Astec Industries Reports Third Quarter 2015 Results

CHATTANOOGA, Tenn., Oct. 20, 2015 (GLOBE NEWSWIRE) — Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their third quarter ended September 30, 2015. 

Net sales for the third quarter of 2015 were $211.4 million compared to $220.2 million for the third quarter of 2014, a 4% decrease.  Earnings for the third quarter of 2015 were $2.3 million or $0.10 per diluted share compared to $1.9 million or $0.08 per diluted share in the third quarter of 2014, an increase of 25%.

Domestic sales increased 10% to $156.3 million for the third quarter of 2015 compared to $142.6 million for the third quarter of 2014.  International sales decreased 29% to $55.1 million for the third quarter of 2015 compared to $77.6 million for the third quarter of 2014.

Net sales for the first nine months of 2015 were $768.1 million compared to $736.1 million for the first nine months of 2014, a 4% increase.  Earnings for the first nine months of 2015 were $29.2 million or $1.26 per diluted share compared to $26.0 million or $1.12 per diluted share in the first nine months of 2014, a 12% increase. 

Domestic sales increased 12% to $562.0 million for the first nine months of 2015 compared to $502.7 million for the first nine months of 2014.  International sales were $206.1 million for the first nine months of 2015 compared to $233.4 million for the first nine months of 2014, a 12% decrease.

The Company’s domestic backlog decreased 1%, from $189.2 million at September 30, 2014 to $187.5 million at September 30, 2015.  The international backlog at September 30, 2015 was $58.1 million compared to $105.8 million at September 30, 2014 for a decrease of 45%.  Total backlog decreased 17% to $245.6 million at September 30, 2015 from $295.0 million at September 30, 2014. 

Consolidated financial information for the quarter and nine months ended September 30, 2015 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement, Benjamin G. Brock, President and Chief Executive Officer, stated, “We were pleased to improve our earnings by 25% in the third quarter versus the third quarter of last year, especially given the current headwinds we are facing, including low oil prices, the global mining slow down, the strong U.S. Dollar, and the absence of a long-term highway bill in the United States.”

Mr. Brock continued, “Low oil prices have hurt our Energy Group sales.  The mining slowdown has hurt our Aggregate and Mining Group sales.  The strong U.S. Dollar has hurt our international sales and the lack of a long-term highway bill has hurt all of our groups.”

Mr. Brock concluded, “Despite these headwinds, our year-to-date revenues are up 4% and our year-to-date earnings are up 12% versus last year.  We have accomplished these increases through a variety of efforts, but two that stand out are our new product offerings that have allowed us to secure many of the orders we have shipped this year and our lean manufacturing initiatives which have improved margins and earnings.  We remain committed to new product releases in each of our groups in order to earn more business moving ahead.  Eventually the headwinds will subside and we will be well positioned to take advantage when they do.”

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on October 20, 2015, at 10:00 A.M. Eastern Time to review its September 30, 2015 results as well as current business conditions.  The number to call for this interactive teleconference is (877) 407-9210.  International callers should dial (201) 689-8049.   Please reference Astec Industries.

The company will also provide an online Web simulcast and rebroadcast of the conference call.  The live broadcast of Astec’s conference call will be available online at the Company’s website:  www.astecindustries.com/conferencecalls. An archived webcast will be available for 90 days at www.astecindustries.com.

A replay of the conference call will be available through midnight on Tuesday, November 3, 2015 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 13622090.  A transcription of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within 5 business days after the call.

Astec Industries, Inc. is a manufacturer of specialized equipment for asphalt road building; aggregate processing; oil, gas and water well drilling; and wood processing.  Astec’s manufacturing operations are divided into three primary business segments:  road building and related equipment (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and equipment for the extraction and production of fuels, biomass production, and water drilling equipment (Energy Group). 

