Astec Reports Second Quarter 2020 Results

Nachrichtenquelle: globenewswire
05.08.2020, 13:00  |  107   |   |   

Second Quarter 2020 Highlights (all comparisons are made to the prior year second quarter):

  • Net Sales decreased 13.0% to $265.3M; Adjusted Net Sales decreased just 6.8% due to $20.0M included in 2019 sale of a wood pellet plant
  • Gross margin of 22.5% decreased 480 bps; Adjusted Gross margin increased 100 bps
  • EPS of $0.41 compared to $1.03 a year ago; adjusted EPS of $0.67 increased 81.1%
  • EBITDA decreased 53.2% to $17.4M; adjusted EBITDA of $25.3M increased 46.9% from $17.2M a year ago; adjusted EBITDA margin of 9.5% increased 350 bps
  • Announced the closure of our Mequon, Wisconsin facility; in-line with global footprint consolidation strategy

CHATTANOOGA, Tenn., Aug. 05, 2020 (GLOBE NEWSWIRE) --  Astec Industries, Inc. (Nasdaq: ASTE) announced today its financial results for second quarter 2020 ending June 30, 2020.

Second quarter of 2020 net sales of $265.3 million decreased 13.0% compared to $304.8 million for the second quarter of 2019. Domestic sales decreased $24.7 million or 10.0% and international sales decreased $14.8 million or 25.3% due to COVID-19 related business disruptions in the second quarter versus last year. Excluding the impact of foreign currency, net sales decreased 11.4%.

Backlog as of June 30, 2020 of $182.0 million decreased by $64.1 million, or 26.1% compared to the backlog of $246.1 million a year ago driven by lower Materials and Infrastructure Solutions orders, which were down 17.3% and 30.9%, respectively. Domestic backlog decreased by 20.6% to $128.3 million while International backlog decreased by 36.6% to $53.6 million. Lower orders were driven by COVID-19 uncertainties.

Operating income of $10.9 million in the second quarter of 2020 decreased 64.4% compare to $30.5 million in the second quarter 2019. In relation to the company’s efforts to simplify the organization, the company incurred a $7.9 million pre-tax restructuring charge or $0.26 per share net of taxes related to asset impairment, inventory write-down, reduction in labor force and the closing of our Mequon, Wisconsin facility. Second quarter of 2020 adjusted operating income of $18.8 million, increased 77.8% compared to $10.5 million a year ago. Adjusted operating margin of 7.1% increased 340 basis points from 3.7% in second quarter 2019 largely driven by our transformation initiatives put in place beginning in late 2019. SG&A expenses declined 19.0% on a dollar basis driven by reductions in consulting fees, travel and employee expenses.

Adjusted EBITDA of $25.3 million increased 46.9% compared to $17.2 million a year ago.  Adjusted EBITDA margin of 9.5% increased 350 basis points from 6.0% in second quarter 2019.

Excluding restructuring charges mentioned above, adjusted net income of $15.3 million increased 81.6% compared to the prior year period, while adjusted EPS of $0.67 increased 81.1% compared to $0.37 for second quarter 2019.

“During the second quarter, we continued to make significant progress against our initiatives to Simply, Focus and Grow our business. In the quarter, we announced the closure of our Mequon, Wisconsin location, which is where we built our Telsmith products. This closure will enable us to leverage our footprint more efficiently as these products are transferred to different Astec facilities,” said Barry Ruffalo, CEO of Astec. “In addition, supporting our Grow strategic pillar, we recently announced the acquisition of two premier full-line concrete batch plant manufacturers, CON-E-CO and BMH, both of which will significantly strengthen our Infrastructure Solutions group and provide our customers with access to the most robust line of concrete products in the infrastructure industry. We continue to look for ways to grow regionally in attractive markets that build upon our strong foundational product lines.”

“Second quarter results also demonstrated traction on our strategic transformation with Adjusted EBITDA and 350 bps expansion in Adjusted EBITDA margin, despite the decrease in net sales, a direct result of the restructuring initiatives taken in 2019 and 2020. While we remain cautious given the global pandemic, we are well positioned to navigate the economic challenges ahead of us with a more efficient and streamlined organizational structure, a strong balance sheet and ample liquidity.”

We have provided a spreadsheet recasting two years of historical segment financials that have been made available under the Investor Relations section of the Astec Industries, Inc. website.

COVID-19 Business Continuity and Operations Update 
We continue to execute on COVID-19 measures we announced in our April 1, 2020 COVID-19 Business Update and our first quarter 2020 earnings call. These measures were taken in order to ensure the health and wellbeing of our employees, their families and communities in which we operate, while continuing to serve our customers’ critical needs.  Below is a COVID-related update by category:

Balance Sheet and Liquidity
The Company remains focused on liquidity and cash preservation. We ended the quarter with a net cash position of $119.8 million with total debt of $1.4 million. The Company has available liquidity in excess of $270.6 million as of June 30, 2020.

Operations
During the second quarter of 2020, we experienced a temporary suspension of operations at two of our facilities, Johannesburg, South Africa, and Omagh, Northern Ireland, in observance of government mandates. These two facilities were closed for approximately one month and both resumed operations during the month of May.

All of our facilities are now operational and able to meet current demand levels. We continue to manufacture our products to building and maintaining the infrastructure used to move goods to market, facilitate the transportation needs of communities and for public health and safety.

Supply Chain
We have not experienced any interruption to our supply chain and are able to source the necessary materials needed to meet our customers’ needs.  We are closely monitoring our supply chain and are ready to take proactive actions as needed to mitigate any potential disruptions. We have increased the frequency of communications with our suppliers and customers to ensure business continuity, anticipate, and prepare for any new developments.

Cost Management
We have implemented additional actions to help mitigate the financial and operations impacts of COVID-19, including reducing expenses and conserving cash. These actions include:

  • Overall headcount reduction of 15% since 2Q19
  • Suspension of all hiring, except for critical positions
  • Discretionary spending​ reductions
  • Working capital management to ensure efficient accounts receivable processing with our customers      

Mr. Ruffalo continued, “I am very proud of how our team members have embraced and adapted to the COVID-19 situation as an organization and how we have managed through this challenging environment. At the onset of the pandemic, we immediately took proactive measures to ensure the safety and wellbeing of our employees, suppliers and customers, while we continued to execute on our strategy and drive profitable growth in the quarter. We remain well-positioned to navigate the economic challenges ahead of us with our more efficient and streamlined organizational structure, a strong balance sheet and ample liquidity. I am confident that we will come out of the COVID-19 pandemic a stronger and more resilient organization.”

Investor Conference Call and Web Simulcast
Astec will conduct a conference call and live webcast today, August 5th, 2020, at 10:00 A.M. Eastern Time, to review its second quarter 2020 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 www.webcaster4.com/Webcast/Page/2146/36087. 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 August 19, 2020 by dialing (877) 481-4010 or (919) 882-2331 for international callers, Conference ID # 36087.  A transcript 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.

About Astec
Astec, (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 two primary business segments: Infrastructure Solutions that includes road building, asphalt and concrete plant, thermal and storage solutions; and Materials Solutions that include our aggregate processing and mining equipment.

Forward-Looking Statements
The information contained in this presentation and discussion 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)  changes in the business segments (iii) the effect of changes in backlog (iv) the acquisition of CON-E-CO and BMH, (v) the closure of our Mequon, Wisconsin location and associated efficiencies, (vi) the impact of the COVID-19 pandemic on the global demand for the Company’s products, and (vii) the impacts of the COVID-19 pandemic on the Company’s financial condition and business operations. 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, 2019.

For Additional Information Contact:
Steve Anderson 
Senior Vice President of Administration and Investor Relations, Secretary 
Phone: (423) 899-5898 
Fax: (423) 899-4456 
E-mail: sanderson@astecindustries.com



                       
Astec Industries Inc.  
Condensed Consolidated Statements of Income  
(In millions, except share and per share amounts; unaudited)  
                       
        Three Months Ended   Year To Date  
        June 30,   June 30,  
          2020       2019       2020       2019    
Net sales $ 265.3     $ 304.8     $ 554.1     $ 630.6    
Cost of sales   205.7       221.5       420.5       470.4    
Gross profit   59.6       83.3       133.6       160.2    
                       
Operating expenses:                
  Selling, general and administrative   42.7       52.8       98.9       110.9    
  Restructuring and asset impairment charges   6.0       0.0       8.7       0.6    
    Total operating expenses   48.7       52.8       107.6       111.5    
Operating income   10.9       30.5       26.0       48.7    
                       
Other income (expense):                
  Interest expense   (0.1 )     (0.5 )     (0.2 )     (1.1 )  
  Miscellaneous, net   0.3       0.4       0.8       0.8    
Income before income taxes   11.1       30.4       26.6       48.4    
Provision (benefit) from income taxes   1.8       7.0       (3.3 )     10.7    
Net income attributable to controlling interest $ 9.3     $ 23.4     $ 29.9     $ 37.7    
                       
Earnings per common share                
  Basic $ 0.41     $ 1.04     $ 1.33     $ 1.67    
  Diluted   0.41       1.03       1.32       1.66    
                       
Weighted-average shares outstanding                
  Basic   22,584       22,509       22,567       22,503    
  Diluted   22,711       22,667       22,715       22,656    
                       
                       
                       
      EPS * $ 0.41     $ 1.03     $ 1.32     $ 1.66    
      Restructuring and unusual   0.35       (0.88 )     0.39       (0.86 )  
      Goodwill impairment           0.07        
      Provision of income taxes   (0.09 )     0.22       (0.11 )     0.22    
      Adjusted EPS * $ 0.67     $ 0.37     $ 1.67     $ 1.02    
                       
                       
      * Diluted EPS                
                       



                                         
Astec Industries Inc.
Segment Revenues and Profits
(In thousands; unaudited)
                                         
                                         
        Three Months Ended June 30     Year To Date Ended June 30  
        Infrastructure
Solutions
  Material
Solutions
  Corporate   Total     Infrastructure
Solutions
  Material
Solutions
  Corporate   Total  
                                         
2020 Revenues $ 181,851     $ 83,448       --     $ 265,299       $ 384,469     $ 169,678             $ 554,147    
2019 Revenues   197,965       106,837       --       304,802         417,214       213,368               630,582    
Change $   (16,114 )     (23,389 )     --       (39,503 )       (32,745 )     (43,690 )             (76,435 )  
Change %   (8.1 %)     (21.9 %)         (13.0 %)       (7.8 %)     (20.5 %)         (12.1 %)  
                                         
2020 Gross profit   38,289       21,214       112       59,615         91,213       42,219       204       133,636    
2020 Gross profit %   21.1 %     25.4 %         22.5 %       23.7 %     24.9 %         24.1 %  
2019 Gross profit   57,743       25,493       81       83,317         109,053       51,038       76       160,167    
2019 Gross profit %   29.2 %     23.9 %         27.3 %       26.1 %     23.9 %         25.4 %  
Change %   (19,454 )     (4,279 )     31       (23,702 )       (17,840 )     (8,819 )     128       (26,531 )  
                                         
2020 Profit / (loss)   14,215       8,469       (13,604 )     9,080         31,435       14,504       (16,528 )     29,411    
2019 Profit / (loss)   26,926       8,489       (12,563 )     22,852         44,996       17,166       (25,471 )     36,691    
Change $   (12,711 )     (20 )     (1,041 )     (13,772 )       (13,561 )     (2,662 )     8,943       (7,280 )  
Change %   (47.2 %)     (0.2 %)     (8.3 %)     (60.3 %)       (30.1 %)     (15.5 %)     (35.1 %)     (19.8 %)  
                                         
                                         
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 attributable to controlling interest is as follows (in thousands):      
                                         
                                         
            Three Months Ended June 30,         Year To Date Ended June 30,  
              2020       2019     Change $           2020       2019     Change $  
Total profit for all segments     $ 9,080     $ 22,852     $ (13,772 )         $ 29,411     $ 36,691     $ (7,280 )  
Recapture of intersegment profit       226       509       (283 )           378       888       (510 )  
Net loss attributable to non-controlling interest     (48 )     16       (64 )           113       72       41    
Net income attributable to controlling interest   $ 9,258     $ 23,377     $ (14,119 )         $ 29,902     $ 37,651     $ (7,749 )  
                                         



               
Astec Industries Inc.  
Condensed Consolidated Balance Sheets  
(In millions; unaudited)  
               
