NWPX - Earnings call transcript Q2 2019

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Operator

Welcome and thank you for standing by. At this time all participants are in a listen-only mode until the question-and-answer session of today's conference. [Operator instructions] This call is being recorded, if you have any objections, you may disconnect at this time.

May I introduce your speaker for today, Scott Montross. Please go ahead.

Scott Montross

Helena. you, Thank welcome and Pipe's call. conference Good to morning Northwest

I and by CEO My Gantt, name the President Montross. Scott Officer. joined is of am company. Chief Financial our Robin I'm

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

I discuss our will second-quarter Robin, now turn to results. who'll

Robin Gantt

Thank you, Scott.

per million Our to to XXXX. was million of million second an XXXX of diluted or compared XXXX the the second $XX.X of of second in in X.X% XXXX. compared Sales $X percent in of XX.X% to the was adjusted in quarter share as net Gross quarter $X.XX net sales second were per the $X.XX XXXX. $X.X $XX.X a share quarter income in of of the quarter loss diluted of loss or profit quarter compared quarter second million

our in million $XX.X best was our cost as profit we of improved hadn't would to XX.X%, are these If Ameron significant were produced. order have these a due meet percent acquisition XXXX. facility. the increases in insurance the working quarter increase in costs incurred additional sales. is Saginaw to the we commitments at as with with our we These offset our in the a recover gross as increase tons and company which sales in $X.X quarter, added related partially since in shifted amounts. sales been The a by to percent sales profit second incurred costs production about million Gross The of volume, fire production to

we from returned the of $X.X an of incentive expense XXXX positive and expense tax quarter quarter second rate compensation million was the of rate in X.X% cost as second of million the had increase in to XXXX. We income higher XXXX to increased in income income. $X.X to XXXX. administrative to of This the general tax Selling, of quarter due second second in XX.X% benefit quarter compared an primarily

continuing estimated Our XXXX by XXX final rate were company tax. the the first XXXX, Section $X.X from issuance Depreciation to and the aspects allowance transition million the in related was $X.X first of million cash credit half of the quarter June, million amortization impacted XXXX. and half in the by the of in In in operations. and first valuation changes the foreign regulations tax in provided of certain of $XX.X XXXX

ongoing which for maintenance of Capital falls of the expenditures. $X.X in $XX first planned expenditures and under half in were XXXX, spending were capital about expenditures capital Saginaw. in building includes equipment the XXXX, million which most and replacement maintenance capital We've total million for

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

Scott Montross

compared million progress backlog, expect we As bidding orders in first to and million was current in quarter of elevated on backlog of including Based quarter as remain $XXX XXXX, XXXX. calendar, $XXX second record $XXX to June confirmed our XXXX. XX, million we the a the the through

gross have from Saginaw strong facility, Despite profit the led schedule. The is landscape, levels, significant profit coating elevated stable very progressing gross competitive a shown that's quarter and the according to fire fire-related revenue, the this the to Saginaw is which solid time at at second rebuild demand facility improvement our of backlog coating margins. impact and in cost

the could levels be coating previous improve. quarters expenses the in related have earnings said calls, and next to at with our the coverage but fire similar, Saginaw to that revenues the to from margin quarter couple insurance of we continue And plant. timing margin third expect anomalies We as

projects. over market, major expected water continue following years. current upcoming the and last the programs, In SWIFT Lake billion at Houston Texas well projects and the in fund look the to is six funded into like to SWIFT a project is Bois The transmission the over program $X future. d'Arc has

various surface is Houston of been about the the represent segments from Houston segments of The water additional program, to on in multiple and successful of tons pre-manufacturing Pipe XXXX throughout a XX,XXX major of series segments has multi-agency There over segments XXXX individual pipes. are project will XX,XXX multi-year, a XX,XXX ship-complete. representing bid stages the tons tons. Northwest The production bidder that Houston project of with representing are pipes. that

Water of The by of District Municipal XX,XXX portion Raw was begun the lake has the a quarter that tons line approximately the tons production. in The for bidder project on the Lake fourth represents of we pipe, Water various and Bois stages currently project Northwest are represent the which Texas d'Arc Bois in pipes. XX,XXX successful North of of Pipe are awarded XXXX. construction d'Arc segments

this been for X billion are bond line state. funding recently bidder. for Production successful the Western of much-needed the that tons has XXXX. in this on within notified year. water this $X.X infrastructure In the June market, project, the to The California's is late And created we of water XX,XXX finished begin project representing projects bid prop scheduled we have

