Astec Industries Reports Fourth Quarter and Full Year 2019 Results

Nachrichtenquelle: globenewswire
04.03.2020, 01:57  |  122   |   |   

Fourth Quarter 2019 Highlights (all comparisons are made to the prior year fourth quarter):

  • Net Sales decreased 10.7% to $283.2M
  • Gross profit of 12.2%; adjusted gross profit of 21.5% decreased 250bps
  • EPS loss of $0.85; adjusted EPS of $0.40 decreased from $0.61 a year ago
  • Adjusted EBITDA of $15.0M decreased 46.4%; adjusted EBITDA margin of 5.3% declined 350bps

2019 Highlights (all comparisons are made to the prior year):

  • Net sales were relatively flat; adjusted net sales decreased 7.8% to $1.15B
  • Gross profit of 21.1%; adjusted gross profit of 22.0% decreased 180bps
  • EPS of $0.95; adjusted EPS of $1.59 decreased from $2.94 a year ago
  • Adjusted EBITDA of $68.3M decreased 41.3%; adjusted EBITDA margin of 5.9% declined 340bps
  • Began restructuring initiatives related to strategic pillars for profitable growth – Simplify, Focus and Grow

CHATTANOOGA, Tenn., March 03, 2020 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (Nasdaq: ASTE) announced today its financial results for fourth quarter and full-year ended December 31, 2019.

Fourth Quarter 2019 Results

Fourth quarter net sales of $283.2 million decreased 10.7% compared to $317.0 million for the fourth quarter of 2018. Domestic sales of $209.6 million decreased 15.5% from $248.2 million a year ago, while International sales of $73.6 million increased 7.0% from $68.8 million in the fourth quarter of 2018. Excluding the impact of foreign currency, net sales decreased 10.4%.

Backlog as of December 31, 2019 of $263.7 million decreased by $81.3 million, or 23.6% compared to the backlog of $344.9 million a year ago. Domestic backlog decreased by 25.4% to $194.5 million from $260.7 million in 2018. International backlog of $69.2 million decreased compared to $84.2 million last year. Although we experienced a decline in each segment, weakness was concentrated in the Aggregate and Mining Group as dealers had increased their inventory levels throughout 2018 to meet demand but then began to destock in 2019.

An operating loss of $28.1 million compared to a loss of $69.4 million in the fourth quarter 2018.  In relation to the company’s efforts to simplify the organization, the company incurred a $9.9 million pre-tax restructuring charge, or $0.34 per diluted share for the fourth quarter. The restructuring items are related to the expected sale of the GEFCO subsidiary, closure of our German operation and the transfer of the CEI products to Heatec and RexCon. In the fourth quarter of 2019, after considering new management’s revised inventory control and working capital control objectives and the Company’s assessment of the age, quantities on hand, market acceptance of the equipment, and other related factors, it was determined that various specific equipment models in each of the Company’s business units required additions to their net realizable value reserves. The fourth quarter results include a pre-tax inventory write-down of $26.5 million or $0.91 per diluted share. Fourth quarter adjusted operating income of $8.4 million decreased 60.5% compared to $21.2 million a year ago.  Adjusted operating margin of 3.0% declined 370 basis points from 6.7% in fourth quarter 2018.   Adjusted operating income declined primarily due to the lower volumes.  SGA&E expenses declined 4.0% on a dollar basis but increased as a percent of sales 130 basis points to 18.6% from 17.3% in the fourth quarter of 2018 due to the decline in sales.

Adjusted EBITDA of $15.0 million decreased 46.6% compared to $28.0 million a year ago.  Adjusted EBITDA margin of 5.3% declined 350 basis points from 8.8% in fourth quarter 2018.

Net loss of $19.2 million or $0.85 per diluted share, compared to a net loss of $47.0 million or $2.08 per diluted share for the fourth quarter of 2018.  Excluding unusual items and restructuring charges mentioned above, adjusted net income of $9.0 million decreased 35.4% compared to the same period a year ago.  Adjusted EPS of $0.40 decreased 34.4% compared to $0.61 last year. 

“Fourth quarter results showed continued softness in North America that was partially offset by an increase in international sales. Despite the temporary headwinds, I am encouraged by the progress we are making towards our strategic initiatives to Simplify, Focus and Grow the organization,” stated Barry Ruffalo, CEO of Astec Industries, Inc. “As recently announced, we are in the process of marketing the GEFCO business for sale.  This will further simplify the organization, strengthen our financial position and release additional capital to deploy toward strategic growth opportunities. Additionally, we have taken important steps to restructure the company and streamline business units to increase internal transparency and improve the decision-making process. These collective actions are important in building the foundation for the future success of Astec Industries.”  

Full Year 2019 Results

Net sales for 2019 were $1,169.6 million, or relatively flat when compared to 2018.  Domestic sales decreased 0.8% to $908.5 million from $915.8 million a year ago, while International sales increased 2.1% to $261.1 million from $255.8 million in 2018.  Excluding the impact of foreign currency, net sales increased 0.6%.         

Operating income of $23.9 million compares to a loss of $86.4 million in 2018.  The company incurred a total of $37.9 million in pre-tax restructuring charges and inventory write-downs for 2019, or $1.36 per diluted share.  Adjusted operating income of $41.8 million decreased 52.4% compared to $87.8 million in 2018.  Adjusted operating margin of 3.6% declined 340 basis points from 7.0% in 2018.  Adjusted operating income declined primarily because of a reduction in gross margin of 180 basis points to 22.0% from 23.8% in 2018.

Adjusted EBITDA of $68.3 million decreased 41.3% compared to $116.3 million in 2018.  Adjusted EBITDA margin of 5.9% declined 340 basis points from 9.3% in 2018.

Net income of $21.5 million or $0.95 per diluted share, compared to a net loss of $60.4 million or $2.64 per diluted share in 2018.  Adjusted net income of $36.0 million decreased 46.6% compared to 2018.  Adjusted EPS of $1.59 decreased 45.9% compared to $2.94 last year. 

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 2019 Form 10-K.  The Company has filed a Form 12b-25 with the Securities and Exchange Commission in order to extend the due date of its 2019 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 and live webcast today, March 4, 2020, at 10:00 A.M. Eastern Time, to review its fourth quarter and year end results as well as current business conditions. The number to call for this interactive teleconference is (877) 407-9210 (at least 10 minutes prior to the scheduled time for the call). International callers should dial (201) 689-8049.  You may also access a live webcast of the call by visiting https//www.webcaster4.com/Webcast/Page/2146/33412.  You will need to give your name and company affiliation and reference Astec Industries.  An archived webcast will be available for ninety days at www.astecindustries.com.

A replay of the conference call will be available through March 17, 2020 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Conference ID #33412. 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.

About Astec Industries, Inc.

Astec Industries, Inc., (www.astecindustries.com), is a manufacturer of specialized equipment for asphalt road building, aggregate processing 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 a diversified portfolio of equipment used in various industries including energy-related markets (Energy Group).

Forward-Looking Statements
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) restructuring initiatives, (ii) the potential sale of the GEFCO business, (iii) increases in international demand, and (iv) product demand in North America. 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, 2018.

For Additional Information Contact:
Steve Anderson 
Senior Vice President Administration, 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 Dec    
    2019     2018      
Assets        
Current assets        
Cash and cash equivalents $ 48,857   $ 25,821      
Investments   1,547     1,946      
Receivables and contract assets, net   124,103     133,978      
Inventories   278,863     355,944      
Prepaid expenses and other   59,603     43,302      
Total current assets   512,973     560,991      
Property and equipment, net   182,404     192,448      
Other assets   104,387     102,018      
Total assets $ 799,764   $ 855,457      
Liabilities and equity        
Current liabilities        
Accounts payable - trade $ 55,055   $ 70,614      
Other current liabilities   117,873     118,617      
Total current liabilities   172,928     189,231      
Long-term debt, less current maturities   690     59,709      
Non-current liabilities   24,490     21,227      
Total equity   601,656     585,290      
Total liabilities and equity $ 799,764   $ 855,457      
         
         
         
 
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
    2019     2018     2019     2018  
Net sales $ 283,224   $ 317,005   $ 1,169,613   $ 1,171,599  
Cost of sales   248,797     318,636     923,159     1,035,833  
Gross profit (loss)   34,427     (1,631 )   246,454     135,766  
Selling, general, administrative & engineering expenses   52,554     54,732     211,148     209,127  
Restructuring and asset impairment charges   9,942     13,060     11,373     13,060  
Income (loss) from operations   (28,069 )   (69,423 )   23,933     (86,421 )
Interest expense   (68 )   (557 )   (1,367 )   (1,045 )
Other   250     11     1,629     1,783  
Income (loss) before income taxes   (27,887 )   (69,969 )   24,195     (85,683 )
Income taxes   (8,701 )   (22,932 )   2,720     (25,234 )
Net income (loss) attributable to controlling interest $ (19,186 ) $ (47,037 ) $ 21,475   $ (60,449 )
         