The information contained in this press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the future performance of the Company, including statements about the effects on the Company from low oil prices, the global mining slow down, the strong U.S. Dollar, and the absence of a long-term highway bill in the United States.  These forward-looking statements reflect management’s expectations and are based upon currently available information, and the Company undertakes no obligation to update or revise such statements.  These statements are not guarantees of performance and are inherently subject to risks and uncertainties, many of which cannot be predicted or anticipated.  Future events and actual results, financial or otherwise, could differ materially from those expressed in or implied by the forward-looking statements.  Important factors that could cause future events or actual results to differ materially include:  general uncertainty in the economy, oil and liquid asphalt prices, rising steel prices, decreased funding for highway projects, the relative strength/weakness of the dollar to foreign currencies, production capacity, general business conditions in the industry, demand for the Company’s products, seasonality and cyclicality in operating results, seasonality of sales volumes or lower than expected sales volumes, lower than expected margins on custom equipment orders, competitive activity, tax rates and the impact of future legislation thereon, and those other factors listed from time to time in the Company’s reports filed with the Securities and Exchange Commission, including but not limited to the Company’s annual report on Form 10-K for the year ended December 31, 2014. 

         
Astec Industries, Inc.    
Condensed Consolidated Balance Sheets    
(in thousands)    
(unaudited)    
     
  Sept 30 Sept 30    
    2015     2014      
Assets        
Current assets        
Cash and cash equivalents $   13,985   $   13,820      
Investments     1,834       1,903      
Receivables, net     105,226       108,844      
Inventories     384,531       370,436      
Prepaid expenses and other     50,398       36,629      
Total current assets     555,974       531,632      
Property and equipment, net     170,508       190,395      
Other assets     60,805       66,554      
Total assets $   787,287   $   788,581      
Liabilities and equity        
Current liabilities        
Accounts payable – trade $   46,406   $   53,034      
Other current liabilities     91,568       97,059      
Total current liabilities     137,974       150,093      
Non-current liabilities     36,919       40,139      
Total equity     612,394       598,349      
Total liabilities and equity $   787,287   $   788,581      
         
         
Astec Industries, Inc.    
Condensed Consolidated Statements of Income    
(in thousands, except per share data)    
(unaudited)    
     
  Three Months Ended Nine Months Ended
  Sept 30 Sept 30
    2015     2014     2015     2014  
Net sales $   211,350   $   220,157   $   768,141   $   736,086  
Cost of sales     166,212       176,896       594,724       573,890  
Gross profit     45,138       43,261       173,417       162,196  
Selling, general, administrative & engineering expenses     41,023       38,867       128,136       122,539  
Income from operations     4,115       4,394       45,281       39,657  
Interest expense     505       193       1,222       375  
Other     844       860       3,212       2,410  
Income before income taxes     4,454       5,061       47,271       41,692  
Income taxes     2,162       3,145       18,070       15,734  
Net income attributable to controlling interest  $   2,292   $   1,916   $   29,201   $   25,958  
         
         
Earnings per Common Share        
Net income attributable to controlling interest        
  Basic $   0.10   $   0.08   $   1.27   $   1.14  
  Diluted $   0.10   $   0.08   $   1.26   $   1.12  
         
         
Weighted average common shares outstanding        
  Basic     22,943       22,830       22,930       22,813  
  Diluted     23,121       23,109       23,118       23,103  
         

 

Astec Industries, Inc.  
Segment Revenues and Profits  
For the three months ended September 30, 2015 and 2014  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate
and Mining
Group
Energy
Group
Corporate Total  
2015 Revenues     85,625       80,549       45,176       –        211,350    
2014 Revenues     78,698       88,177       53,282       –        220,157    
Change $     6,927       (7,628 )     (8,106 )     –        (8,807 )  
Change %   8.8 %   (8.7 )%   (15.2 )%     –      (4.0 )%  
             
