Arcosa Inc. announced results for the fourth quarter and full year ended Dec. 31, 2021. Fourth-quarter revenues were $521.8 million, up 14%. For the full-year 2021, revenues were $2.036.4 million, up 5%
In its Construction Products division, revenues increased 42% to $211.7 million primarily driven by two large acquisitions, StonePoint and Southwest Rock, along with strong volume and pricing gains in recycled aggregates and improved demand conditions and higher raw material pricing in our shoring products business.
Led by favorable pricing, revenues in its legacy natural aggregates business increased year-over-year. Legacy volumes were up modestly as healthy volume gains in most markets were partially offset by lower volumes in Central and West Texas as certain large projects rolled off and oil and gas-related headwinds persisted
President and Chief Executive Officer Antonio Carrillo commented, “2021 was an important year for Arcosa, marked by significant strategic progress as we continued to expand our Construction Products platform and benefited from our efforts to build a more resilient, higher margin portfolio of infrastructure businesses.
“I am very pleased that we delivered full-year 2021 Adjusted EBITDA that matched 2020’s record level, overcoming significant cyclical challenges in our wind towers business and Transportation Products segment. We successfully managed inflationary pressures, including historically high steel prices, weather disruptions, and the continued impacts of the pandemic, achieving strong revenue and profitability growth in both Construction Products and Engineered Structures.”
Carrillo continued, “We finished 2021 on a positive note, exceeding our expectations in Construction Products and Engineered Structures, and meeting our guidance for our cyclically-depressed businesses. High steel prices continued to weigh on barge demand in the fourth quarter and we have reduced capacity at our facilities while staying flexible to support a market recovery. The idling of our Illinois wind tower facility progressed as planned and we remain optimistic about long-term demand fundamentals once uncertainty surrounding the tax credit for renewable energy is resolved. We continue to monitor improving market conditions in the North American railcar market that we anticipate will be a catalyst for our steel components businesses.
“We see favorable demand drivers for our key growth businesses. Construction activity remained strong in the fourth quarter, particularly in our key Texas, Tennessee, and Arizona markets, and we saw broad pricing gains across our natural and recycled aggregates platforms that create positive momentum for 2022. Fourth-quarter order activity for utility and related structures continued to be healthy and our backlog provides solid visibility for the year ahead.
“We ended the year with favorable balance sheet progress, reducing working capital in the fourth quarter and generating strong Free Cash Flow in line with Adjusted EBITDA. As a result, we repaid $75 million of borrowings and improved our net leverage to 2.1X at the end of the quarter, the low end of our targeted long-term range.”
Carrillo concluded, “I want to thank our employees for their continued dedication and focus on our long-term vision. Not only did Arcosa advance our safety culture in 2021, our employees remained highly engaged in our local communities, answering the call to support numerous relief efforts this year. I am grateful for their ongoing commitments.”
Arcosa announced the following total company outlook for full year 2022:
- Consolidated revenues of $2.1 billion to $2.2 billion.
- Consolidated Adjusted EBITDA of $280 million to $305 million.
Commenting on the outlook, Carrillo noted, “As we enter 2022, we remain committed to our long-term vision, focusing on growth and expansion in attractive infrastructure markets while reducing the cyclicality and complexity of our overall business. Reflecting Arcosa’s favorable positioning and competitive advantages, we are pleased with the continued strength in our key businesses in Construction Products and Engineered Structures.
“Led by our growth businesses, the mid-point of our 2022 Adjusted EBITDA guidance exceeds 2021 with consistent overall margins. While we see early indications of improvement in our wind towers business and Transportation Products segment, our outlook includes an Adjusted EBITDA guidance range of $20 to $25 million for these businesses in 2022, which is less than 20% of their combined Adjusted EBITDA of $129 million in 2018.
“We are encouraged by the recent deceleration in steel prices along with a strengthening in the level of order inquiries from our barge customers. In addition, there continues to be traction for an extension of the Production Tax Credit, with optimism across a diversified set of parties. We remain confident in the long-term fundamentals of these businesses and expect to see recovery in 2023 and beyond. Our strong balance sheet and liquidity enable us to navigate cyclical challenges while pursuing strategic growth opportunities.”