Cover and DEI
Cover and DEI - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 15, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-38494 | |
Entity Registrant Name | Arcosa, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-5339416 | |
Entity Address, Address Line One | 500 N. Akard Street, Suite 400 | |
Entity Address, City or Town | Dallas, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75201 | |
City Area Code | 972 | |
Local Phone Number | 942-6500 | |
Title of 12(b) Security | Common Stock ($0.01 par value) | |
Trading Symbol | ACA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,339,918 | |
Entity Central Index Key | 0001739445 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Oper
Consolidated Statements of Operating Income (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 498.5 | $ 434.1 | $ 986.7 | $ 845 |
Operating costs: | ||||
Cost of revenues | 396.8 | 345.7 | 788.1 | 678.5 |
Selling, general, and administrative expenses | 53.9 | 46.1 | 105.7 | 86.9 |
Costs and Expenses, Total | 450.7 | 391.8 | 893.8 | 765.4 |
Total operating profit | 47.8 | 42.3 | 92.9 | 79.6 |
Interest expense | 2.8 | 1.6 | 6.1 | 3.5 |
Other, net (income) expense | (0.1) | (0.1) | (0.3) | (0.3) |
Income before income taxes | 45.1 | 40.8 | 87.1 | 76.4 |
Provision for income taxes | 11.8 | 9 | 22.2 | 16.9 |
Net income | $ 33.3 | $ 31.8 | $ 64.9 | $ 59.5 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.69 | $ 0.66 | $ 1.34 | $ 1.23 |
Diluted (in dollars per share) | $ 0.68 | $ 0.65 | $ 1.33 | $ 1.21 |
Weighted average number of shares outstanding | ||||
Basic (in shares) | 47.9 | 47.8 | 47.9 | 47.9 |
Diluted (in shares) | 48.4 | 48.3 | 48.4 | 48.4 |
Dividends declared per common share | $ 0.05 | $ 0.05 | $ 0.10 | $ 0.10 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 33.3 | $ 31.8 | $ 64.9 | $ 59.5 |
Derivative financial instruments: | ||||
Unrealized losses arising during the period, net of tax expense (benefit) of ($0.2), ($0.5), ($1.1), and ($0.7) | (0.5) | (1.8) | (3.9) | (2.8) |
Reclassification adjustments for losses included in net income, net of tax expense (benefit) of ($0.1), $0.0, ($0.2),and $0.0 | 0.4 | 0 | 0.6 | 0.1 |
Currency translation adjustment: | ||||
Unrealized gains (losses) arising during the period, net of tax expense (benefit) of $0.0, $0.2, ($0.2), and $0.0 | 0.4 | 0.1 | (0.7) | 0.4 |
Other comprehensive income (loss) | 0.3 | (1.7) | (4) | (2.3) |
Comprehensive income | $ 33.6 | $ 30.1 | $ 60.9 | $ 57.2 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized losses arising during the period, tax expense (benefit) | $ (0.2) | $ (0.5) | $ (1.1) | $ (0.7) |
Reclassification adjustments for losses included in net income, tax expense (benefit) | (0.1) | 0 | (0.2) | 0 |
Unrealized gains (losses) arising during the period, tax expense (benefit) | $ 0 | $ 0.2 | $ (0.2) | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2020 | [1] | Dec. 31, 2019 |
Current assets: | |||
Cash and cash equivalents | $ 148.4 | $ 240.4 | |
Receivables, net of allowance | 217.7 | 200 | |
Inventories: | |||
Raw materials and supplies | 152.5 | 134.8 | |
Work in process | 42.6 | 41.7 | |
Finished goods | 118.9 | 106.8 | |
Total inventory | 314 | 283.3 | |
Other | 25.8 | 33.5 | |
Total current assets | 705.9 | 757.2 | |
Property, plant, and equipment, net | 892.7 | 816.2 | |
Goodwill | 758 | 621.9 | |
Intangibles, net | 146 | 51.7 | |
Deferred income taxes | 15.4 | 14.3 | |
Other assets | 42.2 | 41.2 | |
Total assets | 2,560.2 | 2,302.5 | |
Current liabilities: | |||
Accounts payable | 108.3 | 90 | |
Accrued liabilities | 118.7 | 119.4 | |
Advance billings | 54.4 | 70.9 | |
Current portion of long-term debt | 4.5 | 3.7 | |
Total current liabilities | 285.9 | 284 | |
Debt | 252.1 | 103.6 | |
Deferred income taxes | 99.9 | 66.4 | |
Other liabilities | 73.2 | 58.1 | |
Total liabilities | 711.1 | 512.1 | |
Stockholders' equity: | |||
Common stock | 0.5 | 0.5 | |
Capital in excess of par value | 1,689.4 | 1,686.7 | |
Retained earnings | 182.9 | 122.9 | |
Accumulated other comprehensive loss | (23.7) | (19.7) | |
Treasury stock | 0 | 0 | |
Total stockholders' equity | 1,849.1 | 1,790.4 | |
Total liabilities and stockholders' equity | $ 2,560.2 | $ 2,302.5 | |
[1] | Unaudited |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | ||
Operating activities: | |||
Net income | $ 64.9 | $ 59.5 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion, and amortization | 54.7 | 41.5 | |
Stock-based compensation expense | 8.8 | 7.1 | |
Provision for deferred income taxes | 2.4 | 9.3 | |
Gains on disposition of property and other assets | (1.8) | (1.9) | |
(Increase) decrease in other assets | (2.1) | 0.2 | |
Increase (decrease) in other liabilities | (1.8) | 2.3 | |
Other | 2.1 | (2.8) | |
Changes in current assets and liabilities: | |||
(Increase) decrease in receivables | 12.3 | 65.3 | |
(Increase) decrease in inventories | (14.7) | (32.2) | |
(Increase) decrease in other current assets | 11.8 | 4.3 | |
Increase (decrease) in accounts payable | 9.1 | (13.5) | |
Increase (decrease) in advance billings | (26.9) | 0.9 | |
Increase (decrease) in accrued liabilities | 1.5 | 1.2 | |
Net cash provided by operating activities | 120.3 | 141.2 | |
Investing activities: | |||
Proceeds from disposition of property and other assets | 7 | 2.2 | |
Capital expenditures | (43.6) | (38.9) | |
Acquisitions, net of cash acquired | (313.9) | (22.8) | |
Net cash required by investing activities | (350.5) | (59.5) | |
Financing activities: | |||
Payments to retire debt | (100.7) | (80.7) | |
Proceeds from issuance of debt | 250.3 | 0 | |
Shares repurchased | (2) | (8) | |
Dividends paid to common shareholders | (4.9) | (5) | |
Purchase of shares to satisfy employee tax on vested stock | (3.3) | (4.1) | |
Proceeds from (Payments for) Other Financing Activities | (1.2) | 0 | |
Net cash provided by (required by) financing activities | 138.2 | (97.8) | |
Net increase (decrease) in cash and cash equivalents | (92) | (16.1) | |
Cash and cash equivalents at beginning of period | 240.4 | 99.4 | |
Cash and cash equivalents at end of period | $ 148.4 | [1] | $ 83.3 |
[1] | Unaudited |
Consolidated Statement of Stock
Consolidated Statement of Stockholder's Equity (unaudited) - USD ($) $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | |
Beginning balance at Dec. 31, 2018 | $ 1,684.5 | $ 0.5 | $ 1,685.7 | $ 19.5 | $ (17.7) | $ (3.5) | |
Beginning balance, shares at Dec. 31, 2018 | 48,800,000 | 100,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 59.5 | 59.5 | |||||
Other comprehensive income (loss) | (2.3) | (2.3) | |||||
Dividends paid to common shareholders | (5) | (5) | |||||
Restricted shares, net - shares | 200,000 | 200,000 | |||||
Restricted shares, net - value | 2.9 | 7.8 | $ (4.9) | ||||
Shares repurchased, shares | 300,000 | ||||||
Shares repurchased | (8) | $ (8) | |||||
Stockholders' equity, other | 2.7 | 2.7 | |||||
Ending balance at Jun. 30, 2019 | 1,734.3 | $ 0.5 | 1,679.8 | 74 | (20) | $ 0 | |
Ending balance, shares at Jun. 30, 2019 | 48,400,000 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Treasury Stock, Shares, Retired | (600,000) | (600,000) | |||||
Treasury Stock, Retired, Cost Method, Amount | (16.4) | $ (16.4) | |||||
Beginning balance at Mar. 31, 2019 | 1,705.2 | $ 0.5 | 1,690.2 | 44.7 | (18.3) | $ (11.9) | |
Beginning balance, shares at Mar. 31, 2019 | 48,800,000 | 400,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 31.8 | 31.8 | |||||
Other comprehensive income (loss) | (1.7) | (1.7) | |||||
Dividends paid to common shareholders | (2.5) | (2.5) | |||||
Restricted shares, net - shares | 200,000 | (200,000) | |||||
Restricted shares, net - value | (0.3) | 4.2 | $ (4.5) | ||||
Stockholders' equity, other | 1.8 | 1.8 | |||||
Ending balance at Jun. 30, 2019 | 1,734.3 | $ 0.5 | 1,679.8 | 74 | (20) | $ 0 | |
Ending balance, shares at Jun. 30, 2019 | 48,400,000 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Treasury Stock, Shares, Retired | (600,000) | (600,000) | |||||
Treasury Stock, Retired, Cost Method, Amount | (16.4) | $ (16.4) | |||||
Beginning balance at Dec. 31, 2019 | 1,790.4 | $ 0.5 | 1,686.7 | 122.9 | (19.7) | $ 0 | |
Beginning balance, shares at Dec. 31, 2019 | 48,300,000 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 64.9 | 64.9 | |||||
Other comprehensive income (loss) | (4) | (4) | |||||
Dividends paid to common shareholders | (4.9) | (4.9) | |||||
Restricted shares, net - shares | 200,000 | 100,000 | |||||
Restricted shares, net - value | $ 5.5 | 10.5 | $ (5) | ||||
Shares repurchased, shares | 56,836 | 100,000 | |||||
Shares repurchased | $ (2) | $ (2) | |||||
Stockholders' equity, other | (0.8) | (0.8) | |||||
Ending balance at Jun. 30, 2020 | 1,849.1 | [1] | $ 0.5 | 1,689.4 | 182.9 | (23.7) | $ 0 |
Ending balance, shares at Jun. 30, 2020 | 48,300,000 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Treasury Stock, Shares, Retired | (200,000) | (200,000) | |||||
Treasury Stock, Retired, Cost Method, Amount | (7) | $ (7) | |||||
Beginning balance at Mar. 31, 2020 | 1,816 | $ 0.5 | 1,690.5 | 152 | (24) | $ (3) | |
Beginning balance, shares at Mar. 31, 2020 | 48,300,000 | 100,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 33.3 | 33.3 | |||||
Other comprehensive income (loss) | 0.3 | 0.3 | |||||
Dividends paid to common shareholders | (2.4) | (2.4) | |||||
Restricted shares, net - shares | 200,000 | (100,000) | |||||
Restricted shares, net - value | $ 1.8 | 5.8 | $ (4) | ||||
Shares repurchased, shares | 0 | ||||||
Shares repurchased | $ 0 | ||||||
Stockholders' equity, other | 0.1 | 0.1 | |||||
Ending balance at Jun. 30, 2020 | $ 1,849.1 | [1] | $ 0.5 | 1,689.4 | $ 182.9 | $ (23.7) | $ 0 |
Ending balance, shares at Jun. 30, 2020 | 48,300,000 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Treasury Stock, Shares, Retired | (200,000) | (200,000) | |||||
Treasury Stock, Retired, Cost Method, Amount | $ (7) | $ (7) | |||||
[1] | Unaudited |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholder's Equity (parenthetical) | Jun. 30, 2020$ / shares |
Statement of Stockholders' Equity [Abstract] | |
