Astec Industries (ASTE) 8-K Astec Industries Reports Second Quarter Results

Astec Industries, Inc.

Press Release

  1725 Shepherd Road  | Chattanooga, TN  37421  | Phone (423) 899-5898  | Fax (423) 899-4456

ASTEC INDUSTRIES REPORTS SECOND QUARTER RESULTS

CHATTANOOGA, Tenn. (July 23, 2007) - Astec Industries, Inc. (Nasdaq:  ASTE) today reported results for their second quarter ended June 30, 2007.

Net income for the second quarter of 2007 was $0.83 per diluted share compared to $0.56 per diluted share for the second quarter of 2006 for a 48.2% increase.

Revenues for the second quarter of 2007 were $226.4 million compared with $191.3 million for the second quarter of 2006 for an 18.3% increase.  Domestic sales accounted for $156.6 million during the second quarter of 2007 compared to $137.8 million during the second quarter of 2006.  International sales accounted for $69.8 million of revenues during the second quarter of 2007 compared to $53.5 million during the second quarter of 2006.  The Company reported net income of $18.5 million for the second quarter of 2007 compared to net income of $12.4 million for the second quarter of 2006 for an increase of 49.2%.  The Company’s backlog at June 30, 2007 was $228.9 million compared to $121.7 million at June 30, 2006 for an 88.1% increase.

Consolidated financial statements for the second quarter ended June 30, 2007 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 second quarter gross  margins of 26.0%, S,G,A&E expenses declining to 13.4% of sales and net income increasing 49.2% for the second quarter of 2007.  The initiatives implemented by the Company to increase gross margins resulted in a 120 basis point improvement in the second quarter of 2007 compared to the second quarter of 2006.  We will continue to focus on these initiatives and will monitor inflation closely and take the necessary actions to maintain or improve margins.”

“We believe that our increase in sales reflects a strong economy, an overwhelming need for road improvements resulting in state initiatives to increase funding, market acceptance of new products, improving market share, increasing sales of recycling equipment and strong international sales. The international demand has steadily increased throughout 2007 which should be indicative of strong international sales for the third and fourth quarter of 2007 compared to 2006.”

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on July 23, 2007, at 10:00 A.M. Eastern Time to review its second 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/www/docs/100, 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, July 30, 2007 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 248236.  A transcription of the conference call will be made available under the Investor Relation 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 third and fourth quarters and future generally, the ability to maintain or improve margins, the economy, the need for road improvements, the state initiatives to increase funding, the market’s acceptance of new products, the Company’s improving market share, the increase in sales of recycling equipment and international sales.  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 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, 2006.

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

Secretary / 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)
	June 30, 2007		June 30, 2006
Assets
Current assets					��
Cash and cash equivalents	$	72,166	$	22,015
Receivables, net		81,984		79,474
Inventories		166,663		151,059
Prepaid expenses and other		14,073		11,854
Total current assets		334,886		264,402
Property and equipment, net		121,426		105,183
Other assets		31,527		24,884
Total assets	$	487,839	$	394,469
Liabilities and shareholders' equity
Current liabilities
Accounts payable - trade	$	47,679	$	43,329
Other accrued liabilities		73,129		57,230
Total current liabilities		120,808		100,559
Other non-current liabilities		20,673		15,759
Minority interest in consolidated subsidiary		778		559
Total shareholders' equity		345,580		277,592
Total liabilities and shareholders' equity	$	487,839	$	394,469

Astec Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands)
(Unaudited)
	Three Months Ended				Six Months Ended
	June 30				June 30
	2007		2006		2007		2006
Net sales	$	226,414	$	191,262	$	441,976	$	376,986
Cost of sales		167,471		143,835		328,660		284,407
Gross profit		58,943		47,427		113,316		92,579
Selling, general, administrative & engineering expenses		30,318		27,227		60,848		54,967
Income from operations		28,625		20,200		52,468		37,612
Interest expense		201		417		616		847
Other income, net of expenses		714		136		1,400		401
Income before income taxes and minority interest		29,138		19,919		53,252		37,166
Income taxes		10,584		7,512		19,330		13,859
Minority interest in earnings		49		42		83		45
Net income	$	18,505	$	12,365	$	33,839	$	23,262
Earnings per Common Share
Net income
Basic	$	0.85	$	0.58	$	1.55	$	1.09
Diluted	$	0.83	$	0.56	$	1.52	$	1.06
Weighted average common shares outstanding
Basic		21,879,134		21,424,731		21,762,265		21,314,446
Diluted		22,400,284		22,044,210		22,298,140		21,975,519
Certain amounts for 2006 have been reclassified to conform with the 2007 presentation.

