Press Releases

The Andersons, Inc. Reports Strong Earnings 2nd Best Quarter In Company's History
EPS $1.08 vs. $1.17 Last Year
PRNewswire-FirstCall
MAUMEE, Ohio

The Andersons, Inc. , today announced second-quarter net income of $7.8 million, or $1.08 per diluted share. In the same three-month period of 2002, the company reported net income of $8.8 million, or $1.17 per diluted share. The net income and earnings per share achieved in the most recent quarter represented the company's second best quarter ever, only exceeded by the same three-month period in 2002. Total revenues of $312 million for the period were $11 million higher than the second quarter of 2002.

Net income for six months was $8.2 million, or $1.12 per diluted share, with revenues of $550 million. In comparison, net income for the first half of 2002 totaled $10.4 million, or $1.39 per diluted share, on revenues of $516 million.

The Agriculture Group's grain business experienced an operating income decline during the first two quarters this year. U.S. stocks of corn, soybeans and wheat have fallen to five-year lows following poor planting and growing conditions in 2002. As a result, demand for grain storage space softened in the first half of 2003, and fewer bushels were handled by the group's elevators, causing a reduction in gross profit from last year's record levels. The company had previously indicated that the 2003 decline was to be expected. Recently, industry analysts and the U.S. Dept. of Agriculture have indicated that there is a strong possibility that 2003 crops will produce record yields. The group's plant nutrient business achieved bottom-line improvement in both the first and second quarters this year. During the most recent three months, volume growth in industrial and specialty agricultural products, better than trend-line margins across most traditional product lines, and expense savings in a number of areas contributed to this improvement. Total Agriculture Group operating income was $8.1 million in the second quarter, and stands at $8.4 million through six months.

The Rail Group's operating income of $1.4 million in the second quarter was up significantly from the same three-month period in 2002. During the period, the group continued to increase the fleet of rail equipment that it owns or manages. At mid-year, the fleet consists of 74 locomotives and more than 5,900 rail cars. Improved utilization of the fleet, with a growing number of cars in active lease service, contributed to the income growth. Although railcar values and monthly lease rates are still below historical averages, these have begun to recover somewhat. During the second quarter, the volume of business in the group's rail car repair and fabrication shops also increased significantly, contributing to the group's operating income improvement. The group also started a rail car repair business in South Carolina. The Rail Group's operating income for the first half of 2003 amounted to $1.7 million.

The Processing Group broke even in the second quarter, essentially matching its prior year results for the period. First-half operating income totaled $3.7 million, or $1.4 million better than the first half of 2002. Through six months, turf-care product sales were up about 16 percent in professional markets and 29 percent in consumer/industrial markets. However, because of product and customer mix changes and higher nitrogen ingredient costs only partially offset by price increases, gross margins were somewhat lower. Sales growth in the group's cob-based products business also contributed to the group's first-half income improvement.

The Retail Group experienced a 2 percent decline in same-store sales in the second quarter compared to the same three-month period in 2002 due to softness in the general economy, new competition in the Toledo area, and weather-related softness in sales of nursery stock. This decline was an improvement from the 8 percent drop experienced in the first quarter, however. Despite lower gross profit attributable to the drop in revenue, store operating costs were reduced in the April-June period, and operating income of $4.3 million equaled the previous year's second-quarter performance. Through six months, the group's operating income is $1.6 million.

"Our most recent quarterly performance should probably be viewed from several different perspectives," said President and Chief Executive Officer Mike Anderson. "First, it was the second best quarter in the company's entire 56-year history. Since our best-ever quarter was in the same three-month period of 2002, however, it shows up as a year-to-year decline. The most meaningful benchmark may well be that our April-June and first half results are at the upper end of the performance track that we've projected on several previous occasions."

The company will host a webcast on Thursday, July 24, 2003 at 11:00 A.M. EDT, to discuss its second 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/ajwz384660748gf12.html .

