The Andersons, Inc. Reports 3rd-Quarter Results 6th Consecutive Qtr. of Year-To-Year EPS Improvement $0.12 Loss Per Share vs. $0.19 Loss in '97 Period

PRNewswire
MAUMEE, Ohio
Sep 15, 2000

The Andersons, Inc. , today announced a net loss of $972,000, or $0.12 per share, for the third quarter of 1998, a $557,000 improvement from the loss of $1.5 million, or $0.19 per share, experienced in the comparable period last year. The third quarter 1998 results marked the sixth consecutive quarter of year-to-year improvement in earnings per share. Because of the seasonal nature of several of its businesses, the company normally experiences a loss in the July through September period.

Total revenues of $230.8 million for the period were up 42.5 percent from the $161.9 million reported for the third quarter of 1997, primarily due to higher grain volume and railcar sales.

Net income for the first nine months of 1998 was $4.6 million, or $0.57 per share, on revenues of $736.8 million. In the first nine months of 1997, the company had revenues of $598.9 million and a net loss of $1.4 million, or $0.16 per share. The company's EPS on 12-month trailing income rose to $1.25; a year ago it was $0.51.

Agriculture

The Agriculture Group operates grain elevators, wholesale fertilizer distribution facilities and retail farm centers in four eastern corn belt states. Collectively these facilities handle about 180 million bushels of grain and more than 1 million tons of dry and liquid agricultural fertilizer annually. This year, the company opened a new fertilizer distribution facility in northeast Ohio, acquired four more retail farm centers in northwest Ohio, and leased two Toledo-area grain elevators from Cargill. It also announced the proposed acquisition of a wholesale/retail fertilizer distribution center located in Waterloo, Ind.

The grain business continued to achieve top- and bottom-line improvement in the third quarter of 1998. Sales volume was up significantly from the prior year, and with increasing U.S. grain stocks, the company earned a higher return on its storage space. According to President and Chief Operating Officer Mike Anderson, "We're optimistic about the earnings prospects for our grain business. However, the unusually dry crops being harvested in our region this fall will cause our grain drying income to be lower in the fourth quarter."

Wholesale fertilizer sales were somewhat soft during the third quarter, primarily as a result of the cautious reaction of farmers and dealers to low grain prices. With additional locations this year, the retail farm centers achieved increases in revenues, fertilizer tons and application acres in the July - September period, but acquisition-related expenses dampened bottom-line results. September year-to-date revenues and operating income for the Agriculture Group continue to reflect solid improvement from 1997.

Processing & Manufacturing

The processing business produces granular lawn care products for retailers, professional lawn-care operators and golf courses. It also produces corncob-based chemical and feed ingredient carriers, animal bedding and litter products. With continued lawn fertilizer volume growth, this division's top- and bottom-line performance in the third quarter and the first nine months of 1998 was significantly improved from the comparable periods in 1997.

The group's growing manufacturing business repairs and markets various types of railcars and operates a custom steel fabrication business. During the third quarter of this year, several railcar sales transactions were completed, which resulted in continued significant year-to-year revenue and income growth.

Retail

This group operates six large retail stores in Ohio. The company characterizes its retail concept as "a complete home store" -- a traditional home center with plumbing, electrical and building supplies, etc. -- but also indoor and outdoor garden centers, extensive lines of housewares and domestics, pet supplies, automotive supplies, sporting goods and a unique offering in food.

The company's Retail Group registered a modest same-store sales gain in the third quarter, up 0.4 percent from the July - September period of 1997. Gross margins were strong during the period, buoyed by continued growth in housewares. As a result, the group's third-quarter and year-to-date operating results both showed improvement from the year-earlier performance.

Company

According to Chairman and Chief Executive Officer Dick Anderson, "We're really pleased with the performance achieved by our company so far this year, especially having all three operating groups showing bottom-line improvement. With our elevators filling up as a result of the excellent grain harvest, we expect to see good storage income in the coming months as well. Despite the near-term reduction we expect in grain drying income, I believe our earnings per share for the full year 1998 could be double or more the amount earned in 1997 and will continue to show solid improvement next year and beyond."

