NWPX Infrastructure Q2 2025 Earnings Report

NWPX Infrastructure EPS Results

• Actual EPS: $0.91
• Consensus EPS: $0.72
• Beat/Miss: Beat by +$0.19
• One Year Ago EPS: N/A

NWPX Infrastructure Revenue Results

• Actual Revenue: $133.18 million
• Expected Revenue: $120.93 million
• Beat/Miss: Beat by +$12.26 million
• YoY Revenue Growth: N/A

NWPX Infrastructure Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: After Market Closes
• Conference Call Date: Friday, August 8, 2025
• Conference Call Time: 10:00AM ET

Northwest Pipe Company, together with its subsidiaries, engages in the manufacture and supply of water-related infrastructure products in North America. It operates in two segments, Engineered Steel Pressure Pipe (SPP) and Precast Infrastructure and Engineered Systems (Precast). The SPP segment offers large-diameter and high-pressure steel pipeline systems for use in water infrastructure applications, which are primarily related to drinking water systems. Its products are also used for hydroelectric power systems, wastewater systems, seismic resiliency, and other applications. In addition, this segment makes products for industrial plant piping systems and certain structural applications. The Precast segment provides stormwater and wastewater technology products, precast, and reinforced concrete products, including reinforced concrete pipe, manholes, box culverts, vaults and catch basins, pump lift stations, oil water separators, biofiltration units, steel casing pipes, and bar-wrapped concrete cylinder pipes, as well as pipeline system joints, fittings, specialized components, and other environmental and engineered solutions. The company sells its water infrastructure products under ParkUSA, Geneva Pipe and Precast, Permalok, and Northwest Pipe Company brands primarily to installation contractors. Northwest Pipe Company was incorporated in 1966 and is headquartered in Vancouver, Washington.

NWPX Infrastructure Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Record second quarter net sales of $133.2 million (+2.8% YoY), diluted EPS of $0.91, and positive free cash flow of $3.1 million, a $17.6 million improvement from last year.
• Positive Sentiment: Water Transmission Systems backlog rose over 20% to $348 million as of June 30, with Q3 bidding expected to be the largest of the year and full‐year 2025 bids in line with or modestly above 2024.
• Neutral Sentiment: Precast segment set a new quarterly revenue record of $48.6 million (+21.5% YoY) driven by strong residential demand in Geneva, while nonresidential activity remains subdued but shows signs of gradual recovery.
• Neutral Sentiment: Consolidated gross margin dipped to 19% from 19.9% a year ago due to project mix and lower volumes, though both Water Transmission and Precast margins improved sequentially in Q2.
• Positive Sentiment: For full‐year 2025, the company expects modest revenue growth, stable WTS results, improved Precast margins in H2, ongoing organic expansion and strategic share repurchases of $15 million to return value to shareholders.

Presentation

[Operator]

Greetings, and welcome to the NWPX Infrastructure Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott Montross, CEO. Thank you, sir. You may begin.

[Scott Montross, President & CEO at NWPX Infrastructure]

Good morning, and welcome to Northwest Pipe Company's second quarter twenty twenty five earnings conference call. My name is Scott Montross, and I am President and CEO of the company. I'm 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, 08/07/2025, at approximately four p. M.

[Scott Montross, President & CEO at NWPX Infrastructure]

Eastern Time. This call is being webcast and is available for replay. As we begin, I'd 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 in 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.

[Scott Montross, President & CEO at NWPX Infrastructure]

Thank you all for joining us today. I'll begin with a review of our second quarter performance and outlook for 2025. Aaron will then walk you through our financials in greater detail. We are pleased to report on the continued strong momentum in the second quarter in which we achieved record setting performance. These results reaffirmed the strength of our strategic plan and disciplined execution.

[Scott Montross, President & CEO at NWPX Infrastructure]

Before diving into the financials, I want to highlight a pivotal shift that reflects our strategic direction, our recent rebranding to NWPX Infrastructure. This new corporate identity reflects our growth in the water infrastructure sector, removing geographic and product constraints while positioning us as a national solutions driven infrastructure provider. With an expanded portfolio that now goes beyond steel pressure pipe, we've defined our segment naming convention with Water Transmission Systems, or WTS, Replacing Engineered Steel Pressure Pipe, SPP, while retaining the Northwest Pipe branding for our suite of engineered water transmission system products to preserve our strong market recognition. Our Precast Infrastructure and Engineered Systems segment name remains unchanged. We are confident in our trajectory and our ability to scale our success under the NWPX infrastructure banner.

[Scott Montross, President & CEO at NWPX Infrastructure]

Now turning to our second quarter results. Net sales of $133,200,000 reached a new quarterly high under our current configuration of the company, increasing 2.8% over the prior year and demonstrating strong operational execution in demand across both of our business segments. Our performance was driven by continued momentum in our water transmission business and record performance from our Precast segment. That translated into healthy margins, driving profitability of $0.91 per diluted share for the quarter. Through the disciplined working capital management, we delivered positive free cash flow of $3,100,000 in the 2025 versus negative $14,400,000 in the 2024, a positive swing of $17,600,000 reinforcing our financial strength and positioning us for continued momentum through the remainder of the year.

[Scott Montross, President & CEO at NWPX Infrastructure]

To further break down our segment level results, revenue from our WTS segment totaled $84,600,000 down 5.5 year over year, primarily due to lower production volumes resulting from the mix of projects produced in the second quarter. The decline in WTS net sales was partially offset by higher realized selling prices, also largely due to changes in product mix. Encouragingly, the impact of new trade policies that led to various customer related shipping delays in the first quarter has largely subsided. Through this period of market uncertainty, our team has remained highly effective, actively engaging with our customers, executing disciplined pricing strategies in securing increased volume of bids. Our WTS backlog, including confirmed orders, significantly improved by over 20% to $348,000,000 as of June 30 from $289,000,000 as of March 31 and was consistent with levels as of June.

[Scott Montross, President & CEO at NWPX Infrastructure]

We expect third quarter to be the largest bidding quarter of the year, and we continue to anticipate full year 2025 bidding levels to be in line with or modestly higher than 2024. Now turning to our Precast segment. Precast revenue grew 21.5% year over year to a new quarterly record of $48,600,000 This growth was fueled by sustained momentum on the residential side of our Geneva business, where strong demand drove higher production and shipment levels. While overall volume remained solid, gains were partially tempered by the slower to improve results in the non residential construction related portion of our Precast business, as broader macroeconomic headwinds, including effects from the new trade policies and persistently high interest rates continue to impact commercial construction activity. However, we are continuing to see some signs of improvement at a modest rate.

[Scott Montross, President & CEO at NWPX Infrastructure]

The Dodge Momentum Index grew 6.8% in June due to steadily improving non residential construction activity, but expected weaker consumer spending and travel demand as well as funding uncertainty may still be muting projects going into the planning queue. However, the Dodge Momentum Index was 20% higher in June 2025 versus last year, signaling year over year growth in non residential construction planning. The commercial sector was up 11% versus the prior year, while the institutional sector was up 46%, albeit compared to a weak June in 2024. On the pricing front, the residential portion of our Precast business saw positive momentum related to continued strong demand at Geneva. However, these pricing gains were partially offset by the slower to improve demand and pricing in our nonresidential business, reflecting the more cautious environment.

[Scott Montross, President & CEO at NWPX Infrastructure]

As of June 30, our precast order book was $56,000,000 down from the near record levels of $64,000,000 as of March 31 and $62,000,000 as of 06/30/2024. On the residential side of our business, Geneva order activity remains strong with bookings coming in at an elevated rate and volume being fulfilled more quickly, which helps explain why the current order book appears lighter versus the prior year. Additionally, a notable portion of the order book stemmed from the nonresidential side of our Precast business, signaling improving momentum and strengthening demand throughout the remainder of 2025. Our consolidated gross profit in the second quarter was $25,400,000 down 1.7% year over year, resulting in a gross margin of 19% compared to 19.9% in the prior year. Our WTS gross margin of 17.8% declined by approximately 120 basis points over last year due to lower production volumes and the associated decline in overhead absorption.

[Scott Montross, President & CEO at NWPX Infrastructure]

This was largely driven by the mix of projects we produced during the quarter, though the impact was partially offset by improved selling prices. It is, however, important to note that our WTS margin is up two thirty basis points sequentially over the 2025, with positive momentum that is continuing to build. Our pre cash gross margin of 21.2% decreased by approximately 90 basis points over last year, primarily due to changes in product mix, Margins in our residential construction business at Geneva improved year over year, supported by strong demand and operational efficiency. This strength was offset by the slower to improve portion of our nonresidential commercial construction side of our business, which has been more affected by the Fed's stance on monetary policy and the uncertainty around trade policy. However, our pre cash gross margin did improve two twenty basis points sequentially over the previous quarter.

[Scott Montross, President & CEO at NWPX Infrastructure]

The improvement was modest on the nonresidential side, but more substantial on the residential portion. Next, I'd like to discuss progress on our product spread strategy. In the second quarter, we bid on $14,900,000 worth of projects outside of Texas and successfully booked $2,500,000 in new orders, supporting our efforts to enhance capacity utilization and maximize operational efficiencies at our precast plants. In addition, we booked approximately 632,000 of park related projects at the Geneva plants in Utah. Our 2025 goal is to book $3,000,000 of Park related products at Geneva.

[Scott Montross, President & CEO at NWPX Infrastructure]

As part of our third component of our product spread strategy, we've also begun expanding Park and other pre cash related products to additional legacy locations, positioning us to broaden our market reach and long term growth. Our goal for 2025 remains to book over $12,000,000 in park related and other precast projects outside of Texas, with further benefits to come in 2026 and beyond. With respect to our broader growth strategy, we remain focused on both organic growth and M and A, though we are currently prioritizing organic expansion due to lack of viable acquisition candidates. While our disciplined acquisition criteria remains unchanged, we would consider a single location precast facility if it strategically strengthens our presence in targeted geographies. That said, we remain well positioned to move quickly should a larger, more impactful acquisition opportunity arise.

[Scott Montross, President & CEO at NWPX Infrastructure]

Ideally, any such opportunity would enhance our manufacturing capacity and operational efficiency, while also broadening our geographic footprint and expanding our product offerings. Next, I'd like to summarize our outlook for the 2025. In our WTS business, we anticipate revenue and margins to remain in line with or exceed those of the 2025. Production levels are expected to increase modestly, which should contribute to improved overhead absorption. We entered 2025 with a solid backlog in place and continue to expect strong bidding activity in the second half of the year.

[Scott Montross, President & CEO at NWPX Infrastructure]

Full year bidding levels are currently projected to be modestly higher than those of 2024, reinforcing our confidence in another strong year of performance for WTS. In our Precast segment, our healthy and growing order book coupled with anticipated higher production levels and better absorption supports for pre cash revenue to remain strong in the 2025 with continued margin improvement versus the first two quarters of twenty twenty five. On a consolidated basis, we expect revenues for the 2025 to modestly improve from the 2024. For the second half of the year, we continue to expect WTS revenues and margins to be similar to 2024 levels, with precast revenue also being similar to 2024 levels, but with improved margins. In closing, I want to thank our talented team at WPX Infrastructure for their strong execution of our strategy and unwavering commitment to safety.

[Scott Montross, President & CEO at NWPX Infrastructure]

Looking ahead, we're optimistic about the improving bidding environment and the strengthening order book as we move through the remainder of 2025. Looking ahead, our priorities are to: one, maintain a safe workplace where our employees are proud to work two, focus on margin over volume three, intensify our efforts on strategic acquisition opportunities to grow the company four, implement continued cost reductions and efficiencies at all levels of the company and number five, in the absence of M and A opportunities, return value to our shareholders through share repurchases. I will now turn the call over to Aaron, who will walk through our financials in greater detail.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

Thank you, Scott, and good morning, everyone. Before I begin, I'd like to highlight our continued focus on enhancing shareholder returns, consistent with our capital allocation strategy. Through July 31, the final trading day in our most recent Rule 10b5-one trading plan, we repurchased approximately 363,000 shares or approximately $15,000,000 worth of our common stock for an average price of $41.21 per share. This represents 3.6% of the Indian shares outstanding on 03/31/2025. Given the health of our balance sheet, we believe it is prudent to continue to take advantage of market opportunities for future share repurchases, while also continuing to invest strategically to grow our business.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

Next, I'll turn to our second quarter profitability. Consolidated net income was $9,100,000 or zero nine one dollars per diluted share compared to $8,600,000 or $0.86 per diluted share in the 2024. Our second quarter consolidated net sales increased 2.8% to $133,200,000 compared to $129,500,000 in the year ago quarter. Sales for the Water Transmission Systems segment decreased 5.5% to $84,600,000 compared to $89,500,000 in the 2024. The decline was driven by a 10% reduction in tons produced resulting from changes in project timing, partially offset by a 4% increase in selling price per ton due to changes in product mix.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

Precast segment sales in the second quarter increased 21.5% to a record $48,600,000 compared to $40,000,000 a year ago. Performance was driven by a 13% increase in volume shipped as demand in our Geneva operations in Utah remained strong, and a 7% increase in selling prices due to changes in product mix. As a reminder, the products we manufacture are unique. Given volumes in the case of

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

Precast, production volumes in the case of WTS, and the corresponding average sales prices for both segments do not always provide comparable metrics between periods, which are highly dependent on the composition of each segment's product mix. Our second quarter consolidated gross profit decreased 1.7% to $25,400,000 or 19% of sales compared to $25,800,000 or 19.9% of sales in the 2024. WTS gross profit decreased 11.3% to $15,100,000 or 17.8% of segment sales compared to gross profit of $17,000,000 or 19% of segment sales in the 2024, primarily due to decreased production volume as well as changes in product mix. Free cash gross profit increased 16.7% to $10,300,000 or 21.2% of segment sales from $8,900,000 or 22.1% of segment sales in the 2024, primarily due to changes in product mix. Selling, general and administrative expenses declined by less than 1% to $12,100,000 compared to $12,200,000 in the 2024 as lower professional fees and incentive compensation expense was partially offset by higher base compensation.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

As a percent of sales, our SG and A improved to 9.1% from 9.4% in the prior year. For the full year 2025, we now estimate our consolidated selling, general and administrative expenses to be in the range of 50,000,000 to 51,000,000 Depreciation and amortization expense in the 2025 is $4,900,000 compared to $4,700,000 in the year ago quarter. For the full year, we continue to expect depreciation and amortization expense to be approximately 18,000,000 to 20,000,000 Interest expense decreased to $800,000 from $1,800,000 in the 2024, due primarily to a decrease in average daily borrowings. For the full year 2025, we continue to expect interest expense of approximately 3,000,000 Our second quarter income tax expense was $3,400,000 resulting in an effective income tax rate of 27.5%, which was primarily impacted by non deductible permanent differences. This compares to 2,900,000 in the year ago quarter or an effective income tax rate of 25.5%, which was also impacted by non deductible permanent differences.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

We continue to expect our tax rate for full year 2025 within the range of 24% to 26. Next, I will transition to our financial condition. For the second quarter, net cash provided by operating activities was 5,400,000.0 compared to $22,300,000 in the 2024. The $16,900,000 decline was primarily due to changes in working capital. Our capital expenditures for the second quarter were $3,500,000 compared to $6,100,000 in the 2024.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

For the full year 2025, we continue to expect CapEx in the range of 19,000,000 to $22,000,000 including about $5,000,000 for various investment projects, most notably to support precast product spread as well as initiatives to grow both our Park and Geneva businesses to $100,000,000 top line in the near term. Accordingly, we produced positive second quarter free cash flow at $1,900,000 compared to $16,200,000 in the year ago quarter. For full year 2025, we continue to anticipate free cash flow to range between 23,000,000 and $30,000,000 Strengthening consistent cash generation remains a top priority for our leadership team, which is focused on driving growth both organically and through prospective M and A as appropriately valued opportunities arise. As of 06/30/2025, we had $30,600,000 of outstanding borrowings on our credit facility, leaving approximately $93,000,000 in additional borrowing capacity on our credit line. Our balance sheet remains healthy with ample liquidity to execute our capital allocation priorities.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

To close, we are very proud of our strong execution we delivered in the second quarter, resulting in record setting results. Our performance highlights the strength and adaptability of our business model and reinforces our confidence in our ability to drive continued momentum through the remainder of 2025 and beyond. We thank our employees for their unwavering focus on safety and operational excellence, which has been instrumental in achieving these results. We also appreciate the continued confidence and support of our shareholders as we execute our long term strategy. I will now turn it over to the operator to begin the question and answer session.

[Operator]

Thank you. We will now conduct a question and answer session.

[Operator]

first question comes from Brent Thielman with D. A. Davidson. Please proceed.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Hi, thanks. Good morning, Scott, Aaron.

[Scott Montross, President & CEO at NWPX Infrastructure]

Good morning.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Yeah, I guess the first question would just be on precast. Seems like somewhat kind of bifurcated market trends you're experiencing there. It sounds like residential is fairly healthy for you, somewhat surprising in this climate, but non resi is working against you to some degree. I don't know, Scott, if you can talk about whether you're seeing any inflection points in the weaker side of the precast business, whether there's some kind of pent optimism that maybe something turns there in the second half based on inquiries, customer conversations? Be curious there.

[Scott Montross, President & CEO at NWPX Infrastructure]

Yes, think, Brent, obviously, the trade policy thing, I think, put a little bit of a dent into the nonresidential side of the precast business at the beginning of the year, and it slowed things down. But we're now seeing an order rate that's picking up on the nonresidential side and gaining strength and kind of getting back to a relatively normal pace and level, which we haven't seen for some period of time. And when you look at the Dodge Momentum Index, I mean that kind of gives a little bit of an indication of what the non res thing is going to do over the next well, it's stuff that's going into planning now and usually gets into the production process about a year from now. But it looks like it's really starting to gain strength now. The revenue levels on the non res are really starting to come up as we speak.

[Scott Montross, President & CEO at NWPX Infrastructure]

As we went into the July timeframe, the revenue levels were back at a normal level with improving margins. So we're pretty confident that non res is going to be pretty strong through the rest of the year after the first half. And just to speak to the Geneva piece, yes, the Geneva piece is really, really strong. It's been really strong. And I think one of the interesting things about Geneva is, it looks like the order book is a little bit down for all of Precast.

[Scott Montross, President & CEO at NWPX Infrastructure]

But Geneva is burning through the order book that they're getting much quicker than they normally have because of the amount of orders. I think right now, as far as yards produced and shipped, we're about 16% or so ahead of where we were last year at Geneva at this time. So that continues to have strength. We expect the non res based on what we're seeing right now for the increase in their order book and what's happening with the margins there to strengthen as we get through the back half of the year. And I think that momentum index is just kind of an affirmation of that at this point.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

And so Scott, to the degree that we see this sort of ramp up in the non resi piece, which I think is more associated with Park, would that be an accelerant for your margins here in the second half?

[Scott Montross, President & CEO at NWPX Infrastructure]

Yes, we expect the margins to improve in the second half, mainly due to the recovery and the growth of the nonresidential side business.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

Okay.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

And then I appreciated the comments on WTS for the second half. Bidding climate third quarter sounds pretty strong. Any indications or early indications on 2026 just as we try to think about the sustainability of WTS contributions into next year or even Scott growth potential for the business into next year?

[Scott Montross, President & CEO at NWPX Infrastructure]

Yes, I think what we're seeing is a market that as we go forward to 2026 that is at least equal to what we've seen in 2024 and 2025 with the potential of some of the IIJA funding kicking in toward later in the year. I mean some of the IIJA funded projects like Sites Reservoir in California starting to be more and more talked about. So that could give the end of the year a little bit of a boost. And there's other projects going on right now Brent that are IIJA funded. The Eastern New Mexico rural water district is another one that continues to produce segments and jobs for us.

[Scott Montross, President & CEO at NWPX Infrastructure]

So what I think is you see a year that is similar to 2024 and 2025, although it looks like 2025 is going to be a little bit bigger than what we saw in 2024 based on what we're seeing right now. But you see a year in 2026 that starts out like that with the potential of it getting stronger later in the year.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Sorry, last one just on some of the investments. It sounds like maybe more of a push for organic investments in the business here. You talked about some of that CapEx going to product spread initiatives. I guess anything else to call out that you're looking at internally terms of focus and CapEx here in the next kind of twelve, eighteen months, Scott?

[Scott Montross, President & CEO at NWPX Infrastructure]

I think that besides obviously M and A opportunities that we continue to look at, I think the idea is what we call product spread. Obviously, that started with the idea of taking the products from Park and being able to produce them at Geneva, which is happening all the time. Now, it's more along the lines of, okay, what kind of precast products can we do at what steel at the water transmission systems plants. And right now, we're in the process of doing projects out of the Tracy facility, which obviously when we bought them had some precast structure there, but it was just very niche type stuff. But we're doing some projects out of there now with the idea of also starting to do some of the projects out of our Portland plant that kind of fit in some of the initial investment Brenner more in forms, because it's going to be ready mix poured type stuff to begin with.

[Scott Montross, President & CEO at NWPX Infrastructure]

Because as you know, we make cement for cement mortar lining and coating at our steel pressure pipe plants, but we don't have aggregate adding capabilities to make the concrete. So initially, it's going to start with ready mix, and it starts with Tracy and with Portland, but also the idea of spreading that Precast product to additional legacy water transmission systems plants. So that's really going to be the focus of organic growth. And as we acquire additional precast facilities, which we will eventually do here when something comes up that makes sense, we would also look at moving those part type products to those additional precast facilities that are in different geographies and that don't have a product like that in those geographies at this point. And that's part of the thing with our product spread, Brent.

[Scott Montross, President & CEO at NWPX Infrastructure]

We have a group that works on just product spread and they're focused on looking at bidding on Park products in the Southeast, in California, in the central part of the country. And really what that starts to do is it serves as a proxy for where we're looking at acquiring a precast plant, right, because we can get a really two for one there. You get the precast product and then you can add the park product. And ultimately, the product portfolio grows at that facility wherever it is. So and that was a lot of words about a lot of things.

[Scott Montross, President & CEO at NWPX Infrastructure]

So I don't know if I specifically answered your question the way you wanted it.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

I think that's great, Scott. I'll leave it there. Appreciate you guys taking the questions. Thank you.

[Scott Montross, President & CEO at NWPX Infrastructure]

Thanks, Brent.

[Operator]

The next question comes from Julio Romero with Sidoti. Please proceed.

[Julio Romero, Equity Research Analyst at Sidoti & Company, LLC]

Thanks. Hey, good morning, Scott and Aaron. Hope you're well.

[Scott Montross, President & CEO at NWPX Infrastructure]

Good morning, Julio.

[Julio Romero, Equity Research Analyst at Sidoti & Company, LLC]

So, I wanted to start on the Water Transmission Systems segment. Very nice performance there in the quarter. You mentioned strong execution and the trade policy is something that you seem to be managing through pretty well here. Can you maybe help us understand some of the trade and tariff impacts that you called out in the first quarter and help us kind of better understand how they've improved from the first quarter?

[Scott Montross, President & CEO at NWPX Infrastructure]

Right. So what we had is the first quarter where some of the administration's trade policies prevented us from being able to recognize some of the revenue and gross profit in the first quarter that we would have normally done. So, what we obviously, when we talked about this in the first quarter call, we said we would get a little bit of that back second quarter, which it looks like we got some of it back in the second quarter. Maybe a little bit of it will come back in the third quarter. So it's kind of getting peanut buttered across those quarters.

[Scott Montross, President & CEO at NWPX Infrastructure]

But the way it's being managed now and the place where it's most evident is in our SLRC Mexico facility. And the SLRC Mexico facility where we have those tariffs in play, they're being passed on. And quite frankly, I think what's happened is everybody's got so used to doing these tariffs at this point that it's becoming more of a nonevent. At the same time, we are booking, as we talked about, work from our SLRC facility shipping into Canada, to which there is no tariff. And as I mentioned during the last call, we had a job that was 24,000,025 million dollars and now we've booked another job that's a substantial size job into Canada from that same facility.

[Scott Montross, President & CEO at NWPX Infrastructure]

So that's really where the only impact is. And I think longer term, the idea of you look at SLRC and go, well, God, if these trade policies are gonna remain in place for a long period of time, what does that mean for the SLRC facility? Well, one of the things to note is that our fully burdened cost at our SLRC facility is a fraction of what it is at other plants, and we could be competitive in either way. So that won't affect us that much. The other thing is, is we still work on getting the inclusion from the government, which is I don't know why they use the word inclusion, it's really an exclusion.

[Scott Montross, President & CEO at NWPX Infrastructure]

But to get us exempted from those tariffs, because all of that product is from steel that's mine melted in The U. S, moved over into Mexico, formed into water transmission systems and shipped back. And what it does is give the customers and the consumers in The United States the lowest cost of ownership, right? So eventually, I think that's going to sink in, and ultimately, we probably get an inclusion from that. But in the meantime, we continue to ship into Canada.

[Scott Montross, President & CEO at NWPX Infrastructure]

We continue to get projects that are more capable of doing and still producing solid margins. And all it's done is I don't mean to use a term that's being used a lot right now. It's redistricting us a little bit on where we get jobs and where we're putting jobs. And because we have six main steel pressure pipe plants, we have such utility to do those things that ultimately it starts to become kind of a moot point.

[Julio Romero, Equity Research Analyst at Sidoti & Company, LLC]

Great. Really helpful context there. I wanted to talk a little bit about what you mentioned about markets seeming to accept the tariff situation and that's kind of what it is and just moving along anyway. Did additional maybe tariff announcements in the quarter cause any renewed delays or any changes in customer behavior? And if so, have they extended into July?

