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The Andersons, Inc. Reports Third Quarter Results

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Third Quarter Earnings of $0.90 per Diluted Share

Rail Group Leads Earning Results

MAUMEE, Ohio, Nov. 5, 2012 /PRNewswire/ -- The Andersons, Inc. (NASDAQ: ANDE) today announced third quarter net income attributable to the company of $16.9 million, or $0.90 per diluted share, on revenues of $1.1 billion. In the third quarter of 2011, the company reported results of $10.9 million, or $0.59 per diluted share, on revenues of $939 million. For the first nine months of 2012, the company earned $64.5 million, or $3.43 per diluted share, on revenues of $3.6 billion.  In the same period of 2011, The Andersons reported results of $73.4 million, or $3.92 per diluted share, on $3.3 billion of revenues.   

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

The Rail Group achieved record third quarter operating income of $19.1 million on revenues of $60 million. In the same three month period of 2011, the group earned $1.1 million and revenues were $24 million. This quarter, the group recognized $13.5 million in gains on sales of railcars and related leases and non-recourse transactions (where the company continues to provide car management services to the purchaser and typically holds an option to purchase the railcars at the end of the assigned lease). In the third quarter of 2011, the company recognized a gain on similar transactions of $0.7 million. 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 84 percent, which is down slightly from 85 percent last year. The rail fleet has increased to approximately 23,400 cars from 22,300 last year. The group's first nine months operating income was $34.3 million on $128 million of revenues. In 2011, operating income through September was $7.4 million and revenues were $82 million. These results include gains similar to those aforementioned of $22.2 million and $7.7 million in 2012 and 2011, respectively. 

The Grain Group had operating income of $10.8 million in the third quarter of 2012 versus $8.3 million for the same period last year. The group benefited from an early harvest, which resulted in higher gross profit on sales in comparison to the prior year third quarter. Space income was down considerably, as expected. This was offset by record third quarter earnings from the company's investment in Lansing Trade Group. Revenues for the Grain Group were $677 million and $539 million for the third quarter of 2012 and 2011, respectively. Revenues increased primarily due to an increase in the bushels sold. The Grain Group's operating income for the first nine months of the year was $45.5 million on revenues of $2.1 billion. Last year, its operating income through September was $60.0 million on revenues of $2.0 billion. As announced last week, the group has entered into an agreement to purchase the majority of the grain and agronomy assets of Green Plains Grain Company, LLC, a subsidiary of Green Plains Renewable Energy, Inc. This acquisition includes seven facilities in Iowa and five in Tennessee, with a combined grain storage capacity of approximately 32 million bushels, which increases the group's storage capacity by nearly 30 percent.  The Iowa locations also have 30,000 tons of fertilizer storage space.       

The Plant Nutrient Group's third quarter operating income was $0.8 million on revenues of $135 million. In the same three month period of 2011, the group had operating income of $6.6 million on revenues of $138 million. Margins in the third quarter were solid; however, in the prior year margins were significantly higher. The group's first nine months' operating income was $34.5 million on $619 million of revenues. Last year, its operating income through September was $35.8 million on revenues of $521 million. Increased revenues this year are due to both increased volume and higher selling prices.

The Ethanol Group had an operating loss of $0.9 million in the third quarter, compared to earnings of $4.4 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 continues to be significantly impacted by lower ethanol margins that have resulted from increased corn costs and lower ethanol demand. Partially offsetting the group's lower margins are service income and income from co-products such as corn-oil, DDGs, E-85, and CO2. Total revenues for the quarter in 2012 and 2011 were $210 million and $179 million, respectively. Revenues were up due to the addition of the Denison, Iowa facility in May. The group's operating loss through September was $2.9 million on revenues of $528 million. Last year, its nine month operating income was $16.8 million on revenues of $477 million

The Turf & Specialty Group had an operating loss of $1.6 million in the third quarter on $22 million of revenues. Last year, the group reported an operating loss of $1.2 million on $23 million of revenues for the same period. Through the first nine months of 2012, the group's operating income was $3.4 million on $110 million of revenues. Last year, its operating income was $3.8 million for the same period on revenues of $112 million.  

