Arcosa Inc. announced first quarter 2023 results, reporting $549.2 million in revenue, compared to $535.8 million in the first quarter of 2022, a 3% increase. In its Construction Products division, revenues increased 12% to $236.1 million primarily due to strong organic pricing across its businesses, which more than offset overall volume declines. Volumes for natural aggregates declined due to the deceleration of new single-family residential construction activity and from adverse weather in certain markets.
Commenting on the first quarter results, Antonio Carrillo, president and chief executive officer, noted, “Driven by strong contributions from each of our businesses, Arcosa generated record results in the first quarter. Adjusted EBITDA increased more than 45%, reflecting continued positive momentum in our growth businesses as well as solid execution and improving market dynamics in our cyclical businesses.
“Construction Products led our performance in the quarter, with Adjusted Segment EBITDA expanding by 85%. Strong pricing momentum contributed to healthy organic revenue growth and solid unit profitability gains, overcoming volume headwinds in our natural aggregates business. As anticipated, we completed the sale of depleted land in North Texas generating a $22 million gain in the quarter that will help fund replacement reserves. Excluding the gain, Adjusted Segment EBITDA margins expanded 360 basis points year-over-year.”
Carrillo continued, “We are optimistic about the market recovery underway in our cyclical businesses. As previously announced, we received approximately $800 million in new wind tower orders during the quarter. Since the passage of the Inflation Reduction Act, we have received wind tower orders in excess of $1.1 billion that extend into 2028. While we continue to anticipate 2023 will be a transition year for our wind towers business as the industry supply chain ramps up, and we incur start-up expenses for our recently announced New Mexico facility, the stage is set for a multi-year recovery in 2024 and beyond.
“We are also encouraged by the $122 million of orders we received in our barge business, which represented a book to bill of 1.8 in the first quarter. Now at its highest level in three years, our backlog extends into 2024. Although elevated steel prices remain a demand headwind, we have been successful in converting inquires to new orders when we are able to source steel at competitive prices.
“Our balance sheet and liquidity position are solid, and we continue to make progress on strategic capital allocation to advance our long-term growth. During the quarter, we invested $14 million in two small bolt-on acquisitions in Construction Products and $44 million in capital expenditures, largely to fund organic projects. We remain committed to disciplined investment, aligned with increasing our return on capital,” Carrillo concluded.