| To: Trader2015 who wrote (3898) | 3/23/2015 12:32:46 PM | | From: richardred | | | | Personally the stock is trading new the 52 week low. I think the company can be broken up and the pieces sold off to bring in more value than the current price. I think ANDE is certainly not overprice at the current PE. However next year is not foretasted to be as good. I like the margins of the rail group & Plant Nutrient business. It's a stock I'm going to be keeping my eyes on. I'm familiar with the company since the Ethanol boom/bust.
Subject 55246
Agriculture, Glencore’s next move?
As the industry awaits Glencore’s next move, the focus has been on whether it’ll make another run for Rio Tinto.
Jesse Riseborough & Javier Blas (Bloomberg) | 23 March 2015 11:04
With only one acquisition in the past 11 months, Glencore Plc’s billionaire chief Ivan Glasenberg is in the midst of a deal-making drought.
As the industry awaits his next move, the focus has been on whether he’ll make another run for the world’s second-biggest miner Rio Tinto Group, which spurned an approach last year. Underpinned by a stellar $800 million increase in profits from the division last year, agriculture may offer a more tempting expansion opportunity for the company.
Glencore, one of the world’s largest traders of wheat, became a major agriculture player when it bought Canadian grain handler Viterra Inc. for C$6.1 billion ($4.8 billion) in 2012. Nonetheless, it still has no presence in the most important grain market of all: the U.S.
Although no move is imminent, businesses including Scoular Co., Andersons Inc. and Lansing Trade Group LLC may be targets, adding physical assets like grain silos and rail terminals, according to people familiar with the company’s thinking who asked not to be named for reasons of confidentiality.
“It may well make sense for the next deal to be in agriculture,” Michael Rawlinson, co-head of mining and metals investment banking at Barclays Plc, said in an interview. “That’s how it works at Glencore, bolster your contribution to profitability and you’ll be provided with greater resources for growth.”
Coal Trader
Chief Executive Officer Glasenberg, a 58-year-old accountant turned coal trader, has largely built his $5 billion fortune by growing the commodity producer and trader through more than 40 deals since becoming CEO in 2002.
Chief Financial Officer Steve Kalmin said in December that Glencore, or G, should be added to the crop industry’s ABCD, the informal acronym representing the biggest players in grain trading — Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Commodities BV.
“There are very few remaining assets in the U.S. as most of the capacity has been bought by the ABCD and Japanese traders,” said Karel Valken, global head of agri-finance at Rabobank, the largest lender to the farming industry.
Scoular is a more than century-old closely held grain trader based in Nebraska, while Andersons is a Nasdaq-listed company based in Ohio focusing on grains, ethanol and plant nutrients worth $1.1 billion. Lansing Trade is a Kansas grain merchant co-owned by Andersons, Australian bank Macquarie Group Ltd. and its employees.
“Scoular is not seeking, and has no intention to entertain, proposals that would alter this independent ownership,” CEO Charles Elsea said in an e-mail. “Opportunities for growth as an independent company offer the highest return to our shareholders, and that is the path we will continue to pursue.”
Andersons and Lansing Trade didn’t respond to requests for comment.
Andersons rose as much as 5.4 percent in New York, the biggest intraday gain since November.
Kansas City
While buying one of the larger ABCD companies would fill the U.S. gap, a deal of that scale is probably too ambitious. Other smaller, independent grain businesses in the U.S. include two Kansas-based closely held companies, Bartlett & Co. and Seaboard Corp.
“The U.S. has to be part of the portfolio of a global grain trader,” said Philippe de Laperouse, managing director of agribusiness consultant HighQuest Partners LLC and a former senior executive at Bunge. “Eventually, you need the U.S. corn, soybean and wheat.”
Other than Viterra, Glencore’s recent takeover record has been patchy, at best.
The $29 billion all-share acquisition of Xstrata Plc, the world’s biggest exporter of power station coal, has been undermined by a collapse in the price of the fuel to the lowest in more than five years. Glencore last year decided to idle some of the coal mines bought in the 2013 deal.
Rio Merger
Last year, it spent about $1.35 billion buying an oil exploration and production company Caracal Energy Inc. in Chad. Since then the price of oil has plummeted almost 60 percent.
Glencore made an approach to Rio Tinto’s chairman last year about a possible merger. After that was made public, Glencore had to forgo a fresh approach for six months. Even though that lock-up expires next month, a second run isn’t considered likely because Glencore’s share price has fallen relative to Rio, a larger company.
Chris Mahoney, a member of a British rowing crew that won silver in the 1980 Moscow Olympics, heads Glencore’s agriculture division and oversaw the takeover of Viterra. The company is now one of the world’s two leading traders of wheat, handling about 18 percent of the global seaborne trade.
The company is among the top-three agricultural exporters in Russia, the European Union, Canada and Australia — all key countries in the global food market. On top of trading and processing grains, Glencore also farms 180,000 hectares (444,790 acres) of land in Eastern Europe, equivalent to about half the size of Rhode Island.
The late Marc Rich, who in 1974 created the company that later became Glencore, started the agriculture business in 1982 after buying Dutch grain trader Granaria Group.
Wheat Production
The company reported adjusted earnings from its agricultural products business of $992 million last year, up from $192 million a year earlier. That was underpinned by a fourfold increase in its marketing division, thanks largely to record wheat harvest in Canada and Europe last year.
Glencore’s most recent deal was the purchase of a 50 percent stake in an agricultural export terminal in northern Brazil from Chicago-based Archer-Daniels-Midland.
In “agriculture, because it’s so geographical, very small and prone to seasonality, you do get these big arbitrage opportunities,” Ben Davis, a commodities analyst at Liberum Capital Ltd. in London, said by phone. “I definitely imagine they are going to increasingly go that way.”
Peter Grauer, the chairman of Bloomberg LP, the parent of Bloomberg News, is a senior independent non-executive director of Glencore.
©2015 Bloomberg News
mineweb.com
P.S. ANDE latest QTR.
