Market Overview

Astec Industries Reports Second Quarter 2017 Results

Share:

CHATTANOOGA, Tenn., July 25, 2017 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (NASDAQ:ASTE) today reported results for their second quarter and year to date ended June 30, 2017. 

Net sales for the second quarter of 2017 were $301.9 million compared to $294.4 million for the second quarter of 2016, a 3% increase. Earnings for the second quarter of 2017 were $14.4 million or $0.62 per diluted share compared to $18.2 million or $0.79 per diluted share for the second quarter of 2016, a decrease of 22% per diluted share. 

Domestic sales decreased 2% to $236.9 million for the second quarter of 2017 from $242.2 million for the second quarter of 2016. International sales were $65.0 million for the second quarter of 2017 compared to $52.2 million for the second quarter of 2016, an increase of 25%.      

Net sales for the first half of 2017 were $620.3 million compared to $573.1 million for the first half of 2016, an 8% increase. Earnings for the first half of 2017 were $29.5 million or $1.27 per diluted share compared to $35.9 million or $1.55 per diluted share for the first half of 2016, a decrease of 18% per diluted share. 

Domestic sales increased 3% to $490.4 million for the first half of 2017 from $476.4 million for the first half of 2016. International sales were $129.9 million for the first half of 2017 compared to $96.7 million for the first half of 2016, an increase of 34%.

The Company's backlog at June 30, 2017 was $352.4 million compared to $371.3 million at June 30, 2016, a decrease of $18.9 million or 5%. Domestic backlog decreased 13% to $276.2 million at June 30, 2017 from $316.4 million at June 30, 2016. The international backlog at June 30, 2017 was $76.2 million compared to $54.9 million at June 30, 2016, an increase of 39%. All prior year backlog amounts have been recast to include the backlog of Power Flame Incorporated which was acquired on August 1, 2016.

Excluding pellet plant backlogs of $65.1 million and $144.4 million at June 30, 2017 and 2016 respectively, the Company's June 30, 2017 backlog increased $60.4 million or 27% compared to June 30, 2016. 

Consolidated financial information for the second quarter and year to date ended June 30, 2017 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement, Benjamin G. Brock, Chief Executive Officer, stated, "Although we were not pleased with our net income for the quarter,  we were pleased that we were able to grow sales while also shipping several new products during the quarter. While the costs associated with building new products and getting them going in the field negatively affected our results as we expected, significantly lower than expected margins on pellet plant installation were our primary disappointment for the quarter."

Mr. Brock continued, "Excluding pellet plants, our backlog is up 27% versus last year. We are pleased that, excluding pellet plants, each of our financial reporting groups increased backlog versus last year. Non-pellet plant backlog increased both in domestic and international markets. Domestically, we continue to experience a good market for our products, mainly as a result of the federal highway bill and other state and local level funding mechanisms. Internationally, our strategy of keeping our sales and service structure in place despite the challenge of the strong U.S. Dollar, which increases our sales prices globally for export equipment, has allowed us to earn orders mainly as a result of pent up demand meeting improved global market conditions."

In closing, Mr. Brock commented, "Given our current backlog and quote activity, we are optimistic on our outlook for the balance of 2017."

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on Tuesday, July 25, 2017, at 10:00 A.M. Eastern Time to review its second quarter 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, August 8, 2017 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #15968. A transcript 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, wood pellet production 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 federal highway bill, sales of new products, 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, gas 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, 2016. 

         
Astec Industries, Inc.    
Condensed Consolidated Balance Sheets    
(in thousands)    
(unaudited)    
     
  June 30 June 30    
    2017   2016    
Assets        
Current assets        
Cash and cash equivalents $   52,107 $   68,473    
Investments     2,031     1,889    
Receivables, net     149,306     127,490    
Inventories     381,323     379,477    
Prepaid expenses and other     26,320     29,702    
Total current assets     611,087     607,031    
Property and equipment, net     182,205     173,080    
Other assets     85,693     66,517    
Total assets $   878,985 $   846,628    
Liabilities and equity        
Current liabilities        
Accounts payable - trade $   65,188 $   54,498    
Other current liabilities     110,670     124,720    
Total current liabilities     175,858     179,218    
Non-current liabilities     24,818     27,836    
Total equity     678,309     639,574    
Total liabilities and equity $   878,985 $   846,628    
         
         
         
         
Astec Industries, Inc.    
Condensed Consolidated Statements of Income    
(in thousands, except per share data)    
(unaudited)    
     
