# Astec Industries Inc: Form 10-Q for the period ended Jun 30, 2025

- Company: [Astec Industries Inc](/companies/aste.md) (CIK 792987)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:16 ET
- Period: 2025-06-30
- Accession: 0000792987-25-000047
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/792987/000079298725000047/aste-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/792987/000079298725000047/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $330.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $659.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $242.0m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $479.0m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $88.3m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $180.7m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $67.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $138.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $21.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $41.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $2.1m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $4.1m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $5.8m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $11.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $16.7m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $31.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.72 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.35 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.73 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.36 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 23,074,780 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 23,025,924 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $33.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $7.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2025-01-01 to 2025-06-30 | $5.9m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-06-30 | $88.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $746.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $1.07bn | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $274.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $390.5m | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $2.4m | us-gaap:LongTermDebtNoncurrent |
| Short-term borrowings | at 2025-06-30 | $11.8m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-06-30 | $674.9m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,118 characters.

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 June 30, 2025 as compared to the same period of the prior year include the following:

- Net sales were $330.3 million, a decrease of 4.4%
- Gross profit was $88.3 million, an increase of 8.6%
- Income from operations was $21.4 million, an increase of 300.0%
- Net income attributable to Astec was $16.7 million, an increase of 219.3%
- Diluted earnings per share was $0.72, an increase of 218.0%
- Backlog was $380.9 million, a decrease of 28.3%

### Business Conditions and Trends

*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 implementation costs anticipated to range from $180 to $200 million. Through the second quarter of 2025, we have incurred total implementation costs of approximately $143 million.

See Note 11, 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 remained elevated during the second quarter 2025. We anticipate that steel prices will remain at elevated levels in conjunction with ongoing tariff actions, stagnant demand growth, domestic reshoring activities and a global focus on construction projects.

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 2025.

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 second quarter of 2025 were $330.3 million compared to $345.5 million for the second quarter of 2024, a decrease of $15.2 million, or 4.4%. The decrease in net sales was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased equipment sales of $19.5 million, partially offset by increases in parts and component sales $2.6 million and service and equipment installation revenue of $0.8 million. Sales reported by our foreign subsidiaries in U.S. dollars for the second quarter of 2025 would have been $0.7 million higher had second quarter 2025 foreign exchange rates been the same as second quarter 2024 rates.

Net sales for the first six months of 2025 were $659.7 million compared to $654.7 million for the first six months of 2024, an increase of $5.0 million, or 0.8%. The increase in net sales was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated increases in (i) used equipment sales of $2.2 million, (ii) service and equipment installation revenue of $2.0 million, (iii) freight revenue of $1.5 million and (iv) equipment sales of $0.9 million. These increases were partially offset by a decrease in parts and component sales of $1.9 million. Sales reported by our foreign subsidiaries in U.S. dollars for the first six months of 2025 would have been $2.3 million higher had the first six months of 2025 foreign exchange rates been the same as the first six months of 2024 rates.

Domestic sales for the second quarter of 2025 were $262.0 million, or 79.3% of consolidated net sales, compared to $272.1 million, or 78.8% of consolidated net sales, for the second quarter of 2024, a decrease of $10.1 million, or 3.7%. Domestic sales decreased primarily due to lower equipment sales of $16.9 million partially offset by higher parts and component sales of $4.6 million and service and equipment installation revenue of $1.2 million.

Domestic sales for the first six months of 2025 were $535.8 million, or 81.2% of consolidated net sales, compared to $515.3 million, or 78.7% of consolidated net sales, for the first six months of 2024, an increase of $20.5 million, or 4.0%. Domestic sales increased primarily due to higher (i) equipment sales of $11.5 million, (ii) parts and component sales of $2.8 million, (iii) service and equipment installation revenue of $2.2 million, (iv) used equipment sales of $2.2 million and (v) freight revenue of $1.5 million.

