ASTE Astec Industries Inc

CHATTANOOGA, Tenn., Feb. 24 /PRNewswire-FirstCall/ -- Astec Industries, Inc. (NASDAQ:ASTE) today reported results for the fourth quarter and for the year ended December 31, 2008. Revenues for 2008 were $974 million and net income for 2008 was $63 million. Net income was $2.80 per diluted share for 2008 compared to $2.53 per diluted share for 2007, for an increase of $0.27, or 11% per diluted share. Revenues for 2008 were $974 million compared with $869 million for 2007, for an increase of 12%. Domestic sales were $621 million for 2008, or 64% of 2008 revenues, compared to domestic sales of $591 million for 2007, or 68% of 2007 revenues. International sales were $353 million for 2008, a 27% increase over 2007, or 36% of 2008 revenues, compared to international sales of $278 million for 2007, or 32% of 2007 revenues. Gross margins for 2008 compared to 2007 decreased 10 basis points. The Company reported net income of $63 million, or $2.80 per diluted share, for 2008 compared with a net income of $57 million, or $2.53 per diluted share for 2007, resulting in an 11% increase in diluted earnings per share. Income from operations increased 6% from $87 million in 2007 to $92 million in 2008. Revenues for the fourth quarter of 2008 were $195 million compared with $221 million for the fourth quarter of 2007, for a decrease of 12%. Domestic sales were $130 million for the fourth quarter of 2008, or 67% of 2008 fourth quarter revenues, compared to domestic sales of $136 million for the fourth quarter of 2007, or 62% of 2007 fourth quarter revenues. International sales were $65 million for the fourth quarter of 2008, or 33% of 2008 fourth quarter revenues, compared to international sales of $85 million for the fourth quarter of 2007, or 38% of 2007 fourth quarter revenues. Other income in the fourth quarter was primarily the gain on sale of investments. The Company reported net income of $9 million, or $0.38 per diluted share, for the fourth quarter of 2008 compared with net income of $11 million, or $0.50 per diluted share, for the fourth quarter of 2007, resulting in a 24% decrease in diluted earnings per share. Consolidated financial statements for the fourth quarter and year ended December 31, 2008 and additional information related to segment revenues, profits and backlogs are attached as addenda to this press release. The Company's backlog at December 31, 2008 was $193 million compared to $281 million at December 31, 2007, for an $88 million decrease or 31%. The international backlog at December 31, 2008 was $88 million compared to $89 million at the end of 2007. The domestic backlog at December 31, 2008 was $105 million compared to $192 million at the end of 2007, a decrease of 45%. The aggregate segment accounted for 52% of the domestic backlog decrease and the asphalt segment accounted for 40% of the domestic backlog decrease. We believe there were several reasons for the reduced backlog, including the general downturn in economic conditions, and uncertainty regarding the proposed stimulus package and its effect on the rebuilding of the country's infrastructure. Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "We are pleased with our 2008 results. During the last three months of the year, we saw the market go from optimistic yet cautious to completely pessimistic and frozen. The Company's sales grew 20% in the first nine months, but the fourth quarter slowdown only allowed us to finish the year with 12% sales growth. The credit crisis that started in September practically stopped investment and spending worldwide, slowing many of our businesses almost to a creep. Those businesses with strong backlogs were able to continue operating at reasonable levels but those that typically do not have very strong backlogs were forced to slow production dramatically and lay off personnel. During the fourth quarter, the dollar strengthened against other currencies impacting the international markets." "During the year, we acquired Dillman Equipment Company of Prairie du Chien, Wisconsin. Dillman is a well respected manufacturer of asphalt plants and gives Astec, Inc. a third asphalt plant manufacturing facility with experienced personnel. It also adds an additional range of products to the Astec asphalt plant offering. We started Astec Australia, which acquired