UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2016~~March 31, 2017
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-11595

Astec Industries, Inc.
(Exact name of registrant as specified in its charter)

Tennessee			62-0873631
(State or other jurisdiction of			(I.R.S. Employer Identification No.)
incorporation or organization)

1725 Shepherd Road, Chattanooga, Tennessee			37421
(Address of principal executive offices)			(Zip Code)

(423) 899-5898
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES ý		NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES ý		NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated ~~filer"~~filer," "smaller reporting company" and ~~"smaller reporting~~"emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer ý				Accelerated Filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company) Emerging Growth Company ☐				Smaller Reporting Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES ☐	NO ý


Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class	Outstanding at ~~October 25, 2016~~April 20, 2017
Common Stock, par value $0.20	~~23,044,305~~23,060,484


ASTEC INDUSTRIES, INC.
INDEX

PART I - Financial Information

	Item 1. Financial Statements (unaudited)

	Condensed Consolidated Balance Sheets as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016

	Condensed Consolidated Statements of Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~ ~~2016~~March 31, 2017 and ~~2015~~2016

	Condensed Consolidated Statements of Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30, 2016~~ March 31, 2017 and ~~2015~~2016

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~

	Condensed Consolidated Statement of Equity for the ~~Nine~~Three Months Ended ~~September 30, 2016~~March 31, 2017

	Notes to Unaudited Condensed Consolidated Financial Statements

	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

	Item 3. Quantitative and Qualitative Disclosures about Market Risk

	Item 4. Controls and Procedures

PART II - Other Information

	Item 1. Legal Proceedings

	Item 1A. Risk Factors

	Item 6. Exhibits

PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements

Astec Industries, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)	Astec Industries, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)					Astec Industries, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited)
		September 30, 2016		December 31, 2015			March 31, 2017		December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents		$	52,474	$	25,062		$	55,401	$	82,371
Investments			713		1,539			1,408		1,024
Trade receivables			108,436		98,865			151,538		106,659
Other receivables			3,317		3,132			4,684		4,014
Inventories			399,718		384,776			372,570		360,404
Prepaid expenses and other			25,909		28,423			20,731		22,361
Total current assets			590,567		541,797			606,332		576,833
Property and equipment, net			178,167		170,206			182,223		180,538
Investments			14,094		11,540			13,734		13,965
Goodwill			41,958		30,835			41,047		40,804
Other long-term assets			37,053		22,975			31,152		31,461
Total assets		$	861,839	$	777,353		$	874,488	$	843,601
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt							$	697	$	4,632
Current maturities of long-term debt		$	2,159	$	4,528			2,717		2,538
Accounts payable			53,496		48,385			73,806		57,297
Income tax payable								8,193		747
Accrued product warranty			11,507		9,100			13,719		13,156
Customer deposits			75,766		40,082			38,949		39,102
Accrued payroll and related liabilities			20,926		17,375			18,006		25,693
Accrued loss reserves			3,213		2,838			2,720		2,852
Accrued income taxes payable			513		103
Other current liabilities			22,626		19,601			25,828		22,844
Total current liabilities			190,206		142,012			184,635		168,861
Long-term debt			4,781		5,154			3,599		4,116
Deferred income tax liabilities			1,819		2,348			1,630		1,669
Other long-term liabilities			20,102		17,981			20,274		20,114
Total liabilities			216,908		167,495			210,138		194,760
Shareholders' equity			643,884		608,072			663,025		647,830
Non-controlling interest			1,047		1,786			1,325		1,011
Total equity			644,931		609,858			664,350		648,841
Total liabilities and equity		$	861,839	$	777,353		$	874,488	$	843,601

See Notes to Unaudited Condensed Consolidated Financial Statements

Astec Industries, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Net sales	$	247,752		$	211,350		$	820,868		$	768,141		$	318,401		$	278,721
Cost of sales		192,363			166,212			620,071			594,724			242,630			206,765
Gross profit		55,389			45,138			200,797			173,417			75,771			71,956
Selling, general, administrative and engineering expenses		43,950			41,023			132,716			128,136			53,121			43,806
Income from operations		11,439			4,115			68,081			45,281			22,650			28,150
Interest expense		264			505			1,057			1,222			265			467
Other income, net of expenses		505			510			1,324			2,543			512			544
Income from operations before income taxes		11,680			4,120			68,348			46,602			22,897			28,227
Income taxes		4,845			2,162			25,694			18,070			7,817			10,549
Net income		6,835			1,958			42,654			28,532			15,080			17,678
Net loss attributable to non-controlling interest		(3	)		(334	)		(119	)		(669	)		(40	)		(65	)
Net income attributable to controlling interest	$	6,838		$	2,292		$	42,773		$	29,201		$	15,120		$	17,743

Earnings per common share
Net income attributable to controlling interest:
Basic	$	0.30		$	0.10		$	1.86		$	1.27		$	0.66		$	0.77
Diluted	$	0.30		$	0.10		$	1.85		$	1.26		$	0.65		$	0.77
Weighted average number of common shares outstanding:
Basic		23,001			22,943			22,989			22,930			23,013			22,965
Diluted		23,145			23,121			23,138			23,118			23,176			23,135
Dividends declared per common share	$	0.10		$	0.10		$	0.30		$	0.30		$	0.10		$	0.10

See Notes to Unaudited Condensed Consolidated Financial Statements

Astec Industries, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2016 2015 2016 2015
Net income $ 6,835 $ 1,958 $ 42,654 $ 28,532
Other comprehensive income (loss):
Change in unrecognized pension and post-retirement
  benefit costs
-- -- -- 28
Income tax (provision) benefit on change in unrecognized pension
  and post-retirement benefit costs
111 (30 ) -- (21 )
Foreign currency translation adjustments 69 (7,003 ) (219 ) (10,721 )
Income tax (provision) benefit on foreign currency translation
  adjustments
(57 ) 868 (783 ) 808
Other comprehensive income (loss) 123 (6,165 ) (1,002 ) (9,906 )
Comprehensive income (loss) 6,958 (4,207 ) 41,652 18,626
Comprehensive loss attributable to non-controlling interest (130 ) (607 ) (55 ) (1,285 )
Comprehensive income (loss) attributable to controlling interest $ 7,088 $ (3,600 ) $ 41,707 $ 19,911

	Three Months Ended March 31,
	2017		2016
Net income	$	15,080	$	17,678
Other comprehensive income:
Foreign currency translation adjustments		2,030		1,730
Income tax provision on foreign currency translation adjustments		--		(335	)
Other comprehensive income		2,030		1,395
Comprehensive income		17,110		19,073
Comprehensive income attributable to non-controlling interest		8		60
Comprehensive income attributable to controlling interest	$	17,102	$	19,013

See Notes to Unaudited Condensed Consolidated Financial Statements

Astec Industries, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)	Astec Industries, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)							Astec Industries, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited)
		Nine Months Ended September 30,							Three Months Ended March 31,
		2016			2015				2017			2016
Cash flows from operating activities:
Net income		$	42,654		$	28,532			$	15,080		$	17,678
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization			18,118			18,042				6,411			5,870
Provision (benefit) for doubtful accounts			327			(161	)
Provision for doubtful accounts										436			289
Provision for warranties			13,135			11,723				3,996			3,615
Deferred compensation provision (benefit)			1,240			(206	)			(376	)		380
Stock-based compensation			2,021			603				1,017			511
Deferred income tax benefit			(2,019	)		(3,959	)
Gain on disposition of fixed assets			(322	)		(234	)			(133	)		(71	)
Distributions to SERP participants			(525	)		(2,649	)			(123	)		(92	)
Change in operating assets and liabilities:
Sale (purchase) of trading securities, net			(1,545	)		(698	)			406			(678	)
Trade and other receivables			(5,224	)		2,504				(45,910	)		(17,667	)
Inventories			(8,120	)		3,628				(12,166	)		(4,728	)
Prepaid expenses and other assets			(3,132	)		3,833
Prepaid expenses										778			(4,042	)
Other assets										(377	)		1,384
Accounts payable			3,234			(14,581	)			16,276			8,193
Accrued payroll and related expenses										(7,687	)		(975	)
Accrued product warranty			(11,011	)		(11,499	)			(3,460	)		(2,357	)
Customer deposits			35,685			(12,523	)			(154	)		22,138
Prepaid and income taxes payable, net			5,655			(1,792	)			7,877			9,745
Other			6,602			1,581				3,387			5,870
Net cash provided by operating activities			96,773			22,144
Net cash provided (used) by operating activities										(14,722	)		45,063
Cash flows from investing activities:
Business acquisition, net of cash acquired			(39,613	)		178
Expenditures for property and equipment			(17,483	)		(15,483	)			(5,406	)		(5,054	)
Proceeds from sale of property and equipment			577			378				140			111
Other			(174	)		529				(292	)		(12	)
Net cash used by investing activities			(56,693	)		(14,398	)			(5,558	)		(4,955	)
Cash flows from financing activities:
Payment of dividends			(6,912	)		(6,893	)			(2,306	)		(2,304	)
Borrowings under bank loans			1,695			85,441				--			1,394
Repayments of bank loans			(5,570	)		(85,287	)			(4,601	)		(1,120	)
Sale (purchase) of Company shares held by SERP, net			(99	)		2,053				285			(20	)
Withholding tax paid upon vesting of restricted stock units			(1,024	)		(600	)			(501	)		(1,022	)
Purchase of subsidiary's shares			(724	)		(653	)
Other			--			420
Net cash used by financing activities			(12,634	)		(5,519	)			(7,123	)		(3,072	)
Effect of exchange rates on cash			(34	)		(1,265	)			433			347
Net increase in cash and cash equivalents			27,412			962
Net increase (decrease) in cash and cash equivalents										(26,970	)		37,383
Cash and cash equivalents, beginning of period			25,062			13,023				82,371			25,062
Cash and cash equivalents, end of period		$	52,474		$	13,985			$	55,401		$	62,445

See Notes to Unaudited Condensed Consolidated Financial Statements

Astec Industries, Inc.	Astec Industries, Inc.																							Astec Industries, Inc.
Condensed Consolidated Statement of Equity	Condensed Consolidated Statement of Equity																							Condensed Consolidated Statement of Equity
For the Nine Months Ended September 30, 2016
For the Three Months Ended March 31, 2017																								For the Three Months Ended March 31, 2017
(in thousands)	(in thousands)																							(in thousands)
(unaudited)	(unaudited)																							(unaudited)


		Common Stock Shares		Common Stock Amount		Additional Paid-in Capital			Accum- ulated Other Compre- hensive Loss			Company Shares Held by SERP			Retained Earnings			Non- controlling Interest			Total Equity				Common Stock Shares		Common Stock Amount		Additional Paid-in- Capital			Accum- ulated Other Compre- hensive Loss			Company Shares Held by SERP			Retained Earnings			Non- controlling Interest			Total Equity
Balance, December 31, 2015			22,988	$	4,598	$	137,883		$	(23,564	)	$	(1,778	)	$	490,933		$	1,786		$	609,858
Net income (loss)			--		--		--			--			--			42,773			(119	)		42,654
Other comprehensive loss			--		--		--			(1,002	)		--			--			--			(1,002	)
Balance, December 31, 2016																										23,046	$	4,609	$	139,970		$	(31,562	)	$	(1,958	)	$	536,771		$	1,011		$	648,841
Net income																										--		--		--			--			--			15,120			(40	)		15,080
Other comprehensive income																										--		--		--			2,030			--			--			--			2,030
Change in ownership percentage of subsidiary																										--		--		--			--			--			--			184			184
Dividends declared			--		--		7			--			--			(6,919	)		--			(6,912	)			--		--		2			--			--			(2,308	)		--			(2,306	)
Stock-based compensation			3		1		2,020			--			--			--			--			2,021				--		--		567			--			--			--			--			567
Change in ownership percent of subsidiary			--		--		--			--			--			--			(1,310	)		(1,310	)
Stock issued under incentive plans			53		10		(10	)		--			--			--			--			--				14		3		(3	)		--			--			--			--			--
Withholding tax paid upon vesting of RSUs			--		--		(1,024	)		--			--			--			--			(1,024	)			--		--		(501	)		--			--			--			--			(501	)
SERP transactions, net			--		--		27			--			(126	)		--			--			(99	)			--		--		162			--			123			--			--			285
Cumulative effect of adopting ASU No. 2016-09			--		--		150			--			--			(95	)		--			55
Other			--		--		--			--			--			--			690			690				--		--		--			--			--			--			170			170
Balance, September 30, 2016			23,044	$	4,609	$	139,053		$	(24,566	)	$	(1,904	)	$	526,692		$	1,047		$	644,931
Balance, March 31, 2017																										23,060	$	4,612	$	140,197		$	(29,532	)	$	(1,835	)	$	549,583		$	1,325		$	664,350

See Notes to Unaudited Condensed Consolidated Financial Statements

ASTEC INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar and share amounts in thousands, except per share amounts, unless otherwise specified)

Note 1. Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with ~~accounting principles~~U.S. generally accepted ~~in the United States of America~~accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Act of 1933. Accordingly, they do not include all of the information and footnotes required by ~~accounting principles~~U.S. generally accepted ~~in the United States of America~~accounting principles ("U.S. GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ~~three and nine-month periods~~three-month period ended ~~September 30, 2016~~March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2016.~~2017. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Astec Industries, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

The unaudited condensed consolidated balance sheet as of December 31, ~~2015~~2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

Dollar and share amounts shown are in thousands, except per share amounts, unless otherwise specified.

~~Certain amounts~~ ~~previously reported for 2015 have been reclassified to conform with current year presentation.~~

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ~~("FASB"~~('FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with ~~Customers (Topic 606)"~~Customers", which supersedes existing revenue guidance under U.S. GAAP. The standard's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The implementation of this new standard will require companies to use more judgment and to make more estimates than under current guidance. The standard, as amended, is effective for public companies for annual periods beginning after December 15, 2017. The Company plans to adopt the new standard effective January 1, 2018. Due to the decentralized structure of the Company, corporate management requested documented revenue streams from its 16 manufacturing subsidiaries to assist in its effort to determine the effect the new standard will have on its financial reporting. A meeting was also held in September 2016 with corporate management, controllers of the manufacturing subsidiaries and an outside revenue expert to further review the Company's various revenue streams and the change in timing of when revenue may be recognized under the new guidance. The Company is still in the process of finalizing this review. Therefore, the Company has not yet determined ~~what~~the extent of the impact ~~if any, the~~ adoption of this new standard will have on the Company's financial position or results of operations.

