Astec Industries Records Drop In Sales, Earnings For 1st Quarter

Tuesday, April 22, 2014

Astec Industries, Inc. (Nasdaq:ASTE) on Tuesday reported results for the first quarter ended March 31, including a drop in sales and earnings.

Net sales for the first quarter of 2014 were $238.7 million compared to $247.8 million for the first quarter of 2013, a four percent decrease. Earnings for the first quarter of 2014 were $9.5 million or $0.41 per diluted share compared to $13.2 million for the first quarter of 2013 or $0.57 per diluted share, a decrease of 28 percent per diluted share.

Domestic sales increased eight percent to $175.5 million for the first quarter of 2014 from $161.9 million for the first quarter of 2013. International sales were $63.2 million for the first quarter of 2014 compared to $85.9 million for the first quarter of 2013, a decrease of 26 percent.

The company's backlog increased eight percent from $276.5 million at March 31, 2013 to $299.6 million at March 31, 2014. The domestic backlog increased 18% from $167.3 million at March 31, 2013 to $196.9 million at March 31, 2014. The international backlog at March 31, 2014 was $102.7 million, a 6% decrease from the March 31, 2013 international backlog of $109.2 million.

Commenting on the announcement, Benjamin G. Brock, chief executive officer, stated, "We are pleased with our growth in domestic revenues compared to last year although we continue to experience headwinds in our international sales efforts driven by the strong dollar and weakness in certain markets like Canada and Australia. Although total sales decreased slightly we held our gross margin steady which is a testament to our focus on lean manufacturing and cost management. Our presence at ConExpo in early March added $4 million to our S,G,A&E expenses for the quarter, however, we were pleased by the strong attendance in our booth and the interactions we had with customers.

"With the April 1st addition of Telestack headquartered in Omagh, Northern Ireland, we have demonstrated our commitment to further global expansion in our core products to better serve our target industries of Infrastructure, Aggregate and Mining, and Energy. Telestack's quality and customer service make it a natural fit for Astec. We expect them to be immediately accretive to earnings and to positively reinforce our backlog and outlook for the remainder of the year."

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 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).
 
Astec Industries, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
 
  Mar 31 Mar 31
  2014 2013
Assets    
Current assets    
Cash and cash equivalents  $ 44,969  $ 73,175
Investments  1,462  1,573
Receivables, net  109,080  104,599
Inventories  361,209  326,068
Prepaid expenses and other  28,717  25,159
Total current assets  545,437  530,574
Property and equipment, net  187,895  186,192
Other assets  41,372  40,890
Total assets  $ 774,704  $ 757,656
Liabilities and equity    
Current liabilities    
Accounts payable - trade  $ 59,364  $ 50,781
Other current liabilities  93,596  111,451
Total current liabilities  152,960  162,232
Non-current liabilities  32,490  31,999
Total equity  589,254  563,425
Total liabilities and equity  $ 774,704  $ 757,656
 
 
Astec Industries, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
 
  Three Months Ended
  Mar 31
  2014 2013
Net sales  $ 238,673  $ 247,833
Cost of sales  181,916  189,266
Gross profit  56,757  58,567
Selling, general, administrative & engineering expenses  43,424  40,367
Income from operations  13,333  18,200
Interest expense  73  70
Other  812  672
Income before income taxes  14,072  18,802
Income taxes  4,527  5,631
Net income attributable to controlling interest  $ 9,545  $ 13,171
     
     
     
     
Earnings per Common Share    
Net income attributable to controlling interest    
Basic  $ 0.42  $ 0.58
Diluted  $ 0.41  $ 0.57
     
     
Weighted average common shares outstanding    
Basic  22,786  22,723
Diluted  23,102  23,080
 
 
Astec Industries, Inc.
Segment Revenues and Profits
For the three months ended March 31, 2014 and 2013
(in thousands)
(unaudited)
 
Infrastructure Group
Aggregate and Mining
Group

Energy Group

Corporate

Total
2014 Revenues  98,791  93,108  46,774  --  238,673
2013 Revenues  109,320  90,762  47,751  --  247,833
Change $  (10,529)  2,346  (977)  --  (9,160)
Change % (9.6%) 2.6% (2.0%)  -- (3.7%)
           
2014 Gross Profit  22,679  23,424  10,642  12  56,757
2014 Gross Profit % 23.0% 25.2% 22.8%  -- 23.8%
2013 Gross Profit  26,685  23,040  8,844  (2)  58,567
2013 Gross Profit % 24.4% 25.4% 18.5%  -- 23.6%
Change  (4,006)  384  1,798  14  (1,810)
           
2014 Profit (Loss)  8,796  9,101  1,923  (9,117)  10,703
2013 Profit (Loss)  12,878  9,057  1,191  (9,260)  13,866
Change $  (4,082)  44  732  143  (3,163)
Change % (31.7%) 0.5% 61.5% 1.5% (22.8%)
           
           
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
    2014 2013 Change $
Total profit for all segments  $ 10,703  $ 13,866  $ (3,163)
Elimination of intersegment profit  (1,156)  (615)  (541)
Net income attributable to non-controlling interest  (2)  (80)  78
Net income attributable to controlling interest  $ 9,545  $ 13,171  $ (3,626)
 
 
Astec Industries, Inc.
Backlog by Segment
March 31, 2014 and 2013
(in thousands)
(Unaudited)
 
Infrastructure Group
Aggregate and Mining
Group

Energy Group

Total
2014 Backlog  $ 144,598  $ 98,903  $ 56,135  $ 299,636
2013 Backlog  120,244  93,867  62,414  276,525
Change $  24,354  5,036  (6,279)  23,111
Change % 20.3% 5.4% (10.1%) 8.4%
 
 
Astec Industries, Inc.
Segment Revenues and Profits
2013
(in thousands)
(unaudited)
 
Infrastructure Group
Aggregate and Mining
Group

Energy Group

Corporate

Total
Q2 Revenues  103,754  99,884  44,489  --  248,127
Q3 Revenues  83,319  79,792  50,066  --  213,177
Q4 Revenues  102,006  80,076  41,779  --  223,861
           
Q2 Gross Profit  19,514  25,615  10,311  2  55,442
Q2 Gross Profit % 18.8% 25.6% 23.2%  -- 22.3%
Q3 Gross Profit  18,552  19,584  7,667  (16)  45,787
Q3 Gross Profit % 22.3% 24.5% 15.3%  -- 21.5%
Q4 Gross Profit  20,676  19,610  7,103  (66)  47,323
Q4 Gross Profit % 20.3% 24.5% 17.0%  -- 21.1%
           
Q2 Profit (Loss)  6,103  11,141  2,235  (8,190)  11,289
Q3 Profit (Loss)  5,919  6,765  456  (5,935)  7,205
Q4 Profit (Loss)  7,914  6,068  123  (6,980)  7,125
           
           
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
Three months ended
September 30
Three months ended
December 31
    2013 2013 2013
Total profit for all segments  $ 11,289  $ 7,205  $ 7,125
Elimination of intersegment profit  (136)  (678)  1,159
Net income attributable to non-controlling interest  (61)  (13)  (19)
Net income attributable to controlling interest  $ 11,092  $ 6,514  $ 8,265
 
Astec Industries, Inc.
Backlog by Segment
 2013  
(in thousands)
(Unaudited)
 
Infrastructure Group
Aggregate and Mining
Group

Energy Group

Total
Q2 Backlog  $ 99,605  $ 88,706  $ 52,312  $ 240,623
Q3 Backlog  114,138  69,583  44,816  228,537
Q4 Backlog  137,119  105,022  48,101  290,242

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