Core Points - Astec Industries, Inc. will hold a conference call to discuss its fourth quarter and full year 2024 financial results on February 26, 2025 [1] - The call will be hosted by key executives including the President and CEO, CFO, and Senior VP of Administration and Investor Relations [2] - A replay of the call will be available until March 12, 2025, and a transcript will be provided within 5 business days after the call [3] Company Overview - Astec is a manufacturer specializing in equipment for asphalt road building, aggregate processing, and concrete production [4] - The company's operations are divided into two main segments: Infrastructure Solutions and Materials Solutions [4]

Financial Performance - Net sales for Q3 2024 were $291.4 million, a decrease of 3.9% compared to $303.1 million in Q3 2023[94]. - Gross profit for Q3 2024 was $66.8 million, representing 22.9% of net sales, down from $69.6 million or 23.0% in Q3 2023, a decrease of 4.0%[113]. - Loss from operations for Q3 2024 was $7.2 million, an increase of 38.5% compared to the prior year[94]. - Domestic sales for Q3 2024 were $211.2 million, or 72.5% of consolidated net sales, down 8.0% from $229.6 million in Q3 2023[109]. - International sales for Q3 2024 increased to $80.2 million, or 27.5% of consolidated net sales, up 9.1% from $73.5 million in Q3 2023[111]. Backlog and Orders - Backlog as of Q3 2024 was $475.9 million, a decrease of 22.6% from the previous year[94]. - The backlog of orders decreased by $138.9 million, or 22.6%, to $475.8 million as of September 30, 2024, compared to $614.7 million as of September 30, 2023[122]. Expenses - Selling, general and administrative expenses decreased by $8.7 million, or 11.7%, to $65.6 million in Q3 2024[115]. - Selling, general and administrative expenses increased by $1.4 million, or 0.7%, to $208.1 million for the first nine months of 2024, compared to $206.7 million for the same period in 2023[116]. - The total restructuring-related charges for the three months ended September 30, 2024, were $8.4 million, compared to $0.5 million for the same period in 2023[118]. Segment Performance - Infrastructure Solutions segment sales increased by $1.8 million, or 1.1%, to $165.0 million for the third quarter of 2024, while Materials Solutions segment sales decreased by $13.5 million, or 9.6%, to $126.4 million[124][128]. - Segment Operating Adjusted EBITDA for Infrastructure Solutions was $15.6 million for the third quarter of 2024, an increase of $2.3 million, or 17.3%, compared to the same period in 2023[138][139]. - Materials Solutions segment Operating Adjusted EBITDA was $14.5 million for Q3 2024, up $5.0 million or 52.6% from $9.5 million in Q3 2023, primarily due to litigation-related adjustments and favorable inventory changes[140]. - For the first nine months of 2024, Infrastructure Solutions segment Operating Adjusted EBITDA was $68.4 million, an increase of $0.9 million or 1.3% from $67.5 million in the same period of 2023, driven by favorable pricing and reduced costs[142]. - Materials Solutions segment Operating Adjusted EBITDA decreased to $30.0 million for the first nine months of 2024, down $12.4 million or 29.2% from $42.4 million in 2023, mainly due to manufacturing inefficiencies and unfavorable sales volume[143]. Cash Flow and Liquidity - Net cash used in operating activities for the nine months ended September 30, 2024, was $(13.6) million, an improvement of $5.2 million compared to $(18.8) million in the same period of 2023[154]. - Net cash used in investing activities was $14.0 million for the nine months ended September 30, 2024, compared to $3.9 million in the same period of 2023, primarily due to the absence of prior year asset sales[156]. - Total liquidity as of September 30, 2024, was $195.1 million, consisting of $52.7 million in cash and cash equivalents and $142.4 million available for additional borrowings[146]. - As of September 30, 2024, the company had $99.0 million in outstanding borrowings under its Credit Facilities, with $142.4 million available for future borrowings[149]. Impairments and Charges - A goodwill impairment charge of $20.2 million was recognized for the Materials Solutions reporting unit due to macroeconomic conditions[98]. - A pretax non-cash goodwill impairment charge of $20.2 million was recognized for the Materials Solutions reporting unit during the second quarter of 2024[117]. Market Outlook - The company expects total implementation costs for the ERP system to range from $180 to $200 million, with $127 million incurred to date[95]. - The company anticipates that steel prices will remain stable and oil prices will remain high throughout 2024 and into 2025[102][103]. Taxation - The effective income tax rate for the third quarter of 2024 was 27.1%, compared to 8.5% for the third quarter of 2023, driven by higher pretax book loss[120]. Dividends - The company paid quarterly dividends of $0.13 per common share in both Q3 2024 and Q3 2023[158].

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2024 were $291.4 million, a decrease of 3.9% year-over-year due to reductions in equipment and parts sales [9][28] - Adjusted EBITDA increased by 74%, with an adjusted EBITDA margin improvement of 270 basis points [29] - Adjusted earnings per share was $0.31 compared to a loss of $0.01 in the prior year [30] Business Line Data and Key Metrics Changes - Infrastructure Solutions segment net sales increased by 1.1% to $165 million, driven by an $8.4 million increase in equipment sales [31] - Material Solutions segment net sales decreased by 9.6% to $126.4 million, primarily due to lower domestic equipment sales [32] - Segment operating adjusted EBITDA for Infrastructure Solutions increased by 17.3% to $15.6 million, while Material Solutions saw a 52.6% increase to $14.5 million [31][32] Market Data and Key Metrics Changes - Domestic sales accounted for approximately 72% of consolidated net sales, with a year-over-year decrease of 8%, while international sales increased by 9.1% [29] - The backlog at the end of the quarter was $476 million, with Infrastructure Solutions showing stability and Material Solutions experiencing moderating trends [12][19] Company Strategy and Development Direction - The company is focused on three core pillars: empowering employees, customer focus, and industry-changing innovations [13] - The strategic roadmap aims to enhance operational efficiency and drive sustainable growth [38] - The company is exploring inorganic growth opportunities that align with its financial criteria [40] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging market environment but emphasized strong demand for asphalt and concrete plant deliveries [36] - There is cautious optimism for future orders based on strong quoting activity and customer feedback [49][57] - The company expects full-year sales to be broadly flat compared to the prior year, with gross margin anticipated at the lower end of the previously provided range [41] Other Important Information - The company generated $19.9 million of free cash flow in the quarter and ended with total available liquidity of $195.1 million [34] - The company is committed to sustainability and has introduced innovative products that minimize environmental impact [22][24] Q&A Session Summary Question: What attracted you to the opportunity at Astec? - The new CFO highlighted the strong foundation built by the management team and the potential for value creation through growth drivers [45] Question: Was there a favorable impact to EBITDA from a legal settlement in this third quarter? - Management clarified that there was a $2 million release related to a legal case, contrasting with a $6.4 million charge in the prior year [46] Question: How much has dealer destocking been impacting sales and orders? - Management noted a 4% to 5% reduction in dealer inventory and expressed optimism based on positive dealer feedback [47][48] Question: Do you expect the positive quoting activity to translate to orders in the fourth quarter? - Management indicated historical trends suggest a positive conversion of rental agreements in Q4, with a focus on larger systems [49] Question: Can you talk about ongoing manufacturing efficiencies? - Management expressed satisfaction with cross-site production efforts and emphasized the need to balance cost reductions with expected output [51] Question: What is the outlook for cash flow generation in Q4? - Management expects positive cash flow in Q4, despite some additional cash outflows related to legal settlements [54] Question: Will CapEx remain at maintenance levels next year? - Management indicated that CapEx will likely remain strong, with ongoing investments in operations and potential manufacturing capacity in India [56]

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Financial Performance - Net sales for Q3 2024 were $291.4 million, a decrease of 3.9% compared to Q3 2023[1]. - The net loss was $6.2 million, which included an $8.4 million charge related to a legacy litigation settlement; adjusted net income was $7.0 million[1][2]. - Adjusted EBITDA increased by 74.0% to $17.4 million, while EBITDA declined to $0.6 million, a decrease of 66.7%[1][3]. - The company reported a loss from operations of $7.2 million for Q3 2024, compared to a loss of $5.2 million in Q3 2023[28]. - Adjusted income from operations for Q3 2024 was $9.9 million, up from $3.1 million in Q3 2023, resulting in an adjusted operating margin of 3.4%[28]. - The net loss attributable to controlling interest for Q3 2024 was $6.2 million, slightly improved from a loss of $6.6 million in Q3 2023[29]. - The company reported an adjusted EPS of $0.31 for Q3 2024, compared to a loss of $0.01 in Q3 2023[29]. - EBITDA margin for Q3 2024 was 0.2%, down from 0.6% in Q3 2023[30]. Sales Performance - Domestic sales decreased by 8.0% to $211.2 million, while international sales increased by 9.1% to $80.2 million[3]. - Infrastructure Solutions segment net sales increased slightly to $165.0 million, with operating adjusted EBITDA rising 17.3% to $15.6 million[6]. - Materials Solutions segment net sales decreased by 9.6% to $126.4 million, but operating adjusted EBITDA increased by 52.6% to $14.5 million[7]. - Infrastructure Solutions revenue increased to $165.0 million, up 1.1% from $163.2 million in 2023[18]. - Materials Solutions revenue decreased to $126.4 million, down 9.6% from $139.9 million in 2023[18]. - Net sales totaled $291.4 million, a decline of 3.9% compared to $303.1 million in 2023[18]. Cash Flow and Liquidity - Total liquidity was $195.1 million, consisting of $52.7 million in cash and $142.4 million available for additional borrowings[8]. - Free cash flow for the quarter was $19.9 million after capital expenditures of $2.6 million[8]. - Free cash flow for Q3 2024 was $19.9 million, a significant improvement from a negative $24.2 million in Q3 2023[31]. - Net cash used in operating activities was $(13.6) million for the nine months ended September 30, 2024, compared to $(18.8) million in 2023[21]. - Cash, cash equivalents, and restricted cash decreased to $55.3 million from $63.2 million at the end of 2023[20]. Backlog and Assets - The backlog decreased by 22.6% to $475.8 million, with domestic backlog down 26.0% to $377.6 million[3][6]. - Total assets as of September 30, 2024, were $1,067.1 million, compared to $1,059.3 million at the end of 2023[20]. - Current liabilities remained stable at $299.2 million, slightly up from $299.0 million in 2023[20]. Charges and Impairments - The company incurred restructuring and related charges of $8.4 million in Q3 2024, compared to only $0.1 million in Q3 2023[28]. - Goodwill impairment charges of $20.2 million were recorded in the nine months ended September 30, 2024, with no charges in the same period of 2023[29]. - The transformation program costs are included in "Cost of sales" and "Selling, general and administrative expenses" and are part of ongoing strategic initiatives[23].

Core Insights - Astec Industries, Inc. reported a net sales decrease of 3.9% to $291.4 million in Q3 2024 compared to Q3 2023, with a net loss of $6.2 million, which included an $8.4 million charge related to a litigation settlement [1][2][3] - Adjusted net income for the quarter was $7.0 million, with adjusted EBITDA increasing by 74.0% to $17.4 million [1][3][32] - The company experienced mixed results across its segments, with Infrastructure Solutions showing sales and margin growth, while Materials Solutions faced challenging market conditions [2][6][7] Financial Performance - Net sales: $291.4 million in Q3 2024 vs. $303.1 million in Q3 2023, a decrease of 3.9% [1][17] - Domestic sales decreased by 8.0% to $211.2 million, while international sales increased by 9.1% to $80.2 million [3][17] - Backlog decreased by 22.6% to $475.8 million, with domestic backlog down 26.0% and international backlog down 5.7% [3][17] Segment Results - Infrastructure Solutions segment net sales increased slightly to $165.0 million, with an operating adjusted EBITDA of $15.6 million, up 17.3% [6][17] - Materials Solutions segment net sales decreased by 9.6% to $126.4 million, but operating adjusted EBITDA increased by 52.6% to $14.5 million [7][17] Cash Flow and Liquidity - Operating cash flow for the quarter was $22.5 million, with free cash flow of $19.9 million after capital expenditures of $2.6 million [1][8] - Total liquidity stood at $195.1 million, comprising $52.7 million in cash and cash equivalents and $142.4 million available for additional borrowings [8][20] Balance Sheet Highlights - Total assets increased to $1,067.1 million as of September 30, 2024, compared to $1,059.3 million at the end of 2023 [20] - Total equity decreased to $631.4 million from $653.7 million [20] Strategic Focus - The company is concentrating on commercial and operational excellence, aiming to drive sustainable value creation for shareholders [2][3] - Ongoing transformation initiatives include a phased implementation of a standardized enterprise resource planning system and lean manufacturing efforts [24][25]

Group 1 - The article discusses the perspective of a value-oriented analyst focused on the oil and gas sector, emphasizing the importance of analyzing cash flows and assessing company value [1] - The analyst employs Benjamin Graham's investment philosophy combined with a contrarian approach to identify businesses trading at significant discounts to their intrinsic value [1] Group 2 - The analyst runs a newsletter called Crude Value Insights, which aims to provide insights into the valuation of companies within the oil and gas industry [1]

Core Viewpoint - Astec Industries, Inc. is set to release its third quarter 2024 financial results on November 6, 2024, followed by a conference call to discuss the results [1]. Group 1: Financial Results Announcement - The third quarter results will be released to the wire service at approximately 7:00 a.m. Eastern Time on November 6, 2024 [1]. - A live conference call will take place at 8:30 a.m. Eastern Time on the same day, hosted by key executives including the President and CEO, CFO, and other senior management [1]. Group 2: Access Information - Participants can access the call by dialing (888) 440-4118 or (646) 960-0833 for international callers, at least 10 minutes prior to the scheduled time [1]. - A live webcast of the call will also be available through a provided link, with an archived version accessible for ninety days post-call [1]. Group 3: Company Overview - Astec is a manufacturer specializing in equipment for asphalt road building, aggregate processing, and concrete production, divided into two main business segments: Infrastructure Solutions and Materials Solutions [3].

Group 1 - Astec Industries, Inc. will present at the Sidoti Small-Cap Virtual Investor Conference on September 19, 2024, at 10:00 a.m. EDT, with key executives participating in one-on-one meetings with investors [1] - The conference aims to provide a platform for small and microcap companies to engage with investors, highlighting Astec's focus on investor relations [1][2] - Registration for the conference and one-on-one meetings is free and open to all interested participants, not limited to Sidoti clients [1] Group 2 - Astec Industries specializes in manufacturing equipment for asphalt road building, aggregate processing, and concrete production, operating through two main segments: Infrastructure Solutions and Materials Solutions [3] - The Infrastructure Solutions segment includes products related to road building, asphalt and concrete plants, as well as thermal and storage solutions [3] - The Materials Solutions segment focuses on aggregate processing equipment, indicating a comprehensive approach to construction and infrastructure needs [3]

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, 2024 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 ...