What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-02-28 · 185 added, 169 removed, 188 unchanged (65% of the section changed)

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Our products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface for both asphalt and concrete.

We also manufacture certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction and demolition industries and port and rail yard operators;

We also manufacture certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction, demolition, land clearing and recycling industries and port and rail yard operators;

industrial heat transfer equipment;

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construction, demolition, recycle and crushing contractors;

forestry and environmental recycling contractors;

mine and quarry operators;

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The distribution and sale of replacement parts is an integral part of our business.

COVID-19 Pandemic

The COVID-19 pandemic has caused significant disruptions to national and global economies and to our business.

While our businesses have generally remained operational throughout the pandemic, with temporary closures in the United Kingdom and South Africa early in the pandemic, we have been significantly affected by the contributory effects of the pandemic such as decreased demand for our products in 2020, material price increases, increased lead times from production materials, supplies and parts and labor shortages.

These trends continue to impact our business today and may continue to impact our business in the near-term.

We have also taken precautions to protect our employees and their families and our customers and suppliers from COVID-19 and continually monitor the markets in which we operate for the effects of COVID-19 and the related actions of governments and other authorities to contain COVID-19.

The COVID-19 pandemic may continue to negatively disrupt our business and results of operations in the future.

The ongoing impact of the COVID-19 pandemic on our operations and the markets we serve remains uncertain due to constantly evolving developments including, but not limited to, government directives, treatment availability and acceptance, vaccine mandates and the spread of new variants, such as the Delta and Omicron variants, and cannot be accurately predicted.

See Part I, Item 1A.

Risk Factors in this Annual Report on Form 10-K.

Corporate Strategic Objectives

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This transformation was focused on aligning our operations under the OneASTEC business model with the strategic pillars of Simplify, Focus and Grow.

As part of our strategic transformation, we have focused on optimizing our organizational structure and operations to execute our profitable growth strategy.

• Centralizing our organization into sites with common platforms and operating models supports organic sales growth as it is easier for our customers, partners, employees and shareholders to understand and interact with us.

• We are focused on productivity gains and cost reductions across our business through reducing complexity in our organization structure and plan to continue to leverage our global footprint consolidation actions to drive greater efficiencies across our operations while maintaining strong customer relationships.

• Efforts are directed toward product simplification through the development of a rationalized global product portfolio executed through manufacturing centers of excellence.

• We strive to optimize the supply chain through leveraging the size and scale of our global operations to improve lead times, lower logistics costs and introduce localized product support.

Since the inception of these initiatives, we have consolidated four sites and are currently in the process of consolidating our Tacoma site, which is expected to be completed during early 2022.

In addition, in late 2020 we launched a multi-year phased implementation of a standardized enterprise resource planning ("ERP") system across our global organization, which will replace much of our existing disparate core financial systems.

As part of our strategic transformation, we have focused on optimizing our organizational structure and operations to execute our profitable growth strategy by:

• Centralizing our organization into sites with common platforms and operating models that support organic sales growth to make it easier for our customers, partners, employees and shareholders to understand and interact with us.

• Focusing on productivity gains and cost reductions across our business through reducing complexity in our organization structure to drive greater efficiencies across our operations while maintaining strong customer relationships.

• Simplifying our product offerings through the development of a rationalized global product portfolio executed through manufacturing centers of excellence.

Since the inception of these initiatives, we have consolidated five sites, including our Tacoma site in the first quarter of 2022.

Additionally, we are in the process of a multi-year phased implementation of a standardized enterprise resource planning ("ERP") system across our global organization, which will replace much of our existing disparate core financial systems.

The upgraded ERP will initially convert our 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.

We believe enhanced efficiencies across the Astec organization will result from utilizing our OneASTEC business model to concentrate resources on excellence initiatives.

• We are focused on driving commercial excellence and providing a holistic set of solutions to strengthen our relationships with customers and maintain our market leadership positions.

• We intend to streamline our operational excellence processes through the implementation of lean principles in our operations and incorporate production systems that embed continuous improvement into the culture of our manufacturing processes.

• With aligned key performance indicators and incentives, we intend to enhance accountability across the business and drive a performance-based culture.

We are focused on growing sales and profits organically as well as selectively pursuing strategic acquisitions and partnerships within the "Rock to Road" value chain.

• Organic growth will be focused on reinvigorating innovation with a new product development approach that increases our vitality index over time.

• Through controls and automation as well as other technologies, we expect to leverage technology and digital connectivity to enhance the customer experience.

• We seek to identify, analyze and assess potential targets for strategic acquisitions and partnerships globally to establish a presence in attractive new markets, supplement our current product offerings or accelerate technologies or other enhancements that can be leveraged in our existing product portfolio.

Since the inception of our growth initiatives, we have completed three acquisitions.

This new ERP system will provide for standardized processes and integrated technology solutions that enable us to better leverage automation and process efficiency, transforming how we connect people, products and processes to operate as OneASTEC.

We have materially completed the ERP global design in 2022, launched the human capital resources module throughout our domestic sites in January 2023 and expect to convert the operations of one manufacturing site along with Corporate in 2023 to set the foundation before accelerating the implementation at additional manufacturing sites.

We believe enhanced efficiencies across the Astec organization will result from utilizing our OneASTEC business model to concentrate resources on excellence initiatives, including:

• Driving commercial excellence and providing a holistic set of solutions to strengthen our relationships with customers and dealers while maintaining our market leadership positions.

• Streamlining operational excellence processes through the implementation of lean principles in our operations and incorporate production systems that embed continuous improvement into the culture of our manufacturing processes.

• Aligning key performance metrics and incentives to enhance accountability across the business and drive a performance-based culture.

• Targeting recently completed acquisitions to ensure comprehensive integration of operations and realization of anticipated synergies to support sales and profit growth.

