CHATTANOOGA, Tenn., Oct. 21, 2014 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their third quarter ended September 30, 2014. Net sales for the third quarter of 2014 were $220.2 million compared to $213.2million for the third quarter of 2013, a 3% increase. Earnings for the third quarter of 2014 were $1.9 million or $0.08 per diluted share compared to $6.5 million or $0.28 per diluted share in the third quarter of 2013, a decrease of 71%.
Domestic sales increased 8% to $142.6 million for the third quarter of 2014 compared to $132.4 million for the third quarter of 2013. International sales decreased 4% to $77.6 million for the third quarter of 2014 compared to $80.8 million for the third quarter of 2013.
Net sales for the first nine months of 2014 were $736.1 million compared to $709.1million for the first nine months of 2013, a 4% increase. Earnings for the first nine months of 2014 were $26.0 million or $1.12 per diluted share compared to $30.8 million or $1.33 per diluted share in the first nine months of 2013, a 16% decrease.
Domestic sales increased 10% to $502.7 million for the first nine months of 2014 compared to $456.6 million for the first nine months of 2013. International sales were $233.4 million for the first nine months of 2014 compared to $252.5 million for the first nine months of 2013, an 8% decrease.
The Company's gross profit for the third quarter of 2014 was $43.3 million or 19.7% compared to $45.8 million or 21.5% for the third quarter of 2013, a decrease of $2.5 million or 180 basis points. The decrease in gross profit is attributable to the Infrastructure Group with the Aggregate and Mining Group and the Energy Group meeting or exceeding third quarter of 2013 gross profit levels. The Infrastructure Group's gross profit was negatively impacted by a reduction in sales volume combined with pricing pressures in the infrastructure market.
The Company's effective income tax rate increased from 34.6% for the third quarter of 2013 to 64.0% for the third quarter of 2014. The effective tax rate for the first nine months of 2014 was 37.9% compared to 33.4% for the first nine months of 2013. This increase was due to net operating losses in certain foreign jurisdictions that could not be utilized to offset taxable income in the United States, adjustments to the Company's tax reserves and the continued delay in passage of a research and development credit in 2014.
The Company's domestic backlog increased 42%, from $132.9 million at September 30, 2013 to $189.3 million at September 30, 2014. The international backlog at September 30, 2014 was $105.7 million compared to $98.1 million at September 30, 2013 for an increase of 8%. Total backlog increased 28% to $295.0 million at September 30, 2014 from $231.0 million at September 30, 2013.
Consolidated financial information for the quarter and nine months ended September 30, 2014 and additional information related to segment revenues and profits are attached as addenda to this press release.
Commenting on the announcement of quarterly results, Benjamin G. Brock, President and Chief Executive Officer, stated, "We are disappointed in our net income for the third quarter. Our Energy and our Aggregate and Mining Groups performed okay while our Infrastructure Group lagged due primarily to the lack of a federal highway bill, pricing pressure as a result, and product mix. As we've previously reported, we are still unable to recognize the revenue associated with our new $60 million pellet plant. This lack of recognition continues to hamper the Infrastructure Group's 2014 operating results. A 64% tax rate for the quarter was another challenge to our earnings in the quarter."
Mr. Brock continued, "Despite our third quarter results, we are encouraged about our overall business prospects for the remainder of the year and 2015. Our backlog is up 28% versus last year with increases in both domestic and international markets. Also, our higher margin parts sales have recovered and are ahead of last year's pace. These developments, along with our focus on lean initiatives, lead us to feel optimistic about both sales growth and margin improvement."
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on October 21, 2014, at 10:00 A.M. Eastern Time to review its September 30, 2014 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, November 4, 2014 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 13593054. 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. is a manufacturer of specialized equipment for asphalt road building; aggregate processing; oil, gas and water well drilling; and wood processing. Astec's manufacturing operations are divided into three primary business segments: road building and related equipment (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and equipment for the extraction and production of fuels, biomass production, 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 its backlog, anticipated tax rates/credits, equipment and parts sales, federal infrastructure spending and pricing pressures. 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, rising oil and liquid asphalt prices, rising steel prices, the effect of any future federal stimulus package, 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, 2013.
