FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the
fiscal year ended December 31, 19941995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________ to
____________________
Commission file number 0-14714
ASTEC INDUSTRIES, INC. .
(Exact name of registrant as specified in its charter)
Tennessee 62-0873631
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 72787, 4101 Jerome Avenue, Chattanooga, Tennessee 37407
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615)(423) 867-4210
Securities registered pursuant to Section 12(b) of the Act:
Title of each class NONE
Name of each exchange on which registered
NONE
NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.20 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Exhibit Index Appears at Page 49
(Form 10-K Cover Page - Continued)
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
State theThe aggregate market value of the voting stock held by non-
affiliatesnon-affiliates
of the registrant. The aggregate market value shall be
computed by reference to the price at which the stockregistrant was sold,
or the average bid and asked prices of such stock, as of a specified
date within 60 days prior to the date of filing:
$93,105,764$68,094,670 based upon the closing sales price
inreported by the NASDAQ National Market System on March 10, 1995,11, 1996, using
beneficial ownership of stock rules adopted pursuant to Section 13 of
the Securities Exchange Act of 1934 to exclude voting stock owned
by all directors and executive officers of the registrant, some of
whom may not be held to be affiliates upon judicial determination.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date:
As of March 10, 199511, 1996
Common Stock, par value $.20 10,001,858-- 10,037,199 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents have been incorporated
by reference into the Parts of this Annual Report on Form 10-K
indicated:
Document
Form 10-K
Proxy Statement relating to Part III
Annual Meeting of Shareholders
to be held on April 27, 199525, 1996
ASTEC INDUSTRIES, INC.
19941995 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Executive Officers of the Registrant
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners
and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K
Appendix A
SIGNATURES
PART I Item 1. BUSINESS
General
Astec Industries, Inc. (the "Company") is a Tennessee corporation
which was incorporated in 1972. The
Company designs, engineers, manufactures and markets equipment and
components used primarily in road building
and related construction activities. The Company's products are used in
each phase of road building, from quarrying
and crushing the aggregate to application of the road surface. The
Company also manufactures certain equipment
and components unrelated to road construction, including trenching and
excavating equipment, environmental
remediation equipment, log loading and industrial heat transfer equipment.
The Company holds over 10070 United
States and foreign patents, and has been responsible for many technological
and engineering innovations in the
industry. The Company currently manufactures over 125135 different products
which it markets both domestically and
internationally. In addition to plant and equipment sales, the Company
manufactures and sells replacement parts for
equipment in each of its product lines. The distribution and sale of
replacement parts is an integral part of the
Company's business.
The Company's sevensix operating divisions and
subsidiaries each of which operates as an autonomous company, are: (i) the Astec division (effective January 1, 1995 Astec, Inc.),
which manufactures a line of hot mix asphalt
plants, soil purification and environmental remediation equipment and
related components; (ii) Telsmith, Inc., which
manufactures aggregate processing equipment for the production and
classification of sand, gravel and crushed stone
for road and other construction applications; (iii) Heatec, Inc., which
manufactures thermal oil heaters, asphalt heaters
and other heat transfer equipment used in the Company's asphalt mixing
plants and in other industries; (iv) Roadtec,
Inc., which manufactures milling machines used to recycle asphalt and
concrete, asphalt paving equipment and
material transfer vehicles; (v) Trencor, Inc., which manufactures chain and
wheel trenching equipment, excavating
equipment and log loaders;loaders and; (vi) Wibau-Astec
Maschinenfabrik GmbH, located in Germany, which represents
Astec in international sales and manufactures and sells Wibau
parts in Europe, Africa and the Middle East and Astec continuous
mix plants in Europe and the Eastern bloc countries; (vii) Gibat
Ohl Ingenieurgesellschaft fur Anlagentechnik mbH, located in
Germany,CEI Enterprises, Inc., which
manufactures heat transfer equipment and sells batchrecycled
rubber blending systems for the hot mix asphalt plants,
parts and controlsindustry. CEI was acquired
in Europe and the Eastern bloc countries.first quarter of 1995.
The Company's strategy is to become the high quality, low cost
producer in each of its product lines while
continuing to develop innovative new products for its customers. ManagementWith the
disposition of its foreign operations
described below, management believes that this strategy will provide the Company with a
competitive advantage in the marketplace and position itis well positioned
to capitalize on rebuilding the current need to
rebuild and enhance roadway infrastructure both in the United States and
abroad.
Disposition of Foreign Operating Subsidiaries
In 1993, the Company acquired a 50% ownership interest in
Wibau-Astec Maschinenfabrik GmbH, a newly
formed German limited liability company to engage in the manufacture and
marketing of asphalt plants and certain
related equipment in Granadau, Germany. The Company acquired the
remaining 50% interest in Wibau-Astec in
1994, making it a wholly owned subsidiary of the Company. In June 1995
the Company sold Wibau-Astec to Wirtgen
Gesellschaft mit beschr*nkter Haftung, a German equipment manufacturer.
See Note 2 to the Consolidated Financial
Statements included in the Company's Annual Report to Shareholders for
the fiscal year ended December 31, 1995,
which information is incorporated by reference under item 8 of this Report.
In an unrelated transaction, the Company acquired Gibat Ohl
Ingenieurgesellschaft fur Anlagentechnik mbH
located in Hasselroth, Germany in October 1994. The Gibat Ohl name was
changed to Astec-Europa in the third
quarter of 1995. In connection with the sale of Wibau-Astec, the
Company's technology was purchased by Astec-
Europa which manufactured asphalt batch plants and certain related
equipment. In February 1996, the Board of
Directors of the Company decided to abandon the operations of Astec-
Europa to avoid continuing losses related to its
operations. As a result of the Company's decision, on February 9, 1996, the
management of Astec-Europa filed a
request for bankruptcy in Germany. Due to the abandonment of Astec-
Europa, the Company will not recover any
amounts related to Astec-Europa's assets nor does it expect to be required to
liquidate any of Astec-Europa's
liabilities, except to the extent such liabilities were guaranteed by the
Company. Total losses recognized in 1995
related to Astec-Europa, including net losses from operations and the loss
on abandonment, were approximately
$9,945,000 before taxes and $6,037,000 after taxes. The Company does not
expect to incur any additional losses
related to this subsidiary. See Note 3 to the Consolidated Financial
Statements included in the Company's Annual
Report to Shareholders for the fiscal year ended December 31, 1995, which
information is incorporated by reference
under item 8 of this Report.
As a result of the disposition of Wibau-Astec and the abandonment
of Astec-Europa, the Company no longer
conducts foreign manufacturing operations and instead has decided to
concentrate all of its manufacturing activities,
whether or not related to international sales, with its more efficient
domestic operations.
Products
The Company operates in a single business segment. In 19941995 it
manufactured and marketed products in five
principal categories: (i) hot mix asphalt plants, soil purification and
environmental remediation equipment and related
components; (ii) mobile construction equipment, including asphalt pavers,
from Roadtec,
milling machines and material transfer
vehicles and other auxiliary equipment; (iii) hot oil heaters, asphalt heaters
and other heat transfer equipment; (iv)
aggregates processing equipment; and (v) chain and wheel trenching and
excavating equipment. The following table following
shows the Company's sales for each product category which accounted for
10% or more of consolidated revenue for
the periods indicated.
Years Ended December 31
(in thousands)
1995 1994 1993 1992
(in thousands)
Asphalt plants and components $110,321 $100,514 $88,116
$81,438Mobile construction equipment 29,706 30,291 22,120
Aggregate processing equipment 46,586 38,823 40,108 33,298
Trenching and excavating equipment 21,110 25,867 16,535 14,803
Mobile construction equipment 30,291 22,120 14,660
Financial information in connection with the Company's international sales
is included in Note 1 to "Notes to
Consolidated Financial Statements - Segment Information", appearing at
Page A-11 of this report.
Hot Mix Asphalt Plants
The Astec, divisionInc. designs, engineers, manufactures and markets a
complete line of portable, stationary and
relocatable hot mix asphalt plants and related components under the
"ASTEC" trademark. An asphalt mixing plant
typically consists of heating and storage equipment for liquid asphalt
(manufactured by Heatec), cold feed bins for
storing aggregates, a drum mixer for drying, heating and mixing, a
baghouse composed of air filters and other
pollution control devices, hot storage bins or silos for temporary storage of
hot mix asphalt and a control house. The
Company introduced the concept of plant portability in 1979. Its current
generation of portable asphalt plants is
marketed as the "Six Pack" and consists of six portable components which
can be disassembled and moved to the
construction site to reduce relocation expenses. Plant portability represents
an industry innovation developed and
successfully marketed by the Company.
The components in the Company's asphalt mixing plants are fully
automated and use microprocessor based
control systems for efficient operation. The plants are manufactured to
meet or exceed federal and state clean air
standards.
The Company has also developed specialized asphalt recycling
equipment for use with its hot mix asphalt
plants. Many of the existing Astec products are suited for blending,
vaporizing, drying and incinerating contaminated
products. As a result, the Astec, divisionInc. has developed a line of thermal
purification equipment for the remediation of
petroleum contaminated soil.
Mobile Construction Equipment
Roadtec, Inc. designs, engineers, manufactures and markets
asphalt pavers, material transfer vehicles and
milling machines. Roadtec engineers emphasize simplicity, productivity,
versatility and accessibility in product design
and use.
Asphalt Pavers. Asphalt pavers are used in the application of hot
mix asphalt to the road surface. Roadtec
pavers have been designed to minimize maintenance costs while exceeding
road surface smoothness requirements.
AIn 1994, Roadtec introduced several new effective and efficient paver has been introducedmodels, including one
which must be used with thea material transfer
vehicle. Other additional new
paver models have also been introduced in 1994.vehicle described below.
Material Transfer Vehicles. The "Shuttle Buggy" is a mobile, self-propelledself-
propelled material transfer vehicle which
allows continuous paving by separating truck unloading from the paving
process while remixing the asphalt surface
material. A typical asphalt paver must stop paving to permit truck
unloading of asphalt mix. By permitting continuous
paving, the "Shuttle Buggy" allows the asphalt paver to produce a smoother
road surface. Certain states are now
requiring the use of the "Shuttle Buggy" on their jobs.
Milling Machines. Roadtec milling machines are designed to
remove old asphalt from the road surface before
new asphalt mix is applied. They are manufactured with a simplified
control system, wide conveyors, direct drives
and a wide range of horsepower and cutting capabilities to provide
versatility in product application. Additional
models were introduced in 1994 to meet contractor needs.needs and additional
upgrades and options have been added in
1995.
Heat Transfer Equipment
Heatec, Inc. designs, engineers, manufactures and markets a
variety of heaters and heat transfer processing
equipment under the "HEATEC" trade name for use in various industries
including the asphalt industry.
CEI Enterprises, Inc. ("CEI") designs, engineers, manufactures
and markets heating equipment and storage
tanks mainly for the asphalt paving industry. CEI located in Albuquerque,
New Mexico was acquired by the Company
in the first quarter of 1995.
Asphalt Heating Equipment. Heatec manufactures a complete line
of heating and liquid storage equipment
for the asphalt paving industry. Heaters are offered in both direct-fired and
helical coil models while CEI's heating
equipment is hot oil, direct fired or electric. The equipment includes
portable and stationary tank models with
capacities up to 35,000 gallons each. Heaters are offered in both direct-fired and helical coil
models.
Industrial Heating Equipment. Heatec builds a wide variety of
industrial heaters to fit a broad range of
applications, including equipment for emulsion plants, roofing material
plants, refineries, chemical processing, rubber
plants and the agribusiness. Heatec has the technical staff to custom design
heating systems and has systems
operating as large as 40,000,000 BTU's per hour.
Aggregates Processing Equipment
Founded in 1906, Telsmith, has served the quarry business since 1906.
TelsmithInc. designs, engineers, manufactures
and markets a wide range of portable and
stationary equipment for the production and classification of sand, gravel,
and quarried stone and recycled concrete
and asphalt for road and other construction applications.applications worldwide.
Telsmith's products include jaw, cone and impact
crushers; several types of feeders which transport the aggregate from the storage sitevirgin, recycled, or
crushed material to theprimary, secondary, or
tertiary crushing equipment; vibrating screens to separate the aggregate into
various mixes; and washing and
conveying equipment. Telsmith markets its products individually and as
complete systems, incorporating
microprocessor based automated controls for the efficient operation of its
equipment.
Trenching and Excavating Equipment
Trencor, Inc. designs, engineers, manufactures and markets chain
and wheel trenching equipment, canal
excavators, rock saws, road miners and log loading equipment. In August
1994, Trencor acquired the product line
and related manufacturing rights, trademarks, patents, intellectual property
and engineering designs of Capitol
Trencher Corporation ("CTC"), also a manufacturer of trenching and
excavation equipment. This purchase excluded
the manufacturing plant and equipment operated by CTC. The acquisition of the CTC
product line strengthens and broadens Trencor's position in the
construction market. The fabrication
of the CTC product line has been relocated
to Trencor's new facility in Grapevine, Texas.
Chain Trenchers. Trencor chain trenching machines utilize a
heavy duty chain (equipped with cutting teeth
attached to steel plates) wrapped around a long moveable boom. These
machines, with weights up to 400,000
pounds, are capable of cutting a trench up to eight feet wide and thirty feet
deep through rock. Trencor also makes
foundation trenchers used in areas where drilling and blasting are
prohibited.
Wheel Trenchers. Trencor wheel trenching machines are used in
pipeline excavation in soil and soft rock.
The wheel trenchers weigh up to 390,000 pounds and have a trench
capacity of up to seven feet in width and ten feet
in depth.
Canal Excavator. Trencor canal excavators are used to make
finished and trimmed trapezoidal canal
excavations within close tolerances. The canals are primarily used for
irrigation systems.
Rock Saws. Trencor manufactures a rock saw which is utilized for
laying water and gas lines, fiber optics
cable, constructing highway drainage systems and for other applications.
Road Miners.Roadminers. Trencor manufactures four "Road Miner" models
weighing up to 400,000 pounds with an
attachment which allows it to cut a path up to twelve and a half feet wide
and five feet deep on a single pass. The
Road MinerRoadminer has applications in the road construction industry and in mining
and aggregates processing operations.
Log Loaders. Trencor also manufactures several different models
of log loaders. Its products include
mobile/truck mounted models, as well as track mounted and stationary
models, each of which is used in harvesting
and processing wood products. The equipment is sold under the Log-Hog
name.
Manufacturing
The Company manufactures many of the component parts and
related equipment for its products. In many
cases, the Company designs, engineers and manufactures custom
component parts and equipment to meet the
particular needs of individual customers. Manufacturing operations during
19941995 took place at seven separate
locations. The Company's manufacturing operations consist primarily of
fabricating steel components and the
assembly and testing of its products to ensure quality control standards have
been achieved.
Marketing
The Company markets its products both domestically and
internationally. The principal purchasers of the
Company's products include highway and heavy equipment contractors,
utility contractors, pipeline contractors, open
mine operators, quarry operators and foreign and domestic governmental
agencies. The Astec division (now Astec, Inc.) sells directly to its
customers with domestic, soil remediation and international sales
departments. Astec, Inc. also has a branch in
Chino, California to service customers in the western United States.
Telsmith products are sold through two leased
branch locations in San Francisco, California and Sharon, Massachusetts,
as well as through a combination of direct
sales, both domestic and international, and dealer sales. Heatec, CEI,
Roadtec and Trencor products are marketed
through a combination of direct sales and dealer sales. Approximately 18
manufacturers' representatives sell Heatec
products for applications in industries other than the asphalt industry with
such sales comprising approximately 30% of
Heatec's sales volume during 1994.1995. Direct sales employees are paid salaries
and are generally entitled to
commissions after obtaining certain sales quotas. See "Business -
Properties"
The Company's international sales efforts are decentralized with
each division and subsidiary maintaining responsibility for
its own international marketing efforts.
German Subsidiaries
Effective July 1, 1993, the Company entered into an
agreement with Putzmeister-Werk Maschinenfabrik GmbH
("Putzmeister"), a company organized under the laws of the
Federal Republic of Germany, to form a new German limited
liability company, Wibau-Astec, to be jointly owned by the
Company and Putzmeister (the "Joint Venture"). Wibau-Astec
designs, engineers and manufactures asphalt plants, stabilization
plants, asphalt and thermal heaters, hot storage systems and soil
remediation equipment (including their respective parts and
components) which it markets in Europe, Africa and the Middle
East. Initially Putzmeister owned 50% of the Joint Venture and
Astec owned 50%. In consideration for their respective
interests in the Joint Venture, Putzmeister contributed the
operating assets, other than real estate, and related liabilities of
its asphalt plant manufacturing business located in Germany to
the Joint Venture; and Astec contributed, among other things, an
interest in the Company's technology related to asphalt plants,
asphalt heating equipment and soil remediation equipment. In
November 1994, Astec acquired the other 50% interest in
Wibau-Astec, making it a wholly owned subsidiary of the
Company.
In an unrelated transaction, Astec acquired Gibat Ohl
Ingenieurgesellschaft fur Anlagentechnik mbH located in
Hasselroth, Germany for cash and Astec stock in October 1994.
Gibat Ohl is a manufacturer of asphalt batch plants and related
equipment. The management of Gibat Ohl is composed of former
Wibau employees who are very knowledgeable about the asphalt
plant market. The completion of these acquisitions strengthens
Astec's position in the European market.
Seminars and Technical Bulletins
The Company periodically conducts technical and service seminars
which are primarily for contractors,
employees and owners of asphalt mixing plants. In 1994,1995, approximately
200290 representatives of contractors and
owners of hot mix asphalt plants attended seminars held by the Company in
Chattanooga, Tennessee. These
seminars, which are taught by Company management and employees, cover
a range of subjects including
technological innovations in the hot mix asphalt business and other industry
segments in which the Company
manufactures products.
In addition to the seminars, the Company published a number of
detailed technical bulletins covering various
technological and business issues relating to the asphalt industry.
Patents and Trademarks
The Company seeks to obtain patents to protect the novel features
of its products. The Company and its
subsidiaries hold 6777 United States patents and 3962 foreign patents. There are
2416 United States and 16 foreign patent
applications pending.
The Company and its subsidiaries have approximately 40
trademarks registered in the United States,
including logos for Astec, Telsmith, Roadtec and Trencor, and the names
ASTEC, TELSMITH, HEATEC, LOG HOG,
ROADTEC and TRENCOR. Many of these trademarks are also registered
in foreign countries, including Canada,
Great Britain, Mexico, Australia and Japan.
The Company and its subsidiaries also license their technology to
manufacturers.
Engineering and Product Development
The Company dedicates substantial resources to its engineering
and product development. At December 31,
1994,1995, the Company and its subsidiaries had 143122 individuals employed
domestically full-time in engineering and
design capacities.
Raw Materials
Raw materials used by the Company in the manufacture of its
products include carbon steel and various
types of alloy steel which are normally purchased from steel mills and other
sources.
Seasonality and Backlog
The Company's business is somewhat seasonal. The Company's
sales tend to be stronger from January
through June each year which is attributable largely to orders placed in the
fourth quarter in anticipation of warmer
summer months when most asphalt paving is done.
As of December 31, 1994,1995, the Company had a backlog for delivery
of products at certain dates in the future
of approximately $50,500,000.$34,751,000 At December 31, 19931994 the total backlog was
approximately $33,100,000.$50,465,000, excluding
Wibau-Astec and Astec-Europa. The Company's backlog is subject to some
seasonality as noted above.
The Company's contracts reflected in the backlog are not, by
their terms, subject to termination.
Management believes that the Company is in substantial compliance with
all manufacturing and delivery timetables
relating to its products.
Competition
The Company faces strong competition in price, service and
product performance in each product category.