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The customer relationship and human capital resources components of our ERP implementation discussed above are anticipated to support the excellence initiatives of our OneASTEC business model.

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

We substantially completed the design efforts for this project during 2022.

We also began executing investments to acquire and install manufacturing equipment intended to drive increased efficiencies in our production processes.

We plan to continue these capital investments during 2023, which are anticipated to be completed by the end of the year.

Gross margin improvements are expected to be realized with the project completion in early to mid-2024.

This improvement is intended to serve as the optimal blueprint for our other manufacturing facilities.

We are focused on growing sales and profits organically as well as selectively pursuing strategic acquisitions and partnerships within the "Rock to Road" value chain, including by:

• Focusing on innovation with a new product development approach that increases our market competitiveness over time.

• Leveraging technology and digital connectivity to enhance the customer experience through controls and automation and other technologies.

• Identifying potential targets for strategic acquisitions and partnerships globally to establish a presence in attractive new markets, supplement our current product offerings or accelerate technologies or other enhancements that leverage our existing product portfolio.

• Strengthening our capabilities to deliver an enhanced aftermarket experience that best meets our customers' needs while creating scalable growth.

Since 2020, we have completed four acquisitions, strengthening our concrete production equipment and controls and automation offerings.

A further discussion of these acquisitions is included in Part II, Item 8.

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Business Segments

We operate manufacturing sites and sites that operate as sales offices for our manufacturing locations.

During the first quarter of 2020, we completed an internal reorganization from a decentralized management structure to a matrix organizational management structure with major directives and decisions being made at the segment and/or parent company level and, as a result, realigned our reportable segments moving from three to two reportable segments (plus Corporate) - Infrastructure Solutions and Materials Solutions.

Our 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 our parent company and Astec Insurance Company ("Astec Insurance"), 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.

We evaluate performance and allocate resources to our operating segments based on profit or loss from operations before United States ("U.S.") federal income taxes, state deferred taxes and corporate overhead and, thus, these costs are included in the Corporate category.

Amounts previously reported under the previous segment structure have been restated to conform to the new segment structure.

Additionally, in both internal and external communications, we have transitioned references to each individual site by a name associated with its location, as compared to previous references to the individual subsidiary company name.

We operate manufacturing sites and sites that operate as sales and service offices for our manufacturing locations.

Our two reportable business segments, Infrastructure Solutions and Materials Solutions, comprise sites based upon the nature of the products produced or services provided, 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 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.

We evaluate performance and allocate resources to our operating segments based on Segment Operating Adjusted EBITDA.

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 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 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.

Infrastructure Solutions Segment

The Infrastructure Solutions segment designs, engineers, manufactures and markets a complete line of asphalt plants, concrete plants and their related components and ancillary equipment as well as supplying other heavy equipment.

The Infrastructure Solutions segment was operated from the following sites in 2022 :

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Australia Brisbane, Australia EUG-Airport Rd Oregon, United States

Blair Nebraska, United States LatAm Santiago, Chile

Burlington Wisconsin, United States Parsons Kansas, United States

CHA-Jerome Ave Tennessee, United States St-Bruno Quebec, Canada

CHA-Manufacturers Rd Tennessee, United States Tacoma (1)

Washington, United States

CHA-Wilson Rd Tennessee, United States Thailand Bangkok, Thailand

1 In January 2021, management announced plans to close the Tacoma facility.

The Tacoma facility ceased manufacturing operations at the end of 2021.

The transfer of the manufacturing and marketing of the Tacoma product lines to other facilities within the Infrastructure Solutions segment is expected to be completed during early 2022.

Blair Nebraska, United States India Ahmedabad, India

Burlington Wisconsin, United States LatAm Santiago, Chile

CHA-Jerome Ave Tennessee, United States Parsons Kansas, United States

CHA-Manufacturers Rd Tennessee, United States St-Bruno Quebec, Canada

CHA-Wilson Rd Tennessee, United States

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The sites based in North America within the Infrastructure Solutions segment are primarily manufacturing operations while those located outside of North America generally market, service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of our manufacturing sites.

Our Thailand site is in the start-up phase of new sales operations.

Based on an internal review of our operations, beginning January 1, 2022, the India site, which was previously incorporated into the Materials Solutions segment, is reported in the Infrastructure Solutions segment while the Thailand site, which was previously included in the Infrastructure Solutions segment, is reported in the Materials Solutions segment.

Products and Services

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Our current generation of portable asphalt plants is marketed as the Six Pack and consists of six or more portable components designed to be easily transported from one construction site to another, thereby reducing relocation expenses and interruption of operations.

High plant portability is an industry innovation developed and successfully marketed by us.

High plant portability is an industry innovation that we have developed and successfully market.

The components in our asphalt mixing plants are fully automated and use both microprocessor-based and programmable logic control systems for efficient operation.

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We also build batch type asphalt plants and have developed specialized asphalt recycling equipment for use with our hot-mix asphalt plants.

Our new Versa Jet burner versatile platform is d eveloped for retrofit applications and has the capacity to fire at a range of rates.

The adaptable design is compatible with virtually all drum designs and can be installed with minimal modifications needed to asphalt mixing plants produced by us as well as our competitors.

In addition, we developed the patented water injection warm mix asphalt system, which allows the asphalt mix to be prepared and placed at lower temperatures than conventional systems and operates with a substantial reduction in emissions during paving and load-out.

We engineer and develop new products and product enhancements dedicated to improving customers' productivity and profitability.

Our products share environmentally conscious designs and are crafted from quality materials by an expert staff of dedicated professionals.

Our new National Type Evaluation Program Certified Self-Erect Storage Silo offers overnight storage capabilities with options that allow for longer-term storage.

The silo and drag share a common chassis and are erected together using hydraulic cylinders, alleviating the need for a crane to enable our customers to save set up time and costs.

