f11k-123108.htm
UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 

 
FORM 11-K
 
 
(Mark One)
 
 
(x)
Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
 
For the fiscal year ended December 31, 2008.
 
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, Tennessee 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, Tennessee 37421
 
(423) 899-5898

 
 
 


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 and Supplemental Schedule
    Astec Industries, Inc. 401(k) Retirement Plan
    As of December 31, 2008 and 2007 and for the Year Ended December 31, 2008 with
                       Reports of Independent Registered Public Accounting Firm
    
    Report of Independent Registered Public Accounting Firm
 
    Audited Financial Statements:
        Statements of Net Assets Available for Benefits
        Statement of Changes in Net Assets Available for Benefits
        Notes to Financial Statements
 
    Supplemental Schedule:
        Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
 
    Edgar filing only:
        Exhibit 23.1 - Consent of Independent Registered Public Accounting Firm
 




 



Financial Statements and Supplemental Schedule
 
Astec Industries, Inc 401(k) Retirement Plan
 
As of December 31, 2008 and 2007, and for the Year Ended December 31, 2008
With Report of Independent Registered Public Accounting Firm


 
 
 
 

Astec Industries, Inc. 401(k) Retirement Plan

Audited Financial Statements and Supplemental Schedule

As of December 31, 2008 and 2007, and for the Year Ended December 31, 2008




Contents

 
Report of Independent Registered Public Accounting Firm
 1

 
Audited Financial Statements
 
 
Statements of Net Assets Available for Benefits
 2
 
Statement of Changes in Net Assets Available for Benefits
  3
 
Notes to Financial Statements
 4

 
Supplemental Schedule
 
 
Schedule H, Line 4(i)-Schedule of Assets (Held at End of Year)
 14


 
 
 
 
 



Report of Independent Registered Public Accounting Firm

The Plan Committee
Astec Industries, Inc. 401(k) Retirement Plan

We have audited the accompanying statements of net assets available for benefits of the Astec Industries, Inc. 401(k) Retirement Plan as of December 31, 2008 and 2007, and the related statement of changes in net assets available for benefits for the year ended December 31, 2008. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2008 and 2007, and the changes in its net assets available for benefits for the year ended December 31, 2008, in conformity with US generally accepted accounting principles.
 
Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2008, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
 

/s/ Ernst & Young, LLP
Chattanooga, Tennessee
June 23, 2009

 

 
1
 

 
   
Statements of Net Assets Available for Benefits
  
             
             
   
December 31
  
   
2008
    
2007
  
Assets
            
Investments, at fair value
   $ 102,379,094     $ 135,539,978  
Contribution receivables:
                
Participants
     10,638       12,964  
Employer
     98,436       96,913  
Total receivables
     109,074       109,877  
Total assets
     102,488,168       135,649,855  
                 
Liabilities
                
Excess participant contributions payable
     36,009       78,716  
Net assets available for benefits at fair value
     102,452,159       135,571,139  
Adjustment from fair value to contract value for
                
investment in collective trust fund
     2,159,206       203,951  
Net assets available for benefits
   $ 104,611,365     $ 135,775,090  
                 
See accompanying notes.
                

 

 
2
 

 
   
Statement of Changes in Net Assets Available for Benefits
  
   
Year Ended December 31, 2008
  
       
       
Additions to net assets attributed to:
      
Investment income
   $ 2,827,561  
         
        Contributions:
        
    Participants
     10,835,643  
    Employer
     4,862,904  
    Rollover
     1,282,674  
      16,981,221  
Total additions
     19,808,782  
         
Deductions from net assets attributed to:
        
Net depreciation in fair value of investments
     41,997,762  
Benefits paid to participants
     8,937,347  
Administrative expenses
     37,398  
Total deductions
     50,972,507  
         
Net decrease
     (31,163,725 )
         
Net assets available:
        
Beginning of year
     135,775,090  
End of year
   $ 104,611,365  
         
See accompanying notes.
        
 

 
 
3
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements

December 31, 2008



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 full-time employees of Astec Industries, Inc. and its subsidiaries (the Company) who have reached age eighteen. It 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.
 
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 (the 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 match contribution.
 
Participant Accounts
 
Each participant’s account is credited with the participant’s contributions, the Company’s matching contributions and Plan investment results. Allocations of Plan earnings are based on participant account balances, as defined. Participants may change their investment options daily. 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.
 

 
 
 
4
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements (continued)





1. Description of Plan (continued)
 
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 balance in the participant’s account and bear interest at a rate of prime plus one percent. Principal and interest are paid ratably through payroll deductions.
 
Payment of Benefits
 
Upon 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.
 
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 ERISA. 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 U.S. generally accepted accounting principles.
 

 
 
 
5
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements (continued)





2. Summary of Significant Accounting Policies (continued)
 
Investments
 
The Plan’s investments are stated at fair value. The shares of registered investment companies are valued at quoted prices in an active market, which represent the net asset values of shares held by the Plan at year-end. Shares of common stock are valued at quoted prices in an active market as of the last business day of the Plan year. The loans to participants are valued at their outstanding balances, which approximate fair value.
 
