New ethanol business boosts income at The Andersons

by Staff
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MAUMEE, OHIO — The Andersons, Inc. has reported year-end net income of $36,347,000, or $2.27 per share on the common stock, an increase of 39% from $26,087,000 in 2005. Net revenue for the year totaled $1,458,053,000, up 12% from $1,296,949,000 in 2005.

Fourth-quarter net income in 2006 fell 10% to $13,778,000 from $15,336,000 in the fourth quarter of 2005. Total revenues for the fourth quarter were $463,415,000, up 21% from $384,421,000 in the same period last year.

The Grain and Ethanol Group's full-year operating income of $27.9 million in 2006 established a new record, $15.3 million higher than the $12.6 million it achieved in 2005, the group's previous best full-year performance. Operating income of $12.3 million in the fourth quarter of 2006 was below the $14.8 million the group generated a year earlier. The number of grain bushels delivered to The Andersons' elevators increased slightly this year. Total grain gross profit and operating income also improved for the year, despite reduced earnings from grain storage attributable in part to higher interest costs.

The group's emerging ethanol business continued to register income growth during the most recent quarter. The group's Albion, Mich. ethanol plant, in which The Andersons, Inc. is a significant investor, began production during the third quarter and shipped ethanol and distillers dried grain to customers throughout the fourth quarter of 2006.

Construction of its Clymers, Ind., plant, in which the company also is a significant investor, is progressing well and is scheduled to start producing ethanol early in the second quarter of 2007. Recently, construction also began on a Greenville, Ohio, plant, which is expected to begin operations in early 2008.

The group's investment in Lansing Trade Group, L.L.C. exceeded its 2005 fourth-quarter income in the most recent three-month period and achieved significant income growth for the full year.

"We've been making a lot of changes throughout the company during the past two years, and they're showing some very positive results," said Mike Anderson, president and chief executive officer. "Our strategic decision to enter the ethanol business is definitely having an impact, as is our continued growth in Rail, our investment in Lansing Trade Group, restructuring in Turf and Specialty, and other process improvements throughout the company.

"As a result, in spite of the really tough market realities encountered by our Plant Nutrient Group this year, we beat our previous net income record by 39%. This successful growth benefits all of our constituents — our customers, our employees, our communities, and of course, our shareholders. With the Clymers, Ind., ethanol plant scheduled to begin production two months from now, and continued growth in our rail business, we look forward to continued positive progress in the coming year."

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