Earnings call transcript Q4 2022

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Operator

Good morning ladies and gentlemen, and welcome to Arcosa Inc. Fourth Quarter and Full-Year 2022 Earnings Conference Call. My name is Todd, and I will be your conference call coordinator today.

As a reminder, today's call is being recorded.

Now, I would like to turn the call over to your host, Erin Drabek, Director of Investor Relations for Arcosa. Ms. begin. may you Drabek,

Erin Drabek

A and and XXXX for Investor today earnings and morning's of posted Peck, Carrillo, everyone prepared are follow quarter A call slide remarks. are Arcosa's website presentation and Relations President copy CFO. Gail and full-year call. press CEO; our session thank morning ir.arcosa.com. will joining their release you yesterday's fourth Antonio question-and-answer the Good on With this me for

the been financial Events A today's Reconciliations next comments News tab. presentation. the prepared be of will appendix the our to contain call measures and accordance the on for included available for Today's website webcast one-year financial slide the with the weeks. replay closest included accessing two of in slides are A replay GAAP. in be Instructions the replay GAAP have of will measure are number for non-GAAP under press and available presentation release. in the not measures that of

In as Securities defined addition, XXXX. of by forward-looking statements contains Reform Act Private Litigation the conference call today's

statements materially Forward-looking statements, to press such risks later subject information more refer could expect file uncertainties risks filings we uncertainties, on release please yesterday today. SEC the for from to company's forward-looking Form filed we to XX-K, results these are cause actual the our that and to differ and including and

to Antonio. I would over to call like now the turn

Antonio Carrillo

and revenue key in generating and adjusted achieved fourth will outlook morning XXXX, financial I and messages. growth and for Erin. Good for few and results strong both fourth in us the solid with discuss Thank EBITDA. you our a Arcosa start quarter performance quarter you, [indiscernible] joining to full-year XXXX thank our XXXX.

headwinds delivering businesses, our of the and and with performance both consistent persistent our through and an effectively compensated while guidance. financial Arcosa navigating expanding cyclical growth acquisition. I them environment for inflationary we am Despite team pressures facing in businesses, challenging our successfully operating a for proud organically

storage our We we portfolio business. XXXX. another significant of toward in step our business, tank strategic of asset divestiture also took achieved our the progress and reducing complexity Through the optimizing

With strengthened for enhanced realized we and transaction, sheet, from the our flexibility, financial value shareholders. our significant proceeds this balance

and proactive products Arcosa XXXX, Within each adjusted ability and underscoring pressures. in structures, revenue execute by grew challenging conditions. growth business pricing adjusted consistently of offset to engineered EBITDA business For a our inflationary actions our despite construction in our EBITDA XX%, to market reflecting combined improved segments,

our anticipated, focus same the demand than on our At time, largely generating efficiencies operational had cyclical managing performed businesses costs constrained due to and a we better environment. in

summarizes Slide advancing we progress in transformation. have strategic X our achieved the considerable

have included growth resiliency initiatives our which higher actions, Our growth increased in M&A, markets. enhanced asset participation optimization our and organic and focused have

more positioned a of us. Arcosa today As that capitalize opportunities multiple long-term growth is to stronger, is better a result, the company focused in front

In is expected a federal spending to infrastructure many multi-year of addition, business. tailwind our to provide

to to results. review our quarter XX fourth Slide Turning

improvement in [transportation of year and outpacing point more The product] in [ph] reflect by led a EBITDA Excluding margins. increased fourth growth consolidated a in from EBITDA. adjusted than storage period XX our quarter EBITDA revenue business each XX% improvements doubling adjusted growth driving of prior segments, basis tanks,

declined. pricing volumes Strong compensate gains structures even in steel from organic benefit lower help elevated overall pricing as products, engineered for construction volumes while segment

mid-point up normalizing of range. XX% guidance the full-year X.XX billion, which at year-over-year, Slide updated XX%, increase with revenue XXX our of right storage million, EBITDA our guidance. generated of end the operating XX, of tank Arcosa for Adjusted was on an Looking in-line sale results and met of was the

outlook. over to then update I on and will return our our the turn XXXX to discuss you I to performance Gail will now call segment Gail?

Gail Peck

of discuss fourth organic to Thank revenues Slide you, declines, the volume on which X%, results. in to as addition the quarter split organic Antonio. from In pricing RAMCO, XXXX. aggregates we quarter, Construction RAMCO. increased evenly drivers between and roughly recycled offset of accelerated Products, California Southern the segment growth as XX well due I'll the the producer Revenue begin the was second acquired quarter contribution in

to Wet and XX% across quarter. state with during cold weather Texas are during and the activity days weather bad extreme we along the in continued our deceleration main the single construction segment were of revenues family XX% experienced Approximately increase a and year-over-year footprint in the residential volumes the quarter. sourced headwinds segment

quarter. impact the believe We on an supply also had volumes abating segment chain during while constraints

disciplined in inflationary mitigating strategies Our ongoing were pressures. pricing successful

efficiency focus In revenue. point as operational a SG&A segment in addition, reduction of our basis on enabled XX a percent

increase approximately $XX segment million, As cement was sales in $X margin. revenue cost X% EBITDA, we basis effect growth over a diesel, in XXX reported margins of by or quarter. ahead process point slightly a was increase and XXXX. adjusted prices million segment headwinds XX a approximately of Higher points segment basis increased fuels reducing cost the of these in The X% by during full-year result,

pricing markets fourth in we higher the profitability year-over-year than aggregates, with quarter, achieved strong gains margin. ahead slightly With fourth experienced organic natural a quarter aggregates pricing our in natural broad strength in XX% volume of disciplined to we unit across strategy, more average pricing the Turning declines. up

In Dallas our a in volumes mid-teens growth from For largely the high-single-digits. of for the organic full-year, weather the low-double-digits. the RAMCO, total operations benefited unfavorable Houston with volumes acquisition down XX% declined volumes in volumes XX-XX. On positioning had Texas, basis, total favorably legacy to and recycled about full-year aggregates, attributed in us quarter organic organic pricing we increased in

we were pricing Fourth average construction, residential where in healthy. fitting plaster to our volumes materials, the business solidly gains see multi-family better continued prices Within specialty favorable selling and were during quarter quarter. momentum up

remain backlogs the Oklahoma customers our completion second scheduled at healthy in expansion and Our for plaster early plant the capacity underway is project in quarter.

materials compensated top for decline. the and quarter. we margins pricing fourth Fourth but flat the single-digit saw year-over-year strength in specialty quarter in growth aggregates lightweight slightly, in were volumes Overall, down line

trend and expectations healthy growth our our inquiry the revenues quarter. on supportive business CapEx for XX% an fourth in increase Finally, levels in higher customers' reported were shoring in Order XXXX. volumes remains

to XX first results effect day engineered a recognized and adjusted gain segment $XXX structures. Slide was the connection segment that has reported of as which sold basis shows excluded on sale, storage the the been EBITDA. quarter. of excluding we on of Moving business the an from tanks with In pretax million,

businesses to for and volumes. our partially was which as Adjusted inefficiencies mix Revenues in X% largely production product increased structures increased to margins due these by change for declined, in structures prices, elevated business. and even lower wind offset businesses utility utility XX%, steel our related a primarily due EBITDA

enabling have margins to We since levels more return resolved segment these January. in to inefficiencies, normalized

than performed business EBITDA. the generating our During towers our breakeven quarter, positive wind expectation, better

the to into We level wind ended XXXX. of base from We $XXX orders backlog of wind up the with XXXX. encouraged are of for of tower $XXX million, receive with structures end utility in production the which combined backlog million, our year XX% extends related

revenues. Turning contributed steel Products on years. Slide two components to by costs expanded positive improvement margin generating XX, businesses revenues to managing operating components XX.X%, barge the segment Transportation note, our the volume in representing margins as and and adjusted barge and by margin Both quarterly highest segment's steel efficiencies. to segment lower EBITDA increased and offset X% a were was On down increased

of exceeding expectations orders business the quarter, received We lower Our of improved during despite benefited barge hopper with We backlog XXXX of planned barge primarily the all up production ended the $XXX XXXX. from million, our for our were capacity year the quarter. $XX for for for end volumes the barges. substantially which year. pricing, fills substantially from million barge These at orders $XXX delivery, million

sheet Slide year with X.Xx, We ended and down net comments some on the quarter. X.Xx of our with conclude cash the debt-to-adjusted EBITDA XX the flow from I'll at on third end position. balance of

the $XXX storage under fourth outstanding the repay facility. proceeds revolving tank the quarter, our we borrowings During to used of credit million

We primarily Working a started sheet capital $XX debt below and $XXX start material an balance XXXX, flow, exceptionally our XXXX impacts. working year, due in of to initial of with no In expectations cash of consumed at the XX available capital million inflationary million came maturities. million the about increase year-over-year. with liquidity strong

$XXX guidance high-end and growth engineered underway solid we structures. XXXX as products made construction progress the expenditures the Capital projects annual were with in-line our in in of on million

XXXX, to $XX For million full-year we for million $XX see CapEx million to CapEx of including million, $XXX growth projects. $XXX

In yesterday's be highlighted the sale in that and the we range included is release, $XX gain guidance our million quarter. first in recognized land will XXXX

a of our in anticipate repeat term, magnitude land sale this materials do part we of a are to normal operation. not sales the construction Although near

help pleased to reinvest the when a CapEx. the monetize are be asset able timing and right was to to depleted gross offset proceeds We

in long-term XXXX, opportunity. flow of it projects largely increase to primarily related we generated million from up, CapEx, $XX growth $XX free the year, cash will million that Summing last enhance our in down to due

As a million reminder, authorized two we've our years. share repurchase program in for December, $XX another

sheet balance and considerable macro level uncertainty. and during valuable for flexibility financial strengths assets of liquidity Our provide are this heightened Arcosa

turn our to over more now call will XXXX the outlook. back for I on Antonio discussion

Antonio Carrillo

Gail. you, Thank

Turning to Slide XX.

As will and expansion growth we year. expect business. cyclical uncertainty, our fundamentals Despite anticipate in we an consistent macro we XXXX gradually business look forward, improvement be our in transition important

XXXX. Normalizing guidance compared midpoint XXXX at up to of to our we expect the sale X.X for billion, the of be storage tanks revenue X%,

XXXX. is midpoint adjusted XXXX up the of Our guidance XXX EBITDA forecast million, to our compared XX% at

from land sale Gail EBITDA impact growth X% midpoint we the adjusted of positive noted, the at range. our Excluding forecast the

the healthy in our the growth funding both levels. businesses. DOT that and and benefit from healthy the and state well Jobs Act. pricing average construction to aided the spending budgets many and products to highway the infrastructure continued infrastructure of at now federal state outlook review activity Reflecting Slide by favorable above construction markets. I activity XX, key of will note from is letting would our five-year believe Turning We federal

the from demand construction, together well We also continued the surface as heavy potential to as continued weakness volumes. single benefit to the which from in sector family non-residential expect offset residential with demand has multi-family, in transportation solid

as anticipate particularly the XXXX. in the prices sharp the to in favorable pricing we acceleration continue, benefit XXXX, from half in of In first year we

Although for fourth volume the profitability expect demonstrated quarter. not to we we we compensate in providing for higher any volume are guidance as with pricing unit XXXX, and softness

continue higher driving We in XXXX. will focus on to margins

in [ph]. strong operating We [electrical hardening expect continue invest and the to utilities grid] as have will another utility structures electric year

Our positive visibility by structures our level is of outlook in utility a and both business. traffic supported backlog high

demand anticipate need revenue infrastructure boost increased will given to addition, funding towards shift be [ph], energy the electric structures Based of grid. especially [projected federal needs XXXX. capacity connect half sources and second to we and we more renewable energy will towards the customer heavily timing] for our the vehicles products, on utility In growing anticipate the weighted

Our customers' rise. CapEx expectations continue to

projects. of timing the affect may constraints chain supply lingering However,

Slide in anticipate EBITDA to and will of XXXX to slightly off move be we XX, XXXX rail cyclical Turning lows. ahead continue adjusted as their businesses components our barge cyclical

in As of continues demonstrated business quarter, and by barge fundamentals tower the our wind received the orders to fourth improve.

result, for significant customer In lower with up demand a reasonable steel XXXX coil the for expect growth in significant barge, plate [spurred] by bronze strong. savings in quarter innovation we As is [ph] barges higher of and we cost for production our prices, capacity ramp in to This the delivers anticipation fourth barges XXXX. cost demand that substituting customers for hopper in hot steel. proves

to demand XXXX, this the to end flexibility. we we largest enhance our With of on and production quarterly our to expect scheduled up am manufacturing with to have production capitalize expect production us ramp ramp, capacity orders received past proud orders barge innovation XXXX. able the fill The the allowed our for to in years year. in effort are we I in drive two and year be the the team's higher

additional barge forecast, additional online inquiries XXXX this convert which current delivery orders As project high help prices steel come level will in capacity for year, steel and should beyond. down, of third-party comes into

believe cycle. overdue the levels, replacement at age average moderation help long barge fleet kick steel high the With the in will historically of barge fleet start we prices

into also help we're to see starting barges. steel those tank inquiries prices Lower orders. for turn recently, would inquiries More significant smaller also

the created XXXX [lapse of towers. As the we demand] in expiration have wind PTC the end at noted, of [ph] a of

for extension of passage the XX-year of demand to stay a PTC, strong the Reduction many With Act is years. for wind is August, expected towers Inflation in up the and picking which includes

in in build expect We we drive to beyond. as demand growth our the can with year and in transition three we be in strength be earnings XXXX. years XXXX fourth be and backlog the renewed to backlog approximately XXXX seen in the is orders in next the important backlog tower scheduled an The booked quarter delivered additional in January. to booked wind delivered XX% to be The

XXXX for multi-year year to recovery. business, in likely are low, preparing profitability breakeven is we our for leading power order wind Although a

credit, addition significant will our In impact PTC, tower to includes which new positive also we believe IRA a on the business. tax the manufacturer's the wind a have

Our power qualify have improved we for we beyond industry. strong in all for CMO as clarification the this have With working not included backlog assumption the built further to is demand will future, from credit, our and that customers our accelerate benefit in XXXX but await IRS. our and with for we wind the growth tax the economics, we're guidance

We significant shareholders. create value efforts help expect will our these for

XXXX, railcar deliver American in forecasted growth anticipate more our will indicates at moderate year forecast in steel we solid railcar recovery following year. deliveries in sharp With Finally, a of in pace another continued increase the components North to deliveries although components XX% XXXX, business, steel market last growth.

forward-looking continue for setting order in to businesses in to through backlogs growth our stage positive build the our these expect we XXXX. cyclical indicators, accelerated Given XXXX,

Arcosa to committed XXXX, the During corporate of remains strategy ESG and our culture. into integration long-term through responsibility

Our built will months from our XXXX many few the highlight plan in year. report, on that in which progress prior sustainability to annual the next publish we accomplishments

for In significant non-core for results. businesses, effectively, a while solid tanks, facing divestiture navigating and storage successful to in XXXX our delivering conditions monetize efficiencies, asset are a financial was our deliver challenging despite year closing, this productive cyclical and they value Through strategic Arcosa. generating the we and transformation constantly market advancing of shareholders,

we an entering Looking for exciting period Arcosa. are ahead,

towers Our on growing of for spending. entering] growth solid are federal multi-year by fundamentals healthy and infrastructure continued barges. demand a a poised time, by upcycle tailwind the market same market [ph] remain wind for supported we believe businesses the from driven cyclical performance both strong At [cusps businesses and our

several to be of exciting have ahead years, actions the entering able us. strategic is a to over support the Arcosa we past taken with With the period this balance sheet strong opportunities

we would to open the like Now, for call questions.

Operator

Zaffino our you. [Operator with Oppenheimer. from take We'll Instructions] Ian Thank first question

Ian Zaffino

the Hi, very on pricing pricing much. on the Thanks. be, price in know the aggregates, of the about that's great. of you're talking in Antonio, year that's or aggregates into first there if are And Question strength Thank you I side you half about just existing more the anniversarying any do the of would pricing in-store mentioned Good increases. think how case, XXXX? we quarter.

Gail Peck

my It's morning. pricing, pricing side add Antonio I'll more aggregate he on When take XX%. if Gail. anything the were let good the further. that think and gains has Ian, we fourth about script I quarter mentioned in natural than in

a has through momentum. at And year, sequential you certainly quarter as how the momentum. the benefited look clearly of accelerated lot pricing the pricing So, from

the have helped We think to in acquisitions that have as select I in synergies did made. too, that quarter, And increases certainly well. the we've it's price so important we nice note pricing had

we for us would mid-teen fourth So, And quarter. strength. all-in-all, us that full-year a expect was outcome for captured the nice in really pricing

for think we sets XXXX. well that up So,

letters annual And increases. in our the we're we'll market watch pricing aggregates think for continue but now, planning set. have I right closely, annual to do very We

Antonio Carrillo

a I to the to company Ian, of of be little and important situation think because we for What there's therefore, be the understand I important, [ph] the the in need] in investors is pricing to and add whether [you uncertainty And year aggregates, is environment not color our the is company. this going in believe going and we down only the this To margins. throughout very focus uncertain think lot volume. with had housing volumes a – is in more on

all short-term incentive into to compensation. philosophy And compensation we've margin this to business leaders their year in added the our our

not be in the it's think going effort I aggregates, So, but to across an only company.

Ian Zaffino

was you. as be thank color follow-up, was guys helpful. was would headwind And Okay, and a in And quantified you impact How there Texas? the then could you have just bad give what weather the it? any

Gail Peck

it's mentioned it. And Ian, it number on the up put but weather, lose number to on little a in in impacted Midwest don't difficult we freezing our I thing the is, bit you other of in the precise good certainly did quarter, put our didn't operations and specialty during not We the In excessive with a step-up materials measure. had an California business. the our the the certainly rains on impact temperatures footprint Texas. then areas volumes,

It that impact. But was had the here and planned. dry price a you meaningful area when Dallas hate less put about seasonal, freezing and our down impact. slightly increases. certainly is been would dollar a I impact on I have we volumes say, whether, normal had would January, the But say some than to ice our our and talk weather in it, an were to volumes as and

we So, declines volume in the did significant see quarter. some

Antonio Carrillo

hits Ian, weather have When you problems. several

[seeding] First, you into and the plant you. structure shut starts your cost down [ph]

a pretty impact. significant So, it's

quarter We operations, our based plants, we said, also as natural gas Gail in several have, fourth etcetera. across we and had in had on curtailments the shutdowns December freeze

the I was say So, fourth quarter. significant a it impact in pretty would

Ian Zaffino

Thank much. very Okay. you

Operator

Thank you.

Thielman D.A. Our next from question with comes Brent Davidson.

Brent Thielman

Hey, of, impact for thought more the momentum Antonio the building I the but pick-up the the mean the well. there's guess recovery. the IRA and as industry, seems on particular is question on just side. I wind in industry would demand some and like notable. a of kind I I guess terms XXXX in maybe thank real this Good year, of you. know I quarter lot guess later does an have in here Congrats year And and I it the, both order wind guess barge. I morning.

a like feel opportunistic? How out just would guess, side? right maybe customers wind now there, the in of interest And the order recovery on we're, barge you being sort I you levels sustained or characterize of do and

Antonio Carrillo

I’ll Wind to that's long-term – it IRA, wind. where me tax with does The is let it markets, Let a very in provides And periods from me most what credits. away. one. visibility. so – is thing to each rate the seen important tax they're the it demand start go very sensitive one take it different nothing does, strong business we've goes

it long-term are gives in visibility. Now, of you have investing people which years they visibility, projects when XX is when

visibility XX visibility let's doing thing. very long the say of having what into should be business So, gives of a for incredible period an a good years that's And time. us,

the included the situation. for tax be to IRA get that for This So, This manufacturer upcycle unique the called for the credits] time, time, long which the something traditional the the only [ph] manufactures manufacturer fundamentals developer, used power the time there. are blade first credit. the credit. is not turbine And tax a [tax manufacturer's and

it for us our that's that. [it the course, wind. [ph] tells] analyzed, Of today That's we've and improves economics perception everything

it However, we're back IRS that our this did be not year. the still in that's include waiting later to in specific come mentioned guidance, impact credit, any with my the significant. rules our sometime very but going to it's – why believe remarks this we And from for I projections and in I tax

of business economics when we period think no went in XXXX. shutting July XXXX from There where improving, you improving basically fundamentals about So, down long-term for the was could a and business. demand add view the the was our we for

capacity, low to on can breakeven about sold be orders years. the is this we how stronger, with there the course, the to rates get let's we to several and is where ramping production because significant year I to say, what probably profitability. run XXXX next this situation going a market, up said But able goal be is over a going customers to capitalize of be year into the and To have the capacity and with end how we more towers we're can discussions increase

Barge levels. we fleet, mentioned little able to in our barges continued, the the hopper to towers. we high So, buy. Very few redesign immediately get last fourth the wind in quarter to barge the were I the barges years. a be have the customers Scrapping historical several very to cargo exciting steel the Barge, is for with been replaced over cheaper were and of able has position of and – especially age as different. dry at

So, the is demand there.

believe significant need the strong. bit. a inquiries Right is We [forecast] The the little the in leads is The there. creates to very this in coming stabilize. [us] uncertainty prices to coming but be are demand Ukraine back to are war up the U.S. and issue. down. That online believe every of But going that prices again always next capacity only to not there going [ph], in now, [ph] steel We couple they're years.

steel our prices I down, are And also recovery. years say, good several answered no] question? [ph]. setting Hope expectation. our [We'll for of if up we barge That's come business your

Brent Thielman

see back there sort you're as the on get know all guess of projects I in seeing of as that year, get like you to we considering appreciate what of Maybe doing I that. Yes, – quarter-to-quarter, [gyration] to I beyond. higher? kind be and anticipate I sort lot towards going backlog utilities and mean, it your [ph] of to that we, But when, XXXX wind see are seems for out orders. end do even slated just the and you're you we what a and and of all the follow-up towards and backlog as some and a are the planning can Should

Antonio Carrillo

Yes.

surprised take fast you – orders. longer to and To turning we be fast. always industry the for to wind the it's year. I before be – honest, our I higher for of to us be accelerating giving backlog let's the actual say start was expect think orders I projects should them started, end to the into how expected us

orders, let's So, think have I moment, at to I throughout receive year. way it but we think the that put that this have backlog us anything do expect do you should or higher more to don't

Brent Thielman

I'll you. on. pass it Thank Okay.

Operator

Thank you.

question Stephens. next Trey comes Grooms with from Our

Trey Grooms

the quarter. to Hey, congrats have nice say good morning everyone and on I

Antonio Carrillo

you. Thank

Trey Grooms

talk the And you margin across to look this Antonio, focus be levers where on you opportunity improve of the and you the about this but segments other as some pointed of see pricing mentioned you the can company the you can year? margin. margin on most that will that front the out pull year you clearly,

Antonio Carrillo

important. is always pricing be is we been and costs And time, present. a so Sure. going focused on inflationary to Margin combination of we've your the of be same that are at Ideally, costs. able be for and your to compensate company to a a continued should as course pricing pressures company,

As you've have we down seen, on go when the businesses, and every steep we've focused been cyclical very time go a always in they down, and very that. way very businesses cyclical

that – businesses we You control our mentioned exceeded our basically cyclical saw expectation way the last costs. year. it's they And their

construction tough also. weather You SG&A a quarter their having their with costs on focusing saw and everything segment and on

this So, our I for of business even level would pricing compensation. corporate at planned [ph] say the level. the the level are part [SG&A] cost level, included we've And our as efforts at corporate the and year

going we're company. So, the focusing across on be to costs the

of just the and on going it's business, bit rail sensitive ramping this times that Those are volume. barge from wind very I the up little So, we're to think a year, businesses to because getting come be low that cyclical components are started. have tougher very businesses

improvement So, get those ramp going. should once and capital as in businesses is get our leverage operational some We return up, the incredible real in we fast margins. on they see you

On not as now the tougher you. volatility it's construction segment, is The high.

pricing by individual focusing lot there more a can we and So, plan [ph], by it's on still. plan there's level, costs a pull an but mind] much of on detail, [mind levers

utility months. last the our over structures, view has over transmission there, the few of some structures, changed finally, the And

three ago. steel Steel now. a prices have We prices months in reduction stabilized faster expected right

now as try margins are come keep right So, margins bit. come our as down. margins down increase down, one] pulled and is steel prices little your to goal our a [software prices That's steel [ph] to a because our

a can levers but do we we I Each of a has as tools have their lot one it. of overall, different So, business ways of very inside. it, approaching feel different company confident and

Trey Grooms

All missed year Antonio. then CapEx it, any targeting the ex generation free right. helpful. what the this this and And Super cash color and the on if Gail, but of that Thanks for I sale for are year land? gain you sorry

Gail Peck

Sure. Yes, my for year. give the in guidance I comments CapEx did Trey the

at from construction. $XXX large first XX $XXX quarter looking get from in that proceeds some the CapEx. to million We'll we're we or have the give offset take the So, that to million in sale in land million

that. XXX let's of So, call growth CapEx of We've XXX, XX about that. million million got included net XX to in

pool our within finishing significant that most in in business. as ways of we XXX Trey, utility Florida have increase the the as continuation reminder, utility concrete out And structures of XXXX say we as efficiency in in and business, greenfields to is going a adds that looking capacity structures our our well our I'd at of CapEx. million slight at aggregates finished

million, think came So, looking on in at kind you XXX XXX there the free year, million, Working [XXX] of tax cash after flow I our at is really the net-off at working I midpoint if question guidance, have EBITDA midpoint capital at and land start our expectations. the sale, around for the below CapEx mark [ph] throw in somewhere just then of XXX maybe interest, you're the capital. after

very with impacts focused So, on the certainly had had use inflationary we're impacts XXXX, managing XXXX. in that

higher with end the year. our the at We a bit little ARR of ended

So, a flow have think year. good we'll I cash

working come think out. to a do where were XX neutral We a of to be we we could if capital next that we're want drain and is going I revenue million better clip about year. about use keep so in that XX% to XXXX,

cash you free all that $XXX up million So, flow in sum range. the

Antonio Carrillo

are. this understand because where just something we let And think at me to it's important I stage add

on of at far of also the And time the for the moment. board. organic have going the news And a returns we every on. through acquisitions And lot go than drawing capital. is best on projects where projects greater [us] So, have use we a lot the the good of of [ph], we organic exercise we allocate growth our are capital

news. good So, that's

is, businesses we inventory, think they recovering, cyclical cyclical working piece are consume etcetera. about as recover, capital because we companies second The the buying generating AR,

should good good capital, working it's consume They that also some be growing the we businesses. it news. but are So, basically news might

Trey Grooms

pass it I'll Thanks on. sense. great makes detail. All for Thank Yes. you. all the

Operator

Thank you.

Markets. comes Shmois Our with Capital Garik next Loop question from

Garik Shmois

Great. Thanks like quarter. and could And the you bit it declines. expecting for residential on aggregates congrats more you're to infrastructure if moving wondering pieces. [us a different sounds offset was speak new I say] and volumes little [ph] having in non-res mostly on

timing have like just aggregates could expect more maybe the would how bit volumes to just back clarity a be here. to shape on of if you expect given would out sounds You weighted year little the on some weather of more the you any in you quarter, half look, also be first helpful? flush infrastructure? volumes the It Just

Gail Peck

I'll Gail. that Yes, and deceleration one. had family take continued clearly the quarter. It’s fourth single in that we've in

of some year-over-year back and relative momentum half declines housing seen of to our year. the some and markets starts half at look the the you in you've the the key first look You at in

So, in before clearly point, and impact. an to we volumes seen – quarter – in leave commercial maybe have infrastructure single non-res. had guess the We've an had note, important success an I we've our into family impact that’s I had that from transitioning

pickup lettings IR you a and on averages. infrastructure for in markets the look with success at the in of to projects. bit little the our color key materials DOT good – shared and we're numbers five-year those seeing going in bidding compared the there our a strength So, We on as

activity of there. lot a So, and positivity

So well we're in a starting – certain as the key markets. side non-res in of our pickup and to see heavy

for to to the volumes of single-family. these that points potential for all So, compensate

we the volumes about QX the XXXX, that were see in help up probably our think and QX of to of given would trajectory or year. Speaker] challenges volumes in with And year, the fact just expectations that have more or.. that the comp say as half the cadence would pick we in first up the tracks I the I for year would [Multiple infrastructure than we sequentially of Did continue year. well to this our half second that this

Garik Shmois

end are of Thank that. current capacity in I'm complete the [XXXX] or ramp be from side service for to ramp timing you just backlog wanting curious, the also, anticipating in backlogs to you in your increase the the here standpoint, adding capacity cyclical the follow-up would And would increase I'm an as [ph]? you you on that the for well? a the capacity are capacity anticipate from business. of by

Antonio Carrillo

So, give plants. it's because, complex our I'll question a you status the of so

with start Let's wind.

the plant We not planned at ramp in plants that moment. is have shut capacity. up and One down, is three this

plants operating. up we're that the So, are ramping only

of there's that. going ramp up. CapEx, something put It's to that and are lot of not a relatively like easy not things we money a lot So, it's have to a

another it's we've like up ramp before. the of made So, many ones

capacity we up. with extract I full to a year, and a the window we lot, little But able as the we're ramping by more that that end not this is the ramp really I plants what get to Meaning, as think a year a continue for in up be in goes should we to up But we those be we relatively, ramp orders little current but there shrinks. that Now, important could we are is to time there up. could good time. is is click if two mentioned more ramp going orders, extract that

is could for capacity and we ramp There more [ph]. X] [XX that

up depending to receive So, expect we if trend before the end a more, receive, higher I on it's ramp year that would end we can the orders rate. we picking a, the the to orders we receive and up that I expect accelerate the to year start of a at more say, promotion

going to our be where ramp we're that's up. moderating So,

different. little a barge, On

shut have one down. We also plants, three is

still. The The now other capacity also at for low those low two capacity. right at plants plants are orders we running running are got relatively

to lot we're room the more depending be receive to down, dialing year. still if through and have going orders. on up up – of So, go And orders received we it we a the we when

production and we a positive barge as a let's that depending say, year. that these orders floor, the for see to through the us our on say, news the company would wind, provide on generate both is consistent ramp-up I trend modulate fit, So, then allows we backlog the

Garik Shmois

that. Okay. pass That’s helpful. for I’ll Thanks And on. it

Operator

Thank you.

with Our & Romero from Julio next question comes Sidoti Company.

Julio Romero

Gail. morning, good and Hey, Antonio

Antonio Carrillo

morning. Good

Julio Romero

players, the of the does barge and or you change steel. Arcosa substituting What for cons And margin the other doing done the of about ask Arcosa pros guess why by and to business guys that past? in the are that? or wanted profile customer? substitution I profit kind end plate for hot-rolled I So, profile industry the of coil hasn't

Antonio Carrillo

good really It's have a And done Julio. Thank question. never you, we it before.

barges, for to difference reason it for for tight. difference, the but time, plate. barges. substitute all, coil a content only your when that of the And this labor a between somewhere hopper make and depending is When the you hopper numbers you you done hopper between whole products. and – do increase there's for the we've First $XXX, with historically, to between for why, small And difference historical barges, plate $XXX. coil is the on the That's have it's two numbers,

So, time it lot of money has put to never sense behind a made and us. a of lot

then in hit, And When prices on go steel the been that's what the happened nuts. prices and quarter second year that is prices the has real fast published few volatility history last most $X,XXX down, falling in ago. prices months with – CRU started historically go what a second steel or XXXX year, last they third high pandemic at quarter or coil of stayed plate so, of the year. And and based in

to all. same have exactly few plate with disadvantages in see with the more When take by those that's has our our just but barge barge, advantage the gap prices of good redesigning set barges wells more then So, $X,XXX. product as offer to just almost just to the and September, customers a barge, we to it's no between And margin put be a start of in it October, more wells, at was as you two some that It's a able team wells. the quality you enormous, it.

more labor. So, you put

immediately So, started and with and our we barge liked orders. launched to December it place first coil, customers in

a again. So, little coil come prices have up bit

So, about right this of selling important but many are more what's we them, things. now, not two is,

First, I to think conditions. market reacted we

Second, now we have flexibility.

we us with prices. coil build depending plate. Depending modulate barge steel steel and and also the decide suppliers, on with it coil can plate And how negotiating strength our we or gives on third, prices,

really it's I good prices a complicated us allows move So, markets, think think this steel two come, development. I And to very let's let's but where between say. see

Julio Romero

Appreciate business. turning the it. to there. components color Got steel the Maybe all

the within demand and in with all the there what's going trying by on maybe that Palestine East positive of any to affected for on XXXX. outlook the think all overall industry? there's kind at if impact at sounded derailment Is guys concerns any safety Just You Arcosa?

Antonio Carrillo

We don't see moment. it the at

As and only you make [coppers axles] we [ph]. know,

So, at could wheels axles, it I the tell I'm the people we finish coppers axles and moment, the you on and and the don't axles, and it is even who the we not don't What and we moment. at sure the then what this. they bearings based happen that our would regulatory everything. put see sell on to finish axles changes mount

a see on very as there's happening big day. any this impact impact But don't know, and business. every fluid situation we our news So, is you and changes – happening

previous quarter, XXXX. and the we At So, saw that in I about our don't EBITDA it. in know we our have the is significant the XXXX seeing business increase optimistic in it XXXX, could mentioned, sharp what to mentioned We are Gail And changes fourth moment, about regulatory the year, as we we operational are happen. compared but in leverage. as was significant a are it for we optimistic ramp the not as

Julio Romero

the Thanks helpful. questions. taking much Really for very

Operator

you. Thank

question comes from Crist Stefanos CJS next Our with Securities.

Stefanos Crist

multiple in you. for there large questions. my the morning. dynamics Can about customer just orders wind? the and in those customers Were you Good large orders taking or Thanks talk for across? Thank barge

Antonio Carrillo

list order At moment, as with a with one. basically was much wide only with it with the orders, variety of multiple we that you it's of know, list have I The customers, think but ones of not barges we companies a Let was build – barge. wind, wind customers, me that good it's And customers. the got only shorter On towers. inquiries so we're the receiving, a one start customer.

We there companies. do two with out have quotes another

a of it's much potential shorter So, list customers.

should and you are the What much orders. is about expect I wind majority would customers barge seeing, So, are additional we concentration. the a on wider that say, of – both the inquiring

Stefanos Crist

right just That's can great. opportunities? talk multiples, what you're Thank now, in market about you. And the just you just on M&A, seeing then Thanks.

Antonio Carrillo

Sure.

opportunities. seeing are We

We many things small have opportunities, and bolt-on there. here

side barge the around on this large we've on we to side. mainly As for we is approached for this, we've and bolt-ons the hubs, sorry, the regions, we example, Arizona, look like where in it. and said bought, – in certain And before, aggregate build then hubs way

we our seeing So, of are regions. many smaller bolt-ons in

to things M&A, on in the recently, a on the high. to options on multiples of capital have side ones organic balance bolt-on return and moment, very the smaller reasonable. an be better in And seen we at going continue aggregates. mainly the a on one example, not disciplined. project. that's stay we're small too allocate sheet. the bolt-ons, continue though as seem ones, stay did recycled to capital. will Arizona are be we to a to – each But only for us terms When the of Even we going Multiples we important, have few disciplined of measure And strong We're the do larger as to

And around with time, in recycled land. aggregates It's same that we're some a opening our Arizona natural came at the very small aggregate. one

to do mainly bolt-ons for to but looking natural is in in each larger, markets smaller, and recycle some bolt-ons, try presence the we're complement what the of some moment. our and at So, one

Stefanos Crist

Thank you.

Operator

time, to additional At questions queue. I Thank in the remarks. show any no Drabek you. Erin closing call over for turn this or further I'll back

Erin Drabek

We Thank our quarter next you this call. quarter. for talking you and forward joining full-year for morning us to fourth earnings look to again

Operator

This concludes your call. participation. Thank today's you for

time. may You disconnect at any

Arcosa (ACA) 24 Feb 232022 Q4 Earnings call transcript