Astec Industries (ASTE) 8-K Astec Industries Reports Third Quarter Results with Historical Quarterly Highs In Revenues and Net Income

Astec Industries, Inc.

News Release

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

ASTEC INDUSTRIES REPORTS THIRD QUARTER RESULTS WITH HISTORICAL QUARTERLY HIGHS IN REVENUES AND NET INCOME

CHATTANOOGA, Tenn. (October 21, 2008) - Astec Industries, Inc. (Nasdaq:  ASTE) today reported results for its third quarter ended September 30, 2008.

Revenues for the third quarter of 2008 were $237.4 million compared with $206.2million for the third quarter of 2007 for a 15.1% increase.  Domestic sales accounted for $135.3 million during the third quarter of 2008 compared to $131.7 million during the third quarter of 2007.  International sales accounted for $102.1 million of revenues during the third quarter of 2008 compared to $74.5 million during the third quarter of 2007.  The Company reported net income of $16.0 million for the third quarter of 2008 compared to net income of $11.6 million for the third quarter of 2007 for an increase of 37.9%.  Net income for the third quarter of 2008 was $0.71 per diluted share compared to $0.51 per diluted share for the third quarter of 2007 for a 39.2% increase.

The Company’s backlog at September 30, 2008 was $255.7 million compared to $239.9 million at September 30, 2007 for a 6.6% increase.

Consolidated financial statements for the third quarter ended September 30, 2008 and additional information related to segment revenues, profits, and backlog are attached to this press release.

Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, “We are very pleased with our third quarter results.  With our present backlog, we expect a strong finish for the year.  The injection of $8.0 billion into the Highway Trust Fund ensures full funding at the federal level for 2009.  Many states, however, are experiencing lower tax revenues as a result of the economic downturn and, in particular, the higher oil prices.  The current trend toward lower oil prices should positively impact the state fuel tax collections as drivers return to the road and reduce the price of asphalt resulting in a greater number of road building contracts.  Furthermore, the growth in the energy and mining portions of our business and the strong possibility of a stimulus package for roads and bridges gives us hope of continued strength and growth in 2009.”

Investor Conference Call and Web Simulcast

Astec will conduct a conference call on October 21, 2008, 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 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, November 4, 2008, by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 300071.  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.  Astec also has a company engaged in the wood chipping and grinding 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 fourth quarter and future generally, the ability to maintain or improve margins, the economy, the need for road improvements, state and federal initiatives to increase funding, the awarding of future contracts, the market’s acceptance of new products, the Company’s improving market share, and the increase in 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, 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

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)
	Sept 30,		Sept 30,
	2008		2007
Assets
Current assets
Cash and cash equivalents	$	28,839	$	48,164
Receivables, net		93,912		83,324
Inventories		249,378		201,982
Prepaid expenses and other		17,158		14,025
Total current assets		389,287		347,495
Property and equipment, net		147,822		137,312
Other assets		68,368		42,689
Total assets	$	605,477	$	527,496
Liabilities and shareholders' equity
Current liabilities
Accounts payable	$	55,115	$	55,303
Other current liabilities		88,131		83,511
Total current liabilities		143,246		138,814
Other non-current liabilities		25,405		22,646
Minority interest in consolidated subsidiary		836		833
Total shareholders' equity		435,990		365,203
Total liabilities and shareholders' equity	$	605,477	$	527,496

Astec Industries, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands)
(Unaudited)
	Three Months Ended Sept 30,				Nine Months Ended Sept 30,
	2008		2007		2008		2007
Net sales	$	237,443	$	206,239	$	778,218	$	648,216
Cost of sales		178,640		157,678		586,906		486,339
Gross profit		58,803		48,561		191,312		161,877
Selling, general, administrative & engineering expenses		34,269		31,926		106,638		92,774
Income from operations		24,534		16,635		84,674		69,103
Interest expense		276		149		528		765
Other income, net of expenses		260		638		1,099		2,038
Income before income taxes and minority interest		24,518		17,124		85,245		70,376
Income taxes		8,512		5,482		30,593		24,812
Minority interest in earnings of subsidiary		44		68		99		151
Net income	$	15,962	$	11,574	$	54,553	$	45,413
Earnings per Common Share
Net income
Basic	$	0.72	$	0.52	$	2.45	$	2.08
Diluted	$	0.71	$	0.51	$	2.41	$	2.03
Weighted average common shares outstanding
Basic		22,289,973		22,116,275		22,270,121		21,881,565
Diluted		22,600,978		22,581,075		22,595,174		22,393,677

