ASTEC INDUSTRIES INC

Previous wording

•Income from operations was $23.2 million, a decrease of 52.3%

Current wording

•Income from operations was $65.9 million, an increase of 184.1%

Previous wording

•Net income attributable to Astec was $4.3 million, a decrease of 87.2%

Current wording

•Net income attributable to Astec was $38.8 million, an increase of 802.3%

Previous wording

•Diluted income per share was $0.19, a decrease of 87.1%

Current wording

•Diluted income per share was $1.68, an increase of 784.2%

Previous wording

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 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.

Current wording

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").

Previous wording

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. We expect the project to conclude in 2028 or 2029 with total approximate implementation costs anticipated to range from $180 to $200 million. Through the year ended December 31, 2024, we have incurred total implementation costs of approximately $133 million.

Current wording

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. We expect the project to conclude in 2028 or 2029 with total approximate implementation costs anticipated to range from $180 to $200 million. Through the year ended December 31, 2025, we have incurred total implementation costs of approximately $151 million.

Previous wording

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.

Current wording

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.

Previous wording

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. Liquid asphalt is a by-product of oil refining. An increase or decrease in the price of oil impacts the cost of asphalt, which is likely to alter demand for asphalt and therefore affect demand for certain of our products. While increasing oil prices may have a negative financial impact on many of our customers, our equipment can use a significant amount of reclaimed asphalt pavement, thereby partially mitigating the effect of increased oil prices on the final cost of asphalt for the customer. We continue to develop products and initiatives to reduce the amount of oil and related products required to produce asphalt. While oil prices had declined from the peak prices in 2022, throughout 2024 they remained relatively stable. 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 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.

Current wording

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. 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. We continue to develop products and initiatives to reduce the amount of oil and related products required to produce asphalt. 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 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.

Previous wording

Steel is a major component of our equipment. 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. We continue to employ flexible strategies to ensure supply and minimize the impact of price volatility. Potential ongoing constraints in the supply of certain steel products may continue pressuring 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 to pass through all increases in steel costs to our customers, which negatively impacts our gross profit and margins.

Current wording

Steel is a major component of our equipment. 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. We continue to employ flexible strategies to ensure supply and minimize the impact of price volatility. Potential ongoing constraints in the supply of certain steel products may continue pressuring 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 to pass through all increases in steel costs to our customers, which may negatively impact our gross profit and margins.

Previous wording

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. These decreases were partially offset by increased parts and component sales of $7.5 million and increased other revenue of $4.0 million. Sales reported by our foreign subsidiaries in U.S. dollars for 2024 would have been $2.8 million higher had foreign exchange rates been the same as the 2023 rates.

Current wording

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.

Previous wording

Consolidated gross profit for 2024 was $327.9 million, or 25.1% of net sales, as compared to $330.8 million, or 24.7% of net sales, in 2023, a decrease of $2.9 million, or 0.9%. The decrease was primarily driven by (i) manufacturing inefficiencies of $22.0 million, (ii) the impact of inflation on materials, labor and overhead of $10.0 million and (iii) increased net scrap expenses of $2.6 million. These decreases were partially offset by favorable pricing net of unfavorable volume and mix that generated $32.6 million higher gross profit.

Current wording

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.

Previous wording

Selling, general and administrative expenses for 2024 were $276.1 million, or 21.2% of net sales, compared to $276.4 million, or 20.7% of net sales, for 2023, a decrease of $0.3 million, or 0.1%, primarily due to (i) the loss contingency related to the 37 BP Litigation, of which $7.9 million was recorded in 2023 as compared to the $1.9 million benefit derived from the loss contingency release offset by the final settlement amount recorded during 2024, (ii) decreased employee incentive compensation costs of $5.0 million, (iii) decreased exhibit and promotional costs of $1.4 million, (iv) decreased depreciation and amortization expense of $1.4 million and (v) decreased bad debt expense of $1.0 million. These decreases were partially offset by (i) increased personnel-related costs of $9.4 million, which includes 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 Chief Executive Officer ("CEO") and the limited overhead restructuring action implemented in February 2023 of $2.6 million, (ii) higher technology support costs and certain professional services of $7.7 million and (iii) increased costs related to our strategic transformation program of $3.6 million.

Current wording

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.

Previous wording

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 during the second quarter of 2024. No net goodwill related to Materials Solutions is reflected in the Consolidated Balance Sheet as of December 31, 2024. See Note 7, Goodwill 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 pretax non-cash goodwill impairment charge.

Current wording

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. 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 during the second quarter of 2024. No net goodwill related to Materials Solutions is reflected in the Consolidated Balance Sheet as of December 31, 2024. See Note 7, Goodwill 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 pretax non-cash goodwill impairment charge.

