Astec Industries Announces Divestiture Of Underground Group
Businesses And A Special One-Time Dividend
CHATTANOOGA, Tenn.,
Nov. 1, 2012 /PRNewswire/ -- Astec
Industries, Inc. (Nasdaq: ASTE) today announced that on
October 31, 2012, the Company entered
into agreements to sell its American Augers, Inc. subsidiary as
well as certain assets related to the Trencor large trencher
product line of Astec Underground, Inc. to The Charles Machine
Works, Inc. of Perry, Oklahoma for
approximately $55 million in cash,
subject to closing adjustments. The Company expects the sale to
close before the end of the year. Not included in the sale
are the American Augers vertical oil and gas drilling rig product
line and the four-track surface miner product line manufactured at
Astec Underground. The vertical oil and gas drill rig product
line will be relocated to GEFCO, Inc., a subsidiary of Astec
Industries, Inc. located in Enid,
Oklahoma. The Company will continue to manufacture and expand
the surface miner product line at its Astec Underground facility
where it will also continue to manufacture its newly developed line
of high pressure pump trailers used for fracking and well
servicing. The total revenues of the sold business unit and
product line were $42 million for the
nine months ended September 30,
2012.
Commenting on the sale, Dr. Brock remarked, "We acquired the
Trencor operation in 1988 and American Augers in 1999. These
businesses have been very cyclical through the years. Our strategy
has been to buy and grow companies; however, we sold our utility
trencher and drill line to Toro earlier this year, and the
opportunity became available to sell American Augers and the
Trencor line of large trenchers at Astec Underground. We will
continue to manufacture the vertical oil drilling rigs and related
equipment by moving that product line to GEFCO. At Astec
Underground in Loudon, Tennessee,
we plan to continue to grow our pump trailer business and develop
more equipment related to the fracking industry, as well as expand
our surface miner product line. These products are a part of
our strategy to grow in the energy and mining industries."
The Company also announced that today the Board of Directors
declared a special one-time dividend of $1.00 per share to be paid on December 12, 2012 to shareholders of record as of
November 20, 2012. Commenting on the
declaration of the dividend, Dr. Brock said, "We have maintained a
strong balance sheet for several years but have not found the right
acquisitions in which to invest our excess cash. While
acquisitions are still a high priority for us, the Board of
Directors decided to declare a special one-time dividend as a
tangible return of value to our shareholders while the tax rates
are still advantageous."
Astec Industries, Inc. is a manufacturer of specialized
equipment for building and restoring the world's infrastructure.
Astec's manufacturing operations are divided into four primary
business segments: aggregate processing and mining equipment;
asphalt production equipment; mobile asphalt paving equipment; and
underground boring, directional drilling and trenching
equipment. Additionally, Astec's Other Group contains one
subsidiary that manufactures equipment used for wood processing and
recycling and one that is a company-owned dealership located in
Australia.
The information contained in this press release contains
"forward-looking statements" (within the meaning of the Private
Securities Litigation Reform Act of 1995) regarding the future
performance of the Company, including, without limitation,
statements about the Company's pending acquisitions, the Company's
manufacturing, growth and acquisition strategies. These
forward-looking statements reflect management's expectations and
are based upon currently available information, and the Company
undertakes no obligation to update or revise such statements.
These statements are not guarantees of performance and are
inherently subject to risks and uncertainties, many of which cannot
be predicted or anticipated. Future events and actual
results, financial or otherwise, could differ materially from those
expressed in or implied by the forward-looking statements.
Important factors that could cause future events or actual results
to differ materially include: general uncertainty in the
economy, general business conditions in the industry, demand for
the Company's products and the Company's production capacity, tax
rates and the impact of future legislation thereon, and those other
factors listed from time to time in the Company's reports filed
with the Securities and Exchange Commission, including but not
limited to the Company's annual report on Form 10-K for the year
ended December 31, 2011.
SOURCE Astec Industries, Inc.