ASTE Astec Industries Inc

CHATTANOOGA, Tenn., July 24 /PRNewswire-FirstCall/ -- Astec Industries, Inc. (NASDAQ:ASTE) today reported results for the quarter and six months ended June 30, 2006. Net income for the second quarter of 2006 was $12.4 million compared with net income of $10.2 million for the second quarter of 2005 for a 21.0% increase. Earnings per diluted share for the second quarter of 2006 was $0.56 compared to $0.49 per diluted share for the second quarter of 2005. Net sales for the quarter ended June 30, 2006 were $191.3 million compared to $170.8 million for the quarter ended June 30, 2005 for an increase of 12.0%. International sales for the second quarter of 2006 were 28.0% of net sales versus 19.4% for the same period in 2005. Net sales for the six months ended June 30, 2006 were $377.0 million compared to $332.4 million for the six months ended June 30, 2005, for an increase of 13.4%. International sales for the six months ended June 30, 2006 were 23.4% of net sales versus 18.5% for the same period in 2005. Net income for the six months ended June 30, 2006 was $23.3 million compared with net income of $17.0 million for the same period in 2005, for a 36.7% increase. Earnings per diluted share for the six months ended June 2006 was $1.06 compared to $0.83 per diluted share for the same period in 2005. The Company's backlog at June 30, 2006, was $121.7 million compared with $88.0 million at June 30, 2005, for a 38.2% increase. Consolidated financial statements for the quarter ended June 30, 2006 and additional information related to segment sales and profits are attached as addenda to this press release. Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "As our attached segment analysis presents, we have increases in all segments in net sales, gross profit percentage, and profits. These results would have been even better but for certain negative events occurring at the end of the quarter that were beyond our control. Backlog is up 38.2% compared to this period last year. The gross profit percentage improved 180 basis points over the same quarter of 2005 and 50 basis points over the first quarter of 2006. Parts sales were up 19.9%. Net income for the second quarter of 2006 over the second quarter of 2005 was up 21.0% and year-to-date net income compared to the same period in 2005 was up 36.7%." Comments Concerning The Second Quarter of 2006: 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. Investor Conference Call and Web Simulcast Astec will conduct a conference call on July 24, 2006, 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 (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: 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 Monday, July 31, 2006 by dialing (877) 660-6853, or (201) 612-7415 for international callers - confirmation #208883. A transcription of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within five business 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 second quarter and future generally. 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, 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, 2005. Astec Industries, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) (unaudited) June 30 June 30 2006 2005 Assets Current Assets Cash and cash equivalents $22,015 $9,833 Receivables, net 79,474 67,865 Inventories 151,059 124,726 Prepaid expenses and other 11,854 15,114 Total current assets 264,402 217,538 Property and equipment, net 105,183 97,937 Other assets 24,884 28,532 Total assets $394,469 $344,007 Liabilities and shareholders' equity Current liabilities Revolving credit loan $- $3,347 Current maturities of long-term debt - 3,310 Accounts payable 43,329 38,010 Other accrued liabilities 57,230 50,808 Total current liabilities 100,559 95,475 Long-term debt, less current maturities - 23,952 Other non-current liabilities 15,759 14,681 Minority interest in consolidated subsidiary 559 519 Total shareholders' equity 277,592 209,380 Total liabilities and shareholders' equity $394,469 $344,007 Astec