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PRE-MKT · 07:20 ET
Market ClerkRecap
Fri Oct 23 · pre-market6 signals on Oct 22103 insider buys this week · $208.8MCIRO short report next: Oct 31The week ahead

ASTE

ASTEC INDUSTRIES INC
NASDAQ · INDUSTRIALS · CONSTRUCTION MACHINERY & EQUIP
38.90
−0.66 −1.67%
USD · close Oct 22
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MKT CAP $895.7MP/E 45.8DIV YIELD —FCF YIELD 3.62%REV TTM $1.6B +18.7%NET INCOME $19.6M −57.3%NET DEBT $293.4M52W 38.22 – 65.02SEC XBRL · TTM TO Invalid Date

How ASTE rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
39%
of sentences unchanged
Added
351
new sentences
Dropped
397
sentences removed
Length
−1,416
words, now 31,039

New in FY2025

  • Risk Factors for a discussion of uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied in the forward-looking statements.
  • This section of this Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
  • A similar discussion of 2023 items and year-to-year comparisons between 2024 and 2023 can be found in Part II, Item 7.
  • Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024 .
  • Executive Summary Highlights of our financial results as of and for the year ended December 31, 2025 as compared to the prior year include the following: • Net sales were $1,410.4 million, an increase of 8.1% • Gross profit was $374.2 million, an increase of 14.1% • Income from operations was $65.9 million, an increase of 184.1% • Net income attributable to Astec was $38.8 million, an increase of 802.3% • Diluted income per share was $1.68, an increase of 784.2% • Backlog was $514.1 million, an increase of 22.5% Significant Items Impacting Financial Results in 2025 TerraSource Acquisition On July 1, 2025, we completed our acquisition of TerraSource Holdings, LLC ("TerraSource"), a market-leading manufacturer of material processing equipment and related aftermarket parts serving complementary crushing, screening and separation applications.
  • This acquisition provides us with access to adjacent markets in materials processing equipment and related aftermarket parts and significant growth and value creation opportunities.
  • New Credit Facility On July 1, 2025 and simultaneously with the consummation of the acquisition of TerraSource, we entered into a new credit agreement (the "2025 Credit Agreement") with Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto from time to time that provides for (i) a revolving credit facility, a term loan facility, a swingline facility and a letter of credit facility, in an initial aggregate amount of up to $600.0 million and (ii) an incremental facilities limit in an aggregate amount not to exceed $150.0 million (collectively, the "2025 Credit Facilities").
  • Strategic Transformation Program Our strategic transformation program includes the ongoing multi-year phased implementation of a standardized enterprise resource planning ("ERP") system, which is replacing much of our existing disparate core financial systems.
  • To date, we have launched the human capital resources module in our U.S. and Canadian locations and converted the operations of three manufacturing sites along with Corporate.
  • Through the year ended December 31, 2025, we have incurred total implementation costs of approximately $151 million.
  • See Note 21, Strategic Transformation and Restructuring, Impairment and Other Asset (Gains) Charges, net of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional discussion of the costs related to these strategic initiatives.
  • Liquid asphalt is a by-product of oil refining, and changes in the price of oil 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.
  • Oil prices have routinely fluctuated in recent years, and based on the current macroeconomic environment, we anticipate that oil prices will experience moderate fluctuation throughout 2026.
  • In reaction to import tariffs and market uncertainty, steel prices increased in the first half of 2025, before experiencing a gradual decline in the second half of the year, resulting in a relatively stable average price for the year overall.
  • Despite rising prices at the end of 2025, we anticipate minimal price changes in 2026 as domestic mills manage output and maintain pricing advantages over imports.
  • Furthermore, given the volatility of steel prices and the nature of our customers' orders, we may not be able to pass through all increases in steel costs to our customers, which may negatively impact our gross profit and margins.
  • Results of Operations: 2025 vs. 2024 Net Sales Net sales increased $105.3 million, or 8.1%, to $1,410.4 million in 2025 from $1,305.1 million in 2024.
  • The increase in net sales was primarily driven by net favorable volume and mix coupled with favorable pricing that generated increases in (i) equipment sales of $44.6 million, (ii) parts and component sales of $44.5 million, (iii) service and equipment installation revenue of $12.8 million and (iv) freight revenue of $4.0 million.
  • Included in these net increases is $84.7 million of incremental net sales from the acquired TerraSource business.