XXXX/XXXX the appropriated to Resources XX% various the of as of for been have Natural California fiscal According projects year. Agency, funds

see programs will continue Water tons. PCCP X,XXX to stretch generated rehabilitation years. opportunities tons annually bidding which two have relined result over requirements on three out these several to for next the expect We in the over activity representing expect The the for year, market XX,XXX in about California next years. new reuse next programs projects we to

It is of a begin site's funding involve and has water pipeline is over XX XXXX. X. to The that miles will reservoir storage received from XXX-inch projected prop in project

appears as be it Water priority. taking the competing is funding diversion urgent that hopeful start this Project, We're Dakota slowed will project with Red Supply bidding project, In progress River had North sometime within XXX-mile an ton next XX,XXX on for on to which year. Valley flood

of seen bidding that solid environment remained year bidding volume we've second has backlog terms stable territory. in a the quarter in the in record a of Through and XXXX,

second the of stable. XXXX, backlog remain relatively expected half and our will we elevated For

strong conditions continued margins XXXX. result, should of for programs, bidding we to and multiyear year continue of that portion the improve currently expect the the a revenues to medium in a is should progress term, and substantial As beyond expect translate positive business backlog our we as see strength we into rest which through the work because

focused on of margin cost-efficient business focusing over safe reductions we opportunities improving remain our forward, As efficiencies the repair strategic fast, we and volume, the on facility, move performance company restart finding coating for at and of water levels the growth the cost and our infrastructure all and driving of by business. Saginaw

any happy your answer At this be time, questions. of we'll to

Operator

We now [Operator session. a Zane instructions] the begin from We question-and-answer Karimi. will have question

line now Your is open.

Zane Karimi

Robin good Hey, and morning, Scott.

Scott Montross

Hi, Zane.

Robin Gantt

Good morning, Zane.

Zane Karimi

a cost have in? to So be sort all my to other to working once or going on piecemeal if first to to, any more may have comes or process? question they're how claims. is of be Or guys regards insurance color going of and with you acquire timing you kind And of then be with it those, do climb at the regards you

Robin Gantt

So there's the portions of different claim.

order quarter that's incurred in from keep in have the different cost jobs help that We to the we loss equipment the our and property the commitments to keep and going.

and So, received have now, going the statement. on in expenses None equipment that. property toward that's those some right are we of income monies the

a around ship costs those However, planned we'll we the million, And products the longer bit Right that. like that things to year. to receive. by that are take now, additional be going incurred the done to of of coding, $X.X cost end we that's

running. hopefully, quickly in done by the trying the see insurance will and But, up we can and quarter fourth it monies working then. be And with get to the time how them and So, be we're done. all will

Zane Karimi

be that. environments multiyear like capacity Thank then for earlier and talked prior for regards sounds And that And program about stretching you How the progressing? will up from developing, that. is because to quarter Awesome. XH environment And guys you about you on a it that going constraints? how are a into and good. bidding and also today, XXXX. opportunities, with mentioned the talking then I'm bidding you transition to -- backlog Thank

Scott Montross

Yes. at at on million the I best the $X or million And at keep buoy is really tons. bids record $X the to million a time, $X d'Arc like up and only from rest remain this through what not backlog project program couple bidding, different years, somewhere Bois way think that of XX,XXX bidding But, many is are thing say as many, some and in certainly, that year. which of through the we probably said the year jobs, stable look represents have getting because we're looks seeing backlog it seeing a levels. actually as strongest that from Zane, bidding and jobs of would the we're moving year, into the into seen biggest we backlog to those, all earlier high the of expecting, we're that we environment like year next this this as and bigger in seeing get the relatively that perspective bidding we've bidding jobs and helping whole we're it of had that lot is a Lake I

the bid that XX,XXX probably this water running in sections: some into at guess that next us. the your when year. asked initial time, One line, the over raw early really is of for was substantial project was through this look piece two tons that projects, to d'Arc Bois a Lake that you which period year represented and We're So multiyear broken it's be those of going goes question, into I really first you is

And is in it well November, tons. likely early which year, second The that start next of the another water XX,XXX continue We'll December running that'll late piece treated timeframe. year. line, probably into the is late

a is are also there's bit probably million, hard groundwater $X this because little that projects thing quantify at to $X bidding Houston $X like million million, these time. But,

solid probably coming XXXX for year as we're continue see solid base bidding load. bodes multiyear bidding going after very which in and year we're of a of those getting going only bidding projects keeps solid the So bidding to with into the the in but pretty very pieced expectations not expectation really on, seeing a The next well very is going out XXXX. is go of good the it as but XXXX we well off XXXX to a But, a year year, next those into that opportunities in, the and strength bidding gives be beyond. backlog business strong a

