Press Releases

The Andersons, Inc. Reports 3rd Quarter Results; $0.6 Million Loss vs. $1.0 Million Income in Same Period Last Year
Company Reaffirms EPS Guidance of $2.20 to $2.50 For 2005
PRNewswire-FirstCall
MAUMEE, Ohio

The Andersons, Inc. , today announced a net loss of $0.6 million for the third quarter. In the same three-month period last year, the company reported a net income of $1.0 million. Earnings per diluted share for the third quarter this year were a loss of nine cents. In 2004, the company earned fourteen cents per diluted share during the third quarter. Total revenues were $289 million for the third quarter this year, 16 percent above its third-quarter 2004 total of $248 million. For the first nine months of 2005, the company's net income was $10.8 million, or $1.40 per diluted share, on revenues of $912 million. Last year, The Andersons earned $10.9 million, or $1.45 per diluted share, in the first nine months, on revenues of $897 million.

The Agriculture Group incurred an operating loss of $3.3 million in the third quarter. Last year it reported an operating income of $0.3 million for the period. Revenues of $206 million for the third quarter this year were $39 million above last year primarily due to increased grain sales volume. Average grain margins were lower during the quarter, and some grain inventory and quality adjustments were incurred. The group's plant nutrient business matched its 2004 results for the third quarter. Nutrient sales volume was down slightly, and commodity prices were significantly higher than they were in 2004, but margins remained strong, and application acreage growth improved service revenues. Through the first three quarters of 2005, the Agriculture Group had operating income of $6.6 million on revenues of $623 million. In the first nine months of last year, the group had revenues of $617 million and operating income of $9.7 million. The company is a 44 percent equity investor in The Andersons Albion Ethanol LLC which began construction of a 55 million gallon-per-year ethanol production facility during the third quarter. The new plant will be situated next to The Andersons' Albion, Michigan grain elevator. The company is also exploring the construction of a 110 million gallon ethanol plant adjacent to its Clymers, Indiana grain facility and anticipates some level of outside investment in this project as well. In July, a grain elevator located in Toledo, Ohio, which The Andersons operates, was severely damaged by an explosion and fire. Although negatively impacting its current year income, the company believes that the accident will not have a material impact on the two-year (2005-06) total once the insurance claim process is completed sometime next year.

The Rail Group's operating income of $5.8 million in the third quarter this year was $0.9 million above the $4.9 million it earned in the same three- month period a year ago. Revenues of $23.2 million for the quarter were $3.8 million higher than the $19.4 generated in the third quarter of 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 third quarter operating results included income from the sale of some railcars, although this was less than the income it realized on a larger sale of railcars during the third quarter of last year. The group's railcar repair shops' revenues and operating income for the period were down slightly from a year ago, but the steel fabrication business, including the fluid filtration product lines that the group acquired during the quarter, contributed to the overall revenue and income growth. Through nine months, the Rail Group had operating income of $13.3 million on revenues of $58.6 million and had added more than 3,000 railcars to its fleet, increasing its total to approximately 18,000 railcars. Last year the group reported September year-to-date revenues of $43.6 million and operating income of $8.2 million.

The Processing Group's $3.0 million operating loss in the third quarter was $1.1 million higher than the $1.9 million operating loss it incurred a year ago. Revenues of $19.2 million for the quarter were $1.6 million below the $20.8 million it registered in the third quarter of last year. Turf-care product volumes were lower this year, primarily with industrial accounts, and cob product gross margins declined due to increased raw material costs. Cob operating expenses were also higher in the third quarter this year. Through nine months, the Processing Group had $100.6 million of revenues and an operating loss of $1.6 million. In the first three quarters of 2004, the group reported revenues of $106.1 million and operating income of $2.4 million. Recently, the group announced a restructuring of its turf products business to focus on the professional market and certain areas of the consumer and industrial markets.

The Retail Group reported revenues of $40.5 million for the most recent quarter, a 1.4 percent decrease in same-store sales from the third quarter of 2004. The group's third-quarter operating loss was $0.8 million this year, $0.6 million wider than last year's result. While sales in food categories were higher than last year, and their margins remained strong, sales in other product categories were down. Operating expenses were somewhat higher during the quarter in part due to increased health-care and other employee benefit costs. The group's September year-to-date revenues were $130 million this year, just slightly lower than last year. Operating income for the first nine months of 2005 was $0.9 million, about $0.3 million below the $1.2 million it generated in the first three quarters of 2004.

"Our Rail Group and Agriculture's plant nutrient business are achieving excellent income growth this year," said President and Chief Executive Officer Mike Anderson. "In spite of the impact of insurance deductibles and business interruptions in our grain and cob operations this quarter, and severance costs we incurred in the restructuring of our lawn business, our overall performance in the third quarter leaves us right on track toward achieving the $2.20 to $2.50 earnings per share for the year that we've been projecting throughout the year. More importantly, we're encouraged by our ability to continue to grow our very profitable Rail business and to expand into the promising ethanol industry."

The company will host a webcast on Thursday, November 3, 2005 at 11:00 A.M. EST, to discuss its third quarter performance and full-year outlook. This can be accessed under the heading "Financial Information" on its website at www.andersonsinc.com.

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 products 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 www.andersonsinc.com



                           The Andersons, Inc.

                    Consolidated Statements of Income

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

  Sales and merchandising revenues   $288,708  $248,124  $912,481  $896,970
  Cost of sales and merchandising
   revenues                           252,162   207,384   782,958   764,100
  Gross profit                         36,546    40,740   129,523   132,870

  Operating, administrative and
   general expenses                    36,654    38,801   109,410   111,680
  Interest expense                      2,830     2,470     8,971     7,874

  Other income, net                     1,056     1,251     3,565     3,159
  Equity in earnings of affiliates        877       641     1,337       963
  Income (loss) before income taxes    (1,005)    1,361    16,044    17,438
  Income taxes                           (369)      313     5,293     6,574
  Net Income (loss)                     $(636)   $1,048   $10,751   $10,864

  Per common share:
        Basic earnings (loss)          $(0.09)    $0.14     $1.45     $1.50
        Diluted earnings (loss)        $(0.09)    $0.14     $1.40     $1.45
        Dividends paid                 $0.085    $0.075    $0.245    $0.225

  Weighted average shares
   outstanding-basic                    7,445     7,240     7,406     7,231
  Weighted average shares
   outstanding-diluted                  7,445     7,473     7,691     7,474



                           The Andersons, Inc.

                       Consolidated Balance Sheets
                               (Unaudited)

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

  Assets
  Current assets:
    Cash and cash equivalents               $9,592      $8,439      $8,138
    Restricted cash                          1,367       1,532       1,730
    Accounts receivable (net) and
     margin deposits                        78,845      66,235      63,520
    Inventories                            184,247     251,428     204,485
    Other current assets                    28,537      30,659      21,404
  Total current assets                     302,588     358,293     299,277

  Other assets                              33,732      21,437      21,472
  Railcar assets leased to others (net)    112,882     101,358     100,259
  Property, plant and equipment (net)       92,098      92,510      93,933
                                          $541,300    $573,598    $514,941

  Liabilities and shareholders' equity
  Current liabilities:
    Short-term borrowings                  $42,900     $12,100     $10,600
    Other current liabilities              174,473     240,447     191,046
  Total current liabilities                217,373     252,547     201,646

  Deferred items and other long-term
   liabilities                              33,979      33,029      31,717
  Long-term debt non-recourse               59,164      64,343      67,121
  Long-term debt                            87,128      89,803      88,877
  Shareholders' equity                     143,656     133,876     125,580
                                          $541,300    $573,598    $514,941



                     Segment Data

                     Agriculture  Rail  Processing  Retail   Other    Total
     Quarter ended
      September 30, 2005

  Revenues from
   external customers $205,814   $23,176  $19,227  $40,491     $-  $288,708
  Gross Profit          10,659    11,232    3,398   11,257      -    36,546
  Other income / Equity
   in earnings of
   affiliates            1,339        (5)     238      140    221     1,933
  Operating income
   (loss)               (3,312)    5,841   (3,047)    (827)   340    (1,005)

     Quarter ended
      September 30, 2004

  Revenues from
   external customers  166,837    19,385   20,819   41,083      -   248,124
  Gross Profit          15,448     9,464    4,162   11,666      -    40,740
  Other income / Equity
   in earnings of
   affiliates            1,114       183     314       131     150    1,892
  Operating income
   (loss)                  269     4,866  (1,859)     (232) (1,683)   1,361

     Nine months ended
      September 30, 2005

  Revenues from external
   customers           623,384    58,554 100,582   129,961       -  912,481
  Gross Profit          49,377    28,336  14,079    37,731       -  129,523
  Other income / Equity
   in earnings of
   affiliates            2,676       536     545       517     628    4,902
  Operating income
   (loss)                6,553    13,280  (1,558)      918  (3,149)  16,044

     Nine months ended
      September 30, 2004

  Revenues from
  external customers   617,135    43,598 106,076   130,161       -  896,970
  Gross Profit          56,355    21,398  17,527    37,590       -  132,870
  Other income / Equity
   in earnings of
   affiliates            2,411       336     453       541     381    4,122
  Operating income
   (loss)                9,680     8,207   2,371     1,157  (3,977)  17,438

SOURCE: The Andersons, Inc.

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