Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $33.7 million, an increase of $6.1 million or 22.1% compared to 2024 [7][27] - Adjusted EBITDA margin improved to 10.2%, up 220 basis points year-over-year [7][28] - Adjusted earnings per share reached $0.88, a 44.3% increase from $0.61 in Q2 2024 [7][29] - Backlog decreased sequentially by 5.4% to $380.8 million [7][8] Business Line Data and Key Metrics Changes - In the Infrastructure Solutions segment, equipment sales were lower due to weak demand for forestry and mobile paving equipment, while aftermarket parts sales increased by 9.4% [27][30] - Material Solutions segment saw equipment sales increase by 4.9%, but aftermarket parts sales declined by 5.9% [30] - Adjusted EBITDA for the Material Solutions segment increased by 39.2% to $14.2 million, with adjusted EBITDA margin rising to 11.3% [30][31] Market Data and Key Metrics Changes - Approximately 80% of revenues are generated in the United States, with a favorable market outlook due to federal highway funding [17][21] - Total value of state and local government transportation contract awards increased by 9% to $47.8 billion through April 2025 [18] - The current surface transportation law is set to expire on October 1, 2026, with optimism for a new bill [19][20] Company Strategy and Development Direction - The completion of the TerraSource acquisition is expected to drive future growth, with aftermarket part sales representing approximately 63% of total revenue [11][12] - Focus on operational excellence and efficiency improvements to enhance margins and profitability [34] - Emphasis on growing the recurring aftermarket parts business and exploring inorganic growth opportunities [34] Management's Comments on Operating Environment and Future Outlook - Management noted a mix of external tailwinds and headwinds, including high interest rates and a changing tariff environment [14][16] - Customer sentiment remains cautiously optimistic, with large backlogs of work reported [14][34] - The company expects continued progress in the Material Solutions segment in the second half of the year [9][24] Other Important Information - The company maintains a strong balance sheet with cash and cash equivalents of $87.8 million and total available liquidity of $247.6 million [32] - Free cash flow for the quarter was $9 million, representing 53.9% of net income [32] Q&A Session Summary Question: Year-over-year margin improvement details - Management highlighted that margin expansion was driven by procurement efforts and operational excellence initiatives [40] Question: EPS drag from tariffs - Management indicated that they successfully mitigated tariff effects during the quarter and did not provide a specific number [42] Question: Market differences between asphalt/concrete plants and mobile paving equipment - Management explained that mobile paving equipment is facing inventory challenges similar to previous issues in the Material Solutions business, while asphalt plant demand remains strong [43] Question: Concerns about infrastructure spending bill winding down - Management reassured that customer optimism remains, with strong backlog and order visibility for Q3 [44][46] Question: Impressive cash flow management - Management noted effective working capital management and opportunities for further improvement in inventory levels [49][51]

Financial Performance - Net sales for Q2 2025 were $330.3 million [8], a decrease of 4.4% compared to $345.5 million in Q2 2024 [44] - Adjusted EBITDA for Q2 2025 was $33.7 million [8], an increase of 22.1% compared to $27.6 million in Q2 2024 [44] - Adjusted EBITDA margin for Q2 2025 was 10.2% [8], an increase of 220 bps compared to 8.0% in Q2 2024 [44] - Adjusted EPS for Q2 2025 was $0.88 [8], an increase of 44.3% compared to $0.61 in Q2 2024 [44] - Free cash flow was $9.0 million in Q2 2025 [8], representing 53.9% of net income [8] Segment Performance - Infrastructure Solutions net sales for Q2 2025 were $204.6 million [47], a decrease of 7.6% compared to $221.4 million in Q2 2024 [47] - Infrastructure Solutions segment operating adjusted EBITDA margin for Q2 2025 was 15.7% [47], an increase of 340 bps compared to 12.3% in Q2 2024 [47] - Materials Solutions net sales for Q2 2025 were $125.7 million [50], an increase of 1.3% compared to $124.1 million in Q2 2024 [50] - Materials Solutions segment operating adjusted EBITDA margin for Q2 2025 was 11.3% [50], an increase of 310 bps compared to 8.2% in Q2 2024 [50] Backlog and Orders - The backlog level is $380.8 million [8]

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Astec reported strong Q2 2025 results, driven by operational efficiencies and the TerraSource acquisition, leading to updated full-year guidance [Second Quarter 2025 Overview](index=1&type=section&id=Second%20Quarter%202025%20Overview) Astec reported strong Q2 2025 results with increased net income, EBITDA, and EPS, bolstered by the TerraSource acquisition and updated full-year guidance - Astec reported a strong quarter with increased **net income**, **EBITDA**, and **EPS**, driven by operational and procurement efficiencies[4](index=4&type=chunk) - Completed the acquisition of **TerraSource** on July 1, 2025, an adjacent manufacturer with annual revenues exceeding **$150 million**, over **60%** from aftermarket parts and services[4](index=4&type=chunk) Key Financial Highlights (Q2 2025 vs Q2 2024) | Metric | 2Q 2025 (GAAP) | 2Q 2024 (GAAP) | Change (%) | 2Q 2025 (Adjusted) | 2Q 2024 (Adjusted) | Change (%) | | :----------------------------------- | :------------- | :------------- | :--------- | :----------------- | :----------------- | :--------- | | Net sales (in millions) | $330.3 | $345.5 | (4.4)% | | | | | Income (loss) from operations (in millions) | $21.4 | $(10.7) | 300.0% | $26.1 | $21.4 | 22.0% | | Operating margin | 6.5% | (3.1)% | 960 bps | 7.9% | 6.2% | 170 bps | | Net income (loss) attributable to controlling interest (in millions) | $16.7 | $(14.0) | 219.3% | $20.3 | $14.0 | 45.0% | | Diluted EPS | $0.72 | $(0.61) | 218.0% | $0.88 | $0.61 | 44.3% | | EBITDA (in millions) | $29.0 | $(4.4) | 759.1% | $33.7 | $27.6 | 22.1% | | EBITDA margin | 8.8% | (1.3)% | 1,010 bps | 10.2% | 8.0% | 220 bps | Full Year Adjusted EBITDA Guidance Update | Category | Previous Guidance (in millions) | Updated Guidance (in millions) | | :--------- | :------------------------------ | :----------------------------- | | Core Business | $105 - $125 | $110 - $125 | | TerraSource Contribution | N/A | $13 - $17 | | Consolidated | N/A | $123 - $142 | [Company Information](index=2&type=section&id=Company%20Information) Astec Industries manufactures specialized equipment for infrastructure and materials processing, structured into two primary business segments [About Astec](index=2&type=section&id=About%20Astec) Astec Industries manufactures specialized equipment for asphalt road building, aggregate processing, and concrete production, organized into two main segments - Astec manufactures specialized equipment for asphalt road building, aggregate processing, and concrete production[13](index=13&type=chunk) - The company's manufacturing operations are divided into two primary business segments: **Infrastructure Solutions** and **Materials Solutions**[13](index=13&type=chunk) [Business Segments Description](index=2&type=section&id=Business%20Segments%20Description) Astec's two segments, Infrastructure Solutions and Materials Solutions, provide equipment for road building, aggregate processing, and related aftermarket parts - **Infrastructure Solutions** segment includes road building equipment, asphalt and concrete plants, thermal storage solutions, and related aftermarket parts[8](index=8&type=chunk) - **Materials Solutions** segment focuses on processing equipment to crush, screen, and convey aggregates, along with related aftermarket parts[9](index=9&type=chunk) [Detailed Financial Results](index=5&type=section&id=Detailed%20Financial%20Results) Astec's Q2 2025 financial results show a significant turnaround to net income, improved segment profitability, and positive operating cash flow [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Astec's Q2 2025 statements show a turnaround from net loss to net income, driven by improved operating income and no goodwill impairment Condensed Consolidated Statements of Operations (Q2 2025 vs Q2 2024) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | Net sales | $330.3 | $345.5 | | Gross profit | $88.3 | $81.3 | | Income (loss) from operations | $21.4 | $(10.7) | | Net income (loss) attributable to controlling interest | $16.7 | $(14.0) | | Diluted EPS | $0.72 | $(0.61) | Condensed Consolidated Statements of Operations (Six Months Ended June 30, 2025 vs 2024) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Net sales | $659.7 | $654.7 | | Gross profit | $180.7 | $158.2 | | Income (loss) from operations | $41.9 | $(4.4) | | Net income (loss) attributable to controlling interest | $31.0 | $(10.6) | | Diluted EPS | $1.35 | $(0.47) | - Goodwill impairment charges of **$20.2 million** in Q2 2024 were not present in Q2 2025, contributing to the improved operating income[22](index=22&type=chunk) [Reportable Segment Net Sales and Operating Adjusted EBITDA](index=6&type=section&id=Reportable%20Segment%20Net%20Sales%20and%20Operating%20Adjusted%20EBITDA) Segment performance varied, with Infrastructure Solutions seeing decreased Q2 sales but increased EBITDA, while Materials Solutions showed slight sales growth and substantial EBITDA rise [Three Months Ended June 30, 2025](index=6&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025) Q2 2025 saw Infrastructure Solutions net sales decrease by **7.6%** but EBITDA increase by **18.4%**, while Materials Solutions net sales rose **1.3%** and EBITDA surged **39.2%** Segment Net Sales (Q2 2025 vs Q2 2024) | Segment | 2Q 2025 (in millions) | 2Q 2024 (in millions) | Change ($) | Change (%) | | :--------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Infrastructure Solutions | $204.6 | $221.4 | $(16.8) | (7.6)% | | Materials Solutions | $125.7 | $124.1 | $1.6 | 1.3% | | **Total Net Sales** | **$330.3** | **$345.5** | **$(15.2)**| **(4.4)%** | Segment Operating Adjusted EBITDA (Q2 2025 vs Q2 2024) | Segment | 2Q 2025 (in millions) | 2Q 2024 (in millions) | Change ($) | Change (%) | | :--------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | Infrastructure Solutions | $32.2 | $27.2 | $5.0 | 18.4% | | Materials Solutions | $14.2 | $10.2 | $4.0 | 39.2% | | **Total Segment Operating Adjusted EBITDA** | **$46.4** | **$37.4** | | | Segment Operating Adjusted EBITDA Margin (Q2 2025 vs Q2 2024) | Segment | 2Q 2025 | 2Q 2024 | Change (bps) | | :--------------------- | :-------- | :-------- | :----------- | | Infrastructure Solutions | 15.7% | 12.3% | 340 bps | | Materials Solutions | 11.3% | 8.2% | 310 bps | [Six Months Ended June 30, 2025](index=7&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025) YTD 2025, Infrastructure Solutions net sales grew **4.0%** and EBITDA **42.2%**, while Materials Solutions net sales decreased **5.2%** but EBITDA increased **25.2%** Segment Net Sales (Six Months Ended June 30, 2025 vs 2024) | Segment | YTD 2025 (in millions) | YTD 2024 (in millions) | Change ($) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Infrastructure Solutions | $440.6 | $423.6 | $17.0 | 4.0% | | Materials Solutions | $219.1 | $231.1 | $(12.0) | (5.2)% | | **Total Net Sales** | **$659.7** | **$654.7** | **$5.0** | **0.8%** | Segment Operating Adjusted EBITDA (Six Months Ended June 30, 2025 vs 2024) | Segment | YTD 2025 (in millions) | YTD 2024 (in millions) | Change ($) | Change (%) | | :--------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Infrastructure Solutions | $75.1 | $52.8 | $22.3 | 42.2% | | Materials Solutions | $19.4 | $15.5 | $3.9 | 25.2% | | **Total Segment Operating Adjusted EBITDA** | **$94.5** | **$68.3** | | | Segment Operating Adjusted EBITDA Margin (Six Months Ended June 30, 2025 vs 2024) | Segment | YTD 2025 | YTD 2024 | Change (bps) | | :--------------------- | :-------- | :-------- | :----------- | | Infrastructure Solutions | 17.0% | 12.5% | 450 bps | | Materials Solutions | 8.9% | 6.7% | 220 bps | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$1,065.4 million**, driven by inventories, with total equity also rising Condensed Consolidated Balance Sheets (June 30, 2025 vs December 31, 2024) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Cash, cash equivalents and restricted cash | $88.7 | $90.8 | | Inventories, net | $448.8 | $422.7 | | Total current assets | $746.0 | $722.8 | | Total assets | $1,065.4 | $1,043.6 | | Total current liabilities | $274.8 | $271.7 | | Long-term debt | $85.0 | $105.0 | | Total equity | $674.9 | $637.6 | | Total liabilities and equity | $1,065.4 | $1,043.6 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Astec generated **$33.4 million** in operating cash flow for YTD Q2 2025, a significant improvement, with net cash outflow from financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, 2025 vs 2024) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $33.4 | $(36.1) |\n| Net cash used in investing activities | $(7.7) | $(12.6) |\n| Net cash (used in) provided by financing activities | $(29.2) | $49.5 |\n| Decrease in cash, cash equivalents and restricted cash | $(2.1) | $— |\n| Cash, cash equivalents and restricted cash, end of period | $88.7 | $63.2 | - Operating cash flow for Q2 2025 was **$12.9 million**, and free cash flow was **$9.0 million**[15](index=15&type=chunk) - Total liquidity was **$247.6 million**, comprising **$87.8 million** in cash and **$159.8 million** available under the revolving credit facility[15](index=15&type=chunk) [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) Astec utilizes non-GAAP measures to provide a clearer view of core business performance, adjusting for specific non-recurring and transformation-related costs [Explanation of Non-GAAP Measures](index=10&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Astec uses non-GAAP measures to clarify core business performance by excluding specific costs like transformation, restructuring, and impairment charges - **Non-GAAP measures** are used to understand operating results and core business performance, excluding costs like transformation program, restructuring, goodwill impairment, asset impairment, asset sale gains/losses, and transaction costs[38](index=38&type=chunk)[39](index=39&type=chunk) - **Transformation program costs** include personnel, consultant fees, duplicative systems, and accelerated depreciation related to strategic initiatives like ERP system implementation[39](index=39&type=chunk) [GAAP vs Non-GAAP Adjusted Income from Operations Reconciliations](index=11&type=section&id=GAAP%20vs%20Non-GAAP%20Adjusted%20Income%20from%20Operations%20Reconciliations) Adjusted income from operations for Q2 2025 was **$26.1 million**, with a **7.9%** margin, and YTD was **$54.4 million**, with an **8.2%** margin Adjusted Income from Operations (Q2 2025 vs Q2 2024) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | Income (loss) from operations | $21.4 | $(10.7) | | Adjustments | $4.7 | $32.1 | | Adjusted income from operations | $26.1 | $21.4 | | Adjusted operating margin | 7.9% | 6.2% | Adjusted Income from Operations (Six Months Ended June 30, 2025 vs 2024) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Income (loss) from operations | $41.9 | $(4.4) | | Adjustments | $12.5 | $37.8 | | Adjusted income from operations | $54.4 | $33.4 | | Adjusted operating margin | 8.2% | 5.1% | [GAAP vs Non-GAAP Adjusted EPS Reconciliations](index=12&type=section&id=GAAP%20vs%20Non-GAAP%20Adjusted%20EPS%20Reconciliations) Adjusted diluted EPS for Q2 2025 was **$0.88**, a **44.3%** increase, and YTD was **$1.76**, reflecting adjustments for specific costs Adjusted EPS (Q2 2025 vs Q2 2024) | Metric (in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to controlling interest | $16.7 | $(14.0) | | Adjusted net income attributable to controlling interest | $20.3 | $14.0 | | Diluted EPS | $0.72 | $(0.61) | | Adjusted EPS | $0.88 | $0.61 | Adjusted EPS (Six Months Ended June 30, 2025 vs 2024) | Metric (in millions, except per share) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) attributable to controlling interest | $31.0 | $(10.6) | | Adjusted net income attributable to controlling interest | $40.6 | $21.8 | | Diluted EPS | $1.35 | $(0.47) | | Adjusted EPS | $1.76 | $0.96 | [EBITDA and Adjusted EBITDA Reconciliations](index=13&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliations) Adjusted EBITDA for Q2 2025 increased **22.1%** to **$33.7 million** with a **10.2%** margin, and YTD reached **$68.9 million** with a **10.4%** margin EBITDA and Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | EBITDA | $29.0 | $(4.4) | | EBITDA margin | 8.8% | (1.3)% | | Adjusted EBITDA | $33.7 | $27.6 | | Adjusted EBITDA margin | 10.2% | 8.0% | EBITDA and Adjusted EBITDA (Six Months Ended June 30, 2025 vs 2024) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | EBITDA | $56.5 | $9.0 | | EBITDA margin | 8.6% | 1.4% | | Adjusted EBITDA | $68.9 | $46.5 | | Adjusted EBITDA margin | 10.4% | 7.1% | [Free Cash Flow Reconciliation](index=14&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free cash flow for Q2 2025 was **$9.0 million**, and YTD was **$25.6 million**, a substantial improvement from the prior year Free Cash Flow (Q2 2025 vs Q2 2024) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $12.9 | $10.9 | | Expenditures for property and equipment | $(3.9) | $(7.6) | | Free cash flow | $9.0 | $3.3 | Free Cash Flow (Six Months Ended June 30, 2025 vs 2024) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $33.4 | $(36.1) | | Expenditures for property and equipment | $(7.8) | $(13.4) | | Free cash flow | $25.6 | $(49.5) | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides details on investor communications, forward-looking statement disclaimers, and contact information [Investor Conference Call and Webcast](index=2&type=section&id=Investor%20Conference%20Call%20and%20Webcast) Astec held a conference call and webcast on August 6, 2025, to discuss Q2 results, business conditions, and the TerraSource acquisition - Astec held a conference call and live webcast on **August 6, 2025**, to review Q2 financial results, business conditions, and the TerraSource acquisition[10](index=10&type=chunk) - A replay of the call is available until **August 20, 2025**, and a transcript will be posted on the Investor Relations section of Astec's website[12](index=12&type=chunk) [Safe Harbor Statements](index=2&type=section&id=Safe%20Harbor%20Statements) This release contains forward-looking statements subject to risks and uncertainties detailed in SEC filings, potentially causing material differences in actual results - The news release includes **forward-looking statements** concerning income, earnings, cash flows, operational improvements, the TerraSource acquisition benefits, and economic conditions[14](index=14&type=chunk) - These statements are based on management's expectations and are subject to **risks and uncertainties** outlined in Astec's **Form 10-K and 10-Q filings**, which could lead to materially different actual results[14](index=14&type=chunk)[18](index=18&type=chunk) [For Additional Information Contact](index=4&type=section&id=For%20Additional%20Information%20Contact) Contact Steve Anderson, Senior Vice President of Administration and Investor Relations, for further information - Contact **Steve Anderson**, Senior Vice President of Administration and Investor Relations, for additional information[19](index=19&type=chunk)

Core Viewpoint - Astec Industries, Inc. is set to release its second quarter 2025 financial results on August 6, 2025, followed by 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 for domestic calls or +1 (646) 960-0833 for international calls, 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's operations are divided into two main segments: Infrastructure Solutions and Materials Solutions [4].

Core Insights - Astec Industries, Inc. has completed the acquisition of TerraSource Holding, LLC, which is expected to enhance gross profit margins, adjusted EBITDA margins, and earnings per share due to the significant contribution of aftermarket parts and services to TerraSource's revenue [1][6] - The acquisition aligns with Astec's disciplined growth strategy and is anticipated to be accretive from day one, improving the quality of earnings [2][6] - The deal is valued at $245 million in cash, with a net purchase price of $230 million after accounting for anticipated tax benefits [6] Company Overview - Astec is a manufacturer specializing in equipment for asphalt road building, aggregate processing, and concrete production, divided into two main segments: Infrastructure Solutions and Materials Solutions [3] - TerraSource provides industry-leading equipment for various applications, including crushers and waste management solutions, with a legacy of over 100 years [4] Financial Expectations - The acquisition is expected to generate annual run-rate synergies of approximately $10 million by the end of year two [6] - Astec anticipates a proforma net leverage ratio of around 2.0x net debt to adjusted EBITDA for 2025 [6]

Group 1 - The article emphasizes the importance of adapting opinions as market conditions change, highlighting that changes can occur gradually or rapidly [1] - Crude Value Insights provides an investment service focused on oil and natural gas, concentrating on cash flow and companies that generate it, which leads to potential value and growth opportunities [1] - Subscribers benefit from a comprehensive stock model account, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [2] Group 2 - A promotional offer is available for a two-week free trial, encouraging new users to explore opportunities in the oil and gas sector [3]

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited Q1 2025 financial statements reflect increased assets, significant net income growth, and positive operating cash flow [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $1,056.0 million as of March 31, 2025, primarily due to higher inventories and receivables Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $737.2 | $722.8 | | Inventories | $434.9 | $422.7 | | **Total Assets** | **$1,056.0** | **$1,043.6** | | **Total Current Liabilities** | $277.0 | $271.7 | | Long-term debt | $96.0 | $105.0 | | **Total Liabilities** | **$402.9** | **$406.0** | | **Total Equity** | **$653.1** | **$637.6** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 saw a 6.5% increase in net sales to $329.4 million, with gross profit up 20.2% and diluted EPS rising to $0.62 Q1 2025 vs. Q1 2024 Performance (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $329.4 | $309.2 | +6.5% | | Gross profit | $92.4 | $76.9 | +20.2% | | Income from operations | $20.5 | $6.3 | +225.4% | | Net income attributable to controlling interest | $14.3 | $3.4 | +320.6% | | Diluted EPS | $0.62 | $0.15 | +313.3% | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income attributable to controlling interest was $17.3 million for Q1 2025, a significant turnaround from a prior-year loss Comprehensive Income (Loss) (in millions) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $14.3 | $3.3 | | Foreign currency translation adjustments | $3.1 | $(4.4) | | **Comprehensive income (loss) attributable to controlling interest** | **$17.3** | **$(1.0)** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $20.5 million in Q1 2025, a substantial improvement from a prior-year use of cash Cash Flow Summary (in millions) | 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)** | [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail segment operations, inventory increases, ERP costs, and the planned **$245.0 million** TerraSource acquisition - The company operates in two reportable segments: **Infrastructure Solutions** and **Materials Solutions**, primarily serving the road building, construction, and mining industries[26](index=26&type=chunk)[27](index=27&type=chunk) - Total inventories increased to **$434.9 million** as of March 31, 2025, up from **$422.7 million** at the end of 2024, with work-in-process showing the largest increase[39](index=39&type=chunk) - The company's strategic ERP implementation has resulted in net capitalized costs of **$31.0 million** as of March 31, 2025[68](index=68&type=chunk)[69](index=69&type=chunk) - On April 28, 2025, the company agreed to acquire **TerraSource Holdings, LLC** for **$245.0 million** in cash, with the transaction expected to close in Q3 2025[74](index=74&type=chunk) - To fund the **TerraSource** acquisition and refinance existing debt, the company has secured a commitment for a new **$500.0 million** senior secured credit facility[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q1 2025 net sales increased 6.5% to **$329.4 million**, driven by pricing and equipment sales, while backlog decreased 28.1% Q1 2025 Financial Highlights vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $329.4M | $309.2M | +6.5% | | Gross profit | $92.4M | $76.9M | +20.2% | | Income from operations | $20.5M | $6.3M | +225.4% | | Diluted EPS | $0.62 | $0.15 | +313.3% | | Backlog (as of Mar 31) | $402.6M | $559.8M | -28.1% | - The ongoing multi-year ERP implementation is expected to cost between **$180 to $200 million**, with approximately **$140 million** incurred through Q1 2025[80](index=80&type=chunk) - The increase in gross profit was primarily driven by net favorable pricing, favorable volume/mix (**$16.0 million**), and manufacturing efficiencies (**$3.7 million**)[90](index=90&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Net sales for Q1 2025 increased 6.5% to **$329.4 million**, with gross profit margin expanding to **28.1%** due to favorable pricing - Domestic sales increased **12.6%** to **$273.8 million**, while international sales decreased **15.8%** to **$55.6 million**[88](index=88&type=chunk)[89](index=89&type=chunk) - The decrease in backlog is attributed to shorter production lead times allowing customers to order closer to delivery dates and variability in dealer ordering patterns due to inflation and interest rates[96](index=96&type=chunk) Backlog by Segment (in millions) | Segment | March 31, 2025 | March 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Infrastructure Solutions | $276.4 | $372.7 | (25.8)% | | Materials Solutions | $126.2 | $187.1 | (32.5)% | | **Total Backlog** | **$402.6** | **$559.8** | **(28.1)%** | [Segment Analysis](index=23&type=section&id=Segment%20Analysis) **Infrastructure Solutions** sales rose **16.7%** with strong EBITDA growth, while **Materials Solutions** sales declined **12.7%** Net Sales by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Infrastructure Solutions | $236.0 | $202.2 | +16.7% | | Materials Solutions | $93.4 | $107.0 | (12.7)% | Segment Operating Adjusted EBITDA (in millions) | Segment | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Infrastructure Solutions | $42.9 | $25.6 | +67.6% | | Materials Solutions | $5.2 | $5.3 | (1.9)% | - **Infrastructure Solutions'** growth was driven by net favorable pricing and volume, leading to a **$19.0 million** increase in gross profit and **$4.9 million** in manufacturing efficiencies[106](index=106&type=chunk) - **Materials Solutions'** performance was impacted by unfavorable volume and mix, resulting in a **$3.0 million** lower gross profit[107](index=107&type=chunk)[108](index=108&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity was **$238.9 million** as of March 31, 2025, with 2025 capital expenditures projected at **$35.0 million** to **$45.0 million** - Total liquidity as of March 31, 2025 was **$238.9 million**, consisting of **$90.1 million** in cash and **$148.8 million** in borrowing availability[110](index=110&type=chunk) - The company was in compliance with all financial covenants for its Credit Facilities as of March 31, 2025[112](index=112&type=chunk) - Estimated capital expenditures for the full year 2025 are projected to be between **$35.0 million** and **$45.0 million**[116](index=116&type=chunk) [Cash Flows](index=26&type=section&id=Cash%20Flows) Operating cash flow significantly improved to **$20.5 million** in Q1 2025, driven by higher net income and better working capital management - The improvement in operating cash flow was driven by a **$52.5 million** favorable change in operating assets and liabilities and a **$15.0 million** increase in cash inflows from net income adjusted for non-cash items[118](index=118&type=chunk) - Financing activities used **$15.0 million** in Q1 2025, a reversal from providing **$48.4 million** in Q1 2024, mainly due to net repayments on credit facilities in 2025 versus net borrowings in 2024[120](index=120&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposures have not materially changed since the 2024 Annual Report on Form 10-K filing - Market risk exposures have not materially changed since the Annual Report on Form 10-K for the year ended December 31, 2024 was filed[125](index=125&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of March 31, 2025, with ongoing ERP implementation expected to change internal controls - The CEO and CFO concluded that as of March 31, 2025, the Company's disclosure controls and procedures were effective[126](index=126&type=chunk) - The company is undergoing a significant multi-year global ERP implementation, which is expected to result in changes to internal control over financial reporting[127](index=127&type=chunk)[128](index=128&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) Management believes current legal proceedings will not materially affect the company's financial position or results - Management believes the ultimate outcome of current legal proceedings will not materially affect the company's business, financial position, cash flows, or results of operations[131](index=131&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for new risks associated with the pending **TerraSource** acquisition and related indebtedness - A new risk factor has been added concerning the acquisition of **TerraSource Holdings, LLC**[134](index=134&type=chunk) - Risks related to the **TerraSource acquisition** include failure to complete the deal, integration challenges, failure to realize anticipated benefits, and the impact of incurring significant new debt[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[137](index=137&type=chunk) [Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[138](index=138&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported for the period - None[140](index=140&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated **Rule 10b5-1** or non-**Rule 10b5-1** trading arrangements during the quarter - No officers or directors adopted or terminated a **Rule 10b5-1** or non-**Rule 10b5-1** trading arrangement during the quarter[141](index=141&type=chunk) [Exhibits](index=29&type=section&id=Item%206.%20Exhibits) The report includes **CEO** and **CFO certifications** pursuant to Sarbanes-Oxley Act and **XBRL documents** - Exhibits filed include **CEO/CFO certifications** (31.1, 31.2, 32.1, 32.2) and **XBRL documents** (101 series)[142](index=142&type=chunk)

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 was $35.2 million, an increase of $16.3 million or 86.2% compared to Q1 2024 [6][19] - Adjusted EBITDA margin improved to 10.7%, up 460 basis points year-over-year [7][19] - Adjusted earnings per share were reported at $0.88, significantly higher than $0.34 in Q1 2024 [7][20] - Free cash flow for the quarter was $16.6 million, representing 116% of net income [8][23] Business Line Data and Key Metrics Changes - In the Infrastructure Solutions segment, net sales were driven by strong capital equipment and aftermarket parts sales, despite a slight decline in backlog by 4.1% [7][21] - The Materials Solutions segment faced challenges due to high interest rates and dealer inventory destocking, but aftermarket parts sales remained stable [7][22] - Backlog in the Materials Solutions segment grew by $12.1 million or 10.6% due to increased order activity [17] Market Data and Key Metrics Changes - The overall backlog declined slightly but remained healthy, supported by growth in implied orders [16] - Infrastructure Solutions segment backlog was influenced by strong invoicing for asphalt and concrete plants [16] - Implied orders rose on a quarter-over-quarter basis, with a book-to-bill ratio of 113% for Q1 [18] Company Strategy and Development Direction - The company announced a definitive agreement to acquire TerraSource, a market leader in materials processing equipment, which is expected to enhance the Material Solutions segment [5][25] - The acquisition is anticipated to provide significant synergies and expand the product portfolio, with a focus on aftermarket parts [26][30] - The company is taking proactive measures to mitigate risks associated with tariffs, including price adjustments and supply chain management [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding customer sentiment and infrastructure investment needs, highlighting the importance of ongoing infrastructure improvements [9][12] - The company is maintaining its expectations for adjusted EBITDA for the full year 2025 in the range of $105 million to $125 million, excluding tariff impacts [8][20] - Management noted that while there is uncertainty regarding tariffs, proactive measures have been implemented to manage costs and protect margins [40][41] Other Important Information - The company highlighted the need for continued infrastructure investment, as indicated by the American Society of Civil Engineers' report card [9][10] - The acquisition of TerraSource is expected to close in early Q3 2025, subject to regulatory considerations [33] Q&A Session Summary Question: Why not raise guidance despite strong performance? - Management indicated that while there is upside potential, uncertainty around tariffs and customer behavior influenced the decision not to raise guidance at this time [39][40] Question: How is the company positioned regarding current tariffs? - Management stated that they have been proactive in managing the impact of tariffs and have implemented price increases to mitigate costs [42][43] Question: How has TerraSource performed compared to legacy Material Solutions? - Management noted that TerraSource has a smaller exposure to mobile markets and a significant portion of its business comes from aftermarket parts, which contributes to higher gross margins [46][48] Question: What is the expected impact of tariffs on costs? - Management estimated a potential impact of 4% to 10% on costs if no actions are taken, but emphasized their proactive measures to manage this risk [54][58] Question: Will the acquisition of TerraSource be accretive to EBITDA? - Management confirmed that the acquisition is expected to be accretive from day one, with significant synergy opportunities anticipated [33][34]

Financial Performance - Net sales for Q1 2025 reached $329.4 million[7], a 6.5% increase compared to $309.2 million in Q1 2024[38] - Adjusted EBITDA for Q1 2025 was $35.2 million[7], an 86.2% increase from $18.9 million in Q1 2024[38] - Adjusted EBITDA margin for Q1 2025 was 10.7%[7], compared to 6.1% in Q1 2024[38] - Free cash flow was $16.6 million in Q1 2025[7], representing 116% of net income[7] - Infrastructure Solutions net sales increased by 16.7% from $202.2 million in Q1 2024 to $236.0 million in Q1 2025[41] - Materials Solutions net sales decreased by 12.7% from $107.0 million in Q1 2024 to $93.4 million in Q1 2025[44] Backlog and Orders - The backlog level moderated to $402.6 million[7] in Q1 2025 - Consolidated implied orders for Q1 2025 were $312 million[29] Acquisition - Astec entered into a definitive agreement to acquire TerraSource Holdings, LLC[58], with 2024 revenue in excess of $150 million[68] - The purchase price for TerraSource is $245 million in cash[74] - The acquisition of TerraSource is expected to generate $10 million+ in total run-rate synergies[65]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 was $35.2 million, an increase of $16.3 million or 86.2% compared to Q1 2024 [6][19] - Adjusted EBITDA margin improved to 10.7%, up 460 basis points year-over-year [7][19] - Adjusted earnings per share were reported at $0.88, significantly higher than $0.34 in Q1 2024 [7][20] - Free cash flow for the quarter was $16.6 million, representing 116% of net income [8][23] Business Line Data and Key Metrics Changes - Infrastructure Solutions segment saw strong net sales driven by capital equipment and aftermarket parts, despite some softness in mobile paving and forestry units [7][21] - Material Solutions segment faced challenges due to high interest rates and dealer inventory destocking, but aftermarket parts sales remained stable [7][22] - Backlog in Material Solutions grew by $12.1 million or 10.6% due to increased order activity [16] Market Data and Key Metrics Changes - The backlog of $402.6 million moderated sequentially by 4.1%, but implied orders showed improvement [6][7] - Infrastructure investment remains critical, with a report indicating that 39% of America's public roadways are in poor or mediocre condition [9][10] Company Strategy and Development Direction - The company announced a definitive agreement to acquire TerraSource, a market leader in materials processing equipment, which is expected to enhance the Material Solutions segment [5][25] - The acquisition is anticipated to provide significant synergies and expand the product portfolio, with a focus on aftermarket parts [26][30] - The company is actively managing risks associated with tariffs and is taking proactive measures to protect margins [13][35] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding customer sentiment and the construction market, despite uncertainties related to tariffs [34] - The company is maintaining its adjusted EBITDA expectations for 2025 in the range of $105 million to $125 million, excluding tariff impacts [8][19] - Management highlighted the importance of infrastructure investment and the long-term stable demand for their equipment and services [11][12] Other Important Information - The company ended the quarter with cash and cash equivalents of $90.1 million and total available liquidity of $238.9 million [23] - The acquisition of TerraSource is expected to close in early Q3 2025, subject to regulatory considerations [33] Q&A Session Summary Question: Why not raise guidance despite strong performance? - Management indicated uncertainty around tariffs and customer behavior as reasons for not raising guidance at this time [39][40] Question: How is the company positioned regarding current tariffs? - Management noted proactive measures taken to mitigate tariff impacts and emphasized their strong position as a U.S. manufacturer [41][44] Question: How has TerraSource performed compared to legacy Material Solutions? - Management highlighted that TerraSource has a smaller exposure to mobile markets and a significant portion of its business comes from aftermarket parts, which contributes to higher gross margins [45][46] Question: Clarification on guidance excluding tariff impacts? - Management confirmed that the guidance provided excludes any impact from tariffs [50][52] Question: What is the potential impact of tariffs on costs? - Management estimated a potential impact of 4% to 10% on COGS if no actions are taken, but they are actively managing this risk [52][56] Question: Can the backlog be repriced? - Management stated that they cannot reprice the backlog but feel well covered compared to previous situations [57] Question: What is the trailing EBITDA for TerraSource? - Management refrained from providing historical EBITDA numbers for TerraSource at this stage [63]