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The Andersons, Inc. Reports 3rd-Qtr. & Year-To-Date Results; Net Income for First Nine Months Up 9.1 Percent
EPS 61 Cents Vs. 57 Cents for First Nine Months of '98

The Andersons, Inc. , today announced a net loss of $2.5 million, or $0.32 per diluted share, for the third quarter of 1999, $1.5 million more than the loss of $972,000, or $0.12 per diluted share, in the comparable period last year. Because of the seasonal nature of several of its businesses, the company normally experiences a loss in the third quarter. Net income for the first nine months of 1999 rose 9.1 percent to $5.0 million, or $0.61 per diluted share. In 1998, net income through September totaled $4.6 million, or $0.57 per diluted share. The company's 12-month-trailing EPS was $1.25 compared with $1.24 at September 30, 1998.

The nine-month net income increase was achieved despite a 13.7 percent decrease in revenues to $636 million from $737 million during the comparable period in 1998. In the third quarter, revenues of $175 million were 24.3 percent less than last year's $231 million. A significant portion of the company's revenues are generated by its grain business and are heavily influenced by grain prices. Because operating income in a commodity-based business does not correlate directly with grain prices or revenue, changes in The Andersons' total revenues are not necessarily indicative of net income trends.


The company's Agriculture Group operates grain elevators and wholesale fertilizer distribution facilities in four eastern corn belt states. Collectively these facilities handle about 150 million bushels of grain and one million tons of dry and liquid agricultural fertilizer products annually. The group also operates 14 farm centers in the region.

The group's operating performance in the third quarter was comparable to the 1998 period. Expense increases associated with additional fertilizer facilities and volume-related wholesale fertilizer gross-profit reductions this year were mostly offset by lower operating costs at the group's grain elevators. Despite weakness in parts of U.S. agriculture, the grain elevator segment was quite strong due to the need to store sizable carryover grain stocks. Fertilizer revenues declined because farmers reduced their fertilizer use as a result of lower grain prices. Also, the disruption in rail traffic since the Conrail divestiture is impacting the flow of grain between the group's farmers and end-users.


The Manufacturing Group repairs, sells and leases various types of railcars and operates a custom steel fabrication business. This business has achieved dramatic revenue and income growth in the past few years and now controls a fleet of about 3,800 railcars.

Railcar lease rates in several industries are somewhat weak at the present time, and railcar market values are experiencing a cyclical downturn. As a result, the group's 1999 third-quarter revenues and operating income, though strong, were lower than the year-earlier period.


The Processing Group produces granular lawn fertilizer products for major retailers throughout the country as well as professional lawn-care and golf course markets. It also produces ice-melt products, corncob-based chemical and feed-ingredient carriers and animal bedding and litter products.

The group's lawn-products segment continued to achieve volume and revenue growth in the 1999 third quarter versus the comparable period in 1998. Operating income declined somewhat, however, because of the significant investment being made to increase productivity at the company's Maumee, Ohio, plant, and start-up costs associated with the addition of manufacturing and distribution facilities in eastern Pennsylvania and Alabama.


This group operates six large retail stores in Ohio. The company characterizes its retail concept as "More For Your Home." A traditional home center with plumbing, electrical and building supplies, etc., it also features indoor and outdoor garden centers, extensive lines of housewares and domestics, pet supplies, automotive supplies, sporting goods, and a unique specialty food offering.

In the third quarter of 1999, the Retail Group's same-store sales and gross margins were virtually equivalent to year-earlier levels. Profitability was slightly impacted by increased wages resulting from the tight labor market.


According to President and Chief Executive Officer Mike Anderson, "The third quarter is always a soft period for us. While virtually all of our third-quarter decline from a year earlier occurred in our Manufacturing and Processing businesses, we continue to remain excited about both of these units. Although Manufacturing's results are down, we believe this is a growth sector, and we continue to add to our fleet of railcars. In our Processing Group, the drop in income was purposeful and represents an essential down payment on our ability to support the growth we are experiencing. We're still cautious about earnings expectations for the balance of the year since we will continue to experience these one-time costs and will be handling a slightly smaller and dryer than normal grain crop."

