Good morning and welcome to Northwest Pipe Company's Second Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Scott Montross, Chief Executive Officer. Please go ahead.

Good morning and welcome to Northwest Pipe Company's second 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, July 31st, 2024, at approximately 4:00 P.M. Eastern Time. This call is being webcast and it is available for replay. As we begin, I'd like to remind everyone that 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 31st, 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 second quarter performance and outlook for 2024. Aaron will then walk you through our financials in greater detail. We delivered strong second quarter results, led by growth in our Steel Pressure Pipe business and the residential side of our Precast business. Our consolidated net sales increased 11.3% year-over-year to $129.5 million, the strongest quarterly level we have seen since early 2013. Our profitability significantly improved. And when coupled with effective working capital management, helped drive strong cash flow during the quarter. To further break down our segment-level results, revenue from our SPP segment totaled $89.5 million, an increase of 15.9% year-over-year and the highest quarterly revenue reported in our history. Our performance primarily reflected higher production levels due to changes in project timing, which reflected the strong pipeline of bidding opportunities that we saw in the first half of the year. Our SPP team has continued to do an excellent job executing on bids and projects, securing a number of new project wins in the second quarter and improving our backlog, while at the same time, generating record revenue and strong free cash flow. Our SPP backlog, including confirmed orders as of June 30th was $348 million, an improvement from $337 million as of March 31st, 2024, and up from $343 million at June 30th, 2023. Our second quarter performance was partially offset by lower realized selling prices due to production mix in the quarter. Steel prices steadily declined throughout the course of the second quarter, but appear to be reaching the bottom and are stabilizing in the $650 a ton range. Lead-times stand at about three to four weeks. Now, turning to our Precast segment. Precast revenue increased by 2.2% year-over-year to $40 million, primarily due to continued strength on the residential side of our business at Geneva, which resulted in strong production and shipment levels and further improvement to our order book. However, reduced shipments on the non-residential construction-related portion of our Precast business at Park offset much of this strength, primarily due to various severe weather events we experienced in Texas throughout the quarter. These events led to significant disruptions in our production, shipping, and order intake at all three Park facilities, which we estimate had an approximate $4.3 million negative impact on our Precast sales during the quarter. In addition, the current interest rate environment continues to create persistent headwinds on the commercial non-residential side of our business. On the pricing side, both the residential and non-residential Precast businesses saw better pricing dynamics in the second quarter following the implementation of multiple price increases. As of June 30th, our order book improved to $62 million from $52 million as of March 31st, 2024, and $58 million as of June 30th, 2023. Our consolidated gross profit for the second quarter increased 14.8% year-over-year to $25.8 million, a new consolidated gross profit record for the company, resulting in gross margins of 19.9%, up from 19.3% in the second quarter of 2023. Our SPP gross margin of 19% was strong, increasing by approximately 270 basis points over the prior year period and 120 basis points over the prior quarter, primarily due to higher production volume, which improved our overhead absorption as well as changes in product mix and significant strength that we saw in the second quarter bidding activity. Our Precast gross margin of 22.1% was down compared to the 25.3% in the second quarter of 2023, primarily as a result of the severe weather-related impacts on our production and shipping days, which reduced our second quarter revenue at the Park facilities and resulted in reduced overhead absorption. However, the margins on the residential construction side at Geneva strengthened versus the year-ago period. Next, I would like to provide an update on our capital allocation priorities. Our primary strategic focus remains on growing the business through a combination of organic precast product spread strategy and future M&A opportunities. Beginning with product spread, traction has continued on Level 1 of this strategy by building out capacity utilization at our Texas-based precast plants to maximize overall efficiencies and production volume. Year-to-date, we have continued to make solid progress despite the weather-related headwinds at Park by bidding on $30 million worth of projects outside of Texas and booking approximately $5 million worth of orders outside of Texas. In regard to Level 2 of our strategy, to produce Park products at our existing Northwest Pipe plants, year-to-date at Geneva, we have completed production on 15 projects, and we are currently in production on six more projects, with an additional 10 projects pending. 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, repaying the debt we incurred to finance the 2021 acquisition of ParkUSA as well as financing the current growth of the SPP business and related working capital remains very high on our list of priorities to ensure that we are well-positioned to pursue further Precast-related growth opportunities. In regard to our M&A strategy, we are actively evaluating various opportunities in the precast-related space that would help increase our manufacturing capabilities and product portfolio, maximize production efficiencies and expand our geographic reach. The precast space continues to be an attractive area of expansion for us despite the near-term headwinds we've encountered resulting from the current interest rate environment. As previously noted, we are looking for high-quality, well-run businesses that are accretive to our earnings and that possess a strong potential for organic growth, enhanced margins, and consistent positive cash flow generation. Next, we may opt to be opportunistic in repurchasing shares of our common stock while we continue to evaluate accretive M&A opportunities. During the second quarter, we repurchased approximately 18,000 shares of our common stock for a total of $0.6 million. And since the initial authorization of our share repurchase in November of 2023, we bought back a total of 174,000 shares for $5.1 million as of July 31st. Before I conclude, I'd like to summarize our outlook for the third quarter of 2024. In our Steel Pressure Pipe business, we anticipate both our revenue and gross margins to be relatively in line with or down modestly from the record second quarter we just delivered, primarily related to a mix of projects that we have booked and their overall impact on production volume. We also expect backlog to remain high by historical standards, given the volume of expected SPP bidding in the second half of 2024 that is currently expected to be slightly larger than the first half. We remain encouraged by the amount of activity we are seeing on our current and upcoming water