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Astec Industries Reports Fourth Quarter 2017 Results

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CHATTANOOGA, Tenn., Feb. 20, 2018 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (NASDAQ:ASTE) today reported results for their fourth quarter and year ended December 31, 2017. 

Net sales for the fourth quarter of 2017 were $312.4 million compared to $326.6 million for the fourth quarter of 2016, a 4.3% decrease. Domestic sales decreased 7.4% to $245.4 million for the fourth quarter of 2017 from $265.0 million for the fourth quarter of 2016.  International sales were $67.0 million for the fourth quarter of 2017 compared to $61.6 million for the fourth quarter of 2016, an increase of 8.7%.

Earnings for the fourth quarter of 2017 were $10.9 million, or $0.47 per share, including an income tax benefit from U.S. Tax Reform legislation of $1.1 million, compared to $12.4 million, or $0.53 per diluted share, for the fourth quarter of 2016, a decrease of 11.3% per diluted share.    

Net sales for 2017 were $1.185 billion compared to $1.147 billion for 2016, a 3.3% increase.  Domestic sales decreased 1.0% to $932.3 million for 2017 from $941.3 million for 2016.  International sales were $252.4 million for 2017 compared to $206.2 million for 2016, an increase of 22.5%.     

Earnings for 2017 were $37.8 million, or $1.63 per diluted share, compared to $55.2 million, or $2.38 per diluted share, for 2016, a decrease of 31.5% per diluted share.  As previously announced, the Company initiated significant design upgrades to its customers' Georgia and Arkansas wood pellet plants to meet full production rates, which negatively impacted earnings per share by approximately $0.59 during the third quarter of 2017.

Commenting on the announcement, Benjamin G. Brock, Chief Executive Officer, stated, "We were pleased to exceed our previously announced earnings projection for the quarter while increasing our backlog to a historically strong $411.5 million.  Given our backlog, quote activity and conversations with our customers in both domestic and international markets we are optimistic on our outlook.  Our customers are experiencing good market conditions and we are excited for the opportunity to have improved results in 2018."

The Company's backlog at December 31, 2017 was $411.5 million compared to $361.8 million at December 31, 2016, an increase of $49.6 million or 13.7%.  Domestic backlog increased 12.3% to $335.9 million at December 31, 2017 from $299.1 million at December 31, 2016.  The international backlog at December 31, 2017 was $75.6 million compared to $62.7 million at December 31, 2016, an increase of 20.5%.  Excluding pellet plant backlogs, the Company's December 31, 2017 backlog increased $57.3 million, or 22.9%, compared to December 31, 2016.  All backlog numbers for prior periods have been recast to include the backlog of RexCon, Inc. acquired in October, 2017.

Consolidated financial information for the fourth quarter and year ended December 31, 2017 and additional information related to segment revenues and profits are attached as addenda to this press release.

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on Tuesday, February 20, 2018 at 10:00 A.M. Eastern Time to review its fourth 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, March 6, 2018 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #25199.  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; wood processing and concrete production.  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, concrete 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.  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. 

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

 

         
         
Astec Industries, Inc.    
Consolidated Balance Sheets    
(in thousands)    
(unaudited)    
     
  Dec 31 Dec 31    
  2017 2016    
Assets        
Current assets        
Cash and cash equivalents $ 62,280   $ 82,371      
Investments   1,624     1,024      
Receivables, net   119,952     110,673      
Inventories   391,379     360,404      
Prepaid expenses and other   27,734     22,361      
Total current assets   602,969     576,833      
Property and equipment, net   190,396     180,538      
Other assets   96,214     86,230      
Total assets $ 889,579   $ 843,601      
Liabilities and equity        
Current liabilities        
Accounts payable - trade $ 60,417   $ 57,297      
Other current liabilities   118,729     111,564      
Total current liabilities   179,146     168,861      
Non-current liabilities   23,668     25,899      
Total equity   686,765     648,841      
Total liabilities and equity $ 889,579   $ 843,601      
         
         
         
Astec Industries, Inc.    
Consolidated Statements of Income    
(in thousands, except per share data)    
(unaudited)    
     
