What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-03 compared with 2022-05-05 · 209 added, 200 removed, 479 unchanged (46% of the section changed)

3 unchanged sentences

(In millions, except share and per share data, unaudited)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Current assets:

34 unchanged sentences

Common stock – authorized 40,000,000 shares of $ 0.20 par value;

issued and outstanding – 22,837,047 as of March 31, 2022 and 22,767,052 as of December 31, 2021

issued and outstanding – 22,864,529 as of June 30, 2022 and 22,767,052 as of December 31, 2021

Additional paid-in capital 132.6 130.6

10 unchanged sentences

(In millions, except share and per share data, unaudited)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Net sales $ 318.2 $ 277.6 $ 609.4 $ 562.0

4 unchanged sentences

Restructuring, impairment and other asset charges, net 3.4 0.8 4.4 1.5

Income from operations 5.4 9.5

(Loss) income from operations ( 4.0 ) 10.3 1.4 19.8

Other income:

1 unchanged sentence

Interest income 0.2 0.2 0.4 0.3

Other expenses, net ( 0.2 ) ( 0.1 )

Income from operations before income taxes 5.0 9.3

Income tax provision 0.9 0.8

Net income 4.1 8.5

Net (income) loss attributable to non-controlling interest — —

Net income attributable to controlling interest $ 4.1 $ 8.5

Other (expenses) income, net ( 0.3 ) 0.1 ( 0.5 ) —

(Loss) income from operations before income taxes ( 4.7 ) 10.4 0.3 19.7

Income tax (benefit) provision ( 0.8 ) 2.1 0.1 2.9

Net (loss) income ( 3.9 ) 8.3 0.2 16.8

Net income attributable to noncontrolling interest — — — —

Net (loss) income attributable to controlling interest $ ( 3.9 ) $ 8.3 $ 0.2 $ 16.8

Per share data:

Earnings per common share - Basic $ 0.18 $ 0.38

Earnings per common share - Diluted $ 0.18 $ 0.37

(Loss) earnings per common share - Basic $ ( 0.17 ) $ 0.36 $ 0.01 $ 0.74

(Loss) earnings per common share - Diluted $ ( 0.17 ) $ 0.36 $ 0.01 $ 0.73

Weighted average shares outstanding - Basic 22,850,515 22,742,162 22,816,684 22,688,339

2 unchanged sentences

ASTEC INDUSTRIES, INC.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive (Loss) Income

(In millions, unaudited)

Three Months Ended March 31,

Net income $ 4.1 $ 8.5

Other comprehensive income (loss):

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Net (loss) income $ ( 3.9 ) $ 8.3 $ 0.2 $ 16.8

Other comprehensive (loss) income:

Foreign currency translation adjustments ( 8.5 ) 4.1 ( 4.3 ) 3.3

Other comprehensive income (loss) 4.2 ( 0.8 )

Comprehensive income 8.3 7.7

Comprehensive (income) loss attributable to noncontrolling interest ( 0.1 ) 0.1

Comprehensive income attributable to controlling interest $ 8.2 $ 7.8

Other comprehensive (loss) income ( 8.5 ) 4.1 ( 4.3 ) 3.3

Comprehensive (loss) income ( 12.4 ) 12.4 ( 4.1 ) 20.1

Comprehensive loss (income) attributable to noncontrolling interest — 0.1 ( 0.1 ) —

Comprehensive (loss) income attributable to controlling interest $ ( 12.4 ) $ 12.5 $ ( 4.2 ) $ 20.1

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(In millions, unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

8 unchanged sentences

Gain on disposition of property and equipment — ( 0.3 )

Asset impairment charges, net 3.0 0.2

Distributions to deferred compensation programs' participants ( 0.4 ) ( 1.1 )

Change in operating assets and liabilities, excluding the effects of acquisitions:

Sale (purchase) of trading securities, net 0.6 ( 1.4 )

Purchase of trading securities, net ( 0.5 ) ( 3.1 )

Receivables and other contract assets ( 21.5 ) ( 32.5 )

21 unchanged sentences

(In millions, unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

Payment of dividends ( 5.5 ) ( 5.0 )

Borrowings under bank loans 5.4 2.0

Repayment of bank loans ( 3.6 ) ( 2.3 )

Proceeds from borrowings on credit facility and bank loans 28.5 2.3

Repayments of borrowings on credit facility and bank loans ( 25.3 ) ( 2.7 )

Sale of Company stock by deferred compensation programs, net 0.2 0.5

28 unchanged sentences

Balance, March 31, 2022 22,837,047 $ 4.6 $ 131.1 $ ( 28.3 ) $ ( 1.2 ) $ 550.6 $ 0.6 $ 657.4

Net loss — — — — — ( 3.9 ) — ( 3.9 )

Other comprehensive loss — — — ( 8.5 ) — — — ( 8.5 )

Dividends ($ 0.12 per share)

— — 0.1 — — ( 2.7 ) — ( 2.6 )

Share-based compensation — — 1.6 — — — — 1.6

Issuance of common stock under incentive plan 27,482 — — — — — — —

Withholding tax paid upon equity award vesting — — ( 0.3 ) — — — — ( 0.3 )

Deferred compensation programs' transactions, net — — 0.1 — 0.1 — — 0.2

Balance, June 30, 2022 22,864,529 $ 4.6 $ 132.6 $ ( 36.8 ) $ ( 1.1 ) $ 544.0 $ 0.6 $ 643.9

Common Stock Common Stock Amount Additional Paid-in-Capital Accumulated Other Comprehensive Loss Company Shares Held by SERP Retained Earnings Non-controlling Interest Total Equity

