Astec Industries (NASDAQ:ASTE) reported record second-quarter revenue and adjusted EBITDA, supported by growth in its Materials Solutions business, higher parts and service sales, and contributions from concrete, mobile paving and forestry equipment. The company also reduced its full-year adjusted EBITDA outlook, citing a shift in timing for certain asphalt plant deliveries.
Chief Executive Officer Jaco van der Merwe said net sales rose 23.6% from the prior-year period, while adjusted EBITDA increased 26%. “We delivered a solid quarter with record revenues and adjusted EBITDA,” van der Merwe said, adding that the company continues to pursue initiatives intended to improve consistency, profitability and growth.
Quarterly Results and Segment Performance
Parts and service revenue increased 34.8% year over year to $135.5 million, representing 33.2% of quarterly sales. Van der Merwe said parts and service revenue reached 35% of net sales on a year-to-date basis.
- Infrastructure Solutions: Net sales increased 11.6% to $228.3 million, aided by organic and inorganic contributions. The segment benefited from demand for concrete, mobile paving and forestry equipment. Segment adjusted EBITDA dollars increased slightly, though margin declined 130 basis points because of a mix shift between asphalt plant and mobile paving equipment.
- Materials Solutions: Net sales climbed 43% to $179.8 million on organic and inorganic growth. Adjusted EBITDA increased 54.5% to $22.1 million, and segment adjusted EBITDA margin expanded 90 basis points to 12.3%.
Van der Merwe said dealer inventories in Materials Solutions are healthy, with increased demand for mobile plants and active conversions of rental equipment to purchases during the quarter. He also said crushing and screening units built at Astec’s Omagh, Northern Ireland, facility are gaining traction.
Backlog Growth and Delivery Timing
Astec ended the quarter with backlog of $601.1 million, an increase of 57.9% from the prior year. Materials Solutions backlog increased 150.6%, reflecting both organic and inorganic growth, while Infrastructure Solutions backlog rose 12.7%, primarily due to orders for concrete, mobile paving and forestry products.
Consolidated implied orders were $460 million, up 49.1% from a year earlier and 6.7% sequentially. Management said Materials Solutions posted strong order intake across its operations. In Infrastructure Solutions, however, select asphalt plant customers have moved scheduled deliveries into the fourth quarter of 2026 and the first quarter of 2027.
Van der Merwe attributed the delivery shifts to macroeconomic uncertainty, including higher oil and diesel prices and questions surrounding the timing of federal highway legislation. He said bookings for asphalt plants remain comparable with 2025 levels and noted that June and July order activity was strong, with July among the company’s best booking months for asphalt plants.
“The business is strong,” van der Merwe said in response to an analyst question. “Bookings is comparable to last year,” though shifting several plant deliveries between quarters or years can have a meaningful effect on financial results.
Guidance Reduced on Asphalt Plant Scheduling
Astec lowered its full-year 2026 adjusted EBITDA guidance to a range of $160 million to $175 million, from its previous outlook of $170 million to $190 million. The company expects roughly one-third of second-half adjusted EBITDA in the third quarter and two-thirds in the fourth quarter.
Management said the lower end of the new range has strong visibility, while reaching the upper end will depend partly on the timing of orders that could be added for fourth-quarter delivery. The company maintained its other full-year expectations, including:
- Effective tax rate of 26% to 30%
- Depreciation and amortization of $55 million to $65 million
- Capital expenditures of $35 million to $45 million
- Quarterly adjusted selling, general and administrative expense of $70 million to $75 million
- Interest expense of about $7 million per quarter
Chief Financial Officer Brian Harris said Astec ended the quarter with $75.7 million in cash and cash equivalents and $190.1 million in available credit, for total available liquidity of $265.8 million. Net leverage was 2.2 times, within the company’s 1.5-to-2.5-times target range. Astec expects net leverage to decline to about 1.7 times by the end of 2026.
Federal Funding and Product Expansion
Management said it expects federal, state and local infrastructure projects to support multiyear demand. Van der Merwe said the proposed BUILD America 250 Act includes a proposed 7% increase in highway funding and an approximately 12% increase for bridge improvements, while increasing the formula-funded share of transportation spending.
The timing of renewal for the Federal Highway Bill remains uncertain, and management said a continuing resolution appears likely. Still, van der Merwe said the company believes a longer-term bill is a question of “when, not if.”
Astec also introduced eight new models at the Hillhead 2026 quarrying, construction and recycling event in the United Kingdom, including products in its Frontier crushing, screening, washing and material handling lines. The company displayed two additional prototypes that it expects to make available for sale later this year and introduced two new U.K. dealers for its products.
About Astec Industries (NASDAQ:ASTE)
Astec Industries, Inc is a designer and manufacturer of specialized equipment for infrastructure-related markets. Headquartered in Chattanooga, Tennessee, the company develops, engineers and produces machinery for asphalt road-building, aggregate processing, concrete production, underground mining, landscaping and utility installation. Astec’s product portfolio includes asphalt plants, portable crushers, conveyors, screening plants, mixers, continuous miners and related support equipment.
Organized into multiple operating segments—Roadbuilding; Aggregate & Mining; Energy; and Pavement Preservation & Maintenance—Astec Industries serves contractors and municipalities that build and maintain transportation, energy and utility networks.
