- Revenues and Adjusted EBITDA in Line with Last Year’s Record
Results Demonstrating Resilience of the Company’s Infrastructure
Businesses
- Construction Products Adjusted EBITDA Growth of 17%
- Portfolio Shift toward Construction Products Advanced with $150
Million Acquisition of a Leading Arizona Pure-Play Aggregates
Producer
- Scaled Entry into Attractive Phoenix Metropolitan Area
- Healthy Balance Sheet with Pro Forma Net Debt to Adjusted
EBITDA of 2.4X, within Targeted Long-Term Range of 2-2.5X
Arcosa, Inc. (NYSE: ACA) (“Arcosa,” the “Company,” “We,” or
“Our”), a provider of infrastructure-related products and
solutions, today announced results for the quarter ended June 30,
2021.
Arcosa also announced that it acquired Arizona-based Southwest
Rock Products, LLC and affiliated entities (“Southwest Rock”) for
$150 million. Southwest Rock is a pure-play natural aggregates
company serving the greater Phoenix metropolitan area with five
active sand and gravel locations and one hard rock quarry producing
approximately five million annual tons of construction aggregates.
Southwest Rock had trailing 12 month revenues of approximately $36
million and Adjusted EBITDA of approximately $14 million as of May
31, 2021, implying a purchase price multiple of 10.7X Adjusted
EBITDA.
Second Quarter Highlights (All comparisons are versus the
prior-year quarter unless noted otherwise)
- Revenues of $515.1 million, up 3%
- Net income of $20.8 million and Adjusted Net Income of $29.1
million
- Diluted EPS of $0.43 and Adjusted Diluted EPS of $0.60
- Adjusted EBITDA of $78.9 million, in-line with last year
- Operating cash flow of $50.7 million and Free Cash Flow of
$29.1 million
“Our second quarter results reflect the resilience of our
portfolio of infrastructure businesses as we executed successfully
and kept pace with last year’s record results despite some
headwinds,” commented Antonio Carrillo, President and Chief
Executive Officer.
“Construction activity was strong overall, with some offset from
abnormally wet weather during the quarter, especially in our
largest markets within Texas and along the Gulf Coast. The
integration of StonePoint is progressing smoothly and performance
is tracking well against our expectations, adjusting for the wet
weather.
“Order activity for our utility and traffic structures
businesses was very healthy during the quarter as growth drivers
remain intact. We are also encouraged by improving fundamentals in
the North American railcar market, with orders in our steel
components business outpacing shipments during the quarter.
“We continue to confront high steel prices. On a positive note,
we have been able to proactively raise prices across most of our
steel manufacturing businesses to help mitigate the impact on
margins. While long-term fundamentals remain strong for our barge
business, high steel prices continued to depress order activity. As
planned, we will idle our Louisiana plant in the third quarter, and
we have taken additional steps to strategically extend our backlog
into 2022 to allow time for a market recovery.”
Carrillo also noted, “I am excited to announce the acquisition
of Southwest Rock, which is an excellent strategic fit for Arcosa.
The business is aligned with our strategy to reduce our cyclicality
and enter new and attractive geographies. Southwest Rock has an
experienced operating team, a strong footprint in the high growth
Phoenix market area, and a pipeline of actionable bolt-on
opportunities.
“We have made considerable progress advancing our portfolio
shift into higher margin and more stable Construction Products.
Since our spin-off, we have invested approximately $1.3 billion in
construction materials acquisitions, which has expanded our
Construction Products businesses to now represent more than 50% of
our Adjusted EBITDA.”
2021 Outlook and Guidance
The Company maintained its 2021 full year Adjusted EBITDA
guidance range of $270 million to $290 million. The guidance range
incorporates Southwest Rock’s expected results from the date of
acquisition.
- Full year 2021 Transportation Products Adjusted EBITDA guidance
revised to approximately $25 million from prior guidance range of
$35 to $40 million due to lower production expectations for our
barge business as high steel prices continued to escalate in the
second quarter suppressing new order activity and profitability on
the orders received.
