
		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash	$	111.7	$	134.4	Cash, cash equivalents and restricted cash	$	50.6	$	134.4
Investments	Investments	6.1		8.6		Investments	5.8		8.6
Trade receivables and contract assets, net of allowance for credit losses of $2.5 and $2.3, respectively		137.9		141.7
Trade receivables and contract assets, net of allowance for credit losses of $2.0 and $2.3, respectively						Trade receivables and contract assets, net of allowance for credit losses of $2.0 and $2.3, respectively	160.1		141.7
Other receivables, net of allowance for credit losses of $0.7, respectively	Other receivables, net of allowance for credit losses of $0.7, respectively	4.8		3.5		Other receivables, net of allowance for credit losses of $0.7, respectively	7.4		3.5
Inventories	Inventories	352.9		298.7		Inventories	371.1		298.7
Prepaid and refundable income taxes	Prepaid and refundable income taxes	16.5		20.5		Prepaid and refundable income taxes	18.3		20.5
Prepaid expenses and other assets	Prepaid expenses and other assets	25.3		23.5		Prepaid expenses and other assets	27.7		23.5
Assets held for sale	Assets held for sale	20.5		5.1		Assets held for sale	20.5		5.1
Total current assets	Total current assets	675.7		636.0		Total current assets	661.5		636.0
Property and equipment, net of accumulated depreciation of $247.2 and $248.0, respectively		164.0		171.7
Property and equipment, net of accumulated depreciation of $238.3 and $248.0, respectively						Property and equipment, net of accumulated depreciation of $238.3 and $248.0, respectively	162.3		171.7
Investments	Investments	13.8		12.2		Investments	14.5		12.2
Goodwill	Goodwill	38.2		38.6		Goodwill	46.0		38.6
Intangible assets, net of accumulated amortization of $39.9 and $38.1, respectively		21.0		22.7
Intangible assets, net of accumulated amortization of $41.2 and $38.1, respectively						Intangible assets, net of accumulated amortization of $41.2 and $38.1, respectively	27.1		22.7
Deferred income tax assets	Deferred income tax assets	20.7		16.2		Deferred income tax assets	23.8		16.2
Other long-term assets	Other long-term assets	10.0		8.4		Other long-term assets	14.7		8.4
Total assets	Total assets	$	943.4	$	905.8	Total assets	$	949.9	$	905.8
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current maturities of long-term debt	Current maturities of long-term debt	$	0.2	$	0.1	Current maturities of long-term debt	$	0.2	$	0.1
Short-term debt	Short-term debt	4.9		2.6		Short-term debt	5.8		2.6
Accounts payable	Accounts payable	99.7		82.2		Accounts payable	104.3		82.2
Customer deposits	Customer deposits	69.8		60.2		Customer deposits	73.4		60.2
Accrued product warranty	Accrued product warranty	11.3		10.5		Accrued product warranty	11.6		10.5
Accrued payroll and related liabilities	Accrued payroll and related liabilities	27.4		23.6		Accrued payroll and related liabilities	30.8		23.6
Accrued loss reserves	Accrued loss reserves	2.2		1.9		Accrued loss reserves	2.2		1.9
Other current liabilities	Other current liabilities	41.0		42.2		Other current liabilities	45.1		42.2
Total current liabilities	Total current liabilities	256.5		223.3		Total current liabilities	273.4		223.3
Long-term debt	Long-term debt	0.2		0.2		Long-term debt	0.1		0.2
Deferred income tax liabilities	Deferred income tax liabilities	1.2		1.4		Deferred income tax liabilities	3.2		1.4
Other long-term liabilities	Other long-term liabilities	28.1		29.6		Other long-term liabilities	29.3		29.6
Total liabilities	Total liabilities	286.0		254.5		Total liabilities	306.0		254.5
Commitments and contingencies (Note 8)		0		0
Commitments and contingencies (Note 9)						Commitments and contingencies (Note 9)	0		0
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Preferred stock - authorized 4,000,000 shares of $1.00 par value; none issued	Preferred stock - authorized 4,000,000 shares of $1.00 par value; none issued	—		—		Preferred stock - authorized 4,000,000 shares of $1.00 par value; none issued	—		—
Common stock – authorized 40,000,000 shares of $0.20 par value; issued and outstanding – 22,837,047 as of March 31, 2022 and 22,767,052 as of December 31, 2021		4.6		4.5
Common stock – authorized 40,000,000 shares of $0.20 par value; issued and outstanding – 22,864,529 as of June 30, 2022 and 22,767,052 as of December 31, 2021						Common stock – authorized 40,000,000 shares of $0.20 par value; issued and outstanding – 22,864,529 as of June 30, 2022 and 22,767,052 as of December 31, 2021	4.6		4.5
Additional paid-in capital	Additional paid-in capital	131.1		130.6		Additional paid-in capital	132.6		130.6
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(28.3)		(32.4)		Accumulated other comprehensive loss	(36.8)		(32.4)
Company stock held by deferred compensation programs, at cost	Company stock held by deferred compensation programs, at cost	(1.2)		(1.2)		Company stock held by deferred compensation programs, at cost	(1.1)		(1.2)
Retained earnings	Retained earnings	550.6		549.3		Retained earnings	544.0		549.3
Shareholders' equity	Shareholders' equity	656.8		650.8		Shareholders' equity	643.3		650.8
Noncontrolling interest	Noncontrolling interest	0.6		0.5		Noncontrolling interest	0.6		0.5
Total equity	Total equity	657.4		651.3		Total equity	643.9		651.3
Total liabilities and equity	Total liabilities and equity	$	943.4	$	905.8	Total liabilities and equity	$	949.9	$	905.8


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021				2022		2021		2022		2021
Net sales	Net sales	$	291.2	$	284.4		Net sales	$	318.2	$	277.6	$	609.4	$	562.0
Cost of sales	Cost of sales	225.1		216.2			Cost of sales	257.6		211.5		482.7		427.7
Gross profit	Gross profit	66.1		68.2			Gross profit	60.6		66.1		126.7		134.3
Selling, general and administrative expenses	Selling, general and administrative expenses	52.7		51.7			Selling, general and administrative expenses	53.7		48.0		106.4		99.7
Research and development expenses	Research and development expenses	7.0		6.3			Research and development expenses	7.5		7.0		14.5		13.3
Restructuring, impairment and other asset charges, net	Restructuring, impairment and other asset charges, net	1.0		0.7			Restructuring, impairment and other asset charges, net	3.4		0.8		4.4		1.5
Income from operations		5.4		9.5
(Loss) income from operations							(Loss) income from operations	(4.0)		10.3		1.4		19.8
Other income:	Other income:						Other income:
Interest expense	Interest expense	(0.4)		(0.2)			Interest expense	(0.6)		(0.2)		(1.0)		(0.4)
Interest income	Interest income	0.2		0.1			Interest income	0.2		0.2		0.4		0.3
Other expenses, net		(0.2)		(0.1)
Income from operations before income taxes		5.0		9.3
Income tax provision		0.9		0.8
Net income		4.1		8.5
Net (income) loss attributable to non-controlling interest		—		—
Net income attributable to controlling interest		$	4.1	$	8.5
Other (expenses) income, net							Other (expenses) income, net	(0.3)		0.1		(0.5)		—
(Loss) income from operations before income taxes							(Loss) income from operations before income taxes	(4.7)		10.4		0.3		19.7
Income tax (benefit) provision							Income tax (benefit) provision	(0.8)		2.1		0.1		2.9
Net (loss) income							Net (loss) income	(3.9)		8.3		0.2		16.8
Net income attributable to noncontrolling interest							Net income attributable to noncontrolling interest	—		—		—		—
Net (loss) income attributable to controlling interest							Net (loss) income attributable to controlling interest	$	(3.9)	$	8.3	$	0.2	$	16.8
Per share data:	Per share data:						Per share data:
Earnings per common share - Basic		$	0.18	$	0.38
Earnings per common share - Diluted		$	0.18	$	0.37
(Loss) earnings per common share - Basic							(Loss) earnings per common share - Basic	$	(0.17)	$	0.36	$	0.01	$	0.74
(Loss) earnings per common share - Diluted							(Loss) earnings per common share - Diluted	$	(0.17)	$	0.36	$	0.01	$	0.73
Weighted average shares outstanding - Basic	Weighted average shares outstanding - Basic	22,782,476		22,633,457			Weighted average shares outstanding - Basic	22,850,515		22,742,162		22,816,684		22,688,339
Weighted average shares outstanding - Diluted	Weighted average shares outstanding - Diluted	22,904,167		22,874,810			Weighted average shares outstanding - Diluted	22,850,515		22,917,957		22,923,868		22,905,270

Three Months Ended March 31,
2022 2021
Net income $ 4.1 $ 8.5
Other comprehensive income (loss):
Foreign currency translation adjustments 4.2 (0.8)
Other comprehensive income (loss) 4.2 (0.8)
Comprehensive income 8.3 7.7
Comprehensive (income) loss attributable to noncontrolling interest (0.1) 0.1
Comprehensive income attributable to controlling interest $ 8.2 $ 7.8


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net (loss) income	$	(3.9)	$	8.3	$	0.2	$	16.8
Other comprehensive (loss) income:


Foreign currency translation adjustments	(8.5)		4.1		(4.3)		3.3
Other comprehensive (loss) income	(8.5)		4.1		(4.3)		3.3
Comprehensive (loss) income	(12.4)		12.4		(4.1)		20.1
Comprehensive loss (income) attributable to noncontrolling interest	—		0.1		(0.1)		—
Comprehensive (loss) income attributable to controlling interest	$	(12.4)	$	12.5	$	(4.2)	$	20.1


		Three Months Ended March 31,					Six Months Ended June 30,
		2022		2021			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	4.1	$	8.5	Net income	$	0.2	$	16.8
Adjustments to reconcile net income to net cash (used in) provided by operating activities:	Adjustments to reconcile net income to net cash (used in) provided by operating activities:					Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	Depreciation and amortization	6.7		7.6		Depreciation and amortization	13.6		15.1
Provision for credit losses	Provision for credit losses	0.6		0.3		Provision for credit losses	0.2		0.7
Provision for warranties	Provision for warranties	3.2		2.7		Provision for warranties	6.4		4.9
Deferred compensation (benefit) expense	Deferred compensation (benefit) expense	(0.8)		0.7		Deferred compensation (benefit) expense	(0.9)		0.3
Share-based compensation	Share-based compensation	1.8		1.4		Share-based compensation	3.4		2.9
Deferred tax (benefit) provision	Deferred tax (benefit) provision	(4.0)		0.8		Deferred tax (benefit) provision	(8.0)		5.4
Gain on disposition of property and equipment	Gain on disposition of property and equipment	—		(0.1)		Gain on disposition of property and equipment	—		(0.3)

Asset impairment charges, net						Asset impairment charges, net	3.0		0.2
Distributions to deferred compensation programs' participants	Distributions to deferred compensation programs' participants	(0.1)		(0.3)		Distributions to deferred compensation programs' participants	(0.4)		(1.1)
Change in operating assets and liabilities, excluding the effects of acquisitions:	Change in operating assets and liabilities, excluding the effects of acquisitions:					Change in operating assets and liabilities, excluding the effects of acquisitions:
Sale (purchase) of trading securities, net		0.6		(1.4)
Purchase of trading securities, net						Purchase of trading securities, net	(0.5)		(3.1)
Receivables and other contract assets	Receivables and other contract assets	5.3		(26.4)		Receivables and other contract assets	(21.5)		(32.5)
Inventories	Inventories	(53.7)		5.3		Inventories	(71.5)		(6.6)
Prepaid expenses	Prepaid expenses	(1.0)		0.7		Prepaid expenses	(3.8)		(0.1)
Other assets	Other assets	(1.4)		(1.2)		Other assets	(4.8)		(0.5)
Accounts payable	Accounts payable	17.3		15.8		Accounts payable	22.7		25.5

Accrued loss reserves	Accrued loss reserves	(0.2)		0.1		Accrued loss reserves	0.5		(0.4)
Accrued payroll and related expenses	Accrued payroll and related expenses	3.6		2.6		Accrued payroll and related expenses	6.7		7.8
Other accrued liabilities	Other accrued liabilities	(2.9)		(0.3)		Other accrued liabilities	2.0		6.6
Accrued product warranty	Accrued product warranty	(2.4)		(2.1)		Accrued product warranty	(5.2)		(4.7)
Customer deposits	Customer deposits	9.3		(0.9)		Customer deposits	14.2		0.9
Income taxes payable/prepaid	Income taxes payable/prepaid	4.4		0.8		Income taxes payable/prepaid	1.8		(7.3)

Net cash (used in) provided by operating activities	Net cash (used in) provided by operating activities	(9.6)		14.6		Net cash (used in) provided by operating activities	(41.9)		30.5
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	—		0.1		Acquisitions, net of cash acquired	(17.8)		0.1
Price adjustment on prior sale of subsidiary	Price adjustment on prior sale of subsidiary	—		(1.1)		Price adjustment on prior sale of subsidiary	—		(1.1)
Expenditures for property and equipment	Expenditures for property and equipment	(11.6)		(3.3)		Expenditures for property and equipment	(18.8)		(7.2)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	0.2		1.4		Proceeds from sale of property and equipment	0.2		1.5
Purchase of investments	Purchase of investments	(0.3)		(0.2)		Purchase of investments	(0.6)		(0.6)
Sale of investments	Sale of investments	—		0.1		Sale of investments	0.1		0.5
Net cash used in investing activities	Net cash used in investing activities	(11.7)		(3.0)		Net cash used in investing activities	(36.9)		(6.8)


		Three Months Ended March 31,					Six Months Ended June 30,
		2022		2021			2022		2021
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Payment of dividends	Payment of dividends	(2.8)		(2.5)		Payment of dividends	(5.5)		(5.0)
Borrowings under bank loans		5.4		2.0
Repayment of bank loans		(3.6)		(2.3)
Proceeds from borrowings on credit facility and bank loans						Proceeds from borrowings on credit facility and bank loans	28.5		2.3
Repayments of borrowings on credit facility and bank loans						Repayments of borrowings on credit facility and bank loans	(25.3)		(2.7)

Sale of Company stock by deferred compensation programs, net	Sale of Company stock by deferred compensation programs, net	—		0.2		Sale of Company stock by deferred compensation programs, net	0.2		0.5
Withholding tax paid upon vesting of share-based compensation awards	Withholding tax paid upon vesting of share-based compensation awards	(1.3)		(3.0)		Withholding tax paid upon vesting of share-based compensation awards	(1.6)		(3.2)

Net cash used in financing activities	Net cash used in financing activities	(2.3)		(5.6)		Net cash used in financing activities	(3.7)		(8.1)
Effect of exchange rates on cash	Effect of exchange rates on cash	0.9		—		Effect of exchange rates on cash	(1.3)		0.3
(Decrease) increase in cash and cash equivalents and restricted cash	(Decrease) increase in cash and cash equivalents and restricted cash	(22.7)		6.0		(Decrease) increase in cash and cash equivalents and restricted cash	(83.8)		15.9
Cash and cash equivalents and restricted cash, beginning of period	Cash and cash equivalents and restricted cash, beginning of period	134.4		158.6		Cash and cash equivalents and restricted cash, beginning of period	134.4		158.6
Cash and cash equivalents and restricted cash, end of period	Cash and cash equivalents and restricted cash, end of period	$	111.7	$	164.6	Cash and cash equivalents and restricted cash, end of period	$	50.6	$	174.5

Supplemental cash flow information:	Supplemental cash flow information:					Supplemental cash flow information:
Cash paid during the year for:	Cash paid during the year for:					Cash paid during the year for:
Interest, net of capitalized interest	Interest, net of capitalized interest	$	0.1	$	0.1	Interest, net of capitalized interest	$	0.2	$	0.1
Income taxes paid	Income taxes paid	$	0.4	$	0.2	Income taxes paid	$	6.7	$	5.7

Supplemental disclosures of non-cash items:	Supplemental disclosures of non-cash items:					Supplemental disclosures of non-cash items:
Non-cash investing activities:	Non-cash investing activities:					Non-cash investing activities:
Capital expenditures in accounts payable	Capital expenditures in accounts payable	$	0.9	$	0.2	Capital expenditures in accounts payable	$	1.2	$	0.2

Non-cash financing activities:	Non-cash financing activities:					Non-cash financing activities:
Additions to right-of-use assets and lease liabilities	Additions to right-of-use assets and lease liabilities	$	0.4	$	0.5	Additions to right-of-use assets and lease liabilities	$	2.5	$	1.3


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

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

Balance, December 31, 2021	Balance, December 31, 2021	22,767,052	$	4.5	$	130.6	$	(32.4)	$	(1.2)	$	549.3	$	0.5	$	651.3	Balance, December 31, 2021	22,767,052	$	4.5	$	130.6	$	(32.4)	$	(1.2)	$	549.3	$	0.5	$	651.3
Net income	Net income	—	—		—		—		—		4.1		—		4.1		Net income	—	—		—		—		—		4.1		—		4.1
Other comprehensive income	Other comprehensive income	—	—		—		4.1		—		—		0.1		4.2		Other comprehensive income	—	—		—		4.1		—		—		0.1		4.2
Dividends ($0.12 per share)	Dividends ($0.12 per share)	—	—		—		—		—		(2.8)		—		(2.8)		Dividends ($0.12 per share)	—	—		—		—		—		(2.8)		—		(2.8)
Share-based compensation	Share-based compensation	—	—		1.8		—		—		—		—		1.8		Share-based compensation	—	—		1.8		—		—		—		—		1.8

Issuance of common stock under incentive plan	Issuance of common stock under incentive plan	69,995	0.1		—		—		—		—		—		0.1		Issuance of common stock under incentive plan	69,995	0.1		—		—		—		—		—		0.1
Withholding tax paid upon equity award vesting	Withholding tax paid upon equity award vesting	—	—		(1.3)		—		—		—		—		(1.3)		Withholding tax paid upon equity award vesting	—	—		(1.3)		—		—		—		—		(1.3)

Balance, March 31, 2022	Balance, March 31, 2022	22,837,047	$	4.6	$	131.1	$	(28.3)	$	(1.2)	$	550.6	$	0.6	$	657.4	Balance, March 31, 2022	22,837,047	$	4.6	$	131.1	$	(28.3)	$	(1.2)	$	550.6	$	0.6	$	657.4
Net loss																	Net loss	—	—		—		—		—		(3.9)		—		(3.9)
Other comprehensive loss																	Other comprehensive loss	—	—		—		(8.5)		—		—		—		(8.5)
Dividends ($0.12 per share)																	Dividends ($0.12 per share)	—	—		0.1		—		—		(2.7)		—		(2.6)
Share-based compensation																	Share-based compensation	—	—		1.6		—		—		—		—		1.6

Issuance of common stock under incentive plan																	Issuance of common stock under incentive plan	27,482	—		—		—		—		—		—		—
Withholding tax paid upon equity award vesting																	Withholding tax paid upon equity award vesting	—	—		(0.3)		—		—		—		—		(0.3)

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

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


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

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

Balance, December 31, 2020	Balance, December 31, 2020	22,611,976	$	4.5	$	127.8	$	(33.5)	$	(1.5)	$	543.7	$	0.5	$	641.5	Balance, December 31, 2020	22,611,976	4.5		127.8		(33.5)		(1.5)		543.7		0.5		641.5
Net income	Net income	—	—		—		—		—		8.5		—		8.5		Net income	—	—		—		—		—		8.5		—		8.5
Other comprehensive loss	Other comprehensive loss	—	—		—		(0.7)		—		—		(0.1)		(0.8)		Other comprehensive loss	—	—		—		(0.7)		—		—		(0.1)		(0.8)
Dividends ($0.11 per share)	Dividends ($0.11 per share)	—	—		—		—		—		(2.5)		—		(2.5)		Dividends ($0.11 per share)	—	—		—		—		—		(2.5)		—		(2.5)
Share-based compensation	Share-based compensation	—	—		1.4		—		—		—		—		1.4		Share-based compensation	—	—		1.4		—		—		—		—		1.4

Issuance of common stock under incentive plan	Issuance of common stock under incentive plan	103,541	—		—		—		—		—		—		—		Issuance of common stock under incentive plan	103,541	—		—		—		—		—		—		—
Withholding tax paid upon equity award vesting	Withholding tax paid upon equity award vesting	—	—		(3.0)		—		—		—		—		(3.0)		Withholding tax paid upon equity award vesting	—	—		(3.0)		—		—		—		—		(3.0)

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

Balance, March 31, 2021	Balance, March 31, 2021	22,715,517	$	4.5	$	126.3	$	(34.2)	$	(1.4)	$	549.7	$	0.4	$	645.3	Balance, March 31, 2021	22,715,517	$	4.5	$	126.3	$	(34.2)	$	(1.4)	$	549.7	$	0.4	$	645.3
Net income																	Net income	—	—		—		—		—		8.3		—		8.3
Other comprehensive income																	Other comprehensive income	—	—		—		4.0		—		—		0.1		4.1
Dividends ($0.11 per share)																	Dividends ($0.11 per share)	—	—		—		—		—		(2.5)		—		(2.5)
Share-based compensation																	Share-based compensation	—	—		1.5		—		—		—		—		1.5

Issuance of common stock under incentive plan																	Issuance of common stock under incentive plan	41,809	0.1		—		—		—		—		—		0.1
Withholding tax paid upon equity award vesting																	Withholding tax paid upon equity award vesting	—	—		(0.2)		—		—		—		—		(0.2)

Deferred compensation programs' transactions, net																	Deferred compensation programs' transactions, net	—	—		0.2		—		0.1		—		—		0.3

Balance, June 30, 2021																	Balance, June 30, 2021	22,757,326	$	4.6	$	127.8	$	(30.2)	$	(1.3)	$	555.5	$	0.5	$	656.9

Astec Industries, Inc. ("Astec" or the "Company") is a Tennessee corporation which was incorporated in 1972. The Company designs, engineers, manufactures and markets equipment and components used primarily in road building and related construction activities, as well as other products discussed below. The Company's products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface. The Company also manufactures certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction and demolition industries and port and rail yard operators; industrial heat transfer equipment; commercial whole-tree pulpwood chippers; horizontal grinders; blower trucks; concrete plants; commercial and industrial burners; and combustion control systems.

The accompanying unaudited consolidated financial statements include the accounts of Astec and its subsidiaries and have been prepared by the Company, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The Company prepares its financial statements in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP"). Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the SEC rules and regulations governing interim financial statements. However, the Company believes that the disclosures made in the unaudited consolidated financial statements and related notes are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021. All intercompany balances and transactions between the Company and its affiliates have been eliminated in consolidation.

Noncontrolling interest in the Company's consolidated financial statements represents the 7% interest in a consolidated subsidiary which is not owned by the Company. Since the Company controls this subsidiary, the subsidiary's financial statements are consolidated with those of the Company, and the noncontrolling owner's 7% share of the subsidiary's net assets and results of operations is deducted and reported as "Noncontrolling interest" in the Consolidated Balance Sheets and as "Net ~~(income) loss~~income attributable to ~~non-controlling~~noncontrolling interest" in the Consolidated Statements of Operations. The Company executed an agreement in February 2022 with the noncontrolling interest holder, which is undergoing a judicial reorganization in Brazil, to acquire their outstanding interest in full for R$10.0M (approximately $2.0 million, subject to the effect of exchange rates). Completion of the transaction is subject to obtaining certain judicial approval in Brazil.

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include inventory obsolescence costs, warranty costs, inventory net realizable value, self-insurance loss reserves, share-based compensation and the measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. The COVID-19 pandemic and its contributory impacts on the economy have resulted in uncertainties in the Company's business, which may result in actual results differing from those estimates. As a result, the Company's accounting estimates and assumptions may change over time in response to COVID-19 and its contributory impacts. Such changes could result in future impairments of goodwill, intangibles, long-lived assets and investment securities and incremental credit losses on receivables, among other issues. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates.

In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832)", which aims to increase the transparency of government assistance including the disclosure of the types of assistance, an entity’s accounting for the assistance and the effect of the assistance on an entity’s financial statements. The new guidance requires expanded disclosure about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This new standard was effective for the Company on January 1, 2022. Availability of government assistance has typically been limited. The Company did not receive ~~any~~ government assistance in 2022.

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers", which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company elected to early adopt this guidance on April 1, 2022. The adoption of this new standard did not have a material impact on its financial position, results of operations, cash flows or disclosures.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)", which provides optional guidance for a limited period of time to ease the potential burden in accounting (or recognizing the effects of) reference rate reform on financial reporting. This was in response to stakeholders raising certain operational challenges likely to arise in accounting for contract modifications and hedge accounting because of reference rate reform. Some of those challenges relate to the significant volume of contracts and other arrangements, such as debt agreements, lease agreements and derivative instruments, which will be modified to replace references to discontinued rates with references to replacement rates. For accounting purposes, such contract modifications are required to be evaluated in determining whether the modifications result in the establishment of new contracts or the continuation of existing contracts. Stakeholders indicated that due to the significant volume of affected contracts and other arrangements, together with a compressed time frame for making contract modifications, the application of existing accounting standards on assessing modifications versus extinguishments could be costly and burdensome. In addition, stakeholders indicated that financial reporting results should reflect the intended continuation of such contracts and arrangements during the period of the market-wide transition to alternative reference rates. The amendments are elective and are effective upon issuance through December 31, 2022. The Company intends to apply this guidance if modifications of its contracts that include LIBOR occur, which is not expected to have a material impact on the Company's consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers", which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on future acquisitions and may elect to early adopt, but has not yet finalized that election.

During the first quarter of 2022, the Company identified errors in its previously issued financial statements related to an overstatement of work-in-process inventory that mainly accumulated over the periods from 2018 through 2021 thereby understating "Cost of sales" in those periods and an overstatement of "Net sales" and "Cost of sales" as well as impacts to certain consolidated balance sheet financial statement line items as a result of over-time revenue recognition calculation errors at one of the Company's sites which impacted the second, third and fourth quarters of 2021.

The Company assessed the materiality of these misstatements both quantitatively and qualitatively and determined the correction of these errors to be immaterial to the prior period consolidated financial statements taken as a whole. To reflect the correction of the above errors, the Company is revising the previously issued consolidated financial statements for the three and six months ended ~~March 31,~~June 30, 2021 in this Form 10-Q. The Company is also disclosing the impact of the revisions on the previously filed ~~unaudited consolidated financial statements for the three and six months ended June 30, 2021 and the three and nine months ended September 30, 2021 as well as the previously filed~~ audited ~~year ended periods~~Consolidated Balance Sheet as of December 31, 2021 ~~and 2020~~ and the opening balance sheet equity impact for December 31, ~~2019.~~2020. As a result, the Company has corrected the misstatements as disclosed in the following tables for all impacted financial statement line items in prior periods.


	December 31, 2021
(in millions)	As Previously Reported		Adjustment		As Revised
Trade receivables and contract assets, net	$	144.1	$	(2.4)	$	141.7
Inventories	303.0		(4.3)		298.7
Prepaid and refundable income taxes	19.5		1.0		20.5
Total current assets	641.7		(5.7)		636.0
Deferred income tax assets	16.0		0.2		16.2
Total assets	911.3		(5.5)		905.8
Accounts payable	83.5		(1.3)		82.2
Other current liabilities	42.9		(0.7)		42.2
Total current liabilities	225.3		(2.0)		223.3
Total liabilities	256.5		(2.0)		254.5

Retained earnings	552.8		(3.5)		549.3
Shareholders' equity	654.3		(3.5)		650.8
Total equity	654.8		(3.5)		651.3
Total liabilities and equity	911.3		(5.5)		905.8

Three Months Ended March 31, 2021
(in millions) As Previously Reported Adjustment As Revised
Cost of sales $ 215.9 $ 0.3 $ 216.2
Gross profit 68.5 (0.3) 68.2
Income from operations 9.8 (0.3) 9.5
Income from operations before income taxes 9.6 (0.3) 9.3
Income tax provision 0.9 (0.1) 0.8
Net income 8.7 (0.2) 8.5
Net income attributable to controlling interest 8.7 (0.2) 8.5
Per share data:
Earnings per common share - Basic 0.38 — 0.38
Earnings per common share - Diluted 0.38 0.01 0.37


	Three Months Ended June 30, 2021						Six Months Ended June 30, 2021
(in millions)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Net sales	$	278.0	$	(0.4)	$	277.6	$	562.4	$	(0.4)	$	562.0
Cost of sales	211.0		0.5		211.5		426.9		0.8		427.7
Gross profit	67.0		(0.9)		66.1		135.5		(1.2)		134.3
(Loss) income from operations	11.2		(0.9)		10.3		21.0		(1.2)		19.8
(Loss) income from operations before income taxes	11.3		(0.9)		10.4		20.9		(1.2)		19.7
Income tax (benefit) provision	2.3		(0.2)		2.1		3.2		(0.3)		2.9
Net (loss) income	9.0		(0.7)		8.3		17.7		(0.9)		16.8
Net (loss) income attributable to controlling interest	9.0		(0.7)		8.3		17.7		(0.9)		16.8
Per share data:
(Loss) earnings per common share - Basic	0.40		(0.04)		0.36		0.78		(0.04)		0.74
(Loss) earnings per common share - Diluted	0.39		(0.03)		0.36		0.77		(0.04)		0.73

Three Months Ended June 30, 2021 Six Months Ended June 30, 2021
(in millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
Net sales $ 278.0 $ (0.4) $ 277.6 $ 562.4 $ (0.4) $ 562.0
Cost of sales 211.0 0.5 211.5 426.9 0.8 427.7
Gross profit 67.0 (0.9) 66.1 135.5 (1.2) 134.3
Income from operations 11.2 (0.9) 10.3 21.0 (1.2) 19.8
Income from operations before income taxes 11.3 (0.9) 10.4 20.9 (1.2) 19.7
Income tax provision 2.3 (0.2) 2.1 3.2 (0.3) 2.9
Net income 9.0 (0.7) 8.3 17.7 (0.9) 16.8
Net income attributable to controlling interest 9.0 (0.7) 8.3 17.7 (0.9) 16.8
Per share data:
Earnings per common share - Basic 0.40 0.04 0.36 0.78 0.04 0.74
Earnings per common share - Diluted 0.39 0.03 0.36 0.77 0.04 0.73
Statements of Comprehensive Income

Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021
(in millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
Net sales $ 267.0 $ (0.1) $ 266.9 $ 829.4 $ (0.5) $ 828.9
Cost of sales 204.7 0.3 205.0 631.6 1.1 632.7
Gross profit 62.3 (0.4) 61.9 197.8 (1.6) 196.2
Income from operations 6.7 (0.4) 6.3 27.7 (1.6) 26.1
Income from operations before income taxes 6.5 (0.4) 6.1 27.4 (1.6) 25.8
Income tax provision (2.8) (0.1) (2.9) 0.4 (0.4) —
Net income 9.3 (0.3) 9.0 27.0 (1.2) 25.8
Net income attributable to controlling interest 9.3 (0.3) 9.0 27.0 (1.2) 25.8
Per share data:
Earnings per common share - Basic 0.41 0.01 0.40 1.19 0.05 1.14
Earnings per common share - Diluted 0.41 0.02 0.39 1.18 0.05 1.13


	Three Months Ended June 30, 2021						Six Months Ended June 30, 2021
(in millions)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Net (loss) income	$	9.0	$	(0.7)	$	8.3	$	17.7	$	(0.9)	$	16.8


Comprehensive (loss) income	13.1		(0.7)		12.4		21.0		(0.9)		20.1
Comprehensive (loss) income attributable to controlling interest	13.2		(0.7)		12.5		21.0		(0.9)		20.1

MINDS Acquisition - The Company entered into a Share Purchase Agreement, dated as of March 22, 2022, by and between MINDS Automation Group, Inc., a leader in plant automation control systems and cloud-based data management in the asphalt industry in Canada. The purchase price of $19.3 million was paid in cash. The Company's preliminary allocation of the purchase price resulted in the recognition of $9.3 million of goodwill and $9.3 million of intangible assets primarily consisting of customer relationships (9 year life) and developed technology (7 year life). Significant inputs and assumptions used in determining the fair values of these intangible assets include management's forecasts of future revenues, earnings and cash flows, a discount rate based on the median weighted average cost of capital of the Company and select market competitors, and proportion of intangible assets acquired in relation to tangible assets. Goodwill acquired is attributable to future growth opportunities provided by the acquired intellectual capital and the ability to generate cross-selling synergies. The acquisition provides the Company with a broader line of controls and automation products designed to deliver enhanced productivity through improved equipment performance. Results of operations have been consolidated from the date of acquisition. The goodwill is not expected to be deductible for income tax purposes.

Year Ended December 31, 2021 Year Ended December 31, 2020
(in millions) As Previously Reported Adjustment As Revised As Previously Reported Adjustment As Revised
Net sales $ 1,097.2 $ (1.7) $ 1,095.5 $ 1,024.4 $ — $ 1,024.4
Cost of sales 845.5 1.0 846.5 784.3 1.2 785.5
Gross profit 251.7 (2.7) 249.0 240.1 (1.2) 238.9
Income from operations 22.1 (2.7) 19.4 43.0 (1.2) 41.8
Income from operations before income taxes 16.5 (2.7) 13.8 45.7 (1.2) 44.5
Income tax provision (1.4) (0.7) (2.1) (1.2) (0.3) (1.5)
Net income 17.9 (2.0) 15.9 46.9 (0.9) 46.0
Net income attributable to controlling interest 17.8 (2.0) 15.8 46.9 (0.9) 46.0
Per share data:
Earnings per common share - Basic 0.78 0.08 0.70 2.08 0.04 2.04
Earnings per common share - Diluted 0.78 0.09 0.69 2.05 0.04 2.01

As Previously Reported Adjustment As Revised
Balance, December 31, 2019
Retained Earnings $ 508.3 $ (0.6) $ 507.7
Total Equity 602.4 (0.6) 601.8
Balance, December 31, 2020
Retained Earnings 545.2 (1.5) 543.7
Total Equity 643.0 (1.5) 641.5
Balance, March 31, 2021
Retained Earnings 551.4 (1.7) 549.7
Total Equity 647.0 (1.7) 645.3
Balance, June 30, 2021
Retained Earnings 557.9 (2.4) 555.5
Total Equity 659.3 (2.4) 656.9
Balance, September 30, 2021
Retained Earnings 564.7 (2.7) 562.0
Total Equity 663.1 (2.7) 660.4
Balance, December 31, 2021
Retained Earnings 552.8 (3.5) 549.3
Total Equity 654.8 (3.5) 651.3


(in millions)	Amount
Cash	$	1.5
Trade receivables	2.7
Inventories	0.7
Prepaid expenses and other assets	0.4
Property and equipment	0.2
Goodwill	9.3
Intangible assets	9.3

Other long-term assets	0.5
Total assets acquired	$	24.6
Accounts payable	(0.7)
Accrued payroll and related liabilities	(0.8)
Other current liabilities	(1.1)
Deferred income tax liabilities	(2.4)
Other long-term liabilities	(0.3)
Total liabilities assumed	(5.3)
Total purchase price	$	19.3


(in millions)	(in millions)	March 31, 2022		December 31, 2021		(in millions)	June 30, 2022		December 31, 2021
Raw materials and parts	Raw materials and parts	$	246.9	$	216.1	Raw materials and parts	$	268.9	$	216.1
Work-in-process	Work-in-process	71.5		50.4		Work-in-process	72.8		50.4
Finished goods	Finished goods	32.1		28.9		Finished goods	26.4		28.9
Used equipment	Used equipment	2.4		3.3		Used equipment	3.0		3.3
Total	Total	$	352.9	$	298.7	Total	$	371.1	$	298.7

The Company has various financial instruments that must be measured at fair value on a recurring basis, including marketable debt and equity securities held by Astec Insurance and marketable equity securities held in the Company's deferred compensation programs. The Company's deferred compensation programs include a non-qualified Supplemental Executive Retirement Plan ("SERP") and a separate non-qualified Deferred Compensation Plan. Although the deferred compensation programs' investments are allocated to individual participants and investment decisions are made solely by those participants, they are non-qualified plans. Consequently, the Company owns the assets and the related offsetting liability for disbursement until such time as a participant makes a qualifying withdrawal. The SERP assets and related offsetting liability are recorded in non-current "Investments" and "Other long-term liabilities", respectively, in the Consolidated Balance Sheets. The Company's

The carrying amount of cash and cash equivalents, trade receivables and contract assets, other receivables, accounts payable, short-term debt and long-term debt approximates their fair value because of their short-term nature and/or interest rates associated with the instruments. Investments are carried at their fair value based on quoted market prices for identical or similar assets or, where no quoted prices exist, other observable inputs for the asset. The fair values of foreign currency exchange contracts are based on quotations from various banks for similar instruments using models with ~~market based~~market-based inputs.


Level 1 -						Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 -						Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability.

Level 3 -						Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.


		March 31, 2022							June 30, 2022
(in millions)	(in millions)	Level 1		Level 2		Total		(in millions)	Level 1		Level 2		Total
Financial assets:	Financial assets:							Financial assets:
Trading equity securities:	Trading equity securities:							Trading equity securities:

Deferred compensation programs' mutual funds	Deferred compensation programs' mutual funds	$	4.8	$	—	$	4.8	Deferred compensation programs' mutual funds	$	4.4	$	—	$	4.4
Preferred stocks	Preferred stocks	0.3		—		0.3		Preferred stocks	0.3		—		0.3
Equity funds	Equity funds	1.2		—		1.2		Equity funds	0.6		—		0.6
Trading debt securities:	Trading debt securities:							Trading debt securities:
Corporate bonds	Corporate bonds	4.4		—		4.4		Corporate bonds	6.4		—		6.4
Municipal bonds	Municipal bonds	—		0.1		0.1		Municipal bonds	—		0.1		0.1
Floating rate notes	Floating rate notes	0.4		—		0.4		Floating rate notes	0.4		—		0.4
U.S. government securities	U.S. government securities	1.1		—		1.1		U.S. government securities	0.9		—		0.9
Asset-backed securities	Asset-backed securities	—		5.0		5.0		Asset-backed securities	—		4.4		4.4
Other	Other	1.7		0.9		2.6		Other	2.1		0.7		2.8

Derivative financial instruments								Derivative financial instruments	—		0.3		0.3
Total financial assets	Total financial assets	$	13.9	$	6.0	$	19.9	Total financial assets	$	15.1	$	5.5	$	20.6
Financial liabilities:	Financial liabilities:							Financial liabilities:
Derivative financial instruments		$	—	$	0.3	$	0.3

Deferred compensation programs' liabilities	Deferred compensation programs' liabilities	—		6.3		6.3		Deferred compensation programs' liabilities	$	—	$	5.6	$	5.6
Total financial liabilities	Total financial liabilities	$	—	$	6.6	$	6.6	Total financial liabilities	$	—	$	5.6	$	5.6


	December 31, 2021
(in millions)	Level 1		Level 2		Total
Financial assets:
Trading equity securities:
Deferred compensation programs' mutual funds	$	4.9	$	—	$	4.9
Preferred stocks	0.3		—		0.3
Equity funds	3.0		—		3.0
Trading debt securities:
Corporate bonds	3.3		—		3.3
Municipal bonds	—		0.2		0.2
Floating rate notes	0.4		—		0.4
U.S. government securities	1.1		—		1.1
Asset-backed securities	—		3.5		3.5
Other	3.1		1.0		4.1
Derivative financial instruments	—		0.1		0.1
Total financial assets	$	16.1	$	4.8	$	20.9
Financial liabilities:

Deferred compensation programs' liabilities	$	—	$	7.2	$	7.2
Total financial liabilities	$	—	$	7.2	$	7.2

The Company warrants its products against manufacturing defects and performance to specified standards. 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 product warranty liability is primarily based on historical claim rates, nature of claims and the associated cost.


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
Reserve balance, beginning of the period	Reserve balance, beginning of the period	$	10.5	$	10.3		Reserve balance, beginning of the period	$	11.3	$	10.9	$	10.5	$	10.3
Warranty liabilities accrued	Warranty liabilities accrued	3.2		2.7			Warranty liabilities accrued	3.2		2.2		6.4		4.9
Warranty liabilities settled	Warranty liabilities settled	(2.4)		(2.1)			Warranty liabilities settled	(2.8)		(2.6)		(5.2)		(4.7)

Other							Other	(0.1)		—		(0.1)		—
Reserve balance, end of the period	Reserve balance, end of the period	$	11.3	$	10.9		Reserve balance, end of the period	$	11.6	$	10.5	$	11.6	$	10.5

The Company records reserves for losses related to known workers' compensation and general liability claims that have been incurred but not yet paid or are estimated to have been incurred but not yet reported to the Company. The undiscounted reserves are actuarially determined based on the Company's evaluation of the type and severity of individual claims and historical information, primarily its own claims experience, along with assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause these estimates to change in the future. Total accrued loss reserves were ~~$5.7~~$6.4 million and $5.8 million at ~~March 31,~~June 30, 2022 and December 31, 2021 respectively, of which ~~$3.5~~$4.2 million and $3.9 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.

For the three months ended ~~March 31,~~June 30, 2022, the Company recorded an income tax ~~expense~~benefit of ~~$0.9~~$0.8 million, reflecting a ~~18.0%~~17.0% effective tax rate, compared to a ~~$0.8~~$2.1 million income tax ~~expense~~provision for the three months ended ~~March 31,~~June 30, 2021, reflecting a ~~8.6%~~20.2% effective tax rate. The income tax benefit for the three months ended June 30, 2022 as compared to expense in the same period in 2021 was primarily driven by lower income from operations and changes in the relative weighting of jurisdictional income and

For the six months ended June 30, 2022, the Company recorded an income tax provision of $0.1 million, reflecting a 33.3% effective tax rate, compared to $2.9 million for the six months ended June 30, 2021, reflecting a 14.7% effective tax rate. The income tax expense for ~~three~~the six months ended ~~March 31,~~June 30, 2022 was ~~higher~~lower compared to the same period of 2021 primarily driven by lower earnings from operations and changes in the relative weighting of jurisdictional income and loss reduced by the effect of a release of reserves for uncertain tax positions associated with AMM in 2021 ~~primarily due to~~that did not recur in the current year and lower net discrete benefits from the vesting of employee shared-based compensation ~~awards offset by an increased net benefit for foreign-derived income.~~awards.

The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. The Company is currently under audit by the U.S. 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,~~June 30, 2022, the Company believes that it is more-likely-than-not that the tax positions it has taken will be sustained upon the resolution of its audits resulting in no material impact on its consolidated financial position, results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.

Certain customers have financed purchases of Company products through arrangements with third-party financing institutions in which the Company is contingently liable for customer debt of ~~$2.5~~$2.3 million and $2.4 million at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively. These arrangements expire at various dates through June 2025. 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 $0.2 million for 2022), on certain past customer equipment purchases that were financed by an outside finance company. The agreements provide that the Company will receive the lender's full security interest in the equipment financed if the Company is required to fulfill its contingent liability under these arrangements. The Company has recorded a liability of $1.0 million and $1.1 million related to these guarantees which were included in "Other current liabilities" in the Consolidated Balance Sheets as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively.

In addition, the Company is contingently liable under letters of credit issued under its $150.0 million revolving credit facility (the "Credit Facility") totaling ~~$2.5~~$2.6 million as of ~~March 31,~~June 30, 2022. The outstanding letters of credit expire at various dates through June 2023. The maximum potential amount of future payments under letters of credit issued under the Credit Facility for which the Company could be liable is $30.0 million as of ~~March 31,~~June 30, 2022. As of ~~March 31,~~June 30, 2022, the Company's foreign subsidiaries are contingently liable for a total of ~~$2.5~~$1.5 million in letters of credit and bank guarantees securing performance and advance payments. The maximum potential amount of future payments under these letters of credit and bank guarantees for which the Company could be liable is ~~$7.9~~$7.2 million as of ~~March 31,~~June 30, 2022.

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 ~~was~~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 ~~alleged~~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~~is filed on behalf of shareholders who purchased stock of the Company between July 26, 2016 and October 22, 2018 and ~~sought~~seeks monetary damages on behalf of the purported class. ~~The Company disputed these allegations and~~On October 25, 2019, the defendants filed a ~~motion~~Motion to ~~dismiss the lawsuit on October 25, 2019.~~Dismiss. On February 19, 2021, the ~~motion~~Motion to ~~dismiss~~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. 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 ~~On June 4, 2021, plaintiff filed a notice of appeal~~ 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 ~~its~~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

The Company's 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 special and consequential damages. The original purchase price of the equipment was approximately $8.5 million. GEFCO disputes the plaintiff's allegations and intends to defend this lawsuit vigorously. On July 7, 2020, the plaintiffs filed a separate lawsuit directly against Astec Industries, Inc. Besides a new claim based on fraudulent transfer, the allegations essentially mirror the GEFCO suit. Astec Industries, Inc. is vigorously defending this suit as well. 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.

The Company is subject to various claims and legal proceedings in the ordinary course of its business. If management believes that a loss arising from such claims and legal proceedings is probable and can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal fees) or the minimum estimated liability when the loss is estimated using a range and no point within the range is more probable than another. 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. If management believes that a loss arising from such claims and legal proceedings is either: (i) probable but cannot be reasonably estimated or (ii) reasonably estimable but not probable, the Company does not record the amount of the loss, but does make specific disclosure of such matter.

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. 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.

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021
(in millions) Infrastructure
Solutions Materials
Solutions Total Infrastructure
Solutions Materials
Solutions Total
Net Sales-Domestic:
Equipment sales $ 95.2 $ 45.6 $ 140.8 $ 99.2 $ 41.8 $ 141.0
Parts and component sales 56.4 20.8 77.2 51.9 17.7 69.6
Service and equipment installation revenue 6.7 0.2 6.9 5.8 0.1 5.9
Used equipment sales 1.7 — 1.7 2.9 — 2.9
Freight revenue 6.6 1.6 8.2 5.6 1.5 7.1
Other 0.1 (0.4) (0.3) (0.4) (0.5) (0.9)
Total domestic revenue 166.7 67.8 234.5 165.0 60.6 225.6
Net Sales-International:
Equipment sales 16.6 14.7 31.3 21.3 12.8 34.1
Parts and component sales 12.3 9.7 22.0 13.1 7.7 20.8
Service and equipment installation revenue 1.2 0.7 1.9 1.0 0.5 1.5
Used equipment sales 0.2 0.5 0.7 0.1 0.8 0.9
Freight revenue 0.5 0.3 0.8 0.8 0.3 1.1
Other — — — 0.2 0.2 0.4
Total international revenue 30.8 25.9 56.7 36.5 22.3 58.8
Total net sales $ 197.5 $ 93.7 $ 291.2 $ 201.5 $ 82.9 $ 284.4


	Three Months Ended June 30, 2022								Three Months Ended June 30, 2021
(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Net Sales-Domestic:
Equipment sales	$	114.1	$	55.8	$	0.1	$	170.0	$	82.4	$	43.6	$	—	$	126.0

Parts and component sales	43.7		21.1		—		64.8		40.6		21.3		—		61.9
Service and equipment installation revenue	5.9		0.1		—		6.0		3.9		0.1		—		4.0
Used equipment sales	0.3		—		—		0.3		2.8		0.7		—		3.5
Freight revenue	6.2		2.2		—		8.4		4.6		1.8		—		6.4
Other	0.1		(1.2)		—		(1.1)		—		(0.4)		—		(0.4)
Total domestic revenue	170.3		78.0		0.1		248.4		134.3		67.1		—		201.4

Net Sales-International:
Equipment sales	27.0		18.1		0.8		45.9		35.2		21.0		—		56.2

Parts and component sales	11.0		10.1		0.1		21.2		8.7		8.2		—		16.9
Service and equipment installation revenue	0.6		0.5		0.2		1.3		0.8		0.3		—		1.1
Used equipment sales	—		0.1		—		0.1		—		0.4		—		0.4
Freight revenue	0.7		0.4		—		1.1		0.7		0.8		—		1.5
Other	—		0.2		—		0.2		0.1		—		—		0.1
Total international revenue	39.3		29.4		1.1		69.8		45.5		30.7		—		76.2
Total net sales	$	209.6	$	107.4	$	1.2	$	318.2	$	179.8	$	97.8	$	—	$	277.6


	Six Months Ended June 30, 2022								Six Months Ended June 30, 2021
(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Net Sales-Domestic:
Equipment sales	$	209.3	$	101.4	$	0.1	$	310.8	$	181.6	$	85.4	$	—	$	267.0

Parts and component sales	100.1		41.9		—		142.0		92.5		39.0		—		131.5
Service and equipment installation revenue	12.6		0.3		—		12.9		9.7		0.2		—		9.9
Used equipment sales	2.0		—		—		2.0		5.7		0.7		—		6.4
Freight revenue	12.8		3.8		—		16.6		10.2		3.3		—		13.5
Other	0.2		(1.6)		—		(1.4)		(0.4)		(0.9)		—		(1.3)
Total domestic revenue	337.0		145.8		0.1		482.9		299.3		127.7		—		427.0

Net Sales-International:
Equipment sales	43.6		32.8		0.8		77.2		56.5		33.8		—		90.3

Parts and component sales	23.3		19.8		0.1		43.2		21.8		15.9		—		37.7
Service and equipment installation revenue	1.8		1.2		0.2		3.2		1.8		0.8		—		2.6
Used equipment sales	0.2		0.6		—		0.8		0.1		1.2		—		1.3
Freight revenue	1.2		0.7		—		1.9		1.5		1.1		—		2.6
Other	—		0.2		—		0.2		0.3		0.2		—		0.5
Total international revenue	70.1		55.3		1.1		126.5		82.0		53.0		—		135.0
Total net sales	$	407.1	$	201.1	$	1.2	$	609.4	$	381.3	$	180.7	$	—	$	562.0


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
United States	United States	$	234.5	$	225.6		United States	$	248.4	$	201.4	$	482.9	$	427.0
Canada	Canada	14.2		17.3			Canada	22.1		20.2		36.3		37.5
Australia	Australia	10.2		8.8			Australia	10.3		12.4		20.5		21.2
Africa	Africa	9.1		8.3			Africa	5.9		7.8		15.0		16.1
Europe	Europe	5.4		10.5			Europe	7.9		13.9		13.3		24.4
South America	South America	5.2		4.5			South America	7.4		4.5		12.6		9.0
Brazil							Brazil	7.0		4.9		10.8		9.1
Asia	Asia	4.0		1.3			Asia	3.1		2.4		7.1		3.7
Brazil		3.8		4.2
Mexico							Mexico	4.2		8.0		4.9		10.4
Central America	Central America	2.6		1.2			Central America	1.0		0.6		3.6		1.8
Mexico		0.7		2.4
Other	Other	1.5		0.3			Other	0.9		1.5		2.4		1.8
Total foreign	Total foreign	56.7		58.8			Total foreign	69.8		76.2		126.5		135.0
Total net sales	Total net sales	$	291.2	$	284.4		Total net sales	$	318.2	$	277.6	$	609.4	$	562.0

The Company has 2 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. Based on a review of these factors, the Company's India and Thailand sites have changed reportable segments beginning January 1, 2022. The India site was previously incorporated into the Materials Solutions segment and has moved to the Infrastructure Solutions segment while the Thailand site, which was previously included in the Infrastructure Solutions segment, has moved to the Materials Solutions segment.

Beginning January 1, 2022, the measure of segment profit or loss used by the Company's Chief Executive Officer, whom is determined to be the chief operating decision maker ("CODM"), to evaluate performance and allocate resources to the operating segments changed to Segment Operating Adjusted EBITDA. Segment Operating Adjusted EBITDA, a non-GAAP financial measure, is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered 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 are not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented.

Infrastructure Solutions – The Infrastructure Solutions segment comprises 11 active sites and designs, engineers, manufactures and markets a complete line of asphalt plants, concrete plants and their related components and ancillary equipment as well as supplying other heavy equipment. The sites based in North America within the Infrastructure Solutions segment are primarily manufacturing operations while those located outside of North America service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of the Company's manufacturing sites. The primary purchasers of the products produced by this segment are asphalt producers, highway and heavy equipment contractors, ready mix concrete producers, contractors in the construction and demolition recycling markets and domestic and foreign governmental agencies.

