ASTEC INDUSTRIES INC

Previous wording

•Income from operations was $1.1 million, an increase of 115.3%

Current wording

•Income from operations was $9.0 million, a decrease of 56.1%

Previous wording

Strategic Transformation Program –Our strategic transformation program includes the ongoing multi-year phased implementation of a standardized 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. 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

Current wording

Strategic Transformation Program –Our strategic transformation program includes the ongoing multi-year phased implementation of a standardized ERP system, which is replacing much of our existing disparate core financial systems. To date, we have launched the human capital resources module worldwide 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 first quarter of 2026, we have incurred total implementation costs of approximately $154 million.

Previous wording

See Note 13, Strategic Transformation, Restructuring and Other Asset Gains, net of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional discussion of the costs related to these strategic initiatives.

Current wording

See Note 11, Strategic Transformation and Other Operating Gains, net of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional discussion of the costs related to these strategic initiatives.

Previous wording

Additionally, significant portions of our revenues from the Infrastructure Solutions segment relate to the sale of equipment involved in the production, handling, recycling or application of asphalt mix. Liquid asphalt is a by-product of oil refining, 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. 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 the remainder of 2025 and into 2026.

Current wording

Additionally, significant portions of our revenues from the Infrastructure Solutions segment relate to the sale of equipment involved in the production, handling, recycling or application of asphalt mix. Liquid asphalt is a by-product of oil refining, 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. Oil prices have routinely fluctuated in recent years and have experienced a significant rise in the first quarter of 2026 due to the conflict in the Middle East. We anticipate that these high prices will persist in the short term.

Previous wording

Net sales for the third quarter of 2025 were $350.1 million compared to $291.4 million for the third quarter of 2024, an increase of $58.7 million, or 20.1%. The increase in net sales was primarily driven by favorable pricing coupled with net favorable volume and mix that generated increases in (i) parts and component sales of $26.8 million, (ii) equipment sales of $24.7 million, (iii) service and equipment installation revenue of $5.1 million and (iv) freight revenue of $2.1 million. Included in these net increases is $40.5 million of incremental net sales from the acquired TerraSource business. Sales reported by our foreign subsidiaries in U.S. dollars for the third quarter of 2025 would have been $1.0 million lower had third quarter 2025 foreign exchange rates been the same as third quarter 2024 rates.

Current wording

Net sales for the first quarter of 2026 were $396.3 million compared to $329.4 million for the first quarter of 2025, an increase of $66.9 million, or 20.3%. The increase in net sales was primarily driven by net favorable volume and mix coupled with favorable pricing from both organic and inorganic contributions that generated increases in (i) equipment sales of $42.9 million, (ii) parts and component sales of $20.0 million and (iii) service and equipment installation revenue of $4.0 million. These increases were partially offset by decreased other revenues of $1.0 million. Sales reported by our foreign subsidiaries in U.S. dollars for the first quarter of 2026 would have been $4.5 million lower had foreign exchange rates been the same as 2025 rates.

Previous wording

Gross profit for the first nine months of 2025 was $264.9 million, or 26.2% of net sales, as compared to $225.0 million, or 23.8% of net sales, for the first nine months of 2024, an increase of $39.9 million, or 17.7%. The increase in gross profit was primarily driven by the impact of favorable pricing coupled with net favorable volume and mix of $59.8 million and the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $3.3 million. These increases were partially offset by (i) manufacturing inefficiencies of $8.9 million, (ii) higher warranty program costs of $5.3 million, (iii) amortization of acquisition-related inventory fair value step-up of $4.3 million and (iv) net unfavorable inventory adjustments of $2.8 million.

Current wording

Gross profit for the first quarter of 2026 was $99.1 million, or 25.0% of net sales, as compared to $92.4 million, or 28.1% of net sales, for the first quarter of 2025, an increase of $6.7 million or 7.3%. The increase in gross profit was primarily driven by (i) the impact of net favorable volume and mix coupled with favorable pricing of $25.3 million, (ii) lower warranty program costs of $3.2 million and (iii) net favorable inventory adjustments of $1.6 million. These increases were partially offset by (i) the impacts of manufacturing variances partially due to freight, duties and tariffs of $16.1 million, (ii) the impact of inflation on materials, labor and overhead of $6.2 million and (iii) the amortization of acquisition-related inventory fair value step-up of $1.4 million.

