Press Releases

The Andersons, Inc. Reports Record 3rd Qtr.; Cites Improvement In All Segments
Nine Months EPS $1.37 Vs. $0.62 Last Year
PRNewswire-FirstCall
MAUMEE, Ohio

The Andersons, Inc. , today announced a net loss of $84 thousand for the third quarter, or $0.01 per diluted share. In the same three-month period of 2001, the company reported a loss of $1.9 million, or $0.26 per diluted share. Total revenues of $205 million for the period were $18 million higher than the third quarter of 2001.

Net income for nine months was $10.3 million, or $1.37 per diluted share, with revenues of $721 million. In comparison, September year-to-date net income last year totaled $4.6 million, or $0.62 per diluted share, on revenues of $678 million. Earnings for the quarter and nine months to-date both established new records for the company.

The Andersons has four operating groups: Agriculture, Processing, Rail and Retail.

The Agriculture Group's grain, plant nutrient and farm center businesses all achieved improved revenues and operating results for the quarter. Although earnings from storing grain were lower than they were during the third quarter of 2001, the reduction was more than offset by higher grain and fertilizer sales, improved farm center average gross margins, and the impact of a marketing agreement that covers certain of the company's grain facilities. Through nine months of 2002, the group's operating income almost matched last year's January - September performance. Earlier this week, The Andersons announced that it has signed a letter of intent with Lansing Grain, a grain trading company, to form a new Limited Liability Company (LLC) that will serve as a platform from which to launch future growth initiatives.

The Processing Group continued to achieve improved operating results during the most recent three-month period. While lawn fertilizer volumes were lower than the previous year because of the unusually dry summer throughout much of the country, average gross margins increased due to lower ingredient costs and a shift toward higher margin control products as a result of these drought conditions. The group's nine-month results reflected a significant turnaround from last year's operating loss.

With significantly more cars in service this year than last year, the Rail Group continued to achieve bottom-line growth, overcoming its 2001 third- quarter operating loss. In addition to the increased utilization rate of its railcar and locomotive fleet, the total fleet was also bigger than it was in 2001. The group's operating income for the first nine months of 2002 similarly reflected significant improvement from its 2001 performance.

The Retail Group achieved a 0.6 percent increase in same-store sales compared to the third quarter of 2001, and a substantial reduction in its operating loss for this typically soft season of the year. Average gross margins were also higher, in part due to sales of lawn and garden products in July that had been delayed by poor weather in the spring. As a result, the group's operating income for the first nine months of 2002 was significantly improved from 2001 results.

"I'm really pleased with our recent performance," said President and Chief Executive Officer Mike Anderson. "The fact that all four of our business segments achieved improved operating results for the latest three-month period demonstrates real balance. We again established new records for the company's net income and earnings per share, and our year-to-date EBITDA of $32.2 million was $6.2 million higher than the first nine months of 2001. Excluding the interest to carry grain inventories, our EBITDA amounted to $28.4 million, up $5.4 million from last year. Expenses have been controlled well by our managers. In spite of increases in healthcare, retirement and insurance costs, total operating, administrative and general expenses through September are $1.5 million lower than they were a year ago."

"While we expect to continue to see positive results from many of these improvements, there are factors at work that will cause us to fall short of last year's fourth-quarter earnings. Three months ago, we stated that drought conditions would likely cause grain production in our region to fall below average this year, further eroding our grain storage earnings, already down from the unprecedented levels we have experienced during the past couple of years. I indicated at that time that I thought we would really be challenged to match last year's $1.21 full-year earnings per share. As it's now playing out, the grain harvest is about like we expected. New, however, is the degree of progress being made by all of our other businesses. Because of these positive strides, I now believe that our 2002 earnings may exceed last year by ten to twenty cents a share, placing our full-year EPS in a range from $1.31 to $1.41."

The company will host a webcast on Thursday, October 24, 2002 at 11:00 A.M. EST, to discuss its third-quarter performance and full-year outlook. The webcast can be accessed under "Financial Information" on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz367184468gf12.html .

The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. Its strong position in this basic business has allowed the company to diversify into agricultural fertilizer distribution, lawn fertilizer production, railcar marketing, and general merchandise retailing. The Andersons has been in operation since 1947.

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.

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


                             The Andersons, Inc.

