United States
Securities and Exchange Commission
Washington, D.C. 20549

Form 11-K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)

(x) Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2018.

Or

( ) Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from ___________ to _____________.

Commission File No. 001-11595

A.
Full title of the plan and the address of the plan, if different from that of the issuer named below:

Astec Industries, Inc. 401(k) Retirement Plan
1725 Shepherd Road
Chattanooga, TN 37421
(423) 899-5898

B.
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Astec Industries, Inc.
1725 Shepherd Road
Chattanooga, TN 37421
(423) 899-5898

1


REQUIRED INFORMATION


The following financial statements and schedules have been prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, as amended:



Audited Financial Statements:

Supplemental Schedule:

Edgar filing only:


2





Astec Industries, Inc. 401(k) Retirement Plan
Audited Financial Statements and
Supplemental Schedule
Astec Industries, Inc. 401(k) Retirement Plan
As of December 31, 2018 and 2017 and for the
Year Ended December 31, 2018
With Report of Independent Registered Public Accounting Firm

3

Astec Industries, Inc. 401(k) Retirement Plan
Audited Financial Statements and Supplemental Schedule
As of December 31, 2018 and 2017
and for the Year Ended December 31, 2018
Contents
Financial Statements
Supplemental Schedule

4


Report of Independent Registered Public Accounting Firm

To Plan Administrator and Plan Participants of the
Astec Industries Inc. 401(k) Retirement Plan:

Opinion on the Financial Statements

We have audited the accompanying statements of net assets available for benefits of the Astec Industries Inc. 401(k) Retirement Plan (the “Plan”) as of December 31, 2018 and 2017, and the related statement of changes in net assets available for benefits for the year ended December 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2018 and 2017, and the changes in net assets available for benefits for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
5


Supplemental Information

The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 2018 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

/s/ LBMC, PC

We have served as the Plan’s auditor since 2013.

Brentwood, Tennessee
June 13, 2019



6

Astec Industries, Inc. 401(k) Retirement Plan
           
             
Statements of Net Assets Available for Benefits
           
             

 
December 31,
 
   
2018
   
2017
 
Assets
           
Interest bearing cash
 
$
1,156
   
$
--
 
Investments, at fair value
   
243,653,244
     
271,307,813
 
Receivables:
               
Company contributions
   
153,613
     
158,719
 
Notes receivable from participants
   
8,689,994
     
8,664,117
 
Total receivables
   
8,843,607
     
8,822,836
 
Total assets
   
252,498,007
     
280,130,649
 
                 
Liabilities
               
Excess participant contributions payable
   
38,896
     
109,213
 
Net assets available for benefits
 
$
252,459,111
   
$
280,021,436
 
                 
The accompanying notes are an integral part of these financial statements.
 
                 


7


Astec Industries, Inc. 401(k) Retirement Plan
     
       
 Statement of Changes in Net Assets Available for Benefits      
For the Year Ended December 31, 2018
     
       
Additions to net assets attributed to:
     
Interest income on notes receivable from participants
 
$
450,857
 
         
Contributions:
       
  Participants
   
14,755,043
 
  Company
   
6,987,047
 
  Rollover
   
1,475,230
 
    Total contributions
   
23,217,320
 
Total additions
   
23,668,177
 
         
Deductions from net assets attributed to:
       
Investment income
   
(12,448,150
)
Net depreciation in fair value of investments
   
30,669,247
 
  Total investment loss
   
18,221,097
 
Benefits paid to participants
   
32,368,690
 
Administrative expenses
   
640,715
 
Total deductions
   
51,230,502
 
         
Net decrease
   
(27,562,325
)
         
Net assets available for benefits:
       
Beginning of year
   
280,021,436
 
End of year
 
$
252,459,111
 
         
The accompanying notes are an integral part of this financial statement.
       
