ASTEC INDUSTRIES INC — Call Transcript 2026

Hello, welcome to the Astec 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 & Investor Relations. Mr. Anderson, you may begin. Thank you, and good morning. Joining me on today's call are Jaco van der Merwe, our Chief Executive Officer, and Brian Harris, our Chief Financial Officer. In just a moment, I'll turn the call over to Jaco 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.astecindustries.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. Now, turning to slide three, I will turn the call over to Jaco. Thank you, Steve. Good morning, everyone, and thank you for joining us. On slide four, we highlight our first quarter and trailing 12 months performance. Net sales for the quarter increased 20.3% and stood at approximately $1.47 billion on a trailing 12 months 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. In the first quarter, we generated $32.6 million of free cash flow. Our Infrastructure Solutions segment continues to see healthy demand for asphalt plants and concrete plants. The outlook remains positive. Challenging markets for forestry and mobile paving equipment persisted. 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 first. The backlog for Materials 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 Astec 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, reflecting a combination of timing effects and near-term cost pressures from tariffs, freight, and sales mix. Overall expenses were also impacted by the CONEXPO-CON/AGG 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-$190 million. On slide five, we reiterate our dedication to creating value for all stakeholders by delivering consistency, profitability, and growth. Driven by our Astec 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, consummating 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 1, 2025, we acquired TerraSource, which boasts the flagship brands of Gundlach, Jeffrey Rader, Pennsylvania Crusher, and Elgin Separation Solutions. Effective January 1, 2026, we welcome the dedicated employees of CWMF to the Astec family. Both organizations are highly respected and are strong culture fits for Astec. 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 & Transportation Builders Association, $261 billion or 75% of those funds have been allocated as of February 28, 2026. These formula funds for highways and bridges have enabled more than 116,500 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 30, 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 Works 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 and Infrastructure Solutions 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 Materials Solutions segment increased to $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. Now I will turn the call over to our Chief Financial Officer, Brian Harris. Thank you, Jaco, and good morning. I'll now discuss our consolidated results for the first quarter, provide segment specific details, and review our liquidity and leverage. Our financial performance for the first quarter and on a trailing 12-month basis is presented on slide 11. Consolidated net sales for the quarter increased 20.3% compared to the same quarter the prior year and grew 11.5% on a trailing 12-month basis. Most of the growth was attributable to the legacy Materials Solutions business and inorganic growth in both segments. Parts and service represented 36.9% of net sales, which compared to 37.1% in the first quarter of 2025. As Jaco mentioned, first quarter expenses from the Conexpo trade show and freight, duty, and tariff expenses impacted first quarter profitability and margins. Operating Adjusted EBITDA declined $4.9 million versus the same period the prior year. For the trailing 12 months, Adjusted EBITDA grew $7.7 million or 6%. Adjusted EBITDA margins for the quarter and trailing month period declined by 310 basis points and 50 basis points, respectively. Based on the aforementioned factors, adjusted earnings per share for the quarter were $0.54 compared to $0.91 in the first quarter of 2025, while down only slightly on a trailing 12-month basis. Moving to our Infrastructure Solutions on slide 12, net sales in this segment were $237 million for the first quarter of 2026 compared to $236 million for the same period in 2025. Our newly acquired business performed as expected, while their contributions were partially offset by legacy equipment volumes that measured to a strong performance the prior year and shortfalls related to timing differences. For the trailing 12-month period, net sales of $858.4 million were down 1.5% compared to the prior year. Segment operating Adjusted EBITDA for the Infrastructure Solutions segment was $34.8 million for the first quarter of 2026 compared to a strong same-quarter comparison in 2025. The $8.1 million difference resulted primarily from higher exhibit and promotional costs, along with increases in freight, duty, and tariffs. For the trailing 12-month period, the difference in segment Adjusted EBITDA was $12.6 million for a decline of 9.1%. Adjusted EBITDA margin stood at 14.7% for the quarter and the 12-month periods, respectively. Our Materials Solutions segment is shown on slide 13. We were pleased to see the continued resurgence of our Materials Solutions legacy products during the first quarter. Net sales included organic and inorganic contributions and combined for an increase of $65.9 million or 70.6% over the first quarter in 2025. For the trailing 12-month period, net sales increased $164.8 million or 36.3%. Segment operating Adjusted EBITDA for the Materials Solutions segment was $8.9 million for the first quarter of 2026 compared to $5.2 million for the same period in 2025. This was an increase of $3.7 million or 71.2%. For the trailing 12 months, operating Adjusted EBITDA increased $22.1 million or 59.6%. Increases were primarily due to the impact of net favorable volume and mix and favorable pricing. As with the Infrastructure Solutions segment, higher exhibit and promotional costs, freight, duty, and tariffs were partial offsets. Adjusted EBITDA margin remained at 5.6% for the first quarters of 2025 and 2026 respectively, and grew 140 basis points to 9.6% on a trailing 12-month basis. Moving to slide 14. Our balance sheet remains strong and is supported by substantial liquidity. At quarter end, we had $73.4 million in cash and cash equivalents, along with $194.1 million in available credit, resulting in total available liquidity of $267.5 million. Including a draw on our revolving credit facility of approximately $70 million for the purchase of CWMF, net debt to Adjusted EBITDA stood at approximately 2.3 times and is within our target range of 1.5-2.5 times. We have the capacity for continued organic and inorganic growth. As we have previously stated, our 2026 outlook entails the following anticipated full-year ranges: Adjusted EBITDA of $170 million-$190 million. An effective tax rate between 25% and 28%. Capital expenditures between $40 million and $50 million. Depreciation and amortization of $55 million-$65 million. The following quarterly ranges: adjusted SG&A of $70 million-$80 million. Interest expense, approximately $7 million. I will now hand the call back to Jaco. Slide 15 provides an overview of the key investment highlights for Astec. Astec has earned a reputation as a reliable provider of internationally recognized brands and high-quality solutions for our customers, and we take pride in this legacy. Our team maintains strong engagement with customers. From recent discussions, we've observed that customers remain optimistic about ongoing activity in the construction market. We are pleased our commitment to operational excellence is delivering results, and we anticipate further improvement going forward. We are confident our initiatives in manufacturing and procurement are boosting efficiency, which will lead to ongoing gains in Adjusted EBITDA. Several exciting opportunities are fueling our growth, including the expansion of our reoccurring aftermarket parts and service business, which remains a key focus for the Astec team, the development of strong pipeline for innovative products, stability associated with the multi-year Federal Highway Program, along with strong state and local funding for infrastructure projects in the U.S. market. Opportunities for growth in both established and emerging international markets, and strong inorganic growth opportunities consistent with our financial objectives. As Brian noted, our strong balance sheet gives us flexibility to invest in growth initiatives and manage our leverage efficiently. Moving on to slide 16. We are excited about our 2026 Investor Day to be held on May 13, 2026. We invite you to join us for this virtual event, which will begin at 8:00 A.M. Eastern Daylight Time. During the presentation, we will share more about who we are, our next year of growth, industry mega trends, our Built to Connect way of doing business, reasons to invest, and our 2030 financial targets. With that, operator, we are ready for questions. At this time, if you would like to ask a question, press star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Steve Ferazani with Sidoti & Co. Your line is open. Morning, Jaco. Morning, Brian. Appreciate all the detail on the call. Jaco, I guess when I looked through the numbers and we, you know, we obviously expected the higher costs related to ConExpo. I mean, the surprising number to me was the gross margin. You covered a couple of reasons for it, and it was particularly soft in the Infrastructure Solutions side. Yeah, can you sort of give us the buckets on how much of it was inflationary freight pressures versus mix versus timing, et cetera, or were there any efficiency letdowns in the quarter? For IS, we definitely saw a different mix this quarter compared to, you know, what we saw as a very strong Q1 last year. We did see a lower asphalt plants and parts business during the quarter, which obviously pulled down margins a little bit. You know, when we look at this business, and we've talked about this a lot in the past that if you have one or two plants move out from one quarter to the next, it can make a pretty big difference. Yeah if you take a breakdown there, you know, capital and parts, you know, we saw a reduction in both of those. Tariffs did affect them a little bit to a lesser extent than what we've seen on the Materials Solutions group. You know, we are managing that going forward. I think I mentioned in prior calls that we moved really quickly when it came to pricing when all the tariffs. Right things came to light. Some of that is maybe just timing, catching up to the pricing. We also have, you know, additional pricing that is in the pipeline that should mitigate this in the quarters to come. That, yeah, that's, I mean, you probably know the follow-up question with which is, you know, given the numbers in Q1, your confidence level to hit those full year targets, given the. Yeah the year-over-year difference. If it's pure mix, and the timing is you're gonna be more plant and parts heavy into Q, and you got the pricing in, I get it. I'm just trying to see if there's anything else here that should be cause for concern. Yeah. No, look, I mean, look at backlog. We are very encouraged by strong backlog. We have, you know, another positive book-to-bill quarter, which is always nice. We have, you know, definitely additional pricing in the pipeline. We are continuously evaluating, you know, the cost that's coming from these macro trends. We are also very encouraged about the work our teams are doing to improve our quality cost and our operational efforts. Steve, we obviously, you know, still confident. That's why we kept the guidance for the year. Yep for the full year. You know, with that strong backlog, we feel that we have the opportunity to achieve that. I mean, we saw the, how much of the order shift sequentially was seasonality? From an invoicing point of view or a bookings, point of view? The implied orders, the reported implied orders. Do you owe that to seasonality and timing? Yeah. I mean, if you look at implied orders for IS, quarter-over-quarter, it was pretty flat. Obviously we have CWMF in that number now. Right. On MS quarter-over-quarter, that's where we saw the biggest variance. You know, those came on top of Q4, which is typically our strongest. Right booking quarter. Overall backlog, if you look at the backlog and the book-to-bill ratio, both positive in MS and in IS. That's why we like to give the annual guidance and not try to guide on a quarterly basis. Understand. We know we're gonna have these quarterly fluctuations. If you could just touch on synergy realization, where you are with integration of the acquisitions and potential synergy realization over the next multiple quarters. Yeah. Yeah. We are very, very happy with the way the integrations are going. From a synergy point of view, the realization is coming through the pipeline now, pretty quickly. I will say the synergies on the CWMF acquisition is coming in, you know, faster than what we saw on TSG, just because, you know, it's so close to home. We do business with a lot of the same suppliers. We're pretty positive there. The number that we gave the street for synergies on TSG, we're very confident that, you know, over the next 12 months, we're gonna realize those. If I could get one more in in terms of