Par value of common stock | $ 0.01 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Basis of Presentation Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” the “Company,” “we,” or “our”), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading brands serving construction, energy, and transportation markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018 in connection with the separation of Arcosa from Trinity Industries, Inc. (“Trinity” or “Former Parent”) on November 1, 2018 as an independent, publicly-traded company, listed on the New York Stock Exchange (the “Separation”). The accompanying Consolidated Financial Statements are unaudited and have been prepared from the books and records of Arcosa, Inc. and its consolidated subsidiaries. All normal and recurring adjustments necessary for a fair presentation of the financial position of the Company and the results of operations, comprehensive income/loss, and cash flows have been made in conformity with accounting principles generally accepted in the U.S. (“GAAP”). All significant intercompany accounts and transactions have been eliminated. Because of seasonal and other factors, including the unknown potential duration, spread, severity, and impact of the COVID-19 pandemic, Arcosa's business, financial condition, and results of operations for the three and six months ended June 30, 2020 may not be indicative of Arcosa's expected business, financial condition, and results of operations for the year ending December 31, 2020. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited consolidated and combined financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2019. Stockholders' Equity In December 2018, the Company’s Board of Directors (the “Board”) authorized a $50 million share repurchase program effective December 5, 2018 through December 31, 2020. The Company did not repurchase any shares during the three months ended June 30, 2020. For the six months ended June 30, 2020, the Company repurchased 56,836 shares at a cost of $2.0 million. As of June 30, 2020, the Company had a remaining authorization of $34.0 million under the program. Revenue Recognition Revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations. The transaction price does not include any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The following is a description of principal activities from which the Company generates its revenue, separated by reportable segments. Payments for our products and services are generally due within normal commercial terms. For a further discussion regarding the Company’s reportable segments, see Note 4 Segment Information. Construction Products Group The Construction Products Group recognizes substantially all revenue when the customer has accepted the product and legal title of the product has passed to the customer. Energy Equipment Group Within the Energy Equipment Group, revenue is recognized for our wind tower, certain utility structure, and certain storage tank product lines over time as the products are manufactured using an input approach based on the costs incurred relative to the total estimated costs of production. We recognize revenue over time for these products as they are highly customized to the needs of an individual customer resulting in no alternative use to the Company if not purchased by the customer after the contract is executed, and we have the right to bill the customer for our work performed to date plus at least a reasonable profit margin for work performed. As of June 30, 2020, we had a contract asset of $23.9 million related to these contracts, compared to $50.8 million at December 31, 2019, which is included in receivables, net of allowance, within the Consolidated Balance Sheets. For all other products, revenue is recognized when the customer has accepted the product and legal title of the product has passed to the customer. Transportation Products Group The Transportation Products Group recognizes revenue when the customer has accepted the product and legal title of the product has passed to the customer. Unsatisfied Performance Obligations The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of June 30, 2020 and the percentage of the outstanding performance obligations as of June 30, 2020 expected to be delivered during the remainder of 2020: Unsatisfied performance obligations at June 30, 2020 Total Percent expected to be delivered in 2020 (in millions) Energy Equipment Group: Wind towers and utility structures $ 352.2 74 % Other $ 15.5 100 % Transportation Products Group: Inland barges $ 258.7 73 % Substantially all unsatisfied performance obligations beyond 2020 are expected to be delivered during 2021. Income Taxes The liability method is used to account for income taxes. Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. The Company regularly evaluates the likelihood of realization of tax benefits derived from positions it has taken in various federal and state filings after consideration of all relevant facts, circumstances, and available information. For those tax positions that are deemed more likely than not to be sustained, the Company recognizes the benefit it believes is cumulatively greater than 50% likely to be realized. To the extent the Company were to prevail in matters for which accruals have been established or be required to pay amounts in excess of recorded reserves, the effective tax rate in a given financial statement period could be materially impacted. Financial Instruments The Company considers all highly liquid debt instruments to be cash and cash equivalents if purchased with a maturity of three months or less. Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash investments and receivables. The Company places its cash investments in bank deposits and highly-rated money market funds, and its investment policy limits the amount of credit exposure to any one commercial issuer. We seek to limit concentrations of credit risk with respect to receivables with control procedures that monitor the credit worthiness of customers, together with the large number of customers in the Company's customer base and their dispersion across different industries and geographic areas. As receivables are generally unsecured, the Company maintains an allowance for doubtful accounts based upon the expected credit losses. Receivable balances determined to be uncollectible are charged against the allowance. To accelerate the conversion to cash, the Company may sell a portion of its trade receivables to a third party. The Company has no continuing involvement or recourse related to these receivables once they are sold, and the impact of these transactions in the Company's Consolidated Statements of Operations for the three and six months ended June 30, 2020 was not significant. The carrying values of cash, receivables, and accounts payable are considered to be representative of their respective fair values. Derivative Instruments The Company may, from time to time, use derivative instruments to mitigate the impact of changes in interest rates, commodity prices, or changes in foreign currency exchange rates. For derivative instruments designated as hedges, the Company formally documents the relationship between the derivative instrument and the hedged item, as well as the risk management objective and strategy for the use of the derivative instrument. This documentation includes linking the derivative to specific assets or liabilities on the balance sheet, commitments, or forecasted transactions. At the time a derivative instrument is entered into, and at least quarterly thereafter, the Company assesses whether the derivative instrument is effective in offsetting the changes in fair value or cash flows of the hedged item. Any change in the fair value of the hedged instrument is recorded in accumulated other comprehensive loss (“AOCL”) as a separate component of stockholders' equity and reclassified into earnings in the period during which the hedged transaction affects earnings. The Company monitors its derivative positions and the credit ratings of its counterparties and does not anticipate losses due to counterparties' non-performance. Recent Accounting Pronouncements Recently adopted accounting pronouncements Effective as of January 1, 2019, the Company adopted Accounting Standards Update No. 2016-02, “Leases”, (“ASU 2016-02”) which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The Company elected to use the optional transition method that allows the Company to apply the provisions of the standard at the effective date without adjusting the comparative prior periods. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward the historical lease classification. The cumulative effect of adopting the standard on the opening balance of retained earnings was not significant. The primary impact of adopting the standard was the recognition of a right-of-use asset and corresponding lease liability for our operating leases included in other assets and other liabilities, respectively, on the Consolidated Balance Sheet. See Note 8 Leases for further discussion. The Company has implemented processes and a lease accounting system to ensure adequate internal controls were in place to assess our contracts and enable proper accounting and reporting of financial information upon adoption. Effective as of January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses”, (“ASU 2016-13”), which amends the existing accounting guidance for recognizing credit losses on financial assets and certain other instruments not measured at fair value through net income, including financial assets measured at amortized cost, such as trade receivables and contract assets. ASU 2016-13 replaces the existing incurred loss impairment model with an expected credit loss model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. The adoption of this guidance did not have a material effect on the Company’s Consolidated Financial Statements. Recently issued accounting pronouncements not adopted as of June 30, 2020 In December 2019, the FASB issued Accounting Standards Updated No. 2019-12, “Simplifying the Accounting for Income Taxes”, (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. ASU 2019-12 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of adoption on our consolidated financial statements. Reclassifications |
Acquisitions and Divestitures