Commenting on the outlook, Carrillo noted, “Our 2021 Adjusted
EBITDA guidance keeps us on a path to meet or exceed 2020’s strong
results, despite additional weakness in our barge business and
higher raw materials costs.
“Overall, our key growth businesses, Construction Products and
Engineered Structures, remain positioned well for the future. While
high steel pricing has curtailed order activity for some of our
business lines, our outlook and longer-term fundamentals remain
strong.”
Second Quarter 2021 Results and Commentary
Construction Products
- Revenues increased 38% to $204.5 million, primarily driven by
the acquisition of StonePoint, a top 25 U.S. construction
aggregates company acquired in April.
- StonePoint expanded our footprint in Texas and Louisiana and
provided entry into Tennessee, Kentucky, Pennsylvania, and West
Virginia.
- Demand was generally stronger across our natural and recycled
aggregates businesses serving construction end markets, but
excessive rainfall during the quarter impacted sales volumes,
especially our operations in Texas and along the Gulf Coast.
- Revenues from our specialty materials businesses increased from
strong volumes in our lightweight aggregates business and product
lines serving building product end markets.
- Revenues from our trench shoring business increased 43% as
volumes recovered to pre-pandemic levels.
- Adjusted Segment EBITDA increased 17% to $45.1 million,
excluding a $4.7 million cost impact from the fair value markup of
acquired inventory.
- Segment margin decreased to 22.1% compared to 26.0% in the
prior year. We estimate the adverse weather-related impact to
Adjusted Segment EBITDA was $3 million to $4 million during the
quarter. Additionally, Adjusted Segment EBITDA was impacted by
higher fuel prices.
Engineered Structures
- Revenues increased 9% year-over-year to $242.5 million as
pricing increased across all product lines driven by higher steel
prices. Increased volumes for storage tanks and utility and traffic
structures more than offset lower anticipated volumes in wind
towers.
- Revenues also included a $7.7 million one-time resolution of a
customer dispute from 2019 in our wind towers business. These
towers were removed from our backlog in 2020, and we maintain a
good commercial relationship with this customer.
- Adjusted Segment EBITDA increased 25% to $38.0 million,
representing a 15.7% margin compared to a 13.6% margin a year ago.
The increase in Adjusted Segment EBITDA was primarily driven by
higher volumes and margins in our storage tank business and
proceeds from the resolution of the customer dispute.
- Order activity for utility and traffic structures was strong,
reflecting grid hardening and reliability initiatives within the
utility industry and favorable road infrastructure investments in
Florida as well as other southeastern markets.
- The combined backlog for utility, wind, and related structures
at the end of the second quarter was $348.5 million compared to
$379.5 million at the end of the first quarter of 2021.
Transportation Products
- Revenues were $68.2 million, down 47% year-over-year. Barge
revenues decreased 54% driven by lower hopper and tank barge
deliveries as COVID-19 and increased steel prices limited demand.
Steel components revenues declined 9% representing the slowest rate
of decline in two years.
- Adjusted Segment EBITDA decreased 73% year-over-year to $5.8
million, representing an 8.5% margin compared to a 16.5% margin a
year ago. Segment margins decreased due to declines in operational
efficiencies from reduced capacity utilization.
- The barge business received orders of approximately $55
million, for a book-to-bill of 1.1 on a low level of revenues.
Pricing of the new orders reflects weak current market conditions,
with the orders providing a base level of production in 2022.
- The barge backlog at the end of the second quarter increased to
$139.4 million from $133.2 million at the end of the first quarter
of 2021.
- Order inquires for steel components increased during the
quarter as the new rail car market continues to show signs of
improvement, and third-party forecasts indicate a higher level of
North American railcar deliveries in 2022.
Corporate and other Financial Notes
- Corporate expenses increased to $17.0 million, including $5.8
million of acquisition-related transaction and integration costs
that have been excluded from Adjusted EBITDA, primarily from the
StonePoint acquisition.
- The Company continues to expect corporate expenses of
approximately $13-14 million per quarter for the balance of 2021,
excluding non-recurring acquisition expenses.
- We expect acquisition-related transaction and integration costs
of approximately $2 million per quarter in each of the third and
fourth quarters.
Cash Flow and Liquidity
- Operating cash flow was $50.7 million. Free Cash Flow was $29.1
million, with Free Cash Flow Conversion of 140% of net income.
- Capital expenditures were $21.6 million.
- We invested $388.7 million, net of cash acquired, in two
acquisitions that closed during the quarter, including the $375
million acquisition of StonePoint and a bolt-on acquisition of a
Dallas-Fort Worth, Texas based recycled aggregates business.
- In April, we issued $400.0 million of 4.375% senior notes that
mature in 2029 to fund the StonePoint acquisition.
- We returned approximately $6.9 million in dividends and share
repurchases to shareholders.
- We ended the quarter with total liquidity of $471.8 million,
including $100.3 million of cash, and net debt to Adjusted EBITDA
was 1.9X for the trailing twelve months.
- Today, we acquired Southwest Rock for approximately $150
million. The acquisition was funded with cash and $100.0 million of
revolver borrowings resulting in a pro forma net debt to Adjusted
EBITDA of 2.4X at quarter end.
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 5, 2021 to discuss 2021 second quarter results as well as
the Southwest Rock acquisition. 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 866-342-8588 for domestic callers and 203-518-9865 for
international callers. The conference ID is ARCOSA and the passcode
is 272672. An audio playback will be available through 11:59 p.m.
Eastern Time on August 19, 2021, by dialing 800-839-3013 for
domestic callers and 402-220-7233 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: the Construction Products
segment, the Engineered Structures segment, and the Transportation
Products segment. For more information, visit www.arcosa.com.
Kirkland & Ellis LLP acted as legal advisor to Arcosa on the
acquisition of Southwest Rock.
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,” 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 on Arcosa’s customer demand for
Arcosa’s products and services, Arcosa’s supply chain, Arcosa’s
employees’ ability to work because of COVID-19 related illness, the
health and safety of our employees, the effect of governmental
regulations imposed in response to the COVID-19 pandemic;
assumptions, risks and uncertainties regarding achievement of the
expected benefits of Arcosa’s spin-off from Trinity; tax treatment
of the spin-off; failure to successfully integrate acquisitions, or
failure to achieve the expected benefits of acquisitions; 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; 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, 2020, 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,
2021
2020
2021
2020
Revenues
$
515.1
$
498.5
$
955.5
$
986.7
Operating costs:
Cost of revenues
417.4
396.8
778.5
788.1
Selling, general, and administrative
expenses
66.4
53.9
122.8
105.7
483.8
450.7
901.3
893.8
Operating profit
31.3
47.8
54.2
92.9
Interest expense
6.6
2.8
8.7
6.1
Other, net (income) expense
(0.3)
(0.1)
0.2
(0.3)
6.3
2.7
8.9
5.8
Income before income taxes
25.0
45.1
45.3
87.1
Provision for income taxes
4.2
11.8
8.6
22.2
Net income
$
20.8
$
33.3
$
36.7
$
64.9
Net income per common share:
Basic
$
0.43
$
0.69
$
0.76
$
1.34
Diluted
$
0.43
$
0.68
$
0.75
$
1.33
Weighted average number of shares
outstanding:
Basic
48.1
47.9
48.0
47.9
Diluted
48.6
48.4
48.5
48.4
Arcosa, Inc.
Condensed Segment Data
(in millions)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
Revenues:
2021
2020
2021
2020
Aggregates and specialty materials
$
181.5
$
132.1
$
316.8
$
264.2
Other
23.0
16.1
40.9
33.4
Construction Products
204.5
148.2
357.7
297.6
Utility, wind, and related structures
191.6
176.9
355.6
353.3
Storage tanks
50.9
45.9
93.9
92.7
Engineered Structures
242.5
222.8
449.5
446.0
Inland barges
49.0
107.0
106.9
196.0
Steel components
19.2
21.2
41.5
49.2
Transportation Products
68.2
128.2
148.4
245.2
Segment Totals before Eliminations
515.2
499.2
955.6
988.8
Eliminations
(0.1)
(0.7)
(0.1)
(2.1)
Consolidated Total
$
515.1
$
498.5
$
955.5
$
986.7
Three Months Ended
June 30,
Six Months Ended
June 30,
Operating profit (loss):
2021
2020
2021
2020
Construction Products
$
17.9
$
24.3
$
33.7
$
41.1
Engineered Structures
29.1
20.9
46.6
45.8
Transportation Products
1.3
15.9
5.4
30.2
Segment Totals before Corporate
Expenses
48.3
61.1
85.7
117.1
Corporate
(17.0)
(13.3)
(31.5)
(24.2)
Consolidated Total
$
31.3
$
47.8
$
54.2
$
92.9
Backlog:
June 30, 2021
June 30, 2020
Engineered Structures:
Utility, wind, and related structures
$
348.5
$
352.2
Storage tanks
$
30.3
$
15.5
Transportation Products:
Inland barges
$
139.4
$
258.7
Arcosa, Inc.
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
June 30, 2021
December 31, 2020
Current assets:
Cash and cash equivalents
$
100.3
$
95.8
Receivables, net of allowance
314.3
260.2
Inventories
339.1
276.8
Other
30.3
32.1
Total current assets
784.0
664.9
Property, plant, and equipment, net
1,206.7
913.3
Goodwill
806.2
794.0
Intangibles, net
227.3
212.9
Deferred income taxes
15.0
15.4
Other assets
51.0
46.2
$
3,090.2
$
2,646.7
Current liabilities:
Accounts payable
$
201.3
$
144.1
Accrued liabilities
121.3
115.2
Advance billings
21.6
44.7
Current portion of long-term debt
8.8
6.3
Total current liabilities
353.0
310.3
Debt
645.1
248.2
Deferred income taxes
92.6
112.7
Other liabilities
79.0
83.3
1,169.7
754.5
Stockholders' equity:
Common stock
0.5
0.5
Capital in excess of par value
1,688.8
1,694.1
Retained earnings
251.5
219.7
Accumulated other comprehensive loss
(20.3)
(22.1)
Treasury stock
—
—
1,920.5
1,892.2
$
3,090.2
$
2,646.7
Arcosa, Inc.
Consolidated Statements of Cash
Flows
(in millions)
(unaudited)
Six Months Ended
June 30,
2021
2020
Operating activities:
Net income
$
36.7
$
64.9
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion, and
amortization
68.0
54.7
Stock-based compensation expense
8.8
8.8
Provision for deferred income taxes
6.1
2.4
Gains on disposition of property and other
assets
(5.3)
(1.8)
(Increase) decrease in other assets
2.8
(2.1)
Increase (decrease) in other
liabilities
(12.1)
(1.8)
Other
(1.6)
2.1
Changes in current assets and
liabilities:
(Increase) decrease in receivables
(29.4)
12.3
(Increase) decrease in inventories
(38.7)
(14.7)
(Increase) decrease in other current
assets
(4.1)
11.8
Increase (decrease) in accounts
payable
49.8
9.1
Increase (decrease) in advance
billings
(23.1)
(26.9)
Increase (decrease) in accrued
liabilities
(6.8)
1.5
Net cash provided by operating
activities
51.1
120.3
Investing activities:
Proceeds from disposition of property and
other assets
11.1
7.0
Capital expenditures
(41.5)
(43.6)
Acquisitions, net of cash acquired
(388.7)
(313.9)
Net cash required by investing
activities
(419.1)
(350.5)
Financing activities:
Payments to retire debt
(1.9)
(100.7)
Proceeds from issuance of debt
400.0
250.3
Shares repurchased
(4.4)
(2.0)
Dividends paid to common stockholders
(4.9)
(4.9)
Purchase of shares to satisfy employee tax
on vested stock
(9.7)
(3.3)
Debt issuance costs
(6.6)
(1.2)
Net cash provided (required) by financing
activities
372.5
138.2
Net increase (decrease) in cash and cash
equivalents
4.5
(92.0)
Cash and cash equivalents at beginning of
period
95.8
240.4
Cash and cash equivalents at end of
period
$
100.3
$
148.4
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
2021 Guidance
2021
2020
2021
2020
Low
High
Revenues
$
515.1
$
498.5
$
955.5
$
986.7
$
1,950.0
$
2,050.0
Net income
20.8
33.3
36.7
64.9
65.0
77.0
Add:
Interest expense, net
6.5
2.7
8.6
5.8
23.0
23.0
Provision for income taxes
4.2
11.8
8.6
22.2
18.0
24.0
Depreciation, depletion, and amortization
expense(1)
36.6
27.9
68.0
54.7
144.0
146.0
EBITDA
68.1
75.7
121.9
147.6
250.0
270.0
Add:
Impact of acquisition-related expenses(2)
(3)
11.0
2.5
13.2
4.9
20.0
20.0
Impairment charge
—
0.5
—
1.8
—
—
Other, net (income) expense(4)
(0.2)
—
0.3
—
—
—
Adjusted EBITDA
$
78.9
$
78.7
$
135.4
$
154.3
$
270.0
$
290.0
Adjusted EBITDA Margin
15.3
%
15.8
%
14.2
%
15.6
%
13.8
%
14.1
%
(1) Includes the impact of the
fair value markup of acquired long-lived assets, subject to final
purchase price adjustments.
(2) For the three and six months
ended June 30, 2021 and 2020, expenses associated with
acquisitions, including the cost impact of the fair value markup of
acquired inventory, advisory and professional fees, integration,
and other transaction costs.
(3) Actual results and full year
2021 Guidance now include the fair value markup of StonePoint
inventory subject to completion of purchase price adjustments. The
associated amount for Southwest Rock is not yet included in full
year 2021 guidance.
(4) Included in Other, net
(income) expense was the impact of foreign currency exchange
transactions of $(0.1) million and $0.2 million for the three
months ended June 30, 2021 and 2020, respectively, and $0.5 million
and $0.2 million for the six months ended June 30, 2021 and 2020,
respectively.
Arcosa, Inc.
Reconciliation of Adjusted Net
Income
($ in millions)
(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,
2021
2020
2021
2020
Net Income
$
20.8
$
33.3
$
36.7
$
64.9
Impact of acquisition-related expenses,
net of tax(1)
8.3
1.9
10.0
3.7
Impairment charge, net of tax
—
0.4
—
1.4
Adjusted Net Income
$
29.1
$
35.6
$
46.7
$
70.0
(1) Expenses associated with acquisitions,
including the cost impact of the fair value markup of acquired
inventory, advisory and professional fees, integration, and other
transaction costs.
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,
2021
2020
2021
2020
Construction Products
Revenues
$
204.5
$
148.2
$
357.7
$
297.6
Operating Profit
17.9
24.3
33.7
41.1
Add: Depreciation, depletion, and
amortization expense(1)
22.5
13.9
39.6
27.7
Segment EBITDA
40.4
38.2
73.3
68.8
Add: Impact of acquisition-related
expenses(2)
4.7
0.4
4.7
1.9
Adjusted Segment EBITDA
$
45.1
$
38.6
$
78.0
$
70.7
Adjusted Segment EBITDA Margin
22.1
%
26.0
%
21.8
%
23.8
%
Engineered Structures
Revenues
$
242.5
$
222.8
$
449.5
$
446.0
Operating Profit
29.1
20.9
46.6
45.8
Add: Depreciation and amortization
expense(1)
8.4
8.1
16.8
15.5
Segment EBITDA
37.5
29.0
63.4
61.3
Add: Impact of acquisition-related
expenses(2)
0.5
1.4
1.0
1.4
Add: Impairment charge
—
—
—
1.3
Adjusted Segment EBITDA
$
38.0
$
30.4
$
64.4
$
64.0
Adjusted Segment EBITDA Margin
15.7
%
13.6
%
14.3
%
14.3
%
Transportation Products
Revenues
$
68.2
$
128.2
$
148.4
$
245.2
Operating Profit
1.3
15.9
5.4
30.2
Add: Depreciation and amortization
expense
4.5
4.7
9.1
9.1
Segment EBITDA
5.8
20.6
14.5
39.3
Add: Impairment charge
—
0.5
—
0.5
Adjusted Segment EBITDA
$
5.8
$
21.1
$
14.5
$
39.8
Adjusted Segment EBITDA Margin
8.5
%
16.5
%
9.8
%
16.2
%
Operating Loss - Corporate
$
(17.0)
$
(13.3)
$
(31.5)
$
(24.2)
Impact of acquisition-related expenses -
Corporate(1)
5.8
0.7
7.5
1.6
Add: Corporate depreciation expense
1.2
1.2
2.5
2.4
Adjusted EBITDA
$
78.9
$
78.7
$
135.4
$
154.3
(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,
including the cost impact of the fair value markup of acquired
inventory, advisory and professional fees, integration, and other
transaction costs.
