Segment Information |
Segment InformationThe Company has two reportable segments, each of which comprise sites based upon the nature of the products or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations. Based on a review of these factors, the Company's India and Thailand sites have changed reportable segments beginning January 1, 2022. The India site was previously incorporated into the Materials Solutions segment and has moved to the Infrastructure Solutions segment while the Thailand site, which was previously included in the Infrastructure Solutions segment, has moved to the Materials Solutions segment.
Beginning January 1, 2022, the measure of segment profit or loss used by the Company's Chief Executive Officer, whom is determined to be the chief operating decision maker ("CODM"), to evaluate performance and allocate resources to the operating segments changed to Segment Operating Adjusted EBITDA. Segment Operating Adjusted EBITDA, a non-GAAP financial measure, is defined as net income or loss before the impact of interest income or expense, income taxes, depreciation and amortization and certain other adjustments that are not considered by the CODM in the evaluation of ongoing operating performance. The Company's presentation of Segment Operating Adjusted EBITDA may not be comparable to similar measures used by other companies and are not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented.
Prior periods have been revised to reflect both the segment composition change and the segment profit or loss metric noted above for comparability.
During the first quarter of 2022, the Company revised the allocation of certain of its functional expenses between the Corporate category and the reportable segments primarily related to the Company's annual incentive compensation. Prior periods have not been revised for this change.
A brief description of each segment is as follows:
Infrastructure Solutions – The Infrastructure Solutions segment comprises 11 active sites and designs, engineers, manufactures and markets a complete line of asphalt plants, concrete plants and their related components and ancillary equipment as well as supplying other heavy equipment. The sites based in North America within the Infrastructure Solutions segment are primarily manufacturing operations while those located outside of North America service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of the Company's manufacturing sites. The primary purchasers of the products produced by this segment are asphalt producers, highway and heavy equipment contractors, ready mix concrete producers, contractors in the construction and demolition recycling markets and domestic and foreign governmental agencies.
Materials Solutions – The Materials Solutions segment comprises nine active sites and designs and manufactures heavy processing equipment, in addition to servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets. The sites within the Materials Solutions segment are primarily manufacturing operations with the AME and Thailand sites functioning to market, service and install equipment and provide parts in the regions in which they operate for many of the products produced by all of the Company's manufacturing sites. Additionally, the Materials Solutions segment offers consulting and engineering services to provide complete "turnkey" processing systems. The principal purchasers of aggregate processing equipment include distributors, highway and heavy equipment contractors, sand and gravel producers, recycle and crushing contractors, open mine operators, quarry operators, port and inland terminal authorities, power stations and foreign and domestic governmental agencies.
Corporate and Other – The Corporate and Other category consists primarily of the parent company, the Company's captive insurance company, Astec Insurance, and the controls and automation business, which do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the other reporting segments. The parent company and the captive insurance company provide support and corporate oversight for all of the sites. The controls and automation business manufactures hardware and software products that are marketed independently as well as included in certain products of the Company's other segments.
The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers between foreign subsidiaries are valued at prices comparable to those for unrelated parties. Segment Information:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2022 | | Three Months Ended June 30, 2021 | (in millions) | Infrastructure Solutions | | Materials Solutions | | Corporate and Other | | Total | | Infrastructure Solutions | | Materials Solutions | | Corporate and Other | | Total | Revenues from external customers | $ | 209.6 | | | $ | 107.4 | | | $ | 1.2 | | | $ | 318.2 | | | $ | 179.8 | | | $ | 97.8 | | | $ | — | | | $ | 277.6 | | Intersegment sales | 4.0 | | | 12.0 | | | — | | | 16.0 | | | 2.2 | | | 5.1 | | | — | | | 7.3 | | Segment Operating Adjusted EBITDA | 15.9 | | | 9.5 | | | (12.3) | | | 13.1 | | | 16.5 | | | 15.9 | | | (11.9) | | | 20.5 | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2022 | | Six Months Ended June 30, 2021 | (in millions) | Infrastructure Solutions | | Materials Solutions | | Corporate and Other | | Total | | Infrastructure Solutions | | Materials Solutions | | Corporate and Other | | Total | Revenues from external customers | $ | 407.1 | | | $ | 201.1 | | | $ | 1.2 | | | $ | 609.4 | | | $ | 381.3 | | | $ | 180.7 | | | $ | — | | | $ | 562.0 | | Intersegment sales | 5.1 | | | 21.7 | | | — | | | 26.8 | | | 2.9 | | | 10.8 | | | — | | | 13.7 | | Segment Operating Adjusted EBITDA | 32.3 | | | 21.7 | | | (22.1) | | | 31.9 | | | 42.7 | | | 25.6 | | | (26.9) | | | 41.4 | |
A reconciliation of total segment profit to the Company's consolidated totals is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | (in millions) | 2022 | | 2021 | | 2022 | | 2021 | Reconciliation to total consolidated net (loss) income attributable to controlling interest | | | | | | | | Segment Operating Adjusted EBITDA | $ | 13.1 | | | $ | 20.5 | | | $ | 31.9 | | | $ | 41.4 | | Adjustments: | | | | | | | | Transformation program | (6.4) | | | (2.1) | | | (11.7) | | | (5.3) | | | | | | | | | | Facility closures and reduction in force | (0.4) | | | (0.8) | | | (1.4) | | | (1.6) | | Asset impairment | (3.0) | | | (0.2) | | | (3.0) | | | (0.2) | | Gain on sale of property, equipment and business, net | — | | | 0.2 | | | — | | | 0.3 | | Transaction costs | (0.8) | | | — | | | (1.4) | | | — | | Interest expense, net | (0.4) | | | — | | | (0.6) | | | (0.1) | | Depreciation and amortization | (6.9) | | | (7.5) | | | (13.6) | | | (15.1) | | Income tax benefit (provision) | 0.8 | | | (2.1) | | | (0.1) | | | (2.9) | | | | | | | | | | Recapture of intercompany profit | 0.1 | | | 0.3 | | | 0.1 | | | 0.3 | | Total consolidated net (loss) income attributable to controlling interest | $ | (3.9) | | | $ | 8.3 | | | $ | 0.2 | | | $ | 16.8 | |
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