Good morning ladies and gentlemen and welcome to the Arcosa Inc. fourth quarter and full year 2021 earnings conference call. My name is Katie and I will be your conference 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.

Drabek, you may begin..

Good morning everyone and thank you for joining Arcosa’s fourth quarter and full year 2021 earnings call. With me today are Antonio Carillo, President and CEO, and Gail Peck, CFO. A question and answer session will follow their prepared remarks.

A copy of yesterday’s press release and slide presentation for this morning’s call are posted on our Investor Relations website, www.ir.arcosa.com. A replay of today’s call will be available for the next two weeks. Instructions for accessing the replay number are included in the press release.

A replay of the webcast will be available for one year on our website under the News and Events tab. Today’s comments and presentation slides contain financial measures that have not been prepared in accordance with GAAP. Reconciliations of non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation.

In addition, today’s conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

Please refer to the company’s SEC filings for more information on these risks and uncertainties, including the press release we filed yesterday and our Form 10-K, expected to be filed later today. I would now like to turn the call over to Antonio..

Thank you Erin. Good morning and thank you for joining Arcosa’s fourth quarter conference call. I will start with a few key messages, starting on Page 4.

Arcosa delivered strong fourth quarter and full year 2021 revenue and adjusted EBITDA growth in our focus areas of construction products and engineered structures, while managing the cyclical weakness in our wind towers and transportation business.

We also generated significant operating cash flow in the fourth quarter, strengthening our balance sheet. For the full year, we reported adjusted EBITDA that matched last year’s record level. Our team executed well, successfully navigating inflationary pressures, weather disruptions, and the impact of the pandemic.

In 2021, we achieved significant progress in expanding our construction products platform both organically and through two natural aggregates-led acquisitions. As a result, our construction products adjusted EBITDA increased 51% in the fourth quarter and 30% for the full year.

We believe we’re well positioned for continued growth supported by favorable market fundamentals, our strong market position, and expected tailwinds from the increased infrastructure spending beginning later in the year. For 2022, our outlook forecasts improvement in adjusted EBITDA at the midpoint of our guidance range.

We anticipate double-digit increase in adjusted EBITDA for our portfolio of growth businesses.

Partially offsetting this, we continue to see weakness in our cyclical businesses, wind tower and transportation products; however, we are seeing early indications of improvement for these businesses and when the recovery starts, we believe there will be pent-up demand that will have to be fulfilled.

At the same time, the recovery in these businesses will likely start having a positive impact in 2023. In the short term, we will be focusing on completing the integration of our recent acquisitions prioritizing strategic investments to leverage our expanded platforms and simplifying the portfolio to reduce the complexity of Arcosa.

Moving to Slide 7, Arcosa had made significant progress since 2018 to position the portfolio around our growth businesses, construction products and engineered structures. As you can see on this slide, we have made a number of strategic investments to create a more resilient company and improve the long term growth potential of Arcosa.

Most notably, our construction products platform now accounts for 57% of our total adjusted EBITDA, up from 33% at spin. At the same time, we have grown our utility structures business both organically and by adding three infrastructure-related product lines.

Also contributing to the growth in engineered structures is the turnaround we performed on the storage tank business. With market-leading positions in barge, wind towers and steel components, we are well positioned for market recovery to build on top of our growth business continuing expansion.

Additionally, we believe the recently enacted $1 trillion infrastructure bill creates multi-year tailwinds for many of our businesses. I will now turn over the call to Gail to discuss our overall segment performance, and then I will return to update you on the outlook for our business.

Gail?.

Thank you Antonio. I’ll start on Slide 10 and touch briefly on Arcosa’s consolidated results. Fourth quarter revenues increased 14% driven by double-digit sales growth in construction products and engineered structures.

Outpacing the increase in revenues, fourth quarter adjusted EBITDA improved 17%, benefiting from solid top line expansion and stronger profitability in our growth businesses.