obviously, you've been generating much stronger parts and aftermarket numbers. Some of that's from the acquisitions, but I know that was a priority when you became CEO, Jaco. Where are you in that progress, and is there a lot more to go, or do you feel like you've achieved a lot of what you wanted to? Yeah, no. In my mind, there's a lot more to go. You know, during Q1, which is typically a strong parts quarter for us, we were close to 37% parts and service. You know, next week, we're going to have our Investor Day, where we're gonna talk about our aspirations there. Okay See, we still see significant opportunity to improve that mix. Great. Thanks, Jaco. Thanks, Brian. Your next question comes from the line of Steven Ramsey with Thompson Research Group. Your line is open. Hey, good morning. Thanks for taking my questions. I wanted to start with obviously the topic of the day, demand data centers. You cited strong demand from this market. I'm curious if you could ballpark how much of a contributor that was in the quarter, and maybe compare that to last year. And then maybe go through your success here, if it's following your customers versus intentional initiatives to capture this demand. Yeah, Steve. Morning. Good question. You know, the data center demand and actually some of the other demand around chip factories and things like that is obviously something that we are keeping a very close eye on. If you look at our backlog for the MS group, it's up significantly year-over-year, and even during the quarter, it increased nicely. Steven, we see the benefit from that. It is a little bit difficult for us to track it specifically just for data centers or other, you know, onshoring. What I will say is, obviously our customers that provides aggregates to these markets are very close to these markets. They typically, you know, enjoy the business if they work in a 30 or 50-mile radius from where the construction goes. We enjoy business with all of those customers. You know, we see cases where customers need to increase output, some cases as much as 10 times what they did in prior years just to deal with the demand that's coming from these data centers. We don't, we don't have a specific number there, Steven. We are looking at a way to try to track that. But I think if you look at the big aggregate suppliers, you know, they are very outspoken about the effect this have. Obviously, you know, we do business with all of those companies, and that's where we see the benefit. We have seen some uptick in our industrial heating space, that is in the Infrastructure group, you know, also supplying to data centers, but to a much lesser extent than what we've seen on the Materials Solutions side. Okay, that's very helpful. Wanted to think about order activity from the perspective of market share and how your orders are comparing to the marketplace. Do you feel like you're tracking the market or do you feel like you're gaining share overall or just any pockets of strength within orders? Yeah. I will say we don't feel that we're losing market share anywhere. You know, obviously, we have various product lines that is in our portfolio. We feel very good about our product portfolio that we have. I mean, you joined us on the stage for CONEXPO. We were very encouraged by the reaction from the market on all the new products that we showcased at CONEXPO. You know, when you have new products, the positive flow through typically result in you taking some market share. We have, over the last year or two in the Materials Solutions side, put a renewed focus on large system sales, and we are definitely seeing the positive momentum from that product line and, you know, we believe that will continue. Maybe one last comment. You know, the work that we're doing on our digital platform, we are definitely seeing positive reaction from our customer base. We are talking and, you know, growing that business significantly through, you know, especially our major customers transitioning to one platform. In various examples, you know, they've chosen us to be that platform provider, so. That will have a positive effect, you know, in the future on equipment sales. It will have a positive effect on our parts and service sales. Okay, that's great. Last one from me, you had very strong free cash flow in the quarter. Feels like much of that was working capital driven. If you zoom out and look forward, can you give a general view on free cash flow conversion out of adjusted EBITDA? Thanks. Yes, Steve, it's Brian here. Thanks for the question. Yeah, look, I think that's going to continue to be pretty strong. You're right, that in the quarter we did benefit from working capital movement. Our inventory was actually down quite a bit from the year-end position. A lot of that is in raw material, but raw material and finished goods were both down. We had, you know, Q4 is always a big sales quarter, so we had some good cash collections in Q1 as well. I think that trend, there's a bit of seasonality in the business, so working capital will move up and down during the course of the year. I think the underlying efficiency of our working capital, our working capital turns certainly improved in the quarter, and we'd expect to see that continue. We have a pretty strong operating cash flow in the quarter and in the balance of the year. I think conversion ratio will be good. That's great. Thank you all. Thank you. Again, if you would like to ask a question, press star one on your telephone keypad, and we'll pause for just a moment. Your next question comes to the line of David MacGregor with Longbow Research. Your line is open. Yes. Good morning, everyone. Hey, David. Good morning. I guess my first question was for Brian and just wanted to go back to the whole discussion around price cost. You I think were very clear in your prepared remarks about, you know, the timing of price traction versus, you know, the emerging cost inflation. You used FIFO cost on your balance sheet. You've got some pretty good visibility, I guess, on what's coming up here over the next couple of quarters. Can you just talk about, you know, what you see coming in the backlog versus the pricing initiatives you have in the marketplace today and how that should play into 2Q or second half? Obviously, you've left the guidance unchanged, you're expecting some kind of recovery. I'm just trying to get some sense of cadence or timing around those margin dynamics. Look, I think if you go back to that Q1 of 2025, we had a gross margin of over 28%. If anything, that was the little bit of an outlier when you look at Q1 historically. That was because we got ahead of the game, we talked about this before on pricing. So the tariff situation cost didn't really begin to materialize till April and beyond. We had a strong comp in Q1 of 2025. Tariffs kicked in this quarter to a greater extent. We felt, you know, cover a lot of the underlying inflation outside of tariffs with our pricing initiatives. We've got more pricing that we can implement here in the balance of the year, and we're very careful about making sure that we try to anticipate those costs when we quote. The price that we quote that's in our backlog should accommodate our anticipated inflation and tariff increases that are coming. Obviously, freight and duties related to higher diesel and hydrocarbon costs are another factor certainly affecting things in the short term and has a little bit of uncertainty in the balance of the year. We're trying very hard to make sure that when we price our products in the market, that we're taking that into account. Right. Just to try to summarize on this, is this something where we are still going to see some year-over-year margin pressure in Q2 before it is fully normalized in the second half? You know, it's possible but I think you two we're going to emerge with stronger margins in the second quarter than we saw in the first. Okay, good. I guess second question, maybe for Jaco. You know, how much of a catalyst do you think a highway bill reauthorization will be to just order releases? I'm just trying to get a sense of, from your conversations with your counterparts in the marketplace if you sense that people are maybe holding off on purchase orders until there is a bill in place. Yeah. Yeah, David, I mean, you know, I will tell you, obviously everybody knows that there's a lot going on in the world right now. You know, our industry has been hit with, you know, inflationary pressures around, like Brian just said, fuel prices. You know, tariffs obviously is something. A highway bill, I will say for smaller players in the market, typically a highway bill, gives a lot of confidence because, you know, if you're gonna buy an asphalt plant, you know that there's gonna be, you know, three to five years of good funding available. You know, our industry has gone through significant customer consolidation, as you guys know. You know, I think our bigger customers are better managing their CapEx through different cycles and or maybe less prone to, you know, cut spend, you know, without the clarity of a infrastructure bill. What I will say is, you know, we are very involved with our trade organizations. We're very involved talking to the respective people involved in creating the highway bill. You know, just this morning, actually, I received a note from our team at NAPA, the National Asphalt Pavement Association, they think that the first language around the bill could be published as early as the 18th of May. We're looking forward to that. We know that there's discussions taking place right now. We know that, you know, like we said in the prepared remarks, you know, this is something where government actually works together very well on. We're positive that we're gonna see a bill. Hopefully, it comes sooner than later. You know, the good thing is that funding is available for the full year this year, our customers are busy. They have a lot of work. You know, and a highway bill that's focused on roads and bridges, I think will be a nice injection for, you know, 2027 and beyond. Right. Right. That's great color. Thank you for that. Next question I just wanted to ask you around the whole notion of price analytics and you've been investing in price analytics here. I'm just trying to get a sense of, you know, where we are in that journey, from a margin development standpoint. Do you feel like you're still in the early innings of the kind of the efficacy of that, of that investment? I guess at a point in time where we're really trying to sort of wrestle through price cost here, you know, this is a pretty key part of the story. I guess that's where you are on this. Yeah. I will say from a process point of view, we in, you know, probably in the best state that Astec has been in for many years. Now, you know, on the flip side is obviously the variability right now is big. Our teams are continuously looking at movement in, you know, prices that we buy versus what we sell for. Our procurement team is very actively renegotiating as tariffs change. I mean, as you guys know, there's actually some of the tariffs that should start to lower over coming periods. You know, getting that then back from suppliers is key focus for us. David, yeah, we feel that we have a good process in place, but, you know, the amount of variability that's happening on a daily basis is definitely challenging for the team. At least we have a team, we have a process, and it gives us much better, you know, outlook than what we had before. Okay, good. I wanted to ask you about Astec Signal. You talked about Conexpo. There was a good reaction there to the new product rollout. Just trying to get a sense of what kind of reaction you got specifically to the Signal platform. From that reaction, what's your sense of sort of the ability of that technology to accelerate placement cycles? Yeah. We're very excited about that, David. I mean, we are investing significantly in further, you know, developing the platform. We're investing in additional manufacturing capability. You know, next time when you're in Chattanooga, we'll show you that. We think that this is just starting. We have a really good platform. It's gonna provide a lot of benefits both to us and our customers in the future. You know, overall, the section has been really positive. We'll talk quite a bit more about Signal during our Investor Day next week as well. Great. Great. Then last question, Brian, where do you see the balance sheet leverage at year-end based on the guidance you've got right now? Yeah. Look, David, I think if you take the midpoint of the guidance, we should end somewhere around about 1.7 times. Got it. Thanks very much. Thank you. Now, I'll turn the call over to Steve Anderson, Senior Vice President of Investor Relations. Thank you, Rebecca. We appreciate everyone's participation in our conference call this morning, and thank you for your interest in Astec. As today's news release states, the conference call has been recorded. A replay of this conference call will be available through May 20, 2026, and an archived webcast will be available for 90 days. The transcript will be available under the Investor Relations section of the Astec Industries website within the next 5 business days. This concludes our call, but as always, feel free to contact me with any additional questions. Thank you. Have a good day. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