As described in Financial Accounting Standards Board Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Plan invests in an investment contract through its J.P. Morgan Stable Value Investment Fund (the Stable Value Fund). As required by the FSP, the Statements of Net Assets Available for Benefits present the fair value of the Stable Value Fund and the adjustment from fair value to contract value. The fair value of the Plan’s interest in the Stable Value Fund is based on information reported by the issuer of the common collective trust at year-end. The contract value of the Stable Value Fund represents contributions plus earnings, less participant withdrawals and administrative expenses.
 
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. 
 
New Accounting Pronouncement
 
In September 2006, the Financial Accounting Standards Board issued Statement on Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurement. This standard clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. The Plan adopted FAS 157 effective January 1, 2008.
 
6
2. Summary of Significant Accounting Policies (continued)
 
Use of Estimates
 
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires Plan management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
 
Administrative Expenses
 
The Plan sponsor pays administrative fees other than those for recordkeeping and trustee functions. The administrative fees paid by the Plan sponsor in 2008 and 2007 included those for the annual audit, legal and discrimination testing. Loan administrative fees are charged to the borrowing participant’s account.
 
3. Fair Value Measurements
 
FAS 157 establishes a framework for measuring fair value. That framework provides a fair value hierarchy that 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 or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are described below:
 
Level l – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan
        has the ability to access.
 
Level 2 – Inputs to the valuation methodology include:
·  
Quoted prices for similar assets or liabilities in active markets;
·  
Quoted prices for identical or similar assets or liabilities in inactive markets;
·  
Inputs other than quoted prices that are observable for the asset or liability;
·  
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
 

 
 
 
7
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements (continued)





3. Fair Value Measurements (continued)
 
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term
of the asset or liability.
 
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
 
The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
 
The following is a description of the valuation methodologies used for assets measured at fair value.
 
Common stock:  Valued at the closing price reported on the active market on which the individual securities are traded.
 
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. 
 
Collective Trust Fund:  Valued at the underlying investments of the fund minus its liabilities and then divided by the number of shares outstanding.
 
Participant Loans:  Valued at amortized cost, which approximates fair value.
 
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 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.
 

 
 
 
8
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements (continued)





3. Fair Value Measurements (continued)
 
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2008:
 
   
Level l
    
Level 2
    
Level 3
    
Total
  
                         
Mutual funds
   $ 71,675,454     $ –     $ –     $ 71,675,454  
Common stock
     6,690,957       –       –       6,690,957  
Common collective trust
     –       18,905,265       –       18,905,265  
Participation loans
     –       –       5,107,418       5,107,418  
Total
   $ 78,366,411     $ 18,905,265     $ 5,107,418     $ 102,379,094  

Level 3 Gains and Losses
 
The table below sets forth a summary of changes in the fair value of the Plan’s level 3 assets for the year ended December 31, 2008.
 
   
Participants
  
   
Loans
  
       
Balance, beginning of year
   $ 4,799,676  
Purchases, sales, issuance and settlements (net)
     307,742  
Balance, end of year
   $ 5,107,418  


 
 
 
9
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements (continued)





4. Investments
 
During 2008, the Plan’s investments appreciated (depreciated) in fair value as follows:
 
   
Net Appreciation
(Depreciation)
in Fair Value
of Investments
  
       
 Fair values determined by quoted market prices:        
    Common stock
   $ (1,223,701 )
    Shares of registered investment companies
     (41,570,578 )
 Fair value as determined by quoted redemption value:        
    Collective trust fund
     796,517  
    $ (41,997,762 )

Investments that represent 5% or more of the fair value of the Plan’s net assets are as follows:
 
   
December 31
  
   
2008
    
2007
  
             
J.P. Morgan Stable Asset Investment Fund*
   $ 18,905,265     $ 14,270,837  
J.P. Morgan Intrepid Growth Fund
     7,590,897       12,210,445  
J.P. Morgan Smart Retirement 2020
     6,624,226       8,465,742  
J. P. Morgan Smart Retirement 2015**
     4,645,382       7,500,374  
American Century Growth Fund
     6,927,088       11,405,362  
American Century Value Fund
     –       13,229,422  
American Century Vista**
     3,748,174       7,328,967  
Eaton Vance Large Capital Growth Fund
     8,558,128       –  
UBS US Large Capital Growth Fund
     11,028,049       19,881,055  
The Boston Company International Core Equity Fund
     –       7,717,449  
Astec Industries, Inc. Common Stock
     6,690,957       8,083,935  
                 
*The J.P. Morgan Stable Asset Investment Fund is shown at fair value, the contract value at December 31, 2008 and 2007, is $21,064,471 and $14,474,788, respectively.
**Investment is less than 5% of net assets at December 31, 2008.
  

10
5. Risks and Uncertainties
 
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market 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 Plan has received a determination letter from the Internal Revenue Service (IRS), dated June 10, 2008, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualified status. The Company believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.
 
7. Party-in-Interest Transactions
 
Transactions with parties in interest include investments in the Company’s common stock, participant loans, investments in JP Morgan Funds and investments through JP Morgan Chase Bank & Trust, the trustee.
 
8. Excess Participants Contributions Payable
 
During 2008 and 2007, the Company determined that excess participant’s contributions had been made based on nondiscrimination testing performed for the Plan. Accordingly, the Plan refunded the excess participants contributions, plus or minus earnings or losses thereon, of $36,009 and $78,716 in 2008 and 2007, respectively, subsequent to year end to comply with the applicable requirements of the Code. These amounts are recorded as excess participant’s contributions payable in the accompanying Statements of Net Assets Available for Benefits.
 

 
 
 
11
 
Astec Industries, Inc. 401(k) Retirement Plan

Notes to Financial Statements (continued)





9. Reconciliation Between Financial Statements and Form 5500
 
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:
 
   
December 31
  
   
2008
    
2007
  
             
Net assets available for benefits per the financial statements
   $ 104,611,365     $ 135,775,090  
Deemed loans not reported on Form 5500
     (68,235 )     (58,036 )
Adjustment to report collective trust fund at fair value
     (2,159,206 )     (203,951 )
Net assets available for benefits per the Form 5500
   $ 102,383,924     $ 135,513,103  

The following is a reconciliation of the net increase in net assets available for benefits per the financial statements to net income per the Form 5500:
 
   
Year Ended
December 31, 2008
  
Net decrease in net assets available for benefits per the financial statements
   $ (31,163,725 )
Less: deemed loans not reported on Form 5500 at December 31, 2008
     (68,235 )
Plus: deemed loans not reported on Form 5500 at December 31, 2007
     58,036  
Less: adjustment to report collective trust fund at fair value at December 31, 2008
     (2,159,206 )
Plus: adjustment to report collective trust fund at fair value at December 31, 2007
     203,951  
Net income per the Form 5500
   $ (33,129,179 )


 

 
 
 
12
 











Supplemental Schedule

 
 
13
 


 
EIN: 62-0873631 Plan Number: 001
  
   
Schedule H, Line 4i – Schedule of Assets
  
(Held at End of Year)
  
   
December 31, 2008
  
               
(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
  
               
   
American Century
  
Growth Fund
   $ 6,927,088  
   
American Century
  
Vista Fund
     3,748,174  
   
American Century
  
Small Capital Value Fund
     3,629,628  
  *  
J.P. Morgan
  
Stable Asset Investment Fund
     18,905,265  
  *  
J.P. Morgan
  
Smart Retirement 2010 Fund
     4,149,803  
  *  
J.P. Morgan
  
Smart Retirement 2015 Fund
     4,645,382  
  *  
J.P. Morgan
  
Smart Retirement 2020 Fund
     6,624,226  
  *  
J.P. Morgan
  
Smart Retirement 2025 Fund
     114,985  
  *  
J.P. Morgan
  
Smart Retirement 2030 Fund
     4,444,762  
  *  
J.P. Morgan
  
Smart Retirement 2035 Fund
     156,864  
  *  
J.P. Morgan
  
Smart Retirement 2040 Fund
     2,207,995  
  *  
J.P. Morgan
  
Smart Retirement 2045 Fund
     84,727  
  *  
J.P. Morgan
  
Smart Retirement 2050 Fund
     85,006  
  *  
J.P. Morgan
  
Smart Retirement Income Fund
     1,631,574  
  *  
J.P. Morgan
  
Intrepid Growth Fund
     7,590,897  
     
UBS
  
US Large Capital Growth Fund
     11,028,049  
     
Harbor Funds
  
International Administrative Fund
     5,227,860  
     
Eaton Vance
  
Value Capital Large Company Fund
     8,558,128  
     
Schwab
  
Brokerage accounts
     820,306  
  *  
Astec Industries, Inc.
  
Common stock
     6,690,957  
  *  
Participant notes receivable
  
Interest Ranges from 5.0-10.0% , maturity varies through 2028
     5,107,418   
     
Total assets held for investments
       $ 102,379,094  
                   
  *  
Represents a party-in-interest to the Plan.
            
     
Note: Cost information has not been included because all investments are participant-directed.
  

 
14
 



 
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 on its behalf by the undersigned, hereunto duly authorized, in the City of Chattanooga, State of Tennessee, on June 23, 2009
 
 

 
 
ASTEC INDUSTRIES, INC.
401(k) RETIREMENT PLAN
 
 
By/s/ F. McKamy Hall     
F. McKamy Hall, Member
Astec Industries, Inc.
401(k) Retirement Plan Committee
 
 
Date: June 26, 2009
 

 
15