EXHIBIT 99.1
ASTEC INDUSTRIES, INC. REPORTS THIRD QUARTER 2003 RESULTS
CHATTANOOGA, Tenn. (October 21, 2003) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for the third quarter ended September 30, 2003.
Revenues for the third quarter of 2003 were $106.9 million compared with $126.1 million for the third quarter of 2002. Domestic sales accounted for 76.5% and international sales 23.5% of the third quarter revenues of 2003 compared to 85.9% for domestic sales and 14.1% for international sales of the third quarter revenues for 2002. The net loss for the third quarter of 2003 was $0.8 million, or $0.04 per share. The net loss for the third quarter of 2002 was $1.4 million or $0.07 per share.
Revenues for the nine months ended September 30, 2003, were $338.8 million compared with $375.2 million in the same period in 2002. The net loss for the nine months ended September 30, 2003, was $4.8 million, or $0.25 per share, compared to net income of $5.6 million, or $0.28 per fully diluted share for the same period in 2002.
Consolidated financial statements for the third quarter and the first nine months of fiscal year 2003 and additional information related to segment revenues and profits are attached to this press release.
Astec's backlog at September 30, 2003, was $42.1 million compared with $63.4 million at September 30, 2002.
Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "The lack of sales volume experienced in the third quarter, along with pricing pressure and underabsorbed overhead significantly impacted our gross margin. Compared to the third quarter of the prior year, we made progress in reducing our selling, general, administrative and engineering expenses by $3.2 million. Interest expense has been reduced $1.1 million for the third quarter compared to the third quarter of the prior year as a result of reducing our long-term debt. Of the year-to-date pre-tax loss of $7.8 million, $6.3 million is attributable to the refinancing of our debt. The $6.3 million of refinancing expense is composed of the senior note termination expense of $3.8 million (shown on a separate line in the income statement), $2.2 million included in S,G,A,&E expense, and $0.3 million included in the interest expense. We expect the challenging market conditions to persist for the res t of 2003 and into 2004. Based on our information, customers' operating results for the third quarter and the five-month continuation of the Federal Highway funding in addition to the 50% bonus depreciation are generating some positive indications in customers' capital expenditure plans. "
Comments Concerning the Third Quarter of 2003:The following discussion is a compilation of "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control, that could cause actual results to differ materially from those anticipated as of the date of this press release.
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 21, 2003, at 10:00 A.M. Eastern Time to review its third quarter results as well as current business conditions. The number to call for this interactive teleconference is (800) 404-1354; international participants should dial (706) 643-0825. Please reference Astec Industries.
The company will also provide an online Web simulcast and rebroadcast of the conference call. The live broadcast of Astec's conference call will be available online at the Company's website:
www.astecindustries.com/investors/corporate_info/conference_calls/default.htm
An archived webcast will be available for 90 days at www.astecindustries.com.
. A replay of the conference call will be available through midnight on Friday, October 24, 2003 by dialing (800) 642-1687 - Confirmation/Conference ID # 3264502. A transcription of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within 5 days after the call.
Astec Industries, Inc. is a manufacturer of specialized equipment for building and restoring the world's infrastructure. Astec's manufacturing operations are divided into four business segments: aggregate processing and mining equipment; asphalt production equipment; mobile asphalt paving equipment; and underground boring, directional drilling and trenching equipment.
The information contained in this press release contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the future performance of the Company, including statements about the Company's financial performance for the future generally, the amounts of future highway funding, the effects of increased highway funding and changes in the tax laws on the capital expenditures of the Company's customers, and persistent challenging market conditions. These forward-looking statements reflect management's expectations that are based upon currently available information, and the Company undertakes no obligation to update or revise such statements. These statements are not guarantees of performance and are inherently subject to risks and uncertainties, many of which cannot be predicted or anticipated. Future events and actual results, financial or otherwise, could differ materially from those expressed in or implied by the forward-looking statements. Important factors that could cause future events or actual results to differ materially include: general uncertainty in the economy, further downturns in the economy or delays in any upturns in the economy, rising oil and liquid asphalt prices, a failure to comply with covenants in the Company's credit facility, rising interest rates, decreased funding for highway projects, the timing of large contracts, production capacity, general business conditions in the industry, demand for the Company's products, seasonality and cyclicality in operating results, seasonality of sales volumes, competitive activity and those other factors listed from time to time in the Company's reports filed with the Securities and Exchange Commission, including but not limited to the Company's annual report on Form 10-K for the year ended December 31, 2002.
For Additional Information Contact:
J. Don Brock
Chairman of the Board & C.E.O.
Phone: (423) 867-4210
Fax: (423) 867-4127
E-mail: dbrock@astecindustries.com
or
F. McKamy Hall
Vice President and Chief Financial Officer
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: mhall@astecindustries.com
or
Stephen C. Anderson
Director of Investor Relations
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: sanderson@astecindustries.com
Astec Industries, Inc. and Subsidiaries | ||
Consolidated Balance Sheets | ||
(In thousands) | ||
(Unaudited) | ||
September 30 | September 30 | |
2003 | 2002 | |
Assets | ||
Current Assets | ||
Cash and cash equivalents | $ 12,610 | $ 8,927 |
Receivables, net | 59,496 | 73,766 |
Inventories | 108,932 | 128,513 |
Prepaid expenses and other | 19,594 | 15,837 |
Total current assets | 200,632 | 227,043 |
Property and equipment, net | 112,969 | 118,824 |
Other assets | 42,038 | 56,554 |
Total assets | $ 355,639 | $ 402,421 |
Liabilities and shareholders' equity | ||
Current liabilities | ||
Notes payable | $ 548 | $ 2,040 |
Current maturities of long-term debt | 5,861 | 521 |
Accounts payable - trade | 28,948 | 31,532 |
Other accrued liabilities | 36,869 | 42,590 |
Total current liabilities | 72,226 | 76,683 |
Long-term debt, less current maturities | 80,682 | 109,650 |
Other non-current liabilities | 10,645 | 11,715 |
Minority interest in consolidated subsidiary | 475 | 372 |
Total shareholders' equity | 191,611 | 204,001 |
Total liabilities and shareholders' equity | $ 355,639 | $ 402,421 |
Astec Industries, Inc. and Subsidiaries | |||||
Consolidated Statements of Operations | |||||
(In thousands) | |||||
(Unaudited) | |||||
Three Months Ended | Nine Months Ended | ||||
September 30 | September 30 | ||||
2003 | 2002 | 2003 | 2002 | ||
Net sales | $106,870 | $126,100 | $338,837 | $375,211 | |
Cost of sales | 88,557 | 105,338 | 279,990 | 299,948 | |
Gross profit | 18,313 | 20,762 | 58,847 | 75,263 | |
Selling, general, administrative & engineering expenses | 17,985 | 21,145 | 57,883 | 61,080 | |
Income from operations | 328 | (383) | 964 | 14,183 | |
Interest expense | 1,545 | 2,672 | 5,983 | 7,834 | |
Other income, net of expense | (61) | 932 | 1,026 | 2,059 | |
Senior note termination expense | - | - | (3,837) | - | |
Income (loss) before income taxes | (1,278) | (2,123) | (7,830) | 8,408 | |
Income taxes | (500) | (706) | (3,040) | 2,745 | |
Minority interest in earnings | 7 | 21 | 39 | 59 | |
Net income (loss) | $(785) | $(1,438) | $(4,829) | $5,604 | |
Earnings per Common Share | |||||
Net income (loss): | |||||
Basic | $(0.04) | $(0.07) | $(0.25) | $0.29 | |
Diluted | $(0.04) | $(0.07) | $(0.25) | $0.28 | |
Weighted average common shares outstanding | |||||
Basic | 19,698,817 | 19,676,205 | 19,687,774 | 19,651,619 | |
Diluted | 19,698,817 | 19,676,205 | 19,687,774 | 19,951,912 | |
Astec Industries, Inc. and Subsidiaries | ||||||
Segment Revenues and Profits | ||||||
For the three months ended September 30, 2003 and 2002 | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
Asphalt Group | Aggregate and Mining Group | Mobile Asphalt Paving Group | Underground Group | All Others | Total | |
2003 Revenues | 26,578 | 44,232 | 19,691 | 15,290 | 1,079 | 106,870 |
2002 Revenues | 40,776 | 52,349 | 23,768 | 8,052 | 1,155 | 126,100 |
Change $ | (14,198) | (8,117) | (4,077) | 7,238 | (76) | (19,230) |
Change % | (34.8%) | (15.5%) | (17.2%) | 89.9% | (6.6%) | (15.2%) |
2003 Gross Profit | 4,104 | 8,872 | 4,311 | 999 | 27 | 18,313 |
2003 Gross Profit % | 15.4% | 20.1% | 21.9% | 6.5% | 2.5% | 17.1% |
2002 Gross Profit | 5,909 | 9,717 | 4,380 | 394 | 362 | 20,762 |
2002 Gross Profit % | 14.5% | 18.6% | 18.4% | 4.9% | 31.3% | 16.5% |
Change | (1,805) | (845) | (69) | 605 | (335) | (2,449) |
2003 Profit (Loss) | 203 | 932 | 1,340 | (1,670) | (1,596) | (791) |
2002 Profit (Loss) | 320 | 1,566 | 1,073 | (2,354) | (2,609) | (2,004) |
Change $ | (117) | (634) | 267 | 684 | 1,013 | 1,213 |
Change % | (36.6%) | (40.5%) | 24.9% | 29.1% | 38.8% | (60.5%) |
Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment | ||||||
revenues. A reconciliation of total segment profits to the Company's consolidated net income is as follows: | ||||||
For the three months ended September 30, | ||||||
2003 | 2002 | |||||
Total (loss) for all segments | (791) | (2,004) | ||||
Minority interest in earnings of subsidiary | (7) | (21) | ||||
Recapture of intersegment profit | 13 | 587 | ||||
Consolidated net income (loss) | (785) | (1,438) | ||||
Astec Industries, Inc. and Subsidiaries | ||||||
Segment Revenues and Profits | ||||||
For the nine months ended September 30, 2003 and 2002 | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
Asphalt Group | Aggregate and Mining Group | Mobile Asphalt Paving Group | Underground Group | All Others | Total | |
2003 Revenues | 101,633 | 134,678 | 60,950 | 39,730 | 1,846 | 338,837 |
2002 Revenues | 135,544 | 148,942 | 57,628 | 30,087 | 3,010 | 375,211 |
Change $ | (33,911) | (14,264) | 3,322 | 9,643 | (1,164) | (36,374) |
Change % | (25.0%) | (9.6%) | 5.8% | 32.1% | (38.7%) | (9.7%) |
2003 Gross Profit | 14,224 | 28,581 | 13,020 | 2,762 | 260 | 58,847 |
2003 Gross Profit % | 14.0% | 21.2% | 21.4% | 7.0% | 14.1% | 17.4% |
2002 Gross Profit | 22,033 | 32,814 | 14,884 | 4,717 | 815 | 75,263 |
2002 Gross Profit % | 16.3% | 22.0% | 25.8% | 15.7% | 27.1% | 20.1% |
Change | (7,809) | (4,233) | (1,864) | (1,955) | (555) | (16,416) |
2003 Profit (Loss) | 1,775 | 4,734 | 3,474 | (5,819) | (9,468) | (5,304) |
2002 Profit (Loss) | 7,835 | 7,809 | 5,338 | (2,622) | (12,095) | 6,265 |
Change $ | (6,060) | (3,075) | (1,864) | (3,197) | 2,627 | (11,569) |
Change % | (77.3%) | (39.4%) | (34.9%) | (121.9%) | 21.7% | (184.7%) |
Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment | ||||||
revenues. A reconciliation of total segment profits to the Company's consolidated net income is as follows: | ||||||
For the nine months ended September 30, | ||||||
2003 | 2002 | |||||
Total profit (loss) for all segments | (5,304) | 6,265 | ||||
Minority interest in earnings of subsidiary | (39) | (59) | ||||
Recapture (elimination) of intersegment profit | 514 | (602) | ||||
Consolidated net income (loss) | (4,829) | 5,604 | ||||