International sales for the second quarter of 2025 were $68.3 million, or 20.7% of consolidated net sales, compared to $73.4 million, or 21.2% of consolidated net sales, for the second quarter of 2024, a decrease of $5.1 million, or 6.9%. International sales decreased primarily due to lower equipment sales of $2.6 million and parts and component sales of $2.0 million.

International sales for the first six months of 2025 were $123.9 million, or 18.8% of consolidated net sales, compared to $139.4 million, or 21.3% of consolidated net sales, for the first six months of 2024, a decrease of $15.5 million, or 11.1%. International sales decreased primarily due to lower equipment sales of $10.6 million and parts and component sales of $4.7 million.

### Gross Profit

Gross profit for the second quarter of 2025 was $88.3 million, or 26.7% of net sales, as compared to $81.3 million, or 23.5% of net sales, for the second quarter of 2024, an increase of $7.0 million, or 8.6%. The increase in gross profit was primarily driven by (i) the impact of net favorable pricing partially offset by net unfavorable volume and mix of $5.9 million, (ii) the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $3.0 million and (iii) net favorable inventory adjustments of $1.6 million. These increases were partially offset by manufacturing inefficiencies of $1.9 million and higher warranty program costs of $1.7 million.

Gross profit for the first six months of 2025 was $180.7 million, or 27.4% of net sales, as compared to $158.2 million, or 24.2% of net sales, for the first six months of 2024, an increase of $22.5 million, or 14.2%. The increase in gross profit was primarily driven by (i) the impact of net favorable pricing partially offset by net unfavorable volume and mix of $21.9 million, (ii) the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $3.1 million and (iii) manufacturing efficiencies of $1.7 million. These increases were partially offset by higher warranty program costs of $3.7 million.

### Selling, General and Administrative Expenses

Selling, general and administrative expenses were $67.0 million or 20.3% of net sales, for the second quarter of 2025, compared to $71.1 million, or 20.6% of net sales, for the second quarter of 2024, a decrease of $4.1 million, or 5.8%, primarily due to (i) decreased costs related to our strategic transformation program of $7.6 million, (ii) decreased professional service costs of $1.5 million, (iii) lower technology support costs of $1.1 million, (iv) lower bad debt expense of $1.0 million and (v) lower depreciation and amortization expense of $0.6 million. These decreases were partially offset by higher personnel-related costs of $7.2 million, largely driven by $4.1 million of employee incentive compensation costs, and transaction costs of $1.4 million attributable to the TerraSource acquisition completed in 2025.

Selling, general and administrative expenses were $138.9 million, or 21.1% of net sales, for the first six months of 2025, compared to $142.5 million, or 21.8% of net sales, for the first six months of 2024, a decrease of $3.6 million, or 2.5%, primarily due to (i) decreased costs related to our strategic transformation program of $7.0 million, (ii) decreased professional service costs of $2.4 million, (ii) decreased bad debt expense of $1.2 million and (iv) decreased depreciation and amortization expense of $1.1 million. These decreases were partially offset by increased personnel-related costs of $9.6 million, largely driven by $5.3 million of employee incentive compensation costs, and transaction costs of $2.2 million attributable to the TerraSource acquisition completed in 2025.

### Restructuring Charges and Other Asset Gains, net

Restructuring charges and the gain on sale of property and equipment, net for the three and six months ended June 30, 2025 and 2024 are presented below:

*(in millions)*

| Restructuring charges: | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Costs associated with exited operations – Enid | $— | $— | $— | $0.1 |
| Workforce reductions | — | 0.9 | — | 0.9 |
| Total restructuring related charges | — | 0.9 | — | 1.0 |
| **Gain on sale of property and equipment, net:** |  |  |  |  |
| Gain on sale of property and equipment, net | (0.1) | (0.2) | (0.1) | (1.1) |
| Total gain on sale of property and equipment, net | (0.1) | (0.2) | (0.1) | (1.1) |
| Restructuring and other asset gains, net | $(0.1) | $0.7 | $(0.1) | $(0.1) |

See Note 11, 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 $2.1 million and $4.1 million was incurred in the three and six months ended June 30, 2025, respectively, as compared to $3.1 million and $5.8 million in the three and six months ended June 30, 2024, respectively, primarily related to lower average outstanding borrowings on the 2022 Credit Facility combined with lower interest rates in the second quarter of 2025 as compared to the same period in 2024.