Industries, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands) (unaudited) Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 Net sales $191,262 $170,814 $376,986 $332,448 Cost of sales 143,859 131,521 284,443 258,123 Gross profit 47,403 39,293 92,543 74,325 Selling, general, administrative & engineering expenses 27,254 22,650 55,012 45,621 Income from operations 20,149 16,643 37,531 28,704 Interest expense 417 984 847 2,164 Other income, net of expenses 187 96 482 135 Income before income taxes and minority interest 19,919 15,755 37,166 26,675 Income taxes 7,512 5,497 13,859 9,603 Minority interest in earnings 42 37 45 59 Net Income $12,365 $10,221 $23,262 $17,013 Earnings per Common Share Net Income Basic $0.58 $0.51 $1.09 $0.85 Diluted $0.56 $0.49 $1.06 $0.83 Weighted average common shares outstanding Basic 21,424,731 20,008,425 21,314,446 19,954,422 Diluted 22,044,210 20,735,201 21,975,519 20,575,752 Certain amounts for 2005 have been reclassified to conform with the 2006 presentation. Astec Industries, Inc. and Subsidiaries Segment Sales and Profits For the three months ended June 30, 2006 and 2005 (dollars in thousands) (Unaudited) Aggregate Mobile and Asphalt Asphalt Mining Paving Underground All Group Group Group Group Others Total 2006 Net Sales 48,218 77,598 37,884 27,562 - 191,262 2005 Net Sales 47,789 65,170 34,613 23,242 - 170,814 Change $ 429 12,428 3,271 4,320 - 20,448 Change % 0.9% 19.1% 9.5% 18.6% - 12.0% 2006 Gross Profit 12,259 19,394 9,398 6,267 85 47,403 2006 Gross Profit % 25.4% 25.0% 24.8% 22.7% - 24.8% 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% - 23.0% Change 1,073 3,320 1,732 1,876 109 8,110 2006 Profit (Loss) 6,491 9,184 5,164 2,137 (10,734) 12,242 2005 Profit (Loss) 6,383 7,501 3,663 748 (8,090) 10,205 Change $ 108 1,683 1,501 1,389 (2,644) 2,037 Change % 1.7% 22.4% 41.0% 185.7% (32.7%) 20.0% Segment sales are reported net of intersegment sales. Segment gross profit is net of profit on intersegment sales. A reconciliation of total segment profits to the Company's consolidated net income is as follows: For the three months ended June 30 2006 2005 Total profit for all segments 12,242 10,205 Minority interest earnings of subsidiary (42) (37) Recapture of intersegment profit 165 53 Net Income 12,365 10,221 Astec Industries, Inc. and Subsidiaries Segment Sales and Profits For the six months ended June 30, 2006 and 2005 (dollars in thousands) (Unaudited) Aggregate Mobile and Asphalt Asphalt Mining Paving Underground All Group Group Group Group Others Total 2006 Net Sales 103,950 148,859 74,237 49,940 - 376,986 2005 Net Sales 101,324 123,014 63,420 44,690 - 332,448 Change $ 2,626 25,845 10,817 5,250 - 44,538 Change % 2.6% 21.0% 17.1% 11.7% - 13.4% 2006 Gross Profit 26,821 36,604 18,651 10,487 (21) 92,542 2006 Gross Profit % 25.8% 24.6% 25.1% 21.0% - 24.5% 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% - 22.4% Change 4,978 6,930 3,969 2,322 18 18,217 2006 Profit (Loss) 14,783 17,166 10,096 2,438 (21,156) 23,327 2005 Profit (Loss) 12,039 12,686 7,093 904 (15,639) 17,083 Change $ 2,744 4,480 3,003 1,534 (5,517) 6,244 Change % 22.8% 35.3% 42.3% 169.7% (35.3%) 36.6% Segment sales are reported net of intersegment sales. Segment gross profit is net of profit on intersegment sales. A reconciliation of total segment profits to the Company's consolidated net income is as follows: For the six months ended June 30 2006 2005 Total profit for all segments 23,327 17,083 Minority interest in earnings of subsidiary (45) (59) Elimination of intersegment profit (20) (11) Net Income 23,262 17,013 Astec Industries, Inc. and Subsidiaries Backlog by Segment June 30, 2006 and 2005 (dollars in thousands) (Unaudited) Aggregate Mobile and Asphalt Asphalt Mining Paving Underground All Group Group Group Group Others Total 2006 Backlog 40,772 63,926 2,216 14,736 - 121,650 2005 Backlog 29,829 45,428 6,300 6,476 - 88,033 Change $ 10,943 18,498 (4,084) 8,260 - 33,617 Change % 36.7% 40.7% (64.8%) 127.5% - 38.2% 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/

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