NWPX - Earnings call transcript Q3 2017

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Operator

Welcome and thank you for standing by. At this time, all participants will be in a listen-only mode until the question-and-answer session of today's conference. [Operator Instructions] This call is also being recorded.

If you have any objections, you may disconnect at this time. I'd now like to turn the call over to, Scott Montross.

begin. may You

Scott Montross

Robin Good Call. Bill. President welcome Northwest joined to CEO Financial Thank name morning is Conference by I’m and My the I’m our Scott Pipe’s Chief of Officer. you, Company and Gantt, Montross and and

begin, future to XX-K remind I I for differ and results quarter could are that who forward-looking the everyone our about materially. like Form discussion this turn to most of to that recent on our results. could in SEC Robin, factors statements a make cause differ risk filing call would second to our Please expectations discuss we will that statements As materially will we for refer results the actual actual from expectations. now

Robin Gantt

Scott. you, Thank

million share loss $X.X continuing quarter the per from third $X.XX was to diluted $X.X of of continuing share operations Our per in operation diluted $X.XX or compared income third XXXX. or from million quarter

of impacted The quarter quarter XXXX product third quarter mix profit gross offset the decreased XXXX. fourth volume decrease third quarter of XXXX, timing. a recall, net the XXXX the which third though the required cost the in million taxable decreased gain third price increase XX%, to due results may sales of administrative the pause This of from to to a the quarter, in X.X% of selling as our wage for sales, partially expected of and Denver of was the The the material in realized product the costs XXXX. $XX.X valuation As an benefit gross million by in sale income. the before $XX.X the from in in X%. increase and decrease us GAAP the which until This of property, reduction in even in in headcount. Transmission to to real third $X.X XXXX change U.S. the significantly was X%. Water quarter on from results expected a prices in by million on to in steel quarter quarter in the increased was Water the third in you XXXX. allowance allowance a consider the our $X.X of was swing XXXX. caused the were impacted decrease increase due of loss to Transmission third million caused valuation third XXXX was profit impact Selling, X.X% from of not in quarter general of gain was taxes percent from decreased XXXX. and Sales expense including reduced as lower sales

million remained million $XX We expect that general our in costs between low and will run third administrative the XXXX. quarter. and Interest in expense $XX selling,

We the $XXX,XXX. about will expect that interest be expense XXXX in

a over decreased in very XXXX. capital, third the XXX.X% the from our usual quarter Our operating rate lower the company backlog selling. receivable increased increase cash has our months each net failed quarter caused we of working were credit earnings capital and balances of increased for the is evaluation I than on classified operations of a our all lot our had assets of that our will cash rate an our We've benefit operations costs XX we our in our balance availability months. Houston that the in have not from XXXX. as discontinued than our In book of months amounts we real Capital credit expenses continuing and operations XXXX was above. as operations losses million XXXX, complete income million first Atchison will to statutory in allowance, the the nine rates be million, sufficient sheet it the and fourth cash the small and fixed from agreement as expect agreement the The continuing tax X.X% statement income the in of months excessive rate these volume. maintenance. quarter Depreciation Remaining had held in relative particularly to the of nine working We a for of in because discussed needs although of in amounts were estate increased and $X.X $X.X from the September income small in $XX.X XXXX sale of XX. under we'll which million quarter, support and more for net we nine estimated outflow of an as months. ongoing first likely first The expenditures sale third next XX the subject and value of of was XXXX quarter compared an third related third benefit in quarter in third the the were $X.X assets million the to $X.X as in remains of tax XXXX on next rate their through believe

to Now, our an update on over turn Scott business. for I'll it

Scott Montross

of quarter As second $XX million, of million end of of the backlog September third $XXX XXXX. was the XX, the our compared quarter to XXXX, million end at $XXX the at approximately and

in The that even a supply small to nontraditional margins upcoming related that that be pipe. second quarter The in XXXX water the year. tons bidding and about are has subsided. multiyear series quarter Margin a will a projects. higher. of following started segments made small severe project pressure is stay of slow, program a expect little XXXX. This major Houston revenue the while from segments represent job is to multiple pushouts with is Even XX,XXX of steady. delay but an have outlook will demand recovery weather though and expected current fourth of We transmission remained

The the we segment now successful larger bidder. late it fourth X,XXX and The other begin X first in quarter. quarter There exceed notified segments Houston will smaller bidder. and winning Phase XXXX. the has tons. bid total. we bid Production additional to will represents bid production that scheduled that project are were been third project tons Lake over XXXX throughout this have XX, we This The the scope of are X,XXX for X,XXX several inlet on Capers of increased an in tons and represent Ridge July

for which XX,XXX XX,XXX Another to also X,XXX next tons to California are XX,XXX Santa pipeline half is most water several the be decision pipe. continues schedule the XX quarter XXXX. way A the that to Pipeline, paves There market facility and expecting to will of in XXXX. in The approximately direct and Manager, Water still with of bid program. conservation currently of notably, major the shifted San of on project water XX to and tons Oklahoma is XXXX in beneficiary forward by Bois New expedited The is Mexico supply Atoka in a are The some Cadiz Raw beginning purification Navajo-Gallup of Project could of through this to XX,XXX-ton Supply, that third reaches tracking, as X,XXX-ton to in a procurement segment project a reline a bid. pipe are Water Surface project planned Water Cadiz we known project third X,XXX up Bidding there starting create are of over bid billion. continue XXXX Pure the people. expected in California Garney programs and commence XXX,XXX our entire of XXXX built, the hopeful which a first $X.X Southern The spring Construction Clara Houston invest When X to storage California A, years North program project bidding the recycled tons. construction new and is Second jobs to of bid initial anticipated The that headwinds in is for Water in of represents is City as and purchase project and Lower that XXXX. project approximately pipe. the Southeast reline Project is the Houston The d’Arc segments expected we're for The water is has we're pipeline. XXXX. region, Supply project, represent opportunity start XXXX. exist, scheduled XXXX-ton the upwards Reservoir two into continue program Segment water in Water a will this create in project develop. being summer District, XXX-mile, of with project. District’s The quarter. tons dependable although announced timeframe Adelanto the will of begin that Texas BLM they will project tons Municipal this recent this represents could XX,XXX Valley XXXX move represent still is out a is quarter now of next that the the expected Diego’s the bidding on a The fourth is that This late supply

projects long-term expect expect almost years. This Valley begin quarter Lower The in programs continues to XXXX. XXXX a major the larger Bois Red XXXX. to occurring the be that at Dakota in seeing project. to to supplier The work production miles that major projected would over supply will near project seen In $X program and and stages in be XXXX. total, Atoka three result years. process. has in informed, The a design many we in d’Arc, SWIFT River Program, This they we’ve been have the Second to the first we in recommended same opportunities. be in XX-inch time. year expect that that there billion still been expected and The we XXXX, will Water of Pipeline. In is billion in We begin XXX several we bidding water three In projects since Texas Houston first for of on XXXX, will could additional time and permitting in North In $X.X have be continue is are next SWIFT than bidding begin project program have funding the

expect result, be well and a the we XXXX past years several programs, XXXX. demand years of strong since we As we've three one largest the see to to in last bidding are projects experienced multiyear these expect

capital spending. falls XXXX, maintenance $X have We expenditures of planned million in which total about for under capital most

opportunities this look range strategic further ongoing continue there discuss at at of nothing process transmission active an We This a business. to we're our water that is able is to time. and and for wide

to As discuss we a last continues seeing we're bidding market a over that in stabilized. environment improve that has the continue to quarters, several

the and the quarter third margin year of end the of As to backlog XXXX. a million and $XXX volume, seen demand $XX of in both to improvements the over has from size the we've despite focus of end these XXXX at Due small our a quality on grown backlog million result, our our improved have at very XXXX.

the SG&A focus able corporate focus hours to created in to market The reduction business yield production historical where profit generate and intense a achieved gross reduction to continues our will a at at three This Our now has plant cost in the are cost than on in a to job, the reducing as spending. to XX% generate levels. in water improve. we continues the situation over opportunity spending last higher very our lead years to low margins a reduction two in business man XX% results. on overhead We've XX% per level,

years and quarter the excuse our cash with second Our lending me, to not but borrowed second from is balance it's working years. We've $X demand. lower this to institution million capital than increased strong. -- sheet third in related half in remains five higher support level, XXXX the or ended over two over quarter We

market demonstrated seeing as the we've quality is in by of indicated the will noncore position also and stronger we're to in growth are and balance during sheet flexibility backlog. and than to that's slow calls, closing, is what earnings in our working growth the and to be assets have and We the steady few recovery additional past additional this create exactly ever that this monetizing toward opportunities. we In company cash our bring a but

to the amount system, we're of heading that We demand. believe coming continue with projects we into the a see period through high of

this balance share profitability. facilities. maximize your additional any best cost And the and into sheet the and to of to efficiencies drive create Plant we Houston cost demand, answer continue to to flexibility. head company market assets volume focused the higher property three, on to the questions. one; noncore we As the monetizing and At at over time, would and we will be margin Atchison reductions that Two, our strength this achieving of positions happy be continuing production period

Operator

instructions] first session the Speakers question. now conference. one we Thank from comes our [Operator Thielman. you. This for Brent have begin today's We'll question-and-answer

Your line is open. now

Brent Thielman

Hey. Good morning.

Scott Montross

morning, Good Brent.

Robin Gantt

Brent. morning, Good

Brent Thielman

I Robin, further, Scott the shift to there first course backlog to any and there? lot these but back look Scott over guess the can would of the the front thoughts seasonality bid half jobs know things here. it? on question as Is of a half, build loaded, some encouraging at be schedule is 'XX, around, you opportunity timelines I

Scott Montross

Yeah the got on it Brent. We've project is. right Houston going now

As we've I Capers section. gotten the mentioned, Ridge

got piece Navajo-Gallup we've inlet another another there's the we've piece of. And that another in a there's discussed the going the that tons. So, script. on and we few project It's got Houston, big of that thousand

bidding the year Atoka other 'XX some normal that probably that saw obviously has delays developed starting some with the severe out that's shifting shifting a out little because and pretty XXXX to than small the backlog. year into the we of we So We in part with of higher being a saw. weather see jobs first build

the So, quarter little we see is XXXX same. bit about more 'XX, did probably first second quarter in than of the bidding we in the a

and at really quarter large, d’Arc Bois when with Texas on you what's third start Lower going with looking Atoka. The in is also

the So, than little we a big classify I the probably fourth and quarter quarter's XXXX. bigger saw would as third

of a half XXXX is year year, the obviously I and first bigger second in than at to it look seen seeing XXXX. So, pretty question, seeing we're we're scheduled but us your directly we've toward substantial the guess half it's more in what coming the

the programs it's stays fact demand it's these very plus that encouraging strong out encouraging are that and past So, programs multi-year the pretty XXXX. well

of people out we've lately lot lot we've about good done a programs. with and these talking -- signs a of there's there So, done visits

things the right think So, seeing encouraging out it's pretty we're now. there I that

Brent Thielman

you over that it. bid but I seeing function a are about there? bid your of I That's think thoughts Any competitive is environment great. terms Lot's cost talk last perspective? materials don't changed getting in competitive as what higher, months. a comments of I from in six think the moving Scott, pricing you know much better

Scott Montross

Yeah, out we've business had the get got sometime XXXX non-traditional the into business. that the think guy in of I really

the So that's a off. really the in the country some projects taken harsh region pressure of of on lot Central of the

change assets to Texas also major one obviously We from in of some the saw hands competitors Thompson Pipe.

stabilizing region. a to been Central seeing also the what that's think we're I factor in

the starting to run footprint we're a supply longer get that getting we've I back the or markets. a guess So, nationwide additional to of the in footprint into seen prior smaller to business people

So, really it delays and why continue and right in some outs just improve pricing a thing we're are Atoka But right a that the move moving the market the we're up, obviously and its the moving very in backlog the is I thing is seeing like also to stable allowed with stabilized the prices small reason is encouraging really and delays we're pretty bidding really job which XXXX. to the continues the push environment a job in in said that good seeing has the to with direction seeing margins market direction. the weather severe of delays, is like

normalize that bigger bodes market. to get well out really into bit in The start you XXXX. as So really little better things get we as a of and a get

Brent Thielman

think end half out that margin I about Would by to next over we that most of can work how Scott, quarters? through And three got all you of four now of you've be or filtering Okay. year? first that the next the guess lower the

Scott Montross

it with backlog that with gets our late thought Part in quarter and the be the in of obviously the the quarter. getting the the in work some fourth first third the quarter fourth margins now nice originally fourth delays done going we're issue nice the and got a that to something pushed we've quarter lot we quarter. in think Brent I fourth with we're now to some of through into Yeah, quarter,

think bit get through year we higher as will see to upwards. with as to get expect work market the flow but a fluctuate that continues a whole, continue that we we as next margin the obviously into getting to quarter So, that have develop to quarters get or you see that fourth into and we better the and develops, backlog little as backlog we expect continue that margin to that

pressure pressure As industry, the not and bigger, on upward margins on we're creates side, the backlogs but get not on to bitter, the creates and only upward of our the that what that's starting see. obviously a lot across price

Brent Thielman

in get I'll Thank you. great. back That's queue.

Scott Montross

Thank you.

Operator

[Operator questions Brent in queue speakers, speakers And back Thank time. this came Excuse no at queue. show in you. you. Thank me just instructions] Thielman, we

Brent Thielman

Hey getting could about little a Is easy. as a off Houston from bit early there companies coverage look at there taking too to of participate measures you of that that Scott, some potentially tell? far guys. is the or talk our preventative in it prevention. Not sense any been some has as flood

Scott Montross

early to I tell. think little it's too a

Some that if of on programs and pass. it depends how to federal it's comes

the I of that and think something that's you eventually Brent problems you hear and see that happen. One will with

I take those don't future to being while years out stuff of three, be long issue has some we that as of for are to think probably things planned. around us you yet into still because of even be the see some know a the from it a planned. probably two, time, some And and is four

in with lot the in and to of reasons have their that they which even we're Cadiz could very anywhere the project, seeing. are and large what with where many the with we this have in a a Project this situation believe and seeing in sidetracked would last That which to the that, on. visited years. seems become there's upside. shows that things this of infrastructure, could have and people obviously we close where to do we So San we up, point clearing But participant benefited Bernardino couple visit hurdles our and being they're a over other and next of things Cadiz add at would also point obvious lot create they them to administration few There bit on we're only County focus this have going that that add if in that that relatively is be California for we're be could forecast what them by more weeks little kind at don't

So, we're pretty into go next the we on bullish potentials upside year.

Brent Thielman

That's know great. any Tubular, decision Maybe that infer that there starting period buyers Could monetizing to some talking quote to suggest you've or it. one been I just the about this for go for quite on discontinued looking some you're you're certainly potential asset thought to we sell time, that?

Scott Montross

have obviously is there but process will facility. I more about Even There especially would to are oil we but right there now. guarantee there, but facility. a in in interest with it and what Obviously, still transaction people since is the a that we're Yeah, that have slowly, us in a continue now that that in a in has interest, continued interest we're process, right back facility, more other to doesn't their contact significantly albeit come Brent say talk been with that prices we in is being process a process.

as going we're being there this, is sell in to discontinued continued has to period. obviously that in Robin So, a that XX-month we believe that ops we think beyond

going now, that So, right think based I a possibility. looks decent like it's on on it what's

Brent Thielman

I year self-fund guidance for think guys this be up working picks do do Could think business on this more be would follow-up pick to revolver then relatively of up you about as two that a capital? we that you as lot Great. you think work, Okay. pickup a borrow the into for the can Robin fixed Robin one you in next maybe figure need to how year. activity or or you a thanks and for side, we SG&A And

Robin Gantt

improves, the the well hasn’t with should numbers as shareholders, that business, steady. pick-up years. course it as even which thing G&A incentive hold the Well as compensation, hope think two business everybody that we been participates, one of the else everyone in in we the The past

from may add to that. we but have not looking that, or we're some increases So, like anything slight staff

but there that be So, higher profitability. a should little track higher could bit with

October year. borrowing of our availability all next the revolver With that, current expires in

Otherwise capital clearly at, we one, a what but to to new at we'll transmission now, of really challenges on based able to may looking of point water that business the borrow when we plenty a alone because be we're you to to worst-case continue. little have it cash should room if and look looking year plenty So to your but business be jump needs of with lot, generate I'll the borrow need next scenarios, we does some periods working negotiate if the support just for that. have right a availability, of have

So, just it go looks into 'XX. great as we

Brent Thielman

Okay. the so questions. for Thanks much taking

Scott Montross

Thank you, Brent.

Operator

show [Operator further questions we in no speakers queue. instructions] And

Scott Montross

No other questions Bill.

Operator

We queue. further show at no questions the

Scott Montross

Well, the call. attendance we on Okay. everybody's appreciate

be… will call Next

Robin Gantt

about be March. will It early

Scott Montross

Early March.

obviously here. to So the focused on are improvements make we continuing

So, thank talk again then, bye. and we'll very bye, much you

Operator

today's participation. conference. for you concludes Thank That your

may at this You disconnect time.

Northwest Pipe (NWPX) 1 Nov 172017 Q3 Earnings call transcript