What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 159 added, 272 removed, 379 unchanged (53% of the section changed)

3 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets:

1 unchanged sentence

Investments 5.7 5.7

Trade receivables and contract assets, net of allowance for credit losses of $ 2.5 and $ 2.3 , respectively

Other receivables, net of allowance for credit losses of $ 0.7 , respectively

Trade receivables, contract assets and other receivables, net of allowance for credit losses of $ 3.8 and $ 4.0 , respectively

Inventories 484.0 455.6

1 unchanged sentence

Prepaid expenses and other assets 27.5 27.7

Assets held for sale — 15.4

Total current assets 778.8 719.5

25 unchanged sentences

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

issued and outstanding – 22,739,296 as of September 30, 2023 and 22,624,031 as of December 31, 2022

issued and outstanding – 22,764,963 as of March 31, 2024 and 22,740,635 as of December 31, 2023

Additional paid-in capital 139.3 138.4

10 unchanged sentences

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

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

2023 2022 2023 2022

Three Months Ended March 31,

Net sales $ 309.2 $ 347.9

2 unchanged sentences

Selling, general and administrative expenses 71.4 67.9

Restructuring, impairment and other asset charges, net 0.5 0.1 5.3 4.5

(Loss) income from operations ( 5.2 ) 1.9 29.7 4.2

Restructuring and other asset (gains) charges, net ( 0.8 ) 3.7

Income from operations 6.3 17.6

Other expenses, net:

1 unchanged sentence

Interest income 0.6 0.5

Other (expenses) income, net — ( 0.4 ) 0.5 ( 1.8 )

(Loss) income before income taxes ( 7.1 ) 1.2 25.3 1.5

Income tax (benefit) provision ( 0.6 ) 0.7 6.5 0.8

Net (loss) income ( 6.5 ) 0.5 18.8 0.7

Net (income) loss attributable to noncontrolling interest ( 0.1 ) 0.2 ( 0.2 ) 0.2

Net (loss) income attributable to controlling interest $ ( 6.6 ) $ 0.7 $ 18.6 $ 0.9

Other income, net 0.5 0.4

Income before income taxes 4.7 16.5

Income tax provision 1.4 4.4

Net income 3.3 12.1

Net loss attributable to noncontrolling interest 0.1 —

Net income attributable to controlling interest $ 3.4 $ 12.1

Per share data:

(Loss) earnings per common share - Basic $ ( 0.29 ) $ 0.03 $ 0.82 $ 0.04

(Loss) earnings per common share - Diluted $ ( 0.29 ) $ 0.03 $ 0.82 $ 0.04

Earnings per common share - Basic $ 0.15 $ 0.53

Earnings per common share - Diluted $ 0.15 $ 0.53

Weighted average shares outstanding - Basic 22,762,098 22,655,821

4 unchanged sentences

(In millions, unaudited)

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

2023 2022 2023 2022

Net (loss) income $ ( 6.5 ) $ 0.5 $ 18.8 $ 0.7

Other comprehensive loss:

Three Months Ended March 31,

Net income $ 3.3 $ 12.1

Other comprehensive (loss) income:

Foreign currency translation adjustments ( 4.4 ) 0.1

Other comprehensive loss ( 4.6 ) ( 9.2 ) ( 4.0 ) ( 13.5 )

Other comprehensive (loss) income ( 4.4 ) 0.1

Comprehensive (loss) income ( 1.1 ) 12.2

Comprehensive (income) loss attributable to noncontrolling interest ( 0.1 ) 0.2 ( 0.3 ) 0.1

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

Comprehensive (loss) income attributable to controlling interest $ ( 1.0 ) $ 12.1

3 unchanged sentences

(In millions, unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

4 unchanged sentences

Provision for warranties 4.2 3.9

Deferred compensation expense (benefit) 0.2 ( 1.1 )

Deferred compensation expense 0.1 —

Share-based compensation 1.2 0.8

1 unchanged sentence

Gain on disposition of property and equipment, net ( 0.9 ) ( 3.4 )

Asset impairment charges 0.8 3.4

Amortization of debt issuance costs 0.1 0.1

15 unchanged sentences

Cash flows from investing activities:

Acquisitions, net of cash acquired — ( 17.8 )

Expenditures for property and equipment ( 5.8 ) ( 8.0 )

1 unchanged sentence

Purchase of investments ( 0.5 ) ( 0.2 )

Sale of investments 1.7 0.5

Net cash used in investing activities ( 3.9 ) ( 45.0 )

Net cash (used in) provided by investing activities ( 5.9 ) 11.8

ASTEC INDUSTRIES, INC.

