Astec Industries, Inc. · NASDAQ:ASTE
Astec Industries — Q3 2020 Earnings Presentation
31 slides from Astec Industries's earnings presentation, Nov 4, 2020
Slide 1: 3Q20 Earnings Presentation
Exhibit 99.2 3Q20 Earnings Presentation November 4, 2020
Slide 2: Safe Harbor
Safe Harbor Certain statements contained in this presentation relate to future events and expectations and are “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the future performance of the Company. Words such as "believe," "estimate
Slide 3: Astec Overview & 3Q20 Highlights
Astec Overview & 3Q20 Highlights Barry Ruffalo | President & CEO 3Q20 Earnings Presentation
Slide 4: Today's Key Messages
Today’s Key Messages 01 Strong 3Q20 performance driven by continued execution against our transformation plan and increased focus on driving operational excellence across the organization 02 Customer demand for Astec’s essential solutions remains resilient; supporting our customers with high-quality
Slide 5: Rock to Road: Simplification of Our Business Segments
Rock to RoadTM: Simplification of Our Business Segments Materials Solutions: 35% Key Products Crushing and Screening • Washing and Classifying • Material Handling • Rock Breaker Technology • Plants and Systems Leading Brands Infrastructure Solutions: 65% Key Products Roadbuilding • Paving • Forestry
Slide 6: Operations and COVID-19 Update
Operations and COVID-19 Update Operational Excellence is a Competitive Advantage ✓ COVID-19 Task Force continues to actively manage the pandemic situation with a focus on keeping our employees, customers and suppliers safe ✓ Following on-site precautions such as frequent handwashing, social distanci
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 ✓ Recent 12-month extension of FAST Act driving increased customer confidence and
Slide 8: Total Company & Segment Results
Total Company & Segment Results Becky Weyenberg | Chief Financial Officer 3Q20 Earnings Presentation
Slide 9: 3Q20 Financial Results vs 3Q19
3Q20 Financial Results vs 3Q19 ($M, except per share data) NET SALES BACKLOG ADJ. EBITDA1 ADJ. EPS1 $255.8 $243.9 $0.20 $218.5 $0.17 $231.4 $10.7 $11.0 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 • Equipment sales decreased • Materials Solutions backlog • Adjusted EBITDA increased due • $3.9M of restruc
Slide 10: 3Q20 Adjusted EBITDA Margin Bridge
3Q20 Adjusted EBITDA Margin Bridge1 20 bps 80 bps 90 bps 4.8% 4.2% (130) bps OVERALL COST SAVINGS DROVE 60 BPS OF YOY MARGIN IMPROVEMENT 3Q20 Earnings Presentation | 10
Slide 11: Infrastructure Solutions 3Q20 Financial Performance
Infrastructure Solutions | 3Q20 Financial Performance ($M) NET SALES ADJ. GROSS PROFIT1 $156.2 $32.2 $151.1 $31.0 3Q19 3Q20 3Q19 3Q20 3Q PERFORMANCE DRIVERS • Strong performance overall from good product mix particularly in asphalt plant and part sales and associated margins; parts sales up 15% year
Slide 12: Materials Solutions 3Q20 Financial Performance
Materials Solutions | 3Q20 Financial Performance ($M) NET SALES GROSS PROFIT $99.6 (0.7)% $20.8 $20.7 $80.3 3Q19 3Q20 3Q19 3Q20 3Q PERFORMANCE DRIVERS • Strong domestic order intake coming out of 3Q • Right sizing initiatives taken in 2019 and 2020 to maximize utilization of our manufacturing footpr
Slide 13: YTD20 Financial Results vs YTD19
YTD20 Financial Results vs YTD19 ($M, except per share data) ADJ. NET SALES1 BACKLOG ADJ. EBITDA1 ADJ. EPS1 $866.4 $1.86 $243.9 $60.5 $785.6 $218.5 $53.4 $1.18 YTD19 YTD20 YTD19 YTD20 YTD19 YTD20 YTD19 YTD20 • Equipment sales decreased • Materials Solutions backlog • Adjusted EBITDA increased due •
Slide 14: Maintain Strong, Flexible Balance Sheet with Ample Liquidity
Maintain Strong, Flexible Balance Sheet with Ample Liquidity SUMMARY BALANCE SHEET ($M) 9/30/20 ($M) 9/30/20 Cash and Cash Equivalents $ 108.5 Cash and Cash Equivalents $ 108.5 Total Current Assets $ 533.2 Available Credit $ 151.5 Total Assets $ 819.7 Total Available Liquidity $ 260.0 Total Current
Slide 15: Disciplined Capital Deployment Framework
Disciplined Capital Deployment Framework Use of Cash Over Last 3 Years ~$175M Adjustments Given Current Environment Plant, Property • Internal investments meeting Continue to target > 14% 14% return objectives of >14% ROIC for new & Equipment ROIC investments 38% 17% • 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 Tuck-in Acquisitions Strengthen Infrastructure Portfolio
Recent Tuck-in 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 • Financial results reported and included in Q3 results • Payroll and benefits transition complete •
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 3Q20 Earnings Presentation
Slide 23: Contact Information
Contact Information STEVE ANDERSON SVP of Administration & Investor Relations, Secretary Phone: 423-553-5934 Email: sanderson@astecindustries.com 3Q20 Earnings Presentation | 23
Slide 24: Appendix
Appendix 3Q20 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. 3Q20 Earnings Pre
Slide 26: Income Statement
Income Statement Condensed Consolidated Statements of Income (In millions, except shares in thousands and per share amounts; unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net sales $ 231.4 $ 255.8 $ 785.6 $ 886.4 Cost of sales 181.0 203.9 601.5 674.4
Slide 27: Balance Sheet
Balance Sheet Condensed Consolidated Balance Sheets (In millions; unaudited) September December 30, 2020 31, 2019 Assets Current assets: Cash and cash equivalents $ 108.5 $ 48.9 Investments 3.8 1.5 Receivables, net 132.8 124.9 Inventories, net 261.5 294.5 Other current assets 26.6 36.5 Total current
Slide 28: Cash Flow Statement
Cash Flow Statement (In thousands; unaudited) Nine Months Ended September 30, 2020 2019 Cash flows from operating activities: Net income $ 31,475 $ 40,535 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,370 19,698 Provision for doubt
Slide 29: Q3 GAAP to Non-GAAP Reconciliation Table
Q3 GAAP to Non-GAAP Reconciliation Table 3Q20 GAAP to Non-GAAP Reconciliation Table YTD 3Q20 GAAP to Non-GAAP Reconciliation Table Restructuring Restructuring As Reported Charges and As Adjusted As Reported Charges and As Adjusted (GAAP) Other (Non-GAAP) (GAAP) Other (Non-GAAP) Consolidated Consolid
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 Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net income attributable to controlling interest $ 1,648 $ 3,010 $ 31,550 $ 40,662 Plus: Restructuring and other
Slide 31: GAAP vs Non-GAAP EBITDA & Adjusted EBITDA Reconciliation
GAAP vs Non-GAAP EBITDA & Adjusted EBITDA Reconciliation (In thousands, except share and per share amounts; unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net income attributable to controlling interest $ 1,648 $ 3,010 $ 31,550 $ 40,662 Interest incom