Arcosa, Inc.: Form 10-Q for the period ended Jun 30, 2025

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
• Market Outlook
• 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 its consolidated 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 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, 2024 (“2024 Annual Report on Form 10-K”).

Company Overview

Arcosa, headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading brands serving construction, engineered structures, and transportation markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018 as a publicly-traded company, listed on the New York Stock Exchange.

Market Outlook

• Within our Construction Products segment, market demand remains healthy overall when seasonal weather conditions have been normal, supported by increased infrastructure spending and private non-residential activity. The outlook for single-family residential housing continues to be impacted by higher interest rates and home affordability, which has negatively impacted volumes. We have been successful in managing inflationary cost pressures through proactive price increases.
• Within our Engineered Structures segment, our backlog as of June 30, 2025 provides good production visibility for the remainder of 2025. Our customers remain committed to taking delivery of these orders. In utility structures, order and inquiry activity continues to be healthy, as customers remain focused on grid hardening and reliability initiatives, along with increasing demand for electricity. In our wind towers business, the Inflation Reduction Act ("IRA"), which passed in August 2022, was a significant catalyst for order activity following its passage. The IRA included a long-term extension of the Production Tax Credit (“PTC”) for new wind farm projects and introduced new Advanced Manufacturing Production (“AMP”) tax credits for companies that domestically manufacture and sell clean energy equipment in the U.S. Shortly following the passage of the IRA, we received new wind tower orders of $1.1 billion for delivery through 2028, a large portion of which is supporting wind energy expansion projects in the Southwest. As a result, we opened a new plant in New Mexico and started delivering towers from this facility in the second quarter of 2024. Uncertainty around potential changes in energy policy with the current U.S. presidential administration tempered order activity. The OBBBA, which was enacted on July 4, 2025, includes several provisions that roll-back, phase out, repeal, and/or add stricter eligibility requirements for, several tax incentives applicable to wind and solar projects. The OBBBA terminates the IRA's AMP tax credits for wind towers sold after 2027. Also, under the OBBBA, wind farm projects that begin construction after July 4, 2026, and are not placed in service before the end of 2027, will not be eligible for the PTC. The pending expiration of these incentives may pull demand forward. Notwithstanding these developments, we remain confident that further investment in wind energy is needed to meet the load growth demands in the U.S., and we continue to have discussions with our customers about additional orders for 2026 and beyond. As of June 30, 2025, our remaining backlog for wind towers was $598.6 million.
• Within our Transportation Products segment, our backlog for inland barges as of June 30, 2025 was $277.0 million, up 10% from June 30, 2024. Our customers remain committed to taking delivery of these orders. Our barge business is recovering from cyclical lows resulting from the onset of the COVID-19 pandemic when order levels fell sharply due to high steel prices throughout 2022 and 2023. Over this time, customer inquiries have remained healthy, initially for dry barges and more recently for tank barges. Our backlog for tank barges extends deep into 2026. Both fleets continue to age as new builds have not kept pace with scrapping, which indicates future replacement demand. During the second quarter, we received orders of $33 million primarily for hopper barges. After quarter end, we received additional orders totaling $122 million, solidifying our 2025 production plans and extending our hopper barge backlog into 2026 as well.

Executive Overview

Recent Developments

In October 2024, the Company completed the acquisition of the construction materials business of Stavola Holding Corporation and its affiliated entities ("Stavola") for $1.2 billion in cash. Stavola, which is reported within the Construction Products segment, serves the New York-New Jersey MSA through its network of five hard rock natural aggregates quarries, twelve asphalt plants, and three recycled aggregates sites.

In August 2024, the Company completed the sale of its steel components business. Previously reported in the Transportation Products segment, the steel components business was a leading supplier of railcar coupling devices, railcar axles, and circular forgings. As the steel components business was not core to Arcosa's long-term strategy, its divestiture was not considered a strategic shift that would have a major effect on the Company's operations or financial results either from a quantitative or qualitative perspective. As such, it is not reported as a discontinued operation.