9 unchanged sentences

Balance, March 31, 2021 22,715,517 $ 4.5 $ 126.3 $ ( 34.2 ) $ ( 1.4 ) $ 549.7 $ 0.4 $ 645.3

Net income — — — — — 8.3 — 8.3

Other comprehensive income — — — 4.0 — — 0.1 4.1

Dividends ($ 0.11 per share)

— — — — — ( 2.5 ) — ( 2.5 )

Share-based compensation — — 1.5 — — — — 1.5

Issuance of common stock under incentive plan 41,809 0.1 — — — — — 0.1

Withholding tax paid upon equity award vesting — — ( 0.2 ) — — — — ( 0.2 )

Deferred compensation programs' transactions, net — — 0.2 — 0.1 — — 0.3

Balance, June 30, 2021 22,757,326 $ 4.6 $ 127.8 $ ( 30.2 ) $ ( 1.3 ) $ 555.5 $ 0.5 $ 656.9

The accompanying notes are an integral part of these unaudited consolidated financial statements.

15 unchanged sentences

and combustion control systems.

The Company operates in two reportable segments (plus Corporate) - Infrastructure Solutions and Materials Solutions.

The Company operates in two reportable segments (plus Corporate and Other) - Infrastructure Solutions and Materials Solutions.

The Company's two reportable business segments comprise sites based upon the nature of the products or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations.

The Corporate 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 for separate disclosure as an operating segment or inclusion in one of the other reporting segments.

The Corporate and Other category consists primarily of the parent company, Astec Insurance Company ("Astec Insurance" or the "captive"), a captive insurance company, and the controls and automation business, which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the other reporting segments.

Basis of Presentation

8 unchanged sentences

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 non-controlling interest" in the Consolidated Statements of Operations.

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 attributable to noncontrolling interest" in the Consolidated Statements of Operations.

The Company executed an agreement in February 2022 with the noncontrolling interest holder, which is undergoing a judicial reorganization in Brazil, to acquire their outstanding interest in full for R$ 10.0 M (approximately $ 2.0 million, subject to the effect of exchange rates).

11 unchanged sentences

Immaterial Error Correction, the Company identified certain immaterial errors during the first quarter of 2022 for which the prior period and all relevant footnotes to the consolidated financial statements in this Form 10-Q have been revised to reflect the corrected balances.

In the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive income (loss) for the three months ended March 31, 2022 and 2021, the financial

position as of March 31, 2022 and December 31, 2021 and the cash flows for the three months ended March 31, 2022 and 2021, and except as otherwise discussed herein, such adjustments consist only of those of a normal recurring nature.

In the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021, the financial

position as of June 30, 2022 and December 31, 2021 and the cash flows for the six months ended June 30, 2022 and 2021, 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.

5 unchanged sentences

Availability of government assistance has typically been limited.

The Company did not receive any government assistance in 2022.

The Company did not receive government assistance in 2022.

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers", which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606).

The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value.

The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company elected to early adopt this guidance on April 1, 2022.

The adoption of this new standard did not have a material impact on its financial position, results of operations, cash flows or disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

7 unchanged sentences

The Company intends to apply this guidance if modifications of its contracts that include LIBOR occur, which is not expected to have a material impact on the Company's consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805):

The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted.

The Company is evaluating the impact of adopting this guidance on future acquisitions and may elect to early adopt, but has not yet finalized that election.

Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact on the Company.

2 unchanged sentences

The Company assessed the materiality of these misstatements both quantitatively and qualitatively and determined the correction of these errors to be immaterial to the prior period consolidated financial statements taken as a whole.

To reflect the correction of the above errors, the Company is revising the previously issued consolidated financial statements for the three months ended March 31, 2021 in this Form 10-Q.

The Company is also disclosing the impact of the revisions on the previously filed unaudited consolidated financial statements for the three and six months ended June 30, 2021 and the three and nine months ended September 30, 2021 as well as the previously filed audited year ended periods as of December 31, 2021 and 2020 and the opening balance sheet equity impact for December 31, 2019.

To reflect the correction of the above errors, the Company is revising the previously issued consolidated financial statements for the three and six months ended June 30, 2021 in this Form 10-Q.

The Company is also disclosing the impact of the revisions on the previously filed audited Consolidated Balance Sheet as of December 31, 2021 and the opening balance sheet equity impact for December 31, 2020.

As a result, the Company has corrected the misstatements as disclosed in the following tables for all impacted financial statement line items in prior periods.

17 unchanged sentences

Statement of Operations

Three Months Ended March 31, 2021

(in millions) As Previously Reported Adjustment As Revised

Cost of sales $ 215.9 $ 0.3 $ 216.2

Gross profit 68.5 ( 0.3 ) 68.2

Income from operations 9.8 ( 0.3 ) 9.5

Income from operations before income taxes 9.6 ( 0.3 ) 9.3

Income tax provision 0.9 ( 0.1 ) 0.8

Net income 8.7 ( 0.2 ) 8.5

Net income attributable to controlling interest 8.7 ( 0.2 ) 8.5

Per share data:

Earnings per common share - Basic 0.38 — 0.38

Earnings per common share - Diluted 0.38 0.01 0.37

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021

3 unchanged sentences

Gross profit 67.0 ( 0.9 ) 66.1 135.5 ( 1.2 ) 134.3

Income from operations 11.2 ( 0.9 ) 10.3 21.0 ( 1.2 ) 19.8

Income from operations before income taxes 11.3 ( 0.9 ) 10.4 20.9 ( 1.2 ) 19.7

Income tax provision 2.3 ( 0.2 ) 2.1 3.2 ( 0.3 ) 2.9

Net income 9.0 ( 0.7 ) 8.3 17.7 ( 0.9 ) 16.8

Net income attributable to controlling interest 9.0 ( 0.7 ) 8.3 17.7 ( 0.9 ) 16.8

