Financial Data and Key Metrics Changes - Consolidated net sales reached $151.1 million, representing growth of 13.4% sequentially and 16% year over year [3][15] - Gross margin expanded by 230 basis points sequentially to 21.3% [3] - EPS grew to $1.38 per share, up 35% versus the prior year period [3][15] - Operating cash flow generated during the quarter exceeded $21 million [3] Business Line Data and Key Metrics Changes - Water Transmission Systems (WTS) segment delivered record net sales of $103.9 million, a 20.9% increase year over year [4][15] - Precast segment net sales reached $47.2 million, marking a 6.6% year-over-year increase [6][16] - WTS gross profit reached $22.1 million with a margin of 21.3%, up approximately 190 basis points year over year [8][17] - Precast gross profit totaled $10 million, down modestly from both the second quarter and the third quarter of 2024 [8][17] Market Data and Key Metrics Changes - WTS backlog, including confirmed orders, stood at $301 million, reflecting an increase from $282 million a year ago [5] - Bidding activity remained robust, with approximately $200 million worth of work bidding in the fourth quarter [31] Company Strategy and Development Direction - The company is focused on maintaining a safe and rewarding workplace, margin over volume, strategic acquisitions, cost efficiencies, and returning value to shareholders [11][12] - The capital allocation strategy prioritizes growth, with targeted organic investments and M&A opportunities being evaluated [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued momentum heading into 2026, with expectations for improved demand and accelerated project starts as interest rates ease [8][11] - The competitive landscape is stable, with backlogs across the industry showing an upward trend, which is expected to support better margins moving forward [39][41] Other Important Information - The company published its first third-party verified Environmental Product Declaration for Cement Mortar Lined Welded Steel Pipe, enhancing its sustainability credentials [5] - The company repurchased approximately 186,000 shares at an average price of $42.90, totaling $8 million during the third quarter [10][21] Q&A Session Summary Question: Can you elaborate on the stronger than anticipated customer shipping requirements in the Water Transmission Systems segment? - Management indicated that strong production levels and significant shipment volumes were key drivers, with notable shipments from specific plants [28][30] Question: What are the drivers of the expected order acceleration in the fourth quarter? - Management highlighted a strong bidding schedule with approximately $200 million worth of work expected to be bid, which should enhance backlog levels [31][32] Question: How are utilization rates across facilities? - Utilization rates were reported to be in the high 60% to low 70% range, with some facilities operating on a second shift due to high demand [35][36] Question: What is the outlook for margins in the Water Transmission Systems segment? - Management noted that while the current market is competitive, there is potential for margins to exceed historical levels if demand continues to grow [39][41] Question: Can you discuss the pricing power in the precast business? - Management confirmed that pricing increases have been successfully implemented, driven by improvements in the non-residential side of the business [59] Question: How does the company expect to manage SG&A expenses moving forward? - Management indicated a focus on cost management and potential zero-based budgeting to control SG&A expenses while maintaining operational efficiency [50][54]