most of the assets of Q-Pave Pty Ltd, which had served as our dealer in Australia for Astec, Roadtec, Heatec, CEI Enterprises, Astec Underground and Carlson Paving Products. We hope this distribution will continue to grow by adding other products from the Astec family of companies. Astec Australia adds value to the products by providing turn-key installations, after sales service, and parts distribution. The acquisitions did not have a significant effect upon the fourth quarter or year." "We believe many states have delayed finalizing highway improvement projects in anticipation of receiving stimulus funds dedicated to infrastructure. The stimulus legislation will require that approximately 50% of the funds be placed under contract within 120 days of adoption. This has encouraged states to delay awarding of highway bids so they can obtain their complete share of the stimulus funds. This has led to a very slow start of the year and will make a very difficult first quarter. We anticipate that volumes for the balance of the year will improve as contractors put their equipment back to work and order additional equipment for the expected higher volume of work. We anticipate the first beneficiaries will be our Asphalt and Mobile Asphalt Paving Groups that build asphalt plants, recycling equipment, and paving equipment." Dr. Brock continued, "The Company enters 2009 with a very strong balance sheet and little debt. The debt that we have is classified as current and we will focus on asset management to minimize or eliminate the debt. Our current bank agreement extends through May, 2011. At December 31, our credit line availability was $86 million. We are positioned to face the difficult market and to take advantage of available opportunities." Investor Conference Call and Web Simulcast Astec will conduct a conference call on February 24, 2009, at 10:00 a.m. EST to review its fourth quarter and fiscal 2008 financial results as well as its near term general outlook for 2009. 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 at: http://www.astecindustries.com/www/docs/100. 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 Tuesday, March 3, 2009, by dialing (877) 660-6853 or (201) 612-7415 for international callers; Account #: 286; Conference ID #: 313683. 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. We also have a company engaged in the wood grinding and processing industry. 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 2009, the effects on the Company from its backlog, the effects of the economic downturn, stimulus package and credit crisis, and the effects of our recent acquisitions. 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, future downturns in the economy, rising oil and liquid asphalt prices, rising steel prices, a failure to comply in the future with covenants in the Company's credit facility or to obtain waivers thereof, rising interest rates, decreased funding for highway projects, 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 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, 2007 and the Company's quarterly reports on Forms 10-Q for the quarters ended March 31, June 30 and September 30, 2008. The Company plans to file its Form 10-K timely by March 2, 2009. Astec Industries, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) December 31 December 31 2008 2007 Assets Current assets Cash and cash equivalents $9,674 $34,636 Receivables, net 75,161 87,487 Inventories 285,817 210,819 Prepaid expenses and other 24,447 15,790 Total current assets 395,099 348,732 Property and equipment, net 169,130 141,528 Other assets 48,583 52,310 Total assets $612,812 $542,570 Liabilities and shareholders' equity Current liabilities Revolving credit loan $3,427 $- Accounts payable 51,053 54,840 Other current liabilities 89,356 89,054 Total current liabilities 143,836 143,894 Other non-current liabilities 28,942 21,204 Minority interest 808 883 Total shareholders' equity 439,226 376,589 Total liabilities and shareholders' equity $612,812 $542,570 Astec Industries, Inc. Consolidated Statements of Operations (In thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31 December 31 2008 2007 2008 2007 Net sales $195,482 $220,810 $973,700 $869,025 Cost of sales 152,936 172,909 739,842 659,247 Gross profit 42,546 47,901 233,858 209,778 Selling, general, administrative & engineering expenses 34,904 30,276 141,542 123,050 Income from operations 7,642 17,625 92,316 86,728 Interest expense 323 88 851 853 Other income, net of expenses 5,497 493 6,597 2,531 Income before income taxes and minority interest 12,816 18,030 98,062 88,406 Income taxes 4,174 6,586 34,767 31,398 Minority interest 67 60 167 211 Net income $8,575 $11,384 $63,128 $56,797 Earnings per Common Share Net income Basic $0.38 $0.51 $2.83 $2.59 Diluted $0.38 $0.50 $2.80 $2.53 Weighted average common shares outstanding Basic 22,339,477 22,224,429 22,287,554 21,967,985 Diluted 22,557,181 22,595,714 22,585,775 22,444,866 Astec Industries, Inc. Segment Revenues and Profits For the three months ended December 31, 2008 and 2007 (in thousands) (Unaudited) Aggregate and Mobile Asphalt Asphalt Group Mining Group Paving Group 2008 Revenues 56,764 76,598 20,512 2007 Revenues 56,722 85,045 28,827 Change $ 42 (8,447) (8,315) Change % 0.1% (9.9%) (28.8%) 2008 Gross Profit 12,833 16,929 3,130 2008 Gross Profit % 22.6% 22.1% 15.3% 2007 Gross Profit 13,172 18,853 7,261 2007 Gross Profit % 23.2% 22.2% 25.2% Change (339) (1,924) (4,131) 2008 Profit (Loss) 6,801 4,090 (943) 2007 Profit (Loss) 7,881 8,033 3,117 Change $ (1,080) (3,943) (4,060) Change % (13.7%) (49.1%) (130.3%) Underground Group All Others Total 2008 Revenues 25,855 15,753 195,482 2007 Revenues 31,390 18,826 220,810 Change $ (5,535) (3,073) (25,328) Change % (17.6%) (16.3%) (11.5%) 2008 Gross Profit 5,407 4,247 42,546 2008 Gross Profit % 20.9% 27.0% 21.8% 2007 Gross Profit 5,461 3,154 47,901 2007 Gross Profit % 17.4% 16.8% 21.7% Change (54) 1,093 (5,355) 2008 Profit (Loss) 539 (2,430) 8,057 2007 Profit (Loss) 833 (8,508) 11,356 Change $ (294) 6,078 (3,299) Change % (35.3%) 71.4% (29.1%) 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 three months ended December 31 2008 2007 Total profit for all segments $8,057 $11,356 Minority interest (67) (60) Elimination of intersegment profit 585 88 Consolidated net income $8,575 $11,384 Astec Industries, Inc. Segment Revenues and Profits For the twelve months ended December 31, 2008 and 2007 (in thousands) (Unaudited) Aggregate and Mobile Asphalt Asphalt Group Mining Group Paving Group 2008 Revenues 257,336 350,350 150,692 2007 Revenues 240,229 338,183 146,489 Change $ 17,107 12,167 4,203 Change % 7.1% 3.6% 2.9% 2008 Gross Profit 67,485 83,016 35,826 2008 Gross Profit % 26.2% 23.7% 23.8% 2007 Gross Profit 61,530 81,297 36,260 2007 Gross Profit % 25.6% 24.0% 24.8% Change 5,955 1,719 (434) 2008 Profit (Loss) 40,765 37,032 15,087 2007 Profit (Loss) 37,707 38,892 17,885 Change $ 3,058 (1,860) (2,798) Change % 8.1% (4.8%) (15.6%) Underground Group All Others Total 2008 Revenues 135,152 80,170 973,700 2007 Revenues 114,378 29,746 869,025 Change $ 20,774 50,424 104,675 Change % 18.2% 169.5% 12.0% 2008 Gross Profit 32,135 15,396 233,858 2008 Gross Profit % 23.8% 19.2% 24.0% 2007 Gross Profit 25,670 5,021 209,778 2007 Gross Profit % 22.4% 16.9% 24.1% Change 6,465 10,375 24,080 2008 Profit (Loss) 12,511 (41,154) 64,241 2007 Profit (Loss) 7,348 (45,042) 56,790 Change $ 5,163 3,888 7,451 Change % 70.3% 8.6% 13.1% 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 twelve months ended December 31 2008 2007 Total profit for all segments $64,241 $56,790 Minority interest (167) (211) Recapture (elimination) of intersegment profit (946) 218 Consolidated net income $63,128 $56,797 Astec Industries, Inc. Backlog by Segment December 31, 2008 and 2007 (in thousands) (Unaudited) Aggregate and Mobile Asphalt Asphalt Group Mining Group Paving Group 2008 Backlog 106,223 65,340 2,855 2007 Backlog 133,358 113,031 12,142 Change $ (27,135) (47,691) (9,287) Change % (20.3%) (42.2%) (76.5%) Underground Group All Others Total 2008 Backlog 12,118 6,780 193,316 2007 Backlog 13,347 9,045 280,923 Change $ (1,229) (2,265) (87,607) Change % (9.2%) (25.0%) (31.2%) DATASOURCE: Astec Industries, Inc. CONTACT: J. Don Brock, Chairman of the Board & C.E.O., +1-423-867-4210, Fax: +1-423-867-4127, ; F. McKamy Hall, Vice President and Chief Financial Officer, +1-423-899-5898, Fax: +1-423-899-4456, ; Stephen C. Anderson, Director of Investor Relations, +1-423-899-5898, Fax: +1-423-899-4456, , all of Astec Industries, Inc. Web Site: http://www.astecindustries.com/

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