Previous wording

Selling, general and administrative expenses were $222.2 million, or 22.0% of net sales, for the first nine months of 2025, compared to $208.1 million, or 22.0% of net sales, for the first nine months of 2024, an increase of $14.1 million, or 6.8%, primarily due to (i) increased personnel-related costs of $16.9 million, partially driven by $5.9 million of employee incentive compensation costs, (ii) increased transaction costs of $6.1 million primarily attributable to the Acquisition and (iii) increased intangible asset amortization expense of $4.2 million. These increases were partially offset by lower costs related to our strategic transformation program of $10.4 million and decreased professional service costs of $2.8 million.

Current wording

Selling, general and administrative expenses were $90.2 million, or 22.8% of net sales, for the first quarter of 2026, compared to $71.9 million, or 21.8% of net sales, for the first quarter of 2025, an increase of $18.3 million, or 25.5%, primarily due to (i) increased personnel-related costs of $7.8 million, (ii) increased intangible asset amortization expense of $7.2 million, (iii) increased exhibit and promotional costs of $3.0 million primarily due to the ConExpo industry trade show held once every three years, (iv) increased travel expense of $1.1 million and (v) increased acquisition and integration costs of $0.7 million. These increases were partially offset by lower costs related to our strategic transformation program of $3.1 million.

Previous wording

Interest expense of $7.3 million and $11.4 million was incurred in the three and nine months ended September 30, 2025, respectively, as compared to $2.6 million and $8.4 million in the three and nine months ended September 30, 2024, respectively, primarily related to higher average outstanding borrowings coupled with higher interest rates on the 2025 Credit Facility as compared to the previous 2022 Credit Facility.

Current wording

Interest expense of $7.4 million was incurred in the three months ended March 31, 2026, as compared to $2.0 million in the three months ended March 31, 2025, primarily related to higher average outstanding borrowings coupled with higher interest rates on the 2025 Credit Facilities as compared to our previous credit facilities, which were replaced by the 2025 Credit Facilities.

Previous wording

Our income tax benefit for the third quarter of 2025 was $0.9 million compared to $2.3 million for the third quarter of 2024. Our effective income tax rate was 17.6% for the third quarter of 2025 compared to 27.1% for the third quarter of 2024. The income tax benefit for the three months ended September 30, 2025 was lower compared to the same period in 2024 primarily due to lower pretax book loss and changes in the relative weighting of jurisdictional income and loss.

Current wording

Our income tax expense for the first quarter of 2026 was $1.5 million compared to $5.4 million for the first quarter of 2025. Our effective income tax rate was 53.6% for the first quarter of 2026 compared to 27.4% for the first quarter of 2025. The income tax expense for three months ended March 31, 2026 was lower compared to the same period in 2025, primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss.

Previous wording

International sales for the Infrastructure Solutions segment increased $3.1 million, or 8.0%, for the first nine months of 2025 compared to the same period in 2024 primarily due to higher equipment sales of $6.3 million partially offset by lower parts and component sales of $3.4 million.

Current wording

International sales for the Infrastructure Solutions segment increased $2.2 million, or 15.4%, for the first quarter of 2026 compared to the same period in 2025, primarily due to higher equipment sales of $3.1 million partially offset by lower parts and component sales of $0.8 million.

Previous wording

Domestic sales for the Materials Solutions segment increased by $47.6 million, or 26.9%, for the first nine months of 2025 compared to the same period in 2024, primarily due to higher (i) equipment sales of $29.6 million, (ii) parts and component sale of $15.0 million and (iii) service and installation revenue of $3.0 million.

Current wording

Domestic sales for the Materials Solutions segment increased by $46.4 million, or 89.1%, for the first quarter of 2026 compared to the same period in 2025, primarily due to higher (i) equipment sales of $28.0 million, (ii) service and installation revenue of $15.6 million, (iii) used equipment sales of $2.7 million and (iv) freight revenue of $1.2 million. These increases were partially offset by lower other revenue of $0.9 million.

