Astec Industries highlights pellet plant order in investor call

By Erin Voegele | April 29, 2015

Astec Industries Inc. has released first quarter financial results, reporting net sales of $288.7 million, up 21 percent from the $238.7 million reported for the same period of 2014. Earnings were $15.1 million, or 65 cents per diluted share, up 59 percent when compared to the $9.5 million, or 41 cents per diluted share, reported for the same quarter of the prior year. Domestic sales increased 20 percent, reaching $211 million, compared to $175.5 million during the first quarter of 2014. International sales were up 23 percent, from $63.2 million during the first quarter of 2014 to $77.7 million during the same three months of 2015.

During an investor call, Ben Brock, president and CEO of Astec Industries, spoke briefly about recent pellet plant orders. “Updating everyone on the pellet plant that we delivered to Hazlehurst, Georgia, line one of the three lines continues to run,” he said. “Line two is in the testing phase; line three is being installed as we speak.  As a continual reminder, it is a new product that we chose to finance.  And as a result, we will recognize the revenue for the plant as we are paid, this will have an effect on our cash and inventory until it is paid in full, and the order for our three lines was for about $60 million.”

“There was a large teleconference in London last week that our team attended and the startup for the pellet plant continues to bring interested customers to us,” Brock continued. “And we do expect to sell the new pellet plant this quarter, local permitting, pellet supply contracts and customer finance on these size projects takes a very long time, and is requiring a high level of patience for us as we progress in pellet plants. Coming out of the conference our team is very encouraged.”

According to Brock, pellet plants are among the growth opportunities the company sees, along with large crushers for the mining industry, small commercial paving equipment and aftermarket parts and service. He also indicated Astec Industries is growing its product sales targeted at multiple energy segments, including the biomass industry with wood pellets, the oil industry and the gas industry.