Astec Industries Reports Third Quarter 2016 Results

CHATTANOOGA, Tenn., Oct. 25, 2016 (GLOBE NEWSWIRE) — Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their third quarter and year to date ended September 30, 2016.

Net sales for the third quarter of 2016 were $247.8 million compared to $211.4 million for the third quarter of 2015, a 17% increase.  Earnings for the third quarter of 2016 were $6.8 million or $0.30 per diluted share compared to $2.3 million or $0.10 per diluted share in the third quarter of 2015, an increase of 200%.

Domestic sales increased 28% to $199.9 million for the third quarter of 2016 compared to $156.3 million for the third quarter of 2015.  International sales decreased 13% to $47.9 million for the third quarter of 2016 compared to $55.1 million for the third quarter of 2015.

Net sales for the first nine months of 2016 were $820.9 million compared to $768.1 million for the first nine months of 2015, a 7% increase.  Earnings for the first nine months of 2016 were $42.8 million or $1.85 per diluted share compared to $29.2 million or $1.26 per diluted share for the first nine months of 2015, a 47% increase. 

Domestic sales increased 20% to $676.3 million for the first nine months of 2016 compared to $562.0 million for the first nine months of 2015.  International sales were $144.6 million for the first nine months of 2016 compared to $206.1 million for the first nine months of 2015, a 30% decrease.

The Company’s domestic backlog increased 69% to $325.6 million at September 30, 2016 from $193.1 million at September 30, 2015.  The international backlog at September 30, 2016 was $63.7 million compared to $58.7 million at September 30, 2015, an increase of 9%.  Total backlog increased 55% to $389.3 million at September 30, 2016 from $251.8 million at September 30, 2015. 

Consolidated financial information for the quarter and nine months ended September 30, 2016 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 200% in the third quarter versus the third quarter of last year.  We were able to secure and ship orders at a more profitable rate during the quarter mainly due to favorable infrastructure and wood pellet equipment activity.”

Mr. Brock continued, “Despite our strong overall performance, we still face several challenges.  Low oil and natural gas prices have hurt our Energy Group sales.  The mining slowdown has hurt our Aggregate and Mining Group sales.  The strong U.S. Dollar continues to affect our ability to export from our U.S. based operations.  Nonetheless, our year-to-date revenues are up 7% and our year-to-date earnings are up 47% versus last year.  These positive results are mainly due to good domestic markets for our equipment targeted at the infrastructure and wood pellet industries and execution of our margin improvement plans at our operating subsidiaries. Finally, we are also pleased to report that our backlog is up 55% versus last year indicating continued strong demand for our products.”

Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 25, 2016, at 10:00 A.M. Eastern Time to review its September 30, 2016 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 8, 2016 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Account #286, Conference ID# 10099.  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, production and combustion 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 strong domestic demand, low oil prices, the global mining slow down, and the strong U.S. Dollar.  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, 2015. 

Astec Industries, Inc.    
Condensed Consolidated Balance Sheets    
(in thousands)    
(unaudited)    
     
  Sept 30 Sept 30    
  2016 2015    
Assets        
Current assets        
Cash and cash equivalents $ 52,474   $ 13,985      
Investments   713     1,834      
Receivables, net   111,753     105,226      
Inventories   399,718     384,531      
Prepaid expenses and other   25,909     50,398      
Total current assets   590,567     555,974      
Property and equipment, net   178,167     170,508      
Other assets   93,105     60,805      
Total assets $ 861,839   $ 787,287      
Liabilities and equity        
Current liabilities        
Accounts payable – trade $ 53,496   $ 46,406      
Other current liabilities   136,710     91,568      
Total current liabilities   190,206     137,974      
Non-current liabilities   26,702     36,919      
Total equity   644,931     612,394      
Total liabilities and equity $ 861,839   $ 787,287      
         
         
         
