What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 129 added, 122 removed, 505 unchanged (33% of the section changed)

3 unchanged sentences

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

1 unchanged sentence

Investments 3.6 5.7

Trade receivables, contract assets and other receivables, net of allowance for credit losses of $ 5.5 and $ 4.0 , respectively

Trade receivables, contract assets and other receivables, net of allowance for credit losses of $ 3.3 at each date

Inventories 466.4 455.6

28 unchanged sentences

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

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

issued and outstanding – 22,801,785 as of September 30, 2024 and 22,740,635 as of December 31, 2023

Additional paid-in capital 141.6 138.4

10 unchanged sentences

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

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

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

2024 2023 2024 2023

9 unchanged sentences

Interest income 0.5 0.5 1.5 1.5

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

Other income, net 0.8 — 1.0 0.5

(Loss) income before income taxes ( 8.5 ) ( 7.1 ) ( 17.5 ) 25.3

Income tax provision 0.3 2.7 1.7 7.1

Income tax (benefit) provision ( 2.3 ) ( 0.6 ) ( 0.6 ) 6.5

Net (loss) income ( 6.2 ) ( 6.5 ) ( 16.9 ) 18.8

10 unchanged sentences

(In millions, unaudited)

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

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

2024 2023 2024 2023

Net (loss) income $ ( 6.2 ) $ ( 6.5 ) $ ( 16.9 ) $ 18.8

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments 5.8 ( 4.6 ) — ( 4.0 )

Other comprehensive (loss) income ( 1.4 ) 0.5 ( 5.8 ) 0.6

Other comprehensive income (loss) 5.8 ( 4.6 ) — ( 4.0 )

Comprehensive (loss) income ( 0.4 ) ( 11.1 ) ( 16.9 ) 14.8

5 unchanged sentences

(In millions, unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

31 unchanged sentences

Sale of investments 0.6 1.7

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

Net cash used in investing activities ( 14.0 ) ( 3.9 )

ASTEC INDUSTRIES, INC.

1 unchanged sentence

(In millions, unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities:

4 unchanged sentences

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

Net cash provided by (used in) financing activities 49.5 ( 22.0 )

Net cash provided by financing activities 19.5 30.8

Effect of exchange rates on cash 0.2 ( 0.3 )

4 unchanged sentences

Cash paid during the year for:

Interest, net of capitalized interest $ 3.8 $ 2.6

Income taxes paid $ 4.4 $ 5.5

Interest $ 6.5 $ 5.0

Income taxes paid, net $ 6.3 $ 10.3

Supplemental disclosures of non-cash items:

26 unchanged sentences

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

Net loss — — — — — ( 6.2 ) — ( 6.2 )

Other comprehensive income — — — 5.8 — — — 5.8

Dividends ($ 0.13 per share)

— — — — — ( 3.0 ) — ( 3.0 )

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

Issuance of common stock under incentive plan 1,204 — — — — — — —

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

Balance, September 30, 2024 22,801,785 $ 4.6 $ 141.6 $ ( 37.9 ) $ ( 0.5 ) $ 523.6 $ — $ 631.4

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

16 unchanged sentences

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

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

38 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 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.

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

7 unchanged sentences

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.

The Company is currently finalizing the assessment of the impact this ASU will have on its financial statement disclosures, but this standard will not impact the Company's results of operations or financial position.

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

3 unchanged sentences

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.

The Company is currently evaluating the impact this ASU will have on its financial statement disclosures, but this standard will not impact the Company's results of operations or financial position.

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

4 unchanged sentences

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

However, the disclosure requirements of this rule and the timing of its effectiveness is uncertain pending the resolution of the judicial review.

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

1 unchanged sentence

Inventories consist of the following:

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

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

Raw materials and parts $ 284.0 $ 298.6

7 unchanged sentences

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.

Consequently, the Company owns the assets and the related offsetting liability for disbursement until

such time as a participant makes a qualifying withdrawal.

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 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.

8 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 June 30, 2024 and December 31, 2023 are Level 1 and Level 2 in the fair value hierarchy defined above:

June 30, 2024

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

September 30, 2024

(in millions) Level 1 Level 2 Total

47 unchanged sentences

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.

As a result, the Company recognized a pretax 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

4 unchanged sentences

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

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

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

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

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

(in millions) 2024 2023 2024 2023

8 unchanged sentences

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

Total accrued loss reserves were $ 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.

Total accrued loss reserves were $ 6.9 million and $ 7.2 million as of September 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 September 30, 2024 and December 31, 2023, respectively.

For the three months ended September 30, 2024, the Company recorded an income tax benefit of $ 2.3 million, reflecting a 27.1 % effective tax rate, compared to $ 0.6 million for the three months ended September 30, 2023, reflecting an 8.5 % effective tax rate.

The income tax benefit for the three months ended September 30, 2024 was higher compared to the same period in 2023 primarily due to higher pretax book loss and changes in the relative weighting of jurisdictional income and loss.

For the nine months ended September 30, 2024, the Company recorded an income tax benefit of $ 0.6 million, reflecting a 3.4 % effective tax rate, compared to a provision of $ 6.5 million for the nine months ended September 30, 2023, reflecting a 25.7 % effective tax rate.

