Astec Industries (ASTE) Q4 2013 earnings summary

Executive summary

• 2013 net sales were $933.0M, down 0.3% YoY; net income from continuing operations rose to $39.2M from $34.2M, while diluted EPS was $1.69 vs. $1.77.

• Domestic sales increased 4.6% to $599.1M, while international sales fell 8.2% to $333.9M; year-end backlog rose 10.0% to $290.2M.

Financial highlights

• Operating income increased to $55.7M from $51.1M; gross profit was $207.1M vs. $208.0M.

• Net income attributable to controlling interest was $39.0M vs. $40.8M, a 4.4% decline; 2012 included $6.8M from discontinued operations.

• Operating cash flow was $5.9M vs. $28.6M, primarily reflecting receivables and customer deposits; investing activities used $42.2M.

• Parts sales rose 0.4% to $246.9M and represented 26.5% of sales, up 20 bps YoY.

Outlook and guidance

• 2014 capital expenditures forecast at $39.2M, funded by cash, short-term investments, operating cash flow, credit availability and local financing for Brazil.

• Targeting a 50% domestic / 50% international revenue mix within 3–5 years; plans to expand through new products, market-share gains and strategically fitting acquisitions.

• Brazil manufacturing facility expected to begin production mid-to-late 2014; 2014 plans also included pursuing acquisitions and presenting 41 new products at ConExpo.

• Management expected steel prices near current levels in the short term, oil prices to fluctuate during 2014 and the U.S. dollar to remain strong near term.