CHATTANOOGA, Tenn., July 25, 2017 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their second quarter and year to date ended June 30, 2017.
Net sales for the second quarter of 2017 were $301.9 million compared to $294.4 million for the second quarter of 2016, a 3% increase. Earnings for the second quarter of 2017 were $14.4 million or $0.62 per diluted share compared to $18.2 million or $0.79 per diluted share for the second quarter of 2016, a decrease of 22% per diluted share.
Domestic sales decreased 2% to $236.9 million for the second quarter of 2017 from $242.2 million for the second quarter of 2016. International sales were $65.0 million for the second quarter of 2017 compared to $52.2 million for the second quarter of 2016, an increase of 25%.
Net sales for the first half of 2017 were $620.3 million compared to $573.1 million for the first half of 2016, an 8% increase. Earnings for the first half of 2017 were $29.5 million or $1.27 per diluted share compared to $35.9 million or $1.55 per diluted share for the first half of 2016, a decrease of 18% per diluted share.
Domestic sales increased 3% to $490.4 million for the first half of 2017 from $476.4 million for the first half of 2016. International sales were $129.9 million for the first half of 2017 compared to $96.7 million for the first half of 2016, an increase of 34%.
The Company’s backlog at June 30, 2017 was $352.4 million compared to $371.3 million at June 30, 2016, a decrease of $18.9 million or 5%. Domestic backlog decreased 13% to $276.2 million at June 30, 2017 from $316.4 million at June 30, 2016. The international backlog at June 30, 2017 was $76.2 million compared to $54.9 million at June 30, 2016, an increase of 39%. All prior year backlog amounts have been recast to include the backlog of Power Flame Incorporated which was acquired on August 1, 2016.
Excluding pellet plant backlogs of $65.1 million and $144.4 million at June 30, 2017 and 2016 respectively, the Company’s June 30, 2017 backlog increased $60.4 million or 27% compared to June 30, 2016.
Consolidated financial information for the second quarter and year to date ended June 30, 2017 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, “Although we were not pleased with our net income for the quarter, we were pleased that we were able to grow sales while also shipping several new products during the quarter. While the costs associated with building new products and getting them going in the field negatively affected our results as we expected, significantly lower than expected margins on pellet plant installation were our primary disappointment for the quarter.”
Mr. Brock continued, “Excluding pellet plants, our backlog is up 27% versus last year. We are pleased that, excluding pellet plants, each of our financial reporting groups increased backlog versus last year. Non-pellet plant backlog increased both in domestic and international markets. Domestically, we continue to experience a good market for our products, mainly as a result of the federal highway bill and other state and local level funding mechanisms. Internationally, our strategy of keeping our sales and service structure in place despite the challenge of the strong U.S. Dollar, which increases our sales prices globally for export equipment, has allowed us to earn orders mainly as a result of pent up demand meeting improved global market conditions.”
In closing, Mr. Brock commented, “Given our current backlog and quote activity, we are optimistic on our outlook for the balance of 2017.”
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on Tuesday, July 25, 2017, 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 8, 2017 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #15968. 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 federal highway bill, sales of new products, 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, 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.
| Astec Industries, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| June 30 | June 30 | |||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 52,107 | $ | 68,473 | ||||
| Investments | 2,031 | 1,889 | ||||||
| Receivables, net | 149,306 | 127,490 | ||||||
| Inventories | 381,323 | 379,477 | ||||||
| Prepaid expenses and other | 26,320 | 29,702 | ||||||
| Total current assets | 611,087 | 607,031 | ||||||
| Property and equipment, net | 182,205 | 173,080 | ||||||
| Other assets | 85,693 | 66,517 | ||||||
| Total assets | $ | 878,985 | $ | 846,628 | ||||
| Liabilities and equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable - trade | $ | 65,188 | $ | 54,498 | ||||
| Other current liabilities | 110,670 | 124,720 | ||||||
| Total current liabilities | 175,858 | 179,218 | ||||||
| Non-current liabilities | 24,818 | 27,836 | ||||||
| Total equity | 678,309 | 639,574 | ||||||
| Total liabilities and equity | $ | 878,985 | $ | 846,628 | ||||
| Astec Industries, Inc. | ||||||||
| Condensed Consolidated Statements of Income | ||||||||
| (in thousands, except per share data) | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | Six Months Ended | |||||||