Speaker 4: Hello, welcome to the Astec 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 & Investor Relations. Mr. Anderson, you may begin. Hello, welcome to the Astec Industries first quarter 2026 earnings call. hello welcome to the astec industries first quarter 2026 earnings call As a reminder, this conference call is being recorded. as a reminder this conference call is being recorded It is my pleasure to introduce your host, Steve Anderson, Senior Vice President of Administration & Investor Relations. it is my pleasure to introduce your host steve anderson senior vice president of administration & investor relations Mr. Anderson, you may begin. mr anderson you may begin

Speaker 5: Thank you, and good morning. Joining me on today's call are Jaco van der Merwe, our Chief Executive Officer, and Brian Harris, our Chief Financial Officer. In just a moment, I'll turn the call over to Jaco 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.astecindustries.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. Thank you, and good morning. thank you and good morning Joining me on today's call are Jaco van der Merwe, our Chief Executive Officer, and Brian Harris, our Chief Financial Officer. joining me on today's call are jaco van der merwe our chief executive officer and brian harris our chief financial officer In just a moment, I'll turn the call over to Jaco to provide his comments, then Brian will summarize our financial results. in just a moment i'll turn the call over to jaco 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.astecindustries.com. for your convenience a copy of our press release and presentations have been posted on our website under the investor relations tab at www.astecindustries.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. 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. 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. 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. Now, turning to slide three, I will turn the call over to Jaco. We also refer to various U.S. we also refer to various u.s GAAP and non-GAAP financial measures, which management believes provide useful information to investors. 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. 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. 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. 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. a reconciliation of gaap to non-gaap results are included in our news release in the appendix of our slide presentation Now, turning to slide three, I will turn the call over to Jaco. now turning to slide three i will turn the call over to jaco

Speaker 3: Thank you, Steve. Good morning, everyone, and thank you for joining us. On slide four, we highlight our first quarter and trailing 12 months performance. Net sales for the quarter increased 20.3% and stood at approximately $1.47 billion on a trailing 12 months 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. In the first quarter, we generated $32.6 million of free cash flow. Thank you, Steve. thank you steve Good morning, everyone, and thank you for joining us. good morning everyone and thank you for joining us On slide four, we highlight our first quarter and trailing 12 months performance. on slide four we highlight our first quarter and trailing 12 months performance Net sales for the quarter increased 20.3% and stood at approximately $1.47 billion on a trailing 12 months basis from a combination of organic growth and inorganic contributions. net sales for the quarter increased 20.3% and stood at approximately $1.47 billion on a trailing 12 months 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%. 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. 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. positive free cash flow afford us opportunity to invest in organic and inorganic growth opportunities In the first quarter, we generated $32.6 million of free cash flow. in the first quarter we generated $32.6 million of free cash flow Our Infrastructure Solutions segment continues to see healthy demand for asphalt plants and concrete plants. The outlook remains positive. Challenging markets for forestry and mobile paving equipment persisted. 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 first. The backlog for Materials 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 Astec 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. Our Infrastructure Solutions segment continues to see healthy demand for asphalt plants and concrete plants. our infrastructure solutions segment continues to see healthy demand for asphalt plants and concrete plants The outlook remains positive. the outlook remains positive Challenging markets for forestry and mobile paving equipment persisted. challenging markets for forestry and mobile paving equipment persisted We are pleased to see a recent uptick in backlog for these products. 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 first. the total segment backlog increased $37 million including $17 million contributed by cwmf which joined astec on january first The backlog for Materials Solutions increased $110 million or 87% from a balance of organic and inorganic contributions. the backlog for materials 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 Astec products in both segments. given the stability of federal funding healthy state budgets and incremental business from data centers and onshoring activities we expect positive multiyear demand for astec 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. 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, reflecting a combination of timing effects and near-term cost pressures from tariffs, freight, and sales mix. Overall expenses were also impacted by the CONEXPO-CON/AGG 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-$190 million. On slide five, we reiterate our dedication to creating value for all stakeholders by delivering consistency, profitability, and growth. Driven by our Astec 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. Q1 profitability was lower than planned, reflecting a combination of timing effects and near-term cost pressures from tariffs, freight, and sales mix. q1 profitability was lower than planned reflecting a combination of timing effects and near-term cost pressures from tariffs freight and sales mix Overall expenses were also impacted by the CONEXPO-CON/AGG trade show that occurs once every three years. overall expenses were also impacted by the conexpo-con/agg trade show that occurs once every three years We are, however, encouraged by increased backlogs in each segment, and we expect better quarters ahead. 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-$190 million. as such we are maintaining our full year 2026 adjusted ebitda guidance range of $170 million-$190 million On slide five, we reiterate our dedication to creating value for all stakeholders by delivering consistency, profitability, and growth. on slide five we reiterate our dedication to creating value for all stakeholders by delivering consistency profitability and growth Driven by our Astec 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. driven by our astec 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, consummating 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 1, 2025, we acquired TerraSource, which boasts the flagship brands of Gundlach, Jeffrey Rader, Pennsylvania Crusher, and Elgin Separation Solutions. Effective January 1, 2026, we welcome the dedicated employees of CWMF to the Astec family. Both organizations are highly respected and are strong culture fits for Astec. We are off to a great start. As our historical Adjusted EBITDA margin in the middle column shows, we have increased profitability in each of the last three years. 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. growth provides scale and scale enhances profitability We are making strides in growing aftermarket parts and service sales, consummating acquisitions, developing new products, and leveraging the technology and digital connectivity we bring to the market. we are making strides in growing aftermarket parts and service sales consummating 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. 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 1, 2025, we acquired TerraSource, which boasts the flagship brands of Gundlach, Jeffrey Rader, Pennsylvania Crusher, and Elgin Separation Solutions. on slide six we provide an update on the integration of our most recent acquired companies. on july 1 2025 we acquired terrasource which boasts the flagship brands of gundlach jeffrey rader pennsylvania crusher and elgin separation solutions Effective January 1, 2026, we welcome the dedicated employees of CWMF to the Astec family. effective january 1 2026 we welcome the dedicated employees of cwmf to the astec family Both organizations are highly respected and are strong culture fits for Astec. both organizations are highly respected and are strong culture fits for astec We are off to a great start. 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. Many integration processes are now complete, including the seamless addition of new employees to our payroll, benefits, and email systems. 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. 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. 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. 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. our joint teams work well together and we anticipate many benefits in 2026 Please turn to slide seven. 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. 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. 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. in 2022 congress passed a five-year infrastructure bill valued at $347.5 billion According to the American Road & Transportation Builders Association, $261 billion or 75% of those funds have been allocated as of February 28, 2026. These formula funds for highways and bridges have enabled more than 116,500 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 30, 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 Works committees. According to the American Road & Transportation Builders Association, $261 billion or 75% of those funds have been allocated as of February 28, 2026. according to the american road & transportation builders association $261 billion or 75% of those funds have been allocated as of february 28 2026 These formula funds for highways and bridges have enabled more than 116,500 new products across our country. these formula funds for highways and bridges have enabled more than 116,500 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. 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. this was a new record The existing five-year bill is set to expire on September 30, 2026. the existing five-year bill is set to expire on september 30 2026 The renewal of the bill has bipartisan support. 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 Works committees. this is evidenced by the stance of key members of the house transportation and infrastructure and the senate environment and public works 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. 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. 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. 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. 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. 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. 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. 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 and Infrastructure Solutions 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. Implied orders of $397 million compared to a strong fourth quarter of $465 million. 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. 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%. 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. 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%. this was an overall increase of $146 million or 36% The backlog and Infrastructure Solutions 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. the backlog and infrastructure solutions 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 Materials Solutions segment increased to $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. Now I will turn the call over to our Chief Financial Officer, Brian Harris. Backlog in the Materials Solutions segment increased to $110 million or 87% over the same period the prior year from a combination of legacy and inorganic contributions. backlog in the materials solutions segment increased to $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. 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. we are pleased with the order activity in both of our segments Now I will turn the call over to our Chief Financial Officer, Brian Harris. now i will turn the call over to our chief financial officer brian harris

