Astec Industries Reports Fourth Quarter 2017 Results

CHATTANOOGA, Tenn., Feb. 20, 2018 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their fourth quarter and year ended December 31, 2017.

Net sales for the fourth quarter of 2017 were $312.4 million compared to $326.6 million for the fourth quarter of 2016, a 4.3% decrease. Domestic sales decreased 7.4% to $245.4 million for the fourth quarter of 2017 from $265.0 million for the fourth quarter of 2016. International sales were $67.0 million for the fourth quarter of 2017 compared to $61.6 million for the fourth quarter of 2016, an increase of 8.7%.

Earnings for the fourth quarter of 2017 were $10.9 million, or $0.47 per share, including an income tax benefit from U.S. Tax Reform legislation of $1.1 million, compared to $12.4 million, or $0.53 per diluted share, for the fourth quarter of 2016, a decrease of 11.3% per diluted share.

Net sales for 2017 were $1.185 billion compared to $1.147 billion for 2016, a 3.3% increase. Domestic sales decreased 1.0% to $932.3 million for 2017 from $941.3 million for 2016. International sales were $252.4 million for 2017 compared to $206.2 million for 2016, an increase of 22.5%.

Earnings for 2017 were $37.8 million, or $1.63 per diluted share, compared to $55.2 million, or $2.38 per diluted share, for 2016, a decrease of 31.5% per diluted share. As previously announced, the Company initiated significant design upgrades to its customers’ Georgia and Arkansas wood pellet plants to meet full production rates, which negatively impacted earnings per share by approximately $0.59 during the third quarter of 2017.

Commenting on the announcement, Benjamin G. Brock, Chief Executive Officer, stated, “We were pleased to exceed our previously announced earnings projection for the quarter while increasing our backlog to a historically strong $411.5 million. Given our backlog, quote activity and conversations with our customers in both domestic and international markets we are optimistic on our outlook. Our customers are experiencing good market conditions and we are excited for the opportunity to have improved results in 2018.”

The Company’s backlog at December 31, 2017 was $411.5 million compared to $361.8 million at December 31, 2016, an increase of $49.6 million or 13.7%. Domestic backlog increased 12.3% to $335.9 million at December 31, 2017 from $299.1 million at December 31, 2016. The international backlog at December 31, 2017 was $75.6 million compared to $62.7 million at December 31, 2016, an increase of 20.5%. Excluding pellet plant backlogs, the Company’s December 31, 2017 backlog increased $57.3 million, or 22.9%, compared to December 31, 2016. All backlog numbers for prior periods have been recast to include the backlog of RexCon, Inc. acquired in October, 2017.

Consolidated financial information for the fourth quarter and year ended December 31, 2017 and additional information related to segment revenues and profits are attached as addenda to this press release.

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on Tuesday, February 20, 2018 at 10:00 A.M. Eastern Time to review its fourth 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, March 6, 2018 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #25199. 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; wood processing and concrete production. 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, concrete 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. 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, 2016.

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.
Consolidated Balance Sheets
(in thousands)
(unaudited)
Dec 31Dec 31
20172016
Assets
Current assets
Cash and cash equivalents$62,280 $82,371
Investments 1,624 1,024
Receivables, net 119,952 110,673
Inventories 391,379 360,404
Prepaid expenses and other 27,734 22,361
Total current assets 602,969 576,833
Property and equipment, net 190,396 180,538
Other assets 96,214 86,230
Total assets$889,579 $843,601
Liabilities and equity
Current liabilities
Accounts payable - trade$60,417 $57,297
Other current liabilities 118,729 111,564
Total current liabilities 179,146 168,861
Non-current liabilities 23,668 25,899
Total equity 686,765 648,841
Total liabilities and equity$889,579 $843,601
Astec Industries, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
Three Months EndedTwelve Months Ended
Dec 31Dec 31
2017 2016 2017 2016
Net sales$312,375 $326,564 $1,184,739 $1,147,431
Cost of sales 249,625 262,092 941,610 882,162
Gross profit 62,750 64,472 243,129 265,269
Selling, general, administrative & engineering expenses 44,756 45,398 187,592 178,114
Income from operations 17,994 19,074 55,537 87,155
Interest expense 202 338 840 1,395
Other 702 63 2,725 1,506
Income before income taxes 18,494 18,799 57,422 87,266
Income taxes 7,572 6,413 19,627 32,107
Net income attributable to controlling interest$10,922 $12,386 $37,795 $55,159
Earnings per Common Share
Net income attributable to controlling interest
Basic$0.47 $0.54 $1.64 $2.40
Diluted$0.47 $0.53 $1.63 $2.38
Weighted average common shares outstanding
Basic 23,033 23,002 23,025 22,992
Diluted 23,194 23,154 23,184 23,142