2015 Gross Profit     16,104       19,226       9,794       14       45,138    
2015 Gross Profit %   18.8 %   23.9 %   21.7 %     –      21.4 %  
2014 Gross Profit     11,367       21,604       10,277       13       43,261    
2014 Gross Profit %   14.4 %   24.5 %   19.3 %     –      19.7 %  
Change     4,737       (2,378 )     (483 )     1       1,877    
             
2015 Profit (Loss)     2,116       3,790       1,941       (6,853 )     994    
2014 Profit (Loss)     520       6,806       2,789       (7,137 )     2,978    
Change $     1,596       (3,016 )     (848 )     284       (1,984 )  
Change %   306.9 %   (44.3 )%   (30.4 )%   4.0 %   (66.6 )%  
             
Segment revenues are reported net of intersegment revenues.  Segment gross profit is net of profit on intersegment revenues. 
A reconciliation of total segment profits to the Company’s net income attributable to controlling interest is as follows (in thousands):
 
             
    Three months ended September 30    
      2015     2014   Change $    
Total profit for all segments $   994   $   2,978   $   (1,984 )    
Recapture (elimination) of intersegment profit     964       (1,212 )     2,176      
Net loss attributable to non-controlling interest     334       150       184      
Net income attributable to controlling interest  $   2,292   $   1,916   $   376      
             
             
Astec Industries, Inc.  
Segment Revenues and Profits  
For the nine months ended September 30, 2015 and 2014  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Corporate Total  
2015 Revenues     336,768       285,790       145,583       –        768,141    
2014 Revenues     296,074       287,976       152,036       –        736,086    
Change $     40,694       (2,186 )     (6,453 )     –        32,055    
Change %   13.7 %   (0.8 )%   (4.2 )%     –      4.4 %  
             
2015 Gross Profit     74,292       70,182       28,912       31       173,417    
2015 Gross Profit %   22.1 %   24.6 %   19.9 %     –      22.6 %  
2014 Gross Profit     59,135       70,722       32,309       30       162,196    
2014 Gross Profit %   20.0 %   24.6 %   21.3 %     –      22.0 %  
Change     15,157       (540 )     (3,397 )     1       11,221    
             
2015 Profit (Loss)     29,472       25,441       2,805       (29,154 )     28,564    
2014 Profit (Loss)     21,124       27,065       7,659       (27,578 )     28,270    
Change $     8,348       (1,624 )     (4,854 )     (1,576 )     294    
Change %   39.5 %   (6.0 )%   (63.4 )%   (5.7 )%   1.0 %  
             
             
Segment revenues are reported net of intersegment revenues.  Segment gross profit is net of profit on intersegment    
revenues.  A reconciliation of total segment profits to the Company’s net income attributable to controlling interest is as follows (in thousands):  
             
    Nine months ended September 30    
      2015     2014   Change $    
Total profit for all segments $   28,564   $   28,270   $   294      
Elimination of intersegment profit     (32 )     (2,468 )     2,436      
Net loss attributable to non-controlling interest     669       156       513      
Net income attributable to controlling interest  $   29,201   $   25,958   $   3,243      
             
             
Astec Industries, Inc.    
Backlog by Segment    
September 30, 2015 and 2014    
(in thousands)    
(unaudited)    
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Total    
2015 Backlog     145,073       68,110       32,432       245,615      
2014 Backlog     135,895       80,978       78,156       295,029      
Change $     9,178       (12,868 )     (45,724 )     (49,414 )    
Change %   6.8 %   (15.9 )%   (58.5 )%   (16.7 )%    
             

 

CONTACT: For Additional Information Contact:
Benjamin G. Brock
Chief Executive Officer
Phone: (423) 867-4210
Fax: (423) 867-4127
E-mail: bbrock@astecindustries.com
or
David C. Silvious
Vice President and Chief Financial Officer
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: dsilvious@astecindustries.com
or 
Stephen C. Anderson
Vice President, Director of Investor Relations & Corporate Secretary
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: sanderson@astecindustries.com