Speaker 1: Thank you, Jaco, and good morning. I'll now discuss our consolidated results for the first quarter, provide segment specific details, and review our liquidity and leverage. Our financial performance for the first quarter and on a trailing 12-month basis is presented on slide 11. Consolidated net sales for the quarter increased 20.3% compared to the same quarter the prior year and grew 11.5% on a trailing 12-month basis. Most of the growth was attributable to the legacy Materials Solutions business and inorganic growth in both segments. Parts and service represented 36.9% of net sales, which compared to 37.1% in the first quarter of 2025. As Jaco mentioned, first quarter expenses from the Conexpo trade show and freight, duty, and tariff expenses impacted first quarter profitability and margins. Thank you, Jaco, and good morning. thank you jaco and good morning I'll now discuss our consolidated results for the first quarter, provide segment specific details, and review our liquidity and leverage. i'll now discuss our consolidated results for the first quarter provide segment specific details and review our liquidity and leverage Our financial performance for the first quarter and on a trailing 12-month basis is presented on slide 11. Consolidated net sales for the quarter increased 20.3% compared to the same quarter the prior year and grew 11.5% on a trailing 12-month basis. our financial performance for the first quarter and on a trailing 12-month basis is presented on slide 11. consolidated net sales for the quarter increased 20.3% compared to the same quarter the prior year and grew 11.5% on a trailing 12-month basis Most of the growth was attributable to the legacy Materials Solutions business and inorganic growth in both segments. most of the growth was attributable to the legacy materials solutions business and inorganic growth in both segments Parts and service represented 36.9% of net sales, which compared to 37.1% in the first quarter of 2025. parts and service represented 36.9% of net sales which compared to 37.1% in the first quarter of 2025 As Jaco mentioned, first quarter expenses from the Conexpo trade show and freight, duty, and tariff expenses impacted first quarter profitability and margins. as jaco mentioned first quarter expenses from the conexpo trade show and freight duty and tariff expenses impacted first quarter profitability and margins Operating Adjusted EBITDA declined $4.9 million versus the same period the prior year. For the trailing 12 months, Adjusted EBITDA grew $7.7 million or 6%. Adjusted EBITDA margins for the quarter and trailing month period declined by 310 basis points and 50 basis points, respectively. Based on the aforementioned factors, adjusted earnings per share for the quarter were $0.54 compared to $0.91 in the first quarter of 2025, while down only slightly on a trailing 12-month basis. Moving to our Infrastructure Solutions on slide 12, net sales in this segment were $237 million for the first quarter of 2026 compared to $236 million for the same period in 2025. Operating Adjusted EBITDA declined $4.9 million versus the same period the prior year. operating adjusted ebitda declined $4.9 million versus the same period the prior year For the trailing 12 months, Adjusted EBITDA grew $7.7 million or 6%. for the trailing 12 months adjusted ebitda grew $7.7 million or 6% Adjusted EBITDA margins for the quarter and trailing month period declined by 310 basis points and 50 basis points, respectively. adjusted ebitda margins for the quarter and trailing month period declined by 310 basis points and 50 basis points respectively Based on the aforementioned factors, adjusted earnings per share for the quarter were $0.54 compared to $0.91 in the first quarter of 2025, while down only slightly on a trailing 12-month basis. based on the aforementioned factors adjusted earnings per share for the quarter were $0.54 compared to $0.91 in the first quarter of 2025 while down only slightly on a trailing 12-month basis Moving to our Infrastructure Solutions on slide 12, net sales in this segment were $237 million for the first quarter of 2026 compared to $236 million for the same period in 2025. moving to our infrastructure solutions on slide 12 net sales in this segment were $237 million for the first quarter of 2026 compared to $236 million for the same period in 2025 Our newly acquired business performed as expected, while their contributions were partially offset by legacy equipment volumes that measured to a strong performance the prior year and shortfalls related to timing differences. For the trailing 12-month period, net sales of $858.4 million were down 1.5% compared to the prior year. Segment operating Adjusted EBITDA for the Infrastructure Solutions segment was $34.8 million for the first quarter of 2026 compared to a strong same-quarter comparison in 2025. The $8.1 million difference resulted primarily from higher exhibit and promotional costs, along with increases in freight, duty, and tariffs. For the trailing 12-month period, the difference in segment Adjusted EBITDA was $12.6 million for a decline of 9.1%. Our newly acquired business performed as expected, while their contributions were partially offset by legacy equipment volumes that measured to a strong performance the prior year and shortfalls related to timing differences. our newly acquired business performed as expected while their contributions were partially offset by legacy equipment volumes that measured to a strong performance the prior year and shortfalls related to timing differences For the trailing 12-month period, net sales of $858.4 million were down 1.5% compared to the prior year. for the trailing 12-month period net sales of $858.4 million were down 1.5% compared to the prior year Segment operating Adjusted EBITDA for the Infrastructure Solutions segment was $34.8 million for the first quarter of 2026 compared to a strong same-quarter comparison in 2025. segment operating adjusted ebitda for the infrastructure solutions segment was $34.8 million for the first quarter of 2026 compared to a strong same-quarter comparison in 2025 The $8.1 million difference resulted primarily from higher exhibit and promotional costs, along with increases in freight, duty, and tariffs. the $8.1 million difference resulted primarily from higher exhibit and promotional costs along with increases in freight duty and tariffs For the trailing 12-month period, the difference in segment Adjusted EBITDA was $12.6 million for a decline of 9.1%. for the trailing 12-month period the difference in segment adjusted ebitda was $12.6 million for a decline of 9.1% Adjusted EBITDA margin stood at 14.7% for the quarter and the 12-month periods, respectively. Our Materials Solutions segment is shown on slide 13. We were pleased to see the continued resurgence of our Materials Solutions legacy products during the first quarter. Net sales included organic and inorganic contributions and combined for an increase of $65.9 million or 70.6% over the first quarter in 2025. For the trailing 12-month period, net sales increased $164.8 million or 36.3%. Segment operating Adjusted EBITDA for the Materials Solutions segment was $8.9 million for the first quarter of 2026 compared to $5.2 million for the same period in 2025. This was an increase of $3.7 million or 71.2%. Adjusted EBITDA margin stood at 14.7% for the quarter and the 12-month periods, respectively. adjusted ebitda margin stood at 14.7% for the quarter and the 12-month periods respectively Our Materials Solutions segment is shown on slide 13. our materials solutions segment is shown on slide 13 We were pleased to see the continued resurgence of our Materials Solutions legacy products during the first quarter. we were pleased to see the continued resurgence of our materials solutions legacy products during the first quarter Net sales included organic and inorganic contributions and combined for an increase of $65.9 million or 70.6% over the first quarter in 2025. net sales included organic and inorganic contributions and combined for an increase of $65.9 million or 70.6% over the first quarter in 2025 For the trailing 12-month period, net sales increased $164.8 million or 36.3%. for the trailing 12-month period net sales increased $164.8 million or 36.3% Segment operating Adjusted EBITDA for the Materials Solutions segment was $8.9 million for the first quarter of 2026 compared to $5.2 million for the same period in 2025. segment operating adjusted ebitda for the materials solutions segment was $8.9 million for the first quarter of 2026 compared to $5.2 million for the same period in 2025 This was an increase of $3.7 million or 71.2%. this was an increase of $3.7 million or 71.2% For the trailing 12 months, operating Adjusted EBITDA increased $22.1 million or 59.6%. Increases were primarily due to the impact of net favorable volume and mix and favorable pricing. As with the Infrastructure Solutions segment, higher exhibit and promotional costs, freight, duty, and tariffs were partial offsets. Adjusted EBITDA margin remained at 5.6% for the first quarters of 2025 and 2026 respectively, and grew 140 basis points to 9.6% on a trailing 12-month basis. Moving to slide 14. Our balance sheet remains strong and is supported by substantial liquidity. At quarter end, we had $73.4 million in cash and cash equivalents, along with $194.1 million in available credit, resulting in total available liquidity of $267.5 million. For the trailing 12 months, operating Adjusted EBITDA increased $22.1 million or 59.6%. for the trailing 12 months operating adjusted ebitda increased $22.1 million or 59.6% Increases were primarily due to the impact of net favorable volume and mix and favorable pricing. increases were primarily due to the impact of net favorable volume and mix and favorable pricing As with the Infrastructure Solutions segment, higher exhibit and promotional costs, freight, duty, and tariffs were partial offsets. as with the infrastructure solutions segment higher exhibit and promotional costs freight duty and tariffs were partial offsets Adjusted EBITDA margin remained at 5.6% for the first quarters of 2025 and 2026 respectively, and grew 140 basis points to 9.6% on a trailing 12-month basis. adjusted ebitda margin remained at 5.6% for the first quarters of 2025 and 2026 respectively and grew 140 basis points to 9.6% on a trailing 12-month basis Moving to slide 14. moving to slide 14 Our balance sheet remains strong and is supported by substantial liquidity. our balance sheet remains strong and is supported by substantial liquidity At quarter end, we had $73.4 million in cash and cash equivalents, along with $194.1 million in available credit, resulting in total available liquidity of $267.5 million. at quarter end we had $73.4 million in cash and cash equivalents along with $194.1 million in available credit resulting in total available liquidity of $267.5 million Including a draw on our revolving credit facility of approximately $70 million for the purchase of CWMF, net debt to Adjusted EBITDA stood at approximately 2.3 times and is within our target range of 1.5-2.5 times. We have the capacity for continued organic and inorganic growth. As we have previously stated, our 2026 outlook entails the following anticipated full-year ranges: Adjusted EBITDA of $170 million-$190 million. An effective tax rate between 25% and 28%. Capital expenditures between $40 million and $50 million. Depreciation and amortization of $55 million-$65 million. The following quarterly ranges: adjusted SG&A of $70 million-$80 million. Interest expense, approximately $7 million. I will now hand the call back to Jaco. Including a draw on our revolving credit facility of approximately $70 million for the purchase of CWMF, net debt to Adjusted EBITDA stood at approximately 2.3 times and is within our target range of 1.5-2.5 times. including a draw on our revolving credit facility of approximately $70 million for the purchase of cwmf net debt to adjusted ebitda stood at approximately 2.3 times and is within our target range of 1.5-2.5 times We have the capacity for continued organic and inorganic growth. we have the capacity for continued organic and inorganic growth As we have previously stated, our 2026 outlook entails the following anticipated full-year ranges: Adjusted EBITDA of $170 million-$190 million. as we have previously stated our 2026 outlook entails the following anticipated full-year ranges adjusted ebitda of $170 million-$190 million An effective tax rate between 25% and 28%. an effective tax rate between 25% and 28% Capital expenditures between $40 million and $50 million. capital expenditures between $40 million and $50 million Depreciation and amortization of $55 million-$65 million. depreciation and amortization of $55 million-$65 million The following quarterly ranges: adjusted SG&A of $70 million-$80 million. the following quarterly ranges adjusted sg&a of $70 million-$80 million Interest expense, approximately $7 million. interest expense approximately $7 million I will now hand the call back to Jaco. i will now hand the call back to jaco

Speaker 3: Slide 15 provides an overview of the key investment highlights for Astec. Slide 15 provides an overview of the key investment highlights for Astec. slide 15 provides an overview of the key investment highlights for astec Astec has earned a reputation as a reliable provider of internationally recognized brands and high-quality solutions for our customers, and we take pride in this legacy. Our team maintains strong engagement with customers. From recent discussions, we've observed that customers remain optimistic about ongoing activity in the construction market. We are pleased our commitment to operational excellence is delivering results, and we anticipate further improvement going forward. We are confident our initiatives in manufacturing and procurement are boosting efficiency, which will lead to ongoing gains in Adjusted EBITDA. Several exciting opportunities are fueling our growth, including the expansion of our reoccurring aftermarket parts and service business, which remains a key focus for the Astec team, the development of strong pipeline for innovative products, stability associated with the multi-year Federal Highway Program, along with strong state and local funding for infrastructure projects in the U.S. market. Astec has earned a reputation as a reliable provider of internationally recognized brands and high-quality solutions for our customers, and we take pride in this legacy. astec has earned a reputation as a reliable provider of internationally recognized brands and high-quality solutions for our customers and we take pride in this legacy Our team maintains strong engagement with customers. our team maintains strong engagement with customers From recent discussions, we've observed that customers remain optimistic about ongoing activity in the construction market. from recent discussions we've observed that customers remain optimistic about ongoing activity in the construction market We are pleased our commitment to operational excellence is delivering results, and we anticipate further improvement going forward. we are pleased our commitment to operational excellence is delivering results and we anticipate further improvement going forward We are confident our initiatives in manufacturing and procurement are boosting efficiency, which will lead to ongoing gains in Adjusted EBITDA. we are confident our initiatives in manufacturing and procurement are boosting efficiency which will lead to ongoing gains in adjusted ebitda Several exciting opportunities are fueling our growth, including the expansion of our reoccurring aftermarket parts and service business, which remains a key focus for the Astec team, the development of strong pipeline for innovative products, stability associated with the multi-year Federal Highway Program, along with strong state and local funding for infrastructure projects in the U.S. market. several exciting opportunities are fueling our growth including the expansion of our reoccurring aftermarket parts and service business which remains a key focus for the astec team the development of strong pipeline for innovative products stability associated with the multi-year federal highway program along with strong state and local funding for infrastructure projects in the u.s market Opportunities for growth in both established and emerging international markets, and strong inorganic growth opportunities consistent with our financial objectives. As Brian noted, our strong balance sheet gives us flexibility to invest in growth initiatives and manage our leverage efficiently. Moving on to slide 16. We are excited about our 2026 Investor Day to be held on May 13, 2026. We invite you to join us for this virtual event, which will begin at 8:00 A.M. Eastern Daylight Time. During the presentation, we will share more about who we are, our next year of growth, industry mega trends, our Built to Connect way of doing business, reasons to invest, and our 2030 financial targets. With that, operator, we are ready for questions. Opportunities for growth in both established and emerging international markets, and strong inorganic growth opportunities consistent with our financial objectives. opportunities for growth in both established and emerging international markets and strong inorganic growth opportunities consistent with our financial objectives As Brian noted, our strong balance sheet gives us flexibility to invest in growth initiatives and manage our leverage efficiently. as brian noted our strong balance sheet gives us flexibility to invest in growth initiatives and manage our leverage efficiently Moving on to slide 16. moving on to slide 16 We are excited about our 2026 Investor Day to be held on May 13, 2026. we are excited about our 2026 investor day to be held on may 13 2026 We invite you to join us for this virtual event, which will begin at 8:00 A.M. we invite you to join us for this virtual event which will begin at 8:00 a.m Eastern Daylight Time. eastern daylight time During the presentation, we will share more about who we are, our next year of growth, industry mega trends, our Built to Connect way of doing business, reasons to invest, and our 2030 financial targets. during the presentation we will share more about who we are our next year of growth industry mega trends our built to connect way of doing business reasons to invest and our 2030 financial targets With that, operator, we are ready for questions. with that operator we are ready for questions

