UPDATED and REVISED ASTEC INDUSTRIES REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

In the press release for the fourth quarter and full year 2019, gross profit, restructuring and impairment charges, income taxes, net income, earnings per share and certain balance sheet items, including inventory, have all been updated to reflect a change in the accounting treatment of our GEFCO business. In the earlier press release, GEFCO’s net assets were treated as “assets held for sale” and its net assets were reduced to their estimated fair value based upon early indications of interest from potential purchasers. Currently, the sale of the GEFCO business under the terms and timing contained in the early indications of interest is unlikely. As a result, the value of the GEFCO’s assets is now accounted for as “assets held and used.” The Company’s current plan is to exit the GEFCO oil and gas business and continue to operate and pursue an exit strategy for the GEFCO water and geothermal well business. The related oil and gas inventories on hand at December 31, 2019 have been reduced to their net realizable value considering the Company’s planned exit.

The updated and revised release reads:

ASTEC INDUSTRIES REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

Fourth Quarter 2019 Highlights (all comparisons are made to the prior year fourth quarter):

Net Sales decreased 10.7% to $283.2M
Gross profit of 9.7%; adjusted gross profit of 21.2% decreased 280 bps
EPS loss of $0.81; adjusted EPS of $0.36 decreased from $0.61 a year ago
Adjusted EBITDA of $13.7M decreased 51.0%; adjusted EBITDA margin of 4.9% declined 390bps

2019 Highlights (all comparisons are made to the prior year):

Net sales were relatively flat; adjusted net sales decreased 7.8% to $1.15B
Gross profit of 20.5%; adjusted gross profit of 21.9% decreased 190bps
EPS of $0.98; adjusted EPS of $1.55 decreased from $2.94 a year ago
Adjusted EBITDA of $67.1M decreased 42.3%; adjusted EBITDA margin of 5.8% declined 350bps
Began restructuring initiatives related to strategic pillars for profitable growth – Simplify, Focus and Grow

Fourth Quarter 2019 Results

Fourth quarter net sales of $283.2 million decreased 10.7% compared to $317.0 million for the fourth quarter of 2018. Domestic sales of $209.6 million decreased 15.5% from $248.2 million a year ago, while International sales of $73.6 million increased 7.0% from $68.8 million in the fourth quarter of 2018. Excluding the impact of foreign currency, net sales decreased 10.4%.

Backlog as of December 31, 2019 of $263.7 million decreased by $81.3 million, or 23.6% compared to the backlog of $344.9 million a year ago. Domestic backlog decreased by 25.4% to $194.5 million from $260.7 million in 2018. International backlog of $69.2 million decreased compared to $84.2 million last year. Although we experienced a decline in each segment, weakness was concentrated in the Aggregate and Mining Group as dealers had increased their inventory levels throughout 2018 to meet demand but then began to destock in 2019.

An operating loss of $26.9 million compared to a loss of $69.4 million in the fourth quarter 2018. In relation to the Company’s efforts to simplify the organization, the Company incurred a $1.8 million pre-tax restructuring charge, or $0.06 per diluted share for the fourth quarter. The restructuring items are related to the closure of our German operation, the transfer of the CEI products to Heatec and RexCon and the planned exit of GEFCO’s oil and gas product line. In the fourth quarter of 2019, after considering new management’s revised inventory control and working capital control objectives, the Company’s assessment of the age, quantities on hand, market acceptance of the equipment, the Company’s exit of the GEFCO oil and gas business and other related factors, it was determined that various specific equipment models in each of the Company’s business units and certain other inventories required additions to their net realizable value reserves. The fourth quarter results include a pre-tax inventory write-down of $32.6 million or $1.11 per diluted share. Fourth quarter adjusted operating income of $7.4 million decreased 65.0% compared to $21.2 million a year ago. Adjusted operating margin of 2.6% declined 410 basis points from 6.7% in fourth quarter 2018. Adjusted operating income declined primarily due to the lower volumes. SGA&E expenses declined 4.0% on a dollar basis but increased as a percent of sales 130 basis points to 18.6% from 17.3% in the fourth quarter of 2018 due to the decline in sales.

