The Andersons, Inc. Reports Third Quarter Results

Record Earnings Of $0.70 Per Diluted Share

PRNewswire-FirstCall
MAUMEE, Ohio
Nov 4, 2008

The Andersons, Inc. , today announced third quarter net income of $12.8 million, or $0.70 per diluted share, on revenues of $906 million. In the same three month period in 2007, the company reported net income of $10.6 million, or $0.58 per diluted share, on $554 million of revenues. For the first nine months of 2008, the company's net income was $66.3 million, or $3.60 per diluted share, on revenues of $2.7 billion. In the first nine months of 2007, The Andersons earned $45.3 million, or $2.48 per diluted share, on revenues of $1.6 billion.

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The Grain & Ethanol Group's operating income was $9.4 million in the third quarter, which was below its year earlier result of $13.7 million. The grain business benefited from significantly improved basis income, with the company recovering most of the basis losses incurred earlier in the year. Income from the ethanol business declined $8.8 million during the most recent quarter to a loss of $2.0 million due primarily to the combined performance of the company's investments in three ethanol limited liability companies. Third quarter income from the group's investment in Lansing Trade Group was $2.6 million, which is $1.0 million lower than last year. Total third quarter revenues for the group were $651 million; this compares to total revenues of $383 million for the same period last year. While revenues for the group are higher, such amounts do not serve as good predictors of income or economic performance in a commodity based business. During the quarter, the group purchased a grain storage facility, and leased two others. This increased the company's storage capacity by 7.6 million bushels. The Grain & Ethanol Group's operating income through the first nine months was $31.7 million in 2008. In 2007, operating income through September was $35.9 million. Total revenues through September 2008 and 2007 were $1.8 billion and $950 million, respectively.

The Rail Group's operating income was $5.2 million in the third quarter on revenues of $28 million. Last year, the group reported $5.8 million of income and $34 million of revenues for the same three month period. The group recognized $0.7 million in gross margin from the sale of railcars and related leases during the quarter, which is $2.1 million less than similar sales for the same period last year. Gross profit from the leasing business was higher due to wider relet spreads, a higher utilization rate, and growth in the size of the fleet. The fleet has increased 6 percent to 24,007 cars and locomotives. The average utilization rate (the percentage of the fleet in service) for the quarter was 93.2 percent in comparison to 92.5 percent for the same period last year. The gross profit of the railcar repair and manufacturing businesses also grew during the third quarter. The group's first nine months operating income this year was $16.5 million on $106 million of revenues. In 2007, operating income through September was $15.7 million and revenues were $102 million. Included in these results were gains on sales of railcars and related leases of $4.0 million and $7.9 million, for 2008 and 2007, respectively. A seventh railcar repair shop was opened in Ogden, Utah in September, and the group continues to explore additional railcar repair shop opportunities.

The Plant Nutrient Group had a record operating income of $7.2 million during the third quarter of 2008 on revenues of $162 million. The group reported an $0.8 million operating profit on $77 million of revenues in the third quarter of 2007. The current quarter earnings were impacted both positively and negatively by fluctuating fertilizer prices. During the quarter significant margin increases were recognized on sales made due to the inventory appreciation that occurred as a result of rising prices. Certain inventory values, however, declined sharply late in the third quarter and into the fourth quarter resulting in $13.1 million in adjustments due to adverse purchase commitments and lower of cost or market adjustments. Sales volume during the quarter was slightly above the prior year. The group's operating income through September this year was $62.1 million on $541 million of revenues. Last year, its operating income through the first nine months was $18.4 million on revenues of $326 million.

The Turf & Specialty Group had an operating loss of $0.5 million in the third quarter this year on $23 million of revenues. Last year, the group reported a loss of $1.6 million on $18 million of revenues. Turf products tonnage increased slightly from year to year, and gross profit per ton increased considerably, due to a larger percentage of sales coming from proprietary products such as Contec DG. The group continues to see proprietary products as a growth area. Through the first nine months of 2008, the group's operating income was $3.4 million on $99 million of revenues. Last year, its operating income was $0.9 million for the same period, and revenues were $85 million.