1 unchanged sentence

(In millions, unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities:

2 unchanged sentences

Repayments of borrowings on credit facilities and bank loans ( 16.7 ) ( 44.0 )

Sale of Company stock by deferred compensation programs, net 0.1 0.2

Withholding tax paid upon vesting of share-based compensation awards ( 0.4 ) ( 1.4 )

Repurchase of Company stock — ( 6.1 )

Net cash provided by (used in) financing activities 48.4 ( 16.2 )

Effect of exchange rates on cash ( 0.6 ) 0.1

Increase (decrease) in cash, cash equivalents and restricted cash 7.8 ( 113.6 )

Decrease in cash, cash equivalents and restricted cash ( 5.1 ) ( 23.5 )

Cash, cash equivalents and restricted cash, beginning of period 63.2 66.0

15 unchanged sentences

Balance, December 31, 2023 22,740,635 $ 4.5 $ 138.4 $ ( 38.1 ) $ ( 0.8 ) $ 549.4 $ 0.3 $ 653.7

Net income — — — — — 12.1 — 12.1

Other comprehensive income — — — — — — 0.1 0.1

Net income (loss) — — — — — 3.4 ( 0.1 ) 3.3

Other comprehensive loss — — — ( 4.4 ) — — — ( 4.4 )

Dividends ($ 0.13 per share)

4 unchanged sentences

Balance, March 31, 2024 22,764,963 $ 4.5 $ 139.3 $ ( 42.5 ) $ ( 0.8 ) $ 549.8 $ 0.2 $ 650.5

Net income — — — — — 13.1 0.1 13.2

Other comprehensive income — — — 0.5 — — — 0.5

Dividends ($ 0.13 per share)

— — — — — ( 3.0 ) — ( 3.0 )

Share-based compensation — — 1.4 — — — — 1.4

Issuance of common stock under incentive plan 46,003 — — — — — — —

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

Balance, June 30, 2023 22,736,570 $ 4.5 $ 136.4 $ ( 39.6 ) $ ( 1.1 ) $ 547.1 $ 0.2 $ 647.5

Net (loss) income — — — — — ( 6.6 ) 0.1 ( 6.5 )

Other comprehensive loss — — — ( 4.6 ) — — — ( 4.6 )

Dividends ($ 0.13 per share)

— — — — — ( 3.0 ) — ( 3.0 )

Share-based compensation — — 1.3 — — — — 1.3

Issuance of common stock under incentive plan 2,726 — — — — — — —

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

Balance, September 30, 2023 22,739,296 $ 4.5 $ 137.7 $ ( 44.2 ) $ ( 1.0 ) $ 537.5 $ 0.3 $ 634.8

ASTEC INDUSTRIES, INC.

Consolidated Statements of Equity (Continued)

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

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

8 unchanged sentences

Balance, March 31, 2023 22,690,567 $ 4.5 $ 135.2 $ ( 40.1 ) $ ( 1.1 ) $ 537.0 $ 0.1 $ 635.6

Net loss — — — — — ( 3.9 ) — ( 3.9 )

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

Dividends ($ 0.12 per share)

— — 0.1 — — ( 2.7 ) — ( 2.6 )

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

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

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

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

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

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

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

5 unchanged sentences

("Astec" or the "Company") is a Tennessee corporation which was incorporated in 1972.

The Company designs, engineers, manufactures and markets equipment and components used primarily in road building and related construction activities, as well as other products discussed below.

The Company designs, engineers, manufactures, markets and services equipment and components used primarily in asphalt and concrete road building and related construction activities, as well as other products discussed below.

The Company's products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface.

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

The Company's product portfolio includes both asphalt and concrete equipment.

The Company also manufactures 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;

7 unchanged sentences

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

The Corporate 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.

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

Basis of Presentation

8 unchanged sentences

Noncontrolling interest in the Company's consolidated financial statements represents the 7 % interest in a consolidated subsidiary which is not owned by the Company.

Since the Company controls this subsidiary, the subsidiary's financial statements are consolidated with those of the Company, and the noncontrolling owner's 7 % share of the subsidiary's net assets and results of operations is deducted and reported as "Noncontrolling interest" in the Consolidated Balance Sheets and as "Net (income) loss attributable to 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).

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

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 to acquire their outstanding interest in full for R$ 10.0 M (approximately $ 2.0 million, subject to the effect of exchange rates).

Completion of the transaction is subject to resolution of certain disputes between the parties.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes.

Significant items subject to such estimates and assumptions include excess and obsolete inventory, inventory net realizable value, product warranty obligations, self-insurance loss reserves, capitalization of internal use software, goodwill impairment and the measurement of income tax assets and liabilities.

Significant items subject to such estimates and assumptions include inventory net realizable value, product warranty obligations, self-insurance loss reserves, capitalization of internal use software, goodwill and other intangible assets impairment and the measurement of income tax assets and liabilities.

The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances.

1 unchanged sentence

Actual results could differ from those estimates.

In the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive (loss) income for the three and nine months ended September 30, 2023 and 2022, the financial position as of September 30, 2023 and December 31, 2022 and the cash flows for the nine months ended September 30, 2023 and 2022, and except as otherwise discussed herein, such adjustments consist only of those of a normal recurring nature.

In the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive (loss) income for the three months ended March 31, 2024 and 2023, the financial position as of March 31, 2024 and December 31, 2023 and the cash flows for the three months ended March 31, 2024 and 2023, 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.

All dollar amounts, except share and per share amounts, are in millions of dollars unless otherwise indicated.

Reclassifications and Adjustments

Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the nine months ended September 30, 2023.

• The Company elected to present research and development expenses in "Selling, general and administrative expenses".

These amounts were previously included in a separate financial statement caption in the Consolidated Statements of Operations.

