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Arcosa Construction Products Revenues Spike Higher

Arcosa Inc. announced results for the second quarter ended June 30, including:

  • Revenues increased 23% to $434.1 million.
  • Net income increased 41% to $31.8 million.
  • Adjusted EBITDA increased 38% to $64.2 million.
“This was another quarter of solid growth for Arcosa as we executed on our strategic plan,” commented Antonio Carrillo, president and chief executive officer. “All three segments contributed to revenue and Adjusted EBITDA growth in the second quarter. We achieved higher-than-expected margins in our Energy Equipment segment, the ramp-up in our barge business continues on track, and our Construction Products markets remain healthy despite challenging weather conditions.

“Consistent with our disciplined growth strategy, we completed two small bolt-on acquisitions in the second quarter, one in aggregates and one in marine components," Carrillo said. "Both transactions broaden our product lines and should reduce our overall cyclicality."

Construction Products revenues increased 38% to $115.6 million in the second quarter, benefitting from the December 2018 acquisition of ACG Materials. Second quarter Adjusted Segment EBITDA increased $3.8 million to $26.5 million, representing a 22.9% margin compared to a 27.1% margin a year ago. 
The year-over-year margin decrease primarily resulted from weather-driven volume declines at operations in Texas, Oklahoma and California, as well as the addition of ACG Materials, which has lower margins than the legacy businesses.

Transportation Products revenues increased 26% to $115.3 million. Adjusted Segment EBITDA increased 4% to $16.7 million, representing a margin of 14.5% compared to a 17.5% margin a year ago. 

Margin performance was largely consistent with the company's expectations, due to factors previously discussed, including lower pricing on a long-term components sales agreement, $1.3 million of start-up expenses from the re-opening of the Louisiana barge facility, and the delivery of barges that were priced in a weaker demand environment in 2018.

The barge business booked orders for $32 million in the quarter with improved pricing levels and added to the $203 million of orders received in the first quarter. Additionally, the level of order inquiries received to date in the third quarter has been strong.