Loading, Please Wait...

CST: 22/05/2019 20:38:52   

Astec Industries Reports Fourth Quarter and Full Year 2018 Results

82 Days ago

Net Sales for 2018 of $1.172 Billion; Adjusted Net Sales for 2018 of $1.246 Billion  Grew 5.9% Over 2017

Loss Per Share for 2018 of $2.64; Adjusted Earnings Per Share for 2018 of $2.92 Increased 17.3% Over 2017

Company Exits Wood Pellet Plant Business

CHATTANOOGA, Tenn., March 01, 2019 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq: ASTE) today reported results for the fourth quarter and year ended December 31, 2018.

Net sales for the fourth quarter of 2018 were $317.0 million compared to $312.4 million for the fourth quarter of 2017, a 1.5% increase. Domestic sales increased 1.1% to $248.2 million for the fourth quarter of 2018 from $245.4 million for the fourth quarter of 2017. International sales were $68.8 million for the fourth quarter of 2018 compared to $67.0 million for the fourth quarter of 2017, an increase of 2.8%.

Losses for the fourth quarter of 2018 were $47.0 million, for a loss of $2.08 per share, which includes the charges described below, compared to earnings of $10.9 million, or $0.47 per share, for the fourth quarter of 2017, which includes a $1.1 million income tax benefit from U.S. Tax Reform legislation.

Net sales for 2018 were $1.172 billion compared to $1.185 billion for 2017, a 1.1% decrease. Domestic sales decreased 1.8% to $915.8 million for 2018 from $932.3 million for 2017. International sales were $255.8 million for 2018 compared to $252.4 million for 2017, an increase of 1.3%.

Losses for 2018 were $60.4 million, for a loss of $2.64 per diluted share, which includes the charges described below, compared to earnings of $37.8 million, or $1.63 per diluted share, for 2017, which includes the aforementioned income tax benefit.  

In the fourth quarter of 2018, the Company recorded charges totaling $90.6 million resulting from a write-off related to the Hazlehurst wood pellet plant, an inventory valuation adjustment, the exit of a subsidiary business in Germany and an impairment of goodwill. The following financial information for the fourth quarters and full years ended December 31, 2018 and 2017 excludes all of the impact of wood pellet plant activity, as well as the other fourth quarter 2018 charges, on the Company’s results during those periods:

Net sales for the fourth quarter of 2018 were $317.0 million compared to $306.8 million for the fourth quarter of 2017, a 3.3% increase. Domestic sales increased 3.5% to $248.2 million for the fourth quarter of 2018 from $239.8 million for the same period of 2017.

Net income for the fourth quarter of 2018 was $14.0 million or $0.61 per diluted share, compared to net income of $13.2 million or $0.57 per diluted share for the same period of 2017, an increase in earnings per share of 7.0%.

Net sales for 2018 were $1.246 billion compared to $1.177 billion for 2017, an increase of 5.9%. Domestic sales increased 7.2% to $990.6 million for 2018 from $924.3 million for 2017.

Net income for 2018 was $67.3 million or $2.92 per diluted share, compared to net income of $57.7 million or $2.49 per diluted share for the same period in 2017, an increase in earnings per share of 17.4%.

Commenting on the quarterly and full year results, Richard J. Dorris, Interim Chief Executive Officer, stated, “We are pleased with the 17.4% growth in adjusted earnings for the full year. Our core businesses remain strong and we continue to gain positive momentum. While results in our Infrastructure Group for the fourth quarter and year reflect our decision to exit the wood pellet plant business and a decrease in international sales, we are optimistic about opportunities for this segment in the coming year. We saw a good mix of activity across commercial and private construction driving performance in our Aggregate and Mining Group both domestically and internationally for the year, while 2018 sales growth in our Energy Group was driven by improved domestic sales. While we remain focused on execution in our individual segments, we continue to make progress in our strategic sourcing initiative and anticipate it will yield positive results in our procurement operations once it is completed in the second quarter. We are also working to identify further manufacturing cost optimization opportunities and look forward to providing more details as we move forward with these projects.”

