EXHIBIT 99.1
ASTEC INDUSTRIES, INC. REPORTS THIRD QUARTER 2004 RESULTS
CHATTANOOGA, Tenn. (October 20, 2004) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for the third quarter ended September 30, 2004.
Net sales for the third quarter of 2004 were $111.7 million compared to $101.1 million for the third quarter of 2003. Domestic sales accounted for 73.2% and international sales 26.8% of the third quarter revenues of 2004 compared to 75.9% for domestic sales and 24.1% for international sales of the third quarter revenues for 2003. The net income for the third quarter of 2004 was $.4 million, or $.04 per diluted share. The net loss for the third quarter of 2003 was $0.8 million or $.04 per share.
Net sales for the nine months ended September 30, 2004 were $393.4 million compared with $319.6 million in the same period in 2003. The net income for the nine months ended September 30, 2004 was $18.8 million, or $0.93 per diluted share, compared to a net loss of $4.8 million, or $0.25 per share for the same period in 2003.
The results from discontinued operations are presented in the income from discontinued operations line and are excluded from all other lines on the statement of operations.
Condensed consolidated financial statements for the third quarter and the first nine months of 2004 and 2003, and additional information related to segment revenues and profits are attached to this press release.
Astec's backlog at September 30, 2004 was $66.7 million compared with $40.8 million at September 30, 2003.
Comments Concerning the Fourth Quarter of 2004: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.
Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "The sales increase of 10.5% in the third quarter over the prior year was less favorable than the first and second quarterly improvements as we continue to operate in an industry which prefers to make large capital expenditure commitments with the positive visibility that a six-year highway bill provides. The sales volume in the third quarter compared to the prior year generated increased manufacturing overhead absorption which positively impacted our gross margin while increased steel costs had an estimated negative impact of 3%-4%. Compared to the third quarter of the prior year, our selling, general, administrative and engineering expenses increased in the areas of health insurance, research and development, recruitment and relocation, and costs associated with Sarbanes-Oxley compliance. The fourth quarter market conditions should benefit from the current opportunity to accelerate depreciatio n which will expire on December 31, 2004 and we expect improved market conditions in 2005. Since the federal highway funding extension thru May 31, 2005 has now been passed, we expect that long-term legislation will be passed next spring which will provide a more positive environment for larger capital expenditures by our customer base. Another positive factor is our open order backlog, which is 64% ahead of last year at this time."
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 20, 2004 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) 938-0653; international participants should dial (973) 935-2408. 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 Saturday, October 23, 2004 by dialing (877) 519-4471 or (973) 341-3080 - Confirmation/Conference ID # 5283600. 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-loo king 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, 2003.
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) |
| | |
| | |
| September 30 | September 30 |
| 2004 | 2003 |
Assets | | |
Current Assets | | |
Cash and cash equivalents | $ 11,562 | $ 12,610 |
Receivables, net | 48,391 | 59,496 |
Inventories | 114,343 | 108,932 |
Prepaid expenses and other | 9,017 | 19,594 |
Total current assets | 183,313 | 200,632 |
Property and equipment, net | 94,989 | 112,969 |
Other assets | 28,046 | 42,038 |
Total assets | $ 306,348 | $ 355,639 |
Liabilities and shareholders' equity | | |
Current liabilities | | |
Revolving credit loan | | $ 39,641 |
Notes payable | $ 656 | 548 |
Current maturities of long-term debt | 3,310 | 5,861 |
Accounts payable - trade | 35,640 | 28,948 |
Other accrued liabilities | 46,486 | 36,869 |
Total current liabilities | 86,092 | 111,867 |
Long-term debt, less current maturities | 26,560 | 41,041 |
Other non-current liabilities | 4,107 | 10,645 |
Minority interest in consolidated subsidiary | 443 | 475 |
Total shareholders' equity | 189,146 | 191,611 |
Total liabilities and shareholders' equity | $ 306,348 | $ 355,639 |
Astec Industries, Inc. and Subsidiaries |
Consolidated Statements of Operations |
(In thousands) |
| | | | |
| Three Months Ended | Nine Months Ended |
| September 30 | September 30 |
| 2004 | 2003 | 2004 | 2003 |
| | | | |
Net sales | $ 111,718 | $ 101,090 | $ 393,383 | $ 319,612 |
Cost of sales | 89,294 | 84,287 | 311,493 | 266,179 |
Gross profit | 22,424 | 16,803 | 81,890 | 53,433 |
Selling, general, administrative & engineering expenses | 20,705 | 16,985 | 60,491 | 54,969 |
Income (loss) from operations | 1,719 | (182) | 21,399 | (1,536) |
Interest expense | 877 | 1,544 | 3,028 | 5,979 |