Previous wording

Restructuring, impairment and other asset charges, net for the years ended December 31, 2024 and 2023 are presented below:

Current wording

Restructuring, impairment and other asset (gains) charges, net for the years ended December 31, 2025 and 2024 are presented below:

Previous wording

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 discussion of the individual restructuring actions taken and the impairment charges recorded.

Current wording

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.

Previous wording

Interest expense of $10.7 million was incurred for the year ended December 31, 2024 as compared to $8.9 million for the year ended December 31, 2023, an increase of $1.8 million, primarily related to higher average outstanding borrowings on our revolving credit facility.

Current wording

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.

Previous wording

Income tax expense for the year ended December 31, 2024 was $9.8 million, reflecting a 70.5% effective tax rate, compared to $9.1 million for the year ended December 31, 2023, reflecting a 21.3% effective tax rate. Our effective tax rates are affected by recurring items which are generally consistent from period to period, as well as discrete items that may occur but are not consistent from period to period.

Current wording

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. Our effective tax rates are affected by recurring items which are generally consistent from period to period, as well as discrete items that may occur but are not consistent from period to period.

Previous wording

The items having the most significant impact on the effective tax rate for 2024 are the out-of-period expense associated with the correction of under-accruals of state income tax expenses recorded in the fourth quarter of 2024 and a net nondeductible goodwill impairment of $2.9 million partially offset by a net benefit of $3.3 million for research and development tax credits. The item having the most significant impact on the effective tax rate for 2023 is a net benefit of $1.8 million for research and development tax credits. Future utilization of our NOLs and state tax credit carryforwards is evaluated on a periodic basis, and the valuation allowance is adjusted accordingly. There is no guarantee that we will not incur additional valuation allowances to our NOLs.

Current wording

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. Future utilization of our NOLs and state tax credit carryforwards is evaluated on a periodic basis, and the valuation allowance is adjusted accordingly. There is no guarantee that we will not incur additional valuation allowances to our NOLs.

Previous wording

The backlog of orders as of December 31, 2024 was $419.6 million compared to $569.8 million as of December 31, 2023, a decrease of $150.2 million, or 26.4%.

Current wording

The backlog of orders as of December 31, 2025 was $514.1 million compared to $419.6 million as of December 31, 2024, an increase of $94.5 million, or 22.5%.

Previous wording

Our shorter production lead times and parts fill rates have allowed for customers to place orders closer to the desired delivery date. Additionally, we have experienced variability in the ordering patterns from our dealer customers, most notably in the Materials Solutions segment, as a result of macroeconomic factors such as higher inflation and elevated interest rates, among other factors. These factors have influenced customer ordering patterns and are expected to continue, albeit in a less impactful manner.

Current wording

Backlog includes an incremental $53.2 million from the acquired TerraSource business in the Materials Solutions segment. Our shorter production lead times and parts fill rates have allowed for customers to place orders closer to the desired delivery date. Additionally, we have experienced variability in the ordering patterns from our customers as a result of macroeconomic factors.

Previous wording

Sales in this segment were $467.7 million for 2024 compared to $537.8 million for 2023, a decrease of $70.1 million, or 13.0%. The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased equipment sales of $73.7 million. These decreases were partially offset by increased other revenue of $3.7 million.

Current wording

Sales in this segment were $857.4 million for 2025 compared to $837.4 million for 2024, an increase of $20.0 million, or 2.4%. The increase was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated increases in (i) parts and component sales of $6.7 million, (ii) equipment sales of $6.3 million, (iii) service and equipment installation revenue of $4.7 million and (iv) freight revenue of $3.2 million.

Previous wording

International sales for the Infrastructure Solutions segment increased $2.6 million, or 5.0%, for 2024 compared to 2023 primarily due to increased equipment sales of $2.2 million.

Current wording

International sales for the Infrastructure Solutions segment increased $2.6 million, or 4.8%, for 2025 compared to 2024 primarily due to increased equipment sales of $6.5 million partially offset by decreased parts and component sales of $4.0 million.

Previous wording

Sales in this segment were $837.4 million for 2024 compared to $800.4 million for 2023, an increase of $37.0 million, or 4.6%. The increase was primarily driven by favorable pricing coupled with net favorable volume and mix that generated increased new equipment sales and parts and component sales of $51.9 million and $5.4 million, respectively. These increases were partially offset by lower service and equipment installation revenue of $20.4 million.

Current wording

Sales in this segment were $553.0 million for 2025 compared to $467.7 million for 2024, an increase of $85.3 million, or 18.2%. The increase was primarily driven by net favorable volume and mix coupled with favorable pricing that generated increases in (i) equipment sales of $38.3 million, (ii) parts and component sales of $37.8 million and (iii) service and equipment installation revenue of $8.1 million.