While the Company does not compete with any one manufacturer in all of
its product lines, it competes as to certain
products with both large publicly held companies with resources
significantly greater than those of the Company and
various smaller manufacturers. Hot mix asphalt plant competitors include
CMI Corporation; Cedarapids, Inc., a
division of Raytheon Company; and Gencor Industries, Inc. Paving
equipment competitors include Caterpillar Paving
Products Inc. (including the Company's former Barber-Greene product
line), a subsidiary of Caterpillar Inc.; Blaw-KnoxBlaw-
Knox Construction Equipment Company, a subsidiary of Clark Equipment
Co.; Ingersoll-Rand Company; and
Cedarapids, Inc.
The market for the Company's heat transfer equipment is diverse
because of the multiple applications for
such equipment. Its principal competitor is Gencor/Hyway Heat Systems.
The Company's milling machine
equipment competitors include Ingersoll-Rand Company; CMI Corporation;
Cedarapids, Inc.; Caterpillar; and Wirtgen
America, Inc. Aggregates processing equipment competitors include the
Pioneer Division of Portec, Inc.; Nordberg,
Inc.; Eagle Iron Works; Boliden Allis, a member of the Trelleborg Group;
Cedarapids, Inc.; and other smaller
manufacturers, both domestic and foreign. Competition for sales of
trenching and excavating equipment includes
Ditch Witch; J.I. Case; Vermeer and other smaller manufacturers in the
small utility trencher market.
As a whole, imports do not constitute significant competition in the
United States; however, in international
sales, the Company generally competes with foreign manufacturers which
may have a local presence in the market
the Company is attempting to penetrate.
Asphalt and concrete are generally considered competitive
products as a surface choice for new roads and
highways. A portion of the interstate highway system is paved in concrete,
but a majority of all surfaced roads in the
United States are paved with asphalt. Although concrete is used for some
new road surfaces, asphalt is used for
virtually all resurfacing, even the resurfacing of most concrete roads.
Management does not believe that concrete, as
a competitive surface choice, materially impacts the Company's business
prospects.
Regulation
The Company does not operate within a highly regulated industry.
However, air pollution equipment
manufactured by the Company principally for hot mix asphalt plants must
comply with certain performance standards
promulgated by the federal Environmental Protection Agency under the
Clean Air Act applicable to "new sources"
or new plants. Management believes that the Company's products meet
all material requirements of such
regulations and of applicable state pollution standards and environmental
protection laws.
In addition, due to the size and weight of certain equipment, the
Company and its customers sometimes
confront conflicting state regulations on maximum weights transportable on
highways and roads. This problem occurs
most frequently in the movement of portable asphalt mixing plants. Also,
some states have regulations governing the
operation of asphalt mixing plants and most states have regulations relating
to the accuracy of weights and measures
which affect some of the control systems manufactured by the Company.
Employees
On August 3, 1995, a union election was held at the Trencor plant
in which a unit of Trencor production and
maintenance employees voted to be represented by The United States
Steelworkers of America, AFL-CIO, CLC. Due
to alleged improper activity and interference, Trencor has asserted that the
election was illegal and has requested a
new election. The proceeding is currently pending before the National
Labor Relations Board.
At December 31, 1994,1995, the Company and its subsidiaries employed
1,5311,402 persons, of which 1,0451,048 were
engaged in manufacturing operations, 176122 in engineering and design
functions and 310232 in selling, administrative and
management functions. Telsmith has a labor agreement expiring on
October 14, 1995. None1998. Except as set forth above,
none of the Company's other employees are covered by a collective
bargaining agreement. TheNotwithstanding the
current preceding before the National Labor Relations Board, the Company
considers its employee relations to be
good.
Item 2. Properties
The location, approximate square footage, acreage occupied and
principal function of the properties owned or
leased by the Company are set forth below:
Approximate Approximate Principal
Location Square Footage Acreage Principal Function
Chattanooga, Tennessee 265,000 26.0361,000 56.6 Corporate and
Division Offices,subsidiary offices,
manufacturing - Astec
division
Chattanooga, Tennessee 0 63.0 Storage yard - Astec division
Chattanooga, Tennessee 66,200 5.0 Offices, manufacturing - Heatec
Chattanooga, Tennessee 125,000 13.6 Offices, manufacturing - Roadtec
Milwaukee, Wisconsin 120,000 6.1 Former Offices, manufacturing
- Telsmith (property for sale)
Mequon, Wisconsin 203,000 30.0 Offices, manufacturing -
Telsmith
North Aurora, Illinois 16,700 3.5 Roadtec (sales and service office)
San Francisco,
California 5,000 1.0 Leased sales and service office
and warehouse - Telsmith
St. Charles, Illinois 300 0 Leased international sales office -
Telsmith
Chino, California 4,762 1.0 Leased parts warehouse - Astec
Rossville, Georgia 40,500 2.6 Manufacturing and sales office
facility - Astec
division
Grapevine, Texas 140,000175,000 51.67 Offices, manufacturing - Trencor
Grand Prairie, Texas 83,000 6.1 Former Offices,offices, manufacturing -
Trencor, Inc.(property for sale)
Sharon, Massachusetts 4,000 1.0 Leased sales and service office -
Telsmith
Odessa, Texas 4,072 0.8.8 Sales office and parts warehouse -
Trencor, Inc.
Inman, South Carolina 13,600 8.0 Property for saleLeased with option to buy (office
and warehouse of former Soil
Purification of Carolina, Inc.)
Houston, Texas 120 0 Leased sales office - Heatec
Germany, Hasselroth 13,000 7.0Albuquerque, New Mexico 28,592 9.0 Leased offices, warehouse and limited
manufacturing - Gibat Ohl
Germany, Hasselroth 11,000 7.0 Leased offices and warehouseplant - Wibau-AstecCEI
Albuquerque, New Mexico 111,908 14.0 New plant and offices- CEI
In an effort to improve efficiency1995 significant office and consolidate
manufacturing space, the Company consolidated all of Telsmith's
manufacturing operations in an expanded Mequon facility. The
expansion began in late 1993plant improvements were made at
Roadtec and was completed in 1994. On
February 18, 1994, Trencor,Astec, Inc. acquired facilities in
Grapevine, Texas and has relocated its manufacturing and office
operations to this location. Except as set forth above,
managementManagement
believes that each of the Company's facilities provide office or
manufacturing space suitable for its current needs and
considers the terms under which it leases facilities to be reasonable.
Astec, Inc. is in the process of expanding its
offices and manufacturing facilities. In 1995 its manufacturing
space will increase by approximately 14,000 square feet.
Existing facilities will undergo some remodeling also.
Item 3. Legal Proceedings
During 1994, and in previous years, the Company and its
former Barber-GreeneThe Company's subsidiary, (now Telsmith, Inc.) were
defendants in two patent infringement actions brought by Robert
L. Mendenhall and CMI Corporation ("CMI"), a competitor,
seeking monetary damages and an injunction to cease the alleged
infringement.
In 1990, CMI was awarded damages of $4,457,000 and
prejudgment interest of $2,838,000 or a total of $7,295,000
from Barber-Greene. During 1991, in a separate trial, CMI
was awarded damages of $8,463,000, prejudgment interest of
$5,309,000 and attorney's fees of $737,000 for a total of
$14,509,000 from Astec; and Astec was awarded damages of
$667,000 plus $391,000 of prejudgment interest or a total of
$1,058,000 from CMI. The total damages and expenses awarded
to CMI were $20,746,000, net of the $1,058,000 awarded to
Astec. Both Astec and CMI appealed the judgments. In
connection
with its appeals, the Company was directed by the courts to
pledge substantially all of its real property and to deposit funds
in an escrow account to secure the judgments against the
Company pending the outcome of appeals.
On June 9, 1994, the Company announced that the United
States Court of Appeals for the Federal Circuit had reversed the
lower court decision and did not remand to the lower court for
further proceedings the judgments previously entered against
Astec and its former Barber-Greene subsidiary in the Robert L.
Mendenhall and CMI patent litigation. Those judgments had
totaled approximately $22 million. The Federal Circuit Court
ruled in favor of Astec because the allegedly infringing patents
had been held invalid in a separate third party case. CMI asked
the Federal Circuit to reconsider its decision and to have all of
the Federal Circuit judges rehear the appeal. The Company
responded to this request. On September 20, 1994, the Company
announced that the United States Court of Appeals for the Federal
Circuit denied the request from Mendenhall and CMI to
reconsider its earlier reversal. With the issuance of this
ruling, The Federal Circuit's review of this ongoing patent
litigation ended.
On October 11, 1994, CMI Corporation and Robert L.
Mendenhall filed a Petition of Writ Certiorari asking the U.S.
Supreme Court to review the decision of the Federal Circuit
Court of Appeals. The Company filed a response opposing the
Petition and on November 28, 1994, the Supreme Court issued
an Order denying the Petition thus bringing the patent litigation
to an end.
As a result of the Supreme Court's refusal to grant
certiorari, the Company received approximately $12.9 million
which was being held in escrow pending the Company's appeal of
the two judgments. In addition, on December 16, 1994, the
Company received approximately $1.3 million from CMI in
satisfaction of the judgment entered in favor of the Company on
its counterclaim against CMI. The receipt of these funds
effectively concluded the litigation between the Company and CMI
and Robert L. Mendenhall which had been pending for a number
of
years. As a result, the Company has reversed its accrued
liability for patent damages. The reversal of $13,870,000 in
accrued patent damages and the receipt of $1,309,000 in patent
damages from CMI total $15,179,000 and are shown net of
accruals and related legal expenses in the Consolidated
Statements of Income as Patent Suit Damages and Expenses (Net
Recoveries and Accrual Adjustments).
In an unrelated case, the Company's Telsmith subsidiary
is a defendant in a patent
infringement action brought by Nordberg,
Inc., a manufacturer of a competing line of rock crushing equipment,
seeking monetary damages and an injunction to
cease an alleged infringement of a patent on certain components used in the
production of its rock crushing
equipment. This case, being heard beforeOn March 30, 1995, the U.S.United States District Court for the
Eastern District of Wisconsin has been bifurcated into
liability and damages phases. The liability phase was tried on
January 11, 1993; however, no decision had been rendered by
the Court. Becauseissued a ruling
in favor of the uncertainties inherentCompany and entered a declaratory judgment in favor of
Telsmith, and against Plaintiff Nordberg, Inc.
declaring that claims 8 through 11 and 13 of Nordberg's United States
patent No. 4,478,373, entitled "Conical
Crusher" are invalid. The Court also entered judgment in favor of
Telsmith, Inc. and against Nordberg, Inc.
dismissing Nordberg's claim of infringement against Telsmith. The
Company was pleased with the Court's decision,
but has filed an appeal asking the United States Court of Appeals for the
Federal Circuit to overturn the trial court's
decision not to award Telsmith its attorney's fees in the litigation
process,case. Nordberg did
not cross-appeal to the Company is unableFederal Circuit on
the Telsmith judgment. The time for doing so has now expired. The
judgment has therefore become "final" as to
predict the ultimate outcome
of this litigation.those issues not raised by Telsmith on appeal.
On October 28, 1993, the Company was also named as a defendant
in a patent infringement action brought
by Gencor, Inc., a manufacturer of a competing line of asphalt plants,
seeking monetary damages and an injunction to
cease an alleged infringement of a patent on certain components used in the
production of its asphalt plant product
line. This case was filed in the U.S. District Court for the Middle District
of Florida, Orlando Division, and is currentlywent to trial
on January 22, 1996. On February 3, 1996, the jury returned a verdict in
the discovery phase.Company's favor holding that Astec's
Double Barrel drum mixer does not infringe the Gencor patent in question.
Judgment on that jury verdict was
entered by the Court on February 5, 1996. It is anticipated that Gencor will
appeal. Management believes this casethat
Gencor's anticipated appeal is without merit.
During 1994, the United States Supreme Court refused to be without merithear
CMI Corporation's petition to overturn the
United States Court of Appeals for the Federal Circuit's reversal of patent
damages awarded to CMI Corporation and
intendsRobert L. Mendenhall by a lower court. As a result of the Supreme Court's
refusal to vigorously defend this suit; however, due togrant certiorari, in 1994 the
uncertainties
inherentCompany received $12,917,000 which was being held in escrow pending
the Company's appeal of the two judgments.
In addition, on December 31, 1994, the Company received $1,309,000 from
CMI in satisfaction of the judgment
entered in favor of the Company on its counterclaim against CMI. The
receipt of these funds effectively concluded
the litigation between the Company and CMI and Robert L. Mendenhall
which had been pending for a number of
years. As a result, in 1994 the Company reversed its accrued liability for
patent damages. The reversal of
$13,870,000 in accrued patent damages and the receipt of $1,309,000 in
patent damages from CMI total $15,179,000
and are included in the litigation process, the Company is unable to
predict the ultimate outcomeConsolidated Statements of this litigation.Income as Patent suit
damages and expenses (net recoveries and
accrual adjustments).
Management has reviewed all claims and lawsuits and, upon the
advice of counsel, has made provision for
any estimable losses; however, the Company is unable to predict the
ultimate outcome of the outstanding claims and
lawsuits.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
The name, title, ages and business experience of the executive
officers of the Company are listed below.
J. Don Brock has been President and a director of Astec since its
incorporation in 1972 and assumed the
additional position of Chairman of the Board in 1975. He was the
Treasurer of the Company from 1972 until 1994.
From 1969 to 1972, Dr. Brock was President of the Asphalt Division of
CMI Corporation. Dr. Brock earned his Ph.D.
degree in mechanical engineering from the Georgia Institute of Technology.
Dr. Brock and Thomas R. Campbell,
President of Roadtec, are first cousins. Dr. Brock is 56.57.
Albert E. Guth has been Chief Financial Officer of the Company
since 1987, Senior Vice President since
1984, Secretary of the Company since 1972 and Treasurer since 1994. Mr.
Guth, who has been a director since
1972, was the Vice President of the Company from 1972 until 1984. From
1969 to 1972, Mr. Guth was the Controller
of the Asphalt Division of CMI Corporation. He is 55.56.
F. McKamy Hall, a Certified Public Accountant, has served as
Controller of the Company since May 1987.
From 1985 to 1987, Mr. Hall was Vice President-Finance of Quadel
Management Corporation, a company engaged in
real estate management. He is 52.53.
Thomas R. Campbell has served as President of Roadtec, Inc. since
1988. From 1981 to 1988 he served as
Operations Manager of Roadtec. Mr. Campbell and J. Don Brock,
President of the Company, are first cousins. Mr.
Campbell is 45.46.
W. Norman Smith has served as the President of Astec, Inc. since
December 1, 1994. He formerly served as
President of Heatec, Inc. from 1977 to 1994. From 1972 to 1977, Mr.
Smith was a Regional Sales Manager with the
Company. From 1969 to 1972, Mr. Smith was an engineer with the
Asphalt Division of CMI Corporation. Mr. Smith
has also served as a director of the Company since 1972. He is 55.56.
Jerry F. Gilbert has served as President of Trencor, Inc. since 1981. From 1973 to 1980, Mr. Gilbert was self-
employed in the real estate investment1981
and insurance field. Mr.
Gilbert has also served as a director of the Company since
May, 1991. He is 49.50.
Robert G. Stafford has served as President of Telsmith, Inc.,
formerly the Barber-Greene Company, since
April 1991. Between January 1987 and January 1991, Mr. Stafford served
as President of Telsmith, Inc., a subsidiary
of Barber-Greene. From 1984 until the Company's acquisition of Barber-GreeneBarber-
Greene in December 1986, Mr. Stafford was
Vice President - Operations of Barber-Greene and General Manager of
Telsmith. From 1979 to 1984 he served as
Director-Engineering and Operations for Telsmith. He became a director of
the Company in March 1988. He is 56.57.
James G. May has served as President of Heatec, Inc. since
December 1, 1994. From 19831984 until 1994 he
served as Vice President of Engineering of Astec, Inc. He is 50.51.
M. Brent England has served as president of CEI Enterprises, Inc.
since March 1995. Previously, Mr.
England served as president of Trace Industries, Inc. d/b/a CEI Enterprises,
since April 1992. Prior to joining CEI, Mr.
England served as a trustee for the U.S. Bankruptcy Court for three years.
Mr. England has also served as general
manager of N.C. Ribble Company, a large construction equipment
distributor, in Albuquerque, New Mexico. He is 63.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder
Matters
The Company's Common Stock is traded in the National
Association of Securities Dealers Automated
Quotation System (NASDAQ) National Market System under the symbol "ASTE".
The Company has never paid any
dividends on its Common Stock.
The high and low sales prices of the Company's Common Stock as
reported on the NASDAQ National Market
System for each quarter during the last two fiscal years, which have been
restated to retroactively reflect the two-for-one stock split
effected in the form of a dividend on August 12, 1993, were as follows:
Price Per Share
1995 High Low
1st Quarter 14 1/4 11
2nd Quarter 13 1/8 10 7/8
3rd Quarter 11 3/4 9 7/8
4th Quarter 12 1/4 9 3/4
Price Per Share
1994 High Low
1st Quarter 20 1/8 13 1/2
2nd Quarter 17 5/8 13
3rd Quarter 15 12 1/2
4th Quarter 15 7/8 11 5/8
Price Per Share
1993 High Low
1st Quarter 13 8 1/2
2nd Quarter 14 9 7/8
3rd Quarter 14 7/8 11 3/8
4th Quarter 15 3/4 11
The number of holders of record of the Company's Common Stock
as of March 10,1995,11, 1996, was 821.748.
Item 6. Selected Financial Data
Selected financial data appear on page A-1 of this Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's discussion and analysis of financial condition and
results of operations appears on pages A-2
to A-4A-5 of this Report.
Item 8. Financial Statements and Supplementary Data
Financial statements and supplementary financial information
appear on pages A-5A-6 to A-22A-23 of this Report.
Item 9. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
None required to be reported in this item.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the Company's directors included under the
caption "Election of Directors - Certain
Information Concerning Nominees and Directors" in the Company's
definitive Proxy Statement to be delivered to the
shareholders of the Company in connection with the Annual Meeting of
Shareholders to be held on April 27, 199525, 1996 is
incorporated herein by reference. Required information regarding the
Company's executive officers is contained in
Part I of this Report under the heading "Executive Officers of the
Registrant". Information regarding compliance with
Section 16(a) of the Exchange Act is included under "Election of Directors -
Section 16(a) Filing Requirements" in the
Company's definitive Proxy Statement which is incorporated herein by
reference.
Item 11. Executive Compensation
Information included under the caption, "Election of Directors -
Executive Compensation" in the Company's
definitive Proxy Statement to be delivered to the shareholders of the
Company in connection with the Annual Meeting
of Shareholders to be held on April 27, 199525, 1996 is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information included under the captions "Election of Directors -
Certain Information Concerning Nominees
and Directors", "Election of Directors - Common Stock Ownership of
Management" and "Election of Directors -
Common Stock Ownership of Certain Beneficial Owners" in the Company's
definitive Proxy
Statement to be delivered to the shareholders of the Company in connection
with the Annual Meeting of Shareholders
to be held on April 27, 199525, 1996 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
In September 1991,On March 20, 1995, the Company's Chairman, its Senior
Vice President, and the President of its Telsmith, Inc. subsidiary
formed a general partnership whichCompany acquired 25%all of the common stockissued and
outstanding shares of American Rock Products,Trace Industries, Inc.,
an Ohioa New Mexico corporation engageddoing business as CEI Enterprises ("CEI"), in
the businessexchange for $852,004 in cash and 87,333
shares of supplying crushed rock to
concrete and asphalt producers in the southeastern Oklahoma
area ("Amrock"). These individuals own interests in the
partnershipCompany Common Stock. The deemed effective date of 50%, 25% and 25%, respectively. In December
1992, the rock crushing business of Amrockthis
transaction for financial reporting purposes
was sold to a
competitor, exclusive of two used rock crushing machines and
certain other miscellaneous inventory and equipment.
