Astec Industries Inc 10-Q for FY2025 Q3
Astec Industries Inc (ASTE)
10-Q
2025-11-05
For: 2025-09-30
View Original
Added on
April 04, 2026
About this 10-Q
Astec Industries Inc filed this 10-Q on November 5, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $350.1M
- up 20.1% from $291.4M a year earlier
- Net loss
- $4.2M
- compared with a net loss of $6.2M a year earlier
- Diluted EPS
- -$0.18
- compared with -$0.27 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended September 30, 2025
or
For the transition period from _____ to _____
Commission File Number: 001-11595
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(423 ) 899-5898
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated Filer | ☐ | |||||||||
| Non-accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
| Emerging Growth Company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 31, 2025, there were 22,875,841 shares of Common Stock outstanding.
ASTEC INDUSTRIES, INC.
Index to Quarterly Report on Form 10-Q
For the Quarter Ended September 30, 2025
| Page | ||||||||
PART I ‑ FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
ASTEC INDUSTRIES, INC.
Consolidated Balance Sheets
(In millions, except share and per share data, unaudited)
| September 30, 2025 | December 31, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | |||||||||
| Investments | |||||||||||
Trade receivables, contract assets and other receivables, net of allowance for credit losses of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid and refundable income taxes | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Total current assets | |||||||||||
Property and equipment, net of accumulated depreciation of $ | |||||||||||
| Investments | |||||||||||
| Goodwill | |||||||||||
Intangible assets, net of accumulated amortization of $ | |||||||||||
| Deferred income tax assets | |||||||||||
| Other long-term assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of long-term debt | $ | $ | |||||||||
| Short-term debt | $ | ||||||||||
| Accounts payable | |||||||||||
| Customer deposits | |||||||||||
| Accrued product warranty | |||||||||||
| Accrued employee related liabilities | |||||||||||
| Accrued loss reserves | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred income tax liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Shareholders' equity: | |||||||||||
Preferred stock – authorized | |||||||||||
Common stock – authorized | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Company stock held by deferred compensation programs, at cost | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Shareholders' equity | |||||||||||
| Noncontrolling interest | ( | ||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
1
ASTEC INDUSTRIES, INC.
Consolidated Statements of Operations
(In millions, except share and per share data, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Goodwill impairment | |||||||||||||||||||||||
| Restructuring and other asset (gains) losses, net | ( | ( | |||||||||||||||||||||
| Income (loss) from operations | ( | ( | |||||||||||||||||||||
| Other expenses, net: | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| (Loss) income before income taxes | ( | ( | ( | ||||||||||||||||||||
| Income tax (benefit) provision | ( | ( | ( | ||||||||||||||||||||
| Net (loss) income | ( | ( | ( | ||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | ( | ||||||||||||||||||||||
| Net (loss) income attributable to controlling interest | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Per share data: | |||||||||||||||||||||||
| (Loss) earnings per common share - Basic | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| (Loss) earnings per common share - Diluted | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Weighted average shares outstanding - Basic | |||||||||||||||||||||||
| Weighted average shares outstanding - Diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
ASTEC INDUSTRIES, INC.
Consolidated Statements of Comprehensive (Loss) Income
(In millions, unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net (loss) income | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Other comprehensive (loss) income: | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Other comprehensive (loss) income | ( | ||||||||||||||||||||||
| Comprehensive (loss) income | ( | ( | ( | ||||||||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Comprehensive (loss) income attributable to controlling interest | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3
ASTEC INDUSTRIES, INC.
Consolidated Statements of Cash Flows
(In millions, unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of acquisition-related inventory fair value step-up | |||||||||||
| Provision for credit losses | |||||||||||
| Provision for warranties | |||||||||||
| Deferred compensation expense (benefit) | ( | ||||||||||
| Share-based compensation | |||||||||||
| Deferred tax provision (benefit) | ( | ||||||||||
| Gain on sale of property and equipment, net | ( | ( | |||||||||
| Goodwill impairment | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Distributions to deferred compensation programs' participants | ( | ( | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Purchase of trading securities, net | ( | ( | |||||||||
| Receivables and other contract assets | ( | ( | |||||||||
| Inventories | ( | ( | |||||||||
| Prepaid expenses | |||||||||||
| Other assets | ( | ||||||||||
| Accounts payable | ( | ( | |||||||||
| Accrued loss reserves | ( | ||||||||||
| Accrued employee related liabilities | ( | ||||||||||
| Other accrued liabilities | ( | ||||||||||
| Accrued product warranty | ( | ( | |||||||||
| Customer deposits | ( | ||||||||||
| Income taxes payable/prepaid | ( | ||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Acquisitions, net of cash acquired | ( | ||||||||||
| Expenditures for property and equipment | ( | ( | |||||||||
| Proceeds from sale of property and equipment | |||||||||||
| Purchase of investments | ( | ( | |||||||||
| Sale of investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
(Continued)
4
ASTEC INDUSTRIES, INC.
Consolidated Statements of Cash Flows (Continued)
(In millions, unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Payment of dividends | ( | ( | |||||||||
| Proceeds from borrowings on credit facilities and bank loans | |||||||||||
| Repayments of borrowings on credit facilities and bank loans | ( | ( | |||||||||
| Payment of debt issuance costs | ( | ||||||||||
| Sale of Company stock by deferred compensation programs, net | |||||||||||
| Withholding tax paid upon vesting of share-based compensation awards | ( | ( | |||||||||
| Net cash provided by financing activities | |||||||||||
| Effect of exchange rates on cash | |||||||||||
| Decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | |||||||||
| Supplemental cash flow information: | |||||||||||
| Cash paid during the year for: | |||||||||||
| Interest | $ | $ | |||||||||
| Income taxes paid, net | $ | $ | |||||||||
| Supplemental disclosures of non-cash items: | |||||||||||
| Non-cash investing activities: | |||||||||||
| Capital expenditures in accounts payable | $ | $ | |||||||||
| Non-cash financing activities: | |||||||||||
| Additions to right-of-use assets and lease liabilities | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
ASTEC INDUSTRIES, INC.
Consolidated Statements of Equity
(In millions except share and per share data, unaudited)
| Common Stock | Common Stock Amount | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Company Shares Held by DCP | Retained Earnings | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under incentive plan | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Withholding tax paid upon equity award vesting | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under incentive plan | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Deferred compensation programs' transactions, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under incentive plan | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Deferred compensation programs' transactions, net | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
6
(Continued)
ASTEC INDUSTRIES, INC.
Consolidated Statements of Equity (Continued)
(In millions except share and per share data, unaudited)
| Common Stock | Common Stock Amount | Additional Paid-in-Capital | Accumulated Other Comprehensive Loss | Company Shares Held by DCP | Retained Earnings | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under incentive plan | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Withholding tax paid upon equity award vesting | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under incentive plan | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Withholding tax paid upon equity award vesting | — | — | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Deferred compensation programs' transactions, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under incentive plan | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Deferred compensation programs' transactions, net | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
7
ASTEC INDUSTRIES, INC.
Notes to Unaudited Consolidated Financial Statements
Note 1. Basis of Presentation and Significant Accounting Policies
Description of Business
Astec Industries, Inc. ("Astec" or the "Company") is a Tennessee corporation which was incorporated in 1972. The Company designs, engineers, manufactures, markets and services equipment and components used primarily in asphalt and concrete road building and related construction activities, as well as other products discussed below. The Company's products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface. The Company's product portfolio includes both asphalt and concrete equipment. The Company also manufactures certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction, demolition, land clearing, energy, hydro-electric and recycling industries and port and rail yard operators; industrial heat transfer equipment; commercial whole-tree pulpwood chippers; horizontal grinders; blower trucks; commercial and industrial burners; and combustion control systems.
The Company operates in two two
The Corporate and Other category consists primarily of the parent company and Astec Insurance Company ("Astec Insurance" or the "captive"), a captive insurance company, which do not meet the requirements as an operating segment or inclusion in one of the other reporting segments.
Basis of Presentation
The accompanying unaudited consolidated financial statements include the accounts of Astec and its subsidiaries and have been prepared by the Company, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the SEC rules and regulations governing interim financial statements. However, the Company believes that the disclosures made in the unaudited consolidated financial statements and related notes are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. All intercompany balances and transactions between the Company and its affiliates have been eliminated in consolidation.
Noncontrolling interest in the Company's consolidated financial statements represents the 7 % interest in a consolidated subsidiary which is not owned by the Company. Since the Company controls this subsidiary, the subsidiary's financial statements are consolidated with those of the Company, and the noncontrolling owner's 7 % share of the subsidiary's net assets and results of operations is deducted and reported as "Noncontrolling interest" in the Consolidated Balance Sheets and as "Net (income) loss attributable to noncontrolling interest" in the Consolidated Statements of Operations. The Company executed an agreement in February 2022 with the noncontrolling interest holder to acquire their outstanding interest in full for R$10.0 M (approximately $2.0 million, subject to the effect of exchange rates). Completion of the transaction is subject to resolution of certain disputes between the parties.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include excess and obsolete inventory, inventory net realizable value, product warranty obligations, capitalized implementation costs, goodwill and other intangible assets impairment and the measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results could differ from those estimates.
In the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive (loss) income for the three and nine months ended September 30, 2025 and 2024, the financial position as of September 30, 2025 and December 31, 2024 and the cash flows for the nine months ended September 30, 2025 and 2024, and, except as otherwise discussed herein, such adjustments consist only of those of a normal recurring nature. The interim results are not necessarily indicative of results that may be achieved in a full reporting year.
All dollar amounts, except per share amounts, are in millions of dollars unless otherwise indicated.
