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

NEWS RELEASE

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

November 8, 2011

Phone: 419-891-6415

E-mail: nick—conrad@andersonsinc.com

THE ANDERSONS, INC. REPORTS THIRD QUARTER RESULTS
Earnings Of $ 0.59 Per Diluted Share
Record Earnings Of $3.92 Per Diluted Share Through September

MAUMEE, OHIO, November 8, 2011—The Andersons, Inc. (Nasdaq: ANDE)today announced third quarter net income attributable to the company of $10.9 million, or $0.59 per diluted share, on revenues of $939 million. In the third quarter of 2010, the company reported results of $1.4 million, or $0.08 per diluted share, on revenues of $707 million. For the first nine months of 2011, the company earned a record $73.4 million, or $3.92 per diluted share, on revenues of $3.3 billion. In the same period of 2010, The Andersons reported results of $38.8 million, or $2.09 per diluted share, on $2.2 billion of revenues. The majority of the year to year revenue increase relates to rising prices in our agricultural businesses. It is important to remember that revenues in commodity-based businesses may not serve as good indicators of income or economic performance.

The Grain & Ethanol Group reported third quarter operating income of $12.8 million, which was significantly higher than its year earlier result of $2.5 million. The group had record operating income through September of $76.8 million, in comparison to operating income of $42.8 million for the same period in 2010.

The Grain Division reported operating income of $8.3 million in the third quarter of 2011 versus $3.2 million for the same period last year. The division benefited from continued strong space income and record third quarter earnings from its investment in Lansing Trade Group. Revenues for the Grain Division were $539 million and $389 million for the third quarter of 2011 and 2010, respectively. Revenues increased significantly due to higher grain prices. The Grain Division’s operating income for the first nine months of the year was $60.0 million on revenues of $2.0 billion. Last year, its operating income through September was $28.8 million on revenues of $1.2 billion.

The Ethanol Division earned an operating income of $4.4 million in the third quarter. This compares to a loss of $0.8 million during the same period of the prior year. The higher income is the result of an increase in the company’s earnings from the investment in three ethanol limited liability company affiliates. Total revenues for the quarter were $179 million. In comparison, the division’s revenues for the same period last year were $109 million. Revenues increased primarily due to higher ethanol prices. The Ethanol Division’s operating income through September was $16.8 million on revenues of $477 million. In the prior year, its operating income for the same period was $14.0 million on revenues of $341 million.

The Plant Nutrient Group achieved operating income of $6.6 million during the third quarter of 2011 on revenues of $138 million. In the same three month period of 2010, the group had an operating income of $1.5 million on revenues of $129 million. This improved performance was due primarily to an increase in margin. Margins were strong primarily as a result of nutrient price appreciation. Total volume was down, year over year, primarily due to re-stocking of the nutrient pipeline some of which occurred in the prior quarter. The group’s first nine months’ operating income this year was $35.8 million on $521 million of revenues. Last year, its operating income through the first nine months was $21.2 million on revenues of $461 million. Increased revenues this year are due to higher selling prices.

The Rail Group had an operating income of $1.1 million in the third quarter on revenues of $24 million. In the same three month period of 2010, the group earned $0.1 million and revenues were $22 million. This quarter, the group recognized $0.7 million in gains on sales of railcars and related leases, whereas last year a gain of $1.3 million was recorded. The average utilization rate for the quarter was 85 percent in comparison to 73 percent for the same period last year. The group’s first nine months operating income this year was $7.4 million on $82 million of revenues. In 2010, operating income through September was $1.2 million and revenues were $73 million. These results included gains on sales of railcars and related leases of $7.7 million and $5.6 million in 2011 and 2010, respectively.

The Turf & Specialty Group had an operating loss of $1.2 million in the third quarter this year on $23 million of revenues. Last year, the group reported an operating loss of $0.3 million on $23 million of revenues for the same period. Both turf products tonnage and gross profit per ton decreased during the third quarter, in comparison to the prior year. Through the first nine months of 2011, the group’s operating income was $3.8 million on $112 million of revenues. Last year, its operating income was $4.9 million for the same period on revenues of $106 million.

The Retail Group had an operating loss of $1.2 million in the third quarter of 2011 on revenues of $36 million. In the comparable period last year, the group’s operating loss was $1.7 million and total revenues were $34 million. Through nine months, the group recorded a loss of $2.0 million and total revenues of $112 million. Last year through September the group lost $2.4 million on total revenues of $108 million.

“We are pleased to be able to report record year to date earnings. Our earnings continue to be led by our Grain & Ethanol and Plant Nutrient Groups,” CEO Mike Anderson stated. “The performance of the operating teams in this positive agricultural environment has resulted in strong returns on all assets including acquisitions made in recent years. I am particularly proud of the Grain & Ethanol Group’s record results this year, which have benefited from great space income and the record year to date results of Lansing Trade Group,” added Mr. Anderson.

The company will host a webcast on Wednesday, November 9, 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 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 . . .

The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
	Three Months ended						Nine Months ended
	September 30						September 30
(in thousands, except per share data)	2011			2010			2011			2010
Sales and merchandising revenues	$	938,660		$	706,825		$	3,278,501		$	2,239,822
Cost of sales and merchandising revenues		873,696			653,716			3,012,080			2,040,609
Gross profit		64,964			53,109			266,421			199,213
Operating, administrative and general expenses		54,486			50,143			165,923			146,653
Interest expense		5,711			4,625			20,609			13,923
Other income (loss):
Equity in earnings (loss) of affiliates		9,731			(1,096	)		29,489			15,476
Other income, net		1,217			3,561			5,541			9,096
Income before income taxes		15,715			806			114,919			63,209
Income tax provision		4,484			438			40,265			24,406
Net income		11,231			368			74,654			38,803
Net (income) loss attributable to the noncontrolling interest		(306	)		1,026			(1,245	)		25
Net income attributable to The Andersons, Inc.	$	10,925		$	1,394		$	73,409		$	38,828
Per common share
Basic earnings attributable to The Andersons, Inc. common shareholders	$	0.59		$	0.08		$	3.96		$	2.11
Diluted earnings attributable to The Andersons, Inc. common shareholders	$	0.59		$	0.08		$	3.92		$	2.09
Dividends paid	$	0.1100		$	0.0900		$	0.3300		$	0.2675

The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
	September 30		December 31		September 30
(in thousands)	2011		2010		2010
Assets
Current assets:
Cash and cash equivalents	$	38,510	$	29,219	$	25,732
Restricted cash		11,920		12,134		2,915
Accounts receivable, net		158,757		152,227		143,591
Inventories		458,314		647,189		432,448
Commodity derivative assets — current		143,010		246,475		177,100
Other current assets		58,792		51,314		48,653
Total current assets		869,303		1,138,558		830,439
Investments and other assets		237,128		223,204		205,363
Commodity derivative assets — noncurrent		3,907		18,113		9,851
Railcar assets leased to others, net		183,346		168,483		169,694
Property, plant and equipment, net		164,893		151,032		147,184
Total assets	$	1,458,577	$	1,699,390	$	1,362,531
Liabilities and shareholders’ equity
Current liabilities:
Borrowings under short-term line of credit	$	105,000	$	241,100	$	101,400
Commodity derivative liabilities — current		55,354		57,621		47,968
Other current liabilities		393,128		538,022		407,917
Total current liabilities		553,482		836,743		557,285
Deferred items and other long-term liabilities		130,394		117,984		97,107
Commodity derivative liabilities — noncurrent		6,903		3,279		1,936
Long-term debt, less current maturities		235,729		276,825		264,349
Shareholders’ equity		532,069		464,559		441,854
Total liabilities and shareholders’ equity	$	1,458,577	$	1,699,390	$	1,362,531

Segment Data
								Plant		Turf &
	Grain		Ethanol			Rail		Nutrient		Specialty			Retail			Other			Total
Quarter ended September 30, 2011
Revenues from external customers	$	538,723	$	179,331		$	24,067	$	137,637	$	23,051		$	35,851		$	-		$	938,660
Gross Profit		20,757		3,079			5,180		20,977		4,714			10,257			—			64,964
Equity in earnings of affiliates		6,459		3,270			—		2		—			—			—			9,731
Other income (loss), net		652		38			604		282		167			130			(656	)		1,217
Income (loss) before income taxes		8,313		4,749			1,123		6,622		(1,245	)		(1,233	)		(2,614	)		15,715
Income attributable to the noncontrolling interest		—		(306	)		—		—		—			—			—			(306	)
Operating income (loss) (a)		8,313		4,443			1,123		6,622		(1,245	)		(1,233	)		(2,614	)		15,409
Quarter ended September 30, 2010
Revenues from external customers	$	388,981	$	109,264		$	22,314	$	129,109	$	23,156		$	34,001		$	—			706,825
Gross Profit		18,449		2,923			2,577		14,226		5,217			9,717			—			53,109
Equity in earnings (loss) of affiliates		1,538		(2,635	)		—		1		—			—			—			(1,096	)
Other income, net		664		45			1,782		233		244			128			465			3,561
Income (loss) before income taxes		3,220		(1,790	)		85		1,462		(291	)		(1,651	)		(229	)		806
Loss attributable to the noncontrolling interest		—		1,026			—		—		—			—			—			1,026
Operating income (loss) (a)		3,220		(764	)		85		1,462		(291	)		(1,651	)		(229	)		1,832
Nine months ended September 30, 2011
Revenues from external customers	$	1,973,820	$	476,783		$	82,478	$	521,109	$	111,872		$	112,439		$	-			3,278,501
Gross Profit		103,529		12,373			18,712		78,312		20,458			33,037			—			266,421
Equity in earnings of affiliates		18,117		11,366			—		6		—			—			—			29,489
Other income (loss), net		1,754		133			2,198		541		716			430			(231	)		5,541
Income (loss) before income taxes		59,955		18,089			7,432		35,813		3,811			(2,020	)		(8,161	)		114,919
Income attributable to the noncontrolling interest		—		(1,245	)		—		—		—			—			—			(1,245	)
Operating income (loss) (a)		59,955		16,844			7,432		35,813		3,811			(2,020	)		(8,161	)		113,674
Nine months ended September 30, 2010
Revenues from external customers	$	1,151,984	$	340,830		$	72,639	$	460,671	$	105,971		$	107,727		$	—			2,239,822
Gross Profit		66,328		11,050			10,930		57,785		21,689			31,431			—			199,213
Equity in earnings of affiliates		6,869		8,602			—		5		—			—			—			15,476
Other income, net		1,918		88			4,090		866		1,038			404			692			9,096
Income (loss) before income taxes		28,791		13,978			1,225		21,198		4,859			(2,400	)		(4,442	)		63,209
Loss attributable to the noncontrolling interest		—		25			—		—		—			—			—			25
Operating income (loss) (a)		28,791		14,003			1,225		21,198		4,859			(2,400	)		(4,442	)		63,234
(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.