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The Andersons, Inc. Reports Second Quarter Results

August 6, 2013

Second Quarter Earnings of $1.57 per Diluted Share

MAUMEE, Ohio, Aug. 6, 2013 /PRNewswire/ — The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $29.5 million, or $1.57 per diluted share, on revenues of $1.6 billion. In the same three month period of 2012, the company reported similar results of $29.2 million, or $1.56 per diluted share on revenues of $1.3 billion. During the first six months of 2013, the company earned $42.1 million, or $2.24 per diluted share. In the first half of 2012, The Andersons reported results of $47.6 million, or $2.54 per diluted share. The revenue for the first six months of 2013 and 2012 were $2.8 billion and $2.5 billion, respectively.

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

The Plant Nutrient Group had operating income of $23.2 million during the second quarter on revenues of $330 million. In the same three month period of 2012, the group had operating income of $28.0 million on revenues of $309 million. This quarter the group regained much of the volume lost in the first quarter; however, margins were down year over year. The group’s first half 2013 operating income was $22.7 million on $442 million of revenues. Last year, the operating income through the first six months was $33.8 million on revenues of $484 million. Margins from year to year were down due to a slow start to the season and limited inventory price appreciation.

The Ethanol Group achieved record operating income of $10.6 million in the second quarter on revenues of $222 million. This compares to an operating loss of $2.1 million during the same period last year on revenues of $168 million. This income increase was due primarily to significant ethanol margin improvement, which includes the positive impact of co-products such as corn-oil, distillers dried grains, E-85, and CO2. Also, the group had a full quarter of income from its Denison, Iowa production facility compared to the prior year as the acquisition occurred in May of 2012. The group’s operating income through June was $13.1 million on revenues of $422 million. Last year, its first half operating loss was $2.0 million on revenues of $318 million. The revenue increase was due to added volume from the Denison plant and an increase in the average price per gallon of ethanol.

The Rail Group achieved record operating income of $9.7 million in the second quarter on revenues of $39 million. In the same three month period of 2012, the group earned $7.2 million and revenues were $32 million. The group’s revenue and operating income benefited from higher lease rates and increased income from railcar financings. The group recognized $4.4 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions during the second quarter this year. In the same period of 2012, the company recognized gains of $2.4 million on similar transactions. The average utilization rate for the quarter was 85.7 percent in comparison to 84.7 percent for the same period last year. The group’s first half operating income was a record $24.3 million on $85 million of revenues. In 2012, operating income through June was $15.2 million and revenues were $68 million. The rail fleet has increased to 23,245 cars from 23,107 last year.

The Grain Group reported operating income of $2.1 million in the second quarter of 2013, compared to $15.3 million in the same three month period last year, as it continued to be impacted by the 2012 drought, which led to significantly reduced space income. The group benefited from good second quarter earnings from its investment in Lansing Trade Group. Revenues for the Grain Group were $891 million and $719 million for the quarter in 2013 and 2012, respectively. The group’s operating income for the first six months was $10.4 million on revenues of $1.7 billion. Last year, its first half operating income was $34.7 million and revenues were $1.4 billion. Revenues increased due to higher grain prices and greater sales volume, which resulted primarily from the addition of the former Green Plains Grain facilities.

The Turf & Specialty Group’s operating income was $2.2 million in the second quarter on $43 million of revenues. Last year, the group reported operating income of $2.8 million on $44 million of revenues for the same period. Through the first half of 2013, the group’s operating income was $6.2 million on $90 million of revenues. Comparatively, in 2012 the group earned $5.0 million through June on revenues of $89 million.

The Retail Group had operating income of $1.5 million during the second quarter of 2013 on revenues of $41 million. During the same period of the prior year, the group had operating income of $1.4 million and revenues were $44 million. Through the first six months, the group lost $1.6 million and revenues were $72 million. Last year through June, the group lost $1.3 million on revenues of $75 million.

