– Solid Growth in Construction and Transportation Businesses
More Than Offset Anticipated Second Quarter Mix Headwinds in
Utility Structures
– Disciplined Working Capital Management Led to 47% Increase in
Operating Cash Flow
– Raised Low End of Full Year 2023 Revenue and Adjusted EBITDA
Guidance Reflecting Strong First-Half Results and Increased
Confidence
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, 2023.
On October 3, 2022, the Company completed the divestiture of its
storage tanks business. Financial results for the storage tanks
business were historically included in the Engineered Structures
segment as part of continuing operations until the date of sale.
The tables below include additional financial information to
facilitate the comparison to prior year's results.
Second Quarter Highlights
Three Months Ended June
30,
2023
2022
% Change
($ in millions, except per
share amounts)
Revenues
$
584.8
$
602.8
(3
)%
Revenues, excluding impact from divested
business(1)
$
584.8
$
540.9
8
%
Net income
$
40.9
$
39.0
5
%
Adjusted Net Income(2)
$
37.3
$
40.9
(9
)%
Diluted EPS
$
0.84
$
0.79
6
%
Adjusted Diluted EPS(2)
$
0.76
$
0.83
(8
)%
Adjusted EBITDA(2)
$
85.8
$
99.2
(14
)%
Adjusted EBITDA Margin(2)
14.7
%
16.5
%
(180 bps)
Adjusted EBITDA, excluding impact from
divested business(1)(2)
$
85.8
$
83.4
3
%
Adjusted EBITDA Margin, excluding impact
from divested business(1)(2)
14.7
%
15.4
%
(70 bps)
Net cash provided by operating
activities
$
127.6
$
86.7
47
%
Free Cash Flow(2)
$
75.6
$
68.3
11
%
bps - basis points
(1)
Excludes the impact of the storage tanks
business in the prior period.
(2)
Non-GAAP financial measure. See
reconciliation tables included in this release.
“I am pleased with Arcosa's second quarter performance, with
Adjusted EBITDA surpassing last year's record results, normalizing
for the divestiture of our storage tanks business,” said Antonio
Carrillo, President and Chief Executive Officer.
“In Construction Products, we continued to successfully advance
pricing, manage cost pressures, and drive solid unit profitability
in natural and recycled aggregates. However, overall Adjusted
Segment EBITDA margins were impacted by operating inefficiencies in
our specialty materials business that we are addressing.
“Within Engineered Structures, our wind towers business
performed well on a low level of volume, benefiting in part from
the recognition of tax credits associated with the Inflation
Reduction Act. Anticipated product mix headwinds in our utility
structures business resulted in lower overall segment profitability
in-line with our expectation. We expect a stronger second half and
remain optimistic about our future growth potential. The demand
environment across the segment continues to be very robust, and we
are in the early stages of a multi-year expansion in the wind
industry.
“Adjusted Segment EBITDA in Transportation Products more than
doubled and margins expanded 530 basis points year-over-year,
underscoring the operating leverage inherent in these businesses as
volumes improve. We were pleased to obtain sufficient second
quarter orders to maintain our barge backlog and extend our
production visibility further into 2024 with improved pricing.”
Carrillo concluded, “Our strong cash conversion was a highlight
for the quarter. Free Cash Flow increased 11% year-over-year,
despite a near doubling in planned capital expenditures as we
invest to capture an expanded range of organic growth initiatives.
Our pipeline of acquisition and organic opportunities remain
attractive, and our solid balance sheet and strong liquidity
position provide ample flexibility for strategic capital
allocation.”
2023 Outlook and Guidance
The Company made the following adjustments to its full year 2023
guidance:
- Increased the low end of its revenue guidance range to $2.25
billion from $2.20 billion, resulting in a full year range of $2.25
billion to $2.30 billion.
- Increased the low end of its Adjusted EBITDA guidance range to
$355 million from $345 million, resulting in a full year range of
$355 million to $370 million.
Commenting on the outlook, Carrillo concluded, “In light of
Arcosa's solid financial performance through the first half of the
year and improved visibility in our cyclical businesses, we have
increased confidence in our full-year outlook. As a result, we are
raising the low end of our 2023 revenue and Adjusted EBITDA
guidance range.
“As we look ahead, Arcosa is well-positioned for growth given
our broad exposure to infrastructure markets that we believe will
benefit from multi-year tailwinds. We remain committed to expanding
margin, generating strong cash flow and allocating capital to build
long-term shareholder value.”
Second Quarter 2023 Results and Commentary
Construction Products
Engineered Structures
- Comparability of segment results was impacted by the
divestiture of our storage tanks business. Second quarter 2022
revenues and Adjusted EBITDA for the storage tanks business were
$61.9 million and $15.8 million, respectively.
- Revenues for utility, wind, and related structures were flat as
higher volumes in our utility structures business were offset by
lower volumes in our wind tower business.
- Excluding the impact of the storage tanks business, Adjusted
Segment EBITDA decreased 17% to $28.1 million, and margins
decreased 270 basis points to 13.6%.
- Adjusted Segment EBITDA declined as anticipated due to lower
margins in our utility structures business driven by project mix
and a decrease in wind tower volumes, partially offset by the
recognition of $5.9 million in net benefit from Advanced
Manufacturing Production (“AMP”) tax credits in our wind towers
business.
- Order activity for utility and related structures was healthy
during the quarter with orders received keeping pace with
shipments. There were no new wind tower orders booked during the
quarter, however, customer inquiries continue to indicate strong
multi-year demand.
- At the end of the second quarter, the combined backlog for
utility, wind, and related structures was $1,507.4 million compared
to $410.1 million at the end of the second quarter of 2022.
Transportation Products
- Revenues were $113.0 million, up 28%. Barge revenues increased
35% and steel components revenues increased 17%, both driven by
higher volumes and pricing.
- Adjusted Segment EBITDA increased $8.1 million, or 108%, to
$15.6 million, representing a 13.8% margin compared to 8.5% in the
prior period. The increase was driven by operating leverage
associated with higher volumes and improved pricing.
- During the quarter, we received orders of approximately $81
million in our barge business, representing a book-to-bill of 1.1.
These orders are primarily for hopper barges for delivery in
2024.
- Barge backlog at the end of the quarter was $287.1 million
compared to $131.8 million at the end of the second quarter of
2022. We expect to deliver approximately 45% of our current backlog
in 2023.
Corporate and Other Financial Notes
- Excluding acquisition and divestiture-related costs, which have
been excluded from Adjusted EBITDA, corporate expenses increased to
$16.4 million in the second quarter compared to $13.4 million in
the prior year primarily driven by higher compensation-related
costs.
- Acquisition and divestiture-related costs were $0.3 million in
the second quarter compared to $2.5 million in the prior year.
- The effective tax rate for the second quarter was 12.0%
compared to 20.6% in the prior year. The decrease in the tax rate
was primarily due to AMP tax credits for our wind tower business,
which are excluded from taxable income, an increase in the excess
tax benefit related to equity compensation, and lower foreign
taxes.
Cash Flow and Liquidity
- Operating cash flow was $127.6 million during the second
quarter, an increase of $40.9 million year-over-year.
- A reduction in working capital resulted in a $41.0 million
source of cash for the quarter compared to the prior year's $7.7
million source of cash. The decrease in working capital was
primarily due to a reduction in receivables and an increase to
payables, offsetting higher inventory.
- Capital expenditures in the second quarter were $52.5 million,
up from $27.0 million in the prior year, as progress continued on
organic projects underway in Construction Products and Engineered
Structures.
- Free Cash Flow for the quarter was $75.6 million, up from $68.3
million in the prior year.
- We ended the quarter with total liquidity of $672.8 million,
including $197.9 million of cash, and Net Debt to Adjusted EBITDA
was 1.0X 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 4, 2023 to discuss second quarter 2023 results. 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 90544. An audio playback will be
available through 11:59 p.m. Eastern Time on August 18, 2023, by
dialing 800-839-2457 for domestic callers and 402-220-7217 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,” 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
the impact of the COVID-19 pandemic, or other similar outbreaks, on
Arcosa’s business; assumptions, risks and uncertainties regarding
achievement of the expected benefits of Arcosa’s spin-off from
Trinity Industries, Inc.; tax treatment of the spin-off; failure to
successfully integrate acquisitions or divest any 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; 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, 2022 and as may be revised and
updated by Arcosa's Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
Arcosa, Inc.
Condensed Consolidated Statements of
Operations
(in millions, except per share
amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenues
$
584.8
$
602.8
$
1,134.0
$
1,138.6
Operating costs:
Cost of revenues
463.7
482.9
904.3
922.6
Selling, general, and administrative
expenses
70.7
66.3
133.2
128.9
Gain on disposition of property, plant,
equipment, and other assets
(0.6
)
(3.6
)
(23.2
)
(4.8
)
Gain on sale of storage tanks business
—
—
(6.4
)
—
533.8
545.6
1,007.9
1,046.7
Operating profit
51.0
57.2
126.1
91.9
Interest expense
7.1
7.7
14.2
14.9
Other, net (income) expense
(2.6
)
0.4
(4.5
)
1.3
4.5
8.1
9.7
16.2
Income before income taxes
46.5
49.1
116.4
75.7
Provision for income taxes
5.6
10.1
19.8
16.5
Net income
$
40.9
$
39.0
$
96.6
$
59.2
Net income per common share:
Basic
$
0.84
$
0.80
$
1.99
$
1.22
Diluted
$
0.84
$
0.79
$
1.98
$
1.21
Weighted average number of shares
outstanding:
Basic
48.5
48.3
48.4
48.2
Diluted
48.7
48.6
48.6
48.6
Arcosa, Inc.
Condensed Segment Data
(in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
Revenues:
2023
2022
2023
2022
Aggregates and specialty materials
$
227.1
$
216.2
$
438.1
$
404.1
Construction site support
37.7
29.7
62.8
53.3
Construction Products
264.8
245.9
500.9
457.4
Utility, wind, and related structures
207.0
206.7
414.7
397.3
Storage tanks(1)
—
61.9
—
121.8
Engineered Structures
207.0
268.6
414.7
519.1
Inland barges
72.5
53.8
140.6
100.8
Steel components
40.5
34.5
77.8
61.3
Transportation Products
113.0
88.3
218.4
162.1
Consolidated Total
$
584.8
$
602.8
$
1,134.0
$
1,138.6
Three Months Ended June
30,
Six Months Ended June
30,
Operating profit (loss):
2023
2022
2023
2022
Construction Products
$
34.4
$
28.1
$
83.9
$
44.8
Engineered Structures(1)
21.7
41.5
51.6
69.8
Transportation Products
11.6
3.5
21.7
6.2
Segment Totals before Corporate
Expenses
67.7
73.1
157.2
120.8
Corporate
(16.7
)
(15.9
)
(31.1
)
(28.9
)
Consolidated Total
$
51.0
$
57.2
$
126.1
$
91.9
Backlog:
June 30, 2023
June 30, 2022
Engineered Structures:
Utility, wind, and related structures
$
1,507.4
$
410.1
Transportation Products:
Inland barges
$
287.1
$
131.8
(1) On October 3, 2022, the Company sold
the storage tanks business. We have recognized a total gain on the
sale of $195.4 million, of which, $189.0 million was recognized in
the fourth quarter of 2022 and $6.4 million was recognized in the
first quarter of 2023. See Reconciliation of Historical Adjusted
EBITDA for the Storage Tanks Business table for the contribution of
the storage tanks business to operating profit, included above, for
the three and six months ended June 30, 2022.
Arcosa, Inc.
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
June 30, 2023
December 31, 2022
Current assets:
Cash and cash equivalents
$
197.9
$
160.4
Receivables, net of allowance
386.5
334.2
Inventories
354.6
315.8
Other
36.1
46.4
Total current assets
975.1
856.8
Property, plant, and equipment, net
1,233.2
1,199.6
Goodwill
966.7
958.5
Intangibles, net
251.9
256.1
Deferred income taxes
9.7
9.6
Other assets
59.0
60.0
$
3,495.6
$
3,340.6
Current liabilities:
Accounts payable
$
238.7
$
190.7
Accrued liabilities
126.0
121.8
Advance billings
40.0
40.5
Current portion of long-term debt
16.1
14.7
Total current liabilities
420.8
367.7
Debt
530.5
535.9
Deferred income taxes
192.2
175.6
Other liabilities
74.8
77.0
1,218.3
1,156.2
Stockholders' equity:
Common stock
0.5
0.5
Capital in excess of par value
1,685.6
1,684.1
Retained earnings
607.3
515.5
Accumulated other comprehensive loss
(16.1
)
(15.7
)
2,277.3
2,184.4
$
3,495.6
$
3,340.6
Arcosa, Inc.
Consolidated Statements of Cash
Flows
(in millions)
(unaudited)
Six Months Ended June
30,
2023
2022
Operating activities:
Net income
$
96.6
$
59.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and
amortization
78.3
77.3
Stock-based compensation expense
12.6
10.1
Provision for deferred income taxes
12.9
12.3
Gains on disposition of property, plant,
equipment, and other assets
(23.2
)
(4.8
)
Gain on sale of storage tanks business
(6.4
)
—
(Increase) decrease in other assets
(0.3
)
2.9
Increase (decrease) in other
liabilities
(3.4
)
(16.4
)
Other
2.2
1.0
Changes in current assets and
liabilities:
(Increase) decrease in receivables
(30.7
)
(75.0
)
(Increase) decrease in inventories
(34.6
)
(17.4
)
(Increase) decrease in other current
assets
10.3
7.6
Increase (decrease) in accounts
payable
43.4
55.3
Increase (decrease) in advance
billings
4.0
(4.6
)
Increase (decrease) in accrued
liabilities
(6.8
)
3.7
Net cash provided by operating
activities
154.9
111.2
Investing activities:
Proceeds from disposition of property,
plant, equipment, and other assets
24.4
29.2
Proceeds from sale of storage tanks
business
2.0
—
Capital expenditures
(96.9
)
(52.9
)
Acquisitions, net of cash acquired
(15.6
)
(75.0
)
Net cash required by investing
activities
(86.1
)
(98.7
)
Financing activities:
Payments to retire debt
(5.4
)
(56.3
)
Proceeds from issuance of debt
—
80.0
Shares repurchased
—
(15.0
)
Dividends paid to common stockholders
(4.8
)
(5.0
)
Purchase of shares to satisfy employee tax
on vested stock
(11.1
)
(9.7
)
Holdback payment from acquisition
(10.0
)
—
Net cash required by financing
activities
(31.3
)
(6.0
)
Net increase (decrease) in cash and cash
equivalents
37.5
6.5
Cash and cash equivalents at beginning of
period
160.4
72.9
Cash and cash equivalents at end of
period
$
197.9
$
79.4
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,
2023
2022
2023
2022
(in millions)
Net Income
$
40.9
$
39.0
$
96.6
$
59.2
Gain on sale of storage tanks business,
net of tax
—
—
(4.5
)
—
Impact of acquisition and
divestiture-related expenses, net of tax(1)
0.2
1.9
0.7
2.6
Benefit from reduction in holdback
obligation, net of tax
(3.8
)
—
(3.8
)
—
Adjusted Net Income
$
37.3
$
40.9
$
89.0
$
61.8
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,
2023
2022
2023
2022
(in dollars per share)
Diluted EPS
$
0.84
$
0.79
$
1.98
$
1.21
Gain on sale of storage tanks
business
—
—
(0.09
)
—
Impact of acquisition and
divestiture-related expenses(1)
—
0.04
0.01
0.05
Benefit from reduction in holdback
obligation
(0.08
)
—
(0.08
)
—
Adjusted Diluted EPS
$
0.76
$
0.83
$
1.82
$
1.26
(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 2023
Guidance
2023
2022
2023
2022
Low
High
Revenues
$
584.8
$
602.8
$
1,134.0
$
1,138.6
$
2,250.0
$
2,300.0
Net income
40.9
39.0
96.6
59.2
152.9
158.0
Add:
Interest expense, net
5.7
7.7
11.6
14.8
22.0
23.0
Provision for income taxes
5.6
10.1
19.8
16.5
33.6
39.5
Depreciation, depletion, and amortization
expense(1)
39.5
39.5
78.3
77.3
157.0
160.0
EBITDA
91.7
96.3
206.3
167.8
365.5
380.5
Add (less):
Gain on sale of storage tanks business
—
—
(6.4
)
—
(6.4
)
(6.4
)
Impact of acquisition and
divestiture-related expenses(2)
0.3
2.5
0.9
3.4
0.9
0.9
Benefit from reduction in holdback
obligation
(5.0
)
—
(5.0
)
—
(5.0
)
(5.0
)
Other, net (income) expense
(1.2
)
0.4
(1.9
)
1.4
—
—
Adjusted EBITDA(3)
$
85.8
$
99.2
$
193.9
$
172.6
$
355.0
$
370.0
Adjusted EBITDA Margin
14.7
%
16.5
%
17.1
%
15.2
%
15.8
%
16.1
%
(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) See Reconciliation of Historical
Adjusted EBITDA for the Storage Tanks Business table for the
contribution of the storage tanks business to Adjusted EBITDA,
included above, for the three and six months ended June 30,
2022.
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,
2023
2022
2023
2022
Construction Products
Revenues
$
264.8
$
245.9
$
500.9
$
457.4
Operating Profit
34.4
28.1
83.9
44.8
Add: Depreciation, depletion, and
amortization expense(1)
27.8
26.3
54.7
50.9
Segment EBITDA
62.2
54.4
138.6
95.7
Less: Benefit from reduction in holdback
obligation
(5.0
)
—
(5.0
)
—
Adjusted Segment EBITDA
$
57.2
$
54.4
$
133.6
$
95.7
Adjusted Segment EBITDA Margin
21.6
%
22.1
%
26.7
%
20.9
%
Engineered Structures
Revenues
$
207.0
$
268.6
$
414.7
$
519.1
Operating Profit
21.7
41.5
51.6
69.8
Add: Depreciation and amortization
expense(1)
6.4
8.0
13.0
16.0
Segment EBITDA
28.1
49.5
64.6
85.8
Less: Gain on sale of storage tanks
business
—
—
(6.4
)
—
Adjusted Segment EBITDA(2)
$
28.1
$
49.5
$
58.2
$
85.8
Adjusted Segment EBITDA Margin
13.6
%
18.4
%
14.0
%
16.5
%
Transportation Products
Revenues
$
113.0
$
88.3
$
218.4
$
162.1
Operating Profit
11.6
3.5
21.7
6.2
Add: Depreciation and amortization
expense
4.0
4.0
8.0
7.9
Segment EBITDA
15.6
7.5
29.7
14.1
Adjusted Segment EBITDA
$
15.6
$
7.5
$
29.7
$
14.1
Adjusted Segment EBITDA Margin
13.8
%
8.5
%
13.6
%
8.7
%
Operating Loss - Corporate
$
(16.7
)
$
(15.9
)
$
(31.1
)
$
(28.9
)
Add: Impact of acquisition and
divestiture-related expenses - Corporate(3)
0.3
2.5
0.9
3.4
Add: Corporate depreciation expense
1.3
1.2
2.6
2.5
Adjusted EBITDA
$
85.8
$
99.2
$
193.9
$
172.6
(1) Includes the impact of the fair value
markup of acquired long-lived assets, subject to final purchase
price adjustments.
(2) See Reconciliation of Historical
Adjusted EBITDA for the Storage Tanks Business table for the
contribution of the storage tanks business to Adjusted Segment
EBITDA, included above, for the three and six months ended June 30,
2022.
(3) 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,
2023
2022
2023
2022
Construction Products
Revenues
$
264.8
$
245.9
$
500.9
$
457.4
Less: Freight revenues
27.3
30.5
57.2
60.5
Freight-Adjusted Revenues
$
237.5
$
215.4
443.7
396.9
Adjusted Segment EBITDA(1)
$
57.2
$
54.4
$
133.6
$
95.7
Adjusted Segment EBITDA Margin(1)
21.6
%
22.1
%
26.7
%
20.9
%
Freight-Adjusted Segment EBITDA Margin
24.1
%
25.3
%
30.1
%
24.1
%
(1) 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,
2023
2022
2023
2022
Cash Provided by Operating Activities
$
127.6
$
86.7
$
154.9
$
111.2
Capital expenditures
(52.5
)
(27.0
)
(96.9
)
(52.9
)
Proceeds from disposition of property,
plant, equipment, and other assets
0.5
8.6
24.4
29.2
Free Cash Flow
$
75.6
$
68.3
$
82.4
$
87.5
Net income
$
40.9
$
39.0
$
96.6
$
59.2
Free Cash Flow Conversion
185
%
175
%
85
%
148
%
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, 2023
Total debt excluding debt issuance
costs
$
551.4
Cash and cash equivalents
197.9
Net Debt
$
353.5
Adjusted EBITDA (trailing twelve
months)
$
346.4
Net Debt to Adjusted EBITDA
1.0
Arcosa, Inc.
Reconciliation of Historical Adjusted EBITDA for the Storage
Tanks Business
(in millions)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2022
Storage tanks business:
Operating Profit
$
13.9
$
24.2
Add: Depreciation and amortization
expense
1.9
3.6
Storage tanks EBITDA
15.8
27.8
Storage tanks Adjusted EBITDA
$
15.8
$
27.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803368466/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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