         
         
         
Earnings (loss) per Common Share        
Net income (loss) attributable to controlling interest        
Basic $ (0.85 ) $ (2.08 ) $ 0.95   $ (2.64 )
Diluted $ (0.85 ) $ (2.08 ) $ 0.95   $ (2.64 )
         
         
Weighted average common shares outstanding        
Basic   22,531     22,582     22,515     22,902  
Diluted   22,531     22,582     22,674     22,902  
         



 
Astec Industries, Inc.
Segment Revenues and Profits (Losses)
For the three months ended December 31, 2019 and 2018
(in thousands)
(unaudited)
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Corporate Total
2019 Revenues 115,671     91,981     75,170     402   283,224  
2018 Revenues 124,930     116,064     76,011     -   317,005  
Change $ (9,259 )   (24,083 )   (841 )   402   (33,781 )
Change % (7.4 %)   (20.7 %)   (1.1 %)   -   (10.7 %)
           
2019 Gross Profit 11,220     13,041     8,511     1,655   34,427  
2019 Gross Profit % 9.7 %   14.2 %   11.3 %   411.7 % 12.2 %
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 %)
Change 52,682     (17,306 )   (864 )   1,546   36,058  
           
2019 Loss (3,815 )   (179 )   (12,192 )   (3,070 ) (19,256 )
2018 Profit (Loss) (69,833 )   10,796     (13,336 )   22,015   (50,358 )
Change $ 66,018     (10,975 )   1,144     (25,085 ) 31,102  
Change % 94.5 %   (101.7 %)   8.6 %   (113.9 %) 61.8 %
           
           
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  
      2019     2018   Change $  
Total loss for all segments   $ (19,256 ) $ (50,358 ) $ 31,102    
Recapture of intersegment profit   64     3,263     (3,199 )  
Net loss attributable to non-controlling interest   6     58     (52 )  
Net loss attributable to controlling interest $ (19,186 ) $ (47,037 ) $ 27,851    
           
           
Astec Industries, Inc.
Segment Revenues and Profits (Losses)
For the year ended December 31, 2019 and 2018
(in thousands)
(unaudited)
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Corporate Total
2019 Revenues 492,118     404,971     272,122     402   1,169,613  
2018 Revenues 442,289     453,164     276,146     -   1,171,599  
Change $ 49,829     (48,193 )   (4,024 )   402   (1,986 )
Change % 11.3 %   (10.6 %)   (1.5 %)   -   (0.2 %)
           
2019 Gross Profit 105,012     84,917     54,719     1,806   246,454  
2019 Gross Profit % 21.3 %   21.0 %   20.1 %   449.3 % 21.1 %
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 %
Change 142,369     (28,055 )   (5,032 )   1,406   110,688  
           
2019 Profit (Loss) 35,449     22,790     (567 )   (37,491 ) 20,181  
2018 Profit (Loss) (112,954 )   45,464     3,070     1,586   (62,834 )
Change $ 148,403     (22,674 )   (3,637 )   (39,077 ) 83,015  
Change % 131.4 %   (49.9 %)   (118.5 %)   (2463.9 %) 132.1 %
           
           
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  
      2019     2018   Change $  
Total profit (loss) for all segments $ 20,181   $ (62,834 ) $ 83,015    
Recapture of intersegment profit   1,162     2,090     (928 )  
Net loss attributable to non-controlling interest   132     295     (163 )  
Net income (loss) attributable to controlling interest   $ 21,475   $ (60,449 ) $ 81,924    
           
           
Astec Industries, Inc.  
Backlog by Segment  
December 31, 2019 and 2018  
(in thousands)  
(unaudited)  
  Infrastructure
Group
Aggregate and
Mining Group
Energy
Group
Total  
2019 Backlog 139,081     74,127     50,497     263,705    
2018 Backlog 149,437     130,691     64,834     344,962    
Change $ (10,356 )   (56,564 )   (14,337 )   (81,257 )  
Change % (6.9 %)   (43.3 %)   (22.1 %)   (23.6 %)  
           