• The Company reclassified certain accrued liability balances from "Other current liabilities" to "Accrued employee related liabilities" to more appropriately reflect the nature of such accrued balances.

• The Company elected to present gains and losses recognized on the change in fair value of derivative instruments and foreign currency transaction gains and losses, net in "Other (expenses) income, net".

These amounts were previously included in "Cost of sales".

There was no change to previously reported "Total current liabilities" or "Net (loss) income attributable to controlling interest" related to these reclassifications.

During the first quarter of 2023, the Company identified immaterial errors associated with over-accruals of inventory-related expenses in its historical financial statements.

The cumulative effect of the errors generated in 2021 and 2022 was corrected during the first quarter of 2023, resulting in a decrease in "Cost of sales" of $ 1.9 million.

Such adjustment was not considered material to the Company's consolidated financial statements for the year ended December 31, 2022 or any of the financial statements for the previously filed annual periods.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2021-08, "Business Combinations (Topic 805):

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

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

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

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

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

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280):

Improvement to Reportable Segment Disclosures," which requires entities to disclose significant segment expenses, other segment items, the title and position of the chief operating decision maker ("CODM") and information related to how the CODM assesses segment performance and allocates resources, among certain other required disclosures.

Additionally, current annual disclosures will be required in interim periods.

The new standard is effective, on a retrospective basis, for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact this ASU will have on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures," which requires entities to disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a specified quantitative threshold.

In addition, the new standard requires disclosure of the amount of income taxes paid disaggregated by federal, state and foreign taxes and by jurisdiction for exceeding a specified quantitative threshold.

Additionally, income or loss from continuing operations before income tax will be required to be disaggregated between domestic and foreign classifications and income tax expense will be required to be disaggregated between federal, state and foreign classifications.

The new standard is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with retrospective application permitted.

The Company is currently evaluating the impact this ASU will have on its financial statement disclosures.

In March 2024, the SEC adopted the final rule under SEC Release No.

33-11275, "The Enhancement and Standardization of Climate-Related Disclosures for Investors," which will require registrants to disclose certain climate-related information in registration statements and annual reports.

On April 4, 2024, the SEC voluntarily stayed the effective date of the final rule pending judicial review of petitions challenging it, which have been consolidated for review by the U.S.

District Court of Appeals for the 8th Circuit.

Notwithstanding any changes as a result of these challenges, the disclosure requirements will apply to the Company's fiscal year beginning January 1, 2025.

The Company is currently evaluating the impact this final rule will have on its financial statement disclosures.

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

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

The acquisition was completed on April 1, 2022 at a purchase price of $ 19.3 million, which was paid in cash.

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

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

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

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

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

The goodwill is not deductible for income tax purposes.

Proforma financial information is not included since not significant.

Acquisition and integration costs incurred were nominal during the three and nine months ended September 30, 2023 for this acquisition.

Acquisition and integration costs incurred were $ 0.2 million and $ 1.1 million during the three and nine months ended September 30, 2022, respectively.

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

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

(in millions) Amount

Trade receivables 2.7

Inventories 0.7

Prepaid expenses and other assets 0.4

Property and equipment 0.2

Intangible assets 9.3

Other long-term assets 0.5

Total assets acquired $ 24.6

Accounts payable ( 0.7 )

Accrued payroll and related liabilities ( 0.8 )

Other current liabilities ( 1.1 )

Deferred income tax liabilities ( 2.4 )

Other long-term liabilities ( 0.3 )

Total liabilities assumed ( 5.3 )

Total purchase price $ 19.3

Inventories are valued at the lower of cost (first-in, first-out) or net realizable value, which requires the Company to make specific estimates, assumptions and judgments in determining the amount, if any, of reductions in the valuation of inventories to their net realizable values.

Inventories consist of the following:

(in millions) September 30, 2023 December 31, 2022

(in millions) March 31, 2024 December 31, 2023

Raw materials and parts $ 299.6 $ 298.6

5 unchanged sentences

The Company has various financial instruments that must be measured at fair value on a recurring basis, including marketable debt and equity securities held by Astec Insurance and marketable equity securities held in the Company's deferred compensation programs.

The Company's deferred compensation programs ("DCP") include a non-qualified Supplemental Executive Retirement Plan ("SERP") and a separate non-qualified Deferred Compensation Plan.

Although the deferred compensation programs' investments are allocated to individual participants, and investment decisions are made solely by those participants, they are non-qualified plans.

The Company's deferred compensation programs (each, a "DCP") include a non-qualified Supplemental Executive Retirement Plan ("SERP") and a separate non-qualified Deferred Compensation Plan.

Although the DCP's investments are allocated to individual participants, and investment decisions are made solely by those participants, they are non-qualified plans.

Consequently, the Company owns the assets and the related offsetting liability for disbursement until such time as a participant makes a qualifying withdrawal.

The SERP assets and related offsetting liability are recorded in non-current "Investments" and "Other long-term liabilities", respectively, in the Consolidated Balance Sheets.

The Company's subsidiaries also occasionally enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates.

The carrying amount of cash and cash equivalents, trade receivables and contract assets, other receivables, accounts payable, and short-term and long-term debt approximates their fair value because of their short-term nature and/or interest rates associated with the instruments.

The DCP assets and related offsetting liabilities are recorded in non-current "Investments" and "Other long-term liabilities," respectively, in the Consolidated Balance Sheets.

The Company's

subsidiaries also occasionally enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates.

The carrying amount of cash, cash equivalents and restricted cash, trade receivables and contract assets, other receivables, accounts payable, short-term debt and long-term debt approximates their fair value because of their short-term nature and/or interest rates associated with the instruments.

Investments are carried at their fair value based on quoted market prices for identical or similar assets or, where no quoted prices exist, other observable inputs for the asset.

The fair values of foreign currency exchange contracts are based on quotations from various banks for similar instruments using models with market-based inputs.

Financial assets and liabilities are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

Financial assets and liabilities are categorized based on the level of judgment associated with the inputs used to measure their fair value.

The inputs used to measure the fair value are identified in the following hierarchy:

3 unchanged sentences

or inputs other than quoted prices that are observable for the asset or liability.

Level 3 - Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

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 September 30, 2023 and December 31, 2022 are Level 1 and Level 2 in the fair value hierarchy as defined above:

September 30, 2023

Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

As indicated in the tables below, the Company has determined that all of its financial assets and liabilities as of March 31, 2024 and December 31, 2023 are Level 1 and Level 2 in the fair value hierarchy defined above:

March 31, 2024

(in millions) Level 1 Level 2 Total

6 unchanged sentences

Corporate bonds 4.3 — 4.3

Municipal bonds — 0.3 0.3

Agency bonds — 2.5 2.5

Floating rate notes 0.2 — 0.2

government securities 2.9 — 2.9

Asset-backed securities — 4.3 4.3

Exchange traded funds 1.4 — 1.4

Mortgage backed securities — 0.4 0.4

Other 0.2 0.4 0.6

Derivative financial instruments — 0.2 0.2

Total financial assets $ 14.9 $ 7.6 $ 22.5

11 unchanged sentences

Corporate bonds 3.4 — 3.4

Municipal bonds — 0.3 0.3

Floating rate notes 0.2 — 0.2

Agency bonds — 2.5 2.5

government securities 1.9 — 1.9

Asset-backed securities — 4.0 4.0

Exchange traded funds 1.3 — 1.3

Mortgage backed securities — 0.5 0.5

Other 0.2 0.5 0.7

1 unchanged sentence

Financial liabilities:

Derivative financial instruments $ — $ 0.1 $ 0.1

Deferred compensation programs' liabilities — 5.5 5.5

5 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 nine month periods ended September 30, 2023 and 2022 are as follows:

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

Changes in the Company's product warranty liability for the three month periods ended March 31, 2024 and 2023 are as follows:

Three Months Ended March 31,

(in millions) 2024 2023

2 unchanged sentences

Warranty liabilities settled ( 4.5 ) ( 3.4 )

Other — ( 0.2 ) — ( 0.3 )

Reserve balance, end of the period $ 16.2 $ 12.4

3 unchanged sentences

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

Total accrued loss reserves were $ 7.1 million and $ 5.8 million as of September 30, 2023 and December 31, 2022, respectively, of which $ 4.2 million and $ 3.9 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively.

For the three months ended September 30, 2023, the Company recorded an income tax benefit of $ 0.6 million, reflecting an 8.5 % effective tax rate, compared to a $ 0.7 million income tax expense for the three months ended September 30, 2022, reflecting a 58.3 % effective tax rate.

The income tax benefit for the three months ended September 30, 2023 as compared to the expense for the same period in 2022 was primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss.

For the nine months ended September 30, 2023, the Company recorded an income tax provision of $ 6.5 million, reflecting a 25.7 % effective tax rate, compared to $ 0.8 million expense, reflecting a 53.3 % effective tax rate, for the nine months ended September 30, 2022.

The income tax expense for the nine months ended September 30, 2023 was higher compared to the same period in 2022, primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net discrete tax benefit related to a research and development credit.

The Company's recorded liability for uncertain tax positions was $ 12.7 million and $ 12.0 million as of September 30, 2023 and December 31, 2022, respectively.

Total accrued loss reserves were $ 6.9 million and $ 7.2 million as of March 31, 2024 and December 31, 2023, respectively, of which $ 5.0 million and $ 4.5 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively.

For the three months ended March 31, 2024, the Company recorded an income tax expense of $ 1.4 million, reflecting a 29.8 % effective tax rate, compared to a $ 4.4 million income tax expense for the three months ended March 31, 2023, reflecting a 26.7 % effective tax rate.

The income tax expense for three months ended March 31, 2024 was lower compared to the same period in 2023, primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss.

The Company's recorded liability for uncertain tax positions was $ 13.2 million and $ 13.0 million as of March 31, 2024 and December 31, 2023, respectively.

The increase is the result of $ 0.2 million of incremental reserves associated with the 2024 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 September 30, 2023, 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 March 31, 2024, 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.

In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law.

The IRA levies a 1% excise tax on net stock repurchases after December 31, 2022 and imposes a 15% corporate alternative minimum tax ("CAMT") for tax years beginning after December 31, 2022.

The Company did not repurchase any shares during the three and nine months ended September 30, 2023.

CAMT does not impact the Company's results of operations or financial position.

