ASTEC INDUSTRIES, INC. REPORTS THIRD QUARTER 2005 RESULTS
CHATTANOOGA, Tenn. (October 24, 2005) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for the third quarter ended September 30, 2005.
Net sales for the third quarter of 2005 were $149.1 million compared with $111.7 million for the third quarter of 2004. Domestic sales accounted for 80.5% and international sales 19.5% of the third quarter revenues of 2005 compared to 73.2% for domestic sales and 26.8% for international sales of the third quarter revenues for 2004. Net income for the third quarter of 2005 was $10.1 million, or $0.47 per diluted share. Net income for the third quarter of 2004 was $0.7 million, or $0.04 per diluted share.
The third quarter of 2005 included an after tax gain on the sale of the Grapevine, Texas property of $4.7 million, an after tax real estate impairment charge of $0.7 million and after tax costs of $0.3 million related to the payoff of the term loan. The gain on sale of real estate, net of real estate impairment charges, is presented as a separate line on the income statement attached to this press release and the costs related to the loan payoff are included in interest expense set forth therein. Excluding these items, net income for the third quarter of 2005 was $6.4 million, or $0.30 per diluted share, compared to net income for the third quarter of 2004 of $0.7 million, or $0.04 per diluted share for a $0.26 per share increase. This is presented in the attached reconciliation.
Net sales for the nine months ended September 30, 2005 were $481.6 million compared with $393.4 million in the same period in 2004. Net income for the nine months ended September 30, 2005 was $27.1 million, or $1.30 per diluted share, compared to net income of $18.8 million, or $0.93 per diluted share for the same period in 2004. For the nine months ended September 30, 2005, excluding the gain on the sale of the Grapevine, Texas property offset by the after tax real estate impairment charge and costs related to the payoff of the term loan discussed above, net income from continuing operations was $23.4 million, or $1.12 per diluted share, compared to $11.9 million, or $0.59 income per diluted share for the same period in 2004.
The 2004 financial statements include the results from discontinued operations related to the sale of Superior Industries which are presented in the income from discontinued operations line and are excluded from all other lines on the 2004 statement of operations attached to this press release.
Condensed consolidated financial statements for the third quarter and the first nine months of 2005 and 2004, and additional information related to segment revenues and profits are attached to this press release.
Astec's backlog at September 30, 2005, was $72.2 million compared with $66.7 million at September 30, 2004.
Comments Concerning the Fourth Quarter of 2005: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, "We are pleased with the third quarter 2005 net sales increase of 33.5% compared to the third quarter 2004 net sales even though we were unable to recognize the revenue related to the sale and shipment of two completed asphalt plants because the customers experienced last-minute permitting delays. Sales of utility trenchers continued in the third quarter to be negatively impacted by the high dealer inventory levels that existed when we transitioned from Case distribution of small trenchers to Astec distribution of small trenchers on September 30, 2004. We are pleased that the sale of the Grapevine, Texas property was completed in the third quarter.
The term debt was paid in full and the only remaining debt is in the form of Industrial Revenue Bonds which will be paid in full in the fourth quarter.
Although the fourth quarter is normally our seasonally slowest quarter, we are pleased with the current condition of our balance sheet and we believe the full effects of the new highway bill ("SAFETEALU") will be felt in 2006. With the industrial bonds being paid in full in the fourth quarter, we should be poised to take advantage of available opportunities."
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 24, 2005 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 (877) 407-9210; international participants should dial (201) 689-8049. Please reference Astec Industries.
The company will also provide an online Web simulcast and rebroadcast of the conference call. The live broadcast of Astec's conference call will be available online at the Company's website: www.astecindustries.com/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 Monday, October 31, 2005, by dialing (877) 660-6853 or (201) 612-7415 for international participants - Confirmation/Conference ID # 171653. 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 fourth quarter and the future generally, the payment in full of the Industrial Revenue Bonds and the impact thereof and the effects of SAFETEALU. These forward-looking statements reflect management's expectations and are based upon currently available information, and the Company undertakes no obligation to update or revise such statements. These statements are not guarantees of performance and are inherently subject to risks and uncertainties, many of which cannot be predicted or anticipated. Future events and actual results, financial or otherwise, could differ materially from those expressed in or implied by the forward-looking statements. Important factors that could cause future events or actual results to differ materially include: general uncertainty in the economy, downturns in the general economy or the commercial construction industry, increases in the price of oil or decreases in the availability of oil, increases in the price of raw materials, a failure to comply with covenants in the Company's amended credit agreement, contingent liability for certain customer debt, rising interest rates, rising steel and steel component pricing, delayed or decreased funding for highway construction and maintenance, 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, 2004.
