Astec Industries, Inc. · NASDAQ:ASTE
Astec Industries — Q1 2020 Earnings Presentation
27 slides from Astec Industries's earnings presentation, May 6, 2020
Slide 1: 1Q20 Earnings Presentation
May 6, 2020 1Q20 Earnings Presentation
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 & 1Q20 Highlights
Astec Overview & 1Q20 Highlights Barry Ruffalo | President & CEO
Slide 4: Today's Key Messages
Today’s Key Messages Actions taken in 2019 and progress of transformation plan has fueled solid 1Q20 performance 01 Changed reporting from 3 segment structure to two segment structure: Infrastructure Solutions and Materials Solutions to align with how the business is managed 02 Strong balance sheet
Slide 5: Simplification of Our Business Segments
Simplification of Our Business Segments Infrastructure Solutions: 65% Materials Solutions: 35% Key Products Roadbuilding • Paving • Forestry • Recycling • Asphalt Plants • Concrete Plants • Burners and Heaters • Silos and Storage TanksLeading Brands Key ProductsCrushing and Screening • Washing and C
Slide 6: COVID-19 Response
In early March 2020, formed a COVID-19 task force, which continually monitors information from our sites, government agencies and other sourcesContinue to manufacture, sell and service our products with appropriate precautionsReinforced good hygiene practices at all facilities including frequent han
Slide 7: Scenario Analyses for Changes in Demand
Actively running scenario analysEs to ensure we are prepared for changes in demand Business Dynamics and Observations Bipartisan support for U.S. infrastructure constructionCustomers are still working and need our solutions; some have discussed postponing capex decisions and delaying shipments to fu
Slide 8: Total Company & Segment Results
Total Company & Segment Results Becky Weyenberg | Chief Financial Officer
Slide 9: 1Q20 Financial Results
1Q20 Financial Results ($M, except per share data) Equipment sales decreased $39.2M or 18.2%Parts sales decreased $3.9M or 4.2%Domestic sales decreased $28.9M or 11.0%International sales decreased $8.0M or 12.7%Excluding FX impact, sales decreased 10.5%$8.8M revenue delayed due to COVID-19 delivery
Slide 10: Infrastructure Solutions 1Q20 Financial Performance
Infrastructure Solutions | 1Q20 Financial Performance ($M) 1Q PERFORMANCE DRIVERSStrong order intake and backlog, not fully realized in 1Q sales (2Q production)Strong performance overall from good parts sales and associated margins, particularly in plant equipmentMoved a portion of plant sales to 2Q
Slide 11: Materials Solutions 1Q20 Financial Performance
Materials Solutions | 1Q20 Financial Performance ($M) 1Q PERFORMANCE DRIVERSInitiatives taken in 2019 and 2020 to restructure operations to current market demand; improving margin despite declining revenueHeadcount reductions and cost control measures put in place at end of 2019 (19.1%) (17.6%) (25.
Slide 12: Focused on Maintaining a Strong Balance Sheet
Focused on Maintaining a Strong Balance Sheet Flexible Balance Sheet with Ample Liquidity SUMMARY BALANCE SHEET COMMENTARYGross inventory decreased $124M; Net inventory decreased $72M both from 1Q19$26M in cash expected from income tax refund due to CARES Act ($M) 3/31/20 Cash and Cash Equivalents $
Slide 13: Disciplined Capital Deployment Framework
Continually evaluate strategy to ensure a balanced approach Disciplined Capital Deployment Framework Use of Cash Over Last 3 Years~$150M Adjustments Given Current Environment Plant, Property & Equipment Internal investments meeting return objectives of >14% ROIC Continue to target > 14% ROIC for new
Slide 14: Downturn Playbook with Additional Levers to Pull
Downturn Playbook with Additional Levers to Pull Status Commentary Self-AdjustingMetrics-based incentive plan Revised annual and long-term incentive plans DiscretionaryProfessional services / consultingTradeshows / marketing4-day work weeksDelayed / freeze hiring Suspend merit increases / other comp
Slide 15: Material Weakness Remediation Plan
New CEO, CFO and CIO in placeExecutive Leadership Team actively engaged – monthly dashboard review processInvestment in resources (Finance and IT Leadership Teams) – leading process reviewsEngaged with Big Four accounting firm to assist with Sox 404 remediation efforts, project management and risk a
Slide 16: Our Profitable Growth Strategy Remains Consistent
Our Profitable Growth Strategy Remains Consistent FOCUS SIMPLIFY GROW Leverage global footprint and scale while maintaining strong customer relationships Reduce organizational structure complexityConsolidate and rationalize footprint and product portfolioOptimize supply chain by leveraging size and
Slide 17: Update on Our Transformation Progress
Update on Our Transformation Progress Changed from subsidiary structure to align by product groupsRefreshed executive leadership team and board membersExecuted Astec Strategic Procurement initiative consolidating supply chain1Q20 re-segmentation to two segment reporting structureWithin Infrastructur
Slide 18: Key Investment Highlights
Key Investment Highlights Leadership positions within attractive niche markets in industries benefitting from long-term secular trends including population growth, urbanization and aging infrastructure Industry-leading reputation for innovation, high-quality products and superior customer service Re
Slide 19: Q&A
Q&A
Slide 20: Contact Information
Contact Information STEVE ANDERSONSVP of Administration & Investor RelationsPhone: 423-553-5934Email: sanderson@astecindustries.com
Slide 21: Appendix
[O\ /\astec Appendix
Slide 22: Income Statement
Income Statement Condensed Consolidated Statements of Income (in milions, except share and per share amounts; unaudited) ‘Three Months Ended March 31, <a _— 20 Net sales ms 5 35S Cost of sales 2148 248.9 Gross profit nS Operating expenses: Selling, general and administrative 56.2 58.2 Restructuring
Slide 23: Segment Revenues and Profits
Segment Revenues and Profits (In thousands; unaudited)
Slide 24: Balance Sheet
Balance Sheet Condensed Consolidated Balance Sheets (inmillions; unaudited) March 31, March 31, Assets Current assets: Cash and cash equivalents $ Investments Receivables, net Inventories, net Other current assets Total current assets Property, plant and equipment, net Other long-term assets, Total
Slide 25: Cash Flow Statement
Cash Flow Statement EN (in thousands; unaudited) S$ mam 5 1427 cam est 2m 206 (20) an 1 108 3st asi (6st) eat 1606
Slide 26: 1Q GAAP to Non-GAAP Reconciliation Table
1Q GAAP to Non-GAAP Reconciliation Table In its earnings release, Astec refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Non-GAAP fina
Slide 27: GAAP vs Non-GAAP Adj. EPS Reconciliation
GAAP vs Non-GAAP Adj. EPS Reconciliation (In thousands, except share and per share amounts; unaudited)