NWPX - Earnings call transcript Q3 2018

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Operator

Welcome and thank you all for standing by. [Operator Instructions] This call is being recorded.

If you have any objections, you may disconnect at this point. And now I will turn the meeting over to your host, Scott Montross, you may now begin.

Scott Montross

Thank you, Jude. to conference welcome and morning, Northwest call. Pipe's Good and CEO of name is company. president Montross, Scott My the I'm I'm joined by Officer. Robin Gantt, or Chief Financial

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

Robin Gantt

Thank you. Scott.

was Our or for of and costs, diluted of due compared increased quarter percentage third $X.X in general million $X.X in third million our the from third loss increases was million million million Adjusted of related million the transmission tons a Ameron $XX.X of bargain of in operations was adjusted sales quarter XX% per share XXXX of increase the increase and income $X.XX purchase selling a XXXX from acquisition a in a in added profit to acquisition continuing to produced. diluted were about related from $X.X in with acquisition quarter The partially as sale from administrative $X.X million per improved quarter compared ton. restructuring $X.XX Gross sales profit as the gross continuing the the was $XX.X Auto continuing third sales. million quarter and or X.X% operations of decrease and ton This share XXXX. in in by of Selling, XXXX. prices quarter costs. quarter third share. selling Sales $X.X to remaining or to of million due the XXXX $X.XX in was the X.X% to the diluted XX% Houston of compared income offset XXXX. in in operations The third per to cost in percent third quarter price increase XXXX. $XX.X per third a the gains $XX.X

rate nine of portion was significant by a our were and months in first amortization months We net $X.X XXXX, used ongoing compared XXXX of of million million. $X activities of of non-taxable XXXX. In our quarter bargain rates third in the an was statutory well third X.X% the purchase of in the tax as first third rate than quarter subject the XXXX our rate to of expenditures quarter as first benefit million, and nine impacted was benefit the allowance. estimated months the income valuation million about Depreciation income have gain by cash lower the XX.X% to allowance. quarter through In in losses was of quarter current $X were operating In XXXX. XXXX, our rate third maintenance. an for tax in $X.X Capital our of were evaluation nine changes because the which the operating

expenditures to related in and restructuring had $XXX,XXX for the have Monterrey about spending. of capital for total severance million $X maintenance of We capital We under falls charges most planned shutdown which XXXX, demobilization.

real to on recorded million $XX.X sale. million estate Transmission for $X.X purchase based forward gain expect $X.X of sold gain million of the million. a assets Group to and value Water Ameron net the going We led We of The the fair preliminary of for minor and assets $XX.X bargain liabilities. of acquisition incur prepare we a proceeds as amounts for Houston the

quarter. Northwest and into excluding Ameron the the been that acquisition related accretive results Ameron have to third We Pipe's has pleased cost; income note consolidated are results, Northwest to in Pipe's

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

Scott Montross

focused and Water Ameron combined all decisions Transmission are Immediately Group. under quick were and upon bidding on acquisition the We job of integration Northwest efficient a Pipe's umbrella.

a able We will to on and a the and the and where some combined best with be entity as change sales income will it have provide are in jobs strategic goals. specific is be we fits a may due tell what to produced simply understanding moved future be difficult bidding that jobs everything to it decision. between variances We our acquisition locations strategic not as is what

significant full to last the three progress months. we but take over integration months, made have expect We several

along approximately the revenues fourth year since the was should strong As a improving the to level an competitive expect of with as fund projects to largest the which the will we landscape ton quarter a pipes. supporting Houston bidding The Bidding quarter program continue into and major Bois current projects. X,XXX with throughout project program backlog additional water series Houston In be margins and pipe. segments continue project of the reservoir is A projected like Lower program jobs. d'Arc. that SWIFT the of Lower XXXX. of segments XXXX. XXXX Ridge have Bois bidding the Atoka, that tons as Bois to has through project transmission billion project completed of September There $XXX will project. half The Bois construction XXXX. XXth, demand XXXX, district of improving in highest and second bid in of Houston backlog and the first d'Arc additional capers d'Arc end. Three spend The The project progressed begun and represent XXXX including additional the into Water is orders contains year. we remaining continues Lake third represent projects million, mid-October. and XX,XXX outlook half a project represents Shipments Municipal Houston the Lower confirmed of segments bidding on stable upcoming continue through of remained Houston tons as lead trend these could are Houston of XX,XXX following ton tons Texas segments on your the North from through X,XXX the in were the tons segments our an combined will projected to approximately and Houston The segment d'Arc programs fourth the of two Lower of XXXX. the multi-year well of to is quarter multi-agency $X.X by Texas market, major Production of XXXX X,XXX the the has the XX,XXX quarter. of The representing pipes.

procurement fourth late in We start is to are quarter the currently results. the expected Pipe this awaiting year. of

d'Arc In tons in bid a XX,XXX half the market, XX,XXX to Pipe expected late Oklahoma XXXX. over year also the are expected pipeline. The Bois or fourth Raw XX California Bidding over the pipeline Southeast an Lower is years. quarter XXX-mile Supply two of period. of of as representing Atoka segments about $X.X segments project to installation in the second is known to with continue California first in Western the five eight start produced reline Additional will XXXX. ton project Water Northwest next spread billion program in began the production reliner and XXXX and program

quarter quarter De-reliner $Xbillion into Mexico, of In start XXXX large or the at for reliner revenue our continued improvement approval Diego projected a of in to of XX,XXX in XXXX. Dakota, District's XX,XXX is track The second third North and solid tons the portion fourth water be The The for work initial amount With pure of $X.X San pure XXXX. a produced in be bidding backlog been producing Two representing Santa continues the is XXXX. because significant XXX recently trend ton and to fourth tons the bidding SLRC Mexico quarter, has first segment, that program Water the X,XXX out the is with through latest and job fourth MW is XXXX. XXX segments to secured of backlog County We third bid bid is Valley plant. tons job of at which quarter supply represents year on represents January billion mile, annually. SLRC facility. quarter California for in and will which representing are facility contingent the XXXX result project of coming for three city should on River produced our are program which is additional Clara a ton bid bidding tons. see scheduled tons legislature expect X,XXX has San positive quarter reliner to water on that will XXXX will in Valley multi-year a our the at and program work job state a work currently the continue will The each second X,XXX A also Adelanto a program. reline set water which Red X,XXX in the to quarter that Diego's program X,XXX we of the programs, in margins

Transmission of acquisition Ameron synergies. and Our Northwest provides Group the significant Pipe with Water operational cost administrative

continued have earning the our the platform, and ongoing strong business. impact business. through supports transmission further water strengthens Transmission XXXX Ameron the the position in in create positive to customers significant Additional offerings environment expected business better improvement is closing, a beyond. acquisition market the Water of serve major product stable which our and the to and In potentials demand Group on of The

Transmission on at one, Group. integration And any and of improving the driving of the of the forward, by reductions performance cost Ameron move we'd focus time this to As three, business Two, margin company. all be we levels focusing answer your the the questions. Water At happy we of successful over volume. on will efficiencies

Operator

is Our now your open. Instructions] line Brent, [Operator Brent first is from question Thielman.

Brent Thielman

weather Robin would had companies good if about have be would expected on hang you to at it, of thanks, view better Great, up I this given any Scott on curious talked lot business, quarter, or that volumes core was all? issues them that? the a And with guess morning. you just

Scott Montross

over country. would different some last weeks, the say, and obviously, guess in has weather the Texas of rough had been several pretty probably I weather parts there's rough I

sections some bid delays that saying of looks that awards in that of but certain since look to delay like project think we d'Arc like to some Bois that have with it's not delays that may think forward they're cause seen don't lay not It I specific larger various that, does the to spots, weather minor pipeline. projects, might the in anything going the issues once mid-October Brent. I going moving participants be Lower

we that so for So but haven't forth, lot really things of a on seen at point. this delaying and

Brent Thielman

vast then Okay, XX XX expect Scott here to months? that you in how the next And next Do of great. the schedules deliver months? do about over backlog, we over think million majority XX $XXX to the

Scott Montross

come conversion the makeup at is to of you about it you the at backlog quarter. XX% what with guess look and third up to between have backlog to the with backlog, in because look is I backlog that the quarter. thousand the out issue XX% of hundred XX% revenue next the of quarter really goes with couple to think we a Brent, tons about to XX% confer Meaning quarter the the rate of backlog. generally The next to of you're way makeup the either the going the I is next is in the up

some our longer in little longer a little project rate And projects now of generally tunneling have lead. it, backlog has a lead bit bit

pick move right probably revenue. lower will the quarter now upcoming is We of at for at do looking we're into that we what year. end the up least think next converting the percentage into that range as toward So

and a as pushed frankly we I into go and backlogs I I and there's are think that Texas in being numbers year California that go starts now work should through early this to that next result certainly that's quite that drive the high of into bidding in revenue year, right which Texas lot and of should backlog think up. rest think

Brent Thielman

with as Scott I of does guess we're another next getting it or in bit Do half this the backlog little of a like a first as if out you the the after XXXX? opportunities. look, quarter it bookings think, appealing mean a it terms sounds you of big and Okay schedules I now year half in does breather quarter of take first see

Scott Montross

the really that quarter. for that turning bidding of that think is And I when be fourth the somewhere still that this to of in you tons bidding significant at-- area biggest about with I when bidding of a pretty seeing year. a thing look is XXX,XXX huge look you What the the think is in out we're year. at is XXXX, part

at better bid what quarter, bid --that's in when sometime we're demand Atoka a going we in the continues backlog late that the cycle not of happens just I huge is mid just result you the that's So move that --obviously seeing with total unreasonable planning Bois we're should which like XXXX. as bidding as in to quarter I revenues expect upward think I XX,XXX based do it's another the XXXX. October. you When I as pressure XXX,XXX that fourth our thing. have at, XXXX think probably the mentioned look of and XXXX d'Arc what in having in XX,XXX do probably program strong think together putting look is on to that's is in into year we're be margins demand to at in

as little looking a strength at there's we're XXXX. that think I more United Western the States bit in

strong right mean. in So certainly may if not I big it it's as I think what places the be but

Brent Thielman

Scott could the --it's guess how has bid evolved things? months about few last you I talk be the then tightening to up. could and And that. you acceleration appreciate Things going in activity big environment Yes,

Scott Montross

Yes.

I thing industry with going think everybody's moving activities we the are backlog the in are on bidding things right. the that is how biggest what the with is now, I because the think backlog --what's right, see up industry-wide with

move when like pricing backlogs start up that up. move to starts to So

Obviously, I the absorption on think better margin production you've and at and that plants the better to margins. side. results improve, do producing better got the plants overhead start in levels

side would stability business. steel like Brent, of to that the think I pipe now, right in we characterize all the I what bidding the the a look pretty pressure markets see good across is

disciplined of think And there's now, players more just positive to And had and business. business markets when non-traditional a are are is which stabilized long-term I business. left up, volumes at a that you things the approach things have the I that the markets. the think that two with one is the the have to the the for approach really in time a really right more

Brent Thielman

Are are any there land do and digesting or Okay, you Ameron? integrating monetize? there great. otherwise equipment asset might And sizable or guess think I you any

Scott Montross

we'd I wouldn't Transmission looking say the assets. point Water monetizing Ameron be that anything this at at digesting we're as Group

three - in that of don't but down Monterrey that now shutting our calls we working two of we in we so are or on talked have anything process we're the property the about selling working maybe We really don't outside - ago. on process probably of or that We're selling really else.

have look at in I the plants our think operating in as we operating configuration. we configuration that our

shown we But several looks to what a now, it plant sense it's in shutting issue don't front of down have For any the with that. in right we us is years think monetizing makes I it like the last a underperforming we've if that or configuration. that thing do over have reasonable

be anything it, we'll we're continue we'd any shutting point those So Brent. that at down. always And at this looking look don't plants to but we see things, shows at us that

Operator

open. Our next line question Tom Tom, your from now Spiro. is is

Tom Spiro

We across morning. ago. days markets and or was I two or your an look curious and or legislative that of? have Scott, pass may there as a Good Spiro that election initiatives couple Spiro, any or took not propositions ago Capital. Tom did you you had note such day were Hi, passed of a

Scott Montross

they water were Well, bond billion California get one trying had related we bit was was $X proposition general a the of was passed. a that biggest --we in That look that that three obligation at little to for were projects.

bond difficult is know money example which guess prop California, ago appears The is the one, out really probably a been it and billion which publications. And mean and Robin a is for that that thing in down like passed. general like obligation program four see probably years billion stuff kind to that voted water don't going tell of think where $X.X to that storage have down. business is we do we had supply interesting it's Tom, money what they that. is the I did one different I SWIFT But of about they that California for couple projects, because could see Texas But growing. going we

proposition some may on be that that. So one we probably having think influence

lot things on far you're in that And different I as than I us at when A four All have are the a stuff outside see drawing probably that of of things about kind these three, at at be are you're planning the for we going of some been at to that that going offing significant those do looking of that down now that quarter. cycles. realm, have to really work that, in amount Tom haven't number fourth look anything the maybe right seen things we that that board the a what is four, are that. think of propositions years. the road. democratic-controlled five us when it's at As to you're of --the years the on things probably coming looking looking converting house. think Because interesting you to that's said look other or on huge at projects affect

of One get that's things they programs, is be to said able that support focus significant there's on something may be which bipartisan behind. that may going that I they think ultimately to that the infrastructure

