Arcosa, Inc. (NYSE:ACA) Q4 2025 Earnings Call Transcript

Arcosa, Inc. (NYSE:ACA) Q4 2025 Earnings Call Transcript February 27, 2026

Operator: Thank you for your continued patience. Your meeting will begin shortly, and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly, and a member of our team will be happy to help you. Please standby. Your meeting is about to begin. Good morning, ladies and gentlemen, and welcome to the Arcosa, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Chloe, and I will be your conference call coordinator today. As a reminder, today’s call is being recorded. Now, I would like to turn the call over to your host, Erin Drabek, Vice President of Investor Relations for Arcosa, Inc. Ms. Drabek, you may begin. Good morning, everyone, and thank you for joining Arcosa, Inc.’s Fourth Quarter and Full Year 2025 Earnings Call.

Erin Drabek: With me today are Antonio Carrillo, President and CEO, and Gail Peck, CFO. A question-and-answer session will follow their prepared remarks. A copy of the press release issued yesterday and the slide presentation for this morning’s call are posted on our Investor Relations website, ir.arcosa.com. A replay of today’s call will be available for the next two weeks. Instructions for accessing the replay number are included in the press release. A replay of the webcast will be available for one year on our website under the News and Events tab. Today’s comments and presentation slides contain financial measures that have not been prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation.

In addition, today’s conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company’s SEC filings for more information on these risks and uncertainties, including the press release we filed yesterday and our Form 10-K expected to be filed later today. I will now turn the call over to Antonio.

Antonio Carrillo: Thank you, Erin. Good morning, everyone, and thank you for joining us for a discussion of our fourth quarter and full year 2025 results and 2026 outlook. 2025 was an outstanding year for Arcosa, Inc., demonstrated by our exceptional financial performance and significant advancement of our strategic transformation. Our key growth businesses, Construction Materials and Engineered Structures, grew year-over-year, supported by cyclical expansion in both barge and wind towers. For the full year, we achieved record revenues of $2.9 billion, up 12%, record adjusted EBITDA of $583 million, up 30%, and record adjusted EBITDA margin of 20.2%, up 280 basis points. Importantly, we accomplished these results safely, recording the lowest annual safety incident rate in Arcosa, Inc.’s history.

Our expanded disclosures further highlight the momentum underpinning our key growth businesses. Within Construction Products, we began separately disclosing revenues and unit statistics for the aggregates business. Representing approximately 60% of our Construction Materials revenues, aggregates achieved 10% growth in cash unit profitability in 2025, led by strong pricing gains and the accretive impact of Stavola. Within Engineered Structures, we separated the revenue and backlog disclosures for utility and related structures and wind towers. This better highlights the underlying strength within utility structures where backlog levels remained at or near record highs throughout the year, supported by robust end market demand. We exited 2025 with great momentum.

Q&A Session

Fourth quarter adjusted EBITDA increased 13% and margin expanded 90 basis points, with all segments contributing. Our earnings strength and positive cash flow enhanced our balance sheet, and we ended the year comfortably within our long-term leverage target. Overall, I am extremely proud of the dedication and contribution of the entire team. Earlier this week, we announced we entered into a definitive agreement to sell our barge business for $450 million in cash. With a strong backlog that provides production visibility deep into 2026, and market fundamentals supporting a healthy replacement cycle, we believe this is the right time to transition the barge business to an owner aligned with its long-term growth plans. We expect the sale to close in 2026, subject to regulatory approval and other customary closing conditions.

I want to thank our talented leadership team, dedicated employees, and long-standing customers for their significant contributions to Arcosa Marine. The barge transaction further reduces portfolio complexity and cyclicality, raises our overall margin profile, and enhances the long-term resiliency of the company. Upon completion of the divestiture, Arcosa, Inc. will be fully focused on Construction Materials and Engineered Structures, both well-aligned to benefit from long-term infrastructure and power market tailwinds in the U.S. Before Gail goes over our financials in more detail, I want to acknowledge Jess Collins. Jess, who has served as Group President of Arcosa, Inc. since our spin-off, will be retiring in a few weeks, and his strategic insight and commitment have helped shape our success and strengthen our foundation for the future.

