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ASTEC INDUSTRIES INC

ASTE
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Business Summary

Astec Industries, Inc. designs, engineers, manufactures, markets and services equipment and components used primarily in asphalt and concrete road building and related construction activities, as well as equipment for the mining, quarrying, construction, demolition, land clearing, energy, hydro-electric and recycling industries and port and rail yard operators; industrial heat transfer equipment; commercial whole-tree pulpwood chippers; horizontal grinders; blower trucks; commercial and industrial burners; and combustion control systems. The company operates in two reportable segments: Infrastructure Solutions and Materials Solutions. The Infrastructure Solutions segment designs, engineers, manufactures and markets 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 asphalt road construction equipment, industrial thermal systems, land clearing, recycling and other heavy equipment. The Materials Solutions segment designs and manufactures heavy equipment used in aggregate and minerals processing operations in addition to servicing, rebuilding and supplying parts, supporting civil construction, energy, mining, hydro, recycling, ports, forestry and bulk handling markets.

The Infrastructure Solutions segment's primary competitors include Asphalt Drum Mixers LLC (part of Fayat Group), Ammann Group, Benninghoven (part of Wirtgen Group, a John Deere Company), Bomag (part of Fayat Group), Caterpillar Paving Products (part of Caterpillar, Inc.), CMI Roadbuilding Inc., Diamond Z, Doppstadt, Dynapac (part of Fayat Group), EDGE Innovate, LTD, ERIE Strayer Company, Gencor Industries, Inc, LeeBoy (part of Fayat Group), Morbark, LLC (part of Alamo Group), Stephens Manufacturing Company, Tigercat Industries, The Vince Hagan Company, Vogele (part of Wirtgen Group, a John Deere Company), Weiler Inc., Wirtgen Group (a John Deere Company), and a number of smaller manufacturers, both domestic and international. The Materials Solutions segment's primary competitors include CDE Group, Conn-Weld Industries, LLC, Deister Machine Company, Inc., Epiroc, EDGE Innovate, LTD, FLSmidth & Co A/S, Masaba, Inc., McCloskey International (part of Metso Corporation), McLanahan Corporation, Metso Corporation, Sandvik Group, Superior Industries, Inc., Terex Corporation, Thor Manufacturing Ltd., The Weir Group PLC, and Wirtgen Group (a John Deere Company). The company holds 117 United States patents and 160 foreign patents, with 12 United States and 37 foreign patent applications pending, and has 83 trademarks registered in the United States and 188 trademarks registered in foreign jurisdictions.

The company generates revenue through the sale of equipment, replacement parts, service and equipment installation, used equipment, freight, and other revenues. The distribution and sale of replacement parts is an integral part of the business. Products are marketed both domestically and internationally primarily to asphalt and concrete producers; highway and heavy equipment contractors; utility contractors; sand and gravel producers; construction, demolition, recycling and crushing contractors; forestry and environmental recycling contractors; mine and quarry operators; port and inland terminal authorities; power stations and domestic and foreign government agencies. The company also offers industrial automation controls and telematics platforms through its Astec Digital segment, which leverages its market leadership and installed equipment base to expand presence in controls and automation.

The Infrastructure Solutions segment's primary products include asphalt plants, concrete plants, heating and combustion equipment, road construction and forestry equipment, and Astec Digital products. Asphalt plants include cold central plant recycle systems, soil remediation plants, and major plant components. Concrete products include concrete batch plants, bagging plants, paste back-fill plants, concrete mixers, and major plant components. Heating and combustion products include fuel and liquid asphalt storage tanks, liquid asphalt terminals, thermal fluid heaters, polymer plants, heat recovery units, and industrial and asphalt burners and systems. Road construction and forestry products include asphalt pavers, material transfer vehicles, milling machines, wood chippers and grinders, and blower trucks and trailers. Astec Digital includes industrial automation controls and telematics platforms. The backlog for the Infrastructure Solutions segment as of December 31, 2025 and 2024 was approximately $294.2 million and $305.5 million , respectively.

The Materials Solutions segment's primary products include crushing equipment (jaw crushers, horizontal shaft impactors, vertical shaft impactors, cone crushers, heavy-duty mining-application crushers), screening equipment (incline screens, horizontal screens, high frequency screens, multi-frequency screens, dewatering screens), washing equipment (washing plants, classifying plants, fines recovery systems, water clarification systems), material handling equipment (radial and telescoping conveyors, truck unloaders, hopper feeders, pugmills, ship loaders and unloaders, bulk receptions feeders), and breaking equipment (rock breaker systems, hydraulic breakers, compactors, pulverizers). The backlog for the Materials Solutions segment as of December 31, 2025 and 2024 was approximately $219.9 million and $114.1 million , respectively.

On July 1, 2025, the company completed the acquisition of TerraSource Holdings, LLC for $252.6 million , a market-leading manufacturer of material processing equipment and related aftermarket parts serving complementary crushing, screening and separation applications. Simultaneously, the company entered into a new credit agreement providing for the 2025 Credit Facilities in an initial aggregate amount of up to $600.0 million with an incremental facilities limit not to exceed $150.0 million . On January 1, 2026, the company completed the acquisition of CWMF, LLC, a manufacturer of portable and stationary asphalt plant equipment and parts. The company also has a strategic transformation program including the ongoing multi-year phased implementation of a standardized ERP system, with total approximate implementation costs anticipated to range from $180 to $200 million ; through the year ended December 31, 2025, total implementation costs of approximately $151 million have been incurred. The company paid quarterly dividends of $0.13 per common share in all four quarters of both 2025 and 2024, totaling cash paid of $11.9 million for dividends in both years.

Net sales for the year ended December 31, 2025 were $1,410.4 million , an increase of 8.1% compared to $1,305.1 million in 2024. Gross profit was $374.2 million , an increase of 14.1% compared to $327.9 million in 2024. Income from operations was $65.9 million , an increase of 184.1% compared to $23.2 million in 2024. Net income attributable to controlling interest was $38.8 million , an increase of 802.3% compared to $4.3 million in 2024. Diluted income per share was $1.68 , an increase of 784.2% compared to $0.19 in 2024. Backlog was $514.1 million , an increase of 22.5% compared to $419.6 million in 2024.

Business Outlook

The company expects the strategic transformation program, including the ERP implementation, to conclude in 2028 or 2029 with total approximate implementation costs anticipated to range from $180 to $200 million . The company estimates that capital expenditures will be between $40.0 million and $50.0 million for the year ending December 31, 2026.

The acquisition of TerraSource Holdings, LLC on July 1, 2025 provides the company with access to adjacent markets in materials processing equipment and related aftermarket parts and significant growth and value creation opportunities. The acquired TerraSource business contributed revenues of $84.7 million and a net loss of $2.7 million during the year ended December 31, 2025. The company also completed the acquisition of CWMF, LLC on January 1, 2026, a manufacturer of portable and stationary asphalt plant equipment and parts.

The company's strategic pillars include strengthening capabilities to deliver an enhanced aftermarket experience, driving commercial and operational excellence, simplifying product offerings and production processes through a rationalized global product portfolio executed through manufacturing centers of excellence, identifying opportunities to strengthen global presence in attractive new markets, and enhancing quality, parts availability and customer connectivity. The company is also focusing on innovation with a new product development approach and developing the Astec Digital Ecosystem to enable customers to leverage the entire product portfolio and associated data.

The company anticipates minimal steel price changes in 2026 as domestic mills manage output and maintain pricing advantages over imports. The company continues to employ flexible strategies to ensure supply and minimize the impact of price volatility. Due to the increased borrowings under the 2025 Credit Facilities, the company expects interest expense to remain at elevated levels.

