What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-11 · 142 added, 130 removed, 203 unchanged (57% of the section changed)

5 unchanged sentences

Sentences containing words such as “believe,” “intend,” “plan,” “may,” “expect,” “should,” “could,” “anticipate,” “estimate,” “predict,” “project,” or their negatives, or other similar expressions of a future or forward-looking nature generally should be considered forward-looking statements.

Forward-looking statements in this Quarterly Report on Form 10-Q are based on management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company’s expectations relating to our strategy, goals, projections, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development.

Forward-looking statements in this Quarterly Report on Form 10-Q are based on management's current expectations and assumptions about future events that involve inherent risks and uncertainties and may concern, among other things, the Company’s expectations relating to our strategy, goals, projections, valuations and impairments, and plans regarding our financial position, liquidity, capital resources, and results of operations and decisions regarding our strategic growth initiatives, market position, and product development.

While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control.

3 unchanged sentences

a continuation or worsening of the adverse economic conditions in the markets we serve, including recession, the continued volatility in the prices for oil and gas, tariffs or trade wars, inflation, project delays, and budget shortfalls, or otherwise;

the impact of the continued U.S.

government shutdown;

volatility in the global capital markets, including interest rate fluctuations, which could adversely affect our ability to access the capital markets on terms that are favorable to us;

14 unchanged sentences

domestic and foreign government regulations, including tariffs;

our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, as well as our ability to reestablish effective disclosure controls and procedures;

any change in policy or other change due to the results of the UK’s 2024 parliamentary election and the U.S.

our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures, any change in policy or other change due to the results of the UK’s 2024 parliamentary election and the U.S.

2024 Presidential election that could affect UK or U.S.

15 unchanged sentences

Product Line Exits

During the second quarter of 2025, the Company announced the discontinuation of its Automation and Materials Handling product line (“AMH Exit”) which was reported in the Technology Services and Solutions business unit within the Rail segment.

AMH had net sales of $813 and $1,100 for the three months ended June 30, 2025 and 2024, respectively, and $1,220 and $3,324 for the six months ended June 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025, the Company announced the discontinuation of its Automation and Materials Handling product line (“AMH Exit”) which was reported in the Technology Services and Solutions business unit within the Rail segment.

AMH had net sales of $530 and $907 for the three months ended September 30, 2025 and 2024, respectively, and $1,750 and $4,230 for the nine months ended September 30, 2025 and 2024, respectively.

The Company expects to complete any remaining customer obligations by the end of 2025.

The Company has incurred a total of $1,351 in exit costs associated with the AMH Exit, which included $655 in inventory and fixed asset write-downs, $507 in personnel expenses, and $189 in other exit costs.

During the nine months ended September 30, 2025, the Company incurred a total of $1,351 in exit costs associated with the AMH Exit, which included $655 in inventory and fixed asset write-downs, $507 in personnel expenses, and $189 in other exit costs.

Exit costs of $1,085 were recorded in “Cost of goods sold” and $266 were recorded in “Selling and administrative expenses” within our Rail segment.

1 unchanged sentence

The Bedford, PA based operations supporting the product line expects to complete any remaining customer obligations in 2025.

The product line had net sales of $498 and $1,157 for the three months ended June 30, 2025 and 2024, respectively, and $999 and $1,967 for the six months ended June 30, 2025 and 2024, respectively.

The product line had net sales of $94 and $921 for the three months ended September 30, 2025 and 2024, respectively, and $1,093 and $2,888 for the nine months ended September 30, 2025 and 2024, respectively.

Results of Operations

Second Quarter 2025 Compared to Second Quarter 2024

Third Quarter 2025 Compared to Third Quarter 2024

Three Months Ended

June 30, Change

September 30, Change

2025 2024 2025 vs.

11 unchanged sentences

Income before income taxes $ 7,137 $ 6,153 $ 984

Income tax expense 3,444 346 3,098

Income tax expense (benefit) 2,812 (29,745) 32,557

Net income $ 4,325 $ 35,898 $ (31,573)

4 unchanged sentences

Results Summary

Net sales for the three months ended June 30, 2025 increased $2,762, or 2.0%, over the prior year quarter.

The increase was driven by strong sales growth in the Infrastructure segment, which improved $12,383, or 22.4%, over the prior year quarter.

Partially offsetting these improvements were sales volumes declines in the Rail segment which declined $9,621, or 11.2%, from the prior year quarter.

Gross profit for the three months ended June 30, 2025 increased $387, or 1.3%, from the prior year quarter.

The improvement in gross profit was due to higher sales volume partially offset by $1,085 of costs related to the AMH Exit.

Gross profit margins declined 20

basis points to 21.5% due to the absence of the $815 gain realized on the sale of an ancillary property in the prior year quarter coupled with the AMH Exit costs incurred in the current year.

