What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-03 · 130 added, 102 removed, 586 unchanged (28% of the section changed)

3 unchanged sentences

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

June 30, 2022 December 31, 2021

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

issued and outstanding – 22,710,427 as of September 30, 2022 and 22,767,052 as of December 31, 2021

Additional paid-in capital 134.4 130.6

10 unchanged sentences

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

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

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

2022 2021 2022 2021

5 unchanged sentences

Restructuring, impairment and other asset charges, net 0.1 0.3 4.5 1.8

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

Income from operations 1.8 6.3 3.2 26.1

Other income:

1 unchanged sentence

Interest income 0.3 0.1 0.7 0.4

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

Other expenses, net ( 0.3 ) ( 0.1 ) ( 0.8 ) ( 0.1 )

Income from operations before income taxes 1.2 6.1 1.5 25.8

Income tax provision (benefit) 0.7 ( 2.9 ) 0.8 —

Net income 0.5 9.0 0.7 25.8

Net loss attributable to noncontrolling interest 0.2 — 0.2 —

Net income attributable to controlling interest $ 0.7 $ 9.0 $ 0.9 $ 25.8

Per share data:

(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

Earnings per common share - Basic $ 0.03 $ 0.40 $ 0.04 $ 1.14

Earnings per common share - Diluted $ 0.03 $ 0.39 $ 0.04 $ 1.13

Weighted average shares outstanding - Basic 22,837,314 22,761,203 22,824,028 22,712,894

4 unchanged sentences

(In millions, unaudited)

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

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

2022 2021 2022 2021

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

Other comprehensive (loss) income:

Net income $ 0.5 $ 9.0 $ 0.7 $ 25.8

Other comprehensive loss:

Foreign currency translation adjustments ( 9.2 ) ( 4.5 ) ( 13.5 ) ( 1.2 )

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

Other comprehensive loss ( 9.2 ) ( 4.5 ) ( 13.5 ) ( 1.2 )

Comprehensive (loss) income ( 8.7 ) 4.5 ( 12.8 ) 24.6

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

Comprehensive loss attributable to noncontrolling interest 0.2 0.1 0.1 0.1

Comprehensive (loss) income attributable to controlling interest $ ( 8.5 ) $ 4.6 $ ( 12.7 ) $ 24.7

3 unchanged sentences

(In millions, unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

35 unchanged sentences

(In millions, unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

4 unchanged sentences

Withholding tax paid upon vesting of share-based compensation awards ( 1.8 ) ( 3.4 )

Repurchase of Company stock ( 6.1 ) —

Net cash used in financing activities ( 8.4 ) ( 11.4 )

16 unchanged sentences

(In millions, unaudited)

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

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

Balance, December 31, 2021 22,767,052 $ 4.5 $ 130.6 $ ( 32.4 ) $ ( 1.2 ) $ 549.3 $ 0.5 $ 651.3

16 unchanged sentences

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

Net income (loss) — — — — — 0.7 ( 0.2 ) 0.5

Other comprehensive loss — — — ( 9.2 ) — — — ( 9.2 )

Dividends ($ 0.12 per share)

— — — — — ( 2.8 ) — ( 2.8 )

Share-based compensation — — 2.0 — — — — 2.0

Issuance of common stock under incentive plan 6,343 — — — — — — —

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

Share repurchases ( 160,445 ) ( 0.1 ) — — — ( 6.0 ) — ( 6.1 )

Balance, September 30, 2022 22,710,427 $ 4.5 $ 134.4 $ ( 46.0 ) $ ( 1.1 ) $ 535.9 $ 0.4 $ 628.1

ASTEC INDUSTRIES, INC.

Consolidated Statements of Equity (Continued)

(In millions, unaudited)

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

Balance, December 31, 2020 22,611,976 4.5 127.8 ( 33.5 ) ( 1.5 ) 543.7 0.5 641.5

17 unchanged sentences

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

Net income — — — — — 9.0 — 9.0

Other comprehensive loss — — — ( 4.4 ) — — ( 0.1 ) ( 4.5 )

Dividends ($ 0.11 per share)

— — — — — ( 2.5 ) — ( 2.5 )

Share-based compensation — — 1.7 — — — — 1.7

Issuance of common stock under incentive plan 5,663 — ( 0.1 ) — — — — ( 0.1 )

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

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

Balance, September 30, 2021 22,762,989 $ 4.6 $ 129.2 $ ( 34.6 ) $ ( 1.2 ) $ 562.0 $ 0.4 $ 660.4

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

28 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 attributable to noncontrolling 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 loss 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 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.

financial position as of September 30, 2022 and December 31, 2021 and the cash flows for the nine months ended September 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.

25 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 and six months ended June 30, 2021 in this Form 10-Q.

To reflect the correction of the above errors, the Company is revising the previously issued consolidated financial statements for the three and nine months ended September 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.

