On August 1, 2024, Arcosa Inc (ACA, Financial) released its 8-K filing announcing its second quarter 2024 results. Arcosa Inc, a manufacturer and producer of infrastructure-related products and services, operates in three segments: Construction Products, Engineered Structures, and Transportation Products.
Performance Overview
Arcosa Inc reported record quarterly revenues of $664.7 million, a 14% increase from $584.8 million in the same period last year. The company also achieved a net income of $45.6 million, up 11% from $40.9 million in Q2 2023. Adjusted net income rose by 20% to $44.7 million, and diluted EPS increased by 13% to $0.93, surpassing the analyst estimate of $0.82.
Adjusted EBITDA grew by 31% to $112.7 million, with a margin expansion of 230 basis points to 17.0%. However, net cash provided by operating activities decreased by 70% to $38.3 million, and free cash flow turned negative at $(6.1) million, down from $75.6 million in the prior year.
Segment Performance
In the Construction Products segment, revenues increased by 4% to $276.1 million, driven by recent acquisitions. Adjusted Segment EBITDA rose by 22% to $68.8 million, with a margin expansion of 360 basis points to 25.2%. The segment faced volume headwinds in aggregates due to elevated rainfall, particularly in Texas.
The Engineered Structures segment saw a 33% increase in revenues to $274.8 million, primarily due to higher volumes in utility structures and wind towers, along with the contribution from the Ameron Pole Products acquisition. Adjusted Segment EBITDA surged by 48% to $41.7 million, with a margin expansion of 160 basis points to 15.2%.
In the Transportation Products segment, revenues were flat at $113.8 million. However, Adjusted Segment EBITDA increased by 7% to $16.7 million, reflecting higher volumes and improved margins in the barge business.
Financial Achievements and Strategic Actions
Arcosa Inc's healthy balance sheet, with a net debt to adjusted EBITDA ratio of 1.5x, provides support for acquisition financing. The company announced the acquisition of the Construction Materials Business of Stavola Holding Corporation for $1.2 billion, aligning with its strategic vision to enhance growth in attractive markets.
Antonio Carrillo, President and CEO, commented,
"Our second quarter was highlighted by several events, that on a combined basis, demonstrate steady advancement of our long-term strategic vision. Financial results for the second quarter reflect records for quarterly revenues and Adjusted EBITDA, with significant year-over-year margin expansion."
Outlook and Guidance
Arcosa Inc has tightened its consolidated revenue range to $2.60 billion to $2.72 billion from the previous $2.58 billion to $2.78 billion. The company also raised the low end of its consolidated Adjusted EBITDA range to $420 million from $410 million, resulting in a full-year range of $420 million to $440 million.
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Explore the complete 8-K earnings release (here) from Arcosa Inc for further details.