Per share data:

Earnings per common share - Basic 0.40 0.04 0.36 0.78 0.04 0.74

Earnings per common share - Diluted 0.39 0.03 0.36 0.77 0.04 0.73

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

(in millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised

Net sales $ 267.0 $ ( 0.1 ) $ 266.9 $ 829.4 $ ( 0.5 ) $ 828.9

Cost of sales 204.7 0.3 205.0 631.6 1.1 632.7

Gross profit 62.3 ( 0.4 ) 61.9 197.8 ( 1.6 ) 196.2

Income from operations 6.7 ( 0.4 ) 6.3 27.7 ( 1.6 ) 26.1

Income from operations before income taxes 6.5 ( 0.4 ) 6.1 27.4 ( 1.6 ) 25.8

Income tax provision ( 2.8 ) ( 0.1 ) ( 2.9 ) 0.4 ( 0.4 ) —

Net income 9.3 ( 0.3 ) 9.0 27.0 ( 1.2 ) 25.8

Net income attributable to controlling interest 9.3 ( 0.3 ) 9.0 27.0 ( 1.2 ) 25.8

Per share data:

Earnings per common share - Basic 0.41 0.01 0.40 1.19 0.05 1.14

Earnings per common share - Diluted 0.41 0.02 0.39 1.18 0.05 1.13

Year Ended December 31, 2021 Year Ended December 31, 2020

(in millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised

Net sales $ 1,097.2 $ ( 1.7 ) $ 1,095.5 $ 1,024.4 $ — $ 1,024.4

Cost of sales 845.5 1.0 846.5 784.3 1.2 785.5

Gross profit 251.7 ( 2.7 ) 249.0 240.1 ( 1.2 ) 238.9

Income from operations 22.1 ( 2.7 ) 19.4 43.0 ( 1.2 ) 41.8

Income from operations before income taxes 16.5 ( 2.7 ) 13.8 45.7 ( 1.2 ) 44.5

Income tax provision ( 1.4 ) ( 0.7 ) ( 2.1 ) ( 1.2 ) ( 0.3 ) ( 1.5 )

Net income 17.9 ( 2.0 ) 15.9 46.9 ( 0.9 ) 46.0

Net income attributable to controlling interest 17.8 ( 2.0 ) 15.8 46.9 ( 0.9 ) 46.0

(Loss) income from operations 11.2 ( 0.9 ) 10.3 21.0 ( 1.2 ) 19.8

(Loss) income from operations before income taxes 11.3 ( 0.9 ) 10.4 20.9 ( 1.2 ) 19.7

Income tax (benefit) provision 2.3 ( 0.2 ) 2.1 3.2 ( 0.3 ) 2.9

Net (loss) income 9.0 ( 0.7 ) 8.3 17.7 ( 0.9 ) 16.8

Net (loss) income attributable to controlling interest 9.0 ( 0.7 ) 8.3 17.7 ( 0.9 ) 16.8

Per share data:

Earnings per common share - Basic 0.78 0.08 0.70 2.08 0.04 2.04

Earnings per common share - Diluted 0.78 0.09 0.69 2.05 0.04 2.01

(Loss) earnings per common share - Basic 0.40 ( 0.04 ) 0.36 0.78 ( 0.04 ) 0.74

(Loss) earnings per common share - Diluted 0.39 ( 0.03 ) 0.36 0.77 ( 0.04 ) 0.73

Statements of Comprehensive Income

Three Months Ended March 31, 2021

(in millions) As Previously Reported Adjustment As Revised

Net income $ 8.7 $ ( 0.2 ) $ 8.5

Comprehensive income 7.9 ( 0.2 ) 7.7

Comprehensive income attributable to controlling interest 8.0 ( 0.2 ) 7.8

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021

(in millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised

Net income $ 9.0 $ ( 0.7 ) $ 8.3 $ 17.7 $ ( 0.9 ) $ 16.8

Comprehensive income 13.1 ( 0.7 ) 12.4 21.0 ( 0.9 ) 20.1

Comprehensive income attributable to controlling interest 13.2 ( 0.7 ) 12.5 21.0 ( 0.9 ) 20.1

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021

As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised

Net income $ 9.3 $ ( 0.3 ) $ 9.0 $ 27.0 $ ( 1.2 ) $ 25.8

Comprehensive income 4.8 ( 0.3 ) 4.5 25.8 ( 1.2 ) 24.6

Comprehensive income attributable to controlling interest 4.9 ( 0.3 ) 4.6 25.9 ( 1.2 ) 24.7

Year Ended December 31, 2021 Year Ended December 31, 2020

As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised

Net income $ 17.9 $ ( 2.0 ) $ 15.9 $ 46.9 $ ( 0.9 ) $ 46.0

Comprehensive income 18.9 ( 2.0 ) 16.9 45.2 ( 0.9 ) 44.3

Comprehensive income attributable to controlling interest 18.9 ( 2.0 ) 16.9 45.2 ( 0.9 ) 44.3

Net (loss) income $ 9.0 $ ( 0.7 ) $ 8.3 $ 17.7 $ ( 0.9 ) $ 16.8

Comprehensive (loss) income 13.1 ( 0.7 ) 12.4 21.0 ( 0.9 ) 20.1

Comprehensive (loss) income attributable to controlling interest 13.2 ( 0.7 ) 12.5 21.0 ( 0.9 ) 20.1