It was announced last week that the company and Lansing Trade Group finalized the acquisition of Thompsons Limited, a grain and food-grade bean handler and agronomy input provider, headquartered in Blenheim, Ontario, and operating 12 locations across Ontario and Minnesota. Then, yesterday the company announced it has entered into an agreement to acquire Mile Rail, LLC, a railcar repair and cleaning provider headquartered in Kansas City, Missouri, with three satellite locations in Nebraska, Kansas and Indiana, and mobile units in the Central Midwest.

“We had record quarterly results in both our Rail and Ethanol groups, and strong results in our Plant Nutrient Group. The Rail Group continues to manage its railcar portfolio in a skillful manner. It is satisfying to see significantly improved margins in the ethanol business; however, we are very aware the ethanol market will continue to be volatile,” CEO Mike Anderson stated. “The 2012 drought continues to have a strong impact on our Grain Group, as was expected, and the largest impact may be seen in the third quarter. A projected record corn crop, however, should positively impact the group the last three or four months of 2013,” added Mr. Anderson.

The company will host a webcast on Wednesday, August 7, 2013 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)                               2013           2012        2013          2012
                                                                        ----           ----        ----          ----

    Sales and merchandising revenues                              $1,566,964     $1,315,834  $2,838,934    $2,452,967

    Cost of sales and merchandising revenues                       1,463,735      1,213,184   2,656,432     2,264,447
                                                                   ---------      ---------   ---------     ---------

    Gross profit                                                     103,229        102,650     182,502       188,520

    Operating, administrative and general expenses                    61,464         59,210     123,472       119,310

    Interest expense                                                   4,855          5,380      11,259        10,710

    Other income:

    Equity in earnings of affiliates                                  10,010          5,096      17,814         9,379

    Other income, net                                                  1,292          2,671       4,018         5,917
                                                                       -----          -----       -----         -----

    Income before income taxes                                        48,212         45,827      69,603        73,796

    Income tax provision                                              17,480         17,356      26,559        27,597
                                                                      ------         ------      ------        ------

    Net income                                                        30,732         28,471      43,044        46,199

    Net income (loss) attributable to the noncontrolling
     interests                                                         1,193           (728)        927        (1,407)
                                                                       -----           ----         ---        ------

    Net income attributable to The Andersons, Inc.                   $29,539        $29,199     $42,117       $47,606
                                                                     =======        =======     =======       =======

    Per common share:

    Basic earnings attributable to The Andersons, Inc. common
     shareholders                                                      $1.58          $1.57       $2.25         $2.56
                                                                       =====          =====       =====         =====

    Diluted earnings attributable to The Andersons, Inc. common
     shareholders                                                      $1.57          $1.56       $2.24         $2.54
                                                                       =====          =====       =====         =====

    Dividends paid                                                     $0.16          $0.15       $0.32         $0.30
                                                                       =====          =====       =====         =====
    The Andersons, Inc.
    Condensed Consolidated Balance Sheets
    (Unaudited)(In thousands)

                                June 30, 2013            December 31, 2012            June 30, 2012
                                -------------            -----------------            -------------

    Assets

    Current
     assets:

    Cash and
     cash
     equivalents                                 $75,920                     $138,218                  $23,930

    Restricted
     cash                                            872                          398                    5,644

    Accounts
     receivable,
     net                                         216,432                      208,877                  205,046

    Inventories                                  444,523                      776,677                  597,091

    Commodity
     derivative
     assets -
     current                                     121,789                      103,105                  122,010

    Deferred
     income
     taxes                                         2,797                       15,862                   18,784

    Other
     current
     assets                                       44,936                       54,016                   38,535
                                                  ------                       ------                   ------

    Total
     current
     assets                                      907,269                    1,297,153                1,011,040

    Other
     assets:

    Commodity
     derivative
     assets -
     noncurrent                                       87                        1,906                    4,844

    Other
     assets,
     net                                         103,781                      105,129                   70,040

    Equity
     method
     investments                                 195,241                      190,908                  189,610
                                                 -------                      -------                  -------

                                                 299,109                      297,943                  264,494

    Railcar
     assets
     leased to
     others,
     net                                         242,887                      228,330                  252,965

    Property,
     plant and
     equipment,
     net                                         371,716                      358,878                  266,275
                                                 -------                      -------                  -------