 
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 2019 GAAP to Non-GAAP Reconciliation Table
       
  As Reported Restructuring and As Adjusted
Consolidated (GAAP) Unusual Charges (Non-GAAP)
                   
Net Sales $ 283,224   $ -   $ 283,224  
GP   34,427     26,509     60,936  
GP%   12.2 %     21.5 %
Op Income (Loss)   (28,069 )   36,453     8,384  
Income Tax (Benefit) Expense   (8,701 )   8,245     (456 )
Net Income (Loss)   (19,186 )   28,208     9,022  
EPS   (0.85 )   1.25     0.40  
EBITDA   (21,495 )   36,452     14,957  
Free Cash Flow   22,870     10,494     33,364  
       
       
Infrastructure      
Net Sales   115,671     -     115,671  
GP   11,220     12,098     23,318  
GP%   9.7 %     20.2 %
EBITDA   (2,656 )   12,479     9,823  
       
Aggregate and Mining      
Net Sales   91,981     -     91,981  
GP   13,041     4,261     17,302  
GP%   14.2 %     18.8 %
EBITDA   97     4,511     4,608  
       
Energy      
Net Sales   75,170     -     75,170  
GP   8,511     10,150     18,661  
GP%   11.3 %     24.8 %
EBITDA   (10,046 )   19,463     9,417  
       
       
Q4 2018 GAAP to Non-GAAP Reconciliation Table
       
  As Reported Restructuring and As Adjusted
Consolidated (GAAP) Unusual Charges (Non-GAAP)
                   
Net Sales $ 317,005   $ -   $ 317,005  
GP   (1,631 )   77,574     75,943  
GP%   (0.5 %)     24.0 %
Op Income (Loss)   (69,423 )   90,634     21,211  
Income Tax (Benefit) Expense   (22,932 )   29,628     6,696  
Net Income (Loss)   (47,037 )   61,005     13,968  
EPS   (2.08 )   2.69     0.61  
EBITDA   (62,603 )   90,634     28,031  
       
Infrastructure      
Net Sales   124,930     -     124,930  
GP   (41,462 )   69,792     28,330  
GP%   (33.2 %)     22.7 %
EBITDA   (63,515 )   71,663     8,148  
       
Aggregate and Mining      
Net Sales   116,064     -     116,064  
GP   30,347     294     30,641  
GP%   26.1 %     26.4 %
EBITDA   13,224     294     13,518  
       
Energy      
Net Sales   76,011     -     76,011  
GP   9,375     7,487     16,862  
GP%   12.3 %     22.2 %
EBITDA   (11,708 )   18,677     6,969  
       
       
       
       
FYE 2019 GAAP to Non-GAAP Reconciliation Table
       
  As Reported Restructuring and As Adjusted
Consolidated (GAAP) Unusual Charges (Non-GAAP)
       
Net Sales $ 1,169,613   $ (20,000 ) $ 1,149,613  
Domestic Sales   908,466     (20,000 )   888,466  
International Sales   261,147     -     261,147  
GP   246,454     6,533     252,987  
GP%   21.1 %     22.0 %
Op Income   23,933     17,906     41,839  
Income Tax (Benefit) Expense   2,720     3,420     6,140  
Net Income   21,475     14,487     35,962  
EPS   0.95     0.64     1.59  
EBITDA   50,440     17,906     68,346  
Free Cash Flow   90,287     (7,413 )   82,874  
       
       
FYE 2018 GAAP to Non-GAAP Reconciliation Table
       
  As Reported Restructuring and As Adjusted
Consolidated (GAAP) Unusual Charges (Non-GAAP)
       
Net Sales $ 1,171,599   $ 74,778   $ 1,246,377  
Domestic Sales   915,814     74,778     990,592  
International Sales   255,785     -     255,785  
GP   135,766     161,185     296,951  
GP%   11.6 %     23.8 %
Op Income (Loss)   (86,421 )   174,245     87,824  
Income Tax (Benefit) Expense   (25,234 )   46,502     21,268  
Net Income (Loss)   (60,449 )   127,744     67,295  
EPS   (2.64 )   5.58     2.94  
EBITDA   (57,897 )   174,245     116,348  
                   


PDF with complete 4Q19 Earnings Presentation available:
http://ml.globenewswire.com/Resource/Download/a9b2a337-322a-4ec8-8889- ...

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