Statement of Cash Flow

Three Months Ended March 31, 2021

(in millions) As Previously Reported Adjustment As Revised

Net income $ 8.7 $ ( 0.2 ) $ 8.5

Inventories 5.0 0.3 5.3

Income taxes payable/prepaid 0.9 ( 0.1 ) 0.8

Six Months Ended June 30, 2021

4 unchanged sentences

Income taxes payable/prepaid ( 7.0 ) ( 0.3 ) ( 7.3 )

Nine Months Ended September 30, 2021

(in millions) As Previously Reported Adjustment As Revised

Net income $ 27.0 $ ( 1.2 ) $ 25.8

Receivables and other contract assets ( 31.3 ) 1.1 ( 30.2 )

Inventories ( 33.4 ) 1.1 ( 32.3 )

Other accrued liabilities 10.3 ( 0.6 ) 9.7

Income taxes payable/prepaid ( 5.7 ) ( 0.4 ) ( 6.1 )

Year Ended December 31, 2021 Year Ended December 31, 2020

As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised

Net income $ 17.9 $ ( 2.0 ) $ 15.9 $ 46.9 $ ( 0.9 ) $ 46.0

Receivables and other contract assets ( 30.8 ) 2.4 ( 28.4 ) 12.2 — 12.2

Inventories ( 53.8 ) 2.3 ( 51.5 ) 44.7 1.2 45.9

Accounts payable 30.8 ( 1.3 ) 29.5 ( 8.6 ) — ( 8.6 )

Other accrued liabilities ( 0.7 ) ( 0.7 ) ( 1.4 ) 9.8 — 9.8

Income taxes payable/prepaid ( 13.6 ) ( 0.7 ) ( 14.3 ) 16.0 ( 0.3 ) 15.7

Statement of Equity

3 unchanged sentences

Total Equity 643.0 ( 1.5 ) 641.5

Balance, December 31, 2020

Retained Earnings 545.2 ( 1.5 ) 543.7

Total Equity 643.0 ( 1.5 ) 641.5

Balance, March 31, 2021

4 unchanged sentences

Total Equity 659.3 ( 2.4 ) 656.9

Balance, September 30, 2021

Retained Earnings 564.7 ( 2.7 ) 562.0

Total Equity 663.1 ( 2.7 ) 660.4

Balance, December 31, 2021

1 unchanged sentence

Total Equity 654.8 ( 3.5 ) 651.3

MINDS Acquisition - The Company entered into a Share Purchase Agreement, dated as of March 22, 2022, by and between MINDS Automation Group, Inc., a leader in plant automation control systems and cloud-based data management in the asphalt industry in Canada.

The purchase price of $ 19.3 million was paid in cash.

The Company's preliminary allocation of the purchase price resulted in the recognition of $ 9.3 million of goodwill and $ 9.3 million of intangible assets primarily consisting of customer relationships ( 9 year life) and developed technology ( 7 year life).

Significant inputs and assumptions used in determining the fair values of these intangible assets include management's forecasts of future revenues, earnings and cash flows, a discount rate based on the median weighted average cost of capital of the Company and select market competitors, and proportion of intangible assets acquired in relation to tangible assets.

Goodwill acquired is attributable to future growth opportunities provided by the acquired intellectual capital and the ability to generate cross-selling synergies.

The acquisition provides the Company with a broader line of controls and automation products designed to deliver enhanced productivity through improved equipment performance.

Results of operations have been consolidated from the date of acquisition.

The goodwill is not expected to be deductible for income tax purposes.

Acquisition and integration costs of $ 0.4 million and $ 0.9 million were expensed as incurred during the three and six months ended June 30, 2022, respectively, for this acquisition.

These costs are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

The following table summarizes the preliminary allocations of the total purchase price:

(in millions) Amount

Trade receivables 2.7

Inventories 0.7

Prepaid expenses and other assets 0.4

Property and equipment 0.2

Intangible assets 9.3

Other long-term assets 0.5

Total assets acquired $ 24.6

Accounts payable ( 0.7 )

Accrued payroll and related liabilities ( 0.8 )

Other current liabilities ( 1.1 )

Deferred income tax liabilities ( 2.4 )

Other long-term liabilities ( 0.3 )

Total liabilities assumed ( 5.3 )

Total purchase price $ 19.3

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) March 31, 2022 December 31, 2021

(in millions) June 30, 2022 December 31, 2021

Raw materials and parts $ 268.9 $ 216.1

9 unchanged sentences

The SERP assets and related offsetting liability 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 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 and cash equivalents, 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.

9 unchanged sentences

Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

As indicated in the tables below, the Company has determined that all of its financial assets and liabilities as of March 31, 2022 and December 31, 2021 are Level 1 and Level 2 in the fair value hierarchy as defined above:

March 31, 2022

As indicated in the tables below, the Company has determined that all of its financial assets and liabilities as of June 30, 2022 and December 31, 2021 are Level 1 and Level 2 in the fair value hierarchy as defined above:

June 30, 2022

(in millions) Level 1 Level 2 Total

11 unchanged sentences

Other 2.1 0.7 2.8

Derivative financial instruments — 0.3 0.3

Total financial assets $ 15.1 $ 5.5 $ 20.6

Financial liabilities:

Derivative financial instruments $ — $ 0.3 $ 0.3

Deferred compensation programs' liabilities $ — $ 5.6 $ 5.6

24 unchanged sentences

The product warranty liability is primarily based on historical claim rates, nature of claims and the associated cost.

