The Andersons, Inc. Reports Third Quarter Results

November 4, 2009

Earnings Of $ 0.07 Per Diluted Share

MAUMEE, Ohio, Nov. 4 /PRNewswire-FirstCall/ -- The Andersons, Inc. (Nasdaq: ANDE) today announced third quarter net income attributable to the company of $1.3 million, or $0.07 per diluted share, on revenues of $601 million. In the third quarter of 2008, the company reported results of $12.8 million, or $0.70 per diluted share, on revenues of $906 million. For the first nine months of 2009, the company earned $22.1 million, or $1.20 per diluted share, on revenues of $2.1 billion. In the same period of 2008, The Andersons reported results of $66.3 million, or $3.59 per diluted share, on $2.7 billion of revenues. Prior year earnings included unprecedented margins in our Plant Nutrient Group, which accounted for nearly two-thirds of the income for the same period, but which were not sustainable for all of 2008.

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The Grain & Ethanol Group's operating income of $8.9 million in the third quarter was comparable to its year earlier result of $9.4 million. The grain business income was down significantly in comparison to the prior year as space income and margin on grain sales returned to more traditional levels. In addition, bad debt reserves were increased. During the third quarter the ethanol business benefited from greatly improved margins and from the finalization of The Andersons Albion Ethanol LLC business interruption claim. Third quarter 2009 income from the group's investment in Lansing Trade Group was down slightly from the prior year. Total third quarter revenues for the Grain & Ethanol Group were $451 million; this includes $176 million of grain and ethanol sales made in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the third quarter of 2008, the group's total revenues were $651 million and included $232 million of the previously mentioned sales. While revenues for the group are lower, due to substantially lower commodity prices, such amounts do not serve as good indicators of income or economic performance in a commodity based business. The Grain & Ethanol Group's operating income through the first nine months was $23.5 million in 2009 and $31.7 million in 2008. Income through September for the grain division in comparison to the prior year is up considerably. Conversely, year to date income for both the ethanol division and Lansing Trade Group is down significantly. Total revenues through September 2009 and 2008 were $1.4 billion and $1.8 billion, respectively.

The Rail Group had an operating loss of $1.1 million in the third quarter of 2009, which is down significantly from the $5.2 million earned during the same three month period a year ago. The group continues to be impacted by the double digit declines in rail traffic. Gross profit from the leasing business was significantly less due mainly to lower utilization rates and the corresponding increase in storage expense from idle assets. The group now has approximately 24,000 cars and locomotives. The average utilization rate (the percentage of the fleet in service) for the quarter was 74.4 percent in comparison to 93.3 percent for the same period last year. The gross profit of both the railcar repair and manufacturing businesses continued to be down significantly this quarter due to reduced activity resulting from overall economic conditions. Revenues of $21 million for the third quarter were down from the $28 million reported in 2008. The group's first nine month's operating income this year was $0.4 million on $72 million of revenues. In 2008, operating income through September was $16.5 million and revenues were $106 million. These year to date results included gains on sales of railcars and related leases of $1.6 million and $4.0 million in 2009 and 2008, respectively.

The Plant Nutrient Group had an operating loss of $2.8 million during the third quarter of 2009 on revenues of $70 million. In the same three month period of 2008, the group achieved operating income of $7.2 million on revenues of $162 million. Margins were down significantly from the prior year, as third quarter 2008 benefited from unprecedented inventory appreciation, whereas third quarter 2009 margins returned to normal levels. Retailers continue to maintain lower inventory holdings that led to reduced sales volume during the third quarter in comparison to the prior year. The group's first nine month's operating income this year was $9.6 million on $380 million of revenues. Last year, its operating income through the first nine months was a record $62.1 million on revenues of $541 million, as the group benefited from unprecedented earnings from inventory appreciation, before the significant decline in inventory values, which occurred in the fourth quarter of 2008. The integration of the Hartung Brothers Inc's. Fertilizer Division, which was acquired on August 1, is proceeding well. This acquisition is allowing the group to expand its value added product offering, grow its wholesale customer base, and broaden its geographic territory.

The Turf & Specialty Group had an operating loss of $0.3 million in the third quarter this year on $21 million of revenues. Last year, the group reported a $0.5 million loss on $23 million of revenues for the period. Turf products tonnage increased year to year, but gross profit per ton decreased due primarily to product mix. Through the first nine months of 2009, the group's operating income was a record $5.8 million on $106 million of revenues. Last year, its operating income was $3.4 million for the same period, and revenues were $99 million. The group continues to experience positive results from its focus on proprietary products and expanded product lines; however, there has been some softness in the professional product market lately.

