Arcosa (ACA) 29 Apr 202020 Q1 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Arcosa Incorporated First Quarter 2020 Earnings Conference Call. My name is Nicky and I will be your conference call coordinator today.

As a reminder today's call is being recorded.

Now, I will like to turn the call over to your host, Gail Peck. Ms. begin. may you Peck,

will Thank slide With joining website Carrillo, me Scott are press our question-and-answer CEO; everyone. A on remarks XXXX of posted for copy President first this earnings www.ir.arcosa.com. and yesterday's session A CFO. call. today and Beasley, Relations their you morning, prepared our today. the for release quarter and follow presentation Good Investor are call Antonio morning's

weeks. in non-GAAP presentation included available Principles. replay release. accessing tab. Instructions website comments and today's slide accordance contain webcast two will for the A financial our included A Events Generally prepared Today's slides press year Reconciliations appendix the available the the Accepted presentation. one the are for be replay the for measures Accounting measure are measures of of number closest will the GAAP be that News under to on next of call financial the in and of with in have been replay not

you also Private the forward-looking contains as statements Act me conference call that by Let Litigation XXXX. defined Reform of Securities today's remind

for Forward-looking statements could materially actual refer we yesterday, including later today. uncertainties that the such first press and are XX-K, risks expected earnings the differ XX-Q more Please quarter SEC and to release to filed these to forward-looking statements. company's filings risks and uncertainties from the to our results be for cause on subject information our filed Form Form

the to call Antonio. over would I like to turn now

Scott discuss quarter later Arcosa's highlights financials. update our business you current the results quarter and of thank you conditions while the you within you, on will discuss line joining outlook. our with morning call provide and for Thank quarter expectations, business and first Gail. to the today's first our performance first markets, I will Good

are from slide call. to X. There take away I several today's you like messages to move key Please would

the within to operate First, business COVID-XX well environment. Arcosa's continues

We operational. business and our have are essential been facilities designated an

the priority Second, safety which like and and our quickly implemented place. our teams and our how plans these employees protect and health of business in to in protocols protocols effectively we of all have were community This for continuity I would and we operate. recognize to is have put adopted the

strong strong lines we while flexibility our the performance in Arcosa's balance Third, financial shows some backlogs good that significant power and some earnings for have quarter time fourth, the uncertain substantial demand expect us provides opportunities we fundamentals capacity and for product with our others this of growth And and sheet future. to provide visibility. continue the in for have see lower we strong

agenda find X, page the for you On call. can today's

crisis discussing Let's start the slide X. COVID-XX on our priorities during by health

community that and at employees consistent our our the To is and we guidelines. First the of and safety which top immediately operate. facilities X,XXX with in put end, we foremost, health our priority in place safeguards CDC

our and also protocols making from authorized do We so. for are and office staff once how our work it's to for to we return safe implemented home offices plans

in sectors, customers' have we quarter And infrastructure the missed continued we the our have plants beat. not essential an As nation's a to first results, every can supplier you meet needs our from to operating see as business.

from expect of EBITDA about flow. review and roughly to $XXX million a is to flexibility more than financial level free just in half liquidity navigating high are sheet availability. ago. key cash balance having Our million only we cash were months annual greater downturn. economic of will few in strong experience position have and through advantages detail, successfully an strong know even a revolver but is this competitive they Net we strong close Scott now I $XXX from debt our

postponed become non-essential strong they available. to make prices balance with have to actions resources acquisitions taken for ensure potential have slowdown. are strategic prepared we we us Additionally, capital a operating attractive the provides a on Arcosa's should at costs expenditures and sheet basis reduce to corporate extended and disciplined

turn for results. let's at to a look company-wide the slide Now X

$XXX performed leverage For business company this the All extremely to first well growth. EBITDA quarter, to reflecting with the XX% revenues continue achieve. XX% the up million, was million, $XX Adjusted considerable of of contributed lines year-over-year. three operating up we

the within is profit Adjusting Energy of for $X last lines contributed ahead of benefited acquisition million recovery from this business Construction the contributor This of EBITDA debt being revenue quarter's all the to Products which Cherry, performing the segment largest recent growth, year a bad with and growth. Equipment to plan.

