Andersons Inc. (ANDE, Financial) filed Quarterly Report for the period ended 2009-03-31.
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 $391.7 million; its shares were traded at around $21.5 with a P/E ratio of 12.2 and P/S ratio of 0.1. The dividend yield of Andersons Inc. stocks is 1.6%. Andersons Inc. had an annual average earning growth of 23.8% over the past 5 years.
Operating results for the Rail Group decreased $5.5 million over the results from the same period last year. Leasing revenues decreased $1.0 million, car sales decreased $5.3 million and sales in the Groups repair and fabrication shops decreased $1.9 million. The decrease in leasing revenues is attributable to a significant decrease in utilization as well as decreasing lease rates for renewals. Fewer cars were sold in the first quarter of 2009 compared to the same period in 2008 and with fewer cars on the rail lines overall, the opportunities for business in the repair and fabrication shops has significantly decreased.
Gross profit for the Group decreased $5.4 million, or 49% over the same period last year. Gross profit in the leasing business decreased $2.7 million, or 38%, and can be attributed to the decreased utilization and increased maintenance expense compared to the same period last year. Gross profit on car sales decreased $1.9 million, or 84%, and is attributable to fewer cars sold and lower scrap prices. Gross profit in the repair and fabrication shops decreased $0.8 million, or 46%.
As a result of the above, income attributable to The Andersons, Inc. of $5.0 million for the first quarter of 2009 was $2.8 million lower than income attributable to The Andersons, Inc. of $7.8 million recognized in the first quarter of 2008. Income tax expense of $2.8 million was provided at 36.2%. The Company anticipates that its 2009 effective annual rate will be 36.6%. In the first quarter of 2008, income tax expense of $4.6 million was provided at a rate of 37.0%. The Companys actual 2008 effective tax rate was 33.4%.
The Companys operations used cash of $50.3 million in the first three months of 2009, a change from a use of cash of $222.5 million in the first three months of 2008. Net working capital at March 31, 2009 was $326.2 million, a $4.5 million decrease from December 31, 2008 and a $50.9 million increase from March 31, 2008. Short-term borrowings used to fund operations decreased $364.8 million compared to the same period in 2008. This significant decrease in short-term borrowing needs is due to the decrease in commodity prices and fertilizer from the unprecedented highs experienced in 2008.
In addition to spending on conventional property, plant and equipment and business acquisitions, the Company expects to spend $75.0 million for the purchase of railcars and locomotives and capitalized modifications of railcars partially offset by proceeds from the sales and dispositions of railcars of $65.0 million. Through March 31, 2009, the Company invested $5.6 million in the purchase of additional railcars and related leases, partially offset by proceeds from sales of $2.4 million.
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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 $391.7 million; its shares were traded at around $21.5 with a P/E ratio of 12.2 and P/S ratio of 0.1. The dividend yield of Andersons Inc. stocks is 1.6%. 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 increased $3.5 million over the results from the same period last year. Sales of grain for the Group decreased $29.5 million, or 7%, and is the result of a 10% decrease in the average price per bushel of grain sold, partially offset by a 3% increase in the volume of grain sold (primarily corn). Sales of ethanol decreased $9.5 million, or 9%, and is due to an 18% decrease in the average price per gallon sold, partially offset by an 11% increase in volume. Merchandising revenues for the Group increased $19.5 million over the first quarter of 2008 and is related primarily to an increase 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 quarter of 2008, futures prices rose at a substantially higher rate than the 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 first quarter of 2009, futures prices went the opposite direction in relation to local spot prices and the Company incurred gains on its forward purchase and sale contracts as well as its inventory. As these contracts are considered derivatives and recorded at estimated fair value until the contracts are eventually settled, there is a possibility that the Group will lose some of these basis gains before the end of the year. Revenues from services provided to the ethanol industry were $5.1 million, a 21% increase over 2008. The increase is due to having three operational plants for the full first quarter of 2009. The Andersons Marathon Ethanol LLC (TAME) began producing ethanol in the middle of the first quarter of 2008 and therefore, the Company only received marketing and grain origination fees related to that plant for a partial quarter in 2008.Operating results for the Rail Group decreased $5.5 million over the results from the same period last year. Leasing revenues decreased $1.0 million, car sales decreased $5.3 million and sales in the Groups repair and fabrication shops decreased $1.9 million. The decrease in leasing revenues is attributable to a significant decrease in utilization as well as decreasing lease rates for renewals. Fewer cars were sold in the first quarter of 2009 compared to the same period in 2008 and with fewer cars on the rail lines overall, the opportunities for business in the repair and fabrication shops has significantly decreased.
Gross profit for the Group decreased $5.4 million, or 49% over the same period last year. Gross profit in the leasing business decreased $2.7 million, or 38%, and can be attributed to the decreased utilization and increased maintenance expense compared to the same period last year. Gross profit on car sales decreased $1.9 million, or 84%, and is attributable to fewer cars sold and lower scrap prices. Gross profit in the repair and fabrication shops decreased $0.8 million, or 46%.
As a result of the above, income attributable to The Andersons, Inc. of $5.0 million for the first quarter of 2009 was $2.8 million lower than income attributable to The Andersons, Inc. of $7.8 million recognized in the first quarter of 2008. Income tax expense of $2.8 million was provided at 36.2%. The Company anticipates that its 2009 effective annual rate will be 36.6%. In the first quarter of 2008, income tax expense of $4.6 million was provided at a rate of 37.0%. The Companys actual 2008 effective tax rate was 33.4%.
The Companys operations used cash of $50.3 million in the first three months of 2009, a change from a use of cash of $222.5 million in the first three months of 2008. Net working capital at March 31, 2009 was $326.2 million, a $4.5 million decrease from December 31, 2008 and a $50.9 million increase from March 31, 2008. Short-term borrowings used to fund operations decreased $364.8 million compared to the same period in 2008. This significant decrease in short-term borrowing needs is due to the decrease in commodity prices and fertilizer from the unprecedented highs experienced in 2008.
In addition to spending on conventional property, plant and equipment and business acquisitions, the Company expects to spend $75.0 million for the purchase of railcars and locomotives and capitalized modifications of railcars partially offset by proceeds from the sales and dispositions of railcars of $65.0 million. Through March 31, 2009, the Company invested $5.6 million in the purchase of additional railcars and related leases, partially offset by proceeds from sales of $2.4 million.
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