NWPX (NWPX) Q4 2025 Earnings Call Transcript

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DATE

Thursday, Feb. 26, 2026 at 10:00 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Scott Montross
• Chief Financial Officer — Aaron Wilkins

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TAKEAWAYS

• Record Net Sales -- $526,000,000, up 6.8%, the highest in company history.
• Consolidated Gross Profit -- $103,600,000, up 8.6%, with a gross margin of 19.7% versus 19.4% in the prior year.
• Net Income -- $35,400,000, or $3.56 per diluted share; adjusted net income was $35,600,000, or $3.59 per diluted share, up 11.7%.
• Free Cash Flow -- $47,100,000, or $4.74 per share, exceeding previous expectations and up from $34,300,000.
• WTS Segment Revenue -- $350,900,000, up 3.8%; selling price per ton rose 14% year over year; fourth quarter selling price per ton rose 26%.
• WTS Gross Profit -- $67,100,000, up 7.2%; gross margin of 19.1%, up from 18.5%.
• WTS Backlog -- $346,000,000 at year end, up from $331,000,000 at September 30 and $310,000,000 at year end 2024.
• WTS Production Volume -- Declined 9%; fourth quarter saw a 19% production decline, partially offsetting revenue gains.
• Precast Segment Revenue -- $175,100,000, up 13.3%; sales volume improved 8%.
• Precast Gross Profit -- $36,500,000, up 11.3%; gross margin was 20.8% versus 21.2% prior, with margin recovery expected as nonresidential demand builds.
• Precast Order Book -- $57,000,000 at year end, up from $55,000,000 as of September 30, slightly below $61,000,000 at year end 2024.
• Precast Selling Prices -- Rose 4% year over year due to price increase implementations and product mix changes; fourth quarter prices up 8%.
• Dodge Momentum Index -- Up 50% in December 2025, with commercial up 45% and institutional up 60%, signaling improving nonresidential construction demand.
• Project Spread Initiative -- $10,700,000 in bookings, up from $9,100,000, and bids totaling $66,100,000; Geneva plants in Utah booked $2,100,000 in Park-related projects.
• Boutin Precast Acquisition -- Completed; initial revenue at ~$8,000,000, with management targeting capacity expansion and integration into the Geneva platform.
• Debt Reduction -- $27,400,000 repaid in 2025; credit facility borrowings were $300,000 at year end, enhancing liquidity.
• Share Repurchases -- Approximately 425,000 shares repurchased at an average price of $43.33, totaling $18,400,000.
• Fourth Quarter Net Sales -- $125,600,000, up 5%; consolidated gross profit $26,800,000 (21.3% margin), up 19.2%.
• Fourth Quarter Precast Sales -- $41,700,000, up 12.2%; gross profit $9,000,000, up 16.66% (21.5% of segment sales).
• SG&A Expenses -- $52,800,000 for the year (10% of sales), up 11.9%; forecasted at $52,000,000-$54,000,000 for 2026.
• Capital Expenditures -- $20,200,000 in 2025, with 2026 guidance at $20,000,000-$24,000,000; includes ~$6,000,000 for Precast segment projects.
• Interest Expense -- $2,600,000 in 2025, down from $5,700,000; projected at $1,000,000-$2,000,000 for 2026.
• Income Tax Rate -- 23.8% in 2025, compared to 19.3%, with a 2026 expectation of 26%-27%.
• Data Center-Related Projects -- Approximately 12 projects tied to major data centers, totaling several million dollars in the Precast pipeline, with pricing described as "very good."
• Steel Cost as a Share of COGS -- about 28% for the year; about 25% in Q4.
• Leadership Promotions -- Appointments to key executive roles, including Michael Ray as Executive Vice President for both WTS and Precast, Eric Stokes as Senior Vice President and WTS Group President, Jesus Tanguis to Senior Vice President and General Manager of Precast, and Justin Frotten to Vice President and General Manager of Geneva.

SUMMARY

Management reported bidding strength across both segments, with the fourth quarter representing the highest for the year and setting the stage for a favorable 2026 outlook. The acquisition of Boutin Precast in Colorado was described as a strategic entry into a high-growth market, with additional organic and inorganic investment flagged as a capital deployment priority. Data center-related demand contributed to order pipeline growth, particularly in the Precast segment, as company representatives cited multiple active or pending contracts that entail favorable pricing. Capital allocation priorities for 2026 focus on further Precast expansion, low leverage, and disciplined share repurchases as M&A opportunities arise. Recent executive leadership changes were announced to support ongoing operational integration, margin improvement, and growth strategy execution.

