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

NEWS RELEASE

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

February 8, 2012

Phone: 419-891-6415

E-mail: nick—conrad@andersonsinc.com

THE ANDERSONS, INC. REPORTS FOURTH QUARTER & FULL YEAR RESULTS
Record Full Year Earnings of $5.09 per Diluted Share
Earnings Led by Grain, Ethanol and Plant Nutrient Groups

MAUMEE, OHIO, FEBRUARY 8, 2012—The Andersons, Inc. (Nasdaq: ANDE), today announced record net income attributable to the company of $95.1 million, or $5.09 per diluted share, on revenues of $4.6 billion. In the prior year, the company earned $64.7 million, or $3.48 per diluted share, and total revenues were $3.4 billion. The company earned $21.7 million in the fourth quarter of 2011, or $1.17 per diluted share, on revenues of $1.3 billion. In the same three month period of 2010, the company reported income of $25.8 million, or $1.39 per diluted share, on revenues of $1.2 billion. The majority of the year to year revenue increase relates to rising prices in its 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 Group’s 2011 operating income was a record $87.3 million. This compares to operating income of $64.4 million in 2010. The group achieved this performance due primarily to significant space income, which was impacted by substantial wheat basis appreciation and spread gains. Additionally, Lansing Trade Group had its best ever annual performance. Total revenues for the Grain Group were $2.8 billion and $1.9 billion in 2011 and 2010, respectively. Revenues increased significantly due to higher grain prices. For the fourth quarter, the group’s operating income was $27.3 million on revenues of $876 million. In the same three month period of 2010, the group had income of $35.6 million on revenue of $785 million. For the quarter, the grain business benefited from strong space income, the reversal of a $3.2 million bad debt reserve, and solid performance by Lansing Trade Group.

The Ethanol Group achieved an operating income of $23.3 million in 2011. This compares to $17.0 million in the prior year. The higher income is the result of an increase in the company’s earnings from its investment in three ethanol limited liability companies. The ethanol plants have continued to maximize efficiency; additionally the plants have invested further in corn oil, E-85, and CO2, which have proven to be profitable business additions. Total revenues for the year were $642 million. In comparison, the group’s revenues for the prior year were $469 million. Revenues increased primarily due to higher ethanol prices. The group’s fourth quarter operating income was $6.5 million on revenues of $165 million. During the same three month period of 2010, its operating income was $3.0 million on revenues of $128 million.

The Plant Nutrient Group ended the year with record operating income of $38.3 million due primarily to an increase in margin resulting mainly from nutrient price appreciation and to a lesser degree from product mix. In 2010, the group had an operating income of $30.1 million. Revenues for 2011 and 2010 were $691 million and $619 million, respectively. Revenues increased in 2011 due to higher nutrient prices, which were partially offset by a decrease in volume. For the fourth quarter, the group’s operating income was $2.5 million on $170 million of revenues. Last year the group had operating income of $8.9 million during the same three month period on revenues of $159 million. The income decline in the fourth quarter includes $4.7 million of charges due to the recording of a lower of cost or market inventory adjustment and asset impairment charges.

The Rail Group had operating income of $9.8 million in 2011, a significant improvement over its $0.1 million income in 2010. Gross profit from the leasing business was significantly higher than the prior year due mainly to higher utilization and lease rates. The full year results include gains on sales of railcars and related leases of $8.4 million and $5.5 million in 2011 and 2010, respectively. The average utilization rate for 2011 was 84.6 percent, which was up from the prior year average of 73.6 percent. Revenues of $107 million for 2011 were higher than the $95 million reported in the prior year. The Rail Group had an operating income of $2.3 million in the fourth quarter on revenues of $25 million. In 2010, the operating loss for the same three month period was $1.1 million on revenues of $22 million.

The Turf & Specialty Group’s full year operating income was $2.0 million on revenues of $130 million. In 2010, the group had operating income of $3.4 million, and total revenues were $124 million. The group incurred an operating loss of $1.8 million in the fourth quarter on revenues of $18 million. Last year, its operating loss for the same period was $1.4 million on similar revenues.

The Retail Group had an operating loss of $1.5 million in 2011. In the prior year, the group’s operating loss was $2.5 million. Total sales for the group were $158 million in 2011, or 5 percent above the prior year total of $151 million. The Retail Group’s fourth quarter operating income was $0.5 million on revenues of $45 million. Last year, during the same three month period, the operating loss was $0.1 million and total revenues were $43 million.

“Clearly, both our full year and fourth quarter earnings were heavily influenced by the results within our agricultural businesses. The record full year earnings in both our Grain and Plant Nutrient Groups, and second best year in the Ethanol Group, is gratifying,” CEO Mike Anderson stated. “Our 2011 Rail Group results improved significantly from the prior year as a result of improved economic conditions.” Mr. Anderson added. “In the last year we have demonstrated our commitment to growth by adding 1.7 million bushels of grain storage capacity, beginning construction on a grain shuttle loader facility in Nebraska, and acquiring two businesses in the Plant Nutrient Group – Immokalee Farmer Supply in Florida in October of 2011, and New Eezy Gro, an Ohio based company, last week. We intend to continue to pursue our growth strategy in 2012 and beyond.”

