UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 001-11595

Astec Industries, Inc.

(Exact name of registrant as specified in its charter)

Tennessee

62-0873631

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1725 Shepherd Road

Chattanooga, TN

37421

(Address of principal executive offices)

(Zip Code)

(423) 899-5898

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting ~~company"~~company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 27, 2023,~~April 26, 2024, there were ~~22,739,296~~22,765,328 shares of Common Stock outstanding.

ASTEC INDUSTRIES, INC.

Index to Quarterly Report on Form 10-Q

For the Quarter Ended ~~September 30, 2023~~March 31, 2024

INDEX

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

ASTEC INDUSTRIES, INC.

Consolidated Balance Sheets

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


		September 30, 2023		December 31, 2022
	March 31, 2024						March 31, 2024	December 31, 2023
ASSETS	ASSETS
Current assets:	Current assets:
Current assets:
Current assets:
Cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash	Cash, cash equivalents and restricted cash	$	73.8	$	66.0
Investments	Investments	5.7		3.9
Trade receivables and contract assets, net of allowance for credit losses of $2.5 and $2.3, respectively		174.7		167.1
Other receivables, net of allowance for credit losses of $0.7, respectively		3.4		6.5
Trade receivables, contract assets and other receivables, net of allowance for credit losses of $3.8 and $4.0, respectively
Inventories	Inventories	450.1		393.4
Prepaid and refundable income taxes	Prepaid and refundable income taxes	17.3		15.9
Prepaid expenses and other assets	Prepaid expenses and other assets	21.3		28.2
Assets held for sale		—		15.4

Total current assets	Total current assets	746.3		696.4
Property and equipment, net of accumulated depreciation of $243.2 and $233.8, respectively		181.0		173.6
Total current assets
Total current assets
Property and equipment, net of accumulated depreciation of $250.7 and $248.1, respectively
Investments	Investments	14.3		15.1
Goodwill	Goodwill	45.3		45.2
Intangible assets, net of accumulated amortization of $49.3 and $45.1, respectively		17.5		22.5
Intangible assets, net of accumulated amortization of $52.3 and $51.3, respectively
Deferred income tax assets	Deferred income tax assets	34.2		32.1
Other long-term assets	Other long-term assets	35.8		29.5
Total assets	Total assets	$	1,074.4	$	1,014.4
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Current maturities of long-term debt
Current maturities of long-term debt
Current maturities of long-term debt	Current maturities of long-term debt	$	0.1	$	0.2
Short-term debt	Short-term debt	6.9		9.4
Accounts payable	Accounts payable	114.3		107.2
Customer deposits	Customer deposits	60.6		69.5
Accrued product warranty	Accrued product warranty	16.7		11.9
Accrued employee related liabilities	Accrued employee related liabilities	44.4		35.3
Accrued loss reserves	Accrued loss reserves	2.9		1.9
Other current liabilities	Other current liabilities	36.3		38.6
Total current liabilities	Total current liabilities	282.2		274.0
Long-term debt	Long-term debt	122.0		78.1
Deferred income tax liabilities	Deferred income tax liabilities	2.4		2.1
Other long-term liabilities	Other long-term liabilities	33.0		33.3
Total liabilities	Total liabilities	439.6		387.5
Commitments and contingencies (Note 8)
Commitments and contingencies (Note 7)						Commitments and contingencies (Note 7)
Shareholders' equity:	Shareholders' equity:
Preferred stock – authorized 2,000,000 shares of $1.00 par value; none issued	Preferred stock – authorized 2,000,000 shares of $1.00 par value; none issued	—		—
Common stock – authorized 40,000,000 shares of $0.20 par value; issued and outstanding – 22,739,296 as of September 30, 2023 and 22,624,031 as of December 31, 2022		4.5		4.5
Preferred stock – authorized 2,000,000 shares of $1.00 par value; none issued
Preferred stock – authorized 2,000,000 shares of $1.00 par value; none issued
Common stock – authorized 40,000,000 shares of $0.20 par value; issued and outstanding – 22,764,963 as of March 31, 2024 and 22,740,635 as of December 31, 2023
Additional paid-in capital	Additional paid-in capital	137.7		135.8
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(44.2)		(40.1)
Company stock held by deferred compensation programs, at cost	Company stock held by deferred compensation programs, at cost	(1.0)		(1.1)
Retained earnings	Retained earnings	537.5		527.8
Shareholders' equity	Shareholders' equity	634.5		626.9
Noncontrolling interest	Noncontrolling interest	0.3		—
Total equity	Total equity	634.8		626.9
Total liabilities and equity	Total liabilities and equity	$	1,074.4	$	1,014.4

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

INDEX

ASTEC INDUSTRIES, INC.

Consolidated Statements of Operations

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


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Net sales
Net sales
Net sales	Net sales	$	303.1	$	315.2	$	1,001.0	$	924.6
Cost of sales	Cost of sales	233.5		249.7		759.3		731.5
Cost of sales
Cost of sales
Gross profit
Gross profit
Gross profit	Gross profit	69.6		65.5		241.7		193.1
Selling, general and administrative expenses	Selling, general and administrative expenses	74.3		63.5		206.7		184.4
Restructuring, impairment and other asset charges, net		0.5		0.1		5.3		4.5
(Loss) income from operations		(5.2)		1.9		29.7		4.2
Selling, general and administrative expenses
Selling, general and administrative expenses
Restructuring and other asset (gains) charges, net
Restructuring and other asset (gains) charges, net
Restructuring and other asset (gains) charges, net
Income from operations
Income from operations
Income from operations
Other expenses, net:
Other expenses, net:
Other expenses, net:	Other expenses, net:
Interest expense	Interest expense	(2.4)		(0.6)		(6.4)		(1.6)
Interest expense
Interest expense
Interest income	Interest income	0.5		0.3		1.5		0.7
Other (expenses) income, net		—		(0.4)		0.5		(1.8)
(Loss) income before income taxes		(7.1)		1.2		25.3		1.5
Income tax (benefit) provision		(0.6)		0.7		6.5		0.8
Net (loss) income		(6.5)		0.5		18.8		0.7
Net (income) loss attributable to noncontrolling interest		(0.1)		0.2		(0.2)		0.2
Net (loss) income attributable to controlling interest		$	(6.6)	$	0.7	$	18.6	$	0.9
Interest income
Interest income
Other income, net
Other income, net
Other income, net
Income before income taxes
Income before income taxes
Income before income taxes
Income tax provision
Income tax provision
Income tax provision
Net income
Net income
Net income
Net loss attributable to noncontrolling interest
Net loss attributable to noncontrolling interest
Net loss attributable to noncontrolling interest
Net income attributable to controlling interest
Net income attributable to controlling interest
Net income attributable to controlling interest
Per share data:	Per share data:
(Loss) earnings per common share - Basic		$	(0.29)	$	0.03	$	0.82	$	0.04
(Loss) earnings per common share - Diluted		$	(0.29)	$	0.03	$	0.82	$	0.04
Per share data:
Per share data:
Earnings per common share - Basic
Earnings per common share - Basic
Earnings per common share - Basic
Earnings per common share - Diluted
Earnings per common share - Diluted
Earnings per common share - Diluted
Weighted average shares outstanding - Basic
Weighted average shares outstanding - Basic
Weighted average shares outstanding - Basic	Weighted average shares outstanding - Basic	22,746,783		22,837,314		22,709,238		22,824,028
Weighted average shares outstanding - Diluted	Weighted average shares outstanding - Diluted	22,746,783		22,916,316		22,776,158		22,932,206
Weighted average shares outstanding - Diluted
Weighted average shares outstanding - Diluted

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

INDEX

ASTEC INDUSTRIES, INC.

Consolidated Statements of Comprehensive (Loss) Income

(In millions, unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Net (loss) income $ (6.5) $ 0.5 $ 18.8 $ 0.7
Other comprehensive loss:
Foreign currency translation adjustments (4.6) (9.2) (4.0) (13.5)
Other comprehensive loss (4.6) (9.2) (4.0) (13.5)
Comprehensive (loss) income (11.1) (8.7) 14.8 (12.8)
Comprehensive (income) loss attributable to noncontrolling interest (0.1) 0.2 (0.3) 0.1
Comprehensive (loss) income attributable to controlling interest $ (11.2) $ (8.5) $ 14.5 $ (12.7)


	Three Months Ended March 31,
	2024		2023
Net income	$	3.3	$	12.1
Other comprehensive (loss) income:


Foreign currency translation adjustments	(4.4)		0.1
Other comprehensive (loss) income	(4.4)		0.1
Comprehensive (loss) income	(1.1)		12.2
Comprehensive loss (income) attributable to noncontrolling interest	0.1		(0.1)
Comprehensive (loss) income attributable to controlling interest	$	(1.0)	$	12.1

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

INDEX

ASTEC INDUSTRIES, INC.

Consolidated Statements of Cash Flows

(In millions, unaudited)


		Nine Months Ended September 30,
		2023		2022
	Three Months Ended March 31,						Three Months Ended March 31,
	2024					2024		2023
Cash flows from operating activities:	Cash flows from operating activities:
Net income
Net income
Net income	Net income	$	18.8	$	0.7
Adjustments to reconcile net income to net cash used in operating activities:	Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	19.6		20.9
Depreciation and amortization
Depreciation and amortization
Provision for credit losses	Provision for credit losses	0.6		0.9
Provision for warranties	Provision for warranties	14.4		9.3
Deferred compensation expense (benefit)		0.2		(1.1)
Deferred compensation expense
Share-based compensation	Share-based compensation	3.5		5.4
Deferred tax benefit	Deferred tax benefit	(2.1)		(12.6)
Gain on disposition of property and equipment, net	Gain on disposition of property and equipment, net	(3.1)		(0.4)

Asset impairment charges		0.8		3.4
Amortization of debt issuance costs
Amortization of debt issuance costs
Amortization of debt issuance costs	Amortization of debt issuance costs	0.2		—
Distributions to deferred compensation programs' participants	Distributions to deferred compensation programs' participants	(1.5)		(0.9)
Change in operating assets and liabilities:	Change in operating assets and liabilities:
Purchase of trading securities, net
Purchase of trading securities, net
Purchase of trading securities, net	Purchase of trading securities, net	(1.4)		(0.7)
Receivables and other contract assets	Receivables and other contract assets	(5.8)		(25.0)
Inventories	Inventories	(59.7)		(98.9)
Prepaid expenses	Prepaid expenses	8.3		0.9
Other assets	Other assets	(9.6)		(10.3)
Accounts payable	Accounts payable	7.1		25.3

Accrued loss reserves	Accrued loss reserves	1.2		0.3
Accrued loss reserves
Accrued loss reserves
Accrued employee related liabilities	Accrued employee related liabilities	9.3		10.0
Other accrued liabilities	Other accrued liabilities	(0.8)		1.7
Accrued product warranty	Accrued product warranty	(9.6)		(8.6)
Customer deposits	Customer deposits	(8.2)		21.1
Income taxes payable/prepaid	Income taxes payable/prepaid	(1.0)		1.8

Net cash used in operating activities	Net cash used in operating activities	(18.8)		(56.8)
Cash flows from investing activities:	Cash flows from investing activities:
Acquisitions, net of cash acquired		—		(17.8)

Expenditures for property and equipment

Expenditures for property and equipment

Expenditures for property and equipment	Expenditures for property and equipment	(25.0)		(27.6)
Proceeds from sale of property and equipment	Proceeds from sale of property and equipment	20.2		0.7
Purchase of investments	Purchase of investments	(0.8)		(0.8)
Sale of investments		1.7		0.5
Net cash used in investing activities		(3.9)		(45.0)

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

(Continued)

INDEX

ASTEC INDUSTRIES, INC.

Consolidated Statements of Cash Flows (Continued)

(In millions, unaudited)


		Nine Months Ended September 30,
		2023		2022
	Three Months Ended March 31,						Three Months Ended March 31,
	2024					2024		2023
Cash flows from financing activities:	Cash flows from financing activities:
Payment of dividends
Payment of dividends
Payment of dividends	Payment of dividends	(8.9)		(8.3)
Proceeds from borrowings on credit facilities and bank loans	Proceeds from borrowings on credit facilities and bank loans	221.4		50.1
Repayments of borrowings on credit facilities and bank loans	Repayments of borrowings on credit facilities and bank loans	(180.2)		(42.5)

Sale of Company stock by deferred compensation programs, net		0.1		0.2
Withholding tax paid upon vesting of share-based compensation awards	Withholding tax paid upon vesting of share-based compensation awards	(1.6)		(1.8)
Repurchase of Company stock		—		(6.1)
Withholding tax paid upon vesting of share-based compensation awards
Withholding tax paid upon vesting of share-based compensation awards

Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	30.8		(8.4)
Effect of exchange rates on cash	Effect of exchange rates on cash	(0.3)		(3.4)
Increase (decrease) in cash, cash equivalents and restricted cash		7.8		(113.6)
Decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	66.0		134.4
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	73.8	$	20.8

Supplemental cash flow information:	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:
Cash paid during the year for:
Interest, net of capitalized interest
Interest, net of capitalized interest
Interest, net of capitalized interest	Interest, net of capitalized interest	$	5.0	$	0.7
Income taxes paid	Income taxes paid	$	10.3	$	12.3

Supplemental disclosures of non-cash items:	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:
Non-cash investing activities:
Capital expenditures in accounts payable
Capital expenditures in accounts payable
Capital expenditures in accounts payable	Capital expenditures in accounts payable	$	0.4	$	1.2

Non-cash financing activities:	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
Additions to right-of-use assets and lease liabilities	Additions to right-of-use assets and lease liabilities	$	0.6	$	2.8

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

INDEX

ASTEC INDUSTRIES, INC.

