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

NEWS RELEASE

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

November 3, 2010

Phone: 419-891-6415

E-mail: nick—conrad@andersonsinc.com

THE ANDERSONS, INC. REPORTS THIRD QUARTER RESULTS
Earnings Of $ 0.08 Per Diluted Share
Earnings Of $2.09 Per Diluted Share Through September

MAUMEE, OHIO, November 3, 2010—The Andersons, Inc. (Nasdaq: ANDE)today announced third quarter net income attributable to the company of $1.4 million, or $0.08 per diluted share, on revenues of $707 million. In the third quarter of 2009, the company reported similar results of $1.3 million, or $0.07 per diluted share, on revenues of $601 million. For the first nine months of 2010, the company earned $38.8 million, or $2.09 per diluted share, on revenues of $2.2 billion. In the same period of 2009, The Andersons reported results of $22.1 million, or $1.20 per diluted share, on $2.1 billion of revenues.

The Grain & Ethanol Group’s operating income of $2.5 million in the third quarter was below its year earlier result of $8.9 million. The grain business benefited from increased gross profit on grain sales due to the early harvest; however, this was more than offset by a significant decrease in space income, due to basis losses. The ethanol LLC’s had a modest loss this quarter primarily because the company had previously, based on its view of the ethanol market at the time, contracted for ethanol sales at minimal margins. The ethanol results were also impacted by rising prices of certain inputs and higher than anticipated maintenance and repair costs. Third quarter 2010 income from the group’s investment in Lansing Trade Group was down slightly from the prior year. Total third quarter revenues for the Grain & Ethanol Group were $498 million; including $219 million of grain and ethanol sales made in accordance with origination and marketing agreements between the company and its ethanol joint ventures. In the third quarter of 2009, the group’s total revenues were $451 million and included $176 million of the previously mentioned sales. The Grain & Ethanol Group’s operating income through the first nine months was a record $42.8 million in 2010 and $23.5 million in 2009. This considerable year-to-date income differential was due to increased performance in all businesses – grain, ethanol, and Lansing Trade Group. Although space income in the grain business was down significantly during the third quarter, space income through September is up from the prior year. Total revenues through September 2010 and 2009 were $1.5 billion and $1.4 billion, respectively.

The Plant Nutrient Group earned an operating income of $1.5 million during the third quarter of 2010 on revenues of $129 million. In the same three month period of 2009, the group had an operating loss of $2.8 million on revenues of $70 million. Volume was up 60 percent due to re-stocking of the nutrient pipeline spurred by rising grain prices, an early harvest, and favorable application weather throughout the Midwest. Margins were also improved year over year, during the third quarter, due to price escalation. The group’s first nine months’ operating income this year was $21.2 million on $461 million of revenues. Last year, its operating income through the first nine months was $9.6 million on revenues of $380 million. This year to year improvement was due primarily to a significant increase in volume as spring and fall application rates of potassium and phosphate returned to more normal levels and to the re-stocking which occurred in the third quarter.

The Rail Group had an operating income of $0.1 million in the third quarter of 2010 on revenues of $22 million. The group lost $1.1 million and had revenues of $21 million during the same three month period a year ago. Gross profit from the leasing business was down for the quarter due primarily to lower utilization rates and the corresponding storage expense from idle assets. The average utilization rate for the quarter was 72.9 percent in comparison to 74.4 percent for the same period last year. Increased leasing activity late in the quarter caused the utilization as of September 30 to increase to 75.6 percent. The group has approximately 22,600 cars and locomotives, which is down from the prior year total of 24,000 units due to the selective scrapping of over 1,500 railcars this year. All other operations showed nice improvement this quarter. The short-line railroad in which the group invested last quarter showed solid performance. The group’s first nine months operating income this year was $1.2 million on $73 million of revenues. In 2009, operating income through September was $0.4 million and revenues were $72 million.

The Turf & Specialty Group reported an operating loss of $0.3 million in the third quarter for both this year and the prior year. A $1.3 million non-recurring gain was recognized in the prior year. Third quarter revenues for the group were $23 million, which is up $2 million from the prior year. Both turf products tonnage and gross profit per ton increased during the third quarter, in comparison to the prior year. Through the first nine months of 2010, the group’s operating income was $4.9 million on $106 million of revenues. Last year, its operating income was a record $5.8 million for the same period on similar revenues.

The Retail Group had an operating loss of $1.7 million in the third quarter of 2010 on revenues of $34 million. In the comparable period last year, the group’s operating loss was $2.3 million and total revenues were $37 million. Through nine months, the group recorded a loss of $2.4 million and total revenues of $108 million. Last year through September the group lost $2.1 million on total revenues of $120 million.

“We had mixed results this quarter,” said Chairman and Chief Executive Officer Mike Anderson. “We were pleased with the performance of the Plant Nutrient Group, which typically has little to no income during the third quarter. The increase in railcar lease renewals at the end of the quarter and the resulting increase in the utilization rate were encouraging to see. Conversely, our Grain & Ethanol Group’s results for the quarter were lower due primarily to the decreased performance of our ethanol business. Our grain business was impacted by a decline in wheat basis, which we expect to be regained through the balance of the wheat crop year. As it relates to our results through September, the Grain & Ethanol Group had record results of $42.8 million, and our Plant Nutrient Group is having their second best year, surpassed only by the unprecedented earnings seen in 2008.,” added Mr. Anderson.

