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The Andersons, Inc. Reports Higher 2nd Qtr. Earnings Revenues Up 4.6%; Net Income Up 8.3% EPS 99 cents vs. 89 cents Last Year

The Andersons, Inc. , today announced net income of $7.3 million, or $0.99 per diluted share, for the second quarter of 2001. In the comparable period last year, the company earned $6.7 million, or $0.89 per diluted share. Total revenues of $275.2 million were $12.1 million, or 4.6%, higher than the $263.1 million generated in the second quarter of 2000.

Net income for the first six months of the year was $6.5 million, or $0.88 per diluted share, with revenues at $495.5 million. Net income for the first half of 2000 amounted to $7.9 million, or $1.04 per diluted share, on revenues of $467.7 million. Excluding non-recurring items that occurred in the first quarter of each year and an accounting change that was described in the company's first quarter 2001 earnings release, year-to-date net income was $6.4 million, or $0.87 a share, this year, compared to $7.3 million, or $0.96 a share, in 2000.

The Andersons, Inc. is a respected leader and prominent regional player in grain merchandising. Its strong position in this basic business has enabled the company to diversify into other agribusiness operations, railcar leasing, turf care product manufacturing and general merchandise retailing. The company has been in business since 1947.


The company's Agriculture Group operates grain elevators, fertilizer distribution terminals and farm centers in Ohio, Michigan, Indiana and Illinois. Collectively, these facilities handle more than 150 million bushels of grain and 1.3 million tons of dry and liquid agricultural fertilizer products annually.

The group's grain, wholesale fertilizer and farm center businesses all achieved higher operating income in the second quarter and the first six months of 2001 vs. the comparable periods last year. Volume and margin increases were achieved by all three businesses, and income generated by the group's grain storage facilities remained strong.


The Rail Group leases and markets railroad cars and locomotives. It also repairs railcars and operates a custom steel fabrication business. The group's railcar marketing segment has grown significantly in the past few years and now controls a fleet of 4,940 railcars and 30 locomotives that are leased to shippers, railroads and fleet owners in a wide range of industries in the U.S. and Canada.

Because of a slowdown in demand for many types of rail equipment throughout the past two years, this group continues to focus primarily on short-term leasing opportunities rather than car sales or long-term leasing commitments. While there are indications that the cyclical downturn may be easing, the group incurred a loss for both the quarter and first half of 2001. Included in the second quarter result was a $1 million non-cash charge to recognize the lower value of certain assets.


The Processing Group manufactures turf and ornamental plant fertilizer and control products. With a national production and logistics infrastructure, it serves major retailers throughout the country and is the industry leader in premium fertilizer products for golf courses and other professional turf care markets. The group also produces chemical and feed-ingredient carriers, animal bedding, cat litter and ice-melter products.

Revenues were higher during the period because of an acquisition made last year. However, the group's operating results for the quarter and first six months were down. The consumer lawn industry was influenced negatively this year by several factors -- higher raw material prices, general economic uncertainty and unusual weather patterns in several regions of the U.S. this spring that curtailed homeowners' lawn care activities. At the same time, a downturn in the number of golf rounds played has caused golf course owners to reduce their costs wherever possible, including purchases of fertilizer and other turf care products. In response to these factors, the group has begun taking steps to significantly reduce the breakeven volume level in this business.


The Retail Group operates six large stores in Ohio. With a theme of More For Your Home™, these stores offer traditional home center merchandise including hardware, plumbing, electrical and building supplies, but also feature indoor and outdoor garden centers, extensive lines of housewares and domestics, automotive supplies, pet supplies, sporting goods, wine and a unique specialty food offering.

Same store sales were 2.6% higher in the second quarter this year compared to the same three-month period of 2000. Because of labor and other store operating cost increases, however, the group's second quarter operating income declined slightly. Given the softness experienced during the first quarter of 2001, the group's first half revenues and operating income both still trail last year's performance.


According to President and Chief Executive Officer Mike Anderson, "Several of our businesses have a strong seasonal orientation that makes the second quarter a key period for The Andersons. Frequently, the lion's share of our full-year income is generated during these three months. Our agriculture business is really on a roll, achieving excellent top and bottom-line growth. However, two other units are not having the same degree of success at the present time. Our rail business continues to work through the cyclical downturn we've described for some time, although there are indications that this business is beginning to rebound. Our biggest challenge is the double whammy the lawn business is experiencing this year with extremely tough economic circumstances in both the professional and consumer industry segments. The earnings growth we achieved overall for the second quarter once again demonstrates the benefit of our business diversification."

Recently, The Andersons paid a quarterly cash dividend of 6.5 cents per share to shareholders of record as of July 2, 2001. The company is authorized by its board of directors to continue to repurchase shares from time to time.

The company will host a webcast on July 26, 2001 at 11:00 A.M. EST, to discuss these second quarter results and the full-year earnings outlook. The webcast can be accessed at the company's website under the heading "Financial Information" or at .

This release contains forward-looking statements. 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.

  The Andersons, Inc. is located on the Internet at .

