The Andersons, Inc. (ANDE) 8-K The Andersons, Inc. Reports Second Quarter Results

NEWS RELEASE

THE ANDERSONS, INC. REPORTS SECOND QUARTER RESULTS

Second Quarter Earnings of $1.56 per Diluted Share

Ethanol and Plant Nutrient Groups Lead Earning Results

MAUMEE, OHIO, AUGUST 6, 2014 The Andersons, Inc. (Nasdaq: ANDE) today announced financial results for the second quarter ended June 30, 2014.

Highlights

• Record operating income of $33.9 million for the Ethanol Group

• Second quarter diluted EPS up almost 50 percent from same period last year

• Plant Nutrient Group had operating income of $25.0 million

“We’re pleased with our first half performance for 2014, which is a record,” said CEO Mike Anderson. “Both our Ethanol and Plant Nutrient groups had strong results this quarter. In fact, our Ethanol Group had the best quarter in its history. In addition, our Grain Group’s operating income benefitted from improved space income in our grain operations, and the addition of income from the Thompsons Limited joint venture.”

All financial and operating highlights below are quarterly data compared to the same period of the prior year, unless otherwise noted.

Financial Highlights

Second quarter net income attributable to the company was $44.3 million, or $1.56 per diluted share, on revenues of $1.3 billion. In the same three month period of 2013, the company reported results of $29.5 million, or $1.05 per diluted share, on revenues of $1.6 billion.

• The Ethanol Group realized excellent margins at all plants. These margins were supported primarily by ongoing increases in export demand, lower corn prices, and excellent operating metrics. The Ethanol Group had record E-85 sales and an increase in distillers dried grains and corn oil sales.

• The Plant Nutrient Group exceeded its prior year six-month earnings performance.

• The Rail Group recognized $2.5 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions during the quarter, which is approximately $2.4 million less than the prior year.

Operating Highlights

The following highlights have impacted reported results, or may impact future results:

• Crop conditions in the majority of our territories are ideal. Continued good weather provides the potential for record corn and soybean yields.

• The Ethanol Group had record ethanol production.

• At this time, we have approximately 75 percent of the third quarter and 33 percent of the fourth quarter ethanol futures risk hedged. The majority of those hedges were placed in the first quarter, consistent with our strategy to lock-in reasonable forward returns when available in the market. Other hedges were added in the second quarter, consistent with our risk management strategy. We currently are managing margins in the spot market for the rest of our production.

• Volume for the Plant Nutrient Group was up approximately six percent during the first half of the year, regaining all of the first quarter volume reduction. Further, gross profit per ton increased slightly.

• At the end of June, the Rail Group’s utilization rate was 89.1 percent, up from 86.1 percent the prior year. Further, the utilization rate is expected to increase as the year progresses.

Conference Call

The company will host a webcast on Thursday, August 7, 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.

Forward Looking Statements

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.

Company Description

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. The Andersons, Inc. is located on the Internet at www.andersonsinc.com

Investor Relations Contact

Nick Conrad

Phone: 419-891-6415

E-mail: nick_conrad@andersonsinc.com

The Andersons, Inc.

Condensed Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
Sales and merchandising revenues	$	1,312,082	$	1,566,964	$	2,315,376	$	2,838,934
Cost of sales and merchandising revenues	1,190,587		1,463,735		2,117,106		2,656,432
Gross profit	121,495		103,229		198,270		182,502
Operating, administrative and general expenses	76,275		61,464		147,260		123,472
Interest expense	6,146		4,855		12,148		11,259
Other income:
Equity in earnings of affiliates, net	32,213		10,010		52,714		17,814
Other income, net	3,797		1,292		23,409		4,018
Income before income taxes	75,084		48,212		114,985		69,603
Income tax provision	25,714		17,480		39,586		26,559
Net income	49,370		30,732		75,399		43,044
Net income attributable to the noncontrolling interests	5,069		1,193		8,390		927
Net income attributable to The Andersons, Inc.	$	44,301	$	29,539	$	67,009	$	42,117
Per common share:
Basic earnings attributable to The Andersons, Inc. common shareholders	$	1.56	$	1.05	$	2.36	$	1.50
Diluted earnings attributable to The Andersons, Inc. common shareholders	$	1.56	$	1.05	$	2.36	$	1.49
Dividends paid	$	0.1100	$	0.1067	$	0.2200	$	0.2133

The Andersons, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)	June 30, 2014		December 31, 2013		June 30, 2013
Assets
Current assets:
Cash and cash equivalents	$	47,190	$	309,085	$	75,920
Restricted cash	895		408		872
Accounts receivable, net	189,646		173,930		216,432
Inventories	432,996		614,923		444,523
Commodity derivative assets - current	162,427		71,319		121,789
Deferred income taxes	7,443		4,931		2,797
Other current assets	24,596		47,188		44,936
Total current assets	865,193		1,221,784		907,269
Other assets:
Commodity derivative assets - noncurrent	312		246		87
Other assets, net	116,985		118,010		103,781
Pension asset	13,023		14,328		—
Equity method investments	264,381		291,109		195,241
	394,701		423,693		299,109
Railcar assets leased to others, net	242,147		240,621		242,887
Property, plant and equipment, net	390,587		387,458		371,716
Total assets	$	1,892,628	$	2,273,556	$	1,820,981
Liabilities and equity
Current liabilities:
Borrowings under short-term line of credit	$	27,000	$	—	$	50,000
Accounts payable for grain	164,230		592,183		178,017
Other accounts payable	143,535		154,599		183,971
Customer prepayments and deferred revenue	21,670		59,304		25,621
Commodity derivative liabilities – current	86,134		63,954		58,183
Accrued expenses and other current liabilities	81,260		70,295		57,456
Current maturities of long-term debt	89,387		51,998		45,096
Total current liabilities	613,216		992,333		598,344
Other long-term liabilities	15,032		15,386		15,634
Commodity derivative liabilities – noncurrent	7,444		6,644		5,863
Employee benefit plan obligations	39,178		39,477		50,754
Long-term debt, less current maturities	300,220		375,213		409,020
Deferred income taxes	126,258		120,082		87,486
Total liabilities	1,101,348		1,549,135		1,167,101
Total equity	791,280		724,421		653,880
Total liabilities and equity	$	1,892,628	$	2,273,556	$	1,820,981

The Andersons, Inc.

Segment Data

(in thousands)	Grain			Ethanol		Plant Nutrient		Rail		Turf & Specialty		Retail			Other			Total
Three months ended June 30, 2014
Revenues from external customers	$	656,004		$	226,388	$	311,895	$	33,409	$	42,913	$	41,473		$	—		$	1,312,082
Gross profit	27,909			18,638		40,733		13,863		7,805		12,547			—			121,495
Equity in earnings of affiliates	8,467			23,746		—		—		—		—			—			32,213
Other income, net	975			356		391		787		467		190			631			3,797
Income (loss) before income taxes	10,352			38,976		25,004		6,684		1,998		1,637			(9,567		)	75,084
Income (loss) attributable to the noncontrolling interests	(3		)	5,072		—		—		—		—			—			5,069
Operating income (loss) (a)	$	10,355		$	33,904	$	25,004	$	6,684	$	1,998	$	1,637		$	(9,567	)	$	70,015
Three months ended June 30, 2013
Revenues from external customers	$	891,350		$	222,240	$	330,339	$	38,601	$	43,144	$	41,290		$	—		$	1,566,964
Gross profit	22,092			9,649		37,201		14,557		7,321		12,409			—			103,229
Equity in earnings of affiliates	5,027			4,983		—		—		—		—			—			10,010
Other income (expense), net	(349		)	199		164		702		175		100			301			1,292
Income (loss) before income taxes	2,053			11,794		23,240		9,680		2,195		1,539			(2,289		)	48,212
Income attributable to the noncontrolling interest	—			1,193		—		—		—		—			—			1,193
Operating income (loss) (a)	$	2,053		$	10,601	$	23,240	$	9,680	$	2,195	$	1,539		$	(2,289	)	$	47,019
	Grain			Ethanol		Plant Nutrient		Rail		Turf & Specialty		Retail			Other			Total
Six months ended June 30, 2014
Revenues from external customers	$	1,239,163		$	415,208	$	419,525	$	85,711	$	86,638	$	69,131		$	—		$	2,315,376
Gross profit	44,917			26,003		54,808		35,728		16,280		20,534			—			198,270
Equity in earnings of affiliates	10,351			42,363		—		—		—		—			—			52,714
Other income, net	19,321			130		576		1,497		774		302			809			23,409
Income (loss) before income taxes	21,655			62,124		23,593		21,729		3,373		(698		)	(16,791		)	114,985
Income (loss) attributable to the noncontrolling interests	(6		)	8,396		—		—		—		—			—			8,390
Operating income (loss) (a)	$	21,661		$	53,728	$	23,593	$	21,729	$	3,373	$	(698	)	$	(16,791	)	$	106,595

Six months ended June 30, 2013
Revenues from external customers	$	1,727,845	$	421,549	$	442,241	$	84,965	$	90,331	$	72,003		$	—		$	2,838,934
Gross profit	46,942		14,454		51,150		33,536		16,339		20,081			—			182,502
Equity in earnings of affiliates	12,937		4,877		—		—		—		—			—			17,814
Other income, net	222		430		139		1,648		450		214			915			4,018
Income (loss) before income taxes	10,352		14,007		22,678		24,254		6,196		(1,630		)	(6,254		)	69,603
Income attributable to the noncontrolling interest	—		927		—		—		—		—			—			927
Operating income (loss) (a)	$	10,352	$	13,080	$	22,678	$	24,254	$	6,196	$	(1,630	)	$	(6,254	)	$	68,676

(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 (loss).