September 09, 2008 12:08 ET

GROWMARK Reports Estimated Year-End Financial Results

CHICAGO, ILLINOIS--(Marketwire - Sept. 9, 2008) - GROWMARK officials reported unaudited, estimated results for the fiscal year that ended August 31, 2008 at the regional co-operative's annual meeting in Chicago last Friday. Vice President of Finance Jeff Solberg announced sales of $6.3 billion for the 2007-08 fiscal year, an all-time record. GROWMARK net income is estimated to be $312 million, also an all-time record.

"The results from operations include our traditional wholesale divisions of Seed, Plant Food, Crop Protection, Energy, and Facility Planning," Solberg said. "GROWMARK sales are now 20 percent retail with the operations of GROWMARK FS and Seedway, both in the Northeast; AgVantage, New Century, and STAR Energy in Iowa; FS Partners in Ontario; and Illini FS."

More than $121 million in patronage refunds will be returned to GROWMARK member cooperatives. "The results being achieved are producing the highest income in the history of your company," Solberg told GROWMARK shareholders.

Agronomy/Seed Divisions

Plant food product prices were the highest on record for fertilizer products. High corn and soybean prices supported strong application rates, and the Plant Food Division posted its second highest income ever.

"Price risk management has emerged as a key component of managing this business," Solberg said. "Our objective is to provide 'best in class' market information and firm price recommendations." GROWMARK's market information and price recommendations provide guidance for FS member cooperatives' plant food purchases.

A 20 percent sales increase and record income in 2008 were posted by the Crop Protection Division. Adjuvant sales improved 25 percent, thanks in part to the launch of an expanded FS product line.

The GROWMARK Seed Division reported significant growth. Sales topped $180 million and gross income improved 15 percent. System supported seed brands were placed on an additional 250,000 acres in 2008, Solberg said.

Energy Division

The Energy Division posted its third year of gross income exceeding $100 million. The division enhanced refined fuel distribution operations with the purchase of a Menard County, Ill. terminal. Propane recorded record volume in 2008, for the second year in a row.

GROWMARK sales of FS branded lubricant products, as well as the United and Archer brands, are increasing, led by a 20 percent increase in the top quality FS brand.

Grain Division

Western Grain Marketing, LLC (WGM) began operations in February 2008 and construction of a unit train shuttle loader in Adair, Ill. is progressing. This partnership between Two Rivers FS, Inc., RIVERLAND FS, Inc., West Central FS, Inc., and GROWMARK is expected to be fully functional for the 2009 harvest season.

Total Grain Marketing, LLC (TGM) recorded a strong second year of operations. The partnership between GROWMARK, Effingham-Clay Service Company, and Wabash Valley Service Company operates 21 locations in multiple counties with access to over 40 markets.

Facility Planning and Supply Division

The cooperative's Facility Planning and Supply Division posted increases in sales and gross income. The division acquired new facilities in Waterloo, Iowa to add capacity and convenience for tank and truck manufacturing. Sales of large application equipment also reached record levels.

Subsidiary Operations

GROWMARK FS, the retail agronomy subsidiary in the Northeast, had record sales and record income. A focus on improved efficiency and acquisition opportunities contributed to higher profitability.

Seedway, a vegetable and farm seed business headquartered in Hall, NY, produced its sixth straight year of higher sales and profitability.

Despite significant flooding this spring, GROWMARK's Iowa retail units (AgVantage, New Century, and STAR Energy) reported strong profitability. Illini FS, the retail division of GROWMARK, will pay patronage again this year, 50 percent in cash and 50 percent in stock.

"The GROWMARK Board and FS member cooperatives have supported significant change in our business structure and operations over the past decade." Solberg said. "The results prove we are not just surviving, we are thriving because of our ability to be creative and our willingness to change."

Contact Information