Speaker 4: At this time, if you would like to ask a question, press star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Steve Ferazani with Sidoti & Co. Your line is open. At this time, if you would like to ask a question, press star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Steve Ferazani with Sidoti & Co. at this time, if you would like to ask a question, press star one on your telephone keypad. we'll pause for just a moment to compile the q&a roster. your first question comes from the line of steve ferazani with sidoti & co Your line is open. your line is open

Speaker 6: Morning, Jaco. Morning, Brian. Appreciate all the detail on the call. Jaco, I guess when I looked through the numbers and we, you know, we obviously expected the higher costs related to ConExpo. I mean, the surprising number to me was the gross margin. You covered a couple of reasons for it, and it was particularly soft in the Infrastructure Solutions side. Yeah, can you sort of give us the buckets on how much of it was inflationary freight pressures versus mix versus timing, et cetera, or were there any efficiency letdowns in the quarter? Morning, Jaco. morning jaco Morning, Brian. morning brian Appreciate all the detail on the call. appreciate all the detail on the call Jaco, I guess when I looked through the numbers and we, you know, we obviously expected the higher costs related to ConExpo. jaco i guess when i looked through the numbers and we you know we obviously expected the higher costs related to conexpo I mean, the surprising number to me was the gross margin. i mean the surprising number to me was the gross margin You covered a couple of reasons for it, and it was particularly soft in the Infrastructure Solutions side. you covered a couple of reasons for it and it was particularly soft in the infrastructure solutions side Yeah, can you sort of give us the buckets on how much of it was inflationary freight pressures versus mix versus timing, et cetera, or were there any efficiency letdowns in the quarter? yeah can you sort of give us the buckets on how much of it was inflationary freight pressures versus mix versus timing et cetera or were there any efficiency letdowns in the quarter

Speaker 3: For IS, we definitely saw a different mix this quarter compared to, you know, what we saw as a very strong Q1 last year. For IS, we definitely saw a different mix this quarter compared to, you know, what we saw as a very strong Q1 last year. for is we definitely saw a different mix this quarter compared to you know what we saw as a very strong q1 last year We did see a lower asphalt plants and parts business during the quarter, which obviously pulled down margins a little bit. You know, when we look at this business, and we've talked about this a lot in the past that if you have one or two plants move out from one quarter to the next, it can make a pretty big difference. We did see a lower asphalt plants and parts business during the quarter, which obviously pulled down margins a little bit. we did see a lower asphalt plants and parts business during the quarter which obviously pulled down margins a little bit You know, when we look at this business, and we've talked about this a lot in the past that if you have one or two plants move out from one quarter to the next, it can make a pretty big difference. you know when we look at this business and we've talked about this a lot in the past that if you have one or two plants move out from one quarter to the next it can make a pretty big difference

Speaker 6: Yeah Yeah yeah

Speaker 3: if you take a breakdown there, you know, capital and parts, you know, we saw a reduction in both of those. Tariffs did affect them a little bit to a lesser extent than what we've seen on the Materials Solutions group. You know, we are managing that going forward. I think I mentioned in prior calls that we moved really quickly when it came to pricing when all the tariffs. if you take a breakdown there, you know, capital and parts, you know, we saw a reduction in both of those. if you take a breakdown there you know capital and parts you know we saw a reduction in both of those Tariffs did affect them a little bit to a lesser extent than what we've seen on the Materials Solutions group. tariffs did affect them a little bit to a lesser extent than what we've seen on the materials solutions group You know, we are managing that going forward. you know we are managing that going forward I think I mentioned in prior calls that we moved really quickly when it came to pricing when all the tariffs. i think i mentioned in prior calls that we moved really quickly when it came to pricing when all the tariffs

Speaker 6: Right Right right

Speaker 3: things came to light. Some of that is maybe just timing, catching up to the pricing. We also have, you know, additional pricing that is in the pipeline that should mitigate this in the quarters to come. things came to light. things came to light Some of that is maybe just timing, catching up to the pricing. some of that is maybe just timing catching up to the pricing We also have, you know, additional pricing that is in the pipeline that should mitigate this in the quarters to come. we also have you know additional pricing that is in the pipeline that should mitigate this in the quarters to come

Speaker 6: That, yeah, that's, I mean, you probably know the follow-up question with which is, you know, given the numbers in Q1, your confidence level to hit those full year targets, given the. That, yeah, that's, I mean, you probably know the follow-up question with which is, you know, given the numbers in Q1, your confidence level to hit those full year targets, given the. that yeah that's i mean you probably know the follow-up question with which is you know given the numbers in q1 your confidence level to hit those full year targets given the

Speaker 3: Yeah Yeah yeah

Speaker 6: the year-over-year difference. If it's pure mix, and the timing is you're gonna be more plant and parts heavy into Q, and you got the pricing in, I get it. I'm just trying to see if there's anything else here that should be cause for concern. the year-over-year difference. the year-over-year difference If it's pure mix, and the timing is you're gonna be more plant and parts heavy into Q, and you got the pricing in, I get it. if it's pure mix and the timing is you're gonna be more plant and parts heavy into q and you got the pricing in i get it I'm just trying to see if there's anything else here that should be cause for concern. i'm just trying to see if there's anything else here that should be cause for concern

Speaker 3: Yeah. No, look, I mean, look at backlog. We are very encouraged by strong backlog. We have, you know, another positive book-to-bill quarter, which is always nice. We have, you know, definitely additional pricing in the pipeline. We are continuously evaluating, you know, the cost that's coming from these macro trends. We are also very encouraged about the work our teams are doing to improve our quality cost and our operational efforts. Steve, we obviously, you know, still confident. That's why we kept the guidance for the year. Yeah. yeah No, look, I mean, look at backlog. no look i mean look at backlog We are very encouraged by strong backlog. we are very encouraged by strong backlog We have, you know, another positive book-to-bill quarter, which is always nice. we have you know another positive book-to-bill quarter which is always nice We have, you know, definitely additional pricing in the pipeline. we have you know definitely additional pricing in the pipeline We are continuously evaluating, you know, the cost that's coming from these macro trends. we are continuously evaluating you know the cost that's coming from these macro trends We are also very encouraged about the work our teams are doing to improve our quality cost and our operational efforts. we are also very encouraged about the work our teams are doing to improve our quality cost and our operational efforts Steve, we obviously, you know, still confident. steve we obviously you know still confident That's why we kept the guidance for the year. that's why we kept the guidance for the year

Speaker 6: Yep Yep yep

Speaker 3: for the full year. You know, with that strong backlog, we feel that we have the opportunity to achieve that. for the full year. for the full year You know, with that strong backlog, we feel that we have the opportunity to achieve that. you know with that strong backlog we feel that we have the opportunity to achieve that

Speaker 6: I mean, we saw the, how much of the order shift sequentially was seasonality? I mean, we saw the, how much of the order shift sequentially was seasonality? i mean we saw the how much of the order shift sequentially was seasonality

Speaker 3: From an invoicing point of view or a bookings, point of view? From an invoicing point of view or a bookings, point of view? from an invoicing point of view or a bookings point of view

Speaker 6: The implied orders, the reported implied orders. Do you owe that to seasonality and timing? The implied orders, the reported implied orders. the implied orders the reported implied orders Do you owe that to seasonality and timing? do you owe that to seasonality and timing

Speaker 3: Yeah. I mean, if you look at implied orders for IS, quarter-over-quarter, it was pretty flat. Obviously we have CWMF in that number now. Yeah. yeah I mean, if you look at implied orders for IS, quarter-over-quarter, it was pretty flat. i mean if you look at implied orders for is quarter-over-quarter it was pretty flat Obviously we have CWMF in that number now. obviously we have cwmf in that number now

Speaker 6: Right. Right. right

Speaker 3: On MS quarter-over-quarter, that's where we saw the biggest variance. You know, those came on top of Q4, which is typically our strongest. On MS quarter-over-quarter, that's where we saw the biggest variance. on ms quarter-over-quarter that's where we saw the biggest variance You know, those came on top of Q4, which is typically our strongest. you know those came on top of q4 which is typically our strongest

Speaker 6: Right Right right

Speaker 3: booking quarter. Overall backlog, if you look at the backlog and the book-to-bill ratio, both positive in MS and in IS. That's why we like to give the annual guidance and not try to guide on a quarterly basis. booking quarter. booking quarter Overall backlog, if you look at the backlog and the book-to-bill ratio, both positive in MS and in IS. overall backlog if you look at the backlog and the book-to-bill ratio both positive in ms and in is That's why we like to give the annual guidance and not try to guide on a quarterly basis. that's why we like to give the annual guidance and not try to guide on a quarterly basis

