The sites within the Materials Solutions segment are primarily focus on manufacturing operations with the AME and India sitessite 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 our manufacturing sites. In addition to manufacturing core Materials Solutions products and asphalt plants, Belo Horizonte manufactures asphalt plants in additionmarkets all our products to certain core products produced in the Materials Solutions segment. Belo Horizonte also markets products in the Brazilian market that are produced by all of our manufacturing sites. Our India site is in the start-up phase of new sales operations.

The primary products produced and services provided by the Materials Solutions segment include:

We manufacture comprehensive lines of crushing, screening, washing and classifying, material and bulk handling and rock breaking equipment in a variety of configurations including stationary, portable (wheeled) and mobile (track). In conjunction with the Materials Solutions products, we manufacture, we offer consulting and engineering services to provide complete "turnkey" processing systems, which often include electrical control centers and plant automation products that we produce.

Our washing and conveyingclassifying equipment mobile screeningis well-suited for a wide range of applications and production goals. Our expertly engineered components and plants help producers meet the most stringent material specifications and get the most out of their material, while significantly decreasing water usage. With complete lines of washing, classifying, fines recovery and water clarification plants and systems, we offer solutions for any operation in portable and stationary screen structures and vibrating and high frequency screens. These rock crushers are used by mining, quarrying and sand and gravel producers to crush oversized aggregate to salable size, in addition to their use for recycled concrete and asphalt. This equipment can be purchased as individual components, as portable plants for flexibility or as completely engineered systems for both portable, stationary and RAP applications. We offer the highly-portable Fast Pack System, featuring quick setup and teardown, thereby maximizing production time and minimizing downtime. We also offer portable fully self-contained and self-propelled Fast Trax track-mounted jaw, cone, VSI and horizontal shaft crushers, which are ideal for either recycle or hard rock applications, allowing the producer to move the equipment to the material. The expanded GT line of track-mounted crushing and screening plants focuses more specifically on the need for rental and global markets.

Conveying equipment is designed to move or store aggregate and other bulk materials in radial cone-shaped or windrow stockpiles. Our SuperStacker telescoping conveyor and Wizard Touch automated controls are designed to add efficiency and accuracy to whatever the stockpile specifications require. Additionally, high capacityhigh-capacity rail and barge loading/unloading material handling systems are an important part of theirour product lines.

We design and manufacture a broad range of material and bulk handling products for all production goals. Our completematerial handling products cover many applications and are designed for efficiency and high-capacity material transferring, moving and mixing. Our innovative line of industry leading rock breaker systems for the mining, quarrymaterial handling solutions includes radial and recycling markets provide large-scaletelescoping conveyors, truck unloaders, hopper feeders, mobile conveyors, pugmills, ship loaders and unloaders, bulk receptions feeders and stationary rock breakers for open pit mining, as well as mid-sized stationary rock breakers for underground applications. In addition, we offer a full line of smaller rock breaker systems for mobile track and portable primary crushing plants as well as a full line of four-wheel drive articulated production and utility vehicles, scalers and rock breakers for underground mining and a complete line of hydraulic breakers, compactors and demolition attachments for the North American construction and demolition markets.

We have created our rock breaking equipment line for aggregate, mining, construction and demolition applications. Our comprehensive range of rock breaker boom systems are sold globally.designed to break oversized material at large gyratories, grizzlies and primary/secondary crushing application sites. These systems include boom-mounted configurations, automatic greasing packages, motor starter panels, joystick controls and easy plant integration. Our newest mobile rock breaker, the BreakerBOSS

Many of our facilities maintain internationally recognized industry standard quality, environmental and health and safety assurance accreditations.

The principal purchasers of aggregate processing equipment include distributors, highway and heavy equipment contractors, sand and gravel producers, demolition, recycle and crushing contractors, open mine operators, quarry operators, port and inland terminal authorities, power stations and both domestic and foreign governmental agencies.

Materials Solutions'Solutions equipment and aftermarket sales and service program isprograms are primarily marketed through an extensive network of dealers byvia dealer support sales employees and domestic and international independent distributors.

The Materials Solutions segment faces strong competition in price, service and product performance. Materials Solutions equipment primary competitors include the following as well as smaller manufacturers, both domestic and international:

At December 31, 20202022 and 2019,2021, the backlog for the Materials Solutions Groupsegment was approximately $142.3$341.2 million and $74.1$313.3 million, respectively. Management expects the entire current backlog to be filled in 2021.

The Corporate and Other category consists primarily of ourthe parent company, and ourthe 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. OurThe parent company and ourthe captive insurance company provide support and corporate oversight for all theother sites. We record U.S. federal income tax expensesThe controls and state deferred taxes for allautomation business segments on the parent company's books; therefore, these taxesmanufactures hardware and software products that are marketed independently as well as included in the Corporate category for segment reporting.certain products produced by our other segments.

The following information applies to both the Infrastructure Solutions and the Materials Solutions reporting segments.

We manufacture many of the component parts and related equipment for our products, while several large components of our products are purchased "ready-for-use", such purchased items include engines, axles, tires and hydraulics. In many cases, we design, engineer and manufacture custom component parts and equipment to meet the particular needs of individual customers. Manufacturing operations during 2020 took place at 22 separate locations. Our manufacturing operations consist primarily of fabricating steel components and the assembly and testing of our products to ensure that we achieve quality standards.

We purchase raw materials and some manufactured components and replacement parts for our products from leading suppliers both domestically and internationally. Raw materials used in the manufacture of our products include carbon steel, pipe and various types of alloy steel, which are normally purchased from distributors and other sources. MostThe majority of steel is deliveredscheduled on a "just-in-time"just in time arrangement from the suppliersuppliers to reducebetter manage inventory requirements at theour manufacturing facilities, but is occasionally inventoried after purchase.facilities. Based on market dynamics, we strategically and selectively order and inventory certain items beyond a just in time basis. Raw materials for manufacturing are normally readily available; however, certain highly customized components may require longer than normal lead times. In addition, we have been and continue to experience increased lead times for certain standard production materials and parts and supplies. Other components used in the manufacturing processes include engines, gearboxes, power transmissions, hydraulics and electronic systems. We purchase hydraulic breakers under a purchasing arrangement with a South Korean supplier. We believe the South Korean supplier has sufficient capacity to meet our anticipated demand; however, alternative suppliers exist for these components should any supply disruptions occur.

We are subject to various laws and governmental regulations concerning environmental matters and employee safety and health in the United States and other countries. The Environmental Protection Agency, the Occupational Safety & Health Administration, other federal agencies and certain state agencies have the authority to promulgate regulations that have an effect on our operations. Many of these federal and state agencies may seek fines and penalties for violations of these laws and regulations. We have been able to operate under these laws and regulations without any material adverse effect on our business.

