Arcosa (ACA) 3 Nov 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to Arcosa Inc.

Third Quarter 2022 Earnings Conference Call. My name is Catherine and I will be your conference call coordinator today.

As a reminder, today's call is being recorded.

Now, I would like to turn the call over to your host, Erin Drabek, Director of Investor Relations for Arcosa. Ms. begin. may you Drabek,

session of replay that and the the and the yesterday's call. release. the will with for Instructions Antonio in number With and year the measures will slide measures available been A slides of morning's comments today's for included measure slide for accessing Relations replay Investor for next financial and non-GAAP Events everyone prepared available the release contain on replay are on quarter webcast included GAAP. of for posted Carrillo, the Arcosa's XXXX the CEO; call question-and-answer CFO. the have are accordance Peck, closest our earnings me to GAAP press two and Gail in website follow website thank copy morning their presentation. joining under Today's in remarks. are you third News financial prepared President not press will presentation this of of Good our one A today A Reconciliations call tab. appendix ir.arcosa.com. weeks. presentation be A be are and

conference the Act today's forward-looking addition, defined Litigation of contains by In as Private statements XXXX. call Reform Securities

turn risks filed the to now to subject SEC expected to statements Forward-looking to forward-looking information uncertainties, are filings I Form yesterday the later XX-Q, actual differ the could please for today. would and including we cause statements, filed results over these Company's uncertainties to on refer that and to be press like risks our Antonio. and such materially call release more from

performance I'll joining response EBITDA. continual efficiency to efforts effectively highlights. Engineered manage and you Structures along to Favorable in excellent helped in and everyone, an pricing led drive and Slide costs Starting and morning, to earnings improved strong to that third quarter Arcosa contributed adjusted demand Good strong actions Erin. operational flow. improve our with on thank XX% by today's results, growth for in begin increase inflationary consolidated call. delivered pressures you, Thank with our cash standout this and address in segment constraints continuous volumes of Construction the activity segment growth improved coming utility Products impacted reflected although XXX construction of were strong revenue was basis inflationary year-over-year. margin essentially adjusted to overall pricing quarter, to tank gains segment generating primarily expansion, structures adjusted points and Structures contributed pricing to led quarter pressures in business. from a healthy Engineered a storage that and Results flat our by EBITDA EBITDA double-digit in number that X,

are pleased to quarter. We with consistent maintain margins second the segment

XXXX EBITDA of storage sheet of growth and and range. the Based leverage slightly position divestiture taking October account, we Our from strengthening segment adjusted strong our further top sheet in this Transportation We expectations. be improvement down completion updating balance liquidity steel our as with our flow offset and generation XX% the quarter target, priority, our was balance performance and into a EBITDA the ended our growth by financial tank quarter, now are and our performed year. third line in long-term to Cash have guidance year-to-date Free in March. guidance. midpoint the below in XXX% we the flow Products in with lower was progress we strengthened on last We significant year. continues anticipate our flexibility divestiture. significant conversion financial in was profitability components made cash the

progress X. the represented made our realizing years pleased our we significant sheet past our portfolio. Slide of opportunistic acquisitions portfolio better advance to continued to initiatives with evolution assets. more our our to am improve bolt-on a over the for X, The transformation in and million focused of position transaction growth divestiture also few through capital strategic a the have Turning have M&A, our Slide us of in storage we initiatives. toward to non-strategic organic The many optimization and I and of organic revolver, nearly significant on a a time, are growth the balance federal $X.X monetize spending $XXX markets, and simplified while a recently proceeds Please milestone the ability tank well-positioned enabling tailwind utilize portion value for by benefit we The legislation. our With from repay sale to long-term for expected growth. our to expanded from stakeholders. higher point business in the multiyear turn underscores the focused business favorable flexibility, trillion business growth more enacted serving it focus to provided portfolio proven redeploying at into to simplified divestiture the

will to forward, Gail we aggregate-centric and cycle. a strength third turn quarter through over call our existing generating As financial more capabilities, returns look that we maximizes on I detail. review focused performance the economic building to remain the more portfolio higher in the And while Gail?

