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Operator: Good day, and thank you for standing by. Welcome to the BrightSpring Health Services, Inc. Common Stock Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Deuchler, Investor Relations. Please go ahead, sir. Good morning. David Deuchler: Thank you for participating in today's conference call. My name is David Deuchler with Investor Relations for BrightSpring Health Services, Inc. Common Stock. I am joined on today's call by Jon Rousseau, Chief Executive Officer, and Jennifer A. Phipps, Chief Financial Officer. Earlier today, BrightSpring Health Services, Inc. Common Stock released financial results for the quarter and full year ended 12/31/2025. A copy of the press release and presentation is available on the company's Investor Relations website. Please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. Forward-looking statements are not a guarantee of future performance. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today's press release and presentation, as well as in our Annual Report and Form 10-Ks that we file with the SEC, including the specific risk factors and uncertainties discussed in our Form 10-Ks. Such factors may be updated from time to time in our periodic filings with the SEC, and we do not undertake any duty to update any forward-looking statements except as required by law. During the call, we will use non-GAAP financial measures when talking about the company's financial performance and financial condition. You can find additional information on these non-GAAP measures and reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort, in today's earnings press release and presentation, which again are available on the Investor Relations website. This webcast is being recorded and will be available for replay on our Investor Relations website. With that, I will turn the call over to Jon Rousseau, Chief Executive Officer. Jon Rousseau: Good morning, everyone, and thank you for joining BrightSpring Health Services, Inc. Common Stock's fourth quarter and full year 2025 earnings call. I would like to begin by expressing my and the company's appreciation to all of our BrightSpring teammates who work hard to deliver attentive and quality patient care and services to people in communities across the country. They drive the realization of our mission forward every day. 2025 was another productive and impactful year at BrightSpring Health Services, Inc. Common Stock in many ways. Overall, we saw continued success delivering revenue and EBITDA growth while achieving many milestones, all underpinned by the delivery of high-quality and compassionate services and care to patients. In the beginning of 2025, we announced our plan to divest the Community Living business, which will streamline the company's operations and create more focus on core patient populations in prioritized markets. Earlier this year, the Community Living divestiture transaction was approved by the and at this time, we expect the transaction to close at the end of the first quarter. The transaction is expected to result in net after-tax cash proceeds of approximately $715 million, which we intend to primarily utilize for debt pay down to further improve our leverage and further strengthen the balance sheet. Additionally, the acquisition of Amedisys in 2025 in a two-part transaction on December 1 and December 31. BrightSpring Health Services, Inc. Common Stock acquired 107 branches at a purchase price of $239 million, which was fully funded from cash on hand. The assets generated full-year pro forma revenue of $345 million in 2025, which includes the months throughout the year prior to the transaction close. These assets are very complementary to our existing home health business from a geographic perspective, while also being in the same markets as our hospice locations in many cases, and we are thrilled to have the Amedisys and LHC assets and colleagues integrated into BrightSpring Health Services, Inc. Common Stock, as we are already taking steps to bring new and improved company capabilities to these acquired operations. This is another example of thoughtful, logical, strategic, and accretive M&A that has defined our acquisitions history. Home health, of course, has a tremendous value proposition given its impact on clinical outcomes and cost, as it is shown to reduce ER visits and hospitalizations by 15% and 25%, respectively, and reduce mortality rates by 30% relatively. With an estimated 35% of patients referred to home health but who do not end up receiving the service, home health should continue to be an important solution in the future of health care. Some other accomplishments of note in the pharmacy and provider last year include continued LDD wins, strength in quality metrics, technology and people investments that resulted in ongoing efficiency gains across the organization, de novo expansions, and small tuck-in acquisitions. BrightSpring Health Services, Inc. Common Stock's operational and financial performance exceeded the high end of our guidance range for the year, and we believe that the company's performance is a reflection of the value of our patient-centric lower cost, timely, and proximal care, enabled by our people and culture who maintain an ongoing commitment to providing excellent and leading services. Moreover, our goal is to continue to build out a unique and scaled home and community health care platform that demonstrates leading quality outcomes and operational best practices, a platform that is best positioned to be a critical partner in solution in U.S. health care. Before discussing BrightSpring Health Services, Inc. Common Stock's fourth quarter and full year performance, I would like to remind you that the company's financial results and 2026 guidance pertain to continuing operations, and do not include results from the Community Living business and the effects of any future closed acquisitions. For the fourth quarter, BrightSpring Health Services, Inc. Common Stock's revenue grew approximately 29% and adjusted EBITDA grew approximately 41% versus last year's comparable quarter, resulting in full year 2025 total revenue and adjusted EBITDA that were above expectations. For the year, total company revenue was $12.9 billion, representing 28% year-over-year growth, which included Pharmacy Solutions revenue of $11.4 billion and Provider Services revenue of $1.5 billion, representing 31% and 11% year-over-year growth, respectively. Full year 2025 adjusted EBITDA was $618 million, which grew 34% year over year, and adjusted EBITDA margin for the company was 4.8%, a 20 basis point increase versus 2024, primarily driven by cost efficiencies from procurement and operational initiatives along with generic revenue mix shift in pharmacy. On cash flow, the company realized $490 million of cash flow from operations in 2025, and leverage was 2.99x as of 12/31/2025, which declined from 4.16x as of 12/31/2024. Overall, BrightSpring Health Services, Inc. Common Stock performed well in both the fourth quarter and full year 2025 across all business lines, and we are very pleased with the position of the balance sheet and expanded cash flow profile of the company this year. Today, we are initiating total revenue and adjusted EBITDA guidance for 2026. We expect total revenue to grow approximately 14% year over year at the midpoint of the provided range, and total adjusted EBITDA to grow approximately 25% year over year at the midpoint of the provided range. Included in total adjusted EBITDA guidance is an expected contribution of approximately $30 million from the Amedisys and LHC acquisition. We are excited for the year ahead, and Jen will discuss 2026 outlook in more detail shortly. Before I discuss our business performance, I would like to highlight BrightSpring Health Services, Inc. Common Stock's commitment to our employees and the communities, individuals, populations, and therapeutic areas that we support. Whether our people, seniors, youth, or other specialty patient populations, at the company, we continue to lean into helping individuals and organizations with access to resources and opportunities. For example, in supporting employees through difficult unforeseen circumstances through our SHARE program and college scholarships, in nursing school partnerships, and in partnering with many, many organizations, such as the Special Olympics for one. We currently operate a foundation through our hospice service line, and we have now started an enterprise foundation that will more formally carry on all of our community and patient support activities. We are hopeful that this BrightSpring Health Foundation can positively impact lives for decades to come. I would also like to briefly highlight our strong patient satisfaction and high-quality scores in the fourth quarter, which are driven by our delivery of attentive and skilled care to complex populations in a timely and relatively lower cost manner. In home health, we continue to see over 91% of our branches at four stars or greater, with timely initiation of care at an industry leading level of 99.4%. In hospice, our metrics remain well above the national average, with a top 5% ranked hospice program in the U.S. and a CAHPS overall hospice rating of 87%. In rehab, our patient satisfaction scores remain very strong, with 100% outpatient satisfaction and 98.4% home and community rehab satisfaction. In personal care, we have a client satisfaction score of 4.6 out of 5, compared to 4.5 in the third quarter, along with strong internal client records and quality indicators audit scores. In home and community pharmacy, dispensing accuracy was 99.99%, order completeness was 99.3%, and on-time delivery was 96.8%. In infusion, our patient satisfaction score was 94%, and we were one of only two providers in the country to receive the ACHC IG Distinction award based on our clinical and operational commitment to the IG patient population, 92.4% in the quarter, along with time to first fill of 4.1 days, both much stronger than the national average. In 2025, Onco360 ranked first and CareMed ranked second in the MMIT physician and office staff satisfaction survey. BrightSpring Health Services, Inc. Common Stock continues to demonstrate very strong service and quality metrics across all businesses. Turning to BrightSpring Health Services, Inc. Common Stock's financial results by segment. Total Pharmacy Solutions revenue grew 32% in the fourth quarter and adjusted EBITDA grew 44% versus the prior year. Total pharmacy script volume was 10.8 million in the quarter, driven by total pharmacy census growth. Total pharmacy volumes declined 1% due to a slight decline in home and community pharmacy volumes from the previously mentioned unwinding of a large customer going through bankruptcy and our decision to exit specific uneconomic customers. Specialty and infusion script growth was 30% year over year in Q4. In the specialty and infusion business, performance throughout the year exceeded expectations, with fourth quarter revenue growth of 43% year over year driven by market adoption of existing LDDs, new LDD wins, fee-for-service growth, and strong commercial execution in the field. BrightSpring Health Services, Inc. Common Stock saw strength in the quarter from both brand LDDs and generic volumes, our total LDD portfolio now standing at 149 LDDs, including five launches in the quarter and 24 total launches in 2025. Moving forward, we expect 16 to 20-plus limited distribution drug launches over the next 12 to 18 months. We believe that our growth will continue to be driven by new LDD launches, generic utilization, commercial execution with referral sources, and expanding fee for service. We are excited to have been chosen as the preferred specialty partner for additional new innovative therapies this quarter, which include infusible LDD therapies to treat a range of oncology, rare, and complex diseases. In infusion, the business performed in line with expectations in the fourth quarter with solid script volume growth. Adjusted EBITDA in the quarter grew in double digits driven by the benefits of operational initiatives and process improvements. We expect to continue to see improved profitability in infusion from our operational and growth initiatives moving forward. In home and community pharmacy, we are pleased with the progress throughout the year. We have executed consistently across several end markets, including in behavioral, assisted living, hospice, and skilled nursing. As we have entered 2026, we continue to enhance our go-to-market strategy, invest in growth resources, and look forward to driving expansion in each of our end markets while we execute against the 2026 set of process, technology, and automation work to drive ongoing efficiency improvements. Turning to Provider Services. We are very pleased with the overall performance in the quarter and the year. In the fourth quarter, segment revenue grew 13% year over year, and segment adjusted EBITDA grew 16% year over year, with an adjusted EBITDA margin of 16.4% in the fourth quarter, a 50 basis point expansion year over year primarily driven by economies of scale and efficiency. Home health care, which represents approximately 55% of revenue in the provider segment, grew 19% year over year. Average daily census grew 15% to almost 35,000 in the quarter, driven by strong quality metrics, de novos, execution on partnerships and preferred MA contracts, and strategic tuck-in acquisitions in target markets. In home-based primary care, we are excited by the large opportunity that exists, especially with ACO payment strategies. We continue to invest in resources in this strategic area, and we believe we can further expand our home-based primary care business to benefit payers and their members and better connect patients to other integrated services that they need. In rehab care, which represented approximately 20% of provider revenue in the fourth quarter, revenue growth was 8% year over year. We are pleased by strong person-served growth of 13% and hours billed growth in the core neuro rehab services of 17%. Growth in the fourth quarter was driven by neuro rehab de novo additions and very high patient satisfaction scores, along with continued expansion of our Rehab in Motion program into ALF and home settings. We are excited by momentum in rehab Part B for seniors and look forward to driving additional de novo locations this year. Turning to personal care, which represented 25% of provider revenue in the fourth quarter, revenue remained steady to up and grew 4% year over year. Personal care persons served grew 2% to 16,175 in the fourth quarter. In the quarter, and throughout 2025, we saw steady operational performance as we continue to provide high-quality supportive care to seniors and assist with activities of daily living in the home. Overall, I am pleased with our operational performance throughout 2025, leading to excellent business performance across BrightSpring Health Services, Inc. Common Stock's enterprise. We now have a seven-year CAGR of 22% on revenue and 18% on adjusted EBITDA. 2026 is off to a consistent and good start, as we remain focused on leveraging our leading complementary and differentiated service capabilities and leveraging our scale, operational efficiencies, and best practices to deliver high-quality coordinated care to complex patients. We will be hosting an Investor Day on March 17 and look forward to discussing the BrightSpring Health Services, Inc. Common Stock platform and strategy that enables high-quality, lower cost, timely care delivery to approximately one-half million senior and complex patient individuals every day. We will provide information on the operations, end markets, and growth drivers of each of our business units, and we will discuss our long-term company vision and strategy, and the reasons why we have never been more excited about BrightSpring Health Services, Inc. Common Stock's future. With that, I will turn the call over to Jen. Jennifer A. Phipps: Before I discuss our financial results for the fourth quarter and full year of 2025, I would like to remind you that in 2025, we began to record the Community Living business in discontinued operations, as indicated in the press release and 10-K, to adhere to accounting standards required for annual reporting. As such, all BrightSpring Health Services, Inc. Common Stock financial results and forecasts that I will discuss are related to continuing operations and exclude Community Living and any acquisitions that have not yet closed. Management believes the presentation of the non-GAAP financials from continuing operations is a useful reflection of our current business performance. In 2025, total company revenue was $3.6 billion, representing 29% growth from the prior year period. Pharmacy Solutions segment revenue in the quarter was $3.2 billion, achieving 32% year-over-year growth. Within the pharmacy segment, infusion and specialty revenue was $2.6 billion, representing growth of 43% from prior year, and home and community pharmacy revenue was $593 million, representing a decline of 1% year over year. Home and community pharmacy revenue declined year over year due to the associated with the customer that declared bankruptcy and our decisions to exit specific uneconomic customers. This particular customer's bankruptcy process is still ongoing, and our forward-year guidance contemplates a variety of scenarios. However, we do not anticipate any changes to the year under any scenario. In the Provider Services segment, we reported revenue of $394 million in the fourth quarter, which represented 13% growth compared to the prior year. Within the Provider Services segment, home health care reported $217 million in revenue, growing 19% versus last year. Rehab revenue was $75 million, growing 8% versus last year, and personal care revenue was $102 million, representing growth of 4% year over year. For the full year 2025, total company revenue was $12.9 billion, representing 28% growth from 2024. Pharmacy Solutions segment revenue was $11.4 billion, representing 31% growth from the prior year, and Provider Services segment revenue was $1.5 billion, representing 11% growth from the prior year. Moving down the P&L, fourth quarter company gross profit was $413 million, representing growth of 22% compared with the fourth quarter of last year. For full year 2025, company gross profit was $1.5 billion, representing growth of 20% compared to 2024. Adjusted EBITDA for the total company was $184 million in the fourth quarter, an increase of 41% compared to 2024. For full year 2025, adjusted EBITDA for the company was $618 million, representing 34% growth compared to 2024. Adjusted EPS for the total company was $0.33 for the fourth quarter and $1.00 for the full year. Throughout 2025, we continued to implement procurement initiatives and have invested in and deployed new technologies to enhance operational efficiencies across the company. This has contributed to ongoing people and growth investments as well as net profitability growth and margin results for the fourth quarter and full year of 2025. In 2026, we anticipate our procurement and operational programs to result in additional gains through cost efficiencies, best practices, and streamlining across all business lines. Turning back to segment performance, in the fourth quarter, Pharmacy Solutions gross profit was $255 million, growing 25% compared with the fourth quarter of last year. Adjusted EBITDA for Pharmacy Solutions was $102 million for the fourth quarter, an increase of 44% compared to last year, representing an adjusted EBITDA margin of 5.1%, which was up approximately 40 basis points versus last year. Provider Services gross profit was $158 million, growing 17% versus the fourth quarter of last year. Adjusted EBITDA for Provider Services was $64 million for the fourth quarter, growing 16% versus last year, representing an adjusted EBITDA margin of 16.4%, up approximately 50 basis points versus last year. Community Living continued to show strong operational and financial performance throughout the year. We are pleased with the year-over-year revenue and EBITDA growth we achieved in this business in 2025. On a total company basis, cash flow from operations was $232 million in the fourth quarter and $490 million for 2025, exceeding our annual run-rate operating cash flow expectations for the year. Our adjusted EBITDA growth combined with our cash flow generation during the quarter has led to a leverage ratio of 2.99x at December 31, 2025, which we successfully decreased from 4.16x as of 12/31/2024. At the time we provided our fourth quarter 2024 results in March, our leverage ratio target was 3.0x to 3.5x pro forma for the Community Living transaction, and as of year end, we have now reached a leverage ratio of just under 3.0x and below that expected range. Our view of year-end 2025 leverage pro forma for the Community Living transaction is 2.6x. We are pleased to have exceeded our leverage target for the year, driven by both growth and very strong operating cash flows exiting the year. BrightSpring Health Services, Inc. Common Stock is well positioned with a strong balance sheet, enabling increased capital allocation flexibility in 2026 and beyond. Longer term, with continued execution, growth, and cash flow generation, we remain on track towards a leverage target of 2.5x or below, which at current trends could be realized by midyear, excluding acquisitions or other uses of cash. As of December 31, net debt outstanding was $2.5 billion. We continue to actively evaluate our capital structure to ensure that we are best positioned moving forward. As mentioned previously, in January, we expect to receive