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April 30, 2021, 10:31 a.m. EDT

10-Q: ARCOSA, INC.

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(EDGAR Online via COMTEX) -- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Our MD&A is presented in the following sections: Company Overview Potential Impact of COVID-19 On Our Business Executive Overview Results of Operations Liquidity and Capital Resources Recent Accounting Pronouncements Forward-Looking Statements Our MD&A should be read in conjunction with the Consolidated Financial Statements of Arcosa, Inc. and subsidiaries ("Arcosa," "Company," "we," or "our") and related Notes in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Consolidated and Combined Financial Statements and related Notes in Item 8, "Financial Statements and Supplementary Data", of our Annual Report on Form 10-K for the year ended December 31, 2020 ("2020 Annual Report on Form 10-K").

Company Overview







                                                 March 31,       March 31,
                                                    2021            2020
                                                       (in millions)
        Engineered Structures:
        Utility, wind, and related structures   $    379.5      $    475.6
        Storage tanks                                 30.7            29.0
        Transportation Products:
        Inland barges                           $    133.2      $    348.3
        


Substantially all of the unsatisfied performance obligations for our utility, wind, and related structures in our Engineered Structures segment are expected to be delivered during 2021. All of the unsatisfied performance obligations for our storage tanks business in our Engineered Structures segment are expected to be delivered during 2021. Approximately 91% of unsatisfied performance obligations for inland barges in our Transportation Products segment are expected to be delivered during 2021, with the remainder expected to be delivered during 2022.







        Results of Operations
        Overall Summary
        Revenues
                                                                                 Three Months Ended March 31,
                                                                                                           2021             2020
                                                                                    (in millions)                  Percent Change
        Construction Products                                                                           $ 153.2          $ 149.4                   2.5  %
        Engineered Structures                                                                             207.0            223.2                  (7.3)
        Transportation Products                                                                            80.2            117.0                 (31.5)
        Segment Totals before Eliminations                                                                440.4            489.6                 (10.0)
        Eliminations                                                                                          -             (1.4)
        Consolidated Total                                                                              $ 440.4          $ 488.2                  (9.8)
        


2021 versus 2020







        Operating Costs
                                                                                 Three Months Ended March 31,
                                                                                                           2021             2020
                                                                                    (in millions)                  Percent Change
        Construction Products                                                                           $ 137.4          $ 132.6                   3.6  %
        Engineered Structures                                                                             189.5            198.3                  (4.4)
        Transportation Products                                                                            76.1            102.7                 (25.9)
        Segment Totals before Eliminations and Corporate Expenses                                         403.0            433.6                  (7.1)
        Corporate                                                                                          14.5             10.9                  33.0
        Eliminations                                                                                          -             (1.4)
        Consolidated Total                                                                              $ 417.5          $ 443.1                  (5.8)
        


2021 versus 2020







        Operating Profit (Loss)
                                                                                 Three Months Ended March 31,
                                                                                                           2021             2020
                                                                                    (in millions)                  Percent Change
        Construction Products                                                                           $  15.8          $  16.8                  (6.0) %
        Engineered Structures                                                                              17.5             24.9                 (29.7)
        Transportation Products                                                                             4.1             14.3                 (71.3)
        Segment Totals before Corporate Expenses                                                           37.4             56.0                 (33.2)
        Corporate                                                                                         (14.5)           (10.9)                 33.0
        Consolidated Total                                                                              $  22.9          $  45.1                 (49.2)
        


2021 versus 2020

For a further discussion of revenues, costs, and the operating results of individual segments, see Segment Discussion below. Other Income and Expense







                                                            Three Months Ended
                                                                March 31,
                                                                            2021         2020
                                                                              (in millions)
        Interest income                                                   $     -      $ (0.2)
        Foreign currency exchange transactions                                0.6           -
        Other                                                                (0.1)          -
        Other, net (income) expense                                       $   0.5      $ (0.2)
        


Table of Contents

Income Taxes







        Segment Discussion
        Construction Products
                                                                                Three Months Ended March
                                                                                          31,
                                                                                                 2021             2020              Percent
                                                                                       ($ in millions)           Change
        Revenues:
        Aggregates and specialty materials                                                    $ 135.3          $ 132.1                   2.4  %
        Other                                                                                    17.9             17.3                   3.5
        Total revenues                                                                          153.2            149.4                   2.5
        Operating costs:
        Cost of revenues                                                                        118.9            115.0                   3.4
        Selling, general, and administrative expenses                                            18.5             17.6                   5.1
        Operating profit                                                                      $  15.8          $  16.8                  (6.0)
        Depreciation, depletion, and amortization(1)                                          $  17.1          $  13.8                  23.9
        


(1) Depreciation, depletion, and amortization are components of operating profit. Three Months Ended March 31, 2021 versus Three Months Ended March 31, 2020

Table of Contents







        Engineered Structures
                                                                                Three Months Ended March
                                                                                          31,
                                                                                                 2021             2020              Percent
                                                                                       ($ in millions)           Change
        Revenues:
        Utility, wind, and related structures                                                 $ 164.0          $ 176.4                  (7.0) %
        Storage tanks                                                                            43.0             46.8                  (8.1)
        Total revenues                                                                          207.0            223.2                  (7.3)
        Operating costs:
        Cost of revenues                                                                        171.1            181.0                  (5.5)
        Selling, general, and administrative expenses                                            18.4             17.3                   6.4
        Operating profit                                                                      $  17.5          $  24.9                 (29.7)
        Depreciation and amortization(1)                                                      $   8.4          $   7.4                  13.5
        


(1) Depreciation and amortization are components of operating profit. Three Months Ended March 31, 2021 versus Three Months Ended March 31, 2020

Unsatisfied Performance Obligations (Backlog) As of March 31, 2021, the backlog for utility, wind, and related structures was $379.5 million, compared to $334.0 million and $475.6 million as of December 31, 2020 and March 31, 2020, respectively, substantially all of which is expected to be delivered during the year ending December 31, 2021. Future wind tower orders are subject to uncertainty as PTC eligibility for new wind farm projects is currently in a phase-out period that extends until 2025. Pricing of orders and individual order quantities reflect a market transitioning from PTC incentives. As of March 31, 2021, the backlog for our storage tank business was $30.7 million, all of which is expected to be delivered during the year ending December 31, 2021.

Table of Contents







        Transportation Products
                                                                               Three Months Ended March
                                                                                          31,
                                                                                                 2021             2020              Percent
                                                                                       ($ in millions)           Change
        . . .
        


Apr 30, 2021

COMTEX_385442021/2041/2021-04-30T10:31:09

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