We thank him for his outstanding service and congratulate him on his retirement. I will now turn the call over to Gail to discuss our fourth quarter segment results in more detail.

Gail Peck: Thank you, Antonio, and good morning. Starting with Construction Products, fourth quarter segment revenues decreased 2%. Excluding freight, which is a pass-through in our Construction Materials business, revenues increased 4%. Adjusted segment EBITDA grew 3%, and margin expanded 140 basis points. On a freight-adjusted basis, adjusted segment EBITDA margin was roughly flat. As a reminder, segment performance this quarter is all organic, as Stavola hit its one-year anniversary on October 1, at the start of the quarter. For aggregates, freight-adjusted revenues increased roughly 8%, driven by 5% pricing growth and 2% volume improvement. Two consecutive quarters of volume growth give us optimism on continued volume recovery in 2026.

Adjusted cash gross profit increased 6% and adjusted cash gross profit per ton increased 3%. Many of our regions had double-digit growth in unit profitability, particularly our natural aggregates and stabilized sand operations in Texas and our aggregates operation in the East Region. This performance, however, was partially offset by lower unit profitability in our Gulf Region, which was impacted by less favorable product mix, and the West Region, which had lower cost absorption on declining production volumes as we align inventory levels to demand. For the full year, volumes increased 6% due to the inorganic contribution from Stavola, and organic volume improvement in the back half of the year partially compensating for first half weather challenges.

Full year freight-adjusted sales price grew 8% and adjusted cash gross profit per ton increased 10%, led by the accretive impact from Stavola. Turning to Specialty Materials and Asphalt, revenues decreased 5% primarily due to lower freight revenue for asphalt. Excluding freight, revenues were roughly flat, while adjusted EBITDA and margin declined slightly. Within Specialty Materials, strong profitability gains in lightweight aggregate were offset by volume-related decline in our specialty plaster business. In our asphalt business, revenues increased slightly as solid pricing gains offset lower volumes, resulting in modest unit profitability gains. Finally, revenues and adjusted EBITDA for our trench shoring business saw a double-digit increase year over year and had strong margin expansion driven by higher volumes and improved operating leverage.

Moving to Engineered Structures, segment revenues increased 15% led by a 20% increase for our utility and related structures businesses, while wind tower revenue increased 3%. For utility structures, volumes increased double digits while pricing was up high single digits. Steel pass-through was roughly flat year over year. Adjusted segment EBITDA increased 22% and margin expanded 100 basis points to 18.5%, driven by strong revenue growth and operating efficiencies in utility structures. This business executed well throughout the year, resulting in sequential margin improvement in each quarter of 2025. For wind towers, adjusted EBITDA was roughly flat as we focused on rightsizing the business for lower production levels in 2026, resulting in a slight decline in margin year over year for the business.

We ended the year with backlog for utility and related structures of $435 million, up 5% from the start of the year, providing solid visibility for 2026. Customer reservations for utility structures that have not yet hit backlog remain strong, providing additional confidence in the demand outlook. For wind towers, we received orders of $190 million during the quarter, primarily for 2027 delivery. We ended the year with backlog of $628 million and expect to recognize 42% in 2026 and 53% in 2027. Turning to Transportation Products, revenues were up 19% and adjusted segment EBITDA increased 24% primarily due to higher tank barge volumes and a more favorable mix, resulting in 90 basis points of margin expansion, building on the meaningful improvement delivered in the prior year.

I will now provide some comments on our cash flow performance and improved balance sheet position. During the quarter, we generated $120 million of operating cash flow. As expected, this is down from last year’s fourth quarter, which benefited from significant customer deposits in our wind tower and barge businesses for shipments delivering in 2025. Excluding advanced billings, which can be uneven, net working capital days have improved sequentially each quarter in 2025 as we remain very focused on cash management. CapEx for the fourth quarter was $64 million, resulting in full year CapEx of $166 million, which was above the high end of our guidance range. The increase was driven by deposits placed on some long lead-time equipment and the timing of spend on the wind tower plant conversion within our utility structures business.