         
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
  2016 2015 2016 2015
Net sales $ 247,752   $ 211,350   $ 820,868   $ 768,141  
Cost of sales   192,363     166,212     620,071     594,724  
Gross profit   55,389     45,138     200,797     173,417  
Selling, general, administrative & engineering expenses   43,950     41,023     132,716     128,136  
Income from operations   11,439     4,115     68,081     45,281  
Interest expense   264     505     1,057     1,222  
Other   508     844     1,443     3,212  
Income before income taxes   11,683     4,454     68,467     47,271  
Income taxes   4,845     2,162     25,694     18,070  
Net income attributable to controlling interest $ 6,838   $ 2,292   $ 42,773   $ 29,201  
         
         
         
         
Earnings per Common Share        
Net income attributable to controlling interest        
Basic $ 0.30   $ 0.10   $ 1.86   $ 1.27  
Diluted $ 0.30   $ 0.10   $ 1.85   $ 1.26  
         
         
Weighted average common shares outstanding        
Basic   23,001     22,943     22,989     22,930  
Diluted   23,145     23,121     23,138     23,118  
         

 

Astec Industries, Inc.  
Segment Revenues and Profits  
For the three months ended September 30, 2016 and 2015  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Corporate Total  
2016 Revenues   109,227     85,819     52,706         247,752    
2015 Revenues   85,625     80,549     45,176         211,350    
Change $   23,602     5,270     7,530         36,402    
Change %   27.6 %   6.5 %   16.7 %       17.2 %  
             
2016 Gross Profit   24,929     20,935     9,473     52     55,389    
2016 Gross Profit %   22.8 %   24.4 %   18.0 %       22.4 %  
2015 Gross Profit   16,104     19,226     9,794     14     45,138    
2015 Gross Profit %   18.8 %   23.9 %   21.7 %       21.4 %  
Change   8,825     1,709     (321 )   38     10,251    
             
2016 Profit (Loss)   9,858     7,651     805     (11,610 )   6,704    
2015 Profit (Loss)   2,116     3,790     1,941     (6,853 )   994    
Change $   7,742     3,861     (1,136 )   (4,757 )   5,710    
Change %   365.9 %   101.9 %   (58.5 %)   (69.4 %)   574.4 %  
             
             
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    
    2016 2015 Change $    
Total profit for all segments $ 6,704   $ 994   $ 5,710      
Recapture of intersegment profit   131     964     (833 )    
Net loss attributable to non-controlling interest   3     334     (331 )    
Net income attributable to controlling interest $ 6,838   $ 2,292   $ 4,546      
             
             
Astec Industries, Inc.  
Segment Revenues and Profits  
For the nine months ended September 30, 2016 and 2015  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Corporate Total  
2016 Revenues   414,817     277,393     128,658         820,868    
2015 Revenues   336,768     285,790     145,583         768,141    
Change $   78,049     (8,397 )   (16,925 )       52,727    
Change %   23.2 %   (2.9 %)   (11.6 %)       6.9 %  
             
2016 Gross Profit   101,349     72,224     27,069     155     200,797    
2016 Gross Profit %   24.4 %   26.0 %   21.0 %       24.5 %  
2015 Gross Profit   74,292     70,182     28,912     31     173,417    
2015 Gross Profit %   22.1 %   24.6 %   19.9 %       22.6 %  
Change   27,057     2,042     (1,843 )   124     27,380    
             
2016 Profit (Loss)   51,394     28,135     3,237     (40,745 )   42,021    
2015 Profit (Loss)   29,472     25,441     2,805     (29,154 )   28,564    
Change $   21,922     2,694     432     (11,591 )   13,457    
Change %   74.4 %   10.6 %   15.4 %   (39.8 %)   47.1 %  
             
             
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    
    2016 2015 Change $    
Total profit for all segments $ 42,021   $ 28,564   $ 13,457      
Recapture (elimination) of intersegment profit   633     (32 )   665      
Net loss attributable to non-controlling interest   119     669     (550 )    
Net income attributable to controlling interest $ 42,773   $ 29,201   $ 13,572      
             
             
Astec Industries, Inc.    
Backlog by Segment    
September 30, 2016 and 2015    
(in thousands)    
(unaudited)    
  Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Total    
2016 Backlog   286,895     61,409     40,956     389,260      
2015 Backlog   145,073     68,110     38,592     251,775      
Change $   141,822     (6,701 )   2,364     137,485      
Change %   97.8 %   (9.8 %)   6.1 %   54.6 %    
             
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

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