Chattanooga-based Astec Industries announced today it has initiated significant design upgrades to its customers' Georgia and Arkansas wood pellet plants to meet full production rates, a move that will negatively impact its third quarter earnings.
Also, it unveiled the acquisition of substantially all of RexCon LLC, a full-line concrete batch plant manufacturer in the U.S., for about $26 million.
According to Astec, the additional investment in the wood pellet plants is expected to negatively impact Astec's third quarter earnings by 54 cents to 58 cents per share.
"In the last 45 days, we identified significant design issues at our customers' Georgia and Arkansas wood pellet plants driven by the need for both facilities to achieve full production rates," said Astec Chief Executive Benjamin G. Brock in a statement. "Upon learning of these design flaws, which were different at each plant, we identified a clear path to success."
Also, he said that this past Friday, the company completed an updated analysis of the necessary all-inclusive investment needed to deliver on our commitments to our customers with regard to production rates.
See more in Tuesday's Times Free Press.