  • Sales reported by our foreign subsidiaries in U.S. dollars for 2025 would have been $2.5 million lower had foreign exchange rates been the same as the 2024 rates.
  • Domestic sales for 2025 were $1,130.2 million, or 80.1% of net sales, compared to $1,015.4 million, or 77.8% of net sales, for 2024, an increase of $114.8 million, or 11.3%.
  • Domestic sales increased primarily due to higher (i) equipment sales of $58.9 million, (ii) parts and component sales of $42.1 million, (iii) service and equipment installation revenue of $11.2 million and (iv) freight revenue of $3.4 million.
  • Included in the net increase is $58.4 million of incremental domestic revenue from the acquired TerraSource business.
  • International sales for 2025 were $280.2 million, or 19.9% of net sales, compared to $289.7 million, or 22.2% of net sales, for 2024, a decrease of $9.5 million, or 3.3%.
  • International sales decreased primarily due to lower equipment sales of $14.3 million partially offset by higher parts and component sales of $2.4 million.
  • Included in the net decrease is $26.3 million of incremental international revenue from the acquired TerraSource business.
  • Gross Profit Consolidated gross profit for 2025 was $374.2 million, or 26.5% of net sales, as compared to $327.9 million, or 25.1% of net sales, in 2024, an increase of $46.3 million, or 14.1%.
  • The increase in gross profit was primarily driven by the impact of favorable pricing coupled with net favorable volume and mix of $81.6 million.
  • These increases were partially offset by (i) manufacturing inefficiencies of $17.8 million, (ii) amortization of acquisition-related inventory fair value step-up of $7.4 million, (iii) higher warranty program costs of $5.5 million and (iv) net unfavorable inventory adjustments of $4.2 million.
  • Selling, General and Administrative Expenses Selling, general and administrative expenses for 2025 were $308.7 million, or 21.9% of net sales, compared to $276.1 million, or 21.2% of net sales, for 2024, an increase of $32.6 million, or 11.8%, primarily due to (i) increased personnel-related costs of $24.5 million, partially driven by $6.0 million of employee incentive compensation costs, (ii) increased intangible asset amortization expense of $9.3 million, (iii) increased acquisition and integration costs of $8.7 million primarily attributable to the acquisition of TerraSource and (iv) the $1.9 million benefit derived from the 37 BP litigation loss contingency release offset by the final settlement amount recorded during 2024.
  • These increases were partially offset by lower costs related to our strategic transformation program of $13.2 million and decreased professional service costs of $2.9 million.
  • Goodwill Impairment We performed a qualitative assessment for the annual test of goodwill impairment performed in 2025 and concluded that there was no impairment of goodwill.
  • During the prior year, we determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024.
  • Restructuring, Impairment and Other Asset (Gains) Charges, net Restructuring, impairment and other asset (gains) charges, net for the years ended December 31, 2025 and 2024 are presented below: Years Ended December 31, (in millions) 2025 2024 Restructuring (gains) charges, net: (Gains) charges associated with exited operations – Enid $ (0.2) $ 8.6 Workforce reductions — 0.9 Total restructuring related (gains) charges, net (0.2) 9.5 Gain on sale of property and equipment, net: Gain on sale of property and equipment, net (0.2) (1.1) Total gain on sale of property and equipment, net (0.2) (1.1) Restructuring, impairment and other asset (gains) charges, net $ (0.4) $ 8.4 See Note 21, Strategic Transformation and Restructuring, Impairment and Other Asset (Gains) Charges, net, of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for discussion of the individual restructuring actions taken.
  • Interest Expense Interest expense of $18.5 million was incurred for the year ended December 31, 2025 as compared to $10.7 million for the year ended December 31, 2024, an increase of $7.8 million, primarily related to higher average outstanding borrowings coupled with higher interest rates on the 2025 Credit Facilities as compared to the Company's previous credit facilities (the "2022 Credit Facilities"), which were replaced by the 2025 Credit Facilities.
  • Income Tax Provision Income tax expense for the year ended December 31, 2025 was $14.3 million, reflecting a 26.9% effective tax rate, compared to $9.8 million for the year ended December 31, 2024, reflecting a 70.5% effective tax rate.
  • The items having the most significant impact on the effective tax rate for 2025 are the effects of state and foreign items, partially offset by a net benefit of $3.7 million for research and development tax credits.
  • The item having the most significant impact on the effective tax rate for 2024 is a net benefit of $3.3 million for research and development tax credits.
  • Backlog Backlog represents the dollar value of firm orders for equipment, parts and related installation which are expected to be recognized in net sales in the future.

and 311 more.

