The Andersons, Inc. (ANDE) 8-K Results of Operations and Financial Condition

NEWS RELEASE

Contact: Nicholas C. Conrad
VP, Finance & Treasurer Date:

August 4, 2010

Phone: 419-891-6415

E-mail: nick—conrad@andersonsinc.com

THE ANDERSONS, INC. REPORTS SECOND QUARTER RESULTS
Second Quarter Earnings of $1.36 per Diluted Share
The Grain & Ethanol and Plant Nutrient Groups Lead Earning Results

MAUMEE, OHIO, August 4, 2010—The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $25.2 million, or $1.36 per diluted share, on revenues of $811 million. In the same three month period of 2009, the company reported results of $15.9 million, or $0.87 per diluted share, on similar revenues. For the first six months of 2010, the company earned $37.4 million, or $2.02 per diluted share. In the first half of 2009, The Andersons reported results of $20.9 million, or $1.14 per diluted share. The first six months of both years had revenues of $1.5 billion. It is important to remember that revenues in commodity-based businesses do not serve as good predictors of income or economic performance.

The Grain & Ethanol Group’s operating income of $19.6 million in the second quarter was significantly higher than its year earlier result of $8.9 million. This was the result of both the grain and ethanol businesses achieving record second quarter results. The grain business benefited primarily from increased space income, which resulted primarily from sizeable basis gains. The ethanol business continued to benefit from a large portion of the ethanol sales being contracted during prior periods, when margins were at high levels. Second quarter 2010 income from the group’s investment in Lansing Trade Group was also higher than the prior year. Total second quarter revenues for the group were $474 million; this includes $195 million of grain and ethanol sales made by the Grain & Ethanol Group in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the second quarter of 2009, the group’s total revenues were $500 million and included $188 million of the aforementioned sales. The Grain & Ethanol Group’s operating income through the first six months was a record $40.3 million in 2010 and $14.7 million in 2009. Total revenues through June 2010 and 2009 were $995 million and $981 million, respectively. During the quarter, the company finalized the acquisition of the assets of O’Malley Grain, Inc.’s two grain cleaning and storage facilities in Mansfield, Ill and Fairmont, Neb.

The Plant Nutrient Group achieved operating income of $19.0 million during the second quarter of 2010, on revenues of $228 million. This is the second highest second quarter results in the group’s history. In the same three month period of 2009, the group had an operating income of $10.3 million on revenues of $198 million. Margins were up slightly from the prior year and tons sold increased by more than a third as the industry returned to more traditional nutrient application rates on phosphates and potassium. Retail farm centers were building and maintaining inventories versus the de-stocking that took place in 2009. The group’s first half 2010 operating income was $19.7 million on $332 million of revenues. Last year, its operating income through the first six months was $12.4 million on revenues of $309 million.

The Rail Group’s operating income was $0.1 million in the second quarter of 2010, whereas the group earned $0.6 million for the same three month period a year ago. Second quarter revenues were $24 million in both 2010 and 2009. Gross profit from the leasing business was significantly less primarily due to lower utilization rates and the corresponding carrying costs of idle assets. This quarter, the group recognized $1.7 million in gross margin from the scrapping and sale of railcars, whereas last year $0.8 million was recorded. The group has approximately 22,800 cars and locomotives, which is down slightly from the prior year. The average utilization rate (the percentage of the fleet in service) for the quarter was 71.0 percent compared to 80.6 percent for the same period last year. As of the end of June, utilization was 71.4 percent. The rail repair business showed improvement during the second quarter. The group’s first half operating income this year was $1.1 million on $50 million of revenues. In 2009, operating income through June was $1.5 million and revenues were $51 million. These results included gains on sales of railcars and related leases of $4.3 million and $1.1 million in 2010 and 2009, respectively. During the second quarter the Rail Group made a significant minority investment in a short-line railroad — the Iowa Northern Railway Company.

The Turf & Specialty Group had an operating income of $2.5 million in the second quarter this year on $41 million of revenues. Last year, the group reported a record $3.0 million of operating income on $40 million of revenues for the same period. Turf products tonnage increased slightly, but gross profit per ton decreased due to product mix. Through the first half of 2010, the group’s operating income was $5.2 million on $83 million of revenues. Last year, its operating income was a record $6.1 million through the first six months and revenues were $84 million.

The Retail Group had an operating income of $2.1 million during the second quarter of 2010 on revenues of $44 million. During the same period of the prior year, the group had an operating income of $2.9 million and total revenues were $49 million. Through the first six months, the group lost $0.7 million and total revenues were $74 million. Last year through June, the group earned $0.2 million on total revenues of $83 million.

“We are pleased with our second quarter performance,” CEO Mike Anderson stated. “The Grain & Ethanol Group led our results with record performance in both the grain and ethanol areas. Our Plant Nutrient Group also had a strong quarter. As I review these results, I am again reminded that our strategy of purposeful diversification allows us to remain a strong and profitable company even when one or more of our business units is under performing,” added Mr. Anderson.

The company will host a webcast on Thursday, August 5, 2010 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading “Investor” on its website atwww.andersonsinc.com.

The Andersons, Inc. is a diversified company with interests in the grain, ethanol and plant nutrient sectors of U.S. agriculture, as well as in railcar leasing and repair, turf products production, and general merchandise retailing. Founded in Maumee, Ohio, in 1947, the company now has operations across the United States, in Puerto Rico, and has 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 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 atwww.andersonsinc.com

FINANCIAL TABLES FOLLOW . . .

