- Record Quarterly Revenues and Adjusted EBITDA, Driven by Solid
Organic Growth and Contribution from Acquisitions
- Adjusted EBITDA Growth of 31% and 230 Basis Points of Margin
Expansion
- Raised Low End of Full Year 2024 Adjusted EBITDA Guidance
Reflecting Strong Second Quarter Results
- Healthy Balance Sheet with Net Debt to Adjusted EBITDA of 1.5x
Provides Support for Acquisition Financing
- In a Separate Release, Announced Several Strategic Portfolio
Actions Including Agreement to Acquire the Construction Materials
Business of Stavola Holding Corporation for $1.2 Billion
Arcosa, Inc. (NYSE: ACA) (“Arcosa,” the “Company,” “We,” or
“Our”), a provider of infrastructure-related products and
solutions, today announced results for the second quarter ended
June 30, 2024.
Second Quarter 2024 Highlights
Three Months Ended June
30,
2024
2023
% Change
($ in millions, except per
share amounts)
Revenues
$
664.7
$
584.8
14
%
Net income
$
45.6
$
40.9
11
%
Adjusted Net Income(1)
$
44.7
$
37.3
20
%
Diluted EPS
$
0.93
$
0.84
11
%
Adjusted Diluted EPS(1)
$
0.91
$
0.76
20
%
Adjusted EBITDA(1)
$
112.7
$
85.8
31
%
Adjusted EBITDA Margin(1)
17.0
%
14.7
%
230 bps
Net cash provided by operating
activities
$
38.3
$
127.6
(70
)%
Free Cash Flow(1)
$
(6.1
)
$
75.6
(108
)%
bps - basis points
(1) Non-GAAP financial measure. See
reconciliation tables included in this release.
Antonio Carrillo, President and Chief Executive Officer, noted,
“Our second quarter was highlighted by several events, that on a
combined basis, demonstrate steady advancement of our long-term
strategic vision. Financial results for the second quarter reflect
records for quarterly revenues and Adjusted EBITDA, with
significant year-over-year margin expansion. During the quarter, we
performed well across our three segments, generating double-digit
Adjusted EBITDA growth on an organic basis that was augmented by
the accretive contribution from recent acquisitions. At the same
time, we executed on value enhancing portfolio actions to
accelerate our growth in attractive markets and reduce the overall
complexity and cyclicality of our portfolio.
“In Construction Products, Adjusted Segment EBITDA increased 22%
and margin expanded 360 basis points, led by significant organic
growth and the contribution from recent bolt-on acquisitions in
Florida, Texas and Arizona. We continued to benefit from strong
pricing momentum, which compensated for volume headwinds in
aggregates from elevated rainfall, particularly in Texas. Operating
improvements in our specialty materials and trench shoring
businesses also contributed to organic growth during the quarter.
Additionally, we took steps to optimize our operations and improve
margin by disposing of certain underperforming locations.
“Within Engineered Structures, we executed well and delivered a
48% increase in Adjusted Segment EBITDA driven by higher volumes in
wind towers and utility structures, improved operating
efficiencies, and the accretive impact of the Ameron Pole Products
acquisition that closed earlier in the quarter. We were pleased to
deliver our first completed wind towers from our new plant in New
Mexico, which continues to operate on-time and within budget.
“Second quarter Adjusted Segment EBITDA increased 7% in
Transportation Products and margin expanded 90 basis points
reflecting higher volumes and improved margin for barges. Order
inquiries for liquid barges continued to demonstrate momentum for a
third consecutive quarter. Our barge backlog of $252 million,
roughly flat with the start of the year, extends well into 2025
providing solid production visibility.”
Mr. Carrillo continued, “In a separate release today, we also
announced the $1.2 billion acquisition of Stavola, an
aggregates-led provider of construction materials operating in the
nation’s largest MSA. Concurrently, we also announced the
divestiture of our steel components business within our
Transportation Products segment. Together these transactions
closely align with our strategic vision and enhance our ability to
continue delivering sustainable growth and superior value for our
shareholders.”