Previous wording

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by our CEO, who is the CODM, to evaluate performance and allocate resources to the reportable segments. Segment Operating Adjusted EBITDA is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance. See Note 12, Operations by Industry Segment and Geographic Area, of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of Segment Operating Adjusted EBITDA to total consolidated income before taxes.

Current wording

Segment Operating Adjusted EBITDA is the measure of segment profit or loss used by the CEO, who is the CODM, to evaluate performance and allocate resources to the reportable segments. Segment Operating Adjusted EBITDA is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance. See Note 10, Operations by Industry Segment and Geographic Area, of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a reconciliation of Segment Operating Adjusted EBITDA to total consolidated income before income taxes.

Previous wording

Corporate and Other operations, which are not an operating segment or included in one of the other reportable segments, had net expenses of $12.2 million for the third quarter of 2025 compared to $12.7 million for the same period in 2024, a decrease of $0.5 million, or 3.9%. The decrease in expenses was primarily driven by lower personnel-related costs of $1.3 million.

Current wording

Corporate and Other operations, which are not an operating segment or included in one of the other reportable segments, had net expenses of $13.4 million for the first quarter of 2026 compared to $12.9 million for the same period in 2025, an increase of $0.5 million, or 3.9%.

Previous 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 September 30, 2025, our total liquidity was $312.1 million, consisting of $67.3 million of cash and cash equivalents available for operating purposes and $244.8 million available for additional borrowings under the revolving credit facility, to the extent our compliance with financial covenants permits such borrowings. Our

Current wording

Our primary sources of liquidity and capital resources are cash and cash equivalents on hand, borrowing capacity under our 2025 Credit Facilities and cash flows from operations. As of March 31, 2026, our total liquidity was $267.5 million, consisting of $73.4 million of cash and cash equivalents available for operating purposes and $194.1 million available for additional borrowings under the 2025 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 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.

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 2025 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

On July 1, 2025, we entered into the 2025 Credit Agreement 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. We had outstanding principal indebtedness on the term loan facility of $345.6 million and no outstanding borrowings under the revolving credit facility and as of September 30, 2025. Our outstanding letters of credit totaling $5.2 million decreased borrowing availability to $244.8 million under the revolving credit facility as of September 30, 2025.

Current wording

On July 1, 2025, we entered into the 2025 Credit Agreement that provides for (i) the 2025 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. We had outstanding principal indebtedness on the term loan facility of $336.9 million and $50.0 million outstanding borrowings under the 2025 Revolving Credit Facility as of March 31, 2026. Our outstanding letters of credit totaling $5.9 million decreased borrowing availability to $194.1 million under the 2025 Revolving Credit Facility as of March 31, 2026.

Previous wording

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

Current wording

Certain of our international subsidiaries in Australia, Brazil, Canada, South Africa and the United Kingdom each have separate credit facilities with local financial institutions primarily to finance short-term working capital needs, as well as to cover foreign exchange contracts, performance letters of credit, advance payment and retention guarantees. The outstanding borrowings under such credit facilities of the international subsidiaries are recorded in "Short-term debt" in our Consolidated Balance Sheets. Each of these credit facilities is generally guaranteed by Astec Industries, Inc. and/or secured with certain assets of the local subsidiary.

Previous wording

We regularly enter into agreements, primarily to purchase inventory, in the ordinary course of business. As of September 30, 2025, open purchase obligations totaled $118.7 million, of which $92.7 million are expected to be fulfilled within the remainder of 2025.

Current wording

We regularly enter into agreements, primarily to purchase inventory, in the ordinary course of business. As of March 31, 2026, open purchase obligations totaled $189.5 million, of which $186.3 million are expected to be fulfilled within the remainder of 2026.