Speaker 6: Understand. Understand. understand

Speaker 3: We know we're gonna have these quarterly fluctuations. We know we're gonna have these quarterly fluctuations. we know we're gonna have these quarterly fluctuations

Speaker 6: If you could just touch on synergy realization, where you are with integration of the acquisitions and potential synergy realization over the next multiple quarters. If you could just touch on synergy realization, where you are with integration of the acquisitions and potential synergy realization over the next multiple quarters. if you could just touch on synergy realization where you are with integration of the acquisitions and potential synergy realization over the next multiple quarters

Speaker 3: Yeah. Yeah. We are very, very happy with the way the integrations are going. From a synergy point of view, the realization is coming through the pipeline now, pretty quickly. I will say the synergies on the CWMF acquisition is coming in, you know, faster than what we saw on TSG, just because, you know, it's so close to home. We do business with a lot of the same suppliers. We're pretty positive there. The number that we gave the street for synergies on TSG, we're very confident that, you know, over the next 12 months, we're gonna realize those. Yeah. yeah Yeah. yeah We are very, very happy with the way the integrations are going. we are very very happy with the way the integrations are going From a synergy point of view, the realization is coming through the pipeline now, pretty quickly. from a synergy point of view the realization is coming through the pipeline now pretty quickly I will say the synergies on the CWMF acquisition is coming in, you know, faster than what we saw on TSG, just because, you know, it's so close to home. i will say the synergies on the cwmf acquisition is coming in you know faster than what we saw on tsg just because you know it's so close to home We do business with a lot of the same suppliers. we do business with a lot of the same suppliers We're pretty positive there. we're pretty positive there The number that we gave the street for synergies on TSG, we're very confident that, you know, over the next 12 months, we're gonna realize those. the number that we gave the street for synergies on tsg we're very confident that you know over the next 12 months we're gonna realize those

Speaker 6: If I could get one more in in terms of obviously, you've been generating much stronger parts and aftermarket numbers. Some of that's from the acquisitions, but I know that was a priority when you became CEO, Jaco. Where are you in that progress, and is there a lot more to go, or do you feel like you've achieved a lot of what you wanted to? If I could get one more in in terms of obviously, you've been generating much stronger parts and aftermarket numbers. if i could get one more in in terms of obviously you've been generating much stronger parts and aftermarket numbers Some of that's from the acquisitions, but I know that was a priority when you became CEO, Jaco. some of that's from the acquisitions but i know that was a priority when you became ceo jaco Where are you in that progress, and is there a lot more to go, or do you feel like you've achieved a lot of what you wanted to? where are you in that progress and is there a lot more to go or do you feel like you've achieved a lot of what you wanted to

Speaker 3: Yeah, no. In my mind, there's a lot more to go. You know, during Q1, which is typically a strong parts quarter for us, we were close to 37% parts and service. You know, next week, we're going to have our Investor Day, where we're gonna talk about our aspirations there. Yeah, no. yeah no In my mind, there's a lot more to go. in my mind there's a lot more to go You know, during Q1, which is typically a strong parts quarter for us, we were close to 37% parts and service. you know during q1 which is typically a strong parts quarter for us we were close to 37% parts and service You know, next week, we're going to have our Investor Day, where we're gonna talk about our aspirations there. you know next week we're going to have our investor day where we're gonna talk about our aspirations there

Speaker 6: Okay Okay okay

Speaker 3: See, we still see significant opportunity to improve that mix. See, we still see significant opportunity to improve that mix. see we still see significant opportunity to improve that mix

Speaker 6: Great. Thanks, Jaco. Thanks, Brian. Great. great Thanks, Jaco. thanks jaco Thanks, Brian. thanks brian

Speaker 4: Your next question comes from the line of Steven Ramsey with Thompson Research Group. Your line is open. Your next question comes from the line of Steven Ramsey with Thompson Research Group. your next question comes from the line of steven ramsey with thompson research group Your line is open. your line is open

Speaker 7: Hey, good morning. Thanks for taking my questions. I wanted to start with obviously the topic of the day, demand data centers. You cited strong demand from this market. I'm curious if you could ballpark how much of a contributor that was in the quarter, and maybe compare that to last year. And then maybe go through your success here, if it's following your customers versus intentional initiatives to capture this demand. Hey, good morning. hey good morning Thanks for taking my questions. thanks for taking my questions I wanted to start with obviously the topic of the day, demand data centers. i wanted to start with obviously the topic of the day demand data centers You cited strong demand from this market. you cited strong demand from this market I'm curious if you could ballpark how much of a contributor that was in the quarter, and maybe compare that to last year. i'm curious if you could ballpark how much of a contributor that was in the quarter and maybe compare that to last year And then maybe go through your success here, if it's following your customers versus intentional initiatives to capture this demand. and then maybe go through your success here if it's following your customers versus intentional initiatives to capture this demand

Speaker 3: Yeah, Steve. Morning. Good question. You know, the data center demand and actually some of the other demand around chip factories and things like that is obviously something that we are keeping a very close eye on. If you look at our backlog for the MS group, it's up significantly year-over-year, and even during the quarter, it increased nicely. Steven, we see the benefit from that. It is a little bit difficult for us to track it specifically just for data centers or other, you know, onshoring. What I will say is, obviously our customers that provides aggregates to these markets are very close to these markets. Yeah, Steve. yeah steve Morning. morning Good question. good question You know, the data center demand and actually some of the other demand around chip factories and things like that is obviously something that we are keeping a very close eye on. you know the data center demand and actually some of the other demand around chip factories and things like that is obviously something that we are keeping a very close eye on If you look at our backlog for the MS group, it's up significantly year-over-year, and even during the quarter, it increased nicely. if you look at our backlog for the ms group it's up significantly year-over-year and even during the quarter it increased nicely Steven, we see the benefit from that. steven we see the benefit from that It is a little bit difficult for us to track it specifically just for data centers or other, you know, onshoring. it is a little bit difficult for us to track it specifically just for data centers or other you know onshoring What I will say is, obviously our customers that provides aggregates to these markets are very close to these markets. what i will say is obviously our customers that provides aggregates to these markets are very close to these markets They typically, you know, enjoy the business if they work in a 30 or 50-mile radius from where the construction goes. We enjoy business with all of those customers. You know, we see cases where customers need to increase output, some cases as much as 10 times what they did in prior years just to deal with the demand that's coming from these data centers. We don't, we don't have a specific number there, Steven. We are looking at a way to try to track that. But I think if you look at the big aggregate suppliers, you know, they are very outspoken about the effect this have. Obviously, you know, we do business with all of those companies, and that's where we see the benefit. They typically, you know, enjoy the business if they work in a 30 or 50-mile radius from where the construction goes. they typically you know enjoy the business if they work in a 30 or 50-mile radius from where the construction goes We enjoy business with all of those customers. we enjoy business with all of those customers You know, we see cases where customers need to increase output, some cases as much as 10 times what they did in prior years just to deal with the demand that's coming from these data centers. you know we see cases where customers need to increase output some cases as much as 10 times what they did in prior years just to deal with the demand that's coming from these data centers We don't, we don't have a specific number there, Steven. we don't we don't have a specific number there steven We are looking at a way to try to track that. we are looking at a way to try to track that But I think if you look at the big aggregate suppliers, you know, they are very outspoken about the effect this have. but i think if you look at the big aggregate suppliers you know they are very outspoken about the effect this have Obviously, you know, we do business with all of those companies, and that's where we see the benefit. obviously you know we do business with all of those companies and that's where we see the benefit We have seen some uptick in our industrial heating space, that is in the Infrastructure group, you know, also supplying to data centers, but to a much lesser extent than what we've seen on the Materials Solutions side. We have seen some uptick in our industrial heating space, that is in the Infrastructure group, you know, also supplying to data centers, but to a much lesser extent than what we've seen on the Materials Solutions side. we have seen some uptick in our industrial heating space that is in the infrastructure group you know also supplying to data centers but to a much lesser extent than what we've seen on the materials solutions side

Speaker 7: Okay, that's very helpful. Wanted to think about order activity from the perspective of market share and how your orders are comparing to the marketplace. Do you feel like you're tracking the market or do you feel like you're gaining share overall or just any pockets of strength within orders? Okay, that's very helpful. okay that's very helpful Wanted to think about order activity from the perspective of market share and how your orders are comparing to the marketplace. wanted to think about order activity from the perspective of market share and how your orders are comparing to the marketplace Do you feel like you're tracking the market or do you feel like you're gaining share overall or just any pockets of strength within orders? do you feel like you're tracking the market or do you feel like you're gaining share overall or just any pockets of strength within orders

Speaker 3: Yeah. I will say we don't feel that we're losing market share anywhere. You know, obviously, we have various product lines that is in our portfolio. We feel very good about our product portfolio that we have. I mean, you joined us on the stage for CONEXPO. We were very encouraged by the reaction from the market on all the new products that we showcased at CONEXPO. You know, when you have new products, the positive flow through typically result in you taking some market share. We have, over the last year or two in the Materials Solutions side, put a renewed focus on large system sales, and we are definitely seeing the positive momentum from that product line and, you know, we believe that will continue. Yeah. yeah I will say we don't feel that we're losing market share anywhere. i will say we don't feel that we're losing market share anywhere You know, obviously, we have various product lines that is in our portfolio. you know obviously we have various product lines that is in our portfolio We feel very good about our product portfolio that we have. we feel very good about our product portfolio that we have I mean, you joined us on the stage for CONEXPO. i mean you joined us on the stage for conexpo We were very encouraged by the reaction from the market on all the new products that we showcased at CONEXPO. we were very encouraged by the reaction from the market on all the new products that we showcased at conexpo You know, when you have new products, the positive flow through typically result in you taking some market share. you know when you have new products the positive flow through typically result in you taking some market share We have, over the last year or two in the Materials Solutions side, put a renewed focus on large system sales, and we are definitely seeing the positive momentum from that product line and, you know, we believe that will continue. we have over the last year or two in the materials solutions side put a renewed focus on large system sales and we are definitely seeing the positive momentum from that product line and you know we believe that will continue Maybe one last comment. You know, the work that we're doing on our digital platform, we are definitely seeing positive reaction from our customer base. We are talking and, you know, growing that business significantly through, you know, especially our major customers transitioning to one platform. In various examples, you know, they've chosen us to be that platform provider, so. That will have a positive effect, you know, in the future on equipment sales. It will have a positive effect on our parts and service sales. Maybe one last comment. maybe one last comment You know, the work that we're doing on our digital platform, we are definitely seeing positive reaction from our customer base. you know the work that we're doing on our digital platform we are definitely seeing positive reaction from our customer base We are talking and, you know, growing that business significantly through, you know, especially our major customers transitioning to one platform. we are talking and you know growing that business significantly through you know especially our major customers transitioning to one platform In various examples, you know, they've chosen us to be that platform provider, so. in various examples you know they've chosen us to be that platform provider so That will have a positive effect, you know, in the future on equipment sales. that will have a positive effect you know in the future on equipment sales It will have a positive effect on our parts and service sales. it will have a positive effect on our parts and service sales