[Scott Montross, President & CEO at NWPX Infrastructure]

Well, it really didn't change much on customer behavior. I think it caused what I would say is a little bit of fright here internally for a little while, simply because it was a 25% to 50% thing, right? But the it was a change in what the tariffs were applied against, right? So it was 25% against, I can't remember, was overhead, it was product, it was all those things. So that was on the 25% piece.

[Scott Montross, President & CEO at NWPX Infrastructure]

When it went to 50%, it was just on the cost of the steel. So it really have a major impact on anything going forward that we were doing. But until we got our heads wrapped around this, there was a little bit of confusion, which quite frankly, there's always a little bit of confusion at the border with how things are being administered, and we had some details to work out. But again, we have such utility and ability to move things around that it really didn't have a major impact on us.

[Julio Romero, Equity Research Analyst at Sidoti & Company, LLC]

Really helpful there. And then last one, if I could, is just following up on Brent's question about precast and the bifurcated trends you're seeing there on the end markets. I think on nonresidential, you mentioned volume being fulfilled more quickly, believe. Is that volume leverage albeit at a lower blended rate in the segment kind of having an impact to what's what played out in the second quarter?

[Scott Montross, President & CEO at NWPX Infrastructure]

The volume being consumed more quickly is happening on the residential side at Geneva. They are I mean, they're 16% ahead 16% or 20% ahead on invoicing versus where they were last year. So as far as and what was the question on the nonresidential side then?

[Julio Romero, Equity Research Analyst at Sidoti & Company, LLC]

I understand. So the residential side had better volume in the quarter, I guess that offset kind of non res at the moment. Is that

[Scott Montross, President & CEO at NWPX Infrastructure]

Yes, at the moment. And I think you're looking at it the right way because what we have is a very it looks to be a very stable situation at Geneva right now with revenue production and margins. And what we're coming into is a situation where the non residential is starting to turn up not only from the perspective of production and revenue, but also on the margin side. So we believe that the second half of the year on the Precast business is going to be pretty strong.

[Julio Romero, Equity Research Analyst at Sidoti & Company, LLC]

Very helpful. Thanks again. No problem.

[Operator]

Our next question comes from Ted Jackson with Northland Securities. Please proceed.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

Thank you. Congrats on the quarter. And Aaron, I wanted to call out and say thank you for putting a full cash flow statement in the press release. I know you did that for me.

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

I think we did do that for you.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

It was a joke, but it was a joke, a serious joke. I know you did. Lot of the questions

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

I wanted to ask have been popped through, but I wanted to circle back on the precast. Geneva, the residential business, the ability to turn orders is faster than it is in the park. So my question, your first question is what is the timeline that it takes from order intake to delivery on average in Geneva? What is it in park? And has it always been the difference always been that way?

[Scott Montross, President & CEO at NWPX Infrastructure]

Okay, so on the Geneva side, Ted, you're dealing with the precast infrastructure products. So you could be looking at stuff that's already in inventory because that's a little bit of an inventory business. So it could be as quick as, hey, we get an order today and we're shipping it tomorrow. If you're looking at something that has to be produced at the Geneva facilities, it could be three or four weeks. We're pretty careful about measuring or in managing the order book and not letting it get too far out in front of us.

[Scott Montross, President & CEO at NWPX Infrastructure]

Because if it gets too far out in front of us, we can't take advantage of increasing pricing when the demand is there. So we are usually managing it to about a month and a half or two months of orders, time about two and a half months. On the park side, you're dealing with kind of a completely different animal. Now, you may have some of those park products that are more generic, say, meter vaults or grease traps in stock, but if you're getting stuff that's not in stock, what you're having to do is make sure that you're gathering the components, whether it's valves or meters or some kinds of fittings or backflow preventers, and you're installing them in the vault. So generally Geneva, if it's not a stock item, it could probably be five, six or seven weeks.

[Scott Montross, President & CEO at NWPX Infrastructure]

But one thing that's affecting the Geneva business is we've got the exact 2,500 up and running there, fully commissioned, and it's shipping product in the market. It produces product at a much higher rate than the old Transmatic did. So the orders are coming in and being fulfilled much more quickly, and that's what we're talking about on really the velocity of orders and getting orders turned and shipped and invoiced. So was there an add on to that piece, Ted?

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

No, you said the new equipment that's in park?

[Scott Montross, President & CEO at NWPX Infrastructure]

No. The new equipment's in June, but the exact 2,500. Yeah.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

That's where I thought it was. Just was writing a note, then it you know, so I kinda it just slipped.

[Scott Montross, President & CEO at NWPX Infrastructure]

Okay.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

Alright. My next question then is when you when you look at the the SPP backlog and congratulations on the strength of that. I mean, seems like it's stronger. I mean, you didn't expect it to get to fall out of bed or anything, it's been a little stronger than expected. But we've had the price of steel alone has gone up quite a bit, and we'll continue to kind of throw flow through your P and L as it does so.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

When you look at your backlog number, and is the increase there driven more by volume or more by price? Can you give us some kind of color in terms of how those two metrics are impacting the strength, the continued strength that you're seeing within your backlog for pressure pipe?

[Scott Montross, President & CEO at NWPX Infrastructure]

What I would say about the steel price is it's kind of been languishing, right? So for it ran up a little bit at the beginning of the year and when the tariff announcements came out and it ran up to $909.10, $9.15. Right now, what we're seeing is steel pricing about in the $8.75 range. So it's not really having a substantial impact on driving the price of projects. It's good for us when steel prices are higher, but I wouldn't say that the threat of tariffs from the trade policy is driving the steel price up right now.

[Scott Montross, President & CEO at NWPX Infrastructure]

It's pretty light. So it's just the amount of orders in tons that we're getting into our backlog. And I think the when you look at the number of tons that were put in backlog through it was this is more of a mid July number. I think we had put since the beginning of the year some 40,000 almost 40,000 tons or a little over 40,000 tons of projects in backlog. So I would say in this case, Ted, based on what the steel price is doing in the marketplace right now and the velocity of orders that we have coming in on steel pressure pipe, it's more related to tons.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

Okay. And then, Aaron, I always ask this question. I'm kind of curious as a percentage of your cost, kind of what was steel during the quarter?

[Aaron Wilkins, EVP & CFO at NWPX Infrastructure]

Yes, it's still hovering about 30%, Ted.

[Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets]

And then is there anything else? I think I had one more one that came out. No, that got us. Okay, I'm going to step out of line. Thanks very much.

[Scott Montross, President & CEO at NWPX Infrastructure]

Thanks, Ted. Thanks, Ted.

[Operator]

Thank you. At this time, I would like to turn the call back over to Mr. Scott Montross for closing remarks.

[Scott Montross, President & CEO at NWPX Infrastructure]

Yes, I'd like to thank everybody again for joining us today and just leave you with a few takeaways. We're very, very pleased with the operational execution in a market that's been relatively dynamic so far as we've gone through this year. And ultimately, I think it confirms the strategic choices that we've made over the last several years and the results that we've been able to deliver and really the creation of a more resilient company. And I think that our strong execution is driving revenue growth and positive free cash flow. And I think a lot of that free cash flow, I have to say, is related to the Water Transmission Systems business.

[Scott Montross, President & CEO at NWPX Infrastructure]

Because I think for a lot of years, that business tied up a great deal of cash in the company, and now the focus on cash flow has really turned that water transmission business into a cash flow generating machine. So I think the numbers that we're seeing, the backlogs, the order book is really a clear reflection of a healthy demand and performance across both business segments. And I think looking ahead for the remainder of 2025, we expect the bidding in the water transmission side of the business to remain robust and with elevated levels versus what we saw in 2024. And we expect the order book backlog to remain strong and build momentum through this first half into the second half of the year and going into 2026. The residential side of our Precast business continues to perform exceptionally well, driving record results.

[Scott Montross, President & CEO at NWPX Infrastructure]

And again, we're seeing signs of slow and steady growth on the nonresidential side. And we expect the results to come in for the precast side of the business in 2025. We expect those results to come in very strong. And I think in summary, we continue to uphold our core priorities of ensuring the safety of our workforce and driving margin expansion and executing on the strategic growth initiatives and creating long term value for our shareholders. And I'd like to thank everybody again for your time and continued support, and we look forward to speaking with you again in the third quarter call in November. So thank you very much.

[Operator]

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.

Participants

Executives

• Scott Montross, President & CEO
• Aaron Wilkins, EVP & CFO

Analysts

• Brent Thielman, MD & Senior Research Analyst at D.A. Davidson
• Julio Romero, Equity Research Analyst at Sidoti & Company, LLC
• Edward Jackson, MD & Senior Research Analyst at Northland Capital Markets