Astec Industries Reports First Quarter 2019 Results
CHATTANOOGA, Tenn., April 23, 2019 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq: ASTE) today reported results for their first quarter ended March 31, 2019.
Net sales for the first quarter of 2019 were $325.8 million compared to $325.5 million for the first quarter of 2018. Domestic sales decreased 2.7% to $262.8 million for the first quarter of 2019 from $270.1 million for the first quarter of 2018. International sales increased 13.7% to $63.0 million for the first quarter of 2019 from $55.4 million for the first quarter of 2018.
Earnings for the first quarter of 2019 were $14.3 million or $0.63 per diluted share, compared to $20.3 million or $0.87 per diluted share in the first quarter of 2018, a decrease in earnings per share of 27.6%. As adjusted for the impact of pellet plant activity in the first quarter of 2018, earnings per diluted share decreased $0.33 or 34.4%.
Commenting on the announcement of the quarterly results, Richard J. Dorris, Interim Chief Executive Officer, stated, “We are disappointed that our performance in the first quarter did not meet our expectations. All three segments experienced pricing pressure from competitors in a tighter market and temporary weather related shutdowns at seven of our subsidiaries impacted our ability to build and ship equipment.”
Mr. Dorris continued, “Lower than expected volumes impacted our gross margins at several of our subsidiaries. As we’ve previously discussed, our SGA&E is also temporarily at a higher run rate than normal due to our ongoing strategic sourcing project. Bookings were also affected by the weather as customers were unable to work in unusually wet or icy conditions in much of the U.S.”
The Company’s backlog at March 31, 2019 was $236.5 million, a decrease of $208.4 million or 46.8% compared to the March 31, 2018 backlog of $444.9 million. Domestic backlog decreased 52.6% to $161.8 million at March 31, 2019 from $341.1 million at March 31, 2018. The international backlog at March 31, 2019 was $74.7 million compared to $103.8 million at March 31, 2018, a decrease of 28.0%. Adjusted for pellet plant backlog included in the March 31, 2018 backlog, the Company’s backlog decreased $143.8 million or 37.8%.
Mr. Dorris concluded, “While we are paying close attention to the decrease in our backlog, we note that we experienced historical high points in our backlogs in the first quarter of 2018. We have already made a number of moves to adjust our capacity and, while we’ve seen some positive developments in recent order intake, we will continue to monitor the backlog and make adjustments where necessary.”
Consolidated financial information for the first quarter ended March 31, 2019 and additional information related to segment revenues and profits are attached as addenda to this press release.
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on April 23, 2019, 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/conferencecalls. 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, May 7, 2019 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Replay ID# 47335. A transcription of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within 5 business days after the call.
Astec Industries, Inc., (www.astecindustries.com), is a manufacturer of specialized equipment for asphalt road building; aggregate processing; oil, gas and water well drilling and concrete production. Astec's manufacturing operations are divided into three primary business segments: road building, (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and equipment for the extraction and production of fuels and water drilling equipment (Energy Group).
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 effects on the Company from (i) product demand and pricing pressure, (ii) the effect of its strategic sourcing project (iii) efforts to adjust manufacturing capacity, and (iv) its backlog activity. 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, oil, gas and liquid asphalt prices, rising steel prices, decreased funding for highway projects, the relative strength/weakness of the dollar to foreign currencies, production capacity, general business conditions in the industry, demand for the Company’s products, seasonality and cyclicality in operating results, seasonality of sales volumes or lower than expected sales volumes, lower than expected margins on custom equipment orders, competitive activity, tax rates and the impact of future legislation thereon, 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, 2018.
For Additional Information Contact:
David C. Silvious Vice President and Chief Financial Officer Phone: (423) 899-5898 Fax: (423) 899-4456 E-mail: [email protected]Or
Stephen C. Anderson Vice President, Director of Investor Relations & Corporate Secretary Phone: (423) 899-5898 Fax: (423) 899-4456 E-mail: [email protected]
| Astec Industries, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (in thousands) | ||||||
| (unaudited) | ||||||
| Mar 31 | Mar 31 | |||||
