The Andersons reports record Q1 results

Maumee, Ohio — Fueled by increased earnings from its Grain, Rail, and Plant Nutrient divisions, The Andersons Inc. reported record net income of $18.4 million ($0.98
per diluted share) on revenues of $1.1 billion for the first quarter ending March 31, 2012, compared with $17.3 million in net income ($0.93 per diluted share) on $1 billion in revenues in last year’s first quarter. The Plant Nutrient Group posted operating income of $5.8 million on revenues of $175 million for the quarter, compared with $5.1 million and $124 million, respectively, in last year’s first quarter. The income improvement was attributed entirely to increased volumes following good application weather this March and pent-up demand that carried over from a wet fall season. Margins for the group were down slightly from the prior year due to lower price appreciation. While acknowledging the good first-quarter performance, CEO Mike Anderson cautioned that “the second quarter will be challenging, primarily due to the expectation of a significant drop in wheat space income in the Grain Group.” Anderson also said lower margins are expected during the second quarter in both the Ethanol and Plant Nutrient groups. “We do believe, however, that these factors will be partially offset by significantly increased performance in Rail. Overall, we expect 2012 to be our second best year ever,” he said. CFO Harold Reed told analysts the company has seen little forward buying of fertilizer tons. “It’s quite hand-to-mouth,” he said. “We’re not interested in carrying too much more product than we figure we’re going to use here in this busy spring. We’re going to try to regroup in the summer and see what prices do.” Given the early crop, however, Reed said the Plant Nutrient Group “could see a pretty good sized fourth quarter” in terms of fertilizer applications. “It will be an interesting equation between probably lower corn prices and probably larger demand to put fall nutrients down,” he said. “So it’ll be a balance for the fall, but it’s hard to tell about prices right now.” As for the 2012 crop mix in the company’s trade area, Reed said there has been virtually no shift from corn to soybeans. Anderson added, however, that the earlier-than-normal spring may result in more double-crop soybeans planted after the winter wheat harvest.