The Andersons, Inc. recently paid a cash dividend of $0.04 per share to shareholders of record as of October 1, the company's fourth such $0.04 quarterly dividend. In 1997, the quarterly dividend was $0.03. The company has repurchased shares on the open market from time to time.

The Andersons, Inc. is a respected leader and dominant regional player in the grain industry. This strong position in its basic business has allowed the company to diversify into other agribusiness operations, several processing and manufacturing businesses, and general merchandise retailing. The company has been in operation since 1947.

This release contains forward-looking statements, including statements with respect to anticipated revenue growth, adequacy of cash flows and profitability. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, economic and weather conditions in agriculture, economic conditions and competition in its retail stores' markets, risks associated with acquisitions, and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission.

For further information regarding The Andersons free of charge via fax dial 1-800-PRO-INFO and enter company code "ANDE."

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


                                    Three Months Ended   Nine Months Ended
  (in thousands, except for            September 30         September 30
    per share amounts)               1998       1997       1998      1997

  Grain sales and revenues        $123,602     $80,133   $374,474  $272,662
  Fertilizer, retail
    and other sales                105,614      79,778    358,762   322,507
  Other income                       1,576       2,018      3,584     3,715

    Total                          230,792     161,929    736,820   598,884

  Cost of grain sales              113,975      72,083    349,285   255,948
  Cost of fertilizer, retail
    and other sales                 79,900      59,049    267,996   241,939

    Total                          193,875     131,132    617,281   497,887

  Gross profit                      36,917      30,797    119,539   100,997

  Operating, administrative
    and general expenses            36,225      31,337    106,163    96,842
  Interest expense                   2,153       1,905      6,497     6,318

    Total                           38,378      33,242    112,660   103,160

  Income (loss) before income taxes (1,461)     (2,445)     6,879    (2,163)

  Income taxes                        (489)       (916)     2,305      (811)

  Net income (loss)                  $(489)    $(1,529)    $4,574   $(1,352)

  Per common share:
    Basic and diluted
      earnings (loss)               $(0.12)     $(0.09)     $0.57    $(0.16)

    Dividends paid                   $0.04       $0.03      $0.12     $0.09

  Weighted average
    shares outstanding               8,145       8,124      8,033     8,232


                           The Andersons, Inc.
                       Consolidated Balance Sheets
                               (Unaudited)

                                                 September 30    December 31
  (in thousands)                                     1998           1997


  Assets
  Current assets:
    Cash and cash equivalents                       $4,257         $8,278
    Accounts receivable:
    Trade accounts and notes receivables (net)      59,906         68,643
    Margin deposits                                  3,752            771

      Total                                         63,658         69,414
    Inventories                                    165,173        191,467
    Deferred income taxes                            3,270          1,408
    Prepaid expenses                                 2,902          4,521

  Total current assets                             239,260        275,088

  Other assets:
    Notes receivable (net) and other assets          6,332          6,333
    Investments in and advances to affiliates        1,100          1,026

      Total                                          7,432          7,359
  Property, plant and equipment (net)               87,935         85,797

      Total                                       $334,627       $368,244

  Liabilities and owners' equity
  Current liabilities:
    Notes payable                                  $55,000        $15,572
    Accounts payable for grain                      32,778        121,233
    Other accounts payable                          72,489         63,309
    Accrued expenses                                13,246         12,973
    Current maturities of long-term debt             6,882          8,406

  Total current liabilities                        180,395        221,493

  Pension and postretirement benefits                2,663          2,799
  Long-term debt                                    65,731         65,709
  Deferred income taxes                              6,983          5,393
  Minority interest                                    671            649
  Owners' equity                                    78,184         72,201

    Total                                         $334,627       $368,244

SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor, 312-640-6692, or Lisa Fortuna, 312-640-6779, both of The Financial
Relations Board


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