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

NEWS RELEASE

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

August 3, 2011

Phone: 419-891-6415

E-mail: nick—conrad@andersonsinc.com

THE ANDERSONS, INC. REPORTS SECOND QUARTER RESULTS
Second Quarter Earnings of $2.42 per Diluted Share
The Grain & Ethanol and Plant Nutrient Groups Lead Earning Results

MAUMEE, OHIO, August 3, 2011—The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $45.2 million, or $2.42 per diluted share, on revenues of $1.3 billion. In the same three month period of 2010, the company reported results of $25.2 million, or $1.36 per diluted share, on revenues of $811 million. During the first six months of 2011, the company earned a record $62.5 million, or $3.34 per diluted share. In the first half of 2010, The Andersons reported results of $37.4 million, or $2.02 per diluted share. The revenue for the first six months of 2011 and 2010 were $2.3 billion and $1.5 billion, respectively. It is important to remember that revenues in commodity-based businesses do not serve as good predictors of income or economic performance.

The Grain Division led the company’s second quarter income with its record results. The Plant Nutrient Group also had highly favorable results. Higher than usual space income in the grain markets, particularly wheat, along with favorable fundamentals in other areas of the agricultural sector impacted the second quarter results.

The Grain & Ethanol Group reported record second quarter operating income of $45.3 million, which was more than double its year earlier result of $19.6 million. The group had record operating income through June of $64.0 million this year, in comparison to first half 2010 operating income of $40.3 million.

The Grain Division reported record operating income of $36.5 million in the second quarter of 2011 and $13.4 million for the same period last year. The division benefited from continued strong space income as a result of significant basis gains that were realized earlier in the year than is typical, and good second quarter earnings from its investment in Lansing Trade Group. Revenues for the Grain Division were $797 million and $361 million for the second quarter of 2011 and 2010, respectively. Revenues increased significantly due primarily to higher grain prices. The Grain Division’s operating income for the first six months of the year was $51.6 million on revenues of $1.4 billion. Last year, its first half operating income was $25.6 million on revenues of $763 million.

The Ethanol Division earned an operating income of $8.8 million in the second quarter. This compares to $6.2 million earned during the same period of the prior year. The higher income is the result of an increase in the company’s earnings from its investments in its three ethanol limited liability company affiliates. Total revenues for the quarter were $165 million. In comparison, the division’s revenues for the same period last year were $113 million. Revenues increased primarily due to higher ethanol prices. The Ethanol Division’s operating income through June was $12.4 million on revenues of $297 million. In the prior year, its first half operating income was $14.8 million on revenues of $232 million.

The Plant Nutrient Group achieved operating income of $24.1 million during the second quarter of 2011, on revenues of $260 million. In the same three month period of 2010, the group had an operating income of $19.0 million on revenues of $228 million. This improved performance was due primarily to an increase in margin, as volume declined year over year. Margins were strong primarily as a result of nutrient price appreciation attributable to strong world demand and to a lesser extent due to a favorable product mix that included more value added products. The group’s first half 2011 operating income was $29.2 million on $383 million of revenues. Last year, the operating income through the first six months was $19.7 million on revenues of $332 million. Increased revenues this year are due to higher selling prices.

The Rail Group had an operating income of $2.8 million in the second quarter on revenues of $30 million. In the same three month period of 2010, the group earned $0.1 million and revenues were $24 million. This quarter, the group recognized $2.3 million in gains on sales of railcars and related leases, whereas last year a gain of $1.7 million was recorded. Gross profit from the leasing business was also higher. The average utilization rate for the quarter was 85 percent in comparison to 71 percent for the same period last year. The group’s first half operating income this year was $6.3 million on $58 million of revenues. In 2010, operating income through June was $1.1 million and revenues were $50 million. These results included gains on sales of railcars and related leases of $7.1 million and $4.3 million in 2011 and 2010, respectively.

The Turf & Specialty Group had an operating income of $1.8 million in the second quarter this year on $42 million of revenues. Last year, the group reported operating income of $2.5 million on $41 million of revenues for the same period. Turf products tonnage decreased slightly, and gross profit per ton declined due to higher input costs. Through the first half of 2011, the group’s operating income was $5.1 million, which is similar to the prior year’s result. The group’s revenues for 2011 and 2010 through June were $89 million and $83 million, respectively.

The Retail Group had an operating income of $1.9 million during the second quarter of 2011 on revenues of $45 million. During the same period of the prior year, the group had an operating income of $2.1 million and revenues were $44 million. Through the first six months, the group lost $0.8 million and revenues were $77 million. Last year through June, the group lost $0.7 million on revenues of $74 million.

“We are pleased to be able to report record year to date earnings. While we have always mentioned that our second and fourth quarters are strong for us, these second quarter results were unusually strong due to the significant and accelerated grain basis income,” CEO Mike Anderson stated. “The investments made in our agricultural businesses over the last several years are benefitting from a positive agricultural environment. I am particularly proud of the Grain Division’s record results this year as well as PNG’s strong second quarter results in the face of a delayed spring planting season. It is also worth noting that the environment in the Rail industry has improved and we believe the worst is behind us,” added Mr. Anderson.

The company will host a webcast on Thursday, August 4, 2011 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, and general merchandise retail. 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 . . .