Financial Operations and Highlights

• Revenues for the three and six months ended June 30, 2025 increased by 10.9% and 8.4%, respectively, to $736.9 million and $1,368.9 million, respectively, from the same periods in 2024, due to higher revenues in Construction Products and Engineered Structures, partially offset by lower revenues in Transportation Products resulting from the divestiture of the steel components business.
• Operating profit for the three and six months ended June 30, 2025 increased by $27.6 million and $30.0 million, respectively, to $94.8 million and $150.6 million, respectively, from the same periods in 2024, primarily driven by higher operating profit in Construction Products and Engineered Structures, partially offset by a decrease in Transportation Products resulting from the divestiture of the steel components business.
• Selling, general, and administrative expenses decreased by 8.2% and 1.3% for the three and six months ended June 30, 2025, respectively, from the same periods in 2024. As a percentage of revenues, selling, general, and administrative expenses were 9.9% and 10.7% for the three and six months ended June 30, 2025, respectively, compared to 12.0% and 11.8% for the same periods in 2024, respectively.
• Interest expense for the three and six months ended June 30, 2025 totaled $28.5 million and $56.8 million, respectively, an increase of $17.1 million and $37.1 million, respectively, from the same periods in 2024, driven by the additional debt incurred to finance the Stavola acquisition.
• The effective tax rate for the three and six months ended June 30, 2025 was 14.5% and 15.9%, respectively, compared to 14.3% and 15.6%, respectively, for the same periods in 2024. See Note 10 Income Taxes to the Consolidated Financial Statements.
• Net income for the three and six months ended June 30, 2025 was $59.7 million and $83.3 million, respectively, compared to $45.6 million and $84.8 million, respectively, for the same periods in 2024.

Our Engineered Structures and Transportation Products segments operate in cyclical industries. Additionally, results in our Construction Products segment are affected by weather and seasonal fluctuations with the second and third quarters historically being the quarters with the highest revenues.

Unsatisfied Performance Obligations (Backlog)

As of June 30, 2025, December 31, 2024, and June 30, 2024, our unsatisfied performance obligations, or backlog, were as follows:

(in millions)

In our Engineered Structures segment, 84% of the unsatisfied performance obligations for our utility and related structures are expected to be delivered during 2025, and substantially all of the remaining performance obligations are expected to be delivered in 2026. For our wind towers business, 30% of the unsatisfied performance obligations are expected to be delivered during 2025, 24% are expected to be delivered during 2026, and the remainder are expected to be delivered through 2028.

For inland barges in our Transportation Products segment, 57% of the unsatisfied performance obligations are expected to be delivered during 2025, and the remainder are expected to be delivered during 2026.

Results of Operations

Overall Summary

Revenues

(in millions)

(in millions)

2025 versus 2024

• Revenues increased by 10.9% and 8.4% during the three and six months ended June 30, 2025, respectively.
• Revenues from Construction Products increased primarily due to the contribution from the Stavola acquisition, which closed in October 2024.
• Revenues from Engineered Structures increased primarily due to higher volumes in our wind towers business. For the six months ended June 30, 2025, revenues also increased due to the contribution from the acquired Ameron business, which closed in April 2024.
• Revenues from Transportation Products decreased due to the divestiture of the steel components business, which was completed in August 2024, partially offset by higher barge revenues.

Operating Costs

(in millions)

(in millions)

(1) Depreciation, depletion, and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.

2025 versus 2024

• Operating costs increased by 7.5% and 6.6% during the three and six months ended June 30, 2025, respectively.
• Operating costs for Construction Products increased primarily due to additional costs from the acquired Stavola business.
• Operating costs for Engineered Structures increased primarily due to higher volumes in wind towers, partially offset by lower steel costs for utility structures.
• Operating costs for Transportation Products decreased primarily due to the divestiture of the steel components business, partially offset by higher barge volumes.
• Depreciation, depletion, and amortization expense increased primarily due to the acquisition of Stavola.
• Selling, general, and administrative expenses decreased by 8.2% and 1.3% for the three and six months ended June 30, 2025, compared to the same periods in the prior year. As a percentage of revenues, selling, general, and administrative expenses were 9.9% and 10.7% for the three and six months ended June 30, 2025, respectively, compared to 12.0% and 11.8% for the same periods in 2024, respectively.