Mr. Dorris continued, “During the past year, Astec’s Board and management team have taken decisive steps to improve the Company’s financial performance and ensure capital is directed to the areas that we believe will drive the greatest value for all shareholders. We made decisions to exit the wood pellet plant business, recording a write-off of our Hazlehurst plant in the fourth quarter, and discontinued operations at our underperforming subsidiary in Germany. While these actions resulted in one-time charges being recognized in the fourth quarter, we are confident these actions have strengthened our business for the future. We remain focused on executing our strategy and growing our leadership position in the manufacturing of equipment for the infrastructure, aggregate, mining and energy industries.”

The Company’s backlog at December 31, 2018 was $345.0 million compared to $411.5 million at December 31, 2017, a decrease of $66.5 million or 16.2%. Domestic backlog decreased 22.4% to $260.7 million at December 31, 2018 from $335.9 million at December 31, 2017, reflecting a $60.2 million reduction in pellet plant related backlog. International backlog increased 11.5% to $84.2 million at December 31, 2018 from $75.6 million at December 31, 2017. Excluding pellet plant backlogs, the Company’s December 31, 2018 backlog decreased $6.3 million, or 1.5%, compared to December 31, 2017.

Consolidated financial information for the fourth quarter and year ended December 31, 2018 and additional information related to segment revenues and profits are attached as addenda to this press release.

The Company identified certain material weaknesses in its internal control over financial reporting.  As a result, the Company needs additional time to complete the compilation of information and finalization of its assessment of the effectiveness of internal control over financial reporting for its consolidated financial statements and related disclosures to be filed as part of the 2018 Form 10-K.  The Company will file a Form 12b-25 with the Securities and Exchange Commission in order to extend the due date of its 2018 Annual Report on Form 10-K for 15 days, as permitted by Rule 12b-25 under the Securities Exchange Act.

Investor Conference Call and Web Simulcast

Astec will conduct a conference call today at 10:00 A.M Eastern Time to review its fourth quarter and full year results as well as current business conditions. The number to call for this interactive teleconference is (866) 682-6100. International callers should dial (862) 298-0702.

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 Friday, March 15, 2019 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #43156. A transcript 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) the introduction of new asphalt plant models, (ii) international demand, (iii) manufacturing cost optimization, (iv) its backlog activity, and (v) the Company’s strategic sourcing initiatives. 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, 2017. 

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)    
     
  Dec-18 Dec-18    
    2018     2017      
Assets        
Current assets        
Cash and cash equivalents $   25,821   $   62,280      
Investments     1,946       1,624      
Receivables, net     133,979       119,952      
Inventories     355,944       391,379      
Prepaid expenses and other     43,301       27,734      
Total current assets     560,991       602,969      
Property and equipment, net     192,448       190,396      
Other assets     102,018       96,214      
Total assets $   855,457   $   889,579      
Liabilities and equity        
Current liabilities        
Accounts payable - trade $   70,614   $   60,417      
Other current liabilities     118,617       118,729      
Total current liabilities     189,231       179,146      
Long-term debt, less current maturities     59,709       1,575      
Non-current liabilities     21,227       22,093      
Total equity     585,290       686,765      
Total liabilities and equity $   855,457   $   889,579      
         
         
         
         
Astec Industries, Inc.    
Condensed Consolidated Statements of Operations    
(in thousands, except per share data)    
(unaudited)    
     
  Three Months Ended Twelve Months Ended
  Dec 31 Dec 31
    2018     2017     2018     2017  
Net sales $   317,005   $   312,375   $   1,171,599   $   1,184,739  
Cost of sales     318,636       249,625       1,035,833       941,610  
Gross profit (loss)     (1,631 )     62,750       135,766       243,129  
Selling, general, administrative & engineering expenses     54,732       44,756       209,127       187,592  
Restructuring and asset impairment charges     13,060       -        13,060       -   
Income (loss) from operations     (69,423 )     17,994       (86,421 )     55,537  
Interest expense     (557 )     (202 )     (1,045 )     (840 )
Other     11       702       1,783       2,725  
Income (loss) before income taxes     (69,969 )     18,494       (85,683 )     57,422  
Income taxes     (22,932 )     7,572       (25,234 )     19,627  
Net income (loss) attributable to controlling interest  $   (47,037 ) $   10,922   $   (60,449 ) $   37,795  
         
