The Andersons Inc. reported record first-quarter net income of $12.6 million ($.66 per diluted share) on sales of $722 million, compared to the year-ago income of $3.9 million ($.27 per diluted share) on sales of $697.4 million.
The record quarter was driven by the Grain & Ethanol Group, which reported operating income of $20.7 million, up from the year-ago $5.7 million. Sales moved up to $521 million from the year-ago $481 million.
“We are pleased to be able to report record earnings,” said CEO Mike Anderson. “The Grain & Ethanol Group led our results with strong performance in all three areas – grain, ethanol, and the Lansing Trade Group investment. As I review these results, I am again reminded that our strategy of purposeful diversification allows us to remain a strong and profitable company even when one or more of our business units is continuing to feel the after effect of last year’s recession.”
The Plant Nutrient Group had first-quarter operating income of $700,000 on revenues of $103 million, versus the year-ago income of $2 million on revenues of $112 million. While revenues decreased due to lower average selling prices, tons sold were up almost 10 percent. The company said early 2009 margins were favorably impacted by high margins on deferred sales and prepay contracts from 2008. Margins have now returned to more normal levels and are meeting company expectations.
Anderson told analysts that the Plant Nutrient Group has now been profitable in the first quarter for four years, in what was previously a lost quarter. He said for the year, volumes may be up in the vicinity of 20 percent of 2009.
“On the farm center business, first quarter is always weak, and although the weather has been ideal in February it wasn’t all that great in the north here in the first part of the year,” said Anderson. “And in the south … we had the problem with the Florida freeze, so that had a little negative impact, but we’re getting back on track there. So we’re just really excited about where we’re sitting at the present time with our agricultural fertilizer business.”
Anderson said the Turf & Specialty Group continues to perform well as it strives to achieve another record year.
The Rail Group saw a slight increase in income, to $1 million on sales of $27 million, compared to the year-ago $900,000 and $27 million.
The Turf and Specialty Group saw a slight decrease in income, to $2.7 million on sales of $42 million from the year-ago $3.1 million and $45 million. The Retail Group had an operating loss of $2.8 million on sales of $30 million, versus the year-ago loss of $2.7 million on sales of $31 million.
In other news, on April 30 the company finalized the acquisition of the assets of O’Malley Grain Inc.’s two grain cleaning and storage facilities in Mansfield, Ill., and Fairmont, Neb.
In addition, the company reports that Risk Metrics Group of ISS Proxy Advisory Services, an independent proxy advisory service, has issued its proxy analysis and vote recommendation “for” the company’s proxy proposals to re-elect the board of directors, to approve the auditor, and to increase its authorized shares of common stock. The request proposes increasing the number of authorized shares of common stock, no par value, by 17 million shares – from 25 million to 42 million shares – during the company’s annual meeting of shareholders on May 7, 2010. The company’s current 1 million shares of authorized preferred stock, no par value, would be unchanged. At this time the company has no plans to issue the additional common shares.
“While we have no current plans to issue any additional shares, we believe the proposed increase in the number of shares available for issuance will allow the company additional flexibility,” said Nick Conrad, The Andersons’ vice president, finance & treasurer.