The company will host a webcast on Thursday, February 9, 2012 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

The Andersons, Inc.
Consolidated Statements of Income
(Unaudited)
	Three months ended					Twelve months ended
	December 31,					December 31,
(in thousands, except per share data)	2011			2010		2011		2010
Sales and merchandising revenues	$	1,297,830		$	1,153,969	$	4,576,331	$	3,393,791
Cost of sales and merchandising revenues		1,211,399			1,071,503		4,223,479		3,112,112
Gross profit		86,431			82,466		352,852		281,679
Operating, administrative and general expenses		63,167			48,677		229,090		195,330
Interest expense		4,647			5,942		25,256		19,865
Other income:
Equity in earnings of affiliates		11,961			10,531		41,450		26,007
Other income, net		2,381			2,556		7,922		11,652
Income before income taxes		32,959			40,934		147,878		104,143
Income tax provision		10,788	��		14,856		51,053		39,262
Net income		22,171			26,078		96,825		64,881
Net income attributable to the noncontrolling interest		474			244		1,719		219
Net income attributable to The Andersons, Inc.	$	21,697		$	25,834	$	95,106	$	64,662
Per common share:
Basic earnings attributable to The Andersons, Inc. common shareholders	$	1.17		$	1.40	$	5.13	$	3.51
Diluted earnings attributable to The Andersons, Inc. common shareholders	$	1.17		$	1.39	$	5.09	$	3.48
Dividends paid	$	0.1100		$	0.0900	$	0.4400	$	0.3575

The Andersons, Inc.
Consolidated Balance Sheets
(Unaudited)
	December 31,		December 31,
(in thousands)	2011		2010
Assets
Current assets:
Cash and cash equivalents	$	20,390	$	29,219
Restricted cash		18,651		12,134
Accounts receivable, net		167,640		152,227
Inventories		760,459		647,189
Commodity derivative assets — current		83,950		246,475
Other current assets		56,132		51,314
Total current assets		1,107,222		1,138,558
Investments and other assets		252,388		223,204
Commodity derivative assets — noncurrent		2,289		18,113
Railcar assets leased to others, net		197,137		168,483
Property, plant and equipment, net		175,087		151,032
Total assets	$	1,734,123	$	1,699,390
Liabilities and shareholders’ equity
Current liabilities:
Borrowings under short-term line of credit	$	71,500	$	241,100
Commodity derivative liabilities — current		15,874		57,621
Other current liabilities		706,877		538,022
Total current liabilities		794,251		836,743
Deferred items and other long-term liabilities		160,626		117,984
Commodity derivative liabilities - noncurrent		1,519		3,279
Long-term debt, less current maturities		238,885		276,825
Total equity		538,842		464,559
Total liabilities and equity	$	1,734,123	$	1,699,390

Segment Data
					Plant						Turf &
	Grain		Ethanol		Nutrient			Rail			Specialty			Retail			Other			Total
Quarter ended December 31, 2011
Revenues from external customers	$	875,538	$	164,763	$	169,522		$	24,981		$	17,844		$	45,182		$	-		$	1,297,830
Gross profit		40,084		2,649		18,882			6,038			5,777			13,001			—			86,431
Equity in earnings (loss) of affiliates		5,631		6,349		(19	)		—			—			—			—			11,961
Other income, net		708		26		163			668			164			208			444			2,381
Income (loss) before income taxes		27,333		6,974		2,454			2,346			(1,811	)		500			(4,837	)		32,959
Income attributable to the noncontrolling interest		—		474		—			—			—			—			—			474
Operating income (loss) (a)		27,333		6,500		2,454			2,346			(1,811	)		500			(4,837	)		32,485
Quarter ended December 31, 2010
Revenues from external customers	$	784,829	$	127,809	$	158,659		$	22,177		$	17,578		$	42,917		$	—		$	1,153,969
Gross profit		37,388		3,724		21,752			2,449			5,248			11,905			—			82,466
Equity in earnings of affiliates		8,779		1,749		3			—			—			—			—			10,531
Other income, net		639		88		432			412			297			204			484			2,556
Income (loss) before income taxes		35,583		3,254		8,864			(1,118	)		(1,416	)		(134	)		(4,099	)		40,934
Income attributable to the noncontrolling interest		—		244		—			—			—			—			—			244
Operating income (loss) (a)		35,583		3,010		8,864			(1,118	)		(1,416	)		(134	)		(4,099	)		40,690
Twelve months ended December 31, 2011
Revenues from external customers	$	2,849,358	$	641,546	$	690,631		$	107,459		$	129,716		$	157,621		$	-		$	4,576,331
Gross profit		143,613		15,022		97,194			24,750			26,235			46,038			—			352,852
Equity in earnings (loss) of affiliates		23,748		17,715		(13	)		—			—			—			—			41,450
Other income, net		2,462		159		704			2,866			880			638			213			7,922
Income (loss) before income taxes		87,288		25,063		38,267			9,778			2,000			(1,520	)		(12,998	)		147,878
Income attributable to the noncontrolling interest		—		1,719		—			—			—			—			—			1,719
Operating income (loss) (a)		87,288		23,344		38,267			9,778			2,000			(1,520	)		(12,998	)		146,159
Twelve months ended December 31, 2010
Revenues from external customers	$	1,936,813	$	468,639	$	619,330		$	94,816		$	123,549		$	150,644		$	—		$	3,393,791
Gross profit		103,716		14,774		79,537			13,379			26,937			43,336			—			281,679
Equity in earnings of affiliates		15,648		10,351		8			—			—			—			—			26,007
Other income, net		2,557		176		1,298			4,502			1,335			608			1,176			11,652
Income (loss) before income taxes		64,374		17,232		30,062			107			3,443			(2,534	)		(8,541	)		104,143
Income attributable to the noncontrolling interest		—		219		—			—			—			—			—			(219	)
Operating income (loss) (a)		64,374		17,013		30,062			107			3,443			(2,534	)		(8,541	)		103,924
(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.