Arcosa remains disciplined in capital deployment, prioritizing deleveraging while maintaining an open M&A pipeline for bolt-on acquisitions.
The company expects to reduce leverage to the target range of 2x-2.5x within 2-3 quarters, with a focus on organic and inorganic growth opportunities.
Management highlighted a robust pipeline of potential acquisitions, with strategic fit and timing considerations, including a planned $20-25 million investment to convert a wind plant to transmission structures.
The company is confident in its financial position to support growth initiatives and capital investments.
Progress and Strategic Significance of Aluminum Flat-Roll Launch
First commercial shipment of aluminum flat-rolled coils on June 16, 2025, marking a major milestone.
Expectations to reach EBITDA breakeven before the end of 2025, with ramp-up to full capacity in 2026.
Market environment has become more favorable due to a domestic supply deficit of over 1.4 million tonnes, with tariffs making imports more expensive.
Customer interest is high, with robust engagement from automotive and beverage can sectors.
The project leverages SDI's construction expertise, with a focus on low-cost, high-efficiency operations, and aims to capture market share in a significant domestic deficit.
The company anticipates exiting 2025 at 40-50% utilization, reaching 75% in 2026, with a focus on product certification and ramp-up.
Target raised its 2025 revenue guidance to $310-$320 million and adjusted EBITDA to $50-$60 million, reflecting strong momentum from new contracts and project expansions.
The company ended the quarter with $19 million in cash, a net leverage ratio of 0.1x, and over $190 million in liquidity, supporting ongoing growth initiatives.
Management emphasized that the robust growth pipeline, driven by domestic investment and government demand, positions Target well for continued expansion and shareholder value creation.
Dafinchi