What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-08 compared with 2024-05-02 · 191 added, 102 removed, 436 unchanged (40% of the section changed)

3 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

32 unchanged sentences

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

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

issued and outstanding – 22,800,581 as of June 30, 2024 and 22,740,635 as of December 31, 2023

Additional paid-in capital 140.3 138.4

10 unchanged sentences

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

Three Months Ended March 31,

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

2024 2023 2024 2023

Net sales $ 345.5 $ 350.0 $ 654.7 $ 697.9

2 unchanged sentences

Selling, general and administrative expenses 71.1 64.5 142.5 132.4

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

Income from operations 6.3 17.6

Goodwill impairment 20.2 — 20.2 —

Restructuring, other impairment and asset charges, net 0.7 1.1 ( 0.1 ) 4.8

(Loss) income from operations ( 10.7 ) 17.3 ( 4.4 ) 34.9

Other expenses, net:

1 unchanged sentence

Interest income 0.4 0.5 1.0 1.0

Other income, net 0.5 0.4

Income before income taxes 4.7 16.5

Other (expenses) income, net ( 0.3 ) 0.1 0.2 0.5

(Loss) income before income taxes ( 13.7 ) 15.9 ( 9.0 ) 32.4

Income tax provision 0.3 2.7 1.7 7.1

Net income 3.3 12.1

Net loss attributable to noncontrolling interest 0.1 —

Net income attributable to controlling interest $ 3.4 $ 12.1

Net (loss) income ( 14.0 ) 13.2 ( 10.7 ) 25.3

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

Net (loss) income attributable to controlling interest $ ( 14.0 ) $ 13.1 $ ( 10.6 ) $ 25.2

Per share data:

Earnings per common share - Basic $ 0.15 $ 0.53

Earnings per common share - Diluted $ 0.15 $ 0.53

(Loss) earnings per common share - Basic $ ( 0.61 ) $ 0.58 $ ( 0.47 ) $ 1.11

(Loss) earnings per common share - Diluted $ ( 0.61 ) $ 0.58 $ ( 0.47 ) $ 1.11

Weighted average shares outstanding - Basic 22,796,729 22,723,748 22,779,414 22,689,990

4 unchanged sentences

(In millions, unaudited)

Three Months Ended March 31,

Net income $ 3.3 $ 12.1

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

2024 2023 2024 2023

Net (loss) income $ ( 14.0 ) $ 13.2 $ ( 10.7 ) $ 25.3

Other comprehensive (loss) income:

8 unchanged sentences

(In millions, unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income $ 3.3 $ 12.1

Adjustments to reconcile net income to net cash used in operating activities:

Net (loss) income $ ( 10.7 ) $ 25.3

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Depreciation and amortization 13.1 12.5

1 unchanged sentence

Provision for warranties 8.7 10.6

Deferred compensation expense 0.1 —

Deferred compensation (benefit) expense ( 0.2 ) 0.1

Share-based compensation 2.3 2.2

1 unchanged sentence

Gain on disposition of property and equipment, net ( 1.1 ) ( 3.5 )

Goodwill impairment 20.2 —

Other impairment charges — 0.8

Amortization of debt issuance costs 0.2 0.2

18 unchanged sentences

Purchase of investments ( 0.7 ) ( 0.5 )

Sale of investments 0.4 0.1

Net cash (used in) provided by investing activities ( 12.6 ) 2.6

2 unchanged sentences

(In millions, unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

2 unchanged sentences

Repayments of borrowings on credit facilities and bank loans ( 51.4 ) ( 128.1 )

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

Withholding tax paid upon vesting of share-based compensation awards ( 0.5 ) ( 1.6 )

1 unchanged sentence

Effect of exchange rates on cash ( 0.8 ) 0.4

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

(Decrease) increase in cash, cash equivalents and restricted cash — ( 21.5 )

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

23 unchanged sentences

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

Net loss — — — — — ( 14.0 ) — ( 14.0 )

Other comprehensive loss — — — ( 1.2 ) — — ( 0.2 ) ( 1.4 )

Dividends ($ 0.13 per share)

— — — — — ( 3.0 ) — ( 3.0 )

Share-based compensation — — 1.1 — — — — 1.1

Issuance of common stock under incentive plan 35,618 0.1 — — — — — 0.1

Withholding tax paid upon equity award vesting — — ( 0.1 ) — — — — ( 0.1 )

