ASTE - Astec Industries Reports First Quarter 2019 Results

April, 23 2019 07:00 AM Astec Industries Inc.

CHATTANOOGA, Tenn., April 23, 2019 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq: ASTE) today reported results for their first quarter ended March 31, 2019.

Net sales for the first quarter of 2019 were $325.8 million compared to $325.5 million for the first quarter of 2018. Domestic sales decreased 2.7% to $262.8 million for the first quarter of 2019 from $270.1 million for the first quarter of 2018. International sales increased 13.7% to $63.0 million for the first quarter of 2019 from $55.4 million for the first quarter of 2018.

Earnings for the first quarter of 2019 were $14.3 million or $0.63 per diluted share, compared to $20.3 million or $0.87 per diluted share in the first quarter of 2018, a decrease in earnings per share of 27.6%. As adjusted for the impact of pellet plant activity in the first quarter of 2018, earnings per diluted share decreased $0.33 or 34.4%.

Commenting on the announcement of the quarterly results, Richard J. Dorris, Interim Chief Executive Officer, stated, “We are disappointed that our performance in the first quarter did not meet our expectations. All three segments experienced pricing pressure from competitors in a tighter market and temporary weather related shutdowns at seven of our subsidiaries impacted our ability to build and ship equipment.”

Mr. Dorris continued, “Lower than expected volumes impacted our gross margins at several of our subsidiaries. As we’ve previously discussed, our SGA&E is also temporarily at a higher run rate than normal due to our ongoing strategic sourcing project. Bookings were also affected by the weather as customers were unable to work in unusually wet or icy conditions in much of the U.S.”

The Company’s backlog at March 31, 2019 was $236.5 million, a decrease of $208.4 million or 46.8% compared to the March 31, 2018 backlog of $444.9 million. Domestic backlog decreased 52.6% to $161.8 million at March 31, 2019 from $341.1 million at March 31, 2018. The international backlog at March 31, 2019 was $74.7 million compared to $103.8 million at March 31, 2018, a decrease of 28.0%. Adjusted for pellet plant backlog included in the March 31, 2018 backlog, the Company’s backlog decreased $143.8 million or 37.8%.

Mr. Dorris concluded, “While we are paying close attention to the decrease in our backlog, we note that we experienced historical high points in our backlogs in the first quarter of 2018. We have already made a number of moves to adjust our capacity and, while we’ve seen some positive developments in recent order intake, we will continue to monitor the backlog and make adjustments where necessary.”

Consolidated financial information for the first quarter ended March 31, 2019 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 April 23, 2019, at 10:00 A.M. Eastern Time to review its first 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, May 7, 2019 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Replay ID# 47335. 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., (www.astecindustries.com), is a manufacturer of specialized equipment for asphalt road building; aggregate processing; oil, gas and water well drilling and concrete production. Astec's manufacturing operations are divided into three primary business segments: road building, (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and equipment for the extraction and production of fuels 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 (i) product demand and pricing pressure, (ii) the effect of its strategic sourcing project (iii) efforts to adjust manufacturing capacity, and (iv) its backlog activity. 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, 2018.

For Additional Information Contact:

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)


Mar 31
Mar 31


2019


2018

Assets


Current assets


Cash and cash equivalents
$
28,606

$
41,940

Investments

1,589


1,751

Receivables, net

137,211


153,854

Inventories

366,835


411,159

Prepaid expenses and other

41,832


23,533

Total current assets

576,073


632,237

Property and equipment, net

192,143


189,287

Other assets

104,089


96,841

Total assets
$
872,305

$
918,365

Liabilities and equity


Current liabilities


Accounts payable - trade
$
76,451

$
68,833

Other current liabilities

114,342


117,609

Total current liabilities

190,793


186,442

Long-term debt, less current maturities

56,629


1,357

Non-current liabilities

25,617


22,490

Total equity

599,266


708,076

Total liabilities and equity
$
872,305

$
918,365













Astec Industries, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)


Three Months Ended

Mar 31


2019


2018

Net sales
$
325,780

$
325,453

Cost of sales

249,254


247,448

Gross profit

76,526


78,005

Selling, general, administrative & engineering expenses

58,348


52,078

Income from operations

18,178


25,927

Interest expense

(648
)

(150
)
Other

525


512

Income before income taxes

18,055


26,289

Income taxes

3,781


6,022

Net income attributable to controlling interest
$
14,274

$
20,267













Earnings per Common Share


Net income attributable to controlling interest


Basic
$
0.63

$
0.88

Diluted
$
0.63

$
0.87







Weighted average common shares outstanding


Basic

22,498


23,045

Diluted

22,646


23,236

Astec Industries, Inc.

Segment Revenues and Profits

For the three months ended March 31, 2019 and 2018

(in thousands)

(unaudited)


Infrastructure Group
Aggregate and Mining Group
Energy Group
Corporate Group
Total

2019 Revenues

154,994


106,531


64,255


-

325,780


2018 Revenues

147,094


119,067


59,292


-

325,453


Change $

7,900


(12,536
)

4,963


-

327


Change %

5.4
%

(10.5
%)

8.4
%

-

0.1
%








2019 Gross Profit

35,506


25,545


15,479


(4
)
76,526


2019 Gross Profit %

22.9
%

24.0
%

24.1
%

-

23.5
%

2018 Gross Profit

33,280


29,289


15,286


150

78,005


2018 Gross Profit %

22.6
%

24.6
%

25.8
%

-

24.0
%

Change

2,226


(3,744
)

193


(154
)
(1,479
)








2019 Profit (Loss)

15,238


8,678


3,394


(13,469
)
13,841


2018 Profit (Loss)

14,852


13,110


4,611


(11,248
)
21,325


Change $

386


(4,432
)

(1,217
)

(2,221
)
(7,484
)

Change %

2.6
%

(33.8
%)

(26.4
%)

(19.7
%)
(35.1
%)















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 March 31





2019


2018

Change $


Total profit for all segments

$
13,841

$
21,325

$
(7,484
)


Recapture (elimination) of intersegment profit

377


(1,109
)

1,486



Net loss attributable to non-controlling interest

56


51


5



Net income attributable to controlling interest
$
14,274

$
20,267

$
(5,993
)






























Astec Industries, Inc.


Backlog by Segment


March 31, 2019 and 2018


(in thousands)


(unaudited)



Infrastructure Group
Aggregate and Mining Group
Energy Group
Total


2019 Backlog

80,553


103,640


52,355


236,548



2018 Backlog

230,649


138,687


75,591


444,927



Change $

(150,096
)

(35,047
)

(23,236
)

(208,379
)


Change %

(65.1
%)

(25.3
%)

(30.7
%)

(46.8
%)


2018 Pellet Backlog

64,600


-


-


64,600



2018 Backlog as Adjusted

166,049


138,687


75,591


380,327



As Adjusted Change $

(85,496
)

(35,047
)

(23,236
)

(143,779
)


As Adjusted Change %

(51.5
%)

(25.3
%)

(30.7
%)

(37.8
%)






























Astec Industries, Inc.





Reconciliation of GAAP EPS to EPS As Adjusted





For the three months ended March 31, 2018





(unaudited)





Fully Diluted EPS
$
0.87






EPS impact of Pellet Activity

0.09






EPS As Adjusted
$
0.96

Company Name:	Astec Industries Inc.
Stock Symbol:	ASTE
Market:	NASDAQ
Website:	astecindustries.com

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