Consolidated Statements of Equity

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

Common Stock Common Stock Amount Additional Paid-in-Capital Accumulated Other Comprehensive Loss Company Shares Held by DCP Retained Earnings Noncontrolling Interest Total Equity
Balance, December 31, 2022 22,624,031 $ 4.5 $ 135.8 $ (40.1) $ (1.1) $ 527.8 $ — $ 626.9
Net income — — — — — 12.1 — 12.1
Other comprehensive income — — — — — — 0.1 0.1
Dividends ($0.13 per share) — — — — — (2.9) — (2.9)
Share-based compensation — — 0.8 — — — — 0.8
Issuance of common stock under incentive plan 66,536 — — — — — — —
Withholding tax paid upon equity award vesting — — (1.4) — — — — (1.4)
Balance, March 31, 2023 22,690,567 $ 4.5 $ 135.2 $ (40.1) $ (1.1) $ 537.0 $ 0.1 $ 635.6
Net income — — — — — 13.1 0.1 13.2
Other comprehensive income — — — 0.5 — — — 0.5
Dividends ($0.13 per share) — — — — — (3.0) — (3.0)
Share-based compensation — — 1.4 — — — — 1.4
Issuance of common stock under incentive plan 46,003 — — — — — — —
Withholding tax paid upon equity award vesting — — (0.2) — — — — (0.2)
Balance, June 30, 2023 22,736,570 $ 4.5 $ 136.4 $ (39.6) $ (1.1) $ 547.1 $ 0.2 $ 647.5
Net (loss) income — — — — — (6.6) 0.1 (6.5)
Other comprehensive loss — — — (4.6) — — — (4.6)
Dividends ($0.13 per share) — — — — — (3.0) — (3.0)
Share-based compensation — — 1.3 — — — — 1.3
Issuance of common stock under incentive plan 2,726 — — — — — — —
Deferred compensation programs' transactions, net — — — — 0.1 — — 0.1
Balance, September 30, 2023 22,739,296 $ 4.5 $ 137.7 $ (44.2) $ (1.0) $ 537.5 $ 0.3 $ 634.8

~~(Continued)~~


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










































Balance, December 31, 2023	22,740,635	$	4.5	$	138.4	$	(38.1)	$	(0.8)	$	549.4	$	0.3	$	653.7
Net income (loss)	—	—		—		—		—		3.4		(0.1)		3.3
Other comprehensive loss	—	—		—		(4.4)		—		—		—		(4.4)
Dividends ($0.13 per share)	—	—		0.1		—		—		(3.0)		—		(2.9)
Share-based compensation	—	—		1.2		—		—		—		—		1.2

Issuance of common stock under incentive plan	24,328	—		—		—		—		—		—		—
Withholding tax paid upon equity award vesting	—	—		(0.4)		—		—		—		—		(0.4)






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

~~INDEX~~

~~ASTEC INDUSTRIES, INC.~~

~~Consolidated Statements of Equity (Continued)~~

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

Common Stock Common Stock Amount Additional Paid-in Capital Accumulated Other Comprehensive Loss Company Shares Held by DCP Retained Earnings Noncontrolling Interest Total Equity
Balance, December 31, 2021 22,767,052 $ 4.5 $ 130.6 $ (32.4) $ (1.2) $ 549.3 $ 0.5 $ 651.3
Net income — — — — — 4.1 — 4.1
Other comprehensive income — — — 4.1 — — 0.1 4.2
Dividends ($0.12 per share) — — — — — (2.8) — (2.8)
Share-based compensation — — 1.8 — — — — 1.8
Issuance of common stock under incentive plan 69,995 0.1 — — — — — 0.1
Withholding tax paid upon equity award vesting — — (1.3) — — — — (1.3)
Balance, March 31, 2022 22,837,047 $ 4.6 $ 131.1 $ (28.3) $ (1.2) $ 550.6 $ 0.6 $ 657.4
Net loss — — — — — (3.9) — (3.9)
Other comprehensive loss — — — (8.5) — — — (8.5)
Dividends ($0.12 per share) — — 0.1 — — (2.7) — (2.6)
Share-based compensation — — 1.6 — — — — 1.6
Issuance of common stock under incentive plan 27,482 — — — — — — —
Withholding tax paid upon equity award vesting — — (0.3) — — — — (0.3)
Deferred compensation programs' transactions, net — — 0.1 — 0.1 — — 0.2
Balance, June 30, 2022 22,864,529 $ 4.6 $ 132.6 $ (36.8) $ (1.1) $ 544.0 $ 0.6 $ 643.9
Net income (loss) — — — — — 0.7 (0.2) 0.5
Other comprehensive loss — — — (9.2) — — — (9.2)
Dividends ($0.12 per share) — — — — — (2.8) — (2.8)
Share-based compensation — — 2.0 — — — — 2.0
Issuance of common stock under incentive plan 6,343 — — — — — — —
Withholding tax paid upon equity award vesting — — (0.2) — — — — (0.2)
Share repurchases (160,445) $ (0.1) $ — $ — $ — $ (6.0) $ — $ (6.1)
Balance, September 30, 2022 22,710,427 $ 4.5 $ 134.4 $ (46.0) $ (1.1) $ 535.9 $ 0.4 $ 628.1


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










































Balance, December 31, 2022	22,624,031	$	4.5	$	135.8	$	(40.1)	$	(1.1)	$	527.8	$	—	$	626.9
Net income	—	—		—		—		—		12.1		—		12.1
Other comprehensive income	—	—		—		—		—		—		0.1		0.1
Dividends ($0.13 per share)	—	—		—		—		—		(2.9)		—		(2.9)
Share-based compensation	—	—		0.8		—		—		—		—		0.8

Issuance of common stock under incentive plan	66,536	—		—		—		—		—		—		—
Withholding tax paid upon equity award vesting	—	—		(1.4)		—		—		—		—		(1.4)






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

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

INDEX

ASTEC INDUSTRIES, INC.

Notes Toto Unaudited Consolidated Financial Statements

Note 1. Basis of Presentation and Significant Accounting Policies

Description of Business

Astec Industries, Inc. ("Astec" or the "Company") is a Tennessee corporation which was incorporated in 1972. The Company designs, engineers, manufactures, markets and ~~markets~~services equipment and components used primarily in asphalt and concrete road building and related construction activities, as well as other products discussed below. The Company's products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface. The Company's product portfolio includes both asphalt and concrete equipment. The Company also manufactures certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction, demolition, land clearing and ~~demolition~~recycling 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 Company operates in two reportable segments (plus Corporate and Other) - Infrastructure Solutions and Materials Solutions. The Company's two reportable business segments comprise sites based upon the nature of the products or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations.

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

Basis of Presentation

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, ~~2022.~~2023. 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 attributable to noncontrolling interest" in the Consolidated Statements of Operations. The Company executed an agreement in February 2022 with the noncontrolling interest holder ~~which is undergoing a judicial reorganization in Brazil,~~ to acquire their outstanding interest in full for R$10.0M (approximately $2.0 million, subject to the effect of exchange rates). Completion of the transaction is subject to ~~obtaining~~resolution of certain ~~judicial approval in Brazil.~~disputes between the parties.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include ~~excess and obsolete inventory,~~ inventory net realizable value, product warranty obligations, self-insurance loss reserves, capitalization of internal use software, goodwill and other intangible assets impairment and the measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results could differ from those estimates.

In the opinion of management, the consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations and comprehensive (loss) income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the financial position as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 and the cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ and, except as otherwise discussed herein, such adjustments consist only of those of a normal recurring nature. The interim results are not necessarily indicative of results that may be achieved in a full reporting year.

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

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~~Reclassifications and~~ Adjustments

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

•The Company elected to present research and development expenses in "Selling, general and administrative expenses". These amounts were previously included in a separate financial statement caption in the Consolidated Statements of Operations.

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

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

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

During the first quarter of 2023, the Company identified immaterial errors associated with over-accruals of inventory-related expenses in its historical financial statements. The cumulative effect of the errors generated in 2021 and 2022 was corrected during the first quarter of 2023, resulting in a decrease in "Cost of sales" of $1.9 million. Such adjustment was not considered material to the Company's consolidated financial statements for the year ended December 31, 2022 or any of the financial statements for the previously filed annual periods.

Recently ~~Adopted~~Issued Accounting Pronouncements Not Yet Adopted

In ~~October 2021,~~November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2021-08, "Business Combinations~~2023-07, "Segment Reporting (Topic ~~805)~~280): ~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers",~~Improvement to Reportable Segment Disclosures," which requires entities to ~~recognize~~disclose significant segment expenses, other segment items, the title and ~~measure contract assets~~position of the chief operating decision maker ("CODM") and ~~contract liabilities acquired~~information related to how the CODM assesses segment performance and allocates resources, among certain other required disclosures. Additionally, current annual disclosures will be required in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value.interim periods. The new standard is effective, on a ~~prospective~~retrospective basis, for fiscal years beginning after December 15, ~~2022,~~2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company ~~elected to early adopt~~is currently evaluating the impact this ~~guidance on April 1, 2022. The adoption of this new standard did not~~ASU will have ~~a material impact~~ on its financial ~~position, results~~statement disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which requires entities to disclose specific categories in the income tax rate reconciliation and provide additional information for reconciling items that meet a specified quantitative threshold. In addition, the new standard requires disclosure of the amount of income taxes paid disaggregated by federal, state and foreign taxes and by jurisdiction for exceeding a specified quantitative threshold. Additionally, income or loss from continuing operations ~~cash flows or~~before income tax will be required to be disaggregated between domestic and foreign classifications and income tax expense will be required to be disaggregated between federal, state and foreign classifications. The new standard is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact this ASU will have on its financial statement disclosures.

In March 2024, the SEC adopted the final rule under SEC Release No. 33-11275, "The Enhancement and Standardization of Climate-Related Disclosures for Investors," which will require registrants to disclose certain climate-related information in registration statements and annual reports. On April 4, 2024, the SEC voluntarily stayed the effective date of the final rule pending judicial review of petitions challenging it, which have been consolidated for review by the U.S. District Court of Appeals for the 8th Circuit. Notwithstanding any changes as a result of these challenges, the disclosure requirements will apply to the Company's fiscal year beginning January 1, 2025. The Company is currently evaluating the impact this final rule will have on its financial statement disclosures.

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

Note 2. ~~Acquisition~~

~~MINDS Acquisition~~ - The Company entered into a Share Purchase Agreement, dated as of March 22, 2022, by and between MINDS Automation Group, Inc., a leader in plant automation control systems and cloud-based data management in the asphalt industry in Canada. The acquisition was completed on April 1, 2022 at a purchase price of $19.3 million, which was paid in cash. The Company's allocation of the purchase price resulted in the recognition of $9.3 million of goodwill and $9.3 million of intangible assets primarily consisting of customer relationships (9 year life) and developed technology (7 year life). Significant inputs and assumptions used in determining the fair values of these intangible assets include management's forecasts of future revenues, earnings and cash flows, a discount rate based on the median weighted average cost of capital of the Company and select market competitors, and the proportion of intangible assets acquired in relation to tangible assets. Goodwill acquired is attributable to future growth opportunities provided by the acquired intellectual capital and the ability to generate cross-selling synergies. The acquisition provides the Company with a broader line of controls and automation products designed to deliver enhanced productivity through improved equipment performance. Results of operations have been consolidated from the date of acquisition. The goodwill is not deductible for income tax purposes. Proforma financial information is not included since not significant.

Acquisition and integration costs incurred were nominal during the three and nine months ended September 30, 2023 for this acquisition. Acquisition and integration costs incurred were $0.2 million and $1.1 million during the three and nine months ended September 30, 2022, respectively. These costs are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

~~INDEX~~

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


~~(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~~

~~Note 3.~~ Inventories

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

Inventories consist of the following:


(in millions)	(in millions)	September 30, 2023		December 31, 2022		(in millions)	March 31, 2024	December 31, 2023
Raw materials and parts	Raw materials and parts	$	313.1	$	302.9
Work-in-process	Work-in-process	78.0		57.3
Finished goods	Finished goods	57.4		32.1
Used equipment	Used equipment	1.6		1.1
Total	Total	$	450.1	$	393.4

Note 4.3. Fair Value Measurements

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

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

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

~~INDEX~~

Financial assets and liabilities are categorized based ~~upon~~on the level of judgment associated with the inputs used to measure their fair value. The inputs used to measure the fair value are identified in the following hierarchy:


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

As indicated in the tables below, the Company has determined that all of its financial assets and liabilities as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 are Level 1 and Level 2 in the fair value hierarchy as defined above:


		September 30, 2023
	March 31, 2024										March 31, 2024
(in millions)	(in millions)	Level 1		Level 2		Total		(in millions)	Level 1	Level 2		Total
Financial assets:	Financial assets:
Trading equity securities:	Trading equity securities:
Trading equity securities:
Trading equity securities:
Deferred compensation programs' mutual funds
Deferred compensation programs' mutual funds
Deferred compensation programs' mutual funds	Deferred compensation programs' mutual funds	$	4.0	$	—	$	4.0
Preferred stocks	Preferred stocks	0.3		—		0.3
Equity funds	Equity funds	0.6		—		0.6
Trading debt securities:	Trading debt securities:
Corporate bonds	Corporate bonds	4.0		—		4.0
Municipal bonds		—		0.3		0.3
Corporate bonds
Corporate bonds
Agency bonds	Agency bonds	—		2.5		2.5
Floating rate notes		0.2		—		0.2
U.S. government securities	U.S. government securities	1.9		—		1.9
Asset-backed securities	Asset-backed securities	—		4.3		4.3
Exchange traded funds
Mortgage backed securities
Other	Other	1.3		0.6		1.9
Derivative financial instruments		—		0.2		0.2

Total financial assets
Total financial assets
Total financial assets	Total financial assets	$	12.3	$	7.9	$	20.2
Financial liabilities:	Financial liabilities:

Deferred compensation programs' liabilities	Deferred compensation programs' liabilities	$	—	$	5.7	$	5.7

Deferred compensation programs' liabilities

Deferred compensation programs' liabilities
Total financial liabilities	Total financial liabilities	$	—	$	5.7	$	5.7

119

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		December 31, 2022
	December 31, 2023										December 31, 2023
(in millions)	(in millions)	Level 1		Level 2		Total		(in millions)	Level 1	Level 2		Total
Financial assets:	Financial assets:
Trading equity securities:	Trading equity securities:
Trading equity securities:
Trading equity securities:
Deferred compensation programs' mutual funds
Deferred compensation programs' mutual funds
Deferred compensation programs' mutual funds	Deferred compensation programs' mutual funds	$	4.4	$	—	$	4.4
Preferred stocks	Preferred stocks	0.3		—		0.3
Equity funds	Equity funds	0.6		—		0.6
Trading debt securities:	Trading debt securities:
Corporate bonds	Corporate bonds	5.0		—		5.0
Municipal bonds		—		0.3		0.3
Floating rate notes		0.2		—		0.2
Corporate bonds
Corporate bonds
Agency bonds
U.S. government securities	U.S. government securities	0.8		—		0.8
Asset-backed securities	Asset-backed securities	—		5.4		5.4
Exchange traded funds
Mortgage backed securities
Other	Other	1.3		0.7		2.0

Total financial assets	Total financial assets	$	12.6	$	6.4	$	19.0
Total financial assets
Total financial assets
Financial liabilities:	Financial liabilities:

Derivative financial instruments
Derivative financial instruments
Derivative financial instruments
Deferred compensation programs' liabilities	Deferred compensation programs' liabilities	$	—	$	5.7	$	5.7
Total financial liabilities	Total financial liabilities	$	—	$	5.7	$	5.7

Note 5.4. Product Warranty Reserves

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.