The strategic transformation program includes the ongoing multi-year phased implementation of a standardized ERP system, which is replacing much of the existing disparate core financial systems. To date, the company has launched the human capital resources module in U.S. and Canadian locations and converted the operations of three manufacturing sites along with Corporate. The company expects the project to conclude in 2028 or 2029.

The company estimates that capital expenditures will be between $40.0 million and $50.0 million for the year ending December 31, 2026. The company paid quarterly dividends of $0.13 per common share in all four quarters of both 2025 and 2024, totaling cash paid of $11.9 million for dividends in both years. As of December 31, 2025, the company had outstanding principal indebtedness of $341.3 million and availability of $244.7 million under the 2025 Credit Facilities.

Potential ongoing constraints in the supply of certain steel products may continue pressuring the availability of other components used in the manufacturing process. Given the volatility of steel prices and the nature of customers' orders, the company may not be able to pass through all increases in steel costs to customers, which may negatively impact gross profit and margins. New or ongoing geopolitical conflicts may cause a downturn in the construction industries, cause an increase in oil prices, damage a significant portion of inventory or materially impair the ability to distribute products to customers.

The IIJA allocates $548 billion in government spending to new infrastructure over the five-year period concluding in 2026, with certain amounts specifically allocated to fund highway and bridge projects. If Congress does not reauthorize or fully fund the IIJA when it expires at the end of fiscal year 2026, demand for the company's products could decline. The 2024 U.S. presidential and congressional election results have altered and may continue to alter legislative priorities and have a material impact on government funding of infrastructure projects.

Risk Factors

Downturns in the general economy or decreases in government infrastructure spending or commercial and residential construction spending may adversely affect revenues and operating results. The IIJA allocates $548 billion in government spending to new infrastructure over the five-year period concluding in 2026, and if Congress does not reauthorize or fully fund the IIJA when it expires at the end of fiscal year 2026, demand for products could decline. Changes in the availability and price of parts, components and raw materials, including steel, can significantly increase production costs; the U.S. recently imposed significant increases in tariffs on steel and aluminum imports which may result in meaningfully higher steel costs. The company had outstanding principal indebtedness of $341.3 million as of December 31, 2025 under the 2025 Credit Facilities, and the level of indebtedness could make it more difficult to satisfy obligations, require dedication of substantial cash flow to debt service, limit ability to obtain additional financing, and increase vulnerability to interest rate fluctuations. The company may not fully realize the anticipated benefits of the TerraSource acquisition, which was completed for $252.6 million on July 1, 2025, and may encounter significant difficulties in integrating the TerraSource business.

