Astec Industries (ASTE) Q4 2020 earnings summary

Executive summary

• 2020 net sales fell 12.4% YoY, while operating income rose to $43.0M and net income attributable to controlling interest more than doubled to $46.9M.

• Strategic transformation centered on Simplify, Focus and Grow; COVID-19 disrupted demand and temporarily closed two international Materials Solutions sites.

Financial highlights

• Net sales were $1,024.4M, down 12.4% YoY; excluding the 2019 $20.0M wood pellet plant sale, sales declined 10.9%.

• Gross profit rose 0.3% to $240.1M; excluding the 2019 pellet plant sale, gross profit increased 9.4% to $240.1M.

• Operating income increased to $43.0M from $25.1M; net income attributable to controlling interest was $46.9M versus $22.3M.

• Diluted EPS was $2.05, up from $0.98; Q4 net sales were $238.9M, net income attributable to controlling interest $15.4M and diluted EPS $0.67.

• Operating cash flow increased to $141.5M from $112.6M; year-end cash was $158.6M, up from $48.9M.

Outlook and guidance

• Year-end backlog reached $360.5M, up 36.7% YoY; management expected the full backlog to be filled in 2021.

• FAST Act funding was extended through September 30, 2021; management expected oil and steel prices to rise in 2021 as demand recovered and supply remained constrained.

• Tacoma operations were expected to cease in Q2 2021, with product lines transferring to other Infrastructure Solutions facilities by mid-2021.