8
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures", which requires entities to disclose significant segment expenses, other segment items, the title and position of the chief operating decision maker ("CODM") and information related to how the CODM assesses segment performance and allocates resources, among certain other required disclosures. Additionally, current annual disclosures will be required in interim periods. The new standard is effective, on a retrospective basis, for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this guidance beginning with the form 10-K filing for the year ended December 31, 2024. See Note 12, Operations by Industry Segment and Geographic Area for additional information on the Company's reportable segments.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which requires entities to disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a specified quantitative threshold. In addition, the new standard requires disclosure of the amount of income taxes paid disaggregated by federal, state and foreign taxes and by jurisdiction for exceeding a specified quantitative threshold. Additionally, income or loss from continuing operations before income tax will be required to be disaggregated between domestic and foreign classifications, and income tax expense will be required to be disaggregated between federal, state and foreign classifications. The new standard is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact this ASU will have on its financial statement disclosures, but this standard will not impact the Company's results of operations, financial position or cash flows.
In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses", which requires entities to disclose specific types of expenses included in the expense captions presented on the face of the income statement, among other disclosures. The new guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact this ASU will have on its financial statement disclosures, but this standard will not impact the Company's results of operations, financial position or cash flows.
Recent accounting guidance not discussed above is not applicable, did not have or is not expected to have a material impact on the Company.
Note 2. Acquisition
On July 1, 2025 (the "Closing Date"), the Company completed the acquisition of TerraSource Holdings, LLC ("TerraSource"), a market-leading manufacturer of material processing equipment and related aftermarket parts serving complementary crushing, screening and separation applications (such acquisition, the "Acquisition"). Pursuant to the Acquisition, the Company acquired 100 % of the equity interests of TerraSource. The total cash consideration paid for by the Company to the sellers of TerraSource was $252.4 million. The Acquisition provides the Company with access to adjacent markets in materials processing equipment and related aftermarket parts. The acquired TerraSource business is included in the Company's Materials Solutions reportable segment.
The Company financed the purchase price and related fees and expenses using net proceeds from a credit agreement entered into with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto from time to time (the "2025 Credit Agreement"). See Note 8, Debt for additional details on financing transactions.
Total transaction costs, inclusive of the amortization of the acquisition-related inventory fair value step-up, of $8.1 million and $10.3 million were expensed as incurred during the three and nine months ended September 30, 2025, respectively, for the Acquisition. Transaction costs of $4.3 3.8 million and $6.0 million were recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the three and nine months ended September 30, 2025, respectively.
9
The following table summarizes the preliminary purchase price allocation for the Acquisition, which is subject to change as the Company continues to evaluate the fair value of the assets acquired and liabilities assumed:
| (in millions) | Amount | |||||||
| Payment to equity holders | $ | |||||||
| Payment of TerraSource's outstanding debt | ||||||||
| Transaction expenses paid on behalf of the seller | ||||||||
| Aggregate purchase consideration | ||||||||
| Identifiable assets acquired: | ||||||||
| Cash, cash equivalents and restricted cash | ||||||||
| Trade receivables, contract assets and other receivables, net | ||||||||
| Inventories | ||||||||
| Other current assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Other long-term assets | ||||||||
| Total assets acquired | ||||||||
| Identifiable liabilities assumed: | ||||||||
| Current liabilities | ||||||||
| Long-term liabilities | ||||||||
| Total liabilities assumed | ||||||||
| Total identifiable net assets | ||||||||
| Goodwill | $ | |||||||
The preliminary purchase price allocation presented above was based on management's estimate of the fair values of the acquired assets and assumed liabilities using valuation techniques including the income, market and cost approaches. The goodwill is attributable to the differences between the estimated fair value of the consideration transferred and the estimated fair value of the assets acquired, and liabilities assumed. Goodwill of $15.4 million is expected to be deductible for tax purposes.
The following table summarizes the identifiable definite-lived intangible assets acquired. All intangible assets acquired in the TerraSource acquisition are subject to amortization:
| (in millions except useful lives) | Fair Value | Estimated Useful Life (in years) | ||||||||||||
| Trade Names | $ | |||||||||||||
| Patents | ||||||||||||||
| Customer Relationships | ||||||||||||||
| Other | ||||||||||||||
| Total identifiable definite-lived intangible assets acquired | $ | |||||||||||||
The acquired TerraSource business contributed revenues and a net loss of $40.5 4.7
Pro Forma Financial Information
The following unaudited pro forma summary information reflects the consolidated results of the Company's operations as if the Acquisition had been completed on January 1, 2024. The information presented below is provided for illustrative purposes only
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and does not purport to represent what the Company's consolidated results of operations would have been had the Acquisition actually occurred as of January 1, 2024.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting to illustrate the impact of amortization and depreciation expense related to acquired intangible and tangible assets, respectively, incremental interest costs on the borrowings used to fund the Acquisition, amortization of an increase in the fair value of inventory acquired, transaction costs and the related tax impact associated with these adjustments.
Note 3. Inventories
Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, which requires the Company to make specific estimates, assumptions and judgments in determining the amount, if any, of reductions in the valuation of inventories to their net realizable values.
Inventories consist of the following:
| (in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Raw materials and parts | $ | $ | |||||||||
| Work-in-process | |||||||||||
| Finished goods | |||||||||||
| Used equipment | |||||||||||
| Total | $ | $ | |||||||||
Note 4. Fair Value Measurements
The Company has various financial instruments that must be measured at fair value on a recurring basis, including marketable debt and equity securities held by Astec Insurance and marketable equity securities held in the Company's deferred compensation programs. The Company's deferred compensation programs ("DCP") include a non-qualified Supplemental Executive Retirement Plan ("SERP") and a separate non-qualified Deferred Compensation Plan. Although the DCP investments are allocated to individual participants, and investment decisions are made solely by those participants, they are non-qualified plans. Consequently, the Company owns the assets and the related offsetting liability for disbursement until such time as a participant makes a qualifying withdrawal. The DCP assets and related offsetting liabilities are recorded in non-current "Investments" and "Other long-term liabilities," respectively, in the Consolidated Balance Sheets. The Company's subsidiaries also occasionally enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates.
The carrying amount of cash, cash equivalents and restricted cash, trade receivables and contract assets, other receivables, accounts payable, short-term debt and long-term debt approximates their fair value because of their short-term nature and/or interest rates associated with the instruments. Investments are carried at their fair value based on quoted market prices for identical or similar assets or, where no quoted prices exist, other observable inputs for the asset.
Financial assets and liabilities are categorized based on the level of judgment associated with the inputs used to measure their fair value. The inputs used to measure the fair value are identified in the following hierarchy:
| Level 1 - | Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||
| Level 2 - | Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability. | |||||||
| Level 3 - | Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. | |||||||
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As indicated in the tables below, the Company has determined that all of its financial assets and liabilities as of September 30, 2025 and December 31, 2024 are Level 1 and Level 2 in the fair value hierarchy defined above:
| September 30, 2025 | |||||||||||||||||
| (in millions) | Level 1 | Level 2 | Total | ||||||||||||||
| Financial assets: | |||||||||||||||||
| Trading equity securities: | |||||||||||||||||
| Deferred compensation programs' mutual funds | $ | $ | $ | ||||||||||||||
| Preferred stocks | |||||||||||||||||
| Equity funds | |||||||||||||||||
| Trading debt securities: | |||||||||||||||||
| Corporate bonds | |||||||||||||||||
| Agency bonds | |||||||||||||||||
| U.S. government securities | |||||||||||||||||
| Asset-backed securities | |||||||||||||||||
| Exchange traded funds | |||||||||||||||||
| Mortgage backed securities | |||||||||||||||||
| Other | |||||||||||||||||
| Total financial assets | $ | $ | $ | ||||||||||||||
| Financial liabilities: | |||||||||||||||||
| Deferred compensation programs' liabilities | $ | $ | $ | ||||||||||||||
| Total financial liabilities | $ | $ | $ | ||||||||||||||
| December 31, 2024 | |||||||||||||||||
| (in millions) | Level 1 | Level 2 | Total | ||||||||||||||
| Financial assets: | |||||||||||||||||
| Trading equity securities: | |||||||||||||||||
| Deferred compensation programs' mutual funds | $ | $ | $ | ||||||||||||||
| Preferred stocks | |||||||||||||||||
| Equity funds | |||||||||||||||||
| Trading debt securities: | |||||||||||||||||
| Corporate bonds | |||||||||||||||||
| Agency bonds | |||||||||||||||||
| U.S. government securities | |||||||||||||||||
| Asset-backed securities | |||||||||||||||||
| Exchange traded funds | |||||||||||||||||
| Mortgage backed securities | |||||||||||||||||
| Other | |||||||||||||||||
| Total financial assets | $ | $ | $ | ||||||||||||||
| Financial liabilities: | |||||||||||||||||
| Deferred compensation programs' liabilities | $ | $ | $ | ||||||||||||||
| Total financial liabilities | $ | $ | $ | ||||||||||||||
Note 5. Goodwill
The Company tests goodwill for impairment annually on October 1, or more frequently should circumstances change or events occur that would more likely than not reduce the fair value of a reporting unit below its carrying value between annual impairment tests. During the second quarter of 2024, the Company identified that indicators of goodwill impairment were present due to macroeconomic conditions at the time, including declines in the Company's publicly quoted share price and increased interest rates, as well as lower than expected operating results. These factors indicated that one or more of the Company's reporting
12
units may have fallen below their carrying amounts. Management elected to perform a qualitative assessment on all reporting units, and the Company concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.
