NWPX Infrastructure Q2 Earnings Call Highlights

• 3 Under-The-Radar Small Caps Making New All-Time Highs

NWPX Infrastructure (NASDAQ:NWPX) reported record second-quarter results for 2026, as higher Water Transmission Systems production, favorable project mix and pricing helped lift revenue, gross profit and earnings per share.

Net sales increased 19.7% year over year to $159.5 million, while consolidated gross profit rose 35.5% to $34.4 million. Gross margin expanded 250 basis points to 21.5%. Net income reached a record $15.8 million, or $1.62 per diluted share, compared with $9.1 million, or $0.91 per diluted share, in the prior-year period.

President and CEO Scott Montross said the company generated $9.9 million in free cash flow during the quarter, or about $1.01 per share. CFO Aaron Wilkins called the $1.62 per-share result the company’s highest earnings per share from operations, excluding a one-time non-cash bargain-purchase gain recorded in 2018.

Water Transmission Systems Drives Growth

Water Transmission Systems, or WTS, posted quarterly record revenue of $113.2 million, up 33.8% from a year earlier. Production volume increased 26%, while selling prices per ton increased 6%, which management attributed to improved pricing and changes in product mix.

WTS gross profit climbed 60.9% to $24.2 million, and segment gross margin rose 360 basis points to 21.4%. Montross said the gains reflected higher production volume, better overhead absorption, favorable project mix and stronger project pricing.

The segment’s backlog, including confirmed orders, stood at $423 million at June 30, down slightly from $430 million at the end of the first quarter but above $348 million a year earlier. The company said it had produced approximately 15% of a large, previously unplanned NDA project during the second quarter.

Montross said the backlog remained elevated despite production on that project because of strong booking activity. He said NWPX had bid on more than $125 million of additional projects and expected to win a meaningful share, though awards remained pending.

As the NDA project moves through production, management expects the WTS backlog to return to a more typical range. Montross said that level would likely be in the low-$300 million to mid-$300 million range after most of the project is completed during the third and early fourth quarters.

Management said bidding activity remained strong through July and projected that full-year bidding would exceed 2025 levels. Montross said that excluding the NDA project, the company expected to bid on more than 150,000 tons in 2026, compared with roughly 138,000 tons in 2025.

Precast Recovers After Weather-Related Delays

Precast revenue declined 4.8% to $46.3 million, as shipment volume fell 11%. The company cited unusually heavy rainfall in Texas and customer-driven project delays at its Utah facilities during April and May. Selling prices increased 7%, reflecting product mix.

Precast gross profit was approximately $10.1 million, down 1.7% from the prior year, but gross margin improved 70 basis points to 21.9%. Management said pricing and cost absorption improved despite lower volumes.

Montross said business conditions improved considerably in June. The Geneva operation recorded a monthly revenue record during June, while ParkUSA posted strong performance. The Precast order book increased to $61 million at quarter-end, compared with $55 million at March 31 and $56 million a year earlier.

At ParkUSA, production rose 24% year over year and revenue per yard shipped increased 29%. Geneva production declined 5%, primarily due to softness in residential construction, though growth in non-residential work partly offset that decline.

Management said non-residential demand, including data center activity, continued to support commercial construction. Montross also pointed to the Dodge Momentum Index, which was up 22% in June from the prior year in both commercial and institutional categories.

Third-Quarter Outlook and Cash Flow Guidance

NWPX said consolidated third-quarter performance should be comparable to or stronger than the second quarter. In WTS, revenue and margins are expected to be similar to the prior quarter, supported by production on the NDA project, strong volume and product mix.

Montross told analysts that, absent severe weather disruptions, the company expected third-quarter revenue to be higher in both WTS and Precast, with improved profitability compared with the second quarter. He said the third quarter has historically been the company’s largest quarter of the year.

For Precast, the company expects third-quarter revenue to exceed both the prior quarter and the third quarter of 2025, while margins remain stable as production rises and the order book strengthens.

The company raised its full-year free cash flow outlook to $56 million to $65 million, from a previous range of $50 million to $56 million. Wilkins said the increase reflects stronger earnings and more favorable expected billing schedules on WTS orders.

• Full-year SG expense is expected to range from $54 million to $56 million.
• Depreciation and amortization is expected to be $21 million to $23 million.
• Capital expenditures are projected at $20 million to $24 million, including about $6 million for Precast product-spread and growth investments.
• The effective tax rate is expected to be approximately 24% to 26%.

At June 30, NWPX held $19.3 million of cash and cash equivalents and $10 million of debt, resulting in net cash of $9.3 million. The company had no borrowings outstanding under its credit facility and approximately $124 million of available borrowing capacity.

Montross said the company’s near-term priorities include safety, maintaining a focus on margins, pursuing strategic acquisitions, implementing cost efficiencies and returning capital to shareholders when acquisition opportunities are limited.

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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