Financial Data and Key Metrics Changes - In Q4 2023, sales were $337.2 million, down 3.6% year-over-year, with domestic sales growth offset by a decline in international sales [19] - Adjusted EBITDA increased 46.8% to $32.6 million, with margins expanding by 340 basis points to 9.7% [21] - Full-year sales reached $1.3382 billion, up 5%, with adjusted EBITDA growing 55.4% [22][23] - Adjusted earnings per share increased to $0.90 from $0.34 the prior year, a rise of 164.7% [20] Business Line Data and Key Metrics Changes - Infrastructure Solutions' net sales increased slightly to $240 million, with parts sales up 7.2% [21] - Materials Solutions' net sales decreased 13.1% to $95.4 million, with international sales down 28.7% [22] Market Data and Key Metrics Changes - Domestic sales growth of 6.8% was slightly offset by a 2.1% decline in international sales for the full year [22] - Contract awards increased 8.6% in 2023, indicating a positive leading indicator for future construction [15] Company Strategy and Development Direction - The company is focused on operational excellence, growing the parts business, and new product development [6][9] - Plans to continue organic growth and explore disciplined acquisition opportunities [9] - The implementation of the Oracle ERP system is expected to enhance operational efficiency [12][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term demand due to positive customer sentiment and increased federal funding [7][17] - While the macro environment remains uncertain, there are indicators of stable demand with growth opportunities [13] - Management expects flat to single-digit growth for 2024, with a solid outlook based on backlog and new product launches [30][17] Other Important Information - The company published its first Corporate Sustainability Report, emphasizing its commitment to safety and community [8] - The backlog has normalized from peak levels, with implied orders increasing 27.6% sequentially in Q4 [16] Q&A Session Summary Question: What led to the higher margins? - Management indicated that higher margins were driven by a favorable parts mix, operational excellence, and positive pricing realization [26][27] Question: Can you discuss order rate trends and backlog improvements? - Management noted improved customer sentiment and federal funding, with expectations for stable orders in 2024 despite interest rate concerns [28][29] Question: What is the timing of margin improvements from ERP implementations? - Management expects positive effects from ERP implementations in future quarters, with ongoing operational improvements already benefiting margins [31][32] Question: How did EBITDA margins compare by segment? - Infrastructure Solutions had strong performance, while Material Solutions faced challenges due to interest rates affecting rental conversions [37][39] Question: What is the outlook for international sales? - Management indicated that international sales were affected by timing, particularly in Europe, but a strong pipeline suggests improvement in 2024 [40][41] Question: What are the expectations for the transformation program charges? - Management expects similar spending in 2024 and 2025, with the majority of the program concluding by the end of 2025 [42][44] Question: How does the company plan to use cash moving forward? - The company plans to balance CapEx investments, dividends, and potential acquisitions while maintaining a strong focus on improving working capital [60][61]

