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 June 30, 2024

or

☐ 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," 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 August 2, 2024, there were 22,800,581 shares of Common Stock outstanding.

ASTEC INDUSTRIES, INC.

Index to Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2024

		Page
PART I
Item 1.	Financial Statements (Unaudited)	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	31
SIGNATURES		32

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

ASTEC INDUSTRIES, INC.

Consolidated Balance Sheets

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

	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	63.2	$	63.2
Investments	5.2		5.7
Trade receivables, contract assets and other receivables, net of allowance for credit losses of $5.5 and $4.0, respectively	218.2		152.7
Inventories	455.3		455.6
Prepaid and refundable income taxes	12.5		14.6
Prepaid expenses and other assets	24.4		27.7
Total current assets	778.8		719.5
Property and equipment, net of accumulated depreciation of $255.2 and $248.1, respectively	186.9		187.6
Investments	17.2		13.8
Goodwill	25.6		46.3
Intangible assets, net of accumulated amortization of $53.5 and $51.3, respectively	13.7		16.4
Deferred income tax assets	43.3		37.5
Other long-term assets	41.5		38.2
Total assets	$	1,107.0	$	1,059.3
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	—	$	0.1
Short-term debt	13.2		11.0
Accounts payable	102.6		116.9
Customer deposits	89.1		70.2
Accrued product warranty	15.4		16.5
Accrued employee related liabilities	31.9		44.1
Accrued loss reserves	2.0		2.7
Other current liabilities	57.0		37.5
Total current liabilities	311.2		299.0
Long-term debt	125.0		72.0
Deferred income tax liabilities	1.6		1.1
Other long-term liabilities	35.9		33.5
Total liabilities	473.7		405.6
Commitments and contingencies (Note 8)
Shareholders' equity:
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 – 22,800,581 as of June 30, 2024 and 22,740,635 as of December 31, 2023	4.6		4.5
Additional paid-in capital	140.3		138.4
Accumulated other comprehensive loss	(43.7)		(38.1)
Company stock held by deferred compensation programs, at cost	(0.7)		(0.8)
Retained earnings	532.8		549.4
Shareholders' equity	633.3		653.4
Noncontrolling interest	—		0.3
Total equity	633.3		653.7
Total liabilities and equity	$	1,107.0	$	1,059.3

    

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

1

ASTEC INDUSTRIES, INC.

Consolidated Statements of Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net sales	$	345.5	$	350.0	$	654.7	$	697.9
Cost of sales	264.2		267.1		496.5		525.8
Gross profit	81.3		82.9		158.2		172.1
Selling, general and administrative expenses	71.1		64.5		142.5		132.4
Goodwill impairment	20.2		—		20.2		—
Restructuring, other impairment and asset charges, net	0.7		1.1		(0.1)		4.8
(Loss) income from operations	(10.7)		17.3		(4.4)		34.9
Other expenses, net:
Interest expense	(3.1)		(2.0)		(5.8)		(4.0)
Interest income	0.4		0.5		1.0		1.0
Other (expenses) income, net	(0.3)		0.1		0.2		0.5
(Loss) income before income taxes	(13.7)		15.9		(9.0)		32.4
Income tax provision	0.3		2.7		1.7		7.1
Net (loss) income	(14.0)		13.2		(10.7)		25.3
Net (income) loss attributable to noncontrolling interest	—		(0.1)		0.1		(0.1)
Net (loss) income attributable to controlling interest	$	(14.0)	$	13.1	$	(10.6)	$	25.2
Per share data:
(Loss) earnings per common share - Basic	$	(0.61)	$	0.58	$	(0.47)	$	1.11
(Loss) earnings per common share - Diluted	$	(0.61)	$	0.58	$	(0.47)	$	1.11
Weighted average shares outstanding - Basic	22,796,729		22,723,748		22,779,414		22,689,990
Weighted average shares outstanding - Diluted	22,796,729		22,769,447		22,779,414		22,772,232

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

2

ASTEC INDUSTRIES, INC.

Consolidated Statements of Comprehensive (Loss) Income

(In millions, unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net (loss) income	$	(14.0)	$	13.2	$	(10.7)	$	25.3
Other comprehensive (loss) income:
Foreign currency translation adjustments	(1.4)		0.5		(5.8)		0.6
Other comprehensive (loss) income	(1.4)		0.5		(5.8)		0.6
Comprehensive (loss) income	(15.4)		13.7		(16.5)		25.9
Comprehensive loss (income) attributable to noncontrolling interest	0.2		(0.1)		0.3		(0.2)
Comprehensive (loss) income attributable to controlling interest	$	(15.2)	$	13.6	$	(16.2)	$	25.7

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

3

ASTEC INDUSTRIES, INC.