The Andersons, Inc. Reports Fourth Quarter & Full Year Results Feb 10, 2015
Record Full-Year Earnings of $3.84 per Diluted Share
Fourth Quarter Earnings of $0.89 per Diluted Share
Ethanol Group Leads Earnings Results
MAUMEE, Ohio, Feb. 10, 2015 / PRNewswire/ -- The Andersons, Inc. (Nasdaq: ANDE) today announces financial results for the fourth quarter and full year ended December 31, 2014.
Highlights
Record full-year earnings of $3.84 per diluted share, unadjusted. The Ethanol Group delivered full-year operating income of $92.3 million, far exceeding its prior best year of $50.6 million in 2013. Continued growth in the fourth quarter highlighted by the acquisition of Auburn Bean & Grain.
"We are pleased with our results in 2014. The company's earnings this year have clearly been led by the exceptionally strong performance of our ethanol business in a very supportive market," said CEO Mike Anderson. "After excluding the one-time pre-tax gain of $17.1 million from the partial redemption of our investment in Lansing Trade Group, our full year adjusted results of $3.46 per share were the highest in the company's history. The company will begin to report adjusted earnings in the future, as we do for the first time below.
"During the quarter we continued to grow. This is highlighted by the purchase of Auburn Bean & Grain (AB&G), which added six grain and four agronomy locations throughout central Michigan and serves as a nice geographic fit between our other Michigan assets and our Thompsons joint venture in Ontario," added Mr. Anderson. "The integration of AB&G is proceeding well, and its locations were additive to income in the fourth quarter. AB&G added grain storage capacity of about 18.1 million bushels, and 16,000 tons of dry and 3.7 million gallons of liquid nutrient capacity."
Financial and Operating Highlights
Net income for 2014 attributable to the company was a record $109.7 million, or $3.84 per diluted share, on revenues of $4.5 billion. Last year earnings were $89.9 million, or $3.18 per diluted share on revenues of $5.6 billion. Full-year 2014 adjusted earnings were $99.1 million, or $3.46 per diluted share, when the Lansing Trade Group gain was excluded. (See the Reconciliation to Adjusted Net Income Table for a discussion and reconciliation of income and adjusted income.)
The company earned $25.9 million in the fourth quarter of 2014, or $0.89 per diluted share, on revenues of $1.3 billion. In the same three month period of 2013, the company reported net income of $30.7 million, or $1.08 per diluted share, on revenues of $1.6 billion.
Revenues were down this year within the company's agricultural businesses due to lower commodity prices. The majority of the decrease was within the Grain Group where the average price per bushel sold decreased by 28 percent, which more than offset the slight increase in bushels sold. The harvest was protracted in a number of states in which the company does business, primarily due to weather conditions. The ethanol plants benefitted from operational improvements made the past three years, with records being achieved for ethanol production, ethanol yields, and corn oil yields. The Ethanol Group realized solid margins in 2014, however, fourth quarter margins were lower than the same period of the prior year. The Andersons received $89.5 million in net cash distributions from its non-consolidated ethanol investments in 2014. The distillers dried grain market, which was negatively impacted by a decline in the Chinese import market in the third quarter, rebounded late in the fourth quarter and it is again selling at levels significantly above 100 percent of corn value. Fourth quarter volume for the Plant Nutrient Group was down approximately 19 percent due to a late harvest and poor weather conditions. The Rail Group's income was down in 2014 due primarily to gains on railcar sales declining by $3.6 million, one-time gains in 2013 of $4.3 million from legal settlements, and an increase in freight and maintenance expense to move idle railcars into service, the benefits of which will be seen in future periods. The Rail Group's utilization rate has increased for eight consecutive quarters and ended the year at 91.0 percent. 2015 Outlook
There are solid fundamentals supporting the company's core businesses going into 2015, although results will likely be below 2014 records, in part because the $17.1 million dollar pre-tax gain on the partial sale of Lansing Trade Group will not be repeated.
Corn acres to be planted in 2015 are estimated to be 88 to 89 million acres, which is down 2 to 3 percent from 2014. Bean acres to be planted are estimated to be roughly 85 million acres, which is very similar to or slightly higher than 2014. Assuming trend yields, this should create a good base for the company's grain business in 2015. Further, continued strong performance from the Grain Group's equity investments is anticipated. Early 2015 ethanol margins are well below 2014 margins, and are expected to average lower for the full year. Factors impacting current margins include lower crude price, greater ethanol production and marginally rising ethanol stocks. On a positive note, higher gasoline demand, improved demand and prices for distillers dried grains in relation to corn price, an ample corn supply, and the potential for improved export demand as the year progresses could contribute to improved ethanol margins later in the year. The anticipated acres to be planted creates a good environment for the Plant Nutrient Group to participate in as well. Additionally, if there is normal spring weather some of the volume lost in the fourth quarter of 2014 is expected to be regained in the first half of 2015. The Rail Group is expected to have improved financial results as it will benefit from increased lease and utilization rates. Conference Call
The company will host a webcast on Wednesday, February 11, 2015 at 11:00 A.M. ET, to discuss its performance. To dial-in to the call, the number is 866-825-3209 (participant passcode is 28990476). It is recommended that you call 10 minutes before the conference call begins.
To access the webcast: Click on the link: edge.media-server.com. Log on. Click on the phone icon at the bottom of the "webcast window" on the left side of the screen. Then, you will be provided with the conference call number and passcode. Click the gear set icon (left of the telephone icon) and select 'Live Phone' to synchronize the presentation with the audio on your phone. A replay of the call can also be accessed under the heading "Investor" on the company website at www.andersonsinc.com.
Forward Looking Statements
This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially. Without limitation, these risks include economic, weather and regulatory conditions, competition, and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission. Although the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.