Through proactive price actions and diligent steel inventory management, we have maintained our broader margins despite significant compression in our cyclically challenged businesses.

Looking at full year 2021 results on Slide 11, we grew revenues 5% and matched last year’s strong adjusted EBITDA despite an approximate $75 million headwind from our wind tower and transportation products businesses.

As Antonio mentioned, we set out at spin to build a more resilient, higher margin portfolio of businesses, and our 2021 results reflect our progress. Turning to construction products on Slide 12, revenues grew 42% and adjusted EBITDA increased 51% in the fourth quarter due to both acquisition and organic contributions.

Segment EBITDA margin increased 140 basis points compared to year ago levels, supported by higher margins in our recycled and legacy natural aggregates businesses and the accretive impact of the Southwest Rock acquisition that closed in August.

Volumes were up in our legacy natural aggregates business driven by higher residential and infrastructure activity.

With the exception of central Texas, where we had a large highway project roll-off and oil and gas-related headwinds in west Texas, we achieved broad organic volume gains during the quarter and benefited from the contribution from recent acquisitions.

We experienced strong pricing increases across our portfolio supported by continued attractive fundamentals. Volumes and pricing also increased significantly in our recycled aggregates operation with healthy residential, industrial and infrastructure demand.

Turning to specialty materials, revenues were down slightly in the fourth quarter as an increase in volumes was offset by a less favorable product mix. EBITDA and margins increased year over year. In addition, we were pleased to see another quarter of strong revenue trends in our [indiscernible] business.

Overall, full year adjusted EBITDA expanded 30% following 2020’s 50% increase through a combination of attractive new platforms and margin expansion in our legacy natural aggregates business.

Moving to engineered structures on Slide 13, fourth quarter revenue increased 12% and adjusted EBITDA increased 21% to $28 million, resulting in a 12.1% margin, ahead of our fourth quarter guidance of 10%.

Results exceeded our expectations led by utility structures and storage tanks, while we managed wind towers to breakeven EBITDA for the quarter, consistent with our guidance. Our utility structures business finished 2021 on a positive note with significant revenue and margin growth in the fourth quarter.

We benefited from improved efficiencies associated with our production ramp in Mexico, a favorable mix, and continued disciplined management of steel price inflation. Our team has done a fantastic job improving overall profitability.

Revenues in our traffic and telecom businesses were also up compared to last year on favorable demand drivers and are well positioned for further expansion in 2022. In the fourth quarter, we achieved attractive year-over-year revenue and adjusted EBITDA improvement in our storage tanks business driven by a strong U.S.

residential housing market for propane tanks and proactive pricing actions to manage steel price inflation. Turning to wind towers, we executed as planned during the fourth quarter, idling our Illinois facility to adjust costs for lower anticipated production in 2022.

Order activity in the fourth quarter was muted as our customers continue to await a PTC extension. I’ll wrap up engineered structures with some comments on our full year results. In 2021, segment EBITDA increased 8%, outpacing revenue growth and overcoming a $22 million EBITDA headwind from wind towers.

At the end of the year, the combined backlog for utility, wind, and related structures was approximately $438 million, up 31% from the end of last year. Turning to transportation products on Slide 14, both fourth quarter revenue and adjusted EBITDA declined year over year.

Our results reflected a 39% reduction in barge revenues and lower absorption associated with reduced volumes. We received barge orders of $13 million with pricing reflective of soft market conditions. At the end of the quarter, our backlog was approximately $93 million, all scheduled for delivery in 2022.

Turning to components, we were pleased to see a second consecutive quarter of year-over-year revenue improvement as the North American rail industry recovers. Our components business ended a two-year decline with revenues up slightly for the year on second half improvement.

Fourth quarter rail car orders for the industry once again exceeded bookings, providing further momentum for the recovery and expectations for higher rail car industry deliveries in 2022. For the full year, segment revenue was $306 million, down 34% year-over-year, and adjusted EBITDA was $24 million, down 69% compared to last year.

