Optimizing Stakeholder Returns With Safety, Quality and Productivity

Transcription

1 Optimizing Stakeholder Returns With Safety, Quality and Productivity Investor Presentation 1

2 Safe Harbor 2 This presentation and discussion may contain forward-looking statements regarding the future performance of the Company, including representations about the Company's future financial performance, market conditions, the long-term growth prospects of the Company and its markets, opportunities for market share gains and acquisitions and performance of companies in Astec's markets. These forwardlooking statements reflect management s beliefs and assumptions. They are not guarantees of performance and are therefore subject to risks and uncertainties. The information in this presentation is not an update or reaffirmation of previously disclosed information. Future events and actual results could differ materially from those expressed in or implied by the forward-looking statements. Factors that could cause future events or actual results to differ materially from the Company s expectations include uncertainty in the economy, rising oil and liquid asphalt prices, rising interest rates, changes in highway funding availability, the timing of large contracts, production capacity, changes in size and mix of backlog, seasonality and cyclicality in operating results, seasonality of sales volumes, demand for the Company's products, competitive activity and those other factors listed from time to time in the Company s reports filed with the SEC. 2

3 Corporate Profile March 31, Operating Highlights (NASDAQ: ASTE) Founded in 1972 Headquarters in Chattanooga, TN USA Quarterly dividend paid since 2013 Current annual rate $0.10 Three operating groups Infrastructure Aggregate & Mining Energy 20 subsidiary companies in USA, Canada, Northern Ireland, South Africa, Germany, Australia and Brazil 4,521 3/31/18 Primarily sell direct (65%) and through independent dealers and distributors (35%) 3

4 Mission Statement and Core Values Mission Statement To grow and prosper by designing, manufacturing and selling the most innovative, productive, reliable and safe equipment for the industries we serve, coupled with unparalleled customer service. Core Values Continuous devotion to meeting the needs of our customers Honesty and Integrity in all aspects of business Respect for all individuals Preserving entrepreneurial spirit, innovation and focus through decentralization Safety, profit and growth as means to ensure the success of the company 4

5 Investment Highlights Leadership position in markets served An integrated strategy for long-term revenue and earnings growth Stability in government spending on infrastructure maintenance Financial strength to support strategic objectives Strong Backlog Experienced management team An incentive system aligned with performance 5

6 Our Business Model I N F R A S T R U C T U R E A G G R E G AT E A N D M I N I N G E N E R G Y 6

7 Customer Focused Subsidiaries Industry Leaders in Markets Served Niche Markets Highly Engineered, Low Volume Products Individual Product Champions Close to Customers Organic Growth New Product Development 7

8 Consolidated Focus on Operations Procurement: Leveraged Purchasing Manufacturing Banking and Finance Commercial Insurance and Employee Benefits Share Best Practices 8

9 Innovation 82 R&D projects in process 191 active patents, 141 applied for 9

10 Service 116 service schools in 2018 for 5,567 attendees 24/7 Service Policy. Home phone numbers in customers hands Service departments at each subsidiary 10

11 By Financial Reporting Group 11

12 Inf rast ruct ure Pro du ct s Wood Pellet Processing Plants CP75 Paver Portable, Relocatable and Stationary Asphalt Plants RX-600eLR Cold Planer Double Barrel XHR High RAP Asphalt Drum SB-2500eX Shuttle Buggy MTV 12

13 Ag g reg at e an d Min in g Pro d u ct s Aggregate System Kodiak Plus K200+ Cone Crusher ScaleBOSS 3DE Scaler 32x58 Tel-Trax jaw plant Rotary Coal Breaker 3m x 6m 3500 Vertical Shaft Impact Crusher TCL 1031 Stockpiling After Primary Jaw Crusher HF Revolution Loading Coaster Vessels 13

14 Energy Prod uct s Mobile 5 Central Mix Batch Plant Heatec Liquid Asphalt Tank Farm GEFCO DP D Horizontal Grinder RF and low-nox burners Fusion Hybrid-Process Ready Mix Concrete Plant 14

15 Strategic Acquisitions TYPES OF TARGET ACQUISITIONS Target Accretive Products Consolidation of similar products in current markets. New products that are in line with the markets and customers we currently serve. Similar products to those we currently offer in new geographical markets. 15