Previous wording

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $121.5 million for 2024 compared to $102.4 million for 2023, an increase of $19.1 million, or 18.7%. The increase in Segment Operating Adjusted EBITDA resulted primarily from (i) the impact of favorable pricing coupled with net favorable volume and mix that generated $38.9 million higher gross profit, (ii) decreases in annual incentive compensation costs of $1.8 million, (iii) the net franchise tax expense of $1.7 million and (iv) decreases in property maintenance costs of $1.1 million. These increases to Segment Operating Adjusted EBITDA were partially offset by (i) manufacturing inefficiencies of $12.5 million, (ii) the impact of higher inflation on materials, labor and overhead costs of $6.9 million, (iii) increased IT and professional services costs of $5.1 million and (iv) increased selling, general and administrative personnel-related costs of $2.6 million.

Current wording

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $134.3 million for 2025 compared to $121.5 million for 2024, an increase of $12.8 million, or 10.5%. The increase in Segment Operating Adjusted EBITDA resulted primarily from the impact of favorable pricing coupled with net favorable volume and mix that generated $35.5 million higher gross profit. These increases in Segment Operating Adjusted EBITDA were partially offset by (i) increases in personnel-related costs of $10.5 million, (ii) higher quality-related costs of $5.9 million, (iii) net unfavorable inventory adjustments of $4.9 million and (iv) manufacturing inefficiencies of $4.5 million.

Previous wording

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 and cash flows from operations. As of December 31, 2024, our total liquidity was $228.1 million, consisting of $88.3 million of cash and cash equivalents available for operating purposes and $139.8 million available for additional borrowings under our revolving credit facility, to the extent our compliance with financial covenants permits such borrowings. Our foreign subsidiaries held $31.6 million of cash and cash equivalents available for operating purposes which is considered to be indefinitely invested in those jurisdictions.

Current wording

Our primary sources of liquidity and capital resources are cash and cash equivalents on hand, borrowing capacity under our credit facilities and cash flows from operations. As of December 31, 2025, our total liquidity was $314.7 million, consisting of $70.0 million of cash and cash equivalents available for operating purposes and $244.7 million available for additional borrowings under our revolving credit facility, to the extent our compliance with financial covenants permits such borrowings. Our foreign subsidiaries held $38.8 million of cash and cash equivalents available for operating purposes which is considered to be indefinitely invested in those jurisdictions.

Previous wording

Our future cash requirements primarily include working capital needs, debt service obligations, capital expenditures, 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, our strategic transformation initiatives, strategic acquisitions and share repurchases under our share repurchase authorization. We believe that our current working capital, cash flows generated from future operations and available capacity under our revolving credit facility will be sufficient to meet working capital and capital expenditure requirements for our existing business for at least the next 12 months.

Current wording

Our future cash requirements primarily include working capital needs, debt service obligations, capital expenditures, vendor hosted software arrangements including the related implementation costs, unrecognized tax benefits and operating lease payments. In addition, our variable cash uses may include transformation initiatives, strategic acquisitions, dividend payments and share repurchases under our share repurchase authorization. We believe that our current working capital, cash flows generated from future operations and available capacity under the revolving credit facility will be sufficient to meet working capital and capital expenditure requirements for our existing business for at least the next 12 months.

Previous wording

We had $105.0 million and $72.0 million in outstanding borrowings under the Credit Facilities as of December 31, 2024 and 2023, respectively. Our outstanding letters of credit totaling $5.2 million decreased borrowing availability to $139.8 million under the revolving credit facility as of December 31, 2024. We anticipate continuing to utilize the Credit Facilities with more frequency in the near-term to support our 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 all covenants of the Credit Facilities as of December 31, 2024. Due to the increased borrowings under our Credit Facilities and higher interest rates, we expect our interest expense in the near-term to remain at elevated levels.

Current wording

We had outstanding principal indebtedness on the term loan facility of $341.3 million and no outstanding borrowings under the revolving credit facility as of December 31, 2025. Our outstanding letters of credit totaling $5.3 million decreased borrowing availability to $244.7 million under the revolving credit facility as of December 31, 2025. The 2025 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 all covenants of the Credit Facilities as of December 31, 2025. Due to the increased borrowings under our 2025 Credit Facilities, we expect our interest expense to remain at elevated levels.

Previous wording

We regularly enter into agreements primarily to purchase inventory in the ordinary course of business. As of December 31, 2024, open purchase obligations totaled $122.0 million, of which $120.6 million are expected to be fulfilled within one year.

Current wording

We regularly enter into agreements, primarily to purchase inventory, in the ordinary course of business. As of December 31, 2025, open purchase obligations totaled $119.4 million, of which $115.0 million are expected to be fulfilled within one year.

Previous wording

We estimate that our capital expenditures will be between $35 and $45 million for the year ending December 31, 2025, which may be impacted by general economic, financial or operational changes and competitive, legislative and regulatory factors, among other considerations.