                    Consolidated Statements of Operations

                                      Three Months ended  Nine Months ended
                                         September 30        September 30
  (in thousands, except for per
   share amounts)                        2002      2001      2002      2001

  Sales and merchandising revenues   $204,722  $186,518  $720,651  $677,590
  Cost of sales and merchandising
   revenues                           170,247   155,204   601,073   562,901
  Gross profit                         34,475    31,314   119,578   114,689

  Operating, administrative and
   general expenses                    33,828    33,044   100,376   101,869
  Interest expense                      2,042     2,463     7,328     8,944
  Other income / Gains:
    Other income                          734       812     2,364     2,189
    Gain on involuntary conversion        -         -         -         338
  Income (loss) before income taxes
   and cumulative effect
   of accounting change                  (661)   (3,381)   14,238     6,403
  Income taxes                           (577)   (1,476)    3,953     1,664
  Income (loss) before cumulative
   effect of accounting change            (84)   (1,905)   10,285     4,739
  Cumulative effect of accounting
   change, net of income tax benefit      -         -         -        (185)
  Net income (loss)                      $(84)  $(1,905)  $10,285    $4,554

  Per common share:
        Basic earnings (loss)          $(0.01)   $(0.26)    $1.41     $0.62
        Diluted earnings (loss)        $(0.01)   $(0.26)    $1.37     $0.62
        Dividends paid                 $0.065    $0.065    $0.195    $0.195

  Weighted average shares
   outstanding-basic                    7,319     7,225     7,302     7,300
  Weighted average shares
   outstanding-diluted                  7,319     7,225     7,499     7,324

  Depreciation and amortization                           $10,623   $10,606


                           The Andersons, Inc.

                       Consolidated Balance Sheets
                               (Unaudited)

                                       September 30 December 31 September 30
             (in thousands)                 2002        2001        2001

  Assets
  Current assets:
    Cash and cash equivalents               $7,835      $5,697      $5,088
    Accounts receivable (net) and
     margin deposits                        64,159      54,836      58,165
    Inventories                            201,247     238,291     191,535
    Other current assets                    14,169      27,849      21,228
  Total current assets                     287,410     326,673     276,016

  Other assets                               6,655       6,300       6,695
  Railcar assets leased to others (net)     25,435      26,102      24,379
  Property, plant and equipment (net)       93,039      95,001      95,422
                                          $412,539    $454,076    $402,512

  Liabilities and shareholders' equity
  Current liabilities:
    Notes payable                          $80,000     $82,600     $95,100
    Other current liabilities              128,337     169,068     112,900
  Total current liabilities                208,337     251,668     208,000

  Deferred items and other long-term
   liabilities                              15,554      16,158      16,036
  Long-term debt                            84,961      91,316      87,463
  Shareholders' equity                     103,687      94,934      91,013
                                          $412,539    $454,076    $402,512


                                Segment Data

  Quarter ended September 30, 2002       Agriculture  Processing      Rail
  Revenues from external customers         $138,385     $20,466      $5,119
  Other income                                  340          63          24
                                           $138,725     $20,529      $5,143

  Operating income (loss)                    $1,244     $(1,358)       $733

  Quarter ended September 30, 2001
  Revenues from external customers         $115,799     $22,345      $7,860
  Other income                                  333          97          27
                                           $116,132     $22,442      $7,887

  Operating income (loss)                     $(130)    $(2,184)      $(282)

  Nine months ended September 30, 2002
  Revenues from external customers         $482,422     $93,730     $13,335
  Other income                                  827         352          57
                                           $483,249     $94,082     $13,392

  Operating income (loss)                   $13,290        $947      $1,253

  Nine months ended September 30, 2001
  Revenues from external customers         $430,573     $98,128     $20,863
  Other income                                  832         273          13
  Gain on involuntary conversion                338         -           -
                                           $431,743     $98,401     $20,876

  Operating income (loss)                   $13,385     $(4,210)    $(1,205)


                                Segment Data

  Quarter ended September 30, 2002          Retail      Other      Total
  Revenues from external customers         $40,752       $-      $204,722
  Other income                                 173        134         734
                                           $40,925       $134    $205,456

  Operating income (loss)                     $(60)   $(1,220)      $(661)

  Quarter ended September 30, 2001
  Revenues from external customers         $40,514       $-      $186,518
  Other income                                 131        224         812
                                           $40,645       $224    $187,330

  Operating income (loss)                    $(706)      $(79)    $(3,381)

  Nine months ended September 30, 2002
  Revenues from external customers        $131,164       $-      $720,651
  Other income                                 547        581       2,364
                                          $131,711       $581    $723,015

  Operating income (loss)                   $2,508    $(3,760)    $14,238

  Nine months ended September 30, 2001
  Revenues from external customers        $128,026       $-      $677,590
  Other income                                 465        606       2,189
  Gain on involuntary conversion               -          -           338
                                          $128,491       $606    $680,117

  Operating income (loss)                      $86    $(1,653)     $6,403

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SOURCE: The Andersons, Inc.

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