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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 28, 2006 ASTEC INDUSTRIES, INC. (Exact Name of Registrant as Specified in Charter) Tennessee 0-14714 62-0873631 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)
1725 Shepherd Road
Chattanooga, Tennessee 37421
(Address of Principal Executive Offices and Zip Code)
(423) 899-5898
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-d(b))
[ ] Pre commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
The information, including the exhibits attached hereto, in this Current Report on Form 8-K is being "furnished" and shall not be deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed by the Company pursuant to the Securities Act of 1933, as amended, or into any other filing or document made by the Company pursuant to the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.
Attached and incorporated herein by reference as Exhibit 99.1 is a copy of the press release of Astec Industries, Inc., dated February 28, 2006, reporting the Company's financial results for the quarter and year ended December 31, 2005.
Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.
|
(c) |
Exhibits . The following exhibits are furnished herewith: |
|
|
|
Exhibit No. |
|
Exhibit Description |
99.1 |
|
Press Release, dated February 28, 2006 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ASTEC INDUSTRIES, INC.
Date: February 28, 2006 |
By: /s/ J. Don Brock |
|
J. Don Brock, Chairman of the Board |
|
And President (Principal Executive Officer) |
Index to Exhibits |
|
|
|
Exhibit No. |
Exhibit Description |
99.1 |
Press Release, dated February 28, 2006. |
ASTEC INDUSTRIES REPORTS FOURTH QUARTER
AND 2005 RESULTS
CHATTANOOGA, Tenn. (February 28, 2006) - Astec Industries, Inc. (Nasdaq: ASTE) today reported results for the fourth quarter and year ended December 31, 2005.
Income from continuing operations was $1.34 per diluted share for 2005 compared to $0.62 per diluted share for 2004 for an increase of $0.72 per diluted share for a 116.1% increase. As of December 31, 2005, the company had achieved its goal of paying off all outstanding obligations under its credit facilities.
Revenues for 2005 were $616.1 million compared with $504.6 million for 2004 for an increase of 22.1%. Domestic sales were $499.8 million for 2005, or 81.1% of 2005 revenues, compared to domestic sales of $382.0 million for 2004, or 75.7% of 2004 revenues. International sales were $116.3 million for 2005, 18.9% of 2005 revenues, compared to international sales of $122.6 million for 2004, or 24.3% of 2004 revenues. The Company reported a net income of $28.1 million, or $1.34 per diluted share, for 2005 compared with a net income of $19.1 million, or $0.95 per diluted share, for the prior year.
Revenues for the fourth quarter of 2005 were $134.5 million compared with $111.2 million for the fourth quarter of 2004 for an increase of 21.0%. Domestic sales were $108.8 million for the fourth quarter of 2005, or 80.9% of 2005 fourth quarter revenues, compared to domestic sales of $85.4 million for the fourth quarter of 2004, or 76.8% of 2004 fourth quarter revenues. International sales were $25.7 million for the fourth quarter of 2005, or 19.1% of 2005 fourth quarter revenues, compared to international sales of $25.8 million for the fourth quarter of 2004, or 23.2% of 2004 fourth quarter revenues. The Company reported a net income of $1.0 million, or $0.05 per diluted share, for the fourth quarter of 2005 compared with a net income of $0.3 million, or $0.01 per diluted share, for the fourth quarter of 2004.
The Company sold substantially all of the assets and liabilities of Superior Industries of Morris, Inc. on June 30, 2004. The results from discontinued operations are presented in the income from discontinued operations line and the gain on disposal of discontinued operations (net of tax) and are excluded from all other lines on the consolidated statement of operations.
Consolidated financial statements for the fourth quarter and year ended December 31, 2005 and additional information related to segment revenues and profits are attached as addenda to this press release.
Astec's backlog at December 31, 2005 was $127.7 million compared to $93.5 million for 2004 for $34.2 million increase or 36.6% increase. Astec's backlog at January 31, 2006, was $161.0 million compared with $114.4 million at January 31, 2005 for a $46.6 million increase or 40.7% increase.
Commenting on the announcement, Dr. J. Don Brock, Chairman and Chief Executive Officer, stated, "We are pleased with our revenues and profits for 2005. The fourth quarter was seasonably weak, but remained profitable. We were disappointed in the fourth quarter results for the Underground Group. We continue to develop our dealer distribution network for the Underground Group, but our underabsorbed overhead was significant in the fourth quarter."
"We are starting 2006 with strong backlogs. We will continue to focus on efficient manufacturing and design concepts, production costs, and raw material costs as we strive to improve our gross margins."
Dr. Brock added, "With our backlog up significantly, an improving economy, highway funding legislation in place, our efficiency initiatives, and a strong balance sheet, we are excited about what can be accomplished in growing the business in both revenues and profits."
During the course of the annual audit, management, and the independent auditors, identified significant deficiencies in internal controls primarily related to the adequacy of inventory controls, accounting system access controls, journal entry authorization, and monitoring controls related to Astec Underground, Inc. When aggregated, these deficiencies represent a material weakness in the Company's internal controls over financial reporting. The Audit Committee has discussed these matters with management and the Company's independent auditors, and at the direction of the Audit Committee, management has initiated several actions to remedy these significant deficiencies.
Commenting on the identified material weakness, Dr. Brock said, "We have addressed the deficiencies in the internal control procedures at Astec Underground and are taking appropriate action. Despite the material weakness identified in the course of the audit, we remain confident in the reliability of the financial reporting and our preparation of the Company's financial statements."
Investor Conference Call and Web Simulcast
Astec will conduct a conference call on February 28, 2006, at 11:00 a.m. EST to review its fourth quarter and fiscal 2005 financial results as well as its near term general outlook for 2006. The number to call for this interactive teleconference is (877) 407-9210. 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 at: www.astecindustries.com/investors/corporate info/conference calls/default.htm.
An archived webcast will be available for 90 days at www.astecindustries.com.
A replay of the conference call will be available through midnight on Tuesday, March 7, 2006, by dialing (877) 660-6853; account number: 286; conference ID number: 193940 . A transcription of the conference call will be made available under the investor relations section of the Astec Industries, Inc. website within seven days after the call.
Astec Industries, Inc. is a manufacturer of specialized equipment for building and restoring the world's infrastructure. Astec's manufacturing operations are divided into four business segments: aggregate processing and mining equipment; asphalt production equipment; mobile asphalt paving equipment; and underground boring, directional drilling and trenching equipment.
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 for 2006, the effects on the Company from its backlog, the renewal of the highway bill, the effects of improvements in the economy on our customers, the effects of a debt-free balance sheet, and the effects of our efficiency initiatives. 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-lookin g statements. Important factors that could cause future events or actual results to differ materially include: general uncertainty in the economy, future downturns in the economy, rising oil and liquid asphalt prices, rising steel prices, a failure to comply in the future with covenants in the Company's credit facility or to obtain waivers thereof, rising interest rates, decreased funding for highway projects, 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 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, 2004 and the Company's quarterly reports on Forms 10-Q for the quarters ended March 31, June 30 and September 30, 2005. The Company plans to file its Form 10-K timely by March 16, 2006.
For Additional Information Contact:
J. Don Brock
Chairman of the Board & C.E.O.
