The Andersons Inc.
) gained around 1% and closed at $86.19 on Feb 11, after the
company posted record fourth-quarter 2013 earnings. The company's
earnings per share increased an impressive 104% to $1.08 from 53
cents (adjusted to reflect the company's Feb 2014 three-for-two
stock split) earned in the year-ago quarter. However, the
reported figure fell short of the Zacks Consensus Estimate of
Revenues in the reported quarter declined 5.9% year over year to
$1.6 billion. The results were in line with Zacks Consensus
Estimate of $1.68 billion.
Cost of sales fell 7% to $1.47 billion from $1.58 billion in the
year-ago quarter. Gross profit improved 20% year over year to
$109 million. Consequently, gross margin expanded 150 basis
points (bps) to 6.9% in the quarter.
Operating, administrative and general expenses went up 23% year
over year to $85.8 million. Operating profit grew 10.3% to $23.8
million. Thus, operating margin expanded 20 bps to 1.5% in the
The Grain Group
: Revenues decreased 8.3% year over year to $1.1 billion.
Operating income increased 22% to $22.1 million.
The Ethanol Group
: Revenues decreased 8.3% year over year to $197 million. The
segment reported record operating income of $26.6 million, a
substantial improvement from a loss of $0.8 million in the
The Plant Nutrient Group
: The segment reported revenues of $171 million, down 4% from the
year-ago quarter. Its operating profit came in at $6.2 million
against $4.7 million in the prior-year quarter.
The Rail Group
: Revenues rose 10% year over year to $32 million. Operating
income declined 27.9% to $6.2 million from $8.6 million in the
The Turf & Specialty Group
: The segment posted revenues of $23 million, marking a 9.5%
year-over-year increase. The segment reported an operating loss
of $1.4 million, wider than the year-ago quarter loss of $1.2
The Retail Group
: Revenues in the segment decreased 9.5% year over year to $37.3
million. Operating loss in the quarter was $3.8 million, wider
than the loss of $0.8 million in the prior-year quarter.
Andersons ended 2013 with cash and cash equivalents of $309
million, up from $138 million as of 2012-end. The long-term debt
of the company decreased to $375 million as of Dec 31, 2013 from
$427 million as of Dec 31, 2012. Consequently,
debt-to-capitalization ratio contracted 500 bps to 37% as of Dec
31, 2013 from year-ago comparable period.
Fiscal 2013 Performance
For full-year 2013, Andersons reported earnings per share of
$3.18, up 12.7% from $2.82 (adjusted to reflect the company's Feb
2014 three-for-two stock split) in 2012. The results missed the
Zacks Consensus Estimate of $4.74.
Revenues for the year 2013 increased 5.7% year over year to $5.6
billion. Revenues were in line with the Zacks Consensus Estimate.
On Dec 2013, Andersons announced that its Board has approved a
three-for-two split to enhance the liquidity of shares.
Shareholders will receive one additional share for every two
shares they hold on the record date of Jan 21, 2014, in the form
of a dividend to be distributed as of the close of business of
In addition, the Board had approved a first-quarter 2014 cash
dividend of 16.5 cents per share, which was paid on Jan 23, 2014
to shareholders of record on Jan 2, 2014.
In December, Andersons finalized the acquisition of the
granulation manufacturer, Cycle Group, Inc. The company purchased
the assets of Cycle Group to expand the Turf & Specialty
Group's granulation business geographically. In addition, the
acquisition will increase the production and distribution
capabilities in the high-value markets of the granular business
and help to serve customers better.
Andersons will continue to benefit from other acquisitions in the
past year. The acquisition of Blenheim, Ontario-based Thompsons
Ltd., a grain and food-grade bean handler and Mile Rail, LLC, a
provider of agronomy input as well as railcar repair and cleaning
equipment will be accretive to earnings for full-year 2014.
Though margins improved in the ethanol business, the company
cautions that the ethanol market will continue to be volatile.
According to reports, the U.S. Environmental Protection Agency
(EPA) is considering a reduction in the amount of ethanol
required to be blended with gasoline in 2014. If the proposed
reduction is adopted, it would affect ethanol producers like
Maumee, Ohio-based Andersons is a diversified company operating
in six different business segments ranging from buying, selling
and storing grain to leasing railcars and running retail stores
catering to the latest home hardware needs.
Andersons currently carries a short-term Zacks Rank #3
(Hold). Some better-ranked stocks in the sector include
Gruma S.A.B. de CV
Amira Nature Foods Ltd.
Calavo Growers Inc.
). While Gruma S.A.B. de CV sports a Zacks Rank #1 (Strong Buy),
Amira Nature Foods and Calavo Growers have a Zacks Rank #2
ANDERSONS INC (ANDE): Free Stock Analysis
AMIRA NATURE FD (ANFI): Free Stock Analysis
CALAVO GROWERS (CVGW): Free Stock Analysis
GRUMA SA-ADR B (GMK): Free Stock Analysis
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