                            The Andersons, Inc.
                       Consolidated Balance Sheets

                                           June 30   December 31   June 30
             (in thousands)                  2001        2000        2000

    Cash and cash equivalents               $9,255     $13,138      $5,332
    Accounts receivable (net) and
     margin deposits                        56,234      55,475      58,513
    Inventories                            147,932     209,706     131,812
    Other current assets                    18,313      24,505      20,683
  Total current assets                     231,734     302,824     216,340

  Other assets                               7,312      10,020      11,111
  Railcar assets leased to others (net)     23,448      22,281      20,767
  Property, plant and equipment (net)       96,058      98,071      95,414
    Total                                 $358,552    $433,196    $343,632

  Liabilities and owners' equity
  Current liabilities:
    Notes payable                          $50,300     $71,300     $52,200
    Other current liabilities              119,767     176,264     117,531
  Total current liabilities                170,067     247,564     169,731

  Deferred items, long-term liabilities
   and minority interest                    15,874      15,637      12,441
  Long-term debt                            79,370      80,159      71,836
  Shareholders' equity                      93,241      89,836      89,624
    Total                                 $358,552    $433,196    $343,632

                           The Andersons, Inc.
                      Consolidated Statements of Income

                                   Three Months ended    Six Months ended
                                        June 30               June 30
  (in thousands, except for per
   share amounts)                    2001      2000       2001       2000

  Sales and merchandising revenues $275,248  $263,105   $495,480   $467,712
  Cost of sales and merchandising
   revenues                         226,988   218,247    412,105    387,800
  Gross profit                       48,260    44,858     83,375     79,912

  Operating, administrative and
   general expenses                  35,473    33,269     68,825     65,726
  Interest expense                    2,867     2,594      6,481      5,270
  Other income/gains:
    Other income                        792     1,112      1,377      2,122
    Gain on insurance settlement          -         -        338          -
    Gain on sale of business              -         -          -        907
  Income before income taxes and
    effect of accounting change      10,712    10,107      9,784     11,945
  Income taxes                        3,438     3,389      3,140      4,005
  Net income before cumulative
   effect of accounting change        7,274     6,718      6,644      7,940
  Cumulative effect of accounting
   change, net of income tax benefit      -         -       (185)         -
  Net income                         $7,274    $6,718     $6,459     $7,940

  Per common share:
    Basic earnings                    $1.00     $0.89      $0.88      $1.05
    Diluted earnings                  $0.99     $0.89      $0.88      $1.04
    Dividends paid                   $0.065    $0.060      $0.13      $0.12

  Weighted average shares
   outstanding-basic                  7,305     7,524      7,338      7,597
  Weighted average shares
   outstanding-diluted                7,319     7,533      7,351      7,605

                                Segment Data
                               (In thousands)

  Quarter ended June 30, 2001             Agriculture  Processing     Rail
  Revenues from external customers         $177,262     $33,537      $9,440
  Other income                                  310          80         (25)
    Total                                  $177,572     $33,617      $9,415

  Operating income (loss)                   $10,186     $(1,783)      $(628)

  Quarter ended June 30, 2000
  Revenues from external customers         $169,132     $31,259      $9,078
  Other income                                  308         100          17
    Total                                  $169,440     $31,359      $9,095

  Operating income (loss)                    $6,210         $80        $358

  Six Months ended June 30, 2001
  Revenues from external customers         $314,774     $75,783     $17,411
  Other income                                  498         176         (14)
  Gain on insurance settlement                  338           -           -
    Total                                  $315,272     $75,959     $17,397

  Operating income (loss)                   $13,515     $(2,026)      $(923)

  Six Months ended June 30, 2000
  Revenues from external customers         $294,178     $66,668     $15,552
  Other income                                  574         192         153
  Gain on sale of business                        -           -           -
    Total                                  $294,752     $66,860     $15,705

  Operating income (loss)                    $7,625      $1,780        $839

                                Segment Data
                               (In thousands)

  Quarter ended June 30, 2001               Retail       Other        Total
  Revenues from external customers         $55,009        $  -     $275,248
  Other income                                 199         228          792
    Total                                  $55,208        $228     $276,040

  Operating income (loss)                   $3,785       $(848)     $10,712

  Quarter ended June 30, 2000
  Revenues from external customers         $53,636        $  -     $263,105
  Other income                                 211         476        1,112
    Total                                  $53,847        $476     $264,217

  Operating income (loss)                   $3,864       $(405)     $10,107

  Six Months ended June 30, 2001
  Revenues from external customers         $87,512        $  -     $495,480
  Other income                                 334         383        1,377
  Gain on insurance settlement                   -           -          338
    Total                                  $87,846        $383     $496,857

  Operating income (loss)                     $792     $(1,574)      $9,784

  Six Months ended June 30, 2000
  Revenues from external customers         $88,825      $2,489     $467,712
  Other income                                 317         886        2,122
  Gain on sale of business                       -         907          907
    Total                                  $89,142      $3,375     $469,834

  Operating income (loss)                   $1,695          $6      $11,945


SOURCE: The Andersons, Inc.

Contact: Gary Smith of The Andersons, Inc., +1-419-891-6417