| June 30 | June 30 | |||||||
| 2017 | 2016 | 2017 | 2016 | |||||
| Net sales | $ | 301,909 | $ | 294,394 | $ | 620,310 | $ | 573,116 |
| Cost of sales | 236,385 | 220,942 | 479,014 | 427,708 | ||||
| Gross profit | 65,524 | 73,452 | 141,296 | 145,408 | ||||
| Selling, general, administrative & engineering expenses | 44,220 | 44,961 | 97,342 | 88,766 | ||||
| Income from operations | 21,304 | 28,491 | 43,954 | 56,642 | ||||
| Interest expense | 185 | 326 | 450 | 793 | ||||
| Other | 322 | 327 | 874 | 935 | ||||
| Income before income taxes | 21,441 | 28,492 | 44,378 | 56,784 | ||||
| Income taxes | 7,021 | 10,300 | 14,838 | 20,849 | ||||
| Net income attributable to controlling interest | $ | 14,420 | $ | 18,192 | $ | 29,540 | $ | 35,935 |
| Earnings per Common Share | ||||||||
| Net income attributable to controlling interest | ||||||||
| Basic | $ | 0.63 | $ | 0.79 | $ | 1.28 | $ | 1.56 |
| Diluted | $ | 0.62 | $ | 0.79 | $ | 1.27 | $ | 1.55 |
| Weighted average common shares outstanding | ||||||||
| Basic | 23,026 | 22,999 | 23,020 | 22,982 | ||||
| Diluted | 23,183 | 23,135 | 23,179 | 23,135 | ||||
| Astec Industries, Inc. | ||||||||||||||
| Segment Revenues and Profits | ||||||||||||||
| For the three months ended June 30, 2017 and 2016 | ||||||||||||||
| (in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Infrastructure Group | Aggregate and Mining Group | Energy Group | Corporate | Total | ||||||||||
| 2017 Revenues | 143,106 | 107,118 | 51,685 | - | 301,909 | |||||||||
| 2016 Revenues | 152,476 | 99,085 | 42,833 | - | 294,394 | |||||||||
| Change $ | (9,370 | ) | 8,033 | 8,852 | - | 7,515 | ||||||||
| Change % | (6.1 | %) | 8.1 | % | 20.7 | % | - | 2.6 | % | |||||
| 2017 Gross Profit | 26,820 | 25,791 | 12,864 | 49 | 65,524 | |||||||||
| 2017 Gross Profit % | 18.7 | % | 24.1 | % | 24.9 | % | - | 21.7 | % | |||||
| 2016 Gross Profit | 36,583 | 26,141 | 10,514 | 214 | 73,452 | |||||||||
| 2016 Gross Profit % | 24.0 | % | 26.4 | % | 24.5 | % | - | 25.0 | % | |||||
| Change | (9,763 | ) | (350 | ) | 2,350 | (165 | ) | (7,928 | ) | |||||
| 2017 Profit (Loss) | 9,893 | 11,367 | 3,165 | (10,260 | ) | 14,165 | ||||||||
| 2016 Profit (Loss) | 19,673 | 10,947 | 2,626 | (14,912 | ) | 18,334 | ||||||||
| Change $ | (9,780 | ) | 420 | 539 | 4,652 | (4,169 | ) | |||||||
| Change % | (49.7 | %) | 3.8 | % | 20.5 | % | 31.2 | % | (22.7 | %) | ||||
| 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 | ||||||||||||||
| 2017 | 2016 | Change $ | ||||||||||||
| Total profit for all segments | $ | 14,165 | $ | 18,334 | $ | (4,169 | ) | |||||||
| Recapture (elimination) of intersegment profit | 194 | (193 | ) | 387 | ||||||||||
| Net loss attributable to non-controlling interest | 61 | 51 | 10 | |||||||||||
| Net income attributable to controlling interest | $ | 14,420 | $ | 18,192 | $ | (3,772 | ) | |||||||
| Astec Industries, Inc. | ||||||||||||||
| Segment Revenues and Profits | ||||||||||||||
| For the six months ended June 30, 2017 and 2016 | ||||||||||||||
| (in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Infrastructure Group | Aggregate and Mining Group | Energy Group | Corporate | Total | ||||||||||
| 2017 Revenues | 308,349 | 207,731 | 104,230 | - | 620,310 | |||||||||
| 2016 Revenues | 305,590 | 191,573 | 75,953 | - | 573,116 | |||||||||
| Change $ | 2,759 | 16,158 | 28,277 | - | 47,194 | |||||||||
| Change % | 0.9 | % | 8.4 | % | 37.2 | % | - | 8.2 | % | |||||
| 2017 Gross Profit | 64,621 | 50,814 | 25,751 | 110 | 141,296 | |||||||||
| 2017 Gross Profit % | 21.0 | % | 24.5 | % | 24.7 | % | - | 22.8 | % | |||||
| 2016 Gross Profit | 76,420 | 51,289 | 17,596 | 103 | 145,408 | |||||||||
| 2016 Gross Profit % | 25.0 | % | 26.8 | % | 23.2 | % | - | 25.4 | % | |||||
| Change | (11,799 | ) | (475 | ) | 8,155 | 7 | (4,112 | ) | ||||||
| 2017 Profit (Loss) | 28,073 | 19,795 | 5,894 | (24,689 | ) | 29,073 | ||||||||
| 2016 Profit (Loss) | 41,536 | 20,485 | 2,433 | (29,137 | ) | 35,317 | ||||||||
| Change $ | (13,463 | ) | (690 | ) | 3,461 | 4,448 | (6,244 | ) | ||||||
| Change % | (32.4 | %) | (3.4 | %) | 142.3 | % | 15.3 | % | (17.7 | %) | ||||
| 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 | ||||||||||||||
| 2017 | 2016 | Change $ | ||||||||||||
| Total profit for all segments | $ | 29,073 | $ | 35,317 | $ | (6,244 | ) | |||||||
| Recapture of intersegment profit | 366 | 502 | (136 | ) | ||||||||||
| Net loss attributable to non-controlling interest | 101 | 116 | (15 | ) | ||||||||||
| Net income attributable to controlling interest | $ | 29,540 | $ | 35,935 | $ | (6,395 | ) | |||||||
| Astec Industries, Inc. | ||||||||||||||
| Backlog by Segment | ||||||||||||||
| June 30, 2017 and 2016 | ||||||||||||||
| (in thousands) | ||||||||||||||
| (unaudited) | ||||||||||||||
| Infrastructure Group | Aggregate and Mining Group | Energy Group | Total | |||||||||||
| 2017 Backlog | 216,797 | 92,366 | 43,192 | 352,355 | ||||||||||
| 2016 Backlog | 272,364 | 59,522 | 39,432 | 371,318 | ||||||||||
| Change $ | (55,567 | ) | 32,844 | 3,760 | (18,963 | ) | ||||||||
| Change % | (20.4 | %) | 55.2 | % | 9.5 | % | (5.1 | %) | ||||||