In addition, the freshly redesigned versatile Astec Batch Tower offers a broad range of mixing capacity with varying volumes of hot bin storage and builds upon our legacy of delivering sound performance paired with exceptional technology.

We developed the patented water injection warm mix asphalt system, which allows the asphalt mix to be prepared and placed at lower temperatures than conventional systems and operates with a substantial reduction in emissions during paving and load-out.

Previous technologies for warm mix production rely on expensive additives, procedures and/or special asphalt cement delivery systems that significantly increase the cost per ton of mix.

Our multi-nozzle device eliminates the need for the expensive additives by mixing a small amount of water and asphalt cement together to create microscopic bubbles that reduce the viscosity of the liquid asphalt coating on the rock, thereby allowing the mix to be handled and worked at lower temperatures.

Sustainability is a key focus in our development considerations, and we are continuously exploring methods and practices that will contribute to sustainable infrastructure and a healthy environment for generations to come.

Our team is constantly working to find solutions to help our asphalt plant customers reduce the environmental impact of asphalt mixing operations in user-friendly and budget-conscious ways.

These innovations can be seen across our asphalt production equipment product line.

Among our many leading products that can enhance the sustainability of an asphalt mixing operation are the Double Barrel XHR, the warm mix system, low emissions burners in the Phoenix burner line, vent condensers for asphalt storage tanks and blue smoke system s.

During 2022, we joined The Road Forward, an industry-wide initiative of the National Asphalt Pavement Association, to engage, educate and empower the U.S.

asphalt community to produce and construct net zero carbon emission asphalt

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pavements by 2050.

We also joined the U.S.

Department of Energy's Better Plants program that offers support to leading U.S.

manufacturers in the form of technical advice, energy efficient training and data analyzation to help reduce energy consumption.

Asphalt continues to be one of the most recycled products in the United States and the use of reclaimed asphalt pavement ("RAP") continues to remain highly used in new pavement.

We continue to develop methods that make it feasible to produce quality asphalt mixes with up to 70% RAP content.

We are focused on producing equipment with the most advanced mix recycling technology in the industry.

More tons of reclaimed asphalt pavement ("RAP") are available than are currently being utilized due to restrictions in the amount of RAP allowed by various governmental agencies.

Our recycle technology is continuously being enhanced and is providing the science to alleviate the concerns driving such restrictions and to improve RAP utilization percentages in the asphalt industry.

Our latest system improvement, the RAP Pre-Dryer System, was successfully field prototyped in 2018 and is now available to the industry.

Many of our highly technical, sophisticated large asphalt plants, while ideally suited for the United States domestic market, are not as well suited in many international markets.

In 2019, we completed testing of our Vantage 140 portable asphalt plant designed specifically for the international market.

The Vantage design is based upon our proven Double Barrel drum mixer and has production capacity of 140 metric tons per hour and RAP mixing capabilities of 50%.

More tons of RAP are available than are currently being utilized due to restrictions in the amount of RAP allowed by various governmental agencies.

Our recycle technology, including the RAP Pre-Dryer System, is continuously being enhanced and is providing the science to alleviate the concerns driving such restrictions and to improve RAP utilization percentages in the asphalt industry.

Many of our highly technical, sophisticated large asphalt plants, while ideally suited for the North American market, are not as well suited in many international markets.

As such, we have designed single-load and single-chassis portable plants that are better suited for the international markets.

The Vantage 140 (the "Vantage") portable asphalt plant, which is based upon our proven Double Barrel drum mixer, has production capacity of 140 metric tons per hour and RAP mixing capabilities of 50%.

The Vantage also provides full-size plant features in a compact highly-portable configuration.

Additionally, we have expanded our mobile plant offering with the newly designed Ventura 140.

The Ventura is designed with a counter-flow drying drum that feeds an external coater and provides production rates up to 140 metric tons per hour of virgin mix and is used where recycled material is not available.

The Ventura 140SL portable asphalt plant is also focused on satisfying needs of the international market and introduces a smaller, more mobile plant design with single-load capability.

We have also developed the new, hybrid-powered FT4250 mobile impactor plant.

Hybrid power allows operators flexible power options using either line power or a genset that allows for reduced noise levels, no engine emissions and the ability to run indoors.

Additionally, the Ventura 140SL portable asphalt plant is also focused on satisfying needs of the international market and allows for a smaller, more mobile plant design with single-load capability.

Our pavers have been designed to minimize maintenance costs while exceeding road surface smoothness requirements.

Generally, our equipment can be used in tandem with each other or separately with equipment already owned by the customer.

Our RP-Series paver line has been updated with operator controls that provide improved functionality and a compact, modern feel.

All highway class asphalt pavers are now outfitted with an innovative digital control system and easy-to-understand touch screen interface.

These product updates deliver a balance of intuitive technology and simplified operation, providing the durability and serviceability our customers expect.

Our mobile, self-propelled material transfer vehicle ("Shuttle Buggy") allows continuous paving by separating truck unloading from the paving process while remixing the asphalt.

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By permitting continuous paving, the Shuttle Buggy allows the asphalt paver to produce a smoother road surface while reducing the time required to pave the road surface and the number of haul trucks required.

As a result of the pavement smoothness achieved with this machine, certain states now require the use of the Shuttle Buggy.

Studies using infrared technology have revealed problems caused by differential cooling of the hot-mix during hauling, but the Shuttle Buggy remixes the material to a uniform temperature and gradation, thus eliminating these problems.

The Shuttle Buggy includes the Guardian System that is designed to anticipate equipment maintenance needs resulting in more uptime reliability while also providing production and performance data as well as real-time location information to the owner.

The SB3000 model introduced to the market in 2020, incorporates features and technology to improve the user experience in terms of improved visibility, ground level operation, as well as improved material handling and vehicle transportability.

The SB3000 model incorporates features and technology to improve the user experience in terms of improved visibility, ground level operation, as well as improved material handling and vehicle transportability.

