Astec Industries Inc. on Monday reported a fourth-quarter loss of $9.2 million due to supply chain and logistics disruptions, as well as pandemic-related labor restrictions and inflation last year.
Despite a 12.1% gain in sales during the final three months of last year, the Chattanooga-based asphalt equipment maker said it had losses, adjusted for non-recurring costs, of 3 cents per share in the final three months of 2021. The losses were bigger than the penny per share loss forecast by analysts surveyed by Zacks.
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Astec shares fell in trading Monday to the lowest level since July 2020 after already losing nearly 27% of their value so far this year, or more than triple the overall decline of the S&P 500. The company’s stock closed Monday at $49.80, down 2.14%, or $1.09 per share, in trading on the Nasdaq exchange.
Despite the higher-than-expected losses, Astec CEO Barry Ruffalo told industry analysts Monday he remains optimistic about the outlook for Astec even as some of the COVID-19 challenges linger this year.
“I continue to be encouraged by conversations with customers as they’re seeing robust demand and are eager to receive our industry-leading solutions,” Ruffalo said during a conference call about the fourth-quarter earnings results. “While I’m disappointed in the overall bottom line result during the quarter, I’m proud of our team’s continued discipline around operational excellence and adaptability as we executed our initiatives to combat these headwinds.”
Astec posted revenue of $267.8 million in the fourth quarter, compared with $238.9 million a year earlier, and the company ended the year with a backlog of $762.7 million in orders, or more than twice the volume of a year earlier.
For all of 2021, Astec reported net income totaled $17.8 million, or 78 cents per share, which was down 62% from the $46.9 million, or $2.05 per share, earned in 2020. Astec revenues grew last year by 7.1% to $1.1 billion.
Ruffalo said the COVID-19 omicron variant infected nearly 10% of Astec’s staff in early January, limiting production even with the record-high backlog of orders waiting to be filled. But Astec reported it has boosted its staff by 14% from a year ago and raised the prices to offset inflation and address supply chain disruptions.
Astec ended 2021 with about 4,000 employees, up from 3,500 workers a year earlier. The company grew its Chattanooga staff to about 1,600 employees, according to company vice president Steve Anderson.
“In the midst of a challenging 2021 business environment, the evolution of our OneASTEC business model and strategy to simplify, focus and grow continued to move forward as we laid the foundation for future growth,” Ruffalo, said in a statement Monday. “Astec customers and employees remained diligent in the face of lingering supply chain, logistic, labor and net inflation headwinds, along with a fourth-quarter resurgence of COVID-19 in the form of the omicron variant.”
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Astec said domestic sales increased 18.2% in the fourth quarter due mainly to the stronger asphalt plant and concrete plant sales, as well as pricing initiatives and increases in aftermarket parts. But international sales decreased 6.8% primarily due to lower equipment sales partially offset by increased aftermarket parts sales.
Last year, Astec incurred a number of charges, including:
– Transformation program expenses of $13.4 million, or 58 cents per share.
– A fourth-quarter obligations expense under its defined benefit pension plan and other post-retirement benefit plan costs of $4.7 million, or 20 cents per share.
– Restructuring charges from the closure of the Tacoma facility of $2.9 million, or 13 cents per share.
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“These factors negatively impacted the fourth-quarter gross profit margin compared to the same period in 2020 and we expect them to continue to persist in early 2022,” Astec said in its earnings report. “Despite these challenges, there were many positives in 2021 including the launch of the Astec rebranding initiative, which simplified how to do business with our company, the attraction of additional workforce talent that will support capacity growth in 2022 and a focused effort to address supply chain volatility in the market.”
– Compiled by Dave Flessner