Astec Industries, Inc.

Hello, and welcome to the Aztec Industries, Inc. first quarter earnings call. As a reminder, this conference call is being recorded. It is my pleasure to introduce your host, Steve Anderson, Senior Vice President of Administration and Investor Relations. Thank you, Mr. Anderson. You may begin.

Thank you, and welcome to the Aztec first quarter earnings conference call. My name is Steve Anderson, and 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 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 can influence our results are highlighted in today's financial news release and others are contained in our filings with the SEC. As usual, we ask that you familiarize yourself with those factors. In an effort to provide investors with additional information regarding the company's results, the company refers to various GAAP, which are U.S. Generally Accepted Accounting Principles, and non-GAAP financial measures which management believes provide useful information to investors. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management of the company does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. Management of the company uses both GAAP and non-GAAP financial measures to establish internal budgets and targets and to evaluate the company's financial performance against such budgets and targets. You should also note 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. All related earnings materials are posted on our website at www.aztecindustries.com, including our presentation, which is under the Investor Relations and Presentation tabs. And now, I will turn the call over to Barry.

Thank you, Steve. Good morning, everyone, and thank you for joining us on the call this morning to discuss our first quarter earnings results. I want to start out by thanking the entire Aztec team for their hard work and dedication during a busy quarter marked by a significant ramp up in demand and a tight labor market. While our results were challenged this quarter, our team continued to serve our customers and drive operational excellence across the organization through our one Aztec business model for continuous improvement. As we continue to navigate through the pandemic, the health, safety and well-being of our employees, suppliers and customers continues to be our top priority. During my remarks today, I will begin by discussing key highlights and drivers from the quarter and then provide an update on our operations. I will also discuss what we're seeing in terms of demand in our supply chain before turning the call over to Becky for details on our financial results. We will highlight progress made on a strategic transformation and then open the call for Q&A. Starting on slide four, here are today's key messages. We had a challenging start to the year as we experienced commodity inflation and a tight labor market, which hampered our ability to leverage the restructuring actions taken as part of our transformation to simplify, focus, and grow the company. Positively, we are seeing improvement in the flow through our facilities, and we continue to see significant demand for our products, achieving record backlog with orders up 72% year-over-year. Becky will address this topic in more detail later in the call. We continue to position our business to meet strong and increasing customer demand. Customer sentiment remains positive through 2021, and many of our customers are seeing order books fill up into 2022. We are focused on providing our customers with industry-leading technology solutions to deliver value and support our rock-the-road initiatives. Third, we are well positioned for future growth with our streamlined organizational structure, strong balance sheet, and ample liquidity. We continue to drive operational and commercial excellence across the organization. Fourth, during the first quarter, we continue to execute against our transformation strategy to simplify, focus, and grow the business. As I mentioned during our last earnings call, we will prioritize the growth pillar in 2021 with a focus on both organic and inorganic strategic growth opportunities. We have a number of organic growth initiatives underway, and I'm excited to share more details with you later during our call. Lastly, as we move forward into 2021, our increased focus on growth will allow us to build upon our strong foundation. We are transforming our business with a focus on operational excellence and profitable growth to drive long-term stakeholder value creation. It's an exciting time here at Aztec, and we continue to have a long runway ahead of us. Turning to slide five, this is our business segment breakdown. Our revenue mix during the quarter was 29% material solutions and 71% infrastructure solutions. Under this structure, we serve the rock to road value chain. Our one Aztec business model is on slide six. Our focus on operational excellence has enabled all of our factories to operate throughout the pandemic with little disruption and we are flexing our operations to meet the current spike in demand. Further, we are leveraging our global capacity to reduce lead times and manage costs while optimizing revenue within our footprint. Lastly, we have not experienced any significant supply chain disruptions to date, however, We are not immune from supply chain disruptions caused by the recent surge in world demand. That being said, we are constantly maintaining ongoing discussions with our suppliers to identify and mitigate these risks. We have also expanded the depth of our supply chain with multiple supply sources in anticipation of a potential tightness going forward. Turning to slide seven, I will highlight some industry dynamics that we are seeing and what we are hearing from our customers. We are seeing a spike in demand across our businesses, driven by favorable industry dynamics and pent-up demand from the pandemic. We believe we are in the early innings of an upcycle in North America, as we see strong residential real estate demand, typically followed by gains in non-residential construction. Optimism for increased U.S. infrastructure spending is prevalent, as there is bipartisan support for an infrastructure bill in 2021. If approved, this would provide a tailwind to our business for years to come. During the first quarter, we saw labor shortages and inflation. We expect these headwinds to continue through 2021. On the labor front, we are starting to see improvement from early 2021 and are taking actions to improve the flow of products through our facilities. To mitigate the impact of steel inflation, we are utilizing strategies that include forward contracts and advanced steel purchases to ensure supply and minimize the impact of price volatility. As the leader in many of our markets, we are taking pricing actions as needed. Now moving on to slide 8, where we highlight some of our ESG initiatives. We are working to elevate our initiatives and drive them across the organization. We have a long history of conducting businesses ethically and responsibly with a focus on sustainable products that drive energy efficiency and conserve resources. We have an internal focus on reducing the carbon footprint of our products and facilities. I recently signed the CEO Action for Diversity and Inclusion Pledge, which evidences our commitment to advance diversity and inclusion within the workplace. Further, we empower our employees to support communities where we operate and live. I am proud that our team is willing to give back. We continue to gain traction on our ESG initiatives throughout the organization, and our team is excited and engaged for this company-wide focus. We look forward to updating you on our progress. In summary, our first quarter results were challenged by inflation and tight labor markets during a period of strong customer demand. While some of these factors will continue to the second quarter, we have taken actions to help mitigate these issues on a full-year basis. As I mentioned previously, demand for our products remains resilient, as demonstrated by our record backlog and positive customer sentiment. Also, of note, we believe these factors will balance some of the seasonality we typically evidence in the third and fourth quarters. We are adapting to this new environment and continuing to serve our customers, while also executing our strategy and driving commercial and operational excellence across the organization. The effort put in by the team over the last 20 months to build a strong foundation throughout our company will pay dividends to our customers, employees, and shareholders over the long run. While we are still in the early age of our transformation, we are pleased that we drove change at a good pace in an effort to place ourselves in the best possible position to leverage what we earn from the market. With that, I will now turn the call over to Becky to discuss our detailed financial results.