• CEO Montross said, "Quite frankly, just looking at water transmission, we are starting to see a year in 2026 that probably appears a little bit bigger than we thought it was going to be. We originally thought, you know, the 140-some-thousand-ton range; it looks like it is going to be in 150 or so range. At this point, we are seeing heavy bidding in the first quarter and, obviously, that translating into what we are projecting to be relatively strong backlog. In fact, I would say strong backlog as we carry our way through 2026 on the WTS side."
• Management expects first-quarter performance in both segments to "stronger than we have seen in the last few years." despite early weather-related downtime.
• Aaron Wilkins stated steel represented "about 25% [of COGS] for the quarter" and 28% for the year, highlighting relative stability in input costs.
• Guidance for 2026 includes higher revenue, gross margin expansion, continued cash generation, and SG&A expenses estimated in the range of $52,000,000 to $54,000,000.
• WTS segment production volume is projected at "150 or so" thousand tons for 2026, revising initial internal expectations upward from the 140-some-thousand-ton range.

INDUSTRY GLOSSARY

• WTS (Water Transmission Systems): Segment focused on large-diameter and high-pressure steel pipeline systems for water infrastructure.
• Precast: Segment manufacturing precast concrete products and engineered systems for stormwater, wastewater, and related applications.
• Project Spread: Company initiative to offer Precast products through additional WTS facilities, broadening the product portfolio and geographic reach.
• Dodge Momentum Index: Leading indicator published by Dodge Data & Analytics measuring nonresidential building projects entering the planning stage, signaling construction activity trends.
• COGS (Cost of Goods Sold): Direct costs attributable to the production of goods, including raw materials like steel.

Full Conference Call Transcript

Scott Montross: Good morning, and welcome to NWPX Infrastructure, Inc.'s Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Scott Montross, and I am President and CEO of the company. I am joined today by Aaron Wilkins, our Chief Financial Officer. By now, all of you should have access to our earnings press release, which was issued yesterday, 02/25/2026, at approximately 4:00 PM Eastern Time. This call is being webcast, and it is available for replay. As we begin, I would like to remind everyone that the statements made on this call regarding our expectations for the future are forward-looking statements, and actual results could differ materially.

Please refer to our most recent Form 10-Ks for the year ended 12/31/2024 and to our other SEC filings for a discussion of such risk factors that could cause actual results to differ materially from our expectations. We undertake no obligation to update any forward-looking statements. Thank you all for joining us today. I will begin with a review of our 2025 performance and our outlook for 2026. Aaron will then walk you through our financials in greater detail. 2025 was another outstanding year for NWPX Infrastructure, Inc., marked by record financial performance, disciplined execution, operational improvements across our facilities, and sustained demand across our end markets.

First and foremost, we achieved record safety performance in 2025 with a 1.06 recordable incident rate, reflecting our culture and our belief that operational excellence begins with protecting the well-being of our employees. Our annual net sales reached $526,000,000, up 6.8% from 2024 and the highest in our company's history. This performance was supported by continued strength in the WTS bidding environment with the fourth quarter marking our strongest bidding quarter of the year, signaling solid momentum ahead. In Precast, our revenue was strong and margins continued to improve. WTS posted solid revenue and a robust margin as well.

Our strategy drove record consolidated gross profit dollars of $103,600,000, up 8.6% year over year, resulting in a gross margin of 19.7% compared to 19.4% in 2024. This translated into record profitability with earnings of $3.56 per share and free cash flow of $47,100,000, or $4.74 per share, demonstrating the strength, consistency, and quality of our earnings and the durability of our cash generation. Revenue from our WTS segment totaled a record $350,900,000 in 2025, up 3.8% year over year with increased margins.

Our performance reflected higher selling prices per ton, up 14% year over year, driven by an improved product mix and a broader market dynamic in addition to favorable project timing across several large water transmission jobs and another very strong year of bookings associated with good project bidding volume. These gains were partially offset by a 9% decline in the production volume associated with the content of various projects produced throughout the year as well as shifts in project timing. The fourth quarter was exceptionally strong with a 26% improvement in selling price per ton. Consistently healthy bidding environment and a strong project execution all reinforced the momentum we are carrying into 2026.

WTS gross profit reached a record $67,100,000, up 7.2% from 2024, resulting in a gross margin of 19.1%, up from 18.5% in 2024. This improvement was driven by higher selling prices and a more favorable product mix, supported by continued strong customer demand and solid operational execution. Our WTS team continued to execute at a high level on both bids and project management throughout the year. Robust fourth quarter bidding activity increased our WTS backlog, including confirmed orders, to $346,000,000 at year end, up from $331,000,000 at September 30 and well above the $310,000,000 level at year end 2024. We expect the 2026 bidding environment to be relatively consistent with 2025.

Precast revenue increased 13.3% year over year to a new annual record of $175,100,000. Our performance was driven by an 8% improvement in sales volume, reflecting continued growth in the nonresidential portion of our Park business with shipments and production increasing double digits year over year, despite only modest rate declines in 2025 that continued to limit commercial construction activity. This improvement reflects signs of stabilization and an improving trajectory heading into 2026. We also benefited from sustained growth in the residential portion of our business at Geneva in 2025. Leading indicators strengthened as we moved through the year, with the Dodge Momentum Index up 50% in December 2025 versus December 2024.

The commercial sector was up 45% and the institutional was up 60%, indicating positive signals for 2026 and into 2027 for nonresidential construction activity. On pricing, we benefited from a 4% year over year increase in realized selling prices driven by price increase implementations and changes in product mix. Stronger volumes and pricing contributed to an 11.3% year over year increase in free cash gross profit to $36,500,000, resulting in a gross margin of 20.8%, down modestly from 21.2% in 2024, primarily due to lower Park production volumes early in 2025 and product mix. We expect margins to continue recovering as nonresidential demand builds.

Our Precast order book ended the year at $57,000,000, up slightly from $55,000,000 at September 30, reflecting solid momentum heading into 2026, and modestly below the $61,000,000 level at year end 2024. As we continue to execute our long-term strategy, we are making targeted organic investments across our footprint to expand capacity, enhance efficiency, and support the growth of our platform. These efforts are taking shape across several areas of the business. First, by expanding Precast capabilities across our network, and evaluating opportunities to introduce Precast into other WTS facilities through our product spread strategy, which remains a core component of our long-term growth plan.

In Project Spread, we bid on $66,100,000 of projects and booked a total of $10,700,000 in 2025, up from $9,100,000 in 2024. This initiative has helped improve capacity utilization at our Precast plants and has continued to gain traction at our Geneva plants in Utah, where we booked approximately $2,100,000 of Park-related projects in 2025. Currently, we are advancing efforts to expand Park and other Precast-related products to additional Water Transmission Systems locations. Looking ahead to 2026, our goal is to book $11,700,000 of product spread-related projects.

Beyond the product spread strategy, we are also investing directly in plant capabilities to support future growth such as enhancing production at Geneva with the installation of a new catch basin machine at our Orem plant. In addition, we are advancing efficiency initiatives at Park by evaluating additional Precast infrastructure capabilities at our Ferrous plant to broaden the product offering and improve absorption. And we are investing in new forms and equipment at our WTS plants to support free cash production and further advance our product spread strategy.

In parallel with these organic investments, we continue to pursue disciplined M&A opportunities in the Precast-related space that would accelerate progress on our Precast strategy, expand our manufacturing capabilities and production efficiencies, and broaden our geographic reach and product portfolio. To that end, we are pleased to announce that we have completed the acquisition of Boutin FreeCast, a single-site Precast producer in the high growth Pueblo, Colorado market. This acquisition is directly in line with our strategy to establish a beachhead in markets where we have strong interest in expanding. We believe the Colorado market has significant long-term growth potential. And while this facility is relatively small today, we see meaningful opportunity to grow its capabilities and footprint over time.

Consistent with this approach, we are continuing to evaluate both single plant and larger acquisitions to accelerate Precast expansion and support long-term growth. Our other capital priorities include paying down debt and returning value to shareholders. In 2025, we repaid $27,400,000 of debt, ending the year with significant liquidity. At the end of 2025, we had $276,000 drawn against our credit facility. We also repurchased approximately 425,000 shares at an average price of $43.33, totaling $18,400,000 for the full year 2025. I will now turn to our outlook for 2026.

In our WTS segment, we expect higher revenue compared to 2025, driven by a more favorable volume and product mix, despite the adverse impact of normal weather-related seasonality, which has resulted in some unscheduled downtime across three WTS facilities earlier in this quarter. Even with these factors, we expect margins to be higher than 2025. We entered 2026 with a robust WTS backlog and elevated bidding levels, providing strong visibility in the near-term demand. As such, we anticipate full year bidding levels to be relatively consistent with the strong levels seen in 2025. We remain encouraged by the level of activity across current and upcoming water transmission projects, which are coming with improved economics and margins.

For a more complete view of these projects, please refer to our investor presentation on our website. We entered 2026 with a stable and healthy order book, and we expect a stronger year for the Precast business. Both nonresidential and residential demand remain healthy, supporting continued momentum across our Park and Geneva platforms. For 2026, we expect Precast revenue to be higher than 2025 with improving margins driven by solid demand, higher production levels with improved absorption, and a strengthening order book.

While weather can always affect the start of the year, we expect the first quarter on a consolidated basis to be stronger than in recent years and believe that we are well positioned to deliver a very strong year in 2026. Before I conclude, I would like to highlight the recent strategic leadership promotions we announced to position NWPX Infrastructure, Inc. for continued growth and operational excellence. Michael Ray has been promoted to Executive Vice President, assuming operating and commercial oversight for both the WTS and Precast segments. Mike has been instrumental in advancing our Precast strategy and supporting the acquisitions of NWPX Infrastructure, Inc. Geneva and NWPX Infrastructure, Inc. Park.

Mike also has significant experience in operating WTS facilities at NWPX Infrastructure, Inc. He has been with the company since 2007 and will succeed Miles Britton, who will retire in April and is assisting with the transition priorities. We thank Miles for his many years of contributions and wish him well in his next chapter. Next, Eric Stokes has been promoted to Senior Vice President and WTS Group President. Since joining NWPX Infrastructure, Inc. in 2008, Eric has played a critical role in strengthening performance across the WTS segment. Eric has been very instrumental in implementing many improvements that have propelled the WTS business to its current level of performance.

Jesus Tanguis has also been promoted to Senior Vice President and General Manager of Precast after joining the company in January 2024. He will oversee operating and commercial activities for both NWPX Infrastructure, Inc. Geneva and NWPX Infrastructure, Inc. Park. And finally, Justin Frotten has been promoted to Vice President and General Manager of NWPX Infrastructure, Inc. Geneva, providing commercial and operating oversight for our three Utah facilities. Justin began with NWPX Infrastructure, Inc. Geneva in 1998 and has taken on roles of increasing responsibility, most recently serving as multisite operations manager.

We are proud of our ability to promote from within and continue building a leadership team capable of scaling our operations and positioning NWPX Infrastructure, Inc. for our next phase of growth. To close, I am extremely proud of what we were able to achieve in 2025 across our financial, operational, and safety metrics. Our teams delivered exceptional execution throughout the year, and I want to thank everyone at NWPX Infrastructure, Inc. for their commitment to our strategy and to maintaining a strong safety culture. With a strong WTS backlog, constructive bidding environment, and a healthy Precast order book, we believe the foundation we built positions NWPX Infrastructure, Inc. to deliver another very strong year and enhance shareholder value.

As we look ahead, our near-term priorities remain: one, maintaining a safe and rewarding workplace; two, focusing on margin over volume; three, intensifying our pursuit of strategic acquisitions; four, implementing cost efficiencies across the organization; and five, returning value to shareholders when M&A opportunities are limited. I will now turn the call over to Aaron to walk through our financials in greater detail. Thank you, Scott, and good morning, everyone. I would like to echo Scott's remarks as we recognize another

Aaron Wilkins: consecutive year of record-setting safety performance. Safety remains central to our values and is believed to have a direct tie to the record financial results I will review today. Thank you to everyone for keeping safety a priority again this year. I will now turn to our profitability. Consolidated net income for the fourth quarter was $8,900,000, or $0.91 per diluted share, compared to $10,100,000, or $1.00 per diluted share in 2024. The year-over-year decline in reported results is driven primarily by nonrecurring items, most notably a $1,800,000 pension termination settlement loss recorded in 2025. It was unique to the year.

Both periods also reflect benefits recorded in the tax provision from the lapse of statutes of limitations related to previously uncertain tax positions, although the 2025 benefit was less than half of what was recognized in 2024. Excluding these items from both quarters, adjusted net income for the quarter increased to $9,100,000, or $0.93 per diluted share, compared to $7,800,000, or $0.77 per diluted share in 2024, reflecting a year-over-year increase of 16.6%. I encourage you to refer to the corresponding reconciliation of these adjustments in our earnings release. For the full year 2025, consolidated net income was a record $35,400,000, or $3.56 per diluted share, and included the unique items previously referenced for the fourth quarter.

This compared to $34,200,000, or $3.40 per diluted share in 2024. Excluding those items from both years, 2025 adjusted net income increased to $35,600,000, or $3.59 per diluted share, compared to $31,900,000, or $3.17 per diluted share in 2024, a year-over-year increase of 11.7%. Our fourth quarter consolidated net sales increased 5% to $125,600,000 compared to $119,600,000 in the year-ago quarter. WTS segment sales increased 1.8% to $84,000,000 compared to $82,500,000 in 2024. This growth was driven by a 26% increase in selling price per ton due to changes in product mix, which was partially offset by a 19% decrease in tons produced, resulting from changes in project timing.

Precast segment sales in the fourth quarter increased 12.2% to $41,700,000 compared to $37,100,000 a year ago. Our performance was driven by an 8% increase in selling prices due to changes in product mix and a 4% increase in volume shipped. The products we manufacture are unique, and the average sales prices for both of our operating segments, as well as the Precast shipment volumes and the Water Transmission Systems production volumes, cannot be relied upon as comparable metrics between periods due to variations in product mix. Our fourth quarter consolidated gross profit increased 19.2% to $26,800,000, or 21.3% of sales, compared to $22,400,000, or 18.8% of sales in 2024.

Water Transmission Systems gross profit increased 20% to $17,800,000, or 21.2% of segment sales, compared to gross profit of $14,800,000, or 17.9% of segment sales in 2024, primarily driven by higher pricing. Precast gross profit increased 16.66% to $9,000,000, or 21.5% of segment sales, from $7,700,000, or 20.7% of segment sales in 2024, primarily due to changes in product mix. Selling, general and administrative expenses for the quarter increased 15% to $13,700,000 compared to $11,900,000 in 2024, due to higher incentive compensation and wage expense. For the full year, SG&A expenses increased 11.9% to $52,800,000, or 10% of consolidated net sales, compared to $47,200,000, or 9.6% of sales in 2024, due to higher performance-based incentive compensation, wages, and benefits.

For the full year 2026, we estimate our consolidated selling, general, and administrative expenses to be in the range of $52,000,000 to $54,000,000. Depreciation and amortization expense in the fourth quarter of 2025 was $4,900,000 compared to $4,800,000 in the year-ago quarter. For the full year, depreciation and amortization expense was $19,400,000 compared to $19,000,000 in 2024, and we expect depreciation and amortization expense to be approximately $20,000,000 to $22,000,000 for the full year 2026. Interest expense decreased to $400,000 from $900,000 in 2024 due primarily to a decrease in average daily borrowings.

For the full year, interest expense decreased to $2,600,000 compared to $5,700,000 in 2024, and for the full year 2026, we expect interest expense to be approximately $1,000,000 to $2,000,000. Income tax expense for the full year 2025 was $11,100,000, resulting in an effective income tax rate of 23.8%, compared to $8,200,000 in the prior year or an effective income tax rate of 19.3%. Our effective tax rate for 2025 and 2024 was primarily impacted by the realization of uncertain income tax positions due to the lapse in statutes of limitations from the year the tax attribute originated.

We do not expect to realize similar attributes in 2026 and therefore expect our tax rate for the full year to be within the range of 26% to 27%. Next, I will transition to our financial condition. As of 12/31/2025, we had $300,000 of outstanding borrowings on our credit facility, leaving essentially the full borrowing capacity on our credit line. For the quarter, net cash provided by operating activities was $36,000,000 and remained relatively consistent with 2024. For the full year 2025, we generated net cash provided by operating activities of $67,300,000, a 22.2% increase from the $55,100,000 in 2024, primarily due to a $13,400,000 increase in cash provided by net income adjusted for noncash items.

Our capital expenditures for the fourth quarter were $5,200,000 compared to $4,200,000 in 2024. For the full year, our CapEx totaled $20,200,000 compared to $20,800,000 in 2024. For the full year 2026, we anticipate our total CapEx to be in the range of $20,000,000 to $24,000,000, including approximately $6,000,000 in various investment projects, most notably to support Precast product spread as well as other initiatives to grow our Precast segment businesses. Accordingly, we generated positive fourth quarter free cash flow of $30,800,000 compared to $31,900,000 in the year-ago quarter. For the full year, free cash flow totaled $47,100,000, which exceeded our expectations and compared to $34,300,000 in 2024.

For the full year 2026, we anticipate free cash flow to range between $40,000,000 and $46,000,000. As we have emphasized, consistent strong cash generation remains a top priority for our leadership team, supporting our ability to drive growth both organically and through disciplined M&A as appropriately valued opportunities arise. We remain committed to enhancing shareholder returns through our capital allocation strategy, which includes continued investment in growth-related CapEx projects, M&A, including our recent acquisition of Boutin Precast that Scott highlighted, and repurchasing shares under our 10b5-1 trading plan. To close, we are extremely pleased with our fourth quarter performance, which capped another record year for the company.

We entered 2026 with real momentum, supported by a strong WTS backlog, a stable bidding environment, and improving trends across the Precast markets. With a strong balance sheet, ample liquidity, and continued improvement in cash generation, we remain focused on driving sustainable long-term growth through disciplined capital allocation. On behalf of the entire management team, I would again like to thank our employees for their commitment to safety as well as their unwavering dedication to operational excellence, both of which were central to our record results in 2025. I would also like to thank our shareholders for their ongoing support. I will now turn it over to the operator to begin the question-and-answer session.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, please pick up your handset before pressing the corresponding numbers. One moment, please, while we poll for your questions. Our first question comes from the line of Brent Thielman with D.A. Davidson. Please proceed with your question.

Brent Thielman: Great. Good morning. I mean, good margin expansion in both segments here, fourth quarter, and it sounds like that will continue here into the first quarter. I do not know if you could offer any more color just in terms of where the bar is for margins as we think about the full year 2026. Ryder business group. It does not really seem to me that they should be going backwards.

Scott Montross: No. I do not think—I think you see a relatively steady climb. It is obviously a slow climb over a period of time for both the water transmission stuff and the Precast stuff. Quite frankly, just looking at water transmission, we are starting to see a year in 2026 that probably appears a little bit bigger than we thought it was going to be. We originally thought, you know, the 140-some-thousand-ton range; it looks like it is going to be in 150 or so range. At this point, we are seeing heavy bidding in the first quarter and, obviously, that translating into what we are projecting to be relatively strong backlog.

In fact, I would say strong backlog as we carry our way through 2026 on the WTS side. You know, on the Precast side, I think the margins are certainly recovering on the nonresidential stuff. We are seeing the Momentum Index going up, and we are seeing the business specifically at Park kind of follow after that, and the margins are starting to creep up to the point where they used to be before we saw a little bit of falloff in the nonresidential market a couple of years ago.

We just see—I mean, we are—you know, in total, Brent, for both sides of the business, not only the water transmission piece, but the Precast piece, we are seeing what we consider to be a very strong 2026.

Brent Thielman: Awesome. And then, Scott, just to follow up—or Aaron, I guess with the acquisition, is there going to be some additional capital that gets plugged into that, maybe to scale it? I do not know if you can offer any color there. More to come on that front.

Scott Montross: Yeah. I think the thing about DISH, Brent—does a lot of the same stuff that Geneva does, right? Same kind of products. They do manholes, risers, RCP, you know, vaults, and things of that. There probably will be a little bit of capital as we go and we are dealing with a business that is probably $8 or so million of revenue as it sits right now. But we think they have got good bones to the business. They have got, obviously, their own batch plant. There are a couple batch plants that are there that are even still in boxes, which are nice.

And we think with probably relatively limited capital doubling the size of the business in the next two to three years is probably what we are going to see. And, ultimately, what our thought process is in this is to kind of roll this under the Geneva umbrella, Brent, and really make it a fourth Geneva plant because of the similarity to the rest of the Geneva business. But—and I will say—the interesting thing about this is that it is about eight or nine acres, somewhere between eight or nine acres.

It is actually the first property that we own on the Precast side of the business, which is obviously something we covet going forward too for expanding on various properties.

Brent Thielman: Yeah. Interesting. Okay. Well, thanks, guys. I will pass it on.

Scott Montross: Thanks, Brent.

Operator: Thank you. Our next question comes from the line of Julio Romero with Sidoti & Company. Please proceed with your question.

Julio Romero: Good morning, Scott and Aaron. This is Justin on for Julio. Congrats on the Boutin acquisition. Can you talk a bit about your interest in the Colorado area? And are there any roll-up opportunities in that market?

Scott Montross: Yeah. I think the Colorado area is interesting, Justin, because really we are seeing quite a bit of expansion in Colorado. Normally, I think a lot of the expansion has been more toward the Denver County and Denver Proper. But we are now seeing the El Paso County part of Colorado, which is just north adjacent to where the— that we bought with Boutin, being really the biggest construction market over the next few years that we are seeing in the state of Colorado. So we think that there is a lot of growth opportunity from the perspective of expansion of the business just organically with the amount of stuff that is out there.

And as far as other potential roll-up opportunities, I mean, there are things out there, but it—which is the same thing that we always say—they have got to be practical, and they have got to be willing to want to transact. And really, that is the thing we are going to face, Justin, is people that are willing to transact. But this whole thing with adding a plant in Colorado goes along with our strategy of creating a beachhead in some place we want to be through a single plant and continuing to grow that way.

And while we are seeing a little bit of a dearth of availability of other Precast assets in the market, we will continue to do that to grow our business as we go forward.

Julio Romero: Great. Thanks for the color there. Shifting to WTS, can you talk about any incremental demand you may be seeing from the private sector? There has been talk about data centers and other private sector jobs driving demand for water infrastructure. Just curious if NWPX Infrastructure, Inc. can play any role in the private sector there.

Scott Montross: Yeah. I think—I think you originally asked was—was it towards specifically NWPX Infrastructure, Inc. or was it WTS? What I would say is when the data center boom really began, we saw a little bit of activity around the WTS piece. I mean, there are constantly water resources under demand for different areas. So it is really hard to get a handle for the WTS piece, but we have seen a couple associated with it. What I would tell you is that we have seen significantly more associated with data center-related stuff on the Precast side of our business.

And, in fact, I was kind of—oh my god—shocked, you know, because we cover this once a month with the different business units, Precast and Water Transmission. And right now we have somewhere in the area of about 12 projects that are either things that we produced and shipped or in the process of making or we are waiting for POs on that are data center-related projects that are out there that are really several million dollars’ worth of work that we see that is in the data center realm. The issue is we cannot really say that much about it because they are pretty secretive, and they are having us sign NDAs.

But I think this is kind of the theme that you can go with. Data centers have a water management problem, intrinsically. One, moving water, right? Just moving water, which—what we do is we allow them to move water by supplying pump lift stations from our various Precast plants. Water distribution, like measuring water in and out of buildings, with meter vaults and things like that. You know, wastewater solutions where we might need to divert wastewater to different areas for treatment and so on and so forth. And then, you know, the diverter valves with moving waters to different segments of the facilities. So this is what we do.

We provide those kinds of products to be able to do that at data centers. And this stuff is all prepackaged from us, right? This is what we do at Park USA. Because really Park has the biggest piece of what we are seeing on the data center side, and quite frankly, a lot of work we are doing—we have a product development group that is at Park USA. A lot of what they are doing is developing products—helping develop products that serve some of the needs of these data centers that are being constructed, a lot of which are around Texas.

And some of it is, I guess it is kind of innovation on the fly, because there are different needs for the different data centers, so we are working through developing this stuff. And I think the most interesting thing is that, you know, the pricing on these is not really an issue. It is really the speed of delivery that you can get it to them. So very good pricing on the data center work too. So that is probably a little bit more than you wanted on it, but that is kind of what is going on around this.

Julio Romero: Yeah. Very exciting, and thanks for the color again. And I believe you just mentioned that there were 12 projects. So just curious, were any of those projects included in the order book for the fourth quarter?

Scott Montross: Yeah. We have seen some of those in the fourth quarter order book. Yeah.

Julio Romero: Okay. Great. Thanks. Thanks for taking questions. I will turn it back.

Scott Montross: The problem is we are under NDA. We cannot really say a significant amount about these. They are pretty secretive.

Operator: Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.

Ted Jackson: Thank you very much, and congratulations on another just fabulous quarter, guys.

Scott Montross: Hey, Ted. Thanks, Ted.

Ted Jackson: So going into things, I wanted to start with the acquisition and just kind of get a handle on how it will flow through the model. So you spent $9,000,000 for it. Assume you are going to use your credit line, and we will see, you know, get the debt on the credit line pop up to $9,000,000, and then we will see, call it another $9,000,000 in the financing section of the cash flow statement.

Aaron Wilkins: Yeah. We will book the purchase price through the line of credit and hopefully pay that down relatively quickly. From the cash flow statement perspective, Ted, yeah, the line financing itself will be in the financing section. Obviously, the investment in Boutin will show up in the investing section.

Ted Jackson: Okay. And then, you know, bringing that onboard and, you know, as Scott said, making it, you know, Geneva plan. You know, it begs the questions with regards to tasks that you need to take to integrate into NWPX Infrastructure, Inc. And so, you know, can you talk a little bit about, like, you know, things you need to do, ERP system, sales systems, you know, synergies that you might have, CapEx that might need to be done around that and even just kind of the things that you need to do to, you know, kind of bring this, you know, new business into the fold.

Aaron Wilkins: Yeah. I mean, a lot of it, Ted, is really—even before you get to like the ERP and systems and things like that—you really kind of focus on culture and getting things that are most core to our culture, which, as we have talked about, has been safety. So I know we have some people that have been traveling already to start that process. You make that migration and you start thinking about how fast you can kind of get them into the fold for reporting numbers, and our process—our thought process—on that is really to try to integrate them pretty quickly into a developed system that we already have for the Geneva business.

So because of the familiarity with the Geneva team with that system, and I have discussed it earlier, that team’s responsibility for this integration and the eventual growth of this business, which is expected to be pretty dramatic. Getting them built in, you know, by about the middle of the second quarter will be a good pace to not over-inundate the employees that we have—the new employees that we have in Colorado—but also to be mindful of the needs that we will have as, you know, getting them to be able to report as a part of a public company.

That will really be the focus, and a lot of the calories will be expended to get them integrated in and part of the fold.

Ted Jackson: But you do not see much of a heavy lift to bring these guys in. It is not going to be like, you know, the—I mean, actually, kind of some of the rigmarole you had with regards to Park. And—yeah—you know, just not having that probably makes it all easier for you to just drop in and go. So that is actually good to hear. Then here is a good question—you know, probably Scott will want to weigh in on this one.

But given the guidance that you are getting for free cash flow and where your debt position is at this particular moment, I mean, you know, there is a good chance you are going to exit 2026 and be debt free. What are you going to do with all that cash, Scott? I mean, is there an—for you as you go forward—to maybe, you know, kind of accelerate on the organic side and the things that you are doing to grow the Precast business? You know what I mean? Are you just going to, you know, buy stock? Are you going to let it, you know, just accumulate on your balance sheet?

You know, what are you—what are you thinking with that? Given kind of the guidance and what your capital structure is right—

Scott Montross: The organic growth piece of the business and expanding on the plant in Tracy, California, the one in Adelanto, California, some of these other plants into the Precast business is kind of top of mind, with the expansion on the organic side. You know, because as we look at—and we have talked about this—as we look at the potential for acquisitions and M&A stuff, I mean, they are kind of few and far between right now.

So without those there, we will look to step on the gas for our organic growth, and, Ted, we will continue to look at areas where we can find single plant opportunities where we can create a beachhead and grow the company in areas where we want to grow. So I think that is going to be the main focus of what we are doing as we move forward. And then, ultimately, I think we always have a situation where we will be looking to potentially buy stock back and continue to provide value to the shareholders when things are relatively slow on either the organic growth side or the M&A side.

We are going to continue to do that to create value. So that really, I think, is the plan, and keep our debt low and our powder relatively dry so that when something comes up—and it eventually will come up; it is a kind of a transformative situation—that we are ready to be able to do it. So that is kind of the sequencing of how we are viewing things as we move forward.

Ted Jackson: It is a nice position to be in, Scott. I mean, it is just that simple. My last question, Aaron, is—I am just—it is a model tweak for me, but can you give me, you know, the percentage of steel as it was for cost of goods for the fourth quarter?

Aaron Wilkins: Yeah. I mean, we are a steel—let me see here. Let me get pulled up that number, Ted. You know, we were about 28% for the year and a little less than that for the fourth quarter, Ted. We actually— that for the fourth quarter.

Ted Jackson: You broke up. You said what for the quarter?

Aaron Wilkins: About 25% for the quarter.

Ted Jackson: Okay. Wow. Okay. That is great. So, you know, and I want to say one last thing is, you know, I rue the day that I stepped to the sidelines with regards to NWPX Infrastructure, Inc. I mean, you guys—you are just executing on everything. You know, I mean, you have a great wind in your sails, and it is not just the, you know, the macro backdrop. It is actually the execution as well. And I just wanted to tell you, you know, I made a mistake with regards to what I did with my rating, and I am just—I am just super impressed with the degree, guys. Okay? Thanks.

Scott Montross: Yeah. Thanks, Ted. Appreciate it.

Operator: Thank you. We have reached the end of our question-and-answer session. I would like to turn the call back over to Mr. Montross for any closing remarks.

Scott Montross: Okay. Just a couple of things. A couple of takeaways as we wrap up here. Obviously, 2025 was a record year for NWPX Infrastructure, Inc. I think the things besides the financial metric and the operational performance—I think the strategic priorities that we continue to push. The thing that we are most proud of for the year is the continued improvement in the safety performance, and that is a big part of our culture at the company. It is going to continue to be. Looking at the water transmission business, bidding is very healthy right now.

We see a strong bidding environment in the first quarter and maybe a little bit larger demand in 2026 than we originally thought as we were heading into the year. And we have got a Precast platform that really is continuing to grow. And now a nonresidential piece that is performing well with the margins continuing to move up the way we thought they were going to move up. And, you know, we have continued to make progress in our long-term strategy. The acquisition of Boutin FreeCast, adding to the Precast side of the business and continuing to grow there with organic growth potential there in different parts of the company.

We are going to continue to push that forward and capture growth as we move forward. I think the biggest thing is looking ahead into 2026. We have strong order books in both segments, and we are focusing on the first quarter despite some of the weather-related impacts that we saw earlier in the year, which, quite frankly, resulted in some downtime early in the first quarter for us. We are expecting to see a first quarter in both the WTS and the Precast side of the business that is stronger than we saw in 2024 and probably stronger than we have seen in the last few years. And I think the leadership team—you know, we have had some retirements.

Miles Britton, who I have worked with and around for 29 years, who we will miss greatly, obviously is into his retirement years, and we congratulate him on that. And I think the people that are coming up and replacing him are strong and create even more strength as we move forward growing the company in the future. And we are confident in the opportunities ahead and remain focused—just disciplined—on execution, safety, and delivering long-term value to shareholders. And, you know, I think in the final closing, with what we are seeing in front of us now for 2026 is what we would term as a very strong 2026.

So thank you, and we will see you again in late April—late April. So thank you very much.

Operator: Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

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