The Andersons, Inc. Reports Strong Earnings Third Quarter & Nine Months Income Exceed Previous Records

Reaffirms Full-Year EPS Guidance of $1.90 - $2.10

PRNewswire-FirstCall
MAUMEE, Ohio
Nov 1, 2006

The Andersons, Inc. , today announced third-quarter net income of $8.4 million, or $0.51 per diluted share, and total revenues of $336 million. In the same three-month period of 2005, the company reported a net loss of $0.6 million, or $0.04 per diluted share, on $289 million of revenues. For the first nine months of 2006, the company's net income was $22.6 million, or $1.41 per diluted share, on revenues of $995 million. In the first nine months of 2005, The Andersons earned net income of $10.8 million, or $0.70 per diluted share, on revenues of $913 million. The third quarter and nine months results this year both established new records for the company. All of the earnings per share data have been adjusted to reflect the June 2006 stock split. During the quarter, the company raised $81.6 million of additional equity to support its growth initiatives and strengthen its balance sheet.

The Grain & Ethanol Group's third-quarter operating income of $12.0 million was $14.5 million better than its year-earlier result. Total revenues of $209 million for the period were $50 million higher than the third quarter of 2005. Total grain gross profit for the period was also significantly higher than it had been in the previous year. This included the sale of a large number of wheat bushels at excellent margins during the period and appreciation in corn basis values more usually seen in the fourth quarter. The group's third quarter operating income also included the settlement of the 2005 portion of the business interruption insurance claim related to an elevator in Toledo which had been damaged by an explosion and fire in the third quarter of 2005. Now that the elevator has re-opened and is receiving grain, the company is actively working on the 2006 portion of the business interruption claim. Because of the degree of volatility in recent wheat and ethanol markets, the group's investment in its commodity trading affiliate, Lansing Trade Group, LLC, incurred a loss during the most recent three-month period, although its income remains at a record level through nine months. Construction of an ethanol plant in Albion, Michigan, in which The Andersons, Inc. is a significant investor, was completed during the third quarter, and the plant began to produce and ship ethanol and distillers dried grain. Construction of another ethanol plant, located in Clymers, Indiana, is underway and scheduled to start production by the end of the first quarter of 2007. Through the first nine months of 2006, the Grain & Ethanol Group achieved operating income of $15.7 million. In the same period last year, the group incurred an operating loss of $2.1 million.

The Rail Group's operating income of $4.9 million in the third quarter of 2006 was $0.9 million below its third quarter 2005 results. Revenues of $27 million for the quarter were $4 million higher than the prior period. Railcar lease rates and the utilization rate of the group's railcar fleet remained strong during the third quarter of 2006, but fleet maintenance costs were higher. Operating income during the period from the group's railcar repair and manufacturing businesses was higher than the third quarter of 2005. Through the first nine months of 2006, the group achieved revenues of $90 million and $16.1 million of operating income. Last year, it reported revenues of $59 million and operating income of $13.3 million for the same nine month period.

The Plant Nutrient Group incurred an operating loss of $1.9 million on $39 million of revenues in the third quarter this year. It lost $0.8 million on $47 million of revenues during the same three-month period of 2005. Because energy and nutrient input costs through the third quarter have been significantly higher this year, the company believes that farmers reduced the amount of nutrients applied to their fields this season. This resulted in reduced wholesale and retail demand for plant nutrients and a deferral of pre- fall season purchasing. With volume down, the group's third-quarter gross profit declined from last year. Through the first nine months of 2006, the group's operating income was $1.9 million on $198 million of revenues. In the same period last year, operating income amounted to $8.7 million on $211 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 loss amounted to $0.4 million on $20 million of revenues. In 2005, it incurred an operating loss of $3.0 million in the third quarter on $19 million of revenues. The group's lawn and cob products businesses both contributed to this improvement. Also included in this year's third quarter income was the settlement of an insurance claim regarding a storage tank that was damaged last year. Through the first nine months of this year, the group has reported operating income of $3.1 million and revenues of $93 million. In the first nine months of 2005, the group had revenues of $101 million and an operating loss of $1.6 million. The improved third quarter and year-to-date results were primarily due to restructuring actions and other charges incurred in the third quarter of 2005.

The Retail Group reported revenues of $41 million for the third quarter of 2006, an increase of 1.3 percent in same-store sales from the same period in 2005. With higher gross margins and total gross profit, the group's operating loss was $0.4 million for the quarter, about $0.4 million better than the same period last year. For the first nine months of the year, the group generated revenues of $128 million and operating income of $1.3 million. In the first nine months of 2005, it reported operating income of $0.9 million and revenues of $130 million.

According to President and Chief Executive Officer Mike Anderson, "We've frequently noted that it's not unusual for some of our units to experience volatility in quarterly income over and above normal seasonal patterns. This has often been true in our commodity-based grain and plant nutrient businesses, and to some degree in our rail business, given the unpredictable timing of opportunistic railcar sales. With our strong third-quarter income this year, one might conclude that our prospects for the full year had noticeably improved. There are several variables which could still swing either way. Supply and demand dynamics in the grain markets, including rainfalls that have delayed the fall harvest, will impact fourth quarter income. Accordingly, I believe that our previously-announced guidance of $1.90 to $2.10 for our 2006 full-year earnings per diluted share is still a reasonable expectation. There are also some non-recurring items which, if they were to occur prior to year-end, could raise this guidance range. These include the 2006 portion of our elevator business interruption claim and additional ethanol development activities."

