Arcosa Reports ‘Positive Demand’ For Barge Products
The outlook is bright for leading barge-maker Arcosa as it reported on February 26 that fourth-quarter 2019 revenues increased 19 percent to $446.9 million, with demand for barges anchoring the strong results.
Net income for the fourth quarter was 44 cents per common share. Net income for 2019 was $113.3 million, vs. $75.7 million for the prior December.
Commenting on 2019 performance, Antonio Carrillo, president and CEO, said, “Full year results reflected continued progress on our Stage One priorities and demonstrated solid execution from our operating teams. Specifically, we expanded our construction products business with acquisitions that provide platforms for future growth, substantially improved our energy equipment margins through lean manufacturing initiatives and capitalized on the barge market recovery with revenue growth that more than offset softness in rail components.”
“Additionally, we continued to operate effectively with a flat organizational structure and drove considerably higher free cash flow for the year as we seek to build a ‘cash culture’ across Arcosa.”
Fourth quarter revenues increased 56 percent to $102.2 million, benefitting from higher volumes in the company’s legacy businesses and the December 2018 acquisition of ACG Materials.
Barge Revenues Up 114 Percent
During the fourth quarter, revenues in the barge business increased 114 percent compared to the prior period, contributing to a full-year increase of 73 percent, as the business successfully ramped up to meet the ongoing market recovery. Approximately $15 million of barge revenues shifted into January 2020, causing fourth quarter revenues to be below the company’s expectations.
Based on its current portfolio of businesses, the company said it expects full year 2020 revenues of $1.95 billion to $2.1 billion, which represents year-over-year growth of 17 percent at the midpoint.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to range from $275 million to $300 million, the company said, up 19 percent at the midpoint, with approximately 55 percent of Adjusted EBITDA expected to be generated in the second half of the year, due primarily to the anticipated delivery schedules for the company’s barge and wind tower businesses.
Commenting on the outlook for 2020, Carrillo noted, “Market conditions across our portfolio remain robust, with a few exceptions. … We are experiencing positive demand for our construction products, barges, and utility structures, which we expect to more than offset headwinds in our rail components business and lower pricing in our wind towers business.”
The barge business received orders for $83.9 million, representing a book to bill ratio of 0.8 on 30 percent higher sequential revenues. The orders, which are scheduled for delivery in 2020, included a mix of dry and liquid barges. For the second consecutive quarter, the company received a higher proportion of dry barge orders as lower steel prices encouraged replacement of older barges.
Barge backlog totaled $346.9 million at the end of December, up 50 percent compared to last year, with improved pricing levels.