Changes in the Company's product warranty liability for the three month periods ended March 31, 2022 and 2021 are as follows:

Three Months Ended March 31,

Changes in the Company's product warranty liability for the three and six month periods ended June 30, 2022 and 2021 are as follows:

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2022 2021 2022 2021

2 unchanged sentences

Warranty liabilities settled ( 2.8 ) ( 2.6 ) ( 5.2 ) ( 4.7 )

Other ( 0.1 ) — ( 0.1 ) —

Reserve balance, end of the period $ 11.6 $ 10.5 $ 11.6 $ 10.5

3 unchanged sentences

Changes in assumptions, as well as changes in actual experience, could cause these estimates to change in the future.

Total accrued loss reserves were $ 5.7 million and $ 5.8 million at March 31, 2022 and December 31, 2021 respectively, of which $ 3.5 million and $ 3.9 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets at March 31, 2022 and December 31, 2021, respectively.

For the three months ended March 31, 2022, the Company recorded an income tax expense of $ 0.9 million, reflecting a 18.0 % effective tax rate, compared to a $ 0.8 million income tax expense for the three months ended March 31, 2021, reflecting a 8.6 % effective tax rate.

The income tax expense for three months ended March 31, 2022 was higher compared to the same period in 2021 primarily due to lower net discrete benefits from the vesting of employee shared-based compensation awards offset by an increased net benefit for foreign-derived income.

The Company's recorded liability for uncertain tax positions was $ 11.1 million and $ 10.8 million as of March 31, 2022 and December 31, 2021, respectively.

The increase is the result of $ 0.3 million of incremental reserves associated with a higher research and development credit for 2022.

The Company does not anticipate a significant change in unrecognized tax benefits

due to the expiration of relevant statutes of limitations and federal, state, and foreign tax audit resolutions over the next twelve months.

Total accrued loss reserves were $ 6.4 million and $ 5.8 million at June 30, 2022 and December 31, 2021 respectively, of which $ 4.2 million and $ 3.9 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets at June 30, 2022 and December 31, 2021, respectively.

For the three months ended June 30, 2022, the Company recorded an income tax benefit of $ 0.8 million, reflecting a 17.0 % effective tax rate, compared to a $ 2.1 million income tax provision for the three months ended June 30, 2021, reflecting a 20.2 % effective tax rate.

The income tax benefit for the three months ended June 30, 2022 as compared to expense in the same period in 2021 was primarily driven by lower income from operations and changes in the relative weighting of jurisdictional income and

loss reduced by the effect of a net discrete tax benefit in the prior year that did not recur in the current year related to the release of reserves for uncertain tax positions associated with Astec Mobile Machinery GmbH ("AMM") whose dissolution was completed during the second quarter of 2021.

For the six months ended June 30, 2022, the Company recorded an income tax provision of $ 0.1 million, reflecting a 33.3 % effective tax rate, compared to $ 2.9 million for the six months ended June 30, 2021, reflecting a 14.7 % effective tax rate.

The income tax expense for the six months ended June 30, 2022 was lower compared to the same period of 2021 primarily driven by lower earnings from operations and changes in the relative weighting of jurisdictional income and loss reduced by the effect of a release of reserves for uncertain tax positions associated with AMM in 2021 that did not recur in the current year and lower net discrete benefits from the vesting of employee shared-based compensation awards.

The Company's recorded liability for uncertain tax positions was $ 11.1 million and $ 10.8 million as of June 30, 2022 and December 31, 2021, respectively.

The increase is the result of $ 0.3 million of incremental reserves associated with the 2022 research and development credit.

The Company does not anticipate a significant change in unrecognized tax benefits due to the expiration of relevant statutes of limitations and federal, state, and foreign tax audit resolutions over the next twelve months.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves.

1 unchanged sentence

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 March 31, 2022, 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.

As of June 30, 2022, 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/or cash flows in the periods for which that determination is made.

1 unchanged sentence

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 $ 2.5 million and $ 2.4 million at March 31, 2022 and December 31, 2021, respectively.

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 $ 2.3 million and $ 2.4 million at June 30, 2022 and December 31, 2021, respectively.

These arrangements expire at various dates through June 2025.

1 unchanged sentence

The agreements provide that the Company will receive the lender's full security interest in the equipment financed if the Company is required to fulfill its contingent liability under these arrangements.

The Company has recorded a liability of $ 1.0 million and $ 1.1 million related to these guarantees which were included in "Other current liabilities" in the Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, respectively.

The Company reviews off-balance sheet guarantees individually and at the loss pool level based on one agreement.

Prior history is considered in regard to the Company having to perform on any off-balance sheet guarantees, as well as future projections of individual customer credit worthiness including consideration of the implications of COVID-19 in regard to assessing credit losses related to off-balance sheet guarantees.

In addition, the Company is contingently liable under letters of credit issued under its $ 150.0 million revolving credit facility (the "Credit Facility") totaling $ 2.5 million as of March 31, 2022.

In addition, the Company is contingently liable under letters of credit issued under its $ 150.0 million revolving credit facility (the "Credit Facility") totaling $ 2.6 million as of June 30, 2022.

The outstanding letters of credit expire at various dates through June 2023.

The maximum potential amount of future payments under letters of credit issued under the Credit Facility for which the Company could be liable is $ 30.0 million as of March 31, 2022.

As of March 31, 2022, the Company's foreign subsidiaries are contingently liable for a total of $ 2.5 million in letters of credit and bank guarantees securing performance and advance payments.

The maximum potential amount of future payments under these letters of credit and bank guarantees for which the Company could be liable is $ 7.9 million as of March 31, 2022.

The maximum potential amount of future payments under letters of credit issued under the Credit Facility for which the Company could be liable is $ 30.0 million as of June 30, 2022.

As of June 30, 2022, the Company's foreign subsidiaries are contingently liable for a total of $ 1.5 million in letters of credit and bank guarantees securing performance and advance payments.

The maximum potential amount of future payments under these letters of credit and bank guarantees for which the Company could be liable is $ 7.2 million as of June 30, 2022.

The Company and certain of its former executive officers were named as defendants in a putative shareholder class action lawsuit filed on February 1, 2019, as amended on August 26, 2019, in the United States District Court for the Eastern District of Tennessee.

The action was styled City of Taylor General Employees Retirement System v.

The action is styled City of Taylor General Employees Retirement System v.

Astec Industries, Inc., et al., Case No.

1:19-cv-24-CEA-CHS.

The complaint generally alleged that the defendants violated the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and that the individual defendants were control persons under Section 20(a) of the Exchange Act.

The complaint was filed on behalf of shareholders who purchased stock of the Company between July 26, 2016 and October 22, 2018 and sought monetary damages on behalf of the purported class.

The Company disputed these allegations and filed a motion to dismiss the lawsuit on October 25, 2019.

The complaint generally alleges that the defendants violated the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and that the individual defendants were control persons under Section 20(a) of the Exchange Act.

The complaint is filed on behalf of shareholders who purchased stock of the Company between July 26, 2016 and October 22, 2018 and seeks monetary damages on behalf of the purported class.

On October 25, 2019, the defendants filed a Motion to Dismiss.

On February 19, 2021, the Motion to Dismiss was granted with prejudice and judgment was entered for the defendants.

On March 19, 2021, plaintiff filed a Motion to Alter or Amend the Judgment and For Leave to File the Proposed Amended Complaint, which was denied on May 5, 2021.

On June 4, 2021, plaintiff filed a notice of appeal to the United States Court of Appeals for the Sixth Circuit.

On March 31, 2022, the United States Court of Appeals for the Sixth Circuit issued its opinion reversing the dismissal of the Company and one former executive officer, affirming the dismissal of certain other former executive officers and remanding the action to the United States District Court for the Eastern District of Tennessee for proceedings consistent with the opinion.

Plaintiff appealed the Motion to Dismiss and denial of its Motion to Alter or Amend the Judgment and For Leave to File the Proposed Amended Complaint to the United States Court of Appeals for the Sixth Circuit.

On March 31, 2022, the United States Court of Appeals for the Sixth Circuit issued an opinion reversing the dismissal of the Company and one former executive officer, affirming the dismissal of certain other former executive officers and remanding the action to the United States

District Court for the Eastern District of Tennessee for proceedings consistent with the opinion.

The Company's GEFCO subsidiary has been named a defendant in a lawsuit originally filed on August 16, 2018 with an amended complaint filed on January 25, 2019, in the United States District Court for the Western District of Oklahoma.

21 unchanged sentences

Revenue Recognition

The following tables disaggregate the Company's revenue by major source for the three month periods ended March 31, 2022 and 2021 (excluding intercompany sales):

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

(in millions) Infrastructure

Solutions Materials

Solutions Total Infrastructure

Solutions Materials

Solutions Total

The following tables disaggregate the Company's revenue by major source for the three and six month periods ended June 30, 2022 and 2021 (excluding intercompany sales):

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total

Net Sales-Domestic:

15 unchanged sentences

Total net sales $ 209.6 $ 107.4 $ 1.2 $ 318.2 $ 179.8 $ 97.8 $ — $ 277.6

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total

Net Sales-Domestic:

Equipment sales $ 209.3 $ 101.4 $ 0.1 $ 310.8 $ 181.6 $ 85.4 $ — $ 267.0

Parts and component sales 100.1 41.9 — 142.0 92.5 39.0 — 131.5

Service and equipment installation revenue 12.6 0.3 — 12.9 9.7 0.2 — 9.9

Used equipment sales 2.0 — — 2.0 5.7 0.7 — 6.4

Freight revenue 12.8 3.8 — 16.6 10.2 3.3 — 13.5

Other 0.2 ( 1.6 ) — ( 1.4 ) ( 0.4 ) ( 0.9 ) — ( 1.3 )

Total domestic revenue 337.0 145.8 0.1 482.9 299.3 127.7 — 427.0

Net Sales-International:

Equipment sales 43.6 32.8 0.8 77.2 56.5 33.8 — 90.3

Parts and component sales 23.3 19.8 0.1 43.2 21.8 15.9 — 37.7

Service and equipment installation revenue 1.8 1.2 0.2 3.2 1.8 0.8 — 2.6

Used equipment sales 0.2 0.6 — 0.8 0.1 1.2 — 1.3

Freight revenue 1.2 0.7 — 1.9 1.5 1.1 — 2.6

Other — 0.2 — 0.2 0.3 0.2 — 0.5

Total international revenue 70.1 55.3 1.1 126.5 82.0 53.0 — 135.0

Total net sales $ 407.1 $ 201.1 $ 1.2 $ 609.4 $ 381.3 $ 180.7 $ — $ 562.0

Sales into major geographic regions were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2022 2021 2022 2021

6 unchanged sentences

Brazil 7.0 4.9 10.8 9.1

Central America 2.6 1.2

Asia 3.1 2.4 7.1 3.7

Mexico 4.2 8.0 4.9 10.4

Central America 1.0 0.6 3.6 1.8

Other 0.9 1.5 2.4 1.8

1 unchanged sentence

Total net sales $ 318.2 $ 277.6 $ 609.4 $ 562.0

As of March 31, 2022, the Company had contract assets of $ 3.9 million and contract liabilities, excluding customer deposits, of $ 3.8 million, including $ 2.5 million of deferred revenue related to extended warranties.

As of December 31, 2021, the Company had contract assets of $ 3.2 million and contract liabilities, excluding customer deposits, of $ 5.6 million, including $ 2.7 million of deferred revenue related to extended warranties.

As of June 30, 2022, the Company had contract assets of $ 5.3 million and contract liabilities, excluding customer deposits, of $ 4.7 million, including $ 3.2 million of deferred revenue related to extended warranties.

As of December 31, 2021, the Company

had contract assets of $ 3.2 million and contract liabilities, excluding customer deposits, of $ 5.6 million, including $ 2.7 million of deferred revenue related to extended warranties.

Segment Information

16 unchanged sentences

The principal purchasers of aggregate processing equipment include distributors, highway and heavy equipment contractors, sand and gravel producers, recycle and crushing contractors, open mine operators, quarry operators, port and inland terminal authorities, power stations and foreign and domestic governmental agencies.

Corporate – The Corporate category consists primarily of the parent company and the Company's captive insurance company, Astec Insurance, which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the other reporting segments.

Corporate and Other – The Corporate and Other category consists primarily of the parent company, the Company's captive insurance company, Astec Insurance, and the controls and automation business, which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the other reporting segments.

The parent company and the captive insurance company provide support and corporate oversight for all of the sites.

The controls and automation business manufactures hardware and software products that are marketed independently as well as included in certain products of the Company's other segments.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

1 unchanged sentence

Segment Information:

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

(in millions) Infrastructure Solutions Materials Solutions Corporate Total Infrastructure Solutions Materials Solutions Corporate Total

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total

Revenues from external customers $ 209.6 $ 107.4 $ 1.2 $ 318.2 $ 179.8 $ 97.8 $ — $ 277.6

1 unchanged sentence

Segment Operating Adjusted EBITDA 15.9 9.5 ( 12.3 ) 13.1 16.5 15.9 ( 11.9 ) 20.5

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total

Revenues from external customers $ 407.1 $ 201.1 $ 1.2 $ 609.4 $ 381.3 $ 180.7 $ — $ 562.0

Intersegment sales 5.1 21.7 — 26.8 2.9 10.8 — 13.7

Segment Operating Adjusted EBITDA 32.3 21.7 ( 22.1 ) 31.9 42.7 25.6 ( 26.9 ) 41.4

A reconciliation of total segment profit to the Company's consolidated totals is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2022 2021 2022 2021

Reconciliation to total consolidated net income attributable to controlling interest

Reconciliation to total consolidated net (loss) income attributable to controlling interest

Segment Operating Adjusted EBITDA $ 13.1 $ 20.5 $ 31.9 $ 41.4

1 unchanged sentence

Facility closures and reduction in force ( 0.4 ) ( 0.8 ) ( 1.4 ) ( 1.6 )

Asset impairment ( 3.0 ) ( 0.2 ) ( 3.0 ) ( 0.2 )

Gain on sale of property, equipment and business, net — 0.2 — 0.3

2 unchanged sentences

Depreciation and amortization ( 6.9 ) ( 7.5 ) ( 13.6 ) ( 15.1 )

Income tax provision ( 0.9 ) ( 0.8 )

Total consolidated net income attributable to controlling interest $ 4.1 $ 8.5

Strategic Transformation and Restructuring and Other Asset Charges

Income tax benefit (provision) 0.8 ( 2.1 ) ( 0.1 ) ( 2.9 )

Recapture of intercompany profit 0.1 0.3 0.1 0.3

Total consolidated net (loss) income attributable to controlling interest $ ( 3.9 ) $ 8.3 $ 0.2 $ 16.8

Strategic Transformation and Restructuring, Impairment and Other Asset Charges

The Company's Simplify, Focus and Grow Strategic Transformation ("SFG") initiative, which began in 2019, generally includes facility rationalization, asset impairment, workforce reduction, the associated costs of organizational integration activities and strategic transformational initiatives.

As part the SFG initiative several strategic decisions have been made to divest of underperforming manufacturing sites or product lines, including to close certain of its subsidiaries, close and sell its manufacturing sites and relocate the product lines manufactured at each of these sites to other Company locations;

As part of the SFG initiative several strategic decisions have been made to divest of underperforming manufacturing sites or product lines, including to close certain subsidiaries, close and sell manufacturing sites and relocate the product lines manufactured at each of these sites to other Company locations;

exit the oil, gas and water well product lines;

and sell certain assets, which are included in "Restructuring, impairment and other asset charges, net" on the Company's Consolidated Statements of Operations.

In addition, the Company also has a multi-year phased implementation of a standardized enterprise resource planning ("ERP") system across the global organization underway, which will replace 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.

The Company also has a multi-year phased implementation of a standardized enterprise resource planning ("ERP") system across the global organization underway, which will replace 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.

This new ERP system will provide for standardized processes and integrated technology solutions that enable us to better leverage automation and process efficiency.

2 unchanged sentences

This improvement is intended to serve as the optimal blueprint for the Company's other manufacturing facilities.

Costs incurred of $ 5.3 million and $ 3.2 million related to these strategic transformational initiatives in the three months ended March 31, 2022 and March 31, 2021, respectively, are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

Costs incurred of $ 6.4 million and $ 11.7 million related to these strategic transformational initiatives in the three and six months ended June 30, 2022, respectively, are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

Costs totaling $ 2.1 million and $ 5.3 million were incurred in the three and six months ended June 30, 2021, respectively.

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.

1 unchanged sentence

The Company reports asset impairment charges and gains or losses on the sales of property and equipment collectively, with restructuring charges in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations to the extent they are experienced.

Restructuring and the net gain on sale of property and equipment are presented below:

Three Months Ended March 31,

Restructuring, asset impairment charges and the net gain on sale of property and equipment are presented below:

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2022 2021 2022 2021

4 unchanged sentences

Total restructuring related charges 0.4 0.8 1.4 1.6

Asset impairment charges:

Other impairment charges 3.0 0.2 3.0 0.2

Total asset impairment charges 3.0 0.2 3.0 0.2

Gain on sale of property and equipment, net:

3 unchanged sentences

Restructuring charges by segment are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2022 2021 2022 2021

2 unchanged sentences

Total restructuring related charges $ 0.4 $ 0.8 $ 1.4 $ 1.6

Impairment charges by segment are as follows:

Three Months Ended

June 30, Six Months Ended

(in millions) 2022 2021 2022 2021

Infrastructure Solutions $ 2.1 $ — $ 2.1 $ —

Corporate 0.9 — 0.9 —

Materials Solutions — 0.2 — 0.2

Total impairment charges $ 3.0 $ 0.2 $ 3.0 $ 0.2

The net gain on sale of property and equipment by segment are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2022 2021 2022 2021

Infrastructure Solutions $ — $ ( 0.1 ) $ — $ ( 0.2 )

Materials Solutions — ( 0.1 ) — ( 0.1 )

Total gain on sale of property and equipment, net $ — $ ( 0.2 ) $ — $ ( 0.3 )

Restructuring charges accrued, but not paid, were $ 0.4 million and $ 1.2 million as of March 31, 2022 and December 31, 2021, respectively.

Restructuring charges accrued, but not paid, were $ 0.6 million and $ 1.2 million as of June 30, 2022 and December 31, 2021, respectively.

In January 2021, the Company announced plans to close the Tacoma facility in order to simplify and consolidate operations.

1 unchanged sentence

The transfer of the manufacturing and marketing of Tacoma product lines to other facilities within the Infrastructure Solutions segment was completed during the first quarter of 2022.

In conjunction with this action, the Company recorded $ 0.8 million and $ 0.4 million of restructuring related charges during the three month periods ended March 31, 2022 and 2021, respectively, in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations.

The Company recorded the Tacoma facility's land, building and certain equipment

assets of $ 15.4 million, which are currently being marketed for sale, as held for sale at March 31, 2022 in its Consolidated Balance Sheets.

In late 2019, the oil and gas drilling product lines produced at the Enid, Oklahoma location were impaired and discontinued.

In conjunction with this action, the Company recorded $ 0.6 million and $ 1.0 million of restructuring related charges during the three and six months ended June 30, 2021, respectively, in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations.

Additional restructuring costs of $ 0.8 million were incurred during the three months ended March 31, 2022.

Enid's land and building assets totaling $ 5.1 million are included in "Assets held for sale" in the Consolidated Balance Sheets at March 31, 2022 and December 31, 2021.

In October 2020, the Company closed a transaction for the sale of water well assets of the Company's Enid, Oklahoma location, which included equipment, inventories and intangible assets.

The Company recorded the Tacoma facility's land, building and certain equipment assets of $ 15.4 million, which are currently being marketed for sale, as held for sale in its Consolidated Balance Sheets at June 30, 2022.

In late 2019, the oil and gas drilling product lines produced at the Enid, Oklahoma location ("Enid") were impaired and discontinued.

Additional restructuring costs of $ 0.4 million and $ 0.6 million were incurred during the three and six months ended June 30, 2022, respectively.

Enid's land and building assets totaling $ 5.1 million are included in "Assets held for sale" in the Consolidated Balance Sheets at June 30, 2022 and December 31, 2021.

In October 2020, the Company closed a transaction for the sale of Enid's water well assets, which included equipment, inventories and intangible assets.

The purchase price for this transaction was approximately $ 6.9 million, net of purchase price adjustments completed in January 2021 whereby the Company had an obligation to pay the buyer $ 1.1 million.

2 unchanged sentences

The Mequon facility ceased production operations in August 2020.

Charges primarily related to inventory relocation and integration activities of $ 0.4 million were incurred during the three months ended March 31, 2021.

Earnings Per Common Share

Basic earnings per common share is determined by dividing "Net income attributable to controlling interest" by the weighted average number of common shares outstanding during the reporting period.

Diluted 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 supplemental executive retirement plan, using the treasury stock method.

Charges totaling $ 0.2 million and $ 0.6 million were incurred during the three and six months ended June 30, 2021, respectively.

During the three months ended June 30, 2022, the Company determined that certain manufacturing equipment contracted to be constructed by a third-party vendor, which had been prepaid, would not be recovered.

Impairment charges of $ 2.1 million were recorded in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations during the three months ended June 30, 2022.

An additional $ 0.9 million of impairment charges were incurred related to abandoned in-process internally developed software that was determined to be impaired during the quarter.

(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 supplemental executive retirement plan, using the treasury stock method.

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 earnings per common share:

Three Months Ended March 31,

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 June 30, Six Months Ended June 30,

2022 2021 2022 2021

Denominator for basic earnings per common share 22,850,515 22,742,162 22,816,684 22,688,339

1 unchanged sentence

Denominator for diluted earnings per common share 22,850,515 22,917,957 22,923,868 22,905,270

Subsequent Event

In April 2022, the Company acquired Canada-headquartered MINDS Automation Group, Inc., a leader in plant automation control systems and cloud-based data management in the asphalt industry.

The total cash consideration payable to the selling shareholders was $ 18.2 million, subject to a customary purchase price adjustment for cash, indebtedness and net working capital and was funded from cash on hand.

The acquisition is not expected to be material to the Company's Consolidated Statements of Operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements