Arcosa Inc. announced results for the third quarter ended Sept. 30. The company said its revenues increased 10% to $490.0 million with net income of $31.2 million and adjusted net income of $33.3 million.
Construction products revenues increased 27% to $146.9 million in the third quarter, despite adverse weather in Houston and on the Gulf Coast that impacted Cherry and other natural aggregates locations.
The Cherry acquisition continued to perform well, driven by healthy demand across natural and recycled aggregates in the Houston area.
In its natural aggregates business, the company experienced strong volumes in Texas from healthy residential and highway demand as well as newly acquired locations. There was continued weakness in plants serving oil and gas markets.
Revenues were lower in its specialty materials businesses primarily due to reduced volumes in its lightweight aggregates business attributed to continued COVID 19-related construction delays.
Revenues in its trench shoring business decreased 5% year-over-year but increased 12% from the second quarter, as volumes improved sequentially. Its customers remain cautious regarding their capital spending outlook, but sentiment has improved since the onset of COVID-19, the company stated.
“Our third quarter results demonstrate the overall resilience of our portfolio and our continued progress in repositioning the company around core infrastructure products,” commented Antonio Carrillo, president and chief executive officer. “Our year-over-year revenue and Adjusted EBITDA growth are significant achievements given COVID-related economic uncertainty and an unusual number of major weather events in Houston and on the Gulf Coast.
“Our Construction Products group reported growth across all key metrics, driven by continued strong performance by Cherry and our aggregates business, and our barge business benefitted from significant operating efficiencies that led to impressive margins.
“Order and inquiry activity was mostly positive during the third quarter, with the exception of liquid barges. We received $154 million of wind tower orders and experienced strong demand across utility, traffic, and telecom structures, and construction activity remained robust in most of our key markets. We have also been encouraged by significantly improved fundamentals in the dry barge market, driven by increased grain movements and higher freight rates. On the other hand, the liquid barge market remains weak as refined products, petrochemicals, and crude oil movements have not yet recovered from the pandemic. We are strategically extending our backlog to stay flexible and allow time for a recovery, while also investing in innovation to drive additional traffic on the inland river system.
“I am excited about the ‘cash culture’ we are building at Arcosa. We generated $93 million of free cash flow in the quarter, which helped fund $53 million of complementary acquisitions plus the $87 million Strata Materials acquisition that closed in October. Strata, which builds on the January 2020 acquisition of Cherry with complementary recycled and natural aggregates, is an excellent strategic fit.”
Carrillo concluded, “As we continue to navigate the COVID-19 environment, I want to thank our team for its exceptional work under extraordinary circumstances. On November 1st, we will celebrate our two-year anniversary as an independent public company. I am honored to lead such a fantastic and resilient team that has performed at a high level over the last two years, delivering strong results and making significant progress advancing our long-term vision.”