The Andersons, Inc. (ANDE) 8-K The Andersons, Inc. Reports Fourth Quarter & Full Year Results

NEWS RELEASE

Investor Relations Contact: Date:February 11, 2014

Nick Conrad

Phone: 419-891-6415

E-mail: nick_conrad@andersonsinc.com

THE ANDERSONS, INC. REPORTS FOURTH QUARTER & FULL YEAR RESULTS

Full Year Earnings of $3.18 per Diluted Share

Ethanol Group results lead to Record Fourth Quarter Earnings of $1.08 per Diluted Share

MAUMEE, OHIO, February 11, 2014-The Andersons, Inc. (Nasdaq: ANDE) today announced net income attributable to the company of $89.9 million, or $3.18 per diluted share, on $5.6 billion in revenues. It should be noted that all prior period per share data in this release has been adjusted to reflect the company’s February, 2014 three-for-two stock split. Last year earnings were $79.5 million, or $2.82 per diluted share on revenues of $5.3 billion. The company earned $30.7 million in the fourth quarter of 2013, or $1.08 per diluted share, on revenues of $1.6 billion. In the same three month period of 2012, the company reported net income of $15.0 million, or $0.53 per diluted share, on revenues of $1.7 billion.

The Ethanol Group had record operating income of $50.6 million in 2013, compared to a loss of $3.7 million in the prior year. The significant increase in operating income was primarily due to higher ethanol margins, which were impacted by solid ethanol export demand, and lower corn costs. The ethanol plants also benefitted from improved production rates and increased co-product sales of corn oil, E-85, and distillers dried grains. Total 2013 revenues were $832 million, up from $743 million in 2012. The revenue increase was due to both a full year of production at the Denison Iowa plant and an increase in the average price of ethanol. The group’s fourth quarter results were a record not only for the fourth quarter, but for any quarter. The operating income was $26.6 million on revenues of $197 million. During the same three month period of 2012, a loss of $0.8 million was incurred on revenues of $215 million.

The Grain Group’s 2013 operating income was $46.8 million, compared to $63.6 million in the prior year. The group had considerably lower space income in 2013, as a result of the drought, but increased gross profit on sales, primarily due to growth. Lansing Trade Group contributed significantly to the Grain Group’s result. Total revenues for the Grain Group were $3.6 billion and $3.3 billion in 2013 and 2012, respectively. Revenues increased due to greater sales volume, as average grain prices actually declined. For the fourth quarter, the group’s operating income was $22.1 million on revenues of $1.1 billion. In the same three month period of 2012, the group had operating income of $18.1 million on revenues of $1.2 billion. Both space income and gross profit on sales in the fourth quarter were higher than the prior year.

The Rail Group achieved operating income of $42.8 million both this year and last year. Gross profit from the leasing business was significantly higher than the prior year due to higher lease and utilization rates. The full year utilization rate increased 1.5% in 2013 to 86.1%, and utilization ended the year at 88.3%. The group recognized $19.4 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions. In 2012, the company recognized gains of $23.7 million on similar transactions. Revenues of $165 million for 2013 were higher than the $156 million reported in the prior year. The Rail Group had operating income of $6.2 million in the fourth quarter on revenues of $32 million. In 2012, operating income for the same three month period was $8.6 million on revenues of $29 million. The prior year fourth quarter results included a $2.8 million lease settlement.

The Plant Nutrient Group finished the year with operating income of $27.3 million on revenues of $709 million. In 2012 the group’s operating income was $39.3 million and revenues were $797 million. Margins and volume in 2013 were lower than the prior year due to flat to declining markets, but were still solid. For the fourth quarter, the group’s operating income was $6.2 million on $171 million of revenues as many nutrient prices reset and they experienced a good fall season. Last year the group had operating income of $4.7 million during the same three month period on revenues of $178 million.

The Turf & Specialty Group’s full year operating income was a record $4.7 million on revenues of $141 million. In 2012, the group had operating income of $2.2 million, and total revenues were $131 million. The group incurred an operating loss of $1.4 million in the fourth quarter on revenues of $23 million. Last year, the same period had an operating loss of $1.2 million on revenues of $21 million. During the quarter, the group acquired the assets of the Cycle Group, Inc., a production facility in North Carolina that expanded the group’s presence in the granular business.