None of our reporting operations are within highly regulated industries. However, air pollution control equipment we manufacture, principally for hot-mix asphalt plants, must comply with certain performance standards promulgated by the Environmental Protection Agency under the Clean Air Act applicable to "new sources" or new plants. Management believesWe believe our products meet all material requirements of such regulations, applicable state pollution standards and environmental protection laws.

In addition, due to the size and weight of certain equipment we manufacture, we and our customers may encounter various state regulations on maximum weights transportable on highways. Also, some states have regulations governing the operation of asphalt mixing plants, and most states have regulations relating to the accuracy of weights and measures, which affect some of the control systems we manufacture.

Compliance with these government regulations has not had a material effect on our capital expenditures, earnings or competitive position within the market to date.

We seek to obtain patents to protect the novel features of our products and processes. Our subsidiaries hold 113 United States patents and 154120 foreign patents. Our subsidiaries have 4412 United States and 8531 foreign patent applications pending.

We have 8081 trademarks registered in the United States, including logos for Astec, Carlson Paving, Heatec, KPI-JCI, Peterson Pacific, Power Flame, Roadtec and Telsmith, and the names ASTEC, CARLSON, HEATEC, JCI, KOLBERG, PETERSON, POWER FLAME, ROADTEC and TELSMITH, as well as a number of other product names. We also have 120129 trademarks registered in foreign jurisdictions, including Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Italy, Kazakhstan, Mexico, New Zealand, Paraguay, Peru, Russia, South Africa, South Korea, Taiwan, Thailand, the United Kingdom, Ukraine, Uruguay and Vietnam. We have 913 United States and 3117 foreign trademark registration applications pending.

We conduct research and development activities to develop new products and to enhance the functionality, effectiveness, ease of use and reliability of our existing products. We believe that our engineering and research and development efforts are key drivers of our success in the marketplace and dedicate substantial resources to engineering and product development activities including establishing an Innovation Services team. Our Innovation Services team has experts in advanced fields, such as simulation and digital twin creation, who support our development initiatives. In addition, we are focused on innovation in our products to support the "Rock to Road" value chain.

Revenues for recent years, normalized for acquisitions and the closures of Enid and Mequon, have historically been strongest during the first, second and fourth quarters with the third quarter consistentlytypically generating weaker results. WeOver the long-term, we expect future operations in the near term to be typical ofconsistent with this historical trend.trend, however, quarterly revenue performance in 2021 and 2022 has varied based on recent manufacturing challenges resulting from supply chain and logistics disruptions as well as labor shortages.

As of December 31, 20202022 and 2019,2021, we had a backlog for delivery of products at certain dates in the future of approximately $360.5$912.7 million and $263.7$762.6 million, respectively. Approximately $86.2$146.3 million of the increase in backlog between periods relates to orders from domestic customers. Our contracts reflected in the backlog generally are not, by their terms, subject to termination. Our management believes we are in substantial compliance with all manufacturing and delivery timetables.

Each business segment operates in domestic markets that are highly competitive with respect to price, service and product quality. While specific competitors are named within each business segment discussion above, imports do not generally constitute significant competition for us in the United States, except for milling machines and track-mounted crushers. In international sales, however, we often compete with foreign manufacturers that may have a local presence in the market we are attempting to penetrate.

In addition, asphalt and concrete are generally considered competitive products as a surface choice for new roads and highways. A portion of the interstate highway system is surfaced in concrete, but over 90%the significant majority of all surfaced roads in the U.S. are

paved with asphalt. Although concrete is used for some new road surfaces, asphalt is used for most resurfacing. Our customers generally offer both asphalt and concrete surfacing options. Our investment in concrete batch plants in 2020options and our product portfolio enables us to be a singular provider to our customers for both asphalt and concrete equipment.

Our employees around the world are each guided by our purpose: Built to Connect, and our vision: To connect people, processes and products, advancing innovative solutions from "Rock to Road" as OneASTEC. We areEvery employee is also guided by our values and our code of business conduct. In everyday work, our employees embody our core values of Safety, Devotion, Integrity, Respect and Innovation. They do so by living our winning behaviors of Open and Honest Communications, Drive Creativity, Customer Driven Innovation and OneASTEC in doing so, directly contributeall they do. We strive to be an employer of choice, attracting and retaining top talent committed to creating a diverse, equitable and inclusive workplace where individuals are respected and valued for their diverse backgrounds and experiences. Through comprehensive compensation and benefits and a focus on safety, we strive to support our reputation. Employees take prideemployees' overall well-being. Our sites have programs designed to upskill manufacturing employees in their work and value learning from one another. While our employees hold our valuesthe areas specifically required for local production needs. In addition, we partner with national vendors specialized in common, they respect different perspectives and appreciate the opportunity to work with those with diverse backgrounds. We encourage employees to become involved in their communitiesskilled labor recruitment and many employees contribute their timeof our sites have relationships with local trade schools and talentscommunity colleges to community efforts. Our employees contribute to our efforts to provide a safe and healthy workplace for all, especially through the COVID-19 pandemic.attract talent.

As of December 31, 2020,2022, we employed 3,5374,291 individuals, including 3,0833,629 employees in the U.S. and Canada. We also retain consultants, independent contractors and temporary and part-time workers. As of December 31, 2020,2022, the functional representation of our employees was as follows: 2,1852,828 were engaged in manufacturing, 401399 in engineering, including support staff, and 9511,064 in selling, administrative and management functions.

Unions are certified as bargaining agents for approximately two percent of our U.S. direct employees. From time to time, our collective bargaining agreements expire and come up for renegotiation. Approximately 7983 of our active U.S. employees are covered by a collective bargaining agreement with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC on behalf of its local affiliate Local Union No. 11-508-03, with an expiration date of December 9, 2022.11, 2025. Unions also represent approximately 25%18% of our employees at our manufacturing facilities outside the U.S. We consider our employee relations to be good.

WeAs we strive to be an employer of choice, we provide competitive and robust compensation and benefits. We achieve this by regularly conducting market reviews and adjusting as needed. In addition to salaries, thesewe provide regional programs, which vary by country/region, can include annual bonuses, share-based compensation awards, a 401(k) plan with employee matching opportunities, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, flexible work schedules, adoption and surrogacy assistance,arrangements, employee assistance programs, tuition assistance and on-site services.

The well-being and safety of our employees is a paramount value for us and thisas is consistent withindicated in our core values. We manage safety at (and from) the highest levels, using the same tools we employ to measure and improve other aspects of business performance, such as continuous improvement, key performance indicators, scorecards and performance management. More particularly, weWe undertake the following actions:

We manufacture products deemed essentialbelieve in following a proactive approach to critical infrastructure industries, including healthidentify and mitigate safety foodissues. As such, our focus is monitoring, assessing and agriculture,abating leading safety indicators through our Unsafe Work Observation program, thus preventing accidents before they happen or reducing the impact if they do occur. Abatement of safety issues in a timely fashion is incentivized through our annual incentive program, which is partially focused on this leading safety metric.