Zane Karimi

queue. jump for there. significant. you provided back in will really That's the Thank I outlook

Scott Montross

bet. You

Operator

Thank you.

is question [David next from Our Wright] [ph].

open. line Your now is

Unidentified Analyst

Robin, morning. Scott, good

Scott Montross

David. Hi,

Robin Gantt

David. morning, Good

Unidentified Analyst

think I back that set your said said profit -- remarks in insurance you XX.X%. that gross Robin, you if you a aside, added you again have of the

the Just envelope it dollar press of back putting whole dollar, like release, million that on back in top $X.X you're for looks from the the of...

Robin Gantt

that if use have yes, $X.XX. would the the Yes, to were EPS rate we quarter, in had tax been you around

Unidentified Analyst

So, million? the whole that's back you're income you're going the doing gross just profit, but -- statement on the the $X.X adding million, you're for $X.X

Robin Gantt

That is correct.

Unidentified Analyst

Okay. to And that insurance amount reimbursement? that's the hope from recover fully the you

Robin Gantt

Yes.

Unidentified Analyst

Okay. just revenues extra around Since million in now, in we earlier advance I'm the run schedules quarter year, prices around If contract you're first out -- and million was $XX the rate. have I million well did seems basically the this think, And quarter, the from. kind a laid wondering $XX rate. are on were like $XX come thinking in quarterly of and fixed, hump kind it production $XX where's million of maybe we the a run or you

Scott Montross

the of I more a are would getting say $X jobs expected $X of million, million, probably to million, those over smaller million, that $X this And than period time. we what few David. $X it's get

it, I solid as stable forward as is here. bidding move stable think seen environment been since I've and very the we and I've

more reality would even we're expected. we getting And have backlog. of that pricing of on are what in the higher So, is, of I the than levels projects the some those the think some

is concerned. So, as a that's value the as more bit little far backlog to adding the

to So, on rest year. continue to this see of the expect through we going the

saw see we if really like margins solid margin to like at we've of talked market where into company. million, continue the Robin if as we But as look what of improve looked what that XX%. said, said, go historic where quarter, realm we to going we we margins you $X have the because be above for kind got moves dollar, XXXX, the profit multiple back those Well, about is didn't times this at as that should as the it's about forward kind a million, us issues. the the into XX.X% be And far margins to of we $X.X dollar able we've forward levels are that achieve as fire-related in gross for for second

think good I with I market, the So, think things there's environments, bidding of not the a pricing. up only lining demand, the lot the but

at you pricing steel. any I look have regulated really prices the any to when kind of the steel think haven't the projects related that downward. prices, seen in fall off the -- We steel

should those be So, as forward. margins go expanding we

Unidentified Analyst

Okay.

Just follow-up out jobs to commented that these the two? a on quarter shorter get Are briefly faster turnaround within come that about. door these order smaller or you in things and

Scott Montross

No. Not always.

with kind rest into Some But, of of that be. the pretty of them think I are that business. they normal can the fall cadence a

can get days the the project XX you're of you maybe the that. you notification or lead days because times, steel can bid steel. XX these to start And on to You days, one on that XX and maybe winner, XX so, another buy the maybe maybe after production up of projects

are them and the short that are jobs of do outbidding just kind we're million. into lead were short why which steel up But they Some up chunking relatively with the are. the really backlog, of what lead, times to these ability lead lines to that $XXX is backlog is but

its produced second piece that almost Lake But, XX,XXX second the d'Arc project, the quarter. million we piece in was big winning a Now $XX of Bois of tons, that.

$XX from can in million, think our area. you quarter-to-quarter I that imagine went So, million $XX backlog about up

if math going that you backlog. stuff So, do into lot of a there's

Unidentified Analyst

questions. Yes. I'm asking generally here of because just just the us pressing it's two

Just integration during second the the real any update quickly, comment on Ameron quarter?