Arcosa's you, I'll Thank begin XX results. Slide on consolidated Antonio. with

revenues towers solid the and basis points XX revenues driven despite organic Adjusted ongoing pressures, driving and margin inflationary of growth. by within our and in EBITDA increased quarter increase Third X%, barge challenges expansion, wind outpacing improved businesses. XX%,

diesel, $X volumes. revenues gains, natural to the aggregates of sales approximately in million. Products X%, partially Segment reflecting Construction segment and led fuels increased pricing to pressures by on offset cost XX. cement Inflationary by process higher quarter, Turning prices lower increasing strong Slide

As last flat a EBITDA segment about was year. result, compared adjusted to

were year and also about finish a anticipate and healthy natural progressed, the ahead low improvements Overall were broad Pricing the Gulf Coast in and in and each timing the the and deceleration were activity a increase Phoenix, aggregates adjusted the full quarter and Texas, September. factors; and specialty strong residential margins trends experienced increased family ready In trends our pricing segment for construction XXXX, materials. demand to double-digit single-digits. our markets, aggregates we guidance. pricing projects natural As volumes with strength. Overall, down organic impacting volumes quarter, several favorable wet contributed cement mid-to-high certain now impacted aggregates of previous we single in recycled by of quarter aggregates shortages mid-teens in that in consistent in in natural Average month were volume. in profitability sequentially in mix customers strained up weather organic third a

benefited volumes As Total a to year. we year be full of during the residential plaster XXXX in our prices to our construction, acquisition from progressing up quarter. below anticipate is down, Materials, of recycled volumes in Specialty multi-family integration favorable business, Within were the momentum result, beginning significantly now well. which benefiting expectations of average very the slightly selling and see continue RAMCO, the at to the volumes aggregates we flat where

underway the at Oklahoma customers' backlogs in strong going sequentially second Plaster lightweight the capacity and Our up well. is are were about aggregates quarter. and our Volumes from expansion facility flat project year-over-year

in CapEx shoring X% a on expectations Order increase remained levels business for trend XXXX volumes. our reported inquiry during Finally, supportive. and healthy revenues were higher quarter customers' the

Structures significant towers. and continued XX. was and strategic storage Strong Engineered the pricing leading driven wind quarter to offset growth benefited Slide solid more headwinds structures on to outperformance tanks, from market from by the than Utility demand during adjusted Moving EBITDA. which measures, in utility structures

due the storage for tank the were up quarter as second Xrd. certain to quarter, for the the from were third as driving into divestiture to While projects down business completion also October as the we year-over-year up strong substantially close the well margins moving third of majority prepare segment sequentially pricing quarter, of Results the improvement. on

upper structures for level our the business own as backlog to Wind for In Towers, the of the continued was Structures $XX expectations execute $XXX PTC of of end combined wind the the we the approximately be of start tower Wind lapse due would quarter, year, low in with Utility, down in and range to uncertainty. growth million, for was we offset the provided full year we end a volume. consistent entire a continue orders Related by to the on adjusted EBITDA from the As year approximately well utility previously. million At

as steel Products challenges by components Turning was on offset to year-over-year Improved barge. performance Slide continued XX. in expected Transportation in

fortunately margins. higher XX%, a segment declined adjusted American million in North the lower components quarter, by As quarter. and in the business result, by water low Mississippi conditions impact improved. no year-over-year Revenues operations on relatively to as the we our leading steel market increased during levels the system driven on volumes railcar fourth thus EBITDA River had $X have normal in financial our Unusually, business, maintained results barge for far

the monitor built for delays production water levels to potential or We launch newly too low inefficiencies, to shipment become future barges. continue if

flexibility, while balance XX replace recovery. about and orders barge sheet comments shipments the await million flat stood broader the with new a at Our at some our with on continue as our Slide with backlog of I'll sustain flow manufacturing to cash we on conclude position. end to quarter, year ago levels, cyclical we $XXX

the the million million working a During capital inventory higher a we by receivables higher about consumed $X by were increase and of management quarter, generated free CapEx. balances. of offset quarter, cash as better million flow $XX year-over-year, capital growth-oriented improvement driven lower Working earnings strong fivefold year despite cash flow, during from $XX last

we increase the were contributing Capital a quarter, progress solid made in on cash projects last focused of on working to growth Engineered source positively year year, flow fourth we and be working to cash expenditures compared Structures. Construction a million, underway For as as anticipate capital we Products remain XX% to full the capital XXXX. in $XX

to credit it XXXX, ended of to to includes million down October, $XXX we to Arcosa growth net for million sheet of balance $XX X.X leverage In received to about proceeds onetime providing of CapEx back times. and Antonio. divestiture it forma EBITDA see facility. we strength. $XX pay I'll full $XXX quarter now million CapEx with which is million, year Pro of the Summing our from turn considerable proceeds, use net million. the revolving For debt $XXX pre-tax up, we adjusted the million $XXX

Thank XX. you to Gail, Please turn Slide

and time, businesses, cyclicality objectives, acquisition, benefiting simplifying of component year-to-date our At of we the structures, same from recycled the in significantly this sheet. as financial and in reducing while in discussed, Gail footprint utility businesses. Arcosa I cash aggregates as on cyclicality strength which rail well has and ramp our through geographic wind basis, have earnings our barge particularly and in products, construction driven divestiture with is quarter in the tank the expanding our our advanced performance positive managing evident our portfolio strategic storage both balance flow timely fundamentals As business. while pleased and solid well a year, our in with the the the our improved effectively the performed third am infrastructure

by the experienced have our of availability single an improvement near-term, our to in price we deceleration competitive to potential yet macroeconomic stay the continue rates. of related still the our we some labor the while Meanwhile, and arising Turning monitor family mindful remaining economic year. environment, In expect of the uncertainty We're in in to to the and construction of ahead constraints encouraged we heightened labor in some in faced in inflationary easing businesses, markets. pressures positive infrastructure impacts the higher remain from interest the residential fundamentals continue. we markets earlier

should to dynamic volume pricing impact. for favorable continue a the compensate However,

Our medium in on single in attractive positive shortage residential term and given supply trends remains housing view our population markets. the growth family

time, on largely to oriented our ones same we projects few next the pricing more over widespread, the expect volume outlets, infrastructure become At focused from volume infrastructure to we prioritizing quarters. strategy. discipline from over spending more the value bill residential remain Our transition

demand continue electric towers, up. infrastructure and for upgrades telecommunication see to electric initiatives, for wireless utility the CapEx the to by fueled XG build strong hardening utility existing and We grid

structures both traffic visibility and backlog these for businesses. for strong favorable have supporting We utility outlook a

issues impacts should are anticipate bottlenecks be supply and invest will to interest rates from utilities continue help to future that demonstrates for in their hurricane the of to projects natural electric withstand and note for better and disasters. will continue impact labor supply Some the need Florida I infrastructure projects our of problem to reduce chain recent facing. The accelerate grid, delayed demand normalization by higher the that that customers we the structures. utility upgrade in and a resilient chain

we we have Slide to quarter, XX. signs challenging environment second encouraging as Continuing the move XXXX. Moving trends business into in our a saw less barge with we point seen to that in the

demand for level While which our there significant the quarter, supports view orders of the in is inquiries remain up barges. third that increased pent low dry

backlog which visibility current as pricing allow provides will Our demand stay us to good in into strategy returns. disciplined XXXX, our

that last to passage North rail components benefit Our into levels the which which Reduction XXXX. of the deliveries components year. of Inflation our the the railcar wind expired steel culture, in benefits the of business continue significant and In seen the impact long-term created our the the for quarter customers and credit market although for low wind increased on PTC fourth a towers, has not end last expansion at the a in industry thing in associated the will catalyst projects. and We Act, The in anticipate business business production recover tax XXXX lull growth in from chain be is near-term the included from supply our American growth immediate.

power. wind our working are projects As XXXX. plants wind our maintain increased our Also, down fast we quickly. their guidance contribution At In limited capacity in a of forecast of with materialize. a tank our divestiture. defining XXXX customers on the optimism turn goal expansion half a XX% soon XXXX for ability during Since have around we to removed cycle moment, accelerating previous keep result, XXXX we our to guidance demand them, for to or XXXX. range, the projected still we the for as needs EBITDA up our now be Please our customers demand are ramp in we quarter operating as storage to as increase towers from Slide the could midpoint planning revised for two At fourth see our is the conversations of XX. required from of anticipate early production see very long second sustained

have in am stakeholders business to many track Our I EBITDA to more dedicated our team deliver cyclical overcoming a the In increase our closing, I'm than of who this despite performance our outstanding challenges in we proud coming XX% results from with continue our on business. growth obstacles pleased for deliver quarter's max. year.

opportunity our position. simplifying have advancing growth expanding our progress and achieved focus in to significant portfolio We strategic M&A, our objectives, financial our strengthening

to focus evolves businesses potential on growth culture simplifies like maximize shareholder and increased the for I will call open the our value. and our As our enhance questions. long-term help would strategic

our Sidoti [Operator with today from take & Instructions] We'll question Romero first Company. Julio

is Your open. line

Just business. the start Structures on Engineered

If into just just on XQ, talk for the the about, the continued same big it fourth like some not in drivers quarter outlook the rate third could talk and at same quarter drivers? those of looks maybe the you albeit they about

Sure.

only you Utility an it's business see I think Structures everything you getting see better I trends point Julio around would the industry time. in the forecast say not industry is the any favorable, favorable, but to that's all good,

all months not the forecasting gets at studies a market new every industry deal. It's look that terms stronger and You year several of stronger forecast and -- next in forecast years. the so the for the or six one present they

we So, I will think company, prepare a that. as

at operating are not We capacity. full

supposed We better they And are have plants up. do volume where projects be to our the to capacity to the can ramp We grows, more planning as allocate the better efficient. and plants become made.

going in there. with of projects. somewhere, remarks, tell things it been that holding my And I what's some inputs projects the the about back getting back excited of probably held one holding you, industry constraints. are of I has very would mentioned some that is for shortage other industry some labor the So the There are up on

we acceleration. sorted out, So things get I think up industry for set as the those

on there. going what's So about excited

the up availability second I the labor. And -- benefited Excellent. clarify, understood as quarter from better guess business from availability to of somewhat I just to follow Structures of it, Utility

structures changed labor So, -- availability is of the at and that has utility all?

Julio, not we seen is have better mean, I perfect. Yes. It availability.

of to more our not to discussions we America. in people availability What we seeing but work, need. building people in get customers are Latin are in referring wanted can projects we customers. with middle bottlenecks the We I'm some the of is our lines getting for their rural the

Now, what's back it's little it the et cetera, holding that's cruise a bit.

We'll Ian Zaffino to go Oppenheimer. next with

Your line open. is

able little was just that IRA, necessarily does mean bit. on maybe in and take see I've towers the IRA the I wanted in go wind go on they think to you there going read what's the will what do customer? but is or credits? I know over wanted tax for be negotiations you the keep back with Great. in what to key credit. to are even to significantly general as think I we a that far just maybe Can How DO tax you? about you as mean, the Thanks. magnitude? that your

good a that's very Yes. No, question.

it waiting that a comments to is us and out. is we Let are was are -- clear. saying we clarification. are there for not -- getting back some period rules figuring me for sending still first period still by very happen There There the that start

So as my information have tell of of the I'll you today point far as with as, today. view we

length incredible the for this very is for an for First It's have it starts a the the ramp of production takes while industry to tax provides important seen up a piece. Arcosa industry credit, a is every wind because and we credits the most ramping I the all, the IRA time -- longer because IRA think of period That up. towers. catalyst it long tax for

longer do and is tax their it extension industry planning. with projects, better allows better credit our take the time a planning which customers to the long So, to the do because this

that's So one.

manufacturer down but set have know, XXXX. country concept of to again, needs clarification And tax things the in up. you Right shut tower there's build a important. operating, you and in there's are two On the here we well now, But that in several very some largest credits, as still have one One, happen. we a the building we're America. wind we're plants to

easy. the capacity to have relatively ramp ability we So, up

bills a Historically, has for tax that first developer. is a contains the the part, credit this this tax On one been time for rate these tax of the manufacturers.

