Arcosa(US:ACA)2025-10-31 14:45Financial Performance - Revenues for the three and nine months ended September 30, 2025 increased by 24.6% to $797.8 million and by 13.8% to $2,166.7 million, respectively, compared to the same periods in 2024[106]. - Operating profit for the three and nine months ended September 30, 2025 increased by $78.5 million to $112.3 million and by $108.5 million to $262.9 million, respectively, with all segments contributing to the increase[106]. - Net income for the three and nine months ended September 30, 2025 was $73.0 million and $156.3 million, respectively, compared to $16.6 million and $101.4 million for the same periods in 2024[106]. - Operating profit increased 232.2% and 70.3% for the three and nine months ended September 30, 2025, respectively, with a 95.8% and 53.5% increase when excluding the divested steel components business[116]. - Revenues for Construction Products increased by 50.5% to $351.6 million for the three months ended September 30, 2025, driven by the acquisition of Stavola[122]. Backlog and Orders - The backlog for utility and related structures as of September 30, 2025 was $461.5 million, up 11% year to date, providing good production visibility for 2025 and into 2026[100]. - The company received new wind tower orders of $1.1 billion following the Inflation Reduction Act, with a remaining backlog for wind towers of $526.3 million as of September 30, 2025[100]. - The backlog for inland barges as of September 30, 2025 was $325.9 million, up 16% year to date, indicating future pent-up replacement demand[101]. - The backlog for utility and related structures was $461.5 million as of September 30, 2025, with 43% expected to be recognized during 2025[131]. - The backlog for wind towers was $526.3 million as of September 30, 2025, with 18% expected to be recognized during 2025[132]. - As of September 30, 2025, the backlog for inland barges was $325.9 million, up from $244.7 million a year earlier, with an expectation to recognize 30% of this backlog in 2025[137]. Expenses and Costs - Selling, general, and administrative expenses decreased as a percentage of revenues to 10.3% for the three months and 10.6% for the nine months ended September 30, 2025, compared to 12.9% and 12.1% for the same periods in 2024[106]. - Operating costs increased by 13.0% and 8.8% for the three and nine months ended September 30, 2025, respectively[115]. - Cost of revenues increased 42.2% for Construction Products due to the acquisition of Stavola, with a decrease in cost of revenues as a percentage of revenues to 73.4%[123]. - Depreciation, depletion, and amortization expense increased 38.4% primarily due to the acquisition of Stavola[123]. - Selling, general, and administrative expenses decreased by 31.1% for the nine months ended September 30, 2025, driven by the steel components divestiture[141]. - Cost of revenues for the nine months ended September 30, 2025, decreased by 2.5% due to the divestiture of the steel components business[141]. Acquisitions and Financing - The company completed the acquisition of Stavola Holding Corporation for $1.2 billion in cash, enhancing its Construction Products segment[102]. - Interest expense for the three and nine months ended September 30, 2025 totaled $27.1 million and $83.9 million, respectively, reflecting an increase due to additional debt from the Stavola acquisition[106]. - The Company entered into a $698.3 million 2025 Refinancing Term Loan to satisfy the outstanding balance under the 2024 Term Loan, with a maturity date of October 1, 2031[151]. - The Company issued $600.0 million of 6.875% 2024 Notes maturing in August 2032, and $400.0 million of 4.375% senior unsecured notes maturing in April 2029[152]. - The interest rate for the 2025 Refinancing Term Loan is based on SOFR plus 2.00% per year, or an alternate base rate plus 1.00% per year[151]. Shareholder Returns and Liquidity - A quarterly cash dividend of $0.05 per share was declared in September 2025, scheduled for payment on October 31, 2025[154]. - The Board authorized a $50.0 million share repurchase program effective January 1, 2025, with no shares repurchased as of September 30, 2025[155]. - The Company believes that existing cash, available liquidity, and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for the foreseeable future[153]. - The company had no outstanding loans under its revolving credit facility as of September 30, 2025, leaving $700.0 million available for borrowing[148]. Tax and Market Risks - The effective tax rate for the three and nine months ended September 30, 2025 was 16.2% and 16.0%, respectively, compared to 13.1% and 15.2% for the same periods in 2024[106]. - The terms of the Senior Notes limit the Company's ability to create liens on assets and enter into certain transactions[152]. - The Company faces various risks that could impact future performance, including market conditions, competition, and changes in regulations[157]. - There has been no material change in market risks since December 31, 2024, as noted in the 2024 Annual Report[159].