The Andersons, Inc. Reports 2nd Quarter Results

First Half Results Set New Records

PRNewswire-FirstCall
MAUMEE, Ohio
Jul 28, 2006

The Andersons, Inc. , today announced second-quarter net income of $10.3 million, or $0.66 per diluted share, and total revenues of $378 million. In the same three-month period of 2005, the company reported net income of $10.4 million, or $0.67 per diluted share, on $365 million of revenues. For the first six months of 2006, the company's net income was $14.2 million, or $0.90 per diluted share, on revenues of $659 million. These first half net income and per share earnings established new records for the company. In the first half of 2005, The Andersons earned $11.4 million, or $0.74 per diluted share, on revenues of $624 million. All of the earnings per share data have been adjusted to reflect the June 28, 2006 2-for-1 stock split.

The Grain & Ethanol Group's second-quarter operating income of $1.9 million was $3.3 million better than its year earlier result. Total revenues of $149 million for the period were $16 million higher than the second quarter of 2005. The number of bushels handled by the group's elevators was higher than the prior period, and average gross sales margins were also higher. Although space income was lower than last year in the second quarter, total gross profit increased. The group's investment in its commodity trading affiliate, Lansing Trade Group, LLC, also achieved earnings growth in the most recent three-month period. Through the first half of 2006, the Grain & Ethanol Group achieved operating income of $3.7 million. In the same period last year, operating income was $0.4 million. During the past year, the group has invested in three limited liability companies which are constructing ethanol production facilities in Michigan and Indiana. The Andersons is a significant investor in two of these projects and will provide general management, ethanol and DDGS marketing, and risk management services to them and offers these services to other ethanol producers as well. The plant located in Albion, Michigan, is scheduled to begin production in August. The Grain & Ethanol Group's second quarter results include the impact of employee recruiting, training and some other pre-opening expenses associated with the ethanol business. The group has also recently announced its intent to form a joint venture with Marathon Oil to build and operate additional ethanol facilities.

The Rail Group's operating income of $5.0 million in the second quarter of 2006 was $1.2 million higher than it earned in the same three-month period a year ago. Revenues of $28 million for the quarter were $10 million higher than the prior period. The group's railcar fleet utilization rate (the percentage of the fleet in service at the end of the period) has also increased over time. At the end of June 2006 it stood at 95 percent. The group realized some gains from the sale of railcars and related leases during the quarter, and income from the leasing business in total improved versus the prior year. Operating income from the group's railcar repair and manufacturing businesses was also higher in the second quarter. In the first half of 2006, the group achieved revenues of $62 million and $11.2 million of operating income. Last year, it reported revenues of $35 million and operating income of $7.4 million for the first half of 2005.

The Plant Nutrient Group had revenues of $113 million and operating income of $5.0 million in the second quarter this year. It earned $10.3 million on $120 million of revenues during the same three-month period of 2005. With much higher energy and nutrient input costs, the company believes that farmers have reduced the amount of nutrients applied to their fields this year, essentially keeping spending in line with last year. With volume and average gross margins both down, the group's second-quarter gross profit declined significantly from last year. Through the first half of 2006, the group's operating income was $3.8 million on $159 million of revenues. In the same period last year, operating income amounted to $9.5 million on $164 million of revenues.

The Turf and Specialty Group continued to achieve improved results during the most recent quarter. For the period, the group's operating income was $1.3 million on $33 million of revenues. In 2005, it earned $0.4 million of operating income in the second quarter on $40 million of revenues. The group's lawn and cob products businesses both contributed to this improvement. Through the first six months of this year, the group has reported operating income of $3.5 million and revenues of $73 million. In the first half of 2005, the group had revenues of $81 million and $1.5 million of income. During the past year, this group has restructured its businesses, reduced costs, improved operating efficiency, and focused on the products and markets where it can add the most value, which has allowed the group to increase profitability in spite of reduced revenue.

The Retail Group reported revenues of $55 million for the second quarter of 2006, an increase of 0.7 percent in same-store sales from the same period in 2005. With higher gross profit generated by the increase in sales, and a slight reduction in expenses, the group's operating income was $4.2 million for the quarter, about $0.3 million above the same period last year. For the first half of the year, the group generated revenues of $87 million and operating income of $1.7 million. In the first half of 2005, it also had operating income of $1.7 million but slightly higher revenues of $89 million.

President and Chief Executive Officer Mike Anderson reports that "for the following reasons, I believe the company's earnings prospects for the 2006 calendar year have strengthened versus earlier forecasts." Mr. Anderson explains: "We're about to begin production of ethanol at the new plant in Albion, Michigan ahead of schedule, and ethanol economics are stronger now than our earlier projections envisioned. In addition, the prospects for an excellent grain harvest in our region are even better now than we thought earlier, we continue to achieve growth in our rail business, our turf and specialty business is performing better than anticipated, and our investment in Lansing Trade Group is doing very well. Our estimate of the business interruption insurance settlement related to the accident at one of our elevators last year is also higher now that more specific data is available. The guidance we issued in early May, adjusted for the subsequent stock split, indicated that we expected to earn $1.70 to $1.90 per diluted share this year. While there is still a lot of time left in the growing season, and several other things such as the ethanol plant launch have to be executed well, it now appears that a range of $1.90 to $2.10 for our full-year earnings per share is a reasonable expectation. These per share estimates do not take into account the pending issuance of additional shares pursuant to our announced stock offering, which is not yet final. We will, of course, continue to evaluate our earnings projections as we progress through the year."