The Company determined the fair value of the Materials Solutions reporting unit using an equally weighted combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach. The significant assumptions used under the discounted cash flow method are projected net sales, projected earnings before interest, tax, depreciation and amortization ("EBITDA"), terminal growth rates, and the cost of capital. Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are primary drivers of the projected cash flows in the discounted cash flow fair value model. Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows. The Company calculates the discount rate based on a market-participant, risk-adjusted weighted average cost of capital, which considers industry specific rates of return on debt and equity capital for a target industry capital structure, adjusted for risks associated with business size, geography and other factors specific to the reporting unit. A change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying value of the reporting unit exceeding its fair value. For the guideline public company method, significant assumptions relate to the selection of appropriate guideline companies and related valuation multiples used in the market analysis.
Based on the quantitative impairment test, the Company determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024. As a result, the Company recognized a pretax non-cash goodwill impairment charge of $20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.
The Company completed the Acquisition during the three months ended September 30, 2025, which increased goodwill $85.1 million.
The changes in the carrying amount of goodwill and accumulated impairment losses by reporting segment during the nine months ended September 30, 2025 and the year ended December 31, 2024 are as follows:
| (in millions) | Infrastructure Solutions | Materials Solutions | Total | |||||||||||||||||||||||
Balance, December 31, 2023: | ||||||||||||||||||||||||||
| Goodwill | $ | $ | $ | |||||||||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | |||||||||||||||||||||||
| Net | $ | $ | $ | |||||||||||||||||||||||
2024 Activity: | ||||||||||||||||||||||||||
| Foreign currency translation | $ | ( | $ | $ | ( | |||||||||||||||||||||
| Impairment | ( | ( | ||||||||||||||||||||||||
Total 2024 activity | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
Balance, December 31, 2024: | ||||||||||||||||||||||||||
| Goodwill | $ | $ | $ | |||||||||||||||||||||||
| Accumulated impairment | ( | ( | ( | |||||||||||||||||||||||
| Net | $ | $ | $ | |||||||||||||||||||||||
2025 Activity: | ||||||||||||||||||||||||||
| Foreign currency translation | $ | $ | ( | $ | ||||||||||||||||||||||
| Acquisitions | ||||||||||||||||||||||||||
Total 2025 activity | $ | $ | $ | |||||||||||||||||||||||
Balance, September 30, 2025: | ||||||||||||||||||||||||||
| Goodwill | $ | $ | $ | |||||||||||||||||||||||
| Accumulated impairment | ( | ( | ( | |||||||||||||||||||||||
| Net | $ | $ | $ | |||||||||||||||||||||||
Note 6. Product Warranty Reserves
The Company warrants its products against manufacturing defects and performance to specified standards. The warranty period and performance standards vary by market and uses of its products, but generally range from three months to two years or up to a specified number of hours of operation. The Company estimates the costs that may be incurred under its warranties and
13
records a liability at the time product sales are recorded. The product warranty liability is primarily based on historical claim rates, nature of claims and the associated costs.
Changes in the Company's product warranty liability for the three and nine month periods ended September 30, 2025 and 2024 are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Reserve balance, beginning of the period | $ | $ | $ | $ | |||||||||||||||||||
| Warranty liabilities accrued | |||||||||||||||||||||||
| Warranty liabilities settled | ( | ( | ( | ( | |||||||||||||||||||
| Other | |||||||||||||||||||||||
| Reserve balance, end of the period | $ | $ | $ | $ | |||||||||||||||||||
Note 7. Accrued Loss Reserves
The Company accrues reserves for losses related to known workers' compensation and general liability claims that have been incurred but not yet paid or are estimated to have been incurred but not yet reported to the Company. The undiscounted reserves are actuarially determined based on the Company's evaluation of the type and severity of individual claims and historical information, primarily its own claims experience, along with assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause these estimates to change in the future. Total accrued loss reserves were $6.5 million and $6.3 million as of September 30, 2025 and December 31, 2024, respectively, of which $4.7 million and $4.6 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, respectively.
Note 8. Debt
On July 1, 2025 (the "Financing Effective Date"), the Company entered into the 2025 Credit Agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto from time to that provides for (i) a revolving credit facility, a term loan facility, a swingline facility and a letter of credit facility, in an initial aggregate amount of up to $600.0 million and (ii) an incremental facilities limit in an aggregate amount not to exceed $150.0 million (collectively, the "2025 Credit Facilities"). Loans advanced under the revolving credit facility and the term loan facility must be repaid on (i) July 1, 2030 or (ii) earlier as specified in the 2025 Credit Agreement. On the Financing Effective Date, the Company used the proceeds from the term loan facility, together with cash on hand, to (i) finance the Acquisition, (ii) repay existing indebtedness of the Company and its subsidiaries, including repayment of all amounts outstanding under the previous 2022 Credit Facilities, and (iii) the payment of transaction expenses incurred in connection with the Acquisition and the 2025 Credit Facilities.
At the Company’s election, revolving credit loans and term loans advanced under the 2025 Credit Agreement bears interest at a rate per annum equal to (i) a forward-looking term rate based on the secured overnight financing rate for the applicable interest period ("Term SOFR"), as selected by the Company, plus an applicable margin ranging between 1.75 % and 2.75 % per annum, or (ii) the highest of the Wells Fargo Bank, National Association prime rate, the Federal Funds rate plus 0.50 %, and Term SOFR for a one month tenor in effect on such day plus 1.00 % (“Base Rate”), plus an applicable margin ranging between 0.75 % and 1.75 % per annum. Swingline loans shall bear interest at the Base Rate, plus an applicable margin ranging between 0.75 % and 1.75 % per annum.
The Company also pays a commitment fee ranging from 0.15 % to 0.35 % per annum to the lenders under the revolving credit facility on the average amount by which the aggregate commitments of the lenders exceed utilization of the revolving credit facility. The applicable margins and the commitment fee are determined based on the Company's Consolidated Total Net Leverage Ratio (as defined in the 2025 Credit Agreement) at the relevant time.
The obligations of the Company in respect of the 2025 Credit Facilities are secured and are guaranteed by the U.S. domestic subsidiaries of the Company, subject to customary exceptions.
The 2025 Credit Agreement includes certain affirmative and negative covenants that impose restrictions on the Company's financial and business operations, including limitations on liens, indebtedness, fundamental changes and changes in the nature of the Company's business. These limitations are subject to customary exceptions. The Company will also be required to maintain a (i) Consolidated Total Net Leverage Ratio of not more than 3.50 to 1.00 as of the last day of any fiscal quarter, which may be increased to 4.00 to 1.00 in connection with a material permitted acquisition and subject to the terms of the 2025 Credit Agreement, and (ii) Consolidated Interest Coverage Ratio (as defined in the 2025 Credit Agreement) of at least 2.50 to 1.00 as of the last day of any fiscal quarter. The 2025 Credit Agreement also contains customary representations and warranties.
14
The 2025 Credit Agreement contains events of default customary for this type of financing, including a cross default and cross acceleration provision to certain other material indebtedness of the Company and its subsidiaries. Upon the occurrence of an event of default, the outstanding obligations under the 2025 Credit Agreement may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to the Company, the Company will be required to repay the loans outstanding under the 2025 Credit Facilities.
Additional details for the 2025 Credit Facilities are summarized below:
| (in millions, except maturity date) | September 30, 2025 | |||||||
| Revolving Line of Credit | ||||||||
| Line of credit - maximum | $ | |||||||
| Incremental credit facility - maximum | ||||||||
| Letters of credit - maximum | ||||||||
| Borrowings outstanding | ||||||||
| Amount of letters of credit outstanding | ||||||||
| Line of credit, additional borrowing capacity | ||||||||
| Unamortized debt issuance costs | ||||||||
"Prepaid expenses and other assets" | ||||||||
"Other long-term assets" | ||||||||
| Term Loan | ||||||||
| Current maturities | $ | |||||||
| Long-term maturities | ||||||||
| Maturity date | July 1, 2030 | |||||||
| Unamortized debt issuance costs | ||||||||
"Current maturities of long-term debt" | ||||||||
"Long-term debt" | ||||||||
Note 9. Income Taxes
For the three months ended September 30, 2025, the Company recorded an income tax benefit of $0.9 million, reflecting a 17.6 % effective tax rate, compared to $2.3 million for the three months ended September 30, 2024, reflecting a 27.1 % effective tax rate. The income tax benefit for the three months ended September 30, 2025 was lower compared to the same period in 2024 primarily due to lower pretax book loss and changes in the relative weighting of jurisdictional income and loss.
For the nine months ended September 30, 2025, the Company recorded income tax expense of $10.3 million, reflecting a 27.7 % effective tax rate, compared to a benefit of $0.6 million for the nine months ended September 30, 2024, reflecting a 3.4 % effective tax rate. The income tax expense for the nine months ended September 30, 2025 as compared to a benefit in the same period in 2024 was primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment incurred in 2024.
The Company's recorded liability for uncertain tax positions was $17.5 million and $16.8 million as of September 30, 2025 and December 31, 2024, respectively. The increase is the result of $0.7 million of incremental reserves associated with a research and development credit generated during 2025. Management believes it is reasonably possible that unrecognized tax liabilities will decrease by approximately $5.0 million within the next 12 months. The anticipated decrease primarily reflects the resolution of a previously uncertain tax position, following a change in tax accounting method filed with the internal revenue service, and the expected expiration of statute of limitations in certain jurisdictions. The company does not expect these reductions to materially affect the tax rate.
The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. The Company is currently under audit by the U.S. Internal Revenue Service for the federal income tax return from the 2018 tax year as well as various other state income tax and jurisdictional audits. As of September 30, 2025, the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits, resulting in no material impact on its consolidated financial position, results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/
15
or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.
On July 4, 2025, the One Big Beautiful Bill Act (the "OBBBA") was enacted into law in the United States. The OBBBA extends or makes permanent many expiring provisions of the 2017 Tax Cuts and Jobs Act and restores favorable tax treatment for certain business provisions. The effects of changes in tax laws are required to be recognized in the period in which the legislation is enacted. As such, the OBBBA had no impact on the financial statements as of September 30, 2025.
Note 10. Commitments and Contingencies
Certain customers have financed purchases of Company products through arrangements with third-party financing institutions in which the Company is contingently liable for customer debt of $1.0 million and $1.4 million as of September 30, 2025 and December 31, 2024, respectively. These arrangements expire at various dates through April 2030. The agreements provide that the Company will receive the lender's full security interest in the financed equipment if the Company is required to fulfill its contingent liability under these arrangements. The Company has recorded a liability of $0.2 million and $0.3 million related to these guarantees as of September 30, 2025 and December 31, 2024, respectively, which were included in "Other current liabilities" in the Consolidated Balance Sheets.
The Company reviews off-balance sheet guarantees individually. Prior history is considered with respect to the Company having to perform on any off-balance sheet guarantees, as well as future projections of individual customer creditworthiness with respect to assessing credit losses related to off-balance sheet guarantees.
In addition, the Company is contingently liable for letters of credit issued under its $250.0 million revolving credit facility (the "2025 Credit Facility"), which outstanding letters of credit totaled $5.2 million as of September 30, 2025. The outstanding letters of credit expire at various dates through September 2026. Unused letters of credit under the 2025 Credit Facility were $24.8 million as of September 30, 2025. The Company is additionally contingently liable for a total of $3.4 million in performance letters of credit and retention guarantees primarily held by its foreign subsidiaries, which are secured by separate credit facilities with various financial institutions as of September 30, 2025. Unused letters of credit under these separate credit facilities were $10.4 million as of September 30, 2025.
The Company has a commitment to purchase a property located in Chattanooga, Tennessee in the first quarter of 2026 for $2.8 million.
The Company is currently a party, and may become a party, to various other claims and legal proceedings in the ordinary course of business. If management believes that a loss arising from any claims and legal proceedings is probable and can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal fees) or, when the loss is estimated using a range and no point within the range is more probable than another, the minimum estimated liability. As management becomes aware of additional information concerning such contingencies, any potential liability related to these matters is assessed, and the estimates are revised, if necessary. If management believes that a loss arising from such claims and legal proceedings is either (i) probable but cannot be reasonably estimated or (ii) reasonably estimable but not probable, the Company does not record the amount of the loss but does make specific disclosure of such matter.
Based upon currently available information and with the advice of counsel, management believes that the ultimate outcome of its current claims and legal proceedings, individually and in the aggregate, will not have a material adverse effect on the Company's financial position, cash flows or results of operations. However, claims and legal proceedings are subject to inherent uncertainties, and rulings unfavorable to the Company could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse effect on the Company's financial position, cash flows or results of operations.
Previously Settled Matters
The Company and certain of its former executive officers were previously named as defendants in a putative shareholder class action lawsuit filed in 2019. In September 2024, the court formally approved the parties' agreement to settle the action for $13.7 million, which was funded entirely by the Company's insurance carriers, and the settlement agreement was entered into between the parties.
In September 2024, the Company reached an agreement to resolve the matter styled 37 Building Products, Ltd. v. Telsmith, Inc., et al. (the "37 BP Litigation") for $6.3 million, which the Company paid that same month. Upon settlement, the full loss contingency of $8.2 million, inclusive of post-judgment interest, which was recorded as of June 30, 2024 was released. The $1.9 million net benefit derived from the loss contingency release offset by the final settlement amount was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the third quarter of 2024.
In October 2024, the Company reached an agreement to resolve the action styled VenVer S.A. and Americas Coil Tubing LLP v. GEFCO, Inc. for $8.4 million, which was paid in the fourth quarter of 2024. In connection with this settlement, management
16
recorded a loss in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations during the third quarter of 2024.
Note 11. Revenue Recognition
The following tables disaggregate the Company's revenue by major source for the three and nine-month periods ended September 30, 2025 and 2024 (excluding intercompany sales):
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure Solutions | Materials Solutions | Total | Infrastructure Solutions | Materials Solutions | Total | |||||||||||||||||||||||||||||||||||||||||
| Net Sales-Domestic: | |||||||||||||||||||||||||||||||||||||||||||||||
| Equipment sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Parts and component sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Service and equipment installation revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Used equipment sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Freight revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Total domestic revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Sales-International: | |||||||||||||||||||||||||||||||||||||||||||||||
| Equipment sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Parts and component sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Service and equipment installation revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Freight revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total international revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
17
| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure Solutions | Materials Solutions | Total | Infrastructure Solutions | Materials Solutions | Total | |||||||||||||||||||||||||||||||||||||||||
| Net Sales-Domestic: | |||||||||||||||||||||||||||||||||||||||||||||||
| Equipment sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Parts and component sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Service and equipment installation revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Used equipment sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Freight revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Total domestic revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Sales-International: | |||||||||||||||||||||||||||||||||||||||||||||||
| Equipment sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Parts and component sales | |||||||||||||||||||||||||||||||||||||||||||||||
| Service and equipment installation revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Freight revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Total international revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
As of September 30, 2025, the Company had contract assets of $2.6 million and contract liabilities, excluding customer deposits, of $7.2 million, including $1.3 million of deferred revenue related to extended warranties. As of December 31, 2024, the Company had contract assets of $6.6 million and contract liabilities, excluding customer deposits, of $5.8 million, including $1.3 million of deferred revenue related to extended warranties.
Note 12. Operations by Industry Segment and Geographic Area
The Company has two
Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by the Company's Chief Executive Officer ("CEO"), who is the CODM, to evaluate performance and allocate resources to the reportable segments. The CODM uses this measure to allocate resources, including headcount, financial resources and capital resources, for each segment, predominantly in the annual budgeting process. Additionally, Segment Operating Adjusted EBITDA is believed to strongly correlate with shareholder returns and is, therefore, included as a key component in the compensation of certain employees. This metric is used to monitor actual results versus budget and forecast on a monthly basis to assess segment performance as compared to expectations. Segment Operating Adjusted EBITDA is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance.
A brief description of each segment is as follows:
Infrastructure Solutions - Sites within the Infrastructure Solutions segment design, engineer, manufacture and market a complete line of asphalt plants, concrete plants and their related components and ancillary equipment, including industrial automation controls and telematics platforms, as well as supply asphalt road construction equipment, industrial thermal systems, land clearing, recycling and other heavy equipment. The sites based in North America within the Infrastructure Solutions segment are primarily manufacturing operations, while those located outside of North America generally service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of the Company's manufacturing sites. The primary purchasers of the products produced by this segment are asphalt and concrete producers, highway and heavy
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equipment contractors, commercial and residential paving contractors, utility contractors, forestry and environmental recycling contractors and domestic and foreign governmental agencies.
Materials Solutions - Sites within the Materials Solutions segment design and manufacture heavy equipment used in aggregate and minerals processing operations in addition to servicing, rebuilding and supplying parts. These operations support civil construction, energy, mining, hydro, recycling, ports, forestry and bulk handling markets. The sites within the Materials Solutions segment are primarily manufacturing operations, with sites in Australia, Canada, Chile, Sweden and Thailand functioning to market, service and install equipment and provide parts in the regions in which they operate for many of the products produced by all the Company's manufacturing sites. Additionally, the Materials Solutions segment offers consulting and engineering services to provide complete "turnkey" processing systems. The principal purchasers of aggregate processing equipment include distributors, highway and heavy equipment contractors, sand and gravel producers, demolition, recycling and crushing contractors, open mine operators, quarry operators, port and inland terminal authorities, power stations and foreign and domestic governmental agencies. The acquired TerraSource business is included in the Material Solutions segment.
