Astec Industries, Inc.

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 Yacoub Pandemirva, our Chief Executive Officer, and Brian Harris, Chief Financial Officer. In just a moment, I'll turn the call over to Yacoub 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 Investor Relations tab at www.aztechindustries.com. Turning to slide two, I'll remind you this morning that our discussion will contain forward-looking statements that relate to the future performance of the company, and these statements are intended to qualify for the SACAR reliability 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 can influence our results are highlighted in today's financial news release, and others are contained in our filings with 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 US GAAP and non-GAAP financial measures, which management believes provide useful information to investors. These non-GAAP measures have no standardized meaning prescribed by US GAAP and are therefore unlikely to be comparable to the calculation of similar measures of 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, turning to slide three, I'll turn the call over to Yaku. Thank you, Steve.

Good morning, everyone, and thank you for joining us. We were pleased to post another solid quarter, evidencing our focus on delivering consistent profitability and growth. Before we start, I would like to thank our combined Aztec team as we continue to execute. As a reminder, our results now include TerraSource, which we completed on July 1st. On slide four, we present a summary of our third quarter performance. This quarter, we continued our positive momentum with increased net sales, increased adjusted EBITDA, and adjusted earnings per share. Adjusted EBITDA was 27.1 million, up 9.7 million, or 55.7% from the third quarter of 2024. Adjusted EBITDA margins increased to 7.7%, a gain of 170 basis points, while adjusted earnings per share reached 47 cents, for a year-over-year increase of 30.6%. Our backlog at quarter end was $449.5 million, representing a sequential increase of $68.7 million, $64.1 million of which was due to the addition of TerraSource, while the backlog in our legacy infrastructure solutions and material solutions segments both increased slightly. We continue to see customers order closer to their desired delivery dates due to a combination of our shorter lead times and finished goods inventory on hand. Within the infrastructure solution segment, asphalt plants, concrete plants, heaters and burners deliver strong results and contributed to margin expansion, while forestry and mobile paving equipment face headwinds due to challenging end market conditions. Part sales for the infrastructure solution segment were strong, posting a 14.8% quarter-over-quarter increase. The material solution segment includes the successful integration of TerraSource. Backlog in this segment has been stable for the past five quarters. We have noticed improved customer sentiment due to the recent movement in interest rates and our part sales mix increased 670 basis points with the addition of TerraSource. Lastly, You may recall our normal third quarter experiences seasonality as our customers are busy in the field. We were pleased to drive enhanced year over year performance, resulting in 170 basis point increase in our adjusted EBITDA margin, our best since the third quarter of 2017. On slide five, we outlined the third quarter highlights and present our updated outlook for the full year. As previously highlighted, higher net sales contributed to year-over-year increases in adjusted EBITDA margin and adjusted earnings per share, and we posted adjusted ROIC of 12.3%. Given our solid performance through the first three quarters of the year, we are raising the lower end of our full-year guidance from $123 million to $132 million, while maintaining the upper range at 142 million. Our updated outlook is based on the current operating environment, which I will cover on the next slide. Slide six provides an overview of the current operating environment. There are several external factors affecting the markets in which Aztec operates, including potential opportunities as well as challenges. One opportunity is the ongoing funding provided by the current Federal Highway Bill in the United States. Multi-year commitments for Federal road and bridge projects provide stability for ASTEC's customers, many of which have reported substantial backlogs of work. In addition, the demand for aggregate, concrete, and asphalt used in other public, residential, and non-residential construction projects is encouraging. All of these are good examples of projects requiring materials processed with the equipment we build at ASTEC. ASTEC's recent acquisition of TerraSource demonstrates the potential of further inorganic growth within our disciplined financial framework. And the one big, beautiful bill enacted in the United States earlier this year extended expiring provisions from the 2017 Tax Cuts and Job Act. The reinstated business tax benefits, such as accelerated depreciation and R&D tax credits, are expected to benefit many of our customers. Lastly, the increased mining activity of rare earth minerals in the United States presents an opportunity for Aztec's material solutions products as minerals are embedded in oil bodies, which must be crushed, screened, and conveyed. Current challenges include fluctuations in tariffs, and any related uncertainty they create. We expect that last week's Federal Open Market Committee decision to reduce interest rates will further improve customer sentiment. On slide seven, we remind you that ASTEC operates in favorable markets. Within the United States, contract awards from state and local governments serve as key predictors of upcoming construction projects. Those projects typically break ground within 30 to 60 days of being awarded, although the actual construction timeline can extend over several years based on the project size and complexity. As of August 30, 2025, approximately $230 billion, or 66%, of infrastructure investment and Job Act funds have been committed, with $150 billion, or 44%, already allocated. ARPA reports that obligation rates remain strong, indicating that significant funding will continue to flow even after 2026. The current surface transportation law is set to expire on October 1st, 2026. On September 18th, ASTEC team members participated in Yield Days, co-sponsored by the National Asphalt Paving Association, National Stone, Sand and Gravel Association, and National Ready Mix Concrete Association. After the event, they confirmed federal transportation leaders remain optimistic about passing a new transportation bill next year and are committed to securing presidential approval well before the deadline. These developments are promising for ASTEC. As a specialized provider in the rock-to-road sector, ongoing infrastructure upgrades feel stable long-term demand for our capital equipment, aftermarket parts, and digital solutions. Our strong reputation in the infrastructure market, especially in aggregates and the road and bridge construction, positions us well for the future. Slide 8 provides a summary of how we actively manage the ongoing shift in the current tariff landscape. ASTEC maintains a proactive approach to minimizing tariff effects. For example, our One Aztec procurement team requires suppliers to justify any price increases, and we are actively negotiating every purchase. We have also implemented new pricing measures when necessary and will continue to evaluate this situation to safeguard our margins. We are consistently pursuing dual sourcing and alternative sourcing options and are working to realign our supply chain. including reshoring to the US when possible. Ongoing management of our manufacturing footprint is also a priority. So far, our mitigation strategies have neutralized tariff-related impacts on our margins. These efforts are evident in our results, and we anticipate our initiatives will remain effective throughout the rest of the year. As you know, the tariff environment is fluid, and creates an element of uncertainty for future periods. That said, we will continue to be proactive with our mitigation strategy in order to neutralize the impact of tariffs and to limit potential impacts to manufacturing inefficiencies. As such, our revised full year adjusted EBITDA guidance noted on slide five reflects our current perspective on our operating environment, including the impact of tariffs. Slide nine provides an update on our TerraSource integration. I could not be more pleased with how our team members are working together. Step one of onboarding of TerraSource employees was to ensure a seamless transition to the ASTEC payroll and benefit system. That has been completed successfully. Additional steps are listed on the slide and include harvesting synergies, including procurement opportunities. We have also made investments in high turn inventory to further drive enhanced parts full rates. As a reminder, we define full rates as having the part ready to ship within 24 hours of receiving the order. Although it has only been a few months since welcoming TerraSource to the Aztec family, our combined team is already in the process of adding to our part sales force aligning our sales channel and cross-selling efforts, developing and funding new products, and identifying factory utilization opportunities. We expect most synergies to show up in 2026 and are very satisfied with our progress thus far. On slide 10, we show our historical backlog information. On a sequential basis, backlog continued to evidence stability in the infrastructure solutions and legacy material solution segment. TerraSource contributed $64.1 million to material solutions and was the primary growth driver to our consolidated backlog. The backlog in our infrastructure solution segment reflects a combination of strong invoicing for asphalt and concrete plants, partially offset by weaker demand, for mobile paving and forestry equipment. In the material solutions segment, backlogged net of terra source remains steady at approximately 126 million. Looking ahead, we anticipate growing demand for material solutions products in the upcoming quarters. Slide 11 is presented net of terra source and shows sequential and quarter-over-quarter increases in consolidated implied orders and our book-to-bill ratios. Both segments contributed to the quarter-over-quarter improvements, while the infrastructure solution segment drove the sequential increase on a consolidated basis. We are pleased to show book-to-bill exceeded 100% in both the infrastructure solutions and material solution segments. With that, I'll hand the call over to Brian who will share further insights into our third quarter financial performance.