ASTEC INDUSTRIES INC - FORM 8-K - EX-99.1 - PRESS RELEASE

ASTEC INDUSTRIES INC - FORM 8-K - EX-99.1 - PRESS RELEASE - October 26, 2012

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ASTEC INDUSTRIES INC Reports

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8-K - Q3-2012 EARNINGS RELEASE - ASTEC INDUSTRIES INC	f8k-102612.htm

Astec Industries, Inc.

News Release

1725 Shepherd Road | Chattanooga, TN 37421 | Phone (423) 899-5898 | Fax (423) 899-4456

ASTEC INDUSTRIES REPORTS THIRD QUARTER
SALES UP 6%,

PRE-TAX EARNINGS UP 9%

CHATTANOOGA, Tenn. (October 26, 2012) - 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.

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

David C. Silvious

Vice President and Chief Financial Officer

Phone: (423) 899-5898

Fax: (423) 899-4456

E-mail: dsilvious@astecindustries.com

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)

	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 Sept 30				Nine Months Ended 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	)

	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	)

	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	%

Astec Industries, Inc.

Segment Revenues and Profits

For the nine months ended September 30, 2012 and 2011

(in thousands)

(unaudited)