### Income Tax

Our income tax expense for the second quarter of 2025 was $5.8 million compared to $0.3 million for the second quarter of 2024. Our effective income tax rate was 25.7% for the second quarter of 2025 compared to (2.2)% for the second quarter of 2024. The income tax expense for the three months ended June 30, 2025 was higher compared to the same period in 2024 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.

Our income tax expense for the first six months of 2025 was $11.2 million compared to $1.7 million for the first six months of 2024. Our effective tax rate was 26.5% for the first six months of 2025 compared to (18.9)% for the first six months of 2024. The income tax expense for the six months ended June 30, 2025 was higher compared to the same period in 2024 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.

### Backlog

*(in millions, except percentage data)*

|  | June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Infrastructure Solutions | $256.1 | $368.6 | $(112.5) | (30.5)% |
| Materials Solutions | 124.7 | 162.5 | (37.8) | (23.3)% |
| Domestic Backlog | 308.1 | 417.2 | (109.1) | (26.2)% |
| International Backlog | 72.7 | 113.9 | (41.2) | (36.2)% |

The backlog of orders as of June 30, 2025 was $380.8 million compared to $531.1 million as of June 30, 2024, a decrease of $150.3 million, or 28.3%.

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:**

*(in millions, except percentage data)*

|  | Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Infrastructure Solutions | $204.6 | $221.4 | $(16.8) | (7.6)% |
| Materials Solutions | 125.7 | 124.1 | 1.6 | 1.3% |

### Infrastructure Solutions

Sales in this segment were $204.6 million for the second quarter of 2025 compared to $221.4 million for the same period in 2024, a decrease of $16.8 million, or 7.6%. The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased equipment sales of $23.6 million partially offset by increases in parts and component sales of $4.8 million and service and equipment installation revenue of $1.4 million.

Domestic sales for the Infrastructure Solutions segment decreased $20.7 million, or 10.0%, for the second quarter of 2025 compared to the same period in 2024 primarily due to lower equipment sales of $28.0 million partially offset by higher parts and component sales of $5.5 million and service and equipment installation revenue of $1.2 million.

International sales for the Infrastructure Solutions segment increased $3.9 million, or 27.5%, for the second quarter of 2025 compared to the same period in 2024 primarily due to higher equipment sales of $4.4 million partially offset by lower parts and components sales of $0.7 million.

### Materials Solutions

Sales in this segment were $125.7 million for the second quarter of 2025 compared to $124.1 million for the same period in 2024, an increase of $1.6 million, or 1.3%. The increase was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated increased equipment sales of $4.1 million partially offset by decreases in parts and component sales of $2.2 million and service and equipment installation revenue of $0.6 million.

Domestic sales for the Materials Solutions segment increased by $10.6 million, or 16.3%, for the second quarter of 2025 compared to the same period in 2024, primarily due to higher equipment sales of $11.1 million partially offset by lower parts and component sales of $0.9 million.

International sales for the Materials Solutions segment decreased $9.0 million, or 15.2%, for the second quarter of 2025 compared to the same period in 2024 primarily due to lower (i) equipment sales of $7.0 million, (ii) parts and component sales $1.3 million and (iii) service and equipment installation revenue of $0.6 million.

**Segment Net Sales – Six Months Ended:**

*(in millions, except percentage data)*

|  | Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Infrastructure Solutions | $440.6 | $423.6 | $17.0 | 4.0% |
| Materials Solutions | 219.1 | 231.1 | (12.0) | (5.2)% |

### Infrastructure Solutions

Sales in this segment were $440.6 million for the first six months of 2025 compared to $423.6 million for the same period in 2024, an increase of $17.0 million, or 4.0%. The increase was primarily driven by favorable pricing that generated increases in (i) equipment sales of $8.5 million, (ii) service and equipment installation revenue of $2.4 million, (iii) freight revenue of $2.4 million, (iv) used equipment sales of $2.0 million and (v) parts and component sales of $1.5 million.

