NWPX Infrastructure, Inc.: Form 10-Q for the period ended Mar 31, 2026

Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10‑Q for the quarter ended March 31, 2026 (“2026 Q1 Form 10‑Q”) contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), that are based on current expectations, estimates, and projections about our business, management’s beliefs, and assumptions made by management. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “should,” “could,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements as a result of a variety of important factors. While it is impossible to identify all such factors, those that could cause actual results to differ materially from those estimated by us include:

• changes in demand and market prices for our products;
• product mix;
• bidding activity and order modifications or cancelations;
• timing of customer orders and deliveries;
• production schedules;
• price and availability of raw materials and other costs central to producing and shipping our products;
• excess or shortage of production capacity;
• product quality failures that result in decreased sales and operating margin, product returns, product liability, warranty, or other claims;
• international trade policy and regulations;
• changes in trade policy (in particular Canada and Mexico) and duties imposed on imports and exports and the related impacts on us;
• economic uncertainty and associated trends in macroeconomic conditions, including potential recession, inflation, and the state of the housing and commercial construction markets;
• interest rate risk and changes in market interest rates, including the impact on our customers and related demand for our products;
• our ability to identify and complete internal initiatives and/or acquisitions in order to grow our business;
• our ability to effectively integrate recent and other future acquisitions into our business and operations that produce accretive financial results;
• effects of security breaches, computer viruses, and cybersecurity incidents;
• increased use of artificial intelligence by us and our competitors, as well as related legal and regulatory requirements;
• timing and amount of share repurchases;
• impacts of U.S. tax reform legislation on our results of operations, and the impact on our customers and related demand for our products;
• delays or reductions in state or local government spending due to revisions to federal appropriations brought on by policy changes, staffing levels or the inability to pass budget reconciliation legislation;
• adequacy of our insurance coverage;
• supply chain challenges;
• our ability to attract and retain talented employees;
• impact of geopolitical trends, changes, and events, including various military conflicts or tensions and the regional and global ramifications of these conditions;
• operating problems at our manufacturing operations including fires, explosions, inclement weather, and floods and other natural disasters;
• effectiveness of future implementations or conversions of enterprise resource planning or other key systems;
• material weaknesses in our internal control over financial reporting and our ability to remediate such weaknesses;
• impacts of pandemics, epidemics, or other public health emergencies; and
• other risks discussed in Part I — Item 1A. “Risk Factors” of our Annual Report on Form 10‑K for the year ended December 31, 2025 (“2025 Form 10‑K”) and from time to time in our other Securities and Exchange Commission (the “SEC”) filings and reports.

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Such forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this 2026 Q1 Form 10‑Q. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.

Overview

NWPX Infrastructure, Inc. is a leading manufacturer of water-related infrastructure products and operates in two segments, Water Transmission Systems (“WTS”), operating as the Northwest Pipe Company brand, and Precast Infrastructure and Engineered Systems (“Precast”). For detailed descriptions of these segments, see Note 12, “Segment Information” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2026 Q1 Form 10‑Q.

Our WTS segment is the largest manufacturer of engineered water transmission systems in North America and produces steel casing pipe, bar-wrapped concrete cylinder pipe, and pipeline system joints and fittings. Our Precast segment provides solution-based products for a wide range of markets including high-quality reinforced precast concrete products, lined precast sanitary sewer system structures, water distribution and management equipment including pump lift stations, wastewater pretreatment, and stormwater quality products. Our Precast segment has broadened its manufacturing footprint by bringing lined and engineered precast products into production at additional facilities, increasing capacity and improving regional availability. Our skilled team is committed to quality and innovation while upholding its core values of accountability, commitment, and teamwork. Headquartered in Vancouver, Washington, we operate 14 manufacturing facilities across North America.

On February 23, 2026, we completed the acquisition of 100% of the shares of Boughton’s Precast, Inc. (“Boughton”), a single precast facility located in Pueblo, Colorado, for a purchase price of approximately $9.0 million. Boughton is included in the Precast segment for all periods following the acquisition date. This acquisition expands our geographic footprint for our stormwater infrastructure and sanitary sewer products including manholes, catch basins, vaults, and reinforced concrete pipe.

Our water infrastructure products are sold generally to installation contractors, who include our products in their bids to federal, state, and municipal agencies, privately-owned water companies, or developers for specific projects. We believe our sales are substantially driven by spending on urban growth and new water infrastructure with a recent trend towards spending on water infrastructure replacement, repair, and upgrade. Within the total range of products, our steel pipe best addresses the larger-diameter, higher-pressure pipeline applications, while our precast concrete products mainly serve stormwater and sanitary sewer systems.

Our Current Economic Environment

Demand for our Precast products is generally influenced by general economic conditions such as housing starts, population growth, interest rates, and rates of inflation. According to the United States Census Bureau, privately-owned housing starts were at a seasonally adjusted annual rate of 1.5 million in January 2026 and 1.4 million in December 2025, and the population of the United States is expected to increase by approximately 1 million people in 2026. While the housing market has softened recently and the current elevated federal funds rate could temper demand for our precast products, we continue to see steady demand in Texas and Utah which are two of the four states in the United States with the highest capital expenditures per capita according to the June 2025 Bluefield Research Insight Report – U.S. & Canada Water & Wastewater Pipe CAPEX Forecasts, 2025-2035 and two of the states in which our Precast manufacturing facilities are located.

Our WTS projects are often planned for many years in advance, as we operate that business with a long-term time horizon for which the projects are sometimes part of 50‑year build-out plans. As anticipated, we experienced elevated bidding levels in the first quarter of 2026, leading to a record backlog of $373 million despite some uncertainty in the broader domestic economy. Recent executive orders, staffing cuts, and other federal funding disputes are viewed as risks that could delay funding brought on by the Bipartisan Infrastructure Deal (Infrastructure Investment and Jobs Act (“IIJA”)) and the Inflation Reduction Act. Project funding delays would first impact the engineering and design phases in the early part of the project cycle, and if they became elongated delays, would delay funding State Revolving Funds would eventually impact future project bids. According to the August 2025 Bluefield Research Insight Report – Infrastructure Investment & Jobs Act: Tracking the Spending, Q3 2025, approximately $5 billion earmarked under the IIJA has currently been awarded to Drinking Water State Revolving Loan Fund recipients via subawards, leaving most of the $55 billion spending package available; we expect to benefit from this spending late in the cycle due to the long timelines associated with WTS projects.

Purchased steel typically represents approximately 29% of our WTS projects’ cost of sales, and higher steel costs generally result in higher selling prices and revenue; however, volatile fluctuations in steel markets can affect our business. WTS contracts are generally quoted on a fixed-price basis, and volatile steel markets can result in selling prices that no longer correlate to the cost available at the time of steel purchase. Our average price of purchased steel was $1,043 per ton in the first three months of 2026, compared to annual averages of $967 in 2025 and $914 in 2024.

Economic uncertainty, including the impacts of conflicts in the Middle East and Europe, U.S. global economic policy, resulting inflationary pressures, the potential risks of a recession, and disruptions in the financial markets could have an adverse effect on our business. We believe the uncertainty surrounding foreign trade policies could further dampen construction activity and impact our costs, particularly in the short term; however, these risks will be mitigated to the extent possible. A period of sustained uncertainty in the cost of fuel and the resulting impact on freight costs could present near term risks to financial performance. Should the economic environment remain uncertain, the direct and indirect impact on our business will also depend on future developments, which cannot be predicted.

Results of Operations

The following table sets forth, for the periods indicated, certain financial information regarding costs and expenses expressed in dollars (in thousands) and as a percentage of total net sales.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Net sales. Net sales increased 19.1% to $138.3 million in the first quarter of 2026 compared to $116.1 million in the first quarter of 2025.

WTS net sales increased 19.1% to $93.5 million in the first quarter of 2026 compared to $78.4 million in the first quarter of 2025 driven by an 18% increase in tons produced resulting from changes in project timing and a 1% increase in selling price per ton due to changes in product mix. Bidding activity, backlog, and production levels may vary significantly from period to period, thereby affecting sales volumes.

Precast net sales increased 18.9% to $44.8 million in the first quarter of 2026 compared to $37.7 million in the first quarter of 2025 driven by a 14% increase in selling prices due to changes in product mix and a 4% increase in volume shipped.

Gross profit. Gross profit increased 37.7% to $26.7 million (19.3% of net sales) in the first quarter of 2026 compared to $19.4 million (16.7% of net sales) in the first quarter of 2025.

WTS gross profit increased 42.3% to $17.3 million (18.5% of WTS net sales) in the first quarter of 2026 compared to $12.2 million (15.5% of WTS net sales) in the first quarter of 2025 due to increased volume, including related operational efficiency gains, and favorable changes in product mix.

Precast gross profit increased 30.0% to $9.3 million (20.9% of Precast net sales) in the first quarter of 2026 compared to $7.2 million (19.1% of Precast net sales) in the first quarter of 2025 primarily due to increased selling prices due to changes in product mix and increased volume.

Selling, general, and administrative expense. Selling, general, and administrative expense increased 1.5% to $14.0 million (10.1% of net sales) in the first quarter of 2026 compared to $13.8 million (11.9% of net sales) in the first quarter of 2025 primarily due to $0.3 million in higher incentive compensation expense.

Income taxes. Income tax expense was $2.0 million in the first quarter of 2026 (an effective income tax rate of 16.0%) compared to $1.0 million in the first quarter of 2025 (an effective income tax rate of 19.8%). The estimated effective income tax rates for the first quarter of 2026 and the first quarter of 2025 were primarily impacted by the tax windfalls recognized upon the vesting of equity awards. The estimated effective income tax rate can change significantly depending on the relationship of permanent income tax differences to estimated pre-tax income or loss. Accordingly, the comparison of estimated effective income tax rates between periods is not meaningful in all situations.

Liquidity and Capital Resources

Sources and Uses of Cash

Our principal sources of liquidity generally include operating cash flows and our credit agreement. From time to time our long-term capital needs may be met through the issuance of additional debt or equity. Our principal uses of liquidity generally include capital expenditures, working capital, organic growth initiatives, acquisitions, share repurchases, and debt service. Information regarding our cash flows for the three months ended March 31, 2026 and 2025 are presented in our Condensed Consolidated Statements of Cash Flows contained in Part I – Item 1. “Financial Statements” of this 2026 Q1 Form 10‑Q and are further discussed below.

As of March 31, 2026, our working capital (current assets minus current liabilities) was $187.6 million compared to $184.9 million as of December 31, 2025. Cash and cash equivalents totaled $14.3 million and $2.3 million as of March 31, 2026 and December 31, 2025, respectively.

Fluctuations in WTS working capital accounts result from timing differences between production, shipment, invoicing, and collection, as well as changes in levels of production and costs of materials. We typically have a relatively large investment in working capital, as we generally pay for materials, labor, and other production costs in the initial stages of a project, while payments from our customers are generally received after finished product is delivered. A portion of our revenues are recognized over time as the manufacturing process progresses; therefore, cash receipts typically occur subsequent to when revenue is recognized and the elapsed time between when revenue is recorded and when cash is received can be significant. As such, our payment cycle is a significantly shorter interval than our collection cycle, although the effect of this difference in the cycles may vary by project, and from period to period. In recent periods, we have made efforts to collect payments from our customers earlier in the production cycle resulting in shorter cash conversion cycles and improved operating cash flow generation.

As of March 31, 2026, we had no outstanding revolving loan borrowings, $10.7 million of outstanding long-term debt, $91.7 million of operating lease liabilities, and $8.1 million of finance lease liabilities. As of December 31, 2025, we had $0.3 million of outstanding revolving loan borrowings, $11.5 million of outstanding long-term debt, $91.1 million of operating lease liabilities, and $7.1 million of finance lease liabilities.

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $29.3 million in the first three months of 2026 compared to $4.8 million in the first three months of 2025. Net income, adjusted for noncash items, provided $18.8 million of operating cash flow in the first three months of 2026 compared to $12.0 million of operating cash flow in the first three months of 2025. The net change in working capital provided (used) $10.4 million of operating cash flow in the first three months of 2026 compared to ($7.2) million in the first three months of 2025.

Net Cash Used in Investing Activities

Net cash used in investing activities was $12.3 million in the first three months of 2026 compared to $3.7 million in the first three months of 2025. The acquisition of Boughton used $8.9 million, net of cash acquired, in the first three months of 2026. Capital expenditures were $3.5 million in the first three months of 2026 compared to $3.7 million in the first three months of 2025, which includes $0.3 million in the first three months of 2026 for pipe profiler equipment in the Adelanto, California facility, $0.3 million in the first three months of 2025 of investment in our new reinforced concrete pipe mill, $0.1 million in the first three months of 2025 for the construction of a building at our Salt Lake City, Utah facility for the new mill, and the remainder primarily for standard capital replacement. We currently expect capital expenditures in 2026 to be approximately $20 million to $24 million, which includes approximately $2 million for the catch basin machine in the Orem, Utah facility, $3 million for the pipe profiler equipment in the Adelanto, California facility, and the remainder primarily for standard capital replacement.

Net Cash Used in Financing Activities

Net cash used in financing activities was $5.0 million in the first three months of 2026 compared to $0.9 million in the first three months of 2025. Net borrowings (repayments) on the line of credit were ($0.3) million in the first three months of 2026 compared to $0.9 million in the first three months of 2025. Net payments on other debt were $0.8 million in the first three months of 2026 and 2025. Repurchases of common stock were $2.4 million in the first three months of 2026. There were no repurchases of common stock in the first three months of 2025.

We anticipate that our existing cash and cash equivalents, cash flows expected to be generated by operations, and additional borrowing capacity under our credit agreement and other loans will be adequate to fund our working capital, debt service, capital expenditure requirements, and share repurchases for the foreseeable future. To the extent necessary, we may also satisfy capital requirements through additional bank borrowings, senior notes, term notes, subordinated debt, and finance and operating leases, if such resources are available on satisfactory terms. We have from time to time evaluated and continue to evaluate opportunities for acquisitions and expansion. Any such transactions, if consummated, may necessitate additional bank borrowings or other sources of funding.

On December 4, 2023, our shelf registration statement on Form S‑3 (Registration No. 333‑275691) covering the potential future sale of up to $150 million of our equity and/or debt securities or combinations thereof, was declared effective by the SEC. This shelf registration statement, which replaced the registration statement on Form S‑3 that expired on November 3, 2023, provides another potential source of capital, in addition to other alternatives already in place. We cannot be certain that funding will be available on favorable terms or available at all. To the extent that we raise additional funds by issuing equity securities, our shareholders may experience significant dilution. As of the date of this 2026 Q1 Form 10‑Q, we have not yet sold any securities under this registration statement, nor do we have an obligation to do so. Please refer to the factors discussed in Part I – Item 1A. “Risk Factors” in our 2025 Form 10‑K.

On October 10, 2023, our Board of Directors authorized a share repurchase program of up to $30 million of our outstanding common stock. On December 11, 2025, our Board of Directors authorized a share repurchase program of up to an additional $10 million of our outstanding common stock. These programs do not commit to any particular timing or quantity of purchases, and the programs may be suspended or discontinued at any time. Under the programs, shares may be purchased in the open market, including through plans adopted pursuant to Rule 10b5‑1 of the Exchange Act, or in privately negotiated transactions administered by our broker. At this time, we have elected to limit our share repurchase transactions to only those transactions made under Rule 10b5‑1 trading plans, which we believe consider our liquidity, including availability of borrowings and covenant compliance under our credit agreement, and other capital allocation priorities of the business. For additional details regarding our share repurchase programs, see Note 6, “Stockholders’ Equity” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” and Part II – Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds” of this 2026 Q1 Form 10‑Q. Please refer to the factors discussed in Part I – Item 1A. “Risk Factors” in our 2025 Form 10‑K

Credit Agreement

The Credit Agreement dated June 30, 2021 with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, and the lenders from time to time party thereto, including the initial sole lender, Wells Fargo (the “Lenders”), as amended by the Incremental Amendment dated October 22, 2021, the Second Amendment to Credit Agreement dated April 29, 2022, the Third Amendment to Credit Agreement dated June 29, 2023, and the Fourth Amendment to Credit Agreement and Ratification of Loan Documents dated August 13, 2025 (together, the “Amended Credit Agreement”) provides for a revolving loan, swingline loan, and letters of credit in the aggregate amount of up to $125 million (“Revolver Commitment”), with an option for us to increase that amount by $50 million, subject to provisions of the Amended Credit Agreement. The Amended Credit Agreement will expire, and all obligations outstanding will mature, on August 13, 2030. We may prepay outstanding amounts at our discretion without penalty at any time, subject to applicable notice requirements. As of March 31, 2026 under the Amended Credit Agreement, we had no outstanding revolving loan borrowings, $1.1 million of outstanding letters of credit, and additional borrowing capacity of approximately $124 million.

Revolving loans under the Amended Credit Agreement bear interest at rates related to, at our option and subject to the provisions of the Amended Credit Agreement, either: (i) Base Rate (as defined in the Amended Credit Agreement) plus the Applicable Margin; (ii) Adjusted Daily Simple Secured Overnight Finance Rate (“SOFR”) (as defined in the Amended Credit Agreement) plus the Applicable Margin; or (iii) Adjusted Term SOFR (as defined in the Amended Credit Agreement) plus the Applicable Margin. The “Applicable Margin” is 0.50% to 2.00%, depending on our Consolidated Senior Leverage Ratio (as defined in the Amended Credit Agreement) and the interest rate option chosen. Interest on outstanding revolving loans is payable monthly in arrears. Swingline loans under the Amended Credit Agreement bear interest at the Base Rate plus the Applicable Margin. As of March 31, 2026, the interest rate for outstanding borrowings was 5.13%. The Amended Credit Agreement requires the payment of a commitment fee of between 0.20% and 0.25%, based on the amount by which the Revolver Commitment exceeds the average daily balance of outstanding borrowings (as defined in the Amended Credit Agreement). Such fee is payable monthly in arrears. We are also obligated to pay additional fees customary for credit facilities of this size and type.

The letters of credit outstanding as of March 31, 2026 relate to workers’ compensation insurance and a public improvement project. Based on the nature of these arrangements and our historical experience, we do not expect to make any material payments under these arrangements.

The Amended Credit Agreement contains customary representations and warranties, as well as customary affirmative and negative covenants, events of default, and indemnification provisions in favor of the Lenders. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, annual capital expenditures, certain investments, acquisitions, and dispositions, and other matters, all subject to certain exceptions. The Amended Credit Agreement requires us to regularly provide financial information to Wells Fargo and to maintain a consolidated senior leverage ratio no greater than 3.00 to 1.00 (subject to certain exceptions) and a minimum consolidated earnings before interest, taxes, depreciation, and amortization (as defined in the Amended Credit Agreement) of at least $35 million for the four consecutive fiscal quarters most recently ended. Pursuant to the Amended Credit Agreement, we have also agreed that we will not sell, assign, or otherwise dispose or encumber, any of our owned real property. The occurrence of an event of default could result in the acceleration of the obligations under the Amended Credit Agreement. We were in compliance with our financial covenants as of March 31, 2026, and expect to continue to be in compliance in the near term.

Our obligations under the Amended Credit Agreement are secured by a senior security interest in substantially all of our and our subsidiaries’ assets.

Long-term Debt

On October 28, 2024, we converted the outstanding balance of the Interim Funding Agreement dated August 2, 2022 with Wells Fargo Equipment Finance, Inc. (“WFEF”), as amended January 23, 2023, March 15, 2023, July 21, 2023, and November 2, 2023 into a $15 million term loan with WFEF that was used to fund our new reinforced concrete pipe mill. The term loan matures on October 28, 2029, bears interest at the SOFR Average (as defined in the term loan) plus 2.22%, is payable in monthly installments of $0.3 million plus accrued interest, and is secured by the pipe mill. As of March 31, 2026, the outstanding balance of the term loan was $10.7 million and the interest rate for outstanding borrowings was 5.89%. The term loan may be prepaid in full at any time provided that we pay a prepayment fee equal to 2% of the outstanding principal balance if repaid in the first 30 months of the loan.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements affecting our Company, including the dates of adoption and estimated effects on financial position, results of operations, and cash flows, see Note 13, “Recent Accounting and Reporting Developments” of the Notes to Condensed Consolidated Financial Statements in Part I – Item 1. “Financial Statements” of this 2026 Q1 Form 10‑Q.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our Condensed Consolidated Financial Statements included in Part I – Item 1. “Financial Statements” of this 2026 Q1 Form 10‑Q, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. On an ongoing basis, we evaluate all of our estimates, including those related to revenue recognition, goodwill, income taxes, and litigation and other contingencies. Actual results may differ from these estimates under different assumptions or conditions.

There have been no significant changes in our critical accounting estimates during the three months ended March 31, 2026 as compared to the critical accounting estimates disclosed in our 2025 Form 10‑K.

For a discussion of our market risk associated with commodity prices, interest rates, and foreign currency exchange rates, see Part II – Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our 2025 Form 10‑K. We do not believe there have been any material changes in that information since December 31, 2025.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) are designed to provide reasonable assurance that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures.

In connection with the preparation of this Quarterly Report on Form 10‑Q for the quarter ended March 31, 2026, our management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. As a result of the assessment, our CEO and CFO have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no significant changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this 2026 Q1 Form 10‑Q, the factors discussed in Part I – Item 1A. “Risk Factors” in our 2025 Form 10‑K and any subsequently filed quarterly reports on Form 10‑Q could materially affect our business, financial condition, or operating results. The risks described in our 2025 Form 10‑K and subsequent Form 10‑Q’s are not the only risks facing us. There are additional risks and uncertainties not currently known to us or that we currently deem to be immaterial, that may also materially adversely affect our business, financial condition, or operating results.