The Retail Group had an operating loss of $2.3 million in the third quarter of 2009; this was partially due to the recording of costs associated with the upcoming closing of the Lima store. In the comparable period last year, the group's operating loss was $0.2 million. The group reported revenues of $37 million for the third quarter of 2009, which is below the $41 million in revenues reported for the same period in 2008. Through nine months, the group recorded a loss of $2.1 million and total revenues of $120 million. Last year through September the group lost $0.2 million on total revenues of $127 million. The group continues to be impacted by the overall economic down turn, which has resulted in a decline of both customer counts and average sale per customer. Margins, however, have remained consistent with the prior year.

"We are disappointed overall with this quarter's results, which we would characterize as a mix of areas of continued concern, and some positive developments," said Chairman and Chief Executive Officer Mike Anderson. "Most significantly, our Rail Group continued to be seriously impacted by the overall weak economy. To a lesser extent our Retail Group was also impacted by the economic decline. Conversely, while our Grain & Ethanol Group's results for the quarter were lower than that of the prior year it was nice to see decent margins return to the ethanol business and Lansing Trade Group return to profitability. Within the grain business, while our quarterly results were well below the prior year, our year to date result is a record, which reflects our solid position in the grain business. And, the current ethanol trading environment, which allowed the third quarter results for the ethanol business to be markedly improved over recent quarters, has allowed us to lock in profitable margins for a significant portion of the fourth quarter sales and for some of the sales during the first half of 2010. Both our Plant Nutrient and Turf & Specialty groups had losses for the quarter, which is a typical third quarter result for these seasonal businesses, and for Plant Nutrient, a return to normal patterns following an extraordinary 2008. Finally, we recognized a one-time $4.1 million gain arising from the freezing of the Company's defined benefit pension plan effective July 1, 2010."

The company will host a webcast on Thursday, November 5, 2009 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading "Investor" on its website at www.andersonsinc.com.

The Andersons, Inc. is a diversified company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar leasing and repair, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now has operations in 14 U.S. states and Puerto Rico, plus rail equipment leasing interests in Canada and Mexico.

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.

The Andersons, Inc. is located on the Internet at www.andersonsinc.com

    The Andersons, Inc.
    Consolidated Statements of Income
    (Unaudited)

                                Three Months ended   Nine Months ended
                                  September 30         September 30
                                 2009      2008       2009      2008
                                 ----      ----       ----      ----
    (in thousands, except for
     per share amounts)

    Sales and
     merchandising
     revenues                  $601,000  $905,712  $2,109,346 $2,719,413
    Cost of sales and
     merchandising
     revenues                   549,990   832,687   1,923,628  2,473,810
                                -------   -------   ---------  ---------
    Gross profit                 51,010    73,025     185,718    245,603

    Operating,
     administrative and
     general expenses            51,303    48,572     144,556    139,836
    Interest expense              5,123     7,497      15,974     25,140
    Other income (loss):
      Equity in earnings
       (loss) of affiliates       5,275      (619)      2,385     15,801
      Other income, net           2,443     1,279       6,406      6,318
                                  -----     -----       -----      -----
    Income before income taxes    2,302    17,616      33,979    102,746
    Income taxes                    685     6,617      12,803     38,045
                                    ---     -----      ------     ------
    Net income                    1,617    10,999      21,176     64,701
      Net (income) loss
       attributable to the
       noncontrolling interest     (367)    1,841         944      1,588
                                   ----     -----         ---      -----
    Net income attributable
     to The Andersons, Inc.      $1,250   $12,840     $22,120    $66,289
                                 ======   =======     =======    =======

    Per common share:
          Basic earnings          $0.07     $0.71       $1.21      $3.66
                                  =====     =====       =====      =====
          Diluted earnings        $0.07     $0.70       $1.20      $3.59
                                  =====     =====       =====      =====
          Dividends paid        $0.0875   $0.0850     $0.2600    $0.2400
                                =======   =======     =======    =======



    The Andersons, Inc.
    Consolidated Balance Sheets
    (Unaudited)

                                       September 30 December 31 September 30
    (in thousands)                          2009        2008        2008
                                            ----        ----        ----

    Assets
    Current assets:
      Cash and cash equivalents            $180,578    $81,682    $28,541
      Restricted cash                         3,612      3,927      3,630
      Accounts receivable, net              101,279    126,255    181,689
      Margin deposits, net                   18,948     13,094     58,077
      Inventories                           190,818    436,920    382,268
      Commodity derivative assets -
       current                               26,608     84,919    113,427
      Other current assets                   51,412    109,165     74,646
                                             ------    -------     ------
    Total current assets                    573,255    855,962    842,278

