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On Thursday, 12 June 2025, Arcosa Inc. (NYSE:ACA) presented its strategic vision at Sidoti’s Small-Cap Virtual Conference. The company, focusing on growth and portfolio simplification, highlighted its robust performance and future outlook. While positive strides were made in acquisitions and segment performances, challenges such as market cyclicality and tariff impacts were also discussed.
Key Takeaways
- Arcosa projects a 17% revenue growth and a 30% adjusted EBITDA growth in 2025.
- The Stivola acquisition expands Arcosa’s market presence in New York/New Jersey.
- The company aims to reduce its net debt to EBITDA ratio to 2 to 2.5 times by Q1 2026.
- Arcosa is considering a potential transition to a two-segment structure.
- Demand for utility structures is driven by grid hardening and increased electrification needs.
Financial Results
- Revenue: Last twelve months (LTM) March revenues were $2.6 billion, with a projected 17% growth for 2025.
- Adjusted EBITDA: LTM March adjusted EBITDA was $465 million, with a growth from $185 million at the spin-off to $530 million, factoring in acquisitions.
- Margins: The Construction Products segment leads with a 25% adjusted EBITDA margin, while Engineered Structures and Transportation Products report 17% and 16% margins, respectively.
- Debt: The net debt to EBITDA ratio was 3.7 times post-Stivola acquisition, ending the year at 2.9 times, with a target of 2 to 2.5 times by Q1 2026.
Operational Updates
- Construction Products Segment: Aggregates account for 60% of revenues, with Stivola integration proceeding smoothly despite a $2 million EBITDA loss in Q1 due to seasonality.
- Engineered Structures Segment: Strong execution across all product lines, particularly in utility structures and wind towers, with double-digit growth in utility structures.
- Transportation Products Segment: The steel components business was divested, with ongoing monitoring of indirect tariff impacts on barge customers.
- General Operations: Arcosa operates over 140 locations, with a strategic shift to 100% US steel.
Future Outlook
- Growth Strategy: Focus on attractive markets and reducing cyclicality, with potential simplification to a two-segment structure.
- Policy and Demand: Monitoring wind energy tax credit policies and expecting increased demand for utility structures.
- Deleveraging: Committed to reducing net debt to EBITDA ratio through organic growth.
Q&A Highlights
- Stivola Seasonality: Q1 EBITDA was breakeven or slightly negative, with stronger performance anticipated in Q2 and Q3.
- Aggregates Pricing: Stivola contributes positively to Arcosa’s average selling price, with healthy pricing trends.
- Utility Structures Demand: Driven by grid hardening and increasing load growth from data centers, AI, and electrification.
For a detailed analysis, refer to the full transcript below.
Full transcript - Sidoti’s Small-Cap Virtual Conference:
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Okay. Good afternoon, everyone, and thank you for joining the June twenty twenty five small cap conference. My name is Julio Romero, and I’m the industrials building products and e and c analyst here at Sidoti and Company. Really pleased to be able to host Arcosa. Their ticker is ACA.
With us today is Gail Peck, chief financial officer, and Erin Drebeck, director of investor relations. The format of this is gonna be a fireside chat. If if you do have any questions for Arcosa, feel free to type them into the q and a section, the bottom of your screen, and I’m happy to ask on your behalf. With that, Gail and Erin, thanks so much for being here.
Gail Peck, Chief Financial Officer, Arcosa: Thank you.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Maybe if we could just start off with a, you know, high level overview of the business and just, you know, folks who are newer to the story, just a quick overview of of what Arcosa does.
Gail Peck, Chief Financial Officer, Arcosa: I’ll I’ll start there, Julio. I think it’s, good to just give a base since we are in a number of different businesses. But, you know, at a high level, Arcosa is a Dallas based company. We had LTM March revenues and adjusted EBITDA of about 2,600,000,000.0 and $465,000,000, respectively. We operate in three segments serving the construction, engineered structures, and transportation markets.
And we believe we’re well positioned against favorable infrastructure led related demand drivers. We’re a US focused company with over a 140 locations that we operate. Only one of our mines, our construction mines, is in Canada, and we have two manufacturing plants in Mexico. Otherwise, everything else is in The US. Many of you may know we spun out from our former parent over six years ago, and we’ve spent that time creating a more resilient, faster growing, higher margin portfolio of businesses.