1

The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
	Three months ended						Six months ended
	June 30						June 30
(in thousands, except per share data)	2011			2010			2011			2010
Sales and merchandising revenues	$	1,338,167		$	810,999		$	2,339,841		$	1,532,997
Cost of sales and merchandising revenues		1,215,395			723,445			2,138,384			1,386,893
Gross profit		122,772			87,554			201,457			146,104
Operating, administrative and general expenses		57,730			51,107			111,437			96,510
Interest expense		7,562			4,663			14,898			9,298
Other income:
Equity in earnings of affiliates		12,512			6,667			19,758			16,572
Other income, net		2,018			1,881			4,324			5,535
Income before income taxes		72,010			40,332			99,204			62,403
Income tax provision		25,975			14,553			35,781			23,968
Net income		46,035			25,779			63,423			38,435
Net income attributable to the noncontrolling interest		(817	)		(610	)		(939	)		(1,001	)
Net income attributable to The Andersons, Inc.	$	45,218		$	25,169		$	62,484		$	37,434
Per common share:
Basic earnings attributable to The Andersons, Inc. common shareholders	$	2.44		$	1.37		$	3.37		$	2.04
Diluted earnings attributable to The Andersons, Inc. common shareholders	$	2.42		$	1.36		$	3.34		$	2.02
Dividends paid	$	0.1100		$	0.0900		$	0.2200		$	0.1775

Consolidated Balance Sheets
(Unaudited)
	June 30,		December 31,		June 30,
(in thousands)	2011		2010		2010
Assets
Current assets:
Cash and cash equivalents	$	18,616	$	29,219	$	204,317
Restricted cash		12,572		12,134		3,548
Accounts receivable, net		240,254		152,227		132,701
Inventories		469,551		647,189		237,994
Commodity derivative assets — current		187,438		246,475		21,534
Other current assets		48,577		51,314		32,176
Total current assets		977,008		1,138,558		632,270
Investments and other assets		226,498		223,204		209,290
Commodity derivative assets — noncurrent		8,560		18,113		389
Railcar assets leased to others, net		178,141		168,483		169,331
Property, plant and equipment, net		153,642		151,032		144,165
Total assets	$	1,543,849	$	1,699,390	$	1,155,445
Liabilities and shareholders’ equity
Current liabilities:
Borrowings under short-term line of credit	$	194,200	$	241,100	$	-
Commodity derivative liabilities — current		24,289		57,621		54,918
Other current liabilities		405,772		538,022		278,051
Total current liabilities		624,261		836,743		332,969
Deferred items and other long-term liabilities		132,630		117,984		95,268
Commodity derivative liabilities — noncurrent		1,850		3,279		2,911
Long-term debt, less current maturities		260,645		276,825		281,740
Shareholders’ equity		524,463		464,559		442,557
Total liabilities and shareholders’ equity	$	1,543,849	$	1,699,390	$	1,155,445

Segment Data
								Plant		Turf &
	Grain		Ethanol			Rail		Nutrient		Specialty		Retail			Other			Total
Quarter ended June 30, 2011
Revenues from external customers	$	797,130	$	164,704		$	29,501	$	259,823	$	41,551	$	45,458		$	—		$	1,338,167
Gross Profit		51,480		4,829			6,415		39,251		6,968		13,829			—			122,772
Equity in earnings of affiliates		5,428		7,082			—		2		—		—			—			12,512
Other income, net		522		37			841		134		259		144			81			2,018
Income (loss) before income taxes		36,541		9,647			2,763		24,077		1,778		1,877			(4,673	)		72,010
Income attributable to the noncontrolling interest		—		(817	)		—		—		—		—			—			(817	)
Operating income (loss) (a)	$	36,541	$	8,830		$	2,763	$	24,077	$	1,778	$	1,877		$	(4,673	)	$	71,193
Quarter ended June 30, 2010
Revenues from external customers	$	360,635	$	113,045		$	23,635	$	228,404	$	41,182	$	44,098		$	—		$	810,999
Gross Profit		25,679		4,394			4,351		31,563		8,032		13,535			—			87,554
Equity in earnings of affiliates		2,272		4,393			—		2		—		—			—			6,667
Other income (loss), net		605		19			499		302		377		157			(78	)		1,881
Income (loss) before income taxes		13,373		6,859			114		19,017		2,486		2,078			(3,595	)		40,332
Income attributable to the noncontrolling interest		—		(610	)		—		—		—		—			—			(610	)
Operating income (loss) (a)	$	13,373	$	6,249		$	114	$	19,017	$	2,486	$	2,078		$	(3,595	)	$	39,722
								Plant		Turf &
	Grain		Ethanol			Rail		Nutrient		Specialty		Retail			Other			Total
Six months ended June 30, 2011
Revenues from external customers	$	1,435,097	$	297,452		$	58,411	$	383,472	$	88,821	$	76,588		$	—		$	2,339,841
Gross Profit		82,772		9,294			13,532		57,335		15,744		22,780			—			201,457
Equity in earnings of affiliates		11,658		8,096			—		4		—		—			—			19,758
Other income, net		1,102		95			1,594		259		549		300			425			4,324
Income (loss) before income taxes		51,642		13,340			6,309		29,191		5,056		(787	)		(5,547	)		99,204
Income attributable to the noncontrolling interest		—		(939	)		—		—		—		—			—			(939	)
Operating income (loss)	$	51,642	$	12,401		$	6,309	$	29,191	$	5,056	$	(787	)	$	(5,547	)	$	98,265
Six months ended June 30, 2010
Revenues from external customers	$	763,003	$	231,566		$	50,325	$	331,562	$	82,815	$	73,726		$	—		$	1,532,997
Gross Profit		47,879		8,127			8,353		43,559		16,472		21,714			—			146,104
Equity in earnings of affiliates		5,331		11,237			—		4		—		—			—			16,572
Other income, net		1,254		43			2,308		633		794		276			227			5,535
Income (loss) before income taxes		25,571		15,768			1,140		19,736		5,150		(749	)		(4,213	)		62,403
Income attributable to the noncontrolling interest				(1,001	)														(1,001	)
Operating income (loss)	$	25,571	$	14,767		$	1,140	$	19,736	$	5,150	$	(749	)	$	(4,213	)	$	61,402
(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.

2