The Andersons, Inc. Reports Second Quarter Results

MAUMEE, Ohio, Aug. 4 /PRNewswire-FirstCall/ -- The Andersons, Inc. (Nasdaq: ANDE), today announced second quarter net income attributable to the company of $25.2 million, or $1.36 per diluted share, on revenues of $811 million.  In the same three month period of 2009, the company reported results of $15.9 million, or $0.87 per diluted share, on similar revenues.  For the first six months of 2010, the company earned $37.4 million, or $2.02 per diluted share.  In the first half of 2009, The Andersons reported results of $20.9 million, or $1.14 per diluted share.  The first six months of both years had revenues of $1.5 billion.  It is important to remember that revenues in commodity-based businesses do not serve as good predictors of income or economic performance.  

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The Grain & Ethanol Group's operating income of $19.6 million in the second quarter was significantly higher than its year earlier result of $8.9 million.  This was the result of both the grain and ethanol businesses achieving record second quarter results.  The grain business benefited primarily from increased space income, which resulted primarily from sizeable basis gains.  The ethanol business continued to benefit from a large portion of the ethanol sales being contracted during prior periods, when margins were at high levels.  Second quarter 2010 income from the group's investment in Lansing Trade Group was also higher than the prior year.  Total second quarter revenues for the group were $474 million; this includes $195 million of grain and ethanol sales made by the Grain & Ethanol Group in accordance with origination and marketing agreements between the company and its ethanol joint ventures.  In the second quarter of 2009, the group's total revenues were $500 million and included $188 million of the aforementioned sales.  The Grain & Ethanol Group's operating income through the first six months was a record $40.3 million in 2010 and $14.7 million in 2009.  Total revenues through June 2010 and 2009 were $995 million and $981 million, respectively.  During the quarter, the company finalized the acquisition of the assets of O'Malley Grain, Inc.'s two grain cleaning and storage facilities in Mansfield, Ill., and Fairmont, Neb.    

The Plant Nutrient Group achieved operating income of $19.0 million during the second quarter of 2010, on revenues of $228 million.  This is the second highest second quarter results in the group's history.  In the same three month period of 2009, the group had an operating income of $10.3 million on revenues of $198 million.  Margins were up slightly from the prior year and tons sold increased by more than a third as the industry returned to more traditional nutrient application rates on phosphates and potassium.  Retail farm centers were building and maintaining inventories versus the de-stocking that took place in 2009.  The group's first half 2010 operating income was $19.7 million on $332 million of revenues.  Last year, its operating income through the first six months was $12.4 million on revenues of $309 million.  

The Rail Group's operating income was $0.1 million in the second quarter of 2010, whereas the group earned $0.6 million for the same three month period a year ago.  Second quarter revenues were $24 million in both 2010 and 2009.  Gross profit from the leasing business was significantly less primarily due to lower utilization rates and the corresponding carrying costs of idle assets.  This quarter, the group recognized $1.7 million in gross margin from the scrapping and sale of railcars, whereas last year $0.8 million was recorded.  The group has approximately 22,800 cars and locomotives, which is down slightly from the prior year.  The average utilization rate (the percentage of the fleet in service) for the quarter was 71.0 percent compared to 80.6 percent for the same period last year.  As of the end of June, utilization was 71.4 percent.  The rail repair business showed improvement during the second quarter.  The group's first half operating income this year was $1.1 million on $50 million of revenues.  In 2009, operating income through June was $1.5 million and revenues were $51 million.  These results included gains on sales of railcars and related leases of $4.3 million and $1.1 million in 2010 and 2009, respectively.  During the second quarter the Rail Group made a significant minority investment in a short-line railroad - the Iowa Northern Railway Company.

The Turf & Specialty Group had an operating income of $2.5 million in the second quarter this year on $41 million of revenues.  Last year, the group reported a record $3.0 million of operating income on $40 million of revenues for the same period.  Turf products tonnage increased slightly, but gross profit per ton decreased due to product mix.  Through the first half of 2010, the group's operating income was $5.2 million on $83 million of revenues.  Last year, its operating income was a record $6.1 million through the first six months and revenues were $84 million.  

The Retail Group had an operating income of $2.1 million during the second quarter of 2010 on revenues of $44 million.  During the same period of the prior year, the group had an operating income of $2.9 million and total revenues were $49 million.  Through the first six months, the group lost $0.7 million and total revenues were $74 million.  Last year through June, the group earned $0.2 million on total revenues of $83 million.  

"We are pleased with our second quarter performance," CEO Mike Anderson stated.  "The Grain & Ethanol Group led our results with record performance in both the grain and ethanol areas.  Our Plant Nutrient Group also had a strong quarter.  As I review these results, I am again reminded that our strategy of purposeful diversification allows us to remain a strong and profitable company even when one or more of our business units is under performing," added Mr. Anderson.

The company will host a webcast on Thursday, August 5, 2010 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 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 at www.andersonsinc.com

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SOURCE The Andersons, Inc.