    Investments and other assets            169,710    153,488    169,800
    Commodity derivative assets               2,065      3,662     19,010
    Railcar assets leased to
     others (net)                           181,830    174,132    175,947
    Property, plant and equipment (net)     133,350    121,529    118,288
                                            -------    -------    -------
                                         $1,060,210 $1,308,773 $1,325,323
                                         ========== ========== ==========

    Liabilities and shareholders' equity
    Current liabilities:
      Short-term line of credit                  $-         $-    $43,600
      Commodity derivative liabilities -
       current                               59,033     67,055     80,874
      Other current liabilities             214,950    458,208    370,430
                                            -------    -------    -------
    Total current liabilities               273,983    525,263    494,904

    Deferred items and other long-term
     liabilities                             89,263     80,687     65,007
    Commodity derivative liabilities          2,360      3,706      6,825
    Long-term debt non-recourse              20,611     40,055     43,964
    Long-term debt                          286,816    293,955    295,207
    Shareholders' equity                    387,177    365,107    419,416
                                            -------    -------    -------
                                         $1,060,210 $1,308,773 $1,325,323
                                         ========== ========== ==========



    Segment Data

               Grain &           Plant    Turf &
               Ethanol   Rail  Nutrient Specialty Retail    Other    Total
               -------   ----  -------- --------- ------    -----    -----

    Quarter
     ended
     September
     30, 2009

    Revenues
     from
     external
     custo-
     mers     $450,762 $21,156  $70,446  $21,451  $37,185      $-    $601,000

    Gross
     Profit     24,488   3,166    8,206    4,468   10,682       -      51,010

    Equity in
     earnings
     (loss) of
     affiliates  5,271       -        1        -        -       3       5,275

    Other income
     (loss), net   751      66       337     287      111     891       2,443

    Income
     before
     income
     taxes       9,245  (1,064)   (2,769)   (314)  (2,285)   (511)      2,302

    (Income)
     loss
     attributable
     to the
     noncontrol-
     ling
     interest     (367)      -         -       -        -       -        (367)

    Operating
     income
     (loss) (a)  8,878  (1,064)   (2,769)   (314)  (2,285)   (511)      1,935



    Quarter ended
     September
     30, 2008

    Revenues
     from
     external
     custo-
     mers     $651,045 $28,394  $162,018 $23,164  $41,091      $-    $905,712

    Gross
     Profit     25,021   9,009    21,731   5,176   12,088       -      73,025

    Equity in
     earnings of
     affiliates   (620)      -         1       -        -       -        (619)

    Other
     income
     (loss),
     net         1,012      84       404      76      125    (422)      1,279

    Income
     before
     income
     taxes       7,602   5,164     7,223    (497)    (155) (1,721)     17,616

    (Income)
     loss
     attributable
     to the
     noncontrol-
     ling
     interest    1,841       -         -       -        -       -       1,841

    Operating
     Income
     (loss) (a)  9,443   5,164     7,223    (497)    (155) (1,721)     19,457



               Grain &           Plant    Turf &
               Ethanol   Rail  Nutrient Specialty Retail    Other    Total
               -------   ----  -------- --------- ------    -----    -----

    Nine
     months
     ended
     September
     30, 2009

    Revenues
     from
     external
     custo-
     mers   $1,431,684  $71,688 $379,846 $105,906 $120,222      $- $2,109,346

    Gross
     Profit     71,112   13,712   44,834   20,501   35,559       -    185,718

    Equity in
     earnings
     (loss) of
     affiliates  2,376        -        6        -        -       3      2,385

    Other
     income
     (loss),
     net         1,900      253    1,595      828      358   1,472      6,406

    Income
     before
     income
     taxes      22,600      437    9,623    5,825   (2,122) (2,384)    33,979

    (Income)
     loss
     attributable
     to the
     noncontrol-
     ling
     interest      944        -        -        -        -       -        944

    Operating
     Income
     (loss)     23,544      437    9,623    5,825   (2,122) (2,384)    34,923



    Nine months
     ended
     September
     30, 2008

    Revenues
     from
     external
     custo-
     mers   $1,845,955 $106,346 $540,988  $98,740 $127,384      $- $2,719,413

    Gross
     Profit     65,595   29,260   93,805   19,368   37,575       -    245,603

    Equity in
     earnings
     (loss) of
     affiliates 15,797        -        4        -        -       -     15,801

    Other
     income
     (loss),
     net         4,770      602      728      265       433   (480)     6,318

    Income
     before
     income
     taxes      30,082   16,464   62,132    3,385      (172)(9,145)   102,746

    (Income)
     loss
     attributable
     to the
     noncontrol-
     ling
     interest    1,588        -        -        -         -      -      1,588

    Operating
     income
     (loss)     31,670   16,464   62,132    3,385      (172)(9,145)   104,334


    (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.

SOURCE The Andersons, Inc.