Our Spray Paver model, which is recommended for use with the Shuttle Buggy, is also designed to carry and spray tack coat directly in front of the hot mix asphalt in a single process, thus eliminating the need for a separate tack truck.

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In addition to the half-lane and larger highway class milling machines, we also manufacture a smaller, utility class machine for two-to-four foot cutting widths and a utility class cold planer model mounted on steel wheels.

The RX-505, our newest cold planer, is equipped with two new safety features that allow for safe cutter drum access and maintenance and obstacle detection while the machine is in reverse.

Soil stabilizers are produced in multiple configurations and double as asphalt reclaiming machines for road rehabilitations, in addition to their primary purpose of stabilizing soil sub-grades with additives to provide an improved base on which to pave.

Our patented screeds use a hydraulic powered generator to electrify elements that heat a screed plate so asphalt will not stick to it while paving, attach to asphalt paving machines and place asphalt on the roadbed at a desired thickness and width while smoothing and compacting the surface.

Our screeds can be configured to fit many types of asphalt paving machines, including machines manufactured by us as well as our competitors.

Our screeds can be configured to fit many types of asphalt paving machines, including machines manufactured by our competitors.

Concrete is one of the world's most used and durable construction materials.

Concrete production equipment is primarily manufactured at three facilities:

Blair, Burlington and St-Bruno.

Together, these three sites produce a market leading product portfolio.

The Blair and St-Bruno sites were acquired in 2020 and joined the Burlington location to expand our concrete product line.

We manufacture leading portable and stationary concrete production equipment including transit and central mix concrete plants.

We manufacture industry leading portable and stationary concrete production equipment including transit and central mix concrete plants.

Our portable concrete plants are known for quick set-up and tear down as well as exceptionable reliability and longevity over numerous relocations.

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The tilt mixer is our most popular mixer type for concrete paving and ready mix production while the horizontal reversing mixers are a low dust, low noise option primarily marketed to ready mix producers.

We produce a comprehensive portfolio of customized burners for industrial applications such as boilers, chemical plants, oil and gas refineries, offshore platforms, power generation plants, thermal fluid heaters and asphalt aggregate drying.

We have recently invested in our burner technology specifically to develop burners that will enable our customers to achieve their carbon footprint reduction goals, lower energy consumption and reduce or eliminate dependence on fossil fuels.

Our burners can use alternative

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fuels such as renewable natural gas, hydrogen blended natural gas and biomass to liquid fuels.

We are preparing to meet the demand for alternative fuels as the infrastructure and resources become available.

Our versatile Versa Jet burner platform is d eveloped for retrofit applications and has the capacity to fire at a range of rates.

The adaptable design is compatible with virtually all drum designs and can be installed with minimal modifications needed to asphalt mixing plants produced by us as well as our competitors.

We also produce industry leading combustion products for a variety of industrial applications as new applications have grown rapidly.

At the present time, our products, most of which are customized for a particular application, are used in a score of different industries and purposes including chemical plants, at oil-and-gas refineries, on off-shore platforms, on barges, at power generation plants, wood product manufacturers, food processors, textile factories, pharmaceutical producers and roofing manufacturers.

We engineer and develop new products dedicated to improving customers' productivity and profitability.

Our products share environmentally conscious designs and are crafted from quality materials by an expert staff of dedicated professionals.

The primary purchasers of the products produced by this segment are asphalt producers, highway and heavy equipment contractors, ready mix concrete producers, contractors in the construction and demolition recycling markets and domestic and foreign governmental agencies.

We market our hot-mix asphalt products domestically and internationally primarily under the Astec trademark.

Asphalt plants and related equipment are sold directly to asphalt producers or domestic and foreign government agencies through our domestic and international sales departments.

Our concrete products are marketed domestically and internationally under the RexCon, CON-E-CO and BMH trademarks.

Our concrete plants and related equipment are sold directly to concrete producers and foreign agencies through our domestic and international sales departments.

The BMH and CON-E-CO products are also marketed through dealers domestically and internationally.

We market our asphalt paving equipment under the Roadtec and Carlson trademarks both domestically and internationally to highway and heavy equipment contractors, utility contractors and domestic and foreign governmental agencies both directly and through dealers.

Mobile construction equipment and factory authorized machine rebuild services are marketed both directly and through dealers.

This segment's products are marketed by direct and dealer support sales staff and domestic and international independent distributors, including our Australia, AME and Thailand sites.

We market our products domestically and internationally through direct and dealer support sales staff, domestic and international independent distributors and our international distribution sites in both of our reportable segments.

Asphalt and concrete plants and their related equipment are sold directly to asphalt or concrete producers, respectively, or domestic and foreign government agencies.

Asphalt paving and road building equipment are sold to highway and heavy equipment contractors, utility contractors and domestic and foreign governmental agencies.

Wood chippers, horizontal grinders and blower trucks are primarily sold to forestry and environmental recycling contractors.

This industry segment faces strong competition in price, service and product performance and competes with both large publicly-traded companies and various smaller manufacturers.

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Product Categories Primary Competitors

Asphalt plants and related components ADM, Almix, Ammann, Benninghoven (part of Deere & Company), Marini (part of Fayat Group), Gencor Industries, Inc.

Asphalt plants and related components Asphalt Drum Mixers Inc, Asphalt Equipment Company Inc.

dba ALmix, Ammann Group, Wirtgen Group (a John Deere Company), Marini (part of Fayat Group), Gencor Industries, Inc.

and local manufacturers

Concrete equipment Erie-Strayer, Stephens Manufacturing and Vince Hagan

Paving and related equipment Bomag (part of Fayat Group), Caterpillar Paving Products (part of Caterpillar, Inc.), Dynapac (part of Fayat Group), Lee Boy, Vogele (part of Deere & Company), Volvo Construction Equipment (part of Volvo Group AB) and Weiler

Milling equipment Bomag (part of Fayat Group), Caterpillar Paving Products (part of Caterpillar, Inc.), CMI, Dynapac (part of Fayat Group), Volvo Construction Equipment (part of Volvo Group AB) and Wirtgen (part of Deere & Company)

Forestry and recycling equipment Bandit, Doppstadt, Morbark, Rotochopper and Vermeer

Concrete equipment ERIE Strayer Company, Stephens Manufacturing and Vince Hagan Co.

Paving and related equipment Bomag (part of Fayat Group), Caterpillar Paving Products (part of Caterpillar, Inc.), Dynapac (part of Fayat Group), LeeBoy, Wirtgen Group (a John Deere Company), Volvo Construction Equipment (part of Volvo Group) and Weiler Inc.

Milling equipment Bomag (part of Fayat Group), Caterpillar Paving Products (part of Caterpillar, Inc.), CMI Roadbuilding, Dynapac (part of Fayat Group), Volvo Construction Equipment (part of Volvo Group AB) and Wirtgen Group (a John Deere Company)

Forestry and recycling equipment Bandit Industries, Inc., Doppstadt, Morbark, Rotochopper Inc.

and Vermeer Corporation

The backlog for the Infrastructure Solutions segment at December 31, 2022 and 2021 was approximately $567.1 million and $449.3 million, respectively.

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Site Location Site Location

AME Johannesburg, South Africa Omagh Omagh, United Kingdom

Belo Horizonte Belo Horizonte, Brazil Sterling Illinois, United States

AME Johannesburg, South Africa Sterling Illinois, United States

Belo Horizonte Belo Horizonte, Brazil Thailand Bangkok, Thailand

EUG-Franklin Blvd Oregon, United States Thornbury Ontario, Canada

India Ahmedabad, India Yankton South Dakota, United States

Johannesburg Johannesburg, South Africa

The sites within the Materials Solutions segment are primarily manufacturing operations with the AME and India sites functioning to market, service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of our manufacturing sites.

Belo Horizonte manufactures asphalt plants in addition to certain core products produced in the Materials Solutions segment.

Belo Horizonte also markets products in the Brazilian market that are produced by all of our manufacturing sites.

Our India site is in the start-up phase of new sales operations.

Belo Horizonte was a start-up in 2014 and delivered its first asphalt plant in early 2016;

however, sales in the South American market have continued to be hampered by the economic downturn in South America and more specifically in Brazil.

We plan to position ourselves to significantly increase the production and sales volumes by Belo Horizonte and have begun manufacturing other product lines at the facility.

Johannesburg Johannesburg, South Africa Yankton South Dakota, United States

Omagh Omagh, United Kingdom

Table of Conten t s

The sites within the Materials Solutions segment primarily focus on manufacturing operations with the AME site functioning to market, service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of our manufacturing sites.

In addition to manufacturing core Materials Solutions products and asphalt plants, Belo Horizonte markets all our products to the Brazilian market.

We plan to continue to expand manufacturing at Belo Horizonte to include other product lines.

At December 31, 2022, we had an ownership interest of approximately 93% in Belo Horizonte.

During the first quarter of 2022, we executed an agreement with the noncontrolling interest holder to acquire their outstanding interest in full.

Completion of the transaction is subject to obtaining certain judicial approval in Brazil.

Based on an internal review of our operations, beginning January 1, 2022, the Thailand site, which was previously included in the Infrastructure Solutions segment, is reported in the Materials Solutions segment while the India site, which was previously incorporated into the Materials Solutions segment, is reported in the Infrastructure Solutions segment.

Products and Services

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Portable plants Mineral processing equipment Consulting and engineering services

In conjunction with the Materials Solutions products we manufacture, we offer consulting and engineering services to provide complete "turnkey" processing systems, which often include electrical control centers and plant automation products we produce.

We are a world leader in the development of hydraulic relief jaw crushers having patented our first model in 2002.

Hydraulic relief jaw crushers are a significant improvement in safety, adjustment and clearing of material in jaw crushers.

In addition, we offer a range of cone crushers to meet critical aggregate or mining needs, which include technology features that deliver a distinct performance advantage, such as hydraulic overload protection, chamber clearing, push button adjustment and a proprietary anti-spin system.

Our vibrating screen line features multiple sizes of single deck to quadruple deck screens and contains the "Neverwear" sealing system guaranteed to keep lubricants in and to never wear out.

We manufacture a complete line of primary, secondary, tertiary and quaternary crushers, including jaw, horizontal shaft impactor, vertical shaft impactor and cone rock crushers as well as industry related washing and conveying equipment, mobile screening plants, portable and stationary screen structures and vibrating and high frequency screens.

These rock crushers are used by mining, quarrying and sand and gravel producers to crush oversized aggregate to salable size, in addition to their use for recycled concrete and asphalt.

This equipment can be purchased as individual components, as portable plants for flexibility or as completely engineered systems for both portable, stationary and RAP applications.

We offer the highly-portable Fast Pack System, featuring quick setup and teardown, thereby maximizing production time and minimizing downtime.

We also offer portable fully self-contained and self-propelled Fast Trax track-mounted jaw, cone, vertical shaft impactors and horizontal shaft crushers, which are ideal for either recycle or hard rock applications, allowing the producer to move the equipment to the material.

The expanded GT line of track-mounted crushing and screening plants focuses more specifically on the needs of global markets.

Portable plants combine various combinations of crushing, screening and conveying equipment mounted on tow away chassis and track chassis configurations.

Due to high transportation costs of construction materials, many producers use portable equipment to process materials they need in close proximity to their job sites.

Portable plants allow aggregate producers the ability to quickly and efficiently move equipment from one location to another as their jobs necessitate.