In March 1994, Amrock sold two of these used rock
crushing machines to Telsmith for $50,000 and $70,000,
respectively.February 28, 1995. The purchase price for each of these machines was determined by the Senior
Vice President of Telsmiththe Company based on
his opinion of theirthe fair market value of CEI following arm's length
negotiation. Prior to this acquisition, CEI was a
closely held company with four shareholders including Mr. Brent England,
its President. In connection with this
transaction, CEI was merged into a wholly owned subsidiary of the
Company with Mr. England continuing to serve as
President of the successor corporation and, as such, is now an executive
officer of the Company. In lieu of providing
registration rights to the former shareholders of CEI with respect to the
shares of Company Common Stock being
issued in this transaction, the Company granted each such shareholder the
right to require the Company to redeem
the shares at any time within two years of the closing date at a price of
$12.00 per share. Mr. England received
23,333 shares of Company Common Stock in connection with this
transaction and, consistent with the rights granted
to each other former shareholder of CEI, has the right to require the
redemption of such shares by the Company for
$12.00 per share at any time of purchase. Telsmith
intends to market both rock crushing machines to its customers
for sale in the ordinary course of business.on or before March 20, 1997.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) The following financial statements and other information
appear in Appendix "A" to this Report and are
filed as a part hereof:
. Selected Consolidated Financial Data.
. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
. Report of Independent Auditors.
. Consolidated Balance Sheets at December 31, 19941995 and 1993.1994.
. Consolidated Statements of Income for the Years Ended December 31, 1995,
1994 1993 and 1992.1993.
. Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 1995, 1994 1993
and 1992.1993.
. Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 1993 and 1992.1993.
. Notes to Consolidated Financial Statements.
(a)(2) Other than as described below, Financial Statement
Schedules are not filed with this Report because
the Schedules are either inapplicable or the required information is
presented in the Financial Statements or Notes
thereto. The following Schedules appear in Appendix "A" to this Report
and are filed as a part hereof:
. Report of Independent Auditors.
. Schedule VIII - Valuation and Qualifying Accounts.
(a)(3) The following Exhibits* are incorporated by reference into
or are filed with this Report:
2.1 Share Purchase and Transfer Agreement, dated October 13,
1994, between the Company and Wibau-Astec Maschinenfabrik
GmbH (incorporated by reference to the Form 8-K effective
November 7, 1994, File No. 0-14714).
2.2 Share Purchase and Transfer Agreement by and between
the Company and Gibat Ohl Ingenieurgesellschaft fur Anlagentechnik mbH, dated
as of October 5, 1994.1994 (incorporated by reference to the Form 8-K
dated November 7, 1994, File No. 0-14714).
3.1 Restated Charter of the Company (incorporated by
reference to the Company's Registration Statement on Form S-1, effective
June 18, 1986, File No. 33-5348).
3.2 Articles of Amendment to the Restated Charter of the
Company, effective September 12, 1988 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1988,
File No. 0-14714).
[FN]
The Exhibits are numbered in accordance with Item 601 of
Regulation S-K. Inapplicable Exhibits are not included in the
list.
3.3 Articles of Amendment to the Restated Charter of the
Company, effective June 8,
1989 (incorporated by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1989, File No. 0-14714).
3.4 Amended and Restated Bylaws of the Company, adopted
March 14, 1990 (incorporated by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1989, File No. 0-14714).
4.1 Trust Indenture between City of Mequon and Firstar Trust
Company, as Trustee, dated as of February 1, 1994 (incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, File No. 0-14714).
4.2 Indenture of Trust, dated April 1, 1994, by and between
Grapevine Industrial
Development Corporation and Bank One, Texas, NA, as Trustee.
10.1 Agreement, dated December 24, 1976, between the Company and
Jemco International, Inc. (incorporated by reference to the
Company's Registration Statement on Form S-1, effective June 18,
1986, File No. 33-5348).
10.2 Supplemental Agreement, dated December 30, 1982, between the
Company and Jemco International, Inc. (incorporated by reference to
Company's Registration Statement on Form S-1, effective June 18,
1986, File No. 33-5348).
10.3 Restated License and Trademark Agreement, dated March 25, 1988,
between the Company and Barber-Greene Europa B.V.Trustee
(incorporated by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1988,1993, File No. 0-14714).
10.4 License and Trademark4.3 Shareholder Protection Rights Agreement, dated
May 5, 1988, between the
Company and BM Group PLC incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1989, File No. 0-14714).
10.5 1986 Stock Option Plan of the Company22, 1995 (incorporated
by reference to the Company's Registration Statement on Form S-
1, effective June 18, 1986, File No. 33-5348).
10.6 Loan Agreement, dated July 1, 1980, between the Company and
the Industrial Development Board of the City of Chattanooga
(incorporated by reference to the Company's Registration Statement
on Form S-1, effective June 18, 1986, File No. 33-5348).
10.7 Trust Indenture, dated July 1, 1980, between the Industrial
Development Board of the City of Chattanooga and Pioneer Bank
(incorporated by reference to Company's Registration Statement
on Form S-1, effective June 18, 1986, File No. 33-5348).
10.8 Warrant Agreement, dated as of December 29, 1986, between the
Company and The Citizens and Southern National Bank, as
Warrant Agent (incorporated by reference to the Company's
Registration Statement on Form S-4, effective November 26, 1986,
File No. 33-10403).
10.9 Credit Agreement, dated as of September 17, 1987, between the
Company and The First National Bank of Chicago (incorporated by
reference to the Company's AnnualCurrent Report on Form 10-K for the year
ended8-K dated December 31, 1987, File No. 0-14714).
10.10 Amendment No. One, dated January 4, 1988, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1987, File No. 0-14714).
10.11 Amendment No. Two, dated March 17, 1988, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1987, File No. 0-14714).
10.12 Amendment, dated August 17, 1988, to Credit Agreement, dated
as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1988, File No. 0-14714).
10.13 Second Amendment, dated October 21, 1988, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1988, File No. 0-14714).
10.14 Amendment, dated as of January 19, 1989, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1988, File No. 0-14714).
10.15 Consent, Waiver and Release, dated as of January 31, 1989, to Credit
Agreement, dated as of September 17, 1987, between the Company
and The First National Bank of Chicago (incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1988, File No. 0-14714).
10.16 Waiver, dated March 8, 1989, to Credit Agreement, dated as of
September 17, 1987, between the Company and The First National
Bank of Chicago (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1988, File No.
0-14714).
10.17 Senior Note Agreement, dated as of January 31, 1989, between the
Company and Principal Mutual Life Insurance Company (incorporated
by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1988, File No. 0-14714).
10.18 Subordinated Note Agreement, dated
as of January 31, 1989, between
the Company and Principal Mutual
Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1988, File No. 0-14714).
10.19 Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.20 Amendment, dated as of March 26,
1990, to the Amended and Restated
Credit Agreement, dated as of April
27, 1989, between the Company
and The First National Bank of
Chicago (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1989, File No. 0-14714).
10.21 Consent, Waiver and Release, dated
as of November 1, 1989, to
Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.22 Consent, Waiver and Release, dated
as of November 10, 1989, to
Senior and Subordinated Note
Agreements dated as of January 31,
1989, between the Company and
Principal Mutual Life Insurance
Company (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1989, File No. 0-14714).
10.23 Consent, Waiver and Release, dated
as of March 14, 1990, to Credit
Agreement, dated as of September
17, 1987, between the Company
and The First National Bank of
Chicago (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1989, File No. 0-14714).
10.24 Lease Agreement, dated as of July
1, 1974, between Barber-Greene
Company and the City of Mequon,
Wisconsin (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1988, File No. 0-14714).
10.25 Lease Agreement, dated November
10, 1986, between Barber-Greene
Company and Stephen P. and Sandra
S. Davenport (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1988, File No. 0-14714).
10.26 Lease Agreement, dated as of March 31, 1988, between Telsmith, Inc.
and AEW #79 Trust (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1988, File No. 0-14714).
10.27 Lease Agreement, dated June 20,
1988, between Barber-Greene
Company and 8000 Cypress
Parkway Corporation
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1988, File No. 0-14714).
10.28 Lease Agreement, dated February 1, 1989, between Barber-Greene
Company and Lee Steinberg
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December 31, 1988,22,
1995, File No. 0-14714).
10.29 Lease Agreement, dated as of August 28, 1989, between
Telsmith, Inc., and Pine Hill
Developers (incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1989, File No. 0-14714).
10.30 Lease Agreement, dated as of March
24, 1989, between the Company
and Robert D. Ingersoll
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.31 Assignment, dated as of February
5, 1990, of lease dated November
10, 1986, between Barber-Greene
Company and Castro and Davenport
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.32 Sublease, dated as of December 29,
1989, of lease dated February 1,
1989, between Barber-Greene
Company and Lee Steinberg
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.33 Waiver and Agreement, dated
March 30, 1990, with respect to
Senior and Subordinated Note
Agreements, dated as of January
31, 1989, between the Company
and Principal Mutual Life
Insurance Company (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31, 1990, File No. 0-14714).
10.34 Waiver, dated August 24, 1990,
with respect to Senior Note
Agreement, dated as of January 31,
1989, between the Company and
Principal Mutual Life Insurance
Company (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1990,
File No. 0-14714).
10.35 Waiver, dated December 18,
1990, with respect to Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.36 Waivers, dated October 18, 1990,
with respect to Amended and
Restated Credit Agreement, dated as
of April 27, 1989, between the
Company and the First National
Bank of Chicago (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1990,
File No. 0-14714).
10.37 Waivers, dated December 20,
1990, with respect to Credit
Agreement, dated as of April 27,
1989, between the Company and
the First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.38 Lease Agreement, dated as of March
1, 1991 between Astec Industries,
Inc. and Carl M. Krueger (dba
Krueger Instruments),
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.39 Asset Purchase Agreement by and
between Caterpillar Paving
Products Inc., Barber-Greene
Company, and Astec Industries,
Inc., dated December 17, 1990
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.40 Waiver, dated April 11, 1991,
with respect to Amended and
Restated Credit Agreement, dated
as of April 27, 1989, between the
Company and the First National
Bank of Chicago (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1990,
File No. 0-14714).
10.41 Waiver, dated April 11, 1991,
with respect to Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.42 Consent and Waiver, dated April
17, 1991, with respect to the
Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.43 Consent and Waiver, dated April
17, 1991, with respect to the
Senior and Subordinated Note
Agreements, dated as of January
31, 1989, between the Company
and Principal Mutual Life
Insurance Company (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31, 1991, File No. 0-14714).
10.44 Consent of Barber-Greene Company
(now Telsmith, Inc.), Heatec, Inc.,
Roadtec, Inc., and Trencor Jetco,
Inc., dated April 17, 1991, with
respect to the (i) Amended and
Restated Credit Agreement, dated as
of April 27, 1989, between the
Company and The First National
Bank of Chicago, and (ii) Senior
and Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.45 Collateral Trust Indenture, dated as
of March 1, 1991, between the
Company, The First National Bank
of Chicago, Principal Mutual Life
Insurance Company and Citizens
and Southern Trust Company
(Georgia), N.A. (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991, File No.
0-14714).
10.46 Consent, Waiver and Release of
Security Interest by The First
National Bank of Chicago ("First
Chicago"), Principal Mutual Life
Insurance Company ("PMLIC") and
Citizens and Southern Trust
Company (Georgia), N.A. ("C&S"),
dated April 17, 1991, with respect
to the (i) Amended and Restated
Credit Agreement, dated as of April
27, 1989, between the Company
and First Chicago, (ii) Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and PMLIC,
(iii) Collateral Trust Indenture,
dated as of March 1, 1991,
between the Company, First
Chicago, PLMIC, and C&S, and (iv)
certain collateral documents
related thereto (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991, File No.
0-14714).
10.47 Release of Security Interest by the
Citizens and Southern Trust
Company (Georgia), N.A., The First
National Bank of Chicago ("First
Chicago") and Principal Mutual
Life Insurance Company
("PMLIC"), dated April 17, 1991,
with respect to certain
trademarks, trademark
registrations, trademark
applications and trademark
licenses pledged as collateral under
the Pledge and Security Agreement,
dated as of March 26, 1990
between the Barber-Greene
Company, Ameacon, Inc., Heatec,
Inc., Roadtec, Inc., Trencor Jetco,
Inc., Barber-Greene Overseas, Inc.
and Telsmith, Inc., and First
Chicago acting in its capacity as
collateral agent for itself and
PMLIC (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1991, File No. 0-14714).
10.48 Release of Security Interest by the
Citizens and Southern Trust
Company (Georgia), N.A., The First
National Bank of Chicago ("First
Chicago") and Principal Mutual
Life Insurance Company
("PMLIC"), dated April 17, 1991,
with respect to certain patents,
patent applications and patent
licenses pledged as collateral under
the Pledge and Security Agreement,
dated as of March 26, 1990
between the Barber-Greene
Company, Ameacon, Inc., Heatec,
Inc., Roadtec, Inc., Trencor Jetco,
Inc., Barber-Greene Overseas, Inc.
and Telsmith, Inc., and First
Chicago acting in its capacity as
collateral agent for itself and
PMLIC (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1991, File No. 0-14714).
10.49 Bank response to requests for
waivers for quarter ended
6/30/91 (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991, File No. 0-14714).
10.50 Waiver, dated March 23, 1992,
with respect to the Amended and
Restated Credit Agreement, dated as
of April 27, 1989, between the
Company and The First National
Bank of Chicago (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991,
File No. 0-14714).
10.51 Fourth Amendment, dated March
23, 1992 between the Company
and The First National Bank of
Chicago, with respect to the
Amended and Restated Credit
Agreement, dated April 27, 1989
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.52 Waiver, dated March 23, 1992,
with respect to the Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.53 Third Amendment, dated March 23,
1992 between the Company and
Principal Mutual Life Insurance
Company, with respect to the
Senior Note Agreement dated
January 31, 1989 (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31, 1991, File No. 0-14714).
10.54 Third Amendment, dated March 23,
1992 between the Company and
Principal Mutual Life Insurance
Company, with respect to the
Subordinated Note Agreement dated
January 31, 1989 (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1991, File No. 0-14714).
10.55 Consent and Waiver, dated April
29, 1992, with respect to the
Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.56 Waiver, dated April 29, 1992,
with respect to the Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.57 License Agreement, dated July 2, 1992, between Telsmith,
Inc. and Gerlach Industries (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1992, File No. 0-14714).
10.58 Deed of Trust from the Company to
Milligan-Reynolds Guaranty Title
Agency, Inc., Trustee, pledging
certain property located in
Hamilton County, Tennessee,
recorded August 24, 1992 in Book
4029, Page 417 in the Office of the
Register of Deeds of Hamilton
County, Tennessee (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.59 Deed of Trust from Heatec, Inc. to
Milligan-Reynolds Guaranty Title
Agency, Inc., Trustee, pledging
certain property located in
Hamilton County, Tennessee,
recorded August 24, 1992 in Book
4029, Page 423 in the Office of the
Register of Deeds of Hamilton
County, Tennessee (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.60 Deed of Trust from Roadtec, Inc. to
Milligan-Reynolds Guaranty Title
Agency, Inc., Trustee, pledging
certain property located in
Hamilton County, Tennessee,
recorded August 24, 1992 in Book
4029, Page 428 in the Office of the
Register of Deeds of Hamilton
County, Tennessee (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.61 Deed to Secure Debt from the
Company to CMI Corporation
pledging certain property located
in Walker County, Georgia,
recorded August 25, 1992 in deed
Book 683, Page 506 in the Office
of the Superior Court Clerk of
Walker County, Georgia
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.62 Deed of Trust from Trencor Jetco,
Inc. to Craig Bishop, Trustee,
pledging certain property located
in Dallas County, Texas, recorded
August 25, 1992 in Book 92166,
Page 891 in the Office of the
County Clerk of Dallas County,
Texas (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1992, File No. 0-14714).
10.63 Mortgage from Telsmith, Inc. to
CMI Corporation pledging certain
property located in Ozaukee
County, Wisconsin, recorded
August 25, 1992 in Volume 768,
Page 74 in the Office of the
Register of Deeds of Ozaukee
County, Wisconsin (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.64 Mortgage from Telsmith, Inc. to
CMI Corporation pledging certain
property located in Milwaukee
County, Wisconsin, recorded
August 25, 1992 in Reel 2850,
image 427 in the Office of the
Register of Deeds of Milwaukee
County, Wisconsin (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.65 Fifth Amendment, dated December
31, 1992 between the Company
and The First National Bank of
Chicago, with respect to the
Amended and Restated Credit
Agreement, dated April 27, 1989
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.66 Letter of Intent between the
Company and Putzmeister-Werk,
Maschinenfabrik GmbH dated
December 12, 1992 in connection
with the formation of
WIBAU/ASTEC GmbH (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.67 First Amendment to Note Agreement
(for Senior Notes) dated April 1,
1991 between the Company and
Principal Mutual Life Insurance
Company (incorporated by
reference to the Company's
Registration Statement on Form S-
2, effective June 8, 1993, as
Exhibit 10.54, File No. 33-61952).
10.68 First Amendment to Note Agreement
(for Subordinated Notes) dated
April 11, 1991 between the
Company and Principal Mutual Life
Insurance Company (incorporated
by reference to the Company's
Registration Statement on
Form S-2, effective June 8, 1993,
as Exhibit 10.55, File No. 33-61952).
10.69 Fourth Amendment, dated March
31, 1993 between the Company
and Principal Mutual Life
Insurance Company, with respect
to the Amended and Restated Credit
Agreement dated January 31, 1989
(incorporated by reference to the
Company's Registration Statement
on Form S-2, effective June 8,
1993, as Exhibit 10.56, File No. 33-61952).
10.70 Sixth Amendment, dated March 31,
1993 between the Company and the
First National Bank of Chicago,
with respect to the Amended and
Restated Credit Agreement, dated
April 27, 1989 (incorporated by
reference to the Company's
Registration Statement on Form S-2, effective June 8, 1993, as
Exhibit 10.57, File No. 33-61952).
10.71 Consent of Telsmith, Inc.; Heatec,
Inc.; Roadtec, Inc.; and Trencor
Jetco, Inc.; dated March 31, 1993,
with respect to (i) the Fourth
Amendment to Note Agreement; (ii)
the Senior Guaranty; and (iii) the
Security Documents (incorporated
by reference to the Company's
Registration Statement on
Form S-2, effective June 8, 1993,
as Exhibit 10.58, File No. 33-61952).
10.72 Joint Venture Agreement, dated
June 6, 1993, between the
Company and Putzmeister-Werk
Maschinenfabrik GmbH
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.73 Technology Contribution
Agreement, dated July 12, 1993,
between the Company and Wibau-
Astec Maschinenfabrik GmbH
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.74 Seventh Amendment, dated January
21, 1994 between the Company
and The First National Bank of
Chicago, with respect to the
Amended and Restated Credit
Agreement, dated April 27, 1989
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.75 Loan Agreement between City of Mequon, Wisconsin and
Telsmith, Inc. dated as of
February 1, 1994 (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993, File No. 0-14714).
*The Exhibits are numbered in accordance with Item 601 of Regulation S-K.
Inapplicable Exhibits are not included in the list.
10.76 Credit Agreement by and between Telsmith, Inc. and
M&I Marshall & Ilsley Bank, dated as of February 1, 1994 (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993, File No. 0-14714).
10.77 Security Agreement by and between Telsmith, Inc. and
M&I Marshall & Ilsley Bank, dated as of February 1, 1994
(incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993,
File No. 0-14714).