The Retail Group reported revenues of $41 million for the third quarter of 2008, which is slightly below the $42 million in revenues reported for the same period in 2007. This sales decline is due to the overall decline in consumer spending. For the three month period, the group's operating loss was $0.2 million, which is an improvement over the $0.6 million operating loss in the prior year. Through nine months the group has lost $0.2 million on $127 million of revenues. Last year, the operating income through September was $0.8 million and total revenues were $131 million. Margins improved during the third quarter, which has led to year to date margins being consistent with the prior year.

Total company interest expense for the quarter and year to date are $3.3 million and $11.8 million higher than the prior year, respectively.

"Our third quarter and nine month results are both records, however, we were disappointed by the sudden turn of events in the fertilizer markets," said President and Chief Executive Officer Mike Anderson. "The Plant Nutrient Group contributed significantly to our income during the period, however, our expectations for the group were even higher before the recent sharp decline in global fertilizer prices that led to material inventory adjustment."

"Our current guidance is $3.50 - $4.00 per diluted share," Mr. Anderson continued. "As we noted in the second quarter press release our former guidance was heavily influenced by the reported and expected performance of our Plant Nutrient Group. This is again true of our current guidance, which is primarily attributed to the aforementioned decline in global fertilizer prices. The current guidance is also partially attributable to the economics in the ethanol industry. Numerous other factors will also have a bearing on the full year outcome, such as; grain prices, timing of railcar sales, and the performance of our equity investments, which include Lansing Trade Group and the ethanol production facilities."

The company will host a webcast on Wednesday, November 5, 2008 at 11:00 A.M. ET, to discuss its performance and full year outlook. 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 12 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


                      FINANCIAL TABLES FOLLOW . . .


  The Andersons, Inc.
  Consolidated Statements of Income
  (Unaudited)
                                 Three Months ended    Nine Months ended
                                    September 30          September 30
  (in thousands, except for per
   share amounts)                  2008      2007        2008        2007

  Sales and merchandising
   revenues                      $905,712  $553,708  $2,719,413  $1,594,425
  Cost of sales and
   merchandising revenues         832,687   504,894   2,473,810   1,429,390
  Gross profit                     73,025    48,814     245,603     165,035

  Operating, administrative and
   general expenses                48,239    39,040     136,934     116,987
  Allowance for doubtful
   accounts receivable                333       458       2,902       1,102
  Interest expense                  7,497     4,174      25,140      13,386
  Other income / gains:
    Equity in earnings of
     affiliates                      (619)    9,518      15,801      17,173
    Other income, net               1,279     2,200       6,318      19,141
  Minority interest in net
   (income) loss of subsidiary      1,841       549       1,588       1,065
  Income before income taxes       19,457    17,409     104,334      70,939
  Income taxes                      6,617     6,844      38,045      25,647
  Net income                      $12,840   $10,565     $66,289     $45,292

  Per common share:
        Basic earnings              $0.71     $0.59       $3.67       $2.54
        Diluted earnings            $0.70     $0.58       $3.60       $2.48
        Dividends paid            $0.0850   $0.0475     $0.2400     $0.1425

  Weighted average shares
   outstanding-basic               18,085    17,878      18,059      17,800
  Weighted average shares
   outstanding-diluted             18,380    18,311      18,409      18,282



                            The Andersons, Inc.
                         Consolidated Balance Sheets
                                 (Unaudited)

                                       September 30 December 31 September 30
              (in thousands)                2008        2007        2007

  Assets
  Current assets:
    Cash and cash equivalents              $28,541     $22,300     $22,357
    Restricted cash                          3,630       3,726       3,737
    Accounts receivable, net               184,566     106,257     127,382
    Margin deposits, net                    58,077      20,467      28,970
    Inventories                            382,268     502,904     306,908
    Commodity derivative assets -
     current                               113,427     205,956     108,039
    Other current assets                    71,769      43,281      44,200
  Total current assets                     842,278     904,891     641,593