        June 30,   June 30,  
          2020     2019  
Assets        
Current assets:        
  Cash and cash equivalents $ 119.8   $ 24.9  
  Investments   2.9     1.2  
  Receivables, net   118.7     139.2  
  Inventories, net   263.2     360.9  
  Other current assets   25.8     31.3  
    Total current assets   530.4     557.5  
Property, plant and equipment, net   177.8     191.9  
Other long-term assets   85.6     99.2  
Total assets $ 793.8   $ 848.6  
               
Liabilities        
Current liabilities:        
  Accounts payable $ 48.2   $ 70.3  
  Other current liabilities   95.8     103.6  
    Total current liabilities   144.0     173.9  
Long-term debt   0.4     28.9  
Other long-term liabilities   27.6     25.2  
Total equity   621.8     620.6  
Total liabilities and equity $ 793.8   $ 848.6  
               



             
Astec Industries Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands; unaudited)
             
        Three Months Ended
        June 30,
          2020       2019  
Cash flows from operating activities:      
Net income $ 29,788     $ 37,579  
Adjustments to reconcile net income to net cash provided      
  by operating activities:      
  Depreciation and amortization   12,601       13,139  
  Provision for doubtful accounts   780       806  
  Provision for warranties   5,137       4,496  
  Deferred compensation expense   193       144  
  Stock-based compensation   2,987       1,739  
  Deferred income tax provision   13,428       8,412  
  (Gain) loss on disposition of fixed assets   (730 )     176  
  Asset impairment charge   4,146       --  
Distributions to SERP participants   (434 )     (1,007 )
Change in operating assets and liabilities:      
  Sale (purchase) of trading securities, net   (9 )     50  
  Trade and other receivables   5,445       (6,719 )
  Inventories   31,365       (5,240 )
  Prepaid expenses and other assets   2,681       911  
  Accounts payable   (7,714 )     (2,006 )
  Accrued payroll and related expenses   (2,869 )     (2,807 )
  Accrued product warranty   (4,538 )     (5,287 )
  Customer deposits   (20,053 )     (13,025 )
  Prepaid and income taxes payable, net   10,622       7,669  
  Other   2,015       3,841  
Net cash provided by operating activities   84,841       42,871  
Cash flows from investing activities:      
Expenditures for property and equipment   (7,407 )     (8,657 )
Proceeds from sale of property and equipment   1,987       136  
Other   (205 )     433  
Net cash used by investing activities   (5,625 )     (8,088 )
Cash flows from financing activities:      
Payment of dividends   (4,971 )     (4,956 )
Bank loan repayments, net   (188 )     (31,014 )
Sale of Company shares held by SERP   125       222  
Withholding tax paid upon vesting of restricted stock units   (565 )     (160 )
Net cash used by financing activities   (5,599 )     (35,908 )
Effect of exchange rates on cash   (2,677 )     209  
Net change in cash and cash equivalents   70,940       (916 )
Cash and cash equivalents, beginning of period   48,857       25,821  
Cash and cash equivalents at end of period $ 119,797     $ 24,905  
             



Appendix
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.
                 
2Q20 GAAP to Non-GAAP Reconciliation Table   YTD2Q20 GAAP to Non-GAAP Reconciliation Table
                 
  As Reported Restructuring As Adjusted     As Reported Restructuring As Adjusted
  (GAAP) Charges (Non-GAAP)     (GAAP) Charges (Non-GAAP)
Consolidated         Consolidated      
Net sales $ 265,299   $ -   $ 265,299     Net sales $ 554,147   $ -   $ 554,147  
GP   59,615     1,908     61,523     GP   133,636     1,908     135,544  
GP%   22.5 %     23.2 %   GP%   24.1 %     24.5 %
Operating income   10,860     7,900     18,760     Operating income   26,003     10,612     36,615  
Provision (benefit) from income taxes   1,868     1,906     3,774     Provision (benefit) from income taxes   (3,275 )   2,543     (732 )
Net income attributable to controlling interest   9,258     5,994     15,252     Net income attributable to controlling interest   29,902     8,069     37,971  
EPS   0.41     0.26     0.67     EPS   1.32     0.35     1.67  
EBITDA   17,365     7,900     25,265     EBITDA   38,913     10,612     49,525  
                 