Company Description
The Andersons, Inc. is a diversified company rooted in agriculture. Founded in Maumee, Ohio, in 1947, the company conducts business across North America in the grain, ethanol, and plant nutrient sectors, railcar leasing, turf and cob products, and consumer retailing. The Andersons, Inc. is located on the Internet at www.andersonsinc.com.
The Andersons, Inc.
| Condensed Consolidated Statements of Income
| (Unaudited)
|
|
|
|
|
|
|
|
|
| Three months ended December 31,
|
| Twelve months ended December 31
| (in thousands, except per share data)
| 2014
|
| 2013
|
| 2014
|
| 2013
| Sales and merchandising revenues
| $ 1,271,768
|
| $ 1,584,266
|
| $ 4,540,071
|
| $ 5,604,574
| Cost of sales and merchandising revenues
| 1,157,817
|
| 1,474,689
|
| 4,142,932
|
| 5,239,349
| Gross profit
| 113,951
|
| 109,577
|
| 397,139
|
| 365,225
| Operating, administrative and general expenses
| 94,884
|
| 85,768
|
| 318,881
|
| 278,433
| Interest expense
| 5,359
|
| 4,253
|
| 21,760
|
| 20,860
| Other income:
|
|
|
|
|
|
|
| Equity in earnings of affiliates
| 19,892
|
| 28,714
|
| 96,523
|
| 68,705
| Other income, net
| 6,031
|
| 3,253
|
| 31,125
|
| 14,876
| Income before income taxes
| 39,631
|
| 51,523
|
| 184,146
|
| 149,513
| Income tax provision
| 11,664
|
| 16,904
|
| 61,501
|
| 53,811
| Net income
| 27,967
|
| 34,619
|
| 122,645
|
| 95,702
| Net income attributable to the noncontrolling interests
| 2,075
|
| 3,958
|
| 12,919
|
| 5,763
| Net income attributable to The Andersons, Inc.
| $ 25,892
|
| $ 30,661
|
| $ 109,726
|
| $ 89,939
|
|
|
|
|
|
|
|
| Per common share:
|
|
|
|
|
|
|
| Basic earnings attributable to The Andersons, Inc. common shareholders
| $ 0.89
|
| $ 1.09
|
| $ 3.85
|
| $ 3.20
| Diluted earnings attributable to The Andersons, Inc. common shareholders
| $ 0.89
|
| $ 1.08
|
| $ 3.84
|
| $ 3.18
| Dividends paid
| $ 0.1400
|
| $ 0.1100
|
| $ 0.4700
|
| $ 0.4300
|
The Andersons, Inc.
| Reconciliation to Adjusted Net Income
| (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended December 31,
|
| Twelve months ended December 31,
| (in thousands, except per share data)
| 2014
|
| 2013
|
| 2014
|
| 2013
| Net income attributable to The Andersons, Inc.
| $ 25,892
|
| $ 30,661
|
| $ 109,726
|
| $ 89,939
| Items impacting other income, net:
|
|
|
|
|
|
|
| Partial redemption of investment in Lansing Trade Group
| -
|
| -
|
| (10,656)
|
| -
| Total adjusting items
| -
|
| -
|
| (10,656)
|
| -
| Adjusted net income attributable to The Andersons, Inc.
| $ 25,892
|
| $ 30,661
|
| $ 99,070
|
| $ 89,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted earnings attributable to The Andersons, Inc. common shareholders
| $ 0.89
|
| $ 1.08
|
| $ 3.84
|
| $ 3.18
|
|
|
|
|
|
|
|
| Impact on diluted earnings per share
| -
|
| -
|
| (0.38)
|
| -
| Adjusted diluted earnings per share
| $ 0.89
|
| $ 1.08
|
| $ 3.46
|
| $ 3.18
|
The Andersons, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
|
|
|
| (in thousands)
| December 31, 2014
|
| December 31, 2013
|
| Assets
|
|
|
|
| Current assets:
|
|
|
|
| Cash and cash equivalents
| $ 114,704
|
| $ 309,085
|
| Restricted cash
| 429
|
| 408
|
| Accounts receivable, net
| 183,059
|
| 173,930
|
| Inventories
| 795,655
|
| 614,923
|
| Commodity derivative assets – current
| 92,771
|
| 71,319
|
| Deferred income taxes
| 7,337
|
| 4,931
|
| Other current assets
| 60,492
|
| 47,188
|
| Total current assets
| 1,254,447
|
| 1,221,784
|
| Other assets:
|
|
|
|
| Commodity derivative assets – noncurrent
| 507
|
| 246
|
| Other assets, net
| 131,527
|
| 118,010
|
| Pension asset
| -
|
| 14,328
|
| Equity method investments
| 232,513
|
| 291,109
|
|
| 364,547
|
| 423,693
|
| Rail Group assets leased to others, net
| 297,747
|
| 240,621
|
| Property, plant and equipment, net
| 453,607
|
| 387,458
|
| Total assets
| $ 2,370,348
|
| $ 2,273,556
|
|
|
|
|
|
| Liabilities and equity
|
|
|
|
| Current liabilities:
|
|
|
|
| Short-term debt
| $ 2,166
|
| $ -
|
| Accounts payable for grain
| 535,974
|
| 592,183
|
| Other accounts payable
| 170,849
|
| 154,599
|
| Customer prepayments and deferred revenue
| 99,617
|
| 59,304
|
| Commodity derivative liabilities – current
| 64,075
|
| 63,954
|
| Accrued expenses and other current liabilities
| 78,610
|
| 70,295
|
| Current maturities of long-term debt
| 76,415
|
| 51,998
|
| Total current liabilities
| 1,027,706
|
| 992,333
|
|
|
|
|
|
| Other long-term liabilities
| 15,507
|
| 15,386
|
| Commodity derivative liabilities – noncurrent
| 3,318
|
| 6,644
|
| Employee benefit plan obligations
| 59,308
|
| 39,477
|
| Long-term debt, less current maturities
| 298,638
|
| 375,213
|
| Deferred income taxes
| 137,113
|
| 120,082
|
| Total liabilities
| 1,541,590
|
| 1,549,135
|
| Total equity
| 828,758
|
| 724,421
|
| Total liabilities and equity
| $ 2,370,348
|
| $ 2,273,556
|
|
View News Release Full Screen
The Andersons, Inc.
|
|
|
|
|
|
| Segment Data
|
|
|
|
|
| (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in thousands)
| Grain
|
| Ethanol
|
| Plant Nutrient
|
| Rail
|
| Turf & Specialty
|
| Retail
|
| Other
|
| Total
| Three months ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers
| $ 867,521
|
| $ 171,326
|
| $ 137,790
|
| $ 31,221
|
| $ 24,940
|
| $ 38,970
|
| $ —
|
| $ 1,271,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit
| 53,464
|
| 9,284
|
| 18,877
|
| 13,193
|
| 7,734
|
| 11,399
|
| —
|
| 113,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity in earnings of affiliates
| 7,102
|
| 12,790
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 19,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income, net
| 4,483
|
| 22
|
| 69
|
| 805
|
| 92
|
| 235
|
| 325
|
| 6,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes
| 24,024
|
| 19,353
|
| 381
|
| 5,556
|
| 181
|
| 1,046
|
| (10,910)
|
| 39,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) attributable to the noncontrolling interests
| (2)
|
| 2,077
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 2,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) (a)
| $ 24,026
|
| $ 17,276
|
| $ 381
|
| $ 5,556
|
| $ 181
|
| $ 1,046
|
| $ (10,910)
|
| $ 37,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three months ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers
| $ 1,124,265
|
| $ 197,032
|
| $ 170,732
|
| $ 32,306
|
| $ 22,557
|
| $ 37,374
|
| $ —
|
| $ 1,584,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit
| 44,570
|
| 13,323
|
| 21,979
|
| 12,328
|
| 6,542
|
| 10,835
|
| —
|
| 109,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity in earnings of affiliates
| 8,182
|
| 20,532
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 28,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense), net
| 682
|
| (66)
|
| 634
|
| 987
|
| 105
|
| 185
|
| 726
|
| 3,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes
| 22,127
|
| 30,577
|
| 6,240
|
| 6,171
|
| (1,369)
|
| (3,861)
|
| (8,362)
|
| 51,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) attributable to the noncontrolling interest
| (3)
|
| 3,961
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 3,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) (a)
| $ 22,130
|
| $ 26,616
|
| $ 6,240
|
| $ 6,171
|
| $ (1,369)
|
| $ (3,861)
|
| $ (8,362)
|
| $ 47,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Grain
|
| Ethanol
|
| Plant Nutrient
|
| Rail
|
| Turf & Specialty
|
| Retail
|
| Other
|
| Total
| Twelve months ended December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers
| $ 2,682,038
|
| $ 765,939
|
| $ 668,124
|
| $ 148,954
|
| $ 134,209
|
| $ 140,807
|
| $ —
|
| $ 4,540,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit
| 131,129
|
| 48,057
|
| 87,619
|
| 59,762
|
| 29,320
|
| 41,252
|
| —
|
| 397,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity in earnings of affiliates
| 27,643
|
| 68,880
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 96,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income, net
| 21,450
|
| 223
|
| 3,262
|
| 3,094
|
| 1,110
|
| 955
|
| 1,031
|
| 31,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes
| 58,126
|
| 105,186
|
| 23,845
|
| 31,445
|
| 669
|
| (620)
|
| (34,505)
|
| 184,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) attributable to the noncontrolling interests
| (10)
|
| 12,929
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 12,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) (a)
| $ 58,136
|
| $ 92,257
|
| $ 23,845
|
| $ 31,445
|
| $ 669
|
| $ (620)
|
| $ (34,505)
|
| $ 171,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Twelve months ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues from external customers
| $ 3,617,943
|
| $ 831,965
|
| $ 708,654
|
| $ 164,794
|
| $ 140,512
|
| $ 140,706
|
| $ —
|
| $ 5,604,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross profit
| 118,517
|
| 32,512
|
| 86,682
|
| 58,864
|
| 29,289
|
| 39,361
|
| —
|
| 365,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity in earnings of affiliates
| 33,122
|
| 35,583
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 68,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income, net
| 2,120
|
| 399
|
| 1,093
|
| 7,666
|
| 690
|
| 501
|
| 2,407
|
| 14,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income taxes
| 46,794
|
| 56,374
|
| 27,275
|
| 42,785
|
| 4,744
|
| (7,534)
|
| (20,925)
|
| 149,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) attributable to the noncontrolling interest
| (11)
|
| 5,774
|
| —
|
| —
|
| —
|
| —
|
| —
|
| 5,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) (a)
| $ 46,805
|
| $ 50,600
|
| $ 27,275
|
| $ 42,785
|
| $ 4,744
|
| $ (7,534)
|
| $ (20,925)
|
| $ 143,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) Operating income (loss) for each Group is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income (loss).
|
Logo - photos.prnewswire.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/the-andersons-inc-reports-fourth-quarter--full-year-results-300034025.html
SOURCE The Andersons, Inc. |
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| To: richardred who wrote (3871) | 3/23/2015 1:00:14 PM | | From: richardred | | | | RE-OMG Looks like a peace plan in place.
OM Group And FrontFour Capital Reach Agreement On Composition Of Nominee Slate; Company To Continue Focus On Operational Improvements
Company adds two new independent directors to slate and agrees to appoint additional independent Board member following 2015 Annual Meeting
PR Newswire
OM Group, Inc. 4 hours ago
CLEVELAND, March 23, 2015 /PRNewswire/ -- OM Group, Inc. (OMG) today announced it has reached an agreement with shareholder FrontFour Capital (FrontFour) regarding the composition of its Board of Directors.
Under the terms of the agreement, OM Group will nominate two new independent directors to the 2015 slate of nominees. David A. Lorber, Co-Founder of FrontFour Capital Group LLC, and Joseph M. Gingo, Chairman of A. Schulman Inc., will join current director Carl R. Christenson on the Company's slate of nominees. The nominations will be included in the Company's 2015 proxy statement and submitted for stockholder approval at the Company's 2015 Annual Meeting, which has not yet been scheduled. Further details regarding the 2015 Annual Meeting will be included in the Company's definitive proxy materials, which will be filed with the SEC.
In addition, promptly following the 2015 Annual Meeting, OM Group has agreed to expand the Board by one seat, to nine members, and name Allen A. Spizzo, a business and management consultant focused on the chemicals, materials, biotechnology and pharmaceutical industries, a director of the Company with a term ending at the Company's 2016 Annual Meeting.
FrontFour has agreed to vote all of its shares in favor of each of the Company's nominees at the 2015 Annual Meeting. Under the terms of the agreement, FrontFour has also agreed to customary standstill provisions.
Joe Scaminace, Chairman and Chief Executive Officer of OM Group, said, "We have had constructive conversations with FrontFour over the past several months about our strategy and Board composition, and are pleased to have reached an agreement resulting in strong candidates as director nominees. These individuals will further strengthen our Board with their experience and perspective and will contribute to our ongoing efforts to strengthen OM Group and create sustainable, long-term value for all shareholders."
David Lorber, Co-Founder of FrontFour, commented, "Allen and I see a significant opportunity to create sustainable value for all shareholders. We look forward to working with our fellow directors and management to continue to find ways to drive operational efficiencies and improve working capital management, capital allocation, and the Company's overall business performance."
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OMG29.80+4.49%
OM Group Inc.
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NYSE12:57 PM EDT
8:53 am OM Group announced that the company and FrontFour Capital have reached an agreement on the composition of co's Board of Directors nominee slate
Briefing.com 4 hrs ago
Ecolab Strong on International Presence, Economic Woes Stay - Analyst Blog
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About OM Group
OM Group is a technology-driven diversified industrial company serving attractive global markets, including automotive systems, electronic devices, aerospace and defense, industrial and medical. Its business platforms use innovation and technology to address customers' complex applications and demanding requirements. For more information, visit the Company's website at www.omgi.com.
Forward-Looking Statements
The foregoing discussion may include forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon specific assumptions and are subject to uncertainties and factors relating to the company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the company. These uncertainties and factors could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. Such uncertainties and factors include: uncertainty in worldwide economic conditions; technological changes in our industry or in our customers' products; uncertainty with respect to U.S. Government spending levels or priorities; our ability to identify, complete and integrate acquisitions aligned with our strategy; failure to retain and recruit key personnel; the majority of our operations are outside the United States, which subjects us to risks that may adversely affect our operating results; fluctuations in foreign exchange rates; fluctuations in the price and uncertainties in the supply of rare earth materials and other raw materials; costs incurred in connection with competitive repositioning and cost optimization opportunities and our ability to realize anticipated savings; level of returns on pension plan assets and changes in the actuarial assumptions; insurance that we maintain may not fully cover all potential exposures; changes in effective tax rates or adverse outcomes resulting from tax examinations; unanticipated costs of environmental regulation, including changes that could affect sales of our products; failure to maintain sufficient cash in the U.S.; failure to protect or enforce our intellectual property rights; disruptions in relationships with key customers or any material adverse change in their business; possible future indebtedness that may impair our ability to operate our business successfully; extended business interruption at our facilities; the timing and amount of common share repurchases, if any; and the risk factors set forth in Part 1, Item 1a of our Annual Report on Form 10-K for the year ended December 31, 2014.
Important Additional Information
OM Group, its directors and certain of its executive officers will be deemed to be participants in the solicitation of proxies from OM Group shareholders in connection with the matters to be considered at OM Group's 2015 Annual Meeting. OM Group intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from OM Group shareholders. OM GROUP SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ ANY SUCH PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Information regarding the ownership of OM Group's directors and executive officers in OM Group shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with OM Group's 2015 Annual Meeting. Information can also be found in OM Group's Annual Report on Form 10-K for the year ended Dec. 31, 2014, filed with the SEC on March 2, 2015. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by OM Group with the SEC for no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at OM Group's website at www.omgi.com or by contacting Rob Pierce, Vice President of Finance at (216) 263-7489.
finance.yahoo.com |
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| To: richardred who wrote (3854) | 3/25/2015 7:30:08 AM | | From: richardred | | | | An Iconic company gets swallowed. Looks like WB likes ketchup on his Mac & Cheese. IMO should up the speculative fever of thread tracking snack stock LNCE.
Message 29839778
Kraft, Heinz deal to form North America's No.3 food company
7:12am EDT
(Reuters) - Kraft Foods Group Inc (KRFT.O: Quote, Profile, Research, Stock Buzz), the maker of Velveeta cheese and Oscar Mayer meats, will merge with ketchup maker H.J. Heinz Co, owned by 3G Capital and Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz), to form North America's third-largest food and beverage company.
Kraft's shares jumped about 26 percent in premarket trading after the announcement of the deal, which will bring Heinz back to the public market following its takeover two years ago.
The combined company, to be led by Heinz Chief Executive Bernardo Hees, will have revenue of about $28 billion, the companies said in a statement on Wednesday.
Kraft has been battling sluggish demand for packaged food products in the United States.
The combined company is expected to save about $1.5 billion annually by the end of 2017, the companies said.
Kraft shareholders will own a 49 percent stake in the combined company and Heinz shareholders 51 percent.
Kraft shareholders will get one share in the combined company, to be called the Kraft Heinz Co, and a special cash dividend of $16.50 for every share held.
As of Tuesday's close, Kraft had a market value of about $36 billion, based on shares outstanding as of March 2.
Brazilian private equity firm 3G Capital and Warren Buffett's Berkshire Hathaway acquired Heinz for $23.2 billion in 2013.
Kraft is 3G Capital's fifth major deal in the food and beverage industry since 2008, when it engineered a takeover of Anheuser-Busch by brewer InBev (ABI.BR: Quote, Profile, Research, Stock Buzz).
3G Capital also owns 51 percent of Restaurant Brands International Inc (QSR.TO: Quote, Profile, Research, Stock Buzz), formed when its Burger King business bought Canadian coffee chain Tim Hortons Inc last year.
Berkshire and 3G Capital will fund the special cash dividend, which totals about $10 billion.
The combined company will have eight brands worth more than $1 billion each and five worth $500 million-$1 billion each, the companies said.
Alex Behring, Heinz's chairman and 3G Capital managing partner, will become chairman of the combined company and Kraft Chief Executive John Cahill will be vice chairman.
The deal is expected to close in the second half of 2015.
The Wall Street Journal reported on Tuesday that the companies were in talks.
Lazard was Heinz's financial adviser, while Cravath, Swaine & Moore and Kirkland and Ellis were its legal advisers.
Centerview Partners LLC was Kraft's financial adviser and Sullivan & Cromwell its legal adviser.
Kraft's shares were trading at $77 before the bell.
reuters.com |
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| From: The Ox | 3/30/2015 7:30:42 AM | | | | | | UnitedHealth Group Inc. plans to acquire Catamaran Corp. for about $12.8 billion in cash, bulking up its pharmacy-benefit business as spending on cutting-edge drugs is a growing concern for employers and insurers.
Catamaran, the fourth-largest pharmacy-benefit manager in the U.S. by volume of prescriptions processed, will be merged into UnitedHealth Group's OptumRx unit, the industry's third-largest player and part of the Optum health-services arm of the health-care giant.
UnitedHealth will pay $61.50 per share of Catamaran, a 27% premium over Friday's closing price of $48.32. The companies said they expect the deal to close in the fourth quarter.
Pharmacy-benefit managers typically work for employers and health plans, managing the pharmacy benefits and seeking to negotiate favorable prices with pharmaceutical companies and drugstores. The two companies are betting that their combined size will generate increased negotiating heft and economies of scale, as they compete with Express Scripts Holding Co., the biggest in the industry, and CVS Health Corp., the No. 2.
"You have to have scale," said Mark Thierer, the chief executive of Catamaran who will be chief executive of the new combined PBM. "This makes the business more competitive overall." The companies said that OptumRx already has been using a technology platform from Catamaran, easing the operational transition.
Catamaran had $21.58 billion in revenue last year, while OptumRx had $31.98 billion. OptumRx expanded sharply when it took over pharmacy benefits for UnitedHealth's insurance unit, UnitedHealthcare, in 2013. Both companies have been growing recently, though Catamaran in February announced the loss of two health-plan clients, putting pressure on its shares despite fourth-quarter earnings that beat analysts' expectations.
UnitedHealth said the deal would be accretive to its net earnings by about 30 cents a share in 2016. The company also said it affirmed its $6- to $6.25-a-share earnings outlook for 2015.
The deal will be the latest consolidation in the pharmacy-benefit sector. Catamaran was known as SXC Health Solutions Corp. until 2012, when it took its current name as it completed a merger with Catalyst Health Solutions Inc. Express Scripts acquired former rival Medco Health Solutions Inc. in 2012.
The industry is focused on reining in costs associated with specialty medicines like new treatments for hepatitis C. Prescription-drug spending rose more than 12% last year in the U.S., the biggest annual increase in more than a decade, according to a report by Express Scripts. The increase was driven partly by the hepatitis C drugs, as well as price increases for some diabetes and cancer medications. The boost came after years when growth was muted by the introduction of generic versions of popular drugs.
Insurers and employers are bracing for the prices tied to expected new treatments for cancer and other conditions such as elevated cholesterol. Pharmacy-benefit managers are eager to show they have tools to counter those costs on behalf of clients.
If the OptumRx deal with Catamaran is consummated, each of the big-three PBM players would offer a different setup. Express Scripts has the largest volume in the industry. CVS has its own network of pharmacies.
The new OptumRx would pitch the benefits of analysis and data, including the broad array of health information that Optum's other businesses glean and crunch. "These capabilities can all be combined with the pharmacy side," said Larry C. Renfro, the chief executive of Optum and vice chairman of UnitedHealth Group.
The companies said they hoped to improve patients' adherence to their drug regimens, and executives pointed to deals like one recently reached by Catamaran, which tied payment for hepatitis C drugs to patients' results.
Executives from Catamaran and UnitedHealth said their customer groups should mesh well. But Catamaran currently has clients that are rivals of UnitedHealthcare. For instance, in 2013 Catamaran struck a 10-year deal to help handle pharmacy-related matters for Cigna Corp. Mr. Thierer said he expected that Catamaran's health-plan customers would "see the benefit they will get from this relationship on all different levels." |
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| From: richardred | 4/4/2015 8:53:27 AM | | | | | | Takeover Boom Seen Fueled by Strong Dollar, Hunt for Growth
Global dealmaking is showing no sign of losing last year’s momentum.
The total value of mergers and acquisitions rose to $815 billion in the first three months of the year, about 18 percent higher than the start of 2014, data compiled by Bloomberg show. It was the best start to a year since 2007, though still below the nearly $1 trillion in purchases struck early in that year.
Below, investment bankers based in the U.S., Europe and Asia share their perspectives on what is driving dealmaking: a strong dollar, the need to use acquisitions for growth, and Europe’s rising appeal to foreign buyers.
Paul Stefanick, Head of Investment Banking at Deutsche Bank AG:
For corporates, the fundamental concept of achieving growth in a low growth environment remains a priority. We will see this play out in highly synergistic transactions that benefit from a low funding environment, strong investor support, and the US dollar’s moves relative to the euro.
Thematically, FX is becoming much more important and will serve as a catalyst for US buyers looking at cross-border deals.
While the healthcare and technology sectors will remain active, the energy sector is one to watch for as the stabilization of oil prices between $40 to $60 a barrel could prompt seller capitulation.
