Arcosa Construction Products Revenues Up in Second Quarter

Antonio Carrillo

Arcosa Inc. announced results for the second quarter ended June 30, reporting revenues of $584.8 million versus $602.8 million in the second quarter of 2022, a 3% decrease.

Construction Products revenues increased 8% to $264.8 million driven by higher pricing and volume growth in its recycled aggregates business, as well as organic volume growth and acquisition-related contribution in its trench shoring business.

Revenues for natural aggregates and specialty materials were relatively unchanged as higher pricing was offset by lower volumes.

“I am pleased with Arcosa’s second quarter performance, with Adjusted EBITDA surpassing last year’s record results, normalizing for the divestiture of our storage tanks business,” said Antonio Carrillo, president and chief executive officer. “In Construction Products, we continued to successfully advance pricing, manage cost pressures, and drive solid unit profitability in natural and recycled aggregates. However, overall Adjusted Segment EBITDA margins were impacted by operating inefficiencies in our specialty materials business that we are addressing.

“Within Engineered Structures, our wind towers business performed well on a low level of volume, benefiting in part from the recognition of tax credits associated with the Inflation Reduction Act. Anticipated product mix headwinds in our utility structures business resulted in lower overall segment profitability in-line with our expectation. We expect a stronger second half and remain optimistic about our future growth potential. The demand environment across the segment continues to be very robust, and we are in the early stages of a multi-year expansion in the wind industry.

“Adjusted Segment EBITDA in Transportation Products more than doubled and margins expanded 530 basis points year-over-year, underscoring the operating leverage inherent in these businesses as volumes improve. We were pleased to obtain sufficient second quarter orders to maintain our barge backlog and extend our production visibility further into 2024 with improved pricing.”

Carrillo concluded, “Our strong cash conversion was a highlight for the quarter. Free Cash Flow increased 11% year-over-year, despite a near doubling in planned capital expenditures as we invest to capture an expanded range of organic growth initiatives. Our pipeline of acquisition and organic opportunities remain attractive, and our solid balance sheet and strong liquidity position provide ample flexibility for strategic capital allocation.” 

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