Audited Financial Statements and Schedules
Astec Industries, Inc.
401(k) Retirement Plan
Years ended December 31, 1996 and 1995
with Report of Independent Auditors
<PAGE>
Astec Industries, Inc. 401(k) Retirement Plan
Audited Financial Statements and Schedules
December 31, 1996 and 1995
Contents
Report of Independent Auditors
Audited Financial Statements
Statements of Net Assets Available for Benefits, with Fund Information
Statement of Changes in Net Assets Available for Benefits, with
Fund Information
Notes to Financial Statements
Schedules
Schedule of Reportable Transactions
Schedule of Assets Held for Investment Purposes
<PAGE>
Report of Independent Auditors
Plan Committee
Astec Industries, Inc. 401(k) Retirement Plan
We have audited the accompanying statements of net assets available for
benefits of Astec Industries, Inc. 401(k) Retirement Plan (the Plan) as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for benefits for the year ended December 31, 1996. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as 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, 1996 and 1995, and the changes in its net assets available for
benefits for the year ended December 31, 1996, in conformity with 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 schedules
of assets held for investment purposes as of December 31, 1996, and of
reportable transactions for the year then ended, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the financial statements. The fund information
in the statements of net assets available for benefits and statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for
benefits and changes in net assets available for benefits of each fund and is
not a required part of the financial statements. The supplemental schedules
and fund information have been subjected to the auditing procedures applied in
our audit of the financial statements and, in our opinion, are fairly
stated in all material respects in relation to the financial statements taken
as a whole.
Chattanooga, Tennessee
July 10, 1997
<PAGE>
Astec Industries, Inc. 401(k) Retirement Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1996 Fund Information
<TABLE>
Value
Growth Astec
Stable Tactical and Growth Aggressive Common
Value Allocation Income Equity Growth Stock Loan
Fund Fund Fund Fund Fund Fund Fund Total
Assets
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Investments (Note 3) $8,686,666 $2,492,516 $4,960,710 $4,101,090 $6,027,301 $ 501,985 $26,770,268
Accrued investment income 139 139
Cash and cash equivalents 37,137 37,137
Participant notes receivable 1,476,551 1,476,551
Net Assets $8,686,666 $2,492,516 $4,960,710 $4,101,090 $6,027,301 $ 539,261 $1,476,551 $28,284,095
December 31, 1995 Fund Information
Value
Growth Astec
Stable Tactical and Growth Aggressive Common
Value Allocation Income Equity Growth Stock Loan
Fund Fund Fund Fund Fund Fund Fund Total
Assets
Investments (Note 3) $7,574,510 $2,165,317 $3,438,090 $3,307,602 $4,831,124 $ 379,852 $ $21,696,495
Accrued investment income 248 248
Cash and cash equivalents 7,844 201 958 357 1,225 67,658 78,243
Participant notes receivable 1,198,912 1,198,912
Net Assets $7,582,354 $2,165,518 $3,439,048 $3,307,959 $4,832,349 $ 447,758 $1,198,912 $22,973,898
<FN>
See accompanying notes.
</TABLE>
<PAGE>
Astec Industries, Inc. 401(k) Retirement Plan
Statements of Changes in Net Assets Available for Benefits, with Fund
Information Year Ended December 31, 1996 Fund Information
<TABLE>
Value
Growth Astec
Stable Tactical and Growth Aggressive Common
Value Allocation Income Equity Growth Stock Loan
Fund Fund Fund Fund Fund Fund Fund Total
Additions to net assets
attributed to:
Investments: Net appreciation
(depreciation) in fair
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
value of investments $449,237 $149,932 $891,682 $473,635 $711,070 $(21,659) $ $2,653,897
Investment income 5 41,096 62,211 33,398 2,805 120,340 259,855
449,242 191,028 953,893 507,033 711,070 (18,854) 120,340 2,913,752
Contributions:
Participants 834,587 265,298 441,485 460,561 693,302 108,303 2,803,536
Employer 241,903 73,554 117,637 128,892 173,827 29,827 765,640
1,076,490 338,852 559,122 589,453 867,129 138,130 3,569,176
Total additions 1,525,732 529,880 1,513,015 1,096,486 1,578,199 119,276 120,340 6,482,928
Deductions from net assets
attributed to:
Benefits paid to
participants 503,905 91,638 145,736 153,786 217,135 17,465 43,066 1,172,731
Total deductions 503,905 91,638 145,736 153,786 217,135 17,465 43,066 1,172,731
Net increase prior to
interfund transfers 1,021,827 438,242 1,367,279 942,700 1,361,064 101,811 77,274 5,310,197
Interfund transfers 82,485 (111,244) 154,383 (149,569) (166,112) (10,308) 200,365
Net increase 1,104,312 326,998 1,521,662 793,131 1,194,952 91,503 277,639 5,310,197
Net assets available for
benefits:
Beginning of year 7,582,354 2,165,518 3,439,048 3,307,959 4,832,349 447,758 1,198,912 22,973,898
End of year $8,686,666 $2,492,516 $4,960,710 $4,101,090 $6,027,301 $539,261 $1,476,551 $28,284,095
<FN>
See accompanying notes
</TABLE>
<PAGE>
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 agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering all employees of Astec
Industries, Inc. and its subsidiaries (the Company) who have completed one year
of continuous service and reached age twenty-one. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan is administered by a committee appointed by the Company.
Contributions
Participant contributions are withheld from each payroll in amounts equal to a
percentage of the participant's compensation as elected by the participant.
The maximum participant contribution for the plan year is the lesser of $9,500,
as indexed by the Internal Revenue Service, or 15% of the participant's base
salary. The Company matches 50% of the participant's contribution up to 4% of
the employee's earnings. The Plan is fully funded by the Company at the end of
each month.
Participant Accounts
Each participant's account is credited with the participant's contributions
and allocation of the Company's contributions and Plan earnings. Allocations
are based on participant earnings or 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 with respect to their contributions, the
Company's matching contributions, and the earnings thereon.
1. Description of Plan (Continued)
Investment Options
Participants may direct employer and employee contributions into any of six
investment funds.
Stable Value Fund - Funds are invested in shares of a registered investment
company that invests in guaranteed investment contracts (First Stable
Value Fund).
Tactical Allocation Fund - Funds are invested in shares of a registered
investment company that invests in debt and equity securities (Phoenix
Investments Total Return Fund).
Value Growth and Income Fund - Funds are invested in shares of a registered
investment company that invests in equity securities of well-known companies
across a wide range of industries (Massachusetts Investors Trust Fund).
Growth Equity Fund - Funds are invested in shares of a registered investment
company that invests in common stocks of companies with accelerating earnings
and revenues (Twentieth Century Growth Investors Fund).
Aggressive Growth Fund - Funds are invested in shares of a registered
investment company that invests in common stocks of small to medium sized
companies (Twentieth Century Ultra Investors Fund).
Astec Common Stock Fund - Funds are invested in common stock of the Company.
Participants may change their investment options quarterly.
Participant Notes Receivable
In accordance with IRS guidelines, qualified participants can borrow up to 50%
of their vested account balances at a specified interest rate for a maximum
term of five years unless used to purchase a primary residence (where the term
can be increased). Principal and interest are paid ratably through monthly
payroll deductions. Loan transactions are treated as a transfer from (to)
the investment fund to (from) the loan fund.
1. Description of Plan (Continued)
Payment of Benefits
On termination of service, a participant may receive a lump-sum amount equal to
the vested value of his or her account, or upon death, disability or retirement,
elect to receive a life annuity or monthly, quarterly, semi-annual or annual
installments over a period of time.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Plan are prepared in accordance with generally
accepted accounting principles.
Investments
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year end. Shares of common stock are
valued at quoted market prices. The participant notes receivable are valued at
cost which approximates fair value.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the Plan to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Investments
The Plan's investments are summarized in the table below and in the
accompanying schedule. Investments that represent 5% or more of the Plan's net
assets are separately identified.