2024 Outlook and Guidance
The Company made the following adjustments to its full year 2024
guidance:
- Tightened its consolidated revenues range to $2.60 billion to
$2.72 billion from $2.58 billion to $2.78 billion previously.
- Increased the low end of its consolidated Adjusted EBITDA range
to $420 million from $410 million, resulting in a full year range
of $420 million to $440 million.
Commenting on the outlook, Carrillo noted, “I am pleased with
our year-to-date performance, and the underlying trends in our
businesses remain strong. As a result, we are raising the low end
of our 2024 Adjusted EBITDA guidance. At the mid-point of our
Adjusted EBITDA range and without consideration for today’s
strategic announcements, we anticipate 24% year-over-year growth,
normalizing for the land sale gain in 2023. We plan to update our
guidance following the close of the Stavola acquisition announced
today.”
Second Quarter 2024 Results and Commentary
Construction Products
- Revenues increased 4% to $276.1 million primarily due to recent
acquisitions. Organic aggregates and specialty materials revenues
were roughly flat as higher pricing was mostly offset by lower
volumes, a decline in freight revenues, and a reduction in revenue
related to recently divested operations. Revenues for our trench
shoring business increased 8% primarily due to higher volumes.
- Organic volumes for our aggregates business, which includes
both natural and recycled, were impacted by unseasonably wet
weather conditions during the period, particularly in Texas.
Year-over-year pricing gains were strong and overall demand remains
healthy when weather conditions are favorable.
- Adjusted Segment EBITDA increased 22% to $68.8 million
primarily due to solid operating improvements in our specialty
materials and shoring businesses and the accretive impact of recent
acquisitions.
- Adjusted Segment EBITDA Margin increased 360 basis points to
25.2% from 21.6% in the prior year period and Freight-Adjusted
Segment EBITDA Margin was 28.0% compared to 24.4% in the prior year
period.
- During the current period, the Company recognized a gain on the
sale of a subscale, singe-location asphalt and paving operation and
impaired assets related to the closure of a small aggregates
operation in west Texas resulting in a net loss of $0.8 million,
which has been excluded from Adjusted Segment EBITDA.
Engineered Structures
- Revenues for utility, wind, and related structures increased
33% to $274.8 million due to higher volumes in our utility
structures and wind towers businesses and the contribution from the
recently acquired Ameron Pole Products ("Ameron") business.
- Adjusted Segment EBITDA increased 48% to $41.7 million, and
margin expanded 160 basis points to 15.2% due to strong organic
growth in our wind towers and utility structures businesses and the
accretive impact of the Ameron acquisition.
- During the quarter, the Company recognized a $7.5 million gain
on the sale of a non-operating facility that previously supported a
divested business, which has been excluded from Adjusted
EBITDA.
- Order activity for utility and related structures remains
healthy and conversations with customers for additional wind tower
orders continue.
- At the end of the second quarter, the combined backlog for
utility, wind, and related structures was $1,338.7 million compared
to $1,507.4 million at the end of the second quarter of 2023. We
expect to deliver approximately 37% of our current backlog in
2024.
Transportation Products
- Revenues were $113.8 million, roughly flat as higher barge
revenues were mostly offset by lower steel component volumes. Barge
revenues increased 4% driven by higher hopper barge
deliveries.
- Adjusted Segment EBITDA increased $1.1 million, or 7%, to $16.7
million, representing a 14.7% margin compared to 13.8% in the prior
period. The increase was driven by higher volumes and improved
margin in the barge business.
- During the quarter, we received orders totaling approximately
$33 million, primarily for tank barges, representing a book-to-bill
of 0.4.
- Backlog for inland barges at the end of the quarter was $251.5
million, roughly flat with the start of the year. We expect to
deliver approximately 69% of our current backlog in 2024.
Corporate and Other Financial Notes
- Excluding acquisition and divestiture-related costs, which have
been excluded from Adjusted EBITDA, corporate expenses decreased to
$16.0 million in the second quarter from $16.4 million in the prior
year.
- Acquisition and divestiture-related costs were $3.9 million in
the second quarter compared to $0.3 million in the prior year.