  Three Months Ended Six Months Ended
  June 30 June 30
    2017   2016   2017   2016
Net sales $   301,909 $   294,394 $   620,310 $   573,116
Cost of sales     236,385     220,942     479,014     427,708
Gross profit     65,524     73,452     141,296     145,408
Selling, general, administrative & engineering expenses     44,220     44,961     97,342     88,766
Income from operations     21,304     28,491     43,954     56,642
Interest expense     185     326     450     793
Other     322     327     874     935
Income before income taxes     21,441     28,492     44,378     56,784
Income taxes     7,021     10,300     14,838     20,849
Net income attributable to controlling interest  $   14,420 $   18,192 $   29,540 $   35,935
         
         
         
         
Earnings per Common Share        
Net income attributable to controlling interest        
  Basic $   0.63 $   0.79 $   1.28 $   1.56
  Diluted $   0.62 $   0.79 $   1.27 $   1.55
         
         
Weighted average common shares outstanding        
  Basic     23,026     22,999     23,020     22,982
  Diluted     23,183     23,135     23,179     23,135
         

 

Astec Industries, Inc.  
Segment Revenues and Profits  
For the three months ended June 30, 2017 and 2016  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate and Mining Group Energy
Group
Corporate Total  
2017 Revenues   143,106       107,118       51,685       -      301,909    
2016 Revenues   152,476       99,085       42,833       -      294,394    
Change $   (9,370 )     8,033       8,852       -      7,515    
Change % (6.1 %)   8.1 %   20.7 %     -    2.6 %  
             
2017 Gross Profit   26,820       25,791       12,864       49     65,524    
2017 Gross Profit % 18.7 %   24.1 %   24.9 %     -    21.7 %  
2016 Gross Profit   36,583       26,141       10,514       214     73,452    
2016 Gross Profit % 24.0 %   26.4 %   24.5 %     -    25.0 %  
Change   (9,763 )     (350 )     2,350       (165 )   (7,928 )  
             
2017 Profit (Loss)   9,893       11,367       3,165       (10,260 )   14,165    
2016 Profit (Loss)   19,673       10,947       2,626       (14,912 )   18,334    
Change $   (9,780 )     420       539       4,652     (4,169 )  
Change % (49.7 %)   3.8 %   20.5 %   31.2 % (22.7 %)  
             
             
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 June 30    
      2017     2016   Change $    
Total profit for all segments $   14,165   $   18,334   $   (4,169 )    
Recapture (elimination) of intersegment profit     194       (193 )     387      
Net loss attributable to non-controlling interest     61       51       10      
Net income attributable to controlling interest  $   14,420   $   18,192   $   (3,772 )    
             
             
Astec Industries, Inc.  
Segment Revenues and Profits  
For the six months ended June 30, 2017 and 2016  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate and Mining Group Energy
Group
Corporate Total  
2017 Revenues   308,349       207,731       104,230       -      620,310    
2016 Revenues   305,590       191,573       75,953       -      573,116    
Change $   2,759       16,158       28,277       -      47,194    
Change % 0.9 %   8.4 %   37.2 %     -    8.2 %  
             
2017 Gross Profit   64,621       50,814       25,751       110     141,296    
2017 Gross Profit % 21.0 %   24.5 %   24.7 %     -    22.8 %  
2016 Gross Profit   76,420       51,289       17,596       103     145,408    
2016 Gross Profit % 25.0 %   26.8 %   23.2 %     -    25.4 %  
Change   (11,799 )     (475 )     8,155       7     (4,112 )  
             
2017 Profit (Loss)   28,073       19,795       5,894       (24,689 )   29,073    
2016 Profit (Loss)   41,536       20,485       2,433       (29,137 )   35,317    
Change $   (13,463 )     (690 )     3,461       4,448     (6,244 )  
Change % (32.4 %)   (3.4 %)   142.3 %   15.3 % (17.7 %)  
             
             
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):  
             
    Six months ended June 30    
      2017     2016   Change $    
Total profit for all segments $   29,073   $   35,317   $   (6,244 )    
Recapture of intersegment profit     366       502       (136 )    
Net loss attributable to non-controlling interest     101       116       (15 )    
Net income attributable to controlling interest  $   29,540   $   35,935   $   (6,395 )    
             
             
Astec Industries, Inc.    
Backlog by Segment    
June 30, 2017 and 2016    
(in thousands)    
(unaudited)    
  Infrastructure
Group
Aggregate and Mining Group Energy
Group
Total    
2017 Backlog   216,797       92,366       43,192       352,355      
2016 Backlog   272,364       59,522       39,432       371,318      
Change $   (55,567 )     32,844       3,760       (18,963 )    
Change % (20.4 %)   55.2 %   9.5 %   (5.1 %)    
             


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

Primary Logo

View Comments and Join the Discussion!
 

Partner Center