Arcosa, Inc.

Good morning, ladies and gentlemen, and welcome to the ARCOSA Incorporated First Quarter 2020 Earnings Conference Call. My name is Nikki, and I will be your conference call coordinator today. As a reminder, today's call is being recorded. Now, I would like to turn the call over to your host, Gail Peck. Ms.

Peck, you may begin. Good morning, everyone. Thank you for joining our First Quarter 2020 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 today. 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. 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 under the News and Events tab. 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 for more information on these risks and uncertainties, including our Form 10-K, the earnings press release we filed yesterday, and our Form 10-Q for the first quarter expected to be filed later today. 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 discuss our customers' first quarter results on Business Outlook. I will provide you with the current conditions within our markets, the highlights of our first quarter performance, and later discuss our business line expectations, while Scott will update you on the first quarter financials. Please move to slide four. There are several key messages I would like you to take away from today's call. First, our COSAS business continues to operate well within the COVID-19 environment. We have been designated an essential business and our facilities are operational. Second, we have implemented business continuity plans and have adopted protocols to protect the health and safety of our employees and the community in which we operate. This is our priority, and I would like to recognize all of our teams for how quickly and effectively this protocol was put in place. Third, our COSIS strong financial quarter performance shows the earnings power we have, and our strong balance sheet provides us with flexibility in this uncertain time and the capacity for significant growth opportunities for the future. And fourth, while we expect lower demand for some of our product lines, in some others we continue to see strong fundamentals and have substantial backlogs that provide good visibility. On page five, you can find the agenda for today's call. Let's start by discussing our priorities during the COVID-19 health crisis on slide seven. First and foremost, our top priority is the health and safety of our 6,300 employees and the community in which we operate. To that end, we immediately put in place safeguards around facilities consistent with CDC guidelines. We also implemented work-from-home protocols for our office staff and are making plans for how we return to our offices once it's authorized and safe to do so. As an essential supplier to the nation's infrastructure sectors, we have continued operating the plants to meet our customers' needs in every business. And as you can see from our first quarter results, we have not missed a beat. Our strong liquidity position and financial flexibility are now even greater competitive advantages than they were only just a few months ago. I know from experience having strong balance sheets is key to successfully navigating through an economic downturn. Scott will review this in more detail, but from a high level, we have about $200 million of cash plus $274 million in revolver availability. Net debt is roughly half of our annual EBITDA, and we expect strong free cash flow. Additionally, we have taken actions to reduce operating and corporate costs and have postponed non-initial capital expenditures to ensure we are prepared for a potential extended slowdown. Our COSA's strong balance sheet provides us with the resources to make strategic acquisitions on a disciplined basis at attractive prices should they become available. Now let's turn to Slide 9 for a look at the company's wide results. For the first quarter, the company performed extremely well, with revenues of $488 million, up 19% year-over-year. All three business lines contributed to this growth. Adjusted EBITDA of $76 million was up 29%, reflecting the considerable operating leverage we continue to achieve. Adjusting for a bad debt recovery of $3 million last year within the energy equipment, All business lines contributed to the profit growth, with construction products being the largest contributor to this quarter's revenue and EBITDA growth. This segment benefited from the recent acquisition of Cherry, which is performing ahead of plan. Importantly, both our utility structures and barge businesses saw healthy order intake in the first quarter. Scott will give you more details on the individual business lines, and then I will return to provide you additional market color and discuss our outlook.