10.78 Mortgage and Security Agreement and Fixture Financing
Statement by and between
Telsmith, Inc. and M&I Marshall & Ilsley Bank, dated as of February 1, 1994
(incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1993, File No. 0-14714).
10.79 Guarantee of Astec Industries, Inc. in favor of M&I Ilsley
Bank, dated as of February 1, 1994 (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1993,
File No. 0-14714).
10.80 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Dresdner Bank
Aktiengensellschaft,dated as of December 22, 1993.1993 (incorporated by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, File No. 0-14714).
10.81 Letter of Guarantee of Wibau-Astec Maschinenfabrik
GmbH in favor of Berliner Hondels - und Frankfurter Bank, dated as of
December 22, 1993.1993 (incorporated by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, File No. 0-14714).
10.82 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Bayerische
Vereinsbank, dated as of December 22, 1993.1993 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, File No. 0-14714).
10.83 Loan Agreement dated as of April 1,1994,1, 1994, between
Grapevine Industrial
Development Corporation and Trencor, Inc. (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, File No. 0-14714).
10.84 Letter of Credit Agreement, dated April 1, 1994, between
The First National Bank of
Chicago and Trencor, Inc. (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994,
File No. 0-14714).
10.85 Guaranty Agreement, dated April 1, 1994, between Astec
Industries, Inc. and Bank
One, Texas, NA, as Trustee.Trustee (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994,
File No. 0-14714).
10.86 Astec Guaranty, dated April 29, 1994, of debitdebt of Trencor,
Inc. in favor of The First
National Bank of Chicago.Chicago (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994, File No. 0-14714).
10.87 Credit Agreement, dated as of July 20, 1994, between the
Company and The First
National Bank of Chicago.Chicago (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, File No. 0-
14714).
10.88 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Bayerische
Vereinsbank, dated as of January 16, 1995.1995 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31,
1994, File No. 0-14714).
10.89 Waiver for December 31, 1994, dated February 24, 1995
with respect to the First
National Bank of Chicago Credit Agreement dated July 20, 1994.
11.1994
(incorporated by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, File No. 0-14714).
10.90 First Amendment to Guaranty of Payment, dated March
21, 1995 by and between
Heatec, Inc.; Roadtec, Inc.; Trencor, Inc.; Telsmith, Inc.; Astec
Transportation, Inc.; ACI, Inc.; Astec, Inc.; CEI Enterprises, Inc.; and
The First National Bank of Chicago.
10.91 First Amendment to Credit Agreement, dated May 22,
1995 between the Company
and The First National Bank of Chicago.
10.92 Second Amendment to Guaranty of Payment, dated May
22, 1995 by and between
Heatec, Inc.; Roadtec, Inc.; Trencor, Inc.; Telsmith, Inc.; Astec
Transportation, Inc.; ACI, Inc.; Astec, Inc.; CEI Enterprises, Inc.; and
The First National Bank of Chicago.
10.93 Guaranty of all obligations of Astec-Europa
Strassenbaumaschinen GmbH executed
by the Company in favor of Bayerische Vereinsbank Aktiengesellschaft,
dated December 6, 1995.
10.94 Guaranty of a DM3,000,000 credit facility to Gibat Ohl
Ingenieurgesellschaft fur
Anlagentechnik mbH executed by the Company in favor of Deutsche Bank
AG, dated December 13, 1995.
10.95 Waiver for December 31, 1995, dated November 10, 1995
with respect to The First
National Bank of Chicago Credit Agreement dated July 20, 1994, as amended.
10.96 English translation of Application for Commencement of
Bankruptcy Proceedings
filed on behalf of Astec-Europa Strassenbaumaschinen in Gelnhausen,
Germany on February 9, 1996.
10.97 Limited Consent of The First National Bank of Chicago
dated as of March 21, 1995 related to the acquisition of Trace Industries, Inc.
and the assignment of certain assets to Astec, Inc.
Executive Compensation Plans and Arrangements
10.98 Supplemental Executive Retirement Plan, dated February 1, 1996 to be
effective as of January 1, 1995.
10.99 Trust under Astec Industries, Inc. Supplemental
Retirement Plan, dated January 1, 1996.
11 Statement Regarding Computation of Per Share Earnings.
22.22 Subsidiaries of the Registrant.
23.23 Consent of Independent Auditors
(b) A reportNo reports on Form 8-K waswere filed duringin the fourth quarter of 1994 in connection with the Wibau-Astec
Maschinenfabrik GmbH acquisition.quarter.
(c) The Exhibits to this Report are listed under Item 14(a)(3)
above.
(d) The Financial Statement Schedules to this Report are
listed under Item 14(a)(2) above.
APPENDIX "A" to ANNUAL REPORT ON FORM 10-K
ITEMS 8 and 14(a)(1) and (2), (c) and (d)
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
ASTEC INDUSTRIES, INC.
Contents Page
Selected Consolidated Financial Data
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Report of Independent Auditors
Consolidated Balance Sheets at December 31, 19941995 and 19931994
Consolidated Statements of Income for the Years Ended December 31,
1995, 1994 and 1993 and1992
Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1995, 1994 1993 and 19921993
Consolidated Statements of Cash Flows for the Years Ended December 31,
1995, 1994 1993 and 19921993
Notes to Consolidated Financial Statements
Report of Independent Auditors
Schedule VIII - Valuation and Qualifying Accounts
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Astec Industries, Inc.
We have audited the accompanying consolidated balance sheets of Astec
Industries, Inc. and subsidiaries and the
related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the
period ended December 31, 1995. Our audits also included the financial
statement schedule listed in the Index at
Item 14(a). These financial statements and schedule are the responsibility
of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the
consolidated financial position of Astec Industries, Inc. and subsidiaries at
December 31, 1995 and 1994, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31,
1995, in conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements
taken as a whole, presents fairly in all material
respects the information set forth therein.
As discussed in Note 1, in 1995 the Company changed its method of
accounting for the impairment of long-lived
assets and for long-lived assets to be disposed of.
/s/ ERNST & YOUNG LLP
Chattanooga, Tennessee
February 27, 1996
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE (VIII)
VALUATION AND QUALIFYING ACCOUNTS FOR CONTINUING OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER
ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
December 31, 1995:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
accounts $ 1,684,242 $ 533,136 $ 20,000 (3) $ 958,740 (1) $ 1,278,638
Reserve for
inventory $ 4,994,035 $ 1,196,876 $ 0 $ 752,401 $ 5,438,510
Other Reserves:
Product warranty$ 3,470,703 $ 3,194,240 $ 0 $ 4,194,168 (2) $
2,470,775
December 31, 1994:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
accounts $ 1,191,083 $ 362,089 $ 467,607 (3) $ 336,537 (1) $ 1,684,242
Reserve for
inventory $6,494,533 $ 3,621,218 $ 0 $ 5,121,716 $ 4,994,035
Other Reserves:
Product warranty $ 1,781,733 $ 2,616,565 $ 0 $ 927,595 (2) $
3,470,703
Reserve for
patent
damages $ 13,250,048 $ 620,290 $ 0 $ 13,870,338 $ 0
December 31, 1993:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
accounts $1,060,588 $742,752 $ 21,609 $ 633,866 (1) $ 1,191,083
Reserve for
inventory $ 5,948,084 $ 2,952,918 $ 0 $ 2,406,469 $ 6,494,533
Other Reserves:
Product warranty$1,551,850 $ 2,689,441 $ 0 $ 2,459,558 (2) $
1,781,733
Reserve for
patent
damages $ 12,554,640 $ 695,408 $ 0 $ 0 $
13,250,048
[FN]
(1) Uncollectible accounts written off, net of recoveries.
(2) Warranty costs charged to the reserve.
(3) Represents reserve balances of subsidiaries acquired in the year.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Astec Industries,
Inc. has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASTEC INDUSTRIES, INC.
BY: /s/ J. Don Brock
J. Don Brock, Chairman of the Board
and President (Principal Executive Officer)
BY: /s/ Albert E. Guth
Albert E. Guth, Senior Vice President
Secretary and Treasurer (Principal
Financial and Accounting Officer)
Date: March 1, 1996
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by a
majority of the Board of Directors of the Registrant on the dates indicated:
SIGNATURE TITLE DATE
/s/ J. Don Brock Chairman of the Board March 1, 1996
J. Don Brock and President
/s/ Albert E. Guth Senior Vice President, March 1, 1996
Albert E. Guth Secretary, Treasurer
and Director
/s/ W. Norman Smith President - Astec, Inc. March 1, 1996
W. Norman Smith and Director
/s/ Robert G. Stafford President - Telsmith, Inc. March 1, 1996
Robert G. Stafford and Director
/s/ Jerry F. Gilbert President - Trencor, Inc. March 1, 1996
Jerry F. Gilbert and Director
SIGNATURE TITLE DATE
/s/ E.D. Sloan Jr. Director March 1, 1996
E.D. Sloan, Jr.
/s/ William B. Sansom Director March 1, 1996
William B. Sansom
/s/ Joseph Martin, Jr. Director March 1, 1996
Joseph Martin, Jr.
/s/ George C. Dillon Director March 1, 1996
George C. Dillon
/s/ G.W. Jones Director March 1, 1996
G.W. Jones
/s/ Daniel K. Frierson Director March 1, 1996
Daniel K. Frierson
Commission File No. 0-14714
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS FILED WITH ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
ASTEC INDUSTRIES, INC.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
ASTEC INDUSTRIES, INC. FORM 10-K
INDEX TO EXHIBITS
Sequentially
Exhibit Number Description Numbered Page
Exhibit 10.90 First Amendment to Guaranty of Payment, dated March
21, 1995 by and between Heatec, Inc.; Roadtec, Inc.; Trencor,
Inc.; Telsmith, Inc.; Astec
Transportation, Inc.; ACI, Inc.; Astec, Inc.; CEI
Enterprises, Inc.; and The First National Bank of Chicago.
Exhibit 10.91 First Amendment to Credit Agreement, dated May 22, 1995
between the Company and The First Nationa
Exhibit 10.92 Second Amendment to Guaranty of Payment, dated May
22, 1995 by and between Heatec, Inc.; Roadtec, Inc.; Trencor,
Inc.; Telsmith, Inc.;
Astec Transportation, Inc.; ACI, Inc.; Astec, Inc.; CEI
Enterprises, Inc.; and The First National Bank of Chicago.
Exhibit 10.93 Guaranty of all obligations of Astec-Europa
Strassenbaumaschinen GmbH executed by the Company in favor of
Bayerische Vereinsbank Aktiengesellschaft, dated
December 6, 1995.
Exhibit 10.94 Guaranty of a DM3,000,000 credit facility to Gibat Ohl
Ingenieurgesellschaft fur Anlagentechnik mbH executed by the
Company in favor of Deutsche Bank AG, dated
December 13, 1995.
Exhibit 10.95 Waiver for December 31, 1995, dated November 10, 1995
with respect to The First National Bank of Chicago Credit
Agreement dated July 20, 1994, as amended.
Exhibit 10.96 English translation of Application for Commencement of
Bankruptcy Proceedings filed on behalf of Astec-Europa
Strassenbaumaschinen in Gelnhausen, Germany on
February 9, 1996.
Exhibit 10.97 Limited Consent of The First National Bank of Chicago
dated as of March 21, 1995 related to the acquisition of
Trace Industries, Inc. and
the assignment of certain assets to Astec, Inc.
Executive Compensation Plans and Arrangements
Exhibit 10.98 Supplemental Executive Retirement Plan, dated February 1,
1996 to be effective as of January 1, 1995.
Exhibit 10.99 Trust under Astec Industries, Inc. Supplemental
Retirement Plan, dated January 1, 1996.
Exhibit 11 Statement Regarding Computation of Per Share Earnings.
Exhibit 22 Subsidiaries of the Registrant.
Exhibit 23 Consent of Independent Auditors.
For a list of certain Exhibits not filed with this Report that are incorporated
by reference into this Report, see Item 14(a)(3).
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT AS NOTED*EXHIBIT 11
Statement Regarding Computation of Per Share Earnings
ASTEC INDUSTRIES, INC.
EXHIBIT (11) - COMPUTATIONS OF EARNINGS PER SHARE 12/31/95
(In Thousands)
Shares for Earnings Per Share Computations
Primary:
Weighted average outstanding during year 10,072
Common Stock equivalent for stock options & warrants 124
TOTAL 10,196
Fully Diluted:
Weighted average outstanding during year 10,072
Common Stock equivalent for stock options & warrants 125
TOTAL 10,197
Earnings Applicable to Common Stock:
Income from continuing operations $ 4,560
Net Income $ 4,560
Earnings Per Common Share (Based on Weighted Average Number
of Common and Uncommon Equivalent Shares Outstanding):
Income from continuing operations $ .45
Net Income $ .45
Additional Computations of EPS:
Fully Diluted:
Income from continuing operations $ .45
Net Income $ .45
EXHIBIT 22
Subsidiaries of the Registrant
LIST OF SUBSIDIARIES
Jurisdiction of
Name Owned Incorporation
Astec, Inc. 100 Tennessee
Astec Transportation, Inc. 100 Tennessee
CEI Enterprises, Inc. 100 Tennessee
Heatec, Inc. 100 Tennessee
Roadtec, Inc. 100 Tennessee
Telsmith, Inc. 100 Delaware
Trencor, Inc. 100 Texas
Exhibit 23
Consent of Independent Auditors
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 33-14738 and 0-14714) pertaining to the Astec
Industries, Inc. 1986 and 1992 Stock Option Plans of our report dated
February 27, 1996, with respect to the consolidated financial statements and
schedule of Astec Industries, Inc. included in the Annual Report (Form 10-K)
for the year ended December 31, 1995.
/s/ERNST & YOUNG LLP
Chattanooga, Tennessee
March 15, 1996
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except as noted*)
Consolidated Income Statement Data
(1)
1995 1994 1993 1992 1991 1990
Net sales $213,806 $172,801 $149,133$242,601 $ 213,806 $ 172,801 $ 149,133 $134,512 $134,982
Selling, general
and administrative
expenses 34,326 31,142 28,624 23,969 20,456 21,946
Patent suit damages
and expenses
net(net recoveries
and accrual
adjustmentsadjustments) 699 (14,947) 375 567 3,868
8,329
Research and
development 5,128 3,166 2,923 2,580 2,503
1,918Loss on abandonment
of foreign
subsidiary 7,037
Interest expense 2,125 713 1,788 3,241 4,597
6,310
Income loss from
continuing
operations 4,560 23,436 9,338 6,014 524
(13,463)
Discontinued
operations 3,530
(2,771)
Net income loss4,560 23,436 9,338 6,014 4,054
(16,234)
Income loss per
common
share from
continuing
operations* (2)(1) .45 2.38 1.07 .82 .07
(1.87)
Consolidated Balance Sheet Data
Working capital $ 58,015 $ 53,000 $ 40,767 $ 33,641 $ 31,167
$ 49,776
Total assets 154,356 155,964 102,967 87,885 90,989
112,414
Total short-term debt 774 8,573 10 3,103 4,862 8,836
Long-term debt, less
current maturities 17,150 16,155 0 22,660 29,387
50,305
Shareholders' equity 95,901 90,373 64,105 27,631 21,279 17,208
Book value per common
share at
year-end* (2) 9.04 6.54 3.78 2.95 2.39
Quarterly Financial Highlights (Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1994
Net sales $ 46,226 $ 62,694 $ 49,021 $ 55,865
Gross profit 11,029 14,013 11,216 11,839
Net income 2,876 5,212 3,131 12,217
Net income per
common share* (2) .29 .53 .32 1.23
1993
Net sales $ 43,401 $ 52,436 $ 38,838 $ 38,126
Gross profit 10,380 11,878 9,268 10,369
Net income 1,578 3,481 2,116 2,163
Net income per
common share* (2) .22 .45 .22 .22
Common Stock Price* (2)(1) 9.50 9.04 6.54 3.78 2.95
Quarterly Financial Highlight (Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1995
Net sales $ 57,544 $ 70,368 $ 65,015 $ 49,674
Gross profit 13,637 14,011 13,298 8,811
Net income 2,516 4,730 2,768 (5,454)
Net income per
common share* .25 .47 .27 (.54)
1994
Net sales $ 46,226 $ 62,694 $ 49,021 $ 55,865
Gross profit 11,029 14,013 11,216 11,839
Net income 2,876 5,212 3,131 12,217
Net income per
common share* .29 .53 .32 1.23
Common Stock Price*
1995 High 14-1/4 13-1/8 11-3/4 12-1/4
1995 Low 11 10-7/8 9-7/8 9-3/4
1994 High 20-1/8 17-5/8 15 15-7/8
1994 Low 13-1/2 13 12-1/2 11-5/8
1993 High 13 14 14-7/8 15-3/4
1993 Low 8-1/2 9-7/8 11-3/8 11
The Company's common stock is traded on the National Association of Securities
Dealers Automated Quotation System (NASDAQ) National Market
System under the symbol ASTE.
Prices shown are the high and low bid prices as announced by
NASDAQ. The Company has never paid any dividends on its common stock.
The number of shareholders of record is approximately 900.
[FN]
1 Restated to reflect paving equipment business of Barber-Greene as a
discontinued operation.
2750.
(1) Restated to retroactively reflect the two-for-one stock split effected in
the form of a dividend on August 12, 19931993.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
1995 vs. 1994
Net income for 1995 was $4,560,000 or $.45 per share compared to net
income of
$23,436,000 or $2.38 per share in 1994. Net income for 1994 included
$14,947,000 in non-recurring gains as a result of final judgments entered in
connection with the CMI litigation. The decline in 1995 also reflects a
$7,037,000 loss resulting from the abandonment of Astec-Europa, as well as
continuing losses from foreign operations during 1995. Income before
income taxes was $6,141,000 in 1995 compared to $25,737,000 in 1994.
This is shown in the following table:
Year Ended December 31,
1995 1994
Income before income taxes $ 6,141,000 $ 25,737,000
Patent suit recoveries - CMI litigation (14,947,000)
Gain on sale of Wibau-Astec (2,449,000)
Loss on abandonment of Astec-Europa 7,037,000
Loss from foreign subsidiaries 3,598,000 5,366,000
Adjusted pre-tax income from domestic
operations 14,327,000 16,156,000
Income taxes for domestic operations (5,487,000) (916,000)
Net income from domestic operations $ 8,840,000 $ 15,240,000
The decrease in adjusted pre-tax income for domestic operations of
$1,829,000 in 1995 as compared to 1994 is the result of increased gross
profit margin due to increased sales of domestic subsidiaries which were
more than offset by increased interest, research and development expenses
and a decrease in other income from domestic subsidiaries.
Net sales for 1995 were $242,601,000, an increase of $28,795,000 or
approximately 13.5% compared to 1994. Of this increase, $14,615,000 is
attributable to the acquisition of Gibat Ohl and the acquisition of the
remaining 50% interest in Wibau-Astec. CEI, which was acquired in 1995,
accounted for $3,543,000 in sales. Excluding the increase from the German
operations and the CEI acquisition, sales increased $10,637,000 or 5.2%.
International sales by domestic subsidiaries were 24.3% of total sales in
both 1995 and 1994. The net increase in sales reflects a strong sales
increase in asphalt plants, heaters and rock crushing equipment, but
reduced sales in mobile equipment and trenchers.
The gross profit margin for 1995 was 20.5% compared to 22.5% for 1994.
This decrease is primarily due to lower gross profit margins from our
foreign operations which had gross profit margins of 3.4% in 1995
compared to 11.4% in 1994. Domestic operations gross profit margin for
1995 was 22.5% compared to 23.0% for 1994.