Our adjusted EBITDA has grown from about a $185,000,000 at spin to about $530,000,000 LTM March if you give the full year effects of recent acquisitions and divestitures we’ve made. We’ve achieved this growth through a combination of organic initiatives and roughly $3,000,000,000 of core infrastructure acquisitions within our construction products and engineered structures businesses to really reposition our portfolio. And so when you think about our three segments, the construction product segment has been the primary focus of our growth strategy and currently accounts for about 43% of our revenues and 59% of our adjusted EBITDA, excluding corporate costs. It’s the highest adjusted EBITDA margin segment at 25%. And in this in this segment, we believe it’s the most stable and resilient of our three segments.
And we have three primary businesses. I’ll kinda run through those in descending revenue share. Aggregates, which includes natural and recycled, is our largest business that represents about 60% of this segment’s revenues. We have primary exposure to Texas, New Jersey, Oklahoma, Arizona, Texas, Tennessee, and other Gulf Coast locations. And then our specialty materials and asphalt business represent about 30% of the segment’s revenues and construction site support, which is our trench shoring business, makes up the remainder.
Then you move to our next largest segment or really almost equally from a revenue perspective, it’s our engineered structures segment, which accounts for 42% of our revenues and 31% of our adjusted EBITDA. We’ve got five product lines, utility transmission and distribution poles for electricity, wind towers, traffic structures, lighting poles, and telecom structures. And this segment has reported margins of 17% adjusted EBITDA margin on an LTM basis. And then that leaves our transportation products segment, the segment. That’s the smallest of our three accounting for less than 15% of revenues and about 10% of our adjusted EBITDA.
It’s also a mid teen margin business. It has about 16% EBITDA margins. We’ve got one business in this segment. We’re the leading manufacturer of inland barges and marine components. And in keeping with our strategy to simplify our portfolio, we divested of our steel components business in the third quarter of last year, which was historically included in this segment.
Our long term vision has been pretty consistent since then. We have five pillars growing in attractive markets and reducing the cyclicality and complexity of our business while improving return on invested capital, integrating sustainability and maintaining a healthy balance sheet through prudent deleveraging. We added the pillar in conjunction with the announcement of the $1,200,000,000 acquisition of Stivola last August, which did add leverage to our balance sheet above our long term target. The acquisition, which closed in October, was transformative for our Construction Materials business, expanding our aggregates footprint into the nation’s largest MSA, the New York, New Jersey MSA, with increased exposure to less cyclical infrastructure led markets. So when you look at the actions Arcosa has taken since our inception in 2018, you’ll see that they aim to consistently advance our strategy.
We believe today we’re a more we’re larger, more resilient, and less cyclical company with construction products accounting for nearly 60% of our adjusted EBITDA, nearly double the it contributed in 2018. We’re well positioned to navigate the current environment. We expect strong growth in 2025. Our execution in the first quarter was solid, and it’s giving us additional confidence in our full year 2025 guidance that we provided at the outset of the year in February. At the midpoint of our range, we see revenue growth of 17%, adjusted EBITDA growth of 30% in 2025.
And the full year acquisitions, full year impact of acquisitions, namely Stivola, will be complemented by double digit growth in our legacy or organic operations. I said infrastructure, we’re well positioned. We think we’re very well positioned to benefit from the continued investment and really the new era of growth for of for power in The US market. Macro policy, you know, policy in Washington continues to evolve rapidly, but we believe we’re in a very good position to navigate the environment. Our teams are managing the business well.
Most of our end markets continue to demonstrate resilience. And, really, our backlogs across many of our businesses provide solid visibility. So excited to to talk more about the business today, but at a very high level, we’re very well positioned.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Excellent. Thank you, Gail. Great rundown. And to your point, very, very consistent with the strategy since spin of 2018. I guess just maybe just to level set the tariff issue for folks as well because you do have a lot of different businesses within the portfolio.
Just at a high level, our our closest direct tariffs versus indirect tariff exposure, which you did a good job of outlining on your first quarter call, And then we just dive into which segments are USMCA compliant.
Gail Peck, Chief Financial Officer, Arcosa: Sure. You know, as as I just said in my opening remarks, we’re a very US centric company. We have a large footprint of construction materials mines and manufacturing plants, really all of which, but a few, a handful of are located outside The US. So very little and we have a very US focused supply chain, and our revenues are sourced predominantly in The US. So very little direct tariff impacts for Arcosa as a company.