Consolidated Statements of Cash Flows

(In millions, unaudited)

	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net (loss) income	$	(10.7)	$	25.3
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	13.1		12.5
Provision for credit losses	1.9		0.2
Provision for warranties	8.7		10.6
Deferred compensation (benefit) expense	(0.2)		0.1
Share-based compensation	2.3		2.2
Deferred tax benefit	(5.3)		(4.7)
Gain on disposition of property and equipment, net	(1.1)		(3.5)
Goodwill impairment	20.2		—
Other impairment charges	—		0.8
Amortization of debt issuance costs	0.2		0.2
Distributions to deferred compensation programs' participants	(0.5)		(0.4)
Change in operating assets and liabilities:
Purchase of trading securities, net	(2.3)		(1.1)
Receivables and other contract assets	(68.6)		9.7
Inventories	(1.7)		(37.2)
Prepaid expenses	3.2		5.7
Other assets	(3.2)		(8.3)
Accounts payable	(12.8)		1.3
Accrued loss reserves	(0.1)		0.6
Accrued employee related liabilities	(12.0)		1.6
Other accrued liabilities	20.4		(7.4)
Accrued product warranty	(9.7)		(6.0)
Customer deposits	19.0		(11.4)
Income taxes payable/prepaid	3.1		6.7
Net cash used in operating activities	(36.1)		(2.5)
Cash flows from investing activities:
Expenditures for property and equipment	(13.4)		(17.1)
Proceeds from sale of property and equipment	1.1		20.1
Purchase of investments	(0.7)		(0.5)
Sale of investments	0.4		0.1
Net cash (used in) provided by investing activities	(12.6)		2.6

(Continued)

4

ASTEC INDUSTRIES, INC.

Consolidated Statements of Cash Flows (Continued)

(In millions, unaudited)

	Six Months Ended June 30,
	2024		2023
Cash flows from financing activities:
Payment of dividends	(5.9)		(5.9)
Proceeds from borrowings on credit facilities and bank loans	107.2		113.6
Repayments of borrowings on credit facilities and bank loans	(51.4)		(128.1)
Sale of Company stock by deferred compensation programs, net	0.1		—
Withholding tax paid upon vesting of share-based compensation awards	(0.5)		(1.6)
Net cash provided by (used in) financing activities	49.5		(22.0)
Effect of exchange rates on cash	(0.8)		0.4
(Decrease) increase in cash, cash equivalents and restricted cash	—		(21.5)
Cash, cash equivalents and restricted cash, beginning of period	63.2		66.0
Cash, cash equivalents and restricted cash, end of period	$	63.2	$	44.5
Supplemental cash flow information:
Cash paid during the year for:
Interest, net of capitalized interest	$	3.8	$	2.6
Income taxes paid	$	4.4	$	5.5
Supplemental disclosures of non-cash items:
Non-cash investing activities:
Capital expenditures in accounts payable	$	0.6	$	0.5
Non-cash financing activities:
Additions to right-of-use assets and lease liabilities	$	1.9	$	0.2

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

5

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, 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
Net loss	—	—		—		—		—		(14.0)		—		(14.0)
Other comprehensive loss	—	—		—		(1.2)		—		—		(0.2)		(1.4)
Dividends ($0.13 per share)	—	—		—		—		—		(3.0)		—		(3.0)
Share-based compensation	—	—		1.1		—		—		—		—		1.1
Issuance of common stock under incentive plan	35,618	0.1		—		—		—		—		—		0.1
Withholding tax paid upon equity award vesting	—	—		(0.1)		—		—		—		—		(0.1)
Deferred compensation programs' transactions, net	—	—		—		—		0.1		—		—		0.1
Balance, June 30, 2024	22,800,581	$	4.6	$	140.3	$	(43.7)	$	(0.7)	$	532.8	$	—	$	633.3

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

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

6

ASTEC INDUSTRIES, INC.

Notes to 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 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 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, which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the 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, 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 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 resolution of certain 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 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 six months ended June 30, 2024 and 2023, the financial position as of June 30, 2024 and December 31, 2023 and the cash flows for the six months ended June 30, 2024 and 2023, and, except as otherwise discussed herein, such adjustments consist only of those of a normal recurring nature. The interim results are not necessarily indicative of results that may be achieved in a full reporting year.