Changes in the Company's product warranty liability for the three ~~and nine~~ month periods ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ are as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(in millions)
(in millions)
(in millions)	(in millions)	2023		2022		2023		2022
Reserve balance, beginning of the period	Reserve balance, beginning of the period	$	16.5	$	11.6	$	11.9	$	10.5
Reserve balance, beginning of the period
Reserve balance, beginning of the period
Warranty liabilities accrued
Warranty liabilities accrued
Warranty liabilities accrued	Warranty liabilities accrued	3.8		2.9		14.4		9.3
Warranty liabilities settled	Warranty liabilities settled	(3.6)		(3.4)		(9.6)		(8.6)
Other		—		(0.2)		—		(0.3)
Warranty liabilities settled
Warranty liabilities settled

Reserve balance, end of the period	Reserve balance, end of the period	$	16.7	$	10.9	$	16.7	$	10.9

Reserve balance, end of the period

Reserve balance, end of the period

Note 6.5. Accrued Loss Reserves

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 ~~$7.1~~$6.9 million and ~~$5.8~~$7.2 million as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively, of which ~~$4.2~~$5.0 million and ~~$3.9~~$4.5 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively.

Note 7.6. Income Taxes

For the three months ended ~~September 30, 2023,~~March 31, 2024, the Company recorded an income tax ~~benefit~~expense of ~~$0.6~~$1.4 million, reflecting ~~an 8.5%~~a 29.8% effective tax rate, compared to a ~~$0.7~~$4.4 million income tax expense for the three months ended ~~September 30, 2022,~~March 31, 2023, reflecting a ~~58.3%~~26.7% effective tax rate. The income tax ~~benefit~~expense for ~~the~~ three months ended ~~September 30, 2023 as~~March 31, 2024 was lower compared to ~~the expense for~~ the same period in ~~2022 was~~2023, primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss.

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For the nine months ended September 30, 2023, the Company recorded an income tax provision of $6.5 million, reflecting a 25.7% effective tax rate, compared to $0.8 million expense, reflecting a 53.3% effective tax rate, for the nine months ended September 30, 2022. The income tax expense for the nine months ended September 30, 2023 was higher compared to the same period in 2022, primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net discrete tax benefit related to a research and development credit.

The Company's recorded liability for uncertain tax positions was ~~$12.7~~$13.2 million and ~~$12.0~~$13.0 million as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. The increase is the result of ~~$0.7~~$0.2 million of incremental reserves associated with the ~~2023~~2024 research and development credit. The Company does not anticipate a significant change in unrecognized tax benefits due to the expiration of relevant statutes of limitations and federal, state, and foreign tax audit resolutions over the next twelve months.

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 ~~September 30, 2023,~~March 31, 2024, the Company believes that it is more-likely-than-not that the tax positions it has taken will be sustained upon the resolution of its audits, resulting in no material impact on its consolidated financial position, results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law. The IRA levies a 1% excise tax on net stock repurchases after December 31, 2022 and imposes a 15% corporate alternative minimum tax ("CAMT") for tax years beginning after December 31, 2022. The Company did not repurchase any shares during the three and nine months ended September 30, 2023. CAMT does not impact the Company's results of operations or financial position.

Note 8.7. Commitments and Contingencies

Certain customers have financed purchases of Company products through arrangements with third-party financing institutions. Under these arrangements, the Company is contingently liable for customer debt of $0.9 million and ~~$2.4~~$1.1 million as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. These arrangements expire at various dates running through September 2026. Additionally, the Company is also contingently liable for 1.75% of the unpaid balance, determined as of December 31 of the prior year (or approximately $0.1 million for ~~2023)~~2024), 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 financed equipment if the Company is required to fulfill its contingent liability under these arrangements. The Company has recorded a liability of ~~$0.5 million and $1.0~~$0.6 million related to these guarantees, which were included in "Other current liabilities" in the Consolidated Balance Sheets as of ~~September 30, 2023~~both March 31, 2024 and December 31, ~~2022, respectively.~~2023.

The Company reviews off-balance sheet guarantees individually and at the loss pool level based on one agreement. Prior history is considered with respect to the Company having to perform on any off-balance sheet guarantees, as well as future projections of individual customer ~~credit worthiness~~creditworthiness with respect to assessing credit losses related to off-balance sheet guarantees.

In addition, the Company is contingently liable under letters of credit issued under its $250.0 million revolving credit facility (the "Credit ~~Facilities"~~Facility"), which outstanding letters of credit totaled ~~$2.4~~$9.8 million as of ~~September 30, 2023.~~March 31, 2024. The outstanding letters of credit expire at various dates through ~~April~~February 2025. Unused letters of credit under the Credit Facility are $20.2 million as of March 31, 2024. ~~As of September 30, 2023, the Company's foreign subsidiaries are~~The Company is additionally contingently liable for a total of ~~$6.1~~$7.6 million in performance letters of credit ~~advance payments~~ and retention guarantees primarily held by its foreign subsidiaries, of which ~~$4.5~~$5.6 million isare secured by separate credit facilities with ~~local~~various financial ~~institutions.~~institutions as of March 31, 2024. As of March 31, 2024, there were $10.7 million of unused letters of credit under such separate credit facilities.

The Company and certain of its former executive officers were named as defendants in a putative shareholder class action lawsuit filed on February 1, 2019, as amended on August 26, 2019, in the United States District Court for the Eastern District of Tennessee. The action is styled City of Taylor General Employees Retirement System v. Astec Industries, Inc., et al., Case No. 1:19-cv-24-CEA-CHS. The complaint generally alleges that the defendants violated the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and that the individual defendants were control persons under Section 20(a) of the Exchange Act. The complaint is filed on behalf of shareholders who purchased stock of the Company between July 26, 2016 and October 22, 2018 and seeks monetary damages on behalf of the purported class. On October 25, 2019, the defendants filed a Motion to Dismiss. On February 19, 2021, the Motion to Dismiss was granted with prejudice and judgment was entered for the defendants. On March 19, 2021, plaintiff filed a Motion to Alter or Amend the Judgment and For Leave to File the Proposed Amended Complaint, which was denied on May 5, 2021. ~~Plaintiff~~The plaintiff appealed the Motion to Dismiss and denial of its Motion to Alter or Amend the Judgment and For Leave to File the Proposed Amended Complaint to the United States Court of Appeals for the Sixth Circuit. On March 31, 2022, the United States Court of Appeals for the Sixth Circuit issued an opinion reversing the dismissal of the Company and one former executive officer, affirming the dismissal of certain other former executive officers and remanding the action to the United States District Court for the Eastern District of Tennessee for proceedings consistent with the opinion. On ~~July 11, 2022 Defendants filed~~March 22, 2024, the parties notified the District Court that they reached an ~~answer~~agreement in principle to resolve this action for $13.7 million. Plaintiff will file a motion seeking entry of an order preliminarily approving the ~~complaint,~~settlement and establishing notice procedures on or before May 6, 2024.The settlement is subject to both preliminary and final approval by the ~~action is now~~District Court. The Company's insurance carriers will fund the entire $13.7 million settlement amount. In connection with the pending settlement, management recorded a liability of $13.7 million in ~~discovery.~~"

~~INDEX~~Other current liabilities" and a corresponding $13.7 million

receivable from the Company's insurance carriers in "Trade receivables, contract assets and other receivables, net" during the first quarter of 2024.

The Company's GEFCO, Inc. ("GEFCO") subsidiary has been named a defendant in a lawsuit originally filed on August 16, 2018, with an amended complaint filed on January 25, 2019, in the United States District Court for the Western District of Oklahoma. The action is styled VenVer S.A. and Americas Coil Tubing LLP v. GEFCO, Inc., Case No. CIV-18-790-SLP. The complaint alleges breaches of warranty and other similar claims regarding equipment sold by GEFCO in 2013. In addition to seeking a

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rescission of the purchase contract, the plaintiff is seeking various relief including special and consequential damages. The original purchase price of the equipment was approximately $8.5 million. On July 7, 2020, the plaintiffs filed a separate lawsuit directly against Astec Industries, Inc. that generally mirrored the allegations in the GEFCO suit. In January 2023, the court allowed Astec Industries, Inc. to be added as a defendant to the GEFCO suit and, as a result, the separate suit against Astec Industries, Inc. was dismissed. The Company and GEFCO each dispute the plaintiffs' allegations and are vigorously defending the ~~GEFCO~~ suit. On March 14, 2024, VenVer filed a motion to set a trial date, which is pending with the court. The Company is unable to determine whether or not a future loss will be incurred due to this litigation or estimate the possible loss or range of loss, if any, at this time.

On October 5, 2023, a jury in the 355th Judicial District Court, Hood County, State of Texas, rendered a verdict against the Company's Telsmith, Inc. subsidiary in the matter styled 37 Building Products, Ltd. ("37 BP") v. Telsmith, Inc. ("Telsmith"), et al. originally filed on January 28, 2019, with additional defendants later added. All other defendants settled prior to trial except Telsmith. ~~Telsmith will receive credit for the settlement amounts of all other defendants against any judgment entered in this case against Telsmith.~~ 37 BP alleged breaches of warranty and negligent misrepresentation regarding equipment manufactured by Telsmith and purchased by 37 BP in 2017 through one of the Company's dealers. On December 19, 2023, a judgment was issued in the amount of $7.9 million (the “Judgment”) which takes into account credit for settlement amounts of all other defendants in this case. Based on the jury verdict, management ~~has determined that~~recorded a ~~loss for this matter is probable in a range between $6.4 million and $18.1 million, inclusive of attorneys' fees and prejudgment interest. A~~ loss contingency of $6.4 million ~~was recorded~~ in "Selling, general and administrative expenses" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2023 representing management's best estimate of the ~~loss. A judgment has not been entered~~loss at that time. During the fourth quarter of 2023, the loss contingency was increased $1.5 million based on the Judgment to a total of $7.9 million for the year ended December 31, 2023. Telsmith filed a Motion for Judgment Notwithstanding the Verdict that the court denied on December 19, 2023. Telsmith filed a Motion for New Trial and Motion for Remittitur on January 18, 2024. The court denied Telsmith's motion for a new trial on February 9, 2024. On March 13, 2024, Telsmith filed a notice of appeal with the Texas Court of Appeals to appeal the Judgment by the ~~trial court, however, a judgment is anticipated~~district court. As of March 31, 2024, $8.1 million was the total loss contingency recorded inclusive of post-judgment interest which will continue to be ~~entered by~~incurred until the ~~end of 2023 or during the first quarter of 2024. The judgment, once entered, may result in~~appeals process reaches a change to the estimate of loss recorded and will incur post-judgment interest charges. The Company will evaluate the judgment once entered, including whether to appeal any judgment entered by the court.resolution.

In addition to the matters noted above, the Company is currently a party, and may become a party, to various other claims and legal proceedings in the ordinary course of business. If management believes that a loss arising from any claims and legal proceedings is probable and can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal fees) or, when the loss is estimated using a range and no point within the range is more probable than another, the minimum estimated liability. 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.

1412

INDEX

Note 9.8. Revenue Recognition

The following tables disaggregate the Company's revenue by major source for the ~~three and nine month~~three-month periods ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ (excluding intercompany sales):


		Three Months Ended September 30, 2023								Three Months Ended September 30, 2022
	Three Months Ended March 31, 2024																					Three Months Ended March 31, 2024				Three Months Ended March 31, 2023
(in millions)	(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		(in millions)	Infrastructure Solutions	Materials Solutions	Corporate and Other		Total	Infrastructure Solutions	Materials Solutions		Corporate and Other	Total
Net Sales-Domestic:	Net Sales-Domestic:
Equipment sales	Equipment sales	$	94.4	$	54.7	$	0.5	$	149.6	$	105.9	$	60.6	$	0.8	$	167.3
Equipment sales
Equipment sales

Parts and component sales
Parts and component sales
Parts and component sales	Parts and component sales	50.3		20.5		0.1		70.9		46.3		21.8		0.1		68.2
Service and equipment installation revenue	Service and equipment installation revenue	3.6		0.2		—		3.8		5.2		0.3		—		5.5
Used equipment sales	Used equipment sales	—		—		—		—		3.2		—		—		3.2
Freight revenue	Freight revenue	5.2		1.9		—		7.1		5.3		2.1		—		7.4
Other	Other	0.3		(2.4)		0.3		(1.8)		0.2		(2.5)		0.1		(2.2)
Total domestic revenue	Total domestic revenue	153.8		74.9		0.9		229.6		166.1		82.3		1.0		249.4

Net Sales-International:	Net Sales-International:
Net Sales-International:
Net Sales-International:
Equipment sales
Equipment sales
Equipment sales	Equipment sales	26.3		23.1		0.7		50.1		23.8		17.7		0.3		41.8

Parts and component sales
Parts and component sales
Parts and component sales	Parts and component sales	9.2		9.9		—		19.1		10.1		9.6		—		19.7
Service and equipment installation revenue	Service and equipment installation revenue	1.0		1.8		0.1		2.9		1.0		0.9		0.1		2.0
Used equipment sales	Used equipment sales	—		0.4		—		0.4		0.3		1.0		—		1.3
Freight revenue	Freight revenue	0.5		0.4		—		0.9		0.6		0.3		—		0.9
Other	Other	—		—		0.1		0.1		—		—		0.1		0.1
Total international revenue	Total international revenue	37.0		35.6		0.9		73.5		35.8		29.5		0.5		65.8
Total net sales	Total net sales	$	190.8	$	110.5	$	1.8	$	303.1	$	201.9	$	111.8	$	1.5	$	315.2

1513

INDEX

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total
Net Sales-Domestic:
Equipment sales $ 314.6 $ 197.8 $ 2.2 $ 514.6 $ 315.2 $ 162.0 $ 0.9 $ 478.1
Parts and component sales 159.9 64.1 0.2 224.2 146.4 63.7 0.1 210.2
Service and equipment installation revenue 38.0 0.6 0.1 38.7 17.8 0.6 — 18.4
Used equipment sales 2.6 — — 2.6 5.2 — — 5.2
Freight revenue 17.4 6.4 — 23.8 18.1 5.9 — 24.0
Other 0.4 (7.5) 0.5 (6.6) 0.4 (4.1) 0.1 (3.6)
Total domestic revenue 532.9 261.4 3.0 797.3 503.1 228.1 1.1 732.3
Net Sales-International:
Equipment sales 68.3 56.9 3.9 129.1 67.4 50.5 1.1 119.0
Parts and component sales 31.4 30.0 0.1 61.5 33.4 29.4 0.1 62.9
Service and equipment installation revenue 3.3 4.1 0.4 7.8 2.8 2.1 0.3 5.2
Used equipment sales 0.6 1.2 — 1.8 0.5 1.6 — 2.1
Freight revenue 2.3 1.0 — 3.3 1.8 1.0 — 2.8
Other — — 0.2 0.2 — 0.2 0.1 0.3
Total international revenue 105.9 93.2 4.6 203.7 105.9 84.8 1.6 192.3
Total net sales $ 638.8 $ 354.6 $ 7.6 $ 1,001.0 $ 609.0 $ 312.9 $ 2.7 $ 924.6

