ASTE Astec Industries Inc

CHATTANOOGA, Tenn., Oct. 22 /PRNewswire-FirstCall/ -- Astec Industries, Inc. (NASDAQ:ASTE) today reported results for their third quarter ended September 30, 2007. Revenues for the third quarter of 2007 were $206.2 million compared with $171.5 million for the third quarter of 2006 for a 20.2% increase. Domestic sales accounted for $131.7 million during the third quarter of 2007 compared to $116.1 million during the third quarter of 2006. International sales accounted for $74.5 million of revenues during the third quarter of 2007 compared to $55.4 million during the third quarter of 2006. The Company reported net income of $11.6 million for the third quarter of 2007 compared to net income of $10.0 million for the third quarter of 2006 for an increase of 16.0%. Net income for the third quarter of 2007 was $0.51 per diluted share compared to $0.46 per diluted share for the third quarter of 2006 for a 10.9% increase. The Company's backlog at September 30, 2007 was $239.9 million compared to $131.2 million at September 30, 2006 for an 82.9% increase. Consolidated financial statements for the third quarter ended September 30, 2007 and additional information related to segment revenues and profits are attached as addenda to this press release. Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "We are pleased with the 2007 third quarter sales increase of 20.2% compared to the third quarter of 2006. The gross margin for the quarter was impacted by the shipment of some new models of equipment. S,G,A&E expenses were impacted by an increase in the Supplemental Executive Retirement Plan expense due to the increase in the value of our stock. We also increased our costs related to salaries and benefits by hiring additional staff in order to generate and support increased sales volumes. We are excited about the prospects for the fourth quarter and look forward to finishing another strong year." "We believe that our increase in sales reflects a strong economy, an overwhelming need for road improvements resulting in state initiatives to increase funding, market acceptance of new products, improving market share, increasing sales of recycling equipment and strong international sales. The international demand has steadily increased throughout 2007 which should be indicative of strong international sales for the fourth quarter of 2007 compared to 2006." Investor Conference Call and Web Simulcast Astec will conduct a conference call on October 22, 2007, at 10:00 A.M. Eastern Time to review its third 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/www/docs/100, 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, October 29, 2007 by dialing (877) 660-6853, or (201) 612-7415 for international callers, Account #286, Conference ID# 258614. A transcription of the conference call will be made available under the Investor Relation 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 fourth quarter and future generally, the ability to maintain or improve margins, the economy, the need for road improvements, the state initiatives to increase funding, the market's acceptance of new products, the Company's improving market share, the increase in sales of recycling equipment and international sales. 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, cyclical nature of the commercial, construction industry and the customization of the equipment the Company sells, increases in the price of oil or decreases in the availability of oil, increases in the price of raw materials, a failure to comply with covenants in the Company's 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, managing and expanding in international markets, the timing of large contracts, production capacity, general business conditions in the industry, demand for the Company's products, 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, 2006. Astec Industries, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands) (Unaudited) Sept 30 Sept 30 2007 2006 Assets Current assets Cash and cash equivalents $48,164 $34,299 Receivables, net 83,324 68,720 Inventories 201,982 151,437 Prepaid expenses and other 14,025 11,718 Total current assets 347,495 266,174 Property and equipment, net 137,312 109,401 Other assets 42,689 25,273 Total assets $527,496 $400,848 Liabilities and shareholders' equity Current liabilities Accounts payable - trade $55,303 $39,343 Other accrued liabilities 83,511 58,408 Total current liabilities 138,814 97,751 Other non-current liabilities 22,646 15,064 Minority interest in consolidated subsidiary 833 635 Total shareholders' equity 365,203 287,398 Total liabilities and