Astec Industries (ASTE) Q1 2025 Earnings Call April 29, 2025 08:30 AM ET Company Participants Stephen C. Anderson - Senior VP of Administration & Investor RelationsJaco van der Merwe - CEO, President & DirectorBrian Harris - Chief Financial Officer Conference Call Participants Steve Ferazani - Senior Equity Analyst - Diversified Industrials & EnergyMircea Dobre - Associate Director of Research & Senior Research Analyst Stephen C. Anderson Thank you. Good morning, everyone. Joining me on today's call are Jak ...

[Astec First Quarter 2025 Results and TerraSource Acquisition](index=1&type=section&id=Astec%20First%20Quarter%202025%20Results%20and%20TerraSource%20Acquisition) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Astec reported strong Q1 2025 results, with net sales increasing **6.5%** and net income surging **320.6%** Q1 2025 Key Financial Metrics (GAAP vs. Adjusted) | Metric (in millions, except per share) | 1Q 2025 (GAAP) | 1Q 2024 (GAAP) | % Change | 1Q 2025 (Adjusted) | 1Q 2024 (Adjusted) | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $329.4 | $309.2 | 6.5% | - | - | - | | **Income from Operations** | $20.5 | $6.3 | 225.4% | $28.3 | $12.0 | 135.8% | | **Net Income** | $14.3 | $3.4 | 320.6% | $20.3 | $7.8 | 160.3% | | **Diluted EPS** | $0.62 | $0.15 | 313.3% | $0.88 | $0.34 | 158.8% | | **EBITDA** | $27.5 | $13.4 | 105.2% | $35.2 | $18.9 | 86.2% | | **Backlog** | $402.6 | $559.8 | (28.1)% | - | - | - | - CEO Jaco van der Merwe attributed the strong quarter to operational execution, delivering increases in **net sales**, **EBITDA**, **net income**, and **EPS**[3](index=3&type=chunk) - The company reiterated its full-year adjusted EBITDA guidance range of **$105 million** to **$125 million**, excluding the pending TerraSource acquisition[3](index=3&type=chunk) [Acquisition of TerraSource Holdings, LLC](index=1&type=section&id=Acquisition%20of%20TerraSource%20Holdings%2C%20LLC) Astec will acquire TerraSource Holdings for **$245 million** in cash, expecting accretion, margin expansion, and **$10 million** in synergies - Astec will acquire TerraSource for **$245.0 million** in cash, financed through existing cash and new committed financing[9](index=9&type=chunk) - The transaction is expected to close in the early third quarter of 2025, subject to regulatory approvals[9](index=9&type=chunk) - Strategic benefits of the acquisition include: - Increases aftermarket revenue, with TerraSource's 2024 aftermarket sales comprising **~60%** of total revenue and **80%** of gross profit - Adds scale and expands global market presence - Expected to be accretive to gross profit margins, adjusted EBITDA margins, and EPS - Enables approximately **$10 million** in run-rate cost synergies, primarily from procurement savings[14](index=14&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) Infrastructure Solutions net sales grew **16.7%** while Materials Solutions declined **12.7%**, reflecting varied market demand Q1 2025 Segment Performance vs. Q1 2024 | Segment | Net Sales (Q1 2025, in millions) | % Change YoY | Segment Operating Adjusted EBITDA (Q1 2025, in millions) | % Change YoY | Segment Operating Adjusted EBITDA Margin (Q1 2025) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Infrastructure Solutions** | $236.0M | 16.7% | $42.9M | 67.6% | 18.2% | | **Materials Solutions** | $93.4M | (12.7)% | $5.2M | (1.9)% | 5.6% | [Infrastructure Solutions](index=2&type=section&id=Infrastructure%20Solutions) Infrastructure Solutions net sales increased **16.7%** to **$236 million**, with Adjusted EBITDA surging **67.6%** - Net sales increased **16.7%** to **$236.0 million** due to strong demand for asphalt and concrete plants, despite some softness in mobile paving and forestry[13](index=13&type=chunk) - Segment Operating Adjusted EBITDA increased **67.6%** to **$42.9 million**, and the margin improved by **550 basis points** to **18.2%**[13](index=13&type=chunk)[25](index=25&type=chunk) [Materials Solutions](index=2&type=section&id=Materials%20Solutions) Materials Solutions net sales decreased **12.7%** to **$93.4 million** due to domestic equipment sales declines, with stable EBITDA - Net sales decreased **12.7%** to **$93.4 million**, mainly due to lower domestic equipment sales linked to financing constraints for contractors and dealers[13](index=13&type=chunk) - Segment Operating Adjusted EBITDA decreased by **1.9%** to **$5.2 million**, while the margin improved by **60 basis points** to **5.6%**[13](index=13&type=chunk)[25](index=25&type=chunk) [Liquidity and Cash Flow](index=2&type=section&id=Liquidity%20and%20Cash%20Flow) Astec reported **$238.9 million** in liquidity, generating **$20.5 million** in operating cash flow and **$16.6 million** in free cash flow - Total liquidity stood at **$238.9 million**, comprising **$90.1 million** in cash and **$148.8 million** available under its revolving credit facility[13](index=13&type=chunk) Q1 2025 Cash Flow Summary (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Operating Cash Flow** | $20.5 | $(47.0) | | **Capital Expenditures** | $(3.9) | $(5.8) | | **Free Cash Flow** | $16.6 | $(52.8) | - The company paid a dividend of **$0.13 per share** during the quarter[13](index=13&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) Astec's Q1 2025 consolidated statements show net sales of **$329.4 million** and net income of **$14.3 million** [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net sales reached **$329.4 million**, with gross profit at **$92.4 million** and net income at **$14.3 million** Q1 2025 Statement of Operations (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net sales** | $329.4 | $309.2 | | **Gross profit** | $92.4 | $76.9 | | **Income from operations** | $20.5 | $6.3 | | **Net income attributable to controlling interest** | $14.3 | $3.4 | | **Diluted EPS** | $0.62 | $0.15 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$1,056 million**, with total equity at **$653.1 million** and cash at **$92.6 million** Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $737.2 | $722.8 | | **Total assets** | $1,056.0 | $1,043.6 | | **Total current liabilities** | $277.0 | $271.7 | | **Long-term debt** | $96.0 | $105.0 | | **Total equity** | $653.1 | $637.6 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating cash flow was **$20.5 million**, a significant improvement from a **$47 million** use in Q1 2024 Q1 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $20.5 | $(47.0) | | **Net cash used in investing activities** | $(4.2) | $(5.9) | | **Net cash (used in) provided by financing activities** | $(15.0) | $48.4 | | **Increase (decrease) in cash** | $1.8 | $(5.1) | | **Cash, end of period** | $92.6 | $58.1 | [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) Astec presents non-GAAP measures, including Adjusted Income from Operations of **$28.3 million** and Adjusted EBITDA of **$35.2 million** [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures exclude non-core operational costs like transformation program expenses, restructuring charges, and acquisition transaction costs - Non-GAAP measures exclude costs related to: - Transformation program (e.g., ERP implementation) - Restructuring and other related charges - Goodwill and asset impairments - Gains or losses on sale of property and equipment - Transaction costs for acquisitions[34](index=34&type=chunk) [Reconciliation of Adjusted Income from Operations](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Income%20from%20Operations) Adjusted income from operations for Q1 2025 was **$28.3 million**, primarily adjusted for transformation program and transaction costs GAAP to Non-GAAP Adjusted Income from Operations (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Income from operations (GAAP)** | $20.5 | $6.3 | | Transformation program | $7.0 | $6.5 | | Transaction costs | $0.8 | - | | Other adjustments | - | $(0.8) | | **Adjusted income from operations (Non-GAAP)** | $28.3 | $12.0 | | **Adjusted operating margin** | 8.6% | 3.9% | [Reconciliation of Adjusted EPS](index=11&type=section&id=Reconciliation%20of%20Adjusted%20EPS) Adjusted EPS for Q1 2025 was **$0.88**, derived from adjusted net income of **$20.3 million** after specific exclusions GAAP to Non-GAAP Adjusted EPS | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Diluted EPS (GAAP)** | $0.62 | $0.15 | | Transformation program adjustment | $0.31 | $0.29 | | Transaction costs adjustment | $0.03 | - | | Other adjustments | - | $(0.04) | | Income tax impact of adjustments | $(0.08) | $(0.06) | | **Adjusted EPS (Non-GAAP)** | $0.88 | $0.34 | [Reconciliation of EBITDA and Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 reached **$35.2 million**, reflecting a **10.7%** margin after non-core operational adjustments EBITDA and Adjusted EBITDA Reconciliation (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net income attributable to controlling interest** | $14.3 | $3.4 | | **EBITDA** | $27.5 | $13.4 | | EBITDA margin | 8.3% | 4.3% | | **Adjusted EBITDA** | $35.2 | $18.9 | | Adjusted EBITDA margin | 10.7% | 6.1% | [Reconciliation of Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) Free cash flow for Q1 2025 was **$16.6 million**, a significant improvement from a negative **$52.8 million** in Q1 2024 Free Cash Flow Reconciliation (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $20.5 | $(47.0) | | **Expenditures for property and equipment** | $(3.9) | $(5.8) | | **Free cash flow** | $16.6 | $(52.8) |

Core Insights - Astec Industries, Inc. reported strong financial results for Q1 2025, with increases in net sales, EBITDA, net income, and earnings per share, alongside the announcement of a definitive agreement to acquire TerraSource Holdings, LLC for $245 million [2][4][6]. Financial Performance - Net sales reached $329.4 million, a 6.5% increase from $309.2 million in Q1 2024 [4][29]. - EBITDA was $27.5 million, up 105.2% from $13.4 million in the previous year, with an adjusted EBITDA of $35.2 million, reflecting an 86.2% increase [4][30]. - Net income attributable to controlling interest was $14.3 million, a 320.6% increase compared to $3.4 million in Q1 2024, with adjusted net income of $20.3 million, up 160.3% [4][27]. - Diluted EPS increased to $0.62 from $0.15, representing a 313.3% rise, while adjusted EPS was $0.88, up 158.8% [4][27]. Segment Performance - Infrastructure Solutions segment net sales were $236.0 million, a 16.7% increase from $202.2 million, with an operating adjusted EBITDA of $42.9 million, up 67.6% [8][17]. - Materials Solutions segment net sales decreased by 12.7% to $93.4 million, primarily due to lower domestic equipment sales, with an operating adjusted EBITDA of $5.2 million, a slight decrease of 1.9% [8][17]. Acquisition Details - The acquisition of TerraSource is expected to enhance Astec's scale, improve aftermarket parts mix, and expand margins, with anticipated annual run-rate synergies of approximately $10 million [6][9]. - The transaction is expected to close in early Q3 2025, subject to regulatory approvals [6][9]. Liquidity and Cash Flow - Total liquidity was reported at $238.9 million, including $90.1 million in cash and cash equivalents [8]. - Operating cash flow for the quarter was $20.5 million, with free cash flow of $16.6 million [8][32].

Core Viewpoint - Astec Industries, Inc. is set to release its first quarter 2025 financial results on April 29, 2025, and will host a conference call to discuss these results [1][2]. Group 1: Conference Call Details - The conference call will be hosted by Jaco van der Merwe (President and CEO), Brian Harris (CFO), and Steve Anderson (Senior VP of Administration and Investor Relations) [2]. - The call is scheduled for April 29, 2025, at 8:30 a.m. Eastern Time, with access available via phone or a live webcast [1][2]. - A replay of the call will be available until May 13, 2025, and a transcript will be posted on the Investor Relations section of the company's website within 5 business days after the call [3]. Group 2: Company Overview - Astec Industries, Inc. specializes in manufacturing equipment for asphalt road building, aggregate processing, and concrete production [4]. - The company operates in two primary business segments: Infrastructure Solutions and Materials Solutions [4].

Core Viewpoint - Astec Industries, Inc. is set to release its first quarter 2025 financial results on April 29, 2025, and will host a conference call to discuss these results [1][2]. Group 1: Conference Call Details - The conference call will be hosted by Jaco van der Merwe (President and CEO), Brian Harris (CFO), and Steve Anderson (Senior VP of Administration and Investor Relations) [2]. - Participants can access the call by dialing (888) 440-4118 or +1 (646) 960-0833 for international callers, at least 10 minutes prior to the scheduled time [2]. - A live webcast will also be available, and an archived version will be accessible for ninety days post-call [2][3]. Group 2: Company Overview - Astec Industries, Inc. specializes in manufacturing equipment for asphalt road building, aggregate processing, and concrete production [4]. - The company operates in two primary business segments: Infrastructure Solutions and Materials Solutions [4].

Group 1 - Astec Industries, Inc. will participate in the Sidoti Small Cap Virtual Conference on March 19, 2025, with key executives presenting and engaging in one-on-one meetings [1] - The presentation by Astec will occur from 1:45 P.M. to 2:15 P.M. Eastern time, and interested parties can access it via a provided link [1] - The company specializes in manufacturing equipment for asphalt road building, aggregate processing, and concrete production, divided into two main business segments: Infrastructure Solutions and Materials Solutions [2] Group 2 - Infrastructure Solutions includes road building, asphalt and concrete plants, as well as thermal and storage solutions, while Materials Solutions encompasses aggregate processing and mining equipment [2] - Astec also offers controls and automation products aimed at enhancing productivity through improved equipment performance [2]

Financial Performance - Net sales for 2024 were $1,305.1 million, a decrease of 2.5% compared to $1,338.2 million in 2023[266]. - Gross profit for 2024 was $327.9 million, slightly down from $330.8 million in 2023, resulting in a gross margin of 25.1%[266]. - Net income for 2024 was $4.1 million, a significant decline from $33.7 million in 2023, reflecting a net margin of 0.3%[266]. - The company reported a goodwill impairment of $20.2 million in 2024, compared to no impairment in 2023[266]. - Cash flows from operating activities generated $23.0 million in 2024, down from $27.8 million in 2023[272]. - The company reported a comprehensive loss of $13.3 million for the year ended December 31, 2024, compared to a comprehensive income of $2.1 million in 2023[277]. - Income before income taxes decreased significantly from $42.8 million in 2023 to $13.9 million in 2024, a decline of 67.6%[396]. - The total income tax provision for 2024 was $9.8 million, compared to $9.1 million in 2023, representing a 7.7% increase[396]. Assets and Liabilities - Total current assets increased to $722.8 million in 2024 from $719.5 million in 2023, primarily driven by an increase in cash and cash equivalents[264]. - Total liabilities remained relatively stable at $406.0 million in 2024, compared to $405.6 million in 2023[264]. - As of December 31, 2024, the total equity of the company is $637.6 million, an increase from $626.9 million in 2023[277]. - The total cash and cash equivalents, including restricted cash, amounted to $541.7 million as of December 31, 2024[289]. - The company had total borrowings outstanding of $105.0 million under its credit facilities as of December 31, 2024, up from $72.0 million in 2023[385]. Inventory and Cost Management - The company’s inventory is significantly composed of steel, which is subject to market price volatility, impacting overall financial performance[241]. - As of December 31, 2024, total inventories decreased to $422.7 million from $455.6 million in 2023, with raw materials and parts at $275.4 million[357]. - The company reviews individual items in its inventory to determine if any item's net realizable value is below its carrying value[303]. - The company accrues for estimated product warranty costs at the time revenue is recognized, based on historical claims experience[320]. Foreign Operations and Currency Risk - Foreign operations represented 26.9% of total assets and 13.5% of total net sales for the year ended December 31, 2024, indicating significant exposure to foreign exchange risk[238]. - A 10% fluctuation in foreign exchange rates would have impacted net sales by $17.7 million and net income by $2.0 million for the year ended December 31, 2024[240]. - The company evaluates the need to hedge foreign currency transactions, but does not apply hedge accounting, impacting earnings recognition[239]. - The company’s foreign subsidiaries' operations are subject to currency fluctuations, which can affect the valuation of net assets in U.S. dollars[238]. Shareholder and Legal Matters - The company settled a shareholder class action lawsuit for $13.7 million, fully funded by insurance carriers, with the case dismissed on September 10, 2024[411]. - The company reached a settlement of $8.4 million related to a lawsuit involving its GEFCO subsidiary, paid in the fourth quarter of 2024[412]. - The company recorded a loss of $1.9 million related to the settlement of a lawsuit involving its Telsmith subsidiary, which was resolved for $6.3 million in September 2024[413]. Research and Development - Research and development costs amounted to $23.8 million, $22.0 million, and $31.5 million for the years 2024, 2023, and 2022, respectively[339]. Segment Information - The company operates in two reportable segments: Infrastructure Solutions and Materials Solutions, focusing on equipment for road building and related construction activities[282]. - The Infrastructure Solutions segment focuses on manufacturing and servicing asphalt and concrete plants, catering to a diverse range of customers including governmental agencies[433]. Tax and Deferred Tax Assets - The total deferred tax assets increased from $54.7 million in 2023 to $64.6 million in 2024, primarily due to an increase in amortization of research and experimental expenditures[398]. - The valuation allowance for deferred tax assets decreased by $0.1 million in 2024, driven by the release of the valuation allowance on deferred tax assets related to NOLs generated by the Company's Chilean subsidiary[399]. - The Company had unrecognized tax benefits of $16.8 million as of December 31, 2024, an increase from $13.0 million in 2023, reflecting a rise of 29%[403]. Goodwill and Intangible Assets - The Company’s goodwill balance as of December 31, 2024, was $79.0 million, down from $80.3 million in 2023, reflecting the impairment charge[370]. - The total intangible assets amounted to $66.5 million, with a net carrying value of $11.2 million after accumulated amortization[371]. - The amortization expense on intangible assets for 2024 was $4.8 million, compared to $5.5 million in 2023 and $8.5 million in 2022[371]. Compensation and Employee Benefits - The Company’s share-based compensation expense was $5.0 million in 2024, up from $4.1 million in 2023[277]. - The Company’s contributions to the 401(k) plan increased to $10.1 million in 2024, up from $8.1 million in 2023 and $7.7 million in 2022, reflecting a growth of 24.8% year-over-year[395].

Financial Data and Key Metrics Changes - The company reported record quarterly net sales, adjusted net income, and adjusted EBITDA for Q4 2024, with adjusted EBITDA of $47.9 million, a 47% increase year-over-year [8][13][26] - Full year net sales were relatively flat at $1.3 billion, with adjusted EBITDA for the year at $111.8 million, a 1.6% increase [11][13][27] - Adjusted EBITDA margin increased by 360 basis points to 13.3% in Q4, while full year adjusted EBITDA margins increased by 40 basis points to 8.6% [13][27] Business Line Data and Key Metrics Changes - The Infrastructure Solutions segment saw strong net sales driven by capital equipment and aftermarket parts, with a 4.6% increase in net sales for the year [28] - The Material Solutions segment faced challenges with lower capital equipment sales due to high interest rates and dealer destocking, although aftermarket parts sales remained stable [9][30] - Adjusted EBITDA margins for the Infrastructure Solutions segment reached a record 21.3% in Q4, while the Material Solutions segment's performance was negatively impacted by lower sales volumes [28][30] Market Data and Key Metrics Changes - Domestic funding for infrastructure projects remains strong, with states committing over $180 billion in highway and bridge formula funds for new projects [20] - The total value of state and local government highway and bridge contract awards increased to nearly $121 billion in 2024, up from $114.6 billion in 2023 [20] - The company sees international markets as opportunities for growth, with strong brand recognition but modest market share [22][23] Company Strategy and Development Direction - The company is focused on operational excellence, procurement efforts, and exploring inorganic growth opportunities as part of its capital allocation priorities [14][33] - New product launches and advanced digital integrations are planned for 2025, with a strong emphasis on customer engagement and satisfaction [18][36] - The company aims to leverage its strong balance sheet to fund growth and capitalize on multiyear federal and state funding for infrastructure [38] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding customer expectations for 2025, with expectations of second-half tailwinds [36] - Concerns over interest rate reductions persist, but there are positive signs of inventory reductions and order intake in early 2025 [37][50] - The company anticipates adjusted EBITDA in the range of $105 million to $125 million for 2025, with a seasonal distribution of earnings expected [33] Other Important Information - The company generated positive free cash flow of $32.1 million in Q4 due to profitable sales and effective working capital management [32] - Approximately 80% of net sales are domestic, with less than 15% of purchases sourced from China, mitigating some tariff risks [15] Q&A Session Summary Question: Progress on manufacturing inefficiencies - Management noted steady improvement in manufacturing efficiencies, with Q4 showing one of the lowest inefficiencies in recent times [44][46] Question: Normalized backlog levels for Infrastructure Solutions - Management indicated strong order intake for asphalt and concrete plant equipment, expressing confidence in the Infrastructure Solutions segment [51][52] Question: Importance of bonus depreciation for orders and backlog - Management acknowledged that reinstating bonus depreciation would significantly benefit smaller customers and potentially improve order and backlog levels [56] Question: Impact of interest rates on the mobile market - Management highlighted that while elevated interest rates have posed challenges, there are signs that customers are adapting and beginning to replace aging equipment [59][60]

Fourth Quarter and Full Year Earnings February 26, 2025 B U I L T T O C O N N E C T Safe Harbor Certain statements contained in this presentation contain forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the ...

Financial Performance - Record net sales of $359.0 million, an increase of 6.5% compared to $337.2 million in Q4 2023[4] - Strong net income of $21.1 million, up 41.6% from $14.9 million in Q4 2023; adjusted net income of $27.2 million, a 32.0% increase[4] - EBITDA of $40.0 million, a 57.5% increase from $25.4 million in Q4 2023; record adjusted EBITDA of $47.9 million, up 46.9%[4] - Diluted EPS of $0.92, a 41.5% increase from $0.65 in Q4 2023; record adjusted EPS of $1.19, up 32.2%[4] - Gross profit for Q4 2024 was $102.9 million, compared to $89.1 million in Q4 2023, reflecting a significant improvement in profitability[22] - Income from operations for Q4 2024 was $34.8 million, compared to $18.9 million in Q4 2023, with adjusted income from operations rising to $42.8 million from $26.3 million[43] - Adjusted operating margin improved to 11.9% in Q4 2024 from 7.8% in Q4 2023, reflecting operational efficiency gains[43] Segment Performance - Infrastructure Solutions segment net sales of $248.8 million increased by 11.9% due to strong demand for asphalt and concrete plants[13] - Materials Solutions segment net sales of $110.2 million decreased by 4.1% primarily due to lower domestic equipment sales[13] - Infrastructure Solutions segment net sales increased by 11.9% to $248.8 million, while Materials Solutions segment sales decreased by 4.1% to $110.2 million[26] - The Infrastructure Solutions segment's operating adjusted EBITDA margin improved to 14.5% in 2024 from 12.8% in 2023[30] Cash Flow and Liquidity - Operating cash flow of $36.6 million and free cash flow of $32.1 million in Q4 2024[4] - Total liquidity of $228.1 million, consisting of $88.3 million in cash and cash equivalents and $139.8 million available for additional borrowings[13] - Cash, cash equivalents, and restricted cash increased to $90.8 million as of December 31, 2024, compared to $63.2 million at the end of 2023[32] - The company reported a net cash provided by operating activities of $23.0 million for the year ended December 31, 2024, down from $27.8 million in 2023[36] - Free cash flow for Q4 2024 was $32.1 million, down from $37.5 million in Q4 2023, while net cash provided by operating activities decreased to $36.6 million from $46.6 million[52] Debt and Backlog - Long-term debt rose to $105.0 million in 2024 from $72.0 million in 2023, indicating increased leverage[32] - Backlog decreased by 26.4% to $419.6 million compared to $569.8 million in Q4 2023[4] Future Outlook - For full year 2025, the company expects adjusted EBITDA in the range of $105 million to $125 million[4] Transformation and Restructuring - Transformation program costs for 2024 totaled $33.5 million, up from $29.7 million in 2023, indicating ongoing investment in strategic initiatives[43] - The company is focused on restructuring efforts, with related charges of $9.5 million in 2024, compared to $7.7 million in 2023, aimed at simplifying operations[43] - Goodwill impairment charges of $20.2 million were recorded in 2024, reflecting challenges in the Materials Solutions reporting unit[43] Yearly Performance - For the year ended December 31, 2024, net sales were $1,305.1 million, a decline of 2.5% from $1,338.2 million in 2023[30] - Net sales for Q4 2024 were $359.0 million, an increase from $337.2 million in Q4 2023, while total net sales for the year decreased to $1,305.1 million from $1,338.2 million[43] - Total operating expenses decreased to $68.1 million in Q4 2024 from $70.2 million in Q4 2023, contributing to improved operating income[22]