Hello, and welcome to the Northwest Pipe Company First Quarter 2024 Earnings Call. As a reminder, this conference is being recorded.

Good morning, and welcome to Northwest Pipe Company's First Quarter 2024 Earnings Conference Call. My name is Scott Montross, and I'm 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, May 1, 2024, at approximately 4 p.m. 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-K for the year ended December 31, 2023, 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. Thank you all for joining us today. I'll begin with a review of our first quarter performance and outlook for 2024. Aaron will then walk you through our financials in greater detail. Our first quarter results were mixed, with steel pressure pipe business surpassing our expectations, while precast came in softer than anticipated. On the whole, our net sales of $113.2 million increased 14.2% year-over-year on solid profitability levels and representing the strongest revenue first quarter we've ever had. First quarter revenue from our SPP segment totaled $80 million, an increase of 25.9% year-over-year, the highest first quarter ever reported in company history for this segment. Our performance primarily reflected higher production levels due to changes in project timing related to a strong pipeline of bidding opportunities in the early to mid-first quarter and the improved bidding environment we've experienced to date following the relatively small bidding year we had in 2023. Our SPP team continues to do an excellent job executing on bids and projects. The very strong bidding activity and project wins in the first quarter led to our SPP backlog, including confirmed orders as of March 31 totaling $337 million, an improvement from $319 million as of December 31, 2023, and down from the $370 million at March 31, 2023. Our first quarter performance was partially offset by lower selling prices due to production mix and project timing. Steel prices continue to remain fairly high by historical standards and appear to be relatively stable, fluctuating $10 to $20 per ton up or down on a weekly basis. Lead times remain fairly short at between 3 and 6 weeks. Now turning to our precast segment. Precast revenue declined 6.6% year-over-year to $33.2 million, primarily due to very slow first quarter shipments in the nonresidential construction-related precast business at Park, resulting from fairly light bookings in the fourth quarter of 2023 due mainly to customer caution related to the current interest rate environment. As a result, we booked only $16 million of orders at Park in the fourth quarter. However, our first quarter bookings at Park rebounded to a strong level, coming in at over $22 million. The residential business at Geneva continued to be strong with strengthening order books as well as robust production and shipment levels, especially for a first quarter, which is typically the seasonally slower time of the year. Both residential and nonresidential precast business came under modest pricing pressure during the first quarter. That, along with some of the mix changes that we experienced, drove a lower average selling price for precast, which was partially offset by higher shipping volumes from the residential precast business at Geneva. As of March 31, our order book totaled $52 million, up from $46 million as of December 31, 2023, and down from the $58 million as of March 31, 2023. First quarter consolidated gross profit increased 21.5% year-over-year to $20.1 million, resulting in a gross margin of 17.8%, up from 16.7% in the first quarter of 2023. Our SPP gross margin of 17.8% was strong, increasing by approximately 560 basis points over the prior year period and 280 basis points over the prior quarter, primarily due to higher production volume given customer-driven timing changes and by significant strength in the first quarter bidding activity coupled with our persistent focus on higher-margin business. Our precast gross margin of 17.7% was down compared to 24.7% in the first quarter of 2023 as depressed shipments on the nonresidential construction side resulted in reduced first quarter revenue at the Park facilities and the associated lower overhead absorption. However, as we expected, the margins on the residential construction side at Geneva have also come under some modest pressure due to regional differences in market demand. Next, I would like to provide an update on our capital allocation priorities. Our top strategic priority for 2024 remains growth of the business through our organic product spread strategy and M&A opportunities. Beginning with product spread. We continue to execute Level 1 of this strategy by building out capacity utilization at our Texas-based