Domestic sales for the Infrastructure Solutions segment increased $15.1 million, or 3.8%, for the first six months of 2025 compared to the same period in 2024 primarily due to higher (i) equipment sales of $4.9 million, (ii) parts and component sales of $3.6 million, (iii) freight revenue of $2.4 million, (iv) service and equipment installation revenue of $2.1 million and (v) used equipment sales of $2.0 million.

International sales for the Infrastructure Solutions segment increased $1.9 million, or 6.2%, for the first six months of 2025 compared to the same period in 2024 primarily due to higher equipment sales of $3.6 million partially offset by lower parts and component sales of $2.1 million.

### Materials Solutions

Sales in this segment were $219.1 million for the first six months of 2025 compared to $231.1 million for the same period in 2024, a decrease of $12.0 million, or 5.2%. The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreases in equipment sales of $7.6 million and parts and component sales of $3.4 million.

Domestic sales for the Materials Solutions segment increased by $5.4 million, or 4.4%, for the first six months of 2025 compared to the same period in 2024, primarily due to higher equipment sales of $6.6 million.

International sales for the Materials Solutions segment decreased $17.4 million, or 16.0%, for the first six months of 2025 compared to the same period in 2024 primarily due to lower equipment sales of $14.2 million and parts and component sales of $2.6 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 10, 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:**

*(in millions, except percentage data)*

|  | Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Infrastructure Solutions | $32.2 | $27.2 | $5.0 | 18.4% |
| Materials Solutions | 14.2 | 10.2 | 4.0 | 39.2% |

### Infrastructure Solutions

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $32.2 million for the second quarter of 2025 compared to $27.2 million for the same period in 2024, an increase of $5.0 million, or 18.4%. The increase in Segment Operating Adjusted EBITDA was primarily driven by (i) the sales impact of favorable pricing partially offset by net unfavorable volume and mix that generated higher gross profit of $4.9 million, (ii) the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $2.0 million, (iii) lower technology support costs of $1.7 million, (iv) the impact of net favorable inventory adjustments of $1.6 million and (v) lower professional service costs of $1.2 million. These increases were partially offset by (i) higher quality-related costs of $3.3 million, (ii) higher personnel-related costs of $3.2 million, largely driven by $1.5 million of employee incentive compensation costs, and (iii) manufacturing inefficiencies of $0.8 million.

### Materials Solutions

Segment Operating Adjusted EBITDA for the Materials Solutions segment was $14.2 million for the second quarter of 2025 compared to $10.2 million for the same period in 2024, an increase of $4.0 million, or 39.2%. The increase in Segment Operating Adjusted EBITDA was primarily driven by (i) net foreign currency transaction gains of $2.1 million, (ii) lower quality-related costs of $1.2 million, (iii) the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $1.0 million and (iv) net favorable pricing partially offset by net unfavorable volume and mix that generated higher gross profit of $1.0 million. These increases were partially offset by higher personnel-related costs of $1.5 million, largely driven by $0.8 million of employee incentive compensation costs, and manufacturing inefficiencies of $1.2 million.

**Segment Operating Adjusted EBITDA – Six Months Ended:**

*(in millions, except percentage data)*

|  | Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Infrastructure Solutions | $75.1 | $52.8 | $22.3 | 42.2% |
| Materials Solutions | 19.4 | 15.5 | 3.9 | 25.2% |

### Infrastructure Solutions

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $75.1 million for the first six months of 2025 compared to $52.8 million for the same period in 2024, an increase of $22.3 million, or 42.2%. The increase in Segment Operating Adjusted EBITDA resulted primarily from (i) the sales impact of favorable pricing coupled with net favorable volume and mix that generated higher gross profit of $23.9 million, (ii) manufacturing efficiencies of $4.0 million, (iii) favorable changes in manufacturing input costs related to materials, labor and overhead of $1.7 million and (iv) lower professional service costs of $1.4 million. These increases were partially offset by (i) higher quality-related costs of $6.1 million, (ii) higher personnel-related costs of $4.5 million, partially driven by $1.8 million of employee incentive compensation costs, and (iii) net unfavorable inventory adjustments of $1.8 million.