Selling and administrative expenses for the three months ended June 30, 2025 decreased $2,436, or 9.8%, from the prior year quarter, due primarily to lower personnel costs and professional services expenditures which decreased $941 and $473, respectively.

Selling and administrative expenses for the 2025 second quarter includes $266 in AMH Exit costs and the prior year quarter includes $751 in legal costs associated with a resolved legal matter.

Selling and administrative expenses as a percentage of net sales decreased to 15.6% in the current quarter compared to the prior year quarter.

Net interest expense was flat to the prior year quarter.

The Company's outstanding debt balance was $81,628 as of June 30, 2025, compared to $87,173 as of June 30, 2024.

The Company’s effective income tax rate for the three months ended June 30, 2025 was 54.8%, compared to 10.9% in the prior year quarter.

The Company's effective income tax rate for the three months ended June 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom, for which no income tax benefit was recognized due to a valuation allowance.

Net income attributable to the Company for the three months ended June 30, 2025 was $2,885, or $0.27 per diluted share, compared to net income in the prior year quarter of $2,847, or $0.26 per diluted share.

Net income for the three months ended June 30, 2025 was driven by lower selling and administrative expenses offset by higher income tax expense.

Net sales for the three months ended September 30, 2025 increased $820, or 0.6%, over the prior year quarter.

The increase was driven by sales growth in the Infrastructure segment, which improved $2,530, or 4.4%, over the prior year quarter.

Partially offsetting these improvements were sales volume declines in the Rail segment which declined $1,710, or 2.2%, from the prior year quarter.

Gross profit for the three months ended September 30, 2025 decreased $1,692, or 5.2%, from the prior year quarter.

The decline in gross profit was due to the Rail segment which declined $725, or 3.9%, due to lower sales volumes and a decline in gross profit of

$967, or 6.8%, in the Infrastructure segment due to higher manufacturing costs and unfavorable sales mix.

Gross profit margins declined 130 basis points to 22.5%.

Selling and administrative expenses for the three months ended September 30, 2025 decreased $2,212, or 9.1%, from the prior year quarter, due primarily to lower personnel costs as a result of the restructuring programs and general administrative spending which decreased $424 and $526, respectively.

Selling and administrative expenses for the prior year quarter includes $422 in legal costs associated with a resolved legal matter and $840 in employee-related restructuring costs.

Selling and administrative expenses as a percentage of net sales decreased to 16.0% in the current quarter.

Net interest expense for the three months ended September 30, 2025 decreased $104 from the prior year quarter.

The Company's outstanding debt balance was $58,722 as of September 30, 2025, compared to $68,544 as of September 30, 2024.

The Company’s effective income tax rate for the three months ended September 30, 2025 was 39.4%, compared to (483.4)% in the prior year quarter.

The Company's effective income tax rate for the three months ended September 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom, for which no income tax benefit was recognized due to a valuation allowance.

Net income attributable to the Company for the three months ended September 30, 2025 was $4,354, or $0.40 per diluted share, compared to net income in the prior year quarter of $35,905, or $3.27 per diluted share.

The decrease is due primarily to a $30,045 favorable tax valuation allowance adjustment recorded in the prior year quarter.

Results of Operations - Segment Analysis

1 unchanged sentence

Three Months Ended

June 30, Change Percent

September 30, Change Percent

2025 2024 2025 vs.

5 unchanged sentences

Segment operating income margin 7.6 % 6.2 % 140 bps 22.6

Rail segment net sales for the three months ended June 30, 2025 decreased $9,621, or 11.2%, from the prior year quarter.

The decline was primarily driven by $8,753, or 15.5%, in lower volumes in the Rail Products business, coupled with lower volumes in our Technology Services and Solutions business which declined $3,861, or 32.6%, due to scaling back initiatives in our UK business and softness in the UK market.

Partially offsetting these declines was an increase of $2,993, or 17.2%, in Global Friction Management sales.

Rail segment gross profit for the three months ended June 30, 2025 decreased $2,743, or 15.3%, from the prior year quarter, and gross profit margins declined by 100 basis points to 19.9%.

The decline in gross profit was due to lower sales volumes and $1,085 of costs associated with the AMH Exit.

Rail segment operating income for the three months ended June 30, 2025 decreased $1,754 from the prior year quarter due primarily to lower gross profit partially offset by a decline in selling and administrative expenses.

During the three months ended June 30, 2025, AMH Exit costs reduced operating income by $1,351.

For the three months ended June 30, 2025, the Rail segment had new orders of $114,345, a decrease of $2,651, driven primarily by Technology Services and Solutions as the Company scales back initiatives in our UK business and due to the timing of Global Friction Management orders.

Partially offsetting these declines was a 3.1% increase in Rail Products orders.

Backlog as of June 30, 2025, was $130,709, a $15,915, or 13.9%, increase over the prior year.

The increase in backlog was due to Rail Products and Global Friction Management, partially offset by a decrease in Technology Services and Solutions.

Rail segment net sales for the three months ended September 30, 2025 decreased $1,710, or 2.2%, from the prior year quarter.

The decline was primarily driven by a $2,814, or 5.9%, decline in Rail Products sales volumes, coupled with a decline in Technology Services and Solutions volumes, which declined $661 or 5.3%, due to continued right-sizing of the UK business partially offset by strength in Total Track Monitoring.

Also offsetting these declines was an increase of $1,765, or 9.0%, in Global Friction Management.

Rail segment gross profit for the three months ended September 30, 2025 decreased $725, or 3.9%, from the prior year quarter, and gross profit margins declined by 40 basis points to 22.8%.

The primary driver of this decline was the Technology Services and Solutions business unit which decreased $860 due to lower volumes in the UK business and unfavorable business mix including commercial weakness in the UK.

Partially offsetting these declines was an increase in Rail Products gross profit of $167 due to favorable business mix.

Global Friction Management margins were down slightly from the prior year quarter.

Rail segment operating income for the three months ended September 30, 2025 increased $962, or 19.5%, from the prior year quarter due primarily to declines in selling and administrative expenses and lower amortization expense.

For the three months ended September 30, 2025, the Rail segment had new orders, net of $86,360, an increase of $33,685 over the prior year quarter, driven by improvement across all business units within the segment.

Rail Products and Global Friction Management improved 35.9% and 4.3% over the prior year quarter, respectively.

Technology Services and Solutions new orders, net improved $25,048 due to a large, multi-year order received in the UK business.

Backlog as of September 30, 2025, was $140,233, a $51,570, or 58.2%, increase over the prior year.

Infrastructure Solutions

Three Months Ended

June 30, Change Percent

September 30, Change Percent

2025 2024 2025 vs.

5 unchanged sentences

Segment operating income margin 6.9 % 8.8 % (190) bps (21.6)

Infrastructure segment net sales for the three months ended June 30, 2025, increased $12,383 or 22.4%, over the prior year quarter.

Sales increased due to strong growth in Precast Concrete Products, which increased $12,224, or 36.0%, over the prior year quarter.

The Steel Products business unit net sales increased $159, or 0.7%, due to sales volume growth in the Protective Coatings business which was partially offset by declines in the bridge forms product line and the exit of the bridge grid deck product line.

Infrastructure segment gross profit for the three months ended June 30, 2025 increased $3,130, or 24.8%, and gross profit margins expanded 40 basis points to 23.3%, compared to 22.9% over the prior year quarter, primarily driven by higher sales volumes in Precast Concrete Products and Protective Coatings businesses over the prior year quarter.

Gross profit for the second quarter of 2024 includes a $815 gain realized on the sale of an ancillary property, which was not included in the second quarter of 2025.

Infrastructure segment operating income for the three months ended June 30, 2025 was favorable by $3,143 compared to the prior year quarter due to improvements in gross profit.

For the three months ended June 30, 2025, Infrastructure had new orders of $61,411, an increase of $7,414, over the prior year quarter.

The increase in new orders is due to our Precast Concrete Products business unit which increased 26.7% over the prior year quarter, which was partially offset by the Steel Products business unit which decreased 16.7% from the prior year quarter.

Backlog as of June 30, 2025, was $139,220, an increase of $4,209, or 3.1% over the prior year quarter, driven by both business units.

Infrastructure segment net sales for the three months ended September 30, 2025, increased $2,530 or 4.4%, over the prior year quarter.

The increase was primarily due to the Steel Products business unit which increased $1,946, or 12.7%, due to sales volume growth in the Protective Coatings business.

Additionally, Precast Concrete Products net sales increased $584, or 1.4%, over the prior year quarter.

Infrastructure segment gross profit for the three months ended September 30, 2025 decreased $967, or 6.8%, from the prior year quarter.

The decline in gross profit was due to the Precast Concrete business unit which declined $2,198 due to unfavorable sales mix and higher manufacturing costs.

Gross profit for the three months ended September 30, 2025 includes $557 in costs associated with the startup of the Florida precast facility consistent with the Company's growth strategy.

Steel Products gross profit improved $1,231 over the prior year quarter due to higher volumes and favorable business mix.

Gross profit margins declined 260 basis points to 22.0% due to the Precast Concrete business.

Infrastructure segment operating income for the three months ended September 30, 2025 was unfavorable by $963, or 18.8%, compared to the prior year quarter due to lower gross profit.

For the three months ended September 30, 2025, Infrastructure had new orders, net of $28,416, a decrease of $14,882, from the prior year quarter due to order cancellations primarily in the Steel Products business unit.

Steel Products new orders, net decreased by 148.1% which was partially offset by a 10.8% increase in the Precast Concrete business unit.

Backlog as of September 30, 2025, was $107,183, a decrease of $13,159, or 10.9%, from the prior year quarter due to order cancellations in Steel Products offset in part by a $3,988 increase, or 4.9%, in backlog for Precast Concrete.

