Arcosa Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ian Zaffino - Oppenheimer & Co., Inc. - Analyst : Hi, great. Thank you very much. Congratulations on everything all around here. -- Wanted to ask you, on the acquisition, as far as the market location, I know it is getting into a little more of a market, but is there a further opportunity to maybe consolidate around that market? Is this going to be a platform to do so? I know you have some deleveraging to do in the medium term. But how do we think about this longer term and how it fits into the portfolio? Thanks.

Question: Ian Zaffino - Oppenheimer & Co., Inc. - Analyst : Okay. Thank you. And then just as far as order inquiries and the backlog in the order book on both sides. On the wind side, are we expecting a pretty large order to be coming your way? And if so, how do we get there or how do you guys get there to seal that deal? And then on the barge side, in discussions with customers, how are they now talking about steel prices? Are we at a level now where we can maybe reach mid-cycle EBITDA in that barge business? And I think before you've thrown out something north of $50 million as far as of a mid-cycle EBITDA number for that business, maybe $60 million or $70 million. Maybe help us understand where we are in that process as well? Thanks.

Question: Alex Hantman - Sidoti & Company, LLC - Analyst : This is Alex on for Julio. Congrats on the quarter and thanks for taking questions. -- Absolutely. On the acquisition, how would you have us think about further portfolio simplification?

Question: Alex Hantman - Sidoti & Company, LLC - Analyst : Okay. Thanks. So I guess to summarize, post-closing capital allocation, you're not ruling out further simplification or M&A, but you are going to be focused on the deleveraging?

Question: Alex Hantman - Sidoti & Company, LLC - Analyst : Great. Thank you for the context. And just switching gears a little bit. Could you give us an update on IIJA, and any impact or whether you're starting to feel that at this point?

Question: Trey Grooms - Stephens Inc - Analyst : Hi, good morning, everyone. It's Trey Grooms. First off, congrats on the Stavola acquisition. It looks like a great fit for you guys. And so we kind of look, -- so as we look at kind of layering in Stavola, I'm guessing that could change the seasonality of your business somewhat. Any color you could give us there as we kind of think about our models?

Question: Trey Grooms - Stephens Inc - Analyst : Thanks Gail. That's super helpful. Also, I guess maybe another one for Gail, on the updated guidance. Any color you could give us on the on the cadence for the back half for the legacy business? Clearly, you guys have a lot going on with the portfolio. But outside of the portfolio announcements last night, anything we should be aware of there as we think about kind of the back half and the cadence as it relates to the updated guide?

Question: Trey Grooms - Stephens Inc - Analyst : Okay. Perfect. And last one from me. Kind of circling back to Stavola, just kind of looking at the New York and New Jersey markets that they operate in. What is the pricing dynamics of that market look like historically? We've heard over the last few years that that pricing has really improved, well, maybe over the last several years with some of these assets kind of changing hands in that market. But anything to add there, maybe how pricing in these markets might compare to the legacy business, or any color? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 12:30PM, ACA.N - Q2 2024 Arcosa Inc Earnings Call

Question: Garik Shmois - Loop Capital Markets - Analyst : Hi. Thanks. Congratulations on everything. Just on Stavola, wondering if there are any synergies we should anticipate either on the cost side or on the commercial side.

Question: Garik Shmois - Loop Capital Markets - Analyst : Just one more follow-up on Stavola. As far as the end-markets that that business service, is it any different than the legacy operations, is it a little bit more infrastructure focused, or is it fairly comparable to legacy Arcosa? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 12:30PM, ACA.N - Q2 2024 Arcosa Inc Earnings Call

Question: Garik Shmois - Loop Capital Markets - Analyst : I can certainly attest to the maintenance needs in the region? And then just last question, just on Construction Products. Very strong margin expansion in the quarter. Just wondering if you can speak to the sustainability and maybe some of the drivers that benefited 2Q, and how to think about that in the back half of the year?

Question: Jean Ramirez - D.A. Davidson Companies - Analyst : Hello everyone. Congrats on the quarter and the acquisition. Reid or anyone, regarding Stavola, could you provide some color around the sustainability of the 35% EBITDA margin versus the last couple of years? And also, could you just give some color on what you expect going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 02, 2024 / 12:30PM, ACA.N - Q2 2024 Arcosa Inc Earnings Call

Question: Jean Ramirez - D.A. Davidson Companies - Analyst : Thank you so much for that. And staying within Construction Products, what are your expectations for the second half? It seems like there should be some significant pent-up demand in Texas given the adverse weather we had through the first half. And then just a follow-up to that. What are you seeing volumes up materially? And how does that impact any potential price increases through the second half of 2024?

Question: Jean Ramirez - D.A. Davidson Companies - Analyst : And just to add a little more context, how does that impact your pricing? Are you having any conversations with clients that regarding that for the second half?

Question: Jean Ramirez - D.A. Davidson Companies - Analyst : Perfect. And if I could just move one more into -- barge orders. It would seem that with steel prices are down, that should motivate some activity for customers. Yes, how are you thinking about the outlook for barges going forward given that environment?