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

7

Adjustments

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.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures," which requires entities to disclose significant segment expenses, other segment items, the title and position of the chief operating decision maker ("CODM") and 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 interim periods. The new standard is effective, on a retrospective basis, for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact this ASU will have on its financial statement disclosures.

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 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. 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)	June 30, 2024		December 31, 2023
Raw materials and parts	$	286.7	$	298.6
Work-in-process	94.5		87.1
Finished goods	72.4		68.3
Used equipment	1.7		1.6
Total	$	455.3	$	455.6

Note 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 (each, a "DCP") include a non-qualified Supplemental Executive Retirement Plan ("SERP") and a separate non-qualified Deferred Compensation Plan. Although the DCP's investments are allocated to individual participants, and investment decisions are made solely by those participants, they are non-qualified plans. Consequently, the Company owns the assets and the related offsetting liability for disbursement until such time as a participant makes a qualifying withdrawal. The DCP assets and related offsetting liabilities are recorded in non-current "Investments" and "Other long-term liabilities," respectively, in the Consolidated Balance Sheets. The Company's

8

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

The carrying amount of cash, cash equivalents and restricted cash, trade receivables and contract assets, other receivables, accounts payable, short-term debt and long-term debt approximates their fair value because of their short-term nature and/or interest rates associated with the instruments. 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.

Financial assets and liabilities are categorized based 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 -	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

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

	June 30, 2024
(in millions)	Level 1		Level 2		Total
Financial assets:
Trading equity securities:
Deferred compensation programs' mutual funds	$	4.9	$	—	$	4.9
Preferred stocks	0.3		—		0.3
Equity funds	0.5		—		0.5
Trading debt securities:
Corporate bonds	3.6		—		3.6
Agency bonds	—		2.5		2.5
U.S. government securities	2.9		—		2.9
Asset-backed securities	—		5.5		5.5
Exchange traded funds	1.2		—		1.2
Mortgage backed securities	—		0.4		0.4
Other	0.2		0.4		0.6
Total financial assets	$	13.6	$	8.8	$	22.4
Financial liabilities:
Deferred compensation programs' liabilities	$	—	$	6.0	$	6.0
Total financial liabilities	$	—	$	6.0	$	6.0

9

	December 31, 2023
(in millions)	Level 1		Level 2		Total
Financial assets:
Trading equity securities:
Deferred compensation programs' mutual funds	$	4.2	$	—	$	4.2
Preferred stocks	0.3		—		0.3
Equity funds	0.7		—		0.7
Trading debt securities:
Corporate bonds	3.4		—		3.4
Agency bonds	—		2.5		2.5
U.S. government securities	1.9		—		1.9
Asset-backed securities	—		4.0		4.0
Exchange traded funds	1.3		—		1.3
Mortgage backed securities	—		0.5		0.5
Other	0.2		0.5		0.7
Total financial assets	$	12.0	$	7.5	$	19.5
Financial liabilities:
Derivative financial instruments	$	—	$	0.1	$	0.1
Deferred compensation programs' liabilities	—		5.5		5.5
Total financial liabilities	$	—	$	5.6	$	5.6

Note 4. Goodwill

During the second quarter of 2024, the Company identified that indicators of goodwill impairment were present due to current macroeconomic conditions, including declines in the Company's publicly quoted share price and increased interest rates, as well as lower than expected operating results. These factors indicated that one or more of the Company's reporting units may have fallen below their carrying amounts. A qualitative assessment on all reporting units was performed and the Company concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.

The Company determined the fair value of the Materials Solutions reporting unit using an equally weighted combination of the discounted cash flow method, a form of the income approach, and the guideline public company method, a form of the market approach. The significant assumptions used under the discounted cash flow method are projected net sales, projected earnings before interest, tax, depreciation and amortization ("EBITDA"), terminal growth rates, and the cost of capital. Projected net sales, projected EBITDA and terminal growth rates were determined to be significant assumptions because they are primary drivers of the projected cash flows in the discounted cash flow fair value model. Cost of capital was also determined to be a significant assumption as it is the discount rate used to calculate the current fair value of those projected cash flows. The Company calculates the discount rate based on a market-participant, risk-adjusted weighted average cost of capital, which considers industry specific rates of return on debt and equity capital for a target industry capital structure, adjusted for risks associated with business size, geography and other factors specific to the reporting unit. A change in the discount rate, as a result of a change in economic conditions or otherwise, could result in the carrying value of the reporting unit exceeding its fair value. For the guideline public company method, significant assumptions relate to the selection of appropriate guideline companies and related valuation multiples used in the market analysis.