Speaker 7: Okay, that's great. Last one from me, you had very strong free cash flow in the quarter. Feels like much of that was working capital driven. If you zoom out and look forward, can you give a general view on free cash flow conversion out of adjusted EBITDA? Thanks. Okay, that's great. okay that's great Last one from me, you had very strong free cash flow in the quarter. last one from me you had very strong free cash flow in the quarter Feels like much of that was working capital driven. feels like much of that was working capital driven If you zoom out and look forward, can you give a general view on free cash flow conversion out of adjusted EBITDA? if you zoom out and look forward can you give a general view on free cash flow conversion out of adjusted ebitda Thanks. thanks

Speaker 1: Yes, Steve, it's Brian here. Thanks for the question. Yeah, look, I think that's going to continue to be pretty strong. You're right, that in the quarter we did benefit from working capital movement. Our inventory was actually down quite a bit from the year-end position. A lot of that is in raw material, but raw material and finished goods were both down. We had, you know, Q4 is always a big sales quarter, so we had some good cash collections in Q1 as well. I think that trend, there's a bit of seasonality in the business, so working capital will move up and down during the course of the year. Yes, Steve, it's Brian here. yes steve it's brian here Thanks for the question. thanks for the question Yeah, look, I think that's going to continue to be pretty strong. yeah look i think that's going to continue to be pretty strong You're right, that in the quarter we did benefit from working capital movement. you're right that in the quarter we did benefit from working capital movement Our inventory was actually down quite a bit from the year-end position. our inventory was actually down quite a bit from the year-end position A lot of that is in raw material, but raw material and finished goods were both down. a lot of that is in raw material but raw material and finished goods were both down We had, you know, Q4 is always a big sales quarter, so we had some good cash collections in Q1 as well. we had you know q4 is always a big sales quarter so we had some good cash collections in q1 as well I think that trend, there's a bit of seasonality in the business, so working capital will move up and down during the course of the year. i think that trend there's a bit of seasonality in the business so working capital will move up and down during the course of the year I think the underlying efficiency of our working capital, our working capital turns certainly improved in the quarter, and we'd expect to see that continue. We have a pretty strong operating cash flow in the quarter and in the balance of the year. I think conversion ratio will be good. I think the underlying efficiency of our working capital, our working capital turns certainly improved in the quarter, and we'd expect to see that continue. i think the underlying efficiency of our working capital our working capital turns certainly improved in the quarter and we'd expect to see that continue We have a pretty strong operating cash flow in the quarter and in the balance of the year. we have a pretty strong operating cash flow in the quarter and in the balance of the year I think conversion ratio will be good. i think conversion ratio will be good

Speaker 7: That's great. Thank you all. That's great. that's great Thank you all. thank you all

Speaker 1: Thank you. Thank you. thank you

Speaker 4: Again, if you would like to ask a question, press star one on your telephone keypad, and we'll pause for just a moment. Your next question comes to the line of David MacGregor with Longbow Research. Your line is open. Again, if you would like to ask a question, press star one on your telephone keypad, and we'll pause for just a moment. again if you would like to ask a question press star one on your telephone keypad and we'll pause for just a moment Your next question comes to the line of David MacGregor with Longbow Research. your next question comes to the line of david macgregor with longbow research Your line is open. your line is open

Speaker 2: Yes. Good morning, everyone. Yes. yes Good morning, everyone. good morning everyone

Speaker 1: Hey, David. Hey, David. hey david

Speaker 2: Good morning. I guess my first question was for Brian and just wanted to go back to the whole discussion around price cost. You I think were very clear in your prepared remarks about, you know, the timing of price traction versus, you know, the emerging cost inflation. You used FIFO cost on your balance sheet. You've got some pretty good visibility, I guess, on what's coming up here over the next couple of quarters. Can you just talk about, you know, what you see coming in the backlog versus the pricing initiatives you have in the marketplace today and how that should play into 2Q or second half? Obviously, you've left the guidance unchanged, you're expecting some kind of recovery. Good morning. good morning I guess my first question was for Brian and just wanted to go back to the whole discussion around price cost. i guess my first question was for brian and just wanted to go back to the whole discussion around price cost You I think were very clear in your prepared remarks about, you know, the timing of price traction versus, you know, the emerging cost inflation. you i think were very clear in your prepared remarks about you know the timing of price traction versus you know the emerging cost inflation You used FIFO cost on your balance sheet. you used fifo cost on your balance sheet You've got some pretty good visibility, I guess, on what's coming up here over the next couple of quarters. you've got some pretty good visibility i guess on what's coming up here over the next couple of quarters Can you just talk about, you know, what you see coming in the backlog versus the pricing initiatives you have in the marketplace today and how that should play into 2Q or second half? can you just talk about you know what you see coming in the backlog versus the pricing initiatives you have in the marketplace today and how that should play into 2q or second half Obviously, you've left the guidance unchanged, you're expecting some kind of recovery. obviously you've left the guidance unchanged you're expecting some kind of recovery I'm just trying to get some sense of cadence or timing around those margin dynamics. I'm just trying to get some sense of cadence or timing around those margin dynamics. i'm just trying to get some sense of cadence or timing around those margin dynamics

Speaker 1: Look, I think if you go back to that Q1 of 2025, we had a gross margin of over 28%. If anything, that was the little bit of an outlier when you look at Q1 historically. That was because we got ahead of the game, we talked about this before on pricing. So the tariff situation cost didn't really begin to materialize till April and beyond. We had a strong comp in Q1 of 2025. Tariffs kicked in this quarter to a greater extent. We felt, you know, cover a lot of the underlying inflation outside of tariffs with our pricing initiatives. Look, I think if you go back to that Q1 of 2025, we had a gross margin of over 28%. look i think if you go back to that q1 of 2025 we had a gross margin of over 28% If anything, that was the little bit of an outlier when you look at Q1 historically. if anything that was the little bit of an outlier when you look at q1 historically That was because we got ahead of the game, we talked about this before on pricing. that was because we got ahead of the game we talked about this before on pricing So the tariff situation cost didn't really begin to materialize till April and beyond. so the tariff situation cost didn't really begin to materialize till april and beyond We had a strong comp in Q1 of 2025. we had a strong comp in q1 of 2025 Tariffs kicked in this quarter to a greater extent. tariffs kicked in this quarter to a greater extent We felt, you know, cover a lot of the underlying inflation outside of tariffs with our pricing initiatives. we felt you know cover a lot of the underlying inflation outside of tariffs with our pricing initiatives We've got more pricing that we can implement here in the balance of the year, and we're very careful about making sure that we try to anticipate those costs when we quote. The price that we quote that's in our backlog should accommodate our anticipated inflation and tariff increases that are coming. Obviously, freight and duties related to higher diesel and hydrocarbon costs are another factor certainly affecting things in the short term and has a little bit of uncertainty in the balance of the year. We're trying very hard to make sure that when we price our products in the market, that we're taking that into account. We've got more pricing that we can implement here in the balance of the year, and we're very careful about making sure that we try to anticipate those costs when we quote. we've got more pricing that we can implement here in the balance of the year and we're very careful about making sure that we try to anticipate those costs when we quote The price that we quote that's in our backlog should accommodate our anticipated inflation and tariff increases that are coming. the price that we quote that's in our backlog should accommodate our anticipated inflation and tariff increases that are coming Obviously, freight and duties related to higher diesel and hydrocarbon costs are another factor certainly affecting things in the short term and has a little bit of uncertainty in the balance of the year. obviously freight and duties related to higher diesel and hydrocarbon costs are another factor certainly affecting things in the short term and has a little bit of uncertainty in the balance of the year We're trying very hard to make sure that when we price our products in the market, that we're taking that into account. we're trying very hard to make sure that when we price our products in the market that we're taking that into account

Speaker 2: Right. Just to try to summarize on this, is this something where we are still going to see some year-over-year margin pressure in Q2 before it is fully normalized in the second half? Right. right Just to try to summarize on this, is this something where we are still going to see some year-over-year margin pressure in Q2 before it is fully normalized in the second half? just to try to summarize on this is this something where we are still going to see some year-over-year margin pressure in q2 before it is fully normalized in the second half

Speaker 1: You know, it's possible but I think you two we're going to emerge with stronger margins in the second quarter than we saw in the first. You know, it's possible but I think you two we're going to emerge with stronger margins in the second quarter than we saw in the first. you know it's possible but i think you two we're going to emerge with stronger margins in the second quarter than we saw in the first

Speaker 2: Okay, good. I guess second question, maybe for Jaco. You know, how much of a catalyst do you think a highway bill reauthorization will be to just order releases? I'm just trying to get a sense of, from your conversations with your counterparts in the marketplace if you sense that people are maybe holding off on purchase orders until there is a bill in place. Okay, good. okay good I guess second question, maybe for Jaco. i guess second question maybe for jaco You know, how much of a catalyst do you think a highway bill reauthorization will be to just order releases? you know how much of a catalyst do you think a highway bill reauthorization will be to just order releases I'm just trying to get a sense of, from your conversations with your counterparts in the marketplace if you sense that people are maybe holding off on purchase orders until there is a bill in place. i'm just trying to get a sense of from your conversations with your counterparts in the marketplace if you sense that people are maybe holding off on purchase orders until there is a bill in place