Astec Industries, Inc. and Subsidiaries
Segment Revenues and Profits
For the three months ended September 30, 2008 and 2007
(in thousands)
(Unaudited)
	Asphalt Group			Aggregate and Mining Group			Mobile Asphalt Paving Group			Underground Group			All Others			Total
2008 Revenues		56,658			90,268			27,993			40,443			22,081			237,443
2007 Revenues		51,860			81,801			33,323			28,335			10,920			206,239
Change $		4,798			8,467			(5,330	)		12,108			11,161			31,204
Change %		9.3	%		10.4	%		(16.0	%)		42.7	%		102.2	%		15.1	%
2008 Gross Profit		17,045			20,402			6,547			11,318			3,491			58,803
2008 Gross Profit %		30.1	%		22.6	%		23.4	%		28.0	%		15.8	%		24.8	%
2007 Gross Profit		12,375			18,700			8,096			7,498			1,892			48,561
2007 Gross Profit %		23.9	%		22.9	%		24.3	%		26.5	%		17.3	%		23.5	%
Change		4,670			1,702			(1,549	)		3,820			1,599			10,242
2008 Profit (Loss)		10,675			10,773			1,465			6,583			(11,948	)		17,548
2007 Profit (Loss)		6,656			8,154			3,542			3,223			(9,794	)		11,781
Change $		4,019			2,619			(2,077	)		3,360			(2,154	)		5,767
Change %		60.4	%		32.1	%		(58.6	%)		104.3	%		(22.0	%)		49.0	%
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 September 30,
	2008			2007
Total profit for all segments	$	17,548		$	11,781
Minority interest in earnings of subsidiary		(44	)		(68	)
Elimination of intersegment profit		(1,542	)		(139	)
Consolidated net income	$	15,962		$	11,574

Astec Industries, Inc. and Subsidiaries
Segment Revenues and Profits
For the nine months ended September 30, 2008 and 2007
(in thousands)
(Unaudited)
	Asphalt Group			Aggregate and Mining Group			Mobile Asphalt Paving Group			Underground Group			All Others			Total
2008 Revenues		200,572			273,753			130,180			109,298			64,415			778,218
2007 Revenues		183,507			253,138			117,662			82,988			10,921			648,216
Change $		17,065			20,615			12,518			26,310			53,494			130,002
Change %		9.3	%		8.1	%		10.6	%		31.7	%		489.8	%		20.1	%
2008 Gross Profit		54,652			66,087			32,696			26,728			11,149			191,312
2008 Gross Profit %		27.2	%		24.1	%		25.1	%		24.5	%		17.3	%		24.6	%
2007 Gross Profit		48,358			62,444			28,999			20,209			1,867			161,877
2007 Gross Profit %		26.4	%		24.7	%		24.6	%		24.4	%		17.1	%		25.0	%
Change		6,294			3,643			3,697			6,519			9,282			29,435
2008 Profit (Loss)		33,964			32,942			16,030			11,972			(38,724	)		56,184
2007 Profit (Loss)		29,827			30,859			14,768			6,515			(36,534	)		45,435
Change $		4,137			2,083			1,262			5,457			(2,190	)		10,749
Change %		13.9	%		6.8	%		8.5	%		83.8	%		(6.0	%)		23.7	%
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 nine months ended September 30,
	2008			2007
Total profit for all segments	$	56,184		$	45,435
Minority interest in earnings of subsidiary		(99	)		(151	)
Recapture (elimination) of intersegment profit		(1,532	)		129
Consolidated net income	$	54,553		$	45,413

Astec Industries, Inc. and Subsidiaries
Backlog by Segment
September 30, 2008 and 2007
(in thousands)
(Unaudited)
	Asphalt Group			Aggregate and Mining Group			Mobile Asphalt Paving Group			Underground Group			All Others			Total
2008 Backlog		126,604			104,365			974			14,841			8,880			255,664
2007 Backlog		110,234			96,363			2,779			21,638			8,892			239,906
Change $		16,370			8,002			(1,805	)		(6,797	)		(12	)		15,758
Change %		14.9	%		8.3	%		(65.0	%)		(31.4	%)		(0.1	%)		6.6	%