Gone since FY2024

  • Risk Factors Table of Content s for a discussion of uncertainties and assumptions that may cause actual results to differ materially from those expressed or implied in the forward-looking statements.
  • This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
  • A similar discussion of 2022 items and year-to-year comparisons between 2023 and 2022 can be found in Part II, Item 7.
  • Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023 .
  • Executive Summary Highlights of our financial results as of and for the year ended December 31, 2024 as compared to the prior year include the following: • Net sales were $1,305.1 million, a decrease of 2.5% • Gross profit was $327.9 million, a decrease of 0.9% • Income from operations was $23.2 million, a decrease of 52.3% • Net income attributable to Astec was $4.3 million, a decrease of 87.2% • Diluted income per share was $0.19, a decrease of 87.1% • Backlog was $419.6 million, a decrease of 26.4% Significant Items Impacting Financial Results in 2024 Strategic Transformation Program Our strategic transformation program includes the ongoing multi-year phased implementation of a standardized enterprise resource planning ("ERP") system, which is replacing much of our existing disparate core financial systems.
  • During 2024, we modified the pace of deployment of future site conversions to improve efficiencies and reduce business disruptions at our manufacturing sites, which will reduce the scope of the program to exclude sites outside North America.
  • To date, we have launched the human capital resources module in our U.S. locations and converted the operations of three manufacturing sites along with Corporate, two of which occurred during the second quarter of 2024.
  • Through the year ended December 31, 2024, we have incurred total implementation costs of approximately $133 million.
  • In addition, a lean manufacturing initiative at one of our largest sites was largely completed during 2023 with certain capital investments finalized in early 2024.
  • These investments, along with the other elements of the initiative, are expected to drive improvement in gross margin at that site in the second half of 2025.
  • Table of Content s See Note 21, Strategic Transformation and Restructuring, Impairment and Other Asset Charges, net of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional discussion of the costs related to these strategic initiatives.
  • Goodwill Impairment During the second quarter of 2024, we identified that indicators of goodwill impairment were present due to macroeconomic conditions, including declines in our publicly quoted share price and increased interest rates, as well as lower than expected operating results.
  • These factors indicated that one or more of our reporting units may have fallen below their carrying amounts.
  • We performed a qualitative assessment on all reporting units and concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.
  • Based on the quantitative impairment test, we determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024.
  • As a result, we recognized a pretax non-cash goodwill impairment charge of $20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.
  • VenVer Litigation In October 2024, we reached an agreement to resolve the action styled VenVer S.A. and Americas Coil Tubing LLP v.
  • In connection with the settlement, we recorded a loss of $8.4 million in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations.
  • See Note 16, Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion of this matter. 37 BP Litigation In September 2024, we reached an agreement to resolve the matter styled 37 Building Products, Ltd. v.
  • Telsmith, Inc., et al. for $6.3 million, which we paid in September 2024 (the "37 BP Litigation").
  • Upon settlement, the full loss contingency of $8.2 million, inclusive of post-judgment interest, that was recorded as of June 30, 2024 was released.
  • The $ 1.9 million net impact of the loss contingency release and the final settlement amount was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the third quarter of 2024.
  • See Note 16, Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for further discussion of this matter.
  • 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 Chile ("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 and has moved to the Infrastructure Solutions segment.
  • Prior periods have been revised to reflect the changes to the segment composition for comparability.
  • Liquid asphalt is a by-product of oil refining.
  • An increase or decrease in the price of oil impacts the cost of asphalt, which is likely to alter demand for asphalt and therefore affect demand for certain of our products.
  • While increasing oil prices may have a negative financial impact on many of our customers, our equipment can use a significant amount of reclaimed asphalt Table of Content s pavement, thereby partially mitigating the effect of increased oil prices on the final cost of asphalt for the customer.
  • While oil prices had declined from the peak prices in 2022, throughout 2024 they remained relatively stable.
  • Oil prices have routinely fluctuated in recent years and are expected to continue to fluctuate in the future.
  • Based on the current macroeconomic environment, we anticipate that oil prices will experience moderate fluctuation throughout 2025.
  • Throughout 2024, steel prices eased from the historically high levels experienced in 2022 and 2023.
  • We anticipate that steel prices will increase during 2025, including as a result of the tariffs on all steel imports recently imposed by the Trump administration and other trade policies implemented by the U.S. and foreign governments.
  • We anticipate that steel demand will increase in 2025 driven by a global focus on construction projects.
  • Furthermore, given the volatility of steel prices and the nature of our customers' orders, we may not be able to pass through all increases in steel costs to our customers, which negatively impacts our gross profit and margins.
  • Results of Operations: 2024 vs. 2023 Net Sales Net sales decreased $33.1 million, or 2.5%, to $1,305.1 million in 2024 from $1,338.2 million in 2023.
  • The decrease in net sales was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreases in equipment sales of $21.8 million and service and equipment installation revenue of $21.1 million.

and 357 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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