The Andersons, Inc. Reports Record 2nd Qtr. Net Income of $10.4 Million

EPS of $1.48 for First Half up $0.17 from 2004

Six-Month Net Income Up 16 Percent

Aug 2, 2005

The Andersons, Inc. , today announced second-quarter 2005 net income of $10.4 million, an improvement of $0.3 million from the second quarter of 2004 when the company earned $10.1 million. Earnings per diluted share for the period were $1.35, unchanged from 2004 results. Total revenues were $365 million for the second quarter this year compared to $375 million a year ago. The reduction in revenues was attributed to lower average grain prices. The company's second-quarter 2005 results included a favorable tax adjustment of $0.6 million attributed to Ohio tax reform legislation which was enacted on June 30th. For the first half of 2005, the company's net income was $11.4 million, or $1.48 per diluted share, on revenues of $624 million. Last year, The Andersons earned $9.8 million, or $1.31 per diluted share, in the first half, on revenues of $649 million.

The Agriculture Group's second-quarter operating income of $8.9 million was $2.0 million below the $10.9 million it earned in the same period last year. Revenues of $253 million for the second quarter this year were $14 million below last year primarily due to lower average corn and soybean prices. Average grain margins were relatively unchanged during the quarter, but space income declined and some grain inventory shrink and quality adjustments were incurred. The group's plant nutrient business achieved operating income growth in the second quarter in spite of significantly higher commodity prices compared to 2004. Tonnage shipments were relatively unchanged, but operating income per ton was higher, and the group's farm centers also improved. Through the first six months of 2005, the Agriculture Group had operating income of $9.9 million on revenues of $418 million. In the first half of last year, the group had revenues of $450 million and operating income of $9.4 million. The group expects to begin construction of a 55 million gallon-per-year ethanol production facility adjacent to its Albion, Michigan grain facility soon. While preliminary site work has begun, completion of the project is contingent upon several final items, including state and local economic incentives. The company is also exploring the construction of a 110 million gallon ethanol plant adjacent to its Clymers, Indiana grain facility. No decision has yet been made about construction on this site. The Company anticipates some level of outside investment on each of these projects. In July, a grain elevator located in Toledo, Ohio, which The Andersons operates, was severely damaged by an explosion and fire. The company indicated that the necessary repairs will extend into next year. As a result, 2005 income will be reduced, but this will be mostly offset next year when the insurance claim process is completed. Total income for the two years should not be impacted materially by the accident.

The Rail Group's operating income of $3.8 million in the second quarter this year was $1.7 million above the $2.1 million it earned in the same three- month period a year ago. Revenues of $17.7 million for the quarter were $4.6 million higher than the $13.1 generated in the second quarter 2004. The rail leasing business continued to achieve excellent revenue and operating income growth during the most recent three-month period. Car values and lease rates continued to be strong, and the utilization rate of the group's railcar fleet was again higher than year-earlier levels. The group's railcar repair shops and its steel fabrication business also achieved revenue and operating income growth in the second quarter. For the first half of 2005, the Rail Group had operating income of $7.4 million on revenues of $35.4 million. Last year the group reported first-half revenues of $24.2 million and operating income of $3.3 million. During the second quarter, the group purchased 2,000 railcars, increasing its total fleet to approximately 18,000 railcars. In July, the company announced the purchase of two product lines of fluid filtration equipment that will be manufactured and marketed by the group's steel fabrication business.

The Processing Group's operating income of $0.4 million in the second quarter of 2005 was $0.6 million lower than a year ago. Revenues of $40.5 million for the quarter were $0.5 million higher than the $40.0 million it registered in the second quarter of last year. Turf-care product volumes were lower this year, primarily with industrial accounts, and expenses in the cob products business increased. Through six months this year, the Processing Group had $81.4 million of revenues and $1.5 million of operating income. In the first half of 2004, the group's revenues were $85.3 million and operating income was $4.2 million. While reaffirming its commitment to the professional sector of the lawn products industry, the group is reassessing its strategic position in that industry's consumer and industrial sectors.

The Retail Group reported revenues of $54.4 million for the second quarter of 2005, a 0.2 percent decrease in same-store sales compared to the same three-month period in 2004. The average sale per customer and average gross margin both improved somewhat, and the group's operating income of $3.8 million for the period was $0.1 million better than its 2004 performance. Sales of lawn and garden products were strong this spring, recovering from the rather poor spring season experienced last year. The group's June year-to-date revenues were $89.5 million this year, 0.4 percent higher than last year. First half operating income this year was $1.7 million, $0.3 million above the $1.4 million of operating income it generated in 2004.

"The second quarter is always a very strong period for several of our seasonal businesses, and this year was no exception. Our net income of $10.4 million for the three-month period was a record," said President and Chief Executive Officer Mike Anderson. "Agriculture's plant nutrient business, Rail and Retail all achieved operating income growth during the second quarter of 2005, and these same businesses are also ahead of last year through six months. In total, the Company's earnings are seventeen cents a share ahead of last year, and the strong cash flow generated by our operating businesses continues to enable us to pursue promising new growth opportunities."

Anderson also stated "The corn and soybean crops in our region were definitely impacted by the hot and dry weather we experienced in June and early July. Recent rains have helped, but the proportion of Illinois crops rated "good" or "excellent" in weekly USDA surveys remains way below recent years' experience. Although we expect that our Agriculture Group's second half grain income will be closer to multi-year averages rather than last year's record performance, the strong results achieved by our plant nutrient, rail and retail businesses suggest that our previously-announced full-year earnings projection of $2.20 to 2.50 per share is still appropriate."

The company will host a webcast on Wednesday, August 3, 2005 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

The Andersons, Inc. is a diversified company with interests in the grain and plant nutrient sectors of U.S. agriculture, as well as in railcar marketing, industrial materials formulation, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company presently has operations in seven U.S. states 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 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

                             The Andersons, Inc.

                      Consolidated Statements of Income

                                      Three Months ended   Six Months ended
                                            June 30            June 30
  (in thousands, except for per
   share amounts)                       2005      2004      2005      2004

  Sales and merchandising revenues   $365,116  $374,510  $623,773  $648,846
  Cost of sales and merchandising
   revenues                           312,098   318,442   530,796   556,716
  Gross profit                         53,018    56,068    92,977    92,130

  Operating, administrative and
   general expenses                    35,855    38,135    72,756    72,879
  Interest expense                      3,191     2,738     6,141     5,404

  Other income, net                     1,430     1,117     2,509     1,908
  Equity in earnings of affiliates         14       160       460       322
  Income (loss) before income taxes    15,416    16,472    17,049    16,077
  Income taxes                          5,063     6,410     5,662     6,261
  Net Income (loss)                   $10,353   $10,062   $11,387    $9,816

  Per common share:
        Basic earnings (loss)           $1.40     $1.39     $1.54     $1.36
        Diluted earnings (loss)         $1.35     $1.35     $1.48     $1.31
        Dividends paid                 $0.080    $0.075    $0.160    $0.150

  Weighted average shares
   outstanding-basic                    7,399     7,235     7,386     7,227
  Weighted average shares
   outstanding-diluted                  7,688     7,472     7,670     7,475

                           The Andersons, Inc.

                       Consolidated Balance Sheets

                                           June 30    December 31  June 30
             (in thousands)                  2005        2004       2004

  Current assets:
    Cash and cash equivalents               $7,864      $8,439      $8,768
    Restricted cash                          1,435       1,532       1,777
    Accounts receivable (net) and
     margin deposits                        91,025      66,235      75,343
    Inventories                            182,405     251,428     152,865
    Other current assets                    16,177      30,659      20,987
  Total current assets                     298,906     358,293     259,740

  Other assets                              18,928      21,437      22,179
  Railcar assets leased to others (net)    134,450     101,358     103,214
  Property, plant and equipment (net)       91,678      92,510      94,360
                                          $543,962    $573,598    $479,493

  Liabilities and shareholders' equity
  Current liabilities:
    Short-term borrowings                  $69,900     $12,100     $15,000
    Other current liabilities              148,032     240,447     152,158
  Total current liabilities                217,932     252,547     167,158

  Deferred items and other long-term
   liabilities                              33,085      33,029      29,323
  Long-term debt non-recourse               59,333      64,343      74,216
  Long-term debt                            89,105      89,803      83,578
  Shareholders' equity                     144,507     133,876     125,218
                                          $543,962    $573,598    $479,493

                               Segment Data

                  Agriculture   Rail  Processing  Retail   Other   Total

       Quarter ended
       June 30, 2005

  Revenues from
   customers         $252,561   $17,673 $40,464  $54,418     $-   $365,116

  Gross Profit         22,937     8,589   4,823   16,669      -     53,018

  Other income /
   Equity in
   earnings of
   affiliates             429       356     139      245      275    1,444

  Operating income
   (loss)               8,914     3,799     412    3,843   (1,552)  15,416

       Quarter ended
       June 30, 2004

  Revenues from
   customers          266,819    13,133  40,031   54,527      -    374,510

  Gross Profit         27,189     6,865   5,506   16,508      -     56,068

  Other income /
   Equity in
   earnings of
   affiliates             767        56      88      254      112    1,277

  Operating income
   (loss)              10,940     2,050   1,018    3,706   (1,242)  16,472

       Six months ended
       June 30, 2005

  Revenues from
   customers          417,570    35,378  81,355   89,470      -    623,773

  Gross Profit         38,718    17,104  10,681   26,474      -     92,977

  Other income /
   Equity in
   earnings of
   affiliates           1,337       541     307      377      407    2,969

  Operating income
   (loss)               9,865     7,439   1,489    1,745   (3,489)  17,049

       Six months ended
       June 30, 2004

  Revenues from
   customers          450,298    24,213  85,257   89,078      -    648,846

  Gross Profit         40,907    11,934  13,365   25,924      -     92,130

  Other income /
   Equity in
   earnings of
   affiliates           1,297       153     139      410      231    2,230

  Operating income
   (loss)               9,411     3,341   4,230    1,389   (2,294)  16,077

SOURCE: The Andersons, Inc.

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

Plant Nutrient