| Astec Industries, Inc. | ||
| Consolidated Balance Sheets | ||
| (in thousands) | ||
| (unaudited) | ||
| Sept 30 | Sept 30 | |
| 2014 | 2013 | |
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 13,820 | $ 46,342 |
| Investments | 1,903 | 16,342 |
| Receivables, net | 108,844 | 97,347 |
| Inventories | 370,436 | 339,826 |
| Prepaid expenses and other | 36,629 | 21,701 |
| Total current assets | 531,632 | 521,558 |
| Property and equipment, net | 190,395 | 186,546 |
| Other assets | 66,554 | 41,959 |
| Total assets | $ 788,581 | $ 750,063 |
| Liabilities and equity | ||
| Current liabilities | ||
| Accounts payable - trade | $ 53,034 | $ 48,492 |
| Other current liabilities | 97,059 | 95,083 |
| Total current liabilities | 150,093 | 143,575 |
| Non-current liabilities | 40,139 | 32,903 |
| Total equity | 598,349 | 573,585 |
| Total liabilities and equity | $ 788,581 | $ 750,063 |
| Astec Industries, Inc. | ||||
| Consolidated Statements of Income | ||||
| (in thousands, except per share data) | ||||
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| Sept 30 | Sept 30 | |||
| 2014 | 2013 | 2014 | 2013 | |
| Net sales | $ 220,157 | $ 213,177 | $ 736,086 | $ 709,136 |
| Cost of sales | 176,896 | 167,390 | 573,890 | 549,341 |
| Gross profit | 43,261 | 45,787 | 162,196 | 159,795 |
| Selling, general, administrative & engineering expenses | 38,867 | 36,635 | 122,539 | 114,797 |
| Income from operations | 4,394 | 9,152 | 39,657 | 44,998 |
| Interest expense | 193 | 269 | 375 | 417 |
| Other | 860 | 1,087 | 2,410 | 1,731 |
| Income before income taxes | 5,061 | 9,970 | 41,692 | 46,312 |
| Income taxes | 3,145 | 3,456 | 15,734 | 15,536 |
| Net income attributable to controlling interest | $ 1,916 | $ 6,514 | $ 25,958 | $ 30,776 |
| Earnings per Common Share | ||||
| Net income attributable to controlling interest | ||||
| Basic | $ 0.08 | $ 0.29 | $ 1.14 | $ 1.35 |
| Diluted | $ 0.08 | $ 0.28 | $ 1.12 | $ 1.33 |
| Weighted average common shares outstanding | ||||
| Basic | 22,830 | 22,756 | 22,813 | 22,744 |
| Diluted | 23,109 | 23,082 | 23,103 | 23,077 |
| Astec Industries, Inc. | |||||
| Segment Revenues and Profits | |||||
| For the three months ended September 30, 2014 and 2013 | |||||
| (in thousands) | |||||
| (unaudited) | |||||
|
Infrastructure Group |
Aggregate and Mining Group |
Energy Group |
Corporate | Total | |
| 2014 Revenues | 78,698 | 88,177 | 53,282 | -- | 220,157 |
| 2013 Revenues | 83,319 | 79,792 | 50,066 | -- | 213,177 |
| Change $ | (4,621) | 8,385 | 3,216 | -- | 6,980 |
| Change % | (5.5%) | 10.5% | 6.4% | -- | 3.3% |
| 2014 Gross Profit | 11,367 | 21,604 | 10,277 | 13 | 43,261 |
| 2014 Gross Profit % | 14.4% | 24.5% | 19.3% | -- | 19.7% |
| 2013 Gross Profit | 18,552 | 19,584 | 7,667 | (16) | 45,787 |
| 2013 Gross Profit % | 22.3% | 24.5% | 15.3% | -- | 21.5% |
| Change | (7,185) | 2,020 | 2,610 | 29 | (2,526) |
| 2014 Profit (Loss) | 520 | 6,806 | 2,789 | (7,137) | 2,978 |
| 2013 Profit (Loss) | 5,919 | 6,765 | 456 | (5,935) | 7,205 |
| Change $ | (5,399) | 41 | 2,333 | (1,202) | (4,227) |
| Change % | (91.2%) | 0.6% | 511.6% | (20.3%) | (58.7%) |
| 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 net income attributable to controlling interest is as follows (in thousands): | |||
| Three months ended September 30 | |||
| 2014 | 2013 | Change $ | |
| Total profit for all segments | $ 2,978 | $ 7,205 | $ (4,227) |
| Elimination of intersegment profit | (1,212) | (678) | (534) |
| Net (income) loss attributable to non-controlling interest | 150 | (13) | 163 |
| Net income attributable to controlling interest | $ 1,916 | $ 6,514 | $ (4,598) |
| Astec Industries, Inc. | |||||
| Segment Revenues and Profits | |||||
| For the nine months ended September 30, 2014 and 2013 | |||||
| (in thousands) | |||||
| (unaudited) | |||||
|
Infrastructure Group |
Aggregate and Mining Group |
Energy Group |
Corporate | Total | |
| 2014 Revenues | 296,074 | 287,976 | 152,036 | -- | 736,086 |
| 2013 Revenues | 296,393 | 270,438 | 142,305 | -- | 709,136 |
| Change $ | (319) | 17,538 | 9,731 | -- | 26,950 |
| Change % | (0.1%) | 6.5% | 6.8% | -- | 3.8% |
| 2014 Gross Profit | 59,135 | 70,722 | 32,309 | 30 | 162,196 |
| 2014 Gross Profit % | 20.0% | 24.6% | 21.3% | -- | 22.0% |
| 2013 Gross Profit | 64,752 | 68,239 | 26,821 | (17) | 159,795 |
| 2013 Gross Profit % | 21.8% | 25.2% | 18.8% | -- | 22.5% |
| Change | (5,617) | 2,483 | 5,488 | 47 | 2,401 |
| 2014 Profit (Loss) | 21,124 | 27,065 | 7,659 | (27,578) | 28,270 |
| 2013 Profit (Loss) | 24,900 | 26,963 | 3,882 | (23,387) | 32,358 |
| Change $ | (3,776) | 102 | 3,777 | (4,191) | (4,088) |
| Change % | (15.2%) | 0.4% | 97.3% | (17.9%) | (12.6%) |
| 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): | |||
| Nine months ended September 30 | |||
| 2014 | 2013 | Change $ | |
| Total profit for all segments | $ 28,270 | $ 32,358 | $ (4,088) |
| Elimination of intersegment profit | (2,468) | (1,428) | (1,040) |
| Net (income) loss attributable to non-controlling interest | 156 | (154) | 310 |
| Net income attributable to controlling interest | $ 25,958 | $ 30,776 | $ (4,818) |
| Astec Industries, Inc. | ||||
| Backlog by Segment | ||||
| September 30, 2014 and 2013 | ||||
| (in thousands) | ||||
| (Unaudited) | ||||
|
Infrastructure Group |
Aggregate and Mining Group |
Energy Group |
Total | |
| 2014 Backlog | 135,895 | 80,978 | 78,156 | 295,029 |
| 2013 Backlog | 114,137 | 72,000 | 44,815 | 230,952 |
| Change $ | 21,758 | 8,978 | 33,341 | 64,077 |
| Change % | 19.1% | 12.5% | 74.4% | 27.7% |