| 2019 | 2018 | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 28,606 | $ | 41,940 | ||
| Investments | 1,589 | 1,751 | ||||
| Receivables, net | 137,211 | 153,854 | ||||
| Inventories | 366,835 | 411,159 | ||||
| Prepaid expenses and other | 41,832 | 23,533 | ||||
| Total current assets | 576,073 | 632,237 | ||||
| Property and equipment, net | 192,143 | 189,287 | ||||
| Other assets | 104,089 | 96,841 | ||||
| Total assets | $ | 872,305 | $ | 918,365 | ||
| Liabilities and equity | ||||||
| Current liabilities | ||||||
| Accounts payable - trade | $ | 76,451 | $ | 68,833 | ||
| Other current liabilities | 114,342 | 117,609 | ||||
| Total current liabilities | 190,793 | 186,442 | ||||
| Long-term debt, less current maturities | 56,629 | 1,357 | ||||
| Non-current liabilities | 25,617 | 22,490 | ||||
| Total equity | 599,266 | 708,076 | ||||
| Total liabilities and equity | $ | 872,305 | $ | 918,365 | ||
| Astec Industries, Inc. | ||||||
| Condensed Consolidated Statements of Income | ||||||
| (in thousands, except per share data) | ||||||
| (unaudited) | ||||||
| Three Months Ended | ||||||
| Mar 31 | ||||||
| 2019 | 2018 | |||||
| Net sales | $ | 325,780 | $ | 325,453 | ||
| Cost of sales | 249,254 | 247,448 | ||||
| Gross profit | 76,526 | 78,005 | ||||
| Selling, general, administrative & engineering expenses | 58,348 | 52,078 | ||||
| Income from operations | 18,178 | 25,927 | ||||
| Interest expense | (648 | ) | (150 | ) | ||
| Other | 525 | 512 | ||||
| Income before income taxes | 18,055 | 26,289 | ||||
| Income taxes | 3,781 | 6,022 | ||||
| Net income attributable to controlling interest | $ | 14,274 | $ | 20,267 | ||
| Earnings per Common Share | ||||||
| Net income attributable to controlling interest | ||||||
| Basic | $ | 0.63 | $ | 0.88 | ||
| Diluted | $ | 0.63 | $ | 0.87 | ||
| Weighted average common shares outstanding | ||||||
| Basic | 22,498 | 23,045 | ||||
| Diluted | 22,646 | 23,236 | ||||
| Astec Industries, Inc. | |||||||||||||||
| Segment Revenues and Profits | |||||||||||||||
| For the three months ended March 31, 2019 and 2018 | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Infrastructure Group | Aggregate and MiningGroup | Energy Group | Corporate Group | Total | |||||||||||
| 2019 Revenues | 154,994 | 106,531 | 64,255 | - | 325,780 | ||||||||||
| 2018 Revenues | 147,094 | 119,067 | 59,292 | - | 325,453 | ||||||||||
| Change $ | 7,900 | (12,536 | ) | 4,963 | - | 327 | |||||||||
| Change % | 5.4 | % | (10.5 | %) | 8.4 | % | - | 0.1 | % | ||||||
| 2019 Gross Profit | 35,506 | 25,545 | 15,479 | (4 | ) | 76,526 | |||||||||
| 2019 Gross Profit % | 22.9 | % | 24.0 | % | 24.1 | % | - | 23.5 | % | ||||||
| 2018 Gross Profit | 33,280 | 29,289 | 15,286 | 150 | 78,005 | ||||||||||
| 2018 Gross Profit % | 22.6 | % | 24.6 | % | 25.8 | % | - | 24.0 | % | ||||||
| Change | 2,226 | (3,744 | ) | 193 | (154 | ) | (1,479 | ) | |||||||
| 2019 Profit (Loss) | 15,238 | 8,678 | 3,394 | (13,469 | ) | 13,841 | |||||||||
| 2018 Profit (Loss) | 14,852 | 13,110 | 4,611 | (11,248 | ) | 21,325 | |||||||||
| Change $ | 386 | (4,432 | ) | (1,217 | ) | (2,221 | ) | (7,484 | ) | ||||||
| Change % | 2.6 | % | (33.8 | %) | (26.4 | %) | (19.7 | %) | (35.1 | %) | |||||
| 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 net income attributable to controlling interest is as follows (in thousands): | |||||||||||||||
| Three months ended March 31 | |||||||||||||||
| 2019 | 2018 | Change $ | |||||||||||||
| Total profit for all segments | $ | 13,841 | $ | 21,325 | $ | (7,484 | ) | ||||||||
| Recapture (elimination) of intersegment profit | 377 | (1,109 | ) | 1,486 | |||||||||||
| Net loss attributable to non-controlling interest | 56 | 51 | 5 | ||||||||||||
| Net income attributable to controlling interest | $ | 14,274 | $ | 20,267 | $ | (5,993 | ) | ||||||||
| Astec Industries, Inc. | |||||||||||||||
| Backlog by Segment | |||||||||||||||
| March 31, 2019 and 2018 | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Infrastructure Group | Aggregate and MiningGroup | Energy Group | Total | ||||||||||||
| 2019 Backlog | 80,553 | 103,640 | 52,355 | 236,548 | |||||||||||
| 2018 Backlog | 230,649 | 138,687 | 75,591 | 444,927 | |||||||||||
| Change $ | (150,096 | ) | (35,047 | ) | (23,236 | ) | (208,379 | ) | |||||||
| Change % | (65.1 | %) | (25.3 | %) | (30.7 | %) | (46.8 | %) | |||||||
| 2018 Pellet Backlog | 64,600 | - | - | 64,600 | |||||||||||
| 2018 Backlog as Adjusted | 166,049 | 138,687 | 75,591 | 380,327 | |||||||||||
| As Adjusted Change $ | (85,496 | ) | (35,047 | ) | (23,236 | ) | (143,779 | ) | |||||||
| As Adjusted Change % | (51.5 | %) | (25.3 | %) | (30.7 | %) | (37.8 | %) | |||||||
| Astec Industries, Inc. | |||||||||||||||
| Reconciliation of GAAP EPS to EPS As Adjusted | |||||||||||||||
| For the three months ended March 31, 2018 | |||||||||||||||
| (unaudited) | |||||||||||||||
| Fully Diluted EPS | $ | 0.87 | |||||||||||||
| EPS impact of Pellet Activity | 0.09 | ||||||||||||||
| EPS As Adjusted | $ | 0.96 | |||||||||||||