Free cash flow for the quarter was roughly $60 million and was $22 million for the full year. Our strong free cash flow generation in the second half of the year allowed us to repay $164 million of term loan debt during the year, which is prepayable at no cost. We ended the year with net debt to adjusted EBITDA of 2.3x, comfortably within our target leverage range. This is down from 2.9x at the start of the year. Our liquidity remains strong at $915 million, including full availability under our $700 million revolver, and we have no material near-term debt maturities. We are pleased to have achieved our leverage goals quarters ahead of schedule and are focused on balanced capital allocation. For the full year 2026, we expect CapEx to be between $220 million and $250 million.

Our guidance includes $70 million to $80 million of growth CapEx and $150 million to $170 million of maintenance CapEx, including approximately $25 million of plant moves and IT-related initiatives in Construction Materials. Within the growth category, we have a good mix of projects within Construction Materials and Engineered Structures, the largest of which is the conversion of our Illinois wind tower plant. We anticipate the cadence of spending to be more first half–weighted based on the expected project timelines. I will wrap up with a few final comments for modeling purposes. For the full year, we expect depreciation, depletion, and amortization expense to range from $230 million to $240 million, slightly ahead of the annualized fourth quarter run rate as we expect to complete and capitalize large projects.

Net interest expense is expected to range from $88 million to $90 million, down from $102 million last year, primarily reflecting debt reduction that occurred in 2025 and opportunistic debt paydown in 2026. For 2026, we expect an effective tax rate of 17.5% to 19.5%. We will update this guidance as needed following the anticipated close of the barge divestiture. I will now turn the call back to Antonio for more discussion on our 2026 outlook.

Antonio Carrillo: Thank you, Gail. For 2026, we anticipate revenues to be in the range of $2.95 billion to $3.1 billion and adjusted EBITDA to be in the range of $590 million to $640 million, excluding any impact from the barge divestiture. As outlined in the earnings press release, our guidance for barge includes full year revenues of $410 million to $430 million and adjusted EBITDA of $70 million to $75 million. We will update our full year guidance once the divestiture closes. Our 2026 guidance incorporates another record year for our growth businesses, Construction Materials and Engineered Structures, with combined double-digit adjusted EBITDA growth and margin uplift. At the same time, we expect a short-term step-down in wind towers before recovering in 2027.

In our outlook comments today, we will focus on the Construction Materials and Engineered Structures segments. Beginning with our first quarter 2026 results, we expect to eliminate segment reporting for Transportation Products and report results for the barge business as discontinued operations. In Construction Products, we anticipate another record year of revenues and adjusted EBITDA. In our guidance range, we anticipate mid- to high single-digit adjusted EBITDA growth. For the aggregates business, we anticipate low single-digit volume growth and mid single-digit price improvement. With our cost expectations generally in line with inflation, we anticipate solid gains in aggregate unit profitability. Our outlook is supported by solid infrastructure demand, which drives roughly 45% of our segment revenues.

IIJA funding combined with strong state fiscal health is expected to support volume growth in 2026. Roughly half of the IIJA funding has not been spent, and there is progress on advancing a multiyear surface transportation reauthorization. Our shoring products business has record backlog, a positive indicator of the underlying infrastructure demand. In Texas, our largest natural aggregates and liquid market, public infrastructure demand remains fundamentally healthy. While highway lettings have been trending off peak levels, the outlook for state spending growth over the next several years is very positive and remains at historically elevated levels. In New Jersey, our second largest regional exposure, the demand outlook is also favorable as both the Department of Transportation and the Transit Authority approved budget increases for 2026.

As a reminder, Stavola operations are highly skewed to infrastructure and replacements. Our Stavola operations performed very well in 2025, and we anticipate a solid year of growth in 2026. Stavola has added additional seasonality to our results, particularly in the first quarter. We anticipate that impact to be slightly more pronounced this year as the Northeast has been affected by very cold temperatures and significant snowfall in the first quarter. Turning to private nonresidential market, volumes continue to benefit from data center development, reshoring activity in certain areas, and overall demand for new power generation. Additionally, we are optimistic about future LNG opportunities. Residential remains challenged by affordability, and our outlook incorporates flat residential volume in aggregates.