Hernan Cristerna, Co-Head of Global M&A at JPMorgan Chase & Co.:
On the one hand we expect a continuation of European corporates pursuing external growth opportunities in higher growth regions where there is greater visibility on the shape of economic recovery, in particular North America.
At the same time we are increasingly alert to the flow in the opposite direction, where as confidence in the European recovery rises, coupled with the Euro weakness, it is providing attractive value opportunities for US and Asian buyers. We expect to see a convergence of these two opposite forces over the next 12 months with rising European inbound activity.
Adam Taetle, co-head of Consumer Retail Banking at Barclays Plc:
We expect the consumer M&A market to remain fairly robust as companies continue to face a variety of top line growth headwinds: anemic consumer spending, changing consumer tastes toward health, wellness and natural products, and dramatic FX pressures.
Companies are looking for M&A to boost growth by filling in product/geographic gaps or synergy plays - all being fueled by extremely constructive capital markets in terms of both financing and investor reaction to transactions.
While we expect all consumer sectors to continue to see consolidation, Food is likely to remain the most active as the top line pressures are most acute and the market is least consolidated.
Hajime Higuchi, Head of Asia ex-Japan M&A at Nomura Holdings Inc.:
The Asia ex-Japan M&A market will continue to be strong this year. In deal value it will be the same or slightly more than 2014 and I think we’ll see around $800 billion of deals this year. We’re getting closer to a $1 trillion market.
China is about half of that. For Chinese acquirers, they have the money and they have the aspiration. China has been growing so much and that is driving the market growth. They want to strengthen their market position and become more global.
This is part of a renewed government initiative. On top of that, Chinese acquirers are more familiar with M&A than before and at home they’re trying to differentiate themselves from other domestic competitors through acquisitions.
Peter Tague, co-head of global M&A at Citigroup Inc.:
The market has high expectations for growth, and it is unlikely that cost cutting and organic investment alone will meet that demand. Certain sectors - such as technology, healthcare, financial institutions and industrials - face acute growth challenges, and as a result we expect accelerating consolidation.
Additionally, stress in the energy sector caused by sharply declining commodity prices creates significant opportunities for better capitalized participants, though it may take until later this year for sellers’ expectations to adjust.
Gilberto Pozzi, Co-Head of Global M&A at Goldman Sachs Group Inc.:
The pickup in M&A activity in 2014 was driven by cheap financing, supportive equity markets, improved CEO confidence and an increased focus on M&A as a way to drive earnings growth through cost rationalization. We expect these trends to continue in 2015 with large scale mergers or large strategic acquisitions on the agenda.
We also expect cross-regional flows to continue to expand with significant interest from Asian and North American buyers for European assets in the industrials or infrastructure sectors, for example.
The recent decline in commodity prices has resulted in a slow-down in activity in oil and gas, but as prices stabilize, we expect activity to pick-up.
bloomberg.com |
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| To: richardred who wrote (3878) | 4/6/2015 10:23:40 AM | | From: richardred | | | | The Kraft-Heinz Merger: When Organic Growth Is Not On the Menu
For the United States’ largest packaged food companies, organic growth is simply not on the menu. Fierce competition, fickle consumers, and lackluster product innovations have combined to make topline growth increasingly hard to come by. During the latest quarter alone, Campbell Soup said sales of its flagship product slumped 6 percent, Kellogg reported a 7.7 percent fourth quarter decline in their U.S. morning foods business and General Mills announced flat cereal sales1.
Kraft Foods Group’s merger with H.J. Heinz Company appears to be an attempt to reposition two otherwise stale food companies. Kraft has struggled with less than stellar sales since The Mondelez International split off in 2012. However, according to industry analysts, annual cost savings from Kraft and Heinz synergies could reach $1.5 billion by the end of 20172. In addition, the combined Kraft Heinz Co. will likely put pressure on the rest of the sector to continue expanding via acquisitions in a fragmented, stagnant market.
Larger packaged foods companies aren’t the only challenge facing the industry. Just as Chipotle and Shake Shack are challenging traditional fast-food giants like McDonald’s; consumers are looking for fresh, organic and natural groceries in place of Kraft’s canned cheese and sugary Jell-O. Healthy food has become a priority to the American public, and many packaged food makers have been unable to cater to these changes. Even alternative products introduced by packaged food brands simply have not been successful, and the companies have had to look elsewhere for growth. Compounding these issues are pressures from the likes of Walmart, Costco and Whole Foods to reduce costs and improve both the convenience and nutritional value of their products.
The changing consumer appetite has forced some leading companies to diversify their product portfolios. One of the quickest ways to achieve this has been through acquisitions. Campbell Soup purchased baby food maker Plum Organics and salad dressing brand Bolthouse Farms in an attempt to target the increasing number of health-conscious shoppers. Other brands, such as J.M. Smucker, have chosen to diversify away from traditional food offerings, announcing plans in February to acquire Big Heart Pet Brands and expand into the rapidly-growing pet food segment. Acquiring organic and natural food companies enables packaged food companies to reclaim lost market share.
Smaller, more focused middle market companies are ideal targets for large packaged food companies. For example, Annie’s, Inc., one of the largest natural and organic packaged food companies, was acquired by General Mills in 2014, expanding the reach of the organic food company and providing support for a struggling GM.
There are pitfalls for companies trying to become properly positioned. In 2012, ConAgra acquired Ralcorp Holdings, Inc., a private brand packaged food supplier for $4.95 billion, making it the largest producer of store-branded foods in the country3. However, ConAgra struggled to integrate the new business, reporting a 5% decrease in sales for the private brand segment4.