The income tax benefit for the nine months ended September 30, 2024 as compared to an expense in the same period in 2023 was 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 $ 13.7 million and $ 13.0 million as of September 30, 2024 and December 31, 2023, respectively.

The increase is the result of $ 0.7 million of incremental reserves associated with a research and development credit generated during 2024.

3 unchanged sentences

Internal Revenue Service for the federal income tax return from the 2018 tax year as well as various other state income tax and jurisdictional audits.

As of June 30, 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 September 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 June 30, 2024 and December 31, 2023, respectively.

Under these arrangements, the Company is contingently liable for customer debt of $ 1.5 million and $ 1.1 million as of September 30, 2024 and December 31, 2023, respectively.

These arrangements expire at various dates 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

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 $ 0.4 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 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 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 June 30, 2024.

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.

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

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

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

The complaint generally 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 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, 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 outstanding letters of credit expire at various dates through September 2025.

Unused letters of credit under the Credit Facility are $ 21.4 million as of September 30, 2024.

The Company is additionally contingently liable for a total of $ 5.8 million in performance letters of credit and retention guarantees primarily held by its foreign subsidiaries, of which $ 4.0 million are secured by separate credit facilities with various financial institutions as of September 30, 2024.

As of September 30, 2024, there were $ 12.9 million of unused letters of credit under such separate credit facilities.

The Company and certain of its former executive officers were previously named as defendants in a putative shareholder class action lawsuit filed in 2019 alleging 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.

On September 10, 2024, the court formally approved the parties' agreement to settle the action for $ 13.7 million, which was funded entirely by the Company's insurance carriers into escrow , and the settlement agreement was entered into between the parties.

The court dismissed the case with prejudice the same day.

In connection with the settlement, management previously 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.

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

The action is styled VenVer S.A.

and Americas Coil Tubing LLP v.

GEFCO, Inc., Case No.

CIV-18-790-SLP.

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.

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

On July 7, 2020, the plaintiffs filed a separate lawsuit directly against Astec Industries, Inc.

that generally mirrored the allegations in the GEFCO suit.

In January 2023, the court allowed Astec Industries, Inc.

to be added as a defendant to the GEFCO suit and, as a result, the separate suit against Astec Industries, Inc.

was dismissed.

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.

("GEFCO" or "Enid") subsidiary has been named a defendant in a lawsuit originally filed in 2018.

The complaint alleged breaches of warranty and other similar claims regarding equipment sold by GEFCO in 2013 and also sought special and consequential damages.

On October 8, 2024, the parties reached an agreement to resolve this action for $ 8.4 million for which management recorded a loss in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2024.

On October 5, 2023, a jury in the 355 th Judicial District Court, Hood County, State of Texas, rendered a verdict against the Company's Telsmith, Inc.

2 unchanged sentences

("Telsmith"), et al.

originally filed on January 28, 2019, with additional defendants later added.

All other defendants settled prior to trial except Telsmith.

originally filed on January 28, 2019.

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.

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.

On December 19, 2023, a judgment was issued in the amount of $ 7.9 million (the "Judgment") against Telsmith.

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.

1 unchanged sentence

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 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.

Telsmith filed a Motion for New Trial and Motion for Remittitur in January 2024.

The court denied Telsmith's motion for a new trial in February 2024.

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

As of June 30, 2024, the total loss contingency recorded inclusive of post-judgment interest was $ 8.2 million.

In September 2024, the parties reached an agreement to resolve this action for $ 6.3 million, which the Company paid in September 2024 whereby the full loss contingency was released.

The $ 1.9 million net impact of the loss contingency release and the final settlement amount was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the third quarter of 2024.

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.

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.

1 unchanged sentence

Based upon currently available information and with the advice of counsel, management believes that the ultimate outcome of its current claims and legal proceedings, individually and in the aggregate, will not have a material adverse effect on the Company's financial position, cash flows or results of operations.

However, claims and legal proceedings are subject to inherent uncertainties, and rulings unfavorable to the Company could occur.

However, claims and legal proceedings are subject to inherent

uncertainties, and rulings unfavorable to the Company could occur.

If an unfavorable ruling were to occur, there exists the possibility of a material adverse effect on the Company's financial position, cash flows or results of operations.

Revenue Recognition

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

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

Three Months Ended September 30, 2024 Three Months Ended September 30, 2023

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

Net Sales-Domestic:

2 unchanged sentences

Service and equipment installation revenue 4.7 0.2 4.9 3.6 0.2 3.8

Used equipment sales 0.1 — — 0.1 1.7 — — 1.7

Freight revenue 5.3 1.5 6.8 5.2 1.9 7.1

10 unchanged sentences

Total net sales $ 165.0 $ 126.4 $ 291.4 $ 163.2 $ 139.9 $ 303.1

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

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

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

Net Sales-Domestic:

16 unchanged sentences

Sales into major geographic regions were as follows:

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

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

(in millions) 2024 2023 2024 2023

1 unchanged sentence

Canada 10.9 13.4 52.5 48.7

Africa 12.2 9.9 21.2 18.0

Australia 25.0 20.6 44.3 44.4

Africa 9.1 10.6 30.3 28.6

Europe 7.5 8.0 24.2 24.5

1 unchanged sentence

Brazil 8.5 8.3 19.9 22.1

Asia 3.9 2.8 7.6 3.7

South America (Excluding Brazil) 3.8 5.1 12.0 14.4

Asia 2.7 2.8 10.3 6.5

Central America (Excluding Mexico) 1.1 0.5 2.5 3.6

2 unchanged sentences

Total net sales $ 291.4 $ 303.1 $ 946.1 $ 1,001.0

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 September 30, 2024, the Company had contract assets of $ 6.6 million and contract liabilities, excluding customer deposits, of $ 8.1 million, including $ 1.3 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.

