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Sep 30, 2022
Arcosa Q3 2022 Earnings Report
Arcosa's Q3 2022 earnings were announced, featuring adjusted EBITDA growth driven by engineered structures performance and margin expansion despite inflationary pressures. The company completed the divestiture of its storage tanks business, advancing portfolio simplification and reinvesting in growth businesses.
Key Takeaways
Arcosa reported an 8% increase in revenue to $603.9 million, a 35% increase in net income to $32.0 million, and an 11% increase in Adjusted EBITDA to $90.8 million. The company saw strong performance in its Engineered Structures segment, while Construction Products were relatively flat. The divestiture of the storage tanks business was completed in October for $275 million.
Revenues increased by 8% to $603.9 million.
Net income increased by 35% to $32.0 million, with diluted EPS up 35% to $0.66.
Adjusted EBITDA increased by 11% to $90.8 million, with an Adjusted EBITDA Margin of 15.0%.
Free Cash Flow was $38.4 million, representing a 120% free cash flow conversion.
Arcosa
Arcosa
Arcosa Revenue by Segment
Revenue by Segment
Engineered Structures Revenue
CapyFin.comTransportation Products Revenue
CapyFin.com Forward Guidance
Arcosa revised its full year 2022 guidance to reflect the completion of the divestiture of its storage tanks business. Revenue guidance is now $2.20 billion to $2.25 billion. Adjusted EBITDA guidance is now $320 million to $330 million.
Positive Outlook
- Strong year-to-date results.
- Successful completion of the storage tanks divestiture.
- Anticipate robust year-over-year growth in 2022.
- Expect full-year Adjusted EBITDA to increase 15% at the mid-point of our range.
- Ample flexibility to expand our market opportunity through organic growth initiatives and opportunistic acquisitions.
Challenges Ahead
- Previous guidance included full year revenues of approximately $245 million to $255 million from the storage tanks business.
- Previous guidance included full year Adjusted EBITDA of $52 million to $55 million from the storage tanks business.
- Wet weather and limitations on cement availability delayed projects and constrained volumes.
- A deceleration in single-family residential activity impacted our natural aggregates volumes.
- The lapse in the PTC has created a near-term lull in projects as the wind industry supply chain takes time to recalibrate.
Revenue & Expenses
Visualization of income flow from segment revenue to net income