Previous wording

We estimate that our capital expenditures will be between $25.0 million and $35.0 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

The following table summarizes cash flows during the nine months ended September 30, 2025 and 2024, respectively:

Current wording

The following table summarizes cash flows during the three months ended March 31, 2026 and 2025, respectively:

Previous wording

Our operating activities provided net cash of $25.3 million for the nine months ended September 30, 2025 as compared to a net use of $13.6 million for the nine months ended September 30, 2024. This increase is primarily due to increased cash inflows from net income reduced by non-cash charges of $47.4 million partially offset by higher net cash usages for our operating assets and liabilities of $8.4 million. The increased net cash usage for our operating assets and liabilities was mainly driven by decreased customer deposits of $32.2 million associated with lower backlog and the timing impacts for accrued liabilities of $27.8 million. The increased net cash usage was partially offset by the timing impacts of (i) payments of trade accounts payables of $27.4 million, (ii) collections on trade and other receivables of $21.4 million and (iii) lower employee-related payments of $14.2 million.

Current wording

Our operating activities provided net cash of $40.7 million for the three months ended March 31, 2026 as compared to $20.5 million for the three months ended March 31, 2025. This increase is primarily due to net cash provided by our operating assets and liabilities of $25.8 million partially offset by decreased cash inflows from net income reduced by non-cash charges of $5.6 million. The net cash provided by our operating assets and liabilities was mainly driven by fluctuations in (i) inventories of $16.5 million, (ii) trade and other receivables of $9.0 million and (iii) customer deposits of $7.4 million. The net cash provided was partially offset by fluctuations in prepaid and refundable income taxes of $4.3 million and higher employee-related payments of $3.0 million.

Previous wording

Net cash used in investing activities was $260.4 million during the nine months ended September 30, 2025 as compared to $14.0 million during the nine months ended September 30, 2024, primarily due to the TerraSource acquisition partially offset by decreased capital expenditures of $4.0 million.

Current wording

Net cash used in investing activities was $76.2 million during the three months ended March 31, 2026 as compared to $4.2 million during the three months ended March 31, 2025, primarily due to the CWMF acquisition and increased capital expenditures of $4.2 million.

Previous wording

Net cash provided by (used in) operating activities

Current wording

Net cash provided by (used in) financing activities

Previous wording

Net cash provided by financing activities was $212.4 million during the nine months ended September 30, 2025 as compared to $19.5 million during the nine months ended September 30, 2024, primarily due to higher net debt borrowings in 2025 as compared to 2024.

Current wording

Net cash provided by financing activities was $39.0 million during the three months ended March 31, 2026 as compared to a net use of $15.0 million during the three months ended March 31, 2025, primarily due to higher net debt borrowings in 2026 as compared to 2025.

Previous wording

We paid quarterly dividends of $0.13 per common share to shareholders in the third quarter of both 2025 and 2024.

Current wording

We paid quarterly dividends of $0.13 per common share to shareholders in the first quarter of both 2026 and 2025.

Previous wording

Our total current assets increased to $821.2 million as of September 30, 2025 from $722.8 million as of December 31, 2024, an increase of $98.4 million, or 13.6%, due primarily to increases in (i) inventories of $78.1 million, (ii) trade and other receivables of $25.9 million and (iii) prepaid and refundable income taxes of $11.2 million. These increases were partially offset by a decrease in cash, cash equivalents and restricted cash of $21.5 million.

Current wording

Our total current assets increased to $819.5 million as of March 31, 2026 from $816.6 million as of December 31, 2025, an increase of $2.9 million, or 0.4%, due primarily to increases in inventories and cash, cash equivalents and restricted cash of $3.8 million and $3.0 million, respectively. These increases were partially offset by a decrease in trade and other receivables of $3.1 million.

Previous wording

Our total current liabilities increased to $318.3 million as of September 30, 2025 from $271.7 million as of December 31, 2024, an increase of $46.6 million, or 17.2%, due primarily to increases in (i) current maturities of long-term debt of $16.2 million associated with our term facility, (ii) accounts payables of $15.2 million and (iii) accrued employee-related liabilities of $12.7 million.

Current wording

Our total current liabilities increased to $349.6 million as of March 31, 2026 from $328.0 million as of December 31, 2025, an increase of $21.6 million, or 6.6%, due primarily to increases in accounts payables and customer deposits of $14.7 million and $12.4 million, respectively. These increases were partially offset by decreases in accrued employee-related liabilities and accrued product warranties of $2.6 million and $2.0 million, respectively.