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Astec Industries Inc. Reports Operating Results (10-Q)

November 09, 2010 | About:
10qk

10qk

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Astec Industries Inc. (ASTE) filed Quarterly Report for the period ended 2010-09-30.

Astec Industries Inc. has a market cap of $725.6 million; its shares were traded at around $32.08 with a P/E ratio of 29.7 and P/S ratio of 1. Astec Industries Inc. had an annual average earning growth of 8.1% over the past 5 years.ASTE is in the portfolios of Irving Kahn of Kahn Brothers & Company Inc., Manning & Napier Advisors, Inc, Chuck Royce of Royce& Associates, Bruce Kovner of Caxton Associates, Arnold Van Den Berg of Century Management, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

Domestic sales for the third quarter of 2010 were $98,602,000 or 55.4% of consolidated net sales compared to $101,241,000 or 61.0% of consolidated net sales for the third quarter of 2009, a decrease of $2,639,000, or 2.6%. International sales for the third quarter of 2010 were $79,251,000 or 44.6% of consolidated net sales compared to $64,843,000 or 39.0% of consolidated net sales for the third quarter of 2009, an increase of $14,408,000 or 22.2%. Domestic sales were negatively impacted by the lack of action by Congress in renewing the long-term highway bill to replace the previous bill that expired in September 2009. The overall increase in international sales for the third quarter of 2010 compared to the third quarter of 2009 is due to improved economic conditions in several of the international markets the company serves and the adoption of stimulus packages with significant emphasis on the development of highways and other infrastructure projects. The increases occurred primarily in the Middle East, Canada, Australia, Africa and Asia.

Domestic sales for the first nine months of 2010 were $357,341,000 or 61.6% of consolidated net sales compared to $362,422,000 or 64.7% of consolidated net sales for the first nine months of 2009, a decrease of $5,081,000 or 1.4%. International sales for the first nine months of 2010 were $223,216,000 or 38.4% of consolidated net sales compared to $197,809,000 or 35.3% of consolidated net sales for the first nine months of 2009, an increase of $25,407,000 or 12.8%. Domestic sales were negatively impacted by the lack of action by Congress in renewing the new long-term highway bill to replace the previous bill that expired in September 2009. The overall increase in international sales for the first nine months of 2010 compared to the first nine months of 2009 is due to improved economic conditions in several of the international markets the company serves and the adoption of stimulus packages with significant emphasis on the development of highways and other infrastructure projects. The year-to-date increases occurred primarily in Canada, South America, Africa, Central America and Australia.

Selling, general, administrative and engineering expenses for the third quarter of 2010 were $31,808,000, or 17.9% of net sales, compared to 30,445,000, or 18.3% of net sales, for the third quarter of 2009, an increase of $1,363,000, or 4.5%. The increase was composed of increases in SERP expense of $496,000 and restricted stock expense of $410,000, both of which primarily resulted from an increase in the Company s stock price during the third quarter of 2010, along with a decrease in the Company s stock price during the third quarter of 2009 plus increases in sales salaries and commissions of $596,000 and sales promotions and accommodations of $536,000. These increased expenses were offset by a decrease in research and development expense of $608,000.

Selling, general, administrative and engineering expenses for the nine months ending September 30, 2010 were $95,351,000, or 16.4% of net sales, compared to $93,478,000, or 16.7% of net sales, for the first nine months of 2009, an increase of $1,873,000, or 2.0%. The increase was primarily due to an increase in profit sharing expense of $1,091,000 due to improved performance at certain subsidiaries, increases in SERP expense of $692,000 and restricted stock expense of $546,000, both of which primarily resulted from an increase in the Company s stock price during the nine months ended September 30, 2010 along with a decrease in the Company s stock price during the same period in 2009, plus increases in sales salaries and commissions of $1,501,000. These increased expenses were offset by decreases in research and development expense of $990,000 and bad debt expense of $871,000.

The Company had net income attributable to controlling interest of $26,464,000 for the nine months ending September 30, 2010 compared to $18,524,000 in the first nine months of 2009, an increase of $7,940,000, or 42.9%. Earnings per diluted share were $1.16 in the first nine months of 2010 compared to $0.82 in the first nine months of 2009, an increase of $0.34 or 41.5%. Diluted shares outstanding for the nine-month periods ended September 30, 2010 and 2009 were 22,814,634 and 22,711,526, respectively. The increase in shares outstanding is primarily due to the exercise of stock options by employees of the Company.

The backlog of orders at September 30, 2010 was $145,643,000 compared to $144,282,000 at September 30, 2009, an increase of $1,361,000, or 0.9%. The increase in backlog is due to an increase in domestic backlogs of $8,000,000 or 11.5% offset by a decrease in international backlogs of $6,639,000 or 8.9%. The increase in backlogs was also due primarily to an increase in the backlog of the Mobile Asphalt Paving Group of $1,795,000 or 41.3% and the Underground Group of $1,343,000 or 45.6%, offset by a decrease in the backlog of the Asphalt Group of $2,294,000 or 3.0%. The Company is unable to determine whether the changes in backlogs were experienced by the industry as a whole; however, the Company believes the changes in backlogs reflect the current economic conditions the industry is experiencing.

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