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]

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 ...

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].