Based on the quantitative impairment test, the Company determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024. As a result, the Company recognized a pre-tax non-cash goodwill impairment charge of $20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.

Note 5. 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

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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 six month periods ended June 30, 2024 and 2023 are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2024		2023		2024		2023
Reserve balance, beginning of the period	$	16.2	$	12.4	$	16.5	$	11.9
Warranty liabilities accrued	4.5		6.7		8.7		10.6
Warranty liabilities settled	(5.2)		(2.6)		(9.7)		(6.0)
Other	(0.1)		—		(0.1)		—
Reserve balance, end of the period	$	15.4	$	16.5	$	15.4	$	16.5

Note 6. 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 million and $7.2 million as of June 30, 2024 and December 31, 2023, respectively, of which $5.1 million and $4.5 million were included in "Other long-term liabilities" in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.

Note 7. Income Taxes

For the three months ended June 30, 2024, the Company recorded an income tax provision of $0.3 million, reflecting a (2.2)% effective tax rate, compared to $2.7 million for the three months ended June 30, 2023, reflecting a 17.0% effective tax rate. The income tax expense for the three months ended June 30, 2024 was lower compared to the same period in 2023 primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment.

For the six months ended June 30, 2024, the Company recorded an income tax provision of $1.7 million, reflecting a (18.9)% effective tax rate, compared to $7.1 million for the six months ended June 30, 2023, reflecting a 21.9% effective tax rate. The income tax expense for the six months ended June 30, 2024 was lower compared to the same period in 2023, primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment.

The Company's recorded liability for uncertain tax positions was $13.4 million and $13.0 million as of June 30, 2024 and December 31, 2023, respectively. The increase is the result of $0.4 million of incremental reserves associated with a research and development credit generated during 2024. The Company does not anticipate a significant change in unrecognized tax benefits due to the expiration of relevant statutes of limitations and federal, state, and foreign tax audit resolutions over the next twelve months.

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

Note 8. 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 $1.1 million as of June 30, 2024 and December 31, 2023, respectively. These arrangements expire at various dates through September 2026. Additionally, the Company is also contingently liable for 1.75% of the unpaid balance, determined as of December 31 of the prior year (or approximately $0.1 million for 2024), on certain past customer equipment purchases that were financed by an outside finance

11

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

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

In addition, the Company is contingently liable under letters of credit issued under its $250.0 million revolving credit facility (the "Credit Facility"), which outstanding letters of credit totaled $9.8 million as of June 30, 2024. The outstanding letters of credit expire at various dates through April 2025. Unused letters of credit under the Credit Facility are $20.2 million as of June 30, 2024. The Company is additionally contingently liable for a total of $5.1 million in performance letters of credit and retention guarantees primarily held by its foreign subsidiaries, of which $3.3 million are secured by separate credit facilities with various financial institutions as of June 30, 2024. As of June 30, 2024, there were $13.1 million of unused letters of credit under such separate credit facilities.

The Company and certain of its former executive officers were named as defendants in a putative shareholder class action lawsuit filed on February 1, 2019, as amended on August 26, 2019, in the United States District Court for the Eastern District of Tennessee. The action is styled City of Taylor General Employees Retirement System v. Astec Industries, Inc., et al., Case No. 1:19-cv-24-CEA-CHS. The complaint generally alleges that the defendants violated the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and that the individual defendants were control persons under Section 20(a) of the Exchange Act. The complaint was filed on behalf of shareholders who purchased stock of the Company between July 26, 2016 and October 22, 2018 and sought monetary damages on behalf of the purported class. On March 22, 2024, the parties notified the court that they reached an agreement in principle to resolve this action for $13.7 million. On May 16, 2024, the court entered an order preliminarily approving the settlement and establishing notice procedures and set a final settlement approval hearing for September 5, 2024. The Company's insurance carriers will fund the entire $13.7 million settlement amount. In connection with the pending settlement, management recorded a liability of $13.7 million in "Other current liabilities" and a corresponding $13.7 million receivable from the Company's insurance carriers in "Trade receivables, contract assets and other receivables, net" during the first quarter of 2024.

