July 26, 2016 - 7:01 AM EDT
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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: [email protected] 
or
David C. Silvious
Vice President and Chief Financial Officer
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: [email protected] 
or
Stephen C. Anderson
Vice President, Director of Investor Relations & Corporate Secretary
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: [email protected]

     
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%  
       

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Source: GlobeNewswire (July 26, 2016 - 7:01 AM EDT)

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