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The Andersons, Inc. Reports Second Quarter Results

August 2, 2012

MAUMEE, Ohio, Aug. 2, 2012 /PRNewswire/ — The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $29.2 million, or $1.56 per diluted share, on revenues of $1.3 billion. In the same three month period of 2011, the company reported results of $45.2 million, or $2.42 per diluted share on similar revenues. During the first six months of 2012, the company earned $47.6 million, or $2.54 per diluted share. In the first half of 2011, The Andersons reported record results of $62.5 million, or $3.34 per diluted share. The revenue for the first six months of 2012 and 2011 were $2.5 billion and $2.3 billion, respectively.

(Logo: http://photos.prnewswire.com/prnh/20081104/CLTU081LOGO )

The Grain Group reported operating income of $15.3 million in the second quarter of 2012 and $36.5 million for the same period last year, driven primarily by a return to more normal space income. As noted previously, wheat space income in the second quarter of the prior year was extraordinary and likely not repeatable. The group benefited from record second quarter earnings from its investment in Lansing Trade Group. Revenues for the Grain Group were $719 million and $797 million for the quarter in 2012 and 2011, respectively. The group’s operating income for the first six months was $34.7 million on revenues of $1.4 billion. Last year, its first half operating income was $51.6 million on similar revenues.

The Ethanol Group had an operating loss of $2.1 million in the second quarter, compared to earnings of $8.8 million during the same period last year. The loss was primarily the result of a decrease in the company’s earnings from its ethanol investment affiliates, whose income was significantly impacted by lower ethanol margins resulting from increased corn costs and lower ethanol demand. Income from co-products such as corn-oil, E-85, and CO2 continued to have a positive impact on the financials. Total revenues for the quarter in 2012 and 2011 were comparable at $168 million and $165 million, respectively. The group’s operating loss through June was $2.0 million on revenues of $318 million. Last year, its first half operating income was $12.4 million on revenues of $297 million.

The Plant Nutrient Group achieved operating income of $28.0 million during the second quarter on revenues of $309 million. In the same three month period of 2011, the group had operating income of $24.1 million on revenues of $260 million. This improved performance was due to increased volume. Margins were down slightly year over year, but still historically strong. The group’s first half 2012 operating income was $33.8 million on $484 million of revenues. Last year, the operating income through the first six months was $29.2 million on revenues of $383 million.

The Rail Group achieved record operating income of $7.2 million in the second quarter on revenues of $32 million. In the same three month period of 2011, the group earned $2.8 million and revenues were $30 million. This quarter, the group recognized $2.4 million in gains on sales of railcars and related leases and non-recourse transactions, which is comparable to the gain of $2.3 million recorded in the prior year. Gross profit from the leasing business was significantly higher due primarily to an increase in the average lease rate. The average utilization rate for the quarter was approximately 85 percent, which is consistent with last year. Income from the railcar repair business increased considerably as well. The group’s first half operating income was a record $15.2 million on $68 million of revenues. In 2011, operating income through June was $6.3 million and revenues were $58 million. The rail fleet has increased to approximately 23,100 cars from 22,400 last year. In addition, the Rail Group executed several transactions in the quarter that will result in the recognition of $4.3 million in operating income next quarter.

The Turf & Specialty Group had operating income of $2.8 million in the second quarter on $44 million of revenues. Last year, the group reported operating income of $1.8 million on $42 million of revenues for the same period. Through the first half of 2012, the group’s operating income was $5.0 million on $89 million of revenues, which is similar to the prior year’s result.

The Retail Group had an operating income of $1.4 million during the second quarter of 2012 on revenues of $44 million. During the same period of the prior year, the group had an operating income of $1.9 million and revenues were $45 million. Through the first six months, the group lost $1.3 million and revenues were $75 million. Last year through June, the group lost $0.8 million on revenues of $77 million.

“We had a good quarter, although our expectations for the remainder of the year have been tempered by the drought conditions currently being experienced, which will certainly impact our grain and ethanol businesses,” CEO Mike Anderson stated. “Although the results of our Ethanol Group have declined, given the current ethanol margin environment, we feel the results demonstrate that our business structure, including co-products, services, and equity partners, perform much better in a down market than the general industry. I am particularly proud of the Rail Group’s record results this quarter as well as PNG’s strong results, which continue to demonstrate the portfolio benefits of our business mix,” added Mr. Anderson.

The company will host a webcast on Friday, August 3, 2012 at 11:00 A.M. ET, to discuss its performance. This can be accessed under the heading “Investor” on its website at www.andersonsinc.com.

The Andersons, Inc. is a diversified company rooted in agriculture. Founded in Maumee, Ohio, in 1947, the company conducts business across North America in the grain, ethanol, and plant nutrient sectors, railcar leasing, turf and cob products, and consumer retailing.

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 at www.andersonsinc.com

FINANCIAL TABLES FOLLOW . . .

