Astec Industries, Inc.
News Release
1725 Shepherd Road | Chattanooga, TN 37421 | Phone (423) 899-5898 | Fax (423) 899-4456
ASTEC INDUSTRIES REPORTS FIRST QUARTER RESULTS
CHATTANOOGA, Tenn. (April 22, 2008) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for their first quarter ended March 31, 2008.
Net income for the first quarter of 2008 was $0.78 per diluted share compared to $0.69 per diluted share for the first quarter of 2007 for a 13.0% increase.
Revenues for the first quarter of 2008 were $263.1 million compared with $215.6 million for the first quarter of 2007 for a 22.0% increase. Domestic sales accounted for 64.8% and international sales for 35.2% of revenues during the first quarter of 2008 compared to 77.2% for domestic sales and 22.8% for international sales during the first quarter of 2007. The Company reported net income of $17.5 million for the first quarter of 2008 compared to net income of $15.3 million for the first quarter of 2007 for an increase of 14.4%. The Company’s backlog at March 31, 2008 was $263.0 million compared to $266.2 million at March 31, 2007 for a 1.2% decrease.
Consolidated financial statements for the first quarter ended March 31, 2008 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 earnings for the first quarter of 2008. International sales increased 88.4% reflecting continuing strength in certain foreign markets and the success of our efforts to strengthen our position in those markets. Domestic sales increased 2.5%. Going forward, our primary focus will be to maintain or improve margins in this inflationary environment.”
Dr. Brock continued, “The backlog is down $3.2 million compared to March 2007, but this decrease is partially attributable to increased net sales of $47.5 million for the quarter. Our manufacturing capabilities have increased during the last year and we are better positioned to handle additional orders. ConExpo significantly impacted our expenses this quarter, but ConExpo was a very successful show with great interest and order activity. There were 144,000 attendees of whom 28,000 were foreign visitors from 130 different countries. Increased asphalt recycling continues to be an industry trend as the price of oil increases. We offer the most complete line of equipment to remove, process and recycle old pavement significantly reducing our customers’ cost.”
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on April 22, 2008, 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/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 Tuesday, April 29, 2008 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 282066. 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. We also have a company engaged in the wood grinding and processing industry.
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 upcoming quarters and future generally, the ability to maintain or improve margins, the strength of and growth in foreign markets, the ability to deliver backlog and additional orders, and, the increase in asphalt recycling and in sales of recycling equipment. 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, 2007.
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 & Corporate Secretary
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, | March 31, | |||||||
| 2008 | 2007 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 29,154 | $ | 57,120 | ||||
| Receivables, net | 115,197 | 86,226 | ||||||
| Inventories | 219,028 | 164,725 | ||||||
| Prepaid expenses and other | 16,621 | 14,188 | ||||||
| Total current assets | 380,000 | 322,259 | ||||||
| Property and equipment, net | 142,817 | 117,720 | ||||||
| Other assets | 52,969 | 25,182 | ||||||
| Total assets | $ | 575,786 | $ | 465,161 | ||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable - trade | $ | 62,807 | $ | 52,837 | ||||
| Other accrued liabilities | 96,261 | 74,679 | ||||||
| Total current liabilities | 159,068 | 127,516 | ||||||