approximately $715 million of net cash proceeds from the $835 million of gross cash consideration in the pending Community Living sale, which at this time we expect to close by the end of the first quarter. Given various moving parts with regards to the use of Community Living proceeds, we are not providing interest expense guidance at this point in time. Turning to guidance for 2026, which excludes the Community Living business, as well as any acquisitions that have not yet closed. Total revenue is expected to be in the range of $14.45 billion to $15.0 billion, including Pharmacy Solutions revenue of $12.6 billion to $13.1 billion and Provider Services revenue of $1.85 billion to $1.9 billion. This revenue range reflects 11.9% to 16.2% growth over full year 2025, excluding Community Living in both years. Total adjusted EBITDA is expected to be in the range of $760 million to $790 million for full year 2026. This would reflect 23.1% to 27.9% growth over full year 2025, excluding Community Living in both years. Included in total adjusted EBITDA is expected contribution from the Amedisys and LHC acquisitions of $30 million. I will now turn it back to Jon. Thanks, Jen. Jon Rousseau: And thank you for your time today to go through BrightSpring Health Services, Inc. Common Stock's fourth quarter and full year 2025 results. We will now open up the call for questions. Operator? Operator: Thank you. Star 1-1 on your telephone and wait for your name to be announced. In fairness to all, we ask that you please limit yourself to one question and one follow-up. One moment for our first question. Our first question is going to come from the line of A.J. Rice with UBS. Your line is open. Please go ahead. A.J. Rice: Thanks. Hi, everybody. Obviously, a lot of things are going well for the company at this point. When you look at your '26 outlook, I wonder if you could— Jon Rousseau: —sit here right now. Yes. We see a lot of consistency that is playing out in Q1, as we look at 2025. So we do not see a whole lot of changes and are continuing to try to execute against the strategies that we have been driving for a while. I mean, as we look out for the year and try to ensure execution, continuing to drive volume growth in each of the businesses is going to be important. We are making sales investments, really as always, and in all of the businesses in particular, and a couple of them, like home health, hospice, and infusion and in home and community in select markets like IDD and ALS. So seeing those sales investments take hold, as always, we have a wholesome list of Lean Sigma tech and now increasingly AI projects that are slated to roll out through the company this year. We expect benefit from those as well. And then as we integrate the Amedisys and LHC acquisitions, those will be important to do well this year. So, look, I think it is just continued execution from a quality standpoint, and with that quality, investing more and more in sales to drive to our volume targets, and then on the cost side, continuing to drive lean initiatives through technology and through our procurement team. Obviously, there is some margin expansion in what we are expecting for this year, but all of those items are things we have been executing against for a long time, and I think we want to take the consistency we are seeing right now and just continue to execute from a volume and a margin perspective. A.J. Rice: Okay. And then maybe for the follow-up, I know you said that over the next twelve to eighteen months, you are looking at 16 to 20 new LDD introductions. I wondered if you could give us some comments about the landscape from a generic conversion, biosimilar conversion, and what that looks like for you at this point. Jon Rousseau: Yes. We 24 LDDs we won last year, and 16 to 20 is our guidepost. We have been beating that the last year or two. We feel like that is a really good number as we look out twelve to eighteen month payment, doing a great job. Again, from a quality and service level perspective, that is something we focus on immensely to try to be the best partner we can. I think importantly, we are winning rare and orphan and some LDDs outside of oncology as well. We will have probably three or four infusion LDDs, for example, that we are going to be winning here in Q1 or early Q2, and that is an area we are really focusing on. And then even a very meaningful cardiac drug here recently that we picked up too. So our LDD and specialty strategy is continuing to, would say, expand, leveraging on the core capabilities that we have. And that is deciding. From a biosimilar perspective, with Solara mostly in the rearview mirror, a little bit of residual impact for us this year, but we really do not have any exposure there just given the nature of the therapies and the drugs that we supply. A.J. Rice: Okay. Thanks a lot. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Whit Mayo with Leerink Partners. Your line is open. Please go ahead. Whit Mayo: Hey, thanks. Good morning. Jon or Jen, can you talk about just EBITDA and margins for each of the segments expected for this year? Jon Rousseau: Yes, sure. I will go ahead and turn that over to Jen in a second. I would just say, as you are seeing EBITDA in our guide thus far for 2026 outpace revenue, obviously there is some margin expansion there. From a revenue perspective, some things that were expected, you have got IRA, you have got some branded generic conversions, you have got a little bit of residual impact from a customer or two in home and community pharmacy that we either fired or they went bankrupt, and so that is at play in some of our revenue numbers, notwithstanding that really strong growth rate numbers for the year that we are really confident in. I think some of the EBITDA drivers, as I said before, is going to be some product mix and then these operational efficiencies that we continue to drive. Provider has got a really good growth number for 2026. That is a 17% margin business as well. So, Jen, any other commentary at the segment level? Jennifer A. Phipps: Yes. I would say from a segment standpoint, we do expect broad-based margin expansion from the initiatives that we deployed in late 2025 and continuing into 2026. So we will see, we do expect some of that. We have favorable mix both in terms of product and services that is benefiting that. Jon mentioned some of the revenue impacts that also is causing expansion from a margin perspective, from an EBITDA standpoint. But just with all of that, we continue to invest for future growth. So in our plan for 2026, we will continue our investments in AI and technologies and other operational processes and sales investments, as Jon has mentioned. So we are going to be covering that in this revenue guide as well. Yes, I think that is an important point. I mean even sort of with the EBITDA guide for '26, which I think it is 27%, 28% at the high end, there is a lot of continual investment we are making in the company as we look out to one-, three-, and five-year growth, which we are really excited about. Whit Mayo: Okay. And then, I am curious just your views on the future of the temporary and permanent behavioral adjustment cuts for home health now that you have really doubled down on the industry. There is some debate whether or not CMS will in fact move forward to implement any further cuts. And then you may have kind of called bottom here on the rate environment in some ways. So I am just curious how you are looking at the rate environment. Jon Rousseau: Yes. We like home health a lot. I mean, that deal was such an incredible fit from a geographical perspective. Our baseline view of home health rates, just to be conservative, is flat. I think there has been a lot of constructive conversations even here recently around the future and the value of home health. So we do remain optimistic, and just given the landscape of what has happened with some of the providers, I mean, we see an unbelievable runway in home health over the next five to ten years. And our base case is flat, and I think if certain things occur in the future, there could be positivity there and back to normal and expected and justified rate increases. Remember, home health for us is sort of still sitting around 10% or so of the company. And then hospice has obviously had a ton of support and has been a phenomenal performer for us. Both of those teams in our company have best-in-class management. We continue to add sales. We continue to drive technology into those businesses, and I am super excited about their prospects. Operator: Thank you. And due to time, we ask that you please limit yourselves to one question. One moment for our next question. Our next question comes from the line of David Michael Larsen with BTIG. Your line is open. Please go ahead. David Michael Larsen: Hi. Congratulations on the great year. Can you talk a little bit about the earnings impact on specialty when drugs launch generic? It is my understanding that even though the price can decline, your margins would improve with generic launches. You are able to negotiate better margins across product classes when that happens. Numbers around that would be very helpful if that is the case. Thank you. Jon Rousseau: Hey, David. Yes. Look. In the specialty pharmacy business, that growth is multifactorial, and it has been working for a decade now. You have got brand LDDs. We continue to win about 20 of those a year. We are continuing to actually expand outside of oncology in a lot of rare and orphan conditions, which is exciting. The pipeline out there in pharma continues to never be more innovative and bigger. These therapeutics are amazing for what they can do for people. But you have got brand LDDs. You have got a healthy stream of brands converting generic over time. That is a great thing for everybody. We drive generic utilization as much as we can. Obviously, the cost on the buy side of procurement comes down, and that is helpful. And then we have a really growing fee-for-service business. We have a lot of data agreements and other service agreements with pharma. We are up to over 30 hubs now. We are the hub for pharma. And so just a terrific business in terms of the fee-for-service side, and that is obviously a higher gross profit margin as well. So we like the multifactor nature of growth in that business, and we continue to lean into all of them. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Charles Rhyee with TD Cowen. Your line is open. Please go ahead. Charles Rhyee: Yes. Thanks for taking the questions, guys. Maybe just follow-up from Luke's question and just at least thinking through for the segments related to the overall EBITDA guidance, obviously, with the provider segment, we are going to add in sort of the $30 million contribution from the Amedisys transaction here. But beyond that, if we look at sort of either the 2025 full-year performance for the segments versus maybe fourth quarter, anything that would suggest that the trends that we are seeing that we should take account in our modeling as we think about the proportions of the overall EBITDA between the segments? Jennifer A. Phipps: We expect consistency with what we saw in 2025, so we will continue to see volume growth and EBITDA growth is our expectation, organically across both of our segments. Operator: And one moment for our next question. Our next question will come from the line of Jared Haas with William Blair. Your line is open. Please go ahead. Jared Haas: Yes. Hey, guys. Thanks for taking the questions, and good morning. Just wanted to drill in a little bit more. Just wanted to understand the margin profile of the Amedisys assets that you acquired. From your comments, it sounds like that is a high single-digit margin if I use the pro forma revenues and then the $30 million EBITDA contribution, which I guess seems to be a little bit on the lower side compared to peers in the space and the rest of your legacy provider segment. So just wanted to kind of understand, make sure we are thinking about margins for that asset correctly. And I am wondering if you are sort of absorbing any integration or transformation-related costs post that acquisition in the near term? Jon Rousseau: Hey, Jared. I will let Jen speak in a second. Good morning. No, look, I think you are largely doing that math correctly in terms of what we acquired. It is what it is. But, as we look out for the year, that would be something that we would hope to integrate very soundly, and as we step through the year, we will see how it is going. We have a margin that is higher than that, and our goals will be to drive to our margin over time, and I think we will look to see how quickly we can do that. Jennifer A. Phipps: I would agree. There is a lot of integration work, some technology investments that we are making, ensuring everyone is on consistent platforms and systems. A number of travel initiatives and other things. So we are really excited about that asset and what that will bring, and again, as Jon mentioned, we are very excited about moving that towards our overall profile. Jon Rousseau: I think the only question hopefully will be the timeline of that. And if it moves up, it moves up, and that is a good thing. Operator: Thank you. One moment for our next question. Our next question comes from the line of Brian Gil Tanquilut with Jefferies. Your line is open. Please go ahead. Brian Gil Tanquilut: Hey, good morning and congrats on the quarter, guys. Maybe, Jen, as I think through the year, any callouts especially with the AMED transaction coming in and kind of like a margin ramp expectation there? Any callout on how we should think about the cadence of the quarters for 2026? Jennifer A. Phipps: Yes. A really great question, Brian. Thank you. Just as a reminder, Q1 is the shortest quarter from a days perspective, so that tends to be, from an annualized perspective, our lowest quarter. We would expect sequential growth in each of our quarters throughout 2026, consistent with what we saw in 2025. And from a margin perspective, that will be driven really kind of throughout the year as well as we have different products coming online. We have a generic launch that will happen in Q2, so that will increase throughout the year from a margin perspective. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Pito Chickering with Deutsche Bank. Your line is open. Please go ahead. Pito Chickering: Hey, good morning, guys. Great quarter here. Looking at the 2026 pharmacy revenue guidance, can you give us the moving parts between sort of core growth of existing drugs plus new LDD wins and then the offsets from generic conversions? And, obviously, generics is obviously revenue, obviously not EBITDA. But if you can just give how we think about core growing plus LDD wins, minus generics to help get to the pharmacy revenue guidance. Thank you. Jennifer A. Phipps: Yes. So maybe I will just start with a couple of unfavorable impacts. I think that will be helpful context. So as you think about IRA in specialty and infusion, we do have a revenue headwind of approximately $200 million, and then brand-to-generic conversions, as we have talked throughout 2025, we typically are trying to increase our sales in advance of a launch. And as we know, when there is a brand-to-generic conversion, revenue does come down, and then ultimately, that is good for everyone. It is beneficial from an EBITDA standpoint for us. The total impact in specialty and infusion is a little over $400 million between those two items. And then home and community IRA impact from a revenue standpoint is approximately $175 million. So we do have headwinds of approximately $100 million in 2026. Despite that, we obviously have strong growth. We do expect growth across all of our different business lines. We will absolutely have LDD growth. That is the, you know, that in specialty. We have strong script growth in home infusion and specialty plans. We mentioned in Q3 that home and community script growth will be challenged because of the year-over-year lapping of some of the customers that we offboarded or branches associated with that customer that went through bankruptcy and those locations. So in home and community, we will have script challenges until about Q3, but outside of that we are having really strong volume growth across each of our pharmacy businesses. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Ann Hynes with Mizuho. Your line is open. Please go ahead. Ann Hynes: Great. Thank you. Can you provide an update on the infusion business? I know it has been a big focus of investment and growth. Maybe how much that grew within specialty, what the margin profile is, and maybe what it contributes now as a percent of total specialty. Thanks. Jon Rousseau: Yes. Hey, Ann. Good morning. We are pleased with where the infusion business is at. We have really high aspirations for it this year and going forward. The acute business, we are really a top-two provider there, and in a lot of markets, have a leading market share. That growth has been in the double digits, and we expect that will occur again this year. On the specialty side is, I think, where we have a big opportunity. We have been underweight on specialty. We are creating specialty hubs right now and really separating those two businesses out to create the focus that we want. We have invested in a lot of resources there. We are going to be further investing in resources. We have plans to significantly expand our AIS presence. We have got about 30 right now. We are going to be retrofitting those and upgrading them and moving locations all this year and trying to make them extremely consumer friendly in all the right kind of strip malls and places. So, super excited about it. As you look at our balance sheet, that gives us a lot more flexibility in the future as well. And then just kind of broadly, just touching back on Pito's question, when you think about the numbers Jen put out there, sort of those one-time impacts, that otherwise is calculating to a revenue outlook at this time for 2026 of at 20% or a little bit over 20% when you adjust for those items. So really robust, broadly outside of a couple of those external items. And then I just wanted to circle back on Brian's note on the cadence of the year. It is a great question. I mean, as Jen said, we do expect the quarters to increase throughout the year. As I sort of mentioned to AJ, the continual sales investments we are making, all in the back of quality, de novos that we are investing in, and then our operational projects, these things are all ongoing throughout the year. And as such, those are some of the growth drivers we see throughout the year as we sit here today. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Matthew Dale Gillmor with KeyBanc. Your line is open. Please go ahead. Matthew Dale Gillmor: Thanks for the question. I wanted to ask about the Onco360 sales force. Seems like a pretty unique asset within the specialty pharmacy platform. Can you remind us the role they play, especially with LDD launches or with generic conversions? And what are the priorities for that part of the business as you are thinking about 2026? Jon Rousseau: Yes. No. That is an area that we have continued to invest in. A lot of longstanding relationships both with pharma and with prescribers, which we take extremely seriously and are very honored to have. But it is an area that we give a lot of attention. We have increased our investments in that field force every year. We will do it again this year. We are essentially, at this point, covering, I think, every geography in the United States from a referral standpoint. And, again, it is the service levels that are really pulled through behind the commitments by the field force that are so important, and those were all reflected in the net promoter scores that we have, which typically range between 95 to 100. So everything starts with service, and from there, it is just trying to offer the best education and support for all of the stakeholders out there in the market that we can. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Joanna Sylvia Gajuk with Bank of America. Your line is open. Please go ahead. Joanna Sylvia Gajuk: Good morning. If I may ask the same question a little bit differently about the segment for that. So I appreciate the $600 million revenue headwind in the pharmacy segment. So if I look at, you know, 2025 pharmacy segment margins, right, they improved actually a little bit year over year, to 4.7%, call it, in '25. Is that the, you know, to think about 2026 margins for that segment, you know, how, I guess, will revenue headwinds translate into the margin for that segment? Thank you. Jennifer A. Phipps: Yes. Thank you, Joanna. Yes. It would be mix shift. It would be operational improvements and offset by the investments that we are going to be making, as mentioned, in each of the different segments and at corporate in those areas. So, again, we would absolutely expect an improvement in margin. You see that coming through in the in. You see that margin move up. We will expect a small improvement of that that is continuing through 2026. And, again, for those particular reasons. Jon Rousseau: Yes. In addition to the mix shift and the operational initiatives, you have got economies of scale just from really robust, just core growth. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Raj Kumar with Stephens. Your line is open. Please go ahead. Raj Kumar: Maybe just kind of expanding upon the integration milestones with Amedisys, LHCG, and thinking about that beyond 2026 and maybe kind of flushing out the embedded value you see with the asset integration and then cross-integration of services and products between both segments, considering the deeper kind of geographical overlap post deal, kind of would be helpful to kind of see or frame the overall kind of story there. Jon Rousseau: Yes. So I think there was an earlier question about the margin structure that we acquired. Our provider margins, you can look at what they are. That is what our hope is for the business, and I think we just have to see how quickly we can get there. I would say we are very optimistic about the top-line growth and the volume and ADC growth as well, and the potential that we have in the business. The assimilation so far has gone incredibly well. From a cultural standpoint, fantastic, and so we are really excited about it. There is margin opportunity there, but we are as excited and even more excited about what we can do from a growth perspective in some of these really terrific markets. I would say that there is also overlap with our hospice branches, and so there is going to be a lot of integrated care opportunities there as well, and benefits for our hospice business too. I would note that we funded that deal entirely with cash on hand, and I think that is just a little bit of a callout to where our balance sheet and our cash profile is today. We ended up the year at almost $500 million of operating cash flow. We also did a repurchase later in the year. And as we look at our balance sheet under three times now, and pro forma for the Community Living close 2.6x, so the ability to execute against that transaction entirely funded with cash on hand was a helpful benefit of where we have come as a company from a balance sheet perspective and where we sit today. And as mentioned, I think that is going to give us some flexibility as we go forward, particularly later in the year and certainly into '27 and '28. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Steven Beck with Wells Fargo. Your line is open. Please go ahead. Steven Beck: Yeah. Hi. Yes. So I am looking at the growth rates here, and I think that actually includes, potentially stepping over a fairly large headwind in the LTC business that is coming off the changes that are being made around the IRA. I was wondering if you could update us maybe on the magnitude of the headwind there that you are stepping over? And then any update on your efforts to maybe offset that headwind through reimbursement changes or additional fees or things like that? Thank you. Jennifer A. Phipps: Yes. So as we discussed last quarter, we continue to work and continued through Q4 to work productively with our payers regarding an enhanced dispensing fee that we have worked to achieve, which has helped us to mitigate some of the impact. We absolutely do have an impact. We continue to work through that from a payer perspective. But through all of the other growth initiatives, the volume growth, the efficiencies, we have growth planned, as we had discussed, healthy growth planned in the home and community business. So we continue to work again with our payers to ensure that we have an appropriate enhanced dispensing fee. Our government relations team is also active, making sure that everyone understands the impacts to the pharmacy business. But again, our scale platform and our operational improvements that are hallmark really to how we are approaching every single year, I think, have helped us in this year, for 2026. Jon Rousseau: Yes. I think hopefully we have been clear on the growth drivers for specialty across LDDs, brand generic, fee for service, infusion. You have got acute, you have got specialty. You have got a growing LDD business there, rollout of more AISs. In home and community pharmacy, outside of this IRA, which we will work through constructively, and you have got one or two customer situations, unfortunately, which will be in the rearview mirror probably by about Q3 or Q4. I mean, the name of the game in that business is driving as much volume as you can in these other attractive end markets and being the most efficient scale provider in the industry. So you look at assisted living, you look at hospice, you look at behavioral, you look at the PACE market we are entering, and then the skilled nursing market with a segment of that market, all extremely attractive. I mean, we are adding some 30 reps this year to grow and penetrate across all those markets further. And then this is where we are leaning into AI and technology the most, for starters. You look at the whole pharmacy intake and revenue cycle process, and there are some seven or eight projects this year. So super excited about continuing to build out the biggest scaled independent provider in that space in these attractive end markets, and providing a set of operations that produce the highest service levels possible and with a continued focus on cost per script there. Operator: Thank you. One moment for our next question. Our next question comes from the line of Sean Dodge with BMO Capital Markets. Your line is open. Please go ahead. Sean Dodge: Yes. Thanks. Good morning. Maybe just going back to the— Jon Rousseau: —margin comments on the pharmacy side. You mentioned some of the key drivers having been your efficiency efforts and then product mix. Could you just give us a sense of the margin expansion you drove over the last year? How much of that was from generics versus how much of that was from those cost initiatives? And then we think about the '26 guidance, the improving margins you are embedding there. Is that proportionality expected to change at all? How big of a role do you expect incremental efficiencies to play into that, again, versus lift from the generics? Thanks. Yes. I mean, well, look, the good news on operational efficiencies is a lot of them occurred in the back half of last year, so they are just sort of flowing through at this point and will be year-over-year tailwinds. And then in addition to that, we are always looking at the next thing and launching new projects. I would say on the pharmacy side, home and community and infusion is where we have the most projects from an operational excellence perspective going on and will be going on this year. But from a margin perspective, I mean, yes, economies of scale from pretty aggressive growth targets that we like to put out there and go try to achieve. But, look, across all the different businesses, you have got brands and generics in each. You have got a lot of different end markets, a lot of different payers. I mean, there is just a lot going on. But the net effect of it every year, if you focus on strong, strong double-digit growth, market share gains, targeting the most attractive therapeutic areas, and doing all of that with the best quality and the most operational efficiency, that has always been out to a really good place. The hallmarks of the company now for ten years has been volume and efficiency, and then accretive M&A. And so that story has really never been more intact, and you see all that play through in 2026, we think, as we sit here today. Operator: Thank you. I am showing no further questions. I would like to hand the conference back over to Jon Rousseau for closing remarks. Jon Rousseau: Thank you, everybody, for joining. We really appreciate it. Appreciate your questions, as always. Have a great day, and we look forward to talking with you soon. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone have a great day.
Operator: Thank you for your continued patience. Your meeting will begin shortly, and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly, and a member of our team will be happy to help you. Please standby. Your meeting is about to begin. Good morning, ladies and gentlemen, and welcome to the Arcosa, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Chloe, and I will be your conference call coordinator today. As a reminder, today's call is being recorded. Now, I would like to turn the call over to your host, Erin Drabek, Vice President of Investor Relations for Arcosa, Inc. Ms. Drabek, you may begin. Good morning, everyone, and thank you for joining Arcosa, Inc.’s Fourth Quarter and Full Year 2025 Earnings Call. Erin Drabek: With me today are Antonio Carrillo, President and CEO, and Gail Peck, CFO. A question-and-answer session will follow their prepared remarks. A copy of the press release issued yesterday and the slide presentation for this morning's call are posted on our Investor Relations website, ir.arcosa.com. A replay of today's call will be available for the next two weeks. Instructions for accessing the replay number are included in the press release. A replay of the webcast will be available for one year on our website under the News and Events tab. Today's comments and presentation slides contain financial measures that have not been prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation. In addition, today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company's SEC filings for more information on these risks and uncertainties, including the press release we filed yesterday and our Form 10-K expected to be filed later today. I will now turn the call over to Antonio. Antonio Carrillo: Thank you, Erin. Good morning, everyone, and thank you for joining us for a discussion of our fourth quarter and full year 2025 results and 2026 outlook. 2025 was an outstanding year for Arcosa, Inc., demonstrated by our exceptional financial performance and significant advancement of our strategic transformation. Our key growth businesses, Construction Materials and Engineered Structures, grew year-over-year, supported by cyclical expansion in both barge and wind towers. For the full year, we achieved record revenues of $2.9 billion, up 12%, record adjusted EBITDA of $583 million, up 30%, and record adjusted EBITDA margin of 20.2%, up 280 basis points. Importantly, we accomplished these results safely, recording the lowest annual safety incident rate in Arcosa, Inc.’s history. Our expanded disclosures further highlight the momentum underpinning our key growth businesses. Within Construction Products, we began separately disclosing revenues and unit statistics for the aggregates business. Representing approximately 60% of our Construction Materials revenues, aggregates achieved 10% growth in cash unit profitability in 2025, led by strong pricing gains and the accretive impact of Stavola. Within Engineered Structures, we separated the revenue and backlog disclosures for utility and related structures and wind towers. This better highlights the underlying strength within utility structures where backlog levels remained at or near record highs throughout the year, supported by robust end market demand. We exited 2025 with great momentum. Fourth quarter adjusted EBITDA increased 13% and margin expanded 90 basis points, with all segments contributing. Our earnings strength and positive cash flow enhanced our balance sheet, and we ended the year comfortably within our long-term leverage