18 unchanged sentences

Statement of Operations

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

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

2 unchanged sentences

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

(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

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 (benefit) ( 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:

(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

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

Statements of Comprehensive Income

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

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

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

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

1 unchanged sentence

Statement of Cash Flow

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(in millions) As Previously Reported Adjustment As Revised

2 unchanged sentences

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 )

Statement of Equity

As Previously Reported Adjustment As Revised

(in millions) As Previously Reported Adjustment As Revised

Balance, December 31, 2020

7 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

9 unchanged sentences

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.

Acquisition and integration costs of $ 0.2 million and $ 1.1 million were expensed as incurred during the three and nine months ended September 30, 2022, respectively, for this acquisition.

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

17 unchanged sentences

Inventories consist of the following:

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

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

Raw materials and parts $ 284.8 $ 216.1

21 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 June 30, 2022 and December 31, 2021 are Level 1 and Level 2 in the fair value hierarchy as defined above:

June 30, 2022

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

September 30, 2022

(in millions) Level 1 Level 2 Total

40 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 and six month periods ended June 30, 2022 and 2021 are as follows:

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

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

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

(in millions) 2022 2021 2022 2021

8 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 $ 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.

Total accrued loss reserves were $ 6.2 million and $ 5.8 million at September 30, 2022 and December 31, 2021 respectively, of which $ 4.1 million and $ 3.9 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets at September 30, 2022 and December 31, 2021, respectively.

For the three months ended September 30, 2022, the Company recorded an income tax expense of $ 0.7 million, reflecting a 58.3 % effective tax rate, compared to a $ 2.9 million income tax benefit for the three months ended September 30, 2021, reflecting a ( 47.5 )% effective tax rate.

The income tax expense for the three months ended September 30, 2022 as compared to the benefit in the same period in 2021 was primarily driven by prior year net discrete tax benefits that did not reoccur in the

current year related to the release of a valuation allowance associated with the Company's Brazilian subsidiary and a research and development ("R&D") credit partially offset by the tax effect of lower pre-tax earnings.

For the nine months ended September 30, 2022, the Company recorded an income tax provision of $ 0.8 million, reflecting a 53.3 % effective tax rate, compared to nominal expense for the nine months ended September 30, 2021.

The income tax expense for the nine months ended September 30, 2022 was higher compared to the same period of 2021 primarily driven by prior year net discrete tax benefits that did not reoccur in the current year related to the release of a valuation allowance associated with the Company's Brazilian subsidiary, a favorable net benefit from the R&D credit and the release of reserves for uncertain tax positions associated with Astec Mobile Machinery GmbH partially offset by the tax effect of lower pre-tax earnings.

The Company's recorded liability for uncertain tax positions was $ 11.3 million and $ 10.8 million as of September 30, 2022 and December 31, 2021, respectively.

The increase is the result of $ 0.5 million of incremental reserves associated with the 2022 research and development credit.

3 unchanged sentences

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 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.

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

These arrangements expire at various dates through June 2025.

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 $ 2.2 million and $ 2.4 million at September 30, 2022 and December 31, 2021, respectively.

These arrangements expire at various dates through August 2025.

Additionally, the Company is also contingently liable for 1.75 % of the unpaid balance, determined as of December 31 of the prior year (or approximately $ 0.2 million for 2022), on certain past customer equipment purchases that were financed by an outside finance company.

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 June 30, 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 $ 2.6 million as of June 30, 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 $ 2.5 million as of September 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 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 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 September 30, 2022.

As of September 30, 2022, the Company's foreign subsidiaries are contingently liable for a total of $ 1.4 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 $ 6.5 million as of September 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.

8 unchanged sentences

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 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

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

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

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

16 unchanged sentences

Total net sales $ 201.9 $ 111.8 $ 1.5 $ 315.2 $ 174.5 $ 92.4 $ — $ 266.9

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

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

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

17 unchanged sentences

Sales into major geographic regions were as follows:

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

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

(in millions) 2022 2021 2022 2021

4 unchanged sentences

Europe 9.1 7.4 22.4 31.8

South America 7.4 4.5 12.6 9.0

Brazil 7.7 8.0 18.5 17.1

Asia 3.1 2.4 7.1 3.7

South America 4.5 2.5 17.1 11.5

Mexico 4.2 1.3 9.1 11.7

Asia 1.5 5.5 8.6 9.2

Central America 3.9 1.6 7.5 3.4

2 unchanged sentences

Total net sales $ 315.2 $ 266.9 $ 924.6 $ 828.9

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.

As of September 30, 2022, the Company had contract assets of $ 4.5 million and contract liabilities, excluding customer deposits, of $ 4.5 million, including $ 3.0 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

4 unchanged sentences

Segment Operating Adjusted EBITDA, a non-GAAP financial measure, 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.

