F O C U S E D O N T H E F U T U R E
2 0 1 5 A N N U A L R E P O R T
FINANCIAL OVERVIEW
(in thousands, except as noted*)
2015
2014
2013
2012
2011
OPERATING RESULTS
(cid:2)Net sales
$983,157
$ 975,595
$ 932,998
$ 936,273
$ 908,641
(cid:2)Net income attributable to controlling interest
32,797
34,458
39,042
40,828
40,563
FINANCIAL POSITION
(cid:2)Total assets
(cid:2)Working capital
(cid:2)Equity
PER COMMON SHARE*
Net income attributable to controlling interest
(cid:2)Basic
(cid:2)Diluted
(cid:2)Book value per common share at year end
OTHER DATA
Weighted average number of common
shares outstanding
(cid:2)(cid:2)Basic
(cid:2)(cid:2)Diluted
Associates*
$777,353
$ 802,265
$ 749,291
$ 728,783
$ 719,481
399,785
388,862
385,680
355,336
330,519
609,858
596,152
577,311
547,534
528,098
$
1.43
$
1.42
26.30
1.51
1.49
25.62
$
1.72
$
1.80
$
1.80
1.69
24.85
1.77
23.68
1.76
22.95
22,934
22,819
22,749
22,680
22,589
23,120
23,105
23,081
23,051
22,984
3,740
3,952
3,708
3,860
3,885
01 Our Industry Leading Footprint
02 Letter to Shareholders
04 New Products and Technologies
CONTENTS
INFRASTRUCTURE GROUP
AGGREGATE & MINING GROUP
ENERGY GROUP
06 Astec and Dillman Equipment
08 Roadtec
10 Carlson Paving Products
12 Astec Australia
14 Astec Mobile Machinery
16 Telsmith
18 Osborn Engineered Products
20 Breaker Technology
22 Astec do Brasil
24 Kolberg-Pioneer
26 Johnson Crushers
International
28 Astec Mobile Screens
30 Telestack
32 Heatec
34 CEI Enterprises
36 Peterson Pacific Corp.
38 GEFCO
CORPORATE INFORMATION
40 Corporate Executive Officers
ASTEC INDUSTRIES, INC. 1 2015 ANNUAL REPORT
INDUSTRY LEADING FOOTPRINT
THE COMPANIES OF ASTEC INDUSTRIES, INC. MANUFACTURE MORE THAN 220 PRODUCTS
FOR A GLOBAL CUSTOMER BASE OPERATING IN THE SECTORS OF INFRASTRUCTURE,
AGGREGATES, MINING, AND ENERGY.
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NORTH AMERICA
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7
13
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18
16
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15
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SOUTH AMERICA
EUROPE
I N F R A S T R U C T U R E G R O U P
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10
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1 Astec
2 Dillman Equipment
3 Roadtec
4 Carlson Paving Products
5 Astec Australia
6 Astec Mobile Machinery
A G G R E G A T E & M I N I N G G R O U P
AFRICA
AUSTRALIA
5
8
7 Telsmith
8 Osborn Engineered Products
9 Breaker Technology
10 Astec do Brasil
11 Kolberg-Pioneer
12 Johnson Crushers International
13 Astec Mobile Screens
14 Telestack
E N E R G Y G R O U P
15 Heatec
16 CEI Enterprises
17 Peterson Pacific Corp.
18 GEFCO
ASTEC INDUSTRIES, INC. 2 2015 ANNUAL REPORT
FELLOW SHAREHOLDERS:
We have made some nice
improvements in our company
despite a challenging environment
during the last two years and we
have a bright outlook in the
short-term and long-term.
Benjamin G. Brock
President and Chief Executive Officer
Our corporate management team and subsidiary
presidents took some time in September and
together developed a five-year strategic plan.
We came away from that meeting with a renewed
focus on our goal to grow our company deliberately
and strategically through new product releases
and market share gains; while adding new
subsidiaries through acquisitions in the industries
we serve.
We faced many challenges during 2015 but
gained market share in some areas and improved
our operations. First, we were challenged by a
strong United States dollar, which impeded our
ability to sell equipment for export by making it
more expensive for our international customers.
Second, the low cost of oil essentially ceased the
purchasing of equipment by our customers in the
oil industry. Third was the slowdown of global
mining activity, which greatly impacted the mining
industry's purchasing ability of equipment. Finally,
there was no long-term federal highway bill in the
United States, which kept infrastructure customers
cautious and conservative with regard to major
capital expenditures for equipment.
Our team did well, offsetting the obstacles
through market share gains in the United States,
lean manufacturing efforts, and strategic purchasing
from our partner vendors. The market share gains
were a result of sales efforts and new product
development across our subsidiaries. Our lean
manufacturing effort at each subsidiary has
resulted in improvement in their operations.
Finally, our purchasing departments worked
with our vendors to ensure the best price levels
available while not sacrificing quality.
The result of these company-wide efforts
was sustained margins and slightly increased
volume despite the global environment. We are
proud of our team effort and excited for what is
in front of us.
For the first time in over a decade, the United
States has a long-term highway bill in place. We
are already experiencing the impact of the bill
with increased sales activity from infrastructure
group customers. We are encouraged about our
prospects during the first 3 to 4 years of this bill.
In addition to the highway bill, our wood
pellet production plants are gaining momentum.
We were excited to announce in 2015 a $30 million
order, and the outlook is good for these plants.
There is great potential in this industry over the
next five years.
ASTEC INDUSTRIES, INC. 3 2015 ANNUAL REPORT
The 2015 challenges of a strong United
States dollar, low oil prices, and the global mining
slowdown look to be ongoing in 2016. Our work to
offset these lies in new products that will help our
customers be more successful. We will also work
to fill our manufacturing plants that are affected
by the low oil prices and mining slowdown with
new products and products from divisions with
strong order activity, and we will work to grow
our parts and service sales globally.
Our effort to add new subsidiaries to our
family of companies is on-going and we have a
goal for one or two acquisitions during 2016.
However, we will only acquire companies if there
is a strategic fit with our business and a cultural
fit with our core values.
We will continue to focus on sales and gross
margin improvement in 2016. We continue to
benchmark between subsidiaries in more formal
ways, push our R&D efforts across the board, and
we are maintaining our international sales and
service structure so that we are ready whenever
the United States dollar weakens again.
Changing subjects, many of you know that
our company’s founder, and my father, J. Don
Brock passed away on March 10, 2015. It is no
secret how much our company meant to him and
how much he meant to our company. We miss
him. Many people have commented to me that I
have big shoes to fill. My reply was that there are
no size “Don” shoes, and that we are going to fill
his shoes together as a team going ahead.
I am pleased to report that we, the team, are
filling his shoes in a way that we think would make
him proud. We are moving ahead with a focus on
the future. The future is bright.
Thank you for taking the time to read this
letter and thank you for your support.
Sincerely,
Benjamin G. Brock
President and Chief Executive Officer
Astec Industries, Inc.
NET SALES (IN MILLIONS)
$1,000
900
800
700
600
500
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
$663.7
$817.8
$891.3
$698.1
$737.1
$908.6
$936.3
$933.0
$975.6
$983.2
OPERATING PROFIT (IN PERCENT)
10.00
8.00
6.00
4.00
2.00
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
8.37%
9.54%
8.91%
4.39%
6.86%
6.43%
5.46%
5.97%
5.30%
5.08%
ASTEC INDUSTRIES, INC. 4 2015 ANNUAL REPORT
INVESTING IN NEW PRODUCTS, TECHNOLOGIES AND MARKETS
ASTEC INDUSTRIES, INC. IS COMMITTED TO BRINGING INNOVATIVE PRODUCTS AND
SOLUTIONS TO MARKET THROUGH NURTURING THE
INVENTIVE SPIRIT OF OUR
EMPLOYEES AND LISTENING TO THE NEEDS AND WANTS OF CUSTOMERS. ULTIMATELY,
OUR GOAL IS TO SUPPLY OUR CUSTOMERS WITH STATE-OF-THE-ART EQUIPMENT WHICH
ENABLES THEM TO OPERATE PROFITABLY.
1. THE FUSION CONCRETE PLANT uses precision aggregate blending to
minimize voids, allowing concrete production that consumes less cement than
typical batch methods.
H Y B R I D P R O C E S S R E A DY M I X P L A N T
The core of the CEI FUSION plant is the multi-bin aggregate blending unit. The
unit holds up to four separate sizes of aggregates in four individual feeder bins.
Each bin has its own conveyor that feeds measured amounts of aggregate onto
a full-length collecting conveyor.
This type of aggregate blending is long-established and well-proven in the asphalt
industry, where precise aggregate mixtures are critical. This technology provides
ready mix producers the ability to blend aggregates with minimal voids. The
reduced voids require less cement paste to fill them, thus reducing cement
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consumption and the associated costs.
2. THE HEATEC GAS VAPORIZER was created for a refinery in Louisiana where the customer
is converting natural gas to liquids. The vaporizer raises the temperature of heat transfer fluid
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until it reaches vapor state. The vapor then indirectly heats the product, in this case natural
gas. This type of heater is used in a variety of industries, including the food, chemical,
petrochemical and petroleum industries. It can be used either for liquid or vapor-phase heating.
Vapor-phase heating is used where the product requires precise, uniform temperature control.
3. THE NEW PORTABLE K300/6203CC from
Johnson Crushers International is a crushing
and screening plant designed to provide
application versatility and serve as the perfect
rental tool for producers in sand and gravel,
quarry or recycle applications. The K300/6203CC
combines a heavy-duty, roller bearing Kodiak®
Plus K300+ Cone Crusher with a triple-shaft,
low-profile horizontal screen. In its closed-circuit
configuration, the K300/6203CC allows producers
to use a single chassis to produce up to three
finished products or supplement existing demand
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in a small footprint, reducing the number of
auxiliary conveyors required to get the job done.
ASTEC INDUSTRIES, INC. 5 2015 ANNUAL REPORT
4. THE PETERSON 5710D WOOD RECYCLER was redesigned to accommodate
the higher heat rejection and additional space required for Tier 4 engines. This
popular 1050 HP model is used by high capacity compost, mulch and waste wood
recycling companies. The “D” model has many improvements that include tracks
with higher speed and tractive effort, a longer conveyor option, a redesigned
hopper for faster feeding and a high efficiency hydraulic system. The new touch
screen control system and software provides additional troubleshooting and control
algorithms that permit the operator to select the optimum control for different
feedstock and finished products. All Peterson wood recyclers utilize Peterson’s
patented impact release system that minimizes damage when the feedstock is
contaminated by metal.
5. THE TELESTACK TS 331 RADIAL TELESCOPIC SHIPLOADER, loading its first
vessel, a 3000 dwt coaster vessel directly from their processing plant in Drogheda,
Ireland. This is part of the investment by the customer – Premier Periclase Ltd (Part
of RHI AG – Austria) to modernize their shiploading system to eliminate dust emis-
sions from the system. The customer is loading a very unique periclase (very dusty)
material which is pumped from the ocean bed, processed in the Premier Periclase
plant and exported primarily throughout Europe to be used for making high
temperature ‘bricks’ within cement kilns. The previous system lead to many
complaints locally in relation to dust when shiploading, so the critical concern was
dust/spillage elimination. The radial telescopic shiploader meets these requirements
with the integration of dust extraction systems installed on the transfer points,
along with dust covers and sealed transfers throughout the unit. Also, the use of a
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telescopic cascade chute at the discharge ensures the material is discharged inside the vessel at a ‘low
velocity’ ensuring minimal dust emissions within the hold. The radial and telescopic features also allow
the unit to load/trim their entire vessel from 1 x feed-in position, which would not be possible on a similar
fixed length shiploader. This minimizes downtime and ensures that production is maintained throughout
the loading sequence as no time will be lost during the trimming procedure.
6. TELSMITH'S T900 CONE CRUSHER is a true mine-duty machine designed and engineered to deliver
maximum uptime, productivity, safety, and ease of maintenance amidst the 24/7 operating demands of
the toughest hard rock mining applications. Offering a capacity output range from 550 to 2100 MTPH,
with up to a 15-inch feed size, the T900 is rated with the largest in-class clearing stroke, the highest
in-class crushing force, and boasts 900-HP performance. The T900 has five patents pending for new
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technology, including the hybrid bearing system, thread sealing system, concave
retention system, improved anti-spin system, and relief/clearing cylinder position.
7. ROADTEC'S RX-500eLR COLD PLANER is a half-lane cold planer with the ground
breaking feature of being able to cut flush on both the left and right hand side of
the machine. Typical cold planers only have the ability to cut flush on the right hand
side which presents a problem when needing to cut with traffic on the left hand
side of a roadway. The options are to operate the machine against traffic which
presents trucking issues or to leave behind a significant amount of material. The
RX-500 solves this problem by driving the cutter drum with two hydraulic motors
eliminating the typical wide belt drive that typically prevents cutting flush on the
left side.
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ASTEC INDUSTRIES, INC. 6 2015 ANNUAL REPORT
ASTEC AND
DILLMAN EQUIPMENT
LOCATIONS: CHATTANOOGA, TENNESSEE, USA AND
PRAIRIE DU CHIEN, WISCONSIN, USA
REPORTING GROUP: INFRASTRUCTURE
INDUSTRIES SERVED:
INFRASTRUCTURE
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Portable Asphalt Plants
(cid:81) Soil Remediation Equipment
(cid:81) Relocatable Asphalt Plants
(cid:81) Wood Pellet Processing Plants
(cid:81) Stationary Asphalt Plants
(cid:81) Control Systems
Astec continues to be a world leader in
Hot and Warm Mix Asphalt equipment
technology.
Astec offers a complete line
Astec maintains a leadership
possible through an innovative
of portable, relocatable and
position in the North American
automated control system.
stationary asphalt plant
asphalt mixing plant market
equipment produced under the
through its status as an innovator
Astec and the Dillman brands.
offering the most complete line
In addition, Astec manufactures
of mixing systems including the
soil remediation equipment and
counter-flow Unidrum™ and the
wood pellet processing plants.
Double Barrel® drum lineup.
At the close of 2015, Astec saw its
pellet plant business grow with
the sale of a pellet production line
for a new facility in Arkansas.
In addition, the V-pack™ stack
temperature control system
continues to garner praise for
allowing asphalt mixing plants to
operate in the most efficient way
With the passage of a long-term
federal highway bill in the United
States at the close of 2015,
Astec is optimistic about future
prospects and plans to continue
to position itself to take full
advantage of all opportunities.
TOP TO BOTTOM: 1. An ASTEC relocatable asphalt plant in Florida. 2. A stationary Dillman Unidrum plant in Minnesota.
3. Voyager 120 highly portable 120 mtph asphalt plant capable of running 30% RAP. 4. Astec’s state-of-the-art wood pellet
processing plant. 5. New Double Barrel XHR high RAP asphalt drum allows usage of 65% reclaimed asphalt product.
ASTEC INDUSTRIES, INC. 7 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 8 2015 ANNUAL REPORT
ROADTEC
LOCATION: CHATTANOOGA, TENNESSEE, USA
REPORTING GROUP: INFRASTRUCTURE
INDUSTRIES SERVED:
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Milling Machines
(cid:81) Highway Class Asphalt Pavers
(cid:81) Cold In Place Asphalt Recyclers
(cid:81) Material Transfer Vehicles
(cid:81) Commercial Class Asphalt Pavers
(cid:81) Self-Propelled Brooms
Founded in 1981, Roadtec, began as a
manufacturer of asphalt pavers. Roadtec offers
an extensive product line, including cold
planers, cold in place recyclers, soil stabilizers,
brooms and material transfer vehicles.
In 2015, Roadtec continued to
diagnose issues and see the
promoting these new parts.
update and refine its existing
operation of a machine in real
This is an area of business that
products with the latest Tier 4
time. This combined with two-way
is rapidly growing and allows
Final emissions standards and
communication with the machine
Roadtec to expose customers
operational features as well
allows Roadtec to always be
of the competition to its world-
as continuously improving its
there for their customers even
renowned customer service.
already industry leading
when they are far away.
customer service. Further
development and promotion of
the company’s ground breaking
Guardian telematics system
allows Roadtec to remotely
Roadtec will carry its expanded
Roadtec greatly expanded its line
product line and excellent
of competitive wear parts for
service reputation into 2016
other makes and models of
with optimism and continued
asphalt paving and cold planing
focus on customer support
equipment and is aggressively
and satisfaction.
TOP TO BOTTOM: 1. The SB-2500e/ex Shuttle Buggy® material transfer vehicle (MTV) can store and transfer hot mixed asphalt
material from a truck to a paver for continuous paving. 2. The SP-100 Stealth™ paver is a simply designed, low-maintenance
gravity-fed paver specifically for operating with the Roadtec Shuttle Buggy® material transfer vehicle. 3. The Roadtec SX-8e/ex
soil stabilizer-reclaimer features a clean-running 755 hp (563 kW) engine. 4. The Roadtec RP-170e Paver with Eagle 8 Screed: the
RP 170 is an 8 foot highway class hot mix asphalt paver with an 8 foot rear extendable screen. 5. The Roadtec RX-300e compact
milling machine combines maneuverability with high performance to easily operate in a wide range of applications.
ASTEC INDUSTRIES, INC. 9 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 10 2015 ANNUAL REPORT
CARLSON PAVING PRODUCTS
LOCATION: TACOMA, WASHINGTON, USA
REPORTING GROUP: INFRASTRUCTURE
INDUSTRIES SERVED:
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Asphalt Paving Screeds
(cid:81) Asphalt Screed Attachments
(cid:81) Commercial Class Asphalt Pavers
(cid:81) Mobile Equipment Lighting
Founded in 1986 in Tacoma, Washington,
Carlson Paving Products has grown to
become the asphalt paving industry’s leader
in screeds, attachment innovations and
commercial paver platforms.
The undisputed leader in
Carlson has continued to
With strong momentum and
highway class screeds, Carlson
expand its line of commercial
marking 30 years, Carlson Paving
produces seven platforms in
class pavers with the introduction
Products heads into the coming
front-mount, rear-mount and
of two new platforms in the
year with an optimistic outlook
fixed width variations. Available
CP75 and an export-compliant
and expanded opportunities
for nearly any tractor built by the
CP100 for international markets.
domestically and abroad.
major paver manufacturers, the
Renowned for their reliability,
Carlson EZIV, EZV and EZR2
paving performance and
lead the industry in mat quality,
unrivaled quality, Carlson’s
reliability and wide-width rigidity
growing lineup of CP asphalt
unmatched by any other screed
pavers are giving contractors
manufacturer.
superior platforms for profit
and success.
TOP TO BOTTOM: 1. CP100: The CP100 is available in two-man and three-man elevated operator platform configurations to fit
the needs and wants of contractors. 2. CP100: The CP100 has fast become the contractors’ choice for commercial class asphalt
paver domestically and is now available as an export model with a Tier III engine. 3. EZR2: The EZR2 utilizes a unique extension
support system that gives the platform greater rigidity at wide widths compared to other rear-mounts in its class. 4. LED Blade
Light: Eliminating glare, excess heat and insects while using very little power, the Carlson LED Blade Light brilliantly illuminates
mobile platforms and flagging stations for increased work zone and motorist safety. 5. EZIV and EZV: From interstates to
racetracks, the EZIV and EZV give contractors a wide range of versatility while delivering impeccable mat quality and unequaled
reliability at any width.
ASTEC INDUSTRIES, INC. 11 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 12 2015 ANNUAL REPORT
ASTEC AUSTRALIA
LOCATION: ACACIA RIDGE, QUEENSLAND, AUSTRALIA
REPORTING GROUP: INFRASTRUCTURE
INDUSTRIES SERVED:
INFRASTRUCTURE
AGGREGATE AND MINING
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Milling Machines
(cid:81) Highway Class Asphalt Pavers
(cid:81) Cold In Place Asphalt Recyclers
(cid:81) Material Transfer Vehicles
(cid:81) Commercial Class Asphalt Pavers
(cid:81) Aggregate and Mining Equipment
(cid:81) Asphalt Plants
Exclusively representing products manufactured
by the family of Astec companies, Astec
Australia is totally committed to exceeding
customer expectations and needs.
Operating in Australia to support
achievements across a number
of a fleet of track equipment
New Zealand and the South
market segments.
Pacific region, Astec Australia
has built a successful history
of equipment and part sales
coupled with an enviable
reputation for customer service,
training and support in the
Astec Australia successfully
delivered the first Voyager
targeting quarry contractors
and successfully secured a
number of long-term contracts.
120 Portable Asphalt Plant to
During 2015, Astec Australia
Australia and will take delivery
increased the number of customer
of a second plant in early 2016.
schools and operating training
infrastructure and construction
The Asphalt team installed three
materials industries.
V-Pack® Systems for its asphalt
Building long-term partnerships,
strategically placed service
centers and supporting national
customers to provide even
better plant control, increased
industry associations have been
In early 2016, Astec Australia
tactics to the growth of its strong
will also deliver Telsmith’s first
customer base.
3258 Track Jaw Crusher to
Although Australia experienced
a substantial downturn across
meet the demands of a growing
recycling market.
most markets during 2015,
The Aggregate team launched a
Astec Australia made notable
rental division with the introduction
workshops by fifty percent, with
full attendance by key customers
and facilitated jointly by Astec
Australia and Astec Industries.
a number of initiatives to ensure
growth in 2016 and will continue
to develop opportunities and
provide excellent service to
their customers.
productivity and cost efficiencies.
Astec Australia has implemented
TOP TO BOTTOM: 1. Astec asphalt plant. 2. A Telsmith mobile crushing plant. 3. A Roadtec RP-190ex paver. 4. Roadtec
RX300ex and RX600ex milling machines. 5. Field service vehicles.
ASTEC INDUSTRIES, INC. 13 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 14 2015 ANNUAL REPORT
ASTEC MOBILE MACHINERY
LOCATION: HAMELN, GERMANY
REPORTING GROUP: INFRASTRUCTURE
INDUSTRIES SERVED:
INFRASTRUCTURE
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Material Transfer Vehicles
(cid:81) F ront Mounted Brooms
(cid:81) Asphalt Pavers—Asphalt Screeds
(cid:81) Road Wideners
(cid:81) Milling Machines
(cid:81) Cold in Place Recylers
(cid:81) Wood Processing Equipment
Astec Mobile Machinery (AMM) is a sales,
service, and parts provider in Europe for
mobile construction and wood processing
equipment.
AMM supplies road wideners, specialized asphalt/
In 2015, AMM began representing Peterson Pacific
RCC paving screeds, and material re-mix hoppers
products in Europe.
for hot mix asphalt and stabilized soil. Located in
Hameln, Germany, AMM has sold equipment to
several European countries and to a few countries
in the Middle East. To date, the primary products
sold by AMM have been from Roadtec.
In the future, AMM will work to represent additional
Astec Industries subsidiaries as opportunities arise.
TOP TO BOTTOM: 1. Tamper bar screeds achieve 95% density before rolling. 2. Shuttle Buggy 2500E transfers, remixes, and
reblends asphalt before entering the paver. 3. Tandem paving with two Shuttle Buggies. 4. RX-600e asphalt milling machine.