shareholders' equity $527,496 $400,848 Astec Industries, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands) (Unaudited) Three Months Ended Nine Months Ended Sept 30 Sept 30 2007 2006 2007 2006 Net sales $206,239 $171,470 $648,216 $548,455 Cost of sales 157,678 130,427 486,339 414,835 Gross profit 48,561 41,043 161,877 133,620 Selling, general, administrative & engineering expenses 31,926 25,270 92,774 80,237 Income from operations 16,635 15,773 69,103 53,383 Interest expense 149 421 765 1,268 Other income, net of expenses 638 519 2,038 921 Income before income taxes and minority interest 17,124 15,871 70,376 53,036 Income taxes 5,482 5,807 24,812 19,666 Minority interest in earnings 68 38 151 82 Net income $11,574 $10,026 $45,413 $33,288 Earnings per Common Share Net income Basic $0.52 $0.47 $2.08 $1.56 Diluted $0.51 $0.46 $2.03 $1.52 Weighted average common shares outstanding Basic 22,116,275 21,520,512 21,881,565 21,383,889 Diluted 22,581,075 21,927,051 22,393,677 21,960,133 Certain amounts for 2006 have been reclassified to conform with the 2007 presentation. Astec Industries, Inc. and Subsidiaries Segment Revenues and Profits For the three months ended September 30, 2007 and 2006 (in thousands) (Unaudited) Aggregate Mobile and Asphalt Under- Asphalt Mining Paving ground All Group Group Group Group Others Total 2007 Revenues 51,860 81,801 33,323 28,335 10,920 206,239 2006 Revenues 45,076 69,083 28,961 28,350 - 171,470 Change $ 6,784 12,718 4,362 (15) 10,920 34,769 Change % 15.1% 18.4% 15.1% (0.1%) - 20.3% 2007 Gross Profit 12,375 18,700 8,096 7,498 1,892 48,561 2007 Gross Profit % 23.9% 22.9% 24.3% 26.5% 17.3% 23.5% 2006 Gross Profit (Loss) 11,164 16,664 5,996 7,238 (19) 41,043 2006 Gross Profit % 24.8% 24.1% 20.7% 25.5% - 23.9% Change 1,211 2,036 2,100 260 1,911 7,518 2007 Profit 6,656 8,154 3,542 3,223 (9,794) 11,781 2006 Profit 5,939 7,562 2,029 2,889 (8,188) 10,231 Change $ 717 592 1,513 334 (1,606) 1,550 Change % 12.1% 7.8% 74.6% 11.6% (19.6%) 15.2% Certain amounts for 2006 have been reclassified to conform with the 2007 presentation. 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 is as follows: For the three months ended September 30 2007 2006 Total profit for all segments $11,781 $10,231 Minority interest earnings of subsidiary (68) (38) Elimination of intersegment profit (139) (167) Consolidated net income $11,574 $10,026 Astec Industries, Inc. and Subsidiaries Segment Revenues and Profits For the nine months ended September 30, 2007 and 2006 (in thousands) (Unaudited) Aggregate Mobile and Asphalt Under- Asphalt Mining Paving ground All Group Group Group Group Others Total 2007 Revenues 183,507 253,138 117,662 82,988 10,921 648,216 2006 Revenues 149,026 217,942 103,199 78,288 - 548,455 Change $ 34,481 35,196 14,463 4,700 10,921 99,761 Change % 23.1% 16.1% 14.0% 6.0% - 18.2% 2007 Gross Profit 48,358 62,444 28,999 20,209 1,867 161,877 2007 Gross Profit % 26.4% 24.7% 24.6% 24.4% 17.1% 25.0% 2006 Gross Profit (Loss) 37,997 53,223 24,659 17,783 (42) 133,620 2006 Gross Profit % 25.5% 24.4% 23.9% 22.7% - 24.4% Change 10,361 9,221 4,340 2,426 1,909 28,257 2007 Profit 29,827 30,859 14,768 6,515 (36,534) 45,435 2006 Profit 20,722 24,729 12,125 5,328 (29,347) 33,557 Change $ 9,105 6,130 2,643 1,187 (7,187) 11,878 Change % 43.9% 24.8% 21.8% 22.3% (24.5%) 35.4% Certain amounts for 2006 have been reclassified to conform with the 2007 presentation. 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 consolidated net income is as follows: For the nine months ended September 30 2007 2006 Total profit for all segments $45,435 $33,557 Minority interest in earnings of subsidiary (151) (82) Recapture (elimination) of intersegment profit 129 (187) Consolidated net income $45,413 $33,288 Astec Industries, Inc. and Subsidiaries Backlog by Segment September 30, 2007 and 2006 (in thousands) (Unaudited) Aggregate Mobile and Asphalt Under- Asphalt Mining Paving ground All Group Group Group Group Others Total 2007 Backlog 110,234 96,363 2,779 21,638 8,892 239,906 2006 Backlog 45,872 58,759 3,569 17,079 5,912 131,191 Change $ 64,362 37,604 (790) 4,559 2,980 108,715 Change % 140.3% 64.0% (22.1%) 26.7% 50.4% 82.9% DATASOURCE: Astec Industries, Inc. CONTACT: J. Don Brock, Chairman of the Board and C.E.O., +1-423-867-4210, +1-423-867-4127 (fax), , or F. McKamy Hall, Vice President and Chief Financial Officer, +1-423-899-5898, +1-423-899-4456 (fax), , or Stephen C. Anderson, Secretary - Director of Investor Relations, +1-423-899-5898, +1-423-899-4456 (fax), , all of Astec Industries, Inc. Web site: http://www.astecindustries.com/

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