The Andersons, Inc. Reports Second Quarter Results

Earnings Of $0.87 Per Diluted Share

PRNewswire-FirstCall
MAUMEE, Ohio
Aug 5, 2009

The Andersons, Inc. , today announced second quarter net income attributable to the company of $15.9 million, or $0.87 per diluted share, on revenues of $811 million. In the same three month period of 2008, the company reported record results of $45.6 million, or $2.48 per diluted share, on $1.1 billion of revenues. For the first six months of 2009, the company earned $20.9 million, or $1.14 per diluted share, on revenues of $1.5 billion. In the first half of 2008, The Andersons reported record results of $53.4 million, or $2.90 per diluted share, on revenues of $1.8 billion. It should be noted that the earnings from the prior year included unprecedented margins in our Plant Nutrient Group that accounted for nearly two-thirds of the income.

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The Grain & Ethanol Group's operating income of $8.9 million in the second quarter was significantly less than its year earlier result of $20.0 million. The grain business had its third best second quarter as it benefited from good space income. The ethanol business was profitable during the second quarter of 2009. When compared to the prior year; however, income from the ethanol business was down considerably in the second quarter as last year the business benefited from margins being locked in before the ethanol industry decline. Second quarter 2009 income from the group's investment in Lansing Trade Group was also significantly lower than last year, primarily due to declines in its trading business. Total second quarter revenues for the group were $500 million; this includes $188 million of grain and ethanol sales made by the group in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the second quarter of 2008, the group's total revenues were $696 million and included $226 million of the aforementioned sales. While revenues for the group are lower, due to substantially lower commodity prices, such amounts do not serve as good predictors of income or economic performance in a commodity-based business. The Grain & Ethanol Group's operating income through the first six months was $14.7 million in 2009 and $22.2 million in 2008. Total revenues through June 2009 and 2008 were $1.0 billion and $1.2 billion, respectively.

The Rail Group's operating income was $0.6 million in the second quarter of 2009, which is down significantly from the $4.9 million earned during the same three month period a year ago. The group continues to be impacted by the double digit declines in rail traffic. The group recognized $0.8 million in gross margin from the sale of railcars and related leases during the quarter, whereas last year $1.1 million was recognized. Gross profit from the leasing business was significantly less due to lower utilization rates, the corresponding increase in storage expense from idle assets, increased maintenance expense per car, and decreased leasing rates. The group now has approximately 23,800 cars and locomotives. The average utilization rate (the percentage of the fleet in service) for the quarter was 80.6 percent in comparison to 93.3 percent for the same period last year. The gross profit of both the railcar repair and manufacturing businesses declined considerably this quarter due to reduced activity resulting from the overall economic decline. Revenues of $24 million for the second quarter were down significantly from the $43 million reported in 2008, due mainly to a $14 million reduction in car sales. The group's first half operating income this year was $1.5 million on $51 million of revenues. In 2008, operating income through June was $11.3 million and revenues were $78 million. These results included gains on sales of railcars and related leases of $1.1 million and $3.3 million, respectively.

The Plant Nutrient Group had an operating income of $10.3 million during the second quarter of 2009, on revenues of $198 million. In the same three month period of 2008, the group achieved record operating income of $47.4 million, on revenues of $274 million. Margins were down significantly from the prior year. Margins were significantly lower as basic nutrient prices deflated in 2009, whereas in 2008 margins greatly increased as nutrient prices inflated. Retailers reducing their nutrient inventory holdings, and lower application rates of basic nutrients (potash, potassium and to a lesser degree nitrogen), led to reduced sales volume this quarter. The group's first half operating income this year was $12.4 million on $309 million of revenues. Last year, its operating income through the first six months was a record $54.9 million on revenues of $379 million. The group acquired Hartung Brothers Inc.'s Fertilizer Division (HBI) on August 1st. HBI is a regional wholesale supplier of liquid fertilizers with five locations in Wisconsin and one in southeastern Minnesota. This acquisition will allow the group to expand its value added product offering, grow its wholesale customer base, and broaden its geographic territory.

The Turf & Specialty Group had a record operating income of $3.0 million in the second quarter this year on $40 million of revenues. Last year, the group reported $1.9 million of income on $36 million of revenues for the period. Turf products tonnage increased by over 20 percent year to year, but gross profit per ton decreased due to a product mix that included a higher percentage of consumer and industrial products. Through the first half of 2009, the group's operating income was a record $6.1 million on $84 million of revenues. Last year, its operating income was $3.9 million for the same period, and revenues were $76 million. The group continues to experience positive results from its focus on proprietary products and expanded product lines.