now, credit be tax a tax this tax credits, manufacturer, they portion My -- for the happen, cause power bill they if of but developer, very but on materialize to And to perception the that to Arcosa. are of -- there for be significant time, they very the the substantial manufacturer, substantial Company. be can become a they real blade substantial they turbine Now, clarifications able depending will all is a and at tax able includes the will credits be we'll the after if negotiations, the for significant if for we the includes able And some they manufacturer. and we keep is be part like catalyst it those. might keep use that are happen able it's of situation to right them, our very we'll way be

Now, me clear takes mentioned, as just be this, it I let about time.

a is to I that's keep XX comments, mentioned XX I in So, open. my takes the to the industry plants developing why project want months and

need keep are 'XX, early We half ramp low our have now able the if be right on very to open of let's up volume that? we -- have When I'm 'XX, cannot the fast. of process enough second to but plants we capacity we to And what's industry. for visibility because in going I is the I tell think at out capacity XXXX. in it's excited say, to going once about very uncertainty, a clear

the the vis-à-vis like? steel are think interest input comment demand? pre-COVID book input I'm able how Is it services, inputs to on order that their are glad can you close we close to improving, also need I pricing steel barge pre-COVID. and but that Or about prices do demand to indications the to what the then might I of costs? mean, And Thanks? like your it look steel pretty seems where they were looks mean pretty follow through on to maybe stimulate is costs the mean, I like, hear side unsure where level are of

Yes.

two is to build really coil prices, So, in are they is than capacity follow different close there's a last roll that and months and more Right use plate, expensive U.S. of difference two carbon steel, price but price, hot plate are and been hot being flat $XXX the between plate much for two carbon for the dropping What now, price for plate. plate the is steel the very this and markets and There's steel. And the six a for they have fast a there's markets we with about historically. we bar coil. The to pre-COVID historically, roll are $XXX. relatively the coil coils. levels by more coil more

barges about the As stayed I coming mentioned, They good the a until for barges. this fourth started pace. is falling. building half. ago, online falling and mills stubbornly a relatively capacity and at We coils use of we during high There's a use Plate don't month maybe mainly utilization period month in the quarter, plate.

the few that we relatively is expectation my ordering. fall are the an to industry, prices next able customers exciting months, strong. to And are place be our again, appeal next get few become in to the prices, continue pace a about should So start they the inquiries to What's will a months. at fast over very where for

up. ramp significant in want everyone have start experience secure in, slot. our capacity coming that once to the orders is capacity they their to jumps We because And

pricing news and make decisions. So, that's right -- I to issues that that my good the remarks mentioned good the allows backlog that is in us have visibility we why I

seeds beginning And are trying going good with capacity. our giving going to margins. We sell all away focus to in not the that's be be our to the

We'll Capital. Shmois Loop take from next our Garik with question

Your open. line is

drove if alleviate, pricing I'm construction bit the We see what pressures improvement as Was just sequential if actions? quarter in little the little as progressed? started wondering, bit wondering, to just you dive more? more you to margins could third in additional dive can a product a cost in it

with I'll be honest you.

perform other like a very the July Gail details. factors constraints slow all don't many have other Externally, mentioned had rain into we all few things internally. did and go a that and we good to rain in was I But had month. well not of some things want things. start. a and July, not I Lots things. and think we we the

order had had pick start. The I September, really month. job phenomenal did very to in up. back think And slow in team fantastic we rhythm we've a then the So, a

the So best I little is our July. was it external think, a and let's start, a But had of factors. we the quarter, not bit really our I slow think reflects say,

part that better. our businesses. of it pricing Part So, And perform increased was several the think in times did we I of during quarter, is started we increases. of kicking it prices several in our pricing we

So, I the momentum pricing think very the for is quarter fourth strong.

