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It achieved its highest fourth-quarter sales since 2018, driven by a 25.1% revenue increase as the company successfully cleared its execution backlog following last year’s funding delays.
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The rail segment’s performance was characterized by a ‘tale of two halves’, where initial US government funding gaps were adjusted by a strong recovery of 23.7% in Q4.
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Infrastructure growth for the full year was 14.9% driven by a 42.7% increase in protective coatings due to an expansion in precast concrete organics and renewed activity in the US energy sector.
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Management attributed the 260 basis point gross margin decline to a deliberate downscaling of the UK rail business and a higher mix of low-margin rail products.
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Significant SG&A gains were achieved through disciplined cost management, reducing costs by 5.2% despite significantly higher sales volume.
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The strategic pivot towards a capital light model is set to result in a doubling of EBITDA from 2021 while significantly reducing capital intensity.
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Operational efficiency in the precast concrete division has reached record levels, with key facilities running at full capacity to meet strong civil construction demand.
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Guidance for 2026 anticipates sales growth of 3.7% and adjusted EBITDA growth of 11.1% to 10.3%, supported by a 15% increase in backlog in the first two months of the year.
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Management expects a return to ‘normal’ seasonality in 2026, with revenue picking up in Q2 and Q3, avoiding the degraded performance seen during the 2025 funding constraints.
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UK Rail’s restructuring is expected to save between $1.5 million and $2.0 million after closing facilities and reducing staff.
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Capital spending is planned to increase to 2.7% of sales to fund organic growth initiatives, specifically targeting high-demand precast concrete and rail technology platforms.
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The effective tax rate is expected to be significantly lower in 2026 as UK operations stabilize and the company continues to utilize federal net operating losses.
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Britain’s rail business has completed a major restructuring, spending $2.2 million to automate material handling and out-size it for current market demand.
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Infrastructure backlog reflects a $19.0 million headwind from the previously reported Summit order cancellation, which management views as a non-recurring event.
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Gross margin reached a multi-year low of 1.0x, providing financial flexibility to evaluate take-in acquisitions primarily in the precast concrete space.
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Management noted that while tariff hikes are being monitored, the current fiscal impact on the domestic supply chain remains minimal.
