Summary

• Arcosa, Inc. is a leading provider of infrastructure-related products and solutions, catering to construction, engineered structures, and transportation markets across North America.
• It operates through three primary segments: Construction Products, Engineered Structures, and Transportation Products.
• Arcosa provides its diverse range of infrastructure-related products and solutions primarily through direct sales, distribution channels, and strategic partnerships.
• Arcosa leverages wholesalers, retailers, and dealers to extend its market reach and accessibility for standard products.
• Main customers include freight and passenger railcar manufacturers, rail maintenance facilities, railroads, steel mills, and mining equipment manufacturers.
• In 2022, the company experienced growth in sales, with total sales reaching $2,242 million. This marked an increase of $205.6 million or 10.1% compared to the sales figure of $2,036.4 million in 2021.
• The company's gross profit for 2022 amounted to $422.4 million, reflecting a difference of $56.2 million or 15.3% from the gross profit of $366.2 million in the previous year, 2021.
• Additionally, the company's operating profit increased in 2022, totaling $160 million, which was higher by $49.8 million or 45.2% compared to the operating profit of $110.2 million in 2021.
• The net profit for the year 2022 was $244.8 million, representing an increase of $175.6 million or 253.6% compared to the net profit of $69.2 million in 2021.
• Moreover, the diluted earnings per share (EPS) for 2022 were reported as $5.05, which showed an increase of $3.63 or 255.6% compared to the diluted EPS of $1.42 in 2021.

Brief Company Overview

Arcosa, Inc. (NYSE: ACA), headquartered in Dallas, Texas, is a leading provider of infrastructure-related products and solutions, catering to construction, engineered structures, and transportation markets across North America. Established in 2018 following its separation from Trinity Industries, Inc., Arcosa operates as an independent, publicly-traded company listed on the New York Stock Exchange. It operates through three primary segments: Construction Products, which specializes in natural and recycled aggregates, specialty materials, and construction site support equipment; Engineered Structures, focused on manufacturing steel structures for various infrastructure needs, including utility structures, wind towers, and traffic structures; and Transportation Products, which manufactures and sells inland barges, fiberglass barge covers, and steel components for railcars and other transportation equipment.

Arcosa provides its diverse range of infrastructure-related products and solutions primarily through direct sales, distribution channels, and strategic partnerships. Their distribution channels encompass direct sales to customers in construction, engineered structures, and transportation markets, targeting critical infrastructure sectors with a broad spectrum of offerings. Additionally, Arcosa leverages wholesalers, retailers, and dealers to extend its market reach and accessibility for standard products. Strategic partnerships further enhance their distribution network and facilitate access to new markets. Main customers include freight and passenger railcar manufacturers, rail maintenance facilities, railroads, steel mills, and mining equipment manufacturers, with Arcosa serving a broad customer base in these industries by providing steel components for various applications.

As of February 2024, the company had a 52-week share price range of $55.47 to $84.90. The forwarding P/E ratio of the company is 24.10 times, the price-to-sales ratio (ttm) is 1.81 times, the profit margin is 12.88%, the operating margin is 7.74%, the return on assets (ttm) is 3.06%, the return on equity is 13.19%, and the diluted earnings per share (ttm) is $5.88. At January 13, 2023 the number of shares of common stock outstanding was 48,441,548

Recent Developments

• In the second quarter of May 2022, Arcosa, Inc. finalized the stock acquisition of Recycled Aggregate Materials Company, Inc. ("RAMCO"), a leading producer of recycled aggregates in the Los Angeles metropolitan area. The acquisition, which amounted to a total purchase price of $75.6 million, was seamlessly integrated into Arcosa's Construction Products segment. This strategic move underscores Arcosa's commitment to expanding its market presence and enhancing its product portfolio to better serve its customers in key regions.¹
• In the fourth quarter of 2022, Arcosa, Inc. finalized the sale of its storage tanks business to Black Diamond Capital Management, LLC for $275 million in cash. Following the sale, the company intends to utilize a portion of the net proceeds to repay outstanding borrowings under its revolving credit facility, while concurrently assessing potential organic initiatives and acquisition opportunities for future growth and strategic development.²

Recent Financing Activities

• In 2022, the company borrowed a net sum of $30.0 million, earmarked specifically to finance the acquisition of RAMCO. As of September 30, 2022, the company anticipates that $3.3 million of outstanding letters of credit will expire within the year, while the remaining portion is set to expire in 2023.³
• During the year ended December 31, 2022, Arcosa, Inc. repurchased 298,629 shares at a total cost of $15.0 million. This initiative falls under the company's share repurchase program, enabling Arcosa to buy back its own shares. Such actions often signify that the company perceives its stock as undervalued or aims to return capital to shareholders. It's important to note that the execution of share repurchase programs can influence the company's stock price and overall capital structure.⁴

1. ^ https://globallegalchronicle.com/arcosas-75-million-acquisition-of-recycled-aggregate-materials-co/
2. ^ https://www.theglobeandmail.com/investing/markets/stocks/ACA-N/pressreleases/10540719/arcosa-inc-completes-sale-of-its-storage-tanks-business/
3. ^ https://www.marketscreener.com/quote/stock/ARCOSA-INC-46661541/news-press-releases/
4. ^ https://www.businesswire.com/news/home/20230223005800/en/Arcosa-Inc.-Announces-Fourth-Quarter-and-Full-Year-2022-Results