In 1995, selling, general, and administrative expenses decreased to 14.1%
of net sales from 14.6% in 1994.
The Gencor patent litigation accounted for $699,000 of legal fees which are
included in 1995 patent damages and expenses.
Research and development expenses increased from 1.5% of net sales in
1994 to 2.1% in 1995 primarily due to foreign operations.
As noted above, income from operations was significantly impacted by the
losses of Astec-Europa in 1995. The total pre-tax loss, including the cost of
abandonment, was approximately $9,945,000. Astec-Europa incurred pre-
tax operating losses in 1995 of approximately $2,908,000. Due to Astec-
Europa's poor operating results and its negative net worth at December 31,
1995, the Company declined to contribute additional capital to Astec-
Europa, electing instead to abandon the subsidiary in accordance with
German law. Astec-Europa management filed a request for bankruptcy in
Germany on February 9, 1996. Consequently, the Company does not
believe that it will be required to fund Astec-Europa's liabilities except for
certain liabilities previously guaranteed by the Company. The loss on
abandonment of approximately $7,037,000 includes the liabilities of Astec-
Europa that were guaranteed by the Company and the remainder of the
original investment recorded on the books of the Company.
Interest expense for 1995 increased to .9% of net sales from .3% in 1994.
The increase resulted from increased inventories in anticipation of sales
which did not materialize and investment in capital expenditures of
$15,160,000.
Other income increased by approximately $722,000 or 36.7% in 1995,
resulting primarily from Astec-Europa (formerly Gibat Ohl) receiving
$1,430,000 to settle various claims related to Astec-Europa's business
operations. The gain on sale of foreign subsidiary of $2,449,000 in 1995 is
due to the sale of Wibau-Astec as described in Note 2 to Consolidated
Financial Statements.
Income tax expense for 1995 was $1,580,000 or approximately 25.7% of
pre-tax income compared to $2,300,000 or approximately 8.9% of pre-tax
income in 1994. The reason for the variance from the normal corporate tax
rate in 1994 was the utilization of net operating loss carryforwards and
establishment of a deferred tax benefit relative to net deductible temporary
differences which could be recovered against future taxes or taxes
previously paid. The variance in 1995 is primarily attributed to foreign
operations. See Note 9 to Consolidated Financial Statements. Due to the
utilization of the majority of its credit carryforwards, the Company's tax
rate for 1996 and subsequent years will approximate the normal corporate
rate.
The backlog at December 31, 1995 is $34,751,000 compared to
$50,465,000 at December 31, 1994 which represents a 31.1% decrease.
The Company's backlog for 1994 was unusually large primarily due to the
optimism of many of our major customers about the strength of the economy
and increased demand resulting from the renewed emphasis to rebuild
infrastructure. The Company's current backlog is more consistent with the
historical trend experienced by the Company.
Results of Operations
1994 vs. 1993
Net sales for 1994 increased $41,005,000 or approximately 23.7%
compared to 1993. Of
this increase, $10,133,000 iswas attributable to the acquisition of Gibat Ohl
and the remaining 50% of Wibau-Astec. Excluding these acquisitions, sales
increased $30,872,000 or 17.9%. International sales by domestic
subsidiaries were 24.3% in 1994 and 17.2% in 1993. The increase in sales
reflectsreflected the strength of our economy, the attitude of our customers toward
the economy, expectations for infrastructure contracts and the quality,
performance and competitiveness of our products as a result of many years
of investment in research and development.
The gross profit margin for 1994 was 22.5% compared to 24.2% for 1993.
Domestic operations gross profit margin for 1994 was 23.0% compared to
24.2% for 1993. Foreign operations gross profit margin was 11.4%. The
domestic gross profit margin was negatively effected in 1994 for several
reasons:
1) Telsmith's consolidation of plant operations with many inefficiencies
involved.
2) Trencor's relocation to facilities in Grapevine, Texas from Grand Prairie,
Texas.
3) Inefficiencies related to the training of a significant number of new
manufacturing employees at Trencor and training of replacements for
retirees at Telsmith.
4) Trencor's introduction of the Log Hog product line.
Offsetting these negative factors were improved margins at Heatec and
increased manufacturing efficiencies at Roadtec, both of which positively
affected the gross profit margin.
In 1994, selling, general, and administrative expenses decreased to 14.6%
of net sales from 16.6% in 1993. The increase in sales iswas the primary
reason for the percentage reduction.
Research and development expensesexpense declined from 1.7% of net sales in 1993
to 1.5% in 1994, again, primarily due to the increase in sales.
In October 1994, the decision by the United States Supreme Court to deny
certiorari in connection with the appeal filed by CMI Corporation "CMI"("CMI")
brought to a successful end the Company's long-standing patent litigation
with CMI. The Supreme Court's actions effectively denied CMI's request
to appeal a lower court ruling that found that Astec did not have any liability for
infringement of CMI patents and left intact damages payable by CMI to
Astec. As a result, previously established liabilities of $13,870,000,
payable by the Company, were reversed and patent damages of $1,309,000 were
received from CMI. These amounts are shown in Consolidated Statements
of Income as net recoveries and accrual adjustments of patent damages. See
Contingencies"Contingencies" and Note 910 to the Consolidated Financial Statements.
Because our joint venture, Wibau-Astec, continued to be unprofitable, it
became apparent that major changes were necessary and we began a plan of
restructuring. Restructuring costs of $1,500,000 related to Wibau-Astec are
discussed in Note 12 to Consolidated Financial Statements. The
anticipated effect of the restructuring plan iswas reflected in the pro forma
summary included in Note 2.
Interest expense for 1994 decreased to 0.3% of net sales from 1.0% in 1993.
This iswas due to a decrease in overall interest expense combined with the
increase in sales. Plant expansion and improvements were financed by
industrial revenue bonds at favorable interest rates.
Other income decreased by approximately $371,000 or 15.9% in 1994. As
noted inThis
was due to the 1993 Management Discussion and Analysis,fact that one international licensee that was not renewed for
1994 produced $665,000 in license fees in 1993. The equity in loss of joint
venture of $3,177,000 reflects 50% of the losses from the joint venture for
the ten months prior to the purchase of the remaining 50% interest in
Wibau-Astec.
Income tax expense for 1994 was $2,300,000 or approximately 8.9% of pre-
tax income. The primary reasons for the variance from the normal
corporate tax rate arewere the utilization of net operating loss carryforwards
and establishment of a deferred tax benefit relative to net deductible
temporary differences which could be recovered against future taxes or taxes
previously paid. See Note 89 to Consolidated Financial Statements.
In the first quarter of 1993, the Company adopted SFAS No. 109,
"Accounting for Income Taxes". At December 31, 1994, there were net
deferred tax assets of approximately $14,799,000, which arewere comprised of
temporary differences, the tax benefit of net operating loss and credit
carryforwards and foreign net operating loss carryforwards. Temporary
differences relaterelated primarily to inventory reserves, warranty reserves and
bad debt reserves. At December 31, 1994, a valuation allowance of
approximately $10,070,000 was recorded. This valuation allowance offsets
the deferred tax assets relative to net operating loss and credit carryforwards as well as
foreign net operating loss carryforwards. Both
the net operating loss and credit carryforwards are SRLY carryforwards and can
be used to offset only the income of a certain subsidiary of the Company.
As a result, the Company determined that a valuation allowance was
necessary for these items as well as the foreign net operating loss
carryforward, the utilization of which iswas uncertain.
Due to the utilization of the majority of its credit carryforwards, the
Company expects its tax rate for 1995 to approximate the normal corporate
rate.
The backlog at December 31, 1994 was $50,465,000 compared to
$33,100,000 at December 31, 1993 which represents a 52.4% increase. The
increase iswas primarily due to the optimism of our customers about the
strength of the economy and the performance and competitiveness of our
products.
Results of Operations, 1993 vs. 1992
Net sales from continuing operations for 1993 increased $23,668,000, or
approximately 15.9% compared to 1992. International sales declined from
21.9% of total company net sales in 1992 to 17.2% in 1993. Domestic sales
increased by 22.9% in 1993 and 18% in 1992. The improved sales reflect the
optimism of our customers with respect to both the continued improvement of
the economy and the federal role in providing funding for the nation's
surface transportation systems through 1997 with the passage of the
Intermodal Surface Transportation Efficiency Act at the end of 1991.
The gross profit margin for 1993 was 24.2% compared to 22.9% for 1992.
Pricing improved slightly in 1993, but the greatest impact on gross profit
margins was the manufacturing efficiency achieved with improved volume.
In 1993, selling, general, and administrative expenses increased to 16.6% of
net sales from 16.1% in 1992. Large increases were incurred for exhibition
expense for the Conexpo show, legal expenses, international dealer
commissions and profit sharing bonuses.
Research and development expenses as a percentage of sales remained
constant at 1.7% of sales for both 1993 and 1992.
Patent suit damages and expenses decreased by $192,000 compared to 1992
and were 0.2% of 1993 net sales compared to .4% in 1992. The patent suit
damages and expenses relate to the patent suits by CMI against Astec and its
former Barber-Greene subsidiary and the countersuit by Astec against CMI.
See "Contingencies" and Note 9 to the Consolidated Financial Statements.
Interest expense for 1993 decreased to 1.0% of net sales from 2.2% of net
sales in 1992. This decrease was primarily the result of the Company's
reduction of its debt by approximately $25,753,000 resulting primarily from
funds generated by a secondary public stock offering of 1,195,000 shares of
common stock, which raised approximately $27,000,000 for the Company. In
connection with the prepayment of substantially all of its debt, the Company
incurred approximately $545,000 in prepayment penalties and expenses.
Other income in 1993 increased by approximately $370,000 or 16.6% over
1992. The increase is primarily due to increased license fee income which
more than offset a nonrecurring refund of unemployment taxes in 1992.
Increases in service income and the forfeiture of two customer deposits also
contributed to the increase. One international licensee was not renewed for
1994 that produced approximately $665,000 of license fee income in 1993.
The equity in loss of joint venture of $720,000 reflects 50% of the loss from
the Wibau-Astec joint venture in 1993. This loss reflects the continued
European recession in 1993.
Due to the existence of net operating loss carryforwards, income tax expense
for 1993 consisted primarily of state income taxes, foreign income taxes and
federal alternative minimum tax.
Liquidity and Capital Resources
Working capital increased to $53,000,000$58,015,000 at December 31, 19941995 from
$40,767,000$53,000,000 at DecemberResourcesDecember 31, 1993.1994. The Company's debt to
equity ratio was .19 to 1 at December 31, 1995 and .27 to 1 at December 31,
19941994. The debt for foreign subsidiaries has been removed from the balance
sheet as a result of the sale of Wibau-Astec and .0001 to 1 at December 31, 1993. The
increase in 1994 reflects the utilizationabandonment of industrial revenue bonds to
expand and modernize plant facilities as well as debt assumed in connection
with acquisitions.Astec-
Europa.
Total short-term borrowings, including current maturities of long-term debt,
were $774,000 at December 31, 1995 and $8,573,000 at December 31,
1994 and $10,000 at December 31, 1993.1994. Long-term debt, less current maturities was $17,150,000 at December
31, 1995 and $16,155,000 at December 31, 1994 and zero at December 31, 1993.1994.
Capital expenditures of $21,886,000$15,160,000 were made in 19941995 as compared to
capital expenditures in 19931994 of $8,767,000.$21,886,000. The Company utilized
industrial revenue bonds in 1994 in the amount of $8,000,000 to finance the
Grapevine, Texas (Trencor) project which included improvements to the
existing facility as well as additions of new equipment. Industrial bonds
were issued in February 1994 in the amount of $6,000,000 to assist in
financing the Telsmith expansion at Mequon, Wisconsin.
The Company has aan unsecured revolving credit loan agreement with The
First National Bank of Chicago. The line of credit is $15,000,000.$22,000,000. This
credit facility expires June 30, 1997. At December 31, 1994, $2,655,0001995, $4,150,000 of
the line of credit was utilized. The credit line is unsecured. At December 31, 1994,1995 the Company was in
violation of the covenant relative to$10,000,000 limit on capital expenditures and has received
a waiver for such violation.
Wibau-Astec has GermanAs a result of the Company's decision to abandon Astec-Europa (see Note
3 to the Consolidated Financial Statements), the Company will be required
to pay approximately $2,116,000 for bank linesloans made to Astec-Europa that
were guaranteed by the Company and $1,228,000 in warranties guaranteed
by the Company. It is expected that these amounts will be funded from cash
from operations or by use of credit available totaling $11,253,669
(17,500,000 DM) of which $8,069,577 was outstanding at December 31,
1994. Gibat Ohl has a German bankthe Company's line of credit available of $2,122,000
(3,300,000 DM), $2,925 of which was utilized at December 31, 1994.
On January 31, 1989, the Company placed $10,000,000credit. The guaranteed
payments required for loans and warranties have been accrued and are
included in Senior Notes and
$10,000,000 in Senior Subordinated Notes with Principal Mutual Life
Insurance Company. These notes were repaid during the second and third
quarters of 1993 using cash received from the secondary public stock offering.other liabilities.
For additional information on current and long-term debt, see Note 67 to the
Consolidated Financial Statements.
Contingencies
See Note 910 to Consolidated Financial Statements for information on
certain pending litigation and contingent liabilities arising from recourse
financing arrangements.
Environmental Matters
Based on information available from environmental consultants, the
Company has no material reserve requirements for potential environmental
liabilities.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Astec Industries, Inc.
We have audited the accompanying consolidated balance sheets of Astec
Industries, Inc. and subsidiaries as ofCONSOLIDATED BALANCE SHEET
December 31,
1995 1994
Assets Current assets:
Cash and 1993,cash equivalents note 1 $ 3,133,070 $ 10,471,444
Trade receivables less allowance for doubtful
accounts of $1,279,000 in 1995 and
the
related consolidated statements$1,684,000 in 1994 27,075,401 29,852,180
Notes and other receivables 596,134 215,390
Inventories note 1,4 55,882,679 56,309,735
Prepaid expenses 894,593 2,149,795
Refundable income taxes 2,341,849
Deferred tax asset note 9 6,667,052 2,901,799
Other current assets 5,214 236,229
Total current assets 96,595,992 102,136,572
Property and equipment, net note 5 51,709,033 42,348,792
Other assets:
Goodwill 4,066,152 8,370,662
Notes receivable 572,829
Deferred tax asset note 9 1,827,494
Other 1,412,326 1,280,069
Total other assets 6,051,307 11,478,225
Total $ 154,356,332 $ 155,963,589
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 3,249 $ 8,072,502
Current maturities of income,long-term debt note 7 771,025 500,000
Accounts payable 15,877,964 14,262,518
Customer deposits 4,989,557 6,301,481
Accrued product warranty 2,470,775 3,470,703
Income taxes payable note 9 1,987,511
Other accrued liabilities 14,468,042 14,541,920
Total current liabilities 38,580,612 49,136,635
Long-term debt, less current maturities note 7 17,150,000 16,155,000
Deferred tax liability note 9 2,351,283
Deferred retirement costs note 8 373,310 192,242
Other 106,716
Total liabilities 58,455,205 65,590,593
Shareholders' equity: note 1,11
Preferred stock - authorized 2,000,000 shares of
$1.00 par value; none issued
Common stock - authorized 20,000,000 shares of
$.20 par value; issued and outstanding -
10,092,199 in 1995 and 10,001,831 in 1994 2,018,440 2,000,366
Additional paid-in-capital 51,940,580 50,900,908
Foreign currency translation adjustment 89,975
Retained earnings 41,942,107 37,381,747
Total shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Astec Industries, Inc. and subsidiaries at December 31, 1994 and
1993, and the consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chattanooga, Tennessee
February 18, 1995
CONSOLIDATED BALANCE SHEET
December 31,
1994 1993
Assets Current assets:
Cash and cash equivalents note 1 $ 10,471,444 $ 3,458,218
Trade receivables less allowance for doubtful
accounts of $1,684,000 in 1994 and
$1,191,000 in 1993 29,852,180 18,116,77395,901,127 90,372,996
Total $ 154,356,332 $ 155,963,589
See Notes and other receivables 215,390 973,507
Inventories note 1, 3 56,309,735 40,005,281
Prepaid expenses 2,149,795 1,272,524
Deferred tax asset note 8 2,901,799
Other current assets 236,229 349,886
Patent damage escrow funds note 9 12,309,420
Total current assets 102,136,572 76,485,609
Property and equipment, net note 4 42,348,792 23,659,015
Other assets:
Goodwill 8,370,662 1,966,233
Notes receivable 9,541
Deferred tax asset note 8 1,827,494 572,498
Other 1,280,069 274,038
Total other assets 11,478,225 2,822,310
Total $ 155,963,589 $ 102,966,934
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 8,072,502
Current maturities of long-term debt note 6 500,000 $ 9,520
Accounts payable 14,262,518 10,169,871
Customer deposits 6,301,481 1,430,449
Accrued product warranty 3,470,703 1,781,733
Income taxes payable note 8 1,987,511 1,111,928
Reserve for patent damages note 9 13,250,048
Other accrued liabilities 14,541,920 7,965,112
Total current liabilities 49,136,635 35,718,661
Long-term debt, less
current maturities note 6 16,155,000
Deferred retirement costs note 7 192,242 3,033,536
Other 106,716 109,838
Total liabilities 65,590,593 38,862,035
Shareholders' equity: note 1,10
Preferred stock, authorized 2,000,000 shares of
$1.00 par value; none issued
Common stock, authorized 20,000,000 shares of
$.20 par value; issued and outstanding,
10,001,831 in 1994 and 9,795,402 in 1993 2,000,366 1,959,080
Additional paid-in capital 50,900,908 48,200,446
Foreign currency translation adjustment 89,975
Retained earnings 37,381,747 13,945,373
Total shareholders' equity 90,372,996 64,104,899
Total $ 155,963,589 $ 102,966,934
[FN]
See notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
1994 1993 1992
Net sales $ 213,806,411 $ 172,801,465 $ 149,132,958
Cost of sales 165,709,245 130,906,009 114,960,249
Gross profit 48,097,166 41,895,456 34,172,709
Selling, general, and
administrative expenses 31,142,335 28,624,179 23,968,553
Research and
development expenses 3,165,795 2,922,921 2,580,146
Patent suit damages
and expenses (net recoveries
and accrual
adjustments) note 9 (14,947,498) 374,740 566,502
Restructuring costs note 12 1,500,469
Income from operations 27,236,065 9,973,616 7,057,508
Other income (expense):
Interest expense (712,853) (1,787,742) (3,241,066)
Loan prepayment penalty
and expenses note 6 (544,783)
Interest income 426,489 516,957 392,798
Other income - net 1,963,633 2,334,407 2,226,820
Equity in loss of joint
venture note 2 (3,176,834) (720,000)
Income before income taxes 25,736,500 9,772,455 6,436,060
Income taxes note 8 2,300,126 434,246 421,807
Net income $ 23,436,374 $ 9,338,209 $ 6,014,253
Earnings per Common and Common Equivalent Share:
Net income: note 1
Primary $ 2.38 $ 1.07 $ .82