Astec Industries, Inc.
Segment Revenues and Profits
For the three months ended December 31, 2017 and 2016
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
CorporateTotal
2017 Revenues$146,666 $96,515 $69,194 $- $312,375
2016 Revenues 194,090 82,367 50,107 - 326,564
Change $ (47,424) 14,148 19,087 - (14,189)
Change % (24.4%) 17.2% 38.1% - (4.3%)
2017 Gross Profit 26,632 19,140 16,601 377 62,750
2017 Gross Profit % 18.2% 19.8% 24.0% - 20.1%
2016 Gross Profit 34,498 19,128 10,752 94 64,472
2016 Gross Profit % 17.8% 23.2% 21.5% - 19.7%
Change (7,866) 12 5,849 283 (1,722)
2017 Profit (Loss) 11,096 6,388 5,864 (13,297) 10,051
2016 Profit (Loss) 20,088 6,742 908 (15,247) 12,491
Change $ (8,992) (354) 4,956 1,950 (2,440)
Change % (44.8%) (5.3%) 545.8% 12.8% (19.5%)

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 December 31
2017 2016 Change $
Total profit for all segments$ 10,051 $ 12,491 $ (2,440)
Recapture (elimination) of intersegment profit 803 (157) 960
Net loss attributable to non-controlling interest 68 52 16
Net income attributable to controlling interest$10,922 $12,386 $(1,464)

Astec Industries, Inc.
Segment Revenues and Profits
For the twelve months ended December 31, 2017 and 2016
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
CorporateTotal
2017 Revenues$ 553,691 $ 403,720 $ 227,328 $ - $ 1,184,739
2016 Revenues 608,908 359,760 178,763 - 1,147,431
Change $ (55,217) 43,960 48,565 - 37,308
Change % (9.1%) 12.2% 27.2% - 3.3%
2017 Gross Profit 93,027 93,792 55,774 536 243,129
2017 Gross Profit % 16.8% 23.2% 24.5% - 20.5%
2016 Gross Profit 135,848 91,352 37,820 249 265,269
2016 Gross Profit % 22.3% 25.4% 21.2% - 23.1%
Change (42,821) 2,440 17,954 287 (22,140)
2017 Profit (Loss) 26,641 35,748 16,219 (40,963) 37,645
2016 Profit (Loss) 71,482 34,877 4,145 (55,992) 54,512
Change $ (44,841) 871 12,074 15,029 (16,867)
Change % (62.7%) 2.5% 291.3% 26.8% (30.9%)

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):
Twelve months ended December 31
2017 2016 Change $
Total profit for all segments$37,645 $ 54,512 $ (16,867)
Recapture (elimination) of intersegment profit (55) 476 (531)
Net loss attributable to non-controlling interest 205 171 34
Net income attributable to controlling interest$37,795 $55,159 $(17,364)
Astec Industries, Inc.
Backlog by Segment
December 31, 2017 and 2016
(in thousands)
(unaudited)
Infrastructure
Group
Aggregate and Mining GroupEnergy
Group
Total
2017 Backlog$239,495 $116,987 $54,987 $411,469
2016 Backlog 232,224 88,951 40,656 361,831
Change $ 7,271 28,036 14,331 49,638
Change % 3.1% 31.5% 35.2% 13.7%


Source:Astec Industries, Inc.