Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from John Bridges - J.P. Morgan Chase & Co.
John Bridges - J.P. Morgan Chase & Co.
Could you characterize your counterparties on these forward sales? We hear of a lot of trauma out there and just wondered if you could give us a bit of background on those clients and how sure you are that those contracts are safe?
D. Hunt Ramsbottom
The counterparties on those contracts are Agrium. Almost all of our sales go through Agrium and the way those contracts work of the credit risk, to the extent there’s credit risk in the contract falls at the Agrium level. It doesn’t go through to the distributor or the farmer.
Operator
Our next question comes from William Burns - Johnson Rice & Company LLC.
William Burns - Johnson Rice & Company LLC
Looking at the third quarter to fourth quarter, from a seasonal perspective I would have expected your fourth quarter sales to actually decline sequentially from your fiscal Q308 sales. I was wondering what factors caused that sequential increase or am I just mis-modeling this?
D. Hunt Ramsbottom
That’s a fall and [fill] and sales time for us.
William Burns - Johnson Rice & Company LLC
I always assumed the third quarter would be the peak from the seasonal.
D. Hunt Ramsbottom
Remember we’re on a fiscal year ended September 30 so it’s really the timing of the deliveries at REMC. That can vary from year to year. You’re correct. Last year, I assume this is what you’re looking at, in 2007 revenues were highest in the third quarter and then dropped in the fourth quarter. You have your facts correct but this year we saw a sequential increase just related to the timing of the fall applications which can be affected by things like weather.
William Burns - Johnson Rice & Company LLC
That helps me with trying to model going forward. You know my extensive background in the fertilizer business.
D. Hunt Ramsbottom
It’s not an easy business to forecast, we grant you that.
William Burns - Johnson Rice & Company LLC
That’s not really my forte for this old coalminer.
Then maybe a follow up for Dan. Nice to have you. During the first nine months of your fiscal year, cash used in operations was approximately $31 million and then when we closed out the entire year that gap had been shut to about $8 million. I can put the third quarter source and use of the statement to the fiscal year and see what kind of elements change but could you give me maybe a macro? What went right internally or externally?
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