Scott Montross

Yes. plants, Pipe where going Northwest come adding with that line margins Ameron said, integration plants very legacy as to revenue the they're top-line, those We starting starting at the think is well. the And to to are Robin our in are. develop

biggest plants we the some line piece in of could completely gone that we I bidding on -- a the is bit some we've may that get jobs our is getting program beginning, the that thing, done the these Robin's a where there getting the we're that legacy program had were understand because lot program, have of when Pipe than doing a heavy when estimating what pages estimated is them David, lifting so think That's XX jobs, a different with through I job, think -- program sync the we're got the margins all little we've long, estimates are point. and that. XX thought were out estimating think when through group at I big and and of going of at to what of has with we we the what costing that but with that's coming this Northwest into had be

any comments integration, do want So, you make to on Robin? the

Robin Gantt

just a well. the everything take fact year going it Integrations year, concerning and actually is absolutely on accretive just from They July last But, over little course. longer. it'll a time take were that we do of very bought are XX bottom-line. to always the Oh, of when

we jobs margins. inherited Some those they we fabulous. said, that, as of the knew that, Scott that weren't And

worked So, are gone through. accretive. that and I would way has those have pleased. they their very have the And we're acquisition to extremely But, well say

Unidentified Analyst

report thanks Great very and much.

Scott Montross

Thanks, David.

Operator

you. Thank

is from Mike Our Morales. question next

Morales, open your question line Mike answer. open. for and me, Your line now is Excuse is now

Mike Morales

me? guys you about Sorry that. hear Can

Scott Montross

Yes, Mike.

Robin Gantt

Hey, Mike.

Mike Morales

outlook you you the congratulations update allocation execution Morning, the second All capital half just execution as are the quarter, for for right. and us give thinking term an the of you Good you Robin. the morning, In medium question. about good Scott. light the on on can now? how my of quarter. the taking look Good Thank on into strong And good

Scott Montross

longer investment Yes. cycle. I plants We're a just few as of we've But, at of to into starting years capital looking the Certainly, is pretty planning give last to had get indication that a should situations. we you the of capital back strategic terms our tough if what pretty over our what low time. going of over good market capital a legacy a think pretty the period start be you in saw in is depreciation amount

Mike Morales

about the integrating thinking anything M&A on that update doing now is you're us talk from that you'd can work there standpoint, now. And the Okay. is that pipeline From Ameron willing any to know an there -- out or acquisition I in that you there? be about give

Scott Montross

long on a M&A I the think, we've strong been time. that for Mike, pretty front

and interesting We've earnings always front. things out or But, drop monetizing looking you three and definitely things, three of assets. Ameron, the to business. interesting. it's on ago several with these in infrastructure pretty water pursue kind out of studs now. taken been things. the added obviously or a gone it we've these started that there through mainly transmission taking And of and through years energy down right then and mode is we've you as hard yes, tubular the the away transparent these we big as them And go boost we're get them one torn work business some got and M&A we're As very calls, of And to you to underperforming of then, But on. that's on may are we kind certainly which pursuing. going some company four We've we the our four

little is When more shareholder cash right we're that to we we're the We're business. that forward. of of the that at what cycle looking going we But business. overstating looking doing. that's now, cash the is looking cycle now piece cash better the And shorter we're go buoy instead of side at a things Mike this the flow that's transmission water of look looking What that the at cycle at, and maybe something bit, CapEx stretches just it's next okay. drive a cash outside obvious at our a the helps we're as on of long OpEx relatively stuff values

are we're to forward grow I is company to shareholder that now are things values and it process business to to better that process we we very continue position the company very go and drive the is forward. a think much work tangent in and there because intention as go we the to as active that the

Mike Morales

up was commentary That on you. the and Scott. Sure. keep results work. Thank very again helpful, Congratulations good the strong

Scott Montross

Mike. Thanks,

Robin Gantt

Thanks.

Operator

in questions at no time. no this are this further There show queue We [Operator time. instructions] questions at

Scott Montross

to to attending call. we're situation the the the about think situation, condition where that everybody projects long for be. in should demand, and up like kind I'd I thank of to excited a going market But, Okay. values that we've very it's business. hoped stable the the with important say the they It's for now and

So we move and to we're results better looking as through time forward this better period.

we just the got over margin or on focusing on value and this to we need over going So, that and the volume cost through company. work the keep to of things like on working margin reducing

margin has helps just the side working for volume over cost the a this position important of on I us. been with very think approach and us the

we and So, you look forward to the better attending quarters for thank call.

Operator

Thank And for participation. your that today's concludes conference. you

disconnect. now may You

Northwest Pipe (NWPX) 9 Aug 192019 Q2 Earnings call transcript