OREANDA-NEWS. Astec Industries, Inc. (Nasdaq:ASTE) today reported results for their second quarter and year to date ended June 30, 2016. 

Net sales for the second quarter of 2016 were $294.4 million compared to $268.0 million for the second quarter of 2015, a 9.9% increase.  Earnings for the second quarter of 2016 were $18.2 million or $0.79 per diluted share compared to $11.8 million for the second quarter of 2015 or $0.51 per diluted share, an increase of 54.9% per diluted share. 

Domestic sales increased 24.5% to $242.2 million for the second quarter of 2016 from $194.6 million for the second quarter of 2015.  International sales were $52.2 million for the second quarter of 2016 compared to $73.4 million for the second quarter of 2015, a decrease of 28.9%.      

Net sales for the first half of 2016 were $573.1 million compared to $556.8 million for the first half of 2015, a 2.9% increase.  Earnings for the first half of 2016 were $35.9 million or $1.55 per diluted share compared to $26.9 million for the first half of 2015 or $1.16 per diluted share, an increase of 33.6% per diluted share. 

Domestic sales increased 17.4% to $476.4 million for the first half of 2016 from $405.7 million for the first half of 2015.  International sales were $96.7 million for the first half of 2016 compared to $151.1 million for the first half of 2015, a decrease of 36.0%.     

The Company’s backlog increased 58.8% from $229.5 million at June 30, 2015 to $364.5 million at June 30, 2016.  The domestic backlog increased 80% from $172.0 million at June 30, 2015 to $310.0 million at June 30, 2016.  The international backlog at June 30, 2016 was $54.5 million, a 5% decrease from the June 30, 2015 international backlog of $57.5 million.

Consolidated financial information for the second quarter ended June 30, 2016 and additional information related to segment revenues and profits are attached as addenda to this press release.

Commenting on the announcement, Benjamin G. Brock, Chief Executive Officer, stated, “We were pleased with our results for the second quarter. As our sales and backlog reflect, our domestic business remained strong during the quarter. This is primarily attributable to the increased demand caused by the passage of a new Federal highway bill in December 2015 and continuing good private sector activity.”

Mr. Brock continued, “Our backlog is up 58.8% versus last year. The majority of the increase is in the Infrastructure Group, again mainly as a result of the Federal highway bill and the $122.5 million pellet plant order announced during the first quarter. In contrast to the success of our domestic business, we continued to face headwinds in all of our groups with regard to our international business, primarily as a result of the strong U.S. dollar. We also continue to be challenged in our Aggregate and Mining Group as a result of the global mining slow down. Finally, we remain challenged in our Energy Group equipment sales in the oil and natural gas industries as prices for these commodities remain at low levels.”

In closing, Mr. Brock commented, “We were pleased to announce on July 7, 2016 our signed agreement to purchase Power Flame Incorporated for $43 million, subject to final due diligence and customary closing conditions.  Power Flame manufactures burners for industrial and commercial use, and is recognized as an industry leader in technology, service, and market share.  We expect to close the acquisition of Power Flame during the third quarter. We will discuss Power Flame in more detail during our earnings call today.”

         
Astec Industries, Inc.    
Condensed Consolidated Balance Sheets    
(in thousands)    
(unaudited)    
     
  June 30 June 30    
    2016     2015      
Assets        
Current assets        
Cash and cash equivalents $   68,473   $   16,353      
Investments     1,889       2,726      
Receivables, net     127,490       118,248      
Inventories     379,477       382,841      
Prepaid expenses and other     29,702       46,569      
Total current assets     607,031       566,737      
Property and equipment, net     173,080       174,971      
Other assets     66,517       62,083      
Total assets $   846,628   $   803,791      
Liabilities and equity        
Current liabilities        
Accounts payable - trade $   54,498   $   52,471      
Other current liabilities     124,720       92,412      
Total current liabilities     179,218       144,883      
Non-current liabilities     27,836       39,718      
Total equity     639,574       619,190      
Total liabilities and equity $   846,628   $   803,791      
         
         
         
Astec Industries, Inc.    
Condensed Consolidated Statements of Income    
(in thousands, except per share data)    
(unaudited)    
     
  Three Months Ended Six Months Ended
  June 30 June 30
    2016     2015     2016     2015  
Net sales $   294,394   $   268,042   $   573,116   $   556,791  
Cost of sales     220,942       205,809       427,708       428,512  
Gross profit     73,452       62,233       145,408       128,279  
Selling, general, administrative & engineering expenses     44,961       43,308       88,766       87,112  
Income from operations     28,491       18,925       56,642       41,167  
Interest expense     326       420       793       717  
Other     327       420       935       2,368  
Income before income taxes     28,492       18,925       56,784       42,818  
Income taxes     10,300       7,120       20,849       15,909  
Net income attributable to controlling interest  $   18,192   $   11,805   $   35,935   $   26,909  
         