The company will host a webcast today at 2:00 P.M. ET, to discuss its second-quarter performance and full-year outlook. This can be accessed under the heading "Investor Relations" on its website at http://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 seven U.S. states plus rail 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 have been based are reasonable, it can give no assurance that these assumptions and the forward-looking statements will prove to be correct.

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

                           The Andersons, Inc.

                    Consolidated Statements of Income

                                      Three Months ended    Six Months ended
                                            June 30             June 30
  (in thousands, except for per
   share amounts)                        2006      2005      2006      2005

  Sales and merchandising revenues   $378,109  $365,117  $658,767  $623,773
  Cost of sales and merchandising
   revenues                           323,342   312,099   563,729   530,796
  Gross profit                         54,767    53,018    95,038    92,977

  Operating, administrative and
   general expenses                    38,581    35,855    75,273    72,756
  Interest expense                      4,501     3,191     8,695     6,141

  Other income, net                     2,352     1,430     5,411     2,509
  Equity in earnings of affiliates      2,209        14     5,762       460
  Income before income taxes           16,246    15,416    22,243    17,049
  Income tax provision                  5,899     5,063     8,061     5,662
  Net Income                          $10,347   $10,353   $14,182   $11,387

  Per common share:
        Basic earnings                  $0.68     $0.70     $0.94     $0.77
        Diluted earnings                $0.66     $0.67     $0.90     $0.74
        Dividends paid                 $0.045    $0.040   $0.0875    $0.080

  Weighted average shares
   outstanding-basic                   15,220    14,798    15,155    14,772
  Weighted average shares
   outstanding-diluted                 15,776    15,392    15,728    15,340



                           The Andersons, Inc.

                       Consolidated Balance Sheets
                               (Unaudited)

                                           June 30   December 31   June 30
             (in thousands)                  2006        2005        2005

  Assets
  Current assets:
    Cash and cash equivalents              $15,474     $13,876      $7,864
    Restricted cash                          3,836       3,936       1,435
    Accounts receivable (net) and
     margin deposits                        95,927      83,291      91,025
    Inventories                            168,918     240,806     182,405
    Other current assets                    24,623      30,632      16,177
  Total current assets                     308,778     372,541     298,906

  Investments and other assets              64,344      39,008      18,928
  Railcar assets leased to others (net)    136,271     131,097     134,450
  Property, plant and equipment (net)       91,355      91,498      91,678
                                          $600,748    $634,144    $543,962

  Liabilities and shareholders' equity
  Current liabilities:
    Short-term borrowings                  $51,600     $12,400     $69,900
    Other current liabilities              169,723     263,922     151,884
  Total current liabilities                221,323     276,322     221,784

  Deferred items and other long-term
   liabilities                              33,683      30,896      29,233
  Long-term debt non-recourse               82,529      88,714      59,333
  Long-term debt                            88,862      79,329      89,105
  Shareholders' equity                     174,351     158,883     144,507
                                          $600,748    $634,144    $543,962



                               Segment Data

                                         Grain
                                           &       Plant             Turf &
      Quarter ended June 30, 2006       Ethanol  Nutrient   Rail   Specialty
  Revenues from external customers     $148,763  $113,308  $27,836  $33,428

  Gross Profit                           10,304    10,110   11,883    5,628

  Other income / Equity in earnings of
   affiliates                             2,363       332      195      155

  Operating income (loss)                 1,923     5,041    4,999    1,344

      Quarter ended June 30, 2005
  Revenues from external customers      132,648   119,914   17,673   40,464

  Gross Profit                            7,339    15,598    8,589    4,823

  Other income / Equity in earnings of
   affiliates                               144       285      356      139

  Operating income (loss)                (1,381)   10,295    3,799      412

     Six months ended June 30, 2006
  Revenues from external customers      277,388   159,341   62,219   72,933

  Gross Profit                           17,249    14,243   24,761   12,263

  Other income / Equity in earnings of
   affiliates                             8,004       433      315      518

  Operating income (loss)                 3,703     3,806   11,217    3,493

     Six months ended June 30, 2005
  Revenues from external customers      253,585   163,985   35,378   81,355

  Gross Profit                           17,538    21,180   17,104   10,681

  Other income / Equity in earnings of
   affiliates                               825       512      541      307

  Operating income (loss)                   357     9,508    7,439    1,489


                               Segment Data

                                            Retail     Other        Total
       Quarter ended June 30, 2006
  Revenues from external customers         $54,774       $-       $378,109

  Gross Profit                              16,842        -         54,767

  Other income / Equity in earnings of
   affiliates                                  268      1,248        4,561

  Operating income (loss)                    4,155     (1,216)      16,246

       Quarter ended June 30, 2005
  Revenues from external customers          54,418        -        365,117

  Gross Profit                              16,669        -         53,018

  Other income / Equity in earnings of
   affiliates                                  245        275        1,444

  Operating income (loss)                    3,843     (1,552)      15,416

     Six months ended June 30, 2006
  Revenues from external customers          86,886        -        658,767

  Gross Profit                              26,522        -         95,038

  Other income / Equity in earnings of
   affiliates                                  432      1,471       11,173

  Operating income (loss)                    1,714     (1,690)      22,243

     Six months ended June 30, 2005
  Revenues from external customers          89,470        -        623,773

  Gross Profit                              26,474        -         92,977

  Other income / Equity in earnings of
   affiliates                                  377        407        2,969

  Operating income (loss)                    1,745     (3,489)      17,049

SOURCE: The Andersons, Inc.

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


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