The Retail Group had an operating loss of $7.5 million in 2013, which included $4.7 million in one-time costs. In the prior year, the group’s operating loss was $4.0 million, which included $1.1 million in one-time expenses. Excluding one-time items, the group’s operating results were consistent with the prior year. The Retail Group’s fourth quarter operating income was a loss of $3.9 million, which included a $3.9 million asset impairment for two stores.

“I am proud of our 2013 results and the team we have here at The Andersons,” CEO Mike Anderson stated. “The Ethanol Group had exceptional results; they worked to simultaneously optimize margins, yields, production rates and co-product sales. Quite simply, the Ethanol Group hit the ball out of the park. The Rail Group nearly matched its record income from last year, even with a $4.3 million decrease in gains on railcar sales. Despite the unfavorable impacts of the 2012 drought, the Grain Group had good results, in part due to the strong earnings of Lansing Trade Group. The Plant Nutrient Group also had good results, as they managed through the nutrient price reset well. Lastly our Turf & Specialty Group had a record year as they continued to focus on their proprietary product strategy,” Mr. Anderson added. “In the last year we have demonstrated our continuing commitment to growth. We acquired Thompsons Limited through a 50/50 joint venture with Lansing Trade Group, which expanded our territory into Canada. We also expanded our railcar repair business through both the acquisition of Mile Rail and the opening of the Maumee paint facility. Lastly, as mentioned earlier, we acquired the assets of the Cycle Group at the end of 2013.”

The company will host a webcast on Wednesday, February 12, 2014 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading “Investor” on its website at www.andersonsinc.com.

The Andersons, Inc. is a diversified company rooted in agriculture. Founded in Maumee, Ohio, in 1947, the company conducts business across North America in the grain, ethanol, and plant nutrient sectors, railcar leasing, turf and cob products, and consumer retailing.

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 the financial information and 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

FINANCIAL TABLES FOLLOW . . .

The Andersons, Inc.

Consolidated Statements of Income (unaudited)

	Year ended December 31,
(in thousands, except per share data)	2013		2012			2011
Sales and merchandising revenues	$	5,604,574	$	5,272,010		$	4,576,331
Cost of sales and merchandising revenues	5,239,349		4,914,005			4,223,479
Gross profit	365,225		358,005			352,852
Operating, administrative and general expenses	278,433		246,929			229,090
Interest expense	20,860		22,155			25,256
Other income:
Equity in earnings of affiliates	68,705		16,487			41,450
Other income, net	14,876		14,725			7,922
Income before income taxes	149,513		120,133			147,878
Income tax provision	53,811		44,568			51,053
Net income	95,702		75,565			96,825
Net income (loss) attributable to the noncontrolling interests	5,763		(3,915		)	1,719
Net income attributable to The Andersons, Inc.	$	89,939	$	79,480		$	95,106
Per common share:
Basic earnings attributable to The Andersons, Inc. common shareholders	$	3.20	$	2.85		$	3.42
Diluted earnings attributable to The Andersons, Inc. common shareholders	$	3.18	$	2.82		$	3.39
Dividends paid	$	0.43	$	0.40		$	0.29

The Andersons, Inc.

Consolidated Balance Sheets (unaudited)

(in thousands)	December 31, 2013		December 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	309,085	$	138,218
Restricted cash	408		398
Accounts receivable, net	173,930		208,877
Inventories	614,923		776,677
Commodity derivative assets - current	71,319		103,105
Deferred income taxes	4,931		15,862
Other current assets	47,188		54,016
Total current assets	1,221,784		1,297,153
Other assets:
Commodity derivative assets - noncurrent	246		1,906
Other assets, net	118,010		105,129
Pension assets	14,328		—
Equity method investments	291,109		190,908
	423,693		297,943
Railcar assets leased to others, net	240,621		228,330
Property, plant and equipment, net	387,458		358,878
Total assets	$	2,273,556	$	2,182,304
Liabilities and equity
Current liabilities:
Borrowings under short-term line of credit	$	—	$	24,219
Accounts payable for grain	592,183		582,653
Other accounts payable	154,599		165,201
Customer prepayments and deferred revenue	59,304		105,410
Commodity derivative liabilities – current	63,954		33,277
Accrued expenses and other current liabilities	70,295		66,902
Current maturities of long-term debt	51,998		15,145
Total current liabilities	992,333		992,807
Other long-term liabilities	15,386		18,406
Commodity derivative liabilities – noncurrent	6,644		1,134
Employee benefit plan obligations	39,477		53,131
Long-term debt, less current maturities	375,213		427,243
Deferred income taxes	120,082		78,138
Total liabilities	1,549,135		1,570,859
Total equity	724,421		611,445
Total liabilities and equity	$	2,273,556	$	2,182,304

The Andersons, Inc.