         
         
         
Earnings (loss) per Common Share        
Net income (loss) attributable to controlling interest        
  Basic $   (2.08 ) $   0.47   $   (2.64 ) $   1.64  
  Diluted $   (2.08 ) $   0.47   $   (2.64 ) $   1.63  
         
         
Weighted average common shares outstanding        
  Basic     22,582       23,033       22,902       23,025  
  Diluted     22,582       23,194       22,902       23,184  
         

 

     
Astec Industries, Inc.    
Segment Revenues and Profits (Losses)    
For the three months ended December 31, 2018 and 2017    
(in thousands)    
(unaudited)    
  Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Corporate Total    
2018 Revenues   124,930       116,064       76,011       -      317,005      
2017 Revenues   146,666       96,515       69,194       -      312,375      
Change $   (21,736)       19,549       6,817       -      4,630      
Change % (14.8%)     20.3%     9.9%       -    1.5%      
               
2018 Gross Profit (Loss)   (41,462)       30,347       9,375       109     (1,631)      
2018 Gross Profit (Loss) % (33.2%)     26.1%     12.3%       -    (0.5%)      
2017 Gross Profit   26,632       19,140       16,601       377     62,750      
2017 Gross Profit % 18.2%     19.8%     24.0%       -    20.1%      
Change   (68,094)       11,207       (7,226)       (268)     (64,381)      
               
2018 Profit (Loss)   (69,833)       10,796       (13,336)       22,015     (50,358)      
2017 Profit (Loss)   11,096       6,388       5,864       (13,297)     10,051      
Change $   (80,929)       4,408       (19,200)       35,312     (60,409)      
Change % (729.4%)     69.0%     (327.4%)     265.6%   (601.0%)      
               
               
Segment revenues are reported net of intersegment revenues.  Segment gross profit (loss) is net of profit on intersegment      
revenues.  A reconciliation of total segment profits (losses) to the Company's net income (loss) attributable to controlling interest is as follows (in thousands):  
               
    Three months ended December 31      
      2018     2017   Change $      
Total profit (loss) for all segments $   (50,358)   $   10,051   $   (60,409)        
Recapture of intersegment profit     3,263       803       2,460        
Net loss attributable to non-controlling interest     58       68       (10)        
Net income (loss) attributable to controlling interest  $   (47,037)   $   10,922   $   (57,959)        
               
               
Astec Industries, Inc.    
Segment Revenues and Profits (Losses)    
For the twelve months ended December 31, 2018 and 2017    
(in thousands)    
(unaudited)    
  Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Corporate Total    
2018 Revenues   442,289       453,164       276,146       -      1,171,599      
2017 Revenues   553,691       403,720       227,328       -      1,184,739      
Change $   (111,402)       49,444       48,818       -      (13,140)      
Change % (20.1%)     12.2%     21.5%       -    (1.1%)      
               
2018 Gross Profit (Loss)   (37,357)       112,972       59,751       400     135,766      
2018 Gross Profit (Loss) % (8.4%)     24.9%     21.6%       -    11.6%      
2017 Gross Profit   93,027       93,792       55,774       536     243,129      
2017 Gross Profit % 16.8%     23.2%     24.5%       -    20.5%      
Change   (130,384)       19,180       3,977       (136)     (107,363)      
               
2018 Profit (Loss)   (112,954)       45,464       3,070       1,586     (62,834)      
2017 Profit (Loss)   26,641       35,748       16,219       (40,963)     37,645      
Change $   (139,595)       9,716       (13,149)       42,549     (100,479)      
Change % (524.0%)     27.2%     (81.1%)     103.9%   (266.9%)      
               