In July 2015, the FASB issued ASU No. 2015-11, "Inventory (Topic 330): Simplifying the Measurement of Inventory", which changes the measurement basis for inventory from the lower of cost or market to lower of cost and net realizable value and also eliminates the requirement for companies to consider replacement cost or net realizable value less an approximate normal profit margin when determining the recorded value of inventory. The standard is effective for public companies in fiscal years beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt the standard effective October 1, 2016. The Company does not expect the adoption of this new standard will have a material impact on its financial position or results of operations.

In January 2016, the FASB issued ASU No. 2016-01, "Financial ~~Instruments—~~Instruments - Overall (Subtopic 825-10)", which requires, among other things, equity investments with readily determinable fair values, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income. The standard is effective for public companies in fiscal years beginning after December 15, 2017, and the Company expects to adopt the standard effective January 1, 2018. The Company has not yet determined what impact, if any, the adoption of this new standard will have on the Company's financial position or results of operations.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", which significantly changes the accounting for operating leases by lessees. The accounting applied by lessors is largely unchanged from that applied under previous guidance. The new guidance requires lessees to recognize lease assets and lease liabilities in the balance sheet, initially measured at the present value of the lease payments, for leases which were classified as operating leases under previous guidance. Lease cost included in the statement of income will be calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Lessees may make an accounting policy election to exclude leases with a term of 12 months or less from the requirement to record related assets and liabilities. The new standard is effective for public companies for fiscal years beginning after December 15, 2018. The Company plans to adopt the new standard effective January 1, 2019. The Company does not expect the adoption of this standard to have a material impact on its results of operations; however, the Company has not ~~yet~~ determined ~~what~~the impact the adoption of this new standard will have on ~~the Company's~~its financial ~~position or results of operations.~~position.

In March 2016, the FASB issued ASU No. 2016-08, "Revenue from Contracts with Customers (Topic 606)", which does not change the core principles of ASU No. 2014-09 discussed above, but rather clarifies the implementation guidance in order to eliminate the potential for diversity in practice arising from inconsistent application of the principal versus agent guidance. Under the new guidance, when an entity determines it is a principal in a transaction, the entity recognizes revenue in the gross amount of consideration; however in transactions where an entity determines it in an agent, the entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled. The standard is effective for public companies for annual periods beginning after December 15, 2017. The Company plans to adopt the new standard effective January 1, 2018. The Company has not yet determined what impact, if any, the adoption of this new standard will have on the Company's financial position or results of operations.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation—Stock Compensation (Topic 718)", as part of its Simplification Initiative. The standard's provisions impact several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification in the statement of cash flows. The standard is effective for public companies for annual periods beginning after December 15, 2016, with early adoption permitted. The Company adopted the new standard effective January 1, 2016 and has recorded a cumulative effect adjustment in retained earnings as of January 1, 2016 of $95, net of tax, related to the adoption of the new provisions allowing for restricted stock unit forfeitures to be accounted for at the time they occur as opposed to being estimated during the vesting period. Additionally, income tax benefits of $209, which would have been recorded in additional paid-in capital under prior guidance, have been recorded in the first quarter of 2016 consolidated income statements related to excess tax benefits resulting from the vesting of restricted stock units in 2016. As allowed under the provision's guidelines, amounts for 2015 have not been restated in the accompanying financial statements.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments". The standard changes how credit losses are measured for most financial assets and certain other instruments that currently are not measured through net income. The standard will require an expected loss model for instruments measured at amortized cost as opposed to the current incurred loss approach. In valuing available for sale debt securities, allowances will be required to be recorded, rather than the current approach of reducing the carrying amount, for other than temporary impairments. A cumulative adjustment to retained earnings is to be recorded as of the beginning of the period of adoption to reflect the impact of applying the provisions of the standard. The standard is effective for public companies for periods beginning after December 15, 2019 and the Company expects to adopt the new standard as of January 1, 2020. The Company has not yet determined what impact, if any, the adoption of this new standard will have on the Company's financial position or results of operations.

In August 2016, the FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)" which clarifies how certain cash receipts and cash payments should be presented on the statement of cash flows. The statement also addresses how the predominance principle should be applied when cash payments have aspects of more than one class of cash flows. The standard is effective for public companies in fiscal years beginning after December 15, 2017, and the Company expects to adopt the standard effective January 1, 2018. The Company has not determined the impact, if any, the adoption of this new standard will have on the Company's statement of cash flows.

9In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory," which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory, such as intangible assets, when the transfer occurs. This is a change from current guidance, which requires companies to defer the income tax effects of intercompany transfers of assets until the asset has been sold to an outside party or otherwise recognized by being depreciated, amortized, or impaired. The new guidance will require companies to defer the income tax effects of only intercompany transfers of inventory. The standard is effective for public companies in fiscal years beginning after December 15, 2018. Early adoption is permitted as of the beginning of an annual period and requires companies to apply a modified retrospective approach. The Company plans to adopt the new standard effective January 1, 2019. The Company has not yet determined what impact the adoption of this new standard will have on the Company's financial position or results of operations.

In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805), Clarifying the Definition of a Business," which provides additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for public companies for annual or interim periods beginning after December 15, 2017. The Company plans to adopt the new standard effective January 1, 2018. The Company does not expect the application of this standard to have a material impact on its financial position, results of operations or cash flows.

In January 2017, the FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment," which eliminates Step 2 from the goodwill impairment test for public companies. Currently, Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit's goodwill with the carrying amount of that goodwill. The new guidance stipulates that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, up to the amount of goodwill allocated to the reporting unit. The standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 with early adoption permitted. The Company plans to early adopt this standard for its annual impairment testing to be performed as of December 31, 2017. The Company does not expect the application of this standard to have a material impact on its financial position, results of operations or cash flows.

Note 2. Earnings per Share

Basic earnings per share are determined by dividing earnings by the weighted average number of common shares outstanding during each period. Diluted earnings per share include the potential dilutive effect of ~~options,~~ restricted stock units and shares held in the Company's Supplemental Executive Retirement Plan.

The following table sets forth the computation of net income attributable to controlling interest and the number of basic and diluted shares used in the computation of earnings per share:

	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2016		2015		2016		2015		2017		2016
Numerator:
Net income attributable to controlling interest	$	6,838	$	2,292	$	42,773	$	29,201	$	15,120	$	17,743
Denominator:
Denominator for basic earnings per share		23,001		22,943		22,989		22,930		23,013		22,965
Effect of dilutive securities:
Employee stock options and restricted stock units		79		114		85		124
Restricted stock units										102		106
Supplemental Executive Retirement Plan		65		64		64		64		61		64
Denominator for diluted earnings per share		23,145		23,121		23,138		23,118		23,176		23,135

Note 3. Receivables

Receivables are net of allowances for doubtful accounts of ~~$1,573~~$1,624 and ~~$1,837~~$1,511 as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, respectively.

Note 4. Inventories

Inventories consist of the following:

	September 30, 2016		December 31, 2015		March 31, 2017		December 31, 2016
Raw materials and parts	$	143,882	$	141,967	$	145,101	$	137,763
Work-in-process		149,258		113,859		128,027		115,613
Finished goods		82,656		104,879		77,932		84,898
Used equipment		23,922		24,071		21,510		22,130
Total	$	399,718	$	384,776	$	372,570	$	360,404

Raw ~~materials and parts~~material inventory is comprised of purchased steel and other purchased items for use in the manufacturing process or held for sale infor the ~~Company's~~ after-market parts business. The category also includes the manufacturing cost of completed equipment sub-assemblies produced for either integration into equipment manufactured at a later date or for sale in the Company's after-market parts business.

Work-in-process inventory consists of the value of materials, labor and overhead incurred to date in the manufacturing of incomplete equipment or incomplete equipment sub-assemblies being produced.

Finished goods inventory consists of completed equipment manufactured for sale to customers.

Used equipment inventory consists of equipment accepted in trade or purchased on the open market. The category also includes equipment rented to prospective customers on a short-term or month-to-month basis. Used equipment is valued at the lower of acquired or trade-in cost or ~~market~~net realizable value determined on each separate unit. ~~Each unit of rental equipment is valued at its original manufacturing cost and is reduced by an appropriate reserve each month during the period of time the equipment is rented.~~

Inventories are valued at the lower of cost (first-in, first-out) or ~~market,~~net realizable value, which requires the Company to make specific estimates, assumptions and judgments in determining the amount, if any, of reductions in the valuation of inventories to their net realizable values. The net realizable values of the Company's products are impacted by a number of factors, including changes in the price of steel, competitive sales pricing, quantities of inventories on hand, the age of the individual inventory items, market acceptance of the Company's products, ~~the Company's normal gross margins,~~ actions by ~~the Company's~~our competitors, the condition of ~~the Company's~~our used and rental inventory and general economic factors. Once an inventory item's value has been deemed to be less than cost, a net realizable value allowance is calculated and a new "cost basis" for that item is effectively established. This new cost is retained for that item until such time as the item is disposed of or the Company determines that an additional write-down is necessary. Additional write-downs may be required in the future based upon changes in assumptions due to general economic downturns in the markets in which the Company operates, changes in competitor pricing, new product design or other technological advances introduced by the Company or its competitors and other factors unique to individual inventory items.

The most significant component of the Company's inventory is steel. A significant decline in the market price of steel could result in a decline in the market value of the equipment or parts ~~the Company sells.~~we sell. During periods of significant declining steel prices, the Company reviews the valuation of its inventories to determine if reductions are needed in the recorded value of inventory on hand to its net realizable value.

The Company reviews the individual items included in its finished goods, used equipment and rental equipment inventory on a model-by-model or unit-by-unit basis to determine if any item's net realizable value is below its carrying ~~value each quarter.~~value. This analysis is expanded to include items in work-in-process and raw material inventory if factors indicate those items may also be impacted. In performing this review, judgments are made and, in addition to the factors discussed above, additional consideration is given to the age of the specific items of used or rental inventory, prior sales offers or lack thereof, the physical condition of the specific items and general market conditions for the specific items. Additionally, an analysis of raw material inventory is performed ~~each quarter~~ to calculate ~~any valuation write-downs~~reserves needed for obsolete inventory based upon quantities of items on hand, the age of those items and their recent and expected future usage or sale.

When the Company determines that the value of inventory has become impaired through damage, deterioration, obsolescence, changes in price levels, excessive levels of inventory or other causes, the Company reduces the carrying value to ~~estimated market~~the net realizable value based on estimates, assumptions and judgments made from the information available at that time.

Abnormal amounts of idle facility expense, freight, handling cost and wasted materials are recognized as current period charges.

Note 5. Property and Equipment

Property and equipment is stated at cost, less accumulated depreciation of ~~$216,588~~$224,994 and ~~$203,471~~$220,444 as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, respectively.

Note 6. Fair Value Measurements

The Company has various financial instruments that must be measured at fair value on a recurring basis, including marketable debt and equity securities held by Astec Insurance Company ("Astec Insurance"), the Company's captive insurance company, and marketable equity securities held in an unqualified Supplemental Executive Retirement Plan ("SERP"). The obligations of the Company associated with the financial assets held in the SERP also constitute a liability of the Company for financial reporting purposes and are included in other long-term liabilities in the accompanying condensed consolidated balance sheets. The Company's subsidiaries also occasionally enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates.

The carrying amount of cash and cash equivalents, trade receivables, other receivables, revolving debt, accounts payable and long-term debt approximates their fair value because of their short-term nature and/or interest rates associated with the instruments. Investments are carried at their fair value based on quoted market prices for identical or similar assets or, where no quoted prices exist, other observable inputs for the asset. The fair values of foreign currency exchange contracts are based on quotations from various banks for similar instruments using models with market based inputs.

Financial assets and liabilities are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The inputs used to measure the fair value are identified in the following hierarchy:

Level 1 -	Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 -	Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability.
Level 3 -	Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

As indicated in the tables below (which excludes the Company's pension assets), the Company has determined that all of its financial assets and liabilities as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 are Level 1 and Level 2 in the fair value hierarchy as defined above:

	September 30, 2016						March 31, 2017
	Level 1		Level 2		Total		Level 1		Level 2		Total
Financial Assets:
Trading equity securities:
SERP money market fund	$	90	$	--	$	90	$	374	$	--	$	374
SERP mutual funds		3,229		--		3,229		3,508		--		3,508
Preferred stocks		620		--		620		488		--		488
Trading debt securities:
Corporate bonds		5,109		--		5,109		5,601		--		5,601
Municipal bonds		--		2,441		2,441		--		2,290		2,290
Floating rate notes		98		--		98		121		--		121
Asset backed securities		--		694		694		--		611		611
US Treasury Notes								389		--		389
Other		--		2,526		2,526		--		1,760		1,760
Total financial assets	$	9,146	$	5,661	$	14,807	$	10,481	$	4,661	$	15,142

Financial Liabilities:
SERP liabilities	$	--	$	7,218	$	7,218	$	--	$	7,675	$	7,675
Derivative financial instruments		--		592		592		--		178		178
Total financial liabilities	$	--	$	7,810	$	7,810	$	--	$	7,853	$	7,853

	December 31, 2015						December 31, 2016
	Level 1		Level 2		Total		Level 1		Level 2		Total
Financial Assets:
Trading equity securities:
SERP money market fund	$	445	$	--	$	445	$	92	$	--	$	92
SERP mutual funds		2,864		--		2,864		3,335		--		3,335
Preferred stocks		742		--		742		475		--		475
Trading debt securities:
Corporate bonds		3,756		141		3,897		5,413		--		5,413
Municipal bonds		--		1,811		1,811		--		2,248		2,248
Floating rate notes		84		--		84		118		--		118
U.S. Treasury bills		404		--		404		388		--		388
Savings bonds		77		--		77
Asset backed securities								--		637		637
Other		--		2,755		2,755		--		2,283		2,283
Derivative financial instruments		--		1,265		1,265		--		144		144
Total financial assets	$	8,372	$	5,972	$	14,344	$	9,821	$	5,312	$	15,133

Financial Liabilities:
SERP liabilities	$	--	$	5,869	$	5,869	$	--	$	7,882	$	7,882
Derivative financial instruments		--		22		22		--		89		89
Total financial liabilities	$	--	$	5,891	$	5,891	$	--	$	7,971	$	7,971

The Company reevaluates the volume of trading activity for each of its investments at the end of each quarter and adjusts the level within the fair value hierarchy as needed. ~~There were no~~No investments ~~that~~ changed hierarchy levels ~~within the hierarchy during the quarter ended September 30, 2016.~~from December 31, 2016 to March 31, 2017.

The trading equity investments noted above are valued at their fair value based on their quoted market prices, and the debt securities are valued based upon a mix of observable market prices and model driven prices derived from a matrix of observable market prices for assets with similar characteristics obtained with the assistance of a nationally recognized third party pricing service. Additionally, a significant portion of the SERP's investments in trading equity securities are in money market and mutual funds. As these money market and mutual funds are held in a SERP, they are also included in the Company's liability under its SERP.

Trading debt securities are comprised of marketable debt securities held by Astec Insurance. Astec Insurance has an investment strategy that focuses on providing regular and predictable interest income from a diversified portfolio of high-quality fixed income securities.

Net unrealized gains or losses incurred on investments held as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 amounted to a net ~~gain~~losses of ~~$94~~$47 and ~~a net loss of $429,~~$107, respectively.

Note 7. Debt

On April 12, 2012, the Company and certain of its subsidiaries entered into an amended and restated credit agreement whereby Wells Fargo extended to the Company an unsecured line of credit of up to $100,000, including a sub-limit for letters of credit of up to $25,000. There were no borrowings outstanding under the agreement at any time during the ~~nine-month~~three-month period ended ~~September 30, 2016.~~March 31, 2017. Letters of credit totaling ~~$15,196,~~$8,496, including ~~$11,874~~$6,200 of letters of credit issued to banks in Brazil to secure the local debt of Astec do Brasil Fabricacao de Equipamentos Ltda. ("Astec Brazil"), were outstanding under the credit facility as of ~~September 30, 2016,~~March 31, 2017, resulting in additional borrowing ability of ~~$84,804~~$91,504 under the credit facility. The credit agreement has a five-year term expiring in April 2017. Borrowings under the agreement are subject to an interest rate equal to the daily one-month LIBOR rate plus a 0.75% margin, resulting in a rate of ~~1.29%~~1.74% as of ~~September 30, 2016.~~March 31, 2017. The unused facility fee is 0.175%. Interest only payments are due monthly.

On April 12, 2017, the credit agreement with Wells Fargo described above was amended and restated with several modifications including: a) the maturity date was extended to April 12, 2022; b) the sub-limit for letters of credit was increased from $25,000 to $30,000; and c) the unused facility fee was decreased from 0.175% to 0.125%. The amended and restated credit agreement contains certain financial covenants, including provisions concerning required levels of annual net income and minimum tangible net ~~worth and maximum allowed capital expenditures. The Company was in compliance with these covenants as of September 30, 2016.~~

worth.

The Company's South African subsidiary, Osborn Engineered Products SA (Pty) Ltd ("Osborn"), has a credit facility of ~~$6,920~~$7,049 with a South African bank to finance short-term working capital needs, as well as to cover performance letters of credit, advance payment and retention guarantees. As of ~~September 30, 2016,~~March 31, 2017, Osborn had ~~$1,911~~$697 of short-term borrowings and $761 in performance, advance payment and retention guarantees outstanding under the facility. The facility has been guaranteed by Astec Industries, Inc., but is otherwise unsecured. A 0.75% unused facility fee is charged if less than 50% of the facility is utilized. As of ~~September 30, 2016,~~March 31, 2017, Osborn had available credit under the facility of ~~$5,009.~~$5,591. The interest rate is 0.25% less than the South Africa prime rate, resulting in a rate of 10.5% as of ~~September 30, 2016.~~March 31, 2017.

The Company's Brazilian subsidiary, Astec Brazil, has outstanding working capital loans totaling ~~$5,639~~$5,235 from three Brazilian banks with interest rates ranging from 10.4% to 11.0%. The loans' maturity dates range from November 2018 to April 2024 and the debts are secured by Astec Brazil's manufacturing ~~facility.~~facility and also by letters of credit totaling $6,200 issued by Astec Industries, Inc. Additionally, Astec Brazil has various 5-year equipment financing loans outstanding with two Brazilian banks in the aggregate of ~~$1,301~~$1,081 as of ~~September 30, 2016~~March 31, 2017 that have interest rates ranging from 3.5% to 16.3%. These equipment loans have maturity dates ranging from September 2018 to April 2020. Astec Brazil's loans are included in the accompanying condensed consolidated balance sheets as current maturities of long-term debt ($~~2,159)~~2,717) and long-term debt ($~~4,781). A portion~~3,599) as of ~~the Astec Brazil debt is also secured by letters of credit totaling $11,874 issued by Astec Industries, Inc.~~March 31, 2017.

Note 8. Product Warranty Reserves

The Company warrants its products against manufacturing defects and performance to specified standards. The warranty period and performance standards vary by market and uses of its products, but generally range from three months to ~~one year~~two years or up to a specified number of hours of operation. The Company estimates the costs that may be incurred under its warranties and records a liability at the time product sales are recorded. The product warranty liability is primarily based on historical claim rates, nature of claims and the associated cost.

Changes in the Company's product warranty liability for the ~~three and nine-month~~three-month periods ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Reserve balance, beginning of the period	$	11,858		$	10,761		$	9,100		$	10,032		$	13,156		$	9,100
Warranty liabilities accrued		4,835			3,261			13,135			11,723			3,996			3,615
Warranty liabilities settled		(5,442	)		(3,828	)		(11,011	)		(11,499	)		(3,460	)		(2,357	)
Other		256			(130	)		283			(192	)		27			39
Reserve balance, end of the period	$	11,507		$	10,064		$	11,507		$	10,064		$	13,719		$	10,397

Note 9. Accrued Loss Reserves

The Company records reserves for losses related to known workers' compensation and general liability claims that have been incurred but not yet paid or are estimated to have been incurred but not yet reported to the Company. The undiscounted reserves are actuarially determined based on the Company's evaluation of the type and severity of individual claims and historical information, primarily its own claims experience, along with assumptions about future events. Changes in assumptions, as well as changes in actual experience, could cause these estimates to change in the future. Total accrued loss reserves were ~~$8,514~~$8,038 as of ~~September 30, 2016~~March 31, 2017 and ~~$7,663~~$7,892 as of December 31, ~~2015,~~2016, of which ~~$5,301~~$5,318 and ~~$4,825~~$5,040 were included in other long-term liabilities as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015,~~2016, respectively.

Note 10. Income Taxes

The Company's combined effective income tax rates were ~~41.5%~~34.1% and ~~52.5%~~37.4% for the three-month periods ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015, respectively. The Company's combined effective income tax rates were 37.6% and 38.8% for the nine-month periods ended September 30, 2016 and 2015,~~ respectively. The Company's effective tax ~~rates~~rate for the ~~three and nine-month~~three-month periods ended ~~September 30,~~March 31, 2017 and 2016 ~~include~~includes the effect of state income taxes and other discrete items as well as a benefit for research and development credits. The Company's effective tax rates for the three and nine-month periods ended September 30, 2015 include the effect of state income taxes and other discrete items but does not include benefits for the research and development credits as legislation extending the research and development credit for 2015 was not enacted by Congress until the fourth quarter of 2015.

The Company's recorded liability for uncertain tax positions as of ~~September 30, 2016~~March 31, 2017 has ~~decreased~~increased by approximately ~~$241~~$91 as compared to December 31, ~~2015 as the result of federal and state tax audit settlements related to tax years 2011 and 2012.~~2016.

Note 11. Segment Information

The Company has three reportable segments, each of which is comprised of multiple business units that offer similar products and services and meet the requirements for aggregation. A brief description of each segment is as follows:

Infrastructure Group- This segment consists of five business units, three of which design, engineer, manufacture and market a complete line of portable, stationary and relocatable hot-mix asphalt plants, wood pellet plants, asphalt pavers, material transfer vehicles, stabilizers, milling machines, paver screeds and ~~paver screeds.~~related ancillary equipment. The other two business units in this segment primarily operate as Company-owned dealers in the foreign countries in which they are domiciled. These two business units sell, service and install products produced by the manufacturing subsidiaries of the Company, and a majority of their sales are to customers in the infrastructure industry. The principal purchasers of the products produced by this group are asphalt producers, highway and heavy equipment contractors, wood pellet processors and foreign and domestic governmental agencies.

Aggregate and Mining Group- This segment consists of eight business units that design, engineer, manufacture and market a complete line of jaw crushers, cone crushers, horizontal shaft impactors, vertical shaft impactors, material handling, roll rock crushers and stationary rockbreaker systems, vibrating feeders and high frequency vibrating screens, conveyors, inclined, vertical and horizontal screens and sand classifying and washing equipment. The principal purchasers of products produced by this group are distributors, open mine operators, quarry operators, port and inland terminal operators, highway and heavy equipment contractors and foreign and domestic governmental agencies.

Energy Group- This segment ~~consisted~~consists of five business units ~~through May 2015, four from June 2015 through July 2016, and five thereafter,~~ that design, engineer, manufacture and market a complete line of drilling rigs for the oil and gas, geothermal and water well industries, high pressure diesel pump trailers for fracking and cleaning oil and gas wells, commercial and industrial burners, combustion control systems, a variety of industrial heaters to fit a broad range of applications including heating equipment for refineries, roofing material plants, chemical processing, rubber plants, oil sands and energy related processing, heat transfer processing equipment, thermal fluid storage tanks, waste heat recovery equipment, whole-tree pulpwood and biomass chippers and horizontal grinders and beginning in August 2016, gas, oil and combination gas/oil burners and combustion control systems designed for commercial, industrial and process applications primarily sold to boiler manufacturers or related manufacturing representatives.grinders. The principal purchasers of products produced by this group are oil, gas and water well drilling industry contractors, processors of oil, gas and biomass for energy production and contractors in the construction and demolition recycling markets. ~~Effective May 31, 2015,~~This group includes the ~~Company's Astec Underground, Inc. business unit in Loudon, Tennessee ceased~~ operations and responsibility for its product lines was transferred to the Company's GEFCO, Inc. subsidiary in Enid, Oklahoma. The Loudon facility was sold in October 2015. Effective August 1, 2016, the Company acquired substantially all of the assets and certain liabilities of Power Flame Incorporated, ~~based~~which was acquired in ~~Parsons, Kansas. See Note 16 for further information concerning this acquisition.~~August 2016.

Corporate- This category consists of business units that do not meet the requirements for separate disclosure as an operating segment or inclusion in one of the other reporting segments and includes the Company's parent company, Astec Industries, Inc., and Astec ~~Insurance Company, a Company-owned captive insurance company.~~Insurance. The Company evaluates performance and allocates resources to its operating segments based on profit or loss from operations before U.S. federal income taxes and corporate overhead and thus these costs are included in the Corporate category.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are valued at prices comparable to those for unrelated parties.

Segment Information:

Three Months Ended September 30, 2016

Infrastructure
Group

Aggregate
and Mining
Group

Energy
Group
Corporate Total
Net sales to external
customers
$ 109,227 $ 85,819 $ 52,706 $ -- $ 247,752
Intersegment sales 5,324 10,063 4,108 -- 19,495
Gross profit 24,929 20,935 9,473 52 55,389
Gross profit percent 22.8 % 24.4 % 18.0 % -- 22.4 %
Segment profit (loss) $ 9,858 $ 7,651 $ 805 $ (11,610 ) $ 6,704

	Nine Months Ended September 30, 2016															Three Months Ended March 31, 2017
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total			Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	414,817		$	277,393		$	128,658		$	--		$	820,868		$	165,243		$	100,613		$	52,545		$	--		$	318,401
Intersegment sales		13,009			20,859			13,718			--			47,586			4,025			3,436			5,591			--			13,052
Gross profit		101,349			72,224			27,069			155			200,797			37,801			25,023			12,887			60			75,771
Gross profit percent		24.4	%		26.0	%		21.0	%		--			24.5	%		22.9	%		24.9	%		24.5	%		--			23.8	%
Segment profit (loss)	$	51,394		$	28,135		$	3,237		$	(40,745	)	$	42,021		$	18,180		$	8,428		$	2,729		$	(14,428	)	$	14,909

Three Months Ended September 30, 2015

Infrastructure
Group

Aggregate
and Mining
Group

Energy
Group
Corporate Total
Net sales to external
customers
$ 85,625 $ 80,549 $ 45,176 $ -- $ 211,350
Intersegment sales 5,839 4,604 1,122 -- 11,565
Gross profit 16,104 19,226 9,794 14 45,138
Gross profit percent 18.8 % 23.9 % 21.7 % -- 21.4 %
Segment profit (loss) $ 2,116 $ 3,790 $ 1,941 $ (6,853 ) $ 994

	Nine Months Ended September 30, 2015															Three Months Ended March 31, 2016
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total			Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	336,768		$	285,790		$	145,583		$	--		$	768,141		$	153,114		$	92,488		$	33,119		$	--		$	278,721
Intersegment sales		17,633			19,223			13,965			--			50,821			3,173			4,851			3,466			--			11,490
Gross profit		74,292			70,182			28,912			31			173,417
Gross profit (loss)																	39,837			25,148			7,082			(111	)		71,956
Gross profit percent		22.1	%		24.6	%		19.9	%		--			22.6	%		26.0	%		27.2	%		21.4	%		--			25.8	%
Segment profit (loss)	$	29,472		$	25,441		$	2,805		$	(29,154	)	$	28,564		$	21,863		$	9,538		$	(192	)	$	(14,226	)	$	16,983

1617

A reconciliation of total segment profits to the Company's consolidated totals is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017			2016
Total segment profits	$	6,704		$	994		$	42,021		$	28,564		$	14,909		$	16,983
Recapture (elimination) of intersegment profit		131			964			633			(32	)
Recapture of intersegment profit														171			695
Net income		6,835			1,958			42,654			28,532			15,080			17,678
Net loss attributable to non-controlling interest in subsidiaries		(3	)		(334	)		(119	)		(669	)		(40	)		(65	)
Net income attributable to controlling interest	$	6,838		$	2,292		$	42,773		$	29,201		$	15,120		$	17,743

Note 12. Contingent Matters

Certain customers have financed purchases of Company products through arrangements in which the Company is contingently liable for customer debt of ~~$1,945~~$1,483 as of ~~September 30, 2016.~~March 31, 2017. The maximum potential amount of future payments for which the Company would be liable was equal to ~~$1,945~~$1,483 as of ~~September 30, 2016.~~March 31, 2017. These arrangements also provide that the Company will receive the lender's full security interest in the equipment financed if the Company is required to fulfill its contingent liability under these arrangements. The Company has recorded a liability of ~~$153~~$601 related to these guarantees as of ~~September 30, 2016.~~March 31, 2017.

In addition, the Company is contingently liable under letters of credit issued by Wells Fargo totaling ~~$15,196~~$8,496 as of ~~September 30, 2016,~~March 31, 2017, including ~~$11,874~~$6,200 of letters of credit that guarantee certain Astec Brazil bank debt. The outstanding letters of credit expire at various dates through ~~March 2019.~~October 2020. As of ~~September 30, 2016, Osborn is~~March 31, 2017, the Company's foreign subsidiaries are contingently liable for a total of ~~$1,911~~$1,206 in performance letters of credit, advance payments and retention guarantees. The maximum potential amount of future payments under these letters of credit and guarantees for which the Company could be liable is ~~$17,107~~$9,702 as of ~~September 30, 2016.~~March 31, 2017.

The Company is currently a party to various claims and legal proceedings that have arisen in the ordinary course of business. If management believes that a loss arising from such claims and legal proceedings is probable and can reasonably be estimated, the Company records the amount of the loss (excluding estimated legal fees) or the minimum estimated liability when the loss is estimated using a range and no point within the range is more probable than another. As management becomes aware of additional information concerning such contingencies, any potential liability related to these matters is assessed and the estimates are revised, if necessary. If management believes that a loss arising from such claims and legal proceedings is either (i) probable but cannot be reasonably estimated or (ii) reasonably possible but not probable, the Company does not record the amount of the loss, but does make specific disclosure of such matter. Based upon currently available information and with the advice of counsel, management believes that the ultimate outcome of its current claims and legal proceedings, individually and in the aggregate, will not have a material adverse effect on the Company's financial position, cash flows or results of operations. However, claims and legal proceedings are subject to inherent uncertainties and rulings unfavorable to the Company could occur. If an unfavorable ruling were to occur, there exists the possibility of a material adverse effect on the Company's financial position, cash flows or results of operations.

During 2004, the Company received notice from the Environmental Protection Agency ("EPA") that it may be responsible for a portion of the costs incurred in connection with an environmental cleanup in Illinois. The discharge of hazardous materials and associated cleanup relate to activities occurring prior to the Company's acquisition of Barber-Greene in 1986. The Company believes that over 300 other parties have received similar notices. At this time, the Company cannot predict whether the EPA will seek to hold the Company liable for a portion of the cleanup costs or the amount of any such liability. The Company has not recorded a liability with respect to this matter because no estimate of the amount of any such liability can be made at this time.

1718

Note 13. Shareholders' Equity

Under the Company's long-term incentive plans, key members of management may be issued restricted stock units ("RSUs") each year based upon the annual financial performance of the Company and its subsidiaries. The number of RSUs granted each year is determined based upon the performance of individual subsidiaries and consolidated annual financial performance. Generally, for RSUs granted through February 2016, each award will vest at the end of five years from the date of grant, or at the time a recipient retires after reaching age 65, if earlier. ~~Future awards~~Awards granted in February 2017 and after will vest at the end of three years from the date of grant or at the time a recipient retires after reaching age 65, if earlier.

A total of 7722 and 6676 RSUs vested during the ~~nine-month~~three-month periods ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively. The Company withheld 248 and 1424 shares due to statutory payroll tax withholding requirements upon the vesting of the RSUs in the first ~~nine~~three months of ~~2016~~2017 and ~~2015,~~2016, respectively, and used Company funds to remit the related required minimum withholding taxes to the various tax authorities. The vesting date fair value of the RSUs that vested during the first ~~nine~~three months of 2017 and 2016 was $1,445 and ~~2015 was $3,289 and $2,785,~~$3,204, respectively. Compensation expense of ~~$769~~$856 and ~~$38~~$453 was recorded in the three-month periods ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively, to reflect the fair value of RSUs granted (or anticipated to be granted for ~~2016~~2017 performance) amortized over the portion of the vesting period occurring during the periods. Compensation expense of $1,697 and $778 was recorded in the nine-month periods ended September 30, 2016 and 2015, respectively, to ~~reflect the fair value of RSUs granted (or anticipated to be granted for 2016 performance)~~employees amortized over the portion of the vesting period occurring during the periods.

Note 14. Other Income, Net of Expenses

Other income, net of expenses for the ~~three and nine-month~~three-month periods ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ is presented below:

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015			2016			2015			2017		2016
Interest income	$	178		$	128		$	621		$	392		$	175	$	288
Income from life insurance policies		--			--			--			1,204
Loss on investments		(26	)		(72	)		(41	)		(204	)
Gain (loss) on investments														27		(36	)
License fee income		247			250			503			616			250		195
Other		106			204			241			535			60		97
Total	$	505		$	510		$	1,324		$	2,543		$	512	$	544

Note 15. Derivative Financial Instruments

The Company is exposed to certain risks related to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency risk. From time to time the Company's foreign subsidiaries enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates. The fair value of the derivative financial ~~instruments~~instrument is recorded on the Company's balance sheet and is adjusted to fair value at each measurement date. The changes in fair value are recognized in the consolidated statements of income in the current period. The Company does not engage in speculative transactions nor does it hold or issue financial instruments for trading purposes. The average U.S. dollar equivalent notional amount of outstanding foreign currency exchange contracts was ~~$12,118~~$10,485 during the ~~nine-month~~three-month period ended ~~September 30, 2016.~~March 31, 2017. The Company reported ~~$592~~$178 of derivative liabilities in other current liabilities at ~~September 30, 2016.~~March 31, 2017. At December 31, ~~2015,~~2016, the Company reported ~~$935~~$144 of derivative assets in other current assets ~~$330 of derivative assets in other long-term assets~~ and ~~$22~~$89 of derivative liabilities in other current liabilities. The Company recognized, as a component of cost of sales, ~~a net loss~~losses of ~~$383~~$350 and ~~a net gain $419~~$661 on the ~~changes~~change in fair value of derivative financial instruments in the ~~three-month~~three month periods ended ~~September 30,~~March 31, 2017 and 2016, and 2015, respectively. The Company recognized, as a component of cost of sales, a net loss of $897 and a net gain of $1,227 on the changes in fair value of derivative financial instruments in the nine-month periods ended September 30, 2016 and 2015, respectively. There were no derivatives that were designated as hedges at ~~September 30, 2016.~~

March 31, 2017.

Note 16. Business ~~Acquisition~~Combination

In August 2016, the Company acquired substantially all of the assets and certain liabilities of Power Flame Incorporated ("PFI") ~~located in Parsons, Kansas. The Company paid~~for a total purchase price ~~after preliminary adjustments,~~ of ~~$39,614, which is subject to certain additional post-closing adjustments, from available cash balances in early August 2016. $5,000 of the~~$39,765. The purchase price ~~will be held~~was paid in cash with $4,000 deposited into escrow for upa period of time not to exceed two years pending ~~the~~ final resolution of ~~any~~certain post-closing adjustments and any indemnification claims. The Company's ~~preliminary~~ allocation of the purchase price resulted in the recognition of ~~$13,076~~$12,632 of goodwill and ~~$17,407~~$17,990 of other intangible assets consisting of technology (19 year useful life), trade ~~name~~names (15 year useful life) and customer relationships (18 year useful life). ~~Approximately $159~~The revenues and results of ~~acquisition related costs have been expensed by the Company~~operations of PFI were not significant in ~~the nine-month period ended September 30, 2016. The Company does not expect PFI's revenues or profits to be material~~relation to the Company's financial statements for the period ended December 31, 2016 and would not have been material on a proforma basis to any earlier period. PFI's operating ~~results.~~results are included in the Energy Group beginning in the third quarter of 2016.

PFI, ~~which~~located in Parsons, Kansas, began operations in 1948 and manufactures and sells gas, oil and combination gas/oil and low NOx burners ~~and~~with outputs ranging from 400 thousand BTU's per hour to 120 million BTU's per hour as well as combustion control systems designed for commercial, industrial and process heating applications.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements contained anywhere in this Quarterly Report on Form 10-Q that are not limited to historical information are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are sometimes identified by the words "will," "would," "should," "could," "may," "believes," "anticipates," "intends," "forecasts" and "expects" and similar expressions. Such forward-looking statements include, without limitation, statements regarding the Company's expected sales and results of operations during ~~2016,~~2017, the Company's expected capital expenditures in ~~2016,~~2017, the expected benefit and impact of financing arrangements, the ability of the Company to meet its working capital and capital expenditure requirements through ~~September 30, 2017,~~March 31, 2018, the amount and impact of any current or future state or federal funding for transportation construction programs, the need for road improvements, the amount and impact of other public sector spending and funding mechanisms, changes in the economic environment as it affects the Company, the market confidence of customers and dealers, the Company being called upon to fulfill certain contingencies, the expected dates of granting of restricted stock units, changes in interest rates and the impact of such changes on the financial results of the Company, changes in the prices of steel and oil and the impact of such changes generally and on the demand for the Company's products, customer's buying decisions, the Company's business, the ability of the Company to offset future changes in prices in raw materials, the change in the strength of the dollar and the level of the Company's presence and sales in international markets, the impact that further development of domestic oil and natural gas production capabilities would have on the domestic economy and the Company's business, the seasonality of the Company's business, the Company's investments, the percentage of the Company's equipment sold directly to end users, the amount or value of unrecognized tax benefits, the impact of IRS tax regulations, payment of dividends by the Company, and the ultimate outcome of the Company's current claims and legal proceedings.

These forward-looking statements are based largely on management's expectations, which are subject to a number of known and unknown risks, uncertainties and other factors discussed in this Report and in other documents filed by the Company with the Securities and Exchange Commission, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements. All forward-looking statements included in this document are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements to reflect future events or circumstances.

The risks and uncertainties identified herein under the caption "Item 1A. Risk Factors" in Part II of this Report, elsewhere herein and in other documents filed by the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2015,~~2016, should be carefully considered when evaluating the Company's business and future prospects.

Overview

The Company is a leading manufacturer and seller of equipment for the road building, aggregate processing, ~~mining,~~ geothermal, water, oil and gas, and wood processing industries. The Company's businesses:

●·	design, engineer, manufacture and market equipment ~~that is~~ used in each phase of road building, including mining, quarrying and crushing the aggregate, mobile bulk and material handling solutions, producing asphalt or concrete, recycling old asphalt or concrete and applying the asphalt;

●·

design, engineer, manufacture and market additional equipment and components, including equipment for geothermal drilling, oil and natural gas drilling, industrial heat transfer, wood chipping and grinding, ~~and~~ wood pellet ~~processing;~~processing, commercial and industrial burners, combustion control systems; and

●·	manufacture and sell replacement parts for equipment in each of its product lines.

~~Astec Industries, Inc. currently~~

The Company, as we refer to it herein, consists of a total of 20 ~~companies:~~companies that are consolidated in our financial statements, which includes 16 manufacturing companies, 2 companies that operate as dealers for the manufacturing companies, a captive insurance company and the parent company. The companies fall within three reportable operating segments: the Infrastructure Group, the Aggregate and Mining Group and the Energy Group.

Infrastructure Group –- This segment consists of five business units, three of which design, engineer, manufacture and market a complete line of ~~portable, stationary and relocatable hot-mix~~ asphalt plants, asphalt pavers, ~~material transfer vehicles, milling machines, paver screeds and~~ wood pellet ~~plants.~~plants and related components and ancillary equipment. The ~~other~~ two ~~business units in this segment operate as Company-owned dealers~~remaining companies in the ~~foreign countries in which they are domiciled. These two business units~~Infrastructure Group primarily sell, service and install ~~products~~equipment produced by the manufacturing subsidiaries of the Company ~~and a~~with the majority of ~~their~~ sales ~~are~~ to ~~customers in~~ the infrastructure industry. ~~The principal purchasers of the products produced by this group are asphalt producers, highway and heavy equipment contractors, foreign and domestic governmental agencies and wood pellet processors.~~

Aggregate and Mining Group –- This segment consists of eight business units that design, ~~engineer,~~ manufacture and market a complete line of jaw crushers, cone crushers, horizontal shaft impactors, vertical shaft impactors, material handling systems, roll rock crushers and stationary rockbreaker systems, vibrating feeders and high frequency vibrating screens, conveyors, inclined, vertical and horizontal screens and sand classifying and washing equipment. ~~The principal purchasers of products produced by this group are distributors, open mine operators, quarry operators, port operators, highway and~~ heavy equipment ~~contractors~~ and ~~foreign~~parts in the aggregate, metallic mining, quarrying, recycling, ports and ~~domestic governmental agencies.~~bulk handling industries.

Energy Group –- This segment ~~consisted~~consists of five business units ~~through May 2015, four from June 2015 through July 2016, and five thereafter,~~ that design, ~~engineer,~~ manufacture and market ~~a complete line of drilling rigs for the oil and gas, geothermal and water well industries, high pressure diesel pump trailers for fracking and cleaning oil and gas wells, a variety of industrial~~ heaters, to fit a broad range of applications including heating equipment for refineries, oil sands and energy related processing, heat transfer processing equipment, thermal fluid storage tanks, waste heat recovery equipment, and whole-tree pulpwood and biomass chippers, horizontal grinders and, beginning in August 2016, gas, oil and combination gas/oil burners, ~~and~~ combustion control systems, ~~designed for~~drilling rigs, concrete plants, wood chippers and grinders, pump trailers, commercial and industrial burners, combustion control systems, storage equipment and ~~process applications, primarily sold~~related parts to ~~boiler manufacturers or related manufacturing representatives. The principal purchasers of products produced by this group are~~the oil and gas, construction, and water well ~~drilling industry contractors, processors of oil, gas and biomass for energy production and contractors in the construction and demolition recycling markets.~~ Effective May 31, 2015, the Company's Astec Underground, Inc. business unit in Loudon, Tennessee ceased operations and responsibility for its product lines was transferred to the Company's GEFCO, Inc. subsidiary in Enid, Oklahoma. ~~The Company sold the Loudon, Tennessee facility in October 2015.~~industries.

Individual Company subsidiaries included in the composition of the Company's segments are as follows:

1.	Infrastructure Group – Astec, Inc., Roadtec, Inc., Carlson Paving Products, Inc., Astec Australia, Pty Ltd and Astec Mobile Machinery GmbH.

2.	Aggregate and Mining Group – Telsmith, Inc., Kolberg-Pioneer, Inc., Johnson Crushers International, Inc., Osborn Engineered Products SA (Pty) Ltd, Breaker Technology, Inc., Astec Mobile Screens, Inc., Astec do Brasil Fabricacao de Equipamentos LTDA and Telestack Limited.

3.	Energy Group – Heatec, Inc., CEI, ~~Enterprises,~~ Inc., GEFCO, Inc., Peterson Pacific Corp., and Power Flame Incorporated (beginning in August 2016) ~~and Astec Underground, Inc. (through May 2015)~~.

The Company also has ~~two~~one other category, Corporate, that contains the business units that do not meet the ~~requirement~~requirements for separate disclosure as ana separate operating ~~segment:~~segment or inclusion in one of the ~~Company's parent company,~~other reporting segments. The business units in the Corporate category are Astec Insurance Company ("Astec Insurance" or "the captive") and Astec Industries, Inc., ~~and Astec Insurance Company, a Company-owned captive insurance~~the parent company. ~~The Company evaluates performance and allocates resources to its operating segments based on profit or loss from operations before U.S. federal income taxes~~These two companies provide support and corporate ~~overhead and thus these costs are included in~~oversight for all the ~~Corporate category.~~companies that fall within the reportable operating segments.

The Company's financial performance is affected by a number of factors, including the cyclical nature and varying conditions of the markets it serves. 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, ~~the amount of~~ privately funded infrastructure development, changes in the price of crude oil, which affects the cost of fuel and liquid asphalt, and changes in the price of steel.

The Company believes that federal highway funding influences the purchasing decisions of the Company's customers, who are typically more comfortable making capital equipment purchases with long-term federal legislation in place. Federal funding provides for approximately 25% of all highway, street, roadway and parking construction in the United States.

In July 2012, the "Moving Ahead for Progress in the 21st Century Act" ("Map-21") was approved by the U.S. federal government, which authorized $105 billion of federal spending on highway and public transportation programs through fiscal year 2014. In August 2014, the U.S. government approved short-term funding of $10.8 billion through May 2015. Federal transportation funding operated on short-term appropriations until December 4, 2015 when the Fixing America's Surface Transportation Act ("FAST Act") was signed into law. The $305 billion FAST Act approved funding for highways of approximately $205 billion and transit projects of approximately $48 billion for the five-year period ending September 30, 2020. The Company believes a multi-year highway ~~programs~~program (such as the FAST Act) will have the greatest positive impact on the road construction industry and allow its customers to plan and execute longer-term projects, but given the inherent uncertainty in the political process, the level of governmental funding for federal highway projects will similarly continue to be uncertain. In late 2016, the newly-elected administration stated one of its priorities would be a new infrastructure bill including increased funding for roads, bridges, tunnels, airports, railroads, ports and waterways, pipelines, clean water infrastructure, energy infrastructure and telecommunication needs. The funding for the bill as proposed would rely in part on direct federal spending as well as increased private sector funding in exchange for federal tax credits. Governmental funding that is committed or earmarked for federal highway projects is always subject to repeal or reduction. Although continued funding under the FAST Act or funding of a bill passed by the new administration is expected, it may be at lower levels than originally ~~approved.~~ approved or anticipated.

In addition, Congress could pass legislation in future sessions that would allow for the diversion of previously appropriated highway funds for other purposes, or it could restrict funding of infrastructure projects unless states comply with certain federal policies. The level of future federal highway construction is uncertain and any future funding may be at levels lower than those currently approved or that have been approved in the past.

The public sector spending described above is needed to fund road, bridge and mass transit improvements. The Company believes that increased funding is unquestionably needed to restore the nation's highways to a quality level required for safety, fuel efficiency and mitigation of congestion. In the Company's opinion, amounts needed for such improvements are significantly greater than amounts approved to date, and funding mechanisms such as the federal usage fee per gallon of gasoline, which is ~~currently~~ still at the 1993 level of 18.4 cents per gallon, would likely need to be increased along with other measures to generate the funds needed.

In addition to public sector funding, the economies in the markets the Company serves, the price of oil and its impact on customers' purchasing decisions and the price of steel may each affect the Company's financial performance. Economic downturns generally result in decreased purchasing by the Company's customers, which, in turn, causes reductions in sales and increased pricing pressure on the Company's products. Rising interest rates also typically negatively impact customers' attitudes toward purchasing equipment. The Federal Reserve has maintained historically low interest rates in response to the ~~recent~~ economic ~~downturn;~~downturn which began in 2009; however, ~~interest rates may increase during~~ the ~~remainder of~~Federal Reserve raised the Federal Funds Rate in 2016 and ~~thereafter.~~again in early 2017, and may implement additional increases in the future.

Significant portions of the Company's revenues from the Infrastructure Group relate to the sale of equipment involved in the production, handling, recycling or installation of asphalt mix. Liquid asphalt is a by-product of oil production. An increase or decrease in the price of oil ~~increases~~impacts the cost of asphalt, which is likely to ~~decrease~~alter demand for asphalt and therefore ~~decrease~~affect demand for certain Company products. While increasing oil prices may have a negative financial impact on many of the Company's customers, the Company's equipment can use a significant amount of recycled asphalt pavement, thereby partially mitigating the effect of increased oil prices on the final cost of asphalt for the customer. The Company continues to develop products and initiatives to reduce the amount of oil and related products required to produce asphalt mix. Oil price volatility makes it difficult to predict the costs of oil-based products used in road construction such as liquid asphalt and gasoline. ~~The Company's asphalt producers and road building customers appear to be adapting their~~Oil prices ~~in response to the fluctuating oil prices, and the fluctuations did not appear to significantly impair equipment purchases in 2015 or~~rose during much of 2016 but have stabilized during the first ~~nine months~~quarter of ~~2016. The Company expects oil prices to continue to fluctuate during the remainder of 2016 and thereafter.~~2017. Minor fluctuations in oil prices should not have a significant impact on customers' buying ~~decisions pertaining to asphalt and road building products. However,~~decisions. Other factors such as political uncertainty in oil producing countries, interruptions in oil production due to disasters, whether natural or man-made, or other economic factors could significantly impact oil prices, which could negatively impact demand for the Company's products. However, the Company believes the continued funding of the FAST Act federal highway bill passed in December 2015 has greater potential to impact the buying decisions of the Company's customers than does the fluctuation of oil prices in 2017.

Contrary to the ~~negative~~ impact of ~~higher~~ oil prices on many of the Company's Infrastructure Group products as discussed above, ~~sales of several of~~ the ~~Company's products, including~~ products manufactured by the Energy Group, which are used ~~to drill~~in drilling for ~~or extract~~ oil and natural gas, ~~have suffered due to the recent reduction~~ in ~~the price of~~heaters for refineries and oil sands, and in double fluid pump trailers for fracking and oil and gas extraction, would benefit from higher oil and natural gas prices, to the extent that such higher prices lead to ~~further~~increased development ofin the oil and natural gas ~~production.~~production industries. The Company believes further development of domestic oil and natural gas production capabilities is needed and would positively impact the domestic economy and the Company's business.

Steel is a major component in the Company's equipment. Steel prices increased during the first ~~half of 2016 but declined slightly in the third~~ quarter of ~~2016. We expect prices~~2017, and the Company expects this trend to ~~increase slightly in~~continue through the ~~remainder~~second quarter of ~~2016 and into~~ 2017. The Company continues to utilize forward-looking contracts ~~that contain fixed pricing~~ (with no minimum or specified quantity guarantees) coupled with advanced steel purchases to minimize the impact of ~~future~~any price increases. The Company will review the trends in steel prices inentering into the ~~last quarter~~second half of ~~2016~~2017 and establish future contract pricing accordingly.

In addition to the factors stated above, many of the Company's markets are highly competitive, and its products compete worldwide with a number of other manufacturers and dealers that produce and sell similar products. AFrom 2010 through mid-2012, a weak U.S. dollar, combined with improving economic conditions in certain foreign economies, had a positive impact on the Company's international ~~sales in 2010 through mid-2012.~~sales. The strengthening of the U.S. dollar ~~against many foreign currencies during the later portion of 2012~~from mid-2012 through ~~the nine months of 2016~~March 31, 2017 has negatively impacted pricing ~~and the Company's backlog at September 30, 2016~~ in certain foreign ~~markets.~~markets the Company serves. The Company expects the U.S. dollar to remain strong in the near term relative to most foreign currencies. Increasing domestic interest rates or weakening economic conditions abroad could cause the U.S. dollar to ~~further~~continue to strengthen, which could negatively impact the Company's international sales.

In the United States and internationally, the Company's equipment is marketed directly to customers as well as through dealers. ~~In recent years,~~During 2016, approximately 75% to 80% of equipment sold by the Company was sold directly to the end user. The Company expects this ratio to remain relatively consistent through the end of ~~2016.~~2017.

The Company is operated on a decentralized basis ~~and each operating subsidiary has~~with a complete management team ~~with oversight by Company Group Presidents.~~for each operating subsidiary. Finance, insurance, legal, shareholder relations, corporate accounting and other corporate matters are primarily handled at the corporate level (i.e., Astec Industries, Inc., the parent company). The engineering, design, sales, manufacturing and basic accounting functions are handled at each individual subsidiary. Standard accounting procedures are prescribed and followed in all ~~financial~~ reporting.

~~The non-union~~During 2016, the Company implemented revised profit sharing plans whereby corporate officers, subsidiary presidents and other employees ofat each subsidiary have the opportunity to earn ~~profit-sharing~~profit sharing incentives inbased upon the ~~aggregate of up to 10% of each subsidiary's after-tax profit if such subsidiary meets established goals. These goals are based on~~Company's and/or the ~~subsidiary's~~individual groups or subsidiaries' return on capital employed, EBITDA margin and safety. Corporate officers' and subsidiary presidents' awards when calculated at targeted performance are between 35% and 100% of their base salary, depending upon their responsibilities, and the plans allow for awards of up to 200% of the target. Each subsidiary has the opportunity to earn up to 10% of its after-tax profit as a ~~percent of sales and safety.~~ profit sharing incentive award to be paid to its employees.

The ~~profit-sharing incentives for~~Company also implemented revised long-term incentive plans during 2016 whereby corporate officers, subsidiary presidents and other corporate or subsidiary management employees will be awarded Restricted Stock Units ("RSUs") if certain goals are ~~normally paid from~~met based upon the Company's Total Shareholder's Return ("TSR") as compared to a ~~separate~~peer group and the Company's pretax profit margin. The grant date value of corporate ~~pool.~~officers' and subsidiary presidents' awards when calculated at targeted performance are between 20% and 100% of their base salary, depending upon their responsibilities, and the plans allow for awards of up to 200% of the target. Additional RSUs may be granted to other key subsidiary management employees based upon individual subsidiary pretax profit margins and Company TSR as compared to a peer group.

Results of Operations

Net Sales

Net sales for the ~~third~~first quarter of 2017 were $318,401 compared to $278,721 for the first quarter of 2016, ~~were $247,752 compared to $211,350 for the third quarter of 2015,~~ an increase of ~~$36,402~~$39,680 or ~~17.2%~~14.2%. Sales are generated primarily from new equipment and parts sales to domestic and international customers. Sales increased ~~$23,602~~ in all of the ~~Infrastructure Group, $7,530 in the Energy Group and $5,270 in the Aggregate and Mining Group.~~Company's segments. Domestic sales in the Infrastructure ~~group~~Group and Aggregate and Mining Group, and to a lesser extent in the Energy Group, continue to be positively impacted by effects of the long-term federal highway bill enacted in December ~~2015 and pellet plant sales; however,~~2015. International sales are showing improvement due to improved infrastructure activity, the stabilization of the ~~Company's other groups are being negatively impacted by low oil prices, the strong~~ U.S. dollar in certain foreign markets and ~~the continuing downturn~~a slight recovery in the mining sector. Sales reported by the Company's foreign subsidiaries in U.S. dollars for the third quarter of 2016 would have been reported $1,989 higher had 2016 foreign exchange rates been the same as 2015 rates.

~~Net sales for the first nine months of 2016 were $820,868 compared to $768,141 for the first nine months of 2015, an increase of $52,727 or 6.9%. Sales are generated primarily from new equipment~~ and ~~parts sales to domestic~~oil and international customers. Increased sales of $78,049 in the Infrastructure Group were offset by decreased sales of $8,397 in the Aggregate and Mining Group and $16,925 in the Energy Group. Domestic sales in the Infrastructure group are continuing to be positively impacted by effects of the long-term federal highway bill enacted in December 2015 and pellet plant sales; however, sales of the Company's other groups are being negatively impacted by low oil prices, the strong U.S. dollar and the continuing downturn in the mining sector.gas sectors. Sales reported by the Company's foreign subsidiaries in U.S. dollars for the first ~~nine months~~quarter of ~~2016~~2017 would have been ~~reported $9,482 higher~~$622 lower had ~~2016~~2017 foreign exchange rates been the same as ~~rates during 2015.~~

~~Domestic sales for the third~~first quarter of 2016 were $199,851 or 80.7% of consolidated net sales compared to $156,333 or 74.0% of consolidated net sales for the third quarter of 2015, an increase of $43,518 or 27.8%. Domestic sales for the third quarter of 2016 as compared to the third quarter of 2015 increased $28,976 in the Infrastructure Group, $9,862 in the Energy Group and $4,680 in the Aggregate and Mining Group.rates.

