NWPX Infrastructure NASDAQ: NWPX reported a record start to fiscal 2026, driven by higher volumes and improved margins across both its Water Transmission Systems (WTS) and precast businesses. On the company’s first-quarter earnings call, President and CEO Scott Montross said results reflected “continued execution across the organization,” while CFO Aaron Wilkins pointed to operating leverage on higher revenue as a key contributor to earnings growth.
Record first-quarter sales, profit, and cash flow
Montross said first-quarter net sales increased 19% year-over-year to $138.3 million, supported by “meaningful growth across both our Water Transmission Systems and precast businesses.” The company posted record first-quarter consolidated gross profit of $26.7 million, up 38%, and consolidated gross margin expanded 260 basis points to 19.3%.
Wilkins reported record consolidated net income of $10.5 million, or $1.08 per diluted share, compared with $4.0 million, or $0.39 per diluted share, in the prior-year period.
The company also generated what management described as strong cash generation. Montross said NWPX produced free cash flow of $25.7 million, or $2.62 per share. Wilkins added that net cash provided by operating activities rose to $29.2 million, compared with $4.8 million a year earlier, driven by improved profitability and “favorable changes in working capital.”
WTS posts record quarter; backlog climbs to $430 million
In the WTS segment, Montross said first-quarter revenue reached a record $93.5 million, up 19% year-over-year. He attributed the growth to higher production volume and project execution, noting that tons produced increased 18% despite “adverse weather that caused unscheduled downtime across three WTS facilities early in the quarter.” Selling prices rose 1% year-over-year, which management attributed to product mix.
WTS gross profit increased 42% to $17.3 million, with gross margin rising to 18.5%, up 300 basis points. Montross and Wilkins both cited volume-driven efficiency gains, higher overhead absorption, and favorable mix as key drivers.
Bookings were a focal point for management. Montross said the company delivered “one of our strongest booking quarters to date” and referenced a “significant previously unplanned project” that is under a non-disclosure agreement. WTS backlog, including confirmed orders, ended the quarter at a record $430 million, up from $346 million at year-end 2025 and $289 million at the same point last year.
During the Q&A session, Montross provided additional detail on the previously unplanned project, describing it as government-related and produced at multiple plants. He said the portion currently in view is “right in the area of about $50 million” and is expected to be produced late in the second quarter through roughly mid-fourth quarter. Montross added there is some uncertainty around steel availability, which could push some production into next year, and said the company understands there may be “multiple phases” that could be additive in future years.
Asked about capacity, Montross said the company can take on additional WTS work with existing plant capacity, although production may need to be shifted among facilities. He said utilization above roughly 70% to 72% is “probably about a high point” for the segment at this time, while noting the company can add shifts at certain plants when needed.
Precast segment grows on non-residential demand and mix
In precast, Montross said first-quarter revenue rose 19% to a record $44.8 million. He cited a 14% increase in selling prices driven by product mix and higher sales volume linked to continued growth in non-residential demand. Wilkins said precast also benefited from a 4% increase in volume shipped.
Montross highlighted performance at two key precast platforms:
- NWPX Park: Production increased 30% year-over-year, and Montross said revenue per yard shipped grew. He also noted borrowing costs remain elevated as the Federal Reserve “held interest rates steady in 2026,” but said the company is seeing improvement in non-residential demand, including data center projects.
- NWPX Geneva: Production rose 7% and shipments increased 8%. Montross said a moderate slowdown in residential construction has been more than offset by growth in non-residential demand.
Montross cited the Dodge Momentum Index as a positive leading indicator, saying it was up 26% in March 2026 versus March 2025, with the commercial component up 29% and the institutional component up 20%.
Precast gross profit increased 30% to $9.3 million, and gross margin improved to 20.9% from 19.1%. Montross said absorption rates are improving with higher throughput and said he expects margins to continue recovering as non-residential demand builds. The precast order book ended the quarter at $55 million, down modestly from $57 million at year-end and below $64 million a year ago, but Montross said it has remained stable and continues to “keep pace with higher levels of production and customer shipments.”
M&A activity and capital deployment
Montross said NWPX continues to pursue strategic growth initiatives, including expanding precast capabilities across its network and evaluating “where it makes sense to bring precast into additional WTS facilities” through its product spread strategy. He also said the company continues to evaluate M&A opportunities in the precast space, including both single-plant deals and larger opportunities.
During the quarter, NWPX completed the acquisition of Boughton’s Precast, a single-site producer in Pueblo, Colorado. Montross said integration is “off to a strong start,” and Wilkins said the company spent $8.9 million to complete the purchase.
Wilkins also detailed other capital actions in the quarter, including the repurchase of approximately 33,000 shares at an average price of $67.17 for $2.2 million, and $1 million in debt repayment.
Outlook: stronger second quarter expected; free cash flow outlook raised
Looking ahead, Montross said the company expects second-quarter WTS revenue and margins to be higher than both the prior-year quarter and the first quarter, driven by volume, product mix, and the previously unplanned project. He said the 2026 bidding environment is expected to be “moderately stronger than 2025,” and that backlog is expected to remain elevated through the year.
For precast, Montross said the company expects second-quarter revenue to be higher than the prior-year quarter and the first quarter, with stable margins supported by demand, higher production with improved absorption, and a strengthening order book. On a consolidated basis, he said the second quarter is expected to be “stronger than we’ve seen in recent years,” and added that management believes 2026 is “shaping up to be a historic year for NWPX.”
Wilkins said the company raised its full-year 2026 free cash flow outlook to $50 million to $56 million, up from a prior range of $40 million to $46 million. He also reiterated expectations for full-year capital expenditures of $20 million to $24 million, including about $6 million tied to investments supporting the precast product spread strategy and broader precast growth initiatives.
For operating expenses, Wilkins said full-year consolidated SG&A is expected to range between $53 million and $55 million, while depreciation and amortization is expected to be approximately $20 million to $22 million. He also said the company expects an effective tax rate of roughly 24% to 26% for the full year, noting quarterly rates can be impacted by tax windfalls related to equity award vesting.
On the balance sheet, Wilkins said cash and cash equivalents increased to $14.3 million at March 31, 2026, from $2.3 million at year-end. Total debt was $10.7 million, with no borrowings outstanding on the credit facility, resulting in what he described as a net cash position of $3.5 million.
About NWPX Infrastructure NASDAQ: NWPX
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.
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