Astec Q3 Adjusted EBITDA Falls 30% as Backlog Rises 49%

Astec Industries (NASDAQ: ASTE) reported nearly flat third-quarter 2026 sales but a sharp decline in adjusted profitability as inflation and the timing of asphalt plant orders weighed on results. Backlog rose 49.2% year over year to $670.5 million, indicating healthy demand across both operating segments, while the company set full-year adjusted EBITDA guidance at $140 million to $150 million.

Net sales increased 0.7% to $352.4 million from $350.1 million a year earlier. Adjusted EBITDA fell 30.3% to $18.9 million, and the adjusted EBITDA margin contracted 230 basis points to 5.4%. Adjusted earnings per share were a loss of $0.01, compared with earnings of $0.47 per share in the prior-year quarter.

Astec attributed the lower adjusted EBITDA to a pause in asphalt plant orders earlier in the year and inflation in materials, labor and overhead. The company also said macroeconomic pressures and inflation affected the timing of expected benefits from the TSG business acquired in July 2025.

For the trailing 12 months ended Sept. 30, net sales rose 13.8% to $1.56 billion. Adjusted EBITDA declined 5.1% to $136.6 million, with the margin narrowing to 8.8% from 10.5%. Trailing-12-month adjusted EPS decreased to $2.53 from $3.50.

Segment performance diverges

Infrastructure Solutions generated third-quarter sales of $189.0 million, down 2.2% year over year. Segment operating adjusted EBITDA declined 36.0% to $15.3 million, while the corresponding margin fell to 8.1% from 12.4%.

Astec said demand for asphalt and concrete equipment remained solid despite the delayed renewal of the federal highway bill. However, selected asphalt plant orders shifted to deliveries in the fourth quarter of 2026 and first quarter of 2027, while inflation pressured margins.

Materials Solutions sales increased 4.1% to $163.4 million, supported by steady demand for aggregate crushing and screening equipment and aftermarket products and services. Segment operating adjusted EBITDA decreased 9.7% to $13.9 million, and the margin contracted 130 basis points to 8.5%.

Parts and service sales across the company edged up 0.3% to $125.8 million. The category represented 35.7% of quarterly sales and 35.2% of year-to-date sales, remaining within the company’s stated historical range of 33% to 35% of total revenue.

Backlog expands across both businesses

Astec’s quarter-end backlog increased by $221.0 million from a year earlier to $670.5 million. Infrastructure Solutions backlog rose to approximately $382 million from $260 million, while Materials Solutions backlog increased to about $289 million from $190 million.

Consolidated implied orders were $422 million, producing a book-to-bill ratio of 120%. Infrastructure Solutions recorded $282 million of implied orders and a 149% book-to-bill ratio. Materials Solutions had $140 million of implied orders and an 86% ratio, reflecting a weaker quarterly order level than in the preceding period.

Management expects infrastructure investment and data-center construction to support multi-year demand for aggregates. The company also identified new products, recurring parts and service revenue, digital offerings, international expansion and selective acquisitions as longer-term growth priorities.

Cash generation and outlook

Operating activities provided $17.4 million of cash during the quarter, and Astec reported positive free cash flow, which it attributed to working-capital management. At Sept. 30, the company had $63.2 million of cash and equivalents and $204.0 million of available credit, for total liquidity of $267.2 million.

Net debt was approximately 2.3 times trailing-12-month adjusted EBITDA, within Astec’s target range of 1.5 to 2.5 times. The company said it remained in compliance with all covenants under its $250 million revolving credit facility.

Astec’s outlook remains subject to inflation, broader macroeconomic conditions and uncertainty surrounding federal infrastructure funding. The federal highway bill expired Sept. 30, 2026, although a continuing resolution extended it through Dec. 11, giving lawmakers additional time to pursue longer-term reauthorization or another extension. The company also cautioned that actual results could differ from its expectations because of economic, industry and operational risks.