The Andersons, Inc. (ANDE) yesterday announced its intent to consolidate the Turf & Specialty and Plant Nutrient groups into one operating segment that is yet to be named. Full integration of the groups and subsequent reporting changes will occur later in 2015.
The Plant Nutrient Group, a leading formulator and distributor of plant nutrient products in the Eastern Corn Belt and Florida, operates 18 wholesale nutrient facilities, 2 pelletized products facilities, 16 farm centers and 5 energy locations. The segment’s revenues improved 16% year over year in the third quarter of 2014, however, it reported an operating loss of $0.1 million. With record corn harvest, the need to replace nutrients in the soil will increase, which will further benefit the Plant Nutrient Group this year.
The Turf & Specialty Group, which focuses on quality, service and technology of Andersons’ products, witnessed a prolonged shutdown for the renovation of the cob business. The segment posted an 18% year-over-year decline in revenue in the reported quarter. It also reported an operating loss of $2.9 million.
Management believes that these two groups will perform better jointly. The combination of both the segments will boost growth opportunities while improving profitability.
Bill Wolf, the existing President of the Plant Nutrient Group, will lead the combined group. Further, Tom Waggoner will assume a new role as corporate Vice President, Marketing and Operations Services for the new group. Tom currently serves as the President of the Turf & Specialty Group. Leadership changes are expected to take place at the beginning of 2015.
Andersons continue to focus on growing its business through acquisitions in existing and new geographies and enhancing new risk management and grain marketing services. Reaching into new regions and increasing storage capacity will enhance Andersons’ ability to provide relevant-added services to customers.
Maumee, OH-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 carries a Zacks Rank #4 (Sell). However, some better-ranked stocks in the same industry are Cosan Ltd. (CZZ), Alcoa Inc. (AA) and Banro Corporation (BAA). All these stocks hold a Zacks Rank #2 (Buy).
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