Astec Industries, Inc. · NASDAQ:ASTE
Astec Industries — Q2 2020 Earnings Presentation
30 slides from Astec Industries's earnings presentation, Aug 5, 2020
Slide 1: 2Q20 Earnings Presentation
2Q20 Earnings Presentation August 5, 2020
Slide 2: Safe Harbor
Safe Harbor The information contained in this presentation and discussion contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the future performance of the Company, including statements about the effects on the Company from (i)
Slide 3: Astec Overview & 2Q20 Highlights
Astec Overview & 2Q20 Highlights Barry Ruffalo | President & CEO 2Q20 Earnings Presentation |
Slide 4: Today's Key Messages
Today’s Key Messages 01 Strong 2Q20 performance fueled by continued progress of transformation plan and proactive actions taken since 2019 02 Resilient customer demand as products remain essential for building infrastructure and transportation markets; we remain vigilant throughout ongoing pandemic
Slide 5: Rock to Road: Simplification of Our Business Segments
Rock to RoadTM: Simplification of Our Business Segments Materials Solutions: 31% Key Products Crushing and Screening • Washing and Classifying • Material Handling • Rock Breaker Technology • Plants and Systems Leading Brands Infrastructure Solutions: 69% Key Products Roadbuilding • Paving • Forestry
Slide 6: COVID-19 Preparedness Update
COVID-19 Preparedness Update New Organizational Structure Has Enhanced Company-wide Communication ✓ In early March 2020, formed a COVID-19 task force, which continually monitors information from our sites, government agencies and other sources ✓ Continue to manufacture, sell and service our products
Slide 7: Business Dynamics and Observations
Business Dynamics and Observations Current Transformation to Simplify, Focus, and Grow Strategy Has Reduced Organizational Structure Complexity and Enabled More Efficient COVID-19 Response and Sharing of Best Practices ✓ Bipartisan support for U.S. infrastructure construction; both House and Senate
Slide 8: Total Company & Segment Results
Total Company & Segment Results Becky Weyenberg | Chief Financial Officer 2Q20 Earnings Presentation |
Slide 9: 2Q20 Financial Results
2Q20 Financial Results ($M, except earnings per share data) ADJ. REVENUES1 BACKLOG ADJ. EBITDA1 ADJ. EPS1 $246.1 $284.8 $0.67 $265.3 $182.0 $25.3 $17.2 $0.37 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 • Equipment sales decreased • Materials Solutions backlog • Adjusted EBITDA increased due • $7.9M of r
Slide 10: 2Q20 Adjusted EBITDA Margin Bridge
2Q20 Adjusted EBITDA1 Margin Bridge 310 bps 9.5% (90) bps 210 bps 6.0% (80 bps) Q2 2019 Volume & Rightsizing, Cost savings Other Q2 2020 mix organization initiatives transformation OPERATIONS EXCELLENCE INITIATIVES DRIVE 520 BPS OF YOY MARGIN IMPROVEMENT 1 See Appendix for GAAP to Non-GAAP reconcili
Slide 11: Infrastructure Solutions 2Q20 Financial Performance
Infrastructure Solutions | 2Q20 Financial Performance ($M) ADJ. REVENUES1 ADJ. GROSS PROFIT1 ADJ. EBITDA1 $181.9 $178.0 $40.2 $37.8 $22.6 $12.5 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q PERFORMANCE DRIVERS • Strong order intake and backlog coming out of 1Q, realized in 2Q sales and plant absorption • Strong
Slide 12: Materials Solutions 2Q20 Financial Performance
Materials Solutions | 2Q20 Financial Performance ($M) ADJ. REVENUES1 ADJ. GROSS PROFIT1 ADJ. EBITDA1 $106.8 $25.5 $12.1 $11.3 $83.4 $21.2 2Q19 2Q20 2Q19 2Q20 2Q19 2Q20 2Q PERFORMANCE DRIVERS • Initiatives taken in 2019 to right size operations to current market demand; improving margin despite decli
Slide 13: YTD20 Financial Results
YTD20 Financial Results ($M, except earnings per share data) ADJ. REVENUES1 BACKLOG ADJ. EBITDA1 ADJ. EPS1 $246.1 $610.6 $49.5 $1.67 $554.1 $42.6 $182.0 $1.02 YTD19 YTD20 YTD19 YTD20 YTD19 YTD20 YTD19 YTD20 • Equipment sales decreased • Materials Solutions backlog • Adjusted EBITDA increased due • $
Slide 14: Maintain Strong, Flexible Balance Sheet with Ample Liquidity
Maintain Strong, Flexible Balance Sheet with Ample Liquidity SUMMARY BALANCE SHEET ($M) 6/30/20 ($M) 6/30/20 Cash and Cash Equivalents $ 119.8 Cash and Cash Equivalents $ 119.8 Total Current Assets $ 530.4 Available Credit $ 150.8 Total Assets $ 793.8 Total Available Liquidity $ 270.6 Total Current
Slide 15: Disciplined Capital Deployment Framework
Disciplined Capital Deployment Framework Use of Cash Over Last 3 Years ~$150M Adjustments Given Current Environment Plant, Property • Internal investments meeting Continue to target > 14% 16% return objectives of >14% ROIC for new & Equipment ROIC investments 47% 19% • Future acquisitions to align C
