Astec Industries, Inc.

second quarter 2025 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. Mr. Anderson, you may begin.

Thank you and good morning, everyone. Joining me on today's call are Yackel Fendermurga, Chief Executive Officer, and Brian Harris, Chief and Attal Officer. In just a moment, I'll turn the call over to Yackel to provide his comments, and then Brian will summarize our financial results. For your convenience, a copy of our press release and presentation have been posted on our website under the Aztec Investor Relations tab at .aztecindustries.com. Turning to slide two, 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. 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 are contained in our filings with the U.S. Securities and Exchange Commission. 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 and non-GAAP financial measures, which management believes provide useful information to investors. These non-GAAP measures have no standardized meaning prescribed by U.S. GAAP, and are therefore unlikely to be comparable to the calculation of similar measures for other companies. Management 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 are included in our news release and the appendix of our slide presentation. And now I will turn the call over to Jakub.

Thank you, Steve. Good morning, everyone, and thank you for joining us. I'm excited to report the ASTIC team delivered another strong quarter and completed the previously announced TerraSource acquisition to drive future growth. Our team continues to progress as we execute our strategic initiatives to deliver consistency, profitability, and growth. Thanks to the 4,500 plus team members around the world for their dedication and engagement. On slide four, we provide a second quarter overview. Our results for the quarter were solid. For net sales, and we generated increased profitability as evidenced by our adjusted EBITDA and adjusted earnings per share. Adjusted EBITDA of 33.7 million increased 6.1 million or .1% over the second quarter of 2024. Adjusted EBITDA margin of .2% increased 220 basis points and adjusted earnings per share were strong at 88 cents. A .3% increase over the second quarter of 2024. Backlogs stood at 380.8 million and declined sequentially by 5.4%. This was primarily due to a combination of shorter lead times that allowed customers to place orders closer to the desired delivery dates and challenging market conditions for forestry and mobile paving products in the infrastructure solution segment. We continue to see healthy demand for asphalt and concrete plants in the infrastructure solution segment. Net sales in material solutions remained relatively stable at 125.7 million. Despite being challenged by the impact of high interest rates, we were especially pleased to see sequential and -over-year increases in applied orders. Initial signs of dealer inventory replenishment were seen and the rental utilization remains strong. We expect continued progress in our material solution segment in the second half of the year. Another quarter of positive free cash flow was driven by increased profitability and continued focus on working capital management. On slide five, we provide second quarter highlights in our full year outlook. As discussed, we generated strong adjusted earnings per share on solid net sales. We were pleased to achieve double digit adjusted EBITDA and return on invested capital of .2% and .6% respectively. Return on invested capital has improved .1% since the second quarter of 2024. Based on progress made in the first half, we are raising the lower end of our full year guidance from 105 million to 110 million on our core business. While keeping the top end unchanged at 125 million. Our updated full year guidance also reflects the expected second half contributions by TerraSource. We expect TerraSource to provide adjusted EBITDA in the 13 million to 17 million range, bringing our consolidated guidance expectations for adjusted EBITDA to a range of 123 million to 142 million for the full year. This range is based on the current state of the operating environment that I will cover on slide eight. Continuing the TerraSource discussion on slide six, we were pleased to announce the completion of the TerraSource acquisition on July 1st. TerraSource is a market leading manufacturer of material processing equipment and the related aftermarket parts. Serving complimentary crushing, screening, and separation markets. This presents a unique opportunity for ASTEC as it will be a creative from day one with aftermarket part sales representing approximately 63% of total revenue and 80% of gross margin. On slide seven, we highlight the TerraSource integration and synergy focus for the second half of this year. We feel very good about the way this process has started. Thank you to both teams for all the hard work over the last 90 days. Collaboration among our combined team members has been strong. I'm also glad to report that our Oracle Human Resource System allowed us to integrate the payroll and onboarding process seamlessly from day one. Identified various procurement and other synergies and are off to a good start towards realizing the savings. Further increasing parts and service revenue is a major opportunity. And we are focused on optimizing parts full rates and increasing our feet on the street for further growth. Other opportunities include sales channel alignment and capitalizing on cross-selling, new product development and factory utilization. Slide eight reflects the current operating environment. Currently, there are a number of external tailwinds and headwinds in the market in which we operate. Among opportunities is the status of federal highway funding in the United States. Multi-year core levels of work on federal roads and bridge projects provides stability for many Aztec customers. As a result, customer sentiment is generally positive as many have reported having large backlogs of work. As evidenced by our recent acquisition of TerraSource, we have current and future opportunities to grow inorganically. The search and data center infrastructure is another opportunity for Aztec customers. These huge construction projects require large amounts of concrete for foundations, walls, sidewalks and curbs, and as well payments. All of these contain construction materials that have been processed through the type of equipment Aztec make. On July 4th, 2025, the one big, beautiful bill was enacted into law in the United States. This bill extends many expiring provisions of the 2017 Tax Cuts and Job Act and restores favorable tax treatment for certain business provisions, including accelerated depreciation and R&D tax credits. Challenges currently being faced include the ever-changing tariff environment and high interest rates, which present headwinds to equipment dealers, end users, and contribute to a soft market for forestry and mobile paving equipment. We rarely mentioned weather as a challenge. However, this year could be an exception. May was the wettest month on record in many states. In our hometown of Chattanooga, for example, the rainfall in May broke a record previously set in 1929. Excessive amounts of rain caused widespread delays in processing aggregates and in construction projects. Moving to slide nine, as we have shared previously, approximately 80% of Aztec's revenues are generated in the United States, which is a favorable market. America's infrastructure is foundational to our national economy, global competitiveness, and our quality of life. Domestically, state and local government contract awards are a leading indicator of future construction activity expected to break ground within 30 to 60 days. Depending on the size and scope of the project, actual construction work often takes place over a multi-year period. According to the American Road and Transportation Association, ARPA, Economics Team, and Dodge Data Analytics, the total value of state and local government transportation contract awards increased 9%, growing to 47.8 billion through April 2025, compared to 43.8 billion through April of 2024. Approximately 202 billion or 58% of the infrastructure investment and job act funds have been committed as of April 2025, and 124 billion or 36% has been funded. According to ARPA, the obligation rates are on track and a lot more money will be spent even after 2026. The current surface transportation law expires October 1st, 2026. During the Transportation Construction Coalition fly-in on May 6th through May 8th, ARPA reported Washington transportation policymakers were optimistic about the prospects for impact of a new surface transportation bill next year, and have pledged to bring the new bill for President Trump's signature well before the current one expires. On July 17th, US Transportation Secretary, Sean Duffy spoke at an America is Building Again infrastructure event. Secretary Duffy announced that the priority for the House of Representatives is the surface transportation reauthorization, and noted the House theme for the surface transportation reauthorization is America builds. Their goals are to get money to the states efficiently and cut the amount of red tape through permitting reform. These messages bode well for ASTEC as we are an industry player focused on the -the-road sector. Needed improvements to our infrastructure provide long-term stable demand for our equipment, aftermarket parts, and digital solutions. We have strong brand recognition in the infrastructure sector, which is largely comprised of aggregates and the road and bridge construction. Turning to slide 10, thus far we have successfully navigated the ever-changing tariff environment. To date, mitigation efforts have offset tariff impacts to cost of goods, which have been in the 2% to 3% range. This is reflected in our second quarter results, and we expect our actions will continue to be effective for the remainder of the year. ASTEC has ongoing proactive strategies to mitigate the impact of tariffs. Our one ASTEC procurement team is requiring suppliers to provide support for any price increases, and we are actively negotiating all purchases. We have initiated additional pricing action and will continue to assess the situation to protect margins. We continue to practice dual sourcing and resourcing. We are managing supply chain alignment and will resour to the United States when feasible. We are continually managing our manufacturing footprint. We are also working on the delivery of the latest Our updated full-year adjusted EBITDA guidance includes our current view of the tariff environment. On slide 11, we show our backlog information. Our shorter production lead times and parts full rates have allowed customers to place orders closer to the desired delivery dates. We have also experienced variability in the ordering patterns from customers due to macroeconomic factors mentioned on slide 8. Current backlog levels in the infrastructure solution segment are a combination of healthy invoicing for asphalt and concrete plants, dealers ordering equipment closer to desired shipment dates, and softness in our order for mobile paving products and the markets for forestry products. In our material solution segment, backlog is stabilized in the 125 million reigns for the past four quarters. And we expect demand for material solutions products to gain momentum in the second half of the year. Our implied orders and build trends are shown on slide 12. Implied orders on a consolidated basis have stayed above 300 million for four of the last five quarters. In Q2, a decline in forestry and mobile paving orders in the infrastructure solution segment was significantly offset by an increase in implied orders in the material solution segment. The material solution segment has increased implied orders for four consecutive quarters and posted increases on both a sequential and -over-quarter basis. The consolidated -to-book ratio declined slightly from 95% to 93% as an increase in infrastructure solutions was offset by a drop from a strong 113% to 99% in material solutions. Though some degree of uncertainty remains in the broader economic environment, we are focused on maintaining discipline and taking the necessary actions to achieve our goals. With that, I will now turn the call over to Brian to provide additional comments on our second quarter financial results.