Arcosa, Inc. Announces First Quarter 2025 Results

• Adjusted EBITDA Growth of 26%, Adjusting for Sale of Steel Components, Outpacing Revenue Increase of 12%
• Adjusted EBITDA Margin, Excluding Divestiture, Expands 190 Basis Points
• Reaffirms Full-Year 2025 Consolidated Revenue and Adjusted EBITDA Guidance

Arcosa, Inc. (NYSE:ACA) ("Arcosa," the "Company," "We," or "Our"), a provider of infrastructure-related products and solutions, today announced results for the first quarter ended March 31, 2025.

First Quarter 2025 Highlights

Antonio Carrillo, President and Chief Executive Officer, commented, "Our first quarter results demonstrate solid execution of our strategic vision, driven by transformative actions undertaken over the past several years. Our strong results were driven by double-digit Adjusted EBITDA growth and approximately 275 basis points of organic margin expansion.

"Engineered Structures outperformed our expectations due to robust demand and operating improvements in utility structures, higher wind tower volumes, and the accretive impact of Ameron. The barge business also performed well during the quarter and continued to add to our backlog with a 1.7 book-to-bill. Construction Products faced unfavorable weather conditions, but our legacy business was able to expand margin even with lower volumes. The integration of the $1.2 billion Stavola acquisition, completed in October 2024, continues to progress very well and operations are ramping for the spring construction season in the Northeast. As expected, Stavola's contribution was dilutive to our first quarter results in its seasonally slowest quarter."

Carrillo concluded, "We are pleased to maintain leverage at 2.9 times Net Debt to Adjusted EBITDA, consistent with the start of the year despite first quarter seasonality. We remain committed to our goal of reducing leverage to 2.0-2.5 times over the next twelve months."

2025 Outlook and Guidance

The Company is reaffirming its full year 2025 guidance:

• Consolidated revenues range of $2.8 billion to $3.0 billion, an increase of 17% at the mid-point of the range compared to full year 2024 results excluding the divested steel components business.
• Consolidated Adjusted EBITDA range of $545 million to $595 million, an increase of 30% at the mid-point of the range compared to full year 2024 results excluding the divested steel components business.
• Guidance range includes the direct impact of tariffs, as currently outlined, which are expected to be immaterial.

"Arcosa had a strong start to 2025, and we remain well positioned for long-term growth. With operations primarily in the U.S., we expect to benefit from continued investments in the nation's aging infrastructure and a new era of growth for the U.S. power market. Against the current backdrop of macro and policy uncertainty, most of our end markets continue to demonstrate resilience. Our teams are focused on strategic execution and operational excellence, while delivering on the solid backlogs in many of our businesses. We are encouraged by our first quarter results and are reaffirming our 2025 consolidated revenues and Adjusted EBITDA guidance," concluded Mr. Carrillo.

First Quarter 2025 Results and Commentary

All comparisons are versus the prior year quarter unless noted otherwise.

Construction Products

• Revenues increased 5% to $262.8 million driven by the contribution from the construction materials business of Stavola Holding Corporation and its affiliated entities (collectively "Stavola"), acquired in October 2024, which added $26.4 million to revenues during the quarter.
• Organic revenues declined 6% as higher pricing was offset by lower volumes, a decrease in freight revenue, and the divestiture of several small underperforming operations executed in the prior period.
• Adjusted Segment EBITDA decreased 5% to $56.9 million and Adjusted Segment EBITDA Margin decreased 220 basis points to 21.7% from 23.9% in the prior period. Freight-Adjusted Segment EBITDA Margin was 23.6% compared to 26.4% in the prior period.
• As expected, seasonally slow production at Stavola, located in the northeast and more impacted by the winter months than our legacy operations, negatively impacted first quarter results, reducing Adjusted Segment EBITDA by $2.0 million and Adjusted Segment EBITDA Margin by 320 basis points.
• On an organic basis, Adjusted Segment EBITDA decreased 2% primarily due to lower volumes impacted by wet and abnormally cold weather at the beginning of the quarter. Improved unit profitability led by strong pricing drove 100 basis points of organic Adjusted Segment EBITDA Margin expansion.
• Depreciation, depletion, and amortization expense increased $8.5 million, or 28%, primarily due to the acquisition of Stavola.

Engineered Structures

• Revenues for utility, wind, and related structures increased 23% to $284.8 million primarily due to higher volumes in our wind towers business and the contribution from the acquisition of Ameron Pole Products ("Ameron"), which closed in April 2024. Revenues for utility structures decreased slightly as higher volumes and improved product mix were offset by lower steel prices.
• Adjusted Segment EBITDA increased 90% to $51.7 million, led by significant organic growth in our wind towers and utility structures businesses as well as the contribution from the acquired Ameron business. Margin expanded 650 basis points to 18.2% due to higher wind tower volumes, improved product mix and operating efficiencies in our utility structures business, and the accretive impact of Ameron.
• The ongoing focus on grid hardening and reliability efforts and increased demand for electricity continue to drive strong order activity for our utility structures business. In wind towers, our backlog provides solid production visibility for 2025. We continue to engage with our customers on orders for next year while we await additional clarity on renewable energy policy discussions in Washington D.C.
• At the end of the first quarter, the combined backlog for utility, wind, and related structures was $1,094.1 million compared to $1,366.7 million at the end of the first quarter of 2024. We expect to deliver approximately 59% of our current backlog during 2025 and the remainder through 2028.

Transportation Products

• Prior period results included revenues and Adjusted EBITDA of $36.1 million and $4.9 million, respectively, for the steel components business, which was divested in August 2024.
• Revenues for our barge business increased 6% primarily due to higher tank barge deliveries.
• Excluding the impact of the divested steel components business, Adjusted Segment EBITDA increased 13%, to $15.5 million, driven by higher tank barge deliveries and improved operating efficiencies.
• Adjusted Segment EBITDA Margin was 18.4% compared to 17.2% in the prior period, excluding the divested steel components business.
• During the quarter, we received barge orders totaling approximately $142 million representing a book-to-bill of 1.7 and extending our tank barge backlog deep into 2026.
• Our barge backlog at the end of the quarter was $333.6 million compared to $294.4 million at the end of the first quarter of 2024. We expect to deliver approximately 63% of our current backlog during 2025.

Corporate and Other Financial Notes

• Excluding acquisition and divestiture-related costs, which have been excluded from Adjusted EBITDA, corporate expenses of $14.6 million were roughly flat with the prior period.
• Acquisition and divestiture-related costs were $0.8 million in the first quarter compared to $1.6 million in the prior period.
• Interest expense totaled $28.3 million, an increase of $20.0 million year-over-year driven by the additional debt incurred to finance the Stavola acquisition.
• The effective tax rate for the first quarter was 19.2% compared to 17.1% in the prior period. The increase in the tax rate was primarily due to higher state taxes and foreign adjustments.

Cash Flow and Liquidity

• Operating cash flow was $(0.7) million during the first quarter, a decrease of $81.2 million compared to the prior period, driven by an increase in working capital.
• Working capital was a $80.7 million net use of cash for the quarter compared to the prior period's $4.6 million net source of cash. The decrease in cash provided by working capital was primarily due to a $77.6 million increase in receivables.
• The increase in receivables was primarily due to the timing of deliveries in our Engineered Structures and Transportation Products segments as well as Advanced Manufacturing Production tax credits recognized during the period, which were sold in April.
• Capital expenditures in the first quarter were $34.0 million, compared to $54.4 million in the prior period.
• Free Cash Flow for the quarter was $(29.7) million, down from $30.3 million in the prior period.
• During the quarter, we received cash of $17.6 million due to escrow funds that were returned to Arcosa related to customary purchase price adjustments in connection with the Stavola acquisition.
• Net Debt to Adjusted EBITDA was 2.9x for the trailing twelve months, consistent with the start of the year.
• We ended the quarter with total liquidity of $867.8 million, including $167.9 million of cash and cash equivalents and full availability under our $700 million revolving credit facility.

Non-GAAP Financial Information

This earnings release contains financial measures that have not been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the accompanying tables to this earnings release.

Conference Call Information

A conference call is scheduled for 8:30 a.m. Eastern Time on May 7, 2025 to discuss first quarter 2025 results. To listen to the conference call webcast, please visit the Investor Relations section of Arcosa's website at https://ir.arcosa.com. A slide presentation for this conference call will be posted on the Company's website in advance of the call at https://ir.arcosa.com. The audio conference call number is 800-723-6494 for domestic callers and 785-424-1619 for international callers. The conference ID is ARCOSA and the passcode is 13126. An audio playback will be available through 11:59 p.m. Eastern Time on May 21, 2025, by dialing 800-839-3012 for domestic callers and 402-220-7232 for international callers. A replay of the webcast will be available for one year on Arcosa's website at https://ir.arcosa.com/news-events/events-presentations.

About Arcosa

Arcosa, Inc. (NYSE:ACA), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading positions in construction, engineered structures, and transportation markets. Arcosa reports its financial results in three principal business segments: Construction Products, Engineered Structures, and Transportation Products. For more information, visit www.arcosa.com.

Some statements in this release, 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, intentions or strategies for the future. Arcosa uses the words "anticipates," "assumes," "believes," "estimates," "expects," "intends," "forecasts," "may," "will," "should," "guidance," "outlook," "strategy," "plans," "goal," and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this release, and Arcosa expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, except as required by federal securities laws. Forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to assumptions, risks and uncertainties regarding the failure to successfully complete or integrate acquisitions, including Ameron and Stavola, or divest any business, or failure to achieve the expected benefits of acquisitions or divestitures; market conditions and customer demand for Arcosa's business products and services; the impact of Arcosa's level of indebtedness; the cyclical nature of, and seasonal or weather impact on, the industries in which Arcosa competes; competition and other competitive factors; governmental and regulatory factors; changing technologies; availability of growth opportunities; market recovery; ability to improve margins; the impact of inflation and costs of materials; assumptions regarding achievements of the expected benefits from the Inflation Reduction Act; the delivery or satisfaction of any backlog or firm orders; the impact of pandemics on Arcosa's business; the impact of tariffs; and Arcosa's ability to execute its long-term strategy, and such forward-looking statements are not guarantees of future performance. For further discussion of such risks and uncertainties, see "Risk Factors" and the "Forward-Looking Statements" section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Arcosa's Form 10-K for the year ended December 31, 2024 and as may be revised and updated by Arcosa's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

TABLES TO FOLLOW

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INVESTOR CONTACTS

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ADVISIRY Partners

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