Astec Industries reported 2020 sales of $1.02 billion, down 12 percent from $1.17 billion in 2019. Domestic sales decreased $91.5 million or 10.1 percent, and international sales decreased $53.7 million or 20.6 percent.
Sales in the fourth quarter were down 15.6 percent compared to the same period in 2019, at $238.9 million compared to $283.2. million.
Gross profit for 2020 was up slightly to $240.1 million, compared to $239.4 million in 2019.
Net income, on the other hand, was up nearly 100 percent for the year: $46.9 million compared to $22.2 million in 2019. In relation to efforts to simplify the organization, a net $13.8 million pre-tax restructuring charge was incurred. This charge was primarily related to the four completed and one announced facility closures in 2020 and January 2021 as well as the associated reduction in labor and inventory adjustments. In addition, there was a net $3.4 million gain on the sale of property, equipment, and business partially offset by asset impairments.
“Our fourth quarter 2020 results demonstrate a strong finish to the year as our margins expanded during the quarter, despite a decrease in net sales,” said Barry Ruffalo, CEO, in a prepared statement. “The margin improvement is a direct result of the initiatives that began in 2019 and accelerated in 2020 related to our strategic transformation. We continued to improve and gain traction with our operational excellence and strategic procurement initiatives. During the quarter, we continued to execute against our strategic initiatives to Simplify, Focus, and Grow the business. Under Focus, we continue to build and leverage our OneASTEC platforms, which create a strong foundation for growth. Under Grow, we completed the acquisition of Grathwol automation and brought in an experienced VP of product management for our Controls and Automation platforms. We remain focused on providing our customers industry-leading technology solutions that provide value and support our Rock to Road initiatives, which continue to gain traction.
“Looking ahead to 2021, we will continue to build upon our positive momentum from 2020 and further transform our business to become an even stronger and more resilient organization with continued focus on operational and commercial excellence, profitable growth and long-term stakeholder value creation.”
Astec Covid-19 business update
Below is Astec's stated Covid-related update by category:
Balance sheet and liquidity: The Company remains focused on liquidity and cash generation. We ended the quarter with a net cash position of $158.6 million with total debt of $2.0 million. The Company has available liquidity of $312.4 million as of December 31, 2020.
Operations: All of our facilities are operational and able to meet current demand levels. We continue to manufacture our products for building and maintaining the infrastructure used to move goods to market, facilitate the transportation needs of communities and for public health and safety.
Supply chain: We have not experienced interruption to our supply chain and are able to source the necessary materials needed to meet our customers’ needs. We are closely monitoring our supply chain and are ready to take proactive actions as needed to mitigate any potential disruptions. We have increased the frequency of communications with our suppliers and customers to ensure business continuity as well as anticipate and prepare for any new developments.
Cost management: We have implemented additional actions to help mitigate the financial and operational impacts of COVID-19, including reducing expenses and conserving cash. These actions include:
- Overall headcount reduction of approximately 8.5% since fourth quarter of 2019
- Discretionary spending reductions
- Working capital management to ensure efficient accounts receivable processing with our customers
Source: Astec