    Total
     assets                                   $1,820,981                   $2,182,304               $1,794,774
                                              ==========                   ==========               ==========

    Liabilities
     and equity

    Current
     liabilities:

    Borrowings
     under
     short-
     term line
     of credit                                   $50,000                      $24,219                 $309,608

    Accounts
     payable
     for grain                                   178,017                      582,653                  129,979

    Other
     accounts
     payable                                     183,971                      165,201                  148,497

    Customer
     prepayments
     and
     deferred
     revenue                                      25,621                      105,410                   55,912

    Commodity
     derivative
     liabilities
     - current                                    58,183                       33,277                   29,764

    Accrued
     expenses
     and other
     current
     liabilities                                  57,456                       66,902                   51,283

    Current
     maturities
     of long-
     term debt                                    45,096                       15,145                   29,647
                                                  ------                       ------                   ------

    Total
     current
     liabilities                                 598,344                      992,807                  754,690

    Other long-
     term
     liabilities                                  15,634                       18,406                   11,546

    Commodity
     derivative
     liabilities
     -
     noncurrent                                    5,863                        1,134                      454

    Employee
     benefit
     plan
     obligations                                  50,754                       53,131                   50,437

    Long-term
     debt, less
     current
     maturities                                  409,020                      427,243                  317,648

    Deferred
     income
     taxes                                        87,486                       78,138                   70,806
                                                  ------                       ------                   ------

    Total
     liabilities                               1,167,101                    1,570,859                1,205,581

    Total
     equity                                      653,880                      611,445                  589,193
                                                 -------                      -------                  -------

    Total
     liabilities
     and equity                               $1,820,981                   $2,182,304               $1,794,774
                                              ==========                   ==========               ==========
    Segment Data

                                                                                                   Grain                     Ethanol             Plant Nutrient              Rail             Turf & Specialty           Retail                  Other           Total

    Three months ended June 30, 2013

    Revenues from external customers                                                                       $891,350                $222,240                $330,339               $38,601                $43,144               $41,290           $            -        $1,566,964

    Gross profit                                                                                             22,092                   9,649                  37,201                14,557                  7,321                12,409                        -           103,229

    Equity in earnings of affiliates                                                                          5,027                   4,983                       -                     -                      -                     -                        -            10,010

    Other income (expense), net                                                                                (349)                    199                     164                   702                    175                   100                      301             1,292

    Income (loss) before income taxes                                                                         2,053                  11,794                  23,240                 9,680                  2,195                 1,539                   (2,289)           48,212

    Income attributable to the noncontrolling interests                                                           -                   1,193                       -                     -                      -                     -                        -             1,193

    Operating income (loss) (a)                                                                              $2,053                 $10,601                 $23,240                $9,680                 $2,195                $1,539                  $(2,289)          $47,019

    Three months 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 (expense), 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 interest                                                              -                    (728)                      -                     -                      -                     -                        -              (728)

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

                                                                                                   Grain                     Ethanol             Plant Nutrient              Rail             Turf & Specialty           Retail                  Other           Total

    Six months ended June 30, 2013

    Revenues from external customers                                                                     $1,727,845                $421,549                $442,241               $84,965                $90,331               $72,003           $            -        $2,838,934

    Gross profit                                                                                             46,942                  14,454                  51,150                33,536                 16,339                20,081                        -           182,502

    Equity in earnings of affiliates                                                                         12,937                   4,877                       -                     -                      -                     -                        -            17,814

    Other income, net                                                                                           222                     430                     139                 1,648                    450                   214                      915             4,018

    Income (loss) before income taxes                                                                        10,352                  14,007                  22,678                24,254                  6,196                (1,630)                  (6,254)           69,603

    Income attributable to the noncontrolling interests                                                           -                     927                       -                     -                      -                     -                        -               927

    Operating income (loss) (a)                                                                             $10,352                 $13,080                 $22,678               $24,254                 $6,196               $(1,630)                 $(6,254)          $68,676

    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 interest                                                              -                  (1,407)                      -                     -                      -                     -                        -            (1,407)

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

    (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