Astec Industries, Inc. and Subsidiaries
Segment Revenues and Profits
For the three months ended June 30, 2007 and 2006
(in thousands)
(Unaudited)
	Asphalt Group			Aggregate and Mining Group			Mobile Asphalt Paving Group			Underground Group			All Others			Total
2007 Revenues		66,638			88,993			40,390			30,393			-			226,414
2006 Revenues		48,218			77,598			37,884			27,562			-			191,262
Change $		18,420			11,395			2,506			2,831			-			35,152
Change %		38.2	%		14.7	%		6.6	%		10.3	%		-			18.4	%
2007 Gross Profit		18,056			22,866			10,721			7,315			(15	)		58,943
2007 Gross Profit %		27.1	%		25.7	%		26.5	%		24.1	%		-			26.0	%
2006 Gross Profit		12,265			19,372			9,406			6,299			85			47,427
2006 Gross Profit %		25.4	%		25.0	%		24.8	%		22.9	%		-			24.8	%
Change		5,791			3,494			1,315			1,016			(100	)		11,516
2007 Profit		11,718			12,330			5,748			2,279			(13,630	)		18,445
2006 Profit		6,491			9,184			5,164			2,137			(10,734	)		12,242
Change $		5,227			3,146			584			142			(2,896	)		6,203
Change %		80.5	%		34.3	%		11.3	%		6.6	%		(27.0	%)		50.7	%
Certain amounts for 2006 have been reclassified to conform with the 2007 presentation.
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 June 30
							2007			2006
Total profit for all segments							$	18,445		$	12,242
Minority interest earnings of subsidiary								(49	)		(42	)
Recapture of intersegment profit								109			165
Consolidated net income							$	18,505		$	12,365

Astec Industries, Inc. and Subsidiaries
Segment Revenues and Profits
For the six months ended June 30, 2007 and 2006
(in thousands)
(Unaudited)
	Asphalt Group			Aggregate and Mining Group			Mobile Asphalt Paving Group			Underground Group			All Others			Total
2007 Revenues		131,647			171,337			84,339			54,653			-			441,976
2006 Revenues		103,950			148,859			74,237			49,940			-			376,986
Change $		27,697			22,478			10,102			4,713			-			64,990
Change %		26.6	%		15.1	%		13.6	%		9.4	%		-			17.2	%
2007 Gross Profit		35,983			43,745			20,902			12,711			(25	)		113,316
2007 Gross Profit %		27.3	%		25.5	%		24.8	%		23.3	%		-			25.6	%
2006 Gross Profit		26,833			36,558			18,664			10,545			(21	)		92,579
2006 Gross Profit %		25.8	%		24.6	%		25.1	%		21.1	%		-			24.6	%
Change		9,150			7,187			2,238			2,166			(4	)		20,737
2007 Profit		23,171			22,705			11,225			3,292			(26,740	)		33,653
2006 Profit		14,783			17,166			10,096			2,438			(21,156	)		23,327
Change $		8,388			5,539			1,129			854			(5,584	)		10,326
Change %		56.7	%		32.3	%		11.2	%		35.0	%		(26.4	%)		44.3	%
Certain amounts for 2006 have been reclassified to conform with the 2007 presention.
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 six months ended June 30
							2007			2006
Total profit for all segments							$	33,653		$	23,327
Minority interest in earnings of subsidiary								(83	)		(45	)
Recapture (elimination) of intersegment profit								269			(20	)
Consolidated net income							$	33,839		$	23,262
Astec Industries, Inc. and Subsidiaries
Backlog by Segment
June 30, 2007 and 2006
(in thousands)
(Unaudited)
	Asphalt Group			Aggregate and Mining Group			Mobile Asphalt Paving Group			Underground Group			All Others			Total
2007 Backlog		101,373			100,892			11,856			14,730			-			228,851
2006 Backlog		40,772			63,926			2,216			14,736			-			121,650
Change $		60,601			36,966			9,640			(6	)		-			107,201
Change %		148.6	%		57.8	%		435.0	%		(0.0	%)		-			88.1	%