  Investments and other assets             169,800     137,518     115,597
  Commodity derivative assets               19,010      29,458      29,999
  Railcar assets leased to others (net)    175,947     153,235     143,251
  Property, plant and equipment (net)      118,288      99,886     100,829
                                        $1,325,323  $1,324,988  $1,031,269

  Liabilities and shareholders' equity
  Current liabilities:
    Short-term borrowings                  $43,600    $245,500    $163,400
    Commodity derivative liabilities -
     current                                80,874     122,488      77,617
    Other current liabilities              370,430     359,224     244,624
  Total current liabilities                494,904     727,212     485,641

  Deferred items and other long-term
   liabilities                              65,007      49,631      45,315
  Commodity derivative liabilities           6,825       2,090      26,285
  Long-term debt non-recourse               43,964      56,277      60,107
  Long-term debt                           295,207     133,195      85,302
  Minority interest                         10,936      12,219      12,607
  Shareholders' equity                     408,480     344,364     316,012
                                        $1,325,323  $1,324,988  $1,031,269



  Segment Data

                                       Grain &             Plant    Turf &
                                       Ethanol     Rail   Nutrient Specialty
     Quarter ended September 30, 2008
  Revenues from external customers    $651,045   $28,394  $162,018  $23,164

  Gross Profit                          25,021     9,009    21,731    5,176

  Other income / Equity in earnings
   of affiliates                           392        84       405       76

  Operating income (loss)                9,443     5,164     7,223     (497)

     Quarter ended
      September 30, 2007
  Revenues from external customers    $382,907   $33,890   $76,732  $17,911

  Gross Profit                          16,294    10,367     6,458    3,753

  Other income / Equity in earnings
   of affiliates                        10,226       243       350      185

  Operating income (loss)               13,706     5,792       815   (1,626)


                                       Grain &             Plant    Turf &
                                       Ethanol     Rail   Nutrient Specialty
     Nine months ended
      September 30, 2008
  Revenues from external customers  $1,845,955  $106,346  $540,988  $98,740

  Gross Profit                          65,595    29,260    93,805   19,368

  Other income / Equity in earnings
   of affiliates                        20,567       602       732      265

  Operating income (loss)               31,670    16,464    62,132    3,385

     Nine months ended
      September 30, 2007
  Revenues from external customers    $950,430  $102,251  $326,200  $84,609

  Gross Profit                          46,968    28,897    35,274   14,991

  Other income / Equity in earnings
   of affiliates                        27,401       765       806      380

  Operating income (loss)               35,857    15,702    18,363      880


  Segment Data

                                            Retail     Other        Total
     Quarter ended
      September 30, 2008
  Revenues from external customers         $41,091      $-        $905,712

  Gross Profit                              12,088       -          73,025

  Other income / Equity in earnings of
   affiliates                                  125      (422)          660

  Operating income (loss)                     (155)   (1,721)       19,457

     Quarter ended
      September 30, 2007
  Revenues from external customers         $42,268      $-        $553,708

  Gross Profit                              11,942       -          48,814

  Other income / Equity in earnings of
   affiliates                                  149       565        11,718

  Operating income (loss)                     (554)     (724)       17,409


                                            Retail     Other        Total
     Nine months ended
      September 30, 2008
  Revenues from external customers        $127,384      $-      $2,719,413

  Gross Profit                              37,575       -         245,603

  Other income / Equity in earnings of
   affiliates                                  433      (480)       22,119

  Operating income (loss)                     (172)   (9,145)      104,334

     Nine months ended
      September 30, 2007
  Revenues from external customers        $130,935      $-      $1,594,425

  Gross Profit                              38,905       -         165,035

  Other income / Equity in earnings of
   affiliates                                  467     6,495        36,314

  Operating income (loss)                      775      (638)       70,939

First Call Analyst:
FCMN Contact: debra_crow@andersonsinc.com

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20081104/CLTU081LOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com

SOURCE: The Andersons, Inc.

CONTACT: Gary L. Smith, VP, Finance & Treasurer, The Andersons, Inc.,
+1-419-891-6417, gary_smith@andersonsinc.com


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