Astec Industries Reports Third Quarter Sales Up 6%, Pre-tax Earnings Up 9%

CHATTANOOGA, Tenn., Oct. 26, 2012 /PRNewswire/ -- Astec Industries, Inc. (Nasdaq:   ASTE) today reported results for their third quarter ended September 30, 2012.  Net sales for the third quarter of 2012 were $227.0 million compared to $214.6 million for the third quarter of 2011, a 6% increase.  Pre-tax earnings for the third quarter of 2012 were $10.1 million compared to $9.3 million in the third quarter of 2011, an increase of 9%.  Earnings for the third quarter of 2012 were $6.9 million or $0.30 per diluted share compared to earnings for the third quarter of 2011 of $7.7 million or $0.34 per diluted share, a decrease of $0.04 or 12% per diluted share. 

Domestic sales increased 10% to $139.5 million for the third quarter of 2012 compared to $127.3 million for the third quarter of 2011.  International sales were $87.6 million for the third quarter of 2012 compared to $87.3 million for the third quarter of 2011.

Net sales for the first nine months of 2012 were $747.6 million compared to $692.6 million for the first nine months of 2011, an 8% increase.  Pre-tax earnings for the first nine months of 2012 were $46.1 million, relatively unchanged from $46.2 million in the first nine months of 2011.  Earnings for the first nine months of 2012 were $29.5 million or $1.28 per diluted share compared to earnings for the first nine months of 2011 of $32.0 million or $1.39 per diluted share, a decrease of $0.11 or 8% per diluted share. 

Domestic sales increased 12% to $462.4 million for the first nine months of 2012 compared to $414.2 million for the first nine months of 2011.  International sales were $285.2 million for the first nine months of 2012 compared to $278.3 million for the first nine months of 2011, a 3% increase.

The Company's domestic backlog increased 8%, from $107.9 million at September 30, 2011 to $116.1 million at September 30, 2012.  The international backlog at September 30, 2012 was $124.4 million, a slight increase compared to the September 30, 2011 international backlog of $124.2 million.  Total backlog increased 4% to $240.5 million at September 30, 2012 from $232.1 million September 30, 2011, respectively.  2011 backlog amounts have been restated to reflect acquisitions made late in 2011.

Consolidated financial information for the quarter and nine months ended September 30, 2012 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "While we were able to grow sales at 6% for the third quarter, our gross margin remained flat.  Our pre-tax earnings were up 9% during the quarter but our after-tax earnings were impacted by the lack of a research and development credit which was in effect in 2011 but has yet to be approved by Congress for 2012." 

Dr. Brock continued, "Our customers continue to be reluctant to spend money on capital investments due to the lack of work and uncertainty in the economy.  The delayed passage of the Federal highway bill caused state transportation departments to delay lettings until late in the construction season.  In addition, the uncertainty surrounding taxes, regulations and the lack of general economic improvement continues to discourage customers from upgrading and expanding their equipment fleets.  We see an opportunity for growth as the economy rebounds over the next few years and the pent up demand for equipment needs to be met." 

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on October 26, 2012, at 10:00 A.M. Eastern Time to review its September 30, 2012 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 Friday, November 9, 2012 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 397799.  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 building and restoring the world's infrastructure.  Astec's manufacturing operations are divided into four primary business segments:  aggregate processing and mining equipment; asphalt production equipment; mobile asphalt paving equipment; and underground boring, directional drilling and trenching equipment.  Additionally, the Other Group contains one subsidiary that manufactures equipment used for wood processing and recycling and one that is a company-owned dealership located in Australia.

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 Company's financial performance in the fourth quarter of 2012, the effects on the Company from its backlog, the Federal highway bill, the uncertainty in the general economy, and the success of the Company's acquisition strategy.  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, rising oil and liquid asphalt prices, rising steel prices, the affect of any future federal stimulus package, 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, 2011. 




Astec Industries, Inc.

Consolidated Balance Sheets

(in thousands)

(unaudited)



Sept 30

Sept 30


2012

2011

Assets



Current assets



Cash and cash equivalents                                   

$         35,564

$        51,737

Receivables, net

109,320

101,227

Inventories

340,982

290,453

Prepaid expenses and other

26,241

28,702

Total current assets

512,107

472,119

Property and equipment, net

192,602

177,855

Other assets

42,704

39,054

Total assets

$       747,413

$      689,028

Liabilities and equity



Current liabilities



Accounts payable - trade

$         49,456

$        45,571

Other accrued liabilities

103,956

92,005

Total current liabilities

153,412

137,576

Other non-current liabilities

33,421

29,877

Total equity

560,580

521,575

Total liabilities and equity

$       747,413

$      689,028




Astec Industries, Inc.