We managed the difficult operating environment well and finished the year in line with our segment EBITDA guidance. Moving to Slide 15, we ended the year with net debt to adjusted EBITDA of 2.1 times, at the low end of our targeted range.

During the quarter, we generated free cash flow of $65 million, matching adjusted EBITDA, and supporting $75 million of debt repayment. Working capital was a $36 million source of cash driven by a reduction in accounts receivable and inventory.

Full year free cash flow was $81 million, lower than we anticipated going into the year due to higher working capital requirements. In 2022, working capital will be a component of our short term incentive compensation program to sustain our year-end momentum and align with our cash-focused culture.

While we continue to monitor inflationary impacts, we expect working capital to be a positive impact to cash flows in 2022. I’ll conclude with a few financial points on Slide 16.

Our fourth quarter corporate expenses were consistent with our normal $13 million to $14 million quarterly cadence after adjusting for acquisition-related expenses and an $8.7 million legal settlement related to our previously disclosed matter regarding events that predated Arcosa’s spinoff.

In 2022, we expect a similar quarterly cadence of corporate expenses.

In the fourth quarter, we continued to make progress simplifying the portfolio, executing the previously announced sale of one of two asphalt operations acquired in the StonePoint acquisition as well as negotiating the sale of two non-operating facilities, one in barge and one in utility structures, that had both been idled since spin.

We recorded a $2.9 million impairment on the utility structures facility in the quarter and the sale closed earlier this month. Capital expenditures in 2021 were $85 million, slightly below our guidance.

For 2022, we see full year capex of $120 million to $140 million, including $30 million to $50 million for growth projects primarily in construction products. Our growth capex includes an expansion of our plaster plant in specialty materials and two new greenfield natural aggregates sites, leveraging our existing platforms.

We continue to see attractive organic opportunities to deploy capital and have a robust pipeline of investments. I will now turn the call back over to Antonio for more discussion on our 2022 outlook..

we have high expectations for our growth businesses in 2022 based on strong infrastructure-led fundamentals, and we’re becoming more positive about the outlook for our cyclical businesses.

Although these businesses are expected to represent a small percentage of our overall EBITDA in 2022, they are poised to generate significant future earnings as their respective markets recover.

Starting on Slide 18, I want to highlight the success we have had in allocating capital to our growth business, which includes construction products and engineered structures.

Since we spun off in 2018, adjusted EBITDA in these businesses has grown from $90 million to $277 million in 2021, reflecting one, strategic acquisitions that we have expanded--that have expanded our market share and growth opportunity; two, benefits from organic growth initiatives; and three, favorable market fundamentals.

For 2022, we are guiding our growth businesses to achieve adjusted EBITDA of $310 million to $330 million, a 15% improvement at the midpoint.

Key factors supporting our favorable outlook include continued surface transportation investment at the federal and state levels, growth in residential construction projects throughout our major markets, including Texas, Tennessee and Arizona, and an improving non-residential market.

Additionally, we have continued to build the pipeline of acquisitions in both our legacy and expanded footprint, and none of these opportunities are factored into our current guidance. With these strong fundamentals, we anticipate our natural and recycled aggregates volumes will increase about 15% in 2022.

On an organic basis, we expect volume growth of 1% to 3% once we account for certain large projects rolling off in 2021. We have strong pricing momentum and forecast average selling prices to increase mid-single digits in most of the markets we serve.

We continue to actively manage fuel and raw material inflationary pressures and we are planning for full year adjusted EBITDA margins above 2021 levels.

In engineered structures, we anticipate continued solid demand for utility, telecom and traffic structures in 2022 with segment margins expected to benefit from increased manufacturing efficiency outside of our wind towers business.

In 2022, we see low single-digit revenue growth for the segment and margins in our targeted 12% to 13% range despite a more challenging wind tower market.

To meet rising demand for electricity and increased stress on infrastructure, utilities continue to invest in grid resilience and hardening initiatives, providing attractive growth opportunities for our utilities structures business.

In addition, we are pleased with the production ramp-up in Mexico, benefiting from the increased availability of labor and lower turnover compared to the U.S. Overall, the outlook for utilities and related structures is very favorable. Finally, our storage tank business remains a bright spot driven by strong market fundamentals in the U.S.

led by residential construction. Now turning to Slide 19 and the outlook for our cyclical businesses, including wind towers, barge, and rail components, these businesses are expected to remain a headwind in 2022 with combined adjusted EBITDA expectations of $20 million to $25 million, down roughly $30 million year over year.

In 2022, we forecast these businesses will account for less than 20% of their combined EBITDA levels in 2018. We believe this is suggestive of a cyclical trough, especially considering recent positive developments that may offer potential upside beyond 2022.

In our barge business, for instance, high plate prices have been a key factor limiting customer demand. We have been encouraged by the rapid decline in hot roll coiled steel prices and recent stabilization of in-plate prices.

Market forecasts indicate lower prices, and we have been able to successfully negotiate significant discounts to spot prices, which leads us to believe that plate prices will be coming down soon.

With steel prices at more reasonable levels, market fundamentals for our dry barge replacement cycle remain very much intact, aided by high barge utilization rates, improving river rates, and a positive grain and soybean outlook.

Under-investment in the fleet since 2016 combined with heavy scrapping has increased the overall age of the fleet with market estimates forecasting robust new construction needs through 2026.

Our [indiscernible] provides continuity for our two open facilities and we are managing to a breakeven level of EBITDA in 2022, which we believe will represent the cyclical trough for this business. In the rail components business, raising rail car loads and rail traffic are driving higher customer demand for our products.

We see 2021 as the trough for our components business and expect higher overall revenue and profitability in 2022. Our wind tower business remains impacted primarily by production tax freight uncertainty, although we continue to see interest and support for a long term extension.

At the same time, the long term outlook remains very positive as the energy market transitions from fossil fuels to renewable energy, which includes wind power.

For 2022, our backlog provides us with a baseline of production with relatively low profitability but maintains key labor and operational footprint to respond effectively when demand improves. Now let’s review our consolidated outlook for 2022.

On Slide 20, we forecast 2022 revenue in the range of $2.1 billion to $2.2 billion and adjusted EBITDA in the range of $280 million to $305 million.

On the top line, the midpoint of our forecast represents an increase of approximately 6% as we anticipate revenue growth in our focus markets, construction products and engineered structures, will be partially offset by softness in our wind towers and barge business.

The midpoint of our adjusted EBITDA range represents an improvement from 2021 and we anticipate maintaining our profitability with adjusted EBITDA margins roughly flat year over year, despite the significant expected margin headwinds from our wind towers and barge businesses in 2022.

This is a direct result of the strategic efforts to shift our portfolio towards higher margin opportunities as well as the steps we have taken over the past year to better align our cost structure with market conditions. Turning to Slide 21, ESG remains a fundamental component of our strategy, and we continue to make progress on our ESG journey.

Over the past few months, we further expanded and diversified our board of directors with the appointments of Julie Piggott and Kimberly Lubel, both of whom bring a wealth of experience and insight into our businesses as we continue our efforts to enhance long term shareholder value.

In 2021, we achieved several ESG-related milestones, including the publication of our first-ever sustainability report in April, and this year we are on track for the release of our 2021 sustainability report in the second quarter. In closing, 2021 was a productive year for Arcosa with continued operational and strategic progress.

As we enter 2022, we will focus on simplifying Arcosa, growing our construction products and engineered structures and preparing our cyclical businesses to ramp up quickly when demand returns. We will do this while maintaining a disciplined capital allocation process to improve return on capital and deliver long term shareholder value.

Operator, I would like to open the call for questions..

[Operator instructions] Thank you. Our first question comes from Julio Romero with Sidoti & Company..

Hi, good morning Antonio and Gail. Thanks for taking the question..

Good morning Julio..

I guess I wanted to ask about the wind tower business. I know you were breakeven in fourth quarter, did $27 million in ’21.

If you could maybe just talk about--I know your guidance is $7 million to $9 million for ’22, maybe just talk about the sequential cadence of profitability in wind towers as we go throughout the year, and then secondly if you could remind us the lead times and how long it takes for an order to turn into revenue for that business. .

Good morning Julio, this is Gail. Yes, I’ll take the cadence question and maybe I’ll turn it back to Antonio for the orders and lead times.

With respect to your question about the $7 million to $9 million of EBITDA guidance for wind towers, we did manage to breakeven, as you indicated, in the fourth quarter, and we expect to return to profitability in the first quarter, so you’ll see a relatively even ramp throughout the year.

We did take a significant order in the third quarter of last year, which gives us continuity for the two plants that we have open today, and so you’ll see, as I said, a [indiscernible] cadence to the EBITDA for the year..

Julio, on the second question, we shut down our facility in Illinois. We still have two plants, one in Oklahoma, one in Iowa. The Oklahoma one is very busy, the Iowa is busy but not full. It normally takes, you know, from the time a project starts to the time we deliver towers, somewhere between 12 to 18 months.

I’m going to expand on the answer because I think as you saw in our comments, our prepared remarks, we said we’re becoming more positive around the business, the cyclical businesses, and the reason for that is even though we don’t have orders, it’s not like the phones are not ringing.

There is a significant amount of work being done and a lot of, let’s say, quotes being asked for very large orders, very, very large orders are being asked for us to quote, so I think this business is set up to come back as soon as the PTC is enacted. We’re positive that there’s conversations happening.

I think it’s now an independent bill that’s being discussed rather than part of a bigger bill. As I mentioned in my prepared remarks, with this energy transition from fossil fuel to renewables, it needs to happen soon because of the delivery time, so I’m actually excited about what I’m hearing in terms of quotes.

If you remember, we also have anti-dumping against many nations in this business, so we are very well set up for when it comes back..

Understood, that’s helpful. I guess secondly on the cyclical businesses, you’re obviously prioritizing manufacturing flexibility and trying to be ready for a recovery. It sounds like based on the commentary, you have a better line of sight for recovery in wind towers as opposed to barge.

Would that be fair?.

I think both--you know, six months ago as we were closing second and third quarters, it was hard to see the light at the end of the tunnel because plate prices were continuing to go up, there was really no discussion on the PTC. I think wind towers, we have the line of sight in terms of orders that are actionable.

Some of them tell us our PTC, let’s say waiting for PTC. Some others tell us they are not waiting for that, but I’m not sure about that. I think I’m feeling very positive about how wind towers is progressing. Barge, on the other side, I’m also seeing the light at the end of the tunnel. Steel prices have come down dramatically in hot roll.

Plate is flat - plate has not come down, at least on the weekly indexes; however, if you look at the forecast, it’s coming down, and as I say in my remarks, we have been able to negotiate a significant discount to current prices, and that leads me to believe plate is coming down.

We’re getting multiple quotes for prices that are below current prices, so I think we’re almost there where it starts to come down and then, as I mentioned in my remarks, the pent-up demand in barge is incredible. We continue to get calls from customers.

The barge utilization is very high on the dry cargo side, and all the fundamentals are there for it to start recovering. The scrapping has been very large - hard to come to a number, but anecdotally it’s been very, very high, so I think the fleet is ready for replacement..

That’s helpful. Thanks for taking the questions, and best of luck in ’22..

Thank you..

Thank you. Our next question comes from Brent Thielman with DA Davidson..

Great, thanks. Good morning. Antonio, on the construction products business on the aggregates side in particular, you did a good job on margins while some of your peers have seen more challenges just related to increases in cost for diesel and other inputs.

I guess the question is can you sustain these levels of margin given those cost issues? Is there a catch-up to come that we just haven’t seen yet? How should we think about those issues going through 2022?.

That’s a really good question. I think our team has done a very good job managing costs. At the same time, we also had two large acquisitions in 2021 and there are synergies that we’re generating through those acquisitions, not only in terms of cost synergies but also in terms of process synergies.

I think we have a really experienced team in our legacy aggregates, we’ve got a great team in both of the new acquisitions, and there are synergies we’re generating by, let’s say, taking best practices from all these sites, and that’s, I think, a little bit of what you’re seeing.

Those best practice sharing and improvements in our synergies, everything from pricing discipline to volume discipline to focus on margins, there is a significant change in culture in some of these businesses as we refocus towards margin rather than just pure volume, and that’s going to continue in 2022 as we continue to not only integrate these businesses, but as we said, we have continued with a pipeline of opportunities for bolt-ons, and when we do bolt-ons, that’s part of what we’re trying to generate, those synergies in terms of processes.

So to answer your question, I think we have a good forecast for 2022 to continue to maintain and grow our margins. .

Okay, that’s helpful.

Then Antonio, I guess with leverage now nearing the lower end of the target range, maybe just your current thoughts on moving to deploy the balance sheet again towards M&A, or do you still want to wait and digest last year’s big transactions?.

That’s a really good question, and I think the balance sheet is a little bit of a--we have 2.1 debt to EBITDA, but I mentioned in my remarks the cyclical businesses are producing 20% of what they were producing in EBITDA in 2018, so--and we are seeing, feeling positive about those businesses recovering some time in the near future.

When you look at the balance sheet from that point of view, I think we have even more flexibility than the books represent. As I said, our main focus is going to continue to integrate these things. We do have a pipeline of bolt-ons, and I think you will see us do bolt-ons during 2022. We also want to work on the simplification of Arcosa.

We have a significant amount of opportunities to do that, and finally we have capex this year that is higher. You saw Gail, that we’re growing our capex pretty significantly. I’m a big believer that the biggest return on capital and the best investment for our shareholders is grow organically.

Organic growth brings returns on capital that are higher than acquisitions, and we have a lot of opportunities to deploy capital there, so I think you will see us do some bolt-ons. Of course, the balance sheet allows us, if there is a good opportunity larger than just a bolt-on, we will continue to evaluate it. I’m not saying we won’t do it.

It’s not the focus right now, but if something comes up that’s actually very strategic and fits very well, we will do it..

Okay, great. Thank you Antonio and Gail..

Thank you. Our next question comes from Garik Shmois with Loop Capital..

Hi, this is Jeff Stevenson on for Garik. Thanks for taking my questions today..

Good morning..

Thank you, good morning..

Good morning.

My first question is just how construction products bidding activity has been to start out the year, and then also, can you talk about the benefits of the new federal infrastructure package on construction products and when it could start to show up in volumes?.

Sure. The bidding has been strong during the first part of the year. I think we’ve seen a strong start for our business. You take away some of the weather that we’re having today with the ice and things like that, but overall very strong all over our footprint, I would say, so we’re feeling very positive about how we’re starting the year.

In terms of the infrastructure package and the impact on our business, I would say that we don’t expect anything in the first part of the year. We said we would start seeing something in the second part of the year, probably 2023 growth.

The beauty of it is it’s a several-year plan, so I think this gives us visibility and allows us to plan and allows us to do it in a multi-year thinking process, which is to me very important. It’s not only in construction products that we are seeing it.

We see the infrastructure bill for our utility structures has been very important, for traffic structures, for telecom, even for our barge business and rail components. We have a broad exposure to the impacts of this infrastructure bill, so we’re very excited about that.

I think it’s not an early 2022 impact, but you are going to start seeing it and I think it’s going to be a ramp-up towards higher impact as the quarters go by..

Okay, that’s very helpful, Antonio. Then how much longer can barge orders be deferred with high steel prices? Are we getting close to an inflection when deferrals can’t be deferred much longer? Any more color there would be helpful..

