The Andersons, Inc. Reports Strong 4th Qtr. Agriculture Group Has Record Year

4th Qtr. EPS of 59 cents Equals Same Period in 2000

PRNewswire-FirstCall
MAUMEE, Ohio
Feb 4, 2002

The Andersons, Inc. , today announced net income of $4.3 million, or $0.59 per diluted share, for the fourth quarter of 2001. In the same three-month period of the previous year, the company also earned $0.59 per diluted share, with net income of $4.4 million. Total revenues of $307 million were 4.6% lower than the $322 million generated in the fourth quarter of 2000.

Net income for the full year was $8.9 million, or $1.21 per diluted share, with revenues of $985 million. Net income in 2000 amounted to $10.1 million, or $1.34 per diluted share, on revenues of $961 million. Excluding non- recurring items that occurred in both years and an accounting change that was described in the company's first quarter 2001 earnings release, full-year net income was $8.8 million, or $1.21 per diluted share, in 2001, compared to $8.1 million, or $1.08 per diluted share, in 2000.

The Andersons has four operating groups: Agriculture, Processing, Rail and Retail.

During the fourth quarter, rising worldwide demand for wheat resulted in higher shipments from the Agriculture Group's elevators and lower earnings from the storage of grain. Excluding a non-recurring gain realized in 2000, the group's operating income exceeded the prior year's October-December performance. For the year, improved grain drying income, record earnings from storing grain, improved service income and stronger fertilizer margins enabled the group to achieve operating income of $19.8 million, an increase of $5.5 million, or 38%, from the $14.3 million it achieved in 2000.

The Processing Group's total revenue and net operating loss in the fourth quarter were somewhat worse than prior-year levels. While volume and margins in the group's cob business showed softness, improving margins and reduced expenses in the lawn products business led to a modest reduction in lawn's operating loss. Unfortunately, the group's full-year loss was significantly higher this year. This was caused by reduced fertilizer consumption in consumer and golf course markets in 2001, increased raw material costs and higher expenses due to the full-year operation of a premium golf course fertilizer business acquired in mid-2000. In response to the disappointing results for the past two years, the group has taken steps to significantly reduce the breakeven volume level in its lawn business and better position its product lines for the 2002 season.

Because of a cyclical downturn in its industry during the past two years, the Rail Group continued to focus primarily on short-term leasing opportunities rather than car sales or long-term leasing commitments. Improved rail marketing revenues fueled an increase in the group's fourth-quarter operating income. A non-cash charge of $1.5 million earlier in the year to reflect current values of certain rail equipment caused the group to incur a small operating loss for the year, however. During 2001, the group's fleet increased by 600 railcars and 21 locomotives.

Although the Retail Group's gross margins were stronger, the absence of demand for snow/cold weather merchandise in the months of January and December 2001 contributed to a decline in revenues and operating income in the fourth quarter and for the full year. Approximately half of the year-to-year reduction in sales and operating income was due to the 53rd week in 2000, an extra reporting period that occurs from time to time. Excluding this extra week, same-store sales declined by 0.9% and 1.3%, respectively, from 2000 fourth-quarter and full-year levels.

According to President and Chief Executive Officer Mike Anderson, "Our fourth-quarter performance was better than we predicted three months ago and displayed real strength. Excluding a $2.1 million non-recurring insurance gain late in 2000, the company's operating income grew by 50% in the October- December period this year. In spite of the significant challenges Processing has been facing and economic factors that hurt our results in Rail and Retail, the truly outstanding performance of our Agriculture Group this year enabled the Company to achieve very good operating results overall."

"While recent increases in wheat shipments indicate that grain storage income may decline in 2002, I believe that our Agriculture Group should be able to achieve results commensurate with the most recent three-year average. I also think that we're better positioned to achieve improved performance in all three of our non-agricultural businesses."

"The Company's balance sheet continues to be strong. Our capital spending program was significantly lower this year, our earnings before interest, taxes, depreciation and amortization ("EBITDA") amounted to $38 million, close to last year's figure of $39 million, and our working capital is $20 million higher than twelve months ago."

The Andersons will host a webcast on Tuesday, February 5, 2002 at 11:00 A.M. EST, to discuss its 2001 performance and outlook for 2002. The webcast can be accessed under the heading "Financial Information" on its website at http://www.andersonsinc.com/ or at http://www.videonewswire.com/event.asp?id=2740 .

This release contains forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, 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.

