Kg. Foster Company (NASDAQ:FSTR) Third Quarter 2022 Results Conference Call November 8, 2022 11:00 AMm. ET
Corporate Participants
Stéphanie Listwak – Director of Investor Relations
John Kasel – President and Chief Executive Officer
William Thalman – Chief Financial Officer
Conference Call Participants
Alex Rygiel – B. Riley
John Bair – Ascend Wealth Advisors
Chris Sakai – Singular Research
Operator
Have a nice day and thank you for being here. Welcome to L. B. Call on Foster’s Q3 2022 results. At this time, all participants are in listen-only mode. After the presentation of the speakers, there will be a response session. [Operator Instructions]. Please note that today’s convention is recorded.
Now I would like to pass the convention to the Head of Investor Relations, Stephanie Listwak. Continue.
Stephanie Listwak
Thank you, operator. Hello everyone and welcome to L. B. Call on Foster’s Q2 2022 results. My call is Stephanie Listwak, who is guilty of being an investor in the company. Our President and CEO, John Kasel; and our Chief Financial Officer, Bill Thalman, will deliver our third quarter operating results, market outlook and business developments this morning.
We will begin the call with John providing his perspectives on the two recent acquisitions and a divestiture of the company, as well as third quarter performance, adding market development. Bill will then review the company’s third-quarter monetary results.
John will provide a perspective of the company and final feedback. We will then open the consultation for questions. Today’s slideshow, as well as our earnings and monetary information post, were posted on our online page this morning and can be found on our Investor Relations page in lbfoster. com.
Our comments this morning will be pasted to the slides of the effects presentation. Certain statements we make are forward-looking and constitute our current view of our markets and businesses, adding similar comments to COVID-19. These forward-looking statements reflect our outlook solely as of the date of this filing, and we assume no legal responsibility to review or publish the effects of any revision of such statements as a result of new information, as required by securities laws.
For more key points about the risks, uncertainties and assumptions related to our forward-looking statements, please see the data contained in our press release and earnings release. We will also discuss non-GAAP monetary measures and inspire you to thoroughly read our data and reconciliation tables provided in today’s earnings report and accompanying earnings submission thoroughly as you review those measures.
To help you perceive the company’s underlying performance, we will refer to adjusted EBITDA, net debt and adjusted net leverage ratio in today’s presentation. as the Company’s operating performance should be.
These non-GAAP measures are found in the reconciliation tables included in the appendix to the earnings presentation. In addition, in September 2021, we announced the sale of our Pile Products assets and on August 1, 2022 we finalized the sale of our track parts business. Due to the nature of those sales, we have disclosed those ongoing operations activities in our financial statements.
So with that, let me pass the message on to John.
John Cassel
Thank you Stephanie and good morning everyone. Thank you for joining us for our third quarter earnings call.
Before handing over the floor to Bill for a monetary review, I would like to begin by covering significant quarter highs and recent activity, starting with our strategic portfolio transformation achievements.
As previously reported, we continue our portfolio with acquisitions of VanHooseCo Company on August 12 and acquisition of Intelligent Video on July 6. In addition, we finalized the sale of the Track Components business on August 1. These transactions were well aligned with our strategic roadmap, and I’ll cover the moves in a little more detail in a moment.
In our classic business, we faced significant inflationary winds in the peak business that negatively affected our margins in the first part of the year, specifically in the manufacturing business. In the third quarter results, we began to see the benefits of our mitigation efforts with tight margins year-over-year across all segments. We are pleased with the improved margins and legacy prefabricated business, which exceeded 410 foundation issues through last year.
I also deserve to note that a sales adjustment of $4 million was recorded in the quarter by the long-term secure contract agreement similar to Crossrail’s allocation in the UK. The adjustment reduced sales and gross margin for the quarter. In the end, it came down to a business decision. But I would like to upload that our functionality in the Crossrail task has brought a significant price since 2015. And regulation deserves to allow us to take advantage of the developing task opportunities we see at the beginning of the UK. with HS 2, a 10-year assignment linking the cities of London and Birmingham via the high-speed public transport system.
Our adjusted EBITDA increased 111% from $4. 4 million to $9. 3 million on the back of 3% year-over-year adjusted sales growth. This reflects the portfolio movements we have made, as well as the advanced functionality of the legacy business. At the end of the quarter, our order book stood at approximately $273 million, a five-year high and an increase of 17. 7% year-over-year. Order intake levels for the quarter decreased year-over-year due to the timing of train assignment orders. Finally, the quarter’s order grades do not come with any significant activity under the Infrastructure Works Act passed in Congress just over a year ago.
As noted, Bill and I will cover the ordering perspective and call at the end of our ready comments. As a reminder, slide six reflects our playbook with five of the featured projects representing our recent achievements. We made significant progress in our strategic transformation that we outlined on December 21 last year, we completed five transactions adding 3 acquisitions and two divestitures positioning ourselves for successful expansion in the future.
In the past, we communicated our purpose to elements of the slower-growing commodity portfolio into higher-growth technology-driven solutions. The transactions on slide seven constitute our progress toward this action. On June 21, we finalized the acquisition of Skratch with a $7. 4 million acquisition with annual revenues of just under $8 million. Skratch is a UK leader in the virtual systems integration industry, primarily serving retail markets with expertise in complex virtual signage technologies and capabilities.
We also finalized the acquisition of Intelligent Video or IV. This acquisition ended with a total acquisition value of approximately $1 million. IV is a UK developer of high-quality surveillance, security and protection solutions that align with our expansion projects focused on monitoring remote conditions. and visual communication.
Skratch and IV highlight our major strategic expansion projects to remodel LB Foster into a high-expansion technology-driven infrastructure response company, enabling us to access wider target markets in the UK and Western Europe. Regarding divestment, we completed the sale of our track parts business in Canada for $7. 8 million. This sale makes it possible to finance investments in our expansion platforms.
Finally, on August 12, we finalized the acquisition of ant hoosegow, which is a component of our strategic initiative to double precast concrete. [Indistinguishable] head of more than 28 million sales in 21 and significant profitability, which made the acquisition worth approximately 52 million very attractive. We have already noticed VanHoose Company’s forward-looking advancement through integration with our legacy prefabricated business and materializing in customers of the combined business.
In short, those transactions and our legacy effects demonstrate that we are transforming LB Foster to our ambitious goals and building shareholder value. Bill will cover the third quarter financial statements and I’ll come back at the end with some final comments about our market and our business as a whole. To you Bill?
William Thalman
Thank you, John, and good morning everyone.
I’ll begin my remarks by covering the highlights of the third quarter on slide number nine. Please note that the tables in the appendix provide more detailed data on our monetary results by adding the non-GAAP measures to which Stephanie referred. As a reminder, we sold the Pile business since September last year and Track Components in August this year. These transactions are not treated as discontinued operations. Therefore, the amounts presented today come from the Pile business in the segment of metal and measurement products and track parts. Business in the generation and railway facilities segment, unless otherwise indicated, adjusted for comparability.
Third quarter sales were necessarily $130 million stable compared to last year. As mentioned above, net sales for the quarter included a negative effect of $4 million related to the Crossrail deal. and gross profit during the quarter. Higher gross profit through $800,000 or 70 basic issues compared to the prior year quarter. The Crossrail deal reduced gross profit margin through 240 basic issues in the current quarter.
In addition, an adjustment to acquisition accounting similar to shares acquired through VanHooseCo adversely affected gross margins reported through 70 foundation issues. Excluding those items, gross margin for the third quarter was 20. 8%, 370 foundation issues more than the third quarter of last year.
General and administrative expenses increased by $2. 6 million, in part due to prices of $1. 4 million related to the Company’s acquisition and disposition and prospective attention to the acquisition of VanHooseCo. Third quarter adjusted EBITDA increased by $4. 9 million to $9. 3 million, accumulating 111% year-over-year. I’ll cover the drivers of those advanced effects on the next slide.