Slide 16: Strategic M&A Approach Aligns to Our Growth Strategy
Strategic M&A Approach Aligns to Our Growth Strategy Value Chain Gaps Financial Criteria Close to Core Attractive with Deeper Markets / Aligns Penetration to Macro Trends EPS Accretion in First Full Year Strategic Acquisition Filters Meet or Exceed #1 or #2 Market Recurring Leadership Long-term Fina
Slide 17: Recent Acquisitions Strengthen Infrastructure Portfolio
Recent Acquisitions Strengthen Infrastructure Portfolio 2019 PRODUCT REVENUE MIX BY COMPANY 25% 35% 31% 40% 49% + 53% + 13% 40% 7% 7% Central Mix Dry Batch Mix Parts & Service Other 1 COMMENTARY • New complementary brands and products lines from CON-E-CO and BMH Systems enables us to have a more com
Slide 18: Downturn Playbook with Additional Levers to Pull
Downturn Playbook with Additional Levers to Pull Status Commentary Self-Adjusting • Revised annual and long-term incentive plans ✓ Metrics-based incentive plan Discretionary ✓ Professional services / consulting • Accelerating centralization efforts ✓ Tradeshows / marketing • Implemented travel restr
Slide 19: Our Profitable Growth Strategy Remains Consistent
Our Profitable Growth Strategy Remains Consistent SIMPLIFY FOCUS GROW • Leverage global footprint and scale • Strengthen customer-centric approach • Reinvigorate innovation with a new while maintaining strong customer by providing a holistic set of solutions product development approach relationship
Slide 20: Update on Our Transformation Progress
Update on Our Transformation Progress 2019 - 2020 2019 - 2021 2020 - 2021+ SIMPLIFY ✓ Changed from subsidiary structure to align by product groups FOCUS ✓ Refreshed executive leadership team and board members ✓ Hired SVP of Operational Excellence and Chief Information Officer GROW ✓ Executed Astec S
Slide 21: Key Investment Highlights
Key Investment Highlights Leadership positions within attractive niche markets in industries 1 benefitting from long-term secular trends including population growth, urbanization and aging infrastructure Industry-leading reputation for innovation, high-quality products 2 and superior customer servic
Slide 22: Q&A
Q&A 2Q20 Earnings Presentation |
Slide 23: Contact Information
Contact Information STEVE ANDERSON SVP of Administration & Investor Relations Phone: 423-553-5934 Email: sanderson@astecindustries.com 2Q20 Earnings Presentation | 23
Slide 24: Appendix
Appendix 2Q20 Earnings Presentation |
Slide 25: Company Targets
Company Targets LONG-TERM GOALS 5% - 10% > 12% > 10% > 100% > 14% REVENUE GROWTH EBITDA MARGIN EPS GROWTH Net Income ROIC FCF CONVERSION1 Create Value for Shareholders Alignment to Incentive Plan Stand through Cycles 1 Calculated by dividing LTM Adjusted FCF by Adjusted Net Income. 2Q20 Earnings Pre
Slide 26: Income Statement
Income Statement Astec Industries Inc. Condensed Consolidated Statements of Income (In millions, except share and per share amounts; unaudited) Three Months Ended Year To Date June 30, June 30, 2020 2019 2020 2019 Net sales $ 265.3 $ 304.8 $ 554.1 $ 630.6 Cost of sales 205.7 221.5 420.5 470.4 Gross
Slide 27: Balance Sheet
Balance Sheet Astec Industries Inc. Condensed Consolidated Balance Sheets (In millions; unaudited) June 30, June 30, 2020 2019 Assets Current assets: Cash and cash equivalents $ 119.8 $ 24.9 Investments 2.9 1.2 Receivables, net 118.7 139.2 Inventories, net 263.2 360.9 Other current assets 25.8 31.3
Slide 28: Cash Flow Statement
Cash Flow Statement (In thousands; unaudited) Six Months Ended June 30, 2020 2019 Cash flows from operating activities: Net income $ 29,788 $ 37,579 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,601 13,139 Provision for doubtful ac
Slide 29: Q2 GAAP to Non-GAAP Reconciliation Table
Q2 GAAP to Non-GAAP Reconciliation Table 2Q20 GAAP to Non-GAAP Reconciliation Table YTD2Q20 GAAP to Non-GAAP Reconciliation Table As Reported Restructuring As Adjusted As Reported Restructuring As Adjusted (GAAP) Charges (Non-GAAP) (GAAP) Charges (Non-GAAP) Consolidated Consolidated Net sales $ 265,
Slide 30: GAAP vs Non-GAAP Adj. EPS Reconciliation
GAAP vs Non-GAAP Adj. EPS Reconciliation (In thousands, except share and per share amounts; unaudited) Three Months Ended Year To Date Ended June 30, June 30, 2020 2019 2020 2019 Net income attributable to controlling interest $ 9,258 $ 23,377 $ 29,902 $ 37,651 Plus: Restructuring and unusual 7,900