The Andersons posts first-quarter results

By Bryan Sims | April 08, 2008
Web exclusive posted May 8, 2008 at 4:31 p.m. CST

The Andersons Inc. posted a net income of $7.8 million on revenues of $713 million for the first quarter of 2008 ending March 31, compared with a net income of $9.2 million on $707 million on revenues the same quarter a year ago.

The company's Grain & Ethanol Group took a hit during the quarter, reporting operating income of $2.2 million, which was significantly less than the same quarter in 2007, which was $10.2 million. In the first quarter 2007, the segment had $4.1 million more in non-recurring development fees associated with its ethanol plants. The company also noted that "the grain business suffered a significant basis loss during the quarter as the cash markets for corn, beans and wheat did not rise at the same pace as the futures market."

Conversely, income from its ethanol plant joint ventures grew during the quarter due in part to its two facilities in Albion, Mich., and Clymers, Ind., and the opening of its newest plant in Greenville, Ohio, in February. Last year only the Albion facility was in operation during the same quarter last year.

What the company lost in its ethanol and grain division, it made up in increased profit from its Plant Nutrient Group and rail businesses. The rail group's operating income of $6.4 million in the quarter was more than double the $3 million earned during the first quarter of 2007, while revenues of $35 million for the quarter were $9 million higher.

The plant nutrient group achieved record operating income of $7.5 million on revenues of $105 million - which is unprecedented for the company as it's typically a break-even or loss period.

"We feel good about our overall performance so far this year," said Mike Anderson, president and chief executive officer for The Andersons. "Our grain and ethanol group was impacted in the first quarter by a reduction in basis that has started to return in April. We anticipate regaining the majority of this back later in the year since we expect basis levels to improve. We were pleased this quarter that we were able to adjust both our long and short term debt to respond to the increasing commodity prices."

The Andersons is a diversified company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture as well as in railcar leasing and repair, turf products production and general merchandise retailing. Headquartered in Maumee, Ohio, the company now has operations in 10 U.S. states and Puerto Rico, including rail equipment leasing interests in Canada and Mexico.

To learn more about The Andersons, visit www.andersonsinc.com/ag/index.htm.