We aspire to reduce recordable injuries and energy, and as a result, alllost time each year. During the year ended December 31, 2022, we had zero recordable injuries at four of our production sites have continuedmanufacturing sites. However, we experienced a 15% increase in our Occupational Safety and Health Administration Recordable Incident Rate for the year ended December 31, 2022, to operate during1.96 compared to 1.71 for the COVID-19 pandemic. As such,year ended December 31, 2021. Although we have investedseen an increase in creating physically safe work environmentsthe recordable incident rate, the incidents are concentrated in a limited number of sites. We have taken action to address these localized safety issues by increasing the number of corporate safety audits, providing thorough training at the site, realigning site safety focus, providing standardized safety policies and procedures and focusing on proactive injury prevention. We have also added safety resources at these sites and within our corporate structure to improve our safety program where we are continuing to focus on proactive, transparent and streamlined communications throughout the manufacturing sites for our employees.safety related information.

OurTalent and Diversity are key talent philosophy is to develop talent from within and supplement with external hires. This approach has yielded a deep understanding among our employee basecomponents of our OneASTEC business productsmodel. We strive to create an environment that attracts top talent and customers, while addingwhere high performance is fostered and thrives, continuous learning is engrained, diverse experience is leveraged as a competitive advantage and careers are propelled forward.

In 2022, our High Performance Framework process ensured company-wide alignment to achieve company goals and targets. This new employeesmodel includes values, professional development and ideas in support of our continuous improvement mindset. Our talent acquisition team uses internal and external resources to recruit highly skilled and talented workers, and we encourage employee referrals for open positions.cascaded common performance goals.

We provide all employees a wide range of professional development experiences, both formal and informal, at allvarious stages in their careers. In addition, talent development and succession planning for critical roles is a cornerstone of our talent program. Development plans are created and monitored for critical roles to ensure progress is made along the established timelines.

One of our core values – Respect – reflects the behavior we strive to include in every aspect of the way we conduct business. We recognize that our best performance comes when our teams are diverse and inclusive, and accordingly, we have begun work on building diverse talent pools as part of our recruitment efforts. With the support of our Board of Directors, weinclusive. We continue to explore additionaldefine our diversity, equity and inclusion initiatives.strategy. These efforts touch all levels of our organization including our Board of Directors.

Astec Industries, Inc. is a Tennessee corporation which was incorporated in 1972. We make available, free of charge on or through our website (www.astecindustries.com), access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A, Section 16 reports, amendments to those reports and other documents filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is filed with, or furnished to, the Securities and Exchange Commission ("SEC"). Information contained in our website is not part of, and is not incorporated into, this Annual Report on Form 10-K or any other report we file with or furnish to the SEC.

The SEC also maintains electronic versions of our reports on its website at www.sec.gov.

The following risks are considered material to our business, operating results and financial condition based upon current knowledge, information and assumptions. This discussion of risk factors should be considered closely in conjunction with Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and the accompanying notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us, or that we presently deem less significant, may also impair our business, operating results and financial condition. If any of the following risks actually occur, our business, operating results and financial condition could be materially adversely affected. The order of these risk factors does not reflect their relative importance or likelihood of occurrence. Some of these risks and uncertainties could affect particular lines of business, while others could affect all of our businesses. We, except as required by law, undertake no obligation to update or revise this risk factors discussion, whether as a result of new developments or otherwise.

General economic downturns, including downturns in government infrastructure spending and the commercial and residential construction industries, could result in a material decrease in our revenues and operating results. Sales of our products are sensitive to the states of the U.S., foreignspecific locations and regional economies in which they are sold in general, and in particular, changes in

commercial construction spending and government infrastructure spending. In addition, many of our costs are fixed and cannot be quickly reduced in response to decreased demand. Several factors, including the following, could cause a downturn in the commercial and residential construction industries in which we operate:

Many of our customers depend on government funding of highway construction and maintenance and other infrastructure projects. Historically, much of the U.S. highway infrastructure market has been driven by government spending programs, and federal government funding of infrastructure projects has typically been accomplished through bills that establish funding over a multi-year period. For example, the U.S. government funds highway and road improvements through the Federal Highway Trust Fund Program. This program provides funding to improve the nation’snation's roadway system. In December 2015,November 2021, the U.S. government enacted athe Infrastructure Investment and Jobs Act ("IIJA"). The IIJA allocates $548 billion in government spending to new infrastructure over the five-year $305 billion highway-funding bill (the "FAST Act")period concluding in 2026, with certain amounts specifically allocated to fund highway and bridge projects. The FAST Act expired September 30, 2020, and a one-year extension that maintains current funding levels has been approved by Congress. Matching funding from the various states may be required as a condition of federal funding.

Given the inherent uncertainty in the political process, the level of government funding for federal highway projects will similarly continue to be uncertain. Governmental funding that is committed or earmarked for federal highway projects is always subject to political decision making that may result in repeal or reduction. Although continued funding under the FAST Act is expected, it may be at lower levels than originally approved. In addition, Congress could pass legislation in future sessions that would allow for the diversion of previously appropriated highway funds for other national purposes, or it could restrict funding of infrastructure projects unless states comply with certain federal policies.

We sell equipment primarily to contractors whose demand for equipment depends greatly upon the volume of road or utility construction projects underway or to be scheduled by both government and private entities. The volume and frequency of road and utility construction

GlobalPrior to 2022, global interest rates have recentlyhad been at or near historic lows resulting in historically low financing costs for construction projects. While we expectBeginning in 2022, interest rates have increased substantially and are expected to remain low in the near-term, risingcontinue to increase. Rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our products and customers’customers' ability to repay obligations to us. An increase in interest rates could also make it more difficult for customers to cost-effectively fund the purchase of new equipment, which could adversely affect our sales.

We currently face strong competition in product performance, price and service. Some of our domestic and international competitors have greater financial, product development and marketing resources than we have. If competition in our industry intensifies or if our current competitors enhance their products or lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products. This may reduce revenue from our products and services, lower our gross margins or cause us to lose market share. In addition to the general competitive challenges we face, international trade policies could negatively affect the demand for our products and services and reduce our competitive position in such markets. In addition, unfavorable currency fluctuations could result in our products and services being more expensive than local competitors. The implementation of more restrictive trade policies, such as higher tariffs, duties or charges, in countries where we operate could negatively impact our business, results of operations and financial condition.