target. Overall, I am extremely proud of the dedication and contribution of the entire team. Earlier this week, we announced we entered into a definitive agreement to sell our barge business for $450 million in cash. With a strong backlog that provides production visibility deep into 2026, and market fundamentals supporting a healthy replacement cycle, we believe this is the right time to transition the barge business to an owner aligned with its long-term growth plans. We expect the sale to close in 2026, subject to regulatory approval and other customary closing conditions. I want to thank our talented leadership team, dedicated employees, and long-standing customers for their significant contributions to Arcosa Marine. The barge transaction further reduces portfolio complexity and cyclicality, raises our overall margin profile, and enhances the long-term resiliency of the company. Upon completion of the divestiture, Arcosa, Inc. will be fully focused on Construction Materials and Engineered Structures, both well-aligned to benefit from long-term infrastructure and power market tailwinds in the U.S. Before Gail goes over our financials in more detail, I want to acknowledge Jess Collins. Jess, who has served as Group President of Arcosa, Inc. since our spin-off, will be retiring in a few weeks, and his strategic insight and commitment have helped shape our success and strengthen our foundation for the future. We thank him for his outstanding service and congratulate him on his retirement. I will now turn the call over to Gail to discuss our fourth quarter segment results in more detail. Gail Peck: Thank you, Antonio, and good morning. Starting with Construction Products, fourth quarter segment revenues decreased 2%. Excluding freight, which is a pass-through in our Construction Materials business, revenues increased 4%. Adjusted segment EBITDA grew 3%, and margin expanded 140 basis points. On a freight-adjusted basis, adjusted segment EBITDA margin was roughly flat. As a reminder, segment performance this quarter is all organic, as Stavola hit its one-year anniversary on October 1, at the start of the quarter. For aggregates, freight-adjusted revenues increased roughly 8%, driven by 5% pricing growth and 2% volume improvement. Two consecutive quarters of volume growth give us optimism on continued volume recovery in 2026. Adjusted cash gross profit increased 6% and adjusted cash gross profit per ton increased 3%. Many of our regions had double-digit growth in unit profitability, particularly our natural aggregates and stabilized sand operations in Texas and our aggregates operation in the East Region. This performance, however, was partially offset by lower unit profitability in our Gulf Region, which was impacted by less favorable product mix, and the West Region, which had lower cost absorption on declining production volumes as we align inventory levels to demand. For the full year, volumes increased 6% due to the inorganic contribution from Stavola, and organic volume improvement in the back half of the year partially compensating for first half weather challenges. Full year freight-adjusted sales price grew 8% and adjusted cash gross profit per ton increased 10%, led by the accretive impact from Stavola. Turning to Specialty Materials and Asphalt, revenues decreased 5% primarily due to lower freight revenue for asphalt. Excluding freight, revenues were roughly flat, while adjusted EBITDA and margin declined slightly. Within Specialty Materials, strong profitability gains in lightweight aggregate were offset by volume-related decline in our specialty plaster business. In our asphalt business, revenues increased slightly as solid pricing gains offset lower volumes, resulting in modest unit profitability gains. Finally, revenues and adjusted EBITDA for our trench shoring business saw a double-digit increase year over year and had strong margin expansion driven by higher volumes and improved operating leverage. Moving to Engineered Structures, segment revenues increased 15% led by a 20% increase for our utility and related structures businesses, while wind tower revenue increased 3%. For utility structures, volumes increased double digits while pricing was up high single digits. Steel pass-through was roughly flat year over year. Adjusted segment EBITDA increased 22% and margin expanded 100 basis points to 18.5%, driven by strong revenue growth and operating efficiencies in utility structures. This business executed well throughout the year, resulting in sequential margin improvement in each quarter of 2025. For wind towers, adjusted EBITDA was roughly flat as we focused on rightsizing the business for lower production levels in 2026, resulting in a slight decline in margin year over year for the business. We ended the year with backlog for utility and related structures of $435 million, up 5% from the start of the year, providing solid visibility for 2026. Customer reservations for utility structures that have not yet hit backlog remain strong, providing additional confidence in the demand outlook. For wind towers, we received orders of $190 million during the quarter, primarily for 2027 delivery. We ended the year with backlog of $628 million and expect to recognize 42% in 2026 and 53% in 2027. Turning to Transportation Products, revenues were up 19% and adjusted segment EBITDA increased 24% primarily due to higher tank barge volumes and a more favorable mix, resulting in 90 basis points of margin expansion, building on the meaningful improvement delivered in the prior year. I will now provide some comments on our cash flow performance and improved balance sheet position. During the quarter, we generated $120 million of operating cash flow. As expected, this is down from last year's fourth quarter, which benefited from significant customer deposits in our wind tower and barge businesses for shipments delivering in 2025. Excluding advanced billings, which can be uneven, net working capital days have improved sequentially each quarter in 2025 as we remain very focused on cash management. CapEx for the fourth quarter was $64 million, resulting in full year CapEx of $166 million, which was above the high end of our guidance range. The increase was driven by deposits placed on some long lead-time equipment and the timing of spend on the wind tower plant conversion within our utility structures business. Free cash flow for the quarter was roughly $60 million and was $22 million for the full year. Our strong free cash flow generation in the second half of the year allowed us to repay $164 million of term loan debt during the year, which is prepayable at no cost. We ended the year with net debt to adjusted EBITDA of 2.3x, comfortably within our target leverage range. This is down from 2.9x at the start of the year. Our liquidity remains strong at $915 million, including full availability under our $700 million revolver, and we have no material near-term debt maturities. We are pleased to have achieved our leverage goals quarters ahead of schedule and are focused on balanced capital allocation. For the full year 2026, we expect CapEx to be between $220 million and $250 million. Our guidance includes $70 million to $80 million of growth CapEx and $150 million to $170 million of maintenance CapEx, including approximately $25 million of plant moves and IT-related initiatives in Construction Materials. Within the growth category, we have a good mix of projects within Construction Materials and Engineered Structures, the largest of which is the conversion of our Illinois wind tower plant. We anticipate the cadence of spending to be more first half–weighted based on the expected project timelines. I will wrap up with a few final comments for modeling purposes. For the full year, we expect depreciation, depletion, and amortization expense to range from $230 million to $240 million, slightly ahead of the annualized fourth quarter run rate as we expect to complete and capitalize large projects. Net interest expense is expected to range from $88 million to $90 million, down from $102 million last year, primarily reflecting debt reduction that occurred in 2025 and opportunistic debt paydown in 2026. For 2026, we expect an effective tax rate of 17.5% to 19.5%. We will update this guidance as needed following the anticipated close of the barge divestiture. I will now turn the call back to Antonio for more discussion on our 2026 outlook. Antonio Carrillo: Thank you, Gail. For 2026, we anticipate revenues to be in the range of $2.95 billion to $3.1 billion and adjusted EBITDA to be in the range of $590 million to $640 million, excluding any impact from the barge divestiture. As outlined in the earnings press release, our guidance for barge includes full year revenues of $410 million to $430 million and adjusted EBITDA of $70 million to $75 million. We will update our full year guidance once the divestiture closes. Our 2026 guidance incorporates another record year for our growth businesses, Construction Materials and Engineered Structures, with combined double-digit adjusted EBITDA growth and margin uplift. At the same time, we expect a short-term step-down in wind towers before recovering in 2027. In our outlook comments today, we will focus on the Construction Materials and Engineered Structures segments. Beginning with our first quarter 2026 results, we expect to eliminate segment reporting for Transportation Products and report results for the barge business as discontinued operations. In Construction Products, we anticipate another record year of revenues and adjusted EBITDA. In our guidance range, we anticipate mid- to high single-digit adjusted EBITDA growth. For the aggregates business, we anticipate low single-digit volume growth and mid single-digit price improvement. With our cost expectations generally in line with inflation, we anticipate solid gains in aggregate unit profitability. Our outlook is supported by solid infrastructure demand, which drives roughly 45% of our segment revenues. IIJA funding combined with strong state fiscal health is expected to support volume growth in 2026. Roughly half of the IIJA funding has not been spent, and there is progress on advancing a multiyear surface transportation reauthorization. Our shoring products business has record backlog, a positive indicator of the underlying infrastructure demand. In Texas, our largest natural aggregates and liquid market, public infrastructure demand remains fundamentally healthy. While highway lettings have been trending off peak levels, the outlook for state spending growth over the next several years is very positive and remains at historically elevated levels. In New Jersey, our second largest regional exposure, the demand outlook is also favorable as both the Department of Transportation and the Transit Authority approved budget increases for 2026. As a reminder, Stavola operations are highly skewed to infrastructure and replacements. Our Stavola operations performed very well in 2025, and we anticipate a solid year of growth in 2026. Stavola has added additional seasonality to our results, particularly in the first quarter. We anticipate that impact to be slightly more pronounced this year as the Northeast has been affected by very cold temperatures and significant snowfall in the first quarter. Turning to private nonresidential market, volumes continue to benefit from data center development, reshoring activity in certain areas, and overall demand for new power generation. Additionally, we are optimistic about future LNG opportunities. Residential remains challenged by affordability, and our outlook incorporates flat residential volume in aggregates. While we continue to experience positive activity in Texas, particularly in the Houston market, residential volumes remain weak overall, notably in the Phoenix and Florida markets. In our specialty plaster business, which serves multifamily construction, we anticipate a stronger second half of the year based on customer backlog and sentiment. Even though we are in an attractive state for residential development, we expect our businesses to benefit when the housing market recovers. Moving next to Engineered Structures. Our businesses play a pivotal role in strengthening American infrastructure, from wind towers that support much-needed new power generation, to utility structures that connect energy to the grid, and lighting, traffic, and telecom structures that address basic infrastructure needs of our expanding nation. I have said before, we believe our Engineered Structures platform is strategically positioned to capitalize on attractive long-term trends. Turning to the U.S. power industry, the expansion of data centers and the rising electricity consumption across the U.S. continues to drive a significant and sustained increase in power demand. Multi-year capital plans underscore our utility customers' commitment to significant power investments along with ongoing efforts to modernize the grid. During 2025, we maintained at or near record backlog levels for our utility structures, and the outlook remains very positive. Industry capacity is constrained, lead times are extended, and we are optimizing pricing and focusing on operational excellence. We are making solid progress on the conversion of our idled wind tower facility in Illinois to produce large utility poles and expect to be operational in the second half of 2026. Additionally, we have placed deposits on long lead-time equipment to maximize output in our existing plants. Our new galvanizing facility in Mexico will complete its first dip this quarter, which will allow us to improve our cost structure and help offset start-up costs in Illinois for this year. For 2026, we anticipate another year of strong double-digit adjusted EBITDA growth and higher margins. Meeting expanded U.S. power needs will require leveraging all available sources of power generation. Cost-competitive wind energy can play a critical role in meeting future energy needs quickly and efficiently. We remain optimistic about the long-term demand for wind towers despite near-term policy uncertainty impacting our anticipated volume for 2026. During the fourth quarter, we received wind tower orders for $190 million, primarily for 2027 delivery. Coupled with orders we received in 2025 and the shift forward of 2027 backlog, we have solid production visibility in 2026, albeit with reduced volumes from 2025. At December 31, our wind tower backlog scheduled for 2026 was $260 million, indicating a decrease of roughly 25% in anticipated wind tower revenues. Importantly, we expect to return to growth in 2027, supported by our current backlog for that year of $330 million. There is still time remaining in the year to book additional 2026 orders, though our customers are focused on 2027 and beyond. Factoring in competitor announcements and the potential for additional moves, third-party research estimates a capacity shortfall existing in 2027 for utility structures. The flexible and strategically located network of facilities within our Engineered Structures platform provides us with the ability to adapt and increase capacity quickly without significant capital investments. As a result, we are currently preparing for a transition of our Tulsa, Oklahoma facility from wind towers to utility structures. At Tulsa, our wind tower backlog stretches through 2027, and we have the ability in that facility to roll both product lines in parallel. As wind tower orders are being finished, we will be moving our people to produce utility poles. Reducing our wind tower capacity to two facilities right-sizes the business and redirects our resources to the higher multiple, higher margin utility structures with a sustained runway for growth. As it relates to our capital allocation priorities, we are focused on investing in our growth businesses, both organically and through acquisitions. We have an active pipeline of additional bolt-on opportunities, both in natural and recycled aggregates, and expect to deploy capital towards the highest value opportunities. We also anticipate reducing debt in the interim to lower interest expense. Our unused $700 million revolver provides ample additional liquidity. In closing, we enter 2026 as a more resilient company. The divestiture of our barge business is a significant milestone in our company's evolution and will sharpen our focus on our key growth businesses, Construction Materials and Engineered Structures. We will now move from our transformation phase to being completely focused on growth as we look to create additional value for our shareholders. We are now ready for your questions. Operator: Thank you. Press 1 on your keypad. To leave the queue at any time, press 2. Once again, that is 1 to ask a question. We will move first to Ian Zaffino with Oppenheimer. Your line is open. Ian Zaffino: Hi. Great. Thank you very much. Congratulations on the barge sale. Thank you. Now as far as the proceeds, how are you thinking about redeploying those, what areas and maybe geographies, or any other kind of color you could give us on that, and the multiples you are seeing out there? Do you have to use that for any—I mean, that is why. Thanks. Antonio Carrillo: Let me give you color on that. As Gail mentioned in her script, first, once we close this transaction—and we expect it to be in the second quarter—there might be some debt reduction in the short term. After that, we have a very active pipeline of opportunities for M&A. Right now, we are looking at mostly within our current footprint, but we do have some opportunities that take us to some new MSAs where we are not present. M&A, as mentioned in the past, has no timing because these things sometimes take time and are mostly family-owned businesses. It takes time to get there. We have a really active pipeline in both our current MSAs and a few new ones. That would be our primary focus to try to accelerate our M&A pipeline, mainly bolt-on acquisitions. These are not enormous things. I have mentioned before, bolt-ons are where we really get excited about margin expansion. We also have significant organic CapEx going on. Gail mentioned a few plant movements within our aggregates business, more reserves, finishing the Illinois facility, the galvanizing facility. I just announced that we are transitioning our Tulsa facility from wind towers to transmission over time as we finish our wind tower orders. That facility is very large and has the ability to do both product lines. The big message here is now that we are a simpler company, we will focus our full attention on deploying the capital to generate additional value for our shareholders through both inorganic and organic opportunities. Ian Zaffino: Okay. We are losing you. What should we expect there? I know we are pretty close to being almost exclusively noncyclical at this point, but any other kind of moves that you intend to do or not do? What should we expect going forward? Thanks. Antonio Carrillo: The cyclical business that we are left with is the wind tower business. As you know, current policy uncertainty creates noise. I mentioned in my remarks that we are very optimistic about the future of the wind industry because, for the first time since we have been building wind towers, we actually need them. The power demand increase is real. I am optimistic about wind. We expect a slower 2026 and a return to higher volumes in 2027. As we enter 2028, that is where we need to start focusing on 2028 and beyond. At the same time, we recognize the policy uncertainty. We have another business that is growing fast, which is utility structures. That is why the transition of our Tulsa facility to more utilities. There is some uncertainty. As we get into 2027, let us see. I am very optimistic about 2028 and beyond for wind. Rightsizing the business to two facilities really reduces our exposure. If the wind industry recovers fast, we will see what we do. For the moment, we will be very focused on growing in utility structures. Long answer to your short question. Ian Zaffino: That is really helpful. Thank you very much. Good quarter. Thank you. Operator: We will move next to Trey Grooms with Stephens. Your line is open. Ethan Roberts: Hey, Antonio and Gail. This is Ethan on for Trey. Thanks for the question. Starting off with utility structures, clearly expected to be a pretty large growth driver in 2026. Revenue was up 20% in the fourth quarter. The magnitude of growth here is pretty impressive, and guidance seems to imply pretty solid double-digit EBITDA growth. So just curious if this may help offset what is expected to be lower volume in wind in 2026, and perhaps any more color on the growth or demand expectations for utility structures in 2026? Thanks. Gail Peck: Good morning. I will take the first part of that question. You are correctly identifying a lot of underlying strength within utility structures. As we look to 2026 and think about our guidance for the Engineered Structures segment, we do see a path to that strong utility compensating for the step-down in wind. We gave a rough estimate for where we are right now for wind backlog, which translates to revenues for 2026. You do see roughly a 25% step-down in wind revenues. Given where we are with utility and the strength of the double-digit volume increases and pricing increases that we have had—and as I said in my script, we saw margin expansion for utility in every quarter year over year throughout 2025—we have strong expectations for the business next year, and we see a path to flat to maybe slight growth within the segment for next year. Antonio Carrillo: From the industry perspective, the numbers reflect what we are seeing in the industry. We are seeing very solid demand. We are seeing very long lead times. We are seeing a move towards larger utility poles, and that is why we are moving our wind tower facilities to utility poles. The big picture for us is we are very excited about the industry. Perhaps how should we think about the implications of our new galvanizing facility in Mexico starting this quarter? The facility already has orders and customers assigned to it. We are going to be ramping up with relative certainty around 2027 being a year where the facility starts contributing to the bottom line. The other facility is a longer-term process. We have orders until 2027, so this is a 2028 and beyond impact. The ramp-up in that facility will be a lot smoother because the first facility was idle, so we have to hire and train people and everything. The other facilities are a much easier transition because we already have people. People are the hardest thing to get and the most important resource for any one of our facilities. Moving people that already know how to weld and produce wind towers to transmission structures is a lot easier than hiring new people. Ethan Roberts: Got it. That is all very helpful. Thanks so much for the color, and I will pass on. Operator: We will move next to Garik Shmois with Loop Capital. Your line is open. Garik Shmois: Thanks. Just on the first quarter, I was wondering if you could maybe follow up a little bit more on the observations around weather in the Northeast impacting Stavola. Any additional perspective on Q1 and from a production standpoint, or the impact there—whether we should think about the percentage of EBITDA in the first quarter relative to the full year and how that is looking this year versus historicals? Gail Peck: Good morning, Garik, and thanks for the question. It has been a cold and snowy quarter up in the Northeast, which will likely impact the cadence of our Q1 as a percent of the total. If you look at last year, Q1 EBITDA for the segment within Construction was about 16% or so of the year. It certainly is a smaller contributor to EBITDA for the year. With the weather and the snow here recently, we will see that percentage share drop just a little bit. You will not see the same contribution as a percent of the whole as you saw last year. Garik Shmois: Okay. Makes sense. Thank you. And then maybe just on gross profit per ton expectations in aggregates for 2026. I know Q4 had some headwinds due to fixed cost absorption in some of the Western markets. How should we think about gross profit per ton for the segment overall for this year? Gail Peck: As I said in my comments, with mid single-digit price and low single-digit volume, and where we sit here today with expectations that costs are generally in line with inflation, we do see solid unit profitability gains for 2026. The cadence of that is always a little bit uneven with the seasonality. Q1 will likely have a tough comp in unit profitability year over year, but for the full year, we expect solid gains in gross profit per ton. Garik Shmois: Understood. Thank you very much. Operator: We will move next to Julio Romero with Sidoti & Company. Your line is open. Julio Romero: Good morning, Antonio and Gail, and congratulations to Jess on his retirement. I wanted to ask about the slope of the accelerating demand in utility structures. You are allocating resources there—Illinois in 2026, Tulsa in 2027. Could you dive a bit deeper into whether the acceleration in demand is being driven by a particular product line or geography? And then from an end use perspective, you said you are seeing demand skew towards larger utility poles. Should we infer that to mean that demand is being driven primarily by new transmission work versus substation? Antonio Carrillo: The slope we have seen over the last couple of years has become more pronounced. As we look at backlog, order intake, and customer reservations that are not yet in backlog, we see the need to accelerate our capacity expansion because our customers need it. In this industry, like in every other one, if we do not do it, someone else is going to do it. We need to be there for our customers. We are a company that has a significant share of our revenues tied to longer-term contracts, and we have had very long-term relationships with our customers, so we have the obligation to respond to their needs, and that is really exciting to us. It is not a regional thing. We see it all over the country. That is why one plant in Illinois and one plant in Tulsa give us further coverage. The overall sentiment is very positive. We did not do this just on hopes of good demand. We had a market study by a third party analyze utility investment over the next five to ten years, and we see this slope continuing to accelerate at least from here to 2030. We have to acknowledge it, plan for it, review it frequently, and make sure that every step we take has the basis to make the right choices and the right capital allocation. We do not do it just based on our gut feeling. We have solid data behind our thinking. On those customer reservations, our customers are mostly utilities. We have a few customers that are EPCs, and for the most part, we do not sell to a hyperscaler. Our customers are the people who supply power to developers and hyperscalers. It might take years. If someone is trying to build a data center right now, it might take two to three years for us to start seeing any noise around it. The move to larger poles that we have seen over the last couple of years has to do with that increase in loads in certain areas. It has to do with permitting, and it has to do with rights of way. It is easier to put a big pole rather than a lot of small poles. It takes less space. You see it also in the conversation on the 765 lines, the very large lines. Bigger lines with higher voltage add resiliency to the grid. The whole country is reconfiguring to people who have higher loads and higher demands, and everyone is trying to adapt to that. We are part of the mix, but it might take us years to see the orders from the time someone develops a data center. Julio Romero: Excellent. Very exciting. I will pass it on. Thank you. Operator: We will move next to Brent Thielman with D.A. Davidson. Your line is open. Brent Thielman: Thanks. On Engineered Structures, you have been in a pretty tight range of margin throughout 2025. I want to get a sense of whether those sorts of levels are sustainable into 2026. It sounds like you could have a bit of a different mix within the segment. Does that have a material impact through the year? Maybe just help us understand that piece. Gail Peck: Good morning, Brent. Great question. There are two different stories going on within Engineered Structures for 2026. We feel very comfortable with the visibility we have in wind, but with that revenue step-down, and some lost absorption, we will see a margin impact on the wind side. Does utility fully compensate for that margin impact? There is a chance. We do see utility with good year-over-year progression in margin. The way I would say it right now is wind is going to have an impact for sure. A path to flat margins for the segment looks achievable, but we will have to see how the year progresses. Antonio Carrillo: To add some color, there is a path to compensate for that big of a drop in wind. The quality of our EBITDA in 2026 is going to be a lot better than 2025 because we are changing tax credit EBITDA for utility structures EBITDA. The quality of our EBITDA is going to be better in 2026 and beyond as utility structures grows. Brent Thielman: As a follow-up, you have been a patient seller with respect to the barge assets. It has been something that has been discussed for a long time. Congrats on getting something to the finish line here. Could we presume that you built up an M&A pipeline that you really want to act on, and now was just the right time to get this done? I am just trying to think around what finally got this to the finish line. Antonio Carrillo: I have mentioned M&A has its own timing, and we needed to get the barge to a point. I am convinced that the buyer, Winchurch Capital, is going to do very well with this asset because it is at the right spot to sell it. The backlog is there. The trends in the industry are really good. The replacement cycle is coming. They are going to have a really good business to run. I am very excited for our team and for them to buy this business. The timing is right to sell it. Could it have been better six months ago or a year from now? I cannot tell you. Right now, it is as good as we have seen it, and that is why we waited to do it at the right time. There is a long runway for it. At the same time, we have been building our pipeline, and we are excited about some of the opportunities we have going on. I am excited about all these opportunities. At the same time, you have seen us act in the past. The money is not going to burn a hole in our pocket. We are not going to deploy capital to things that we do not think are the best that generate value for our investors. We are not going to pay incredibly high multiples that we cannot afford. We are going to be very disciplined in our capital allocation. The goal is to build a pipeline that we can act on while staying disciplined with our capital allocation. We are going to be a disciplined capital allocator going forward, focused on growth. Brent Thielman: One more if I could. With some of the investments you are making on the utility structure side, including the conversion of the wind facility, could you level set us on how much revenue capacity comes on in 2026 or into 2027? Just trying to think about what you are doing internally and what that adds for you in terms of thinking about growth rates for utility structures. Gail Peck: In terms of 2026, as we have said on the conversion for the wind tower facility, that is the second half of the year where that is going to start contributing. From a steel structure perspective, that would be our seventh steel utility pole plant. That gives you a sense of what type of capacity it is adding. We would see that as more of an impact from a full-year perspective in 2027. The other investments we are making, as Antonio said, include a new galvanizing line down in Mexico. That is not a top-line impact; that is a cost saving as we are bringing galvanizing in-house down in Mexico. From a P&L perspective, as we ramp the Clinton facility in the U.S., the benefits from that galvanizing cost savings should offset that ramp impact in 2026. So, half-year benefit from the top-line perspective for the Clinton plant in 2026, and then you get the full-year impact in 2027. Antonio Carrillo: Okay. Thanks, Gail. I appreciate it. Thanks all. Operator: Thank you. This does conclude the Q&A portion of today's event, and this also brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
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