ACA - Earnings call transcript Q4 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the Arcosa, Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Britney, and I will be your conference call coordinator today.

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

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

Erin Drabek

Fourth A XXXX everyone, and President today remarks. and morning, and Gail you will Carrillo, joining Good Peck, follow and CFO. prepared thank are Antonio Full session Call. Earnings Arcosa's Year CEO; With question-and-answer me for Quarter their

Investor X slide and the of Relations the in the Instructions next press tab. ir.arcosa.com. available Events website X number posted replay release the presentation be the will are for of and our are be this available for copy of weeks. A included on replay for yesterday our accessing website, webcast year A will today's A News press the call release. on replay morning's under issued call the for

to with are the in Today's of non-GAAP slides been comments and slide presentation measures prepared closest financial measures not appendix GAAP. of Reconciliations in have the the that GAAP accordance presentation. contain financial included measures

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

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

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

Antonio Carrillo

full fourth I delivered financial with results our full we you, strong in joining quarter discussion you our us and XXXX for Good results both today and and and a everyone, XXXX. on the am year. the thank for Thank for quarter fourth outlook pleased Erin. morning, year

me with few X. Page a key start on highlights Let

our while word, expanding successfully our as growth was businesses strategy pivotal in cyclicality. for on was First, complexity a executed our optimizing and portfolio overall It about we by reducing year transformation. XXXX our a Arcosa of

we double-digit organic which underscores growth, of the delivered strength portfolio. Next, our infrastructure-led

driven And acquired helped a noncore contribution the undertaken was significant initiatives demonstrates commitment we free generated the to divestiture XXXX by robust reducing in balanced finally, organic higher-margin our continued XXXX improvements, expansion we up and Arcosa other flow, and businesses which have from and Third, years. leverage we assets cash few past growth margin over in in part of by beyond. and for sets

Structures. were materials changing our into acquisition earlier a Engineered Please poles of lighting that markets. increased There business, important infrastructure-led to within construction Ameron drove and our less in our largest existing and The Both number foothold to strategic MSA, complementing expansion. are turn our for Ameron in product performance. our Stavola aggregates The expanding cyclical contributing positively conference the traffic to year exposure established game with acquisition was Stavola markets, signals Slide initiatives margin nation's footprint attractive X. of the of the

Florida. Also, impact positive structures, our production in will produced on first margins our we which concrete We which we several progressed new important expect wind in in initiatives, have also the pulp in organic from ramp-up New tower include, our XXXX. a towers in new facility utility Mexico, plant on

specialty business, operation materials our we In in and our expansion Texas up cluster construction fully aggregates greenfield ramped in our Oklahoma.

recycled current operational facilities footprint. aggregates to several We adjacent also started our

Ameron, in support beyond. These Stavola will our XXXX together and projects, with and organic growth

of about the in of completing operation divestiture XX% company XXXX. the small geographies. subscale of simplify Today, the resilient, cyclical larger, adjusted accounting we're our during in nearly our strategic components with less underperforming sale portfolio our a during closure in of XXXX, more for we year, continued asphalt on EBITDA, some contributed by the On the were we pruning the not and which business. resulting X/X steel the Construction Also to focused aggregate double sale locations side, it assets, Products

Please combining organic to acquisitions EBITDA optimization revenues, disciplined deliver with X. full important, between XXXX. the of our full Equally adjusted business. underscoring XXXX EBITDA year split gain our record solid large to executing margin portfolio and core strength strategy inorganic for was components against growth investments divestiture drivers, Slide the turn XXXX year normalizing combined and the Consistently steel in and and sale of in evenly land organic

adding In first performed adjusted margin Stavola impact EBITDA ownership, growth, the ] of during accretive by EBITDA enabling excluding of fourth contribution. our leverage the fourth nearly net steel the full significant of saw flow in cash resulting our of quarter we free quarter We well repayment X.Xx. points million, components. quarter, with expanded finished [ the revolver, year XXX of strong $XXX

far, sheet we return X of As of to we're we'll continue progress, of excellent target within leverage repayment balance finishing projects underway for to months a and our long-term prepare prioritize reminder, continued we growth. Thus to the the closing intend to making debt to XX the organic and Stavola. X.Xx have

in extremely will results I'm Gail more quarter call XXXX. to fourth Overall, detail. discuss to proud turn in the over segment of I now our our accomplishments

Gail Peck

begin I'll Antonio, good you, Thank Construction and XX. morning, Products with Slide everyone. on

attributable expansion. XX%, resulting XX% points segment revenues, was margin of which Stavola, margin while of adjusted EBITDA revenues in The Fourth of the and performance accretive the EBITDA adjusted basis expansion XX%, increased segment XXX segment basis impact of grew segment largely to contributed XXX segment quarter. points of in XX% quarter segment

line results The with integration of Stavola our expectations. is overall fourth financial progressing in well and quarter were

is X%, gains This On strong underperforming revenue, in earlier businesses. an freight pass-through, operations to lower due a decrease and the and the declined specialty segment which offset partially aggregates year. revenues of across by divestiture primarily materials our basis, was organic pricing

EBITDA on declined XX organic Although X%, roughly margin improved year-over-year. basis segment basis organic adjusted an points

of a was organic Turning was up on to low contribution quarter of mid-single average double decreased our the both pricing, our Stavola, while up to to due aggregates year. digits natural due volume prior pricing the aggregates, business, digits organic focused heavy organic and of volume optimize organic and our Texas and which from Total lower fourth the includes in in strategy basis recycled gains closure operations earlier days, the number during year. margin operations unit aggregates to profitability pricing, actions rainfall XX resulted drove higher and points quarter. fuel mid-teen Strong expansion costs the segment West of

volume, XX% pricing about showing. year, decreased the year acquisitions, grew an growth approximately X% the roughly was volumes For full Total flat of organic basis. for organic with pricing the to on similar inclusive and

a by as equipment the downtime January. gains for work lower aggregates prior-year were compared business of Adjusted to revenues and materials, pricing flat required revenue. strong returned in primarily declined due one been at has specialty EBITDA to This facilities Within operations to roughly quarter the freight mostly lightweight completed upgrade. were offset normal our for planned

adjusted adjusted trench-shoring in flat, product was roughly and business to primarily margin dilutive Finally, due slightly for revenues our the to the were for and EBITDA business quarter. mix EBITDA the segment,

reduced Structures declined inorganic segment Revenues was which to to impacted business. Ameron. wind was our in prices, structures related utility and increased Engineered increased our structures on the operating expanded the business The higher the in XX%, Ameron, acquired segment XXX and in largely our which from volumes Revenues volumes. Slide in in from for and wind our to product This Adjusted Mexico, resulting which prices last steel ramp due tower average was enhanced XX. impact April. predominantly New to tower Moving quarter and wind improvements growth and basis due utility selling points. utility from new the quarter, and businesses facility structures was the organic, contribution margins favorable XX% accretive by segment EBITDA in the mix positive growth lower

backlog of year $X.X the combined and and for ended billion wind to structures XXXX. deliver with XX% utility We expect during related

and on from We basis improvement steel Turning a were barge year-over-year ended We representing volumes year-over-year. XX. the Higher margin business. orders to and XXX efficiencies prior-year Products of a million almost $XXX plant XX% with X.X. year Transportation segment the during resulted the up the backlog doubled, adjusted Revenues XX% in excluding million, received for barge book-to-bill quarter, barge $XXX points Slide components of tank EBITDA of period. of improved up

some strong as our flow shown cash Slide improved and sheet I'll position, XX. balance now on on comments provide

quarter, we The tower quarter. million fourth $XXX of was capital driven year's businesses. due increase and barge primarily and flow, last our in During million operating wind a generated for the $XX $XXX cash receivables to by increased up in billings, largely working from advanced lower reduction million

million During the quarter, in at in sold a which credits, sold of quarter contributed The reduction tower were to wind fourth tax XXXX credits resulting a $X $XX discount, decrease EBITDA. million to adjusted the small receivables. AMP we

the cash revolver. from million $X million down million, This quarter, $XX used was to free fully prior quarter to fourth for translated which of our repay $XXX the for we CapEx the period. flow

free $XXX full year. year, For cash was last from $XX the million million, flow up

We EBITDA end year of the quarter. the with from net X.Xx, debt are adjusted pleased start of to the to X.Xx at down

to near term. being debt the respect are with We in disciplined prioritizing deployment, capital reduction

expect between maintenance as deleveraging invest million million, in in finished the We growth down predominantly additional $XXX full during we For the year XXXX, from half million CapEx XXXX, needs second projects our for of across year. we of flight. $XXX and portfolio $XXX anticipate to

are is located quarters. business important and modeling to few the third in quarter Northeast, is a seasonality breakeven with our brings strongest the seasonally up operations in first highlight in purposes. that to wrap I'll the portfolio. for whose a roughly final Stavola and more Stavola, second It comments

full While EBITDA in adjusted Stavola Products approximately their the operations margin for by is first expect to points dilute basis XXX quarter. year, accretive we the Construction segment to segment

primarily long-lived fourth depreciation, increased the markup XX% required to the and amortization acquisition assets. approximately year-over-year, quarter fair including expense value for depletion activity, of recent In XXXX, due

from year expect amortization $XXX XXXX, to $XXX full and depletion to million range For we expense million. depreciation,

of XX% XX%. XXXX, effective see X.X% normalized tax expenses year-over-year. approximately million, we $XX And For more a last, expect corporate rate about of to up we

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

Antonio Carrillo

XXXX. in every is in as in smelter is a we Mexico, with supported is even U.S. the are Gail. operates, X attractive Everything The only infrastructure-led in market, by on you, product and and Arcosa as we XXXX position manufacturing is we Canada which U.S. long-term plants mine in over rolled Mexico. Arcosa made focused Thank company Almost growing X locations Of actions make, the U.S. XXX steel steel. took is the in well investment. enter else

prepared uncertainties. So against well the trade is we tariff and believe the company current

However, many and being risk including that the surrounding by unknowns retaliatory discussed impacts, Mexico. there of the are trade are policies potential

needed will making closely watching So and as we the be the adjustments developments come out. details

future of any in -- benefit, changes, but of with potential from that trade, about could moment impact markets. too our positive to heavy burdens regulation also for reduced Like our the optimistic We're any growth. have bottlenecks regulatory XXXX estimate potential any it's many if The many in early infrastructure does either in or not regulatory negative. are a markets, review impact guidance I'll incorporate of

to Slide Turning outlook on XX. our

come XXXX. We in X expect sources growth from to different

and with materials entered Construction businesses. demand growth underlying the our and First, fundamentals. solid utility related year structures

backlogs the cyclical XXXX. for in support our Second, solid and growth barge wind towers businesses,

to Third, positively results acquisitions did projects solid contribute growth year should several organic the we important finally, XXXX. company we the last should for this in And year. 'XX bring finished in our

at which For $X.X anticipate in million, range $X $XXX of adjusted implies the midpoint. of range XX% billion in to the and to be EBITDA we million to growth to $XXX XXXX, be the revenues billion

Our growth from of double-digit X slightly as inorganic to additional and in benefit guidance Stavola inorganic we incorporates months weight with XXXX. a higher organic

is by In discussion outlook Slide business to positive. our Products, XX for turn outlook Construction our segment. Please a on

AI, spending of as centers infrastructure, increased selected continuation markets. investment data manufacturing as expect heavy We on the in well

about Additionally, regarding in housing -- the later recovery possible the year. in we're optimistic sector single-family a

and is a strategy initiatives. volume commercial growing Our pricing balance between

anticipate XXXX, business increase aggregates in we For in expect our strong XXXX. to volumes With aggregates benefiting double-digit mid-single-digit in pricing, Stavola. respect increases from we price

year's very and pricing year, last during we expect opportunities As are actions, additional we we set-up well given the XXXX. pricing start

adjusted creating and significant Cold and solid impacted profitability. expansion Margin be seasonally growth. segment's expect slow Stavola quarter, in impact to operations single-digit but growth our not Stavola For a organic team in the well lowest the weather unusual Construction and of January as year. the as high full by the we organic in start EBITDA year, higher has contribution from unit February, wet from accretive led will

second result, segment more a As third is the year-over-year for this and quarters. towards growth weighted

our business. demand. Moving to more Road continue to we infrastructure continues data Grid double-digit Engineered businesses. a in traffic healthy and initiatives, structures customer connecting impact our a more for backlog business spending margin favorable electrification, adjusted support Structures. Ameron, and to solid carrier should and center to the mix With utility of spending telecom accretive hardening structures growth renewable increased the and the positively drive growth expansion return to our grid impact normalized EBITDA related and energy expect

our driven growth towers, in backlog wind by supports For year the the New facility. ramp-up significant production another of Mexico

assumes a dilutive the small margin, guidance spreads slightly segment accelerate to at sell A&P tax -- Our is which be but we XXXX our deleveraging. will but will discount,

We continue -- further growth wind discussions to remain meet the towers wind We confident to orders in about beyond. that customers needed load investment with the XXXX additional our and U.S. energy for demand in in is

this the discussed have in business every we past, receives is that a quarter. not As orders

projects. us the expect be What's they the that will by with visibility provides clear, conversations becomes our environment to to the and orders on multi-plant we multiyear, for Therefore, regulatory down. wind have remember large goes good to important good current have settle impacting year industry we the placed have we the constructive more backlog able time XXXX, historically for customers. so have is customers regulatory as visibility with that Our when environment

Last, the Products, underinvestment inland the has barge over in river several fleet years. Transportation experienced past

As fleet a pent-up aging, replacement needs. is result, creating the

the Our we barges, positioned production current booked delivery have quarter, for for orders XXXX. time us quarter. tank million end hopper sold of into XXX third with barge On order through well the the XXXX. current rate, new we're year a the the at backlog backlog of of out at On barges, tank our and XXXX, end for goes deep has the additional some since

go inquiries to barges. customer It especially prices is customers possibility steel horizon, message the steel that the will for as our tariffs that strong, tank is giving important mention up. we're probably continue on be to a With

So aging to will wait continuing an time. to replace get more fleet expensive over

mix EBITDA barge -- the more will be expect we product growth we back-half adjusted in first through adjusted the headwinds that business, go year. of our will For be weighted part as EBITDA some more

what well-positioned some beyond. what XXXX. In am regulatory they closing, excited and is even tell we there accomplished all Arcosa for believe thank about we're continued and want I'm I our uncertainty, for growth, short-term though in of seeing how employees is and to I XXXX proud

your ready now We're answer to questions.

Operator

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

Ian Zaffino

understand How all then for that. much the I that? prices on Thanks appreciate Question in drove color. did volume steel steel revenues? decline components. the impact the what And maybe help us decline,

Gail Peck

is referring the to Structures relates this And you're Ian, our I'm Gail. impacts revenue? to on segment as steel-related it assuming Engineered

Ian Zaffino

yes, Yes, that. steel then and -- sorry about and

Gail Peck

in the our I the came for that about that Sure. at the I attribute -- would we we did full and say, guidance Engineered as a little were revenue on in yes, did the the steel. We would fourth volumes bit the the mostly tune But the price And so Structures, bit would weather. and attribute side. a I by really Construction did miss by year, million see of of below to million little to -- predominantly, -- quarter, $XX miss $X we're midpoint. mostly revenue or was to maybe steel that impacted revenue miss

the And would No little we say XX% prices. price. a it for steel steel single not I digits attribute to would had impacted transmission surprise But at around decline there. revenues, I impact for border slowness quite high bit say the would That but certainly year-end. revenue. of I year-over-year a

Antonio Carrillo

volume, very, The it's pole from you to a to you range hard give build, tower color. little to And we And transmission Ian, when a very large just small very measure towers. big small compare structures tower. to a distribution more they

the see volatility will not there's the you in one. production sometimes and complexity the changes, So volumes this but of only as mix each also, -- you size,

So on side. it's volume normal have some the volatility to

Ian Zaffino

no so profit Okay. was And I clear, steel another there's to I in then just be if just really add to XXX% is pass-through, much pretty decline that impact? guess, question. And prices

might type and maybe something price? up, on lock lower steel maybe steel, steel or activity, a are concern in now go they prices now general then seeing on Just that at prebuy of build you any like can

Antonio Carrillo

I'll give you -- yes.

on So when the depending business. --

types of with full some delay. pass-through where We have business steel. X a have on One, we

through the them, price one the let's So if there's we And transmission agreements. no pass remains pricing of in price is down up. where industry adjustment. a once you relatively, close But band, have it relatively moves, the or say,

goes in saw quarter. price you will you our that's pass-through. it's see you fourth what saw margin what a when the So increase down, And because basically

wind other is where for products both steel That's businesses pricing there's barge have and works with like prices. agreements -- specific steel pre-buy we no the there like and in mills the then that. barge wind, On specific and volatility

up, seen we comes prebuy, me now. that well, prices we might saying, the fixed -- now barges up. right all to sold let's something to deep specifically have delivery continue from get tank But people barges. of into some the in let for for On expect say, time and my orders XXXX. not my additional, expectations demand that -- mentioned because steel it's is I steel now that going our go not barges, And the some right it's we additional comments take with easy

Operator

Trey from take We'll with our Stephens. Grooms question next

Ethan Roberts

the still the sentiment. previously This is What Ethan the from up. Curious how year to And curious kind case. picks I'm current being really quickly outlook. has as wind customer where administration for of you on hearing the wind wanted Trey. elaborate we know if customers? I are you impacted just XXXX on pointed that's to on just

Antonio Carrillo

or very in a behind you in the receiving is the data if for debate sentiment X% that is any years. X demand order optimistic. demand little in be growth What centers reason will queue turbine you're the And would contribute growing. wind, renewables, XX is it is And years continues now, already. the power. there. be XX% load significantly still the will need it, the energy I we're XXXX say specifically hearing a the whether in if the U.S., can the That's from the growth for increase irrelevant. for right to U.S. for And in you're What's not or that in important, gas customers

is wind for So the need there.

clarity. some I think just additional we need

year And if I relatively installations the we think seeing in XXXX, the a is probably that growth at should you what's initially we this receive -- at XXXX, they additional look customers happening, expect growth 'XX. what you when And are what it total if in we've we wind think mentioned about in expected of orders the end from flat is comes, year. for

where environment see the Let's regulatory ends.

think But backlog to I support the have our production we this year.

backlog in years. for it have that We supports facility another several

shape good So wait strong year think regulatory to wind in up. stay a focused and and is I to have important the growth. this is see we backlog What's the and the we're generate environment demand where for ends there

Ethan Roberts

Awesome. just secondly, then switching Products. gears And Construction to Okay. encouraging. that's Yes, really

curious your on Just outlook.

You really gave some good mid-single end-market was commentary, and pricing on digits the helpful.

certain of to guidance, growth. curious be certain in implied XXXX portion unit to profitability a tied, organic thinking XXXX. how the increase, similarly, within a portion guidance, being of that tied the that Just to how might XXXX you compare you're And the EBITDA about within mentioned on and

you're about most So just wondering might thinking towards. that heavily that concentrated segments which be

Gail Peck

we Yes, the outpacing about that. 'XX, comments, teens we said think at revenue midpoint, take as growth. at and I'll the Gail. looking overall, growth we're in EBITDA is our XX% This

piece have We from and Ameron that say growth for we that another margin did that's is year. primarily total. primarily Stavola. XX% strong was that organic benefit expected didn't XXXX inorganic. do of we But in And last So Stavola. quarter And XX% inorganic growth that split

from XX% so we And coming segment. see Products the to the on organic XX% about your question side, that of Construction growth

We growth price ahead script, for So mid-single in to about single-digit the as we're digit high expecting Construction said of segment. Antonio organic on said so price, inflation. his

expect organic profitability within gains Products. Construction on so we And unit basis an

Engineered that of overall XX% I Structures the from of segment. the be slice I'd good is growth about in we Engineered commentary coming coming big organic pretty going some say to other from Again, gave is script. growth The Structures. the think

have adjusted growth the heard double-digit growth that for EBITDA in XXXX. tower, structures expect business We you and Antonio that on within wind utility just and strong significant based saying in visibility we

the growth for about growth barge last the the organic come within of company. And of will then overall that's remaining the business. business from Products Transportation That's the and the piece our segment, X%

Operator

We'll Capital from next with our question Markets. Garik take Loop Shmois

Garik Shmois

I hoping you to some you've just a the on Construction you're and of year for quarter weather some 'XX, coming this I year. recognizing the off fourth what both more color follow could in Products. on softer up was you're wanted expecting start of delays provide volumes, in had

you're how this on basis, year. to progress Construction demand wondering Products, Just more you organic an specifically how and thinking, expect aggregates,

Gail Peck

take I'll Yes. that, Garik.

some As basis we said dissimilar for larger in double-digit see we organic up peers, too the basis in Construction. organic a growth volume within from volumes flattish XXXX. from a maybe from of basis, perspective on our strong total I'd kind slightly an on to script, not an of say

area, the a say did complete any the deterrent rainfall where of And days. means, coast quarter, the wouldn't rain I heavy weather quarter quantity the as the but days, we Tennessee have exited by year, had to but relates we was in number along for Dallas have only for the rainfall some not did of some in we fourth days, it we heavy the quarter the we the had. area, some, the

did that the fourth volumes So impact quarter. in

we did year exiting see organic on on the an year-over-year down a volumes So basis. basis,

Garik Shmois

That's Okay. helpful.

Gail Peck

listened you've of calls cold January a weather. that add Maybe were a because wet little by materials from be and one purely and February lot weak now. lost, know just point just to to more shouldn't I

here a the organic year. slightly the not quarter, a So that's bit up we're volume first in of But outlook January little and with start for the the in February. weather flattish of basically -- it's unusual not to but slower some

Garik Shmois

CapEx. conveyed just to looks message I has year. wanted to just wanted to by It million $XXX this million. a taking others. step been on And up I to it's that, Yes. $XXX follow down like certainly that confirm

And then projects in 'XX. up I remarks, talked you about in also that prepared you think the some wrapped

to them expect in 'XX. contribute You

into earnings accretion Just the level and more you wondering or the completed this of if that a around contribution expect last you year could little go projects detail bit capital those were year. projects from

Antonio Carrillo

that. take I'll

let So -- the stepping yes, down. me CapEx, with starting we're

As we mentioned, focusing on Stavola, delevering. since bought we we're

maintenance CapEx. So CapEx, what a projects few and was is do we're small cutting We it's the have not to really growth underway we have some growth finish CapEx, things. that

bought Stavola, we good to when mentioned going we leverage that And expect growth all XXXX. And finishing organic we at because about said that very we felt X in areas. were my projects help these we I in from increasing our remarks, different us were time

growth Engineered growth expect growth our from and We businesses wind and from Construction, the backlog, barge. Structures businesses, because our cyclical of

built should years they And contributing. projects growth organic the and few last these we that the expect start acquisitions. We finally, from

I the On similar to factory my -- projects, will portfolio. mentioned in organic pulp the margins of be has the in That built rest our concrete also product Florida. the prepared remarks

will the the So to business, EBITDA the increase -- be will but it's margin flat relatively be will it the but be probably -- -- it for segment.

Gail up, in segment. mentioned plant tower it's to accretive remarks, as by that's ramping being wind her the The

margin than in business. the ramp plant mentioned up We small the of as aggregate ramped other that projects. us that rest the the a we help in up Structures. New a We plant Engineered was So a has than small in few similar increase but on that Mexico, it's margins And in materials. margin, is small few specialty margins very well a doing to very, fully the very one plant Oklahoma. plaster segment lower be to operational going that little -- accretive and now the The is should

the accretive recycled plants also are year aggregates And we margins. finally, started to that last small

start I good mix the it's that were returns of invested it's So of years. they when And that prove of we projects couple we a getting time think good over last the and lot to a deliver. now

Garik Shmois

appreciate Nice and Sounds the of best good. all I color. luck. quarter

Operator

Julio our Company. & take question from Sidoti We'll next with Romero

Unknown Analyst

This is Justin Julio. for on

expected. So seasonality on impact on mentioned Stavola, you Stavola the performance

the of the So the you first aggregate And do overall offset how contribute facilities XXXX? to expect I help in to seasonality? guess, organic might performance half facilities these recycled

Antonio Carrillo

facilities natural the are recycle Northeast, -- recycle are the aggregates. have they will similar as the have we Well, facilities in seasonality

is shut comes down weather So construction, what from. seasonality that's and what it's the really -- happens that the

no, They don't I would offset facilities expect the recycle So similar seasonality Stavola. to in our have region.

Gail Peck

just that, add did a the prepared in in a maybe headwind in contributing the from And breakeven basis to the are as breakeven they we quarter first revenue, say a to we first XXX quarter. operation essentially on expect do Stavola that point remarks operation, some but

Unknown Analyst

$XXX the is depletion amortization And of then $XXX and to updated on than guide guidance, we saw expense million depreciation, million, meaningfully higher our expectations.

as modeling attributable the and So how to should when rate for normal beyond? how consider this is run much And we directly this increase of Stavola? XXXX

Gail Peck

step-up That's really a to that because question. a that saw increase And on as would really attribute And wanted that most there the good assets, in item. is XX% write-up predominantly in there. change XXXX a Stavola. clear drives and the their you notably, I be with And related of reserves, to That's is we expectations, line that that very is expense. Yes. why our to in what expense the quarter fixed fourth well our the depletion

normalized fairly run a on that a consider would go-forward rate I So basis.

Operator

next ] Belize We'll [ take question our D.A. with John Davidson. from

Unknown Analyst

of prices let and, you therefore, to you about kind them when Regarding possibility go about the steel what feedback the up? customers know from of receiving barge, prices could you're barge talk

Antonio Carrillo

would very I -- different circumstances in hopper and barges. tank

with Let hopper. me start

more, they I people price sensitive so price, prices about steel more to still hopper are are coming and down thinking think are say, think I let's is concerned a increases. that little

the when things. you for tank the mix, On X customer side, at look barge

Coast certification on tank their a the cetera. by lot involved regulation Guard, On there's more et barges,

flexibility much they how less the barge of they are age barges state the operating. and that they on of the So the can have let the and quality barges

less have they options. So

watching customers, industry they're the to But these a going barges players, and start concern hoppers right lot sense about now, to be And production a barges I talk don't there's they steel a look amount of at especially lot what the right now, when barges supply be replaced. at always problem up. whether years. if need capacity course, all customers capacity tank, you going to tank need now, have there's replaced of and barge concern over to you prices. that the Of the barge there's X getting when about to side, that both the manufacturers think be to I a capacity on the the ordering look I be of that next

think that's in some I are barge what you're that. trying people anticipate to that backlog, seeing So our

people step. But there's look much I barges to you point, you not think need the of be are a have can replaced, taken the at at wait. some that when -- how amount hopper not limit that of

as course, down, barges, my wise tariff I not I But now, come especially buy waiting option. mentioned very threat with don't So of a in prices see to it's if so. steel remarks, the right

Unknown Analyst

your growth in little to the materials the Products, more for natural color specialty you aggregates a you relative switching see Construction recycled to could operations? And and provide sort of

Antonio Carrillo

Yes.

a natural a would is demand lot little towards I our infrastructure driven So that on weighted materials, on It's specialty aggregates. infrastructure the say lightweight more more than the aggregates.

infrastructure have higher We projects. mix of a

housing. -- geared And which is our On it's doing specialty finished plant, multifamily materials we very, toward we mentioned well. side, very plaster I started mainly the

at meeting when with the good margins, very the well, expectations it. is had capacity, running we very full we to -- basically expand have invested money the We plant

as I that our products have. specialty it's in I more and So from And said, infrastructure. think, overall, other growth our on materials, we specialty expect the focused coming solid expansion they materials

in bullish very U.S. on the infrastructure we're spending So

So well. it very should do

Unknown Analyst

could I already Within quarter? if you And the right. were more. volumes Structures, and I you about in why All and utility related squeeze could apologize one structure lower talk but over Engineered fourth if this, went

Antonio Carrillo

production sales mentioned little on bit. year and the mostly issues the I of a couple side from was There a steel. in at which Gail border, of Yes. the end mentioned the things, slowed down side some the were our revenue

mix, production small very and and volatility the we because to pole. and product volume and size that of But very very not complex, in go it's poles of the complexity large the the we that see poles, I mix also through, abnormal simple make the the mentioned very

just, based happened. It's think, product volatility it's on nothing normal there special was So mix. that I

Operator

over further We the closing I'll in for program back no have Drabek turn the queue. questions to remarks. Erin

Erin Drabek

Thank you full Thank for look update quarter another year our and fourth And for morning update. first forward to call. you. you in joining we Arcosa this providing quarter our

Operator

program. for your Thank conclude you. you This Thank does today's participation.

any disconnect time, may have You day. a wonderful at and

Arcosa (ACA) 28 Feb 252024 Q4 Earnings call transcript