10/26/2012 | Press release

Astec Industries Reports Third Quarter Sales Up 6%, Pre-Tax Earnings Up 9%

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ASTEC INDUSTRIE&, INC.

·,------ -:--:::=

1725 Shepherd Road 1 Chattanooga, TN 37421 1 Phone (423) 899-5898 l Fax (423) 899-4456

ASTEC INDUSTRIE$ REPORTS THIRD QUARTER SALES UP 6%, PRE-TAX EARNINGS UP 9%

CHATTANOOGA, Tenn. (October 26, 2012) - Astec lndustries, lnc. (Nasdaq: ASTE) today reported results far their third quarter ended September 30, 2012. Net sales far the third quarter of 2012 were $227.0 million compared to $214.6 million far the third quarter of 2011, a 6% increase. Pre-tax earnings far the third quarter of 2012 were $10.1 million compared to $9.3 million in the third quarter of 2011, an increase of 9%. Earnings far the third quarter of 2012 were

$6.9 million or $0.30 per diluted share compared to earnings far the third quarter of 2011 of $7.7 million or $0.34 per diluted share, a decrease of $0.04 or 12% per diluted share.

Domestic sales increased 10% to $139.5 million far the third quarter of 2012 compared to $127.3 million far the third quarter of 2011. lnternational sales were $87.6 million far the third quarter of

2012 compared to $87.3 million far the third quarter of 2011.

Net sales far the first nine months of 2012 were $747.6 million compared to $692.6 million far the first nine months of 2011, an 8% increase. Pre-tax earnings far the first nine months of 2012 were $46.1 million, relatively unchanged from $46.2 million in the first nine months of 2011. Earnings far the first nine months of 2012 were $29.5 million or $1.28 per diluted share compared to earnings far the first nine months of 2011 of $32.0 million or $1.39 per diluted share, a decrease of $0.11 or 8% per diluted share.

Domestic sales increased 12% to $462.4 million far the first ninè months of 2012 compared to

$414.2 million far the first nine months of 2011. lnternational sales were $285.2 million far the first nine months of 2012 compared to $278.3 million far the first nine months of 2011, a 3% increase.

The Company's domestic backlog increased 8%, from $107.9 million at September 30, 2011 to

$116.1 million at September 30, 2012. The international backlog at September 30, 2012 was

$124.4 million, a slight increase compared to the September 30, 2011 international backlog of

$124.2 million. Total backlog increased 4% to $240.5 million at September 30, 2012 from $232.1 million September 30, 2011, respectively. 2011 backlog amounts have been restated to reflect acquisitions made late in 2011.

Consolidated financial information far the quarter and nine months ended September 30, 2012 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, "While we were able to grow sales at 6% far the third quarter, our gross margin remained flat. Our pre-tax earnings were up 9% during the quarter but our after-tax earnings were impacted

by the lack of a research and development credit which was in effect in 2011 but has yet to be approved by Congress far 2012."
Dr. Brock continued, "Our customers continue to be reluctant to spend money on capitai investments due to the lack of work and uncertainty in the economy. The delayed passage of the Federai highway bill caused state transportation departments to delay lettings until late in the construction season. In addition, the uncertainty surrounding taxes, regulations and the lack of generai economie improvement continues to discourage customers from upgrading and expanding their equipment fleets. We see an opportunity far growth as the economy rebounds aver the next few years and the pent up demand far equipment needs to be met."

lnvestor Conference Cali and Web Simulcast

Astec will conduct a conference cali on October 26, 2012, at 10:00 A.M. Eastern Time to review its September 30, 2012 results as well as current business conditions. The number to cali far this interactive teleconference is (877) 407-921O. lnternational callers should dial (201) 689-8049. Please reference Astec lndustries.
The company will also previde an online Web simulcast and rebroadcast of the conference cali. The live broadcast of Astec's conference cali will be available online at the Company's website: www.astecindustries.com/conferencecalls. An archived webcast will be available far 90 days at www.astecindustries.com.
A replay of the conference cali will be available through midnight on Friday, November 9, 2012 by dialing {877) 660-6853, or (201) 612-7415 far international callers, Account #286, Conference ID#
397799. A transcription of the conference cali will be made available under the lnvestor Relations
section of the Astec lndustries, lne. website within 5 business days after the cali.
Astec lndustries, lnc. is a manufacturer of specialized equipment far building and restoring the world's infrastructure. Astec's manufacturing operations are divided into four primary business segments: aggregate processing and mining equipment; asphalt production equipment; mobile asphalt paving equipment; and underground boring, directional drilling and trenching equipment. Additionally, the Other Group contains one subsidiary that manufactures equipment used far wood processing and recycling and one that is a company-owned dealership located in Australia.
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 in the fourth quarter of 2012, the effects on the Company from its backlog, the Federai highway bill, the uncertainty in the generai economy, and the success of the Company's acquisition strategy. 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. lmportant factors that could cause future events or actual results to differ materially include: generai uncertainty in the economy, rising oil and liquid asphalt prices, rising steel prices, the affect of any future federai stimulus package, decreased funding for highway projects, the relative strength/weakness of the dollar to foreign currencies, production capacity, generai 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 annua! report on Form 10-K for the year ended December 31, 2011.
For Additionallnformation Contact:

J. Don Brock

Chairman of the Board & C.E.O. Phone: (423) 867-4210
Fax: (423) 867-4127
E-mail: dbrock@astecindustries.com or
David C. Silvious
Vice President and Chief Financial Officer
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: dsilvious@astecindustries.com or
Stephen C. Anderson
Vice President, Director of lnvestor Relations & Corporate Secretary
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: sanderson@astecindustries.com

	Sept 30 2012	Sept 30 2011
Assets Current assets Cash and cash equivalents Receivables, net lnventories Prepaid expenses and other Total current assets Property and equipment, net Other assets Total assets Liabilities and equity Current liabilities Accounts payable - trade Other accrued liabilities Total current liabilities Other non-current liabilities Total equity Totalliabilities and equity	$ 35,564 109,320 340,982 26,241	$ 51,737 101,227 290,453 28,702
Assets Current assets Cash and cash equivalents Receivables, net lnventories Prepaid expenses and other Total current assets Property and equipment, net Other assets Total assets Liabilities and equity Current liabilities Accounts payable - trade Other accrued liabilities Total current liabilities Other non-current liabilities Total equity Totalliabilities and equity	512,107 192,602 42,704	472,119 177,855 39,054
Assets Current assets Cash and cash equivalents Receivables, net lnventories Prepaid expenses and other Total current assets Property and equipment, net Other assets Total assets Liabilities and equity Current liabilities Accounts payable - trade Other accrued liabilities Total current liabilities Other non-current liabilities Total equity Totalliabilities and equity	$ 747,413	$ 689,028
Assets Current assets Cash and cash equivalents Receivables, net lnventories Prepaid expenses and other Total current assets Property and equipment, net Other assets Total assets Liabilities and equity Current liabilities Accounts payable - trade Other accrued liabilities Total current liabilities Other non-current liabilities Total equity Totalliabilities and equity	$ 49,456 103,956	$ 45,571 92,005
Assets Current assets Cash and cash equivalents Receivables, net lnventories Prepaid expenses and other Total current assets Property and equipment, net Other assets Total assets Liabilities and equity Current liabilities Accounts payable - trade Other accrued liabilities Total current liabilities Other non-current liabilities Total equity Totalliabilities and equity	153,412 33,421 560,580	137,576 29,877 521,575
Assets Current assets Cash and cash equivalents Receivables, net lnventories Prepaid expenses and other Total current assets Property and equipment, net Other assets Total assets Liabilities and equity Current liabilities Accounts payable - trade Other accrued liabilities Total current liabilities Other non-current liabilities Total equity Totalliabilities and equity	$ 747,413	$ 689,028

Astec lndustries, lnc. Consolidated Statements of lncome (in thousands, except per share data) (unaudited)

	Three Months Ended Sept 30 2012 2011	Nine Months Ended Sept 30 2012 2011
Net sales Cost of sales Gross profit Selling, generai, administrative & engineering expenses Asset impairment charge lncome from operations lnterest expense Other income, net of expenses lncome before income taxes lncome taxes Net income Net income attributable to noncontrolling interest Net income attributable to controlling interest	$ 227,041 177,598	$ 214,624 168,224	$ 747,554 581,234	$ 692,569 529,495
Net sales Cost of sales Gross profit Selling, generai, administrative & engineering expenses Asset impairment charge lncome from operations lnterest expense Other income, net of expenses lncome before income taxes lncome taxes Net income Net income attributable to noncontrolling interest Net income attributable to controlling interest	49,443 40,003 -	46,400 37,362 -	166,320 122,266 -	163,074 115,640 2,170
Net sales Cost of sales Gross profit Selling, generai, administrative & engineering expenses Asset impairment charge lncome from operations lnterest expense Other income, net of expenses lncome before income taxes lncome taxes Net income Net income attributable to noncontrolling interest Net income attributable to controlling interest	9,440 152 856	9,038 46 264	44,054 242 2,333	45,264 140 1,037
Net sales Cost of sales Gross profit Selling, generai, administrative & engineering expenses Asset impairment charge lncome from operations lnterest expense Other income, net of expenses lncome before income taxes lncome taxes Net income Net income attributable to noncontrolling interest Net income attributable to controlling interest	10,144 3,244	9,256 1,492	46,145 16,558	46,161 14,134
Net sales Cost of sales Gross profit Selling, generai, administrative & engineering expenses Asset impairment charge lncome from operations lnterest expense Other income, net of expenses lncome before income taxes lncome taxes Net income Net income attributable to noncontrolling interest Net income attributable to controlling interest	6,900 48	7,764 41	29,587 124	32,027 74
Net sales Cost of sales Gross profit Selling, generai, administrative & engineering expenses Asset impairment charge lncome from operations lnterest expense Other income, net of expenses lncome before income taxes lncome taxes Net income Net income attributable to noncontrolling interest Net income attributable to controlling interest	$ 6,852	$ 7,723	$ 29,463	$ 31,953

