Press Releases

The Andersons, Inc. Reports Record Quarterly Earnings
2nd Qtr. Net Income Of $10.1 Million Up 29% From Last Year
Raises Full-Year Earnings Guidance
PRNewswire-FirstCall
MAUMEE, Ohio

The Andersons, Inc. , today announced that its net income and earnings per share in the most recent three-month period were the best quarterly performance in the company's history. For the second quarter of 2004, The Andersons achieved net income of $10.1 million, or $1.35 per diluted share, compared to net income of $7.8 million and earnings per diluted share of $1.07 that it reported for the same three-month period of 2003. Total revenues of $376 million for the period were $64 million higher than the second quarter of 2003. For the first half of 2004, the company's net income was $9.8 million, or $1.31 per diluted share, on revenues of $651 million. In the first six months of last year, The Andersons earned $7.3 million, or $1.00 per diluted share, on revenues of $551 million.

The Agriculture Group achieved an operating income of $10.9 million for the quarter. In the second quarter of 2003, the group earned $7.9 million. Revenues of $268 million in this year's second quarter were $60 million higher than a year ago. Second quarter revenues and gross profit in the group's grain business were higher this year due to higher average grain prices, increased storage income and a greater number of bushels sold. The recently acquired elevator in Oakville, Indiana and increased investment in Lansing Grain LLC also contributed to the grain income improvement. The number of tons sold during the second quarter by the group's plant nutrient business increased from the prior year. Total revenues also increased due to higher raw material costs. However, average gross margins were somewhat lower, and plant nutrient income was down slightly from the second quarter of last year. The Agriculture Group's operating income for the first six months of 2004 amounted to $9.4 million, an increase of $2.5 million from the first half of 2003. Total revenues of $452 million for the six-month period were $95 million higher than a year ago. At this point in the agricultural growing season, the outlook for this year's corn crop is very good. In fact, the USDA is predicting that U.S. farms will see record yields this fall.

The Rail Group's second quarter income again outpaced its prior year performance. Operating income of $2.1 million in the second quarter this year was $0.7 million higher than the same three-month period of 2003. Total revenues of $13.1 million were $0.5 million higher than last year. The large acquisition of rail equipment, related leases and management contracts that the group announced midway through the first quarter contributed to the strong second quarter performance. Through the first six months of 2004, the group has achieved operating income of $3.3 million on revenues of $24.2 million. In the first half of last year, income was $1.7 million on revenues of $17.1 million.

The Processing Group generated revenues of $40.0 million in the second quarter of 2004 and operating income of $1.0 million. In 2003, the group incurred a slight operating loss during the period on revenues of $37.1 million. The strongest sales period for lawn products manufacturers typically occurs in the first calendar quarter each year. The second quarter then consists primarily of refill orders from retailers and distributors. This year the Processing Group's lawn business, which had experienced a weather- related decline in its first quarter results, more than recouped this income shortfall during the second quarter. Increased volumes in some markets and mix-related gains in average gross margins fueled this improvement. Through the first six months of 2004, the group has achieved operating income of $4.2 million on $85.3 million of revenues. First half income last year was $3.7 million, and revenues amounted to $89.6 million. Noting recent escalation in some energy-related raw material costs, the company indicated that the Processing Group may not duplicate last year's better than normal second half performance.

The Retail Group's sales of $54.5 million in the second quarter matched the same three-month period in 2003. Both the number of customers served and the average amount of each customer's purchase were almost identical to the levels experienced last year. Average margins were impacted, however, by weak lawn and garden sales, the result of unusually cool and wet weather throughout most of the spring. Lawn and garden is typically a major product category in the group's stores during the spring season. Through the first half of this year, the group has earned operating income of $1.4 million, or $0.3 million less than it did during the first six months of 2003. Total revenues to-date through June were $89.1 million, 3 percent above last year.

"Achieving our best-ever quarterly performance has really been gratifying," said President and Chief Executive Officer Mike Anderson. "It's an accomplishment made possible by the dedication, hard work and infectious enthusiasm demonstrated by employees throughout the company. Despite worrisome energy costs, rising interest rates and continued escalation in health care expenses, conditions in several of our businesses are generally improving, and I now believe that our earnings per share for the year could exceed the upper end of the range we had projected at the end of the first quarter. While forecasting future results in our diverse businesses is not precise, I now believe that the company's 2004 full-year earnings could be within the range of $1.65 to $1.90 per share."

The company will host a webcast on Thursday, August 5, 2004 at 11:00 A.M. EDT, to discuss its second quarter performance and full-year outlook. This can be accessed under the heading "Financial Information" on its website at www.andersonsinc.com or at www.firstcallevents.com/service/ajwz409023204gf12.html .

The Andersons, Inc. is a regional grain merchandiser with diversified businesses in agriculture, the formulation and distribution of agricultural plant nutrients and industrial materials, railcar marketing, turf products production and general merchandise retailing that generate revenues of approximately $1.2 billion per year. Founded in 1947, the company operates grain and production facilities throughout the Midwest and six retail stores in northern and central Ohio. The Andersons' corporate headquarters is located in Maumee, Ohio. Additional information is available online at http://www.andersonsinc.com/ .

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
                                          June 30             June 30
  (in thousands, except for per
   share amounts)                      2004      2003      2004      2003

  Sales and merchandising revenues   $375,899  $312,150  $650,949  $550,801
  Cost of sales and merchandising
   revenues                           319,831   264,421   558,819   470,189
  Gross profit                         56,068    47,729    92,130    80,612

  Operating, administrative and
   general expenses                    38,135    34,869    72,879    67,307
  Interest expense                      2,738     2,213     5,404     4,516
  Other income                          1,277     1,168     2,230     2,297
  Income before income taxes           16,472    11,815    16,077    11,086
  Income taxes                          6,410     4,022     6,261     3,774
  Net income                          $10,062    $7,793    $9,816    $7,312

  Per common share:
        Basic earnings                  $1.39     $1.09     $1.36     $1.02
        Diluted earnings                $1.35     $1.07     $1.31     $1.00
        Dividends paid                 $0.075    $0.070     $0.15     $0.14

  Weighted average shares
   outstanding-basic                    7,235     7,130     7,227     7,155
  Weighted average shares
   outstanding-diluted                  7,472     7,290     7,475     7,318


                           The Andersons, Inc.

                       Consolidated Balance Sheets
                               (Unaudited)

                                           June 30   December 31   June 30
             (in thousands)                  2004        2003        2003

  Assets
  Current assets:
    Cash and cash equivalents               $8,768      $6,444     $14,573
    Restricted cash                          1,777         -           -
    Accounts receivable (net) and
     margin deposits                        75,343      68,546      62,780
    Inventories                            152,865     259,755     170,450
    Other current assets                    20,987      22,234      12,199
  Total current assets                     259,740     356,979     260,002

  Other assets                              21,507      13,702      14,369
  Railcar assets leased to others (net)    103,214      29,489      29,695
  Property, plant and equipment (net)       94,360      92,449      91,653
                                          $478,821    $492,619    $395,719

  Liabilities and shareholders' equity
  Current liabilities:
    Notes payable                          $15,000     $48,000     $60,000
    Other current liabilities              152,158     219,447     115,576
  Total current liabilities                167,158     267,447     175,576

  Deferred items and other long-term
   liabilities                              28,651      27,254      24,068
  Long-term debt non-recourse               74,216         -           -
  Long-term debt                            83,578      82,127      84,752
  Shareholders' equity                     125,218     115,791     111,323
                                          $478,821    $492,619    $395,719


                           The Andersons, Inc.

                               Segment Data

                                         Agriculture      Rail    Processing
       Quarter ended June 30, 2004
  Revenues from external customers         $268,208     $13,133     $40,031

  Gross Profit                               27,189       6,865       5,506

  Other income                                  767          56          88

  Operating income (loss)                    10,940       2,050       1,018

       Quarter ended June 30, 2003
  Revenues from external customers          207,762      12,681      37,130

  Gross Profit                               22,972       3,358       5,158

  Other income                                  487          35         115

  Operating income (loss)                     7,894       1,376         (33)

     Six months ended June 30, 2004
  Revenues from external customers          452,401      24,213      85,257

  Gross Profit                               40,907      11,934      13,365

  Other income                                1,297         153         139

  Operating income (loss)                     9,411       3,341       4,230

     Six months ended June 30, 2003
  Revenues from external customers          357,667      17,063      89,550

  Gross Profit                               36,725       5,500      13,640

  Other income                                1,058          85         318

  Operating income (loss)                     6,862       1,680       3,706


                           The Andersons, Inc.

                               Segment Data

                                            Retail     Other        Total
       Quarter ended June 30, 2004
  Revenues from external customers         $54,527       $-       $375,899

  Gross Profit                              16,508        -         56,068

  Other income                                 254        112        1,277

  Operating income (loss)                    3,706     (1,242)      16,472

       Quarter ended June 30, 2003
  Revenues from external customers          54,577        -        312,150

  Gross Profit                              16,241        -         47,729

  Other income                                 395        136        1,168

  Operating income (loss)                    4,262     (1,684)      11,815

     Six months ended June 30, 2004
  Revenues from external customers          89,078        -        650,949

  Gross Profit                              25,924        -         92,130

  Other income                                 410        231        2,230

  Operating income (loss)                    1,389     (2,294)      16,077

     Six months ended June 30, 2003
  Revenues from external customers          86,521        -        550,801

  Gross Profit                              24,747        -         80,612

  Other income                                 533        303        2,297

  Operating income (loss)                    1,639     (2,801)      11,086

SOURCE: The Andersons, Inc.

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