Arcosa, Inc. · NYSE:ACA
Arcosa — Q3 2019 Earnings Presentation
21 slides from Arcosa's earnings presentation, Oct 31, 2019
Slide 1: Third Quarter Earnings 2019
Third Quarter Earnings 2019 October 31, 2019
Slide 2: How to Find Us
How to Find Us OUR WEBSITE NYSE TICKER www.arcosa.com ACA HEADQUARTERS INVESTOR CONTACT Arcosa, Inc. InvestorResources@arcosa.com 500 North Akard Street, Suite 400 Dallas, Tx 75201 2 / Moving Infrastructure Forward
Slide 3: Forward-Looking Statements
Forward-Looking Statements Some statements in this presentation, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa’s estimates, expectations, beliefs, intenti
Slide 4: Arcosa Third Quarter 2019 Highlights
Arcosa Third Quarter 2019 Highlights Fourth consecutive quarter of year-over-year revenue and Adjusted EBITDA growth Improved results reflect continued Energy Equipment margin improvements, the addition of ACG Materials, and barge market recovery Strong order activity across wind towers, utility, an
Slide 5: Third Quarter 2019 Financial Results
Third Quarter 2019 Financial Results Strong year-over-year growth across key metrics Revenues Net Income Adjusted EBITDA $M’s $M’s $M’s +18% +35% +40% 445.0 33.0 64.9 378.6 24.5 46.4 32.7 3.2 Q3-18 Q3-19 Q3-18 Q3-19 Q3-18 Q3-19 Reported Adjusted Margin 12.3% 14.6% See Adjusted Net Income and Adjuste
Slide 6: Segment Results: Construction Products
Segment Results: Construction Products Third Quarter 2019 vs. Third Quarter 2018 Revenues Adjusted Segment EBITDA $M’s $M’s +60% +28% 115.9 26.2 19.0 20.5 72.6 Construction 19.7 Site Support 96.9 Aggregates & 52.9 Specialty Materials Q3-18 Q3-19 Q3-18 Q3-19 Margin 28.2% 22.6% See Adjusted Segment EB
Slide 7: Segment Results: Energy Equipment
Segment Results: Energy Equipment Third Quarter 2019 vs. Third Quarter 2018 Revenues Adjusted Segment EBITDA $M’s $M’s +6% +93% 210.2 33.5 198.4 50.4 Storage Tanks 51.4 & Other 17.4 Wind Towers & 147.0 159.8 Utility Structures Q3-18 Q3-19 Q3-18 Q3-19 Margin 8.8% 15.9% See Adjusted Segment EBITDA rec
Slide 8: Segment Results: Transportation Products
Segment Results: Transportation Products Third Quarter 2019 vs. Third Quarter 2018 Revenues Adjusted Segment EBITDA $M’s $M’s +11% -10% 120.6 17.7 108.5 15.9 49.3 77.5 Barges 59.2 Components 43.1 Q3-18 Q3-19 Q3-18 Q3-19 Margin 16.3% 13.2% See Adjusted Segment EBITDA reconciliation in Appendix. 8 / M
Slide 9: 2019 Revenue and Adjusted EBITDA Guidance
2019 Revenue and Adjusted EBITDA Guidance We now expect to be at the high end of our Adjusted EBITDA guidance range of $230-$240 million Revenue Guidance Adjusted EBITDA Guidance $M’s $M’s +26% +22% 230-240 1,750 – 1,800 1,460 187 2018 2019 Guidance 2018 2019 Guidance Maintained Maintained See Adjus
Slide 10: Capital Allocation
Capital Allocation We have continued to follow a disciplined approach to allocate capital across organic investments, acquisitions, and return to shareholders Organic investments Acquisitions Return of capital to shareholders ▪ $61M of Capital Expenditures YTD ▪ $31M of acquisitions YTD: ▪ Repurchas
Slide 11: Cash Flow and Liquidity Highlights
Cash Flow and Liquidity Highlights We have the liquidity to fund our disciplined growth plans Cash Flow and Balance Sheet Highlights Available Liquidity at end of Q3 ($M’s) 389 ▪ $219M of YTD Operating Cash Flow Cash 128 ▪ $108M of debt at end of Q3, substantially all at a fixed rate of ~4% through
Slide 12: Construction Products: Market Outlook
Construction Products: Market Outlook Healthy end market demand across the segment; softness in energy infrastructure ▪ Year-over-year volume growth in legacy aggregates and specialty materials businesses demonstrates strong underlying construction market fundamentals ▪ ACG aggregates plants serving
Slide 13: Energy Equipment: Market Outlook
Energy Equipment: Market Outlook Strong recent order activity has improved our visibility heading into 2020 ▪ Utility structures: Increased quoting activity driven by grid hardening and reliability initiatives that are expected to continue. Lean improvements have enhanced our ability to compete more
Slide 14: Transportation Products: Market Outlook
Transportation Products: Market Outlook Continued recovery of barge market, but slowdown in rail components ▪ $92M of barge orders in Q3 represented a 1.2x book-to-bill, on 17% higher sequential revenues. 2020 barge backlog of $258M provides solid visibility into next year at improved margins ▪ More
Slide 15: First Year Progress
First Year Progress On our first anniversary as a public company, we are encouraged by our progress and focused on the future Building our new Arcosa culture Executing on our Stage 1 Priorities Grow ✓ Acquired ACG Materials + 3 additional Construction complementary acquisitions to expand regional ✓
Slide 16: Long-Term Vision for Arcosa
Long-Term Vision for Arcosa Integrate Environmental, Social, Improve and Governance Reduce long-term returns initiatives (ESG) into our the complexity and on invested capital long-term strategy Grow cyclicality of the overall in attractive markets business where we can achieve sustainable competitiv
Slide 17: Appendix
Appendix
Slide 18: Supplemental financial information
Supplemental financial information YTD 9/30 Actual FY 2019 Guidance ▪ $61M ▪ $80-$85M, up slightly based on new organic growth Capital Expenditures projects to expand product lines and capacity in Construction Products and utility structures ▪ $40M reduction of working ▪ We now expect to reduce work
Slide 19: Reconciliation of Consolidated and Combined Adjusted EBITDA
Reconciliation of Consolidated and Combined Adjusted EBITDA ($’s in millions) (unaudited) Three Months Ended Nine Months Ended Full Year September 30, September 30, 2019 Guidance 2019 2018 2019 2018 Low High Revenues $ 445.0 $ 378.6 $ 1,290.0 $ 1,086.0 $ 1,750.0 $ 1,800.0 Net income 32.7 3.2 92.2 48
Slide 20: Reconciliation of Adjusted Segment EBITDA
Reconciliation of Adjusted Segment EBITDA ($’s in millions) (unaudited) Three Months Ended Nine Months Ended Last Twelve September 30, September 30, Months Ended Year Ended September 30, December 31, “Segment EBITDA” is defined as segment operating profit plus 2019 2018 2019 2018 2019 2018 depreciat
Slide 21: Reconciliation of Adjusted Net Income and Adjusted Diluted EPS
Reconciliation of Adjusted Net Income and Adjusted Diluted EPS (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 (in millions) Net Income $ 32.7 $ 3.2 $ 92.2 $ 48.0 Impairment charge on businesses subsequently divested — 23.2 — 23.2 Tax impact — (1.2) —