Operating cash flow was utilized at $5. 5 million in the third quarter, primarily due to higher degrees of operating capital required to achieve strong biological sales and order book at the end of the quarter, which increased 9. 1% compared to the current quarter. Operating cash flow in the fourth quarter, as operating capital needs will minimize the year.
Orders for the third quarter totaled $137. 3 million, down 1. 1% from a year earlier. Orders increased by 5% biologically and 5. 6% due to acquisitions, but were offset by an 11. 7% reduction due to divestments. million year on year due to a biological accumulation of 12. 7% and an accumulation of 6. 7% by acquisitions, offset by a reduction of 1. 6% by divestments.
Slide 10 provides a year-over-year review of the drivers of our functionality in the third quarter. The bridge on the left shows the overall sales update, reflecting a strong biological expansion of $15. 3 million or 11. 8% during the quarter. The effect on portfolio activity totaled $7. 2 million of acquisitions, which was more than offset by an $18. 6 million relief in sales from divested operations.
The adjusted EBITDA chart reflects the effect of classic business expansion and margin expansion, as well as the effect of net portfolio activity on adjusted EBITDA results. Adjusted EBITDA for the third quarter of the current year eliminates the effect of prices similar to the settlement, acquisition and disposal of Crossrail, the VanHooseCo-like contingent care and contingent care accounting adjustment and loss on disposal of track components.
Note that adjusted EBITDA for the third quarter of last year, profit of $2. 7 million from the sale of the pile business. Adjusted EBITDA increased from $4. 9 million to $9. 3 million year-over-year. Classic business and increasing effect of movements in our portfolio.
I would like to note that adjusted EBITDA from our portfolio restructuring efforts increased to $1. 5 million on $11. 4 million less in sales, underscoring the strong leverage generated through this initiative. in the current quarter. The margin expansion in our classic business was primarily due to our prefabrication business, but all segments contributed to improved results.
In the past, we have communicated our purpose to transform our portfolio of slower-growing commodity-like offerings to more successful, higher-growth technology-driven solutions. We are seeing early indications that we are on the right track in our reported effects and look to the future to continue our price-making adventure.
In the next 3 slides, I’ll cover the functionality of our segments, starting with our rail segment on slide 10. Third quarter rail segment revenue increased $3. 4 million year-over-year driven by biological expansion of 11. 8%, partially offset by 1. 9% relief related to acquisition and disposal activity and 5. 3% relief related to Crossrail’s liquidation.
Gross margins were also impacted by $4 million due to Crossrail and, in this agreement, gross profit margins for rails increased by 250 basis points. New orders decreased compared to last year due to the sale of the track components business and the timing of orders basically similar to rail distribution.
Over the past 12 months, sales and orders have been approximately $300 million, resulting in additional changes to the order book. As shown on slide 12, revenue in the precast concrete products segment increased to $10. 9 million or 60. 6% year-over-year. organic sales increased by 25. 2% and the acquisition of VanHooseCo contributed 35. 4% year-over-year. Gross margins increased 450 core issues year-over-year driven by previous activity and the effect of the VanHooseCo acquisition. The margin expansion of our former tender business, which is accumulated through 410 foundation issues year-over-year, reflects the expected completion of the order book generated before the pricing measures, as well as the year-over-year volume accumulation. Segment expansion and overall margins come with $900,000 in stock changes similar to shares acquired through VanHooseCo, which have a negative effect on segment margins through 290 core issues.
Order and backlog grades remain strong in our prefabrication segment and we expect this positive trend to continue with the acquisition of VanHooseCo and announced government financing programs.
Revenue in the measurement and metal products segment decreased by $14. 3 million, or 37. 6% year-over-year. The biological increase in sales was offset by 5. 2% with a reduction of $16. 3 million or 42. 8% in the sale of the pile business. Gross profit margins further increased through 230 core issues due to the sale of the dilutive stacking business, as well as higher costs and a favorable business mix. Favorable sales mix.
Order rates in the third quarter increased by 58. 8%, while the order book increased by 47. 7%, either because it increased primarily due to a giant coated pipe order at our Birmingham, Alabama, plant as part of a carbon capture and sequestration project. Last year’s orders included $13. 2 million related to the divested business pile.
Our year-over-year effects are reflected on slide 14. Year-to-date sales decreased to $40. 3 million, or 10. 1%. The effect of divestitures contributed $61. 6 million to the decline, or 15. 4%, partially offset through biological sales. increases of 3. 5% and 1. 8% due to acquisitions. Net sales in the Steel and Measurement Products segment decreased $51 million or 42. 1% due to pile arrangement. The rail segment decreased $6. 1 million or 2. 7% due to track portion disposition representing $2. 4 million of the decrease, as well as the Crossrail agreement. These declines were partially offset by higher sales of our global friction control business. Strong sales in the southern region of the United States.
Gross profit for the current generation year-to-date was $62. 8 million, a low of $4. 4 million or 6. 6%. Sales of prefabricated. Manufactured gross profit increased to $2. 3 million, adding a gross profit of $1. 3 million from the acquisition of VanHooseCo, which included the stock acquisition accounting expense of $900,000.
Rail gross profit decreased by $1. 8 million due to the Crossrail and metal products deal and measured gross profit decreased by $4. 9 million, primarily from the sale of the pile business.
Year-to-date SG&A expenses increased by $1. 5 million or 2. 5%, $2 million related to the Company’s existing year transformation activities.
Year-to-date adjusted EBITDA, which is adjusted for the effect of Crossrail’s settlement, acquisition and disposal parts and non-current insurance revenue, was $16. 7 million, an increase of 7. 8% over the prior year period.
As expected, our net debt increased in the third quarter to $94 million, with the final acquisition of VanHooseCo for $52 million. On August 12, 2022, we modified our credit facility to discharge approval for VanHooseCo’s acquisition and temporarily amended secure monetary agreements to reflect the transaction.
The amendment replaced the maximum gross leverage ratio until June 30, 2023. The maximum index until December 2022 is 4x. As of September 30, our gross leverage ratio was 3. 3x. With expected money generation from operating activities, we expect our gross leverage ratio to reach the fourth quarter and through 2023.
In addition, in the third quarter, we generated approximately $7. 8 million in money through the disposition of track components and, in the end, earned the federal income tax source refund of $5. 6 million. -equity ratio at the end of the quarter and we are now seeking an additional federal tax refund of $2. 8 million.
As we have indicated in the past, we will attempt to reach a balanced point of debt relative to our overall profitability, money generation and capital design with a long-term goal of approximately 2 times net debt.
My final comments will refer to slides 16 and 17 covering orders, earnings, and order book across the segment. in the third quarter, but that’s just the time of orders. Over the past 12 months, sales and orders totaled approximately $300 million.
We continue to record strong orders in our precast concrete business with third-quarter orders totaling $31 million, up approximately 31% from last year, thanks to the acquisition of VanHooseCo, which has added $7. 1 million in orders since assuming ownership. Steel products and higher measurement orders particularly due to the coating order discussed in the past.
And finally, our consolidated order book on slide 17 reflects strong physical expansion across the portfolio, specifically in the measurement and precast concrete and metal segments. It was the same last year. The order book was affected by a biological accumulation of 12,7 % and a cumulative of 6,7 % similar to acquisitions, partially offset by a minimum of 1,6 % due to divestments. strength of the advertising and advertising markets we serve. While recessionary market situations remain a broader macroeconomic risk, we remain optimistic about the long-term expansion of customers in our services markets.
Thank you for your time. And now I pass it on to John for his final remarks. John?
