Astec Industries, Inc. announced on Wednesday its financial results for the third quarter ended Sept. 30.
"In the third quarter, we had mixed results," said Jaco van der Merwe, chief executive officer. "In Infrastructure Solutions, both sales and margins were up for the quarter, while in Materials Solutions, we continued to face difficult market conditions. We made nice progress improving our cash flow in the third quarter, which continues to be a key focal point. We were also able to settle one of our previously disclosed, long-standing, legacy litigation matters related to a product we no longer own, which resulted in an $8.4 million charge in the third quarter.
"With sound fundamentals in place, we continue to focus on commercial and operational excellence. We have a customer-focused approach and product offerings to drive sustainable value creation for our shareholders."
Segments Results
The company's 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, the Australia and LatAm sites, which were previously reported in the Infrastructure Solutions segment have moved to the Materials Solutions segment and Astec Digital, which was previously included in the Corporate and Other category has moved to the Infrastructure Solutions segment, each beginning Jan. 1, 2024. Prior periods have been revised to reflect the changes for the segment composition for comparability.
Infrastructure Solutions - Road building equipment, asphalt and concrete plants, thermal storage solutions and related aftermarket parts.
Net sales of $165.0 million increased slightly as the infrastructure construction market remains strong with healthy demand for asphalt and concrete plant deliveries anticipated through the beginning of 2025.
Segment Operating Adjusted EBITDA of $15.6 million increased 17.3 percent and Segment Operating Adjusted EBITDA margin of 9.5 percent increased 140 basis points.
Backlog was $351.1 million.
Materials Solutions - Processing equipment to crush, screen and convey aggregates and related aftermarket parts.
Net sales of $126.4 million decreased by 9.6 percent primarily due to lower equipment sales attributable to finance capacity constraints with contractors and dealers resulting in fewer product conversions. Dealer quoting remains active.
Segment Operating Adjusted EBITDA of $14.5 million increased 52.6 percent and Segment Operating Adjusted EBITDA margin of 11.5 percent increased 470 basis points, due to a $6.4 million legal charge in the prior year third quarter, continued efforts towards cost reduction and sharing facility capacity with the Infrastructure Solutions segment.
Backlog was $124.7 million.
Balance Sheet, Cash Flow and Liquidity
The total liquidity was $195.1 million, consisting of $52.7 million of cash and cash equivalents available for operating purposes and $142.4 million available for additional borrowings under the revolving credit facility.
Free Cash Flow in the quarter was $19.9 million after incurring capital expenditures of $2.6 million.
Third Quarter Capital Allocation
Dividend payment of $0.13 per share.