While we continue to experience positive activity in Texas, particularly in the Houston market, residential volumes remain weak overall, notably in the Phoenix and Florida markets. In our specialty plaster business, which serves multifamily construction, we anticipate a stronger second half of the year based on customer backlog and sentiment. Even though we are in an attractive state for residential development, we expect our businesses to benefit when the housing market recovers. Moving next to Engineered Structures. Our businesses play a pivotal role in strengthening American infrastructure, from wind towers that support much-needed new power generation, to utility structures that connect energy to the grid, and lighting, traffic, and telecom structures that address basic infrastructure needs of our expanding nation.

I have said before, we believe our Engineered Structures platform is strategically positioned to capitalize on attractive long-term trends. Turning to the U.S. power industry, the expansion of data centers and the rising electricity consumption across the U.S. continues to drive a significant and sustained increase in power demand. Multi-year capital plans underscore our utility customers’ commitment to significant power investments along with ongoing efforts to modernize the grid. During 2025, we maintained at or near record backlog levels for our utility structures, and the outlook remains very positive. Industry capacity is constrained, lead times are extended, and we are optimizing pricing and focusing on operational excellence. We are making solid progress on the conversion of our idled wind tower facility in Illinois to produce large utility poles and expect to be operational in the second half of 2026.

Additionally, we have placed deposits on long lead-time equipment to maximize output in our existing plants. Our new galvanizing facility in Mexico will complete its first dip this quarter, which will allow us to improve our cost structure and help offset start-up costs in Illinois for this year. For 2026, we anticipate another year of strong double-digit adjusted EBITDA growth and higher margins. Meeting expanded U.S. power needs will require leveraging all available sources of power generation. Cost-competitive wind energy can play a critical role in meeting future energy needs quickly and efficiently. We remain optimistic about the long-term demand for wind towers despite near-term policy uncertainty impacting our anticipated volume for 2026.

During the fourth quarter, we received wind tower orders for $190 million, primarily for 2027 delivery. Coupled with orders we received in 2025 and the shift forward of 2027 backlog, we have solid production visibility in 2026, albeit with reduced volumes from 2025. At December 31, our wind tower backlog scheduled for 2026 was $260 million, indicating a decrease of roughly 25% in anticipated wind tower revenues. Importantly, we expect to return to growth in 2027, supported by our current backlog for that year of $330 million. There is still time remaining in the year to book additional 2026 orders, though our customers are focused on 2027 and beyond. Factoring in competitor announcements and the potential for additional moves, third-party research estimates a capacity shortfall existing in 2027 for utility structures.

The flexible and strategically located network of facilities within our Engineered Structures platform provides us with the ability to adapt and increase capacity quickly without significant capital investments. As a result, we are currently preparing for a transition of our Tulsa, Oklahoma facility from wind towers to utility structures. At Tulsa, our wind tower backlog stretches through 2027, and we have the ability in that facility to roll both product lines in parallel. As wind tower orders are being finished, we will be moving our people to produce utility poles. Reducing our wind tower capacity to two facilities right-sizes the business and redirects our resources to the higher multiple, higher margin utility structures with a sustained runway for growth.

As it relates to our capital allocation priorities, we are focused on investing in our growth businesses, both organically and through acquisitions. We have an active pipeline of additional bolt-on opportunities, both in natural and recycled aggregates, and expect to deploy capital towards the highest value opportunities. We also anticipate reducing debt in the interim to lower interest expense. Our unused $700 million revolver provides ample additional liquidity. In closing, we enter 2026 as a more resilient company. The divestiture of our barge business is a significant milestone in our company’s evolution and will sharpen our focus on our key growth businesses, Construction Materials and Engineered Structures. We will now move from our transformation phase to being completely focused on growth as we look to create additional value for our shareholders.

We are now ready for your questions.

Operator: Thank you. Press 1 on your keypad. To leave the queue at any time, press 2. Once again, that is 1 to ask a question. We will move first to Ian Zaffino with Oppenheimer. Your line is open.

