Astec Industries, Inc.

all. 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. Mr. Anderson, you may begin.

Thank you and good morning, everyone. Joining me on today's call are Yaakov Undermerve, Chief Executive Officer, and Becky Weinberg, Chief Financial Officer. In just a moment, I'll turn the call over to Yaako 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 U.S. GAAP, which are generally accepted accounting principles, and non-GAAP financial measures, which management believes provides useful information to investors. These non-GAAP financial measures have no standardized meaning prescribed by US 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. A reconciliation of GAAP to non-GAAP results is included in our news release in the appendix of our slide deck. All related earnings materials are posted on our website at www.aztechindustries.com, including our presentation, which is under the Investor Relations and Presentations tabs. And now I'll turn the call over to Jaco.

Thank you, Steve. Good morning, everyone, and thank you for joining us. I will begin on slide four with a review of our full year highlights. 2023 was an important year for ASTEC as we advanced key strategic initiatives such as operational excellence, growing our parts business, new product development, and Oracle ERP execution. These efforts enabled us to achieve great results in 2023 and will help us deliver more consistent, profitable growth in the future. I am very proud of what the team has been able to accomplish this year. In 2023, we had record full year sales as end market demand remained solid in both segments. We were particularly encouraged by the steady momentum we saw across the business at the end of the year, with Q4 implied orders growing 27.6% sequentially. I met with many customers at the recent World of Concrete and National Asphalt Paving Association events. and was encouraged by their positive sentiment. They remain busy and are using our equipment to complete their projects. Their optimism, combined with a positive turn in implied orders during Q4, increased funding from the Federal Highway Bill and new product introductions give us confidence in the long-term demand outlook for our business. During Q4 2023, our team delivered improved profitability and expanded margins. This is a testament to the team's ability to execute efficiently and apply operational excellence practices. We expanded gross margins 400 basis points and adjusted EPS more than doubled for the full year. A priority for us in 2023 was to build a performance culture that consistently delivers financial results. Our full year results demonstrated that we have made great progress towards this objective. These achievements have laid the foundation for an even higher level of profitability as our business continues to grow. Our Oracle ERP implementation continues to move forward as indicated by the 2023 milestones we achieved. we will continue to harness the capabilities of the enhanced new systems to drive efficient and effective operations. Lastly, we published our first corporate sustainability report in December. It was a tremendous team effort to get this project across the finish line, and I would like to acknowledge the hard work done by many individuals to complete this report. Guided by our core values of safety, devotion, integrity, respect, and innovation, this report describes how we strive to do what is right for our customers, employees, and the communities in which we operate. Our vision is to build industry-changing solutions that create life-changing opportunities. This inaugural report provides a foundation from which we can move forward with the goal of long-term sustainable growth. Turning to slide five, as demonstrated over the past few years, we have taken steps to simplify our business by eliminating waste and enhancing processes to improve productivity. We are focused on areas where we add the greatest value, bringing innovation to our customers and working with our dealers to develop best-in-class aftermarket practices. We plan to continue to grow organically, and explore opportunities through a disciplined acquisition roadmap. Moving to slide six. After taking on the CEO role last year, one of the key priorities I established was for us to create and embrace a performance culture built on consistent execution. Reflecting on the last 12 months, I am pleased to see that we have made progress on this journey. as evidenced by our 2023 results and achievements. At the same time, we have identified significant additional opportunities to strengthen our business further and have built those into our long-term target goals. I would like to take a few minutes to highlight some notable achievements from the past year. We expanded gross margins by 400 basis points in 2023. We continue to invest to improve processes and deliver innovation, creating positive margin. We will continue these efforts in 2024. Additional investments will help us better serve growing markets, and a slate of new products will enable us to provide solutions to customer needs. A second area we prioritized in 2023 was our dedication to our customers, dealers, and shareholders. Accomplishments here included the expansion of our distribution network and the launch of new products that enable dealers and customers to better serve our growing global market. We want to continue prioritizing these elements in 2024 through greater collaboration and increased availability of parts to better serve our customers. These actions to drive an enhanced product offering out to a broader customer audience will enable us to create consistent, profitable growth. Promoting the One ASTEC operating model drives continuous improvement. The implementation of the Oracle ERP system is a great example as we have launched modules at corporate and one major manufacturing site in 2023. We have implementation plans for additional sites in 2024 and 2025. Operationally, we have made improvements in areas such as parts fill rates, which improved 20% in the past two years. We will make additional investments to further improve throughput velocity this year. One constant in our business is our steadfast focus on our core value of safety. This is very important to me and our team. I want our team to go home healthy and injury-free every day. Through continuous improvement, we have reduced our recordable injury rate to 1.27, the best in the company's recent history and very favorable when compared to the industry average. Our goal is zero harm, and we will continue to work to eliminate injuries across our sites. And finally, the Aztec team will continue to unite around our long-term objectives. and new vision statement, which is to build industry-changing solutions that create life-changing opportunities. We will work together to make ASTEC an even greater organization. Turning to slide seven, I would like to offer some observations on the current business dynamics. While the macro environment remains uncertain, there are an increasing number of indicators that point to a stable demand environment with opportunities for growth. In our infrastructure solutions and markets, demand for asphalt road building and concrete production is strong. Dealers need additional inventory, and we are working closely with our dealers to support a growing aftermarket opportunity by further improving the delivery of parts and service for our mobile equipment. For material solutions, we saw signals from our annual dealer order writing event that heightened interest rates concerns may weigh on mobile crossing and screening equipment outlook in the near term. For the long term, however, demand trends looks favorable due to domestic infrastructure spending and opportunities in international markets. In both groups, we are releasing new products to deliver innovation to our customer needs. Customers are busy, and they rely on us to help keep their projects moving forward efficiently. In addition to new product introductions, we are increasing our sales coverage by expanding our dealer network and deploying additions to our direct sales force to further penetrate markets. Funding from the Federal Highway Bill continues to be deployed at a growing rate. Contract awards increased 8.6% in 2023, which is a positive leading indicator for future construction. Funding from federal legislation provides stability for our customers, driving future product and aftermarket demand. Next, I would like to update you on two of our new products shown on slide eight. Both products were launched in 2023, and both have been met with positive reception from our customers. The Peterson 5710E Horizontal Grinder was launched in March. The number of units sold and incremental margins for this product are in line with expectations, and we are on track with our unit forecast in 2024. The Rotec RX405 Cold Planer. was launched in October and is off to a great start. New product launches are complex and require teamwork and dedication. I am pleased with the success of these and look forward to presenting more new products at the World of Asphalt trade show in Nashville on March 25th through 27th. Slide 9 shows that backlog continues to normalize from the peak levels experienced in 2022 that were primarily caused by customer reactions to supply chain and logistics constraints. Over the past year, orders have returned to more historic patterns and we have made progress in converting backlog to sales through investments in throughput and operational excellence initiatives. Implied orders shown on slide 10 increased 27.6% sequentially in Q4 after holding steady through the first three quarters of 2023. While one data point does not make a trend, we were encouraged with the increase in orders. Customer sentiment for infrastructure solutions products is positive, while higher interest rates may temper demand for material solutions products in the near term. Industry data points to double-digit growth in federal and state road construction. which bodes well for our industry in 2024. Combined with our new products and healthy backlog, I am becoming increasingly confident that 2024 will be a solid year for Aztec. With that, I will now turn the call over to Becky to discuss our detailed fourth quarter and full year financial results.