NWPX Infrastructure, Inc. Q4 FY2024 Earnings Call

Greetings, and welcome to the Northwest Pipe Company Fourth Quarter and Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Scott Montross, Chief Executive Officer for Northwest Pipe Company. Please go ahead, sir.

Good morning, and welcome to Northwest Pipe Company's fourth quarter and full year 2024 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, February 26, 2025, approximately 4 PM Eastern Time. This call is being webcast and it is available for replay. As we begin, I would 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-Ks for the year ended December 31, 2023, and our other SEC filings for 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 2024 performance and outlook for 2025. Aaron will then walk you through our financials in greater detail. We delivered strong results in 2024, achieving record financial and operational performance in a complex market environment. Our annual net sales of $492.5 million were one of the highest in our company's history, increasing 10.8% over 2023 in what I would call a decent but not remarkable SPP bidding market environment, with an added element of depressed market conditions on the non-residential side of our precast business impacting our volumes. However, our strategy led us to produce record consolidated gross profit dollars as well as record profitability that was consistent with our free cash flow generation, both of which translated to $3.40 per share, demonstrating the strength and quality of our earnings. Most importantly, we achieved record safety performance in 2024, with a total recordable incident rate of 1.25, underscoring our unwavering commitment to the well-being of our employees, as well as demonstrating a stable operating environment. To further break down our segment level results, revenue from our SPP segment totaled a record $337.9 million in 2024, up 14% year over year. Our performance reflected higher production levels resulting from ongoing strength in our backlog due to the consistent level of bidding as well as changes in project timing. Our SPP backlog, including confirmed orders, increased to $310 million as of December 31, from $282 million as of September 30, 2024, and was down slightly from $319 million as of December 31, 2023. The bidding environment is expected to remain fairly consistent in 2025. Our SPP team has continued to do a great job executing on bids and projects. However, our 2024 performance was partially offset by lower realized selling prices due primarily to lower raw material costs. While steel prices declined throughout 2024, they have been on the rise in 2025, now in the $850 per ton range, up approximately $125 from the end of January, with lead times standing at about six to eight weeks. Though still well below levels from a year ago, we believe the recent steel tariff overtures will help support higher steel pricing in 2025 and, in turn, support higher SPP project pricing. In general, we are in favor of higher steel prices, which are positive for our SPP business. Now turning to our precast segment. Precast revenue increased 4.5% year over year to a new annual record of $154.6 million, despite ongoing challenges in the non-residential construction market. Our performance was driven by continued strength on the residential side of our Geneva business, as strong demand led to higher production and shipment levels. While our volumes were very healthy, reduced shipments on the non-residential construction-related portion of our precast business at Park partially offset some of this strength, as the current higher interest rate environment has continued to affect the market for commercial construction. However, the Dodge Momentum Index was 19% higher in December 2024 than it was the previous year, indicating growing strength in the non-residential construction market in 2025. The commercial sector was up 30% versus the prior year period, while the institutional sectors remained fairly flat. On the pricing side, while the residential portion of our precast business benefited from multiple price increases throughout 2024 driven by strong demand at the Geneva locations, low demand and downward pricing pressure on our non-residential precast business more than offset these benefits. As of December 31, our precast order book surged to $61 million, which was up from $57 million as of September 30, 2024, and a significant increase from $46 million as of December 31, 2023, indicating strong momentum heading into 2025. Importantly, a fairly large portion of the year-end precast order book surge was on the Park non-residential side of our precast business. The order book on the residential side of our precast business at Geneva remains stable at strong levels. Our consolidated gross profit in 2024 was another record $95.4 million, up 22.9% year over year, and resulted in a strong gross margin of 19.4%, up from 17.5% in 2023. This is the strongest annual gross margin we have reported for the current SPP and precast configuration of the company. Our SPP gross margin of 18.5% was also strong, increasing by approximately 420 basis points over 2023, primarily due to higher production volumes. Our precast gross margin of 21.2% in 2024 primarily resulted from changes in product mix, while margins on the residential construction side of the Geneva location strengthened versus last year. Lackluster demand on the non-residential commercial construction portion of our business resulting from higher interest rates has led to some margin compression. Next, I would like to provide an update on our product spread strategy, which has been a crucial element of our top strategic priority to grow the business. As part of level one product spread, we bid over $57 million worth of projects outside of Texas in 2024 and booked approximately $10 million worth of orders, achieving our goals for the year. This endeavor enhanced capacity utilization at our Texas-based precast plants and helped maximize overall efficiency and production volume. As part of level two, we gained additional traction on product spread at the Geneva plant in Utah by booking approximately $2.3 million of Park-related projects in 2024. And finally, as part of level three product spread, we are in the process of expanding Park and other precast-related products to additional Northwest Pipe legacy locations now that the Park precast products are more comfortably established at the Utah Geneva locations. Our new goal for 2025 is to book in excess of $12 million worth of Park-related projects outside of Texas. We expect level three will be put into place by midyear and will begin to benefit our results more in 2026 and beyond. Additionally, we are continuing to organically invest in our footprint and equipment to drive capacity expansion and greater efficiencies. We are pleased to complete the reinforced concrete pipe and manhole mill at our Salt Lake City, Utah facility and are in the process of commissioning. As a reminder, this investment provides the rapidly growing Geneva operations with additional production capacity and capabilities. It is our intention to continue to invest in our precast facilities to drive organic growth. We are also investing to maximize efficiencies in our other Northwest Pipe legacy SPP plants. In addition to our focus on organic growth, we are actively evaluating M&A opportunities in the precast-related space that would help accelerate progress on our precast strategy by increasing our manufacturing capabilities and production efficiencies and expanding our geographic reach and product portfolio. Concurrent with our growth plans, we are actively repaying the debt we incurred to finance the 2021 acquisition of Park USA. In 2024, we repaid $26 million of our debt, and our balance sheet remains healthy with ample liquidity. As I've mentioned, we will opt to repurchase shares of our common stock as we did this past year in the absence of a viable M&A opportunity. Before I conclude, I'd like to summarize our outlook for the first quarter of 2025. In our SPP business, we anticipate modestly lower revenue versus the first quarter of last year related to product mix and the continuing impact of nationwide weather events. Due to typical seasonality and severe weather conditions that have led to unscheduled downtime at our various SPP facilities, however, we expect margins to be similar to the first quarter of last year. That said, we entered 2025 with a strong SPP backlog, and while we expect a light bidding environment in the first quarter, we anticipate strong bidding activity in the second and third quarters, with full-year bidding levels aligning closely with 2024. We continue to 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 presentation, which can be found on the Investor tab of our website within the Events and Presentations section. In our precast business, we entered the year with a robust order book and are projecting a strong 2025. The residential business remains strong, and we are now seeing a surge in the non-residential order book, indicating improved strength in 2025. For the first quarter of 2025, our precast revenue and margins are expected to be as good or higher than the first quarter of 2024 due to higher production levels and associated better absorption as well as the growing strength of our order book. 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 and the growing need for infrastructure spending in the U.S. and our growing market position. On a consolidated basis, we expect the first quarter of 2025 to be relatively similar to the first quarter of 2024, as weather events in various locations across the country continue to have an impact. In summary, I'm very pleased with our record 2024 performance across various metrics. I'd like to thank our talented team at Northwest Pipe for their strong execution of our growth strategy in a highly complex market environment and for executing another record safety year. We look forward to benefiting from a solid bidding market and precast order book in 2025. Looking ahead, our priorities are to: one, maintain a safe workplace where employees are proud to work; two, focus on margin over volume; three, continue cost reductions and efficiencies at all levels of the company; four, intensify our focus on strategic acquisition opportunities to grow the company; and five, in the absence of M&A opportunities, return 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'd like to echo Scott's sentiments surrounding the company's back-to-back record safety year. We hold safety as the core value most important to our corporate culture. We believe our team's success with workplace health and safety has a direct correlation to the financial performance I'm about to take you through. Again, congratulations to the entire company on this outstanding accomplishment. Now I'll discuss our record year and fourth-quarter profitability. Consolidated net income for the quarter was $10.1 million or $1.00 per diluted share, compared to $5.4 million or $0.54 per diluted share in the fourth quarter of 2023. I'd also note that our profitability benefited from the realization of previously uncertain tax positions. As anticipated, this reduced our effective income tax rate and resulted in a favorable impact of approximately $2.3 million on our net income in the fourth quarter of 2024. Without this unique item, our consolidated net income for the quarter would have been approximately $7.8 million or $0.77 per diluted share. There was no line item included in our earnings per share for the fourth quarter or full year of 2023. For the full year 2024, consolidated net income was a record $34.2 million or $3.40 per diluted share, compared to $21.1 million or $2.09 per diluted share in 2023. Our fourth-quarter consolidated net sales increased 8.6% to $119.6 million compared to $110.2 million in the year-ago quarter. Steel Pressure Pipe segment sales in the quarter increased 9.9% to $82.5 million compared to $75.1 million in the fourth quarter of 2023. The improvement was primarily driven by an 11% increase in tons produced, resulting from improved market demand and a continued solid bidding environment as well as changes in project timing. Precast segment sales in the fourth quarter increased 5.9% to $37.1 million compared to $35.1 million a year ago. This was driven by a 23% increase in volume shipped as demand at our Geneva operations in Utah remained strong, which was partly offset by continued softness in commercial construction demand in Texas. Additionally, our precast sales were negatively impacted by a 14% decrease in selling prices resulting from changes in product mix. As a reminder, the products we manufacture are unique. Shipping 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, which are highly dependent on the composition of each segment's product mix. Our fourth-quarter consolidated gross profit increased 16.3% to $22.4 million or 18.8% of sales, compared to $19.3 million or 17.5% of sales in the fourth quarter of 2023. SPP gross profit increased 32.2% to $14.8 million or 17.9% of segment sales, compared to gross profit of $11.2 million or 14.9% of segment sales in the fourth quarter of 2023, primarily due to higher production volume resulting from improved market conditions, as well as changes in product mix. Further, our steel pressure pipe margins were negatively impacted by tariffs enacted on foreign steel starting in July 2024. Regardless of our ongoing dispute over the applicability of these tariffs and their retroactive application, our gross profit was reduced by $0.8 million during the quarter. If we are unsuccessful in disputing the merits of our steel sourcing for the handful of jobs affected, we expect the future incremental costs associated with these previously enacted tariffs to be approximately $0.8 million and realized over the next two quarters. We intend to work vigorously to defend the company's position regarding this matter. Precast gross profit decreased 5.4% to $7.7 million or 20.7% of precast sales from $8.1 million or 23.2% of segment sales in the fourth quarter of 2023, primarily due to changes in product mix, specifically the higher proportion of shipment volume derived from lower-margin commercial products. Selling, general, and administrative expenses for the quarter increased 12% to $11.9 million or 10% of sales, compared to $10.7 million in the fourth quarter of 2023 or 9.7% of sales. The increase was primarily due to higher incentive compensation expense, including for both cash-based and share-based programs. Our non-cash share-based compensation expense in the fourth quarter of 2024 was $1.2 million compared to $0.6 million in the year-ago quarter. For the full year, our selling, general, and administrative expenses increased 7.7% to $47.2 million or 9.6% of consolidated net sales, compared to $43.8 million or 9.9% of sales in 2023, also due predominantly to higher performance-based incentive compensation program costs. For the full year 2025, we estimate our consolidated SG&A expenses to be in the range of $47 million to $50 million. Depreciation and amortization expense in the fourth quarter of 2024 was $4.8 million compared to $4 million in the year-ago quarter. For the full year, depreciation and amortization expense was $19.1 million compared to $15.8 million in 2023. We expect depreciation and amortization expense to be approximately $18 million to $20 million for the full year 2025. Interest expense decreased to $0.9 million from $1.1 million in the fourth quarter of 2023 due to a decrease in average daily borrowings. For the full year, interest expense increased to $5.7 million compared to $4.9 million in 2023, and for the full year 2025, we expect interest expense to be approximately $3 million. Our 2024 income tax expense was $8.2 million, resulting in an effective income tax rate of 19.3%, compared to $8.2 million in the prior year and an effective income tax rate of 28%. As previously discussed, our effective income tax rate for 2024 was significantly impacted by the realization of uncertain income tax positions due to a lapse in the statute of limitations from the year the tax attribute originated. This resulted in a favorable impact on our fourth quarter and full-year provisions of approximately $2.3 million. In 2023, the effective income tax rate was primarily impacted by nondeductible permanent differences, accrued interest on uncertain income tax positions, and state income tax rates. We expect our tax rate for the full year 2025 to be within the range of 24% to 26%. Now I'll transition to our financial condition. We generated strong cash flows in 2024. For the quarter, net cash provided by operating activities was $36.1 million compared to $9 million in the fourth quarter of 2023. For the full year, we generated net cash provided by operating activities of $55.1 million, a modest increase from $53.5 million in 2023 due to our improved profitability, partially offset by a reduction in cash provided from working capital. Additionally, our full-year free cash flow of $34 million was better than anticipated due largely to shifting working capital needs in our steel pressure pipe business, which will vary quarter to quarter. For the full year 2025, we anticipate free cash flow to range between $23 million and $30 million. As we've previously emphasized, enhanced cash generation remains a key focus of our leadership team. Our capital expenditures for the fourth quarter were $4.2 million compared to $5 million in the fourth quarter of 2023. For the full year 2025, we anticipate our CapEx to be in the range of $19 million to $22 million, including about $5 million in various investment projects, most notably to support the precast product spread as well as initiatives to grow revenues at both our Park and Geneva businesses to $100 million in the near term. As of December 31, 2024, we had $24.7 million of outstanding borrowings on our credit facility, leaving approximately $99 million in additional borrowing capacity on our credit line. We remain committed to our capital allocation strategy that is duly focused on both growth and providing stockholder returns, including our anticipated adoption of a new share repurchase program from which we expect to start transacting early in the second quarter. In summary, we are extremely pleased we have achieved new annual performance records in safety, revenues, gross profit, and earnings per share. We believe our steel pressure pipe and precast businesses remain well-positioned in 2025 and beyond given the new level of through-cycle resiliency achieved through our growth into precast. Thank you again to our dedicated employees who made these achievements possible and to our shareholders for their continued trust and support of Northwest Pipe Company. I will now turn it over to the operator to begin the question and answer session.

Thank you. At this time, we'll be conducting a question and answer session. A confirmation tone will indicate your line is in the question queue. Our first question comes from the line of Julio Romero with Sidoti and Company. Please proceed with your question.

Thanks. Good morning Scott and Aaron. You guys had a pretty strong free cash flow year in 2024, very similar and impressive to 2023 free cash flow. Just talk about your expectations for 2025 on the free cash flow front and how you're thinking about managing the variability of cash flow between quarters, especially as Aaron alluded to in his comments about the shifting working capital needs of the SPP portion, particularly as that becomes a stronger portion of the business.

Julio, a big part of the focus on cash flow has been on mining the cash that's tied up in current assets specifically related to the SPP business. As we said last year, we made that an item for everyone's variable compensation in the management group. So there's a lot of attention on cash flow all the time. We get a report every day that tells us how much cash has come into the company and where we are for every month, and it's always a focus and a goal to try to make sure we're getting more cash in than revenue we're recognizing in a specific month or time period. The belief is that our cash flow should either be as good as or improve versus where we were in 2024. It's a daily focus and part of everyone's goals in the company. Aaron can talk a little bit about the first quarter.

At the end of 2023, we really didn't have the billings that we needed to have a strong cash flow in the first quarter of 2024, which is why we started the year so slow and came on through the course of the year. This year is shaping up to be much different due to many of the initiatives Scott just described. We had a strong billings performance for our steel pressure pipe business in the last quarter of the year, and things have proceeded pretty well into the first quarter, which will set us up for better performance than you saw last year. I would expect we would be fairly ratable to my estimate in the first quarter and maybe have a little bit of a softer second quarter, but then progress up and see things improve through the balance of the year, with cash flow getting to that $23 to $30 million range that we discussed.

Got it. Very helpful there. You mentioned expecting the bidding environment for SPP to remain on balance fairly consistent for the full year of 2025. Can you also talk about industry capacity as it currently stands for additional work, especially given fewer industry participants compared to previous cycles? And what that means for the profit outlook for 2025 and beyond, even though the bidding environment is fairly stable.

We haven't talked about capacity in quite a while. For our SPP business, rated capacity is probably around 180,000 tons per year. Practical capacity for us is probably in the area of 135,000 to 140,000 tons. We have approximately half of the capacity in the marketplace, so total market capacity is likely in the area of about 300,000 to 330,000 tons. Even with the expectation coming with IIJA, I think there's more than enough capacity in the market to do that. Remember, we are, in most instances, running one shift at our steel pressure pipe plants. If you start running multiple shifts, you can scale up quickly to handle far more than the market would provide. We don't have concerns about our ability to handle the higher tonnage production levels expected from IIJA-funded projects in 2026 and beyond. In fact, we welcome that.

Very helpful. On the precast side, you talked about the surge in the precast order book at year-end being weighted towards the Park non-residential side. How does that translate to the non-residential portion throughout 2025 in terms of cadence?

Start with the Dodge Momentum Index, which is representative of non-residential commercial and institutional projects. Projects typically go into planning about 12 months before they start getting produced. We saw momentum in the Dodge Momentum Index through 2024, and it started to translate into the order book at the non-residential facilities for Park USA. The order book grew to relatively strong levels through year-end, which normally doesn't happen and bodes well for production and shipments of non-residential projects in 2025. Park suffered through a rough non-residential market in 2024 and was probably off between 15% and 20% because of interest rates. We are seeing order book growth, so production, shipment, and revenue levels appear to be coming back relatively strong in 2025. On the residential side, Geneva has stayed very strong and stable. Geneva's revenue more than doubled since we acquired them in 2020. We're seeing a strong precast market going into 2025, and for SPP we're seeing bidding that will be similar to 2024. The first quarter is a little slower in SPP bidding this year, but we expect really strong second and third quarters and to finish the year similar to 2024. I'll take it. Thanks.

No problem.

Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.

Thanks. Good morning. I wanted to get more color on the tariff matter you mentioned. That was news to me. If you could provide a little color on what happened, and I assume you will have to pay these tariffs for product that was from steel brought in in the back half of 2024. First, did I read that correctly? Second, can you explain what that was and any ramifications going forward?

Ted, this is a twofold issue. The tariff I referenced relates to Proclamation 10,783 from the previous administration, which in July 2024 applied a 25% tariff on steel not poured and melted in the U.S., Canada, or Mexico. That had retroactive elements. We were shipped coils by one of our steel producers that were produced from Brazilian slabs that came in under a quota, and the administration applied this retroactive tariff. That hit us in the fourth quarter to the tune of about $800,000 and likely a similar amount in the first quarter, which we've built into our forecast. That's an impact from the prior administration. Aaron and I can speak further about the current administration's actions and exclusions as needed.

Is there a chance you'll contest this and get funds back, or will you have to pay and absorb it?

We've been fighting this. We have trade attorneys working on it. It will be a long process because there is confusion over the tariffs, especially since the new administration has issued different proclamations that can affect the prior action. We're disputing the Brazilian slab piece of this and will continue to try to defend the company's position. There is litigation and administrative work underway.

My next area was about the new administration and proposed tariffs on steel. How do those efforts impact your business, guidance, and the bidding environment? If tariffs increase import costs, that could raise construction costs and potentially hurt demand. How do you see the administration's tariff approach playing out for your business?

This is an important question. Trade policy from the new administration has created some flux. One issue is the potential long-term impact of tariffs on GDP and inflation. There are risks to GDP growth and potential inflationary impacts. We conducted a risk analysis because we have a plant in Mexico (SLRC). For steel that is mined and melted in the United States, shipped into Mexico and processed there, then shipped back, we expect to be able to secure an exclusion. We have three scenarios: 1) If an exclusion is denied for SLRC, we can move work to our other U.S. plants (Tracy, Adelanto) as needed. There could be some revenue and gross profit impact, but we have five other steel pressure pipe plants. 2) If we receive the exclusion for U.S. mined-and-melted steel, then operations continue as planned with no tariff impact. 3) If tariffs are enacted and Canada retaliates, given we ship product to British Columbia and there are no steel pressure pipe plants in Canada, we can produce product at SLRC and ship into Canada, assuming no opposing tariffs. The flexibility of having six plants allows us to move work between facilities to mitigate impact. While there are ambiguities, we believe the plant network and potential exclusions limit downside.

Okay. A couple of smaller questions. For SPP, how do tons produced in Q4 2024 compare to historical highs? Where are you relative to the best production levels in the past?

Overall tons in Q4 and for the year were significantly up versus the prior year. Versus historical highs, we're seeing somewhat fewer tons overall in the market. That doesn't reflect lower demand; it's more about engineering efficiencies and design improvements that require less steel in some projects. Grades and efficiency of design allow for thinner steel in some cases, so tons have evolved downward even as project counts remain similar. We currently have about 50%+ market share, and we evolve with the marketplace. We expect tons to start going up with IIJA-funded projects, but engineering efficiencies remain a factor.

Where are you with M&A? You've shown strong organic performance, but M&A would accelerate growth. Do you have opportunities or irons in the fire that could close this year or within the next two years? How many deals have you looked at and how close have you come in the past?

We have a couple of opportunities moving down the path that could happen this year or early next year. We're not at the starting line; we're trying to pass it. Our strategy is to grow precast and reach a larger scale — ultimately targeting a billion-dollar company, and we're roughly halfway there. To get there we need both organic growth and acquisitions. The acquisition targets we're seeing are generally in the $40 million to $50 million top-line range similar to Geneva, and at a certain point we'll need larger transactions to accelerate growth. We have a couple of things in front of us that look promising, and we're working through how to create more mass to take on bigger opportunities.

Last question: What percentage of SPP cost of goods sold is steel purchases?

Right now, steel represents about 29% to 30% of SPP COGS, similar to last year.

Alright. That's it for me. Great quarter, congratulations.

Thank you. Our next question comes from the line of Jean Valiz with D.A. Davidson. Please proceed with your question.

Hi, good morning and thank you. Quick clarification: what are your assumptions for precast margins for the first quarter of 2025?

For the first quarter of 2025, our precast margins are expected to be in line with the first quarter of 2024.

Looking at SPP backlog and your assumptions on steel price, if bidding is relatively in line with 2024, how does that carry through the year's margins? Should we expect margins higher than 2024 or in line with 2024?

We ended 2024 with a strong backlog of $310 million, up from about $282 million the previous quarter. If demand remains as we see it now, margins should stay relatively steady with some upward pressure through 2025. As demand increases with IIJA-funded projects in the coming years, we expect SPP margins could move from the 'one' range to the 'two' range percentage-wise, meaning incremental improvement as demand tightens and pricing adjusts.

On the residential side, you noted activity being really strong. Can you talk about how you see the business developing through 2025? And when do you expect non-residential to make a material mark on the model and margins?

You'll see seasonality in the residential precast business, particularly because our Utah plants experience winter weather. The first quarter tends to be lighter, the second and third quarters are the big ones, and the fourth quarter slows as ground freezes. Geneva was about $83 million in revenue in 2024, more than double the size when we acquired them in 2020. We recently completed the reinforced concrete pipe and manhole mill at our Salt Lake City facility and have additional investments planned in Geneva to expand product capabilities. We have a plan to reach a $100 million annual run rate at Geneva by the end of 2026, which will increase absorption and allow margins at Geneva to continue improving. Non-residential improvements at Park should begin to show in production and shipments by the end of the first quarter and into the second quarter, improving margins as volume increases through the year.

Appreciate that color. Quick follow-up: you mentioned the $100 million Geneva run rate by the end of 2026. Do you have similar revenue outlooks or targets for Park?

Yes. We have the same goal for Park USA: we'd like to see both Park and Geneva on a $100 million annual run rate by the end of 2026.

Thank you. That concludes our question and answer session. I'll turn the floor back to Mr. Montross for any final comments.

Just a few final comments. We faced some headwinds in 2024, including a tough non-residential market that affected revenue and profitability and the retroactive tariffs that impacted the fourth quarter. Yet we produced a fourth quarter that was strong by historical standards and a full year with record sales for SPP and precast, record annual gross profit approaching $100 million, and resulting net income and free cash flow of $3.40 per share, demonstrating the strength and quality of our earnings. As we head into 2025, we face different headwinds, particularly related to tariffs. In my thirteen years in this role, I can't remember a time we didn't face headwinds. The difference now is we are well positioned and geared to handle them, and we expect to be successful under current conditions. We enter 2025 with a very strong SPP backlog of $310 million, anticipate a strong year like 2024, have a surging precast order book over $61 million, and expect a very strong precast year and a good SPP year. We'll continue to focus on safety, improving margins, growing both organically and through M&A, and driving shareholder value. As Aaron mentioned, we anticipate putting in place a new share buyback program in the next couple of months. We expect a good 2025. Thank you all for your attendance and participation. We look forward to talking to you again in the May timeframe for our first quarter 2025 results. Thanks again, and have a great day.