Thank you, Doug. Good morning and welcome to the Astec Industries conference call for the fourth quarter and fiscal year ended December 31, 2019. As Doug stated, my name is Steve Anderson, and also on today's call are Barry Ruffalo, our Chief Executive Officer; and Becky Weyenberg, our Chief Financial Officer. In just a moment, I'll turn the call over to Barry to provide comments, and then, Becky will summarize our financial results. Before we begin, I'll remind you that our discussion this morning may contain forward-looking statements that relate to the future performance of the company, and these statements are intended to qualify for the Safe Harbor liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions. Factors that could influence our results are highlighted in today's financial news release and others are contained in our annual report and our filings with the SEC. As usual, we ask that you familiarize yourself with those factors. You should also note that, comments made during the call today will refer to the non-GAAP results and a reconciliation of the GAAP to non-GAAP results are included in our news release and our slide deck. So at this point, I'll turn the call over to Barry.

Thank you, Steve. Good morning, everyone and thank you for joining us on the call this morning to discuss our fourth quarter and full year 2019 results. I'm joined here with our new CFO, Becky Weyenberg. I'll start off by providing a high level summary of our quarterly results and an update on macro trends, and then turn the call over to Becky for financial details of the quarter. I'll then return to provide an update on our strategic transformation progress, and then open the call up for Q&A. Overall, fourth quarter results continue to delay capital spending of our customers in North America which was up -- which was partially offset by an increase in international whole goods and after-market part sales. I note that our end-users are busy for my time [ph], that's because I'm in the field but due to the fourth quarter they continue to lean on lease options with extended terms. That along with our dealers stocking initiative had an impact on our volume. Despite the temporary headwinds, I'm very encouraged by the progress we are making towards our strategic initiatives simplified focus in growing our organization which I will discuss in greater detail later in the call. Now, let's turn our attention to the slide deck. In Slide 4, where you will see an overview of Astec Industries. For those of you new to our story, I'll highlight a few key metrics. We finished 2019 with $1.15 billion in adjusted revenue, comprised of 41% infrastructure, 35% aggregate mining, and 24% energy. 77% of our sales are domestic with the remainder being in the international markets. Turning to the highlights for the quarter and the year on Slide 5 and 6; Becky will cover details later in our presentation but I want to call your…

Thank you, Barry. And good morning everyone. I'm pleased to join you today on today's earnings call. It's my first as CFO of Astec Industries after joining the company in early December. Almost three months in my new role, I can say it's truly an honor to be working with such great company, talented team and with an opportunity ahead of us to significantly improve financial results and drive shareholder value. On today's call, I'll provide further financial details of the quarter and full year results before turning the call back to Barry for an update on our strategic transformation progress, before opening the call to Q&A. Turning your attention to Slide 8; fourth quarter revenues decreased 10.7% to $283.2 million. Domestic sales declined 15.5%, was partially offset by growth of 6.9% in international sales, driven primarily by increases in Australia and Brazil. Continued softness in equipment sales, which decreased 21.4% in the quarter were offset by strong sales growth of 9.5% in parts. Our dealer inventory levels remain elevated through much of 2019 which continue to impact sales into the fourth quarter '19. Dealer rental fleets that are traditionally been converted to retail sales by this time in the year did not occur. Our backlog decreased 23.6% to $263.7 million during the quarter. The backlog decline was mainly due to lower demand for paving equipment and a difficult comparison to record backlog a year ago with Aggregates & Mining. This was partially offset by growth in asphalt plant-related equipment. Activity for asphalt plant-related equipment exceeded our expectations and we ended the year with the highest level of new bookings. New bookings for paving equipment also improved during the quarter. Within Aggregate & Mining new equipment orders picked up modestly from the three previous quarters. Before moving forward, I'll just…