Materials Solutions – The Materials Solutions segment comprises 9 active sites and designs and manufactures heavy processing equipment, in addition to servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets. The sites within the Materials Solutions segment are primarily manufacturing operations with the AME and Thailand 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. The principal purchasers of aggregate processing equipment include distributors, highway and heavy equipment contractors, sand and gravel producers, recycle and crushing contractors, open mine operators, quarry operators, port and inland terminal authorities, power stations and foreign and domestic governmental agencies.

Corporate and Other – The Corporate and Other category consists primarily of the parent company, ~~and~~ the Company's captive insurance company, Astec Insurance, and the controls and automation business, which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the other reporting segments. The parent company and the captive insurance company provide support and corporate oversight for all of the sites. The controls and automation business manufactures hardware and software products that are marketed independently as well as included in certain products of the Company's other segments.


		Three Months Ended March 31, 2022									Three Months Ended March 31, 2021										Three Months Ended June 30, 2022								Three Months Ended June 30, 2021
(in millions)	(in millions)	Infrastructure Solutions		Materials Solutions			Corporate		Total		Infrastructure Solutions		Materials Solutions			Corporate		Total		(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Revenues from external customers	Revenues from external customers	$	197.5	$	93.7		$	—	$	291.2	$	201.5	$	82.9		$	—	$	284.4	Revenues from external customers	$	209.6	$	107.4	$	1.2	$	318.2	$	179.8	$	97.8	$	—	$	277.6
Intersegment sales	Intersegment sales	1.1		9.7			—		10.8		0.7		5.7			—		6.4		Intersegment sales	4.0		12.0		—		16.0		2.2		5.1		—		7.3
Segment Operating Adjusted EBITDA	Segment Operating Adjusted EBITDA	16.4		12.2			(9.8)		18.8		26.2		9.7			(15.0)		20.9		Segment Operating Adjusted EBITDA	15.9		9.5		(12.3)		13.1		16.5		15.9		(11.9)		20.5

						Six Months Ended June 30, 2022									Six Months Ended June 30, 2021

(in millions)																				(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Revenues from external customers																				Revenues from external customers	$	407.1	$	201.1	$	1.2	$	609.4	$	381.3	$	180.7	$	—	$	562.0
Intersegment sales																				Intersegment sales	5.1		21.7		—		26.8		2.9		10.8		—		13.7
Segment Operating Adjusted EBITDA																				Segment Operating Adjusted EBITDA	32.3		21.7		(22.1)		31.9		42.7		25.6		(26.9)		41.4


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
Reconciliation to total consolidated net income attributable to controlling interest
Reconciliation to total consolidated net (loss) income attributable to controlling interest							Reconciliation to total consolidated net (loss) income attributable to controlling interest
Segment Operating Adjusted EBITDA	Segment Operating Adjusted EBITDA	$	18.8	$	20.9		Segment Operating Adjusted EBITDA	$	13.1	$	20.5	$	31.9	$	41.4
Adjustments:	Adjustments:						Adjustments:
Transformation program	Transformation program	(5.3)		(3.2)			Transformation program	(6.4)		(2.1)		(11.7)		(5.3)

Facility closures and reduction in force	Facility closures and reduction in force	(1.0)		(0.8)			Facility closures and reduction in force	(0.4)		(0.8)		(1.4)		(1.6)

Asset impairment							Asset impairment	(3.0)		(0.2)		(3.0)		(0.2)
Gain on sale of property, equipment and business, net	Gain on sale of property, equipment and business, net	—		0.1			Gain on sale of property, equipment and business, net	—		0.2		—		0.3
Transaction costs	Transaction costs	(0.6)		—			Transaction costs	(0.8)		—		(1.4)		—
Interest expense, net	Interest expense, net	(0.2)		(0.1)			Interest expense, net	(0.4)		—		(0.6)		(0.1)
Depreciation and amortization	Depreciation and amortization	(6.7)		(7.6)			Depreciation and amortization	(6.9)		(7.5)		(13.6)		(15.1)
Income tax provision		(0.9)		(0.8)
Income tax benefit (provision)							Income tax benefit (provision)	0.8		(2.1)		(0.1)		(2.9)

Total consolidated net income attributable to controlling interest		$	4.1	$	8.5
Recapture of intercompany profit							Recapture of intercompany profit	0.1		0.3		0.1		0.3
Total consolidated net (loss) income attributable to controlling interest							Total consolidated net (loss) income attributable to controlling interest	$	(3.9)	$	8.3	$	0.2	$	16.8

The Company's Simplify, Focus and Grow Strategic Transformation ("SFG") initiative, which began in 2019, generally includes facility rationalization, asset impairment, workforce reduction, the associated costs of organizational integration activities and strategic transformational initiatives. As part of the SFG initiative several strategic decisions have been made to divest of underperforming manufacturing sites or product lines, including to close certain ~~of its~~ subsidiaries, close and sell ~~its~~ manufacturing sites and relocate the product lines manufactured at each of these sites to other Company locations; exit the oil, gas and water well product lines; and sell certain assets, which are included in "Restructuring, impairment and other asset charges, net" on the Company's 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. Certain of the costs associated with these decisions are separately identified as restructuring. The Company reports asset impairment charges and gains or losses on the sales of property and equipment collectively, with restructuring charges in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations to the extent they are experienced.


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
Restructuring charges:	Restructuring charges:						Restructuring charges:
Costs associated with closing Tacoma	Costs associated with closing Tacoma	$	0.8	$	0.4		Costs associated with closing Tacoma	$	—	$	0.6	$	0.8	$	1.0
Costs associated with closing Enid	Costs associated with closing Enid	0.2		—			Costs associated with closing Enid	0.4		—		0.6		—
Costs associated with closing Mequon	Costs associated with closing Mequon	—		0.4			Costs associated with closing Mequon	—		0.2		—		0.6

Total restructuring related charges	Total restructuring related charges	1.0		0.8			Total restructuring related charges	0.4		0.8		1.4		1.6

Asset impairment charges:							Asset impairment charges:

Other impairment charges							Other impairment charges	3.0		0.2		3.0		0.2
Total asset impairment charges							Total asset impairment charges	3.0		0.2		3.0		0.2

Gain on sale of property and equipment, net:	Gain on sale of property and equipment, net:						Gain on sale of property and equipment, net:
Gain on sale of property and equipment, net	Gain on sale of property and equipment, net	—		(0.1)			Gain on sale of property and equipment, net	—		(0.2)		—		(0.3)
Total gain on sale of property and equipment, net	Total gain on sale of property and equipment, net	—		(0.1)			Total gain on sale of property and equipment, net	—		(0.2)		—		(0.3)

Restructuring, impairment and other asset charges, net	Restructuring, impairment and other asset charges, net	$	1.0	$	0.7		Restructuring, impairment and other asset charges, net	$	3.4	$	0.8	$	4.4	$	1.5


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
Infrastructure Solutions	Infrastructure Solutions	$	1.0	$	0.4		Infrastructure Solutions	$	0.4	$	0.6	$	1.4	$	1.0
Materials Solutions	Materials Solutions	—		0.4			Materials Solutions	—		0.2		—		0.6

Total restructuring related charges	Total restructuring related charges	$	1.0	$	0.8		Total restructuring related charges	$	0.4	$	0.8	$	1.4	$	1.6


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
Infrastructure Solutions	Infrastructure Solutions	$	—	$	(0.1)		Infrastructure Solutions	$	—	$	(0.1)	$	—	$	(0.2)

Materials Solutions							Materials Solutions	—		(0.1)		—		(0.1)

Total gain on sale of property and equipment, net	Total gain on sale of property and equipment, net	$	—	$	(0.1)		Total gain on sale of property and equipment, net	$	—	$	(0.2)	$	—	$	(0.3)

In January 2021, the Company announced plans to close the Tacoma facility in order to simplify and consolidate operations. The Tacoma facility ceased manufacturing operations at the end of 2021. The transfer of the manufacturing and marketing of Tacoma product lines to other facilities within the Infrastructure Solutions segment was completed during the first quarter of 2022. In conjunction with this action, the Company recorded ~~$0.8~~$0.6 million and ~~$0.4~~$1.0 million of restructuring related charges during the three ~~month periods~~and six months ended ~~March 31, 2022 and~~June 30, 2021, respectively, in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations. Additional restructuring costs of $0.8 million were incurred during the three months ended March 31, 2022. The Company recorded the Tacoma facility's land, building and certain equipment

During the three months ended June 30, 2022, the Company determined that certain manufacturing equipment contracted to be constructed by a third-party vendor, which had been prepaid, would not be recovered. Impairment charges of $2.1 million were recorded in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations during the three months ended June 30, 2022. An additional $0.9 million of impairment charges were incurred related to abandoned in-process internally developed software that was determined to be impaired during the quarter.

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 supplemental executive retirement plan, using the treasury stock method. Performance stock units, which are considered contingently issuable, are considered dilutive when the related performance criterion has been met.

In April 2022, the Company acquired Canada-headquartered MINDS Automation Group, Inc., a leader in plant automation control systems and cloud-based data management in the asphalt industry. The total cash consideration payable to the selling shareholders was $18.2 million, subject to a customary purchase price adjustment for cash, indebtedness and net working capital and was funded from cash on hand. The acquisition is not expected to be material to the Company's Consolidated Statements of Operations.


	Three Months Ended June 30,		Six Months Ended June 30,
	2022	2021	2022	2021
Denominator:
Denominator for basic earnings per common share	22,850,515	22,742,162	22,816,684	22,688,339
Effect of dilutive securities	—	175,795	107,184	216,931
Denominator for diluted earnings per common share	22,850,515	22,917,957	22,923,868	22,905,270

This Quarterly Report on Form 10-Q, particularly the following discussion and analysis of our results of operations, financial condition and liquidity in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in this Quarterly Report on Form 10-Q that are not historical are hereby identified as "forward-looking statements" and may be indicated by words or phrases such as "anticipates," "supports," "plans," "projects," "expects," "believes," "should," "would," "could," "hope," and "forecast," and use of the future tense and similar words or phrases.

These forward-looking statements are based largely on management's expectations, which are subject to a number of known and unknown risks, uncertainties and other factors described under the caption "Item 1A. Risk Factors" in Part II of this Report, elsewhere herein and in other documents filed by the Company with the Securities and Exchange Commission, including Part I, Item 1A. Risk Factors of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.

The financial condition, results of operations and cash flows discussed in this Management's Discussion and Analysis of Financial Condition and Results of Operations are those of Astec Industries, Inc. and its consolidated subsidiaries, collectively, the "Company," "Astec," "we," "our" or "us." The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021. The financial position, results of operations, cash flows and other information included herein are not necessarily indicative of the financial position, results of operations and cash flows that may be expected in future periods.

We design, engineer, manufacture and market equipment and components used primarily in road building and related construction activities, as well as certain other products. Our products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface for both asphalt and concrete. We also manufacture certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction and demolition industries and port and rail yard operators; industrial heat transfer equipment; commercial whole-tree pulpwood chippers; horizontal grinders; blower trucks; commercial and industrial burners; and combustion control systems.

Our products are marketed both domestically and internationally primarily to asphalt producers; highway and heavy equipment contractors; utility contractors; sand and gravel producers; construction, demolition, recycle and crushing contractors; mine and quarry operators; port and inland terminal authorities; power stations and domestic and foreign government agencies. In addition to equipment sales, we manufacture and sell replacement parts for equipment in each of our product lines and replacement parts for some competitors' equipment. The distribution and sale of replacement parts is an integral part of our business.

During the first quarter of 2022, we identified errors in our previously issued financial statements and based on a quantitative and qualitative assessment determined the correction of these errors to be immaterial to the prior period consolidated financial statements taken as a whole. ~~To reflect the correction of the above errors, we~~We have revised the previously issued consolidated financial statements and prior period information included in Management's Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report on Form ~~10-Q.~~10-Q to reflect the correction of these errors.

Simplify, Focus and Grow Strategic Transformation ("SFG") – Our ongoing strategic transformation initiative focused on implementing new business strategies and a new operating structure is concentrated on aligning our operations under the OneASTEC business model with the strategic pillars of Simplify, Focus and Grow. SFG is a multi-year program with the primary goals of optimizing our manufacturing footprint and centralizing our business into common platforms and operating models to reduce complexity and cost, improve productivity and embed continuous improvement in our processes. These efforts are considered critical to enabling us to operate competitively and supporting future growth, which are expected to broadly benefit our customers, partners, employees and shareholders. Currently, we have two elements of the SFG program in operation, which include the implementation of a standardized enterprise resource planning ("ERP") system and a gross margin-generating lean manufacturing initiative.

Our multi-year phased implementation of a standardized ERP system across our global organization will replace much of our existing disparate core financial systems. The upgraded ERP will initially convert our internal operations, manufacturing, finance, human capital resources management and customer relationship systems to cloud-based platforms. This new ERP system will provide for standardized processes and integrated technology solutions that enable us to better leverage automation and process efficiency. An implementation of this scale is a major financial undertaking and has required, and will continue to require, substantial time and attention of management and key employees. We expect to complete the ERP global design in 2022 and convert the operations of one site in 2023 to set the foundation before accelerating the implementation at additional sites. We anticipate incurring total costs associated with the ERP implementation in the range of $125 to $150 million, with an estimated $25 to $30 million incurred per year beginning in 2022.

Costs incurred during the three and six months ended ~~March 31,~~June 30, 2022 ~~and March 31, 2021,~~ were ~~$5.3~~$6.4 million and ~~$3.2~~$11.7 million, respectively, which represent costs directly associated with the SFG ~~initiative~~initiatives and which cannot be capitalized in accordance with U.S. GAAP. These costs are included in "Selling, general and administrative expenses" in the Consolidated Statements of Operations. Additionally, at June 30, 2022, we have capitalized $6.8 million in deferred implementation costs associated with the ERP implementation that will be amortized ratably over the remaining contract term once the ERP is ready for use, which are recorded in "Other long-term assets" in the Consolidated Balance Sheets.

COVID-19 Pandemic – ~~The COVID-19 pandemic has caused significant disruptions to national and global economies and to our business.~~ Our business has been significantly affected by the contributory effects of the COVID-19 pandemic such as fluctuations in demand for our products, material price increases, increased shipping costs and lead times from production materials, supplies and parts, labor shortages and increased labor costs. These trends continue to impact our business today and may continue to impact our business in the near-term. Furthermore, while our business operations were fully operational during the first quarter of 2022, they were not at optimal manufacturing efficiency due to a spike in the COVID-19 omicron variant impacting our labor force.

Tacoma Site Closure -– In January 2021, we announced plans to close the Tacoma facility in order to simplify and consolidate operations. The Tacoma facility ceased manufacturing operations at the end of 2021. The transfer of the manufacturing and marketing of Tacoma product lines to other facilities within the Infrastructure Solutions segment was completed during the first quarter of 2022. ~~We recorded the~~The Tacoma facility's land, building and certain equipment assets of $15.4 million, which are currently being marketed for sale, asare included in "Assets held for ~~sale at March 31, 2022~~sale" in ~~our~~the Consolidated Balance ~~Sheets.~~Sheets at June 30, 2022.

Our financial performance is affected by a number of factors, including the cyclical nature and varying conditions of the markets we serve. Demand in these markets fluctuates in response to overall economic conditions and is particularly sensitive to the amount of public sector spending on infrastructure development, privately funded infrastructure development and changes in the prices of liquid asphalt, oil, natural gas and steel. In addition, many of our markets are highly competitive, and our products compete worldwide with a number of other manufacturers and dealers that produce and sell similar products.

We experienced continual strengthening of our backlog of orders throughout 2021, which has ~~grown again~~continued to grow during the first ~~quarter~~half of 2022 ~~in both the Infrastructure Solutions and Materials Solutions segments.~~across our global organization. The backlog of orders as of ~~March 31,~~June 30, 2022 was ~~$834.7~~$837.4 million compared to ~~$420.8~~$436.1 million as of ~~March 31,~~June 30, 2021, an increase of ~~$413.9~~$401.3 million or ~~98.4%~~92.0%. Increased orders are driven by (i) the continuation of the pent-up demand experienced in 2021 ~~(ii)~~influenced by both customer retail and dealer inventory replenishment, ~~following~~(ii) ongoing economic uncertainty ~~as a result of COVID-19~~and longer lead times related to higher demand and (iii) the infrastructure investment by the United States' government under the Infrastructure Investment and Jobs Act ("IIJA") enacted in November 2021. In addition, we are continuing to experience constrained production cycles due to increased lead times for certain production materials, parts and supplies and manufacturing labor shortages which have and may continue to impact our ability to satisfy the orders in our backlog in a manner that meets the timelines of our customers.

Federal funding provides a significant portion of all highway, street, roadway and parking construction in the United States. We believe that federal highway funding influences the purchasing decisions of our customers, who are typically more amenable to making capital equipment purchases with long-term federal legislation in place. As noted above, the U.S. government enacted the IIJA in November 2021. 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. We believe that multi-year highway programs (such as the IIJA) will have the greatest positive impact on the road construction industry and allow our customers to plan and execute longer-term projects.

Significant portions of our revenues from the Infrastructure Solutions segment relate to the sale of equipment involved in the production, handling, recycling or application of asphalt mix. Liquid asphalt is a by-product of oil refining. An increase or decrease in the price of oil impacts the cost of asphalt, which is likely to alter demand for asphalt and therefore affect demand for certain of our products. While increasing oil prices may have a negative financial impact on many of our customers, our equipment can use a significant amount of reclaimed asphalt pavement, thereby partially mitigating the effect of increased oil prices on the final cost of asphalt for the customer. We continue to develop products and initiatives to reduce the amount of oil and related products required to produce asphalt. While oil prices have increased throughout the prior year and the first half of 2022, its price volatility makes it difficult to predict the costs of oil-based products used in road construction such as liquid asphalt and gasoline. Oil prices have routinely fluctuated in recent years and are expected to continue to fluctuate in the future. We have experienced a slowing of the rate of inflation on oil prices at the end of the second quarter and leading into July 2022. Based on the current macroeconomic environment, including the ongoing impact of the conflict in Ukraine, we ~~expect~~anticipate that the rate of price inflation will plateau during the third quarter and that oil prices will ~~continue to increase in~~remain at relatively high levels throughout the remainder of 2022.

Steel is a major component of our equipment. With a drop in supply, similar to oil, steel prices increased throughout the prior year. As a result, we have experienced a rising cost of steel. We anticipate that steel demand will remain strong throughout 2022, bolstered by the IIJA domestically and impacted by international production capacity being restricted by the conflict in Ukraine. However, we ~~expect new steelmaking capacity~~have observed a decline in market demand as buyers are reducing on hand inventory by restricting purchases to ~~enter the market during 2022 that will move us towards~~immediate needs. As such, we have experienced a ~~more historical balance~~slowing of ~~supply and demand, thus slowing~~ the pace of recent price ~~inflation we have recently experienced. In response to these factors, we~~inflation. We continue to employ flexible strategies to ensure supply and minimize the impact of price volatility. ~~Ongoing~~Potential ongoing constraints in the supply of certain steel products will continue pressuring the availability of other components used in our manufacturing process. Furthermore, given the recent volatility of steel prices and the nature of our customers' orders, we may not be able to pass through all of the increases in steel costs to our customers, which negatively impacts our gross ~~profit.~~profit and margins.

We actively manage our global supply chain for any identified constraints and volatility. Challenges related to our supply chain, including potential labor shortages at our vendors and logistics partners and the availability of shipping containers, cargo ships and unloading space, have continued to drive increased lead times and expenses for certain components used in our manufacturing processes. We cannot estimate the full impact that any future disruptions might have on our operations. We continually monitor potential future supply costs and availability.

In addition, we have experienced a shortage of necessary production personnel and increasing labor costs to attract staff in our manufacturing operations. ~~Furthermore, we experienced a spike in the COVID-19 omicron variant impacting our labor force in December 2021 and in the beginning of the first quarter.~~ This has resulted in a variety of challenges in running our operations efficiently to meet strong customer demand. We continue to adjust our production schedules and manufacturing workload distribution, outsource components, implement efficiency improvements and actively modify our recruitment process and compensation and benefits to attract and retain production personnel in our manufacturing facilities.

Whenever possible, we attempt to cover increased costs of production by adjusting the prices of our products. Backlog fulfillment times from the initial order to completing the contracted sale vary and can extend past twelve months with the growth we have experienced in the backlog. For this reason, we have limitations on our ability to pass on cost increases to our customers on a short-term basis. In addition, the markets we serve are competitive in nature, and competition limits our ability to pass through

and component sales of ~~$8.6~~$7.2 million, ~~(ii)~~(iii) service and equipment installation revenue of ~~$1.4~~$2.2 million and ~~(iii)~~(iv) freight revenue of ~~$0.9~~$1.6 million partially offset by decreased used equipment sales of ~~$2.3~~$3.5 million. Included in these increases is $1.2 million of incremental net sales from an acquired business. Sales reported by our foreign subsidiaries in U.S. dollars for the second quarter of 2022 would have been $4.9 million higher had second quarter 2022 foreign exchange rates been the same as second quarter 2021 rates.

Net sales for the first six months of 2022 were $609.4 million compared to $562.0 million for the first six months of 2021, an increase of $47.4 million or 8.4%. The increase in net sales was primarily driven by changes in the volume, pricing and mix of sales that generated increases in (i) equipment sales of $30.7 million, (ii) parts and component sales of $16.0 million, (iii) service and equipment installation revenue of $3.6 million and ~~$1.6~~(iv) freight revenue of $2.4 million ~~in lower~~partially offset by decreased used equipment ~~sales.~~sales of $4.9 million. Included in these increases is $1.2 million of incremental net sales from an acquired business. Sales reported by our foreign subsidiaries in U.S. dollars for the first ~~quarter~~six months of 2022 would have been ~~$1.7~~$6.8 million higher had the first six months of 2022 foreign exchange rates been the same as the first six months of 2021 rates.

Domestic sales for the ~~first~~second quarter of 2022 were ~~$234.5~~$248.4 million or ~~80.5%~~78.1% of consolidated net sales compared to ~~$225.6~~$201.4 million or ~~79.3%~~72.6% of consolidated net sales for the second quarter of 2021, an increase of ~~$8.9~~$47.0 million or ~~3.9%~~23.3%. Domestic sales increased primarily due to: (i) ~~$7.6~~$44.0 million higher equipment sales (ii) $2.9 million higher parts and component sales, ~~(ii) $1.1~~(iii) $2.0 million higher service and equipment installation revenue and ~~(iii) $1.1~~(iv) $2.0 million higher freight revenue. These increases were partially offset by lower used equipment sales of ~~$1.3~~$3.2 million.

Domestic sales for the first six months of 2022 were $482.9 million or 79.2% of consolidated net sales compared to $427.0 million or 76.0% of consolidated net sales for the first six months of 2021, an increase of $55.9 million or 13.1%. Domestic sales increased primarily due to: (i) $43.8 million higher equipment sales (ii) $10.5 million higher parts and component sales, (iii) $3.1 million higher freight revenue and (iv) $3.0 million higher service and equipment installation revenue. These increases were partially offset by lower used equipment sales of $4.4 million.

International sales for the ~~first~~second quarter of 2022 were ~~$56.7~~$69.8 million or ~~19.5%~~21.9% of consolidated net sales compared to ~~$58.8~~$76.2 million or ~~20.7%~~27.4% of consolidated net sales for the second quarter of 2021, a decrease of ~~$2.1~~$6.4 million or ~~3.6%~~8.4%. International sales decreased primarily due to ~~$3.0~~$10.3 million lower equipment sales partially offset by ~~$1.1~~$4.3 million increased parts and component sales. Included in these increases is $1.1 million of incremental net sales from an acquired business.

~~Consolidated gross~~Gross profit for the ~~first~~second quarter of 2022 was ~~$66.1~~$60.6 million or ~~22.7%~~19.0% of net sales as compared to ~~$68.2~~$66.1 million or ~~24.0%~~23.8% of net sales for the ~~first~~second quarter of 2021, a decrease of ~~$2.1~~$5.5 million or ~~3.1%~~8.3%. The decrease was primarily driven by the impact of inflation on materials, labor and overhead of ~~$25.5~~$34.3 million and manufacturing inefficiencies of $0.8 million largely due to supply chain and logistics disruptions. These decreases were partially offset by the impact of net favorable volume, pricing and mix that generated ~~$23.7~~$29.1 million higher gross profit.

Gross profit for the first six months of 2022 was $126.7 million or 20.8% of net sales as compared to $134.3 million or 23.9% of net sales for the first six months of 2021, a decrease of $7.6 million or 5.7%. The decrease was primarily driven by the impact of inflation on materials, labor and overhead of $59.8 million and manufacturing inefficiencies of $1.0 million largely due to supply chain and logistics disruptions. These decreases were partially offset by the impact of net favorable volume, pricing and mix that generated $52.8 million higher gross profit.

Selling, general and administrative expenses increased $5.7 million, or 11.9%, to $53.7 million or 16.9% of net sales for the ~~first~~second quarter of 2022, ~~were $52.7~~compared to $48.0 million or ~~18.1%~~17.3% of net sales ~~compared~~for the second quarter of 2021 primarily due to: (i) $4.3 million increased costs related to ~~$51.7~~our SFG transformation program, (ii) increased net payroll and employee benefit costs of $1.7 million associated with increased headcount throughout our organization partially offset by $1.8 million of lower health insurance

Selling, general and administrative expenses increased $6.7 million, or ~~18.2%~~6.7%, to $106.4 million or 17.5% of net sales for the first ~~quarter~~six months of ~~2021, an increase of $1.0~~2022, compared to $99.7 million or ~~1.9%,~~17.7% of net sales for the first six months of 2021 primarily due to: (i) ~~$2.4~~$6.4 million increased costs related to our SFG transformation program, (ii) $3.1 million of exhibit, promotional and travel costs due to the return of in-person industry conferences and business activities, ~~(ii) $2.1 million increased costs related to our SFG transformation program,~~ (iii) ~~increased technology expenses of $0.6 million and (iii) $0.6~~$1.4 million of ~~transaction~~acquisition and integration related costs primarily associated with the acquisition of MINDS ~~Automation Group, Inc. ("MINDS") that was completed in April 2022.~~and (iv) incremental expenses associated with MINDS of $0.9 million. These increases were partially offset by: (i) lower net payroll and employee benefit costs of $1.9 million driven by lower health insurance claims experience of ~~$2.6~~$5.7 million and reduced deferred compensation program ~~cost driven by~~costs associated with our stock price changes of ~~$1.6~~$1.3 million ~~and reduced~~which were offset by increased headcount throughout our organization, (ii) lower depreciation and amortization expense of ~~$0.9~~$1.8 million and (iii) reduced expenses related to closing a site location of $0.8 million.


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Restructuring charges:
Costs associated with closing Tacoma	$	—	$	0.6	$	0.8	$	1.0
Costs associated with closing Enid	0.4		—		0.6		—
Costs associated with closing Mequon	—		0.2		—		0.6





Total restructuring related charges	0.4		0.8		1.4		1.6

Asset impairment charges:


Other impairment charges	3.0		0.2		3.0		0.2
Total asset impairment charges	3.0		0.2		3.0		0.2

Gain on sale of property and equipment, net:
Gain on sale of property and equipment, net	—		(0.2)		—		(0.3)
Total gain on sale of property and equipment, net	—		(0.2)		—		(0.3)

Restructuring, impairment and other asset charges, net	$	3.4	$	0.8	$	4.4	$	1.5

Our income tax benefit for the second quarter of 2022 was $0.8 million compared to an income tax expense of $2.1 million for the second quarter of 2021. Our effective income tax rate was 17.0% for the second quarter of 2022 compared to 20.2% for the second quarter of 2021. The income tax benefit for the three months ended June 30, 2022 as compared to expense in the same period in 2021 was primarily driven by lower income from operations and changes in the relative weighting of jurisdictional income and loss reduced by the effect of a net discrete tax benefit in the prior year that did not recur in the current year related to the release of reserves for uncertain tax positions associated with Astec Mobile Machinery GmbH ("AMM") whose dissolution was completed during the second quarter of 2021.

Our income tax expense for the first ~~quarter~~six months of 2022 was ~~$0.9~~$0.1 million compared to ~~$0.8~~$2.9 million for the first ~~quarter~~six months of 2021. Our effective income tax rate was ~~18.0%~~33.3% for the first ~~quarter~~six months of 2022 compared to ~~8.6%~~14.7% for the first ~~quarter~~six months of 2021. The income tax expense for the six months ended June 30, 2022 was ~~higher~~lower compared to the same period of 2021 primarily ~~due to~~driven by lower earnings from operations and changes in the relative weighting of jurisdictional income and loss reduced by the effect of a release of reserves for uncertain tax positions associated with AMM in 2021 that did not recur in the current year and lower net discrete benefits from the vesting of employee shared-based compensation ~~awards offset by an increased net benefit for foreign-derived income.~~awards.

The backlog of orders as of ~~March 31,~~June 30, 2022 was ~~$834.7~~$837.4 million compared to ~~$420.8~~$436.1 million as of ~~March 31,~~June 30, 2021, an increase of ~~$413.9~~$401.3 million or ~~98.4%~~92.0%. Domestic backlog increased ~~$384.1~~$366.3 million or ~~119.0%~~108.1% to ~~$707.0~~$705.1 million and international backlog increased ~~$29.8~~$35.0 million or ~~30.4%~~36.0% to ~~$127.7~~$132.3 million. The backlog increased ~~$263.1~~$350.6 million to ~~$517.7~~$568.3 million in the Infrastructure Solutions segment and increased ~~$150.8~~$49.1 million to ~~$317.0~~$267.5 million in the Materials Solutions segment. Backlog generated by Corporate and Other during 2022 totaled $1.6 million. Increased orders were driven by (i) the continuation of the pent-up demand experienced in 2021 ~~(ii)~~influenced by both customer retail and dealer inventory replenishment, ~~following~~(ii) ongoing economic uncertainty ~~as a result of COVID-19~~and longer lead times related to higher demand and (iii) the infrastructure investment by the United States' government under the IIJA enacted in November 2021.


		Three Months Ended March 31,									Three Months Ended June 30,				$ Change			% Change
(in millions)	(in millions)	2022		2021		$ Change		% Change		(in millions)	2022		2021
Infrastructure Solutions	Infrastructure Solutions	$	197.5	$	201.5	$	(4.0)	(2.0)	%	Infrastructure Solutions	$	209.6	$	179.8		$	29.8			16.6	%
Materials Solutions	Materials Solutions	93.7		82.9		10.8		13.0	%	Materials Solutions	107.4		97.8		9.6			9.8	%
Corporate and Other										Corporate and Other	1.2		—		1.2			100.0	%

Sales in this segment were ~~$197.5~~$209.6 million for the ~~first~~second quarter of 2022 compared to ~~$201.5~~$179.8 million for the same period in 2021, ~~a decrease~~an increase of ~~$4.0~~$29.8 million or ~~2.0%~~16.6%. The ~~decrease~~increase was primarily driven by ~~unfavorable~~favorable net volume, pricing and the mix of sales that ~~resulted in lower~~generated increased (i) new ~~and used~~ equipment sales of ~~$8.0~~$23.5 million, ~~and $1.2 million, respectively. These decreases were partially offset by higher (i)~~(ii) parts and component sales of ~~$3.6~~$5.4 million, ~~(ii)~~(iii) service and equipment installation ~~sales~~revenue of ~~$1.1~~$1.8 million and ~~(iii)~~(iv) freight revenue of ~~$0.7 million, respectively.~~

Domestic sales for the Infrastructure Solutions segment increased ~~$1.7~~$36.0 million or ~~1.0%~~26.8% for the ~~first~~second quarter of 2022 compared to the same period in 2021 primarily due to (i) increased new equipment sales of $31.7 million, (ii) increased parts and component sales of ~~$4.4~~$3.1 million, (ii) ~~increased freight revenue of $1.0 million and (iii)~~ increased service and equipment installation sales of ~~$0.9~~$2.0 million and (iii) increased freight revenue of $1.6 million. These increases were partially offset by lower ~~new and~~ used equipment sales of ~~$3.2 million and $1.3 million, respectively.~~$2.5 million.

Sales in this segment were ~~$93.7~~$107.4 million for the ~~first~~second quarter of 2022 compared to ~~$82.9~~$97.8 million for the same period in 2021, an increase of ~~$10.8~~$9.6 million or ~~13.0%~~9.8%. The increase was primarily driven by ~~the~~ favorable ~~impact of~~net volume, pricing and the mix of sales that generated ~~increases in~~increased new equipment and parts and component sales of ~~$5.7~~$9.3 million and ~~$5.1~~$1.7 million, respectively. These increases were partially offset by lower used equipment sales of $1.0 million.

Sales in this segment were $407.1 million for the first six months of 2022 compared to $381.3 million for the same period in 2021, an increase of $25.8 million or 6.8%. The increase was primarily driven by favorable net volume, pricing and the mix of sales that generated increased (i) new equipment sales of $14.8 million, (ii) parts and component sales of $9.1 million, (iii) service and equipment installation revenue of $2.9 million and (iv) freight revenue of $2.3 million. These increases were partially offset by lower used equipment sales of $3.6 million.

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by our Chief Executive Officer, whom is determined to be the chief operating decision maker ("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. This non-GAAP financial measure can be useful to investors in understanding operating results and the performance of our core business from management's perspective. Our presentation of Segment Operating Adjusted EBITDA may not be comparable to similar measures used by other companies and are 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. See Note ~~10.~~11. "Segment Information," of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of Segment Operating Adjusted EBITDA to total consolidated net income attributable to controlling interest.

Infrastructure Solutions segment: Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was ~~$16.4~~$15.9 million for the ~~first~~second quarter of 2022 compared to ~~$26.2~~$16.5 million for the same period in 2021, a decrease of ~~$9.8~~$0.6 million or ~~37.4%~~3.6%. The decrease in Segment Operating Adjusted EBITDA resulted primarily ~~from: (i)~~from the impact of higher inflation on materials, labor and overhead costs of ~~$17.3~~$19.3 million ~~(ii)~~and increased general and administrative costs of ~~$3.5~~$1.1 million. Incorporated in these increased costs is a $1.8 million ~~and (iii) $0.7 million in manufacturing inefficiencies due to supply chain and logistics disruptions as well as pandemic related labor restrictions. Annual~~impact of annual incentive compensation, which was recorded in Corporate and Other in the prior year period and has been reflected in the Infrastructure Solutions segment in the current year, ~~resulting in a $1.5 million impact.~~as well as the benefit from improved health insurance claims experience allocated from Corporate of $3.1 million. These increased costs were partially

Materials Solutions segment: Segment Operating Adjusted EBITDA for the Materials Solutions segment was ~~$12.2~~$9.5 million for the ~~first~~second quarter of 2022 compared to ~~$9.7~~$15.9 million for the same period in 2021, ~~an increase~~a decrease of ~~$2.5~~$6.4 million or ~~25.8%~~40.3%. The ~~increase~~decrease in Segment Operating Adjusted EBITDA between periods resulted primarily from the impact of ~~favorable volume, pricing and mix that generated $12.0 million higher gross profit. These increases were partially offset by the impact of~~ higher inflation on materials, labor and overhead costs of ~~$8.2~~$15.0 million, ~~and~~ increased general and administrative costs of ~~$1.5 million. Annual~~$0.9 million and manufacturing inefficiencies of $1.6 million due to supply chain and logistics disruptions. Incorporated in these increased costs is a $1.0 million impact of annual incentive compensation, which was recorded in Corporate and Other in the prior year period and has been reflected in the Materials Solutions segment in the current year, ~~resulting in a $0.7~~as well as the benefit from improved health insurance claims experience allocated from Corporate of $0.9 million. These increased costs were partially offset by the impact of favorable volume, pricing and mix that generated $11.1 million ~~impact.~~higher gross profit.

~~Corporate:~~ Corporate and Other: Corporate and Other operations had net expenses of ~~$9.8~~$12.3 million for the ~~first~~second quarter of 2022 compared to ~~$15.0~~$11.9 million for the second quarter of 2021, an increase of $0.4 million or 3.4%. The increase in expenses was primarily driven by $1.8 million of increased health insurance costs net of $4.0 million that was allocated to Infrastructure Solutions and Materials Solutions and increased deferred compensation program cost driven by our stock price changes of $0.4 million. These increases were partially offset by lower professional services fees of $1.3 million and lower net annual incentive compensation of $0.8 million including $2.8 million that was recorded within Infrastructure Solutions and Materials Solutions in the current year as compared to at Corporate in the prior year period.

Infrastructure Solutions segment: Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $32.3 million for the first ~~quarter~~six months of 2022 compared to $42.7 million for the same period in 2021, a decrease of $10.4 million or 24.4%. The decrease in Segment Operating Adjusted EBITDA resulted primarily from the impact of higher inflation on materials, labor and overhead costs of $36.6 million, increased general and administrative costs of $4.6 million. Incorporated in these increased costs is a $3.3 million impact of annual incentive compensation, which was recorded in Corporate and Other in the prior year period and has been reflected in the Infrastructure Solutions segment in the current year, as well as the benefit from improved health insurance claims experience allocated from Corporate of $3.1 million. These increased costs were partially offset by the impact of favorable volume, pricing and mix that generated $29.7 million higher gross profit, reduced expenses related to closed site locations of $0.8 million and manufacturing efficiencies of $0.3 million.

Materials Solutions segment: Segment Operating Adjusted EBITDA for the Materials Solutions segment was $21.7 million for the first six months of 2022 compared to $25.6 million for the same period in 2021, a decrease of $3.9 million or 15.2%. The decrease in Segment Operating Adjusted EBITDA resulted primarily from the impact of higher inflation on materials, labor and overhead costs of $23.2 million, increased general and administrative costs of $2.4 million and manufacturing inefficiencies of $1.4 million due to supply chain and logistics disruptions. Incorporated in these increased costs is a $1.7 million impact of annual incentive compensation, which was recorded in Corporate and Other in the prior year period and has been reflected in the Materials Solutions segment in the current year, as well as the benefit from improved health insurance claims experience allocated from Corporate of $0.9 million. These increased costs were partially offset by the impact of favorable volume, pricing and mix that generated $23.1 million higher gross profit.

~~experience of $2.6 million, $2.2 million of~~net annual incentive compensation of $2.8 million including $5.0 million that was recorded within ~~the reportable segments~~Infrastructure Solutions and Materials Solutions in the current year as compared to at Corporate in the prior year period, reduced professional fees of $1.6 million and reduced deferred compensation program cost driven by our stock price changes of ~~$1.6~~$1.3 million. These decreases were partially offset by increases in ~~consultant costs~~payroll expenses related to increased headcount of $0.9 million and ~~stock~~share-based compensation ~~expenses.~~expenses of $0.5 million.

Our primary sources of liquidity and capital resources are cash and cash equivalents on hand, borrowing capacity under a $150.0 million revolving credit facility (the "Credit Facility") and cash flows from operations. WeAt June 30, 2022, we had ~~$111.4 million~~total cash, cash equivalents and restricted cash of ~~cash~~$50.6 million. Cash and cash equivalents available for operating purposes ~~as of March 31, 2022,~~was $48.0 million, of which ~~$21.8~~$27.4 million was held by our foreign ~~subsidiaries.~~subsidiaries and is considered to be indefinitely invested in those

jurisdictions. In April 2022, we acquired MINDS with a total cash consideration paid to the selling shareholders of $19.3 million funded from cash on hand. Our future cash requirements include working capital needs, capital expenditures, vendor hosted software arrangements including the related implementation costs, unrecognized tax benefits and operating lease payments. In addition, ~~we intend to fund~~our variable cash uses may include the payment of our quarterly cash dividend, financing other strategic initiatives of our business, including the SFG transformation and ~~may identify~~ strategic acquisitions ~~which cash uses are variable in nature.~~

~~In April 2022, we acquired MINDS with a total cash consideration payable to the selling shareholders of $18.2 million, subject to adjustment for cash, indebtedness~~ and ~~net working capital and was funded from cash on hand.~~share repurchases under our share repurchase authorization. We believe that our current working capital, cash flows generated from future operations and available capacity under our credit facility will be sufficient to meet working capital and capital expenditure requirements for our existing business for at least the next 12 months.

We did not have any outstanding borrowings on the Credit Facility at ~~March 31,~~June 30, 2022 or December 31, 2021. ~~In addition, no borrowings have been made under the Credit Facility during 2022.~~ Our outstanding letters of credit totaling ~~$2.5~~$2.6 million decreased borrowing availability to ~~$147.5~~$147.4 million under the revolving credit facility as of ~~March 31,~~June 30, 2022. We anticipate utilizing the Credit Facility with more frequency in the near-term to support our domestic working capital needs in response to supply chain disruptions. The Credit Facility agreement contains certain financial covenants, including provisions concerning required levels of annual net income and minimum tangible net worth. We were in compliance with the financial covenants of the Credit Facility at ~~March 31,~~June 30, 2022. The Credit Facility expires on December 29, 2023.

Certain of our international subsidiaries in South Africa, Australia, Brazil, Canada and the United Kingdom each have separate credit facilities with local financial institutions to finance short-term working capital needs, as well as to cover foreign exchange contracts, performance letters of credit, advance payment and retention guarantees. In addition, the Brazilian subsidiary maintains an independent credit facility at a separate financial institution and also enters into order anticipation agreements on a periodic basis. Both the outstanding borrowings under the credit facilities of the international subsidiaries and the order anticipation agreements are recorded in "Short-term debt" in our Consolidated Balance Sheets. Each of the credit facilities are generally guaranteed by Astec Industries, Inc. and/or secured with certain assets of the local subsidiary.


		Three Months Ended March 31,				Increase / Decrease			Six Months Ended June 30,				Increase / Decrease
(in millions)	(in millions)	2022		2021				(in millions)	2022		2021
Net income	Net income	$	4.1	$	8.5	$	(4.4)	Net income	$	0.2	$	16.8	$	(16.6)
Deferred compensation (benefit) expense		(0.8)		0.7		(1.5)
Deferred tax (benefit) provision	Deferred tax (benefit) provision	(4.0)		0.8		(4.8)		Deferred tax (benefit) provision	(8.0)		5.4		(13.4)
Sale (purchase) of trading securities, net		0.6		(1.4)		2.0
Decrease (Increase) in receivables and other contract assets		5.3		(26.4)		31.7
(Increase) decrease in inventories		(53.7)		5.3		(59.0)
Asset impairment charges, net								Asset impairment charges, net	3.0		0.2		2.8
Purchase of trading securities, net								Purchase of trading securities, net	(0.5)		(3.1)		2.6
Receivables and other contract assets								Receivables and other contract assets	(21.5)		(32.5)		11.0
Increase in inventories								Increase in inventories	(71.5)		(6.6)		(64.9)
Increase in prepaid expenses	Increase in prepaid expenses	(1.0)		0.7		(1.7)		Increase in prepaid expenses	(3.8)		(0.1)		(3.7)
Increase in other assets								Increase in other assets	(4.8)		(0.5)		(4.3)
Increase in accounts payable	Increase in accounts payable	17.3		15.8		1.5		Increase in accounts payable	22.7		25.5		(2.8)
Increase in accrued payroll and related expenses		3.6		2.6		1.0
Decrease in other accrued liabilities		(2.9)		(0.3)		(2.6)
Increase (decrease) in customer deposits		9.3		(0.9)		10.2
Increase in other accrued liabilities								Increase in other accrued liabilities	2.0		6.6		(4.6)
Increase in customer deposits								Increase in customer deposits	14.2		0.9		13.3
Income taxes payable/prepaid	Income taxes payable/prepaid	4.4		0.8		3.6		Income taxes payable/prepaid	1.8		(7.3)		9.1
Other, net	Other, net	8.2		8.4		(0.2)		Other, net	24.3		25.2		(0.9)
Net cash (used in) provided by operating activities	Net cash (used in) provided by operating activities	$	(9.6)	$	14.6	$	(24.2)	Net cash (used in) provided by operating activities	$	(41.9)	$	30.5	$	(72.4)

Net cash (used in) provided by operating activities decreased ~~$24.2~~$72.4 million for the first ~~three~~six months of 2022 as compared to the first ~~three~~six months of 2021. The decrease was primarily driven by (i) the increase of inventories on hand of $64.9 million due to higher backlog and supply chain ~~logistics challenges of $59.0 million,~~disruptions, (ii) lower net income and changes in the deferred tax ~~benefit~~position of ~~$4.8~~$13.4 million and ~~lower net income~~(iii) the timing of payments on accounts payable and accrued liabilities of $7.4 million. These incremental cash uses were partially offset by (i) the timing of receivables and other contract assets of ~~$31.7~~$11.0 million, ~~and~~(ii) increased customer deposits of ~~$10.2~~$13.3 million associated with increased ~~backlog.~~backlog and (iii) the timing of income tax payments of $9.1 million.


		Three Months Ended March 31,				Increase / Decrease			Six Months Ended June 30,				Increase / Decrease
(in millions)	(in millions)	2022		2021				(in millions)	2022		2021
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	$	—	$	0.1	$	(0.1)	Acquisitions, net of cash acquired	$	(17.8)	$	0.1	$	(17.9)
Price adjustment on prior sale of subsidiary	Price adjustment on prior sale of subsidiary	—		(1.1)		1.1		Price adjustment on prior sale of subsidiary	—		(1.1)		1.1
Expenditures for property and equipment	Expenditures for property and equipment	(11.6)		(3.3)		(8.3)		Expenditures for property and equipment	(18.8)		(7.2)		(11.6)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	0.2		1.4		(1.2)		Proceeds from sale of property and equipment	0.2		1.5		(1.3)
Purchase of investments	Purchase of investments	(0.3)		(0.2)		(0.1)		Purchase of investments	(0.6)		(0.6)		—
Sale of investments	Sale of investments	—		0.1		(0.1)		Sale of investments	0.1		0.5		(0.4)
Net cash used in investing activities	Net cash used in investing activities	$	(11.7)	$	(3.0)	$	(8.7)	Net cash used in investing activities	$	(36.9)	$	(6.8)	$	(30.1)


		Three Months Ended March 31,				Increase / Decrease			Six Months Ended June 30,				Increase / Decrease
(in millions)	(in millions)	2022		2021				(in millions)	2022		2021
Payment of dividends	Payment of dividends	$	(2.8)	$	(2.5)	$	(0.3)	Payment of dividends	$	(5.5)	$	(5.0)	$	(0.5)
Borrowings (repayments), net under bank loans		1.8		(0.3)		2.1
Proceeds from (repayments of) borrowings, net on credit facility and bank loans								Proceeds from (repayments of) borrowings, net on credit facility and bank loans	3.2		(0.4)		3.6
Withholding tax paid upon vesting of share-based compensation awards	Withholding tax paid upon vesting of share-based compensation awards	(1.3)		(3.0)		1.7		Withholding tax paid upon vesting of share-based compensation awards	(1.6)		(3.2)		1.6
Other, net	Other, net	—		0.2		(0.2)		Other, net	0.2		0.5		(0.3)
Net cash used in financing activities	Net cash used in financing activities	$	(2.3)	$	(5.6)	$	3.3	Net cash used in financing activities	$	(3.7)	$	(8.1)	$	4.4

As announced in a Form 8-K filing on July 30, 2018, we approved a share repurchase program, which authorizes us to repurchase up to $150.0 million of our common stock. As of June 30, 2022, the maximum dollar value of shares available for repurchase under the plan is approximately $126.0 million. No shares were repurchased under the plan during the six months ended June 30, 2022, however, we may conduct opportunistic share repurchases under this authorization in future periods, subject to market conditions utilizing cash on hand or borrowings under our Credit Facility.

Our total current assets increased to ~~$675.7~~$661.5 million as of ~~March 31,~~June 30, 2022 from $636.0 million as of December 31, 2021, an increase of ~~$39.7~~$25.5 million or ~~6.2%~~4.0%, due primarily to an increase in inventories of ~~$54.2~~$72.4 million, an increase in trade receivables and contract assets of $18.4 million and the recording of $15.4 million assets at our Tacoma site as held for sale partially offset by a decrease in cash, ~~and~~ cash equivalents and restricted cash of ~~$22.7~~$83.8 million during the first ~~three~~six months of 2022.

Our management has established and maintains disclosure controls and procedures that are designed to ensure that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of ~~March 31,~~June 30, 2022, the Company's disclosure controls and procedures were effective.

From time to time we are involved in legal actions arising in the ordinary course of our business. Other than as set forth in Note 8.9. Commitments and Contingencies, to the unaudited consolidated financial statements and Part I, "Item 3. Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, 2021, we currently have no pending or threatened litigation that our management believes will result in an outcome that would materially affect our business, financial position, cash flows or results of operations. Nevertheless, there can be no assurance that future litigation to which we become a party will not have a material adverse effect on our business, financial position, cash flows or results of operations.

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Rep ort on Form 10-Q for the three months ended March 31, 2022 and in this Quarterly Report on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect our business, financial condition or operating results.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ASTE	The Nasdaq Stock Market LLC


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐


		Page
PART I
Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2933
Item 4.	Controls and Procedures	2933

PART II
Item 1.	Legal Proceedings	2933
Item 1A.	Risk Factors	2933
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3034
Item 3.	Defaults Upon Senior Securities	3034
Item 4.	Mine Safety Disclosures	3034
Item 5.	Other Information	3034
Item 6.	Exhibits	3034
SIGNATURES		3135


	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
(in millions)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Net sales	$	267.0	$	(0.1)	$	266.9	$	829.4	$	(0.5)	$	828.9
Cost of sales	204.7		0.3		205.0		631.6		1.1		632.7
Gross profit	62.3		(0.4)		61.9		197.8		(1.6)		196.2
Income from operations	6.7		(0.4)		6.3		27.7		(1.6)		26.1
Income from operations before income taxes	6.5		(0.4)		6.1		27.4		(1.6)		25.8
Income tax provision	(2.8)		(0.1)		(2.9)		0.4		(0.4)		—
Net income	9.3		(0.3)		9.0		27.0		(1.2)		25.8
Net income attributable to controlling interest	9.3		(0.3)		9.0		27.0		(1.2)		25.8
Per share data:
Earnings per common share - Basic	0.41		0.01		0.40		1.19		0.05		1.14
Earnings per common share - Diluted	0.41		0.02		0.39		1.18		0.05		1.13


	Year Ended December 31, 2021						Year Ended December 31, 2020
(in millions)	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Net sales	$	1,097.2	$	(1.7)	$	1,095.5	$	1,024.4	$	—	$	1,024.4
Cost of sales	845.5		1.0		846.5		784.3		1.2		785.5
Gross profit	251.7		(2.7)		249.0		240.1		(1.2)		238.9
Income from operations	22.1		(2.7)		19.4		43.0		(1.2)		41.8
Income from operations before income taxes	16.5		(2.7)		13.8		45.7		(1.2)		44.5
Income tax provision	(1.4)		(0.7)		(2.1)		(1.2)		(0.3)		(1.5)
Net income	17.9		(2.0)		15.9		46.9		(0.9)		46.0
Net income attributable to controlling interest	17.8		(2.0)		15.8		46.9		(0.9)		46.0
Per share data:
Earnings per common share - Basic	0.78		0.08		0.70		2.08		0.04		2.04
Earnings per common share - Diluted	0.78		0.09		0.69		2.05		0.04		2.01


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2022		2021		2022		2021
Infrastructure Solutions	$	2.1	$	—	$	2.1	$	—
Corporate	0.9		—		0.9		—
Materials Solutions	—		0.2		—		0.2
Total impairment charges	$	3.0	$	0.2	$	3.0	$	0.2


			ASTEC INDUSTRIES, INC. (Registrant)


Date: ~~May 5,~~August 3, 2022			/s/ Rebecca A. Weyenberg
			Rebecca A. Weyenberg Chief Financial Officer (Principal Financial Officer)


Date: ~~May 5,~~August 3, 2022			/s/ Jamie E. Palm
			Jamie E. Palm Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)