UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to _______________________ Commission file number 001-11595 ASTEC INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Tenness ...

Astec Industries, Inc. (NASDAQ:ASTE) Q4 2019 Earnings Conference Call March 4, 2020 10:00 AM ET Company Participants Steve Anderson - SVP & Director of IR Barry Ruffalo - President & CEO Becky Weyenberg - CFO Conference Call Participants Mig Dobre - Robert W. Baird Joe Mondillo - Sidoti & Company Greetings and welcome to Astec Industries, Inc. Fourth Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. ...

PART I – FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Astec Industries' unaudited condensed consolidated financial statements for Q3 and nine months ended September 30, 2019, including balance sheets, operations, cash flows, and equity [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$815.7 million** from **$855.5 million**, driven by reduced current assets, while total liabilities significantly decreased to **$198.1 million** from **$270.2 million** due to lower long-term debt Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Current Assets** | $529,884 | $560,991 | | **Total Assets** | $815,669 | $855,457 | | **Total Current Liabilities** | $173,081 | $189,231 | | **Long-term Debt** | $717 | $59,709 | | **Total Liabilities** | $198,085 | $270,167 | | **Total Equity** | $617,584 | $585,290 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2019 net sales were flat at **$255.8 million**, with net income decreasing to **$3.0 million**; nine-month net sales increased to **$886.4 million**, swinging to a **$40.7 million** net income Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $255,807 | $256,613 | $886,389 | $854,595 | | **Gross Profit** | $51,860 | $58,284 | $212,027 | $137,398 | | **Income (loss) from operations** | $3,342 | $7,230 | $52,002 | $(16,998) | | **Net income (loss) attributable to controlling interest** | $3,010 | $6,995 | $40,662 | $(13,411) | | **Diluted EPS** | $0.13 | $0.30 | $1.79 | $(0.58) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly improved to **$84.2 million** for the nine months, compared to a **$20.5 million** use in the prior year, primarily due to higher net income and working capital changes Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2019 | 2018 | | :--- | :--- | :--- | | **Net cash provided (used) by operating activities** | $84,175 | $(20,534) | | **Net cash used by investing activities** | $(16,249) | $(17,105) | | **Net cash provided (used) by financing activities** | $(66,706) | $2,506 | - The significant increase in operating cash flow was mainly due to a swing from a net loss to net income, a smaller increase in inventories compared to the prior year, and improved collections on receivables[12](index=12&type=chunk) [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies, including new lease standards adoption, revenue recognition, segment performance, debt, legal contingencies, and restructuring charges - The company adopted new lease accounting standards (Topic 842) on January 1, 2019, resulting in the recognition of right-of-use assets of **$5.0 million** and corresponding lease liabilities[22](index=22&type=chunk)[57](index=57&type=chunk) - Restructuring charges of **$0.9 million** in Q3 2019 and **$1.4 million** year-to-date were incurred related to the exit from the wood pellet plant business and the closure of the Astec Mobile Machinery (AMM) subsidiary in Germany[104](index=104&type=chunk) - The company is a defendant in a putative shareholder class action lawsuit alleging violations of the Securities Exchange Act of 1934, disputing allegations and unable to estimate a possible loss[95](index=95&type=chunk) [Management's Discussion and Analysis (MD&A)](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses Q3 and nine-month 2019 financial performance, market factors, segment results, liquidity, and capital resources, highlighting non-recurring items' impact [Business Overview and Market Factors](index=26&type=section&id=Overview) Company performance is influenced by public infrastructure spending, economic conditions, and commodity prices, with a strong U.S. dollar negatively impacting international sales - The company's financial performance is sensitive to public sector spending on infrastructure, with the FAST Act, funding projects through September 2020, being a key driver[119](index=119&type=chunk)[122](index=122&type=chunk) - Commodity price fluctuations are a significant factor, as steel is a major