                 
Infrastructure Solutions         Infrastructure Solutions      
Net sales   181,851     -     181,851     Net sales   384,469     -     384,469  
GP   38,289     1,908     40,197     GP   91,213     1,908     93,121  
GP%   21.1 %     22.1 %   GP%   23.7 %     24.2 %
EBITDA   18,980     3,611     22,591     EBITDA   41,221     6,290     47,511  
                 
Materials Solutions         Materials Solutions      
Net sales   83,448     -     83,448     Net sales   169,678     -     169,678  
GP   21,214     -     21,214     GP   42,219     -     42,219  
GP%   25.4 %     25.4 %   GP%   24.9 %     24.9 %
EBITDA   10,562     1,550     12,112     EBITDA   18,922     1,582     20,504  
                 
                 
2Q19 GAAP to Non-GAAP Reconciliation Table   YTD 2Q19 GAAP to Non-GAAP Reconciliation Table
  As Reported Restructuring As Adjusted     As Reported Restructuring As Adjusted
  (GAAP) Charges (Non-GAAP)     (GAAP) Charges (Non-GAAP)
Consolidated         Consolidated      
Net sales $ 304,802   $ (20,000 ) $ 284,802     Net sales $ 630,582   $ (20,000 ) $ 610,582  
GP   83,317     (19,974 )   63,343     GP   160,167     (19,974 )   140,193  
GP%   27.3 %     22.2 %   GP%   25.4 %     23.0 %
Operating income   30,481     (19,932 )   10,549     Operating income   48,660     (19,420 )   29,240  
Provision (benefit) from income taxes   7,008     (4,953 )   2,055     Provision (benefit) from income taxes   10,789     (4,955 )   5,834  
Net income attributable to controlling interest   23,377     (14,979 )   8,398     Net income attributable to controlling interest   37,651     (14,465 )   23,186  
EPS   1.03     (0.66 )   0.37     EPS   1.66     (0.64 )   1.02  
EBITDA   37,128     (19,932 )   17,196     EBITDA   62,067     (19,421 )   42,646  
                (14,465 )  
Infrastructure Solutions         Infrastructure Solutions      
Net sales   197,965     (20,000 )   177,965     Net sales   417,214     (20,000 )   397,214  
GP   57,743     (19,974 )   37,769     GP   109,053     (19,974 )   89,079  
GP%   29.2 %     21.2 %   GP%   26.1 %     22.4 %
EBITDA   32,431     (19,932 )   12,499     EBITDA   55,575     (19,420 )   36,155  
                 
Materials Solutions         Materials Solutions      
Net sales   106,837     -     106,837     Net sales   213,368     -     213,368  
GP   25,493     -     25,493     GP   51,038     -     51,038  
GP%   23.9 %     23.9 %   GP%   23.9 %     23.9 %
EBITDA   11,315     -     11,315     EBITDA   22,499     -     22,499  



                       
Astec Industries Inc.  
GAAP vs Non-GAAP Adj. ESP Reconciliations  
(In thousands, except share and per share amounts; unaudited)  
                       
        Three Months Ended   Year To Date Ended  
        June 30,   June 30,  
          2020       2019       2020       2019    
Net income attributable to controlling interest $ 9,258     $ 23,377     $ 29,902     $ 37,651    
Plus: Restructuring and unusual   7,900       (19,932 )   $ 8,966     $ (19,420 )  
Plus: Goodwill impairment   --       --     $ 1,646        
Less: Provision from income taxes   (1,906 )     4,953     $ (2,543 )   $ 4,955    
Adjusted net income attributable to controlling interest $ 15,252     $ 8,398     $ 37,971     $ 23,186    
                       
                       
                       
Diluted EPS $ 0.41     $ 1.03     $ 1.32     $ 1.66    
Plus: Restructuring and unusual   0.35       (0.88 )     0.39       (0.86 )  
Plus: Goodwill impairment   --       --       0.07       --    
Less: Provision from income taxes   (0.09 )     0.22       (0.11 )     0.22    
Adjusted EPS $ 0.67     $ 0.37     $ 1.67     $ 1.02    
                       

Astec Industries Aktie jetzt ab 0€ handeln - auf Smartbroker.de



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