I on side. growth that anticipate not momentum you and offset yet, formally on but be I on volume know to the we're products quarter just margins we conversely, sketch in residential was the and both weakness, margin you construction maybe the about from if how out based would the wondering can for XXXX you Would The you're starting expand question think to performance? infrastructure year. on late to anticipate have next and

reality partially of are think in. of the projects. in of has construction Arrival the allocate for We're is infrastructure to early. more have residential not the on going housing terms as that you it oriented, a the to we tell bill kicking The business my starts be the numbers to through the the volume don't yet, to optimistic mentioned I'll projects 'XX that for that the the will give ready But that perspective rest to budget bill comments. in guidance businesses I I'm so process, We're the continue going exposure. so I XXXX. our we we're more infrastructure segment to one think is most still all infrastructure becomes still infrastructure able slow

I grow of to think a projects. those have we opportunity with lot all

take it's some time. So, to going

fast And I is a to the think projects. about quarters, redeploy the slowdown, think optimistic long-term I we towards but very be over can volumes housing next and infrastructure. mentioned, I the we few how as know are going we will more housing medium

next Brent with Thielman We'll A. go Davidson. D. to

Your open. line is

margins now about looks morning. the notable business given a up core all has to EBITDA and year-to-date, could EBITDA in for ex-storage your the that ability teens you segment? quarters XX% XX% year Good is margin in which Engineered wind. business talk Structures kind you. around from Antonio, challenges But core thank maintain what's in Hey, it last the done like of just ahead low the

Yes.

So, in that during one margins well performed to keep very segment and was thing in year pushing storage our business significantly. the tank that, extremely up the mind whole had our

think is margins the For stay as tower business. let's quarter, say, say, the wind going let's industry, start I next open, wind more to we wind the on to to the short-term volume in very weigh wind business tower getting, fourth year, the until the for on we more slowdown the

with through this goal and for target and a slow try our that's even for for few quarters with as really as get a possible would strong the bad the very period. is be place. to But weight heavy preparing able to our do much to offset to as -- that's Our time times, very, I think the wind be towers to structures traffic to what's want retail our telecom, be we strong towers going segment very to goal, wind going a we margin be very keep next in

possible our to guidance margins. goal stay as close is try in of terms So, to as our to

but to we heavyweight to can if stay going wind towers. to see, Let's it, it's close a be

wind Brent, little is -- Gail. breakeven add of wind this EBITDA color XXXX. just bit for for to QX. million would to I'll see million guidance year given to we $XX We'd closer a wind. we probably QX $XX for have just more full I see on mean,

with going point, to are impact in likely the QX some QX. see the to little to proud ex date but margins. storage your year those we are in But to on have QX So going a really margins, down you step of at XX% that's wind the compression in strength

question, of Okay. in just seems become it would like Thanks, recycled acquirer aggregate. second the you strategic Gail. of choice And then sort

are opportunities position now? already look you in the more there natural shrinking like on that at opportunities lot have the about Are talk a here. done? have focused breadth more and/or out Or recycled? at You the can you aggregates there Maybe is now other you just sheet balance scale that delevered a of pipeline in list

That's the and each good aggregates see I Company, question. it way see we in a complement other. recycled a I and The to think are really natural

ESG you and recycling it we the As their be think way is, to culture about know of has some future. now this of part the

offer M&A recycled is There of makes So, we've we a sense. person, sense. a We But aggregates, to working. just so make where natural excited know and it last are. places are it we been on to make opportunities. of so places I to our of pipeline that a working is metropolitan customers it new have like where try to goal sense. for years our the pipeline hired There's a three acquisitions, we combination where develop doesn't doesn't areas. try we where the we're about

I've projects we're happen said is aggregate want centric its aggregate has mean centric over I your lead doesn't like quarters make own. to aggregate. it and and when capital aggregate before, to what But next the that exactly hard it's few of be more going you As it that more a M&A into redeploy the to pushing us sense recycled

money I still. have company healthy company, a is more through at opportunities, planning, we went time, in we ideas, when same think and strategic I've we you lot the growth and spot we're of ideas ideas. have and have mentioned before, a As incredible organic that a

while. front want, and of choose deploying So a a you that when might us ones, I be best growth, next pipeline, do one you the the is with can the the quarters, and don't we're ones going have projects to to But it you of the you have that you. in is and think inorganic a capital, lot over between little good organic the news take several and

are. we where that's So

now go to Securities. Crist We'll CJS Stefanos with

Your open. line is

of any in across demand your In are differences aggregates weather, you geographies? outside seeing

seeing we we across are where Good Yes, profiles country. seen weather in That's where morning. Big we've more. different was away demand Arizona. decline this the probably sharpest saw

We're say, volumes. to hand, Let's three here in of capacity demand The yes, region, than country. biggest different compared on we're prices the DFW. more at more able in more faster. we the very other strong profiles. the the around say We've down would even production Texas were were volumes have. have other country. volumes here and regions Pricing, -- been the has Dallas, momentum been raise price come But the in across bottlenecks running seeing even terms rest full is I across consistent the

running but is capacity. housing still course, were Of at we down, full slowing

is the saw most where So, probably we drop. the west

just Otherwise, area Stefanos, very very, the And us area, were Phoenix single family feel area for away we in that the in residential remain positive, that Phoenix outlook demand the healthy. related. is that mean but if continue from to public single and didn't family drivers you to was the contraction during look, starts more Phoenix the in quarter. very I

acquisition then maybe And following have up just bolt-ons? Do smaller intention more focus you bigger on a or on or M&A.

a want we're to so And If with away stuff. that. they're comes of that larger will in It's, something to up, the it of do, Well, something willing want we to with the now if we something not other of on the at explore aggregate, but aggregate-centric, we'll a to be very you acquisitions. us at is not we as balance chain. look something is aggregate comes want you going something a stay that from upstream on not if sheet takes aggregate we're know. pure remain look not careful not side, that good especially little buy it's you come take lot. to We've shape, many, bigger mentioned acquisitions, there's value lot know, in it, bit take a lot of we'll else, that they there's a it, to But also when else

to Stephens. next Merkousko with go Noah We'll

open. is line Your

and And understand probably thinking So, business? can next some see at facing of end I headwinds the what products that residential, residential you're seeing and for residential construction maybe partially you how side infrastructure. today continue mix weakness least infrastructure is remind non-residential there, first, offset the between the by market could on, that non for touch on about you also But us year? you're to

we a our mix, there look and at at can we say, I'd be look because it ebbs period, over flows. when

segment, less the we'd look the at look you really aggregate, more more single the about shoring there I businesses is XX or for into construction though, other And residential, if we residential res. segment, a bit business, product half that non make lightweight exposure, XX exposure split no when you family would are infrastructure the individual When res, then So is say segment. the say little is no natural up there. aggregates our about residential residential, think

specialty, Our our our But multifamily. an single have our natural and business. we some family in is extent exposure recycled in more aggregates to

the you saw we commentary deterioration. our natural we side, it saw on saw volumes, why about aggregate what on some that's So,

guess acquisition on to say good think and Rock have particular that's we would acquisitions, very, came also the very I we residential geography. hopefully, say we've to So, outlook, type which exposure addition I about I'd a closer in Southwest geography, XX%-ish helpful. did one the with probably portfolio. very the remain maybe Phoenix positive the that new our made that when

second are last into will And our out. that. seeing very very focused are team about deployment terms and laid of of being regions they're what infrastructure beat the we're seeing, on in I week On they're we seeing with asking question, optimistic and four your projects they we're say and late actual what about volumes met the how the

of the of So, more we're is and true. what reality become seeing Infrastructure I to see Act starting we're the think more

for for be to of little in be be this going within should So it's other but market. to And again, going it might And businesses segment. be volumes great terms it's kick we're little, that the quarter, in. that not good substituted our to to aggregates it by going being the see

is cement And will issue aggregates limited Is that just you then markets? a here, as getting widespread better continue your or that volumes. follow-up to negatively to out or be shortages caught a impacting tight any with certain in is And cement it geographies? sticking

mainly was Houston. It in Texas, the that Houston but area mainly

bulk the wanted an July will cement. at that we with get it's we only But cement, allocation August, were We And very Not a us. we sand on couldn't nice us. it's have and not business make stabilized of month and they're throughout a we least. called for sand the amount

already mix about you our cement. If they companies, buy think customers

location So, was industry and on area. Houston the whole that their around in

projects the can now. non-issue again, a of count thing that this lot simply is get cement. delayed right they there September because became you on got couldn't enough cement a In So cement

it a temporary So, thing. was

turn like the program At Drabek remarks. to back closing this would time, I Erin for to

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

does participation. This Thank today's for program. conclude your you

You disconnect time. at may any