Arcosa, Inc.
Reconciliation of Adjusted Diluted EPS
and Free Cash Flow
(unaudited)
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,
2021
2020
2021
2020
(in dollars per share)
Diluted EPS
$
0.43
$
0.68
$
0.75
$
1.33
Impact of acquisition-related expenses
0.17
0.04
0.21
0.08
Impairment charge
—
0.01
—
0.03
Adjusted Diluted EPS
$
0.60
$
0.73
$
0.96
$
1.44
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. 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,
2021
2020
2021
2020
(in millions)
Cash Provided by Operating Activities
$
50.7
$
78.8
$
51.1
$
120.3
Capital expenditures
(21.6)
(22.5)
(41.5)
(43.6)
Free Cash Flow
$
29.1
$
56.3
$
9.6
$
76.7
Net income
$
20.8
$
33.3
$
36.7
$
64.9
Free Cash Flow Conversion
140
%
169
%
26
%
118
%
Arcosa, Inc.
Reconciliation of Adjusted EBITDA and
Net Debt to Adjusted EBITDA for Southwest Rock
(unaudited)
“Pro forma Adjusted EBITDA” is defined as
Southwest Rock’s EBITDA plus pro forma adjustments including
Paycheck Protection Program loan forgiveness, partially offset by
management compensation and non-operational expenses that are not
expected to continue post-close. GAAP does not define Pro forma
Adjusted EBITDA and it should not be considered as an alternative
to earnings measures defined by GAAP, including net income. We
believe Pro forma Adjusted EBITDA 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.
Trailing Twelve Months
Ended
May 31, 2021
(in millions)
Net Income
$
11.7
Add:
Interest expense, net
0.2
Provision for income taxes(1)
—
Depreciation, depletion, and amortization
expense
2.6
EBITDA
14.5
Add:
Pro forma adjustments
(0.5)
Pro forma Adjusted EBITDA
$
14.0
(1) Pass through entity and not subject to
federal income taxes
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, 2021
Pro Forma for Southwest
Rock
June 30, 2021 Pro
Forma
(in millions)
Total debt excluding debt issuance
costs
$
660.5
$
100.0
$
760.5
Cash and cash equivalents
100.3
(50.0)
50.3
Net Debt
$
560.2
$
150.0
$
710.2
Adjusted EBITDA (trailing twelve months)
(1)
$
288.1
$
14.0
$
302.1
Net Debt to Adjusted EBITDA
1.9
2.4
(1) Adjusted EBITDA includes a 3 month pro
forma adjustment of $2.6 million based on previously disclosed
Adjusted EBITDA for Strata of $10.2 million for the twelve months
ended August 31, 2020 and a 9 month pro forma adjustment of $20.7
million based on previously disclosed Adjusted EBITDA for
StonePoint of $27.6 million for the twelve months ended March 31,
2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804005932/en/
INVESTOR CONTACTS Gail M. Peck Chief Financial Officer 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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