Business Segments and Operations - The company operates in the Infrastructure Solutions and Materials Solutions segments, focusing on asphalt and concrete road building equipment and related services[25]. - The Materials Solutions segment focuses on heavy rock processing equipment and services for the aggregate, mining, recycling, ports, and bulk handling markets[45]. - The Infrastructure Solutions segment includes a complete line of asphalt and concrete plants, with products designed for high production capacity and reduced emissions[30]. - The company operates multiple manufacturing sites globally, including locations in South Africa, Brazil, the United States, Canada, and the United Kingdom[46]. Financial Performance - Astec Industries reported net sales of $1,338.2 million for 2023, an increase of 5.0% from $1,274.5 million in 2022[261]. - The company's gross profit for 2023 was $330.8 million, up from $264.1 million in 2022, reflecting a significant improvement in profitability[261]. - Net income attributable to controlling interest for 2023 was $33.5 million, compared to a loss of $0.1 million in 2022, indicating a strong turnaround in financial performance[261]. - Earnings per share (EPS) for 2023 was $1.47, compared to a loss per share in the previous year, showcasing improved earnings generation[261]. - Total assets increased to $1,059.3 million in 2023 from $1,014.4 million in 2022, indicating growth in the company's asset base[259]. - Total liabilities rose to $405.6 million in 2023, up from $387.5 million in 2022, reflecting increased financial obligations[259]. - The company reported a comprehensive income of $35.5 million for 2023, a significant recovery from a comprehensive loss of $7.8 million in 2022[264]. - Net income for 2023 was $33.7 million, a significant improvement from a net loss of $0.6 million in 2022[267]. Sustainability and Environmental Initiatives - The company aims to achieve net zero carbon emissions during asphalt production and construction by 2050, participating in initiatives like The Road Forward and the U.S. Department of Energy's Better Plants program[40]. - The company emphasizes sustainability by manufacturing equipment that meets EPA Tier 4 Final and European Stage V emissions standards, compatible with hydrotreated vegetable oil fuels[53]. - The company’s product offerings include asphalt plants with up to 70% recycled material capabilities, emphasizing sustainability in production processes[40]. - The company has introduced a patented water injection warm mix asphalt system, allowing for lower temperature asphalt preparation and significant emissions reduction[32]. Research and Development - The company has a strong focus on research and development, dedicating substantial resources to enhance product functionality and reliability[66]. - The company incurred $22.0 million, $31.5 million, and $26.5 million in research and development costs during 2023, 2022, and 2021, respectively[325]. - The company holds 116 U.S. patents and 128 foreign patents, with additional applications pending[65]. Customer Relations and Market Strategy - The company is focused on enhancing customer experience through the development of the Astec Digital Ecosystem, leveraging technology and digital connectivity[21]. - The company’s strategic objectives include strengthening customer relationships and expanding into attractive new markets through strategic acquisitions and partnerships[20]. - The company aims to connect all products in the "Rock to Road" value chain through its Astec Digital Ecosystem, enhancing customer efficiency and productivity[58]. Backlog and Orders - The backlog for the Infrastructure Solutions segment decreased from approximately $567.1 million in 2022 to $404.6 million in 2023[44]. - The backlog for the Materials Solutions segment also declined from approximately $341.2 million in 2022 to $162.7 million in 2023[56]. - Total backlog for the company decreased from approximately $912.7 million in 2022 to $569.8 million in 2023, with a significant portion of the decline attributed to domestic customer orders[68]. Employee and Labor Relations - As of December 31, 2023, the company employed 4,322 individuals, with 3,650 located in the U.S. and Canada, and 2,869 engaged in manufacturing[73]. - Approximately 78 U.S. employees are covered by a collective bargaining agreement expiring on December 11, 2025[74]. - The company has implemented parental leave, providing paid time off for new mothers and fathers[75]. - The company plans to increase its 401(k) employer match beginning in 2024 to support employees' retirement[75]. Financial Risks and Management - A hypothetical 100 basis point increase in interest rates would have a $0.7 million impact on annualized interest expense based on an outstanding balance of $72.0 million as of December 31, 2023[232]. - The company does not hedge variable interest rates, exposing it to interest rate risk from its credit facilities[232]. - The company utilizes strategies including forward-looking contracts to manage commodity price volatility, particularly for steel[235]. Inventory and Asset Management - The Company reported total inventories of $455.6 million as of December 31, 2023, an increase from $393.4 million in 2022, with raw materials and parts at $298.6 million[347]. - The Company reviews its inventory, including finished goods, used equipment, and rental equipment, on a model-by-model basis to assess if any item's net realizable value is below its carrying value[293]. - The Company’s inventory is valued at the lower of cost or net realizable value, requiring estimates and judgments regarding potential reductions[291]. Acquisitions and Investments - The Company completed the acquisition of MINDS Automation Group, Inc. for a purchase price of $19.3 million, resulting in $9.3 million of goodwill and $9.3 million of intangible assets[343]. - Total assets acquired from MINDS included cash of $1.5 million, trade receivables of $2.7 million, and inventories of $0.7 million, totaling $24.6 million[345]. Financial Reporting and Compliance - The Company is evaluating the impact of recently issued accounting standards, including ASU 2023-07 and ASU 2023-09, which will affect segment reporting and income tax disclosures, respectively[340][341]. - The fair value of the Company’s financial assets and liabilities is categorized as Level 1 and Level 2, with total financial assets at $19.5 million and total financial liabilities at $5.6 million as of December 31, 2023[352].

Core Insights - Astec Industries reported revenue of $337.2 million for the quarter ended December 2023, a decrease of 3.6% year-over-year [1] - The earnings per share (EPS) was $0.90, significantly higher than $0.34 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $353.08 million, resulting in a surprise of -4.50% [1] - The company achieved an EPS surprise of +45.16%, with the consensus EPS estimate being $0.62 [1] Revenue Breakdown - Corporate and Other revenues were reported at $1.80 million, exceeding the two-analyst average estimate of $1.65 million [2] - Infrastructure Group revenues reached $240 million, slightly below the two-analyst average estimate of $247.05 million, reflecting a year-over-year increase of +0.7% [2] - Materials Solutions revenues were $95.40 million, significantly lower than the $117.84 million average estimate, marking a year-over-year decline of -13.1% [2] Stock Performance - Astec Industries' shares have returned +1.3% over the past month, compared to a +4% change in the Zacks S&P 500 composite [2] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [2]

NEWS RELEASE ASTEC REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS Fourth Quarter and Full Year 2023 Overview (all comparisons are made to the corresponding prior year fourth quarter or prior year, as applicable): • Net sales decreased 3.6% to $337.2 million in the quarter. Full year net sales increased 5.0% to $1.3 billion. • Gross margin of 26.4% increased 610 basis points in the quarter. Full year gross margin of 24.7% increased 400 basis points. • Diluted EPS of $0.65 compared to $(0.04) in the quarte ...

