Astec Industries Reports Second Quarter 2013 Results

PR Newswire

CHATTANOOGA, Tenn., July 23, 2013 /PRNewswire/ -- Astec Industries, Inc. (ASTE) today reported results for their second quarter ended June 30, 2013. 

Net sales for the second quarter of 2013 were $248.1 million compared to $238.3 million for the second quarter of 2012, a 4% increase.  Earnings from continuing operations for the second quarter of 2013 were $11.1 million or $0.48 per diluted share compared to $9.5 million or $0.41 per diluted share for the second quarter of 2012, an increase of 17% per diluted share. 

Domestic sales increased 5% to $162.3 million for the second quarter of 2013 from $154.4 million for the second quarter of 2012.  International sales were $85.8 million for the second quarter of 2013 compared to $83.9 million for the second quarter of 2012, an increase of 2%.

Net sales for the first half of 2013 were $496.0 million compared to $490.2 million for the first half of 2012, a 1% increase.  Earnings from continuing operations for the first half of 2013 were $24.3 million or $1.05 per diluted share compared to $21.5 million or $0.93 per diluted share for the first half of 2012, an increase of 13% per diluted share. 

Domestic sales increased 5% to $324.3 million for the first half of 2013 from $309.4 million for the first half of 2012.  International sales were $171.7 million for the first half of 2013 compared to $180.8 million for the first half of 2012, a decrease of 5%.

The Company's domestic backlog decreased 5%, from $147.1 million at June 30, 2012 to $140.3 million at June 30, 2013.  The international backlog at June 30, 2013 was $100.3 million, a 7% decrease from the June 30, 2012 international backlog of $107.7 million.  The June 30, 2012 backlog has been restated for the sale of American Augers late in 2012.

Consolidated financial information for the second quarter ended June 30, 2013 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "As we discussed in our first quarter conference call, our second quarter performance was very similar to our first quarter.  We were able to reduce our S,G,A and E expenses compared to the first quarter of 2013 but our gross margin came in below our expectations in the Asphalt Group due to product mix and decreased overhead absorption."

Dr. Brock continued, "Many areas of the Central and Eastern United States have experienced historically high rainfall, delaying construction work.  This has also delayed many of our shipments.  However, on a positive note, customers are seeing a slight pickup in residential and commercial work.  With the delayed work for the first half of the year we expect to see their business much stronger in the second half.  Hopefully this will improve demand during the fourth quarter and into next year.  We continue to be optimistic for our growth in the energy business with our new pellet plant, high tech drill rigs, pump trailers, water heaters, and gas processing heaters.  Unfortunately, we see the near term orders being down slightly with a pickup in demand in the fourth quarter.  We are continuing to reduce expenses in anticipation of this."

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on July 23, 2013 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 6, 2013 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 417663.  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. is a manufacturer of specialized equipment for building and restoring the world's infrastructure.  Astec's manufacturing operations are divided into four primary business segments:  aggregate processing and mining equipment; asphalt production equipment; mobile asphalt paving equipment; and oil, gas and water drilling equipment (Underground Group).  Additionally, the Other Group contains one subsidiary that manufactures equipment used for wood processing and recycling and one that is a company-owned dealership located in Australia.

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 its backlog, its efforts to reduce expenses, the delay in shipments caused by the weather, the increase in demand in its customers' residential and commercial sectors, and the growth in its energy business.  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, rising oil 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, 2012. 

  











Astec Industries, Inc.



Consolidated Balance Sheets



(in thousands)



(unaudited)







Jun 30

Jun 30




2013

2012



Assets





Current assets





Cash and cash equivalents

$   41,157

$   35,916



Investments

16,989

2,024



Receivables, net

102,795

119,983



Inventories

318,710

322,086



Prepaid expenses and other

31,494

26,377



Total current assets

511,145

506,386



Property and equipment, net

185,033

191,289



Other assets

41,954

43,171



Total assets

$ 738,132

$ 740,846



Liabilities and equity





Current liabilities





Accounts payable - trade

$   45,776

$   51,824



Other current liabilities

93,803

102,811



Total current liabilities

139,579

154,635



Non-current liabilities

32,531

33,458



Total equity

566,022

552,753



Total liabilities and equity

$ 738,132

$ 740,846























Astec Industries, Inc.



Consolidated Statements of Income



(in thousands, except per share data)



(unaudited)







Three Months Ended

Six Months Ended


Jun 30

Jun 30


2013

2012

2013

2012

Net sales

$ 248,127

$ 238,275

$ 495,960

$ 490,243

Cost of sales

192,685

185,214

381,951

378,586

Gross profit

55,442

53,061

114,009

111,657

Selling, general, administrative & engineering expenses

37,795

38,456

78,162

78,599

Income from operations

17,647

14,605

35,847

33,058

Interest expense

76

42

147

88

Other

(29)

558

644

1,393

Income from continuing operations before income taxes

17,542

15,121

36,344

34,363

Income taxes on continuing operations

6,450

5,603

12,081

12,834

Net income from continuing operations

11,092

9,518

24,263

21,529

Income from discontinued operations, (net of tax of $406 for the quarter and $479 for the year)