Commitments and Contingencies

Certain customers have financed purchases of Company products through arrangements with third-party financing institutions.

Under these arrangements, the Company is contingently liable for customer debt of $ 0.9 million and $ 2.4 million as of September 30, 2023 and December 31, 2022, respectively.

Under these arrangements, the Company is contingently liable for customer debt of $ 0.9 million and $ 1.1 million as of March 31, 2024 and December 31, 2023, respectively.

These arrangements expire at various dates running through September 2026.

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

The Company has recorded a liability of $ 0.5 million and $ 1.0 million related to these guarantees, which were included in "Other current liabilities" in the Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively.

The Company has recorded a liability of $ 0.6 million related to these guarantees, which were included in "Other current liabilities" in the Consolidated Balance Sheets as of both March 31, 2024 and December 31, 2023.

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

Prior history is considered with respect to the Company having to perform on any off-balance sheet guarantees, as well as future projections of individual customer credit worthiness with respect to assessing credit losses related to off-balance sheet guarantees.

In addition, the Company is contingently liable under letters of credit issued under its $ 250.0 million revolving credit facility (the "Credit Facilities"), which outstanding letters of credit totaled $ 2.4 million as of September 30, 2023.

The outstanding letters of credit expire at various dates through April 2024.

As of September 30, 2023, the Company's foreign subsidiaries are contingently liable for a total of $ 6.1 million in performance letters of credit, advance payments and retention guarantees, of which $ 4.5 million is secured by separate credit facilities with local financial institutions.

Prior history is considered with respect to the Company having to perform on any off-balance sheet guarantees, as well as future projections of individual customer creditworthiness with respect to assessing credit losses related to off-balance sheet guarantees.

In addition, the Company is contingently liable under letters of credit issued under its $ 250.0 million revolving credit facility (the "Credit Facility"), which outstanding letters of credit totaled $ 9.8 million as of March 31, 2024.

The outstanding letters of credit expire at various dates through February 2025.

Unused letters of credit under the Credit Facility are $ 20.2 million as of March 31, 2024.

The Company is additionally contingently liable for a total of $ 7.6 million in performance letters of credit and retention guarantees primarily held by its foreign subsidiaries, of which $ 5.6 million are secured by separate credit facilities with various financial institutions as of March 31, 2024.

As of March 31, 2024, there were $ 10.7 million of unused letters of credit under such separate credit facilities.

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.

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

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.

The 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.

On July 11, 2022 Defendants filed an answer to the complaint, and the action is now in discovery.

On March 22, 2024, the parties notified the District Court that they reached an agreement in principle to resolve this action for $ 13.7 million .

Plaintiff will file a motion seeking entry of an order preliminarily approving the settlement and establishing notice procedures on or before May 6, 2024.

The settlement is subject to both preliminary and final approval by the District Court.

The Company's insurance carriers will fund the entire $ 13.7 million settlement amount.

In connection with the pending settlement, m anagement recorded a liability of $ 13.7 million in " Other current liabilities" and a corresponding $ 13.7 million receivable from the Company's insurance carriers in "Trade receivables, contract assets and other receivables, net" during the first quarter of 2024.

The Company's GEFCO, Inc.

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The complaint alleges breaches of warranty and other similar claims regarding equipment sold by GEFCO in 2013.

In addition to seeking a rescission of the purchase contract, the plaintiff is seeking special and consequential damages.

In addition to seeking a

rescission of the purchase contract, the plaintiff is seeking various relief including special and consequential damages.

The original purchase price of the equipment was approximately $ 8.5 million.

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was dismissed.

The Company and GEFCO each dispute the plaintiffs' allegations and are vigorously defending the GEFCO suit.

The Company and GEFCO each dispute the plaintiffs' allegations and are vigorously defending the suit.

On March 14, 2024, VenVer filed a motion to set a trial date, which is pending with the court.

The Company is unable to determine whether or not a future loss will be incurred due to this litigation or estimate the possible loss or range of loss, if any, at this time.

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All other defendants settled prior to trial except Telsmith.

Telsmith will receive credit for the settlement amounts of all other defendants against any judgment entered in this case against Telsmith.

37 BP alleged breaches of warranty and negligent misrepresentation regarding equipment manufactured by Telsmith and purchased by 37 BP in 2017 through one of the Company's dealers.

Based on the jury verdict, management has determined that a loss for this matter is probable in a range between $ 6.4 million and $ 18.1 million, inclusive of attorneys' fees and prejudgment interest.

A loss contingency of $ 6.4 million was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2023 representing management's best estimate of the loss.

A judgment has not been entered by the trial court, however, a judgment is anticipated to be entered by the end of 2023 or during the first quarter of 2024.

The judgment, once entered, may result in a change to the estimate of loss recorded and will incur post-judgment interest charges.

The Company will evaluate the judgment once entered, including whether to appeal any judgment entered by the court.

On December 19, 2023, a judgment was issued in the amount of $ 7.9 million (the “Judgment”) which takes into account credit for settlement amounts of all other defendants in this case.

Based on the jury verdict, management recorded a loss contingency of $ 6.4 million in "Selling, general and administrative expenses" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2023 representing management's best estimate of the loss at that time.