The portable track plants are fully self-contained and allow operators to be producing materials within minutes of unloading equipment off of their transport trucks.

Track-mounted crushing and screening plants enable contractors to perform jobs that in the past were not economically feasible and also allow our dealers to compete in the large track-mounted rental market.

Sand classifying and washing equipment is designed to clean, separate and re-blend material from sand deposits to meet the size specifications for critical applications.

Products offered include fine and coarse material washers, log washers, blade mills, sand classifying tanks, cyclones, dewatering screens, density classifiers, sieve bend screens and attrition cells.

Additional portable and stationary plants are also offered to handle the growing needs in construction sands, specialty sands and fines recovery.

Screening plants are available in both stationary and highly portable models and are complemented by a full line of radial stacking and overland belt conveyors.

Screening plants also serve the recycle, crushed stone, industrial and general construction industries.

We manufacture comprehensive lines of crushing, screening, washing and classifying, material and bulk handling and rock breaking equipment in a variety of configurations including stationary, portable (wheeled) and mobile (track).

In conjunction with the Materials Solutions products, we offer consulting and engineering services to provide complete "turnkey" processing systems, which often include electrical control centers and plant automation products that we produce.

Our complete line of primary, secondary, tertiary and quaternary crushers includes jaw crushers, horizontal shaft impactors, vertical shaft impactors, cone crushers and heavy-duty, mining-application crushers.

These machines are used to crush large, over-sized material in mining, quarrying, sand and gravel and asphalt/concrete recycling applications.

Once the material is crushed to size, it is utilized in a variety of products from road base to golf course sand.

We offer cone crushers with both roller-bearing and bushing style cones to fit any customer’s needs.

Our industry-leading hydraulic-relief jaw crushers offer enhanced safety and easy maintenance.

Our crushers are available as individual components, portable wheeled plants and mobile track plants.

We offer a wide variety of vibrating screens including incline, horizontal, high frequency, multi-frequency, combo and dewatering screens.

Our high frequency screens utilize a high-speed vibration directly induced into the screen media to improve screening efficiency and production rates.

The screens' unique rotary tensioning system allows for quick media changes.

Our screens are available in multiple sizes with up to four decks and in a variety of configurations including stationary, portable and mobile.

Our new High Frequency Portable Screening Plant is equipped with an 8-foot-wide high frequency screen, the first of its kind in the industry.

This patent-pending screen design features externally-mounted vibrators at the ends of the tappets for a more aggressive screening action, which also allows for easier maintenance and adjustments.

The screen is equipped with a hydraulic operating angle adjustment, a fines collection hopper, top- and bottom-deck discharge chutes and an aggregate spreader.

Our washing and classifying equipment is well-suited for a wide range of applications and production goals.

Our expertly engineered components and plants help producers meet the most stringent material specifications and get the most out of their material, while significantly decreasing water usage.

With complete lines of washing, classifying, fines recovery and water clarification plants and systems, we offer solutions for any operation in portable and stationary configurations.

Conveying equipment is designed to move or store aggregate and other bulk materials in radial cone-shaped or windrow stockpiles.

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Additionally, high-capacity rail and barge loading/unloading material handling systems are an important part of our product lines.

Our complete line of industry leading rock breaker systems for the mining, quarry and recycling markets provide large-scale stationary rock breakers for open pit mining, as well as mid-sized stationary rock breakers for underground applications.

In addition, we offer a full line of smaller rock breaker systems for mobile track and portable primary crushing plants as well as a full line of four-wheel drive articulated production and utility vehicles, scalers and rock breakers for underground mining and a complete line of hydraulic breakers, compactors and demolition attachments for the North American construction and demolition markets.

Our mobile bulk material handling solutions are designed to handle all free-flowing bulk materials, including but not limited to ores, coal, aggregates, fertilizers, grains, woodchips and pellets and are sold globally.

We design and manufacture a broad range of material and bulk handling products for all production goals.

Our material handling products cover many applications and are designed for efficiency and high-capacity material transferring, moving and mixing.

Our innovative line of material handling solutions includes radial and telescoping conveyors, truck unloaders, hopper feeders, mobile conveyors, pugmills, ship loaders and unloaders, bulk receptions feeders and stationary conveying systems.

Our mobile bulk material handling solutions are designed to handle all free-flowing bulk materials, including but not limited to ores, coal, aggregates, fertilizers, grains, woodchips and pellets.

We have created our rock breaking equipment line for aggregate, mining, construction and demolition applications.

Our comprehensive range of rock breaker boom systems are designed to break oversized material at large gyratories, grizzlies and primary/secondary crushing application sites.

These systems include boom-mounted configurations, automatic greasing packages, motor starter panels, joystick controls and easy plant integration.

Our newest mobile rock breaker, the BreakerBOSS

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5D, is used for breaking oversized material in underground mines, typically broken at draw points and grizzly stations where rock must keep flowing.

Many of our facilities maintain internationally recognized industry standard quality, environmental and health and safety assurance accreditations.

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 domestic and foreign governmental agencies.

Materials Solutions' equipment and aftermarket sales and service program are primarily marketed through an extensive network of dealers by dealer support sales employees and domestic and international independent distributors.

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

Materials Solutions equipment and aftermarket sales and service programs are primarily marketed through an extensive network of dealers via dealer support sales employees and domestic and international independent distributors.

The Materials Solutions segment faces strong competition in price, service and product performance.

Materials Solutions equipment competitors include the following as well as smaller manufacturers, both domestic and international:

CDE Global McCloskey Terex

Deister McLanahan Thor

Epiroc Metso Minerals Weir Minerals (Trio)

Edge Innovate Sandvik Mining and Construction Kleemann (part of Deere & Company)

Masaba Superior Industries

At December 31, 2021 and 2020, the backlog for the Materials Solutions Group was approximately $313.3 million and $142.3 million, respectively.

The Corporate category consists of our parent company and our 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.

