Arcosa, Inc.

Good morning, ladies and gentlemen, and welcome to the Arcoza Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Brittany, 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, Erin Drabeck, Vice President of Investor Relations for Arcoza. Ms. Drabeck, you may begin.

Good morning, everyone, and thank you for joining ARCOSA's fourth quarter and full year 2024 earnings call. With me today are Antonio Carrillo, President and CEO, and Gail Peck, CFO. The question and answer session will follow their prepared remarks. A copy of the press release issued yesterday and the slide presentation for this morning's call are posted on our investor relations website, 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 GAAP. Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation. In addition, 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 the press release we filed yesterday and our Form 10-K, expected to be filed later today. I would now like to turn the call over to Antonio.

Thank you, Erin. Good morning, everyone, and thank you for joining us today for a discussion on our fourth quarter and full year 2024 results and our outlook for 2025. I am pleased with the strong financial results we delivered in both the fourth quarter and full year. Let me start with a few key highlights on page four. First, in a word, 2024 was about transformation. It was a pivotal year for our cause as we successfully executed on our strategy of optimizing our portfolio by expanding our growth businesses while reducing our overall complexity and cyclicality. Next, we delivered double-digit organic growth, which underscores the strength of our infrastructure-led portfolio. Third, significant margin expansion was driven by a balanced contribution from higher margin businesses we acquired and organic improvements. helped in part by the divestiture of non-core assets and other initiatives we have undertaken over the past few years. And finally, we generated robust free cash flow, which demonstrates our commitment to reducing leverage in 2025 and sets up our cause for continued growth in 2026 and beyond. Please turn to slide seven. There were a number of important strategic initiatives that drove our performance. The acquisition of Stavola was game-changing for our construction materials businesses. expanding our aggregate footprint into the nation's largest MSA, with increased exposure to less cyclical infrastructure-led markets. The acquisition of Ameron earlier in the year established our foothold in the attractive lighting poles and traffic signals markets, complementing our existing product offerings within engineered structures. Both Stavola and Ameron are contributing positively to margin expansion. We also progressed on several important organic initiatives, which include in utility structures, the production ramp up in our new concrete pole plant in Florida. Also, we produced our first towers from our new wind tower facility in New Mexico, which we expect will have a positive impact on margins in 2025. In our construction materials business, we fully ramped up our greenfield aggregates operation in Texas and our specialty plaster expansion in Oklahoma. We also started several recycled aggregates facilities adjacent to our current operational footprint, These organic projects, together with Stavola and Ameron, will support our growth in 2025 and beyond. On the divestiture side, during 2024, we continued to simplify our portfolio by completing the sale of the steel components business. Also during the year, we focused on pruning underperforming assets resulting in the sale of a subscale asphalt operation and the closure of some small aggregate locations which were not in our strategic geographies. Today, we're a larger, more resilient, less cyclical company with construction products accounting for about 62% of our adjusted EBITDA, nearly double the 130 contributed in 2018. Please turn to slide nine. Consistently executing against our strategy of combining solid organic investments with disciplined acquisitions and portfolio optimization, combined to deliver record full-year revenues, adjusted EBITDA, and margin in 2024. Equally important, full-year 2024 EBITDA growth, normalizing for the steel components divestiture and the large land sale gain in 2023, was split evenly between organic and inorganic drivers, underscoring the strength of our core business. In the fourth quarter, we saw significant adjusted EBITDA growth, margin expanded by 480 points, excluding the impact of steel components. Stavola performed well during our first quarter of ownership, adding a creative EBITDA contribution. We finished the year strong with fourth quarter free cash flow of nearly $200 million, enabling the full repayment of our revolver, resulting in net leverage of 2.9 times. As a reminder, we intend to return to our long-term leverage target of 2 to 2.5 times within 18 months of the closing of Stavola. Thus far, we're making excellent progress and will continue to prioritize debt repayment and finishing The organic projects we have underway to prepare the balance sheet for continued growth. Overall, I'm extremely proud of our accomplishments in 2024. I will now turn the call over to Gail to discuss our fourth quarter segment results in more detail.