Earnings per Common Share

Net income attributable to controlling interest

Basic $ 0.30 $ 0.34 $ 1.30 $ 1.42

Diluted $ 0.30 $ 0.34 $ 1.28 $ 1.39

Weighted average common shares outstanding

Basic 22,691 22,599 22,675 22,580

Diluted 23,053 23,007 23,049 22,973

Astec lndustries, lnc. Segment Revenues and Profits

For the three months ended September 30, 2012 and 2011

(in thousands)

_ (unaudited]

	Asphalt Group	Aggregate and Mining Group	Mobile Asphalt Pavino Group	Underground Group	Ali Others	Total
2012 Revenues 2011 Revenues Change $ Change o/o 2012 Gross Profit 2012 Gross Profit o/o 2011 Gross Profit 2011 Gross Profit o/o Change 2012 Profit (Loss) 2011 Profit (Loss) Change $ Change o/o	46,797 50,458 (3,661) (7.3%) 9,563 20.4% 8,508 16.9% 1,055 2,248 500 1,748 349.6%	91,860 83,232 8,628 10.4% 22,957 25.0% 20,682 24.8% 2,275 8,697 7,764 933 12.0%	36,618 39,143 (2,525) (6.5%) 7,575 20.7% 10,091 25.8% (2,516) 1,631 4,976 (3,345) (67.2%	29,179 23,769 5,410 22.8% 4,929 16.9% 4,080 17.2% 849 518 511 7 1.4%	22,587 18,022 4,565 25.3% 4,419 19.6% 3,039 16.9% 1,380 (5,545) (4,062) (1,483) (36.5%	227,041 214,624 12,417 5.8% 49,443 21.8% 46,400 21.6% 3,043 7,549 9,689 (2,140) (22.1%

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 net income attributable to controlling interest is as follows (in thousands):

Three months ended September 30

Total profit for ali segments

Net income attributable to non-controlling interest in subsidiary

Elimination of intersegment profit

Net income attributable to controlling interest

Astec lndustries, lnc. Segment Revenues and Profits

For the nine months ended September 30, 2012 and 2011

(in thousands)

_ (unaudited}_

	Asphalt Group	Aggregate and Minino Group	Mobile Asphalt Pavino Group	Underground GroUjl_	Ali Others	Total
2012 Revenues 2011 Revenues Change $ Change o/o 2012 Gross Profit 2012 Gross Profit o/o 2011 Gross Profit 2011 Gross Profit o/o Change 2012 Profit (Loss) 2011 Profit (Loss) Change $ Chanoe o/o	174,898 192,396 (17,498) (9.1%) 37,735 21.6% 44,486 23.1% (6,751) 13,541 20,421 (6,880) (33.7%)	278,024 248,647 29,377 11.8% 72,512 26.1% 61,838 24.9% 10,674 29,836 23,114 6,722 29.1%	123,770 142,565 (18,795) (13.2%) 28,331 22.9% 39,158 27.5% (10,827) 9,634 20,819 (11,185) j53.7%	100,738 58,524 42,214 72.1% 15,285 15.2% 8,137 13.9% 7,148 1,001 (3,166) 4,167 131.6%	70,124 50,437 19,687 39.0% 12,457 17.8% 9,455 18.7% 3,002 (23,416) (26,126) 2,710 10.4%	747,554 692,569 54,985 7.9% 166,320 22.2% 163,074 23.5% 3,246 30,596 35,062 (4,466) _02.7%

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):

Nine months ended September 30

Total profit forali segments

Net income attributable to non-controlling interest in subsidiary

Elimination of intersegment profit

Net income attributable to controlling interest

Astec lndustries, lnc. Backlog by Segment September 30, 2012 and 2011 (in thousands)

(Unaudited)

	Asphalt Group	Aggregate and Mining Group	Mobile Asphalt Paving Group	Underground Group	Ali Others	Total
2012 Backlog 2011 Backlog Change$ Change o/o	102,944 94,784 8,160 8.6%	82,648 84,848 (2,200) (2.6%	2,828 5,030 (2,202) (43.8%	30,580 26,338 4,242 16.1%	21,505 21,070 435 2.1%	240,505 232,070 8,435 3.6%

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