Our parent company and our captive insurance company provide support and corporate oversight for all the sites.

We record U.S.

federal income tax expenses and state deferred taxes for all business segments on the parent company's books;

therefore, these taxes are included in the Corporate category for segment reporting.

Materials Solutions equipment primary competitors include the following as well as smaller manufacturers, both domestic and international:

CDE Group McCloskey International (part of Metso Outotec Corporation) Terex Corporation

Deister Machine Company, Inc McLanahan Corporation Thor Manufacturing Ltd.

Epiroc Metso Outotec Corporation Weir Group

EDGE Innovate Sandvik Group Wirtgen Group (a John Deere Company)

Superior Industries, Inc.

At December 31, 2022 and 2021, the backlog for the Materials Solutions segment was approximately $341.2 million and $313.3 million, respectively.

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 other sites.

The controls and automation business manufactures hardware and software products that are marketed independently as well as included in certain products produced by our other segments.

Common to Both Reporting Segments

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Manufacturing

We manufacture many of the component parts and related equipment for our products, while several large components of our products are purchased "ready-for-use", such items include engines, axles, tires and hydraulics.

We manufacture many of the component parts and related equipment for our products, while several large components of our products are purchased "ready-for-use", such purchased items include engines, axles, tires and hydraulics.

In many cases, we design, engineer and manufacture custom component parts and equipment to meet the particular needs of individual customers.

Manufacturing operations during 2021 took place through 16 of our sites.

Our manufacturing operations consist primarily of fabricating steel components and the assembly and testing of our products to ensure that we achieve quality standards.

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Raw materials used in the manufacture of our products include carbon steel, pipe and various types of alloy steel, which are normally purchased from distributors and other sources.

Most steel is delivered on a "just-in-time" arrangement from the supplier to reduce inventory requirements at the manufacturing facilities, but is occasionally inventoried after purchase.

The majority of steel is scheduled on a just in time arrangement from suppliers to better manage inventory requirements at our manufacturing facilities.

Based on market dynamics, we strategically and selectively order and inventory certain items beyond a just in time basis.

Raw materials for manufacturing are normally readily available;

however, certain highly customized components may require longer than normal lead times.

In addition, we have experienced challenges related to our supply chain attributable to the ongoing impact of the COVID-19 pandemic.

Other components used in the manufacturing processes include engines, gearboxes, power transmissions and electronic systems.

In addition, we have been and continue to experience increased lead times for certain standard production materials and parts and supplies.

Other components used in the manufacturing processes include engines, gearboxes, power transmissions, hydraulics and electronic systems.

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Government Regulations

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We have been able to operate under these laws and regulations without any material adverse effect on our business.

None of our reporting operations are within highly regulated industries.

None of our operations are within highly regulated industries.

However, air pollution control equipment we manufacture, principally for hot-mix asphalt plants, must comply with certain performance standards promulgated by the Environmental Protection Agency under the Clean Air Act applicable to "new sources" or new plants.

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We have 81 trademarks registered in the United States, including logos for Astec, Carlson Paving, Heatec, KPI-JCI, Peterson Pacific, Power Flame, Roadtec and Telsmith, and the names ASTEC, CARLSON, HEATEC, JCI, KOLBERG, PETERSON, POWER FLAME, ROADTEC and TELSMITH, as well as a number of other product names.

We also have 126 trademarks registered in foreign jurisdictions, including Argentina, Australia, Brazil, Canada, China, European Union, France, Germany, India, Italy, Kazakhstan, Mexico, New Zealand, Paraguay, Peru, Russia, South Africa, South Korea, Taiwan, Thailand, United Kingdom, Ukraine, Uruguay and Vietnam.

We also have 129 trademarks registered in foreign jurisdictions, including Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Italy, Kazakhstan, Mexico, New Zealand, Paraguay, Peru, Russia, South Africa, South Korea, Taiwan, Thailand, the United Kingdom, Ukraine, Uruguay and Vietnam.

We have 13 United States and 17 foreign trademark registration applications pending.

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Seasonality and Backlog

Revenues typically are strongest during the first, second and fourth quarters with the third quarter consistently generating weaker results.

We expect future operations in the near term to be typical of this historical trend.

Revenues have historically been strongest during the first, second and fourth quarters with the third quarter typically generating weaker results.

Over the long-term, we expect future operations to be consistent with this trend, however, quarterly revenue performance in 2021 and 2022 has varied based on recent manufacturing challenges resulting from supply chain and logistics disruptions as well as labor shortages.

As of December 31, 2022 and 2021, we had a backlog for delivery of products at certain dates in the future of approximately $912.7 million and $762.6 million, respectively.

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In addition, asphalt and concrete are generally considered competitive products as a surface choice for new roads and highways.

A portion of the interstate highway system is surfaced in concrete, but over 90% of all surfaced roads in the U.S.

are paved with asphalt.

A portion of the interstate highway system is surfaced in concrete, but the significant majority of surfaced roads in the U.S.

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paved with asphalt.

Although concrete is used for some new road surfaces, asphalt is used for most resurfacing.

Our customers generally offer both asphalt and concrete surfacing options.

Our investment in concrete batch plants in 2020 enables us to be a singular provider to our customers for both asphalt and concrete equipment.

Our customers generally offer both asphalt and concrete surfacing options and our product portfolio enables us to be a singular provider to our customers for both asphalt and concrete equipment.

Human Capital Resources and Management

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In everyday work, our employees embody our core values of Safety, Devotion, Integrity, Respect and Innovation.

They do so by living our winning behaviors of Open and Honest Communications, Drive Creativity, Customer Driven Innovation and OneASTEC in all we do.

They do so by living our winning behaviors of Open and Honest Communications, Drive Creativity, Customer Driven Innovation and OneASTEC in all they do.

