Financial Analysis

2. Business Combination On February 23, 2026 , the Company completed the acquisition of 100% of the shares of Boughtons 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 the Companys geographic footprint for its stormwater infrastructure and sanitary sewer products including manholes, catch basins, vaults, and reinforced concrete pipe. The following table summarizes the purchase consideration and fair value of the assets acquired and liabilities assumed as of February 23, 2026 (in thousands): Assets Cash and cash equivalents $ 147 Trade and other receivables 800 Inventories 1,898 Property and equipment 4,700 Intangible assets 1,496 Total assets acquired 9,041 Liabilities Accounts payable 6 Accrued liabilities 35 Total liabilities assumed 41 Total purchase consideration $ 9,000 The purchase consideration for this acquisition was allocated to the assets acquired and liabilities assumed based upon fair values estimated as of the date of the acquisition. The fair value measurements primarily related to intangible assets, deferred income taxes, and accrued liabilities are preliminary and subject to change as additional information is obtained. The final determination of the fair value of assets and liabilities will be completed within the measurement period of up to one year from the …

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8. Commitments and Contingencies Portland Harbor Superfund Site In 2000, a section of the lower Willamette River known as the Portland Harbor Superfund Site was included on the National Priorities List by the United States Environmental Protection Agency (EPA). While the Companys Portland, Oregon manufacturing facility does not border the Willamette River, an outfall from the facilitys stormwater system drains into a neighboring propertys privately owned stormwater system and slip. Also in 2000, the Company was notified by the EPA and the Oregon Department of Environmental Quality (ODEQ) of potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). A remedial investigation and feasibility study of the Portland Harbor Superfund Site was directed by a group of 14 potentially responsible parties (PRPs) known as the Lower Willamette Group, under agreement with the EPA. The EPA finalized the remedial investigation report in 2016, and the feasibility study in 2016, which identified multiple remedial alternatives. In 2017, the EPA issued its Record of Decision (ROD) selecting the remedy for cleanup at the Portland Harbor Superfund Site, which it believes will cost approximately $1 billion at net present value and take 13 years to complete. These costs are expected to have increased given remediation will not begin for several years. The design of the proposed remediation work is ongoing and the EPA has requested the parties who are …

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Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Over time $ 113,199 $ 84,588 $ 206,652 $ 163,034 Point in time 46,277 48,594 91,078 86,263 Net sales $ 159,476 $ 133,182 $ 297,730 $ 249,297

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7. Share-based Compensation The Company has one active stock incentive plan for employees and directors, the 2022 Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, restricted stock units (RSUs), and performance share awards (PSAs). The Company recognizes the compensation cost of employee and director services received in exchange for awards of equity instruments based on the grant date estimated fair value of the awards. The Company estimates the fair value of RSUs and PSAs using the value of the Companys stock on the date of grant. Share-based compensation cost is recognized over the period during which the employee or director is required to provide service in exchange for the award and, as forfeitures occur, the associated compensation cost recognized to date is reversed. For awards with performance-based payout conditions, the Company recognizes compensation cost based on the probability of achieving the performance conditions, with changes in expectations recognized as an adjustment to earnings in the period of change. Any recognized compensation cost is reversed if the conditions are ultimately not met. The following table summarizes share-based compensation expense recorded (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of sales $ 529 $ 275 $ 914 $ 581 Selling, general, and administrative expen …

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5. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These levels are: Level 1 (inputs are quoted prices in active markets for identical assets or liabilities); Level 2 (inputs are other than quoted prices that are observable, either directly or indirectly through corroboration with observable market data); and Level 3 (inputs are unobservable, with little or no market data that exists, such as internal financial forecasts). The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following table summarizes information regarding the Companys financial assets and liabilities that are measured at fair value on a recurring basis (in thousands): Total Level 1 Level 2 Level 3 As of June 30, 2026 Financial assets: Deferred compensation plan $ 3,785 $ 3,662 $ 123 $ - Foreign currency forward contracts 133 - 133 - Interest rate swaps 47 - 47 - Total financial assets $ 3,965 $ 3,662 $ 303 $ - As of December 31, 2025 Financial assets: Deferred compensation plan $ 3,722 $ 3,324 $ 398 $ - Interest rate swaps 38 - …

