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Section 1: 8-K (8-K)

Document
false0001739445 0001739445 2019-11-01 2019-11-01



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
 
November 1, 2019

400771783_arcosalogo-orangea06.jpg
Arcosa, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware
 
1-38494
 
82-5339416
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
  
 
 
 
 
 
500 N. Akard Street, Suite 400
 
 
 
 
Dallas,
Texas
 
 
 
75201
(Address of principal executive offices)
 
 
 
(Zip Code)

Registrant's telephone number, including area code: (972) 942-6500

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock ($0.01 par value)
ACA
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 7.01     Regulation FD Disclosure.

Arcosa, Inc. (the “Company”) has updated its presentation materials that management intends to use from time to time in investor presentations about the Company’s operations and performance. The investor presentation is attached as Exhibit 99.1 to this report and is incorporated herein by reference. In addition, the investor presentation will be made available on www.arcosa.com.

The information in Item 7.01 of this report (including Exhibit 99.1) is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing. Additionally, the submission of this Item 7.01 in this report on Form 8-K is not an admission of the materiality of any information in this Item 7.01 of this report that is required to be disclosed solely by Regulation FD.



Item 9.01     Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.
Description
Arcosa, Inc. Investor Presentation dated November 2019
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
Arcosa, Inc.
 
 
 
November 1, 2019
By:
/s/ Scott C. Beasley
 
 
Name: Scott C. Beasley
 
 
Title: Chief Financial Officer



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Section 2: EX-99.1 (EXHIBIT 99.1)

november2019irpresentati
Exhibit 99.1 Investor Presentation November 2019


 
Forward Looking Statements Some statements in this presentation, which are not historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about Arcosa Inc.’s (“Arcosa”, or the “Company”) estimates, expectations, beliefs, intentions or strategies for the future. Arcosa uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “guidance,” “outlook,” “vision”, and similar expressions to identify these forward-looking statements. Forward-looking statements speak only as of the date of this presentation, and Arcosa expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, except as required by federal securities laws. Forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations, including but not limited to assumptions, risks and uncertainties regarding achievement of the expected benefits of Arcosa’s separation from Trinity Industries, Inc. (“Trinity”; NYSE:TRN); tax treatment of the separation; failure to successfully integrate the ACG Materials acquisition, or failure to achieve the expected benefits of the acquisition; market conditions and customer demand for Arcosa’s business products and services; the cyclical nature of, and seasonal or weather impact on, the industries in which Arcosa competes; competition and other competitive factors; governmental and regulatory factors; changing technologies; availability of growth opportunities; market recovery; improving margins; and Arcosa’s ability to execute its long-term strategy, and such forward-looking statements are not guarantees of future performance. For further discussion of such risks and uncertainties, see “Risk Factors” and the “Forward-Looking Statements” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Arcosa’s Form 10-K for the year ended December 31, 2018, as may be revised and updated by Arcosa’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Non-GAAP Financial Measures This presentation contains financial measures that have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Reconciliations of non-GAAP financial measures to the closest GAAP measure are provided in the Appendix. Presentation of Financials The spin-off of the Company by Trinity was completed on November 1, 2018. The Company’s financial statements for periods prior to November 1, 2018 were presented on a “carve-out” basis. The carve-out financials of the Company are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company been an independent company during the applicable periods. 2 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
How to Find Us OUR WEBSITE NYSE TICKER www.arcosa.com ACA HEADQUARTERS INVESTOR CONTACT Arcosa, Inc. [email protected] 500 North Akard Street, Suite 400 Dallas, Tx 75201 3 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Agenda Company overview Financial highlights ESG update 4 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Arcosa at a Glance A new public company with an established operating history and financial strength $1.78B $235M $107M Revenue Adjusted EBITDA Net Income 3 ~5,800 85+ Infrastructure-related Employees Years of Operating History Segments Arcosa separated from its former parent company and became an independent public company in November 2018 Note: Revenue, Net Income, and Adjusted EBITDA based on midpoints of 2019 Guidance as of 11/1/2019 5 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Arcosa Overview Provider of infrastructure-related products and solutions positioned for growth Markets CONSTRUCTION ENERGY TRANSPORTATION Revenues $403M $831M $436M Adj.Segment 21% 15% EBITDA 14% Margin AGGREGATES WIND TOWERS BARGES SPECIALTY UTILITY COMPONENTS MATERIALS STRUCTURES CONSTRUCTION STORAGE TANKS SITE SUPPORT Revenues and Adjusted Segment EBITDA margin for the last twelve months ended 9/30/2019. See Adjusted Segment EBITDA reconciliation in Appendix. 6 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Construction Products Segment Overview PRODUCTS KEY FIGURES REVENUE (LTM 9/30/2019) by product type ($M) Construction $403M site support SPECIALTY CONSTRUCTION Revenue AGGREGATES MATERIALS SITE SUPPORT 73 (18%) 74 Natural sand, gravel Lightweight Steel & aluminum 21% trench shoring and limestone base aggregates; specialty Adjusted Segment EBITDA milled or processed products and Margin materials systems 330 (82%) As of 12/31/18: . Estimated proven and probable aggregate reserves exceeding 300 $30B+ Estimated annual Aggregates and million tons, excluding ACG market size specialty materials . Projected average reserve life of legacy business of at least 33 years Note: Aggregates and Specialty Materials grouped as “Construction Aggregates” in Financials. Construction Site Support classified as “Other”. See Adjusted Segment EBITDA reconciliation in Appendix. 7 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Energy Equipment Segment Overview PRODUCTS KEY FIGURES REVENUE (LTM 9/30/2019) by product type ($M) Storage tanks $831M and other WIND TOWERS UTILITY STRUCTURES Revenue 206 (25%) Storage 15% 625 Adjusted Segment EBITDA (75%) Margin RESIDENTIAL/COMMERCIAL/ INDUSTRIAL SCALE & FIELD AGRICULTURAL ERECTED STORAGE Utility structures STORAGE and wind towers $564M Backlog in Utility Structures and Wind Towers as of 9/30/19 See Adjusted Segment EBITDA reconciliation in Appendix. Adjusted Segment EBITDA includes $2.9M of bad debt recovery recorded in 1Q 2019. 8 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Transportation Products Segment Overview PRODUCTS KEY FIGURES REVENUE (LTM 9/30/2019) by product type ($M) $436M Barges FIBERGLASS TANK BARGES HOPPER BARGES Revenue COVERS 195 (45%) 14% 240 Adjusted Segment EBITDA (55%) RAILCAR INDUSTRIAL & Margin RAILCAR AXLES COUPLING MINING DEVICES COMPONENTS $5B+ Components Estimated annual market size $364M Backlog in Barges as of 9/30/19 See Adjusted Segment EBITDA reconciliation in Appendix. 9 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
First Year Progress We celebrated our one year anniversary as a public company on November 1st and remain encouraged by our progress and focused on the future Building our new Arcosa culture Executing on our Stage 1 Priorities  Grow Acquired ACG Materials + 3 additional Construction complementary acquisitions to expand regional  Entrepreneurial and growth-minded Products footprint  Focused on integrating ESG Improve  Grew Adjusted Segment EBITDA margins from 10% Energy initiatives into our long-term strategy in 2018 to 15% in LTM 2019 Equipment  Turning focus to growth in adjacent product lines margins  Performance accountability  Ramped up barge facilities to grow revenue ~80% in Expand 2019, with healthy backlog headed into 2020 Transportation  “We win together” Products Operate a flat  Streamlined corporate structure to reduce layers corporate structure See Adjusted Segment EBITDA reconciliation in Appendix. 10 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Long-Term Vision for Arcosa Integrate Environmental, Social, Improve and Governance Reduce long-term returns initiatives (ESG) into our the complexity and on invested capital long-term strategy Grow cyclicality of the overall in attractive markets business where we can achieve sustainable competitive advantages 11 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Agenda Company overview Financial highlights ESG update 12 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Third Quarter 2019 Financial Results Reported strong year-over-year growth across key metrics 3rd Quarter, ended September 30 ($M’s) Year-to-Date, ended September 30 ($M’s) Adjusted Adjusted Revenues Net Income Revenues Net Income EBITDA EBITDA +18% +35% +40% +19% +35% +33% 445.0 33.0 64.9 1,290.0 93.7 187.6 378.6 1,086.0 24.5 141.1 46.4 69.3 32.7 92.2 48.0 3.2 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 Margin Margin Adjusted Reported Adjusted Reported 12.3% 14.6% 13.0% 14.5% See Adjusted Net Income and Adjusted EBITDA reconciliations in Appendix. 13 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
ACG Acquisition Update Integration is progressing well and; ACG will be a platform for additional value creation in our Construction Products segment Levers for additional value Geographic diversity End market diversity creation ACG Footprint Aggregate mines ACG End Markets Production facilities End market growth Corporate HQ Other Incremental specialty product Building Products development Agriculture Organic capital investments Infrastructure . 24 active mines Energy Bolt-on acquisitions Infrastructure . 5 production facilities . Acquisition closed in December 2018 for a $309M purchase price Operational improvements through . LTM Revenues and Adj. EBITDA of $152M and $32M, respectively, at time of acqusition1 shared best practices 1 Estimated Last Twelve Months (LTM) ended 08/31/2018. See Adjusted EBITDA reconciliation in Appendix. 14 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Barge Recovery Continues Recent orders have been strong and production ramp up is on track . Barge backlog up 58% year-to- Inland Barge business date Backlog Value Trend ($millions) . Year-to-date orders of $327M, 565 representing a book-to-bill ratio of 1.7 times 454 . More than half of Q3 orders 416 were for dry barges, showing 384 373 364 early signs of a potential 350 recovery in the dry cargo 319 market. Agricultural tariff uncertainty remains a headwind 251 231 198 210 . 2020 barge backlog of $258M 177 provides solid visibility into next 126 125 year at improved margins 120 110 91 98 . Began delivering barges from re-opened Louisiana facility during Q3 as planned 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 15 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
2019 Revenue and Adjusted EBITDA Guidance We expect to be at the high end of our Adjusted EBITDA guidance range of $230-$240 million Revenue Guidance Adjusted EBITDA Guidance $M’s $M’s +26% +22% 230-240 1,750 – 1,800 1,460 187 2018 2019 Guidance 2018 2019 Guidance Maintained Maintained See Adjusted EBITDA reconciliation in Appendix. Revenue and Adjusted EBITDA growth calculated using mid-point of 2019 Guidance range. Guidance ranges as of November 1, 2019. 16 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Cash Flow and Liquidity Highlights We have the liquidity to fund our disciplined growth plans Cash Flow and Balance Sheet Highlights Available Liquidity at end of Q3 ($M’s) 389 .$219M of YTD September 2019 Operating Cash Flow Cash 128 .$108M of debt at end of Q3, substantially all at a fixed rate of ~4% through 2023 .Positive net cash position, after subtracting debt Revolver 261 .Long-term net debt to EBITDA target of 2 to 2.5x Capacity provides significant capacity for growth Q3-19 17 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Capital Allocation We have continued to follow a disciplined approach to allocate capital across organic investments, acquisitions, and return to shareholders Return of capital Organic investments Acquisitions to shareholders . $61M of Capital Expenditures YTD . $31M of acquisitions YTD: . As of 3Q19, repurchased ~$14 and expect $80-$85M of CapEx in − 3 aggregates acquisitions to million of shares at an average 2019 expand geographic footprint in price of $28.77 per share under Company’s $50 million . Full year expectations up slightly due TX and Louisiana authorization since its approval to new growth projects to expand − 1 marine winch acquisition to in December 2018 product lines and capacity in expand our product line in Construction Products and utility marine winches . Paid $7.4M of dividends YTD structures . Active pipeline across aggregates, − ~$60M Maintenance specialty materials, and utility − ~$20-$25M Growth Projects structures . All CapEx projects expected to meet high return threshold and compete for available capital 18 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Agenda Company overview Financial highlights ESG update 19 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
ESG Update We recently completed a Materiality Assessment that identified ESG topics that will be integrated into our long-term strategy Our Our People & Our Environment Products Communities Employee Health and Safety Energy Management Product Use and Quality Diversity Air Quality Talent Management GHG Emissions Community Relations Water and Wastewater Management Land Management Governance and Business Ethics Our Materiality Assessment was based primarily on SASB standards, with additional input from stakeholders and other sustainability standards 20 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Incentive Compensation Plans Arcosa’s incentive plans align compensation to long-term shareholder value creation while driving accountability to the business level Award Type Focus Performance Objectives Target CEO Pay: 83% at Risk(1) Adjusted EBITDA Short Term Cash 1 year operational and Incentive Business-specific metrics Plan (STI) financial targets (e.g., EBITDA, Working Capital, Margin 17% Improvement, SE&A Reduction) 26% Base TBRSU Equity: Performance-Based Return on Capital 17% Restricted Stock Units STI Cumulative EPS (PBRSU) Long Term Long term Incentive shareholder value Plan (LTI) creation 40% PBRSU Equity: Time-Based Share Price Restricted Stock Units (TBRSU) (1) Annualized target compensation, excluding one-time sign-on LTI grant upon being named future CEO 21 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Additional ESG Information We have a number of initiatives already underway to integrate ESG into our long term strategy Our Our People & Our Environment Products Communities . Safety Excellence program rolled out to . Instituting sustainability program to track . Leading producer of wind towers for plants environmental metrics renewable power generation, with over 12,000 towers produced . Instituted plan to track and improve . Integrating environmental initiatives into diversity long-term strategy . Leading manufacturer of inland barges, which have valuable fuel efficiency . Ethics Training and Certification . Arcosa headquarters is LEED Gold, advantages over truck and rail programs Energy Star Certified . Trench shoring products promote . Extensive community engagement worker safety across our plant locations and corporate offices . Talent development program to enhance the skills of our team 22 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Our Products Arcosa’s products are used in important environmentally friendly industries Barge transportation is a clean, efficient mode of freight Wind Energy reduces carbon dioxide emissions transportation Tons of CO2 per Million Ton Miles CO2 Emissions Avoided through Wind Energy Million Metric Tons Barge 15.6 201 189 Rail 21.2 159 132 Truck 154.1 126 115 97 per Gallon of Fuel 83 Ton Miles Traveled 65 Barge 647 50 37 22 Rail 477 17 9 11 4 6 7 2001 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 Truck 145 As a leading wind tower manufacturer with over 12,000 towers produced, Arcosa’s inland barges play a critical role in the clean and efficient Arcosa plays an important role in the development of wind power transportation of freight Sources: American Wind Energy Association, National Waterways Foundation 23 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Appendix


 
Reconciliation of Consolidated and Combined Adjusted EBITDA ($’s in Millions) Three Months Ended Nine Months Ended Full Year (unaudited) September 30, September 30, 2019 Guidance 2019 2018 2019 2018 Low High Revenues $ 445.0 $ 378.6 $ 1,290.0 $ 1,086.0 $ 1,750.0 $ 1,800.0 Net Income 32.7 3.2 92.2 48.0 101.0 113.0 Add: Interest expense, net 1.3 - 4.1 - 5.0 5.0 Provision (benefit) for income taxes 9.2 3.4 26.1 18.2 30.0 33.0 Depreciation, depletion, and 21.7 16.8 63.2 49.7 92.0 87.0 amortization expense EBITDA $ 64.9 $ 23.4 $ 185.6 $ 115.9 $ 228.0 $ 238.0 Add: Impairment charge - 23.2 - 23.2 - - Impact of the fair value mark up of 0.4 - 2.0 - 2.0 2.0 acquired inventory Other, net (income) expense (1) (0.4) (0.2) - 2.0 - - Adjusted EBITDA $ 64.9 $ 46.4 $ 187.6 $ 141.1 $ 230.0 $ 240.0 Adjusted EBITDA Margin 14.6% 12.3% 14.5% 13.0% 13.1% 13.3% (1) Included in Other, net expense was the impact of foreign currency exchange transactions of $(0.3) million and $0.0 million for the three months ended September 30, 2019 and 2018, respectively, and $0.7 million and $2.2 million for the nine months ended September 30, 2019 and 2018, respectively. Since these amounts were not included as adjustments to EBITDA prior to December 31, 2018, Adjusted EBITDA and Adjusted EBITDA Margin for the three and nine months ended September 30, 2018 do not agree to amounts previously reported. GAAP does not define “Earnings Before Interest, Taxes, Depreciation, Depletion and Amortization” (“EBITDA”) and it should not be considered as an alternative to earnings measures defined by GAAP, including net income. We use this metric to assess the operating performance of our consolidated business, as a metric for incentive-based compensation, and as a basis for strategic planning and forecasting as we believe that it closely correlates to long-term shareholder value, and we believe this metric also assists investors in comparing a company's performance on a consistent basis without regard to depreciation, depletion, and amortization, which can vary significantly depending on many factors. We adjust consolidated EBITDA for certain non-routine items (“Adjusted EBITDA”) to provide a more consistent comparison of earnings performance from period to period, which we also believe assists investors in comparing a company's performance on a consistent basis. “Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by Revenues. 25 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Reconciliation of Adjusted Net Income ($’s in Millions) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net Income $ 32.7 $ 3.2 $ 92.2 $ 48.0 Impairment charge on businesses subsequently divested - 23.2 - 23.2 Tax impact - (1.2) - (1.2) Impact of the fair value mark up of acquired inventory 0.4 - 2.0 - Tax impact (0.1) - (0.5) - Impact of U.S. tax reform - (0.7) - (0.7) Adjusted Net Income $ 33.0 $ 24.5 $ 93.7 $ 69.3 GAAP does not define “Adjusted Net Income” and it should not be considered as an alternative to earnings measures defined by GAAP, including net income. We use this metric to assess the operating performance of our consolidated business. We adjust net income for certain non-routine items to provide investors with what we believe is a more consistent comparison of earnings performance from period to period. 26 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Reconciliation of Adjusted Segment EBITDA ($’s in Millions) Three Months Ended Nine Months Ended Last Twelve Months Year Ended September 30, September 30, September 30, December 31, (unaudited) 2019 2018 2019 2018 2019 2018 Construction Products Revenues $ 115.9 $ 72.6 $ 337.5 $ 226.7 $ 403.1 $ 292.3 Operating Profit 16.5 15.3 45.3 45.3 50.4 50.4 Add: Depreciation, depletion, and amortization 9.7 5.2 27.5 15.4 34.0 21.9 expense Segment EBITDA 26.2 20.5 72.8 60.7 84.4 72.3 Add: Impact of the fair value mark up of acquired - - 1.4 - 2.2 0.8 “Segment EBITDA” is defined as segment operating profit plus inventory depreciation, depletion, and amortization. GAAP does not Adjusted Segment EBITDA $ 26.2 $ 20.5 $ 74.2 $ 60.7 $ 86.6 $ 73.1 Adjusted Segment EBITDA Margin 22.6% 28.2% 22.0% 26.8% 21.5% 25.0% define Segment EBITDA and it should not be considered as an alternative to earnings measures defined by GAAP, including Energy Equipment segment operating profit. We use this metric to assess the Revenues $ 210.2 $ 198.4 $ 623.6 $ 573.1 $ 830.6 $ 780.1 operating performance of our businesses, as a metric for incentive-based compensation, and as a basis for strategic Operating Profit 26.6 (13.2) 79.8 12.5 95.9 28.6 planning and forecasting as we believe that it closely correlates Add: Depreciation and amortization 6.9 7.4 21.2 22.6 28.3 29.7 to long-term shareholder value, and we believe this metric also expense assists investors in comparing a company's performance on a Segment EBITDA 33.5 (5.8) 101.0 35.1 124.2 58.3 consistent basis without regard to depreciation, depletion, and Add: Impairment Charge - 23.2 - 23.2 - 23.2 amortization, which can vary significantly depending on many Adjusted Segment EBITDA $ 33.5 $ 17.4 $ 101.0 $ 58.3 $ 124.2 $ 81.5 factors. We adjust Segment EBITDA for certain non-routine Adjusted Segment EBITDA Margin 15.9% 8.8% 16.2% 10.2% 15.0% 10.4% items (“Adjusted Segment EBITDA”) to provide a more consistent comparison of earnings performance from period to Transportation Products period, which we also believe assists investors in comparing a Revenues $ 120.6 $ 108.5 $ 333.4 $ 289.3 $ 435.5 $ 391.4 company's performance on a consistent basis. “Adjusted Operating Profit 11.2 13.5 32.1 35.2 45.3 48.4 Segment EBITDA Margin” is defined as Adjusted Segment Add: Depreciation and amortization EBITDA divided by Revenues. 4.3 4.2 12.0 11.7 15.8 15.5 expense Segment EBITDA 15.5 17.7 44.1 46.9 61.1 63.9 Add: Impact of the fair value mark up of acquired 0.4 - 0.6 - 0.6 - inventory Adjusted Segment EBITDA $ 15.9 $ 17.7 $ 44.7 $ 46.9 $ 61.7 $ 63.9 Adjusted Segment EBITDA Margin 13.2% 16.3% 13.4% 16.2% 14.2% 16.3% Operating Profit - All Other $ - $ (0.1) $ - $ (0.1) $ - $ (0.1) Operating Profit - Corporate (11.5) (9.1) (34.8) (24.7) (42.2) (32.1) Eliminations - - - - (0.3) (0.3) Corporate Depreciation 0.8 - 2.5 - 3.0 0.5 Adjusted EBITDA $ 64.9 $ 46.4 $ 187.6 $ 141.1 $ 233.0 $ 186.5 27 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
Adjusted ACG EBITDA reconciliation ($’s in Millions) (unaudited) For the Trailing Twelve Months Ended August 31, 2018: Revenues $152.0 Net Income (1.8) Add: Interest expense 16.6 Provision (benefit) for income taxes (3.9) Depreciation, depletion, and 15.4 amortization expense EBITDA $26.3 Add: Other Adjustments 5.7 Adjusted EBITDA $32.0 Adjusted EBITDA Margin 21.1% “Adjusted ACG EBITDA” is defined as ACG’s net income plus interest expense, income taxes, depreciation and amortization, and other one-time or non- recurring expenses, including management fees, debt refinancing fees, and non-recurring professional fees. Adjusted ACG EBITDA is not a calculation based on generally accepted accounting principles. The amounts included in the Adjusted ACG EBITDA calculation, however, are derived from amounts included in the historical statements of operations data. In addition, Adjusted EBITDA should not be considered as an alternative to net income or operating income as an indicator of ACG’s operating performance, or as an alternative to operating cash flows as a measure of liquidity. We believe Adjusted ACG EBITDA assists investors in comparing a company’s performance on a consistent basis without regard to depreciation and amortization and other expenses, which can vary significantly depending upon many factors. 28 / Moving Infrastructure Forward — Investor Presentation, November 2019


 
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