component cost, and oil prices impact both the Infrastructure Group (via asphalt costs) and the Energy Group (via demand for drilling equipment)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - The company is implementing initiatives with a consulting firm to reduce raw material costs and inventory levels, expected to positively impact gross margins from late 2019 onwards[136](index=136&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q3 2019 net sales were flat, with gross margin declining; nine-month sales grew **3.7%**, and gross margin improved significantly due to a pellet plant sale and non-recurrence of prior-year charges - The nine-month 2019 results include a **$20 million** sale from the Georgia Pellet Plant, which had its inventory value written down to zero in 2018, directly contributing to gross profit[137](index=137&type=chunk) - The nine-month 2018 results were negatively impacted by **$75.3 million** in charges against sales related to the Arkansas Pellet Plant agreement, significantly depressing prior-year gross profit[138](index=138&type=chunk) Net Sales Comparison (in thousands) | Period | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | **Q3 Net Sales** | $255,807 | $256,613 | (0.3)% | | **Nine Months Net Sales** | $886,389 | $854,595 | 3.7% | Gross Profit Comparison | Period | 2019 Gross Profit | 2019 Margin | 2018 Gross Profit | 2018 Margin | | :--- | :--- | :--- | :--- | :--- | | **Q3** | $51,860 | 20.3% | $58,284 | 22.7% | | **Nine Months** | $212,027 | 23.9% | $137,398 | 16.1% | [Segment Performance](index=34&type=section&id=Segment%20Performance) Q3 2019 saw slight Infrastructure sales growth, while Aggregate & Mining and Energy sales declined or were flat; nine-month Infrastructure sales grew **18.6%**, driven by a pellet plant sale Q3 2019 Segment Net Sales (in thousands) | Segment | Q3 2019 Sales | Q3 2018 Sales | % Change | | :--- | :--- | :--- | :--- | | **Infrastructure Group** | $88,219 | $87,063 | 1.3% | | **Aggregate and Mining Group** | $99,617 | $101,735 | (2.1)% | | **Energy Group** | $67,971 | $67,815 | 0.2% | Nine Months 2019 Segment Net Sales (in thousands) | Segment | Nine Months 2019 Sales | Nine Months 2018 Sales | % Change | | :--- | :--- | :--- | :--- | | **Infrastructure Group** | $376,448 | $317,359 | 18.6% | | **Aggregate and Mining Group** | $312,985 | $337,100 | (7.2)% | | **Energy Group** | $196,956 | $200,136 | (1.6)% | - The order backlog as of September 30, 2019, was **$243.9 million**, a **21.0%** decrease from **$308.6 million** a year prior, with declines across all three segments[163](index=163&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity with **$26.3 million** cash and **$141.4 million** available credit; operating cash flow significantly improved to **$84.2 million** for the nine months - The company had **$26.3 million** in cash and zero borrowings under its **$150 million** revolving credit facility as of September 30, 2019[183](index=183&type=chunk) - Capital expenditures for 2019 are forecasted to be approximately **$25 million**[189](index=189&type=chunk) - No shares were repurchased in 2019 under the stock buy-back program, which has **$125.9 million** remaining authorization[190](index=190&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to market risk disclosures from the 2018 Annual Report on Form 10-K - There were no material changes to the company's market risk profile during the quarter[197](index=197&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of September 30, 2019, due to previously identified material weaknesses in internal control over financial reporting - The company's principal executive and financial officers concluded that disclosure controls and procedures were not effective as of the end of the period[199](index=199&type=chunk) - The ineffectiveness is due to material weaknesses in internal control over financial reporting previously identified in the 2018 Form 10-K, and remediation efforts are ongoing[199](index=199&type=chunk)[201](index=201&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) Updates on a shareholder class action lawsuit and a GEFCO subsidiary breach of warranty claim, with potential losses currently unestimable - The company and certain officers are defendants in a shareholder class action lawsuit filed on behalf of shareholders who purchased stock between July 26, 2016, and October 22, 2018; a motion to dismiss was filed on October 25, 2019[204](index=204&type=chunk) - The GEFCO subsidiary is involved in a lawsuit alleging breach of warranty