Segment Information

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.

reviews results and the nature of the production process, among other considerations.

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.

Astec Digital was previously included in the Corporate and Other category and 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.

8 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, 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.

The 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.

1 unchanged sentence

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

Segment Information:

3 unchanged sentences

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,

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

(in millions) 2024 2023 2024 2023

2 unchanged sentences

Materials Solutions 126.4 139.9 357.5 422.9

Revenues from external customers - reportable segments 345.5 350.2 654.7 697.9

Corporate and Other — ( 0.2 ) — —

Net sales $ 291.4 $ 303.1 $ 946.1 $ 1,001.0

3 unchanged sentences

Intersegment revenues $ 27.1 $ 12.0 $ 44.2 $ 29.4

Segment Operating Adjusted EBITDA

Reportable Segment Operating Adjusted EBITDA

Infrastructure Solutions $ 15.6 $ 13.3 $ 68.4 $ 67.5

1 unchanged sentence

Segment Operating Adjusted EBITDA - Reportable Segments 30.1 22.8 98.4 109.9

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

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

Corporate and Other ( 12.7 ) ( 12.8 ) ( 34.5 ) ( 32.5 )

2 unchanged sentences

Goodwill impairment — — ( 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

Asset impairment — — — ( 0.8 )

(Loss) gain on sale of property and equipment, net — ( 0.4 ) 1.1 3.1

Interest expense, net ( 2.1 ) ( 1.9 ) ( 6.9 ) ( 4.9 )

7 unchanged sentences

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 associated with the ERP implementation totaled $ 32.8 million, of which $ 3.7 million and $ 29.1 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of September 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,

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

(in millions) 2024 2023 2024 2023

7 unchanged sentences

$ 1.0 $ 0.7 $ 2.7 $ 1.2

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

(a) Amortization of capitalized implementation costs is recorded 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, 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,

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

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

(in millions) 2024 2023 2024 2023

Restructuring charges:

Costs associated with exited operations – Enid $ 8.4 $ 0.1 $ 8.5 $ 0.3

Workforce reductions — — 0.9 —

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

Costs associated with exited operations – Enid — 0.1 0.1 0.2

Total restructuring related charges 8.4 0.1 9.4 7.6

2 unchanged sentences

Total asset impairment charges — — — 0.8

Gain on sale of property and equipment, net:

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

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

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

Loss (gain) on sale of property and equipment, net — 0.4 ( 1.1 ) ( 3.1 )

Total loss (gain) on sale of property and equipment, net — 0.4 ( 1.1 ) ( 3.1 )

Restructuring, other impairment and asset charges, net $ 8.4 $ 0.5 $ 8.3 $ 5.3

Restructuring charges by segment are as follows:

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

Restructuring charges by reportable segment and the Corporate and Other category are as follows:

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

(in millions) 2024 2023 2024 2023

3 unchanged sentences

Total restructuring related charges $ 8.4 $ 0.1 $ 9.4 $ 7.6

Asset impairment charges by segment are as follows:

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

Asset impairment charges by reportable segment and the Corporate and Other category are as follows:

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

(in millions) 2024 2023 2024 2023

1 unchanged sentence

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

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

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

Loss (gain) on sale of property and equipment, net by reportable segment and the Corporate and Other category are as follows:

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

(in millions) 2024 2023 2024 2023

2 unchanged sentences

Corporate and Other — 0.1 — —

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

Total loss (gain) on sale of property and equipment, net $ — $ 0.4 $ ( 1.1 ) $ ( 3.1 )

Restructuring charges accrued, but not paid, were $ 8.5 million and $ 0.1 million as of September 30, 2024 and December 31, 2023, respectively.

On October 8, 2024, the Company reached an agreement to resolve the action styled VenVer S.A.

and Americas Coil Tubing LLP v.

GEFCO, Inc., related to the Company's former Enid, Oklahoma site, for $ 8.4 million.

In connection with the settlement, management recorded a loss within the Infrastructure Solutions segment of $ 8.4 million in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2024.

See Note 8, Commitments and Contingencies for further discussion of this matter.

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.

14 unchanged sentences

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.

Total charges of $ 5.5 million for employee termination costs, including equity award modifications, were recorded in "Restructuring, other impairment and 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 in the first and second quarters of 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.

1 unchanged sentence

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.

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 (loss) earnings per common share:

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

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

2024 2023 2024 2023

4 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