Astec Industries — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for Q3 2026 were $352.4 million, a 0.7% increase compared to $350.1 million in Q3 2025.
• Net loss attributable to controlling interest was $12.2 million, compared to a net loss of $4.2 million in Q3 2025.
• Adjusted net loss was $0.3 million, compared to adjusted net income of $10.8 million in Q3 2025.
• Diluted EPS was $(0.53), compared to $(0.18) in Q3 2025; Adjusted EPS was $(0.01), compared to $0.47 in Q3 2025.
• EBITDA was $11.4 million, a 17.4% decrease from $13.8 million in Q3 2025; Adjusted EBITDA was $18.9 million, a 30.3% decrease from $27.1 million in Q3 2025.
• Operating cash flow for the nine months ended September 30, 2026, was $70.2 million, compared to $25.3 million in the prior year period; Free cash flow for the nine-month period was $48.0 million, compared to $13.3 million in the prior year.
• Total liquidity was $267.2 million, consisting of $63.2 million in cash and cash equivalents and $204.0 million available under the revolving credit facility.
• Long-term debt increased to $345.2 million as of September 30, 2026, from $319.6 million as of December 31, 2025.
• The Adjusted EBITDA to net debt ratio was 2.3x, within the target range of 1.5x to 2.5x.

Guidance and Future Outlook:

• Full year 2026 Adjusted EBITDA guidance was revised downward from a range of $160 million to $175 million to a new range of $140 million to $150 million.
• Management cited ongoing macroeconomic uncertainty and inflationary headwinds as factors impacting sales, mix, absorption, and margins.
• Underlying demand rebounded in the third quarter, evidenced by a 49.2% growth in backlog.

Business Segments and Product Lines:

• Infrastructure Solutions: Net sales were $189.0 million, a 2.2% decrease year-over-year. Segment Operating Adjusted EBITDA was $15.3 million, a 36.0% decrease, with margins declining 430 basis points to 8.1% due to inflation on materials, labor, and overhead. Backlog increased 47.0% to $381.5 million. Implied orders increased sequentially by 38.0% to $281.9 million, with a book-to-bill ratio of 149%.
• Materials Solutions: Net sales were $163.4 million, a 4.1% increase year-over-year, driven by favorable pricing and volume/mix. Segment Operating Adjusted EBITDA was $13.9 million, a 9.7% decrease, with margins declining 130 basis points to 8.5% due to inflation and increased SG&A expenses. Backlog increased 52.1% to $289.0 million. Implied orders decreased sequentially by 45.3% to $139.9 million, with a book-to-bill ratio of 86%.

Market and Competitive Landscape:

• The Infrastructure Solutions segment experienced a pause in orders earlier in the year from select asphalt plant customers due to macroeconomic uncertainty.
• The delayed renewal of the U.S. federal highway bill contributed to the temporary pause in orders.
• Inflationary headwinds impacted materials, labor, and overhead costs across both segments.

Risks and Challenges:

• Macroeconomic uncertainty causing customer order pauses.
• Inflationary pressures on materials, labor, and overhead reducing margins.
• Regulatory delays, specifically the delayed renewal of the U.S. federal highway bill.

Management Commentary and Tone:

• CEO Jaco van der Merwe stated that third-quarter results were less than expected due to the aforementioned macroeconomic factors and inflation, but noted a rebound in underlying demand.
• CFO Brian Harris confirmed the revised guidance, highlighting that positive cash flow and disciplined capital allocation maintained the Adjusted EBITDA to net debt ratio within target levels.

Other Key Points:

• Capital expenditures for the quarter were $6.7 million.
• A dividend payment of $0.13 per share was made during the quarter.
• Nine-month 2026 net sales totaled $1,156.8 million, up 14.6% from $1,009.8 million in the prior year period.
• Nine-month 2026 Infrastructure Solutions sales were $654.3 million (up 3.2%), while Materials Solutions sales were $502.5 million (up 33.6%).
• Nine-month 2026 Infrastructure Solutions Adjusted EBITDA was $83.0 million (down 16.2%), while Materials Solutions Adjusted EBITDA was $44.9 million (up 28.7%).
• Nine-month 2026 Adjusted EBITDA was $91.8 million, down from $96.1 million in the prior year period.
• Acquisitions, net of cash acquired, totaled $68.2 million in the first nine months of 2026, compared to $248.5 million in the prior year period.