A volatile economy could pre sent new business opportunities that The Andersons Inc. might like. But seizing those opportunities could be more difficult after shareholders defeated a company proposal to allow 20 million more shares of common stock to be issued if needed.
At the company s annual shareholders meeting yesterday at its Maumee headquarters, stockholders voted to reject the proposal even though it proposed fewer extra shares than an earlier plan.
It was the only proposal on the agenda of a meeting at which Richard P. Dick Anderson, 80, stepped down as chairman and corporate board member. He will become chairman emeritus, while president and Chief Executive Mike Anderson immediately became the new chairman.
Mike Anderson said the proposal for added shares would have given the company flexibility to raise money to make an acquisition, although there were no immediate plans to issue more shares or use them for business ventures.
Gary Smith, company treasurer, said most publicly traded firms are authorized to issue three times the amount of stock that they have outstanding. With 18 million outstanding and only 25 million authorized, we re getting kind of tight, he said. Authorization to issue more shares must be given at annual meetings, which made yesterday s vote critical.
Mr. Smith said that, if need be, The Andersons has 1 million authorized in preferred shares that could be utilized, or it could call an interim shareholder meeting to vote on a new proposal.
On Wednesday, The Andersons reported first quarter earnings of $5 million, down 58 percent from a year earlier, and also said it would no longer provide future earnings guidance. Mike Anderson said many firms have stopped giving earnings predictions, and the move makes sense for The Andersons.
Commenting on the earnings results, Mr. Anderson noted that the rail car group, normally a strong performer, is suffering because of a sharp decrease in demand for rail cars. The group s operating profit was $900,000, down from $6.4 million a year ago.
Rail is recession-related. Just think about how many cars are no longer needed to haul lumber for home construction. And how many rail cars are not needed to haul new autos, he said.
The company also declared a quarterly dividend of 8.75 cents, payable July 22 to shareholders as of July 1.
Contact Jon Chavez at:email@example.com or 419-724-6128.