Astec Industries, Inc.

Greetings and welcome to the Aztec Industries first quarter 2020 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Steve Anderson. Please go ahead, sir.

Thank you, Kevin. and welcome to the Aztec Industries first quarter 2020 earnings call. As Kevin mentioned, my name is Steve Anderson and also joining me on today's call are Barry Ruffalo, our chief executive officer, and Becky Weinberg, our chief financial officer. In just a moment, I'll turn the call over to Barry to provide some comments and then Becky will summarize our financial results. Before we begin, I'll remind you that our discussion this morning may contain forward-looking statements that relate to the future performance of the company. and these statements are intended to qualify for the safe harbor liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions. Factors that could influence our results are highlighted in today's financial news release and others that are contained in our filings with the SEC. As usual, we ask that you familiarize yourself with those factors. You should also note the comments made during today's call will refer to non-GAAP results and a reconciliation of GAAP to non-GAAP results are included in our news release and an appendix to our slide deck. So at this point, I'll turn the call over to Barend. Thank you, Steve.

Good morning, everyone. I'll start off today's call by I'll then provide an update on actions we are taking to respond to COVID-19 and the impact it has on ASTEC's operations. This will include an update on what we are seeing in terms of demand in our supply chain. I'll then turn the call over to Becky for details on our financial results. When she's done, I'll close our prepared remarks with an update on our strategic transformation progress and then open up the call for Q&A. Beginning on slide four, Here are the key messages that we would like to share from the quarter. As a result of the actions that we took in 2019 and Q1 of 2020, driving operational excellence and other best practices across the company, we were able to realize solid performance in the first quarter and improved margins, despite the more challenging macro environment late in the quarter as the COVID-19 pandemic escalated. We are also successfully simplified organization from three to two operating segments. I will speak to this again in the next slide. With a strong balance sheet and liquidity for the net cash position, ASTEC remains well positioned to execute in all market conditions. As you already know, our products remain essential for building infrastructure used to move goods to market and facilitate the transportation needs of communities. Importantly, we are currently preparing for all scenarios due to the COVID-19 pandemic and they want to ensure you that we are proactively prepared for changes in market and demand conditions. This includes maintaining the ability to ramp up or increase demand once COVID-19 is no longer a factor. With our simplified focus and growth strategic pillars, we've had a critical head start on cost savings initiatives. As we navigate the current environment, we will continue to take proactive and necessary actions to maximize the value delivered to our customers and shareholders. As mentioned earlier, I am very proud of the AdSec team for their adaptability and resiliency through the ongoing crisis. Now let's turn to slide five, where you will see an overview of our business segments. For those who are new to our story, as part of our continued transformation, we have reduced the organization into two operating segments from three previously. This two-segment structure has simplified our operations and organizational structure to better align with the end markets that we serve. Early feedback from our customers and employees have been extremely positive. As you can see, our current revenue mix based on last year was 65% infrastructure solutions and 35% material solutions. Now turning to slide six. We have taken many proactive actions in response to the COVID-19 pandemic. Beginning in early March, we formed a COVID-19 task force which continually monitors information from our sites, government agencies, and other sources. To the ongoing crisis, we have continued to manufacture, sell, and service our products with increased precautions at our facilities. That includes enhanced deep cleaning, social distancing, frequent hand washing, and temperature checking for on-site essential employees and visitors. Most of our office employees in our manufacturing facilities, as well as our corporate headquarters, are also working remotely where possible. Turning to slide seven, I'd like to touch on some business dynamics and observations. Under our new, more simplified, and more focused two-segment organizational structure, we have been able to respond to the COVID-19 pandemic more quickly and efficiently than we would have been possible under the prior structure. Through the ongoing crisis, we have been in constant discussions with our customers. Although some of our customers have discussed postponing CapEx decisions and delaying shipments to future quarters, The majority are continuing to work and require critical Aztec solutions. The majority of Aztec factories around the globe are currently operating, with the ability to flex operations as needed. We've had two closures of material solutions sites due to preemptive government mandates in Northern Ireland and South Africa. The South Africa site just reopened on May 4, while the Northern Ireland facility is expected to reopen in the middle of May. In the first quarter, we saw limited impact from COVID-19. However, we do expect to see some order reductions through the remainder of 2020 due to customers delaying receipt of orders and potential capex postponements. With that said, many of our customers were set for 2020 to be as strong as or stronger than 2019, with many having a backlog of work that will take them through the end of this year. The uncertainty that follows, the speed of the market recovery, and the potential of a federally funded infrastructure bill are all things that they will use as the basis for the timing of their buying decisions. As you know, the situation remains fluid for the remainder of 2020, but fundamental market drivers are just as strong as they've ever been. With respect to our supply chain, to date we have not experienced any significant disruptions. However, we are constantly We have also expanded the depth of our supply chain to support our efforts. Before turning the call over to Becky, I'd like to provide some comments on our transformation plans. During the quarter, we have made significant progress against our initiatives to simplify focus in the organization. First quarter financial results also demonstrated traction on our strategic transformation with a 60 basis point This was a direct result of the initiatives taken in 2019 and Q1 of 2020. While we remain cautious given the global pandemic, we are well positioned to navigate the economic challenges ahead of us with a more efficient organizational structure, a strong balance sheet, and ample liquidity. As I have said in the past, we will continue to strive to be a good company in tough markets and a great company in good markets. I'm convinced we will come out of these unprecedented times stronger than when we entered them. Now I'll turn the call over to Becky for her discussion on detailed financials.