~~INDEX~~

Sales into major geographic regions were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(in millions)
(in millions)
(in millions)	(in millions)	2023		2022		2023		2022
United States	United States	$	229.6	$	249.4	$	797.3	$	732.3
United States
United States
Canada
Canada
Canada	Canada	13.4		12.9		48.7		49.2
Australia	Australia	20.6		10.8		44.4		31.3
Australia
Australia
Europe
Europe
Europe
Africa	Africa	10.6		10.9		28.6		25.9
Europe		8.0		9.1		24.5		22.4
Africa
Africa
Brazil
Brazil
Brazil	Brazil	8.3		7.7		22.1		18.5
South America (Excluding Brazil)	South America (Excluding Brazil)	5.1		4.5		14.4		17.1
South America (Excluding Brazil)
South America (Excluding Brazil)
Mexico
Mexico
Mexico
Asia	Asia	2.8		1.5		6.5		8.6
Mexico		3.4		4.2		6.2		9.1
Asia
Asia
Central America (Excluding Mexico)
Central America (Excluding Mexico)
Central America (Excluding Mexico)	Central America (Excluding Mexico)	0.5		3.9		3.6		7.5
Other	Other	0.8		0.3		4.7		2.7
Other
Other
Total foreign
Total foreign
Total foreign	Total foreign	73.5		65.8		203.7		192.3
Total net sales	Total net sales	$	303.1	$	315.2	$	1,001.0	$	924.6
Total net sales
Total net sales

As of ~~September 30, 2023,~~March 31, 2024, the Company had contract assets of ~~$3.6~~$3.1 million and contract liabilities, excluding customer deposits, of ~~$6.2~~$4.9 million, including ~~$2.6~~$1.1 million of deferred revenue related to extended warranties. As of December 31, ~~2022,~~2023, the Company had contract assets of ~~$3.8~~$3.7 million and contract liabilities, excluding customer deposits, of ~~$5.5~~$5.6 million, including ~~$2.9~~$0.8 million of deferred revenue related to extended warranties.

Note ~~10.~~9. Segment Information

The Company has two reportable segments, each of which comprise sites based upon the nature of the products or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations. Based on a review of these factors, the Company's Australia and Latin America ("LatAm") sites and Astec Digital have changed reportable segments beginning January 1, 2024. The Australia and LatAm sites were previously reported in the Infrastructure Solutions segment and have moved to the Materials Solutions segment. Astec Digital was previously included in the Corporate and Other category has moved to the Infrastructure Solutions segment.

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by the Company's Chief Executive Officer ~~whom~~("CEO"), who is ~~determined~~considered to be the ~~chief operating decision maker ("CODM"),~~CODM, to evaluate performance and allocate resources to the operating ~~segments is Segment Operating Adjusted EBITDA.~~segments. Segment Operating Adjusted EBITDA, a non-GAAP financial measure, is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance. The Company's presentation of Segment Operating Adjusted EBITDA may not be comparable to similar measures used by other companies and is not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented. Beginning January 1, 2024, the Company's presentation of Segment Operating Adjusted EBITDA has been modified to exclude the net income or loss attributable to the noncontrolling interest and include intersegment profit.

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

A brief description of each segment is as follows:

Infrastructure Solutions – Sites within the Infrastructure Solutions segment design, engineer, manufacture and market a complete line of asphalt plants, concrete plants and their related components and ancillary equipment, including industrial automation controls and telematics platforms, as well as ~~supplying~~supply asphalt road construction equipment, industrial thermal systems and other heavy equipment. The sites based in North America within the Infrastructure Solutions segment are primarily manufacturing operations, while those located outside of North America service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of the Company's manufacturing sites. The primary purchasers of the products produced by this segment are asphalt and concrete producers, highway and heavy equipment contractors, utility contractors, forestry and environmental recycling contractors and domestic and foreign governmental agencies.

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

INDEX

within the Materials Solutions segment are primarily manufacturing operations, with the AME site functioning to market, service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of the Company's manufacturing sites. Additionally, the Materials Solutions segment offers consulting and engineering services to provide complete "turnkey" processing systems. The principal purchasers of aggregate processing equipment include distributors, highway and heavy equipment contractors, sand and gravel producers, demolition, recycle and crushing contractors, open mine operators, quarry operators, port and inland terminal authorities, power stations and foreign and domestic governmental agencies.

~~INDEX~~

Corporate and Other – The Corporate and Other category consists primarily of the parent company ~~the Company's captive insurance company, Astec Insurance,~~ and the ~~controls and automation business,~~captive 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 other sites. ~~The controls and automation business manufactures hardware and software products that are marketed independently and included in certain products of the Company's other segments.~~

The accounting policies of the reportable segments are the same as those described in Note 1, Basis of Presentation and Significant Accounting Policies. Intersegment sales and transfers between foreign subsidiaries are valued at prices comparable to those for unrelated parties.

Segment Information:

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total
Revenues from external customers $ 190.8 $ 110.5 $ 1.8 $ 303.1 $ 201.9 $ 111.8 $ 1.5 $ 315.2
Intersegment sales 4.3 14.0 — 18.3 1.9 14.1 — 16.0
Segment Operating Adjusted EBITDA 16.5 8.3 (14.4) 10.4 17.6 13.1 (14.2) 16.5
Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
(in millions) Infrastructure Solutions Materials Solutions Corporate and Other Total Infrastructure Solutions Materials Solutions Corporate and Other Total
Revenues from external customers $ 638.8 $ 354.6 $ 7.6 $ 1,001.0 $ 609.0 $ 312.9 $ 2.7 $ 924.6
Intersegment sales 8.2 40.9 0.6 49.7 7.0 35.8 — 42.8
Segment Operating Adjusted EBITDA 70.5 41.9 (33.5) 78.9 49.9 34.8 (36.3) 48.4
,


	Three Months Ended March 31, 2024								Three Months Ended March 31, 2023
(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Revenues from external customers	$	202.2	$	107.0	$	—	$	309.2	$	215.5	$	132.2	$	0.2	$	347.9
Intersegment sales	6.8		0.5		—		7.3		6.6		0.4		—		7.0
Segment Operating Adjusted EBITDA	25.6		5.3		(12.0)		18.9		28.5		14.6		(7.9)		35.2

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

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Net (loss) income attributable to controlling interest
Segment Operating Adjusted EBITDA $ 10.4 $ 16.5 $ 78.9 $ 48.4
Adjustments:
Transformation program (7.7) (7.0) (22.5) (18.7)
Restructuring and other related charges (0.1) (0.1) (7.6) (1.5)
Asset impairment — (0.4) (0.8) (3.4)
(Loss) gain on sale of property and equipment, net (0.4) 0.4 3.1 0.4
Transaction costs — (0.5) — (1.9)
Interest expense, net (1.9) (0.3) (4.9) (0.9)
Depreciation and amortization (7.1) (7.3) (19.6) (20.9)
Income tax benefit (provision) 0.6 (0.7) (6.5) (0.8)
Net (income) loss attributable to noncontrolling interest (0.1) 0.2 (0.2) 0.2
Elimination of intercompany profit (0.3) (0.1) (1.3) —
Net (loss) income attributable to controlling interest $ (6.6) $ 0.7 $ 18.6 $ 0.9


	Three Months Ended March 31,
(in millions)	2024		2023

Segment Operating Adjusted EBITDA	$	18.9	$	35.2
Adjustments:
Transformation program	(6.3)		(7.2)

Restructuring and other related charges	(0.1)		(7.1)

Gain on sale of property and equipment, net	0.9		3.4

Interest expense, net	(2.1)		(1.5)
Depreciation and amortization	(6.5)		(6.3)
Income tax provision	(1.4)		(4.4)
Net income attributable to controlling interest	$	3.4	$	12.1

~~INDEX~~

Note ~~11.~~10. Strategic Transformation, ~~and~~ Restructuring ~~Impairment~~ and Other Asset Gains and Charges ~~net~~

The Company's strategic transformation program includes two ongoing initiatives. The Company is undergoing a multi-year phased implementation of a standardized enterprise resource planning ("ERP") ~~system~~ across the global organization, which will replace much of the existing disparate core financial systems. The upgraded ERP will initially convert internal operations, manufacturing, finance, human capital resources management and customer relationship systems to cloud-based platforms. ~~This new ERP system will provide for standardized processes and integrated technology solutions that enable the Company to better leverage automation and process efficiency.~~ An implementation of this scale is a major financial undertaking and requires substantial time and attention of management and key employees.

In addition, ~~beginning in the first quarter of 2022,~~ a lean manufacturing initiative at one of the Company's largest sites was ~~initiated and is expected~~largely completed during 2023. Certain capital investments related to ~~drive improvement in gross margin at that site. Gross margin improvements~~this initiative are ~~expected to be realized in conjunction with the project completion~~continuing in early ~~to mid-2024. This improvement is intended to serve as the optimal blueprint for the Company's other manufacturing facilities.~~2024.

Total costs of ~~$7.8 million and $22.8~~$6.5 million were incurred related to these strategic transformation initiatives in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, of which ~~$7.7~~$6.4 million and ~~$22.6~~$0.1 million ~~respectively,~~ are recorded in "Selling, general and administrative expenses" and ~~$0.1 million and $0.2 million, respectively, are included in~~ "Cost of ~~sales"~~sales," respectively, in the Consolidated Statements of Operations. Costs totaling ~~$7.0 million and $18.7~~$7.2 million were incurred in the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023 and are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations. Capitalized implementation costs associated with the ERP implementation totaled $34.5 million, of which $3.9 million and $30.6 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of March 31, 2024. Capitalized implementation costs totaled $30.6 million, of which $3.3 million

INDEX

and $27.3 million were included in "Prepaid expenses and other assets" and "Other long-term assets," respectively, in the Consolidated Balance Sheets as of December 31, 2023. Amortization of these capitalized implementation costs totaled $0.7 million and $0.1 million during the three months ended March 31, 2024 and 2023, respectively, which is included in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

~~The~~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 ~~the Company~~ may incur gains or losses on these disposals. ~~Certain of the costs associated with these decisions are separately identified as restructuring.~~ The Company reports asset impairment charges and gains or losses on the sales of property and equipment collectively, with restructuring charges in "Restructuring ~~impairment~~ and other asset (gains) charges, net" in the Consolidated Statements of Operations to the extent they are experienced.

~~INDEX~~

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

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Restructuring charges:
Costs associated with leadership change and overhead restructuring $ — $ — $ 7.3 $ —
Costs associated with exited operations - Enid 0.1 0.1 0.3 0.7
Costs associated with closing Tacoma — — — 0.8
Total restructuring related charges 0.1 0.1 7.6 1.5
Asset impairment charges:
Other impairment charges — 0.4 0.8 3.4
Total asset impairment charges — 0.4 0.8 3.4
Loss (gain) on sale of property and equipment, net
Loss (gain) on sale of property and equipment, net 0.4 (0.4) (3.1) (0.4)
Total loss (gain) on sale of property and equipment, net 0.4 (0.4) (3.1) (0.4)
Restructuring, impairment and other asset charges, net $ 0.5 $ 0.1 $ 5.3 $ 4.5


	Three Months Ended March 31,
(in millions)	2024		2023
Restructuring charges:
Costs associated with leadership change and overhead restructuring	$	—	$	7.0
Costs associated with exited operations - Enid	0.1		0.1






Total restructuring related charges	0.1		7.1







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

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

Restructuring charges by segment are as follows:

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2023 2022 2023 2022
Infrastructure Solutions $ 0.1 $ 0.1 $ 0.4 $ 1.5
Corporate and Other — — 7.2 —
Total restructuring related charges $ 0.1 $ 0.1 $ 7.6 $ 1.5

~~Impairment charges by segment are as follows:~~


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(in millions)	(in millions)	2023		2022		2023		2022
(in millions)
(in millions)
Infrastructure Solutions
Infrastructure Solutions
Infrastructure Solutions	Infrastructure Solutions	$	—	$	0.4	$	—	$	2.5

Corporate and Other	Corporate and Other	—		—		0.8		0.9
Total impairment charges		$	—	$	0.4	$	0.8	$	3.4

Corporate and Other

Corporate and Other
Total restructuring related charges
Total restructuring related charges
Total restructuring related charges

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


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(in millions)
(in millions)
(in millions)	(in millions)	2023		2022		2023		2022
Infrastructure Solutions	Infrastructure Solutions	$	0.4	$	(0.4)	$	(3.0)	$	(0.4)
Infrastructure Solutions
Infrastructure Solutions
Materials Solutions
Materials Solutions
Materials Solutions

Corporate and Other		—		—		(0.1)		—
Total loss (gain) on sale of property and equipment, net		$	0.4	$	(0.4)	$	(3.1)	$	(0.4)
Total gain on sale of property and equipment, net

Total gain on sale of property and equipment, net

Total gain on sale of property and equipment, net

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

~~INDEX~~

In January 2021, the Company announced plans to close the Tacoma, Washington 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~~segment. The sale of 2022. In conjunction with this action, the Company recorded $0.8 million of restructuring related charges during the three months ended March 31, 2022 in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations. The Company recorded the Tacoma facility's land, building and certain equipment ~~assets of $15.4 million as held for sale in its Consolidated Balance Sheets as of December 31, 2022. The sale of these~~ assets was completed in the first quarter of 2023 for $19.9 million. The Company recorded a gain on the sale of $3.4 million, which was recorded in "Restructuring ~~impairment~~ and other asset (gains) charges, net" in the Consolidated Statements of Operations.

Additional restructuring costs of $0.1 million and $0.3 million were incurred during the three and nine months ended September 30, 2023, respectively, for the Company's exited oil and gas drilling product lines produced at its former Enid, Oklahoma ("Enid") location. Costs of $0.1 million and $0.7 million were incurred during the three and nine months ended September 30, 2022, respectively. An impairment charge of $0.4 million was incurred during the third quarter of 2022 to record certain land and building assets held for sale at fair value less costs to sell.

Effective as of January 6, 2023, Mr. Barry A. Ruffalo's employment as President and ~~Chief Executive Officer~~CEO was terminated. In connection with his separation, the Company entered into an agreement with Mr. Ruffalo (the "Separation Agreement"), pursuant to which Mr. Ruffalo was entitled to certain severance payments and benefits. During the first quarter of 2023, $1.8 million of restructuring costs, related to the modification of Mr. Ruffalo's equity awards and other third-party transition support costs, were recorded in "Restructuring ~~impairment~~ and other asset (gains) charges, net" in the Consolidated Statements of Operations. The related recovery of $1.6 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the first quarter of 2023. The Separation Agreement also included a release and waiver by Mr. Ruffalo and other customary provisions.

INDEX

Management continually reviews the Company's organizational structure and operations to ensure they are optimized and aligned with achieving near-term and long-term operational and profitability targets. In connection with this review, in February 2023, the Company implemented a limited restructuring plan to right-size and reduce the fixed cost structure of certain overhead departments. ~~Total charges~~Charges of ~~$5.5~~$5.2 million for employee termination costs, including equity award modifications, were incurred in the first quarter of 2023 and recorded in "Restructuring ~~impairment~~ and other asset (gains) charges, net" in the Consolidated Statements of ~~Operations, of which $5.2 million and $0.3 million were recorded in the first and second quarters of 2023, respectively.~~Operations. The related recovery of ~~$1.0~~$0.8 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of ~~Operations, of which $0.8 million and $0.2 million were recorded during the first and second quarters of 2023, respectively.~~

During the second quarter of 2022, the Company determined that certain manufacturing equipment contracted to be constructed by a third-party vendor, which had been prepaid, would not be recovered. Impairment charges of $2.1 million were recorded in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations during the nine months ended September 30, 2022. An additional $0.8 million and $0.9 million of impairment charges were incurred related to abandoned in-process internally developed software that was determined to be impaired during the nine months ended September 30, 2023 and 2022, respectively.Operations.

Note ~~12. (Loss)~~11. Earnings Per Common Share

Basic ~~(loss)~~ earnings per common share is determined by dividing "Net ~~(loss)~~ income attributable to controlling interest" by the weighted average number of common shares outstanding during the reporting period. Diluted ~~(loss)~~ earnings per common share includes the dilutive effect of common stock equivalents, consisting of restricted stock units, performance stock units and stock held in the Company's deferred compensation programs, using the treasury stock method. Performance stock units, which are considered contingently issuable, are considered dilutive when the related performance criterion has been met.

~~INDEX~~

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


		Three Months Ended September 30,		Nine Months Ended September 30,
		2023	2022	2023	2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Denominator:
Denominator:
Denominator:	Denominator:
Denominator for basic earnings per common share	Denominator for basic earnings per common share	22,746,783	22,837,314	22,709,238	22,824,028
Denominator for basic earnings per common share
Denominator for basic earnings per common share
Effect of dilutive securities	Effect of dilutive securities	—	79,002	66,920	108,178
Effect of dilutive securities
Effect of dilutive securities
Denominator for diluted earnings per common share
Denominator for diluted earnings per common share
Denominator for diluted earnings per common share	Denominator for diluted earnings per common share	22,746,783	22,916,316	22,776,158	22,932,206

Antidilutive securities excluded from the calculation of diluted earnings per share	Antidilutive securities excluded from the calculation of diluted earnings per share	67,408	124,229	9,345	32,218

Antidilutive securities excluded from the calculation of diluted earnings per share

Antidilutive securities excluded from the calculation of diluted earnings per share

2217

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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, ~~2022.~~2023. 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.

Forward-Looking Statements

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," "forecast," "management is of the opinion," or 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~~"Part I, Item 1A. Risk ~~Factors~~Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, 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.

~~Overview~~

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.

See Note 10, 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 further discussion of our reportable segments.

~~INDEX~~

Executive Summary

Highlights of our financial results for the three months ended ~~September 30, 2023~~March 31, 2024 as compared to the same period of the prior year include the following:

•Net sales were ~~$303.1~~$309.2 million, a decrease of ~~3.8%~~11.1%

•Gross profit was ~~$69.6~~$76.9 million, ~~an increase~~a decrease of ~~6.3%~~13.8%

•Income from operations decreased ~~373.7%~~$11.3 million to ~~a loss of $5.2~~$6.3 million

•Net income attributable to Astec decreased ~~$7.3~~$8.7 million to ~~a loss of $6.6~~$3.4 million

•Diluted ~~loss~~earnings per share ~~was $0.29,~~were $0.15, a decrease of ~~$0.32~~71.7%

•Backlog ~~of $614.7~~was $559.8 million, a decrease of ~~36.6% as compared to September 30, 2022~~30.0%

~~Significant Items Impacting Operations in 2023~~Business Conditions and Trends

Strategic Transformation – We are undergoing a multi-year phased implementation of a standardized ERP system across our global organization, which will replace much of our existing disparate core financial systems. ~~The upgraded ERP will initially convert our internal operations,~~In addition to one manufacturing ~~finance, human capital resources management~~site and ~~customer relationship systems~~Corporate, which transitioned to ~~cloud-based platforms. This~~the 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 requires substantial time and attention of management and key employees. We materially completed the ERP global design in ~~2022, launched the human capital resources module in our locations in the United States in January~~ 2023, ~~and~~we converted the operations of ~~one~~two additional manufacturing ~~site along with Corporate~~sites during ~~the second quarter of 2023 to set the foundation before accelerating the implementation at additional sites in 2024 and 2025.~~April 2024. We anticipate incurring total costs associated with the ERP implementation in the range of $125 million to $150 million, with an estimated $25 to $30 million incurred per year, which such incurrence of expenses began in ~~2022.~~2022 and is expected to continue through 2025.

In addition, ~~in the first quarter of 2022,~~we largely completed a lean manufacturing initiative at one of our largest sites ~~was initiated~~during 2023. Certain capital investments related to this initiative are continuing in early 2024, which once completed, and isalong with the other elements of the initiative, are expected to drive improvement in gross margin at that ~~site. We substantially completed~~site in the design efforts for this project during 2022. We also began executing investments to acquire and install manufacturing equipment intended to drive increased efficiencies in our production processes. We plan to continue these capital investments during 2023, which are anticipated to be largely completed by the endsecond half of 2023. Gross margin improvements are expected to be realized in conjunction with the project completion in early to mid-2024. This improvement is intended to serve as the optimal blueprint for our other manufacturing facilities.2024.

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related to these initiatives were incurred and are recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations. Additionally, as of ~~September 30, 2023,~~March 31, 2024, we have capitalized ~~$28.1~~$34.5 million in deferred implementation costs associated with the ERP implementation that are being amortized ratably over the remaining contract term, of which ~~$3.0~~$3.9 million and ~~$25.1~~$30.6 million were included in "Prepaid expenses and other assets" and "Other long-term assets" in the Consolidated Balance Sheets, respectively.

~~Tacoma Site Closure~~– ~~In January 2021, we announced plans to close the Tacoma facility in order to simplify~~ Amortization of these capitalized implementation costs totaled $0.7 million 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$0.1 million during the ~~first quarter of 2022. The Tacoma facility's land, building~~three months ended March 31, 2024 and ~~certain equipment assets of $15.4 million were~~2023, respectively, which is included in "Assets held for sale" in the Consolidated Balance Sheets as of December 31, 2022. The sale of these assets was completed in the first quarter of 2023 for $19.9 million. We recorded a $3.4 million gain for the sale of these assets in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations.

~~Leadership Change and Overhead Restructuring~~– As previously announced on January 6, 2023, Mr. Barry A. Ruffalo's employment as President and Chief Executive Officer was terminated and he was succeeded by Mr. Jaco van der Merwe. In accordance with the terms of Mr. Ruffalo's separation agreement, we recorded $1.8 million of restructuring costs during the first quarter of 2023 related to the modification of Mr. Ruffalo's equity awards as well as third-party transition support costs in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations. The related recovery of $1.6 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.

Segment Changes – Our two reportable segments are comprised of 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, our Australia and LatAm sites and Astec Digital have changed reportable segments beginning January 1, 2024. The Australia and LatAm sites were previously reported in the Infrastructure Solutions segment and have moved to the Materials Solutions segment. Astec Digital was previously included in the Corporate and Other category has moved to the Infrastructure Solutions segment. Prior periods have been revised to reflect the changes for the segment composition for comparability.

Management continually reviews our organizational structure and operations to ensure they are optimized and aligned with achieving our near-term and long-term operational and profitability targets. In connection with this review, in February 2023, we

~~INDEX~~Economic Conditions –

implemented a limited restructuring plan to right-size and reduce the fixed cost structure of certain overhead departments. Total charges of $5.5 million for employee termination costs, including equity award modifications, were recorded in "Restructuring, impairmentWe monitor macroeconomic and other ~~asset charges, net" in the Consolidated Statements of Operations, of which $5.2 million~~factors that may affect our business such as steel and ~~$0.3 million were recorded in the first~~oil prices, interest rates and second quarters of 2023, respectively. The related recovery of $1.0 million of incurred share-based compensation expense was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations, of which $0.8 million and $0.2 million were recorded during the first and second quarters of 2023, respectively.

~~37 BP Litigation~~– On October 5, 2023, a jury rendered a verdict against our Telsmith, Inc. subsidiary in the matter styled 37 Building Products, Ltd. ("37 BP") v. Telsmith, Inc. ("Telsmith"), et al. originally filed on January 28, 2019. 37 BP alleged breaches of warranty and negligent misrepresentation regarding equipment manufactured by Telsmith and purchased by 37 BP in 2017 through one of our dealers. Based on the jury verdict, a loss for this matter has been determined to be probable in a range between $6.4 million and $18.1 million, inclusive of attorneys' fees and prejudgment interest. A loss contingency of $6.4 million was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2023 representing our best estimate of the loss. See Note 8, Commitments and Contingencies of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of this matter.geopolitical conflicts, among others.

~~Industry~~Steel is a major component of our equipment. We anticipate that steel prices will remain at relatively high levels and ~~Business Condition~~that steel demand will remain relatively stable throughout 2024. Whenever possible, we attempt to cover increased costs of production by adjusting the prices of our products. The markets we serve are competitive in nature, and competition limits our ability to pass through cost increases in many cases.

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 similar products produced and sold by a number of other manufacturers and dealers.

Backlog represents the dollar value of orders for equipment and parts which are expected to be recognized in net sales in the future. Orders are contractually binding purchase commitments from customers, which are included in backlog when we are in receipt of an executed contract and any required deposits or security and have not yet been recognized into net sales. Certain orders for which we have received binding letters of intent or contracts will not be included in backlog until all required contractual documents and deposits are received. Backlog is not a measure defined by U.S. GAAP, and our methodology for determining backlog may vary from the methodology used by other companies in determining their backlog amounts. In addition, our backlog should not necessarily be viewed as an accurate indicator of revenue for any particular period and there is no guarantee that our backlog will be converted to net sales.

Backlog levels provide management and investors additional details of committed orders that are expected to convert to future net sales. Management uses backlog information for capacity and resource planning as well as to monitor inventory levels in our facilities relative to expected future net sales.

Our $614.7 million backlog of orders as of September 30, 2023 continues to remain strong. The backlog of orders decreased $354.3 million, or 36.6%, compared to $969.0 million as of September 30, 2022. The decrease in backlog was driven by 2023 sales delivery outpacing new orders compared to a build of backlog throughout 2022, which was largely due to strong customer demand and logistics and manufacturing throughput disruptions. We expect backlog levels to continue to normalize from the historically high levels we have experienced in recent years largely based on supply chain stabilization. Macroeconomic factors such as higher inflation and increased interest rates, among other factors, may also influence future customer spending. Additionally, we are focused on prudent expansion of our production capacity that we anticipate will allow us to more effectively convert backlog to sales in the future with greater efficiency and shorter lead times.

~~Federal funding provides a~~ significant portion of all highway, street, roadway and parking construction in the United States. As federal highway funding programs have consistently been in place for several decades, we believe that these funding programs provide stability in the purchasing decisions of our customers by allowing them to plan and execute longer-term projects with federal legislation in place over a multi-year period. The U.S. government enacted the Infrastructure Investment and Jobs Act ("IIJA") in November 2021 as a replacement for the prior program. 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) have a positive impact on the domestic road construction industry.

~~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 and, to a lesser extent, concrete as surface choices for roads and highways.~~mix. Liquid asphalt is a by-product of oil ~~refining. An increase or decrease~~refining, and changes in the price of oil ~~impacts~~impact the cost of asphalt, which is in turn 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 had declined from the peak prices in 2022, throughout 2023 they have remained at relatively high levels. Price volatility continues to make it difficult to predict the costs of oil-based products used in road construction such as liquid asphalt and gasoline. Oil

~~INDEX~~

~~prices have routinely fluctuated in recent years and are expected to continue to fluctuate in the future.~~ Based on the current macroeconomic environment, including ~~current~~ongoing international conflicts, we anticipate that oil prices will remain at relatively high levels throughout ~~the remainder of 2023 and into~~ 2024.

~~Steel is~~Elevated interest rates influence our customers' spending patterns, most notably impacting our dealer customers in the Materials Solutions segment. Interest rates have, in part, driven the decrease in our order backlog. Additionally, our revolving credit loans bear interest on a major component of our equipment. Driven by supply constraints, steel prices increased throughout the prior year, stabilizing at historically high levels at the end of 2022. Steel prices have softened slightly in 2023variable basis and are ~~expected~~subject to ~~be maintained at these regulated levels through the remainder of 2023 and into 2024. During 2022, we observed a slowing in~~ market demand and reduced lead times as buyers were responding to recessionary pressures and restricted their purchases to near-term needs. Lead times increased during the first quarter of 2023 driven by stronger demand, however, have moderated to a consistent rate as the prior year.volatility. We anticipate ~~that steel demand will remain relatively strong through~~continuing to utilize the balance of 2023 and into 2024, driven by the IIJA domestically and impacted by international production capacity. We continue to employ flexible strategies to ensure supply and minimize the impact of price volatility. Potential ongoing constraintsrevolving credit loans with greater frequency in the ~~supply of certain steel products may continue pressuring~~near term to support our working capital needs. As such, we expect our interest expense in the ~~availability of other components used in our manufacturing process.Furthermore, given the volatility of steel prices and the nature of our customers' orders, we may not be able~~near term to ~~pass through all increases in steel costs to our customers, which negatively impacts our gross profit and margins.~~

We actively manage our global supply chain for any identified constraints and volatility. Supply chain constraints experienced in prior periods have eased recently, however, lead times for certain key supplies remain elongated. We continue to focus on identifying and qualifying alternative suppliers wherever possible, to help alleviate any lagging or potential future challenges in our supply chain. We also continually monitor potential future supply costs and availability in an effort to proactively address challenges that might occur.at elevated levels.

