Astec Industries, Inc.
) Board of Directors has formalized a leadership succession plan
to bring about changes in the positions of Chief Executive
Officer (CEO) and President, Chief Operating Officer (COO) and
Executive Vice President of the company.
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As per the plan, Benjamin G. Brock will be appointed as the CEO
and President, whereas Richard J. Dorris will serve as the COO
and Executive Vice President.
It is also stated that Dr. J. Don Brock, the incumbent CEO, will
remain as the Executive Chairman of the Board and W. Norman
Smith, the current President and COO, will assume the role of
Vice-Chairman of the Board.
The succession plan reveals the future leadership policy of Astec
through a formal transition process of the existing roles. The
company is yet to decide the date of the final implementation of
its succession plan, which involves the appointments of the
officers, as the whole process depends on several factors.
However, it is expected that the strategy will be executed prior
to the end of 2013.
Astec, which is among the leading manufacturers of farm and
construction machinery along with
H&E Equipment Services Inc.
Caterpillar Inc Del
Joy Global, Inc.
), has also announced a dividend policy, under which, it will pay
a quarterly dividend of 10 cents per share. The
payment of cash dividend will begin in the second quarter of
The dividend policy, however, can be modified or canceled in any
manner and at any time in the future.The amount of dividend will
be determined by the company's financial position, existing
credit agreement and results of operations.
Astec's earnings per share for 2012 were $1.45, a 16% drop from
$1.73 per share in 2011. The company reported revenues of $936.3
million in 2012, up 3% year over year. Domestic revenues
increased 5.3% but international sales dipped 0.3% year over
Astec exited 2012 with cash and cash equivalent of $81 million,
an increase of 42% annually. The company has no debt on its
Astec's customers depend largely on government funding for the
construction and maintenance of the infrastructural projects.
Although a new 27-month Federal highway funding bill was passed
in Jul 2012, it was too late in the 2012 construction season to
have an impact. Owing to the uncertainty prevailing in Federal
infrastructure, customers have tightened their budgets. However,
with the Federal highway funding bill in place, Astec will
benefit from the pick up in construction.
Astec continues to invest significantly in manufacturing new
products and upgrading the existing products, which will benefit
the company, moving forward. Astec will benefit from a recovery
in the economy and the pent up demand for equipment.
Astec currently has a Zacks Rank #3 (Hold).