### Materials Solutions

Segment Operating Adjusted EBITDA for the Materials Solutions segment was $19.4 million for the first six months of 2025 compared to $15.5 million for the same period in 2024, an increase of $3.9 million, or 25.2%. The increase in Segment Operating Adjusted EBITDA resulted primarily from (i) net favorable inventory adjustments of $1.9 million, (ii) net foreign currency transaction gains of $1.9 million, (iii) lower quality-related costs of $1.5 million and (iv) the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $1.4 million. These increases were partially offset by (i) manufacturing inefficiencies of $2.2 million, (ii) the net unfavorable impact of volume and mix partially offset by favorable pricing that generated lower gross profit of $2.0 million and (iii) higher personnel-related costs of $1.8 million, largely driven by $1.1 million of employee incentive compensation costs.

### 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 $12.7 million for the second quarter of 2025 compared to $9.8 million for the same period in 2024, an increase of $2.9 million, or 29.6%. The increase was primarily driven by higher personnel related costs of $2.4 million, largely driven by higher annual incentive compensation costs of $1.8 million, and transaction costs of $1.4 million attributable to the TerraSource acquisition completed in 2025.

Corporate and Other operations had net expenses of $25.6 million for the first six months of 2025 compared to $21.8 million for the first six months of 2024, an increase of $3.8 million, or 17.4%. The increase in expenses were primarily due to higher personnel related costs of $3.4 million, driven by higher annual incentive compensation costs of $2.5 million, and transaction costs of $2.2 million attributable to the TerraSource acquisition completed in 2025.

### 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 June 30, 2025, our total liquidity was $247.6 million, consisting of $87.8 million of cash and cash equivalents available for operating purposes and $159.8 million available for additional borrowings under the 2022 Credit Facility, to the extent our compliance with financial covenants permits such borrowings. Our foreign subsidiaries held $29.2 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 2025 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 December 19, 2022, we entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the "2022 Credit Agreement"). The 2022 Credit Agreement provided for (i) a revolving credit facility (consisting of revolving credit loans and swingline loans) and a letter of credit facility, in an aggregate amount of up to $250.0 million, (ii) an incremental credit facility in an aggregate amount not to exceed $125.0 million and (iii) a maturity date of December 19, 2027. The 2022 Credit Agreement contains certain financial covenants, including requirements related to our Consolidated Total Net Leverage Ratio and Consolidated Interest Coverage Ratio, each as defined in the agreement. Failure to satisfy these covenants could result in the accelerated repayment of our indebtedness. We were in compliance with all covenants of the 2022 Credit Facility as of June 30, 2025.

We had $85.0 million in outstanding borrowings under the 2022 Credit Facility as of June 30, 2025. Our outstanding letters of credit totaling $5.2 million decreased borrowing availability to $159.8 million under the revolving credit facility as of June 30, 2025.

On July 1, 2025, concurrently with the closing of the acquisition of TerraSource, 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 (collectively, the "2025 Credit Facilities"). In connection with the closing of the acquisition, we borrowed $350.0 million under the 2025 Credit Agreement to fund the acquisition, pay related fees and expenses as well as repay outstanding borrowings under our 2022 Credit Facility. Immediately after giving effect to such borrowings, we had $244.8 million of remaining available borrowings under the revolving credit facility portion of our 2025 Credit Agreement, to the extent our compliance with financial covenants permits such borrowings. We believe the 2025 Credit Agreement enhances our overall liquidity profile and positions us to support our long-term growth objectives.