and utility intake businesses healthy structures the Importantly, both quarter. saw in order our barge first

business you return give the individual will and you will discuss then outlook. to lines Scott? additional more details market I on our and color provide Scott

capital Thank you, good our financial I'll through allocation then more in and walk the start results and on the and presentation XX and Antonio, discuss our morning depth. everyone. plans slide of quarter strength from

points grew XX% $XXX and well EBITDA margins increased and million. exceeded performed year's to more basis revenue our XX.X% Products Construction to last than than during the quarter quarter. with first Starting acquisition businesses million better legacy to XXX XX% EBITDA $XX.X adjusted expectations. the increased Cherry The

and natural Worth specialty as throughout robust Volumes businesses, aggregates end our legacy were Dallas-Fort remained for in lightweight business and higher Texas markets quarter. our the both aggregates

expectations. our acquisition Cherry the exceeded Additionally

an margin strong the exposure. and still oil small part revenue is the The job and softness gas but a the Texas and exposure of team remains that the continued in our in with during serving was weak the excellent plants solid in The Houston segment even did revenue Oklahoma segment aggregate construction our And and West improvements the infrastructure only market spot posted executing integration. segment.

$XXX once for our utility recovery a volumes and Energy Slide the which revenue X% in headwind was wind pricing EBITDA roughly million structures lower both quarter. structures prices even debt XX, Higher drove for utility were given Equipment and more that on revenue in in a to towers increased steel grew pass-through to XXXX. impressive Moving adjust flat onetime bad adjusted was we

team the a of The to as well but in first wind run the of was larger that higher quarter, heading into we the last with of a out in line laid quarter execute a unit Pricing delivery and than delivered year. count year's successful expected continued XXXX tower expectations lower the type. first quarter towers than including the

Utility structures continues We very margins. product performing strong line. delivered to be volumes a improved with higher

tank storage year-over-year tanks. Our business shipments and propane lower declined residential of on commercial

from line first the a we to its of work with and Energy $X.X improvements the which $XX.X assets in onetime Equipment structures. an had was utility on was financial expectations. bad component In excellent EBITDA impaired continued supporting Adjusted the segment loss by as our $X.X XXXX we Overall quarter. in helped was million EBITDA XXXX debt recovery. on plant lean progress quarter railcar recorded million operational transitioned million and

significantly in Turning XX% revenues grew to Transportation XX% Slide quarter and EBITDA. the XX. of Products growth profitability adjusted in XXXX. revenues Barge first had and versus growth

In the incurred team had expanded year's start-up our operating backlog We improved have costs margins and we hitting in business Barge did outstanding not plant from significantly did the first XXXX. reopening pricing schedule. versus and that we last production job The an Louisiana quarter. our

the We excellent deliver visibility in the in the which gives of quarter, backlog to $XXX total approximately received That the execution us quarter in million, to year. strong order new XXXX. backlog bringing healthy. to will orders for addition $XX be the continued XX% rest million of In activity of

The revenue last rail $XX to year's by components dropped million first be continues business weak and quarter. from

out to build and take respond non our We we to lines our facilities to have product our for new had at will additional forging using continue foundry railcars actions capabilities. to lower and demand railcar

million to XX had quarter Slide free at has that sheet the an our to the highlights. of turn profile committed of discuss revolver additional up and million to of $XXX balance our businesses end now we will cash The and cash flow capacity. I million of strong of liquidity $XXX the made liquidity of contributed $XXX

cash million the our the in of through number we primarily X-quarter we was were in was advanced year. expectations It payments Free working received of because a fourth our $XX quarter XXXX. heading of average, into line that below flow with

increases on $XXX measure, credit we or our credit facility we a borrowed material receivable risks quarter as not concern our accounts the have During any in that revolving but yet us. seen million precautionary overdue

the to about leverage attractive our us through investment manage pursue which to challenging the one of right. disciplined growth characteristics when low our will economic is Slide time as well company is enable XX, Turning as scenarios

Since our the late XXXX, major debt-to-EBITDA. using products we approximately in and primarily acquisitions spinoff we've construction operations cash completed net X.X with quarter two ended from

uncertainty cash during you conserve XX. to period allocation of have capital actions this XXXX which aggressive outlook adjusted taken for Slide see our and on also have We

That set criteria million $XX range more $XX return this in to maintenance and First, delayed in CapEx, million of expect our previous approximately growth from a still we guidance. to nonessential projects select environment. invest million CapEx million our $XX meet uncertain have down that plus year $XX of a includes a range of now

of continue aggregates bulk CapEx And our businesses. in in Specialty The utility growth our structures. and be acquisitions to reserve will Materials

total In with also our taken in spending, reduce steps SG&A revenue. in CapEx, addition to keep costs to to our SG&A reducing we've order our line

receivables, implemented we've payables. reduce Finally, requirements inventory to initiatives number a our and of working capital working across capital

in disciplined also acquisition will We our strategy. be

complementary adjacent In in business a Cherry, product a to this addition to acquisition expand line. $XX of million into we completed structures Florida traffic

our manufacturing as attracted of infrastructure-related with the are to Equipment. business the other lines We the market Energy product drivers well within as synergies

this expand to product into manufacturing using expertise new across other able our North be line to expect and America. We geographies, footprint,

maintain return Finishing $XX per currently year. roughly shareholders, $XX still repurchase on capital And to of share our authorization. we we our to plan have million at million, remaining up with dividend

the Antonio. turn to now back will I call over

Thank you, Scott.

quarter experienced But have resulting do to And our For the of that. impact seen lines. we indications downturn some disruption we product the of our some minor first COVID-XX. from already expect economic only business

be our in to momentum the many by continue We of we businesses. have encouraged

to However, uncertain us guidance. the suspend has caused very earnings economic fluid and environment

outlook to intend you We today. share Arcosa's with

each understand So currently we're you the what experiencing lines. business in of can

the available Given can the today. length on in and of uncertainty I with the information as the try transparent economy, to the will slowdown as I be depth

the essential states very Construction In service. page start considered most to XX, first let's Turning is with well an construction Construction quarter. Products. performed in

demand such, has held well. As up

In acquisition recycled business and have aggregates addition of to the new its Cherry ahead plan. performed

environment. We customers have rental CapEx to in companies, are since the construction site delayed most softness or this seen delay have who business, cut on back of the some support begun in

on line includes product only XX% for which forma of accounted Cherry. revenue group pro this a Still basis

quarter, supplying projects While underway. well in Construction been performed Products have already were the the business first that we

weaker in demand move expect we market. construction we sector, especially As in forward, the residential the

does this it line is business have benefit much not times environment. and to this the forecast harder operates shorter As in lead of with backlog,

business quarters the and third Also, the second are line. for busiest this

increase potential is which in state the there predict. of a challenging particularly medium effect the long-term. stimulus slowdown and of talk to On note, in is Arcosa, the and additional spending a benefit infrastructure So would bill positive

Turning have which let's to in its confidence slide XX, we stands disclose us gives $XXX much better and Equipment at backlog, where the segment, XXXX million expectations. performance our given Energy visibility

wind of the backlog XX% and million, The structure utility utility revenues -- in those tower units business which XXXX. of $XXX have over generated combined represents business businesses

there the credit, of our backlog unrelated pressuring fourth that some the production unfilled COVID-XX main our such be would business, to the the in While as schedule outside covers wind spots are in most And are tax expiration factors of XXXX. potential the quarter. impact some tower production

our And utility And market XXXX to continues intact, in This based remains show outlook active. what know the strong remains market end are for we nature. structures growth growth demand limited today. and drivers long-term supply. on The

are Energy segment revenue line, Equipment of XXXX. softness tank which is to at in the product we in seeing storage million $XXX Where the some contributed

business. have more the limited on the based backlog Here nature we of

economic and and impact the expect business an an do and have gas since has markets, both exposure housing Mexico. the to We oil some in downturn to this new U.S.

market that tank group the other and has to exposure most revenue. oil the which to than of gas it's dynamics, note X% hand, On important less the the represents large

market turn our -- with Please conditions. business is components challenging have a products but providing delaying to slide is significant business barge dealing growth, mixed conditions our is XX. Transportation very

in we new have past said to sources XXXX. storage estimated is railcars respect And continues the decline by of number components, to in the industry in increase. With for to XX% cars pre-COVID, demand idle as the by

have expectations the for So industry worse. gotten

on to previous incremental have We the marginally expectations. planned negative is slowdown, so significant our impact a

products. our we same we successfully adding size right time, are continue costs. actions take on At However, non-rail to working the other to

and The our with to the historic hand, for significant in order an average other the $XX quarter barges. activity. activity On prices fundamentals continues increase age remain had additional liquid order could in steel strong barge first million Overall, orders. both positive, toward dry business market encourage decline aging the and lows with fleet in

watching, in that oil for of sharp of we line recent a provides concern $XXX this a point us of sight backlog the are million good prices is with decline While business. our

continuing also the demand marine which new to in replacement markets. are components We and our business strong serves see both

On grow is offsetting on we based to for our at least for solid balance, components. transportations have XXXX revenue our the declining outlook for the backlogs in XX% confidence

the Slide turn XX. embedded assumptions outlook. Please to Now let's discuss the in current

that note please situation First COVID-XX extremely fluid. is

lays slide this of we understand next So how you out assumptions thinking few about to help the we're have some months. the

is continue found. operate as do most but essential a expect the same to be an Overall, until virus at show We we expect emerge time to the to from force business. continue to disruptive the vaccine reports could country a lockdown

for future. focused remain vigilant protocols the So we on foreseeable established following all will and

delays Our Separately, with be line our we're planned leader conditions each shutdowns, resulting to biggest adjusted plan market time. be costs production unit around We should customers we're will the suppliers. conditions each from expectations. revenue working costs to in to the If seeing. in real reflect potentially with risk either our or evaluate change, business could continuously reduce business our

lean confidently already be businesses Also further. actions have ahead we leading downturn to get we the of that and are the taking We news additional are. costs my in even quickly learned cost to experience flexibility I the before critical prepared and of changes I times costs to uncertainty, can corporate as great are but Our key say is it through reduce every is day. act curve must outlooks materializes. operating From

right employees, during our for to we stakeholders. to will this and the apply thing stay our is communities principle guiding Another time uncertain and our other true values do

we ours a a or and keeping a healthy. is committing environment to Finally, challenging in break strong balance factor business make sheet are

M&A We front disciplined plan a the an on in opportunistic to remain active basis. on manner

stronger Our that leaner will we confidence low a emerge leverage gives me and ample liquidity company.

ESG Turning us to XX. Slide to priority for a forward. be continues going

for of for During opportunity communities. publish our developing ways supporting time our we We the our setting baselines had to sustainability this have and the time, new plan remain develop company. committed local the same to to we first report XXXX. At goals

Please XX. Slide turn to

in plan, markets, While the cyclicality of long-term is our of invested current capital uncertainty, has returns to delay and which integrate create everything it the improve business, impact some our reduce initiatives some may into and and COVID-XX ESG changed grow on we long-term not attractive do. complexity our

day efficient continue towards more We to working making leaner, while advance on a these initiatives company. every Arcosa

I will the to questions. call now open

question Instructions] [Operator Davidson. Please ahead. D.A. our we'll with And go take Thielman first from Brent

Thank Congratulations great a on you. quarter.

Thank you.

this the forward. strong levels And pricing you is in given I that, these of think Transportation of backlog rail do that's margin the margins assume sort But just year? that Products you to you. can sort through fact embedded The really the working continue going against inland maintain going and barge despite within

in for as Scott. is backlog, no changes first QX start-up lower This quarters question. the expect excellent it relatively margins mix would and be then There'll The to back execution, the really better in for costs little and from But mix the and Thanks consistent because some a that the be we pick largely year. strong of the like unevenness the the in answer Brent. full but barge would through year. full up quarter operational might QX Hey, for then quarter-to-quarter. is pricing looks QX. barge be yes

does delays slower processes still book-to-bill Is guess here. a this in of you terms XQ, business or then COVID, Does – seeing some or good to follow-up move in ultimately pretty bid are of that XQ things quarter And bid is The and decisions Okay. there. my – that curious because kind of Just utility wind. seeing forward? but activities? on what I little backlog move to you're

this businesses. There different Antonio. Brent, are is

good of we the backlog of So orders are let fourth receive each to wind from have seeing our we before On of me about And order end the a inquiries talk I as think said, some I've we and individually. expect customers one year. covers quarter. several most towers,