Group 1 - Astec Industries, Inc. declared a quarterly dividend of $0.13 per share, to be paid on or about March 29, 2024 [1] - The record date for shareholders to receive the dividend is March 11, 2024 [1] Group 2 - Astec is a manufacturer of specialized equipment for asphalt road building, aggregate processing, and concrete production [2] - The company's manufacturing operations are divided into two primary business segments: Infrastructure Solutions and Materials Solutions [2] - Infrastructure Solutions includes road building, asphalt and concrete plants, thermal and storage solutions [2] - Materials Solutions includes aggregate processing equipment [2]

CHATTANOOGA, Tenn., Feb. 07, 2024 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (NASDAQ:ASTE) announces a conference call to review the company’s fourth quarter and full year 2023 financial results. Astec Industries, Inc. will release the company’s fourth quarter and full year 2023 results to the wire service on Wednesday, February 28, 2024, at approximately 7:00 a.m. Eastern Time. The live call will begin on Wednesday, February 28, 2024, at 8:30 a.m. Eastern Time. Jaco van der Merwe, President and Chief Execu ...

CHATTANOOGA, Tenn., Feb. 07, 2024 (GLOBE NEWSWIRE) -- Astec Industries, Inc. (NASDAQ:ASTE) announces a conference call to review the company's fourth quarter and full year 2023 financial results. Astec Industries, Inc. will release the company's fourth quarter and full year 2023 results to the wire service on Wednesday, February 28, 2024, at approximately 7:00 a.m. Eastern Time. The live call will begin on Wednesday, February 28, 2024, at 8:30 a.m. Eastern Time. Jaco van der Merwe, President and Chief Execu ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-11595 Astec Industries, Inc. (Exact name of registrant as specified in its charter) Tennessee 62-0873631 (State ...

Financial Data and Key Metrics Changes - Sales for Q3 2023 were $303.1 million, down 3.8% year-over-year, with slight declines in both segments [16] - Adjusted EBITDA decreased 39.8% to $10 million, with an adjusted EBITDA margin of 3.3%, a decrease of 200 basis points [17] - Gross margins improved by 220 basis points to 23%, marking the fifth consecutive quarter with gross margins exceeding 20% [17][19] - Adjusted earnings per share decreased to a loss of $0.01 from an income of $0.28 the prior year, primarily due to a litigation contingency [18] Business Line Data and Key Metrics Changes - Infrastructure Solutions net sales decreased 5.5% to $190.8 million, with international growth of 3.4% offset by softening domestic demand [19] - Material Solutions net sales decreased 1.2% to $110.5 million, with international sales increasing by 20.7% while domestic sales declined by 9% [20] - Part sales grew 2.4%, while equipment sales declined by 4.5% [16] Market Data and Key Metrics Changes - Strong international sales growth of 11.7% was noted, while domestic sales were down 7.9% [16] - Backlog decreased 36.6% from the peak in Q3 2022 and 10.8% sequentially, remaining within the historical range of 1.5 to 2 quarters [16] Company Strategy and Development Direction - The company is focused on operational excellence and has simplified its internal staffing and branding [13] - Investments are being made to optimize the manufacture of mobile construction and crushing equipment domestically and internationally [13] - The company is pursuing a growth strategy that includes introducing new products and expanding into new geographies [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about customer sentiment and backlog for concrete plants and related equipment, expecting strong demand in 2024 [10][12] - The company is monitoring high-volume dealer orders for potential modifications due to rising interest rates [10] - Management indicated that the Federal Highway Bill funding is providing long-term stability for markets and customers [10] Other Important Information - The company announced the addition of paid parental leave for both parents and an increase in the company 401(k) maximum effective January 1, 2024 [7] - A corporate sustainability report is set to be released in Q4, marking a significant step forward in the company's ESG journey [15] Q&A Session Summary Question: Can you discuss the margin front and the sequential decline? - Management noted that overall margins continue to improve year-over-year, but the mix of products in Q3 contributed to the margin profile [27] Question: Did the mix of international versus domestic revenues contribute to margin changes? - Management stated that they were pleased with international performance and that transfer pricing affects margins [29] Question: Are order rates expected to turn positive in Q4? - Management expects a strong order writing period in Q4, in line with previous years, due to low dealer inventory [32] Question: What does "normalization" of orders mean? - Management clarified that they expect order patterns to stabilize within a comfortable range of $400 million to $500 million [34] Question: Can you comment on infrastructure order delays? - Management indicated that delays were temporary and that shipments were expected to resume shortly [42] Question: What is driving the increase in SG&A costs? - Management explained that higher SG&A was due to litigation costs and specific project investments [44] Question: When will improvements from plant efficiency investments be seen? - Management anticipates seeing improvements in Q4 and significant benefits in the following year [49]

Third Quarter Earnings Safe Harbor Certain statements contained in this presentation contain forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in the presen ...