Arcosa, Inc.

Good morning, ladies and gentlemen, and welcome to the ARCOSA, Inc. Fourth Quarter and Full Year 2019 Earnings Conference Call. My name is David, and I'll be your conference call coordinator today. As a reminder, today's call is being recorded. Now, I'd like to turn the call over to your host, Gail Peck, SVP, Finance and Treasurer for ARCOSA. Ms. Peck, you may begin.

Good morning, everyone. Thank you for joining our earnings call. With me today are Antonio Carrillo, President and CEO, and Scott Beasley, CFO. A question and answer session will follow their prepared remarks. A copy of yesterday's press release and the slide presentation for this morning's call are posted at our Investor Relations website, www.ir.arcosa.com. You can access the presentation by going to the Events and Presentation tab of the website. A replay of today's call will be available for the next two weeks. Instructions for accessing the replay number are included in the press release. A replay of the webcast will be available for one year on our website. Today's comments and presentation slides contain financial measures that have not been prepared in accordance with generally accepted accounting principles. Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation. Let me also remind you that today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company's SEC filings, including its Form 10-K, for more information on these risks and uncertainties. I would now like to turn the call over to Antonio.

Thank you, Gail. Good morning, and thank you for joining today's call to review ARCOSA's fourth quarter and full year results, and also to discuss our 2020 outlook. Starting on slide six, I'll cover the key strategic highlights before letting Scott give you more details on the quarter. 2019 was a year of solid financial performance and strong pre-cash flow for ARCOSA in its first full year as an independent company, and we expect 2020 to be another year of growth. We also completed two important strategic initiatives in the past year, with the acquisition of Cherry Companies, a leading natural and recycled aggregates company in Houston, as well as the completion of the first ESG materiality assessment for our COSA. Turning to slide seven, the fourth quarter was a solid conclusion to our first full year. Adjusted EBITDA was 17% higher than in 2018, and revenue was up 19%. For the full year, adjusted EBITDA increased 29%, which was driven by organic revenue growth, operating margin improvements, and the ACG materials acquisition we completed at the end of 2018. We also made progress on all the stage one initiatives, which translated into the impressive year-over-year EBITDA growth. Moving to slide eight, our 2019 accomplishments have set the stage for another year of projected growth in 2020. We expect organic growth and the recently completed cherry acquisition to lead to a 19% increase in adjusted EBITDA based on the midpoint of our guidance range. As we indicated in the press release, we anticipate 2020 EBITDA to be slightly second-half weighted due to the cadence of our barge and wind tower production schedules. We are optimistic about the strength of most of our markets, and the backlog we have provides good production visibility. Infrastructure spending remains healthy and volumes have been strong in the construction products business when we have had dry weather. The barge market continues to recover and we have had two healthy quarters of dry barge orders in a row to complement the recovery that began in late 2018 on the liquid side. Finally, within the energy equipment, underlying market fundamentals for utility structures remain robust, driven by grid hardening and reliability initiatives. and the demand for storage tanks in the U.S. and Mexico has remained steady. The backlog for wind towers covers most of 2020, although pricing is lower than 2019. Now that the PTC has been extended, third-party forecasts for near-term wind installations have increased. We're optimistic that the new orders will follow. The primary market headwinds for 2020 is the new rail car market, which our components business serves. The industry backlog for railcars has declined for four consecutive quarters. On the other hand, we have been working hard since the spinoff to develop new markets and customers to help us mitigate the impact of the cycle. On the positive side, the continued recovery in our barge business is expected to more than offset the softness in components, and we expect transportation EBITDA to grow in 2020. On slide nine, the acquisition of Cherry Companies was another important strategic milestone. As we discussed in our December call announcing the transaction, CHERRY is a leading natural and recycled aggregates company located in Houston and fills a key geographic gap in our Texas network. We believe recycled aggregates will continue to be a growing market for economic and environmental benefits, and we look forward to working with the CHERRY team to replicate CHERRY's natural and recycled aggregates platform in new geographies. Finally, on slide 10, We continue making progress on our ESG initiatives. Our materiality assessments identified 11 material topics across our businesses, and we plan to publish our initial sustainability report for 2020 in line with SASB standards. We're incorporating ESG into our values and culture. We are early in our journey, but employees and other key stakeholders have been enthusiastic about the progress we've made to date. I will now turn over the call to Scott, who will provide you additional details from the quarter. Scott?