Adjusted EBITDA of $13.7 million decreased 51.0% compared to $28.0 million a year ago. Adjusted EBITDA margin of 4.9% declined 390 basis points from 8.8% in fourth quarter 2018.

Net loss of $18.4 million or $0.81 per diluted share, compared to a net loss of $47.0 million or $2.08 per diluted share for the fourth quarter of 2018. Excluding unusual items and restructuring charges mentioned above, adjusted net income of $8.3 million decreased 40.8% compared to the same period a year ago. Adjusted EPS of $0.36 decreased 41.0% compared to $0.61 last year.

“Fourth quarter results showed continued softness in North America that was partially offset by an increase in international sales. Despite the temporary headwinds, I am encouraged by the progress we are making towards our strategic initiatives to Simplify, Focus and Grow the organization,” stated Barry Ruffalo, CEO of Astec Industries, Inc. “As noted, we are exiting the GEFCO oil and gas product lines while continuing to operate and pursue an exit plan for the GEFCO water and geothermal well drilling business. This will further simplify the organization. Additionally, we have taken important steps to restructure the Company and streamline business units to increase internal transparency and improve the decision-making process. These collective actions are important in building the foundation for the future success of Astec Industries.”

Full Year 2019 Results

Net sales for 2019 were $1,169.6 million, or relatively flat when compared to 2018. Domestic sales decreased 0.8% to $908.5 million from $915.8 million a year ago, while International sales increased 2.1% to $261.1 million from $255.8 million in 2018. Excluding the impact of foreign currency, net sales increased 0.6%.

Operating income of $25.1 million compares to a loss of $86.4 million in 2018. The Company incurred a total of $35.8 million in pre-tax restructuring charges and inventory write-downs for 2019, or $1.24 per diluted share. Adjusted operating income of $40.9 million decreased 53.4% compared to $87.8 million in 2018. Adjusted operating margin of 3.6% declined 340 basis points from 7.0% in 2018. Adjusted operating income declined primarily because of a reduction in gross margin of 190 basis points to 21.9% from 23.8% in 2018.

Adjusted EBITDA of $67.1 million decreased 42.3% compared to $116.3 million in 2018. Adjusted EBITDA margin of 5.8% declined 350 basis points from 9.3% in 2018.

Net income of $22.3 million or $0.98 per diluted share, compared to a net loss of $60.4 million or $2.64 per diluted share in 2018. Adjusted net income of $35.2 million decreased 47.7% compared to 2018. Adjusted EPS of $1.55 decreased 47.3% compared to $2.94 last year.

The Company identified certain material weaknesses in its internal control over financial reporting. As a result, the Company needs additional time to complete the compilation of information and finalization of its assessment of the effectiveness of internal control over financial reporting for its consolidated financial statements and related disclosures to be filed as part of the 2019 Form 10-K. The Company has filed a Form 12b-25 with the Securities and Exchange Commission in order to extend the due date of its 2019 Annual Report on Form 10-K for 15 days, as permitted by Rule 12b-25 under the Securities Exchange Act.

About Astec Industries, Inc.

Astec Industries, Inc., (www.astecindustries.com), is a manufacturer of specialized equipment for asphalt road building, aggregate processing and concrete production. Astec’s manufacturing operations are divided into three primary business segments: road building, (Infrastructure Group); aggregate processing and mining equipment (Aggregate and Mining Group); and a diversified portfolio of equipment used in various industries including energy-related markets (Energy Group).

Forward-Looking StatementsThe information contained in this press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the future performance of the Company, including statements about the effects on the Company from (i) restructuring initiatives, (ii) the potential sale of the GEFCO water and geothermal well business, (iii) increases in international demand, and (iv) product demand in North America. These forward-looking statements reflect management’s expectations and are based upon currently available information, and the Company undertakes no obligation to update or revise such statements. These statements are not guarantees of performance and are inherently subject to risks and uncertainties, many of which cannot be predicted or anticipated. Future events and actual results, financial or otherwise, could differ materially from those expressed in or implied by the forward-looking statements. Important factors that could cause future events or actual results to differ materially include: general uncertainty in the economy, oil, gas and liquid asphalt prices, rising steel prices, decreased funding for highway projects, the relative strength/weakness of the dollar to foreign currencies, production capacity, general business conditions in the industry, demand for the Company’s products, seasonality and cyclicality in operating results, seasonality of sales volumes or lower than expected sales volumes, lower than expected margins on custom equipment orders, competitive activity, tax rates and the impact of future legislation thereon, and those other factors listed from time to time in the Company’s reports filed with the Securities and Exchange Commission, including but not limited to the Company’s annual report on Form 10-K for the year ended December 31, 2018.

For Additional Information Contact: Steve Anderson Senior Vice President Administration, Investor Relations & Corporate Secretary Phone: (423) 899-5898 Fax: (423) 899-4456 E-mail: sanderson@astecindustries.com

Astec Industries, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

	Dec			Dec
		2019			2018
Assets
Current assets
Cash and cash equivalents	$	48,857		$	25,821
Investments		1,547			1,946
Receivables and contract assets, net		124,847			133,978
Inventories		294,536			355,944
Prepaid expenses and other		36,517			43,302
Total current assets		506,304			560,991
Property and equipment, net		190,363			192,448
Other assets		103,831			102,018
Total assets	$	800,498		$	855,457
Liabilities and equity
Current liabilities
Accounts payable - trade	$	57,162		$	70,614
Other current liabilities		115,605			118,617
Total current liabilities		172,767			189,231
Long-term debt, less current maturities		690			59,709
Non-current liabilities		24,554			21,227
Total equity		602,487			585,290
Total liabilities and equity	$	800,498		$	855,457




Astec Industries, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	Three Months Ended						Twelve Months Ended
	Dec 31						Dec 31
		2019			2018			2019			2018
Net sales	$	283,224		$	317,005		$	1,169,613		$	1,171,599
Cost of sales		255,843			318,636			930,205			1,035,833
Gross profit (loss)		27,381			(1,631	)		239,408			135,766
Selling, general, administrative & engineering expenses		52,554			54,732			211,148			209,127
Restructuring and asset impairment charges		1,773			13,060			3,204			13,060
Income (loss) from operations		(26,946	)		(69,423	)		25,056			(86,421	)
Interest expense		(68	)		(557	)		(1,367	)		(1,045	)
Other		250			11			1,629			1,783
Income (loss) before income taxes		(26,764	)		(69,969	)		25,318			(85,683	)
Income taxes		(8,409	)		(22,932	)		3,012			(25,234	)
Net income (loss) attributable to controlling interest	$	(18,355	)	$	(47,037	)	$	22,306		$	(60,449	)




Earnings (loss) per Common Share
Net income (loss) attributable to controlling interest
Basic	$	(0.81	)	$	(2.08	)	$	0.99		$	(2.64	)
Diluted	$	(0.81	)	$	(2.08	)	$	0.98		$	(2.64	)


Weighted average common shares outstanding
Basic		22,531			22,582			22,515			22,902
Diluted		22,531			22,582			22,674			22,902

Astec Industries, Inc.
Segment Revenues and Profits (Losses)
For the three months ended December 31, 2019 and 2018
(in thousands)
(unaudited)
	Infrastructure Group		Aggregate and Mining Group			Energy Group			Corporate			Total
2019 Revenues	115,671			91,981			75,170			402		283,224
2018 Revenues	124,930			116,064			76,011			-		317,005
Change $	(9,259	)		(24,083	)		(841	)		402		(33,781	)
Change %	(7.4	%)		(20.7	%)		(1.1	%)		-		(10.7	%)

2019 Gross Profit	11,220			13,041			1,465			1,655		27,381
2019 Gross Profit %	9.7	%		14.2	%		1.9	%		411.7	%	9.7	%
2018 Gross Profit (Loss)	(41,462	)		30,347			9,375			109		(1,631	)
2018 Gross Profit (Loss) %	(33.2	%)		26.1	%		12.3	%		-		(0.5	%)
Change	52,682			(17,306	)		(7,910	)		1,546		29,012

2019 Loss	(3,158	)		(179	)		(11,069	)		(4,019	)	(18,425	)
2018 Profit (Loss)	(69,833	)		10,796			(13,336	)		22,015		(50,358	)
Change $	66,675			(10,975	)		2,267			(26,034	)	31,933
Change %	95.5	%		(101.7	%)		17.0	%		(118.3	%)	63.4	%


Segment revenues are reported net of intersegment revenues. Segment gross profit (loss) is net of profit on intersegment
revenues. A reconciliation of total segment losses to the Company's net loss attributable to controlling interest is as follows (in thousands):

			Three months ended December 31
				2019			2018		Change $
Total loss for all segments			$	(18,425	)	$	(50,358	)	$	31,933
Recapture of intersegment profit				64			3,263			(3,199	)
Net loss attributable to non-controlling interest				6			58			(52	)
Net loss attributable to controlling interest			$	(18,355	)	$	(47,037	)	$	28,682


Astec Industries, Inc.
Segment Revenues and Profits (Losses)
For the year ended December 31, 2019 and 2018
(in thousands)
(unaudited)
	Infrastructure Group		Aggregate and Mining Group			Energy Group			Corporate			Total
2019 Revenues	492,118			404,971			272,122			402		1,169,613
2018 Revenues	442,289			453,164			276,146			-		1,171,599
Change $	49,829			(48,193	)		(4,024	)		402		(1,986	)
Change %	11.3	%		(10.6	%)		(1.5	%)		-		(0.2	%)

2019 Gross Profit	105,012			84,917			47,673			1,806		239,408
2019 Gross Profit %	21.3	%		21.0	%		17.5	%		449.3	%	20.5	%
2018 Gross Profit (Loss)	(37,357	)		112,972			59,751			400		135,766
2018 Gross Profit (Loss) %	(8.4	%)		24.9	%		21.6	%		-		11.6	%
Change	142,369			(28,055	)		(12,078	)		1,406		103,642

2019 Profit (Loss)	36,106			22,790			556			(38,440	)	21,012
2018 Profit (Loss)	(112,954	)		45,464			3,070			1,586		(62,834	)
Change $	149,060			(22,674	)		(2,514	)		(40,026	)	83,846
Change %	132.0	%		(49.9	%)		(81.9	%)		(2523.7	%)	133.4	%


Segment revenues are reported net of intersegment revenues. Segment gross profit (loss) is net of profit on intersegment
revenues. A reconciliation of total segment profits (losses) to the Company's net income (loss) attributable to controlling interest is as follows (in thousands):

			Twelve months ended December 31
				2019			2018		Change $
Total profit (loss) for all segments			$	21,012		$	(62,834	)	$	83,846
Recapture of intersegment profit				1,162			2,090			(928	)
Net loss attributable to non-controlling interest				132			295			(163	)
Net income (loss) attributable to controlling interest			$	22,306		$	(60,449	)	$	82,755


Astec Industries, Inc.
Backlog by Segment
December 31, 2019 and 2018
(in thousands)
(unaudited)
	Infrastructure Group		Aggregate and Mining Group			Energy Group			Total
2019 Backlog	139,081			74,127			50,497			263,705
2018 Backlog	149,437			130,691			64,834			344,962
Change $	(10,356	)		(56,564	)		(14,337	)		(81,257	)
Change %	(6.9	%)		(43.3	%)		(22.1	%)		(23.6	%)

Glossary
In its earnings release, Astec refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Non-GAAP financial measures should be considered in addition to, and not in lieu of, GAAP financial measures. Nonetheless, this non-GAAP information can be useful in understanding the Company's operating results and the performance of its core businesses.
The amounts described below are unaudited, reported in thousands of U.S. Dollars (Except Share data), and as of or for the periods indicated.

Q4 2019 GAAP to Non-GAAP Reconciliation Table

	As Reported			Restructuring and			As Adjusted
	(GAAP)			Unusual Charges			(Non-GAAP)
Consolidated
Net Sales	$	283,224		$	-		$	283,224
GP		27,381			32,605			59,986
GP%		9.7	%					21.2	%
Op Income (Loss)		(26,946	)		34,378			7,432
Income Tax (Benefit) Expense		(8,409	)		7,760			(649	)
Net Income (Loss)		(18,355	)		26,618			8,263
EPS		(0.81	)		1.17			0.36
EBITDA		(20,630	)		34,378			13,748
Free Cash Flow		22,870			1,892			24,762


Infrastructure
Net Sales		115,671			-			115,671
GP		11,220			12,098			23,318
GP%		9.7	%					20.2	%
EBITDA		(2,656	)		12,479			9,823

Aggregate and Mining
Net Sales		91,981			-			91,981
GP		13,041			4,260			17,301
GP%		14.2	%					18.8	%
EBITDA		97			4,511			4,608

Energy
Net Sales		75,170			-			75,170
GP		1,465			16,247			17,712
GP%		1.9	%					23.6	%
EBITDA		(9,180	)		17,388			8,208


Q4 2018 GAAP to Non-GAAP Reconciliation Table
	As Reported			Restructuring and			As Adjusted
	(GAAP)			Unusual Charges			(Non-GAAP)
Consolidated
Net Sales	$	317,005		$	-		$	317,005
GP		(1,631	)		77,574			75,943
GP%		(0.5	%)					24.0	%
Op Income (Loss)		(69,423	)		90,634			21,211
Income Tax (Benefit) Expense		(22,932	)		29,628			6,696
Net Income (Loss)		(47,037	)		61,005			13,968
EPS		(2.08	)		2.69			0.61
EBITDA		(62,603	)		90,634			28,031

Infrastructure
Net Sales		124,930			-			124,930
GP		(41,462	)		69,792			28,330
GP%		(33.2	%)					22.7	%
EBITDA		(63,515	)		71,663			8,148

Aggregate and Mining
Net Sales		116,064			-			116,064
GP		30,347			294			30,641
GP%		26.1	%					26.4	%
EBITDA		13,224			294			13,518

Energy
Net Sales		76,011			-			76,011
GP		9,375			7,487			16,862
GP%		12.3	%					22.2	%
EBITDA		(11,708	)		18,677			6,969




FYE 2019 GAAP to Non-GAAP Reconciliation Table

	As Reported			Restructuring and			As Adjusted
	(GAAP)			Unusual Charges			(Non-GAAP)
Consolidated
Net Sales	$	1,169,613		$	(20,000	)	$	1,149,613
Domestic Sales		908,466			(20,000	)		888,466
International Sales		261,147			-			261,147
GP		239,408			12,630			252,038
GP%		20.5	%					21.9	%
Op Income		25,056			15,833			40,889
Income Tax (Benefit) Expense		3,012			2,938			5,950
Net Income		22,306			12,895			35,201
EPS		0.98			0.57			1.55
EBITDA		51,306			15,833			67,139
Free Cash Flow		90,278			(14,380	)		75,898

FYE 2018 GAAP to Non-GAAP Reconciliation Table

	As Reported			Restructuring and			As Adjusted
	(GAAP)			Unusual Charges			(Non-GAAP)
Consolidated
Net Sales	$	1,171,599		$	74,778		$	1,246,377
Domestic Sales		915,814			74,778			990,592
International Sales		255,785			-			255,785
GP		135,766			161,185			296,951
GP%		11.6	%					23.8	%
Op Income (Loss)		(86,421	)		174,245			87,824
Income Tax (Benefit) Expense		(25,234	)		46,502			21,268
Net Income (Loss)		(60,449	)		127,744			67,295
EPS		(2.64	)		5.58			2.94
EBITDA		(57,897	)		174,245			116,348