Current wording

We estimate that our capital expenditures will be between $40.0 million and $50.0 million for the year ending December 31, 2026, which may be impacted by general economic, financial or operational changes and competitive, legislative and regulatory factors, among other considerations.

Previous wording

Net cash provided by operating activities decreased to $23.0 million during 2024 as compared to $27.8 million during 2023. This decrease is primarily due to decreased cash inflows from net income reduced by non-cash charges of $6.9 million partially offset by decreased net cash usages from our operating assets and liabilities of $1.4 million. The decreased net cash usages for our operating assets and liabilities were primarily driven by the timing of inventory purchases in 2024 of $90.4 million and reduced other assets of $11.9 million. These decreases were partially offset by (i) the timing of payments on trade accounts payables of

Current wording

Net cash provided by operating activities increased to $61.4 million during 2025 as compared to $23.0 million during 2024. This increase is primarily due to increased cash inflows from net income adjusted by non-cash items of $49.5 million partially offset by higher net cash usages for our operating assets and liabilities of $11.1 million. The increased net cash usage for our operating assets and liabilities was mainly driven by fluctuations in (i) customer deposits of $20.3 million, (ii) inventories of $15.6 million and (iii) prepaid and refundable income taxes of $14.6 million. The increased net cash usage for our operating assets and liabilities was partially offset by the timing impacts of payments of trade accounts payables of $33.8 million and lower employee-related payments of $15.1 million.

Previous wording

Our current assets increased to $722.8 million as of December 31, 2024 from $719.5 million as of December 31, 2023, an increase of $3.3 million, or 0.5%, due primarily to increased cash, cash equivalents and restricted cash and trade and other net receivables and contract assets of $27.6 million and $14.5 million, respectively. These increases were partially offset by decreased inventories and prepaid and refundable income taxes of $32.9 million and $5.3 million, respectively. Accounts receivable days outstanding decreased from 40.7 in 2023 to 40.3 in 2024.

Current wording

Our total current assets increased to $816.6 million as of December 31, 2025 from $722.8 million as of December 31, 2024, an increase of $93.8 million, or 13.0%, due primarily to increases in (i) trade and other receivables of $51.5 million, (ii) inventories of $43.3 million, (iii) prepaid expenses and other assets of $13.0 million and (iv) prepaid and refundable income taxes of $5.7 million. These increases were partially offset by a decrease in cash, cash equivalents and restricted cash of $18.8 million. Accounts receivable days outstanding increased from 40.3 in 2024 to 47.8 in 2025.

Previous wording

Inventory Valuation - Inventories are valued at the lower of first-in, first-out cost or net realizable value. The most significant component of our inventories is steel. Open market prices are subject to volatility and determine our cost of steel. During periods when open market prices decline, we may need to reduce the carrying value of the inventory. In addition, certain items in inventory become obsolete over time, and we reduce the carrying value of these items to their net realizable value. These reductions are determined based on estimates, assumptions and judgments made from the information available at that time. We do not believe it is reasonably likely that the inventory values will materially change in the near future.

Current wording

Inventory Valuation - Inventories are valued at the lower of first-in, first-out cost or net realizable value. The most significant component of our inventories is steel. Open market prices are subject to volatility and determine our cost of steel. During periods when open market prices decline, we may need to reduce the carrying value of the inventory. In addition, certain items in inventory become obsolete over time, and we reduce the carrying value of these items to their net realizable value. These reductions are determined based on estimates, assumptions and judgments made from the information available at that time. We do not believe it is reasonably likely that the inventory values will materially change in the near future due to changes in these estimates.

Previous wording

Goodwill and Other Intangible Assets Impairment- Goodwill is tested for impairment annually on October 1, or more frequently, if events or circumstances indicate that the carrying amount of the asset may not be recoverable. Goodwill is allocated to, and evaluated for impairment at, two identified reporting units.

Current wording

Goodwill and Other Intangible Assets Impairment- Goodwill is tested for impairment annually on October 1, or more frequently, if events or circumstances indicate that the carrying amount of the asset may not be recoverable. Goodwill is allocated to, and evaluated for impairment at, three identified reporting units.

Previous wording

We performed a subsequent qualitative analysis as of October 1, 2024 on our reporting units whereby the fair values of each reporting unit exceeded its carrying value and therefore no indicators of additional impairment existed. As of December 31, 2024 and 2023 the net carrying amount of goodwill was $25.0 million and $46.3 million, respectively. No goodwill impairment charges were recognized in 2023 or 2022.

Current wording

We performed a qualitative analysis as of October 1, 2025 on our reporting units whereby no indicators of impairment existed. As of December 31, 2025 and 2024 the net carrying amount of goodwill was $111.8 million and $25.0 million, respectively. No goodwill impairment charges were recognized in 2025 or 2023. A goodwill impairment charge of $20.2 million was recognized in 2024.