Fully diluted .81
Weighted average number of
common and common
equivalent shares outstanding: note 1
PrimaryCONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
1995 1994 1993
Net sales $ 242,601,351 $ 213,806,411 $ 172,801,465
Cost of sales 192,844,160 165,709,245 130,906,009
Gross profit 49,757,191 48,097,166 41,895,456
Selling, general, and
administrative expenses 34,325,974 31,142,335 28,624,179
Research and
development expenses 5,128,495 3,165,795 2,922,921
Patent suit damages and
expenses (net recoveries
and accrual
adjustments) note 10 699,222 (14,947,498) 374,740
Restructuring costs note 12 1,500,469
Loss on abandonment
of foreign subsidiary note 3 7,037,105
Income from operations 2,566,395 27,236,065 9,973,616
Other income(expense):
Interest expense (2,125,261) (712,853) (1,787,742)
Loan prepayment penalty
and expenses note 7 (544,783)
Interest income 565,724 426,489 516,957
Other income - net 2,685,161 1,963,633 2,334,407
Gain on sale of foreign
subsidiary note 2 2,448,551
Equity in loss of joint
venture note 2 (3,176,834) (720,000)
Income before income taxes 6,140,570 25,736,500 9,772,455
Income taxes note 9 1,580,210 2,300,126 434,246
Net income $ 4,560,360 $ 23,436,374 $ 9,338,209
Earnings per Common and Common Equivalent Share:
Net income $ .45 $2.38 $ 1.07
Weighted average number of
common and common
equivalent shares
outstanding note 1 10,071,930 9,843,980 8,694,478 7,349,612
Fully diluted 7,459,304
[FN]
See notesNotes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
Common Stock note 1 Additional Foreign Currency Retained
Shares Amount Paid-InPaid-in Capital Translation Adjustment Earnings
Balance
December 31,
1991 3,604,063 $ 720,813 $ 21,965,755 $ (1,407,089)
Issuance of
common
stock 54,571 10,900 325,950
Net income 6,014,253
Balance,
December 31,
1992 3,658,634 $ 731,713 $ 22,291,705 $0 $ 4,607,164
Issuance of
common stock 1,243,067 248,627 26,887,481
Stock
dividend 4,893,701 978,740 (978,740)
Net income 9,338,209
Balance
December 31,
1993 9,795,402 1,959,080 48,200,446 13,945,373
Issuance of
common stock 206,429 41,286 2,700,462
Change during year $89,975$ 89,975
Net income 23,436,374
Balance
December 31,
1994 10,001,831 $2,000,366 $50,900,908 $89,975 $37,381,7472,000,366 50,900,908 89,975 37,381,747
Issuance of
common
stock 90,368 18,074 1,039,672
Change during year (89,975)
Net income 4,560,360
Balance
December 31,
1995 10,092,199 $ 2,018,440 $ 51,940,580 $ 0 $ 41,942,107
[FN]
See notesNotes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1994 1993 1992
Cash Flows from Operating Activities
Net income $ 23,436,374 $ 9,338,209 $ 6,014,253
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 3,941,871 3,105,694 3,448,398
Provision for doubtful
accounts 362,089 742,752 719,117
Provision for inventory
reserves 3,621,218 2,952,918 2,937,459
Provision for warranty 2,616,565 2,689,441 2,699,657
Provision for patent damages
(net recoveries and
accrual adjustments) (13,250,048) 13,697
Foreign currency translation
adjustment 89,975
(Gain) loss on sale of
fixed assets 322,587 (19,976) (224,367)
Equity in loss of joint venture 3,176,834 720,000
(Increase) decrease in:
Receivables (7,660,990) (7,105,758) (2,646,546)
Inventories (3,537,955) (2,988,734) (563,442)
Prepaid expenses (803,177) (337,248) (38,676)
Patent damage escrow funds 12,309,420 (705,431) (3,667,305)
Deferred tax asset (4,156,695) (572,598)
Other assets (1,916,921) (400,318) 198,238
Increase (decrease) in:
Accounts payable 2,138,449 1,054,970 (138,856)
Customer deposits (1,738,643) 113,091 (555,655)
Accrued product warranty (2,256,128) (2,459,558) (2,421,631)
Income taxes payable 400,355 877,225 169,777
Reserve for patent damages 681,711 642,237
Other accrued liabilities (947,201) 1,376,519 (1,363,786)
Total adjustments (7,288,395) (261,603) (805,381)
Net cash provided by
operating activities 16,147,979 9,076,606 5,208,872
Cash Flows From Investing Activities
Proceeds from sale of property
and equipment - net 307,099 74,284 1,827,358
Expenditures for property
and equipment (21,886,011) (8,767,135) (2,492,249)
Repayments on notes receivable 600,499 47,672 89,071
Investment in joint venture (635,700) (589,900)
Cash payments in connection
with business combination,
net of cash acquired 1,447,965
Net cash (used by)
investing activities (20,166,148) (9,235,079) (575,820)
[FN]CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1995 1994 1993
Cash Flows From Operating Activities
Net income $ 4,560,360 $ 23,436,374 $ 9,338,209
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 5,697,862 3,941,871 3,105,694
Provision for doubtful accounts 533,136 362,089 742,752
Provision for inventory
reserves 1,196,876 3,621,218 2,952,918
Provision for warranty 3,194,240 2,616,565 2,689,441
Provision for patent damages
(net recoveries and
accrual adjustments) (13,250,048) 13,697
Foreign currency translation
adjustment (74,519) 89,975
(Gain) loss on sale of
fixed assets (263,195) 322,587 (19,976)
Equity in loss of joint venture 3,176,834 720,000
Gain on sale of foreign
subsidiary (2,448,551)
Loss on abandonment of foreign
subsidiary 7,037,105
(Increase) decrease in:
Receivables (2,551,526) (7,660,990) (7,105,758)
Inventories (5,921,052) (3,537,955) (2,988,734)
Prepaid expenses (2,071,266) (803,177) (337,248)
Patent damage escrow funds 12,309,420 (705,431)
Deferred tax asset 413,524 (4,156,695) (572,598)
Other assets (993,322) (1,916,921) (400,318)
Increase (decrease) in:
Accounts payable 6,062,733 2,138,449 1,054,970
Customer deposits (1,211,925) (1,738,643) 113,091
Accrued product warranty (3,433,374) (2,256,128) (2,459,558)
Income taxes payable (1,117,518) 400,355 877,225
Reserve for patent damages 681,711
Other accrued liabilities (2,373,657) (947,201) 1,376,519
Total adjustments 1,675,571 (7,288,395) (261,603)
Net cash provided by
operating activities 6,235,931 16,147,979 9,076,606
Cash Flows From Investing Activities
Proceeds from sale of property
and equipment - net 953,766 307,099 74,284
Expenditures for property
and equipment (15,159,921) (21,886,011) (8,767,135)
Cash received in connection
with sale of subsidiary (36,687)
Cash balance abandoned
with subsidiary (203,643)
Repayments on notes receivable 95,256 600,499 47,672
Investment in joint venture (635,700) (589,900)
Cash payments in connection
with business combination, net
of cash acquired (834,591) 1,447,965
Net cash (used by) investing
activities (15,185,820) (20,166,148) (9,235,079)
Cash Flows From Financing Activities
Proceeds from industrial bonds 14,000,000
Proceeds form issuance of
common stock 9,750 34,750 27,136,109
Net (repayments) borrowings
under revolving credit loan 1,495,000 2,655,000 (4,675,000)
Principal repayments of industrial
bonds, loans and notes payable (1,523,213) (5,658,355) (21,078,374)
Proceeds from debt and
notes payable 1,629,978
Net cash provided by
financing activities 1,611,515 11,031,395 1,382,735
Increase (decrease) in cash and
cash equivalents (7,338,374) 7,013,226 1,224,262
Cash and cash equivalents,
beginning of period 10,471,444 3,458,218 2,233,956
Cash and cash equivalents
end of period $ 3,133,070 $ 10,471,444 $3,458,218
Supplemental Cash Flow Information
Cash paid during the year for:
Interest $ 1,800,598 $ 595,767 $ 2,600,688
Income taxes $ 5,088,465 $ 6,282,709 $ 176,021
Excluded from the Consolidated
Statements of Cash Flows were
the following effects of non-cash
investing and financing activities:
Capital stock issued for purchase
of subsidiary:
Investment in subsidiary $ 1,047,996 $ 2,706,996
Capital stock (17,467) (39,871)
Additional paid-in-capital (1,030,529) (2,667,125)
Non-cash sale of assets
by assumption of receivable:
Property and equipment $ (8,244)
Receivable - other 8,244
Non-cash transfer of assets:
Trade receivables $ 90,435
Notes receivables (90,435)
Non-cash purchase of assets:
Property, plant and equipment $ 547,587
Accrued liability (547,587)
Non-cash assets assumed in
connection with recourse
customer financing:
Notes receivables $ 369,229
Inventory (369,229)
See notesNotes to Consolidated Financial Statements.
Year Ended December 31,
1994 1993 1992
Cash Flows From Financing Activities
Proceeds from industrial
bonds 14,000,000
Proceeds from issuance of
common stock 34,750 27,136,109 336,850
Net (repayments) borrowings
under revolving credit loan 2,655,000 (4,675,000) (1,655,000)
Principal repayments of
loans and notes payable (5,658,355) (21,078,374) (6,831,560)
Net cash provided by (used by)
financing activities 11,031,395 1,382,735 (8,149,710)
Increase (decrease) in cash
and cash equivalents 7,013,226 1,224,262 (3,516,658)
Cash and cash equivalents,
beginning of period 3,458,218 2,233,956 5,750,614
Cash and cash equivalents,
end of period $ 10,471,444 $ 3,458,218 $ 2,233,956
Supplemental Cash Flow Information
Cash paid during the year for:
Interest $ 595,767 $ 2,600,688 $ 3,213,499
Income taxes $ 6,282,709 $ 176,021 $ 462,210
Excluded from the Consolidated
Statements of Cash Flows
were the following effects
of non-cash investing and
financing activities:
Non-cash assets assumed in
connection with repossessions:
Trade receivables $ (1,421,239)
Notes receivable (183,855)
Inventories 1,421,239
Other current assets 183,855
Capital stock issued for purchase
of foreign subsidiary:
Investment in foreign subsidiary $2,706,996
Capital stock (39,871)
Additional paid-in-capital (2,667,125)
Non-cash sale of assets
by assumption of receivable:
Property and equipment $ (8,244)
Receivable - other 8,244
Non-cash transfer of assets:
Trade receivables $90,435
Notes receivable (90,435)
[FN]
See notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation - The consolidated
financial statements include the accounts of
Accounting Policies Astec Industries, Inc. and its
subsidiaries. The Company's wholly-owned subsidiaries at December 31,
19941995 are as follows:
Astec, Inc. Heatec,Roadtec, Inc. CEI Enterprises, Inc.
Telsmith, Inc. Roadtec,Heatec, Inc. Trencor, Inc.Inc
During 1995 Wibau-Astec Maschinenfabrik GmbH
(Wibau-Astec)("Wibau-Astec") was sold and Gibat Ohl Ingenieurgesellschaft fur
Anlagentechnik (Gibat Ohl)("Gibat Ohl") was abandoned. See Notes 2 and 3.
All significant intercompany transactions have been eliminated in
consolidation.
Use of Estimates - The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
Segment Information - The Company operates in one industry segment. Its
products are used predominately for road construction and for the
manufacture and processing of construction aggregates. International sales
by domestic subsidiaries were $58,965,000, $52,031,000, $29,693,000, and $32,659,000,$29,693,000
for the years ended December 31, 1995, 1994 1993 and 1992,1993, respectively. Net
sales and net loss (including equity in loss of joint venture)losses of foreign operations were $24,748,000 and $3,044,000
for the year ended December 31, 1994, were1995, and $10,133,000 and $5,394,000 respectively.for
the year ended December 31, 1994. At December 31, 1994, assets of
foreign subsidiaries were $23,953,000. See Notes 2 and 3.
Cash Equivalents - The Company considers all highly liquid instruments
purchased with a maturity of less than three months to be cash equivalents.
Inventories - Inventories excluding(excluding used equipmentequipment) are stated at the lower
of first-in, first-out cost or market. Used equipment inventories are stated
on the specific unit cost method, which in the aggregate is less than market.
Property and Equipment - Property and equipment is stated at cost.
Depreciation is computed generally on the straight-line method for financial
reporting purposes at rates considered sufficient to amortize costs over
estimated useful lives. Depreciation is computed generally on both
accelerated and straight-line methods for tax reporting purposes.
Maintenance and repairs are expensed as incurred.
Goodwill - Goodwill represents the excess of cost over the fair value of net
assets acquired. Goodwill amounts are being amortized using the straight-linestraight-
line method over twenty years. Additions to goodwill in 19941995 reflect the
purchase of the Capital Trencher product line, the Log Hog
product line, the additional 50% of Wibau-Astec, and Gibat Ohl.CEI Enterprises, Inc.
Product Warranty - The Company provides product warranties against
defects in materials and workmanship for periods ranging from ninety days
to one year following the date of sale. Estimated costs of product warranties
are charged to cost of sales in the period of the sale.
Revenue Recognition - A portion of the Company's equipment sales
represents equipment produced in the Company's plants under short-term
contracts for a specific customer project or equipment designed to meet a
customer's specific requirements. Equipment revenues are recognized in
compliance with the terms and conditions of each contract, which is
ordinarily at the time the equipment is shipped. Certain contracts include
terms and conditions through which the Company recognizesrecognized revenues
upon completion of equipment production which is subsequently stored at
the Company's plant at the customer's request. Revenue is recorded on
such contracts upon the customer's assumption of title and all risks of
ownership.
Credit Risk1. Summary of Significant Accounting Policies
Foreign Currency Translation - The
financial statements of foreign subsidiaries have been translated into
U.S. Dollars in
accordance with FASB Statement No. 52, "Foreign Currency
Translation". All balance sheet accounts have
been translated using the exchange rate in effect at the balance sheet date.
Income statement amounts have been translated using average exchange
rate for the year. The gains and losses resulting from the changes in
exchange rates from year to year have been reported separately as a
component of shareholders' equity.
Stock Based Compensation - The Company sells productsgrants stock options for a fixed
number of shares to a wide varietyemployees with an exercise price equal to the fair value
of customers.the shares at the date of grant. The Company performs ongoing credit evaluations of its customersaccounts for stock options
granted in accordance with APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and, generally does
not require collateral. The Company maintains an allowanceaccordingly, recognizes no compensation
expense for doubtful accounts at a level which management believes is sufficient to cover
potential credit losses. As of December 31, 1994 concentrations of credit
risk with respect to trade receivables are limited due to the wide variety of
customers.stock option grants.
Earnings Per Share - Primary and fully diluted earnings per share are based
on the weighted average number of common and common equivalent shares
outstanding and include the potentially dilutive effects of the exercise of
stock options in years where there are earnings. Fully diluted earnings per
share are not presented for 1995, 1994, andor 1993 since the dilution is not
material. Earnings per share information has been restated to retroactively
reflect the two-for-one stock split effected in the form of a dividend on
August 12, 1993.
Accounting Change - Effective, January 1, 1995, the Company adopted
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of". SFAS No. 121 requires
impairment losses to be recorded on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amount. SFAS No. 121 also addresses the accounting for long-lived assets
that are expected to be disposed of. During 1995, events and circumstances
indicated that approximately $4,400,000 of assets of the Company's
subsidiary, Astec-Europa might be impaired. As further discussed in Note
3, these assets were written off in connection with the abandonment of
Astec-Europa.
2. Business CombinaionsCombinations
On February 28, 1995, the Company acquired the operating assets and
liabilities of Trace Industries, Inc., a New Mexico corporation doing
business as CEI Enterprises ("CEI") in exchange for 87,333 shares of the
Company's common stock and approximately $852,000 in cash. The
operations of CEI are included in the consolidated statements of income
from the effective date of acquisition. The transaction was accounted for as
a purchase and the purchase price of approximately $1,900,000 was
allocated to the net tangible assets acquired based on the estimated fair
market values of the assets acquired. The excess of the purchase price over
the fair market value of CEI's net tangible assets was recorded as goodwill
and is being amortized using the straight-line method over 20 years.
A summary of the net assets acquired is as follows:
Current assets $ 1,035,148
Property, plant and equipment 243,877
Current liabilities (768,647)
Other liabilities (39,683)
Goodwill 1,411,892
Net assets acquired excluding cash 1,882,587
Cash 17,413
Net assets acquired $ 1,900,000
Effective July 1, 1993, the Company entered into a joint
venture with Putzmeister-Werk Maschinenfabrik GmbH (Putzmeister)("Putzmeister") to
form a new German limited liability company,Wibau-Astec
Maschinenfabrik GmbH (Wibau-Astec)("Wibau-Astec"). Wibau-Astec designed,
engineered, manufactured and marketed asphalt plants, stabilization plants,
asphalt and thermal heaters, hot storage systems and soil remediation
equipment. Putzmeister and the Company each owned 50% of Wibau-Astec.Wibau-
Astec. On November 7, 1994, the Company acquired the remaining shares
of Wibau-Astec from Putzmeister for $67,400. The acquisition was
accounted for as a purchase effective November 7, 1994 and accordingly,
the results of operations and accounts of Wibau-Astec subsequent to
November 7, 1994 are included in the Company's
consolidated financial statements. The purchase
price was allocated to the net tangible assets of Wibau-Astec based on the
estimated fair market valuesvalue of the assets acquired. As required by the
purchase method of accounting, the excess amount of the purchase price
over the fair value of Wibau-Astec's net tangible assets was recorded as
goodwill and iswas being amortized using the straight-line method over 20
years. Subsequent to the acquisition of Wibau-Astec, the Company
undertook a plan to restructure Wibau-Astec's operations. See Note 12 -
Restructuring Costs. Effective June 30, 1995, the Company sold Wibau-
Astec to Wirtgen Gesellschaft mit beschrankter Haftung for approximately
$1,109,000. For the six months ended June 30, 1995, Wibau-Astec had a
net loss of approximately $688,000. The Company realized a gain of
approximately $2,449,000 on the sale of Wibau-Astec.
Effective October 17, 1994, the Company acquired the operating assets and
liabilities of Gibat Ohl Ingenieurgesellschaft fur Anlagentechnic (Gibat Ohl)Anlagentechnik ("Gibat
Ohl") in exchange for 193,357 shares of the Company's common stock
and approximately $2,760,000 in cash. The acquisition was accounted for
as a purchase effective October 17, 1994, and accordingly, the results of
operations and accounts of Gibat Ohl subsequent to October 17, 1994 are
included in the Company's consolidated financial statements. The
purchase price of approximately $5,460,000 was allocated to the net
tangible assets of Gibat Ohl based on the estimated fair market valuesvalue of the
assets acquired. The excess of the purchase price over the fair market value
of Gibat Ohl's net tangible assets was recorded as goodwill and iswas being
amortized using the straight-line method over 20 years. During 1995, Gibat
Ohl's name was changed to Astec-Europa and in February 1996, the
Company abandoned Astec-Europa. See Note 3.
A summary of the net assets acquired is as follows:
Wibau-Astec Gibat Ohl
Current assets $ 4,938,766 $ 11,007,164
Property, plant and equipment 412,193 300,657
Current liabilities (8,678,984) (10,029,223)
Other liabilities (2,038,165)
Goodwill 1,193,259 4,153,364
Net assets acquired
excluding cash (4,172,931) 5,431,962
Cash 4,240,331 32,984
Net assets acquired $ 67,400 $ 5,464,946
The following unaudited pro forma summary presents the consolidated
results of operations as if the acquisition of Wibau-Astec and Gibat Ohlacquisitions discussed above had occurred at
the beginning of each periodof the periods presented. Pro forma adjustments have
been made to 1994 and 1993 to reflect the restructuring of Wibau-Astec as
described in Note 12. The pro forma results have been prepared for
comparative purposes only and do not purport to be indicative of the results
that would have occurredincurred had the acquisition occurred at the beginning of
the periods presented or of results which may occur in the future.
Year Ended December 31,
1995 1994 1993
Net sales $ 223,887,000243,493,000 $ 227,891,000 $ 188,823,000
Income from operations 28,380,0006,213,000 28,814,000 10,576,000
Net income 24,619,0004,619,000 24,863,000 9,638,000
Per common and common
equivalent share:
Net income $ 2.50.46 $ 2.53 $ 1.11
Prior to its acquisition of the remaining 50% interest in Wibau-Astec, the
Company's investment in Wibau-Astec was accounted for by the equity
method. Accordingly, net income as presented in the Consolidated
Statements of Income for 1994 and 1993 includes the Company's share of
Wibau-Astec's losses for periods prior to the acquisition of $3,177,000 and
$720,000, respectively.
3. Abandonment of Foreign Subsidiary
During 1995, the Company's subsidiary, Astec-Europa, incurred a net loss of
approximately $2,354,000 and had a negative net worth at
December 31, 1995. The Company determined that it would no longer
support Astec-Europa and on February 9, 1996, Astec-Europa management
filed a request for bankruptcy in Germany. Due to its decision to abandon
Astec-Europa, the Company will not recover any amounts related to Astec-
Europa's assets nor will it be required to liquidate Astec-Europa's
liabilities except to the extent such liabilities were guaranteed by the
Company. Accordingly, Astec-Europa's assets and liabilities at December
31, 1995 were adjusted to liquidation basis values. This, along with the
write-off of the Company's investment in Astec-Europa and the remaining
goodwill associated with Astec-Europa of approximately $3,911,000
resulted in a total write-off related to the abandonment of approximately
$7,037,000 before tax and $3,683,000 after tax. Total losses recognized in
1995, including net loss from operations and the loss on abandonment,
related to Astec-Europa were approximately $9,945,000 before tax or
$6,037,000 after tax.
4. Inventories
Inventories consisted of the following:
December 31,
1995 1994 1993
Raw materials and parts $ 23,709,839 $ 26,705,110
$ 18,418,839
Work-in-process 10,384,847 14,380,192 6,017,940
Finished goods 14,583,127 7,745,709 7,802,956
Used equipment 7,204,866 7,478,724 7,765,546
Total $ 55,882,679 $ 56,309,735
$ 40,005,281
4.5. Property and Equipment Property and equipment consisted of the following:
December 31,
1995 1994 1993
Land, land improvements, and buildings $ 35,220,996 $ 26,676,486
$ 14,062,161
Equipment 39,322,961 37,497,348 27,955,598
Less accumulated depreciation (22,864,623) (21,880,823) (18,437,672)
Land, buildings, and equipment - net 51,679,334 42,293,011 23,580,087
Rental property:
Equipment 1,703,608122,347 1,703,608
Less accumulated depreciation (92,648) (1,647,827) (1,624,680)
Rental property - net 29,699 55,781 78,928
Total $ 51,709,033 $ 42,348,792
$ 23,659,015
5.6. Leases The Company leases certain land, buildings and
equipment which are used in its operations. Total rental expense charged to
operations under operating leases was approximately $1,213,000, $615,000
$427,000 and $384,000$427,000 for the years ended December 31, 1995, 1994 1993 and 19921993
respectively.
Minimum rental commitments for all noncancelable
operating leases at December 31, 1994,1995 are as follows:
19951996 $ 718,000
1996 492,000691,000
1997 246,000444,000
1998 97,000230,000
1999 122,000
2000 and beyond 189,000100,000
The Company also leases equipment to customers under short-term
contracts generally ranging from 2two months to 6six months. Rental income
under such leases was $1,630,000, $1,394,000 $1,719,000 and $2,470,000,$1,719,000 for the years
ended December 31, 1995, 1994 and 1993, and 1992, respectively.
6.7. Long-term Debt Long termLong-term debt consisted of the following:
December 31,
1995 1994 1993
Revolving credit loan of
$22,000,000 at December 31, 1995
and $15,000,000 at December 31, 1994,
and 1993,
available through June 30, 1997 at an
interest rate of prime less a quarter,
which was 8.25% and 6.0%
at December 31, 1995
and 1994 and 1993, respectively$ 4,150,000 $ 2,655,000
Loans payable in monthly installments maturing at various dates
through 19951996 at interest rates
from 7.25%8.5% to 14.85% $ 9,5209.25% 271,025
Industrial Development Revenue Bonds
payable in semi-annualannual installments through
2006 at weekly negotiated interest rates 5,500,000 6,000,000
Industrial Development Revenue Bonds due in
20092019 at weekly negotiated interest rates 8,000,000 8,000,000
Total long-term debt 17,921,025 16,655,000
Less current maturities 771,025 500,000 9,520
Long-term debt less
current maturities $ 17,150,000 $ 16,155,000
$ 0
On January 31, 1989,During 1995, the Company placed $10,000,000 in Senior Notes and
$10,000,000 in Senior Subordinated Notes with Principal Mutual Life Insurance
Company ("Principal"). The proceeds of the notes placed with Principal were
applied to the outstanding revolving credit loan with The First National
Bank of Chicago ("FNBC"). During 1993, both the Senior and Subordinated
Notes with Principal were repaid in full. Related prepayment penalties and
expenses are reflected on a separate line in the Consolidated Statements of
Income.
During 1994, the Company negotiated a newamended its unsecured revolving loan
agreement.
Theagreement negotiated in 1994 thereby increasing the line of credit is $15,000,000to
$22,000,000. The loan agreement contains certain restrictive covenants
relative to operating ratios and expires June 30, 1997.capital expenditures and also restricts the
payment of dividends. At December 31, 1994,1995, the Company was in
violation of the covenant relative to capital expenditures and has received a
waiver for such violation.
The aggregate of all maturities of long-term debt
in each of the next five years is asa follows:
19951996 $ 500,000
1996 500,000771,025
1997 3,155,0004,650,000
1998 500,000
1999 500,000
2000 and beyond 11,500,000
For 1994,1995, the weighted average interest rate on short term borrowings,
which include current maturities of Industrial Revenue Bonds and notes
payable, were 3.46%4.16% and 8.75%8.62%, respectively.
7.8. Retirement Benefits
A former subsidiary of the Company, the Barber-Greene Company, had defined
benefit pension plans ("Barber-Greene Plans") covering
substantially all of its employees. Non-union benefits were frozen as of
September 1, 1986, and certain union benefits were frozen as of October 31,
1986. The Company retained responsibility for the Barber-Greene Plans
when it sold the Barber-Greene Company in 1991. Telsmith, Inc. also
sponsors a defined benefit pension plan covering certain employees hired
prior to October 14, 1987 who have chosen not to participate in the
Company's 401(k) savings plan. The benefit is based on years of benefit
service multiplied by a monthly benefit as specified in the plan. The
Company's funding policy for its pension plans is to make the minimum
annual contributions required by applicable regulations.
During 1994, the Company made the decision to terminate the Barber-
Greene Plans and purchased annuities to fund the benefits provided for in
the plans. TheIn 1995, the Company has requestedreceived approval from the Internal
Revenue Service to terminate the plans but has yet to receive such approval.plans. As a result, nothe settlement loss of
the plan will occur until 1995. The annuities purchased by the
Company during 1994 areapproximately $46,000 is included in plan assets.Other income-net in 1995.
A reconciliation of the funded status of
the Plans, which is based on a valuation date of September 30, with
amounts reported in the Company's consolidated balance sheets, is as follows:
Year Ended December 31,
1995 1994 1993
Actuarial present value of
benefit obligations:
Vested $ 2,991,159 $ 40,574,462
$ 38,229,010
Nonvested 90,781 85,245 251,677
Accumulated benefit obligation $ 40,659,7073,081,940 $ 38,480,68740,659,707
Projected benefit obligation $ 40,659,7073,081,940 $ 38,480,68740,659,707
Plan assets at fair value 2,539,151 40,589,417 43,018,508
Projected benefit obligation in excess
of (less than) plan assets 542,789 70,290 (4,537,821)
Unrecognized net gain 6,046 450,751 7,976,321
Prior service cost not yet recognized
in net periodic pension cost (148,819) (320,665) (357,323)
Pension liability in the consolidated
balance sheets $ 200,376400,016 $ 3,081,177200,376
Net periodic pension cost for 1995, 1994 1993, and 19921993 included the following
components:
Year Ended December 31,
1995 1994 1993 1992
Service cost - benefits
earned during the period $ 24,585 $ 31,503 $ 26,873 $ 34,426
Interest cost on projected
benefit obligation 219,465 2,565,355 2,754,319 2,761,195
Actual return on plan assets (238,493) 2,148,873 12,318,009 833,167(12,318,009)
Net amortization and deferral 5,405,871(6,682) (5,405,871) 9,345,175 1,948,268
Net (income) expense $ 660,140(1,125) $ 191,642(660,140) $ 14,186(191,642)
The weighted average discount rate used in determining the actuarial
present value of the projected benefit obligation was 7.5% and 8.5% at
September 30, 1995 and 1994, and
7.0% at September 30, 1993.respectively. The expected long-term rate of
return on assets was 9.0% for the years ending September 30, 19941995 and
1993.1994. Plan assets are primarily comprised of corporate equity and corporate
and U.S. Treasury debt securities.
In 1987, the Company adopted deferred savings plans (Savings Plans)plan ("Savings Plans")
under Section 401 (k)401(k) of the Internal Revenue Code, under which
substantially all employees of the Company and its subsidiaries are eligible.
In 1991, the Savings Plans were consolidated and provide that the Company
will match an amount equal to 50% of employee savings subject to certain
limitations. The total expense for such matching was approximately
$777,000, $696,000, $567,000 and $485,000$567,000 for the years ended December 31, 1995,
1994 1993 and 1992,1993 respectively.
In addition to the retirement plans discussed above, the Company has an
unfunded postretirement medical and life insurance plan covering
employees of its Telsmith, Inc. subsidiary and retirees of its former Barber-GreeneBarber-
Greene subsidiary. Effective January 1, 1993, the Company adopted SFAS
No. 106, (Employers'"Employers' Accounting for Postretirement Benefits Other than
Pensions)Pensions". The accumulated postretirement benefit obligation (APBO)("APBO")
at adoption was approximately $674,000 and is being amortized over twenty20
years.
The accumulated postretirement benefit obligation and the amount recognized
in the Company's consolidated balance sheets, is as follows:
December 31,
1995 1994 1993
Accumulated postretirement
benefit obligation:
Retirees $ 130,600246,300 $ 207,500130,600
Active employees 393,500 473,000
425,800639,800 603,600 633,300
Unamortized transition obligation 605,600 639,300(571,900) (605,600)
Unrecognized net gain 118,800 29,800118,800
Accrued postretirement benefit cost $ 116,800186,700 $ 23,800116,800
Net periodic postretirement benefit cost included the following components:
Year Ended December 31,
1995 1994 1993
Service cost $ 53,50053,300 $ 53,500
Interest cost 42,90050,200 42,900
Amortization of transition obligation 33,700 33,700
Amortization of net gain (1,900)
Net expense $ 130,100135,300 $ 130,100
Postretirement benefit costs for 1992 were not material.
A discount rate of 8.5% was used in calculating the APBO. The APBO
assumes a 13.5% increase in per capita health care costs decreasing
gradually to 5.8% for years 2012 and later. A 1% increase in the medical
inflation rate would increase the APBO by approximately $26,800$29,400 and the
expense by approximately $6,000.
8.$7,500.
9. Income Taxes
Effective January 1, 1993, the Company adopted
SFAS No. 109.109, "Accounting for Income Taxes". Prior years' financial statements have not been restated norThere was there anyno
cumulative effect on income from the adoption of SFAS No. 109.
For financial reporting purposes, income before income taxes includes the
following components:
Year Ended December 31,
1995 1994 1993
1992
United States $ 16,497,616 $ 30,726,395 $ 9,474,455
$ 6,436,060
Foreign:
License income 277,855 404,000 1,018,000
Equity in loss of
joint venture (3,176,834) (720,000)
Loss from foreign
subsidiarysubsidiaries (3,597,796) (2,217,061)
Loss on adandonment (7,037,105)
Income before income taxes $ 25,736,5006,140,570 $25,736,500 $ 9,772,455 $ 6,436,060
The provision for income taxes consisted of the following:
Year Ended December 31,
1995 1994 1993
1992
Current $ 1,166,956 $ 7,029,419 $ 434,246
$ 421,807
Deferred (benefit) 413,254 (4,729,293)
Total provision for
income taxes $ 1,580,210 $ 2,300,126 $ 434,246 $ 421,807
A reconciliation of the provision for income taxes
at the statutory rate to those provided is as follows:
Year Ended December 31,
1995 1994 199 19921993
Tax at statutory rates $ 2,087,794 $ 9,007,775 $ 3,322,635 $ 2,188,260
Effect of utilization
of net operating loss
carryforwards net of
alternative minimum tax (1,344,000) (3,008,000) (3,155,253) (1,921,766)
Effect of utilization
of alternative minimum
tax credits (382,000)
Benefit from foreign
sales corporation (327,000) (265,000)
State taxes, net of federal
income tax benefit 522,000 212,000 115,271 155,313
Income taxes of
other countries (553,000) 27,000 151,593
Loss from foreign
operations (413,000) 2,636,000
Recognition of deferred
tax asset 1,827,000 (4,729,000)
Reversal of prior temporary
differences (1,937,000)
Other items (219,584) 738,351
Income Taxestaxes $ 1,580,210 $ 2,300,126 $ 434,246
$ 421,807
At December 31, 1994, the Company had federal net operating loss
carryforwards of approximately $3,800,000 for tax purposes, all of which are
limited by consolidated return rules to use in offsetting only the taxable
income of a subsidiary of the Company. The net operating loss carryforwards
expire at various dates from 1997 through 2005. For financial reporting
purposes, the federal net operating loss carryforwards approximate
$11,600,000. At December 31, 1994, the Company had foreign net operating
loss carryforwards of approximately $14,000,000 available to offset future
income of Wibau-Astec.
At December 31, 1994,1995, the Company had investment tax and other credit
carryforwards of approximately $641,000$98,000 expiring at various dates
principally from 1995 through 1999. Utilization of these credits will be
limited to use in offsetting only the taxable income of a subsidiary of the
Company.
As a result of utilizing the net operating loss carryforwards, net income
from continuing operations increased by approximately $3,008,000, $3,155,000$.13, $.31 and $1,922,000 and related per share amounts increased by approximately $.31,
$.36 and $.26
for the years ended December 31, 1995, 1994 1993 and 1992,1993, respectively.
At December 31, 1994,1995, the companyCompany had deferred tax assets of
approximately $16,861,000,$6,889,000, and deferred tax liabilities of approximately
$2,062,000,$2,475,000, related to temporary differences and tax loss and credit
carryforwards. At December 31, 1994,1995, a valuation allowance of
approximately $10,070,000$98,000 was recorded. This valuation allowance offsets the
deferred tax assets relative to net operating loss and credit carryforwards as well as foreign net
operating loss carryforwards. Both the net operating loss andThe credit
carryforwards are SRLY carryforwards and can be used to offset only the
income of a certain subsidiary. Due to this, the Company determined that a
valuation allowance was necessary for these items as well asitems. The change in valuation
allowance in 1995 is due to the loss of foreign net operating loss
carryforward,carryforwards ($8,085,000) due to the sale of the subsidiary, expiration of
ITC credit carryforwards ($543,000) and the utilization of which is uncertain.operating loss
carryforwards ($1,344,000).
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
statement purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities
and assets are as follows:
Year Ended December 31,
1995 1994 1993
Deferred tax assets:
Inventory reserves $ 1,753,0002,067,000 $ 2,270,0001,753,000
Legal reserves 152,000 100,000 487,000
Pension expense 112,000 109,000 1,098,000
Investment in foreign
joint venture 1,827,000
747,000
Other accrued expenses 3,076,000 3,002,000 2,703,000
Alternative minimum
tax credits 1,216,000
Net operating loss
carryforwards 1,344,000
4,216,000
Foreign net operating
loss carryforwards 1,384,000 8,085,000
Other credit carryforwards 98,000 641,000 760,000
Total deferred tax assets 6,889,000 16,861,000 13,497,000
Deferred tax liabilities:
Property and equipment 2,475,000 2,062,000 1,742,000
Total deferred tax liabilities 2,475,000 2,062,000 1,742,000
Net deferred tax assets 4,414,000 14,799,000 11,755,000
Valuation allowance (98,000) (10,070,000) (11,182,000)
Deferred tax asset $ 4,316,000 $ 4,729,000
$ 573,000
9.10. Contingencies
During 1994, and in previous years, the Company and its former Barber-GreeneThe Company's subsidiary, (now Telsmith, Inc.) were defendants in two patent infringement
actions brought by Robert L. Mendenhall and CMI Corporation ("CMI"), a
competitor, seeking monetary damages and an injunction to cease the alleged
infringement.
In 1990, CMI was awarded damages of $4,457,000 and prejudgment interest of
$2,838,000 or a total of $7,295,000 from Barber-Greene. During 1991, in a
separate trial, CMI was awarded damages of $8,463,000, prejudgment interest
of $5,309,000 and attorney's fees of $737,000 for a total of $14,509,000 from
Astec, and Astec was awarded damages of $667,000 plus $391,000 of prejudgment
interest or a total of $1,058,000 from CMI. The total damages and expenses
awarded to CMI were $20,746,000, net of the $1,058,000 awarded to Astec.
Both Astec and CMI appealed the judgments. In connection with its appeals,
the Company was directed by the courts to pledge substantially all of its real
property and to deposit funds in an escrow account to secure the judgments
against the Company pending the outcome of appeals.
On June 9, 1994, the Company announced that the United States Court of
Appeals for the Federal Circuit had reversed the lower court decision and did
not remand to the lower court for further proceedings the judgments
previously entered against Astec and its former Barber-Greene subsidiary in
the Robert L. Mendenhall and CMI patent litigation. Those judgments totaled
approximately $22,000,000. The Federal Circuit Court ruled in favor of Astec
because the allegedly infringing patents had been held invalid in a separate
third party case. CMI asked the Federal Circuit to reconsider its decision
and to have all of the Federal Circuit judges rehear the appeal. The Company
responded to this request. On September 20, 1994, the Company announced that
the United States Court of Appeals for the Federal Circuit denied the request
from Mendenhall and CMI to reconsider its earlier reversal. With the issuance
of this ruling, the Federal Circuit's review of this ongoing patent
litigation ended.
On October 11, 1994, CMI and Robert L. Mendenhall filed a Petition of Writ
Certiorari asking the U.S. Supreme Court to review the decision of the
Federal Circuit Court of Appeals. The Company filed a response opposing the
Petition and on November 28, 1994, the Supreme Court issued an Order denying
the Petition thus bringing the patent litigation to an end.
As a result of the Supreme Court's refusal to grant certiorari, the Company
received $12,917,000 which was being held in escrow pending the Company's
appeal of the two judgments. In addition, on December 15, 1994, the Company
received $1,309,000 from CMI in satisfaction of the judgment entered in favor
of the Company on its counterclaim against CMI. The receipt of these funds
effectively concluded the litigation between the Company and CMI and Robert
L. Mendenhall which had been pending for a number of years. As a result, the
Company has reversed its accrued liability for patent damages. The reversal
of $13,870,000 in accrued patent damages and the receipt of $1,309,000 in
patent damages from CMI total $15,179,000 and are included in the
Consolidated Statements of Income as Patent suit damages and expenses net
recoveries and accrual adjustments.