Operating Profit (Loss)

(in millions)

(in millions)

2025 versus 2024

• Operating profit increased 41.1% and 24.9% for the three and six months ended June 30, 2025, respectively.
• Operating profit in Construction Products increased primarily due to the impact of the acquired Stavola business.
• Operating profit in Engineered Structures increased due to higher wind tower volumes as well as improved product mix and operating improvements in our utility structures business.
• Excluding the impact of the divested steel components business, operating profit in Transportation Products increased due to higher barge volumes.

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

Other Income and Expense

Other (income) expense consists of the following items:

(in millions)

Income Taxes

The provision for income taxes results in effective tax rates that differ from the statutory rates. The Company's effective tax rate for the three and six months ended June 30, 2025 was 14.5% and 15.9%, respectively, compared to 14.3% and 15.6%, respectively, for the same periods in 2024. The change in the tax rate for the three and six months ended June 30, 2025 is primarily due to higher state taxes and foreign adjustments.

Our effective tax rate differs from the federal tax rate of 21.0% due to AMP tax credits, state income taxes, statutory depletion deductions, compensation-related items, and other foreign adjustments. See Note 10 Income Taxes to the Consolidated Financial Statements for further discussion of income taxes.

Segment Discussion

Construction Products

($ in millions)

($ in millions)

(1) Depreciation, depletion, and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

• Revenues increased 28.4% primarily due to the acquisition of Stavola which contributed $90.3 million to revenues during the quarter. Organic revenues in our construction materials businesses declined as higher pricing was offset by lower volumes, a decrease in freight revenue, and a reduction in revenue from operations divested in the prior year. Revenues in our trench shoring business decreased 7.6% primarily due to lower volumes and reduced steel prices.
• Cost of revenues increased 29.7% due to increased costs from the Stavola acquisition, including higher depreciation, depletion, and amortization expense. This was partially offset by a slight decrease in costs for our legacy businesses driven by lower organic volumes. As a percentage of revenues, cost of revenues increased to 76.2% in the current period, compared to 75.4% in the prior period.
• Selling, general, and administrative expenses increased 4.1% due to additional costs from Stavola partially offset by lower costs in our legacy businesses. Selling, general, and administrative expenses as a percentage of revenues was 8.5% in the current period, compared to 10.5% in the prior period.
• Operating profit increased 48.7% primarily due to the impact of the Stavola acquisition, which contributed $22.9 million in the current period. On an organic basis, operating profit decreased due to the decline in revenues and lower cost absorption.
• Depreciation, depletion, and amortization expense increased 42.2% primarily due to the acquisition of Stavola, including the fair market value write-up of long-lived assets.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

• Revenues increased 17.1% primarily due to the acquisition of Stavola which contributed $116.7 million to revenues during the period. Organic revenues in our construction materials businesses declined as higher pricing was offset by lower volumes, a decrease in freight revenue, and a reduction in revenue from operations divested in the prior year. Revenues from our trench shoring business decreased 6.0% primarily due to lower volumes and reduced steel prices.
• Cost of revenues increased 19.8% primarily due to increased costs from the recently acquired businesses, including higher depreciation, depletion, and amortization expense. These costs were partially offset by lower costs in our legacy businesses driven by lower organic volumes. As a percentage of revenues, cost of revenues was 78.9% in the current period, compared to 77.1% in the prior period.
• Selling, general, and administrative expenses increased 7.7% due to additional costs from Stavola partially offset by lower costs in our legacy businesses. Selling, general, and administrative expenses as a percentage of revenues was 10.0% in the current period, compared to 10.8% in the prior period.
• Operating profit increased 12.8% primarily due to the impact of the Stavola acquisition, which contributed $11.9 million in the current period. On an organic basis, operating profit decreased roughly in line with the decrease in revenues.
• Depreciation, depletion, and amortization expense increased 35.1% primarily due to the acquisition of Stavola, including the fair market value write-up of long-lived assets.

