Astec Industries, Inc. Q1 FY2026 earnings call

• Net sales for the quarter increased 20.3% to ~$1.47 billion on a trailing 12-month basis from organic growth and inorganic contributions. - Adjusted EBITDA for the quarter was $30.3 million with a margin of 7.6%; trailing 12-month adjusted EBITDA was $136 million with a margin of 9.2%. - Generated $32.6 million of free cash flow in Q1. - Infrastructure solution segment has healthy demand for asphalt and concrete plants; forestry and mobile paving equipment markets challenging but backlog uptick. - Material solutions segment backlog increased $110 million (87%). - Q1 profitability lower than planned due to timing effects, cost pressure from tariffs, freight, sales mix, and ConExpo trade show. - Encouraged by increased backlogs in each segment and expect better quarters ahead. - Maintaining full year 2026 adjusted EBITDA guidance range of $170 million to $190 million. - Integration of acquired companies TerraSource and CWMF is well underway with completed processes like payroll, benefits, email systems, finance functions, sales territories, and ongoing product branding, cross-selling, procurement, and manufacturing optimization. - Strong position to capitalize on robust road construction and aggregate sectors in US with steady federal funding, healthy state budgets, and data center/inshoring activities. - First quarter implied orders were $397 million (compared to $465 million in strong Q4); year-over-year implied orders increased $85 million (27.2%). - Backlog grew to $549 million (compared to $403 million in same period 2025), overall increase of $146 million (36%). Infrastructure solution segment backlog increased $37 million (13%) with contributions from CWMF; material solution segment backlog increased $110 million (87%).

Infrastructure Solutions Segment: Q1 2026 net sales were $237 million (same as Q1 2025); trailing 12-month net sales were $858.4 million (down 1.5% from prior year). Segment operating adjusted EBITDA was $34.8 million in Q1 2026 (compared to strong Q1 2025); trailing 12-month segment adjusted EBITDA was $12.6 million less (down 9.1%). Adjusted EBITDA margin was 14.7% for Q1 2026 and trailing 12 months. Materials Solutions Segment: Q1 2026 net sales increased 65.9 million (70.6%) over Q1 2025; trailing 12-month net sales increased 164.8 million (36.3%). Segment operating adjusted EBITDA was $8.9 million in Q1 2026 (compared to $5.2 million in Q1 2025); trailing 12-month operating adjusted EBITDA increased 22.1 million (59.6%). Adjusted EBITDA margin was 5.6% for Q1 2025 and 2026; trailing 12-month margin grew 140 basis points to 9.6%. Parts and service sales increased $24 million (19.7%) vs prior year Q1 and remained at ~37% of total sales.

• Full-year 2026 adjusted EBITDA guidance range: $170 million to $190 million. - Effective tax rate between 25% and 28%. - Capital expenditures between $40 million and $50 million. - Depreciation and amortization of $55 to $65 million. - Quarterly ranges: Adjusted SG&A of $70 million to $80 million; interest expense approximately $7 million.

Q: Steve Feranzi asked about gross margin breakdown, order shift sequentially with seasonality, synergy realization, and progress on parts and aftermarket.

A: Gross margin affected by mix, timing, tariffs; order shift flat q/q with CWMF and MS variance; synergy realization coming quickly with CWMF faster; progress on parts and aftermarket with significant opportunity to improve mix.

Q: Stephen Ramsey asked about data centers contribution, market share, and free cash flow conversion.

A: Data centers impact seen in MS backlog increase but specific number not trackable; not losing market share with positive reaction to new products at ConExpo and digital platform; free cash flow conversion expected to be strong with working capital movement.

Q: David McGregor asked about price-cost, highway bill reauthorization catalyst, price analytics, and balance sheet leverage.

A: Margin pressure possible in 2Q but expect stronger margins in 2Q; highway bill reauthorization gives confidence to smaller players and positive outlook; price analytics process in place but variability challenging; balance sheet leverage midpoint of guidance around 1.7 times