Company: ASTE
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000792987-25-000013
Chunk: 323

Company: ASTEC INDUSTRIES INC
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7A
Chunk 323
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 to hedge a transaction, the subsidiary enters into a foreign currency exchange contract. We do not apply hedge accounting to these contracts and, therefore, recognize the fair value of these contracts in the Consolidated Balance Sheets and the change in the fair value of the contracts in current earnings.

A 10% fluctuation in foreign exchange rates throughout 2024 would have resulted in an impact of $17.7 million and $2.0 million to "Net sales" and "Net income (loss) attributable to controlling interest", respectively, in our Consolidated Statements of Operations for the year ended December 31, 2024.

Commodity Risk

We purchase raw materials and some manufactured components and replacement parts for our products from leading suppliers both domestically and internationally. Raw materials used in the manufacture of our products include carbon steel, pipe and various types of alloy steel, which are normally purchased from distributors and other sources. The majority of steel is scheduled on a just in time arrangement from suppliers to better manage inventory requirements at our manufacturing facilities. Based on market dynamics, we strategically and selectively order and inventory certain items beyond a just in time basis.

The most significant component of our inventory is steel. We anticipate that steel prices will increase during 2025, including as a result of the tariffs on all steel imports recently imposed by the Trump administration and other trade policies implemented by the U.S. and foreign governments. Significant increases in the market price of steel can negatively impact our gross profit as we are often unable to pass along all of these price increases to our customers. A significant decline in the market price of steel could result in a decline in the market value of our equipment or parts. We utilize strategies that include forward-looking contracts and advanced steel purchases to ensure supply and minimize the impact of price volatility. 

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