Consolidated Statements of Income



(in thousands, except per share data)



(unaudited)







Three Months Ended

Nine Months Ended


Sept 30

Sept 30


2012

2011

2012

2011

Net sales

$       227,041

$      214,624

$       747,554

$       692,569

Cost of sales

177,598

168,224

581,234

529,495

Gross profit

49,443

46,400

166,320

163,074

Selling, general, administrative & engineering expenses

40,003

37,362

122,266

115,640

Asset impairment charge

-

-

-

2,170

Income from operations

9,440

9,038

44,054

45,264

Interest expense

152

46

242

140

Other income, net of expenses

856

264

2,333

1,037

Income before income taxes

10,144

9,256

46,145

46,161

Income taxes

3,244

1,492

16,558

14,134

Net income

6,900

7,764

29,587

32,027

Net income attributable to noncontrolling interest

48

41

124

74

Net income attributable to controlling interest

$           6,852

$          7,723

$         29,463

$         31,953











Earnings per Common Share





Net income attributable to controlling interest





          Basic

$             0.30

$            0.34

$             1.30

$             1.42

          Diluted

$             0.30

$            0.34

$             1.28

$             1.39











Weighted average common shares outstanding





          Basic

22,691

22,599

22,675

22,580

          Diluted

23,053

23,007

23,049

22,973






Astec Industries, Inc.

Segment Revenues and Profits

For the three months ended September 30, 2012 and 2011

(in thousands)

(unaudited)


Asphalt Group

Aggregate and Mining Group

Mobile Asphalt Paving Group

Underground Group

All Others

Total

2012 Revenues

46,797

91,860

36,618

29,179

22,587

227,041

2011 Revenues

50,458

83,232

39,143

23,769

18,022

214,624

Change $

(3,661)

8,628

(2,525)

5,410

4,565

12,417

Change %

(7.3%)

10.4%

(6.5%)

22.8%

25.3%

5.8%








2012 Gross Profit

9,563

22,957

7,575

4,929

4,419

49,443

2012 Gross Profit %

20.4%

25.0%

20.7%

16.9%

19.6%

21.8%

2011 Gross Profit

8,508

20,682

10,091

4,080

3,039

46,400

2011 Gross Profit %

16.9%

24.8%

25.8%

17.2%

16.9%

21.6%

Change

1,055

2,275

(2,516)

849

1,380

3,043








2012 Profit (Loss)

2,248

8,697

1,631

518

(5,545)

7,549

2011 Profit (Loss)

500

7,764

4,976

511

(4,062)

9,689

Change $

1,748

933

(3,345)

7

(1,483)

(2,140)

Change %

349.6%

12.0%

(67.2%)

1.4%

(36.5%)

(22.1%)















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):











Three months ended September 30



2012

2011

Change $


Total profit for all segments

$          7,549

$          9,689

$         (2,140)


Net income attributable to non-controlling interest in subsidiary

(48)

(41)

(7)


Elimination of intersegment profit

(649)

(1,925)

1,276


Net income attributable to controlling interest

$          6,852

$          7,723

$           (871)









Astec Industries, Inc.

Segment Revenues and Profits

For the nine months ended September 30, 2012 and 2011

(in thousands)

(unaudited)


Asphalt Group

Aggregate and Mining Group

Mobile Asphalt Paving Group

Underground Group

All Others

Total

2012 Revenues

174,898

278,024

123,770

100,738

70,124

747,554

2011 Revenues

192,396

248,647

142,565

58,524

50,437

692,569

Change $

(17,498)

29,377

(18,795)

42,214

19,687

54,985

Change %

(9.1%)

11.8%

(13.2%)

72.1%

39.0%

7.9%








2012 Gross Profit

37,735

72,512

28,331

15,285

12,457

166,320

2012 Gross Profit %

21.6%

26.1%

22.9%

15.2%

17.8%

22.2%

2011 Gross Profit

44,486

61,838

39,158

8,137

9,455

163,074

2011 Gross Profit %

23.1%

24.9%

27.5%

13.9%

18.7%

23.5%

Change

(6,751)

10,674

(10,827)

7,148

3,002

3,246








2012 Profit (Loss)

13,541

29,836

9,634

1,001

(23,416)

30,596

2011 Profit (Loss)

20,421

23,114

20,819

(3,166)

(26,126)

35,062

Change $

(6,880)

6,722

(11,185)

4,167

2,710

(4,466)

Change %

(33.7%)

29.1%

(53.7%)

131.6%

10.4%

(12.7%)















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):











Nine months ended September 30



2012

2011

Change $


Total profit for all segments

$        30,596

$        35,062

$            (4,466)


Net income attributable to non-controlling interest in subsidiary

(124)

(74)

(50)


Elimination of intersegment profit

(1,009)

(3,035)

2,026


Net income attributable to controlling interest

$        29,463

$         31,953

$           (2,490)
















Astec Industries, Inc.

Backlog by Segment

September 30, 2012 and 2011

(in thousands)

(Unaudited)


Asphalt Group

Aggregate and Mining Group

Mobile Asphalt Paving Group

Underground Group

All Others

Total

2012 Backlog

102,944

82,648

2,828

30,580

21,505

240,505

2011 Backlog

94,784

84,848

5,030

26,338

21,070

232,070

Change $

8,160

(2,200)

(2,202)

4,242

435

8,435

Change %

8.6%

(2.6%)

(43.8%)

16.1%

2.1%

3.6%

 

SOURCE Astec Industries, Inc.



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