Astec Industries, Inc.

Hello and welcome to the Aztec Industries First Quarter 2026 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. Joining me on today's call are Yaku Fundamurba, our Chief Executive Officer, and Brian Harris, our Chief Financial Officer. In just a moment, I'll turn the call over to Yaku to provide his comments, then Brian will summarize our financial results. For your convenience, a copy of our press release and presentations have been posted on our website under the Investor Relations tab at www.aztechindustries.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. Factors that can 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. We also refer 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 of other companies. We do not intend these items to be considered in isolation or as a substitute to the related GAAP measures. A reconciliation of GAAP to non-GAAP results are included in our news release in the appendix of our slide presentation. And now, turning to slide three, I will turn the call over to Yaku.

Thank you, Steve. Good morning, everyone, and thank you for joining us. On slide four, we highlight our first quarter and trailing 12-month performance. Net sales for the quarter increased 20.3%, and stood at approximately 1.47 billion on a trailing 12-month basis from a combination of organic growth and inorganic contributions. Adjusted EBITDA for the quarter was 30.3 million with an adjusted EBITDA margin of 7.6%. On a trailing 12-month basis, adjusted EBITDA and adjusted EBITDA margin were 136 million and 9.2% respectively. Positive free cash flow afford us opportunity to invest in organic and inorganic growth opportunities. And in the first quarter, we generated 32.6 million of free cash flow. Our infrastructure solution segment continues to see healthy demand for asphalt plants and concrete plants, and the outlook remains positive. Challenging markets for forestry and mobile paving equipment persisted. However, we are pleased to see a recent uptick in backlog for these products. The total segment backlog increased $37 million, including $17 million contributed by CWMF, which joined ASTEC on January 1st. The backlog for material solutions increased $110 million, or 87%, from a balance of organic and inorganic contributions. Given the stability of federal funding, healthy state budgets, and incremental business from data centers and onshoring activities, we expect positive multiyear demand for Aztec products in both segments. Parts and service sales increased 24 million, or 19.7%, versus the first quarter prior year, and remained at approximately 37% as a percentage of total sales for both periods. Q1 profitability was lower than planned, deflecting a combination of timing effects and near-term cost pressure from tariffs, freight, and sales mix. Overall expenses were also impacted by the ConExpo trade show that occurs once every three years. We are, however, encouraged by increased backlogs in each segment, and we expect better quarters ahead. As such, we are maintaining our full year 2026 adjusted EBITDA guidance range of $170 million to $190 million. On slide five, we reiterate our dedication to creating value for all stakeholders by delivering consistency, profitability, and growth. Driven by our aspect built to connect way of doing business, we create consistency through our constant interaction with customers, execution of our operational excellence initiatives, and the delivery of superior products to our customers. As our historical adjusted EBITDA margin in the middle column shows, we have increased profitability in each of the last three years. Growth provides scale. and scale enhances profitability. We are making strides in growing aftermarket parts and service sales, consumer team acquisitions, developing new products, and leveraging the technology and digital connectivity we bring to the market. Our plans to grow are well underway, and we are excited about our future. On slide six, we provide an update on the integration of our most recent acquired companies. On July 1st, 2025, we acquired TerraSource, which boasts the flagship brands of Gunlock, Jeffrey Raider, Pennsylvania Crusher, and Elgin. And effective January 1st, 2026, we welcomed the dedicated employees of CWMF to the Aztec family. Both organizations are highly respected and our strong culture fits for Aztec. We are off to a great start. Many integration processes are now complete, including the seamless addition of new employees to our payroll, benefits, and email systems. We have successfully integrated all finance functions and have aligned all sales territories. Additional implementations completed or in process include product branding, and the identification of cross-selling and procurement opportunities. We are also assessing manufacturing optimization and sharing of best practices and product designs. Our joint teams work well together and we anticipate many benefits in 2026. Please turn to slide seven. As you know, ASTEC is well positioned to capitalize on the robust road construction and aggregate sectors across the United States, where approximately 80% of our revenues are generated. Steady federal funding for U.S. infrastructure provides stability for our customers, and in turn, ASTEC and our stakeholders. In 2022, Congress passed a five-year infrastructure bill valued at $347.5 billion. According to the American Road and Transportation Builders Association, 261 billion or 75% of those funds have been allocated as of February 28th, 2026. These formula funds for highways and bridges have enabled more than 116 and 500 new products across our country. Additionally, the total value of state and local government transportation contract awards was 152.2 billion in 2025, which was up from 132.2 billion in 2024. This was a new record. The existing five-year bill is set to expire on September 30th, 2026. The renewal of the bill has bipartisan support. This is evidenced by the stance of key members of the House Transportation and Infrastructure and the Senate Environment and Public Work Committees. Transportation Secretary Sean Duffy summarized it well when he said, it is one of the unique spaces in government where we work together because safety is not red or blue issue, it's an American issue. Congress has recently finalized transportation funding legislation for the rest of fiscal year 2026. and is focused on passing a timely, comprehensive surface transportation reauthorization bill. Sector developments such as these benefit ASTEC, a company dedicated to the rock-to-road industry. Continued improvements in infrastructure supports ongoing demand for our equipment, parts, and digital solutions. Our strong reputation in aggregates, as well as road and bridge construction, drives steady growth. On slide eight, we show first quarter implied orders and book-to-bill ratios. Organic results exclude the impact of the CWMF acquisition and orders prior to the first quarter of 2025 exclude the impacts of the TerraSource acquisition. Implied orders of 397 million compared to a strong fourth quarter of 465 million. On a year-over-year basis, implied orders increased 85 million, or 27.2%, from a combination of organic and inorganic contributions. Book-to-bill ratios in each segment exceeded 100%. On slide 9, we are pleased to report that our backlog grew to 549 million, compared to 403 million for the same period in 2025. This was an overall increase of 146 million or 36%. The backlog in infrastructure solution segment increased 37 million or 13%, primarily due to increases in asphalt plants, mobile paving, and forestry equipment, and a 17 million contribution from the newly acquired CWMF. Backlog in the material solution segment increased 110 million, or 87% over the same period the prior year from a combination of legacy and inorganic contributions. To recap, our backlog is the total amount of confirmed orders supported by signed contracts. We are pleased with the order activity in both of our segments. And now I will turn the call over to our Chief Financial Officer, Brian Harris.