INDEX UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 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 ...

Astec Industries, Inc. (NASDAQ:ASTE) Q2 2020 Earnings Conference Call August 5, 2020 10:00 AM ET Company Participants Steve Anderson - Senior Vice President, Administration, IR and Secretary Barry Ruffalo - Chief Executive Officer Becky Weyenberg - Chief Financial Officer Conference Call Participants Mig Dobre - Baird Stanley Elliott - Stifel Joe Mondillo - Sidoti & Company Brian Sponheimer - Gabelli Funds Steve Anderson Thank you and welcome to the Astec Industries Second Quarter 2020 Earnings Conference C ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 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 o ...

Astec Industries, Inc. (NASDAQ:ASTE) Q1 2020 Earnings Conference Call May 6, 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 Stanley Elliott - Stifel Operator Greetings, and welcome to the Astec Industries First Quarter 2020 Financial Results Conference Call. [Operator instructions] As a reminder, this conference is being recorded. It's no ...

Facilities and Operations - The company owns significant properties including a 543,200 square foot facility in Chattanooga, Tennessee, used for offices, manufacturing, and training[152] - The company has a manufacturing facility in Yankton, South Dakota, with an approximate square footage of 314,100 and an acreage of 50[153] - The company operates a 350,000 square foot facility in Enid, Oklahoma, dedicated to offices and manufacturing[154] - The company has a leased distribution center in West Columbia, South Carolina, with a square footage of 20,400[154] - The company has a manufacturing site in Johannesburg, South Africa, covering 229,000 square feet and occupying 21 acres[153] - The company has a total of 91,600 square feet of office and manufacturing space in Parsons, Kansas[154] - The company has a leased sales office and warehouse in Cape Town, South Africa, with a square footage of 1,100[153] - The company has a corporate office in Chattanooga, Tennessee, occupying 10,000 square feet[154] - The company has a manufacturing facility in Tacoma, Washington, with a square footage of 95,300[152] - The company has a total of 135,100 square feet of office and manufacturing space in Chattanooga, Tennessee, for its Heatec segment[153] Financial Performance - Astec Industries reported a revenue of $XXX million for the fiscal year ended December 31, 2019, representing a Y% increase compared to the previous year[200] - The company achieved a net income of $XX million, which is a Z% increase year-over-year[200] - Net sales for 2019 were $1,169,613, a slight decrease from $1,171,599 in 2018, representing a 0.2% decline[201] - Gross profit increased to $239,408 in 2019, with a gross profit margin of 20.5%, compared to 11.6% in 2018[201] - Net income for 2019 was $22,174, a significant recovery from a net loss of $60,744 in 2018[201] - Basic earnings per share for 2019 were $0.99, compared to a loss of $2.64 in 2018[201] - Total assets decreased to $800,498 in 2019 from $855,457 in 2018, indicating a decline of approximately 6.4%[201] - Working capital was $333,537 in 2019, down from $371,760 in 2018, reflecting a decrease of about 10.3%[201] - The backlog of orders decreased by $81,257 or 23.6% to $263,705 at December 31, 2019, with significant decreases in both domestic and international backlogs[259] Shareholder Information - The Company paid a cash dividend of $1.00 per share in Q4 2012 and increased the quarterly cash dividend to $0.11 per share starting Q3 2018[173] - As of December 31, 2019, the maximum dollar value of shares available for repurchase under the stock repurchase program is approximately $126 million[174] - The high and low sales prices of the Company's Common Stock in Q4 2019 were $43.92 and $28.63 respectively[175] - As of December 31, 2019, there were 218,220 securities to be issued upon exercise of outstanding options, warrants, rights, and RSUs[187] - The Company has 511,867 securities remaining available for future issuance under equity compensation plans[187] Internal Control and Compliance - The Company reported material weaknesses in internal control over financial reporting as of December 31, 2019[180] - KPMG LLP expressed an adverse opinion on the effectiveness of the Company's internal control over financial reporting[331] - Control deficiencies related to goodwill impairment and income taxes were identified, indicating a reasonable possibility of material misstatement[320][322] - The Company did not design effective controls over revenue recognition, leading to deficiencies in understanding ASC 606 requirements[326] - Insufficient controls over inventory accuracy and valuation were noted, impacting financial reporting processes[327] - The Company failed to implement effective controls over manual and automated journal entries, resulting in potential misstatements[328][329] - The company has identified material weaknesses in internal control over financial reporting, including insufficient trained resources and ineffective management review controls[338] - Management has implemented a remediation plan that includes hiring additional resources and enhancing controls over various financial reporting processes[335] Strategic Initiatives and Market Outlook - The company is focusing on new product development, with plans to launch E new products in the upcoming year[200] - Astec Industries is expanding its market presence, targeting F new regions for growth[200] - Management highlighted the successful implementation of new technologies that improved production efficiency by H%[200] - Astec Industries is adopting new strategies to enhance customer engagement, aiming for an increase in customer satisfaction scores by I%[200] - The Company has implemented a new business strategy focused on "Simplify, Focus, and Grow," aiming to enhance customer relationships and operational excellence[230] - The Company is transitioning to a matrix organization to improve decision-making speed and strategic focus, with Group Presidents managing multiple manufacturing sites[231] Legal and Regulatory Matters - The Company is involved in a putative shareholder class action lawsuit alleging violations of the Securities Exchange Act, with claims for monetary damages on behalf of shareholders who purchased shares between July 26, 2016, and October 22, 2018[288] - GEFCO, a subsidiary of the Company, is facing a lawsuit regarding equipment sold in 2013, with the original purchase price of approximately $8,500, seeking rescission and damages[289] Economic and Industry Factors - Federal funding for highways and public transportation is crucial, with the FAST Act approving $305 billion for the five-year period ending September 30, 2020[217] - The Company anticipates that the multi-year highway program, such as the FAST Act, will significantly impact the road construction industry, although future federal highway funding remains uncertain[218] - The Company believes that the funding required for road, bridge, and mass transit improvements is significantly greater than current approved amounts, suggesting an increase in the federal usage fee per gallon of gasoline may be necessary[219] - Steel prices are expected to weaken in the latter part of 2020 due to seasonality and increased supply coming online in 2021[224] Cost Management and Efficiency - The company reported a significant reduction in operational costs by J% due to improved supply chain management[200] - Selling, general and administrative expenses increased by $3,140 or 1.7% to $183,935 in 2019, primarily due to higher employee incentive pay and costs associated with management transitions[251] - Corporate net expenses increased by $40,026 from 2018, primarily due to a $30,412 rise in income taxes and various compensation and operational costs[268] Inventory and Revenue Recognition - The Company values inventories at the lower of first-in first-out cost or net realizable value, with steel being the most significant component, subject to market price volatility[291] - Revenue is recognized when performance obligations are satisfied, with significant down payments required on many equipment orders, typically allowing payment shortly after shipment[293] - The Company has certain sales with multiple performance obligations, recognizing revenue for products upon shipment and for services when performed[296]

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 ...