Segment Data

	Grain			Ethanol			Plant Nutrient		Rail		Turf & Specialty			Retail			Other			Total
Three months ended December 31, 2013
Revenues from external customers	$	1,124,265		$	197,032		$	170,732	$	32,306	$	22,557		$	37,374		$	—		$	1,584,266
Gross profit	44,570			13,323			21,979		12,328		6,542			10,835			—			109,577
Equity in earnings of affiliates	8,182			20,532			—		—		—			—			—			28,714
Other income (expense), net	682			(66		)	634		987		105			185			726			3,253
Income (loss) before income taxes	22,127			30,577			6,240		6,171		(1,369		)	(3,861		)	(8,362		)	51,523
Income (loss) attributable to the noncontrolling interests	(3		)	3,961			—		—		—			—			—			3,958
Operating income (loss) (a)	$	22,130		$	26,616		$	6,240	$	6,171	$	(1,369	)	$	(3,861	)	$	(8,362	)	$	47,565
Three months ended December 31, 2012
Revenues from external customers	$	1,197,376		$	214,867		$	177,732	$	28,818	$	20,545		$	41,303		$	—		$	1,680,641
Gross profit	36,973			6,129			19,980		9,709		6,241			12,137			—			91,169
Equity in earnings (loss) of affiliates	6,374			(5,293		)	—		—		—			—			—			1,081
Other income, net	706			16			266		3,841		113			158			216			5,316
Income (loss) before income taxes	18,078			(1,615		)	4,714		8,553		(1,168		)	(861		)	(5,688		)	22,013
Loss attributable to the noncontrolling interest	—			(815		)	—		—		—			—			—			(815		)
Operating income (loss) (a)	$	18,078		$	(800	)	$	4,714	$	8,553	$	(1,168	)	$	(861	)	$	(5,688	)	$	22,828
Twelve months ended December 31, 2013
Revenues from external customers	$	3,617,943		$	831,965		$	708,654	$	164,794	$	140,512		$	140,706		$	—		$	5,604,574
Gross profit	118,517			32,512			86,682		58,864		29,289			39,361			—			365,225
Equity in earnings of affiliates	33,122			35,583			—		—		—			—			—			68,705
Other income, net	2,120			399			1,093		7,666		690			501			2,407			14,876
Income (loss) before income taxes	46,794			56,374			27,275		42,785		4,744			(7,534		)	(20,925		)	149,513
Income (loss) attributable to the noncontrolling interests	(11		)	5,774			—		—		—			—			—			5,763
Operating income (loss) (a)	$	46,805		$	50,600		$	27,275	$	42,785	$	4,744		$	(7,534	)	$	(20,925	)	$	143,750

Twelve months ended December 31, 2012
Revenues from external customers	$	3,293,632	$	742,929		$	797,033	$	156,426	$	131,026	$	150,964		$	—		$	5,272,010
Gross profit	117,180		14,673			98,252		56,729		27,026		44,145			—			358,005
Equity in earnings (loss) of affiliates	29,080		(12,598		)	5		—		—		—			—			16,487
Other income, net	2,548		53			1,917		7,136		784		554			1,733			14,725
Income (loss) before income taxes	63,597		(7,635		)	39,254		42,841		2,216		(3,951		)	(16,189		)	120,133
Loss attributable to the noncontrolling interest	—		(3,915		)	—		—		—		—			—			(3,915		)
Operating income (loss) (a)	$	63,597	$	(3,720	)	$	39,254	$	42,841	$	2,216	$	(3,951	)	$	(16,189	)	$	124,048

(a) Operating income (loss) for each operating segment is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income.