Hello and welcome to the Astec Industries Fourth Quarter and Full Year 2024 Earnings Call. As a reminder, this conference call is being recorded. It is my pleasure to introduce to your host, Steve Anderson, Senior Vice President of Administration and Investor Relations. Mr. Anderson, you may begin.

Thank you. Good morning, everyone. For your information, a copy of our press release and presentation are posted on our website under the Investor Relations tab at www.astecindustries.com. Joining me on today's call are, Jaco van der Merwe, Chief Executive Officer and Brian Harris, Chief Financial Officer. In just a moment, I'll turn the call over to Jaco to provide his comments and then Brian will summarize our financial results. Turning to Slide 2, I'll remind you that our discussion this morning may contain forward-looking statements that relate to the future performance of the company. Any statements are intended to qualify for the Safe Harbor liability established by the Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions. Factors that can influence our results are highlighted in today's financial news release and others are contained in our filings with the US Securities and Exchange Commission. As usual, we ask that you familiarize yourself with those factors. In an effort to provide investors with additional information regarding the company's results, the company refers to various US GAAP and non-GAAP financial measures, which management believes provide useful information to investors. These non-GAAP measures have no standardized meaning prescribed by US GAAP and are therefore unlikely to be comparable to the calculation of similar measures for other companies. Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. A reconciliation of GAAP to non-GAAP results are included in our news release in the appendix of our slide presentation. And now turning to Slide 3. I will turn the call over to Jaco.

Thank you, Steve. Good morning, everyone, and thank you for joining us. Moving to Slide 4. I am pleased to report we delivered quarterly records for net sales, adjusted net income and adjusted EBITDA. The fourth quarter is typically one of the strongest quarters of the year. This year, we benefited from several of our continuous process improvement initiatives. Strong net sales for the quarter were primarily driven by capital equipment and aftermarket parts in our Infrastructure Solutions segment. Demand for asphalt and concrete plants has remained healthy, and we are encouraged by the level of quoting activity. Capital equipment sales in our Material Solutions segment continued to be challenged by high interest rates and further dealer inventory destocking activity. On a positive note, quarterly aftermarket parts sales remained stable throughout 2024. This confirms the feedback we have received from our customers and dealers about being busy and having a lot of work on their books. At a recent meeting with our Material Solutions dealers, the vast majority stated December was a record month. Both they and we expect channel inventory levels to be nearing the end of the rightsizing phase that has been taking place over the past two years. Our Material Solutions dealers have seen further destocking activity in January, which supports our view of a stronger second half of 2025. Full year net sales were relatively flat at $1.3 billion. We saw strong capital equipment demand in our Infrastructure Solutions segment, partially offset by lower equipment sales in Material Solutions. Aftermarket parts were stable in both the Infrastructure Solutions and Materials Solutions segments. Backlog moderated due to strong invoicing of asphalt and concrete plant equipment and the previously discussed delays in dealers placing restocking orders. Adjusted EBITDA of $47.9 million increased 47% in the fourth quarter, and…

Thank you, Jaco, and good morning. Our fourth quarter and full year financial results are highlighted on slide 10. As Jaco mentioned, we had record net sales for the quarter due to increased demand for capital equipment and aftermarket parts. Adjusted EBITDA and adjusted EBITDA margins benefited from favorable volume, pricing and mix. Adjusted earnings per share of $1.19 for the fourth quarter was a record as well. Full year adjusted EBITDA dollars and adjusted EBITDA margins grew slightly as favorable pricing was mostly offset by volume mix, manufacturing inefficiencies and the impact of inflation. The full year earnings per share decline was primarily driven by the impact of increased income tax, interest and other expenses. Moving on to the Infrastructure Solutions segment, shown on slide 11. We saw higher net sales for the quarter due to strong domestic capital equipment performance and moderate increases in aftermarket parts sales. For the year, net sales increased $37 million or 4.6%. Segment operating adjusted EBITDA dollars and adjusted EBITDA margins were affected positively by volume, pricing and operational excellence initiatives and expense management. It was noteworthy that the performance in Q4 delivered record EBITDA margin of 21.3%, reflecting strong execution of our plans. The Materials Solutions segment is shown on slide 12. Adjusted EBITDA dollars and margins were negatively impacted for the quarter and year by lower capital equipment sales resulting from the previously mentioned influence of high interest rates and dealer destocking. Aftermarket parts sales were relatively flat, albeit at healthy levels. The negative impact of lower sales volumes was mitigated by effective cost control. Moving on to Slide 13. To the fourth quarter adjusted EBITDA bridge, we were pleased to report an adjusted EBITDA of $47.9 million, a 46.9% increase over Q4 2023. Favorable volume, pricing and mix were the…

Thank you, Brian. Turning to investment highlights on Slide 15. Astec continues to be a trusted source of globally recognized brands and high-quality solutions for our customers. Overall, customers and dealers have steady expectations for 2025 with second half tailwinds expected. I was encouraged by the recent World of Concrete trade show and National Asphalt Pavement Association annual meetings. Attendance at both events was strong. Many of our Material Solutions dealers have told us they experienced a very strong December. As a result, their inventories have been reduced, but are still at elevated levels in some pockets of the market. January saw further inventory reductions. However, lingering concerns over the pace of interest rate reductions continue to be a factor. Our operational excellence efforts continue to gain traction. They are beginning to pay off and have many benefits yet to come. Manufacturing and procurement efforts are driving efficiencies, and we are seeing signs of improved adjusted EBITDA trends beginning to emerge. We are excited about our growth drivers, which include our innovative pipeline of new products, a stable and growing recurring aftermarket parts business, multiyear federal and state funding for interstates and highways, expansion opportunities in current and future international markets and inorganic growth opportunities that are strategically aligned and meet our financial criteria, a strong balance sheet, which provides the ability to fund growth. I am proud of the great work our teams are doing and appreciate their efforts. With that, operator, we are now ready to take questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. Your first question comes from the line of Steve Ferazani of Sidoti & Company. Please go ahead.

Good morning. This is Alex on for Steve. Thanks for taking the questions.

Hi. Good morning, Alex.

Hi. Good morning, guys. In the prepared remarks, you touched on manufacturing inefficiencies. Could we talk a little bit about some of the progress you've made and maybe what's still to come?

Yes, absolutely. I mean if you look at the EBITDA bridges of the last few quarters, you've seen a steady improvement in that. And in fact, if you look at the Q4 inefficiencies, it's been one of the lowest we've had in quite a while. Now Q4 is typically an interesting quarter because we have quite a bit of vacation days off. We also typically count inventory across the company. The teams this year have done a really good job improving our counting efficiencies, and we've seen a significant improvement in the amount of days that we've lost for counting. So we still have more work to do. But as I said, Alex, if you go back over the last few quarters, you can see that the teams have done a really good job driving that inefficiencies lower quarter-over-quarter.

Thank you. Appreciate the color there. And then if we could touch on backlog. I'm trying to understand what do you consider a normalized level for Infrastructure Solutions at this point? And do you have any concerns about the lower level? And even if you have concrete asphalt deliveries scheduled for all 2025? Just sort of trying to get a sense of how that evolves.

Yes, for sure. Maybe I'll just start a little bit with feedback from the market here, the first six weeks. We've had a very busy travel schedule. As I mentioned in the prepared remarks, we met with our dealers. We attended World of Concrete, NAPA. And overall, we get some cautious optimism from our customer base. And on the dealer side, specifically, the MS dealers, we've had a strong December for converting inventory to sales, and then another significant reduction here in January. So from that point of view, there's a lot of positive signs. From the Infrastructure Solutions side, there's two pieces to that business. We, obviously, have the asphalt and concrete plant side of the business. And then we have the mobile equipment that is our mobile road construction and forestry part. And the mobile equipment here in the IA side is experiencing the same pressure that what we see on the material solutions side. So if we strip the development of that equipment out in the backlog, the backlog for asphalt and concrete plant equipment remains really good. I will say on the concrete side, we are now delivering in quite a few of our product lines, third, fourth quarter this year. And on the asphalt side, we've actually seen some really nice order intake here in the first six weeks of the year already. So I'm not concerned about the Infrastructure Solutions side. As I mentioned, the plant business overall is still pretty strong.

Great context. Thank you very much. That’s all from us.

Your next question comes from the line of Brian Sponheimer of Gabelli Asset Management. Please go ahead.

Hi, good morning, everyone. A lot of improvement here, which is great to see. I'm just -- I am curious, given the -- you mentioned the political climate with tariffs, how important would the reinstitution of bonus depreciation at 100% be for you to see orders and backlog turn around, if that's something that…?

Yeah, absolutely. Actually, when we went to the Hill Of Austria as part of the trade association visit there and those were both topics that we raised, because, especially for our smaller customers, those are really important. So, yeah, that will be a great one if those can be re instituted, and as I say, especially for our smaller customer base.

Yeah. No, I think so too. I guess, if we're thinking about the mobile market and interest rates have been something that have mattered greatly over the past two years, how much delta is there between what you would consider to be an interest rate environment that would be beneficial to one that's restrictive? Is it 200 basis points? Is it less than that?

Yes, Brian, I actually have a different view on that. I think the customer base stay conservative with buying because of the elevated interest rates. The challenge is that equipment have been used right through that time, and that just means equipment is getting older and older. So, the conversions we've seen in December and the conversions we've seen here in January, I mean, to me, that's a bit of a sign that people have now learned to deal with the higher interest rates, and they don't have much of a choice to actually start to replace. But we heard from our dealers that higher interest rates obviously created some challenges for them last year, but we cannot sit on the sidelines forever. Otherwise, equipment will just be too old.

Yes, understood. Well, thank you very much for having me on and best of wishes for a successful 2025.

Thank you.

There are no further questions at this time. With that, I will now turn the call back over to Steve Anderson for final closing remarks. Please go ahead.

All right. Thank you, Kelvin. I'd like to remind everyone that Astec will be displaying products at the World of Asphalt AGG1 Trade Show in St. Louis, Missouri on March 25th through 27th. If you attend the show, please stop by our booth and say hello. We do appreciate your participation on our conference call this morning and thank you for your interest in Astec. As today's news release states, this conference call has been recorded. A replay of the conference call will be available through March 12th and an archived webcast will be available for 90 days. The transcript will be available under the Investor Relations' section of the Astec Industries website within the next five business days. This concludes our call, but I'm happy to connect with any of you if you have additional questions later on. So, thank you all. Have a good day.