Asset information for the Company's reportable segments is set forth below:
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure Solutions | Materials Solutions | Total | Infrastructure Solutions | Materials Solutions | Total | |||||||||||||||||||||||||||||
| Reportable segment assets | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Revenue, significant expense and capital expenditure information for the Company's reportable segments is set forth below:
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure Solutions | Materials Solutions | Total | Infrastructure Solutions | Materials Solutions | Total | |||||||||||||||||||||||||||||
| Reportable segment revenues: | |||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||||||||||||||
| Total revenues - reportable segments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Significant reportable segment expenses: | |||||||||||||||||||||||||||||||||||
| Manufacturing operation costs: | |||||||||||||||||||||||||||||||||||
| Equipment | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Parts | |||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||||||||||||||
Quality costs (1) | |||||||||||||||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||||||||||||||
Inventory period costs (2) | |||||||||||||||||||||||||||||||||||
Other segment items (3) | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Reportable Segment Operating Adjusted EBITDA | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reportable segment capital expenditures | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1) Quality costs related to repair or other remediation expenses incurred for corrective action on product failures covered by warranties or voluntarily for certain warranty-type expenses occurring after the normal warranty period expires to help protect the reputation of the Company's products and maintain the goodwill of customers. | |||||||||||||||||||||||||||||||||||
(2) Inventory period costs primarily relate to inventory reserves and adjustments and net scrap sales. | |||||||||||||||||||||||||||||||||||
(3) Other segment items consists of foreign exchange gains and losses, investment income and loss and other income and expense amounts that are included in Segment Operating Adjusted EBITDA that are not considered to be significant segment expenses. | |||||||||||||||||||||||||||||||||||
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| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure Solutions | Materials Solutions | Total | Infrastructure Solutions | Materials Solutions | Total | |||||||||||||||||||||||||||||
| Reportable segment revenues: | |||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Intersegment revenues | |||||||||||||||||||||||||||||||||||
| Total revenues - reportable segments | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Significant reportable segment expenses: | |||||||||||||||||||||||||||||||||||
| Manufacturing operation costs: | |||||||||||||||||||||||||||||||||||
| Equipment | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Parts | |||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||||||||||||||
Quality costs (1) | |||||||||||||||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||||||||||||||
Inventory period costs (2) | |||||||||||||||||||||||||||||||||||
Other segment items (3) | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Reportable Segment Operating Adjusted EBITDA | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Reportable segment capital expenditures | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1) Quality costs related to repair or other remediation expenses incurred for corrective action on product failures covered by warranties or voluntarily for certain warranty-type expenses occurring after the normal warranty period expires to help protect the reputation of the Company's products and maintain the goodwill of customers. | |||||||||||||||||||||||||||||||||||
(2) Inventory period costs primarily relate to inventory reserves and adjustments and net scrap sales. | |||||||||||||||||||||||||||||||||||
(3) Other segment items consists of foreign exchange gains and losses, investment income and loss and other income and expense amounts that are included in Segment Operating Adjusted EBITDA that are not considered to be significant segment expenses. | |||||||||||||||||||||||||||||||||||
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The reconciliation of Reportable Segment Operating Adjusted EBITDA to total "(Loss) income before income taxes" is set forth below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Segment Operating Adjusted EBITDA - reportable segments | $ | $ | $ | $ | |||||||||||||||||||
| Corporate and Other expenses | ( | ( | ( | ( | |||||||||||||||||||
| Transformation program | ( | ( | ( | ( | |||||||||||||||||||
| Restructuring and other related charges | ( | ( | |||||||||||||||||||||
| Goodwill impairment | $ | ( | |||||||||||||||||||||
| Gain on sale of property and equipment, net | |||||||||||||||||||||||
| Transaction costs | ( | ( | |||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
| Net income (loss) attributable to noncontrolling interest | ( | ||||||||||||||||||||||
| (Loss) income before income taxes | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
"Net sales" into major geographic regions, attributable to the shipping location or the location where service was performed, were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Canada | |||||||||||||||||||||||
| Australia | |||||||||||||||||||||||
| Africa | |||||||||||||||||||||||
| Brazil | |||||||||||||||||||||||
| Europe | |||||||||||||||||||||||
| Asia | |||||||||||||||||||||||
| South America (Excluding Brazil) | |||||||||||||||||||||||
| Mexico | |||||||||||||||||||||||
| Central America (Excluding Mexico) | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total foreign | |||||||||||||||||||||||
| Total net sales | $ | $ | $ | $ | |||||||||||||||||||
Note 13. Strategic Transformation, Restructuring and Other Asset Gains, net
The Company's strategic transformation program includes the ongoing multi-year phased implementation of a standardized enterprise resource planning ("ERP"), which is replacing much of the existing disparate core financial systems. The upgraded ERP will initially convert internal operations, manufacturing, finance, human capital resources management and customer relationship systems to cloud-based platforms. An implementation of this scale is a major financial undertaking and requires substantial time and attention of management and key employees.
Net capitalized implementation costs associated with the ERP implementation totaled $29.1 million, of which $3.7 million and $25.4 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of September 30, 2025. Net capitalized implementation costs totaled $31.9 million, of which $3.7 million and $28.2 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of December 31, 2024. Accumulated amortization associated with these capitalized implementation costs totaled $8.3 million and $5.5 million as of September 30, 2025 and December 31, 2024, respectively.
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Costs associated with these strategic transformation programs are presented below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Strategic transformation programs | |||||||||||||||||||||||
Selling, general and administrative expenses | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
| Total costs related to strategic transformation initiatives | $ | $ | $ | $ | |||||||||||||||||||
Amortization of capitalized implementation costs (1) | $ | $ | $ | $ | |||||||||||||||||||
(1) Amortization of capitalized implementation costs is recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations. | |||||||||||||||||||||||
In addition, the Company periodically sells or disposes of its assets in the normal course of its business operations as they are no longer needed or used and may incur gains or losses on these disposals. Certain of the costs associated with these decisions are separately identified as restructuring. The Company reports asset impairment charges, excluding goodwill impairment, and gains or losses on the sales of property and equipment collectively, with restructuring charges in "Restructuring and other asset (gains) losses, net" in the Consolidated Statements of Operations to the extent they are experienced.
Restructuring charges and the gain on sale of property and equipment, net are presented below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Restructuring charges: | |||||||||||||||||||||||
| Costs associated with exited operations – Enid | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Workforce reductions | |||||||||||||||||||||||
| Total restructuring related charges | ( | ( | |||||||||||||||||||||
| Gain on sale of property and equipment, net: | |||||||||||||||||||||||
| Gain on sale of property and equipment, net | ( | ( | |||||||||||||||||||||
| Total gain on sale of property and equipment, net | ( | ( | |||||||||||||||||||||
| Restructuring and other asset (gains) losses, net | $ | ( | $ | $ | ( | $ | |||||||||||||||||
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Restructuring charges by reportable segment and the Corporate and Other category are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Infrastructure Solutions | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Materials Solutions | |||||||||||||||||||||||
| Corporate and Other | |||||||||||||||||||||||
| Total restructuring related charges | $ | ( | $ | $ | ( | $ | |||||||||||||||||
The net gains on sale of property and equipment by reportable segment are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Infrastructure Solutions | $ | $ | $ | $ | ( | ||||||||||||||||||
| Materials Solutions | ( | ( | |||||||||||||||||||||
| Total gain on sale of property and equipment, net | $ | $ | $ | ( | $ | ( | |||||||||||||||||
In October 2024, the Company reached an agreement to resolve the action styled VenVer S.A. and Americas Coil Tubing LLP v. GEFCO, Inc. for $8.4 million, which was paid in the fourth quarter of 2024. In connection with this settlement, management recorded a loss in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations during the third quarter of 2024.
Management continually reviews the Company's organizational structure and operations to ensure they are optimized and aligned with achieving near-term and long-term operational and profitability targets. In connection with this review, the Company effected workforce reductions during the second quarter of 2024, whereby charges of $0.9 million were incurred and recorded in "Restructuring and other asset (gains) losses, net" in the Consolidated Statements of Operations.
Note 14. (Loss) Earnings Per Common Share
Basic (loss) earnings per common share is determined by dividing "Net (loss) income attributable to controlling interest" by the weighted average number of common shares outstanding during the reporting period. Diluted (loss) earnings per common share includes the dilutive effect of common stock equivalents, consisting of restricted stock units, performance stock units and stock held in the Company's deferred compensation programs, using the treasury stock method. Potential common shares that have an antidilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. Performance stock units, which are considered contingently issuable, are considered dilutive when the related performance criterion has been met.
The following table sets forth a reconciliation of the number of shares used in the computation of basic and diluted (loss) earnings per common share:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Denominator for basic earnings per common share | |||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Denominator for diluted earnings per common share | |||||||||||||||||||||||
| Antidilutive securities excluded from the calculation of diluted earnings per share | |||||||||||||||||||||||
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The financial condition, results of operations and cash flows discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations are those of Astec Industries, Inc. and its consolidated subsidiaries, collectively, the "Company," "Astec," "we," "our" or "us." The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The financial position, results of operations, cash flows and other information included herein are not necessarily indicative of the financial position, results of operations and cash flows that may be expected in future periods.
Forward-Looking Statements
This Quarterly Report on Form 10-Q, particularly the following discussion and analysis of our results of operations, financial condition and liquidity in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 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 United States and global economies. Statements in this Quarterly Report on Form 10-Q that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "supports," "plans," "projects," "expects," "believes," "should," "would," "could," "forecast," "management is of the opinion," or use of the future tense and similar words or phrases.
These forward-looking statements are based largely on management's expectations, which are subject to a number of known and unknown risks, uncertainties and other factors described under the caption "Item 1A. Risk Factors" in Part II of this Report, elsewhere herein and in other documents filed by the Company with the Securities and Exchange Commission, including "Part I, Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.
Executive Summary
Highlights of our financial results for the three months ended September 30, 2025 as compared to the same period of the prior year include the following:
•Net sales were $350.1 million, an increase of 20.1%
•Gross profit was $84.2 million, an increase of 26.0%
•Income from operations was $1.1 million, an increase of 115.3%
•Net loss attributable to Astec was $4.2 million, an increase of 32.3%
•Diluted loss per share was $0.18, an increase of 33.3%
•Backlog was $449.5 million, a decrease of 5.5%
Recent Developments and Business Conditions
TerraSource Acquisition – On July 1, 2025, we completed the acquisition of TerraSource, a market-leading manufacturer of material processing equipment and related aftermarket parts serving complementary crushing, screening and separation applications. The Acquisition provides us with access to adjacent markets in materials processing equipment and related aftermarket parts and significant growth and value creation opportunities.
New Credit Facility – In connection with the Acquisition, we entered into the 2025 Credit Agreement that provides for (i) a revolving credit facility, a term loan facility, a swingline facility and a letter of credit facility, in an initial aggregate amount of up to $600.0 million and (ii) an incremental facilities limit in an aggregate amount not to exceed $150.0 million.
Strategic Transformation Program – Our strategic transformation program includes the ongoing multi-year phased implementation of a standardized ERP system, which is replacing much of our existing disparate core financial systems. To date, we have launched the human capital resources module in our U.S. locations and converted the operations of three manufacturing sites along with Corporate. We expect the project to conclude in 2028 or 2029 with total approximate
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implementation costs anticipated to range from $180 to $200 million. Through the third quarter of 2025, we have incurred total implementation costs of approximately $147 million.
See Note 13, Strategic Transformation, Restructuring and Other Asset Gains, net of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional discussion of the costs related to these strategic initiatives.
Economic Conditions – We monitor macroeconomic and other factors that may affect our business such as steel and oil prices and geopolitical conflicts, among others.