Acquisitions and Divestitures | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures 2020 Acquisitions On January 6, 2020, we completed the stock acquisition of Cherry Industries, Inc. and affiliated entities (“Cherry”), a leading producer of natural and recycled aggregates in the Houston, Texas market which is included in our Construction Products Group. The purchase price of $296.8 million was funded with a combination of cash on-hand, advances under a new $150.0 million five-year term loan, and future payments to the seller for a net cash paid of $284.1 million during the six months ended June 30, 2020. See Note 7 Debt for additional information on our credit facility. Non-recurring transaction and integration costs incurred related to the Cherry acquisition were approximately $0.7 million and $1.6 million during the three and six months ended June 30, 2020, respectively, and approximately $0.5 million during the year ended December 31, 2019. The acquisition was recorded as a business combination based on preliminary valuations of the assets acquired and liabilities assumed at their acquisition date fair value using level three inputs, defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets. We expect to complete our purchase price allocation as soon as reasonably possible not to exceed one year from the acquisition date. Adjustments to the preliminary purchase price allocation could be material to the purchase price allocation, particularly with respect to our preliminary estimates of mineral reserves, intangibles, and deferred income taxes. The following table represents our preliminary purchase price allocation as of June 30, 2020: June 30, 2020 (in millions) Accounts receivable $ 30.8 Inventories 11.8 Property, plant, and equipment 62.1 Mineral reserves 21.2 Goodwill 125.6 Customer relationships 60.2 Permits 24.9 Other assets 4.2 Accounts payable (7.5) Accrued liabilities (5.4) Deferred taxes (29.3) Other liabilities (1.8) Total net assets acquired $ 296.8 The goodwill acquired, none of which is tax deductible, primarily relates to Cherry's market position and existing workforce. The customer relationship intangibles and permits were assigned weighted average useful lives of 14.9 years and 19.8 years, respectively. Revenues and operating profit included in the Consolidated Statement of Operations from the date of the acquisition were approximately $44.9 million and $8.1 million, respectively, during the three months ended June 30, 2020 and approximately $88.7 million and $13.8 million, respectively, during the six months ended June 30, 2020. The following table represents the unaudited pro-forma consolidated operating results of the Company as if the Cherry acquisition had been completed on January 1, 2019. The unaudited pro-forma information makes certain adjustments to depreciation, depletion, and amortization expense to reflect the fair value recognized in the purchase price allocation, removes one-time transaction related costs, and aligns the Company's debt financing with that as of the acquisition date. The unaudited pro-forma information should not be considered indicative of the results that would have occurred if the acquisition had been completed on January 1, 2019, nor is such unaudited pro-forma information necessarily indicative of future results. Six Months Ended Year Ended (in millions) Revenues $ 986.7 $ 1,916.9 Income before income taxes $ 90.6 $ 163.8 In March 2020, we completed the acquisition of certain assets and liabilities of a traffic structures business in our Energy Equipment Group for a total purchase price of $25.5 million. The acquisition was recorded as a business combination based on preliminary valuations of the assets acquired and liabilities assumed at their acquisition date fair value using level three inputs. The valuation resulted in the recognition of $10.1 million of goodwill in our Energy Equipment Group. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated or segment level. In June 2020, we completed the acquisition of certain assets and liabilities of a concrete poles business in our Energy Equipment Group. The purchase price of the acquisition was not significant. In July 2020, we completed the acquisition of certain assets and liabilities of a telecommunication structures business in our Energy Equipment Group for a total purchase price of $27.7 million. The acquisition will be recorded as a business combination. 2019 Acquisitions In June 2019, we completed the acquisition of certain assets and liabilities of an inland barge components business within our Transportation Products Group. We also completed the acquisition of certain assets and liabilities of a construction aggregates business in our Construction Products Group. The total purchase price for the businesses acquired was $27.6 million, a portion of which includes estimated royalties to be paid to the seller of the construction aggregates business over the next 10 years. The acquisitions were recorded as business combinations with the assets acquired and liabilities assumed recorded at their acquisition date fair value using level three inputs. The valuation resulted in the recognition of $10.4 million of goodwill in our Transportation Products Group and $1.6 million of goodwill in our Construction Products Group. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated or segment level. In August 2019, we completed acquisitions of certain assets and liabilities of two construction aggregates businesses in our Construction Products Group for a total purchase price of $9.4 million. The acquisitions were recorded as business combinations based on preliminary valuations of the assets acquired and liabilities assumed at their acquisition date fair value using level three inputs. The valuation resulted in the recognition of $1.1 million of goodwill in our Construction Products Group. Such assets and liabilities were not significant in relation to assets and liabilities at the consolidated or segment level. Divestitures There was no divestiture activity for the three and six months ended June 30, 2020 and 2019. |
Fair Value Accounting Fair Valu
Fair Value Accounting Fair Value Accounting | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Accounting | Fair Value Accounting Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurement as of June 30, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents $ 87.1 $ — $ — $ 87.1 Total assets $ 87.1 $ — $ — $ 87.1 Liabilities: Interest rate hedge (1) $ — $ 8.6 $ — $ 8.6 Contingent consideration (2) — — 4.2 4.2 Total liabilities $ — $ 8.6 $ 4.2 $ 12.8 Fair Value Measurement as of December 31, 2019 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents $ 155.3 $ — $ — $ 155.3 Total assets $ 155.3 $ — $ — $ 155.3 Liabilities: Interest rate hedge (1) $ — $ 4.3 $ — $ 4.3 Contingent consideration (2) — — 6.4 6.4 Total liabilities $ — $ 4.3 $ 6.4 $ 10.7 (1) Included in other liabilities on the Consolidated Balance Sheets. (2) Current portion included in accrued liabilities and non-current portion included in other liabilities on the Consolidated Balance Sheets. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date. An entity is required to establish a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair values are listed below: Level 1 – This level is defined as quoted prices in active markets for identical assets or liabilities. The Company’s cash equivalents are instruments of the U.S. Treasury or highly-rated money market mutual funds. Level 2 – This level is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Interest rate hedges are valued at exit prices obtained from each counterparty. See Note 7 Debt. Level 3 – This level is defined as unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Contingent consideration relates to estimated future payments owed to the sellers of businesses previously acquired. We estimate the fair value of the contingent consideration using a discounted cash flow model. The fair value is sensitive to changes in the forecast of sales and changes in discount rates and is reassessed quarterly based on assumptions used in our latest projections. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company reports operating results in three principal business segments: Construction Products. The Construction Products segment produces and sells construction aggregates and manufactures and sells trench shields and shoring products and services for infrastructure-related projects. Energy Equipment. The Energy Equipment segment manufactures and sells products for energy-related businesses, including structural wind towers, steel utility structures for electricity transmission and distribution, traffic structures, telecommunication structures, and storage and distribution tanks. Transportation Products. The Transportation Products segment manufactures and sells products for the inland waterway and rail transportation industries including barges, barge-related products, axles, and couplers. The financial information for these segments is shown in the tables below. We operate principally in North America. Three Months Ended June 30, Revenues Operating Profit (Loss) 2020 2019 2020 2019 (in millions) Construction aggregates $ 132.1 $ 93.2 Other 16.1 22.4 Construction Products Group 148.2 115.6 $ 24.3 $ 17.5 Wind towers and utility structures 176.9 151.0 Other 45.9 53.3 Energy Equipment Group 222.8 204.3 20.9 25.0 Inland barges 107.0 66.1 Steel components 21.2 49.2 Transportation Products Group 128.2 115.3 15.9 12.6 Segment Totals before Eliminations and Corporate 499.2 435.2 61.1 55.1 Corporate — — (13.3) (12.8) Eliminations (0.7) (1.1) — — Consolidated Total $ 498.5 $ 434.1 $ 47.8 $ 42.3 Six Months Ended June 30, Revenues Operating Profit (Loss) 2020 2019 2020 2019 (in millions) Construction aggregates $ 264.2 $ 181.6 Other 33.4 40.0 Construction Products Group 297.6 221.6 $ 41.1 $ 28.8 Wind towers and utility structures 353.3 309.6 Other 92.7 103.8 Energy Equipment Group 446.0 413.4 45.8 53.2 Inland barges 196.0 115.5 Steel components 49.2 97.3 Transportation Products Group 245.2 212.8 30.2 20.9 Segment Totals before Eliminations and Corporate 988.8 847.8 117.1 102.9 Corporate — — (24.2) (23.3) Eliminations (2.1) (2.8) — — Consolidated Total $ 986.7 $ 845.0 $ 92.9 $ 79.6 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | Property, Plant, and Equipment The following table summarizes the components of property, plant, and equipment as of June 30, 2020 and December 31, 2019. June 30, December 31, (in millions) Land (1) $ 369.4 $ 331.4 Buildings and improvements 299.0 280.5 Machinery and other 822.7 755.7 Construction in progress 35.9 38.6 1,527.0 1,406.2 Less accumulated depreciation and depletion (634.3) (590.0) $ 892.7 $ 816.2 (1) Includes depletable land of $231.7 million as of June 30, 2020 and $211.0 million as of December 31, 2019. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill by segment is as follows: June 30, December 31, (in millions) Construction Products Group $ 293.9 $ 166.2 Energy Equipment Group 427.1 416.9 Transportation Products Group 37.0 38.8 $ 758.0 $ 621.9 The increase in the Construction Products Group goodwill during the six months ended June 30, 2020 is primarily due to the acquisition of Cherry. The increase in the Energy Equipment Group goodwill during the six months ended June 30, 2020 is due to recently completed acquisitions. The decrease in Transportation Products Group is due to a refinement of the purchase price allocation of a recent acquisition. See Note 2 Acquisitions and Divestitures. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the components of debt as of June 30, 2020 and December 31, 2019: June 30, December 31, (in millions) Revolving credit facility $ 100.0 $ 100.0 Term loan 150.0 — Finance leases 6.9 7.3 256.9 107.3 Less: unamortized debt issuance costs (0.3) — Total debt $ 256.6 $ 107.3 On November 1, 2018, the Company entered into a $400.0 million unsecured revolving credit facility that was scheduled to mature in November 2023. On January 2, 2020, the Company entered into an Amended and Restated Credit Agreement to increase the revolving credit facility to $500.0 million and added a term loan facility of $150.0 million, in each case with a maturity date of January 2, 2025. The interest rates under the revolving credit facility and term loan are variable based on LIBOR or an alternate base rate plus a margin. A commitment fee accrues on the average daily unused portion of the revolving facility. The margin for borrowing and commitment fee rate are determined based on Arcosa’s leverage as measured by a consolidated total indebtedness to consolidated EBITDA ratio. The margin for borrowing ranges from 1.25% to 2.00% and was set at LIBOR plus 1.50% as of June 30, 2020. The commitment fee rate ranges from 0.20% to 0.35% and was set at 0.25% as of June 30, 2020. In March 2020, as a precautionary measure, the Company borrowed $100.0 million under its revolving credit facility to increase our cash position and preserve financial flexibility considering the uncertainty resulting from the COVID-19 pandemic. The Company subsequently repaid the $100.0 million during the three months ended June 30, 2020 . As of June 30, 2020, we had $100.0 million of outstanding loans borrowed under the facility, and there were approximately $26.0 million of letters of credit issued, leaving $374.0 million available. Of the outstanding letters of credit as of June 30, 2020, $25.4 million are expected to expire in 2020, with the remainder in 2021. The majority of our letters of credit obligations support the Company’s various insurance programs and warranty claims and generally renew by their terms each year. The entire term loan was advanced on January 2, 2020 in connection with the closing of the acquisition of Cherry. See Note 2 Acquisitions and Divestitures. The Company's revolving credit and term loan facilities require the maintenance of certain ratios related to leverage and interest coverage. As of June 30, 2020, we were in compliance with all such financial covenants. Borrowings under the credit agreement are guaranteed by certain wholly-owned subsidiaries of the Company. The carrying value of borrowings under our revolving credit and term loan facilities approximate fair value because the interest rate adjusts to the market interest rate (Level 3 input). See Note 3 Fair Value Accounting. As of June 30, 2020, the Company had $1.9 million of unamortized debt issuance costs related to the revolving credit facility, which are included in other assets on the Consolidated Balance Sheet. The remaining principal payments under existing debt agreements as of June 30, 2020 are as follows: 2020 2021 2022 2023 2024 Thereafter (in millions) Revolving credit facility $ — $ — $ — $ — $ — $ 100.0 Term loan 0.9 4.7 7.5 8.5 8.4 120.0 Interest rate hedges In December 2018, the Company entered into an interest rate swap instrument, effective as of January 2, 2019 and expiring in 2023, to reduce the effect of changes in the variable interest rates associated with borrowings under the revolving credit facility. The instrument carried an initial notional amount of $100 million, thereby hedging the first $100 million of borrowings under the credit facility. The instrument effectively fixes the LIBOR component of the credit facility borrowings at a monthly rate of 2.71%. As of June 30, 2020, the Company has recorded a liability of $8.6 million for the fair value of the instrument, all of which is recorded in accumulated other comprehensive loss. See Note 3 Fair Value Accounting. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We have various leases primarily for office space and certain equipment. At inception, we determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. For leases that contain options to purchase, terminate, or extend, such options are included in the lease term when it is reasonably certain that the option will be exercised. Some of our lease arrangements contain lease components and non-lease components which are accounted for as a single lease component as we have elected the practical expedient to group lease and non-lease components for all leases. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at commencement date in determining the present value of lease payments. Operating Leases The following table presents information about the Company's operating leases as of June 30, 2020. June 30, 2020 (in millions) Maturity of Lease Liabilities 2020 (remaining) $ 3.1 2021 4.2 2022 2.8 2023 2.1 2024 1.8 Thereafter 7.3 Total undiscounted operating lease payments 21.3 Less imputed interest (3.3) Present value of operating lease liabilities $ 18.0 Balance Sheet Classification June 30, December 31, (in millions) Other assets $ 14.5 $ 15.6 Accrued liabilities $ 4.7 $ 5.5 Other liabilities 13.3 13.5 Total operating lease liabilities $ 18.0 $ 19.0 Finance Leases Finance leases are included in property, plant, and equipment, net and debt on the consolidated balance sheets. The associated amortization expense and interest expense are included in depreciation and interest expense, respectively, on the consolidated income statements. These leases are not material to the consolidated financial statements as of June 30, 2020. |
Other, Net
Other, Net | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other, Net | Other, Net Other, net (income) expense consists of the following items: Three Months Ended Six Months Ended 2020 2019 2020 2019 (in millions) Interest income $ (0.1) $ (0.4) $ (0.3) $ (0.7) Foreign currency exchange transactions 0.2 0.5 0.2 1.0 Other (0.2) (0.2) (0.2) (0.6) Other, net (income) expense $ (0.1) $ (0.1) $ (0.3) $ (0.3) |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim income tax reporting, we estimate our annual effective tax rate and apply it to our year to date ordinary income (loss). Tax jurisdictions with a projected or year to date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur. We have open tax years from 2014 to 2019 with various significant tax jurisdictions. For the three and six months ended June 30, 2020, the effective tax rate of 26.2% and 25.5%, respectively, was higher than the U.S. federal statutory rate of 21.0% due primarily to state taxes, tax effects of foreign currency translation, and nondeductible compensation expenses in the U.S. and Mexico. For the three and six months ended June 30, 2019, the effective tax rate of 22.1% and 22.1%, respectively, was higher than the U.S. federal statutory tax rate of 21.0% due primarily to state taxes partially offset by foreign tax benefits and excess tax benefits related to equity compensation. In response to the COVID-19 pandemic, on March 27, 2020 the U.S. Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which includes certain tax relief and benefits that may impact the Company. In light of the recent nature of these developments, the Company is currently evaluating the impact of the various provisions of the CARES Act on its income tax provision. Approximately $15 million of federal and state income tax payments were deferred from the first half of the year into July 2020, following passage of the CARES Act and similar state provisions. |
Employee Retirement Plans
Employee Retirement Plans | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plans | Employee Retirement Plans Total employee retirement plan expense, which includes related administrative expenses, is as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (in millions) Defined contribution plans $ 2.7 $ 2.2 $ 5.3 $ 4.4 Multiemployer plan 0.5 0.4 0.9 0.9 $ 3.2 $ 2.6 $ 6.2 $ 5.3 The Company contributes to a multiemployer defined benefit plan under the terms of a collective-bargaining agreement that covers certain union-represented employees at one of the facilities of Meyer Utility Structures, LLC, a subsidiary of Arcosa. The Company contributed $0.4 million and $0.8 million to the multiemployer plan for the three and six months ended June 30, 2020, respectively. The Company contributed $0.4 million and $0.9 million to the multiemployer plan for the three and six months ended June 30, 2019, respectively. Total contributions to the multiemployer plan for 2020 are expected to be approximately $1.7 million. In connection with the acquisition of ACG Materials in December 2018, the Company assumed the assets and liabilities related to a defined benefit pension plan. Employer contributions under this plan for 2020 are not expected to be significant. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss for the six months ended June 30, 2020 and 2019 are as follows: Currency Unrealized Accumulated (in millions) Balances at December 31, 2018 $ (16.8) $ (0.9) $ (17.7) Other comprehensive income (loss), net of tax, before reclassifications 0.4 (2.8) (2.4) Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, $0.0, and $0.0 — 0.1 0.1 Other comprehensive income (loss) 0.4 (2.7) (2.3) Balances at June 30, 2019 $ (16.4) $ (3.6) $ (20.0) Balances at December 31, 2019 $ (16.3) $ (3.4) $ (19.7) Other comprehensive income (loss), net of tax, before reclassifications (0.7) (3.9) (4.6) Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, ($0.2) and ($0.2) — 0.6 0.6 Other comprehensive income (loss) (0.7) (3.3) (4.0) Balances at June 30, 2020 $ (17.0) $ (6.7) $ (23.7) |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based CompensationStock-based compensation totaled approximately $5.1 million and $8.8 million for the three and six months ended June 30, 2020, respectively. Stock-based compensation totaled approximately $3.7 million and $7.1 million for the three and six months ended June 30, 2019, respectively. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings Per Common Share Basic earnings per common share is computed by dividing net income remaining after allocation to unvested restricted shares, which includes unvested restricted shares of Arcosa stock held by employees of the Former Parent, by the weighted average number of basic common shares outstanding for the period. Except when the effect would be antidilutive, the calculation of diluted earnings per common share includes the weighted average net impact of nonparticipating unvested restricted shares. Total weighted average restricted shares were 1.6 million shares for the three and six months ended June 30, 2020, respectively. Total weighted average restricted shares were 1.7 million shares for the three and six months ended June 30, 2019, respectively. The computation of basic and diluted earnings per share follows. Three Months Ended Three Months Ended Income Average EPS Income Average EPS (in millions, except per share amounts) Net income $ 33.3 $ 31.8 Unvested restricted share participation (0.3) (0.3) Net income per common share – basic 33.0 47.9 $ 0.69 31.5 47.8 $ 0.66 Effect of dilutive securities: Nonparticipating unvested restricted shares — 0.5 — 0.5 Net income per common share – diluted $ 33.0 48.4 $ 0.68 $ 31.5 48.3 $ 0.65 Six Months Ended Six Months Ended Income Average EPS Income Average EPS (in millions, except per share amounts) Net income $ 64.9 $ 59.5 Unvested restricted share participation (0.5) (0.7) Net income per common share – basic 64.4 47.9 $ 1.34 58.8 47.9 $ 1.23 Effect of dilutive securities: Nonparticipating unvested restricted shares — 0.5 — 0.5 Net income per common share – diluted $ 64.4 48.4 $ 1.33 $ 58.8 48.4 $ 1.21 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved in claims and lawsuits incidental to our business arising from various matters including commercial disputes, alleged product defect and/or warranty claims, intellectual property matters, personal injury claims, environmental issues, employment and/or workplace-related matters, and various governmental regulations. At June 30, 2020, the range of reasonably possible losses for such matters, taking into consideration our rights in indemnity and recourse to third parties is $0.8 million to $1.6 million. The Company evaluates its exposure to such claims and suits periodically and establishes accruals for these contingencies when probable losses can be reasonably estimated. At June 30, 2020, total accruals of $2.5 million, including environmental matters described below, are included in accrued liabilities in the accompanying Consolidated Balance Sheet. The Company believes any additional liability from such claims and suits would not be material to its financial position or results of operations. Arcosa is subject to remedial orders and federal, state, local, and foreign laws and regulations relating to the environment. The Company has reserved $1.3 million as of June 30, 2020, included in our total accruals of $2.5 million discussed above, to cover our probable and estimable liabilities with respect to the investigations, assessments, and remedial responses to such matters, taking into account currently available information and our contractual rights to indemnification and recourse to third parties. |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” the “Company,” “we,” or “our”), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading brands serving construction, energy, and transportation markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018 in connection with the separation of Arcosa from Trinity Industries, Inc. (“Trinity” or “Former Parent”) on November 1, 2018 as an independent, publicly-traded company, listed on the New York Stock Exchange (the “Separation”). The accompanying Consolidated Financial Statements are unaudited and have been prepared from the books and records of Arcosa, Inc. and its consolidated subsidiaries. All normal and recurring adjustments necessary for a fair presentation of the financial position of the Company and the results of operations, comprehensive income/loss, and cash flows have been made in conformity with accounting principles generally accepted in the U.S. (“GAAP”). All significant intercompany accounts and transactions have been eliminated. Because of seasonal and other factors, including the unknown potential duration, spread, severity, and impact of the COVID-19 pandemic, Arcosa's business, financial condition, and results of operations for the three and six months ended June 30, 2020 may not be indicative of Arcosa's expected business, financial condition, and results of operations for the year ending December 31, 2020. These interim financial statements and notes are condensed as permitted by the instructions to Form 10-Q and should be read in conjunction with the audited consolidated and combined financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2019. |
Stockholders' Equity | Stockholders' Equity In December 2018, the Company’s Board of Directors (the “Board”) authorized a $50 million share repurchase program effective December 5, 2018 through December 31, 2020. The Company did not repurchase any shares during the three months ended June 30, 2020. For the six months ended June 30, 2020, the Company repurchased 56,836 shares at a cost of $2.0 million. As of June 30, 2020, the Company had a remaining authorization of $34.0 million under the program. |
Revenue Recognition | Revenue Recognition Revenue is measured based on the allocation of the transaction price in a contract to satisfied performance obligations. The transaction price does not include any amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The following is a description of principal activities from which the Company generates its revenue, separated by reportable segments. Payments for our products and services are generally due within normal commercial terms. For a further discussion regarding the Company’s reportable segments, see Note 4 Segment Information. Construction Products Group The Construction Products Group recognizes substantially all revenue when the customer has accepted the product and legal title of the product has passed to the customer. Energy Equipment Group Within the Energy Equipment Group, revenue is recognized for our wind tower, certain utility structure, and certain storage tank product lines over time as the products are manufactured using an input approach based on the costs incurred relative to the total estimated costs of production. We recognize revenue over time for these products as they are highly customized to the needs of an individual customer resulting in no alternative use to the Company if not purchased by the customer after the contract is executed, and we have the right to bill the customer for our work performed to date plus at least a reasonable profit margin for work performed. As of June 30, 2020, we had a contract asset of $23.9 million related to these contracts, compared to $50.8 million at December 31, 2019, which is included in receivables, net of allowance, within the Consolidated Balance Sheets. For all other products, revenue is recognized when the customer has accepted the product and legal title of the product has passed to the customer. Transportation Products Group The Transportation Products Group recognizes revenue when the customer has accepted the product and legal title of the product has passed to the customer. Unsatisfied Performance Obligations The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of June 30, 2020 and the percentage of the outstanding performance obligations as of June 30, 2020 expected to be delivered during the remainder of 2020: Unsatisfied performance obligations at June 30, 2020 Total Percent expected to be delivered in 2020 (in millions) Energy Equipment Group: Wind towers and utility structures $ 352.2 74 % Other $ 15.5 100 % Transportation Products Group: Inland barges $ 258.7 73 % Substantially all unsatisfied performance obligations beyond 2020 are expected to be delivered during 2021. |
Income Tax | Income Taxes The liability method is used to account for income taxes. Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances reduce deferred tax assets to an amount that will more likely than not be realized. The Company regularly evaluates the likelihood of realization of tax benefits derived from positions it has taken in various federal and state filings after consideration of all relevant facts, circumstances, and available information. For those tax positions that are deemed more likely than not to be sustained, the Company recognizes the benefit it believes is cumulatively greater than 50% likely to be realized. To the extent the Company were to prevail in matters for which accruals have been established or be required to pay amounts in excess of recorded reserves, the effective tax rate in a given financial statement period could be materially impacted. |
Cash and Cash Equivalents | Financial InstrumentsThe Company considers all highly liquid debt instruments to be cash and cash equivalents if purchased with a maturity of three months or less. |
Concentration of Credit Risk | Financial instruments that potentially subject the Company to a concentration of credit risk are primarily cash investments and receivables. The Company places its cash investments in bank deposits and highly-rated money market funds, and its investment policy limits the amount of credit exposure to any one commercial issuer. We seek to limit concentrations of credit risk with respect to receivables with control procedures that monitor the credit worthiness of customers, together with the large number of customers in the Company's customer base and their dispersion across different industries and geographic areas. As receivables are generally unsecured, the Company maintains an allowance for doubtful accounts based upon the expected credit losses. Receivable balances determined to be uncollectible are charged against the allowance. To accelerate the conversion to cash, the Company may sell a portion of its trade receivables to a third party. The Company has no continuing involvement or recourse related to these receivables once they are sold, and the impact of these transactions in the Company's Consolidated Statements of Operations for the three and six months ended June 30, 2020 was not significant. The carrying values of cash, receivables, and accounts payable are considered to be representative of their respective fair values. |
Derivative Instruments | Derivative Instruments The Company may, from time to time, use derivative instruments to mitigate the impact of changes in interest rates, commodity prices, or changes in foreign currency exchange rates. For derivative instruments designated as hedges, the Company formally documents the relationship between the derivative instrument and the hedged item, as well as the risk management objective and strategy for the use of the derivative instrument. This documentation includes linking the derivative to specific assets or liabilities on the balance sheet, commitments, or forecasted transactions. At the time a derivative instrument is entered into, and at least quarterly thereafter, the Company assesses whether the derivative instrument is effective in offsetting the changes in fair value or cash flows of the hedged item. Any change in the fair value of the hedged instrument is recorded in accumulated other comprehensive loss (“AOCL”) as a separate component of stockholders' equity and reclassified into earnings in the period during which the hedged transaction affects earnings. The Company monitors its derivative positions and the credit ratings of its counterparties and does not anticipate losses due to counterparties' non-performance. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently adopted accounting pronouncements Effective as of January 1, 2019, the Company adopted Accounting Standards Update No. 2016-02, “Leases”, (“ASU 2016-02”) which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The Company elected to use the optional transition method that allows the Company to apply the provisions of the standard at the effective date without adjusting the comparative prior periods. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard which allowed us to carry forward the historical lease classification. The cumulative effect of adopting the standard on the opening balance of retained earnings was not significant. The primary impact of adopting the standard was the recognition of a right-of-use asset and corresponding lease liability for our operating leases included in other assets and other liabilities, respectively, on the Consolidated Balance Sheet. See Note 8 Leases for further discussion. The Company has implemented processes and a lease accounting system to ensure adequate internal controls were in place to assess our contracts and enable proper accounting and reporting of financial information upon adoption. Effective as of January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, “Financial Instruments - Credit Losses”, (“ASU 2016-13”), which amends the existing accounting guidance for recognizing credit losses on financial assets and certain other instruments not measured at fair value through net income, including financial assets measured at amortized cost, such as trade receivables and contract assets. ASU 2016-13 replaces the existing incurred loss impairment model with an expected credit loss model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. The adoption of this guidance did not have a material effect on the Company’s Consolidated Financial Statements. Recently issued accounting pronouncements not adopted as of June 30, 2020 In December 2019, the FASB issued Accounting Standards Updated No. 2019-12, “Simplifying the Accounting for Income Taxes”, (“ASU 2019-12”), which simplifies the accounting for income taxes by removing certain exceptions to the general principles for income taxes. ASU 2019-12 will become effective for public companies during interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of adoption on our consolidated financial statements. |
Reclassifications | ReclassificationsCertain prior year balances have been reclassified in the Consolidated Financial Statements to conform with the 2020 presentation. |
Overview and Summary of Signi_2
Overview and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Unsatisfied Performance Obligations | Unsatisfied Performance Obligations The following table includes estimated revenue expected to be recognized in future periods related to performance obligations that are unsatisfied or partially satisfied as of June 30, 2020 and the percentage of the outstanding performance obligations as of June 30, 2020 expected to be delivered during the remainder of 2020: Unsatisfied performance obligations at June 30, 2020 Total Percent expected to be delivered in 2020 (in millions) Energy Equipment Group: Wind towers and utility structures $ 352.2 74 % Other $ 15.5 100 % Transportation Products Group: Inland barges $ 258.7 73 % Substantially all unsatisfied performance obligations beyond 2020 are expected to be delivered during 2021. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Preliminary purchase price allocation | The following table represents our preliminary purchase price allocation as of June 30, 2020: June 30, 2020 (in millions) Accounts receivable $ 30.8 Inventories 11.8 Property, plant, and equipment 62.1 Mineral reserves 21.2 Goodwill 125.6 Customer relationships 60.2 Permits 24.9 Other assets 4.2 Accounts payable (7.5) Accrued liabilities (5.4) Deferred taxes (29.3) Other liabilities (1.8) Total net assets acquired $ 296.8 |
Business Acquisition, Pro Forma Information | The following table represents the unaudited pro-forma consolidated operating results of the Company as if the Cherry acquisition had been completed on January 1, 2019. The unaudited pro-forma information makes certain adjustments to depreciation, depletion, and amortization expense to reflect the fair value recognized in the purchase price allocation, removes one-time transaction related costs, and aligns the Company's debt financing with that as of the acquisition date. The unaudited pro-forma information should not be considered indicative of the results that would have occurred if the acquisition had been completed on January 1, 2019, nor is such unaudited pro-forma information necessarily indicative of future results. Six Months Ended Year Ended (in millions) Revenues $ 986.7 $ 1,916.9 Income before income taxes $ 90.6 $ 163.8 |
Fair Value Accounting (Tables)
Fair Value Accounting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized below: Fair Value Measurement as of June 30, 2020 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents $ 87.1 $ — $ — $ 87.1 Total assets $ 87.1 $ — $ — $ 87.1 Liabilities: Interest rate hedge (1) $ — $ 8.6 $ — $ 8.6 Contingent consideration (2) — — 4.2 4.2 Total liabilities $ — $ 8.6 $ 4.2 $ 12.8 Fair Value Measurement as of December 31, 2019 Level 1 Level 2 Level 3 Total (in millions) Assets: Cash equivalents $ 155.3 $ — $ — $ 155.3 Total assets $ 155.3 $ — $ — $ 155.3 Liabilities: Interest rate hedge (1) $ — $ 4.3 $ — $ 4.3 Contingent consideration (2) — — 6.4 6.4 Total liabilities $ — $ 4.3 $ 6.4 $ 10.7 (1) Included in other liabilities on the Consolidated Balance Sheets. (2) Current portion included in accrued liabilities and non-current portion included in other liabilities on the Consolidated Balance Sheets. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Financial information for segments | The financial information for these segments is shown in the tables below. We operate principally in North America. Three Months Ended June 30, Revenues Operating Profit (Loss) 2020 2019 2020 2019 (in millions) Construction aggregates $ 132.1 $ 93.2 Other 16.1 22.4 Construction Products Group 148.2 115.6 $ 24.3 $ 17.5 Wind towers and utility structures 176.9 151.0 Other 45.9 53.3 Energy Equipment Group 222.8 204.3 20.9 25.0 Inland barges 107.0 66.1 Steel components 21.2 49.2 Transportation Products Group 128.2 115.3 15.9 12.6 Segment Totals before Eliminations and Corporate 499.2 435.2 61.1 55.1 Corporate — — (13.3) (12.8) Eliminations (0.7) (1.1) — — Consolidated Total $ 498.5 $ 434.1 $ 47.8 $ 42.3 Six Months Ended June 30, Revenues Operating Profit (Loss) 2020 2019 2020 2019 (in millions) Construction aggregates $ 264.2 $ 181.6 Other 33.4 40.0 Construction Products Group 297.6 221.6 $ 41.1 $ 28.8 Wind towers and utility structures 353.3 309.6 Other 92.7 103.8 Energy Equipment Group 446.0 413.4 45.8 53.2 Inland barges 196.0 115.5 Steel components 49.2 97.3 Transportation Products Group 245.2 212.8 30.2 20.9 Segment Totals before Eliminations and Corporate 988.8 847.8 117.1 102.9 Corporate — — (24.2) (23.3) Eliminations (2.1) (2.8) — — Consolidated Total $ 986.7 $ 845.0 $ 92.9 $ 79.6 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Components of property, plant, and equipment | The following table summarizes the components of property, plant, and equipment as of June 30, 2020 and December 31, 2019. June 30, December 31, (in millions) Land (1) $ 369.4 $ 331.4 Buildings and improvements 299.0 280.5 Machinery and other 822.7 755.7 Construction in progress 35.9 38.6 1,527.0 1,406.2 Less accumulated depreciation and depletion (634.3) (590.0) $ 892.7 $ 816.2 (1) Includes depletable land of $231.7 million as of June 30, 2020 and $211.0 million as of December 31, 2019. |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by segment | Goodwill by segment is as follows: June 30, December 31, (in millions) Construction Products Group $ 293.9 $ 166.2 Energy Equipment Group 427.1 416.9 Transportation Products Group 37.0 38.8 $ 758.0 $ 621.9 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Components of debt | The following table summarizes the components of debt as of June 30, 2020 and December 31, 2019: June 30, December 31, (in millions) Revolving credit facility $ 100.0 $ 100.0 Term loan 150.0 — Finance leases 6.9 7.3 256.9 107.3 Less: unamortized debt issuance costs (0.3) — Total debt $ 256.6 $ 107.3 |
Remaining principal payments under debt agreement | The remaining principal payments under existing debt agreements as of June 30, 2020 are as follows: 2020 2021 2022 2023 2024 Thereafter (in millions) Revolving credit facility $ — $ — $ — $ — $ — $ 100.0 Term loan 0.9 4.7 7.5 8.5 8.4 120.0 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Operating leases | The following table presents information about the Company's operating leases as of June 30, 2020. June 30, 2020 (in millions) Maturity of Lease Liabilities 2020 (remaining) $ 3.1 2021 4.2 2022 2.8 2023 2.1 2024 1.8 Thereafter 7.3 Total undiscounted operating lease payments 21.3 Less imputed interest (3.3) Present value of operating lease liabilities $ 18.0 |
Lease right of use and contract liability classification | Balance Sheet Classification June 30, December 31, (in millions) Other assets $ 14.5 $ 15.6 Accrued liabilities $ 4.7 $ 5.5 Other liabilities 13.3 13.5 Total operating lease liabilities $ 18.0 $ 19.0 |
Other, Net (Tables)
Other, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other, net (income) expense | Other, net (income) expense consists of the following items: Three Months Ended Six Months Ended 2020 2019 2020 2019 (in millions) Interest income $ (0.1) $ (0.4) $ (0.3) $ (0.7) Foreign currency exchange transactions 0.2 0.5 0.2 1.0 Other (0.2) (0.2) (0.2) (0.6) Other, net (income) expense $ (0.1) $ (0.1) $ (0.3) $ (0.3) |
Compensation Related Costs, Ret
Compensation Related Costs, Retirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Retirement plan expense | Total employee retirement plan expense, which includes related administrative expenses, is as follows: Three Months Ended Six Months Ended 2020 2019 2020 2019 (in millions) Defined contribution plans $ 2.7 $ 2.2 $ 5.3 $ 4.4 Multiemployer plan 0.5 0.4 0.9 0.9 $ 3.2 $ 2.6 $ 6.2 $ 5.3 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Changes in accumulated other comprehensive loss | Changes in accumulated other comprehensive loss for the six months ended June 30, 2020 and 2019 are as follows: Currency Unrealized Accumulated (in millions) Balances at December 31, 2018 $ (16.8) $ (0.9) $ (17.7) Other comprehensive income (loss), net of tax, before reclassifications 0.4 (2.8) (2.4) Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, $0.0, and $0.0 — 0.1 0.1 Other comprehensive income (loss) 0.4 (2.7) (2.3) Balances at June 30, 2019 $ (16.4) $ (3.6) $ (20.0) Balances at December 31, 2019 $ (16.3) $ (3.4) $ (19.7) Other comprehensive income (loss), net of tax, before reclassifications (0.7) (3.9) (4.6) Amounts reclassified from accumulated other comprehensive loss, net of tax expense (benefit) of $0.0, ($0.2) and ($0.2) — 0.6 0.6 Other comprehensive income (loss) (0.7) (3.3) (4.0) Balances at June 30, 2020 $ (17.0) $ (6.7) $ (23.7) |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of basic and diluted earnings per share | The computation of basic and diluted earnings per share follows. Three Months Ended Three Months Ended Income Average EPS Income Average EPS (in millions, except per share amounts) Net income $ 33.3 $ 31.8 Unvested restricted share participation (0.3) (0.3) Net income per common share – basic 33.0 47.9 $ 0.69 31.5 47.8 $ 0.66 Effect of dilutive securities: Nonparticipating unvested restricted shares — 0.5 — 0.5 Net income per common share – diluted $ 33.0 48.4 $ 0.68 $ 31.5 48.3 $ 0.65 Six Months Ended Six Months Ended Income Average EPS Income Average EPS (in millions, except per share amounts) Net income $ 64.9 $ 59.5 Unvested restricted share participation (0.5) (0.7) Net income per common share – basic 64.4 47.9 $ 1.34 58.8 47.9 $ 1.23 Effect of dilutive securities: Nonparticipating unvested restricted shares — 0.5 — 0.5 Net income per common share – diluted $ 64.4 48.4 $ 1.33 $ 58.8 48.4 $ 1.21 |
Overview and Summary of Signi_3
Overview and Summary of Significant Accounting Policies - Stockholders' Equity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | |||
Authorized stock repurchase amount | $ 50,000,000 | $ 50,000,000 | |
Shares repurchased, shares | 0 | 56,836 | |
Cost of shares repurchased | $ 0 | $ 2,000,000 | $ 8,000,000 |
Remaining authorized repurchase amount | $ 34,000,000 | $ 34,000,000 |
Overview and Summary of Signi_4
Overview and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Contract asset with customer | $ 23.9 | $ 50.8 |
Overview and Summary of Signi_5
Overview and Summary of Significant Accounting Policies - Unsatisfied Performance Obligation (Details) $ in Millions | Jun. 30, 2020USD ($) |
Energy Equipment Group | Wind towers and utility structures | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, Amount | $ 352.2 |
Revenue, remaining performance obligation expected to be delivered in current year | 74.00% |
Energy Equipment Group | Other | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, Amount | $ 15.5 |
Revenue, remaining performance obligation expected to be delivered in current year | 100.00% |
Transportation Products Group | Inland barge | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Unsatisfied performance obligations, Amount | $ 258.7 |
Revenue, remaining performance obligation expected to be delivered in current year | 73.00% |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Preliminary purchase price allocation (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 758 | [1] | $ 621.9 |
Construction Products Group | |||
Business Acquisition [Line Items] | |||
Goodwill | 293.9 | $ 166.2 | |
Construction Products Group | Cherry Industries | |||
Business Acquisition [Line Items] | |||
Accounts receivable | 30.8 | ||
Inventories | 11.8 | ||
Property, plant, and equipment | 62.1 | ||
Mineral reserves | 21.2 | ||
Goodwill | 125.6 | ||
Other assets | 4.2 | ||
Accounts payable | (7.5) | ||
Accrued and other liabilities | (5.4) | ||
Deferred taxes | (29.3) | ||
Other liabilities | (1.8) | ||
Total net assets acquired | 296.8 | ||
Construction Products Group | Cherry Industries | Customer-Related Intangible Assets | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangibles | 60.2 | ||
Construction Products Group | Cherry Industries | Construction Permits | |||
Business Acquisition [Line Items] | |||
Finite-Lived Intangibles | $ 24.9 | ||
[1] | Unaudited |
Pro-Forma (Details)
Pro-Forma (Details) - Cherry Industries - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||
Revenue | $ 986.7 | $ 1,916.9 |
Income before income taxes | $ 90.6 | $ 163.8 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 31, 2020USD ($) | Jun. 30, 2020USD ($)businesses_divested | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($)businesses_divested | Jun. 30, 2020USD ($)businesses_divested | Jun. 30, 2019USD ($)businesses_divested | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||||||
Term Loan | $ 150 | $ 150 | ||||||
Revenues | 498.5 | $ 434.1 | 986.7 | $ 845 | ||||
Operating profit (loss) | $ 47.8 | $ 42.3 | $ 92.9 | $ 79.6 | ||||
Number of Divestitures | businesses_divested | 0 | 0 | 0 | 0 | ||||
Construction aggregates | Construction Products Group | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Acquisition price | $ 9.4 | |||||||
Goodwill acquired | $ 1.1 | $ 1.6 | ||||||
Traffic structures | Energy Equipment Group | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Acquisition price | $ 25.5 | |||||||
Goodwill acquired | $ 10.1 | |||||||
Cherry Industries | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | $ 44.9 | $ 88.7 | ||||||
Operating profit (loss) | 8.1 | $ 13.8 | ||||||
Cherry Industries | Customer-Related Intangible Assets | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Weighted average useful life | 14 years 10 months 24 days | |||||||
Cherry Industries | Construction Permits | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Weighted average useful life | 19 years 9 months 18 days | |||||||
Cherry Industries | Construction Products Group | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Acquisition price | $ 296.8 | |||||||
Net cash paid for acquisition | 284.1 | |||||||
Transaction costs | $ 0.7 | $ 1.6 | $ 0.5 | |||||
Inland barge and construction aggregates businesses | Transportation Products Group and Construction Products Group | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Acquisition price | 27.6 | |||||||
Inland barge business | Transportation Products Group | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Goodwill acquired | $ 10.4 | |||||||
Telecom structures [Member] | Energy Equipment Group | Subsequent Event [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Acquisition price | $ 27.7 |
Fair Value Accounting - Assets
Fair Value Accounting - Assets and liabilities measured at fair value on recurring basis (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | ||
Liabilities: | ||||
Derivative liability | $ 8.6 | |||
Fair Value, Measurements, Recurring | ||||
Assets: | ||||
Cash equivalents | 87.1 | $ 155.3 | ||
Total assets | 87.1 | 155.3 | ||
Liabilities: | ||||
Contingent consideration liability | 4.2 | [1] | 6.4 | |
Total liabilities | 12.8 | 10.7 | ||
Fair Value, Measurements, Recurring | Interest Rate Swap | ||||
Liabilities: | ||||
Derivative liability | [2] | 8.6 | 4.3 | |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | ||||
Assets: | ||||
Cash equivalents | 87.1 | 155.3 | ||
Total assets | 87.1 | 155.3 | ||
Liabilities: | ||||
Contingent consideration liability | 0 | [1] | 0 | |
Total liabilities | 0 | 0 | ||
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Interest Rate Swap | ||||
Liabilities: | ||||
Derivative liability | [2] | 0 | 0 | |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | ||||
Assets: | ||||
Cash equivalents | 0 | 0 | ||
Total assets | 0 | 0 | ||
Liabilities: | ||||
Contingent consideration liability | 0 | [1] | 0 | |
Total liabilities | 8.6 | 4.3 | ||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Interest Rate Swap | ||||
Liabilities: | ||||
Derivative liability | [2] | 8.6 | 4.3 | |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||||
Assets: | ||||
Cash equivalents | 0 | 0 | ||
Total assets | 0 | 0 | ||
Liabilities: | ||||
Contingent consideration liability | 4.2 | [1] | 6.4 | |
Total liabilities | 4.2 | 6.4 | ||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | Interest Rate Swap | ||||
Liabilities: | ||||
Derivative liability | [2] | $ 0 | $ 0 | |
[1] | Current portion included in accrued liabilities and non-current portion included in other liabilities on the Consolidated Balance Sheets. | |||
[2] | Included in other liabilities on the Consolidated Balance Sheets. |
Segment Information - Financial
Segment Information - Financial information for segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 498.5 | $ 434.1 | $ 986.7 | $ 845 |
Operating profit (loss) | 47.8 | 42.3 | 92.9 | 79.6 |
Intersegment | Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (0.7) | (1.1) | (2.1) | (2.8) |
Operating profit (loss) | 0 | 0 | 0 | 0 |
Total | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 499.2 | 435.2 | 988.8 | 847.8 |
Operating profit (loss) | 61.1 | 55.1 | 117.1 | 102.9 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating profit (loss) | (13.3) | (12.8) | (24.2) | (23.3) |
Construction Products Group | Total | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 148.2 | 115.6 | 297.6 | 221.6 |
Operating profit (loss) | 24.3 | 17.5 | 41.1 | 28.8 |
Energy Equipment Group | Total | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 222.8 | 204.3 | 446 | 413.4 |
Operating profit (loss) | 20.9 | 25 | 45.8 | 53.2 |
Transportation Products Group | Total | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 128.2 | 115.3 | 245.2 | 212.8 |
Operating profit (loss) | 15.9 | 12.6 | 30.2 | 20.9 |
Construction aggregates | Construction Products Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 132.1 | 93.2 | 264.2 | 181.6 |
Other | Construction Products Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 16.1 | 22.4 | 33.4 | 40 |
Other | Energy Equipment Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 45.9 | 53.3 | 92.7 | 103.8 |
Wind towers and utility structures | Energy Equipment Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 176.9 | 151 | 353.3 | 309.6 |
Inland barge | Transportation Products Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 107 | 66.1 | 196 | 115.5 |
Steel components | Transportation Products Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 21.2 | $ 49.2 | $ 49.2 | $ 97.3 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of principal business segments of Company | 3 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Components of property, plant, and equipment (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | ||
Components of property, plant, and equipment | ||||
Property, plant and equipment, at cost | $ 1,527 | $ 1,406.2 | ||
Less accumulated depreciation | (634.3) | (590) | ||
Property, plant, and equipment, net | 892.7 | [1] | 816.2 | |
Land | ||||
Components of property, plant, and equipment | ||||
Property, plant and equipment, at cost | [2] | 369.4 | 331.4 | |
Buildings and improvements | ||||
Components of property, plant, and equipment | ||||
Property, plant and equipment, at cost | 299 | 280.5 | ||
Machinery and other | ||||
Components of property, plant, and equipment | ||||
Property, plant and equipment, at cost | 822.7 | 755.7 | ||
Construction in progress | ||||
Components of property, plant, and equipment | ||||
Property, plant and equipment, at cost | 35.9 | 38.6 | ||
Depletable land | ||||
Components of property, plant, and equipment | ||||
Property, plant and equipment, at cost | $ 231.7 | $ 211 | ||
[1] | Unaudited | |||
[2] | Includes depletable land of $231.7 million as of June 30, 2020 and $211.0 million as of December 31, 2019. |
Goodwill - Goodwill by segment
Goodwill - Goodwill by segment (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill [Line Items] | |||
Goodwill | $ 758 | [1] | $ 621.9 |
Construction Products Group | |||
Goodwill [Line Items] | |||
Goodwill | 293.9 | 166.2 | |
Energy Equipment Group | |||
Goodwill [Line Items] | |||
Goodwill | 427.1 | 416.9 | |
Transportation Products Group | |||
Goodwill [Line Items] | |||
Goodwill | $ 37 | $ 38.8 | |
[1] | Unaudited |
Debt - Components of debt (Deta
Debt - Components of debt (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Term Loan | $ 150 | |
Financing leases | 6.9 | $ 7.3 |
Long-term Debt and Lease Obligation, Including Current Maturities | 256.9 | 107.3 |
Less: unamortized debt issuance costs | (0.3) | 0 |
Total debt | 256.6 | 107.3 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Term Loan | 150 | 0 |
Revolving Credit Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Revolving credit facility | 100 | $ 100 |
Less: unamortized debt issuance costs | $ (1.9) |
Debt - Remaining principal paym
Debt - Remaining principal payments under debt agreement (Details) - Revolving Credit Facility $ in Millions | Jun. 30, 2020USD ($) |
Line of Credit | |
Debt Instrument [Line Items] | |
2020 | $ 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 100 |
Term Loan | |
Debt Instrument [Line Items] | |
2020 | 0.9 |
2021 | 4.7 |
2022 | 7.5 |
2023 | 8.5 |
2024 | 8.4 |
Thereafter | $ 120 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Nov. 01, 2018 | |
Debt Instrument [Line Items] | ||||
Letters of credit outstanding expiring in current fiscal year | $ 25.4 | $ 25.4 | ||
Unamortized debt issuance costs | 0.3 | 0.3 | $ 0 | |
Derivative liability | 8.6 | 8.6 | ||
Term Loan | 150 | 150 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Term Loan | 150 | 150 | 0 | |
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 500 | $ 500 | $ 400 | |
Line of credit facility, unused commitment fee percent | 0.25% | |||
Borrowings under Revolving Credit Facility | 100 | $ 100 | $ 100 | |
Line of credit facility, remaining borrowing capacity | 374 | 374 | ||
Unamortized debt issuance costs | 1.9 | $ 1.9 | ||
Proceeds from Lines of Credit | 100 | |||
Revolving Credit Facility | Line of Credit | Maximum | ||||
Debt Instrument [Line Items] | ||||
LIBOR variable rate spread | 2.00% | |||
Line of credit facility, unused commitment fee percent | 0.35% | |||
Revolving Credit Facility | Line of Credit | Minimum | ||||
Debt Instrument [Line Items] | ||||
LIBOR variable rate spread | 1.25% | |||
Line of credit facility, unused commitment fee percent | 0.20% | |||
Letter of Credit | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding, amount | 26 | $ 26 | ||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
LIBOR variable rate spread | 1.50% | |||
Designated as Hedging Instrument | Interest Rate Swap | ||||
Debt Instrument [Line Items] | ||||
Derivative, notional amount | $ 100 | $ 100 | ||
Derivative, fixed interest rate | 2.71% | 2.71% |
Operating Leases (Details)
Operating Leases (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (remaining) | $ 3.1 | |
2021 | 4.2 | |
2022 | 2.8 | |
2023 | 2.1 | |
2024 | 1.8 | |
Thereafter | 7.3 | |
Lessee, Operating Lease, Liability, Payments, Due | 21.3 | |
Less: imputed interest | (3.3) | |
Present value of operating lease liabilities | $ 18 | $ 19 |
Balance Sheet Classification (D
Balance Sheet Classification (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Total operating lease liabilities | $ 18 | $ 19 |
Other assets | ||
Operating lease, right of use asset | 14.5 | 15.6 |
Accrued liabilities | ||
Operating lease, current liability | 4.7 | 5.5 |
Other liabilities | ||
Operating lease, noncurrent liability | $ 13.3 | $ 13.5 |
Other, Net - Summary of other,
Other, Net - Summary of other, net (income) expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other, net (income) expense | ||||
Interest income | $ (0.1) | $ (0.4) | $ (0.3) | $ (0.7) |
Foreign currency exchange transactions | 0.2 | 0.5 | 0.2 | 1 |
Other | (0.2) | (0.2) | (0.2) | (0.6) |
Other, net (income) expense | $ (0.1) | $ (0.1) | $ (0.3) | $ (0.3) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 26.20% | 22.10% | 25.50% | 22.10% |
Statutory rate | 21.00% | 21.00% | ||
CARES Act deferred tax payments | $ 15 |
Retirement plan expense (Detail
Retirement plan expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Retirement Benefits [Abstract] | ||||
Defined contribution plan | $ 2.7 | $ 2.2 | $ 5.3 | $ 4.4 |
Multiemployer plan | 0.5 | 0.4 | 0.9 | 0.9 |
Retirement expense | $ 3.2 | $ 2.6 | $ 6.2 | $ 5.3 |
Employee Retirement Plans - Nar
Employee Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Retirement Benefits [Abstract] | ||||
Contributions to the multiemployer plan | $ 0.4 | $ 0.4 | $ 0.8 | $ 0.9 |
Expected full year contributions by the employer to the multiemployer plan | $ 1.7 | $ 1.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in accumulated other comprehensive loss (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Currency translation | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Equity beginning balance | $ (16.3) | $ (16.8) |
Other comprehensive income (loss), net of tax, before reclassifications | (0.7) | 0.4 |
Reclassification from accumulated other comprehensive income, current period, net of tax | 0 | 0 |
Reclassification from AOCI (net tax benefit of) | 0 | 0 |
Other comprehensive income (loss) | (0.7) | 0.4 |
Equity ending balance | (17) | (16.4) |
Unrealized loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Equity beginning balance | (3.4) | (0.9) |
Other comprehensive income (loss), net of tax, before reclassifications | (3.9) | (2.8) |
Reclassification from accumulated other comprehensive income, current period, net of tax | 0.6 | 0.1 |
Reclassification from AOCI (net tax benefit of) | (0.1) | 0 |
Other comprehensive income (loss) | (3.3) | (2.7) |
Equity ending balance | (6.7) | (3.6) |
Accumulated Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Equity beginning balance | (19.7) | (17.7) |
Other comprehensive income (loss), net of tax, before reclassifications | (4.6) | (2.4) |
Reclassification from accumulated other comprehensive income, current period, net of tax | 0.6 | 0.1 |
Reclassification from AOCI (net tax benefit of) | (0.1) | 0 |
Other comprehensive income (loss) | (4) | (2.3) |
Equity ending balance | $ (23.7) | $ (20) |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Stock-based compensation | $ 5.1 | $ 3.7 | $ 8.8 | $ 7.1 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Total weighted average restricted shares and antidilutive stock options | 1.6 | 1.7 | 1.6 | 1.7 |
Earnings Per Share Reconciliation [Abstract] | ||||
Net income | $ 33.3 | $ 31.8 | $ 64.9 | $ 59.5 |
Unvested restricted share participation | (0.3) | (0.3) | (0.5) | (0.7) |
Net income per common share – basic | $ 33 | $ 31.5 | $ 64.4 | $ 58.8 |
Net income - basic (shares) | 47.9 | 47.8 | 47.9 | 47.9 |
Net income - basic (EPS) | $ 0.69 | $ 0.66 | $ 1.34 | $ 1.23 |
Effect of dilutive securities: | ||||
Nonparticipating unvested restricted shares | $ 0 | $ 0 | $ 0 | $ 0 |
Nonparticipating unvested restricted shares (shares) | 0.5 | 0.5 | 0.5 | 0.5 |
Net income per common share – diluted | $ 33 | $ 31.5 | $ 64.4 | $ 58.8 |
Net income - diluted (shares) | 48.4 | 48.3 | 48.4 | 48.4 |
Net income - diluted (EPS) | $ 0.68 | $ 0.65 | $ 1.33 | $ 1.21 |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) $ in Millions | Jun. 30, 2020USD ($) |
Accrued liabilities | |
Loss Contingencies [Line Items] | |
Total accruals | $ 2.5 |
Environmental and workplace matters | |
Loss Contingencies [Line Items] | |
Total accruals | 1.3 |
Minimum | |
Loss Contingencies [Line Items] | |
Range of possible loss | 0.8 |
Maximum | |
Loss Contingencies [Line Items] | |
Range of possible loss | $ 1.6 |