Arcosa (ACA) Sidoti's Small-Cap Virtual Conference summary

Business overview and strategy

• Operates in three segments: construction products, engineered structures, and transportation, with a U.S.-centric footprint and over 140 locations.

• Construction products is the largest segment, accounting for 43% of revenues and 59% of adjusted EBITDA, with aggregates as the main business.

• Engineered structures segment includes utility poles, wind towers, and telecom structures, with 42% of revenues and 31% of adjusted EBITDA.

• Transportation products is the smallest segment, focused on inland barges, and recently divested its steel components business.

• Strategy centers on growth in attractive markets, reducing cyclicality, integrating sustainability, and maintaining a healthy balance sheet.

Financial performance and outlook

• Adjusted EBITDA grew from $185M at spin to $530M LTM March, driven by organic growth and $3B in acquisitions.

• Construction products now contribute nearly 60% of adjusted EBITDA, up from one-third in 2018.

• 2025 guidance projects 17% revenue growth and 30% adjusted EBITDA growth, with strong contributions from acquisitions and organic operations.

• Backlogs provide solid visibility, and most end markets remain resilient.

Recent acquisitions and integration

• Acquired Stavola for $1.2B in October 2024, expanding aggregates footprint into the New York-New Jersey MSA.

• Integration of Stavola is progressing smoothly, aided by retaining the management team and a well-planned transition.

• Stavola's seasonality magnifies Q1 weakness, with Q2 and Q3 as strongest quarters; expected to be highly accretive on a full-year basis.

• Stavola is accretive to average selling price due to higher-priced hard rock quarries in New Jersey.