Press Releases

The Andersons, Inc. Reports 1st-Quarter Improvement
4th Consecutive Qtr. Of Year-To-Year Increases in EPS 10 cents Loss per Share vs. 49 cents Loss in Same Quarter of '97
PRNewswire
MAUMEE, Ohio

The Andersons, Inc. today announced a net loss of $824,000, or 10 cents per share, for the first quarter of 1998, an improvement from the loss of $4.1 million, or 49 cents per share, experienced in the comparable period last year. Because of the seasonal nature of several of its businesses, the first and third quarters are typically soft periods for the company, and they often generate losses.

The first quarter 1998 results marked the fourth consecutive quarter of year-to-year improvement in earnings per share. The company's EPS on 12-month trailing income stands at 91 cents. A year ago it was 12 cents.

Total revenues of $222.2 million for the period were up 19 percent from the $186.8 million realized in the first quarter of 1997, primarily due to higher grain sales.

Agriculture

The company's Agriculture Group operates grain elevators and wholesale fertilizer distribution facilities in four eastern corn belt states. Collectively, these facilities handle about 150 million bushels of grain and one million tons of dry and liquid agricultural fertilizer products annually. In addition, the group operates retail farm centers in the region and recently announced its intent to acquire several additional outlets in northwest Ohio. Late last month, the company also announced a proposed lease and marketing agreement with Cargill whereby The Andersons will operate Cargill's grain elevators in Maumee and Toledo, Ohio.

The group's operating performance in the first quarter this year was dramatically better than the 1997 January-March period because of improvements in the grain business. A year ago, the company was still suffering from two successive poor harvests in parts of its region. Last year, however, grain production returned to a more normal pattern, and carryover stocks of U.S. corn, soybeans and wheat all rose. This improved The Andersons' ability to generate a return on its storage space. At the end of 1997, the company's elevators were essentially full, with almost double the amount of grain they had held a year earlier.

Processing & Manufacturing

As its name implies, this group consists primarily of two value-added businesses. The processing business unit produces granular lawn fertilizer products for retailers throughout the country as well as professional lawn- care and golf course markets. It also produces corncob-based chemical and feed ingredient carriers and animal bedding and litter products. The manufacturing business unit repairs, sells and leases various types of railcars, offers fleet management services to private railcar owners and operates a custom steel fabrication business.

The Processing & Manufacturing Group's first-quarter operating income improved from the year-earlier period primarily due to lawn fertilizer volume growth from a nationwide retailer which The Andersons has recently begun to supply.

Retail

This group operates six large retail stores in Ohio. The company characterizes its retail concept as "a complete home store" -- a traditional home center with plumbing, electrical and building supplies, etc. -- but also indoor and outdoor garden centers, extensive lives of housewares and domestics, pet supplies, automotive supplies, sporting goods, and a unique offering in food which includes a deli, bakery, produce, specialty foods and wine.

The Retail Group has just completed a major two-year effort to renovate its stores and greatly improve its appearance and merchandising. The unusually warm weather encountered in the first quarter this year adversely affected sales of cold weather products such as space heaters, workwear and snowblowers. For the quarter, same store sales were down somewhat. The timing of Easter, in the first quarter last year but the second quarter this year, also impacted year-to-year comparisons. During the month of April, The Andersons stores are registering sales gains.

Company

According to Chairman and Chief Executive Officer Dick Anderson, "The past couple of years have been tough because of two unusually poor harvests in our region, but our improved first-quarter performance shows that it's pretty well behind us now. Looking forward, we are optimistic about the growth potential in PMG's railcar and processing businesses and believe we'll see a strong performance overall in 1998."

The Andersons, Inc. paid cash dividends of four cents per share in the first and second quarters of 1998. In 1997, the quarterly dividend was three cents. The company continues to repurchase shares on the open market from time to time.

The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. This strong position in its basic business has allowed the company to diversity into other agribusiness operations, several processing and manufacturing businesses, and general merchandise retailing. The company has been in operation since 1947.

This release contains forward-looking statements, including statements with respect to anticipated revenue growth, adequacy of cash flows and profitability. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, economic and weather conditions in agriculture, economic conditions and competition in its retail stores' markets, risks associated with acquisitions and the risk factors set forth from time to time in the company's filings with the Securities and Exchange Commission.

                           The Andersons, Inc.
                  Consolidated Statements of Operations
                               (Unaudited)

                                                Three Months Ended
                                                     March 31,
  (in thousands, except for per share amounts)    1998       1997

  Grain sales and revenues                      $127,829    $93,809
  Fertilizer, retail and other sales              93,392     92,009
  Other income                                       968        947

    Total                                        222,189    186,765

  Cost of grain sales                            120,233     91,200
  Cost of fertilizer, retail and other sales      68,096     68,248

    Total                                        188,329    159,448

  Gross profit                                    33,860     27,317

  Operating, administrative and general expenses  32,729     31,902
  Interest expense                                 2,458      2,140

    Total                                         35,187     34,042

  Net loss before income tax credit               (1,327)    (6,725)

  Income tax credit                                 (503)    (2,643)

  Net loss                                         $(824)   $(4,082)

  Per common share:
  Basic and diluted earnings                      $(0.10)    $(0.49)

  Dividends paid                                   $0.04      $0.03

  Weighted average common shares outstanding       7,986      8,346

                             The Andersons, Inc.
                         Consolidated Balance Sheets
                                 (Unaudited)

  (in thousands)                                 March 31   December 31
                                                    1998       1997

  Assets
  Current assets:
    Cash and cash equivalents                      $3,391     $8,278
    Accounts receivable:
      Trade accounts and notes receivable (net)    79,363     68,643
      Margin deposits                               1,291        771

        Total                                      80,654     69,414
    Inventories                                   197,868    191,467
    Deferred income taxes                           2,375      1,408
    Prepaid expenses                                4,009      4,521

  Total current assets                            288,297    275,088

  Other assets:
    Notes receivable (net) and other assets         6,609      6,333
    Investments in and advances to affiliates       1,040      1,026

      Total                                         7,649      7,359
  Property, plant and equipment                    87,102     85,797

      Total                                      $383,048   $368,244

  Liabilities and owners' equity
  Current liabilities:
    Notes payable                                 $75,300    $15,572
    Accounts payable for grain                     55,075    121,233
    Other accounts payable                         85,867     63,309
    Accrued expenses                               12,840     12,973
    Current maturities of long-term debt            8,386      8,406

  Total current liabilities                       237,468    221,493

  Pension and postretirement benefits               2,864      2,799
  Long-term debt                                   65,114     65,709
  Deferred income taxes                             5,525      5,393
  Minority interest                                   606        649
  Owners' equity                                   71,471     72,201

    Total                                        $383,048   $368,244

SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor of The Financial Relations Board, Inc., 312-640-6779