The Retail Group reported revenues of $49 million for the second quarter of 2009, which is below the $53 million in revenues reported for the same period in 2008. The group earned operating income of $2.9 million in the second quarter of 2009. In the comparable period last year, the group's operating income was $3.4 million. Through six months, the group earned $0.2 million and total revenues were $83 million. Last year through June the group broke even on total revenues of $86 million. Both the group's margins and customer counts have improved slightly; however, this was offset by a decline in the average sale per customer.

"Although we would have liked better results this quarter, it is important to remember that last year's second quarter results included unprecedented margins in our Plant Nutrient Group. We are pleased with the results of our grain and ethanol businesses. The grain business performance was strong, and our ethanol business returned to profitability, which is an accomplishment in the current ethanol environment. Conversely, we continue to be disappointed with the Lansing Trade Group results this year. The Plant Nutrient Group has returned to solid financial performance, and we believe the lower of cost or market issues are behind us. The Turf & Specialty Group set an earnings record as the value added and proprietary product strategy being pursued continues to be successful. Our Rail Group, and to a lesser extent our Retail Group, however, continue to be impacted by the overall economic decline," said Chairman and Chief Executive Officer Mike Anderson. "These results continue to demonstrate that our purposeful diversification allows us to remain a strong and profitable company, even when some businesses are underperforming."

The company will host a webcast on Thursday, August 6, 2009 at 11:00 A.M. ET, to discuss its performance. 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 14 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       Six Months ended
                                        June 30               June 30
  (in thousands, except
   for per share amounts)           2009       2008       2009        2008
                                    ----       ----       ----        ----

  Sales and
   merchandising
   revenues                     $810,954  $1,100,700  $1,508,346 $1,813,701
  Cost of sales and
   merchandising
   revenues                      737,620     980,363   1,373,638  1,641,123
                                 -------     -------   ---------  ---------
  Gross profit                    73,334     120,337     134,708    172,578

  Operating,
   administrative and
   general expenses               46,723      49,973      93,253     91,264
  Interest expense                 5,161       8,521      10,851     17,643
  Other income (loss):
    Equity in earnings
     (loss) of affiliates            784       7,781      (2,890)    16,420
    Other income, net              2,724       2,155       3,963      5,039
                                   -----       -----       -----      -----
  Income before income taxes      24,958      71,779      31,677     85,130
  Income taxes                     9,312      26,835      12,118     31,428
                                   -----      ------      ------     ------
  Net income                      15,646      44,944      19,559     53,702
    Net (income) loss attributable
     to the noncontrolling interest  272         682       1,311       (253)
                                     ---         ---       -----       ----
  Net income attributable
   to The Andersons, Inc.        $15,918     $45,626     $20,870    $53,449
                                 =======     =======     =======    =======

  Per common share:
        Basic earnings             $0.87       $2.52       $1.15      $2.95
                                   =====       =====       =====      =====
        Diluted earnings           $0.87       $2.48       $1.14      $2.90
                                   =====       =====       =====      =====
        Dividends paid           $0.0875     $0.0775     $0.1725    $0.0155
                                 =======     =======     =======    =======



  The Andersons, Inc.
  Consolidated Balance Sheets
  (Unaudited)

                                 June 30     December 31   June 30
  (in thousands)                    2009        2008       2008
                                    ----        ----       ----

  Assets
  Current assets:
    Cash and cash equivalents   $179,752     $81,682    $33,379
    Restricted cash                4,243       3,927      3,664
    Accounts receivable, net     130,824     126,255    187,184
    Margin deposits, net          38,009      13,094     79,017
    Inventories                  205,084     436,920    406,839
    Commodity derivative
     assets - current             48,635      84,919    493,571
    Other current assets          40,564     109,165     47,489
                                  ------     -------     ------
  Total current assets           647,111     855,962  1,251,143

  Investments and
   other assets                  153,281     153,488    156,005
  Commodity derivative assets      1,354       3,662     84,297
  Railcar assets leased
   to others (net)               176,656     174,132    152,879
  Property, plant and
   equipment (net)               120,535     121,529    110,146
                                 -------     -------    -------
                              $1,098,937  $1,308,773 $1,754,470
                              ==========  ========== ==========