  Three Months Ended Twelve Months Ended
  Dec 31 Dec 31
    2017     2016     2017     2016  
Net sales $ 312,375   $ 326,564   $ 1,184,739   $ 1,147,431  
Cost of sales   249,625     262,092     941,610     882,162  
Gross profit   62,750     64,472     243,129     265,269  
Selling, general, administrative & engineering expenses   44,756     45,398     187,592     178,114  
Income from operations   17,994     19,074     55,537     87,155  
Interest expense   202     338     840     1,395  
Other   702     63     2,725     1,506  
Income before income taxes   18,494     18,799     57,422     87,266  
Income taxes   7,572     6,413     19,627     32,107  
Net income attributable to controlling interest $ 10,922   $ 12,386   $ 37,795   $ 55,159  
         
         
Earnings per Common Share        
Net income attributable to controlling interest        
Basic $ 0.47   $ 0.54   $ 1.64   $ 2.40  
Diluted $ 0.47   $ 0.53   $ 1.63   $ 2.38  
         
Weighted average common shares outstanding        
Basic   23,033     23,002     23,025     22,992  
Diluted   23,194     23,154     23,184     23,142  
         

 

 
Astec Industries, Inc.
Segment Revenues and Profits
For the three months ended December 31, 2017 and 2016
(in thousands)
(unaudited)
 
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Corporate Total
2017 Revenues $ 146,666   $ 96,515   $ 69,194   $ -   $ 312,375  
2016 Revenues   194,090     82,367     50,107     -     326,564  
Change $   (47,424)     14,148     19,087     -     (14,189)  
Change %   (24.4%)     17.2%     38.1%     -     (4.3%)  
           
2017 Gross Profit   26,632     19,140     16,601     377     62,750  
2017 Gross Profit %   18.2%     19.8%     24.0%     -     20.1%  
2016 Gross Profit   34,498     19,128     10,752     94     64,472  
2016 Gross Profit %   17.8%     23.2%     21.5%     -     19.7%  
Change   (7,866)     12     5,849     283     (1,722)  
           
2017 Profit (Loss)   11,096     6,388     5,864     (13,297)     10,051  
2016 Profit (Loss)   20,088     6,742     908     (15,247)     12,491  
Change $   (8,992)     (354)     4,956     1,950     (2,440)  
Change %   (44.8%)     (5.3%)     545.8%     12.8%     (19.5%)  
           

 

           
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 December 31  
      2017     2016   Change $  
Total profit for all segments $    10,051   $    12,491   $    (2,440)    
Recapture (elimination) of intersegment profit   803     (157)     960    
Net  loss attributable to non-controlling interest   68     52     16    
Net income attributable to controlling interest $ 10,922   $ 12,386   $ (1,464)    
           

  

           
Astec Industries, Inc.
Segment Revenues and Profits
For the twelve months ended December 31, 2017 and 2016
(in thousands)
(unaudited)
 
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Corporate Total
2017 Revenues $   553,691   $   403,720   $   227,328   $   -    $   1,184,739  
2016 Revenues     608,908       359,760       178,763       -        1,147,431  
Change $     (55,217)       43,960       48,565       -        37,308  
Change %   (9.1%)     12.2%     27.2%       -      3.3%  
           
2017 Gross Profit     93,027       93,792       55,774       536       243,129  
2017 Gross Profit %   16.8%     23.2%     24.5%       -      20.5%  
2016 Gross Profit     135,848       91,352       37,820       249       265,269  
2016 Gross Profit %   22.3%     25.4%     21.2%       -      23.1%  
Change     (42,821)       2,440       17,954       287       (22,140)  
           
2017 Profit (Loss)     26,641       35,748       16,219       (40,963)       37,645  
2016 Profit (Loss)     71,482       34,877       4,145       (55,992)       54,512  
Change $     (44,841)       871       12,074       15,029       (16,867)  
Change %   (62.7%)     2.5%     291.3%     26.8%     (30.9%)  
           

 

           
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):
           
    Twelve months ended December 31  
     2017    2016   Change $  
Total profit for all segments $ 37,645   $                    54,512   $                   (16,867)                                            
Recapture (elimination) of intersegment profit            (55)     476     (531)    
Net loss attributable to non-controlling interest   205     171     34    
Net income attributable to controlling interest $ 37,795   $ 55,159   $ (17,364)    
           
           
Astec Industries, Inc.  
Backlog by Segment  
December 31, 2017 and 2016  
(in thousands)  
(unaudited)  
   
  Infrastructure
Group
Aggregate and Mining Group Energy
Group
Total  
2017 Backlog $ 239,495   $ 116,987   $ 54,987   $ 411,469    
2016 Backlog   232,224     88,951     40,656     361,831      
Change $   7,271     28,036     14,331     49,638    
Change %   3.1%     31.5%     35.2%       13.7%    
           


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