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

Balance, June 30, 2024 22,800,581 $ 4.6 $ 140.3 $ ( 43.7 ) $ ( 0.7 ) $ 532.8 $ — $ 633.3

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 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

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

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

Since the Company controls this subsidiary, the subsidiary's financial statements are consolidated with those of the Company, and the noncontrolling owner's 7 % share of the subsidiary's net assets and results of operations is deducted and reported as "Noncontrolling interest" in the Consolidated Balance Sheets and as "Net (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 to acquire their outstanding interest in full for R$ 10.0 M (approximately $ 2.0 million, subject to the effect of exchange rates).

6 unchanged sentences

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 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.

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 six months ended June 30, 2024 and 2023, the financial position as of June 30, 2024 and December 31, 2023 and the cash flows for the six months ended June 30, 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.

23 unchanged sentences

Inventories consist of the following:

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

(in millions) June 30, 2024 December 31, 2023

Raw materials and parts $ 286.7 $ 298.6

21 unchanged sentences

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

As indicated in the tables below, the Company has determined that all of its financial assets and liabilities as of June 30, 2024 and December 31, 2023 are Level 1 and Level 2 in the fair value hierarchy defined above:

June 30, 2024

(in millions) Level 1 Level 2 Total

36 unchanged sentences

Total financial liabilities $ — $ 5.6 $ 5.6

During the second quarter of 2024, the Company identified that indicators of goodwill impairment were present due to current macroeconomic conditions, including declines in the Company's publicly quoted share price and increased interest rates, as well as lower than expected operating results.

These factors indicated that one or more of the Company's reporting units may have fallen below their carrying amounts.

A qualitative assessment on all reporting units was performed and the Company concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.

The Company determined the fair value of the Materials Solutions reporting unit using an equally weighted combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach.

The significant assumptions used under the discounted cash flow method are projected net sales, projected earnings before interest, tax, depreciation and amortization ("EBITDA"), terminal growth rates, and the cost of capital.

Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are primary drivers of the projected cash flows in the discounted cash flow fair value model.

Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows.

The Company calculates the discount rate based on a market-participant, risk-adjusted weighted average cost of capital, which considers industry specific rates of return on debt and equity capital for a target industry capital structure, adjusted for risks associated with business size, geography and other factors specific to the reporting unit.

A change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying value of the reporting unit exceeding its fair value.

For the guideline public company method, significant assumptions relate to the selection of appropriate guideline companies and related valuation multiples used in the market analysis.

Based on the quantitative impairment test, the Company determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024.

As a result, the Company recognized a pre-tax non-cash goodwill impairment charge of $ 20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.

Product Warranty Reserves

1 unchanged sentence

The warranty period and performance standards vary by market and uses of its products, but generally range from three months to two years or up to a specified number of hours of operation.

The Company estimates the costs that may be incurred under its warranties and records a liability at the time product sales are recorded.

The Company estimates the costs that may be incurred under its warranties and

records a liability at the time product sales are recorded.

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

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

Three Months Ended March 31,

Changes in the Company's product warranty liability for the three and six month periods ended June 30, 2024 and 2023 are as follows:

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

(in millions) 2024 2023 2024 2023

2 unchanged sentences

Warranty liabilities settled ( 5.2 ) ( 2.6 ) ( 9.7 ) ( 6.0 )

Other ( 0.1 ) — ( 0.1 ) —

Reserve balance, end of the period $ 15.4 $ 16.5 $ 15.4 $ 16.5

3 unchanged sentences

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

Total accrued loss reserves were $ 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.

Total accrued loss reserves were $ 7.1 million and $ 7.2 million as of June 30, 2024 and December 31, 2023, respectively, of which $ 5.1 million and $ 4.5 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.

For the three months ended June 30, 2024, the Company recorded an income tax provision of $ 0.3 million, reflecting a ( 2.2 )% effective tax rate, compared to $ 2.7 million for the three months ended June 30, 2023, reflecting a 17.0 % effective tax rate.

The income tax expense for the three months ended June 30, 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, partially offset by a net nondeductible goodwill impairment.

For the six months ended June 30, 2024, the Company recorded an income tax provision of $ 1.7 million, reflecting a ( 18.9 )% effective tax rate, compared to $ 7.1 million for the six months ended June 30, 2023, reflecting a 21.9 % effective tax rate.