Steel is a major component of our equipment. In reaction to new or increased tariffs imposed by the Trump Administration and reciprocal actions by foreign governments, steel prices increased in the first half of 2025. As a result of stagnant demand growth, available domestic steel capacity and steady or declining material input costs, steel prices slowly declined through the third quarter of 2025. Despite these recent declines, we anticipate slight increases in steel prices toward the end of 2025 with minimal impact in early 2026.
Additionally, significant portions of our revenues from the Infrastructure Solutions segment relate to the sale of equipment involved in the production, handling, recycling or application of asphalt mix. Liquid asphalt is a by-product of oil refining, and changes in the price of oil impact the cost of asphalt, which is in turn likely to alter demand for asphalt and therefore affect demand for certain of our products. Oil prices have routinely fluctuated in recent years, and based on the current macroeconomic environment, we anticipate that oil prices will experience moderate fluctuation throughout the remainder of 2025 and into 2026.
New or ongoing geopolitical conflicts may cause a downturn in the construction industries in which we operate, cause an increase in oil prices, damage a significant portion of our inventory or materially impair our ability to distribute our products to customers. We monitor, adjust and potentially cease our operations in affected jurisdictions to ensure compliance with any governmental actions made in response to such conflicts.
Whenever possible, we attempt to cover increased costs of production by adjusting the prices of our products. The markets we serve are competitive in nature, and competition limits our ability to pass through cost increases in many cases.
Results of Operations
Net Sales
Net sales for the third quarter of 2025 were $350.1 million compared to $291.4 million for the third quarter of 2024, an increase of $58.7 million, or 20.1%. The increase in net sales was primarily driven by favorable pricing coupled with net favorable volume and mix that generated increases in (i) parts and component sales of $26.8 million, (ii) equipment sales of $24.7 million, (iii) service and equipment installation revenue of $5.1 million and (iv) freight revenue of $2.1 million. Included in these net increases is $40.5 million of incremental net sales from the acquired TerraSource business. Sales reported by our foreign subsidiaries in U.S. dollars for the third quarter of 2025 would have been $1.0 million lower had third quarter 2025 foreign exchange rates been the same as third quarter 2024 rates.
Net sales for the first nine months of 2025 were $1,009.8 million compared to $946.1 million for the first nine months of 2024, an increase of $63.7 million, or 6.7%. The increase in net sales was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated increases in (i) equipment sales of $25.6 million, (ii) parts and component sales of $24.9 million, (iii) service and equipment installation revenue of $7.1 million, (iv) freight revenue of $3.6 million and (v) used equipment sales of $2.3 million. Included in these net increases is $40.5 million of incremental net sales from the acquired TerraSource business. Sales reported by our foreign subsidiaries in U.S. dollars for the first nine months of 2025 would have been $1.3 million higher had the first nine months of 2025 foreign exchange rates been the same as the first nine months of 2024 rates.
Domestic sales for the third quarter of 2025 were $280.4 million, or 80.1% of consolidated net sales, compared to $211.2 million, or 72.5% of consolidated net sales, for the third quarter of 2024, an increase of $69.2 million, or 32.8%. Domestic sales increased primarily due to higher (i) equipment sales of $39.6 million, (ii) parts and component sales of $24.0 million, (iii) service and equipment installation revenue of $4.1 million and (iv) freight revenue of $1.9 million. Included in these net increases is $28.2 million of incremental domestic revenue from the acquired TerraSource business.
Domestic sales for the first nine months of 2025 were $816.2 million, or 80.8% of consolidated net sales, compared to $726.5 million, or 76.8% of consolidated net sales, for the first nine months of 2024, an increase of $89.7 million, or 12.3%. Domestic sales increased primarily due to higher (i) equipment sales of $51.1 million, (ii) parts and component sales of $26.8 million, (iii) service and equipment installation revenue of $6.3 million, (iv) freight revenue of $3.4 million and (v) used equipment sales of $2.3 million. Included in these net increases is $28.2 million of incremental domestic revenue from the acquired TerraSource business.
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International sales for the third quarter of 2025 were $69.7 million, or 19.9% of consolidated net sales, compared to $80.2 million, or 27.5% of consolidated net sales, for the third quarter of 2024, a decrease of $10.5 million, or 13.1%. International sales decreased primarily due to lower equipment sales of $14.9 million partially offset by higher parts and component sales of $2.8 million and service and installation revenue of $1.0 million. Included in these net decreases is $12.3 million of incremental international revenue from the acquired TerraSource business.
International sales for the first nine months of 2025 were $193.6 million, or 19.2% of consolidated net sales, compared to $219.6 million, or 23.2% of consolidated net sales, for the first nine months of 2024, a decrease of $26.0 million, or 11.8%. International sales decreased primarily due to lower equipment sales of $25.5 million and parts and component sales of $1.9 million. Included in these net decreases is $12.3 million of incremental international revenue from the acquired TerraSource business.
Gross Profit
Gross profit for the third quarter of 2025 was $84.2 million, or 24.1% of net sales, as compared to $66.8 million, or 22.9% of net sales, for the third quarter of 2024, an increase of $17.4 million, or 26.0%. The increase in gross profit was primarily driven by the impact of favorable pricing coupled with net favorable volume and mix of $37.9 million. This increase was partially offset by (i) manufacturing inefficiencies of $10.6 million, (ii) amortization of acquisition-related inventory fair value step-up of $4.3 million, (iii) net unfavorable inventory adjustments of $2.9 million and (iv) higher warranty program costs of $1.6 million.
Gross profit for the first nine months of 2025 was $264.9 million, or 26.2% of net sales, as compared to $225.0 million, or 23.8% of net sales, for the first nine months of 2024, an increase of $39.9 million, or 17.7%. The increase in gross profit was primarily driven by the impact of favorable pricing coupled with net favorable volume and mix of $59.8 million and the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $3.3 million. These increases were partially offset by (i) manufacturing inefficiencies of $8.9 million, (ii) higher warranty program costs of $5.3 million, (iii) amortization of acquisition-related inventory fair value step-up of $4.3 million and (iv) net unfavorable inventory adjustments of $2.8 million.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $83.3 million or 23.8% of net sales, for the third quarter of 2025, compared to $65.6 million, or 22.5% of net sales, for the third quarter of 2024, an increase of $17.7 million, or 27.0%, primarily due to (i) increased personnel-related costs of $7.3 million, (ii) increased intangible asset amortization expense of $5.1 million, (iii) increased transaction costs of $3.9 million primarily attributable to the Acquisition, (iv) the $1.9 million benefit derived from the 37 BP Litigation loss contingency release offset by the final settlement amount recorded during 2024, (v) increased travel costs of $1.1 million and (vi) increased bad debt expense of $1.1 million. These increases were partially offset by lower costs related to our strategic transformation program of $3.4 million and lower technology support costs of $0.9 million.
Selling, general and administrative expenses were $222.2 million, or 22.0% of net sales, for the first nine months of 2025, compared to $208.1 million, or 22.0% of net sales, for the first nine months of 2024, an increase of $14.1 million, or 6.8%, primarily due to (i) increased personnel-related costs of $16.9 million, partially driven by $5.9 million of employee incentive compensation costs, (ii) increased transaction costs of $6.1 million primarily attributable to the Acquisition and (iii) increased intangible asset amortization expense of $4.2 million. These increases were partially offset by lower costs related to our strategic transformation program of $10.4 million and decreased professional service costs of $2.8 million.
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Restructuring Charges and Other Asset Gains, net
Restructuring charges and the gain on sale of property and equipment, net for the three and nine months ended September 30, 2025 and 2024 are presented below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Restructuring charges: | |||||||||||||||||||||||
| Costs associated with exited operations – Enid | $ | (0.2) | $ | 8.4 | $ | (0.2) | $ | 8.5 | |||||||||||||||
| Workforce reductions | — | — | — | 0.9 | |||||||||||||||||||
| Total restructuring related charges | (0.2) | 8.4 | (0.2) | 9.4 | |||||||||||||||||||
| Gain on sale of property and equipment, net: | |||||||||||||||||||||||
| Gain on sale of property and equipment, net | — | — | (0.1) | (1.1) | |||||||||||||||||||
| Total gain on sale of property and equipment, net | — | — | (0.1) | (1.1) | |||||||||||||||||||
| Restructuring and other asset (gains) losses, net | $ | (0.2) | $ | 8.4 | $ | (0.3) | $ | 8.3 | |||||||||||||||
See Note 13, Strategic Transformation, Restructuring and Other Asset Gains, net of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion of the individual restructuring actions taken.
Interest Expense
Interest expense of $7.3 million and $11.4 million was incurred in the three and nine months ended September 30, 2025, respectively, as compared to $2.6 million and $8.4 million in the three and nine months ended September 30, 2024, respectively, primarily related to higher average outstanding borrowings coupled with higher interest rates on the 2025 Credit Facility as compared to the previous 2022 Credit Facility.
Income Tax
Our income tax benefit for the third quarter of 2025 was $0.9 million compared to $2.3 million for the third quarter of 2024. Our effective income tax rate was 17.6% for the third quarter of 2025 compared to 27.1% for the third quarter of 2024. The income tax benefit for the three months ended September 30, 2025 was lower compared to the same period in 2024 primarily due to lower pretax book loss and changes in the relative weighting of jurisdictional income and loss.
Our income tax expense for the first nine months of 2025 was $10.3 million compared to a benefit of $0.6 million for the first nine months of 2024. Our effective tax rate was 27.7% for the first nine months of 2025 compared to 3.4% for the first nine months of 2024. The income tax expense for the nine months ended September 30, 2025 as compared to a benefit in the same period in 2024 was primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment incurred in 2024.
