Astec Industries Reports 2.5% Decrease in Net Sales for Fiscal Year 2024

Astec Industries, Inc. reported a net sales figure of $1,305.1 million for the fiscal year ending December 31, 2024, reflecting a decrease of 2.5% compared to $1,338.2 million in 2023. The company's gross profit also saw a slight decline, falling to $327.9 million from $330.8 million, resulting in a gross margin of 25.1%. However, income from operations plummeted by 52.3% to $23.2 million, while net income attributable to Astec dropped significantly by 87.2% to $4.3 million, translating to diluted earnings per share of $0.19, down from $1.47 in the previous year. The company's backlog decreased by 26.4% to $419.6 million, down from $569.8 million in 2023.

The decline in financial performance was attributed to several factors, including manufacturing inefficiencies and inflationary pressures on materials, labor, and overhead costs. The company also recognized a non-cash goodwill impairment charge of $20.2 million related to its Materials Solutions reporting unit, which was impacted by macroeconomic conditions such as rising interest rates and a decline in the company's share price. Additionally, Astec's strategic transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, has incurred significant costs, with total implementation costs expected to range between $180 million and $200 million by its completion in 2028 or 2029.

Operationally, Astec Industries has made significant changes to its reporting segments, with the Australia and Latin America sites moving from the Infrastructure Solutions segment to the Materials Solutions segment, while Astec Digital was reclassified into the Infrastructure Solutions segment. The company employed 4,148 individuals as of December 31, 2024, with a focus on enhancing employee engagement and safety through various initiatives. The company also reported a 31% increase in its OSHA Recordable Incident Rate, prompting increased safety audits and training to address localized safety issues.

Looking ahead, Astec Industries anticipates continued challenges due to fluctuating market conditions, particularly in the construction and infrastructure sectors, which are sensitive to government spending and economic cycles. The company remains committed to its strategic objectives, including enhancing customer focus and operational excellence, while also navigating the impacts of inflation and supply chain constraints. The outlook for 2025 includes expectations of moderate fluctuations in oil prices and potential increases in steel prices, which could further affect the company's cost structure and profitability.