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 June 30, 2025, open purchase obligations totaled $124.2 million, of which $117.1 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 six months ended June 30, 2025 and 2024, respectively:

*(in millions)*

|  | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by (used in) operating activities | $33.4 | $(36.1) |
| Net cash used in investing activities | (7.7) | (12.6) |
| Net cash (used in) provided by financing activities | (29.2) | 49.5 |
| Effect of exchange rates on cash | 1.4 | (0.8) |
| Decrease in cash, cash equivalents and restricted cash | (2.1) | — |
| Cash, cash equivalents and restricted cash, end of period | $88.7 | $63.2 |

### Net cash provided by (used in) operating activities

Our operating activities provided net cash of $33.4 million for the six months ended June 30, 2025 as compared to a net use of $36.1 million for the six months ended June 30, 2024. This increase is primarily due to lower net cash usages for our operating assets and liabilities of $39.8 million coupled with increased cash inflows from net income reduced by non-cash charges of $29.8 million. The decreased net cash usage for our operating assets and liabilities were mainly driven the timing impacts of (i) collections on trade and other receivables of $78.7 million, (ii) payments of trade accounts payables of $21.9 million and (iii) lower employee-related payments of $11.5 million. The decreased net cash usage was partially offset by (i) decreased customer deposits of $26.7 million associated with lower backlog, (ii) the timing impacts for accrued liabilities of $22.3 million and (iii) the timing of inventory purchases of $20.4 million.

### Net cash used in investing activities

Net cash used in investing activities was $7.7 million during the six months ended June 30, 2025 as compared to $12.6 million during the six months ended June 30, 2024, primarily due to decreased capital expenditures of $5.6 million.

### Net cash (used in) provided by financing activities

Our financing activities used net cash of $29.2 million during the six months ended June 30, 2025 as compared to providing net cash of $49.5 million during the six months ended June 30, 2024, primarily due to net debt repayments in 2025 as compared to net borrowings in 2024.

### Dividends

We paid quarterly dividends of $0.13 per common share to shareholders in the second quarter of both 2025 and 2024.

### Financial Condition

Our total current assets increased to $746.0 million as of June 30, 2025 from $722.8 million as of December 31, 2024, an increase of $23.2 million, or 3.2%, due primarily to increases in inventories of $26.1 million and prepaid and refundable income taxes of $6.4 million. These increases were partially offset by decreases in trade and other receivables of $7.3 million and cash, cash equivalents and restricted cash of $2.1 million.

Our total current liabilities increased to $274.8 million as of June 30, 2025 from $271.7 million as of December 31, 2024, an increase of 1.1%, due primarily to increases in accounts payables of $9.9 million and accrued product warranty of $2.8 million. These increases were partially offset by decreases in customer deposits of $7.1 million and short term debt of $1.5 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.

## Market risk

As filed, 387 characters.

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.

## Controls and procedures

As filed, 2,562 characters.

### 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 June 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 June 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 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.

## Risk factors

As filed, 8,557 characters.

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, 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 this Quarterly Report on Form 10-Q 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.

***We may fail to realize all of the anticipated benefits of the acquisition of TerraSource Holdings, LLC ("TerraSource") or those benefits may take longer to realize than expected. We may also encounter significant difficulties in integrating the TerraSource business. Our results of operations going forward may differ materially from any pro forma financial data provided.***

On July 1, 2025 we completed our previously announced acquisition of TerraSource for $245.0 million. The success of the acquisition will depend, in large part, on our ability to successfully combine and integrate the acquired business and realize the anticipated benefits, including synergies, cost savings, innovation opportunities and operational efficiencies from the acquisition.

The integration of the acquired business is a complex, costly and time-consuming process and may result in material challenges, including, without limitation:

- difficulties in retaining current customers, suppliers and strategic partners and developing new business relationships;
- challenges in retaining and assimilating key personnel;
- coordinating geographically overlapping organizations;
- unanticipated issues in integrating information technology, communications and other operations and systems;
- diversion of management's attention to integration matters;
- difficulties in achieving anticipated synergies, business opportunities and growth prospects from the TerraSource acquisition;
- difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures;
- difficulties in managing the expanded operations of a significantly larger and more complex company;
- the impact of potential liabilities the Company may be inheriting from TerraSource;
- difficulty addressing possible differences in corporate culture and management philosophies;
- a potential deterioration of the Company's credit ratings; and
- unforeseen or unexpected expenses or delays associated with the integration.

Many of these factors are outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could adversely affect our business, financial condition and results of operations and result in us becoming subject to litigation. In addition, even if the TerraSource business is integrated successfully, the full anticipated benefits of the acquisition of TerraSource may not be realized, including the synergies, cost savings or sales or growth opportunities that are anticipated. These benefits may not be achieved within the anticipated time frame, or at all. Further, additional unanticipated costs may be incurred in the integration process. All of these factors could cause reductions in our earnings per share, decrease or delay the expected accretive effect of TerraSource and negatively impact the price of shares of our common stock. As a result, it cannot be assured that the acquisition of TerraSource will result in the realization of the full anticipated benefits.

Additionally, in connection with the TerraSource acquisition, any unaudited pro forma financial data that may be provided is not necessarily indicative of what our actual financial position or results of operations may be. Any unaudited pro forma financial data will be derived from our audited and unaudited financial statements and TerraSource’s audited and unaudited financial statements and will reflect certain assumptions and adjustments. The assumptions used in preparing unaudited pro forma financial data may not prove to be accurate, and other factors may adversely affect our financial condition or results of operations.

***Our existing and future levels of indebtedness could adversely affect our financial health, our ability to obtain financing in the future, our ability to react to changes in our business and our ability to fulfill our obligations under such indebtedness.***

On July 1, 2025 and simultaneously with the consummation of the acquisition of TerraSource, we entered into a new Credit Agreement, by and among us, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto from time to time (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 (collectively, the "2025 Credit Facilities"). In connection with establishing the 2025 Credit Facilities, we (i) repaid all outstanding borrowings under our prior $250.0 million revolving credit facility pursuant to that certain Credit Agreement, dated as of December 19, 2022, between the Company and Wells Fargo Bank, National Association (the "2022 Credit Facility"), utilizing borrowings under the 2025 Credit Facilities, and (ii) terminated the 2022 Credit Facility.

As of July 1, 2025 and after giving effect to the completion of the acquisition of TerraSource and the borrowings under the 2025 Credit Facilities, we had outstanding principal indebtedness of $350.0 million and availability of $244.8 million under the 2025 Credit Facilities, subject to certain financial covenants. Our level of indebtedness could:

- make it more difficult to satisfy our obligations with respect to our other indebtedness, resulting in possible defaults on and acceleration of such indebtedness;
- require us to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness, thereby reducing the availability of such cash flows to fund working capital, acquisitions, capital expenditures and other general corporate purposes;
- limit our ability to obtain additional financing for working capital, acquisitions, capital expenditures, debt service requirements and other general corporate purposes;
- limit our ability to refinance indebtedness or cause the associated costs of such refinancing to increase;
- increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations (because a portion of our borrowings are at variable rates of interest); and
- place us at a competitive disadvantage compared to other companies with proportionately less debt or comparable debt at more favorable interest rates who, as a result, may be better positioned to withstand economic downturns.

Any of the foregoing impacts of our level of indebtedness could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, our future access to debt capital markets to finance existing debt obligations or to obtain capital to finance growth could become restricted due to a variety of factors, including a deterioration of our performance or financial condition, overall industry prospects or changes in debt capital markets or the general economy. The inability to access credit markets on acceptable terms, if at all, could have a material adverse effect on our financial condition and ability to fund future growth.

Additionally, our debt instruments include certain affirmative and negative covenants that require us to comply with certain financial covenants and impose restrictions on our financial and business operations, including limitations on liens, indebtedness, fundamental changes and changes in the nature of our business. A failure to comply with the covenants contained in our debt instruments could result in an event of default or an acceleration of debt under our debt instruments.

Filed Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000792987-25-000047. Last ingested by Listed: Nov 5, 2026, 18:02 ET. No prices; not investment advice.