Other income, net of expense | 303 | (66) | 963 | 992 |
Senior note termination expense | - | - | - | (3,837) |
Income (loss) from continuing operations before income taxes | 1,145 | (1,792) | 19,334 | (10,360) |
Income taxes on continuing operations | 413 | (698) | 7,428 | (4,011) |
Minority interest in earnings | 1 | 7 | 47 | 39 |
Income (loss) from continuing operations | 731 | (1,101) | 11,859 | (6,388) |
Income from discontinued operations | - | 513 | 2,307 | 2,530 |
Income taxes on discontinued operations | - | 197 | 888 | 971 |
Gain on disposal of discontinued operations(net of tax of $4,970) | - | - | 5,507 | - |
Net income (loss) | $ 731 | $ (785) | $ 18,785 | $ (4,829) |
| | | | |
| | | | |
| | | | |
Earnings per Common Share | | | | |
| | | |
Income (loss) from continuing operations: | | | |
Basic | $ 0.04 | $ (0.06) | $ 0.60 | $ (0.32) |
Diluted | $ 0.04 | $ (0.06) | $ 0.59 | $ (0.32) |
| | | | |
Income from discontinued operations: | | | | |
Basic | $ - | $ 0.02 | $ 0.35 | $ 0.08 |
Diluted | $ - | $ 0.02 | $ 0.34 | $ 0.08 |
| | | | |
Net income (loss): | | | | |
Basic | $ 0.04 | $ (0.04) | $ 0.95 | $ (0.25) |
Diluted | $ 0.04 | $ (0.04) | $ 0.93 | $ (0.25) |
| | | | |
Weighted average common shares outstanding | | | |
Basic | 19,763,373 | 19,698,817 | 19,698,731 | 19,687,774 |
Diluted | 20,247,798 | 19,698,817 | 20,121,283 | 19,687,774 |
| | | | |
Astec Industries, Inc. and Subsidiaries |
Segment Revenues and Profits |
For the three months ended September 30, 2004 and 2003 |
(in thousands) |
(Unaudited) |
| Asphalt Group | Aggregate andMining Group | Mobile AsphaltPaving Group | UndergroundGroup | All Others | Total |
2004 Revenues | 26,873 | 47,448 | 18,971 | 18,426 | - | 111,718 |
2003 Revenues | 26,578 | 38,453 | 19,691 | 15,290 | 1,078 | 101,090 |
Change $ | 295 | 8,995 | (720) | 3,136 | (1,078) | 10,628 |
Change % | 1.1% | 23.4% | (3.7%) | 20.5% | (100.0%) | 10.5% |
| | | | | | |
2004 Gross Profit | 4,710 | 10,758 | 3,693 | 3,693 | (430) | 22,424 |
2004 Gross Profit % | 17.5% | 22.7% | 19.5% | 20.0% | - | 20.1% |
2003 Gross Profit | 4,104 | 7,362 | 4,311 | 999 | 27 | 16,803 |
2003 Gross Profit % | 15.4% | 19.1% | 21.9% | 6.5% | 2.5% | 16.6% |
Change | 606 | 3,396 | (618) | 2,694 | (457) | 5,621 |
| | | | | | |
2004 Profit (Loss) | 772 | 2,904 | 370 | 477 | (3,865) | 658 |
2003 Profit (Loss) | 203 | 433 | 1,340 | (1,670) | (1,411) | (1,105) |
Change $ | 569 | 2,471 | (970) | 2,147 | (2,454) | 1,763 |
Change % | 280.3% | 570.7% | (72.4%) | 128.6% | (173.9%) | 159.5% |
| | | | | | |
Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment |
revenues. A reconciliation of total segment profits (losses) to the Company's consolidated net income (loss) is as follows: |
| | | | | | |
| | For the three months ended September 30 | |
| | | 2004 | 2003 | | |
Total profit (loss) for all segments | 658 | (1,105) | | |
Minority interest in earnings of subsidiary | (1) | (7) | | |
Recapture of intersegment profit | 74 | 11 | | |
Consolidated net income (loss) from continuing operations | 731 | (1,101) | | |
Profit from discontinued operations, net of tax | - | 316 | | |
Consolidated net income (loss) | 731 | (785) | | |
| | | | | | |
| | | | | | |
Astec Industries, Inc. and Subsidiaries |
Segment Revenues and Profits |
For the nine months ended September 30, 2004 and 2003 |
(in thousands) |
(Unaudited) |
| Asphalt Group | Aggregate andMining Group | Mobile AsphaltPaving Group | UndergroundGroup | All Others | Total |
2004 Revenues | 114,461 | 154,780 | 69,621 | 54,476 | 45 | 393,383 |
2003 Revenues | 101,633 | 115,454 | 60,950 | 39,730 | 1,845 | 319,612 |
Change $ | 12,828 | 39,326 | 8,671 | 14,746 | (1,800) | 73,771 |
Change % | 12.6% | 34.1% | 14.2% | 37.1% | (97.6%) | 23.1% |
| | | | | | |
2004 Gross Profit | 22,678 | 36,078 | 15,852 | 8,754 | (1,472) | 81,890 |
2004 Gross Profit % | 19.8% | 23.3% | 22.8% | 16.1% | (3271.1%) | 20.8% |
2003 Gross Profit | 14,224 | 23,167 | 13,020 | 2,762 | 260 | 53,433 |
2003 Gross Profit % | 14.0% | 20.1% | 21.4% | 7.0% | 14.1% | 16.7% |
Change | 8,454 | 12,911 | 2,832 | 5,992 | (1,732) | 28,457 |
| | | | | | |
2004 Profit (Loss) | 10,035 | 14,180 | 5,878 | 395 | (18,550) | 11,938 |
2003 Profit (Loss) | 1,775 | 2,295 | 3,474 | (5,820) | (8,559) | (6,835) |
Change $ | 8,260 | 11,885 | 2,404 | 6,215 | (9,991) | 18,773 |
Change % | 465.4% | 517.9% | 69.2% | 106.8% | (116.7%) | 274.7% |
| | | | | | |
Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment |
revenues. A reconciliation of total segment profits (losses) to the Company's consolidated net income (loss) is as follows: |
| | | | | | |
| | For the nine months ended September 30 | |
| | | 2004 | 2003 | | |
Total profit (loss) for all segments | 11,938 | (6,835) | | |
Minority interest in earnings of subsidiary | (47) | (39) | | |
Recapture (elimination) of intersegment profit | (32) | 486 | | |
Consolidated net income (loss) from continuing operations | 11,859 | (6,388) | | |
Profit from discontinued operations, net of tax | 1,419 | 1,559 | | |
Gain on sale of discontinued operations, net of tax | 5,507 | - | | |
Consolidated net income (loss) | 18,785 | (4,829) | | |