               
Segment revenues are reported net of intersegment revenues.  Segment gross profit (loss) is net of profit on intersegment      
revenues.  A reconciliation of total segment profits (losses) to the Company's net income (loss) attributable to controlling interest is as follows (in thousands):  
               
    Twelve months ended December 31      
      2018     2017   Change $      
Total profit (loss) for all segments $   (62,834)   $   37,645   $   (100,479)        
Recapture (elimination) of intersegment profit     2,090       (55)       2,145        
Net loss attributable to non-controlling interest     295       205       90        
Net income (loss) attributable to controlling interest  $   (60,449)   $   37,795   $   (98,244)        
               
               
Astec Industries, Inc.      
Backlog by Segment      
December 31, 2018 and 2017      
(in thousands)      
(unaudited)      
  Infrastructure
Group
Aggregate and Mining
Group
Energy
Group
Total      
2018 Backlog   149,437       130,691       64,834       344,962        
2017 Backlog   239,495       116,987       54,987       411,469        
Change $   (90,058)       13,704       9,847       (66,507)        
Change % (37.6%)     11.7%     17.9%     (16.2%)        
               


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.

             
Q4 2018 As Reported
(GAAP)
Pellet Plant
Impairment
Inventory
Valuation
Provision
German
Subsidiary
Liquidation
Goodwill
Impairment
As Adjusted 
(Non-GAAP)
Net Sales 317,005   -   -   -   -   317,005  
Domestic Sales 248,183   -   -   -   -   248,183  
GM (1,631)   (65,706)   (10,763)   (1,106)   -   75,944  
GM% -0.5%   -   -   -   -   24.0 %  
Op Income (69,423)   (65,706)   (10,763)   (2,976)   (11,190)   21,212  
Income Tax (Benefit) Expense (1) (22,932)   (20,486)   (2,826)   (3,557)   (2,759)   6,696  
Net (Loss) Income (47,037)   (45,220)   (7,937)   581   (8,431)   13,970  
EPS (2.08)   (2.00)   (0.35)   0.03   (0.37)   0.61  
             
FYE 2018            
Net Sales 1,171,599   (74,778)   -   -   -   1,246,377  
Domestic Sales 915,814   (74,778)   -   -   -   990,592  
GM 135,766   (149,317)   (10,763)   (1,106)   -   296,952  
GM% 11.6 %   -   -   -   -   23.8 %  
Op Income (86,421)   (149,317)   (10,763)   (2,976)   (11,190)   87,825  
Income Tax (Benefit) Expense (1) (25,234)   (37,360)   (2,826)   (3,557)   (2,759)   21,268  
Net (Loss) Income (60,449)   (111,957)   (7,937)   581   (8,431)   67,295  
EPS (2.64)   (4.89)   (0.35)   0.03   (0.37)   2.92  
             
(1) Tax effect on adjustments is calculated using the applicable jurisdictional blended tax rate
 


                 
Q4 2017 As Reported
(GAAP)
  Pellet Plant
Impairment
As Adjusted 
(Non-GAAP)
       
Net Sales 312,375     5,617   306,758          
Domestic Sales 245,412     5,617   239,795          
GM 62,750     (3,452)   66,202          
GM% 20.1%     (61.5 %)   21.6%          
Op Income 17,994     (3,452)   21,446          
Income Tax (Benefit) Expense (1) 7,572     (1,216)   8,788          
Net (Loss) Income 10,923     (2,236)   13,159          
EPS 0.47     (0.10)   0.57          
                 
FYE 2017                
Net Sales 1,184,739     7,987   1,176,752          
Domestic Sales 932,294     7,987   924,307          
GM 243,129     (30,550)   273,679          
GM% 20.5%     (382.5 %)   23.3%          
Op Income 55,537     (30,550)   86,087          
Income Tax (Benefit) Expense (1) 19,627     (10,644)   30,271          
Net (Loss) Income 37,795     (19,906)   57,701          
EPS 1.63     (0.86)   2.49          
                 
(1) Tax effect on adjustments is calculated using the applicable jurisdictional blended tax rate  
   


 

Is your business listed correctly on America’s largest city directory network of 1,000 portals?