precast plants with a goal of maximizing overall efficiencies and production volume. During the first quarter, we bid on $11.8 million worth of projects outside of Texas and booked approximately $2.5 million worth of orders outside of Texas. In regard to Level 2 of our strategy to produce Park precast products out of our existing Northwest Pipe locations, we were in production on 14 projects at the Geneva locations during the first quarter of 2024, and we are currently in production on 16 projects with more scheduled to come. Once the Park precast products are more comfortably established at the Utah locations, we plan to expand our Level 2 product spread to additional geographic locations over the next couple of years. Following organic growth, we are committed to repaying the debt we incurred to finance the 2021 acquisition of ParkUSA to ensure we are well positioned to take advantage of future growth opportunities. As it pertains to our M&A strategy, we are actively evaluating precast-related opportunities. Our criteria includes high-quality candidates that are accretive to our EPS and that possess strong organic growth and margin potential, solid asset efficiency and a consistent positive cash flow profile. Until we are ready to execute a meaningful acquisition, we may opt to be opportunistic in repurchasing shares of our common stock, subject to our liquidity, including availability of borrowings and covenant compliance under our amended credit facility and other capital needs of the business. During the first quarter, we repurchased approximately 127,000 shares for a total of $3.7 million. And since the initial authorization of our share repurchase in November 2023, we bought back a total of approximately $5 million worth of our shares as of April 30. Before I conclude, I'd like to summarize our outlook for the second quarter of 2024. In our SPP business, we anticipate both our revenue and gross margin to be relatively in line with the first quarter of 2024. As we move throughout the balance of the year, we expect continued strength in our revenue and margins, similar to what we saw in 2022. We also expect backlog to remain high by historical standards given the volume of expected SPP bidding in 2024. I'd also like to add, we remain encouraged by the amount of activity we're seeing on our current and upcoming water transmission projects. For a more complete view of these projects, please review our investor presentations, which can be found on the Investors tab of our website within the Events and Presentation section. In our precast business, following the slow first quarter, which is generally the case in our precast segment, we are expecting significant improvement in both revenue and margins for the second quarter of 2024 and a strong remainder of the year. We continue to believe in the strength of the precast business in the mid- to long term given the significant level of pent-up demand, specifically for residential housing, a growing need for infrastructure spending in the U.S. and our growing market position. In summary, the first quarter marked a solid start to the year in what we believe will be a significantly stronger bidding environment despite persistent macroeconomic challenges. The diversification strategy that we embarked on in 2020 is continuing to take shape, and we remain focused on positioning ourselves to take advantage of future growth opportunities that we anticipate arising in the precast space. We continue to believe in the prospects of the precast business longer term despite the current interest rate environment and the resulting impacts on our financial performance. We believe the less cyclical nature of the precast business helps balance out the business during periods of variability in steel pressure pipe market given the more transactional nature of the precast business and associated faster cash conversion cycle. Our goal remains for our precast-related business to grow to a similar size as our SPP business in the near term. I'd like to thank our teams in the field for the strong operational performance and for the continued emphasis on safety infused at every level of our organization. Looking ahead, our priorities remain: one, maintaining a safe workplace where our employees are proud to work; two, persistently focused on margin over volume; three, continuing to implement cost reductions and efficiencies at all levels of the company; four, continuing to identify strategic opportunities to grow the company; and five, in the absence of M&A opportunities, returning value to our shareholders through opportunistic share repurchases. I will now turn the call over to Aaron, who will walk through our financial results in greater detail.