The company will host a webcast on Thursday, November 4, 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						Nine Months ended
	September 30						September 30
(in thousands, except for per share amounts)	2010			2009			2010		2009
Sales and merchandising revenues	$	706,825		$	601,000		$	2,239,822	$	2,109,346
Cost of sales and merchandising revenues		653,716			549,990			2,040,609		1,923,628
Gross profit		53,109			51,010			199,213		185,718
Operating, administrative and general expenses		50,143			51,303			146,653		144,556
Interest expense		4,625			5,123			13,923		15,974
Other income (loss):
Equity in earnings (loss) of affiliates		(1,096	)		5,275			15,476		2,385
Other income, net		3,561			2,443			9,096		6,406
Income before income taxes		806			2,302			63,209		33,979
Income taxes		438			685			24,406		12,803
Net income		368			1,617			38,803		21,176
Net (income) loss attributable to the noncontrolling interest		1,026			(367	)		25		944
Net income attributable to The Andersons, Inc.	$	1,394		$	1,250		$	38,828	$	22,120
Per common share:
Basic earnings	$	0.08		$	0.07		$	2.11	$	1.21
Diluted earnings	$	0.08		$	0.07		$	2.09	$	1.20
Dividends paid	$	0.0900		$	0.0875		$	0.2675	$	0.2600

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The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
	September 30		December 31		September 30
(in thousands)	2010		2009		2009
Assets
Current assets:
Cash and cash equivalents	$	25,732	$	145,929	$	180,578
Restricted cash		2,915		3,123		3,612
Accounts receivable, net		143,591		137,195		101,279
Margin deposits, net		58,612		27,012		18,948
Inventories		432,448		407,845		190,818
Commodity derivative assets — current		118,488		24,255		26,608
Other current assets		48,653		41,464		51,412
Total current assets		830,439		786,823		573,255
Investments and other assets		205,363		182,989		169,710
Commodity derivative assets		9,851		3,137		2,065
Railcar assets leased to others (net)		169,694		179,154		181,830
Property, plant and equipment (net)		147,184		132,288		133,350
	$	1,362,531	$	1,284,391	$	1,060,210
Liabilities and shareholders’ equity
Current liabilities:
Short-term line of credit	$	101,400	$	—	$	—
Commodity derivative liabilities — current		47,968		24,871		59,033
Other current liabilities		407,917		454,250		214,950
Total current liabilities		557,285		479,121		273,983
Deferred items and other long-term liabilities		97,107		90,138		89,263
Commodity derivative liabilities		1,936		830		2,360
Long-term debt		264,349		308,026		307,427
Shareholders’ equity		441,854		406,276		387,177
	$	1,362,531	$	1,284,391	$	1,060,210

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Segment Data
	Grain &						Plant			Turf &
	Ethanol			Rail			Nutrient			Specialty			Retail			Other			Total
Quarter ended September 30, 2010
Revenues from external customers	$	498,245		$	22,314		$	129,109		$	23,156		$	34,001		$	-		$	706,825
Gross Profit		21,372			2,577			14,226			5,217			9,717			—			53,109
Equity in earnings (loss) of affiliates		(1,097	)		—			1			—			—			—			(1,096	)
Other income (loss), net		709			1,782			233			244			128			465			3,561
Income before income taxes		1,430			85			1,462			(291	)		(1,651	)		(229	)		806
Income attributable to the noncontrolling interest		1,026			—			—			—			—			—			1,026
Operating income (loss) (a)		2,456			85			1,462			(291	)		(1,651	)		(229	)		1,832
Quarter ended September 30, 2009
Revenues from external customers	$	450,762		$	21,156		$	70,446		$	21,451		$	37,185		$	—		$	601,000
Gross Profit		24,488			3,166			8,206			4,468			10,682			—			51,010
Equity in earnings (loss) of affiliates		5,271			—			1			—			—			3			5,275
Other income (loss), net		751			66			337			287			111			891			2,443
Income before income taxes		9,245			(1,064	)		(2,769	)		(314	)		(2,285	)		(511	)		2,302
Income attributable to the noncontrolling interest		(367	)		—			—			—			—			—			(367	)
Operating income (loss) (a)		8,878			(1,064	)		(2,769	)		(314	)		(2,285	)		(511	)		1,935
Nine months ended September 30, 2010
Revenues from external customers	$	1,492,814		$	72,639		$	460,671		$	105,971		$	107,727		$	-		$	2,239,822
Gross Profit		77,378			10,930			57,785			21,689			31,431			—			199,213
Equity in earnings (loss) of affiliates		15,471			—			5			—			—			—			15,476
Other income (loss), net		2,006			4,090			866			1,038			404			692			9,096
Income before income taxes		42,769			1,225			21,198			4,859			(2,400	)		(4,442	)		63,209
Income attributable to the noncontrolling interest		25			—			—			—			—			—			25
Operating income (loss) (a)		42,794			1,225			21,198			4,859			(2,400	)		(4,442	)		63,234
Nine months ended September 30, 2009
Revenues from external customers	$	1,431,684		$	71,688		$	379,846		$	105,906		$	120,222		$	—		$	2,109,346
Gross Profit		71,112			13,712			44,834			20,501			35,559			—			185,718
Equity in earnings (loss) of affiliates		2,376			—			6			—			—			3			2,385
Other income (loss), net		1,900			253			1,595			828			358			1,472			6,406
Income before income taxes		22,600			437			9,623			5,825			(2,122	)		(2,384	)		33,979
Income attributable to the noncontrolling interest		944			—			—			—			—			—			944
Operating income (loss) (a)		23,544			437			9,623			5,825			(2,122	)		(2,384	)		34,923
(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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