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Astec Industries Reports Third Quarter 2013 Results

CHATTANOOGA, Tenn., Oct. 22, 2013 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their third quarter ended September 30, 2013. Net sales for the third quarter of 2013 were $213.2 million compared to $218.4 million for the third quarter of 2012, a 2% decrease. Earnings from continuing operations for the third quarter of 2013 were $6.5 million or $0.28 per diluted share compared to $6.6 million or $0.29 per diluted share in the third quarter of 2012, a decrease of 1%.

Domestic sales decreased 1% to $132.4 million for the third quarter of 2013 compared to $134.0 million for the third quarter of 2012. International sales decreased 4% to $80.8 million for the third quarter of 2013 compared to $84.4 million for the third quarter of 2012.

Net sales for the first nine months of 2013 were $709.1 million compared to $708.6 million for the first nine months of 2012, a slight increase. Earnings from continuing operations for the first nine months of 2013 were $30.8 million or $1.33 per diluted share compared to $28.5 million or $1.24 per diluted share in the first nine months of 2012, an 8% increase.

Domestic sales increased 3% to $456.6 million for the first nine months of 2013 compared to $443.5 million for the first nine months of 2012. International sales were $252.5 million for the first nine months of 2013 compared to $265.1 million for the first nine months of 2012, a 5% decrease.

The Company's domestic backlog increased 20%, from $110.6 million at September 30, 2012 to $132.9 million at September 30, 2013. The international backlog at September 30, 2013 was $95.6 million compared to $120.1 million at September 30, 2012 for a decrease of 20%. Total backlog decreased 1% to $228.5 million at September 30, 2013 from $230.7 million at September 30, 2012. 2012 backlog amounts have been revised to reflect divestitures made late in 2012.

Prior period results have been revised to correct errors identified during the third quarter of 2013. The effects of the errors are not material to such prior periods, and therefore the Company has concluded that its financial statements for such prior periods can still be relied upon. The net impact of the correction is an increase to net income of $51,000 and $480,000 for the third quarter and nine months ended September 30, 2012, respectively, resulting in no change to earnings per diluted share for the third quarter of 2012 and an increase to earnings per diluted share of $.02 for the nine months ended September 30, 2012. Balance sheet corrections consisted of increasing retained earnings by $2.6 million and inventory by $3.8 million, each on a cumulative basis at September 30, 2012, along with related changes in deferred and current income tax balance sheet amounts. The increase in profit occurred primarily in the Asphalt Group's gross margin while the related tax effects occurred primarily in the Other Group.

Consolidated financial information for the quarter and nine months ended September 30, 2013 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement of quarterly results, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "Sales for the third quarter were down slightly, primarily driven by a lack of equipment sales in the Aggregate and Mining Group. This resulted in a decrease in overhead absorption which affected our gross margin. We believe continued rainy weather during the quarter in some parts of the country hampered many of our customers and a continued lack of clarity on the future of highway funding has made many of our customers hesitant to spend on major equipment purchases. International business has slowed when compared to last year but we have seen a pickup in orders early in the fourth quarter."

Dr. Brock continued, "We are busy installing our first pellet plant in Georgia. We hope to open the plant and start producing pellets there before the end of the year. We are also making progress on the construction of our manufacturing facility in Brazil. We continue to look for appropriate acquisitions to expand our product offering and market coverage. Although we are cautious about the near-term economic outlook, we are building a foundation for future growth in sales and profits."

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on October 22, 2013, at 10:00 A.M. Eastern Time to review its September 30, 2013 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, November 5, 2013 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 100581. 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 oil, gas and water drilling equipment (Underground Group). 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 delay in shipments caused by the weather, the lack of highway funding, and the opening of plants in Georgia and Brazil. 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, 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, 2012.