Where we stand now, the food sector is ripe for consolidation. The Kraft-Heinz mega-merger suggests deals could continue to accelerate as companies turn to M&A as a means for achieving previously unattainable growth. Along with the presence of increasingly strong competitors and constantly changing consumer demands, it’s either eat or be eaten in the food industry.
forbes.com |
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| From: Glenn Petersen | 4/6/2015 11:49:40 AM | | | | | | OT, but an interesting turnaround attempt:
RadioShack’s Blueprint for a Rebirth, Planned by a Hedge Fund
By HIROKO TABUCHI
New York Times
APRIL 5, 2015
A RadioShack in Brooklyn. Standard General will take over 1,700 of the company’s 4,000 stores. Credit Sam Hodgson for The New York Times
________________
A day after RadioShack’s narrow escape from liquidation in bankruptcy court, Soohyung Kim, the financier who led the contentious rescue, retreated to a back office to make a conference call with the chain’s almost 2,700 workers, vendors and landlords.
For many of those listening, it was their first direct real introduction to the chief architect of the retailer’s unlikely reincarnation.
“It’s time for a new day,” Mr. Kim said, his voice tense yet steady. “We’re here today because we know this can work.”
Minutes later, relieved and exhausted, Mr. Kim sat down with his small team at Standard General, his New York hedge fund, and pondered their feat.
“The fact that we actually pulled this off is. ...” he trailed off.
“Gratifying?” Robert Lavan, a team member, suggested.
RadioShack is a shadow of its former self, an afterthought in a world dominated by Amazon and Best Buy that has little need for scrappy stores that peddle cables and connectors.
But Standard General, whose lender takeover of about 1,700 of RadioShack’s 4,000 stores won court approval last Tuesday, does not see it that way.
“We always believed that when you stripped away its relatively heavy cost structure, and some of the legacy ways they did business, there actually was a core here that was worth saving,” Mr. Kim said.
Many in the industry are skeptical.
“In the consumer’s mind, RadioShack is a name that has come and gone,” said Craig R. Johnson, founder of the retail consultant Customer Growth Partners in New Canaan, Conn. “What’s its reason for being? What consumer problem are they solving?”
That is a question that RadioShack, the 94-year-old electronics chain, has tried to answer for years as the digital revolution sapped demand for its staples and its stores tracked a slow decline. In February, it filed for bankruptcy protection, buckling in the face of bigger rivals and online competition.
RadioShack’s biggest creditor, Salus Capital Partners, pushed a plan that would probably have liquidated the retailer, prompting a showdown in bankruptcy court. But Standard General’s bid, and its promise to save some 7,500 jobs, prevailed.
Now, the new RadioShack is pushing a revised raison d’être.
RadioShack will slim down to become an electronics convenience store of sorts, focusing on things like Bluetooth headsets, chargers and other accessories that shoppers may need immediately rather than waiting a day or two for shipment of a web order. One of the most profitable RadioShack stores is a Bridgehampton, N.Y., outlet that is frequented by weekend vacationers who have forgotten their smartphone chargers or earphones. And one of RadioShack’s top-selling products is hearing aid batteries.
Tablets, laptops and digital cameras will disappear from RadioShack stores, and mobile phone sales and services will be handled by its new partner, Sprint, all of which affects just 7 percent of RadioShack’s sales. Remaining product lines will also shrink, to 60 headphones from about 180, for example, and to just one fitness wristband from 34.
In an interview, Ron Garriques, a former Dell and Motorola executive chosen last week to lead the new RadioShack, said the chain would also focus on small cities with populations of 5,000 to 100,000, where demand still exists for a neighborhood electronics store.
When he and the Standard General team studied the old RadioShack’s 4,200 stores by profitability, they found that the best-performing stores were not in big cities or fancy malls, where the rents are high and competitors also sell electronics. Most of those stores will close. The number of stores in Manhattan, for instance, will fall to just three from more than 30.
But in many smaller communities, Mr. Garriques said: “RadioShack is part of the neighborhood. We are the ‘go to’ store for electronics.”
Then, there is the partnership with Sprint.
RadioShack long profited from selling mobile phones, but in recent years, as the market matured, the retailer suffered under increasingly unfavorable contracts with the mobile carriers. To make matters worse, RadioShack did not have its own credit underwriting system for cellphone customers, and when any customers defaulted on monthly payments, RadioShack was required to make up the difference. So as competition among the networks intensified, RadioShack found that its associates struggled to properly explain the ever-changing payment plans.
Now, Sprint will take over the selling of mobile phones, paying RadioShack to take up 60 percent of the floor space plus a sales commission and freeing RadioShack from what had weighed heavily on its bottom line. RadioShack hopes that the Sprint shops-inside-shops, which will appear on Sprint’s store locaters, will also drive more traffic to its stores. (Sprint will increase its store count by almost 50 percent.)
“The parts of the business that you think are unsexy are the ones that are doing great,” Mr. Kim said. “And the parts that you’d think are cool, the smartphones and the prime locations — horrendous.”
Standard General is now looking for more partners to set up displays or shops-inside-shops at RadioShack. Those partners, from start-ups in the United States to overseas suppliers, could sell anything, Mr. Garriques said: consumer electronics, home security systems, solar panels, wireless chargers.
One immediate uncertainty is the RadioShack brand. Salus, the largest creditor, still owns the rights to the RadioShack name. Without a deal, the retailer has only six months left to use the often-mocked yet highly recognized moniker. Standard General said that it would try to buy the name, but that it was also open to calling the stores something new.
Salus also owns vast amounts of RadioShack’s customer data, though Standard General contends that much of that data is outdated, and privacy agreements probably prevent Salus from selling it.
The RadioShack deal has thrust Standard General — until recently a little-known player in several television broadcasting transactions — into one of the most visible corporate turnaround efforts this year. The hedge fund is also leading a turnaround at another troubled retailer, American Apparel.
Mr. Kim said his fund’s work with highly indebted companies meant that he sometimes encountered bankruptcies. But RadioShack’s difficult bankruptcy — which, unlike many recent cases, was not an accelerated, “prepackaged” process — appeared to have taxed him and his team.
Still, he said, that is what he does. “We do our best to make lemonade out of lemons.”
nytimes.com |
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