- The effective tax rate in the second quarter was 14.3% compared
to 12.0% in the prior year. The increase in the tax rate was
primarily due to foreign currency impacts partially offset by
increased Advanced Manufacturing Production ("AMP") tax
credits.
Cash Flow and Liquidity
- Operating cash flow was $38.3 million during the second
quarter, a decrease of $89.3 million compared to the prior year
driven by an increase in working capital.
- Working capital was a $49.3 million net use of cash for the
quarter compared to the prior year's $41.0 million net source of
cash. The increase in working capital was driven by higher accounts
receivable primarily in our wind towers business.
- Capital expenditures in the second quarter were $47.6 million,
compared to $52.5 million in the prior year, as we continue to make
progress on organic projects underway in Construction Products and
Engineered Structures.
- Free Cash Flow for the quarter was $(6.1) million, down from
$75.6 million in the prior year.
- We invested $179.9 million, net of cash acquired, for the
purchase of Ameron, initially borrowing $160.0 million under our
revolving credit facility to partially fund the acquisition and
repaid $60 million within the quarter.
- In July 2024, we completed the acquisition of a Phoenix,
Arizona based natural aggregates business for a total purchase
price of $35.0 million, which will be included in our Construction
Products segment.
- We ended the quarter with total liquidity of $393.0 million,
including $103.7 million of cash and cash equivalents, and Net Debt
to Adjusted EBITDA was 1.5X for the trailing twelve months.
Non-GAAP Financial Information
This earnings release contains financial measures that have not
been prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”). Reconciliations of non-GAAP financial measures
to the closest GAAP measure are included in the accompanying tables
to this earnings release.
Conference Call Information
A conference call is scheduled for 8:30 a.m. Eastern Time on
August 2, 2024 to discuss second quarter 2024 results and the
strategic actions announced today in a separate release. To listen
to the conference call webcast, please visit the Investor Relations
section of Arcosa’s website at https://ir.arcosa.com. A slide
presentation for this conference call will be posted on the
Company’s website in advance of the call at https://ir.arcosa.com.
The audio conference call number is 800-343-1703 for domestic
callers and 785-424-1116 for international callers. The conference
ID is ARCOSA and the passcode is 24246. An audio playback will be
available through 11:59 p.m. Eastern Time on August 16, 2024, by
dialing 800-839-1162 for domestic callers and 402-220-0398 for
international callers. A replay of the webcast will be available
for one year on Arcosa’s website at
https://ir.arcosa.com/news-events/events-presentations.
About Arcosa
Arcosa, Inc. (NYSE:ACA), headquartered in Dallas, Texas, is a
provider of infrastructure-related products and solutions with
leading positions in construction, engineered structures, and
transportation markets. Arcosa reports its financial results in
three principal business segments: Construction Products,
Engineered Structures, and Transportation Products. For more
information, visit www.arcosa.com.
Some statements in this release, which are not historical facts,
are “forward-looking statements” as defined by the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements about Arcosa’s estimates,
expectations, beliefs, intentions or strategies for the future.
Arcosa uses the words “anticipates,” “assumes,” “believes,”
“estimates,” “expects,” “intends,” “forecasts,” “may,” “will,”
“should,” “guidance,” “outlook,” “strategy,” “plans,” “goal,” and
similar expressions to identify these forward-looking statements.
Forward-looking statements speak only as of the date of this
release, and Arcosa expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein, except as required by
federal securities laws. Forward-looking statements are based on
management’s current views and assumptions and involve risks and
uncertainties that could cause actual results to differ materially
from historical experience or our present expectations, including
but not limited to assumptions, risks and uncertainties regarding
failure to successfully complete or integrate acquisitions,
including Ameron and Stavola, or divest any business, including the
steel components business, or failure to achieve the expected
benefits of acquisitions or divestitures; market conditions and
customer demand for Arcosa’s business products and services; the
cyclical nature of, and seasonal or weather impact on, the
industries in which Arcosa competes; competition and other
competitive factors; governmental and regulatory factors; changing
technologies; availability of growth opportunities; market
recovery; ability to improve margins; the impact of inflation and
costs of materials; assumptions regarding achievements of the
expected benefits from the Inflation Reduction Act; the delivery or
satisfaction of any backlog or firm orders; the impact of pandemics
on Arcosa’s business; and Arcosa’s ability to execute its long-term
strategy, and such forward-looking statements are not guarantees of
future performance. For further discussion of such risks and
uncertainties, see “Risk Factors” and the “Forward-Looking
Statements” section of “Management's Discussion and Analysis of
Financial Condition and Results of Operations” in Arcosa's Form
10-K for the year ended December 31, 2023 and as may be revised and
updated by Arcosa's Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
TABLES TO FOLLOW
Arcosa, Inc.
Condensed Consolidated Statements of
Operations
(in millions, except per share
amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Revenues
$
664.7
$
584.8
$
1,263.3
$
1,134.0
Operating costs:
Cost of revenues
526.7
463.7
1,013.7
904.3
Selling, general, and administrative
expenses
79.5
70.7
148.6
133.2
Gain on disposition of property, plant,
equipment, and other assets
(2.0
)
(0.6
)
(5.9
)
(23.2
)
Gain on sale of businesses
(12.5
)
—
(19.5
)
(6.4
)
Impairment charge
5.8
—
5.8
—
597.5
533.8
1,142.7
1,007.9
Operating profit
67.2
51.0
120.6
126.1
Interest expense
11.4
7.1
19.7
14.2
Other, net (income) expense
2.6
(2.6
)
0.4
(4.5
)
14.0
4.5
20.1
9.7
Income before income taxes
53.2
46.5
100.5
116.4
Provision for income taxes
7.6
5.6
15.7
19.8
Net income
$
45.6
$
40.9
$
84.8
$
96.6
Net income per common share:
Basic
$
0.93
$
0.84
$
1.74
$
1.99
Diluted
$
0.93
$
0.84
$
1.74
$
1.98
Weighted average number of shares
outstanding:
Basic
48.6
48.5
48.5
48.4
Diluted
48.7
48.7
48.7
48.6
Arcosa, Inc.
Condensed Segment Data
(in millions)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
Revenues:
2024
2023
2024
2023
Aggregates and specialty materials
$
235.5
$
227.1
$
457.2
$
438.1
Construction site support
40.6
37.7
70.1
62.8
Construction Products
276.1
264.8
527.3
500.9
Utility, wind, and related structures
274.8
207.0
506.4
414.7
Engineered Structures
274.8
207.0
506.4
414.7
Inland barges
75.7
72.5
155.4
140.6
Steel components
38.1
40.5
74.2
77.8
Transportation Products
113.8
113.0
229.6
218.4
Consolidated Total
$
664.7
$
584.8
$
1,263.3
$
1,134.0
Three Months Ended
June 30,
Six Months Ended
June 30,
Operating profit (loss):
2024
2023
2024
2023
Construction Products
$
39.4
$
34.4
$
68.2
$
83.9
Engineered Structures
35.1
21.7
61.4
51.6
Transportation Products
12.6
11.6
27.2
21.7
Segment Total
87.1
67.7
156.8
157.2
Corporate
(19.9
)
(16.7
)
(36.2
)
(31.1
)
Consolidated Total
$
67.2
$
51.0
$
120.6
$
126.1
Backlog:
June 30, 2024
June 30, 2023
Engineered Structures:
Utility, wind, and related structures
$
1,338.7
$
1,507.4
Transportation Products:
Inland barges
$
251.5
$
287.1
Arcosa, Inc.
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
June 30, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
103.7
$
104.8
Receivables, net of allowance
442.8
357.1
Inventories
405.9
401.8
Other
38.5
48.3
Total current assets
990.9
912.0
Property, plant, and equipment, net
1,415.3
1,336.3
Goodwill
1,023.4
990.7
Intangibles, net
313.1
270.7
Deferred income taxes
6.9
6.8
Other assets
58.3
61.4
$
3,807.9
$
3,577.9
Current liabilities:
Accounts payable
$
263.7
$
272.5
Accrued liabilities
126.9
117.4
Advance billings
32.2
34.5
Current portion of long-term debt
6.6
6.8
Total current liabilities
429.4
431.2
Debt
699.9
561.9
Deferred income taxes
198.1
179.6
Other liabilities
65.5
73.2
1,392.9
1,245.9
Stockholders' equity:
Common stock
0.5
0.5
Capital in excess of par value
1,686.5
1,682.8
Retained earnings
744.8
664.9
Accumulated other comprehensive loss
(16.8
)
(16.2
)
2,415.0
2,332.0
$
3,807.9
$
3,577.9
Arcosa, Inc.
Consolidated Statements of Cash
Flows
(in millions)
(unaudited)
Six Months Ended
June 30,
2024
2023
Operating activities:
Net income
$
84.8
$
96.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and
amortization
89.4
78.3
Impairment charge
5.8
—
Stock-based compensation expense
14.1
12.6
Provision for deferred income taxes
14.4
12.9
Gain on disposition of property, plant,
equipment, and other assets
(5.9
)
(23.2
)
Gain on sale of businesses
(19.5
)
(6.4
)
(Increase) decrease in other assets
(4.2
)
(0.3
)
Increase (decrease) in other
liabilities
(9.7
)
(3.4
)
Other
(5.7
)
2.2
Changes in current assets and
liabilities:
(Increase) decrease in receivables
(80.6
)
(30.7
)
(Increase) decrease in inventories
21.9
(34.6
)
(Increase) decrease in other current
assets
11.3
10.3
Increase (decrease) in accounts
payable
(11.3
)
43.4
Increase (decrease) in advance
billings
(2.3
)
4.0
Increase (decrease) in accrued
liabilities
16.3
(6.8
)
Net cash provided by operating
activities
118.8
154.9
Investing activities:
Proceeds from disposition of property,
plant, equipment, and other assets
7.4
24.4
Proceeds from sale of businesses
33.3
2.0
Capital expenditures
(102.0
)
(96.9
)
Acquisitions, net of cash acquired
(179.9
)
(15.6
)
Net cash required by investing
activities
(241.2
)
(86.1
)
Financing activities:
Payments to retire debt
(63.4
)
(5.4
)
Proceeds from issuance of debt
200.0
—
Dividends paid to common stockholders
(4.9
)
(4.8
)
Purchase of shares to satisfy employee tax
on vested stock
(10.4
)
(11.1
)
Holdback payment from acquisition
—
(10.0
)
Net cash provided (required) by financing
activities
121.3
(31.3
)
Net increase (decrease) in cash and cash
equivalents
(1.1
)
37.5
Cash and cash equivalents at beginning of
period
104.8
160.4
Cash and cash equivalents at end of
period
$
103.7
$
197.9
Arcosa, Inc.
Reconciliation of Adjusted Net Income
and Adjusted Diluted EPS
(unaudited)
GAAP does not define “Adjusted Net Income”
and it should not be considered as an alternative to earnings
measures defined by GAAP, including net income. We use this metric
to assess the operating performance of our consolidated business.
We adjust net income for certain items that are not reflective of
the normal operations of our business to provide investors with
what we believe is a more consistent comparison of earnings
performance from period to period.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
(in millions)
Net Income
$
45.6
$
40.9
$
84.8
$
96.6
Gain on sale of businesses, net of tax
(9.7
)
—
(15.0
)
(4.5
)
Impact of acquisition and
divestiture-related expenses, net of tax(1)
4.3
0.2
6.4
0.7
Benefit from reduction in holdback
obligation, net of tax
—
(3.8
)
—
(3.8
)
Impairment charge, net of tax
4.5
—
4.5
—
Adjusted Net Income
$
44.7
$
37.3
$
80.7
$
89.0
GAAP does not define “Adjusted Diluted
EPS” and it should not be considered as an alternative to earnings
measures defined by GAAP, including diluted EPS. We use this metric
to assess the operating performance of our consolidated business.
We adjust diluted EPS for certain items that are not reflective of
the normal operations of our business to provide investors with
what we believe is a more consistent comparison of earnings
performance from period to period.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
(in dollars per share)
Diluted EPS
$
0.93
$
0.84
$
1.74
$
1.98
Gain on sale of businesses
(0.20
)
—
(0.31
)
(0.09
)
Impact of acquisition and
divestiture-related expenses(1)
0.09
—
0.13
0.01
Benefit from reduction in holdback
obligation
—
(0.08
)
—
(0.08
)
Impairment charge
0.09
—
0.09
—
Adjusted Diluted EPS
$
0.91
$
0.76
$
1.65
$
1.82
(1) Expenses associated with acquisitions
and divestitures, including the cost impact of the fair value
markup of acquired inventory, advisory and professional fees,
integration, separation, and other transaction costs.
Arcosa, Inc.
Reconciliation of Adjusted
EBITDA
($ in millions)
(unaudited)
“EBITDA” is defined as net income plus
interest, taxes, depreciation, depletion, and amortization.
“Adjusted EBITDA” is defined as EBITDA adjusted for certain items
that are not reflective of the normal earnings of our business.
GAAP does not define EBITDA or Adjusted EBITDA and they should not
be considered as alternatives to earnings measures defined by GAAP,
including net income. We use Adjusted EBITDA to assess the
operating performance of our consolidated business, as a metric for
incentive-based compensation, as a measure within our lending
arrangements, and as a basis for strategic planning and forecasting
as we believe that it closely correlates to long-term shareholder
value. As a widely used metric by analysts, investors, and
competitors in our industry, we believe Adjusted EBITDA also
assists investors in comparing a company's performance on a
consistent basis without regard to depreciation, depletion,
amortization, and other items which can vary significantly
depending on many factors. “Adjusted EBITDA Margin” is defined as
Adjusted EBITDA divided by Revenues.
Three Months
Ended
June 30,
Six Months
Ended
June 30,
Full Year
2024
Guidance(3)
2024
2023
2024
2023
Low
High
Revenues
$
664.7
$
584.8
$
1,263.3
$
1,134.0
$
2,600.0
$
2,720.0
Net income
45.6
40.9
84.8
96.6
172.6
180.7
Add:
Interest expense, net
10.7
5.7
17.3
11.6
34.0
36.0
Provision for income taxes
7.6
5.6
15.7
19.8
35.3
39.7
Depreciation, depletion, and amortization
expense(1)
46.6
39.5
89.4
78.3
180.0
185.0
EBITDA
110.5
91.7
207.2
206.3
421.9
441.4
Add (less):
Gain on sale of businesses
(12.5
)
—
(19.5
)
(6.4
)
(19.5
)
(19.5
)
Impact of acquisition and
divestiture-related expenses(2)
5.6
0.3
8.4
0.9
9.0
9.5
Benefit from reduction in holdback
obligation
—
(5.0
)
—
(5.0
)
—
—
Impairment charge
5.8
—
5.8
—
5.8
5.8
Other, net (income) expense
3.3
(1.2
)
2.8
(1.9
)
2.8
2.8
Adjusted EBITDA
$
112.7
$
85.8
$
204.7
$
193.9
$
420.0
$
440.0
Adjusted EBITDA Margin
17.0
%
14.7
%
16.2
%
17.1
%
16.2
%
16.2
%
(1) Includes the impact of the fair value
markup of acquired long-lived assets, subject to final purchase
price adjustments.
(2) Expenses associated with acquisitions
and divestitures, including the cost impact of the fair value
markup of acquired inventory, advisory and professional fees,
integration, separation, and other transaction costs.
(3) Full year 2024 guidance does not
include the strategic actions announced in a separate release
today. We plan to update our guidance following the close of the
Stavola acquisition.
Arcosa, Inc.
Reconciliation of Adjusted Segment
EBITDA
($ in millions)
(unaudited)
“Segment EBITDA” is defined as segment
operating profit plus depreciation, depletion, and amortization.
“Adjusted Segment EBITDA” is defined as Segment EBITDA adjusted for
certain items that are not reflective of the normal earnings of our
business. GAAP does not define Segment EBITDA or Adjusted Segment
EBITDA and they should not be considered as alternatives to
earnings measures defined by GAAP, including segment operating
profit. We use Adjusted Segment EBITDA to assess the operating
performance of our businesses, as a metric for incentive-based
compensation, and as a basis for strategic planning and forecasting
as we believe that it closely correlates to long-term shareholder
value. As a widely used metric by analysts, investors, and
competitors in our industry we believe Adjusted Segment EBITDA also
assists investors in comparing a company's performance on a
consistent basis without regard to depreciation, depletion,
amortization, and other items, which can vary significantly
depending on many factors. “Adjusted Segment EBITDA Margin” is
defined as Adjusted Segment EBITDA divided by Revenues.
Three Months
Ended
June 30,
Six Months
Ended
June 30,
Twelve
Months
Ended
June 30,
2024
2023
2024
2023
2024
Construction Products
Revenues
$
276.1
$
264.8
$
527.3
$
500.9
$
1,027.7
Operating Profit
39.4
34.4
68.2
83.9
122.9
Add: Depreciation, depletion, and
amortization expense(1)
29.4
27.8
59.5
54.7
116.5
Segment EBITDA
68.8
62.2
127.7
138.6
239.4
Less: Gain on sale of businesses
(5.0
)
—
(5.0
)
—
(5.0
)
Add: Impact of acquisition and
divestiture-related expenses(2)
0.1
—
1.3
—
1.3
Less: Benefit from reduction in holdback
obligation
—
(5.0
)
—
(5.0
)
—
Add: Impairment charge
5.8
—
5.8
—
5.8
Adjusted Segment EBITDA
$
69.7
$
57.2
$
129.8
$
133.6
$
241.5
Adjusted Segment EBITDA Margin
25.2
%
21.6
%
24.6
%
26.7
%
23.5
%
Engineered Structures
Revenues
$
274.8
$
207.0
$
506.4
$
414.7
$
965.2
Operating Profit
35.1
21.7
61.4
51.6
105.5
Add: Depreciation and amortization
expense(1)
12.5
6.4
20.4
13.0
34.0
Segment EBITDA
47.6
28.1
81.8
64.6
139.5
Add: Impact of acquisition and
divestiture-related expenses(2)
1.6
—
1.6
—
1.6
Less: Gain on sale of businesses
(7.5
)
—
(14.5
)
(6.4
)
(14.5
)
Adjusted Segment EBITDA
$
41.7
$
28.1
$
68.9
$
58.2
$
126.6
Adjusted Segment EBITDA Margin
15.2
%
13.6
%
13.6
%
14.0
%
13.1
%
Transportation Products
Revenues
$
113.8
$
113.0
$
229.6
$
218.4
$
444.7
Operating Profit
12.6
11.6
27.2
21.7
51.3
Add: Depreciation and amortization
expense
4.1
4.0
8.1
8.0
16.1
Segment EBITDA
16.7
15.6
35.3
29.7
67.4
Adjusted Segment EBITDA
$
16.7
$
15.6
$
35.3
$
29.7
$
67.4
Adjusted Segment EBITDA Margin
14.7
%
13.8
%
15.4
%
13.6
%
15.2
%
Operating Loss - Corporate
$
(19.9
)
$
(16.7
)
$
(36.2
)
$
(31.1
)
$
(67.9
)
Add: Impact of acquisition and
divestiture-related expenses - Corporate(2)
3.9
0.3
5.5
0.9
6.8
Add: Corporate depreciation expense
0.6
1.3
1.4
2.6
4.0
Adjusted EBITDA
$
112.7
$
85.8
$
204.7
$
193.9
$
378.4
(1) Includes the impact of the fair value
markup of acquired long-lived assets, subject to final purchase
price adjustments.
(2) Expenses associated with acquisitions
and divestitures, including the cost impact of the fair value
markup of acquired inventory, advisory and professional fees,
integration, separation, and other transaction costs.
Arcosa, Inc.
Reconciliation of Freight-Adjusted
Revenues for Construction Products
($ in millions)
(unaudited)
“Freight-Adjusted Revenues” for
Construction Products is defined as segment revenues less freight
and delivery, which are pass-through activities. GAAP does not
define Freight-Adjusted Revenues and they should not be considered
as alternatives to earnings measures defined by GAAP, including
revenues. We use Freight-Adjusted Revenues in the review of our
operating results. We also believe that this presentation is
consistent with our competitors. As a widely used metric by
analysts and investors, this metric assists in comparing a
company's performance on a consistent basis. “Freight-Adjusted
Segment Margin” is defined as Freight-Adjusted Revenues divided by
Adjusted Segment EBITDA.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Construction Products
Revenues
$
276.1
$
264.8
$
527.3
$
500.9
Less: Freight revenues(1)
27.1
30.5
51.0
59.0
Freight-Adjusted Revenues
$
249.0
$
234.3
$
476.3
$
441.9
Adjusted Segment EBITDA(2)
$
69.7
$
57.2
$
129.8
$
133.6
Adjusted Segment EBITDA Margin(2)
25.2
%
21.6
%
24.6
%
26.7
%
Freight-Adjusted Segment EBITDA Margin
28.0
%
24.4
%
27.3
%
30.2
%
(1) The freight revenue amount shown for
the three and six months ended June 30, 2023 has been updated from
the prior year disclosure due to a reclass between freight revenue
and product revenue.
(2) See Reconciliation of Adjusted Segment
EBITDA table.
Arcosa, Inc.
Reconciliation of Free Cash Flow and
Net Debt to Adjusted EBITDA
($ in millions)
(unaudited)
GAAP does not define “Free Cash Flow” and
it should not be considered as an alternative to cash flow measures
defined by GAAP, including cash flow from operating activities. We
define Free Cash Flow as cash provided by operating activities less
capital expenditures net of the proceeds from the disposition of
property, plant, equipment, and other assets. The Company also uses
“Free Cash Flow Conversion”, which we define as Free Cash Flow
divided by net income. We use these metrics to assess the liquidity
of our consolidated business. We present these metrics for the
convenience of investors who use such metrics in their analysis and
for shareholders who need to understand the metrics we use to
assess performance and monitor our cash and liquidity
positions.
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Cash Provided by Operating Activities
$
38.3
$
127.6
$
118.8
$
154.9
Capital expenditures
(47.6
)
(52.5
)
(102.0
)
(96.9
)
Proceeds from disposition of property,
plant, equipment, and other assets
3.2
0.5
7.4
24.4
Free Cash Flow
$
(6.1
)
$
75.6
$
24.2
$
82.4
Net income
$
45.6
$
40.9
$
84.8
$
96.6
Free Cash Flow Conversion
(13
)%
185
%
29
%
85
%
GAAP does not define “Net Debt” and it
should not be considered as an alternative to cash flow or
liquidity measures defined by GAAP. The Company uses Net Debt,
which it defines as total debt minus cash and cash equivalents to
determine the extent to which the Company’s outstanding debt
obligations would be satisfied by its cash and cash equivalents on
hand. The Company also uses “Net Debt to Adjusted EBITDA”, which it
defines as Net Debt divided by Adjusted EBITDA for the trailing
twelve months as a metric of its current leverage position. We
present this metric for the convenience of investors who use such
metrics in their analysis and for shareholders who need to
understand the metrics we use to assess performance and monitor our
cash and liquidity positions.
June 30, 2024
Total debt excluding debt issuance
costs
$
710.4
Cash and cash equivalents
103.7
Net Debt
$
606.7
Adjusted EBITDA (trailing twelve
months)(1)
$
393.3
Net Debt to Adjusted EBITDA
1.5
(1) Adjusted EBITDA includes a pro forma
adjustment for Ameron of $14.9 million, which reflects an amount
equal to 75% of Ameron’s historical Adjusted EBITDA for the twelve
months ended December 31, 2023 of $19.8 million, as previously
disclosed, to approximate the nine-month pro forma impact on our
Adjusted EBTIDA as if the acquisition had occurred on June 30,
2023. We acquired Ameron on April 9, 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801911746/en/
INVESTOR CONTACTS
Gail M. Peck Chief Financial Officer
Erin Drabek Director of Investor Relations T 972.942.6500
InvestorResources@arcosa.com
David Gold ADVISIRY Partners T 212.661.2220
David.Gold@advisiry.com
MEDIA CONTACT Media@arcosa.com
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