EX-99.1 2 ex99-1.htm PRESS RELEASE
Exhibit 99.1

Astec Industries, Inc.
 
NEWS RELEASE
 
1725 Shepherd Rd. - Chattanooga, TN 37421 - Phone (423) 899-5898 - Fax (423) 899-4456


ASTEC INDUSTRIES REPORTS FIRST QUARTER 2019 RESULTS

CHATTANOOGA, Tenn. (April 23, 2019) - 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: dsilvious@astecindustries.com
Or
Stephen C. Anderson 
Vice President, Director of Investor Relations & Corporate Secretary 
Phone: (423) 899-5898 
Fax: (423) 899-4456 
E-mail: sanderson@astecindustries.com
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 Mining
Group
    
Energy
Group
    
Corporate
   
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 (Loss)
    
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 Mining
Group
    
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)
                          
      EPS
                         
Fully Diluted EPS
  
$
0.87
                          
EPS impact of Pellet Activity
    
0.09
                          
EPS As Adjusted
  
$
0.96