I with that's stuff board on right requirements. so. been maybe probably they're the or play. So that getting now long talking pass just to are A a But, is stuff drawing longer the think we're and the time just and coming out I now three, that's that's seeing think that's of about buildup interesting. and stuff things at little us five that four coming lot into Tom, And a bit years for

Tom Spiro

you. thank helpful, that's Well,

particular costs? or update curious costs Secondly, I'm labor could labor move? days you whether see and availability labor us beginning costs to you on in these steel

Scott Montross

about and moving talk are getting that Obviously, I welders it into see that those of labor a little say no bit especially always when bit. going rights like costs I'll to skilled people seems be about will-- things And I that little professions. labor like because before you're talking extinct steel. we a or professions a Well

find it's harder them. to So

really have apprentice you to work put the to So you try train to that to keep programs together those. ones and have

that see moving is up. - do will costs it labor we So be

time, an going certainly And the is cut ago. to various I been pricing going think impact period XX% on steel as for move obviously pricing. tariffs the When what's increased on steel off effectively imports you're in far what's really have put from you year it it's from happened. a really coming products and steel concerned, a prices; that has seen as cause of as they've now the XXX on with to probably about stands right that's up steel we've countries

year-over-year. Now down, And bit tariffs. coming I pricing it's like when you off start the from happens where about up into Canada especially about shutting I'm coil it a country what that's kind and of this the Mexico from steel places really and that's little year. with think that's XX% down mid But talking actually was imports still

ton; like that pricing large I we down has when steel pricing which has and $XXX- about and the that were steel is sure a coil in with stable $XXX but for prices $X,XXX are are for pretty standing a bid coming-- input it's jobs Plate prices because plate now levels us think it's at we on hasn't make gone come stable. coil like we way steel, up not up is us the a ton. high much pricing significantly, is is about to prices, squared that the thing --we easier obviously because

We'd And costs place So generally the of in period to in expect a are in remain remain moving for things upward right movement high now steel time. prices those that there's an year-over-year. place. while

Tom Spiro

just being scuttlebutt Do you the year? deferred theory temporary on be lot projects tariffs hear if wait the the the that we much deal are a and a --it'll a potential about matter cheaper

Scott Montross

that. talking people heard We've about

read and I it wasn't was might it I it was project; of I a out somewhere think about of, a think a project, media a we've there's report have seen Wisconsin been deferment guess product small it diameter it steel versus the project enough read the a steel. you probably into different wouldn't when a information that of was --when But it been that product have you change anyway.

a of delayed pressure really we seen the projects to steel haven't lot on side that related pricing. steel pipe whole have been So

are to have that of timelines some projects that on there's think be I some these met.

that when pipe. are tunneling maybe of the-- sensitive related other So look projects cost, I steel pipe the pipe, projects like some of aren't more you to potentially aren't think things tunneling, tunneling steel that And at really you delaying. some things that pressure when and piling even to micro look at maybe

seen were We forward. at might certainly program But some percentage. because of We is extent this projects transmission doing Atoka really see the moving on forward to those larger You that water seem about And think and is any worried be I worried d'Arc. steel program. we moving the in program to California. were haven't side, delaying cost like those the still But the happening point. about a that work the Lower for Bois Houston reliner now we're anything

the certainly hasn't yet. in down slowed anything increase quite pricing So

Tom Spiro

Well, had. not aggregate a you thanks. of saw once smaller deal new $XX slightly it's lastly I facility million an is than signed I as actually you think which ago credit long recall I And

to a little business size we've with accordion them more down we completed the I an a And $XX new what that guess million demand facility. more that of we the credit in guess I once one surprised I million. flat sort up was better I we're $XXX given acquisition had. to backlogs from and they took of agreement earlier was facing availability think a that and

Robin Gantt

an It's million $XX to In with actually we similar very to it's had accordion what $XXX many is million. before. ways

is do page to have It in option of up. may so the clauses it be XXX one same. the document there we in the exactly is a it case that in So accordion plus but

Operator

At any queue. on speakers, this don't have we time, question

Scott Montross

look like talking about results. And forward then Okay. to Well, in for fourth call. would March you I we thank to quarter okay everybody early our to attending

and care. take you So thank

Operator

today's for concludes That you participating. all Thank conference.

may disconnect. now You

Northwest Pipe (NWPX) 8 Nov 182018 Q3 Earnings call transcript