Astec Reports Third Quarter 2024 Results
Third Quarter 2024 Overview (all comparisons are made to the corresponding prior year third quarter unless otherwise specified):
Net sales of $291.4 million decreased 3.9%
Net loss of $6.2 million, which included an $8.4 million charge related to the settlement of a legacy litigation matter: Adjusted net income of $7.0 million
EBITDA of $0.6 million declined $1.2 million; Adjusted EBITDA was $17.4 million, an increase of $7.4 million
Diluted EPS of $(0.27) compared to $(0.29); Adjusted EPS of $0.31 compared to $(0.01)
Operating cash flow of $22.5 million; Free cash flow of $19.9 million
CHATTANOOGA, Tenn., Nov. 06, 2024 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (NASDAQ:ASTE) announced today its financial results for the third quarter ended September 30, 2024.
"In the third quarter, we had mixed results. In Infrastructure Solutions, both sales and margins were up for the quarter, while in Materials Solutions, we continued to face difficult market conditions. We made nice progress improving our cash flow in the third quarter, which continues to be a key focal point. We were also able to settle one of our previously disclosed, long-standing, legacy litigation matters related to a product we no longer own, which resulted in an $8.4 million charge in the third quarter," said Jaco van der Merwe, Chief Executive Officer.
Mr. van der Merwe continued, "With sound fundamentals in place, we continue to focus on commercial and operational excellence. We have a customer-focused approach and product offerings to drive sustainable value creation for our shareholders."
GAAP
Adjusted
(in millions, except per share and percentage data)
3Q 2024
3Q 2023
Change
3Q 2024
3Q 2023
Change
Net sales
$
291.4
$
303.1
(3.9
)%
Domestic sales
211.2
229.6
(8.0
)%
International sales
80.2
73.5
9.1
%
Backlog
475.8
614.7
(22.6
)%
Domestic backlog
377.6
510.6
(26.0
)%
International backlog
98.2
104.1
(5.7
)%
(Loss) income from operations
(7.2
)
(5.2
)
(38.5
)%
9.9
3.1
219.4
%
Operating margin
(2.5
)%
(1.7
)%
(80) bps
3.4
%
1.0
%
240 bps
Effective tax rate
27.1
%
8.5
%
1,860 bps
18.6
%
108.3
%
(8,970) bps
Net (loss) income attributable to controlling interest
(6.2
)
(6.6
)
6.1
%
7.0
(0.2
)
3600.0
%
Diluted EPS
(0.27
)
(0.29
)
6.9
%
0.31
(0.01
)
3200.0
%
EBITDA (a non-GAAP measure)
0.6
1.8
(66.7
)%
17.4
10.0
74.0
%
EBITDA margin (a non-GAAP measure)
0.2
%
0.6
%
(40) bps
6.0
%
3.3
%
270 bps
Segments Results
Our two reportable segments are comprised of sites based upon the nature of the products or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations. Based on a review of these factors, our Australia and LatAm sites, which were previously reported in the Infrastructure Solutions segment have moved to the Materials Solutions segment and Astec Digital, which was previously included in the Corporate and Other category has moved to the Infrastructure Solutions segment, each beginning January 1, 2024. Prior periods have been revised to reflect the changes for the segment composition for comparability.
Infrastructure Solutions - Road building equipment, asphalt and concrete plants, thermal storage solutions and related aftermarket parts.
Net sales of $165.0 million increased slightly as the infrastructure construction market remains strong with healthy demand for asphalt and concrete plant deliveries anticipated through the beginning of 2025.
Segment Operating Adjusted EBITDA of $15.6 million increased 17.3% and Segment Operating Adjusted EBITDA margin of 9.5% increased 140 basis points.
Backlog was $351.1 million.
Materials Solutions - Processing equipment to crush, screen and convey aggregates and related aftermarket parts.
Net sales of $126.4 million decreased by 9.6% primarily due to lower equipment sales attributable to finance capacity constraints with contractors and dealers resulting in fewer product conversions. Dealer quoting remains active.
Segment Operating Adjusted EBITDA of $14.5 million increased 52.6% and Segment Operating Adjusted EBITDA margin of 11.5% increased 470 basis points, due to a $6.4 million legal charge in the prior year third quarter, continued efforts towards cost reduction and sharing facility capacity with the Infrastructure Solutions segment.
Backlog was $124.7 million.
Balance Sheet, Cash Flow and Liquidity
Our total liquidity was $195.1 million, consisting of $52.7 million of cash and cash equivalents available for operating purposes and $142.4 million available for additional borrowings under our revolving credit facility.
Free Cash Flow in the quarter was $19.9 million after incurring capital expenditures of $2.6 million.
Third Quarter Capital Allocation
Dividend payment of $0.13 per share.
Investor Conference Call and Webcast
Astec will conduct a conference call and live webcast today, November 6, 2024, at 8:30 A.M. Eastern Time, to review its third quarter financial results as well as current business conditions.
To access the call, dial (888) 440-4118 on Wednesday, November 6, 2024 at least 10 minutes prior to the scheduled time for the call. International callers should dial (646) 960-0833.
You may also access a live webcast of the call at: https://events.q4inc.com/attendee/885477721
You will need to give your name and company affiliation and reference Astec. An archived webcast will be available for ninety days at www.astecindustries.com.
A replay of the call can be accessed until November 20, 2024 by dialing (800) 770-2030, or (609) 800-9909 for international callers, Conference ID# 8741406. 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
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 plants, thermal and storage solutions; and Materials Solutions that include our aggregate processing equipment. Astec also operates a line of controls and automation products designed to deliver enhanced productivity through improved equipment performance.
Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995
This News Release contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in this News Release that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "supports," "plans," "projects," "expects," "believes," "should," "would," "could," "forecast," "management is of the opinion," use of the future tense and similar words or phrases. These forward-looking statements are based largely on management's expectations, which are subject to a number of known and unknown risks, uncertainties and other factors discussed and described in our most recent Annual Report on Form 10-K, including those risks described in Part I, Item 1A. Risk Factors thereof, and in other reports filed subsequently by us with the Securities and Exchange Commission, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.
Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding the Company's results, the Company refers to various U.S. GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures which management believes provides useful information to investors. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore may not be comparable to the calculation of similar measures for other companies. Management of the Company does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. Nonetheless, this non-GAAP information can be useful in understanding the Company's operating results and the performance of its core business. Management of the Company uses both GAAP and non-GAAP financial measures to establish internal budgets and targets and to evaluate the Company's financial performance against such budgets and targets. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in this News Release.
For Additional Information Contact: Steve Anderson Senior Vice President of Administration and Investor RelationsPhone: (423)
Certain reclassifications have been made to the prior period financial information included in this News Release to conform to the presentation used in the financial statements for the three months ended September 30, 2024.
Astec Industries Inc.Condensed Consolidated Statements of Operations(In millions, except shares in thousands and per share amounts; unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Net sales
$
291.4
$
303.1
$
946.1
$
1,001.0
Cost of sales
224.6
233.5
721.1
759.3
Gross profit
66.8
69.6
225.0
241.7
Operating expenses:
Selling, general and administrative expenses
65.6
74.3
208.1
206.7
Goodwill impairment
—
—
20.2
—
Restructuring, other impairment and asset charges, net
8.4
0.5
8.3
5.3
Total operating expenses
74.0
74.8
236.6
212.0
(Loss) income from operations
(7.2
)
(5.2
)
(11.6
)
29.7
Other expenses, net:
Interest expense
(2.6
)
(2.4
)
(8.4
)
(6.4
)
Other income, net
1.3
0.5
2.5
2.0
(Loss) income before income taxes
(8.5
)
(7.1
)
(17.5
)
25.3
Income tax (benefit) provision
(2.3
)
(0.6
)
(0.6
)
6.5
Net (loss) income
(6.2
)
(6.5
)
(16.9
)
18.8
Net (income) loss attributable to noncontrolling interest
—
(0.1
)
0.1
(0.2
)
Net (loss) income attributable to controlling interest
$
(6.2
)
$
(6.6
)
$
(16.8
)
$
18.6
Earnings per common share
Basic
$
(0.27
)
$
(0.29
)
$
(0.74
)
$
0.82
Diluted
(0.27
)
(0.29
)
(0.74
)
0.82
Weighted average shares outstanding
Basic
22,816
22,747
22,792
22,709
Diluted
22,816
22,747
22,792
22,776
Astec Industries Inc.Reportable Segment Net Sales and Operating Adjusted EBITDA(In millions, except percentage data; unaudited)
Reportable segment net sales exclude intersegment sales.
Three Months Ended September 30,
2024
2023
$ Change
% Change
Revenues from external customers
Infrastructure Solutions
$
165.0
$
163.2
$
1.8
1.1
%
Materials Solutions
126.4
139.9
(13.5
)
(9.6
)%
Net sales
$
291.4
$
303.1
$
(11.7
)
(3.9
)%
Segment Operating Adjusted EBITDA
Infrastructure Solutions
$
15.6
$
13.3
$
2.3
17.3
%
Materials Solutions
14.5
9.5
5.0
52.6
%
Segment Operating Adjusted EBITDA - Reportable Segments
30.1