ASTEC INDUSTRIES, INC. 15 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 16 2015 ANNUAL REPORT
TELSMITH
LOCATION: MEQUON, WISCONSIN, USA
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Cone, Jaw and Impactor Crushers
(cid:81) Feeders
(cid:81) Horizontal and Vertical Screens
(cid:81) Track and Wheeled Portable Plants
(cid:81) Conveyors
(cid:81) Modular Plants
Every member of Team Telsmith is focused
on utilizing advances in technology and
adhering to stringent quality standards to
provide integrated processing solutions
to customers throughout the world.
From a campus in Mequon,
Telsmith consistently demon-
on through to parts and service
Wisconsin, Telsmith provides a
strates a commitment to
to keep equipment running for
full range of integrated processing
customer needs throughout
decades. Telsmith continues to
equipment to the aggregate,
the product life cycle, from
meet the growing demand for
mining, industrial, and recycling
experienced applications
mineral processing equipment
industries with cone crushers, jaw
engineers designing a solution
around the world with safe,
crushers, vibrating equipment,
that enables customers to meet
efficient and profitable solutions.
portable plants, and track plants,
business goals, craftsmen
as well as full scale modular
utilizing the latest advances in
processing facilities.
manufacturing technology,
on-site factory start-up teams,
TOP TO BOTTOM: 1. Telsmith screens and conveyors within a modular application. 2. A Telsmith conveyor moving material
between a primary station and screening plant. 3. Telsmith SBS cone crushers within a modular plant application. 4. Telsmith Jaw
Crusher and BTI breaker within a modular application. 5. Telsmith screen tower within a modular application. 6. In 2015, Telsmith
launched a line-up of vibrating pan feeders. 7. Telsmith 6060 Track Impactor Plant.
ASTEC INDUSTRIES, INC. 17 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 18 2015 ANNUAL REPORT
OSBORN ENGINEERED
PRODUCTS
LOCATION: JOHANNESBURG, SOUTH AFRICA
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Jaw and Cone Crushers
(cid:81) Vibrating Screens
(cid:81) Modular Crushing Plants
(cid:81) Aggregate Feeders and Conveyors
(cid:81) Coal Crushers
(cid:81) Rotary Scrubbers
Osborn Engineered Products is a
97 year old, South African company
based in Johannesburg, proudly supporting
the mining industry worldwide.
A full-service company with
they intend to process, with the
supported by a local parts and
design and manufacturing
major mining houses providing
service network.
capabilities, Osborn machines
the testimonial to Osborn's
are robust and reliable to with-
service and support.
Osborn continues to add to its
machine offering, with a 400Kw
stand the harshest operating
conditions. With a vast installed
machine base across all ore
bodies, Osborn is able to demon-
strate to prospective customers
its machines working the ores
Having taken on the African
650 x 2.5m mineral-sizer, and a
distribution of the American
metric 5260 HSI, engineered and
Astec companies’ products five
built locally during the past year.
years ago, Osborn is seeing
growing acceptance and demand
for the imported machines,
TOP TO BOTTOM: 1. Modular Plant – China. 2. 3042 Jaw Crusher Modular - Russia. 3. 6 x 20 Modular Screen – Namibia. 4. 24 Cones
at Diamond Operation – Botswana. 5. 3,6 x 7,2 Rotary Coal Breaker – South Africa. 6. Dual 4250 Impactor Plants – Namibia.
7. 52 Cone Modular – China.
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ASTEC INDUSTRIES, INC. 20 2015 ANNUAL REPORT
BREAKER TECHNOLOGY
LOCATIONS: THORNBURY, ONTARIO, CANADA, RIVERSIDE, CALIFORNIA, USA
AND SOLON, OHIO, USA
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Mine, Quarry and Construction Equipment (cid:81) Rockbreaker Systems
(cid:81) Underground Mechanized Scalers
(cid:81) Hydraulic Breakers
(cid:81) Underground Mobile Rockbreakers
(cid:81) Demolition and Construction
(cid:81) Underground Utility Vehicles
Attachments
Breaker Technology (BTI) is a leading North
American manufacturer and distributor of a
wide range of mining, quarry, construction and
demolition equipment that help companies
improve productivity and break into profitibility.
Specializing in Rockbreaker
vehicle built specifically for the
dealer network supplies and
Systems, BTI offers models in
demanding underground
services mining and aggregate
10 different series, with over
environment, with more power
equipment worldwide. BTI
280 boom/breaker combinations
and fewer maintenance costs
offers a depth of engineering
breaking oversize materials
than the popular repurposed
experience, a dedicated and
at primary crushers, grizzlies,
consumer trucks used today.
professional support network
draw points and stopes, custom
designed for use in aggregate
and mining applications.
Situated along the Southern
Georgian Bay in Thornbury,
Ontario, BTI has been innovating
BTI’s latest innovation is the
custom engineering solutions
Mine Runner, an all-purpose
since 1958. Its highly qualified
and a commitment to superior
customer service, remaining
a trusted brand in today’s
aggregate and mining industries.
TOP TO BOTTOM: 1. BTI’s small line of breakers easily mounts to skid steers and other mobile booms for demolition. 2. Mine
Runner All Purpose Vehicle powers future-focused mining operations aimed at increased productivity, lower emissions and safety.
3. One of BTI’s larger Rockbreaker Systems, the TTX is the primary choice for heavy grizzly and standard gyratory applications.
4. RMS18 Scaler is equipped to withstand harsh, continuous duty rock breaking applications with exceptional efficiency. 5. MBS12
Rockbreaker System with a BX20 Rockbreaker on a mobile jaw crushing plant. The MBS Rockbreaker Series improves productivity
on mobile crushing plants.
ASTEC INDUSTRIES, INC. 21 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 22 2015 ANNUAL REPORT
ASTEC DO BRASIL
LOCATION: VESPASIANO, MINAS GERAIS, BRAZIL
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Mobile Screening Plants
(cid:81) High Frequency Screens
(cid:81) Portable Screening Plants
(cid:81) Crushing and Vibrating Equipment
(cid:81) Stationary Screen Structures
(cid:81) Asphalt Production Equipment
Astec do Brasil, the only Astec Industries
manufacturing facility in South America,
had its grand opening in March 2015.
Astec do Brasil produces
of some complete crushing
the Voyager 120 Asphalt Plant
crushers, vibrating screens,
plants manufactured in the
for sister company Astec, Inc.
portable plants and asphalt
new facility, Astec do Brasil is
The Astec do Brasil produced
plants. In addition, Astec do
becoming an important supplier
Voyager 120 is scheduled for a
Brasil supports and markets
for the aggregate, mining and
first quarter 2016 delivery to
equipment from the Astec
infrastructure segment with
the customer. Astec do Brasil
Industries, Inc. family of
the goal to become the leader
continues to increase its line
companies, such as track
in the Brazilian market while
of products focusing on quality,
mounted equipment, material
also expanding to the South
efficiency and customer
transfer vehicles and scalers.
American market. In 2015, Astec
satisfaction.
With the delivery and startup
do Brasil started manufacturing
TOP TO BOTTOM: 1. Primary Crushing Plant – Embu SA Customer – São Paulo State – Brazil – Equipment: H3244 Jaw Crusher,
5' x 14' DD Vibrating Screen, VGF 48" x 16' Vibrating Feeder. 2. CMH3244 Portable Plant - Odebrecht Customer – Mato Grosso State
– Brazil. 3. CM44SBS Portable Plant – Odebrecht Customer – Mato Grosso State – Brazil. 4. Primary Crushing Plant – Embu SA
Customer – São Paulo State – Brazil – Equipment: H3244 Jaw Crusher, 5' x 14' DD Vibrating Screen, VGF 48" x 16' Vibrating Feeder.
5. Complete Crushing Plant – SA Paulista Customer – Alagoas State – Brazil – Equipment: H3244 Jaw Crusher, 6' x 20' TD and DD
Vibrating Screen, VGF 48" x 16' Vibrating Feeder, 44SBS Cone Crusher.
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ASTEC INDUSTRIES, INC. 24 2015 ANNUAL REPORT
KOLBERG-PIONEER
LOCATION: YANKTON, SOUTH DAKOTA, USA
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Material Handling Equipment
(cid:81) Washing and Classifying Equipment
(cid:81) Crushing Equipment
(cid:81) Portable Equipment
(cid:81) Screening Equipment
(cid:81) Stationary Equipment
(cid:81) Track-Mount Equipment
For more than 75 years, Kolberg-Pioneer has
led the marketplace in designing powerful
equipment for the aggregate, construction,
mining, paving and recycling industries.
Marketed under the KPI-JCI
new markets, including the
KPI-JCI and Astec Mobile
and Astec Mobile Screens
2056 Vanguard Jaw Crusher,
Screens also launched S-Series
brand, Kolberg-Pioneer
portable hopper feeder and
parts in 2015. S-Series parts
manufactures complete lines
portable tow-behind conveyor.
are an exclusive, extremely
of crushing, screening, material
The company also unveiled
competitively-priced brand of
handling and washing and
significant improvements to its
cone liner and jaw die parts
classifying equipment in
existing product lines that are
designed by Astec Industries
stationary, portable and
designed to enhance ease-of-use
foundry experts who specialize
mobile configurations.
and performance, including
in metallurgy and manufacturing
In 2015, Kolberg-Pioneer
launched a number of new
products in efforts to provide
a complete solution to its
customers and penetrate
modifications to its FT4250
engineering. These parts are
track-mounted impactor plant,
offered in addition to the
the GT125 Vanguard Jaw Crusher,
company’s OEM and PDQ parts
the Tramp Iron Relief System
as part of its comprehensive
and the Wizard Touch® stockpile
parts offering sold through its
automation system.
global dealer network.
TOP TO BOTTOM: 1. The new Track Tugger comes equipped with its own engine and is capable of transporting the SuperStacker®
Telescoping Stacker. 2. The dewatering screen is part of KPI-JCI and Astec Mobile Screens’ Series 9000 family of products, which
are custom-engineered and built for each application. 3. KPI-JCI and Astec Mobile Screens offers complete washing and classifying
systems that incorporate industry-leading products into a single, custom-engineered system created to exact specifications.
4. The FT4250 track-mounted impactor features an Andreas Series 4250 Horizontal Shaft Impact Crusher and is part of the
exclusive continuous crushing and tracking family. 5. The 36" x 170' SuperStacker® Telescoping Stacker is the latest model of KPI-JCI
and Astec Mobile Screens telescoping stackers. 6. The new portable tow-behind conveyor is designed to eliminate the costly dou-
ble-handling of material and built as a perfect match for the exclusive line of continuous crushing and tracking impactors. 7. The log
washer features an exclusive reverse involution design, which produces a much more effective scrubbing action to remove tough,
plastic-soluble clays and other unwanted coatings.
ASTEC INDUSTRIES, INC. 25 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 26 2015 ANNUAL REPORT
JOHNSON CRUSHERS
INTERNATIONAL
LOCATION: EUGENE, OREGON, USA
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Crushing Equipment
(cid:81) Screening Equipment
(cid:81) Track-Mounted Equipment
(cid:81) Portable Equipment
(cid:81) Stationary Equipment
Johnson Crushers International, (JCI)
is a global leader in engineering and
manufacturing full lines of cone crushers,
horizontal and incline vibrating screens,
and track-mounted, portable and stationary
crushing and screening plants.
Marketed under the KPI-JCI
featuring a modular design
are an exclusive, extremely
and Astec Mobile Screens brand,
that offers flexibility for easily
competitively-priced brand of
JCI is committed to meeting
converting the plant to meet
cone liner and jaw die parts
consumer demand. In 2015, JCI
producer configuration require-
designed by Astec Industries
added 10,000 square feet of
ments, resulting in a quick
foundry experts who specialize
manufacturing space to expand
turnaround from order to
in metallurgy and manufacturing
its cone crusher production
delivery. JCI also unveiled its
engineering. These parts are
space. JCI plans to soon invest
Q Series 6204 QF Screen, a
offered in addition to the
in new machining centers that
four-deck screen which offers
company’s OEM and PDQ parts
will increase the capacity of the
increased production at a
as part of its comprehensive
cone crusher product line.
lower cost.
In 2015, JCI launched the
KPI-JCI and Astec Mobile
K300/6203CC, a highly-mobile
Screens also launched S-Series
crushing and screening plant
parts in 2015. S-Series parts
parts offering sold through its
global dealer network.
TOP TO BOTTOM: 1. The GT206 features a heavy-duty 20' x 6' inclined screen that offers more screen area and production
potential than other competitive models. 2. The Cascade Incline Screen is designed to provide an economical, high-quality screening
tool for light scalping and general aggregate separation. 3. The Kodiak® Plus K400+ features patented internal counterweights
that maintain true balance. 4. The new portable K300/6203CC is a highly-mobile crushing and screening plant designed to
provide application versatility and serve as the perfect rental tool for producers in sand and gravel, quarry or recycle applications.
5. Kodiak® Plus Cone Crushers feature roller bearings, which reduce operating expenses by up to 50 percent. 6. The Kodiak® Plus
K500+ is a 500-horsepower, remote-adjust cone crusher. It is the latest addition to the Kodiak® Plus Cone Crusher family.
7. The 7203LPPM is a portable screening plant that features a 7' x 20', three-deck horizontal screen and offers a low screen
height for operation in height-restricted areas and maximum portability.
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ASTEC INDUSTRIES, INC. 28 2015 ANNUAL REPORT
ASTEC MOBILE SCREENS
LOCATION: STERLING, ILLINOIS, USA
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Track-Mounted Screening Plants (cid:81) Stationary Screen Structures
(cid:81) Portable Screening Plants
(cid:81) High Frequency Screens
Marketed under the KPI-JCI and Astec
Mobile Screens brand, Astec Mobile Screens
is recognized as a global leader in
screening solutions.
Astec Mobile Screens
program, resulting in saved
(reclaimed asphalt pavement)
products include mobile
time, money and a more price-
and FRAP (fractionated
screening plants, portable and
competitive product.
reclaimed asphalt pavement)
stationary screen structures
and high frequency screens
for the quarry, recycle, sand
and gravel, industrial and other
material processing industries.
Astec Mobile Screens also
expanded its PDQ parts line
in 2015. KPI-JCI and Astec
Mobile Screens offers its
exclusive collection of PDQ
Astec Mobile Screens launched
parts for customers seeking
its new GT104 screening plant
high-performance, after-market
in 2015. The GT104 leads
parts at competitive prices.
the market with the highest
PDQ parts are supported the
stockpile capacity, quickest
same as the company’s OEM
set-up time and largest feed
product line with 24/7 service
hopper in its class. In 2015,
for minimal downtime.
using high frequency screening
technology as a way to increase
production and reduce costs.
As the leading manufacturer
in the portable and stationary
RAP market, Astec Mobile
Screens remains dedicated
to growing alongside the
ever-increasing RAP market.
By fractionating RAP millings
with a portable or stationary
Vari-Vibe® High Frequency screen,
producers can increase RAP
Astec Mobile Screens also
committed to a restructuring
of its lean manufacturing
With the passage of the highway
utilization and operation savings.
bill, Astec Mobile Screens has
strengthened its focus on RAP
TOP TO BOTTOM: 1. Astec Mobile Screens' ProSizer® RAP (recycled asphalt pavement) processing plant. 2. The GT165DF is
designed to provide contractors and producers with a versatile screening plant that can handle high volumes of material in both
scalping and sizing applications. 3. The GT205S is a mobile track screening plant featuring a double- or triple-deck screen for
processing sand and gravel, top soil, slag, crushed stone and recycled materials. 4. The GT205S is a track-mounted screening plant
from the Global Track product line. 5. The GT165DF is part of the Global Track family, a user-friendly, affordable line of products
perfect for contractors around the world seeking quarry-duty components with a strong, simple track design. 6. The ProSizer® 3100
portable high frequency screening plant is engineered to provide higher production capacities and more efficient sizing compared
to competitive screens. 7. In 2015, Astec Mobile Screens launched the GT104, a track-mounted screening plant capable of screening
a wide array of material, from aggregates to recycled materials to organics.
ASTEC INDUSTRIES, INC. 29 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 30 2015 ANNUAL REPORT
TELESTACK
LOCATION: OMAGH, NORTHERN IRELAND
REPORTING GROUP: AGGREGATE AND MINING
INDUSTRIES SERVED:
AGGREGATE AND MINING
INFRASTRUCTURE
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Ship Loaders and Unloaders
(cid:81) Bulk Reception Feeders
(cid:81) Radial Telescopic Stackers
(cid:81) Mobile Hopper Feeders
(cid:81) Track Mounted Conveyors
(cid:81) Reclaim Hoppers
(cid:81) Mobile Truck Unloaders
Telestack offers a range of mobile bulk
material handling solutions that are used in
ports and inland river terminals, mines,
quarries, power stations, steel mills and
cement plants.
Telestack's solutions are used
for their bulk handling facilities.
and to the expected quality
for vessel loading/unloading,
It's externally audited procedures
standards. Robust designs and
stacking, reclaiming and rail
ISO 14001 (Environmental
innovative assembly designs
wagon loading/unloading of dry
Management), OHSAS 18001
allow Telestack equipment to
bulk materials. The end users are
(Health & Safety Management)
be easily packed into shipping
some of the biggest companies
and ISO 9001 (Quality Manage-
containers and quickly assembled
in their chosen industries and
ment Systems) ensures Telestack
on site anywhere in the world
they rely on Telestack's proven
has the processes in place to
ensuring Telestack is competitive
record of performance to
deliver what the customer
globally.
develop customized solutions
ordered on time, within budget
TOP TO BOTTOM: 1. Telestack TU2018R Truck Unloader — the largest Truck Unloader in the international market — as it prepares
for transportation to a large multi-national customer in North America. 2. Telestack TU1016 Truck Unloader loading grains to barges
at the Port of Barranquilla in Columbia. 3. Telestack TU 1016 R Truck Unloader and TS 1242 Radial Telescopic shiploader —
shiploading at Port of Imbituba, Brazil at 750 m3/hr. 4. Telestack TC 431 Radial Tracked Conveyor stockpiling sand in Germany.
ASTEC INDUSTRIES, INC. 31 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 32 2015 ANNUAL REPORT
HEATEC
LOCATION: CHATTANOOGA, TENNESSEE, USA
REPORTING GROUP: ENERGY
INDUSTRIES SERVED:
ENERGY
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Thermal Fluid Heaters
(cid:81) Fuel Preheaters
(cid:81) Process Heaters
(cid:81) Controls
(cid:81) Pump Skids and Expansion Tanks
(cid:81) Tanks
(cid:81) Heat Exchangers
(cid:81) Water Heaters
(cid:81) Polymer Blending Systems
(cid:81) Engineering Services for Asphalt Terminals and Emulsion Plants
Heatec makes, sells and services a broad line
of heaters, liquid storage tanks and related
products that are used by a wide variety of
customers in manufacturing and construction.
Heatec's users are hot-mix
mechanical design and electrical
of the products Heatec produces.
asphalt (HMA) plants, asphalt
engineering work for these
Customers for their industrial
terminals and emulsion terminals.
facilities and builds much of
heaters are mainly chemical
Other key users include oil and gas
the equipment. The company
and oil-gas industries. Heatec
producers, chemical producers,
also assists in on-site installation.
builds and delivers a variety of
food producers, roofing manu-
Heatec polymer blending systems
large heaters for the gas and
facturers, and power plants.
are used at numerous terminals
oil industry.
Heatec is heavily involved in
building new asphalt storage
for making Polymer Modified
Asphalt Cement.
Heatec also provides large
convection heaters for wood
terminals and emulsion plants.
Industrial heaters, unrelated to
pellet plants developed by
The company does major
asphalt, make up a large share
Astec, Inc.
TOP TO BOTTOM: 1. Heatec polymer blending system in Baytown, Texas. The system blends polymer with liquid asphalt for
distribution to HMA plants. 2. Heatec Aquatech™ water bath heater in Stanley, North Dakota. It is used to heat natural gas. 3. Heatec
heating systems in Chincha Province, Peru. The systems condition natural gas for pipeline distribution. Systems include two heaters
that heat water-glycol, heat exchangers and pump skids. 4. Heatec HMO (Hot Media Oil) heater in Cardiz, Ohio. It is used for natural
gas processing. 5. Heatec asphalt storage tanks at a production plant in Chattanooga, Tennessee. The plant produces materials to
seal cracks and patch potholes in roadways. 6. Three Heatec Helitanks™ used in conjunction with a portable HMA plant in Fairbanks,
Alaska. Each tank stores 40,000 gallons of asphalt. Two of the tanks have Heatec thermal fluid heaters.
ASTEC INDUSTRIES, INC. 33 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 34 2015 ANNUAL REPORT
CEI ENTERPRISES
LOCATION: ALBUQUERQUE, NEW MEXICO, USA
REPORTING GROUP: ENERGY
INDUSTRIES SERVED:
ENERGY
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Asphalt Rubber Blending Systems
(cid:81) Emission Control Equipment
(cid:81) Hot Oil Heaters
(cid:81) Liquid Additive Systems
(cid:81) Asphalt Storage Tanks
(cid:81) Concrete Plants
(cid:81) Heavy Fuel Preheaters
CEI Enterprises of Albuquerque, New Mexico
is a leading manufacturer of production
equipment used in the infrastructure and
energy industries.
CEI produces mixing equipment
Concrete production equipment
asphalt in a high-specification
for both concrete and modified
includes the TSC continuous
process that results in better,
asphalt materials. Products
production facility, TSB batch
longer-lasting roads.
include continuous-process
mixer, Ecoheat™ water heater,
and batch-process concrete
and Fusion™ hybrid-process
production facilities, asphalt-
ready mix plant.
Since 1969, CEI has remained
well-known for its asphalt heating
and storage systems. These
rubber blending systems, both
jacketed firebox and helical
coil hot oil heaters, and storage
tanks for liquid asphalt and fuel.
CEI is an industry leader in
include both large-scale heating
asphalt-rubber blending systems.
systems for bulk storage terminals,
These systems mix ground rubber
and smaller systems for hot mix
from recycled tires with liquid
asphalt plants.
TOP TO BOTTOM: 1. CEI vertical asphalt storage tanks with liquid asphalt metering system. 2. Fusion™ hybrid-process ready mix
concrete plant uses precision aggregate blending to minimize voids and reduce cement consumption. 3. Ecoheat™ direct-contact
water heater produces hot water on-demand for cold weather concrete production. 4. TSC Twin Shaft Continuous Blending™ plant
produces all types of concrete from a single facility. 5. Reaction tank for asphalt-rubber mixing system agitates & stores
mixture before use. 6. TSB Mobile Batch Mixer™ allows ready-mix plant owners to produce additional mixes, including RCC. 7.
Blending unit for asphalt-rubber mixing system blends ground tire rubber with liquid asphalt. 8. Jacketed firebox heater with
numerous options for high-efficiency, low-emissions operation.
ASTEC INDUSTRIES, INC. 35 2015 ANNUAL REPORT
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ASTEC INDUSTRIES, INC. 36 2015 ANNUAL REPORT
PETERSON PACIFIC CORP.
