Company: ASTE
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000792987-25-000064
Chunk: 37

Company: ASTEC INDUSTRIES INC
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 37
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 of incremental international revenue from the acquired TerraSource business.

Gross Profit

Gross profit for the third quarter of 2025 was $84.2 million, or 24.1% of net sales, as compared to $66.8 million, or 22.9% of net sales, for the third quarter of 2024, an increase of $17.4 million, or 26.0%. The increase in gross profit was primarily driven by the impact of favorable pricing coupled with net favorable volume and mix of $37.9 million. This increase was partially offset by (i) manufacturing inefficiencies of $10.6 million, (ii) amortization of acquisition-related inventory fair value step-up of $4.3 million, (iii) net unfavorable inventory adjustments of $2.9 million and (iv) higher warranty program costs of $1.6 million.

Gross profit for the first nine months of 2025 was $264.9 million, or 26.2% of net sales, as compared to $225.0 million, or 23.8% of net sales, for the first nine months of 2024, an increase of $39.9 million, or 17.7%. The increase in gross profit was primarily driven by the impact of favorable pricing coupled with net favorable volume and mix of $59.8 million and the favorable impact of changes in manufacturing input costs related to materials, labor and overhead of $3.3 million. These increases were partially offset by (i) manufacturing inefficiencies of $8.9 million, (ii) higher warranty program costs of $5.3 million, (iii) amortization of acquisition-related inventory fair value step-up of $4.3 million and (iv) net unfavorable inventory adjustments of $2.8 million.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $83.3 million or 23.8% of net sales, for the third quarter of 2025, compared to $65.6 million, or 22.5% of net sales, for the third quarter of 2024, an increase of $17.7 million, or 27.0%, primarily due to (i) increased personnel-related costs of $7.3 million, (ii) increased intangible asset amortization expense of $5.1 million, (iii) increased transaction costs of $3.9 million primarily attributable to the Acquisition, (iv) the $1