December 31
1996 1995
Investments at fair value as determined
by quoted market price:
Shares of registered investment companies:
First Stable Value Fund,
480,059 and 442,954 shares $8,686,666 $7,574,510
Phoenix Investments Total Return Fund,
160,601 and 135,502 shares 2,492,516 2,165,317
Massachusetts Investors Trust Fund,
343,064 and 270,503 shares 4,960,710 3,438,090
Twentieth Century Growth Investors Fund,
187,435 and 170,583 shares 4,101,090 3,307,602
Twentieth Century Ultra Investors Fund,
214,571 and 185,030 shares 6,027,301 4,831,124
Shares of common stock:
Astec Industries, Inc., 52,843 and 38,466 shares 501,985 379,852
26,770,268 21,696,495
Investments at estimated fair value:
Participant notes receivable 1,476,551 1,198,912
Total investments at fair value $28,246,819 $22,895,407
4. Administrative Expenses
Administrative expenses of the Plan for 1996 were paid by the Company.
5. 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 ERISA requirements. If the Plan is terminated or
contributions permanently discontinued, benefits will be distributed in
accordance with the provisions of the Plan.
6. Income Tax Status
The Internal Revenue Service ruled on November 2, 1994 that the Plan is
qualified under Section 401(a) of the Internal Revenue Code and the related
trust is, therefore, not subject to tax under existing income tax laws. The
plan committee believes that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Internal Revenue Code.
Therefore, they believe that the Plan was qualified and the
related trust was tax-exempt as of the financial statement date.
<PAGE>
Astec Industries, Inc. 401(k) Retirement Plan
Schedule of Reportable Transactions
Year ended December 31, 1996
<TABLE> Current Value
of Asset on
Party Type of Purchase Selling Cost of Transaction Net
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Involved Description of Assets Transaction Price Price Asset Date Gain (Loss)
Category (iii) - series of securities transactions
First Trust
National Several
Association First Stable Value Fund Purchases $2,436,661 $ - $2,436,661 $2,436,661 $ -
Several Sales - 1,773,521 1,597,072 1,773,521 176,449
Massachusetts
Financial
Services
Company Massachusetts Investors Several
Trust Fund Purchases 1,791,232 - 1,791,232 1,791,232 -
Several Sales - 748,108 422,010 748,108 326,098
Twentieth
Century
Investors,
Inc. Twentieth Century Ultra
Investors Fund Several
Purchases 2,117,789 - 2,117,789 2,117,789 -
Several Sales - 1,632,682 1,102,763 1,632,682 529,919
<FN>
There were no category (i), (ii) or (iv) reportable transactions during 1996.
</TABLE>
<PAGE>
Astec Industries, Inc. 401(k) Retirement Plan
Schedule of Assets Held for Investment Purposes
December 31, 1996
Current
Description of Investment Cost Value
Mutual funds:
First GIC Investment Fund, 480,059 shares $ 7,761,255 $ 8,686,666
Twentieth Century Ultra Investors Fund,
214,571 shares 5,296,302 6,027,301
Massachusetts Investors Trust Fund,
343,064 shares 4,461,178 4,960,710
Twentieth Century Growth Investors Fund,
187,435 shares 3,858,222 4,101,090
Phoenix Investments Total Return Fund,
160,601 shares 2,554,966 2,492,516
23,931,923 26,268,283
Common stocks:
Astec Industries, Inc. Common Stock,
52,843 shares 671,304 501,985
Participant notes receivable 1,476,551 1,476,551
$26,079,778 $28,246,819
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-61461) pertaining to the Astec Industries, Inc. 401(k)
Retirement Plan (the "Plan") of our report dated July 10, 1997, with
respect to the financial statements and schedules of the Astec Industries,
Inc. 401(k) Retirement Plan included in this Annual Report (Form 11-K) for
the year ended December 31, 1996.
/s/ ERNST & YOUNG LLP
Chattanooga, Tennessee
July 15, 1997
<PAGE>
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, thereunto duly authorized, in the City of
Chattanooga, State of Tennessee, on July 15, 1997.
ASTEC INDUSTRIES, INC.
401(k) RETIREMENT PLAN
By: /S/ J. Don Brock
J. Don Brock, Chairman
Astec Industries, Inc.
401(k) Retirement Plan Committee
