Astec Industries Inc. reported third‑quarter 2025 results that surpassed consensus expectations, with adjusted earnings per share of $0.47 versus the $0.45 forecast and net sales of $350.1 million beating the $336.0 million estimate. Adjusted EBITDA rose to $27.1 million, a 55.7% year‑over‑year increase, while the company posted a net loss of $4.2 million, an improvement from the $6.2 million loss in the same quarter last year.
Revenue growth of 20.1% was driven by a 17.1% increase in Infrastructure Solutions sales to $193.2 million and a 24.1% jump in Materials Solutions sales to $156.9 million, the latter largely attributable to the July 1 acquisition of TerraSource Holdings. The acquisition added more than $150 million in annual revenue and a high‑margin aftermarket parts business, reinforcing Astec’s Materials Solutions segment.
Adjusted EBITDA margin expanded to 7.7%, up 170 basis points from the prior year, reflecting a favorable shift toward higher‑margin Materials Solutions products and disciplined input‑cost controls. The margin lift offsets the impact of the acquisition’s one‑time charges, which totaled $14.5 million—$8.3 million in transaction costs and $6.2 million in intangible amortization—explaining the net loss despite strong operating performance.
Management raised the lower end of its full‑year adjusted EBITDA guidance to $132 million, up from $123 million, while the top end remains at $142 million. The adjustment signals confidence that the TerraSource contribution of $13–$17 million in adjusted EBITDA in the second half of 2025 will be realized and that the company’s cost‑control initiatives will continue to support profitability.
The TerraSource deal, completed for $245 million (net $230 million after tax benefits), is expected to be accretive from day one and to deliver $10 million in synergies by the end of 2026. The acquisition expands Astec’s product portfolio with crushing, screening, and separation equipment and opens new customer bases in the road construction and aggregate markets.
Market reaction to the earnings was muted, with investors weighing the net loss and a 5.5% year‑over‑year decline in backlog, particularly in the Infrastructure Solutions segment, against the company’s strong revenue and margin performance.
CEO Jaco van der Merwe said the quarter demonstrated “consistent profitability and growth” and highlighted the successful integration of TerraSource. CFO Brian Harris noted that the acquisition costs of $8.3 million in transaction expenses and $6.2 million in intangible amortization were the primary drivers of the net loss, underscoring the company’s focus on disciplined capital allocation.
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