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Backlog
| September 30, | |||||||||||||||||||||||
| (in millions, except percentage data) | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||
| Infrastructure Solutions | $ | 259.5 | $ | 351.1 | $ | (91.6) | (26.1) | % | |||||||||||||||
| Materials Solutions | 190.0 | 124.7 | 65.3 | 52.4 | % | ||||||||||||||||||
| Domestic Backlog | 373.7 | 377.6 | (3.9) | (1.0) | % | ||||||||||||||||||
| International Backlog | 75.8 | 98.2 | (22.4) | (22.8) | % | ||||||||||||||||||
The backlog of orders as of September 30, 2025 was $449.5 million compared to $475.8 million as of September 30, 2024, a decrease of $26.3 million, or 5.5%.
Backlog includes an incremental $64.1 million from the acquired TerraSource business in the Materials Solutions segment. Our shorter production lead times and parts fill rates have allowed for customers to place orders closer to the desired delivery date. Additionally, we have experienced variability in the ordering patterns from our customers as a result of macroeconomic factors.
Segment Net Sales – Three Months Ended:
| Three Months Ended September 30, | $ Change | % Change | |||||||||||||||||||||
| (in millions, except percentage data) | 2025 | 2024 | |||||||||||||||||||||
| Infrastructure Solutions | $ | 193.2 | $ | 165.0 | $ | 28.2 | 17.1 | % | |||||||||||||||
| Materials Solutions | 156.9 | 126.4 | 30.5 | 24.1 | % | ||||||||||||||||||
Infrastructure Solutions
Sales in this segment were $193.2 million for the third quarter of 2025 compared to $165.0 million for the same period in 2024, an increase of $28.2 million, or 17.1%. The increase was primarily driven by net favorable volume and mix coupled with favorable pricing that generated increases in (i) equipment sales of $19.3 million, (ii) parts and component sales of $6.9 million, (iii) service and equipment installation revenue of $1.0 million and (iv) freight revenue of $0.9 million.
Domestic sales for the Infrastructure Solutions segment increased $27.0 million, or 17.2%, for the third quarter of 2025 compared to the same period in 2024 primarily due to higher (i) equipment sales of $16.6 million (ii) parts and component sales of $8.2 million, (iii) service and equipment installation revenue of $1.2 million and (iv) freight revenue of $0.9 million.
International sales for the Infrastructure Solutions segment increased $1.2 million, or 14.3%, for the third quarter of 2025 compared to the same period in 2024 primarily due to higher equipment sales of $2.7 million partially offset by lower parts and components sales of $1.3 million.
Materials Solutions
Sales in this segment were $156.9 million for the third quarter of 2025 compared to $126.4 million for the same period in 2024, an increase of $30.5 million, or 24.1%. The increase was primarily driven by net favorable volume and mix coupled with favorable pricing that generated increases in (i) parts and component sales of $19.9 million, (ii) equipment sales of $5.4 million, (iii) service and equipment installation revenue of $4.1 million and (iv) freight revenue of $1.2 million.
Domestic sales for the Materials Solutions segment increased by $42.2 million, or 77.3%, for the third quarter of 2025 compared to the same period in 2024, primarily due to higher (i) equipment sales of $23.0 million, (ii) parts and component sales of $15.8 million, (iii) service and equipment installation revenue of $2.9 million and (iv) freight revenue of $1.0 million.
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International sales for the Materials Solutions segment decreased $11.7 million, or 16.3%, for the third quarter of 2025 compared to the same period in 2024 primarily due to lower equipment sales of $17.6 million partially offset by higher parts and component sales of $4.1 million and service and equipment installation revenue of $1.2 million.
Segment Net Sales – Nine Months Ended:
| Nine Months Ended September 30, | $ Change | % Change | |||||||||||||||||||||
| (in millions, except percentage data) | 2025 | 2024 | |||||||||||||||||||||
| Infrastructure Solutions | $ | 633.8 | $ | 588.6 | $ | 45.2 | 7.7 | % | |||||||||||||||
| Materials Solutions | 376.0 | 357.5 | 18.5 | 5.2 | % | ||||||||||||||||||
Infrastructure Solutions
Sales in this segment were $633.8 million for the first nine months of 2025 compared to $588.6 million for the same period in 2024, an increase of $45.2 million, or 7.7%. The increase was primarily driven by favorable pricing coupled with net favorable volume and mix that generated increases in (i) equipment sales of $27.8 million, (ii) parts and component sales of $8.4 million, (iii) service and equipment installation revenue of $3.4 million, (iv) freight revenue of $3.3 million and (v) used equipment sales of $2.1 million.
Domestic sales for the Infrastructure Solutions segment increased $42.1 million, or 7.7%, for the first nine months of 2025 compared to the same period in 2024 primarily due to higher (i) equipment sales of $21.5 million, (ii) parts and component sales of $11.8 million, (iii) service and equipment installation revenue of $3.3 million, (iv) freight revenue of $3.3 million and (v) used equipment sales of $2.1 million.
International sales for the Infrastructure Solutions segment increased $3.1 million, or 8.0%, for the first nine months of 2025 compared to the same period in 2024 primarily due to higher equipment sales of $6.3 million partially offset by lower parts and component sales of $3.4 million.
Materials Solutions
Sales in this segment were $376.0 million for the first nine months of 2025 compared to $357.5 million for the same period in 2024, an increase of $18.5 million, or 5.2%. The increase was primarily driven by favorable pricing coupled with net favorable volume and mix that generated increases in parts and component sales of $16.5 million and service and equipment installation revenue of $3.7 million.
Domestic sales for the Materials Solutions segment increased by $47.6 million, or 26.9%, for the first nine months of 2025 compared to the same period in 2024, primarily due to higher (i) equipment sales of $29.6 million, (ii) parts and component sale of $15.0 million and (iii) service and installation revenue of $3.0 million.
International sales for the Materials Solutions segment decreased $29.1 million, or 16.1%, for the first nine months of 2025 compared to the same period in 2024 primarily due to lower equipment sales of $31.8 million.
Segment Operating Adjusted EBITDA
Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by our CEO, who is the CODM, to evaluate performance and allocate resources to the reportable segments. Segment Operating Adjusted EBITDA is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance. See Note 12, Operations by Industry Segment and Geographic Area, of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of Segment Operating Adjusted EBITDA to total consolidated income before taxes.
Segment Operating Adjusted EBITDA – Three Months Ended:
| Three Months Ended September 30, | $ Change | % Change | |||||||||||||||||||||
| (in millions, except percentage data) | 2025 | 2024 | |||||||||||||||||||||
| Infrastructure Solutions | $ | 23.9 | $ | 15.6 | $ | 8.3 | 53.2 | % | |||||||||||||||
| Materials Solutions | 15.4 | 14.5 | 0.9 | 6.2 | % | ||||||||||||||||||
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Infrastructure Solutions
Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $23.9 million for the third quarter of 2025 compared to $15.6 million for the same period in 2024, an increase of $8.3 million, or 53.2%. The increase in Segment Operating Adjusted EBITDA was primarily driven by the sales impact of net favorable volume and mix coupled with favorable pricing that generated higher gross profit of $16.4 million and lower technology support costs of $1.0 million. These increases were partially offset by (i) manufacturing inefficiencies of $3.0 million, (ii) higher personnel-related costs of $2.5 million, (iii) higher quality-related expenses of $1.2 million and (iv) net unfavorable inventory adjustments of $1.2 million.
Materials Solutions
Segment Operating Adjusted EBITDA for the Materials Solutions segment was $15.4 million for the third quarter of 2025 compared to $14.5 million for the same period in 2024, an increase of $0.9 million, or 6.2%. The increase in Segment Operating Adjusted EBITDA was primarily driven by the sales impact of net favorable volume and mix coupled with favorable pricing that generated higher gross profit of $21.5 million and the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $0.8 million. These increases were partially offset by (i) manufacturing inefficiencies of $7.0 million, (ii) higher personnel-related costs of $6.1 million, (iii) the $1.9 million benefit derived from the 37 BP Litigation loss contingency release offset by the final settlement amount recorded during 2024, (iv) net unfavorable inventory adjustments of $1.8 million and (v) higher travel-related costs of $0.8 million.
Segment Operating Adjusted EBITDA – Nine Months Ended:
| Nine Months Ended September 30, | $ Change | % Change | |||||||||||||||||||||
| (in millions, except percentage data) | 2025 | 2024 | |||||||||||||||||||||
| Infrastructure Solutions | $ | 99.0 | $ | 68.4 | $ | 30.6 | 44.7 | % | |||||||||||||||
| Materials Solutions | 34.8 | 30.0 | 4.8 | 16.0 | % | ||||||||||||||||||
Infrastructure Solutions
Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $99.0 million for the first nine months of 2025 compared to $68.4 million for the same period in 2024, an increase of $30.6 million, or 44.7%. The increase in Segment Operating Adjusted EBITDA was primarily driven by from (i) the sales impact of favorable pricing coupled with net favorable volume and mix that generated higher gross profit of $40.3 million, (ii) lower professional service costs of $2.2 million and (iii) lower technology support costs of $2.1 million. These increases were partially offset by (i) higher quality-related costs of $7.3 million, (ii) higher personnel-related costs of $7.0 million and (iii) net unfavorable inventory adjustments of $3.0 million.
Materials Solutions
Segment Operating Adjusted EBITDA for the Materials Solutions segment was $34.8 million for the first nine months of 2025 compared to $30.0 million for the same period in 2024, an increase of $4.8 million, or 16.0%. The increase in Segment Operating Adjusted EBITDA was primarily driven by the sales impact of favorable pricing coupled with net favorable volume and mix that generated higher gross profit of $19.5 million and the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $2.2 million. These increases were partially offset by manufacturing inefficiencies of $9.2 million and higher personnel-related expenses of $7.9 million.
