Company: ASTE
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000792987-25-000029
Chunk: 11

Company: ASTEC INDUSTRIES INC
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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29.8% effective tax rate. The income tax expense for three months ended March 31, 2025 was higher compared to the same period in 2024, primarily due to higher pretax book income and changes in the relative weighting of jurisdictional income and loss.

10

The Company's recorded liability for uncertain tax positions was $17.0 million and $16.8 million as of March 31, 2025 and December 31, 2024, respectively. The increase is the result of $0.2 million of incremental reserves associated with a research and development credit generated during 2025. The Company does not anticipate a significant change in unrecognized tax benefits due to the expiration of relevant statutes of limitations and federal, state, and foreign tax audit resolutions over the next twelve months.The Company regularly assesses the likelihood of an adverse outcome resulting from examinations to determine the adequacy of its tax reserves. The Company is currently under audit by the U.S. Internal Revenue Service for the federal income tax return from the 2018 tax year as well as various other state income tax and jurisdictional audits. As of March 31, 2025, the Company believes that it is more likely than not that the tax positions it has taken will be sustained upon the resolution of its audits, resulting in no material impact on its consolidated financial position, results of operations and cash flows. However, the final determination with respect to any tax audits, and any related litigation, could be materially different from the Company's estimates and/or from its historical income tax provisions and accruals and could have a material effect on operating results and/or cash flows in the periods for which that determination is made. In addition, future period earnings may be adversely impacted by litigation costs, settlements, penalties and/or interest assessments.

Note 7. Commitments and Contingencies

Certain customers have financed purchases of Company products through arrangements with third-party financing institutions in which the Company is contingently liable for customer debt of $1.6 million and $1.4 million as of March 31, 2025 and December 31, 2024, respectively. These arrangements expire at various dates through March 2030. The agreements provide that the Company will receive the lender's full security interest in the financed equipment if the Company is required to fulfill its contingent liability under these arrangements. The Company has recorded a liability of $0.3 million related to these guarantees as of both March 31, 2025 and December 31, 2024