The income tax expense for the six months ended June 30, 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, partially offset by a net nondeductible goodwill impairment.

The Company's recorded liability for uncertain tax positions was $ 13.4 million and $ 13.0 million as of June 30, 2024 and December 31, 2023, respectively.

The increase is the result of $ 0.4 million of incremental reserves associated with a research and development credit generated during 2024.

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

2 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 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.

As of June 30, 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.

2 unchanged sentences

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 $ 1.1 million as of March 31, 2024 and December 31, 2023, respectively.

These arrangements expire at various dates running through September 2026.

Additionally, the Company is also contingently liable for 1.75 % of the unpaid balance, determined as of December 31 of the prior year (or approximately $ 0.1 million for 2024), on certain past customer equipment purchases that were financed by an outside finance company.

Under these arrangements, the Company is contingently liable for customer debt of $ 0.9 million and $ 1.1 million as of June 30, 2024 and December 31, 2023, respectively.

These arrangements expire at various dates through September 2026.

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 $ 0.6 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 has recorded a liability of $ 0.4 million and $ 0.6 million related to these guarantees, which were included in "Other current liabilities" in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.

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 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 outstanding letters of credit expire at various dates through April 2025.

Unused letters of credit under the Credit Facility are $ 20.2 million as of June 30, 2024.

The Company is additionally contingently liable for a total of $ 5.1 million in performance letters of credit and retention guarantees primarily held by its foreign subsidiaries, of which $ 3.3 million are secured by separate credit facilities with various financial institutions as of June 30, 2024.

As of June 30, 2024, there were $ 13.1 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.

3 unchanged sentences

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

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

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

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

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

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

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

On May 16, 2024, the court entered an order preliminarily approving the settle ment and establishing notice procedures and set a final settlement approval hearing for September 5, 2024.

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.

In connection with the pending settlement, management recorde d 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.

5 unchanged sentences

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 various relief including 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.

21 unchanged sentences

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.

As of June 30, 2024, $ 8.2 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.

If management believes that a loss arising from any claims and legal proceedings is probable and can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal fees) or, when the loss is estimated using a range and no point within the range is more probable than another, the minimum estimated liability.

minimum estimated liability.

As management becomes aware of additional information concerning such contingencies, any potential liability related to these matters is assessed and the estimates are revised, if necessary.

4 unchanged sentences

Revenue Recognition

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

The following tables disaggregate the Company's revenue by major source for the three and six-month periods ended June 30, 2024 and 2023 (excluding intercompany sales):

Three Months Ended June 30, 2024 Three Months Ended June 30, 2023

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

16 unchanged sentences

Total net sales $ 221.4 $ 124.1 $ — $ 345.5 $ 199.4 $ 150.8 $ ( 0.2 ) $ 350.0

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023

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

Net Sales-Domestic:

Equipment sales $ 249.3 $ 81.3 $ — $ 330.6 $ 221.9 $ 143.1 $ — $ 365.0

Parts and component sales 118.0 39.9 — 157.9 109.7 43.6 — 153.3

Service and equipment installation revenue 13.4 0.3 — 13.7 34.5 0.4 — 34.9

Used equipment sales 0.1 — — 0.1 2.6 — — 2.6

Freight revenue 11.0 3.6 — 14.6 12.2 4.5 — 16.7

Other 1.3 ( 2.9 ) — ( 1.6 ) 0.3 ( 5.1 ) — ( 4.8 )

Total domestic revenue 393.1 122.2 — 515.3 381.2 186.5 — 567.7

Net Sales-International:

Equipment sales 17.9 68.7 — 86.6 21.5 57.5 — 79.0

Parts and component sales 11.7 33.4 — 45.1 10.7 31.7 — 42.4

Service and equipment installation revenue 0.4 5.4 — 5.8 0.8 4.1 — 4.9

Used equipment sales — — — — — 1.4 — 1.4

Freight revenue 0.5 1.4 — 1.9 0.6 1.8 — 2.4

Other — — — — 0.1 — — 0.1

Total international revenue 30.5 108.9 — 139.4 33.7 96.5 — 130.2

Total net sales $ 423.6 $ 231.1 $ — $ 654.7 $ 414.9 $ 283.0 $ — $ 697.9

Sales into major geographic regions were as follows:

Three Months Ended March 31,

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

(in millions) 2024 2023 2024 2023

1 unchanged sentence

Canada 22.7 13.5 41.6 35.3

Africa 12.2 9.9 21.2 18.0

Australia 10.0 14.1 19.3 23.8

Europe 7.7 5.5 16.7 16.5

Africa 9.0 8.1

Mexico 6.6 2.0 10.9 2.8

Brazil 5.8 9.3 11.4 13.8

Asia 3.9 2.8 7.6 3.7

South America (Excluding Brazil) 3.2 3.7 8.2 9.3

Mexico 4.3 0.8

Central America (Excluding Mexico) 0.7 1.0 1.4 3.1

2 unchanged sentences

Total net sales $ 345.5 $ 350.0 $ 654.7 $ 697.9

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 June 30, 2024, the Company had contract assets of $ 4.1 million and contract liabilities, excluding customer deposits, of $ 6.8 million, including $ 0.9 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.

5 unchanged sentences

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.

Segment Operating Adjusted EBITDA is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance.

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.

6 unchanged sentences

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.

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, Australia and LatAm 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 the Company's manufacturing sites.

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

2 unchanged sentences

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

Segment Information:

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

Intersegment sales and transfers between foreign subsidiaries are valued at prices comparable to those for unrelated parties.

Segment Information:

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

Revenues from external customers $ 202.2 $ 107.0 $ — $ 309.2 $ 215.5 $ 132.2 $ 0.2 $ 347.9

Intersegment sales 6.8 0.5 — 7.3 6.6 0.4 — 7.0

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 income attributable to controlling interest" is as follows:

Three Months Ended March 31,

The Company has revised its presentation for the prior periods below to remove the presentation of Corporate and Other in conjunction with the reportable segment results and reconcile the total of the reportable segments’ revenues from external customers and measure of profit or loss to "Net sales" and "(Loss) income before income taxes", respectively, whereby Corporate and Other costs, net of eliminations, have been removed from total reportable segments’ revenues from external customers and Segment Operating Adjusted EBITDA and included in the reconciliations to "Net sales" and "(Loss) income before income taxes", respectively.

Segment information for the Company’s reportable segments and related reconciliations are set forth below:

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

(in millions) 2024 2023 2024 2023

Revenues from external customers

Infrastructure Solutions $ 221.4 $ 199.4 $ 423.6 $ 414.9

Materials Solutions 124.1 150.8 231.1 283.0

Revenues from external customers - reportable segments 345.5 350.2 654.7 697.9

Corporate and Other — ( 0.2 ) — —

Net sales $ 345.5 $ 350.0 $ 654.7 $ 697.9

Intersegment revenues

Infrastructure Solutions $ 8.9 $ 10.1 $ 15.7 $ 16.7

Materials Solutions 0.9 0.3 1.4 0.7

Intersegment revenues $ 9.8 $ 10.4 $ 17.1 $ 17.4

Segment Operating Adjusted EBITDA

Infrastructure Solutions $ 27.2 $ 25.7 $ 52.8 $ 54.2

Materials Solutions 10.2 18.3 15.5 32.9

Segment Operating Adjusted EBITDA - reportable segments 37.4 44.0 68.3 87.1

Reconciliation of Segment Operating Adjusted EBITDA to "(Loss) income before income taxes"

Corporate and Other ( 9.8 ) ( 11.8 ) ( 21.8 ) ( 19.7 )

Transformation program ( 11.1 ) ( 7.6 ) ( 17.4 ) ( 14.8 )

Restructuring and other related charges ( 0.9 ) ( 0.4 ) ( 1.0 ) ( 7.5 )

Goodwill impairment ( 20.2 ) — ( 20.2 ) —

Other impairment charges — ( 0.8 ) — ( 0.8 )

Gain on sale of property and equipment, net 0.2 0.1 1.1 3.5

1 unchanged sentence

Depreciation and amortization ( 6.6 ) ( 6.2 ) ( 13.1 ) ( 12.5 )

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.

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

(Loss) income before income taxes $ ( 13.7 ) $ 15.9 $ ( 9.0 ) $ 32.4

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

The Company's strategic transformation program includes the ongoing multi-year phased implementation of a standardized enterprise resource planning ("ERP"), which is replacing 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.