Management Priorities

Management's message emphasizes the OneASTEC Vision: 'To build industry changing solutions that create life-changing opportunities,' supported by strategic pillars focused on empowered, enabled and engaged employees, customer focus, and industry changing innovation. Key themes include the successful completion of the TerraSource acquisition on July 1, 2025 for $252.6 million , the entry into a new credit agreement providing for the 2025 Credit Facilities in an initial aggregate amount of up to $600.0 million , and the ongoing strategic transformation program including the ERP implementation with total costs anticipated to range from $180 to $200 million . Management highlights financial results including net sales of $1,410.4 million , an increase of 8.1% ; net income attributable to controlling interest of $38.8 million , an increase of 802.3% ; and diluted income per share of $1.68 , an increase of 784.2% . Strategic priorities emphasized include strengthening aftermarket capabilities, driving commercial and operational excellence, simplifying product offerings, identifying opportunities to strengthen global presence, and enhancing quality, parts availability and customer connectivity.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Backlog
  2. [2] Item 1, Business — Backlog
  3. [3] Item 1, Business — Backlog
  4. [4] Item 1, Business — Backlog
  5. [5] Item 7, MD&A — Executive Summary; Item 8, Note 3 — Acquisition
  6. [6] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Note 11 — Debt
  7. [7] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Note 11 — Debt
  8. [8] Item 7, MD&A — Strategic Transformation Program
  9. [9] Item 7, MD&A — Strategic Transformation Program
  10. [10] Item 5, Market for Registrant's Common Equity — Dividend Policy
  11. [11] Item 5, Market for Registrant's Common Equity — Dividend Policy
  12. [12] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  13. [13] Item 7, MD&A — Executive Summary
  14. [14] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  15. [15] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  16. [16] Item 7, MD&A — Executive Summary
  17. [17] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  18. [18] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  19. [19] Item 7, MD&A — Executive Summary
  20. [20] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  21. [21] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  22. [22] Item 7, MD&A — Executive Summary
  23. [23] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  24. [24] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  25. [25] Item 7, MD&A — Executive Summary
  26. [26] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  27. [27] Item 7, MD&A — Executive Summary; Item 7, MD&A — Backlog
  28. [28] Item 7, MD&A — Executive Summary
  29. [29] Item 7, MD&A — Executive Summary; Item 7, MD&A — Backlog
  30. [30] Item 7, MD&A — Strategic Transformation Program
  31. [31] Item 7, MD&A — Liquidity and Capital Resources
  32. [32] Item 8, Note 3 — Acquisition
  33. [33] Item 8, Note 3 — Acquisition
  34. [34] Item 7, MD&A — Liquidity and Capital Resources
  35. [35] Item 5, Market for Registrant's Common Equity — Dividend Policy
  36. [36] Item 5, Market for Registrant's Common Equity — Dividend Policy
  37. [37] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Note 11 — Debt
  38. [38] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Note 11 — Debt
  39. [39] Item 1, Business — Industry and Business Condition; Item 1A, Risk Factors
  40. [40] Item 1A, Risk Factors
  41. [41] Item 7, MD&A — Liquidity and Capital Resources; Item 8, Note 11 — Debt
  42. [42] Item 8, Note 3 — Acquisition
  43. [43] Item 7, MD&A — Executive Summary; Item 8, Note 3 — Acquisition
  44. [44] Item 7, MD&A — Executive Summary; Item 8, Note 11 — Debt
  45. [45] Item 7, MD&A — Strategic Transformation Program
  46. [46] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  47. [47] Item 7, MD&A — Executive Summary
  48. [48] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  49. [49] Item 7, MD&A — Executive Summary
  50. [50] Item 7, MD&A — Executive Summary; Item 8, Consolidated Statements of Operations
  51. [51] Item 7, MD&A — Executive Summary
  52. [52] Item 8, Consolidated Statements of Operations
  53. [53] Item 8, Consolidated Statements of Operations
  54. [54] Item 8, Consolidated Statements of Operations
  55. [55] Item 8, Consolidated Statements of Operations
  56. [56] Item 8, Consolidated Statements of Operations
  57. [57] Item 8, Consolidated Statements of Operations
  58. [58] Item 8, Consolidated Statements of Operations
  59. [59] Item 7, MD&A — Gross Profit
  60. [60] Item 8, Consolidated Statements of Operations
  61. [61] Item 7, MD&A — Gross Profit
  62. [62] Item 8, Consolidated Statements of Operations
  63. [63] Item 8, Consolidated Statements of Operations
  64. [64] Item 7, MD&A — Segment Operating Adjusted EBITDA
  65. [65] Item 7, MD&A — Segment Operating Adjusted EBITDA
  66. [66] Item 7, MD&A — Segment Operating Adjusted EBITDA
  67. [67] Item 7, MD&A — Segment Operating Adjusted EBITDA
  68. [68] Item 8, Consolidated Balance Sheets
  69. [69] Item 8, Consolidated Balance Sheets
  70. [70] Item 8, Consolidated Balance Sheets
  71. [71] Item 8, Consolidated Balance Sheets
  72. [72] Item 7, MD&A — Goodwill Impairment; Item 8, Note 7 — Goodwill
  73. [73] Item 8, Consolidated Statements of Operations
  74. [74] Item 8, Consolidated Statements of Operations

Analysis on 6/21/2026