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 |
| 2005 | 2004 |
Assets | | |
Current Assets | | |
Cash and cash equivalents | $ 21,215 | $ 9,967 |
Receivables, net | 60,334 | 48,391 |
Inventories | 129,867 | 114,343 |
Prepaid expenses and other | 13,393 | 9,017 |
Total current assets | 224,809 | 181,718 |
Property and equipment, net | 96,514 | 94,989 |
Other assets | 24,239 | 28,046 |
Total assets | $ 345,562 | $ 304,753 |
| | |
Liabilities and shareholders' equity | | |
Current liabilities | | |
Notes payable | $ - | $ 656 |
Current maturities of long-term debt | 9,700 | 3,310 |
Accounts payable - trade | 36,358 | 34,045 |
Other accrued liabilities | 47,544 | 43,757 |
Total current liabilities | 93,602 | 81,768 |
Long-term debt, less current maturities | - | 26,560 |
Other non-current liabilities | 15,228 | 6,836 |
Minority interest in consolidated subsidiary | 574 | 443 |
Total shareholders' equity | 236,158 | 189,146 |
Total liabilities and shareholders' equity |
$ 345,562
|
$ 304,753
|
| | |
Certain amounts for 2004 have been reclassified to conform with the
2005 presentation. |
| | | | |
| | | | |
Astec Industries, Inc. and Subsidiaries | | | |
Consolidated Statements of Operations | | | |
(In thousands) | | | | |
(unaudited) | | | | |
| | | | |
| Three Months Ended | Nine Months Ended |
| September 30 | September 30 |
| 2005 | 2004 | 2005 | 2004 |
Net sales | $ 149,103 | $ 111,718 | $481,551 | $ 393,383 |
Cost of sales | 115,911 | 89,047 | 374,034 | 310,696 |
Gross profit | 33,192 | 22,671 | 107,517 | 82,687 |
Selling, general, administrative and engineering expenses |
23,400
|
20,473
|
69,020
|
59,704
|
Gain on sale of real estate, net of real estate impairment charge |
6,531
|
-
|
6,531
|
-
|
Income from operations | 16,323 | 2,198 | 45,028 | 22,983 |
Interest expense | 1,353 | 1,156 | 3,518 | 3,891 |
Other income, net | 56 | 103 | 191 | 242 |
Income from continuing operations before income taxes |
15,026
|
1,145
|
41,701
|
19,334
|
Income taxes on continuing operations | 4,938 | 413 | 14,541 | 7,428 |
Minority interest in earnings | 29 | 1 | 88 | 47 |
Income from continuing operations | 10,059 | 731 | 27,072 | 11,859 |
Income from discontinued operations | - | - | - | 2,307 |
Income taxes on discontinued operations | - | - | - | (888) |
Gain on disposal of discontinued operations (net of tax of $4,970) |
-
|
-
|
-
|
5,507
|
Net income | $ 10,059 | $ 731 | $ 27,072 | $ 18,785 |
| | | | |
| | | | |
Earnings per Common Share | | | | |
Income from continuing operations: | | | | |
Basic | $ 0.49 | $ 0.04 | $ 1.34 | $ 0.60 |
Diluted | $ 0.47 | $ 0.04 | $ 1.30 | $ 0.59 |
| | | | |
Income from discontinued operations: | | | |
Basic | $ - | $ - | $ - | $ 0.35 |
Diluted | $ - | $ - | $ - | $ 0.34 |
| | | | |
Net income: | | | | |
Basic | $ 0.49 | $ 0.04 | $ 1.34 | $ 0.95 |
Diluted | $ 0.47 | $ 0.04 | $ 1.30 | $ 0.93 |
| | | | |
Weighted average common shares outstanding | | |
Basic | 20,523,622 | 19,763,373 | 20,146,240 | 19,698,731 |
Diluted | 21,239,420 | 20,247,798 | 20,799,050 | 20,121,283 |
| | | | |
Certain amounts for 2004 have been reclassified to conform with the 2005 presentation. |
| | | | |
Astec Industries, Inc. and Subsidiaries |
Segment Revenues and Profits |
For the three months ended September 30, 2005 and 2004 |
(dollars in thousands) |
(Unaudited) |
|
Asphalt Group
| Aggregate
and
Mining Group | Mobile Asphalt Paving Group |
Underground Group
|
All Others
|
Total
|
2005 Revenues | $ 34,962 | $ 63,262 | $ 27,964 | $ 22,915 | $ - | $ 149,103 |
2004 Revenues | $ 26,873 | $ 47,448 | $ 18,971 | $ 18,426 | $ - | $ 111,718 |
Change $ | $ 8,089 | $ 15,814 | $ 8,993 | $ 4,489 | $ - | $ 37,385 |
Change % | 30.1% | 33.3% | 47.4% | 24.4% | - | 33.5% |
| | | | | | |
2005 Gross Profit | $ 7,749 | $ 15,278 | $ 6,380 | $ 3,809 | $ (24) | $ 33,192 |
2005 Gross Profit % | 22.2% | 24.2% | 22.8% | 16.6% | 0.0% | 22.3% |
2004 Gross Profit | $ 4,718 | $ 10,796 | $ 3,697 | $ 3,695 | $ (235) | $ 22,671 |
2004 Gross Profit % | 17.6% | 22.8% | 19.5% | 20.1% | - | 20.3% |
Change | $ 3,031 | $ 4,482 | $ 2,683 | $ 114 | $ 211 | $ 10,521 |
| | | | | | |
2005 Profit (Loss) | $ 2,223 | $ 6,361 | $ 3,235 | $ 7,538 | $(9,303) | $10,054 |
2004 Profit (Loss) | $ 772 | $ 2,898 | $ 370 | $ 477 | $(3,859) | $ 658 |
Change $ | $ 1,451 | $ 3,463 | $ 2,865 | $ 7,061 | $(5,444) | $ 9,396 |
Change % | 188.0% | 119.5% | 774.3% | 1480.3% | (141.1%) | 1428.0% |
| | | | | | |
The gain on the sale of the Grapevine facility is included in the Underground Group. The real estate impairment charge is included in the Asphalt Group. The charge off of prepaid loan fees is included in the "All Others" segment. |
| | | | | | |
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 is as follows: |
| | | | | | |
| | For the three months ended September 30 | |
| | | 2005 | 2004 | | |
Total profit for all segments | $ 10,054 | $ 658 | | |
Minority interest earnings of subsidiary | (29) | (1) | | |
Recapture of intersegment profit | 34 | 74 | | |
Consolidated net income | $ 10,059 | $ 731 | | |
Astec Industries, Inc. and Subsidiaries |
Segment Revenues and Profits |
For the nine months ended September 30, 2005 and 2004 |
(dollars in thousands) |
(Unaudited) |
|
Asphalt Group
| Aggregate
and Mining Group* | Mobile Asphalt Paving Group |
Underground Group
|
All Others
|
Total
|
2005 Revenues | $136,286 | $186,277 | $91,384 | $67,604 | $ - | $481,551 |
2004 Revenues | $114,461 | $154,780 | $69,621 | $54,476 | $ 45 | $393,383 |
Change $ | $21,825 | $31,497 | $21,763 | $13,128 | $ (45) | $ 88,168 |
Change % | 19.1% | 20.3% | 31.3% | 24.1% | (100.0%) | 22.4% |
| | | | | | |
2005 Gross Profit | $ 29,592 | $ 44,952 | $21,062 | $11,974 | $ (63) | $107,517 |
2005 Gross Profit % | 21.7% | 24.1% | 23.0% | 17.7% | 0.0% | 22.3% |
2004 Gross Profit | $ 22,727 | $ 36,116 | $15,856 | $ 8,747 | $ (759) | $ 82,687 |
2004 Gross Profit % | 19.9% | 23.3% | 22.8% | 16.1% | (1686.7%) | 21.0% |
Change | $ 6,865 | $ 8,836 | $5,206 | $ 3,227 | $ 696 | $ 24,830 |
| | | | | | |
2005 Profit (Loss) | $ 14,262 | $ 19,046 | $10,328 | $ 8,442 | $(24,940) | $ 27,138 |
2004 Profit (Loss) | $ 10,035 | $ 14,137 | $ 5,878 | $ 395 | $(18,507) | $ 11,938 |
Change $ | $ 4,227 | $ 4,909 | $ 4,450 | $ 8,047 | $ (6,433) | $ 15,200 |
Change % | 42.1% | 34.7% | 75.7% | 2037.2% | (34.8%) | 127.3% |
| | | | | | |
* The segment data for 2004 has been adjusted to reflect the sale of Superior Industries of Morris, Inc. |
| | | | | | |
The gain on the sale of the Grapevine facility is included in the Underground Group. The real estate impairment charge is included in the Asphalt Group. The chargeoff of prepaid loan fees is included in the "All Others" segment. |
| | | | | | |
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 is as follows: |
| | | | | | |
| | For the nine months ended September 30 | |
| | | 2005 | 2004 | | |
Total profit for all segments | $ 27,138 | $ 11,938 | | |
Minority interest in earnings of subsidiary | (88) | (47) | | |
Recapture (elimination) of intersegment profit | 22 | (32) | | |
Consolidated income from continuing operations | 27,072 | 11,859 | | |
Income from discontinued operations, net of tax | - | 1,419 | | |
Gain on sale of discontinued operations, net of tax | - | 5,507 | | |
Consolidated net income | $ 27,072 | $ 18,785 | | |
Astec Industries, Inc. and Subsidiaries |
Backlog by Segment |
September 30, 2005 and 2004 |
(dollars in thousands) |
(Unaudited) |
|
Asphalt Group
|
Aggregate and Mining Group
| Mobile Asphalt Paving Group |
Underground Group
|
All Others
|
Total
|
2005 Backlog | $ 25,108 | $ 40,621 | $ 1,748 | $ 4,756 | $ - | $ 72,233 |
2004 Backlog | $ 27,319 | $ 29,653 | $ 2,728 | $ 7,062 | $ - | $ 66,762 |
Change $ | $ (2,211) | $ 10,968 | $ (980) | $ (2,306) | $ - | $ 5,471 |
Change % | (8.1%) | 37.0% | (35.9%) | (32.7%) | $ - | 8.2% |
Astec Industries, Inc. and Subsidiaries | | |
Reconciliation of Net Income to Net Income Before Unusual Items | |
(In thousands) | | |
(unaudited) | | |
| | |
| Three Months Ended | Nine Months Ended |
| September 30 | September 30 |
| 2005 | 2005 |
Net income | $ 10,059 | $ 27,072 |
Unusual Items net of tax at the statutory rate of 38.6%: | | |
Gain on sale of Grapevine facility | 4,736 | 4,736 |
Real estate impairment charge | (726) | (726) |
Chargeoff of prepaid loan fees | (319) | (319) |
Net income from unusual items | 3,691 | 3,691 |
Net income before unusual items | $ 6,368 | $ 23,381 |
| | |
Earnings per Common Share | | |
Net income: | | |
Basic | $ 0.49 | $ 1.34 |
Diluted | $ 0.47 | $ 1.30 |
| | |
Net income from unusual items: | | |
Basic | $ 0.18 | $ 0.18 |
Diluted | $ 0.17 | $ 0.18 |
| | |
Net income before unusual items: | | |
Basic | $ 0.31 | $ 1.16 |
Diluted | $ 0.30 | $ 1.12 |
| | |
Weighted average common shares outstanding | | |
Basic | 20,523,622 | 20,146,240 |
Diluted | 21,239,420 | 20,799,050 |
| | |