16 Acquisition Timeline History of Successfully Integrating Acquisitions, Nine Since

17 Wh ere We Are To d ay: F in an cial Rep o rt in g December 31, 2017 Energy 19% Aggregate & Mining 34% Infrastructure 47% 17

18 Wh ere We Are To d ay: Market s December 31, 2017 Domestic 79% International 21% 18

19 Business Overview Income Statement Highlights Actual And Ex Wood Pellet Charge December 31, 2017 and Actual 2017 Ex-Pellet Charge 2016 Actual % Change Net Sales $1,184.7 $1,198.9 $1, % Growth % 3.3% 4.5% 16.7% GM % 20.5% 22.0% 23.1% (110bps) Net Income $37.8 $51.4 $55.2 (6.9%) Diluted EPS $1.63 $2.22 $2.38 (6.7%) EBITDA $82.7 $103.7 $112.7 (8.0%) 19

20 Income Statement Astec Industries, Inc. Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Twelve Months Ended Dec Net sales $ 1,184,739 $ 1,147,431 Cost of sales 941, ,162 Gross profit 243, ,269 Selling, general, administrative & engineering expenses 187, ,114 Income (loss) from operations 55,537 87,155 Interest expense 840 1,395 Other 2,725 1,506 Income (loss) before income taxes 57,422 87,266 Income taxes 19,627 32,107 Net income (loss) attributable to controlling interest $ 37,795 $ 55,159 Basic $ 1.64 $ 2.40 Diluted $ 1.63 $

21 Balance Sheet Astec Industries, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) Dec 31 Dec Assets Current assets Cash and cash equivalents $ 62,280 $ 82,371 Investments 1,624 1,024 Receivables, net 119, ,673 Inventories 391, ,404 Prepaid expenses and other 27,734 22,361 Total current assets 602, ,833 Property and equipment, net 190, ,538 Other assets 96,214 86,230 Total assets $ 889,579 $ 843,601 Liabilities and equity Current liabilities Accounts payable - trade 60,417 57,297 Other current liabilities 118, ,564 Total current liabilities 179, ,861 Non-current liabilities 23,668 25,899 Total equity 686, ,841 Total liabilities and equity $ 889,579 $ 843,601 21

22 Parts Sales Provide Stability and Enhanced Margins Adjusted to reflect continuing operations (In Millions) % of Year End Sales Year End $400 $350 $300 $250 $ $150 $ % 26.1% 27% 23% 24% $50 $

23 Income Statement Astec Industries, Inc. Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Mar Net sales $ 325,453 $ 318,401 Cost of sales 247, ,630 Gross profit 78,005 75,771 Selling, general, administrative & engineering expenses 52,078 53,121 Income from operations 25,927 22,650 Interest expense Other Income before income taxes 26,289 22,937 Income taxes 6,022 7,817 Net income attributable to controlling interest $ 20,267 $ 15,120 Basic $ 0.88 $ 0.66 Diluted $ 0.87 $

24 Balance Sheet Astec Industries, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) Mar 31 Mar Assets Current assets Cash and cash equivalents $ 41,940 $ 55,401 Investments 1,751 1,408 Receivables, net 153, ,222 Inventories 411, ,570 Prepaid expenses and other 23,533 20,731 Total current assets 632, ,332 Property and equipment, net 189, ,223 Other assets 96,841 85,933 Total assets $ 918,365 $ 874,488 Liabilities and equity Current liabilities Accounts payable - trade 68,833 73,807 Other current liabilities 117, ,828 Total current liabilities 186, ,635 Non-current liabilities 23,847 25,503 Total equity 708, ,350 Total liabilities and equity $ 918,365 $ 874,488 24

25 Objectives for 2018 Safety / Quality / Productivity Top Line Growth Increase Margins Working Capital Management 25

26 Performance Targets Target Est. Targets GM 25% 2018 EBITDA 10% 2018 Safety (Recordable Injury Rate) 1.9 or less 2018 Inventory Turns By

27 Contact Information Benjamin Brock President & CEO Phone: Richard Dorris Executive VP & COO Phone: David Silvious VP, CFO, Treasurer Phone: Stephen Anderson VP of Administration & Director of Investor Relations Phone: