Segment Information

6 Months Ended

Jun. 30, 2019

Note 13. 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 - The Infrastructure Group segment is comprised of five business units. These business units include Astec, Inc. (“Astec”), Roadtec, Inc. (“Roadtec”), Carlson Paving Products, Inc. (“Carlson”), Astec Mobile Machinery GmbH (“AMM”) and Astec Australia Pty Ltd (“Astec Australia”). Three of the business units (Astec, Roadtec and Carlson) design, engineer, manufacture and market a complete line of asphalt plants and their related components, asphalt pavers, screeds, milling machines, material transfer vehicles, stabilizers and related ancillary equipment. The other two business units (AMM and Astec Australia) primarily 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. During late 2018, the Company decided to close AMM, located in Germany, in 2019, and its assets are currently being liquidated. The principal purchasers of the products produced by this group are asphalt producers, highway and heavy equipment contractors, and foreign and domestic governmental agencies.

Aggregate and Mining Group - The Company's Aggregate and Mining Group is comprised of eight business units which are focused on designing and manufacturing heavy processing equipment, as well as servicing and supplying parts for the aggregate, metallic mining, recycling, ports and bulk handling markets. These business units are Telsmith, Inc. (“Telsmith”), Kolberg-Pioneer, Inc. (“KPI”), Astec Mobile Screens, Inc. (“AMS”), Johnson Crushers International, Inc. (“JCI”), Breaker Technology Ltd/Breaker Technology, Inc. (“BTI”), Osborn Engineered Products, SA (Pty) Ltd (“Osborn”), Astec do Brasil Fabricacao de Equipamentos Ltda. (“Astec Brazil”) and Telestack Limited (“Telestack”). 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 - The Company’s Energy Group is comprised of six business units focused on supplying heavy equipment such as heaters, drilling rigs, concrete plants, wood chippers and grinders, pump trailers, storage equipment and related parts to the oil and gas, construction, and water well industries, as well as commercial and industrial burners used primarily in commercial, industrial and process heating applications. The business units included in the Energy Group are Heatec, Inc. (“Heatec”), CEI Enterprises, Inc. (“CEI”), GEFCO, Inc. (“GEFCO”), Peterson Pacific Corp. (“Peterson”), Power Flame Incorporated (“Power Flame”) and RexCon, Inc. (“RexCon”). 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, ready mix concrete producers and contractors in the construction and demolition recycling markets.

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., a captive insurance company and a Company-owned distributor in the start-up phase of operations in Chile. The Company evaluates performance and allocates resources to its operating segments based on profit or loss from operations before U.S. federal income taxes, state deferred 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 June 30, 2019
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	133,235		$	106,837		$	64,730		$	–		$	304,802
Intersegment sales		2,849			5,782			4,095			–			12,726
Gross profit		42,689			25,493			15,187			81			83,450
Gross profit percent		32.0	%		23.9	%		23.5	%		–			27.4	%
Segment profit (loss)	$	24,445		$	8,489		$	3,138		$	(13,220	)	$	22,852

	Six Months Ended June 30, 2019
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	288,229		$	213,368		$	128,985		$	–		$	630,582
Intersegment sales		4,920			10,539			11,116			–			26,575
Gross profit		78,196			51,038			30,666			76			159,976
Gross profit percent		27.1	%		23.9	%		23.8	%		–			25.4	%
Segment profit (loss)	$	39,683		$	17,166		$	6,532		$	(26,690	)	$	36,691

	Three Months Ended June 30, 2018
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate		Total
Net sales to external customers	$	83,202		$	116,297		$	73,029		$	–	$	272,528
Intersegment sales		3,370			5,102			6,724			–		15,196
Gross profit (loss)		(47,817	)		29,042			19,808			75		1,108
Gross profit (loss) percent		(57.5	)%		25.0	%		27.1	%		–		0.4	%
Segment profit (loss)	$	(62,734	)	$	12,548		$	8,477		$	596	$	(41,113	)

	Six Months Ended June 30, 2018
	Infrastructure Group			Aggregate and Mining Group			Energy Group			Corporate			Total
Net sales to external customers	$	230,296		$	235,364		$	132,321		$	–		$	597,981
Intersegment sales		11,641			9,008			11,863			–			32,512
Gross profit (loss)		(14,536	)		58,331			35,095			223			79,113
Gross profit (loss) percent		(6.3	)%		24.8	%		26.5	%		–			13.2	%
Segment profit (loss)	$	(47,882	)	$	25,658		$	13,088		$	(10,652	)	$	(19,788	)

A reconciliation of total segment profit to the Company’s consolidated totals is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
Total segment profit (loss)	$	22,852	$	(41,113	)	$	36,691	$	(19,788	)
Recapture (elimination) of intersegment profit		509		345			888		(764	)
Net income (loss)		23,361		(40,768	)		37,579		(20,552	)
Net loss attributable to non-controlling interest in subsidiaries		16		94			72		145
Net income (loss) attributable to controlling interest	$	23,377	$	(40,674	)	$	37,651	$	(20,407	)