Astec Industries Inc

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition or future results. Other than as described below, there have been no material changes from the risk factors previously disclosed therein. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2024 and in this Quarterly Report on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially and adversely affect our business, financial condition or operating results.

We may not complete tfail to realize all of the anticipated benefits of the acquisition of TerraSource Holdings, LLC ("TerraSource") or complete the acquisition within the time frame we those benefits may take longer to realize than expected. We may also encounter significanticipate; difficulties in integrating the acquiredTerraSource business may underperform. Our relative to our expectsults of operations; the acquisition may cause our going forward may differ materially from any pro forma financial results to differ fromdata provided.

On July 1, 2025 we completed our expectapreviously announced acquisitions or the expectations of TerraSource for $245.0 million. The success of the investment community; we may not bacquisition will depend, in large part, on our ability to successfully combine and integrate the able to achievcquired business and realize the anticipated cbenefits, including synergies, cost savings or other, innovation opportunities anticipated benefitsd operational efficiencies from the acquisition.

The compleintegration of the acquisition of TerraSource is subject to a number of conditions. The failure to satisfy all of the required condired business is a complex, costly and time-consuming process and may result in material challenges, including, without limitation:

difficulties in retaining current customers, suppliers and strategic partners and developing new business relationships;

challenges in retaining and assimilating key personnel;

coordinating geographically overlapping organizations could delay the;

unanticipated issues in integrating information technology, complemunications and other operation of the acquisition or prevent its and systems;

diversion of management's attention to integration matters;

difficulties in achieving anticipated synergies, business opportunities and growth prospects from occurrthe TerraSource acquisition;

difficulties in conforming at all. Furtstandards, controls, procedures and accounting and othermore, we expect to incur significant i policies, business cultures and compensation structures;

difficulties in managing the expandebtedness in connection withd operations of a significantly larger and more complex company;

the impact of potential liabilities the acquisCompany may be inherition ofng from TerraSource, which could have a ma;

difficulty addressing possible differences in corporate culture and management philosophies;

a potential deterial adverse efforation of the Company's credit ratings; and

unforeseen or unexpect on our finaned expenses or delays associal positited with the integration.

The successMany of these factors are outside of our control and any one of the acquisition will depend, in part, on our ability to succm could result in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy, which could adversely affect our businessfully, financial combinendition and integrate results of operations and result in us becoming subject to litigation. In addition, even if the acquiredTerraSource business and realizeis integrated successfully, the full anticipated benefits of the acquisition of TerraSource may not be realized, including the synergies, cost savings, innovation o or sales or growth opportunities and operational efficiencies from the acquisition. If we are unable tothat are anticipated. These benefits may not be achieved within the anticipated time frame, or at all. Further, additional unanticipated costs may be incurred in the integration process. All of these factors could cause reductions in our earnings per share, decrease or delay the expected achiecretive these objeceffect of TerraSource and negatives withinly impact the anticipateprice of shares of our common stock. As a result, it cannot be assured time frame, or at all, hat the acquisition of TerraSource will result in the realization of the full anticipated benefits may not be realiz.

Additionally, in connection with the TerraSource acquisition, any unaudited fulpro forma financial data that may be provided is not necessarily oindicative of what our at all, orctual financial position or results of operations may take longer to realize than expecbe. Any unaudited pro forma financial data will be derived from our audited and unaudited financial statements and TerraSources audited, and the value of our common stounaudited financial statements and will reflect certain assumptions and adjustments. The assumptions used in preparing unaudited pro forma

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financk ial data may decline.

The integration of the acquired businenot prove to be accurate, and other factors may adversely affect our financial condition or results of operations.

Our existing and future levels of indebtedness may result could adversely affect our financial health, our ability to obtain material challefinancing in the future, our ability to react to changes, including, without limit our business and our ability to fulfill our obligations under such indebtedness.

On July 1, 2025 and simultaneously with the consummation:

W of the and cquisition of TerraSource must obtain certain regulatory approvals and clearances to complete , we entered into a new Credit Agreement, by and among us, as borrower, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto from time to time (the acquisition, which, if delayed, not granted or granted with unaccept"2025 Credit Agreement"), that provides for (i) a revolving credit facility, a term loan facility, a swingline facility and a letter of credit facility, in an initial aggregate amount of up to $600.0 million, and (ii) an incremental facilities limit in an aggregate amount not to exceed $150.0 million (collectively, the "2025 Credit Facilities"). In connection with estable coishing the 2025 Credit Facilities, we (i) repaid all outstanditions, could preveng borrowings under our prior $250.0 million revolving credit facility pursuant to that certain Credit Agreement, substantially delay or impair codated as of December 19, 2022, between the Company and Wells Fargo Bank, National Association (the "2022 Credit Facility"), utilizing borrowings under the 2025 Credit Facilities, and (ii) terminated the 2022 Credit Facility.

As of July 1, 2025 and after giving effect to the completion of the acquisition, result in ad of TerraSource and the borrowings under the 2025 Credition Facilities, we had outstanding principal expendituresindebtedness of money$350.0 million and resources or availability of $244.8 million under the 2025 Creduce the anticipated benefits of the acquisiit Facilities, subject to certain financial covenants. Our level of indebtedness could:

make it more difficult to satisfy our obligation;

the acquisition,s with respect to our other indebtedness, resulting including uncertainty regarding th possible defaults on and acceleration of such indebtedness;

require us to dedicate acquisi substantial portion, may cause customers, suppliers or strategic partners to delay or defer decisi of our cash flow from operations to the payment of principal and interest on our indebtedness, thereby reducing the availability of such cash flows to fund working capital, acquisitions, capital expenditures and other general corporate purposes;

limit our ability to obtain additional financing for working capital, acquisitions concerning u, capital expenditures, debt service requirements and TerraSource, and may adversely affect eaother general corporate purposes;

limit our ability to refinance indebtedness or cause the associated costs of such companys refinancing to increase;

increase our vulnerability to effectively manage its general adverse economic and industry conditions, including interespective businesses;

failuret rate fluctuations (because a portion of our borrowings are at variable rates of interest); and

place us at a competitive disadvantage compared to motivother companies with proportionate and retain key personnel could diminish ly less debt or comparable debt at more favorable interest rates who, as a result, may be better positioned to withstand economic downturns.

Any of the anticipated benefits of thforegoing impacts of our level of indebtedness could have acquisi material adverse effect on our business, financial condition;

 and results of operations.

Furthe possibility of significant costs involved rmore, our future access to debt capital markets to finance existing debt obligations or to obtain connection wiapital to finance growth completing the acquisitionuld become restricted due to a variety of factors, including costs to achieve expa deterioration of our performance or financial condition, overall industry prospected sys or changes in debt capital markets or the genergies;

coordal economy. The inating geographically overlapping organizability to access credit markets on acceptable terms, if at all, could have a material adverse effect on our financial conditions;

unanticipated issue and ability to fund future growth.

Additionally, our debt instruments in integrating infoclude certain affirmation technology,ve and negative covenants that require us to communicationply with certain financial covenants and other systems; and

unforeseen expenses or delayimpose restrictions on our financial and business operations, including limitations on liens, indebtedness, fundamental changes associated nd changes in the nature of our business. A failure to comply with the acquisitcovenants contained in our debt instruments could result in an event of default or an acceleration of debt under our debt instruments.