×

Astec Industries Reports Second Quarter 2016 Results

CHATTANOOGA, Tenn., July 26, 2016 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their second quarter and year to date ended June 30, 2016.

Net sales for the second quarter of 2016 were $294.4 million compared to $268.0 million for the second quarter of 2015, a 9.9% increase. Earnings for the second quarter of 2016 were $18.2 million or $0.79 per diluted share compared to $11.8 million for the second quarter of 2015 or $0.51 per diluted share, an increase of 54.9% per diluted share.

Domestic sales increased 24.5% to $242.2 million for the second quarter of 2016 from $194.6 million for the second quarter of 2015. International sales were $52.2 million for the second quarter of 2016 compared to $73.4 million for the second quarter of 2015, a decrease of 28.9%.

Net sales for the first half of 2016 were $573.1 million compared to $556.8 million for the first half of 2015, a 2.9% increase. Earnings for the first half of 2016 were $35.9 million or $1.55 per diluted share compared to $26.9 million for the first half of 2015 or $1.16 per diluted share, an increase of 33.6% per diluted share.

Domestic sales increased 17.4% to $476.4 million for the first half of 2016 from $405.7 million for the first half of 2015. International sales were $96.7 million for the first half of 2016 compared to $151.1 million for the first half of 2015, a decrease of 36.0%.

The Company’s backlog increased 58.8% from $229.5 million at June 30, 2015 to $364.5 million at June 30, 2016. The domestic backlog increased 80% from $172.0 million at June 30, 2015 to $310.0 million at June 30, 2016. The international backlog at June 30, 2016 was $54.5 million, a 5% decrease from the June 30, 2015 international backlog of $57.5 million.

Consolidated financial information for the second quarter ended June 30, 2016 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement, Benjamin G. Brock, Chief Executive Officer, stated, “We were pleased with our results for the second quarter. As our sales and backlog reflect, our domestic business remained strong during the quarter. This is primarily attributable to the increased demand caused by the passage of a new Federal highway bill in December 2015 and continuing good private sector activity.”

Mr. Brock continued, “Our backlog is up 58.8% versus last year. The majority of the increase is in the Infrastructure Group, again mainly as a result of the Federal highway bill and the $122.5 million pellet plant order announced during the first quarter. In contrast to the success of our domestic business, we continued to face headwinds in all of our groups with regard to our international business, primarily as a result of the strong U.S. dollar. We also continue to be challenged in our Aggregate and Mining Group as a result of the global mining slow down. Finally, we remain challenged in our Energy Group equipment sales in the oil and natural gas industries as prices for these commodities remain at low levels.”

In closing, Mr. Brock commented, “We were pleased to announce on July 7, 2016 our signed agreement to purchase Power Flame Incorporated for $43 million, subject to final due diligence and customary closing conditions. Power Flame manufactures burners for industrial and commercial use, and is recognized as an industry leader in technology, service, and market share. We expect to close the acquisition of Power Flame during the third quarter. We will discuss Power Flame in more detail during our earnings call today.”

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on July 26, 2016, at 10:00 A.M. Eastern Time to review its second 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, August 9, 2016 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #10057. 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; and wood processing. 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, 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, including statements about the effects on the Company from low oil and gas prices, the global mining slow down, the strong U.S. Dollar, and the impact of the long-term highway bill in the United States. 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, 2015.

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.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30June 30
2016 2015
Assets
Current assets
Cash and cash equivalents$ 68,473 $ 16,353
Investments 1,889 2,726
Receivables, net 127,490 118,248
Inventories 379,477 382,841
Prepaid expenses and other 29,702 46,569
Total current assets 607,031 566,737
Property and equipment, net 173,080 174,971
Other assets 66,517 62,083
Total assets$ 846,628 $ 803,791
Liabilities and equity
Current liabilities
Accounts payable - trade$ 54,498 $ 52,471
Other current liabilities 124,720 92,412
Total current liabilities 179,218 144,883
Non-current liabilities 27,836 39,718
Total equity 639,574 619,190
Total liabilities and equity$ 846,628 $ 803,791
Astec Industries, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months EndedSix Months Ended
June 30June 30
2016 2015 2016 2015
Net sales$ 294,394 $ 268,042 $ 573,116 $ 556,791
Cost of sales 220,942 205,809 427,708 428,512
Gross profit 73,452 62,233 145,408 128,279
Selling, general, administrative & engineering expenses 44,961 43,308 88,766 87,112
Income from operations 28,491 18,925 56,642 41,167
Interest expense 326 420 793 717
Other 327 420 935 2,368
Income before income taxes 28,492 18,925 56,784 42,818
Income taxes 10,300 7,120 20,849 15,909
Net income attributable to controlling interest $ 18,192 $ 11,805 $ 35,935 $ 26,909
Earnings per Common Share
Net income attributable to controlling interest
Basic$ 0.79 $ 0.51 $ 1.56 $ 1.17
Diluted$ 0.79 $ 0.51 $ 1.55 $ 1.16
Weighted average common shares outstanding
Basic 22,999 22,942 22,982 22,923
Diluted 23,135 23,119 23,135 23,117


Astec Industries, Inc.
Segment Revenues and Profits
For the three months ended June 30, 2016 and 2015
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
CorporateTotal
2016 Revenues 152,476 99,085 42,833 - 294,394
2015 Revenues 116,097 98,829 53,116 - 268,042
Change $ 36,379 256 (10,283) - 26,352
Change % 31.3% 0.3% (19.4%) - 9.8%
2016 Gross Profit 36,583 26,141 10,514 214 73,452
2016 Gross Profit % 24.0% 26.4% 24.5% - 25.0%
2015 Gross Profit 27,242 24,985 9,998 8 62,233
2015 Gross Profit % 23.5% 25.3% 18.8% - 23.2%
Change 9,341 1,156 516 206 11,219
2016 Profit (Loss) 19,673 10,947 2,626 (14,912) 18,334
2015 Profit (Loss) 11,845 10,056 701 (10,334) 12,268
Change $ 7,828 891 1,925 (4,578) 6,066
Change % 66.1% 8.9% 274.6% (44.3%) 49.4%
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 June 30
2016 2015 Change $
Total profit for all segments$ 18,334 $ 12,268 $ 6,066
Elimination of intersegment profit (193) (610) 417
Net loss attributable to non-controlling interest 51 147 (96)
Net income attributable to controlling interest $ 18,192 $ 11,805 $ 6,387
Astec Industries, Inc.
Segment Revenues and Profits
For the six months ended June 30, 2016 and 2015
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
CorporateTotal
2016 Revenues 305,590 191,573 75,953 - 573,116
2015 Revenues 251,143 205,241 100,407 - 556,791
Change $ 54,447 (13,668) (24,454) - 16,325
Change % 21.7% (6.7%) (24.4%) - 2.9%
2016 Gross Profit 76,420 51,289 17,596 103 145,408
2016 Gross Profit % 25.0% 26.8% 23.2% - 25.4%
2015 Gross Profit 58,188 50,957 19,117 17 128,279
2015 Gross Profit % 23.2% 24.8% 19.0% - 23.0%
Change 18,232 332 (1,521) 86 17,129
2016 Profit (Loss) 41,536 20,485 2,433 (29,137) 35,317
2015 Profit (Loss) 27,356 21,650 864 (22,300) 27,570
Change $ 14,180 (1,165) 1,569 (6,837) 7,747
Change % 51.8% (5.4%) 181.6% (30.7%) 28.1%
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):
Six months ended June 30
2016 2015 Change $
Total profit for all segments$ 35,317 $ 27,570 $ 7,747
Recapture (elimination) of intersegment profit 502 (996) 1,498
Net loss attributable to non-controlling interest 116 335 (219)
Net income attributable to controlling interest $ 35,935 $ 26,909 $ 9,026
Astec Industries, Inc.
Backlog by Segment
June 30, 2016 and 2015
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Total
2016 Backlog 272,364 59,522 32,573 364,459
2015 Backlog 106,376 74,445 48,653 229,474
Change $ 165,988 (14,923) (16,080) 134,985
Change % 156.0% (20.0%) (33.1%) 58.8%

Source:Astec Industries, Inc.