Third Quarter 2026
Filed Nov 5, 2026Astec reports third-quarter net sales of $352.4 million, a net loss attributable to controlling interest of $12.2 million, and lowers full-year 2026 Adjusted EBITDA guidance to $140 million to $150 million.
Third-quarter sales grew 0.7%, but GAAP operating results moved to a loss, adjusted operating income, Adjusted EBITDA and both segment adjusted EBITDA measures declined, and the company reduced its full-year Adjusted EBITDA guidance. Backlog grew 49.2% and year-to-date operating cash flow improved to $70.2 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesGAAP | $352.4M | – | 0.7% |
| Q3 2026 gross profitGAAP | $82.3M | – | – |
| Q3 2026 selling, general and administrative expensesGAAP | $84.2M | – | – |
| Q3 2026 restructuring and other operating charges (gains), netGAAP | $1.4M | – | – |
| Q3 2026 total operating expensesGAAP | $85.6M | – | – |
| Q3 2026 loss from operationsGAAP | −$3.3M | – | (400.0)% |
| Q3 2026 operating marginGAAP | (0.9)% | – | (120) bps |
| Q3 2026 income tax provision (benefit)GAAP | $2.7M | – | – |
| Q3 2026 effective tax rateGAAP | (28.1)% | – | (4,570) bps |
| Q3 2026 net loss attributable to controlling interestGAAP | −$12.2M | – | (190.5)% |
| Q3 2026 diluted EPSGAAP | $(0.53) | – | (194.4)% |
| Q3 2026 adjusted income from operationsnon-GAAP | $12.1M | – | (41.3)% |
| Q3 2026 adjusted operating marginnon-GAAP | 3.4% | – | (250) bps |
| Q3 2026 adjusted net loss attributable to controlling interestnon-GAAP | −$300K | – | (102.8)% |
| Q3 2026 adjusted EPSnon-GAAP | $(0.01) | – | (102.1)% |
| Q3 2026 EBITDAnon-GAAP | $11.4M | – | (17.4)% |
| Q3 2026 EBITDA marginnon-GAAP | 3.2% | – | (70) bps |
| Q3 2026 Adjusted EBITDAnon-GAAP | $18.9M | – | (30.3)% |
| Q3 2026 Adjusted EBITDA marginnon-GAAP | 5.4% | – | (230) bps |
| Q3 2026 operating cash flowGAAP | $17.4M | – | – |
| Q3 2026 capital expendituresGAAP | $6.7M | – | – |
| Q3 2026 free cash flownon-GAAP | $10.7M | – | – |
| Nine months 2026 net salesGAAP | $1.16B | – | 14.6% |
| Nine months 2026 gross profitGAAP | $288.2M | – | – |
| Nine months 2026 income from operationsGAAP | $26.1M | – | – |
| Nine months 2026 net loss attributable to controlling interestGAAP | −$400K | – | – |
| Nine months 2026 diluted EPSGAAP | $(0.02) | – | – |
| Nine months 2026 adjusted income from operationsnon-GAAP | $70.9M | – | – |
| Nine months 2026 adjusted operating marginnon-GAAP | 6.1% | – | – |
| Nine months 2026 adjusted net income attributable to controlling interestnon-GAAP | $34M | – | – |
| Nine months 2026 adjusted EPSnon-GAAP | $1.48 | – | – |
| Nine months 2026 EBITDAnon-GAAP | $70.6M | – | – |
| Nine months 2026 Adjusted EBITDAnon-GAAP | $91.8M | – | – |
| Nine months 2026 operating cash flowGAAP | $70.2M | – | – |
| Nine months 2026 capital expendituresGAAP | $22.2M | – | – |
| Nine months 2026 free cash flownon-GAAP | $48M | – | – |
| Q3 2026 backlogother | $670.5M | – | 49.2% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Infrastructure SolutionsThe decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing. Backlog increased 47.0%, implied orders increased sequentially by $77.6 million, or 38.0%, to $281.9 million, and the book-to-bill ratio was 149%. | $189M | – | (2.2)% |
| Materials SolutionsSales increased primarily due to favorable pricing coupled with net favorable volume and mix. Backlog increased 52.1%, implied orders decreased sequentially by $115.8 million, or 45.3%, to $139.9 million, and the book-to-bill ratio stood at 86%. | $163.4M | – | 4.1% |
Full year 2026 outlook
- NoteAdjusted EBITDA of $140 million to $150 million
- NoteAdjusted EBITDA guidance was revised from the previous range of $160 million to $175 million
Capital returns
- Dividend payment of $0.13 per share.