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

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, a lean manufacturing initiative at one of the Company's largest sites was largely completed during 2023 with certain capital investments finalized in early 2024.

Capitalized implementation costs associated with the ERP implementation totaled $ 33.8 million, of which $ 3.8 million and $ 30.0 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of June 30, 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.

Costs associated with these strategic transformation programs are presented below:

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

(in millions) 2024 2023 2024 2023

Strategic transformation programs

Selling, general and administrative expenses

$ 11.0 $ 7.7 $ 17.4 $ 14.9

Cost of sales

0.2 0.1 0.3 0.1

Total costs related to strategic transformation initiatives $ 11.2 $ 7.8 $ 17.7 $ 15.0

Amortization of capitalized implementation costs (a)

$ 1.0 $ 0.4 $ 1.7 $ 0.5

(a) Amortization of capitalized implementation costs is recorded in "Selling, general and administrative expenses" in the Consolidated Statement 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,

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

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

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

(in millions) 2024 2023 2024 2023

Restructuring charges:

Workforce reductions $ 0.9 $ — $ 0.9 $ —

Costs associated with leadership change and overhead restructuring — 0.3 — 7.3

1 unchanged sentence

Total restructuring related charges 0.9 0.4 1.0 7.5

Asset impairment charges:

Other impairment charges — 0.8 — 0.8

Total asset impairment charges — 0.8 — 0.8

Gain on sale of property and equipment, net:

1 unchanged sentence

Total gain on sale of property and equipment, net ( 0.2 ) ( 0.1 ) ( 1.1 ) ( 3.5 )

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

Restructuring, other impairment and asset charges, net $ 0.7 $ 1.1 $ ( 0.1 ) $ 4.8

Restructuring charges by segment are as follows:

Three Months Ended March 31,

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

(in millions) 2024 2023 2024 2023

Infrastructure Solutions $ 0.4 $ — $ 0.5 $ 1.0

Materials Solutions 0.3 0.1 0.3 0.1

Corporate and Other 0.2 0.3 0.2 6.4

Total restructuring related charges $ 0.9 $ 0.4 $ 1.0 $ 7.5

Asset impairment charges by segment are as follows:

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

(in millions) 2024 2023 2024 2023

Corporate and Other $ — $ 0.8 $ — $ 0.8

Total asset impairment charges $ — $ 0.8 $ — $ 0.8

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

Three Months Ended March 31,

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

(in millions) 2024 2023 2024 2023

1 unchanged sentence

Materials Solutions — — ( 0.8 ) —

Corporate and Other — ( 0.1 ) — ( 0.1 )

Total gain on sale of property and equipment, net $ ( 0.2 ) $ ( 0.1 ) $ ( 1.1 ) $ ( 3.5 )

1 unchanged sentence

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.

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

Effective as of January 6, 2023, Mr.

4 unchanged sentences

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 and other asset (gains) charges, net" in the Consolidated Statements of Operations.

Ruffalo's equity awards and other third-party transition support costs, were recorded in "Restructuring, other impairment and asset 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.

2 unchanged sentences

Management continually reviews the Company's organizational structure and operations to ensure they are optimized and aligned with achieving near-term and long-term operational and profitability targets.

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.

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.

In connection with this review, the Company effected workforce reductions during the second quarter of 2024, whereby charges of $ 0.9 million were incurred during the three months ended June 30, 2024 and recorded in "Restructuring, other impairment and asset charges, net" in the Consolidated Statements of Operations.

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

Charges of $ 0.3 million and $ 5.5 million for employee termination costs, including equity award modifications, were incurred in three and six months ended June 30, 2023, respectively, and recorded in "Restructuring, other impairment and asset charges, net" in the Consolidated Statements of Operations.

The related recovery of $ 0.2 million and $ 1.0 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the three and six months ended June 30, 2023, respectively.

Asset impairment charges of $ 0.8 million were incurred related to abandoned in-process internally developed software that was determined to be impaired during the second quarter of 2023.

(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.

Potential common shares that have an antidilutive effect (i.e.

those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share.

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

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

Three Months Ended March 31,

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

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

2024 2023 2024 2023

Denominator for basic earnings per common share 22,796,729 22,723,748 22,779,414 22,689,990

3 unchanged sentences

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