In addition, ~~while~~other factors, including but not limited to industry and competitive environment conditions, overall financial performance, business specific events and market conditions, circumstances or events may affect the fair value of our goodwill reporting units. If these or other factors result in changes that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value, we have continued to experience shortages of necessary production personnel in certain markets, we have seen a slight easing in the tight labor market. However, higher turnover during the pandemic periods of 2020 through 2022 have contributed to lower tenured production staff. Higher labor costs to attract staff in our manufacturing operations are normalizing at elevated levels. We continue to adjust our production schedules and manufacturing workload distribution, provide comprehensive training, 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.will test goodwill for impairment.

~~Whenever possible,~~New or ongoing geopolitical conflicts may cause a downturn in the commercial and residential construction industries in which we ~~attempt to cover increased costs of production by adjusting the~~operate, cause an increase in oil prices, damage a significant portion of our ~~products. Backlog fulfillment times from the initial order to completing the contracted sale vary and can extend past twelve months. For this reason, we have limitations on~~inventory or materially impair our ability to ~~pass on cost increases~~distribute our products to customers. We monitor, adjust and potentially cease our ~~customers on a short-term basis. In addition, the markets we serve are competitive~~operations in ~~nature, and competition limits our ability~~affected jurisdictions to ~~pass through cost increases~~ensure compliance with any governmental actions made in ~~many cases. Through our operational excellence initiatives, we also strive~~response to ~~minimize the effect of inflation through cost reductions and improved manufacturing efficiencies.~~such conflicts.

Results of Operations

Net Sales

Net sales for the ~~third~~first quarter of 2024 were $309.2 million compared to $347.9 million for the first quarter of 2023, ~~were $303.1 million compared to $315.2 million for the third quarter of 2022,~~ a decrease of ~~$12.1~~$38.7 million, or ~~3.8%~~11.1%. The decrease in net sales was primarily driven by net unfavorable ~~changes in the~~ volume ~~pricing~~ and mix ~~of sales~~partially offset by favorable pricing that generated decreases in (i) equipment sales of $9.4 million, (ii) used equipment sales of $4.1 million and (iii) service and equipment installation revenue of $0.8 million. These decreases were partially offset by an increase in parts and component sales of $2.1 million. Sales reported by our foreign subsidiaries in U.S. dollars for the third quarter of 2023 would have been $1.1 million higher had third quarter 2023 foreign exchange rates been the same as third quarter 2022 rates.

Net sales for the first nine months of 2023 were $1,001.0 million compared to $924.6 million for the first nine months of 2022, an increase of $76.4 million, or 8.3%. The increase in net sales was primarily driven by net favorable changes in the volume, pricing and mix of sales that generated increases in (i) equipment sales of $46.6$40.0 million, (ii) service and equipment installation revenue of ~~$22.9~~$7.7 million, (iii) freight revenue of $1.8 million and ~~(iii)~~(iv) used equipment sales of $1.7 million. These decreases were partially offset by increases in parts and component sales ~~of $12.6 million. These increases were partially offset by a decrease in~~and other revenue of ~~$3.1~~$10.7 million ~~which was primarily driven by increased utilization of our interest subsidy programs offered to certain of our dealer customers~~ and ~~used equipment of $2.9 million.~~$1.8 million, respectively. Sales reported by our foreign subsidiaries in U.S. dollars for the first ~~nine months~~quarter of ~~2023~~2024 would have been ~~$7.9~~$0.7 million higher had ~~the first nine months of 2023~~ foreign exchange rates been the same as ~~the first nine months of 2022~~2023 rates.

Domestic sales for the ~~third~~first quarter of ~~2023~~2024 were ~~$229.6~~$243.2 million, or ~~75.8%~~78.7% of consolidated net sales, compared to ~~$249.4~~$281.3 million, or ~~79.1%~~80.9% of consolidated net sales, for the ~~third~~first quarter of ~~2022,~~2023, a decrease of ~~$19.8~~$38.1 million, or ~~7.9%~~13.5%. Domestic sales decreased primarily due to decreases in (i) ~~$17.7 million lower~~ equipment sales ~~(ii) $3.2~~of $38.9 million, ~~lower used equipment sales and (iii) $1.7 million lower~~(ii) service and equipment installation ~~revenue.~~revenue of $8.4 million, (iii) freight revenue of $1.4 million and (iv) used equipment sales $0.9 million. These decreases were partially offset by ~~an increase in~~increased parts and ~~components~~component sales and other revenue of ~~$2.7 million.~~$9.6 million and $1.9 million, respectively.

~~Domestic~~

INDEX

International sales for the first ~~nine months~~quarter of ~~2023~~2024 were ~~$797.3~~$66.0 million, or ~~79.7%~~21.3% of consolidated net sales, compared to ~~$732.3~~$66.6 million, or ~~79.2%~~19.1% of consolidated net sales, for the first ~~nine months~~quarter of ~~2022, an increase~~2023, a decrease of ~~$65.0~~$0.6 million, or ~~8.9%~~0.9%. ~~Domestic~~International sales ~~increased~~decreased primarily due to ~~(i) $36.5 million higher~~decreases in new and used equipment sales ~~(ii) $20.3~~of $1.1 million ~~higher service~~ and ~~equipment~~

~~INDEX~~

~~installation revenue and (iii) $14.0~~$0.8 million, ~~higher parts and component sales.~~respectively. These ~~increases~~decreases were partially offset by ~~a decrease~~increases in ~~other revenue of $3.0 million, which was primarily driven by higher utilization of our interest subsidy programs offered to certain of our dealer customers,~~parts and ~~lower used equipment sales of $2.6 million.~~

International sales for the third quarter of 2023 were $73.5 million, or 24.2% of consolidated net sales, compared to $65.8 million, or 20.9% of consolidated net sales, for the third quarter of 2022, an increase of $7.7 million, or 11.7%. International sales increased primarily due to higher equipment sales of $8.3 millioncomponent sale and service and equipment installation revenue of ~~$0.9 million partially offset by lower used equipment sales of $0.9 million.~~

International sales for the first nine months of 2023 were $203.7 million, or 20.3% of consolidated net sales, compared to $192.3 million, or 20.8% of consolidated net sales, for the first nine months of 2022, an increase of $11.4 million, or 5.9%. International sales increased primarily due to higher (i) equipment sales of $10.1$1.1 million and ~~(ii) service and equipment installation sales of $2.6 million.~~$0.7 million, respectively.

Gross Profit

Gross profit for the ~~third~~first quarter of ~~2023~~2024 was ~~$69.6~~$76.9 million, or ~~23.0%~~24.9% of net sales, as compared to ~~$65.5~~$89.2 million, or 20.8% of net sales, for the third quarter of 2022, an increase of $4.1 million, or 6.3%. The increase was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated $17.2 million higher gross profit. These increases were also partially offset by the impact of inflation on materials, labor and overhead of $10.5 million and manufacturing inefficiencies of $2.6 million due in part to increased warranty program costs.

~~Gross profit for the first nine months of 2023 was $241.7 million, or 24.1% of net sales, as compared to $193.1 million, or 20.9%~~25.6% of net sales, for the first ~~nine months~~quarter of ~~2022, an increase~~2023, a decrease of ~~$48.6~~$12.3 million or ~~25.2%~~13.8%. The ~~increase~~impact of net unfavorable volume and mix was offset by favorable pricing with the decrease in gross profit primarily driven by the net favorable volume, pricing and mix of $90.1 million and $2.3 million of gross profit generated by an acquired business. These increases were partially offset by the impact of inflation on materials, labor and overhead of $35.0 million and(i) manufacturing inefficiencies of ~~$8.8~~$5.2 million, ~~due in part to the effects~~(ii) $4.1 million of ~~lower tenured production staff associated with the turnover experienced in the prior year and increased warranty program costs partially offset by the impact~~higher unfavorable inventory adjustments inclusive of an out-of-period benefit of $1.9 million associated with the correction of over-accruals of inventory-related expenses recorded in the first quarter of ~~2023.~~2023 that did not recur, (iii) higher inflation on materials, labor and overhead of $1.8 million and (iv) $1.0 million of increased net scrap expenses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased ~~$10.8~~$3.5 million, or ~~17.0%~~5.2%, to ~~$74.3~~$71.4 million, or ~~24.5%~~23.1% of net sales, for the ~~third~~first quarter of ~~2023,~~2024, compared to ~~$63.5~~$67.9 million, or ~~20.1%~~19.5% of net sales, for the ~~third~~first quarter of ~~2022~~2023. The increases in selling general and administrative expenses are primarily due to ~~(i) a $6.4 million loss contingency recorded related to the 37 BP litigation, (ii)~~ increased ~~net payroll and employee benefit~~personnel-related costs of $4.1 million, which was largely driven by general employee cost increases and higher annual incentive compensation costs of $1.7 million, partially offset by reduced health insurance costs of $1.8 million, (iii) $1.3 million increased consulting and project costs and (iv) $0.7 million increased costs related to our strategic transformation program. These increases were partially offset by lower amortization and research and development expenses of $0.9 million, respectively.

Selling, general and administrative expenses increased $22.3 million, or 12.1%, to $206.7 million, or 20.6% of net sales, for the first nine months of 2023, compared to $184.4 million, or 19.9% of net sales, for the first nine months of 2022 primarily due to (i) increased net payroll and employee benefit costs of $8.4 million, which was largely driven by general employee cost increases and higher annual incentive compensation costs of $2.9 million, partially offset by lower share-based compensation expense of $3.4 million mainly related to the recovery of share-based compensation expense in the prior year that did not recur for awards that were forfeited or modified in conjunction with the termination of our previous CEO and the limited overhead restructuring action implemented in February 2023 of $2.4 million, and ~~reduced health insurance~~$3.0 million higher consulting and technology support costs. These increases were partially offset by lower exhibit and promotional costs of $2.1 million, ~~(ii) a $6.4 million loss contingency recorded related~~primarily due to the ~~37 BP litigation, (iii) $3.9 million of increased~~triennial ConExpo industry trade show held in 2023 and reduced costs related to our strategic transformation program ~~(iv) $2.9 million~~ of higher exhibit and promotional costs primarily due to the ConExpo industry trade show held once every three years, (v) $2.8 million increased consulting, prototype and project costs and (vi) incremental expenses associated with the acquisition of MINDS of $1.1$0.8 million. These increases were partially offset by lower amortization expense of $2.9 million and reduced acquisition and integration related costs of $1.9 million primarily associated with the acquisition of MINDS.

~~INDEX~~

Restructuring ~~Impairment~~ and Other Asset Gains and Charges, net

Restructuring ~~asset impairment charges~~ and the net ~~losses and gains~~gain on sale of property and equipment for the ~~three and nine month~~three-month periods ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ are presented below:


	Three Months Ended March 31,
(in millions)	2024		2023
Restructuring charges:
Costs associated with leadership change and overhead restructuring	$	—	$	7.0
Costs associated with exited operations - Enid	0.1		0.1






Total restructuring related charges	0.1		7.1







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

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

See Note ~~11,~~10, Strategic Transformation, ~~and~~ Restructuring ~~Impairment~~ and Other Asset Gains and Charges ~~net~~ of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion of the individual restructuring actions taken.

Interest Expense

Interest expense of ~~$2.4 million and $6.4~~$2.7 million was incurred in the three ~~and nine~~ months ended ~~September 30, 2023, respectively,~~March 31, 2024, as compared to ~~$0.6 million and $1.6~~$2.0 million in the three ~~and nine~~ months ended ~~September 30, 2022, respectively,~~March 31, 2023, primarily related to higher average outstanding borrowings on ~~our revolving credit facility.~~

~~Other (Expenses) Income, net~~

~~Other (expenses) income, net was $0.5 million for~~the Credit Facility in the first ~~nine months~~quarter of ~~2023~~2024 as compared to ~~an expense of $1.8 million for~~ the ~~first nine months of 2022, an increase of $2.3 million primarily due to the change~~same period in ~~net foreign currency transaction gains and losses.~~2023 combined with higher interest rates.

Income Tax

Our income tax ~~benefit~~expense for the ~~third~~first quarter of ~~2023~~2024 was ~~$0.6~~$1.4 million compared to ~~an income tax expense of $0.7~~$4.4 million for the ~~third~~first quarter of ~~2022.~~2023. Our effective income tax rate was ~~8.5%~~29.8% for the ~~third~~first quarter of ~~2023~~2024 compared to ~~58.3%~~26.7% for the ~~third~~first quarter of ~~2022.~~2023. The income tax ~~benefit~~

INDEX

expense for ~~the~~ three months ended ~~September 30, 2023 as~~March 31, 2024 was lower compared to ~~expense in~~ the same period in ~~2022 was~~2023, primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss.

Our income tax expense for the first nine months of 2023 was $6.5 million, reflecting a 25.7% effective tax rate, compared to $0.8 million expense, reflecting a 53.3% effective tax rate, for the first nine months of 2022. The income tax expense for the nine months ended September 30, 2023 was higher compared to the same period in 2022 primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net discrete tax benefit related to a research and development credit.

Backlog

The backlog of orders as of ~~September 30, 2023~~March 31, 2024 was ~~$614.7~~$559.8 million compared to ~~$969.0~~$800.2 million as of ~~September 30, 2022,~~March 31, 2023, a decrease of ~~$354.3~~$240.4 million, or ~~36.6%~~30.0%. Domestic backlog decreased ~~$302.1~~$247.9 million, or ~~37.2%~~36.2%, ~~and~~partially offset by an increase in international backlog

~~INDEX~~

~~decreased $52.2~~ of $7.5 million, or ~~33.4%, respectively.~~6.6%. The backlog decreased ~~$165.0~~$99.8 million to ~~$435.2~~$372.7 million in the Infrastructure Solutions segment and decreased ~~$189.4~~$140.6 million to ~~$176.9~~$187.1 million in the Materials Solutions segment. ~~The Corporate and Other backlog represents our controls and automation business and increased $0.1 million to $2.6 million.~~

~~The decrease in backlog was driven by 2023 sales delivery outpacing new orders compared to a build of backlog throughout 2022, which was largely due to strong~~Strong customer demand and logistics and manufacturing throughput ~~disruptions. We expect~~disruptions in 2021 and 2022 resulted in a build of backlog, ~~levels~~which peaked in late 2022. The order backlog began to ~~continue to normalize from the historically high levels we have experienced in recent years largely based on supply chain stabilization.~~decrease throughout 2023 driven by sales delivery outpacing new orders and is approaching a historical range. Macroeconomic factors such as higher inflation and increased interest rates, among other factors, ~~may also influence future~~have influenced customer ~~spending. Furthermore,~~ordering patterns and are expected to continue. We have experienced variability in the ordering patterns from our dealer customers, most notably in the Materials Solutions segment, as a result of ~~such macroeconomic factors,~~these factors. In addition, our shorter production lead times allow for customers to place orders closer to when the equipment delivery is desired. In order to support sales delivery and maintain optimal backlog levels, we ~~are actively monitoring orders from our high-volume dealers for potential modifications, push-outs or cancellations. Additionally, we are focused on~~have completed prudent ~~expansion~~expansions of our production capacity at certain manufacturing sites that we anticipate will allow us to more effectively convert backlog to sales in the future with greater efficiency and shorter lead times.

~~Segment~~ Net Sales ~~- Three Months Ended~~:by Segment


		Three Months Ended September 30,				$ Change			% Change
(in millions, except percentage data)		2023		2022
	Three Months Ended March 31,
(in millions)
(in millions)
(in millions)												2024					2023						$ Change						% Change
Infrastructure Solutions	Infrastructure Solutions	$	190.8	$	201.9		$	(11.1)			(5.5)	%	Infrastructure Solutions	$	202.2	$			$	215.5		$			$	(13.3)		(6.2)			(6.2)		%
Materials Solutions	Materials Solutions	110.5		111.8		(1.3)			(1.2)	%	Materials Solutions	107.0			132.2			132.2			(25.2)			(25.2)			(19.1)			(19.1)		%
Corporate and Other	Corporate and Other	1.8		1.5		0.3			20.0	%	Corporate and Other	—			0.2			0.2			(0.2)			(0.2)			(100.0)			(100.0)		%

Infrastructure Solutions

Sales in this segment were ~~$190.8~~$202.2 million for the ~~third~~first quarter of ~~2023~~2024 compared to ~~$201.9~~$215.5 million for the same period in ~~2022,~~2023, a decrease of ~~$11.1~~$13.3 million, or ~~5.5%~~6.2%. The decrease was primarily driven by net unfavorable ~~changes in the~~ volume ~~pricing~~ and mix, ~~of sales~~partially offset by favorable pricing that generated decreased (i) equipment sales of ~~$9.0~~$14.8 million, (ii) ~~used equipment sales of $3.5 million and (iii)~~ service and equipment installation revenue of ~~$1.6~~$8.6 million, (iii) freight revenue of $1.4 million and (iv) used equipment sales of $0.9 million. These decreases were partially offset by higher parts and component sales of ~~$3.1~~$11.8 million.

Domestic sales for the Infrastructure Solutions segment decreased ~~$12.3~~$6.1 million, or ~~7.4%~~3.2%, for the ~~third~~first quarter of ~~2023~~2024 compared to the same period in ~~2022~~2023, primarily due to ~~decreased~~decreases in (i) service and equipment installation revenue of $8.3 million, (ii) equipment sales of ~~$11.5~~$7.8 million, ~~(ii)~~(iii) freight revenue of $1.2 million and (iv) used equipment sales of ~~$3.2 million and (iii) service and equipment installation sales of $1.6~~$0.9 million. These decreases were partially offset by ~~an increase in~~higher parts and component sales of ~~$4.0~~$11.4 million.

International sales for the Infrastructure Solutions segment ~~increased $1.2~~decreased $7.2 million, or ~~3.4%~~30.6%, for the ~~third~~first quarter of ~~2023~~2024 compared to the same period in ~~2022~~2023, primarily due to ~~increased~~decreased equipment sales of ~~$2.5 million partially offset by decreased parts and component sales of $0.9~~$7.0 million.

Materials Solutions

Sales in this segment were ~~$110.5~~$107.0 million for the ~~third~~first quarter of ~~2023~~2024 compared to ~~$111.8~~$132.2 million for the same period in ~~2022,~~2023, a decrease of ~~$1.3~~$25.2 million, or ~~1.2%~~19.1%. The decrease was primarily driven by net unfavorable ~~changes in the~~ volume ~~pricing~~ and mix, ~~of sales~~partially offset by favorable pricing that generated decreased (i) equipment sales of $25.2 million, (ii) parts and component sales of $1.1 million and (iii) used equipment sales of ~~$1.0 million and $0.6 million, respectively.~~$0.8 million. These decreases were partially offset by ~~an increase in~~increased other revenue and service and equipment installation revenue of ~~$0.8 million.~~$1.4 million and $0.9 million, respectively.

Domestic sales for the Materials Solutions segment decreased by ~~$7.4~~$31.8 million, or ~~9.0%~~35.7%, for the ~~third~~first quarter of ~~2023~~2024 compared to the same period in ~~2022,~~2023, primarily driven by decreased equipment sales and parts and component sales of ~~$5.9~~$31.1 million and ~~$1.3~~$1.8 million, respectively. These decreases were partially offset by increased other revenue of $1.4 million.

International sales for the Materials Solutions segment increased ~~$6.1~~$6.6 million, or ~~20.7%~~15.3%, for the ~~third~~first quarter of ~~2023~~2024 compared to the same period in ~~2022~~2023, primarily due to ~~increased~~increases in (i) new equipment sales ~~and service and equipment installation sales~~ of ~~$5.4~~$5.9 million, ~~and $0.9 million, respectively.~~

~~INDEX~~

~~Segment Net Sales - Nine Months Ended~~:

Nine Months Ended September 30, $ Change % Change
(in millions, except percentage data) 2023 2022
Infrastructure Solutions $ 638.8 $ 609.0 $ 29.8 4.9 %
Materials Solutions 354.6 312.9 41.7 13.3 %
Corporate and Other 7.6 2.7 4.9 181.5 %

~~Infrastructure Solutions~~

Sales in this segment were $638.8 million for the first nine months of 2023 compared to $609.0 million for the same period in 2022, an increase of $29.8 million or 4.9%. The increase was primarily driven by net favorable changes in the volume, pricing and mix of sales that generated increased(ii) service and equipment installation revenue of ~~$20.7~~$1.0 million and (iii) parts and component sales of ~~$11.5~~$0.7 million. These increases were partially offset by decreased used equipment sales of ~~$2.5~~$0.8 million.

Domestic sales for the Infrastructure Solutions segment increased $29.8 million or 5.9% for the first nine months of 2023 compared to the same period in 2022 primarily due to increased service and equipment installation sales of $20.2 million and increased parts and component sales of $13.5 million. These increases were partially offset by a decrease in used equipment sales of $2.6 million.

INDEX

~~International sales for the Infrastructure Solutions segment were consistent for the first nine months of 2023 compared to the same period in 2022.~~

~~Materials Solutions~~

Sales in this segment were $354.6 million for the first nine months of 2023 compared to $312.9 million for the same period in 2022, an increase of $41.7 million, or 13.3%. The increase was primarily driven by net favorable changes in the volume, pricing and mix of sales that generated increased new equipment sales and service and equipment installation revenue of $42.2 million and $2.0 million, respectively. These increases were partially offset by decreased other revenue of $3.6 million, which was primarily driven by increased utilization of our interest subsidy programs offered to some of our dealer customers.

Domestic sales for the Materials Solutions segment increased by $33.3 million, or 14.6%, for the first nine months of 2023 compared to the same period in 2022, driven by increased new equipment sales of $35.8 million. This increase was partially offset by decreased other revenue of $3.4 million, which was primarily driven by increased utilization of our interest subsidy programs offered to certain of our dealer customers.

International sales for the Materials Solutions segment increased $8.4 million, or 9.9%, for the first nine months of 2023 compared to the same period in 2022 primarily due to increased new equipment sales of $6.4 million and service and equipment installation revenue of $2.0 million.

~~Corporate and Other~~

Corporate and Other sales are generated from our controls and automation business. Sales were $7.6 million for the first nine months of 2023 compared to $2.7 million for the same period in 2022, an increase of $4.9 million, or 181.5%. The increase was primarily related to net incremental sales from MINDS during the first quarter of 2023. The MINDS acquisition was completed on April 1, 2022 and results of operations have been consolidated from that date.

Segment Operating Adjusted EBITDA

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by our ~~Chief Executive Officer, whom~~CEO, who is ~~determined~~considered to be the ~~chief operating decision maker ("CODM"),~~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 is not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented. See Note ~~10,~~9, 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.

~~INDEX~~

~~Segment Operating Adjusted EBITDA - Three Months Ended:~~


		Three Months Ended September 30,				$ Change			% Change
(in millions, except percentage data)		2023		2022
	Three Months Ended March 31,																	Three Months Ended March 31,						$ Change					% Change
(in millions)
Infrastructure Solutions
Infrastructure Solutions
Infrastructure Solutions	Infrastructure Solutions	$	16.5	$	17.6		$	(1.1)			(6.3)	%	$	25.6		$	$	28.5	$	$	(2.9)	(10.2)			(10.2)		%
Materials Solutions	Materials Solutions	8.3		13.1		(4.8)			(36.6)	%	Materials Solutions	5.3			14.6		14.6		(9.3)		(9.3)		(63.7)			(63.7)		%
Corporate and Other	Corporate and Other	(14.4)		(14.2)		(0.2)			(1.4)	%	Corporate and Other	(12.0)			(7.9)		(7.9)		(4.1)		(4.1)		(51.9)			(51.9)		%

Infrastructure Solutions

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was ~~$16.5~~$25.6 million for the ~~third~~first quarter of ~~2023~~2024 compared to ~~$17.6~~$28.5 million for the same period in ~~2022,~~2023, a decrease of ~~$1.1~~$2.9 million or ~~6.3%~~10.2%. The decrease in Segment Operating Adjusted EBITDA resulted primarily from the impact of higher inflation on materials, labor and overhead costs of $6.8 million and increased selling, general, administrative and other net costs of $4.8 million, primarily due to higher personnel related costs. These decreases were partially offset by the impact of favorable pricing net of unfavorable volume/mix that generated $10.5 million higher gross profit.

~~Materials Solutions~~

~~Segment Operating Adjusted EBITDA for the Materials Solutions segment~~ was $8.3 million for the third quarter of 2023 compared to $13.1 million for the same period in 2022, a decrease of $4.8 million, or 36.6%. The decrease in Segment Operating Adjusted EBITDA between periods resulted primarily from increased selling, general, administrative and other net costs of $7.8 million, primarily driven by a $6.4 million loss contingency recorded related to the 37 BP litigation and higher personnel related costs, and the impact of higher inflation on materials, labor and overhead costs of $3.7 million. These decreases were partially offset by the impact of favorable pricing net of unfavorable volume/mix that generated $7.2 million higher gross profit.

~~Segment Operating Adjusted EBITDA - Nine Months Ended~~:

Nine Months Ended September 30, $ Change % Change
(in millions, except percentage data) 2023 2022
Infrastructure Solutions $ 70.5 $ 49.9 $ 20.6 41.3 %
Materials Solutions 41.9 34.8 7.1 20.4 %
Corporate and Other (33.5) (36.3) 2.8 7.7 %

~~Infrastructure Solutions~~

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $70.5 million for the first nine months of 2023 compared to $49.9 million for the same period in 2022, an increase of $20.6 million, or 41.3%. The increase in Segment Operating Adjusted EBITDA resulted primarily from the impact of favorable net volume, pricing and mix that generated $59.1 million higher gross profit. These increases were partially offset by (i) the impact of higher inflation on materials, labor and overhead costs of $22.2 million, (ii) increased selling, general and administrative costs of $13.5 million, primarily due to $10.3 million higher personnel related costs, $2.6 million increased consulting, prototype and project costs and $1.1 million of increased exhibit and promotional costs related to the ConExpo industry trade show and (iii) manufacturing inefficiencies of ~~$3.1~~$3.8 million, ~~partially offset by the impact of~~(ii) an out-of-period benefit of $1.9 million associated with the correction of over-accruals of inventory-related expenses recorded in the first quarter of 2023 that did not recur, (iii) higher consulting and technology support costs of $1.4 million (iv) higher inflation on materials, labor and overhead of $1.0 million and (v) $1.0 million of increased net scrap expenses. These decreases were offset in part by higher gross profit of $4.8 million generated from favorable pricing partially offset by net unfavorable volume and mix and $1.5 million of lower exhibit and promotional costs primarily due to the triennial ConExpo industry trade show held in 2023.

Materials Solutions

Segment Operating Adjusted EBITDA for the Materials Solutions segment was ~~$41.9~~$5.3 million for the first ~~nine months~~quarter of ~~2023~~2024 compared to ~~$34.8~~$14.6 million for the same period in ~~2022, an increase~~2023, a decrease of ~~$7.1~~$9.3 million, or ~~20.4%~~63.7%. The ~~increase~~decrease in Segment Operating Adjusted EBITDA ~~resulted~~was primarily ~~from~~driven by (i) the impact of ~~favorable~~ net unfavorable volume ~~pricing~~ and mix, ~~that generated $32.5 million higher gross profit. These increases were~~ partially offset by ~~(i)~~favorable pricing that resulted in $3.6 million lower gross profit, (ii) higher unfavorable inventory adjustments of $2.2 million, (iii) manufacturing inefficiencies of $1.5 million, (iv) increased selling, general and administrative costs of $1.3 million and (v) the impact of higher inflation on materials, labor and overhead costs of $12.8 million, (ii) increased general and administrative costs of $8.9 million, primarily due to a $6.4 million loss contingency recorded related to the 37 BP litigation and $1.2 million higher personnel related costs and (iii) manufacturing inefficiencies of $3.7 million due in part to increased warranty program costs.$0.8 million.

Corporate and Other

C~~orporate~~Corporate and Other operations had net expenses of ~~$33.5~~$12.0 million for the first ~~nine months~~quarter of ~~2023~~2024 compared to ~~$36.3~~$7.9 million for the first ~~nine months~~quarter of ~~2022, a decrease~~2023, an increase of ~~$2.8~~$4.1 million, or ~~7.7%~~51.9%. The ~~decrease~~increase in net expenses was primarily driven by an

~~INDEX~~

~~incremental $1.5~~$3.6 million of ~~profit contributed by MINDS during the first quarter of 2023 and $2.4 million of lower~~higher general and administrative expenses, primarily ~~associated with employee related costs including~~due to the prior year recovery of share-based compensation expense ~~related to~~that did not recur for awards that were forfeited or modified in conjunction with the termination of our previous CEO and the limited overhead restructuring action implemented in February 2023 ~~partially offset by increased health insurance~~of $2.4 million as well as $1.4 million of higher consulting and technology support costs. ~~The MINDS acquisition was completed on April 1, 2022 and results of operations have been consolidated from that date.~~

Liquidity and Capital Resources

Our primary sources of liquidity and capital resources are cash and cash equivalents on hand, borrowing capacity under ~~a $250.0 million revolving credit facility~~the Credit Facility and cash flows from operations. As of ~~September 30, 2023,~~March 31, 2024, our total liquidity was ~~$196.9~~$170.5 million, consisting of ~~$71.3~~$55.3 million of cash and cash equivalents available for operating purposes and ~~$125.6~~$115.2 million available for additional borrowings under ~~our revolving credit facility,~~the Credit Facility, to the extent our compliance with financial covenants permits such borrowings. Our foreign subsidiaries held ~~$34.0~~$27.9 million of cash and cash equivalents available for operating purposes, which is considered to be indefinitely invested in those jurisdictions.

Our future cash requirements primarily include working capital needs, debt service obligations, capital expenditures, ~~vendor hosted~~vendor-hosted software arrangements including the related implementation costs, unrecognized tax benefits and operating lease payments. In addition, our variable cash uses may include the payment of our quarterly cash dividend, financing other strategic initiatives of our business, including, but not limited to, transformation initiatives, strategic acquisitions and share repurchases under our share repurchase authorization. We believe that our current working capital, cash flows generated from future

INDEX

operations and available capacity under ~~our revolving credit facility~~the Credit Facility will be sufficient to meet working capital and capital expenditure requirements for our existing business for at least the next 12 months.

On December 19, 2022, we entered into a ~~new~~ credit agreement (the "Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and the lenders party ~~thereto, which replaced the previously existing credit facility with a borrowing capacity of $150.0 million and a maturity date of December 29, 2023 (the "Previous Credit Facility").~~thereto. The Credit Agreement provides for (i) a revolving credit facility (consisting of revolving credit loans and swingline loans) and a letter of credit facility, in an aggregate amount of up to $250.0 million, (ii) an incremental credit facility in an aggregate amount not to exceed $125.0 million (the "Credit Facilities") and (iii) a maturity date of December 19, 2027.

We had $122.0 million in outstanding borrowings under the Credit Facilities as of September 30, 2023. Our outstanding letters of credit totaling $2.4 million decreased borrowing availability to $125.6 million under the revolving credit facility as of September 30, 2023. We anticipate continuing to utilize the Credit Facilities with more frequency in the near-term to support our domestic working capital needs. The Credit Agreement contains certain financial covenants, including requirements related to our Consolidated Total Net Leverage Ratio and Consolidated Interest Coverage Ratio, each as defined in the agreement. Failure to satisfy these covenants could result in the accelerated repayment of our indebtedness. We were in compliance with ~~the financial~~all covenants of the Credit Facilities as of ~~September 30, 2023.~~March 31, 2024.

We had $125.0 million in outstanding borrowings under the Credit Facilities as of March 31, 2024. Our outstanding letters of credit totaling $9.8 million decreased borrowing availability to $115.2 million under the revolving credit facility as of March 31, 2024. We anticipate continuing to utilize the Credit Facilities with more frequency in the near term to support our working capital needs. Due to the increased borrowings under our Credit Facilities and higher interest rates, we expect our interest expense in ~~2023~~the near term to ~~be significantly higher than in prior years.~~

~~Our Brazilian subsidiary maintains a separate term loan for working capital purposes with a bank in Brazil, which is secured by its manufacturing facility.~~remain at elevated levels.

Certain of our international subsidiaries in ~~South Africa,~~ Australia, Brazil, Canada, South Africa and the United Kingdom each have separate credit facilities with local financial institutions primarily to finance short-term working capital needs ~~as well as~~and to cover foreign exchange contracts, performance letters of credit, advance payment and retention guarantees. In addition, the Brazilian subsidiary 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.

We regularly enter into agreements, primarily to purchase inventory, in the ordinary course of business. As of ~~September 30, 2023,~~March 31, 2024, open purchase obligations totaled ~~$222.5~~$147.6 million, of which ~~$145.5~~$142.8 million are expected to be fulfilled within the remainder of ~~2023.~~2024.

We estimate that our capital expenditures will ~~not exceed $35~~be between $25.0 million and $35.0 million for the year ending December 31, ~~2023,~~2024, which may be impacted by general economic, financial or operational changes and competitive, legislative and regulatory factors, among other considerations.

~~INDEX~~

Cash Flows

The following table summarizes cash flows during the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively:


			Nine Months Ended September 30,
		Three Months Ended March 31,								Three Months Ended March 31,
(in millions)	(in millions)		2023		2022		(in millions)	2024	2023
Net cash used in operating activities	Net cash used in operating activities		$	(18.8)	$	(56.8)
Net cash used in investing activities			(3.9)		(45.0)
Net cash (used in) provided by investing activities
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities		30.8		(8.4)
Effect of exchange rates on cash	Effect of exchange rates on cash		(0.3)		(3.4)
Increase (decrease) in cash, cash equivalents and restricted cash			7.8		(113.6)
Decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period		$	73.8	$	20.8

Net cash used in operating activities

Net cash used in operating activities ~~decreased~~increased by ~~$38.0~~$27.8 million during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 as compared to the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023, primarily due to higher ~~net income of $18.1 million and reduced~~ net cash usages for our operating assets and liabilities of ~~$12.2~~$23.1 million and lower net income reduced by non-cash charges of $4.8 million. The increased net cash ~~usages~~usage for our operating assets and liabilities were mainly driven by decreased inventory purchases in 2023 of $39.2 million and the timing of payments on trade accounts payables of $18.2 million, partially offset by decreased customer deposits of $29.3 million associated with lower backlog and(i) the timing of collections on trade ~~accounts~~and other receivables ~~$19.2~~of $34.6 million, which includes a $13.7 million receivable from our insurance carriers recorded in the first quarter of 2024 related to a pending litigation settlement, (ii) decreased employee-related liabilities of $7.0 million, (iii) decreased income tax liabilities of $3.5 million and (iv) the timing of inventory purchases of $3.4 million. The net usage was partially offset by timing impacts for accrued liabilities of $18.1 million, which includes $13.7 million related to a pending litigation settlement corresponding to the related receivable from our insurance carriers and customer deposits of $12.0 million, resulting in cash inflows.

Net cash ~~used in~~(used in) provided by investing activities

~~Net cash used in~~Our investing activities ~~decreased by $41.1~~used net cash of $5.9 million during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 as compared to providing net cash of $11.8 million during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, primarily due to the cash inflows from the sale of the

INDEX

Tacoma facility's land, building and certain equipment assets for $19.9 million in the first quarter of ~~2023 and~~2023. Additionally, capital expenditures decreased $2.2 million during the ~~net cash used~~three months ended March 31, 2024 as compared to ~~acquire MINDS in~~ the ~~second quarter~~same period of ~~2022 for $17.8 million.~~2023.

Net cash provided by (used in) financing activities

Our financing activities provided net cash of ~~$30.8~~$48.4 million during the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 as ~~opposed~~compared to a net cash use of ~~$8.4~~$16.2 million during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, primarily due to increased borrowings, net of repayments, of ~~$33.6 million and share repurchases of $6.1 million in the third quarter of 2022.~~$63.6 million.

Dividends

We paid quarterly dividends of $0.13 ~~and $0.12~~ per common share to shareholders in the ~~third~~first quarter of ~~2023~~both 2024 and ~~2022, respectively.~~2023.

Share Repurchases

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 ~~September 30, 2023,~~March 31, 2024, $115.7 million remains available for repurchase under the approved share repurchase program. No shares were repurchased under the plan during the three months ended ~~September 30, 2023;~~March 31, 2024; however, we may conduct opportunistic share repurchases under this authorization in future periods utilizing cash on hand or borrowings under our Credit Facilities. The timing, manner and number of shares repurchased will depend on a variety of factors, including, but not limited to, the level of cash balances, credit availability, financial performance, general business conditions, regulatory requirements, the market price of our stock and the availability of alternative investment opportunities.

Financial Condition

Our total current assets increased to ~~$746.3~~$778.8 million as of ~~September 30, 2023~~March 31, 2024 from ~~$696.4~~$719.5 million as of December 31, ~~2022,~~2023, an increase of ~~$49.9~~$59.3 million, or ~~7.2%~~8.2%, due primarily to increases of ~~$56.7~~$39.3 million in trade and other receivables, which includes a $13.7 million receivable from our insurance carriers recorded in the first quarter of 2024 related to a pending litigation settlement, and $28.4 million in inventory, ~~$7.8~~partially offset by decreases of $5.1 million in cash, cash equivalents and restricted cash and ~~$7.6~~$3.1 million in ~~trade receivables~~prepaid and ~~contract assets. These increases were partially offset by the sale of our Tacoma site previously recorded as "Assets held for sale" for $15.4 million and a decrease in prepaid assets of $5.5 million.~~refundable income taxes.

Our total current liabilities increased to ~~$282.2~~$310.4 million as of ~~September 30, 2023~~March 31, 2024 from ~~$274.0~~$299.0 million as of December 31, ~~2022,~~2023, an increase of ~~$8.2~~$11.4 million, or ~~3.0%~~3.8%, due primarily to net increases of ~~$9.1~~$11.3 million in other current liabilities, which includes $13.7 million related to a pending litigation settlement corresponding to the related receivable from our insurance carriers, and $9.8 million in customer deposits, partially offset by decreases of $8.0 million in accrued employee related liabilities ~~$7.1~~and $1.4 million in ~~accounts payable and $4.8 million in accrued product warranty. These increases were partially offset by an $8.9 million decrease in customer deposits, a $2.5 million decrease in~~ short-term ~~debt and a $2.3 million decrease in other current liabilities.~~

debt.

~~INDEX~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our quantitative and qualitative disclosures about market risk are incorporated by reference from ~~Part~~"Part II, ~~"Item~~Item 7A. Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, ~~2022.~~2023. Our market risk exposures have not materially changed since our Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 was filed.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

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~~CEO and Interim Chief Financial Officer ("CFO"), 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~~CEO and ~~Chief Financial Officer,~~CFO, 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~~CEO and ~~Chief Financial Officer~~CFO have concluded that as of ~~September 30, 2023,~~March 31, 2024, the Company's disclosure controls and procedures were effective.

Internal Control over Financial Reporting

We are currently undertaking a significant multi-year global ERP implementation to upgrade our information technology platforms and business processes. The implementation is occurring in phases over several years, ~~beginning~~which began in 2023. During ~~the first quarter of~~ 2023, we implemented the human capital resources management module, including the payroll application for all locations within the United ~~States. During the second quarter of 2023, we implemented~~States, the ERP at Corporate and one manufacturing ~~site. During the third quarter of 2023, we implemented~~site and the consolidations and reporting module.

INDEX

As a result of this multi-year implementation, we expect certain changes to our processes and procedures, which, in turn, will result in changes to our internal control over financial reporting. While we expect this implementation to strengthen our internal control over financial reporting by automating certain manual processes and standardizing business processes and reporting across our organization, we will continue to evaluate and monitor our internal control over financial reporting as processes and procedures in the affected areas evolve.

~~With the exception of the implementations described above, there~~There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the three month period ended ~~September 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

3425

INDEX

PART II ‑ OTHER INFORMATION

Item 1. Legal Proceedings

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 8,7, Commitments and Contingencies, to the unaudited consolidated financial statements and ~~Part~~"Part I, ~~"Item~~Item 3. Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, ~~2022,~~2023, 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.

Item 1A. Risk Factors

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, ~~2022,~~2023, 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, ~~2022, our~~ ~~Quarterly Report on Form 10-Q~~ ~~for the three months ended March 31, 2023, our~~ ~~Quarterly Report on Form 10-Q~~ ~~for the three and six months ended June 30,~~ 2023 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 and adversely affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number

Exhibit Description

Filed Herewith

31.1

Certification of Chief Executive Officer of Astec Industries, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Interim Chief Financial Officer of Astec Industries, Inc. pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer of Astec Industries, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Interim Chief Financial Officer of Astec Industries, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2023~~March 31, 2024 formatted in Inline Extensible Business Reporting Language ("iXBRL"): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive (Loss) Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity and (vi) related notes, tagged as blocks of text and including detailed tags.

104

Cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2023,~~March 31, 2024, formatted in iXBRL (included as Exhibit 101).

3526

INDEX

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			ASTEC INDUSTRIES, INC. (Registrant)


Date: ~~November~~May 2, ~~2023~~2024			/s/ ~~Rebecca A. Weyenberg~~Heinrich H. Jonker
			~~Rebecca A. Weyenberg~~Heinrich H. Jonker Interim Chief Financial Officer (Principal Financial Officer)


Date: ~~November~~May 2, ~~2023~~2024			/s/ Jamie E. Palm
			Jamie E. Palm Vice President, Chief Accounting Officer and Corporate Controller (Principal Accounting Officer)

3627


		Page
PART I
Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2318
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3424
Item 4.	Controls and Procedures	3424

PART II
Item 1.	Legal Proceedings	3526
Item 1A.	Risk Factors	3526
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3526
Item 3.	Defaults Upon Senior Securities	3526
Item 4.	Mine Safety Disclosures	3526
Item 5.	Other Information	3526
Item 6.	Exhibits	3526
SIGNATURES		3627


	Nine Months Ended September 30, 2023								Nine Months Ended September 30, 2022
(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Net Sales-Domestic:
Equipment sales	$	314.6	$	197.8	$	2.2	$	514.6	$	315.2	$	162.0	$	0.9	$	478.1

Parts and component sales	159.9		64.1		0.2		224.2		146.4		63.7		0.1		210.2
Service and equipment installation revenue	38.0		0.6		0.1		38.7		17.8		0.6		—		18.4
Used equipment sales	2.6		—		—		2.6		5.2		—		—		5.2
Freight revenue	17.4		6.4		—		23.8		18.1		5.9		—		24.0
Other	0.4		(7.5)		0.5		(6.6)		0.4		(4.1)		0.1		(3.6)
Total domestic revenue	532.9		261.4		3.0		797.3		503.1		228.1		1.1		732.3

Net Sales-International:
Equipment sales	68.3		56.9		3.9		129.1		67.4		50.5		1.1		119.0

Parts and component sales	31.4		30.0		0.1		61.5		33.4		29.4		0.1		62.9
Service and equipment installation revenue	3.3		4.1		0.4		7.8		2.8		2.1		0.3		5.2
Used equipment sales	0.6		1.2		—		1.8		0.5		1.6		—		2.1
Freight revenue	2.3		1.0		—		3.3		1.8		1.0		—		2.8
Other	—		—		0.2		0.2		—		0.2		0.1		0.3
Total international revenue	105.9		93.2		4.6		203.7		105.9		84.8		1.6		192.3
Total net sales	$	638.8	$	354.6	$	7.6	$	1,001.0	$	609.0	$	312.9	$	2.7	$	924.6