We strive to be an employer of choice, attracting and retaining top talent committed to creating a diverse, equitable and inclusive workplace where individuals are respected and valued for their diverse backgrounds and experiences.

Through comprehensive compensation and benefits and a focus on safety, we strive to support our employees' overall well-being.

In 2021, we executed our first global employee engagement survey.

In total, 73% of our workforce responded and provided us with valuable feedback.

Our sites have programs designed to upskill manufacturing employees in the areas specifically required for local production needs.

In addition, we partner with national vendors specialized in skilled labor recruitment and many of our sites have relationships with local trade schools and community colleges to attract talent.

In 2022, we again engaged our employees through the Voice of OneASTEC survey.

In total, 81% of our workforce responded and provided us with valuable feedback, a significant increase from the 73% participation in 2021.

Throughout the year we have focused on the three main areas of opportunity identified:

communication, performance management and diversity.

We saw improvement in those focus areas with scores increasing by four to six percentage points compared to our prior year results.

Employee Profile

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We achieve this by regularly conducting market reviews and adjusting as needed.

In addition to salaries, we provide regional programs, that can include annual bonuses, share-based compensation awards, a 401(k) plan with employee matching opportunities, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work schedules, adoption and surrogacy assistance, employee assistance programs, tuition assistance and on-site services.

In addition to salaries, we provide regional programs, which can include annual bonuses, share-based compensation awards, a 401(k) plan with employee matching opportunities, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work arrangements, employee assistance programs, tuition assistance and on-site services.

Health and Safety

The well-being and safety of our employees is a paramount value for us and this is consistent with our core values.

The well-being and safety of our employees is paramount as is indicated in our core values.

We manage safety at (and from) the highest levels, using the same tools we employ to measure and improve other aspects of business performance, such as continuous improvement, key performance indicators, scorecards and performance management.

More particularly, we undertake the following actions:

We undertake the following actions:

• provide mandatory safety trainings each month at our production facilities, which are designed to focus on empowering our employees with the knowledge and tools they need to make safe choices and to mitigate risks;

• track safety leading and lagging indicators;

• track safety leading and lagging indicators, which includes focusing on near misses, first aids, unsafe work observations abatement within 24 hours of identification and safety training;

• local management cascades safety practices throughout the organization, including daily "safety huddles" for each work-shift;

• we use safety scorecards, standardized signage, and visual management throughout our facilities, in addition to traditional safety training;

• regularly conduct monthly safety calls to discuss and share best practices with the local safety managers;

• utilize safety scorecards, standardized signage, and visual management throughout our facilities, in addition to traditional safety training;

• conduct monthly safety calls to discuss and share best practices with our local safety managers;

• conduct weekly safety incident reviews with leadership;

• distribute monthly employee newsletters and executive-led town hall meetings.

We aspire to reduce lost time and recordable injuries each year.

During the year ended December 31, 2021, we had zero recordable injuries at five of our sites.

However, we experienced a 23% increase in our recordable injuries across all sites compared to the year ended December 31, 2020.

Our Occupational Safety and Health Administration Incident Rate experienced an increase from 1.39 for the year ended December 31, 2020 to 1.71 for the year ended December 31, 2021.

In response to the COVID-19 pandemic, we implemented significant changes that we determined were in the best interest of our employees, partners and the communities in which we operate, and which complied with government orders.

This included having those employees who could, work from home and implementing additional safety measures for our production and other employees continuing critical on-site work.

Closely following the recommendations of the World Health Organization, the U.S.

Centers for Disease Control and local governments, we took numerous actions to ensure the health and safety of our employees.

As a result of the effects of the COVID-19 pandemic, we have experienced a shortage of necessary production personnel and increasing labor costs to attract staff in our manufacturing operations.

This has resulted in a variety of challenges in running our operations efficiently as well as meeting manufacturing demand.

We continue to adjust our production schedules and manufacturing workload distribution, outsource components, implement efficiency improvements and actively modify our recruitment process and compensation and benefits to attract and retain production personnel in our manufacturing facilities.

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We believe in following a proactive approach to identify and mitigate safety issues.

As such, our focus is monitoring, assessing and abating leading safety indicators through our Unsafe Work Observation program, thus preventing accidents before they happen or reducing the impact if they do occur.

Abatement of safety issues in a timely fashion is incentivized through our annual incentive program, which is partially focused on this leading safety metric.

We aspire to reduce recordable injuries and lost time each year.

During the year ended December 31, 2022, we had zero recordable injuries at four of our manufacturing sites.

However, we experienced a 15% increase in our Occupational Safety and Health Administration Recordable Incident Rate for the year ended December 31, 2022, to 1.96 compared to 1.71 for the year ended December 31, 2021.

Although we have seen an increase in the recordable incident rate, the incidents are concentrated in a limited number of sites.

We have taken action to address these localized safety issues by increasing the number of corporate safety audits, providing thorough training at the site, realigning site safety focus, providing standardized safety policies and procedures and focusing on proactive injury prevention.

We have also added safety resources at these sites and within our corporate structure to improve our safety program where we are continuing to focus on proactive, transparent and streamlined communications throughout the manufacturing sites for safety related information.

Talent Development, Diversity, Equity and Inclusion

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We strive to create an environment that attracts top talent and where high performance is fostered and thrives, continuous learning is engrained, diverse experience is leveraged as a competitive advantage and careers are propelled forward.

In 2021, we developed and implemented a new Performance Management model and process company-wide to align our efforts to achieve company goals and targets.

In 2022, our High Performance Framework process ensured company-wide alignment to achieve company goals and targets.

This new model includes values, professional development and cascaded common performance goals.

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We continue to define our diversity, equity and inclusion strategy.

These efforts touch all levels of our organization including our Board of Directors, which is currently comprised of 20% women.

These efforts touch all levels of our organization including our Board of Directors.

Corporate and Available Information

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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-K

Item 1. Business