Arcosa, Inc. Q1 FY2025 earnings call

• Antonio highlights strong first quarter results, solid execution of strategic vision, with consolidated adjusted EBITDA growth of 26% excluding divested steel components, outpacing 12% revenue growth and expanding margin by 190 basis points. Stavola acquisition integration progressing well. Legacy business strong with organic performance led by engineered structures and construction products. Transportation products barge business solid. Maintained leverage at 2.9 times net debt to adjusted EBITDA. - Gail details new revenue disclosures for aggregates, construction products segment performance including aggregates, specialty materials, asphalt, and trench shoring, engineered structures growth driven by Ameron and wind tower ramp-up, transportation products backlog, leverage and cash flow including liquidity, working capital, CapEx, and free cash flow.

Construction Products: First quarter revenues increased 5% driven by Stavola. On an organic basis, segment revenues declined 6%, with about half the decline from lower freight revenues and divestiture of underperforming operations, and the balance from higher pricing offset by lower volumes. Adjusted segment EBITDA decreased 5% due to inorganic impact of Stavola, but on an organic basis, adjusted segment EBITDA declined 2% with organic adjusted segment EBITDA margin expanding 100 basis points. Aggregates represent 69% of construction materials revenues. Engineered Structures: Revenues for utility wind and related structures businesses increased 23% due to higher wind tower volumes and Ameron acquisition. Adjusted segment EBITDA increased 90% and margin expanded 650 basis points. Ended the quarter with combined backlog for utility wind and related structures of $1.1 billion. Transportation Products: Revenues were up 6% and adjusted segment EBITDA increased 13%. Barge orders totaled $142 million during the quarter with a book-to-bill of 1.7, and ended the quarter with a backlog of $334 million, up 19% from the start of the year.

• Reiterates full year 2025 guidance: anticipates revenues of $2.9 billion (up 17%) and adjusted EBITDA of $570 million (up 30%) excluding divested steel components. Anticipates double-digit adjusted EBITDA growth from legacy operations supplemented by 2025 acquisitions. No material direct tariff impacts expected as primarily source steel in US and USMCA compliant products from Mexico are exempt. - Expects construction products to perform well in stronger second and third quarters, significant adjusted segment EBITDA growth from Stavola acquisition and high single-digit organic growth, maintaining aggregate pricing outlook of mid single-digit appreciation and solid double-digit volume growth. - Engineered structures see strong demand in utility structures driven by electrification, grid hardening, and renewable energy, with long period of sustained demand for utility poles and ramp-up of New Mexico wind tower facility. - Transportation products barge business sees aging fleet and replacement needs, with tank barges having consistent demand and dry barges sensitive to steel prices and trade policies, but signs of easing in steel prices.

• Macro-economic and policy environments evolving rapidly, which could impact business. - Steel price volatility and potential trade policy impacts on barge business, including dry barge sensitivity to steel prices and trade talks.

Q: Julio Romero with Sidoti & Company asked about engineered structures segment, specifically wind profit jump and volume improvement.

A: Antonio and Gail discussed inorganic impact from Ameron, revenue growth visibility, margin improvement in utility structures, and that wind and Ameron are accretive to segment margin.

Q: Brent Thielman with D.A. Davidson asked about engineered structures EBITDA margins and construction products business.

A: Gail discussed monetization of tax credits and margin targets for utility structures, while Antonio talked about Stavola's ramp-up, demand in the northeast, and expectations for the rest of the year.

Q: Garik Shmois with Loop Capital Markets asked about aggregate pricing and segment margins.

A: Gail and Antonio discussed aggregate pricing mid-single digit appreciation, full year outlook, and organic margin improvement expectations.

Q: Ian Safino with Oppenheimer asked about aggregate pricing and mid-year price increases.

A: Antonio talked about balancing price versus volume, local decision-making on pricing, and process of managing business locally.

Q: Trey Grooms with Stephens asked about legacy construction products business trends and input costs.

A: Antonio and Gail discussed demand trends, housing market outlook, and relief on input costs year-to-year