About The Andersons Inc

The Andersons earns its daily bread on a mix of grains, trains, and corncobs. The agricultural company's main businesses -- its Grain and Ethanol segments -- consist of the buying, conditioning, and reselling of corn, soybeans, and wheat, which it acquires from US grain farmers and stores. To support the operation, it uses a system of elevators and terminals located in the Midwest. Its Grain and Ethanol units account for about three-quarters of annual sales. The Andersons also boasts Plant Nutrient and Rail groups. The agricultural firm operates in some 15 US states, as well as in Puerto Rico. The company also has rail-leasing interests in Canada and Mexico.

Operations

The Anderson operates through five business segments: Grain Group (60% of sales), Plant Nutrient Group (about 20%), Ethanol Group (about 15%), and the Retail and Rail groups (the remainder).

Its Grain Group is a significant investor in Lansing Trade Group, an established commodity trading, grain handling, and merchandising business with operations nationwide and with global trading/merchandising offices. The Andersons holds an 85% interest in The Andersons Denison Ethanol LLC (TADE), a 53% interest in The Andersons Albion Ethanol LLC (TAAE), and a 39% interest in The Andersons Clymers Ethanol LLC (TACE). Also the company has a 50% stake in The Andersons Marathon Ethanol LLC (TAME) through its majority-owned subsidiary The Andersons Ethanol Investment LLC (TAEI). A third party owns 34% of TAEI.

The Plant Nutrient Group has farm centers located throughout the US corn belt and Florida and Puerto Rico. The farm centers offer agricultural fertilizer, chemicals, seeds, supplies, and custom fertilizer application. The group also makes liquid anti-icers and deicers for use on roads and runways.

The company's Rail Group sells, leases, repairs, and reconfigures railcars and locomotives. The group also provides fleet management services and operates a custom steel-fabrication business.

The Andersons closed the Retail Group's last four retail home-center stores in 2017. Serving the Toledo and Columbus, Ohio, areas, the stores sold home-improvement products, nursery stock, groceries, beverages, and other items.

Geographic Reach

Based in Ohio, The Andersons' main agricultural operations are in Florida, Iowa, Minnesota, Nebraska, Puerto Rico, Tennessee, Texas, Wisconsin, Ohio, Indiana, Illinois, and Michigan. Its railcar operations, which include 16 repair facilities and a fabrication shop, are primarily in the Midwest, South, and West.

Financial Performance

After peaking at $5.6 billion in 2013, The Andersons' revenue has slipped each year since and hitting $3.9 billion in 2016 - a 7% drop from 2015.

Sales in each of the company's segments fell in 2016 with the biggest losses coming in its biggest businesses. The Grain Group's sales were off 5% because of limited storage in the eastern corn belt in the first nine months of 2016, which limited the company's space income. The Plant Nutrient Group's sales slid about 20% in 2016 from 2015 on lower base nutrient prices. In the Ethanol Group, a 3% decline in average ethanol sales price and a 15% decline in average distillers dried grain (DDG) sales price pushed revenue down 2% for the year. Sales in the Retail and Rail groups fell 4% each in 2016.

The Andersons posted a profit of about $12 million in 2016 after a net loss of about $13 million in 2015.

Cash flow from operations sank to about $40 million in 2016 from more than $150 million in 2015. The difference was related to changes in working capital, particularly accounts receivable and accounts payable. Although the company posted net income for 2016, its cash flow was affected by the 2015 loss, which included significant non-cash charges for goodwill impairment and the settlement of its defined benefit pension plan.

Strategy

The Andersons is looking to profit from macro-economic trends, including world population growth, escalating demand for protein, and increasing North American crop production. Its diverse agribusiness and industrial based activities are all exposed to these trends in one way or another, from handling bulk commodities to using its rail cars and logistics assets to move them.

In 2017, the company closed its retail business of four stores and more than 1,000 jobs. In a series of cost-cutting measures, the company cuts its workforce 10% and reduced its run rate costs by $10 million in 2016.

The Andersons put some of the savings into projects designed to increase efficiency. It has invested in improving IT operations in the Grain and Plant Nutrients groups, and it expanded an ethanol plant in Michigan for more processing capacity. In Illinois, it consolidated its corn cob operations into one facility.

The company combined its Turf & Specialty and Plant Nutrient groups in 2015 to foster growth and enhance profitability. It plans to grow the lawn and cob business by adding new products and technology, and by seeking out opportunities to acquire new businesses.

Mergers and Acquisitions

Continuing to diversify, the company acquired Auburn Bean & Grain, which added six grain and four agronomy locations in Central Michigan and increased storage capacity and volume for the grain and nutrient businesses. The acquisition fits geographically between the company's Ohio and Michigan assets and Thompsons joint venture in Ontario, Canada.

In 2015 The Andersons purchased Kay Flo Industries, Inc. and certain subsidiaries for $125.2 million, including working capital.

Company Background

The Andersons was founded in Maumee, Ohio in 1947.

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The Andersons Inc

1947 Briarfield Blvd
Maumee, OH 43537-1690
Phone: 1 (419) 893-5050
Fax: 1 (419) 891-6672

Stats

  • Employer Type: Public
  • Stock Symbol: ANDE
  • Stock Exchange: NASDAQ
  • President and CEO: Patrick E. Bowe
  • President and CEO: Patrick E. Bowe
  • CFO: John J. Granato
  • 2017 Employees: 1,843

Major Office Locations

  • Maumee, OH

Other Locations

  • San Diego, CA
  • Woodland, CA
  • Immokalee, FL
  • Lake Placid, FL
  • Manly, IA
  • Milford, IA
  • Champaign, IL
  • Mansfield, IL
  • Delphi, IN
  • Dunkirk, IN
  • Galveston, IN
  • Indianapolis, IN
  • Logansport, IN
  • North Manchester, IN
  • Oakville, IN
  • Waterloo, IN
  • Albion, MI
  • Hemlock, MI
  • Jonesville, MI
  • Litchfield, MI
  • Oakley, MI
  • Standish, MI
  • Webberville, MI
  • White Pigeon, MI
  • Kansas City, MO
  • Bay Saint Louis, MS
  • Mocksville, NC
  • Fairmont, NE
  • Gibbon, NE
  • Kearney, NE
  • Paxton, NE
  • North Las Vegas, NV
  • Bowling Green, OH
  • Carey, OH
  • Columbus, OH
  • Fostoria, OH
  • Fremont, OH
  • Gibsonburg, OH
  • Greenville, OH
  • Metamora, OH
  • Sylvania, OH
  • Toledo, OH
  • Warren, OH
  • Darlington, SC
  • Paris, TN
  • Union City, TN
  • West Haven, UT
  • Arena, WI
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