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4. Intangible Assets Intangible assets consist of the following (in thousands): Gross Carrying Accumulated Intangible Amount Amortization Assets, Net As of June 30, 2026 Customer relationships $ 29,327 $ (14,173 ) $ 15,154 Trade names and trademarks 12,825 (6,846 ) 5,979 Patents 1,627 (355 ) 1,272 Total $ 43,779 $ (21,374 ) $ 22,405 As of December 31, 2025 Customer relationships $ 27,831 $ (12,735 ) $ 15,096 Trade names and trademarks 12,825 (6,224 ) 6,601 Patents 1,627 (316 ) 1,311 Total $ 42,283 $ (19,275 ) $ 23,008 During the six months ended June 30, 2026 , intangible assets increased due to the acquisition of Boughton. See Note 2, Business Combination for additional information related to this transaction. Intangible assets are amortized using the straight-line method over estimated useful lives ranging from six to 21 years. The estimated amortization expense for each of the next five years and thereafter is as follows (in thousands): Year ending December 31, Remainder of 2026 $ 2,141 2027 4,283 2028 4,283 2029 4,207 2030 4,015 Thereafter 3,476 Total amortization expense $ 22,405 …

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10. Income Taxes The Company files income tax returns in the United States Federal jurisdiction, in a limited number of foreign jurisdictions, and in many state jurisdictions. With few exceptions, the Company is no longer subject to United States Federal, state, or foreign income tax examinations for years before 2021. The Company recorded income tax expense at an estimated effective income tax rate of 26.3% and 22.5% for the three and six months ended June 30, 2026 , respectively and 27.5% and 25.3% for the three and six months ended June 30, 2025 , respectively. The Companys estimated effective income tax rates for the three months ended June 30, 2026 and 2025 were primarily impacted by non-deductible permanent differences. The Companys estimated effective income tax rates for the six months ended June 30, 2026 and 2025 were primarily impacted by non-deductible permanent differences, partially offset by the tax windfalls recognized upon the vesting of equity awards. …

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9. Revenue The Company manufactures water infrastructure steel pipe products, which are generally made to custom specifications for installation contractors serving projects funded by public water agencies, as well as precast and reinforced concrete products. Generally, each of the Companys contracts with its customers contains a single performance obligation, as the promise to transfer products is not separately identifiable from other promises in the contract and, therefore, is not distinct. WTS revenue for water infrastructure steel pipe products is recognized over time as the manufacturing process progresses because of the Companys right to payment for work performed to date plus a reasonable profit on cancellations for unique products that have no alternative use to the Company. Revenue is measured by the costs incurred to date relative to the estimated total direct costs to fulfill each contract. Contract costs include all material, labor, and other direct costs incurred in satisfying the performance obligations. The cost of steel material is recognized as a contract cost when the steel is introduced into the manufacturing process. Changes in job performance, job conditions, and estimated profitability, including those arising from contract change orders, contract penalty provisions, foreign currency exchange rate movements, changes in raw materials costs, and final contract settlements may result in revisions to estimates of revenue, costs, and income, and are recogniz …

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12. Segment Information The operating segments reported below are based on the nature of the products sold and the manufacturing process used by the Company and are the segments of the Company for which discrete financial information is available and for which operating results are regularly evaluated by the Companys CODM, its Chief Executive Officer. The Companys Water Transmission Systems segment manufactures large-diameter, high-pressure steel pipeline systems for use in water infrastructure applications, which are primarily related to drinking water systems. These products are also used for hydroelectric power systems, wastewater systems, seismic resiliency, and other applications. In addition, WTS makes products for industrial plant piping systems and certain structural applications. WTS has manufacturing facilities located in Portland, Oregon; Adelanto and Tracy, California; Parkersburg, West Virginia; Saginaw, Texas; St. Louis, Missouri; and San Luis Rio Colorado, Mexico. The Companys Precast Infrastructure and Engineered Systems segment manufactures stormwater and wastewater technology products, high-quality precast and reinforced concrete products, including reinforced concrete pipe, manholes, box culverts, vaults, and catch basins, pump lift stations, oil water separators, biofiltration units, and other environmental and engineered solutions. Precast has manufacturing facilities located in Pueblo, Colorado; Dallas, Houston, and San Antonio, Texas; and Orem, Salt Lak …

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6. Stockholders Equity Share Repurchase Program On October 10, 2023, the Board of Directors of the Company authorized a share repurchase program of up to $30 million of its outstanding common stock. On December 11, 2025, the Board of Directors of the Company authorized a share repurchase program of up to an additional $10 million of its 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 Securities Exchange Act of 1934, as amended, or in privately negotiated transactions administered by its broker. At this time, the Company has elected to limit its share repurchase transactions to only those transactions made under Rule 10b5-1 trading plans. During the three and six months ended June 30, 2026 , the Company repurchased approximately 2,000 shares and 35,000 shares, respectively, of the Companys common stock for an aggregate amount of $0.3 million and $2.5 million, respectively. During the three and six months ended June 30, 2025 , the Company repurchased approximately 192,000 shares of the Companys common stock for an aggregate amount of $7.8 million. All shares reacquired in connection with the Companys share repurchase programs are retired and treated as authorized and unissued shares. As of June 30, 2026 , $13.9 million of the share re …

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