ASTEC INDUSTRIES REPORTS FIRST QUARTER RESULTS
CHATTANOOGA, Tenn. (April 24, 2006) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for their first quarter ended March 31, 2006.
Net income for the first quarter of 2006 was $.50 per diluted share compared to $.33 per diluted share in 2005 for a 51.5% increase. A key factor in the increase was an improvement of 260 basis points in gross profit margin.
Revenues for the first quarter of 2006 were $185.7 million compared with $161.6million for the first quarter of 2005 for a 14.9% increase. Domestic sales accounted for 81.3% and international sales for 18.7% of revenues during the first quarter of 2006 compared to 82.4% for domestic sales and 17.6% for international sales during the first quarter of 2005. The Company reported net income of $10.9 million for the first quarter of 2006 compared to net income of $6.8 million for the first quarter of 2005 for an increase of 60.4%. The Company's backlog at March 31, 2006 was $144.5 million compared to $111.2 million at March 31, 2005 for a 30% increase.
Consolidated financial statements for the first quarter ended March 31, 2006 and additional information related to segment revenues and profits are attached as addenda to this press release.
Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "We are pleased with the increased volumes, improved margins and the net income for the first quarter of 2006. The Company had implemented initiatives striving to increase gross margins in 2005. We are beginning to see the effects of this effort. The gross margin percentage improved in the first quarter of 2006 to 24.3% up from 21.7% in the first quarter of 2005 for an increase of 260 basis points. We will continue to focus on these initiatives and will monitor inflation closely and take the necessary actions to stabilize or increase margins."
"The Company believes that its increase in volume is reflective of an improving economy, contribution of new products, and some improvement in market share. With energy and material costs increasing, both new products and recycle equipment are getting attention. We finished the first quarter with a backlog 30% ahead of the prior year."
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on April 24, 2006, at 10:00 A.M. Eastern Time to review its first quarter results as well as current business conditions. The number to call for this interactive teleconference is (877) 407-9210. International callers should dial (201) 689-8049. Please reference Astec Industries.
The company will also provide an online Web simulcast and rebroadcast of the conference call. The live broadcast of Astec's conference call will be available online at the Company's website: www.astecindustries.com/investors, Conference Calls Section. 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, May 1, 2006 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 199727. 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 second quarter and future generally, the ability to stabilize or increase margins, the improving economy, the contribution of new products, and the Company's improvement in market share. 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, cyclical nature of the commercial, construction industry and the customization of the equipment the Company sells, 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, managing and expanding in international markets, the timing of large contracts, production capacity, general business conditions in the industry, demand for the Company's products, 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, 2005.
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) | ||
March 31, 2006 | March 31, 2005 | |
Assets | ||
Current Assets | ||
Cash and cash equivalents | $ 20,856 | $ 9,426 |
Receivables, net | 78,025 | 65,227 |
Inventories | 148,167 | 130,059 |
Prepaid expenses and other | 13,215 | 16,452 |
Total current assets | 260,263 | 221,164 |
Property and equipment, net | 99,453 | 97,985 |
Other assets | 24,647 | 29,708 |
Total assets | $ 384,363 | $ 348,857 |
Liabilities and shareholders' equity | ||
Current liabilities | ||
Revolving credit loan | $ - | $ 15,393 |
Current maturities of long-term debt | - | 3,310 |
Accounts payable - trade | 46,181 | 43,551 |
Other accrued liabilities | 61,978 | 51,388 |
Total current liabilities | 108,159 | 113,642 |
Long-term debt, less current maturities | - | 24,655 |
Other non-current liabilities | 15,636 | 11,282 |
Minority interest in consolidated subsidiary | 606 | 530 |
Total shareholders' equity | 259,962 | 198,748 |
Total liabilities and shareholders' equity | $ 384,363 | $ 348,857 |
Astec Industries, Inc. and Subsidiaries | ||
Consolidated Statements of Income | ||
(In thousands) | ||
(Unaudited) | ||
Three Months Ended March 31 | ||
2006 | 2005 | |
Net sales | $ 185,724 | $ 161,635 |
Cost of sales | 140,584 | 126,602 |
Gross profit | 45,140 | 35,033 |
Selling, general, administrative & engineering expenses | 27,759 | 22,971 |
Income from operations | 17,381 | 12,062 |
Interest expense | 430 | 1,180 |
Other income, net of expense | 296 | 38 |
Income before income taxes and minority interest | 17,247 | 10,920 |
Income taxes | 6,347 | 4,106 |
Minority interest in earnings | 3 | 22 |
Net income | $ 10,897 | $ 6,792 |
Earnings per Common Share | ||
Net income: | ||
Basic | $ 0.51 | $ 0.34 |
Diluted | $ 0.50 | $ 0.33 |
Weighted average common shares outstanding | ||
Basic | 21,194,708 | 19,899,819 |
Diluted | 21,897,073 | 20,415,669 |
Astec Industries, Inc. and Subsidiaries | ||||||
Segment Revenues and Profits | ||||||
For the three months ended March 31, 2006 and 2005 | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
Asphalt Group | Aggregate and Mining Group | Mobile Asphalt Paving Group | Underground Group | All Others | Total | |
2006 Revenues | 55,732 | 71,262 | 36,353 | 22,377 | - | 185,724 |
2005 Revenues | 53,535 | 57,845 | 28,807 | 21,448 | - | 161,635 |
Change $ | 2,197 | 13,417 | 7,546 | 929 | - | 24,089 |
Change % | 4.1% | 23.2% | 26.2% | 4.3% | - | 14.9% |
2006 Gross Profit | 14,562 | 17,210 | 9,253 | 4,220 | (106) | 45,139 |
2006 Gross Profit % | 26.1% | 24.2% | 25.5% | 18.9% | - | 24.3% |
2005 Gross Profit | 10,657 | 13,601 | 7,015 | 3,774 | (14) | 35,033 |
2005 Gross Profit % | 19.9% | 23.5% | 24.4% | 17.6% | - | 21.7% |
Change | 3,905 | 3,609 | 2,238 | 446 | (92) | 10,106 |
2006 Profit (Loss) | 8,293 | 7,982 | 4,932 | 302 | (10,424) | 11,085 |
2005 Profit (Loss) | 5,656 | 5,184 | 3,430 | 157 | (7,549) | 6,878 |
Change $ | 2,637 | 2,798 | 1,502 | 145 | (2,875) | 4,207 |
Change % | 46.6% | 54.0% | 43.8% | 92.4% | (38.1%) | 61.2% |
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 March 31 | |||||
2006 | 2005 | ||||
Total profit for all segments | $ 11,085 | $ 6,878 | |||
Minority interest in earnings of subsidiary | (3) | (22) | |||
Elimination of intersegment profit | (185) | (64) | |||
Consolidated net income | $ 10,897 | $ 6,792 | |||
Astec Industries, Inc. and Subsidiaries | ||||||
Backlog by Segment | ||||||
March 31, 2006 and 2005 | ||||||
(in thousands) | ||||||
(Unaudited) | ||||||
Asphalt Group | Aggregate and Mining Group | Mobile Asphalt Paving Group | Underground Group | All Others | Total | |
2006 Backlog | 44,744 | 77,829 | 5,713 | 16,195 | - | 144,481 |
2005 Backlog | 37,803 | 55,954 | 10,075 | 7,339 | - | 111,171 |
Change $ | 6,941 | 21,875 | (4,362) | 8,856 | - | 33,310 |
Change % | 18.4% | 39.1% | (43.3%) | 120.7% | - | 30.0% |