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Astec Industries Reports Third Quarter 2016 Results

CHATTANOOGA, Tenn., Oct. 25, 2016 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their third quarter and year to date ended September 30, 2016.

Net sales for the third quarter of 2016 were $247.8 million compared to $211.4 million for the third quarter of 2015, a 17% increase. Earnings for the third quarter of 2016 were $6.8 million or $0.30 per diluted share compared to $2.3 million or $0.10 per diluted share in the third quarter of 2015, an increase of 200%.

Domestic sales increased 28% to $199.9 million for the third quarter of 2016 compared to $156.3 million for the third quarter of 2015. International sales decreased 13% to $47.9 million for the third quarter of 2016 compared to $55.1 million for the third quarter of 2015.

Net sales for the first nine months of 2016 were $820.9 million compared to $768.1 million for the first nine months of 2015, a 7% increase. Earnings for the first nine months of 2016 were $42.8 million or $1.85 per diluted share compared to $29.2 million or $1.26 per diluted share for the first nine months of 2015, a 47% increase.

Domestic sales increased 20% to $676.3 million for the first nine months of 2016 compared to $562.0 million for the first nine months of 2015. International sales were $144.6 million for the first nine months of 2016 compared to $206.1 million for the first nine months of 2015, a 30% decrease.

The Company’s domestic backlog increased 69% to $325.6 million at September 30, 2016 from $193.1 million at September 30, 2015. The international backlog at September 30, 2016 was $63.7 million compared to $58.7 million at September 30, 2015, an increase of 9%. Total backlog increased 55% to $389.3 million at September 30, 2016 from $251.8 million at September 30, 2015.

Consolidated financial information for the quarter and nine months ended September 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, President and Chief Executive Officer, stated, “We were pleased to improve our earnings by 200% in the third quarter versus the third quarter of last year. We were able to secure and ship orders at a more profitable rate during the quarter mainly due to favorable infrastructure and wood pellet equipment activity.”

Mr. Brock continued, “Despite our strong overall performance, we still face several challenges. Low oil and natural gas prices have hurt our Energy Group sales. The mining slowdown has hurt our Aggregate and Mining Group sales. The strong U.S. Dollar continues to affect our ability to export from our U.S. based operations. Nonetheless, our year-to-date revenues are up 7% and our year-to-date earnings are up 47% versus last year. These positive results are mainly due to good domestic markets for our equipment targeted at the infrastructure and wood pellet industries and execution of our margin improvement plans at our operating subsidiaries. Finally, we are also pleased to report that our backlog is up 55% versus last year indicating continued strong demand for our products.”

Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 25, 2016, at 10:00 A.M. Eastern Time to review its September 30, 2016 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 8, 2016 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Account #286, Conference ID# 10099. 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 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 and related equipment (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and equipment for the extraction, production and combustion 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 strong domestic demand, low oil prices, the global mining slow down, and the strong U.S. Dollar. 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 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.

Astec Industries, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
Sept 30Sept 30
2016
2015
Assets
Current assets
Cash and cash equivalents$52,474 $13,985
Investments 713 1,834
Receivables, net 111,753 105,226
Inventories 399,718 384,531
Prepaid expenses and other 25,909 50,398
Total current assets 590,567 555,974
Property and equipment, net 178,167 170,508
Other assets 93,105 60,805
Total assets$861,839 $787,287
Liabilities and equity
Current liabilities
Accounts payable - trade$53,496 $46,406
Other current liabilities 136,710 91,568
Total current liabilities 190,206 137,974
Non-current liabilities 26,702 36,919
Total equity 644,931 612,394
Total liabilities and equity$861,839 $787,287
Astec Industries, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months EndedNine Months Ended
Sept 30Sept 30
2016
2015
2016
2015
Net sales$247,752 $211,350 $820,868 $768,141
Cost of sales 192,363 166,212 620,071 594,724
Gross profit 55,389 45,138 200,797 173,417
Selling, general, administrative & engineering expenses 43,950 41,023 132,716 128,136
Income from operations 11,439 4,115 68,081 45,281
Interest expense 264 505 1,057 1,222
Other 508 844 1,443 3,212
Income before income taxes 11,683 4,454 68,467 47,271
Income taxes 4,845 2,162 25,694 18,070
Net income attributable to controlling interest$6,838 $2,292 $42,773 $29,201
Earnings per Common Share
Net income attributable to controlling interest
Basic$0.30 $0.10 $1.86 $1.27
Diluted$0.30 $0.10 $1.85 $1.26
Weighted average common shares outstanding
Basic 23,001 22,943 22,989 22,930
Diluted 23,145 23,121 23,138 23,118



Astec Industries, Inc.
Segment Revenues and Profits
For the three months ended September 30, 2016 and 2015
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
CorporateTotal
2016 Revenues 109,227 85,819 52,706 - 247,752
2015 Revenues 85,625 80,549 45,176 - 211,350
Change $ 23,602 5,270 7,530 - 36,402
Change % 27.6% 6.5% 16.7% - 17.2%
2016 Gross Profit 24,929 20,935 9,473 52 55,389
2016 Gross Profit % 22.8% 24.4% 18.0% - 22.4%
2015 Gross Profit 16,104 19,226 9,794 14 45,138
2015 Gross Profit % 18.8% 23.9% 21.7% - 21.4%
Change 8,825 1,709 (321) 38 10,251
2016 Profit (Loss) 9,858 7,651 805 (11,610) 6,704
2015 Profit (Loss) 2,116 3,790 1,941 (6,853) 994
Change $ 7,742 3,861 (1,136) (4,757) 5,710
Change % 365.9% 101.9% (58.5%) (69.4%) 574.4%
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 September 30
20162015Change $
Total profit for all segments$6,704 $994 $5,710
Recapture of intersegment profit 131 964 (833)
Net loss attributable to non-controlling interest 3 334 (331)
Net income attributable to controlling interest$6,838 $2,292 $4,546
Astec Industries, Inc.
Segment Revenues and Profits
For the nine months ended September 30, 2016 and 2015
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
CorporateTotal
2016 Revenues 414,817 277,393 128,658 - 820,868
2015 Revenues 336,768 285,790 145,583 - 768,141
Change $ 78,049 (8,397) (16,925) - 52,727
Change % 23.2% (2.9%) (11.6%) - 6.9%
2016 Gross Profit 101,349 72,224 27,069 155 200,797
2016 Gross Profit % 24.4% 26.0% 21.0% - 24.5%
2015 Gross Profit 74,292 70,182 28,912 31 173,417
2015 Gross Profit % 22.1% 24.6% 19.9% - 22.6%
Change 27,057 2,042 (1,843) 124 27,380
2016 Profit (Loss) 51,394 28,135 3,237 (40,745) 42,021
2015 Profit (Loss) 29,472 25,441 2,805 (29,154) 28,564
Change $ 21,922 2,694 432 (11,591) 13,457
Change % 74.4% 10.6% 15.4% (39.8%) 47.1%
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):
Nine months ended September 30
2016
2015
Change $
Total profit for all segments$42,021 $28,564 $13,457
Recapture (elimination) of intersegment profit 633 (32) 665
Net loss attributable to non-controlling interest 119 669 (550)
Net income attributable to controlling interest$42,773 $29,201 $13,572
Astec Industries, Inc.
Backlog by Segment
September 30, 2016 and 2015
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Total
2016 Backlog 286,895 61,409 40,956 389,260
2015 Backlog 145,073 68,110 38,592 251,775
Change $ 141,822 (6,701) 2,364 137,485
Change % 97.8% (9.8%) 6.1% 54.6%

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

Source:Astec Industries, Inc.