The Company's GEFCO, Inc. ("GEFCO") subsidiary has been named a defendant in a lawsuit originally filed on August 16, 2018, with an amended complaint filed on January 25, 2019, in the United States District Court for the Western District of Oklahoma. The action is styled VenVer S.A. and Americas Coil Tubing LLP v. GEFCO, Inc., Case No. CIV-18-790-SLP. The complaint alleges breaches of warranty and other similar claims regarding equipment sold by GEFCO in 2013. In addition to seeking a rescission of the purchase contract, the plaintiff is seeking various relief including special and consequential damages. The original purchase price of the equipment was approximately $8.5 million. On July 7, 2020, the plaintiffs filed a separate lawsuit directly against Astec Industries, Inc. that generally mirrored the allegations in the GEFCO suit. In January 2023, the court allowed Astec Industries, Inc. to be added as a defendant to the GEFCO suit and, as a result, the separate suit against Astec Industries, Inc. was dismissed. The Company and GEFCO each dispute the plaintiffs' allegations and are vigorously defending the suit. On March 14, 2024, VenVer filed a motion to set a trial date, which is pending with the court. The Company is unable to determine whether or not a future loss will be incurred due to this litigation or estimate the possible loss or range of loss, if any, at this time.

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. 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 recorded a loss contingency of $6.4 million in "Selling, general and administrative expenses" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2023 representing management's best estimate of the loss at that time. 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 district court. As of June 30, 2024, $8.2 million was the total loss contingency recorded inclusive of post-judgment interest which will continue to be incurred until the appeals process reaches a resolution.

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

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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.

Note 9. Revenue Recognition

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

	Three Months Ended June 30, 2024								Three Months Ended June 30, 2023
(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Net Sales-Domestic:
Equipment sales	$	148.9	$	44.7	$	—	$	193.6	$	113.7	$	75.4	$	—	$	189.1
Parts and component sales	47.2		20.4		—		67.6		50.3		22.3		—		72.6
Service and equipment installation revenue	5.2		0.2		—		5.4		18.0		0.2		—		18.2
Used equipment sales	0.1		—		—		0.1		1.7		—		—		1.7
Freight revenue	5.3		1.7		—		7.0		5.3		2.4		—		7.7
Other	0.5		(2.1)		—		(1.6)		0.2		(2.9)		(0.2)		(2.9)
Total domestic revenue	207.2		64.9		—		272.1		189.2		97.4		(0.2)		286.4
Net Sales-International:
Equipment sales	9.6		38.5		—		48.1		6.2		33.2		—		39.4
Parts and component sales	4.1		17.0		—		21.1		3.5		16.0		—		19.5
Service and equipment installation revenue	0.2		2.8		—		3.0		0.3		2.5		—		2.8
Used equipment sales	—		—		—		—		—		0.6		—		0.6
Freight revenue	0.3		0.9		—		1.2		0.2		1.1		—		1.3
Other	—		—		—		—		—		—		—		—
Total international revenue	14.2		59.2		—		73.4		10.2		53.4		—		63.6
Total net sales	$	221.4	$	124.1	$	—	$	345.5	$	199.4	$	150.8	$	(0.2)	$	350.0

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	Six Months Ended June 30, 2024								Six Months Ended June 30, 2023
(in millions)	Infrastructure Solutions		Materials Solutions		Corporate and Other		Total		Infrastructure Solutions		Materials Solutions		Corporate and Other		Total
Net Sales-Domestic:
Equipment sales	$	249.3	$	81.3	$	—	$	330.6	$	221.9	$	143.1	$	—	$	365.0
Parts and component sales	118.0		39.9		—		157.9		109.7		43.6		—		153.3
Service and equipment installation revenue	13.4		0.3		—		13.7		34.5		0.4		—		34.9
Used equipment sales	0.1		—		—		0.1		2.6		—		—		2.6
Freight revenue	11.0		3.6		—		14.6		12.2		4.5		—		16.7
Other	1.3		(2.9)		—		(1.6)		0.3		(5.1)		—		(4.8)
Total domestic revenue	393.1		122.2		—		515.3		381.2		186.5		—		567.7
Net Sales-International:
Equipment sales	17.9		68.7		—		86.6		21.5		57.5		—		79.0
Parts and component sales	11.7		33.4		—		45.1		10.7		31.7		—		42.4
Service and equipment installation revenue	0.4		5.4		—		5.8		0.8		4.1		—		4.9
Used equipment sales	—		—		—		—		—		1.4		—		1.4
Freight revenue	0.5		1.4		—		1.9		0.6		1.8		—		2.4
Other	—		—		—		—		0.1		—		—		0.1
Total international revenue	30.5		108.9		—		139.4		33.7		96.5		—		130.2
Total net sales	$	423.6	$	231.1	$	—	$	654.7	$	414.9	$	283.0	$	—	$	697.9

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Sales into major geographic regions were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2024		2023		2024		2023
United States	$	272.1	$	286.4	$	515.3	$	567.7
Canada	22.7		13.5		41.6		35.3