- Nine months ended September 30, 2026 payment of dividends of $8.9 million.
- Q3 2026 capital expenditures of $6.7 million.
- Nine months ended September 30, 2026 expenditures for property and equipment of $22.2 million.
What drove it
- Management said ongoing macroeconomic uncertainty caused a pause in orders earlier in the year by select asphalt plant customers.
- Management cited inflationary headwinds that affected third-quarter sales, mix, absorption and margins.
- Infrastructure Solutions adjusted EBITDA margin declined largely due to inflation on materials, labor and overhead.
- Materials Solutions adjusted EBITDA margin declined due to inflation on materials, labor and overhead and increased selling, general and administrative expenses, partly offset by the net sales impact of favorable pricing and unfavorable volume and mix.
- Backlog growth was 49.2%, with Infrastructure Solutions backlog up 47.0% and Materials Solutions backlog up 52.1%.
Concerns
- Q3 2026 GAAP loss from operations was $(3.3) million, compared with income from operations of $1.1 million in Q3 2025.
- Q3 2026 adjusted operating margin declined to 3.4% from 5.9%, while Adjusted EBITDA margin declined to 5.4% from 7.7%.
- Infrastructure Solutions net sales decreased 2.2%, with net unfavorable volume and mix only partially offset by favorable pricing.
- Both reportable segments recorded lower Segment Operating Adjusted EBITDA: Infrastructure Solutions declined 36.0% and Materials Solutions declined 9.7%.
- The company lowered full-year 2026 Adjusted EBITDA guidance to $140 million to $150 million from $160 million to $175 million.
- Management cited the delayed renewal of the U.S. federal highway bill.
What to watch
- Whether backlog of $670.5 million converts into sales following the earlier pause in orders by select asphalt plant customers.
- Infrastructure Solutions order activity, following implied orders increasing sequentially by $77.6 million to $281.9 million and a 149% book-to-bill ratio.
- Materials Solutions order activity, following implied orders decreasing sequentially by $115.8 million to $139.9 million and an 86% book-to-bill ratio.
- The effect of inflation on materials, labor and overhead and the impact on sales mix, absorption and margins.
- Delivery against full-year 2026 Adjusted EBITDA guidance of $140 million to $150 million.
- Leverage, as management reported an Adjusted EBITDA to net debt ratio of 2.3x within its target range of 1.5x to 2.5x.
Balance sheet and cash flow
- Total liquidity was $267.2 million, consisting of $63.2 million of cash and cash equivalents available for operating purposes and $204.0 million available for additional borrowings under the revolving credit facility.
- Cash, cash equivalents and restricted cash were $64.4 million at September 30, 2026, compared with $72.0 million at December 31, 2025.
- Long-term debt was $345.2 million at September 30, 2026, compared with $319.6 million at December 31, 2025.
- Total assets were $1,417.4 million at September 30, 2026, compared with $1,367.2 million at December 31, 2025.
- Total equity was $676.3 million at September 30, 2026, compared with $681.6 million at December 31, 2025.
- Nine months ended September 30, 2026 net cash provided by operating activities was $70.2 million, compared with $25.3 million.
- Nine months ended September 30, 2026 net cash used in investing activities was $(90.4) million, including acquisitions, net of cash acquired of $(68.2) million.
- Nine months ended September 30, 2026 net cash provided by financing activities was $13.1 million.