Ian Zaffino: Hi. Great. Thank you very much. Congratulations on the barge sale. Thank you. Now as far as the proceeds, how are you thinking about redeploying those, what areas and maybe geographies, or any other kind of color you could give us on that, and the multiples you are seeing out there? Do you have to use that for any—I mean, that is why. Thanks.

Antonio Carrillo: Let me give you color on that. As Gail mentioned in her script, first, once we close this transaction—and we expect it to be in the second quarter—there might be some debt reduction in the short term. After that, we have a very active pipeline of opportunities for M&A. Right now, we are looking at mostly within our current footprint, but we do have some opportunities that take us to some new MSAs where we are not present. M&A, as mentioned in the past, has no timing because these things sometimes take time and are mostly family-owned businesses. It takes time to get there. We have a really active pipeline in both our current MSAs and a few new ones. That would be our primary focus to try to accelerate our M&A pipeline, mainly bolt-on acquisitions.

These are not enormous things. I have mentioned before, bolt-ons are where we really get excited about margin expansion. We also have significant organic CapEx going on. Gail mentioned a few plant movements within our aggregates business, more reserves, finishing the Illinois facility, the galvanizing facility. I just announced that we are transitioning our Tulsa facility from wind towers to transmission over time as we finish our wind tower orders. That facility is very large and has the ability to do both product lines. The big message here is now that we are a simpler company, we will focus our full attention on deploying the capital to generate additional value for our shareholders through both inorganic and organic opportunities.

Ian Zaffino: Okay. We are losing you. What should we expect there? I know we are pretty close to being almost exclusively noncyclical at this point, but any other kind of moves that you intend to do or not do? What should we expect going forward? Thanks.

Antonio Carrillo: The cyclical business that we are left with is the wind tower business. As you know, current policy uncertainty creates noise. I mentioned in my remarks that we are very optimistic about the future of the wind industry because, for the first time since we have been building wind towers, we actually need them. The power demand increase is real. I am optimistic about wind. We expect a slower 2026 and a return to higher volumes in 2027. As we enter 2028, that is where we need to start focusing on 2028 and beyond. At the same time, we recognize the policy uncertainty. We have another business that is growing fast, which is utility structures. That is why the transition of our Tulsa facility to more utilities. There is some uncertainty.

As we get into 2027, let us see. I am very optimistic about 2028 and beyond for wind. Rightsizing the business to two facilities really reduces our exposure. If the wind industry recovers fast, we will see what we do. For the moment, we will be very focused on growing in utility structures. Long answer to your short question.

Ian Zaffino: That is really helpful. Thank you very much. Good quarter. Thank you.

Operator: We will move next to Trey Grooms with Stephens. Your line is open.

Ethan Roberts: Hey, Antonio and Gail. This is Ethan on for Trey. Thanks for the question. Starting off with utility structures, clearly expected to be a pretty large growth driver in 2026. Revenue was up 20% in the fourth quarter. The magnitude of growth here is pretty impressive, and guidance seems to imply pretty solid double-digit EBITDA growth. So just curious if this may help offset what is expected to be lower volume in wind in 2026, and perhaps any more color on the growth or demand expectations for utility structures in 2026? Thanks.

Gail Peck: Good morning. I will take the first part of that question. You are correctly identifying a lot of underlying strength within utility structures. As we look to 2026 and think about our guidance for the Engineered Structures segment, we do see a path to that strong utility compensating for the step-down in wind. We gave a rough estimate for where we are right now for wind backlog, which translates to revenues for 2026. You do see roughly a 25% step-down in wind revenues. Given where we are with utility and the strength of the double-digit volume increases and pricing increases that we have had—and as I said in my script, we saw margin expansion for utility in every quarter year over year throughout 2025—we have strong expectations for the business next year, and we see a path to flat to maybe slight growth within the segment for next year.

Antonio Carrillo: From the industry perspective, the numbers reflect what we are seeing in the industry. We are seeing very solid demand. We are seeing very long lead times. We are seeing a move towards larger utility poles, and that is why we are moving our wind tower facilities to utility poles. The big picture for us is we are very excited about the industry. Perhaps how should we think about the implications of our new galvanizing facility in Mexico starting this quarter? The facility already has orders and customers assigned to it. We are going to be ramping up with relative certainty around 2027 being a year where the facility starts contributing to the bottom line. The other facility is a longer-term process. We have orders until 2027, so this is a 2028 and beyond impact.

