Astec Industries Appoints New President And Chief Executive Officer And Reports Second Quarter 2019 Results
CHATTANOOGA, Tenn. (July 23, 2019) – Astec Industries, Inc. (Nasdaq: ASTE) announced today the appointment of Mr. Barry Ruffalo as its President and Chief Executive Officer to be effective on August 12, 2019. Mr. Ruffalo has also been elected to the Board of Directors. Mr. Ruffalo will join the Board of Directors as a Class I director and will stand for re-election at the Company’s 2020 annual meeting. On the effective date of Mr. Ruffalo’s appointment, Richard Dorris, Interim Chief Executive Officer, will resume his role as Chief Operating Officer.
Prior to his appointment, Mr. Ruffalo was employed by Valmont Industries, a publicly-traded diversified global producer of highly-engineered fabricated metal products, where he served in Group President roles since 2016, having previously served as its Executive Vice President, Operational Excellence beginning in 2015. Prior to his work with Valmont Industries, Mr. Ruffalo was employed by Lindsay Corporation, a publicly-traded global leader in proprietary water management and road infrastructure products and services.
“After a comprehensive search that included a number of highly qualified candidates, we are excited to hire Mr. Ruffalo,” said Bill Gehl, Chairman of Astec. “Barry brings a wealth of experience to Astec. He is a leader that has driven change, understands infrastructure and will add tremendous value.”
“I am excited to join Astec as its CEO and a member of the Board of Directors, said Mr. Ruffalo. “I look forward to moving forward with measures to make Astec more profitable and agile while building on the strength of its world-class products.”
In addition, the Company reported results for its second quarter ended June 30, 2019.
Net sales for the second quarter of 2019 were $304.8 million compared to $272.5 million for the second quarter of 2018, an 11.8% increase. Domestic sales increased 21.1% to $246.2 million for the second quarter of 2019 from $203.4 million for the second quarter of 2018. International sales decreased 15.3% to $58.6 million for the second quarter of 2019 from $69.1 million for the second quarter of 2018. During the quarter, the Company recognized $20.0 million of pre-tax profit on the sale of its Hazlehurst, Georgia wood pellet plant.
Net income for the second quarter of 2019 was $23.4 million or $1.03 per diluted share, compared to a net loss of $40.7 million or $1.76 per diluted share for the second quarter of 2018.
Net sales for the first half of 2019 were $630.6 million compared to $598.0 million for the first half of 2018, an increase of 5.5%. Domestic sales increased 7.5% to $509.0 million for the first half of 2019 from $473.5 million for the first half of 2018. International sales decreased 2.4% to $121.5 million for the first half of 2019 from $124.5 million for the first half of 2018.
Net income for the first half of 2019 was $37.7 million or $1.66 per diluted share, compared to a net loss of $20.4 million or $0.89 per diluted share for the first half of 2018.
The following financial information for the second quarter and first half of 2019 and 2018 excludes all of the impact of wood pellet plant activity on the Company’s results during those periods. International sales were not impacted by wood pellet plant activity in any period.
- Net sales for the second quarter of 2019 were $284.8 million compared to $347.1 million for the second quarter of 2018, a decrease of $62.3 million or 17.9%. Domestic sales decreased 18.6% to $226.2 million for the second quarter of 2019 from $277.9 million for the second quarter of 2018.
- Earnings for the second quarter of 2019 were $8.1 million or $0.36 per diluted share, compared to $24.0 million or $1.03 per diluted share for the second quarter of 2018, a decrease in earnings per share of 65.0%.
- Net sales for the first half of 2019 were $610.6 million compared to $672.8 million for the first half of 2018, a decrease of $62.2 million or 9.2%. Domestic sales decreased 10.8% to $489.0 million for the first half of 2019 from $548.2 million for the first half of 2018.
- Earnings for the first half of 2019 were $22.4 million or $0.99 per diluted share, compared to $46.9 million or $2.02 per diluted share for the first half of 2018, a decrease in earnings per share of 51.0%.
Commenting on the quarterly results, Richard Dorris, Interim Chief Executive Officer, stated, “We are pleased the sale of the Hazlehurst, Georgia wood pellet plant completely ended our involvement in the wood pellet plant business. Our EPS, less the payment received for the wood pellet plant, however, was $0.36 and below our expectations. The lower than expected earnings are a result of lower than projected volume and under absorption of production costs.”
The Company’s backlog at June 30, 2019 was $246.1 million, a decrease of $56.8 million or 18.8% compared to the June 30, 2018 backlog of $302.9 million. The June 30, 2019 backlog was up 4.1% or $9.6 million compared to the March 31, 2019 backlog of $236.5 million. Domestic backlog decreased 25.8% to $161.6 million at June 30, 2019 from $217.9 million at June 30, 2018. The international backlog at June 30, 2019 was $84.5 million compared to $85.0 million at June 30, 2018, remaining flat.
Mr. Dorris concluded, “We have experienced reduced demand in the first half of this year, but our ongoing strategic procurement and operational excellence initiatives along with manpower reductions at our most affected subsidiaries will help us maintain and improve profitability even if market conditions do not improve in the short term.”
Consolidated financial information for the second quarter and six months ended June 30, 2019 and additional information related to segment revenues and profits are attached as addenda to this press release.
Investor Conference Call and Web Simulcast
Astec will conduct a conference call today, July 23, 2019, at 10:00 A.M. Eastern Time, to review its second quarter and six-month results as well as current business conditions. The number to call for this interactive teleconference is (877) 407-9210. International callers should dial (201) 689-8049. Please reference Astec Industries.
The Company will also provide an online Web simulcast and rebroadcast of the conference call. The live broadcast of Astec’s conference call will be available online at the Company’s website: www.astecindustries.com/conferencecalls. An archived webcast will be available for 90 days at www.astecindustries.com.
A replay of the conference call will be available through August 6, 2019 by dialing (877) 481-4010, or (919) 882-2331 for international callers, Replay ID #50107. A transcription 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.
Astec Industries, Inc. (www.astecindustries.com), is a manufacturer of specialized equipment for asphalt road building; aggregate processing; diversified industrial applications and concrete production. Astec's manufacturing operations are divided into three primary business segments: road building, specialized industrial products and related equipment (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and equipment for the extraction and production of fuels, commercial and industrial burners, concrete production and water drilling equipment (Energy Group).
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) product demand and pricing pressure, (ii) the effect of its strategic sourcing project (iii) efforts to adjust manufacturing capacity, and (iv) its backlog activity. 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:
Richard J. Dorris
Interim Chief Executive Officer & Chief Operating Officer
Phone: (423) 867-4210
Fax: (423) 867-4127
David C. Silvious
Vice President and Chief Financial Officer
Phone: (423) 899-5898
Fax: (423) 899-4456
Stephen C. Anderson
Vice President, Director of Investor Relations & Corporate Secretary
Phone: (423) 899-5898
Fax: (423) 899-4456