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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)	2010			2009		2010			2009
Sales and merchandising revenues	$	810,999		$	810,954	$	1,532,997		$	1,508,346
Cost of sales and merchandising revenues		723,445			737,620		1,386,893			1,373,638
Gross profit		87,554			73,334		146,104			134,708
Operating, administrative and general expenses		51,107			46,723		96,510			93,253
Interest expense		4,663			5,161		9,298			10,851
Other income (loss):
Equity in earnings (loss) of affiliates		6,667			784		16,572			(2,890	)
Other income, net		1,881			2,724		5,535			3,963
Income before income taxes		40,332			24,958		62,403			31,677
Income taxes		14,553			9,312		23,968			12,118
Net income		25,779			15,646		38,435			19,559
Net (income) loss attributable to the noncontrolling interest		(610	)		272		(1,001	)		1,311
Net income attributable to The Andersons, Inc.	$	25,169		$	15,918	$	37,434		$	20,870
Per common share:
Basic earnings	$	1.37		$	0.87	$	2.04		$	1.15
Diluted earnings	$	1.36		$	0.87	$	2.02		$	1.14
Dividends paid	$	0.0900		$	0.0875	$	0.1775		$	0.1725

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The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
	June 30		December 31		June 30
(in thousands)	2010		2009		2009
Assets
Current assets:
Cash and cash equivalents	$	204,317	$	145,929	$	179,752
Restricted cash		3,548		3,123		4,243
Accounts receivable, net		132,701		137,195		130,824
Margin deposits, net		7,384		27,012		38,009
Inventories		237,994		407,845		205,084
Commodity derivative assets — current		14,150		24,255		48,635
Other current assets		32,176		41,464		40,564
Total current assets		632,270		786,823		647,111
Investments and other assets		209,290		182,989		153,281
Commodity derivative assets		389		3,137		1,354
Railcar assets leased to others (net)		169,331		179,154		176,656
Property, plant and equipment (net)		144,165		132,288		120,535
	$	1,155,445	$	1,284,391	$	1,098,937
Liabilities and shareholders’ equity
Current liabilities:
Commodity derivative liabilities - current	$	54,918	$	24,871	$	66,698
Other current liabilities		278,051		454,250		243,056
Total current liabilities		332,969		479,121		309,754
Other noncurrent liabilities		95,268		90,138		85,772
Commodity derivative liabilities		2,911		830		4,555
Long-term debt		281,740		308,026		314,557
Shareholders’ equity		442,557		406,276		384,299
	$	1,155,445	$	1,284,391	$	1,098,937

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Segment Data
	Grain &					Plant		Turf &
	Ethanol			Rail		Nutrient		Specialty		Retail			Other			Total
Quarter ended June 30, 2010
Revenues from external customers	$	473,680		$	23,635	$	228,404	$	41,182	$	44,098		$	-		$	810,999
Gross Profit		30,073			4,351		31,563		8,032		13,535			—			87,554
Equity in earnings (loss) of affiliates		6,665			—		2		—		—			—			6,667
Other income (loss), net		624			499		302		377		157			(78	)		1,881
Income before income taxes		20,232			114		19,017		2,486		2,078			(3,595	)		40,332
(Income) loss attributable to the noncontrolling interest		(610	)		—		—		—		—			—			(610	)
Operating income (loss) (a)		19,622			114		19,017		2,486		2,078			(3,595	)		39,722
Quarter ended June 30, 2009
Revenues from external customers	$	500,401		$	23,762	$	197,638	$	39,752	$	49,401		$	—		$	810,954
Gross Profit		23,325			4,815		22,106		7,614		15,474			—			73,334
Equity in earnings of affiliates		781			—		3		—		—			—			784
Other income (loss), net		590			221		770		236		136			771			2,724
Income before income taxes		8,659			619		10,345		3,042		2,864			(571	)		24,958
(Income) loss attributable to the noncontrolling interest		272			—		—		—		—			—			272
Operating income (loss) (a)		8,931			619		10,345		3,042		2,864			(571	)		25,230
	Grain &					Plant		Turf &
	Ethanol			Rail		Nutrient		Specialty		Retail			Other			Total
Six months ended June 30, 2010
Revenues from external customers	$	994,569		$	50,325	$	331,562	$	82,815	$	73,726		$	-		$	1,532,997
Gross Profit		56,006			8,353		43,559		16,472		21,714			—			146,104
Equity in earnings (loss) of affiliates		16,568			—		4		—		—			—			16,572
Other income (loss), net		1,297			2,308		633		794		276			227			5,535
Income before income taxes		41,339			1,140		19,736		5,150		(749	)		(4,213	)		62,403
(Income) loss attributable to the noncontrolling interest		(1,001	)														(1,001	)
Operating income (loss)		40,338			1,140		19,736		5,150		(749	)		(4,213	)		61,402
Six months ended June 30, 2009
Revenues from external customers	$	980,922		$	50,532	$	309,400	$	84,455	$	83,037		$	—		$	1,508,346
Gross Profit		46,624			10,546		36,628		16,033		24,877			—			134,708
Equity in earnings (loss) of affiliates		(2,895	)		—		5		—		—			—			(2,890	)
Other income (loss), net		1,149			187		1,258		541		247			581			3,963
Income before income taxes		13,355			1,501		12,392		6,139		163			(1,873	)		31,677
(Income) loss attributable to the noncontrolling interest		1,311															1,311
Operating income (loss)		14,666			1,501		12,392		6,139		163			(1,873	)		32,988
(a) Operating income (loss) for each Group 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).

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