The Retail Group had an operating loss of $1.8 million in the third quarter of 2012 on revenues of $35 million. In the comparable period last year, the group's operating loss was $1.2 million and total revenues were $36 million. Through nine months, the group recorded a loss of $3.1 million and total revenues of $110 million. Last year through September the group lost $2.0 million on total revenues of $112 million.

"We had a great quarter, due in a large part to the exceptional results seen in our Rail Group, which has had record results every quarter this year due to skillful management of its railcar assets," CEO Mike Anderson stated.  "We also had good results in the Grain Group, although some of its income has been accelerated due to the early harvest. The Grain Group's performance was impacted by record Lansing Trade Group earnings," added Mr. Anderson. "Our expectations for the remainder of the year still remain tempered by the drought, which will continue to impact our grain and ethanol businesses through the first half of 2013. Our recent acquisitions and capital expansions, however, will pay dividends in the future. These include the acquisition of Mt. Pulaski Products, which was finalized last week, breaking ground on a new, state of the art, railcar blast and paint facility, the recent opening of our Anselmo, Nebraska grain elevator, and the previously mentioned Green Plains Grain Company, LLC acquisition. We will effectively manage through the 2012 drought, as we have to date, and will continue our focus on long term earnings growth," concluded Mr. Anderson.

The company will host a webcast on Tuesday, November 6, 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.
Condensed Consolidated Balance Sheets
(Unaudited)(In thousands)







September 30, 2012



December 31, 2011



September 30, 2011

Assets











Current assets:











Cash and cash equivalents

$                  80,370



$                  20,390



$                    38,510

Restricted cash

160



18,651



11,920

Accounts receivable, net

199,158



167,640



158,757

Inventories

682,292



760,459



458,314

Commodity derivative assets – current

166,264



83,950



143,010

Deferred income taxes

20,627



21,483



17,233

Other current assets

41,568



34,649



41,559

Total current assets

1,190,439



1,107,222



869,303

Other assets:











Commodity derivative assets – noncurrent

7,047



2,289



3,907

Other assets, net

67,801



53,327



48,010

Equity method investments

190,057



199,061



189,118



264,905



254,677



241,035

Railcar assets leased to others, net

252,702



197,137



183,346

Property, plant and equipment, net

283,394



175,087



164,893

Total assets

$            1,991,440



$             1,734,123



$               1,458,577













Liabilities and equity











Current liabilities:











Borrowings under short-term line of credit

$               275,522



$                  71,500



$                  105,000

Accounts payable for grain

250,066



391,905



77,813

Other accounts payable

204,347



142,762



137,872

Customer prepayments and deferred revenue

77,278



79,557



82,785

Commodity derivative liabilities – current

43,589



15,874



55,354

Accrued expenses and other current liabilities

53,631



60,445



49,487

Current maturities of long-term debt

32,655



32,208



45,171

Total current liabilities

937,088



794,251



553,482













Other long-term liabilities

14,083



43,014



35,421

Commodity derivative liabilities – noncurrent

590



1,519



6,903

Employee benefit plan obligations

49,478



52,972



30,132

Long-term debt, less current maturities

312,404



238,885



235,729

Deferred income taxes

75,377



64,640



64,841

Total liabilities

1,389,020



1,195,281



926,508

Total equity

602,420



538,842



532,069

Total liabilities and equity

$            1,991,440



$             1,734,123



$               1,458,577













The Andersons, Inc.