LOCATION: EUGENE, OREGON, USA
REPORTING GROUP: ENERGY
INDUSTRIES SERVED:
ENERGY
INFRASTRUCTURE
PRODUCTS AND SERVICES:
(cid:81) Whole Tree Chippers
(cid:81) Whole Tree Debarkers
(cid:81) Horizontal Grinders
(cid:81) Blower Trucks and Trailers
(cid:81) Screening Equipment
(cid:81) Asphalt Shingle Shredders
Peterson Pacific Corp. is a Eugene, Oregon
based manufacturer of grinders, chippers,
debarkers, screens and blower trucks that
serve a wide variety of markets.
The company has 110,000 square
can also reduce certain construc-
to maximize the value of each
feet of modern manufacturing
tion and demolition materials
product. Many Peterson machines
space with a capable and
such as asphalt shingles that
are available in either electric or
innovative engineering group.
can then be recycled and used in
diesel power depending on the
Peterson machines are sold and
hot mix asphalt paving. Peterson
application. For increased mobility
supported through a worldwide
drum and disc chippers and
at a job site, both tracked and
network of distributors and direct
debarkers are used to produce
wheeled versions of many of
sales and service representatives.
wood chips for pulp and paper
their products are available.
Peterson Horizontal Grinders
reduce wood, low value logs
and other organic materials; the
reduced material is used in the
compost, mulch and biomass
energy markets. Peterson grinders
production as well as biomass
energy markets. Peterson blower
trucks and trailers are used to
broadcast compost and mulch
for landscaping and erosion
control. Peterson deck screens
are used for classifying materials
Since 1981, Peterson has
specialized in producing machines
that turn low-grade organic
materials into high value products.
TOP TO BOTTOM: 1. The all-new Peterson 6910D tracked disc chipper is used in tandem with a Peterson 6800 flail and is
designed for high-volume, mobile, clean chipping operations. 2. The highly mobile Peterson 4310B Drum Chipper is popular with
biomass chipping operations. 3. Peterson’s Blower Trucks and Trailers are an ideal tool for erosion control and landscape materials
delivery. 4. An all-electric Peterson 2750C Horizontal Grinder reduces asphalt shingle tiles in California. 5. Peterson’s popular
5710D horizontal grinder packs a winning combination of size and power, making it the market leader in the 1000hp category.
6. A Peterson 2710C Horizontal Grinder makes biomass for energy production in Korea.
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ASTEC INDUSTRIES, INC. 38 2015 ANNUAL REPORT
GEFCO
LOCATION: ENID, OKLAHOMA, USA
REPORTING GROUP: ENERGY
INDUSTRIES SERVED:
ENERGY
PRODUCTS AND SERVICES:
(cid:81) Fluid Pump Trailers
(cid:81) Drills for Oil and Gas
(cid:81) Water Well Drills
(cid:81) Drills for Mining Core Samples
For more than 85 years, GEFCO has provided
rugged and dependable equipment that has
been delivered to over 100 countries.
Designing world class drilling
environmental, groundwater
Engineers focus on incorporating
rigs and related equipment is
monitoring, construction,
state-of-the-art equipment and
a passion that is meticulously
mining and oil & gas exploration
technology to manufacture the
performed with the utmost
and production industries.
most suitable drilling rigs and
scrutiny and perfection at
GEFCO. A world leader in the
design and manufacture of
portable drilling rigs and related
equipment for the water well,
GEFCO employs over 120
professionals with years of
field experience and product
knowledge, which allows them
to remain competitive in the
industries that they serve.
related equipment for today’s
environmental demands. GEFCO
headquarters are located in Enid,
Oklahoma and operates from a
240,000 square feet facility.
TOP TO BOTTOM: 1. The GEFCO 50K, has all the benefits of the GEFCO 30K with more capacity. The drill can handle large casing
loads associated with shallow municipal water wells and deep residential water wells with ease. 2. The GEFCO DP 2000 is a high-
pressure, high volume double fluid pumper for fracturing, cleaning, and stimulating natural gas or petroleum wells. The unit can
use water, frack fluids, or mud mixes in its treatments. 3. The GEFCO 500K is the most advanced and easy-to-operate rig in the
world. The safe, efficient operation keeps your 2-3 man crews out of the Danger Zones. 4. The GEFCO 30K is perfect for shallow
municipal or deep residential water wells. This is the flagship of the water well line, and continues to be an industry leader. 5. The
GEFCO FP 2500 Fracturing Pump is designed for prolonged operation in the demanding conditions of harsh hydraulic fracturing
environments.
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ASTEC INDUSTRIES, INC. 40 2015 ANNUAL REPORT
BOARD OF DIRECTORS
Glen E. Tellock
Former Chairman of the Board, President
and Chief Executive Officer of
The Manitowoc Company, Inc.
Member—Audit Committee
Member—Nominating and Corporate
Governance Committee
Benjamin G. Brock
President and Chief Executive Officer
of Astec Industries, Inc.
Chairman—Executive Committee
William D. Gehl
Chairman of the Board of IBD
Southeastern Wisconsin
Chairman of the Board of
FreightCar America
Member—Compensation Committee
Member—Audit Committee
James B. Baker
Managing Partner of River Associates
Investments, LLC
Chairman—Audit Committee
Member—Compensation Committee
W. Norman Smith
Vice Chairman of Astec Industries, Inc.
Vice Chairman of the Board
Member—Executive Committee
William G. Dorey
Former Chief Executive Officer and
President of Granite Construction, Inc.
Chairman—Compensation Committee
Member—Audit Committee
Member—Nominating and Corporate
Governance Committee
ASTEC INDUSTRIES' CORPORATE EXECUTIVE OFFICERS
PICTURED, FROM
LEFT TO RIGHT:
William B. Sansom
Chairman of the Board and Chief Executive
Officer of The H.T. Hackney Company
Member—Audit Committee
Member—Nominating and Corporate
Governance Committee
Lead Independent Director
Daniel K. Frierson
Chairman of the Board and
Chief Executive Officer of the
Dixie Group, Inc.
Chairman—Nominating and Corporate
Governance Committee
Member—Audit Committee
Member—Executive Committee
Charles F. Potts
Chairman of the Board of Heritage
Construction and Materials
Member—Audit Committee
Member—Compensation Committee
PICTURED, FROM LEFT TO RIGHT,
TOP TO BOTTOM:
Benjamin G. Brock
President and
Chief Executive Officer
Jeffrey J. Elliott
Group Vice President
Aggregate and Mining Group
Richard J. Dorris
Executive Vice President and
Chief Operating Officer
David C. Silvious
Vice President, Chief Financial
Officer and Treasurer
W. Norman Smith
Vice Chairman
Steve Claude
Group President
Infrastructure
Richard A. Patek
Group President
Aggregate and Mining Group
Stephen C. Anderson
Vice President of
Administration, Corporate
Secretary and Director
of Investor Relations
Robin A. Leffew
Corporate Controller
FINANCIAL
INFORMATION
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except as noted*)
2015
2014
2013
2012
2011
Consolidated Statement of Income Data
Net sales
Gross profit
Gross profit %
Selling, general and administrative
expenses
Research and development
Income from operations
Interest expense
Other income (expense), net
Net income from continuing operations
Income from discontinued operations,
net of tax
Gain on sale of subsidiary, net of tax
Net income
Net income attributable to controlling
interest
Earnings per common share*:
Net income attributable to controlling
interest from continuing operations
Basic
Diluted
Income from discontinued operations
Basic
Diluted
Net income attributable to controlling
interest
Basic
Diluted
Consolidated Balance Sheet Data
Working capital
Total assets
Short-term debt
Current maturities of long-term debt
Long-term debt, less current maturities
Total equity
Cash dividends declared per common
share*
Book value per diluted common share
at year-end*
$ 983,157 $ 975,595 $ 932,998 $ 936,273 $ 908,641
211,533
23.3%
207,951
22.2%
215,316
22.1%
207,119
22.2%
218,843
22.3%
145,180
23,676
49,987
1,611
3,055
31,966
--
--
31,966
141,490
22,129
51,697
720
1,207
34,206
--
--
34,206
133,337
18,101
55,681
423
1,937
39,214
--
--
39,214
136,323
20,520
51,108
339
1,783
34,210
3,401
3,378
40,989
132,371
20,764
58,398
190
1,082
40,440
225
--
40,665
32,797
34,458
39,042
40,828
40,563
1.43
1.42
--
--
1.43
1.42
1.51
1.49
--
--
1.51
1.49
1.72
1.69
--
--
1.72
1.69
1.50
1.48
0.30
0.29
1.80
1.77
1.79
1.76
0.01
0.01
1.80
1.76
$ 399,785 $ 388,862 $ 385,680 $ 355,336 $ 330,519
719,481
777,353
728,783
749,291
--
4,528
5,154
609,858
802,265
2,814
1,027
7,061
596,152
--
34
510
577,311
--
--
--
--
--
--
547,534
528,098
0.40
0.40
0.30
1.00
--
26.30
25.62
24.85
23.68
22.95
42
SUPPLEMENTARY FINANCIAL DATA
(in thousands, except as noted*)
Quarterly Financial Highlights
(Unaudited)
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
2015 Net sales
Gross profit
Net income
Net income attributable to controlling interest
Earnings per common share*
Net income attributable to controlling
interest:
Basic
Diluted
2014 Net sales
Gross profit
Net income
Net income attributable to controlling interest
Earnings per common share*
Net income attributable to controlling
interest:
Basic
Diluted
Common Stock Price*
2015 High
2015 Low
2014 High
2014 Low
$ 288,748
66,045
14,917
15,105
$ 268,042
62,233
11,658
11,805
$ 211,350
45,138
1,958
2,292
$ 215,017
45,427
3,433
3,595
0.66
0.65
0.51
0.51
0.10
0.10
0.16
0.16
$ 238,673
56,757
9,547
9,545
$ 277,256
62,178
14,489
14,497
$ 220,157
43,261
1,766
1,916
$ 239,509
53,120
8,404
8,500
0.42
0.41
0.64
0.63
0.08
0.08
0.37
0.37
$
$
$
$
43.85
33.90
46.00
35.07
$
$
45.48
40.64
44.27
38.00
43.78
33.02
$ $41.99
30.76
44.97
36.45
$ $41.09
34.28
The Company’s common stock is traded in the Nasdaq National Market under the symbol ASTE. Prices shown are
the high and low sales prices as announced by the Nasdaq National Market. The Company paid quarterly
dividends of $0.10 per common share to shareholders in each quarter of 2014 and 2015. As determined by the
proxy search on the record date for the Company’s 2015 annual shareholders’ meeting, the number of holders of
record is approximately 270.
43
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollar and share amounts in thousands, except per share amounts, unless otherwise specified)
The following discussion contains forward-looking statements that involve inherent risks and uncertainties.
Actual results may differ materially from those contained in these forward-looking statements. For additional
information regarding forward-looking statements, see “Forward-looking Statements” on page 57.
Overview
Astec Industries, Inc. (the “Company”) is a leading manufacturer and seller of equipment for the road building,
aggregate processing, geothermal, water, oil and gas, and wood processing industries. The Company’s
businesses:
•
•
design, engineer, manufacture and market equipment used in each phase of road building, including
quarrying and crushing the aggregate, mobile bulk and material handling solutions, producing asphalt or
concrete, recycling old asphalt or concrete and applying the asphalt;
design, engineer, manufacture and market additional equipment and components, including equipment
for geothermal drilling, oil and natural gas drilling, industrial heat transfer, wood chipping and grinding,
and wood pellet processing; and
• manufacture and sell replacement parts for equipment in each of its product lines.
Astec Industries, Inc. consists of 19 companies: 15 manufacturing companies, 2 companies that operate as dealers
for the manufacturing companies, a captive insurance company and the parent company. The companies fall within
three reportable operating segments: the Infrastructure Group, the Aggregate and Mining Group and the Energy
Group. The Infrastructure Group is made up of five business units, three of which design, engineer, manufacture
and market a complete line of asphalt plants, asphalt pavers, wood pellet plants and related components and
ancillary equipment. The two remaining companies in the Infrastructure Group primarily sell, service and install
equipment produced by the manufacturing subsidiaries of the Company with the majority of sales to the
infrastructure industry. The Aggregate and Mining Group consists of eight business units that design, manufacture
and market heavy equipment and parts in the aggregate, metallic mining, quarrying, recycling, ports and bulk
handling industries. The Energy Group consists of four business units that design, manufacture and market
heaters, drilling rigs, concrete plants, wood chippers and grinders, pump trailers, storage equipment and related
parts to the oil and gas, construction, and water well industries. The Company also has one other category,
Corporate, that contains the business units that do not meet the requirements for separate disclosure as a separate
operating segment or inclusion in one of the other reporting segments. The business units in the Corporate
category are Astec Insurance Company (“Astec Insurance” or “the captive”) and Astec Industries, Inc., the parent
company. These two companies provide support and corporate oversight for all the companies that fall within the
reportable operating segments.
The Company’s financial performance is affected by a number of factors, including the cyclical nature and varying
conditions of the markets it serves. Demand in these markets fluctuates in response to overall economic conditions
and is particularly sensitive to the amount of public sector spending on infrastructure development, privately funded
infrastructure development, changes in the price of crude oil, which affects the cost of fuel and liquid asphalt, and
changes in the price of steel.
The Company believes that federal highway funding influences the purchasing decisions of the Company’s
customers, who are typically more comfortable making capital equipment purchases with long-term federal
legislation in place. Federal funding provides for approximately 25% of all highway, street, roadway and parking
construction in the United States.
In July 2012, the “Moving Ahead for Progress in the 21st Century Act” (“Map-21”) was approved by the U.S. federal
government, which authorized $105 billion of federal spending on highway and public transportation programs
through fiscal year 2014. In August 2014, the U.S. government approved short-term funding of $10.8 billion through
May 2015. Federal transportation funding operated on short-term appropriations until December 4, 2015 when the
Fixing America’s Surface Transportation Act (“FAST Act”) was signed into law. The $305 billion FAST Act approved
funding for highways of approximately $205 billion and transit projects of approximately $48 billion for the five-year
period ending September 30, 2020. The Company believes a multi-year highway program (such as the FAST Act)
will have the greatest positive impact on the road construction industry and allow its customers to plan and execute
longer-term projects, but given the inherent uncertainty in the political process, the level of governmental funding
for federal highway projects will similarly continue to be uncertain. Governmental funding that is committed or
earmarked for federal highway projects is always subject to repeal or reduction. Although continued funding under
44
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
the FAST Act is expected, it may be at lower levels than originally approved. In addition, Congress could pass
legislation in future sessions that would allow for the diversion of previously appropriated highway funds for other
purposes, or it could restrict funding of infrastructure projects unless states comply with certain federal policies. The
level of future federal highway construction is uncertain and any future funding may be at levels lower than those
currently approved or that have been approved in the past.
The public sector spending described above is needed to fund road, bridge and mass transit improvements. The
Company believes that increased funding is unquestionably needed to restore the nation’s highways to a quality
level required for safety, fuel efficiency and mitigation of congestion. In the Company’s opinion, amounts needed
for such improvements are significantly greater than amounts approved to date, and funding mechanisms such as
the federal usage fee per gallon of gasoline, which is still at the 1993 level of 18.4 cents per gallon, would likely
need to be increased along with other measures to generate the funds needed.
In addition to public sector funding, the economies in the markets the Company serves, the price of oil and its
impact on customers’ purchasing decisions and the price of steel may each affect the Company’s financial
performance. Economic downturns generally result in decreased purchasing by the Company’s customers, which,
in turn, causes reductions in sales and increased pricing pressure on the Company’s products. Rising interest rates
also typically negatively impact customers’ attitudes toward purchasing equipment. The Federal Reserve has
maintained historically low interest rates in response to the economic downturn which began in 2009; however, the
Federal Reserve raised the Federal Funds Rate in late 2015 and may implement additional increases in 2016.
Significant portions of the Company’s revenues from the Infrastructure Group relate to the sale of equipment
involved in the production, handling, recycling or installation of asphalt mix. Liquid asphalt is a by-product of oil
production. An increase or decrease in the price of oil impacts the cost of asphalt, which is likely to alter demand
for asphalt and therefore affect demand for certain Company products. While increasing oil prices may have a
negative financial impact on many of the Company’s customers, the Company’s equipment can use a significant
amount of recycled asphalt pavement, thereby mitigating the effect of increased oil prices on the final cost of
asphalt for the customer. The Company continues to develop products and initiatives to reduce the amount of oil
and related products required to produce asphalt mix. Oil price volatility makes it difficult to predict the costs of oil-
based products used in road construction such as liquid asphalt and gasoline. Oil prices in 2015 were stable
throughout the first half of the year and fell for the last half of the year. Minor fluctuations in oil prices should not
have a significant impact on customers’ buying decisions. Other factors such as political uncertainty in oil producing
countries, interruptions in oil production due to disasters, whether natural or man-made, or other economic factors
could significantly impact oil prices which could negatively impact demand for the Company’s products. However,
the Company believes the approval of the FAST Act federal highway bill in December 2015 has a greater potential
to impact the buying decisions of the Company’s customers than does the fluctuation of oil prices in 2016.
Contrary to the impact of oil prices on many of the Company’s Infrastructure Group products as discussed above,
the products manufactured by the Energy Group, which are used in drilling for oil and natural gas, in heaters for
refineries and oil sands, and in double fluid pump trailers for fracking and oil and gas extraction, would benefit from
higher oil and natural gas prices, to the extent that such higher prices lead to increased development in the oil and
natural gas production industries. The Company believes further development of domestic oil and natural gas
production capabilities is needed and would positively impact the domestic economy and the Company’s business.
Steel is a major component in the Company’s equipment. Steel prices declined significantly during the majority of
2015 due in large part to the decrease in primary steel making materials. Pricing declines appear to have levelled
off in late 2015, and the Company anticipates seasonal price increases during the first six months of 2016. The
Company continues to utilize forward-looking contracts coupled with advanced steel purchases to minimize the
impact of fluctuations in steel prices. The Company will continue to review the trends in steel prices entering into
the second half of 2016 and establish future contract pricing accordingly.
In addition to the factors stated above, many of the Company’s markets are highly competitive, and its products
compete worldwide with a number of other manufacturers and dealers that produce and sell similar products. From
2010 through mid-2012, a weak U.S. dollar, combined with improving economic conditions in certain foreign
economies, had a positive impact on the Company’s international sales. In 2014 and 2015, the U.S. dollar
strengthened against many foreign currencies which had a negative effect on pricing in certain foreign markets the
Company serves. The Company expects the U.S. dollar to remain strong in the near term relative to most foreign
currencies. Increasing domestic interest rates or weakening economic conditions abroad could cause the U.S.
dollar to continue to strengthen, which could negatively impact the Company’s international sales.
45
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
In the United States and internationally, the Company’s equipment is marketed directly to customers as well as
through dealers. During 2015, approximately 75% to 80% of equipment sold by the Company was sold directly to
the end user. The Company expects this ratio to remain relatively consistent through 2016.
The Company is operated on a decentralized basis with a complete management team for each operating
subsidiary. Finance, insurance, legal, shareholder relations, corporate accounting and other corporate matters are
primarily handled at the corporate level (i.e., Astec Industries, Inc., the parent company). The engineering, design,
sales, manufacturing and basic accounting functions are handled at each individual subsidiary. Standard
accounting procedures are prescribed and followed in all reporting.
The non-union employees of each subsidiary have the opportunity to earn profit-sharing incentives in the aggregate
of up to 10% of each subsidiary’s after-tax profit if the subsidiary meets established goals. For 2015, these goals
are based on the subsidiary’s return on capital employed, cash flow on capital employed and safety. The profit-
sharing incentives for subsidiary presidents and corporate officers are normally paid from a separate formula-driven
pool based on the same key performance indicators used in the employee incentive plan. The profit-sharing key
performance indicators for 2016 and thereafter for the non-union employees of each subsidiary, as well as
subsidiary presidents and corporate officers, will be based on return on capital employed, EBITDA margin and
safety.
Results of Operations: 2015 vs. 2014
Net Sales
Net sales increased $7,562 or 0.8% to $983,157 in 2015 from $975,595 in 2014. Sales are generated primarily
from new equipment purchases made by customers for use in construction of privately funded infrastructure, public
sector spending on infrastructure and sales of equipment for the aggregate, mining, quarrying and recycling
markets and for oil and gas and geothermal industries.
Domestic sales for 2015 were $722,287 or 73.5% of net sales compared to $654,231 or 67.1% of net sales for
2014, an increase of $68,056 or 10.4%. The overall increase in domestic sales for 2015 compared to 2014 reflects
the strengthening economic conditions for the Company’s products in the domestic market.
International sales for 2015 were $260,870 or 26.5% of net sales compared to $321,364 or 32.9% of net sales for
2014, a decrease of $60,494 or 18.8%. The Company experienced a challenging market for its products
internationally in 2015 compared to 2014 caused by competitive pressures due to the strengthening of the U.S.
dollar as we compete with local manufacturers that do not price their products based on the U.S. dollar, the decline
in oil prices and the slowdown in the global mining industry. Sales reported by the Company would have been
$17,536 higher had 2015 foreign exchange rates been the same as 2014 rates. The Company continues its efforts
to grow its international business by increasing its presence in the markets it serves.
Parts sales as a percentage of net sales increased 90 basis points to 27.0% in 2015 from 26.1% in 2014. In U.S.
dollars, parts sales increased 4.1% to $265,092 in 2015 from $254,747 in 2014.
Gross Profit
Gross profit as a percentage of sales remained relatively flat at 22.3% in 2015 as compared to 22.1% in 2014. In
U.S. dollars, gross profit increased 1.6% to $218,843 in 2015 from $215,316 in 2014.
Selling, General and Administrative Expense
Selling, general and administrative expense for 2015 was $145,180 or 14.8% of net sales compared to $141,490 or
14.5% of net sales for 2014, an increase of $3,690 or 2.6%. The increase in selling, general and administrative
expense over 2014 was due to an increase in payroll and related expense of $2,148, an increase of $2,873 in
repairs and maintenance, primarily for repairs on Company airplanes, and an increase in computer expense of
$2,087, offset by a reduction in ConExpo expense of $3,162.
Research and Development
Research and development expenses increased $1,547 or 7.0% to $23,676 in 2015 from $22,129 in 2014. During
2015, the Company continued its focus on research and development spending for new products as well as
improvements to existing product lines and adaptation of those products to other markets.
46
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
Interest Expense
Interest expense in 2015 increased $891 or 123.8%, to $1,611 from $720 in 2014. The increase in interest
expense was primarily due to the utilization of credit facilities in Brazil to finance equipment purchases and
operations of the new manufacturing facility.
Interest Income
Interest income decreased $880 or 61.9% to $542 in 2015 from $1,422 in 2014. The decrease was due to the
Company agreeing to defer interest payments on a customer’s purchase of the first wood pellet processing plant
produced by the Company until amortization of the financing begins. Interest income received from pellet plant
financing was $622 in 2014.
Other Income (Expense), Net
Other income (expense), net was $3,055 in 2015 compared to $1,207 in 2014, an increase of $1,848 or 153.1%
due to $1,204 of income from key-man life insurance policies in 2015 resulting from the death of the Company’s
Chairman (and former CEO).