In an unrelated case, the Company's Telsmith subsidiary is a
defendant in a patent infringement action brought by Nordberg, Inc., a
manufacturer of a competing line of rock crushing equipment, seeking
monetary damages and an injunction to cease an alleged infringement of a
patent on certain components used in the production of its rock crushing
equipment. This case, being
heard beforeOn March 30, 1995, the U.S.United States District Court for the
Eastern District of Wisconsin has been bifurcated into liability and damages phases. The liability phase
was tried on January 11, 1993; however, no decision has been rendered by the
Court. Becauseissued a ruling in favor of the uncertainties inherentCompany and
entered a declaratory judgment in favor of Telsmith, and against Plaintiff
Nordberg, Inc. declaring that claims 8 through 11 and 13 of Nordberg's
United States patent No. 4,478,373, entitled "Conical Crusher" are
invalid. The Court also entered judgment in favor of Telsmith, Inc. and
against Nordberg, Inc. dismissing Nordberg's claim of infringement
against Telsmith. The Company was pleased with the Court's decision,
but has filed an appeal asking the United States Court of Appeals for the
Federal Circuit to overturn the trial court's decision not to award Telsmith
its attorney's fees in the litigation process,case. Nordberg did not cross-appeal to the Company is unableFederal
Circuit on the Telsmith judgment. The time for doing so has now expired.
The judgment has therefore become "final" as to predict the ultimate outcome of this litigation.those issues not raised by
Telsmith on appeal.
On October 28, 1993, the Company was also named as a
defendant in a patent infringement action brought by Gencor, Inc., a
manufacturer of a competing line of asphalt plants, seeking monetary
damages and an injunction to cease an alleged infringement of a patent on
certain components used in the production of its asphalt plant product line.
This case was filed in the U.S. District Court for the Middle District of
Florida, Orlando Division, and is currentlywent to trial on January 22, 1996. On
February 3, 1996, the jury returned a verdict in the discovery phase.Company's favor
holding that Astec's Double Barrel drum mixer does not infringe the
Gencor patent in question. Judgment on that jury verdict was entered by
the Court on February 5, 1996. It is anticipated that Gencor will appeal.
Management believes this casethat Gencor's anticipated appeal is without merit.
During 1994, the United States Supreme Court refused to
be
without merithear CMI Corporation's petition to overturn the United States Court of
Appeals for the Federal Circuit's reversal of patent damages awarded to
CMI Corporation and intendsRobert L. Mendenhall by a lower court. As a result
of the Supreme Court's refusal to vigorously defend this suit; however, due togrant certiorari, the uncertainties inherentCompany received
$12,917,000 which was being held in escrow pending the Company's
appeal of the two judgments. In addition, on December 31, 1994, the
Company received $1,309,000 from CMI in satisfaction of the judgment
entered in favor of the Company on its counterclaim against CMI. The
receipt of these funds effectively concluded the litigation between the
Company and CMI and Robert L. Mendenhall which had been pending for
a number of years. As a result, in 1994 the Company reversed its accrued
liability for patent damages. The reversal of $13,870,000 in
accrued patent damages and the receipt of $1,309,000 in patent damages
from CMI total $15,179,000 and are included in the litigation process, the Company is unable to
predict the ultimate outcomeConsolidated
Statements of this litigation.Income as Patent suit damages and expenses (net recoveries
and accrual adjustments).
Management has reviewed all claims and lawsuits and,
upon the advice of counsel, has made provision for any estimable losses;
however, the Company is unable to predict the ultimate outcome of the
outstanding claims and lawsuits.
Recourse Customer Financing - Certain customers have
financed purchases of the Company's products through arrangements in
which the Company is contingently liable for customer debt aggregating
approximately $13,800,000$7,362,000 and $13,700,000$13,800,000 at December 31, 19941995 and
1993,1994, respectively. These obligations average five years in duration and
have minimal risk.
Other - The Company is contingently liable for letters of
credit of approximately $2,082,000$3,390,000 issued for bid bonds and performance
bonds.
10.11. Shareholders' Equity
Stock Optionsoptions - The Company has
reserved 300,000 shares of common stock under the 1986 Stock Option
Plan and 500,000 shares of common stock under the 1992 Stock Option
Plan for issuance upon exercise of nonqualified options, incentive options
and stock appreciation rights to officers and employees of the Company and
its subsidiaries at prices determined by the Board of Directors. At
December 31, 1994,1995, a total of 328,800261,800 shares of common stock
related to the 1992 Stock Option Plan are available for options to
be granted.
Nonqualified options are exercisable at a price not less than 85% of the
Board of Directors' determination of the fair market value of the
Company's common stock on the date of the grant. Nonqualified options
are exercisable starting one year from the date of the grant and expire ten
years after the date of the grant. Incentive stock options granted by the
Board of Directors must be exercisable at a price not less than 100% of the
fair market value of the Company's common stock on the date of grant.
Incentive stock options are exercisable immediately after the date of the
grant, except for certain officers of the Company, and expire ten years after
the date of the grant. Stock appreciation rights may be granted by the
Board of Directors in conjunction with the grant of an incentive or
nonqualified option. A stock appreciation right permits a grantee to receive
payment in either cash or shares of the Company's common stock equal to
the difference between the fair market value of the common stock and the
exercise price for the related option.
The following is a summary of stock option information:
Number Option Price
of Shares Range Per Share
Outstanding, December 31, 1991 238,800 $ 1.375 - 4.675
Granted 140,000 3.25
Expired (12,800) 4.675
Exercised (109,000) 1.375 - 4.675
Outstanding, December 31, 1992 257,000 $ 1.375 - 4.675
Exercised (87,000) 1.375 - 4.675
Outstanding, December 31, 1993 170,000 1.375 - 4.675
Granted 87,000 14.875 - 16.363
Exercised (13,000) 1.375 - 3.25
Outstanding, December 31, 1994 244,000 1.375 - 16.363
Granted 67,000 12.875 - 14.163
Exercised (3,000) 3.25
Outstanding, December 31, 1995 308,000 $ 1.375 - 16.363
On July 29, 1993, the Company's Board of Directors approved a two-for-one
split of the Company's common stock in the form of a 100% stock
dividend for shareholders of record as of August 12, 1993. A total of
4,893,701 shares of common stock were issued in connection with the split.
The stated par value of each share was not changed. A total of $978,740
was reclassified from additional paid-in capitalpaid-in-capital to the Company's common
stock account. All share and per share amounts for 1993 and prior years
have been restated to retroactively reflect the stock split.
11. Related Party Transactions
In September 1991,The Company has adopted a Shareholder Protection Rights Agreement and
declared a distribution of one right (the "Right") for each
outstanding share of Company common stock, par value $0.20 per share
(the "Common Stock"). Each Right entitles the Company's Chairman, its Senior Vice President,registered holder to
purchase from the Company one one-hundreth of a share (a "Unit") of
Series A Participating Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), at a purchase price of $36.00 per Unit, subject to
adjustment. The rights currently attach to the certificates representing
shares of outstanding Company Common Stock, and no separate Rights
certificates will be distributed. The Rights will separate from the PresidentCommon
Stock upon the earlier of its Telsmith, Inc. subsidiary formedten business days (unless otherwise delayed by the
Board) following the (i) public announcement that a general partnership whichperson or group of
affiliated or associated persons (the "Acquiring Person") has acquired,
25%obtained the right to acquire, or otherwise obtained beneficial ownership of
15% or more of the common stockthen outstanding shares of American Rock Products, Inc.,Common Stock, or (ii)
commencement of a tender offer or exchange offer that would result in an
Ohio
corporation engaged inAcquiring Person beneficially owning 15% or more of the then outstanding
shares of Common Stock. The Board of Directors may terminate the Rights
without any payment to the holders thereof at any time prior to the close of
business of supplying crushed rock to concrete and
asphalt producers in the southeastern Oklahoma area ("Amrock"). These
individuals own interests in the partnership of 50%, 25% and 25%,
respectively. In December 1992, the rock crushingten business of Amrock was
sold to a competitor, exclusive of two used rock crushing machines and certain
other miscellaneous inventory and equipment.
In March 1994, Amrock sold two of these used rock crushing machines to
Telsmith for $50,000 and $70,000, respectively. The purchase price for each
of these machines was determineddays following announcement by the presidentCompany that a
person has become an Acquiring Person. The Rights, which do not have
voting power and are not entitled to dividends, expire on December 21,
2005. In the event of Telsmith based on his
opiniona merger, consolidation, statutory share exchange or
other transaction in which shares of their fair market value atCommon Stock are exchanged, each
Unit of Preferred Stock will be entitled to receive the timeper share amount paid
in respect of purchase. Telsmith intends
to market both rock crushing machines to its customers for sale in the
ordinary courseeach share of business.Common Stock.
12. Restructuring Costs
In the fourth quarter of 1994, the
Company developed and implemented a plan to restructure the operations of
Wibau-Astec. In connection with the restructuring, the Company accrued
costs of $1,500,000 $1,250,000,($1,250,000, net of tax, or $0.12 per share.share). The plan
included, among other things, the cessation of manufacturing operations at
Wibau-Astec along with related personnel reductions as well as personnel
reductions in engineering and administration. Total personnel reductions
were approximately 150. The plan was communicated to employees and
severance notices given during the fourth quarter of 1994.
As of the end of 1994, the restructuring was substantially
complete. Total costs incurred were for the write-down of certain assets to
estimated fair market value, severance payments and lease termination
expenses. Severance costs and exit costs incurred were approximately
$1,137,000 and $363,000, respectively. Costs incurred during 1995 were
substantially the same as the amounts accrued as of December 31, 1994.
Wibau-Astec will sellsold Astec asphalt plants either
manufactured in the United States or subcontracted in Europe. Wibau-Astec will continue to sellWibau-
Astec also sold Wibau-Astec parts and serviceserviced a large customer base and
will utilizeutilized subcontractors as needed for parts and/or manufacturing
components in Europe.
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE (VIII)
VALUATION AND QUALIFYING ACCOUNTS FOR
CONTINUING OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
December 31, 1994:
Reserves deducted from assets to which they apply:
AllowanceAs described in Note 2, Wibau-Astec was sold in
1995.
13. Financial Instruments
Credit Risk - The Company sells
products to a wide variety of customers. The Company performs ongoing
credit evaluations of its customers and generally does not require collateral.
The Company maintains an allowance for doubtful
accounts $ 1,191,083 $ 362,089 $ 467,607 (3) $ 336,537 $1,684,242
Reserve for
inventory $ 6,494,533 $3,621,218 $ 0 $5,121,716 $4,994,035
Other Reserves:
Product warranty $1,781,733 $2,616,565 $ 0 $927,595 $3,470,703
Reserve for
patent damages $13,250,048 $ 620,290 $ 0 13,870,338 $0
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
December 31, 1993:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
accounts $ 1,060,588 $ 742,752 $ 21,609 $ 633,866 (1) $ 1,191,083
Reserve for
inventory $ 5,948,084 $ 2,952,918 $ 0 $ 2,406,469 $ 6,494,533
Other Reserves:
Product warranty $1,551,850 $ 2,689,441 $0 $ 2,459,558 (2) $ 1,781,733
Reserve for
patent damages 12,554,640 $ 695,408 $ 0 $ 0 13,250,048
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
December 31, 1992:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
accounts $ 1,038,155 $ 719,117 $ 152,052 848,736 (1) $ 1,060,588
Reserve for
inventory $ 8,567,872 $ 2,937,459 $ 0 5,557,247 $ 5,948,084
Other Reserves:
Product warranty $ 1,273,824 $ 2,699,657 $ 0 $2,421,631 (2) $ 1,551,850
Reserve for
patent damages $ 11,912,403 $ 642,237 $ 0 0 $12,554,640
[FN]
(1) Uncollectible accounts written off, netat a level
which management believes is sufficient to cover potential credit losses. As
of recoveries.
(2) Warranty costs chargedDecember 31, 1995, concentrations of credit risk with respect to trade
receivables are limited due to the reserve.
(3) Represents reserve balanceswide variety of subsidiaries acquired in
1994.
SIGNATURES
Pursuant to the requirementscustomers.
Fair Value of Section 13 or 15(d)Financial Instruments - The book value of
the Securities Exchange ActCompany's financial instruments approximates their fair values.
Financial instruments include cash, accounts receivable, accounts payable
and long and short-term debt. Substantially all of 1934,the Company's short
and long-term debt is floating rate debt and, accordingly, book value
approximates its fair value.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Astec Industries, Inc.
has
duly caused this reportWe have audited the accompanying consolidated balance sheets of Astec
Industries, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1995.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Astec Industries, Inc. and subsidiaries at December 31, 1995 and 1994, and
the consolidated results of its operations and its cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
As discussed in Note 1, in 1995 the Company changed its method of
accounting for the impairment of long-lived assets and for long-lived assets
to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASTEC INDUSTRIES, INC.
BY:disposed of.
/s/ J. Don BrockERNST & YOUNG LLP
Chattanooga, Tennessee
February 27, 1996
CORPORATE INFORMATION
Corporate and Subsidiary Executive Officers
J. Don Brock Chairman of the Board and President
(Principal Executive Officer)
BY: /s/ Albert E. GuthThomas R. Campbell President, Roadtec, Inc.
M. Brent England President, CEI Enterprises, Inc.
Jerry F. Gilbert President, Trencor, Inc.
Albert E. Guth Senior Vice President, Secretary and Treasurer
(Principal
Financial and Accounting Officer)
Date: March 2, 1995
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by a majority of
theF. McKamy Hall Corporate Controller
James G. May President, Heatec, Inc.
W. Norman Smith President, Astec, Inc.
Robert G. Stafford President, Telsmith, Inc.
Board of Directors
of the Registrant on the dates indicated:
SIGNATURE TITLE DATE
Chairman of the Board March 2, 1995
J. Don Brock and President
Senior Vice President, March 2, 1995
Albert E. Guth Secretary, Treasurer
and Director
President - Astec, Inc. March 2, 1995
W. Norman Smith and Director
President - Telsmith, Inc. March 2, 1995
Robert G. Stafford and Director
President - Trencor, Inc. March 2, 1995
Jerry F. Gilbert and Director
SIGNATURE TITLE DATE
Director March 2, 1995
E. D. Sloan, Jr.
Director March 2, 1995
James R. Spear
Director March 2, 1995
Joseph Martin, Jr.
Director March __, 1995
George C. Dillon
Director March 2, 1995
G.W. Jones
Director March 2, 1995
Daniel K. Frierson
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Astec Industries, Inc. has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASTEC INDUSTRIES, INC.
BY: /s/ J. Don Brock
J. Don Brock, Chairman+#Chairman of the Board and President
(Principal Executive Officer)
BY: /s/George C. Dillon *Former Chairman, Manville Corporation
Daniel K. Frierson *Chairman and CEO, Dixie Yarns Inc.
Jerry F. Gilbert President, Trencor, Inc.
Albert E. Guth Albert E. Guth, Senior+Senior Vice President, Secretary
and Treasurer(Principal
FinancialTreasurer
G. W. Jones *Former President of APAC, Inc.
Joseph Martin, Jr. *Partner, Martin and Accounting Officer)
Date: March 2, 1995
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by a majorityLacy
William B. Sansom *Chairman and CEO , The H.T. Hackney Co.
E.D. Sloan, Jr. *Chairman of the Board, of DirectorsNolas
Trading Co, Inc.
W. Norman Smith +#President, Astec, Inc.
Robert G. Stafford #President, Telsmith, Inc.
*Member of the Registrant on the dates indicated:
SIGNATURE TITLE DATE
/s/ J. Don Brock ChairmanAudit and Compensation Committees
+Member of the Board
March 2, 1995
J. Don BrockExecutive Committee
#Member of the Technical Committee
Subsidiaries
Astec, Inc. Chattanooga, Tennessee
Heatec, Inc. Chattanooga, Tennessee
CEI Enterprises, Inc. Albuquerque, New Mexico
Roadtec, Inc. Chattanooga, Tennessee
Telsmith, Inc. Mequon, Wisconsin
Trencor, Inc. Grapevine, Texas
Transfer Agent Registrar
Chemical Mellon Shareholder Services, L.L.C.
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
Stock Exchange NASDAQ National Market - ASTE
Auditors Ernst & Young LLP Chattanooga, Tennessee
General Counsel and
President
/s/ Albert E. GuthLitigation Stophel & Stophel, P.C. Chattanooga, Tennessee
Securities Counsel Alston & Bird Atlanta, Georgia
Corporate Office
Astec Industries, Inc.
4101 Jerome Avenue
P.O. Box 72787
Chattanooga, Tennessee 37407
Telephone 423-867-4210
The Form 10-K, as filed with the Securities and Exchange Commission,
may be obtained at no cost by any shareholder upon written request to the
Senior Vice President March 2, 1995
Albert E. Guth Secretary, Treasurer
and Director
/s/ W. Norman Smith President -of Astec Industries, Inc.
March 2, 1995
W. Norman Smith and Director
/s/ Robert G. Stafford President - Telsmith, Inc. March 2, 1995
Robert G. Stafford and Director
/s/ Jerry F. Gilbert President - Trencor, Inc. March 2, 1995
Jerry F. Gilbert and Director
SIGNATURE TITLE DATE
/s/ E.D. Sloan Jr. Director March 2, 1995
E.D. Sloan, Jr.
/s/ James R. Spear Director March 2, 1995
James R. Spear
/s/ Joseph Martin, Jr. Director March 2, 1995
Joseph Martin, Jr.
/s/ George C. Dillon Director March ,1995
George C. Dillon
/s/ G.W. Jones Director March 2, 1995
G.W. Jones
/s/ Daniel K. Frierson Director March 2, 1995
Daniel K. Frierson
Commission File No. 0-14714
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS FILED WITH ANNUAL REPORT
ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
ASTEC INDUSTRIES, INC.The Annual Meeting will be held at 10:00 a.m. on Thursday, April 25,
1996 in the Training Center at the Corporate office located at 4101 Jerome
Avenue, Chattanooga, Tennessee 37407
ASTEC INDUSTRIES, INC.
FORM 10-K
INDEX TO EXHIBITS
Sequentially
Exhibit Number Description Numbered Page
Exhibit 2.2 Share Purchase and Transfer Agreement by and
between the Company and Gibat Ohl Ingenieurgesellschaft
fur Anlagentechnik mbH, dated as of October 5, 1994.
Exhibit 4.2 Indenture of Trust, dated April 1, 1994, by and
between Grapevine Industrial Development Corporation and
Bank One, Texas, NA, as Trustee.
Exhibit 10.80 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Dresdner Bank Aktiengensellschaft, dated
as of December 22, 1993.
Exhibit 10.81 Letter of Guarantee of Wibau-Astec Maschinenfabrik GmbH
in favor of Berliner Hondels - und Frankfurter Bank,
dated as of December 22, 1993.
Exhibit 10.82 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Bayerische Vereinsbank, dated as of
December 22, 1993.
Exhibit 10.83 Loan Agreement dated as of April 1, 1994, between
Grapevine Industrial Development Corporation
and Trencor, Inc.
Exhibit 10.84 Letter of Credit Agreement, dated April 1,
1994, between The First National Bank of Chicago
and Trencor, Inc.
Exhibit 10.85 Guaranty Agreement, dated April 1, 1994, between
Astec Industries, Inc. and Bank One, Texas, NA, as
Trustee.
Exhibit 10.86 Astec Guaranty, dated April 29, 1994, of debit of Trencor,
Inc. in favor of The First National Bank of Chicago.
Exhibit 10.87 Credit Agreement, dated as of July 20, 1994, between
the Company and The First National Bank of Chicago.
Exhibit 10.88 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Bayerische Vereinsbank, dated as of
January 16, 1995.
Exhibit 10.89 Waiver for December 31, 1994, dated February 24,
1995 with respect to the First National Bank of
Chicago Credit Agreement dated July 29, 1994.
Exhibit 11 Statement Regarding Computation of Per Share Earnings.
Exhibit 22 Subsidiaries of the Registrant.
Exhibit 23 Consent of Independent Auditors.
For a list of certain Exhibits not filed with this Report that are
incorporated by reference into this Report,
see Item 14(a)(3).Tennessee.