Consolidated Statements of Income

(Unaudited)











 

(in thousands, except per share data)

Three months ended September 30,

Nine months ended September 30,

2012

2011

2012

2011











Sales and merchandising revenues

$              1,138,402

$              938,660

$            3,591,369

$        3,278,501

Cost of sales and merchandising revenues

1,060,086

873,696

3,324,533

3,012,080

Gross profit

78,316

64,964

266,836

266,421

Operating, administrative and general expenses

58,029

54,486

177,339

165,923

Interest expense

5,482

5,711

16,192

20,609

Other income:









Equity in earnings of affiliates

6,027

9,731

15,406

29,489

Other income, net

3,492

1,217

9,409

5,541

Income before income taxes

24,324

15,715

98,120

114,919

Income tax provision

9,133

4,484

36,730

40,265

Net income

15,191

11,231

61,390

74,654

Net income (loss) attributable to the noncontrolling interests

(1,693)

306

(3,100)

1,245

Net income attributable to The Andersons, Inc.

$                    16,884

$                10,925

$                  64,490

$             73,409











Per common share:









Basic earnings attributable to The Andersons, Inc. common shareholders

$                        0.91

$                    0.59

$                       3.47

$                 3.96

Diluted earnings attributable to The Andersons, Inc. common shareholders

$                        0.90

$                    0.59

$                       3.43

$                 3.92

Dividends paid

$                        0.15

$                    0.11

$                       0.45

$                 0.33











 

Segment Data































Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Quarter ended September 30, 2012

















Revenues from external customers

$       677,484

$      209,634

$  135,144

$      59,703

$               21,509

$      34,928

$      1,138,402



















Gross profit

21,166

3,846

15,297

22,892

5,296

9,819

78,316



















Equity in earnings (loss) of affiliates

9,249

(3,224)

2

6,027



















Other income, net

526

1

523

1,695

181

117

449

3,492



















Income (loss) before income taxes

10,807

(2,629)

759

19,071

(1,571)

(1,769)

(344)

24,324



















Loss attributable to the noncontrolling interests

(1,693)

(1,693)



















Operating income (loss) (a)

$         10,807

$             (936)

$          759

$      19,071

$                (1,571)

$       (1,769)

$       (344)

$            26,017



















Quarter ended September 30, 2011

















Revenues from external customers

$         538,723

$         179,331

$    137,637

$        24,067

$                 23,051

$        35,851

$—

$            938,660



















Gross profit

20,757

3,079

20,977

5,180

4,714

10,257

64,964



















Equity in earnings of affiliates

6,459

3,270

2

9,731



















Other income (expense), net

652

38

282

604

167

130

(656)

1,217



















Income (loss) before income taxes

8,313

4,749

6,622

1,123

(1,245)

(1,233)

(2,614)

15,715



















Income attributable to the noncontrolling interest

306

306



















Operating income (loss) (a)

$             8,313

$             4,443

$        6,622

$          1,123

$                 (1,245)

$        (1,233)

$      (2,614)

$              15,409





















Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Nine months ended September 30, 2012

















Revenues from external customers

$    2,096,256

$      528,062

$  619,301

$    127,608

$             110,481

$    109,661

$—

$      3,591,369



















Gross profit

80,207

8,544

78,272

47,020

20,785

32,008

266,836



















Equity in earnings (loss) of affiliates

22,706

(7,305)

5

15,406



















Other income, net

1,842

37

1,651

3,295

671

396

1,517

9,409



















Income (loss) before income taxes

45,519

(6,020)

34,540

34,288

3,384

(3,090)

(10,501)

98,120



















Loss attributable to the noncontrolling interests

(3,100)

(3,100)



















Operating income (loss) (a)

$         45,519

$         (2,920)

$    34,540

$      34,288

$                 3,384

$       (3,090)

$  (10,501)

$          101,220



















Nine months ended September 30, 2011

















Revenues from external customers

$      1,973,820

$         476,783

$    521,109

$        82,478

$               111,872

$      112,439

$—

$         3,278,501



















Gross profit

103,529

12,373

78,312

18,712

20,458

33,037

266,421



















Equity in earnings of affiliates

18,117

11,366

6

29,489



















Other income (expense), net

1,754

133

541

2,198

716

430

(231)

5,541



















Income (loss) before income taxes

59,955

18,089

35,813

7,432

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

$      35,813

$          7,432

$                   3,811

$        (2,020)

$      (8,161)

$            113,674



















(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.

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