         
         
Earnings per Common Share        
Net income attributable to controlling interest        
  Basic $   0.79   $   0.51   $   1.56   $   1.17  
  Diluted $   0.79   $   0.51   $   1.55   $   1.16  
         
         
Weighted average common shares outstanding        
  Basic     22,999       22,942       22,982       22,923  
  Diluted     23,135       23,119       23,135       23,117  
         
Astec Industries, Inc.  
Segment Revenues and Profits  
For the three months ended June 30, 2016 and 2015  
(in thousands)  
(unaudited)  
  Infrastructure
Group		 Aggregate and Mining
Group		 Energy
Group		 Corporate Total  
2016 Revenues     152,476       99,085       42,833       -        294,394    
2015 Revenues     116,097       98,829       53,116       -        268,042    
Change $     36,379       256       (10,283 )     -        26,352    
Change %   31.3 %   0.3 %   (19.4 %)     -      9.8 %  
             
2016 Gross Profit     36,583       26,141       10,514       214       73,452    
2016 Gross Profit %   24.0 %   26.4 %   24.5 %     -      25.0 %  
2015 Gross Profit     27,242       24,985       9,998       8       62,233    
2015 Gross Profit %   23.5 %   25.3 %   18.8 %     -      23.2 %  
Change     9,341       1,156       516       206       11,219    
             
2016 Profit (Loss)     19,673     10,947       2,626       (14,912 )     18,334    
2015 Profit (Loss)     11,845       10,056       701       (10,334 )     12,268    
Change $     7,828       891       1,925       (4,578 )     6,066    
Change %   66.1 %   8.9 %   274.6 %   (44.3 %)   49.4 %  
             
             
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    
     2016   2015  Change $    
Total profit for all segments $   18,334   $   12,268   $   6,066      
Elimination of intersegment profit     (193 )     (610 )     417      
Net loss attributable to non-controlling interest     51       147       (96 )    
Net income attributable to controlling interest  $   18,192   $   11,805   $   6,387      
             
             
Astec Industries, Inc.  
Segment Revenues and Profits  
For the six months ended June 30, 2016 and 2015  
(in thousands)  
(unaudited)  
  Infrastructure
Group		 Aggregate and Mining
Group		 Energy
Group		 Corporate Total  
2016 Revenues     305,590       191,573       75,953       -        573,116    
2015 Revenues     251,143       205,241       100,407       -        556,791    
Change $     54,447       (13,668 )     (24,454 )     -        16,325    
Change %   21.7 %   (6.7 %)   (24.4 %)     -      2.9 %  
             
2016 Gross Profit     76,420       51,289       17,596       103       145,408    
2016 Gross Profit %   25.0 %   26.8 %   23.2 %     -      25.4 %  
2015 Gross Profit     58,188       50,957       19,117       17       128,279    
2015 Gross Profit %   23.2 %   24.8 %   19.0 %     -      23.0 %  
Change     18,232       332       (1,521 )     86       17,129    
             
2016 Profit (Loss)     41,536       20,485       2,433       (29,137 )     35,317    
2015 Profit (Loss)     27,356       21,650       864       (22,300 )     27,570    
Change $     14,180       (1,165 )     1,569       (6,837 )     7,747    
Change %   51.8 %   (5.4 %)   181.6 %   (30.7 %)   28.1 %  
             
             
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):  
             
    Six months ended June 30    
     2016   2015  Change $    
Total profit for all segments $   35,317   $   27,570   $   7,747      
Recapture (elimination) of intersegment profit     502       (996 )     1,498      
Net loss attributable to non-controlling interest     116       335       (219 )    
Net income attributable to controlling interest  $   35,935   $   26,909   $   9,026      
             
             
Astec Industries, Inc.    
Backlog by Segment    
June 30, 2016 and 2015    
(in thousands)    
(unaudited)    
  Infrastructure
Group		 Aggregate and Mining
Group		 Energy
Group		 Total    
2016 Backlog     272,364       59,522       32,573       364,459      
2015 Backlog     106,376       74,445       48,653       229,474      
Change $     165,988       (14,923 )     (16,080 )     134,985      
Change %   156.0 %   (20.0 %)   (33.1 %)   58.8 %