ASTE Astec Industries Inc

Astec Industries, Inc. Reports Second Quarter 2005 Results CHATTANOOGA, Tenn., July 20 /PRNewswire-FirstCall/ -- Astec Industries, Inc. (NASDAQ:ASTE) today reported results for the quarter ended June 30, 2005. Income from continuing operations for the second quarter of 2005 was $10.2 million, or $.49 per diluted share, compared with income from continuing operations of $6.3 million, or $.31 per diluted share, for the second quarter of 2004 for a 61.6% increase in income from continuing operations. As previously announced, the Company sold substantially all of the assets and liabilities of Superior Industries of Morris, Inc. (Superior) on June 30, 2004. The Company recognized a gain of $5.5 million, net of taxes of $5.0 million, on the sale of Superior in the second quarter of 2004. Superior's financial results are reported as income from discontinued operations on the statement of operations. Net income for the second quarter of 2005 was $.49 per diluted share compared to $.62 for the second quarter of 2004 which included discontinued operations of $.31 per diluted share. Net sales from continuing operations for the quarter ended June 30, 2005 were $170.8 million compared to $145.9 million for the quarter ended June 30, 2004 for an increase of 17.0%. International sales for the second quarter of 2005 were 19.4% of total revenues versus 26.1% for the same period in 2004. Net sales from continuing operations for the six months ended June 30, 2005 were $332.4 million compared to $281.7 million for the six months ended June 30, 2004 for an increase of 18%. International sales for the six months ended June 30, 2005 were 18.5% of total revenues versus 23.8% for the same period in 2004. Income from continuing operations for the six months ended June 30, 2005 was $17.0 million, or $.83 per diluted share, compared with income from continuing operations of $11.1 million, or $.55 per diluted share, for the same period in 2004. Net income for the six months ended June 30, 2005 was $17.0 million, or $.83 per diluted share, compared to net income of $18.1 million, or $.90 per diluted share, for the six months ended June 30, 2004 which included $.35 per diluted share from discontinued operations. Condensed consolidated financial statements and additional information related to segment revenues and profits are attached to this press release. Astec's backlog for continuing operations at June 30, 2005, was $88.0 million compared with $68.7 million at June 30, 2004, for a 28.2% increase. Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "We are very pleased with the increase in our sales and earnings in the second quarter of 2005 versus 2004. Our balance sheet continues to strengthen." Comments Concerning The Second Quarter of 2005: The following discussion is a compilation of "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions and other factors, some of which are beyond the Company's control, that could cause actual results to differ materially from those anticipated as of the date of this Press Release. Dr. J. Don Brock also stated, "We are disappointed in the delay of the reauthorization of TEA-21 by Congress. Fluctuating oil prices continue to impact the cost of asphalt for our customers. Steel price increases seem to have stabilized and the cost increases in purchased components in the first quarter have moderated. We have a number of initiatives in our subsidiaries that are designed to improve gross margins. We are pleased with current backlog levels and order activity." Investor Conference Call and Web Simulcast Astec will conduct a conference call on July 20, 2005, at 10:00 A.M. Eastern Time to review its second quarter results as well as current business conditions. The number to call for this interactive teleconference is (800) 938-0653. International callers should dial (973) 935-2408. 