Financial Data and Key Metrics Changes - Company reported a record quarter with an 18% increase in revenue and a 42% growth in adjusted EBITDA year over year, excluding the divested Steel Components business [6][9] - Adjusted EBITDA margin reached a record 20.9%, up 360 basis points [7] - Operating cash flow improved to $61 million, with free cash flow for the quarter at $39 million [20][21] Business Line Data and Key Metrics Changes - Construction Products segment saw a 28% increase in revenues and a 44% increase in adjusted segment EBITDA, driven by the Stivola acquisition [10] - Aggregates business reported a 15% increase in freight adjusted revenues and a 21% increase in adjusted cash gross profit, with total volumes up 6% [12] - Engineered Structures segment revenue increased by 7%, with adjusted segment EBITDA rising 31% and margin expanding to 18.7% [15][16] - Transportation Products revenues were up 18%, with adjusted segment EBITDA increasing by 10% [18] Market Data and Key Metrics Changes - The company noted strong pricing gains in the aggregates business, driving a 15% increase in adjusted cash gross profit per ton [7] - The backlog for utility and related structures reached a record $450 million, up 9% from the start of the year [16] - Wind tower backlog was reported at almost $600 million, down 23% from the start of the year [17] Company Strategy and Development Direction - Company is focused on strengthening growth businesses, streamlining the portfolio, and reducing cyclicality while expanding margins [5] - The strategic transformation of the portfolio is aimed at creating a more focused and resilient platform for long-term growth [23] - The company plans to convert a facility from wind towers to utility structures to meet increasing demand in the power market [28][92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong long-term prospects for the construction business despite recent weather-related challenges [26] - The company anticipates a 30% growth in EBITDA for 2025, excluding the divested Rail Components business [9][24] - Management highlighted the positive sentiment from customers regarding upcoming projects and the overall market environment [71] Other Important Information - The company is on track to reach a target leverage range of 2 to 2.5 times within the next three quarters [21] - The anticipated capital expenditures for the full year are now projected to be between $145 million and $155 million [20] Q&A Session Summary Question: Discussion on updated guidance range and segment basis - Management indicated strong growth expectations for 2025, maintaining the midpoint of guidance and tightening the range [35][36] Question: Drivers of raised aggregates ASP guidance - Management noted an 8% growth in ASP for the quarter, leading to a year-to-date growth of about 10% [40][41] Question: Wind tower business capacity for new orders - Management confirmed that three plants are operating at about 60% capacity, with the ability to increase production if needed [48] Question: Aggregates gross profit per ton growth expectations - Management expects continued good gross profit per ton growth in the second half, benefiting from the Stivola acquisition [54] Question: Acquisition pipeline and opportunities - Management stated there is a solid pipeline of bolt-on acquisitions and plans to deploy capital as leverage ratios improve [56][58] Question: Policy clarity and its impact on wind tower business - Management emphasized the importance of clarity in policy for the wind industry, which has led to increased customer confidence [62][66] Question: Customer-driven delays due to funding - Management clarified that the weakness in organic growth was primarily due to weather, not project delays [70] Question: Geographies showing multifamily demand improvement - Management highlighted improvements in Texas and New Jersey for multifamily demand [73]

Financial Performance Highlights - Arcosa's Adjusted EBITDA grew by 42%, outpacing revenue growth of 18%[9] - The company achieved a record consolidated Adjusted EBITDA Margin of 20.9%, an increase of 360 basis points[9] - Pricing in aggregates increased by 8%, leading to a 15% gain in cash unit profitability[9] - Q2 2025 revenues increased by 18% from $626.6 million to $736.9 million[20] - Adjusted EBITDA increased by 37% from $112.7 million to $154.2 million[20] Strategic Initiatives and Outlook - Arcosa is targeting a long-term net leverage ratio of 2.0-2.5x within the next three quarters[9] - The company maintains full-year revenue guidance, anticipating a 17% increase[9] - Adjusted EBITDA is expected to increase by 30%[9] - The company expects Adjusted EBITDA growth to be roughly 40% organic and 60% inorganic[9] Segment Performance - Construction Products' Adjusted Segment EBITDA increased by 44% from $69.7 million to $100.4 million[23] - Engineered Structures' Adjusted Segment EBITDA increased by 31% from $41.7 million to $54.8 million[26] - Transportation Products' revenues increased by 18%[28]

Core Insights - Arcosa reported a record non-GAAP EPS of $1.27, exceeding analyst expectations of $1.05, while GAAP revenue was $736.9 million, below the consensus estimate of $754.2 million [1][2] - The company achieved a non-GAAP Adjusted EBITDA margin of 20.9%, reflecting successful integration of the Stavola acquisition and operational improvements [1][9] - Despite strong earnings growth, organic sales growth showed softness in certain areas, particularly in construction products [1][5] Financial Performance - Non-GAAP EPS increased by 39.6% year-over-year from $0.91 in Q2 2024 [2] - GAAP revenue grew by 10.9% year-over-year from $664.7 million in Q2 2024 [2] - Adjusted EBITDA rose to $154.2 million, a 36.8% increase from $112.7 million in Q2 2024 [2] - Free cash flow turned positive at $39.2 million, compared to a negative $6.1 million in Q2 2024 [2] - Adjusted EBITDA margin improved by 3.9 percentage points from 17.0% in Q2 2024 [2] Business Overview - Arcosa operates in construction materials, engineered structures, and transportation products, with a focus on infrastructure markets [3] - The company has significant positions in natural and recycled aggregates and engineered steel structures for power delivery and renewable energy [3] Strategic Focus - Recent strategic initiatives include acquisitions to accelerate growth, alignment with infrastructure spending, and managing raw material price volatility [4] - The $1.2 billion Stavola acquisition has been pivotal in expanding Arcosa's aggregates platform, particularly in the northeast U.S. [4] Segment Performance - The Construction Products segment saw a revenue increase of 28%, with the Stavola acquisition contributing $90.3 million [6] - Engineered Structures revenue grew by 7%, driven by demand for electric grid infrastructure and wind energy [7] - The Transportation Products segment reported an 18% revenue increase, supported by higher tank barge deliveries [8] Future Outlook - Management revised FY2025 revenue guidance to between $2.85 and $2.95 billion, and adjusted EBITDA to range from $555 to $585 million [10] - The company aims to reduce its net debt to adjusted EBITDA ratio below 2.5x within the next three quarters [10] - Strong backlog in utility structures supports visibility for the engineered structures segment, while federal infrastructure spending underpins demand for aggregates [11]

Arcosa (ACA) Conference Summary - June 12, 2025 Company Overview - Arcosa is a Dallas-based company with LTM March revenues of approximately $2.6 billion and adjusted EBITDA of about $465 million [5][6] - The company operates in three segments: construction products, engineered structures, and transportation products [5][6] - Arcosa has over 140 locations, primarily in the US, with only one mine in Canada and two manufacturing plants in Mexico [6] Financial Performance - Adjusted EBITDA has increased from $185 million at the time of spin-off to $530 million LTM March, driven by organic initiatives and $3 billion in core infrastructure acquisitions [7] - Construction products segment accounts for 43% of revenues and 59% of adjusted EBITDA, with a 25% adjusted EBITDA margin [7][8] - Engineered structures segment contributes 42% of revenues and 31% of adjusted EBITDA, with a 17% adjusted EBITDA margin [9] - Transportation products segment is the smallest, accounting for less than 15% of revenues and about 10% of adjusted EBITDA, with mid-teen margins [9][10] Strategic Initiatives - The company aims to grow in attractive markets while reducing cyclicality and complexity, improving return on invested capital, and maintaining a healthy balance sheet [12] - The $1.2 billion acquisition of Stivola expanded Arcosa's aggregates footprint into the New York-New Jersey MSA, enhancing exposure to less cyclical infrastructure-led markets [12][13] - The company expects revenue growth of 17% and adjusted EBITDA growth of 30% in 2025, supported by both acquisitions and organic operations [13][14] Market Dynamics - Arcosa has minimal direct tariff impacts due to its US-centric operations, with most revenues sourced domestically [17][18] - The company is monitoring indirect impacts from agricultural tariffs and steel prices, which could affect customer sentiment [20][21] Segment Insights Construction Products Segment - The integration of Stivola is progressing well, with no negative surprises reported [24][25] - Stivola's seasonality affects EBITDA, with Q1 typically being breakeven or slightly negative due to winter weather impacting asphalt work [28][30] - Pricing trends in aggregates are healthy, with Stivola contributing positively to average selling prices (ASP) due to higher prices in the New Jersey area [33][34] Engineered Structures Segment - The segment has shown strong performance, driven by utility structures and wind towers, with double-digit unit growth reported [46][51] - Demand is supported by grid hardening and increased electrification, with expectations for load growth over the next decade [52][53] Policy and Regulatory Environment - The company is optimistic about the wind business, with a positive demand outlook linked to the Inflation Reduction Act and potential policy clarity from the government [61][62] - Arcosa is focused on maintaining a stable policy environment to support growth in renewable energy sectors [60][63] Deleveraging Strategy - Following the Stivola acquisition, Arcosa aims to reduce leverage from a pro forma 3.7 times net debt to EBITDA to a target of 2 to 2.5 times within 18 months [65][66] - The company ended the year at 2.9 times and expects further deleveraging in the latter half of the year [66] Future Outlook - Arcosa's strategy remains consistent, focusing on simplifying its portfolio and growing in segments with strong long-term growth drivers [71][72] - The company aims to increase the share of construction products in its adjusted EBITDA, potentially evolving into a two-segment company in the future [72][73]

Financial Data and Key Metrics Changes - The company reported a consolidated adjusted EBITDA growth of 26%, outpacing a 12% revenue growth in the first quarter of 2025, with a margin expansion of 190 basis points [6][21] - The net debt to adjusted EBITDA ratio was maintained at 2.9 times, with expectations to reduce leverage to a target of 2 to 2.5 times over the next twelve months [7][19] Business Line Data and Key Metrics Changes - **Construction Products**: Revenues increased by 5%, driven by the Stabola acquisition, but organic revenues declined by 6% due to lower freight revenues and divestitures [11][12] - **Engineered Structures**: Revenues increased by 23%, largely due to higher wind tower volumes and the inorganic impact from the Amaron acquisition, with adjusted segment EBITDA increasing by 90% [15][16] - **Transportation Products**: Revenues were up 6%, with adjusted segment EBITDA increasing by 13%, driven by higher tank barge volumes [17] Market Data and Key Metrics Changes - The aggregates business represented 69% of construction materials revenues, with average organic pricing up 7% year-over-year and total pricing up 10% due to the Stabola acquisition [10][12] - The company expects continued investment in U.S. infrastructure to benefit operations, with strong demand conditions in various end markets [8][9] Company Strategy and Development Direction - The company is focused on executing its strategic vision, with a commitment to reducing leverage and enhancing operational efficiency [5][7] - The integration of the Stabola acquisition is expected to contribute positively in the second quarter, with a strong outlook for construction products and engineered structures [20][23] - The company anticipates sustained demand growth in utility structures due to increased electrification and renewable energy needs [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving macroeconomic environment, citing strong demand in most end markets and solid visibility from backlogs [8][9] - The company expects a strong 2025, reiterating full-year guidance with anticipated revenue of $2.9 billion and adjusted EBITDA of $570 million, reflecting a 17% and 30% increase, respectively [21][22] Other Important Information - The company reaffirmed its capital expenditure guidance of $145 to $165 million for the full year, with a focus on maintenance CapEx [20] - Free cash flow for the quarter was negative $30 million, but management expects improvement in the second half of the year [20] Q&A Session Summary Question: Can you elaborate on the wind tower contribution to sales and profit dollars in the quarter? - Management highlighted strong demand and volume growth in utility structures, with the wind tower facility ramping up effectively, contributing positively to margins [36][38] Question: What are the expectations for the construction products business moving forward? - Management indicated no surprises in the Stabola operations, with good demand and orders expected to improve significantly in the second quarter [66][71] Question: How is the company managing pricing versus volume declines in aggregates? - The company is focusing on margin rather than volume, with local decision-making to balance cost absorption and pricing strategies [92][93] Question: What is the outlook for the housing market and its impact on the business? - Management expects stabilization and a potential recovery in the housing market in the second half of the year, although not a booming market [104][105]

FIRST QUARTER 2025 EARNINGS CONFERENCE CALL FORWARD LOOKING STATEMENTS 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," "guid ...

Financial Data and Key Metrics Changes - In 2024, Arcosa, Inc. achieved double-digit organic growth and significant margin expansion, driven by higher-margin businesses and divestitures of non-core assets [8][9] - The company generated nearly $200 million in free cash flow in Q4 2024, allowing for full repayment of its revolver, resulting in a net leverage of 2.9 times [16][29] - Full-year 2024 adjusted EBITDA growth was split evenly between organic and inorganic drivers, with a margin expansion of 408 basis points in Q4 [15][29] Business Line Data and Key Metrics Changes - Construction Products segment revenues increased by 31% in Q4, with adjusted segment EBITDA growing by 52%, largely due to the STAVOLA acquisition [18][19] - Engineered Structures revenues increased by 11%, with adjusted segment EBITDA rising by 41%, driven by higher wind tower volumes and the Ameren acquisition [23][24] - Transportation Products revenues were up 28%, with adjusted segment EBITDA doubling, supported by higher tank barge volumes and improved efficiencies [25][26] Market Data and Key Metrics Changes - The construction materials business accounted for approximately 62% of adjusted EBITDA, nearly double the contribution from 2018 [14] - The company ended the year with a combined backlog for utility, wind, and related structures of $1.2 billion, expecting to deliver 64% during 2025 [25] Company Strategy and Development Direction - Arcosa, Inc. is focused on growing in the U.S. market, supported by long-term infrastructure-led investments, while simplifying its portfolio through divestitures [34][36] - The company anticipates growth from construction materials, utility structures, and cyclical businesses, alongside contributions from organic projects and acquisitions [37][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for renewables, particularly wind energy, and the potential for infrastructure spending to drive growth [65][66] - The company expects revenues in 2025 to range from $2.8 billion to $3 billion, with adjusted EBITDA between $545 million and $595 million, implying 30% growth at the midpoint [38] Other Important Information - The company plans to reduce capital expenditures in 2025 to between $145 million and $165 million, focusing on maintenance and completing ongoing projects [30][88] - Depreciation, depletion, and amortization expenses are expected to range from $230 million to $235 million for 2025, primarily due to the STAVOLA acquisition [32][104] Q&A Session Summary Question: Impact of steel prices on revenues - Management indicated that the decline in steel prices primarily impacted engineered structures, resulting in a revenue miss of about $25 million in Q4 [55][56] Question: Wind outlook and customer sentiment - Management noted that customer demand for wind remains strong, with expectations for a flat year in 2026, pending regulatory clarity [66][68] Question: Construction products volume outlook - Management expects strong double-digit growth in total volumes for construction products, with organic volumes anticipated to be flattish to slightly up [80][85] Question: Contribution of organic projects to performance - Management highlighted that several organic projects completed in 2024 are expected to contribute positively to performance in 2025, including the concrete poles factory and wind tower facility [90][92]

Financial Data and Key Metrics Changes - In 2024, the company achieved record full-year revenues, adjusted EBITDA, and margin, with significant margin expansion driven by higher-margin business acquisitions and organic improvements [10][11] - The company generated robust free cash flow of nearly $200 million in Q4, enabling full repayment of its revolver, resulting in net leverage of 2.9 times [11][19] - Full-year 2024 free cash flow was $330 million, up from $94 million in the previous year [19] Business Line Data and Key Metrics Changes - Construction Products segment revenues increased by 31% in Q4, with adjusted segment EBITDA growing by 52%, largely due to the acquisition of Stavola [13] - Engineered Structures revenues increased by 11%, driven by higher wind tower volumes and the contribution from Ameron, with adjusted segment EBITDA increasing by 41% [16][17] - Transportation Products revenues were up 28%, with adjusted segment EBITDA doubling, primarily due to higher tank barge volumes and improved efficiencies [17] Market Data and Key Metrics Changes - The company noted strong underlying demand fundamentals in its growth businesses, particularly in Construction Materials and Utility Structures [25][27] - The backlog for Utility Wind and related structures was $1.2 billion, with expectations to deliver 64% during 2025 [17] - The inland river barge fleet is experiencing pent-up replacement needs due to underinvestment, positioning the company well for 2025 [32] Company Strategy and Development Direction - The company is focused on growing in the U.S. market, supported by long-term infrastructure-led investments, with a strategy of optimizing its portfolio and reducing complexity [22][25] - The company anticipates growth from four sources in 2025: growth businesses, cyclical business backlogs, completed organic projects, and acquisitions [25][26] - The company plans to prioritize debt reduction and finish ongoing organic projects to prepare for continued growth [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for renewables, particularly wind energy, and the need for infrastructure investment in the U.S. [48][49] - The company is monitoring trade policies and potential regulatory changes that could impact operations, but remains confident in its positioning [23][24] - Management expects significant adjusted EBITDA growth in 2025, with a mix of organic and inorganic growth drivers [26][28] Other Important Information - The company completed the sale of its steel components business and focused on pruning underperforming assets during 2024 [9][10] - The company expects depreciation, depletion, and amortization expenses to range from $230 million to $235 million for 2025, primarily due to recent acquisitions [21][80] Q&A Session Summary Question: Impact of steel prices on revenues - Management indicated that the decline in steel prices impacted revenues, particularly in the Engineered Structures segment, with a revenue miss of about $25 million attributed to steel prices [38][39] Question: Wind outlook and customer sentiment - Management noted that customer demand for wind remains strong, with optimism about future growth despite regulatory uncertainties [48][50] Question: Construction Products volume outlook - Management expects organic volumes in Construction Products to be flattish to slightly up in 2025, with strong double-digit growth anticipated overall [60][65] Question: CapEx expectations - Management confirmed a decrease in CapEx for 2025 to between $145 million and $165 million, focusing on maintenance and completing ongoing projects [66][68] Question: Contribution of organic projects - Management highlighted that organic projects completed in 2024, such as the concrete pulp factory and wind tower plant, are expected to contribute positively to performance in 2025 [69][70]