Analysis
Astec delivered third-quarter net sales of $352.4 million, up 0.7% from $350.1 million. Materials Solutions grew 4.1% to $163.4 million, supported by favorable pricing and net favorable volume and mix. Infrastructure Solutions declined 2.2% to $189.0 million as net unfavorable volume and mix more than offset favorable pricing. Management attributed the result to an earlier pause in orders by select asphalt plant customers amid macroeconomic uncertainty, as well as inflationary pressure on sales, mix, absorption and margins.
Profitability weakened materially. Gross profit was $82.3 million versus $84.2 million, while selling, general and administrative expenses rose to $84.2 million from $83.3 million and restructuring and other operating charges were $1.4 million. This resulted in a GAAP loss from operations of $(3.3) million versus income from operations of $1.1 million. Adjusted income from operations declined to $12.1 million from $20.6 million, adjusted operating margin fell to 3.4% from 5.9%, and Adjusted EBITDA fell to $18.9 million from $27.1 million.
Both segments reported lower adjusted profitability. Infrastructure Solutions Segment Operating Adjusted EBITDA declined 36.0% to $15.3 million and its margin decreased 430 basis points to 8.1%, largely because of materials, labor and overhead inflation. Materials Solutions Segment Operating Adjusted EBITDA fell 9.7% to $13.9 million and its margin decreased 130 basis points to 8.5%, reflecting the same inflationary factors and higher selling, general and administrative expenses. GAAP net loss attributable to controlling interest was $(12.2) million and diluted EPS was $(0.53), while adjusted net loss attributable to controlling interest was $(0.3) million and adjusted EPS was $(0.01).
Demand indicators were more constructive than the quarter's reported sales and earnings. Total backlog increased 49.2% to $670.5 million. Infrastructure Solutions backlog increased 47.0%, with implied orders up sequentially by $77.6 million to $281.9 million and a 149% book-to-bill ratio. Materials Solutions backlog increased 52.1%, although its implied orders declined sequentially by $115.8 million to $139.9 million and its book-to-bill ratio was 86%.
Cash generation improved over the first nine months. Operating cash flow was $70.2 million compared with $25.3 million, and free cash flow was $48.0 million compared with $13.3 million. The company reported total liquidity of $267.2 million and long-term debt of $345.2 million at September 30, 2026. It paid a $0.13 per-share dividend in the quarter and reported an Adjusted EBITDA to net debt ratio of 2.3x. Management lowered full-year 2026 Adjusted EBITDA guidance to $140 million to $150 million from $160 million to $175 million, making margin recovery and backlog conversion central to the outlook.
Management, verbatim
Third quarter financial results were less than expected as ongoing macroeconomic uncertainty caused a pause in orders earlier in the year by select asphalt plant customers. This, combined with inflationary headwinds, impacted our sales, mix, absorption and margins during the third quarter. Despite this temporary pause and the delayed renewal of the U.S. federal highway bill, underlying demand rebounded in the third quarter as evidenced by our 49.2% growth in backlog.
Jaco van der Merwe, Chief Executive Officer
We are revising our full year 2026 Adjusted EBITDA guidance from the previous range of $160 million to $175 million to $140 million to $150 million.
Brian Harris, Chief Financial Officer
Positive cash flow and disciplined capital allocation yielded an Adjusted EBITDA to net debt ratio of 2.3x, which was within our target range of 1.5x to 2.5x.
Brian Harris, Chief Financial Officer
Not in the filing
stated, not guessed- Full-year 2026 revenue guidance was not provided.
- Full-year 2026 gross margin guidance was not provided.
- Full-year 2026 operating expense guidance was not provided.
- Full-year 2026 tax-rate guidance was not provided.
- Q3 2026 gross margin was not reported.
- Q3 2026 revenue and earnings prior-quarter comparisons were not reported.
- Q3 2026 share repurchases were not reported.
- A previous-release outlook section was not provided, so actual results cannot be compared with prior guidance in vs_prior_guidance.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.