Engineered Structures

($ in millions)

($ in millions)

(1) Depreciation, depletion, and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

• Revenues increased 6.6% primarily due to higher volumes from the new wind tower facility in New Mexico which delivered its first wind tower in the prior period. Revenues for utility and related structures decreased slightly as higher volumes and improved product mix were offset by lower steel prices.
• Cost of revenues increased 1.4% primarily due to higher wind tower volumes. Costs of revenues for utility structures declined as lower steel costs more than offset increased volumes. As a percentage of revenues, cost of revenues decreased to 77.5% in the current period, compared to 81.5% in the prior period. This decrease is partially attributed to startup costs incurred in the prior period for the new wind tower facility.
• Selling, general, and administrative expenses decreased 2.5%. Selling, general, and administrative expenses as a percentage of revenues was 7.9% in the current period, compared to 8.7% in the prior period.
• During the prior period, the Company recognized a gain on the sale of a non-operating facility that previously supported the divested business.
• Operating profit increased 21.9% primarily due to higher wind tower volumes as well as increased volumes and operating improvements in our utility and related structures businesses, partially offset by the asset sale gains recognized in the prior period from the divested business.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

• Revenues increased 14.1% primarily due to higher volumes from our new facility in our wind towers business. Revenue for our utility and related structures businesses increased slightly as higher utility structures volumes and the contribution from Ameron, which was acquired in April 2024, was partially offset by lower steel prices.
• Cost of revenues increased 7.6% primarily due to higher wind tower volumes. Costs of revenues for utility structures declined as lower steel costs more than offset increased volumes. As a percentage of revenues, cost of revenues decreased to 77.8% in the current period, compared to 82.5% in the prior period. This decrease is partially attributed to startup costs incurred in the prior period for the new wind tower facility.
• Selling, general, and administrative expenses increased 9.7% primarily due to additional costs from the acquired Ameron business.
• During the prior period, the Company recognized an additional gain related to the divestiture of the storage tanks business, which closed in October 2022, including a gain on the settlement of certain contingencies from the sale and a gain on the sale of a non-operating facility that previously supported the divested business.
• Operating profit increased 33.2% primarily due to higher wind tower volumes as well as increased volumes and operating improvements in our utility and related structures businesses, partially offset by the asset sale gains recognized in the prior period from the divested business.

Unsatisfied Performance Obligations (Backlog)

As of June 30, 2025, the backlog for utility and related structures was $450.0 million compared to $414.0 million and $424.6 million as of December 31, 2024 and June 30, 2024, respectively. We expect to deliver 84% of the unsatisfied performance obligations for utility and related structures during 2025, and substantially all of the remaining performance obligations are expected to be delivered in 2026.

The backlog for wind towers as of June 30, 2025 was $598.6 million compared to $776.8 million and $914.1 million as of December 31, 2024 and June 30, 2024, respectively. We expect to deliver 30% of the unsatisfied performance obligations for wind towers during 2025, 24% during 2026, with the remainder expected to be delivered through 2028.

Transportation Products

($ in millions)

($ in millions)

(1) Depreciation, depletion, and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

• Revenues decreased 21.4% resulting from the sale of the steel components business. Inland barge revenues increased 18.1%, driven by higher tank barge deliveries, partially offset by lower hopper barge deliveries.
• Cost of revenues decreased 22.0% driven by the steel components divestiture, partially offset by higher cost of revenues for the barge business due to increased volumes.
• Selling, general, and administrative expenses were roughly flat, excluding the impact of the steel components business from the prior period.
• Operating profit increased 9.4%, excluding the impact of the steel components divestiture, driven by increased operating profit for the barge business primarily due to increased tank barge volumes.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

• Revenues decreased 24.3% resulting from the sale of the steel components business. Inland barge revenues increased 11.8%, driven by higher tank barge deliveries, partially offset by lower hopper barge deliveries.
• Cost of revenues decreased 25.8% driven by the steel components divestiture, partially offset by higher cost of revenues for the barge business due to increased volumes.
• Selling, general, and administrative expenses were roughly flat, excluding the impact of the steel components business from the prior period.
• Operating profit increased 11.0%, excluding the impact of the steel components divestiture, driven by increased operating profit for the barge business primarily due to increased tank barge volumes.

Unsatisfied Performance Obligations (Backlog)

As of June 30, 2025, the backlog for inland barges was $277.0 million, compared to $280.1 million and $251.5 million as of December 31, 2024 and June 30, 2024, respectively. We expect to deliver 57% of the unsatisfied performance obligations for inland barges during 2025, and the remainder are expected to be delivered in 2026.

Corporate

(in millions)

(in millions)

Three Months Ended June 30, 2025 versus Three Months Ended June 30, 2024

• Corporate overhead costs decreased 22.6% primarily due to lower acquisition and divestiture-related expenses of $0.5 million, compared to $3.9 million for the same period in 2024.