Domestic sales for the first ~~nine months~~quarter of ~~2016~~2017 were ~~$676,310~~$253,497 or ~~82.4%~~79.6% of consolidated net sales compared to ~~$562,006~~$234,247 or ~~73.2%~~84.0% of consolidated net sales for the first ~~nine months~~quarter of ~~2015,~~2016, an increase of ~~$114,304~~$19,250 or ~~20.3%~~8.2%. Domestic sales for the first ~~nine months~~quarter of ~~2016~~2017 as compared to the first ~~nine months~~quarter of ~~2015~~2016 increased ~~$104,500~~$12,140 in the ~~Infrastructure~~Energy Group ~~and $12,512~~(including $5,982 of Power Flame sales), $4,318 in the Aggregate and Mining Group ~~but decreased $2,708~~and $2,792 in the ~~Energy~~Infrastructure Group.

International sales for the ~~third~~first quarter of ~~2016~~2017 were ~~$47,901~~$64,904 or ~~19.3%~~20.4% of consolidated net sales compared to ~~$55,017~~$44,474 or ~~26.0%~~16.0% of consolidated net sales for the ~~third~~first quarter of ~~2015, a decrease~~2016, an increase of ~~$7,116~~$20,430 or ~~12.9%~~45.9%. International sales ~~decreased $5,374~~for the first quarter of 2017 as compared to the first quarter of 2016 increased $9,337 in the Infrastructure Group, ~~and $2,332~~$7,286 in the Energy Group and ~~increased $590~~$3,807 in the Aggregate and Mining Group. The ~~decreases~~increases in international sales occurred primarily in Canada, ~~Africa, Brazil~~Russia, Australia, Mexico and ~~other South American countries, Asia and the Middle East, partially~~Africa, offset by ~~increases~~decreases in sales in ~~Australia, Mexico~~South America and ~~other Central American countries, West Indies and Europe. International~~Japan/Korea. These increased sales ~~volumes continue to be negatively impacted by~~were achieved in spite of the continuing strength of the U.S. dollar as compared to the currencies in many of the countries in which the Company operates, ~~as well as~~ low oil and gas pricing, and the continuing ~~downturn~~sluggishness in the mining ~~and oil and gas sectors.~~

~~International~~sector. The increased sales ~~for~~volumes may indicate a softening of the ~~first nine months~~impact of ~~2016 were $144,558 or 17.6% of consolidated net sales compared to $206,135 or 26.8% of consolidated net sales for~~these issues on the ~~first nine months of 2015, a decrease of $61,577 or 29.9%. International sales decreased $26,451 in~~Company's sales; however, the Infrastructure Group, $20,909 in the Aggregate and Mining Group and $14,217 in the Energy Group. The decreases in international sales occurred primarily in Canada, Africa, the Middle East, Brazil and other South American countries, Europe, Post-Soviet States, Australia, Russia, and Asia, partially offset by smaller increases in sales in Japan, China, Mexico and the West Indies. International sales volumesissues continue to be ~~negatively impacted by the strength~~a significant headwind to our regaining historical levels of the U.S. dollar as compared to the currencies in many of the countries in which the Company operates, as well as low oil and gas pricing and the continuing downturn in the mining and oil and gas sectors.

Parts sales for the third quarter of 2016 were $63,082 compared to $62,022 for the third quarter of 2015, an increase of $1,060 or 1.7%. Parts sales as a percentage of consolidated net sales decreased 380 basis points from 29.3% for the third quarter of 2015 to 25.5% for the third quarter of 2016. Parts sales increased in the Energy and Infrastructure Groups but decreased in the Aggregate and Mining Group.international sales.

Parts sales for the first ~~nine months~~quarter of ~~2016~~2017 were ~~$200,974~~$80,959 compared to ~~$202,527~~$74,053 for the first ~~nine months~~quarter of ~~2015, a decrease~~2016, an increase of ~~$1,553~~$6,906 or ~~0.8%~~9.3%. Parts sales as a percentage of ~~consolidated~~ net sales decreased ~~190~~120 basis points from ~~26.4%~~26.6% for the first ~~nine months~~quarter of ~~2015~~2016 to ~~24.5%~~25.4% for the first ~~nine months~~quarter of ~~2016.~~2017. Parts sales increased in all of the ~~Infrastructure Groups but decreased in the Aggregate and Mining Group and the Energy Group.~~Company's segments.

Gross Profit

Consolidated gross profit increased ~~$10,251~~$3,815 or ~~22.7%~~5.3% to ~~$55,389~~$75,771 for the ~~third~~first quarter of ~~2016~~2017 compared to ~~$45,138~~$71,956 for the ~~third~~first quarter of ~~2015.~~2016. Gross profit as a percentage of sales ~~increased 100~~decreased 200 basis points to ~~22.4%~~23.8% for the ~~third~~first quarter of 2017 compared to 25.8% for the first quarter of 2016 ~~compared~~due to ~~21.4% for the third quarter of 2015. The~~changes in product mix, increased ~~gross margin percentage is due primarily to improved margins achieved~~costs associated with new products, a $489 increase in obsolescence expense, a $383 increase in warranty expense, a $378 reduction in foreign exchange gains and a $524 reduction in the ~~Infrastructure Group associated with increased volumes due primarily to pellet plant sales in the third quarter~~recapture of ~~2016 with no similar sales in the third quarter of 2015.~~

Consolidated gross profit increased $27,380 or 15.8% to $200,797 for the first nine months of 2016 compared to $173,417 for the first nine months of 2015. Gross profit as a percentage of sales increased 190 basis points to 24.5% for the first nine months of 2016 compared to 22.6% for the first nine months of 2015. The increased gross margin percentage is due primarily to improved margins achieved in the Infrastructure Group associated with increased volumes due primarily to pellet plant and parts sales in the first nine months of 2016. Additionally, non-recurring expenses totaling $999 related to the closing of the Company's Astec Underground facility in Loudon, Tennessee and relocating the related equipment and inventory to the Company's GEFCO subsidiary were incurred in early 2015.

intercompany profits previously deferred.

Selling, General, Administrative and Engineering Expenses

Selling, general, administrative and engineering expenses increased ~~$2,927~~$9,315 to $53,121 or ~~7.1% to $43,950~~16.7% of net sales for the ~~third~~first quarter of 2017, compared to $43,806 or 15.7% of net sales for the first quarter of 2016 ~~compared~~due to ~~$41,023~~increases in selling expenses of $4,298 (including increases in exhibit costs for ~~the third quarter~~ConExpo-2017 of ~~2015 due primarily to increased payroll/~~$4,254 and commissions of ~~$1,667, profit sharing expense~~$1,016), general and administrative expenses of ~~$1,366 associated with improved~~$3,721 (including increases in wages of $629, annual incentive earnings ~~SERP expense~~ of ~~$783 due to the impact of stock price increases on Company stock held by the SERP~~$1,015 and restricted stock unit expense of ~~$731, offset by reduced repairs to airplanes of $1,556.~~

~~Selling, general, administrative~~$403) and engineering expenses ~~increased $4,580 or 3.6% to $132,716 for the first nine months~~ of ~~2016 compared to $128,136 for the first nine months~~$1,296 (including an increase of 2015 due primarily to increased payroll/commissions of $2,296, profit sharing expense of $2,643 associated with improved earnings, SERP expense of $1,482 due to the impact of stock price increases on Company stock held by the SERP, restricted stock unit expense of $919, offset by reduced repairs to airplanes of $1,556$592 in research and ~~expenses of $824 relating to computer services.~~development costs).

Interest Expense

Interest expense for the ~~third~~first quarter of 2017 decreased to $265 from $467 for the first quarter of 2016 ~~decreased $241~~due to ~~$264 from $505 for the third quarter of 2015.~~

~~Interest expense for the first nine months of 2016 decreased $165 to $1,057 from $1,222 for the first nine months of 2015.~~reduced interest on tax return audits and a reduction in bank debt at Astec Brazil.

Other Income, Net of Expenses

Other income, net of expenses was ~~$505~~$512 for the ~~third~~first quarter of 2017 compared to $544 for the first quarter of 2016, compared to $510 for the third quarter of 2015, a slight decrease of $5 or 0.1%. See Note 14 to the unaudited condensed consolidated financial statements for a summary of items included in other income.

~~Other income, net of expenses was $1,324 for the first nine months of 2016 compared to $2,543 for the first nine months of 2015,~~ a decrease of $1,219 due primarily to $1,204 of key-man life insurance proceeds recorded in the first nine months of 2015. See Note 14 to the unaudited condensed consolidated financial statements for a summary of items included in other income.$32.

Income Tax Expense

The Company's combined effective income tax rate was ~~41.5%~~34.1% for the ~~third~~first quarter of ~~2016~~2017 compared to ~~52.5%~~37.4% for the ~~third~~first quarter of 2015. The continuing high tax rate in each period is due primarily to the Company's inability to recognize tax benefits on losses in certain of the Company's foreign companies and increased state effective tax rates.2016. The tax rate ~~for 2015 does not include a benefit for~~decline between periods is due to favorable impacts of state jobs tax credits, federal domestic production activities deductions and research and development tax credits ~~as legislation extending the credit~~and a reduction in foreign subsidiaries losses for ~~2015 was not enacted by Congress until the fourth quarter of 2015.~~

The Company's combined effective income tax rate was 37.6% for the first nine months of 2016 compared to 38.8% for the first nine months of 2015. The continuing high tax rate in each period is due primarily to the Company's inability to recognizewhich tax benefits ~~on losses in certain of the Company's foreign companies and increased state effective tax rates. The tax rate for 2015 does~~are not ~~include a benefit for research and development tax credits as legislation extending the credit for 2015 was not enacted by Congress until the fourth quarter of 2015.~~recognized.

Net Income

The Company had net income attributable to controlling interest of ~~$6,838~~$15,120 for the ~~third~~first quarter of 2017 compared to $17,743 for the first quarter of 2016, ~~compared to $2,292 for the third quarter~~a decrease of ~~2015, an increase of $4,546~~$2,623 or ~~198.3%~~14.8%. Net income attributable to controlling interest per diluted share was ~~$0.30~~$0.65 for the ~~third~~first quarter of 2017 compared to $0.77 for the first quarter of 2016, ~~compared to $0.10 for the third quarter~~a decrease of ~~2015, an increase of $0.20.~~$0.12. Diluted shares outstanding for the quarters ended ~~September 30,~~March 31, 2017 and 2016 were 23,176 and ~~2015 were 23,145 and 23,121, respectively.~~

The Company had net income attributable to controlling interest of $42,773 for the first nine months of 2016 compared to $29,201 for the first nine months of 2015, an increase of $13,572 or 46.5%. Net income attributable to controlling interest per diluted share was $1.85 for the first nine months of 2016 compared to $1.26 for the first nine months of 2015, an increase of $0.59. Diluted shares outstanding for the nine-month periods ended September 30, 2016 and 2015 were 23,138 and 23,118,23,135, respectively.

Dividends

In February 2013, the Company's Board of Directors approved a dividend policy pursuant to which the Company began paying a quarterly $0.10 per share dividend on its common stock beginning in the second quarter of 2013. The actual amount of future quarterly dividends, if any, will be based upon the Company's financial position, results of operations, cash flows, capital requirements and restrictions under the Company's existing credit agreement, among other factors. The Board retained the power to modify, suspend or cancel the Company's dividend policy in any manner and at any time it deems necessary or appropriate in the future. The Company paid quarterly dividends of $0.10 per common share to shareholders in each quarter of ~~2015~~2016 and the first ~~three quarters~~quarter of ~~2016.~~2017.

Backlog

The backlog of orders as of ~~September 30, 2016~~March 31, 2017 was ~~$389,260~~$361,767 compared to ~~$251,775~~$438,690 as of ~~September 30, 2015, an increase~~March 31, 2016, a decrease of ~~$137,485~~$76,923 or ~~54.6%~~17.5%. Domestic backlogs ~~increased $132,453~~decreased $97,510 or ~~68.6%~~25.1% while international backlogs increased ~~$5,032~~$20,587 or ~~8.6%~~40.6%. The ~~September 30, 2016~~March 31, 2017 backlog was comprised of ~~83.6%~~80.3% domestic orders and ~~16.4%~~19.7% international orders, as compared to ~~76.7%~~88.4% domestic orders and ~~23.3%~~11.6% international orders as of ~~September 30, 2015.~~March 31, 2016. Included in the ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ backlogs is approximately $60,000 for a three line pellet plant from one customer under a Company financed arrangement whereby the Company will record the related revenues when payment is received, which is expected in ~~2017. Additionally,~~2018. A majority of the ~~Company received an unrelated $30,000~~backlog at March 31, 2016 pertaining to a $122,500 pellet plant order from a second customer was fulfilled in ~~the third quarter of 2015 which was increased by $122,500 in~~2016 and the first quarter of 2017, with a remaining backlog of $8,251 related to this order at March 31, 2017. No additional pellet plant orders have been received. All March 31, 2016 backlog amounts have been recast to include the backlog of Power Flame Incorporated which ~~approximately $74,100 is included in the September 30, 2016 backlog.~~was acquired on August 1, 2016. The Company is unable to determine whether the changes in backlogs were experienced by the industry as a whole; however, the Company believes the changes in backlogs reflect the current economic conditions the industry is experiencing.

Segment Net ~~Sales-Quarter~~Sales:

	Three Months Ended September 30,									Three Months Ended March 31,
	2016		2015		$ Change		% Change			2017		2016		$ Change		% Change
Infrastructure Group	$	109,227	$	85,625	$	23,602		27.6	%	$	165,243	$	153,114	$	12,129		7.9	%
Aggregate and Mining Group		85,819		80,549		5,270		6.5	%		100,613		92,488		8,125		8.8	%
Energy Group		52,706		45,176		7,530		16.7	%		52,545		33,119		19,426		58.7	%

Infrastructure Group: Sales in this group were ~~$109,227~~$165,243 for the ~~third~~first quarter of ~~2016~~2017 compared to ~~$85,625~~$153,114 for the same period in ~~2015,~~2016, an increase of ~~$23,602~~$12,129 or ~~27.6%~~7.9%. Domestic sales for the Infrastructure Group increased ~~$28,976~~$2,792 or ~~42.2%~~2.0% for the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015~~2016 due primarily to increases in mobile equipment related sales of $10,249 and asphalt plant related sales of $8,123, offset by a decline in pellet plant sales of $15,604. The increases in domestic sales are due primarily to increased ~~sales of asphalt plants and mobile asphalt equipment (impacted~~road building activities impacted by the ~~passage of a new~~ long-term ~~Federal~~ highway bill approved in December ~~2015) and pellet plant sales of $18,141 in the third quarter of 2016 (part of the $122,500 order discussed in the backlog section above).~~2015. International sales for the Infrastructure Group ~~decreased $5,374~~increased $9,337 or ~~31.7%~~56.2% for the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015~~2016 due primarily to ~~reduced~~a $7,459 increase in mobile asphalt related sales ~~across most product lines~~ resulting from improved highway building activities in certain foreign countries. The increase in international sales was also impacted by the ~~continued strength~~Company's decision to market its mobile equipment products through equipment dealers in select territories in which historical direct sales efforts yielded less than desired volumes. Additionally, sales through the Company-owned distributor in Australia increased by 30.5% from the first quarter of 2016 to the ~~U.S. dollar compared to many local foreign currencies.~~first quarter of 2017. Sales ~~decreases~~increases in ~~South America,~~ Canada, Russia, Mexico and ~~the Middle East~~Australia were partially offset by ~~increases~~decreases in sales in ~~the West Indies~~Europe, South America and ~~Central America (excluding Mexico).~~China. Parts sales for the Infrastructure Group increased ~~1.0%~~6.8% for the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015~~2016 due primarily to improved sales of parts for mobile asphalt equipment.

Aggregate and Mining Group: Sales in this group were ~~$85,819~~$100,613 for the ~~third~~first quarter of ~~2016~~2017 compared to ~~$80,549~~$92,488 for the same period in ~~2015,~~2016, an increase of ~~$5,270~~$8,125 or ~~6.5%~~8.8%. Domestic sales for the Aggregate and Mining Group increased ~~$4,680~~by $4,318 or ~~8.9%~~6.4% for the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015~~2016 due primarily to improved sales by the ~~sale of a Company-owned distributor for~~Company's Northern Ireland based subsidiary into the ~~KPI/JCI/AMS product lines~~U.S. domestic market and ~~all of its inventory (which resulted in equipment~~increased sales ~~of $7,984). This increase was partially offset by a decline in sales in~~to the ~~Group's mining industry product lines.~~Company's traditional rock quarry markets. International sales for the Aggregate and Mining Group increased ~~$590~~$3,807 or ~~2.1%~~15.4% in the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015.~~2016 due to a slight moderation of foreign exchange increases versus the U.S. dollar in certain foreign jurisdictions as well as a small improvement in sales in the mining industry compared to the historically low sales in 2016. International sales increases in ~~Mexico, South America~~Canada and Europe were partially offset by decreased sales in ~~Africa, Brazil~~Japan/Korea and Canada. The Group's U.S. based subsidiaries that sell into the mining industry achieved modest growth in international sales due to pent up demand notwithstanding the continued strength of the U.S. dollar compared to many local foreign currencies. The Company's subsidiaries based in South ~~Africa, Canada and Northern Ireland each experienced increases in international sales while its South Africa and Brazil based subsidiaries experienced a decline in international sales.~~America (excluding Brazil). Parts sales for this group ~~decreased 1.1%~~increased 9.4% for the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015.~~2016.

Energy Group: Sales in this group were ~~$52,706~~$52,545 for the ~~third~~first quarter of ~~2016~~2017 compared to ~~$45,176~~$33,119 for the same period in ~~2015,~~2016, an increase of ~~$7,530~~$19,426 or ~~16.7%~~58.7%. Domestic sales for the Energy Group increased ~~$9,862~~$12,140 or ~~28.0%~~40.4% for the ~~third~~first quarter of ~~2016~~2017 compared to the same period in ~~2015 due to sales by Power Flame Incorporated ("Power Flame"), which was acquired as of August 1,~~ 2016 and increased sales of concrete plants and wood chippers/grinders. International sales for the Energy Group decreased $2,332 or 23.6%. Sales decreases in South America, Canada and Asia were partially offset by increased sales in Australia. International sales continue to be negatively impacted due to the strength of the U.S. dollar compared to many local foreign currencies and continuing low oil and gas prices. Parts sales for this group increased 11.1% for the third quarter of 2016 compared to the same period in 2015 due primarily to ~~the acquisition~~$5,982 of ~~Power Flame and improved sales to customers in the water well drilling industry.~~

~~Segment Net Sales-Nine Months~~:

Nine Months Ended
September 30,

2016 2015 $ Change % Change
Infrastructure Group $ 414,817 $ 336,768 $ 78,049 23.2 %
Aggregate and Mining Group 277,393 285,790 (8,397 ) (2.9 %)
Energy Group 128,658 145,583 (16,925 ) (11.6 %)

~~Infrastructure Group~~: Sales in this group were $414,817 for the first nine months of 2016 compared to $336,768 for the same period in 2015, an increase of $78,049 or 23.2%. Domestic sales for the Infrastructure Group increased $104,500 or 38.6% for the first nine months of 2016 compared to the same period in 2015 due primarily to increased sales of asphalt plants, mobile asphalt equipment (positively impacted by the passage of a new long-term Federal highway bill in December 2015) and pellet plant sales. International sales for the Infrastructure Group decreased $26,451 or 39.9% for the first nine months of 2016 compared to the same period in 2015 due to reduced sales across most product lines resulting from the continued strength of the U.S. dollar compared to many local foreign currencies. Sales decreases in Canada, Europe, the Middle East, South America and post-Soviet States were partially offset by increases in sales in China and the West Indies. Parts sales for the Infrastructure Group increased 6.5% for the first nine months of 2016 compared to the same period in 2015 due primarily to improved sales of parts for asphalt plants.

~~Aggregate and Mining Group~~: Sales in this group were $277,393 for the first nine months of 2016 compared to $285,790 for the same period in 2015, a decrease of $8,397 or 2.9%. Domestic sales for the Aggregate and Mining Group increased $12,512 or 6.9% for the first nine months of 2016 compared to the same period in 2015 due primarily to increased sales of aggregate processing equipment offset by a decline in sales into the U.S. mining market. International sales for the Aggregate and Mining Group decreased $20,909 or 20.2% in the first nine months of 2016 compared to the same period in 2015. International sales decreases in Africa, Canada, Brazil and other South American countries, the Middle East, India and post-Soviet States were partially offset by increased sales in Mexico, Japan and other Asian countries. International sales by the Company's subsidiaries based in Canada and Northern Ireland increased while the Company's U.S., South Africa and Brazil based subsidiaries experienced declines in sales. International sales continue to be negatively impacted by the reduced customer demand for equipment in the mining sector and pricing issues in many foreign countries due to the strength of the U.S. dollar compared to many local foreign currencies. Parts sales for this group decreased 7.5% for the first nine months of 2016 compared to the same period in 2015 due primarily to reduced sales into the international mining sector.

~~Energy Group~~: Sales in this group were $128,658 for the first nine months of 2016 compared to $145,583 for the same period in 2015, a decrease of $16,925 or 11.6%. Domestic sales for the Energy Group decreased $2,708 or 2.5% for the first nine months of 2016 compared to the same period in 2015 due primarily to a lack of demand across most product lines impacted by the continuing low oil and gas prices, offset by sales increases in wood chippers/grinders, concrete plants and sales by Power Flame, which was acquired in August ~~1, 2016.~~2016, as well as a $2,957 increase in sales (related to both water and oil and gas markets) between periods by the Company's GEFCO subsidiary. International sales for the Energy Group ~~decreased $14,217~~increased $7,286 or ~~38.9% across all product lines. International~~237.4% due primarily to increased sales ~~decreased~~of $2,831 by Peterson Pacific and $2,263 by GEFCO (including a $1,397 deep water well rig sold to a customer in ~~Russia,~~Africa). Sales increases occurred in most foreign territories but increased most significantly in Australia, ~~the Middle East, Asia~~Africa and ~~Africa. International sales continue to be negatively impacted due to the strength of the U.S. dollar compared to many local foreign currencies and continuing low oil and gas prices.~~Canada. Parts sales for this group ~~decreased 4.6%~~increased 20.7% for the first ~~nine months~~quarter of ~~2016~~2017 compared to the same period in ~~2015 due primarily to reduced sales of parts for drilling rig equipment.~~2016.

Segment Profit (Loss)~~-Quarter~~:

	Three Months Ended September 30,												Three Months Ended March 31,
	2016			2015			$ Change			% Change			2017			2016			$ Change			% Change
Infrastructure Group	$	9,858		$	2,116		$	7,742			365.9	%	$	18,180		$	21,863		$	(3,683	)		(16.8	)%
Aggregate and Mining Group		7,651			3,790			3,861			101.9	%		8,428			9,538			(1,110	)		(11.6	)%
Energy Group		805			1,941			(1,136	)		(58.5	%)		2,729			(192	)		2,921			N/A
Corporate		(11,610	)		(6,853	)		(4,757	)		(69.4	%)		(14,428	)		(14,226	)		(202	)		(1.4	)%

Infrastructure Group: Segment profit for this group was ~~$9,858~~$18,180 for the ~~third~~first quarter of ~~2016~~2017 compared to ~~$2,116~~$21,863 for the same period in ~~2015, an increase~~2016, a decrease of ~~$7,742~~$3,683 or ~~365.9%~~16.8%. ~~This group had an increase~~Segment profits for the Infrastructure Group were negatively impacted by a decrease in gross profit of ~~$8,825~~$2,036 resulting from ~~increased sales of $23,602 as described above. Gross~~a 310 basis point decrease in gross margins ~~increased 400 basis points~~(primarily due to ~~a more favorable~~ product mix changes due to decreased pellet plant sales) and an $1,667 increase in ~~the third quarter of 2016 as compared~~selling expenses (primarily related to ~~the third quarter of 2015, and a reduction in underabsorbed overhead of $2,005.~~ our exhibit expenses at ConExpo 2017).

Aggregate and Mining Group: Segment profit for this group was ~~$7,651~~$8,428 for the ~~third~~first quarter of ~~2016~~2017 compared to ~~$3,790~~$9,538 for the same period in ~~2015, an increase~~2016, a decrease of ~~$3,861~~$1,110 or ~~101.9%~~11.6%. ~~This group had an increase~~The decrease in ~~gross~~ profit primarily resulted from $1,746 of ~~$1,709 resulting from gross profits on~~ConExpo 2017 related costs incurred in the ~~increase~~first quarter of 2017, partially offset by a $440 reduction in sales ~~of $5,270 described above and the recapture of intercompany profit previously deferred of $649~~promotions while gross ~~margins percentages~~profits remained relatively constant ~~between periods. Additionally, selling expenses declined by $1,391 (primarily driven by a~~(a small decline ~~in sales promotion expenses~~ of ~~$1,125) for the third quarter of 2016 as compared to the third quarter of 2015, and major airplane repairs of $608 incurred in the third quarter of 2015 were not repeated in 2016.~~

$125).

Energy Group: ~~Segment~~The Energy group had a profit ~~for this group was $805~~of $2,729 for the ~~third~~first quarter of 2017 compared to a loss of $192 for the first quarter of 2016, ~~compared to $1,941~~a favorable change of $2,921. Profit for the third quarter of 2015, a decrease of $1,136 or 58.5%. This group had a decrease in gross profit of $321, although sales increased by $7,530 as described above, as gross margins decreased 370 basis points. The decrease in gross margins is due to pricing pressures from the continuing downturn in the oil and gas market and an increase of $625 in unabsorbed overhead between periods. Additionally, the third quarter of 2016 included $1,081 of selling, general, administrative and engineering expenses of Power Flame including $410 of intangible asset amortization.

~~Corporate~~: The Corporate Group had a net loss of $11,610 for the third quarter of 2016 compared to a net loss of $6,853 for the third quarter of 2015, an unfavorable increase of $4,757 or 69.4% due primarily to an increase of $2,202 in income taxes related to improved consolidated profits, increased profit sharing expense of $1,366, increased SERP expense of $783 (due primarily to the increase in the Company's stock price) and increased restricted stock unit expense of $731. The cost increases were partially offsetsegment was positively impacted by a ~~reduction of $954 in airplane repairs expense.~~

~~Segment Profit (Loss)-Nine Months~~:

Nine Months Ended
September 30,

2016 2015 $ Change % Change
Infrastructure Group $ 51,394 $ 29,472 $ 21,922 74.4 %
Aggregate and Mining Group 28,135 25,441 2,694 10.6 %
Energy Group 3,237 2,805 432 15.4 %
Corporate (40,745 ) (29,154 ) (11,591 ) (39.8 %)

~~Infrastructure Group: Segment profit for this group was $51,394 for the first nine months of 2016 compared to $29,472 for the same period in 2015, an increase of $21,922 or 74.4%. The group had an~~$5,805 increase in gross ~~profit of $27,057 resulting from gross~~ profits ~~on the increased sales between periods of $78,049 described above and~~due to a ~~230~~310 basis point increase in gross margins ~~partially due to a $3,030 improvement in absorption variances between periods, margins~~ on ~~a 6.5% increase in parts sales and~~$19,426 of increased sales of equipment with higher-than-average margins. The improved gross profit was partially offset by a $2,044 increase in foreign and state income taxes on the improved earnings, and a $2,299 increase in selling expenses (primarily wages/commission and sales promotions/advertising).

~~Aggregate and Mining Group~~: Segment profit for this group was $28,135 for the first nine months of 2016 compared to $25,441 for the same period in 2015, an increase of $2,694 or 10.6%. The increase in profit primarily resulted from a 140 basis points increase and a $2,042 net increase in gross profits. The gross profit improvement resulted from favorable change in foreign exchange translation/transaction gains/losses of $1,231, reduced factory indirect wages of $615, reduced health insurance costs of $446 and reduced warranty expenses of $549.

~~Energy Group~~: Segment profit for this group was $3,237 for the first nine months of 2016 compared to $2,805 for the first nine months of 2015, an increase $432 or 15.4%. Profit for the segment was negatively impacted by a $1,843 reduction in gross profit resulting from a $16,925 decline in sales between periods, partially ~~offset~~impacted by a ~~110 basis point increase~~$2,482 improvement in gross margin due to a $1,513 reduction in underabsorbed overhead and a $963 reduction in warranty expenses between periods. The improved overhead absorption was due partially to the closing the Astec Underground facility in Loudon, Tennessee in May 2015. Additionally, margins for the nine months ended September 30, 2015 were negatively impacted by the one-time costs incurredprofits at the Company's GEFCO subsidiary ~~to absorb the Loudon production lines into its operations~~ and ~~to transfer the Loudon equipment and inventory to its facility. Segment~~gross profits earned by Power Flame, which was acquired in August 2016. The improved gross profits were ~~further improved~~partially offset by ~~a reduction~~an increase in ~~foreign and state income taxes of $434 and a $1,557 reduction in~~ selling ~~general, administrative and engineering~~ expenses between periods ~~(primarily~~of $2,064, including a $723 increases in wages and commissions and $485 related to ~~the closing of the Underground facility).~~

ConExpo-2017.

Corporate: The Corporate Group had a loss of ~~$40,745~~$14,428 for the first ~~nine months~~quarter of ~~2016~~2017 compared to a loss of ~~$29,154~~$14,226 for the first ~~nine months~~quarter of ~~2015,~~2016, an unfavorable increase of ~~$11,591~~$202 or ~~39.8% due to an increase of $5,703~~1.4%. Corporate losses were favorably impacted by a $2,527 reduction in income taxes ~~related to improved consolidated profits, increased profit sharing expenses of $2,922, SERP~~offset by increases in annual incentive plan expense of ~~$1,483~~$1,034 and restricted stock unit expense of ~~$919 offset by a reduction in airplane repairs of $948. Additionally, the Company recorded non-recurring income from key-man life insurance proceeds of $1,204 in the first nine months of 2015.~~$403.

Liquidity and Capital Resources

The Company's primary sources of liquidity and capital resources are its cash on hand, borrowing capacity under a $100,000 revolving credit facility and cash flows from operations. The Company had ~~$52,474~~$55,401 of cash available for operating purposes as of ~~September 30, 2016,~~March 31, 2017, of which ~~$15,065~~$16,999 was held by the Company's foreign subsidiaries. While the Company has no plans to transfer the cash held by its foreign subsidiaries to the U.S. in the foreseeable future, to the extent foreign earnings are eventually repatriated, such amounts may be subject to income tax liabilities, both in the U.S. and in various applicable foreign jurisdictions. At ~~September 30, 2016~~March 31, 2017 and at all times during the first ~~nine months~~quarter of ~~2016,~~2017, the Company had no borrowings outstanding under its credit facilities with Wells Fargo Bank, N.A. Net of letters of credit totaling ~~$15,196,~~$8,496, the Company had borrowing availability of ~~$84,804~~$91,504 under the credit facility as of ~~September 30, 2016.~~March 31, 2017.

~~The Wells Fargo credit facility is a five-year agreement that was entered into in~~On April ~~2012. The amended and restated~~12, 2017, the Company's credit agreement with Wells Fargo ~~continued~~was amended and restated with several modifications including: a) the ~~Company's previous $100,000 revolving credit facility and includes a~~maturity date was extended to April 12, 2022; b) the sub-limit for letters of credit ~~of $25,000. Borrowings under~~was increased from $25,000 to $30,000; and c) the agreement are subject to an interest rate equal to the daily one month LIBOR rate plus a 0.75% margin, resulting in a rate of 1.29% as of September 30, 2016. Interest only payments are due monthly. The unused facility fee iswas decreased from 0.175% to 0.125%. The amended and restated credit agreement contains certain financial covenants, including provisions concerning required levels of annual net income and minimum tangible net ~~worth and maximum allowed capital expenditures.~~ worth. The Company was in compliance with ~~these~~the financial covenants as of ~~September 30, 2016.~~the Wells Fargo agreement at March 31, 2017.

The Company's Brazilian subsidiary, Astec Brazil, has outstanding working capital loans totaling ~~$5,639~~$5,235 from three Brazilian banks with interest rates ranging from 10.4% to 11.0%. The loans' maturity dates range from November 2018 to April 2024 and the debts are secured by Astec Brazil's manufacturing ~~facility.~~facility and also by letters of credit totaling $6,200 issued by Astec Industries, Inc. Additionally, Astec Brazil has various 5-year equipment financing loans outstanding with two Brazilian banks in the aggregate of ~~$1,301~~$1,081 as of ~~September 30, 2016~~March 31, 2017 that have interest rates ranging from 3.5% to 16.3%. These equipment loans have maturity dates ranging from September 2018 to April 2020. ~~A portion of the Astec Brazil debt is also secured by letters of credit totaling $11,874 issued by Astec Industries, Inc.~~

3027

Cash Flows from Operating Activities:

	Nine Months Ended September 30,									Three Months Ended March 31,						Increase
	2016			2015			Change			2017			2016			(Decrease)
Net income	$	42,654		$	28,532		$	14,122		$	15,080		$	17,678		$	(2,598	)
Deferred income tax benefit		(2,019	)		(3,959	)		1,940
Depreciation and amortization		18,118			18,042			76			6,411			5,870			541
Provision for warranties		13,135			11,723			1,412			3,996			3,615			381
Changes in working capital:
(Increase) decrease in trade and other receivables		(5,224	)		2,504			(7,728	)
(Increase) decrease in inventories		(8,120	)		3,628			(11,748	)
Increase (decrease) in accounts payable		3,234			(14,581	)		17,815
Decrease in accrued product warranty		(11,011	)		(11,499	)		488
Increase in trade and other receivables											(45,910	)		(17,667	)		(28,243	)
Increase in inventories											(12,166	)		(4,728	)		(7,438	)
Increase in accounts payable											16,276			8,193			8,083
Increase (decrease) in customer deposits		35,685			(12,523	)		48,208			(154	)		22,138			(22,292	)
Decrease in accrued product warranties											(3,460	)		(2,357	)		(1,103	)
Change in prepaid and income taxes payable, net		5,655			(1,792	)		7,447			7,877			9,745			(1,868	)
Other, net		4,666			2,069			2,597			(2,672	)		2,576			(5,248	)
Net cash provided by operating activities	$	96,773		$	22,144		$	74,629
Net cash provided (used) by operating activities										$	(14,722	)	$	45,063		$	(59,785	)

Net cash from operating activities ~~increased~~decreased by ~~$74,629~~$59,785 for the first ~~nine~~three months of ~~2016~~2017 as compared to the first ~~nine~~three months of ~~2015~~2016 due primarily to cash from earnings, growth in customer deposits on large orders included in the Company's backlog and increases in accounts payable associated with increased manufacturing activity. These increases were partially offset by ana $28,243 increase in the growth of accounts receivables ~~and inventory due~~(due to an increase in days outstanding from 38.7 to 43.3 between periods), an increase in the growth of inventories of $7,438 related to increased sales ~~and backlogs.~~volumes, a reduction in the growth of customer deposits of $22,292 (due primarily to a large pellet plant related deposit received in the first quarter of 2016) offset by a $8,083 increase in the growth of accounts payable.

Cash Flows ~~from~~Used by Investing Activities:

	Nine Months Ended September 30,									Three Months Ended March 31,						Increase
	2016			2015			Change			2017			2016			(Decrease)
Expenditures for property and equipment	$	(17,483	)	$	(15,483	)	$	(2,000	)	$	(5,406	)	$	(5,054	)	$	(352	)
Business acquisitions, net of cash acquired		(39,613	)		178			(39,791	)
Other		403			907			(504	)		(152	)		99			(251	)
Net cash used by investing activities	$	(56,693	)	$	(14,398	)	$	(42,295	)	$	(5,558	)	$	(4,955	)	$	(603	)

Net cash used by investing activities increased by ~~$42,295~~$603 for the first ~~nine~~three months of ~~2016~~2017 as compared to the same period in ~~2015~~2016 due primarily to increased spending on capital expenditures in the ~~acquisition~~first quarter of ~~Power Flame in August~~2017 as compared to the first quarter of 2016.

Total capital expenditures for ~~2016~~2017 are forecasted to be approximately ~~$23,000.~~$30,000. The Company expects to finance these expenditures using currently available cash balances, internally generated funds and available credit under the Company's credit facilities. Capital expenditures are generally for machinery, equipment and facilities used by the Company in the production of its various products. The Company believes that its current working capital, cash flows generated from future operations and available capacity under its credit facility will be sufficient to meet the Company's working capital and capital expenditure requirements through ~~September 30, 2017.~~March 31, 2018.

Cash Flows from Financing Activities:

	Nine Months Ended September 30,									Three Months Ended March 31,						Increase
	2016			2015			Change			2017			2016			(Decrease)
Payment of dividends	$	(6,912	)	$	(6,893	)	$	(19	)	$	(2,306	)	$	(2,304	)	$	(2	)
Net change in borrowings from banks		(3,875	)		154			(4,029	)		(4,601	)		274			(4,875	)
Sale (purchase) of Company shares held by SERP, net		(99	)		2,053			(2,152	)		285			(20	)		305
Other, net		(1,748	)		(833	)		(915	)		(501	)		(1,022	)		521
Net cash used by financing activities	$	(12,634	)	$	(5,519	)	$	(7,115	)	$	(7,123	)	$	(3,072	)	$	(4,051	)

3128

Cash ~~used by~~from financing activities ~~increased~~decreased by ~~$7,115~~$4,051 for the first ~~nine~~three months of ~~2016~~2017 compared to the same period in ~~2015~~2016 due primarily to ~~net repayments on bank loans by~~$6,216 of an overdraft facility outstanding at the Company's ~~Brazilian subsidiary. In addition, cash from financing activities for~~South African subsidiary at December 31, 2016 being paid in the first ~~nine months~~quarter of 2015 were positively affected by cash received from the sale of Company shares held in participants' SERP accounts in 2015, partially due to the payout of the Company's former CEO's account to his beneficiary in 2015.2017.

Financial Condition

The Company's current assets increased to ~~$590,567~~$606,332 as of ~~September 30, 2016~~March 31, 2017 from ~~$541,797~~$576,833 as of December 31, ~~2015,~~2016, an increase of ~~$48,770~~$29,499 or ~~9.0%~~5.1% due primarily to an increases in ~~cash of $27,412,~~ trade receivables of ~~$9,571~~$44,879 and ~~inventory~~inventories of ~~$14,942~~$12,166, offset by a decline in cash of $26,970 during the first ~~nine months~~quarter of ~~2016.~~2017.

The Company's current liabilities increased to ~~$190,206~~$184,635 as of ~~September 30, 2016~~March 31, 2017 from ~~$142,012~~$168,861 as of December 31, ~~2015,~~2016, an increase of ~~$48,194~~$15,774 or ~~33.9%. The~~9.3% due primarily to an increase ~~is primarily due to increases~~ in ~~customer deposits of $35,685 on large orders in the Company's backlog,~~ accounts payable of ~~$5,111 and accrued product warranties of $2,407.~~$16,509.

Market Risk and Risk Management Policies

We have no material changes to the disclosure on this matter made in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

Off-balance Sheet Arrangements

As of ~~September 30, 2016,~~March 31, 2017, the Company does not have any off-balance sheet arrangements as defined by Item 303(a)(4) of Regulation S-K.

Contractual Obligations

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, there were no substantial changes in the Company's commitments or contractual liabilities.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company has no material changes to the disclosure on this matter made in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

The Company's management, under the supervision and with the participation of the Company's principal executive officer and principal financial officer, has evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company's principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective.

Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the ~~nine months~~quarter ended ~~September 30, 2016~~March 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

3229

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved from time to time in legal actions arising in the ordinary course of its business. Other than as set forth in Part I, "Item 3. Legal Proceedings" in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, the Company currently has no pending or threatened litigation that the Company believes will result in an outcome that would materially affect the Company's business, financial position, cash flows or results of operations. Nevertheless, there can be no assurance that future litigation to which the Company becomes a party will not have a material adverse effect on its business, financial position, cash flows or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015,~~2016, which could materially affect the Company's business, financial condition or future results. There have been no material changes in the Company's risk factors from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015.~~2016. The risks described in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2015~~2016 and in this Quarterly Report on Form 10-Q are not the only risks facing our Company. Additional risks and uncertainties not currently known to management or that management currently deems to be immaterial also may materially adversely affect the Company's business, financial condition or operating results.

Item 6. Exhibits

Exhibit No.		Description
10.1		Amendment to "Appendix A" of the Astec Industries, Inc. Supplemental Executive Retirement Plan, effective ~~October~~April 27, ~~2016.~~2017.
10.2		First Amendment to Amended and Restated Credit Agreement dated April 12, 2017, between Astec Industries, Inc. and Certain of its Subsidiaries and Wells Fargo Bank, Nation Association.
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

The exhibits are numbered in accordance with Item 601 of Regulation S-K. Inapplicable exhibits are not included in the list.

* In accordance with Release No. 34-47551, this exhibit is hereby furnished to the SEC as an accompanying document and is not to be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended.

Items 2, 3, 4 and 5 are not applicable and have been omitted.

3330

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ASTEC INDUSTRIES, INC. (Registrant)


Date: ~~November 7, 2016~~May 8, 2017	/s/ Benjamin G. Brock
	Benjamin G. Brock Chief Executive Officer (Principal Executive Officer)


Date: ~~November 7, 2016~~May 8, 2017	/s/ David C. Silvious
	David C. Silvious Chief Financial Officer, Vice President, and Treasurer (Principal Financial and Accounting Officer)

Exhibit Index

Exhibit No.		Description
10.1		Amendment to "Appendix A" of the Astec Industries, Inc. Supplemental Executive Retirement Plan, effective ~~October~~April 27, ~~2016.~~2017.
10.2		First Amendment to Amended and Restated Credit Agreement dated April 12, 2017, between Astec Industries, Inc. and Certain of its Subsidiaries and Wells Fargo Bank, Nation Association.
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

	Three Months Ended September 30, 2016
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	109,227		$	85,819		$	52,706		$	--		$	247,752
Intersegment sales		5,324			10,063			4,108			--			19,495
Gross profit		24,929			20,935			9,473			52			55,389
Gross profit percent		22.8	%		24.4	%		18.0	%		--			22.4	%
Segment profit (loss)	$	9,858		$	7,651		$	805		$	(11,610	)	$	6,704

	Three Months Ended September 30, 2015
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	85,625		$	80,549		$	45,176		$	--		$	211,350
Intersegment sales		5,839			4,604			1,122			--			11,565
Gross profit		16,104			19,226			9,794			14			45,138
Gross profit percent		18.8	%		23.9	%		21.7	%		--			21.4	%
Segment profit (loss)	$	2,116		$	3,790		$	1,941		$	(6,853	)	$	994