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| 8-K - Q3-2011 EARNINGS PRESS RELEASE - ASTEC INDUSTRIES INC | f8k-102511.htm |
Astec Industries, Inc.
1725 Shepherd Road | Chattanooga, TN 37421 | Phone (423) 899-5898 | Fax (423) 899-4456
ASTEC INDUSTRIES REPORTS THIRD QUARTER RESULTS
CHATTANOOGA, Tenn. (October 25, 2011) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for its third quarter ended September 30, 2011.
Revenues for the third quarter of 2011 were $214.6 million compared with $177.9 million for the third quarter of 2010 for a 20.6% increase. Domestic sales were $127.3 million during the third quarter of 2011 compared to $98.6 million during the third quarter of 2010 for an increase of 29.1%. International sales were $87.3 million during the third quarter of 2011 compared to $79.3 million during the third quarter of 2010 for an increase of 10.1%. The Company reported net income attributable to controlling interest of $7.7 million for the third quarter of 2011 compared to net income attributable to controlling interest of $7.4 million for the third quarter of 2010 for an increase of 4.1%. Net income attributable to controlling interest for the third quarter of 2011 was $0.34 per diluted share compared to $0.32 per diluted share for the third quarter of 2010 for a 6.3% increase.
The Company’s backlog at September 30, 2011 was $221.5 million compared to $145.6 million at September 30, 2010 for a 52.1% increase.
Consolidated financial statements for the third quarter ended September 30, 2011 and additional information related to segment revenues, profits, and backlog are attached to this press release.
Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, “In the third quarter, we were busy with several business development activities and initiatives. We completed a $3 million acquisition in Germany, added new facilities in Australia and Germany totaling approximately $7 million, signed a manufacturing joint venture agreement in Brazil which will result in an initial investment of $12 million and completed the GEFCO and STECO acquisition in early October for $30.8 million. These activities represent an investment in our future business and we look forward to their growth and success.
We were pleased with our results for the third quarter, despite a number of charges that negatively affected net income during the quarter. We incurred $3.3 million or $0.10 per diluted share in R&D related expenses. These expenses related to further development of the prototype wood pellet plant and pellet press, improvements to our crushing line of equipment and concrete plants, development of a line of hot water heaters and pump trailers for oil and natural gas fracking operations and development of a new Peterson micro-chipper. We also had an unusually high volume of intercompany sales this quarter which resulted in $1.9 million or $.06 per diluted share of profit being deferred until future quarters. The majority of these sales were to our subsidiary in Australia for distribution into that country.”
Dr. Brock continued, “In late September we were awarded a contract to supply asphalt plants to the U.S. Army that could amount to $89 million in sales over the next 5 years. As these contingent sales become firm orders they will be reflected in our backlog. Considering the overall condition of the domestic economy and the uncertainty in Washington, we continue to be pleased with the company’s performance. We believe during the next six months we may see a new, enhanced six-year highway bill which should give more certainty to our domestic customers and hopefully we will see continued improvement in our domestic business.”
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 25, 2011 at 10:00 A.M. Eastern Time to review its third 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 Sunday, November 6, 2011, by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 380997. A transcription of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within 5 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: asphalt production equipment, mobile asphalt paving equipment, aggregate processing and mining 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 effects on the Company from its backlog, the results of the Company’s acquisition and business development strategy, results of the Company’s R&D efforts, effects of the U.S. Army contract for asphalt plants, and the status of the multi-year highway bill and investigation of potential acquisitions and divestitures. 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, future downturns in the economy, rising oil and liquid asphalt prices, rising steel prices, the effect of any future federal stimulus package, decreased funding for highway projects, tax and healthcare reform, 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 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, 2010.
For Additional Information Contact:
J. Don Brock
Chairman of the Board & C.E.O.
Phone: (423) 867-4210
Fax: (423) 867-4127
E-mail: dbrock@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
Secretary / Director of Investor Relations
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: sanderson@astecindustries.com
| Astec Industries, Inc. |
|
Consolidated Balance Sheets
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(in thousands)
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(unaudited)
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Sept 30
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Sept 30
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|||||||
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2011
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2010
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|||||||
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Assets
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||||||||
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Current assets
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||||||||
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Cash and cash equivalents
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$ | 51,737 | $ | 81,366 | ||||
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Receivables, net
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101,227 | 88,266 | ||||||
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Inventories
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290,453 | 242,137 | ||||||
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Prepaid expenses and other
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28,702 | 16,452 | ||||||
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Total current assets
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472,119 | 428,221 | ||||||
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Property and equipment, net
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177,855 | 168,414 | ||||||
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Other assets
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39,054 | 33,698 | ||||||
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Total assets
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$ | 689,028 | $ | 630,333 | ||||
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Liabilities and equity
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||||||||
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Current liabilities
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||||||||
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Accounts payable - trade
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$ | 45,571 | $ | 39,382 | ||||
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Other accrued liabilities
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92,005 | 79,619 | ||||||
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Total current liabilities
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137,576 | 119,001 | ||||||
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Other non-current liabilities
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29,877 | 28,094 | ||||||
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Total equity
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521,575 | 483,238 | ||||||
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Total liabilities and equity
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$ | 689,028 | $ | 630,333 | ||||
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Astec Industries, Inc.