  Liabilities and
   shareholders' equity
  Current liabilities:
    Short-term line of credit         $-          $-   $432,500
    Commodity derivative
     liabilities - current        66,698      67,055    160,611
    Other current liabilities    243,056     458,208    350,795
                                 -------     -------    -------
  Total current liabilities      309,754     525,263    943,906

  Deferred items and other
   long-term liabilities          85,772      80,687     53,058
  Commodity
   derivative
   liabilities                     4,555       3,706     19,923
  Long-term debt non-recourse     28,938      40,055     47,934
  Long-term debt                 285,619     293,955    281,496
  Shareholders' equity           384,299     365,107    408,153
                                 -------     -------    -------
                              $1,098,937  $1,308,773 $1,754,470
                              ==========  ========== ==========



  Segment Data

                 Grain &          Plant    Turf &
                 Ethanol  Rail  Nutrient Specialty Retail   Other    Total
                 -------  ----  -------- --------- ------   -----    -----
  Quarter ended
   June 30, 2009

  Revenues from
  external
  customers   $500,401 $23,762 $197,638  $39,752  $49,401      $-   $810,954

  Gross Profit   23,325   4,815   22,106    7,614   15,474      -     73,334

  Equity in
   earnings
   (loss) of
   affiliates       781       -        3        -        -      -        784

  Other income
   (loss), net      590     221      770      236      136    771      2,724

  Income before
   income taxes   8,659     619   10,345    3,042    2,864   (571)    24,958

  (Income) loss
   attributable
   to the
   noncontrolling
   interest         272       -        -        -        -      -        272

  Operating income
   (loss) (a)     8,931     619   10,345    3,042    2,864   (571)    25,230


  Quarter ended
   June 30, 2008

  Revenues from
   external
   customers   $695,787 $42,941 $273,501  $35,915  $52,556     $- $1,100,700

  Gross Profit   29,195   9,100   58,396    7,266   16,380      -    120,337

  Equity in
   earnings of
   affiliates     7,780       -        1        -        -      -      7,781

  Other income
   (loss), net    1,221     340      181       96      161    156      2,155

  Income before
   income taxes  19,312   4,874   47,369    1,882    3,360 (5,018)    71,779

   (Income) loss
   attributable
   to the
   noncontrolling
   interest         682       -        -        -        -      -        682

  Operating income
   (loss) (a)    19,994   4,874   47,369    1,882    3,360 (5,018)    72,461



                Grain &          Plant    Turf &
                Ethanol  Rail  Nutrient Specialty  Retail   Other   Total
                -------  ----  -------- ---------  ------   -----   -----
  Six months
   ended June 30,
   2009

  Revenues from
   external
   customers   $980,922 $50,532 $309,400 $84,455  $83,037     $- $1,508,346

  Gross Profit   46,624  10,546   36,628  16,033   24,877      -    134,708

  Equity in
   Earnings (loss)
   of affiliates (2,895)      -        5       -       -       -     (2,890)

  Other income
   (loss), net    1,149     187    1,258     541      247     581     3,963

  Income before
   income taxes  13,355   1,501   12,392   6,139      163  (1,873)   31,677

  (Income) loss
   attributable
   to the
   noncontrolling
   interest       1,311                                               1,311

  Operating
   income (loss) 14,666   1,501   12,392   6,139      163  (1,873)   32,988



  Six months ended
   June 30, 2008

  Revenues from
   external
   customers $1,194,910 $77,952 $378,970 $75,576  $86,293     $- $1,813,701

  Gross Profit   40,574  20,251   72,074  14,192   25,487      -    172,578

  Equity in
   earnings
   (loss) of
   affiliates    16,417       -        3       -        -      -     16,420

  Other income
   (loss), net    3,758     518      324     189      308     (58)    5,039

  Income before
   income taxes  22,480  11,300   54,909   3,882      (17) (7,424)   85,130

  (Income) loss
   attributable
   to the
   noncontrolling
   interest        (253)                                               (253)

  Operating
   income (loss) 22,227  11,300   54,909   3,882      (17) (7,424)   84,877


   (a) Operating income (loss) for each Group is defined as net sales and
  merchandising revenues plus identifiable other income less all
  identifiable operating expenses, including interest expense for carrying
  working capital and long-term assets and is reported net of the
  noncontrolling interest share of (income) loss.

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

Photo: http://www.newscom.com/cgi-bin/prnh/20081104/CLTU081LOGO

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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