Corporate and Other Operations
Corporate and Other operations, which are not an operating segment or included in one of the other reportable segments, had net expenses of $12.2 million for the third quarter of 2025 compared to $12.7 million for the same period in 2024, a decrease of $0.5 million, or 3.9%. The decrease in expenses was primarily driven by lower personnel-related costs of $1.3 million.
Corporate and Other operations had net expenses of $37.8 million for the first nine months of 2025 compared to $34.5 million for the first nine months of 2024, an increase of $3.3 million, or 9.6%. The increase in expenses was primarily due to higher personnel-related costs of $2.0 million.
Liquidity and Capital Resources
Our primary sources of liquidity and capital resources are cash and cash equivalents on hand, borrowing capacity under our credit facilities and cash flows from operations. As of September 30, 2025, our total liquidity was $312.1 million, consisting of $67.3 million of cash and cash equivalents available for operating purposes and $244.8 million available for additional borrowings under the revolving credit facility, to the extent our compliance with financial covenants permits such borrowings. Our
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foreign subsidiaries held $29.4 million of cash and cash equivalents available for operating purposes, which is considered to be indefinitely invested in those jurisdictions.
Our future cash requirements primarily include working capital needs, debt service obligations, capital expenditures, vendor-hosted software arrangements including the related implementation costs, unrecognized tax benefits and operating lease payments. In addition, our variable cash uses may include transformation initiatives, strategic acquisitions, dividend payments and share repurchases under our share repurchase authorization. We believe that our current working capital, cash flows generated from future operations and available capacity under the revolving credit facility will be sufficient to meet working capital and capital expenditure requirements for our existing business for at least the next 12 months.
On July 1, 2025, we entered into the 2025 Credit Agreement that provides for (i) a revolving credit facility, a term loan facility, a swingline facility and a letter of credit facility, in an initial aggregate amount of up to $600.0 million and (ii) an incremental facilities limit in an aggregate amount not to exceed $150.0 million. We had outstanding principal indebtedness on the term loan facility of $345.6 million and no outstanding borrowings under the revolving credit facility and as of September 30, 2025. Our outstanding letters of credit totaling $5.2 million decreased borrowing availability to $244.8 million under the revolving credit facility as of September 30, 2025.
Certain of our international subsidiaries in Australia, Brazil, Canada, South Africa and the United Kingdom each have separate credit facilities with local financial institutions primarily to finance short-term working capital needs, as well as to cover foreign exchange contracts, performance letters of credit, advance payment and retention guarantees. In addition, the Brazilian subsidiary also enters into order anticipation agreements on a periodic basis. Both the outstanding borrowings under the credit facilities of the international subsidiaries and the order anticipation agreements are recorded in "Short-term debt" in our Consolidated Balance Sheets. Each of the credit facilities are generally guaranteed by Astec Industries, Inc. and/or secured with certain assets of the local subsidiary.
We regularly enter into agreements, primarily to purchase inventory, in the ordinary course of business. As of September 30, 2025, open purchase obligations totaled $118.7 million, of which $92.7 million are expected to be fulfilled within the remainder of 2025.
We estimate that our capital expenditures will be between $25.0 million and $35.0 million for the year ending December 31, 2025, which may be impacted by general economic, financial or operational changes and competitive, legislative and regulatory factors, among other considerations.
Cash Flows
The following table summarizes cash flows during the nine months ended September 30, 2025 and 2024, respectively:
| Nine Months Ended September 30, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Net cash provided by (used in) operating activities | $ | 25.3 | $ | (13.6) | |||||||
| Net cash used in investing activities | (260.4) | (14.0) | |||||||||
| Net cash provided by financing activities | 212.4 | 19.5 | |||||||||
| Effect of exchange rates on cash | 1.2 | 0.2 | |||||||||
| Decrease in cash, cash equivalents and restricted cash | (21.5) | (7.9) | |||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 69.3 | $ | 55.3 | |||||||
Net cash provided by (used in) operating activities
Our operating activities provided net cash of $25.3 million for the nine months ended September 30, 2025 as compared to a net use of $13.6 million for the nine months ended September 30, 2024. This increase is primarily due to increased cash inflows from net income reduced by non-cash charges of $47.4 million partially offset by higher net cash usages for our operating assets and liabilities of $8.4 million. The increased net cash usage for our operating assets and liabilities was mainly driven by decreased customer deposits of $32.2 million associated with lower backlog and the timing impacts for accrued liabilities of $27.8 million. The increased net cash usage was partially offset by the timing impacts of (i) payments of trade accounts payables of $27.4 million, (ii) collections on trade and other receivables of $21.4 million and (iii) lower employee-related payments of $14.2 million.
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Net cash used in investing activities
Net cash used in investing activities was $260.4 million during the nine months ended September 30, 2025 as compared to $14.0 million during the nine months ended September 30, 2024, primarily due to the TerraSource acquisition partially offset by decreased capital expenditures of $4.0 million.
Net cash provided by financing activities
Net cash provided by financing activities was $212.4 million during the nine months ended September 30, 2025 as compared to $19.5 million during the nine months ended September 30, 2024, primarily due to higher net debt borrowings in 2025 as compared to 2024.
Dividends
We paid quarterly dividends of $0.13 per common share to shareholders in the third quarter of both 2025 and 2024.
Financial Condition
Our total current assets increased to $821.2 million as of September 30, 2025 from $722.8 million as of December 31, 2024, an increase of $98.4 million, or 13.6%, due primarily to increases in (i) inventories of $78.1 million, (ii) trade and other receivables of $25.9 million and (iii) prepaid and refundable income taxes of $11.2 million. These increases were partially offset by a decrease in cash, cash equivalents and restricted cash of $21.5 million.
Our total current liabilities increased to $318.3 million as of September 30, 2025 from $271.7 million as of December 31, 2024, an increase of $46.6 million, or 17.2%, due primarily to increases in (i) current maturities of long-term debt of $16.2 million associated with our term facility, (ii) accounts payables of $15.2 million and (iii) accrued employee-related liabilities of $12.7 million.
Critical Accounting Estimates
Our critical accounting estimates are described in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, 2024 was filed.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our quantitative and qualitative disclosures about market risk are incorporated by reference from "Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2024. Our market risk exposures have not materially changed since our Annual Report on Form 10-K for the year ended December 31, 2024 was filed.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management has established and maintains disclosure controls and procedures that are designed to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including our CEO and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. Management carried out an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our CEO and CFO have concluded that as of September 30, 2025, the Company's disclosure controls and procedures were effective.
Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the three month period ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
We are currently undertaking a significant multi-year global ERP implementation to upgrade our information technology platforms and business processes. The implementation is occurring in phases over several years, which began in 2023. During 2023, we implemented the human capital resources management module, including the payroll application for all locations within the
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United States, the ERP at Corporate and one manufacturing site and the consolidations and reporting module. During 2024, we implemented the ERP at two additional manufacturing sites.
As a result of this multi-year implementation, we expect certain changes to our processes and procedures, which, in turn, will result in changes to our internal control over financial reporting. While we expect this implementation to strengthen our internal control over financial reporting by automating certain manual processes and standardizing business processes and reporting across our organization, we will continue to evaluate and monitor our internal control over financial reporting as processes and procedures in the affected areas evolve.
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PART II ‑ OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are involved in legal actions arising in the ordinary course of our business. Except as noted elsewhere in this Report, there are no pending or threatened litigation proceedings that our management believes will result in an outcome that would materially affect our business, financial position, cash flows or results of operations. Nevertheless, there can be no assurance that future litigation to which we become a party will not have a material adverse effect on our business, financial position, cash flows or results of operations.
See Note 10, Commitments and Contingencies of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding material legal proceedings in which we are involved.
Item 1A. Risk Factors
In addition to the other information set forth in this Report, you should carefully consider the risk factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024 and Part II, "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, which could materially affect our business, financial condition or future results. Other than as described below, there have been no material changes from the risk factors previously disclosed therein. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 are not the only risks facing our Company. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially and adversely affect our business, financial condition or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the three month period ended September 30, 2025, no officers or directors, as defined in Rule 16a-1(f) under the Exchange Act, adopted and/or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement
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Item 6. Exhibits
| Incorporated by Reference | ||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Filed Herewith | Form | Period Ended | Filing Date | |||||||||||||||||||||||||||
| 31.1 | X | |||||||||||||||||||||||||||||||
| 31.2 | X | |||||||||||||||||||||||||||||||
| 32.1 | X | |||||||||||||||||||||||||||||||
| 32.2 | X | |||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document | X | ||||||||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||
| 104 | Cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in iXBRL (included as Exhibit 101). | X | ||||||||||||||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| ASTEC INDUSTRIES, INC. (Registrant) | |||||
| Date: November 5, 2025 | /s/ Brian J. Harris | ||||
| Brian J. Harris Chief Financial Officer (Principal Financial Officer) | |||||
| Date: November 5, 2025 | /s/ Robert G. Putney | ||||
| Robert G. Putney Vice President, Chief Accounting Officer and Business Development (Principal Accounting Officer) | |||||
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Exhibit 31.1
Certification pursuant to Rule 13a-14(a)/15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jaco van der Merwe, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Astec Industries, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2025 | /s/ Jaco van der Merwe | ||||
| Jaco van der Merwe | |||||
| President and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
Certification pursuant to Rule 13a-14(a)/15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Brian J. Harris, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Astec Industries, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2025 | /s/ Brian J. Harris | ||||
Brian J. Harris | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
Exhibit 32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report of Astec Industries, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jaco van der Merwe, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2025 | /s/ Jaco van der Merwe | ||||
| Jaco van der Merwe | |||||
| President and Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 Of The Sarbanes-Oxley Act Of 2002
In connection with the Quarterly Report of Astec Industries, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Brian J. Harris, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 5, 2025 | /s/ Brian J. Harris | ||||
Brian J. Harris | |||||
| Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||