The Andersons, Inc. paid quarterly cash dividends of $0.05 per share in the first three quarters of this year. In 1998, the quarterly dividend was $0.04. The company continues to repurchase shares on the open market from time to time.

The Andersons, Inc. is a respected leader and dominant regional player in grain merchandising. Its strong position in this basic business has allowed the company to diversify into other agribusiness operations, processing and railcar leasing businesses, and general merchandise retailing. The company has been in operation since 1947.

This release contains forward-looking statements, including statements with respect to anticipated revenues, adequacy of cash flows and profitability. These statements involve risks and uncertainties that could cause actual results to differ materially, including, without limitation, 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.

For further information regarding The Andersons free of charge via fax dial1-800-PRO-INFO and enter company code "ANDE."

                           The Andersons, Inc.
                  Consolidated Statements of Operations
                             Three Months ended        Nine Months ended
                                September 30             September 30
  (in thousands, except for
   per share amounts)        1999         1998         1999         1998
  Sales and merchandising
    revenues               $173,911     $229,216     $633,123     $733,236
  Other income                  763        1,576        2,631        3,584
    Total                   174,674      230,792      635,754      736,820

  Cost of sales and
    merchandising revenues  139,984      193,875      510,417      617,281

  Gross profit               34,690       36,917      125,337      119,539

  Operating, administrative
    and general expenses     35,866       36,225      111,202      106,163
  Interest expense            2,567        2,153        6,685        6,497

    Total                    38,433       38,378      117,887      112,660

  Income (loss) before
    income taxes             (3,743)      (1,461)       7,450        6,879
  Income taxes               (1,231)        (489)       2,458        2,305

  Net income (loss)         $(2,512)       $(972)      $4,992       $4,574

  Per common share:
       Basic earnings (loss) $(0.32)      $(0.12)       $0.62        $0.57
       Diluted earnings
        (loss)               $(0.32)      $(0.12)       $0.61        $0.57

       Dividends paid         $0.05        $0.04        $0.15        $0.12

  Weighted average shares
    outstanding-basic         7,968        8,145        8,066        8,033

  Weighted average shares
    outstanding-diluted       7,968        8,145        8,205        8,078

                           The Andersons, Inc.
                       Consolidated Balance Sheets
  (in thousands)                                September 30   December 31
                                                    1999          1998
                                                 (unaudited)    (audited)

  Current assets:
      Cash and cash equivalents                     $5,026       $3,253
  Accounts receivable:
      Trade accounts and notes receivable (net)     44,409       62,647
      Margin deposits                                5,062          248

      Total                                         49,471       62,895
  Inventories                                      212,065      184,990
  Deferred income taxes                              2,629        4,634
  Prepaid expenses                                   2,996        5,502

  Total current assets                             272,187      261,274

  Other assets:
      Notes receivable (net) and other assets        6,652        8,435
      Investments in and advances to affiliates      1,004        1,057

      Total                                          7,656        9,492
  Property, plant and equipment (net)               93,882       90,057

      Total                                       $373,725     $360,823

  Liabilities and owners' equity
  Current liabilities:
      Notes payable                                $95,000       $7,700
      Accounts payable for grain                    33,308       88,978
      Other accounts payable                        62,846       75,301
      Accrued expenses                              12,012       17,079
      Current maturities of long-term debt           5,407        6,318

  Total current liabilities                        208,573      195,376

  Pension and postretirement benefits                2,705        3,113
  Long-term debt                                    70,027       71,565
  Deferred income taxes                              7,333        7,330
  Minority interest                                  1,205          705

  Owners' equity                                    83,882       82,734

      Total                                       $373,725     $360,823

SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., 419-891-6417; or Marilyn
Windsor, 312-640-6692, or Lisa Fortuna, 312-640-6779, both of the Financial
Relations Board