Sign in

You're signed outSign in or to get full access.

AI

ASTEC INDUSTRIES INC (ASTE)·Q4 2024 Earnings Summary

Executive Summary

  • Record quarter: Q4 revenue $359.0M (+6.5% Y/Y), adjusted EBITDA $47.9M (13.3% margin, +360 bps Y/Y), and adjusted EPS $1.19; strong operating cash flow ($36.6M) and free cash flow ($32.1M) supported by working capital progress .
  • Segment divergence: Infrastructure Solutions grew 11.9% with record segment adjusted EBITDA margin of 21.3%, while Materials Solutions declined 4.1% on dealer/contractor financing constraints and destocking .
  • Backlog normalized: total backlog $419.6M (−26.4% Y/Y) reflecting strong invoicing in plants and dealers ordering closer to ship dates; management noted early 2025 order intake strength and H2-weighted demand expectations .
  • Initial FY25 framework: adjusted EBITDA guidance $105–$125M; CFO laid out expected cash from operations $110–$125M, capex $35–$45M, adjusted SG&A $55–$65M/quarter, tax rate 24–26%, D&A $26–$30M; seasonality skewed to H2 (55–60%) .
  • Catalyst framing: operating/mix-driven margin expansion, a constructive plant cycle, and an H2-weighted 2025 setup; risks include mobile equipment softness, dealer destocking, and tariff/tax effects (Q4 effective tax 33.1% on one-time state accrual true-up) .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 top-line and profitability on pricing/mix and execution: adjusted EBITDA $47.9M (13.3% margin) and adjusted EPS $1.19; CEO: “quarterly records for net sales, adjusted EBITDA and adjusted earnings per share” .
  • Infrastructure Solutions outperformance: net sales $248.8M (+11.9% Y/Y) with record segment operating adjusted EBITDA margin 21.3% (+560 bps), driven by strong plant demand and operational excellence .
  • Strong cash generation and liquidity: operating cash flow $36.6M, FCF $32.1M; liquidity $228.1M (cash available $88.3M + revolver availability $139.8M); CFO: “position us well for the future” .

What Went Wrong

  • Backlog and Materials Solutions headwinds: total backlog down 26.4% Y/Y to $419.6M; Materials Solutions sales −4.1% with lower domestic equipment conversions amid finance capacity constraints and dealer destocking .
  • Elevated tax rate reduced GAAP earnings quality: Q4 effective tax 33.1% (vs 14.9% LY) on one-time state under-accrual adjustment .
  • Mobile equipment softness and interest rate sensitivity linger; CEO noted dealers/customers have been conservative and destocking persisted into January, though improving trends seen into 1H25 .

Financial Results

Consolidated P&L and Cash Flow (chronological columns: oldest → newest)

MetricQ4 2023Q3 2024Q4 2024
Net Sales ($M)$337.2 $291.4 $359.0
Diluted EPS (GAAP)$0.65 $(0.27) $0.92
Adjusted EPS ($)$0.90 $0.31 $1.19
EBITDA ($M)$25.4 $0.6 $40.0
Adjusted EBITDA ($M)$32.6 $17.4 $47.9
Operating Margin (GAAP)5.6% (2.5)% 9.7%
Adjusted Operating Margin (%)7.8% 3.4% 11.9%
EBITDA Margin (%)7.5% 0.2% 11.1%
Adjusted EBITDA Margin (%)9.7% 6.0% 13.3%
Operating Cash Flow ($M)$46.6 $22.5 $36.6
Free Cash Flow ($M)$37.5 $19.9 $32.1

Segment Breakdown (Q4 periods and prior quarter)

MetricQ4 2023Q3 2024Q4 2024
Infrastructure Solutions Net Sales ($M)$222.3 $165.0 $248.8
Infrastructure Solutions Segment Op Adj. EBITDA ($M)$34.9 $15.6 $53.1
Infrastructure Solutions Segment Op Adj. EBITDA Margin (%)15.7% 9.5% 21.3%
Materials Solutions Net Sales ($M)$114.9 $126.4 $110.2
Materials Solutions Segment Op Adj. EBITDA ($M)$8.3 $14.5 $7.2
Materials Solutions Segment Op Adj. EBITDA Margin (%)7.2% 11.5% 6.5%

KPIs and Balance Sheet

KPIQ4 2023Q3 2024Q4 2024
Backlog – Total ($M)$569.8 $475.8 $419.6
Backlog – Infrastructure ($M)$364.7 $351.1 $305.5
Backlog – Materials ($M)$205.1 $124.7 $114.1
Liquidity – Total ($M)—$195.1 $228.1
Cash & Equivalents Available ($M)—$52.7 $88.3
Revolver Availability ($M)—$142.4 $139.8
Dividend per Share ($/sh)—$0.13 (declared Oct-24) $0.13 (declared Feb-24-25)

Vs. Estimates (S&P Global)

MetricQ4 2024 ActualS&P Global ConsensusBeat/Miss
Revenue ($M)$359.0 N/AN/A
Adjusted EPS ($)$1.19 N/AN/A
  • Note: S&P Global consensus was unavailable at query time (daily limit). No estimate comparisons can be made reliably.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($M)FY 2025N/A$105–$125 New
Cash from Operations ($M, pre-capex)FY 2025N/A$110–$125 New
Capital Expenditures ($M)FY 2025N/A$35–$45 New
Adjusted SG&A ($M/quarter)FY 2025N/A$55–$65 per quarter New
Effective Tax Rate (%)FY 2025N/A24%–26% New
D&A ($M)FY 2025N/A$26–$30 New
Seasonality (Adj. EBITDA cadence)FY 2025N/A~40–45% 1H / 55–60% 2H (±2%) New
DividendOngoing$0.13/sh$0.13/sh (declared for Mar 31, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Operational excellence & marginsQ2: Manufacturing inefficiencies and ERP costs weighed; adjusted EBITDA margin 8.0% . Q3: Mixed results; improved adjusted EBITDA to $17.4M (6.0%) .Adjusted EBITDA $47.9M, margin 13.3%; GAAP op margin 9.7% on volume, price/mix and execution .Improving
Dealer destocking & interest ratesQ2: Materials Solutions softness from financing constraints and longer conversions . Q3: Destocking persisted; MS sales −9.6% Y/Y .Dealers saw strong Dec/Jan conversions; destocking still present but easing; customers adapting to higher rates .Easing into 2025
Backlog & ordersQ2: Backlog stabilizing; $531.1M . Q3: Backlog $475.8M; plant deliveries solid .Backlog $419.6M; strong early-2025 orders; asphalt/concrete plants remain strong .Normalizing with strong invoicing
Tariffs & supply chainQ2/Q3: ERP/ops transformation; limited mention on tariffs .Tariffs a risk; mitigation via diversified sourcing; <15% purchases from China; ~80% sales US .Managed risk
AftermarketQ2/Q3: Stable/healthy aftermarket noted .Aftermarket stable; supports steady utilization and customer activity .Stable
Digital/technologyQ2: ERP program; Astec Digital moved to IS segment .“Advanced digital integrations and services” planned in 2025; trade show showcases .Building pipeline

Management Commentary

  • CEO: “We delivered quarterly records for net sales, adjusted net income and adjusted EBITDA. … Our efforts around aftermarket, operational excellence and our OneASTEC procurement team are starting to deliver results.” .
  • CEO on market mix: “Demand for asphalt and concrete plants has remained healthy… Capital equipment sales in our Material Solutions segment continued to be challenged by high interest rates and further dealer inventory destocking activity.” .
  • CEO on macro/tariffs: “We are not immune to short-term tariff risk, but our operational excellence and procurement efforts provide some degree of mitigation… ~80% of our net sales are domestic… Less than 15% of our purchases are sourced from China.” .
  • CFO: “Adjusted earnings per share of $1.19 for the fourth quarter was a record as well… Favorable volume, pricing and mix were the key drivers.” .
  • CFO on 2025 planning: Adj. EBITDA $105–$125M; cash from ops $110–$125M; capex $35–$45M; adjusted SG&A $55–$65M/qtr; tax 24–26%; D&A $26–$30M; H2-weighted cadence .

Q&A Highlights

  • Manufacturing inefficiencies: Teams drove meaningful improvement; “Q4 inefficiencies … one of the lowest we’ve had in quite a while” despite inventory counts; continued work ahead .
  • Backlog confidence: Asphalt/concrete plants remain strong with deliveries into late 2025; mobile equipment still pressured similar to Materials Solutions; early-2025 order intake “really, really nice” on asphalt .
  • Policy sensitivity: Reinstating 100% bonus depreciation would help smaller customers; highlighted in industry outreach .
  • Rates vs replacement: Customers are learning to operate with higher rates; aging fleets necessitate replacement; signs of conversions in Dec/Jan .

Estimates Context

  • S&P Global consensus (revenue, EPS, EBITDA, target price, recommendation) could not be retrieved at query time due to provider request limits; therefore, no beat/miss versus Street can be stated reliably at this time.
  • Actuals reported: revenue $359.0M; adjusted EPS $1.19; adjusted EBITDA $47.9M, with strong margin expansion .

Key Takeaways for Investors

  • Execution inflection: broad-based mix/price/ops drove record Q4 adjusted margins; Infrastructure Solutions delivered 21.3% segment adjusted EBITDA margin—evidence the operating system is gaining traction .
  • Setup for 2025: H2-skewed year with initial adjusted EBITDA guide $105–$125M and healthy cash generation; model seasonality and higher 2H contribution .
  • Plants vs mobile: Continue to overweight the plants/aftermarket exposure; remain cautious on mobile equipment and Materials Solutions until dealer destocking fully abates .
  • Cash discipline: Working capital progress and liquidity ($228.1M) offer flexibility for organic initiatives and selective M&A; watch capex ramp ($35–$45M) versus cash from ops plan .
  • Policy/macro watch items: Tariffs and tax rate normalization (Q4 tax elevated on one-time state item) introduce earnings variability; bonus depreciation reinstatement would aid demand .
  • KPIs to monitor: Order intake trajectory through mid-2025, Materials Solutions sell-through, backlog quality in plants, adjusted SG&A cadence and D&A run-rate vs guidance .