During the fourth quarter of 2023, the loss contingency was increased $ 1.5 million based on the Judgment to a total of $ 7.9 million for the year ended December 31, 2023.

Telsmith filed a Motion for Judgment Notwithstanding the Verdict that the court denied on December 19, 2023.

Telsmith filed a Motion for New Trial and Motion for Remittitur on January 18, 2024.

The court denied Telsmith's motion for a new trial on February 9, 2024.

On March 13, 2024, Telsmith filed a notice of appeal with the Texas Court of Appeals to appeal the Judgment by the district court.

As of March 31, 2024, $ 8.1 million was the total loss contingency recorded inclusive of post-judgment interest which will continue to be incurred until the appeals process reaches a resolution.

In addition to the matters noted above, the Company is currently a party, and may become a party, to various other claims and legal proceedings in the ordinary course of business.

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Revenue Recognition

The following tables disaggregate the Company's revenue by major source for the three and nine month periods ended September 30, 2023 and 2022 (excluding intercompany sales):

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

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

Net Sales-Domestic:

Equipment sales $ 94.4 $ 54.7 $ 0.5 $ 149.6 $ 105.9 $ 60.6 $ 0.8 $ 167.3

Parts and component sales 50.3 20.5 0.1 70.9 46.3 21.8 0.1 68.2

Service and equipment installation revenue 3.6 0.2 — 3.8 5.2 0.3 — 5.5

Used equipment sales — — — — 3.2 — — 3.2

Freight revenue 5.2 1.9 — 7.1 5.3 2.1 — 7.4

Other 0.3 ( 2.4 ) 0.3 ( 1.8 ) 0.2 ( 2.5 ) 0.1 ( 2.2 )

Total domestic revenue 153.8 74.9 0.9 229.6 166.1 82.3 1.0 249.4

Net Sales-International:

Equipment sales 26.3 23.1 0.7 50.1 23.8 17.7 0.3 41.8

Parts and component sales 9.2 9.9 — 19.1 10.1 9.6 — 19.7

Service and equipment installation revenue 1.0 1.8 0.1 2.9 1.0 0.9 0.1 2.0

Used equipment sales — 0.4 — 0.4 0.3 1.0 — 1.3

Freight revenue 0.5 0.4 — 0.9 0.6 0.3 — 0.9

Other — — 0.1 0.1 — — 0.1 0.1

Total international revenue 37.0 35.6 0.9 73.5 35.8 29.5 0.5 65.8

Total net sales $ 190.8 $ 110.5 $ 1.8 $ 303.1 $ 201.9 $ 111.8 $ 1.5 $ 315.2

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

The following tables disaggregate the Company's revenue by major source for the three-month periods ended March 31, 2024 and 2023 (excluding intercompany sales):

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

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

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Sales into major geographic regions were as follows:

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

Three Months Ended March 31,

(in millions) 2024 2023

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Australia 9.3 9.7

Africa 10.6 10.9 28.6 25.9

Europe 9.0 11.0

Africa 9.0 8.1

Brazil 5.6 4.5

South America (Excluding Brazil) 5.0 5.6

Asia 2.8 1.5 6.5 8.6

Mexico 4.3 0.8

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Total net sales $ 309.2 $ 347.9

As of September 30, 2023, the Company had contract assets of $ 3.6 million and contract liabilities, excluding customer deposits, of $ 6.2 million, including $ 2.6 million of deferred revenue related to extended warranties.

As of March 31, 2024, the Company had contract assets of $ 3.1 million and contract liabilities, excluding customer deposits, of $ 4.9 million, including $ 1.1 million of deferred revenue related to extended warranties.

As of December 31, 2023, the Company had contract assets of $ 3.7 million and contract liabilities, excluding customer deposits, of $ 5.6 million, including $ 0.8 million of deferred revenue related to extended warranties.

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The Company has two reportable segments, each of which 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.

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by the Company's Chief Executive Officer, whom is determined to be the chief operating decision maker ("CODM"), to evaluate performance and allocate resources to the operating segments is Segment Operating Adjusted EBITDA.

Based on a review of these factors, the Company's Australia and Latin America ("LatAm") sites and Astec Digital have changed reportable segments beginning January 1, 2024.

The Australia and LatAm sites were previously reported in the Infrastructure Solutions segment and have moved to the Materials Solutions segment.

Astec Digital was previously included in the Corporate and Other category has moved to the Infrastructure Solutions segment.

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by the Company's Chief Executive Officer ("CEO"), who is considered to be the CODM, to evaluate performance and allocate resources to the operating segments.

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 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.

Beginning January 1, 2024, the Company's presentation of Segment Operating Adjusted EBITDA has been modified to exclude the net income or loss attributable to the noncontrolling interest and include intersegment profit.

Prior periods have been revised to reflect the changes for both the segment composition and the segment profit or loss metric calculation for comparability.

A brief description of each segment is as follows:

Infrastructure Solutions – Sites within the Infrastructure Solutions segment design, engineer, manufacture and market a complete line of asphalt plants, concrete plants and their related components and ancillary equipment as well as supplying asphalt road construction equipment, industrial thermal systems and other heavy equipment.

Infrastructure Solutions – Sites within the Infrastructure Solutions segment design, engineer, manufacture and market a complete line of asphalt plants, concrete plants and their related components and ancillary equipment, including industrial automation controls and telematics platforms, as well as supply asphalt road construction equipment, industrial thermal systems and other heavy equipment.

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

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Materials Solutions – Sites within the Materials Solutions segment design and manufacture heavy processing equipment, in addition to servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets.

The sites within the Materials Solutions segment are primarily 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 the Company's manufacturing sites.

within the Materials Solutions segment are primarily 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 the Company's manufacturing sites.

Additionally, the Materials Solutions segment offers consulting and engineering services to provide complete "turnkey" processing systems.

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 foreign and domestic governmental agencies.

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.

Corporate and Other – The Corporate and Other category consists primarily of the parent company and the captive which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the 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 and included in certain products of the Company's other segments.

The accounting policies of the reportable segments are the same as those described in Note 1, Basis of Presentation and Significant Accounting Policies.

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Segment Information:

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

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

Revenues from external customers $ 190.8 $ 110.5 $ 1.8 $ 303.1 $ 201.9 $ 111.8 $ 1.5 $ 315.2

Intersegment sales 4.3 14.0 — 18.3 1.9 14.1 — 16.0

Segment Operating Adjusted EBITDA 16.5 8.3 ( 14.4 ) 10.4 17.6 13.1 ( 14.2 ) 16.5

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

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

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Segment Operating Adjusted EBITDA 25.6 5.3 ( 12.0 ) 18.9 28.5 14.6 ( 7.9 ) 35.2

A reconciliation of total Segment Operating Adjusted EBITDA to the Company's "Net (loss) income attributable to controlling interest" is as follows:

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

A reconciliation of total Segment Operating Adjusted EBITDA to the Company's "Net income attributable to controlling interest" is as follows:

Three Months Ended March 31,

(in millions) 2024 2023

Net (loss) income attributable to controlling interest

Segment Operating Adjusted EBITDA $ 18.9 $ 35.2

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Restructuring and other related charges ( 0.1 ) ( 7.1 )

Asset impairment — ( 0.4 ) ( 0.8 ) ( 3.4 )

(Loss) gain on sale of property and equipment, net ( 0.4 ) 0.4 3.1 0.4

Transaction costs — ( 0.5 ) — ( 1.9 )

Gain on sale of property and equipment, net 0.9 3.4

Interest expense, net ( 2.1 ) ( 1.5 )

Depreciation and amortization ( 6.5 ) ( 6.3 )

Income tax benefit (provision) 0.6 ( 0.7 ) ( 6.5 ) ( 0.8 )

Net (income) loss attributable to noncontrolling interest ( 0.1 ) 0.2 ( 0.2 ) 0.2

Elimination of intercompany profit ( 0.3 ) ( 0.1 ) ( 1.3 ) —

Net (loss) income attributable to controlling interest $ ( 6.6 ) $ 0.7 $ 18.6 $ 0.9

Strategic Transformation and Restructuring, Impairment and Other Asset Charges, net

The Company is undergoing a multi-year phased implementation of a standardized enterprise resource planning ("ERP") system across the global organization, which will replace much of the existing disparate core financial systems.

Income tax provision ( 1.4 ) ( 4.4 )

Net income attributable to controlling interest $ 3.4 $ 12.1

Strategic Transformation, Restructuring and Other Asset Gains and Charges

The Company's strategic transformation program includes two ongoing initiatives.

The Company is undergoing a multi-year phased implementation of a standardized enterprise resource planning ("ERP") across the global organization, which will replace much of the existing disparate core financial systems.

The upgraded ERP will initially convert internal operations, manufacturing, finance, human capital resources management and customer relationship systems to cloud-based platforms.

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

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.

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

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

Total costs of $ 7.8 million and $ 22.8 million were incurred related to these strategic transformation initiatives in the three and nine months ended September 30, 2023, respectively, of which $ 7.7 million and $ 22.6 million, respectively, are recorded in "Selling, general and administrative expenses" and $ 0.1 million and $ 0.2 million, respectively, are included in "Cost of sales" in the Consolidated Statements of Operations.

Costs totaling $ 7.0 million and $ 18.7 million were incurred in the three and nine months ended September 30, 2022, respectively, and are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

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 the Company may incur gains or losses on these disposals.

Certain of the costs associated with these decisions are separately identified as restructuring.

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

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

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

In addition, a lean manufacturing initiative at one of the Company's largest sites was largely completed during 2023.

Certain capital investments related to this initiative are continuing in early 2024.

Total costs of $ 6.5 million were incurred related to these strategic transformation initiatives in the three months ended March 31, 2024, of which $ 6.4 million and $ 0.1 million are recorded in "Selling, general and administrative expenses" and "Cost of sales," respectively, in the Consolidated Statements of Operations.

Costs totaling $ 7.2 million were incurred in the three months ended March 31, 2023 and are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

Capitalized implementation costs associated with the ERP implementation totaled $ 34.5 million, of which $ 3.9 million and $ 30.6 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of March 31, 2024.

Capitalized implementation costs totaled $ 30.6 million, of which $ 3.3 million

and $ 27.3 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of December 31, 2023.

Amortization of these capitalized implementation costs totaled $ 0.7 million and $ 0.1 million during the three months ended March 31, 2024 and 2023, respectively, which is included in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

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.

