Andersons Inc. (ANDE) filed Quarterly Report for the period ended 2009-09-30.
The Andersons Inc. is a diversified company operating in three segments. The Agriculture Group engages in grain merchandising operates grain elevator facilities distributes wholesale agricultural fertilizer and operates retail farm centers. The Processing and Manufacturing Group includes the processing of lawn and corn-cob based products; the purchase sale repair and leasing of railcars; and the operation of automotive service centers. Andersons Inc. has a market cap of $487.1 million; its shares were traded at around $25.37 with and P/S ratio of 0.2. The dividend yield of Andersons Inc. stocks is 1.4%. Andersons Inc. had an annual average earning growth of 23.8% over the past 5 years.
Highlight of Business Operations:
Operating results for the Grain & Ethanol Group decreased $0.6 million over the results from the same period last year. Sales of grain for the Group decreased $165.8 million, or 33%, and is the result of a 32% decrease in the average price per bushel of grain sold, and a 2% decrease in the volume of grain sold. Sales of ethanol decreased $29.2 million, or 23%, and is due to a 27% decrease in the average price per gallon sold partially offset by a 5% increase in volume. Merchandising revenues for the Group decreased $5.3 million over the third quarter of 2008 and is related primarily to a decrease in basis income. Basis is the difference between the local market price of a commodity and the Chicago Board of Trade futures price. During the first half of 2008, futures prices for corn and wheat rose at a substantially higher rate than local spot prices. This caused the Group to incur basis losses on its forward purchase and sale contracts as well as its inventory. In the second half of 2008, futures prices went the opposite direction in
Operating results for the Plant Nutrient Group decreased $10.0 million over the same period last year. Sales and merchandising revenues decreased $91.6 million, or 57%, due to a combination of a 12% decrease in volume and a 51% decrease in the average price per ton sold. The decrease in volume is due to retailers continuing to maintain lower inventory holdings. The decrease in the average price per ton sold is due to the unprecedented market price for fertilizers experienced during the first nine months 2008. Gross profit for the Group decreased $13.5 million, or 62%, as a result of the significant decrease in margin per ton sold as well as the volume reduction mentioned previously.
Operating results for the Turf & Specialty Group increased $0.2 million over results from the same period last year. Sales and merchandising revenues in the lawn fertilizer business decreased $1.4 million, or 7%, due primarily to sales in the professional line of business. Sales in this line of business decreased $2.5 million, or 16%, as a result of a 19% decrease in the average price per ton sold, partially offset by a 4% increase in volume. Sales within the consumer and industrial lines of business increased $1.2 million, or 38%, as a result of a 44% increase in volume, partially offset by a 4% decrease in the average price per ton sold. Sales in the cob business decreased $0.3 million, or 8%, over the third quarter of 2008 due to a combination of a 7% decrease in volume and a 2% decrease in the average price per ton sold. Gross profit
Operating results for the Retail Group decreased $2.1 million over results from the same period last year. Sales and merchandising revenues decreased $3.9 million, or 10%, over the third quarter of 2008 as a result of a 5% decrease in the average sale per customer as well as a 5% decrease in customer counts. Gross profit decreased $1.4 million, or 12% due primarily to the decrease in sales. Operating expenses for the Group increased 6% and is directly attributable to $0.8 million of severance costs which have been accrued in relation to the fourth quarter closing of the Group’s Lima, Ohio retail store.
As a result of the above, income attributable to The Andersons, Inc. of $1.3 million for the third quarter of 2009 was $11.5 million lower than income attributable to The Andersons, Inc. of $12.8 million recognized in the third quarter of 2008. Income tax expense of $0.7 million was provided at 35.4%. The Company anticipates that its 2009 effective annual rate will be 36.7%. In the third quarter of 2008, income tax expense of $6.6 million was provided at a rate of 34.0%. The Company’s actual 2008 effective tax rate was 33.4%.
Operating results for the Grain & Ethanol Group decreased $8.1 million over the results from the same period last year. Sales of grain for the Group decreased $367.2 million, or 25%, and is the result of a 24% decrease in the average price per bushel of grain sold, and a 2% decrease in the volume of grain sold. Sales of ethanol decreased $64.2 million, or 18%, and is due to a 22% decrease in the average price per gallon sold, partially offset by a 5% increase in volume. Merchandising revenues for the Group increased $16.2 million over the first nine months of 2008 and is related primarily to an increase in basis and storage income. Basis is the difference between the local market price of a commodity and the Chicago Board of Trade futures price. During the first half of 2008, futures prices for corn and wheat rose at a substantially higher rate than the local spot prices. This caused the Group to realize significant basis losses on its forward purchase and sale contracts as well as its inventory. In the first half of 2009, futures prices went the opposite direction in relation to local spot prices and the Company realized gains on its forward purchase and sale contracts as well as its inventory. Some of these gains were lost during the third quarter of 2009 as basis levels began to come down and as basis appreciation for soybeans was pushed into the fourth quarter of 2009 due to a delayed harvest as a result of weather conditions. Revenues from services provided to the ethanol industry were $1.0 million higher than the same period last year as a result of serving three operational facilities for the full nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 during which the third facility began operations.
Rate This Article: |
  |