    The Andersons, Inc.
    Consolidated Statements of Income
    (Unaudited)

                                                                             Three months ended June
                                                                                       30,               Six months ended
                                                                                                             June 30,
    (in thousands, except per share data)                                                          2012                     2011       2012        2011
                                                                                                   ----                     ----       ----        ----

    Sales and merchandising revenues                                                         $1,315,834               $1,338,167 $2,452,967  $2,339,841
    Cost of sales and merchandising revenues                                                  1,213,184                1,215,395  2,264,447   2,138,384
                                                                                              ---------                ---------  ---------   ---------
    Gross profit                                                                                102,650                  122,772    188,520     201,457
    Operating, administrative and general expenses                                               59,210                   57,730    119,310     111,437
    Interest expense                                                                              5,380                    7,562     10,710      14,898
    Other income:
    Equity in earnings of affiliates                                                              5,096                   12,512      9,379      19,758
    Other income, net                                                                             2,671                    2,018      5,917       4,324
                                                                                                  -----                    -----      -----       -----
    Income before income taxes                                                                   45,827                   72,010     73,796      99,204
    Income tax provision                                                                         17,356                   25,975     27,597      35,781
                                                                                                 ------                   ------     ------      ------
    Net income                                                                                   28,471                   46,035     46,199      63,423
    Net income (loss) attributable to the noncontrolling interests                                 (728)                     817     (1,407)        939
                                                                                                   ----                      ---     ------         ---
    Net income attributable to The Andersons, Inc.                                              $29,199                  $45,218    $47,606     $62,484
                                                                                                =======                  =======    =======     =======

    Per common share:
    Basic earnings attributable to The Andersons, Inc. common shareholders                        $1.57                    $2.44      $2.56       $3.37
                                                                                                  =====                    =====      =====       =====
    Diluted earnings attributable to The Andersons, Inc. common shareholders                      $1.56                    $2.42      $2.54       $3.34
                                                                                                  =====                    =====      =====       =====
    Dividends paid                                                                                $0.15                    $0.11      $0.30       $0.22
                                                                                                  =====                    =====      =====       =====
    The Andersons, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited)(In thousands)

                                                                                                 June 30, 2012                                        December 31, 2011                                          June 30, 2011
                                                                                                 -------------                                        -----------------                                          -------------
    Assets
    Current assets:
    Cash and cash equivalents                                                                                       $23,930                                                     $20,390                                              $18,616
    Restricted cash                                                                                                   5,644                                                      18,651                                               12,572
    Accounts receivable, net                                                                                        205,046                                                     167,640                                              240,254
    Inventories                                                                                                     597,091                                                     760,459                                              469,551
    Commodity derivative assets - current                                                                           122,010                                                      83,950                                              187,438
    Deferred income taxes                                                                                            18,784                                                      21,483                                               17,710
    Other current assets                                                                                             38,535                                                      34,649                                               30,867
                                                                                                                     ------                                                      ------                                               ------
    Total current assets                                                                                          1,011,040                                                   1,107,222                                              977,008
    Other assets:
    Commodity derivative assets - noncurrent                                                                          4,844                                                       2,289                                                8,560
    Other assets, net                                                                                                70,040                                                      53,327                                               46,610
    Equity method investments                                                                                       189,610                                                     199,061                                              179,888
                                                                                                                    -------                                                     -------                                              -------
                                                                                                                    264,494                                                     254,677                                              235,058
    Railcar assets leased to others, net                                                                            252,965                                                     197,137                                              178,141
    Property, plant and equipment, net                                                                              266,275                                                     175,087                                              153,642
                                                                                                                    -------                                                     -------                                              -------
    Total assets                                                                                                 $1,794,774                                                  $1,734,123                                           $1,543,849
                                                                                                                 ==========                                                  ==========                                           ==========

    Liabilities and equity
    Current liabilities:
    Borrowings under short-term line of credit                                                                     $309,608                                                     $71,500                                             $194,200
    Accounts payable for grain                                                                                      129,979                                                     391,905                                               80,374
    Other accounts payable                                                                                          148,497                                                     142,762                                              164,325
    Customer prepayments and deferred revenue                                                                        55,912                                                      79,557                                               64,231
    Commodity derivative liabilities - current                                                                       29,764                                                      15,874                                               24,289
    Accrued expenses and other current liabilities                                                                   51,283                                                      60,445                                               51,410
    Current maturities of long-term debt                                                                             29,647                                                      32,208                                               45,432
                                                                                                                     ------                                                      ------                                               ------
    Total current liabilities                                                                                       754,690                                                     794,251                                              624,261

    Other long-term liabilities                                                                                      11,546                                                      43,014                                               33,757
    Commodity derivative liabilities - noncurrent                                                                       454                                                       1,519                                                1,850
    Employee benefit plan obligations                                                                                50,437                                                      52,972                                               30,835
    Long-term debt, less current maturities                                                                         317,648                                                     238,885                                              260,645
    Deferred income taxes                                                                                            70,806                                                      64,640                                               68,038
                                                                                                                     ------                                                      ------                                               ------
    Total liabilities                                                                                             1,205,581                                                   1,195,281                                            1,019,386
    Total equity                                                                                                    589,193                                                     538,842                                              524,463
                                                                                                                    -------                                                     -------                                              -------
    Total liabilities and equity                                                                                 $1,794,774                                                  $1,734,123                                           $1,543,849
                                                                                                                 ==========                                                  ==========                                           ==========
    Segment Data

                                                                                             Grain                                Ethanol                        Plant Nutrient                        Rail                             Turf & Specialty                             Retail                           Other               Total
    Quarter ended June 30, 2012
    Revenues from external customers                                                                      $718,911                            $167,758                         $308,797                          $32,046                                       $43,845                          $44,477                  $            -         $1,315,834

    Gross profit                                                                                            26,440                               1,925                           41,657                           11,563                                         7,490                           13,575                               -            102,650
                                                                                                                                                                                                                                                                                                                                        -
    Equity in earnings (loss) of affiliates                                                                  7,505                              (2,410)                               1                                -                                             -                                -                               -              5,096

    Other income, net                                                                                          489                                  20                            1,010                              824                                           289                              155                            (116)             2,671

    Income (loss) before income taxes                                                                       15,277                              (2,833)                          27,953                            7,199                                         2,753                            1,428                          (5,950)            45,827

    Loss attributable to the noncontrolling interests                                                            -                                (728)                               -                                -                                             -                                -                               -               (728)

    Operating income (loss) (a)                                                                            $15,277                             $(2,105)                         $27,953                           $7,199                                        $2,753                           $1,428                         $(5,950)           $46,555

    Quarter ended June 30, 2011
    Revenues from external customers                                                                      $797,130                            $164,704                         $259,823                          $29,501                                       $41,551                          $45,458                 $             -         $1,338,167

    Gross profit                                                                                            51,480                               4,829                           39,251                            6,415                                         6,968                           13,829                               -            122,772

    Equity in earnings of affiliates                                                                         5,428                               7,082                                2                                -                                             -                                -                               -             12,512

    Other income, net                                                                                          522                                  37                              134                              841                                           259                              144                              81              2,018

    Income (loss) before income taxes                                                                       36,541                               9,647                           24,077                            2,763                                         1,778                            1,877                          (4,673)            72,010

    Income attributable to the noncontrolling interest                                                           -                                 817                                -                                -                                             -                                -                               -                817

    Operating income (loss) (a)                                                                            $36,541                              $8,830                          $24,077                           $2,763                                        $1,778                           $1,877                         $(4,673)           $71,193

                                                                                             Grain                                Ethanol                        Plant Nutrient                        Rail                             Turf & Specialty                             Retail                           Other               Total
    Six months ended June 30, 2012
    Revenues from external customers                                                                    $1,418,772                            $318,428                         $484,157                          $67,905                                       $88,972                          $74,733                  $            -         $2,452,967

    Gross profit                                                                                            59,041                               4,698                           62,975                           24,128                                        15,489                           22,189                               -            188,520

    Equity in earnings (loss) of affiliates                                                                 13,457                              (4,081)                               3                                -                                             -                                -                               -              9,379

    Other income, net                                                                                        1,316                                  36                            1,128                            1,600                                           490                              279                           1,068              5,917

    Income (loss) before income taxes                                                                       34,712                              (3,391)                          33,781                           15,217                                         4,955                           (1,321)                        (10,157)            73,796

    Loss attributable to the noncontrolling interests                                                            -                              (1,407)                               -                                -                                             -                                -                               -             (1,407)

    Operating income (loss) (a)                                                                            $34,712                             $(1,984)                         $33,781                          $15,217                                        $4,955                          $(1,321)                       $(10,157)           $75,203

    Six months ended June 30, 2011
    Revenues from external customers                                                                    $1,435,097                            $297,452                         $383,472                          $58,411                                       $88,821                          $76,588                 $             -         $2,339,841

    Gross profit                                                                                            82,772                               9,294                           57,335                           13,532                                        15,744                           22,780                               -            201,457

    Equity in earnings of affiliates                                                                        11,658                               8,096                                4                                -                                             -                                -                               -             19,758

    Other income, net                                                                                        1,102                                  95                              259                            1,594                                           549                              300                             425              4,324

    Income (loss) before income taxes                                                                       51,642                              13,340                           29,191                            6,309                                         5,056                             (787)                         (5,547)            99,204

    Income attributable to the noncontrolling interest                                                           -                                 939                                -                                -                                             -                                -                               -                939

    Operating income (loss) (a)                                                                            $51,642                             $12,401                          $29,191                           $6,309                                        $5,056                            $(787)                        $(5,547)           $98,265

    (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.

SOURCE The Andersons, Inc.


Source: PR Newswire