Phone: (423) 867-4210
Fax: (423) 867-4127
E-mail: d brock@astecindustries.com
or
F. McKamy Hall
Vice President and Chief Financial Officer
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: mhall@astecindustries.com
or
Stephen C. Anderson
Director of Investor Relations
Phone: (423) 899-5898
Fax: (423) 899-4456
E-mail: sanderson@astecindustries.com
Consolidated Balance Sheets |
|||
(In thousands) |
|||
(unaudited) |
|||
December 31 |
December 31 |
||
2005 |
2004 |
||
Assets |
|||
Current Assets |
|||
Cash and cash equivalents |
$ 22,598 |
$ 8,349 |
|
Receivables, net |
53,395 |
45,289 |
|
Inventories |
135,503 |
126,970 |
|
Prepaid expenses and other |
14,532 |
17,877 |
|
Total current assets |
226,028 |
198,485 |
|
Property and equipment, net |
96,114 |
96,526 |
|
Other assets |
24,441 |
29,807 |
|
Total assets |
$ 346,583 |
$ 324,818 |
|
Liabilities and shareholders' equity |
|||
Current liabilities |
|||
Revolving credit loan |
$ - |
$ 8,517 |
|
Current maturities of long-term debt |
- |
3,310 |
|
Accounts payable - trade |
39,775 |
35,451 |
|
Other accrued liabilities |
48,273 |
44,718 |
|
Total current liabilities |
88,048 |
91,996 |
|
Long-term debt, less current maturities |
- |
25,857 |
|
Other non-current liabilities |
15,201 |
15,134 |
|
Minority interest in consolidated subsidiary |
592 |
575 |
|
Total shareholders' equity |
242,742 |
191,256 |
|
Total liabilities and shareholders' equity |
$ 346,583 |
$ 324,818 |
|
Astec Industries, Inc. and Subsidiaries |
||||||
Consolidated Statements of Operations |
||||||
(In thousands) |
||||||
(unaudited) |
||||||
Three Months |
Twelve Months |
|||||
Ended |
Ended |
|||||
December 31 |
December 31 |
|||||
2005 |
2004 |
2005 |
2004 |
|||
Net sales |
$134,516 |
$111,171 |
$616,068 |
$504,554 |
||
Cost of sales |
108,726 |
90,786 |
482,760 |
401,482 |
||
Gross profit |
25,790 |
20,385 |
133,308 |
103,072 |
||
Selling, general, administrative & engineering expenses |
24,558 |
19,034 |
93,579 |
78,739 |
||
Gain on sale of real estate, net of real estate impairment charge |
- |
- |
6,531 |
- |
||
Income (loss) from operations |
1,232 |
1,351 |
46,260 |
24,333 |
||
Interest expense |
691 |
1,142 |
4,209 |
5,033 |
||
Other income, net of expense |
705 |
87 |
896 |
314 |
||
Income (loss) from continuing operations before income taxes |
1,246 |
296 |
42,947 |
19,614 |
||
Income taxes on continuing operations |
207 |
(391) |
14,748 |
7,021 |
||
Minority interest in earnings |
17 |
64 |
105 |
111 |
||
Income (loss) from continuing operations |
1,022 |
623 |
28,094 |
12,482 |
||
Income from discontinued operations |
- |
13 |
- |
2,320 |
||
Income taxes on discontinued operations |
- |
(267) |
- |
(1,155) |
||
Gain on disposal of discontinued operations (net of tax of $5,071) |
- |
(101) |
- |
5,406 |
||
Net income (loss) |
$ 1,022 |
$ 268 |
$ 28,094 |
$ 19,053 |
||
Earnings (Loss) per Common Share |
||||||
Income (loss) from continuing operations: |
||||||
Basic |
$ 0.05 |
$ 0.03 |
$ 1.38 |
$ 0.63 |
||
Diluted |
$ 0.05 |
$ 0.03 |
$ 1.34 |
$ 0.62 |
||
Income from discontinued operations: |
||||||
Basic |
$ - |
$ (0.02) |
$ - |
$ 0.33 |
||
Diluted |
$ - |
$ (0.02) |
$ - |
$ 0.33 |
||
Net income (loss): |
||||||
Basic |
$ 0.05 |
$ 0.01 |
$ 1.38 |
$ 0.96 |
||
Diluted |
$ 0.05 |
$ 0.01 |
$ 1.34 |
$ 0.95 |
||
Weighted average common shares outstanding |
||||||
Basic |
20,890,737 |
19,865,688 |
20,333,894 |
19,740,699 |
||
Diluted |
21,504,590 |
20,271,167 |
20,976,966 |
20,079,349 |
||
Astec Industries, Inc. and Subsidiaries |
||||||
Segment Revenues and Profits |
||||||
For the three months ended December 31, 2005 and 2004 |
||||||
(in thousands) |
||||||
(Unaudited) |
||||||
Asphalt Group |
Aggregate and Mining Group* |
Mobile Asphalt Paving Group |
Underground Group |
All Others |
Total |
|
2005 Revenues |
$ 33,919 |
$ 56,238 |
$ 21,563 |
$ 22,796 |
$ - |
$ 134,516 |
2004 Revenues |
26,590 |
52,617 |
21,769 |
9,910 |
285 |
111,171 |
Change $ |
7,329 |
3,621 |
(206) |
12,886 |
(285) |
23,345 |
Change % |
27.6% |
6.9% |
(0.9%) |
130.0% |
(100.0%) |
21.0% |
2005 Gross Profit |
$ 6,643 |
$ 12,243 |
$ 4,881 |
$ 2,076 |
$ (53) |
$ 25,790 |
2005 Gross Profit % |
19.6% |
21.8% |
22.6% |
9.1% |
- |
19.2% |
2004 Gross Profit |
2,605 |
13,579 |
4,709 |
380 |
(888) |
20,385 |
2004 Gross Profit % |
9.8% |
25.8% |
21.6% |
3.8% |
(311.6%) |
18.3% |
Change |
4,038 |
(1,336) |
172 |
1,696 |
835 |
5,405 |
2005 Profit (Loss) |
$ 1,837 |
$ 3,508 |
$ 1,964 |
$ (2,142) |
$ (3,880) |
$ 1,287 |
2004 Profit (Loss) |
(1,925) |
5,548 |
1,676 |
(2,047) |
(2,699) |
553 |
Change $ |
3,762 |
(2,040) |
288 |
(95) |
(1,181) |
734 |
Change % |
195.4% |
(36.8%) |
17.2% |
(4.6%) |
(43.8%) |
132.7% |
* The segment data for 2004 has been adjusted to reflect the sale of Superior Industries of Morris, Inc. |
||||||
Segment revenues are reported net of intersegment revenues. Segment gross profit is net of profit on intersegment revenues. A reconcilation of total segment profits to the Company's consolidated net income is as follows: |
||||||
For the three months ended December 31 |
||||||
2005 |
2004 |
|||||
Total profit for all segments |
$ 1,287 |
$ 553 |
||||
Minority interest in earnings of subsidiary |
(17) |
(64) |
||||
Recapture (elimination) of intersegment profit |
(248) |
134 |
||||
Consolidated net income from continuing operations |
1,022 |
623 |
||||
Loss from discontinued operations, net of tax |
- |
(254) |
||||
Loss on sale of discontinued operations, net of tax |
- |
(101) |
||||
Consolidated net income |
$ 1,022 |
$ 268 |
||||
Astec Industries, Inc. and Subsidiaries |
||||||
Segment Revenues and Profits |
||||||
For the twelve months ended December 31, 2005 and 2004 |
||||||
(in thousands) |
||||||
(Unaudited) |
||||||
Asphalt Group |
Aggregate and Mining Group* |
Mobile Asphalt Paving Group |
Underground Group |
All Others |
Total |
|
2005 Revenues |
$ 170,205 |
$ 242,515 |
$ 112,947 |
$ 90,401 |
$ - |
$ 616,068 |
2004 Revenues |
141,050 |
207,397 |
91,390 |
64,386 |
331 |
504,554 |
Change $ |
29,155 |
35,118 |
21,557 |
26,015 |
(331) |
111,514 |
Change % |
20.7% |
16.9% |
23.6% |
40.4% |
(100.0%) |
22.1% |
2005 Gross Profit |
$ 36,236 |
$ 57,195 |
$ 25,943 |
$ 14,050 |
$ (116) |
$ 133,308 |
2005 Gross Profit % |
21.3% |
23.6% |
23.0% |
15.5% |
- |
21.6% |
2004 Gross Profit |
25,332 |
49,695 |
20,565 |
9,127 |
(1,647) |
103,072 |
2004 Gross Profit % |
18.0% |
24.0% |
22.5% |
14.2% |
(497.6%) |
20.4% |
Change |
10,904 |
7,500 |
5,378 |
4,923 |
1,531 |
30,236 |
2005 Profit (Loss) |
$ 16,099 |
$ 22,554 |
$ 12,291 |
$ 6,301 |
$ (28,820) |
$ 28,425 |
2004 Profit (Loss) |
8,109 |
19,685 |
7,554 |
(1,653) |
(21,205) |
12,490 |
Change $ |
7,990 |
2,869 |
4,737 |
7,954 |
(7,615) |
15,935 |
Change % |
98.5% |
14.6% |
62.7% |
481.2% |
(35.9%) |
127.6% |
Unusual items by segment |
||||||
2005 Profit (Loss) |
$ 16,099 |
$ 22,554 |
$ 12,291 |
$ 6,301 |
$ (28,820) |
$ 28,425 |
Gain on Sale of Grapevine |
- |
- |
- |
(7,714) |
2,978 |
(4,736) |
Real estate impairment Charge |
1,183 |
- |
- |
- |
(457) |
726 |
Chargeoff of prepaid loan fees |
- |
- |
- |
- |
319 |
319 |
2005 Profit (Loss) Less Unusual Items |
$ 17,282 |
$ 22,554 |
$ 12,291 |
$ (1,413) |
$ (25,980) |
$ 24,734 |
2004 Profit (Loss) |
8,109 |
19,685 |
7,554 |
(1,653) |
(21,205) |
12,490 |
Change $ |
9,173 |
2,869 |
4,737 |
240 |
(4,775) |
12,244 |
Change % |
113.1% |
14.6% |
62.7% |
14.5% |
(22.5%) |
98.0% |
* The segment data for 2004 has been adjusted to reflect the sale of Superior Industries of Morris, Inc. |
||||||
The gain on the sale of the Grapevine facility is included in the Underground Group. The real estate impairment charge is included in the Asphalt Group. The charge off of prepaid loan fees is included in the "All Others" segment. |
||||||
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 consolidated net income is as follows: |
||||||
For the twelve months ended December 31 |
||||||
2005 |
2004 |
|||||
Total profit for all segments |
$ 28,425 |
$ 12,490 |
||||
Minority interest in earnings of subsidiary |
(105) |
(111) |
||||
Recapture (elimination) of intersegment profit |
(226) |
103 |
||||
Consolidated net income from continuing operations |
28,094 |
12,482 |
||||
Income from discontinued operations, net of tax |
- |
1,165 |
||||
Gain on sale of discontinued operations, net of tax |
- |
5,406 |
||||
Consolidated net income |
$ 28,094 |
$ 19,053 |
||||
Astec Industries, Inc. and Subsidiaries |
||||||
Backlog by Segment |
||||||
December 31, 2005 and 2004 |
||||||
(in thousands) |
||||||
(Unaudited) |
||||||
Asphalt Group |
Aggregate and Mining Group |
Mobile Asphalt Paving Group |
Underground Group |
All Others |
Total |
|
2005 Backlog |
$ 37,426 |
$ 76,991 |
$ 7,519 |
$ 5,758 |
$ - |
$ 127,694 |
2004 Backlog |
35,647 |
47,311 |
5,363 |
5,222 |
- |
93,543 |
Change $ |
1,779 |
29,680 |
2,156 |
536 |
- |
34,151 |
Change % |
5.0% |
62.7% |
40.2% |
10.3% |
- |
36.5% |