We did talk about, you know, where we do have manufacturing presence in Mexico, and and we have two plants in Mexico, two of our eight plants that support our utility structures business. The other six are located in The US. We do manufacture, products that are USMCA compliant, so we are not experiencing any impacts there. We did talk about some very immaterial impacts that we had related to the steel tariffs. We had a little bit of non US sourced steel on the ground at the end of last year.
We made the decision to to switch to a 100% US steel. So we’re working through that. As you saw, in our first quarter results, we had very strong margins in our engineered structures segment. So we were able to overcome that immaterial impact very easily. So very minimal direct, tariff impacts.
You know, indirect impacts, I would say, you know, we’re watching closely on the agricultural side, how that may impact our barge customers. A fair amount of grain that travels the inland waterways is exported, so that would be corn and soybeans. So the discussions with China are important from a tariff perspective and how that impacts the sentiment of our customers. Steel prices in general, and the tariffs implemented on steel did while steel down year over year, did did cause a creep in steel prices early in the year, and that is impactful on our customer sentiment within barge. And I I’d say outside of that from an indirect, it’s really how it impacts the macro and the business environment in in levels of business confidence and uncertainty.
And I don’t think that’s unique to Arcosa. You I think you’re you’re muted muted. Excuse me. You’re correct. Yeah.
Sure.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Excellent. So I’m gonna hop into some of the segments here, maybe starting with the construction product segment, where you did the Stivola acquisition, which you completed, I believe, on October first of twenty four.
Gail Peck, Chief Financial Officer, Arcosa: That’s right.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Just, you know, where are you with regards to the integration? You know, what are the key integration milestones and the anticipated milestones for the remainder of ’25?
Gail Peck, Chief Financial Officer, Arcosa: The integration is, is going very well. We had been talking with Stabila for some time, so a very highly diligent transaction. And we also had a a a little bit of a, you know, maybe a longer runway between announce and close than we’ve had in some of our other transactions. As I mentioned in my comments is we did add leverage to the balance sheet, so you did have that that time before close where we were doing the financing for Stivola. That was a valuable time too from a head start perspective.
So integration going very well from an operational perspective perspective financially. Really, you know, no surprises, you know, from a, you know, a negative surprise perspective. Things going very much according to plan. And, you know, the price tag of Stabola was high relative to the other acquisitions that we’ve done. But from a complexity standpoint, you know, you’re talking about five, you know, larger mines and 12 asphalt plants.
So not in in all in a very concentrated geographic area. So from an integration perspective, not not overly tax tasking, to the company. We kept the management team too, so that obviously adds, you know, increases the ease of of transition and integration.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Yep. Good context there. Very helpful. And and then could could you maybe discuss the unique seasonality of Stivola relative to the rest of the construction product segment? That’s something that’s a little bit different than I think folks who have followed you in the past are used to.
And also talk about how Stivola’s kind of profits are expected to be sequenced throughout the remaining three quarters of fiscal twenty five.
Gail Peck, Chief Financial Officer, Arcosa: Sure. You know, construction’s an outdoor business. We had seasonality in our business prior to the acquisition of Stivola with q one being the lowest, but that got magnified with Stivola. Stivola, about 60% of its EBITDA is aggregates, and the other 40% is asphalt. And asphalt essentially shuts down in the winter months.
You’re not doing much asphalt paving work in the into in the winter months. So q one for the business and and, likewise, for aggregates, you’re not doing much, but you might have some some, stockpiling and selling of material if if you get a warm winter or weather is is accommodating. So, generally, for Stivola, q one for the company is EBITDA breakeven, slight EBITDA loss, maybe slight EBITDA profit if if weather is warmer. And so what we saw in q one is very much what we would would have anticipated, which was a $2,000,000 EBITDA loss for the business. And just to provide context, you know, at the time we closed Ebola, Ebola was about a $100,000,000 EBITDA business.
So you’re losing EBITDA or breaking even in the first quarter. And then, of course, your q twos and q threes are your seasonally strongest. And then q four, a good quarter. And you saw that for the company in q four of last year where Stivola added about 25 to $30,000,000 of EBITDA. We we disclosed the number.
I can’t remember it exactly. So a good contributor in the fourth quarter. A little bit more weather dependent than q two and q three. But so that’s the seasonality pattern to to Ebola. So it was dilutive both to EBITDA dollars and margin, you know, to the tune of maybe 300 basis points to the segment margin in q one, and we expect it to be highly accretive on a full year basis to to the segment.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Very helpful. That thanks for level setting that that unique seasonality there. Sure. For sure. So maybe if we could talk a little bit about aggregates pricing for Stivola and maybe compare the current pricing environment for Stivola versus what you’re seeing in the rest of the aggregates portfolio.