transmission projects, which can be found detailed in our investor presentation on the Investor Relations portion of our website. In our Precast business, following a slow first half of the year, we are expecting a stronger third quarter with improvements in both revenue and margins, positioning us for a strong second half of the year. We continue to believe in the strength of the Precast business in the mid to long term given the significant amount 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, we are very pleased with our results, which reflect the attainment of two new quarterly records despite the various challenges we encountered. Our performance continues to be supported by a significantly stronger bidding environment in 2024 that is anticipated to remain elevated throughout the balance of the year. I'd like to express my gratitude to our teams in the field for their continued strong execution and for prioritizing safety in everything that they do. Additionally, our results continue to be bolstered by the diversification strategy we began deploying in 2020 with our entry into the precast space. In comparison to the SPP business, the Precast businesses are more transactional in nature, which creates an overall faster cash conversion cycle and helps balance out our business, especially during periods of variability in the SPP market. Looking ahead, our priorities remain on; one, maintaining a safe workplace where our employees are proud to work; two, persistently focusing 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 with an overview of our second quarter profitability. Consolidated net income for the second quarter was $8.6 million or $0.86 per diluted share compared to $7.4 million or $0.74 per diluted share in the second quarter of 2023. Consolidated net sales increased 11.3% to $129.5 million compared to $116.4 million in the year-ago quarter. Steel Pressure Pipe segment sales increased 15.9% to a record $89.5 million compared to $77.3 million in the second quarter of 2023. As Scott highlighted, SPP sales exceeded our expectations, driven by a 56% increase in tons produced, resulting primarily from improved market demand and changes in project timing, which were partially offset by a 26% decrease in selling price per ton, primarily due to lower raw material costs, coupled with changes in product mix. Precast segment sales increased 2.2% to $40 million compared to $39.1 million in the second quarter of 2023 due to a 30% increase in volume shipped, partially offset by a 22% decrease in selling prices stemming from changes in product mix. Our Geneva business continued to benefit from higher shipment volumes in the second quarter on strong demand, while our Park business was slower due to headwinds in the commercial construction market in Texas as a result of the interest rate environment as well as weather delays. As a reminder, the 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 14.8% to $25.8 million or 19.9% of sales compared to $22.5 million or 19.3% of sales in the second quarter of 2023. Our second quarter represented a record consolidated gross profit for the company. Steel Pressure Pipe gross profit increased 35.1% to $17 million or 19% of segment sales compared to gross profit of $12.6 million or 16.3% of segment sales in the second quarter of 2023, primarily due to higher volume and changes in product mix. Precast gross profit decreased 10.9% to $8.8 million or 22.1% of Precast sales from $9.9 million or 25.3% of segment sales in the second quarter of 2023, primarily due to changes in product mix. Despite strengthening residential infrastructure demand, particularly in Utah, we saw continued margin compression for the Precast segment during the second quarter due to continued headwinds in the commercial infrastructure markets, coupled with shipment delays at Park. Selling, general, and administrative expenses increased 10.7% to $12.2 million or 9.4% of sales compared to $11 million in the second quarter of 2023 or 9.5% of sales. The increase was primarily due to higher incentive compensation expense. Our non-cash incentive compensation expense in the second quarter of 2024 was $1.6 million compared to $1.3 million in the year-ago quarter. For the full year of 2024, we now expect our consolidated selling, general, and administrative expenses to be in the range of approximately $46 million to $48 million. Depreciation and amortization expense in the second quarter of 2024 was $4.7 million compared to $3.9 million in the year-ago quarter. We expect depreciation and amortization expense to be between $19 million and $20 million for the full year 2024. Interest expense increased to $1.8 million from $1.2 million in the second quarter of 2023, due primarily to the increase in average daily borrowings and to a lesser extent, a higher average interest rate. For the full year of 2024, we expect interest expense to be approximately $6 million. Our second quarter income tax expense was $2.9 million, resulting in an effective income tax rate of 25.5% compared to $2.7 million in the prior year quarter or an effective income tax rate of 26.5%. Our tax rate for the second 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 provided by operating activities was $22.3 million in the second quarter of 2024 compared to $1.2 million in the second quarter of 2023, primarily due to changes in working capital and higher profitability. Enhanced cash flow generation remains a key focus of our business as it is critical to the execution of our growth strategy and delivering greater value to our shareholders. While we had anticipated working capital pressures for the Steel Pressure Pipe business in the first half of the year, the actual working capital position at June 30th was less than expected attributable to an increase in contract liabilities stemming from our ability to build early for certain large projects. This more than offset the higher-than-anticipated SPP production levels achieved during the quarter. We continue to expect our cash flows to improve in the second half of the year, with free cash flow anticipated to range between $19 million and $25 million for the full year 2024. Our capital expenditures totaled $6.1 million in the second quarter of 2024 compared to $4 million in the prior year quarter. We anticipate completion of the new concrete pipe project in Salt Lake City in the next three months, which, after successful commissioning, is expected to improve production yields and efficiencies on the reinforced concrete pipe and manholes we produce and sell out of that facility. We continue to anticipate our total CapEx to be in the range of $19 million to $22 million for the full year 2024. As of June 30th, 2024, we had $75.9 million of outstanding borrowings on our credit facility, leaving approximately $47 million in additional borrowing capacity on our credit line. In summary, we are extremely pleased with our record quarterly gross profit and overall improved financial performance, including our cash flows, which are all a testament to our team's focus, dedication, and execution. Our ability to adapt to market conditions is evident in our financial achievements, and our strategic initiatives have positioned us well for future growth and continued success through the balance of this year and beyond. Thank you to all of our employees for their continued commitment to safety and exemplary execution 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.

Ladies and gentlemen, at this time, we'll begin the question-and-answer session. And our first question today comes from Julio Romero from Sidoti. Please go ahead with your question.

The environment for the second half for Steel Pressure Pipe is expected to be slightly better than the first half. Can you discuss your confidence in the sustainability of strength in the Steel Pressure Pipe segment? Additionally, how long do you anticipate this strength will last?

Hey Julio, we may have missed the start of your question. Regarding the second half, we've analyzed the situation and found that the bidding for this period is slightly higher than in the first half. The steel pressure pipe market remains robust, and we're beginning to see the IIJA funds coming in, which will help support projects. For example, the Eastern New Mexico Rural Water District project has received IIJA funding. However, we anticipate that the majority of the IIJA funds will not significantly impact us until late 2025 or 2026. Therefore, we expect a strong period ahead for the steel pressure pipe sector. I'll pause here to let you ask another question since we missed the beginning of yours.

Yes, I'm sorry about that. I'm sorry if I'm cutting in and out. My question was just really focused, and you kind of hit on it, it's just it sounds like second half 2024 for steel pressure is expected to be better. And it sounds like the long-term IIJA drivers are certainly in place. I'm just trying to think about like the medium term, like 2025 sustainability of SPP. Because I know, in the past, it's been a volatile segment from a profit standpoint. Just help us think about like the medium-term sustainability of this segment? Thanks.

Yes. One of the things that's different about this business now that we've seen longer term is there was a significant amount of consolidation in the business. And even when you look at how 2023 turned out, 2023 was a relatively small year bidding-wise and production-wise in the Steel Pressure Pipe business. And even with that, we were still able to generate a decent gross margin level and profitability. Well, we're seeing a market that's over 40% larger in 2024. And you're starting to see what the results of a market that's that big has on steel pressure pipe: one overhead absorption; two, the bidding pressure on every job because there's so much more bidding is not as great. So, it also allows the pricing and margins to continue to elevate. And we don't expect that to change in the mid-term. We expect to go into 2025 with a strong backlog, the way we have the last few years, and kind of glide rate into that timeframe where the IIJA funding really starts to push up the demand in the business. So, we're not really concerned at this point about any violent fluctuations in steel pressure pipe. But even with that, with the consolidation that's happened in the business, even when we have small markets like we had in 2023, it's still not nearly as volatile as what we saw back in 2015, 2016, and 2017 when there were five major players in the market. Now, there's three major players in the market, and it's consolidated down to a decent level. So, I think that's kind of changed the landscape for probably the longer term, Julio.

Understood. I appreciate you guys providing the context there. Last one, if I could. You called out that $4.3 million negative impact from sales on the precast side due to the weather impact, I believe. Does that get realized in Q3? Is that incremental? Just how should we think about that?

I believe you will notice an increase in Q3 with precast. However, it's important to mention that Hurricane Beryl affected the Houston area, where our largest ParkUSA plant is located, at the beginning of July. The plant was down for about a week due to a power outage affecting two and a half million people. Despite the weather still being somewhat unpredictable with heavy rain, the order book is beginning to grow. There is a revival of confidence in the non-residential business, especially when considering the Dodge Momentum Index, which we monitor closely. The index showed a 7% increase in June 2024 compared to 2023, with the commercial segment up around 25% from last year. Although the institutional segment, which includes schools and hospitals, has declined slightly, our public-facing operations, particularly in steel pressure pipes, are not significantly impacted due to IIJA funding. Overall, I find many positive developments occurring. The Precast business, after what we considered a slow start in the first half of the year, is expected to gain momentum in the latter half. Notably, the residential segment that concerned many due to the interest rate climate is thriving. The Geneva locations are performing exceptionally well, with a strong order book similar to 2022 but with higher revenues. We anticipate a robust year for the Precast division and a significantly improved second half compared to the first half, driven by the continued strength in the residential market, particularly in Utah, alongside the recovery of the commercial side despite some weather-related challenges in Texas.

Very helpful. I'll pass along. Thanks very much.

Thanks, Julio.

Our next question comes from Brent Thielman from D.A. Davidson. Please go ahead with your question.

Hi thanks. Good morning, Scott. Hey Scott, it sounds like Precast visibility much improved into the second half of the year. And it sounds like you think margins should improve from here. Is that principally just because of increased contributions from Park? And if that's the case, can you help us recall what the differential in margins is at Park versus Geneva?

Yes, I believe there will be some extent of improvement due to the increased contributions from Park. However, we have already implemented several price hikes on the Geneva side of the business, particularly with the precast infrastructure products. Our order book keeps growing, and both Geneva and Park are seeing improved margins. Looking ahead, the Park segment will represent a larger part of our overall performance as they recover from weather-related disruptions and the effects of previous interest rate changes. This trend indicates that both segments are enhancing their margins, with Park becoming increasingly significant. Additionally, in the earlier part of the year, while there was a decline in selling prices mainly due to Geneva's larger share of the business, we noted that products being dispatched had decent margins, even if they didn't match the cost or revenue levels of Park's products. Therefore, considering all these factors, Brent, I anticipate a strong second half of the year for Precast.

Okay. And then, Scott, the RCP plant at Geneva, I think it's close to the finish line. Is that a structural change potentially to their margins? Or is that more of a capacity add play?

It's both. I think the biggest thing about the exact 2,500 that we're putting in Salt Lake City is versus the current facility that we have there, which takes about 12 or 13 people to run it. The exact 2,500 is going to take about five or six people to run it. So, you're going to have a better conversion cost profile on that and it should very well lead to higher margins on that and higher level of production capability. So, that's a double-edged sword, right? You got higher margins because you've got a better cost, and then you've got better overhead absorption because you have more production capabilities there. So, I think it's both of those things. It's going to create an upward movement in those margins as long as the market stays like it is. And certainly, we're not seeing really any change that we're expecting in the near future in the precast market.

Okay. And understanding on SPP, you're going to have quarter-to-quarter variability in margin for mix or whatever. But with this environment that you're characterizing, Scott, I mean it sounds pretty healthy here for at least the next couple of years. As you sort of think of the margins from an annual trajectory, do you think there's obviously some opportunity to continue to improve on them in the forthcoming years? I'm not asking for quarter-to-quarter, but this market tightens up, presumably, there's a trajectory higher over the next few years. Is that fair?

Absolutely. And Brent, as we've talked about in the past, I think one of the keys in the Steel Pressure Pipe business is backlog, which we've had historically high backlog now for the last few years and multiple strong years of bidding in a row. And I would characterize 2024 as a pretty decent-sized bidding year. But I think what we see going forward with IIJA funding are even bigger years. So, ultimately, when you start getting to those things multiple years in a row, you start seeing gross margin levels that start with a two on the Steel Pressure Pipe side versus 16, 17, 18, and where we are now is 19% in the second quarter. So, we're starting to kind of get into that territory at this point. But then like you said, you have fluctuations within quarters, and one of the things about the third quarter is that it's hard for me to sit here and predict two record quarters in a row, but we do expect the third quarter to be a pretty strong quarter for Steel Pressure Pipe. So, I think we've got a strong backlog, and we've got upward momentum on the gross margins as we move forward just because of the strength of the market over the next few years.

Okay, good. Thank you, Scott, thanks Aaron.

Absolutely.

Our next question comes from Ted Jackson from Northland Securities. Please go ahead with your question.

Thank you very much. And I want to begin with not just congratulating you on the quarter, which was fabulous, but also the execution in terms of the work on controlling working capital and cash flow, it's something you set forth as a strategy for the management team, and you can see it in the results, and it's great to see. So, congrats on that, too.

Ted.

In terms of my questions, a lot of them have been hit, but I'm going to circle around to a few. And one is just regarding Precast and ParkUSA, if I'm understanding correctly, the business that did not happen during the second quarter because of the weather, we should see in the third quarter? And so we should see a good uptick in your Precast sales in third quarter. Is that a little bit because it's kind of a timing issue, kind of a pig in the python when we should see a, say, not that fourth quarter is weak, but a stronger third quarter than fourth quarter because you're picking up volume that really should have happened in the second quarter?

Yes, I would say that we are expecting a stronger third quarter. The Geneva business is performing exceptionally well, while the Park business is just starting to recover. For instance, we lost nine production days in Houston during the second quarter, four days in Ferris, and one in San Antonio, along with lost shipping days. The severe weather impacted half of the shipping days in Houston and Ferris and affected order placements because many employees couldn't get to work due to flooding and power outages. Consequently, this year might be more back-end loaded, as orders are now being placed and filling up our order books. By the end of the second quarter, our order book for Precast exceeded $60 million, indicating that both sides of the business are starting to pick up, although Park is just now beginning to recover.

Some of these weather issues might not be fully resolved in the third quarter; we could see some impact extending into the fourth quarter as well.

Yes, that's possible. If I had to speculate, Ted, I would say that the fourth quarter for Geneva might be affected because it suddenly gets cold and starts to snow in Utah. This can delay contractors from getting into the field for installations. However, in Texas, I believe the weather issues will create some pent-up demand due to orders that weren't placed. As a result, we might see a fourth quarter that's somewhat larger than usual.

Shifting over to the SPP business, steel pricing has decreased significantly. The revenue numbers you're reporting highlight the strength of your business. You're expecting the third quarter, and the latter half of the year, to remain strong. Given how your business operates, I would anticipate that the average steel price for you in the second half of 2024 will be lower than in the first half, which further emphasizes your strength. As I consider the pressures on steel pricing, where do you see these trends heading as we progress through 2025? Do you believe we will maintain a pricing range of $600 to $700 per ton? My focus is less on the bottom line, as it's more about the top line for your operations, since it's essentially a pass-through for you. However, I would like to understand what's included in your pricing strategy as you manage your business.

Well, over the last, I'd say, three or four years, the steel price fluctuated a lot, and we've continued to be on an upward trajectory on revenue for steel pressure pipe. So, we've seen it back in 2020 down in the below $500 a ton. And back in 2022, it was $1,200 a ton, and then dropped to $690 a ton by the end of the year. And so it's the same thing. It's just kind of fluctuating around. The one thing I would say, our expectations are as we go forward that it's going to probably revolve around a mean of about $800 to $850 a ton as we move forward. But you're going to see highs and lows. And like, for example, now, we've seen the steel price go down for the last several weeks, and it seems to have bottomed out at about $650 a ton. And this week in the market, the price has started to move back up a little bit again. So, it's kind of an interesting way that this thing cycles now. Because once the steel guys start getting below about $700 a ton, they start having a little bit more difficult time making money. And ultimately, they start taking off production capacity and so on and so forth. So, I think you're going to still see it revolving around that $800 to $850 a ton number as we go forward into the future.