Thanks, Becky. Turning to Slide 14 of the earnings presentation, I'll provide an overview of our strategic pillars, simplify, focus and growth. We're simplifying. Since becoming CEO I heard feedback from customers, analysts and shareholders that our business is too complex. I want to appropriately leverage our scale, reduce organization complexity, consolidate and rationalize our footprint and product portfolio. Second, focus. We want to strengthen our customer-centric approach, provide commercial excellence, streamline processes and instill a performance-based culture. Finally growth, we want to reinvigorate innovation, leverage technology to enhance the customer experience, explore global growth opportunities and allocate capital to maximize shareholder value. Within these pillars, we've made great progress in a very short time. Slide 15 outlines some of the major milestones we are executing against on our transformation journey and the progress we made to date. Under simplify, while the majority of work has been done so far, we have strengthened the executive leadership team, flattened the reporting structure, restructured the organization from a subsidiary structure to product and functional groups and executed our Astec Strategic Procurement initiative. For the first quarter of 2020 earnings, we plan to condense our reporting structure from three to two segments by rolling the Energy Group into the existing Infrastructure Group, to streamline our reporting structure and more accurately reflect our business since we are in the process of selling adjustable business that effectively eliminates our exposure to the energy industry. The new segment structure will align more appropriately with the products in our portfolio and the end markets we serve. Within focus, we have aligned our management incentive programs and hired Senior Vice President of Operational Excellence to instill operational excellence across the organization and a Chief Information Officer, who will oversee implementing an Enterprise Data Analytics Strategy to further develop…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Mig Dobre with Robert W. Baird. Please proceed with your question.

Yes, thank you. Good morning everyone and welcome to Becky, looking forward to working with you.

Thank you, Mig.

I actually have quite a few questions. So I'm just going ask two and maybe come back on a follow-up. My first one maybe is really related to the material weaknesses and the remedies. And I'm trying to understand exactly what the -- what the nature of this material weakness is and it really -- what I'm trying to get at here is, you're sort of looking at the organization and the changes that you need to make. Is there some needed investment that has to happen here from a system standpoint, IT standpoint and do you get the sense that you have the right people in place at this point to be able to address everything that you need to address or is this something that kind of needs to progress and you need to staff up and the like as 2020 unfolds?

Good morning, Mig, this is Barry. I'll take a shot at answering your question. Great, great question. First and foremost, we really haven't filed our 10-K yet, so I think once we do that the clarity in regards to what types of material weaknesses are there will be some more present to you. I would tell you that from an investment perspective, we absolutely have under-invested in IT and I think that with the onboarding of Matt Litchfield now, the CIO, we're putting together a vision and strategy around how do we improve the data connectedness of our company and I think you have an appreciation for the fact that historically, we've operated more as a holding company with a bunch of subsidiary companies that really had disparate systems and disparate processes and so as we now change the direction of the company to be more focused on product groups and functional expertise relative to a matrix organization, we'll start to pull in some of those inconsistencies and drive more standard operating procedures, which I think will help in general. But we have many independent ERP systems. I think that a part of our investment as we move forward will be to find a strategy to be able to get us on live [ph], we are in the process of implementing a middleware that allow us to be able to pull data in from these different sites and be able to do data analysis more effectively. To answer your question about the right team, I think that from my first days in August it was my focus first and foremost to make sure we had a strong leadership team. And I believe that now we have the right team in place in order to be able to tackle these things and drive them to resolution very quickly. That's both on the finance side with Becky, on the IT side with Matt. Becky has added many group controllers to the organization now that bring many experiences and tools sets that will allow us to drive this with good rigor and good pace. And so I feel very good about where we're at. I don't feel good about where we're at today. But I feel good about where we're heading in the future with the right people, processes and investments.

Sure. There is a lot of wood to chop here and again, my experience looking at other companies that have gone through similar transformation, it takes time and it's not an easy road necessarily. So just as a follow-up here, can you size the incremental investment that you're going to have to make here and sort of the level of operational risk that's involved. Are you looking at migrating to a common ERP platform, what sort of outside help are using, any color here would be helpful? And then I'll jump back in the queue. Thank you.