Three Months Ended

June 30, Change Percent

September 30, Change Percent

2025 2024 2025 vs.

5 unchanged sentences

Unallocated corporate expense - net $ 1,747 $ 2,720 $ (973) (35.8) %

Unallocated corporate expense - net for the three months ended June 30, 2025 was $2,835 compared to $4,552 for the three months ended June 30, 2024.

Corporate executive management costs decreased from the prior year quarter primarily due to a decrease of $751 in corporate legal costs associated with a resolved legal matter and a decrease in professional service expenditures of $473.

Unallocated corporate expense - net for the three months ended September 30, 2025 was $1,747 compared to $2,720 for the three months ended September 30, 2024.

Corporate executive management costs decreased from the prior year quarter primarily due to a decrease of $422 in corporate legal costs associated with a resolved legal matter and lower professional service expenditures.

Results of Operations

First Six Months 2025 Compared to First Six Months 2024

Six Months Ended

June 30, Change

First Nine Months 2025 Compared to First Nine Months 2024

Nine Months Ended

September 30, Change

2025 2024 2025 vs.

11 unchanged sentences

Income before income taxes $ 10,672 $ 14,010 $ (3,338)

Income tax expense 2,813 635 2,178

Income tax expense (benefit) 5,625 (29,110) 34,735

Net income $ 5,047 $ 43,120 $ (38,073)

4 unchanged sentences

Results Summary

Net sales for the six months ended June 30, 2025 decreased $23,766, or 9.0%, from the prior year period.

The decrease in net sales was driven by a decrease of $38,229, or 22.7%, in the Rail segment, partially offset by a $14,463, or 14.9%, increase in the Infrastructure segment.

Gross profit for the six months ended June 30, 2025 decreased $5,638, or 9.9%, from the prior year period and gross profit margins declined 20 basis points to 21.2%.

The decline in gross profit and gross profit margin is due to lower sales volumes associated with the Rail segment, AMH Exit restructuring costs of $1,085 and the $815 gain on the sale of ancillary property realized in the prior year period.

Selling and administrative expenses for the six months ended June 30, 2025 decreased $4,354, or 9.1%, from the prior year period, due primarily to a decrease of $1,777 in personnel costs, $751 in legal fees, $783 in professional services expenditures, and reduced travel and insurance costs.

Partially offsetting this decline were $266 of costs associated with the AMH Exit.

Selling and administrative expenses as a percentage of net sales was unchanged compared to the prior year period at 18.0%.

Net interest expense increased $15 for the six months ended June 30, 2025 compared to the prior year period.

The Company's outstanding debt balance was $81,628 as of June 30, 2025, compared to $87,173 as of June 30, 2024.

The Company’s effective income tax rate for the six months ended June 30, 2025 was 79.6%, compared to 8.1% in the prior year period.

The Company's effective income tax rate for the six months ended June 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom for which no income tax benefit was recognized due to a valuation allowance.

Net income attributable to the Company for the six months ended June 30, 2025 was $775, or $0.07 per diluted share, compared to net income in the prior year period of $7,283, or $0.66 per diluted share.

The lower net income for the six months ended June 30, 2025 was primarily driven by a decrease in gross profit and an increase in income tax expense offset in part by a decrease in selling and administrative expenses.

Also, net income for the six months ended June 30, 2024 included the $3,477 gain on the sale of the former joint venture facility in Magnolia, Texas.

Net sales for the nine months ended September 30, 2025 decreased $22,946, or 5.7%, from the prior year period.

Rail segment net sales decreased $39,939, or 16.1%, from the prior year period and was offset in part by higher sales in the Infrastructure segment which improved $16,993, or 11.0%, over the prior year period.

Gross profit for the nine months ended September 30, 2025 decreased $7,330, or 8.2%, from the prior year period and gross profit margins declined 60 basis points to 21.6%.

The decline in gross profit was primarily due to lower sales volumes in the Rail segment which declined $10,010 from the prior year period and includes $1,085 of AMH Exit costs.

Partially offsetting this decline was gross profit improvement in the Infrastructure segment of $2,680 due to improved volumes offset in part by unfavorable business mix and increased manufacturing costs including $1,633 of costs associated with the start up of our Florida precast facility.

Gross profit for the nine months ended September 30, 2024 includes a $815 gain on the sale of ancillary property.

Selling and administrative expenses for the nine months ended September 30, 2025 decreased $6,566, or 9.1%, from the prior year period.

The decline was primarily attributed to decreases of $2,202 in personnel costs as a result of our restructuring programs, $1,173 in legal costs, $783 in professional services expenditures, $574 in lower restructuring costs, and reduced travel and insurance costs.

Selling and administrative expenses as a percentage of net sales decreased from the prior year period to 17.2%.

Net interest expense decreased $89 for the nine months ended September 30, 2025 compared to the prior year period.

The Company's outstanding debt balance was $58,722 as of September 30, 2025, compared to $68,544 as of September 30, 2024.

The Company’s effective income tax rate for the nine months ended September 30, 2025 was 52.7%, compared to (207.8)% in the prior year period.

The Company's effective income tax rate for the nine months ended September 30, 2025 differed from the statutory rate of 21% primarily due to the impact of pre-tax losses in the United Kingdom for which no income tax benefit was recognized due to a valuation allowance.

Net income attributable to the Company for the nine months ended September 30, 2025 was $5,129, or $0.47 per diluted share, compared to net income in the prior year period of $43,188, or $3.91 per diluted share.

Net income for the nine months ended September 30, 2024 included an income tax benefit of $29,110 associated with a favorable tax valuation adjustment and a $3,477 gain

on the sale of a former joint venture facility in Magnolia, Texas.

The decrease in net income was also impacted by lower gross profit for the nine months ended September 30, 2025 partially offset by reductions in selling and administrative expenses and amortization expense.

Results of Operations - Segment Analysis

Rail, Technologies, and Services

Six Months Ended

June 30, Change Percent

Nine Months Ended

September 30, Change Percent

2025 2024 2025 vs.

5 unchanged sentences

Segment operating profit margin 4.7 % 6.9 % (220) bps (31.9)

Rail segment net sales for the six months ended June 30, 2025 decreased $38,229, or 22.7 %, from the prior year period.

The decrease was primarily due to the decline in the Rail Products business unit which declined $32,472, or 29.7%, due to the timing of large orders in the Rail Distribution product line and an exceptionally strong prior year period.

Technology Services and Solutions' net sales decreased $10,292, or 37.6%, due to the Company scaling back initiatives in the United Kingdom and softness in the domestic markets served.

The Global Friction Management business unit's net sales improved $4,535, or 14.4%, due to improved demand in domestic markets served.

Rail segment gross profit for the six months ended June 30, 2025 decreased $9,285, or 25.5%, from the prior year period, and gross profit margins declined 80 basis points to 20.9%.

The Rail Products and Technology Services and Solutions business units' gross profit declined $6,029 and $6,041, respectively, due to lower volumes.

Rail segment net sales for the nine months ended September 30, 2025 decreased $39,939, or 16.1 %, from the prior year period.

The decrease was primarily due to the decline in the Rail Products business unit which declined $35,286, or 22.5%, due to the timing of large orders in the Rail Distribution product line.

Technology Services and Solutions net sales decreased $10,952, or 27.4%, due to the Company scaling back initiatives in the United Kingdom.

Global Friction Management net sales improved $6,299, or 12.3%, due to improved demand in domestic markets served.

Rail segment gross profit for the nine months ended September 30, 2025 decreased $10,010, or 18.2%, from the prior year period, and gross profit margins declined 60 basis points to 21.6%.

The Rail Products and Technology Services and Solutions business units gross profit declined $5,862 and $6,901, respectively, due to lower volumes and unfavorable business mix.

The Technology Services and Solutions business unit gross profit decline was due in part to $1,085 of restructuring costs associated with the AMH Exit.

Partially offsetting these declines was an improvement in the Global Friction Management gross profit of $2,753 due to higher volumes.

Rail segment operating income for the six months ended June 30, 2025 decreased $8,388 from the prior year period.

The decrease was driven by a decline in gross profit associated with lower sales volumes and $266 of costs associated with AMH Exit, partially offset by lower selling and administrative expenses.

For the six months ended June 30, 2025, new orders were $197,597, a decrease of $3,140 from the prior year period.

The decrease was due to declines in the Technology Services and Solutions business unit of 27.6% as the Company scales back initiatives in the United Kingdom.

Partially offsetting these declines was a 7.3% increase in new orders in our Global Friction Management business unit while Rail Product orders were flat compared to the prior year.

Rail segment operating income for the nine months ended September 30, 2025 decreased $7,426, or 43.1%, from the prior year period.

The decrease was driven by a decline in gross profit associated with lower sales volumes partially offset by decreases in selling and administrative expenses and amortization expense of $1,834 and $750, respectively.

For the nine months ended September 30, 2025, new orders, net were $283,956, an increase of $30,544 from the prior year period.

The increase was due to a 68.2% improvement in the Technology Services and Solutions business unit due to a large, multi-year order received in the UK business, a 6.2% improvement in the Global Friction Management business unit, and a 5.6% improvement in Rail Products business unit.

Infrastructure Solutions

Six Months Ended

June 30, Change Percent

Nine Months Ended

September 30, Change Percent

2025 2024 2025 vs.

5 unchanged sentences

Segment operating income margin 6.1 % 4.7 % 140 bps 29.8

Infrastructure segment net sales for the six months ended June 30, 2025 increased $14,463, or 14.9%, over the prior year period.

The increase in net sales was attributable to the Precast Concrete Products business unit which increased $19,337, or 35.1%, over the prior year period which was partially offset by the Steel Products business unit which decrease $4,874, or 11.6%, from the prior year period due to declines in the bridge forms product line and the exit of the bridge grid deck product line.

Infrastructure segment gross profit for the six months ended June 30, 2025 increased $3,647, or 18.0%, due primarily to strength in the Precast Concrete Products business.

Gross profit margins of 21.5% increased 60 basis points over the prior year period due primarily to favorable business mix in the Steel Products business unit.

Gross profit for the six months ended June 30, 2024 includes the $815 gain on sale of ancillary property.

Infrastructure segment operating income for the six months ended June 30, 2025 was favorable $4,087 compared to the prior year period due to improvements in gross profit and a decrease in selling and administrative expenses.

For the six months ended June 30, 2025, the Infrastructure segment had new orders of $127,223, an increase of $24,582, over the prior year period.

The increase is due to our Precast Concrete Products business unit which increased by 23.5% over the prior year period, and our Steel Products business unit which increased 25.0% over the prior year period due to new order strength in our Protective Coatings business.

Six Months Ended

June 30, Change Percent

Infrastructure segment net sales for the nine months ended September 30, 2025 increased $16,993, or 11.0%, over the prior year period.

The increase in net sales was attributable to the Precast Concrete Products business unit which increased $19,920, or 20.4%, over the prior year period which was partially offset by the Steel Products business unit which decreased $2,927, or 5.1%, from the prior year period due to declines in the bridge forms product line and the Bridge Exit.

Infrastructure segment gross profit for the nine months ended September 30, 2025 increased $2,680, or 7.8%, due to gross profit increases in both business units.

Gross profit increased by $1,836, in the Precast Concrete business unit due primarily to higher sales volumes offset in part by higher manufacturing costs including $1,633 of costs associated with the start up of our Florida precast facility in line with the Company's strategic growth plan.

Steel Products gross profit improved $844, over the prior year quarter due to favorable business mix and benefits associated with the Bridge Exit.

Gross profit margins of 21.7% decreased 60 basis points from the

prior year period due to unfavorable sales mix and higher manufacturing costs in the Precast Concrete business.

Gross profit for the nine months ended September 30, 2024 includes the $815 gain on sale of ancillary property.

Infrastructure segment operating income for the nine months ended September 30, 2025 was favorable $3,124, or 42.5%, compared to the prior year period due to improvements in gross profit and a decrease in selling and administrative expenses.

For the nine months ended September 30, 2025, the Infrastructure segment had new orders, net of $155,639, an increase of $9,700, over the prior year period.

The increase is due to the Precast Concrete Products business unit which increased 19.7% over the prior year period.

Partially offsetting this increase was a decrease in the Steel Products business unit of 24.8% from the prior year period due to order cancellations.

Nine Months Ended

September 30, Change Percent

2025 2024 2025 vs.

6 unchanged sentences

Unallocated corporate expense - net $ 6,205 $ 7,096 $ (891) (12.6) %

Unallocated corporate expense - net for the six months ended June 30, 2025 was $4,458 compared to the six months ended June 30, 2024 which was $4,376.

The increase was due to the $3,477 gain on the sale of the former joint venture facility in Magnolia, Texas recorded in the six months ended June 30, 2024.

This was partially offset by a decrease in corporate executive management costs of $2,344 due to a decrease in professional service expenditures and lower travel and insurance costs.

Unallocated corporate expense - net for the nine months ended September 30, 2025 was $6,205 compared to the nine months ended September 30, 2024 which was $7,096.

The decrease was primarily due to a decline in corporate executive management costs of $3,008 due to a decrease in legal fees, professional service expenditures, and travel and insurance costs.

This decline was offset in part by the $3,477 gain on the sale of the former joint venture facility in Magnolia, Texas in the nine months ended September 30, 2024.

Liquidity and Capital Resources

The Company’s principal sources of liquidity are its existing cash and cash equivalents, cash generated by operations, and the available capacity under the revolving credit facility.

The revolving credit facility provides for a total commitment of up to $150,000, of which $68,138 was available for borrowing as of June 30, 2025, subject to covenant restrictions.

The revolving credit facility provides for a total commitment of up to $150,000, of which $91,108 was available for borrowing as of September 30, 2025, subject to covenant restrictions.

The Company’s primary needs for liquidity relate to working capital requirements for operations, capital expenditures, debt service obligations, tax obligations, outstanding purchase obligations, acquisitions, restructuring payments, and to support the share repurchase program.

The Company’s total debt, including finance leases, was $81,628 and $46,940 as of June 30, 2025 and December 31, 2024, respectively, and was primarily comprised of borrowings under its revolving credit facility.

The following table reflects available funding capacity as of June 30, 2025:

June 30, 2025

The Company’s total debt, including finance leases, was $58,722 and $46,940 as of September 30, 2025 and December 31, 2024, respectively, and was primarily comprised of borrowings under its revolving credit facility.

The following table reflects available funding capacity as of September 30, 2025:

September 30, 2025

Cash and cash equivalents $ 3,428

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Total available funding capacity $ 94,536

As of June 30, 2025, we were in compliance with all covenants of the Credit Agreement and have $72,324 available funding capacity, subject to covenant restrictions.

As of September 30, 2025, we were in compliance with all covenants of the Credit Agreement and have $94,536 available funding capacity, subject to covenant restrictions.

The Company’s operating cash flows are impacted from period to period by fluctuations in working capital needs, as well as its overall profitability.

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The Company regularly assesses its receivables and contract assets for collectability and realization, and provides allowances for credit losses where appropriate.

The Company believes that its reserves for credit losses are appropriate as of June 30, 2025, but adverse changes in the economic environment and adverse financial conditions of its customers may impact certain of its customers’ ability to access capital and compensate the Company for its products and services, as well as impact demand for its products and services.

The changes in cash and cash equivalents for the six months ended June 30, 2025 and 2024 were as follows:

Six Months Ended June 30,

Net cash used in operating activities $ (15,734) $ (26,398)

The Company believes that its reserves for credit losses are appropriate as of September 30, 2025, but adverse changes in the economic

environment and adverse financial conditions of its customers may impact certain of its customers’ ability to access capital and compensate the Company for its products and services, as well as impact demand for its products and services.

The changes in cash and cash equivalents for the nine months ended September 30, 2025 and 2024 were as follows:

Nine Months Ended September 30,

Net cash provided by (used in) operating activities $ 13,447 $ (1,653)

Net cash used in investing activities (8,004) (3,953)

Net cash provided by financing activities 22,468 28,815

Net cash (used in) provided by financing activities (4,628) 6,420

Effect of exchange rate changes on cash and cash equivalents 159 (239)

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Cash Flow from Operating Activities

During the six months ended June 30, 2025, net cash used in operating activities was $15,734, compared to cash used in operating activities of $26,398 during the prior year period.

For the six months ended June 30, 2025, net income and adjustments to reconcile net income from operating activities provided $12,553, compared to $12,178 in the prior year period.

Working capital and other assets and liabilities were a use of $28,287 in the current period, compared to a use of $38,576 in the prior year quarter.

The increase in operating cash flow for the six months ended June 30, 2025 versus the six months ended June 30, 2024 was largely driven by lower working capital needs this year related to lower Rail volumes.

During the nine months ended September 30, 2025, net cash provided by operating activities was $13,447, compared to cash used in operating activities of $1,653 during the prior year period.

For the nine months ended September 30, 2025, net income and adjustments to reconcile net income from operating activities provided $23,380, compared to $22,264 in the prior year period.

Working capital and other assets and liabilities were a use of $9,933 in the current period, compared to a use of $23,917 in the prior year period.

The increase in operating cash flow for the nine months ended September 30, 2025 compared to the prior year period was largely driven by lower working capital needs associated with the lower Rail volumes.

Changes in payment timing can impact accounts receivable in any given quarter due to the seasonality of our businesses.

Cash Flow from Investing Activities

Capital expenditures for the six months ended June 30, 2025 and 2024 were $5,248 and $4,766, respectively.

Capital expenditures for the nine months ended September 30, 2025 and 2024 were $8,057 and $7,834, respectively.

Capital expenditures in both periods primarily relate to general plant and operational improvements throughout the Company, as well as organic growth initiatives including investments in our new Precast Concrete facility in Lake County, Florida.

During the six months ended June 30, 2024, the Company divested the facility and land of its former joint venture in Magnolia, Texas and the fixed assets associated with the Bridge Exit generating a cash inflow of $3,881.

During the nine months ended September 30, 2024, the Company divested the facility and land of its former joint venture in Magnolia, Texas and the fixed assets associated with the Bridge Exit generating a cash inflow of $3,881.

Cash Flow from Financing Activities

During the six months ended June 30, 2025 the Company had an increase in outstanding debt of $32,340 compared to a $31,955 increase during the six months ended June 30, 2024.

Additionally, debt issuance costs of $706 were incurred during the six months ended June 30, 2025 related to the June 27, 2025 Fifth Amended and Restated Credit Agreement.

During the six months ended June 30, 2025, the Company also made a $782 deferred payment related to the June 2022 acquisition of Skratch Enterprises Ltd.

During the nine months ended September 30, 2025 the Company had an increase in outstanding debt of $9,963 compared to a $12,162 increase during the nine months ended September 30, 2024.

Additionally, debt issuance costs of $706 were incurred during the nine months ended September 30, 2025 related to the June 27, 2025 Fifth Amended and Restated Credit Agreement.