The Company's presentation of Segment Operating Adjusted EBITDA may not be comparable to similar measures used by other companies and are not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented.

The Company's presentation of Segment Operating Adjusted EBITDA may not be comparable to similar measures used by other companies and is not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented.

Prior periods have been revised to reflect both the segment composition change and the segment profit or loss metric noted above for comparability.

10 unchanged sentences

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 parent company and the captive insurance company provide support and corporate oversight for other 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.

2 unchanged sentences

Segment Information:

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

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

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

2 unchanged sentences

Segment Operating Adjusted EBITDA 17.6 13.1 ( 14.2 ) 16.5 18.3 10.7 ( 12.9 ) 16.1

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

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

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

3 unchanged sentences

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

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

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

(in millions) 2022 2021 2022 2021

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

Reconciliation to total consolidated net income attributable to controlling interest

Segment Operating Adjusted EBITDA $ 16.5 $ 16.1 $ 48.4 $ 57.5

2 unchanged sentences

Asset impairment ( 0.4 ) — ( 3.4 ) ( 0.2 )

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

Gain on sale of property and equipment, net 0.4 0.2 0.4 0.5

Transaction costs ( 0.5 ) — ( 1.9 ) —

1 unchanged sentence

Depreciation and amortization ( 7.3 ) ( 7.5 ) ( 20.9 ) ( 22.6 )

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

Income tax (provision) benefit ( 0.7 ) 2.9 ( 0.8 ) —

Net loss attributable to noncontrolling interest 0.2 — 0.2 —

(Elimination) recapture of intercompany profit ( 0.1 ) 0.3 — 0.6

Total consolidated net income attributable to controlling interest $ 0.7 $ 9.0 $ 0.9 $ 25.8

Strategic Transformation and Restructuring, Impairment and Other Asset Charges

6 unchanged sentences

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

An implementation of this scale is a major financial undertaking and will require substantial time and attention of management and key employees.

An implementation of this scale is a major financial undertaking and requires substantial time and attention of management and key employees.

In addition, beginning in the first quarter of 2022, a lean manufacturing initiative at one of the Company's largest sites was initiated and is expected to drive improvement in gross margin at that site.

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

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.

Costs incurred of $ 7.0 million and $ 18.7 million related to these strategic transformational initiatives in the three and nine months ended September 30, 2022, respectively, are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

Costs totaling $ 2.4 million and $ 7.7 million were incurred in the three and nine months ended September 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.

2 unchanged sentences

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,

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

(in millions) 2022 2021 2022 2021

12 unchanged sentences

Restructuring charges by segment are as follows:

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

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

(in millions) 2022 2021 2022 2021

3 unchanged sentences

Impairment charges by segment are as follows:

Three Months Ended

June 30, Six Months Ended

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

(in millions) 2022 2021 2022 2021

Infrastructure Solutions $ 0.4 $ — $ 2.5 $ —

Corporate 0.9 — 0.9 —

Materials Solutions — — — 0.2

Corporate and Other — — 0.9 —

Total impairment charges $ 0.4 $ — $ 3.4 $ 0.2

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

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

Net gains on sale of property and equipment by segment are as follows:

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

(in millions) 2022 2021 2022 2021

2 unchanged sentences

Total gain on sale of property and equipment, net $ ( 0.4 ) $ ( 0.2 ) $ ( 0.4 ) $ ( 0.5 )

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

Restructuring charges accrued, but not paid, were $ 0.2 million and $ 1.2 million as of September 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 $ 0.6 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.

In conjunction with this action, the Company recorded $ 0.1 million and $ 1.1 million of restructuring related charges during the three and nine months ended September 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.

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.

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

Additional restructuring costs of $ 0.1 million and $ 0.7 million were incurred during the three and nine months ended September 30, 2022, respectively.

Enid's land and building assets totaling $ 5.1 million were included in "Assets held for sale" in the Consolidated Balance Sheets as of December 31, 2021.

An impairment charge of $ 0.4 million was incurred during the third quarter of 2022 to record these assets at fair value less estimated costs to sell, which reduced the balance recorded at September 30, 2022 to $ 4.7 million.

This property continues to be actively marketed for sale.

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

3 unchanged sentences

The Mequon facility ceased production operations in August 2020.

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.

Charges totaling $ 0.6 million were incurred during the nine months ended September 30, 2021.

During the second quarter of 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.

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 second quarter of 2022.

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.

Performance stock units, which are considered contingently issuable, are considered dilutive when the related performance criterion has been met.

The following table sets forth a reconciliation of the number of shares used in the computation of basic and diluted (loss) earnings per common share:

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

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 September 30, Nine Months Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Denominator for diluted earnings per common share 22,916,316 22,913,563 22,932,206 22,922,930

Antidilutive restricted stock units excluded from the calculation of diluted earnings per share 124,229 — 32,218 52,041

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