Arcosa(ACA) - 2025 Q1 - Quarterly Report

Revenue and Profitability - Revenues for the three months ended March 31, 2025 increased 5.6% to $632.0 million compared to$598.6 million for the same period in 2024, driven by higher revenues in Engineered Structures and Construction Products [97]. - Operating profit for the three months ended March 31, 2025 totaled $55.8 million, an increase of 4.5$284.8 million, primarily due to higher volumes in the wind towers business and contributions from the acquired Ameron business [99]. - Revenues for the three months ended March 31, 2025, increased by 4.6% to $262.8 million, primarily due to the acquisition of Stavola, which contributed$26.4 million [112]. - Operating profit decreased by 36.5% to $18.3 million, impacted by the seasonal nature of the Stavola acquisition, which reduced operating profit by$11 million [115]. - Cost of revenues increased by 9.5% to $217.1 million, with cost of revenues as a percentage of revenues rising to 82.6$84.4 million, while total revenues for the Transportation Products segment decreased by 27.1% to $84.4 million due to the sale of the steel components business [123]. Backlog and Orders - The backlog for inland barges as of March 31, 2025 was$333.6 million, up 19.1% from the start of the year, indicating strong customer commitment [91]. - The company received new orders of $1.1 billion for wind towers since the passage of the Inflation Reduction Act, supporting wind energy expansion projects through 2028 [91]. - The backlog for utility, wind, and related structures as of March 31, 2025, was$1,094.1 million, with approximately 59% expected to be delivered during 2025 [117]. - Approximately 59% of the unsatisfied performance obligations for utility, wind, and related structures are expected to be delivered during 2025 [98]. Expenses and Costs - Selling, general, and administrative expenses increased 6.7% for the three months ended March 31, 2025, primarily due to costs from recently acquired businesses, representing 11.7% of revenues [97]. - Operating costs increased 5.7% to $576.2 million for the three months ended March 31, 2025, driven by additional costs from the acquired Stavola and Ameron businesses [106]. - Corporate overhead costs decreased by 5.5$15.4 million, primarily due to lower acquisition and divestiture-related expenses [122]. Acquisitions and Capital Expenditures - The company completed the acquisition of Stavola for $1.2 billion in cash, enhancing its Construction Products segment [92]. - Capital expenditures for the three months ended March 31, 2025, were$34.0 million, with full-year expectations of approximately $145 to$165 million [128]. Financial Position and Liquidity - As of March 31, 2025, the company had no outstanding loans and approximately $0.1 million of letters of credit, leaving$699.9 million available for borrowing under its revolving credit facility [130]. - The net cash required by operating activities for the three months ended March 31, 2025, was $0.7 million, compared to$80.5 million provided in the same period in 2024 [125]. - The Company believes that existing cash, available liquidity, and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for the foreseeable future [135]. Debt and Financing - The Term Loan has an aggregate principal amount of $700.0 million, with$100.0 million used to pay down the revolving credit facility, and requires mandatory prepayments from excess cash flow starting in fiscal year 2025 [133]. - The Company issued $600.0 million aggregate principal amount of 6.875$400.0 million aggregate principal amount of 4.375% senior unsecured notes maturing in April 2029 [134]. - The Term Loan has a maturity date of October 1, 2031, and is prepayable at any time without penalty [133]. - The Credit Agreement requires maintenance of certain ratios related to leverage and interest coverage, with compliance as of March 31, 2025 [132]. - The Company’s financial covenants are guaranteed by certain domestic subsidiaries, and obligations are collateralized with substantially all personal property [132]. Taxation - The effective tax rate for the three months ended March 31, 2025 was 19.2%, compared to 17.1% for the same period in 2024, primarily due to higher state taxes [109]. Shareholder Returns - A quarterly cash dividend of $0.05 per share was declared in February 2025, paid on April 30, 2025 [136]. - The Board authorized a$50.0 million share repurchase program effective January 1, 2025, with no shares repurchased as of March 31, 2025 [137]. Market Risks - There has been no material change in market risks since December 31, 2024, as noted in the 2024 Annual Report [141].