The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising and agricultural plant nutrients distribution. Its strong position in these basic businesses has allowed the company to diversify into the production of turf care products, rail equipment leasing, and general merchandise retailing. The company 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 Income
                               (Unaudited)

                                     Three Months ended   Six months ended
  (in thousands, except for per            June 30             June 30
   share amounts)                      2003      2002      2003      2002

  Sales and merchandising revenues   $311,891  $301,098  $549,830  $515,929
  Cost of sales and merchandising
   revenues                           263,911   251,557   467,614   430,039
  Gross profit                         47,980    49,541    82,216    85,890

  Operating, administrative and
   general expenses                    34,869    35,219    67,307    67,335
  Interest expense                      2,213     2,573     4,516     5,286
  Other income                          1,114       838     2,215     1,630
  Income before income taxes           12,012    12,587    12,608    14,899
  Income taxes                          4,164     3,827     4,371     4,530
  Net income                           $7,848    $8,760    $8,237   $10,369

  Per common share:
        Basic earnings                  $1.10     $1.20     $1.15     $1.42
        Diluted earnings                $1.08     $1.17     $1.12     $1.39
        Dividends paid                  $0.07    $0.065     $0.14     $0.13

  Weighted average shares
   outstanding-basic                    7,130     7,299     7,155     7,294
  Weighted average shares
   outstanding-diluted                  7,294     7,509     7,344     7,445


                           The Andersons, Inc.
                       Consolidated Balance Sheets
                               (Unaudited)

                                         June 30   December 31   June 30
             (in thousands)                2003        2002        2002

  Assets
  Current assets:
    Cash and cash equivalents              $14,573      $6,095      $7,072
    Accounts receivable (net) and
     margin deposits                        62,780      59,800      67,537
    Inventories                            170,450     256,275     149,582
    Other current assets                    12,199      15,716      17,058
  Total current assets                     260,002     337,886     241,249

  Other assets                              14,369      12,591      10,953
  Railcar assets leased to others (net)     29,695      26,399      31,577
  Property, plant and equipment (net)       91,653      92,939      94,537
                                          $395,719    $469,815    $378,316

  Liabilities and shareholders' equity
  Current liabilities:
    Notes payable                          $60,000     $70,000     $41,800
    Other current liabilities              115,576     187,056     126,599
  Total current liabilities                175,576     257,056     168,399

  Deferred items, long-term liabilities
   and minority interest                    24,068      23,647      19,911
  Long-term debt                            84,752      84,272      85,529
  Shareholders' equity                     111,323     104,840     104,477
                                          $395,719    $469,815    $378,316


                               Segment Data
                               (Unaudited)

  Quarter ended June 30, 2003

              Agriculture  Rail  Processing  Retail   Other      Total
  Revenues
   from
   external
   customers    $207,503  $12,681  $37,130  $54,577  $  -        $311,891
  Other income       433       35      115      395        136      1,114
                $207,936  $12,716  $37,245  $54,972  $     136   $313,005

  Operating
   income
   (loss)         $8,091  $1,376   $   (33) $ 4,262  $  (1,684)   $12,012

  Quarter ended June 30, 2002

  Revenues from
   external
   customers    $209,197  $4,056   $32,283  $55,562  $  -        $301,098
  Other income       220      30       166      255        167        838
                $209,417  $4,086   $32,449  $55,817  $     167   $301,936

  Operating
   income
   (loss)         $9,522  $  140   $  (113) $ 4,307  $  (1,269)  $ 12,587

  Six months ended June 30, 2003

  Revenues from
   external
   customers    $356,696 $17,063   $89,550  $86,521  $   -       $549,830
  Other income       976      85       318      533       303       2,215
                $357,672 $17,148   $89,868  $87,054  $    303    $552,045

  Operating
   income
   (loss)       $  8,384 $ 1,680   $ 3,706  $ 1,639  $ (2,801)   $ 12,608

  Six months ended June 30, 2002

  Revenues
   from
   external
   customers    $344,037 $ 8,216   $73,264  $90,412   $   -      $515,929
  Other income       487      33       289      374       447       1,630
                $344,524 $ 8,249   $73,553  $90,786   $   447    $517,559

  Operating
   income
   (loss)        $12,046 $   520   $ 2,305  $ 2,568   $(2,540)   $ 14,899
Audio: http://www.firstcallevents.com/service/ajwz384660748gf12.html

SOURCE: The Andersons, Inc.

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