Astec Industries Has Rise In Sales, Drop In Earnings

  • Tuesday, October 21, 2014

Astec Industries, Inc. (Nasdaq:ASTE) on Tuesday reported results for the third quarter ended Sept. 30, including a rise in sales, but a drop in earnings.

Net sales for the third quarter of 2014 were $220.2 million compared to $213.2 million for the third quarter of 2013, a three percent increase. Earnings for the third quarter of 2014 were $1.9 million or $0.08 per diluted share compared to $6.5 million or $0.28 per diluted share in the third quarter of 2013, a decrease of 71 percent.

Domestic sales increased eight percent to $142.6 million for the third quarter of 2014 compared to $132.4 million for the third quarter of 2013. International sales decreased four percent to $77.6 million for the third quarter of 2014 compared to $80.8 million for the third quarter of 2013.

Net sales for the first nine months of 2014 were $736.1 million compared to $709.1million for the first nine months of 2013, a four percent increase. Earnings for the first nine months of 2014 were $26.0 million or $1.12 per diluted share compared to $30.8 million or $1.33 per diluted share in the first nine months of 2013, a 16 percent decrease.

Domestic sales increased 10% to $502.7 million for the first nine months of 2014 compared to $456.6 million for the first nine months of 2013. International sales were $233.4 million for the first nine months of 2014 compared to $252.5 million for the first nine months of 2013, an eight percent decrease.

The company's gross profit for the third quarter of 2014 was $43.3 million or 19.7 percent compared to $45.8 million or 21.5 percent for the third quarter of 2013, a decrease of $2.5 million or 180 basis points. The decrease in gross profit is attributable to the Infrastructure Group with the Aggregate and Mining Group and the Energy Group meeting or exceeding third quarter of 2013 gross profit levels. The Infrastructure Group's gross profit was negatively impacted by a reduction in sales volume combined with pricing pressures in the infrastructure market.

The company's effective income tax rate increased from 34.6% for the third quarter of 2013 to 64 percent for the third quarter of 2014. The effective tax rate for the first nine months of 2014 was 37.9 percent compared to 33.4 percent for the first nine months of 2013. This increase was due to net operating losses in certain foreign jurisdictions that could not be utilized to offset taxable income in the United States, adjustments to the company's tax reserves and the continued delay in passage of a research and development credit in 2014.

The company's domestic backlog increased 42 percent, from $132.9 million at September 30, 2013 to $189.3 million at September 30, 2014. The international backlog at September 30, 2014 was $105.7 million compared to $98.1 million at September 30, 2013 for an increase of eight percent. Total backlog increased 28 percent to $295 million at September 30, 2014 from $231 million at September 30, 2013.

Commenting on the announcement of quarterly results, Benjamin G. Brock, president and chief executive officer, stated, "We are disappointed in our net income for the third quarter. Our Energy and our Aggregate and Mining Groups performed okay while our Infrastructure Group lagged due primarily to the lack of a federal highway bill, pricing pressure as a result, and product mix. As we've previously reported, we are still unable to recognize the revenue associated with our new $60 million pellet plant. This lack of recognition continues to hamper the Infrastructure Group's 2014 operating results. A 64 percent tax rate for the quarter was another challenge to our earnings in the quarter.

"Despite our third quarter results, we are encouraged about our overall business prospects for the remainder of the year and 2015. Our backlog is up 28 percent versus last year with increases in both domestic and international markets. Also, our higher margin parts sales have recovered and are ahead of last year's pace. These developments, along with our focus on lean initiatives, lead us to feel optimistic about both sales growth and margin improvement."

Business/Government
Rain Barrel Distribution Day Will Be May 4
  • 3/18/2024

The Chattanooga Stormwater Division announces its annual Rain Barrel Distribution Day will take place on Saturday, May 4, from 9 a.m.-1 p.m. at the Development Resource Center, 1250 Market St. ... more

February Tennessee Revenues Were Less Than Budget Estimates
  • 3/18/2024

Tennessee Department of Finance and Administration Commissioner Jim Bryson on Monday announced that February revenues were less than budgeted estimates. Overall February state revenues were $1.325 ... more

WCSO To Hold Awards And Recognition Ceremony March 20
  • 3/18/2024

The Walker County Sheriff’s Office will have an awards and recognition ceremony on Wednesday at 6:30 p.m. at the Walker County Civic Center, 10052 N. Highway 27 in Rock Spring. Civilian ... more