Six Months Ended June 30, 2025 versus Six Months Ended June 30, 2024

• Corporate overhead costs decreased 14.9% primarily due to lower acquisition and divestiture-related expenses of $1.3 million, compared to $5.5 million for the same period in 2024.

Liquidity and Capital Resources

Arcosa’s primary liquidity requirement consists of funding our business operations, including operating expenses, capital expenditures, working capital investment, and our regular quarterly dividend. Our primary sources of liquidity include cash flow from operations, our existing cash balance, availability under the revolving credit facility, and, as necessary, the issuance of additional long-term debt or equity. We may also consider undertaking disciplined acquisitions, organic investment projects, additional return of capital to stockholders, or funding other general corporate purposes to the extent we have available liquidity.

Cash Flows

The following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024:

(in millions)

Operating Activities. Net cash provided by operating activities for the six months ended June 30, 2025 was $60.5 million, compared to $118.8 million of net cash provided by operating activities for the six months ended June 30, 2024.

• The changes in current assets and liabilities resulted in a net use of cash of $156.3 million for the six months ended June 30, 2025, compared to a net use of cash of $44.7 million for the six months ended June 30, 2024. The current year activity was primarily driven by increases in receivables and inventory and a decrease in advanced billings, partially offset by higher accounts payable.

Investing Activities. Net cash required by investing activities for the six months ended June 30, 2025 was $33.4 million, compared to $241.2 million for the six months ended June 30, 2024.

• Capital expenditures for the six months ended June 30, 2025 were $61.8 million, compared to $102.0 million for the same period last year. Full-year capital expenditures are expected to be approximately $145 to $155 million in 2025.
• Proceeds from the sale of property, plant, and equipment and other assets totaled $10.8 million for the six months ended June 30, 2025, compared to $7.4 million for the same period in 2024.
• For the six months ended June 30, 2025, cash received from acquisitions was $17.6 million due to escrow funds that were returned to Arcosa related to contractual purchase price adjustments in connection with the Stavola acquisition. Cash paid for acquisitions, net of cash acquired, was $179.9 million during the same period in 2024.
• There were no proceeds from the sale of businesses during the six months ended June 30, 2025, compared to $33.3 million for the same period in 2024.

Financing Activities. Net cash required by financing activities during the six months ended June 30, 2025 was $24.7 million, compared to net cash provided by financing activities of $121.3 million for the same period in 2024.

• Current year activity was driven by scheduled debt payments, dividends paid during the period, shares purchased to satisfy employee taxes on vested stock, and debt issuance costs.

Other Investing and Financing Activities

Revolving Credit Facility, Term Loan, and Senior Notes

In August 2023, we entered into the Credit Agreement to increase our revolving credit facility from $500.0 million to $600.0 million, extend the maturity date of our revolving credit facility from January 2, 2025 to August 23, 2028, and refinance and repay in full the remaining balance of the term loan then outstanding under our prior credit facility.

On August 15, 2024, we entered into Amendment No.1 to the Credit Agreement to, among other things, (i) increase our revolving credit facility from $600.0 million to $700.0 million, (ii) collateralize the amended revolving credit facility with substantially all of our and our subsidiary guarantors' personal property (with certain exceptions), (iii) make the applicable margin for revolving borrowings, letters of credit and the commitment fee rate be based on our consolidated net leverage ratio (permitting up to $150.0 million of unrestricted cash to be netted from the calculation thereof), (iv) modify the margin for SOFR-based revolving borrowings and letters of credit to range from 1.25% to 2.50% per annum, (v) modify the margin for base rate revolving borrowings to range from 0.25% to 1.50%, (vi) modify the commitment fee that accrues on the unused portion of the revolving credit facility to range from 0.20% to 0.45%, and (vii) modify the maximum permitted leverage ratio to include a net debt concept (permitting up to $150.0 million of unrestricted cash to be netted from the calculation thereof), and to provide that such ratio shall be no greater than 5.00 to 1.00 during the fourth quarter of 2024 and the next two fiscal quarters, 4.50 to 1.00 for the next following two fiscal quarters, and 4.00 to 1.00 for each fiscal quarter thereafter (however, this maximum permitted leverage ratio may be increased to 4.50 to 1.00 for up to four fiscal quarters if a material acquisition is entered into). These amendments did not become effective until the closing of the Stavola acquisition on October 1, 2024. The amended revolving credit facility's maturity date of August 23, 2028 remains unchanged.

As of June 30, 2025, we had no outstanding loans borrowed under our revolving credit facility, which left $700.0 million available for borrowing.

The interest rates for revolving loans under the Credit Agreement are variable based on the daily simple or term SOFR, plus a 10-basis point credit spread adjustment, or an alternate base rate, in each case plus a margin for borrowing. A commitment fee accrues on the average daily unused portion of the revolving credit facility. The margin for revolving borrowings and commitment fee rate are determined based on the Company’s consolidated total net leverage ratio (as measured by a consolidated funded indebtedness, less the aggregate amount of unrestricted cash up to a maximum amount not to exceed $150.0 million, to consolidated EBITDA ratio). As of June 30, 2025, the margin for borrowing based on SOFR was set at 2.00% and the commitment fee rate was set at 0.35%.

The revolving credit facility portion of the Credit Agreement requires the maintenance of certain ratios related to leverage and interest coverage. As of June 30, 2025, we were in compliance with all such financial covenants. Borrowings under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Company. On October 1, 2024, we collateralized our obligations under the Credit Agreement with substantially all of our and our subsidiary guarantors' personal property (with certain exceptions).

On June 17, 2025, we entered into Amendment No. 2 to the Credit Agreement, which established the 2025 Refinancing Term Loan in an aggregate principal amount of $698.3 million. We used the 2025 Refinancing Term Loan's net proceeds, together with cash on hand, to satisfy the outstanding balance under the 2024 Term Loan. The 2025 Refinancing Term Loan requires, among other things, (i) mandatory prepayments from excess cash flow on an annual basis, commencing with the fiscal year ending December 31, 2025, (ii) mandatory prepayments with proceeds of certain asset sales and debt issuances, and (iii) quarterly principal amortization payments in an amount equal to 0.25% of the 2024 Term Loan. The 2025 Refinancing Term Loan has a maturity date of October 1, 2031. The interest rate for the 2025 Refinancing Term Loan is based on SOFR plus 2.00% per year, or an alternate base rate, plus 1.00% per year. If the 2025 Refinancing Term Loan is prepaid in connection with a repricing transaction or we effect any amendment to the Credit Agreement resulting in a repricing transaction, in either case within six months after the initial funding of the 2025 Refinancing Term Loan, there is a 1.0% premium on such prepaid amount or on the amount outstanding at the time such repricing transaction amendment becomes effective. Otherwise, the 2025 Refinancing Term Loan is prepayable at any time without premium or penalty (other than customary SOFR-related breakage costs). The 2025 Refinancing Term Loan is guaranteed by the same subsidiaries of the Company that guarantee our revolving credit facility, and the 2025 Refinancing Term Loan is secured on a pari passu basis with our revolving credit facility.

On August 26, 2024, the Company issued $600.0 million aggregate principal amount of 6.875% 2024 Notes that mature in August 2032. Interest on the 2024 Notes is payable semiannually in February and August. In April 2021, the Company issued $400.0 million aggregate principal amount of 4.375% senior unsecured notes (the "2021 Notes", and together with the 2024 Notes, the "Senior Notes") that mature in April 2029. Interest on the 2021 Notes is payable semiannually in April and October. The Senior Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by each of the Company’s domestic subsidiaries that is a guarantor under our Credit Agreement. The terms of each indenture governing the Senior Notes, among other things, limit the ability of the Company and each of its subsidiaries to create liens on assets, enter into sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries. The terms of each indenture also limit the ability of the Company’s non-guarantor subsidiaries to incur certain types of debt.

We believe, based on our current business plans, that our existing cash, available liquidity, and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for the foreseeable future.

Dividends and Repurchase Program

In May 2025, the Company declared a quarterly cash dividend of $0.05 per share that was paid on July 31, 2025.

In December 2024, the Board authorized a $50.0 million share repurchase program effective January 1, 2025 through December 31, 2026 to replace an expiring program of the same amount. For the three and six months ended June 30, 2025, the Company did not repurchase any shares, leaving the full amount of the $50.0 million authorization available as of June 30, 2025. See Note 1 Overview and Summary of Significant Accounting Policies to the Consolidated Financial Statements.

Recent Accounting Pronouncements

See Note 1 Overview and Summary of Significant Accounting Policies to the Consolidated Financial Statements for information about recent accounting pronouncements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q (or statements otherwise made by the Company or on the Company's behalf from time to time in other reports, filings with the SEC, news releases, conferences, internet postings, or otherwise) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking statements and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performances, estimates, projections, goals, and forecasts. Arcosa uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “plans,” and similar expressions to identify these forward-looking statements. Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements include, among others:

• the impact of pandemics, epidemics, or other public health emergencies on our sales, operations, supply chain, employees, and financial condition;
• market conditions and customer demand for our business products and services;
• the cyclical and seasonal nature of the industries in which we compete;
• variations in weather in areas where our construction products are sold, used, or installed;
• naturally occurring events and other events and disasters causing disruption to our manufacturing, product deliveries, and production capacity, thereby giving rise to an increase in expenses, loss of revenue, and property losses;
• competition and other competitive factors;
• our ability to identify, consummate, or integrate acquisitions of new businesses or products, or divest any business;
• the timing of introduction of new products;
• the timing and delivery of customer orders or a breach of customer contracts;
• the credit worthiness of customers and their access to capital;
• product price changes;
• changes in mix of products sold;
• the costs incurred to align manufacturing capacity with demand and the extent of its utilization;
• the operating leverage and efficiencies that can be achieved by our manufacturing businesses;
• availability and costs of steel, component parts, supplies, and other raw materials;
• changing technologies;
• surcharges and other fees added to fixed pricing agreements for steel, component parts, supplies and other raw materials;
• increased costs due to inflation or tariffs;
• interest rates and capital costs;
• counter-party risks for financial instruments;
• our indebtedness or leverage levels;
• long-term funding of our operations;
• taxes;
• costs and availability of sufficient insurance coverage;
• material nonpayment or nonperformance by any of our key customers;
• the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico;
• public infrastructure expenditures;
• changes in import and export quotas and regulations;
• business conditions in emerging economies;
• costs and results of litigation;
• changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;
• legal, regulatory, and environmental issues, including compliance of our products with mandated specifications, standards, or testing criteria and obligations to remove and replace our products following installation or to recall our products and install different products manufactured by us or our competitors;
• actions by the executive and legislative branches of the U.S. government relative to federal government budgeting, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies, including tariffs, and border closures;
• our ability to sufficiently protect our intellectual property rights;
• our ability to mitigate against cybersecurity incidents, including ransomware, malware, phishing emails, and other electronic security threats;
• if the Company's sustainability efforts are not favorably received by stockholders;
• if the Company does not realize some or all of the benefits expected from certain provisions of the IRA, including due to the modification or termination of the AMP tax credits for wind towers and due to changes in demand for wind towers resulting from modifications in tax incentives; and
• the delivery or satisfaction of any backlog or firm orders.

Any forward-looking statement speaks only as of the date on which such statement is made. Arcosa undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. For a discussion of risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see Item 1A, “Risk Factors” in our 2024 Annual Report on Form 10-K and future Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

There has been no material change in our market risks since December 31, 2024 as set forth in our 2024 Annual Report on Form 10-K. See Note 9 Other, Net to the Consolidated Financial Statements for the impact of foreign exchange rate fluctuations for the three and six months ended June 30, 2025.

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that it is able to collect and record the information it is required to disclose in the reports it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) with the Securities and Exchange Commission (“SEC”), to process, summarize, and disclose this information within the time periods specified in the rules of the SEC, and that such information is accumulated and communicated to management, including our Chief Executive and Chief Financial Officers, in a timely fashion. The Company’s Chief Executive and Chief Financial Officers are responsible for establishing and maintaining these disclosure controls and procedures and evaluating their effectiveness (as defined in Rule 13(a)-15(e) under the Exchange Act). Based on their evaluation of the Company’s disclosure controls and procedures that took place as of the end of the period covered by this report, the Chief Executive and Chief Financial Officers believe that these disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there have been no changes in the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

There have been no material changes in the Company's risk factors from those set forth in our 2024 Annual Report on Form 10-K.