During the nine months ended September 30, 2025, the Company also made a $782 deferred payment related to the June 2022 acquisition of Skratch Enterprises Ltd.

This payment was deferred at the date of the acquisition in accordance with the purchase agreement and was made during the second quarter of 2025.

The increase in debt for the six months ended June 30, 2025 was driven by an increase in cash needed for treasury stock acquisitions, debt issuance costs, and the Skratch deferred acquisition payment and the absence of the cash inflow from the sale of the former joint venture in Magnolia, Texas from the prior year period.

The Board of Directors previously authorized the repurchase of up to $15,000 of the Company’s common shares until February 2025, pursuant to the terms of the previously disclosed stock repurchase program adopted March 3, 2023, as amended August 5, 2024.

The Company repurchased 113,169 shares for $3,123 under this program through February 2025.

During the first quarter of 2025, the Company repurchased 113,169 shares for $3,123 under this program through February 2025.

Since the program's inception and continuing through February 2025, the Company repurchased a total of 547,679 shares of its stock for $12,241 under the program.

On March 3, 2025, the Company's Board of Directors approved a new authorization to repurchase up to $40,000 of the Company's common stock in open market transactions and/or 10b5-1 trading plans through February 29, 2028.

As of June 30, 2025, the Company repurchased 163,762 shares of its stock for $3,316 under this program.

Under both programs, the Company repurchased a total of 276,931 shares for $6,439 during the six months ended June 30, 2025.

From February 2023 through June 30, 2025, the Company repurchased a total of 711,441 shares of its stock for $15,557 under both programs.

As of September 30, 2025, the Company repurchased 347,905 shares of its stock for $8,035 under this program.

Under both programs, the Company repurchased a total of 461,074 shares for $11,158 during the nine months ended September 30, 2025.

From February 2023 through September 30, 2025, the Company repurchased a total of 895,584 shares of its stock for $20,276 under both programs.

Repurchases of shares of the Company’s common stock may be made from time to time in the open market or in such other manner as determined by the Company.

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Financial Condition

As of June 30, 2025, the Company had $4,186 in cash and cash equivalents and $68,138 of availability under its revolving credit facility, subject to covenant restrictions.

As of June 30, 2025, approximately $2,890 of the Company’s cash and cash equivalents were held in non-domestic bank accounts.

As of September 30, 2025, the Company had $3,428 in cash and cash equivalents and $91,108 of availability under its revolving credit facility, subject to covenant restrictions.

As of September 30, 2025, approximately $3,018 of the Company’s cash and cash equivalents were held in non-domestic bank accounts.

The Company’s principal uses of cash in recent years have been to fund its operations, including capital expenditures, repurchase of shares, acquisitions, funding the now complete UPRR Settlement Agreement, and service indebtedness.

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Although backlog is not necessarily indicative of future operating results, the following table provides the backlog by segment:

September 30,

2025 December 31,

2024 June 30,

2024 September 30,

Rail, Technologies, and Services $ 140,233 $ 62,449 $ 88,663

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While a considerable portion of the Company’s business is backlog driven, certain businesses, including the Global Friction Management business unit, are not driven by backlog and therefore have lower levels of backlog throughout the year.

Backlog increased by $20,124 over the prior year quarter due to increases throughout our portfolio.

Backlog increased by $38,411 over the prior year period due primarily to increases throughout the Rail segment.

Critical Accounting Estimates

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These non-GAAP financial measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted.

The Company defines new orders as a contractual agreement between the Company and a third-party in which the Company will, or has the ability to, satisfy the performance obligations of the promised products or services under the terms of the agreement.

The Company defines backlog as contractual commitments to customers for which the Company’s performance obligations have not been

met, including with respect to new orders and contracts for which the Company has not begun any performance.

Management utilizes new orders and backlog to evaluate the health of the industries in which the Company operates, the Company’s current and future results of operations and financial prospects, and strategies for business development.

The Company believes that new orders and backlog are useful to investors as supplemental metrics by which to measure the Company’s current performance and prospective results of operations and financial performance.

The Company defines new orders, net as a contractual agreement between the Company and a third-party in which the Company will, or has the ability to, satisfy the performance obligations of the promised products or services under the terms of the agreement net of order cancellations incurred during the period.

The Company defines backlog as contractual commitments to customers for which the

Company’s performance obligations have not been met, including with respect to new orders and contracts for which the Company has not begun any performance.

Management utilizes new orders, net and backlog to evaluate the health of the industries in which the Company operates, the Company’s current and future results of operations and financial prospects, and strategies for business development.

The Company believes that new orders, net and backlog are useful to investors as supplemental metrics by which to measure the Company’s current performance and prospective results of operations and financial performance.

Non-GAAP financial measures are not a substitute for GAAP financial results and should only be considered in conjunction with the Company’s financial information that is presented in accordance with GAAP.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis