Astec Industries, Inc. (Nasdaq: ASTE) announced today the
appointment of Mr. Barry Ruffalo as its President and Chief
Executive Officer to be effective on August 12, 2019. Mr. Ruffalo
has also been elected to the Board of Directors. Mr. Ruffalo will
join the Board of Directors as a Class I director and will stand
for re-election at the Company’s 2020 annual meeting. On the
effective date of Mr. Ruffalo’s appointment, Richard Dorris,
Interim Chief Executive Officer, will resume his role as Chief
Operating Officer.
Prior to his appointment, Mr. Ruffalo was
employed by Valmont Industries, a publicly-traded diversified
global producer of highly-engineered fabricated metal products,
where he served in Group President roles since 2016, having
previously served as its Executive Vice President, Operational
Excellence beginning in 2015. Prior to his work with Valmont
Industries, Mr. Ruffalo was employed by Lindsay Corporation, a
publicly-traded global leader in proprietary water management and
road infrastructure products and services.
“After a comprehensive search that included a
number of highly qualified candidates, we are excited to hire Mr.
Ruffalo,” said Bill Gehl, Chairman of Astec. “Barry brings a wealth
of experience to Astec. He is a leader that has driven change,
understands infrastructure and will add tremendous value.”
“I am excited to join Astec as its CEO and a
member of the Board of Directors, said Mr. Ruffalo. “I look forward
to moving forward with measures to make Astec more profitable and
agile while building on the strength of its world-class
products.”
In addition, the Company reported results for
its second quarter ended June 30, 2019.
Net sales for the second quarter of 2019 were
$304.8 million compared to $272.5 million for the second quarter of
2018, an 11.8% increase. Domestic sales increased 21.1% to $246.2
million for the second quarter of 2019 from $203.4 million for the
second quarter of 2018. International sales decreased 15.3% to
$58.6 million for the second quarter of 2019 from $69.1 million for
the second quarter of 2018. During the quarter, the Company
recognized $20.0 million of pre-tax profit on the sale of its
Hazlehurst, Georgia wood pellet plant.
Net income for the second quarter of 2019 was
$23.4 million or $1.03 per diluted share, compared to a net loss of
$40.7 million or $1.76 per diluted share for the second quarter of
2018.
Net sales for the first half of 2019 were $630.6
million compared to $598.0 million for the first half of 2018, an
increase of 5.5%. Domestic sales increased 7.5% to $509.0 million
for the first half of 2019 from $473.5 million for the first half
of 2018. International sales decreased 2.4% to $121.5 million for
the first half of 2019 from $124.5 million for the first half of
2018.
Net income for the first half of 2019 was $37.7
million or $1.66 per diluted share, compared to a net loss of $20.4
million or $0.89 per diluted share for the first half of 2018.
The following financial information for the
second quarter and first half of 2019 and 2018 excludes all of the
impact of wood pellet plant activity on the Company’s results
during those periods. International sales were not impacted by wood
pellet plant activity in any period.
Net sales for the
second quarter of 2019 were $284.8 million compared to $347.1
million for the second quarter of 2018, a decrease of $62.3 million
or 17.9%. Domestic sales decreased 18.6% to $226.2 million for the
second quarter of 2019 from $277.9 million for the second quarter
of 2018.
Earnings for the
second quarter of 2019 were $8.1 million or $0.36 per diluted
share, compared to $24.0 million or $1.03 per diluted share for the
second quarter of 2018, a decrease in earnings per share of
65.0%.
Net sales for the
first half of 2019 were $610.6 million compared to $672.8 million
for the first half of 2018, a decrease of $62.2 million or 9.2%.
Domestic sales decreased 10.8% to $489.0 million for the first half
of 2019 from $548.2 million for the first half of 2018.
Earnings for the
first half of 2019 were $22.4 million or $0.99 per diluted share,
compared to $46.9 million or $2.02 per diluted share for the first
half of 2018, a decrease in earnings per share of 51.0%.
