETING, and Great Lakes Grain – were profitable.

Facility Planning and Supply Division The cooperative's Facility Planning and Supply Division expanded its scope and offerings in 2010 with heavy demand for bulk seed installation and many new farm and commercial grain dryers.

Grain bin sales and construction continues to be a strong business along with sales of facility equipment products. Sprayers, spreaders, and other equipment need regular replacing, and GROWMARK has relationships with major manufacturers to fill those needs.

Retail Operations GROWMARK's retail supply business segment enjoyed another good year, producing $1 billion in sales and $18 million in pretax income.

"Change has been the strategic theme for this decade," Solberg said. "More change has occurred in this decade than in any other in our history, and that change has produced record levels of success and profitability for the GROWMARK System."

GROWMARK is a regional cooperative providing agriculture-related products and services, as well as grain marketing in Ontario and 23 states in the United States. GROWMARK owns the FS trademark, which is used by affiliated member cooperatives. The FS brand represents knowledgeable, experienced professionals acting with integrity and dedication to serve more than 100,000 customers. More information is available at www.growmark.com

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