Astec Industries, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
Sept 30 Sept 30
2013 2012
Assets
Current assets
Cash and cash equivalents $ 46,342 $ 35,564
Investments 16,342 1,743
Receivables, net 97,347 109,320
Inventories 339,826 344,798
Prepaid expenses and other 21,701 23,278
Total current assets 521,558 514,703
Property and equipment, net 186,546 192,602
Other assets 41,959 42,704
Total assets $ 750,063 $ 750,009
Liabilities and equity
Current liabilities
Accounts payable - trade $ 48,492 $ 49,456
Other current liabilities 95,083 103,956
Total current liabilities 143,575 153,412
Non-current liabilities 32,903 33,422
Total equity 573,585 563,175
Total liabilities and equity $ 750,063 $ 750,009
Astec Industries, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2013 2012 2013 2012
Net sales $ 213,177 $ 218,391 $ 709,136 $ 708,633
Cost of sales 167,390 171,094 549,341 548,993
Gross profit 45,787 47,297 159,795 159,640
Selling, general, administrative & engineering expenses 36,635 38,411 114,797 117,010
Income from operations 9,152 8,886 44,998 42,630
Interest expense 269 152 417 240
Other 1,087 788 1,731 2,181
Income from continuing operations before income taxes 9,970 9,522 46,312 44,571
Income taxes on continuing operations 3,456 2,937 15,536 16,028
Net income from continuing operations 6,514 6,585 30,776 28,543
Income from discontinued operations, (net of tax of $338 for the quarter and $817 for the year) -- 318 -- 1,400
Net income attributable to controlling interest $ 6,514 $ 6,903 $ 30,776 $ 29,943
Earnings per Common Share
Net income from continuing operations
Basic $ 0.29 $ 0.29 $ 1.35 $ 1.26
Diluted $ 0.28 $ 0.29 $ 1.33 $ 1.24
Income from discontinued operations, net of tax
Basic $ -- $ 0.01 $ -- $ 0.06
Diluted $ -- $ 0.01 $ -- $ 0.06
Net income attributable to controlling interest
Basic $ 0.29 $ 0.30 $ 1.35 $ 1.32
Diluted $ 0.28 $ 0.30 $ 1.33 $ 1.30
Weighted average common shares outstanding
Basic 22,756 22,691 22,744 22,675
Diluted 23,082 23,053 23,077 23,049
Astec Industries, Inc.
Segment Revenues and Profits
For the three months ended September 30, 2013 and 2012
(in thousands)
(unaudited)
Asphalt Group Aggregate and Mining Group Mobile Asphalt Paving Group Underground Group All Others Total
2013 Revenues 47,058 79,792 35,419 27,266 23,642 213,177
2012 Revenues 46,797 91,860 36,618 20,529 22,587 218,391
Change $ 261 (12,068) (1,199) 6,737 1,055 (5,214)
Change % 0.6% (13.1%) (3.3%) 32.8% 4.7% (2.4%)
2013 Gross Profit 12,257 19,584 7,922 1,979 4,045 45,787
2013 Gross Profit % 26.0% 24.5% 22.4% 7.3% 17.1% 21.5%
2012 Gross Profit 9,645 22,957 7,575 2,701 4,419 47,297
2012 Gross Profit % 20.6% 25.0% 20.7% 13.2% 19.6% 21.7%
Change 2,612 (3,373) 347 (722) (374) (1,510)
2013 Profit (Loss) 4,846 6,765 2,059 (813) (5,652) 7,205
2012 Profit (Loss) 2,324 8,697 1,631 (127) (5,243) 7,282
Change $ 2,522 (1,932) 428 (686) (409) (77)
Change % 108.5% (22.2%) 26.2% (540.2%) (7.8%) (1.1%)
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
2013 2012 Change $
Total profit for all segments $ 7,205 $ 7,282 $ (77)
Elimination of intersegment profit (678) (649) (29)
Net income attributable to non-controlling interest (13) (48) 35
Net income from continuing operations 6,514 6,585 (71)
Income from discontinued operations, (net of tax of $338) -- 318 (318)
Net income attributable to controlling interest $ 6,514 $ 6,903 $ (389)
Astec Industries, Inc.
Segment Revenues and Profits
For the nine months ended September 30, 2013 and 2012
(in thousands)
(unaudited)
Asphalt Group Aggregate and Mining Group Mobile Asphalt Paving Group Underground Group All Others Total
2013 Revenues 181,761 270,438 128,459 59,066 69,412 709,136
2012 Revenues 174,898 278,024 123,770 61,817 70,124 708,633
Change $ 6,863 (7,586) 4,689 (2,751) (712) 503
Change % 3.9% (2.7%) 3.8% (4.5%) (1.0%) 0.1%
2013 Gross Profit 44,289 68,240 29,652 4,486 13,128 159,795
2013 Gross Profit % 24.4% 25.2% 23.1% 7.6% 18.9% 22.5%
2012 Gross Profit 38,502 72,512 28,331 7,838 12,457 159,640
2012 Gross Profit % 22.0% 26.1% 22.9% 12.7% 17.8% 22.5%
Change 5,787 (4,272) 1,321 (3,352) 671 155
2013 Profit (Loss) 20,048 26,963 10,888 (3,963) (21,578) 32,358
2012 Profit (Loss) 14,308 29,836 9,634 (1,173) (22,929) 29,676
Change $ 5,740 (2,873) 1,254 (2,790) 1,351 2,682
Change % 40.1% (9.6%) 13.0% (237.9%) 5.9% 9.0%
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
2013 2012 Change $
Total profit for all segments $ 32,358 $ 29,676 $ 2,682
Elimination of intersegment profit (1,428) (1,009) (419)
Net income attributable to non-controlling interest (154) (124) (30)
Net income from continuing operations 30,776 28,543 2,233
Income from discontinued operations, (net of tax of $817) -- 1,400 (1,400)
Net income attributable to controlling interest $ 30,776 $ 29,943 $ 833
Astec Industries, Inc.
Backlog by Segment
September 30, 2013 and 2012
(in thousands)
(Unaudited)
Asphalt Group Aggregate and Mining Group Mobile Asphalt Paving Group Underground Group All Others Total
2013 Backlog 120,459 69,583 3,439 17,192 17,864 228,537
2012 Backlog 102,944 82,648 2,828 20,793 21,505 230,718
Change $ 17,515 (13,065) 611 (3,601) (3,641) (2,181)
Change % 17.0% (15.8%) 21.6% (17.3%) (16.9%) (0.9%)

CONTACT: 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 W. Norman Smith President and COO Phone: (423) 867-4210 Fax: (423) 867-4127 E-mail: nsmith@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.comSource:Astec Industries, Inc.