In 2020,2022, international sales represented approximately 20.2%20.4% of our total sales as compared to 22.3%23.1% in 2019.2021. We plan to continue increasing our already significant sales and production efforts in international markets. Both the sales from international operations and export sales are subject in varying degrees to risks inherent in doing business outside of the United States. Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations including privacy laws protecting personal data, changesand general economic and political conditions in tariffthe countries we do business, which are typically more volatile than the U.S. economy and trade barriers and import or export licensing requirements.more vulnerable to geo-political conditions. In addition, the U.S. Government has established and, from time to time, revises sanctions that restrict or prohibit U.S. companies and their subsidiaries from doing business with certain foreign countries, entities and individuals. Doing business internationally also subjects us to numerous U.S. and foreign laws and regulations, including regulations relating to anti-bribery, privacy regulations and anti-boycott provisions. We incur meaningful costs complying with these laws and regulations. The continued expansion of our international operations could increase the risk of violations of these laws in the future. Significant violations of these laws, or allegations of such violations, could harm our reputation, disrupt our business and result in significant fines and penalties that could have a material adverse effect on our results of operations or financial condition.

Our ability to match new product offerings to diverse global customers' anticipated preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success. This requires a thorough understanding of our existing and potential customers on a global basis, particularly in Asia, Middle-EastMiddle East and Africa, and Latin America. Failure to deliver quality products that meet customer needs at competitive prices ahead of competitors could have a significant adverse effect on our business.

Additionally, our international sales involve some level of export from the U.S., either of components or completed products. Policies and geopolitical events affecting exchange rates could adversely affect the demand for construction equipment in many areas of the world. Further, any strengthening of the U.S. dollar or any other currency of a country in which we manufacture our products (e.g. the Brazilian real and the South African rand) and/or any weakening of local currencies can increase the cost of our products in foreign markets. Irrespective of any effect on the overall demand for construction equipment, the effect of these changes can make our products less competitive relative to

We require access to various parts, components and raw materials at competitive prices in order to manufacture our products. Changes in the availability and price of these parts, components and raw materials (including steel) have changed significantly and rapidly at times. The availability and price of such items are affected by factors like demand, changes to international trade policies that may result in additional tariffs, duties or other charges, freight costs, global pandemics, shipping and outbreaks,container constraints and labor shortages and costs, each of which can significantly increase the costs of production. Due to price competition in the market for construction equipment and certain infrastructure products which have longer contract to completion cycles, we may not be able to recoup increases in these costs through price increases for our products, which would result in reduced profitability. Whether increased operating costs can be passed through to the customer depends on a number of factors, including the price of competing products.products and the nature of our customers' orders. Further, we rely on a limited number of suppliers for steel and certain other raw materials, parts and components in the manufacturing process. Disruptions or delays in supply or significant price increases from these suppliers could adversely affect our operations and profitability. Such disruptions, terminations or cost increases could result in cost inefficiencies, delayed sales or reduced sales. The aforementioned risks have been, and may continue to be, exacerbated by the impact of COVID-19.

We currently maintain a broad network of distribution and manufacturing facilities throughout the U.S. as well as internationally. Any widespread disruption to our facilities resulting from fire, earthquake, weather-related events (such as tornadoes, hurricanes, flooding and other storms), an act of terrorism or any other cause could damage a significant portion of our inventory and could materially impair our ability to distribute our products to customers. Moreover, we could incur significantly higher costs and longer lead times associated with distributing our products to our customers during the time that it takes for us to reopen or replace a damaged facility. If any of these events were to occur, our financial condition, operating results and cash flows could be materially adversely affected.

In addition, general weather patterns affect our operating results throughout the year, with adverse weather historically reducing construction activity in the first and fourth quarters in the U.S., our largest market. An increase of adverse weather events, including as a result of climate change, could generally reduce or delay construction activity, which could adversely impact our revenues.

Epidemics, pandemics, and other outbreaks (includingThe emergence of the COVID-19 pandemic) can disruptpandemic has significantly impacted our operations. Throughout 2020, our operations and adversely affect our business, results of operations, and cash flows.

In March 2020, we launched ourOur OneASTEC business model withis designed around the strategic pillars of Simplify, Focus and Grow. This is a focused effort towards an operating model centered around continuous improvement. The OneASTEC business model was designed to better set strategic direction, define priorities and improve overall operating performance, as described in greater detail in the section titled "Corporate Strategic Objectives" in Item 1. Business.performance. Our future success is partly dependent upon successfully executing and realizing performance improvements, revenue gains, cost savings and other benefits from this initiative. It is possible that we may not fully realize, or sustain, the expected benefits from the OneASTEC business model. Furthermore, the implementation of the OneASTEC initiatives maywill result in an increase in short-termnear-term expenses and may negatively impact operational effectiveness and employee morale.

We have historically grown, in large part, through strategic acquisitions, and our strategy is to continue to pursue attractive acquisition opportunities if and when they become available. Failure to identify and acquire suitable acquisition candidates on appropriate terms could

As of December 31, 2020,2022, we were in compliance with the financial covenants contained in our credit agreement with Wells Fargo Bank, N.A.agreement. However, in the future we may be unable to comply with the financial covenants in our credit facility or to obtain waivers with respect to such financial covenants. If such violations occur, our creditors could elect to pursue their contractual remedies under the credit facility, including requiring immediate repayment in full of all amounts then outstanding.outstanding and requiring cash collateral to support outstanding letters of credit. As of December 31, 2020,2022, we had nooutstanding borrowings but did have $7.6of $78.0 million and an additional $2.8 million in letters of credit outstanding under the Wells Fargo credit agreement. We may also borrow additional amounts under the credit agreement in the future. Certain of our international subsidiaries in South Africa, Australia, Brazil, Canada and Northern Irelandthe United Kingdom have entered into their own independent loan agreements with the same lenders to our credit agreement as well as with other lending institutions.

We are subject to income taxes in the United States and other jurisdictions. Our results of operations could be adversely affected by, among other things, changes in the effective tax rates in the U.S. and foreign jurisdictions, a change in the mix of earnings between U.S. and non-U.S. jurisdictions or among jurisdictions with differing tax rates, changes in tax laws or treaties and related changes in generally accepted accounting principles. Additionally, we typically incur substantial research and development costs

each year and have historically received significant research and development tax credits due to these expenditures. Congress could reduce or eliminate such tax credits in future years, which could have a material adverse effect on our operating results.

We recentlyhave completed a number of acquisitions and expect to continue to complete selected acquisitions in the future as a component of our growth strategy. In connection with acquisitions, applicable accounting standards generally require the net tangible and intangible assets of the acquired business to be recorded onin the balance sheet of the acquiring company at their fair values as of the date of acquisition. As a result, any excess in the purchase price paid by us over the fair value of net tangible and intangible assets of any acquired business is recorded as goodwill. Definite lived-intangible assets are required to be amortized over their estimated useful lives and this amortization expense may be significant. If it is later determined that the anticipated future cash flows from the acquired business may be less than the carrying values of the assets and goodwill of the acquired business, the assets, including both definite-lived and indefinite-lived intangible assets, or goodwill may be deemed to be impaired. If this occurs, we may be required under applicable accounting rules to write down the value of the assets or goodwill on our balance sheet to reflect the extent of any such impairment. Any such write-down of assets or goodwill would generally be recognized as a non-cash expense in our consolidated statements of results of operations for the accounting period during which any such write down occurs.

Goodwill and intangible assets areis subject to impairment assessments at least annually (or more frequently when events or changes in circumstances indicate that impairment may have occurred). Other intangible assets are subject to impairment assessments if conditions exist that indicate the carrying value may not be recoverable. At October 31, 2020,1, 2022, we performed a quantitative assessment of impairment, and our testing indicated no impairment had occurred.occurred at any of our four reporting units. However, the fair values of the Materials Solutions and Astec Digital reporting units exceeded their carrying values by 3.2% and 5.0%, respectively. Since the Materials Solutions and Astec Digital reporting units' fair values did not substantially exceed the carrying values, we may be at risk for an impairment loss in the future if forecasted trends assumed in the fair value calculation are not realized. As of December 31, 2022, there was $19.4 million and $8.7 million of goodwill recorded related to the Materials Solutions and Astec Digital reporting units, respectively. A decrease in our market capitalization, profitability or negative or declining cash flows increases the risk of goodwill or other intangible asset impairments. Future impairment charges could have a material adverse impact on our results of operations and shareholders' equity.

We believe our culture focused on safety, devotion, integrity, respect and collaboration,innovation, is one of our strongest assets. Our strong culture positions us to recruit and retain top-level talent across our organization. We believe our employees and experienced leadership group are competitive advantages, as the best people, over time, produce the best results. Our ability to attract and retain qualified engineers, skilled manufacturing personnel and other professionals, either through direct hiring or acquisition of other businesses employing such professionals, will also be an important factor in determining our future success. The shrinking availability of qualified talent in these areas is a significant challenge in retaining and attracting sufficiently qualified personnel to enable us to meet customer demand efficiently resulting in longer lead times to convert backlog to revenue and materially and adversely impacting our margins. If we are unable to attract the most talented candidates, and cannot retain and engage additional highly qualified managerial, technical, manufacturing, and sales and marketing personnel by investing in their talent and personal development, our operational and financial performances could continue to suffer.

In addition, while we strive to reduce the impact of the departure of high performing employees, we could be impacted by the loss of employees, particularly when departures involve groups of employees, such as voluntary and involuntary separation programs planned for 2021. Employee-separation programs may adversely affect us through decreased employee morale, the loss of knowledge of departing employees and the allocation of resources to reorganizing and reassigning job roles and responsibilities. Our ability to meet our business objectives may be affected by the departure of employees, and the expected cost savings of employee-separation programs may not be achieved due to delays or other factors. Further, the departure of groups of employees could increase the risk of claims or litigation from former employees. Disputesdisputes with labor unions could potentially affect our ability to operate our facilities as well as our financial results. Any strike, work stoppage or other dispute with a labor union could materially adversely affect our business, results of operations and financial condition.

In connection with the transition of our business operations and implementation of the OneASTEC business model, we have replaced many employees in key functions, including in important management roles, and otherwise hired key personnel. Any significant management change involves inherent risk and any failure to ensure the effective transfer of knowledge and a smooth transition could hinder our strategic planning, execution and future performance. As new employees gain experience in their roles, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of new employees with business processes, operating requirements, policies and procedures, some of which are new, and key information technologies and related infrastructure used in our day-to-day operations and financial reporting. We may also experience additional costs as these new employees learn their roles and gain necessary

employees, whether due to death, disability or termination of employment, our ability to successfully operate our business segments, financial plans, marketing and other objectives could be significantly impaired.

We depend to a large extent on the abilities and continued participation of our executive officers and other key employees. We believe that as our activities increase and change in character, additional, experienced personnel will be required to implement our OneASTEC business model. Competition for such personnel is intense, and we cannot assure that they will be available when required, or that we will have the ability to attract and retain them. We have not entered into an employment agreement or similar arrangements with any of our executive officers. As such, there are no contractual relationships guaranteeing that any of our executive officers will stay with us and continue our operations, and any of our executive officers can terminate their employment relationship with us at any time. The loss of services of any one or more of these individuals may have a material and adverse effect on our Company and our business prospects.

We manufacture heavy machinery, which is used by our customers at excavation and construction sites, ports and inland terminals and on high-traffic roads. Any defect in or improper operation of our equipment can result in personal injury and death, and damage to or destruction of property, any of which could cause product liability claims to be filed against us. The amount and scope of our insurance coverage may not be adequate to cover all losses or liabilities we may incur in the event of a product liability claim. We may not be able to maintain insurance of the types or at the levels we deem necessary or adequate or at rates we consider reasonable. A successful claim brought against us in excess of available insurance coverage or a requirement to participate in a product recall may have a material adverse effect on our business.

In addition, certain of our equipment is subject to rules limiting emissions and other climate related rules and regulation. In addition, several of our products contain enginescomponents that must comply with environmental, health and safety laws or regulations, including performance standards, promulgated by the Environmental Protection Agency and other state regulatory agencies. These performance standards may change or become more stringent in the future. In addition, we may become subject to additional legislation, regulations or accords regarding climate change, and compliance with any new rules could be difficult and costly as a result of increased energy, environmental, and other costs and capital expenditures to comply with any such legislation, regulation or accord. Changes in these requirements could also cause us to undertake costly measures to redesign or modify our equipment or otherwise adversely affect the manufacturing processes of our products. Such changes could also impact operations of our suppliers and customers. In addition, we may incur material costs or liabilities in connection with other regulatory requirements applicable to our business, including, for example, state regulation of our component equipment, the accuracy of weights and measures and the maximum weight transportable on highways and roads.

From time to time, we may be involved in various legal proceedings that arise in the ordinary course of our business.and subject to government investigations. We are unable to predict when claims or matters will arise and the extent to which they will affect our business, and the international nature of our business exposes us to legal and regulatory matters that arise in foreign jurisdictions as well. We could incur significant expenses to administer and defend such matters, and any judgments or fines imposed on us could significantly impact our financial condition. Our business may be adversely impacted by the outcome of legal proceedings and other contingencies that cannot be predicted with certainty. We estimate loss contingencies and establish reserves based on our assessment where

liability is deemed probable and reasonably estimable given the facts and circumstances known to us at a particular point in time. Subsequent developments may affect our assessment and estimates of the loss contingencies recognized as liabilities. These matters could also significantly divert the attention of our management.

We hold numerous patents covering technology and applications related to many of our products and systems, as well as numerous trademarks and trade names registered with the U.S. Patent and Trademark Office and in foreign countries. Our existing or future patents or trademarks may not adequately protect us against infringements, and pending patent or trademark applications may not result in issued patents or trademarks. Our patents, registered trademarks and patent applications, if any, may not be upheld if challenged, and competitors may develop similar or superior methods or products outside the protection of our patents. This could reduce demand for our products and materially decrease our revenues. If our products are deemed to infringe upon the patents or proprietary rights of others, we could be required to modify the design of our products, change the name of our products or obtain a license for the use of some of the technologies used in our

Our operations are dependent upon our information technology systems, which encompass all of our major business functions. We rely upon our information technology systems to run critical functions, including accounting and financial information systems, process receivables, manage and replenish inventory, fill and ship customer orders on a timely basis and coordinate our sales activities across all products and services. A substantial disruption in our information technology systems for any prolonged time period could result in problems and delays in generating critical financial and operational information, processing receivables, receiving inventory and supplies, and filling customer orders. These disruptions could adversely affect our operations as well as our customer service and relationships. Our systems, or those of our significant customers or suppliers, might be damaged or interrupted by natural or man-made events or by computer viruses, physical or electronic break-ins or similar disruptions affecting the global Internet. In addition, we rely on a number of third-party service providers to execute certain business processes and maintain certain information technology systems and infrastructure, and any breach of security or disruption in their systems could impair our ability to operate effectively. Such disruptions, delays, problems or associated costs relating to our systems or those of our significant customers, suppliers or third-party providers could have a material adverse effect on our operations, operating results and financial condition.

In the ordinary course of business, we rely upon information technology networks and systems to process, transmit and store electronic information and to manage or support a variety of business functions, including supply chain, manufacturing, distribution, invoicing and collection of payments. We use information technology systems to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information and the proprietary business information of customers and suppliers, as well as personally identifiable information of customers and employees, in data centers and on information technology networks. The secure operation of these networks and the processing and maintenance of this information is critical to our business operations and strategy. Despite our efforts to protect our systems and confidential information, we have experienced cybercrime in the past and may be vulnerable to material security breaches, theft, misplaced, lost or corrupted data, programming errors, employee errors and/or malfeasance or other disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophic events. The occurrence of any of these events could compromise our networks, and the information stored there could be accessed, publicly disclosed, modified, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disrupted operations, production downtimes and damage our reputation, any of which could have an adverse effect on our business. While we have not experienced any material losses relating to cybercrime or other information security breaches to date, there can be no assurance that we will not suffer such significant losses in the future.

None.

As of December 31, 2020,2022, our manufacturing, warehouse and office facilities total approximately 3.73.4 million square feet of space globally. We believe all properties to be well maintained and adequate for present use, with adequatesufficient capacities for current and projected needs. From time to time, we may determine that certain ofneeds as our properties exceed our requirements asbusiness is presently conducted. As we continue to optimize our global footprint.footprint, we may identify properties or expansion opportunities at existing locations that provide growth opportunity or determine that certain of our current properties no longer meet our requirements. Such new properties may be leased or purchased, and current properties may be modified, sold, leased or utilized in another manner.

Our corporate headquarters are in owned offices located in Chattanooga, Tennessee. Additional administrative offices are located inside and outside the United States.

The following table lists the principal locations (defined as greater than 20,000 square feet) that are owned or leased by us, as denoted, and which are utilized in our continuing business operations:

Currently, weWe are involved in a number of legal proceedings.proceedings arising in the ordinary course of our business. For a discussion of contingencies related to legal proceedings, see Note 16, Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

PART II

Our common stock is traded on the Nasdaq National Market under the ticker symbol "ASTE". 

Our current policy is to pay quarterly cash dividends on our common stock of $0.11 per share. We paid cash of $11.2 million and $10.2 million for dividends of $10.0 million each in 20202022 and 2019,2021, respectively. The following table details dividends paid per share during 2022 and 2021:

Dividends are paid when, as and if declared at the discretion of our Board of Directors (the "Board") from funds legally available for that purpose. While our Board currently expects to continue regular quarterly cash dividends, the declaration and amount ofany future cash dividends are subjectdetermination relating to the Board's sole discretion and their periodic review of our dividend policy will be made at the Board's discretion and will depend uponon a number of factors including our earnings, financial condition, liquidity needs, capital requirements, regulatory and contractual restrictions, business plans and opportunities and other factors deemed relevant by our Board. In addition, our payment of dividends may be limited by restrictive covenants in making and setting dividend policy.our revolving credit facility agreement.

As announcedThe following table provides information with respect to the public in a Form 8-K filing on July 30, 2018, we approved a share repurchase program, which authorizes us to repurchase up to $150.0 millionour purchases of our common stock. As ofstock during the three months ended December 31, 2020, the maximum dollar value of shares available for repurchase under the plan is approximately $126.0 million. No shares were repurchased under the plan during 2020.2022:

The following stock performance graph below is intended to show our stock performance compared with that of comparable companies. The stock performance graph compares the cumulative five-year total return provided to shareholders onof Astec Industries, Inc.'s common stock relative to the cumulative total returns of the Russell 2000 index, our broad equity market comparative index, the S&P 600 Industrials index and our defined peer group.

Historically, our second stock performance comparative has been our defined peer group representative of our definitive Proxy peer group which includes: ALG, AIMC, CIR, CMCO, CVGI, EPAC, NPO, FSS, GBX, LNN, MTW, NDSN, SHYF, SPXC, SXI, TTC and WNC ("Peer Group").

The graph assumes that the value of an investment in our common stock, in eachthe Russell 2000 index, in the S&P 600 Industrials index and in each of the peer groupsPeer Group was $100 on December 31, 20152017 and assumes reinvestment of all dividends as well as the relative performance of each through December 31, 2020.2022.

We design, engineer, manufacture and market equipment and components used primarily in road building and related construction activities, as well as certain other products. Our products are used in each phase of road building, from quarrying and crushing the aggregate to application of the road surface for both asphalt and concrete. We also manufacture certain equipment and components unrelated to road construction, including equipment for the mining, quarrying, construction and demolition industries and port and rail yard operators; industrial heat transfer equipment; commercial whole-tree pulpwood chippers; horizontal grinders; blower trucks; commercial and industrial burners; and combustion control systems.

Our products are marketed both domestically and internationally primarily to asphalt and concrete producers; highway and heavy equipment contractors; utility contractors; sand and gravel producers; construction, demolition, recycle and crushing contractors; forestry and environmental recycling contractors; mine and quarry operators; port and inland terminal authorities; power stations and domestic and foreign government agencies. In addition to equipment sales, we manufacture and sell replacement parts for equipment in each of our product lines and replacement parts for some competitors' equipment. The distribution and sale of replacement parts is an integral part of our business.

Highlights of our financial results as of and for the year ended December 31, 20202022 as compared to the same period of the prior year include the following:

Our multi-year phased implementation of 33 companiesa standardized ERP system across our global organization will replace much of our existing disparate core financial systems. The upgraded ERP will initially convert our internal operations, manufacturing, finance, human capital resources management and customer relationship systems to cloud-based platforms. This new ERP system will provide for standardized processes and integrated technology solutions that are included in our consolidated financial statements, of which 25 represent our manufacturing sitesenable us to better leverage automation and sites thatprocess efficiency, transforming how we connect people, products and processes to operate as sales offices for our manufacturing locations. During the first quarter of 2020, we completed an internal reorganization focused on transitioning from a decentralized management structure to a more centralized structure with major directives and decisions being made at the segment and/or parent company level. As a resultOneASTEC. An implementation of this reorganization, we realignedscale is a major financial undertaking and has required, and will continue to require, substantial time and attention of management and key employees. We have materially completed the ERP global design in 2022, launched the human capital resources module throughout our reportable segments moving from threedomestic sites in January 2023 and expect to two reportable segments (plus Corporate) - Infrastructure Solutions and Materials Solutions. Our two reportable business segments comprise sites based uponconvert the natureoperations of one manufacturing site along with Corporate in 2023 to set the products or services produced,foundation before accelerating the typeimplementation at additional manufacturing sites. We anticipate incurring total costs associated with the ERP implementation in the range of customer for the products, the similarity of economic characteristics, the manner$125 to $150 million, with an estimated $25 to $30 million incurred per year beginning in which management reviews results and the nature of the production process, among other considerations.2022.

The Corporate category consistsIn addition, in the first quarter of 2022, a lean manufacturing initiative at one of our parent companylargest sites was initiated and Astec Insurance Company ("Astec Insurance"), a captive insurance company,is expected to drive improvement in gross margin at that site. We substantially completed the design efforts for this project during 2022. We also began executing investments to acquire and install manufacturing equipment intended to drive increased efficiencies in our production processes. We plan to continue these capital investments during 2023, which do not meetare anticipated to be completed by the requirements for separate disclosure as an operating segment or inclusion in oneend of the year. Gross margin improvements are expected to be realized with the project completion in early to mid-2024. This improvement is intended to serve as the optimal blueprint for our other reporting segments. We evaluate performancemanufacturing facilities.

Costs incurred during the year ended December 31, 2022 were $25.5 million, which represent costs directly associated with the SFG initiatives and allocate resources to our operating segments based on profit or loss from operations before United States ("which cannot be capitalized in accordance with U.S.") federal income taxes, state deferred taxes and corporate overhead and, thus, these GAAP. These costs are included in "Selling, general and administrative expenses" in the Corporate category.Consolidated Statements of Operations. Additionally, at December 31, 2022, we have capitalized $17.8 million in deferred implementation costs associated with the ERP implementation that will be amortized ratably over the remaining contract term once the ERP is ready for use, of which $1.2 million and $16.6 million were included in "Prepaid expenses and other assets" and "Other long-term assets" in the Consolidated Balance Sheets, respectively.

Our financial performance is affected by a number of factors, including the cyclical nature and varying conditions of the markets we serve. Demand in these markets fluctuates in response to overall economic conditions and is particularly sensitive to the amount of public sector spending on infrastructure development, privately funded infrastructure development and changes in the prices of liquid asphalt, oil, and natural gas and steel. In addition, many of our markets are highly competitive, and our products compete worldwide with similar products produced and sold by a number of other manufacturers and dealersdealers.

production materials, parts and supplies and manufacturing labor shortages which have and may continue to impact our ability to satisfy the orders in our backlog in a manner that produce and sell similar products.meets the timelines of our customers.

Federal funding provides a significant portion of all highway, street, roadway and parking construction in the United States. We believe that federal highway funding influences the purchasing decisions of our customers, who are typically more amenable to making capital equipment purchases with long-term federal legislation in place. Federal transportation funding underAs noted above, the Fixing America's Surface Transportation Act ("FAST Act"), which was setU.S. government enacted the IIJA in November 2021. The IIJA allocates $548 billion in government spending to expire on September 30, 2020, was temporarily extended for one year through September 30, 2021.new infrastructure over the five-year period concluding in 2026, with certain amounts specifically allocated to fund highway and bridge projects. We believe athat multi-year highway programprograms (such as the FAST Act)IIJA) will have the greatest positive impact on the road construction industry and allow our customers to plan and execute longer-term projects. Given the inherent uncertainty in the political process, the level of governmental funding for federal highway projects will similarly continue to be uncertain. Although continued funding under the FAST Act or funding of a bill passed by the current administration is expected, it may be at lower levels than originally approved or anticipated.

Significant portions of our revenues from the Infrastructure Solutions segment relate to the sale of equipment involved in the production, handling, recycling or application of asphalt mix. Liquid asphalt is a by-product of oil refining. An increase or decrease in the price of oil impacts the cost of asphalt, which is likely to alter demand for asphalt and therefore affect demand for certain of our products. While increasing oil prices may have a negative financial impact on many of our customers, our equipment can use a significant amount of recycledreclaimed asphalt pavement, thereby partially mitigating the effect of increased oil prices on the final cost of asphalt for the customer. We continue to develop products and initiatives to reduce the amount of oil and related products required to produce asphalt. Oil prices increased throughout 2021 and 2022, reaching a peak in the third quarter and subsequently stabilizing during the fourth quarter of 2022. Entering 2023, oil prices continue to remain at relatively high levels with price volatility makesmaking it difficult to predict the costs of oil-based products used in road construction such as liquid asphalt and gasoline. Oil prices have routinely fluctuated in recent years and are expected to continue to fluctuate in the future. In 2021,Based on the current macroeconomic environment, including the ongoing impact of the conflict in Ukraine, we expectanticipate that with increasing demand from the rebound of industrial activity after the slowdown experienced in 2020 with the COVID-19 pandemic thatoil prices will increaseremain at relatively high levels in 2021.2023.

Net sales decreased $145.2increased $179.0 million or 12.4%16.3% to $1,024.4$1,274.5 million in 20202022 from $1,169.6$1,095.5 million in 2019. Sales are2021. The increase in net sales was primarily driven by changes in the volume, pricing and mix of sales that generated primarily from newincreases in (i) equipment purchases made by customers for use in construction of privately funded infrastructure, public sector spending on infrastructure and sales of $141.1 million, (ii) parts and component sales of $34.6 million, (iii) service and equipment for the aggregate, mining, quarryinginstallation revenue of $7.1 million and recycling markets. Excluding the $20.0(iv) freight revenue of $4.2 million wood pellet plant sale recordedpartially offset by decreased used equipment sales of $4.2 million and other revenue of $3.8 million primarily driven by higher utilization of our interest subsidy programs offered to certain of our dealer customers. Included in the second quarterthese net increases is $4.4 million of 2019, totalincremental net sales decreased $125.2from an acquired business. Sales reported by our foreign subsidiaries in U.S. dollars for 2022 would have been $18.6 million or 10.9%.higher had foreign exchange rates been the same as the 2021 rates.

Domestic sales for 20202022 were $817.0$1,014.3 million or 79.8%79.6% of net sales compared to $908.5$842.1 million or 77.7%76.9% of net sales for 2019, a decrease2021, an increase of $91.5$172.2 million or 10.1%20.4%. Excluding the 2019 saleDomestic sales increased primarily due to: (i) $144.3 million higher equipment sales (ii) $25.6 million higher parts and component sales, (iii) $4.7 million higher service and equipment installation revenue and (iv) $4.7 million higher freight revenue. These increases were partially offset by decreased other revenue of a wood pellet plant, domestic$3.6 million primarily driven by higher utilization of our interest subsidy programs offered to certain of our dealer customers and lower used equipment sales for 2020 were $817.0of $3.5 million. Included in these net increases is $2.3 million or 79.8% of incremental net sales compared to $888.5 million or 77.3% of net sales for 2019, a decrease of $71.5 million or 8.0%. We experienced decreased domestic sales for both our Infrastructure Solutions and Materials Solutions segments during 2020, including for the discontinuation of oil and gas drilling product lines and exit of our Enid site.from an acquired business.

International sales for 20202022 were $207.4$260.2 million or 20.2%20.4% of net sales compared to $261.1$253.4 million or 22.3%23.1% of net sales for 2019, a decrease2021, an increase of $53.7$6.8 million or 20.6%2.7%. SalesInternational sales increased primarily due to higher parts and component sales and service revenue of Infrastructure Solutions related$9.0 million and $2.4 million, respectively. These increases were partially offset by $3.2 million lower equipment between periods increased while equipment sold by the Materials Solutions segment decreased between 2019 and 2020. Reported sales for 2020 were lower by $19.7sales. Included in these net increases is $2.1 million for our Omagh site, which experienced a government mandated temporary closure. The remaining sales decreases came from various other government mandated shutdowns in the countries in which we operate.

GrossConsolidated gross profit for 20202022 was $240.1$264.1 million or 23.4%20.7% of net sales as compared to $239.4$249.5 million or 20.5%22.8% of net sales in 2019,2021, an increase of $0.7$14.6 million or 0.3%5.9%. ExcludingThe increase was primarily driven by the 2019 sale of a wood pellet plant, the 2020 gross profit was $240.1 million or 23.4%impact of net sales compared to $219.4 million or 19.1% of net sales for 2019, an increase of $20.7 million or 9.4%. Overall gross margins were positively impacted by a change in salesfavorable volume, pricing and mix that resulted in increased salesgenerated $131.8 million higher gross profit. These increases were partially offset by the impact of higher margin products as a percentageinflation on materials, labor and overhead of total sales in 2020.$104.0 million and manufacturing inefficiencies of $14.9 million largely due to logistics and manufacturing throughput disruptions.

Selling, general and administrative expenseexpenses for 2020 was $166.92022 were $216.1 million or 16.3%17.0% of net sales compared to $183.9$200.6 million or 15.7%18.3% of net sales for 2019, a decrease2021, an increase of $17.0$15.5 million or 9.2%7.7%, primarily due to: (i) $12.1 million increased costs related to decreased consulting fees,our SFG transformation program, (ii) $3.2 million of exhibit, promotional and travel costs due to the return of in-person industry conferences and employee-relatedbusiness activities, (iii) $2.8 million incremental expenses associated with MINDS, (iv) $2.0 million of acquisition and integration related costs mainly associated with the closureacquisition of MINDS and (v) increased net payroll and employee benefit costs due to increased headcount throughout our Mequon site during 2020, whichorganization partially offset by lower health insurance claims experience and reduced deferred compensation program costs by $5.6 million.associated with our stock price changes. These decreasesincreases were partially offset by increased costs from the acquisitionslower depreciation and amortization expense of Blair$3.7 million and St. Bruno.reduced expenses related to closing a site location of $2.1 million.

Research and development expenses decreased $5.1increased $5.0 million or 18.8%18.9% to $22.1$31.5 million in 20202022 from $27.2$26.5 million in 2019. During 2020, we presented various new and/or improved equipment models from the 20192021. Increased research and development spending while continuing our 2020 effort on researchcosts were primarily driven by higher prototype materials costs and development of new products and improvements to existing product lines as well as adaptation of those products to other markets. Due to COVID-19 constraints and the ongoing restructuring, these expenses were reduced during 2020.increased personnel-related expenses.

In late 2019, we beganRestructuring, asset impairment charges and the processnet gain on the sale of property and equipment for the years ended December 31, 2022 and 2021 are presented below and relate primarily to our SFG initiatives and recent leadership change: 

See Note 22, Strategic Transformation and Restructuring, Impairment and Other Asset Charges, of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for discussion of the individual restructuring actions taken and right-sizing in conjunction with our overall strategic transformation. Restructuring,the impairment and other asset charges recorded.

Income tax expense for the year ended December 31, 2020 and 2019 are presented below: 

The items having the most significant impact on the effective tax rate for 20202022 include discrete tax expense for a benefitforeign valuation allowance of $9.5$5.5 million from a carryback of its 2018for net operating losslosses ("NOL"NOLs") to prior years. The Coronavirus Aid, Relief and Economic Security ("CARES") Act, enacted and signed into law on March 27, 2020, contained modifications to NOL carryback provisions and allowed us to carrybackat our 2018 NOL recorded at a 21% statutory tax rate to prior tax years. This carryback to tax years with a higher statutory rateBrazilian subsidiary partially offset by the net benefits of 35% resulted in the tax benefit. Also impacting the effective tax rate was a benefit of $4.3$2.1 million for research and development tax credits and expense$0.9 million from the foreign derived intangible income deduction. The items having the most significant impact on the effective tax rate for 2021 include a benefit from net releases of $4.0valuation allowances of $8.1 million primarily related to unrecognizedNOLs at our Brazilian and German subsidiaries and a net benefit of $2.3 million for research and development tax benefits forcredits partially offset by a $4.4 million provision from the dissolution of our Germany subsidiary. Future utilization of our NOLs and state tax positions taken in 2020.credit carryforwards is evaluated on a periodic basis, and the valuation allowance is adjusted accordingly. There is no guarantee that we will not incur additional valuation allowances to our NOLs.

The backlog of orders at December 31, 20202022 was $360.5$912.7 million compared to $263.7$762.6 million at December 31, 2019,2021, an increase of $96.8$150.1 million or 36.7%19.7%. Domestic and international backlogs increased $146.3 million or 23.3% and $3.8 million or 2.8%, respectively. The increasebacklog increased $117.8 million to $567.1 million in the backlog of orders was due to an increase in domestic backlog of $86.2 million or 44.3% and an increase in international backlog of $10.6 million or 15.4%. The Infrastructure Solutions segment's backlogssegment and increased $28.6$27.9 million or 15.1% from 2019; andto $341.2 million in the Materials Solutions segment'ssegment. The Corporate and Other backlog increased $68.2represents our controls and automation business and totaled $4.4 million or 92.0%as of December 31, 2022. Increased orders were driven by higher demand from 2019 levels.the continuation of dealer inventory replenishment and the infrastructure investment by the United States' government under the IIJA enacted in November 2021. The higher demand has contributed to longer lead times.