for equipment sold in 2013 with an original purchase price of approximately **$8.5 million**[205](index=205&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors from those disclosed in the 2018 Annual Report on Form 10-K - There have been no material changes in the Company's risk factors from those disclosed in the 2018 Form 10-K[206](index=206&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased during the first nine months of 2019 under the existing **$150 million** share repurchase program - No shares were repurchased during the first nine months of 2019 under the existing **$150 million** share repurchase program[207](index=207&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists filed exhibits, including an amendment to the Supplemental Executive Retirement Plan and CEO/CFO certifications - Exhibits filed include CEO/CFO certifications (Sections 302 and 906) and an amendment to the Supplemental Executive Retirement Plan[209](index=209&type=chunk)

Astec Industries, Inc. (NASDAQ:ASTE) Q3 2019 Results Earnings Conference Call October 29, 2019 10:00 AM ET Company Participants Steve Anderson - VP & Director of IR Barry Ruffalo - President & CEO David Silvious - CFO Conference Call Participants Operator Greetings and welcome to Astec Industries Third Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this confer ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, showing a shift from net loss to net income in 2019 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$848.6 million**, while liabilities fell, increasing equity to **$620.6 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Total Current Assets** | $557,535 | $560,991 | | **Total Assets** | **$848,555** | **$855,457** | | **Total Current Liabilities** | $173,936 | $189,231 | | **Long-term Debt** | $28,891 | $59,709 | | **Total Liabilities** | **$227,947** | **$270,167** | | **Total Equity** | **$620,608** | **$585,290** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income reached **$37.6 million** for H1 2019, a turnaround from a **$20.6 million** net loss in H1 2018 Key Performance Indicators (in thousands, except per share data) | Metric | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net Sales | $630,582 | $597,981 | | Gross Profit | $159,976 | $79,113 | | Income (Loss) from Operations | $48,660 | $(24,228) | | Net Income (Loss) | $37,579 | $(20,552) | | Diluted EPS | $1.66 | $(0.89) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly improved to **$42.9 million** for H1 2019, driven by higher net income Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,871 | $18,421 | | Net cash used by investing activities | $(8,088) | $(8,381) | | Net cash used by financing activities | $(35,908) | $(5,903) | | **Net change in cash and cash equivalents** | **$(916)** | **$2,926** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies, segment performance, debt, and contingent matters, including a shareholder lawsuit - Adopted new lease accounting standard ASU 2016-02 on January 1, 2019, recognizing **$4.99 million** in right-of-use (ROU) assets, with no material financial impact[22](index=22&type=chunk)[54](index=54&type=chunk) - A shareholder class action lawsuit was filed against the Company and certain officers, with the Company disputing allegations and unable to estimate a possible loss[91](index=91&type=chunk) - The sale of the Georgia pellet plant was recognized in Q2 2019 for a discounted price of **$20.0 million**, after its value was written down to zero in 2018[90](index=90&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial turnaround from net loss to net income, driven by non-recurring pellet plant contracts [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Net sales increased, leading to a **$23.4 million** net income in Q2 2019, a turnaround from a **$40.7 million** net loss in Q2 2018 Q2 Financial Comparison (in thousands, except per share data) | Metric | Q2 2019 | Q2 2018 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $304,802 | $272,528 | $32,274 | 11.8% | | Gross Profit | $83,450 | $1,108 | $82,342 | N/A | | Net Income (Loss) | $23,377 | $(40,674) | $64,051 | N/A | | Diluted EPS | $1.03 | $(1.76) | $2.79 | N/A | - Q2 2019 results include a **$20.0 million** sale from the Georgia Pellet Plant, significantly contributing to gross margin after its inventory value was written off in 2018[130](index=130&type=chunk)[142](index=142&type=chunk) - Q2 2018 results included a **$75.3 million** charge against sales and a **$71.0 million** reduction in gross margin related to the Arkansas Pellet Plant agreement[131](index=131&type=chunk)[142](index=142&type=chunk) - The company's order backlog decreased **18.8%** to **$246.1 million** as of June 30, 2019, from **$302.9 million** a year prior, with declines across all segments[154](index=154&type=chunk) [Segment Analysis](index=35&type=section&id=Segment%20Analysis) Infrastructure Group sales rose **60.1%** due to pellet plant events, while other segments faced declines and profit pressure Q2 2019 Segment Sales vs. Q2 2018 (in thousands) | Segment | Q2 2019 Sales | Q2 2018 Sales | % Change | | :--- | :--- | :--- | :--- | | Infrastructure Group | $133,235 | $83,202 | 60.1% | | Aggregate and Mining Group | $106,837 | $116,297 | (8.1)% | | Energy Group | $64,730 | $73,029 | (11.4)% | - Excluding pellet plant impacts, the Infrastructure Group's domestic sales declined by **$40.4 million** in Q2 2019 due to reduced asphalt plant and mobile equipment sales[157](index=157&type=chunk) - Aggregate and Mining Group sales were hurt by decreased rental activity from distributors and weather-related construction delays[158](index=158&type=chunk) - Energy Group sales declined due to a slowdown in asphalt and oil & gas industries, impacting industrial boiler sales, and lower wood chipper sales[159](index=159&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources include **$24.9 million** cash and a **$150 million** credit facility, with net cash from operations improving to **$42.9 million** - As of June 30, 2019, the company had **$24.9 million** in cash, with **$21.4 million** held by foreign subsidiaries[176](index=176&type=chunk) - Borrowings under the main revolving credit facility were reduced to **$28.1 million** at June 30, 2019, from **$58.8 million** at year-end 2018[176](index=176&type=chunk) - Forecasted capital expenditures for the full year 2019 are approximately **$25.0 million**[182](index=182&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to market risk disclosures from the 2018 Annual Report on Form 10-K - No material changes to market risk disclosures from the 2018 Form 10-K[190](index=190&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective due to material weaknesses in internal control - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were not effective as of the end of the reporting period[192](index=192&type=chunk) - The ineffectiveness is due to material weaknesses in internal control over financial reporting previously disclosed in the 2018 Form 10-K[192](index=192&type=chunk) - A remediation plan is being implemented to address the material weaknesses, but they will not be considered remediated until controls operate effectively for a sufficient period[195](index=195&type=chunk) [PART II – OTHER INFORMATION](index=42&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions, including a shareholder class action lawsuit, with no expected material adverse effect - The company is subject to legal actions from the ordinary course of business[196](index=196&type=chunk) - Referenced Note 14 for details on a shareholder class action lawsuit[196](index=196&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors from the 2018 Annual Report on Form 10-K - No material changes to risk factors from the 2018 Form 10-K[197](index=197&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a **$150 million** share repurchase program, but no shares were repurchased during the first six months of 2019 - A share repurchase program for up to **$150 million** was approved on July 29, 2018[198](index=198&type=chunk) - No shares were repurchased during the six months ended June 30, 2019[198](index=198&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including amended bylaws, CEO/CFO certifications, and XBRL data files - Filed exhibits include CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act) and XBRL documents[200](index=200&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-11595 Astec Industries, Inc. (Exact name of registrant as specified in its charter) Tennessee 62-0873631 (State or other jurisdi ...

Astec Industries, Inc. (NASDAQ:ASTE) Q1 2019 Earnings Conference Call April 23, 2019 10:00 AM ET Company Participants Steve Anderson - VP, Director of IR Rick Dorris - Interim CEO & COO David Silvious - CFO Conference Call Participants Mig Dobre - Robert W. Baird Stanley Elliott - Stifel Larry De Maria - William Blair Brian Sponheimer - Gabelli & Company Operator Greetings. Welcome to Astec Industry’s First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A brief questio ...

```markdown Part I [Business](index=5&type=section&id=Item%201.%20Business) Astec Industries designs, manufactures, and markets equipment for road building and construction, operating through three main segments - The company is a manufacturer of equipment for road building, aggregate processing, and energy industries, operating through **17 manufacturing subsidiaries**[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The business is organized into **three reportable segments**: Infrastructure Group, Aggregate and Mining Group, and Energy Group, with a separate Corporate category for oversight and support functions[18](index=18&type=chunk) - The company's strategy emphasizes being a **cost-efficient producer**, a **technological innovator**, and providing **first-class customer service**, positioning itself to capitalize on infrastructure needs globally[16](index=16&type=chunk) [Infrastructure Group](index=7&type=section&id=Item%201.%20Business%20-%20Infrastructure%20Group) The Infrastructure Group focuses on asphalt-related road construction equipment, with its backlog significantly decreasing in 2018 - This segment designs and manufactures a complete line of asphalt plants, pavers, screeds, milling machines, and material transfer vehicles[20](index=20&type=chunk) - Astec is developing new asphalt plant models specifically for foreign markets where current offerings have not been well received[25](index=25&type=chunk) - The German subsidiary, Astec Mobile Machinery GmbH, ceased operations in early 2019 and is being liquidated[31](index=31&type=chunk) Infrastructure Group Backlog (2017-2018) | Year | Backlog (in thousands) | Change | | :--- | :--- | :--- | | 2018 | $149,436 | -37.6% | | 2017 | $239,495 | | - The 2018 backlog decrease was significantly impacted by the removal of a **$60 million** order for a three-line pellet plant from the 2017 backlog[39](index=39&type=chunk) [Aggregate and Mining Group](index=10&type=section&id=Item%201.%20Business%20-%20Aggregate%20and%20Mining%20Group) This group manufactures heavy processing equipment for aggregate, mining, and bulk handling markets, with its backlog increasing by **11.7%** in 2018 - The group designs and manufactures heavy processing equipment for aggregate, metallic mining, recycling, ports, and bulk handling markets through eight business units including Telsmith, KPI-JCI-AMS, and Telestack[40](index=40&type=chunk) - The group's Brazilian subsidiary, Astec Brazil, began full production in 2015 but sales have been hampered by the economic downturn in South America[55](index=55&type=chunk)[56](index=56&type=chunk) Aggregate and Mining Group Backlog (2017-2018) | Year | Backlog (in thousands) | Change | | :--- | :--- | :--- | | 2018 | $130,691 | +11.7% | | 2017 | $116,987 | | [Energy Group](index=14&type=section&id=Item%201.%20Business%20-%20Energy%20Group) The Energy Group supplies heavy equipment to the oil and gas, construction, and water well industries, with its backlog growing by **18%** in 2018 - The group serves the oil & gas, construction, and water well industries with products like heaters, drilling rigs, concrete plants, wood chippers, and industrial burners[66](index=66&type=chunk) - The group includes Power Flame, acquired in August 2016, and RexCon, acquired in October 2017[66](index=66&type=chunk) Energy Group Backlog (2017-2018) | Year | Backlog (in thousands) | Change | | :--- | :--- | :--- | | 2018 | $64,834 | +17.9% | | 2017 | $54,987 | | [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company identifies several risks including economic downturns, dependency on government funding, and volatility in oil and steel prices - Economic downturns and reduced government infrastructure spending (e.g., FAST Act) pose significant risks to revenue[98](index=98&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - Volatility in oil and steel prices can negatively impact production costs, gross margins, and demand for products across different segments[109](index=109&type=chunk)[112](index=112&type=chunk) - The company faces risks from integrating acquisitions, international market fluctuations, and the loss of key management personnel, highlighted by the recent resignation of the CEO[113](index=113&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk) - Goodwill impairment is a risk, with charges of **$11.2 million** recorded in 2018. The company also identified material weaknesses in internal controls, which could impact investor confidence[130](index=130&type=chunk)[136](index=136&type=chunk) - Risks associated with new, innovative projects, such as the wood pellet plants, include potential for significant cost overruns and negative margins[131](index=131&type=chunk)[132](index=132&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company owns and leases numerous properties globally, serving as corporate offices, manufacturing plants, and service centers - The company operates from **21 separate manufacturing locations** as of 2018[86](index=86&type=chunk) - Properties are located globally, including the U.S., Canada, South Africa, Brazil, Australia, and Germany, supporting manufacturing, sales, and service functions for all three operating segments[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) Astec Industries is a defendant in a shareholder class action lawsuit filed on **February 1, 2019**, alleging false and misleading statements - A shareholder class action lawsuit was filed on **February 1, 2019**, alleging violations of the Exchange Act due to purportedly false and misleading statements made between **July 26, 2016, and October 22, 2018**[147](index=147&type=chunk) - Management disputes the allegations and believes the ultimate outcome will not have a material adverse effect on the company's financials, though an unfavorable ruling is possible[148](index=148&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=31&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, increased its quarterly dividend to **$0.11 per share**, and repurchased **582,000 shares** in 2018 - The quarterly cash dividend was increased to **$0.11 per share** starting in Q3 2018[157](index=157&type=chunk) 2018 Share Repurchases | Period | Shares Repurchased (thousands) | Average Price Paid | Total Cost (in thousands) | | :--- | :--- | :--- | :--- | | August 2018 | 297 | $46.91 | $13,932 | | October 2018 | 238 | $35.10 | $8,354 | | November 2018 | 47 | $39.29 | $1,847 | | **Total** | **582** | **$41.46** | **$24,133** | - As of **December 31, 2018**, approximately **$125.9 million** remained available for repurchase under the authorized plan[158](index=158&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of **December 31, 2018**, due to material weaknesses - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were not effective as of **December 31, 2018**[164](index=164&type=chunk) - The ineffectiveness was attributed to material weaknesses in internal control over financial reporting, with a remediation plan outlined in Appendix A[164](index=164&type=chunk)[165](index=165&type=chunk) Part III [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=34&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) This section provides information on equity compensation plans, detailing securities to be issued and those available for future issuance Equity Compensation Plan Information as of December 31, 2018 | Plan Category | Number of securities to be issued upon exercise | Securities remaining available for future issuance | | :--- | :--- | :--- | | Equity Compensation Plans Approved by Shareholders | 165,238 | 503,635 | | Equity Compensation Plans Not Approved by Shareholders | 27,546 | 71,736 | | **Total** | **192,784** | **575,371** | - The Amended and Restated Non-Employee Directors Compensation Plan allows directors to receive annual retainers in cash or common stock and provides an annual stock award in the form of restricted stock units (RSUs)[173](index=173&type=chunk)[174](index=174&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=35&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed with the Form 10-K, including key agreements and certifications - All financial statements, including Consolidated Balance Sheets, Statements of Operations, and Cash Flows, are located in Appendix A[176](index=176&type=chunk) - Key filed exhibits include the Separation Agreement with former CEO Benjamin G. Brock, the Second Amendment to the Credit Agreement, and Sarbanes-Oxley certifications[179](index=179&type=chunk) Appendix A: Financial Information [Selected Consolidated Financial Data](index=39&type=section&id=Selected%20Consolidated%20Financial%20Data) The company's 2018 financial performance shows a net loss of **$60.4 million**, decreased net sales, and a sharp fall in gross profit margin Selected Consolidated Financial Data (2017 vs. 2018, in thousands) | Metric | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | Net sales | $1,171,599 | $1,184,739 | -1.1% | | Gross profit | $135,766 | $243,129 | -44.2% | | Gross profit % | 11.6% | 20.5% | -8.9 p.p. | | Income (loss) from operations | ($86,421) | $55,537 | -255.6% | | Net income (loss) attributable to controlling interest | ($60,449) | $37,795 | -259.9% | | Diluted EPS | ($2.64) | $1.63 | -261.9% | | Total assets | $855,457 | $889,579 | -3.8% | | Total equity | $585,290 | $686,765 | -14.8% | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A details 2018's operational and financial events, heavily impacted by wood pellet plant issues, leading to a net loss and goodwill impairment - A 2018 agreement related to a wood pellet plant resulted in a **$75.3 million** reduction in sales and a **$71.0 million** reduction in gross margin for the Infrastructure Group[212](index=212&type=chunk) - The company wrote down the value of a separate, unsold wood pellet plant to zero, resulting in a **$65.7 million** charge to cost of sales, as it decided to exit the pellet plant business line[213](index=213&type=chunk) - A goodwill impairment charge of **$11.2 million** was recorded in the Energy Group related to the RexCon and Power Flame acquisitions[216](index=216&type=chunk) - The company's total backlog decreased **16.2%** to **$345.0 million** at year-end 2018, largely due to a **$60.2 million** reduction from pellet plant-related orders[229](index=229&type=chunk) Net Sales by Segment (2017 vs. 2018, in thousands) | Segment | 2018 Sales | 2017 Sales | % Change | | :--- | :--- | :--- | :--- | | Infrastructure Group | $442,289 | $553,691 | (20.1)% | | Aggregate and Mining Group | $453,164 | $403,720 | 12.2% | | Energy Group | $276,146 | $227,328 | 21.5% | [Management's Report on Internal Control over Financial Reporting](index=60&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management concluded that internal control over financial reporting was ineffective as of **December 31, 2018**, due to several material weaknesses - Management identified material weaknesses and concluded that internal control over financial reporting was not effective as of **December 31, 2018**[327](index=327&type=chunk) - Corporate-level weaknesses were found in the goodwill impairment assessment and income tax calculation processes[317](index=317&type=chunk)[319](index=319&type=chunk) - Business unit-level weaknesses included ineffective IT controls over a new ERP system at Roadtec, improper application of new revenue recognition standards (**ASC 606**), and inadequate controls over inventory[321](index=321&type=chunk)[323](index=323&type=chunk)[325](index=325&type=chunk) - A remediation plan is underway, focusing on enhancing controls, hiring/training personnel, implementing new software, and increasing corporate monitoring[329](index=329&type=chunk) [Reports of Independent Registered Public Accounting Firm](index=63&type=section&id=Reports%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an adverse opinion on internal controls but an unqualified opinion on the consolidated financial statements - The auditor issued an adverse opinion on the company's internal control over financial reporting as of **December 31, 2018**, due to identified material weaknesses[334](index=334&type=chunk) - The auditor issued an unqualified opinion on the consolidated financial statements, stating they are presented fairly in accordance with U.S. GAAP[335](index=335&type=chunk)[343](index=343&type=chunk) [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, goodwill impairment, tax impacts, and contingent liabilities, with segment data showing varied performance - Goodwill impairment of **$11.19 million** was recorded in the Energy Group in Q4 2018. The valuations performed in 2017 and 2016 indicated no impairment[437](index=437&type=chunk) - The company's credit facility was amended in February 2019, increasing the unsecured line of credit from **$100 million** to **$150 million** and extending the maturity to **December 2023**[445](index=445&type=chunk) - The **2017 Tax Cuts and Jobs Act** resulted in a provisional tax expense of **$492k** in 2017, which was finalized in 2018 with a subsequent adjustment increasing tax expense by **$1.235 million**[480](index=480&type=chunk)[485](index=485&type=chunk) - Contingent liabilities as of Dec 31, 2018, include **$2.2 million** for customer debt guarantees and **$13.1 million** for letters of credit and performance guarantees[487](index=487&type=chunk)[488](index=488&type=chunk) - The company adopted new revenue recognition standards (**ASU 2014-09**) on Jan 1, 2018, using the modified retrospective method, which did not have a material impact on financial results[497](index=497&type=chunk) ```