The company will host a webcast on Thursday, November 2, 2006 at 11:00 A.M. ET, to discuss its third-quarter performance and full-year outlook. This can be accessed under the heading "Financial Information" 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 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 www.andersonsinc.com


  FINANCIAL TABLES FOLLOW . . .


                             The Andersons, Inc.
                      Consolidated Statements of Income

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

  Sales and merchandising revenues   $335,871  $288,755  $994,638  $912,528
  Cost of sales and merchandising
   revenues                           284,327   252,162   848,056   782,958
  Gross profit                         51,544    36,593   146,582   129,570

  Operating, administrative and
   general expenses                    40,310    36,654   115,583   109,410
  Interest expense                      3,818     2,830    12,513     8,971

  Other income, net                     6,352     1,009    11,763     3,518
  Equity in earnings of affiliates       (483)      877     5,279     1,337
  Income (loss) before income taxes    13,285    (1,005)   35,528    16,044
  Income tax provision                  4,898      (369)   12,959     5,293
  Net income  (loss)                   $8,387     $(636)  $22,569   $10,751

  Per common share:
        Basic earnings                  $0.52    $(0.04)    $1.46     $0.73
        Diluted earnings                $0.51    $(0.04)    $1.41     $0.70
        Dividends paid                 $0.045   $0.0425   $0.1325   $0.1225

  Weighted average shares
   outstanding-basic                   16,080    14,890    15,467    14,812
  Weighted average shares
   outstanding-diluted                 16,591    14,890    16,021    15,382


                           The Andersons, Inc.
                       Consolidated Balance Sheets
                               (Unaudited)

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

  Assets
  Current assets:
    Cash and cash equivalents              $47,773     $13,876      $9,592
    Restricted cash                          3,815       3,936       1,367
    Accounts receivable (net) and
     margin deposits                        92,867      83,291      78,845
    Inventories                            163,121     240,806     184,247
    Other current assets                    24,335      30,632      28,537
  Total current assets                     331,911     372,541     302,588

  Investments and other assets              63,973      39,008      33,732
  Railcar assets leased to others (net)    148,936     131,097     112,882
  Property, plant and equipment (net)       93,065      91,498      92,098
                                          $637,885    $634,144    $541,300

  Liabilities and shareholders' equity
  Current liabilities:
    Short-term borrowings                 $    -       $12,400     $42,900
    Other current liabilities              171,638     263,922     178,583
  Total current liabilities                171,638     276,322     221,483

  Deferred items and other long-term
   liabilities                              37,832      30,896      29,869
  Long-term debt non-recourse               77,222      88,714      59,164
  Long-term debt                            87,076      79,329      87,128
  Shareholders' equity                     264,117     158,883     143,656
                                          $637,885    $634,144    $541,300



                                Segment Data

                                        Grain &    Plant            Turf &
                                        Ethanol   Nutrient  Rail   Specialty
    Quarter ended September 30, 2006
  Revenues from external customers      $208,540  $38,580  $27,339  $20,396

  Gross Profit                            20,501    3,623   11,628    4,138

  Other income / Equity in earnings of
   affiliates                              4,064      348      127      569

  Operating income (loss)                 11,950   (1,868)   4,898     (420)

    Quarter ended September 30, 2005
  Revenues from external customers       158,875   46,986   23,176   19,227

  Gross Profit                             6,263    4,443   11,232    3,398

  Other income / Equity in earnings of
   affiliates                                908      384       (5)     238

  Operating income (loss)                 (2,504)    (808)   5,841   (3,047)

    Nine months ended September 30, 2006
  Revenues from external customers       485,928  197,921   89,558   93,329

  Gross Profit                            37,750   17,866   36,389   16,401

  Other income / Equity in earnings of
   affiliates                             12,068      781      442    1,087

  Operating income (loss)                 15,653    1,938   16,115    3,073

    Nine months ended September 30, 2005
  Revenues from external customers       412,460  210,971   58,554  100,582

  Gross Profit                            23,801   25,623   28,336   14,079

  Other income / Equity in earnings of
   affiliates                              1,733      896      536      545

  Operating income (loss)                 (2,147)   8,700   13,280   (1,558)


                                Segment Data

                                            Retail      Other       Total
    Quarter ended September 30, 2006
  Revenues from external customers         $41,016      $ -       $335,871

  Gross Profit                              11,654        -         51,544

  Other income / Equity in earnings of
   affiliates                                  265        496        5,869

  Operating income (loss)                     (418)      (857)      13,285

    Quarter ended September 30, 2005
  Revenues from external customers          40,491        -        288,755

  Gross Profit                              11,257        -         36,593

  Other income / Equity in earnings of
   affiliates                                  140        221        1,886

  Operating income (loss)                     (827)       340       (1,005)

    Nine months ended September 30, 2006
  Revenues from external customers         127,902        -        994,638

  Gross Profit                              38,176        -        146,582

  Other income / Equity in earnings of
   affiliates                                  697      1,967       17,042

  Operating income (loss)                    1,296     (2,547)      35,528

    Nine months ended September 30, 2005
  Revenues from external customers         129,961        -        912,528

  Gross Profit                              37,731        -        129,570

  Other income / Equity in earnings of
   affiliates                                  517        628        4,855

  Operating income (loss)                      918     (3,149)      16,044

First Call Analyst:
FCMN Contact:

SOURCE: The Andersons, Inc.

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


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