Commenting on the quarterly results, Richard
Dorris, Interim Chief Executive Officer, stated, “We are pleased
the sale of the Hazlehurst, Georgia wood pellet plant completely
ended our involvement in the wood pellet plant business. Our EPS,
less the payment received for the wood pellet plant, however, was
$0.36 and below our expectations. The lower than expected earnings
are a result of lower than projected volume and under absorption of
production costs.”
The Company’s backlog at June 30, 2019 was
$246.1 million, a decrease of $56.8 million or 18.8% compared to
the June 30, 2018 backlog of $302.9 million. The June 30, 2019
backlog was up 4.1% or $9.6 million compared to the March 31, 2019
backlog of $236.5 million. Domestic backlog decreased 25.8% to
$161.6 million at June 30, 2019 from $217.9 million at June 30,
2018. The international backlog at June 30, 2019 was $84.5 million
compared to $85.0 million at June 30, 2018, remaining
flat.
Mr. Dorris concluded, “We have experienced
reduced demand in the first half of this year, but our ongoing
strategic procurement and operational excellence initiatives along
with manpower reductions at our most affected subsidiaries will
help us maintain and improve profitability even if market
conditions do not improve in the short term.”
Consolidated financial information for the
second quarter and six months ended June 30, 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 today, July
23, 2019, at 10:00 A.M. Eastern Time, to review its second quarter
and six-month 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 August 6, 2019 by dialing (877) 481-4010, or
(919) 882-2331 for international callers, Replay ID #50107. 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, (ii) the effect of
its strategic procurement and operational excellence initiatives,
(iii) efforts to adjust manpower, 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:
Richard J. Dorris Interim Chief Executive
Officer & Chief Operating Officer Phone: (423) 867-4210
Fax: (423) 867-4127 E-mail: rdorris@astecindustries.com
or
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) |
|
|
|
|
|
|
June 30 |
June 30 |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and
cash equivalents |
$ |
24,905 |
|
$ |
65,206 |
|
|
|
Investments |
|
1,211 |
|
|
1,972 |
|
|
|
Receivables, net |
|
139,196 |
|
|
144,205 |
|
|
|
Inventories |
|
360,883 |
|
|
394,789 |
|
|
|
Prepaid
expenses and other |
|
31,340 |
|
|
36,044 |
|
|
|
Total
current assets |
|
557,535 |
|
|
642,216 |
|
|
|
Property
and equipment, net |
|
191,854 |
|
|
185,455 |
|
|
|
Other
assets |
|
99,166 |
|
|
96,165 |
|
|
|
Total assets |
$ |
848,555 |
|
$ |
923,836 |
|
|
|
Liabilities and equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts
payable - trade |
$ |
70,338 |
|
$ |
64,702 |
|
|
|
Other
current liabilities |
|
103,598 |
|
|
177,978 |
|
|
|
Total
current liabilities |
|
173,936 |
|
|
242,680 |
|
|
|
Long-term
debt, less current maturities |
|
28,891 |
|
|
1,062 |
|
|
|
Non-current liabilities |
|
25,120 |
|
|
23,113 |
|
|
|
Total
equity |
|
620,608 |
|
|
656,981 |
|
|
|
Total liabilities and equity |
$ |
848,555 |
|
$ |
923,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Astec Industries, Inc. |
Condensed Consolidated Statements of
Operations |
(in thousands, except per share data) |
(unaudited) |
|
|
|
|
Three Months Ended |
Six Months Ended |
|
June 30 |
June 30 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net sales |
$ |
304,802 |
|
$ |
272,528 |
|
$ |
630,582 |
|
$ |
597,981 |
|
Cost of sales |
|
221,352 |
|
|
271,420 |
|
|
470,606 |
|
|
518,868 |
|
Gross profit |
|
83,450 |
|
|
1,108 |
|
|
159,976 |
|
|
79,113 |
|
Selling, general, administrative & engineering expenses |
|
52,968 |
|
|
51,263 |
|
|
111,316 |
|
|
103,341 |
|
Income (loss) from operations |
|
30,482 |
|
|
(50,155 |
) |
|
48,660 |
|
|
(24,228 |
) |
Interest expense |
|
(484 |
) |
|
(168 |
) |
|
(1,131 |
) |
|
(318 |
) |
Other |
|
387 |
|
|
1,146 |
|
|
911 |
|
|
1,658 |
|
Income (loss) before income taxes |
|
30,385 |
|
|
(49,177 |
) |
|
48,440 |
|
|
(22,888 |
) |
Income tax expense (benefit) |
|
7,008 |
|
|
(8,503 |
) |
|
10,789 |
|
|
(2,481 |
) |
Net income (loss) attributable to controlling interest |
$ |
23,377 |
|
$ |
(40,674 |
) |
$ |
37,651 |
|
$ |
(20,407 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per Common Share |
|
|
|
|
Net income (loss) attributable to controlling interest |
|
|
|
|
Basic |
$ |
1.04 |
|
$ |
(1.76 |
) |
$ |
1.67 |
|
$ |
(0.89 |
) |
Diluted |
$ |
1.03 |
|
$ |
(1.76 |
) |
$ |
1.66 |
|
$ |
(0.89 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
Basic |
|
22,509 |
|
|
23,061 |
|
|
22,503 |
|
|
23,053 |
|
Diluted |
|
22,667 |
|
|
23,061 |
|
|
22,656 |
|
|
23,053 |
|
Astec Industries, Inc. |
Segment Revenues and Profit (Loss) |
For the three months ended June 30, 2019 and 2018 |
(in thousands) |
(unaudited) |
|
|
Infrastructure Group |
Aggregate and Mining Group |
Energy Group |
Corporate |
Total |
2019 Revenues |
133,235 |
|
|
106,837 |
|
|
64,730 |
|
|
- |
|
304,802 |
|
2018 Revenues |
83,202 |
|
|
116,297 |
|
|
73,029 |
|
|
- |
|
272,528 |
|
Change $ |
50,033 |
|
|
(9,460 |
) |
|
(8,299 |
) |
|
- |
|
32,274 |
|
Change % |
60.1 |
% |
|
(8.1 |
%) |
|
(11.4 |
%) |
|
- |
|
11.8 |
% |
|
|
|
|
|
|
2019 Gross Profit |
42,689 |
|
|
25,493 |
|
|
15,187 |
|
|
81 |
|
83,450 |
|
2019 Gross Profit % |
32.0 |
% |
|
23.9 |
% |
|
23.5 |
% |
|
- |
|
27.4 |
% |
2018 Gross Profit (Loss) |
(47,817 |
) |
|
29,042 |
|
|
19,808 |
|
|
75 |
|
1,108 |
|
2018 Gross Profit (Loss)% |
(57.5 |
%) |
|
25.0 |
% |
|
27.1 |
% |
|
- |
|
0.4 |
% |
Change |
90,506 |
|
|
(3,549 |
) |
|
(4,621 |
) |
|
6 |
|
82,342 |
|
|
|
|
|
|
|
2019 Profit (Loss) |
24,445 |
|
|
8,489 |
|
|
3,138 |
|
|
(13,220 |
) |
22,852 |
|
2018 Profit (Loss) |
(62,734 |
) |
|
12,548 |
|
|
8,477 |
|
|
596 |
|
(41,113 |
) |
Change $ |
87,179 |
|
|
(4,059 |
) |
|
(5,339 |
) |
|
(13,816 |
) |
63,965 |
|
Change % |
139.0 |
% |
|
(32.3 |
%) |
|
(63.0 |
%) |
|
(2318.1 |
%) |
155.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues
are reported net of intersegment revenues. Segment gross
profit (loss) is net of profit on intersegment |
revenues. A reconciliation of total segment profit (loss) to
the Company's net income (loss) attributable to controlling
interest is as follows (in thousands): |
|
|
|
|
|
|
|
|
Three months ended June 30 |
|
|
|
|
2019 |
|
|
2018 |
|
Change $ |
|
Total profit (loss) for all
segments |
|
$ |
22,852 |
|
$ |
(41,113 |
) |
$ |
63,965 |
|
|
Recapture of intersegment
profit |
|
|
509 |
|
|
345 |
|
|
164 |
|
|
Net loss
attributable to non-controlling interest |
|
16 |
|
|
94 |
|
|
(78 |
) |
|
Net income (loss) attributable to controlling interest |
$ |
23,377 |
|
$ |
(40,674 |
) |
$ |
64,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Astec Industries, Inc. |
Segment Revenues and Profit (Loss) |
For the six months ended June 30, 2019 and 2018 |
(in thousands) |
(unaudited) |
|
|
Infrastructure Group |
Aggregate and Mining Group |
Energy Group |
Corporate |
Total |
2019 Revenues |
288,229 |
|
|
213,368 |
|
|
128,985 |
|
|
- |
|
630,582 |
|
2018 Revenues |
230,296 |
|
|
235,364 |
|
|
132,321 |
|
|
- |
|
597,981 |
|
Change $ |
57,933 |
|
|
(21,996 |
) |
|
(3,336 |
) |
|
- |
|
32,601 |
|
Change % |
25.2 |
% |
|
(9.3 |
%) |
|
(2.5 |
%) |
|
- |
|
5.5 |
% |
|
|
|
|
|
|
2019 Gross Profit |
78,196 |
|
|
51,038 |
|
|
30,666 |
|
|
76 |
|
159,976 |
|
2019 Gross Profit % |
27.1 |
% |
|
23.9 |
% |
|
23.8 |
% |
|
- |
|
25.4 |
% |
2018 Gross Profit (Loss) |
(14,536 |
) |
|
58,331 |
|
|
35,095 |
|
|
223 |
|
79,113 |
|
2018 Gross Profit (Loss)% |
(6.3 |
%) |
|
24.8 |
% |
|
26.5 |
% |
|
- |
|
13.2 |
% |
Change |
92,732 |
|
|
(7,293 |
) |
|
(4,429 |
) |
|
(147 |
) |
80,863 |
|
|
|
|
|
|
|
2019 Profit (Loss) |
39,683 |
|
|
17,166 |
|
|
6,532 |
|
|
(26,690 |
) |
36,691 |
|
2018 Profit (Loss) |
(47,882 |
) |
|
25,658 |
|
|
13,088 |
|
|
(10,652 |
) |
(19,788 |
) |
Change $ |
87,565 |
|
|
(8,492 |
) |
|
(6,556 |
) |
|
(16,038 |
) |
56,479 |
|
Change % |
182.9 |
% |
|
(33.1 |
%) |
|
(50.1 |
%) |
|
(150.6 |
%) |
285.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues
are reported net of intersegment revenues. Segment gross profit
(loss) is net of profit on intersegment |
revenues. A reconciliation of total segment profit (loss) to the
Company's net income (loss) attributable to controlling interest is
as follows (in thousands): |
|
|
|
|
|
|
|
|
Six months ended June 30 |
|
|
|
|
2019 |
|
|
2018 |
|
Change $ |
|
Total profit (loss) for all
segments |
|
$ |
36,691 |
|
$ |
(19,788 |
) |
$ |
56,479 |
|
|
Recapture
(elimination) of intersegment profit |
|
888 |
|
|
(764 |
) |
|
1,651 |
|
|
Net loss
attributable to non-controlling interest |
|
72 |
|
|
145 |
|
|
(72 |
) |
|
Net income (loss) attributable to controlling interest |
$ |
37,651 |
|
$ |
(20,407 |
) |
$ |
58,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Astec Industries, Inc. |
|
Backlog by Segment |
|
June 30, 2019 and 2018 |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
Infrastructure Group |
Aggregate and Mining Group |
Energy Group |
Total |
|
2019 Backlog |
94,855 |
|
|
87,904 |
|
|
63,333 |
|
|
246,092 |
|
|
2018 Backlog |
105,888 |
|
|
128,342 |
|
|
68,662 |
|
|
302,892 |
|
|
Change $ |
(11,033 |
) |
|
(40,438 |
) |
|
(5,329 |
) |
|
(56,800 |
) |
|
Change % |
(10.4 |
%) |
|
(31.5 |
%) |
|
(7.8 |
%) |
|
(18.8 |
%) |
|
|
|
|
|
|
|
GLOSSARY
In its earnings release, Astec refers to various
GAAP (U.S. generally accepted accounting principles) and non-GAAP
financial measures. These non-GAAP measures may not be comparable
to similarly titled measures being disclosed by other companies.
Non-GAAP financial measures should be considered in addition to,
and not in lieu of, GAAP financial measures. Nonetheless, this
non-GAAP information can be useful in understanding the Company’s
operating results and the performance of its core businesses.
The amounts described below are unaudited,
reported in thousands of U.S. dollars (except share data), and as
of or for the periods indicated.
|
Second Quarter
2019 |
As Reported (GAAP) |
Impact of Pellet Plants |
As Adjusted (Non-GAAP) |
Net Sales |
304,802 |
|
20,000 |
|
284,802 |
|
Domestic Sales |
246,213 |
|
20,000 |
|
226,213 |
|
GM |
83,450 |
|
20,000 |
|
63,450 |
|
GM% |
27.4 |
% |
100.0 |
% |
22.3 |
% |
Income Tax Expense (1) |
7,008 |
|
4,731 |
|
2,277 |
|
Net Income |
23,377 |
|
15,269 |
|
8,108 |
|
EPS |
1.03 |
|
0.67 |
|
0.36 |
|
|
|
|
|
Year to
DateJune 30, 2019 |
|
|
|
Net Sales |
630,582 |
|
20,000 |
|
610,582 |
|
Domestic Sales |
509,042 |
|
20,000 |
|
489,042 |
|
GM |
159,976 |
|
20,000 |
|
139,976 |
|
GM% |
25.4 |
% |
100.0 |
% |
22.9 |
% |
Income Tax Expense (1) |
10,789 |
|
4,731 |
|
6,058 |
|
Net Income |
37,651 |
|
15,269 |
|
22,382 |
|
EPS |
1.66 |
|
0.67 |
|
0.99 |
|
|
|
|
|
(1) Tax effect on adjustments is calculated using the applicable
jurisdictional blended tax rate |
|
|
|
|
|
|
|
|
Second Quarter
2018 |
As Reported (GAAP) |
Impact of Pellet Plants |
As Adjusted (Non-GAAP) |
Net Sales |
272,528 |
|
(74,522 |
) |
347,050 |
|
Domestic Sales |
203,388 |
|
(74,522 |
) |
277,910 |
|
GM |
1,108 |
|
(80,923 |
) |
82,031 |
|
GM% |
0.4 |
% |
|
23.6 |
% |
Income Tax (Benefit) Expense
(1) |
(8,503 |
) |
(16,258 |
) |
7,755 |
|
Net Income (Loss) |
(40,674 |
) |
(64,665 |
) |
23,991 |
|
EPS |
(1.76 |
) |
(2.80 |
) |
1.03 |
|
|
|
|
|
Year to Date
June 30, 2018 |
|
|
|
Net Sales |
597,981 |
|
(74,778 |
) |
672,759 |
|
Domestic Sales |
473,464 |
|
(74,778 |
) |
548,242 |
|
GM |
79,113 |
|
(84,341 |
) |
163,454 |
|
GM% |
13.2 |
% |
|
24.3 |
% |
Income Tax (Benefit) Expense
(1) |
(2,481 |
) |
(17,011 |
) |
14,530 |
|
Net Income (Loss) |
(20,407 |
) |
(67,330 |
) |
46,923 |
|
EPS |
(0.89 |
) |
(2.92 |
) |
2.02 |
|
|
|
|
|
(1) Tax effect on adjustments is calculated using the applicable
jurisdictional blended tax rate |
|
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