Yes, I would tell you that right now we're formulating the strategy and the actions that we're going to take in order to do that. So just I'd ask for your patience to bear with us as we just as defined we will share more effectively with you. I can tell you that Matt Litchfield, our CIO has been through, he's personally been through 32 ERP implementation, he certainly has the scars and the wounds and the victories obviously to help us, keep us in perspective. I've been through ERP implementation, Becky has globally. So I think we've got a good array of people who understand the risk and the types of investments both in time and money that's going to take to do this. So we'll have more to share on that as we go through 2020.

Okay, thanks.

Thanks, Mig.

[Operator Instructions] Our next question comes from the line of Joe Mondillo with Sidoti & Company. Please proceed with your question.

Hi, everyone. Good morning.

Good morning, Joe.

So, I just wanted to -- regarding some of the changes you made and one thing that you have are well into that you've been sort of looking at or even before your arrival Barry was procurement, so I was wondering, just given sort of the more of a decline that we've seen in your markets and in your business over the last six to nine months, could you update us what you're anticipating of savings regarding the changes that you've made with procurement already for 2020 or beyond or however you want to frame that?

Yes, good question. So we've committed in previous calls and other meetings that we were intending to hit a target of $25 million of annual cost savings from this initiative, we still stand by that. Certainly, that will be -- have headwinds of volume as the, as the demand has softened, but we're still sticking with the $25 million. I think what gives me confidence in that number is that with the changes we've made around the reorganization to get focus that -- to get synergies from the, from the way we operate and the way we procure, but also one of the other changes we made at the leadership level is we brought in Greg Oswald as Senior Vice President of Operational Excellence. Greg brings in great rigor, great discipline and the processes and tools that we're using now that are on top of what we instituted back in the beginning of 2019 or even greater and so I suspect that with his leadership and with greater communication across the company, that the $25 million is still an achievable number for us.

And just to clarify, that $25 million was based probably on a higher volume a year ago or so. So that you wouldn't realize that fully in 2020, correct?

Our intentions are to realize at all in 2020. We are, we do have a headwind of volumes, but we believe that we're going to continue to add to that funnel and we'll be able to realize those savings as we move forward.

Okay. And then, the CEI consolidation, when did -- when was that completed?

Actually this -- really at the end of February, we were basically done with that as far as moving materials and closing down the facility. We still own the facility, so we're essentially done with that restructuring activity now.

Okay. Is there any way to give us an idea of the savings regarding that consolidation.

I would tell you that for a full year 2019, we had about $11.4 million in restructuring, $9.9 million of that came in Q4 and we expect all of that to have a greater than two-year or less than two-year payback.

Great. Regarding -- just, I guess -- just moving to the sort of the demand that you're seeing in the trends, you mentioned dealer inventories remain elevated through 2019. Does that mean they still remain elevated at this point or could you talk about the channel inventory? And then regarding your bookings, they seem to improve throughout the year, is that an indication or at least stabilize. Do you think things have stabilized in the business?

Yes, I think you know from previous conversations Joe, that we really know that our customers, our end-users are busy and almost to, almost to company, as I've spent a lot of time in the field, whether that was in a National Dealer Conferences, the National Asphalt Payment Association, making trips out to visit with customers myself to build those relationships, understand the business. Almost to, almost to company, they've all said that 2019 was one of the best years they've ever had and they expect as they move into 2020, that they expect it to be consistent with '19. I'm happy to see that on our implied orders, we continue to build strength in those numbers as we went through 2019. I can quote you that as of February, our backlog is up 12% from where we finished 2019. So, I think that we're -- I'm hesitant to say we're at the bottom, but it feels like we're at the bottom. And I think we could potentially be turning the quarter. I can also tell you on the dealer inventories, is something that we're paying a lot of attention to. We know on our mobile road tech equipment, our dealer inventories dropped by 33% through 2019. So the dealers are working hard to the right size where they're at, of course, they're managing leased fleet and inventory and everything. So we feel, we feel good about where we are now in that cycle and what 2020 will bring to us as we move forward.

Okay. And then, last question just regarding the GEFCO sale, do you anticipate that's not finalized, correct? You have not found a buyer for that?

We're in the process of talking to interested parties and we expect to have that closed in final by mid-year.

Okay. My question was going to actually be, because I think that was said the press release several months ago that you still anticipate the mid-year, that I guess [indiscernible]?

That's correct, yes.

Okay. All right, great. Thanks.

Okay. Our next question is a follow-up question from the line of Mig Dobre with Robert W. Baird. Please proceed with your question.

Great, thanks for the follow up. So let's see where you start. I guess, I guess my first question is on Aggregate & Mining. Can you maybe provide some kind of context vis-a-vis demand normalization. I think that's, that's a term that you have used in your release and I guess I'm wondering here that when I look at your order intake for 2019, it was about $350 million, the prior two years, they were, call it 432, 407, so obviously lower order intake in 2019. What happened in '17 and '18 that maybe was a little bit unique, what's going on in 2019 and what were -- why were orders lower and how do you think about this concept of what normalized demand looks like?

Yes. Good question Mig, thanks. Of course, I wasn't here during '17 and '18 years. I know that those were good years. As we went through finishing up 2018, there was a lot of market activity and our dealers were building up their inventories. Obviously we were busy supplying them with inventory. As we rolled from '18 and '19, I think as we discussed in the past, the season for 2019 and again this is, this is feedback that I've personally received from all the customers that I met with, it was a slow start to the season in 2019 for many parts of the United States. And then as they got into the season, everyone that I've spoken to, on my customer visits have really referred to the leases in rental opportunities and leveraging that maybe more than they have in the past. I know as I talk to some of our dealers, they are saying that the rental fleets are becoming a bigger part of the revenue stream. And so that has, I think somewhat delayed the conversions from rental to retail, which then obviously has an impact on us. The great news is if you look at the other public aggregate companies and as I make visit, they're all having great, they had a great 2019. They had great volume years, they had good pricing years. So they have capital available. I think it's more of a delayed spend than it is something that, that is really I think that's really the change to the market as it has been today.

Well, I mean that's the question, Barry; because -- look, the customer is doing well helped but the equipment investment cycle is not necessarily one to one perfectly correlated with that.

Correct.

So again, I'm trying to understand the nature of what normalized demand looks like because if what you're saying is that your order intake in 2019 is more in line with what normalized demand looks like then at least in theory, your segment revenue in 2020 probably should be down something like 15% which I think if that would be the case, then that would make it consistent with what some of your peers like [indiscernible] and so on are saying about the aggregate business. So am I missing something here or should we all be thinking something like down 15 for 2020 here?

Yes, you know, we're still, I guess I'll reiterate the fact that we're not giving guidance as we move forward into the New Year. So I'm not going to comment on what we see as far as the market being down on some percentage basis. I can tell you, I think that as we went through 2019, we saw somewhat of a kind of a big, a big swing in regards to we had a lot of inventory out in the dealers, the customers had units that they were comfortable with and so I want to say is, what's the right word, it's more probably a reflex as we finish with that higher inventory that 2019 saw a big drawback on our business. I think that I understand that logically on why that happened. I think as we move into 2020, I think as we release Q1 results, it will be interesting to see where our implied orders are for that period. And I can tell you that typically we have a dealer orient program that we announced in the [indiscernible] side around the November timeframe. We didn't have a lot of customers take us up on that program as for stocking for their equipment, but as we've, as we've exited 2019 and entered in 2020, we've seen more quoting activity. We've seen our dealers with less inventory. So I think that we're starting to see, I think 2020 will tell us what that normalized volume really is as we move through the course of the year.

Well, I appreciate that. And look, I'm going to push back a little bit here and say that I mean, if you're, if you're telling us on this call that you're seeing your backlog being up for the business 12% since December, you're providing long-term target of being up 5% to 10% but not really being willing to speak as to what 2020 at least normalized demand would look like, you can appreciate that makes it pretty difficult for folks like us from the outside to look in and say okay what's reasonable to assume on fundamentals, are we really bottoming or are there other challenges that we need to sort of model in or take in, so I think that's what we're all struggling with, just to be kind of clear.

No, let me just comment that. I appreciate, I appreciate your perspective Mig and I know that with us not giving guidance that makes it more difficult for you to have the right information in order to do -- to make sure you take care of your shareholders and customers. All I'm doing is at this point in time is stating the facts and I think that if you were to press me to say are we at the bottom of the cycle, I think that I'm comfortable in saying here in this call that 2019 really showed us the bottom of our cycle and how fast is a change and how fast to go up, I think that's yet to be determined and that's where I'm reluctant to give guidance in regards to what that looks like as we go through 2020.

Fair enough. So related to that, how do you think about the highway bill, especially within the context of an election year here. And that level of visibility maybe getting a new highway bill approved as a requirement to sort of really put a floor on, on the business and maybe inflected higher, is that, is that needed in 2020 or can you sort of see a rebound even absent that?

Yes, I think that, as I've had that conversation with the customers, certainly anytime you go through an election period there is some sort of concern or trepidation and uncertainty around what that means. I think the great thing about where we stand today both, both parties agree that infrastructure bill is something that's needed in the United States and they talk to the customers, as I alluded to earlier, they see generally 2020 looking a lot like 2019 for them. So that -- the interesting part will be as we go through 2020, is what does that mean for us. As they convert more rentals to retail as they make more capital purchases in order to support their year, how does that roll down into the -- to the Astec Group. So, I think that I said before as well that we're not going to hide behind the highway bill. We need to be a really good company without a highway bill. Over half the state today have their independent funding through gas tax and so there's been a lot of activity. So I don't necessarily see a big swing or big slowdown because of election based on the feedback I'm getting from customers, but we all know that as we get closer the political environment could move that. So I think it's a little bit of a wait and see.

Okay. A couple more questions and then I'm done. I don't know if I missed this in your releases. But on the inventory charge, was there a breakdown by segment that was in there that you can share with us.

Go ahead, Becky.

Yes. We certainly have it broken down internally, but no, we did not share that break down, and it was really some specific units in specific areas of our business and across the board, but largely the biggest portion of that was tied to used equipment and so we think of that as kind of a one-time event as we were setting up dealers moving away from a direct sale business model to a dealer model, they are about 50% through that process and so, as our dealers will now be picking up the used equipment, we shouldn't see that repeat itself, but we just need to take some action on the used in particular along with some others selecting this.

Yes. Let me just going to maybe add to that. I think -- you know, Mig, that we're in the process in parts of our business going from direct sales to distribution and primarily in the mobile equipment side of the business. And as we've, as we move down that path and with new management, new leadership new sets of eyes, we've looked at it and we have to update our policies. We update our policies on how we manage used equipment. We took the position that we needed to be more disciplined and moving forward, I think we're all have clear accountability and visibility to how we'll manage that moving forward and so we don't suspect that we're going to have an impairment like this again moving forward with better discipline, better processes for new reinvigorated disciplined processes. So hopefully, that add some more color to the situation.

I mean, it does. I'm just looking to make sure that I have sort of clean financials at segment level so that we understand kind of what happened here. That's why I'm asking the question because it's the same thing with restructuring right, I'm kind of unless I'm missing something I'm trying to understand how that played out at segment level as well. Is that a couple things or is that that pretty material?

Yes, I would tell you that the inventory impairment is primarily in the infrastructure business.

Yes, okay. So on the mobile side probably?

Yes.

You are talking about here. Okay.

And then -- and then, on the restructuring I would tell you that the lion's share is on the, in the energy business and I would also tell you that you know as Becky alluded to in her script that we're very pleased with the restructuring activities and you can start to see some of the benefit of that showing up in the energy business as we closed out 2019.

Okay, understood. Then maybe my last question, as you're looking at whatever you're going to have less of energy, is there more portfolio action, potential asset sales to be done out of out of there or are you considering what's leftover in that segment to be core and part of the company longer term?

Yes. So as I alluded to in my opening, we're going to move as we go, as we going to Q1 of 2020 to reporting in two segments, Infrastructure and Aggregate & Mining, as we know them today. The Infrastructure side we will include what's left of the Energy, it's really a better fit for the segments that we serve, the customers we work with and the systems that we sell. I think there's really good alignment there and from a core non-core, I believe we've done all the heavy lifting relative to the divestitures of our companies and product lines at this point in time. We will always continue to have open eyes and continue to evaluate as we move forward through time as you can imagine. But at this point in time, we feel that we've -- the product lines that we have left out are product lines that we're going to continue to grow as we move forward in time.

Great, thank you. Good luck.

Our next question is a follow-up question from the line of Joe Mondillo with Sidoti & Company. Please proceed with your question.

Hi, everyone just two follow-up questions. Regarding some of the savings that you're going to see there -- this year related to the few things that I sort of mentoring in my prior Q&A as well as there is probably going to be some other things. How much I guess the reinvestment are you going to see or maybe I can rephrase it another way, of the $25 million related to procurement, $5 million may be related to CEI consolidation, that's looking like 30 million, will that be a net number or are you going to be using some of that to reinvest in the business?

Yes, I think that you know as we look at our capital plan moving 2020, certainly we've broken out the detail around what part of that is cost savings investment versus innovation versus just general maintenance that I think we have a good proportional breakout of the cost savings. I don't have a total right now, in regards to, as we look forward on the IT side, you know what that investment is going to be on the ERP strategy. I suspect that the majority of that vessel will be post 2020, we'll spend probably a lot of this year doing the work to make sure that we understand what we're going to do and how we're going to do and the timing of that plan. So I think what we can do for you guys as we move to the subsequent calls in other meetings, we can give you an update on where that stands and so you can have a better feel for what that investment looks like.

Okay. And then, this leads me to my second question, which is; I appreciate you're still going through the turnaround strategy and what you want to do over the next few years and that may take a little more time and so I understand that you haven't sort of maybe laid out the plan. It's clear as you probably want would love to tell us but I'm just wondering what sort of -- you're envisioning the timing of maybe putting forth a little more detail on more comprehensive plan step-by-step of what you're doing and what the savings would be multi-year target. I know you have some multi your targets out there ready, but just curious and what your sort of thoughts on others?

Yes. First, let me tell you that I'm really excited and pleased by the energy and momentum in the organization from the changes we've already announced to you relative to really moving away from subsidiary companies and going more to groups around product lines and functional matrix type organization. Everyone sees the value. We've had people from one site already visiting other sites that quite honestly said they've never been to before. We've got expertise in all kinds of our -- all parts of our business that are now going to other sites and sharing that expertise and so we're starting to see some real benefit on the operational aspect and operational excellence type initiatives around how do we leverage the skills and abilities to make us better everywhere where we are. So that's exciting to me. As the big opportunities relative to cross-selling, we have a very dominant position in the asphalt plant market in the United States. How do we leverage that to more of the other parts of our business and other parts of our product portfolio with those relationships and trust. So I think that there is lots of opportunities. You can imagine some of the synergies and the value that [indiscernible] synergies -- now, that we reorganized the company. So we're very excited about that. I think as we, as we move forward, we'll share more of that plan and some of the benefits from that plan through the course of this year. At this point in time, Steve and I've had and Becky you've had a chance to talk about Investor Day later this year, probably in the December time frame and that would be a great opportunity for us to be with all of you at one place and to roll things out a little bit more constructively and holistically.

All right, perfect. I look forward to it. Thanks a lot and have a good day.

Yes. Thanks, Joe.

There are no further questions in the queue, I'd like to hand the call back to Steve Anderson for closing remarks.

All right, Thank you, Doug. Again, we appreciate your participation on this fourth quarter conference call and thank you for your interest in Astec. As today's news release indicates, today's conference call has been recorded. A replay of the conference call will be available through March 18, 2020 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 seven days. All of that information is contained in the news release that was sent out yesterday afternoon. This concludes our call. So thank you all, have a good week.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.