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


                             The Andersons, Inc.
                      Consolidated Statements of Income

                                      Three Months ended     Year ended
  (in thousands, except for per          December 31         December 31
   share amounts)                      2001       2000      2001      2000

  Sales and merchandising revenues   $307,038  $321,725  $984,627  $961,122
  Cost of sales and merchandising
   revenues                           262,382   276,713   825,282   804,159
  Gross profit                         44,656    45,012   159,345   156,963

  Operating, administrative and
   general expenses                    37,816    38,762   139,685   137,839
  Interest expense                      2,626     3,590    11,570    11,829
  Other income / gains:
    Other income                        1,314     1,034     3,503     3,989
    Gain on involuntary conversion          -     2,088       338     2,088
    Gain on sale of business                -         -         -       992
  Income before income taxes and
   cumulative effect
    of accounting change                5,528     5,782    11,931    14,364
  Income taxes                          1,225     1,409     2,889     4,286
  Income before cumulative effect of
   accounting change                    4,303     4,373     9,042    10,078
  Cumulative effect of accounting
   change, net of income tax benefit        -         -      (185)        -
  Net income                           $4,303    $4,373    $8,857   $10,078

  Per common share:
    Basic earnings                      $0.60     $0.59     $1.22     $1.34
    Diluted earnings                    $0.59     $0.59     $1.21     $1.34
    Dividends paid                     $0.065    $0.060    $0.260    $0.240

  Weighted average shares
   outstanding-basic                    7,227     7,374     7,281     7,507
  Weighted average shares
   outstanding-diluted                  7,321     7,398     7,316     7,525

  Reconciliation of reported net income to income before nonrecurring items

                                                   2001              2000
  Income before cumulative effect of
   change in accounting principal                 $9,042           $10,078
  Nonrecurring items
    Gain on involuntary conversion                   338             2,088
    Gain on sale of business                           -               992
     Tax effect of nonrecurring items               (122)           (1,103)
  Total nonrecurring items                           216             1,977
  Earnings before nonrecurring items
   and
    change in accounting principle                $8,826            $8,101
  Earnings (before nonrecurring items
   and cumulative effect of change in
   accounting principle) per diluted share         $1.21             $1.08

  Depreciation and amortization                  $14,264           $13,119


                            The Andersons, Inc.
                         Consolidated Balance Sheets

                                               December 31      December 31
             (in thousands)                       2001              2000
  Assets
  Current assets:
    Cash and cash equivalents                     $5,697           $13,138
    Accounts receivable (net) and
     margin deposits                              54,836            57,141
    Inventories                                  238,291           211,863
    Other current assets                          27,849            26,592
  Total current assets                           326,673           308,734

  Other assets                                     6,300            10,020
  Railcar assets leased to others (net)           26,102            22,281
  Property, plant and equipment (net)             95,001            98,071
                                                $454,076          $439,106

  Liabilities and shareholders' equity
  Current liabilities:
    Notes payable                                $82,600           $71,300
    Other current liabilities                    169,068           182,174
  Total current liabilities                      251,668           253,474

  Deferred items, long-term liabilities
   and minority interest                          16,158            15,637
  Long-term debt                                  91,316            80,159
  Shareholders' equity                            94,934            89,836
                                                $454,076          $439,106

  The December 31, 2000 balance sheet has been reclassified to conform with
  the December 31, 2001 presentation.


                                Segment Data

  Quarter ended December 31, 2001        Agriculture  Processing    Rail
  Revenues from external customers        $232,217     $14,699    $10,199
  Other income                                 364          27        235
    Total                                 $232,581     $14,726    $10,434

  Operating income (loss)                   $6,380     $(3,444)      $856

  Quarter ended December 31, 2000
  Revenues from external customers        $246,014     $18,022     $3,833
  Other income                                 386          65         13
  Gain on involuntary conversion             2,088           -          -
    Total                                 $248,488     $18,087     $3,846

  Operating income (loss)                   $7,872     $(2,994)     $(167)

  Year ended December 31, 2001
  Revenues from external customers        $662,790    $112,827    $31,061
  Other income                               1,196         300        248
  Gain on involuntary conversion               338           -          -
    Total                                 $664,324    $113,127    $31,309

  Operating income (loss)                  $19,765     $(7,654)     $(349)

  Year ended December 31, 2000
  Revenues from external customers        $648,410    $107,434    $18,972
  Other income                               1,204         358        233
  Gain on sale of business                       -           -          -
  Gain on involuntary conversion             2,088           -          -
    Total                                 $651,702    $107,792    $19,205

  Operating income (loss)                  $14,301     $(3,470)    $1,003



                                Segment Data

  Quarter ended December 31, 2001           Retail      Other      Total
  Revenues from external customers         $49,923         $-    $307,038
  Other income                                 153        535       1,314
    Total                                  $50,076       $535    $308,352

  Operating income (loss)                   $1,782       $(46)     $5,528

  Quarter ended December 31, 2000
  Revenues from external customers         $53,856         $-    $321,725
  Other income                                 150        420       1,034
  Gain on involuntary conversion                 -          -       2,088
    Total                                  $54,006       $420    $324,847

  Operating income (loss)                   $1,900      $(829)     $5,782

  Year ended December 31, 2001
  Revenues from external customers        $177,949         $-    $984,627
  Other income                                 618      1,141       3,503
  Gain on involuntary conversion                 -          -         338
    Total                                 $178,567     $1,141    $988,468

  Operating income (loss)                   $1,868    $(1,699)    $11,931

  Year ended December 31, 2000
  Revenues from external customers        $183,817     $2,489    $961,122
  Other income                                 611      1,583       3,989
  Gain on sale of business                       -        992         992
  Gain on involuntary conversion                 -          -       2,088
    Total                                 $184,428     $5,064    $968,191

  Operating income (loss)                   $3,246      $(716)    $14,364

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SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., +1-419-891-6417


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