Gail Peck, Chief Financial Officer, Arcosa: Yeah. Pricing is behaving, I’d say, very similarly to from a from a maybe I’d say Stivola is accretive to our ASP. We did acquire five Hard Rock quarries up in New Jersey. So the ASPs generally in that area of the country are higher, and then Hard Rock, tends to be at a higher price point. So a very accretive acquisition from an ASP perspective.
But the pricing trends, have been very similar in terms of rate of growth that we’ve seen generally across the portfolio. So healthy price environment, just that Stivola adds a bit of accretion to our overall ASP.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Great. And what are the key drivers supporting your pricing momentum, you know, despite some some volume weakness out there in the market at this point?
Gail Peck, Chief Financial Officer, Arcosa: Yeah. I I I’d say to to Stivola in in particular or more more across the portfolio?
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: You could do both if if Okay. Yeah.
Gail Peck, Chief Financial Officer, Arcosa: I guess what I what I was gonna say, which you you won’t be surprised to hear, is it’s a very local, it’s a very local business. So not all markets are behaving exactly the same. Stivola market, very, very healthy, very solid letting activities, solid quoting activities. And just for a reminder of, those listening, very infrastructure replacement driven market to the tune of, say, three quarters of of Stivola’s revenue are are sourced by infrastructure replacement, demand drivers. So healthy environment.
Volume growth generally tends to be fairly stable. Looking historically, peaks maybe not as high as peaks have been nationally, but troughs certainly above, less negative, as we look through through time. So much a very stable market. And that that’s that’s kind of what we’re feeling, up in the New York, New Jersey market right now. Stable outlook, pricing, opportunities.
January, we talked about on our earnings call, went through well, and we’ll selectively look at opportunities, you know, as the year advances. And then as I move across, the other logical place to to maybe comment on is Texas. Texas is our largest market from an aggregates perspective. We’re we’re, up in the Dallas Fort Worth market. We’re in Central Texas.
We’re down in the Houston area. So really kind of the triangle of of of Texas. And I I would say, you know, the markets, depends where you are. As we’ve mentioned on our earnings call, Houston, we’ve still seen a relatively stable, residential market. Volumes have held up quite well in that market.
A little bit of opportunity within Central Texas from the housing perspective. Dallas Fort Worth, I’d say, is a little bit slower on the residential side, but data center activity, warehouse activity. So it’s it’s it’s a bit of a mixed. I think we have good exposure to all end markets in the Texas, and different areas of the state are behaving differently, but overall very healthy. And, of course, the long term outlook for our biggest state is very, very favorable.
As you move away from Texas, I’d say probably the next biggest market for us would be the Arizona and the Phoenix area. Very good industrial demand manufacturing, drivers in the Phoenix area. Residential has been soft. You know, no surprise there. But the outlook, particularly given the level of investment, in and around where our quarries are, very favorable from kind of the medium term view of residential returning to the the the general Phoenix area.
But I I I I’d say the the thing that’s been a little bit and you’ve probably heard this from from some of the other, companies you cover, weather has been you know, this is the rain season. I mean, it it’s first quarter’s cold and and can be wet and cold. And then, you know, two q’s always a little bit of a shoulder season in terms of the construction season getting going, which, we’re very optimistic about. But we’ve had some some weeks of weather here. It’s been a wet week here in Texas this week.
New Jersey has been a little wet. So we’re kinda parsing through some of that, you know, just some of that slow and slowness you get associated with weather and then ramping back up on on the better days. But when the weather is solid and normal, demand, seems very healthy.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Great. Thank you for writing through kind of all the different end markets there and the drivers. Maybe turning to the engineered structures segment, which was the kind of crown jewel outperformer of the first quarter, at least from an expectations perspective from the Street perspective, I should say. But, you know, maybe you could talk about the segment margin outperformance and the profit dollar outperformance that you realized in engineered structures in in the quarter and and what the key puts and takes are there.
Gail Peck, Chief Financial Officer, Arcosa: Yeah. I I’d say I you know, very pleased with the performance, for the segment really across the board. And I mentioned in my in my remarks, we’ve got five lines of business in that segment, you know, two bigger ones, but five lines of business. And, really, across the board, we executed extremely well. So very good execution in the quarter.
The biggest drivers would be the performance within utility structures. You’d imagine the biggest business in that segment, and then the continued ramp in our wind towers business. Last year, this time of year, we were still ramping our New Mexico Brownfield facility for wind towers. And so q one, we were finishing that ramp. So the year over year benefit of of not having those start up costs associated with the Berlin, New Mexico facility certainly was helpful for the quarter.
That, I would attribute it to that as well as to the performance within utility structures. Better product mix year over year, which we had anticipated, and very solid execution, within the utility structures business. The one small thing that we talked about that’s just sort of a maybe an anomaly in the quarter is just the timing of when we sell our wind tower tax credits. And so we have expectations to sell our twenty twenty five wind tower tax credits. The first quarter sales settled in April, so we didn’t accrue the small loss in q one just really from a timing perspective.
So that might have been a point to margin. Still outstanding performance for the segment year over year.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Yes. And you talked about the utility structures piece and the volume outperformance there in the quarter. Can you just talk to what’s what’s driving that that volume strength and maybe current demand trends and future demand catalysts for the utility structures piece of the of the business?
Gail Peck, Chief Financial Officer, Arcosa: Sure. It’s it’s, something we’re very excited about. We had double digit unit growth in that business in the quarter, but we’ve had very good volume growth in that business really over the last, you know, three to five years. And and the drivers there have really been grid hardening. You know, think, you know, the tragic fires in California that we had several years ago, the grid hardening, grid resiliency, connecting renewables to the grid.
That that’s created a very healthy demand market that we’ve been in the last really, for almost since spin, the last six years. And what you’re seeing now is the transition into, load growth expectations. So for the last couple of decades in The US, we’ve been in a, you know, a very low to no load growth environment, still having brownouts and challenges with our grid. And now the expectations are for load growth over the next ten years associated with all of the things that you would expect, the data center, AI, increased electrification. And so the combination with continued focus on grid hardening and grid resiliency along with growth expectations is creating a very robust demand outlook for our utility structures business.
We commented on our last earnings call that we do we are evaluating, transitioning an idled wind tower facility to utility structures, in The US as we look at the you know, relative to the demand outlook and the need for additional capacity in a very measured way within the industry. So very, very optimistic on the utility structures business.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Yeah. That that part is fascinating because there’s so many secular trends it’s exposed to. You didn’t even touch on broad broadband, I think, which is another area that that
Gail Peck, Chief Financial Officer, Arcosa: That’s right. And, you know, and and telecom is is small for us, but, you know, growing at a you know, I think the industry got started, then there was a little bit of a pause, and we’re encouraged by some of the the the movement we’re seeing in that business. But I, you know, I wanna caution people it’s still a relatively small business for Arcosa, but we do play, in that space as well.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Excellent. Yeah. Very exciting there. Maybe if we could talk about the wind business a little bit within the segment. Maybe just touch on where that is along the cost curve.
You know, what are you excited about in wind? And then also if you could tie in a little bit about what what, you know, the the risk is from, you know, potential curbing of tax credits from the new potential administration on the wood business as well.
Gail Peck, Chief Financial Officer, Arcosa: I’d say wind fits very well with the narrative around utility utility structures and really the narrative around growth of power in The US. And so, you know, as you know, Julio, we’ve been in the wind business for a couple of decades now. And our CEO, Antonio, has been around that business for really that entire length of time. And so it’s it’s it’s it’s interesting to hear his perspective. You know, wind has always been a nice to have, you know, provides energy, intermittent source of energy, aligns with sustainability goals.
It’s it’s it’s been a nice complement. What we feel like we’ve moved into is an environment where there is such increased need for new generation that it is absolutely needs to be an all of the above strategy, and renewables need to play a role. And those that can fill that gap sooner is wind and solar. So we’re very encouraged on the demand outlook. And what wind you know, we’ve been around it a long time.
Policy always matters. Right? And so we had a period of time of uncertainty and not a lot of activity in the wind industry around the time before the passage of the inflation reduction back excuse me, inflation reduction act. So go back to summer of twenty twenty two. You know, not a lot of activity.
We thought the PTC was gonna go away. Then there was conversation around the Build Back Better plan, and then you had the IRA, ten year long runway. And then you have, you know, fast forward another two years. So, you know, we took maybe maybe just to take a step back, we took over a billion dollars of orders once the IRA was passed. We had uncertainty again with the change in the administration.
And so what we’ve been wait what what we’ve been saying is we need to pair this very positive demand outlook with more stability on the policy side. So we’re encouraged. You asked about the policy within the house. We’re encouraged by maybe having some clarity this summer. So the house gave us insight into potential changes.
Yes. There was a rollback on on wind, but it gives us, you know, a very good runway for three years. So the PTC, as proposed in the house bill, would phase out after 2028. The 45 x that our COSA receives would phase out after 2027. But having that runway and that ability to plan and to execute and and it’s shortened relative to the original time frame, we really you know, what it means to us is we’re gonna see a pull forward of demand.
But what we need is to see this get through the senate. And, you know, as I said, most view the house as a floor. You know, do we see things improved in the senate? There’s a view that that that we will see that. Either way, having that clarity and being able to move forward is very important.
So, you know, outlook, very positive. Policy clarity, we’re very hopeful. I’ll tell you, after the house bill, we’ve had more conversation with our customers. So I think, you know, these are the things that we need to see to get action moving. So we’re watching it closely, and, you know, hopefully, late July, early August before recess, summer recess, we’ll have some conclusions.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Great context there. Thank you, Gail. Just maybe thinking a little more broadly about the portfolio, and the deleveraging path and, you know, whether you remain on track to bring down leverage within the eighteen months post close of Stivola.
Gail Peck, Chief Financial Officer, Arcosa: Yeah. I think we’ve, you know, at at at announcement of Stivola last August, we were pro form a 3.7 times net debt to EBITDA above our two to two and a half times target. I think we’ve know, at that time, we gave a goal of eighteen months from close, which is the end of q one twenty six to get back to the two to two and a half, and we’ve made excellent progress since then. We ended the year. We fully repaid our revolver, ended the year at 2.9 times.
We maintained that in our seasonally slow q one, and we expect to have further deleveraging in the back half of the year. And I’ll remind, folks that that deleveraging target is is is organic. It’s not inclusive of any divestitures or potential, you know, proceeds from sales of assets. So it is a purely organic path to deleveraging that we feel very confident in.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Absolutely. With with about a minute left, I’m gonna try to squeeze two in here quickly.
Gail Peck, Chief Financial Officer, Arcosa: Sure.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: The one is just, you know, you’ve been very consistent, as you said at the beginning, as to where the portfolio has has been going since the spin, kind of remarkably consistent message since that time. You know, can you just discuss any ways in which the thought process as to the direction of the portfolio has evolved, if at all, since spin?
Gail Peck, Chief Financial Officer, Arcosa: I you know, you said it, Julio. I think we’ve been very consistent, consistent in articulating what our strategy is and then executing against that strategy. Timing always you know, you can be off a little bit in general timing. Things happen like a COVID out of your control. So, you know, there are things that might get you off or policy, unanticipated policy changes.
So, directionally, though, strategy has not changed. Arcosa wants to simplify. We’re three segments today. You know, will will we be two segments at that at some point? I I absolutely think so.
And we’ll, you know, continue to look to grow in our growth businesses, aggregates led focus around utility structures in the engineered structures segment, and we’ll simplify in reducing the cyclicality. We have some great businesses in our portfolio, some of which are just deeply cyclical for various reasons. And our goal is to simplify, reduce the cyclicality, and continue to to grow in which we think are very attractive markets with, some some excellent long term growth drivers for us.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Excellent. And I guess, you know, that portfolio simplification, where does that take you as from a business perspective, you know, if someone’s looking at your business five to ten years out?
Gail Peck, Chief Financial Officer, Arcosa: Look. You know, we have a construction is 60% of our adjusted EBITDA today. We’d like to see that bigger. You know, I mentioned I think we’d be disappointed if we weren’t a two segment company someday. So I think and then, you know, we’ll we’ll see.
I I it’s really about maximizing the value of the businesses while we own them. We love our businesses. We’re just not in love with them. We are you know, our goal within the corporate office is to generate cash, allocate cash, and that is what we have been about and going about in a very disciplined manner at at Arcosa.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Well said. Dale, Erin, thanks so much for taking the time.
Gail Peck, Chief Financial Officer, Arcosa: Yeah. Thank you. Bye.
Julio Romero, Industrials, Building Products, and E&C Analyst, Sidoti and Company: Alright. Bye.
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