Astec Industries (ASTE) Q4 2005 earnings summary

Executive summary

• FY05 delivered 22.1% growth in continuing-operations sales and higher net income; margins improved, though purchased-part inflation limited gains.

• Backlog reached $127.7M at year-end, up 36.5% YoY, with the largest increase in Aggregate and Mining.

Financial highlights

• Net sales were $616.1M vs. $504.6M in FY04; net income was $28.1M vs. $19.1M.

• Diluted EPS was $1.34 vs. $0.95; continuing-operations diluted EPS was $1.34 vs. $0.62.

• Q4 sales were $134.5M vs. $111.2M; gross profit was $25.8M vs. $20.4M and net income was $1.0M vs. $0.3M.

• Domestic sales rose 30.9% to $499.8M; international sales fell 5.2% to $116.2M. Parts sales increased to $144.2M from $116.5M.

Outlook and guidance

• Management targeted an average 10% annual internal growth rate and expected prior peak performance to be achievable in 2006–07 if economic conditions remain strong and pricing/cost actions offset input inflation.

• 2006 capital expenditures were budgeted at ~$29M, funded by internal cash flow and revolver capacity; 2006–07 facility expansions were planned to meet demand.

• 2006 plans included a new soil-stabilizer product line, coal-fired burner development and further product launches; the coal burner’s R&D was expected to finish in H1.