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Consolidated Statements of Income
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(in thousands, except shares and share data)
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(unaudited)
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Three Months Ended
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Nine Months Ended
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Sept 30
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Sept 30
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2011
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2010
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2011
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2010
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Net sales
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$ | 214,624 | $ | 177,853 | $ | 692,569 | $ | 580,557 | ||||||||
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Cost of sales
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168,224 | 135,913 | 529,495 | 445,797 | ||||||||||||
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Gross profit
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46,400 | 41,940 | 163,074 | 134,760 | ||||||||||||
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Selling, general, administrative & engineering expenses
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37,362 | 31,808 | 115,640 | 95,351 | ||||||||||||
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Asset impairment charge
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- | - | 2,170 | - | ||||||||||||
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Income from operations
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9,038 | 10,132 | 45,264 | 39,409 | ||||||||||||
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Interest expense
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46 | 30 | 140 | 289 | ||||||||||||
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Other income, net of expenses
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264 | 492 | 1,037 | 1,103 | ||||||||||||
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Income before income taxes
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9,256 | 10,594 | 46,161 | 40,223 | ||||||||||||
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Income taxes
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1,492 | 3,198 | 14,134 | 13,665 | ||||||||||||
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Net income
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7,764 | 7,396 | 32,027 | 26,558 | ||||||||||||
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Net income attributable to noncontolling interest
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41 | 34 | 74 | 94 | ||||||||||||
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Net income attributable to controlling interest
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$ | 7,723 | $ | 7,362 | $ | 31,953 | $ | 26,464 | ||||||||
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Earnings per Common Share
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Net income attributable to controlling interest
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Basic
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$ | 0.34 | $ | 0.33 | $ | 1.42 | $ | 1.18 | ||||||||
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Diluted
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$ | 0.34 | $ | 0.32 | $ | 1.39 | $ | 1.16 | ||||||||
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Weighted average common shares outstanding
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||||||||||||||||
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Basic
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22,598,642 | 22,533,606 | 22,580,443 | 22,504,876 | ||||||||||||
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Diluted
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23,006,530 | 22,843,300 | 22,972,758 | 22,814,634 | ||||||||||||
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Astec Industries, Inc.
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Segment Revenues and Profits
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For the three months ended September 30, 2011 and 2010
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(in thousands)
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(unaudited)
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Asphalt Group
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Aggregate
and Mining Group |
Mobile
Asphalt Paving Group |
Underground
Group
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All Others
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Total
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|||||||||||||||||||
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2011 Revenues
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50,458 | 83,232 | 39,143 | 23,769 | 18,022 | 214,624 | ||||||||||||||||||
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2010 Revenues
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45,478 | 60,263 | 36,681 | 19,220 | 16,211 | 177,853 | ||||||||||||||||||
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Change $
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4,980 | 22,969 | 2,462 | 4,549 | 1,811 | 36,771 | ||||||||||||||||||
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Change %
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11.0 | % | 38.1 | % | 6.7 | % | 23.7 | % | 11.2 | % | 20.7 | % | ||||||||||||
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2011 Gross Profit
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8,508 | 20,682 | 10,091 | 4,080 | 3,039 | 46,400 | ||||||||||||||||||
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2011 Gross Profit %
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16.9 | % | 24.8 | % | 25.8 | % | 17.2 | % | 16.9 | % | 21.6 | % | ||||||||||||
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2010 Gross Profit
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11,001 | 14,839 | 10,395 | 2,007 | 3,698 | 41,940 | ||||||||||||||||||
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2010 Gross Profit %
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24.2 | % | 24.6 | % | 28.3 | % | 10.4 | % | 22.8 | % | 23.6 | % | ||||||||||||
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Change
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(2,493 | ) | 5,843 | (304 | ) | 2,073 | (659 | ) | 4,460 | |||||||||||||||
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2011 Profit (Loss)
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500 | 7,764 | 4,976 | 511 | (4,062 | ) | 9,689 | |||||||||||||||||
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2010 Profit (Loss)
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4,041 | 4,437 | 5,188 | (1,569 | ) | (4,480 | ) | 7,617 | ||||||||||||||||
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Change $
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(3,541 | ) | 3,327 | (212 | ) | 2,080 | 418 | 2,072 | ||||||||||||||||
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Change %
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(87.6 | %) | 75.0 | % | (4.1 | %) | 132.6 | % | 9.3 | % | 27.2 | % | ||||||||||||
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):
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Three months ended September 30
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||||||||||||
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2011
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2010
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Change $
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||||||||||
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Total profit for all segments
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$ | 9,689 | $ | 7,617 | $ | 2,072 | ||||||
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Net income attributable to non-controlling interest in subsidiary
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(41 | ) | (34 | ) | (7 | ) | ||||||
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Elimination of intersegment profit
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(1,925 | ) | (221 | ) | (1,704 | ) | ||||||
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Net income attributable to controlling interest
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$ | 7,723 | $ | 7,362 | $ | 361 | ||||||
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Astec Industries, Inc.
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Segment Revenues and Profits
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For the nine months ended September 30, 2011 and 2010
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(in thousands)
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(unaudited)
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Asphalt Group
|
Aggregate
and Mining Group |
Mobile
Asphalt Paving Group |
Underground
Group |
All Others
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Total
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|||||||||||||||||||
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2011 Revenues
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192,396 | 248,647 | 142,565 | 58,524 | 50,437 | 692,569 | ||||||||||||||||||
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2010 Revenues
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180,901 | 186,182 | 125,995 | 41,783 | 45,696 | 580,557 | ||||||||||||||||||
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Change $
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11,495 | 62,465 | 16,570 | 16,741 | 4,741 | 112,012 | ||||||||||||||||||
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Change %
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6.4 | % | 33.6 | % | 13.2 | % | 40.1 | % | 10.4 | % | 19.3 | % | ||||||||||||
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2011 Gross Profit
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44,486 | 61,838 | 39,158 | 8,137 | 9,455 | 163,074 | ||||||||||||||||||
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2011 Gross Profit %
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23.1 | % | 24.9 | % | 27.5 | % | 13.9 | % | 18.7 | % | 23.5 | % | ||||||||||||
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2010 Gross Profit
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46,169 | 43,225 | 33,138 | 2,519 | 9,709 | 134,760 | ||||||||||||||||||
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2010 Gross Profit %
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25.5 | % | 23.2 | % | 26.3 | % | 6.0 | % | 21.2 | % | 23.2 | % | ||||||||||||
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Change
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(1,683 | ) | 18,613 | 6,020 | 5,618 | (254 | ) | 28,314 | ||||||||||||||||
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2011 Profit (Loss)
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20,421 | 23,114 | 20,819 | (3,166 | ) | (26,126 | ) | 35,062 | ||||||||||||||||
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2010 Profit (Loss)
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24,410 | 12,232 | 16,662 | (7,012 | ) | (18,058 | ) | 28,234 | ||||||||||||||||
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Change $
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(3,989 | ) | 10,882 | 4,157 | 3,846 | (8,068 | ) | 6,828 | ||||||||||||||||
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Change %
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(16.3 | %) | 89.0 | % | 24.9 | % | 54.8 | % | (44.7 | %) | 24.2 | % | ||||||||||||
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):
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Nine months ended September 30
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||||||||||||
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2011
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2010
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Change $
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||||||||||
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Total profit for all segments
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$ | 35,062 | $ | 28,234 | $ | 6,828 | ||||||
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Net income attributable to non-controlling interest in subsidiary
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(74 | ) | (94 | ) | 20 | |||||||
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Elimination of intersegment profit
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(3,035 | ) | (1,676 | ) | (1,359 | ) | ||||||
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Net income attributable to controlling interest
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$ | 31,953 | $ | 26,464 | $ | 5,489 | ||||||
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Astec Industries, Inc.
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Backlog by Segment
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September 30, 2011 and 2010
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(in thousands)
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(Unaudited)
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Asphalt Group
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Aggregate and Mining Group
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Mobile Asphalt Paving Group
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Underground Group
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All Others
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Total
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|||||||||||||||||||
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2011 Backlog
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94,784 | 84,848 | 5,030 | 15,741 | 21,070 | 221,473 | ||||||||||||||||||
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2010 Backlog
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74,034 | 55,367 | 6,141 | 4,290 | 5,811 | 145,643 | ||||||||||||||||||
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Change $
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20,750 | 29,481 | (1,111 | ) | 11,451 | 15,259 | 75,830 | |||||||||||||||||
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Change %
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28.0 | % | 53.2 | % | (18.1 | %) | 266.9 | % | 262.6 | % | 52.1 | % | ||||||||||||