The ramp-up in that facility will be a lot smoother because the first facility was idle, so we have to hire and train people and everything. The other facilities are a much easier transition because we already have people. People are the hardest thing to get and the most important resource for any one of our facilities. Moving people that already know how to weld and produce wind towers to transmission structures is a lot easier than hiring new people.

Ethan Roberts: Got it. That is all very helpful. Thanks so much for the color, and I will pass on.

Operator: We will move next to Garik Shmois with Loop Capital. Your line is open.

Garik Shmois: Thanks. Just on the first quarter, I was wondering if you could maybe follow up a little bit more on the observations around weather in the Northeast impacting Stavola. Any additional perspective on Q1 and from a production standpoint, or the impact there—whether we should think about the percentage of EBITDA in the first quarter relative to the full year and how that is looking this year versus historicals?

Gail Peck: Good morning, Garik, and thanks for the question. It has been a cold and snowy quarter up in the Northeast, which will likely impact the cadence of our Q1 as a percent of the total. If you look at last year, Q1 EBITDA for the segment within Construction was about 16% or so of the year. It certainly is a smaller contributor to EBITDA for the year. With the weather and the snow here recently, we will see that percentage share drop just a little bit. You will not see the same contribution as a percent of the whole as you saw last year.

Garik Shmois: Okay. Makes sense. Thank you. And then maybe just on gross profit per ton expectations in aggregates for 2026. I know Q4 had some headwinds due to fixed cost absorption in some of the Western markets. How should we think about gross profit per ton for the segment overall for this year?

Gail Peck: As I said in my comments, with mid single-digit price and low single-digit volume, and where we sit here today with expectations that costs are generally in line with inflation, we do see solid unit profitability gains for 2026. The cadence of that is always a little bit uneven with the seasonality. Q1 will likely have a tough comp in unit profitability year over year, but for the full year, we expect solid gains in gross profit per ton.

Garik Shmois: Understood. Thank you very much.

Operator: We will move next to Julio Romero with Sidoti & Company. Your line is open.

Julio Romero: Good morning, Antonio and Gail, and congratulations to Jess on his retirement. I wanted to ask about the slope of the accelerating demand in utility structures. You are allocating resources there—Illinois in 2026, Tulsa in 2027. Could you dive a bit deeper into whether the acceleration in demand is being driven by a particular product line or geography? And then from an end use perspective, you said you are seeing demand skew towards larger utility poles. Should we infer that to mean that demand is being driven primarily by new transmission work versus substation?

Antonio Carrillo: The slope we have seen over the last couple of years has become more pronounced. As we look at backlog, order intake, and customer reservations that are not yet in backlog, we see the need to accelerate our capacity expansion because our customers need it. In this industry, like in every other one, if we do not do it, someone else is going to do it. We need to be there for our customers. We are a company that has a significant share of our revenues tied to longer-term contracts, and we have had very long-term relationships with our customers, so we have the obligation to respond to their needs, and that is really exciting to us. It is not a regional thing. We see it all over the country. That is why one plant in Illinois and one plant in Tulsa give us further coverage.

The overall sentiment is very positive. We did not do this just on hopes of good demand. We had a market study by a third party analyze utility investment over the next five to ten years, and we see this slope continuing to accelerate at least from here to 2030. We have to acknowledge it, plan for it, review it frequently, and make sure that every step we take has the basis to make the right choices and the right capital allocation. We do not do it just based on our gut feeling. We have solid data behind our thinking. On those customer reservations, our customers are mostly utilities. We have a few customers that are EPCs, and for the most part, we do not sell to a hyperscaler. Our customers are the people who supply power to developers and hyperscalers.

It might take years. If someone is trying to build a data center right now, it might take two to three years for us to start seeing any noise around it. The move to larger poles that we have seen over the last couple of years has to do with that increase in loads in certain areas. It has to do with permitting, and it has to do with rights of way. It is easier to put a big pole rather than a lot of small poles. It takes less space. You see it also in the conversation on the 765 lines, the very large lines. Bigger lines with higher voltage add resiliency to the grid. The whole country is reconfiguring to people who have higher loads and higher demands, and everyone is trying to adapt to that. We are part of the mix, but it might take us years to see the orders from the time someone develops a data center.

Julio Romero: Excellent. Very exciting. I will pass it on. Thank you.

Operator: We will move next to Brent Thielman with D.A. Davidson. Your line is open.

Brent Thielman: Thanks. On Engineered Structures, you have been in a pretty tight range of margin throughout 2025. I want to get a sense of whether those sorts of levels are sustainable into 2026. It sounds like you could have a bit of a different mix within the segment. Does that have a material impact through the year? Maybe just help us understand that piece.

Gail Peck: Good morning, Brent. Great question. There are two different stories going on within Engineered Structures for 2026. We feel very comfortable with the visibility we have in wind, but with that revenue step-down, and some lost absorption, we will see a margin impact on the wind side. Does utility fully compensate for that margin impact? There is a chance. We do see utility with good year-over-year progression in margin. The way I would say it right now is wind is going to have an impact for sure. A path to flat margins for the segment looks achievable, but we will have to see how the year progresses.

Antonio Carrillo: To add some color, there is a path to compensate for that big of a drop in wind. The quality of our EBITDA in 2026 is going to be a lot better than 2025 because we are changing tax credit EBITDA for utility structures EBITDA. The quality of our EBITDA is going to be better in 2026 and beyond as utility structures grows.

Brent Thielman: As a follow-up, you have been a patient seller with respect to the barge assets. It has been something that has been discussed for a long time. Congrats on getting something to the finish line here. Could we presume that you built up an M&A pipeline that you really want to act on, and now was just the right time to get this done? I am just trying to think around what finally got this to the finish line.

Antonio Carrillo: I have mentioned M&A has its own timing, and we needed to get the barge to a point. I am convinced that the buyer, Winchurch Capital, is going to do very well with this asset because it is at the right spot to sell it. The backlog is there. The trends in the industry are really good. The replacement cycle is coming. They are going to have a really good business to run. I am very excited for our team and for them to buy this business. The timing is right to sell it. Could it have been better six months ago or a year from now? I cannot tell you. Right now, it is as good as we have seen it, and that is why we waited to do it at the right time. There is a long runway for it. At the same time, we have been building our pipeline, and we are excited about some of the opportunities we have going on.

I am excited about all these opportunities. At the same time, you have seen us act in the past. The money is not going to burn a hole in our pocket. We are not going to deploy capital to things that we do not think are the best that generate value for our investors. We are not going to pay incredibly high multiples that we cannot afford. We are going to be very disciplined in our capital allocation. The goal is to build a pipeline that we can act on while staying disciplined with our capital allocation. We are going to be a disciplined capital allocator going forward, focused on growth.

Brent Thielman: One more if I could. With some of the investments you are making on the utility structure side, including the conversion of the wind facility, could you level set us on how much revenue capacity comes on in 2026 or into 2027? Just trying to think about what you are doing internally and what that adds for you in terms of thinking about growth rates for utility structures.

Gail Peck: In terms of 2026, as we have said on the conversion for the wind tower facility, that is the second half of the year where that is going to start contributing. From a steel structure perspective, that would be our seventh steel utility pole plant. That gives you a sense of what type of capacity it is adding. We would see that as more of an impact from a full-year perspective in 2027. The other investments we are making, as Antonio said, include a new galvanizing line down in Mexico. That is not a top-line impact; that is a cost saving as we are bringing galvanizing in-house down in Mexico. From a P&L perspective, as we ramp the Clinton facility in the U.S., the benefits from that galvanizing cost savings should offset that ramp impact in 2026. So, half-year benefit from the top-line perspective for the Clinton plant in 2026, and then you get the full-year impact in 2027.

Antonio Carrillo: Okay. Thanks, Gail. I appreciate it. Thanks all.

Operator: Thank you. This does conclude the Q&A portion of today’s event, and this also brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.