First Quarter Earnings
MAY 1, 2024
B U I LT T O C O N N E C T
Safe Harbor
Certain statements contained in this presentation contain forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in the presentation that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates", "supports", "plans", "projects", "expects", "believes", "should", "would", "could", "hope", "forecast", "management is of the opinion", use of the future tense and similar words or phrases. These forward-looking statements are based largely on management's expectations, which are subject to a number of known and unknown risks, uncertainties and other factors discussed and described in our most recent Annual Report on Form 10-K, including those risks described in Part I, Item 1A thereof, and in other reports subsequently filed by us with the Securities and Exchange Commission, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.
NON-GAAP MEASURES
In an effort to provide investors with additional information regarding the Company's results, the Company refers to various GAAP (U.S. generally accepted accounting principles)
and non-GAAP financial measures which management believes provide useful information to investors. These non-GAAP measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management of the Company does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. Nonetheless, this non-GAAP information can be useful in understanding the Company's operating results and the performance of its core business. Management of the Company uses both GAAP and non-GAAP financial measures to establish internal budgets and targets and to evaluate the Company's financial performance against such budgets and targets. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix.
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First Quarter Highlights
JACO VAN DER MERWE
CEO AND PRESIDENT
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First Quarter
Overview
$309.2M
N E T S A L E S
24.9%
G R O S S M A R G I N
+2.4%
I M P L I E D O R D E R S
1 | Infrastructure Solutions saw solid performance overall, aside from select |
supply chain delays, with implied orders up 9.3% sequentially |
Softening in market conditions and the impact of current interest rates and a slowdown in conversions on the dealer side from equipment rentals to sales,
2 impacted performance for Materials Solutions, with implied orders down 11% sequentially
- Implemented right-sizing activities as we anticipate challenging conditions for dealers and contractors in the first half of the year
3 | Delivered $309.2M in net sales, a decrease of 11.1%, and gross margin of |
24.9%, a decrease of 70 basis points | |
Backlog level of $559.8M approached historic range, given improved lead times
4 on most of our product lines, supporting our ability to meet demand for products and increase sales moving forward
5 | 2024 World of Asphalt/Agg 1 Show and Conference garnered record |
attendance and positive customer engagement |
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Strategic Roadmap for 2024 and Beyond
S T R A T E G I C P I L L A R S
Develop high performance talent through competitive market based compensation and
E M P O W E R E D , E N A B L E D & E N G A G E D E M P L O Y E E S
benefits, ongoing leadership and technical skills development and a values based culture.
Being an employer of choice, giving employees the tools they need to succeed and creating life changing opportunities is key to our joint success
C U S T O M E R F O C U S E D
Strong customer focus means driving commercial and operational excellence and simplifying product offering and production process, among others
I N D U S T R Y C H A N G I N G | A central cornerstone of success is industry changing innovation |
Rolling out new product development approach that increases market competitiveness | |
I N N O V A T I O N | |
and better leverages technology and digital connectivity |
Execution on strategic pillars to drive sustainable value creation
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Business Dynamics and Observations
I N F R A S T R U C T U R E S O L U T I O N S
- Net sales of $202.2M decreased 6.2%: Select supply chain delays resulted in revenue moving out of the quarter partially offset by increased parts sales
- Segment Operating Adjusted EBITDA margin of 12.7% decreased 50 basis points: Primarily due to supply chain delays and volume related manufacturing inefficiencies
M AT E R I A L S
S O L U T I O N S
- Net sales of $107.0M decreased by 19.1%: Due to lower equipment sales, attributable to finance capacity constraints with contractors and dealers, as well as longer product conversions
- Segment Operating Adjusted EBITDA margin of 5.0% decreased 600 basis points: Impacted by lower sales volume, manufacturing inefficiencies, and other period related costs
F E D E R A L H I G H WAY B I L L U P DAT E
- Federal Highway and pavement contract awards increased 11% year-over-year, according to ARTBA*, with total state budgets up 12% year-over-year
- Expect continued strong demand for asphalt road building and concrete production equipment moving forward
(*) Source: American Road & Transportation Builders Association (ARTBA)
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Q1 24 Implied Orders
Implied Orders ($M)
INFRASTRUCTURE SOLUTIONS Implied Orders ($M)
+9.3% Q/Q
+2.4% Q/Q
$292 $299
$172 $166
$192
$210
$235 $239 $229
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 |
$119
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 |
MATERIALS SOLUTIONS Implied Orders ($M)
$110 | $100 | -11.0% Q/Q |
$89 | ||
$73
$63
1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 |
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Historical Backlog
BACKLOG ($M)
$969
$913 | ||
$835 | $837 | $800 |
$763 | ||
$689
$615
$570 $560
HISTORICAL RANGE
INFRASTRUCTURE SOLUTIONS BACKLOG ($M)
$523 | $547 | $516 | |||||
$480 | $473 | ||||||
$439 | |||||||
$408 | |||||||
$395 | $365 | $373 | |||||
4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24
MATERIALS SOLUTIONS BACKLOG ($M)
$355 $354
$422 $397
$314$328
$250
4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 |
$220 $205 $187
4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24
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2024 World of Asphalt/Agg 1 Show and Conference
NEW PRODUCTS UNVEILED
• ReMix CCPR System: Cold Central Plant Recycling (CCPR) system efficiently utilizes RAP, minimizing waste and promoting sustainable road construction practices. Producing
up to 300 TPH nominal production rates.
- Vari-FrequencyScreen Technology: Will revolutionize the industry with its ability to eliminate screen cloth blinding, increase performance and reduce operating costs.
• | Intellipac Moisture System: Provides visibility into virgin aggregate moisture levels with |
advanced features that empower operators with real-time data and insights. | |
• | Intelliflex Burner Controls: Intuitive control over burner performance and safety |
operations for asphalt mixing plants. Providing seamless startups to efficient shutdowns. |
CONFERENCE KEY TAKEAWAYS
- Record attendance, with a 38% increase over the previous record set in 2022
- Interest in equipment and digital solutions was high, indicating positive, long-term customer mindset
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First Quarter
Financial Results
HEINRICH JONKER
VICE PRESIDENT FINANCE -
INFRASTRUCTURE SOLUTIONS AND INTERIM CHIEF FINANCIAL OFFICER
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Astec Industries Inc. published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 10:07:24 UTC.