Yes, I think you’re absolutely right. I think we are--with the steel prices that we are seeing now, I think we are at a tipping point. We are right there, I think, so I think it’s a--when you look at the forecast for steel, a year ago we were talking we don’t know.

I think now it’s a matter of months where steel prices, if the forecasts are correct, we’ll start seeing prices come to a point where people pull the trigger. I can’t tell you exactly when or how, but I’m feeling positive about the timing and getting very close..

This is Gail.

I’d add we included some industry data in our webcast slides, so bottoms-up demand side would say looking at the outlook for commodities, looking at the condition of the current fleet, that construction needs to support this outlook need to be north of 700 deliveries per year, and you can see from some of the materials we’ve provided that there’s been under-investment in the fleet, in the dry barge fleet for really the last five years, significantly below those replacement levels.

Obviously we need relief on the steel side, but the fundamentals support a very strong market in pent-up demand over these last few years..

Great, thank you, and best of luck moving forward. .

Thank you. Again as a reminder, please press star, one to join the queue. Again, that is star, one if you would like to ask a question. Our next question comes from Stefanos Christ with CJS Securities. .

Good morning, thanks for taking my questions. .

Good morning..

Could you talk a little bit more about organic growth in 2021 construction products and what you expect in the next year--or in this year, rather, 2022?.

Sure, so starting with 2021, when you strip out the acquisitions, we had nice growth both in our traditional businesses. I would say that a lot of the growth that we expect for 2022 is coming from we are opening, as Gail mentioned, two new greenfields that we are working on.

Both of these greenfields--one of the greenfields came from an acquisition and was already being developed, the other one didn’t. We are--and I’ll split it in several pieces. I would say on the aggregate side, the new greenfields, there is also growth in terms of expanding some of our mines that we have, that we are actively working on.

On the shoring side - I’m talking about all the products in construction - on the shoring side, it’s geographic diversification, we are expanding in the west of the U.S. with a new depot we opened there in early 2021 or late 2020, so that’s helping us grow in our shoring also, and we’re expanding our customer base.

Like with aggregates, we have a lot of projects going on in specialty materials, lots of projects going on, everything from improving our margins by reducing our costs in energy, and many other projects developing new products for our specialty materials. Finally, our plaster plant, plaster has been a business that was impacted by the pandemic.

It’s recovering, it’s coming back, and we’re seeing really nice growth early this year or late in 2021. We have a new expansion of our plaster plant that has really good margins, we have a really nice market position, and customers are really excited about our plant because there is not enough supply of this product.

I think, as I mentioned before, organic growth is something that has significant return on capital. We’re really focusing on that, and that’s why we’re deploying capex this year on all of the construction businesses..

Perfect, and that leads to my next question. I assume those greenfield projects are part of your capex spend.

Are there any other projects we should be thinking about, other opportunities?.

Yes, I would say--you know, I always say that the good news for our company is we have more projects than money. By having a lot of projects, it allows us to pick and choose the best ones. We have projects that are being developed right now.

The reason we’re not more aggressive and faster at this, I’m a big believer in having the engineering perform completely before we pull the trigger, so when we tell you the plant for plaster is going to cost $20 million, it means it’s going to cost $20 million because we have a fixed price contract with a contractor.

In this inflationary period, we have to be very careful starting up a plant and then overrunning and then the returns don’t happen, so we are working very hard on making sure that the projects we start have a--we know exactly how much it is going to cost, and we can make a good decision about them.

So long answer to tell you, we have a lot of projects, projects that have not been approved by our board, so we are going to be working through them this year and evaluating our capital allocation based on capex, acquisitions, share repurchase and dividend throughout the year..

I appreciate it, thank you..

Thank you. Again as a final reminder, please press star, one at this time if you would like to ask a question. Again, that is star, one if you would like to ask a question. Thank you. At this time, it appears we have no further questions. This does end today’s program. Thank you for joining us. Have a great day..