Thank you, Scott, and good morning, everyone. I'll begin today with an overview of our first quarter profitability. Consolidated net income for the first quarter was $5.2 million or $0.52 per diluted share compared to $2.4 million or $0.23 per diluted share in the first quarter of 2023. Consolidated net sales increased 14.2% to $113.2 million compared to $99.1 million in the year-ago quarter. Steel Pressure Pipe segment sales increased 25.9% to $80 million compared to $63.5 million in the first quarter of 2023. As Scott highlighted earlier, Steel Pressure Pipe sales exceeded our expectations driven by a 54% increase in tons produced, resulting primarily from changes in project timing, which was partially offset by an 18% decrease in selling price per ton primarily due to product mix. Precast segment sales decreased 6.6% to $33.2 million compared to $35.6 million in the first quarter of 2023 due to a 24% decrease in selling prices, primarily due to product mix, which was partially offset by a 23% increase in volume shipped. Our Geneva business benefited from high shipment volumes in the first quarter, while our Park business saw contractors extend delivery timelines. Products we manufacture are unique. Therefore, shipment volumes in the case of precast, production volumes in the case of steel pressure pipe and the corresponding average sales prices for both segments do not always provide comparable metrics between periods as they are highly dependent on the composition of each segment's product mix. Consolidated gross profit increased 21.5%, $20.1 million or 17.8% of sales compared to $16.6 million or 16.7% of sales in the first quarter of 2023. SPP gross profit increased 83%, $14.2 million or 17.8% of segment sales compared to gross profit of $7.8 million, 12.2% of segment sales in the first quarter of 2023, primarily due to higher volume and changes in product mix. Precast gross profit decreased 33% to $5.9 million or 17.7% of precast sales, $8.8 million or 24.7% of segment sales in the first quarter of 2023, primarily due to changes in product mix. While demand has shown some recent signs of strength, particularly for residential products, the precast segment's average selling prices have moderated through recent market pressures, which coupled with the shipment delays at Park resulted in first quarter precast margins below our expectations. Selling, general and administrative expenses decreased 3.6% to $11.4 million or 10.1% of sales compared to $11.9 million in the first quarter of 2023 or 12% of sales. The decrease was primarily due to $0.5 million in lower incentive compensation expense. For the full year of 2024, we continue to expect our consolidated selling, general and administrative expenses to be in the range of approximately $45 million to $47 million. Depreciation and amortization expense in the first quarter of 2024 was $3.4 million compared to $2.8 million in the year-ago quarter. Given the larger bidding year expected for the Steel Pressure Pipe business and the planned commissioning of our new reinforced concrete pipeline, we currently expect depreciation and amortization to increase modestly in 2024. Our noncash incentive compensation expenses were $1 million for both the first quarters of 2024 and 2023. Interest expense increased modestly to $1.5 million from $1.4 million in the first quarter of 2023 due to higher interest rates, which more than offset the decrease in average daily borrowings. For the full year of 2024, we expect interest expense to range between $5 million and $6 million. Our first quarter income tax expense was $2 million, resulting in an effective income tax rate of 27.5% compared to $1 million in the prior year quarter or an effective income tax rate of 28.7%. Our tax rate for the first quarters of 2024 and 2023 were impacted by nondeductible permanent differences. We continue to expect our tax rate for the full year of 2024 to be within the range of 25% to 27%. Now I will transition to our financial condition. Net cash used in operating activities was $26.1 million in the first quarter of 2024 compared to net cash provided by operating activities of $26.3 million in the first quarter of 2023 primarily due to changes in working capital, which were partially offset by increased net income adjusted for noncash items. Cash flow generation remains a key strategic focus of our business as it is critical to the execution of our growth and shareholder-return strategies. While we expected pressure on working capital needs for the steel pressure pipe business in the first half of the year, working capital at March 31 was higher than expected due largely to higher production levels experienced in the quarter. This was coupled with traditional pressures we see on Steel Pressure Pipe segment's working capital needs, usually attributed to lower billings associated with the seasonal slowing in shipments to job sites. In addition, we maintained higher inventory levels through the first quarter in order to support the growth in production levels expected in 2024. However, we continue to expect these timing differences will reverse through the balance of the year. And as a result, we continue to expect full year 2024 free cash flow to range between $19 million and $25 million. Our capital expenditures totaled $4.6 million in the first quarter of 2024 compared to $4.4 million in the prior year quarter. We continue to anticipate our total CapEx to be in the range of $19 million to $22 million for the full year of 2024. As Scott highlighted, we completed $3.7 million in share repurchases in the first quarter of 2024 at an average price of $29.39 per share, all of which were executed under a 10b5-1 trading plan. Since the inception of the program through April 30, the total value of share repurchases is approximately $5 million. As of March 31, 2024, we had $89.9 million of outstanding borrowings on our credit facility, leaving approximately $34 million in additional borrowing capacity on our credit line. In summary, we are very pleased with the first quarter results, which represent the best first quarter profitability performance the company has achieved in over a decade. Now that we are through the seasonally slower first quarter, we are well positioned to capitalize on improving market conditions through the balance of the year. Thank you to all of our employees for their continued exemplary execution and commitment to safety as well as to our shareholders for their continued support and confidence in Northwest Pipe Company. I will now turn it over to the operator to begin the question-and-answer session.

Our first question is coming from Brent Thielman from D.A. Davidson.

I wanted to start by discussing precast. The margins this quarter are a bit lower than we anticipated. Scott or Aaron, what do you think is a reasonable expectation for a rebound in the coming quarters, considering the regional differences and what seems to be some lower pricing being realized at the moment?

Yes. I think when you're looking at the free cash flow, Brent, it's really the Steel Pressure Pipe business ended up being significantly stronger than we thought it was going to be in the first quarter. So as you know, that ties up a lot of current assets initially, and then it starts to roll off those current assets and come back to the balance sheet. So we expect the Steel Pressure Pipe revenues to be relatively stable throughout the year. So now that we're up at a plateau, I think that we're going to see that reverse as we come out of this thing. We are increasingly receiving more prepayments for steel and MOH payments. Recently, we secured a major project that is generating over $10 million in prepayments for the entire project. This will likely enhance our cash flow going forward. Additionally, every senior management member in our company now has a cash flow target for the year that is linked to their variable compensation, and this is being monitored very closely.

Brent, I believe you mentioned precast. Did you mean to refer to the precast margins when you talked about free cash?

Well, that was one of my questions was free cash. So you answered that. But yes, no, I was referring to that the precast margins and that kind of rebound we ought to be thinking about because it sounds like you think it's going to get better for me.

The issue with the precast was primarily related to the nonresidential side. The bookings were quite slow in the fourth quarter of 2023, where we secured about $16 million in business at Park. This translated to minimal shipments in the first quarter of 2024. However, things have improved now, as we've surpassed $22 million in bookings at Park during the first quarter, which should contribute to a robust second quarter for Park and help improve those margins. The other thing is with precast, we are still seeing substantial demand from the residential side. And ultimately, what we're seeing is a Geneva order book since that's mostly residential that's continuing to grow. And we just implemented a price increase there in March because the bookings are coming in so strong. So we're pretty confident we're going to see a pretty good rebound in both revenue and margins as we get into the second quarter and through the rest of the year.

Okay, Scott, returning to SPP, I would have anticipated some delays. It seems you did experience some delays due to poor weather in certain areas, but it doesn't appear to have had a significant impact. Was there a pull-forward this quarter? I'm curious about the unusually strong performance since I expected some delays.

We're starting to see changes in project timing. I wouldn't say anything it was pull-forward. But it's really, we had so much work bid in the first quarter and won so much work in the first quarter that we're starting to get pretty loaded up at some of the facilities. So as we're having to jockey the production schedules around a little bit so that we can produce these things on time, and it really wasn't a pull-forward. But I mean we produced $80 million worth of revenue in the first quarter, and the backlog still went up by like $18 million or $19 million. I can't remember what exactly it was. So you could kind of do the math on how much we won work in the first quarter. So we're pretty loaded up at some of the facilities.

And just the last question to that, Scott, with all the work that you're picking up, maybe the pricing attached to that. Is it more attractive? I guess is the bid climate more appealing to you from a competitive standpoint?

Yes. I think when you're dealing with the pricing, it's a function of what steel prices are. And one of the things is that steel prices are remaining pretty high by historical standards. They're pretty stable right now, fluctuating around $8.25 or $8.35 for a hot-rolled band. But there are two things that drive margins for the steel pressure pipe thing. One is obviously demand, and demand builds backlog industry-wide. And when backlogs build like that industry-wide, what happens is not everybody can do a job at the same time. So you have less bidding pressure on these jobs, and you tend to see the margin start to move its way up a bit, too. So we're pretty happy about the direction that all that is going right now, and these margins are moving in the right direction at this point.

Next question is coming from Julio Romero from Sidoti & Company.

Could you clarify the strong margins we observed? They were really impressive. As you mentioned in response to Brent's question, the margins were influenced by the timing of customer-driven projects. You indicated that there were some adjustments to production levels, but it wasn't a case of pulling work forward. Are you suggesting that you took on some quick-turn projects under favorable conditions?

We got in the first quarter, which was a short fuse on it. And ultimately, we got a little bit higher production levels on it. But we're seeing really, really strong bidding through the first quarter. And we expect the year to be a pretty good strong bidding year. And we have not even gotten to the IIJA-funded part of this market. For us on Steel Pressure Pipe, that is a thing that's probably out in, wait, '25, '26, '27, '28. So the expectation is we have a pretty strong steel pressure pipe market coming at us for multiple years in a row. And when you get multiple strong markets for steel pressure pipe in a row, you tend to get a situation where the margins start to push up toward something that begins with a 2 at that point. So I think that we're kind of heading in that direction right now because of the demand that we're seeing coming forward. And the other thing with the margins is higher production levels, and you're spreading your fixed costs out over more tons, right? So it's a better situation that way. So we've got a pretty decent tailwind behind this, we believe, on the steel pressure pipe side both on revenue and margin right now as we go through the near term, and quite frankly, longer term because of the IIJA.

Got it. That's good color. So I guess are you guys saying that you kind of exited March at a strong production level and that kind of carried into April? And that's what gives you the confidence that revenue and margins in 2Q for SPP should look like something that you posted in 1Q?

Yes, we are looking at our current backlogs. In the first quarter, we generated $80 million in revenue from steel pressure pipe, and our backlog increased by $18 million. This illustrates how much we secured in the first quarter and indicates a positive trend for the rest of the year in this segment. Additionally, nonresidential construction, particularly the nonbuilding aspects, has been quite robust, which also impacts our steel pressure pipe operations. We anticipate a strong performance in this area as we progress through the year.

What are your thoughts on why volume and bidding increased so rapidly and significantly in the first quarter? Was there anything specific that contributed to that?

No. I think the part of it was that we had some stuff that was originally intended for '23 that ended up in the first part of 2024. So probably the years would have been a little bit more level had it not been for that. But I think it's that and some of the stuff that's coming forward. We're just now starting to see some of the IIJA funding come into place. And it's slow getting started because there's like $46 billion that's set aside for water-type projects like the things that we do. And so far, through the end of the year in 2023, only about $1.8 billion of it's been actually put out and paid out. So there's a lot to be done. And I think those projects are really going to help buoy this stuff as we go forward. And I'm not sure if I answered your question the way you wanted. What was the other part of that, Julio?

I'm trying to understand how you achieved strong volumes and increased backlogs. Was there anything unusual that influenced the surge in bidding and volumes in the first quarter? I believe you may have addressed that already.

Yes, there are signs in the first quarter that demand is starting to increase. Remember, we have only three major competitors in the steel pressure pipe market after our acquisition of Ameron in 2018. As backlogs begin to shift, our nationwide presence allows us to take on significantly more work than others, which is benefiting us at this time.

Got you. Just last one for me is, can you just speak to how active you are in the M&A pipeline right now on the precast side?

We're starting to get more active all the time. We're starting to see things that we're actually interested in and looking at. And I think as we go through a period of time, it's going to continue to improve. The multiples are still a little frothy on the acquisition side because obviously, we're coming off a period where there's been some pretty high business levels. And I don't know that, especially on the general precast side, that everybody is seeing the kind of strength that we're seeing in Utah. So we're starting to see those multiples adjust a little bit. And I think as we get out through the rest of this year, it's going to get more interesting with what we're seeing because we've got a couple that we're interested in looking at right now. And ultimately, we're going to be going down that road. We view the share buyback as part of our growth strategy. If there are no viable options in terms of mergers and acquisitions, we will continue to repurchase shares to enhance value for our shareholders. This is our current approach. Ultimately, we plan to pursue opportunities in acquisitions, but until then, we will maintain our current course as we remain very active.

Next question is coming from Ted Jackson from Northland Securities.

Congrats on a super quarter.

Ted, thanks.

My questions have all pretty much been answered, but just a couple of things. With regards to the outlook and your view with regards to steel pricing, am I right to infer that you expect steel prices for 2024 to be relatively stable on a go-forward basis and that it's underpinning your kind of $80 million quarterly run rate view?

I haven't seen stable steel pricing for many years, especially not since before 2004 when things were more stable for longer periods. Currently, it seems we are experiencing a phase of stability. Many publications predict a slight decline in prices as the year progresses. However, steel producers are managing their markets well and can adjust production capacity quickly if prices start to drop too much. I anticipate that prices will either remain stable or might possibly increase. I do not expect them to decrease as we move through the year. Higher steel prices benefit us in the steel pressure pipe segment, as they may tie up cash temporarily, but this will eventually improve our balance sheet. Overall, I believe steel prices will be relatively stable or gradually increase during this period. If prices begin to fall, producers will reduce output to stabilize the market.

What are you considering for per ton pricing for steel in your forward modeling? In the first quarter, the Midwest contract average was just under $1,000 a ton, but recently it has been closer to $800. As you think about the rest of 2024, what pricing are you forecasting for your business?

In the first quarter, the steel prices we realized were influenced by some previous buying decisions. Currently, our incoming steel costs are in the low $900s, which includes freight and other additional charges. Based on our discussions, we are estimating around $900 for the year, possibly a bit less, and we do not anticipate significant changes to this outlook.

Looking ahead, we previously discussed the second quarter outlook for margins in the SPP product being similar to what we saw in the first quarter. From what I gather, there's a stronger market with more opportunities, which is reducing competition for individual bids. Will the margins we experienced in the first quarter persist? Or might there be a chance for margins to actually improve as the market evolves, given that you have the capacity and the willingness to take on more business compared to others?

That's a fair question. I think that with the backlog that we have and the projects that we've won and stuff that it's at least something that we view to be as stable going forward, but with the potential of having some upward movement, if that makes sense.

That does make sense. Thank you for all the detail regarding the 2024 guidance; it was very helpful. I must admit I was a bit surprised by the free cash flow number for the first quarter. I understand the reasons behind it, and it's actually a pretty decent issue to have since the business is growing and you're investing capital. If you maintain your run rate at $80 million, considering the timeline and opportunities with several water projects that aren't expected to roll out until late 2024, potentially into 2025 and 2026, is it reasonable to assume that keeping a steady revenue run rate at $80 million over the next year or two would lead to continuous improvement in free cash flow, given that your working capital levels would remain stable? Does that make sense? Essentially, if you continue at the $80 million run rate, and you've recently faced a significant cash flow impact from changes in working capital, could we expect your working capital to stay relatively steady and see a prolonged period of strong free cash flow generation?

Yes, Ted, that basically describes how it functions. We experienced a bit of a perfect storm this quarter. Clearly, production levels for steel pressure pipe have increased. We had to prepare for the production levels reflected in our coil inventories. Unfortunately, we didn't achieve the strong balances that we had a year ago, but those favorable balances are expected to materialize. As Scott mentioned, we are effectively engaging with our customers on MOH payments and prepayments. Some of the positive timing factors we've encountered in the past are still ahead of us for 2024. I believe that as we return to normalized revenue levels, it will stabilize the shift. The only factor that could potentially disrupt this path would be an unexpected fluctuation in steel prices. While we don't anticipate that happening, it is the one thing that could impact maintaining the $80 million run rate for SPP.

I mentioned steel because I recognize its impact on the business. Overall, I'm really encouraged by the outlook. My final question is about the strong market for precast in the second quarter and beyond. Are we seeing the potential for that segment to exceed $40 million in the second quarter? Is that a realistic expectation, or should we anticipate more modest growth? Also, congratulations on the improvement in bookings for that segment; it's great to see after a significant decline over several periods.

Yes, I believe the second quarter will resemble what we experienced last year. The second and third quarters are typically the peak periods for precast products. The first quarter is usually slow. Additionally, one of our precast infrastructure businesses in Geneva is located in Utah, which experiences significant snowfall in the winter, causing contractors to do less work. We anticipate a rebound similar to what we saw in the second quarter last year and probably the year before as well. It seems to be on a comparable trajectory. After a sluggish first quarter in terms of free cash, we expect the remainder of the year to be quite strong.

Okay. Well, I mean, it was a great quarter. And it looks like you're really teed up for an extended period of financial performance, market performance. Congratulations on everything, and I'll talk to you later.

Our next question is coming from David Wright from Henry Investment Trust.

Congratulations on the stock buyback during the quarter. I believe that is an excellent use of your capital, and the average price looks really good. Scott, you mentioned having a significant amount of SPP business, and you noted a 54% increase in tons produced in Q1. Do you need to adjust the labor force at all? I recall that in previous quarters and years, you were operating at lower capacity utilization. How does the ramp-up work from a staffing perspective?

We sometimes need to adjust our workforce. Typically, when we are bringing people back, it's not a complete shift or an entire team but rather just a few individuals, often between four to seven. If production levels for steel pressure pipe decrease, we might let go of a similar number, perhaps ten or twelve at specific plants. We frequently adjust our staffing in response to market conditions. Currently, we are adequately staffed and had anticipated these changes due to the bidding process, which led us to prepare for the remainder of the year. This should not pose much of a challenge for the steel pressure pipe segment. Adjusting staffing is something we do regularly and it’s not a significant concern.

Any sense of kind of what capacity in the aggregate facility is operated at in the first quarter?

Yes. In aggregate, what I would say as a practical capacity for steel pressure pipe, it was about 64%, 65%.

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Scott for any further closing comments.

Thank you all for joining us today. I want to share a few final thoughts. We've seen significantly improved bidding for steel pressure pipes in 2024, and we anticipate this positive trend will continue in the near term, specifically throughout 2024. More importantly, we expect this favorable environment to persist for the next three to four years, which should create an interesting scenario for steel pressure pipes. Long-term, we are well positioned to accommodate increases in business and to manage production effectively. On the precast side, we expect to have a stronger 2024 than we did in 2023, despite the macroeconomic pressures from elevated interest rates. We mentioned in our last call that the consolidation in the steel pressure pipe business and our entry into the precast business have enhanced the company's resiliency. We are currently experiencing the benefits of this situation. We experienced a relatively weak quarter in precast, but it still turned out to be one of the largest first quarters we've ever had at the company. A few years ago, this wouldn't have been the case, so it's crucial to keep that in mind. Thank you, everyone, for your time and attention today. We look forward to speaking with you again in August for our second quarter call. Thank you very much.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.