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: http://www.astecindustries.com/investors, Conference Calls Section. An archived webcast will be available for 90 days at http://www.astecindustries.com/. A replay of the conference call will be available through midnight on Wednesday, July 27, 2005 by dialing (877) 519-4471, or (973) 341-3080 for international callers - Confirmation #6252895. A transcription of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within 5 days after the call. Astec Industries, Inc. is a manufacturer of specialized equipment for building and restoring the world's infrastructure. Astec's manufacturing operations are divided into four business segments: aggregate processing and mining equipment; asphalt production equipment; mobile asphalt paving equipment; and underground boring, directional drilling and trenching equipment. 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 Company's financial performance for the future generally, the Company's liquidity and strength of its balance sheet, the impact of fluctuating oil prices on the cost of asphalt for our customers; the initiatives in the Company's subsidiaries; the potential decrease in gross margins from the continued steel price increases and the resulting cost increases in purchased components, and the timing of any highway bill. 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, downturns in the general economy or the commercial construction industry, increases in the price of oil or decreases in the availability of oil, increase in the price of raw materials, a failure to comply with covenants in the Company's amended credit agreement, contingent liability for certain customer debt, rising interest rates, rising steel and steel component pricing, delayed or decreased funding for highway construction and maintenance, the timing of large contracts, production capacity, general business conditions in the industry, demand for the Company's products, seasonality and cyclicality in operating results, seasonality of sales volumes, competitive activity 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, 2004. Astec Industries, Inc. and Subsidiaries Segment Revenues and Profits For the three months ended June 30, 2005 and 2004 (dollars in thousands) (Unaudited) Aggregate Mobile and Asphalt Asphalt Mining Paving Underground Group Group* Group Group All Others Total 2005 Revenues 47,789 65,170 34,613 23,242 - 170,814 2004 Revenues 44,325 56,975 26,519 18,073 45 145,937 Change $ 3,464 8,195 8,094 5,169 (45) 24,877 Change % 7.8% 14.4% 30.5% 28.6% (100.0%) 17.0% 2005 Gross Profit 11,186 16,074 7,666 4,391 (24) 39,293 2005 Gross Profit % 23.4% 24.7% 22.1% 18.9% 0.0% 23.0% 2004 Gross Profit 9,356 13,148 6,029 2,930 (280) 31,183 2004 Gross Profit % 21.1% 23.1% 22.7% 16.2% (622.2%) 21.4% Change 1,830 2,926 1,637 1,461 256 8,110 2005 Profit (Loss) 6,383 7,501 3,663 748 (8,090) 10,205 2004 Profit (Loss) 4,966 6,145 2,780 553 (8,046) 6,398 Change $ 1,417 1,356 883 195 (44) 3,807 Change % 28.5% 22.1% 31.8% 35.3% (0.5%) 59.5% * The segment data for 2004 has been adjusted to reflect the sale of Superior Industries of Morris, Inc. Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment revenues. A reconciliation of total segment profits (losses) to the Company's consolidated net income is as follows: For the three months ended June 30 2005 2004 Total profit for all segments 10,205 6,398 Minority interest earnings of subsidiary (37) (36) Recapture (elimination) of intersegment profit 53 (36) Consolidated income from continuing operations 10,221 6,326 Income from discontinued operations, net of tax - 769 Gain on sale of discontinued operations, net of tax - 5,507 Consolidated net income 10,221 12,602 Astec Industries, Inc. and Subsidiaries Segment Revenues and Profits For the six months ended June 30, 2005 and 2004 (dollars in thousands) (Unaudited) Aggregate Mobile and Asphalt Asphalt Mining Paving Underground Group Group* Group Group All Others Total 2005 Revenues 101,324 123,014 63,420 44,690 - 332,448 2004 Revenues 87,588 107,332 50,650 36,050 45 281,665 Change $ 13,736 15,682 12,770 8,640 (45) 50,783 Change % 15.7% 14.6% 25.2% 24.0% (100.0%) 18.0% 2005 Gross Profit 21,843 29,674 14,682 8,165 (39) 74,325 2005 Gross Profit % 21.6% 24.1% 23.2% 18.3% 0.0% 22.4% 2004 Gross Profit 18,009 25,319 12,159 5,052 (524) 60,015 2004 Gross Profit % 20.6% 23.6% 24.0% 14.0% (1164.4%) 21.3% Change 3,834 4,355 2,523 3,113 485 14,310 2005 Profit (Loss) 12,039 12,686 7,093 904 (15,639) 17,083 2004 Profit (Loss) 9,262 11,276 5,508 (83) (14,682) 11,281 Change $ 2,777 1,410 1,585 987 (957) 5,802 Change % 30.0% 12.5% 28.8% 1189.2% (6.5%) 51.4% * The segment data for 2004 has been adjusted to reflect the sale of Superior Industries of Morris, Inc. Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment revenues. A reconciliation of total segment profits (losses) to the Company's consolidated net income is as follows: For the six months ended June 30 2005 2004 Total profit for all segments 17,083 11,281 Minority interest in earnings of subsidiary (59) (46) Elimination of intersegment profit (11) (106) Consolidated income from continuing operations 17,013 11,129 Income from discontinued operations, net of tax - 1,419 Gain on sale of discontinued operations, net of tax - 5,507 Consolidated net income 17,013 18,055 Astec Industries, Inc. and Subsidiaries Backlog by Segment June 30, 2005 and 2004 (dollars in thousands) (Unaudited) Aggregate Mobile and Asphalt Asphalt Mining Paving Underground Group Group* Group Group All Others Total 2005 Backlog 29,829 45,428 6,300 6,476 - 88,033 2004 Backlog 14,158 36,565 5,457 12,498 - 68,678 Change $ 15,671 8,863 843 (6,022) - 19,355 Change % 110.7% 24.2% 15.4% (48.2%) - 28.2% * The segment data for 2004 has been adjusted to reflect the sale of Superior Industries of Morris, Inc. Astec Industries, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) (unaudited) June 30 June 30 2005 2004 Assets Current Assets Cash and cash equivalents $9,833 $17,171 Receivables, net 67,865 63,826 Inventories 124,726 103,440 Prepaid expenses and other 15,114 9,114 Total current assets 217,538 193,551 Property and equipment, net 97,937 94,417 Other assets 28,532 27,812 Total assets $344,007 $315,780 Liabilities and shareholders' equity Current liabilities Revolving credit loan $3,347 $- Notes payable - 223 Current maturities of long-term debt 3,310 6,857 Accounts payable - trade 38,010 35,299 Other accrued liabilities 50,808 47,637 Total current liabilities 95,475 90,016 Long-term debt, less current maturities 23,952 30,602 Other non-current liabilities 14,681 7,850 Minority interest in consolidated subsidiary 519 698 Total shareholders' equity 209,380 186,614 Total liabilities and shareholders' equity $344,007 $315,780 Certain amounts for 2004 have been reclassified to conform with the 2005 presentation. Astec Industries, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands) (unaudited) Three Months Ended Six Months Ended June 30 June 30 2005 2004 2005 2004 Net sales $170,814 $145,937 $332,448 $281,665 Cost of sales 131,521 114,754 258,123 221,650 Gross profit 39,293 31,183 74,325 60,015 Selling, general, administrative & engineering expenses 22,928 19,927 46,177 39,803 Income from operations 16,365 11,256 28,148 20,212 Interest expense 701 1,072 1,597 2,151 Other income, net 91 193 124 128 Income from continuing operations before income taxes 15,755 10,377 26,675 18,189 Income taxes on continuing operations 5,497 4,015 9,603 7,014 Minority interest in earnings 37 36 59 46 Income from continuing operations 10,221 6,326 17,013 11,129 Income from discontinued operations - 1,252 - 2,307 Income taxes on discontinued operations - (483) - (888) Gain on disposal of discontinued operations (net of tax of $4,970) - 5,507 - 5,507 Net income $10,221 $12,602 $17,013 $18,055 Earnings per Common Share Income from continuing operations: Basic $0.51 $0.32 $0.85 $0.57 Diluted $0.49 $0.31 $0.83 $0.55 Income from discontinued operations: Basic $- $0.32 $- $0.35 Diluted $- $0.31 $- $0.35 Net income: Basic $0.51 $0.64 $0.85 $0.92 Diluted $0.49 $0.62 $0.83 $0.90 Weighted average common shares outstanding Basic 20,008,425 19,691,359 19,954,422 19,666,055 Diluted 20,735,201 20,179,112 20,575,752 20,057,591 Certain amounts for 2004 have been reclassified to conform with the 2005 presentation. DATASOURCE: Astec Industries, Inc. CONTACT: J. Don Brock, Chairman of the Board & C.E.O., +1-423-867-4210, or Fax, +1-423-867-4127, or , or F. McKamy Hall, Vice President and Chief Financial Officer, +1-423-899-5898, or Fax, +1-423-899-4456, or , or Stephen C. Anderson, Director of Investor Relations, +1-423-899-5898, or Fax, +1-423-899-4456, or , all of Astec Industries, Inc. Web site: http://www.astecindustries.com/ http://www.astecindustries.com/investors

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