Arcosa(ACA) - 2022 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION This section details Arcosa's financial performance, position, cash flows, and related accounting notes for the periods ended June 30, 2022 Item 1. Financial Statements This section presents Arcosa's unaudited consolidated financial statements, including statements of operations, comprehensive income, balance sheets, cash flows, and stockholders' equity, along with detailed notes on accounting policies, acquisitions, debt, and other financial disclosures for the periods ended June 30, 2022 Consolidated Statements of Operations This statement outlines Arcosa's revenues, operating profit, net income, and diluted EPS for the three and six months ended June 30, 2022 and 2021 Financial Performance (Three Months Ended June 30) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Revenues | $602.8 | $515.1 | 17.0% | | Operating Profit | $57.2 | $31.3 | 82.7% | | Net Income | $39.0 | $20.8 | 87.5% | | Diluted EPS | $0.79 | $0.43 | 83.7% | | Dividends Declared per Common Share | $0.05 | $0.05 | 0.0% | Financial Performance (Six Months Ended June 30) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Revenues | $1,138.6 | $955.5 | 19.2% | | Operating Profit | $91.9 | $54.2 | 69.6% | | Net Income | $59.2 | $36.7 | 61.3% | | Diluted EPS | $1.21 | $0.75 | 61.3% | | Dividends Declared per Common Share | $0.10 | $0.10 | 0.0% | Consolidated Statements of Comprehensive Income This statement details Arcosa's net income and other comprehensive income components for the three and six months ended June 30, 2022 and 2021 Comprehensive Income (Three Months Ended June 30) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Net Income | $39.0 | $20.8 | 87.5% | | Other Comprehensive Income (Loss) | $0.8 | $0.8 | 0.0% | | Comprehensive Income | $39.8 | $21.6 | 84.3% | Comprehensive Income (Six Months Ended June 30) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Net Income | $59.2 | $36.7 | 61.3% | | Other Comprehensive Income (Loss) | $3.0 | $1.8 | 66.7% | | Comprehensive Income | $62.2 | $38.5 | 61.6% | Consolidated Balance Sheets This statement provides a snapshot of Arcosa's assets, liabilities, and stockholders' equity as of June 30, 2022, and December 31, 2021 Balance Sheet Highlights (June 30, 2022 vs. December 31, 2021) | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | Change (%) | | :----- | :-------------------------- | :------------------------------ | :------------------- | :--------- | | Total Assets | $3,337.3 | $3,188.1 | $149.2 | 4.7% | | Total Current Assets | $871.3 | $767.9 | $103.4 | 13.5% | | Assets Held for Sale | $116.9 | $20.4 | $96.5 | 473.0% | | Goodwill | $950.9 | $934.9 | $16.0 | 1.7% | | Intangibles, net | $266.8 | $220.3 | $46.5 | 21.1% | | Total Liabilities | $1,341.3 | $1,234.8 | $106.5 | 8.6% | | Total Current Liabilities | $416.4 | $364.0 | $52.4 | 14.4% | | Debt | $699.4 | $664.7 | $34.7 | 5.2% | | Total Stockholders' Equity | $1,996.0 | $1,953.3 | $42.7 | 2.2% | Consolidated Statements of Cash Flows This statement summarizes Arcosa's cash flows from operating, investing, and financing activities for the six months ended June 30, 2022 and 2021 Cash Flow Summary (Six Months Ended June 30) | Activity | 2022 (in millions) | 2021 (in millions) | Change (in millions) | | :------- | :----------------- | :----------------- | :------------------- | | Net cash provided by operating activities | $111.2 | $51.1 | $60.1 | | Net cash required by investing activities | $(98.7) | $(419.1) | $320.4 | | Net cash required by financing activities | $(6.0) | $372.5 | $(378.5) | | Net increase in cash and cash equivalents | $6.5 | $4.5 | $2.0 | - Net cash provided by operating activities for the six months ended June 30, 2022, was $111.2 million, compared to $51.1 million for the same period in 2021[110] - Changes in current assets and liabilities resulted in a net use of cash of $30.4 million for the six months ended June 30, 2022, primarily driven by increased receivables and inventories, partially offset by increases in accounts payable[110] - Net cash required by investing activities for the six months ended June 30, 2022, was $98.7 million, a significant decrease from $419.1 million in 2021[110] - Capital expenditures were $52.9 million in 2022 versus $41.5 million in 2021, while cash paid for acquisitions, net of cash acquired, was $75.0 million in 2022 versus $388.7 million in 2021[110][111] - Net cash required by financing activities during the six months ended June 30, 2022, was $6.0 million, a shift from net cash provided of $372.5 million in 2021[111] - Current year financing activity primarily related to borrowings and repayments under the revolving credit facility and $15.0 million of share repurchases[111] - Prior year financing activity primarily related to net proceeds from the issuance of $400 million Senior Notes[111] Consolidated Statements of Stockholders' Equity This statement details changes in Arcosa's stockholders' equity, including net income, dividends, and share repurchases, for the period ended June 30, 2022 Stockholders' Equity Changes (March 31, 2022 to June 30, 2022) | Metric | March 31, 2022 (in millions) | June 30, 2022 (in millions) | Change (in millions) | | :----- | :--------------------------- | :-------------------------- | :------------------- | | Total Stockholders' Equity | $1,977.6 | $1,996.0 | $18.4 | | Net Income | - | $39.0 | $39.0 | | Other Comprehensive Income | - | $0.8 | $0.8 | | Cash Dividends on Common Stock | - | $(2.6) | $(2.6) | | Shares Repurchased | - | $(15.0) | $(15.0) | Notes to Consolidated Financial Statements This section provides detailed explanations and disclosures supporting Arcosa's consolidated financial statements Note 1. Overview and Summary of Significant Accounting Policies This note describes Arcosa's business, significant accounting policies, and revenue recognition principles, including backlog information - Arcosa, Inc. is a provider of infrastructure-related products and solutions with leading brands serving construction, engineered structures, and transportation markets in North America[16] - The company was incorporated in 2018 as an independent, publicly-traded company[16] - The Board authorized a new $50 million share repurchase program effective January 1, 2021, through December 31, 2022[17] - As of June 30, 2022, the Company had a remaining authorization of $25.7 million under the share repurchase program[17] - Revenue is recognized when the Company satisfies a performance obligation by transferring control over a product or service to a customer[18] Unsatisfied Performance Obligations (Backlog) as of June 30, 2022 | Segment | Product Line | Total Amount (in millions) | % Expected to be Delivered in 2022 | | :------ | :----------- | :------------------------- | :--------------------------------- | | Engineered Structures | Utility, wind, and related structures | $410.1 | 83% | | Engineered Structures | Storage tanks | $20.2 | 100% | | Transportation Products | Inland barges | $131.8 | 50% | Note 2. Acquisitions and Divestitures This note details Arcosa's recent acquisitions, including RAMCO, and the agreement to sell its storage tanks business - In May 2022, Arcosa acquired Recycled Aggregate Materials Company, Inc. (RAMCO), a leading producer of recycled aggregates in the Los Angeles metropolitan area, for $75.4 million, included in the Construction Products segment[30] - In August 2021, Arcosa acquired Southwest Rock Products, LLC for $149.7 million, and in April 2021, acquired StonePoint Ultimate Holding, LLC for $372.8 million, both enhancing the Construction Products segment[32][33] - On April 25, 2022, the Company entered into an agreement to sell its storage tanks business for $275 million in cash, with the transaction expected to close in the second half of 2022[36] - As of June 30, 2022, $116.9 million of assets and $44.7 million of liabilities were reclassified as held for sale related to the storage tanks business divestiture[36] Note 3. Fair Value Accounting This note outlines Arcosa's fair value measurements for financial instruments, categorized by a three-level hierarchy Fair Value of Financial Instruments (June 30, 2022) | Instrument | Level | Fair Value (in millions) | | :--------- | :---- | :----------------------- | | Interest rate hedge (asset) | Level 2 | $0.3 | | Contingent consideration (liability) | Level 3 | $4.9 | Fair Value of Financial Instruments (December 31, 2021) | Instrument | Level | Fair Value (in millions) | | :--------- | :---- | :----------------------- | | Interest rate hedge (liability) | Level 2 | $3.9 | | Contingent consideration (liability) | Level 3 | $6.7 | - Fair value is measured using a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (unobservable inputs)[39] - Contingent consideration is estimated using a discounted cash flow model (Level 3)[40] Note 4. Segment Information This note provides financial performance data for Arcosa's three principal business segments: Construction Products, Engineered Structures, and Transportation Products - Arcosa operates in three principal business segments: Construction Products (aggregates, specialty materials, construction site support), Engineered Structures (steel structures for infrastructure, storage tanks), and Transportation Products (inland barges, steel components for railcars)[41] Segment Revenues and Operating Profit (Three Months Ended June 30) | Segment | 2022 Revenues (in millions) | 2021 Revenues (in millions) | Revenue Change (%) | 2022 Operating Profit (in millions) | 2021 Operating Profit (in millions) | Operating Profit Change (%) | | :------ | :-------------------------- | :-------------------------- | :----------------- | :---------------------------------- | :---------------------------------- | :-------------------------- | | Construction Products | $245.9 | $204.5 | 20.2% | $28.1 | $17.9 | 57.0% | | Engineered Structures | $268.6 | $242.5 | 10.8% | $41.5 | $29.1 | 42.6% | | Transportation Products | $88.3 | $68.2 | 29.5% | $3.5 | $1.3 | 169.2% | | Consolidated Total | $602.8 | $515.1 | 17.0% | $57.2 | $31.3 | 82.7% | Segment Revenues and Operating Profit (Six Months Ended June 30) | Segment | 2022 Revenues (in millions) | 2021 Revenues (in millions) | Revenue Change (%) | 2022 Operating Profit (in millions) | 2021 Operating Profit (in millions) | Operating Profit Change (%) | | :------ | :-------------------------- | :-------------------------- | :----------------- | :---------------------------------- | :---------------------------------- | :-------------------------- | | Construction Products | $457.4 | $357.7 | 27.9% | $44.8 | $33.7 | 32.9% | | Engineered Structures | $519.1 | $449.5 | 15.5% | $69.8 | $46.6 | 49.8% | | Transportation Products | $162.1 | $148.4 | 9.2% | $6.2 | $5.4 | 14.8% | | Consolidated Total | $1,138.6 | $955.5 | 19.2% | $91.9 | $54.2 | 69.6% | Note 5. Property, Plant, and Equipment This note details Arcosa's property, plant, and equipment, goodwill, and intangible assets, including changes from acquisitions Property, Plant, and Equipment, Net | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | Change (%) | | :----- | :-------------------------- | :------------------------------ | :------------------- | :--------- | | Property, plant, and equipment, net | $1,178.3 | $1,201.9 | $(23.6) | (2.0)% | - Goodwill increased to $950.9 million at June 30, 2022, from $934.9 million at December 31, 2021, primarily due to the acquisition of RAMCO[45] Intangible Assets, Net | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | Change (%) | | :----- | :-------------------------- | :------------------------------ | :------------------- | :--------- | | Intangible assets, net | $266.8 | $220.3 | $46.5 | 21.1% | | Permits | $141.5 | $87.5 | $54.0 | 61.7% | Note 7. Debt This note provides details on Arcosa's debt structure, including revolving credit facility, term loan, senior notes, and compliance with covenants Total Debt (June 30, 2022 vs. December 31, 2021) | Metric | June 30, 2022 (in millions) | December 31, 2021 (in millions) | Change (in millions) | Change (%) | | :----- | :-------------------------- | :------------------------------ | :------------------- | :--------- | | Total Debt | $713.0 | $679.5 | $33.5 | 4.9% | | Revolving credit facility | $155.0 | $125.0 | $30.0 | 24.0% | | Term loan | $142.5 | $144.4 | $(1.9) | (1.3)% | | Senior notes (4.375% due April 2029) | $400.0 | $400.0 | $0.0 | 0.0% | - As of June 30, 2022, Arcosa had $155.0 million of outstanding loans under its revolving credit facility, with $316.5 million available for borrowing[49] - The company was in compliance with all financial covenants[49] - An interest rate swap instrument, effective January 2, 2019, and expiring in 2023, hedges $100 million of borrowings at a fixed LIBOR component of 2.71%[53] - As of June 30, 2022, the interest rate swap was recorded as a $0.3 million asset[53] Note 8. Leases This note presents Arcosa's lease obligations, distinguishing between operating and finance leases, and related assets and liabilities Present Value of Net Minimum Lease Obligations (June 30, 2022) | Lease Type | Amount (in millions) | | :--------- | :------------------- | | Operating Leases | $33.1 | | Finance Leases | $21.3 | Total Lease Assets and Liabilities (June 30, 2022) | Category | Amount (in millions) | | :------- | :------------------- | | Total lease assets | $54.3 | | Total lease liabilities | $54.4 | Note 9. Other, Net This note details other net income and expense items, including interest income and foreign currency exchange transactions Other, Net (Income) Expense (Three Months Ended June 30) | Item | 2022 (in millions) | 2021 (in millions) | | :--- | :----------------- | :----------------- | | Interest income | $0.0 | $(0.1) | | Foreign currency exchange transactions | $0.5 | $(0.1) | | Other, net (income) expense | $0.4 | $(0.3) | Other, Net (Income) Expense (Six Months Ended June 30) | Item | 2022 (in millions) | 2021 (in millions) | | :--- | :----------------- | :----------------- | | Interest income | $(0.1) | $(0.1) | | Foreign currency exchange transactions | $1.5 | $0.5 | | Other, net (income) expense | $1.3 | $0.2 | Note 10. Income Taxes This note explains Arcosa's effective tax rates and the factors influencing changes, including deferred payroll taxes Effective Tax Rates | Period | 2022 | 2021 | | :----- | :--- | :--- | | Three months ended June 30 | 20.6% | 16.8% | | Six months ended June 30 | 21.8% | 19.0% | - The increase in the effective tax rate for 2022 is primarily due to lower deductions on compensation-related items and a one-time benefit from state tax law changes in the prior periods[61] - As of June 30, 2022, Arcosa deferred $5.4 million in payroll-related taxes in accordance with the CARES Act, expected to be paid during the year ended December 31, 2022[61] Note 11. Employee Retirement Plans This note outlines Arcosa's contributions to defined contribution and multiemployer employee retirement plans Employee Retirement Plan Contributions (Three Months Ended June 30) | Plan Type | 2022 (in millions) | 2021 (in millions) | Change (in millions) | Change (%) | | :-------- | :----------------- | :----------------- | :------------------- | :--------- | | Defined contribution plans | $3.6 | $2.6 | $1.0 | 38.5% | | Multiemployer plan | $0.4 | $0.6 | $(0.2) | (33.3)% | | Total | $4.0 | $3.2 | $0.8 | 25.0% | Employee Retirement Plan Contributions (Six Months Ended June 30) | Plan Type | 2022 (in millions) | 2021 (in millions) | Change (in millions) | Change (%) | | :-------- | :----------------- | :----------------- | :------------------- | :--------- | | Defined contribution plans | $6.8 | $5.3 | $1.5 | 28.3% | | Multiemployer plan | $0.8 | $1.0 | $(0.2) | (20.0)% | | Total | $7.6 | $6.3 | $1.3 | 20.6% | Note 12. Accumulated Other Comprehensive Loss This note details the components and changes in Arcosa's accumulated other comprehensive loss, including derivative gains Accumulated Other Comprehensive Loss (AOCL) Balances | Date | AOCL (in millions) | | :--- | :----------------- | | December 31, 2021 | $(19.3) | | June 30, 2022 | $(16.3) | - The improvement in AOCL from $(19.3) million to $(16.3) million for the six months ended June 30, 2022, was primarily driven by $2.3 million in unrealized gains on derivative financial instruments, partially offset by currency translation adjustments[64] Note 13. Stock-Based Compensation This note reports Arcosa's stock-based compensation expense for the three and six months ended June 30, 2022 and 2021 Stock-Based Compensation Expense | Period | 2022 (in millions) | 2021 (in millions) | Change (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :------------------- | :--------- | | Three months ended June 30 | $5.7 | $4.1 | $1.6 | 39.0% | | Six months ended June 30 | $10.1 | $8.8 | $1.3 | 14.8% | Note 14. Earnings Per Common Share This note presents Arcosa's basic and diluted earnings per common share for the three and six months ended June 30, 2022 and 2021 Earnings Per Common Share (Three Months Ended June 30) | Metric | 2022 | 2021 | Change (%) | | :----- | :--- | :--- | :--------- | | Basic EPS | $0.80 | $0.43 | 86.0% | | Diluted EPS | $0.79 | $0.43 | 83.7% | Earnings Per Common Share (Six Months Ended June 30) | Metric | 2022 | 2021 | Change (%) | | :----- | :--- | :--- | :--------- | | Basic EPS | $1.22 | $0.76 | 60.5% | | Diluted EPS | $1.21 | $0.75 | 61.3% | Note 15. Contingencies This note discloses Arcosa's involvement in various claims and lawsuits, including estimated loss ranges and accruals - Arcosa is involved in various claims and lawsuits, with a reasonably possible loss range of $0.3 million to $0.4 million as of June 30, 2022[69] - Total accruals for these contingencies, including environmental liabilities, amounted to $0.9 million[69] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Arcosa's financial condition, results of operations, liquidity, and capital resources for the quarter ended June 30, 2022 Company Overview This section introduces Arcosa as a Dallas-based provider of infrastructure-related products and solutions across North America - Arcosa, Inc. is a Dallas-based provider of infrastructure-related products and solutions, serving construction, engineered structures, and transportation markets in North America[73] - The company was incorporated in 2018 as an independent, publicly-traded entity following its separation from Trinity Industries, Inc[73] Potential Impact of COVID-19 on our Business This section discusses the ongoing operational status of Arcosa's critical infrastructure businesses and the unpredictable impact of COVID-19 - Arcosa's critical infrastructure businesses have continued to operate throughout the COVID-19 pandemic, with a focus on employee health and safety[74] - The company estimates incurring less than $500 thousand per quarter in incremental costs related to COVID-19 protocols, with no material impact on plant productivity anticipated[76] - The overall impact of the COVID-19 pandemic on Arcosa's business, liquidity, and financial condition remains unpredictable due to numerous evolving factors[75] - Market Outlook: Construction Products show resilience with improved public/private construction; Engineered Structures has a healthy backlog but the wind industry faces near-term uncertainty; Transportation Products sees low barge orders but increasing steel component demand[76] Executive Overview This section highlights key strategic actions, including the RAMCO acquisition and storage tanks divestiture, and summarizes financial performance - In May 2022, Arcosa acquired Recycled Aggregate Materials Company, Inc. (RAMCO) for $75.4 million, expanding its Construction Products segment[77] - Arcosa entered an agreement on April 25, 2022, to sell its storage tanks business for $275 million in cash, with closing expected in the second half of 2022[78] Financial Operations and Highlights (Three Months Ended June 30, 2022 vs. 2021) | Metric | 2022 (in millions) | 2021 (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Revenues | $602.8 | $515.1 | 17.0% | | Operating Profit | $57.2 | $31.3 | 82.7% | | Net Income | $39.0 | $20.8 | 87.5% | | SG&A as % of Revenue | 11.0% | 12.9% | (1.9) pp | | Effective Tax Rate | 20.6% | 16.8% | 3.8 pp | Unsatisfied Performance Obligations (Backlog) as of June 30, 2022 | Segment | Product Line | Backlog (in millions) | % Expected to be Delivered in 2022 | | :------ | :----------- | :-------------------- | :--------------------------------- | | Engineered Structures | Utility, wind, and related structures | $410.1 | 83% | | Engineered Structures | Storage tanks | $20.2 | 100% | | Transportation Products | Inland barges | $131.8 | 50% | Results of Operations This section analyzes Arcosa's consolidated and segment-specific revenue and operating profit performance for the reported periods - Consolidated revenues increased by 17.0% to $602.8 million for the three months ended June 30, 2022, and by 19.2% to $1,138.6 million for the six months ended June 30, 2022, driven by higher revenues across all segments[83][84] - Consolidated operating profit increased by 82.7% to $57.2 million for the three months and by 69.6% to $91.9 million for the six months ended June 30, 2022[88][89] - This operating profit growth was primarily due to higher margins from increased pricing in Engineered Structures and higher volumes in Construction Products and steel components[88][89] - Operating costs increased by 12.8% and 16.1% for the three and six months ended June 30, 2022, respectively, mainly due to higher volumes, fuel prices, and steel costs[86][87] Construction Products This section details revenue and operating profit growth for the Construction Products segment, driven by pricing, volume, and acquisitions - Revenues increased 20.2% to $245.9 million for the three months and 27.9% to $457.4 million for the six months ended June 30, 2022, driven by strong pricing and volume gains in aggregates[93][94][95] - Acquisitions contributed approximately 5% and 15% to revenue growth for the three and six months, respectively[93][94][95] - Operating profit increased 57.0% to $28.1 million for the three months and 32.9% to $44.8 million for the six months ended June 30, 2022, primarily due to increased volumes and reduced amortization of fair value mark-up of inventory[93][94][95] Engineered Structures This section analyzes revenue and operating profit increases in Engineered Structures, attributed to higher pricing and improved margins - Revenues increased 10.8% to $268.6 million for the three months and 15.5% to $519.1 million for the six months ended June 30, 2022, primarily due to increased pricing across all product lines, driven by higher steel prices[97][98][99] - Operating profit increased 42.6% to $41.5 million for the three months and 49.8% to $69.8 million for the six months ended June 30, 2022[97][98][99] - This operating profit growth was driven by higher revenues, improved margins in utility structures, and a $1.6 million gain on a facility sale[97][98][99] - Backlog for utility, wind, and related structures was $410.1 million as of June 30, 2022, with 83% expected to be delivered in 2022[100] - Storage tank backlog was $20.2 million, all expected in 2022[100] Transportation Products This section reviews revenue and operating profit changes in Transportation Products, primarily influenced by steel component volumes - Revenues increased 29.5% to $88.3 million for the three months ended June 30, 2022, driven by a 79.7% increase in steel component revenues[102][103][104] - For the six months, revenues increased 9.2% to $162.1 million, with steel components up 47.7% but inland barges down 5.7%[102][103][104] - Operating profit increased 169.2% to $3.5 million for the three months and 14.8% to $6.2 million for the six months ended June 30, 2022, primarily due to higher steel component volumes[102][103][104] - Backlog for inland barges was $131.8 million as of June 30, 2022, with approximately 50% expected to be delivered in 2022[105] Corporate This section examines the decrease in corporate overhead costs, mainly due to reduced acquisition and divestiture-related expenses Corporate Overhead Costs | Period | 2022 (in millions) | 2021 (in millions) | Change (%) | | :----- | :----------------- | :----------------- | :--------- | | Three months ended June 30 | $15.9 | $17.0 | (6.5)% | | Six months ended June 30 | $28.9 | $31.5 | (8.3)% | - The decrease in corporate overhead costs was primarily due to lower acquisition and divestiture-related expenses ($2.5 million in Q2 2022 vs. $5.8 million in Q2 2021; $3.4 million in H1 2022 vs. $7.5 million in H1 2021)[108] Liquidity and Capital Resources This section discusses Arcosa's cash flow sources, capital expenditures, debt, and share repurchase activities - Arcosa's primary liquidity sources include cash flow from operations, existing cash balance, and availability under its $500.0 million revolving credit facility[109] Cash Flow Summary (Six Months Ended June 30) | Activity | 2022 (in millions) | 2021 (in millions) | Change (in millions) | | :------- | :----------------- | :----------------- | :------------------- | | Net cash provided by operating activities | $111.2 | $51.1 | $60.1 | | Net cash required by investing activities | $(98.7) | $(419.1) | $320.4 | | Net cash required by financing activities | $(6.0) | $372.5 | $(378.5) | - Capital expenditures for the six months ended June 30, 2022, were $52.9 million[110] - Full-year 2022 capital expenditures are expected to be $120 million to $140 million, including $70 million to $90 million for maintenance and $50 million for growth[110] - As of June 30, 2022, Arcosa had $155.0 million outstanding under its revolving credit facility, with $316.5 million available for borrowing, and was in compliance with all financial covenants[112] - The company declared a quarterly cash dividend of $0.05 per share in May 2022[113] - Under its share repurchase program, 298,629 shares were repurchased for $15.0 million during the six months ended June 30, 2022, with $25.7 million remaining authorized[113] Recent Accounting Pronouncements This section addresses Arcosa's evaluation of new accounting standards and their expected impact on financial statements - Arcosa is evaluating ASU 2020-04 (Reference Rate Reform) and ASU 2021-08 (Business Combinations: Accounting for Contract Assets and Liabilities) but does not expect either to have a material impact on its consolidated financial statements[28] Forward-Looking Statements This section highlights the inherent risks and uncertainties associated with Arcosa's forward-looking statements, including market and operational factors - The report contains forward-looking statements subject to various risks and uncertainties, including the impact of the COVID-19 pandemic, market conditions, cyclical industries, weather, competition, and the ability to integrate acquisitions or divest businesses[118] - Other potential factors include product price changes, raw material availability and costs, inflation, interest rates, taxes, and legal/regulatory issues[118] - Arcosa undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made[121] Item 3. Quantitative and Qualitative Disclosures about Market Risk Arcosa reported no material changes in its market risks since December 31, 2021, as detailed in its Annual Report on Form 10-K - There has been no material change in Arcosa's market risks since December 31, 2021[122] Item 4. Controls and Procedures Arcosa's management concluded that its disclosure controls and procedures were effective as of June 30, 2022, with no material changes in internal control over financial reporting, excluding the recently acquired RAMCO business - The Company's Chief Executive and Chief Financial Officers concluded that disclosure controls and procedures were effective as of June 30, 2022[123] - There have been no material changes in the Company's internal control over financial reporting during the period[124] - The assessment of internal control over financial reporting excludes the RAMCO business, acquired in May 2022, which represents approximately 3% of consolidated total assets and less than 1% of consolidated revenues[124] PART II - OTHER INFORMATION This section covers other required disclosures, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings Information regarding Arcosa's legal proceedings is cross-referenced to Note 15 of the Consolidated Financial Statements - Refer to Note 15 of the Consolidated Financial Statements for details regarding legal proceedings[126] Item 1A. Risk Factors Arcosa reported no material changes to the risk factors previously disclosed in its 2021 Annual Report on Form 10-K - There have been no material changes in the Company's risk factors from those set forth in its 2021 Annual Report on Form 10-K[127] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the quarter ended June 30, 2022, Arcosa repurchased 298,629 shares of common stock for $15.0 million under its authorized program, with $25.7 million remaining for repurchase Share Repurchase Activity (Quarter Ended June 30, 2022) | Period | Number of Shares Purchased | Average Price per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that Yet Be Purchased Under the Plans or Programs | | :----- | :------------------------- | :---------------------- | :------------------------------------------------------------------------------- | :---------------------------------------------------------------------------------------------------- | | April 1 - April 30, 2022 | 711 | $56.81 | — | $40,625,892 | | May 1 - May 31, 2022 | 373,922 | $52.15 | 191,683 | $30,634,738 | | June 1 - June 30, 2022 | 107,539 | $46.59 | 106,946 | $25,656,442 | | Total | 482,172 | $50.91 | 298,629 | $25,656,442 | - The share repurchase program, authorized in December 2020 for $50 million, is effective from January 1, 2021, through December 31, 2022[128][129] - As of June 30, 2022, $25.7 million remained under the program[128][129] Item 3. Defaults Upon Senior Securities This item is not applicable to Arcosa for the reported period - Not applicable[129] Item 4. Mine Safety Disclosures Information concerning mine safety violations and other regulatory matters is provided in Exhibit 95 to this Form 10-Q - Mine safety disclosures are included in Exhibit 95 to this Form 10-Q[130] Item 5. Other Information There is no other information to report under this item - None[130] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, supplemental indentures, credit agreement amendments, equity purchase agreements, stock unit agreements, certifications, and XBRL documents - Exhibits include Restated Certificate of Incorporation, Amended and Restated Bylaws, Second Supplemental Indenture, Subsidiary Guaranty Supplements, Amendment Number Two to the Amended and Restated Credit Agreement, Equity Purchase Agreements, Form of Restricted Stock Unit Agreement, Form of Performance-Based Restricted Stock Unit Grant Agreement, CEO and CFO Certifications, Mine Safety Disclosure Exhibit, and Inline XBRL documents[132] SIGNATURES This section confirms the official signing of the report by Arcosa, Inc.'s Chief Financial Officer - The report was duly signed on behalf of Arcosa, Inc. by Gail M. Peck, Chief Financial Officer, on August 4, 2022[134]