I a But installation all we past. the fields had of installing, slowed So towers because expiration little significant cetera. around. amount I of think et It's wind on the the this of a of tax the disruption there's than credit, with come the down the in bit wind movement going expect very said. in busy year. a The some lower there's in orders tower to issue Based do are margins as we've of in in orders it

that. So it's to remember important

for to It's a our half in -- of I are years I in rather our we on used seeing first it's have let's On have like where it. we're okay. afraid to project of and And past, project-based of customers I've those the operate we and in for said business how business. a going it's blanket order XXXX, come than mean, a bid past. the projects become we that most will the not as in five the That's say,

We and with dealing be are that. it by we're to going encouraged

continue these the of April, was where people but you to were we products? could to It's, deliver. biggest get able getting. we deliver worried be of uncertainty a both not biggest biggest were Utility business we different question and activity. the would to very the March, structure structures on the at and Inquiries the we getting be wind quarter, strong. question delays, utility we would highest see is to strong was the That especially, continue continue was beginning are at not about to during very the you were on the tell, question I the point, order end going

you environment bit we're So with. that that little a of tells the dealing is -- I think

very you Thank much. helpful. That’s

Majors comes with Next from ahead. go question Susquehanna. Bascome Please

the and products I aggregates for we could guys. the questions, hoping revisit my taking a whole. maybe for was outlook as segment Thanks Yes. construction

impacted commented a the it's seasonally business. You the it's not going summer, to is shutdowns which that a disproportionately backlog in be and business strong by

But that stress to might of your in Thank you. be is of test about, worst-case there any minds way risk/reward to in some your scenarios EBITDA Just of, as underwrite one kind the largest to trying think play look kind scenarios of you've frame done? here, we in generators.

Sure. you, Thank Bascome.

where one reason you is a I as really Shoring specialty cancellations, they're rental sell them me we for aggregates sense. the these no has that it's different. Shoring lot And Shoring now for a we everyone of inside other seen that The -- companies, is to materials now, more CapEx business or uncertain The delays and slowdown. the the Let are some that three like And and very the cash give business. and more like company doing, in orders. times businesses business is conserving business mentioned we've remarks. delays seen -- in we've we my every The really

telling for And right orders our what or we're quarter quarter. the now, for us customers the third fourth are delaying is, the

the On and piece seeing. that's we're aggregate what

we and or in quarter. customers some business pickup especially. the uncertainty When around ask expect and expect reason a the would experts our the you third you -- I industry this tell the around segment construction people do So what you

pickup people in the quarter. fourth expect Some a

and think how be. going The don't how anyone is reality because And is really don't we I reality this that withdrew know. that, was we guidance, reason our deep slow we is know. to the The that don't knows

before. We're today. continuing working we're already work are on that to working We projects

started delays, stress. second piece quarter, the second strong. any of the not seeing We're in any the signs we pretty quarter in yet, Even aggregates

Washington pain did There's states a activity of some in are felt and the states little And We activity stop. where construction are little few big those and stop. did especially seeing feeling pain. California a where we're that we a projects, construction the where

What we economy. We slowdown, comes activity other if like have construction would But the the costs. not reason a into every expectations. be essential And we ceases lockdown go that's case, have to together extreme in scenario with is, an back. I I for is adjust we mean, worst-case whatever that's that, -- construction down, virus really what and slows business, our our

going our at is and adjust Our main look this priority moment. and pricing, is which business opportunities. That's move of one characteristics for the the mindset to the on maintain aggregate side costs forward of our just and

you I in So, the are purposes? guys any to mean, downside frame there with kind of revenue that degree your is working of way planning

Yes.

look now. previous some at and into I people recession think, recessions we're say heading would sort think Bascome, if I most you of

big seen the You've a as revenue to XX% revenue XXXX, bigger X% like where variability was that XXXX decline decline. small as something a something to

I depends look at deep those on long can think, previous the think looking how like. I and how goes. might But, what So of lasts periods it kind you slowdown in that book it

now. back I could to humoring cyclicality Yes. which us future. where XXXX, as but long thought look that. But process that's with think through are just trying to Thank And away your we stopped backlog the that a realize -- for to you do change on today, have in the was really I businesses, clearly well also some way right quite

of Just, your to hit mid-term wind kind in you I and want where you on barge? think utility could structural towers, don't go structures thoughts know high-level demand if

Yes.

let start with three. So, me those

-- wind renewable to one of big think in a with three continue believer are of I I'm be backlogs. energy Starting those ones power be continue demand. to sources that towers, the big a I will fundamentally in think with the will

going we I It's forward move continue. that's think a will stop. that as not trend to

guidance future about talking the you giving you planning or the that or results As look into go the utilities are projects. at are you if the ahead when

A lot that. talking plans about and storage are of them things like

going think -- story will storage forward and renewables to combined continue story a will that no? go together be I a So, of

-- that away. -- they're even are industry And The has credits at gas the $X but And in now we're lower competitive. going know natural with which long-term. now optimistic on I industry is tax historically those and worked the

and think the really to it evolve evolved technology fast. has continues I

to for XXXX but happening is all everything something for even in the Utility It's investment infrastructure is it. believe energy and about the for the to everything needs going for market. the we a we're that's different. and needs with us what and in we in to we're years. that's uncertainty doing there here demand That It's get the for encouraged factor structure for hardening business stay us electronically XXXX the industry stronger -- transmission and grid are I'm will long-term happen renewable So, long-term. that seeing electric several have cars that probably fundamentals in some

other lines. that's The first we to a share we the small have highway quarter And we is on product there what we're expand did that have relatively that's our piece acquisition the why opportunities market and signage. doing. Scott talked about in

it's line our lot similar And synergies a same with -- of engineering lot product a same design processes. very

So, business to to strong this market have continue we the grow and expand as fundamentals. we want opportunities has to

finally cargo the if that have not fleet That's me those dry barge to mentioned be dry and more to driver that remarks the see have I barges grow. what fleets. encourage replacement right both replaced. going And is any assuming. on now It's my market. we're in that cargo fleets don't And I to liquid aging a

But simply -- needs look it to for liquid dry values change. that is or something at if a sense replacement be you look that have both you financing that replacement gives a hopefully which less on in dynamics our something customers we There like markets. at and the

going were a demand business. prices buying help very which I also get buying with ago prices we're all half could low an year additional that at same China the is we But relationship at a to point these be -- mean the time which now. is the some And important are and piece. steel price driven agricultural by right us steel at

on will have on There's on steel positive we will But wind and We're XXXX a the profitable. age overall little the we're positive it more but uncertainty a and based on transmission. the in prices. wind, business be barge

you, guys. Thank

line Crist And from CJS go our Please Stefanos next your question ahead, is open. Securities. with comes

morning the Good quarter. on congrats and

you. Thank

First, aggregates from organic has and out could contributed also the between you what break Cherry? growth in

Sure Stefanos.

gas the was the legacy and business only downside was on relatively oil then flat. pricing up volumes And exposure. the So, were

So, added you that well of all quarter. Almost is results very and to the lot the roughly The was together our all the growth put it the that in flat. acquisition integration smoothly total Cherry in operated going during first quarter. a

$XX then you also Thanks. had Perfect. of you progressing And maybe color lot a in million. us how give that's barge on Could orders so into guys some QX?

Yes, that. I'll take

orders received in have very few. we but QX, So,

going now new So, we right our we're we with going back is doing -- basically steel what are are through -- customers pricing. right to now

to give is And $XX,XXX current to compared a sense ago you in at be barge pricing year when a to big reduction. price may steel a $XXX,XXX level in it the

prices right we're doing going that's what little what a now So, That's steel our as customers. stabilize to bit. we're back

we But continues We much. orders The business do business. not our relatively in few a received components have components well. to very be orders barge receive But barge few.

Thank you so much and congrats again.

Thanks Stefanos.

with ahead. Oppenheimer. Our comes Please Zaffino Ian from next go question

the kind dividend. you sort that -- M&A M&A targets Are of you. spoke you're And the as What well. it kind -- was some on Is fins maybe good what good thinking sort Very interesting there front? also of shaky the acquisition? of news on I here where you keeping could that Thank great. Thanks. you about financial and any get seeing, or out Hi, are just on environment of like that you're the stable targets of of you kind are terms kind a might you color have?

over in about the the pipeline. get Scott And clarity been we mentioned areas and I was some slowdown, will we have talked this be, is Like think I of we that think last no? Specialty expansion a working everything relatively Materials the how the And And everyone. of a deep more several full first, this have this have with business. the to Ian, our long aggregate how and we Antonio. make and utilities and having that weeks, mindset three reset else, around sure the Yes. there on

The know And that. we going uncertainties we're with comfortable reality -- be navigating just to these won't we is but and that. to get have

have not business a or there's have I we But they're to such to And find balance going be their be going for either a to run they some going do operating believe we're well sheet good problems. into balance We're not performing or opportunities. believe strong opportunities not We well are who sheet. do specific that disciplined. people

a because That good to looking it's is to if the for probably take think most do for one time it. company find the I believe the mean reasonably be priced, I that to where that that -- door any is important have. have balance we we be we opportunities want a future for a for leave strong no? to advantage we opportunities, going have we're something and sheet that we going company we It's thing open, And won't we of. think doesn't to have

Okay. And far or then itself? the the -- greater individual also as that each you. deemed business, essential is the company company this being Thank as is business

It's individual business.

you Also look situation. reasons different in guidelines one same fall the -- each when of is government of the Mexico at a business have but So, important that for all them in category. provided, business the the our essential -- the the essential is there's that

what's to So a operate there's though on both even disparity essential. between have continued we countries

border up We this both have essential operate to been sides point. on continue to of the

much. very you great. Okay, Thank

Please go take we Hirschman next from And Blake with will ahead. our Stephens. question

Hi. Good morning, guys.

morning. Good

Blake. Hi,

looked to you whether line have or curious as trends margin? top the across about like of might what talk guys the April kind just was I just segments'

already plan. in from where pandemic strong. backlog, up The that outlook we -- And March. gone specific April have steam Construction Products you up numbers. were We've projects then on in a give and in overall when well about we we to I'll have some stay according Transportation, markets have operate But don't talked and in been there. April, away started the held picked being color largely Energy volumes Yeah. has intact that from our

the one strong should replaced that's a of by projects questions degree it the a QX April. the of those QX of strong and new projects. as So around We've -- to that rest uncertainty But be are seen there's April.

kind piece, cycles about Construction or I would how it. even some template of look Products Got decrementals XX% like for maybe top would we closer line one helpful. the kind if that expect for a guess rough past there? what the you to expect decrementals I just mean think should to you And to X% or XX% assuming see at be kind this as drops of there you would in of either

of Yeah. I'll barge, businesses. kind we see are variable in around some the declines Energy more in margin cost structure. and you color give those In what

able be relatively consistent should we So by to the hold margins footprint. rightsizing

You do but not severe. have particularly some decline,

Construction incremental highest are and businesses. those and components decremental margin Rail

cost structure. So upside, the expect the margin declines cycles in more on which more the margin demand seen higher pressure we'd of good downside of because we've fixed but increases on

the orders So, described magnitude about be will drop if talking margin that pressure downside. you you're on there of

-- about I missing we've is it's the it's support and margin you Blake, this that's like have we've revenue our And Antonio, excited the fourth more Construction said, it's pushback. just piece not mentioned good that XX% Construction. as -- seen slowed business down We in But Washington It's where it's the couple little The in give little is on of a construction. pushback a a business, where Shoring seen the and California that's as it, color states Construction a where huge. we have but site a good business it. backlog April. third to It's business. side We're more quarter. the some here operations a about I to of

that's some also. we're where slowdown seeing So

for I wind credit momentum then extending makes think effects the And of Got there's COVID with the lastly, sense. you broader and tax year? it, do this the impact beyond mean of any that that's end just just had. kind

the discussions that is from This tax discussions bill. are But final closely. credit, and other Even our ongoing, monitor those corporate bills, we and of as -- said, the it from think Antonio business production included Scott. of Washington stimulus without not some part has competitive economically wind was understanding conversations a that mandates. both around was in in drivers lot state of positive we'll is and ESG We

to business be benefit, nice for that So a sound. not be PTC extension a but required would

a hop All right. back lot. I’ll queue. Thanks in

And the no to time. Peck. now questions program we Gail further it turn that at will appears I have back this

Thank forward Nikki. again joining you us speaking to We with Bye. you, next quarter. for Thank today. you everyone look

you you disconnect today's participation, any for does time. This your at may conclude your program. line and Thank