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

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

Three Months Ended March 31,

(in millions) 2024 2023

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Costs associated with exited operations - Enid 0.1 0.1

Costs associated with closing Tacoma — — — 0.8

Total restructuring related charges 0.1 7.1

Asset impairment charges:

Other impairment charges — 0.4 0.8 3.4

Total asset impairment charges — 0.4 0.8 3.4

Loss (gain) on sale of property and equipment, net

Loss (gain) on sale of property and equipment, net 0.4 ( 0.4 ) ( 3.1 ) ( 0.4 )

Total loss (gain) on sale of property and equipment, net 0.4 ( 0.4 ) ( 3.1 ) ( 0.4 )

Restructuring, impairment and other asset charges, net $ 0.5 $ 0.1 $ 5.3 $ 4.5

Gain on sale of property and equipment, net:

Gain on sale of property and equipment, net ( 0.9 ) ( 3.4 )

Total gain on sale of property and equipment, net ( 0.9 ) ( 3.4 )

Restructuring and other asset (gains) charges, net $ ( 0.8 ) $ 3.7

Restructuring charges by segment are as follows:

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

Three Months Ended March 31,

(in millions) 2024 2023

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Total restructuring related charges $ 0.1 $ 7.1

Impairment charges by segment are as follows:

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

(in millions) 2023 2022 2023 2022

Infrastructure Solutions $ — $ 0.4 $ — $ 2.5

Corporate and Other — — 0.8 0.9

Total impairment charges $ — $ 0.4 $ 0.8 $ 3.4

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

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

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

Three Months Ended March 31,

(in millions) 2024 2023

Infrastructure Solutions $ ( 0.1 ) $ ( 3.4 )

Corporate and Other — — ( 0.1 ) —

Total loss (gain) on sale of property and equipment, net $ 0.4 $ ( 0.4 ) $ ( 3.1 ) $ ( 0.4 )

Restructuring charges accrued, but not paid, were $ 0.2 million and $ 4.7 million as of September 30, 2023 and December 31, 2022, respectively.

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

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

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

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

The Company recorded the Tacoma facility's land, building and certain equipment assets of $ 15.4 million as held for sale in its Consolidated Balance Sheets as of December 31, 2022.

The sale of these assets was completed in the first quarter of 2023 for $ 19.9 million.

The Company recorded a gain on the sale of $ 3.4 million, which was recorded in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations.

Additional restructuring costs of $ 0.1 million and $ 0.3 million were incurred during the three and nine months ended September 30, 2023, respectively, for the Company's exited oil and gas drilling product lines produced at its former Enid, Oklahoma ("Enid") location.

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

An impairment charge of $ 0.4 million was incurred during the third quarter of 2022 to record certain land and building assets held for sale at fair value less costs to sell.

Materials Solutions ( 0.8 ) —

Total gain on sale of property and equipment, net $ ( 0.9 ) $ ( 3.4 )

In January 2021, the Company announced plans to close the Tacoma, Washington facility in order to simplify and consolidate operations within the Infrastructure Solutions segment.

The sale of the Tacoma facility's land, building and certain equipment assets was completed in the first quarter of 2023 for $ 19.9 million.

The Company recorded a gain on the sale of $ 3.4 million, which was recorded in "Restructuring and other asset (gains) charges, net" in the Consolidated Statements of Operations.

Effective as of January 6, 2023, Mr.

Ruffalo's employment as President and Chief Executive Officer was terminated.

Ruffalo's employment as President and CEO was terminated.

In connection with his separation, the Company entered into an agreement with Mr.

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During the first quarter of 2023, $ 1.8 million of restructuring costs, related to the modification of Mr.

Ruffalo's equity awards and other third-party transition support costs, were recorded in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations.

Ruffalo's equity awards and other third-party transition support costs, were recorded in "Restructuring and other asset (gains) charges, net" in the Consolidated Statements of Operations.

The related recovery of $ 1.6 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the first quarter of 2023.

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In connection with this review, in February 2023, the Company implemented a limited restructuring plan to right-size and reduce the fixed cost structure of certain overhead departments.

Total charges of $ 5.5 million for employee termination costs, including equity award modifications, were recorded in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations, of which $ 5.2 million and $ 0.3 million were recorded in the first and second quarters of 2023, respectively.

The related recovery of $ 1.0 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations, of which $ 0.8 million and $ 0.2 million were recorded during the first and second quarters of 2023, respectively.

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 nine months ended September 30, 2022.

An additional $ 0.8 million and $ 0.9 million of impairment charges were incurred related to abandoned in-process internally developed software that was determined to be impaired during the nine months ended September 30, 2023 and 2022, respectively.

(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 deferred compensation programs, using the treasury stock method.

Charges of $ 5.2 million for employee termination costs, including equity award modifications, were incurred in the first quarter of 2023 and recorded in "Restructuring and other asset (gains) charges, net" in the Consolidated Statements of Operations.

The related recovery of $ 0.8 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

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 deferred compensation programs, 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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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

Three Months Ended March 31,

Denominator for basic earnings per common share 22,762,098 22,655,821

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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-Q

Item 1. Financial Statements