Income Tax
Income tax expense for 2015 was $20,007, compared to $19,400 for 2014. The effective tax rates for 2015 and
2014 were 38.5% and 36.2%, respectively. The effective tax rate increased in 2015 over the 2014 effective tax rate
due primarily to the tax effect of weakening foreign currencies and reductions in domestic tax credits for research
and development. The tax benefit of the weakening foreign currency was recognized in other comprehensive
income and not in income tax expense.
Net Income Attributable To Controlling Interest
The Company had net income attributable to controlling interest of $32,797 in 2015 compared to $34,458 in 2014,
a decrease of $1,661, or 4.8%. Earnings per diluted share decreased $0.07 to $1.42 in 2015 from $1.49 in 2014.
Weighted average diluted shares outstanding for the years ended December 31, 2015 and 2014 were 23,120 and
23,105, respectively. The increase in shares outstanding is primarily due to the granting of restricted stock units.
Backlog
The backlog of orders at December 31, 2015 was $313,291 compared to $332,051 at December 31, 2014, a
decrease of $18,760, or 5.6%. The decrease in the backlog of orders was due to a decrease in international
backlog of $55,595 or 50.7% offset by an increase in domestic backlog of $36,835 or 16.6%. The Infrastructure
Group backlog increased $56,640 or 38.5% from 2014. The Infrastructure Group backlog includes $60,249 in 2015
and $59,275 in 2014 for a three-line pellet plant order for one customer with an expected sale date in 2017. An
additional pellet plant order for $29,273 for a second pellet plant customer is in the 2015 backlog with an estimated
sale date in the first half of 2016. The Infrastructure Group experienced an increase in order activity for asphalt
equipment in the latter part of 2015 which the Company believes to be due to the passage of the federal highway
funding bill, the FAST Act, on December 4, 2015. The increased backlog for the Infrastructure Group was offset by
a decrease in backlog for the Aggregate and Mining Group of $15,305 and a decrease in the Energy Group
backlog from 2014 of $60,095. Both of these group’s continue to be negatively impacted by competitive pricing
issues in many foreign countries due to the strength of the U.S. dollar compared to foreign currencies, and reduced
demand for equipment in mining and oil and gas industries. The Company is unable to determine whether the
decrease in backlogs was experienced by the industry as a whole.
Net Sales by Segment
Infrastructure Group
Aggregate and Mining Group
Energy Group
$
2015
428,737 $
370,813
183,607
2014
386,356 $
384,883
204,356
$ Change % Change
11.0%
(3.7%)
(10.2%)
42,381
(14,070)
(20,749)
Infrastructure Group: Sales in this group increased to $428,737 in 2015 compared to $386,356 in 2014, an
increase of $42,381 or 11.0%. Domestic sales for the Infrastructure Group increased 24.2% in 2015 compared to
2014 due to a release of some of the pent-up demand from the lack of a long-term federal highway bill for most of
2015. International sales for the Infrastructure Group decreased 25.7% in 2015 compared to 2014. The decrease
in international sales was due primarily to the strengthening of the U.S. dollar compared to the currencies in many
of the countries in which the Company operates. Sales reported by the Company’s foreign subsidiaries in this
group, would have been $4,872 higher had 2015 foreign exchange rates been the same as 2014 rates. The
47
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
decrease in international sales for the Infrastructure Group occurred mainly in Russia, Australia and South
America, offset by an increase in sales in the Middle East, Canada and other European countries. Parts sales for
the Infrastructure Group increased 16.7% in 2015 compared to 2014. The Company believes the increase in parts
sales from 2014 to 2015 was due in part to customers’ decisions to repair existing equipment instead of purchasing
new equipment in response to the lack of a long-term federal highway bill for the majority of 2015. The Company
also believes a portion of the increase in parts sales was attributed to sales of replacement parts for our
competitors’ equipment.
Aggregate and Mining Group: Sales in this group were $370,813 in 2015 compared to $384,883 in 2014, a
decrease of $14,070 or 3.7%. Domestic sales for the Aggregate and Mining Group increased 7.4% in 2015
compared to 2014 primarily due to improved demand related to infrastructure projects. International sales for the
Aggregate and Mining Group decreased 17.6% in 2015 compared to 2014. The decrease in international sales is
due to the strength of the U.S. dollar compared to the currencies in many of the countries in which the Company
operates and the continuing slowdown in the mining industry. The decrease in international sales for the Aggregate
and Mining Group occurred primarily in Canada, China, Brazil, South America, Central America, Russia and other
Asian countries. Sales reported by the Company’s foreign subsidiaries in this group, would have been $12,664
higher had 2015 foreign exchange rates been the same as 2014 rates. Parts sales for the Aggregate and Mining
Group decreased 1.1% in 2015 compared to 2014.
Energy Group: Sales in this group were $183,607 in 2015 compared to $204,356 in 2014, a decrease of $20,749
or 10.2%. Domestic sales for the Energy Group decreased 10.7% in 2015 compared to 2014 primarily due to a
decline in product demand resulting from the decline in oil prices. International sales for the Energy Group
decreased 8.5% in 2015 compared to 2014. The decrease in international sales was due primarily to the
strengthening of the U.S. dollar in 2015 and a severe reduction in oil production and exploration brought on by the
near collapse of the price of oil. The decrease in international sales occurred in South America, Canada and Africa,
offset by increased sales in Australia and Russia. Parts sales for the Energy Group decreased 12.7% in 2015
compared to 2014.
Segment Profit (Loss)
Infrastructure Group
Aggregate and Mining Group
Energy Group
Corporate
2015
2014
$ Change
$
$
33,890
30,690
3,609
(36,623)
29,477 $
32,900
10,316
(35,270)
4,413
(2,210)
(6,707)
(1,353)
% Change
15.0%
(6.7%)
(65.0%)
(3.8%)
Infrastructure Group: Profit for this group was $33,890 for 2015 compared to $29,477 for 2014, an increase of
$4,413 or 15.0%. This group’s profits were impacted by an increase in gross profit of $12,532 on a $42,381
increase in sales offset by a $2,045 increase in computer related expense and a $3,117 increase in payroll and
related expenses.
Aggregate and Mining Group: Profit for this group was $30,690 in 2015 compared to $32,900 in 2014, a decrease
of $2,210 or 6.7%. This group’s profits were negatively impacted by a decrease in gross profit of $2,477 on a
reduction in sales of $14,070 in 2015 compared to 2014.
Energy Group: Profit for this group was $3,609 in 2015 compared to profit of $10,316 in 2014, a decrease of
$6,707 or 65.0%. This group’s profits were negatively impacted by a reduction of $7,226 in gross margins resulting
from a $20,749 reduction in sales.
Corporate: Net corporate expenses were $36,623 in 2015 as compared to $35,270 in 2014, an increase of $1,353,
due to increases in U.S. federal income taxes and airplane repairs and maintenance costs offset by an increase in
other income from key-man life insurance policies resulting from the death of the Company’s Chairman (and former
CEO).
Results of Operations: 2014 vs. 2013
Net Sales
Net sales increased $42,597 or 4.6% to $975,595 in 2014 from $932,998 in 2013. Sales are generated primarily
from new equipment purchases made by customers for use in construction for privately funded infrastructure and
public sector spending on infrastructure as well as equipment for the aggregate, mining, quarrying and recycling
48
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
markets and for the oil and gas and geothermal industries. 2014 sales include $23,781 sales of Telestack Limited,
located in Northern Ireland, which was acquired in April 2014.
Domestic sales for 2014 were $654,231 or 67.1% of net sales compared to $599,054 or 64.2% of net sales for
2013, an increase of $55,180 or 9.2%. The overall increase in domestic sales for 2014 compared to 2013 reflects
the strengthening economic conditions for the Company’s products in the domestic market.
International sales for 2014 were $321,364 or 32.9% of net sales compared to $333,944 or 35.8% of net sales for
2013, a decrease of $12,580 or 3.8%. International sales decreased due to the economic uncertainties and political
unrest in several countries in which the Company markets its products as well as a strengthening U.S. dollar
against many foreign currencies. The Company continues its efforts to grow its international business by increasing
its presence in the markets it serves.
Parts sales as a percentage of net sales decreased 40 basis points to 26.1% in 2014 from 26.5% in 2013. In U.S.
dollars, parts sales increased 3.2% to $254,747 in 2014 from $246,905 in 2013.
Gross Profit
Gross profit as a percentage of sales remained relatively flat at 22.1% in 2014 vs. 22.2% in 2013. In U.S. dollars,
gross profit increased 4.0% to $215,316 in 2014 from $207,119 in 2013.
Selling, General and Administrative Expense
Selling, general and administrative expenses for 2014 were $141,490 or 14.5% of net sales compared to $133,337
or 14.3% of net sales for 2013, an increase of $8,153 or 6.1%. The increase in selling, general and administrative
expense was due to an increase in expense related to the ConExpo Show of $3,451 and an increase in payroll and
related expense of $3,974 from 2013.
Research and Development
Research and development expenses increased $4,029 or 22.3% to $22,129 in 2014 from $18,100 in 2013. During
2014, the Company increased research and development spending for new products as well as improvements to
existing product lines and adaptation of those products to other markets.
Interest Expense
Interest expense in 2014 increased $297 or 70.2%, to $720 from $423 in 2013. The increase in interest expense in
2014 compared to 2013 was primarily related to utilization of credit facilities in Brazil to finance operations of a new
manufacturing facility and purchase of related equipment.
Interest Income
Interest income increased $375 or 35.7% to $1,422 in 2014 from $1,047 in 2013. The increase was primarily due to
interest received related to the Company’s financing of a customer’s purchase of the first wood pellet processing
plant produced by the Company.
Other Income (Expense), Net
Other income (expense), net was $1,207 in 2014 compared to $1,937 in 2013, a decrease of $730 or 37.7% due to
a decrease in investment income as a result of the Company using its short-term investments to fund the
acquisition of Telestack Limited in April 2014.
Income Tax
Income tax expense for 2014 was $19,400, compared to $19,028 for 2013. The effective tax rates for 2014 and
2013 were 36.2% and 32.7%, respectively. The effective tax rate increase for 2014 over the effective rate in 2013
was due to an increase in state income tax as well as an increase in valuation allowances, other permanent
differences and a decrease in research and development tax credits.
Net Income Attributable To Controlling Interest
The Company had net income attributable to controlling interest of $34,458 in 2014 compared to $39,042 in 2013,
a decrease of $4,584, or 11.7%. Earnings per diluted share decreased $0.20 to $1.49 in 2014 from $1.69 in 2013.
Weighted average diluted shares outstanding for the years ended December 31, 2014 and 2013 were 23,105 and
23,081, respectively. The increase in shares outstanding is primarily due to the granting of restricted stock units.
49
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
Backlog
The backlog of orders at December 31, 2014 was $332,051 compared to $298,193 at December 31, 2013, an
increase of $33,858, or 11.4%. The backlog for 2013 has been adjusted to reflect the addition of Telestack Limited
to the Company. The increase in the backlog of orders was due to an increase in domestic backlog of $21,731 or
10.8% and an increase in international backlog of $12,127 or 12.4%. The Infrastructure Group backlog increased
$10,070 or 7.3% from 2013. Included in the Infrastructure Group backlog is $59,275 for a three-line pellet plant
order for one customer. The backlog at December 31, 2013 included $20,800 for the first line of the order. Without
this order, the Infrastructure backlog would have decreased $28,404 or 24.4% from 2013. The decrease in backlog
is attributed to customers’ uncertainty around long-term federal highway funding. The Energy Group backlog
increased $46,972 or 97.7% from 2013 due in part to the receipt of a large order in late 2014 for an international
customer. The Aggregate and Mining Group backlog decreased $23,184 or 20.5% from 2013 due in part to a
custom order received in late 2013 for a large crushing, screening and wash plant for a domestic customer. The
Company is unable to determine whether the increase in backlogs was experienced by the industry as a whole.
Net Sales by Segment
Infrastructure Group
Aggregate and Mining Group
Energy Group
$
2014
386,356 $
384,883
204,356
2013
398,399 $
350,514
184,085
$ Change % Change
(3.0%)
9.8%
11.0%
(12,043)
34,369
20,271
Infrastructure Group: Sales in this group decreased to $386,356 in 2014 compared to $398,399 in 2013, a
decrease of $12,043 or 3.0%. Domestic sales for the Infrastructure Group decreased 1.5% in 2014 compared to
2013 primarily due to customers’ uncertainty around long-term federal highway funding. International sales for the
Infrastructure Group decreased 6.9% in 2014 compared to 2013. The decrease in international sales was due
primarily to the strengthening of the U.S. dollar in 2014 and political unrest in certain countries. The decrease in
international sales for the Infrastructure Group occurred mainly in Australia and the Post-Soviet States. Parts sales
for the Infrastructure Group increased 10.0% in 2014 compared to 2013. The Company believes the increase in
parts sales from 2013 to 2014 was due in part to customers’ decisions to repair existing equipment instead of
purchasing new equipment in response to the lack of a long-term federal highway bill. The Company also believes
a portion of the increase in parts sales was attributed to sales of replacement parts for our competitors’ equipment.
Aggregate and Mining Group: Sales in this group were $384,883 in 2014 compared to $350,514 in 2013, an
increase of $34,369 or 9.8%. Domestic sales for the Aggregate and Mining Group increased 20.0% in 2014
compared to 2013 primarily due to improving economic conditions and improved demand related to infrastructure,
particularly in the oil and gas producing regions of the country. International sales for the Aggregate and Mining
Group decreased 0.9% in 2014 compared to 2013. The decrease in international sales for the Aggregate and
Mining Group would have been 14.8% without the acquisition of Telestack Limited in April 2014. The decrease in
international sales occurred primarily in Canada, Africa and Mexico. Parts sales for the Aggregate and Mining
Group decreased 2.3% in 2014 compared to 2013.
Energy Group: Sales in this group were $204,356 in 2014 compared to $184,085 in 2013, an increase of $20,271
or 11.0%. Domestic sales for the Energy Group increased 18.0% in 2014 compared to 2013 primarily due to the
rebound of the construction, recycling and biomass energy markets as well as the improved market for energy
related processing equipment. International sales for the Energy Group decreased 6.6% in 2014 compared to
2013. The decrease in international sales was due primarily to the strengthening of the U.S. dollar in 2014 and
political unrest in certain countries. The decrease in international sales occurred in the Post-Soviet States and
Africa. Parts sales for the Energy Group increased 1.7% in 2014 due to the increase in sales to the wood grinding
market.
Segment Profit (Loss)
Infrastructure Group
Aggregate and Mining Group
Energy Group
Corporate
2014
2013
$ Change
$
$
29,477
32,900
10,316
(35,270)
32,814 $
33,031
4,005
(30,367)
(3,337)
(131)
6,311
(4,903)
% Change
(10.2%)
(0.4%)
157.6%
(16.1%)
50
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
Infrastructure Group: Profit for this group was $29,477 for 2014 compared to $32,814 for 2013, a decrease of
$3,337 or 10.2%. This group’s profits were negatively impacted by a decrease of $2,170 in gross profit as a result
of a decrease in sales of $12,043, and an increase in ConExpo-related expenses of $1,633.
Aggregate and Mining Group: Profit for this group was $32,900 in 2014 compared to $33,031 in 2013, a decrease
of $131 or 0.4%. This group’s profits were favorably impacted by an increase of $4,129 in gross profit for 2014 as a
result of the $34,369 increase in sales from 2013 offset by increased expenses including amortization expense due
to acquisition accounting of $1,785 and ConExpo expense of $1,218.
Energy Group: Profit for this group was $10,316 in 2014 compared to profit of $4,005 in 2013, an increase of
$6,311 or 157.6%. This group’s profits were favorably impacted by an increase of $9,044 or 26.7% in gross profit
during 2014 driven by an increase in sales of $20,271 from 2013 and an increase in gross margins from 18.4% in
2013 to 21.0% in 2014 offset by increases in ConExpo expense of $622 and other selling expenses of $1,792.
Corporate: Net corporate expenses were $35,270 in 2014 as compared to $30,307 in 2013, an increase of $4,903,
due to increased U.S. federal income taxes and increased payroll costs associated with the January 1, 2014
restructuring of the Company’s upper management. Additionally, other income included in this category also
declined significantly due to reduced investment income.
Liquidity and Capital Resources
The Company’s primary sources of liquidity and capital resources are its cash on hand, borrowing capacity under a
$100,000 revolving credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”) and cash flows from operations. The
Company had $25,062 (of which $15,301 was held by our foreign subsidiaries) of cash available for operating
purposes at December 31, 2015. The Company had no borrowings outstanding under its credit facility with Wells
Fargo at December 31, 2015. The Company had outstanding letters of credit of $17,684 and borrowing availability
of $82,316 under the credit facility as of December 31, 2015. During 2015, the highest amount of outstanding
borrowings at any time under the facility was $8,007. Borrowings under the agreement are subject to an interest
rate equal to the daily one-month LIBOR rate plus a 0.75% margin, resulting in a rate of 1.18% at December 31,
2015.
The Company’s South African subsidiary, Osborn Engineered Products SA (Pty) Ltd (“Osborn”), has a bank
overdraft facility of $6,123 to finance short-term working capital needs, as well as to cover performance letters of
credit, advance payment and retention guarantees. As of December 31, 2015, Osborn had $686 in retention
guarantees outstanding under the facility. The facility is guaranteed by Astec Industries, Inc. The overdraft’s 0.75%
unused facility fee is waived if 50% or more of the facility is utilized. As of December 31, 2015, Osborn had
available credit under the facility of $5,437. The interest rate is 0.25% less than the South Africa prime rate,
resulting in a rate of 9.50% as of December 31, 2015.
The Company's Brazilian subsidiary, Astec do Brasil Fabricacao de Equipamentos Ltda. ("Astec Brazil"), has
outstanding working capital loans totaling $8,281 from a Brazilian bank with interest rates ranging from 10.4% to
20.8%. The loans have maturity dates ranging from December 2016 to April 2024 and are secured by letters of
credit totaling $8,674 issued by Astec Industries, Inc. Additionally, Astec Brazil has various 5-year equipment
financing loans outstanding with other Brazilian banks in the aggregate of $1,401 as of December 31, 2015 that
have interest rates ranging from 3.5% to 16.3%. These equipment loans have maturity dates ranging from
September 2018 to April 2020. Astec Brazil's loans are included in the accompanying balance sheets as current
maturities of long-term debt of $4,528 and long-term debt of $5,154.
51
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
Cash Flows from Operating Activities
Net income
Depreciation and amortization
Provision for warranties
Deferred income tax benefits
SERP distributions
Increase in receivables
Increase in inventories
Increase in prepaid expenses
Increase (decrease) in accounts payable
Increase (decrease) in income taxes payable
Increase (decrease) in customer deposits
Decrease in accrued product warranties
Other, net
Net cash provided by operating activities
2015
2014
Increase /
Decrease
$
$
31,966
24,078
13,743
(2,569)
(2,986)
3,163
(6,499)
(3,016)
(11,409)
(4,093)
(3,697)
(14,177)
6,362
30,866
$
$
34,206
24,376
12,796
(2,544)
--
(6,924)
(41,933)
(3,989)
10,755
(1,136)
5,483
(15,563)
3,336
18,863
$
$
(2,240)
(298)
947
(25)
(2,986)
10,087
35,434
973
(22,164)
(2,957)
(9,180)
1,386
3,026
12,003
Net cash provided by operating activities increased $12,003 in 2015 compared to 2014. The primary reasons for
the increase in operating cash flows relate to cash provided by accounts receivable, inventory and prepaid
expenses offset by cash used by accounts payable, customer deposits and income taxes payable.
Cash Flows from Investing Activities
Expenditures for property and equipment
Proceeds from sale of property and equipment
Business acquisition, net of cash acquired
Sale (purchase) of investments
Net cash used by investing activities
2015
(21,202) $
10,054
178
378
(10,592) $
2014
(24,851) $
743
(34,965)
16,249
(42,824) $
$
$
Increase /
Decrease
3,649
9,311
35,143
(15,871)
32,232
Net cash used by investing activities decreased by $32,232 in 2015 compared to 2014. The change is primarily
due to the acquisition of Telestack, Ltd. in 2014, financed in part from the proceeds of selling the Company’s short-
term investments, and proceeds from the sale in 2015 of property and equipment of $10,054, primarily related to
the closing of the Company’s Astec Underground facility in Loudon, Tennessee.
Cash Flows from Financing Activities
Payment of dividends
Borrowings under bank loans
Repayments of bank loans
Other, net
Net cash provided (used) by financing activities
2015
(9,193) $
106,034
(104,567)
1,664
(6,062) $
2014
(9,167) $
113,547
(103,188)
1,248
2,440 $
$
$
Increase /
Decrease
(26)
(7,513)
(1,379)
416
(8,502)
Financing activities used cash of $6,062 in 2015 and provided cash of $2,440 in 2014 for a decrease of $8,502.
The change is primarily due to debt repayments by the Company’s Brazilian and South African subsidiaries as well
as a decrease in new borrowings in 2015.
Approved capital expenditures for 2016 total $30,104. The Company expects to finance these expenditures using
currently available cash balances, internally generated funds and available credit under the Company’s credit
facility. In the Company’s Infrastructure Group, the Astec, Inc. subsidiary plans a $7,300 expansion to its building
footprint to increase production capacity for pellet drums, asphalt equipment and its line of burners. The remaining
52
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
budgeted capital expenditures are for various purchases of machinery and equipment, automobiles, and
technology-related spending to meet the needs across all Company subsidiaries.
Financial Condition
The Company’s current assets decreased to $541,797 at December 31, 2015 from $549,991 at December 31,
2014, a decrease of $8,194. The reduction is due to decreases in accounts receivable of $6,878, inventory of
$3,059 and short-term deferred income tax assets of $14,817, offset by an increase in cash of $12,039. The
decrease in accounts receivable is due in part to the decline in sales in the Energy Group and the Aggregate and
Mining Group as compared to 2014 levels. Days outstanding in accounts receivable for both groups were relatively
flat from 2014 to 2015. Both the Energy and Aggregate and Mining groups experienced a challenging market
internationally in 2015 compared to 2014 due to the strengthening of the U.S. dollar against foreign currencies. The
Aggregate and Mining Group was also negatively impacted by the decline in the global mining industry. The
domestic market was also slow for the products produced by the Energy Group in 2015 due to the decline in oil
prices. Short-term deferred income tax assets decreased from 2014 to 2015 due to a change in presentation from
2014 to 2015 related to the Company’s adoption of the Financial Accounting Standards Board (“FASB”) Accounting
Standards Update (“ASU”) 2015-17 “Balance Sheet Classification of Deferred Taxes”. The standard requires all
companies to classify deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating
deferred taxes into current and noncurrent amounts as in prior years. The Company adopted the standard
prospectively for the period ended December 31, 2015 as allowed by the standard. Current deferred tax assets
were $14,817 at December 31, 2014.
The Company’s current liabilities decreased to $142,012 at December 31, 2015 from $161,129 at December 31,
2014, a decrease of $19,117. The decrease is primarily attributable to decreases in accounts payable of $12,602
and customer deposits of $5,004. The decrease in accounts payable is across all Groups.
Market Risk and Risk Management Policies
The Company is exposed to changes in interest rates, primarily from its revolving credit agreements. A
hypothetical 100 basis point adverse move (increase) in interest rates would not have materially affected interest
expense for the years ended December 31, 2015 and 2014, due to minimal borrowings during the periods. The
Company does not hedge variable interest.
The Company is subject to foreign exchange risk at its foreign operations. Foreign operations represent 17.1% and
19.3% of total assets at December 31, 2015 and 2014, respectively, and 10.4% and 12.4% of total revenue for the
years ended December 31, 2015 and 2014, respectively. Each period the balance sheets and related results of
operations of the Company’s foreign subsidiaries are translated from their functional foreign currency into U.S.
dollars for reporting purposes. As the U.S. dollar strengthens against those foreign currencies, the foreign
denominated net assets and operating results become less valuable in the Company’s reporting currency. When
the U.S. dollar weakens against those currencies, the foreign denominated net assets and operating results
become more valuable in the Company’s reporting currency. At each reporting date, the fluctuation in the value of
the net assets and operating results due to foreign exchange rate changes is recorded as an adjustment to other
comprehensive income in equity. The Company views its investments in foreign subsidiaries as long-term and
does not hedge the net investments in foreign subsidiaries.
From time to time the Company’s foreign subsidiaries enter into transactions not denominated in their functional
currency. In these situations, the Company evaluates the need to hedge those transactions against foreign
currency rate fluctuations. When the Company determines a need to hedge a transaction, the subsidiary enters
into a foreign currency exchange contract. The Company does not apply hedge accounting to these contracts and,
therefore, recognizes the fair value of these contracts in the consolidated balance sheets and the change in the fair
value of the contracts in current earnings.
Due to the limited exposure to foreign exchange rate risk, a 10% fluctuation in the foreign exchange rates at
December 31, 2015 or 2014 would not have a material impact on the Company’s consolidated financial
statements.
53
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
Contractual Obligations
Contractual obligations and the period in which payments are due as of December 31, 2015 are as follows:
Payments Due by Period
Contractual Obligations
Operating lease obligations
Inventory purchase obligations
Long-term debt obligations
Total
$
Total
4,442 $
4,308
9,682
$ 18,432
Less Than
1 Year
1,670
3,124
4,528
9,322
$
1 to 3
Years
1,968
1,184
3,882
7,034
3 to 5
Years
673
--
561
1,234
$
$
$
$
$
More Than
5 Years
131
--
711
842
$
The above table excludes the Company’s liability for unrecognized tax benefits, which totaled $603 at December
31, 2015, since the timing of cash settlements to the respective taxing authorities cannot be reliably predicted.
In 2015, the Company made contributions of approximately $284 to its pension plan, compared to $338 in 2014.
The Company has no planned contributions to the pension plan in 2016. The Company’s funding policy is to make
at least the minimum annual contributions required by applicable regulations.
Contingencies
Management has reviewed all claims and lawsuits and has made adequate provision for any losses that can be
reasonably estimated. Based upon currently available information and with the advice of counsel, management
believes that the ultimate outcome of its current claims and legal proceedings, individually and in the aggregate,
will not have a material adverse effect on the Company’s financial position, cash flows or results of operations.
However, claims and legal proceedings are subject to inherent uncertainties and rulings unfavorable to the
Company could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse
effect on the Company’s financial position, cash flows or results of operations.
Certain customers have financed purchases of the Company’s products through arrangements in which the
Company is contingently liable for customer debt aggregating $1,881 at December 31, 2015. These obligations
have average remaining terms of 2.0 years. The Company has recorded a liability of $133 related to these
guarantees at December 31, 2015.
The Company is contingently liable under letters of credit of approximately $19,006, primarily for performance
guarantees to customers, banks or insurance carriers.
Off-balance Sheet Arrangements
As of December 31, 2015 the Company does not have off-balance sheet arrangements as defined by Item
303(a)(4) of Regulation S-K.
Environmental Matters
During 2004, the Company received notice from the Environmental Protection Agency (“EPA”) that it may be
responsible for a portion of the costs incurred in connection with an environmental cleanup in Illinois. The
discharge of hazardous materials and associated cleanup relate to activities occurring prior to the Company’s
acquisition of Barber-Greene in 1986. The Company believes that over 300 other parties have received similar
notice. At this time, the Company cannot predict whether the EPA will seek to hold the Company liable for a portion
of the cleanup costs or the amount of any such liability. The Company has not recorded a liability with respect to
this matter because no estimate of the amount of any such liability can be made at this time.
Critical Accounting Policies and Estimates
The Company’s consolidated financial statements are prepared in accordance with accounting principles generally
accepted in the United States. Application of these principles requires the Company to make estimates and
judgments that affect the amounts as reported in the consolidated financial statements. Accounting policies that
are critical to aid in understanding and evaluating the results of operations and financial position of the Company
include the following:
54
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
Inventory Valuation: Inventories are valued at the lower of first-in first-out cost or market. The most significant
component of the Company’s inventories is steel. Open market prices, which are subject to volatility, determine the
cost of steel for the Company. During periods when open market prices decline, the Company may need to reduce
the carrying value of the inventory. In addition, certain items in inventory become obsolete over time, and the
Company reduces the carrying value of these items to their net realizable value. These reductions are determined
by the Company based on estimates, assumptions and judgments made from the information available at that
time. See Note 1, Summary of Significant Accounting Policies, for a description of the process used by the
Company to value inventories at the lower of first-in first-out cost or market. The Company does not believe it is
reasonably likely that the inventory values will materially change in the near future.
Product Warranty Reserve: The Company accrues for the estimated cost of product warranties at the time revenue
is recognized. Warranty obligations by product line or model are evaluated based on historical warranty claims
experience. For machines, the Company’s standard product warranty terms generally include post-sales support
and repairs of products at no additional charge for periods ranging from three months to two years or up to a
specified number of hours of operation. For parts from component suppliers, the Company relies on the original
manufacturer’s warranty that accompanies those parts. Generally, fabricated parts are not covered by specific
warranty terms. Although failure of fabricated parts due to material or workmanship is rare, if it occurs, the
Company’s policy is to replace fabricated parts at no additional charge.
The Company engages in extensive product quality programs and processes, including actively monitoring and
evaluating the quality of component suppliers. Estimated warranty obligations are based upon warranty terms,
product failure rates, repair costs and current period machine shipments. If actual product failure rates, repair
costs, service delivery costs or post-sales support costs differ from estimates, revisions to the estimated warranty
liability would be required. The Company does not believe it is reasonably likely that the warranty reserve will
materially change in the near future.
Revenue Recognition: Revenue is generally recognized on sales at the point in time when persuasive evidence of
an arrangement exists, the price is fixed or determinable, the product has been delivered or services have been
rendered and there is reasonable assurance of collection of the sales proceeds. The Company generally obtains
purchase authorizations from its customers for a specified amount of product at a specified price with specified
delivery terms. A significant portion of the Company’s equipment sales represents equipment produced in the
Company’s plants under short-term contracts for a specific customer project or equipment designed to meet a
customer’s specific requirements. Most of the equipment sold by the Company is based on standard
configurations, some of which are modified to meet customer needs or specifications. The Company provides
customers with technical design and performance specifications and performs pre-shipment testing to ensure the
equipment performs according to design specifications, regardless of whether the Company provides installation
services in addition to selling the equipment.
Certain contracts include terms and conditions through which the Company recognizes revenues upon completion
of equipment production, which is subsequently stored at the Company’s plant at the customer’s request. Revenue
is recorded on such contracts upon the customer’s assumption of title and risk of ownership and when collectability
is reasonably assured. In addition, there must be a fixed schedule of delivery of the goods consistent with the
customer’s business practices, the Company must not have retained any specific performance obligations such
that the earnings process is not complete and the goods must have been segregated from the Company’s
inventory prior to revenue recognition.
The Company has certain sales accounted for as multiple-element arrangements, whereby revenue attributable to
the sale of a product is recognized when the product is shipped, and the revenue attributable to services provided
with respect to the product (such as installation services) is recognized when the service is performed.
Consideration is allocated to deliverables using the relative selling price method using vendor specific objective
evidence, if it exists. Otherwise, the Company uses third-party evidence of selling price or the Company’s best
estimate of the selling price for the deliverables. The Company evaluates sales with multiple deliverable elements
(such as an agreement to deliver equipment and related installation services) to determine whether revenue
related to individual elements should be recognized separately, or as a combined unit. In addition to the previously
mentioned general revenue recognition criteria, the Company only recognizes revenue on individual delivered
elements when there is objective and reliable evidence that the delivered element has a determinable value to the
customer on a standalone basis and there is no right of return.
Goodwill and Other Intangible Assets: Intangible assets are classified into two categories: (1) intangible assets with
definite lives subject to amortization, and (2) goodwill. Intangible assets with definite lives are tested for impairment
if conditions exist that indicate the carrying value may not be recoverable. Risk factors that may be considered
include an economic downturn in the general economy, a geographic market or the commercial and residential
55
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
construction industries, a change in the assessment of future operations as well as the cyclical nature of our
industry and the customization of the equipment we sell, each of which may cause adverse fluctuations in
operating results. Other risk factors considered would be an increase in the price or a decrease in the availability of
oil that could reduce the demand for our products in addition to the significant fluctuations in the purchase price of
raw materials that could have a negative impact on the cost of production and gross margins as well as others
more fully described in the Risk Factors section of our Form 10-K. An impairment charge is recorded when the
carrying value of the definite lived intangible asset is not recoverable by the cash flows generated from the use of
the asset. Some of the inputs used in the impairment testing are highly subjective and are affected by changes in
business factors and other conditions. Changes in any of the inputs could have an effect on future tests and result
in impairment charges.
Goodwill is not amortized but is tested for impairment annually or more frequently if events or circumstances
indicate that such intangible assets or goodwill might be impaired. See Note 1, Summary of Significant Accounting
Policies, for a description of testing performed by the Company to determine if the recorded value of intangible
assets or goodwill has been impaired.
The useful lives of identifiable intangible assets are determined after considering the specific facts and
circumstances related to each intangible asset. Factors considered when determining useful lives include the
contractual term of any agreement, the history of the asset, the Company’s long-term strategy for the use of the
asset, any laws or other local regulations which could impact the useful life of the asset, and other economic
factors, including competition and specific market conditions. Intangible assets that are deemed to have definite
lives are amortized, generally on a straight-line basis, over their useful lives, ranging from 3 to 15 years.
Income Taxes: The Company accounts for income taxes under the guidance of FASB Accounting Standards
Codification Topic 740-10, “Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. A valuation allowance that represents a reserve on
deferred tax assets for which utilization is not more likely than not is recorded. Judgment is required in determining
the provision for income taxes, deferred tax assets and liabilities, and the valuation allowance recorded against net
deferred tax assets. Income tax contingency accruals are determined and recorded under the guidance of ASC
Topic 740-10. Liabilities for uncertain income tax positions are based on a two-step process. The first step is to
evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more
likely than not that the position will be sustained on audit, including resolution of related appeals or litigation
processes, if any. The second step requires an estimate and measurement of the tax benefit as the largest amount
that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to
estimate such amounts, as the Company must determine the probability of various possible outcomes. We
reevaluate these uncertain tax positions on a quarterly basis or when new information becomes available. These
reevaluations are based on factors including, but not limited to, changes in facts or circumstances, changes in tax
law, successfully settled issues under audit, expirations due to statutes, and new audit activity. Such a change in
recognition or measurement could result in the recognition of a tax benefit or an increase to accrued taxes.
Recent Accounting Pronouncements
In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", which supersedes
existing revenue guidance under U.S. GAAP. The standard's core principle is that a company will recognize
revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to
which the company expects to be entitled in exchange for those goods or services. The implementation of this new
standard will require companies to use more judgment and to make more estimates than under current guidance.
The standard, as amended, is effective for public companies for annual periods beginning after December 15,
2017. The Company plans to adopt the new standard effective January 1, 2018. The Company has not yet
determined what impact, if any, the adoption of this new standard will have on the Company's financial position or
results of operations.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of
Inventory", which changes the measurement basis for inventory from the lower of cost or market to lower of cost
and net realizable value and also eliminates the requirement for companies to consider replacement cost or net
realizable value less an approximate normal profit margin when determining the recorded value of inventory. The
standard is effective for public companies in fiscal years beginning after December 15, 2016, and the Company
expects to adopt the standard effective January 1, 2017. The Company has not yet determined what impact, if any,
the adoption of this new standard will have on the Company's financial position or results of operations.
56
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”, which
requires all companies to classify deferred tax assets and liabilities as noncurrent on the balance sheet instead of
separating deferred taxes into current and noncurrent amounts. Also, companies will no longer allocate valuation
allowances between current and noncurrent deferred tax assets because those allowances also will be classified
as noncurrent. The standard is effective for public entities for annual periods beginning on or after December 15,
2016. Early adoption is permitted for annual financial statements that have not yet been issued. The Company’s
prospective adoption of this standard for the year ended December 31, 2015 did not have a significant impact on
the Company’s financial position or results of operations.
Forward-Looking Statements
This annual report contains forward-looking statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Statements contained anywhere in this Annual Report that are not limited
to historical information are considered forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, including, without limitation, statements regarding:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
execution of the Company’s growth and operation strategy;
plans for technological innovation;
compliance with covenants in our credit facility;
liquidity and capital expenditures;
sufficiency of working capital, cash flows and available capacity under the Company’s credit facilities;
compliance with government regulations;
compliance with manufacturing and delivery timetables;
forecasting of results;
general economic trends and political uncertainty;
government funding and growth of highway construction and commercial projects;
taxes or usage fees;
interest rates;
integration of acquisitions;
industry trends;
pricing, demand and availability of steel, oil and liquid asphalt;
development of domestic oil and natural gas production;
condition of the economy;
strength of the U.S. dollar relative to foreign currencies;
the success of new product lines;
presence in the international marketplace;
suitability of our current facilities;
future payment of dividends;
competition in our business segments;
product liability and other claims;
protection of proprietary technology;
demand for products;
future fillings of backlogs;
employees;
the seasonality of our business;
tax assets and reserves for uncertain tax positions;
critical accounting policies and the impact of accounting changes;
anticipated future operations in our Brazilian operations;
our backlog;
ability to satisfy contingencies;
contributions to retirement plans and plan expenses;
reserve levels for self-insured insurance plans and product warranties;
construction of new manufacturing facilities;
supply of raw materials; and
inventory
57
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
These forward-looking statements are based largely on management’s expectations, which are subject to a
number of known and unknown risks, uncertainties and other factors discussed in this report and in other
documents filed by the Company with the Securities and Exchange Commission, which may cause actual results,
financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking
statements. All forward-looking statements included in this document are based on information available to the
Company on the date hereof, and the Company assumes no obligation to update any such forward-looking
statements to reflect future events or circumstances. You can identify these statements by forward-looking words
such as “expect”, “believe”, “anticipate”, “goal”, “plan”, “intend”, “estimate”, “may”, “will”, “should” and similar
expressions.
In addition to the risks and uncertainties identified elsewhere herein and in other documents filed by us with the
Securities and Exchange Commission, the risk factors described in this document under the caption "Risk Factors"
should be carefully considered when evaluating our business and future prospects, including without limitation risks
relating to: changes or delays in highway funding; rising interest rates; changes in oil prices; changes in steel
prices; changes in the general economy; unexpected capital expenditures and decreases in liquidity; the timing of
large contracts; production capacity; general business conditions in the industry; non-compliance with covenants in
the Company’s credit facilities; demand for the Company’s products; and those other factors listed from time to
time in the Company’s reports filed with the Securities and Exchange Commission. Certain of the risks,
uncertainties and other factors discussed above are more fully described in the section entitled “Risk Factors” in
the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
58
ASTEC INDUSTRIES, INC.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
The management of Astec Industries, Inc. (the “Company”) is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company. The Company’s internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with U.S. generally accepted
accounting principles. The Company’s internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of assets of the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies and procedures may deteriorate.
Management, under the supervision and with the participation of the Company’s principal executive officer and
principal financial officer, has evaluated the effectiveness of the Company’s internal control over financial reporting
as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO), Internal Control - Integrated Framework (2013).
Based on its assessment, management concluded that, as of December 31, 2015, the Company’s internal control
over financial reporting was effective.
KPMG LLP, the Company’s independent registered public accounting firm, has issued an attestation report on the
Company’s internal control over financial reporting as of December 31, 2015.
59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Astec Industries, Inc.:
We have audited Astec Industries, Inc.’s internal control over financial reporting as of December 31, 2015, based
on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Astec Industries, Inc.’s management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audit also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, Astec Industries, Inc. maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013)
issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheet of Astec Industries, Inc. and subsidiaries as of December 31,
2015, and the related consolidated statements of income, comprehensive income, equity and cash flows for the
year ended December 31, 2015, and our report dated February 29, 2016 expressed an unqualified opinion on
those consolidated financial statements.
Knoxville, Tennessee
February 29, 2016
60
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of
Astec Industries, Inc.
We have audited the accompanying consolidated balance sheets of Astec Industries, Inc. as of December 31,
2014, and the related consolidated statements of income, comprehensive income, equity and cash flows for each
of the two years in the period ended December 31, 2014. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Astec Industries, Inc. at December 31, 2014, and the consolidated results of its operations and
its cash flows for each of the two years in the period ended December 31, 2014, in conformity with U.S. generally
accepted accounting principles.
Chattanooga, Tennessee
March 2, 2015, except for paragraph 58 in Note 1,
as to which the date is February 29, 2016
61
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Astec Industries, Inc.:
We have audited the accompanying consolidated balance sheet of Astec Industries, Inc. and subsidiaries as of
December 31, 2015, and the related consolidated statements of income, comprehensive income, equity and cash
flows for the year ended December 31, 2015. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these consolidated financial statements
based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of Astec Industries, Inc. and subsidiaries as of December 31, 2015, and the results of their
operations and their cash flows for the year ended December 31, 2015, in conformity with U.S. generally accepted
accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), Astec Industries, Inc.’s internal control over financial reporting as of December 31, 2015, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), and our report dated February 29, 2016 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Knoxville, Tennessee
February 29, 2016
62
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
Assets
Current assets:
Cash and cash equivalents
Investments
Trade receivables, net
Notes and other receivables
Inventories
Prepaid expenses
Deferred income tax assets
Other current assets
Total current assets
Property and equipment, net
Investments
Goodwill
Intangible assets, net
Deferred income tax assets
Other long-term assets
Total assets
Liabilities and Equity
Current liabilities:
Short-term debt
Current maturities of long-term debt
Accounts payable
Customer deposits
Accrued product warranty
Accrued payroll and related liabilities
Accrued loss reserves
Other accrued liabilities
Total current liabilities
Long-term debt
Deferred income tax liabilities
Other long-term liabilities
Total liabilities
Equity:
Preferred stock - authorized 4,000 shares of $1.00 par value; none issued
Common stock – authorized 40,000 shares of $0.20 par value; issued
and outstanding – 22,988 in 2015 and 22,930 in 2014
Additional paid-in capital
Accumulated other comprehensive loss
Company shares held by SERP, at cost
Retained earnings
Shareholders’ equity
Non-controlling interest
Total equity
Total liabilities and equity
See Notes to Consolidated Financial Statements
63
December 31
2015
2014
$
$
$
$
25,062
1,539
98,865
3,132
384,776
26,521
--
1,902
541,797
170,206
11,540
30,835
13,577
6,195
3,203
777,353
--
4,528
48,385
40,082
9,100
17,375
2,838
19,704
142,012
5,154
2,348
17,981
167,495
--
4,598
137,883
(23,564)
(1,778)
490,933
608,072
1,786
609,858
777,353
$
$
$
$
13,023
1,916
105,743
1,558
387,835
17,933
14,817
7,166
549,991
187,610
11,393
31,995
17,272
531
3,473
802,265
2,814
1,027
60,987
45,086
10,032
17,265
3,050
20,868
161,129
7,061
16,836
21,087
206,113
--
4,586
135,887
(12,915)
(2,929)
467,337
591,966
4,186
596,152
802,265
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Income from operations
Other income:
Interest expense
Interest income
Other income (expense), net
Income before income taxes
Income taxes
Net income
Net income (loss) attributable to non-controlling
interest
Net income attributable to controlling interest
Earnings per Common Share:
Net income attributable to controlling interest:
Basic
Diluted
Weighted average number of common shares
outstanding:
Basic
Diluted
See Notes to Consolidated Financial Statements
Year Ended December 31
2014
2015
2013
$
$
$
983,157
764,314
218,843
145,180
23,676
49,987
1,611
542
3,055
51,973
20,007
31,966
$
975,595 $
760,279
215,316
141,490
22,129
51,697
720
1,422
1,207
53,606
19,400
34,206
(831)
32,797
$
(252)
34,458 $
$
1.43
1.42
1.51 $
1.49
22,934
23,120
22,819
23,105
932,998
725,879
207,119
133,337
18,101
55,681
423
1,047
1,937
58,242
19,028
39,214
172
39,042
1.72
1.69
22,749
23,081
64
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net income
Other comprehensive loss:
Change in unrecognized pension and post-retirement
benefit costs
Tax (expense) benefit on change in unrecognized
pension and post-retirement benefit costs
Foreign currency translation adjustments
Tax benefit on foreign currency translation adjustments
Other comprehensive loss
Comprehensive loss attributable to non-controlling interest
Comprehensive income attributable to controlling
interest
See Notes to Consolidated Financial Statements
Year Ended December 31
2014
2015
2013
$
31,966
$
34,206 $
39,214
(178)
36
(13,848)
3,341
(10,649)
(1,603)
(1,820)
699
(7,670)
770
(8,021)
(565)
2,742
(974)
(8,821)
1,657
(5,396)
(236)
$
22,920
$
26,750
$
34,054
65
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash Flows from Operating Activities
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation
Amortization
Provision for doubtful accounts
Provision for warranties
Deferred compensation provision
Deferred income tax benefit
Gain on disposition of fixed assets
Tax expense (benefit) from stock incentive plans
Stock-based compensation
Distributions to SERP participants
Change in operating assets and liabilities:
Sale (purchase) of trading securities, net
Trade and other receivables
Inventories
Prepaid expenses
Other assets
Accounts payable
Customer deposits
Accrued product warranty
Income taxes payable
Accrued retirement benefit costs
Accrued loss reserves
Other accrued liabilities
Other
Net cash provided by operating activities
Cash Flows from Investing Activities
Business acquisition, net of cash acquired
Proceeds from sale of property and equipment
Expenditures for property and equipment
Sale (purchase) of investments
Net cash used by investing activities
See Notes to Consolidated Financial Statements
Year Ended December 31
2014
2015
2013
$
31,966
$
34,206 $
39,214
20,744
3,334
18
13,743
241
(2,559)
(529)
(345)
1,250
(2,986)
(405)
3,163
(6,499)
(3,016)
(968)
(11,409)
(3,697)
(14,177)
(4,093)
24
103
3,576
3,387
30,866
178
10,054
(21,202)
378
(10,592)
21,343
3,033
1,011
12,796
74
(2,544)
(306)
(586)
1,200
--
118
(6,924)
(41,933)
(3,989)
(4,763)
10,755
5,483
(15,563)
(1,136)
(201)
305
3,289
3,195
18,863
(34,965)
743
(24,851)
16,249
(42,824)
20,966
1,299
629
12,199
601
(2,220)
(163)
8
1,461
--
(1,350)
(8,849)
(36,561)
(5,433)
(3,215)
1,028
(5,436)
(10,163)
(823)
(324)
199
1,085
1,709
5,861
--
424
(27,673)
(15,000)
(42,249)
66
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)
Year Ended December 31
2014
2015
2013
Cash Flows from Financing Activities
Payment of dividends
Borrowings under bank loans
Repayment of bank loans
Proceeds from issuance of common stock
Tax (expense) benefit from stock option exercise
Sale (purchase) of shares of subsidiaries, net
Sale (purchase) of company shares by SERP, net
Withholding tax paid upon vesting of restricted
stock units
Proceeds from cash surrender value of life insurance
Net cash provided (used) by financing activities
Effect of exchange rates on cash
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental Cash Flow Information
Cash paid during the year for:
Interest
Income taxes, net of refunds
See Notes to Consolidated Financial Statements
$
(9,193) $
(9,167) $
106,034
(104,567)
72
345
(653)
2,084
(600)
416
(6,062)
(2,173)
12,039
13,023
25,062
$
113,547
(103,188)
282
586
1,428
(95)
(953)
--
2,440
(1,020)
(22,541)
35,564
13,023
$
(6,856)
--
--
112
(8)
735
213
(782)
--
(6,586)
(2,391)
(45,365)
80,929
35,564
1,651
29,573
$
$
476
23,027
$
$
229
20,331
$
$
$
67
CONSOLIDATED STATEMENTS OF EQUITY
For the Years Ended December 31, 2015, 2014 and 2013 (in thousands)
Common Stock
Shares
Amount
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Company
Shares Held
by SERP
Retained
Earnings
Non-
Controlling
Interest
Total
Equity
Balance December 31, 2012
22,799 $ 4,560 $ 133,809 $ 502 $ (2,855) $ 409,874 $ 1,644 $ 547,534
Net income
Quarterly dividends ($0.10 per share for 3
quarters)
39,042
172
39,214
6
(6,862)
(6,856)
Other comprehensive loss
(5,396)
Change in ownership percentage of subsidiary
Capital contributed by minority shareholder
Stock-based compensation
6
1
1,460
Exercise of stock options and RSU vesting,
including tax benefit
54
11
93
Withholding tax on vested RSUs
Sale of Company stock held by SERP, net
(782)
144
69
236
(5,160)
(802)
(802)
2,385
2,385
1,461
104
(782)
213
Balance December 31, 2013
22,859
4,572
134,730
(4,894)
(2,786)
442,054
3,635
577,311
34,458
(252)
34,206
8
(9,175)
(9,167)
(8,021)
Net income
Quarterly dividends ($0.10 per share for 4
quarters)
Other comprehensive loss
Change in ownership percentage of subsidiary
Capital contributed by minority shareholder
565
(7,456)
(1,345)
(1,345)
1,583
1,583
1,200
868
(953)
(95)
Stock-based compensation
5
1
1,199
Exercise of stock options and RSU vesting,
including tax benefit
66
13
Withholding tax on vested RSUs
Sale of Company stock held by SERP, net
855
(953)
48
(143)
Balance December 31, 2014
22,930
4,586
135,887
(12,915)
(2,929)
467,337
4,186
596,152
Net income
Quarterly dividends ($0.10 per share for 4
quarters)
32,797
(831)
31,966
8
(9,201)
(9,193)
Other comprehensive loss
(10,649)
Change in ownership percentage of subsidiary
Stock-based compensation
4
1
1,249
Exercise of stock options and RSU vesting,
including tax benefit
54
11
Withholding tax on vested RSUs
Sale of Company stock held by SERP, net
Other
406
(600)
933
1,151
(772)
(11,421)
(663)
(663)
1,250
417
(600)
2,084
(134)
(134)
Balance December 31, 2015
22,988 $ 4,598 $ 137,883 $ (23,564) $ (1,778) $ 490,933 $ 1,786 $ 609,858
See Notes to Consolidated Financial Statements
68
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
1. Summary of Significant Accounting Policies
Basis of Presentation - The consolidated financial statements include the accounts of Astec Industries, Inc.
and its domestic and foreign subsidiaries (the “Company”). The Company’s significant wholly-owned and
consolidated subsidiaries at December 31, 2015 are as follows:
Astec Australia Pty Ltd
Astec, Inc.
Astec Mobile Machinery GmbH
Breaker Technology, Inc.
Carlson Paving Products, Inc.
GEFCO, Inc.
Johnson Crushers International, Inc.
Osborn Engineered Products SA (Pty) Ltd
(96% owned)
Telestack Limited
Astec do Brasil Fabricacao de Equipamentos Ltda. (78% owned)
Astec Insurance Company
Astec Mobile Screens, Inc.
Breaker Technology Ltd.
CEI Enterprises, Inc.
Heatec, Inc.
Kolberg-Pioneer, Inc.
Peterson Pacific Corp.
Roadtec, Inc.
Telsmith, Inc.
All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates - The preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that affect the amounts
reported and disclosed in the financial statements and accompanying notes. Actual results could differ from those
estimates.
Foreign Currency Translation - Subsidiaries located in Australia, Brazil, Canada, Germany, Northern Ireland, and
South Africa operate primarily using local functional currencies. Accordingly, assets and liabilities of these
subsidiaries are translated using exchange rates in effect at the end of the period, and revenues and costs are
translated using average exchange rates for the period. The resulting adjustments are presented as a separate
component of accumulated other comprehensive income. Foreign currency transaction gains and losses, net are
included in cost of sales and amounted to losses of $1,377, $1,971 and $522 in 2015, 2014 and 2013, respectively.
Fair Value of Financial Instruments - For cash and cash equivalents, trade receivables, other receivables,
revolving debt and accounts payable, the carrying amount approximates the fair value because of the short-term
nature of those instruments. Trading equity investments are valued at their estimated fair value based on their
quoted market prices and debt securities are valued based upon a mix of observable market prices and model
driven prices derived from a matrix of observable market prices for assets with similar characteristics obtained from
a nationally recognized third party pricing service.
Financial assets and liabilities are categorized as of the end of each reporting period based upon the level of
judgment associated with the inputs used to measure their fair value. The inputs used to measure the fair value are
identified in the following hierarchy:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 - Unadjusted quoted prices in active markets for similar assets or liabilities; or
unadjusted quoted prices for identical or similar assets or liabilities in markets
that are not active; or inputs other than quoted prices that are observable for
the asset or liability.
Level 3 - Inputs reflect management’s best estimate of what market participants would
use in pricing the asset or liability at the measurement date. Consideration is
given to the risk inherent in the valuation technique and the risk inherent in
the inputs to the model.
All financial assets and liabilities held by the Company at December 31, 2015 and 2014 are classified as Level 1 or
Level 2, as summarized in Note 3, Fair Value Measurements.
Cash and Cash Equivalents - All highly liquid investments with an original maturity of three months or less when
purchased are considered to be cash and cash equivalents.
69
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Investments - Investments consist primarily of investment-grade marketable securities. Trading securities are
carried at fair value, with unrealized holding gains and losses included in net income. Realized gains and losses
are accounted for on the specific identification method. Purchases and sales are recorded on a trade date basis.
Management determines the appropriate classification of its investments at the time of acquisition and reevaluates
such determination at each balance sheet date.
Concentration of Credit Risk - The Company sells products to a wide variety of customers. Accounts receivable
are carried at their outstanding principal amounts, less an allowance for doubtful accounts. The Company extends
credit to its customers based on an evaluation of the customers’ financial condition generally without requiring
collateral, although the Company normally requires advance payments or letters of credit on large equipment
orders. Credit risk is driven by conditions within the economy and the industry and is principally dependent on each
customer’s financial condition. To minimize credit risk, the Company monitors credit levels and financial conditions
of customers on a continuing basis. After considering historical trends for uncollectible accounts, current economic
conditions and specific customer recent payment history and financial stability, the Company records an allowance
for doubtful accounts at a level which management believes is sufficient to cover probable credit losses. Amounts
are deemed past due when they exceed the payment terms agreed to by the customer in the sales contract. Past
due amounts are charged off when reasonable collection efforts have been exhausted and the amounts are
deemed uncollectible by management. As of December 31, 2015, concentrations of credit risk with respect to
receivables are limited due to the wide variety of customers.
Allowance for Doubtful Accounts - The following table represents a rollforward of the allowance for doubtful
accounts for the years ended December 31, 2015, 2014 and 2013:
Allowance balance, beginning of year
Provision
Write offs
Other
Allowance balance, end of year
Year Ended December 31
2014
2015
2013
$
$
2,248
18
(357)
(72)
1,837
$
$
1,708
1,011
(465)
(6)
2,248
$
$
2,143
629
(1,042)
(22)
1,708
Inventories - The Company’s inventory is comprised of raw materials, work-in-process, finished goods and used
equipment.
Raw material inventory is comprised of purchased steel and other purchased items for use in the manufacturing
process or held for sale for the after-market parts business. The category also includes the manufacturing cost of
completed equipment sub-assemblies produced for either integration into equipment manufactured at a later date
or for sale in the Company’s after-market parts business.
Work-in-process inventory consists of the value of materials, labor and overhead incurred to date in the
manufacturing of incomplete equipment or incomplete equipment sub-assemblies being produced.
Finished goods inventory consists of completed equipment manufactured for sale to customers.
Used equipment inventory consists of equipment accepted in trade or purchased on the open market. The
category also includes equipment rented to prospective customers on a short-term or month-to-month basis. Used
equipment is valued at the lower of acquired or trade-in cost or market determined on each separate unit. Each
unit of rental equipment is valued at its original manufacturing cost and is reduced by an appropriate reserve each
month during the period of time the equipment is rented.
Inventories are valued at the lower of cost (first-in, first-out) or market, which requires the Company to make
specific estimates, assumptions and judgments in determining the amount, if any, of reductions in the valuation of
inventories to their net realizable values. The net realizable values of the Company’s products are impacted by a
number of factors, including changes in the price of steel, competitive sales pricing, quantities of inventories on
hand, the age of the individual inventory items, market acceptance of the Company’s products, the Company’s
normal gross margins, actions by our competitors, the condition of our used and rental inventory and general
economic factors. Once an inventory item’s value has been deemed to be less than cost, a net realizable value
allowance is calculated and a new “cost basis” for that item is effectively established. This new cost is retained for
that item until such time as the item is disposed of or the Company determines that an additional write-down is
necessary. Additional write-downs may be required in the future based upon changes in assumptions due to
general economic downturns in the markets in which the Company operates, changes in competitor pricing, new
70
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
product design or other technological advances introduced by the Company or its competitors and other factors
unique to individual inventory items.
The most significant component of the Company’s inventory is steel. A significant decline in the market price of
steel could result in a decline in the market value of the equipment or parts we sell. During periods of significant
declining steel prices, the Company reviews the valuation of its inventories to determine if reductions are needed in
the recorded value of inventory on hand to its net realizable value.
The Company reviews the individual items included in its finished goods, used equipment and rental equipment
inventory on a model-by-model or unit-by-unit basis to determine if any item’s net realizable value is below its
carrying value. This analysis is expanded to include items in work-in-process and raw material inventory if factors
indicate those items may also be impacted. In performing this review, judgments are made and, in addition to the
factors discussed above, additional consideration is given to the age of the specific items of used or rental
inventory, prior sales offers or lack thereof, the physical condition of the specific items and general market
conditions for the specific items. Additionally, an analysis of raw material inventory is performed to calculate
reserves needed for obsolete inventory based upon quantities of items on hand, the age of those items and their
recent and expected future usage or sale.
When the Company determines that the value of inventory has become impaired through damage, deterioration,
obsolescence, changes in price levels, excessive levels of inventory or other causes, the Company reduces the
carrying value to estimated market value based on estimates, assumptions and judgments made from the
information available at that time. Abnormal amounts of idle facility expense, freight, handling cost and wasted
materials are recognized as current period charges.
Property and Equipment - Property and equipment is stated at cost. Depreciation is calculated for financial
reporting purposes using the straight-line method based on the estimated useful lives of the assets as follows:
airplanes (20 years), buildings (40 years) and equipment (3 to 10 years). Both accelerated and straight-line
methods are used for tax compliance purposes. Routine repair and maintenance costs and planned major
maintenance are expensed when incurred.
Goodwill and Other Intangible Assets - The Company classifies intangible assets as either intangible assets
with definite lives subject to amortization or goodwill.
The Company tests intangible assets with definite lives for impairment if conditions exist that indicate the carrying
value may not be recoverable. Such conditions may include an economic downturn in a geographic market or a
change in the assessment of future operations. An impairment charge is recorded when the carrying value of the
definite lived intangible asset is not recoverable by the future undiscounted cash flows expected to be generated
from the use of the asset.
The Company determines the useful lives of identifiable intangible assets after considering the specific facts and
circumstances related to each intangible asset. Factors considered when determining useful lives include the
contractual terms of agreements, the history of the asset, the Company’s long-term strategy for the use of the
asset, any laws or other local regulations which could impact the useful life of the asset, and other economic
factors, including competition and specific market conditions. Intangible assets that are deemed to have definite
lives are amortized over their useful lives, ranging from 3 to 15 years.
Goodwill is not amortized. The Company tests goodwill for impairment annually or more frequently if events or
circumstances indicate that goodwill might be impaired. The tests utilize a two-step method at the reporting unit
level. The Company’s reporting units are typically defined as either subsidiaries or a combination of subsidiaries.
The first step of the goodwill impairment test compares book value of a reporting unit, including goodwill, with the
unit’s fair value. In this first step, the Company estimates the fair values of each of its reporting units that have
goodwill using the income approach.
The income approach uses a reporting unit’s projection of estimated future operating results and cash flows which
are then discounted using a weighted average cost of capital determined based on current market conditions for
the individual reporting unit. The projection uses management’s best estimates of cash flows over the projection
period based on estimates of annual and terminal growth rates in sales and costs, changes in operating margins,
selling, general and administrative expenses, working capital requirements and capital expenditures.
The fair value of reporting units that do not have goodwill are estimated using either the income or market
approaches, depending on which approach is to be the most appropriate for each reporting unit. The fair value of
the reporting units that serve operating units in supporting roles, such as the captive insurance company and the
corporate reporting unit are estimated using the cost approach. The sum of the fair values of all reporting units is
71
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
compared to the fair value of the consolidated Company, calculated using the market approach, which is inferred
from the market capitalization of the Company at the date of the valuation, to confirm that the Company’s
estimation of the fair value of its reporting units is reasonable.
If the book value of a reporting unit exceeds its fair value, an indication of possible goodwill impairment, the second
step of the impairment test must be performed to determine the amount, if any, of goodwill impairment. In this
second step, the total implied fair value of the reporting unit’s goodwill is estimated by allocating the fair value of
the reporting unit to all its assets, including any unrecognized intangible assets and liabilities other than goodwill.
The difference between the total fair value of the reporting unit and the fair value of its assets and liabilities other
than goodwill is the implied fair value of its goodwill. The amount of any impairment loss is equal to the excess, if
any, of the book value of the goodwill over the implied fair value of its goodwill.
Determining the “step one” fair values of the Company’s reporting units involves the use of significant estimates
and assumptions. Due to the inherent uncertainty involved in making these estimates and assumptions, actual
results could differ materially from those estimates.
Impairment of Long-lived Assets - In the event that facts and circumstances indicate the carrying amounts of
long-lived assets may be impaired, an evaluation of recoverability is performed. If an evaluation is required, the
estimated future undiscounted cash flows associated with the asset are compared to the carrying amount for each
asset (or group of assets) to determine if a write-down is required. If this review indicates that the assets will not be
recoverable, the carrying values of the impaired assets are reduced to their estimated fair value. Fair value is
estimated using discounted cash flows, prices for similar assets or other valuation techniques.
Self-Insurance Reserves - The Company retains the risk for a portion of its workers’ compensation claims and
general liability claims by way of a captive insurance company, Astec Insurance Company (“Astec Insurance” or
“the captive”). Astec Insurance is incorporated under the laws of the state of Vermont. The objectives of Astec
Insurance are to improve control over and reduce the cost of claims; to improve focus on risk reduction with the
development of a program structure which rewards proactive loss control; and to ensure management participation
in the defense and settlement process for claims.
For general liability claims, the captive is liable for the first $1,000 per occurrence and $3,000 per year in the
aggregate. The Company carries general liability, excess liability and umbrella policies for claims in excess of
amounts covered by the captive.
For workers’ compensation claims, the captive is liable for the first $350 per occurrence and $1,000 per year in the
aggregate. The Company utilizes a large national insurance company as third party administrator for workers’
compensation claims and carries insurance coverage for claims liabilities in excess of amounts covered by the
captive.
The financial statements of the captive are consolidated into the financial statements of the Company. The short-
term and long-term reserves for claims and potential claims related to general liability and workers’ compensation
under the captive are included in accrued loss reserves or other long-term liabilities, respectively, in the
consolidated balance sheets depending on the expected timing of future payments. The undiscounted reserves are
actuarially determined to cover the ultimate cost of each claim based on the Company’s evaluation of the type and
severity of individual claims and historical information, primarily its own claims experience, along with assumptions
about future events. Changes in assumptions, as well as changes in actual experience, could cause these
estimates to change in the future. However, the Company does not believe it is reasonably likely that the reserve
level will materially change in the foreseeable future.
The Company is self-insured for health and prescription claims under its Group Health Insurance Plan at all but
one of the Company’s domestic manufacturing subsidiaries. The Company carries reinsurance coverage to limit its
exposure for individual health claims above certain limits. Third parties administer health claims and prescription
medication claims. The Company maintains a reserve for the self-insured health plan which is included in accrued
loss reserves on the Company’s consolidated balance sheets. This reserve includes both unpaid claims and an
estimate of claims incurred but not reported, based on historical claims and payment experience. Historically the
reserves have been sufficient to provide for claims payments. Changes in actual claims experience or payment
patterns could cause the reserve to change, but the Company does not believe it is reasonably likely that the
reserve level will materially change in the near future.
The remaining U.S. subsidiary is covered under a fully insured group health plan. Employees of the Company’s
foreign subsidiaries are insured under separate health plans. No reserves are necessary for these fully insured
health plans.
72
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Revenue Recognition - Revenue is generally recognized on sales at the point in time when persuasive evidence
of an arrangement exists, the price is fixed or determinable, the product has been delivered or services have been
rendered and there is a reasonable assurance of collection of the sales proceeds. The Company generally obtains
purchase authorizations from its customers for a specified amount of products at a specified price with specified
delivery terms. A significant portion of the Company’s equipment sales represents equipment produced in the
Company’s plants under short-term contracts for a specific customer project or equipment designed to meet a
customer’s specific requirements. Most of the equipment sold by the Company is based on standard
configurations, some of which are modified to meet customer needs or specifications. The Company provides
customers with technical design and performance specifications and performs pre-shipment testing to ensure the
equipment performs according to design specifications, regardless of whether the Company provides installation
services in addition to selling the equipment.
Certain contracts include terms and conditions pursuant to which the Company recognizes revenues upon
completion of equipment production, which is subsequently stored at the Company’s plant at the customer’s
request. Revenue is recorded on such contracts upon the customer’s assumption of title and risk of ownership and
when collectability is reasonably assured. In addition, there must be a fixed schedule of delivery of the goods
consistent with the customer’s business practices, the Company must not have retained any specific performance
obligations such that the earnings process is not complete and the goods must have been segregated from the
Company’s inventory prior to revenue recognition.
The Company has certain sales accounted for as multiple-element arrangements, whereby revenue attributable to
the sale of a product is recognized when the product is shipped, and the revenue attributable to services provided
with respect to the product (such as installation services) is recognized when the service is performed.
Consideration is allocated to deliverables using the relative selling price method using vendor specific objective
evidence, if it exists. Otherwise, the Company uses third-party evidence of selling price or the Company’s best
estimate of the selling price for the deliverables. The Company evaluates sales with multiple deliverable elements
(such as an agreement to deliver equipment and related installation services) to determine whether revenue
related to individual elements should be recognized separately, or as a combined unit. In addition to the previously
mentioned general revenue recognition criteria, the Company only recognizes revenue on individual delivered
elements when there is objective and reliable evidence that the delivered element has a determinable value to the
customer on a standalone basis and there is no right of return.
The Company presents in the statements of income any taxes assessed by a governmental authority that are
directly imposed on revenue-producing transactions between the Company and its customers, such as sales, use,
value-added and some excise taxes, on a net (excluded from revenue) basis.
Advertising Expense - The cost of advertising is expensed as incurred. The Company incurred $4,231, $3,657,
and $3,770 in advertising costs during 2015, 2014 and 2013, respectively, which is included in selling, general and
administrative expenses.
Income Taxes - Income taxes are based on pre-tax financial accounting income. Deferred tax assets and liabilities
are recognized for the expected tax consequences of temporary differences between the tax bases of assets and
liabilities and their reported amounts. The Company periodically assesses the need to establish valuation
allowances against its deferred tax assets to the extent the Company no longer believes it is more likely than not
that the tax assets will be fully utilized.
The Company evaluates a tax position to determine whether it is more likely than not that the tax position will be
sustained upon examination, based upon the technical merits of the position. A tax position that meets the more-
likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to
recognize and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not
recognition threshold, no benefit is recognized. The Company is periodically audited by U.S. federal and state as
well as foreign tax authorities. While it is often difficult to predict final outcome or timing of resolution of any
particular tax matter, the Company believes its reserve for uncertain tax positions is adequate to reduce the
uncertain positions to the greatest amount of benefit that is more likely than not realizable.
Product Warranty Reserve - The Company accrues for the estimated cost of product warranties at the time
revenue is recognized. Warranty obligations by product line or model are evaluated based on historical warranty
claims experience. For equipment, the Company’s standard product warranty terms generally include post-sales
support and repairs of products at no additional charge for periods ranging from three months to two years or up to
a specified number of hours of operation. For parts from component suppliers, the Company relies on the original
manufacturer’s warranty that accompanies those parts. Generally, Company fabricated parts are not covered by
specific warranty terms. Although failure of fabricated parts due to material or workmanship is rare, if it occurs, the
Company’s policy is to replace fabricated parts at no additional charge.
73
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
The Company engages in extensive product quality programs and processes, including actively monitoring and
evaluating the quality of our component suppliers. Estimated warranty obligations are based upon warranty terms,
product failure rates, repair costs and current period machine shipments. If actual product failure rates, repair
costs, service delivery costs or post-sales support costs differ from our estimates, revisions to the estimated
warranty liability may be required.
Pension and Retirement Plans - The determination of obligations and expenses under the Company’s pension
plan is dependent on the Company’s selection of certain assumptions used by independent actuaries in calculating
such amounts. Those assumptions are described in Note 12, Pension and Retirement Plans and include among
others, the discount rate, expected return on plan assets and the expected mortality rates. In accordance with
accounting principles generally accepted in the United States, actual results that differ from assumptions are
accumulated and amortized over future periods and, therefore, generally affect the recognized expense in such
periods. Significant differences in actual experience or significant changes in the assumptions used may materially
affect the pension obligations and future expenses.
The Company recognizes the overfunded or underfunded status of its pension plan as an asset or liability.
Actuarial gains and losses, amortization of prior service cost (credit) and amortization of transition obligations are
recognized through other comprehensive income in the year in which the changes occur. The Company measures
the funded status of its pension plan as of the date of the Company’s fiscal year-end.
Stock-based Compensation - The Company recognizes the cost of employee services received in exchange for
equity awards in the financial statements based on the grant date calculated fair value of the awards. The
Company recognizes stock-based compensation expense over the period during which an employee is required to
provide service in exchange for the award (the vesting period).
The Company is in the final stages of implementing a similar RSU plan using available shares under the existing,
shareholder approved, 2011 Incentive Plan, for performance during 2016 through 2018.
Earnings Per Share - Basic earnings per share is based on the weighted average number of common shares
outstanding and diluted earnings per share includes potential dilutive effects of restricted stock units and shares
held in the Company’s supplemental executive retirement plan.
The following table sets forth a reconciliation of the number of shares used in the computation of basic and diluted
earnings per share:
Denominator:
Denominator for basic earnings per share
Effect of dilutive securities:
Employee stock options and restricted stock units
Supplemental executive retirement plan
Denominator for diluted earnings per share
Year Ended December 31
2014
2015
2013
22,934
22,819
123
63
23,120
176
110
23,105
22,749
218
114
23,081
Antidilutive options were not included in the diluted earnings per share computation for the years presented. The
number of antidilutive options in the three years ended December 31, 2015 was not material.
Derivatives and Hedging Activities - The Company recognizes all derivatives in the consolidated balance sheets
at their fair value. Derivatives that are not hedges are adjusted to fair value through income. If the derivative is a
hedge, depending on the nature of the hedge, changes in the fair value of derivatives are either offset against the
change in fair value of assets, liabilities, or firm commitments through income or recognized in other
comprehensive income until the hedged item is recognized in income. The ineffective portion of a derivative’s
change in fair value is immediately recognized in income. From time to time the Company’s foreign subsidiaries
enter into foreign currency exchange contracts to mitigate exposure to fluctuation in currency exchange rates. See
Note 13, Derivative Financial Instruments, regarding foreign exchange contracts outstanding at December 31,
2015 and 2014.
Shipping and Handling Fees and Cost - The Company records revenues earned for shipping and handling as
revenue, while the cost of shipping and handling is classified as cost of goods sold.
74
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Business Combinations - The Company accounts for business combinations using the acquisition method.
Accordingly, intangible assets are recorded apart from goodwill if they arise from contractual or legal rights or if
they are separable from goodwill. Related third party acquisition costs are expensed as incurred and contingent
consideration is booked at its fair value as part of the purchase price.
Subsequent Events Review - Management has evaluated events occurring between December 31, 2015 and the
date these financial statements were filed with the Securities and Exchange Commission for proper recording or
disclosure therein.
Immaterial Correction of Error - During 2015, the Company determined that certain income tax accounts were
not properly stated. The error totaled $3,200 and arose prior to 2012. The accompanying financial statements have
been adjusted to reflect a $3,200 reduction of retained earnings as of December 31, 2014, 2013 and 2012 and a
$3,200 reduction in prepaid expenses as of December 31, 2014. The error had no impact on the Company’s
results of operations or net cash flows for the years ended December 31, 2015, 2014 or 2013.
Recent Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board (‘FASB”) issued
Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers", which supersedes
existing revenue guidance under U.S. GAAP. The standard's core principle is that a company will recognize
revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to
which the company expects to be entitled in exchange for those goods or services. The implementation of this new
standard will require companies to use more judgment and to make more estimates than under current guidance.
The standard, as amended, is effective for public companies for annual periods beginning after December 15,
2017. The Company plans to adopt the new standard effective January 1, 2018. The Company has not yet
determined what impact, if any, the adoption of this new standard will have on the Company's financial position or
results of operations.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of
Inventory", which changes the measurement basis for inventory from the lower of cost or market to lower of cost
and net realizable value and also eliminates the requirement for companies to consider replacement cost or net
realizable value less an approximate normal profit margin when determining the recorded value of inventory. The
standard is effective for public companies in fiscal years beginning after December 15, 2016, and the Company
expects to adopt the standard effective January 1, 2017. The Company has not yet determined what impact, if any,
the adoption of this new standard will have on the Company's financial position or results of operations.
In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes”, which
requires all companies to classify deferred tax assets and liabilities as noncurrent on the balance sheet instead of
separating deferred taxes into current and noncurrent amounts. Also, companies will no longer allocate valuation
allowances between current and noncurrent deferred tax assets because those allowances also will be classified
as noncurrent. The standard is effective for public entities for annual periods beginning on or after December 15,
2016 with early adoption permitted. The Company’s prospective adoption of this standard for the year ended
December 31, 2015 did not have a significant impact on the Company’s financial position.
2. Inventories
Inventories consist of the following:
Raw materials and parts
Work-in-process
Finished goods
Used equipment
Total
3. Fair Value Measurements
December 31
2015
141,967 $
113,859
104,879
24,071
384,776 $
$
$
2014
149,171
105,163
102,235
31,266
387,835
The Company has various financial instruments that must be measured at fair value on a recurring basis, including
marketable debt and equity securities held by Astec Insurance, and marketable equity securities held in an
unqualified Supplemental Executive Retirement Plan (“SERP”). The financial assets held in the SERP also
constitute a liability of the Company for financial reporting purposes. The Company’s subsidiaries also occasionally
enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates.
75
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
For cash and cash equivalents, trade receivables, other receivables, revolving debt and accounts payable, the
carrying amount approximates the fair value because of the short-term nature of these instruments. Investments
are carried at their fair value based on quoted market prices for identical or similar assets or, where no quoted
prices exist, other observable inputs for the asset. The fair values of foreign currency exchange contracts are
based on quotations from various banks for similar instruments using models with market based inputs.
As indicated in the tables below, the Company has determined that its financial assets and liabilities at December
31, 2015 and 2014 are level 1 and level 2 in the fair value hierarchy:
December 31, 2015
Level 1
Level 2
Level 3
Total
Financial Assets:
Trading equity securities:
SERP money market fund
SERP mutual funds
Preferred stocks
Trading debt securities:
Corporate bonds
Municipal bonds
Floating rate notes
U.S. Treasury bills
Savings bonds
Other government bonds
Derivative financial instruments
Total financial assets
Financial Liabilities:
SERP liabilities
Total financial liabilities
Financial Assets:
Trading equity securities:
SERP money market fund
SERP mutual funds
Preferred stocks
Trading debt securities:
Corporate bonds
Municipal bonds
Floating rate notes
U.S. Treasury bills
Other government bonds
Derivative financial instruments
Total financial assets
Financial Liabilities:
SERP liabilities
Total financial liabilities
$
445 $
2,864
742
3,756
--
84
404
77
--
--
8,372 $
$
--
--
--
141
1,811
--
--
--
2,755
1,265
5,972 $
--
--
$
$
5,869 $
5,869 $
--
--
--
--
--
--
--
--
--
--
--
--
--
$
$
$
$
445
2,864
742
3,897
1,811
84
404
77
2,755
1,265
14,344
5,869
5,869
December 31, 2014
Level 1
Level 2
Level 3
Total
532
3,195
973
2,825
--
100
622
--
--
8,247
--
--
$
$
$
$
$
--
--
--
1,184
2,060
322
--
1,496
547
5,609
8,128
8,128
$
$
$
--
--
--
--
--
--
--
--
--
--
--
--
$
$
$
$
532
3,195
973
4,009
2,060
422
622
1,496
547
13,856
8,128
8,128
$
$
$
$
$
$
$
The Company reevaluates the volume of trading activity for each of its investments at the end of each reporting
period and adjusts the level within the fair value hierarchy as needed. Due to increased trading activity, $292 of
investments included in Level 2 at December 31, 2014 were transferred to Level 1 at December 31, 2015. In
addition, due to decreased trading activity, $141 of investments included in Level 1 at December 31, 2014 were
transferred to Level 2 at December 31, 2015.
76
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
4. Investments
The Company’s trading securities consist of the following:
December 31, 2015
Trading equity securities
Trading debt securities
Total
December 31, 2014
Trading equity securities
Trading debt securities
Total
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value (Net
Carrying
Amount)
$
$
$
$
$
4,160
9,263
13,423 $
$
79
37
116 $
188
272
$
460 $
4,051
9,028
13,079
4,335
8,573
$
12,908 $
374
107
$
481 $
9
71
80
$
$
4,700
8,609
13,309
Trading equity investments are valued at their estimated fair value based on their quoted market prices and trading
debt securities are valued based upon a mix of observable market prices and model driven prices derived from a
matrix of observable market prices for assets with similar characteristics obtained from a nationally recognized
third party pricing service. Additionally, a significant portion of the trading equity securities are in equity money
market and mutual funds and also comprise a portion of the Company’s liability under its SERP. See Note 12,
Pension and Retirement Plans, for additional information on these investments and the SERP.
Trading debt securities are comprised mainly of marketable debt securities held by Astec Insurance. Astec
Insurance has an investment strategy that focuses on providing regular and predictable interest income from a
diversified portfolio of high-quality fixed income securities.
Net unrealized gains or losses incurred on investments still held as of the end of each reporting period amounted
to losses of $429 and $17 in 2015 and 2014, respectively, and a gain of $175 in 2013.
5. Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in
business combinations. Current U.S. accounting guidance provides that goodwill and indefinite-lived intangible
assets be tested for impairment at least annually. The Company performs the required valuation procedures each
year as of December 31 after the following year’s forecasts are submitted and reviewed. The valuations performed
in 2015, 2014 and 2013 indicated no impairment of goodwill.
The changes in the carrying amount of goodwill by reporting segment during the years ended December 31, 2015
and 2014 are as follows:
Balance, December 31, 2013
Acquisition
Foreign currency translation
Balance, December 31, 2014
Purchase price adjustment
Foreign currency translation
Balance, December 31, 2015
Infrastructure
Group
$
$
8,719
--
(135)
8,584
--
(103)
8,481
$
$
Aggregate and
Mining Group Energy Group Corporate
--
$
--
--
--
--
--
--
6,338
18,256
(1,183)
23,411
(178)
(879)
22,354 $
--
--
--
--
--
--
--
$
$
Total
15,057
18,256
(1,318)
31,995
(178)
(982)
30,835
$
$
77
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
6. Intangible Assets
Intangible assets consisted of the following at December 31, 2015 and 2014:
2015
2014
Gross Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Gross Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Dealer network and customer
relationships
Trade names
Other
Total
$
13,111
4,857
4,966
$ 22,934
$
$
$
7,559
5,552
3,901
956
2,849
2,117
9,357 $ 13,577
$
13,600
4,984
5,471
$ 24,055
$
$
$
9,355
4,245
4,339
645
1,893
3,578
6,783 $ 17,272
Amortization expense on intangible assets was $2,953, $2,735 and $1,066 for 2015, 2014 and 2013, respectively.
Intangible asset amortization expense is expected to be $2,148, $2,012, $1,751, $1,223 and $1,140 in the years
ending December 31, 2016, 2017, 2018, 2019 and 2020, respectively, and $5,303 thereafter.
7. Property and Equipment
Property and equipment consist of the following:
Land
Building and land improvements
Manufacturing and office equipment
Aviation equipment
Less accumulated depreciation
Total
December 31
2015
2014
$
$
12,628
132,353
214,545
14,151
(203,471)
170,206
$
$
14,024
146,266
235,623
13,698
(222,001)
187,610
Depreciation expense was $20,744, $21,343 and $20,966 for the years ended December 31, 2015, 2014 and
2013, respectively.
In October 2015, the Company recorded the sale of its Astec Underground facility for a net sales price of $9,599.
The cost of closing the facility totaled $1,500, with $999 recorded in cost of sales and $501 in selling, general and
administrative expenses in the year ended December 31, 2015.
8. Leases
The Company leases certain land, buildings and equipment for use in its operations under various operating
leases. Total rental expense charged to operations under operating leases was approximately $2,786, $2,544 and
$2,436 for the years ended December 31, 2015, 2014 and 2013, respectively.
Minimum rental commitments for all noncancelable operating leases at December 31, 2015 are as follows:
2016
2017
2018
2019
2020
Thereafter
$
$
1,670
1,433
535
393
280
131
4,442
78
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
9. Debt
On April 12, 2012, the Company and certain of its subsidiaries entered into an amended and restated credit
agreement with Wells Fargo whereby Wells Fargo extended to the Company an unsecured line of credit of up to
$100,000, including a sub-limit for letters of credit of up to $25,000. There were no outstanding revolving or term
loan borrowings under the credit facility at December 31, 2015 or 2014. Letters of credit totaling $17,684 were
outstanding under the credit facility as of December 31, 2015, resulting in additional borrowing ability of $82,316 on
the credit facility as of December 31, 2015. The amended and restated agreement has a five-year term expiring in
April 2017. Borrowings under the agreement are subject to an interest rate equal to the daily one-month LIBOR
rate plus a 0.75% margin, resulting in a rate of 1.18% at December 31, 2015. The unused facility fee is 0.175%.
Interest only payments are due monthly. The credit agreement contains certain financial covenants, including
provisions concerning required levels of annual net income, minimum tangible net worth and maximum allowed
capital expenditures. The Company was in compliance with these covenants as of December 31, 2015.
The Company’s South African subsidiary, Osborn Engineered Products SA (Pty) Ltd (“Osborn”), has a bank
overdraft facility of $6,123 to finance short-term working capital needs, as well as to cover performance letters of
credit, advance payment and retention guarantees. As of December 31, 2015, Osborn had $686 in retention
guarantees outstanding under the facility. The facility is guaranteed by Astec Industries, Inc. The overdraft’s 0.75%
unused facility fee is waived if 50% or more of the facility is utilized. As of December 31, 2015, Osborn had
available credit under the facility of $5,437. The interest rate is 0.25% less than the South Africa prime rate,
resulting in a rate of 9.50% as of December 31, 2015.
The Company's Brazilian subsidiary, Astec do Brasil Fabricacao de Equipamentos Ltda. ("Astec Brazil"), has
outstanding working capital loans totaling $8,281 from a Brazilian bank with interest rates ranging from 10.4% to
20.8%. The loans have maturity dates ranging from December 2016 to April 2024 and are secured by letters of
credit totaling $8,674 issued by Astec Industries, Inc. Additionally, Astec Brazil has various five-year equipment
financing loans outstanding with other Brazilian banks in the aggregate of $1,401 as of December 31, 2015 that
have interest rates ranging from 3.5% to 16.3%. These equipment loans have maturity dates ranging from
September 2018 to April 2020. Astec Brazil's loans are included in the accompanying balance sheets as current
maturities of long-term debt of $4,528 and long-term debt of $5,154 as of December 31, 2015.
Long-term debt maturities are expected to be $4,528, $2,556, $1,326, $346 and $215 in the years ending
December 31, 2016, 2017, 2018, 2019 and 2020, respectively, and $711 thereafter.
10. Product Warranty Reserves
The Company warrants its products against manufacturing defects and performance to specified standards. The
warranty period and performance standards vary by product, but generally range from three months to two years or
up to a specified number of hours of operation. The Company estimates the costs that may be incurred under its
warranties and records a liability at the time product sales are recorded. The warranty liability is primarily based on
historical claim rates, nature of claims and the associated costs.
Changes in the Company’s product warranty liability during 2015, 2014 and 2013 are as follows:
Reserve balance, beginning of year
Warranty liabilities accrued
Warranty liabilities settled
Other
Reserve balance, end of year
11. Accrued Loss Reserves
2015
2014
$
$
10,032
13,743
(14,177)
(498)
9,100
$
$
12,716
12,796
(15,563)
83
10,032
$
$
2013
11,052
12,199
(10,171)
(364)
12,716
The Company accrues reserves for losses related to known workers’ compensation and general liability claims that
have been incurred but not yet paid or are estimated to have been incurred but not yet reported to the Company.
The undiscounted reserves are actuarially determined based on the Company’s evaluation of the type and severity
of individual claims and historical information, primarily its own claim experience, along with assumptions about
future events. Changes in assumptions, as well as changes in actual experience, could cause these estimates to
change in the future. Total accrued loss reserves at December 31, 2015 were $7,663 and $7,562 at December 31,
2014, of which $4,825 and $4,512 was included in other long-term liabilities at December 31, 2015 and 2014,
respectively.
79
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
12. Pension and Retirement Plans
Prior to December 31, 2003, all employees of the Company’s Kolberg-Pioneer, Inc. subsidiary were covered by a
defined benefit pension plan. After December 31, 2003, all benefit accruals under the plan ceased and no new
employees could become participants in the plan. Benefits paid under this plan are based on years of service
multiplied by a monthly amount. The Company’s funding policy for the plan is to make at least the minimum annual
contributions required by applicable regulations.
The Company’s investment strategy for the plan is to earn a rate of return sufficient to match or exceed the long-
term growth of pension liabilities. The investment policy states that the Plan Committee in its sole discretion shall
determine the allocation of plan assets among the following four asset classes: cash equivalents, fixed-income
securities, domestic equities and international equities. The Plan Committee attempts to ensure adequate
diversification of the invested assets through investment in an exchange traded mutual fund that invests in a
diversified portfolio of stocks, bonds and money market securities.
The following provides information regarding benefit obligations, plan assets and the funded status of the plan:
Change in benefit obligation
Benefit obligation, beginning of year
Interest cost
Actuarial (gain)/loss
Benefits paid
Benefit obligation, end of year
Accumulated benefit obligation
Change in plan assets
Fair value of plan assets, beginning of year
Actual gain/(loss) on plan assets
Employer contribution
Benefits paid
Fair value of plan assets, end of year
Funded status, end of year
Amounts recognized in the consolidated balance sheets
Noncurrent liabilities
Net amount recognized
Amounts recognized in accumulated other comprehensive income
consist of
Net loss
Net amount recognized
Weighted average assumptions used to determine benefit obligations as
of December 31
Discount rate
Expected return on plan assets
Rate of compensation increase
$
$
$
$
$
$
$
$
Pension Benefits
2015
2014
15,986
596
(417)
(600)
15,565
15,565
$
$
$
13,283
(279)
284
(600)
12,688
(2,877) $
13,815
620
2,118
(567)
15,986
15,986
12,693
819
338
(567)
13,283
(2,703)
(2,877) $
(2,877) $
(2,703)
(2,703)
6,098
6,098
$
$
5,896
5,896
4.28%
7.00%
N/A
3.81%
7.00%
N/A
The measurement date used for the plan was December 31. In determining the expected return on plan assets, the
historical experience of the plan assets, the current and expected allocation of the plan assets and the expected
long-term rates of return were considered.
80
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
All assets in the plan are invested in an exchange traded mutual fund (level 1 in the fair value hierarchy). The
allocation of assets within the mutual fund as of December 31 and the target asset allocation ranges by asset
category are as follows:
Asset Category
Equity securities
Debt securities
Money market funds
Total
Actual Allocation
2015
2014
66.0%
30.7%
3.3%
100.0%
65.6%
30.1%
4.3%
100.0%
2015 & 2014 Target
Allocation Ranges
53 - 73%
21 - 41%
0 - 15%
Net periodic benefit cost for 2015, 2014 and 2013 included the following components:
Pension Benefits
2014
2015
2013
Components of net periodic benefit cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Net periodic benefit cost
Other changes in plan assets and benefit obligations recognized in
other comprehensive income
Net actuarial (gain)/loss for the year
Amortization of net loss
Total recognized in other comprehensive income
$
$
$
596
(840)
500
256
$
$
620
(816)
295
99
$
$
561
(693)
536
404
702 $
(500)
202
2,115 $ (2,109)
(536)
(2,645)
(295)
1,820
Total recognized in net periodic benefit cost and other comprehensive income
Weighted average assumptions used to determine net periodic benefit
cost for years ended December 31
Discount rate
Expected return on plan assets
$
458
$
1,919
$
(2,241)
3.81%
7.00%
4.60%
7.00%
3.82%
7.00%
No contributions are expected to be funded by the Company during 2016.
Amounts in accumulated other comprehensive income expected to be recognized in net periodic benefit cost in
2016 for the amortization of a net loss is $480.
The following estimated future benefit payments are expected in the years indicated:
2016
2017
2018
2019
2020
2021 - 2025
Pension Benefits
730
$
730
790
840
870
4,670
The Company sponsors a 401(k) defined contribution plan to provide eligible employees with additional income
upon retirement. The Company’s contributions to the plan are based on employee contributions. The Company’s
contributions totaled $5,292, $5,134 and $4,941 in 2015, 2014 and 2013, respectively.
The Company maintains a SERP for certain of its executive officers. The plan is a non-qualified deferred
compensation plan administered by the Board of Directors of the Company, pursuant to which the Company
makes quarterly cash contributions of a certain percentage of executive officers’ compensation. Investments are
self-directed by participants and can include Company stock. Upon retirement, participants receive their
apportioned share of the plan assets in the form of cash.
81
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Assets of the SERP consist of the following:
Company stock
Equity securities
Total
December 31, 2015
Market
Cost
$
$
1,778
3,402
5,180
$
$
2,560
3,309
5,869
$
$
December 31, 2014
Market
Cost
2,929 $
3,368
6,297 $
4,401
3,727
8,128
The Company periodically adjusts the deferred compensation liability such that the balance of the liability equals
the total fair market value of all assets held by the trust established under the SERP. Such liabilities are included in
other long-term liabilities on the consolidated balance sheets. The equity securities are included in investments in
the consolidated balance sheets and classified as trading equity securities. See Note 4, Investments, for additional
information. The cost of the Company stock held by the plan is included as a reduction in shareholders’ equity in
the consolidated balance sheets.
The change in the fair market value of Company stock held in the SERP results in a charge or credit to selling,
general and administrative expenses in the consolidated statements of income because the acquisition cost of the
Company stock in the SERP is recorded as a reduction of shareholders’ equity and is not adjusted to fair market
value; however, the related liability is adjusted to the fair market value of the stock as of each period end. The
Company recognized expense of $241, $74 and $601 in 2015, 2014 and 2013, respectively, related to the change
in the fair value of the Company stock held in the SERP.
13. Derivative Financial Instruments
The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by
using derivative instruments is foreign currency risk. From time to time the Company’s foreign subsidiaries enter
into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates. The fair
value of the derivative financial instrument is recorded on the Company’s balance sheet and is adjusted to fair
value at each measurement date. The changes in fair value are recognized in the consolidated statements of
income in the current period. The Company does not engage in speculative transactions nor does it hold or issue
derivative financial instruments for trading purposes. The average U.S. dollar equivalent notional amount of
outstanding foreign currency exchange contracts was $12,561 during 2015. At December 31, 2015, the Company
reported $935 of derivative assets in other current assets, $330 of derivative assets in other long-term assets and
$22 of derivative liabilities in other current liabilities. The Company reported $434 of derivative assets in other
current assets and $113 of derivative assets in other long-term assets at December 31, 2014. The Company
recognized, as a component of cost of sales, net gains on the change in fair value of derivative instruments of
$606, $438 and $1,061 for the years ended December 31, 2015, 2014 and 2013, respectively. There were no
derivatives that were designated as hedges at December 31, 2015 or 2014.
14. Income Taxes
For financial reporting purposes, income before income taxes includes the following components:
Year Ended December 31
2014
57,651 $
(4,045)
53,606 $
2015
57,846
(5,873)
51,973
$
$
2013
53,315
4,927
58,242
United States
Foreign
Income before income taxes
$
$
82
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
The provision for income taxes consists of the following:
Current provision:
Federal
State
Foreign
Total current provision
Deferred benefit:
Federal
State
Foreign
Total deferred benefit
Total provision (benefit):
Federal
State
Foreign
Total tax provision
Year Ended December 31
2015
2014
2013
$
$
19,758
2,553
255
22,566
18,713 $
2,992
243
21,948
(1,183)
(275)
(1,101)
(2,559)
(1,627)
(222)
(699)
(2,548)
16,239
2,785
2,664
21,688
(885)
(923)
(852)
(2,660)
18,575
2,278
(846)
20,007
$
17,086
2,770
(456)
19,400 $
15,354
1,862
1,812
19,028
$
The Company’s income tax provision is computed based on the domestic and foreign federal statutory rates and
the average state statutory rates, net of related federal benefit.
The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate
to income before income taxes. A reconciliation of the provision for income taxes at the statutory federal income
tax rate to the amount provided is as follows:
Tax at the statutory federal income tax rate
Qualified production activity deduction
State income tax, net of federal income tax
Other permanent differences
Research and development tax credits
Change in valuation allowance
Other items
Total tax provision
$
$
2015
$
Year Ended December 31
2014
18,762 $
(1,360)
1,727
840
(1,323)
1,675
(921)
19,400
18,191
(1,174)
1,386
393
(291)
2,036
(534)
20,007
$
$
2013
20,385
(1,395)
1,105
464
(2,054)
810
(287)
19,028
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for income tax purposes.
83
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Significant components of the Company’s deferred tax assets and liabilities are as follows:
Deferred tax assets:
Inventory reserves
Warranty reserves
Bad debt reserves
State tax loss carryforwards
Accrued vacation
SERP
Deferred compensation
Restricted stock units
Foreign exchange gains/losses
Pension and post-employment benefits
Foreign deferred tax assets
Foreign net operating losses
Other
Valuation allowances
Total deferred tax assets
Deferred tax liabilities:
Property and equipment
Amortization
Goodwill
Pension
Foreign tax rate differential
Foreign deferred tax liabilities
Total deferred tax liabilities
Total net deferred assets (liabilities)
December 31
2015
2014
6,696
2,774
409
3,006
2,055
275
1,328
1,893
4,549
2,232
2,773
5,134
3,460
(8,065)
28,519
17,616
1,019
1,917
1,305
--
2,815
24,672
3,847
$
$
6,539
2,988
598
2,377
2,060
1,231
1,255
2,256
3,111
2,197
3,311
3,168
3,267
(6,029)
28,329
19,394
1,087
2,014
1,313
2,236
3,820
29,864
(1,535)
$
$
In accordance with ASU No. 2015-17 Topic 740-10-65-4, the Company has prospectively adopted the early
application of ASU No. 2015-17, thereby classifying all deferred taxes as noncurrent assets and noncurrent
liabilities as of December 31, 2015. The reason for the change is to simplify the reporting of all deferred tax assets
and liabilities on the balance sheet. The prior periods were not retrospectively adjusted.
As of December 31, 2015, the Company has state net operating loss carryforwards of $66,501, foreign net
operating loss carryforwards of approximately $16,062, and state tax credit carryforwards of $864 for tax purposes,
which will be available to offset future taxable income. If not used, these carryforwards will expire between 2016
and 2029. A significant portion of the valuation allowance for deferred tax assets relates to the future utilization of
state and foreign net operating loss and state tax credit carryforwards. Future utilization of these net operating loss
and state tax credit carryforwards is evaluated by the Company on a periodic basis and the valuation allowance is
adjusted accordingly. In 2015, the valuation allowance on these carryforwards was increased by $2,111 due to
uncertainty about whether certain entities will realize their state and foreign net operating loss carryforwards. The
Company has also determined that the recovery of certain other deferred tax assets is uncertain. The valuation
allowance for these deferred tax assets was decreased by $75 during 2015.
Undistributed earnings of the Company’s Canadian subsidiary, Breaker Technology Ltd., and Northern Ireland
subsidiary, Telestack Limited, are considered to be indefinitely reinvested; accordingly, no provision for U.S.
federal and state income taxes has been provided thereon. Upon any future repatriation of their earnings, in the
form of dividends or otherwise, the Company would be subject to additional U.S. income taxes (subject to an
adjustment for foreign tax credits) and withholding taxes due to Canada may have to be paid. The cumulative
amount of Breaker Technology, Ltd.’s unrecovered basis difference is $9,300 as of December 31, 2015. The
cumulative amount of Telestack Limited’s unrecovered basis difference is $1,000 as of December 31, 2015. The
determination of the unrecognized deferred tax liability on the basis difference is not practical at this time.
84
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions.
The Company is no longer subject to U.S. federal income tax examinations by authorities for years prior to 2013.
With few exceptions, the Company is no longer subject to state and local or non-U.S. income tax examinations by
authorities for years prior to 2008.
The Company has a liability for unrecognized tax benefits of $603 and $2,585 (excluding accrued interest and
penalties) as of December 31, 2015 and 2014, respectively. The Company recognizes interest and penalties
accrued related to unrecognized tax benefits in tax expense. The Company recognized tax benefits of $123 and
$107 in 2015 and 2014, respectively, for penalties and interest related to amounts that were settled for less than
previously accrued. The net total amount of unrecognized tax benefits that, if recognized, would affect the
Company’s effective tax rate is $618 and $2,722 at December 31, 2015 and 2014, respectively. The Company
does not expect a significant increase or decrease to the total amount of unrecognized tax benefits within the next
twelve months.
A reconciliation of the beginning and ending unrecognized tax benefits excluding interest and penalties is as
follows:
Balance, beginning of year
Additions for tax positions related to the current year
Additions for tax positions related to prior years
Reductions due to lapse of statutes of limitations
Decreases related to settlements with tax authorities
Balance, end of year
Year Ended December 31
2015
2014
2013
$
$
2,585
206
549
(162)
(2,575)
603
$
$
1,933
127
525
--
--
2,585
$
$
2,095
102
128
(149)
(243)
1,933
The December 31, 2015 balance of unrecognized tax benefits includes no tax positions for which the ultimate
deductibility is highly certain but the timing of such deductibility is uncertain. Accordingly, there is no impact to the
deferred tax accounting for certain tax benefits.
15. Contingent Matters
Certain customers have financed purchases of Company products through arrangements in which the Company is
contingently liable for customer debt of $1,881 at December 31, 2015. These arrangements expire at various dates
through February 2019 and provide that the Company will receive the lender's full security interest in the
equipment financed if the Company is required to fulfill its contingent liability under these arrangements. The
Company has recorded a liability of $133 related to these guarantees as of December 31, 2015.
In addition, the Company is contingently liable under letters of credit issued by Wells Fargo totaling $17,684 as of
December 31, 2015, including $8,674 of letters of credit guaranteeing certain Astec Brazil bank debt. The
outstanding letters of credit expire at various dates through November 2017. As of December 31, 2015, Osborn is
contingently liable for a total of $686 in retention guarantees. As of December 31, 2015, Astec Australia is
contingently liable for a total of $18 in performance bank guarantees. As of December 31, 2015, Telestack is
contingently liable for a total of $618 in performance bond, advance payment and performance guarantees. The
maximum potential amount of future payments under these letters of credit and guarantees for which the Company
could be liable is $19,006 as of December 31, 2015.
The Company is currently a party to various claims and legal proceedings that have arisen in the ordinary course
of business. If management believes that a loss arising from such claims and legal proceedings is probable and
can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal fees) or the
minimum estimated liability when the loss is estimated using a range and no point within the range is more
probable than another. As management becomes aware of additional information concerning such contingencies,
any potential liability related to these matters is assessed and the estimates are revised, if necessary. If
management believes that a loss arising from such claims and legal proceedings is either (i) probable but cannot
be reasonably estimated or (ii) reasonably possible but not probable, the Company does not record the amount of
the loss, but does make specific disclosure of such matter. Based upon currently available information and with the
advice of counsel, management believes that the ultimate outcome of its current claims and legal proceedings,
individually and in the aggregate, will not have a material adverse effect on the Company's financial position, cash
flows or results of operations. However, claims and legal proceedings are subject to inherent uncertainties and
rulings unfavorable to the Company could occur. If an unfavorable ruling were to occur, there exists the possibility
of a material adverse effect on the Company's financial position, cash flows or results of operations.
85
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
During 2004, the Company received notice from the Environmental Protection Agency ("EPA") that it may be
responsible for a portion of the costs incurred in connection with an environmental cleanup in Illinois. The
discharge of hazardous materials and associated cleanup relate to activities occurring prior to the Company's
acquisition of Barber-Greene in 1986. The Company believes that over 300 other parties have received similar
notices. At this time, the Company cannot predict whether the EPA will seek to hold the Company liable for a
portion of the cleanup costs or the amount of any such liability. The Company has not recorded a liability with
respect to this matter because no estimate of the amount of any such liability can be made at this time.
16. Shareholders’ Equity
Beginning in 2006 and again in 2011, the Company implemented five-year plans to award key members of
management restricted stock units (“RSUs”) each year based upon annual financial performance of the Company
and its subsidiaries. Each five-year plan allows up to 700 of newly issued shares of Company stock to be granted
to employees. RSUs awarded under the Company’s 2006 and 2011 Incentive Plans were granted shortly after the
end of each year from 2006 through 2015 based upon the performance of the Company and its individual
subsidiaries, with additional RSU’s granted based upon cumulative five-year performance. Generally, each award
vests at the end of five years from the date of grant, or at the time a recipient retires after reaching age 65, if
earlier. The fair value of the RSUs that vested during 2015, 2014 and 2013 was $2,785, $3,045 and $2,405,
respectively. The grant date tax benefit was increased (reduced) by $336, $470 and $(77), respectively, upon the
vesting of RSUs in 2015, 2014 and 2013.
Compensation expense of $1,019, $961 and $1,231 was recorded in the years ended December 31, 2015, 2014
and 2013, respectively, to reflect the fair value of RSUs granted (or anticipated to be granted for annual and five-
year ended 2015 performance) less estimated forfeitures, amortized over the portion of the vesting period
occurring during the period. Related income tax benefits of $362, $348 and $417 were recorded in 2015, 2014 and
2013, respectively. Based upon the grant date fair value of RSUs, it is anticipated that $2,016 of additional
compensation costs will be recognized in future periods through 2021 for RSUs earned through December 31,
2015. The weighted average period over which this additional compensation cost will be expensed is 4.0 years.
RSUs do not participate in Company paid dividends.
Changes in restricted stock units during the year ended December 31, 2015 are as follows:
Unvested restricted stock units, beginning of year
Units granted
Units forfeited
Units vested
Unvested restricted stock units, end of year
Weighted Average
Grant Date
Fair Value
2015
$
197
22
(6)
(66)
147
33.54
42.77
39.63
28.70
36.83
The grant date fair value of the restricted stock units granted during 2015, 2014 and 2013 was $937, $561 and
$763, respectively.
17. Operations by Industry Segment and Geographic Area
The Company has three reportable segments, each of which is comprised of multiple business units that offer
similar products and services and meet the requirements for aggregation. A brief description of each segment is as
follows:
Infrastructure Group - This segment consists of five business units, three of which design, engineer, manufacture
and market a complete line of portable, stationary and relocatable hot-mix asphalt plants, wood pellet plants,
asphalt pavers, material transfer vehicles, stabilizers, milling machines, paver screeds and related ancillary
equipment. The other two business units in this segment primarily operate as Company-owned dealers in the
foreign countries in which they are domiciled. These two business units sell, service and install products produced
by the manufacturing subsidiaries of the Company, and a majority of their sales are to customers in the
infrastructure industry. The principal purchasers of the products produced by this group are asphalt producers,
highway and heavy equipment contractors, wood pellet processors and foreign and domestic governmental
agencies.
86
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Aggregate and Mining Group - This segment consists of eight business units that design, engineer, manufacture
and market a complete line of jaw crushers, cone crushers, horizontal shaft impactors, vertical shaft impactors,
material handling, roll rock crushers and stationary rockbreaker systems, vibrating feeders and high frequency
vibrating screens, conveyors, inclined, vertical and horizontal screens and sand classifying and washing
equipment. The principal purchasers of products produced by this group are distributors, open mine operators,
quarry operators, port and inland terminal operators, highway and heavy equipment contractors and foreign and
domestic governmental agencies. This group includes the operations of Telestack Limited, which was acquired in
April 2014.
Energy Group - This segment consists of four business units that design, engineer, manufacture and market a
complete line of drilling rigs for the oil and gas, geothermal and water well industries, high pressure diesel pump
trailers for fracking and cleaning oil and gas wells, a variety of industrial heaters to fit a broad range of applications
including heating equipment for refineries, roofing material plants, chemical processing, rubber plants, oil sands
and energy related processing, heat transfer processing equipment, thermal fluid storage tanks, waste heat
recovery equipment, whole-tree pulpwood and biomass chippers and horizontal grinders. The principal purchasers
of products produced by this group are oil, gas and water well drilling industry contractors, processors of oil, gas
and biomass for energy production and contractors in the construction and demolition recycling markets.
Corporate - This category consists of business units that do not meet the requirements for separate disclosure as
an operating segment or inclusion in one of the other reporting segments and includes the Company's parent
company, Astec Industries, Inc., and Astec Insurance. The Company evaluates performance and allocates
resources to its operating segments based on profit or loss from operations before U.S. federal income taxes and
corporate overhead and thus these costs are included in the Corporate category.
The accounting policies of the reportable segments are the same as those described in the summary of significant
accounting policies. Intersegment sales and transfers are valued at prices comparable to those for unrelated
parties.
87
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Segment information for 2015
Revenues from external customers
Intersegment revenues
Interest expense
Depreciation and amortization
Income taxes
Profit (loss)
Infrastructure
Group
$ 428,737
22,947
258
6,907
1,224
33,890
Aggregate
and Mining
Group
$ 370,813
28,701
1,005
10,719
764
30,690
Energy
Group
$ 183,607
16,010
10
5,553
(129)
3,609
$
Corporate
$ --
--
338
899
18,148
(36,623)
Total
983,157
67,658
1,611
24,078
20,007
31,566
Assets
Capital expenditures
567,936
8,043
496,089
8,807
256,978
4,049
306,511
389
1,627,514
21,288
Segment information for 2014
Revenues from external customers
Intersegment revenues
Interest expense
Depreciation and amortization
Income taxes
Profit (loss)
Infrastructure
Group
$ 386,356
26,661
31
7,045
1,365
29,477
Aggregate
and Mining
Group
$ 384,883
33,009
463
10,120
1,235
32,900
Energy
Group
$ 204,356
17,548
11
6,358
348
10,316
$
Corporate
$ --
--
215
853
16,452
(35,270)
Total
975,595
77,218
720
24,376
19,400
37,423
Assets
Capital expenditures
539,794
5,375
494,428
16,169
244,003
2,875
302,082
413
1,580,307
24,832
Segment information for 2013
Revenues from external customers
Intersegment revenues
Interest expense
Depreciation and amortization
Income taxes
Profit (loss)
Infrastructure
Group
$ 398,399
21,682
13
7,417
1,567
32,814
Aggregate
and Mining
Group
$ 350,514
45,435
12
7,906
2,642
33,031
Energy
Group
$ 184,085
12,857
4
6,114
46
4,005
$
Corporate
--
$
--
394
828
14,773
(30,367)
Total
932,998
79,974
423
22,265
19,028
39,483
Assets
Capital expenditures
502,831
6,214
427,565
15,649
223,389
5,510
315,560
300
1,469,345
27,673
88
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
The totals of segment information for all reportable segments reconciles to consolidated totals as follows:
2015
2014
2013
$
68,189
(36,623)
831
400
$
72,693
(35,270)
252
(3,217)
69,850
(30,367)
(172)
(269)
32,797
$
34,458
$
39,042
$ 1,321,003
306,511
(7,496)
(583,834)
(223,500)
(35,331)
$ 1,278,225
302,082
(7,896)
(515,625)
(227,051)
(27,470)
$ 1,153,785
315,560
(4,679)
(482,768)
(195,199)
(37,408)
777,353
$
802,265
$
749,291
$
Year Ended December 31
2014
654,230
61,898
47,940
49,797
34,772
12,365
2015
722,287
54,321
45,671
32,454
29,995
23,867
$
18,995
9,513
8,466
8,376
8,345
6,990
4,404
3,574
2,706
1,532
1,330
331
260,870
983,157
$
13,327
17,018
25,589
12,869
8,245
9,993
9,275
4,377
1,743
4,478
7,451
228
321,365
975,595
$
2013
599,054
70,991
62,911
33,526
47,505
15,428
6,699
5,836
17,440
11,620
25,849
15,917
5,620
1,749
3,672
5,294
3,857
30
333,944
932,998
$
Net income attributable to controlling interest
Total profit for reportable segments
Corporate expenses, net
Net (income) loss attributable to non-controlling interest
Recapture (elimination) of intersegment profit
Total consolidated net income attributable to controlling interest $
Assets
Total assets for reportable segments
Corporate assets
Elimination of intercompany profit in inventory
Elimination of intercompany receivables
Elimination of investment in subsidiaries
Other eliminations
Total consolidated assets
$
Sales into major geographic regions were as follows:
United States
Canada
Africa
South America (excluding Brazil)
Australia and Oceania
Other European Countries
Middle East
Other Asian Countries
Russia
Brazil
Post-Soviet States (excluding Russia)
Mexico
Central America (excluding Mexico)
Japan and Korea
India
West Indies
China
Other
Total foreign
Total consolidated sales
$
$
89
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Long-lived assets by major geographic region are as follows:
United States
Brazil
South Africa
Australia
Northern Ireland
Canada
Germany
Total foreign
Total
December 31
2015
141,727
9,780
5,116
4,351
5,116
2,987
1,129
28,479
170,206
$
$
$
$
2014
150,425
14,798
7,295
5,111
5,065
3,592
1,324
37,185
187,610
18. Accumulated Other Comprehensive Loss
The balance of related after-tax components comprising accumulated other comprehensive loss is summarized
below:
Foreign currency translation adjustment
Unrecognized pension and post-retirement benefit cost, net of tax of
$2,232 and $2,197, respectively
Accumulated other comprehensive loss
December 31
2015
2014
$
(19,891) $
(9,384)
(3,673)
$
(23,564) $
(3,531)
(12,915)
See Note 12, Pension and Retirement Plans, for discussion of the amounts recognized in accumulated other
comprehensive income related to the Company’s Kolberg-Pioneer, Inc. defined pension plan.
19. Other Income (Expense) - Net
Other income (expense), net consists of the following:
Investment income (loss)
Licensing fees
Income from life insurance policies
Other
Total
20. Business Combinations
Year Ended December 31
2014
2015
2013
$
$
(381) $
641
1,204
1,591
3,055
$
64 $
831
--
312
1,207 $
853
764
--
320
1,937
On April 1, 2014, the Company purchased 100% of the stock of Telestack Limited (“Telestack”) for a total purchase
price of $36,183. The purchase price was paid in cash with $2,500 deposited into escrow for a period of time not to
exceed one year and was subject to certain post-closing adjustments. The post-closing adjustments were finalized
during the first quarter of 2015 resulting in a decrease in the purchase price of $178. The adjusted purchase price
allocation includes the recognition of $18,078 of goodwill and $14,445 of other intangible assets based on the
foreign exchange rate as of the acquisition date, consisting of trade names (15 year useful life), patents (5 to 10
year useful lives), non-compete agreements (3 year useful life) and customer relationships (11 year useful life).
Telestack’s operating results are included in the Aggregate and Mining Group beginning in the second quarter of
2014.
90
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollar and share amounts in thousands, except per share amounts unless otherwise specified)
Telestack, located in Omagh, Northern Ireland, began operations in 1999 and specializes in the complete in-house
design, manufacture, installation and commissioning of a complete line of material handling systems used
extensively in the port, aggregate and mining industries. Telestack markets its products throughout the world by a
combination of direct sales and distribution through dealers. The Company anticipates the synergies between
Telestack and the Company’s existing aggregate and wood pellet product lines will benefit both companies.
91
Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100 Performance Graph
for Astec Industries, Inc.
300.00
250.00
200.00
150.00
100.00
50.00
0.00
Astec Industries Inc
NYSE/AMEX/NASDAQ
Market (US Companies)
NYSE/AMEX/NASDAQ
Stocks (SIC 3530-3537 US
Comp) Construction, Mining,
and Materials Handling
Machinery and Equipment
2010
100.00
2011
99.38
2012
106.84
2013
124.80
2014
128.28
2015
134.15
100.00
100.91
117.28
156.58
175.43
174.57
100.00
93.91
92.81
110.50
99.64
74.42
Notes:
A. Data complete through last fiscal year.
B. Corporate Performance Graph with peer group uses peer group only performance (excludes
only company).
C. Peer group indices use beginning of period market capitalization weighting.
D. Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved
Copyright 1980-2016.
E. Calculated (or Derived) based from CRSP NYSE/AMEX/NASDAQ Market (US Companies),
Center for Research in Security Prices (CRSP®), Graduate School of Business, The University
of Chicago. Copyright 2016. Used with permission. All rights reserved.
F. The graph assumes $100 invested at the closing price of the Company’s common stock on
December 31, 2010 and assumes that all dividends were invested on the date paid.
92
OTHER INFORMATION
Transfer Agent
Computershare
250 Royall Street, Canton, MA 02021
800.617.6437
www.computershare.com/investor
Stock Exchange
NASDAQ, National Market—ASTE
Auditors
KPMG LLP, Knoxville, TN
General Counsel and Litigation
Chambliss, Bahner & Stophel, P.C.,
Chattanooga, TN
Securities Counsel
Alston & Bird LLP, Atlanta, GA
Investor Relations
Stephen C. Anderson,
423.553.5934
Corporate Office
Astec Industries, Inc.
1725 Shepherd Road,
Chattanooga, TN 37421
Ph 423.899.5898(cid:2)Fax 423.899.4456
www.astecindustries.com
The form 10-K, as filed with the
Securities and Exchange Commission,
may be obtained at no cost by any
shareholder upon written request to
Astec Industries, Inc., Attention
Investor Relations.
The Company’s Code of Conduct is
posted at www.astecindustries.com.
The Annual Meeting will be held on
April 28, 2016 at 10:00 A.M., EST in
the Training Center of Astec, Inc.
located at 4101 Jerome Avenue,
Chattanooga, TN 37407.
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Corporate Headquarters:
1725 Shepherd Road
Chattanooga, Tennessee 37421 USA
Tel: 423.899.5898 • Fax: 423.899.4456
www.astecindustries.com