-

848

-

1,082

Net income attributable to controlling interest

$   11,092

$   10,366

$   24,263

$   22,611
















Earnings per Common Share





Net income from continuing operations





          Basic

$       0.49

$       0.42

$       1.07

$       0.95

          Diluted

$       0.48

$       0.41

$       1.05

$       0.93











Income from discontinued operations, net of tax





          Basic

$          -

$       0.04

$          -

$       0.05

          Diluted

$          -

$       0.04

$          -

$       0.05











Net income attributable to controlling interest





          Basic

$       0.49

$       0.46

$       1.07

$       1.00

          Diluted

$       0.48

$       0.45

$       1.05

$       0.98











Weighted average common shares outstanding





          Basic

22,752

22,691

22,738

22,667

          Diluted

23,069

23,041

23,075

23,047











 

  








Astec Industries, Inc.

Segment Revenues and Profits

For the three months ended June 30, 2013 and 2012

(in thousands)

(unaudited)


Asphalt Group

Aggregate and
Mining Group

Mobile Asphalt
Paving Group

Underground Group

All Others

Total

2013 Revenues

63,153

99,884

45,750

17,094

22,246

248,127

2012 Revenues

59,431

94,860

45,160

19,230

19,594

238,275

Change $

3,722

5,024

590

(2,136)

2,652

9,852

Change %

6.3%

5.3%

1.3%

(11.1%)

13.5%

4.1%








2013 Gross Profit

11,878

25,615

11,171

2,232

4,546

55,442

2013 Gross Profit %

18.8%

25.6%

24.4%

13.1%

20.4%

22.3%

2012 Gross Profit

11,775

25,818

10,151

2,054

3,263

53,061

2012 Gross Profit %

19.8%

27.2%

22.5%

10.7%

16.7%

22.3%

Change

103

(203)

1,020

178

1,283

2,381








2013 Profit (Loss)

4,061

11,141

4,608

(768)

(7,753)

11,289

2012 Profit (Loss)

3,902

11,567

4,082

(873)

(8,210)

10,468

Change $

159

(426)

526

105

457

821

Change %

4.1%

(3.7%)

12.9%

12.0%

5.6%

7.8%















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 June 30



2013

2012

Change $


Total profit for all segments

$                   11,289

$               10,468

$      821


Elimination of intersegment profit

(136)

(887)

751


Net income attributable to non-controlling interest

(61)

(63)

2


Net income from continuing operations

11,092

9,518

1,574


Income from discontinued operations, (net of tax of $406)

-

848

(848)


Net income attributable to controlling interest

$                   11,092

$               10,366

$      726
















Astec Industries, Inc.

Segment Revenues and Profits

For the six months ended June 30, 2013 and 2012

(in thousands)

(unaudited)


Asphalt Group

Aggregate and Mining Group

Mobile Asphalt Paving Group

Underground Group

All Others

Total

2013 Revenues

134,703

190,646

93,041

31,800

45,770

495,960

2012 Revenues

128,102

186,164

87,153

41,288

47,536

490,243

Change $

6,601

4,482

5,888

(9,488)

(1,766)

5,717

Change %

5.2%

2.4%

6.8%

(23.0%)

(3.7%)

1.2%








2013 Gross Profit

32,032

48,656

21,730

2,507

9,084

114,009

2013 Gross Profit %

23.8%

25.5%

23.4%

7.9%

19.8%

23.0%

2012 Gross Profit

28,171

49,555

20,756

5,137

8,038

111,657

2012 Gross Profit %

22.0%

26.6%

23.8%

12.4%

16.9%

22.8%

Change

3,861

(899)

974

(2,630)

1,046

2,352








2013 Profit (Loss)

15,202

20,198

8,829

(3,149)

(15,927)

25,153

2012 Profit (Loss)

11,293

21,138

8,003

(1,046)

(17,423)

21,965

Change $

3,909

(940)

826

(2,103)

1,496

3,188

Change %

34.6%

(4.4%)

10.3%

(201.1%)

8.6%

14.5%















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



2013

2012

Change $


Total profit for all segments

$                   25,153

$               21,965

$   3,188


Elimination of intersegment profit

(750)

(360)

(390)


Net income attributable to non-controlling interest

(140)

(76)

(64)


Net income from continuing operations

24,263

21,529

2,734


Income from discontinued operations, (net of tax of $479)

-

1,082

(1,082)


Net income attributable to controlling interest

$                   24,263

$               22,611

$   1,652























Astec Industries, Inc.

Backlog by Segment

June 30, 2013 and 2012

(in thousands)

(Unaudited)


Asphalt Group

Aggregate and Mining Group

Mobile Asphalt Paving Group

Underground Group

All Others

Total

2013 Backlog

103,270

88,706

3,086

26,811

18,750

240,623

2012 Backlog

115,428

97,394

5,055

23,415

13,508

254,800

Change $

(12,158)

(8,688)

(1,969)

3,396

5,242

(14,177)

Change %

(10.5%)

(8.9%)

(39.0%)

14.5%

38.8%

(5.6%)















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