Ted Jackson: What do you guys, in terms of your kind of forward modeling, what are you kind of penciling in for kind of a per ton pricing for steel? I mean, when I look at first quarter on the Midwest contract, it looks like the average was just under a $1,000 a ton. But obviously it’s been — lately it’s been closer to $800. I mean, kind of what do you — when you think about the remainder of 2024, what are you penciling in as you model for your own business?
Scott Montross: Well, steel prices that we realized in the first quarter. Now, remember, some of these are bought previous, so they’re previous pricing. And we’re seeing steel — incoming steel costs that are in the low to, yeah, probably, lower $900s, because those include freight costs and extras for whatever kind of greatest deal that you’re buying, right? So if you — from what we’ve talked about, we’ve probably got something in the area of about $900 penciled in, maybe a little bit less than that for the year and don’t really expect that to change too much, to tell you the truth.
Ted Jackson: And then when you look forward and we talked about, within, I think, it came up in the last questions with regards to the second quarter view for margins in the SSP product to be similar to the first quarter. Is it fair, what I’m hearing from you and everything else is that, there’s a more robust market in terms of opportunity. So it’s lessening competition for individual bids. I mean, is it — are we going to see, the margins that you had in the first quarter continue or is this market kind of goes along? Is there an opportunity for margins actually to improve, all else being equal because you have the greatest capacity and hence you have the more, what I’m saying, you have the appetite to take on more business than other people can?
Scott Montross: Ted, that’s a fair question. I think that with the backlog that we have and the projects that we’ve won and stuff, that it’s at least something that we view to be as stable going forward. But with the potential of having some upward movement, if that makes sense.
Ted Jackson: That does make sense. And then going into free cash flow and thanks very much for all the color with regards to 2024 guidance. Very helpful. But, I mean, obviously, I was a little surprised and I understand why the free cash flow number for the first quarter went the way it did. I mean, it’s actually a pretty decent problem to have, because business is growing you’re committing capital. But if you’re going to keep your run rate at $80 million and was to say that the runway for you given kind of the length and opportunity with a lot of the water projects that you mentioned rolling not really until the end of 2024, but really 2025 and 2026, is it fair to assume that if you maintain kind of a revenue run rate going forward for the next year or two at that $80 million, that we would continue to see this more and more improvement in free cash flow, because your working capital levels would run kind of flat.
Do you understand what I’m saying, where I’m going with this, like if you’re going to run at an $80 million run rate and you’re running there now, and you’ve just put this big increase in this big drain, in terms of your cash flow from working capital changes, would it be fair to say that, your working capital levels would run relatively stable and that we could see an extended period of very solid free cash flow generation?
Aaron Wilkins: Yeah. Ted, that would essentially be the way it works. We got caught in a little bit of a perfect storm this quarter. Obviously had the production levels go up for Steel Pressure Pipe, had to kind of load the gun for the production levels that we coil…
Ted Jackson: Hello?
Aaron Wilkins: … in our inventories, right? So, and really, we just didn’t kind of get some of the good bounces that we got a year ago and those good bounces are going to come. Like Scott said, we’re doing a good job of getting out and working on MOH payments with our customers, working on steel prepayments with our customers. So some of those good timing things that we’ve seen in the past are just kind of still in front of us for 2024. I think the other thing, though, as you kind of go back to just kind of that normalization of the revenue levels, that will really kind of steady the ship. The only thing that would really kind of steer it, I think, off that path would be just a really weird blip in steel prices. That has some potential. If we were — and like we said, we don’t foresee that happening or anything like that, but that would be the thing that could really kind of derail in that kind of $80 million run rate for SPP.
Ted Jackson: Well, that’s why I preface it with steel, with all else being equal, because I understand what steel does with regards to the business itself. But, all in all, I mean, that’s all super encouraging. Then my last kind of question is, when you talk about a fairly strong market for Precast in second quarter and beyond. I mean, are we talking, like, can you — what are we talking about here, I mean, like, I mean, it’s not the biggest part of your business, obviously, but I mean, can you see that business popping north of $40 million in the second quarter? I mean, is it that kind of pop or is it something a little more modest than that?
Scott Montross: No. I…
Ted Jackson: And by the way, congratulations on the improvement in bookings in that business. That was…
Scott Montross: Okay.
Ted Jackson: You’ve had a lot of decline in that for many periods. So it was really nice to see that, by the way.
Scott Montross: Yeah. I think — the second quarter is kind of where you’re saying. If you look at last year where we were in the second quarter, second and third quarters for Precast are the big time of the year. First quarter is generally always slow, okay? And obviously for us, one of the businesses of the Precast infrastructure in Geneva is in Utah, and they tend to get a lot of snow in the winter and the contractors aren’t out doing as much work during the winter. So we believe that it’s going to rebound like similar to what we did last year in the second quarter and probably the year before in the second quarter also. So I think it’s kind of on a similar path. And we expect, again, after a pretty slow first quarter for Precast, we expect the rest of the year to be pretty good.
Ted Jackson: Okay. Well, I mean, it was a great quarter and it looks like you’re really teed up for an extended period of financial performance, market performance. Congratulations on everything and I’ll talk to you later.