Okay. And then sticking on steel, I mean, I know you're not going to give me the exact, but can you give me a sense of what percentage of your COGS was steel for the quarter?

I think, right now, we're probably around 30%-ish.

Okay. And then just kind of keeping over on this side of the world, and you did actually say it, that you're having a better bidding environment; better bidding environment means better margins. So, it's fair to assume that implicit within the guidance that you're bringing for the second half of the year, we should expect to see the margin structure for SPP to be similar to what we just saw in the second quarter if everything.

I believe it will align closely with that, Ted. The key point is that there are variations in production based on the number of jobs undertaken. The steel pressure pipe team has performed exceptionally well in securing numerous projects, which can vary, and it ultimately depends on the nature of these jobs. Considering the specific timeframe of the projects, we can gauge the overall production level and assess how that impacts the overhead absorption profile. This is likely what will lead to some fluctuations during the quarter. However, I expect we're continuing on an upward path throughout the year. It's important to note that the fourth quarter often presents challenges for the steel pressure pipe sector due to weather impacts at our plants and the presence of two significant holidays in that period. Therefore, variations are to be expected. When considering a longer-term perspective, last year's steel pressure pipe margin averaged between 14% and 15%. This year, I anticipate an average that is a few hundred basis points higher. If demand progresses as we expect, particularly with the IIJA funding coming into play by 2025, we should witness increased production levels and eventually, margins beginning with a two in the steel pressure pipe segment.

That's exciting. I have two more questions and then I'll be finished. Regarding the M&A pipeline, no one has mentioned this yet, but I know it's significant. I understand you're exploring opportunities. Can you provide insight into the activity there? Is there anything we should be aware of? Should we anticipate some developments before the end of this year, or perhaps at the end of next year?

We're always exploring opportunities. Currently, we have a couple of potential interests that we're taking a closer look at. However, it can be challenging to finalize these quickly, especially when working with private companies or family businesses, which often take longer to negotiate. I believe there's a strong possibility that you'll see some developments from us by 2025, especially since it's been nearly three years since our last acquisition. We have focused on integrating and enhancing Park, and we're nearing a point where we're ready to pursue new opportunities. This is reflected in our emphasis on cash flow and reducing our credit facility from around $90 million to approximately $75 million by the end of the second quarter. We anticipate this trend will continue throughout the year, positioning us well for the next steps. I do expect to see something imminent by 2025.

Okay. Actually, you know what? My last question isn't really necessary. Again, congratulations on the quarter, great job, and I hope you feel proud of it too. Thanks.

Yes. Good.

Ladies and gentlemen, at this time, I'm showing no additional questions. I'd like to turn the floor back over to Scott Montross for any closing remarks.

Just a few key takeaways before closing. One, I think the expectations for the bidding in 2024 are pretty much coming to pass, and the second half is still very strong. So, we're expecting the Steel Pressure Pipe business to have a very strong year this year. Same thing with the Precast, I mean after a slow first quarter because of some headwinds with weather and some of the issues related to the interest rate environment, we're expecting the second half to be significantly stronger. And a couple of things to mention. It's in our growth strategy. Part of that was centered around stabilizing our Steel Pressure Pipe business and when you look at where we are now versus where we were in 2017, our revenues have more than doubled. And with adding the Precast side of the business to this, the company has more than tripled over the last timeframe. So, ultimately, the things that we're doing on the growth of the company are working. And we continue to be on the track for acquisitions and organic growth on the Precast side, not only from product spread, but potentially doing precast at some of our different plants. And I think longer term, we're in a great spot to be well-positioned from these infrastructure projects that are due to the increasing population, and we're in a great spot going well into the future. I think the biggest takeaway is the business diversification strategy that we've implemented is working. Even with a big part of our business being severely impacted by weather in the second quarter, we were able to put together a fairly decent quarter from our perspective. And imagine, you can do the numbers and see what it would have looked like without the weather impact and what it should look like going forward. So, ultimately, these things are working, and we really appreciate today your attention and the time you take to be on our call and look forward again to speaking with you in the November timeframe. So, thank you.

And ladies and gentlemen, with that, we'll be concluding today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.