Speaker 3: Yeah. Yeah, David, I mean, you know, I will tell you, obviously everybody knows that there's a lot going on in the world right now. You know, our industry has been hit with, you know, inflationary pressures around, like Brian just said, fuel prices. You know, tariffs obviously is something. A highway bill, I will say for smaller players in the market, typically a highway bill, gives a lot of confidence because, you know, if you're gonna buy an asphalt plant, you know that there's gonna be, you know, three to five years of good funding available. You know, our industry has gone through significant customer consolidation, as you guys know. Yeah. yeah Yeah, David, I mean, you know, I will tell you, obviously everybody knows that there's a lot going on in the world right now. yeah david i mean you know i will tell you obviously everybody knows that there's a lot going on in the world right now You know, our industry has been hit with, you know, inflationary pressures around, like Brian just said, fuel prices. you know our industry has been hit with you know inflationary pressures around like brian just said fuel prices You know, tariffs obviously is something. you know tariffs obviously is something A highway bill, I will say for smaller players in the market, typically a highway bill, gives a lot of confidence because, you know, if you're gonna buy an asphalt plant, you know that there's gonna be, you know, three to five years of good funding available. a highway bill i will say for smaller players in the market typically a highway bill gives a lot of confidence because you know if you're gonna buy an asphalt plant you know that there's gonna be you know three to five years of good funding available You know, our industry has gone through significant customer consolidation, as you guys know. you know our industry has gone through significant customer consolidation as you guys know You know, I think our bigger customers are better managing their CapEx through different cycles and or maybe less prone to, you know, cut spend, you know, without the clarity of a infrastructure bill. What I will say is, you know, we are very involved with our trade organizations. We're very involved talking to the respective people involved in creating the highway bill. You know, just this morning, actually, I received a note from our team at NAPA, the National Asphalt Pavement Association, they think that the first language around the bill could be published as early as the 18th of May. We're looking forward to that. We know that there's discussions taking place right now. You know, I think our bigger customers are better managing their CapEx through different cycles and or maybe less prone to, you know, cut spend, you know, without the clarity of a infrastructure bill. you know i think our bigger customers are better managing their capex through different cycles and or maybe less prone to you know cut spend you know without the clarity of a infrastructure bill What I will say is, you know, we are very involved with our trade organizations. what i will say is you know we are very involved with our trade organizations We're very involved talking to the respective people involved in creating the highway bill. we're very involved talking to the respective people involved in creating the highway bill You know, just this morning, actually, I received a note from our team at NAPA, the National Asphalt Pavement Association, they think that the first language around the bill could be published as early as the 18th of May. you know just this morning actually i received a note from our team at napa the national asphalt pavement association they think that the first language around the bill could be published as early as the 18th of may We're looking forward to that. we're looking forward to that We know that there's discussions taking place right now. we know that there's discussions taking place right now We know that, you know, like we said in the prepared remarks, you know, this is something where government actually works together very well on. We're positive that we're gonna see a bill. Hopefully, it comes sooner than later. You know, the good thing is that funding is available for the full year this year, our customers are busy. They have a lot of work. You know, and a highway bill that's focused on roads and bridges, I think will be a nice injection for, you know, 2027 and beyond. We know that, you know, like we said in the prepared remarks, you know, this is something where government actually works together very well on. we know that you know like we said in the prepared remarks you know this is something where government actually works together very well on We're positive that we're gonna see a bill. we're positive that we're gonna see a bill Hopefully, it comes sooner than later. hopefully it comes sooner than later You know, the good thing is that funding is available for the full year this year, our customers are busy. you know the good thing is that funding is available for the full year this year our customers are busy They have a lot of work. they have a lot of work You know, and a highway bill that's focused on roads and bridges, I think will be a nice injection for, you know, 2027 and beyond. you know and a highway bill that's focused on roads and bridges i think will be a nice injection for you know 2027 and beyond

Speaker 2: Right. Right. That's great color. Thank you for that. Next question I just wanted to ask you around the whole notion of price analytics and you've been investing in price analytics here. I'm just trying to get a sense of, you know, where we are in that journey, from a margin development standpoint. Do you feel like you're still in the early innings of the kind of the efficacy of that, of that investment? I guess at a point in time where we're really trying to sort of wrestle through price cost here, you know, this is a pretty key part of the story. I guess that's where you are on this. Right. right Right. right That's great color. that's great color Thank you for that. thank you for that Next question I just wanted to ask you around the whole notion of price analytics and you've been investing in price analytics here. next question i just wanted to ask you around the whole notion of price analytics and you've been investing in price analytics here I'm just trying to get a sense of, you know, where we are in that journey, from a margin development standpoint. i'm just trying to get a sense of you know where we are in that journey from a margin development standpoint Do you feel like you're still in the early innings of the kind of the efficacy of that, of that investment? do you feel like you're still in the early innings of the kind of the efficacy of that of that investment I guess at a point in time where we're really trying to sort of wrestle through price cost here, you know, this is a pretty key part of the story. i guess at a point in time where we're really trying to sort of wrestle through price cost here you know this is a pretty key part of the story I guess that's where you are on this. i guess that's where you are on this

Speaker 3: Yeah. I will say from a process point of view, we in, you know, probably in the best state that Astec has been in for many years. Now, you know, on the flip side is obviously the variability right now is big. Our teams are continuously looking at movement in, you know, prices that we buy versus what we sell for. Our procurement team is very actively renegotiating as tariffs change. I mean, as you guys know, there's actually some of the tariffs that should start to lower over coming periods. You know, getting that then back from suppliers is key focus for us. Yeah. yeah I will say from a process point of view, we in, you know, probably in the best state that Astec has been in for many years. i will say from a process point of view we in you know probably in the best state that astec has been in for many years Now, you know, on the flip side is obviously the variability right now is big. now you know on the flip side is obviously the variability right now is big Our teams are continuously looking at movement in, you know, prices that we buy versus what we sell for. our teams are continuously looking at movement in you know prices that we buy versus what we sell for Our procurement team is very actively renegotiating as tariffs change. our procurement team is very actively renegotiating as tariffs change I mean, as you guys know, there's actually some of the tariffs that should start to lower over coming periods. i mean as you guys know there's actually some of the tariffs that should start to lower over coming periods You know, getting that then back from suppliers is key focus for us. you know getting that then back from suppliers is key focus for us David, yeah, we feel that we have a good process in place, but, you know, the amount of variability that's happening on a daily basis is definitely challenging for the team. At least we have a team, we have a process, and it gives us much better, you know, outlook than what we had before. David, yeah, we feel that we have a good process in place, but, you know, the amount of variability that's happening on a daily basis is definitely challenging for the team. david yeah we feel that we have a good process in place but you know the amount of variability that's happening on a daily basis is definitely challenging for the team At least we have a team, we have a process, and it gives us much better, you know, outlook than what we had before. at least we have a team we have a process and it gives us much better you know outlook than what we had before

Speaker 2: Okay, good. I wanted to ask you about Astec Signal. You talked about Conexpo. There was a good reaction there to the new product rollout. Just trying to get a sense of what kind of reaction you got specifically to the Signal platform. From that reaction, what's your sense of sort of the ability of that technology to accelerate placement cycles? Okay, good. okay good I wanted to ask you about Astec Signal. i wanted to ask you about astec signal You talked about Conexpo. you talked about conexpo There was a good reaction there to the new product rollout. there was a good reaction there to the new product rollout Just trying to get a sense of what kind of reaction you got specifically to the Signal platform. just trying to get a sense of what kind of reaction you got specifically to the signal platform From that reaction, what's your sense of sort of the ability of that technology to accelerate placement cycles? from that reaction what's your sense of sort of the ability of that technology to accelerate placement cycles

Speaker 3: Yeah. We're very excited about that, David. I mean, we are investing significantly in further, you know, developing the platform. We're investing in additional manufacturing capability. You know, next time when you're in Chattanooga, we'll show you that. We think that this is just starting. We have a really good platform. It's gonna provide a lot of benefits both to us and our customers in the future. You know, overall, the section has been really positive. We'll talk quite a bit more about Signal during our Investor Day next week as well. Yeah. yeah We're very excited about that, David. we're very excited about that david I mean, we are investing significantly in further, you know, developing the platform. i mean we are investing significantly in further you know developing the platform We're investing in additional manufacturing capability. we're investing in additional manufacturing capability You know, next time when you're in Chattanooga, we'll show you that. you know next time when you're in chattanooga we'll show you that We think that this is just starting. we think that this is just starting We have a really good platform. we have a really good platform It's gonna provide a lot of benefits both to us and our customers in the future. it's gonna provide a lot of benefits both to us and our customers in the future You know, overall, the section has been really positive. you know overall the section has been really positive We'll talk quite a bit more about Signal during our Investor Day next week as well. we'll talk quite a bit more about signal during our investor day next week as well

Speaker 2: Great. Great. Then last question, Brian, where do you see the balance sheet leverage at year-end based on the guidance you've got right now? Great. great Great. great Then last question, Brian, where do you see the balance sheet leverage at year-end based on the guidance you've got right now? then last question brian where do you see the balance sheet leverage at year-end based on the guidance you've got right now

Speaker 1: Yeah. Look, David, I think if you take the midpoint of the guidance, we should end somewhere around about 1.7 times. Yeah. yeah Look, David, I think if you take the midpoint of the guidance, we should end somewhere around about 1.7 times. look david i think if you take the midpoint of the guidance we should end somewhere around about 1.7 times

Speaker 2: Got it. Thanks very much. Got it. got it Thanks very much. thanks very much

Speaker 3: Thank you. Thank you. thank you

Speaker 4: Now, I'll turn the call over to Steve Anderson, Senior Vice President of Investor Relations. Now, I'll turn the call over to Steve Anderson, Senior Vice President of Investor Relations. now i'll turn the call over to steve anderson senior vice president of investor relations

Speaker 5: Thank you, Rebecca. We appreciate everyone's participation in our conference call this morning, and thank you for your interest in Astec. As today's news release states, the conference call has been recorded. A replay of this conference call will be available through May 20, 2026, and an archived webcast will be available for 90 days. The transcript will be available under the Investor Relations section of the Astec Industries website within the next 5 business days. This concludes our call, but as always, feel free to contact me with any additional questions. Thank you. Have a good day. Thank you, Rebecca. thank you rebecca We appreciate everyone's participation in our conference call this morning, and thank you for your interest in Astec. we appreciate everyone's participation in our conference call this morning and thank you for your interest in astec As today's news release states, the conference call has been recorded. as today's news release states the conference call has been recorded A replay of this conference call will be available through May 20, 2026, and an archived webcast will be available for 90 days. a replay of this conference call will be available through may 20 2026 and an archived webcast will be available for 90 days The transcript will be available under the Investor Relations section of the Astec Industries website within the next 5 business days. the transcript will be available under the investor relations section of the astec industries website within the next 5 business days This concludes our call, but as always, feel free to contact me with any additional questions. this concludes our call but as always feel free to contact me with any additional questions Thank you. thank you Have a good day. have a good day

Speaker 4: Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Ladies and gentlemen, this concludes today's conference call. ladies and gentlemen this concludes today's conference call You may now disconnect. you may now disconnect