| Other non-current liabilities | 21,966 | 20,160 | ||||||
| Minority interest in consolidated subsidiary | 803 | 704 | ||||||
| Total shareholders' equity | 393,949 | 316,781 | ||||||
| Total liabilities and shareholders' equity | $ | 575,786 | $ | 465,161 | ||||
| Astec Industries, Inc. and Subsidiaries | ||||||||
| Consolidated Statements of Operations | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
| Net sales | $ | 263,072 | $ | 215,563 | ||||
| Cost of sales | 196,852 | 161,190 | ||||||
| Gross profit | 66,220 | 54,373 | ||||||
| Selling, general, administrative & engineering expenses | 38,779 | 30,529 | ||||||
| Income from operations | 27,441 | 23,844 | ||||||
| Interest expense | 131 | 415 | ||||||
| Other income, net of expenses | 426 | 685 | ||||||
| Income before income taxes and minority interest | 27,736 | 24,114 | ||||||
| Income taxes | 10,160 | 8,746 | ||||||
| Minority interest in earnings | 57 | 34 | ||||||
| Net income | $ | 17,519 | $ | 15,334 | ||||
| Earnings per Common Share | ||||||||
| Net income | ||||||||
| Basic | $ | 0.79 | $ | 0.71 | ||||
| Diluted | $ | 0.78 | $ | 0.69 | ||||
| Weighted average common shares outstanding | ||||||||
| Basic | 22,237,100 | 21,644,097 | ||||||
| Diluted | 22,550,536 | 22,194,736 | ||||||
| Astec Industries, Inc. and Subsidiaries | ||||||||||||||||||||||||
| Segment Revenues and Profits | ||||||||||||||||||||||||
| For the three months ended March 31, 2008 and 2007 | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Asphalt Group | Aggregate and Mining Group | Mobile Asphalt Paving Group | Underground Group | All Others | Total | |||||||||||||||||||
| 2008 Revenues | 71,585 | 91,090 | 47,131 | 32,643 | 20,623 | 263,072 | ||||||||||||||||||
| 2007 Revenues | 65,010 | 82,343 | 43,950 | 24,260 | - | 215,563 | ||||||||||||||||||
| Change $ | 6,575 | 8,747 | 3,181 | 8,383 | 20,623 | 47,509 | ||||||||||||||||||
| Change % | 10.1 | % | 10.6 | % | 7.2 | % | 34.6 | % | - | 22.0 | % | |||||||||||||
| 2008 Gross Profit | 19,606 | 23,157 | 12,592 | 7,103 | 3,762 | 66,220 | ||||||||||||||||||
| 2008 Gross Profit % | 27.4 | % | 25.4 | % | 26.7 | % | 21.8 | % | 18.2 | % | 25.2 | % | ||||||||||||
| 2007 Gross Profit (Loss) | 17,927 | 20,879 | 10,182 | 5,395 | (10 | ) | 54,373 | |||||||||||||||||
| 2007 Gross Profit % | 27.6 | % | 25.4 | % | 23.2 | % | 22.2 | % | - | 25.2 | % | |||||||||||||
| Change | 1,679 | 2,278 | 2,410 | 1,708 | 3,772 | 11,847 | ||||||||||||||||||
| 2008 Profit (Loss) | 11,845 | 10,259 | 6,528 | 1,845 | (12,725 | ) | 17,752 | |||||||||||||||||
| 2007 Profit (Loss) | 11,453 | 10,375 | 5,477 | 1,014 | (13,110 | ) | 15,209 | |||||||||||||||||
| Change $ | 392 | (116 | ) | 1,051 | 831 | 385 | 2,543 | |||||||||||||||||
| Change % | 3.4 | % | (1.1 | %) | 19.2 | % | 82.0 | % | 2.9 | % | 16.7 | % | ||||||||||||
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 three months ended March 31, | ||||||||
| 2008 | 2007 | |||||||
| Total profit for all segments | $ | 17,752 | $ | 15,209 | ||||
| Minority interest earnings of subsidiary | (57 | ) | (34 | ) | ||||
| Recapture (elimination) of intersegment profit | (176 | ) | 159 | |||||
| Consolidated net income | $ | 17,519 | $ | 15,334 | ||||
| Astec Industries, Inc. and Subsidiaries | ||||||||||||||||||||||||
| Backlog by Segment | ||||||||||||||||||||||||
| March 31, 2008 and 2007 | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Asphalt Group | Aggregate and Mining Group | Mobile Asphalt Paving Group | Underground Group | All Others | Total | |||||||||||||||||||
| 2008 Backlog | 122,123 | 99,637 | 13,307 | 14,893 | 13,051 | 263,011 | ||||||||||||||||||
| 2007 Backlog | 113,973 | 120,605 | 16,430 | 9,697 | 5,521 | 266,226 | ||||||||||||||||||
| Change $ | 8,150 | (20,968 | ) | (3,123 | ) | 5,196 | 7,530 | (3,215 | ) | |||||||||||||||
| Change % | 7.2 | % | (17.4 | %) | (19.0 | %) | 53.6 | % | 136.4 | % | (1.2 | %) | ||||||||||||