Despite global labor and supply chain challenges and delays in Congressional approval of the infrastructure spending package, one of the world's biggest road-building equipment makers more than doubled its adjusted net income in the third quarter as road builders bought more equipment and the company's order backlog jumped to a record high.
Astec Industries Inc. said Wednesday that its adjusted profits rose to $11.4 million, up from $4.4 million a year earlier, on sales of $267 million — which were 15.4% higher than a year earlier.
The Chattanooga-based road-building equipment maker reported a record backlog of orders as of Sept. 30 of $620.5 million.
The results beat analysts' expectations, and Astec shares traded higher Wednesday.
"I am pleased with the commitment and tenacity of the Astec team as we continue to work diligently and efficiently to deliver solid results in the midst of continued global headwinds from inflation, supply chain disruptions and labor challenges," said Barry Ruffalo, chief executive officer of Astec. "Although for the time being, the federal highway bill has been extended for a short-term versus long-term period, we continue to see strong organic market activity and opportunities for growth."
Ruffalo, who joined Astec two years ago, said the company is "still in the early innings of our business evolution," including the OneASTEC business model to "simplify, focus and grow" the company sales and profits.
The backlog of orders from a year ago has nearly tripled for Astec, and Ruffalo said the company continues to face issues in getting some supplies and workers for production to keep pace with the higher demand.
"We actively manage our global supply chain for constraints and volatility. However, we are not immune to disruptions caused by the recent surge in global demand," he said. "Labor shortages at our vendors and logistics partners have increased lead times for certain components used in our manufacturing process."
Some Astec plants are experiencing staffing shortages and higher labor costs, which has led to more outsourcing of work and higher pay for workers, Ruffalo said.
"We continue to adjust our production schedules and manufacturing workload distribution, outsource components, implement efficiency improvements and actively modify our recruitment process and compensation and benefits to attract and retain production personnel in our manufacturing facilities," he said.
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