John Cassel
Thank you, Bill. Continue to slide 19. We’ll provide some final comments on the general market and trading prospects. The portfolio movements we covered on today’s call demonstrate our commitment to executing the strategy and investing in our expansion platforms. in ensuring seamless integration for acquired businesses while evaluating the expansion opportunities presented through our combined businesses, while having more to say about those opportunities in the coming quarters.
As Bill indicated, our order book is at its highest point in five years and that doesn’t come with any significant activity similar to the Infrastructure, Investment and Jobs Act. However, we focus on significant infrastructure projects across the portfolio that are well aligned. With our expansion strategy and board activity is increasing. Those systems will provide some degree of request for assistance if the market situation deteriorates.
As Bill mentioned, our measurement and metal products business experienced an order backlog in the third quarter. This resulted in a 63% backlog during this period. And while overall operating situations are expected to remain challenging for the foreseeable future, we are confident in our ability to weather those headwinds and as demonstrated in our third-quarter results.
In summary, we remain cautiously positive that recession headwinds can be mitigated by researching the government’s infrastructure spending systems over the past two years. As a result, we expect the outlook to be strong or improve demand for our products. and move forward to remain promising.
In the meantime, we have focused precisely on the execution of our strategy, which was launched on Investor Day on December 21. As demonstrated through our movements and effects, we are transforming LB Foster into a high-growth, technology-driven infrastructure response provider. . Guided through our strategy, we remain committed to achieving our ambitious goals of approximately $600 million in revenue and $50 million in EBITDA through 2025. While the effects of this quarter are encouraging, those are the early days of our adventure to repair higher shareholder returns.
As we actively integrate our recent acquisitions, we plan to leverage our expansion platforms and precast concrete rail technologies while continuing to optimize functionality and performance portfolio.
In closing, I am very proud of what our team has completed in such a short time. Your power and commitment make all the difference. I look forward to continuing the adventure with them and reporting on our progress in the coming quarters. Return it to the operator for the Q&A session.
Q&A session
Operator
Thank you. [Operator Instructions] Our first comes from Alex Rygiel with B. Riley. Continue.
Alex Rygiel
Thank you, gentleman. A few quick questions here, the order book looks fantastic. Can you tell us a little bit about the implied profit margin at the end of today?Obviously, this suggests what margins look like as we move into 2023.
John Cassel
Thank you to Alex for joining us today. We appreciate it. And the order e-book is forged with a five-year record in terms of business, we feel good. And, of course, the improvement in profitability is coming. What is this backlog? Bill, you need to give this a little more, a little bit of color.
William Thalman
Hi, Alex. I guess what we’d like to point out is that earlier this year we pointed out that the pre-made order eBook had margins that were a bit depressed compared to the business that had been booked before our value increases that we were going to achieve in this segment. And we started to see it being carried over early in the third quarter and you can see that we had very smart margin functionality in our prefabrication business, either year-over-year and sequentially.
I would add that in the most sensitive part of that, VanHooseCo, which we had for about part of the quarter in 2022, also had very strong margins and was cumulative even for manufactured margins, adding the $851,000 adjustment we had on the acquired accounting adjustment similar to the stock acquisition. So, and I guess, while we were looking for the mitigation measures we took over the course of the year, it took time for it to nevertheless appear on our margins. And this quarter was the first quarter where we really saw that come true, markedly adjusting the Crossrail regulation that depressed margins a bit in the quarter, but we see it more as a non-routine detail that deserves to be us right now.
So overall, I would say our expectation on margins is that the third quarter has been strong and we continue to see improvements from there.
John Cassel
Oui. Je I would just like to repeat what you said there. We had to work on those GSA contracts on the prefabricated side, it’s a smart component of our order book, Alex obliged. And we just didn’t have the ability to take merit. That’s because that gain was limited. So we were able to work on this first component of the year, a smart component of this order book. So we’re in pretty smart shape here for the fourth quarter and beyond.
Alex Rygiel
And then, as we think about recent press releases, related to the carbon pipeline, let’s think about how to quantify that from a profit base and what the timeline of earnings popularity looks like.
John Cassel
Of course. They heard me stutter a bit because of this huge increase we had in the order book, we were expecting that and we’re excited about it. And we must thank our friends, John Doe and the [Sipco] company [ph] and our team in Birmingham who worked hard to make this happen. With Brian Friedman’s leadership in our group, I progress. So, it’s going to be a very, very long project, 2000 miles of pipeline in total, it’s one of the largest orders we’ve ever recorded. Our contribution will be approximately 500 miles with a 24-inch pipe that will cover the outer diameter of it. And we expect to start production in the early quarter of 2023. The actual length will be about 20 million sales. So we haven’t noticed anything like this in a long time.
Alex Rygiel
Fantastic. Congratulations.
John Cassel
Ok, thanks.
William Thalman
Thanks Alex
Operator
Thank you. A moment for our question, please. He comes from John Bair’s lineage with Ascend Wealth Advisors. Continue.
Juan Baier
In the past, he discussed that he had bottlenecks with delivering pre-made products that the end user did have, he had to stay in his own place, essentially. Have you noticed any improvement in this situation?
John Cassel
So, John, thank you again for being with us today and for your questions. It’s getting bigger, it’s an interruption we have with COVID to get the tickets and the preparation of the sites, it’s been improved. And the weather is also helping us in the 3rd quarter. So the scenario is much bigger than what we’ve noticed in the last 120 days.
Juan Baier
It is ok. Another query. As for the recent value of the summit’s carbon responses, it’s a rather debatable project. From what I’ve read, they have about 50% of the rights of way secured or signed through owners. But there is quite a bit of controversy about it. So, the question is, when will you start making American Cast Iron pipes?Or do you think parts of that pipeline where they have the right of way will be built?
John Cassel
Honestly, I think it’s all or nothing because of the scope of the assignment and the other 37 amenities that they attach in combination and then move that over 2,000 miles distributed through the pipeline. I still hear it, it says that there has been a major progress is funded through the personal sector. Sipco is increasing right now. We put your moment mill online and do the same. Therefore, we are very positive and we are sure that it will happen according to plan.
Juan Baier
Apparently, many of those green energy projects actually need them, but they don’t need them in their own backyard. So it turns out that this kind of draft the workshop a little bit there. Last question, I have and that is how fast he does it. Do you think you can pay off this debt? It seems that he has some pretty smart money from the acquisition of VanHooseCo and so on. What is your timeline for this or what is your vision of how temporarily you could reduce this debt point?
John Cassel
Yes. Thanks again. I’ll give Bill the floor. But we knew we were going to do it. That’s how he planned it. But we are satisfied with the money generation we get from our new businesses. We don’t need to be too tall. We’ve been there before. We have learned our lessons. And we also have a small stockpile to make sure we deliver the products to our customers. Bill, do you need to put a little more color?
William Thalman
Oui. Je can go up to that. So when you think about the third quarter, we got the revenue from the acquisition. And we actually had a very smart quarter in terms of earnings, biological earnings growth, as well as sequentially. So it also helped build our working capital. And we also have some equity to structure and working capital for fourth quarter earnings.
So we expect the fourth quarter to ultimately be a pretty strong economic quarter. And then, as we move into 2023, we’ll be pretty wise to pay off the debt beyond that, as the year progresses. I’d also like to point out that one of the things John discussed earlier is that we have our attractions put into some pretty expansion systems similar to the VanHooseCo acquisition. As we enter 23, we’ll look at some of the capital needs needed to help those systems. But we will also be cautious about the level of debt that is likely required to help those systems. And make sure that we are systematic in the payment of the debt, the opposite of the profitability and generation of money that we pay. Let’s incur. I remind everyone that our long-term purpose is around 2x. And in fact, we’re at the top right now because of the acquisition. And our purpose will be to return to that 2x leverage ratio over an era of time.
Juan Baier
Do you have any other divestment opportunities that can help you make money that, if used in this way?Or what do you think in this area?
John Cassel
So if you step back and look at the game manual that I presented today, and that we presented on investor day, it’s a step procedure that we have in our pass portfolio, in those corporations how to generate cash, as well as the viability of the business that goes ahead. Therefore, it is a step procedure.
Juan Baier
It is ok. Thank you very much for answering my questions. Have an end of the year.
Operator
Thank you. A moment for our question, please. And it comes from Chris Sakai’s lineage with Singular Research. Continue.
Chris Sakai
What do you see in the South in terms of prefab sales expansion?And has this entered the fourth quarter?
John Cassel
Yes, smart question. So we’re watching that very closely. And clearly with the acquisition of VanHooseCo now that we are in this type of business. Tennessee is a bull market for us in Carolina, North Carolina is strong. These are great markets for us. And then, near Texas, there’s one of the largest and most promising residential neighborhoods we’re seeing. And we may eventually seek to penetrate the Florida market, despite a recent event there with the hurricane.
So this global component is going very, very strong. This is one of the reasons why we are very positive about VanHooseCo’s operation. And to remind the organization today, we only have one operational facility. We commission the installation on the spot. So we’re waiting for wonderful things to happen. And bringing those, our 60 legacy companies in combination with that, and putting a logo and a product on the market in components, in this kind of market in the south, feels very smart for us.
Chris Sakai
Good, good. And then, prefabricated, what led to gross margin in the core business?
John Cassel
So we talked about it a little bit earlier with Alex, and what we’ve noticed a lot about our. . . We’re handling about $70 million, traditionally arrears in this business, a lot of that is in our buildings and bathrooms, and a big chunk of that goes to the state or federal, or counties. So they are locked into other contracts similar to government contracts, GSA agreements. Many of those types of projects can have a long gestation period, Chris, where they range from six months to a year. So we booked several of those jobs in 2021. And they retained us with very little opportunity to increase our value. So we just had them in the order book. And we did it in the fourth quarter, first quarter and moment quarter of this year. So we feel very smart, where we are today, we can get the value wherever we want and eliminate this delay that we call the restriction. Therefore, the long term seems very smart to us in this sector.
Chris Sakai
Okay, that looks good. And the last one for me. What do you think of new orders and metal products in the measuring box?Is this a developing trend or not?
John Cassel
So, this organization is coming: we have a lot of things contributing to this organization right now. Droit. Et the most important thing was, of course, what happens on the coding side. The other business we have in coding had a very good year. , the acquisition of Willis Ball Winch was a very smart year. And we’ve been very, very pleased with its functionality over the course of the year. As for metal, we sold the organization on piles in September last year. We with the fabulous site. And it’s a little more hectic, but we’re looking for, cash for infrastructure shifts the balance from this year to next year. And we’re starting to see that in this sector, with bridge formwork. He’s been very, very smart for us. And auction activity is incredibly high. And we expect network activity to also remain at 23 and 24 and beyond.
So I think the infrastructure will have a great plan. As Will and I discussed on today’s call, we’ve noticed a lot of auction and coding activity similar to the Infrastructure Employment Act for just over a year. But we are not yet implementing this in our services. First quarter, at the time quarter of next year.
Chris Sakai
It is ok. Thank you for your answers.
Operator
Thank you. [Operator Instructions]. I will pass the floor to John Kasel for closing remarks.
John Cassel
Thank you very much Carlisle. We thank everyone who joined us today. Thank you for staying here. We had a slightly longer speech today. But we thought it was vital to demonstrate and share with you how we think the company was doing and get into the tight aspect of the business. And the fact is, I think we’ve come a long way. Very happy with the team’s paints here with the five acquisitions we’ve made in the last 12 months. And I think the transformation we’re making has to do with the playbook. And particularly in the expansion aspect, it is going well. The car tour is an ambitious purpose that we have set for ourselves in 2025. So thank you all again. Go out and vote. Have a wonderful day. Be automotive. Thank you.
Operator
And with that, we conclude the call of today’s convention. Thank you for your participation and you can now log out. Have a great day.