         

8


Notes to Financial Statements

1. Description of Plan
The following description of the Astec Industries, Inc. 401(k) Retirement Plan (the “Plan”) provides only general information. Participants should refer to the plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering all eligible full-time employees of Astec Industries, Inc. and its U.S. domiciled subsidiaries (the “Company”) who have reached age eighteen. Eligible Participants are automatically enrolled in the Plan with a 4% salary deferral unless they elect otherwise.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is administered by a committee appointed by the Company. Great-West Financial Retirement Plan Services is the recordkeeper for the Plan.  Great-West Trust Company, LLC is the trustee of the Plan.
Contributions
Participants may elect to contribute up to 40% of their base salary through payroll deductions, as defined under the provisions of the plan document, subject to Internal Revenue Code (“Code”) limitations. The Company matches 75% of each participant’s contribution up to 4% of the participant’s compensation. Participants who will attain age 50 before the close of the Plan year are eligible to make additional catch-up contributions, subject to Code limitations. Catch-up contributions are not eligible for the Company’s matching contribution.
Participants direct their elective contributions into various investment options offered by the Plan and can change their investment options on a daily basis. If a participant is automatically enrolled, their contributions are invested in the applicable lifecycle fund based on the participant’s age until the participant changes their election. The Company’s contributions are allocated in the same manner as that of the participant’s elective contributions.
9

Participant Accounts
Each participant’s account is credited with the participant’s contributions, the Company’s matching contributions, and Plan investment earnings. Additionally, a participant’s account is charged with quarterly recordkeeping fees, administrative fees for certain participant elected services and Plan investment losses.  Allocations of investment earnings (losses) are based on participant account balances, as defined.  The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.
Vesting
Participants are immediately vested in their entire account balance.
Participant Loans
Participants may borrow from their accounts a minimum of $1,000 up to a maximum of $50,000, reduced by certain items identified in the plan document, or 50% of their vested account balance, whichever is lower. Loan terms range from one to five years or up to twenty years for the purchase of a primary residence. The loans are secured by the balances in the respective participants’ accounts and bear interest at a rate of prime plus two percent. Principal and interest are paid ratably through payroll deductions.
Payment of Benefits
Subsequent to termination of service, a participant may receive a lump-sum amount equal to the value of his or her account on the date of distribution.  Annual required minimum distributions are paid as prescribed by the Code on certain participant accounts.
In-service withdrawals are available in certain limited circumstances, as defined by the plan document. Hardship withdrawals are allowed for participants incurring an immediate and heavy financial need, as defined by the plan document. Hardship withdrawals are strictly regulated by the Internal Revenue Service (“IRS”).
Administrative Expenses
Certain expenses of maintaining the Plan, such as audit, legal services and discrimination testing, are paid directly by the Company and are excluded from these financial statements.  Recordkeeping fees (Note 7) and fees for investment advisory services requested by individual participants are charged directly to those participants’ accounts and are included in administrative expenses.
10

Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERlSA. If the Plan is terminated or contributions are permanently discontinued, benefits will remain 100% vested and be distributed in accordance with the provisions of the Plan.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Plan are presented on the accrual basis of accounting in accordance with United States generally accepted accounting principles.
Notes Receivable from Participants
Notes receivable from participants represent participant loans that are recorded at their unpaid principal balances plus any accrued but unpaid interest. Interest income on notes receivable from participants is recorded when it is earned. Related loan processing fees are deducted from loan proceeds at the inception of the loan. No allowance for credit losses has been recorded as of December 31, 2018 or 2017. If a participant ceases to make loan repayments and the plan administrator determines the participant loan to be a deemed distribution, the record keeper provides the participant with the IRS required 1099R.
Excess Participant Contributions Payable
Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding reduction to contributions. The Plan distributes the excess contributions to the applicable participants prior to March 15 of the following year.
Uses of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles requires plan management to make estimates that affect the amounts reported in the financial statements and accompanying notes and supplemental schedule. Actual results could differ from those estimates.
Events Occurring After Reporting Date
Plan management has evaluated events and transactions that occurred between December 31, 2018 and the issuance of the report for possible recognition or disclosure in the financial statements.
11

Investments
The Plan’s investments are stated at fair value as described in Note 3.
Purchases and sales of securities are recorded on a trade date basis. Dividends are recorded on the ex-dividend date. Interest is recognized when earned. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.
3. Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 – Unadjusted quoted prices in active markets that are accessible to the reporting entity at the measurement date for identical assets and liabilities.
Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:
quoted prices for similar assets and liabilities in active markets
quoted prices for identical or similar assets or liabilities in markets that are not active
observable inputs other than quoted prices that are used in the valuation of the asset or liabilities (e.g., interest rate and yield curve quotes at commonly quoted intervals)
inputs that are derived principally from or corroborated by observable market data by correlation or other means
Level 3 – Unobservable inputs for the asset or liability (i.e., supported by little or no market activity). Level 3 inputs include management’s own assumption about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
The level in the fair value hierarchy within which the fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
12

Following is a description of the valuation methodologies used for assets within the fair value hierarchy: There have been no changes in the methodologies used as of December 31, 2018 and 2017.
Mutual funds: Valued at the net asset value (“NAV”) of shares held by the Plan at year-end which is based on the closing price reported in the active market.
Common stock : Valued at the closing price reported on the active market on which the individual securities are traded.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan’s management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table sets forth by level within the fair value hierarchy (all the Plan’s assets are identified as being in Level 1), the Plan’s assets at fair value as of December 31, 2018:
   
Level 1
   
Total
 
             
Mutual funds
 
$
206,867,935
   
$
206,867,935
 
Company common stock
   
3,367,497
     
3,367,497
 
Total investments in hierarchy
 
$
210,235,432
     
210,235,432
 
Stable value fund (a)
           
33,417,812
 
Total Investments, at fair value
         
$
243,653,244
 

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2017:
   
Level 1
   
Total
 
             
Mutual funds
 
$
230,205,365
   
$
230,205,365
 
Company common stock
   
7,100,983
     
7,100,983
 
Total investments in hierarchy
 
$
237,306,348
     
237,306,348
 
Stable value fund (a)
           
34,001,465
 
Total Investments, at fair value
         
$
271,307,813
 

(a)   Valued at the NAV as a practical expedient to estimate fair value.  This practical expedient would not be used if it is determined to be probable that the fund will sell the investment for an amount different from the reported NAV.  Participant transactions (purchases and sales) may occur daily.  If the Plan initiates a full redemption of the fund, the issuer reserves the right to temporarily delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner.
13


The following table describes the investment measured at fair value based on NAV per share as of December 31, 2018 and 2017, respectively.  There are no participant redemption restrictions for this investment; the redemption notice period is applicable only to Plan level transactions.
Description
 
Fair Value
12/31/2018
   
Fair Value
12/31/2017
   
Unfunded
Commitments
 
Redemption
Frequency
(if currently eligible)
 
Redemption
Notice
Period
Stable value fund
 
$
33,417,812
   
$
34,001,465
     
N/A
 
Daily
 
30 Days

5. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market volatility and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.
6. Income Tax Status
The Company adopted a prototype plan, which received a favorable opinion letter from the IRS on   March 31, 2014 which stated that the prototype plan was designed in accordance with the applicable sections of the Code.  The Plan itself has not received a determination letter from the IRS stating that the Plan is qualified under Section 401(a) of the Code.  However, the plan administrator believes that the adopted prototype plan is designed and is currently being operated in compliance with the applicable requirements of the Code and is therefore, qualified and exempt from taxation.
Accounting principles generally accepted in the United States require Plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects for a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2018, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
7. Parties-In-Interest and Related Party Transactions

Transactions with parties-in-interest include investments in the Company’s common stock and participant loans.  These transactions are exempt from the prohibited transactions rules under ERISA.
14


Transactions in Company stock qualify as related party transactions.  The Plan held Company stock valued at $3,367,497 and $7,100,983 at December 31, 2018 and 2017, respectively.  During the plan year ended December 31, 2018, the Plan had purchases of Company stock in the amount of $623,026 and sales in the amount of $1,118,894.
Great-West Financial Retirement Plan Services (“Great-West”) provides certain administrative services to the Plan pursuant to a Master Services Agreement (“Agreement”).  Great-West receives revenue for recordkeeping fees charged to participants’ accounts as specified in the Agreement.  This revenue is used to offset certain amounts owed to Great-West for its administrative services to the Plan, and therefore, qualify as party-in-interest transactions.
8. Reconciliation between Financial Statements and Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:
   
December 31
 
   
2018
   
2017
 
             
Net assets available for benefits per financial
           
statements
 
$
252,459,111
   
$
280,021,436
 
Deemed loans not reported on Form 5500
   
(464,798
)
   
(359,400
)
Net assets available for benefits per Form 5500
 
$
251,994,313
   
$
279,662,036
 

The following is a reconciliation of the net increase in net assets available for benefits per the financial statements to net income per Form 5500:
   
Year Ended
December 31, 2018
 
       
Net decrease in net assets available for benefits per financial statement
 
$
(27,562,325
)
Less: deemed loans not reported on Form 5500 at December 31, 2018
   
(464,798
)
Plus: deemed loans not reported on Form 5500 at December 31, 2017
   
359,400
 
Net decrease in net assets available for benefit per Form 5500
 
$
(27,667,723
)

9. Subsequent Event
The Plan was amended as of January 1, 2019 to conform to the Bipartisan Budget Act of 2018.
15

Astec Industries, Inc. 401(k) Retirement Plan
EIN:  62-0873631       Plan Number: 001

Schedule H, Line 4i – Schedule of Assets
(Held at End of Year)
December 31, 2018

(a)
 
(b)
Identity of Issue,
Borrower, Lessor, or
Similar Party
 
(c)
Description of Investment
Including Maturity Date,
Rate of Interest, Collateral,
Par, or Maturity Value
 
(e)
Current
Value
   
iShares Russell 2000
 
Small Capital Index Institutional
 $
   3,609,800
   
Columbia
 
Strategic Income
 
497,175
   
Fidelity
 
Mid Cap Index
 
6,667,102
   
J.P. Morgan
 
Smart Retirement 2020 Fund
 
15,193,271
   
J.P. Morgan
 
Smart Retirement 2025 Fund
 
8,209,080
   
J.P. Morgan
 
Smart Retirement 2030 Fund
 
19,445,496
   
J.P. Morgan
 
Smart Retirement 2035 Fund
 
6,365,484
   
J.P. Morgan
 
Smart Retirement 2040 Fund
 
12,487,925
   
J.P. Morgan
 
Smart Retirement 2045 Fund
 
3,636,821
   
J.P. Morgan
 
Smart Retirement 2050 Fund
 
4,382,519
   
J.P. Morgan
 
Smart Retirement 2055 Fund
 
3,551,633
   
J.P. Morgan
 
Smart Retirement 2060 Fund
 
935,544
   
J.P. Morgan
 
Smart Retirement Income Fund
 
7,995,009
   
J.P. Morgan
 
Intrepid Growth Fund
 
29,650,913
   
J.P. Morgan
 
Equity Index Fund
 
34,757,977
   
J.P. Morgan
 
Equity Income Fund
 
11,862,717
   
Lord Abbett
 
High Yield Bond Fund
 
1,211,682
   
Mass Mutual
 
Select Mid Cap Growth Fund
 
6,312,569
   
Pioneer
 
Pioneer Bond-K
 
1,433,363
   
Principal
 
MidCap Value Fund III Institutional Class
 
139,331
   
Prudential
 
Stable Value Fund
 
33,417,812
   
Prudential
 
Jennison Small Company Z
 
379,274
   
Putnam
 
International Equity Fund
 
5,794,577
   
Putnam
 
Small Capital Value
 
4,056,213
   
PIMCO
 
Total Return Institutional Bond Fund
 
1,447,363
   
Schwab
 
Brokerage accounts
 
841,171
   
TIAA-CREF
 
International Equity Index Fund
 
16,003,926
*
 
Astec Industries, Inc.
 
Common stock
 
3,367,497
*
 
Participant loans
 
Interest rates ranging from 4.25%-10.50%, maturity varies through 2038
 
8,689,994
   
Total assets held for investments
     $
252,343,238


*
Represents a party-in-interest to the Plan.
 Note: Cost information has not been included in column (d) because all investments are participant-directed.


16

Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this Annual Report to be signed by the undersigned, hereunto duly authorized.
 
 
ASTEC INDUSTRIES, INC.
401(k) RETIREMENT PLAN
 
 
By: /s/ David C. Silvious
Astec Industries, Inc.
401(k) Retirement Plan Committee
 
Date: June 13, 2019
 
 
 
 
Exhibit Index
 
 
Exhibit No.
 
Description
 
23.1
 
Consent of Independent Registered Public Accounting Firm
 
 

17
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